Morgan Lewis Jr.
Because sometimes, the easy path isn't the one worth traveling. For some people, it's more important to create their own legacy. Each of these men was imbued with the desire to distinguish himself, just as his father before him had done.
Ron Watt Jr. is the son of the founder of Watt, Roop & Co., which was later acquired by St. Louis-based Fleishman-Hillard.
Cullen Roth is the son of Edwin Roth, who bought Airport Parking Company Of America (APCOA) and grew it to a $250 million corporation with facilities in 45 states and across Europe.
Daniel Ramella is the son of Julius Ramella, who bought Cleveland Menu Printing Inc. and built it into a successful company.
The sons are in different phases of their careers. Watt, at 27, recently founded his own public relations and marketing communications firm.
Roth turned around a struggling manufacturer, then bought it from the owners. Today, his company stands on the verge of major growth.
The most seasoned of the trio, Ramella, joined Penton Media Inc. as a sales trainee and worked his way up through the ranks to president. Retirement may not be far down the road for him.
Their reasons for not joining or staying in the family business vary, but all are satisfied with their decisions, and each attributes his success to lessons learned from his father while growing up in the business.
"Being a family member in a family business is an absolutely terrific opportunity to learn about the ins and out of the business world on a first-hand basis," says Ramella, whose brothers still run Cleveland Menu Printing Inc. "Any child that's fortunate enough to have a family business as part of their growth experience has a significant advantage, because it's almost like living an MBA."
Ron Watt Jr. extends his arm and points down West 6th Street toward the heart of downtown Cleveland.
"You can see it from here," he says, his broad brown eyebrows furrowed, head turned to the right. "That's where we started less than a year ago."
At the other end of Watt's outstretched finger is his Warehouse District apartment, which was the second headquarters for Hybrid Marketing, the marketing communications firm he runs with President Michael Zimmerman.
These days, Watt is perched high above the street on the third floor of the Bradley Building. The offices of Hybrid Marketing, with its refinished hardwood floors and high exposed ceilings, are much more suited for a company office than a 27-year-old bachelor's apartment. But they remain a far cry from the 52nd floor of Key Tower, the former headquarters of his father's company, Watt, Roop & Co., and later Watt/Fleishman-Hillard.
Watt, who started there in 1997 as an account executive, could easily still be at the company founded by his father and James Roop more than 20 years ago. He had the right name and the right experience. He grew up in the public relations firm and picked up a marketing degree at Fordham University in the Bronx, and held internships in Germany and at Picker International.
But only a year after he started working there, the family business had new parents -- corporate parents -- which left the entrepreneurial Watt often frustrated with the layers of bureaucracy and staff.
"In a larger agency situation, you can't turn on a dime," he says. "Everything takes longer. It's as simple as that. If people don't want to believe that, they're lying to themselves."
Watt still wanted to pursue a career in marketing and public relations, even if the company wasn't his namesake.
"Frankly, I don't know what else to do," shrugs Watt. "I started as an office boy in about the seventh grade. They were summer jobs, but I thought it was cool. I thought it was a really cool business because there's a lot of creativity running around."
Hybrid isn't Watt's first stab at business. Fresh out of Fordham in 1997, he and a classmate founded a record label called G21 Records, a subsidiary of WRC Entertainment Management of New York City, which was owned by his father. The label signed five rock and pop bands but folded months later, and the music publishing rights were sold back to the artists.
"I wanted to get out of it," Watt admits with a good-natured chuckle. "It was pretty nerve-wracking dealing with prima donnas all the time."
So Watt moved home to Cleveland and joined his father at Watt, Roop & Co. When St. Louis-based Fleishman-Hillard, at the time the largest PR firm in the world, bought the company, the cultural shift was dramatic.
"It's a wonderful company, but it was a big multi-national company and we lost the entrepreneurialism that was the old Watt, Roop & Co.," says Zimmerman, who had been president and chief operating officer of Watt. "I missed that. (Hybrid) was a need in the market and there was an opportunity to recreate the entrepreneurialism."
Zimmerman left Fleishman-Hillard shortly after the takeover and founded Hybrid, and Watt followed soon after. Zimmerman has known Watt Sr. almost as long as his son has known him. He joined Watt, Roop & Co. in 1983 and bought out a portion of Roop's share when the partnership ended in 1996.
Like any good salesman, Watt and Zimmerman continually steer the conversation toward their product, Hybrid Marketing. Even when they talk about their mentor, Watt Sr., the topic somehow swings around to their company. It's clear he taught them well.
"I learned we're businessmen first," Watt says. "Our job is to increase sales. Our job is to make magic happen for the client, and usually when you take a business approach and involve creativity and strategic thinking, those are the ingredients for that magic."
When Watt told his father of his plans to join Hybrid, there were no pearls of wisdom offered to his son. He simply said, "Good luck."
"When he was two years older than I am, he ended up going out on his own anyway," Watt says. "So it's about an entrepreneurial spirit, and I think he realizes that I've always had that ever since I started lemonade stands when I was 3, or shining shoes or shining desks. You can't hold back that entrepreneurial spirit.
"I've never been happier in my entire life, and I'm still only 27. It's a roller coaster, but it's fun. You have to keep remembering why you're in this situation. It's because you have a dream, you're following your dream. A lot of times that's more important than anything."
So far, Watt is off to an impressive start. In less than a year, Hybrid has landed 17 clients, including Myers University, investment banker Amerge, SS&G Technology Consulting, Restaurant Developers Corp., which owns Mr. Hero and Arabica, N2Net and network integrator Verity Solutions.
Cullen Roth says he was destined to be the "Prince of Parking." Those regal inclinations changed in 1982, the year his father's business, Airport Parking Company Of America, better known as APCOA, was acquired by Buffalo-based conglomerate Delaware North Cos.
