Software for Contract Furniture, Home Furniture and/or Office Supply Dealers
Build Your Business For Success ECi supplies all the building blocks you need to grow your business. • Easy-to-use tools that can boost sales • Automate business processes • Optimize delivery systems • And much more!
4 Come build your business with ECi!
Use Tax breaks to SAVE on ECi products. Ask us how.
Member of
www.ecisolutions.com/TD-Blocks 866.374.3221 • www.ecisolutions.com • info@ecisolutions.com
OFDA is very sad to report the passing of industry analyst and consultant Barry Coyle of SolomonCoyle. Barry passed away peacefully on the evening of November 15 at his home in Ojai, CA, in the company and care of his wife, Gayle Wyborny, and their son, Brian Coyle.
Barry E. Coyle (1947 – 2010)
As reported by SolomonCoyle principal, David Solomon, the progress of Barry's cancer, though very rapid, was far outweighed by the courage, thoughtfulness and good cheer with which he lived his final months. Barry Coyle will be greatly missed by a host of family and friends and by the many people with whom he forged personal and professional relationships during his 33 years as a practitioner, consult-
ant, teacher and mentor in the contract furniture industry. Barry also was a highly respected voice on the OFDA Board of Governors for many years and frequent presenter at OFDA conferences and seminars at NeoCon. In accordance with Barry's wishes, no funeral or memorial service is being planned. The family will issue an obituary in the near future. OFDA’s official publication, OFDealer, will feature a final article to the industry written by Barry just a few weeks ago in its December issue. In the article, Barry shares his thoughts and hopes for our industry in the coming years.
news PHOTO: BARFIELD PHOTOGRAPHY
‘Woman Business Owner of the Year’ Honors for Houston Dealer Jayne Edison At Office Furniture Innovations in Houston, the champagne was popping and then some for founder and president Jayne Edison after she was named Woman Business Owner of the Year by the Houston chapter of the National Association of NOVEMBER 2010
Women Business Owners (NAWBO). An industry veteran with nearly 20 years of office furniture experience, Jayne started Ofi in April 1999, literally working out of her hall closet. She’s come a long way since then. Her OFDEALER
NAWBO award is the latest in a long line of honors that includes recognition by the Houston Business Journal as the city’s Fastest Growing Woman Owned Business and 2006 Dealer of the Year for Krueger International. CONTINUED ON PAGE 4
PAGE 3
Dealer News ~ CONTINUED FROM PAGE 3 “It's all about attitude,” she says. “You might be working in that closet today, but think big. Don't think that you're working out of the closet. Don't think that you're working out of your home, and don't put it to the public that is what you are doing. Put out to the public what you can do."
Pacific Office Interiors, Haworth Dealer, Aims to ‘Build Transformations’ Through Habitat for Humanity Project
Jayne attributes much of Ofi’s reputation as a reliable business partner to her staff, who she describes as "an office full of leaders." She says her organization is small but able to successfully take on the largest accounts and she’s got multistory projects from clients as far away as Africa and Aruba to prove it. And even though she says the market today is more crowded and challenging than ever, that hasn’t slowed her down too much. For the Ofi team, that translates into the addition of new import lines and used furniture as well as a venture, coming early next year, into the movable walls business. “Business is still out there,” she maintains. “You just have to work harder to find it and be willing to be creative and move with the market.”
Pacific Office Interiors’ Free Taylor and 12th Street’s Nikki Jaggs on the job for Habitat for Humanity. Since opening for business in 1986, Free Taylor and his team at Haworth dealer, Pacific Office Interiors in Agoura Hills, CA, have taken as their tagline, “Building Transformations.”
Twenty-Five Years and Counting for Austin Business Furniture, Texas Allsteel Dealer Congratulations to Jay Femal and his team at Allsteel dealer Austin Business Furniture, who last month celebrated their 25th year of service to the Central Texas business community. An industry veteran with over 30 years' experience, Jay and a partner started the business in 1985. Jay became sole owner in 1990. Like everyone else, the ABF team has found the past few years challenging to say the least, but things have been looking up since late August, Jay reports, and he’s back in hiring mode, having recently added a new designer and currently looking to bring on another salesperson. “It hasn’t been easy, but the good news is that we’re not just treading water anymore and we are starting to see signs of life in the commercial market here,” he says. That sounds like something worth celebrating and that’s exactly what Jay and his team and several hundred customers, business partners and prospects did last month at a special 25th anniversary party. Here’s hoping they—and the rest of us—will have even more to celebrate in the coming year!
Last month, they took that theme and gave it a special dimension of community involvement by putting together a 30-person team to work on a Habitat for Humanity project in their local market. This was the dealership’s second year in a row hosting a Habitat for Humanity project. In addition to staff from the dealership itself, customers and representatives of the local A&D community came out for a full day’s work to help build housing for people in need. “We believe there’s an opportunity in every project to do something exceptional and literally transform the people, space and businesses we touch through our work,” Free maintains. “Habitat for Humanity is a perfect experience in this regard, as we truly are building transformations for our attendees and the future occupants of these homes.”
CONTINUED ON PAGE 5
NOVEMBER 2010
OFDEALER
PAGE 4
Dealer News ~ CONTINUED FROM PAGE 4 Perry Office Plus Partners with HON to Overhaul Classrooms
A high school computer lab now has furniture appropriate for that use and a tutoring space at a local community college has an updated and more comfortable place for students to seek assistance, thanks to some panels and HON Huddle tables.
WorkSpaces, DC Area Inscape Dealer, Opens Baltimore Showroom No matter how tough the market may get, there’s always new growth opportunities to be found if you’re out there looking for them. Just ask Tom McGuire and his team at Washington, DCbased WorkSpaces. Tom opened his dealership just four years ago, hardly ideal timing by any measure. But the challenges of the past few years haven’t dampened his entrepreneurial spirits any, so when the opportunity came up to open a beachhead in Baltimore, he seized it with both hands. In Central Texas, students running the gamut from elementary school all the way up to university level are going to find school work a whole lot more productive and enjoyable, thanks to Harry Macey and his team at Perry Office Plus and a generous assist from the HON Company. Harry’s dealership recently completed its third annual school makeover contest and this time, they really went the extra mile and then some, with four separate makeovers worth a whopping $100,000 in total!
