Article as it appeared in the KW Record July 14th., 2004

XL Tool president Gord Jokic stands beside a computer numerical control mill used in the machining of steel blocks to make tools and dies.

'On top of technology'
Upgrades fuel revenue growth at Kitchener firm

PHILIP JALSEVAC
DAVID BEBEE, RECORD STAFF

If sales are any indication, Gord Jokic must be doing something right.

When he started XL Tool Inc. in 1992, the Kitchener firm was a two-person tool and die business. Annual revenues were a modest $49,000.

That figure has risen to nearly $2.7 million for the fiscal year ending last September. Just five years earlier, in 1998, annual revenues were $522,000.

That achievement landed the business in the 146th spot when Toronto-based Profit magazine last month published its annual list of Canada's fastest growing companies.

Jokic (pronounced yo-kich) says revenues for the 2003-2004 fiscal year should be slightly higher than last year.

"In our business, it can fluctuate quite a bit. But we will probably exceed what we did last year, " he says.

About 90 per cent of XL Tool's work involves making tooling for the automotive parts industry. Its specialty is designing and building metal stamping dies, which its customers use in their own production.

XL Tool has a broad customer base in Waterloo Region and nearby communities such as Woodstock, Guelph, Tillsonburg, Toronto and Mississauga.

"It's a pretty good mix," says Jokic, the company president.

"We have about 100 or so customers. There's probably six or seven where the bulk of our work comes from, but it's never more than 20 per cent for any one customer."

Jokic, 41, likes the diversity of the client base. If business from one slows, there's a good chance it will be made up by sales to another, which enhances the company's financial stability and cash flow, he says.

EX-TRUCK DRIVER
Jokic, who was born in Kitchener and grew up near Ayr, wasn't quite sure what path to follow after graduating from Paris District High School.

Initially, he went west and worked as a truck driver in the oil exploration industry for about two years.

He then came back to Ontario and studied aircraft maintenance for one year at Centennial College in Toronto.

A more enduring career shift came when he landed a job as a press operator at Budd Canada in Kitchener. Later he apprenticed to become a tool and die maker with the company, where he was employed from 1984 to 1996.

Before leaving Budd, Jokic launched XL, opening a 1,500- square-foot shop on Riverbend Drive in Kitchener. He and his partner, Mike Radjenovic, ran it as a part-time operation.

In 1995, the two took a more significant plunge as entrepreneurs, moving the company to a 7,000-square-foot building that they purchased for about $200,000 at 25 Hollinger Cres. in the Bridgeport area of Kitchener.

The purchase was made with the help of a bank loan, with the building as collateral. The pair also invested $50,000 of their personal savings in equipment and machinery.

"It was all used stuff that I bought at auction sales and that type of thing," Jokic says.

"It was time to take a chance," he says, recalling the fledgling  venture. At Budd, he says, "basically, I was bored and wasn't being challenged anymore and couldn't see myself working the way I was for the rest of my life."

Jokic left Budd in 1996 to devote himself full time to XL Tool. And in 1997, he became the sole owner. buying out the shares of Radjenovic, who has since retired.

"I slowly started hiring employees," Jokic says.

By 1998 the company had five employees. Today it has 27.

Initially, about half of the Hollinger Crescent building was leased to commercial tenants, but XL Tool now occupies all the space.

Although he remains the majority shareholder, Jokic sold shares about two years ago to XL's plant manager, Chris Hergott, and to engineering manager Nick Cvrkalj.

Jokic acts as sales manager and says most of XL's business has come about through building a good reputation, word of mouth and some cold calls.

Now, however, he's taking a more proactive approach to finding customers.

In the last year he has hired consultant Rick St. Clair of Cambridge to "put together a bit of a marketing program for us, which includes an upgraded website (www.xltool.com) and literature that we're sending out."

Regarding his business, Jokic admits: "There's lots of people around doing the same thing. We haven't reinvented anything.

'PRETTY GOOD TEAM'
"But I think our advantage is that we try to stay on top of technology and we have a good bunch of guys here. We've been fortunate enough to put together a pretty good team."

As well, Jokic says some of the leading edge technology and machinery XL uses may provide it greater diversity than some other companies.

"There's a lot that we can do."

When asked what helps make his business tick, Jokic says "there's no real magic formula here."

That being said, the company president gave some examples of XL business practices that he says make sense.

For one thing, XL Tool sets an annual financial goal.

"We sit down every quarter and see where we're at and there's a list of tasks before we reach the next quarter that are spelled out."

The company also makes a point of paying its suppliers within 30 days.

"Some suppliers offer a discount (of roughly two per cent) if you pay early," Jokic says. And prompt payment "creates a loyal supplier base. If they win, we win. We pay a little less and they get their money early."

The company also values employee input and tries to build a sense of teamwork.

"We listen to what they have to say as far as their concerns and any suggestions go," Jokic says. "You want everybody to feel like they're part of the company."

As for profits, Jokic strives to reinvest a healthy amount back into the company.

"The kind of business we run here requires quite a bit of capital expenditures. The equipment is expensive. If you don't put money back into it, you're going to be slipping behind."

pjalsevac@therecord.com

Q & A
We asked Gord Jokic:

Q. In retrospect, how do you feel about making the transition from an employee to an entrepreneur?

A. "There were days I regretted being in business. Running a business isn't always easy. Things don't always go as they should. . . . It took me about seven years before I was making the money that I was making at Budd before I left. On the upside, things are starting to pay off financially. Everything seems to be in place now and things are running pretty smoothly."

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Gord Jokic - President

To find out where and how XL Tool Inc. can fit with your firm's tooling needs please call or e-mail me to arrange a convenient meeting.

Tel:(519)578-6951 - E-mail: gord@xltool.com

Respectfully,

Gord Jokic
President

XL Tool Inc.
19 Crestview Place
Kitchener, Ontario N2B 3X6
E-mail: sales@xltool.com  - Web Site: www.xltool.com
Tel: (519) 578-6951 - Toll Free: 1-888-634-4653 - Fax: (519) 578-4529

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