Putting the brakes on bankruptcy Featured

5:46am EDT March 22, 2005
Until 1-1/2 years ago, Rick Sippola was the president of a Willoughby Hills accounting firm. Today, he owns The Carnegie Body Co., a Cleveland-based heavy-duty truck and trailer parts, service and equipment company.

"I was helping people improve the profitability of their businesses (at the accounting firm). I was helping people buy and sell businesses," he says. "I was helping people refinance their business, as opposed to doing financial statements and tax returns strictly. So this is just a natural extension of what I was already doing."

When he bought Carnegie out of bankruptcy on Dec. 30, 2003, he had a plan: "Businesses are run by people, supplied by people and sell to people, so you have to make sure that you focus on people and your relationship with them."

His first goal was to re-establish relations with 150 to 200 vendors to get product back on the shelf. Sippola, his office manager and his parts sales manager called vendors to get Carnegie opened up for credit.

"It took us three months to get through that process, and it was a lot of hard work," he says. "We said, 'Here's the (vendors) that we have open credit with, and here's the ones that we don't,' and our goal was to make the list of vendors that we don't have open credit with zero. So we just diligently worked on the list and, more or less, achieved our goal."

Sippola's next goal was to ask employees how to improve sales. They suggested increasing inventory and service, as well as getting better deliveries and fill rates. Those ideas aided in the turnaround process, which brought in annual revenue of $8.5 million in 2004 and an anticipated $11.5 million in 2005.

"Last year, our company grew at a rate of 15 percent," Sippola says. "In January, we were up around 50 percent, compared to January 2004 sales, and we're off to a great start in February. We're predicting that our sales companywide are going to be up about 35 percent this year, and it's a result of a team effort."

Re-establishing rapport with customers also played a part in the turnaround.

"We spent a lot of time getting out, talking with the customers and letting them know that we were responding to their needs: 'What do you need?' 'What can we do better?' 'What do you like that we do?'" Sippola says. "They'd tell us and then we'd respond to it to try to give them more of the right parts in stock, more customer service, getting their truck fixed faster or whatever it might take. We tried to make sure we're matching the right product with the right solution."

They found one right solution last year when Carnegie's mechanics repaired the Hershey Kissmobile.

"I don't know how we ended up coming across that job but we did. It was successful, and we have the pictures to prove it," he says.

Carnegie will be adding more product lines in the future, as well as hiring eight or nine more employees in 2005.

"We're just going to continue to grow. We see plenty of opportunities to service our customers, and we're going to continue to take advantage of those opportunities," he says. "I don't want to get too heady about it, you know, but so far, things have been successful. We're moving things in the right direction."

Sippola says it's important to stick to a vision and have an honest and realistic approach to doing business.

"You've got to live in reality. I've become a much more grounded person. I drive a pickup truck now; I used to drive a Honda," he says.

HOW TO REACH: The Carnegie Body Co., (216) 749-5000 or www.carnegiebody.com

Reading is fundamental

A common theme among successful business owners is the desire to better themselves through education. Rick Sippola, owner of The Carnegie Body Co., prefers to devour business publications daily -- two newspapers and "every business magazine I can get my hands on that's worthwhile."

"Reading those magazines is important to getting an understanding of what's happening in the world today," he says. "If you pick up one little tidbit of knowledge, it's good for you. You can also learn from other people's mistakes because I think that the press is also good at pointing out why some people fail."

Ever since reading Tom Peters' book, "Passion for Excellence" nearly 20 years ago, Sippola has been an advocate of Peters' theory of "management by walking around."

"Subconsciously, when I read that, I said, 'That makes a lot of sense.' So I walk around a lot and find out what's going on. I go out and visit with customers; I go out into the shop and find out what we're doing on jobs," he says. "As an example, this morning we had a guy come in for a job interview, and we asked him to show us how he could weld, and I went out and looked at the weld after he was done. Not that I'm the expert on welding or anything but I guess I'm a little bit more of a hands-on person."

"You end up getting a lot of product knowledge by walking around. I don't just sit in my office all day; I spend half my time walking around talking to people and learning. My goal every day is to come in and learn something new. By having that thirst for knowledge, I've been able to go out and learn a great deal about our business and what makes it work."