The Mheda Journal

With all the uncertainty out there among small business owners, they can take some solace in the fact that, at least for this week, Washington’s eyes are focused on them. May 23-29, 2010, has been proclaimed National Small Business Week by President Barack Obama and the Small Business Administration (SBA).

The events surrounding National Small Business Week, being held at the Mandarin Oriental Hotel in Washington, D.C., include roundtable discussions, executive forums, speakers and award presentations, including the announcement of the National Small Business Person of the Year.

“America’s small businesses are proving their resiliency as they continue to drive economic growth and job creation,” says SBA Administrator Karen Mills. “During National Small Business Week, we’ll honor the spirit of entrepreneurship, innovation and determination that makes small businesses the engine of our economy.”

In making the official proclamation, President Obama said, “Small business owners embody the spirit of entrepreneurship and strong work ethic that lie at the heart of the American dream. They are the backbone of our nation’s economy, they employ tens of millions of workers and, in the past 15 years, they have created the majority of new private sector jobs. During Small Business Week, we reaffirm our support for America’s small businesses and celebrate the proud tradition of private enterprise they represent.” Read more here.

This marks the 47^th annual National Small Business Week celebration. For more information, visit www.nationalsmallbusinessweek.com. The site will have live webcasts of all the related events throughout the week.

Enjoy the spotlight, small business owners. I hope it translates into some growth in your bottom lines!!

Upon returning from the MHEDA Convention, I was of course overwhelmed by the amount of e-mail in my inbox. I had responded to the urgent messages and messages from actual people while I was gone, but that still left the mountains of newsletters and promotional items to sift through. Most of them I simply gave a cursory look to before deleting, but there was one that I thought deserved special mention.

Having the opportunity to work with and on behalf MHEDA’s membership, I spend a lot of time talking to small business owners. I’ve come to admire, particularly in the past couple of years, the dedication and courage it takes to be out there in the trenches, fighting the good fight. That’s why one particular press release, from the National Federation of Independent Business (NFIB), a small business watchdog group based in Washington, D.C., caught my attention. The article below was written by NFIB President Dan Danner and is used with permission:

“Why America Admires Small Business

It’s conventional wisdom these days: Many people are frustrated, even angry, with government and other major sectors of society. New research from the Pew Research Center confirms this thinking. In a recent survey, the group asked Americans whether they thought 13 different institutions and sectors had a positive or negative effect on the way things are going.

At the bottom of the list are large corporations (64 percent said negative), the federal government (65 percent), Congress (65 percent) and banks and financial institutions (69 percent negative).

So who’s on top? Small businesses.

Seventy-one percent of Americans say small businesses have a positive effect on the way things are going in this country. And when you look at the total picture of what small businesses do every day, it’s easy to understand why Americans feel the way they do.

Of course, small business owners start and build businesses, creating most of this country’s new jobs along the way, providing employment for millions of workers. And they support other businesses from which they buy goods and services, including, for example, the advertising that supports the media outlet where you’re reading this.

But small business owners are also frequently the lifeblood of the communities in which they live and work. Consider these facts from National Federation of Independent Business’ Research Foundation: 

• Ninety-one percent of small business owners contribute to their community through volunteering, in-kind contributions, and/or direct cash donations.
• The estimated average value of contributions is $6,600 per small employer, for a total of roughly $40 billion.
• Seventy-four percent volunteer the equivalent of 18 working days per year for community and charitable activities.

 Those contributions of time and money support a wide variety of groups, including schools, civic organizations, community groups such as Lions and Rotary clubs, youth sports and athletic teams, and many other organizations that help to make up a community.

Why do they do it? The most important reason, they said, is “personal satisfaction and fulfillment.” The least important reason was because they expected any kind of direct business benefits.

Small business owners also said that creating a better business climate and making the community a better place to live were important reasons to contribute.

So here’s the Pew survey’s real message to government, policymakers and others: If you want to turn around the public’s negative view of you, you’d do best to promote the policies and practices that support small businesses. We’ll be a better country for it.”

Couldn’t have said it better myself. Thanks, small businesspeople!

Today is the first official day of March Madness, the annual three-week period when the NCAA crowns its men’s basketball national champion. It’s one of my favorite times of year, as office pools (if those were legal) come into vogue for the next few days and people talk about their brackets.

