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Small Business | BUSINESS MAKE-OVER: Southern California
Companies Learning How to Succeed

Handled With Care

Glass Firm Needs to Break From Its Cautious Style in Order to Grow

July 01, 1998|CYNDIA ZWAHLEN | SPECIAL TO THE TIMES

The struggle to survive the dark days of the California recession is etched in the corporate memory of Glaspro Inc., which follows a cautious management style, still pinching pennies and fearing debt.

It took almost a decade for sales at the family-owned glass fabricator to reach $4.2 million. The company now hopes to double that volume over a much shorter period, fueled by two new products with high profit margins and by a recent tripling of its manufacturing capacity.

"We're more into wealth creation than we are making a living," said S. Joseph Green, who runs the once-floundering Santa Fe Springs company with his brother-in-law. "We are doing pretty well right now, but we want to take it to the next level."

Glaspro's custom work is already used by high profile companies. It makes the curved glass installed at the Getty Museum and in Barneys New York showroom windows; its solar glass, which is designed to filter the sun's heat and light, has replaced traditional glass at the Hong Kong airport and the Tampa Bay Aquarium; and its specialty laminates are used in Disneyland's Toontown attraction.

Still, after almost a decade, "It's amazing how many people have no idea who we are," Green said.

It's a fate common to many small manufacturing companies, which typically have more technical know-how than marketing experience, according to consultant and venture capitalist Peter Cowen, of Peter Cowen & Associates in Westwood. Glaspro's manufacturing expertise generates a certain level of sales, he said, but to raise its profile and revenue, the company will have to become more marketing savvy.

"The company is sales oriented, but not marketing oriented," Cowen said. After visiting Glaspro's five-acre site, the consultant said he was impressed with the manufacturing expertise displayed by Green, co-executive John Griffin and the firm's 65 employees. Cowen saw potential in the solar glass, to which Glaspro recently acquired sales rights, and envisioned it as a key player in a future line of high-end custom glass.

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He recommended the company conduct a formal market study, hire a marketing consultant to temporarily jump-start the effort and eventually bring a full-time marketing director on board. Green, he said, should also invest time in building his own marketing skills so he can make smart decisions about whom to hire.

As vice president and director of sales, Green acknowledged marketing is a weak area at the company. But his idea of marketing and the amount of money it should cost differed from Cowen's.

"It was laughable. There's not a chance I'd spend that much," Green said.

Any spending suggestion would be subject to intense scrutiny at the company, specifically by his four conservative, non-managerial co-owners on the board of directors, he said.

"We've bootstrapped pretty much and that never leaves you--that mentality--no matter how successful you are," said Green, who helped buy the company the year before the California economy peaked in 1989. They couldn't have picked a worse time, he said, and the memory of the tough times linger. Even today, top managers don't have company cars and company credit card limits "are just pathetically small," Green acknowledged. Despite solid profits and growing sales, "We are very, very tight," he said.

And that doesn't just apply to limits on the lunch tab. The company has quite a bit of working capital available in a line of credit, but its management dreads tapping that credit.

The conservative approach seems to work for the company, Green said, adding, "It kind of limits how badly you can get hurt."

It also can limit how fast a company can grow.

"The real growth will come with investment in certain areas that expand what they do," said Cowen. He urged the company to think bigger, starting with the board of directors.

"They should expand their board to have even more outsiders who will push them," he said. "If they really want to grow, they want to have people around them who are more talented and experienced in the areas they want to grow in . . . to challenge where they are going."

A good choice might be the publisher of an architectural magazine or the head of a major trade organization, he said. Board members would act as advisors as the company grows.

Money is another area where the company could benefit from thinking big, he said. Glaspro's bank line, for example, is small compared with what they could get.

"Banks would be all over this company to lend money," Cowen said. "They should think a little bigger."

Cowen suggested the company use this working capital to create a marketing infrastructure and a plan for the new products.

"I believe they will be careful with it, but I would encourage them to invest more in this opportunity," he said.

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