Roth's father, Edwin, was not one to rest on his laurels, though. After he sold APCOA, Edwin bought the franchise rights for Chuck E. Cheese pizza restaurants for the state of Ohio, as well as in Atlanta and Houston. At its peak, he managed 17 restaurants.
Cullen Roth fully expected to join his father and his brother, Corey, in the family business. He spent winter vacation his senior year at Cornell with a construction manager learning how to build a Chuck E. Cheese. He spent the previous summer in management training and bouncing between Atlanta and Texas, building more restaurants.
In his final semester of college, Roth was preparing to interview for a commercial lending position at a major bank. The night before his interview, he noticed a management consulting firm called Bain & Co. was scheduled to give a presentation about itself to graduating seniors.
"What the heck does a management consulting firm do?" Roth thought.
The presentation was apparently quite effective.
"I was really fired up," Roth says. "It sounded exciting and interesting, and at the same time they made it sound like it was a lot of fun, which I should say it was."
Roth's enthusiasm paid off during his interview with Bain. He and about 100 other recent graduates from around the country were hired by the Boston consulting firm. Despite his years of experience working for the family business, Roth remained intimidated by his peers.
"I am sure out of all the people I worked for, I was by far the dumbest," he says. "I was surrounded by these brilliant people. It was amazing. I felt like an idiot, but that's another story. I learned more from watching them work, and seeing what they did. It was a great education."
The long hours at Bain began to wear on Roth, though. After three years, he was looking for a way out, but he was no longer interested in joining the family business. His experience as a management consultant, combined with the influence of his father, inspired Roth to try his hand as an entrepreneur.
"My plan was to find a small business that was in trouble," he says, a smile emerging on his bearded face. "I was going to take everything I learned from my consulting days, I was going to find this small business that was in trouble, I was going to turn it around, and three years later I was going to sell it for a huge profit. I was going to do the same thing over and over. That was my plan back then."
To date, Roth has yet to sell that first business.
Through his father's accountant, he learned of a company called Working Walls that manufactured and installed custom fabric-covered bulletin boards and acoustical wall panels. The company was founded by a former graphics painter who overheard a conversation between two Sherwin-Williams executives while painting a conference room in their offices.
"They were complaining that they needed this Velcro-compatible wall board, and how much it was going to cost," Roth says. "My partner interrupted these guys and said, 'Give me 24 hours, I'll see if I can find you a deal.'"
The next day, Roth's business partner, John Mates, returned with the first Working Walls panel.
Eventually, Mates phased out the graphics painting to making more Velcro-compatible boards. He started selling to office furniture dealers, and over the years added different types of fabric to the wall panels. Sales were strong, but Roth says his partner wasn't controlling costs.
"He was effectively losing money on every panel, and trying to make it up in volume," Roth says.
That was a surefire method to failure.
So in September 1987, Roth bought half the business. Within a year, he turned the company around. Three years later, instead fulfilling his predictions and selling the business for a large profit, Roth pulled an about face and bought out his partner.
"It was time to invest more money in the business, and it was time to start signing your name on the dotted line with personal guarantees and things like that," Roth says. "(Mates) was married with a couple kids; I was still single. For me to personally guarantee something wasn't as big a risk as it was for him. He and his wife had a discussion and he decided that he'd rather not do that."
At the same time, Roth's father and brother sold the Chuck E. Cheese franchise rights and purchased and managed other businesses including Aerosol Systems Inc. in Macedonia. Edwin has since retired and moved to Aspen.
"The most important lesson I learned from him (Edwin) is that you can't just walk in the door and make a zillion dollars," Roth says. "I know it's a clich, but you really have to bust your butt. You have to work hard. It's not a 9 to 5 job. It doesn't work that way. The hours are much longer, and even when you're on vacation, you're still working."
Roth remembers childhood ski trips with his family in Aspen. During breakfast and lunch, his father would be on the phone to the office.
"He'd get all his phone calls out of the way in the morning, then he'd make a few in the middle of the day, and in the afternoon there would be a few final calls," Roth says. "When I go on vacation, I do close to the same thing. We'll have fun with the wife and the kids, and at some point I'd say, 'Excuse me, I have to make a few phone calls.'"
Although Roth is making his own name as a Cleveland entrepreneur, he still turns to his father for occasional advice.
"He and my brother, the three of us, will get together and talk about business," Roth says. "It used to be quarterly, but now it's probably twice a year. We don't have as many official meetings. We have a lot more unofficial meetings. I know that I'm not as good at this as I could be, and I need to rely on as many helpful advisers as I possibly can."
Roth should be calling his family more often in the coming months. He is acquisition negotiations with wall panel companies in Michigan, Florida and New England, and plans to release several new products within the next six to eight months.
"A lot of these other panel manufacturers are much more regional than us," Roth says. "There were a couple deals that have come close to happening. Either they change their mind or I would change my mind at the last minute because there would be a new piece of information that would change the structure of the deal. We're still looking at that."
Roth has two daughters, ages 5 and 7, who one day might confront the decision he faced while a senior in college: to join or not to join the family business. But it's a little too early to tell.
"If they want to join, sure," Roth says. "Right now they're interested in Barbie and swimming. When we start making Barbie covered wall panels, I'm sure they'll be all over it. If I'm still doing this and they want to be involved, I'd be thrilled. But we'll have to see."
Julius Ramella grew up in an orphanage in the early 1900s, and when he was 18, he went to work for a small menu company as a printer. He ultimately bought the printing division of that company, and in 1930 formed Cleveland Menu Printing Inc., which today prints menus for restaurants, hotels and country clubs worldwide.
As a teen-ager, Daniel Ramella worked for his father's business in the summer. He printed, proofread and delivered menus to restaurants around Cleveland. Ramella enjoyed the work, but even as a young man, he knew it wasn't going to be his future.
