Flying Back from the Brink

With American Airlines being the most recent high-profile bankruptcy, one has to ask what you do with a company that still has a market that needs to be served but has been driven to the brink. 

This brings us to number 40 on the 2011 Inner City 100, Aztec Promotional Group, a promotional licensing company (t-shirts, pens, mousepads, etc.) based out of Austin, Texas. It was originally owned by Alejandro Vazquez with whom its current CEO, Patti Wistanley, became familiar through her son, a student at the University of Texas.  At the time, the business was in serious decline and Vasquez was looking to get rid of it.  Patti and her family had an operation where they took over companies that were in trouble (often in bankruptcy); they were appointed by the courts over the management of the Aztec when it filed for bankruptcy in 2004.  Patti, however, bought the company with the hope of turning it into a high-growth firm that, in 2009, did $1.8 million in revenues.

Aztec’s location near University of Texas at Austin—one of the largest universities in the United States—has proved beneficial in turning the company around. The company develops promotional materials for the University, as well as many of the student organizations affiliated with the University.  The majority of the company’s business comes from universities looking to print items such as championship t-shirts or promotional items.  As Aztec adds more universities to their wingspan, they will be able to add more and more clients. 

Patti has found the procurement networks for the universities to be difficult to navigate; she believes you have to know the right person to gain some sort of access.  The progression is further drawn out when the company has to explain its supply chain processes and unique competitive advantages. These are challenges she was ready and willing to combat.

Getting a bankrupt company back to a point of sustainability was going to be quite an obstacle.  The biggest challenges included re-building the company’s reputation and showing customers that they could follow through on jobs despite the company’s financial circumstances.  As market conditions have evolved over the last few years, organizations have tightened budgets.  Companies now shop around more than ever before.

Another challenge was upgrading the equipment that had started to deteriorate. Patti and her team had to ensure the equipment would hold up long enough to fulfill orders and retain business.

Both Patti’s husband and sons are technology gurus, and she firmly believed that she could take their interest and apply it to making a high quality product faster and more efficiently.  The business had a history of previous success under the old regime, but in order for it to become high-growth, Patti thought Aztec needed to optimize its operations.  To do so, her sons helped developed new computer software. This software helped streamline their processes, especially their art approval system.  Patti said, “No one else has anything like it.”

Additionally, Patti made sure to diversify the clientele to mitigate risk. No single Aztec client makes up more than about three to four percent of the business.  As a result, she thinks the company is well-positioned to take advantage of a rebound once the economy begins a solid recovery.

Patti plans to continue growing the business through sound strategy, efficient operations and mergers and acquisitions.  She believes that in order to maximize Aztec’s potential she must hire additional sales representatives, especially if she wants to scale her business to the size of her competitors—many of which gross $50-60 million annually.  Eventually, she’d like to pass the business on to her sons, a simple transition given her sons’ involvement in the company’s growth and development.

Despite the aforementioned challenges, Patti sees the opportunities that result from working within the inner city. She hires locally and invests in each employee by offering inordinate amounts of cross-training. This helps employees work across departments; it allows employees to have a comprehensive understanding of the business operations and makes processes more streamlined.

By locating near the university, Patti can offer internships to students. She can also give back to the community by offering pro bono services to universities and nonprofit organizations. She even has a sales agreement with the East Side Community Connection, which picks up her extra stock and resells it – with all profits donated to the local homeless shelter.

Not bad for a company that was once on the brink of total collapse!

Did you take over a seriously distressed firm to not only bring it back from the brink, but also make it a sustainably profitable operation?  Tell us your story below.

BY Alex Rodriguez on December 2nd, 2011

TAGS: small business | jobs | ic100 | entrepreneur