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newsSixty-Five Years and Counting for COFCO OfficeFurnishings, Philadelphia DealerCongratulations are in order for Alan Einstein and his team at COFCOOffice Furnishings, which this year is celebrating 65 years of serviceto the greater Philadelphia business community.

COFCO was founded in 1946 by Alan’s father, David Einstein, whostarted the business as Commercial Trading Company after WorldWar II with a trailer load of government surplus from a military aircraftsupplier.

David found office furniture was one of the fastest-moving items inhis inventory and the rest, as they say, is history. COFCO is one ofthe country’s oldest Allsteel dealers, having first started representingthe company back in 1953.

Alan himself came into the businessfull time in 1970 and became presi-

dent in 1976. Today, the companyis 45 employees strong and

operates out of over125,000 sq. ft housed in

two separate locations.

Remarkably, Alan’s father, now91 years young, still comes into

the business every day and, saysAlan, the basic principles and businessphilosophy that he laid down 65 years

ago remain strong.

“We pay our bills on time, we re-invest in the business and believein cultivating strong, long-term relationships with our customers andour suppliers,” he proclaims proudly.

Even in these tough times, it’s a management approach that stillworks well. “We had an excellent year in 2010 and bounced backvery nicely from the downturn,” Alan reports. Sounds like he and histeam will have even more to celebrate this year!

OutstandingDealers Wanted!

If you’ve been in this industry for anylength of time, you’ll already know it is blessed withsome truly exceptional entrepreneurs doing some trulyamazing things—even in the face of all the challengesthat we’ve seen in the past few years.

Starting this year, OFDA will be highlighting some ofthose accomplishments, with a newly created Dealer-ship Achievement Award.

Now through July 31, industry manufacturers, serviceproviders and dealers can nominate companies theyfeel best exemplifies an engaged office furniture deal-ership that supports their association, their industry,their community and their planet.

All nominations will be reviewed by a panel of respected industry professionals who will use a blindreview process and will evaluate entries solely on thestrength of their submission.

Each application will receive a numeric score fromeach member of the review panel. The nominee withthe highest score will be selected as the recipient ofthe award, which will be presented at the association’s2011 Dealer Strategies Conference in Tucson later thisyear.

If you know of a dealership that deserves this kind ofrecognition, please let us hear about it. You can findthe nomination form on the OFDA website athttp://www.iopfda.org/index.asp?bid=3563. Or formore information, contact OFDA’s Billie Zidek via e-mail or call 800.542.6672.

MARCH 2011 OFDEALER PAGE 3

continued on page 4

Dealer News - continued from page 3

Tangram Interiors Helps Make Sweet Musicat Symphony Orchestra FundraiserIn Orange County, CA earlier this month, Steelcase dealer Tangram

Interiors was helping to make sweet music for a good cause as a

sponsor of the fourth annual Pacific Coast Wine Festival, the major

fundraiser for the Pacific Symphony.

Tangram CFO Nick Greenko studied classical music before enter-

ing the business world and, he says, the symphony is a cause

that’s very important for him personally.

In addition to spearheading Tangram’s efforts for the fundraiser,

Nick serves on the organization’s board and currently chairs its

strategic planning committee.

“It’s a gem of an orchestra and we’re very proud to support it,” he

says. Evidently, Nick and his team are not the only ones who feel

that way. The event drew close to 300 attendees and raised more

than $150,000 for the organization’s artistic and education pro-

grams.

Chicago Area Dealer Interior InvestmentsHosts Fifth Annual Office Chair HockeyTournamentCompetition was fierce in Chicago earlier this month, as teams

drawn from some of the city’s top A&D and real estate companies

faced off against each other for the top prize in Herman Miller

dealer Interior Investments’ fifth annual Office Chair Hockey Tour-

nament.

More than 600 hard-charging chair

hockey players and spectators from

the architectural, interior design,

construction and commercial real

estate communities attended the

event, which saw 28 teams careen

across rinks built from workstation

panels in high performance Herman

Miller office chairs to survive the

double elimination tournament and

achieve ultimate chair hockey vic-

tory.

When the dust settled, VOA Associ-

ates claimed the championship title

after a grueling 1-0 victory over a

team from Jones Lang LaSalle, win-

ners of the real estate division.

Perkins Eastman Architects won the “Power Play” award, given to

the firm who most personifies the spirit of the games. A first-time

participant, Perkins Eastmen named their team “Hatrick Swayze

and the Slambonis”, embellished their uniforms with original art

and thematic names and had their entire design group in atten-

dance.

The real winner, though, was the Special Olympics organization,

which benefitted to the tune of over $30,000 from the event.

Funds raised are earmarked for the Special Olympics’ own state

floor hockey tournament held every November in Chicago. So far,

more than $140,000 has been generated through the Interior In-

vestments Office Chair Hockey Tournament, thanks to the gen-

erosity of the participating teams, spectators and a long list of

sponsors including many furniture manufacturers, vendors and

subcontractors.

“Like most dealers, we want very much to give back to the com-

munity and Special Olympics is a cause that’s important to many

of us here,” commented Interior Investments’ Michelle Weiner. “It

celebrates inclusiveness and also honors athleticism and fellow-

ship,” she added.

Interior Investments will be providing volunteers to help staff the

November event, but meanwhile, planning is already underway for

next year’s office chair tourney.

MARCH 2011 OFDEALER PAGE 4

Champions VOA Associates beat out Jones Lang LaSalle in a grueling final.

