Tall Sales

In a way, it began with a bet. Or a dare. Certainly it was a promise. Whatever you call it, it happened at the annual meeting in 1994, a half-social, half-serious function celebrating the past year. Larry Gaynor, founder, president and CEO of The Nailco Group, was proud of his beauty salon product distribution company. And why not? He had a strong company, largely constructed by a formidable sales team.

Today, it is a selling tsunami.

Back then, it had made $18 million for the year, and The Nailco Group--TNG for short--was moving into a 100,000-square-foot, state-of-the-art complex. But Gaynor was bracing for a possible quitting epidemic--the new office in Farmington Hills, Michigan, was 20 minutes further from most employees' homes. And so Gaynor, who is something of a showman, boldly announced to his 65 employees: "When we reach $50 million, I'm going to buy each of you a car."

He enjoyed the looks he got from his slack-jawed employees. Then he promptly forgot his pledge.

Until 1999, when 24 employees reminded him.

As the only ones left of the 1994 crew--and knowing sales would hit $50 million within a year--they expected their cars. "I was in shock," says Gaynor, now 45. "I remembered saying it, but then I didn't remember saying it."

At TNG's annual meeting, held in the waning days of 2000, those 24 employees were rewarded with a choice: $25,000 in cold, hard cash or a free car worth 70 percent of their salary.

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Employees wept. They shouted for joy--especially when Gaynor promised similar incentives for reaching $100 million. They promised Gaynor they'd reach that new goal within a year or two.

It could happen. After all, Gaynor's company is already something of an empire. There are several divisions underneath the TNG banner: The Industry Source, a mail order and retail store division; Hairco, a full-service hair-care products division; Beauty Direct, a master distributor for dealers, distributors and over-the-counter stores; and NailSmart, a discount nail product supplier.

This article was originally published in the August 2001 print edition of Entrepreneur with the headline: Tall Sales.