"Newsmaker of the Week" is presented by the SCV Press Club and Comcast, and hosted by Signal Multimedia Editor Leon Worden. The program premieres every Wednesday at 9:30 p.m. on SCVTV Channel 20, repeating Sundays at 8:30 a.m.
This week's newsmakers are Lisa and Dan Boaz, owners of Vital Express. The interview was conducted Jan. 20. Questions are paraphrased and some answers may be abbreviated for length.
Signal: Vital Express has become a big name in the Santa Clarita Valley thanks to your pledge to the newly renamed Vital Express Performing Arts Center at College of the Canyons. How long will it take you to make that $2 million donation?
Dan Boaz: It takes a while to get that paid off. It's over a period of a few years.
Signal: Is it a percentage of receipts?
Dan: Oh, no. It's cash money to the college foundation.
Lisa Boaz: There was a $5 million endowment, as you know, for the center itself. Our $2 million is a good chunk toward that. We wanted to show that we are committed to the community, we believe in being here, we've grown our business here, and we really want to be a part of it for the long-term. The college partnership has been a good thing for us. ... I'm on the board for the (COC) foundation, so we were aware of that. It became something that we talked about and figured out how we could do it, and (we) were able to do it and we look forward to working with them over the years.
Signal: What inspired you to do it? An interest in the arts, or an interest in COC?
Dan: It's more about giving back to the community. We're doing some things with the hospital, too. This community has been a huge part of our success and growing our business. Our vision, when we first started Vital, was to be a part of this community, and with my prior experience at (United Parcel Service), I knew this was an emerging community and big, as far as businesses come up and growing up very rapidly, and we wanted to be a part of this community.
As Lisa got very, very involved in the (SCV) Chamber of Commerce and the Valencia Industrial Association and Soroptimists and several other organizations, we became more and more visible and ... continued to grow our business and businesses supported us. So, as we became more and more successful, we felt there was a need to give back to the community. That was obviously a big (way) to give back to the community, and we want to continue to do thinks like that.
Signal: Dan, you're an alumnus of COC?
Dan: Correct. ... I think it's been 17 years since I graduated. It was probably back in '85 (or) '86.
Signal: How long have you lived in the SCV?
Dan: I've lived out here for about 20 years.
Lisa: I've been here for about eight years.
Signal: Lisa, you worked for a pharmaceutical company?
Lisa: I was a training and development manager for a pharmaceutical company.
Signal: How do you go from working at a pharmaceutical company, and working for UPS, to running and starting what has become a local big-name business?
Dan: I had a vision, and I learned a lot from UPS. I have a lot of respect for UPS over the years. Really, UPS was my foundation (for) learning what I know today. UPS took me through a lot of schools and a lot of learning the transportation industry, and learning a lot about business. I had (a) vision of this company that I wanted to run, and I felt that there was a niche in the industry between UPS and FedEx and some of the other bigger players in the field. I felt that we could eventually compete, and that's what we're doing.
I met Lisa right about that same time, so we decided together that we were both going to quit our jobs and start from scratch. So, basically with one truck I was driving the truck, Lisa was answering the phones; I was doing sales; we were doing everything we could with just the two of us. We got things going and we hired more and more people, and things progressed into a 1,300-square-foot facility a year later into 37,000 square feet. It just kind of progressed from there.
Signal: So, you were working for UPS, which has been around for about 100 years
Dan: Close to it.
Signal: And then there's the U.S. Postal Service, which has been around even longer and you figured you could compete with that?
Dan: (It's) not that I figured I could compete with that. You just have a vision of something you can do, and I figured, starting out small, we could give premium customer service to our customers in a niche market area (like) we're doing now.
At the time, we didn't realize we'd get to the state we're at today growing nationwide, and franchising nationwide, (with) offices in Charlotte, Indianapolis, Houston, Los Angeles and San Francisco. But we wanted to duplicate this model where keep it small, keep the customer service on a local level, keep the drivers and get involved in the community and get involved in the chamber, and all those things you do as a small company and as you grow you lose touch with your customers because you start growing. We wanted to keep it small ... keep it as local franchises, and then grow more of them more little Vitals throughout the U.S. That's how we figured we could compete with the big guys, with those types of services.
Signal: When you started in the SCV in 1997, was it your initial intent just to serve the local market? How much of your business is in shipping across town, versus across the country?
Dan: Probably 25 percent of the business ... would be same-day deliveries throughout Southern California. But a big portion of our business is going all over the U.S. and all over the world. As we grew, and as we get customers in multiple locations we ship here to Chicago, we ship from Chicago back to the U.S., we ship to the UK, we ship to Australia, we ship all over the world, to and from.
