After arriving in the U.S. from Kuwait at age 18 in 1978, Tarek Hafiz would eventually discover he had a skill for selling, leading to ownership of one of Southern California’s most successful office technology dealerships.
Presented by LMI Solutions
More than three decades ago, Tarek Hafiz, president of CBE Office Solutions in Irvine, California, received advice from his father that sent him hurtling reluctantly down a new career path. However, it turned out to be one that has provided him with stability, security, and an opportunity to make a difference in his community.
Born in Egypt, Hafiz spent his first nine years there before moving with his family to Kuwait for the next nine. At age 18, he arrived in the U.S. to attend school in 1978. Although he never finished his formal education, he was still able to acquire a priceless amount of business acumen from toiling in various sales positions, including selling retail clothing and insurance, in the years that followed. None of those sales positions appealed to him, but he did soon discover something about himself that would distinctly shape his future—he had a knack for selling.
The problem was figuring out what to sell. That question was answered when his father, who sold copiers in Kuwait, suggested he try selling copiers here in the U.S. At first, that idea didn’t appeal to Hafiz. Regardless, he applied for sales positions at two different copier dealerships and was offered positions at both. He accepted a position with a Southern California Konica dealership. That position would provide him with a keen understanding of the copier business and eventually lead him to starting his own dealership.
Hafiz remained with that dealership for six years, but after being passed over for a sales management position and feeling unhappy about the direction of the company, he left. That’s when Hafiz received some equally helpful advice from his brother, who owned a computer company in Southern California called Cell Micro. He suggested that Hafiz start his own copier dealership, pointing out that he was already making money for other people. Why shouldn’t he make some more money for himself?
His brother set aside office space in his warehouse for Hafiz, and his copier dealership, Cell Business Equipment, was up and running in 1993. After Hafiz’s brother sold the business a few years later, he was left with the name CBE, which today operates as CBE Office Solutions.
CBE has grown to become a $35-million dealership, selling Sharp, Canon/Océ, Ricoh, Samsung, and HP, along with solutions from Nuance, Print Audit, Laserfiche, and Prism Software.
Diversity Rules at CBE
Southern California has a rich mixture of social and economic backgrounds, races, religions, ethnicities, ages, cultures, and countries of birth among its population, and Hafiz and his employees mirror that diversity. At CBE, there’s mix of nationalities, including Filipinos, Cubans, Vietnamese, Cambodians, and Romanians, as well as African Americans and Latinos. Hafiz firmly believes that this diversity makes a difference to CBE’s customers.
“When a customer calls, they know there is someone from their community on the other end doing business with them,” he said. “We’re an American company, but we have many nationalities and speak many languages here—English, Spanish, Arabic, Persian, Romanian.”
CBE also has a few employees who are U.S. military veterans.
“We are so proud to have them on our team,” stated Hafiz.
In Search of More Growth
Business has been good this year, even if CBE hasn’t been growing as rapidly compared with past years. That said, the dealership is tracking ahead of last year, so Hafiz is satisfied.
CBE’s core business is 35–45 ppm MFPs. While most of CBE’s customers are SMBs, the dealership also serves school districts, government agencies, financial institutions, and some larger entities.
Of late, the dealership has been doing well with Canon, Océ, and Ricoh production and wide-format equipment. Production is CBE’s fastest growth area, as well as government contracts.
“We’re trying to grow those as fast as we can,” Hafiz said who adds there’s still room for improvement, particularly in the production space. “The biggest challenge is to keep dedicating our sales reps to find opportunities. [The opportunities are] there, it’s just a matter of finding them.”
Other new opportunities that Hafiz is encouraging his sales reps to pursue include MPS and IT services. Here, the challenge is changing the mindset of his sales reps who are used to closing business on the spot or within a shorter sales cycle.
“That’s probably one of the reasons why copier companies struggle [with MPS and IT],” observed Hafiz. “The MPS and IT sale takes longer so guys try to stay away from it. We’re trying to get our sales people to understand it takes a little longer, but the rewards are a lot better.”
MPS is another growth area for CBE. The company began offering MPS seven years ago, but it wasn’t until two years ago that this segment began to take off, thanks, in part, to the addition of two MPS specialists.
“That’s a business that’s growing, and if the opportunity arises from HP buying Samsung, that might help us with MPS because most of the equipment we have under MPS is HP,” noted Hafiz.
CBE’s acquisition of an IT company earlier this year is expected to further grow the MPS side of the business, as well as position the company for future growth in an ever-evolving industry where page volumes are declining.
