Young Company, Big Plans: ATIS Elevator Inspections
Industry veteran J.A. Marchack discusses ATIS Elevator Inspections’ strategy to expand its U.S. footprint, particularly through acquisitions.
A wholly owned subsidiary of American Testing and Inspection Services (ATIS) in St. Louis, ATIS Elevator Inspections is less than two years old. It was founded in January 2013 by Wayne “Chip” Smith, III, son of longtime National Elevator Inspection Services, Inc. (NEIS) Chairman Wayne Smith. In February 2014, he named J.A. Marchack president and CEO of the subsidiary (ELEVATOR WORLD, April 2014), with plans to triple its workforce. Marchack’s experience in building a major elevator-inspection business and developing numerous U.S. third-party inspection systems makes him the perfect choice to guide the growth of ATIS, according to Chip Smith, who worked under Marchack at NEIS. Here, Marchack (JM) speaks with EW about the company and its plans.
EW: Tell me about ATIS Elevator Inspections’ founding.
JM: Industry changes have been making it increasingly important to have a national presence with multijurisdictional expertise, something very few firms possess. Chip realized this trend, coupled with the demographics of owners, would drive significant acquisition opportunities for a company with the right values and sufficient capital. As stated in its mission and values statement, the company was founded on American ideals with the goal of being the best inspection company by empowering employees to provide effective services with professionalism and integrity.
EW: Why are ATIS and ATIS Elevator Inspections separate entities?
JM: The parent company, ATIS, is set up to expand into other service verticals within the broader testing, inspection and certification industry. My position is with ATIS Elevator Inspections, which simply does safety inspection and test witnessing for elevators, escalators, moving walks, lifts and other conveyances.
EW: What have you found is the most effective way to find and recruit QEIs?
JM: Hands down, word of mouth and reputation have been instrumental in ATIS Elevator Inspections’ recruiting efforts. While not a direct corollary, Chip Smith has benefitted from the reputation of his father and of the 17-plus years his father served as NEIS chairman. Like in all service businesses, our people are our business. I’ve known Chip Smith and his family for more than 20 years, and they all know the value in treating people well. We strive to hire the best people who unequivocally share the company’s values and want to help advance our mission of being the best.
The International Union of Elevator Constructors is a great source of QEIs, as experienced tradesmen get ready to retire and look to inspection as a productive way to stay involved. With a team that collectively has well over 1,000 years of experience in the trade, we are very connected to elevator talent pools throughout the country, and the word is out we are looking for good people.
Many of our employees volunteer with their local communities, whether it is with Boy Scouts, Habitat for Humanity or other socially benevolent organizations. By building a team of giving, caring and responsible people, we have cultivated numerous personal relationships that play a critical role in our growth. In addition, we also run continuous employment advertisements through NAESA International and the Elevator Industry Work Preservation Fund.
EW: What is the most challenging aspect of the recruitment process?
JM: We strive to provide the highest industry standards and, therefore, have demanding requirements of our employees and potential employees. We feel that no other firm can provide the level of service we provide, or, more importantly for recruitment, the level of employee benefits and opportunity for personal and professional development. One of our biggest limitations to recruiting has been our own growth. As we continue adding people and entering new markets, we purposely slow our recruiting efforts to ensure we take the time to properly integrate and train all new members of our team. In our opinion, the elevator-inspection market blends market characteristics, yet there is a significant growth potential in newly privatized jurisdictions. This not only creates a unique dynamic of having highly trained and experienced personnel in existing markets, but allows us the ability to recruit, hire and train in new markets.
EW: How far along is the company in its plans to triple its workforce by 2016?
JM: We started the year with approximately 20 QEIs and now have 35. We feel very comfortable with our growth trajectory and expect to not only be the best, but also the biggest.
EW: In which states is ATIS Elevator Inspections operating?
JM: We are licensed in more than 30 states but have performed inspections in 17: Arkansas, California, Delaware, Florida, Illinois, Kansas, Maryland, Mississippi, Missouri, Nebraska, Nevada, New York, Pennsylvania, South Carolina, Tennessee, Texas and Washington.
EW: Which states have the most potential and why?
JM: New markets, like Mississippi, clearly present some of the most compelling opportunities for us, particularly when we have first-mover advantage like we did in Mississippi performing the first licensed elevator inspection under the new Mississippi Conveyance Safety Act (EW, January 2014). In addition, there are several states with which we are talking about privatizing conveyance inspections in order to minimize costs to the government.
However, even existing, mature markets present excellent growth potential. We perceive a significant need to educate our customers and the riding public on conveyance safety, and we are assembling expertise throughout the country to satisfy this need. As the second-largest national inspection company, ATIS Elevator Inspections is in a unique position to take over and improve multijurisdictional programs throughout the country.
EW: What have you found is the most effective way to grow the business?
JM: Much of the company’s growth has been from the reputation of our team members and word of mouth. We have a dedicated sales staff (inside and outside) and plan to expand this side of the business. Educating customers and ensuring they have safe, code-compliant conveyances represent the best value we can provide and significantly facilitate our customer acquisition.
In addition, the company selectively evaluates potential acquisitions, which will further the company’s ability to efficiently service large regional and national accounts. During 2014, we closed on the acquisition of both Palmetto Safety Inspections in Columbia, South Carolina, and A1 Elevator Inspections in Tampa, Florida (EW, July 2014). These acquisitions immediately expanded our footprint to cover a large portion of the southeastern U.S.
EW: Which major contracts has the company won recently?
JM: We recently won our first state contract, which is a major accomplishment for a company that’s less than two years old. In addition, we have been awarded contracts by several high-profile universities, hospitals, government agencies and property-management companies in several key markets.
EW: How competitive is the inspections industry right now, and how do you feel ATIS Elevator Inspections sets itself apart?
JM: The industry is quite competitive on a local level, but very few companies are able to effectively and efficiently handle multijurisdictional inspection programs. We pride ourselves on providing truly independent, thorough and efficient inspections. While we strive to be cost effective, we do not want to compete solely on price. The service we provide is too important and valuable to do so.
EW: Where do you see ATIS Elevator Inspections in 10 years?
JM: In 10 years, we see it as the largest provider of conveyance safety inspections and related services to ensure our customers are operating safe and code-compliant conveyances. We believe we will be in all 50 states and have the premier brand in inspection and certification services.
EW: With which suppliers does the company currently work?
JM: We will work and coordinate with whichever elevator company the client chooses. We have worked with most of the elevator companies in specific markets. However, due to the fact our duty is to provide independent, third-party safety inspections, we are hesitant to form too close of a relationship with any elevator company so as to avoid even the appearance of conflict. In addition to working with elevator companies, we are in discussions with several providers of software products to support regulatory code-compliance and risk-management activities to benefit our clients and the AHJs. Several jurisdictions have moved to web-based solutions to manage their data and workflow, and we want to ensure we partner with a trusted and long-term supplier. In addition, it is likely our solution has some proprietary component that will either be developed alone, or in consultation with one or more of our potential partners.