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Indiana's Entrepreneurs of the Year (Entrepreneur of the Year Awards 1991) (Cover Story)

Indiana's Entrepreneurs of the Year

For the third year, Indiana Business Magazine profiles the winners of the Entrepreneur of the Year Awards that are presented to individuals and companies who have created successful and growing business ventures. National sponsors of this competition are Ernst & Young, Inc magazine and Merrill Lynch. Indiana's sponsor is Plainfield-based PSI Energy Inc.; local sponsors for the Kentucky/ Southern Indiana section are Louisville-based Brown, Todd & Heyburn, Business First, and the Entrepreneur Society.


Construction Entrepreneur

You have to stay ahead of your peers if you're going to be the first person under the age of 21 to incorporate an Indiana business following the state's passage of the Age of Majority Act. Craig Hartman did just that, in January 1974.

Hartman is president of Preferred Inc., an industrial and commercial painting and roofing company in Fort Wayne. As a teenager he worked as a painter part-time. After high school, he borrowed $6,000 from his parents and started out as a painting contractor, first doing houses, then commercial buildings such as multifamily housing complexes and strip malls. Soon, he brooke into the industrial market, performing services for such titans of U.S. business as Shell Oil Co. and General Electric Corp.

From the outset, Preferred's annual sales have increased every year but three to a projected $7.8 million in 1991. Preferred's special expertise is repainting and reroofing industrial structures on budget and on time using methodologies that keep work interruptions to a minimum, and providing a start-to-finish service that includes a field analysis, written job specifications and budget as well as the actual work performance. More than half of the Fortune 500 companies are among its clients. Nearly 75 percent of its business is repeat business.

Early on, Hartman recognized his company would not grow if he limited his operations to the Fort Wayne market, so he opened another office in Ohio and got into the roofing business when he bought the assets of a Cleveland roofing company. In 1990, he expanded again with the acquisition of the asbestos-abatement division of Fort Wayne-headquartered Carroll Insulation. "Status quo," says Hartman, "is going backwards," so currently, he is looking to grow the company still further by opening a sheet-metal division and offering other environmental services. "We will look at our customers and let them give us direction," he says.

Hartman thinks he's gotten ahead in this world by "being smart enough to recognize when I'm not smart enough," as he puts it. He's never been afraid to ask questions of his lawyer, his accountant or his banker. "Thinking you're too smart has a way of humbling you," he says.

A motivational tape once advised him to "get out of bed and get to work early." He took it to heart. "I like being at the office making money while the competition is still in bed."


Manufacturing Entrepreneur

In 1977, Gabriel Aguirre reneged on his decision to retire and bought the company where he formerly had worked most of his adult life as a repairman and salesman. Aguirre is the owner of Saniserv, an Indianapolis manufacturer of ice-cream and frozen beverage machines.

The scenario went like this: Saniserv was founded in Indianapolis in 1929, was folded into Burger Chef Systems in the '50s, then sold to General Foods Corp. in the '60s. In 1977, when General Foods opted to get out of manufacturing, Aguirre stepped forward. "They were either going to sell out or shut down the company," he explains. "I felt I had an obligation to the community and our customers."

Since Aguirre acquired the assets of Saniserv, its growth has been phenomenal. When he took over, Saniserv had 18 employees. Four years later, the number doubled, and in another four years, it shot up to 89. Now, more than 200 are on Saniserv's payroll. Sales have increased about 30 percent a year from a mere $700,000 to more than $30 million.

Under Aguirre's leadership, Saniserv has entered the overseas market. In 1986, it entered into a five-year agreement with options to renew with a trade group in the Peoples Republic of China to provide technology and production support for the manufacture of between 3,000 and 5,000 ice-cream machines a year.

The obvious language barrier was a new experience for Aguirre, who is fluent in his native Spanish as well as Portuguese, English and Italian and who served as an interpreter when he was stationed in Heidelberg, Germany, with the U.S. Army. In 1989, the Akron, Ohio, native received the National Minority Entrepreneur of the Year award from President Reagan.