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Herman Miller to Acquire POSHOffice Systems, Hong Kong Mfr.Herman Miller has announced an agree-ment to acquire POSH Office SystemsLtd., a Hong Kong-based designer, man-ufacturer, and distributor of office furnituresystems, freestanding furniture, seating,and filing and storage.

POSH posted annual revenues of approxi-mately $50 million in 2011 and is a marketleader in commercial furnishings in both HongKong and the People’s Republic of China.

The company operates five major show-room locations, including a newly openedcommercial furniture showroom in HongKong, and distributes through a POSHfranchise network in China and more than30 international distributors worldwide.

Completion of the acquisition is pendingHerman Miller’s establishment of a legalstructure in China necessary to completethe transaction. The company anticipatesthis process will be completed early in thefirst quarter of fiscal 2012.

The announcement follows a successfulalliance between POSH and Herman Millerbegun in September, 2008.

Lencore Announces NewMarketing ManagerSound masking and speech privacy sys-tems manufacturer Lencore has an-nounced the addition of Katherine Ruppas marketing manager.

Rupp, a recent recipient of a “40 Under40” award from the Long Island BusinessNews, comes to Lencore with over a decadeof experience in marketing communications,training, event planning and public relations.

In addition to her marketing work, she isactively involved with a number of localbusiness and community organizations,serving as the chair of a local governmentbusiness development council and sittingon the boards of both Public Relations Pro-fessionals of Long Island and Enterprisingand Professional Women—Long Island.

Inscape AppointsBob Theodore VPof DealerDevelopment andClient Relations Inscape has announcedthe appointment of Bob

Theodore as vice president, dealer develop-ment and client relations, a new position.

Theodore will be responsible for developingand solidifying distribution and dealer net-works and will liaise on a regular basis withInscape’s major customer accounts to ensureongoing relationships and communication.

Most recently Theodore was director ofdealer development with Kimball Officewhere he was instrumental in developingtheir dealer network. His experience in-cludes serving as president of an independ-ent sales representative organization, vicepresident of sales and marketing at one ofthe largest dealerships in the U.S. and divi-sion manager with a major manufacturer.

Earlier this month, the Business and Institutional FurnitureManufacturers Association (BIFMA) released its market statis-tics for January and once again, the news was mostly positive.

BIFMA said January orders increased 23% year-over-yearcompared with a 24% increase last month and the eleventhconsecutive month of year-over-year order growth.

January shipments increased 22% year-over-year, acceler-ating modestly versus a 19% increase last month.

Despite that strong performance, analyst Budd Bugatch ofthe Raymond James investment house offered a note of cau-tion for the near future. He suggested February order growthshould decelerate as comparisons get tougher and notedthat beginning in March, industry orders will be comparing

against positive growth in the previous year. Shipmentgrowth, however, is likely to remain strong given robust re-cent order trends and improved backlog, Bugatch argued.

Longer term, Bugatch offered a more encouraging scenario.“Over the next few years, we expect the industry to reboundfrom just more than $8 billion to nearly $10 billion driven bya recovery in corporate profits, improving business confi-dence growth in white collar payrolls, and positive net ab-sorption of office space,” he predicted.

Earlier, BIFMA updated the periodic industry forecast it publishesin conjunction with the Global Insight research firm.

BIFMA said it now expects 2011 orders and shipments to increase9.1% and 14%, respectively, up from 5.6% and 8.3% previously.

BIFMA JANUARY NUMBERS: Orders Up 23%; Shipments Up 22%

MARCH 2011 OFDEALER PAGE 6

continued on page 7

Theodore has also been an active participant inOFDA, providing leadership on committees,chairing its Strategic Issues task force and serv-ing on its Board of Governors from 2003 to2010.

Steve Schwarz Named GeneralManager, United Stationers’Furniture Division Wholesaler United Stationers has appointedSteve Schwarz general manager of its furni-ture division, effective March 1. Schwarz willlead the development and execution of thedivision’s strategy as it expands its programsand services for furniture product resellers.He reports to Todd Shelton, president, UnitedStationers Supply.

Schwarz brings significant office productsand furniture industry experience to therole, including a 20+ year professional his-tory with United Stationers.

Prior to leaving United in 2001, he was exec-utive vice president, United Stationers, andpresident of the company’s Supply Division.

After leaving United, Schwarz held various

leadership roles including co-chairman/busi-ness partner at Prime Office Company, sen-ior vice president, strategic markets, forOfficeMax and executive vice president,corporate development and strategy forClover Technologies Group.

HON Rolls Out Voi, New Workplace SolutionThe HON Company has introduced Voi, a newintegrated solution for multiple work styles.

Voi offers a collection oflayered work surfaces andstorage components de-signed to meet the personal needs of any userin any type of workplaceapplication—from privateand semi-private office toteaming, touch down andopen plan.

Work surface options in-clude four basic forms—rectangle, rudder, saddleand wedge. There’s also a

selection of supports, such as a simple O-leg, plus pedestal and cabinet options thatincorporate storage.

Additional storage choices let you build ver-tically (both above and below) as well ashorizontally from the desk.

The new series will be featured amongHON’s NeoCon introductions in June.Meanwhile, for more information, visit thecompany’s website at www.hon.com

MARCH 2011 OFDEALER PAGE 7

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MARCH 2011 OFDEALER PAGE 8

This year’s OFDA Dealer Strategies Conference will be heldSeptember 25-27 at the Marriott Starr Pass Resort & Spa inTucson. Since January, OFDA’s Conference Planning Task Force hasbeen developing a compelling educational program focused on thisyear’s theme, “Transforming Your Business for Future Success.”

