RERMAG

The Kids Are All right!

One evening every November, a group of 40 or so New Yorkers congregate at a little Italian joint on Long Island called Il Bacco. They come from Brooklyn, Queens, the Bronx, Manhattan, Staten Island and beyond for what is called the Big Apple Dinner. Only one rule applies: no business talk!

You wouldn't know it to look at them, but beyond the thin walls of Il Bacco these dinner guests are fierce competitors in New York City's equipment rental market. But here, seated around plates of spaghetti, they are mutual victors and celebrate surviving another year.

Survival is no easy chore in New York, according to John Durante Jr., an organizer of the event who likes to quote Frank Sinatra: "If you can make it in New York, you can make it anywhere." And perhaps that's why many industry players are waiting to see when the rental industry consolidators, who have gobbled up independents in virtually every other major market, will take a bite of the Big Apple.

So what's the secret?

"Don't tell nobody - we claim poverty, but it's really hard work and a one-on-one relationship with our customers," says John Durante, vice president of Durante Equipment, which he runs with his cousins Steven, Anthony and Tommy Durante. All are in their 20s, baby-faced and rosy-cheeked with come-hither eyes and sparkling personalities.

"Don't tell nobody - we claim poverty, but it's really hard work and a one-on-one relationship with our customers," says John Durante, vice president of Durante Equipment, which he runs with his cousins Steven, Anthony and Tommy Durante. All are in their 20s, baby-faced and rosy-cheeked with sparkling personalities.

Steven, at 28, is the most mechanically inclined of the crew, and manages the shops and fleet. "He can break down anything and put it back together," John says. "I'll look at an engine and kind of understand how it works, but I have no idea how to break it down." Steven is also the biggest talker, though John and Anthony aren't exactly shy.

Anthony, 26, is "the numbers man." He heads the sales department. If Steven or John is unsure of a date, a price or a year, he turns to Anthony, who spits out the answer.

Tommy, the oldest at 29, is the troubleshooter, and has held various positions within the operation, including spearheading the data entry of parts into the computer system.

John, 26, whose father and mother, Marie, own the company, is the backbone. "He figures out how to pay for it all," Steven says. John's eyes are always alert, and he seems like the type of boss whom nothing gets by; the type of boss whose fingers are in everything. To look at the Durante cousins, you might not know they're related, but you certainly know it to hear them speak. They talk almost as one voice, often completing each other's sentences as though they are always thinking the same thing at the same time.

The boys began taking over the daily operations of the business in 1994 from John Sr., who founded Durante Equipment in 1969 with his brother Thomas Durante (Tommy, Steven and Anthony's father). They started in their parents' 2 1/2-car garage in Corona, N.Y., and two years later moved the business to Flushing. In 1975 they split up, and Marie Durante assumed the position of vice president.

When asked about the breakup, Steven Durante answers jokingly, "Thickblooded - wait, can we stop the tape?" And the Durante cousins explode into laughter. "No, just brotherly love, ya know?' John explains. "They have their different ways. They're still brothers. They still love each other." In a way, "the kids" have brought the family back together and kept a good business thriving.

All in the family "You grow up as a Durante, you're assumed to know construction," Steven says. From the time they were little the Durante cousins were as familiar on job sites as most kids are on playgrounds. Tommy, Steven and Anthony's father owned a steel business, which taught them the contractor world. John grew up on "the inside" of the business: stamping, stapling and photocopying papers at the age of 5 for Durante. When John was a high school senior, his father opened a branch location in Hicksville, N.Y., and John and his mother, Marie Durante, took over that operation (which she continues to manage today).