"I had the urge to try something different," says Ramella, who today is the president and chief operating officer at Penton Media Inc., a $370 million publicly traded company. "I had a real interest and desire to try new things and apply my degree. It had nothing to do with not wanting to work there as much as it was to try something different and see the world outside of my family's business."
After graduating from Boston College in 1974, Ramella joined Arthur Andersen as an accountant.
"I was going to become a lawyer," Ramella says. "But by the time I got out of school, I didn't get into any of the law schools I selected so I needed to get a job. I was an accountant by training and figured I might as well use the degree I earned in college."
After three years of crunching numbers, Ramella was eager to pursue a career where he could interact with people more often and signed on as a sales trainee at Penton Media. Like his father before him, he rose to the top.
"There is some ink in our blood on both sides," Ramella says. "But (Penton) is essentially a publishing company: We create content, operate trade shows, produce magazines and use the Internet as a communications medium. While there is a little bit of common thread from the printing standpoint, my experience was mostly with the day-to-day publishing business of Penton."
Restaurants, however, have been part of Ramella's life in more ways than his father's business. During his tenure at Penton, one of the magazines where Ramella served as sales manager and then publisher was Restaurant Hospitality. On top of that, his wife's family owned the Pat Joy's Tavern restaurant group, which had two locations downtown and two on the west side of Cleveland.
"I had a lot of entrepreneurial spirit that surrounded me on both sides of the family," Ramella says. "In many ways working at Penton was very entrepreneurial in its own right because the way we're set up as a company. When you're the publisher of a magazine, you act in many ways as if you're a president of your own small business."
That kind of corporate culture is the main reason Ramella says he has stayed at Penton since 1977.
"There were a number of times in my Penton career when I was going to leave and try something on my own," he says. "Some of it was tempting to maybe join the family business, other parts of it were maybe to launch my own magazines and start my own company, but every time I got kind of close to that decision, I got another promotion or opportunity presented to me here at Penton."
Ramella's experiences mirror those of Watt and Roth. Each has blazed his own trail, choosing to stay out of the family business. But none have forsaken the lessons learned from their fathers. In fact, Watt and Roth continue to learn new lessons every day.
For Ramella, the example set by his father serves as a valuable model for him as he runs Penton's daily operations.
"His work ethic was that you put your nose to the grindstone," he says. "You're going to run through some cycles, but you'll ultimately succeed if you work your business ethically -- take care of your people and your customers." How to reach: Hybrid Marketing, (216) 774-9272 or www.hybridmar.com; Working Walls Inc., (216) 749-7850; Penton Media Inc., (216) 696-7000 or www.penton.com
The green flag dropped at the Nelson Ledges race track on a lovely summer morning.
It had rained the night before, giving the asphalt track a luster, but today the sun was out and temperatures were to reach the high 70s. Perfect race weather, Kathryn Lyle thought.
Lyle was approaching the first turn at about 90 mph in her white BMW M-Coupe when a black Camaro two cars over clumsily shot past another driver on the right. The Camaro's tires snagged a slippery edge on the inside curve of the track and the driver lost control. His car struck Lyle's on the right, sending her car headfirst into the tire wall on the other side of the track, then more than 20 feet in the air, somersaulting until the car landed on its top.
But that's not what Lyle remembers.
"There was water everywhere," Lyle says, now sitting comfortably in the office of her downtown Chagrin Falls office. "The tire wall had collected all this rain water from the night before, and when I hit it -- boom!"
Lyle emerged from the accident with a sore neck but was otherwise uninjured. More than anything, she was angry about the extensive damage to her car. She wanted to have a "talk" with that Camaro driver.
"He must have had the 'red mist,'" Lyle says. "That's a racing term."
The red mist is that shot of adrenaline you feel in competition. It's that determination to win at almost any cost. It's that voice in your head telling you to push yourself, don't back off.
"This red mist washes over your eyes," Lyle says. "All you can see is how to get to the finish line, and nothing else matters."
Lyle, a CPA, business consultant and president of Lyle & Associates, says the red mist helps her not only on the race track, but also in business. The key, however, is to stay in control.
"This guy was falling behind and tried to pass with two wheels in the grass," Lyle says, still bristling. "It was a bad choice on his part. You don't try to win the race at the start. You have to finish to win."
Lyle got involved in auto racing through a college boyfriend, although she professes a lifelong fascination with cars. The couple drove down to Macon, Ga., to pick up his uncle's Datsun 2000 racing car and bring it to Cincinnati, where they were going to school. Lyle was in the pit crew, while her boyfriend raced in local Sports Car Club of America races.
Her love of racing lasted longer than her love of the boyfriend.
"When the relationship was over, I wasn't in the position to go driving myself, so I got into flagging at the race track," she says. "I went to a BMW Car Club driving school back in 1982, and I thought, 'Wow, this is cool. You can do this with a street car and it's almost like racing.'"
Eventually, Lyle's racing expertise surpassed that of her instructors, and it was time to put her car up against others in a wheel-to-wheel race.
"At driving school, there are no official lap times kept, so everybody lies about their times," Lyle says. "I can tell you how fast I went, and it's whether you believe me or not, there's no proof. In a race, there's official timing and scoring, it's there for everybody to see."
Lyle races almost every week when the weather's suitable. Luckily, tax time, her busiest time of the year, is the worst weather for racing. After April 15, she puts on her white fireproof Nomex racing suit and safety helmet for races in Ohio, Wisconsin and Colorado.
"It's a real adrenaline rush," she says. "It's very much a physical and mental challenge. You forget everything else you're doing when you're out there. It's the total opposite of what I do at work."
Lyle reconsiders the statement.
"I guess it's an adrenaline rush, too, when you help people achieve a breakthrough or help someone to see something a better way, a different way," she says. "What I like about accounting is the challenge of trying to help people manage their companies. It's all a challenge if you look at it that way."