The result: a sparkling new 5,000 sq. ft. working showroom to highlight the dealership’s Inscape, Kimball and Vitra offerings and the rest of its product portfolio. “Growth in the Baltimore market is evident across a number of industries,” Tom reports. “The Defense Dept’s BRAC realignment process alone is opening tremendous opportunities that are particularly well suited to our expertise.” CONTINUED ON PAGE 6
Open 2011 Enrollmen nt November 15 - Decemberr 15
The contest started earlier this year, when local schools were encouraged to nominate a room for a furniture makeover in one of four categories: elementary, middle school, high school and college/university. The dealership received dozens of entries and narrowed them down to just three or four in each category and then asked the public to vote online for the winners. Over 16,000 votes were cast and after the votes were verified and duplicates removed, about 12,000 votes were tallied to identify the winners.
UNIVIEW VISION N® ± SEE THE DIFFERENC CE verage as low as $7.45 4 per month per employee. nual coverage for rou utine eye examinations. nual allowannce ($130 0) for frames, lenses and/or contact n s. ditional discounts off 15% to 40% on unlimited purcchases of non-covered materials li l ke extra pairs off glasses ± even after covered benefits are used up. cess to a broad, conv venient, national nettwork of mor o e than 44,000 providers annd prrovider locations including indeependent optomettrists, r ophthalm h olo o gists and national retail locaations like:
Representatives from Perry and HON made a special trip to congratulate and consult with each of the winners. The makeovers were handled by Perry furniture consultant Jessica Speer, who helped the winners through the process. An elementary classroom that is shared by two classes and two teachers got new HON SmartLink desks and mobile storage so the class can easily combine or divide as needed. A 40-year-old middle school library replaced chairs that were as old as the building and the Perry team helped build a unique panel “wrap” around the aged circulation desk for a fresh face.
NOVEMBER 2010
Kathy Manolas 800.542.6672 kmanolas@iopfda.orgg
OFDEALER
PAGE 5
Dealer News ~ CONTINUED FROM PAGE 5 New Home for Business Interiors of Tampa It wasn’t much more than a five-minute drive for Mark Tramontana and his team at Business Interiors of Tampa to move from the location they had called home for the past ten years to a new facility. But the move has made a big difference for the dealership. Mark’s new showroom boasts close to 65,000 square feet, up from 25,000 in their previous location, and that means new opportunities to expand inventory and display product far more effectively. And while the current downturn has made business a real rollercoaster, Mark says, it’s also made for an ideal time to move. “We’re getting more than double the space that we had for about what we were paying for our old location,” he says. Timing on the move looks good, too, with Mark reporting more signs of forward movement in the Tampa market of late. “It’s going to take a while still but things are starting to move up and when business comes back in earnest, we’ll be more than ready in our new location.”
Widmer Interiors Announces Opening of Rockford Location Widmer Interiors is pleased to announce their expansion into Northern Illinois. Kurt Kieser is general manager for this office. Kurt is a Herman Miller certified healthcare specialist and brings with him over 18 years of sales and management experience. As the Herman Miller dealer in the Rockford, DeKalb and Aurora areas, Widmer Interiors will focus on commercial, healthcare and education projects. Widmer Interiors is a Herman Miller Certified Dealer; one of only 49 dealers in the U.S. to hold this accreditation. Widmer will now operate out of four locations in Illinois: Rockford, Peoria, Champaign, and Normal. “Widmer has served healthcare customers in Rockford for 15 years, so opening a full service location in Rockford is a natural fit,” said Frank Gutwein, president of Widmer Interiors. “We look forward to providing our new customers with the same excellent service that Widmer has provided for over 45 years.”
Magnuson Group Offers Outstanding Opportunities for Add-On Sales Standards programs. Project finishing touches. Everyday needs. STORLEK™ Tray Top Receptacle Heavy-gauge steel construction, includes liner I Available in 4 paint finishes and optional designer panels I Made in the USA
Front-loading, locking, 50-gallon capacity
I
FOR MORE INFORMATION…T 1-800/342-5725 FAX: 1-888/329-4729 www.magnusongroup.com
1 4 0 0
I N T E R N AT I O N A L E
NOVEMBER 2010
P K W Y • WO O D R I D G E , OFDEALER
I L
6 0 5 1 7 - 4 9 4 2 PAGE 6
© 2010 All Rights Reserved. Global Design Center 10.0240 Shown in ArcCorm Circuit Pebble.
graphic
™
value is always in style.™
scs® certified leed partnership program greenguard® certified p r ou d t o b e awa r d e d 2 0 0 7 , 2 0 0 8 , 2 0 0 9 a n d 2 0 1 0 o f da m a nu fac t u r e r o f t h e y e a r
GRAPHIC SEATING
.