OFDA’s annual conferences are designed to bring together a broadcross-section of industry dealers and their key business partners fortimely and lively exchanges of promising new business ideas andemerging best practices in the areas of strategic planning, generalmanagement, marketing and sales, operations and use of technology.

Keynote Speaker Jaynie SmithSpeaker, radio host and CEO of Smart Ad-vantage, Inc., a marketing/managementconsultancy whose clients range from mid-sized companies to Fortune 500 compa-nies, Jaynie Smith’s customized keynotepresentation will focus on helping atten-dees uncover and clearly define true com-petitive advantages and to realign marketing

and other management strategies and processes.

In an industry and general economic environment characterized byunprecedented competition and extreme margin pressures, her focuson differentiating your company from the competition will help closemore sales, improve margins and retain more customers.

Afternoon Workshops Will Kick Off Conference Program Last year, OFDA opened its conference with three Sunday after-noon workshops that provided in-depth interactive presentationson leadership, sales and understanding emerging workplace trends.

These hands-on, practical sessions were among the most highly ratedfeatures of that event, and OFDA will continue this format this yearwith a new set of topics to highlight dealer and small business bestpractices in the areas of closed-loop marketing and leadership inchange management. An additional workshop will be announced soon.

Paul Barr, OFDA board director and principal of Premier Office So-lutions, a Herman Miller dealer in Hatboro, PA, will join with GilCargill, a highly acclaimed sales and marketing management con-sultant with whom he is working, for the first workshop which willoutline their experiences in implementing “closed-loop” marketingin Paul’s dealership.

Randy Kloostra and Valerie Atkin will present the second OFDAworkshop on change management which they have entitled “Noth-ing Endures but Change.” This workshop will focus on a processof personal development that will help you ‘walk the talk’ when itcomes to sharpening the skills needed to succeed in today’s fast-changing furniture dealership world. The session will share knowl-edge and best practices on how to lead the way, be it pursuing anew vertical market, changing the comp plan, re-skilling your sen-ior salespeople or any of the myriad changes a thriving dealershipmust address competently.

OFDA Breakout Sessions Extended to 90 MinutesIn addition to our Sunday workshops and Monday keynotespeaker, OFDA will offer three more general session programs,topics to be announced soon. Based on input from members likeyou, this year OFDA is increasing the length of all breakout ses-sions from 60-75 minutes in prior years to 90 minutes this year.

The goal is to encourage more dialog among speakers, panelistsand conference participants. Informal networking breaks also willbe lengthened to permit more one-on-one informal interaction withindustry business partners, presenters and dealer peers between

OFDA's 2011 Conference Will Highlight Best Practices in Business Transformation

OFDA News - continued from page 8

educational sessions—one of the key benefits of attending our in-dustry-wide conference.

Twelve breakout sessions covering industry and general business bestpractices will help conference participants transform their thinking infour key management areas:

• Strategic Planning and Leadership

• Sales/New Business Development and Marketing

• Operations and Technology Implementation

• Organization Development and Succession Planning

There will be valuable educational content and networking oppor-tunities for dealer and service company principals, as well assales, marketing and operations managers who wish to remainahead of their peers in finding new opportunities and understand-ing emerging best practices.

A number of specific breakout sessions have been confirmed, withpresenters and moderators identified and dealer, installer andother panelists now being invited to participate. Here are high-lights of the breakout session topics currently planned:

• Creating a Sustainable Business Model/Entry into NewLines of Business

• Leveraging Technology to Transform Business

Processes and Boost Profits

• Dealer Benchmarking: Applying 2011 OFDA SurveyResults to Drive Improved Profitability

• Practical LinkedIn Training for Novice and Experienced Users

• Low-Cost/High-Impact Marketing/Branding UsingSocial Media and Local Media Outreach

• Collaborative Operations Streamlining for Dealers andInstallers

• Strategic Talent Management for Long-Term BusinessSuccess

• Customer Loyalty Management – More Critical than Ever

• Successful Exit and Business Transition Strategies

The OFDA conference planning task force welcomes further inputfrom dealers, installers and industry business partners on key top-ics and recommended speakers to address them (including deal-ers and other volunteers willing to share their management bestpractices and creative new business initiatives). Please call703.549.9040, x 100 or email Chris Bates, OFDA president, withyour topic ideas and speaker/panelist suggestions.

Please reserve September 25-27 (join us earlier if you enjoy golfor other recreation) on your calendar now. Registration at specialearly-bird rates is open now.

MARCH 2011 OFDEALER PAGE 9

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Working Collaborating Organized

Show Me the Money:

Navigating the New Financing

EnvironmentBy Scott Cullen

Itʼs always nice to give credit

where credit is due—unless

youʼre an office furniture dealer

and finding financial institutions

that once used to provide you

credit with ease are making it

far more difficult today.

continued on page 12

MARCH 2011 OFDEALER PAGE 11

Cover - continued from page 11

Yes indeed things are different now. Just

ask Dave Branch, one of the owners of Fa-

cilities Connection in El Paso.

“Access to credit has changed dramati-

cally,” says Branch. “Obviously cash is

king and in the past you’d get all the

money you wanted, but with what’s hap-

pened in the financial markets the past few

years, we’ve had to rely on our manufac-

turers with credit terms and assignment of

contract to make

sure everybody got

paid.”

And the more com-plex it got for dealer-ships like FacilitiesConnection, theharder it got to workin that envronment.