A lot of business (is) to and from China. As you know, a lot of business is going to China, and we had to keep up with the times because as time progresses, businesses are moving to China, and we don't want to lose that business, so we're doing business with China.
Signal: How does it work to ship something if you don't have an office at the destination point?
Dan: We have an agent network throughout the U.S. and throughout the world agents and companies, a lot like what we're doing, all over the world that we network with. We use the same airlines, the same ships, the some of the (same) trucking companies to get them to and from. But on the locations here locally, we have all Vital Express trucks. In Charlotte, N.C., we have Vital Express trucks. In Indianapolis we have Vital Express trucks.
Our goal is within five years to have 500 locations, so no matter what, a customer is going to pick it up and deliver it and be delivered in a Vital Express truck. And it will go off into Canada and then it will end up in some other parts of the world.
Signal: How many offices do you have now?
Dan: We have a total of five offices now.
Signal: They're company-owned?
Dan: Company-owned. And now we're franchising. We've finally finished the process. We have probably close to 200 people wanting to buy franchises right now. We'll probably sell about 100 (franchises) this year. We'll probably put out between 30 and 50 locations and get them open this year.
Signal: There's enough interest to where you realistically expect to sell 100 franchises this year?
Dan: Oh, absolutely. We have more than enough people. We're actually screening people out to get the right people into the mix of what we're looking for.
Signal: Now I'm starting to see where that $2 million might be coming from.
Dan: We haven't sold them all yet.
Signal: Thinking of China, tell us about the event you sponsored at COC last year.
Lisa: Like Dan has said, China is an expanding market for a lot of our (businesses), and COC was putting together a program on doing business with China where they were gathering experts from China, but also people from the Santa Clarita Valley who have tried to open up businesses up there and plants and manufacturing facilities. There have been a lot of challenges (that) people have gone through. The whole event itself was bringing in people experts from different areas, and there were some speakers a keynote speaker and there were some breakout sessions. But it really gave people who wanted to do business with China, or wanted to open up a factory in China there were so many different avenues so that if people wanted to do something, they could talk to someone who's already been there, who's done it.
There are a lot of different challenges, as far as rules and regulations, and just general business practices are different. There's a lot of different things that happen over there. It was a good information session, a lot of good information for people to find out. For us, it was a good fit, because we do have clients who are in there. We're doing stuff with China. So we wanted to sponsor the event to learn more about it, as well, for us, and then showcase some of the things that we can do.
Signal: For all the complaints we hear from labor about outsourcing jobs to China, you've find a way to capitalize on the phenomenon.
Dan: Absolutely. I mean, the fact of the matter is that business is going to China. If you look at some of the stats, it's unbelievable, the amount of business that's going to China. A lot of the manufacturing jobs are going to China. It's just something we have to accept.
And I think it was appropriate for the college to put this (program) on, because it really gave an opportunity for students to look at, as they're coming up, (how) things are going to change. The way we used to business is going to change quite a bit. Typical manufacturing will be done there, so much cheaper. You either learn about it and you join on board and you learn the pros and the cons and there's just as many cons (for) doing business with China as there are pros (for) doing business with China. You've got to look at both.
The business community and the people who attended learned a lot. Just as many came out with good information as came out with bad information on doing business with China. We want to stay involved (so that) as potential customers leave the Santa Clarita Valley and go to China, we're still doing business with them. Because it's still got to be distributed within the United States.
Signal: How is COC doing in terms of providing the type of training that modern companies need in an employee?
Lisa: (COC Superintendent-President) Dianne Van Hook and her team over there, they have a strong vision for what's happening in the business community. They go out and they research what people want, what businesses want, what sort of employees people are looking for, and then they build training programs through their Employee Training Institute and the University Center and the other stuff that they're building there. They build this programs around what this immediate community needs, and the community is very responsive
The college is very responsive to the different things that people need. I think it just creates these programs where you're getting a good group of skilled people. And (when) they finish up their courses I mean, here's your candidate pool sort of ready to go, and I think it makes a big difference for companies out here. With the University Center having all the different programs, from masters programs to degree programs to have all of that to offer for businesses out here and you can send your employees to that, and they're only 15 minutes away from work it's a lot easier and it's a lot more effective for people to be able to go and do those kinds of things, and then you come back and build your business with better educated and more skilled people.
I think the college is very receptive to a lot of things that are happening in the business community and, you know, (with) the different buildings that they're building, and there's just kind of a lot of good things going on, as far as that goes.
Signal: Vital Express sort of exploded on the local scene. It's the trendy business everybody's watching. How hard was it to break into the "in" crowd? Did you discover tricks or patterns that other start-up entrepreneurs would be wise to follow?
