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2014

What is the Small Business Community?

 

You may be wondering- what is this Small Business Community all about? How it can help you and your business? By participating in the Small Business Community (SBC), you can gain knowledge and connections that give you a competitive advantage in building a successful business.

 

Click here to watch a short video to learn more about the SBC.

 

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SB_Leadership_Traits_body.jpgBy Iris Dorbian.


 

Shortly after a fire destroyed his company's production plant earlier this year, Brad Sterl, CEO of Rustic Crust, a Pittsfield, New Hampshire-based maker of pizza crusts, met with employees to talk about options. As one of the town's leading employers, having Rustic Crust close down its operations was devastating. But Sterl reassured staff that not only would he have a temporary facility up and running soon, but that he would continue to pay them.

 

"I also listened to what we could do to help them do their job better," he relates.

 

By communicating with employees during a crisis and adopting a positive but realistic outlook, Sterl was able to maintain employee morale and prevent a potentially disastrous situation from spiraling out of control.

 

Several weeks ago, Rustic Crust broke ground on a new facility that will open in the fall. In addition, Sterl says that the company has also launched programs based on the feedback he received from employees in the days and weeks following the fire.

 

And while Sterl’s experience serves as a prime example of how a small business owner can take charge of difficult circumstances and secure employee buy-in, it doesn’t take a crisis to hone your leadership skills.  Below are some tips from small business owners that have helped them become—and remain—better leaders.

 

Be transparent and listen to employees

Small business owners who are intent on becoming exemplary leaders must have clear and   transparent communication with employees. Whether it’s during a booming period or when a business is in distress, keeping workers informed enhances company culture and unity. In Sterl's case, clear and candid conversations with his workers helped to keep a devastating event from getting worse, and also prevented all his employees from leaving.

 

Sterl says being accessible to employees at all levels and following through with actions based on promises are imperatives for effective business leadership, regardless of company size. For example, when Sterl met with employees following the fire to address their concerns, he asked them for feedback on how “we could do better at the new facility.”

 

According to him, ergonomics, which is the study of arranging and designing things to improve safety and efficiency for people, was a big issue for his workers. So the new facility was built with that in mind.

 

And on the basis of these one-on-one meetings, he also hired a job coach for his employees. This person’s role, says Sterl, “is to work with all of the production employees to help them advance in their position.” This can include dealing with language barriers as well as getting specific job training.

 

“Don't become detached as the company grows,” cautions Sterl. “A good CEO will continue to have a good understanding of the company culture and its products.”

 

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Avoid micromanaging

When bosses excessively interfere with an employee's performance on the job, they are signaling a lack of trust with the worker. Why hire anyone if you won’t let them do their job?

 

Brian Short, the founder of Allnurses.com, a networking site for nurses and nursing students,

is a champion of the importance of allowing workers free rein to do their jobs without excessive intervention from bosses. Having recently stopped telecommuting, Short moved to an office and hired a staff of five. And according to him, he has given each the leeway to do their job.

 

“It’s all about finding wonderful employees,” he says. “You will get better results out of someone who is allowed to spread their wings and know that you have confidence in them. Nobody likes to be micromanaged; plus if you feel the need to micromanage someone, maybe you hired the wrong person.”

 

To prove his point, Short recounts how he recently hired an office manager adept at organizing and optimizing workflows. “Unless I am great at that kind of thing, if I try to micromanage this person, I'm probably just going to slow down progress, my employee will have less confidence in her abilities and probably be less productive,” he says. “My philosophy is get out of the way, do what you do best, and let your employees do what they do best.”

 

For small business owners that operate virtually, not succumbing to the urge to micromanage is even more critical.

 

Jeff Goldenberg is the CEO of Appleton, Wisconsin-based SchoolSupplies.com, an online retailer of school supplies. Like Short, he believes in hiring qualified personnel and then having the confidence to let them do their job without incessant intrusions.

 

With staff located in various cities throughout North America, this takeaway has been instrumental in not only marshalling team unity, but also inspiring staff to meet business objectives. To help fulfill these aims, Goldenberg relies on online collaboration tools, such as Google Docs, Basecamp, and Skype to talk to employees.

 

“The truth is, when the team works remotely, it's easy to lack the cohesiveness you get when you meet regularly in an office,” explains Goldenberg. “So the team really looks toward me to instill a meeting rhythm that sets a structure necessary for our virtual interactions and to meet our business goals. I can't stress enough that if you want to be a leader, you must participate in the process with your team. Taking on jobs, assisting when necessary, and following up are all important, but also taking a genuine interest in the work your team is producing helps in making them feel confident in the work they're doing.”

 

Orit Pennington echoes Goldenberg's sentiment. As owner of the Houston, Texas-based labeling software solutions provider TPGTEX Label Solutions, she feels empowering employees is a big part of being a good leader.

