E-mail this article

Trying to raise $750,000 to start an aerial rental company, Dan Tumminello and Kevin Morrell were turned down by 47 lending institutions. No. 48 said yes.

Armed with a 60-page business plan that grew to 90 in the course of the process, Tumminello and Morrell opened Midwest Aerials & Equipment for business before the loan came through. Mayville Engineering Corp. made the new company its dealer and shipped it 21 scissorlifts to get started. Tumminello and Morrell also received boomlifts in advance from SkyJack, based on strong relationships Tumminello had with SkyJack personnel. The 31 machines were out on rent while the persistent St. Louis partners continued the daily process of knocking on bankers' doors.

“We went to 48 lending institutions and they said, ‘This looks good on paper but where's the history?’” says Tumminello. “We put our own money into it and we got down to pennies before our ship finally came in. The lesson is perseverance. If you want it bad enough, you'll probably get it.”

“With each rejection we learned something about ourselves, about how we should operate our business and about how to improve our presentation,” adds Morrell. “The whole process helped us to focus on the financials, on how we would manage cash-flow, and it forced us to line-item everything. We became increasingly confident about our ability to succeed and as a result, we have outperformed the five-year plan we presented.”

Finally, after nine months of efforts, just in time for Thanksgiving 1997, Midwest Aerials got its loan. It bought more lifts and within a few weeks rented everything and needed to acquire more. And that's the way it has been ever since for this 1997 startup that now has about 1,400 aerial work platforms and rough terrain forklifts, a better-than-75-percent utilization rate and facilities in St. Louis, Kansas City and Springfield, Mo.

Starting a rental company at a time when consolidation was gathering steam and start-ups seemed to be the way of the past was not an easy sell to the banks, especially for first-time owners. But “no” isn't part of their vocabulary, particularly in the case of Tumminello, a boundlessly energetic man who rarely, if ever, sits still.

“I never sit still unless I'm sleeping and my wife says I don't even stay still then,” says Tumminello with a laugh. His deep belief in himself and his company was one of the main points he had to show the banks while trying to get started — that and 20 years of working in the construction industry, selling jobsite supplies and later as a rental sales rep for St. Louis rental independent M.J. Struckel. Tumminello, who for 18 years dreamed of owning his own rental company, knew that the time to go after his dream had come once Struckel's ownership made the decision to sell to Rental Service Corp.

“I didn't want to be part of consolidation,” he says. “I always worked for companies where I could work directly for the owners and I would be their top producer. I didn't want to work for a publicly-traded type of company where you have no control over your destiny no matter how good a job you do.”

Tumminello needed a partner and began communicating his vision to next-door neighbor and friend Kevin Morrell, who had been in the real estate business. Although Morrell was doing well in real estate Tumminello convinced him of the strong potential in the equipment rental business.

“I like a challenge,” says Morrell. “The more I understood about the nature of the rental business, the more interested I became. I knew Dan, I knew he was driven and hard-working and that he had a lot of relationships. I became very interested in the rental business model.”

The men began developing a business plan, while continuing to work full time in their respective careers, Morrell in real estate and Tumminello with M.J. Struckel.

“I'd sell all day for Struckel and I'd go home and fall asleep at 8 o'clock as soon as I sat down,” recalls Tumminello. “Our backyards backed up and Kevin had an office in the basement. I'd wake up at 2 in the morning, look out the window and his light would be on. I'd walk across the yard, fall asleep on his couch and then he'd wake me up and ask ‘How much did you say we could get for a 60-foot boom?’”

While the initial rejection from the banks might have phased men with less perseverance, Tumminello had been well-trained in his years as a salesman. His approach to sales is essentially the same. “You have to want the business because you're going to be rejected constantly,” he says. “You have to push that aside and say, ‘I want your business and the only reason you're not giving it to me is because you don't know us.’