“We really came full

circle and in the last

year, we were told

by our manufac-

turer that we could

no longer rely on them to be our bank,”

says Branch.

Branch didn’t take this news lying down,

however. He did something about it.

“The first thing we did was try to under-

stand the capital market more,” he reports.

“We thought we understood it until we

went for some executive education at

Dartmouth that opened up a whole new

window for us. We found out about the pri-

vate equity market, venture capital, angel

investing and the hundreds of thousands

of resources that are out there that we

didn’t know enough about.”

Facilities Connection had a general knowl-

edge of the resources, but they just didn’t

know how to get to them. The education

they received led to an Inner City Capital

Connections training session sponsored

by Bank of America. Through that training

Branch learned how to prepare a pitch to

access a broader range of financial

options.

Facilities Connection now had a better un-

derstanding of what the banks were look-

ing for and with that information in hand

they soon had two banks competing for

their business.

The secret was taking ownership of the

contracts.

“We went to local banks and the bank we

dealt with for years, and found that be-

cause of the complexity of the dealership

and the dealer model, unless we owned

the contracts we could never get financ-

ing,” says Branch. “That was a big eye

opener for us after being a Haworth dealer

for 25 years. No matter what we did, the

banks would not even remotely entertain

working with us because the balance

sheet was so poor.”

Facilities Connection does a lot of busi-

ness with the federal government and that

was part of the problem.

“As an aligned dealer, the majors owned

the contracts,” explains Branch. “You get

paid your dealer service fee when the

product ships but you never own the con-

tract so you never have any assets. Once

we understood that process and worked o

Being in a tertiary market such as El Paso,

Branch realized community banks and

branches of large banks weren’t a good

option since those operate as a commu-

nity bank. Instead he had to go to the main

offices of the big banks.

“When we went to a community bank we

got turned down every single time be-

cause they could never understand how a

company based in El Paso could be selling

worldwide global projects to the govern-

ment. Whereas the big banks completely un-

derstood it once we got to the right people.”

Michael Moore, president of Synergy Busi-

ness Environments in Nashville and

Knoxville, TN saw this downturn coming

from a mile away and

decided being self-

capitalized was a key

component to suc-

cessfully bidding on

large projects.

“Because we are

self-capitalized, we

don’t rely on banks

that much and don’t

borrow money as a

rule of thumb,”

states Moore. “We

keep a pretty low line

for the size of our business; we carry a

$1.5 million credit line between two loca-

tions that do $20 million annually, but we

hardly ever use it.”

Synergy specializes in large hospital

projects and those often rely on bond

money, which sometimes means waiting

for that to free up so Synergy can get paid.

So occasionally Moore has to use his line

of credit to pay his vendor and contrac-

tors. But that’s a luxury many other deal-

erships don’t have.

“I know dealers who have had lines

called,” he says. “It’s that fine line, if you

don’t borrow enough money, they don’t

want to extend the line of credit because

they can extend it to another client,” says

Moore. “And if you borrow too much, they

see you as a risk because our industry has

slowed down.”

Moore understands lending requirements

have changed while acknowledging the

MARCH 2011 OFDEALER PAGE 12

“If you don’t borrow enough money,they don’t want to extend the line of credit because they can extend

it to another client, and if you borrowtoo much, they see you as a risk because our industry has

slowed down.”

continued on page 13

Cover - continued from page 12

furniture industry goes through cycles like

this from time to time, which doesn’t make

it any easier for the dealer looking for fi-

nancing.

“Dealers who live in

their line and are

maxed out all the time

are probably the guys

most at risk,” opines

Moore. “If you’re living

in that line when every-

thing’s good, the bank

feels you’re a viable

client, but as business

slowed they got scared

of folks who were too close to the line all

the time. They want to loan money to peo-

ple who are perfect, but dealers with really

good credit aren’t the ones that need the

money, so it’s kind of a Catch 22.”

David Noel of Modern Office Interiors in

Baltimore had heard the stories about

businesses on the ropes, which MOI was

not, and belts being tightened and nooses

being placed around peoples necks by

banks who themselves were under in-

creasing pressure from regulators.

“Things quickly became a lot more formal-

ized with more requirements and rules,” he

says. “When we had our last renewal, de-

spite the fact that the prime was low and

our liability was low, they couldn’t give us

an interest rate like [we had before].”

It was an eye opener. Even though MOI

was presented with a large line of credit,

they got hammered by an interest rate

minimum, which meant they’d have to pay

a fee for any unused portion of the credit.

“Hypothetically, if you have a $5 million

line of credit and you

only use $3 million,

there are fees not just

on the interest you

draw out but a fee for

the unused portion,”

reports Noel. “We went

through an expansion

in 2009 and put a sig-

nificant capital invest-

ment in it as well as a

significant technology upgrade and to get

that deal done was more painful than nor-

mal. There was an awful lot of justification,

a lot of hoops, whereas in 2006 I probably

could have picked up the phone, given

them a brief summary of our plan and they

would have blessed it.”

MARCH 2011 OFDEALER PAGE 13

How Satisfied are You?The Annual OFDA Dealer ManufacturerSatisfaction Index (DMSI) survey is your opportunity to evaluate the products, policies, service and support of your manufacturer business partners to improve dealer-manufacturer relations.

Strictly confidential and open to all dealers, evaluate up to four of your primary suppliers in six key categories: training, product lines, service and support, sales and marketing, management, and technology.