1.800.220.1900 usa
1.877.446.2251 can
thinkglobalstyle.com
BIFMA SEPTEMBER NUMBERS:
Seventh Straight Month of Growth in Orders Earlier this month, the Business and Institutional Furniture Manufacturers Association (BIFMA) released its market statistics for September and once again, the news was generally positive. For the seventh straight month, BIFMA reported year-over-year order growth, with September’s orders up 19% on the same month last year. September shipments increased 17% year-overyear, the fifth consecutive month of year-over-year growth for the industry and the largest monthly percentage increase since April 2005. “Consistent with the recent reports from Knoll and HNI, the September BIFMA statistics were strong and largely corroborate our favorable industry thesis,” noted industry analyst Budd Bugatch. “Broadly speaking, corporations have now delivered four consecutive quarters of year-over-year EPS
Latest Dunlap Survey Shows Continuing Industry Improvement Michael A. Dunlap & Associates’ most recently quarterly survey of trends among office furniture manufacturers provides further evidence of forward progress. The survey’s overall index of industry performance for October came in at 56.65, the highest level since July 2007. For purposes of the survey, an index of 100 NOVEMBER 2010
growth, balance sheets are flush with cash and business confidence continues to stair-step higher,” he said, and even though the unemployment rate remains “stubbornly high,” Bugatch noted the economy is adding jobs at a modest, though unspectacular pace. Bugatch pointed to some positive indicators for increased project business, citing an increase for September in the Architect’s Billing Index to 50.4 in September, the fourth consecutive month of improvement and, importantly, the first time the index has been above 50 (the line of demarcation between expansion and contraction) since January 2008. In addition, he noted the Conference Board’s survey of U.S. office space construction spending for October posted the smallest monthly percentage decline since July 2009
means things “couldn’t be better”, an index of 1 is “absolutely the worst” it can be, and an index of 50 means it is neutral; no change “up” or “down.” Among the highlights of the October survey: • Gross shipments jumped to 68.55, and order backlog increased to 62.36 • The employment index increased to 53.75, while hours worked rose to 54.60. • Both capital expenditure and tooling expenditure indexes improved significantly in the third quarter. • New product development increased to 65.00, above the 26 survey average of 63.58.
• The Personal Outlook Index in the survey (57.17) is the highest since October 2007 (59.10), and is well above the 26 Survey averages of (56.25). Dunlap commented, “I’m very pleased by the results this quarter. The improvements are almost across the board for manufacturers and suppliers. I am not surprised at the significant increases in gross shipments and order backlog, and I am delighted to see the increase in the personal outlook. It appears that the supplier community is almost as optimistic as the office furniture manufacturers.” The survey repeats in January 2011. CONTINUED ON PAGE 9
OFDEALER
PAGE 8
Industry News ~ CONTINUED FROM PAGE 8 Senior Management Changes Coming at Teknion Teknion Corporation recently announced several new senior executive changes. Frank Delfino, president, world markets, will retire from his current position with the company effective May 1, 2011. Delfino, who joined Teknion Furniture Systems in March of 1995 as EVP and COO, will be appointed chief strategic officer and special advisor to David Feldberg, president and CEO of Teknion Corporation. Delfino will also pursue independent business ventures, the company said. In his new role, Delfino will focus primarily on Teknion’s key client relationships and help to evolve the company’s longterm strategy, especially in the area of acquisitions and joint ventures. In addition, Delfino will facilitate the smooth transition of his current role. Concurrent with Delfino’s departure from his current position, Teknion will be reorganizing its worldwide sales structure. The company announced the following appointments. • Scott Deugo, who holds the position of senior vice president, design, marketing and sustainable development, will be appointed to the position of senior vice president, North American markets effective May 1, 2011. In addition, Deugo will maintain responsibility for the company’s worldwide sustainability initiatives.
NOVEMBER 2010
• Effective May 1, 2011, and as part of the transition, Teknion’s international sales will report directly to Feldberg. Also effective May 1, 2011, Joe Regan will be appointed to the position of senior vice president, design and corporate marketing.
Steelcase Supports ‘School Pride’ With Best-in-Class Education Furniture for Detroit High School Earlier this month, viewers of School Pride, a brand-new NBC television series showcasing public school renovations, saw volunteers and educational solutions from Steelcase in action. Airing nationally on NBC, the episode chronicled the makeover of outdated classrooms to classrooms of the future at the Communication and Media Arts High School in Detroit. “With 100% of seniors graduating and a dropout rate of virtually zero, Communication and Media Arts High School is one of Detroit’s top institutions,” said school principal Donya Odom. “However, like many high schools and universities around the country, our classrooms need to transform and better support our students and educators. This makeover was a dream come true for our institution.”
OFDEALER
CONTINUED ON PAGE 10
PAGE 9
Industry News ~ CONTINUED FROM PAGE 9 Office Furniture USA Hires Regional Manager for Northeast Office Furniture USA has hired industry veteran Bob Malloy as its new regional manager for the Northeast, covering Connecticut, Maine, Maryland, Massachusetts, New Jersey, New York, North Carolina, Pennsylvania, Vermont, Virginia, and Washington, D.C. Malloy brings to the company some 20 years of industry experience on both the dealer and manufacturer side of the business, having held account management and regional management positions with Haworth and Teknion and having served as a sales director with dealerships in New Jersey. “The insight Bob can bring as both a manufacturer and a dealer will be a tremendous asset to us,” said Brad Armacost, president of Office Furniture USA. “He’ll be able to draw upon his experience to help support our new and existing dealer partners as we continue to grow sales and add more dealerships to our program.”
Kimball Office Products Now Available in ICE Software
Steelcase donated $150,000 worth of product to the project, and more than 50 employees volunteered to help unload furniture, paint and clean the 52-year-old school, which was in major disrepair. In fact, the school was on Detroit Public School’s cut list, which would mean closing the building and sending the 480 students to other schools in the district. Steelcase donated a media:scape technology table, cobi chairs and lounge settings from the Turnstone Campfire collection to the school library and for classrooms node, the new classroom chair from Steelcase Education Solutions.
Office Furniture Manufacturers Supporting 20-20 Visual Impression Knoll, Kimball Office, National Office, Allsteel, Allseating, Logiflex and Inscape are among the manufacturers currently enriching their catalogs for 20-20 Visual Impression, a new visualization program due to be launched by 20-20 Technologies in January 2011. Visual Impression will add full-scene, manufacturer-specific, 3D color visualization to 20-20’s commercial product portfolio including 20-20 CAP Studio, Giza Studio, and Worksheet. The company said the program makes visualization feasible on every project by creating high quality output in a short amount of time.
Ice Edge Business Solutions, creator of ICE design/configuration software, and Kimball Office have announced the release of Kimball Office products on the ICE software platform. Dealers and designers will now be able to leverage the visualization capabilities of ICE for sales and marketing efforts involving Kimball products. Features of the Kimball Office catalog in ICE include accurate pricing of furniture layouts within an immersive 3D environment and photo-realistic renderings at the touch of a button. Virtual tours of the design will allow for quick and easy review of conceptual designs with clients, modifications to the layout or finishes and updating the specifications and pricing in real-time. Kimball Office’s ICE experience can be enhanced with ICErender and ICEvision, enabling decision-makers without design backgrounds to fully understand what they have ordered.
