Value Added: Loving What You Sell
Here's Tom Heath's latest column on Washington's entrepreneurial set:
Housing and financial services may be wheezing, but business is strong at Avitecture Inc., which installs and services audio-visual equipment for big names like Lockheed Martin, the National Gallery of Art, George Mason University and top secret government agencies.
Avitecture's revenue for the first seven months of 2008 is up 50 percent over last year, according to president Sid Lissner.
"We're on line for $27 to $30 million in revenues this year," said Lissner, a soft spoken 64-year-old and a born salesman. "It blew me away."
For one thing, 2007 was slow. Private equity firms were doing billions in buyouts and the economy looked golden, but Lissner's 90-employee company in Sterling, Va., was seeing a slowdown in demand a year ago.
"The first six months of 2007 were definitely soft," he said. "I think by the time the media reports on what is happening in the economy, I have already experienced it. I live it day to day."
He also said his sales force is working harder. They are selling more overseas. And quite simply, technology is changing so fast that companies need to continuously update their operations.
Lissner owns 90 percent of his company and the employees own the rest. He won't say how much net profit Avitecture will earn this year. Only that the company earns "a very comfortable profit."
I estimate that with a 10 percent profit margin and no debt, Avitecture will earn a net profit of around $3 million this year, all of which gets rolled back into the company. More trucks. Bigger sales staff. The company may be worth somewhere north of $15 million, or about five times net earnings.
"Maybe the employees will want to buy me out some day," he said, sitting in his office, clad in a polo shirt with the company logo on it. I wasn't there. I asked him to describe what he was wearing and his surroundings. A classical music station played the Rustic Wedding Symphony in E Flat by Carl Goldmark, Lissner told me.
Avitecture is one of those companies that business school professors like to call an NLO for "Nice Living for the Owner."
Lissner, who grew up near Chicago, lives in Leesburg. He came to Washington working on Lady Bird Johnson's roadside beautification committee. After bouncing around a bit, he put up $2,000 of his savings and started a production slide show company on two floors above Tippy's Taco House at 2605 Connecticut Ave.
"I thought what the hell, I like photography. Let's see if I can make a living at it."
After three or four years, he was broke and the company was going nowhere. He was about to head back to Chicago when one of the manufacturers he was buying equipment from hired Lissner as a salesman.
"They asked me if I would like to help them in sales and marketing and I did. The company sales quadrupled in a year and a half. I was good at it."
Lissner discovered there was a much better business in selling equipment than in creating slide shows for clients.
"I was in Junior Achievement in high school and it took me 20 years to realize I enjoyed selling and I had some modicum of success at it."
What makes him a good salesman?
"I sell the way I want to be sold. I don't like hard sells. I want clarity."
Lissner then said something that reminded me of other entrepreneurs I have written about, like Mark Ordan, a founder of Fresh Fields and now chief executive of Sunrise Senior Living. Ordan told me he started in business as an electronics salesman because he loved the subject. He loves the food business too, which is why he got into Fresh Fields.
Same with Lissner. He loves the audio-visual business.
"I had some aptitude for what I was selling. I was comfortable with what I was selling."
He returned to Washington to revive his moribund slide show company. Business took off.
"We concentrated more on selling equipment and less on producing slide shows. We sold equipment to companies, universities, government. We sold it to them and showed them how to do it."
What is the key to success in selling?
"Offering the client appropriate choices and advice. I have told people who wanted to buy an expensive product that they would be happier if they bought something less expensive. As a result, people come back to my company. I have had steady clients over the years."
Avitecture serves only commercial clients and operates globally. About half the revenue comes from the U.S. government and the rest from corporations, universities, associations and not-for-profits.
"I like my job. I work a full business day. My wife and I like to travel. I have been to every state but Alaska."
He hopes to visit every national park before he dies.
Lissner takes a salary and said "I make a good living." He and his wife drive Subarus. I estimated his net worth at several million dollars and he didn't dispute that.
An Avitecture salesman can make more than $200,000 in a good year. Avitecture awards bonuses, pays employees health care and is sound, debt free and growing.
Needless to say, there is low turnover. There are free Coke and free Pepsi machines for the employees.
Lissner said he took all of his money out of the stock market last December and put it into certificates of deposit and money market funds. He fired his financial advisor.
"I'm a pretty conservative investor," he said. "The whole point of business is to make money minimizing risk. If I wanted risk, I would go to Atlantic City or Las Vegas."
Instead, he visits national parks, with the confidence of someone who enjoys a fat bank account.
As for the recession, Lissner said many of his contracts are multi-year so he has a little insulation from the ups and downs of the economy. But he isn't gloating.
"I realize things are good right now, but business could fall off a cliff next year," he said.
August 19, 2008; 5:00 PM ET
Previous: Gerstner Steps Down As Carlyle's Chairman | Next: Early Briefing: Circuit City Still Seeking A Buyer
Please email us to report offensive comments.
Posted by: Amused and Amazed | August 19, 2008 5:41 PM
Posted by: Liz | August 19, 2008 6:26 PM
Posted by: Suzanne | August 19, 2008 6:28 PM
Posted by: SB | August 19, 2008 7:05 PM
Posted by: BOB | August 19, 2008 9:07 PM
Posted by: MC | August 20, 2008 10:43 AM
Posted by: Magsdad | August 20, 2008 2:14 PM
Posted by: tom heath | August 20, 2008 3:20 PM
Posted by: Cooper | August 22, 2008 8:11 AM
Posted by: tom heath | August 25, 2008 12:37 PM
The comments to this entry are closed.