Top ranked manufacturers will be receive OFDA Dealers’ Choice Awards at the June NeoCon show in Chicago.

As a thank you for participating, you’ll receive a FREE copy of the final report so you can compare your suppliers with others in the industry.

Click this ad for a Link Directly tothe DMSI Survey or call 800.542.6672.

How Does Your Dealership Compare?Compare your company’s financial performance to the

industry’s best players by participating in the OFDA’s free online

To participate, click this ad or call 800.542.6672

Participating dealers can compare revenue & expense structure, and profitability with:

Top 10% of most profitable dealers

Dealers with comparable total revenues

Dealers in markets of similar size

Aligned vs. non-aligned dealers

Dealers with equivalent service revenue shares

And, receive a FREE custom report aligning your data with relevant benchmarks for easy use in improving performance!

Dealer Financial Comparison & Benchmarking Guide Survey

“Hypothetically, if you have a $5million line of credit and you onlyuse $3 million, there are fees notjust on the interest you draw outbut a fee for the unused portion.”

continued on page 14

When talking to his financial institution,

Noel has found that MOI has had to spend

more time positioning what they’re doing,

why they’re doing it, and what they hope

to accomplish from it. Plus if he was ask-

ing for $400,000 the financial institutions

were more likely to commit to $300,000.

“My sense is they’re still living under that

intense regulatory scrutiny,” he opines.

“They haven’t recovered and still have a

fairly significant chunk of non-performing

loans. Although money is still fairly inex-

pensive, getting access to it is extremely

difficult. The renewals are fine but when

you’re trying to do something new and dif-

ferent, the flexibility banks may have had

once is now completely gone, and trying

to tap into new credit is more difficult.”

Like so many business owners, Lyn

Patrick, president of Florida Business In-

teriors in Lake Mary, FL, has found many

banks are not as interested in lending as

they used to be—even banks he’s been

doing business with for a long time. When

the two loan officers he’d been working

closely with at his primary bank left, he fol-

lowed one of them to that new institution,

an institution that was more interested in

lending.

Not that it was a smooth transition. Patrick

still had to jump through a few hoops.

“The first thing I would tell someone, even

though they may not find their banker the

most interesting or exciting person on the

planet, they should certainly develop as

close a personal relationship as they can

because they are their advocate within the

bank. When they take it to the bank’s lend-

ing committee, they’re doing a sales job

on your behalf,” says Patrick.

That made a huge difference, but Patrick

still had to establish relationships with

other decision makers at that institution.

“We still ended up in meetings with the

new bank’s decision makers to introduce

ourselves so the relationships we had be-

fore didn’t all carry over,” he notes.

Even though Patrick had an in at the new

bank, he found from experience that when

banks are looking at you as a potential

new customer they want to visit your site,

see what you’re all about, look at your cus-

tomer list and review financials.

“They’ve always done that, but

they’re looking deeper

into it now and

asking more

ques t i ons , ”

reveals Patrick.

One thing that

was helpful for

Florida Busi-

ness Interiors in

working with

this new bank

was that they had a

fair amount of capital

in the business over the

years.

“Of course banks like

that, so that helps their

leverage ratios and some

of the things they’re at-

tracted to, but we also

try to be pretty open with our books and

tell them everything we felt comfortable

telling them,” reports Patrick.

Patrick isn’t so much frustrated with the

way things are when dealing with financial

institutions, but what’s most frustrating for

him is how it’s impacting his customers.

“It’s harder for our customers to get loans

and that makes it less likely they’re going

to make a capital purchase like furniture,”

he reports. “It’s not so much about how

we’re dealing with our banker as it is about

how our customers are dealing with their

bankers. Companies are hoarding cash

and are not as willing to spend, and their

interest in buying furniture is down right

now. “People don’t buy furniture for peo-

ple they don’t have.”

Cover - continued from page 13

MARCH 2011 OFDEALER PAGE 14

Scott Cullen has been covering the office furniture, office products, and office technology industries since1986. He’s a frequent contributor to OFDealer.

www.centercore.com

LinkedIn operates the world’slargest professional network on the

Internet, with more than 90 millionmembers in over 200 countries and

territories.

It is defined as “your network of trustedprofessionals.” This is where LinkedIn differs

significantly from social media sites like Facebook,where members attempt to get as many “friends” as

they can—and where the word friend is loosely defined.

With LinkedIn, the goal is to connect with only those peoplewhom you consider to be trusted professionals.

MARCH 2011 OFDEALER PAGE 16

VISIBLEwith LinkedIn

By Wayne Breitbarth

continued on page 17

Visible - continued from page 16

You need to personally decide whom you willconsider a trusted professional based on thestrategy you intend to pursue on LinkedIn.

Some people choose to focus on expandingtheir networks even if this means embracing aloose definition of the word trusted.

I like to say a person is trusted if I can pick upthe phone and ask him or her for a favor or anintroduction and be confident that he would say“yes” or if he is someone for whom I would dothe same.

LinkedIn enables you to visualize those inyour network who are one, two and threedegrees removed from you. The first group,which is one degree away from you, are yourpersonal connections. Here is an example ofhow first-degree connections work:

Let’s say I have a friend named Joe Smith.Joe and I have been friends for a long time.Maybe we hung out in the rain at our kids’soccer games or perhaps we are closebusiness associates.

I decide that Joe and I should connect onLinkedIn. I search for his name, find himand extend an invitation to Joe, asking himto join my LinkedIn network. Once Joe ac-cepts my invitation, we are both connectedto each other at the first level.

