Never a dull moment - Westfair Communications

Three years ago, Eric Hargrove was kind of at loose ends, casting around for a business to buy or for one to start himself. “I wasn”™t certain about exactly what kind of business,” he said. “It had to be pretty small. I only had so much money at that point.”

One day a friend of Hargrove”™s parents told them he lived next door to a guy who “had some kind of weird knife business he wanted to sell, and maybe I would be interested in talking to him.” It was all very strange. His parents, the family friend and the business owner all lived on the same street in New Canaan where Hargrove grew up. And he couldn”™t make heads or tails out of the business.

“I met with him and to be honest, I went away from the meeting not having the slightest idea of what the business was all about,” Hargrove said. “Something about knife sharpening. What is that?”

He was intrigued, however, and met the owner ”“ Jim Mase ”“ a few more times until he began to understand what the business did, he said. “It was just so interesting. I didn”™t know a business like this existed.” Not only that, but “the fundamentals were good. It had a great basic business model and a good cash flow. I could look at the fundamentals on paper and could see it was a good business.”

He wound up buying the business, R.J. Mase L.L.C., based in South Norwalk. “Basically, we sharpen knives,” he said. “It”™s just bizarre. We sharpen knives for any professional who prepares food for a living ”“ in restaurants, corporate cafeterias, grocery stores, butcher shops, caterers, anyone in professional food service.”

That may not sound like much of a business, sharpening knives for chefs and butchers. But Hargrove”™s company has “4,000 to 5,000 customers” throughout New England, Westchester County, N.Y., Manhattan and New Jersey. It employs 43 people, including 17 who sharpen tens of thousands of knives a week, 18 van drivers making deliveries and picking up dull knives each day, and a handful of technicians who service, repair and maintain “the kind of equipment you find in the meat rooms of butchers shops ”“ band saw machines or the grinders that make hamburger.” The company also has a satellite office outside Boston.

In fact, what Hargrove stumbled upon was “the third- or fourth-biggest company of our kind in the country,” he said. “Most of these grinding companies are two or three or five people.”

No career path

Hargrove”™s circuitous route to knife sharpening began in New Canaan, where he grew up. He attended the University of Virginia in Charlottesville (not Virginia Tech), where he earned a bachelor of arts degree in English in 1993. “I was not the most career-focused at that time,” he said of the degree. “It was the subject matter I enjoyed the most.”

After graduation, he worked for the Princeton Review for four years in an entry-level job running offices in Westport, Ann Arbor, Mich., and Palo Alto, Calif., for the company that prepares students for standardized tests. “In the late ”˜90s, I had business school on the brain, and applied to a jillion schools” to study for his MBA. “I wasn”™t really certain at that point about why I was doing this. I still didn”™t have a very definitive career path I wanted to follow, but I knew an MBA would give me some flexibility.”

He attended Vanderbilt University in Nashville, Tenn., earning an MBA in marketing in 2000. “I went to work for a couple of years at MemberWorks in Stamford,” working on the “Internet side of their acquisition efforts,” he said. “People were going crazy with Internet businesses, and a lot of MBAs were going there because you could make an enormous amount of money.”

But Hargrove was feeling some entrepreneurial tugs. “The company was fine, but it was kind of large with a traditional hierarchy, and that wasn”™t for me. I don”™t thrive in that atmosphere, so I began casting around for a business to buy or start myself.”

A little bit of art

The company Hargrove bought from Jim Mase was started by Mase”™s father in his garage in the Bronx some 30 years ago, moving to South Norwalk about 20 years ago, where it outgrew its mom-and-pop origins in a 10,000-square-foot facility. “The scale is pretty big for our industry,” Hargrove said.

The business model is the same for R.J. Mase as it is for a mom-and-pop grinding operation. “We have drivers in vans on the road every day running certain routes,” he said. “They pick up all the dull knives and drop off sharpened knives on a weekly or bi-weekly basis. The great thing about his business is that it”™s very manageable.”

Those knives aren”™t owned by the chefs or butchers, but by the grinding company. “We probably buy 25,000 knives a year from a company that sells to companies like us,” he said. “The knives aren”™t what you”™d find in Williams-Sonoma,” but “decent quality” that professional food handlers can wear out or chip or break without worry.

Customers of the sharpening service want convenience, he said. “Sharpening knives is time-consuming and there”™s a little bit of art to it. If I”™m a chef, I might not want my guy spending an hour or two a week to sharpen knives when I can get a knife service to do it for me.”

And the quality of the knives is not a problem. “There are some chefs who will not use our service because they may have a fancy set of knives they got when they graduated from culinary school, or they may want to train their guys because they think knowing how to sharpen knives is one of the things a chef should know,” he said. “But if I”™m a chef with 12 different people preparing food, it doesn”™t make any sense to buy a $100 knife to chop potatoes.”

One vendor

“The great thing about this business,” Hargrove said, “is that outside the general turnover in the restaurant business, there”™s not a lot of churn. And if a restaurant goes out of business, there”™s probably going to be another restaurant opening up there in four months.”

And large companies like restaurant chains and supermarkets and companies that run corporate and college cafeterias are looking for a single-source grinding company to service all its locations in a region “so that all their units ”“ and there are hundreds of them ”“ can be serviced by a single vendor.” That lets the company write one check, not 50, he said. And “since we are larger than most of the other companies, we can satisfy the demand of a Stop & Shop that wants to use one vendor.”

As a result, the industry is undergoing consolidation as mom-and-pops and smaller companies deal with changing market conditions. Last September, for example, Hargrove acquired Northeast Cutlery in Meriden, picking up its 1,000 customers and its van drivers, but not its sharpeners. “We could easily handle the extra volume here,” he said.

The privately held company has revenues of about $3.5 million, he said. “In our business, you make money $2 at a time, and unless you make an acquisition, it”™s rare to grow like 20 percent a year. But it”™s very hard to shrink 20 percent a year, too. There”™s not a lot of customer turnover.”