“We service the customer with the copier,” said Hafiz. “We service the customer with the scanner. We service the customer with their printer. We service the customer with mailing equipment. And they all connect to one thing, and that one thing is the server. Whoever controls the server controls everything around it. That gives us an opportunity to go back to our customer base and earn their business on the IT side. If we protect the customer that way, we protect ourselves.”
To assist with IT, Hafiz hired an individual with experience running the IT businesses of Canon and Konica Minolta. His initial responsibility is merging CBE’s office technology operations with the IT company, which were still operating as separate companies at press time. As of January 1, the two will operate as one.
When it comes to selling IT services and MPS, Hafiz noted patience is a virtue and growth doesn’t happen overnight. Besides the addition of the two MPS specialists, tweaking sales reps’ compensation plans has also helped this segment of the business grow. To achieve their quarterly bonus, CBE’s reps must bring in one MPS account and one IT account each quarter. That strategy has been just the ticket for getting a sales rep’s attention. Now, a discussion of CBE’s MPS and IT services offerings is part of every sales call.
“These are the things the sales rep has to mention to the customer, and once he mentions them, you find there is somebody out there looking for whatever you’re selling,” noted Hafiz, who also believes that the dealer can bring a certain component to IT services that is mostly missing right now. “We know service better than anyone else.”
Hafiz has high hopes for IT and expects CBE to derive most of its income from IT services in the future.
“Most of my sales [reps] are too young to know that copier companies with typewriters, and you see where typewriters are today,” stated Hafiz. “I don’t think the copier will disappear completely, but I don’t think it’s going to be the biggest part of the business [in the future].”
The CBE Edge
CBE’s primary competition in Los Angeles, Orange County, and San Diego markets are manufacturers’ direct branches.
“We don’t compete against as many [independent] dealers as we used to, but the manufacturer is tough competition,” lamented Hafiz. “We carry four product lines, so we compete against our own manufacturers, and they’re basically buying the business. It is frustrating, but I don’t know what we can do to change that. Not every manufacturer gives it away, but I understand that they need to keep the factories running, and that’s why they do it.”
Despite his frustration, Hafiz still feels that CBE has an edge when selling against direct branches.
“A dealership is better equipped to serve the customer than the manufacturer is,” he contended. “[For exaample], my guys can walk in here, they can text me, call me anytime, and we can make a decision on the spot. We can do things the manufacturer can’t do. We joke and say, ‘We can deliver a machine faster than they can deliver a pizza.’”
Sometimes that’s within an hour of closing the deal.
After more than 30 years in the business, what’s the biggest difference of the CBE of today compared to when Hafiz first started the business?
“I’m a lot older and have gray hair today,” he laughed.
But seriously, the biggest difference has been CBE’s growth, in the number of customers it serves, the revenue it has brought in, and the increase in personnel. Today, CBE employs more than 110 people, and Hafiz appreciates the contributions of every one. It is CBE’s team that is responsible for the company’s success. They’re the ones who continue to motivate Hafiz to get up every morning and come to work.
“One of the things that excites me most is seeing the growth in my people,” said Hafiz. “I have people who have been here over 20 years. Some have been here for 18 years—[people] who started here out of college now have homes and families and are involved in the community. That’s what really makes me happy.”
Hafiz remains on a focused mission to instill his obvious and infectious enthusiasm about coming into work every day to his employees.
“I tell [my employees] that the day will come when on Friday, you’re looking forward to coming back to work on Monday,” said Hafiz. “That’s the culture I want to build in this company.”
With our early Monday morning interview winding down, it’s just about time for Hafiz to start his week. Next up for him is a meeting with his VP of Sales to plan the week ahead, followed by a visit to his new IT company. Then it’s back to the office for an interview with another job candidate.
“We’re always looking for good people,” Haifz told me. “We used to hire a lot faster, but it’s now become a challenge to find good people.”
Despite both the challenges and the successes of running a dealership in this industry, the one thing Hafiz doesn’t have is any regrets.
“I can’t think of anything else I’d rather be doing,” he said.
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Supporting the Community
CBE is highly committed to giving back to the local community that supports and sustains its business, and 5% of all of the dealership’s profit is donated back into the local community. The several beneficiaries of CBE’s generous support include the following groups: Angels on the Frontline, Arch of Southern California, Habitat for Humanity, Share for SELVES, Orange County Mission, and the Southern California chapter of Easter Seals. CBE also supports youth sports teams, community endeavors, and local food banks, and donates equipment to non-profit organizations.