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ENTREPRENEURS by Francis X. Gilpin | Associate Editor
In 1990, Stuart A. Suddath found himself in an embarrassing position for someone who dreamed of entrepreneurship.
It looked like he might flunk out of the University of South Florida. "I was in danger of going on academic probation in the business school," says Suddath. "I was bored."
Luckily for Suddath, who went on to found Tampa relocation facilitator Movex Inc., he rebounded nicely in the real world of business.
"The statistics mean a whole lot more to you when your paycheck is tied to them," says Movex's president and chief executive. "Just sitting down in a classroom and learning statistics, I really had a difficult time with it."
Movex has been recognized by Inc. magazine for the second consecutive year as one of the 500 fastest-growing private companies in America. Movex moved up the Inc. list from No. 498 in 2004 to No. 417 last year. Its three-year sales growth was 335%.
Suddath attributes part of Movex's success to his creation of a fun work environment at the company. "I want people to enjoy coming to work at Movex," he says. "I don't want them to feel like they're having to go to business school."
Back at Plant High School, Suddath was the type of kid who bought 50-pound bags of peanuts, then boiled and bagged the contents for roadside sale.
The entrepreneurial zeal eased the concerns of his parents when Suddath announced that he was transferring to the University of Tampa and changing his major to music.
Despite his inability to play a musical instrument, Suddath won a UT scholarship and later earned a degree in vocal performance.
Suddath, who just turned 35, returns to his alma mater this month to discuss Movex with UT business students. "I've been on every stage at University of Tampa, multiple times, singing and doing things that were a lot more intimidating than sitting down and talking about something I love," he says.
How did Suddath go from a baritone with limited range to a moving industry innovator with unlimited potential?
For starters, it helped that his family was already in the moving business.
Moving in their blood
Suddath's grandfather, Ross B. Suddath, opened a moving and storage company in Tampa in 1924. His father, Ross H. Suddath, took over the company in the 1960s.
Stuart Suddath, who previously worked in the company's warehouse operation, joined the outside sales force after college. He says he was helped by a Dale Carnegie sales course, in which he finished first out of a class of 70.
By 1996, the younger Suddath saw obvious inefficiencies with long-distance hauls. Namely, Suddath trucks made half of each round trip with no load.
The company began lugging back freight to Florida on return moving trips from the Northeast. Personal computer monitors from IBM Corp. came back from New Jersey and were dropped off in Orlando.
Suddath debuted Movex on the Internet in the 1990s. He tried to match empty trips for the company's 15 moving vans with cost-conscious relocating households.
But initial inquiries came from Western states that his family's company didn't serve. Suddath invited other movers and even freight haulers to bid on jobs for their empty trailers. Customers had to load and unload their own belongings.
Within a few years, Suddath realized the company was making more money on Movex-arranged moves than on its own hauls.
In 1999, Suddath let the leases run out on his father's moving vans and shifted everything over to Movex, using what he calls "a non-asset-based, third-party logistics model."
In plain English, Movex has no trucks and no movers. That means Movex can underbid even U-Haul on most jobs, says Suddath.
While customers do their own loading like U-Haul, they leave the driving to the moving company or freight shipper with which Movex has partnered.
"We're really carving out a whole new industry," says Suddath. "Your insurance costs are minimal because we're really computers and telephones."
Suddath started Movex in earnest in a back bedroom of his father's house. He and his father, who is now retired, matched relocating households with empty half-trips on a whiteboard, he says.
Although his family's traditional moving company never exceeded $2 million in annual sales, that's what Suddath says Movex did for its first full year in 2000. Six years later, he says Movex and its more than 50 employees are headed for $20 million in annual revenue.
"We're probably a nagging pain in the backside for the major van lines and for U-Haul," says Suddath, "because we're drawing people up from the U-Haul service and pulling people down from the full service."
Post office ads pay off
Suddath says he can usually find an empty van heading the way of a moving household on as little as 48 hours notice.
When not contracting with a moving company, Movex uses furniture and household-appliance shippers with special suspension systems on their trailers. All carriers are checked out with federal transportation regulators. Movex also is named on contractor's insurance policies so Suddath is notified when policies lapse or are cancelled.
Suddath says Movex advertisements in airline magazines and on U.S. Postal Service change-of-address cards have driven yearly sales increases of 30% since 2003.
Movex may do even better this year, according to Suddath. Movex just had its best January and February on record. Those are historically the two slowest months of the year.
And Suddath doesn't see many rivals in the near future as stiff competition.
Arkansas Best Corp., a freight transporter with $1.9 billion in annual revenue, does move households on return trips to the warehouse. But Suddath says the ride is bumpy on Fort Smith, Ark.-based motor carrier's trailers.
PODS Inc., which pioneered a storage-bin concept of moving eight years ago in Clearwater, works from a franchise concept that doesn't compete well against Movex, according to Suddath.
He also doesn't contemplate big traditional moving companies threatening Movex. From working for his father's company, Suddath cannot believe a major mover's sales representatives are going to recommend a cheaper brokered move when the commissions are lower.
"I don't think it will ever gain traction in a full-service van line environment," he says.
MOVEX Leads could to add revenues
Movex Inc. used to add approximately 50,000 new names to its customer database every year. Now there are 50,000 keyed in every month, says Stuart Suddath, the company's president and CEO.
That's a lot of information from which to create new income streams. "I know, every single day, where 500 people are moving from and to on an interstate basis," he says in his Tampa office. "Those leads have got to be worth something to somebody."
Real estate brokers and mortgage lenders are likely to find value in Movex's customer rolls. Selling the names will enhance the private company's profit margins, which already must be decent because Movex avoids the capital investment of traditional moving companies.
"We've got a way," Suddath says, "without buying a bunch of trucks and dealing with a lot of labor, to monetize mortgage leads and real estate leads."
Suddath expects 2006 to be a breakout year for Movex. He doesn't rule out buying into ancillary industries, if the right affiliations don't come along.
"This company is going to look very different in another 12 months," he says, "with all of the things that we have blowing and growing."
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