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Young guns Featured

10:48am EDT October 23, 2001

Father doesn't always know best. That fact doesn't offend Gus Thomas, whose sons are now leading the company he founded 20 years ago and pushing it to greater financial heights than he ever did.

Thomas started Datafile in 1981. Since his retirement in 1996, his sons, Andrew and Jim, are credited with increasing the company's profitability an astounding 900 percent and annual revenue by 51 percent.

"They put it together better," Gus says of his sons taking charge of the company that converts data and documents to microfiche, microfilm or CD-ROM and provides storage for those files.

Andrew, Datafile president, and Jim, vice president, restructured the company by automating and reorganizing its operations with the latest technology. Gus never realized how much new technology could help the business since, even though he hatched the idea behind Datafile, he did not have firsthand knowledge about how the processes and equipment worked. Instead, he had relied on managers to run the show and make sure the company operated efficiently.

"These managers did a good job of producing our product but did not seem to have any ideas on how to improve the production process or expand the business," Andrew says. "When Jim and I took over, the ideas started immediately."

Andrew and Jim had the advantage of already knowing several aspects of the business, Andrew says, since both of them had worked for the company on and off since its inception.

"We were both heavily involved in operations, then later I was involved in the accounting, and Jim was involved in sales," Andrew says. "We both learned every task in the business through the years leading up to 1996."

The brothers didn't wait until they were in charge to make suggestions about business operations. However, they were "careful not to step on the toes of current managers," Andrew says. "Once we took over, there was a clear authority to make the changes."

They started transforming the company immediately.

"It's funny how the ideas start flowing when it's your own money at risk," Andrew says.

Money talks

Profitability started increasing the first year under Andrew and Jim's direction.

"My brother and I took a close look at every component of our business," Andrew says. "In each component, we invented better ways to accomplish the tasks. This process also forced us to further organize our operation, which resulted in a higher level of quality control and faster turnaround to our customers."

As a result of investing in new equipment and software, and hiring employees who were more qualified, Datafile's production turnaround improved by 200 to 300 percent in most cases, and quality control improved dramatically, too, Andrew says.

Those results fell directly to the bottom line. Prior to the younger Thomases taking control, a typical profit margin for Datafile was 4 percent. Today that margin has reached 36 percent.

The fact that Datafile has hit new profit records under Andrew and Jim's leadership is even more impressive considering the company also purchased a larger building in 1999. Until then, the company had been renting a 4,500-square-foot facility in Worthington.

"We had been there 10 years. We were crowded and needed to expand," Andrew says.

The brothers sought their father's input, however, before inking the purchase deal.

"I was able to provide some guidance -- warning them about such things as location, size, applicability to their business, locating financing for the purchase."

The 10,000-square-foot facility they decided to purchase in Powell was financed through The Ohio Bank.

"I guess I act as a consultant sometimes," Gus says of the advice his sons seek from him.

"He drops by the office every couple of weeks and we have coffee and take that time to pick his brain," Andrew says. "His insight is crucial. There are so many opportunities out there, and sometimes you need someone to remind you to keep focused on your main business."

Why 2 heads are better than 1

Gus considers himself a good businessman. According to the elder Thomas, his strong point with Datafile was, "getting the business started from zero. I started the company. They just took it from what I did and improved it."

When he ran Datafile, Gus didn't delegate many responsibilities.

"Early on, as owner and president of Datafile, I was in charge of marketing, sales, hiring, setting up sales procedures and pricing, personnel management, purchasing of equipment and supplies," he says.

A general manager took control of day-to-day operations, and the only other employee at the time was the office manager. By the time he retired, Datafile employed 10, as it does today.

"My leadership style has always been fairly autocratic," Gus says.

His sons' strong point is that they have different areas of expertise, Gus says, pointing out Andrew's background in accounting and Jim's in marketing.

"You have two people working on two different things, while I was working on all of it," he says.

Among Gus' duties was attracting clients. But, after years of conducting business operations day in and day out, coming up with new ways to sell Datafile's services wasn't easy.

"Younger blood comes in and has new ideas on the marketing," he says.

Andrew and Jim have used advertising and marketing consultants much more than their father did, for example. And, upon taking over, they took a close look at customer accounts to determine profitability and adjusted pricing where they deemed necessary, Gus says.

"They were able to create procedures and make capital expenditure purchases that improved overall efficiency," he says.

And although Gus says customer relations were strong under his leadership, his sons have managed to improve the company in that area, too.

He says his sons treat every customer with "respect and patience. They made an effort to introduce themselves to customers and made telephone follow-up calls to ensure customer satisfaction on the completed work."

The result: Datafile has retained long-term working relationships with most of its customers, Andrew says, pointing out that OhioHealth, Columbus State Community College and Honda have been on its client list for more than 12 years.

No generation gap

Gus says he always hoped his sons would one day want to take control of Datafile, but he wasn't going to force it on them.

"They would have to want it to do it," he says.

Had his sons not been interested, Gus says he probably would have tried to sell the company. But when he started talking about retiring, Andrew and Jim were enthusiastic about taking his place.

"I was surprised and elated that they wanted to continue the business I had worked so hard to build," Gus says.

Andrew says he "kind of guessed" he someday would be a Datafile executive. Jim says he had other plans; trained in aviation and marketing, he was a pilot in the early 1990s. But his experience with working at Datafile in the past helped attract to him to his current leadership role.

Because his sons are "personable and hardworking and have the educational background for business success," Gus says he left Datafile in their hands with confidence.

Another Thomas son, Pete, does not have an ownership stake in the business, but works at the company. Although Gus wouldn't say why Pete isn't an owner, he notes it "does not imply anything negative about the situation."

In fact, Pete is considered by his brothers to be an integral part of Datafile.

"Pete does not have a business interest in the company but is very important to our image," Andrew says. "He is in charge of pickup and delivery of Datafile's product. He is the face of our company, and the customers absolutely love him."

Gus says he is pleased with what his sons have done as the new generation of Datafile leaders.

"I had brought Datafile to a certain point," he says. "They have expanded the business and brought new energy, efficiency and profitability with their fresh vision.

"They've done an excellent job. I'm really, really proud of them that they've progressed so well." How to reach: Datafile, 885-9050 or www.datafile-corp.com; President Andrew Thomas, andy@datafile-corp.com; Vice President Jim Thomas, jim@datafile-corp.com

C.J. Cross (CrossRoberts@aol.com) is a free-lance writer for SBN Magazine.