More manufacturing? Maybe Butler did it: University's accelerator helps plants boost business

June 16, 2008

Ten years ago, Bob McAfee bought SaniServ, an 80-year-old Mooresville institution that pioneered the making of softserve ice cream machines for restaurants.

Despite the manufacturer's longevity, a handful of competitors-one of them much larger and two roughly the same size-had cut into market share, causing SaniServ's annual revenue to stall at about $10 million.

Determined to improve upon the figure, but unsure how to go about it, McAfee turned to the Butler Business Accelerator. The 2-year-old consultancy on the Butler University campus sprung from a $22 million grant awarded by Lilly Endowment Inc. Its mission is to help grow small- to mid-size companies with annual sales between $5 million and $50 million.

Those types of businesses too often are ignored, experts say, unlike big corporations, which have the wherewithal to solve problems internally, and startups, which are heavily nurtured by financiers and incubators.

For McAfee, the assistance he received from the accelerator's consultants, Butler faculty, and even student interns helped SaniServ's annual revenue climb 33 percent last year to roughly $15 million. A 45-to 50-percent increase is expected this year.

"They actually do a lot of the work," he said, "rather than just advising you to do it yourself."

The accelerator, part of Butler's College of Business Administration, is led by Lawrence O'Connor Jr., former Bank One of Indiana CEO, who came aboard in August 2006. The consulting team of five also includes Brian Landis, the second-incommand whose experience includes 19 years working for three Fortune 500 com- panies followed by a nine-year stint at global consulting firm Accenture.

Consultancies such as Accenture, as well as accounting and law firms, bring similar services to the table. But what the accelerator offers is a known entity-the university-with a talented staff, said Bruce Kidd, director of entrepreneurship at the Indiana Economic Development Corp.

"A lot of business owners I know are leery of consultants, because you're not sure what you're going to get," he said. "It's easier for a CEO to say yes to that kind of resource."

Spreading the word

Yet, O'Connor is hopeful the accelerator at times can be compatible and work together with accounting firms. It can further differentiate itself, though, by working with companies too small to garner the attention of larger consultancies.

The accelerator so far has amassed about 11 clients, including local logistics provider Langham, near-east-side printer distributor Cannon IV, and the Greater Indianapolis Chamber of Commerce.

Advisers spend roughly two years with clients to develop growth strategies. In addition, the accelerator's $2 million investment fund provides a way for some clients to fund growth strategies such as marketing or advertising campaigns.

In the case of SaniServ, consultants recommended developing new promotional materials, reorganizing the sales and distribution network, and hosting a national sales event to motivate distributors. Orders for new machines have surged since the September show, the company said.

Butler's plan is to counsel at least 15 companies annually. O'Connor expects the accelerator can build a reputation by word of mouth.

"Companies are spending $30,000 to $40,000 with us," he said. "How do we convince [prospects] of the value? Hopefully, through our clients."

The Lilly Endowment grant will continue to fund the accelerator through 2010. Ultimately, however, it will need to be selfsustaining. To build income, O'Connor is placing the fees it earns in a future fund to gain interest.

The accelerator itself is advised by a panel consisting of 15 professionals. One is Jean Wojtowicz, president of Indianabased Cambridge Capital Management Corp., which operates alternative-financing funds. Providing the type of consulting services typically reserved for larger corporations is critical, she said, particularly in Indiana where smaller companies abound.

Banking vet adds value

For all the potential the accelerator holds, O'Connor and the name recognition he brings may be its greatest asset of all.

O'Connor spent 37 years at Bank One Indiana and, from 1998 until retiring in 2003, served as CEO. One year later, he was appointed interim director and CEO of the Indianapolis Museum of Art, continuing in that role until a permanent replacement, Max Anderson, was named in June 2006. During his tenure, O'Connor oversaw the completion and the opening of the museum's $100 million expansion.

Unclear what lay ahead, O'Connor was encouraged by colleagues to approach Butler President Bobby Fong and former College of Business Administration Dean Dick Fetter, now a faculty member, about the accelerator position.

Such a high-profile personality gives the upstart accelerator an identity, Kidd said.

"No one in the business community knew about it," he said of the accelerator. "How do you make the kind of contacts you need? It's all relationship driven."

O'Connor will remain there at least through the term of the Lilly Endowment grant, he said.

The accelerator temporarily is housed in Butler's Apartment Village that opened in 2006 but will move in August to the Holcomb building, where the College of Business is located.
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