Your first-degree connections should bepeople who are already part of your offlinenetwork. You have a network that you havebuilt over the course of your lifetime,whether that be high school, college,places you worked, clubs to which you be-long or business acquaintances you havemade in your day-to-day life. This is what Icall your “flat” network.

The premise of LinkedIn is that you trans-form your “flat” list of contacts into a dy-namic, multidimensional network.

Putting your contacts into LinkedIn will en-able you to access additional degrees ofdepth within your network and will allowyour contacts to assist you in new andvaluable ways.

Let’s go back to Joe Smith, my first-degreeconnection. If Joe or Joe’s company wereconstructing a building and needed officefurniture and related services, he wouldprobably call me, since I know him so well.

Let’s say Joe Smith knows Bob Anderson.I have never met Bob Anderson. However,let’s say that Bob is going to build a newbuilding in town and rumor has it that thisbuilding will contain over a million cubicles.

Let’s say I hear that Bob’s company, TheAnderson Company, is going to constructthis building. I put either “Bob Anderson”or “The Anderson Company” into theLinkedIn search engine and find out thatmy friend and first-degree connection JoeSmith is connected to Bob Anderson (thusmaking Bob one of my second-degreeconnections).

I may know some of Joe’s friends—havinggolfed, gone to parties or hung out withmany of them—but I definitely don’t knowall of them. For this example, let’s assumethat I do not know Bob and do not knowhow he knows my friend Joe.

So, learning of this connection aftersearching LinkedIn, I excitedly call Joe andask him if he would connect me with hisfriend Bob Anderson, to which he replies,“Are you kidding? Of course. He’s a goodfriend of mine. We’ve been friends for along, long time. If my connecting you withBob can help you, I’d love to do it.”

Isn’t that what networks have alwaysdone? The added benefit of LinkedIn isthat I can now see a list of Joe’s connec-tions and request an introduction to any ofhis connections I would like to meet.

Stop and think about the power of that.Without LinkedIn, what are the chances Iwould know that Joe Smith knows Bob An-derson? But with this tool, I can find it outalmost immediately and can then use mynetwork to connect with Bob.

Imagine that Bob Anderson is friends withJill Jones. Remember that I don’t knowBob or Jill—I only know Joe. However, Inow have the ability to search Jill Jonesand The Jones Company, only to find outthat Jill is building a building with—youguessed it—a million cubicles. I now havea chance to talk with her by contactingJoe, who contacts Bob, who contacts Jill.

Remember the good old-fashionedmethod of networking? If I wanted to get ahold of either Bob Anderson or Jill Jonesto talk about a potential business opportu-nity, I would be calling them (if I even knewtheir names) and sending e-mails, letters,postcards, whatever.

And the other thirteen furniture dealerswho are located in my town would un-doubtedly be using the same tactics. Thiswould probably result in Bob and Jillscreaming, “No more furniture guys!”

With LinkedIn, I can have a friend or afriend of a friend assist me in making acontact that would typically be extremelydifficult to coordinate.

This is the number one power of LinkedIn:It takes connections that would normallybe invisible and makes them visible.

Make your connections visible by trans-forming your “flat” offline network into adynamic, multi-dimensional network oftrusted professionals and you will be onyour way to securing that million-cubicleproject.

Wayne Breitbarth is co-owner and co-president ofM&M Office Interiors in Pe-waukee, Wisconsin. He hasreleased a book entitled ThePower Formula for LinkedInSuccess. Contact Wayne at

wbreitbarth@mmoffice.com, www.powerformula.net, orwww.linkedin.com/in/waynebreitbarth

MARCH 2011 OFDEALER PAGE 17

>> If former Harvard

management guru

Theodore Levitt is right

and the purpose of

business is to create and

keep customers, why is it

there so much more

focus on the creation

rather than the keeping?

The growth in office furnitur e consumption has gener-ated a mad scramble for new customers, often at theexpense of those customers who actually kept the lightson for the last few years.

Despite a widespread understanding that it costs quitea bit more—some say as much as five times more—toget a new customer than to keep a current one, the thrillof the hunt often trumps keeping the home fires burning.

If you’re only focusing on new business developmentwithout an equivalent focus on customer loyalty, then allyou’re really doing is filling a leaky bucket.

Typically, sales growth plans exceed the projectedgrowth of the industry, implying an intention to win com-petitively-held accounts.

This plan only succeeds if you manage to keep thoseyou already have. While you’re pursuing the competi-tion’s accounts, they’re pursuing yours. Your best cus-tomers are their best prospects.

If you are judging success by market share, and yourshare improves, all you know is that you have more. Youdon’t know if you have more of the right type of cus-tomers—those who are likely to become loyal.

MARCH 2011 OFDEALER PAGE 18

New BusinessDevelopmentMay be Fillinga LeakyBucket

By Valerie Atkin

continued on page 19

Leaky Bucket - continued from page 18

Who are your best, most loyal customers? Do youknow? Without a focused effort to create loyalty, thebucket will continue silently to leak profit.

A final compelling reason to make customer loyalty apriority is to ensure the sustainable value of your busi-ness when you leave it ... and you will leave it someday.

Having an effective leadership team, engaged employ-ees, and loyal customers will make your business farmore attractive.

Hopefully you’re thinking, “Okay, where do I begin?”The first step is to undertake a serious gut check.