Dan: I don't think there's a trick. I think it was very simple for Lisa. From day one of starting our business, Lisa got involved with the chamber. She went to every possible event there was, and just met people and met people. I didn't get as involved, for the first couple years, as Lisa did. I've been here for 20 years, and we go places and more people know who Lisa is than they know who I am, because she just got so involved and met people.
I don't think there's a trick to it. I think it was just getting involved and doing things for the community, and I think anybody can do that. Go to the chamber there's all sort of organizations in the Santa Clarita Valley and just doing things.
At the beginning, it was doing things for the community (on) a very small (scale); obviously, what we've done recently with the college is a much larger deal, and it has become big, press-wise. I don't think there's a secret to it. We haven't changed one bit from the day we started our business. We don't, per se, rub elbows differently than we did before. I mean, we've gotten to know a lot more people but I wouldn't say we're more connected or not connected.
Lisa: I think the community itself is very unique. Anybody's who's been here I've only been here for a short period of time, but people who have lived in this community for a long time, it's very business friendly. It's very receptive. I mean, you see how many people start businesses out here and are successful, and it's a growing culture that just feeds on business enthusiasm, and people are very supportive. I think that if you're willing to go out there and do it, people are willing to support you. I think that has become a good thing for us. That's how we've been able to grow.
Signal: What advice do you have for the person who wants to start a business?
Dan: Probably the one thing you can't do is, you can't quit. That's obviously the common denominator of most people going out of business is because they're underfunded and they end up going out of business. It's not because they don't have a great idea, it's not because they didn't try hard; they either quit too soon or they're underfunded and they run out of money. That's the stats, if you look at SBA and how that happens. Unfortunately, you have to do whatever it takes to make things work. We just never quit.
Believe me, we've had some very, very bad times. There was many a day where we thought we weren't going to make it. We went through some very, very hard times, some ups, some downs, and we continue to grow and we continue to go through ups and downs. Like any story you write whether it's Michael Dell or other entrepreneurs in life I mean, it was never just all of a sudden, Michael Dell is as successful as he is today. He went through some very, very hard times, and I think we went through some very, very hard times. We never gave up.
We got past that magic second year, we got past through the third year, the fourth year, and then the big one's the fifth year. They say once you get past the fifth year, there's a good chance you're going to make it. But still, you have your ups and downs. You've just got to continue to strive and work hard.
Our big thing has been brand. You've seen the branding of the Vital Express Center and the red "V." We're really, really big on branding with our trucks, with our equipment, with our uniforms. You come to our offices and everything's just immaculate. The drivers (have) got to be super, super sharp in the red shirts, and that's been the brand, and making it recognized and getting enough attention like we're getting today, so people see it.
Signal: What were your challenges and how did you overcome them?
Dan: Well, sometimes you have to learn from the school of hard knocks. It's hard. There's no one to turn to. You can't turn to the bank and assume the bank's just going to lend you money. That ain't going to happen.
We leaned on each other quite a bit. We bounced things back (and forth) with each other because sometimes, there's really just us. There wasn't (anywhere) to go, and there was no one to (turn) to if we had problems. We would get support, time to time, as far as advice, from other businesses, from time to time. We'd ask them what they went through. You read a lot of good books, and you read a lot of stories from different businesses.
Lisa: I think, too, with our customers, our biggest thing has always been customer service. No matter when we were two people or when we were 50 people, we give the same customer service that we did seven years ago.
I think through our hard times, through Sept. 11 and those types of things that really changed our business, our customers have stuck with us. I think that's a testament to us and what we are able to do. That's what we teach in our employees, how they learn they learn from us and they learn how we do it.
And, we don't take anyone for granted. As people grow, sometimes they forget the smaller customers, and we just don't do that. The majority of our customers have been with us from the beginning, and I think there's a reason why they stay with us. We give them the same kind of service. And that's with our different locations that they're opening up, you're going to get the same kind of service in North Carolina and Indianapolis that you will here, because everybody has learned it "the Vital way." They've learned how we've done it. So that's something that we're pretty proud of.
Signal: What impact did Sept. 11 have? To what extent are your "down times" related to the economy?
Dan: We're the first ones to feel it. We learned not by knowing anything; we just felt it.
Back in 2001, January, we had our all-time record month. February, right about the time the stock market crashed, business just dropped. It's just like the bottom fell out. So all of a sudden it was like, boom. It was a real rough road.