Aquirre doesn't plan to take his company public. "I'm having too much fun now," he says. But does his company have have a future? He believes so. "Ice cream will always be popular."


Manufacturing Entrepreneur

Robert H. Kesler is a different twist to the entrepreneurial story. Here's a guy who was pushing 60, had a rustproofing business that was going down the tubes, was in debt, and still had the resilience to found a company that 10 years later is doing $100 million in annual sales.

Kesler is president and chairman of Explorer Van Co., a Warsaw company that does van conversions. he didn't even have a unique product. Several manufacturers in Northeastern Indiana do van conversions. But he got the jump on the competition by building integrity and customer service into a product line that, he found, often was characterized by slipshod workmanship and here-today, gone-tomorrow machine shops.

It wasn't easy, however. Warsaw bankers turned down his loan requests, and to get working capital he was forced to obtain a $20,000 mortgage on his house. With the help of his school-teacher son, he built a prototype and delivered it to a dealer in St. Louis who sold it on consignment. A year later, Explorer's production was running at about four vans a week, and Kesler was selling every unit he could make, chiefly to the dealer in St. Louis and one in Columbus, Ohio. The business prospered. Explorer hired salesmen and extended its territory.

Soon, however, Kesler saw the handwriting on the wall. There was no place for a medium-size van converter, so he made the decision in 1985 to go big time. He secured financing for a headquarters complex with 200,000 square feet of manufacturing space from then-First National Bank of Elkhart, a debt which he repaid in less than 27 months. In 1987, Kesler applied for and received a bailment pool agreement with GMC Trucks by which it drop-shipped vans to Explorer for conversion and reshipment to franchised GMC dealers. Since then, he has worked out similar agreements with Ford and Chevrolet.

Today, Explorer is the U.S.'s dominant van converter. Bodor, its parent company, also owns three supplier companies as well as a trucking company and a several automobile franchises. Together, they employ more than 600, primarily in the Kosciusko County area. Kesler anticipates that Explorer will continue to grow in plateaus at about 5 percent to 10 percent a year. "We want to be sure we can sell everything we can make," he says.

Kesler, an ex-Marine whose avocations are acrylic painting and golf, doesn't have a magic formula for getting ahead in this world, but he does have a few pithy tips for the budding entrepreneur: "Don't borrow too much, because it gives you a false sense of security. Be sure you can market what you make. And don't ever fall in love with your own product!"




Kentucky/Southern Indiana

When asked how much start-up capital he had to launch his new business venture, Charles Garmon candidly replies, "Practically zero." Garmon is co-founder along with his wife, Phyllis, of Key Communications Service Inc., a technical services firm in New Albany.

When he was laid off his job with Western Union, Garmon turned a negative into a positive. He took his $3,800 of severance pay, bought a van, and started servicing Telex and TWX equipment under $100-a-year maintenance contracts for small businesses in the New Albany area. First-year sales were $7,250. In order to earn "bread money," as Garmon calls it, he moonlighted at a second job as a janitor.

Now, 15 years later, Garmon's service company has expanded into a hardware and software development operation with 20 branch operations, including Indianapolis and South Bend, and 142 employees nationwide, 100-plus in the New Albany area. Key had 1990 sales of $21.2 million and $2.9 million in earnings. Garmon's goal is to increase business by 30 percent a year until he reaches his target of $100 million in annual sales.

Garmon believes finding a market niche accounts for Key's rapid growth. Its product is a highly specialized, custom-made remote delivery system that prints messages instead of imaging them as a fax machine does. Key's customers include credit companies and electric utilities as well as Fortune 500 firms in the health-care and pharmaceutical fields.

Garmon plans to expand by staying with Key's product and broadening its customer base. His business plan calls for opening four to six new field offices each year. His research and development staff is constantly developing new products to help fuel the company's growth. "We are very cautions about getting outside data communications."

