Quick Change

Repro Men

Did you ever think you could run the company you worked for better than your boss? If you're a true entrepreneur, you probably think it every day. In 1998, Zack DaFaallah, 41, and Alex Torres, 30, made that thought a reality when they quit their jobs at a large Southern California reprographics firm and started Pacific Coast Reprographics (PCR). By the end of its first year, the Irvine, California-based start-up had made $1.2 million.

"We had to watch everything we spent in order to make a profit. I ate a lot of peanut butter and jelly sandwiches that first year."

"We wanted to strive for something better," says Torres. "There was nowhere else for us to go at our old company."

DaFaallah and Torres, who specialize in digital reprographics, felt their old company wasn't keeping up technologically. DaFaallah even wanted to train salespeople in digital output, but his employers weren't interested.

"A part of our customer-service model is to educate employees and clients," says DaFaallah. "By showing them how to send us better images faster, we can deliver earlier with higher quality."

When DaFaallah and Torres first opened PCR, a number of previous customers sought them out. Unfortunately, that led the duo's former employers to accuse them of tampering with clients.

"They didn't really have a case, but our old company thought that by dragging us down with legal costs, they could shut us down before we even got started," says DaFaallah. "Instead of putting our resources into the business, we had to pay our lawyer a very precious $10,000 to $15,000."

Once they overcame their legal issues, DaFaallah and Torres were finally able to put all their energy and money into PCR. Even though they were able to hire a salesperson and pay her salary, they themselves didn't take salaries for the first six months. "We had to watch everything we spent in order to make a profit," remembers Torres. "I ate a lot of peanut butter and jelly sandwiches that first year."

Fortunately, DaFaallah and Torres had immaculate credit, which enabled them to fund the start-up not only with their savings, but with their personal credit cards as well. "Banks don't lend you money unless you're in business for two to three years," says Torres. "We had to focus on keeping customers so we could make a profit and continue growing."

"When we started, we would tell people we were open from 7 a.m. until the work is done," says DaFaallah. "That was our motto. [Customers knew] that the work would get done, and they came back because we did a good job."

Eventually, DaFaallah and Torres came toe-to-toe with their former employer again, this time outside the courtroom, when two potential clients asked each company to provide samples of their work. "Our [former employers] knew they had to do their best to compete with us," says DaFaallah. "But their best work wasn't even qualified to stand next to ours. Getting those clients was one of the defining moments of our first year."

There's no magic formula for making $1 million your first year in business. But based on the stories of entrepreneurs who've done it, these are some rules to live by:
  • Work hard.
  • Don't take a salary.
  • Focus on profit.
  • Reinvest in your business.
  • Empower your employees.
  • Use your connections.
  • Move fast, but think long term.

As PCR took on more clients, DaFaallah and Torres were forced to hire more employees, which proved to be one of the biggest challenges of their first year. "PCR was our baby," says DaFaallah. "I used to look at every job, take work orders home and spend three hours making sure we were doing the work correctly. It was difficult to let go. After a while, you have to trust your employees are doing things the right way."

DaFaallah and Torres are currently setting up a network of reprographics firms in an attempt to fend off an impending monopoly by their former employer. The Network of Affiliated Reprographic Companies (NOARC) already has nearly 30 members nationwide, and PCR has set up a training facility in Irvine that equips smaller reprographics firms with the technology and skills to stay competitive on their own.

"We don't want anything to do with their finances; we just want to give them the tools to remain independent," says DaFaallah. "We're solidifying our place in the market by helping smaller companies stay put. In the end, it's about fair competition and sound business practices."

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This article was originally published in the July 2001 print edition of Entrepreneur with the headline: Quick Change.

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