Interviews

Talking Business - Allyn Beard

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A.H.Beard, Australian’s oldest bedding manufacturer. A.H.Beard was founded in 1899 by Allyn’s great grandfather. Today the family business has factories in every state of Australia, one in New Zealand and recently opened a joint venture manufacturing facility in Silvassa, India. Welcome to Talking Business, Allyn.

PS Allyn, tell us in a nutshell the story of A.H.Beard.

AB Well as you said, started by our great grandfather back in 1899. Funny story that in 1926 the whole thing burnt to the ground. He had a little bit of money in the bank, didn’t have any insurance so he gave each of this three sons a half gold sovereign. With that our grandfather, Albert Henry Beard started off, his wife Ada sewed the covers, he hand stuffed the mattresses. Then it went onto our next generation, our father Austin William, he had three sisters and he passed it onto my brother and myself and we have two sisters who aren’t involved in the business, but my brother Garry and I now run the business.

PS Okay. Now you’ve got a manufacturing facility in ever state of Australia.

AB Yes, correct.

PS Is that right? But people don’t do this anymore, they always go overseas. How come you guys actually stayed in Australia?

AB Well fortunately beds are very bulky items and also retail here in Australia beds are “just in time”. You know, you go in and buy a bed at a shop on a weekend, you think they’ve got it in stock, but actually they order it in most probably on Sunday or Monday, we make it Tuesday, deliver it to them Wednesday.

PS Gee, sounds like you’re making cakes. [laughter]

AB [laughter] Well, you know, it would be nice to have one super factory, which is fairly common in a lot of industries, but because they’re very bulky, because of the just-in-time basis, we need to have factories in every state capital.

PS But on the same point, it’s just fantastic that a local company also has a strong association with the big retailers and distributors out there. Has that been an exercise in its own right to actually be close to the Harvey Normans, the companies like that, to build the brand and build the company at the same time?

AB Oh, certainly. It’s a foundation of our company. My father was the first person to supply beds to Jerry Harvey over 45 years ago and we’re their number one supplier, have a long standing relationship, and we obviously believe we make superior products, but relationships are very very important.

PS And of course the companies you compete against, multinational companies as well, aren’t they?

AB Some of them. One of them is obviously our Pacific Brands and you know that comes with its certain strengths and weakness. But we’re intrinsically a true family business, a lot of members of the family work in the business and we build long term relationships.

PS What about long term relationships with the staff. I know you’ve made a recent decision that would surprise a lot of corporations, would you share that one with us?

AB Yeah. I guess one of the advantages of being in business a long time is we’ve been through these economic recessions before and we disagree with a lot of tactics of a lot of companies that when they have a downturn the first thing they do is sack the people on the factory floor who are the ones who really make the product. We try to trim our overheads to align our business to the new business economics, and so what we did was back in February, the board decided to take a 20 percent pay cut. That was the equivalent of possibly saving 5 or 6 people’s jobs in our factories, because we will come out of this recession and if you have retrenched those people, you’ve lost a lot of skills in a lot of cases and you’re a weaker business. Our aim is to keep all of our people in jobs, maybe even at some times a lesser number of hours per week. It’s not an easy decision but it makes our business stronger and more resilient.

PS We’re talking to Allyn Beard from A.H.Beard. Tell us your experience has been one of a family working in the business and you and your brother have shared this responsibility of running the organisation since your dad passed away, I guess. What’s that been like? Has that been an easy experience because he’s your older brother, isn’t he, as well?

AB That’s correct. Well, I wouldn’t say it was easy. You know, family businesses have their strengths and they also have their weaknesses. Fortunately Garry and myself are two very different people and Garry has an overseeing role looking over all the businesses. As we said before, I’m more in the sales and marketing side, so I’m more out there in the field and I’m face to face with our customers as often as we possibly can be. You have your moments, just like all relationships whether it be a marriage or a family business, but we have a family charter of rules and regulations, we’ve bought non executive directors onto the board which brings a balance to the business, a bit more stability, so it’s challenging but its good.

PS Has the introduction of non executive and non family directors had a big impact on the way in which you two brothers actually interact and talk to each other?

AB Oh, I’d say definitely. I think when you’re just a family you have quite often rivalries or different opinions and so forth, which is normal, but I think when you bring non-executive people and non family members on there it makes you operate more professionally. It has certainly encouraged my brother and I to seek further courses and knowledge and so forth and it’s now a medium-size enterprise and it needs to be run that way.

PS You also quite significantly have a role in the Made in Australia association. What is the correct term for Made in Australia?

AB It’s now “Australian Made and Grown” and it’s been around for quite a few years. We’re one of the charter members, when it was Advance Australia back in the 1980s, and we’re very strongly behind Australian made. Obviously all our products are Australian made wherever we can possibly try and source our componentry from within Australia. Also I believe that if people supported Australian made more strongly, we’d come out of this recession faster and we’d have a stronger economy.

PS Did you think the price differential in many areas is actually big enough to justify the lack of loyalty towards Australian products?

AB There’s always a percentage of the population that purely buys on price and wouldn’t care where it’s manufactured or whether it’s a third world country but there is also quite a few people, which also having a credible brand name, they’re willing to pay us a small premium for that. I think a lot of people realise that it’s important to keep jobs in Australia as well because it has a domino effect that if everybody starts retrenching people, it creates a

downward spiral.

PS You used the word “domino.” Is that a brand of yours or is that a rival brand?

AB No, that is one of our brands. [laughter]

PS [laughter] I thought you might have been dropping a little plug for one of your products. I guess the important question then, where I’m heading is, what is the future of Australian

manufacturing?

AB I think it obviously varies from industry to industry depending on the size of the goods and the labour content.

PS Let’s talk about furniture then.

AB As I said before with beds, they are very bulky and also it’s a style thing that keeps on changing and certainly labour costs are cheaper in China and a lot of Asian countries but

you also have a high freight component which offsets that. But if you’re making components which are much smaller freight component, high labour aspect, you might have to be faced with taking it offshore. We believe that we won’t be faced with that for quite some time. Also, a lot of our retailers are very pro Australian made as well.

PS Finally, your Indian decision. Are you actually going to be making mattresses for the Indian population?

AB That’s correct. We’ve possibly grown as large as we’re going to grow within Australia, we’re now the number two, but in India there’s a burgeoning market and there’s growing affluence in there making the transition from cotton and mats to foam and now innerspring mattresses. And so we’re doing a joint venture with the largest bedding manufacturer there, a company called Sheila who are also the biggest foam manufacturer, and they asked us to give them assistance and advice on manufacturer and marketing our beds.

PS It’s fantastic that India’s growth is also providing opportunities for us. There seems like an enormous potential for Australia between India and China.

AB Oh, it’s a dynamic market. It’s quite amazing and it’s a new challenge for us. Not that we’ve certainly mastered the Australian market – we’re still learning all the time – but it’s a whole new challenge over there.

PS Well, I’ve got to say I think most Australians are always proud of a company like yours that have lasted the test of time and you’re now growing up to becoming a multinational. It’s a great thing. Thanks for joining us on Talking Business.

AB Thank you, Peter.

Work on your business, not in it. To learn how, book a complimentary business assessment today with a Switzer Business Coach.

Important information:This content has been prepared without taking account of the objectives, financial situation or needs of any particular individual. It does not constitute formal advice. For this reason, any individual should, before acting, consider the appropriateness of the information, having regard to the individual’s objectives, financial situation and needs and, if necessary, seek appropriate professional advice.

 

Published: Wednesday, September 02, 2009

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