The Sweet Spot for Electrical Contracting, Instrumentation and Repair

Tennessee Associated Electric

Tennessee Associated Electric is a full-service electrical contractor that offers solutions to a diverse customer base in Tennessee and beyond. Though it has had several owners throughout its long history, over the last five years under the leadership of its new ownership team, it has experienced exceptional growth both in size and reputation.
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Since 2012, Tennessee Associated Electric has undergone an evolution, finding its niche and leaving its customers satisfied. Its current leadership team has a wealth of experience which reinforced the company’s place atop the market.

“The owners combined have over 100 years of experience within the industry and it’s different, it’s unique. One has construction experience, one has service industrial experience and I have the business experience and financial experience, so combined we really make a great team,” said President Jennifer Baxter, who joined the company in 1995 and moved up the ranks.

Baxter was a working student answering phones as she completed her Associate’s degree in accounting. Eventually she moved into accounts receivable and upon graduating, filled the roles of accountant and division controller.

Now president of the company, Baxter was selected as the Enterprising Women of the Year Champion Award winner which is a source of pride for her and the company which is a member of the Women’s Business Enterprise National Council (WBENC) and Women Owned Small Business (WOSB). The company is also a proud member of the National Electrical Contractors Association (NECA) and Electrical Apparatus Service Association (EASA).

Together, Baxter, with her partners Vice President and General Manager Richard Hall and Vice President Ron Collins, purchased Tennessee Associated Electric from a venture capital group that acquired the company from its long-time owner in 2007. Knowing the company would be sold, they seized the opportunity.

“In 2012, we started the process of the acquisition. I was the controller and I partnered with the vice president of Tennessee Associated Electric and the vice president of our former division and we bought the business on December 31, 2012,” Baxter explained.

While the changes they implemented were minimal, with Baxter moving into the role of president, the new ownership team took charge and leveraged the company’s many strengths to continue growth in all aspects of the company.

“We kept everyone in the same position they were in, reporting to the same people. One of the things we were blessed with was the majority of our customers all saw the same faces they saw in the past, so we were able to keep our current customer base,” said Baxter.

Tennessee Associated Electric customers are commercial, industrial and institutional, located in Tennessee and its surrounding states such as Georgia, North Carolina, Kentucky and Alabama. The furthest the team has strayed for a project is Texas. Its services include new construction, electrical maintenance, emergency services, electrical testing, high voltage, line work, communications, solar, instrumentation and voice/data.

The benefits of having a diverse customer base and a wide geographic footprint are that it insulates Tennessee Associated Electric from down markets. As Baxter explained, “We don’t have all our eggs in one basket, I guess you could say. Luckily, if one industry goes down, then we have the others that are still there to support the business.”

As a union contractor, Baxter noted, “It gives us such great resources because we can go to the local unions if we need resources in a certain area and hire from there. It keeps us from the recruiting process. Luckily, all of our lead people have been with us for multiple years so it’s kind of the perfect set up.”

Tennessee Associated Electric has a team of over 100 employees, many of whom are long-tenured, making it a relatively large locally owned and operated electrical contractor. One of its greatest strengths is its ability to be selective with the projects it undertakes. “We’re very selective in the projects that we bid and take. We’ll look and see if it’s something we can excel at. We’ve been blessed to have a customer base looking for high quality, excellent service, expertise and value,” explained Baxter.

In 2012, Baxter and her partners added an electrical apparatus repair division to the company’s repertoire, which further differentiated it from its competitors. No longer was it solely an electrical contractor; it now offered highly dependable repair services that enabled it to carve out another niche in which it could excel.

“We go out to customers and pick up their equipment such as electrical motors, drives, servo motors, gear boxes and we bring those back on site at Tennessee Associated and we have employees that work in the shop that do winding, machining and assembly,” said Baxter. “We repair it, recondition it and then we ship it back to the customer, delivering it back with our company truck. That has really developed and grown quite a bit for us. The experience that we have in that department is phenomenal.”

The new ownership team also invested heavily in the company’s capacity and resources to make room for its expanded service offerings. In August 2016, Tennessee Associated Electric purchased buildings near Knoxville’s downtown. “We were in a facility that was 14,000 square feet overall. As we started developing the in-house electrical repair business, it just got tight; we were out of space. We were struggling. We were moving offices in order to do repairs,” Baxter explained.

She noted, “In the prior years, Tennessee Associated Electric had been in a building downtown so we kind of wanted to go back to our roots and we bought buildings and we renovated them.” The company moved into its new home in April 2017.

Now, Tennessee Associated Electric boasts 40,000 square feet of shop space, warehouse space, storage space and offices. Baxter described it as, “a complete upgrade for Tennessee Associated Electric and its people,” acknowledging the great location and the role it has played in the revitalization of the city’s downtown. Through these investments the company has brought increased revenue to the local cafés, restaurants and fuel stations in the area, proving the commitment of Tennessee Associated Electric to its employees and the community it calls home.

As Tennessee Associated Electric has expanded, it has been mindful of the rate at which it has grown. In addition to building capacity, quality, safety and customer satisfaction remain of utmost importance for the company. “I think every company has a sweet spot; you can grow too fast and then obviously [there is] the other side, which we won’t even talk about. If we can stay around 100, 120 employees, that’s really our sweet spot. I understand in construction that’s going to fluctuate and luckily, we have our service side that picks that up and keeps it steady,” said Baxter.

The goal is to gradually grow, maintaining five to ten percent growth. Baxter explained, “We don’t want to promote ourselves out of the market. We never want to be in a position where we don’t have our hands on everything. If we get too large that will be an issue and our main thing is that we keep enough [in the pipeline] that will keep our people working.”

Baxter noted that the economy is firing on all cylinders and while this is great, it certainly comes with its fair share of challenges, including a strain on available talent. She stated, “Any time you are looking for talent and you have certain expectations for the people who work for TAE, it becomes hard to find experienced tradesmen and project managers. We are blessed with our current talent but hope to add more as business grows.”

Instead of seeing these challenges as a hinderance, Tennessee Associated Electric is building on the talent already contained within its ranks to position itself to take full advantage of the opportunities before it.

To be sure, the company’s location is one of the reasons for this bounty of opportunity. Tennessee Associated Electric is located in proximity to Oak Ridge, Tennessee where the Department of Energy’s (DOE) $6.5 billion uranium processing facility project is underway.

“We work for the DOE and there are so many opportunities with this project that will be going on for the next several years that we can take advantage of and get our people in there and do some good work. “We have completed the Constructions Support Building project, which is a three story building for construction support people, engineers, safety, designers, management, etc.,” said Baxter, who looks forward to what the future holds.

The company’s vision is a source of inspiration for its people and shows great promise for the company. “Everyone is seeing what we’re trying to do and how we are attempting to evolve Tennessee Associated Electric and provide the resources that are needed to be successful,”, which results in satisfied customers in the niches it serves and shows great potential for the future.

Due Diligence

The workplace is where we spend one third of our lives. Work is intricately woven into every aspect of daily living. And self-preservation in the workplace – physical, mental, emotional and spiritual, can change everything about it for the better.

October 21, 2019, 4:49 AM EDT