 

“When we first started the business, I wanted to answer every call, talk to the customers, and go through the mail,” she recalls. “Once I realized that I spent more time being the receptionist than actually developing and expanding my company, I hired my first employee. It took me some time to learn to let her do her work. Later, as we hired more people, I kept on empowering them to do their work on their own. This is the only way a business can grow.”

 

Reshoring_body.jpgby Matt Krumrie.


Wal-Mart attracted headlines earlier this year when it announced that the retail giant would spend $50 billion over a ten-year period sourcing and buying American-made goods. The goal is to help manufacturers bring production back to the U.S. from overseas—a movement known as “reshoring”.


In addition, Wal-Mart created a $10-million fund to promote American manufacturing, while also announcing that Kent International, a bike manufacturer and Wal-Mart supplier, planned to move its overseas operations from China to South Carolina, creating 175 American jobs.


Compare that to the experience of Core Products International Inc., a 26-year-old manufacturer of orthopedic soft goods and supports. In 2012, company president Philip Mattison decided to close its 25-employee sewing and assembly facility in Mexico and bring production back to the company’s headquarters in Osceola, Wisconsin, home to 75 employees, and Chetek, Wisconsin, home to 25 employees.


The Wal-Mart decision attracted national headlines. Mattison's decision barely made it to the local papers. Still, he says the decision to bring production back to the U.S. was the right financial move for his company. The increasing cost of offshore labor, combined with flat wages here at home since the recession, were part of the reason, he says. In addition, fuel costs have doubled, driving up freight costs in the process.


"We had also developed more processes and people to manage Mexican production," says Mattison. "We often needed to send our staff to Mexico. They would travel there whenever we introduced a new item, added new equipment, or changed a process. That got expensive. It's not nearly as effective to go offshore as some people think.”


That's what Harry Moser emphasizes through the Reshoring Initiative, an organization he founded with the mission to bring good, well-paying manufacturing jobs back to the United States. Moser's grandfather was a foreman and his father a manager at the Singer Sewing Machine Company factory in Elizabeth, New Jersey. Moser, who has 45 years experience in the manufacturing industry in a variety of capacities, also spent his summers working at the plant. But now, that plant is barren and Moser says "it brings tears to my eyes" to see that its production was sent overseas. 


But times are changing and Moser has the numbers to prove it. In 2003, his data showed that over 150,000 American manufacturing jobs were lost per year to offshoring, while only 2,000 were gained from reshoring. In 2016, Moser's data estimates that just 20,000 manufacturing jobs per year will be lost to offshoring, while 70,000 new jobs will be created in America because of reshoring.


To help companies of all sizes decide if reshoring makes financial sense, Moser helped create The Total Cost of Ownership Estimator, a user-friendly software program to walk owners through the process.


"When considering increasing transportation and fuel costs, increasing overseas wage rates, high reject rates, substandard quality issues and unreliable timelines and deliveries, plus a number of other hidden costs, the total cost of manufacturing in developing countries can be greater than most realize," he says.


Patrick Van Den Bossche, a partner with A.T. Kearney, a leading global management consulting firm, says economic change and labor and currency issues have led to increasing costs in many developing countries, while energy and other costs have become more competitive in the U.S. Other factors, including the need for shorter delivery times and a renewed consumer interest in buying "Made in the USA" products, are making companies at least consider reshoring operations.


"There is a recent increase in cases mentioning the need to improve their image and/or brand by moving back to the U.S.," says Van Den Bossche.


AT Kearney has a proprietary database of over 700 cases where companies reshored. Based on that database, the industries where reshoring is occurring the most include:


  1. Electrical/appliance
  2. Transportation equipment
  3. Apparel
  4. Computer/electronic
  5. Plastics & rubber
  6. Fabricated metal


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Reshoring has its challenges

"Reshoring is certainly not a one-size-fits-all solution and executives should consider the specific characteristics and value proposition of their own business model to see if it fits them," says Van Den Bossche.


And even if reshoring may fit a business model today, that may not be the case a few years down the road, he adds. In order to establish a successful strategy, business owners should first identify and understand the key drivers that will determine if reshoring will make sense in the future.


Using Moser's Total Cost of Ownership Estimator is a good place to start. Being back in the United States is a good place to end, says Mattison, who added that closing down the Mexico plant didn't come without costs. It took nearly three months to move all equipment back to the U.S., and every piece with a serial number had to get cleared through customs before it was sent back to Wisconsin.


"People don't want to get out of their comfort zone," says Mattison. "So it's hard for them to see the benefit of reshoring. But in manufacturing you have to think long-term."


In the meantime, his two American plants are able to produce the same amount of product at the same cost as when the company was manufacturing in Mexico, Mattison says. "Because of automation and the skilled American workforce, our operations in Mexico couldn't come near the production capacity that we have in the U.S.,” adds Mattison. “It just made sense for us."

 

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