Bill Allen brought valuation theory and understanding the importance of costs to the ready-mix industry.
Bill Allen was the first recipient of the NRMCA William B. Allen Award. From left to right are Pierre Villere, NRMCA Chairman Hale Ritchie, and Bill Allen.
Throughout history, patriotism and a desire to serve have prompted teenagers to lie about their ages so they can serve in the military and fight their nation's enemies on faraway battlefields. Fifteen-year-old Bill Allen fibbed about his age so he could get a driver's license. He couldn't wait one more year to drive a ready-mix truck at his father's business, Allen Ready Mix.
With license in hand, “I got to drive a ready-mix truck one summer and I thought it was really something,” Allen, 80, recalls. But he also adds that it was harder work than he had imagined. Today, Allen's Tennessee driver's licence is still incorrect by one year. Some things are better left unsaid.
Allen eventually became the owner of his father's business in Memphis, Tenn., and then the 1981-82 recession struck. “I ran out of money, plain and simple,” he says. “I had to close shop.”
But whenever a door closes, another one opens, and in his early 60s, Allen was not yet thinking about retiring. He became a consultant, and then traveled the country determining the valuations of concrete producers. Previously, no one could look at a ready-mix business and determine various valuations and economic parameters. Allen knows more about a producer's financial performance than the companies' owners.
“Some of the young bucks in the business, when Bill was first starting out as a consultant, are middle-aged now,” says Pierre Villere, managing director of Allen-Villere Partners, which both men formed in 2001. “They will tell you Bill is considered the father of modern valuation theory.”
For his uncanny ability to parse a producer's balance sheet and for his generosity in sharing his know-how with the industry, TCP has selected William B. “Bill” Allen as a 2011 Industry Influencer.
Allen wanted to work full time at the concrete contracting business his father owned. But Sidney Allen wanted his son to go to college, so Bill Allen graduated with a mathematics degree from Rhodes College. He then joined the U.S. Marines Corps' Platoon Leaders Class in 1951 and remained on active duty from 1953-55. He returned to his father's business in Memphis, which, in addition to the ready-mix operation, would eventually grow into Allen Sand & Gravel, Allen Building Materials, and Allen Block.
Now a mathematician, in addition to running the operations at a ready-mix producer, Allen went about changing how business was done. “We did everything by hand,” he says. “We created invoices and created statements by hand. I knew we had to change.”
Allen brought his business into the modern era. He bought an IBM computer in the late 1960s and an early Compaq laptop computer in the early 1980s. Information technology came natural for someone with a math background. He took the business over from his father, who retired in the late 1960s. Then came the recession of 1974-75 and the more serious downturn seven years later. Now out of business, Allen became a consultant.Finding value
Allen's first assignment in determining a concrete company's value was in Palm Springs, Calif. Since then, there have been more than 400 others in almost all 50 states. He is the principal author of Module III-General Business Skills of the NRMCA Sales and Sales Management Certification Program, was a key participant in RMC 2000, and developed the NRMCA Industry Data Survey. He has served as NRMCA chairman, and chaired all of its business and operations committees.
Allen has provided the ready-mix industry with invaluable financial tools and advice. “Understanding the business cost structure was the key to Bill's success, and he did it on a per-yard basis,” Villere says. “Bill introduced that concept.”
“You must have good financial information for the managers and they must have the intelligence to use it,” Allen says. “Many don't have that information. They guess what it costs and they guess what it should sell for. Many times that guess is not right. It takes a lot of work.”
Allen's advice in this difficult market? “Don't get overleveraged,” he says. “Reduce your debt, and don't go out and incur any more debt unless it's absolutely necessary.”
Despite his many honors and accolades, Allen remains down-to-earth. In 2006, NRMCA created the William B. Allen Award to recognize a leader who has made a significant contribution in elevating the business acumen of the ready-mix industry. Much to his surprise, Allen was the first recipient. In the car going to dinner after receiving the honor, Allen told Villere, “It's not that I'm so smart. It's just that I've been around so long.”