Lyle started her firm in July 1989 with three clients, who are still with her: An electronics manufacturer in Cincinnati, an entertainment services provider in Beachwood and an insurance executive who lives in Chagrin Falls. She honed her approach to business consulting in her early days as a corporate accountant for one of the Big Five accounting firms, which was the Big Eight at the time.
"I was the client's financial VP for a fee, kind of outsourcing," she says. "It was a new concept at the time. We were trying to get inside the company and help the owner grow his business, whatever that took."
When she moved to Chagrin Falls, she admits her firm's growth was slow at first.
"I grew in spurts," she says. "It was slow because I didn't know how to go about it. You can't go around and knock on people's doors and ask if they need any help. It took a while to get rolling."
Her auto racing hobby, however, unearthed some unexpected business opportunities.
"A client in Cincinnati I met through the car club," she says. "I have a tire dealer who's a client that called me because they knew me from the track, and I have a bed and breakfast client near Mid-Ohio (race track) because I stay there when I'm down there for races."
By 1994, Lyle had 250 clients and three employees. Today, she has more than 800 clients and seven employees.
If there is anything she has learned from both racing and business, it's that you've got to plan. In racing, Lyle has to prepare her car days in advance. If she has a fresh set of tires, she has to drive on them for several laps, then let them sit for two days to a week before they'll be ready for a race.
In business, preparation is just as important.
"Too many people get involved in a business because they know how to make something, or they get downsized out of job and they have a skill and they decide that they're never going to get fired again," she says. "They just create a job for themselves. They take any customer that comes in the door. They give away business just to get business, where if I'm talking with a start-up, the first thing I try to figure out is the end strategy."
After preparing, Lyle drives test laps to get to know the track. In business, she says, you have to know the market if you want to compete.
"I had a client who wanted to sell $6,000 wedding dresses, but she had no idea if there was a market for them in the area," Lyle says. "Are we on trend where there are more or less of these being sold? I'm thinking less, but let's find out. Let's get the facts and figures."
Just as Lyle performs maintenance on her car, she demands her clients conduct performance reviews for employees and update policies and procedures. This is usually the most tedious -- but one of the most important -- parts of running a business.
"It's a real boring subject for most entrepreneurs," she admits. "But if you get hit by a bus tomorrow, is anyone going to be able to step into your shoes and carry on if your plan isn't in writing and up-to-date?"
In every race, Lyle faces at least 50 other cars on the track and has to be ready for the most erratic driver or changes in race conditions. In business, she tells her clients be prepared for unexpected changes.
"What if your biggest customer leaves you?" she says. "What if you ship a bunch of defective parts and they all get sent back? You've got to be able to react."
After she crosses the finish line, Lyle studies the in-car videotape to see where she can improve next time. It's the same in business, she says. Even if you've landed the big client or finished a project, there are always areas that can be improved upon."Customers come and go," she says. "The business owner always has to be looking ahead, improving the product, renewing patents for proprietary products, buying the better equipment to improve efficiency. There's never a shortage of things to do." How to reach: Lyle & Associates CPA, (440) 247-1178
Once a nationally-recognized downtown Cleveland bistro known for its homemade sauces and fresh seafood, Sammy's in the Flats' busy weekend traffic didn't attract enough diners to make up for slow weekdays.
On top of that, tax law changes in the late 1980s meant many executives could no longer deduct the full cost of business lunches as a business expense. Lunchtime traffic at Sammy's dropped off dramatically.
In 1990, Fugo was prepared to close the restaurant she and her husband, Ralph DiOrio, had founded 10 years earlier, and concentrate on catering and banquets. But it took another 10 years to finally shut it down.
"Had we been very decisive and bold, we should've closed the restaurant right when they passed that legislation, which many fine dining restaurants nationally did within a year," Fugo says. "We probably should've done that, but we were so emotionally attached to Sammy's, as sort of our baby, we talked about it for 10 years."
Sammy's in the Flats opened in 1980 as a night club that also served lunch. The restaurant added dinner to its menu the next year.
"Higbee Co. had property in the Flats that they were looking to sell, so they became our banker," Fugo says. "Using Sears credit cards and my grandmother's Westinghouse Roaster, we started as a night club."
The next year, the couple took out a loan to build a small kitchen, not only for dinners but for catered events. Those early events were a precursor to what would become its thriving catering and banquet business.
Sammy's, which is held under the corporate name City Life Inc., has five banquet facilities, three downtown, one in University Circle and one in Willoughby Hills. Fugo's chefs can serve up to 1,000 people at the Sammy's facilities, or can cater for up to 10,000 at an outside location.
Fugo first realized this potential in 1985 when the couple opened the 10th Street Market, an upscale grocery store. The market was a success, but not in the way Fugo expected.
"Customers wanted the food we had on display cooked and sent to their office or sent to their home or somewhere," she says. "Within six months of opening that store, we knew that catering was becoming more important. We looked at the 10th Street Market as very much our college experience in catering."
Fugo and DiOrio set out to learn more about the differences between catering and the restaurant business. They started attending catering trade shows and talked with consultants who were catering experts instead of restaurant consultants.
"Banquets and catering are a different type of sale than the restaurant business," Fugo says. "The restaurant business a retail-driven business. With banquets and catering, your operational success can allow you sales success. We've tried to be strong operationally, which has allowed us to build a sales team and a customer base of people who continue to support what we do."
Meanwhile, with the business meal tax law changes in the 1980s and an economic recession in the early 1990s, Sammy's in the Flats started to struggle.
"It was within a two-week period that we finally said, 'We've been looking at this for 10 years, it's time.'" Fugo says. "This was not a knee-jerk reaction at all. It was very slow and carefully deliberated. My mother is still mad at me that I closed the restaurant."
The restaurant closed in April 2000. The failure was difficult for Fugo and DiOrio, but thanks their efforts building the catering and banquet business, the coupled didn't have to start over.
"I couldn't have made my bankers any happier," Fugo jokes. "The bankers' reaction was, 'Why didn't you do this years ago?'"
