Fast Lane
Growing pains
How to expand into new markets
By Matt McClellan
Smart Business St. Louis | November 2008
Page 1 of 2
Ralph Pfremmer
founder and CEO, Pfoodman Holdings LLC
Ralph Pfremmer had grown
Pfoodman Holdings LLC
to $9 million in annual revenue in the St. Louis market,
but he knew he’d hit a plateau.
To grow further, Pfremmer
needed to expand his on-site
catering management company
to new markets, a challenge for
a company with a limited number of employees.
“Nobody knows us there,”
says Pfremmer, the company’s
founder and CEO. “And we
don’t have this traveling caravan of employees that can just
be uprooted. We have to go in
and create a buzz about ourselves and recruit employees
into our culture.”
Since expanding into
Indianapolis and Cincinnati,
Pfoodman has grown its
270-employee organization to
$12 million in revenue.
Smart Business spoke with
Pfremmer about how to expand
your company into a new region
and why you shouldn’t farm out
your employees’ creativity.
Q. How can a business build
brand awareness when
expanding into a new region?
We’ve got clients moving into
new territories, so we’re on
their shirttails and we go in with
them. Our marketing strategy is
to overlay the new footprint
wherever we go with the three
different elements of our business — educational food service, senior food service and
industry food service.
There is a two-year buildup
process. During those two
years, we’re in the field shaking
hands and creating a buzz about
our company that’s coming to
town. Also, the concept of
strategic philanthropy is one I use a lot. It’s basically guerrilla
marketing. You go in and attach
yourself to a meaningful cause.
In our case, we do a lot of work
with outdoor living charities.
Q. How do you prepare for
the changes that expanding
regionally will bring?
Moving into new markets is
going to require a lot of change,
and it’s going to require more
resources. Whenever your company moves outside of your
core area, it requires change.
Here, we found ourselves moving from a
small business that had
always been very
approachable by employees and managers into
these new markets, and
we fear dilution.
One of my fears is not
being able to communicate the way I have. It’s
actually put me out in the
field more, with more
urgency to touch the lives
of my employees so they
really see what they’re
getting themselves into.
I created a couple new
layers of regional managers, and that costs
money. Regionalization
requires investment. As a
standard of accountability, I’m
not hiring regional managers; I’m
promoting them from within.
... I realize that I don’t have all
the answers as CEO of this business — it’s absolutely not going
to be micromanaged as we
move from small- to mediumsized, multiunit to multiregional.
We are providing a lot of
vision to the regional managers.
We have to have an organizational chart that people understand the flow of information
from one person to the next as
it relates to a region.
So we’re looking at it from
30,000 feet and saying, ‘OK,
how is this thing going to flow
through, and how much money
is it going to cost?’
