By Jenny Callison
When entrepreneurs sell their businesses, they usually clear out, leaving the new owner to make changes at will. But sometimes, the former owner is one of the company's best assets and can anchor a successful new team.
Andy Gray, president of Reliable Truck Equipment Co. in Erlanger, checks newly applied graphics on the side of a truck in the company's building last week.|
(Gary Landers photo)
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That has been the case at Reliable Truck Equipment Co. in Erlanger. When Andy Gray bought the company in October, owner George Sandmann was definitely part of the deal, as was his son Ted. The two, along with Ralph Puterbaugh, were Reliable's outside sales force and have been key to putting the company on the road to financial stability.
Achieving stability was the reason George Sandmann decided to sell. A series of unfortunate circumstances during the late 1990s caused a steady cash outflow and distracted the owner from his sales and managerial focus. In order to save the company, Sandmann first sold his building and then his company. Gray's purchase has allowed Reliable to continue operations in the same location, now leased.
"The company was sort of chasing its tail, living from check to check," Gray said. "There was a lot of stress. What I brought to the company was energy; a new product line, Permatech, that would allow us different business opportunities, and my operations background. I complemented George's sales background."
While Sandmann misses some aspects of business management, he has focused on the positive: his proven track record in sales.
"It's a strong suit of mine because I know it so well," he said. "The sale has taken a lot of daily aggravations off my mind. Andy's got that entrepreneurial fire like I did."
In 1980, Sandmann and four other former employees of Kinnaird Body Works launched Reliable Truck Equipment Co. to service the truck needs of the beer and soft drink industry. After achieving significant growth, the company bought Kinnaird's abandoned plant in Erlanger and expanded into distribution of new truck bodies and the sales and service of van, platform, dump and utility truck bodies.
Body enhancement for trucks
From small parts such as mirrors to whole truck bodies, Reliable has been outfitting specialized vehicles since the company was founded almost 23 years ago. Building on his knowledge of side-loading beverage trucks manufactured by Kinnaird Body Works in Erlanger, George Sandmann's company focused on refurbishing and repainting older trucks and trailers for the beer, soft drink and bottled-water industry.
Beverage trucks in Reliable's shop can be sandblasted, reinforced, straightened out and spray-painted. New decals are hand-applied.
To the core function of refurbishing was added sales of van, pickup truck and towing/lifting equipment, as well as truck parts and accessories. And, because Reliable had the equipment, it began doing metal fabricating and welding.
Since he bought the company in October, Andy Gray has expanded into Permatech industrial coatings, Blizzard snow plows, B&W Hitches and Jobox high-security truck boxes.
The company is at 32 Kenton Lands Road. Information: (859) 331-8800. >
In the early 1990s, one shareholder retired and another - the operations manager - died unexpectedly. His widow sued the company, and although Reliable eventually won the case, valuable capital was used to pay the legal costs of the three-year process. The company also suffered lowered productivity, as Sandmann turned his energies to the suit.
Approached by a potential buyer for Reliable, Sandmann embarked on the due diligence process required by the buyer's bank. The Environmental Protection Agency found a ruptured waste line on the property that carried a $100,000 price tag for cleanup. When the sale fell through, so did the prospective buyer's offer to pay most of that cost. The company was stuck with the entire tab plus the sale-related legal fees.
Then, in January 2000, Reliable had to scrap and replace its noncompliant computer system. Later that year, the company began to feel the economic slowdown. The aftermath of the Sept. 11 terrorist attacks didn't help.
"I was pulling 12-hour days, working all day Saturdays and some Sundays," the former owner said. "The Erpenbeck thing had soured local banks on any but the most spotless loan applications. Filing for Chapter 7 would have been a disaster; I might have pulled a Chapter 11, but I didn't want to." (The Erpenbeck Co., a home builder, went out of business last year after its founder became the focus of a bank fraud investigation.)
Instead, Sandmann listed his business with a broker, who connected with Gray. With a strong aptitude for anything mechanical and a background in operations management with several heavy-equipment companies, Gray was looking for a business he and his wife, Shari, could run.
"I asked myself, what does this company need?" Gray said. "Operations - someone to make it hum - that's my forte. Sales, let George do what he does best. New lines. He already had great lines, he just needed a few more. It wasn't like this was a company that couldn't go places; it just needed a couple of key people."
Since buying Reliable, Gray has added Permatech spray-on truck bed liners and other truck accessories. He has brought in his mechanically minded brother David, who recently installed a cost-saving telephone system for the company. Purchasing is now the purview of Mark Borchers, a colleague from Gray's tenure at F&M Mafco. And Reliable now employs part-time two marketing majors from Northern Kentucky University who are helping Gray brand and promote the company.
"They've worked on logo design and a new advertising strategy called fluid media," Gray said. "It's a sales presentation on a CD business card. It's one of those things that gets me really excited."
Said NKU senior Nate Wolff: "We also developed a one-page brochure; we had nothing before. And we're placing ads in the Yellow Pages in our four areas of emphasis.
"The whole goal is to spread our name out. We're the only truck equipment dealer in Northern Kentucky. We want to tell people we're going to provide the best possible customer service."
Gray has also brought in new technology to expedite invoicing and inventory control. Internet capabilities have allowed Reliable employees to search the Web for new products and good deals.
Are the new strategies working?
The new owner said increased inventory, a renewed emphasis on outside sales and a balanced operation have boosted sales and brought in new customers.
"Me being here is like being at home," Gray said. "I've lived in Northern Kentucky all my life. A lot of people I know are now doing business with Reliable. Word of mouth is bringing them in."
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