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How to fast-track business growth

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Bob Thorn didn't just take over the reins of a private company selling car parts - he took it public, across the country and now, across the Tasman.

Given his penchant for fast cars, it is apt that Thorn also makes things happen quickly in business.

By any measure, the growth of Supercheap Auto has been rapid since Thorn, a former V8 racing driver, took the wheel in 1993. Store numbers for the Brisbane-based auto parts and do-it-yourself business have risen from eight to more than 200 non-franchised outlets across Australia and New Zealand. A staff of 100 has swelled to 3500. Annual sales, with compound annual growth of more than 27 per cent over the past decade, are now approaching the $500 million mark.
 
As managing director, Thorn is confident the business will continue to prosper, despite the possible emergence of copycats.

Motoring along

Now a publicly listed company, Supercheap Auto bears little resemblance to the niche suburban operation founded in 1974 by Reg and Hazel Rowe, who began a mail-order business from their Brisbane home selling auto parts.

Since the Rowes called in Thorn to expand the business just over a decade ago, the new management team has eased the emphasis on the "auto" in the group's name. Car parts now constitute less than 15 per cent of stock. There is huge demand from DIY clientele for hardware items, tools and equipment, while the recent purchase of CampMart is fast-tracking the shift into the lifestyle and outdoors market.

Thorn seems well qualified to run an operation that unashamedly focuses on a core market of males aged 18 to 55: he has driven V8 racing cars competitively and he has a shed in his backyard (television viewers may recognise Thorn as the bloke in the Supercheap Auto ads).

Born in Queensland, he entered retailing in the 1970s with David Jones. Later, he had a three-year stint in Melbourne at the Lincraft haberdashery and homewares chain and ended his tenure as general manager. Thorn welcomed the chance to return to the Sunshine State to take the reins at Super Cheap Auto, and soon realised the potential to grow store numbers and the range.

"You could sense that there was something more to this," Thorn says. "The car was the core component, but it became more about products that were related to the car - the garage, the boat, the yard - for males and females who wanted to do stuff for themselves."

Taking over a family business brought added pressure.

"It was an unusual situation," Thorn says. "Although it was profitable and it was a nice little business in South-East Queensland, it certainly needed to be re-engineered to take it forward."

To their credit, the Rowes agreed to the overhaul. "It has to be admired," Thorn says. "It was a bold decision. A lot of people who are in private business struggle with that and are not certain in which direction to go."
 
As part of stage one of Supercheap's reinvention, Thorn set about improving staff recruitment and training, modernising store designs and ramping up marketing and technology. To eradicate a "fear mentality", staff were given a clear outline of the business' future. Systems and processes were in; hand-ticketing of stock was out: replaced by barcoding and, later, a computer-controlled order picking system.

Championing retail

Along with dramatic sales success, Supercheap Auto is gaining recognition through industry awards. In 2003 alone, the National Retail Association Awards for Excellence named the business Supreme Retailer of the Year, while Thorn picked up gongs for customer service initiatives and individual achievement. A year later, Thorn was named Australian Entrepreneur of the Year for the retail, consumer and industrial product category. Thorn's leadership approach is two-pronged. He is adamant about the need for setting clear objectives. That vision must be shared with staff and stakeholders: "You seek the support of people in your organisation to help drive towards that objective."

He can be a demanding boss, "but I hope that I'm considered to be a fair person who is prepared to listen to individuals".

"We seek opinion from our people regularly and try to identify ways we can improve ... and I think that is at the core of our success. We use a team mentality."

Team building is structured. Weekly meetings encourage staff to discuss business goals and problems. Management also tries to give back to its people. A graduate program fosters careers for juniors, while the Supercheap Auto Retail Management Academy has been set up.

In elite company

In July 2004, Super Cheap joined the ranks of the nation's top companies when it listed on the Australian Stock Exchange, opening with a market capitalisation of about $210 million.

Super Cheap's destiny, in the short term at least, is now tied to Australia and New Zealand. In November 2003, Super Cheap Auto opened its first seven stores in New Zealand. Just 53 weeks later, it celebrated the launch of its 29th store in the Shaky Isles.

The acquisition of Western Australia's Marlows and South Australia's Rocca Brothers brands and their conversion to Super Cheap Auto stores has strengthened the group's national presence. In 2004, a deal to buy CampMart fulfilled a promise to diversify beyond hardware and automotive businesses.

For all his planning and strategy, Thorn believes timing and market cycles are crucial to business success.

"There's a little bit of luck," he says.

Branding has been important, too. Apart from the catchy TV ads, exposure through the Super Cheap Auto racing team in the V8 series has been invaluable. "We'll continue to invest," Thorn says. "As a retailer we have to spend money to generate sales through traditional retail advertising, but there is also a need to get the brand exposed and we believe we have used motor sport very effectively to do that."

Super Cheap Auto also reaches the tool shed aficionados through letterbox drops of about five million catalogues, making it one of the biggest users of this form of advertising in Australia.

There have been some mistakes along the way. For one, Thorn wishes more infrastructure had been established in advance of expansion, rather than "backfilling" on IT systems and processes after the event.

And there have been times when bringing the right people into the organisation earlier might have helped.

Those regrets notwithstanding, Thorn advises businesses to adopt some simple beliefs:

  • Set clearly defined objectives - "A lot of people will just roll along without understanding where it is they are taking the business."
  • Ensure senior management takes care of the fine details - "Too often people want to play at the strategic level and look at the big picture and they do not focus sufficiently on the fine detail."

There are signs that Thorn is slowing down, at least personally. He quit race driving two years ago to spend more time with his family. However, the brakes will not be applied to the business as it seeks to grow and diversify. His immediate goal is to open Super Cheap Auto's 300th store. Knowing Bob Thorn, one suspects he will achieve the goal - at speed.
 
Tips

  • Share your company goals with staff
  • Put good systems in place
  • Get the details of the business right
  • "To plan ahead, you must look back."

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 on: Wednesday, January 13, 2010

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