How the Beaumonts are flooring their rivals

In an age when retail is struggling and the number of new homes approved for construction has experienced a sharp downturn, Adelaide-based family business Beaumont Tiles seems to be defying the trend.

Employing about 800, and with a turnover of about $200 million a year, the company is about to open its 100^th store. Beaumont Tiles has stores in every city except for Perth.

While it is a family business, Beaumont Tiles operates as a franchise throughout Australia. It has 50 franchisees, half the number of its stores, but executive chairman and CEO Bob Beaumont expects the firm will have 150 franchisees within three years.

“That's the goal, you've got to be aggressive,'' Mr Beaumont says.

The business was started by Bob's father, RJ Beaumont, in 1960, and Bob joined the business about five years later. His three brothers Peter, John and Lyn are directors, but Bob is the only person in the family working in the business on a day-to-day basis.

There have been a number of acquisitions along the way, with Beaumont Tiles picking up other tile and ceramic businesses in Victoria and Queensland.

But Bob says the big driver of the success of the business is the franchising model. He says the franchisees work as partners.

“The acquisitions were critical, but the building of the business also revolved around adding franchises to it. And so, in 2004, we invented our franchise system so that instead of it being a glorified wholesale sales operation, we built it up into more of a partnership with the franchisees, and that's worked exceptionally well,” he says.

Bob has developed very strict rules about hiring family members. There's no nepotism at Beaumont Tiles. His daughter worked there for a while in product development, but she is now on maternity leave.

Family members who want a job have to first apply to the board and ask for permission to make the application. And when they do, they are given a thorough and rigorous assessment. Unless they are the best job applicant, they don't get the job.

“It's harder for family members to get a job here than it is for members of the public,'' Bob says.

He says it's all part of the culture of a company that shows it cares about its employees, and the community, with the board allocating some of the profits to charities and community organisations.

“A lot of businesses try to demonstrate [that] but we try to be very genuine about that and care about our people and care about our customers and care about the community,'' he says.

He won't disclose how much the company gives away or what proportion of the profits.

“As far as the community is concerned we don't talk about what we give away very much, but we give away a substantial proportion of our profits,” he says.

Beaumont Tiles is structured in recognition that few family members are coming in to work at Beaumont.

“Some years ago I saw it would be necessary to recognise the lack of family members coming through, so we decided to corporatise the business whereby the shareholders of the family formed a board and the company was treated more as a corporate than a family business,'' Bob says.

As well as the Beaumont family board, made up of Bob and his brothers, there is also an executive board that runs the daily operations. No other family member is on the executive board.

One of the things that sets Beaumont Tiles apart from other family business is its use of technology. Bob says the company has always been an early adopter, going right back to the early 70s when it was one of the first SMEs to acquire a computer. “That would be like us buying a corporate jet today,'' he says.

One of the company's big innovations now is scan and play, which allows customers to use interactive touch screens on computers, select tiles and place them in virtual rooms including bathrooms, kitchens, living rooms, bedrooms, and laundries. According to Bob, it's a real breakthrough because every tile is different. He says the company now plans to bring in QR (quick response) codes for tiles, so customers can check out such details on the tile's durability and slip resistance.

He says this was created by the company's R&D team working out of its IT department. The talent, he says, is what keeps the company ahead in this market.

Bob says the Beaumont Tiles culture is critical for getting the best people on board.

“To me the culture needs to be very sincere, and clear on what you stand for, and then you have to demonstrate it. And once you do that, and establish what you stand for as a group of people, then you can attract and keep people who are like-minded, and those people who aren't like-minded will move on.”