Keeping On Top of Trends

Dec 3, 2009

What began as a sideline sunroof installation business is now a thriving 60-plus employee restyling business serving more than 300 dealerships. Now, Tops and Trends is preparing to open a fourth location. That’s a result of completing installations on hundreds of cars a month generating several million dollars in annual revenue.

For the last 14 years, Joey Johnston, controller of Tops and Trends, has helped oversee the family business. Joey’s father Joe Johnston, an engineer, installed pop-up sunroofs on weekends and evenings with Joey’s help as a youngster. After an employment layoff, Joe used his severance package to start Tops and Trends. It grew and in a few years his mother Betsy, a radiologic technician, joined in the family business to help with sales full time.

The Johnston family ran the business out of their home until 1983 when they moved into a 4,000-square-foot shop facility. In the summer of 1988, they moved to their current 13,000-square-foot facility.

In 1992 Johnston graduated from East Carolina University with a finance degree. He worked as a stock broker for several years, but it wasn’t long until he rejoined the family business.

“Having grown up in a family that owned a small business, I saw a lot of advantages in working for myself,” recalls Johnston. “In 1994 I got back into the family business and have been with it ever since.”

In 2002, Johnston opened a second location in Raleigh, N.C. In April 2007, Johnston opened a third location in Asheville, N.C. and plans to open a fourth in Virginia.

“Our goal is to open up several additional locations as market conditions allow,” explains Johnston.

Johnston oversees operations, his mother manages sales and his semi-retired father works in the office several days a week as needed. Johnston recently brought on partner Nathan Ward, formerly of Webasto North America, to help oversee the Raleigh location and facilitate future growth.

“It’s a good mix,” Johnston explains. “We complement one another very well. You know where you stand.”

Varying The Mix

The Johnston family business started by cutting holes in tops and the latest trends in customer expectations keep it going. Tops and Trends offers products that customers have come to expect in new vehicles.

“We started off as a sunroof company, but now we install power sunroofs, leather interiors, heated seats, mobile video, entertainment, navigation and back up systems, truck accessories, convertible tops and wood-grain dashes,” explains Johnston.

Johnston continues to attend the annual SEMA Show looking for that next break-out product.

“The next big thing is probably going to be some type of vehicle telematics, the integration of GPS technology with computers and mobile communications in navigations systems,” predicts Johnston. “If you have a generally accepted communication protocol standard then the market is going to open up and you’ll have everything from hard drives to Bluetooth in one unit.”

Tops and Trends’ mix of customer vehicles varies by location and over time. In the past, it’s swung from cars to trucks and SUVs. But given recent gas prices, there’s a swing toward crossover vehicles and sedans. Crossovers, SUVs and trucks account for 60 percent of Johnston’s business, with cars at 40 percent and 85-90 percent of that dealership based.

“We’re seeing more crossovers and hybrid vehicles,” reports Johnston.

Most of Tops and Trends’ work is dealership based.

“We work with more than 300 dealers, both foreign and domestic. We have a very diverse customer base and don’t depend on just one customer.”

Investing In People Pays

“We’re producing a good quality product efficiently,” says Johnston. “It all boils down to having good solid people. Good employees are everything to producing a good product. They adhere to the same policies with good communication and teamwork.”

Johnston credits his employee payment method as one of his keys to success.

“We pay better than the national average for our techs. We pay a flat rate time according to a manual. Over the years, we’ve established flat rate times for the majority of the jobs that we do.”

New employees complete a training period before they are paid on the flat rate. Each employee has a 90-day review and an annual review with typical cost of living adjustments. Pay grade levels include trainee, apprentice, veteran, journeyman and master’s journeyman. Each one has accomplishment levels with an accompanying pay rate. There are five grades in several departments, such as leather, sunroofs, etc.

“From the day employees are hired, they know what they have to do to make a certain pay grade,” concludes Johnston.

In return for the quality work Johnston takes care of employees.

“We offer paid vacation and holidays, medical, dental and vision coverage and we offer life insurance,” Johnston says. “We have a 401K plan and a profit sharing plan. We give our employees a great benefit package, but we ask a lot of them. We have to have the best workmanship in our marketplace.”

