Proforma Prospers Through Empowerment
For Greg Muzzillo, building a network meant more sales would come.
When asked what it is that makes Cleveland-based Proforma such a success, Founder and co-CEO Greg Muzzillo was quick to deflect the attention from himself. Having created a company based on teamwork and camaraderie, Muzzillo isn't one to forget those who have worked to build Proforma into a major player within the print and promotional products industry. In fact, Muzzillo is quoted as saying, "Proforma's success story is not that of an individual, but rather the success of literally hundreds of great people who are the Proforma family."
Such a philosophy is credited for the more than $200 million in distributor sales Proforma reached this past year and the drive to obtain more than $250 million in sales next year. It is this same philosophy that Muzzillo believes will result in Proforma being one of the first distributors to reach $1 billion in annual sales.
While Proforma has been working as a team for at least 15 years, this was not the case 24 years ago when the company was originally conceived. "I started Proforma as a distributor just one year after I graduated from college," said Muzzillo. "However, the idea for Proforma's current growth—teaming with fellow owners of distributorships—wasn't conceived until the mid '80s."
Actually, Proforma was growing significantly during the early 1980s but was not as profitable as Muzzillo wished, despite the fact that it was recognized for its rapid growth by Inc. Magazine for three years running. Even still, Muzzillo longed for something more and knew that many other distributors felt the same.
"There were hundreds of distributors in northern Ohio and thousands of distributors in North America handling duplicated expenses. Each of these had its own marketing programs and billing, collection and ac-counting systems, as well as software, hardware and computer operators," said Muzzillo. "These concerns left distributors with little time to do what they do best—selling."
Muzzillo believed that if Proforma could find a way for the right distributors to join together to share these exorbitant expenses while gaining more time to grow sales, then they could make more money and enjoy their businesses more. "After a year of investigations and discussions with many fellow distributors and other advisors, we realized that creating a network of independent business owners was the best model to accomplish this," said Muzzillo.
As a result, Proforma created its current structure—a network of independent distributors who have chosen to work together to create marketing clout and strong supplier relationships, and to share the costs of burdensome overhead while still owning and controlling their own independent businesses.
As it stands, Proforma's network includes 600 independent member distributors that are organized in eight geographical regions. Those distributors elect representatives to the Owners Advisory Council (OAC)—a group that helps create and manage the strategies and programs of the network. The OAC also oversees the marketing fund and marketing strategies.
In addition, Proforma is supported by many development coaches—a group consisting of successful Proforma owners located throughout North America. They assist in the work of the Cleveland Support Center in developing the right number of owners and then helping them develop their own businesses.
The owners and development coaches are sustained by more than 100 support center employees who are managed by the Proforma executive committee.
Build and They Will Come
To clarify how the system works, Proforma welcomes new members to its network but does not engage in any acquisitions of its own. However, it does employ a merger and acquisition support team to help Proforma owners conduct their own acquisitions.
Muzzillo reported that over the past three years his company has helped its owners close approximately 100 acquisitions, representing more than $30 million in sales.
For Proforma, such activity is just part of its major plan. "Our mission is to help our owners' dreams come true," said Muzzillo. "Most distributors did not necessarily get into this business because they dreamed of selling the products and services we offer, they got into their own businesses because they had dreams."
Those dreams, he noted, include providing for a family, living a comfortable lifestyle and building equity for retirement.
Muzzillo explained that just as Proforma helps its owners' dreams come true, they, themselves, refer and recommend their friends to become members of the company, too.
"We've averaged that one-third of our new owners joined us through referrals over the past three years," said Muzzillo. "This year through April, 63 percent of new owners came via referrals."
Reviewing Proforma's progress over the past year, Muzzillo said his company's success can be recognized by the addition of more than 100 distributorships. Twelve of those distributors report annual sales between $1 million and $2 million per year, seven are listed as having $2 million to $5 million in sales per year, two pull in between $5 million and $8 million per year, while one distributorship is quoted as having $8 million per year.
Proforma's success is also attributed to its new technology. Within the past year alone, the company has introduced three major technological advancements—proSMART, ProOffice and ProOMS.
ProSMART (Professional Sales, Marketing and Relationship Tool) is Proforma's proprietary automated selling system that helps its owners identify new prospects, grow new customers and turn customers into clients.
ProOffice is the company's proprietary software that serves as the digital dashboard to help owners automate all aspects of their businesses from quote to cash.
ProOMS (Proforma Owner Information Management System) is the single source of owner information. "By consolidating the various sources of owner information into a single repository," said Muzzillo, "we expect to reduce time spent in maintaining more accurate information."
By providing technology, a member network and business support groups, Proforma has managed to create the right amount of business savvy to maintain a profitable distributorship.
It is this mix that Muzzillo is proud to attribute to his employees and the Proforma network.
"Proforma is a top distributor first because of its great people, owners, development coaches, staff and preferred limited partner suppliers," said Muzzillo. "It is also a top distributor because its concept of distributors teaming up to create marketing clout, strengthen supplier relationships and share the costs of burdensome overhead, while still owning and controlling their independent businesses, is very sensible. It's one in which an increasing number of successful distributors are joining to further enhance their own success."
By Sharon R. Cole
The Key Players
According to Greg Muzzillo, founder of Proforma, Cleveland, a winning company cannot be built by one person alone. Below is a list of some
of the leaders who play key roles in promoting Proforma's success.
• Michael Johnson, president of the OAC and owner of Proforma Pinnacle. He has been a member of Proforma's network for six years.
• Will Quinn, president of the Development Advisory Council and owner of Proforma Upstate Business Service, has been a network member for 11 years.
• John Campbell, chief owner development officer, has been with the network for 16 years. He is responsible for recruiting, qualifying and admitting new distributors.
• Todd Carpenter, chief technology officer, is responsible for the development and maintenance of Proforma's systems, including ProSMART, ProOffice, ProOMS, Company Stores and Proforma's enterprise resource planning system.
• Alan Chippindale, president, has been with Proforma for 15 years and works with prospective new members with sales of more than $1 million.
• Mike Puhala, controller, is re-sponsible for accounting, reporting and banking relationships.
• Phil Rigney, chief business development officer, helps develop strategies and support systems to help owners grow their businesses.
• Terry Tibbits, chief supplier relationship officer, has been with Proforma for 11 years. He develops relations and maximizes the value of Proforma's Preferred Limited Partner Network of manufacturers.
• Nancy Valent, chief marketing officer, is responsible for developing the strategic marketing direction for the owners and creating a cohesive marketing structure for all critical areas of the company.
• Brian Smith, chief operating officer, has been with Proforma for six years and helps to oversee day-to-day operations of the company and coordination of the support center executive committee.
• Vera Muzzillo, wife of Greg Muzzillo and co-CEO, oversees the financial, accounting, reporting, credit, technology and banking operations.
• Greg Muzzillo, founder and co-CEO, oversees the new owner recruitment and growth, assisting owners in developing their businesses, marketing and supplier relationships. He also coordinates the relationships with the OAC, the Developmental Advisory Council and between all development coaches.
For information on Proforma, visit Proforma.