Steven worked in construction while still in high school. "I kept my boots and a pair of work clothes in the car, and as soon as school let out I used to jump in the car and go straight to the job site." One day a mechanic dropped a plate on his foot and couldn't work. Steven didn't hesitate to ask for the position. "I says, 'Listen, I'll drive the service truck. I'll do the mechanical work.' [The boss] goes, 'What are you talking about?' I said, 'I can pick this stuff up.' So for a couple more dollars I got into the service truck and started going around to the job sites." His uncle took note of his skills, hired Steven to build a steel mezzanine in the shop at Durante Equipment and asked him to be the shop manager soon after.

"I started here when I was 17," Anthony says. "I called my uncle one night for a job. Part-time. After school, senior year. I said I'll do anything. I'll sweep your floors. Six months later I was parts manager." Anthony attended college for a year before returning to work at Durante and since then has done counter work, outside sales, inside sales, account receivables, accounts payables and is now the operations manager - all while continuing his college education.

John Durante Sr. remains the driving force of the company, but the cousins run the show. "My old man put a lot of time and effort into this place," John Jr. says. "A lot more than we do, and we put a lot. We work about 70 to 75 hours a week, and he still does 80 to 85. The more we do, the harder he works. What he did to get us to this point I don't think any one of us could have ever done by ourselves. I have no idea how he built as big of a business as he did on his own. It's nice because we have the three of us. We can turn to each other and say: 'What do we do here? What's going on?' He didn't have that."

Steven adds: "He was the strength of all of us wrapped into one. He had the mechanical ability ... the sales knowledge ... financial savvy. He just rolled it all into one and did it on his own. And up until '95 it was John Durante, and then there were 50-some-odd employees working under him."

Today, Durante Sr. has let go - a little. "As long as we keep this place in the black, he kind of stays hands free on the day to day," Steven says.

When the reins began to change hands, the cousins were in their early 20s and had to supervise employees who had been with the company for 15 years or more, and they had to do so without the advice of managers. "We had to learn everything ourselves or from him," Anthony says. Steven adds: "There was a lot of firing, hiring, reorganization going on. There were some rough times a few years ago."

In January 1995 the boys sat down in John Sr.'s office to propose restructuring Durante Equipment. They had spent months secretly preparing reports outlining new policies and procedures - a new plan of action for Durante. On how that seven-hour meeting changed the company, John Jr. says confidently, "We walked into the meeting as a mom-and-pop business ... and we walked out as a corporation."

However, some equipment reps were slow to recognize the change. "We had some who would walk in and would barely say hello ... they ignored the front counter guys," John remembers. "We never had front counter guys, we had my dad. So the only guy you had to please was Dad 'cause he bought everything and he sold everything. But what they didn't realize is that he could order as much stuff as he wants; if the guys selling it don't sell it, after a while he's not going to order it anymore. So we had some sales reps that came in who knew every one of my employees' names - they knew their children, they knew their dogs' names - they knew all of us and what was going on in our lives. Those are the ones that are still with us today as sales reps."

Steven adds: "It's also the guys that not only sold to us, but helped us sell it. Some were just trying to push inventory in the door. They didn't care what we had to do once it was in here. But the guys who see that we have an open stock inventory would actually go out there and they'd call us up with a lead. They really helped us over the past few years to get to where we are now."

New York state of mind When asked what it's like doing business in New York, the Durantes laugh as if you've got to be half-mad. From union pay scales to language barriers to corruption to only-in-New York idiosyncrasies, it's clear that not just anyone can make it in this town.

Start with the traffic. Anthony says it can take an hour to travel two or three miles, and getting to a job site and back with a tractor-trailer can cost up to $36 in bridge tolls. But customers don't want to hear excuses.

Mayor Rudolph Giuliani, in keeping with his policy to "clean up" the streets of New York, hasn't helped. He decreed that no trucks can clog midtown streets between 5 a.m. and 9 p.m. It's no easy task to convince a driver who has worked a 10-hour day to take a machine into midtown after dinner. Permits allowingdelivery during normal business hours are available, but Steven says the cops keep an eagle eye on the trucks, looking for any excuse (an expired fire extinguisher, a nicked tire) to write a citation.

