Small Business of the Year: The Phillips Co.
The Small Business of the Year Award is presented to the small business owner whose efforts and/or entrepreneurial pursuits exemplify the passion and commitment needed to overcome adversity as well as attain success.
Having realized a successful 25-year career in the management ranks at engine manufacturer Cummins Inc., Valerie Phillips had little left to accomplish in corporate America so she started thinking business ownership would be the logical next move. Around the same time, her father, Sam Phillips, co-founder of Columbus, Indiana-based assembly and warehousing company PDI, was thinking about retiring. Recognizing that their goals were complementary, the father and daughter agreed in 2006 that she would buy the company for $380,000.
“I didn’t have plans to take over the company in the beginning,” recalls the 50-year-old Phillips. “I thought at some point I might join the company but only if it made sense because I actually had a fairly decent job.” But the move ultimately paid off. After changing the name from PDI to The Phillips Co. Inc. (TPCI) and acquiring Edinburgh, Indiana-based manufacturing company Maximum Spindle Utilization Inc., Phillips saw TPCI increase revenues from $2.8 million in 2007 to $6 million in 2008.
Goal-oriented by nature, Phillips is looking toward the day when the company, which manufactures products for diesel engines, will boast $25 to $40 million in sales – and she’s currently looking to buy a company that will help her to achieve that. But for Phillips, it’s not just about the money. “It’s about being financially strong so that I can give to employees and give to the community,” she says. “I want to be able to help women, help people of color, and hire more folks that fit into those categories.”
Why do you think The Phillips Co. is the best in its field?
We’re very geared to creating the right environment inside the workplace. We’ve spent a lot of time creating an employee handbook that we’re proud of. For a small business, we have, I believe, some nice benefits. We do bonuses, we do recognition, we have an annual family event every year. We go out of our way to make sure folks are happy. I believe that if employees are happy at work then they’re going to produce a quality product and in the end the customers are going to be happy with our service.
Do you have any advice or words of wisdom for other entrepreneurs?
You should not be afraid to take risks to achieve your dreams. Don’t be afraid of change. With what we’ve seen happen in the last ten months to a year, we’ve got to be open to change.
What can Black Enterprise readers learn from you?
Be ready to go when this economy turns back and put yourself in a position where you can take on new work. I think unfortunately there are some companies out there that either haven’t made it or won’t make it and that will allow me to grow the company. I plan to continue to grow by acquisition of complementary businesses.
What’s a recent challenge you’ve experienced?
We saw [the financial downturn] coming in November and then the orders kind of fell off in December and we quickly did the right things to get our costs in line.
How did you handle it? What did you do?
We cut work hours from 40 hours to 30 per week and in return the salaries were cut by 25 percent. I think the employees at first were kind of skeptical of the actions that we took, but they know that working 75 percent is better than not having a job at all. So I feel that I gained respect even though their personal finances are less. They’re looking across the nation and seeing large companies closing for up to nine weeks. Instead we took the approach that each and every employee would be impacted – even myself. That’s the kind of thing we try to do – if we implement something we do it across the board.