Sammy's catering and banquet business continues to grow, thanks to the contacts Fugo and DiOrio built with the restaurant and the repeat corporate clients that hire Sammy's for business events.
The couple's unique perspective as both restaurant operators and caterers gives the business an edge over other food service operators.
"The food service business has not always been known for managerial excellence," Fugo says. "Our staff has a lot of years of experience. The reality is, in our business, it takes people about two years to become proficient in what we do because we don't always work in exactly the same space. You may call us to come to a party in your home that we're going to be at once. Our work space may change every day."
Sammy's 15-member management team is small for a company that hires as many as 700 part-time workers in a year and maintains a core staff of 100 to 200 chefs, servers, event planners and coordinators."We find in our business, a leaner organization is much more effective and much more responsive," Fugo says. "We intentionally run our management team smaller and stronger. We are totally a people-run organization. There's very little equipment or machinery in what we do, it's all people. It's very different from most corporate America." How to reach: Sammy's, (800) 837-5899
It's a word Handl-it Chairman and CEO John Peters uses often to describe his company, and one not commonly ascribed to his industry --sophistication.
Handl-it Inc., a Bedford Heights-based contract warehousing and distributing company, has grown from 20,000 square feet in 1992 to more than 3.5 million square feet scattered around the Cleveland area today by propelling the basic service of warehousing and distributing to a higher level.
Implementing the latest technology, designing more efficient and versatile warehouse systems and having an aggressive acquisition strategy have helped the company earn more than 400 contracts, including the state of Ohio's first six-year contract for warehousing and distributing liquor in Northeast Ohio.
Not bad for a company that started with one customer.
"We have more sophistication in our operations management so we can implement more cost effective layouts of our facilities," says Peters, who runs the company with his brother, Jerry. "I think they (the state) like the fact that we can attack problems quicker than a lot of people who are in this business."
Handl-it receives shipments from 80 liquor and distilled spirits vendors and distributes to more than 135 state liquor stores with the contract. While it's not the company's largest contract ever, it is one of the most challenging due to the number of order fulfillments involved.
However, the company has kept operations running smoothly, thanks to key elements of the Handl-it system.
Front and center
The layout (or profiles) of Handl-it's distribution facilities is based on movement of the products and not just numerical sequence of the inventory. The fastest moving items are docked in the front of the warehouse, closer to the shipping docks, so workers don't have to travel as far to pick them up.
When you're talking about 150,000 square feet, the time adds up. Thanks to this streamlined layout and a lot of hard work, Handl-it was able to ship multiple 9,000-case orders the first week of the state liquor contract. Peters says 5,000 cases is considered a large order.
Invest in technology
Handl-it has invested in state-of-the-art technology so it can offer customers features like computerized inventory systems, management reporting systems, bar coding, printing and scanning, and customers can transmit orders from their computers to Handl-it's computer.
The company also has its own Information Systems technicians who customize programming so that Peters can deliver customized invoices and shipping documents the way customers want to see them. Handl-it redesigned the state's computer program for distributing liquor because the old system was full of bugs.
The average manager at Handl-it has at least 20 years experience in his or her field.
"Even though Handl-it has only been around for the last nine years, I've surrounded and built an organization of people that have a lot of good experience," Peters says. "It's the people that make the business work."
Handl-it employs about 180 people. When large orders arrive, it can call on its temporary labor pool and jump to 300 workers for a project within days.
Acquisitions to build upon
Handl-it was started with a $1,000 rent deposit on Peters' Visa card, but has since acquired more of its property instead of renting and bought out other companies to enhance the business's distribution side.
"We've made two acquisitions a year for the last three years," Peters says. "The whole idea behind the acquisition strategy is to find companies that fit our growth strategy and then enhance them. Enhance them with our sophistication, our volume and our customer base."
Handl-it acquired Con-Pak, a Columbus-based packaging, company a year ago. It acquired another packaging company, Cornerstone, in April, along with a lumber reloading center.
With size and diversity of services, Handl-it attracts Fortune 500 companies as well as start-ups.
>"The big guys are not comfortable doing business with you if you're small and not sophisticated," Peters says. "You can do the business small guy, the start-up guy, but you're never going to get the big guy." How to reach: Handl-it Inc., (216) 831-4883 or www.handlit.com
Morgan Lewis Jr. (email@example.com) is a reporter at SBN.
Invacare Corp. CEO A. Malachi Mixon is anything but comfortable with his company's position as the world's leading manufacturer and supplier of wheelchairs and other home medical equipment.
It's not a surprising attitude from a man whose upstart wheelchair company in 1979 overtook the complacent industry leader at the time.
But today, since he has distanced Invacare from its competitors, one of Mixon's latest initiatives is a multi-million dollar branding campaign designed to raise Invacare's profile with the average consumer. As Mixon puts it, he wants to see the Invacare brand name "up there with Coca-Cola and Nike."
"We're the largest manufacturer and distributor of home medical products, but consumers really don't know our brand," says Mixon, who revealed his plans recently at a Leadership Breakfast meeting sponsored by the Cleveland Engineering Society. "With our place in the industry, we have a chance to really make ourselves known. I don't think any of our competitors are in a place where they can launch this type of program."
Invacare is on pace to record $1 billion in sales this year, a first for the Elyria-based company and a $122 million increase over 1999 revenue. Throughout its growth, Invacare has invested its resources into product development, distribution and building its manufacturing facilities worldwide.
While those efforts have helped it earn a solid reputation among business peers, Wall Street analysts and health care professionals, the general public is still relatively unaware of the company. But Mixon believes an aggressive marketing and advertising campaign will help it reach its sales goal of $2 billion by 2005 while making Invacare a household name.
Earlier this year, Invacare, which stands for "Innovation in healthcare," launched a four-pronged strategy aimed at gaining worldwide consumer recognition.
