Tech Electronics Charts Growth One Midwestern City at a Time

Fifty years after Jim Canova, along with two partners, started up a St. Louis electronics distribution firm known as Tech Electronics, the middle-market company’s Midwestern roots now appear to run as wide as they do deep.

“I think that businesses that last over time are able to change with the times. And — for us — this has really been about finding a new identity as a company,” explains Kurt Canova, Tech Electronics president and one of three Canova offspring who today populate the $45 million firm’s management.

“Eight years ago, we realized that in order to fuel the growth we wanted, we would have to expand outside of St. Louis,” explains Canova, who says that the firm at that point in time drew up an M&A strategy that led to multiple acquisitions that added offices in Indianapolis; Bloomington, IL; Chicago; and Springfield, MO.

“Our goal is to be, by the year-end of 2016, at about $60 million in annual revenues. From there, we feel that we can get up to $100 million within our current six offices,” says Canova, who identifies Kansas City, MO, as yet another attractive geography for future expansion. Over the last 5 years, Canova says, the firm has experienced 40 percent growth — a feat, in light of the challenging economic climate, and one he attributes to both organic sales and acquisitions.

As for establishing a new identity for the firm, Canova says that in the wake of integrating multiple businesses, Tech Electronics has focused on developing a portfolio of uniform communication systems involving telecom, fire alarms, and security systems and making them available companywide.

“Our three largest offerings were fire, security, and voice, so we felt that when it came to making an acquisition, we should also target companies that would allow us to grow these offerings,” says Canova.

Along the acquisition trail, Canova says, the firm picked up valuable dealer authorizations to resell certain telecom and fire security product offerings.

“In our industry, it’s hard to find another business that carries the exact same lines, so in the course of the of the last year and a half, we’ve worked to have our offices mirror each of our product lines in terms of what we service and support,” says Canova.

Going forward, the business’s expanded footprint and diversified customer offerings are expected to help the firm better manage unexpected economic swings. Back in 2008, as the downturn wreaked economic havoc across many American cities, Tech Electronics was at the time operating from only its St. Louis and Columbia, MO, locations.

“About one-third of our business is inside the construction industry and St. Louis’s construction segment was probably one of the hardest hit in the nation,” says Canova.

Besides putting greater emphasis on the sale of additional services to its existing customers, Canova says that the firm has sharpened its focus on customer segmentation.

“We got very focused on improving our closing ratios on the construction side, and then we accelerated our efforts to grow our education and healthcare customer segments — for instance, healthcare, even in the depths of the recession, was still growing,” says Canova, who in part credits the downturn with helping to augment the firm’s focus on strategic planning – a process, he says, to which the firm dedicates about 6 days annually.

Still, customer segmentation could only go so far. In the past, the firm liked to boast that nearly 75 percent of all new construction in the St. Louis area involved one or more of the firm’s offerings, but the firm’s dependency on the St. Louis economy became a key concern as the city’s economy continued to struggle post-downturn.

Besides the loss of potential customers, Tech Electronics feared that it would soon not be able to generate the product volumes demanded by certain key manufacturers whose product lines the firm bundles and resells with its service offerings.

“We realized that we had to get out into other cities and that acquisitions had to become a top priority. This was about growth, but it was also about attracting and retaining the top manufacturers — who demand consistent year-over-year growth in their product lines,” explains Canova.

Today, the firm has about 250 employees in its network of regional offices, with a corporate campus still in southwest St. Louis, where it all began 50 years ago.