Ally driving toward $100M dream
Owners learn from mistakes of previous employer to create and grow their own logistics company.
Dan Manshaem and Jeff Chidester had a vision early on to build a $100-million company from scratch. Prior to launching Ally Logistics, a Byron Center-based third-party logistics company, in 2012, the two were working together under another logistics outfit.
Working for five years under their previous employer, the two learned a lot of “what not to do” in the logistics world, Manshaem said. He and Chidester disagreed with how their previous employer ran the business and believed they could do better.
“Just a lot of general missteps in business — a lot of missed opportunities. We kind of saw them go through some of the phases that we’re going through (now),” Manshaem said. “And we just feel like we’re much better equipped to handle those.”
But the owners of Ally still look back at their old jobs as a valuable experience, joking that it was their “graduate school” before launching their own company.
Now, their small logistics outfit is on track to break $100 million in revenue within the next five years.
In the formative years of Ally, the two did a lot of work out of their own living spaces, even though they had signed a lease for a small, 800-square-foot office. Manshaem said they made the decision to lease the space just to inspire them to work beyond making ends meet.
“It was actually scarier to sign a two-year lease on an office without any customers than it was to not have a payment,” Manshaem said. “I like the idea of making that commitment because then you’ve got to make money … it’s easy to get complacent.”
Without any customer base, Ally’s original marketing strategy was to search the internet for leads and make cold calls. The group started to pick up steam by gaining a variety of clients, including pallet, food and beverage companies.
“What I always told Jeff is you get good at sales really quickly when you don’t have any money,” Manshaem said. “When your bank account’s starting to dwindle, it gets a little easier to make those calls.”
Six months into starting Ally, Manshaem and Chidester added Brandon Stuk as the third co-owner and the company’s operations manager. Officially, Manshaem serves as CEO of the company, while Chidester is COO.
Ally is a non-asset logistics provider, which Manshaem said means it doesn’t own any trucks. All of the company’s transport comes from subcontractors, anywhere from owner-operators to large national carriers.
Except for two computers they bought for $200 on eBay, Ally had virtually zero capital starting out. The first three to four years were spent laying out the foundation of the company, including establishing the infrastructure, processes and the core group of employees who Manshaem said could round out the company’s different departments and be future leaders.
Ally moved into its current office, a 5,700-square-foot space on 1001 76th St. SW, in 2014, but because of a recent rapid growth trajectory, the team already is outgrowing its space.
The company started to experience serious growth in 2017. Its employee count nearly doubled, going from 17 to 33, and the projected revenue for 2018 is around $25 million to $26 million.
The team signed a lease on an over 20,000-square-foot office space at 1090 36th St. SE, Grand Rapids early in August, and the company plans to move in January 2019. The site is the former location of Steelcase’s headquarters.
“It’s the exact same idea as when we first started,” Manshaem said. “You sign the lease. We’ve got the game plan, and it forces us to execute. We can’t let that space sit there empty because we’re going to be paying for it.”
While Ally forecasts hiring more than 20 new employees next year, the new space will have the capacity to accommodate in excess of 120.
Some of Ally’s major clients are household brands like General Motors, Kraft Foods and Anheuser-Busch.
“Those are the three we name drop,” Manshaem said. “Really, we have a big variety of different types of clients, from mom-and-pop up to the big guys.”
While the company now specializes in transportation and logistics for some big-name companies, it still relies on its traditional methods of cold calling and actively pursuing clients on top of growth within its current clientele, Manshaem said.
Although the owners have considered hiring their own drivers and buying their own vehicles later on, Manshaem said it’s not a priority for Ally, and it’s more important for the company to focus on its own strengths.
“We’ve seen so many big success stories within our industry that have the most success by focusing on their core competency,” he said. “We have a lot of smaller hurdles we can overcome to become a lot more profitable before I think that would make sense.”
Ally also has laid out its goal to finally become a $100-million company within the next five years. Manshaem said leadership would accomplish it partly through the recruiting and retention of high-quality employees.
Ally also intends to focus more on emerging technologies in the coming years. Manshaem said new transportation technologies will help the company improve operational efficiency and customer service, as well as set it apart from the competition.
“There is always this looming threat of, ‘When is Amazon going to try to do what we do?’” he said. “So, we want to find more ways to innovate instead of just doing what other brokers do.”
In response to Amazon’s recently revealed plans to develop a warehousing and distribution center in Caledonia, Manshaem said, barring the “general looming threat” of Amazon getting involved in its market, Ally doesn’t really perceive it as having an impact on its business.
“Outside of personal — how it’s going to be nice to get same-day delivery on stuff — I don’t really see, from a business standpoint, how it’s going to be a threat, or an asset or anything super significant to us,” Manshaem said.