Many of us have experienced profound, once-in-a-lifetime, now-or-never moments, personally or in business, that end up shaping us forever — or, in retrospect, may have spelled the difference between personal success or failure.
Country music singers like to write about them. Many business people define themselves by them: back-against-the-wall experiences laced with desperation and dread … and overwhelming stress.
Obviously, the satisfying “up-against” stories are those that also reflect the best qualities in human nature — like defiance and determination — and chronicle people who find ways to draw upon untapped courage and creativity.
So, if you’ve ever experienced a business moment that left you between a rock and a hard place — up against the proverbial wall — read on.
Finding A Niche
Like many professionals in jan/san distribution, Michael Nitto, owner of MIMA Towel & Supply Co., Asbury Park, N.J., has lived through the troubles associated with starting a business. The biggest challenges he faced undoubtedly fall on sympathetic ears: finding market and product niches, and educating end users.
Nitto had experience in distribution — he was working for a food service distributor subsidiary when he decided four years ago to start his own company focusing on food service wipers.
“Competing with broad-line distributors was virtually impossible,” Nitto recalls. “We might be able to save the customers a little bit of money, but it certainly wasn’t enough to warrant them writing another check, making another phone call, having to contact another vendor and adding that into their system.”
Nitto says one of the biggest questions was where the company fit into the marketplace. “We basically let the market dictate to us where we were going to wind up,” Nitto explains. “We moved more toward the automotive industry, which was into microfiber. Microfiber now represents 95 percent of our business.”
After the initial challenge of establishing a market, Nitto says there have been several other obstacles to navigate. Educating customers about the microfiber products the company carries has become a very important goal for Nitto.
“There’s an awful lot of microfiber that comes into this country that people do not realize is of different quality and different grades,” Nitto says. “Most people just see microfiber and they pick it up and think microfiber is microfiber, which is definitely not true.”
MIMA is also trying to get the word out about the company. “Being a very young company, we do not have the capital to go out there and spend large amounts of money on advertising,” Nitto explains. “We’re trying to hit the pavement and open as many doors and educate as many people as we possibly can.”
As with any venture, there are risks involved. Nitto says there have been mistakes made along the way that he has learned — if not benefited — from. “One thing I’ve seen is we’ve needed to fail to make the company grow,” Nitto says. “We’ve made some choices to get into some contracts that aren’t most beneficial for us to help us grow. However, it has turned out that we’re left with more inventory, and that has allowed us to broaden our stock.”
Every “mistake” is really a tool that teaches Nitto what works and what doesn’t. Because the growth of the company is largely based on experiences, Nitto says he has learned it is crucial to keep an open mind.
“It would be nice to stick to our guns and say this is going to be what we are going to do,” Nitto says. “Unfortunately, the market doesn’t always allow for that, so we’ve allowed the market to tell us where we are going to go.”
Nitto feels that MIMA is in the thick of serious challenges and opportunities. “Our task in the coming years will be to expand our broker network throughout the country as one way to grow, or maintain the same level of growth that we have had over the past couple of years,” Nitto explains.
Many people say bad things happen in threes. For Suzie Migliore, owner of Economical Janitorial & Paper Supplies Inc., Harahan, La., there is truth to that maxim. First, Hurricane Katrina struck her former location in Kenner, La., in late August 2005. While the storm obviously affected business operations, it was only the first in a triad of business challenges.
After just five months of recovery, the Kenner location was getting back on its feet. Then, on the morning of February 2, 2006, an F-3 tornado struck the Kenner warehouse, blowing out an entire wall, and leaving a 30-foot hole in the roof of her 68,000-square-foot structure. It also overturned three large delivery trucks.
The damage to the building ultimately led to a third blow: damages from the tornado were not being repaired, which required in a relocation of the business.
Back To Work
Dedicated managers and employees kept a positive outlook that helped get the business up and running again.
Migliore saw how many of her employees had lost everything to Katrina and wanted to make sure that they had a job to come back to.
“Everybody was doing that much extra work, and to keep them motivated, I had to work with them,” Migliore explains. “The Thursday after Katrina, I was writing orders, pulling orders, loading trucks and relocating product. I did it all with them.”
On the heels of both Katrina and the tornado, employees gathered in conference rooms of a hotel near the warehouse to decide on how to reinstate service to customers. Turn-around time was fast: deliveries after the tornado went out the next day and it took Economical Janitorial just two days to get things running after Katrina.
“Being able to deliver the day after a tornado had hit us, I thought that sent out a strong message that we are going to be here for our customers,” Migliore says. “It was the same thing with Katrina: getting our trucks on the road as soon as possible, sent a message that Economical has the stability of its management team to be able to put their trucks on the road and get their valued customers served.”
To get through these disasters, Migliore says she and other employees acted fast and kept customer relationships in mind. She also relied on her faith. “I prayed a lot and asked God to give me the courage and wisdom to be able to put it back together again,” she explains.
While Migliore had the foresight to have business interruption insurance, rebuilding was an arduous — and eventually fruitless — endeavor. On July 1, Migliore and her employees began a three-day task of moving 150 tractor-trailer loads of product to its current location, a 93,000-square-foot warehouse in Harahan, La.
It took a lot of physical and mental strength to move the business, but Migliore says it is clearly more vibrant now. “When we were at our old location, we were at a point where we had to relocate 5,000 stock keeping units (SKUs) in our warehouse facility to better operations,” Migliore says. “Now we can actually relocate them the way we want to because we had to move. There’s definitely going to be something good that comes out of any bad situation.”
The relocation of items in the warehouse provided the company with labor cost savings, and has improved operations.
