6/29/2012: http://www.bizjournals.com/pittsburgh/print-edition/2012/06/29/abg-capital-finds-right-focus-ownership.html
Jeff Tapolci’s family business had survived two devastating events a decade ago, only to be nearly undone by its own survival strategy of diversification.
Tapolci’s father, Gerard, the company’s founder, died of lung cancer in 2002. At the same time, the economic downturn of 2001-2002 stymied prospects for the original business, Computer Comfort, an information technology service provider.
The remaining Tapolcis — Jeff, his brother Jason and mother Judy — decided to build on some related business capabilities.
“By 2004, we were producing so much cash that we were able to rebuild credit — everyone was paid off,” Tapolci said. “My brother and I wanted to conquer the world. But even though we were a family business, all the owners were fighting over what to do with the money.”
The company tried consultants, but what it really needed was an outsider to unravel the complications so Tapolci could focus and realize his vision.
“We hired Ron Eggert as CFO in 2006,” Tapolci said. “He put the final piece to the puzzle; I needed to go in a new direction.”
Eggert pared the ownership ranks from seven to four; the process involved buying out Tapolci’s mother, enabling her to retire. Computer Comfort was spun out.
But the biggest change was shaking up the way the business was structured.
“Everyone wanted to run their own business and we needed to have a mechanism to allow that,” Tapolci said.
So, in 2007, Eggert created a holding company, ABG Capital Inc., with Tapolci as CEO. ABG Capital is a business management company that provides back-office services to sub-corporations that were subsequently formed.
Dan Ravenstahl, a cousin of Pittsburgh Mayor Luke Ravenstahl, is president of GlobalPOPs, a wholesale dial-up Internet services firm, and End User Services, a retail Internet services provider. GlobalPOPs drove ABG’s revenue for four years, providing a nest egg so the other businesses could be developed and nurtured.
Jason Tapolci is president of VoIP Innovations, a wholesale provider of voice-over-IP telephone services.
A fourth sub-corporation, InspiraFS, an idea-stage start-up ABG acquired in 2008, provides comprehensive IRA rollover and retirement plan termination services to the retirement industry. Eggert recently assumed leadership.
By consolidating services such as accounting, legal, information technology and software development, staff, administration and human resources, ABG is able to increase efficiency and eliminate redundancies, Tapolci said.
That business structure can be a “valuable diversification strategy,” said Chris Cynkar, an entrepreneur and adjunct professor at Carnegie Mellon University’s Tepper School of Business.
“Each individual business unit is going to be able to focus on its customers and products without having to occupy time dealing with the back-office functions like accounting, payroll and HR,” he said. “In that sense, it gives that operating business a narrower focus and greater likelihood of success.”
Now just three of the four ABG owners are on site. The Tapolci brothers own 90 percent of the business. The remainder is held by Ravenstahl and Adam Scott, who leads Computer Comfort, based in McMurray.
Over the past five years, employment has grown from 25 to 43. Half provide back-office services. The remainder are divided among the four sub-corporations.
Revenue in 2011 was $13.7 million. Tapolci said ABG is on track to top $20 million this year.
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