His biggest hurdle in building his business, says Garmon, was learning how to sell his product. "That was very scary." So it naturally follows that he would advise anyone looking to start his own business to be sure of his product and sell it with confidence. "Learn to meet people" he says. "You've gotta be like an old bulldog. It won't be easy, but hang in there until it works." And, he offers this final pointer: "Hire experienced people. They'll bring in the money quicker."


Service Entrepreneur

"You've come a long way, baby" is a phrase that applies, both literally and figuratively, to Christel DeHaan. She's come all the way from Nordlingen, Germany, via the nanny, interpreter and secretary's route, to the office of president and CEO of Resort Condominiums International Inc., a vacation-exchange and time-share company in Indianapolis that had $14,000 in revenue its first year and expects to do $193 million in 1991. She did it by applying the survival techniques she learned in her postward childhood.

DeHaan and her second husband, Jon, started RCI in 1974. At first, it was a kitchen-table and shoebox operation that had 24 affiliate resorts. Today, it has more than 2,000 in 72 nations, a number that it expects to bump up by 200 with the penetration of the Asian market. It has, in addition, 1.3 million-plus time-shares, and hopes to build that to 1.5 million by the end of this year. Besides vacation-exchange services, it offers a full-service travel division to its members worldwide and publishes a travel magazine that currently has a circulation of nearly three-quarters of a million.

Today, RCI employs more than 2,000 worldwide, approximately 1,100 in Indianapolis. It operates 17 resort-service offices in the United States and 19 others located in Europe, Latin America and Asia well as licensee operations in Australia, Africa and Japan. Its commitment is to enhance and expand its vacation services and product lines nationally and abroad and to become the world's largest arranger of leisure travel.

DeHaan, a naturalized U.S. citizen and mother of three, offers this comment on entrepreneurship: "In managing and advancing his or her company, a successful entrepreneur must concentrate efforts on two critical elements - steadfast attention to customer needs and a commitment to the well-being of employees."

The numbers would indicate DeHaan knows whereof she speaks.


Emerging Entrepreneur

Jim Sapp, president of Indianapolis-based Indy Lube Service Co. Inc., didn't come up with a new business concept - he took an existing one and fine-tuned it.

In 1984, Sapp came up with the idea of an upscale quick-lube shop in an unlikely place and at an unlikely time - on on a rainy night during a Boy Scout expedition through the Colorado Rockies. His strategy was to build new-from-the-ground-up centers that were a cut above the service station, and to outfit them with such amenities as a wallpapered reception room with courtesy coffee and telephone, television and toys for the kids. Two years later, with $20,000 of his personal savings, he opened his first store in the Castleton area of Marion County.

Today, there are nine company-owned stores and two franchisees in central Indiana. More are on the way. 1990 sales were $2.1 million; according to company projections, sales for 1991 will be in the $3.6 million range. Sapp's game plan is to expand Indy Lube outside of Indiana and to become a truly regional company.

Sapp admits there have been "struggles, ups and downs." For more than three years after the Indy Lube start-up, he kept his old job as a sales representative for a dental-supply company to have money to support his wife and two toddlers. He took no salary or dividends from company earnings but, instead, poured all the profits back into the business. "I didn't start buying boats and Mercedeses," is how he puts it.

His greatest accomplishment, Sapp thinks, is gaining name recognition in a business that's highly competitive. Another is bringing computerization to the quick-lube business. Point-of-purchase systems in Indy Lube stores track sales, inventory and coupon usage, serve as both time clock and cash register, and store customer records and vehicle histories.

Sapp has these words for the would-be entrepreneur: "Don't give up. Keep trying. When people say |no,' look for an alternative." In the end, he says, "it is gratifying."


Master Entrepreneur

Can a company gross $90 million of annual income without turning a gear or running a lathe? Gerald D. Mann's company, Indianapolis-based ATEC, does it. No product is involved.

