For years, Tony Leung has taken a proactive, thorough approach to safety and cleanliness at Sanwa Growers Inc. Leung, president of the $85 million, 230-employee produce company, says being proactive in business may cost money up front, but ultimately it benefits the company. Such was the case with Sanwa and the E. coli contamination of spinach this fall. While years of taking more thorough measures initially cost Leung money, he was confident his product was safe, making the extra money spent well worth it. Smart Business spoke to Leung about how he grows his company, promotes from within and finds balance.
Prepare for growth. Growing fast is not a problem; it’s not being ready for it. When you try to grow in my business, it’s easy to buy or rent a new warehouse. But to get a number of experienced personnel in the new facility in a short period of time is very difficult.
The business is there, but you do not have the support team to manage it. In the past, I did the growth first. Sometimes it can be very painful. The first few years are not profitable because you do not have the right people and right staff.
For example, I opened a farm in 1992 or 1993 in North Carolina, and it was about 500 acres. We were also farming 2,000 acres in Ruskin, Fla. My problem was we did not have enough personnel. We were spread too thin.
The operation, after five years, was not profitable, and we lost money. We decided to close that because we did not understand the area, the weather or the timing. The next time around, I was a little bit smarter and made sure those were things I looked into a little bit further. When I opened the next location, I took more time to calculate all the risks.
We now try to hire the management first and have them trained so they know exactly what we expect and how we operate before we find a location. All the managers that we have were part of the company. We move them up and train them as a manager.
Once (we) have the personnel stable, then we increase our capacity, which increases our infrastructure. Then build the market share. Once you have your bigger infrastructure, you increase the market share to the full capacity.
You have a team of people that are aggressive who will go out and get you market share and more of a customer base. Then you go back to the first step and increase your personnel. You repeat it over and over again.
Retain employees for a productive future. This is very important in our business. It’s a very basic business, buying and selling. We really require people to stay a long time to do a good job and identify our customers’ needs. If they stay two, three, four or five years, their later years will be the productive part (for) the company.
Pay is obviously important. We have an incentive program. We have bonuses and profit sharing. They know they will be rewarded on their performance. That is very important. When they do a good job, they know what their return is on their good performance.
However, money is not everything. When you work in an office you don’t like, it’s more painful than the monetary compensation for the long term. It is really important when you get up in the morning you look forward to going to work, instead of not feeling like going in because it is not pleasant.
Find balance. Since I delegate the work to my employees, they know not to bother me at home or on my cell phone when I’m not in the office. I don’t work weekends. I dedicate that time to my children and my wife.
It’s very difficult. I’ve been doing this for almost 30 years, and a few years back I decided to cut down my working hours. It feels a little bit uneasy, but when I start looking at my numbers, that’s where it has been improving.
The less I am involved, the better the numbers turn out. The employees know this is their company, and they are the ones who make sure they are keeping their jobs. I’m not the one keeping their job.
Understand your industry. I read a lot of the trade magazines. I get in touch with the people in the industry. I don’t get involved with the day-to-day operation, but I do get involved in the industry.
The support team is important because I am not doing their work. I only give them the idea, and then they have to perform.
The day-to-day operations are very routine, and my people can handle it a lot better than I can. As far as the trend and the future of the industry, I think I understand it better than my employees do. That’s why I give them ideas to change the company to what the trends call for.
Trust employees to carry out the organization’s goals. I’m setting those goals. They are the ones who find a way to achieve them. We go back to the first phase of what we do.
I am going to assess my infrastructure and capacity. If I see there is only 80 percent capacity, then I insist there will be growth next year. Now, if it’s my assessment that my infrastructure is not able to handle more growth, then I will ask for an increase in profitability. Not necessarily growing in revenue, but growing in profitability, so next year I can add on to the infrastructure.
You have to trust your employees. We have multiple locations and we don’t have a very advanced system to keep track of all the activity. So we build it on trust. I trust everybody until they prove otherwise.
HOW TO REACH: Sanwa Growers Inc., (813) 642-5159