Down in the trenches
Runner-upRHINO ASSEMBLY CORP. Headquarters: Charlotte President Dan Brooks Employees: 19 Founded: 2000 Projected 2011 revenue: $9.5 million Business: Specialty industrial distributor
The world turned upside down in late 2008,” says Dan Brooks, president of Rhino Assembly Corp. “All of a sudden, every manufacturer was saying, ‘They’ve cut my budget. I’m not allowed to spend at all.’” Rhino, which specializes in providing customized tools for auto and aircraft manufacturers, was losing $50,000 to $100,000 a month. To survive, Brooks says, “we knew cutbacks had to be made, but we were not willing to cut employees.” Co-owners Brooks, 46, and Leif Anderson, 41, believed that keeping their sales staff intact was essential to future success. So in early 2009, they called their eight salesmen into their company’s small conference room. “We are in a dire situation right now,” Brooks told them. “We could potentially lose the company. Something has to change.”
And so it did. Brooks, Anderson and the sales team scrambled to find new sources of demand and, in the process, turned little Rhino into an international trader. The company exported $1 million of goods in 2010, up from just $10,000 a year earlier, proving that globalization isn’t just for multinationals. Small businesses, if they’re savvy, can benefit, too. In March 2010, President Barack Obama cited Rhino as a success story for its exports to Brazil, which has Latin America’s biggest economy. But diversifying domestic sales is really what saved the business. Rhino’s niche is finding the precise, sometimes customized, tool to increase a manufacturer’s productivity or safety — an automated lifter, say, that quickly picks up and positions a heavy part so it easily can be bolted down. “Dan and Leif believe that engineers are looking for educated problem solvers and not order takers,” says Robert Arthur, vice president of Michigan Pneumatic Tool Inc., a Rhino supplier.
From 2002 through 2007, Rhino boomed as its main market, the Southeast, grew. BMW, Mercedes-Benz, Caterpillar and automotive-related manufacturers were expanding in the region. “We probably grew 500 or 600% and went from four people to 12,” Brooks says. But the recession shoved that growth into reverse. “The whole world felt like it was crumbling,” says Anderson, the company’s vice president.
Then came that tough talk with the sales team. The owners announced they were cutting expenses and everyone’s pay, including their own. Find new accounts, they said, no matter how small. Tap aerospace and other customers outside of automotive. Stress tools that increase safety — manufacturers always find money for that. At first, the salesmen were stunned. Then one said, “You’re doing the right thing.” Heads started nodding. Smiles broke out. “It was almost like being in a huddle at halftime and a team is down by 30 points, and all of a sudden one of the players says, ‘We can do this,’” Brooks recalls.
“We started getting little orders — $3,000 to $5,000 from new customers. We had a break-even month, and it was, ‘Whoa, hallelujah, it’s working.’” Sales doubled in 2009. Compensation was restored. Under the guidance of George Thomas, an international-trade specialist with the N.C. Department of Commerce, Anderson traveled to the Trade Winds Forum in Sao Paulo, where he met with local tool distributors and top officials from General Motors and Embraer, one of the world’s largest aircraft makers. ”Brazil’s economy is exploding,” Brooks says. Soon, Rhino was sending tools there.
Brooks and Anderson are convinced that the quick turnaround wouldn’t have happened if they’d cut their sales staff. “Our level of service and support never wavered,” Anderson says. “When we came out on the other side, we were rewarded with business.”
— David Bailey