Alex Electric Services in Hialeah gets Small Business Makeover
A passion for tinkering with electronics as a young boy and a stint in the Marine Corps Reserve as a teen paved the way for Alex Varela to own a small business as an adult. Varela, who was born and raised in Miami Springs, always wanted to be an entrepreneur, but he knew early on that it wasn’t going to be easy to accomplish.
“Being a small business owner really is a 24-hour job. It consumes all of you,” Varela said. “I saw that firsthand growing up when my dad, Emilio, had his own business working as an accountant,” he said. “There were definitely struggles along the way, but my dad worked hard and became successful in his business. He inspired me, and I knew that no matter how hard it was, I wanted to do it, too.”
When he was 19, Varela joined the Marine Corps Reserve and served for six years. During that time, he worked as a technician repairing small missiles. It was an intricate job that required discipline and attention to detail, both of which would serve Varela well on the road to owning a small business. But Varela didn’t jump right into entrepreneurship when he left the Marines. Instead, he started working on construction sites in Miami fixing computer equipment and machines. Varela knew that he loved electronics, but he wasn’t as confident about his skills as an entrepreneur.
“I needed to see what being an entrepreneur was like,” Varela said. “I wanted to know what running a business would entail and whether it was something I would really like doing before I made the leap to actually owning one.”
Varela wasn’t an employee for long. Just shy of a year of working for someone else, Varela decided to strike out on his own in 1991. He opened Alex Electric Services in Hialeah the same year. The company provides a range of services from repairing consumer products to installing and repairing electrical systems for buildings and homes.
“Back then, I really didn’t know how I was going to grow a business,” Varela said. “But I knew that I was good at what I did and that I was born and raised here.” He took a grassroots approach to getting the word out about his new company. “Early on, we got a lot of referrals through friends and family,” he said.
As a graduate of La Salle High School in Miami, he had quite a few friends in the area who eventually became his repeat customers. The clients at his father’s accounting firm were also good customers.
Business boomed for a long time, according to Varela. But in 2008, at the start of the economic downtown, Alex Electric Services took a hit financially. “It was a rough time,” he said. “But I didn’t want to lay people off.”
So Varela began pouring his own money into the business to keep it afloat. The economy improved, and the business eventually recovered, thanks in part to his decision to expand into commercial and industrial projects.
Today, he has 14 full-time employees and one who works part time. He owns five trucks that electricians take on service calls. And, according to Varela, the business is profitable.
While many small businesses need help with marketing or customer relations, Varela has an entirely different problem: His business can’t run without him.
Varela, who is married and has two children, wanted to be less hands-on with the day-to-day business and spend more time with his family and on increasing sales of commercial accounts. But to do that, he would need to structure a solid management team and streamline existing processes for things like invoicing and record-keeping.
To get help, Varela turned to the Miami Herald for a Small Business Makeover to help him find the best way to achieve his goals. The Herald, in turn, brought in SCORE Miami, a chapter of the national nonprofit organization of retired volunteers who have been successful entrepreneurs and built thriving businesses. SCORE volunteers use their entrepreneurial skills and offer mentoring services to small-business owners for free.
The SCORE team included Rosa Arboleya, owner of Perpetual Message, a Miami-based design studio. Arboleya has more than 20 years of experience in marketing, Web and graphic design. Alvin Hayes is SCORE Miami’s director of development and has built a long career in sales with companies like Robert Half International and the Kelley Law Registry. He recently was chairman of the 2015 SCORE Miami Business Leadership Awards. Raju Mohandas owns BridgePoint Financial Group. For the past decade, he has worked with small-business owners to obtain financing. He helps businesses restructure and obtain working capital. He recently was named SCORE Miami’s volunteer of the year.
After working with Alex Electric Services for about three weeks, the counselors put the company on the road to running efficiently without Varela at the helm day-to-day. The counselors agreed that Varela had to focus on finding ways to get things running more efficiently by identifying staff members who could manage the process. To accomplish these goals, the counselors recommended the following:
▪ Delegate nonessential administrative tasks: “In this business, Mr. Varela is very hands-on,” Hayes said. “He needs to delete some of his nonessential tasks that are administrative in nature. I suggest that he create a list of the things he does in a day and determine what can be delegated to someone else.”
Varela agreed. “I’ve been so involved in the day-to-day running of this business that it’s difficult to transition away from it,” he said. “But I need to do it because I need to be focused on the bigger picture in terms of sales and on quality time with my wife and two great kids.”
“To increase sales, the company needs to focus on developing a solid sales team,” Hayes said. “Mr. Varela can’t do it on his own. He needs to identify the people in the company that can lead by taking on core managerial tasks.”
To further streamline sales-related processes, Hayes recommended that the company create a contract or estimate agreement for both commercial and residential customers. “Because the company services two distinct sectors, there needs to be agreements in place that take into account the specific needs of each type of customer,” Hayes said.
Mohandas agreed. “When you’re looking at how to improve efficiency, it’s important to examine where you are today,” he said. “Mr. Varela has two key goals in mind, but he needs to put the procedures into place to support what he’s trying to do.”