How serious are you? As Jeanne Bliss, author of ChiefCustomer Officer, says, “This work is not for the fainthearted or the quarterly inclined.” There are four customer-oriented levels:

1. Customer Service

2. Customer Focus

3. Customer-Driven

4. Customer Loyalty

>>Customer Service

“Unhappy employees are terrorists.Whether they mean to or not, theydestroy customer loyalty right at thegrass roots.”

- Paul Goodstadt

The Customer Service Level is the vitamin C of cus-tomer loyalty. Some will benefit; none will be harmed.

Focusing on customer service means ensuring thateach customer contact or ‘moment of truth’ is executedin a polite and consistent way.

Many dealers start with how the phone is answered. Nocustomer wants to chase a salesperson through amaze of cell phone, voicemail and prompts beforebeing allowed to talk to a real person.

Differentiate your dealership by making it easy to getanswers and encourage employees to make the cus-tomer’s issue their own until it’s resolved.

One dealership branch I’m currently working with has

an agreement that everyone answers the phone so itwon’t ring into the vast depths of voicemail. Admittedly,it’s a small branch, but salespeople answer each oth-ers’ calls so the customer knows that someone is ontheir side.

Without explicit attention at this level, the customer’s

contact with individuals and their personal skill level de-

termine the dealership’s brand. This includes everyone

from sales, design and finance to installation and per-

haps even the manufacturer.

This level typically requires training in the fundamentals

we’d all love to believe people don’t need but often do.

>>Customer Focus

“The surest way to own a small businessis to buy a big business and pay only lipservice to customer loyalty.”

- Jim Clemmer

Delivering impeccable customer service doesn’t guar-antee there’ll never be a mistake or problem. A dealer-ship’s service recovery ability is crucial.

Do customers feel as if they have your team on theirside working to resolve this issue? Does sales complainabout the manufacturer, or does design complain aboutinstallation?

“Siloed” organizations eliminate all possibility of cus-tomer loyalty. Each department may focus on the cus-tomer, but unless they do it together, you get “goalpotluck” with each group bringing its own goal to thesituation and, like many potlucks, ending up with toomuch of one thing and not enough of another.

To improve the smooth flow of customers through theirpurchasing experience, a dealership must map thatjourney.

Lay out all the customer contact points and the hand-offs to be certain no customer falls into the chasm thatsometimes separates departments. Staple yourself toan order and observe your dealership as a customerdoes.

MARCH 2011 OFDEALER PAGE 19

continued on page20

Leaky Bucket - continued from page 19

>>Customer-Driven

“If we aren’t customer-driven,our cars won’t be either.”

- Donald Peterson, formerpresident of Ford MotorCompany

The Customer-Driven Level acknowledgesthat it takes a village to satisfy a customer.You can recruit and hire the best individualsbut without a game plan (and a good coach),you’re unlikely to win.

Without a strong focus on employee satisfac-tion and engagement, you’ll never rise to thelevel of cooperation necessary to becomeworld class.

Employees must treat one another as cus-tomers and apply the same commitment,concern and care internally and externally.This is only possible when such behaviorconsistently modeled from the top down. Allinterface issues between employees, depart-ments, and manufacturers must be ad-dressed and resolved BEFORE problemsarise.

>>Customer Loyalty

“It never ceases to amaze methat companies spendthousands of dollars to attractnew customers (people theydon’t know) and spend next tonothing to keep the onesthey’ve got.”

-Jeffrey Gitomer

How is loyalty created? The best way tobegin looking for an answer is to flip thequestion. Ask yourself, to whom am I loyal?Not your financial advisor, lawyer, or doctor—those who can save you money or even yourlife—but businesses like yours.

If you can think of one, ask yourself whyyou’re loyal? The company that has earnedmy loyalty these days is Apple.

Imagine if your customers boasted abouttheir loyalty the way we “Mac-iPhone-iPad/iPod-philes” do. It’s easy to dismissApple by saying, “Look at all the resourcesthey have.” But doing so ignores how manyemployees Apple has and that they are ableto replicate this positive customer experiencefrom store to store and phone call to phonecall.

Also bear in mind, Apple doesn’t hold salesor discount product. They create loyalty byexcelling at all of the above levels and byknowing exactly who their ideal customersare. They have established an intimate rela-tionship with customers through contact,metrics, and responsiveness—and we cus-tomers don’t mind!

I’m happy to share my preferences because Iknow they will translate into better supportand products. A perfect marriage.

The significance of customer loyalty isn’t new,nor is achieving it easy. But once achieved, ityields increased profit and enjoyment whilelowering blood pressure for all involved.

“Consumption is the sole endand purpose of all production;and the interests of theproducer ought to be attendedto, only so far as it may benecessary for promoting that ofthe consumer.”

-Adam Smith, 1776

Valerie Atkin is founder andprincipal of Wells Street Con-sulting Group, an organizationwhose mission is to assist inthe development of balanced,fully functioning individualswho can create successful or-ganizations of their own. For

more information, visit www.WellsStreet.com oremail Valerie directly Valerie@WellsStreet.com.

MARCH 2011 OFDEALER PAGE 20

2011

m | t | w

June 13–15The Merchandise MartChicago

neocon.com

Come see.

Pre-Register by June 11th & Save | Onsite Registration is $25

By Ken Stiefler

Did you know the majority of

closely-held and family-owned

businesses will change hands

within the next five years?

Are you like many business

owners who are simply too busy

working to think about how you

would transition the ownership

of your company, think you’re

too young to consider exit

planning or just do not know

where to begin?

Consider the case of two brothers who were the owners of amulti-million-dollar office furniture dealership. Instead of plan-ning ahead, the brothers grew tired of government regulations,changing tax codes and the day-to-day grind of running thedealership and decided to get out of the business.

