Start-up company, Blue Coral Systems, allies with Blue Coral Inc. to gain clout.
We admit it was the plaque [received by Inc. saying, "Blue Coral Systems will be named one of the Inc. 500 companies for 1991"] that caught our eye, but it was the business that kept our attention. Blue Coral Systems is a start-up that peddles car-wash chemicals in an unusual strategic alliance with a much larger company, Blue Coral Inc. In most such arrangements, the larger company hopes to gain access to innovative products, and the small business is looking for marketing power. In this one, the start-up's strength is in sales, and it's the bigger company, a low-profile manufacturer of automotive-care and household products, that is seeking market clout.
To provide that clout, Tucson-based Blue Coral Systems, the start-up, employs a direct sales force as well as distributors -- an unusual, costly strategy in its industry. But there's a payoff. According to Ron Peterson, the start-up's CEO, his people have already convinced more than 1,500 car washes to promote Blue Coral products and put up its signage. Multiply that by 6,000 cars per month passing through each wash, "and you get the name Blue Coral murmured 9 million times a month." Agrees Sheldon Adelman, CEO of the larger Blue Coral Inc., "We're in it for what we can get in advertising.'
Peterson, meanwhile, is in it to grow as fast as possible -- and it doesn't hurt to use an established name. In five years, he expects to exceed $35 million in sales, chalk up $2 million in profit, and, of course, make the INC. 500 list. That sounds mighty ambitious, but -- with sales that quadrupled last year -- he's off to a good start. "Whatever they're doing, it seems to be working," observes Ralph Monti, editor of Auto Laundry News. Still, there's one problem with this plan: because Peterson has sold 50% of his start-up to Blue Coral Inc., his company would not pass the independent-ownership requirements of the INC. 500. Sorry, Ron, but we still like the plaque.