The manic pace takes its toll, especially on the equipment. "We sent three skid-steer loaders out to a demolition contractor," Steven says. "They came back after four days' worth of work with a combined total of maybe $12,000 damages. But the real damage, he says, probably won't be apparent for another six months when the loaders start breaking down from premature wear. Machines at Durante Equipment rarely survive five years.

Then there's the corruption and theft, made infamous by books and movies from Catcher in the Rye to Goodfellas.

"There is no textbook on how to do business in New York," John says. "You could read any managerial book, you could read any business book, and it just doesn't seem to apply to New York."

Eye of the storm On any given day, visitors to Durante Equipment might feel as if they are in the eye of an equipment cyclone . A tool-wielding army is getting its hands dirty in the service garage, fixing equipment or making parts as other employees bustle through the halls with customer orders. The loudspeaker blares announcements every few minutes. Customers run in and out - even a dog mills around in the hallway. On top of all of this activity is the constant ring of telephones.

And this is a lull, "slowest day in months," Steven says. John says people "out west" don't have a clue what busy is. At 6 a.m., Anthony says, six trucks are already parked outside waiting to load or unload equipment.

Somehow, though, the Durantes have made sense of the chaos. It's not all that complicated, Anthony says. "Service and reputation," he explains.

"We've never screwed a customer," John says. "We've never stuck anybody. We've always bent over backward for them. And it comes back. It honestly comes back. And that is the reason we are doing so good."

Durante Equipment always has been service-oriented. "Every deal my uncle ever made, he backed it with service," Steven says. "He never washed his hands of a sale or said, 'Once it's out the gate it's not my problem.' He wasn't looking to make a one-shot deal with anybody - he was looking for repeat business. Also, we're in the light-equipment industry, so we don't sell a machine for a quarter of a million dollars; we don't sell a machine for $150,000. We sell machines for $800, we sell machines for $5,000. We rely on repeat business."

In that respect, New York is a small city. Word travels fast among friends, especially in the construction world. That's why the Durantes stick by their customers. "Do something right by somebody, they'll tell three people; do something wrong, they'll tell seven," Anthony says. Steven and John nod their heads solemnly in agreement.

"You do something wrong and - whoaahh - they want everybody to know that you wronged them: sweet revenge," John says. "They'll tell the subcontractor that's on the job, 'You gotta be crazy to deal with Durante.' We can't have that. Definitely not. This is a word-of-mouth industry."

Good thing, then, that the gregarious Durante cousins have learned to play off each other's boyish charm, good looks and confidence. When they visit manufacturers, they want to leave a mark. "It pumps us up,' Steven says. "It makes us proud of what we're doing." That Durante enthusiasm invigorates their employees and customers as well.

Bam! The Durante team has a tradition called the "Bam" - a gesture, a statement - that John started after hanging up the phone after a good sale. Anthony added a fist-to-fist bump to the celebration - "like the Yankees do when they hit a home run," he says. And thus was born the tradition. No one comes in in the morning and no one leaves at night without a Bam. "BAM!" Anthony yells, imitating an ecstatic John.

The Durantes firmly believe in an energetic and positive work environment. They also realize that individual superstars don't make a team, and they credit their employees for much of their success.

"If a yard guy comes in and says, 'Hey, you made a great sale,' I tell him, 'No. We made a great sale'" John says. "'It's going to feed you the same as it's going to feed me.' Nobody works for us, they work with us."

John says his two biggest influences are his father and Irv Levine, CEO of California-based Multiquip Inc., whom he has known since he was 12 years old. "I saw the way his people talked about him. It was like he was a god," John says. "You don't see that too often. His management structure was exactly what I wanted here."

The Durantes say negative attitudes from employees can destroy a team. "We've had top-notch mechanics who've had a problem with three or four guys, and we had to get rid of them 'cause that's like a virus," Steven says. On the flip side, they reward creativity and listen to their employees. "Anybody who comes up with an idea, we ask them to expand on it, and we give them full credit for it."