Global Launches Graphic Series, New Seating Line Graphic from Global Total Office is a new series of office seating developed by world-renowned designer Zooey Chu. The chair back features a new mechanism that places the pivot point directly below the operator’s hips, allowing both the user and the chair back to pivot from the same point in a natural motion.
Graphic’s slim, Euro-style back is contoured side to side for comfort and top to bottom, integratIt is designed as a companion product to CAP, Giza and Work- ing a lumbar support. Back options include fully sheet and is intended to dramatically improve communication upholstered, breathable mesh and a durable textured nylon back. between designers, salespeople and customers. OFDEALER NOVEMBER 2010
PAGE 10
Federal Appellate Court Hears Arguments on Florida’s Interior Design Law After several months of waiting, the 11th Circuit Court of Appeals in Montgomery, AL, earlier this month heard arguments on behalf of Florida interior design community appellants who have been challenging the federal constitutionality of Florida’s interior design practice law. OFDA filed an amicus brief earlier this year in
tinue to legally offer and perform essential
support of the appellants’ case and has been
space planning services that are appropriate
monitoring developments in this case for the
to the needs and budgets of their clients.
last couple of years.
Clark Neily, attorney for the Institute for Jus-
Florida’s law includes extremely restrictive
tice, supporters of the appellants’ case, pre-
and
sented legal arguments before a panel of
burdensome
provisions
that
have
impacted dealers and other members who provide space planning services and OFDA has paid special attention to this case and advocated for amendment of the statute.
three judges. Neily noted that Florida is one of only three states that regulate the practice of interior design and highlighted several areas in which
Florida’s law requires companies to not only
Florida’s interior design statute violates the
employ, but also have a principal owner or of-
constitutional rights of the appellants.
ficer who is a licensed interior designer in order to legally perform space planning services that are routinely performed in 47 other states throughout the country.
In oral arguments, Neily focused on the issues of protected speech and the interstate commerce clause and emphasized that there are 8 or 10 cases to support the appellants’ position.
Since a variety of ongoing initiatives are underway in several other states to amend state laws to require some level of increased regulation of interior design practices, OFDA also
Appellate Court Judge Black asked about the state’s claim that Florida’s interior design law is necessary to protect public health, safety and welfare.
is monitoring those developments and continuing its efforts to ensure that dealers can con-
Neily reported there is no evidence that the unCONTINUED ON PAGE 12
NOVEMBER 2010
OFDEALER
PAGE 11
OFDA News ~ CONTINUED FROM PAGE 11 regulated practice of interior design jeop-
a result of the need for interior designers
structural elements” impacted by the re-
ardizes public health, safety or welfare.
to understand building codes.
strictive law.
As such, he argued that Florida’s exces-
The judge asked him to respond to the
He concluded that: 1) Florida’s law does
sive regulation of interior design services
appellant’s specific arguments that: 1)
in fact impose a substantial burden on
is unnecessary, burdensome and anti-
Florida’s law restricts the out-of-state
interstate commerce; 2) the state had
competitive.
practice of interior design services un-
not provided evidence in defense of
less the involved designer is licensed in
Florida’s interior design law and its prac-
Florida and also is a principal/officer of
tical impact; and 3) existing, far less bur-
the corporation; and 2) there is no
densome alternatives in 47 other states
demonstrated public health, safety or
for promoting claimed public benefits
welfare threat and no public benefits of
make Florida’s restrictive law “arbitrary
the state’s regulation.
and irrational” and indicate that it is un-
Neily noted the Supreme Court has ruled that the key points of inquiry in these cases relate to the “practical effects” of the challenged law, rather than to vague descriptions of the law in question and its intent, which government defense at-
constitutional.
torneys often present when defending
Judge Black also asked for a definition of
the challenged statute in court.
“non-structural elements.” Mr. Glogau cited
It is not clear how quickly the appellate
the court’s dais as an example but could
court will rule on this matter, but OFDA
not identify other, more common examples.
will continue to monitor this case and re-
Jonathan Glogau, counsel for the state, challenged the Institute’s legal case, ar-
port new developments as they occur.
guing that Florida’s law is not discrimi-
Neily in his rebuttal and the Institute’s
natory and that the district court had
appeals brief provided a number of
A copy of OFDA’s amicus brief and the
found no burden as a result of the law.
other examples which highlight the
Institute for Justice’s appeal are avail-
broad range of office furniture, such as
able on the OFDA website at www.of-
workstations, and other interior “non-
danet.org/index.asp?bid=4437.
He contended licensure is necessary as
Mix-it
®
Uniquely cushioned mesh back task, guest and stool models provide sleek comfort and styling wherever you need it.
800.482.1717 www.NationalOfficeFurniture.com
NOVEMBER 2010
OFDEALER
PAGE 12
By Jim Heilborn
Imagine for a moment that you are the captain of a large fishing boat out on the ocean. You are standing on the bridge, looking out toward the horizon. Also known as the helm or the navigation station, it is from here that you and your senior crew steer the ship and plot its course. On a lower outside deck, your fishing crew may be casting their lines or throwing out their nets, hoping to land some “big ones.” This deck gets a lot of your attention because it is more visible and is also the source of the boat’s income. On another deck, probably below that one and possibly inside, other workers are tending to the engines, mending nets, storing previous catches and generally handling the daily operations of the boat. While this area also gets some of your attention, it is not as visible and tends to get less notice than the higher deck, primarily because their tasks are in support of the activities of the fishing deck. CONTINUED ON PAGE 14
Jim Heilborn is an independent business consultant and trainer who specializes in the office furniture industry, working with dealers, manufacturers and service providers. He has been a speaker and contributing writer to OFDA for over 7 years. He can be reached directly at 916-434-8711 or jim@jheilbornassociates.com. His website and business archive can be seen at www.jheilbornassociates.com.
