Patrick Burns, Sr., President and CEO of Shamrock Controls, sat down with us in San Antonio to talk about his company the the controls business.
Please excuse any typos, this is a hasty transcript of the interview.
Matt Register: Guys, welcome back to Texas Business Radio. We’re down here at the Freeman Coliseum, in San Antonio, at the South Central Texas Manufacturing Trade Show and Conference. Brought to you by San Antonio Manufacturers Association. We’re in the corporate finance associates broadcast booth, booth 326, make it down here, swing by and say “hi”. We are talking about manufacturing. Manufacturing is alive and well in Texas and the show is certainly proof of that. I’m your host Matt Register, here is always with Jay Curry. Jay talk to me.
Jay Curry: Isn’t this just great. I mean the entrepreneurial-ism that’s going on here. The whole industry. And Texas is just huge, having a big impact in the economy. And we’re getting some interesting stories about what’s going on in the economy and what they’re experiencing. We’ve got some stuff to tell our listeners it’s going to be very interesting.
Matt Register: No, I think they’re going to enjoy it. We have here in our last segment Shamrock Controls out of Dallas, Texas is here at the show. Patrick Burns is the president of it. Patrick welcome to the show.
Patrick Burns: Thank you very much.
Matt Register: So tell me a little bit about Shamrock Controls. What do you do? Who do you do it to?
Patrick Burns: Well, Shamrock Controls is a division of our major distributorship called Burns Controls Company. And about 20-25 years ago, being an ex-Marine, I used to buy only things made in America. I realize that not much was being made here and the controls were. So I start traveling around the world and I ran into some people in India, Deli. And they were big suppliers for General Motors cutlet. A lot of the major players in the United States. And I talked them into a deal of, let’s sell their products under a name and the name was very intrigued. They wanted to use an Indian name. But at that time India was testing atomic weapons and I said “I don’t know if it will go”.
Matt Register: Right.
Patrick Burns: So, out of my head, I just said “Let’s called them Shamrock Controls”. Of which later in the night in India I call my attorney and he said “Yeah, I think we can get it”. And so we formed a company called Shamrock Controls. It’s a complete line of IEC motor controls and we warehouse in Dallas, Texas. We have a unique product of how we go. We sell resellers. So we sell end users and OEM as we call them. But our main customer base is we’re a back store door for resellers.
Matt Register: OK.
Patrick Burns: Guys who don’t have a major line but want to buy these controls and they want to make some profit. We have 10 million dollars for inventor and when I first started out it was really rough. I mean who wanted to buy foreign products. Then in the recession of 2003 everybody wanted to make a little money and they were looking to save money and they start looking at our stuff. We had a couple breakthroughs. We sold Apple Computer thousands of units and some other big guys. And what happened from there on is more and more people just found me. And I start doing a little advertising on Google and Bing, you know, things like that.
Jay Curry: Now a thriving business.
Patrick Burns: Yeah. Now, now we get orders every day. We get 40-50 orders from all over the United States and we sell all different kinds of people; manufacturers and end users and mainly resellers. Mom and pop resellers that are… there’s 23 major marketing areas in the United States and yet big distributors in everyone. But there’s a 100000 mom and pop resellers everywhere. In San Antonio there might be 10. And those guys buy from all the major players to go get products. And we can go to them and we can say “look it, we can save you 30-40 percent, ship same day”.
Matt Register: Sure. Similar products. The same thing.
Patrick Burns: It meets all the specifications. If you have a problem, we replace it immediately. And once people realize that they can make more profit with us, especially salesmen. If you’re a commission salesman out selling electrical, you’re going to a percentage of profit is 20 percent and all the sudden you can make 74 percent.
Matt Register: That’s not a hard sell. Right.
Patrick Burns: No know I get calls on everything. Even things we don’t have and they say “don’t get mad”, when I say “no, I’m not”. They say “we always want to check with you because we know we make money”.