“That's the way I always look at it. What do you mean ‘no’? No means yes! No means I didn't talk about fishing and you love to fish. No means you love to shoot deer and I didn't talk about that. Or I didn't ask how many kids you have. It doesn't mean ‘No I'm not ever going to do any business.’ No means ‘You're not getting an order right now.’ That doesn't mean you don't come back. But when they give you a shot, you have to perform. Then you'll have them, and when your competitor comes in the door, they won't care what their prices are.”

Tumminello takes a similar view regarding the rate wars that have ravaged the industry in recent years. “Rate pressure is nothing more than lack of communication and lack of relationships,” he says. “If you don't have a relationship with a customer, you're not going to get his business, no matter what the price is. If you don't do what you say you're going to do and give him the quality of service you would want, you're not going to retain the business, even if you get it with a low rate. And if you get business with price, it's going to go away when somebody else gives them a better deal.”

Tumminello's reluctance to accept no for an answer is something he looks for in his staff. Tumminello, who is not the kind of guy to sit at a desk but prefers to spend his time driving sales by visiting customers with his sales staff, believes that relationships with the customer are the primary key to successfully marketing the company.

As for the Midwest Aerials staff of nine outside salesmen, Tumminello says he doesn't want them sitting around doing desk work, but that they should be “visiting jobsites, jobsites, jobsites and jobsites, and when they are finished doing that, visit some more jobsites.” Tumminello considers it sufficient if a salesman comes by the office once a week.

“If they come in with shined shoes, I say, ‘Get out, go get your shoes dirty and then come back in here,’” Tumminello says. “If they want to make money, they have to go to the jobsite early and often all through the project. If they don't, they aren't going to take care of the immediate needs out there.”

“A contractor might have 20 project managers ordering equipment for various jobs, so we make sure we contact all the project managers and purchasing agents,” adds director of sales Joe Alonzo, whom Tumminello recruited after working together with him for years in the supply business. “We're more aggressive than our competitors because we're calling on the jobs all the time. I teach our guys to get out there early, 6 or 6:30 in the morning, before business gets too hectic. Another good time to visit is late in the afternoon at 4:30 or 5 when things quiet down, their competitors have gone home and the project manager is more relaxed and might have some time to talk. I tell them to make a new friend every day.”

The Midwest Aerials management is pleased with its current sales staff, since good sales people are hard to find. “There's a certain mentality that's very successful, you can't just hire anybody off the street to do that,” says Dan Martino, Midwest's director of operations. “They have to have a passion to be successful. When they get out there, nobody is standing over them, they are their own boss and they have got to have that drive.”

Midwest Aerials' initial growth was spectacular, growing to 800 machines in its third year, and opening branches in Kansas City and Springfield, Mo., in that third year as well. In 2003, Midwest made the RER 100 at No. 83, and this year is ranked No. 77, based on 2003 rental volume of $11.5 million.

But fast growth can bring problems, as companies need operational infrastructure and the ability to make payments on time. The partners laugh about Tumminello always pressing to buy more machines with Morrell balancing that desire with the practical need to pay down the company's debt. The balance seems to be effective since the company's growth has been meteoric, while the bank that approved its initial loan has since lent the company six times what it originally loaned. Still, Midwest, while eager to acquire more equipment and expand to more locations, does need to digest its growth and pay down debt.

After Midwest's initial growth spurt, Tumminello and Morrell, who had focused on driving sales and establishing strong market share, became increasingly aware of the need for operational support. It took Tumminello two years to convince former M.J. Struckel co-worker Martino to make the jump from RSC, where as a branch manager he had led his branch to become one of the 10 top producing branches in the country.

“We built the company for two-and-a-half or three years, we had 800 or 900 machines and we were running around with our heads spinning, working 16-hour days,” recalls Tumminello with a laugh. “Danny (Martino) had three young daughters and I had to convince him and Joe that we were going to make it. It takes a couple of years in a market before people know that you're there to stay.”