Hayes recommends developing a procedure manual for office staff and electricians. “Every employee should have input into what goes into the manual,” he said. “The company’s staff does the work every day and have valuable insight into what can be done to improve the system.”
Mohandas recommends making improvements to the system for collecting payment from customers. “Right now, residential clients are on the same billing cycle as commercial customers,” he said. “The company needs to collect payment on residential jobs as soon as the work is complete. Otherwise, they’re waiting three to four weeks to collect on residential jobs. The business reported that their average residential sale is around $600.”
Varela noted that he spent a lot of time doing things the old-fashioned way. After working with the SCORE counselors, he recognized that one aspect of the business he could improve right away is the way he collected invoices.
“I have five trucks,” Varela said. “Each truck does about five calls or so per day, which means five invoices to process per truck. We don’t take credit cards out in the field, so my staff is spending time manually producing invoices. Or if a customer wants to use a credit card, the electricians have to call the office to process a transaction over the phone.”
Hayes recommended using a mobile service like Square to process credit-card transactions in the field.
▪ Implement procedures and protocols to improve inventory control: Mohandas recommended that the company take a hard look at its inventory control procedures to reduce loss.
“Right now, Mr. Varela doesn’t know about every item that goes into each one of his five trucks,” Mohandas said. “He needs to review and manage the inventory by standardizing and limiting the inventory that goes into the truck.”
Mohandas also encouraged Varela to stop using debit cards to make purchases while on a job.
“They need to plan ahead of time the possible parts needed before a job is going out to be executed,” Mohandas said. “This would reduce and possible eliminate the use of debit cards for the purchase of parts and equipment. I would recommend getting some job costing software in place to help the company plan purchases ahead of time.”
Mohandas was confident that by making the recommended changes, it would help the company streamline the purchasing process: “Presently he needs to get control of his business so that he can put the people and tools in place to run it instead of the current status where the business is running him.”
▪ Move beyond word-of-mouth marketing: While Alex Electric Services relied primarily on word-of-mouth to drive sales, Arboleya recommended taking the company’s Facebook page — which had just three likes — and concentrating on building a following of existing customers. “It’s not just Facebook,” she said. “Across the board, the company needs to devote time to growing their social-media platforms.”
This is an area where Varela admitted that he has not had much time to explore. “As the SCORE counselors saw from our Facebook page, we weren’t really putting much effort into social media,” Varela said. “That’s another reason why we sought the help of SCORE — to help us find the right direction.”
Arboleya also recommended developing email campaigns for discounts and promotions that are sent to customers using a free service like MailChimp. “It’s free to send to a list of 2,000 names,” she said. “It’s a free way to get your feet wet. You can also segment your contact list into commercial and residential subscribers for more targeted campaigns.”
Arboleya encouraged Varela to create a branded email newsletter. “Ask all clients, vendors and professionals you meet to join your newsletter,” she said. “To grow your business, it is important to always stay top of mind. Structured emails with informative content is a perfect, inexpensive way to do so. Collect as many email addresses as you can and send out at least one email every two to three weeks with helpful and interesting industry content.”
Timing of the newsletter and its content are key. “Scheduling biweekly or monthly emails keeps you in contact with clients and potential new ones,” Arboleya said. “Newsletter content should be 80 percent useful information and 20 percent specials, discounts or services offered.”
Varela said he was committed to taking the SCORE counselors’ advice: “I learned a lot of things through this experience. I was able to work out ways to delegate and shift responsibility to people who I know can lead. I just had to change my overall approach, and the counselors really helped me with that.”
And he’s hopeful about the future. “My wife is a teacher at Coral Gables Elementary,” he said. “And I know that she is looking forward to me turning the reins over to others so that I can spend more time with my family.”
Tasha Cunningham can be reached at Tasha.Cunningham@cg.mgs.com.
The business: Alex Electric Services has been in business for nearly 25 years and is located at 2245 W 10th Court, Hialeah, FL 33010. The company was established in 1991 by Alex Varela. The company specializes in providing electrical services to residents and commercial structures.
The challenge: Finding ways to streamline internal processes so that the company’s owner, Alex Varela, could get out of running the business day-to-day and spend more time with his family.
The experts: Rosi Arboleya is the owner of Perpetual Message, a Miami-based design studio. Alvin Hayes is SCORE Miami’s director of development. Raju Mohandas is the owner of BridgePoint Financial Group. He helps businesses restructure and obtain working capital. He was recently named SCORE Miami’s Volunteer of the Year.
The makeover: In just under three weeks, the SCORE team identified several ways to help the company streamline its processes and run it more efficiently. They worked with the owner, Alex Varela, to implement strategies and restructure the way the company runs.
How to apply for a makeover
Business Monday’s Small Business Makeovers focus on a particular aspect of a business that needs help. Experts in the community will provide the advice. The makeover is open to full-time businesses in Miami-Dade or Broward counties that have been open at least two years. Email your request to email@example.com and put ‘Makeover’ in the subject line.
Source: The Miami Herald
Writer: Tasha Cunningham
Photo: Hector Gabino firstname.lastname@example.org