The value of Tops and Trends’ technician’s workmanship shows in its products.

“We look for a product that requires committed training, installation expertise and a high degree of difficulty,” explains Johnston. “The labor component is where we really shine.”

Sources of new employees include newspaper ads, Monster.com, trade schools, community colleges and word of mouth. Johnston’s constant search for good employees keeps him prepared.

“When it comes to employees, you have to always be looking for new employees. You never know when your best employee is going to walk in and say, ‘I’m moving back to Florida.'”

Best Value

Providing value is foundational for Johnston.

“We’re not the cheapest-we’re the best value,” Johnston states. “We receive more for the work we do because we deliver more value and peace of mind. Despite market pressures and rising costs of products and employee benefits, Tops and Trends holds the line on prices. We haven’t changed our price for a sunroof or leather in eight years.”

One of the keys to providing that value and counteracting market price pressures is Johnston’s purchase practices.

“We have to be more efficient and buy in volume to stay profitable. We usually stock more inventory than a lot of other restylers, but it works for us. We look at each offer on an individual basis. We’ll make some sizable commitments to inventory if we receive a deeper discount or freight allowances. We can do that because we have positive cash flow.”

Johnston works with major manufacturers direct because of his volume purchases. He buys some products such as truck accessories through third party vendors.

You Can’t Do it All

All business owners feel like they can conquer everything they need to. Given enough time in the day, most of them can, but there’s not always enough time.

“I’ve learned that you can’t do it all,” admits Johnston. “Another one of the keys for me is that I have a great assistant. I needed someone that I could trust and that had a good head on their shoulders. Kristy is all the things I need in an assistant. She helps me leverage my time.

“I am married, have three children and I coach my daughter’s soccer team and try to be active in my kid’s lives. I want to make sure that I’m not only successful at my business, but in my home and family life as well. That’s a balancing act that you work on every day.”

For Johnston, using time wisely to improve his company’s efficiency comes down to good solid logistics to move cars, materials and people effectively.

“We move employees between our three facilities on a weekly basis,” he explains. “We try to keep all of our stores interconnected so we can always get backup and support.”

Active in SEMA

Johnston has been an active member of SEMA for more than 10 years and currently serves on SEMA’s PRO Select council. He supports the PRO Council’s efforts to make sure that aftermarket product manufacturers are selling products to qualified installers.

Johnston says SEMA’s Pro Pledge Program is a step in the right direction to show the restylers’ credentials and credibility to the dealership community. Tops and Trends is one of only eight pilot Pro Pledge facilities in the U.S.

“Pro Pledge gives dealers and customers assurance that somebody is going to stand behind the aftermarket product installation,” says Johnston.

Friendly Competition

According to Johnston, friendly competition pays dividends.

“I talk to my competitors on a regular basis to know what’s going on in the industry and I swap products with them. I tell my managers, ‘Work with your competition. He may tell you something that will help you unlock the key to more business.'”

Johnston says good competition helps him do the right things. The year one of the leather manufacturers opened its own installation location nearby, Johnston’s store had its best year ever.

“Our sales went up every year after,” recalls Johnston. “We worked harder and became more focused.”

The majority of Johnston’s sales come from word of mouth as well as six full-time sales reps who call on dealerships. He also uses a small White Page phone listing.

Johnston’s goal for the company is to continue to grow at a manageable pace with sustainable growth. That includes opening additional locations, a calculated risk balanced with hard work.

“Expanding to multiple locations is the riskiest things we’ve done. Coming from a finance background, I like to have numbers to verify everything. You do your best to collect and analyze data, but at the end of the day you’re making a gut decision when you enter a new market. We feel our hard work and processes can help overcome any obstacles that come our way.”

Crystal Ball Time

According to Johnston, the restyling industry is moving in the right direction. He is part of a new breed of restylers.

“You’re seeing the torch being passed to the younger breed,” says Johnston. “They are adapting and becoming more aggressive. They have a good business plan, take care of customers and do good work. We have a good group of restylers that are dedicated to the industry.”

For restylers just starting out or who want to get to the next level, Johnston advises, “You have to have something that separates you from the competition.”

What separates Tops and Trends from its competition? The people, policies and processes that keep it on top of the latest trends that build the bottom line.