NOVEMBER 2010
OFDEALER
PAGE 13
Cover Story ~ CONTINUED FROM PAGE 13 Located below the waterline sits what is called on some boats the Orlop deck; the lowest deck on the boat. Because as captain you are often very busy with the activities on the decks above and it is primarily just a place where things are stored, this area doesn’t receive the same attention as the more active, visible decks above. It is usually left up to members of the crew to inspect and report back what is, in their opinion, a situation that requires your attention. That could be a problem, because they may miss something important…and that is where most leaks begin. Does this thinly veiled analogy sound familiar? Is your “boat” leaking? Is your “crew” giving you all the information you need in a timely fashion? Do you know where the leaks are and how to plug them? Do you know how to prevent them from getting larger, or even worse, sinking your “ship”? Every company has areas that leak money. It is nearly impossible to prevent every possible cause, as new problems and errors pop up on a daily basis. Stronger companies realize that and plan ahead. Based on past experience, they can often predict where many of the leaks might occur and prepare contingency plans in order to minimize the damage.
NOVEMBER 2010
So where should you start looking for leaks? Here are a few ideas for you and your “crew.”
Days Cash on Hand: Is Trouble on the Way? The cliché, “Cash is King” will always remain true. Looking at your liquid assets is always a good place to start…so looking at your “cash on hand” is critical. One of the leading causes of bankruptcy is a company’s inability to bridge gaps in cash flow. If your company is struck by a major disaster, either man-made or from natural causes, how long can it be sustained before you run out of money? There are times when companies do everything correctly and yet there is a sudden lull in sales. If companies don’t have the cash to pay vendors, the vendors hold shipments. The companies can’t deliver orders and therefore can’t do any billing. In some cases the companies don’t have enough money to pay their employees and taxes and closing is the only option left. It is therefore very important to know how long you would be able to survive before running out of operating capital (or even credit line).
OFDEALER
CONTINUED ON PAGE 15
PAGE 14
Cover Story ~ CONTINUED FROM PAGE 14
Often known as “days cash on hand,” your controller or financial advisor should be able to provide this number to you at any time, but if not, here is a formula you can try yourself. Unrestricted cash + cash equivalents x (365 –·· total operating expenses – depreciation and amortization) = days cash on hand It’s a good idea to identify best and worst case scenarios, along with some other possible variations. Preparing contingency plans can prevent a company from going under.
Accounts Receivable: Maintaining Stability One of the most common sources of profit leaks found in companies is in Accounts Receivable (aka collections). Unfortunately, it is not unusual to hand off managing this vital task to staff members without the experience or authority to obtain final resolutions. Thus timely collections are not always received. Even companies not facing a slowdown in sales can suffer from cash shortages due to slow payments from customers or payments withheld due to unresolved customer service issues. Many companies don’t produce a regular report or hold regular A/R meetings that include the employees directly involved with the client. In other companies, reports are produced but not reviewed closely enough by management. As a result, they are often unaware there is a problem until the customer starts complaining or the cash starts to run out! And by that time it may become difficult to get all of the payments, resulting in both client and
revenue losses. Accounts Receivable reports should be distributed no less than every other week and an A/R meeting held at least once per month. Attendees should include management and also those charged with resolving any issues. In order to get a quick overview, companies can use two measurements to track the A/R and collections. The first one is called “DSO” for “Days Sales Outstanding.” This is the average number of days that all clients maintain an outstanding balance on their accounts. If the company’s standard terms are net 30 days, the goal would be to have the average DSO at thirty days or less. The higher the DSO the more negatively cash flow is impacted. Reducing the time it takes to collect receivables is one of the best ways to increase cash flow. While it is always a challenge to keep the DSO as low as possible, it is even more difficult in this economy. It requires even more attention and vigilance than in the past. The second measurement companies should analyze is the A/R report. Based on the standards set by credit bureaus, a healthy company’s total A/R should be, at minimum, in these percentiles (or better): n 75% of total A/R should be current (under 30 days). n No more than 10% of the total A/R should be in the 31-60 Days Outstanding column. n No more than 10% of the total A/R should be in the 61-90 Days Outstanding column. n No more than 5% of the total A/R should be over 91+ days. It is much easier to identify leaks by comparing your percentiles to these guidelines. The earlier you discover slow paying clients, the easier it is to resolve a problem and receive payCONTINUED ON PAGE 16
NOVEMBER 2010
OFDEALER
PAGE 15
Cover Story ~ CONTINUED FROM PAGE 15 ment. The longer you wait, the greater the chance that you may have to take a write-off.
as a percentage of sales.
Everyone in the company should understand their role in keeping the company afloat.
The Annual Budget: Trailing Indicators
Using this basic format, it is easy to see if sales are keeping up with expenses. By comparing each expense as a percentage of sales, it becomes clearer if adjustments need to be made.
Most companies spend time creating an annual budget document. It is a shame, therefore, that so many spend little or no time reviewing or discussing it throughout the year.
Reviewing the budget and each component regularly doesn’t fix a problem. It provides only a trailing indicator that a problem exists or is on the way. Corrections still must be made.
Another important Leading Indicator can be found in the Design department. Are they busy laying out new opportunities? Are there enough new projects on the “boards” (now in the computers)?
Leaks, both large and small, are much easier to discover when budgets are reviewed regularly. The sooner they’re found the more readily plugged…but it does require that someone take the time to look for them.
Armed with this information, however, the manager knows which direction he or she must take to work on the problem.
Is the error rate going up? That can indicate too much work and not enough people or that staff changes are possibly required. Either way, it costs the company money.