Bring it under one roof
Invacare launched 30 products in 1999 and bought access to more through acquisitions of Suburban Ostomy and Scandinavian Mobility International. In previous years, Invacare usually placed the product name above the company's name on boxes and other packaging to give it more recognition and keep its face in the background.
No longer, says Mixon.
"We want those millions of boxes we send out to consumers' homes to have our name on the top," he says.
Invacare's medallion logo will also be prominently displayed on all its products by the end of the year to give it greater exposure.
Get media savvy
Invacare has always advertised. This year, however, it formed its Marketing Advantage Partnership, or MAP program. Under the MAP program, Invacare will provide home medical equipment providers with high-quality television spots on power wheelchairs, scooters and lift chairs to help generate leads and customer traffic for providers.
Both the television and print advertisements contain Invacare's new tag line, "Yes, you can," which was unveiled earlier this year. It reinforces the company's mission to help those with disabilities lead active lives.
Design a Web of influence
Invacare added a search engine to its Web site to help customers find any of the company's 25,000 home medical equipment provider's locations. It is also engaged in a more targeted effort to let consumers know they can buy products directly from Invacare's Web site or the sites of medical equipment providers.
Whether this initiative is working is hard to gauge due to the complications of claims processing through Medicare, Medicaid and other third party reimbursement. But Mixon is confident it will work.
"We will have the No. 1 e-commerce site in our industry, and it will generate more business for Invacare and our provider partners," he says confidently.
Put a face with the name
For future advertisements and marketing materials, Invacare is looking for a well-known spokesperson whose name and reputation capture the company's image and reputation for trust and quality.
"We can't afford to sign up Tiger Woods for $100 million," Mixon admits. "So we're going to have to keep looking." How to reach: Invacare Corp., (440) 329-6000
Morgan Lewis (firstname.lastname@example.org) is a reporter at SBN.
Selling a single-family home is a lot different than selling a car. A house is unique and sells itself, but you can find the same car at a dozen dealerships -- it's price and service that sell the car.
Steve and Cathy Jackshaw know this. They ran Jackshaw Chevrolet in Cleveland for more than 10 years, following Steve's father, who ran it for 40 years. After selling the business in 1998, they earned their realtor's licenses and joined Realty One's Chesterland office to use their car business savvy to sell homes.
The couple believes the key to car sales -- to any big-ticket sales -- is maintaining relationships with the customer after the pitch. Here are their keys to success.
Some days, it's impossible to return all the messages you receive. But always attempt to get back to a customer with a question in a reasonable amount of time. Although it doesn't guarantee a sale, an ignored customer is unlikely to buy.
"I've been told by people, 'You're the only one who called me back,'" says Cathy Jackshaw. "It amazes me, because it's such a simple thing."
Do unto others
Although you may have sold one customer, if that person is treated well, he or she will likely tell family, friends and neighbors about the experience. That can pay off in future sales.
"If somebody feels you've done a good job for them, they feel very comfortable about recommending you to someone they know," Jackshaw says. "Trust is a big thing. If a car salesman doesn't treat a customer right, he's going to tell twice as many people how bad he was treated."
In car sales, the axiom used to be that if the customer walked out the door and you didn't close him, you weren't going to see him again.
"I don't think that was always true," says Jackshaw. "But in real estate, it's not that way at all. A realtor is not going to sell somebody on a house. It's going to be their decision. It's not like when you walk out of the house and they didn't sign the papers that the deal won't eventually come together."
Keep in touch
It's important to keep the lines of communication open and not forget about the customer once the sale is made. If you're investing your time and energy in a customer, there will be a return on that investment.
"It's funny. Our motto at Jackshaw Chevrolet was, 'After we sell, we serve,'" she says. "It's kind of the same thing. If we sell you a home or sell your home, it's not like you're never going to hear from us again. We keep a relationship." How to reach: Steve and Cathy Jackshaw, Realty One, (440)729-3300
Morgan Lewis Jr. (email@example.com) is a reporter at SBN.
Investors on the West and East coasts have lost millions of dollars the last couple of years on technology companies which had an idea, but didn't know how to use it to actually make money.
Some of these aimless companies were lucky and made hundreds of millions of dollars, but more lost it all, causing the market to dry up. The ripples were felt even in the Midwest.
Investors are a little more wary these days when it comes to start-up technology companies, so it's important to show that you have a solid, proven business plan.
"The first thing we needed to show our investors is how they could make money," says Stephen McHale, CEO of Everstream, an application service provider that allows businesses to deliver targeted rich media content and advertisements over the Internet and wireless devices. "Once we could show them that not only would it not cost them anything, but it could make them money, that really got their attention."
At the Northeast Ohio Software Association's second Seed Capital Initiative, McHale and the CEOs of other rapidly-growing technology start-ups in Cleveland shared advice and war stories about raising capital in the marketplace after the investment feeding frenzy.
Here are a few of things they've learned.
Once the plan is in place, it's important to find investors who know something about your field. If the idea is very high-tech or complex, it's unlikely there will be investors who are experts; however, a knowledgeable investor will add much more value to the company than someone just looking for a dividend.
"There's nothing better than getting an e-mail from an angel (investor) that has information that actually pertains to my business that I can go follow up on," says Ken Applebaum, CEO of Embedded Planet, which provides software and hardware platforms for manufacturers and developers of embedded systems.
The economy is not driven by steel and widgets anymore, it's about ideas and information. For both investors and entrepreneurs, networking is the key to finding out about opportunities to grow a company. Internet chat rooms, list servers and Web sites are also ways to network, so don't forsake them to concentrate solely on traditional face-to-face methods.
"Networking is what this whole technology business is all about," Applebaum says. "You will find other people out there who can add value."
