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It was 1996 and Cleveland's Paperback Recycling had just gone out of business. At the request of the company's bank, David DeLorge, who had been running the business, and Paperback's head of sales, Dana Mueller, restarted operations, eventually buying the business from the bank.

The duo's business attracted the attention of The Peltz Group, who acquired the company in 1999.

DeLorge and Mueller stayed with The Peltz Group after the acquisition to run the company's shredding business. "It was a terrible three years," DeLorge says of the time following the acquisition. The Peltz Group had acquired two other businesses during that time, and the integration process did not go smoothly, he adds.

Despite the difficulties associated with the integration, DeLorge says he values his time with The Peltz Group. "I'd say 30 percent of my business knowledge came from those three years," he says. "I learned a wealth of knowledge and formed great business relationships."
 

Successful  Foundation
Those business relationships would help DeLorge and Mueller when they formed Shredding Network in 2003. Among the first business Shredding Network received was from Mark Prestileo of Smurfit Stone Recycling in Columbus, Ohio, a long-time client of The Peltz Group, and it involved shredding for area Wal-Mart stores.

Mueller and DeLorge with the staff of Shredding Network, many of whom have been working with the business partners since 1996.

The Peltz Group sold its recycling business to Waste Management later that year, and DeLorge and Mueller bought the shredding business back from The Peltz Group that year as well.

Despite all of these ownership changes, many of the employees currently with Shredding Network had worked with DeLorge and Mueller in 1996 when they were still with Paperback Recycling. "That kind of loyalty makes it easier to run a business," DeLorge says.

He also credits his business relationships with David Pelz, formerly with The Peltz Group and Waste Management and now with Pioneer Industries International, and Brian Gaughan, currently vice president, commodity marketing, with Greenstar Recycling, for contributing to his education and the strength of his company.

Much of Shredding Network's business comes through connections DeLorge has in the medical industry. His membership in Wrestlers in Business also has yielded new business. The Ohio nonprofit organization strives to "establish a community of wrestlers who commonly share in the interest of helping each other in business and in life while supporting and strengthening the sport that made us who we are today," according to the organization's website. Wrestlers in Business accounts for four to six referrals the company receives per month, DeLorge says.

He also attributes Shredding Network's referral business to the work of his business partner, Dana Mueller. "She is the No. 1 salesperson by three times," he says. "She sees every customer between three to five times per year."

DeLorge says it's important for customers to know, like and trust the staff at Shredding Network. "It's harder to leave someone you like than someone you don't know." He adds, "We still have to provide a fair price with good service."
 

Security First
From its facility in the Cleveland suburb of Wickliffe, Ohio, Shredding Network serves the Cleveland metropolitan area as well as the metropolitan areas of Columbus and Toledo, Ohio, providing on-site and off-site services. "On any given day, we have three to eight trucks on the road," DeLorge says.

Sixty percent of the firm's shredding revenue is generated through off-site service, while on-site service accounts for 40 percent. The company added on-site service four years ago in response to potential clients' objections to off-site service.

When Shredding Network provides on-site service, the material is shredded again once it arrives at the its plant to provide additional security.

"We have a local college here, and that is the reason we got it," he says of the company's ability to shred to a particle size as small as three-quarters of an inch using its plant-based shredder from Vecoplan LLC, High Point, N.C. This ability also helped Shredding Network to land business with the Federal Reserve Bank of Cleveland.

While Shredding Network avoids banking on the profit of its shredded paper sales, DeLorge says he does factor in the proceeds of these sales when he prices a job. He says he hears from many business owners that the profits from paper sales are "gravy," but he believes this information should be taken into account. "When I price a job, it's based on the time, the value of the paper and the amount of material," he says. "If you don't change with the paper pricing, someone else is going to beat you."
 

Competitive Industry
The recent drop in recovered paper pricing has changed the whole perspective of the shredding industry, DeLorge says. "The price went down $130 in two months," he says. "The price was too high for a long time. It's not healthy for the mills." DeLorge predicts that the price will decline further in the coming months.

This is just one factor contributing to the competitive business environment, DeLorge says. Such an environment requires businesses to set themselves apart from the competition in every way possible. The ability to adjust its particle size is just one way Shredding Network differentiates itself.

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The company also has developed proprietary software that enables its clients to get instant access to a variety of information using the company's website, www.shreddingnetwork.net, where they also can view the off-site destruction process. Mueller was instrumental in developing the software with the local Web firm, DeLorge says. Through its website, Shredding Network's clients can generate environmental reports related to their shredding activity as well as reports by cost center.

"Everything changes so fast," he says. "If you don't envision what the customer wants and you don't make it easy for them, you'll be out of business. We're always looking for a better, more secure way to shred. If I was shredding the same way I was four years ago, I'd be out of business."
 

Diverse Services
Customers also want vendors who are able to respond to a number of their business needs. Offering a diverse range of services also has benefited Shredding Network, DeLorge says. "Demand for shredding is rising, but the volume of paper is lessening," he says. "It is important to expand into other areas so that you can have more than one profit center."

The need for diversification has led Shredding Network to add product and hard drive destruction to its capabilities. Each account for nearly 5 percent of Shredding Network's business.

The company also recently expanded into records management through the establishment of its Secure Document Storage division. The company will add digital imaging to its capabilities in 2012.

Shredding Network entered the field of records management in 2010 after encountering prospective clients who wanted to rely on a single vendor to manage their records throughout the life cycle, DeLorge says. The company had 25,000 square feet of real estate available in which to establish its records management business and now has 55,000 boxes in storage.

The future will bring additional diversifcation for DeLorge as he prepares to launch a national sales company with Ray Barry of Total Training Services, Spartanburg, S.C. (See sidebar, p. 24.)

Mueller will take over day-to-day operations for Shredding Network in 2012 as well as navigate the company's foray into document imaging, while DeLorge will focus on launching this new venture and growing Secure Document Storage.

As with the company's destruction services, relationships and referrals will play a role in growing these newest ventures, DeLorge says. "The more friends you have, the more business you get. I stress that to my employees all the time," he says.

"I have a shredder. The competition has a shredder," DeLorge says. "What is different about our business is that we get to know our clients and follow up with them. That, as well as our employees and their longevity, is what has grown our business."

The author is editor of Storage & Destruction Business and can be contacted at dtoto@gie.net.