Office supply dealer thriving

Ubiquitous mega-store office supply chains that began popping up in city strip malls during the early 1990s put the kibosh on many independent dealers. Indianapolis Office Supply is an exception.

The 63-year-old company that originally sold janitorial and restaurant supplies combated the competition

That strategy, among other moves, helped IOS- reach revenue in 2000 of $2.8 million. And during the five-year period from 1996 to 2000, sales increased 162 percent, impressive enough to rank the company 84th in Inc. magazine's fourth Inner City 100 list. The rankings appear in the publication's May issue.

"We just weren't competitive. They really put the independent dealer at a disadvantage," IOS President Bob Bruce said of the stripmall competition. "We had to create a niche in dataprocessing supplies and furniture sales." To qualify for the honor, companies must be headquartered, or have majority operations, in economically distressed urban areas. IOS is on Sherman Drive on the near-east side.

Pac-Van on the near-south side also made the list, placing 35th. The lessor and seller of mobile offices and storage units reached five-year sales growth of 462 percent. Unlike IOS, Pac-Van has received prior national attention from the magazine. Brothers Matthew, Brent and Scott Claymon have guided Pac-Van onto the Inner City 100 list three times, topping it in 1999. Pac-Van twice has been a member of the Inc. 500 list of the fastestgrowing private companies in the nation.

"Our objective was to go out and prove that companies can thrive in the inner city," Pac-Van Principal Matthew Claymon said. "We have found that our business model works well when we are centrally located in a community."

The two, along with fellow Indiana companies Jack Laurie Commercial Floors in Fort Wayne (No. 21) and South Bend Chocolate Co. (No. 45), were selected from a pool of 4,250 nominees from 191 cities.

Pac-Van tallied revenue in 2000 of $31.8 million, compared with $2.8 million during the same year for IOS. Intense competition has caused basic office supply sales to drop from a high of 75 percent of the store's revenue to 40 percent. Sales of office furniture and computer supplies have compensated for the loss, Bruce said.

Bruce graduated from Indiana University in 1956 with a bachelor of science degree and is a veteran of the office supplies industry. He bought IOS in 1979 when it was located in Fountain Square. Bruce moved operations to the current location on Sherman Drive in 1995 when the company started building on its $1 million annual revenue.

Bruce credits a renewed focus on service that includes sameor next-day delivery for the store's ability to thrive. Bruce counts among his clients small businesses up to corporations and universities such as Steak n Shake Inc. and IUPUI.

Like the Claymons, Bruce has no regrets about locating in an inner-city area.

"With the support of the [mayoral] administrations, both Republican and Democrat, I feel good about the inner city, especially when you look around at a lot of metropolitan areas," Bruce said. "I don't feel we need any more security than business locations in the suburbs."

More company owners are beginning to share Bruce's feelings, according to Pamela King, executive director of the Urban Enterprise Association Inc. The association provides assistance such as accounting and marketing to businesses located in the city's enterprise zone. IOS is just south of the zone.

"We are seeing a lot more activity," King said. "There's been a great deal of interest for some businesses to come back to an urban area."

Part of that interest stems from the construction of the new Keystone Enterprise Park at Interstate 70 and Keystone Avenue, where a formal groundbreaking will be conducted June 7. The industrial park is expected to generate 1,000 new jobs and boost tax revenue by $50 million within the next decade.

Indianapolis Chamber of Commerce President John Myrland lauded IOS and Pac-Van for their success and said his organization has undertaken new efforts to bring business opportunities to blighted areas.

"We're very pleased when businesses decide to stay in an inner-city neighborhood or move into an inner-city neighborhood," Myrland said. "A new focus for us, in working with the city, is to encourage private business investment in inner-city areas. Preserving and bringing back those neighborhoods is very important to us."

The Inner City 100 is compiled by Inc. magazine and the Initiative for a Competitive Inner City, a national not-for-profit organization founded in 1994 by Harvard Business School Professor Michael E. Porter.

To be eligible, companies must be independently owned, must have 10 or more employees and must have a five-year operating sales history that includes at least six months of sales revenue in 1996, an increase in 2000 sales over 1999 sales, sales of at least $150,000 in 1996, and sales of at least $1 million in 2000.