Dan Hooks propels his organization to new heights by maximizing regional opportunities and building a management team.
“Surviving the latest recession taught us several lessons about the financial health of our company and what we needed to change in order to go from surviving to thriving,” says Dan Hooks, CEO of Party Reflections Inc., Charlotte, N.C. “After taking a 20 percent revenue hit, we formulated a strategy in the middle of 2009 that would continue the growth we had started in earnest in 2008.”
Hooks’ father had launched the party rental store in 1958, a business that rented primarily tables and chairs, and where Dan Hooks worked summers and weekends as a teenager. As soon as he graduated from college in 1989, Hooks came on full time. He took over as president in the early ’90s and has continued to expand the business in terms of offerings and size. (The company had 25 employees in 1989 and now has more than 200, as well as three locations from which it provides a full range of tent and event needs for its clients.)
The growth strategy Hooks and his management team began discussing in ’08 consisted of expanding the business into Raleigh or Greensboro, N.C., or Charleston, S.C., by working a two-to-three year plan. But the plan got fast-tracked when the economic downturn began to affect the company’s revenue. “When the recession hit us in ’09—a year later than it hit a lot of people—we had a ton of equipment sitting around here; we had employees that wanted to work; and we had trucks,” Hooks says. “So instead of playing defense we decided to play offense.”
Dan is a respected member of the tent and event industry. His integrity, commitment to excellence and drive to grow his business inspire others in the industry. ~Sigrid Tornquist
Hooks decided to acquire a small event rental company that was going out of business in Burlington, N.C. He moved the newly purchased equipment to Raleigh, added some equipment of his own and opened Party Reflections’ second store. Opening the new site ahead of the original plan created some challenges. “We wanted to have a manager here at our Charlotte site for a while before moving him to Raleigh, so he would be familiar with our company culture and business philosophies before moving up there,” Hooks says. “We didn’t have time for that, so for a while we had a general manager up there but made the majority of decisions from here. As time progressed the site became more autonomous.”
Understanding the differences in the local market was also a challenge. Despite the proximity to Charlotte, Raleigh had different pricing standards, and not knowing the customer base was problematic. Hooks was able to hire some seasoned employees who had worked for another tent and event rental company in the area. “Hiring people with local industry knowledge helped us grow considerably,” he says. “As for the pricing issues, we built trust and trained the market to help clients understand why we needed to charge more than the area was used to. We know that we can only provide the best possible equipment and service if we make the profit necessary to maintain that equipment and pay for the services provided.”
A matter of opportunity
The company’s second acquisition in Columbia, S.C., was finalized in December 2013 and was the result of opportunity more than it was necessity. The company had grown to a point where the former owner would have needed to make a huge reinvestment in management and equipment to accommodate the growth, so he chose to sell rather than make those investments. “This was more of a takeover of a business that was in a market leading position, and it came with challenges that were considerably different than the first acquisition we did,” Hooks says. “While the first was more about the market, this was more about internal culture—trying to get everybody realigned to a common goal.”
Hooks and his team reorganized the management structure from a hub-and-spoke model to cross-functional management teams. “Growth affects every department and can hurt the way it functions if it’s not managed properly,” Hooks says. “One person can’t handle all the touch points as a company grows,
so you have to appoint leaders in the various departments.”
Bridging the gap
The company’s latest merger happened in September 2014 and was motivated by the desire to stabilize cash flow and employee workloads throughout the year, and the desire to add an experienced industry veteran, Christian Eastman, to the leadership and ownership team of Party Reflections. The rental business is somewhat seasonal and lags from January to March. Hooks purchased Displays Unlimited, a convention services company that experiences its busiest season during those months, to fill that gap. “Although this company is fabric-related (pipe and drape), it’s almost a completely different market,” Hooks says. “But what we had in common was the need for temporary staff and extra trucks during the busiest months. Now employees can work between the two companies, eliminating the need for temporary employees at either. The same goes for trucks. This merger really helps bridge the gap in the slow rental season.”
Hooks looks for opportunities for growth outside the rental industry, gaining support from a business advisory group he belongs to. He meets once a month with business owners from non-competing industries that assist one another with common business issues. “From advice given to me by this group, we hired a CFO to better control our finances and give us the information we needed to succeed following the last recession,” Hooks says.
He also seeks advice from within the industry, meeting twice a year to discuss best practices and compare financials with an industry-related group of non-competing rental owners. “These groups have largely impacted our business over the years because we have been willing to admit that we make better decisions when we seek more information about a subject from outside of our walls as well as within them,” Hooks says.
“While I do not share the philosophy that consolidation can be tackled on a national scale, I firmly believe that a regional company can surely operate in several neighboring cities provided there is an opportunity to share resources. We have taken advantage of a few opportunities that have allowed us to build a regional presence, and our strategy is to further develop this approach as other opportunities present themselves.”
1. Build an experienced and balanced management team—before you start growing.
2. Be willing to make changes in the team as the business grows. Different skill sets are necessary as companies grow, which may mean hiring different leaders.
3. Look for acquisition and merger opportunities by paying attention to what the competition is doing.
4. Test the waters. Sometimes that can be as simple as approaching someone whose business might be struggling and offering your help.
5. Seek advice from other business owners inside and outside of the industry.
Carolina tradition and elegance
When a prominent couple in High Point, N.C., hired Party Reflections to design their daughter’s December wedding at their home a few years ago—requiring 26,950 square feet of tenting—Dan Hooks and his team turned to CAD drawings to help them plan the event. The client wanted the property and tenting to act as an extension of the home, so Party Reflections incorporated natural elements of the house and yard into the fabric structures.
What they ended up with was an 82-by-82-foot cleartop clearspan structure, lifted into place by a crane, which served as the main entrance to the reception. The tent rose more than 24 feet and rested atop an elevated floor 5 feet off the ground. Straight ahead was the fountain tent, a 20-by-40-foot area housing the seafood buffet; to the right, a 30-by-60-foot frame tent acted as the “sushi tent.”
To the left, two band tents measured 60 by 82 feet and 40 by 50 feet. Situated behind the band tents were two high-end restroom trailers in a 10-by-10-meter clearspan structure. The front driveway was lined with 4,100 square feet of vinyl tops to provide a covered greeting area for guests. To ensure rain and tent flooding would not be an issue, Hooks hired a hydrologist to determine the size of gutters and
“Amazingly, this was the second time that year that we produced a wedding of this size in the client’s yard,” Hooks says. “Being invited back to produce two events that required more than 4,000 man hours each, more than 42 trips to their home during each installation, almost 27,000 square feet of tenting for each event, and finally more than 25,000 square feet of elevated and leveled flooring was the ultimate respect for the work we produced for our client.”
This installation won an IFAI Award of Excellence in 2012.
What other industries have you taken tips from?
Certainly from a logistics side we’ve looked at the way other industries handle trucking. Because of research we did outside the industry we now have demountable boxes on our trucks. The warehouse crew will have four to six of the demounted boxes loaded and ready for the drivers when they come in the morning. They can drop off the empty box, pick up a full box and go back out in a shorter amount of time. It allows us to essentially double our fleet without having to double the amount of trucks.
How do you handle the trendy nature of event rental?
There’s no set formula for that, but we try first to figure out if what we’re seeing is a trend or a fad. Trends tend to stay around longer than fads, so if we think something is going to be a trend we’ll go ahead and invest and set a price that will give us a three-year ROI. If it looks like people are asking for equipment and décor that are more of a fad, we’ll try to get our money out within the first six months to a year.