Finding The Good
There were other “silver linings” for Economical Janitorial. “The company response sent a strong message to our customers about how important they are to us and how we value our relationships with them,” Migliore says. “To be able to service them through all of the adversity, I think it showed that we know the importance of being there for our customers.”
It’s not just the relationships with customers that have been enhanced due to hardship, however. All employees have a greater respect for each other and feel they are part of a strong team. The trials the company went through also displayed to manufacturers how capable the company is in responding to customers.
“We represent ‘X’ amount of their business in the area, so they were looking to us to see if we were going to be able to distribute their products,” Migliore explains. “Being able to [get back to business quickly] has created a stronger relationship with the manufacturers that we represent.”
Finally, Migliore says the hurricane and tornado served as a catalyst for an emergency preparedness plan. “Hopefully we will never have to use it, but we now have an emergency preparedness plan within our own organization in case we have to deal with another hurricane, tornado or other disaster,” she says.
Millions of women were involved — both wittingly or innocently — in the fight for equal rights during the feminist movement of the 1960s and 1970s. Lorraine Studin, president and founder of Stutton Corp., Biloxi, Miss., is one of those progressive women.
In 1961, Studin got a job at a supply house in Louisiana — the same company where her then-husband worked. She was one of the first women to sell chemicals in that state. However, the company would not compensate her directly; instead, the money was applied to her husband’s checks. “I tried to get on the payroll from 1961 to 1973, and in 1973 I was finally able to get a paycheck in my own name,” Studin explains.
The lack of a check in her own name had nothing to do with a lack in talent. She was great at sales — one year she placed second out of 222 employees.
In 1977, Studin and her supply house decided to part ways. That was also the year Studin decided to start her own company.
An entrepreneur’s life is an uncertain one, and being a woman starting a business in the 1970s added yet another level of difficulty. Luckily there were a few people within the industry who guided her.
The greatest challenges lay ahead, however. Studin explains that in an era in which women essentially “belonged” to men, she couldn’t even get a phone turned on in her own name.
“Although I had paid the phone bill for all the years that we lived in Louisiana, they would only put the phone in my husband’s name and I couldn’t get a company phone,” Studin recalls. “So I went to the [American Civil Liberties Union] and I went to the [Federal Trade Commission.] Bell South finally decided that I was a good risk and they finally turned the phone on for me.”
She also fought to obtain another business necessity — a credit card. “I said every man, regardless of income has a credit card; I’m a solid citizen, pay my bills and make money,” Studin says. “I want a credit card! I had a $50 limit and I used it and I got a $5 million bill, so I called them and they said, ‘It’s obviously a mistake, send us back the card.’ They never would send it back to me again.”
Success Over Sexism
Despite the gender discrimination challenges, Studin persisted — and succeeded. She notes that up until two years ago, when her current husband retired from his other job to work for her, the company was completely run by women.
Because of society’s attitude toward women in business at the time, Studin says employees knew they had to try harder. “We were determined that our business would be one of the best,” she explains. “We paid our bills long before they were due, we allowed customers to return product that they may not have liked for one reason or another, even if it hurt us.”
She says employees educated themselves and their customers and generally made sure customers were happy to see salespeople.
“It has worked,” Studin notes. “In some cases our customers have been with us for almost 30 years.”
Connecting The Lot
Formed in the early 1970s, Network Services Co., Mount Prospect, Ill., brings together independent regional distributors that sell to national accounts.
Network Services originally focused on the “back-end” of an order — national accounts would sign a contract with Network Services, the customer would place an order with a local distributor that would fulfill the order, and only then would Network Services do the accounting.
This system worked, but was technologically dated by the turn of the century. It was clear that the accounting system was not meeting the needs of their customer purchasing managers.
“We couldn’t really tell the customer anything from our location or anything that was going on with an order,” explains Paul Roche, chief information officer. “We had to wait until an order was invoiced and shipped, and then we could tell them what happened.”
National purchasing managers, however, manage budgets by investigating dollars spent at each location, and then standardize the items they purchase in each location. Network Services decided that a new order entry tool would enable purchasing managers to meet their on-going budget management needs.
The Web order tool enables Network Services and the customer to determine what items the different locations can purchase. By setting parameters, budgets are kept under wraps, purchasing managers are satisfied and distributors provide an added value.
“We can establish the items that are visible [on screen] to that person when they log in to place an order,” Roche explains. “By standardizing the front-end, when that person initially places that order, we can be involved and manage the process all the way through the life-cycle of an order, not just do the accounting after an order is already done.”
Network Services’ information technology (IT) staff designed and developed a system to meet the new requirements, and built approximately a dozen documents — invoices, purchase orders, advance ship notices and contract files, for example — that would allow interfacing with the industry’s main software companies. Those member companies that do not use the mainstream software systems were responsible for developing their own documents.
Connecting all member companies to this system was the biggest challenge of the process, according to Roche.
“We had to develop a system that you might call the lowest common denominator,” he explains. “We’ve got members who are $20-$30 million companies, all the way up past $300 million. We had to figure out a way to design a system that would work for the huge member as well as the very small member, otherwise we wouldn’t have had adoption across the board.”
Member companies are still in the process of integrating with the system. “We are developing more files that are making us more efficient in different areas,” says Roche. “We’re starting to become connected to our suppliers, which is something that really wasn’t looked at during the first year or two of this process.”
Changing its focus from the back-end to the front-end has enabled Network Services to provide customers with many benefits. “When we go out and try to sell a new national account, we can sell a lot more now that we couldn’t sell back then,” says Roche.
Because data is flowing back and forth between Network Services and member companies, customers have access to national account advance-purchase reporting and custom services like “order status.”
“Now, we’ve got much more ‘visibility’ into the supply chain and I think that allows us to do much more from a service standpoint that we could never do in the past because we didn’t have the data,” Roche explains.
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