Quebec’s Family-Owned Equipment Firm in Transition

Simplex Equipment Rental

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Simplex Equipment Rental is a family-owned firm in Montreal with a huge inventory and a history of both growth and adaptation to new market conditions. Founded over a century ago, the company provides tools and equipment for everything from huge construction jobs to backyard landscaping projects. Repeatedly honoured as one of Canada’s best managed firms, Simplex is looking to expand while maintaining its family ownership.
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“Primarily, we are an equipment rental company. We will occasionally sell equipment to our customers if they are requesting it; however, this is not our market niche. If we sell equipment, it is [due to] requests from clients,” states Charles Desroches, vice-president, equipment division.

The company has two divisions, one devoted to tools and the other to equipment. The combined inventory of these two segments is staggering; at present, Simplex can offer more than 4,000 pieces of equipment and 50,000 tools for rent. The list includes aerial work platforms, forklifts, pumps, lighting, scissor lifts, welding gear, compressors, generators, hoists and jacks, earth moving machines, and more.

Simplex has 43 locations in total, including 35 retail branches across Quebec and two in Eastern Ontario. The firm also operates 13 workshops, some of which overlap with the retail branches, where service teams perform maintenance work on rental equipment.

Simplex’s client base consists of three main sectors. These are construction, industrial applications, and entertainment. Construction clients range from big firms to “many small independent contractors,” states Desroches, while the industrial segment includes hydro, mining and aerospace, among other sectors. Hydro-Québec and Bombardier are among Simplex’s major clients.

“We try to balance our business. With construction, since we live in North America, everything is going on in the summer. We’re running out of equipment in the summer, but in winter, we have a lot of machines sitting in our yard, just doing nothing. The industrial side of the business, however, is active 12 months a year,” says Desroches.

The entertainment segment covers movie-making (Montreal is an active filmmaking center) and cultural events. Rentals for film crews include work platforms, among other gear.

Simplex’s retail outlets also serve private home owners doing projects that might require “specialized tools and equipment,” states Desroches.

Popular rental items on the tool side include grass aerators, welding gear, HEPA filters, floor sanders, drain cameras, concrete polishing machines, carpet cleaning machines, ladders, pumps, et cetera. Popular equipment rentals include aerial work platforms (including scissor lifts and boom lifts, extending from under 20 feet to over 130 feet), material handling gear (including forklifts and telehandlers), heaters that can emit from 50,000 to one million BTUs, and small and large compressors. The equipment segment boasts over 100 trucks that can deliver this gear to worksites or move it to new locations.

Simplex’s roots go back to 1907 when Louis Henry Véronneau went into business selling a floor sanding machine he invented. Simplex expanded and began offering floor sanding services to customers who didn’t want to do it themselves. In the economic boom times following World War Two, Simplex began renting out floor sanders as well as selling them. This proved so popular that in 1957, the company became completely devoted to rentals. The rental portfolio kept expanding and the company kept growing.

In the mid-1980s, Simplex invested heavily in aerial work platforms and scissor lifts, and a decade later, the firm opened a series of rental locations across Quebec. “I believe the company adapted with a changing market… the company continued to evolve and invest in new technology and new products and renew itself,” states Desroches, explaining Simplex’s longevity.

Being a family business has apparently been good for the bottom line as well as the workplace culture. As a family outfit, “the company has the freedom of doing what they want to do. They don’t have anybody else to report to except the bankers. It’s an independent company,” explains Desroches.

To be sure, the company’s leaders want to keep Simplex a Quebec-based, family-run business. President and CEO, Andre Véronneau “gets lots of offers [to sell] and is always declining,” says Desroches. “We want to remain a Quebec company. Andre believes very much in the Quebec economy and wants to contribute to the economy here. He’s passing the business to his son, Euclide. Euclide has been working with us for six years now and he’s about to take over the company. Andre will remain on board for a few years and there’s going to be a transition.”

Among other tasks, Euclide Véronneau helped implement an ERP (Enterprise Resource Planning) system last fall. ERP is a form of business process management software that handles various office and administrative duties. The implementation was highly successful, reports Desroches.

