Originally published in Business Digest, May 1996

A Second Move for First Choice

by Craig C. Bailey

When Ernie Gilbert says he doesn't know how many types of products his business carries, it's hard to tell if he's joking. From within a 15,000-square-foot complex on Roosevelt Highway in Colchester, Gilbert, owner and operating manager of First Choice Rentals, Sales and Service Inc., sits at the top of a multi-million dollar a year business that deals in everything from the simplest pair of work gloves to state-of-the art power equipment and everything in between. "It's mind-boggling," he admits modestly of the scope of his operation.

If Gilbert's demeanor on this particular mid-April afternoon -- days away from the company's open house on the verge of its busiest season -- is any indication, the pressure hasn't gotten to him. Tall and thin, with a boyish face and an unapologetic laugh that occasionally bursts forth quite unannounced, he claims the growth of the business he founded in August 1989 with silent partners Tom Sheppard of Sheppard Construction Inc. and Rod Reynolds, Milton developer/excavating contractor, has surprised no one more than him.

"There're very few companies that will go from selling tractors to power tools all under the same roof." — Ernie Gilbert

"When we started this business, we thought we'd be a $3.5 to 4 million-a-year business," Gilbert says. "We're about double that. We're gonna hit 7 million this year." Big doings from a self-proclaimed "farm boy" from Hinesburg who gathered his business education from college night courses and chose the eve of a national recession to found his first business.

"Our primary client base right off the bat was contractor-based," says Gilbert, "and of course they got hit the hardest. Nonetheless, we grew and grew fast." In less than three years, First Choice had relocated from its original 5,000 square feet in the Sunderland Industrial Park across the street to its current location, which also houses Sheppard Construction and AIM/M Realty, tucked behind Walsh Electric Supply Co.

"We don't have anyone around that does exactly what we do," according to Gilbert. "There're very few companies that will go from selling tractors to power tools all under the same roof." Despite the company's name, First Choice Rentals, Sales and Service, which is also an Ace hardware store, thrives on sales before rentals. "One of our biggest obstacles dealing with the general public is letting them know that rentals is important to us, but it's definitely not all we do," he adds.

In fact, First Choice derives only 20 percent of its business from rentals. The rest comes from sales: sales to consumers, municipalities, wholesaling to lumber yards and other rental facilities, but mostly sales to contractors. The firm carries everything from pumps, generators, and Ford tractors, to industrial mowers, Bobcat skid-steer loaders, and much more.

"All the large general contractors do business with us. Consequently, all the subcontractors do business with us," says Gilbert. "Pizzagalli certainly is our largest customer."

Remo Pizzagalli, vice chairman of that South Burlington-based construction outfit, has known Gilbert since Gilbert's early days in the construction business. Pizzagalli has purchased tools and materials from First Choice since Gilbert's firm opened. "We've always been very satisfied with his knowledge, his willingness to work with us. And his pricing has always been very competitive. ... He's very, very laid back," Pizzagalli chuckles, "but still gets things done."

According to Gilbert, its First Choice's diversity -- its ability to offer so many products to the contractor to keep a job going from one phase to the next -- that is the ace up his business's sleeve.

He's also turned to diversity in an effort to keep his business thriving throughout Vermont's long, slow winters. To alleviate the dry spell that comes when the snow falls, Gilbert dove into the large-construction heat business a few years ago, a market previously served by out-of-state companies, most located in Boston.

Gilbert describes the powerful heaters that run 24 hours a day to keep concrete and drywall from freezing during construction as "a capital investment that no one in Vermont grabbed hold of. So what we did was decide to get into that business, and get the out-of-state competition out of here. Essentially in three years we pretty much got the bulk of the large-construction heat business." They've doubled their fleet of large construction heat each year, and provided heaters this past winter for the Hannaford projects on Shelburne Road, South Burlington, and in Williston.

"In addition, what we did was create an alliance with Green Mountain Propane, to sell the propane to the same job sites. It gave us something more to do in the wintertime besides lose money," Gilbert jokes. Add that to First Choice's scaffolding and plastic wrap that contractors also use to keep partially constructed buildings from freezing during winter, and you have a good example of the type of vertical integration Gilbert has used to his business's advantage -- the type of thinking responsible for the growth of First Choice.

An area of the upstairs training room is sectioned off to provide a pseudo-office for two of First Choice's outside sales people, one example of the elbow-knocking that's been going on as the business grows beyond its physical capacity. More telling is a handful of storage trailers used to contain off-season materials, which are parked out back among a potpourri of Bobcats, scaffolding, lumber, and stacked tires, another result of the space crunch. A downstairs bathroom off the service area, Gilbert refers euphemistically to as a "library" of service manuals. (Again, that laugh.) "We're using every nook and cranny of this place."

The service and parts departments are the two fastest-growing divisions of the business. "In order for our parts and service business to grow, we need to sell equipment. We've been doing a really good job of that over the last few years. Now it's starting to break down. The big test for us as a company is being able to meet those (service) demands."

One way they do this is with computers. "One of the things that we did, and we did right, was we computerized right off," Gilbert says of the early days of First Choice. "The first thing we bought was a $54,000 computer system." That same mainframe system, after many upgrades and the addition of an independent PC network, still maintains many functions responsible for the smooth operation of the firm.

A terminal at the parts desk provides quick access to illustrated parts breakdowns on CD-ROM, without the space requirement or inconvenience of printed manuals. After verifying a part request with a customer via fax, the system can connect to the manufacturer of the part over a phone line using a modem to order the item, which is later shipped directly to the customer or to First Choice for pickup.

By tracking information by computer, the company can determine its return investment on rental equipment, its repair costs, even tell which days of the week and times of day are the busiest and slowest and adjust staffing accordingly. Inventory management is computerized to the point that the system knows what items are needed, and transmits orders to certain suppliers daily, allowing First Choice to achieve a "huge inventory role," stocking a safe minimum of items and ordering constantly. The results are favorable rates for the business on overall volume, not any single large order. No wonder Gilbert says, "We don't mind spending money on computers."

Recently, Gilbert and his partners have been spending money on something even more substantial. "My partners bought 10 acres in Williston -- Taft Corners -- and we're looking at the feasibility of building a 25,000-square-foot facility there." After six months of planning, the firm has just gotten the permitting process under way for a modified Act 250, and hopes to move in January or February 1997 after selling or leasing its building at 84 Roosevelt Highway.

Not that Gilbert has any beef with his current location, aside from space. "This location's worked out, actually, pretty well. It's a good exit ramp. ... The problem with Exit 16, is that there's just no land available that's large enough for us to expand."