Unexpected layoff led to burgeoning Eagan fleet repair firm

"I was blindsided," said Gary Dalton, whose job was eliminated in May 2008 as general manager of a fleet vehicle maintenance service started as a fundraiser by a Dakota County nonprofit. "I had no clue it was coming."

One thing he was sure of: With three children, two of them at or near college age, he had to do something fast.

Just three months later, in August 2008, Dalton put every asset he had on the line to start Ultimate Fleet Repair, an Eagan company that specializes in maintenance and repair services for commercial vehicle fleets.

He started with just two employees and a promise to adjust his schedule to meet the needs of his clients. The result is "exceptional service," said one of his clients, Mike Lins, logistics and safety manager at Gresser Co. Inc., an Eagan concrete and masonry contractor.

And the payoff is a business that, in little more than two years, has grown to 16 employees and a revenue stream that topped $800,000 in 2009 and is on track to reach $1.2 million this year.

The way I figure it, if we could find a few million Gary Daltons and lay them all off, we could solve the unemployment problem forthwith.

The key is service, Lins said: "In Gresser's line of business, our trucks are tightly scheduled and it's difficult to take them off-line for maintenance. Gary and his team will work on our trucks whenever we can get the trucks to them, be it 7 p.m. or 6 a.m."

Despite concerns about lost income, Dalton, 47, refused his former employer's offer of a $5,000 stipend in return for signing a non-compete agreement. Instead, he raided his retirement accounts for $30,000 and obtained a $120,000 SBA loan to start the company, which grew rapidly into a thriving business -- and a nagging financial headache.

The problem: Accounts receivable that grew quickly to five- and six-figure balances presented a daunting challenge for a company with limited resources.

A deal Dalton cut with a White Bear Lake auto dealer to pay for parts as they're used freed up about $20,000 in working capital, he figures. Still, by the end of 2008 he had emptied his savings and retirement accounts and maxed out his credit cards to stay ahead.

Waiting for checks

The difficulties only multiplied as the economy slipped into deep recession. One client went bankrupt, owing him $5,100, and another large customer cut back significantly on service.

The pressure has eased a bit in recent weeks with a second SBA loan, this one for $40,000. Nonetheless, Dalton still pays close attention to the daily mail deliveries: "We don't want her [the carrier] to think we don't love her," he joked.

But seriously: "People say we're doing good, the bank says we're doing good, but I'm not sure what good is," Dalton said. "I'm still afraid of failure."

And, given what's at stake, "failure is not an option," he added.

Dalton's company is based on a business model he helped develop at Dakota Area Resource Transportation Service (DARTS), which specialized in repair and maintenance of vehicles operated by other Twin Cities nonprofits.

A few of those clients followed him to Ultimate Fleet Repair, but he quickly broadened his focus to include all commercial fleets. His client list now includes the sizable likes of Midwest Coca-Cola, the St. Paul Park Fire Department and Ryder Truck Leasing, not to mention a few buses and an armored car fleet.

Dalton does little advertising. When he's had the time he's gone "knocking on doors, digging for customers," but mainly he trusts that word-of-mouth about the company's service focus will keep the business growing.

Dalton is doing business under the Ultimate Fleet Repair moniker, but that's not the corporate name for the company he founded two years ago. No, the official name is "3Kids and Us LLC."

"Every time I do anything, it's for the family," Dalton said. "The name keeps me focused."