Real World Lessons for
America's Small Businesses

Real-World Lessons For America’s Small Businesses. Insights from the Blue Chip Enterprise Initiative 1992. Connecticut Mutual Life Insurance Company.  Published by Nation’s Business Magazine, June 1992.

JOHN H. ALLEN CO.

Meeting Low-Price Competition

John H. Allen Co., Inc., a full service remodeling contractor in Jackson, TN, faced three challenges- low-price competition, home remodeling’s generally bad reputation, and maintaining a qualified work force year-round in a seasonal industry.

            Owner-President John Allen and his management team decided these problems, which threatened the company’s profitability and growth, had to be addressed collectively.

            To counteract the industry’s poor image, Allen required key staffers to get involved in community affairs.  He also made a point of compliance with building codes, setting up closer communication with government officials in charge of their enforcement.

            The firm introduced a “customer satisfaction” policy: no payment until the project is completed and the customer is satisfied with the results.

            Implementation of this policy did much to counteract the low-price competition from private individuals, operating out of pickup trucks. Who don’t have overhead expenses comparable to those of a firm like Allen’s.  They also usually don’t have the financial resources to carry a job to completion without installment payments.

            On the other hand, the company could highlight customer peace of mind, emphasizing that its workers are licensed, insured, and bonded- and that all are its employees; it uses no subcontractors.  It found customers willing to pay more for these extras.

            The solution to the problem of maintaining a high quality workforce was to enter a market that can provide year-round work.  The company introduced its services to insurance companies, agents, and adjusters.  The reason: Insurance claims for fire and water losses peak during the winter; and a full-service contractor is needed.  The company got enough insurance-loss projects to keep a work force busy during an otherwise slack building season.

            With increased sales and profitability, the firm has been able to give its 30 employees additional benefits, further tying them to it.

            Allen’s business has grown, and its reputation has spread to a wider area.  When the city established a code advisory and appeals board, John Allen was elected its first chairman.  Last year he was also appointed a city councilman, and his company was chosen the Jackson area’s small business of the year.

Photograph by Ms. Stormy Neal

“Jackson Today”
MOVERS & SHAKERS

July 28, 2005

By Glover Wright 

          John Allen has lived in Jackson for his entire life, where he attended public schools and graduated from Jackson State Community College in the 1970’s before starting his own construction and renovation company, the John H. Allen Company, Inc.

          “When I got out of high school, I wanted to get some of my courses done in a hurry in college, like English.  And I blitzed those at night.  And working in those courses at night, I met a fellow and he gave me my first job at Mike Glenn & Son.  And I worked for them in my college years and just went on and started my own company from there,” he said.

           Since then, Allen – who grew up on the streets of downtown – has led the way in the redevelopment of Jackson’s historic business and legal district.  The former city councilman is currently serving as president of the Jackson Downtown Development Corporation, an organization associated with the Jackson Area Chamber of Commerce that seeks to attract new retailers and residents to the downtown area.

           “We’ve charted a pretty good path so far downtown.  We’ve introduced the residential element, and we’re starting to see some small shops come in.  Restaurants are something that will help.  It’s not a single thing – it’s just a variety of things.  But downtown is coming back to life, and the people need to come be a part of it,” Allen said.

            Though Allen acknowledges that there is still much work to be done downtown, he believes that the city has made great strides in recent years and that the area south of North Parkway will only become more vital and prosperous in the approaching years.