One of the things that gets the casual fan, not just the rabid college basketball follower, involved in March Madness is the expectation of “upsets” by the smaller, lesser-known schools and embracing the upheaval caused when these upsets occur.

For instance, already today, in the first four games of this year’s tournament, the underdog won two games, and the other two games went to overtime before the favored team won. You never know what to expect.

In some ways, “You never know what to expect” has been the prevailing attitude in the business world for the last 18-24 months. Since the recession started back in 2008, what used to be commonplace is no longer, and vice versa. Customers that have been counted on for years may now be closing their doors. “Madness” has not only been a figurative turn of phrase for some people during the last several months, unfortunately.

The good news is, the upheaval in March Madness is usually short-lived. Eventually, many of the teams that are expected to be around at the end will survive to make it there. Let’s hope the same holds true for those in the material handling industry in particular, and the business world in general. Let’s hope those who struggled to survive the early rounds of this recession are still around at the end.

During the course of working on this issue (April) of The MHEDA Journal, a common element that kept coming up was the importance of customer service. To be sure, customer service has always been a hot topic of conversation among MHEDA members. They know the value of the service they provide and its importance in separating themselves from the competition.

As MHEDA focuses on how “The Rules Have Changed” during their 2010 Convention, it’s interesting that quality customer service is one thing that isn’t changing. Time and again, MHEDA members are telling me that “we’ll still provide the same service” or “servicing the customer is more important than ever” or “they’re not buying, so it’s important to focus on servicing what they’ve already got.” Comments like these have been common during our 2010 Industry Forecast and since.

As one distributor says in repsonse to the question of whether the explosion of Internet selling is bad for distributor relationships, “We are not burying our heads in the sand and are using the internet more and more frequently to market our goods and services. contracts will be tested, but customer service disappears with low margins and value can still be sold.”

Today I received a newsletter from a consultant who bemoaned the state of customer service from his newspaper delivery person: “I haven’t seen my paper on my porch in years.” Fixing that is a small step in fixing the newspaper industry’s struggles in general, he argues.

It’s a lesser example, but I keep seeing it all around. The more things change, the more they stay the same.

As I’ve mentioned before in this space, the upcoming issue of The MHEDA Journal has the theme, “The Rules Have Changed.” The magazine will be full of articles from MHEDA distributor members. One such article is from Ted Springer, the president of Springer Equipment Company in Birmingham, AL.

In it, Springer says, “Diversity is something that people talk a lot about, but when it’s time to ‘put up or shut up,’ often it’s easier to stay the same.” He’s referring to product diversity, and what he means is that business onwers often espouse the values of diversification, but when all the numbers get crunched, you’ll find that it ends up being lip service.

Of course, his article goes on to talk about how his company has put those words into action (no spoiler alert needed…read all about it in April). But I thought this was a pretty provocative statement. It’s true in a lot of companies…initatives to change get started but, before long, people fall back to old habits. Or the person initiating the change gets moved to a new department and stops implementing the changes. Or maybe conflicting directives about how to implement the change come down and confuse people and stall things.

Whatever the case, there are many barriers to change. The companies that are best able to overcome those barriers are the ones that thrive, particularly in a down market where the old ways of doing business aren’t cutting it any more.

What do you think? How can these barriers be overcome?

Today marks the one-year anniversary of the passage of the American Reinvestment & Recovery Act (ARRA), commonly known as the Stimulus bill. Remember that?

One year later, has it stimulated anything? I’ve read many articles over the past 12 months about “shovel-ready” projects and highways and bridges and other infrastructure projects resulting from federal stimulus money. Did any of that bleed over to the material handling industry?

What has been the result of the federal stimulus for all of you out there? Particularly small businesses, how did the stimulus impact you?

In a conversation with Louis Coleman, sales and marketing manager at Autoquip Corporation (Guthrie, OK), we got to talking about an interesting topic, which can basically be summed up as, “What does the increasing use of the Internet for sales mean for traditional distributor territories?” 

I wasn’t sure what to make of it at first, but the more I think about it, it’s an issue that should have distributors, manufacturers and end-users all reconsidering the traditional sales territory structure. As certain distributors become easier to find on the Internet, those distributors are more and more likely to be contacted by end-users who are not in the distributor’s defined territory. What is to stop that distributor (especially a distributor whose sales may be struggling in the current economy) from selling to or servicing that customer?