MARCH 2011 OFDEALER PAGE 22

Why Exit Planning?

continued on page 23

Exit Planning - continued from page 22

Sale to a third party was not an option because Tim and Jim werenot willing to stay on after the sale—and they had failed to developa strong management team, which any savvy purchaser would re-quire as a condition of purchasing the company.

Transferring ownership to a group of key employees was also outof the question. None had been groomed to take on this type of re-sponsibility and nothing had been done to fund this type of buy-out.

Both owners were too young to have business active-children, sotheir only option was to liquidate. Their highly profitable company,however, had little worth beyond the value of its tangible assetsand with the sale of those assets, dozens of employees lost jobs,the business disappeared and the brothers left millions of dollarson the table.

Whether you’ve thought about transferring ownership to family,co-workers, a third-party or liquidating, your education about theexit planning process begins now and your knowledge and prepa-ration can possibly mean millions of dollars to you when you ulti-mately leave your company.

I want to encourage you to work on—not in—your business. Byengaging in an exit planning process that you control, you can helpto avoid the sad but all too common fate of the dealers above.

An exit planning process begins by asking yourself the questionsbelow. As you work through them, you’ll see that it’s never tooearly to start planning.

1. Do you know your retirement goals andwhat it will take—in cash—to reach them?

It is possible to determine what annual after-tax incomeyou will want during retirement (in today’s dollars), thattakes into account expected longevity, inflation, medicaland long-term care considerations, reasonable rates ofreturn, as well as realistic costs for living the “good life”that you are envisioning.

2. Do you know how much your business isworth today, in cash?

Having your company properly valued to meet stringentIRS requirements will give you a true idea of where yourcompany is and where it’s going.

3. Do you know the best way to increase theincome stream generated by your owner-ship interest?

Identify the drivers that will help you increase the value ofyour business and act as a guide to your continued effortto boost income.

4. Do you know how to sell your business to athird party and possibly lower your taxes?

If you are an S corporation and have been for a while, sell-ing to a third party can substantially mitigate the tax burden

by subjecting the sale proceeds to one level of taxation ver-sus two levels of taxation as with a C corporation. Thatmeans more money in your pocket at the end of the day.

5. Do you know how to transfer your businessto family members, co-owners or employ-ees while lowering taxes and potentially en-joying financial gain?

Insiders rarely have the one thing you need to successfullyexit your business—money! There are time-proven tech-niques that can make this type of transfer a successful re-ality and strategies that can mitigate the tax burden. Thisplanning takes time, however, so start NOW!

6. Do you have a continuity plan for your busi-ness if the unexpected happens to you?

What will happen to your business should tragedy befallyou? What would you want to happen with your businessunder those circumstances? Will the value you have builtup in your business be lost or will your family be able to getthat needed value out to maintain their current lifestyle? Awell thought out business continuity plan is critical to beingable to answer those questions in the affirmative!

7. Do you have a plan to help secure financesfor your family if the unexpected happensto you?

If you don’t, and if you are like most business owners, whereyour business represents 70% or more of your investible es-tate, you are probably looking at a serious problem. Yourbusiness may be the best investment you ever made, but itshouldn’t be your only investment. Diversify and grow addi-tional wealth outside of your business. In effect, estate plan-ning becomes a part of your business planning.

Creating and implementing your exit plan may be the most impor-tant business and financial event of your life. Work with qualifiedprofessionals who can effectively and efficiently provide clarity inhelping you define all of your objectives, who will organize all theplanning steps and people involved including integrating your es-tate plan, personal financial plan, business development and transitionplans, cash flow, projects, etc. The result: specific recommendations (aroad map) to achieve your objectives!

Ken Stiefler, CLU, ChFC, CExP is president of eXITS LLC,a business exit planning company and member of theBusiness Enterprise Institute’s Network of Exit Plan-ning Professionals. In the financial services industryfor over 26 years, Ken's clients are primarily businessowners seeking to protect and build their wealth witha focus on business transition and exit planning strate-gies. Contact Ken at ken@theexitfactor.com.

MARCH 2011 OFDEALER PAGE 23

Jaynie Smith

Uncover Your Competitive AdvantageRealign Marketing and Management Strategies to Transform your Business for Future Success

Jaynie Smith’s customized keynote for this year’s OFDA Dealer Strategies Conference will focus on helping you uncover and clearly define your true competitive advantages and realign marketing and management strategies to “transform your busi-nesses for future success” – the theme of OFDA’s 2011 event. In an industry and general economic environment characterized by unprecedented competition and extreme margin pressures, her focus on differentia-tion of your organization from the competition will help your company close more sales, improve margins and retain more customers.

OFDA Dealer Strategies ConferenceKeynote Speaker Jaynie Smith

Keynote Speaker

Founder & CEOSmart Advantage, Inc.

www.ofdanet.org/conference

Jaynie Smith Highlights: 15 Top Performer Awards for CEO Coaching

Contributing Business Expert Columnist to Affluent Magazine Featured in telecast with Jay Conrad Levinson of Guerrilla Marketing Association Guest on Bloomberg Radio, WABC Radio "Brinker Show,"& NPR affiliate WLRN

Featured in Entrepreneur, IndustryWeek, Investors Business Daily & Business Strategies Author of the best-selling Creating Competitive Advantage (2006) - now in its 10th printing Radio host of Mind Your Biz Today on The Biz - South Florida’s only business radio station