The founders of many of start-ups left behind their steady 8 to 5 jobs with handsome salaries, benefits and corporate perks. To say goodbye to all that and go out on your own requires tremendous passion and a complete devotion to the idea, not just the desire to get rich, says Rebecca Braun, CEO of SupplierInsight, an online qualification and ratings guide of industrial suppliers engaged in digital procurement.
"It is raw passion that pulls you through to the final stretch that gets you funding," Braun says. "I know it happens all the time in all walks of life, but I can't fail to mention this step because I think it's the one thing that absolutely pulled us through to getting funding." How to reach: Everstream, (440) 498-8899 or www.everstream.com; Embedded Planet, (440) 646-0077 or www.embeddedplanet.com; SupplierInsight, (216) 781-1100 or www.supplierinsight.com
Morgan Lewis (firstname.lastname@example.org) is a reporter with SBN.
It's a problem many business owners encounter the first time they try to set up a computer network.
What starts out as a simple task connecting a few PCs to a server turns into one complication after another until setting up a network to improve the business takes over the business.
Lack of time and problems like these have created a $70 billion untapped market providing information technology services to small businesses. TechPlanet founder and CEO Matthew Klein set out to tap into that well in January 1999.
Less than two years later, Klein has claimed more than $20 million in venture capital and spread the Menlo Park, Calif.-based franchise to 23 U.S. cities, with plans to be in all major U.S. cities in the near future.
"Business owners normally are pretty sharp people, but they have to wear a lot of hats," says Harvey Gilchrist, who helms TechPlanet's Cleveland office, which opened in July. "Say you're an attorney. You're smart enough to set up your own network, but it would probably take you two or three days to do it. And if your fee is $150 an hour, how much are you losing by playing network administrator?"
TechPlanet generally works with smaller offices, because once a company has 35 to 50 computers, it usually has its own IT department. Most smaller offices don't want to spend $70,000 year for an employee to administer its network, says Gilchrist.
To avoid wasting time and money and to set up a computer network that protects valuable data, Gilchrist offers three basic tips:
Broaden your horizons
If you're still using a dial-up modem, you are dealing with unnecessary hassles and your business isn't taking advantage of what the Internet can offer. Businesses should be using high-speed DSL or a T-1 line, at the minimum, Gilchrist says.
"I compare dial-up to DSL as I would compare television before there was cable. You had your three network channels and everything kind of came in fuzzy, and then you got cable and you have 150 channels and everything comes in crystal clear."
Watch your back up
Many companies worry about outsiders breaking into their networks, but few are concerned with a much more crippling and common computer disaster -- losing all their records.
"Most people don't back up when they really should," Gilchrist says. "If you have a fire or equipment failure, everything could be lost, when you could have had all your data stored on a little tape."
Sure, the 20 computers in your office need to be networked now, but what about in three years, when you have 40 or 60 computers? That's one of the most important questions to answer when designing your network, Gilchrist says.
"Instead of giving you a solution for right now, we'd rather give you a solution that will adapt to your business growth. We could set somebody up with a server, where if they get two more computers next year and six more the year after that, all we'd have to do at that point is come and add them, create an account for them and they're on." How to reach: TechPlanet, (216) 986-7400 or www.techplanet.com
Morgan Lewis Jr. (email@example.com) is a reporter at SBN.
In 1993, accountant Gary Isakov was a senior manager at Ernst & Young. He serviced gold mine companies, pension funds for multibillion dollar clients and directed board meetings.
Later that year, he received a job offer from a much smaller company, where he would start at almost the junior level and work primarily on smaller accounts for less money. Isakov jumped at the chance. Why? The job was in the United States. He was working in South Africa.
"I felt it made more sense to make a future for myself in the United States rather than South Africa," says Isakov, in the flinty accent of his homeland. "Things are very unstable there."
Today, Isakov is a partner and director of health care services for SS&G Financial Services Co. Since he was hired, SS&G has hired three other accountants from South Africa and tapped into a talented and experienced labor pool which wants to take advantage of the opportunities available at an American firm while escaping the high crime rate and volatile government in their own country.
The firm's unusual recruiting efforts have not gone unnoticed. Isakov returned to South Africa this past summer to interview accountants for several other firms in the United States.
Thanks to a strong economy, dot-com companies and a sharp drop in the number of accounting graduates, SS&G had been scrambling in recent years to find quality prospects.
"Accounting firms are battling to find experienced accountants," Isakov says. "You can find people out of college, but we were specifically looking for people with a minimum of three or five years in public accounting. Sometimes it's difficult even to find people."
Like other companies, SS&G placed ads in local newspapers and trade journals and attended job fairs, but it wasn't attracting the experienced accountants it was looking for. Isakov, whose arrival in 1993 preceded the labor crunch, knew that accountants in his home country go through three years of mandatory training called articles after they receive their accounting degrees.
It was just the experience the firm wanted. And, although tax laws and some accounting principles vary between the countries, three years accounting experience is still much better than none at all.
"The training is phenomenal," Isakov says. "The education level is very high --- it's very focused -- much more so than in America. In South Africa, which follows the British system, from your first year at university, you're doing accounting, economics, business, finance, marketing; it's very business-oriented, very business-driven, and the education level is very good. So the people you get out of school there are good caliber people."
SS&G placed an ad in the Sunday Times, the country's largest newspaper, asking interested candidates to e-mail resumes to SS&G in Cleveland. When the ad was placed, SS&G was recruiting just for itself.
However, word of the trip spread through The Leading Edge Alliance, a consortium of independent accounting firms which SS&G created, and other member firms wanted a piece of the action.Forget the myths
While companies may be eager to recruit overseas after local markets have dried up, they need to be prepared to invest plenty of time and energy in the long, bureaucratic process of obtaining work visas for employees.
"America's not what it used to be," Isakov says. "My American friends still think that you can jump on a boat, pass the Statue of Liberty, land on Ellis Island, a doctor checks you out and that's it. America has become a very difficult country to get into legally. There are a lot of papers, a lot of documents.
