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Last Update: Monday December 18, 2017

Key Idea: Be Able to Take On Debt

Chris Fortune and his wife Sara got into business by buying out a founder who was ready to quit.

Key Question:

A: 

Chris looked for and found a bargain.  He bought a sagging company and then proceeded to put his own personality into it. The Graber Products brand represented quality and stability, however, sales were flat. Chris built on the good he bought and threw out the bad.  Eventually he even changed the name of the company to Saris Cycling Group.

Q:  What was Graber's biggest problem when Chris took over?

A:  They were stuck making old products. Chris said, "They were wondering and watching what was going on out there. They had a good nucleus of people and a good reputation in the marketplace as being honest and honorable people. But the image of Graber in the marketplace was more of a nuts and bolt manufacturer, and things from a development and design standpoint had leap-frogged them. And whenever you have your competition 'obsolete' your own product, you're in a big danger zone, and that's what they had happen to them."

Think about it

What good business do you know about that might be under performing because the owner may be tired and ready to retire? If you can't think of any, how could you find out about the possibilities out there?

Clip from: Saris Cycling Group aka Graber

Madison, Wisconsin: Sara and Chris Fortune bought Graber Products in 1989 when it had 24 employees and $3.3 million in sales. When we taped this story there were up to 60 employees and with revenues over $10 million. They continue to grow, changed the name of the company to Saris Cycling Group, and are very committed to keeping their manufacturing in the USA.

Actually, manufacturing is on its way back to the USA!

That is not prophetic verse but the reality of our advancing technologies where highly educated workers can do it better, often faster, and sometimes cheaper than anywhere in the world.

This episode is a case in point: And, this story comes from the heartlands of America. These are the kind of people who love this country and all those basic freedoms to do the right thing in the face of adversity. They have done it right and now they ship their products around the world.

When Chris and Sara bought Graber Products, they bought a solid business with a good reputation, but the sales were flat. The employees were dedicated, but the company needed fresh energy to start growing again. To dump the stodgy image of the company that he bought, Chris found an Italian fashion designer who came up with improved form and function for his bike racks. Chris believed that the market was ready, willing and waiting for new ideas and he was right. Customers have flocked to the new products and employees love to come to work.

They are their industry leaders. They have kept manufacturing in America. And, their industry recognizes them for their generosity of spirit, moral courage, and ethical leadership. These people are quiet heroes,  new pioneers making the world a better place.

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Saris Cycling Group (once known as Graber Products)

Chris Fortune, CEO

Visit our web site: http://saris.com

Business Classification:
Manufacturing, Sports (Biking), wholesale

Year Founded:

Be Able to Take On Debt

HATTIE: (Voiceover) Sara and Chris Fortune bought the company in 1989 when it had 24 employees and $3.3 million in sales. Today, they employ 60 people and have tripled the sales.

SARA FORTUNE (Owner, Graber Products): I always knew that he'd work hard. He put himself through college. He worked while we were engaged. He worked nights, student-taught and then got his studying done. He was just the kind of guy that always worked. I don't really think I've ever had any real doubts in where he wanted to go. Every job he took on, he succeeded.

CHRIS: When we looked at businesses to buy, we had a scope of what we wanted and what we didn't want. I really felt that I was driven to develop a product or get into a situation where we had an opportunity to develop a brand. I knew I didn't want to get into the retail environment. And I didn't want to stay in distribution because I didn't feel that you had control of your own destiny. I think there's tremendous value in developing a brand, and when we looked at Graber as a company, we felt they had a great reputation in the marketplace. We visited stores and did some market research, talking to the dealers to get a feel for what was going on.

And the market was expanding. They had some tremendous opportunity if they had just focused on the resources that they had, and they didn't do that. The two gentlemen—one was 68 and the other one was 75, wanted to move on with their lives. They were trying to maximize their balance sheet and their profitability at the risk of the future of the business. There are three types of people and three types of companies: There are companies that wonder what's happening, companies that watch what's happening and companies that make things happen.

And these gentlemen were wondering and watching what was going on out there. They had a good nucleus of people when we bought the business. They had a good reputation in the marketplace as being honest and honorable people. That was important to us. You know, part of our business culture states that we want to be honest and do the right thing in the way we approach our business and our customers. And they had that going for them.

HATTIE: So you didn't have to undo...

CHRIS: Correct. But the image of Graber in the marketplace was more of a nuts and bolt manufacturer. From a development and design standpoint, things had leapfrogged where Graber was positioned in the market. Whenever you have competition obsolete your own product, you're in a big danger zone, and that's what was happening to them.

HATTIE: Did you start with a bank loan?

CHRIS: Yes.

HATTIE: OK. And did you get your venture capital from one bank?

CHRIS: Yes, it was from the Associated Bank, and they're great people. You know, business is very cyclical, and it isn't always growth and prosperity. You have some rough times along the way, and it's very important to find someone that's willing to work through the good and the bad times with you. We found somebody.

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