Rental power
Huizenga has always gravitated toward service-oriented businesses with rental incomes. There are a lot of upfront costs for things such as garbage trucks and Dumpsters, but no one is going to run out of garbage any time soon.
“We like recurring revenue,” Huizenga says. “Before we look at the company, we look at the industry to see how big the industry is, how big could we be in that industry, if we were the first or second or third largest in that industry, what could or would our revenue be. That’s really how we start to determine whether we want to be in that industry or not.
“Then we’ll take a look at the company and see how many companies we can start with.” It wasn’t always easy to get everyone to buy in to that concept. Even the sophisticated investment community didn’t understand the Blockbuster idea; Wall Street kept insisting it was a retail concept.
“When you go in a store and buy a shirt, then that shirt has to be replaced on the shelf,” Huizenga says. “It’s a white shirt with a certain length sleeve and a certain collar size. You’ve got to keep the inventory just right. In the Blockbuster business, you rented the video, and two days later the guy brought it back — and you rented it again. It doesn’t take long to figure out how many times you have to rent it before you got your money back.
“All these retail guys that followed Blockbuster, they couldn’t figure that out at all. It was a whole new model that they had to come up with. We had to work with them to convince them of the model. Once they caught on, then it was good for us. Our stock went up 4,100 percent in seven years. Everybody made a lot of money in Blockbuster — all the employees, all the shareholders made a ton of money.”
His current company, Huizenga Holdings, is using the same formula for success that he’s always used. He’s looking for small companies that can be grown into industry giants.
“We’re doing entrepreneurial things,” Huizenga says of Huizenga Holdings. “We’re buying all kinds of things; most of them are private companies so we don’t have to talk about them. One of the companies we just bought is a company called Swisher. They’re based in Charlotte. It’s back to the rental thing again.
“If you go into a bathroom in any business or restaurant, there are toilet paper holders, towel holders, air fresheners, soap dispensers — we install those and rent those. Once a week, we come and service them.”
And once he builds that business, he may get out of that, as well. Huizenga tends to move on once most of the growing is done.
“It’s not the maintaining,” he says, “it’s the starting; it’s the building; it’s the growing. My wife calls it the chase. You just love the action; you love being in there making things happen, especially when people say it won’t work. When people think it won’t work, there’re more opportunities.”
Where there is the potential for exponential growth, you’ll probably find Huizenga right in the middle of it, trying to figure out how to take the company to the next level and looking for the right manager who can move quickly to get the job done.
“I like the challenge of building and growing and putting the organization together, putting the right people in,” he says. “To me, leadership is about finding the right people and convincing them they should jump on and follow the dream and make it happen. That’s the fun part for me.
“I’ve been very, very lucky to be able to find the right people along the way. You can’t do it by yourself.”