Simplex also offers workplace health and safety training across Quebec. The company has programs involving the safe use of pallet trucks, best practices for manual load handling, overhead cranes, workplace accident reporting, the Workplace Hazardous Materials Information System (WHMIS), and more, and is looking at offering new training programs in the future.

This focus on safety extends to inventory. Rental equipment and tools are thoroughly inspected and maintained, reducing the risk of potentially dangerous accidents happening.

Simplex also offers maintenance work “for customer owned equipment” either at the client’s work-site or at a Simplex locale, says Desroches. The company can pick up equipment on specialized trucks and bring it to a Simplex center for repair. In other situations, Simplex sends mobile service units directly to worksites to do repairs or provide spare parts. The company keeps certified welders and technicians on staff for such purposes.

The firm currently has 550 employees across all branches, roughly the same number as it did last year at this time. In terms of what Simplex looks for in a new employee, Desroches says a top consideration is whether a potential hire is “customer-oriented.” Practically all of Simplex’s employees, including yard personnel, technical advisors, sales staff, truck drivers, etc. need to be prepared to interact with customers, he explains.

Considering the company’s ownership structure, it’s no surprise Simplex has a family-like corporate culture. “People have a sense of ownership at Simplex. It’s a company that cares about its employees. We are open-minded. Andre, our president, talks to everyone. He likes to go from location to location to meet people, talk to people, see things with his own eyes. We’re very close to our group here. That’s what people like about Simplex—it’s like a very big family,” states Desroches.

Indeed, there seems to be something to this. In 2016, Simplex was included in the “Platinum Club” of Canada’s Best Managed Companies, an annual list compiled by Canadian Business Magazine, CIBC, financial services firm Deloitte, and others. Platinum status is granted to companies that have been on the Best Managed list for seven years in a row or longer.

As for noteworthy projects, Desroches says, “we are involved all over Quebec on different projects like major bridge construction or dismantling. There was a major bridge in Cornwall, Ontario. A firm called American Bridge Company was responsible for dismantling the bridge. For almost a year we had 20 to 25 boom lifts – these are 125 and 135 foot machines – located there.”

Recently, the company has added some new products to its rental mix as well. “Lately, we’ve introduced some cement polishing machines; it’s a trend right now. It gives a mirror finish to your floors. We have an exclusive agreement with a manufacturer… so we’re buying machines from them. For the heavy equipment division, we’re looking at specialized compressors,” says Desroches.

Desroches says the company’s biggest current challenge is adjusting to market conditions: “The market is changing. Simplex has had a great deal of success in the past because we were basically the first on the market here in Quebec; we grew tremendously. Now, we have to readjust to a much tighter market. We are looking at efficiency—being more efficient, doing things with fewer people, and increasing revenue with what we have … So we are optimizing our business model.”

In terms of promotion, Simplex has largely “abandoned trade shows, because we felt it wasn’t giving us any return on investment. Mainly, we’re using social media. We’re promoting Simplex over Facebook, LinkedIn and we’re using YouTube as a channel of communications,” says Desroches. The company has also an extensive website, in both French and English.

Over the next few years, Desroches wants to see the company, “hopefully growing, with more branches and covering a much wider territory than we are right now.” Expanding outside of Quebec and eastern Ontario “is a possibility. We’re working on it,” he adds.

In addition to opening new branches, Simplex is looking at expanding into new markets by acquiring other equipment companies and/or relocating existing Simplex facilities.

One thing that won’t change is the company’s focus: “We don’t intend to be a [sales] dealership of specific equipment. That is not our core business… Rentals is our core business,” says Desroches. Coupled with a family-like workplace culture, it’s proving to be a winning model.

Building the Next Generation

As thousands of experienced workers retire across North America every day, it is small wonder many industries are concerned about the future. It has been a decade since the oldest members of the baby boom generation started leaving their jobs, removing from the workplace decades of experience and skills that are tough to replace. The situation is so dire that, when younger workers are not available or knowledgeable enough to take over, retired staffers are often called back to work on a part-time basis.

November 11, 2019, 11:21 PM EST