"Once you've done it, it's not a problem, but you do have to get professional help to do it."
Not only does it take several months for the paperwork to clear, the U.S. Department of Immigration and Naturalization is only issuing 107,500 work visas from Oct. 1, 2000 to Sept. 30, 2001. Isakov expects the visas, called H-1B visas, to be gone by March.
The visas entitle the employee to work for three years at the same company. It can be renewed for another three years or the employee can earn citizenship. Family and children can come to America with the employee, but if a spouse wants to work, he or she has to obtain a separate visa.
Despite these restrictions and complications, SS&G partner Mark Goldfarb says the effort is worth it.
"Knowing that there's this wonderful work force in South Africa that we've been able to hire, we've decided to go back to South Africa and make it a worthwhile effort," says Goldfarb. "Gary and the other accountants from there we've hired have really worked out well."
Know the terrain
SS&G's ad in the Sunday Times garnered 100 responses from accountants not only in South Africa, but also from Zimbabwe, Namibia and Nigeria. The resumes were paper screened by the firm's human resources staff before Isakov traveled 8,367 miles for 20 in-person interviews.
"Interestingly enough, it wasn't just white, Anglo-Saxon South Africans," says Isakov. "There were African South Africans, there were Indian South Africans. Actually, one of the people I really liked was from Zimbabwe. It was a real broad spectrum of personalities and backgrounds applying for the jobs."
Aside from the $1,200 plane ticket and rental car, Isakov kept costs down for SS&G by staying with friends and family and borrowing office space from a friend. He spent two to three hours talking with each applicant, and usually visited the home and shared a meal with the top candidates. While interested in the move, many candidates were worried about the relocation.
"They had questions and concerns about education, living and work and cost of living in the United States," Isakov says. "They truly are coming in blind. Their only perception of America is what they read in magazines, books or see on television, which obviously is not a true depiction of life."
Candidates also expressed concern about assimilating into America and losing touch with home. Luckily, Isakov had walked that path only seven years ago and could put their worries to rest with the story of one of his early days living in Cleveland.
There was an international rugby match in which South Africa was battling Australia in a heated rivalry. Due to the sport's lack of popularity in the States, no major network or local cable station was carrying the game. So Isakov grabbed a phone book and started calling downtown sports bars until he found one showing the game.
"I dressed up in my rugby jersey and my scarf and I went down not really knowing what to expect," Isakov says. "I bumped into about 40 or 50 South Africans. It was a wonderful way of saying, 'Hi, I'm here,' and they took me under their arm and we became friendly that way."
An offer they can't refuse
Because he was recruiting for numerous firms, Isakov couldn't make job offers to applicants. He did, however, pass on names with strong recommendations. His latest trip yielded about eight recruits, four of whom Isakov expects will accept job offers.
Although SS&G is behind this kind of aggressive recruiting effort, firms need to consider the time factor involved and if the time wouldn't be better spent on domestic recruiting. But, if you're not getting the kind of experience you need for your particular industry, maybe it's time to broaden your human resources horizons.
"This took a significant amount of my time and my HR person," Isakov says. "We probably spent at least 120 hours on this. It didn't help my chargeable hour goals, but obviously this is an investment in the future." How to reach: SS&G Financial Services Co., (330) 668-9696
Morgan Lewis Jr. (firstname.lastname@example.org) is a reporter at SBN.
It was a chilly morning in late 1997 when Jergens Inc. President Jack Schron Jr. pulled up to what is now the site of his company's headquarters at the former Collinwood railroad yard, just off East 152nd Street.
The first thing that caught his eye was the dead dog -- probably one of the many stray animals on the property -- but that was the least of it. There was an enormous pile of bald tires, discarded sinks and refrigerators, and a crumbling powerhouse with teetering smokestacks.
"Hey, this is great, isn't it?" Schron quipped to his colleagues, who looked sick at the thought of this neglected parcel of land as their new home.
But Schron was destined to move the growing clamp and machine tool accessory manufacturing headquarters to the railyard, which closed in 1981. The site was only about two miles from the garage where his father and grandfather co-founded Jergens in 1942.
It was one of the first locations Schron considered after the company ruled out expanding its existing building in Warrensville Heights.
"The hardest sell of my leadership was convincing our management team that this was where our new home was going to be," Schron says. "They said, 'You have to be kidding us.'"
Schron persevered and construction began in May 1998. By September 1999, the doors for the 110,000-square-foot facility were open. Due to the environmental mess, the project required government coordination on every level, with the city and the state each chipping in $1 million to help revitalize the area.
Here's what Schron learned from the process.
Find an expert
When he first considered relocation, Schron looked at the entire Greater Cleveland area. To help focus the search, he hired a real estate agent to work on a fee basis rather than on commission.
"There won't be an incentive for them to sell you something," Schron says. "There is an incentive for them to try and educate you."
Jergens' relocation to the Collinwood railyard wouldn't have been possible without support and cooperation from city, county and state governments. The company used municipal bonds from Cleveland's Port Authority to help fund the project and the environmental clean-up.
Despite the bureaucracy, cities and counties are eager to help business owners clean up and build on their blighted industrial areas.
"This was one of the most interactive organizational challenges that some of these governments had seen in a long time," Schron says. "But that's how the process works, and I think it will work a little faster in the future because of it."
It's worth the time
Pollution surprises, EPA studies and inspections, and government partnerships all increase the timeline on a brownfield project. If a company plans to take on a project like Jergens' Collinwood relocation, there shouldn't be any kind of hurry.
"There are some that tease us that we deserve the patience award," Schron says. "I think, ultimately, if we're going to spend the next 25 to 30 years here, what's a couple months if you get it done right, and environmentally, it's the correct thing to do." How to reach: Jergens Inc., (216) 486-5540
Morgan Lewis Jr. (email@example.com) is a reporter at SBN.