Monday, August 11, 2003
Displaced executives Dave Forell and Mike Gallagher wanted to stay in Memphis, run a business the way they wanted and avoid adding to a collective number of moves already in the teens.
Ministers Walter and Alice Smith wanted to do their part for economic development in their community while ministering to others.
And Vincent Johnson missed a service he'd grown to appreciate before moving from one city to another.
Three different motivations but one similar decision drove these people to take the plunge from employee to independent business owner.
That is no small feat. It's an even bigger leap when it's done during a recession or a sharp downturn in your business segment.
But when people decide to become entrepreneurs, often the state of the economy isn't the biggest factor influencing their decision.
"For people who start businesses, it doesn't matter whether it's a recession or not because for them it's the perfect time to start a small business," said David Tiller, spokesman for the Small Business Administration office in Nashville.
Gallagher, 51, is president of Centro Inc., a Frayser company that sells gauges, valves, transmitters and filters to manufacturers.
Forell, 55, is the company's vice president and chief financial officer.
They bought the business in December 2001, weeks after the National Bureau for Economic Research confirmed that the nation had been in a recession since March of that year.
"Basically, we bought ourselves a job so we could take a huge pay cut," said Gallagher, a former president of the industrial division at Thomas & Betts, a job he lost as part of a restructuring.
Forell was CFO for Catherine's Stores Corp., which merged with Charming Shoppes Inc. He stayed only through the transition.
Forell, who golfed with Gallagher, was looking for a business to buy when he found Centro.
"This business was bigger than I wanted to tackle by myself," Forell said.
But together they could make it work.
"Between the two of us I thought we had the skills we needed to make the business successful," Gallagher said. So by investing more than $4 million in personal cash and bank loans, they bought the now 13-year-old company, with 46 employees in Memphis, Nashville and Little Rock and sales staff in Mississippi, Kentucky and Arkansas.
At Centro, Gallagher and Forell are running their business in ways that weren't allowed at big corporations.
"In large publicly traded companies, in my experience, it's very hard to make good long-term decisions because ultimately everything focuses on the quarter," Gallagher said.
Centro, where sales improved by 16 percent on 2002, has goals that are more long-term, and the changes in the operation are paying off.
With $12 million in sales now, the goal is to reach $40 million in 10 years.