When Sept. 11 hit it just devastated our business, because we're in the air freight business. When planes are grounded, you can't move freight. After that 2001 was really a huge turning point for the worse in our business but also a turning point for the better, because we made some drastic changes and we realized some things and we changed the ways we were doing business.
That's when we realized that being big wasn't better. That's when we came up with the concept of franchise, was at that point, when we downsized from 37,000 square feet to 2,000 square feet within the same year, literally overnight. We downsized our business so small, and we had to unfortunately let a few drivers go, basically all of our drivers. And some of our management were drivers. I was back to driving, and Lisa, and Tammy, our controller, was running dispatch, and we grew the business back.
That was the point that we really learned and understood our business so much and how important it was to stay small and take control of our customers and don't let things get out of control and control cost. So, our business motto today is built off that small with our franchises, 2,500 square feet, only a few trucks, small area. Don't become one of these big trucking companies and make a lot of money. That's not really how you make money. Big isn't better.
Signal: Why would a customer choose Vital Express instead of UPS or the Postal Service?
Dan: We don't compete against UPS or FedEx. We're not a small package carrier. We're more of a freight company. We (offer) different types of services. We have the courier messenger service, which is one form of service. We have the air freight, we have the "less than truck load" and full truck load, and then we have our local delivery and pick-up within those services with our trucks.
Most trucking companies don't have that spectrum of services. You don't see very many courier services that have an air freight and a trucking division. That's where we're a little bit different. We offer a little more of a broad-range spectrum of services to these customers. There's really not anything we can't do, and obviously in the last two years, when we got into the international market, it really exploded. (It's) something that we never thought we'd get into. You get into things in business that you don't realize that you're going to end up (doing). We started out as an air freight company, and a year and a half later we got into the courier business, which we used to completely outsource, and when we got into that business and we learned it, it became a very lucrative business for us. Later on we got into the international, and the international business has completely exploded.
The opportunities are endless. If we (hadn't) gotten into international, we wouldn't be doing what we're doing with China. And it's imperative that we do business with China.
Signal: You've even spread your brand to race cars. What's that about?
Dan: It started out as a passion. A local kid here, grew up in Val Verde Jay Drake came out of racing locally in Ventura and got an opportunity to go out to the Midwest to Indianapolis and run for some of the bigger teams in USAC racing, United States Auto Club. (He) now is racing for Tony Stewart racing enterprises, and we're the sponsor for Tony Stewart Enterprises. So it's been exciting. It started out as a passion; it's been a great branding. It's led to us some bigger and better opportunities.
Our office in Indiana is doing very, very well, and we've hooked up with some Hondas, and Jordi Gene, and Indianapolis Motor Speedway. We're doing stuff with some of the NASCAR teams in our Charlotte office. We've really met a lot of people, and (as for) rubbing elbows, now it's not just in the community. All of sudden, now we're rubbing elbows with some of the big names in NASCAR and the Indy Racing League in racing. These people are so loyal in the racing industry. They're one of the most loyal customers you could ever have because they all stick together. If you're in the racing industry, they all stick together and they do business with people in the racing industry. So we've gotten a lot of business from that.
Signal: It sounds like you've made quite an investment in auto racing.
Dan: Yeah, it's been quite a bit. Racing's not a cheap investment. We do it the smart way. In 2000, when Jay tied A.J. Foyt's record, I asked Jay, "What's it going to take?" Because he was on TV every week and he kept winning these races and he had the suit and it had nothing on it. I said, "What's it going to take to get my brand on your suit?" He said, "Just buy me a suit." A $900 suit. So it started out as a $900 investment and then it went to $200,000, $300,000, $400,000 dollars a year. So it goes up. We are going to continue to spend money in motor sports. Our goal is by '06 to be in the NASCAR (Craftsman) Truck Series, and then into Busch and then into (Nextel) Cup is our goal for '08. So we have some big plans for auto racing.
Signal: Any more big plans locally? How do you pick a charity to help?
Lisa: It's hard. We believe in everything that we're doing. I think there's nothing great coming up anytime soon, as far as what we're going to be doing. But we're going to continue to stay involved and we're not going to drop our involvement in our community. Obviously, with our long term commitment to the college, that's not going to go away. We just want to be a part of it. We enjoy it. I enjoy it a lot. It has helped our business become successful, and we don't want to take away from that.
Dan: We had some things going on with the hospital, too. We had a little campaign to raise money for the hospital, too. So those are going to be our two targeted foundations and things to get involved with.
See this interview in its entirety today at 8:30 a.m., and watch for another "Newsmaker of the Week" on Wednesday at 9:30 p.m. on SCVTV Channel 20, available to Comcast and Time Warner Cable subscribers throughout the Santa Clarita Valley.