An ethical distributor who knows exactly where the end-user is located may have the fortitude to recommend that user to another distributor in the customer’s area. But customers who are anxious to buy don’t really want to hear “I can’t help you.” In today’s instant-gratification world, they want to buy now once they find what they’re looking for.

It’s not that difficult nowadays for a distributor with Internet savvy to set up shop with no inventory and just have the manufacturer drop ship to clients. It’s difficult to tell where those types of distributors are, and they may sell right over the top of other dealers.

The situation becomes complicated further when a lead comes to a manufacturer’s Web site. There are manufacturers out there who would love to have links between their own Web site and their dealers’ Web sites. Of course, distributors are concerned—and very appropriately so—that when they link to the manufacturer’s site, a customer can go from the dealer’s site to the manufacturer’s site and hit ‘Contact Us.’ The manufacturer doesn’t necessarily know where that person is located. If the customer is in that dealer’s territory, there’s no problem. But he may not be, and the manufacturer doesn’t know which distributor to give the lead to. I can see how this would be cumbersome and confusing for everyone involved.

Some distributors are becoming huge online and score wonderfully in the search engines. What keeps them from selling anywhere in the nation? Are we on our way toward master dealerships online? What can smaller dealers do to defend themselves? There are customers who value face time and personal contact, but are those dying out?

The answer to all these questions is, of course, “I don’t know.” It’s tough to know the right approach. Distributors often don’t want to talk about it amongst themselves because they most likely fall into one of two categories: big ones who have a strong presence already and are poised to grow their market share, or smaller ones that don’t have much of a Web presence and are upset that the other people are stealing their business. For their part, most manufacturers don’t seem have a good solution, either, so they really don’t want to address it with their dealer networks.

It’s a complex issue. Maybe all e-commerce platforms need to be ZIP code specific so it’s clear which projects belong to which distributor. On the other hand, if getting people to find you online is the goal, then it doesn’t seem fair to punish a large distributor who has the resources and skill to be featured prominently in search results.

As Coleman says, “I don’t know if all products can be sold online, but I do know that there was a time when I swore I would never use the Internet to book a flight. Now I can’t imagine using a travel agent. We may find out that the Internet selling model isn’t sustainable because the good customers really do want face time and that local service presence. I think some of that is true, but that’s what travel agents said, too.”

Time will tell. What do you think? Is the traditional geography-based model endangered? Will it go extinct?

The theme for the MHEDA Convention (being held May 1-5, 2010, in Marco Island, Florida) is “The Rules Have Changed.” Basically what that means is, the recession that has impacted the industry over the last two-plus years has made certain “rules” of business obsolete and created a “new normal.” For example, a new rule of business might include “embracing social media because it’s an inexpensive form of marketing your company.”

For the second quarter issue of the magazine, I am looking for examples like this from distributors. What traditional rules of business are you breaking at your company to survive the recession? What new “rules” are you implementing? Leave a comment to let me know what you come up with!

photo from blog.cc-efi.com

In speaking with MHEDA Member Jeff Stohr of Conveyer & Caster – Equipment for Industry (Cleveland, OH) today, he relayed the story of something his company recently did to give back locally. It’s always nice to hear such uplifting stories.

Last night, CC-EFI employees presented specially made and embroidered gym bags to a local high school basketball team whose coach had unexpectedly passed away at the beginning of the season. The details can be found in more complete and first-hand accounts at the company’s blog at blog.cc-efi.com.

Congrats to Jeff and his team for raising $1,500 to get this done! In times of economic strife, to step up so generously says a lot about the character of this company. And I hear stories like this from MHEDA Members on a regular basis. It’s a tribute to the industry and the association in particular. Kudos!

The Fourth Quarter issue of The MHEDA Journal Online was posted on October 15, and the next issue isn’t due until January 15. But we came across some information that we thought was so valuable we posted it today!

Human resources expert Diane Lustenader sent us updated figures for Social Security and Medicare for 2010. These amounts go into effect at the end of the year, so I didn’t want to wait until January to get the word out!

We’re going to be adding articles more frequently in 2010, so don’t forget to check the Web site. I urge you not to just throw the print magazine on a desk and replace it 3 months later. We have lots of content…we’ll be providing it more frequently in the future!

For now, check out this article on Social Security before this year’s figures are outdated. To find it on the home page, look for the “Just In” graphic in the left-hand column.