What business owners think
The heart of business innovation beats on
Innovation and grit have helped business owners contend with unprecedented resource challenges and brought them to a place of cautious optimism—a view evident in both the investment team’s 2022 outlook as well as our comprehensive business owner survey.
Read Full Survey
Here are just a few highlights from that research:
of business owners reported they were feeling optimistic about their businesses
reported they were feeling optimistic about the economy
said they had to pay higher wages because of labor shortages
of big firms that will allow remote work plan to reduce office space
said COVID-19 is the biggest factor impacting their business over the next 12 months
Big business better navigating supply-chain disruption
Who saw improvement in their supply chain in the past three months?
To fill open roles, business owners are sweetening the pot
paying higher wages
offering flexible hours
providing better benefits
COVID-19 is reported to be the biggest factor for businesses over next 12 months
Size matters in how efficiency and labor concerns are addressed
Who increased capital spending in 2021?
Large businesses: $5 million+ in annual revenue.
Small businesses: $1 million to $4.9 million in annual revenue.
How 3 businesses turned lemons into lemonade in the face of the pandemic
Nassau Candy Distributors: Sweet solutions for a bitter time
To stave off labor shortages, I engaged four outside recruiters a few months ago, especially because I knew we needed to be prepared for the increased growth post COVID.
Co-owner Les Stier,
Nassau Candy Distributors
Background: Nassau Candy, headquartered in Hicksville on New York's Long Island, is one of the largest U.S. wholesale manufacturers of specialty and private label confections, supplying many national retailers and independent stores nationwide. In addition to Nassau Candy-made creations, it imports and distributes high-end confectionary, soda, gourmet food, and natural brands, including health, beauty, and household care to total 20,000+ stock-keeping units. The 80-year-old family-owned business has 1,300 employees and comprises 10 companies—including a promotional arm that produces a series of private label edible and non-edible products. Distribution centers are located in New York, Florida, Michigan, Texas, and California. We spoke with co-owner Les Stier.
Challenges: Inventory began to be a problem in 2021 and I expect it to continue into 2022. We source some candy ingredients, for example, from Brazil, Spain, and Germany. Some manufacturers closed and ports shut down. Additional concerns were getting enough candy containers, such as bags and tubs. And finally, I was concerned labor would become tight, if the pandemic persisted.
Solutions: We took a number of steps to maintain supply. First, we were more aggressive in placing orders—doing so more frequently and on a larger basis—as well as giving manufacturers longer lead times. Additionally, we accepted the manufacturers' price increases and passed them on to our customers. We also broadened our vision as to where product can come from and opened ourselves to bringing in more from Hungary and Mexico.
To stave off labor shortages, I engaged four outside recruiters a few months ago, especially because I knew we needed to be prepared for the increased growth post-COVID. We're nearing that point and our industry trade show indicates that the industry is 65% back to normal. Others who didn't start padding their workforce are suffering now. We've also made efforts to retain the workers we have and gave bonuses to our 50 drivers. To us, they're front-line heroes and it was well deserved. We also gave appreciation bonuses to some other employees as well as promotional giveaways like jackets. And where appropriate, we've allowed some of our associates to do a little work from home.
Alliance Material Handling: Uncle Sam and a little gumption helped a gamble pay off
Lead times for delivery started at 4–12 weeks and are now at 20–62 weeks, so we’re placing orders months in advance of when we estimate we’ll need the merchandise.
CEO Thomas Albero,
Alliance Material Handling
Background: Alliance Material Handling, Inc. is a warehouse solutions provider based in Maryland, with three locations in Virginia, and one in Delaware. The 65-year-old company sells, leases, and services forklifts, and designs as well as installs racking systems for large warehouses and industrial buildings. To learn how Alliance dealt with some of the COVID-induced obstacles, we spoke with Chairman & CEO Thomas Albero.
Challenges: Labor was a significant stumbling block, as over half of our 175 employees are forklift mechanics—a very specialized skill. But when the pandemic hit, many of our customers shut their doors and we ended the first half of 2020 with a year-to-date loss for the first time in 20 years. We were going to need to downsize and let go of 45 employees. Supply-chain backlogs started to accelerate in 2Q when our stock orders kept getting delayed. Lead times for delivery started at 4–12 weeks and are now at 20–62 weeks. About 15% of our parts come from Ireland and Korea where computer chips (used in forklifts) were held up due to trucking and ship container delays. We do $15 million worth of forklift repairs but only if we have the parts.. We do $15 million worth of forklift repairs but only if we have the parts.
Solutions: Just when we were about to fire nearly a quarter of our staff, Paycheck Protection Program (PPP) came out. We gave the technicians jobs like cleaning and painting. PPP was instrumental in our ability to retain our workers, which was critical since being a forklift mechanic is such a specialized skill; it would have been difficult to replace them once things picked up.
We also decided to take a gamble. The largest global online retailer outside China was a client of ours only for forklift maintenance, but bought its forklifts and pallet racks directly from the manufacturer. We approached them with an offer to supply warehouse materials for less. They let us do a small job and we came in on time and below budget. We ended up getting an agreement to buy their pallet racks from us and have had a 3,000% bump in that portion of our business. When warehouses reopened, there was a big surge in demand for forklift repair. If PPP hadn’t enabled us to hold on to our technicians, we wouldn’t have been able to take on the business.
Portables Choice Group Creative lending led to synergies and increased revenue
Throughout the pandemic, employees in accounting, service, etc. were able to work from home with the laptops we provided.
CEO Raja Amar and
COO Larry Melchionda,
Portables Choice Group
Background: The Portables Choice Group (PCG) is a 26-year-old wireless and accessory distributor to partners that include one of the largest mobile telecommunications providers— with offices and distribution centers in Arizona, California, and Metropolitan New York. CEO Raja Amar and COO Larry Melchionda shared how they pivoted in the face of pitfalls that led them to not just survive, but to thrive.
Challenges: We receive merchandise on a consignment basis from our primary partner to distribute to those retail stores, earning commissions based on how much is sold. The government shut us down for six weeks at the start of the pandemic, but we were later considered an essential business and allowed to reopen. We started to experience shortages in 3Q 2020 as manufacturing facilities in China and Korea shut down due to the virus. Without raw materials like SIM card memory chips, inventory of phones started to tighten. The cost of shipping containers skyrocketed and the inventory that did exist was sitting there, waiting to be unloaded. As a result, our partner had to reduce our allocation. Shipping delays also led to challenges in our accessories business (handsets and screen protectors)—as well as closures in airport channels and big box stores.
Solutions: We knew we had to be open to changing the way we did business. With funding from the PPP, we were able to keep workers on the payroll and satisfy rental costs. We were also able to access smart lending solutions and the liquidity helped us to acquire a facility in Arizona which increased revenues. We also decided to merge with a company in New York that was experiencing challenges as well. Consolidation created a greater combined effect as a whole, and it allowed us to grow revenue. We didn’t have to let go of a single person out of a staff of 600. Throughout the pandemic, employees in accounting, service, etc. were able to work from home with the laptops we provided. COVID-19 was a terrible time for the nation but by adapting to the circumstances at hand, and with the help from the government and a private lender, we ended up with an even more lucrative business than we had before.
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