“It was a long time in the making, quite frankly,” he says. “I came in April 2012 and I immediately saw what was taking place. The momentum was building. Specifically, in the health care mar-ket; that’s where this latest peak came from. There’ve been a lot of peaks throughout Beacon’s life, but this most recent one came from more of a health care wave.”
Meanwhile, Colorado’s population growth rate was about double the national average during 2014. Hester, however, takes a more logistical approach to explaining Beacon’s revenue increase.
“The sales cycle for our industry has increased,” he says. “It used to be six months, a year, a year and a half, two years. Now sometimes for us to sell a hospital it’s three to three and a half years from the time we first started working on it until we actually make the sale and put the equipment in.
“Because of that we’ve sold hospitals that we knew we had sold three and a half years ago. We designed it, wrote the spec, met with the customer, they committed to us, but we hadn’t made the sale yet. Then we had sales we’d made two years ago, sales we’d made a year ago. Then all of them were coming to be installed in this last year. It was the culmination of time, the perfect storm, if you will.”
Again, however, Walsh saw early on that Beacon had put itself in a position to benefit from those circumstances.
“I would walk out on jobsites and introduce myself to clients that Mike’s group has been taking care of for so many years,” he says. “You could just sense what was coming. It came. Obviously, we’ve been very blessed to live in a very high economy. Where we are in Colorado is as hot as it comes. When you live in an area that becomes a very popular place to be in the country and you do what Beacon has been doing for so many years, it’s preparation meets opportunity.”
Part of that preparation included hiring Walsh and Wood in the first place. Beacon’s newfound network ability played well in the booming health care market.
“We would go in to meetings,” Hester recalls. “The nurses were sold. Purchasing was sold. But the IT department was going, ‘We’re not sure we like you.’ Then the geek squad of our team would talk to their geek squad and they’d go, ‘Blah, blah, blah.’ You could see the whole meeting change. All of a sudden we were one of them.”
Michael Hester was “completely fried” after 16 years of running Beacon Communications. “When I first started the company, I did everything. I sold, designed, ordered, project managed, installed — everything for approximately 10 years,” he says. “[Wife] Kiffie, who had joined us when we were about a year and a half old, was also fried, because she was top in sales for us.”
It was a little after that 10-year mark when Hester, consciously or not, focused on his exit plan. He improved accounting by hiring a strong controller. He found Wood.
“I could see immediately the guy is just a brainiac. I started to promote him.” Then he recruited and hired Walsh. “I had sales covered, ops covered, accounting covered, everything was all addressed. So we sat down and talked. I must confess to you a lot of the idea was theirs,” he says of his management team.
Meanwhile, Hester had just been elected NSCA president and would assume that role in June 2014, adding more to his plate. So Michael and Kiffie made their move into semi-retirement and to Tampa, Fla.
“Every week I got the reports,” Michael says. “I was on the phone with them once a week. Then after a while it was a couple of weeks. Then it was once a month.” To say it has worked out well since Walsh took the reins as president and COO in May 2014 is an understatement.
“We had our best year we ever had, net profit, revenue and sales, by far,” Hester says. “We had 11 percent net profit, which for our industry is quite rare. They’ve done a tremendous job. It has been a win-win-win. It had to be a win for me because it’s my baby. I couldn’t leave it if I didn’t feel good about it.”
Once again, there are logistical reasons why profits shot up so much in a year in which Beacon’s healthcare business was booming. Walsh says he paid a lot of attention to per-bid pricing. “How much product are we installing per bid? How much is our entire installation going to cost per bid?”
Then he compared it to that of Rauland-Borg integrators across the country and found that Beacon was earning far more per bid than the field. Walsh credits Beacon’s IT expertise.
“We’re doing so much more with each bid. We’re going above and beyond from a technology perspective, getting as much bang for our buck per bid.”
There are also less tangible reasons for Beacon’s mounting success. Hester takes great pride in the company culture he’s established. Remember those integration firms he visited in his Rauland-Borg distributor days where the employees didn’t look happy and “it just didn’t feel good”?
That’s not the case at Beacon. If it was, Walsh probably would have moved back to Tennessee. “We are clear in setting expectations with our team,” Walsh says. “We are very collaborative. We allow our team members ownership. We’re constantly in touch with our employees about their career paths. That’s the kind of conversations everybody wants.”
During that 60 percent personnel growth in 2014 Hester says Beacon had no problem finding employees. “All we did was put out the word to our staff that we were hiring, and people were beating down the doors.”
Hester says his biggest weakness is the same as his greatest strength — his focus on finding the strength in people.
“Sometimes I try too hard,” he acknowledges, keeping employees too long. He grants himself that weakness because it’s that ideal that leads to him being able to step away from his company and leave it to people who are passionately invested in it — and him.
“I’ve been blessed,” says Hester. “I’ve got a great team. They care. All I want to do is win. I don’t care if I carry the ball across. I’d rather stand back, clap and cheer.” And how’s he enjoying semi-retirement?
“I’m very happy.”
Next: Hester and Colleagues Discuss Pitfalls, Profits of Working with Family