While the P&L statements are also important to review, a good budget document will have more specific information and in greater detail. It allows managers to get a faster snapshot and comparison of the company’s performance, allowing them to make the necessary adjustments prior to problems getting further out of hand. While there are many different formats and versions for budgets, there is some key information that should be included in every budget and represented by a column in the spreadsheet. They include: n Forecasted revenues—by month and total year n Gross sales and gross margin n Forecasted expenses—by month and total year n Actual revenues, year-to-date— by month and total year n Actual expenses, year-to-date— by month and total year n Actual sales, last-year-to-date— by month and total year n Actual expenses, last-year-todate—by month and total year n Next to revenue columns there should be one showing each entry as a percentage of the total. n Next to expense columns there should be one showing each entry NOVEMBER 2010
Leading Indicators: Predicting the Path Leading Indicators are the markers you look for to steer a clear path. They help you make corrections and point things in the right direction before it is too late to turn things around. Leading Indicators can be found in many areas. The Leading Indicator for sales is the forecast…weekly, monthly, annually. It should be the first sign that you are still on course to reach your gross sales and more importantly, gross profit goals. If the forecast does not support the budget, corrections must be made before the year starts and then throughout the year. This could mean reductions in staff, variable expenses, or expansion. If the gross sales target looks fine, but not the gross margin, corrections must also be made. Most companies cannot survive on volume alone. Another good Leading Indicator is the company’s “break-even” number. It is very helpful to know when you will break-even every month and start to be profitable. It is also a good idea to let the entire staff know what they need to do to reach this number…to identify their individual contribution…whether it is in terms of sales, productivity, efficiency, or cost-savings. OFDEALER
I’ve already written about Cash Flow and A/R, but they are also Leading Indicators.
The Installation and Delivery departments are great Leading Indicators. Are there many installations scheduled out into the future? Are delivery trucks going out with full loads? Just measuring the number of stops can be misleading, as a driver can make multiple stops and only deliver one or two pieces per stop. Those become very costly deliveries. Before the captain of a boat leaves shore, the smart ones will chart a course, look at weather conditions, complete inspections and take every precaution to insure they reach their destination. The same holds true for a business. Unfortunately, every year, business owners and managers must embark into uncharted waters and in an uncertain economic climate. It is a lot of pressure to set the course, make sure that everyone stays on task and have a successful outcome each time out. It takes a watchful eye…but that is the challenge and with it the rewards.
PAGE 16
schroeder solutions There is no
I in Teamwork
scottGierhahn
By Alicia Ellis
At Schroeder Solutions in Milwaukee, president Scott Gierhahn (pictured) prides himself on his ability to really understand the wants and needs of both his clients and his employees. It’s an approach to the market that’s paid off handsomely over the past five years, as reflected in his dealership being named three times to the Future 50 by the Metropolitan Milwaukee Association of Commerce, its selection as one of Milwaukee’s Top 10 Businesses NOVEMBER 2010
to Work For in 2007 and its nomination as Best Turnaround of 2008 by Corporate Report Wisconsin. Founded in 1988 when Schroeder Moving became Schroeder Installation Systems, the company has grown steadily since then, joining forces with Integrated Office Solutions, an office furniture dealership, in 2000 and finally becoming Schroeder Solutions when purchased by Gierhahn in 2002. Currently a $9 million organization, the company continues to hold onto its moving and installation roots while focusing OFDEALER
on corporate and mid-market office furniture opportunities. An unaligned dealership dedicated to Teknion and Global - The Total Office new furniture, Schroeder’s also offers a wide variety of used and remanufactured furnishings, along with design services, architectural products, relocation services, facilities maintenance and window treatments and corporate artwork. Because the company came from a moving background, Gierhahn has continued Schroeder’s corporate moving and reloCONTINUED ON PAGE 18
PAGE 17
Dealer Profile ~ CONTINUED FROM PAGE 17
cations services, with 65-100 employees working in the field at any given time and has found success through referrals and marketing efforts that extolled Schroeder’s many capabilities. During the height of the recession, Gierhahn developed a facilities maintenance program which has taken off in the past
year and a half, with more than 160 accounts serviced on a regular basis today. Redesigning space, reallocation of products, moving, reupholstering, cleaning, and maintaining current furnishings are just a few of the offerings. “We have clients who have formal agreements and some with hourly rates,” said
Gierhahn. “Some are serviced on a regular basis while others will call with a list of things to do to assist or act as the facility manager.” “We describe ourselves as a full service interiors company,” said Gierhahn. “We help design, plan, move, furnish, accessorize, and manage our clients’ facilities CONTINUED ON PAGE 19
PICK A PROGRAM THAT FITS YOUR NEEDS AND YOUR BUDGET NOVEMBER 2010
310.305.7198 x111 www.gilcargill.com OFDEALER
PAGE 18
Dealer Profile ~ CONTINUED FROM PAGE 18 provide a great place relax, enjoy the outdoors and socialize.
and ultimately, have a positive impact on the quality of our clients’ lives.” “We pride ourselves on good people who are dedicated to serving customers beyond their expectations,” said Gierhahn who has recently developed a team concept to better service customers. According to Gierhahn, there are currently two customer teams made up of two designers, an inside coordinator and a project manager. The teams always work together to support three of the six outside salespeople. The coordinator is responsible for making sure that all communications are completed properly and on time and support sales’ efforts to ensure satisfaction. “We listen, we interpret and we make suggestions based on the client’s problem,” says Gierhahn. “The team atmos-
phere allows us to draw on contributions from all levels of the company and gives every employee the opportunity to shine.” “Every employee we have is important to the success of the company and their happiness is important to me,” said Gierhahn who reports great results through a continuous improvement process that allows employees to contribute and challenge the way Schroeder’s serves its staff and clients. “We are a family here and understand that a happy work environment breeds productivity.” An employee wellness program provides Gierhahn with a great way to show his people how much they are trusted and appreciated for their efforts. Walking and biking trails behind their building
“Our emphasis is on overall health,” Gierhahn explained. “We host health fairs, organize walking contests, offer healthier food and vitamin water in vending machines, keep bikes in our warehouse for anyone’s use and buy fruit every week for employees.” And, although there was no company money to support a workout room, Gierhahn gave employees space in the warehouse and with employee donations of exercise equipment, videos, and a few leftover panels, a workout space was born. “We always give our employees time to serve on local charities and participate in fundraising events,” said Gierhahn proudly. “We don’t give to get something in return. When you give just to give, you get back and that’s exactly what we’ve created here. In giving, we’ve gotten back so much more than we ever imagined.”
