Launched in the 1960s by Egyptian-born Arto Alajian, ARTO Brick started out hand-making and installing custom ceramic tiles and brick veneers for residential use. When the energy crisis of the 1970s made producing ceramics difficult, Arto developed innovative concrete tiles whose luxury appearance elevated the company’s prestige. Arto’s sons, Vod and Armen, grew up working in the business, and in the 1990s Armen expanded the business still further by switching from B2C sales and installation to a B2B model. Between 2000 and 2010, sales nearly tripled and in 2005, with his sons at the helm, Arto moved to an advisory role as Chairman of the Board.
In 2008, two major blows struck ARTO Brick: the Great Recession hit, and Arto suffered a severe stroke. “I’ve been through a lot of recessions, and in past recessions, we had grown,” Armen says. “The rich spend more in a downturn, and in other recessions, people could buy homes cheap and flip them. But this recession involved panic.” With even upscale customers closing their pocketbooks, and their father no longer able to advise them, the brothers wanted to do everything possible to control costs and keep the company on the right path. Seeking a new sounding board, Armen visited the Small Business Development Center hosted by El Camino College.
Business Advisor Starleen Van Buren saw ARTO Brick’s potential for growth and encouraged Armen to apply for the Goldman Sachs 10,000 Small Businesses program, offered in partnership with the SBDC. The hands-on, 11-week course provides one-on-one advice and intensive classes that teach leadership and management skills. “I learned about everything from top-line sales to bottom-line metrics and dealing with employees,” says Armen. He also connected with a powerful network of small business owners and experts.
Know Where You’re Going
Despite 20-plus years in the family business, Armen viewed himself more as a steward than a leader. “The first day in class, they asked us, ‘Where are you going?’ We had to decide if we were going to die in the business, grow it or sell it,” Armen recalls. “By choosing a destination, we could make a road map to get there.”
To graduate from the program, Armen had to write a business plan and give a three-minute presentation about it to his classmates and teachers. “We’d never had a business plan before,” he says, “and presenting it to people in a short, concise way was new.” Tough questions from the audience helped him fine-tune his goals.
Expand Your Horizons
Vod and Armen agreed the business had to grow in order to survive. “We needed more products, more customers and more distribution [channels],” Armen says. The Goldman Sachs program showed him how to use metrics to set goals and measure results, so he could see exactly how and when acquiring more dealers would pay off. ARTO Brick already had a strong network of Southern California distributors; now the company’s salespeople began reaching out to tile stores, building yards and other distributors nationwide.
The Goldman Sachs program expanded Armen’s horizons in other ways, too. During the course, the opportunity arose for ARTO Brick to inexpensively acquire two vendors; one makes clay pavers and the other, high-end decorative tiles. “[Goldman Sachs] gave me the confidence to pursue [the purchase],” says Armen.
Hone Your Niche
Arto’s handmade tiles, unique use of cement and attention to craftsmanship had made ARTO Brick a luxury brand, but some of the company’s local distributors didn’t reflect that image. The Goldman Sachs program showed Armen the importance of consistent branding. “We realized we can’t use discount stores [as distributors] because they don’t see the value in costly tile,” he says. “We also changed some of our display materials and our brochure [to reflect the luxury brand].”
Learn From Others
One of the most valuable aspects of Goldman Sachs program was the chance to interact with and learn from other small business owners facing similar challenges. “In the past, I didn’t have peers to talk to,” Armen says. “This program put me in a room with 19 different people who also had to make payroll.” Talking to other entrepreneurs helped calm his worries. “There’s comfort in numbers, and talking to someone in worse shape than you–or in better shape than you–gives you confidence.”
Today ARTO Brick sells a full line of custom ceramics, tiles and hand-painted murals, along with its signature concrete products. Since Armen completed the course, sales have doubled, and the company has expanded from 28 employees and 100 regional dealers to 72 employees and 400 dealers nationwide. With finances firmly on track, in 2013 ARTO Brick purchased a third building for its Gardena campus.
Armen still relies on classmates and instructors from the Goldman Sachs program as sounding boards for new ideas. Short-term objectives include continuing to develop innovative products, improve administrative efficiency and expand the distributor network. The brothers aim to have 2,000 dealers throughout 50 states by the end of 2017.
Their long-term goal, Armen says, is to build a “bench” of qualified employees to take over the company some day. Building on the foundations laid by Arto, who passed away in 2014, the brothers are honoring their father’s legacy in a way he would surely approve.
“[The Goldman Sachs 10,000 Small Businesses program] provided workshops and learning on everything from topline sales to bottom-line metrics and dealing with employees. I call it a mini-MBA in how to grow.” –Armen Alajian, General Manager/President, ARTO Brick and California Pavers