Randy Vaughan: Semi-retired, Fully Engaged
Vaughan explains how he handed over Ambassador Enterprises and transitioned into semi-retirement while positioning his company for long-term success.
If he’s semi-retired, we’re all in big trouble. Nevertheless, that’s what Randy Vaughan calls himself.
Vaughan, who was named chairman of CEDIA’s board, is now a systems specialist for the company he once founded. He sold Portsmouth, Va.-based Ambassador Enterprises (AE) to a former employee, Rick Arthur, in order to pursue the semi-retired status he often touts.
“It was time to semi-retire,” Vaughan says. “I still work as many hours as an average, normal person, but I get to play and have a good time. The part of the business I love is design and interacting with customers, and that’s what I get to do.”
But that’s not all he does. “Oh, and my wife and I have a consulting firm,” he adds, “in the sound, lighting, video, control, acoustics, and commercial applications.”
He also teaches CEDIA courses periodically.
- Principal: Rick Arthur (Randy Vaughan is a systems specialist)
- Location: Portsmouth, Va. (headquarters) and Montville, Va.
- Web site: http://www.ae-systems.com
- Years in Business: 40+
- Number of employees: 50
- Residential/Commercial Split: 15%/85%
Selling the Business
Vaughan sold his 40-year-old, 50-employee company, AE, in 2008 after having spent a couple years driving hard at the residential market. Previously, AE worked entirely within the commercial sector. Today, residential work makes up roughly 15 percent of AE’s projects.
“Residential was established - it wasn’t established well, but it was established,” Vaughan recalls. “But if you look at the calendar, November 2008 was right at the beginning of the economic downturn of the world.”
Vaughan says the downturn had a drastic effect on AE’s attempts at residential expansion. “If that [residential] was the only business I had, I would probably be out of business,” he admits. “We had hired all of the sales people, the general manager, the technicians … we trained them, built a show house, and we did all that before we even hung out the residential shingle.”
AE has made it this far through the recession, Vaughan says, due to Arthur’s “strong, aggressive management.” In fact, Vaughan reports that AE turned a profit in 2009. “I don’t think a whole lot of people can say they did that,” he boasts.
Vaughan sold to Arthur over a 10-year timeline. “The decision was made about eight years before he took over,” Vaughan explains. “The employees were told about five years before he took over.”
Vaughan didn’t want to sell his company to the highest bidder. In fact, he didn’t even want it to go to outside buyers. “This was a family business for 40 years,” he says. “We wanted employees to carry it forward, and Rick [Arthur] had the best package.”
Now that the company is Arthur’s, Vaughan says he has handed over the reins completely (or, at least, as “completely” as he can). “I do the best I can to back off,” he concedes. “It’s a major business, but Rick [Arthur] knew what he was getting into, and he has the skill set to manage.”
Just about the time Vaughan and Arthur were struggling to move AE into residential markets, countless other CE pros were making the opposite switch. With the stall of the housing market, opportunities in commercial installation were luring home systems integrators into such categories as digital signage and multiroom audio.
Speaking as a 40-year veteran, Vaughan is leery of the residential-to-commercial shift. “It would be very important,” he says carefully, “for someone in the CEDIA channel to look at the commercial landscape and find where their skill set and knowledge will be successful.”
AE does its commercial work in the areas of houses of worship, K–12 education (which, according to Vaughan, is “not doing too well right now”), healthcare communications, and pro A/V.
“Health care communications is doing excellent,” Vaughan reports. “So are houses of worship.”
But that doesn’t mean Vaughan thinks every integrator should flock to those markets. “Understanding how to talk to people is very unique in every vertical market,” he explains. “It’s dangerous to think that just because you understand what projectors and control systems are that you can go into another market and make them happy and impressed.”
There are other differences, too, Vaughan says. “To be really successful at education technology and healthcare communications, you have to have one of the top product lines. Those product lines are nothing like what the CEDIA channel expresses. It takes years of courting back and forth. It’s a marriage with these manufacturers, and it’s just as hard to get into that marriage as it is to get out of it.”
That doesn’t mean Vaughan is precluding home systems integrators from commercial ventures. Rather, he believes the evolution should be slow … painstakingly slow.
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