Finding and Fixing Hidden Sales Productivity Problems By Gilbert E. Cargill
The purpose of this article is to help you to find and fix hidden sales productivity problems. First, allow me to present a little bit of history. The sales process that most office furniture dealers utilize today was first documented in 1873 by the founder of NCR. His early sales training manuals exactly parallel the approaches taken by many office furniture dealer sales representatives. Unfortunately, 19th-century processes just don't work in the 21st century. The process, in and of itself, creates many sales productivity problems. In the following paragraphs, I'll present these problems, as well as show you ways in which to remedy them. n Selling time: Selling time is a precious, non-renewable resource. In business-tobusiness selling, we have approximately 173 hours of available sales time monthly. Any and everything that your processes and procedures do to require some of that time, directly and proportionately, reduce the potential of a sales professional to generate incremental revenue. I know, as I write this, some of you will say, “But my account executives have to do design work, planning work, etc.� While I agree that some of that is needed, do you need to have all of that work done by your sales professionals?
As a rule, you should implement procedures that allow your salespeople to sell and everyone else to do everything else. In other words, assign the lowest value task to the lowest cost employee, and start evaluating the cost/value of a salesperson based on the revenue he/she generates per sales hour. n Selling skills: As our industry has changed, the skills required to generate incremental revenue have not. Consequently, at some level, many sales professionals are selling utilizing 20thcentury techniques. Spend some time in the field with all of your salespeople. Observe how they sell. Confirm that their approach to selling is what you want and your customers need. Are they solving problems for your customers or are they just "feature preachers?" n Compensation: Take a hard look at your comp plan. Does it reward differently for new business versus old business? If not, you're on your way to overpaying for under-performance. While you're looking at your comp plan, take a hard look at what activities you expect your sales team to complete in exchange for any salaries or guaranties that are components of the comp plan.
In too many companies, the comp plan essentially does little more than pay the salespeople for showing up. In other words, no critical activities are required of the salesperson in order to earn his/her salary. I believe that salaries should be attached to certain activities. n Metrics: This is one of the biggest problems that office furniture dealers face. Because of selling time, old habits and overpayment, many dealers allow extraordinary activity levels to persist within their organizations. As soon as possible, take a look through your CRM system (you do have one, don't you?) at the calendars of your sales professionals. How many first meetings are scheduled in their calendars? "First meetings" applies to a phone or face-to-face meeting with a decisionmaker or influencer who has the potential to drive some incremental business into your organization. Failure to monitor this critical metric (first meetings) causes unpredictable forecasts and revenue/profit shortfalls. Simply stated, no first meetings this month means no new business from new accounts in the near future, unless your luck turns very good. CONTINUED ON PAGE 21
NOVEMBER 2010
OFDEALER
PAGE 20
Sales Productivity Problems ~ CONTINUED FROM PAGE 20 n Market potential: Find a good list broker and ask him/her to profile your existing accounts against the geographic market that you target. Most companies have a very small subset of their market potential in their marketing database. n Account retention: Frequently, we pay so much attention to gaining new business that we forget to work equally diligently to retain the accounts that have already done business with our organizations. If that brief description fits your company, I suggest that you very rapidly assemble a formalized account retention process. This process requires an account planning guide or a similar tool. Without a formal written plan to broaden and deepen your presence within a significant account, you are essentially hoping that the account will continue to do business with you. It's a flawed strategy at best. Once the account plans have been written, make sure that the plans are reviewed and updated every 90 days. If possible, implement a top-to-top management visitation program. This program requires senior managers from your busi-
EgoÚ8nYadYZd] in a
Jlmffaf_ 9dY[c
ness to meet with your counterparts at your client companies. Make sure that these visits are strategic in nature and not tactical. n Inspect that which you expect: Inspect the quality of your proposals, sales presentations and product demonstrations. If you don't see what you'd like, then you should immediately implement a series of sales practice sessions (aka. role playing). n Web marketing: Review your webmarketing program and make sure that you receive a weekly report letting you know the status of your website. How many visitors have come to your website in the previous week? How many of those visitors left their name, address and phone number and converted into a suspect? What does your website offer the visitor in exchange for permission to send them some email? In summary, I hope that I've presented a series of ideas that will allow you to identify hidden sales productivity problems and fix them proactively. The world has changed, and the processes that you and your organization undergo to find, acquire as well as retain customers must also change. As always, I wish
you...Good Luck & Good Selling!! To help you identify sales productivity problems, Gil Cargill has made available through OFDA’s website, free copies of his Time and Task Analysis Tool and Large Account Planning Guide. Visit http://www.ofdanet.org/Contributors-toOFDA-Publications to download. Gil Cargill has spent the past 27 years as a consultant, speaker and trainer helping thousands of businesses achieve dramatic and permanent improvements in sales productivity. Cargill has taught salespeople across diverse industries the importance of developing sales processes, the advantages of implementing new technology, and the benefits of tracking sales performance. Gil is a frequent speaker at national conventions including OFDA’s Dealer Strategies Conference where he was the keynote in 2009 and workshop and session presenter this past year. For more information, contact Cargill at gil@gilcargill.com or www.gilcargill.com.
