That was five years ago. Starting out with a mere $6,000 of his own money and another $22,000 borrowed from his family, Simon quickly earned what he calls "a PhD in negative cash flow." Happily, he passed the course with honors, repaying his debts in only five months and turning a profit his first year and each one since. Now, he says, the company's margins are roughly twice the industry norm of 10%.
Simon originally concentrated on financial printing -- prospectuses, 10-Ks, and the like -- in which quick turnaround time is critical. Since then he has expanded to include virtually every type of printing order. Capable of handling print jobs 24 hours a day, seven days a week, Simon's company places work with printers throughout the country, although principally in south Florida, guaranteeing customers quick turnaround time.
He has also developed an innovative system for in-house typesetting -- innovative because it isn't really in-house at all. The company employs typesetters who work at home, and then encourages them to develop their own typesetting businesses in their spare time. Miami Printing and Publishing supplies them with the equipment -- a system that Simon says is "very cost effective."
All told, Miami Printing and Publishing may be one of the fastest-growing companies in a fast-growing industry. The secret, claims Simon, is that his company isn't afraid to tackle the tough ones."When we go after new business," he says, "we ask the customer for whatever job it was that gave them the biggest headache last year."
TRUCKING Start-up fever, anemic recovery
Deregulation," Harry Brooks says with a sigh, "was like the old joke about watching your mother-in-law drive off a cliff in your new Cadillac. You didn't know whether to be happy or sad."
The trucking industry was largely deregulated by the Motor Carrier Act of 1980. But Brooks, founder and chairman of Miami's Brooks International Inc. (#436), remains ambivalent about his new economic environment even today. Although his company's sales mushroomed from $1.5 million in 1979 to $6.3 million last year, he sees so much flux in trucking that he still worries about "the guy around the corner who up and decides to go into the business."
Since deregulation, the number of trucking companies in the country has in fact doubled, to more than 30,000. But the opportunity suggested by this proliferation of start-ups is only half the story. Many of the new companies were moribund almost from the beginning, overleveraging themselves to buy trucks and often facing murderous rate wars. The industry's overall business, moreover, declined for three years running from its peak in 1979. Since then, it has exhibited a recovery that even the Commerce Department describes as "anemic."
With trends like these, truckers scarcely need enemies. Even so, highway-user taxes have been on the rise, and state and local governments have been slow to make road improvements for the longer and wider trucks the industry says it needs.
These grim financial realities have shaped an industry that remains top-heavy despite the influx of newcomers. Fewer than 10% of trucking companies gross upwards of $1 million a year, and much of what growth there is in the business has been limited to a few large, well-capitalized carriers. The industry's continuing difficulties, says Lana Batts, vice-president of policy for the American Trucking Associations, are likely to drive 20% of its companies out of business within the next 18 months.
Ironically, even going out of business can be a tough trick for some. Just months after it was deregulated, the trucking industry was hit with new restrictions governing pension plans in unionized shops (see INC., October, page 100), which account for between a third and a half of the industry. Now, any company that goes out of business theoretically has to pay off all future liabilities in its pension program. In fact, says Batts, there isn't a trucking company in the country that could do that. When Johnson Motor Lines of Charlotte, N.C., shut down in 1980, for example, it had a net worth of $6.5 million -- and got a bill for $20 million to cover employee pensions. Johnson's trustees are still trying to figure out how to pay off the debt. Deregulation, Batts observes, opened up entry to the industry while pension guidelines closed off some of the exits.
Despite his worries about the competition, Harry Brooks believes he can avoid becoming a casualty. A 30-year veteran of the business, he moved from Philadelphia to Miami in 1972 and founded his company in the same year. His strategy was to start small and remain highly specialized. Beginning with local deliveries in the south Florida area, he gradually added longer hauls between distribution centers throughout the Southeast.
Today, independent owner-operated trucks under contract to Books carry goods for such companies as Avon, Eastman Kodak, and Revlon. The owner-operators haul to terminals, where the company breaks down shipments and reloads them for delivery to product representatives or stores. What Brooks calls the "magic" of the system has been his ability to maintain high volumes within discrete market segments. "Basically," he says, "we do the same thing Federal Express does, except that we do it all on the ground."
All the truckers on this year's INC. 500 run cost-conscious, nonunion shops, but they aren't all following similar strategies. Jerry Waugh, head of aptly named Rising Fast Trucking Co. (#391) in Batesville, Ark., has taken pretty much the opposite tack from Brooks, going national with company-owned trucks. Using only his own drivers and equipment, he says, gives the company tighter control over its operations and an edge on the competition, which he describes in a sharp Arkansas twang as "all 2 million trucks out there." Waugh now runs 90 trucks to 48 states, carrying perishables and general commodities.
A former house mover and real estate man, Waugh started the company in 1979 with $100,000 and a conviction that incipient deregulation afforded opportunity. "We figured we'd be able to give the big companies some headaches," he says. Although he closed out 1983 with a not-uncommon headache of his own -- new equipment purchases put the company in red ink at year end -- Rising Fast hit $6.2 million in sales for the past 12 months and is expected to gross more than $10 million this year.