When Tumminello finally convinced Martino to join the company, Martino stepped in to help bring order and set about establishing systems.

“When I came aboard, it was such a chaotic mess, it scared me,” recalls Martino. “For the first five months I stayed at the counter myself, coordinating 500 machines, dispatching four trucks, talking to every customer.” Martino gradually put together procedures that simplified the rental process. Adding to a strong rental contract developed by Morrell, Martino put together a pre-delivery inspection report to show customers what had been inspected, with a checklist signed by the mechanic who worked on the machine, communicating the company's level of responsibility to its customers. The company carries out complete inspections between each rental.

After those five months, Martino shifted his attention to the shop, where the company had outstanding mechanics but lacked written procedures and documentation of its inspections and services. With strict attention to American National Standards Institute regulations, Martino made sure the company carried out complete quarterly inspections as required by ANSI, and that its documentation system would enable the company to document what it had done.

The Midwest staff felt this was necessary to guarantee the safety of all customers as well as protect it in case of litigation.

“I always think that somebody's mom or dad is going to get on this machine, so it better be right,” says Martino. “It's good business because our customers appreciate it, it's important in case of litigation and because it's the right thing to do. We stopped a machine from going out on rent because the operational sticker wasn't on it. A salesman wasn't happy, but the ANSI law says that if the on/off sticker isn't legible, it's not ANSI ready.”

While some might feel Martino is too fanatic about details, the fact that the company has not had a serious accident, either at a rental location or on a jobsite, in seven years of operation supports the company's concern over safety issues.

Martino also made sure the company's on-site service capability was the best possible, by outfitting service trucks with the capability to perform just about every inspection, service and repair possible with the exception of painting. “We've got fluids, compressors, welders, generators all bolted to the back of each truck with every possible tool and part we would regularly use,” Martino says. “We can do complete rebuilds on everything from a 60-foot boom on down.”

Martino also made sure that the company could offer operator training to the degree that all but about three of the company's 51 employees are capable of training customers on aerial work platforms and forklifts.

Tumminello and Morrell were so appreciative of the contributions and dedication that Martino and Alonzo brought to the company that they gave them each a share of equity ownership. To Tumminello, the hard work and dedication of his staff is the key to the company's fast growth.

“This business isn't rocket science,” he says. “We show up quick, we're usually there within one hour. We fix the equipment the first time. We have good strong field mechanics and we're concerned with the customer's need. We're not just looking for a dollar, we want to give the guy what we would want and we run the whole entire business and the whole operation that way. We give the employee what we would want if we were employees. And then we expect them to do that job so that our customers want us and not our competitor. So everybody is key.”

History: In 1997, Dan Tumminello, a former sales rep for M.J. Struckel, convinced his neighbor Kevin Morrell to partner with him to open an aerial equipment rental company in St. Louis. The two men developed a business plan and were turned down by 47 lending institutions before No. 48 gave them their initial loan. In their third year, they had 800 aerial work platforms and forklifts and opened branches in Kansas City and Springfield, Mo. Now Midwest Aerials has about 1,400 units and is the largest independent rental company in its market areas.

Key personnel: Dan Tumminello, president; Kevin Morrell, vice president and chief financial officer; Dan Martino, director of operations; Joe Alonzo, director of sales.

While Tumminello says every one of its 51 staff members is critical, Tumminello hired Martino and Alonzo, and both men now own equity shares in the company. Branch managers are Tracey Schulz and Barb Majino (St. Louis), Doug Smith (Kansas City) and assistant manager Nori Albertson (Springfield).

Inventory: JLG, SkyJack, Snorkel, Genie, and Mayville aerial work platforms, Lull and Gradall rough terrain forklifts. Mayville and SkyJack enabled Midwest Aerials to get started by offering machines in advance; JLG has played an ongoing role of strong support.

Revenue: $11.5 million in 2003 rental volume; $14.6 in total volume; No. 77 on the RER 100.