COMPANY:Spartan Armor Systems
2018 INC. 5000 RANK: 1201
HEADQUARTERS: Tucson, AZ
YEAR FOUNDED: 2012
2017 REVENUE: $5.4 million
In 2012, when Jeremy Tepper founded Spartan Armor Systems, it was a one-man-in-a-garage side gig--mainly selling steel-plated body armor to survivalists on eBay. The border patrol program manager by day discovered a novel way to stop bullets from fragmenting upon impact with his steel plates, which are less costly than other body armor materials. He'd spray the plates with Rhino Lining, the same coating used to line flat-bed trucks. In 2015, his day job won out to his side gig. Tepper turned to Todd Meeks and Kevin Strnatka, who acquired the company in 2015. Here's how Meeks, now the CEO, formalized the business and guided it to No. 1201 on this year's Inc. 5000. --as told to Cameron Albert-Deitch
Jeremy sold the armor part-time out of his garage; he was a border patrol program manager by day. He used an old plasma table to cut the plates, and as the business started growing, it overwhelmed him.
He'd do his border patrol job from 6 a.m. to 2 p.m., run around from 2-6 p.m. gathering up materials to fulfill orders, and make the plates from 6 p.m. until 12, 1, 2, whatever it took. He'd take those orders to the post office the following morning.
At the time, I was a business broker. I'd find buyers for people who wanted to sell their businesses. My former college roommate, Kevin Strnatka, owned one of the local Rhino Linings dealers here in Arizona. He came to me and said, "I've got this guy, and I'm spraying all these plates."
"Plates?" I asked. "What are you doing?"
It would be a tough business to sell. The books were a nightmare--they were a pile of invoices and receipts in the side panel of Jeremy's truck. Kevin knew how many plates he'd sprayed, so we were able to back into a number that Jeremy was doing. That's when I realized we were onto something. A thousand plates a month meant $1.2 million in revenue in 2014.
I saw the opportunity pretty instantly.
Kevin and I bought the company together in September 2015. We moved Jeremy's equipment into Kevin's office, and then into a 10,000-square-foot warehouse space. I bought Kevin out this past June.
Our first step was improving the customer service, which isn't our industry's strength. To this date, if you call up competitors, they might not answer or return your calls. Then, we updated the website. Jeremy initially sold his product on eBay, and had a very archaic Wordpress website. We hired people and put systems in place to take care of orders, take phone calls, do everything to make this a real business.
We've put a lot of money back into the business over the past three years. If you put money back into the business, grow the brand, and create processes to offer the highest quality product you can, it should continue to grow.
The core customers were originally survivalists and preppers. My vision was to focus more toward law enforcement, and we've done that. Half of our sales now come directly from law enforcement. We're fulfilling a niche: smaller agencies, 25 to 50 officers or less. It's a market that the larger body armor companies are ignoring.
I've never met so many law enforcement first responders than I have over the past three years. They're human: When they come in here, they're very polite, very friendly, very appreciative of everything that we're doing. So when there's a shooting, it hits closer to home now. It's painful.
We saw a large increase in sales after the Pulse shooting in Orlando, the San Bernardino terrorist shooting, and the Las Vegas shooting. I think as time has gone on, our customers have become numb to it. Now, when those shootings happen, there's not as big a spike as there used to be.
We've also been impacted by the Trump administration's steel tariffs, even though our steel is made in Pennsylvania and Oregon. It seems like a lot of the steel companies knew that if other countries had to pay this 25 percent tariff, they could increase our prices by 25 percent. And they did--overnight.
We've had to increase our prices on ballistic steel products by 10 percent this year. I don't see them reducing the pricing now. This is just the way it's going to be.
Correction: An earlier version of this article misstated the Spartan Armor Systems founder's name, role within the border patrol, and plate-cutting tool.