Location. Location. Location. In real estate, these are the three most important words. When it comes to storage space, location is also prime real estate. Las Vegas-based HyLoft USA, LLC is capitalizing on this need with its patented overhead storage system. A ventilated, ceiling-mounted wire shelf provides safe storage by utilizing otherwise wasted ceiling storage space. Additional products include wall shelving and storage accessories.
HyLoft products are available at most major home improvement stores, and through the Sears catalog, Amazon.com and more than 600 independent dealers/installers. It also has a presence in Australia and Great Britain. Revenues for 2004 are projected to exceed $20 million. Even though HyLoft has achieved impressive sales figures in just a few years, the company’s journey to success offers lessons for all entrepreneurs.
In 1999, Las Vegan Dwayne Dunseath constructed a makeshift ceiling-mounted shelf by piecing together parts from store-bought shelving. “My wife had quite a collection of Christmas decorations,” recalled Dunseath. “I didn’t want to pay for storage, so I created additional space.” Dwayne’s unique overhead shelf received rave reviews from neighbors. Realizing he was onto something, he decided to start a side business. Since he already had a full-time job, he began looking for help.
Tim Matthias, then recovering from heart surgery, was the first to join the partnership as vice president of marketing. Dwayne’s brother-in-law, Mark Torosian, who owned a handyman business, joined next as general manager. In July 2000, HyLoft USA, LLC was open for business.
Display space was secured in Fast Freddy’s Car Wash. Demand was high, with an impressive close rate of 95 percent, but distribution was low. Matthias aspired for placement in Home Depot. To achieve this goal, product modifications were needed.
An improved product was finally developed. It featured a white scratch-resistant powder coating and adjustable downrods ranging in height from 16 inches to 28 inches. This unit could fit in any garage, be easily packaged and shipped, and was easy to install. To protect their investment, the partners secured several patents.
While operating costs increased, the road to Home Depot quickly became an uphill climb. Unsure of the viability of their dream, the group realized it takes more than a good idea to succeed. It takes a little luck and a lot of perseverance, hard work and faith. Mike Mikich, Dwayne’s neighbor, had faith in the company and agreed to get the business back on track as chief financial officer.
Slowly, sales began to increase as independent dealers were secured across the country. A booth at the International Hardware Show was purchased to attract the attention of big-box retailers. While HyLoft caught the eye of several buyers, the partners’ eyes were opened to the reality of competition. “We were surprised to learn it didn’t matter how much demand our product generated,” recounted Matthias. “In order to be competitive, we needed to move manufacturing overseas to meet the price-point demands of big-box retailers. We created our point-of-purchase and package design in the hotel room during the Chicago convention.”
Finally, enough interest was generated to secure a few leads, including placement in Sears Home Center catalog. In 2001, the Wall Street Journal published an article that increased traffic 300 percent on the company’s website, hyloftusa.com. The additional sales enabled the company to move manufacturing to Asia. Continuing to concentrate on growth, local sales and installation were turned over to Storage Overhead Solutions.
Grateful for their success, the owners are committed to giving back to the community. Recently, HyLoft donated in excess of $60,000 worth of products to Opportunity Village to sell at its thrift store. According to Matthias, “As HyLoft USA continues to grow, we intend to increase our philanthropic efforts in Las Vegas.”
