The new technology could be a catalyst, but first he'd need a new attitude. He'd have to build a business rather than just build cabinets -- get off the shop floor and into the office. From there he'd bootstrap, "get out of the local market, develop a product line and a sales organization, then build up the company's productive capacity." The initial challenge would be in transforming the old family business into a new growth business. And once he built the company to $20 million in sales, he would take it public, or sell for a fat multiple.
It all sounded great. But how do you start when you can't get capital? Back when Gary was looking for the company's first loan of $68,000 to buy out his father's old partner, the banker simply laughed at his application. "He looked at the statements and said, 'You don't have enough capital assets for us to lend you anything," Gary remembers. There were only a few hand tools and a small shop at the time, and there hadn't been a profit in history -- by design. "If you looked at the books, the company had never made a penny. The attitude was you never show a profit when you file your tax -- you juggle your inventory."
To finance his expansion, Gary borrowed money from family members, and spent two years working his way out of the hole. After a long day making cabinets, he'd pile the kids in the back of the van and sell cabinets by night, driving from contractor to contractor. He was looking for small-time apartment builders, potential repeat customers that could give him a regular sales base, offering them custom-made countertops at budget prices. Everything except his $125-a-week salary went back into new equipment. When, after three years, he went back to the banks for the cash to expand beyond the Cleveland market, he finally had capital assets and a sales base to show them.
"That's when the trouble started," he remembers. "I had told Dad what I wanted to do, and he had said OK. But we kept butting heads. We were in debt up to our eye-brows, and Dad wasn't used to it. He was always talking about how much he was looking forward to going to Florida someday, and I was talking about how much I wanted to go flat out, borrow another $100,000, and roll the dice. My plan was alien to him. He had run a local company; he only wanted to make a living and pass the business on to his sons."
Gary and his wife, Claudia, had different ambitions than Gary's father. They talked of retiring when he was 50 in order to travel: six months on the golf courses of San Diego for him, followed by six months in the museums of Paris for her. And why would he want to saddle his son, Frank, with the burden of a family business? "If everything goes according to plan, I can say, 'Here's a million, go do what you want with it."
"My father just didn't feel he could be a part of that," Gary says. "He agonized. I agonized. Finally, after a heated discussion, I said, 'Look, I'm not happy. I'm not going where I want to go. Either you have to leave the business, or I do."
Dad left, agreeing to take double the book value of the company, to be paid out over the next seven years. But now the son found himself back in the hole. Alline had lost its best cabinetmaker, "and we were paying him almost as much as he had made when he was here." So Gary started working an extra half-shift each day, closing the shop at four o'clock, then making counter-tops by himself until eight.
Sales was the key, but Alline could hardly afford a salesman at this point. So Gary searched the pages of trade publications for sales representatives who worked for the big companies, and who might want to add Alline's new European style to the more traditional lines that they sold. All the while, he took pains to keep the size of his operation a secret. If a rep or a customer was flying into Cleveland, he'd take him to see some apartments where the cabinets were installed, then apologize that the plant was closed for an "ethnic holiday."
Today, Gary is proud to give tours around a plant he boasts is one of the most automated in the country. He is selling three different product lines throughout the eastern half of the country, and can see the day when sales approach the magic $20-million mark. He long ago hired an attorney and an accountant, and developed a board of advisers. He now plays golf with his customers and his suppliers, and is looking to join a country club. Additions and acquisitions are in the works, and he consults not just with bankers, but with venture capitalists as well. The company's new production manager was lured from the cabinet division of Tappan for an option on 5% of the company stock and "more money than my father ever made in his life."
"My father still calls," Gary admits, "and we still have our differences, mostly about personnel. He was old school. He took an adversarial position with people: 'Everybody who isn't part of my family is out to screw me.' But the fact of it is he never ran this business. The business ran him."
LIVING WITH RISK
Seymour Siegel, 57, and his son Jeff, 35, agree that their 10-year disagreement was probably inevitable. When Seymour was growing up, people were saving tinfoil, and apples were for sale on the street corner, two for a penny. When Jeff grew up, people were saving the whales, and Apple was on its way to the Fortune 500. As a kid, Seymour always wanted to be a plumber. Jeff grew up wanting to be a rock star.
"I still have the ability to think poor," explains Seymour, the president of Blue Ridge Farms Inc., a prepared-deli-salad company in Brooklyn. "I was raised during the Depression, and I went to work when I was 10, for $1.75 a week, to help feed the family." Today, at 283 pounds, dressed for work in a rumpled sports shirt and sweat pants, Seymour no longer looks from hunger, as his mother might have said. His name is spelled out in diamonds around his wrist.
In contrast, son Jeff, 145 pounds, shows up at work in a perfectly tailored suit, crisp shirt, and silk tie. "My generation grew up believing that we could do anything we wanted to do," explains Blue Ridge's senior vice-president in charge of sales, and heir apparent. "That's the mentality we brought into the business."
