Safely Ahead of the Game
In just a year, safety and industrial supplies cataloger Northern Safety has acquired a competitor, added an outside sales force, nearly doubled its staff and opened the doors of a new distribution center. In the process, the company has increased its annual sales by more than 70 percent.
Sal Longo, president of the Frankfort, N.Y.-based business-to-business (B-to-B) catalog, says this growth is the result of aggressive prospecting, strategic partnerships and empowering employees to get the job done on their own terms.
Not that growth is new to Northern Safety. In its nearly 23 years in business, the cataloger never has had a negative growth year; in the past 10 years, sales have grown by 20 percent annually, on average.
But to get to the point where he could grow Northern Safety his way, Longo had to gain control of the entire company. Following a management deadlock with his co-founder, Longo and the company went to court in 2004 to dissolve the 50-50 partnership. Northern Safety went to auction and Longo acquired a 100 percent stake in the company using capital raised through senior lending, mezzanine lending and a small piece of equity, he says.
Longo reflects that raising capital for the buyout was challenging, especially doing so in a way that wouldn’t over-leverage the business. Ultimately, however, the buyout positioned Northern Safety to grow at a much greater pace than it previously had.
Aftermath of a Buyout
Immediately following the re-acquisition of the company, Longo made changes to Northern Safety’s management structure.
He eliminated the hierarchical management system that had been in place. He then established a self-directed paradigm, which allows employees the freedom to make decisions that affect the company — and their jobs.
While the new structure still requires employees to report back to managers, Longo favors this management style because it allows employees to get things done quickly, without being hampered by an overseer.