Revving up for new business

LONG BEACH, CALIF. (Fortune Small Business) -- When Shannon Griego says she's in a dirty industry, she isn't just talking about the contaminated soil her firm carts from construction sites. "Competition in the Los Angeles area is brutal," she says.

Griego's company, Global Transloading, serves primarily as an intermediary between independent truckers and the companies that need them to haul debris for disposal. Griego, 36, dispatches more than 50 trucks a day (her firm owns two, and the rest belong to drivers with whom she contracts).

"After we pay the drivers, margins are slim," she says. "Everyone's trying to put each other out of business." But despite the rivalries, after just four years in business, Global hit $2.5 million in sales last year and is profitable.

Griego started out in the Army, where she mastered the art of moving and tracking supplies over air, land, and sea. After serving in countries such as Germany and Saudi Arabia, she returned to the U.S. and launched Global in 2004 with just $500 and the knowledge that her status as a female veteran of Native American descent (she is a member of the Jicarilla Apache tribe) would help her win public contracts.

Griego now employs full-time two drivers, a project manager, and a dispatcher. She regularly enlists more than 100 truck owner-operators, whom she dispatches and manages.

But despite Global's robust list of contracts, both government and private, Griego worries. Because most of her jobs involve trucking loads from construction sites, her firm stands at the treacherous crossroads of California's soft real estate market and the nation's skyrocketing gas prices. The number of construction projects is shrinking, and Global is struggling to move trucks among them.

"I want to focus on planning and new business," says Griego. "But my day-to-day tasks leave me spinning my wheels." To give her a hand, FSB brought in three experts.

Kathleen Allen, professor of entrepreneurship at the University of Southern California's business school, meets Griego on the university's Los Angeles campus. Allen immediately asks the owner to describe her clients. Griego says that 80% of Global's work entails removing dirt from construction sites. The smaller - and more profitable - portion consists of shipping other materials, such as grain.

Both types of work require the same logistical abilities and equipment. But, Griego says, "I have an advantage in construction. I've been doing it for so long, I already have contacts." Allen advises Griego to leave her comfort zone and spend less time seeking "dirt work" so that she can diversify into the more lucrative markets.

Allen quizzes her about her staff and learns that Griego's project manager is a star on job sites but less effective with clients. "That hurts you," says Allen. In a firm as small as Global, all staffers should be multitaskers. Allen tells Griego she must make the project manager aware that customer service is a vital part of his job and train him accordingly.

She also suggests hiring an administrator to help tame paperwork. Griego says she can't afford another staffer, but when Allen says it's a cost she must eat, Griego admits she has other fears about retaining new workers. In the past, disloyal hires have left to become rivals. Allen's answer? Bring in an older worker or one with no industry background.

Bob Hoersch, 61, a SCORE counselor based in Glendale, Calif., with more than 30 years of marketing experience, is the next expert to weigh in. He visits Global's Long Beach headquarters, a tiny stucco office on a dusty lot where the prior owner's chickens scuttle around heavy equipment. When Griego tells Hoersch that she is already armed with the right veteran and minority certifications to help her win government contracts, he asks about her progress on the private side.

Griego replies that she can't get the attention of the estimators who pick suppliers. "They're unreachable," she says.

"You're the new kid on the block in an old-boys' network," replies Hoersch. "People go with who they know." He advises Griego to make personal contacts at the SBA (instead of simply relying on the agency for certifications) who can help her connect to buyers. Once she has names, he says, she must present to them face-to-face. When Griego admits to shyness, Hoersch tells her to conquer her fear. "It's harder for people to reject you if they've met you."

Next Hoersch advises Griego to create a formal marketing plan so that she can track her more than 200 contacts. He suggests a customer-relationship management program such as GoldMine and also advises Griego to hire someone to periodically check in with customers. "There are lots of actors in Los Angeles looking for part-time day jobs," he notes. Like Allen, Hoersch says that staffing up is a cost of doing business. The new hire should request feedback after bids are submitted so that Global can better analyze its wins and losses.

When Rosario Rizzo, a Ryder senior vice president in Atlanta, meets Griego, the pair instantly bond over their shared military backgrounds. Rizzo, 44, also boasts a long career in logistics and transportation, so the two dive into the nitty-gritty of operations. Griego admits that she doesn't - but should - track her trucks' utilization. "Our trucks haul waste seven hours to Arizona and return empty." To make money on the return trip, Rizzo advises Griego she should contact larger shipping firms such as C.H. Robinson to find "back hauls."

Rizzo then asks about Griego's business plan. "What's your strategic intention - your commander's intent?"

Griego smiles at the military reference. She says she hopes to steer away from construction into other industries, but notes that many of her clients don't know of her ability to handle logistics for other jobs. For example, her contact at Kiewit Pacific, a contractor for which she hauled dirt, was surprised to hear that she also handled an asbestos shipping project for another of Kiewit's divisions. "That's your foot in the door," Rizzo says.

He adds that Griego must review Global's operating costs monthly, and tells her to expand her workforce and better utilize her project manager. Give the project manager an incentive, Rizzo says. "Pay him more when he helps the firm cross a gross-income threshold."

Before Rizzo leaves, he praises Griego on her success but stresses the importance of forecasting. Griego agrees that she must strategize. Her first step will be to create a business plan. She intends to demand more of her staff and make time to plumb current accounts - and seek new ones - for more profitable work. Hiring, she says, may have to wait until the slowing economy rebounds. We'll return to see whether Global outpaces it.  

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