What ATEC provides are turn-key services in the areas of environmental science, industrial hygiene and materials testing and analysis, among others, to business and industry nationwide. It traces its origins back to 1956 when ATEC President and Owner Mann, fresh out of Purdue University with a master's degree in civil engineering, started a soil and foundation engineering consulting firm that was financed by his employer, Indianapolis-based Mobile Drilling Co.

Scarcely 18 months later, Mobile offered to sell its interest in the firm to Mann for $40,000, half of which he raised from four of his clients who had faith in him and needed his services, he says. He paid off the rest of his indebtednedness over the next four years with paid-in-advance client fees. The company was renamed American Testing and Engineering Corp., ATEC for short, to reflect Mann's ambition to take it national.

And take it national he did. In 35 years, Mann has brought his company from a one-man, four-client operation to an international organization that today employs 1,500 people in 48 offices throughout the United States and in Puerto Rico. Its program for environmental assessment for real-estate transactions and a stabilized hazardous-waste sludge landfill that it constructed from the drawing board up are industry standards.

By diversifying its consulting services, ATEC has expanded every year but two. The firm has turned a profit every year. Its strategic plan is to double in size within the next three years. That's an ambitious goal, Mann admits, and if ATEC even comes close, he'll be happy, he says. He has no plans to take the company public, however. "I'm too much of an entrepreneur to have to answer to Wall Street," he explains.

To be an entrepreneur, Mann says, "you have to be willing to make sacrifices, put in long hours and work hard." And, he adds, you have to be married to someone who's supportive of your efforts.





Retail Entrepreneurs

What happens when three college fraternity brothers hit on the idea of a store that specializes in athletic footwear and find out somebody else has beaten them to it? They take the idea and run with it.

Alan Cohen, John Domont and David Klapper were the original principals of the Finish Line, an "ath-leisure" apparel and accessories chain headquartered in Indianapolis. They got their feet wet in 1976 by purchasing the Indiana franchise rights for the Pittsburgh-based Athlete's Foot stores. The team opened a 700-square foot store in downtown Indianapolis, then opened new stores at the rate of two, maybe three, a year until the state was saturated.

Quickly, this trio realized that if wanted to expand, they had to break the Athlete's Foot constraints, which limited their growth to their franchise territory. Market research told them that the future lay in stores that that could do high volume in fast-moving athletic products, as opposed to sporting-goods stores that dealt in slower-moving, hard goods. They also realized that to achieve this growth, they had to bring other owner/operators abroad. So, in 1981, they persuaded Dave Fagin and Larry Sablosky, both of whom had backgrounds in retail, to join the management team.

In 1986, their Athlete's Foot stores were converted to the Finish Line concept and expansion continued at the rate of 10-plus stores a year. In the current fiscal year, they anticipate opening 18 new stores, bringing the total to more than 100 operating in 14 states. These units average 3,000 square feet, are located in enclosed malls, and often are clustered to gain both a logistical and management advantage. According to Sports Trend Magazine, Finish Line stores lead the competition with average annual per-store sales of $960,000.

What is the formula for entrepreneurial achievement? Says Sablosky, spokesman for the group, "There's no by-the-book way to do any one thing. We tried, made changes, we're not afraid to make mistakes and admit it when we do. This is not a rocket science." He also cited a strong work ethic and, in the Finish Line's case, good retail instincts. And finally, he emphasizes, it takes mutual respect for other members of the team. "There's great chemistry between us."


Lifetime Achievement Award

Recognizing John Burkhart's lifetime of achievement may be premature. The octogenarian still goes to his Indianapolis office every day. After he left the retail world, he went into insurance and then into publishing, so who's to say what new enterprises he has up his sleeve?

