THE ENTREPRENEURS

Shifting gears: from NYC systems analyst to Verona body shop owner


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About a year ago, Mike Sullivan was working in the New York City office of PricewaterhouseCoopers, making $165,000 a year redesigning accounting and reporting systems for a large hedge fund. He was living in a one-bedroom, $5,900-a-month Manhattan apartment paid for by the accounting and consulting firm.

So his father's reaction when the 28-year-old Canevin High School grad told him he wanted to buy an auto body shop was only natural.

" 'Have you lost your mind?' " Mr. Sullivan remembers his father asking.

"I talked about it with my parents, who were scared. They couldn't believe the kind of money I was willing to throw into this," he recalled.

Despite the concerns, Mr. Sullivan purchased a Verona auto body shop for $2.1 million in March and renamed it Flagship Collision. Part of his decision was based on his upbringing. His grandfather ran a drywall business that his father took over, and his mother started a pet funeral home and cremation business in Bridgeville.

"I thought if my grandfather and mother could do it, I could do it," said Mr. Sullivan, who earned a degree in finance and systems management from Duquesne University in 2007.

He chose the auto body shop because it was related to his long-time interest in cars. "I knew I wanted to do something I liked all the time," he said.

Mr. Sullivan looked for businesses that were for sale online, identifying one collision shop in Brooklyn, and two in his hometown.

"The shop in Brooklyn I strongly suspected was mob related, so I left that one alone," he said.

Of the two shops in Pittsburgh, the one on Sandy Creek Road owned by Bruce Conley offered the best prospects. Mr. Sullivan said the one-man shop had built up a solid book of business by word of mouth. Mr. Conley also had established relationships with insurance companies, which provided the bulk of the work.

Mr. Sullivan believed that if he did more advertising and hired more support staff to drum up business and handle administrative chores, he could significantly increase revenue without investing much in new equipment.

"The financials were phenomenal," he said.

Unfortunately, the first two Pittsburgh banks Mr. Sullivan approached to finance the deal did not feel that way. He said one flatly rejected his application and the other was reluctant to provide a loan "because of my lack of experience in the auto industry."

With the help of a Scottsdale, Ariz., business broker, Mr. Sullivan found West Town Savings Bank in suburban Chicago, which provided him with a Small Business Administration loan. Mr. Conley also agreed to finance $500,000 of the purchase price with a five-year loan at 4.5 percent interest.

One of Mr. Sullivan's first decisions was to hire Shawn Hagewood, a 34-year-old marketing and business development specialist he had met while working with Deloitte in Dallas. Mr. Hagewood produced a logo and website for Flagship and got the business listed on Angie's List, Yelp and other online consumer sites. He also revamped Flagship's reception area, furnishing it with comfortable furniture and a television, magazines that catered to women as well as men, and a coffee bar and bottled water.

Mr. Sullivan said the remodeling was based on one of the best pieces of advice he received as he was researching and buying the business: "Run the place as if it were someplace you'd send your 16-year-old daughter to by herself."

Flagship has not grown as fast as Mr. Sullivan thought it would. Mr. Conley, who was supposed to stay with the company for at least a six-month transition period, left after one week. According to a lawsuit Mr. Sullivan filed in Allegheny County Common Pleas Court in September, Mr. Conley made disparaging remarks to insurance companies about Mr. Sullivan, which caused Flagship's business to dry up.

Mr. Sullivan has a photo on his desk of an empty order book on May 17 to remind him of that day. A handwritten sign that reads "never again" has been photo-shopped into the photo.

"That was a Friday afternoon and we didn't have a single car in the shop," Mr. Sullivan recalled.

William Gagliardino, Mr. Conley's attorney, declined to comment.

Relationships with the insurance companies have been restored and business has begun picking up, Mr. Sullivan said. The shop is now fixing 22 to 25 cars a week, about what it was processing under the former owner. Mr. Sullivan plans on hiring one or two new workers to increase the output.

He has been frustrated that things have not moved as far as he planned.

"I'm 28. I think everything happens instantly," Mr. Sullivan said.

Although he's confident he will make Flagship fly, there is a backup plan that includes his mom.

"Among my other talents, I'm certified to cremate pets. So if this doesn't work out, I have a second calling," he said.

Len Boselovic: lboselovic@post-gazette.com or 412-263-1941.


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