Mike Wagner is a busy guy. Not only does he run Target Freight Management, the company he founded in 2009 during the Great Recession, he’s also a high school varsity and junior varsity baseball coach. But when the pandemic hit, his schedule went from packed to practically empty.
In mid-March, when it was announced that businesses would be compelled to close, Wagner had six weeks of travel scheduled, and the baseball season was about to start.
“So from my day-to-day standpoint, my life changed completely,” he says. “I went from having absolutely no time over the next three months to being completely free from a travel and coaching standpoint.”
Also changing was the company’s revenue. Headed into 2020, Wagner says the company was positioned for tremendous growth and was on a record pace for the first three months of the year.
“We had a bunch of new accounts we were bringing on,” he says. “My brokerage division was doing record revenue every single week. We bought NTS (the freight auditing and payment service company National Traffic Service Inc.) in October. Everything was just flowing perfectly.”
And then it wasn’t. Suddenly faced with a lot more free time, Wagner needed an outlet for all his entrepreneurial energy. He decided to turn it inward.
Free and focused
Target Freight Management didn’t feel the economic consequences of the pandemic right away because it was moving a lot of essential products those first few weeks. So revenue initially increased, but soon dropped overall about 45 percent, largely because a lot of the company’s customers were forced to close. With the financial spigot tightening and his calendar largely open, Wagner shifted from working in the business to working on the business.
“We were just in the office every day and really started focusing on all those little things that we probably never had time to focus on, trying to make the company more profitable,” Wagner says. “We were focusing on where we’re spending the money — are we spending too much money on travel, and things like that — and really started to set up budgets for the future because we just didn’t know what was going to happen. We didn’t know how bad it was going to get.”
Wagner and a few people from his team hunkered down and took a hard look at expenses. Travel, they discovered, had been a sizeable expense, and trade shows were responsible for much of that. While he says the company has had a lot of success adding new business by attending trade shows, Wagner figures they can save money by doing more teleconference calls with prospects instead of getting on airplanes and flying across the country to meet them. Closing three big deals, all through teleconferencing, during the pandemic proved it was the right move.
“We didn’t even go meet these people,” he says. “We had met them in the past, but we did all of these deals over the phone because a lot of companies still aren’t letting anybody come in and see them.”
The company also decided to close many of its office locations, saving money on rent, equipment and utilities.
“Those employees have been productive working from home in those outlying areas,” Wagner says. “So if they can be really productive at home and we don’t have to rent an office space, then that’s a bonus for us, too.”
Tracking financials
A sales guy by trade, Wagner says he doesn’t have a strong finance background. Taking a harder look at the company’s expenses, then, was never going to be high on his to-do list. So, about two years ago, he hired a CFO and has leaned on him for all things financial.
“He’s focused on where we’re spending money and where we shouldn’t be,” Wagner says. “Having him and utilizing him has been a huge benefit for me.”
Financial matters had largely fallen on his business partner in years past. But the combination of buying out his partner and acquiring NTS in 2019 created a greater need to have someone knowledgeable focused on that area of the business.
“We have to report financials to the bank every month,” Wagner says. “Those things are very detailed, and that’s not something that I’m familiar with. That’s not something I’m an expert in. I try not to pretend to be an expert in things I’m not an expert in because that’s how you fail. So finding quality people that could fill those roles at the company here has been key to our success.”
The integration of NTS, based in Amherst, New York, has been accelerated because of the pandemic. It’s the first acquisition for Wagner, and from watching the M&A activity of others, he understood that integration would likely be the most difficult aspect of the deal. But the pandemic actually helped speed up the integration because “we didn’t have a lot of other stuff to do,” he says. “We thought we were going to be traveling for the next six to eight weeks, and then all of a sudden everything shut down and you’re sitting at your desk and you’re like, ‘All right, what can we do to be productive?’”
The NTS integration, originally expected to be completed in 2021, is now on track to be completed by July 31. Target Freight Management has also had the chance to talk with NTS customers about their needs and show them solutions it offers that NTS didn’t. That helped Target Freight Management land two substantial opportunities.
Frustrating unknowns
All in all, Target Freight Management has had more than 20 percent year-over-year growth in the first quarter. Wagner says as long as there’s not another massive shutdown, he expects the company will make money during the pandemic. Based on the revised forecast, it is on pace to match last year’s earnings, and he expects 2021 will bring a substantial increase in sales and revenue.
“Everybody needs to save money, and that’s a service that I provide,” Wagner says. “We expect to add a bunch of accounts in the next 12 months and look to have a record year in 2021.”
Wagner says he’s comfortable with how the company has handled everything so far. He and his team have been able to right-size the business and map a path forward that could lead to the success they were hoping to have this year.
“We haven’t really changed from an EBITDA standpoint from last year to this year as we sit here right now,” Wagner says. “What really is the upsetting part about it is knowing that we were on pace to totally blow out all the numbers based on the first quarter. And now we’re sitting here waiting, depending on other people to give us what our future is going to be and how we’re going to get back to doing normal business. Those unknowns are just frustrating.”
TAKEAWAYS
- Find ways to make the most out of disruptions.
- Take time to work on, rather than in, the business.
- Hire to shore up areas of personal weakness.
The File
NAME: Mike Wagner
TITLE: President and CEO
COMPANY: Target Freight Management
Born: Pittsburgh, Pennsylvania
Education: Point Park University, bachelor’s degree in management services and master’s in business administration
When you were a kid, what did you want to be when you grew up?
I wanted to play baseball. I was a pretty good baseball player when I was younger. When I was a (high school) sophomore I was throwing between 85 and 88 miles per hour. I had some interest from some major league teams. I ended up hurting my arm that next year and that never went to fruition. But then I became a pretty accomplished hitter in high school and then in college, too. And then I had my daughter at 20. That changed everything.
Where might someone find you on the weekend?
My son [who plays on the high school team Wagner coaches] started playing about three weeks ago. In the summer on a weekend, it’s either a baseball or a softball field. Most likely a baseball field now because my daughter [who plays softball at the University of Oregon] is in college. She’s actually out in California training right now. So you’ll find me at a baseball field.
If you weren’t a CEO, is there another job you’d like to try?
I always thought if I didn’t end up doing this, I would have liked to work on Wall Street (as a trader). That’s something that always intrigued me. There are similarities in how you build this business and that business. It’s all smiling and dialing, cold calling on the phone all day long. It’s very similar, the chase to get the business.