Matt Register: Sure. So tell you what, we were talking during the break. And there’s one thing I want to make sure we cover is being able to insulate your company from a downturn or being able to do everything you can to smooth out the peaks and valleys associated with a lot of manufacturing. You guys have done quite a remarkable job of that over the years. Talk to me a little bit about what it is you’ve done purposely in your business to make sure that the downs aren’t so down and the ups maybe aren’t quite so up.
Patrick Burns: Well, let me put it this way. There’s a lot of things of business. The two important parts of business are, number one people and number two our capital. Anybody as a small business that wants to grow. It’s going to have to face that idea they’re going to need capital. If you’re going to get capital, you’ve got to deal with banks. Banks are all about concentration. They want to know that your business is coming from a lot of different areas and that no one customer can be… knock you out of business and cause them a risk, lose money.
Matt Register: Well and this is not only customer concentration but industry concentration.
Patrick Burns: Exactly right. And so I’ve been down here forty five years. We started March 1st 1972 and I’ve been to about two or three downturns in the oil industry and this one here that came up, we just went down 15 percent.
Jay Curry: It’s not bad.
Patrick Burns: We’re doing very well though, on our balance sheets and everything.
Jay Curry: But 15 percent is not bad.
Patrick Burns: Yeah, because we have now we didn’t… You don’t… I’m not talking about losing customers. They stop buying. And they just, you know, don’t need the product right now and they tell you “all these projects you quoted on, maybe in a year or two”. And so you have to have other areas to go to. How about the automotive on the border with Texas and Mexico. How about the electronic business and all that. How about the aviation business up in north Dallas. How about the agricultural business and all that packaging and all that. There’s a million different areas you can sell.
Matt Register: And they’re not all down to the same time.
Patrick Burns: That’s exactly right. And Summer never doubt dairies, food, medical, people have to eat and they have to be taken care of. And so you keep your ear into all these different industries and you try to go from there. Every month when I look at our sales and I see where we buy our products and where our business comes from. I just feel happy that I’m in a position now that no one person is over 70 percent of the whole operation.
Matt Register: Yeah.
Patrick Burns: And the this is a very important fact to us. Now where are we at right now in Texas. I believe I’ve been in business for forty five years, 57 years in this industry. I believe we are sitting on the greatest upright in the swing this going to happen in the next two years, I’ve ever seen. I honestly, I’m not saying this from a negative, from a standpoint of… I just, everything I see is starting to fall into place and I’m really excited. And I think that we’re going to see some very large growth and I say large growth, 20-25 percent of that.
Matt Register: Well, Patrick I hope you’re right man. I’m on your team. I hope, I hope that’s accurate. We could all, something we could all use. That’s exactly right. So Patrick Burns who is the president of Burns Controls Company and Shamrock Controls as well. Thank you very much for joining us Patrick.
Patrick Burns: I appreciate it very much, great time guys.
Jay Curry: Great story.
Matt Register: Hey, you know we are down here at the San Antonio Manufacturers Associations, South Central Texas Manufacturing Trade Show and Conference. This has been a great show.
Jay Curry: It is! Great people here too. Great companies and were hearing great stories. I’m glad to hear that one.
Matt Register: Yeah. Guys, I hope you enjoyed it. We’re going to have everything that we’ve done here right there at Texasbusinessradio.com on audio and video. Don’t miss it. Go ahead and get your questions in for next week 844-814-8144. Again, I’m your host Matt Register, here as always with Jay Curry. That’s all we’ve got for you today. We will see you next week.
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In addition to hosting "Texas Business Radio," Matt is an investment banker and serial entrepreneur from Montgomery, Texas. He is the owner of RREA Media and Register Real Estate Advisors and a Managing Director and Principal at Corporate Finance Associates. He has a BS from the United States Military Academy at West Point and an MBA from Rice University in Houston. You can read more about Matt HERE.