F
or maximum cable passage, l`]ÚD8OÚJ]ja]kÚakÚ a\]Yd Ú8nYadYZd]ÚafÚ l`j]]Úd]f_l`k
8fg\ar]\Ú=afak` D8OÚJ]ja]k AmklÚj]egn]Úda\ ÚhYkkÚoaj]kÚl`jgm_` Ú Zjmk`]kÚYdgf_Ú]\_]ÚZdg[cÚ\mkl ÚCgoÚ dgoÚhjgxd] ÚK`j]]Úd]f_l`k Ú Ú / ”, ~ Ú / ” Ú Ú /~ ” Ú8dkgÚYnYadYZd]ÚafÚ JYlafÚ8dmeafmeÚxfak`
“FINE ARCHITECTURAL HARDWARE FOR YOUR FINE FURNITURE”®
;gm_ÚDg[c]llÚ«Ú:gehYfq Ú@f[ ÚÜÚDYf`YllYfÚ9]Y[` Ú:8ÚÜÚ £ £~
w w w . m o c k e t t . c o m
NOVEMBER 2010
OFDEALER
PAGE 21
Twitter Is It Worth It? By Jason Kirby
Before I answer that question, let’s first start with what Twitter is: Twitter is a less gated method of communication: you can share information with people that you wouldn't normally exchange email or IM messages with, opening up your circle of contacts to an ever-growing community of people.
With over a 100 million users, it is clear people see value in using Twitter, but the real question comes down to: Do these people want to buy office furniture? And do they want tweets about office furniture every day? Odds are the answer is no. But that does not mean you should not be on Twitter.
n It’s a great way to network. The strength of Twitter in networking is that it’s like meeting someone at a backyard barbeque, as opposed to a formal business meeting or networking luncheon. The informality is a great ice breaker, and it encourages folks to let their guard down a little.
The short format of the tweet (140 characters) is a defining characteristic of the service, allowing informal collaboration and quick information sharing that provides relief from rising email and IM fatigue.
There are other reasons to be active on Twitter. For example:
n It’s a great way to share expertise. Twitter allows you to share your expertise with designers, architects, commercial real estate brokers and more all the time. So much time is spent going to networking events to meet these people, but you are not always given the opportunity to share your expertise at those events. Twitter gives you that opportunity multiple times a day.
This brings us back to the question, is it worth it? Maybe. I know this may not be the answer you were hoping for, but it really does depend on how you plan to use Twitter.
n It’s a great way to stay informed. The amount of information sharing and valuable content that is near impossible to find elsewhere makes Twitter a great resource for keeping you and your employees fresh on just about everything from industry-related news to the best new sales quotes from Zig Ziglar.
CONTINUED ON PAGE 23
NOVEMBER 2010
OFDEALER
PAGE 22
Twitter, Is it worth it? ~ CONTINUED FROM PAGE 22 n It’s a great way to roll out promotions. A really popular use of Twitter is sending out promotions or notifying people of big sales. These have to be done carefully to not come off as spam, but people appreciate a good deal and Twitter is a great way to get the word out.
be sure to share those too. These are not meant to be sales pitches, but they are meant to remind people of who your company is and the services you offer. This helps your brand stay top-of-mind to potential and past clients.
n It’s a great way to manage your brand. Monitoring what your clients are saying about your company and services is of great value to both you and the client. It is simple to do and is above and beyond typical customer service.
n @ & Reply tweets. An “@ Tweet” or “Mention” is when you want to direct your tweet to an individual account, by putting “@”followed by their name (e.g, @OFMarketer). The benefit of this is that it not only will it show up on your feed with a link to their page, but more importantly, it will appear on their twitter feed with a link back to your page, effectively tapping into all of their followers who you previously didn’t have direct access to. This is a great way to communicate to people and start the conversation. You can tweet a photo of a recent installation and use the “@yourclient” so they are notified of the photo. This may lead them to replying back about how amazing your installation team is or how your customer service is impeccable. Those tweets will then show up on your page so other potential clients may see them.
Now you know why you need to be on Twitter, let’s discuss what you should tweet about. Over the last year we have monitored some of the most influential B2B twitter accounts and have determined that there are five different things you need to be tweeting about. n News tweets. This is a great opportunity to share a tweet or link about something relevant that happened in your client’s industry or in the A&D community. Your followers will begin to recognize you as a valuable resource and even re-tweet you to their followers (aka your potential new clients). n Trending Topic tweets. You may have noticed on Twitter Search something called “Trending Topics.” These are the keywords currently being tweeted the most about. They’re either just the word/phrase or a hash-tagged (#) word. The point of using Trending Topics is that it allows you to reach people who may not be looking for office furniture, but may still be interested in your tweet, as your tweet will show up under twitter search when people look at Trending Topics. Result: you reach people outside your network and also stay current on trending events other people on Twitter find valuable. n Personal tweets. The purpose of the personal tweet is to build trust and credibility and present the person/face behind your Twitter account. Companies and individuals are much more likely to follow someone on Twitter they don’t believe is some random spammer or a person who simply re-tweets everything to generate content. Think of this as building a relationship with your followers. Show them that you’re real and that you have value to give them if they follow you or better yet, do business with you. n Self promotion tweets. You have to be careful with these, but they are acceptable and effective when done in moderation. This is your opportunity to tell the world that your company is great and can be of value to your followers. If you have a recent success story with a client, don’t hesitate to share it. If you have any great images of product that you have just got in or installed,
NOVEMBER 2010
Ideally, you should aim to send out at least one of each of these types of tweets every day. That may seem like a lot for some of you, but our research has discovered it leads to a higher number of followers, retweets, mentions and website views. Now that you have a foundation of why you should be on Twitter and what to tweet about, you can engage your customers and partners more frequently and in a more effective way. See Twitter as the opportunity to stay in contact on a daily basis with hundreds of people and companies in the time it takes to make one follow-up call to a client. Twitter by no means replaces networking face-to-face, but it certainly does compliment it. It is even better if you are doing it and your competitors are not. Now is the time to stop complaining about Twitter and start taking advantage of the new and stronger relationships you will build.
Jason Kirby is director of the office furniture marketing program at eBoost Consulting, a digital marketing consultancy that has generated in excess of 20,000 leads for its clients in the office furniture Industry over the past five years. Jason will be hosting a webinar on December 4th on “5 Steps to Prepare an Office Furniture Dealer’s 2011 Marketing Strategy” You can learn more and register for this free webinar here www.officefurnituremarketing.com/ webinar.html ?utm_source=OFDealer&utm_medium=Twitterarticle& utm_campaign=OFDealer.
OFDEALER
PAGE 23