But Burkhart certainly has an impressive track record thus far, both as a businessman and as a community servant. He made his initial plunge into the business world at an inauspicious time, 1929, a year after his graduation from DePauw University at age 19, and weeks before the stock-market crash. After his appliance store in his hometown of Tipton folded two years later, he weighed the merits of a salary of opposed to living on a commission and decided that life insurance was the way to go.

He first signed on as an agent in the Indianapolis office of New York Life Insurance Co. and then was a general agent for Lincoln National Life Insurance Co. "until World War II came along and put us out of business," he says of his agency.

It was a unique concept of selling insurance, however, that eventually assured Burkhart's success. Instead of a scattershot approach, he homed in on college seniors. In 1946, with this specific target in mind, he and the late Frank Moore, a close friend since his days at New York Life, founded College Insurance Co. of America in Indianapolis.

College Life was started with a capital investment of $330,000, and when Burkhart stepped down as president, it and its sister company, University Life, each had $1.5 billion of insurance in force. Burkhart also was one of the founders of United Student Aid Funds, a student-loan guarantor that is now headquartered in Fishers, and of the Indianapolis Business Journal.

Burkhart, who's been a kingpin in Republican party politics, currently is involved, among other things, in managing his interests in Indianapolis C.E.O. magazine. He has no opinions on retirement because, he laughs, "I haven't retired yet." He still plays tennis once a week - singles, no less. "The mind is like a muscle," he says. "If it isn't used, it atrophies."

Burkhart - who freely admits there are a lot of things he'd like to do over, but thinks he'd probably "make new mistakes" - believes entrepreneurs are people who don't want to work for someone else and see greater earnings opportunities in being in business for themselves. They're also people who have a belief in their own talents and are willing to take risks. About enterprising spirit, he concludes philosophically, "It's almost genetic."


Supporter of Entrepreneurship

Thomas W. Binford doesn't consider himself an entrepreneur, because he doesn't have the single-mindedness that is characteristic of most entrepreneurial types. "My interest are too varied to concentrate on any one thing," he explains.

Binford is chairman of Binford Associates, a management consulting firm in Indianapolis. He's never started his own business, but he's been involved either as an investor or an adviser in such diverse Indianapolis ventures as Integrated Biotechnology Corp., Indianapolis Raceway Park, Nelson Productions Inc., a video production company, and an alternative newspaper called Nuvo. "It's hard to remember are as varied as his business experience. He was president of a family business in Indianapolis, D-A Lubricant Co. Inc., from 1954 until it was sold to Premier Industrial Corp. of Cleveland in 1972. Then followed a succession of executive posts, including chairman and CEO of Indianapolis-based Indiana National Corp. and the acting presidency of DePauw University in Greencastle. "All of it was fun," he says, "and all of it was hard work."

On the side, Binford's been chief steward of the Indianapolis 500-Mile Race since 1974, president of the Indiana Pacers and president of the United States Automobile Club. He's also served as chairman of a number of civic groups including the Indianapolis Chamber of Commerce, the Indianapolis Economic Development Corp. and the Greater Indianapolis Progress Committee as well as several mental health-and civil right-related organizations. In 1989, he took his turn as chairman of the United Way of Central Indiana.

Currently, Binford is chairman of two for-profit subsidiaries of Methodist Hospital of Indiana, Asbury Management & Financial Corp. and Methodist Health Care Centers, and is president and CEO of the not-for-profit Community Leaders Allied for Superior Schools, a post to which he is committed for the next two years. After that, what? "I really don't know," he says quite honestly.

From all this experience Binford has observed that persistence is one of the marks of a go-getter. To that he adds, "A vision of where he's going and a desire to be independent. Intelligence helps, but it is not a major factor." To anyone who has the desire to go into business for himself, he offers: "You'd better know the nuts and bolts."

PHOTO: Thomas Binford, investor and adviser to many, spends his Mays as chief steward of the Indianapolis 500.
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Author:Hughes, Ann
Publication:Indiana Business Magazine
Article Type:Cover Story
Date:Sep 1, 1991
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