They're not afraid to implement ideas, either. They're not afraid to fall. And they've come to realize that in a high-stakes game as the New York rental scene, you sometimes have to gamble to score big.

Recently, Durante Equipment invested millions of dollars in its rental fleet. Bills were coming due, and the equipment was still sitting. Anthony came up with a plan: Every time a customer came in and innocently asked, "What's new?" he would reply by telling the customer about the new equipment. The customer, unknowingly, was giving Durante an opportunity to advertise. Utilization began climbing steadily.

In a city that breathes chaos and uncertainty, the Durantes have learned to embrace both.

"Our greatest asset is the fact that we are so flexible to change," John says. "We're still kids. We have so many goals that are for today; we have goals that are for tomorrow; we have goals that are for next week; we have goals that are for five years down the road from now. And every day that five-year goal changes because tomorrow's goal changes."

The Durantes are working on a new 70,000-square-foot building on a five-plus-acre site on a main road where they hope to move within a couple of years. With a 34 percent increase in revenue over the past two years, and an expected 20 percent gain in 2000, the Durantes have succeeded beyond most normal expectations, but they say they don't feel finished.

"We always feel like we're in the middle," Anthony says. "As much ground as we've left behind us is as much ground as there is in front of us; and the further down the road we go, the more we look back and say, well, we should be that much further along."

"But that's what keeps you going," John says with a wide smile. BAM!

Widespread corruption is one of the most serious problems the Durantes face. On certain jobs, payoffs are such a part of doing business in New York that they're practically accepted. The Durantes refuse to play the game, and with the help of enough honest competitors and customers, they are doing just fine, thank you.

"Our competitors even tell us how they pay people off," Anthony says. "Tell us right to our face, and there's nothing you can do about it."

John says: "What we've found is that you can be the biggest; you can have the newest rental fleet; you can have the greatest staff in New York; you could be open the most hours a day; you could have the most delivery vehicles; you could have the low beds and your flatbeds; you could have the greatest mechanical shop - but if you don't put some cash in that guy's pocket it doesn't mean anything. How do you fight that?

"We faced it by saying, 'We're going to forget all of those people that we know are doing it, and we're going to focus on the guys that aren't.' There's plenty of honest people out there - we don't need the ones that aren't."

The cousins are proud of Durante Equipment's reputation, and they realize that, in their customers' eyes, reputation means more than anything else.

A recent discussion between Steven Durante and a major manufacturer's representative about a machine that retails for about $10,000, as recalled by Steven.

Steven: Why did they change the air-induction system when the [original] was perfect?

Rep: This one is $8 cheaper.

Steven: On a $10,000 machine, what the heck is $8?

Rep: You gotta multiple that by 7,000 machines a year. You're gonna figure out how much that $8 is worth to us.

Durante Equipment Flushing, N.Y.

History: Founded in 1969 by John Durante Sr.

Branch: Hicksville, N.Y., run by Marie Durante.

Employees: about 70.

Growth: 44 percent from 1997-1999

1999 Revenue: $14.9 million.

Key Personnel: John Durante Sr., president and owner; John Durante Jr., vice president; Anthony Durante, operations manager; Steven Durante, service manager; Thomas Durante Jr., assistant branch manager; Venkatesh Rao, sales manager; Oscar Parker, parts manager; Susan Horn, accounts payable manager; Maria Brea, accounts receivable manager; Randall Forman and Steve Delvecchio, product specialists.

Key Lines: American Pneumatic Tool, Atlas Copco, Bosch, Clipper, Diamond Products, Dynapac, EDCO, Gillette, Hitachi, Homelite, Honda, Husqvarna, IHI, Kango, Kent Air Tools, Multiquip, Solar Tech, Stihl, Stow, Trak, Traverse, Wanco, Yamaha

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