Posted: September 28, 2011
A recession success story
The rollercoaster ride taken by Arrow Sheet Metal ProductsLarry Turner
There are many companies that have had up and down years since 2007, and Arrow Sheet Metal Products Company is an example of what many have had to manage.
The company manufactures and delivers high quality fabricated metal products to the communication, electronics and various other precision industries. Susan Cirocki leads this family business, which was started in 1976 by her father, Fred Cirocki. They specialize in servicing their customer needs as a job shop, spanning needs from small run work to long term production.
The company has been on a rollercoaster ride for the last three years. It had record years in 2007 and 2008, with revenues up in each of these years by 40 percent. The company had good operations processes in place and the market was strong, but 2009 was off a cumulative 40 percent from the gains of the previous two years. Arrow still performed at a level that kept key customers happy.
In 2010, the company began slow but finished strong, up 21 percent, due in part to some investments in capital improvements of new technology in some equipment and installation of new lighting on the plant floor (aided by an Xcel energy rebate program) that vastly improved worker attitudes, safety and productivity. So far, 2011 is also on the rise, a little above 40 percent over the last year.
Let's take a look at how Arrow Sheet Metal managed the turbulence in key business areas:
Through Susan's involvement with Vistage International, a CEO peer advisory organization, she heeded the advice of colleagues and varied invited speakers as the recession began -- holding on to cash, creating staggered and reduced work hours for employees, and implementing efficiencies to keep the plant operational. The company managed its resources of existing equipment, facilities and work force to balance the ups and downs of revenues and growth. It was largely a strategy of survival during 2009, paying significant attention to improving processes and planning.
With a philosophy that cash is king, Susan used the growth of 2007 and 2008 to prepare for 2009. The banking relationship was good, with strong understanding and commitment. Together, the company rode out the very tough year of 2009. With the help of the banking partner, Susan did the capital investments in 2010 that paved the way for the successes that followed. By working the plan, the company was successful at staying financially viable and sound, investing at the right time, and keeping a strong team of employees.
The company made improvements in its operations through upgrades in systems technology, first in acquiring new computers and adding software adjustments that improved efficiencies. This gave the company the ability to research customers to determine the best fit, reduce staff in the accounting department, and expand their sales reach nationally.
The sales and marketing strength of Arrow Sheet Metal is in a loyal customer base which keeps bringing referrals of new customers to the company. Susan uses personal contact, customer-centered events, and repeats best practice sales and marketing techniques and systems that have proven their effectiveness over the past five years.
The current mix of sales is predominantly in electronics (24 percent) and mining (23 percent), with medical (11%) and communications (10 percent) next, and transportation and green energy making up the remainder. Arrow is a national company, with about 60 percent of sales to Colorado businesses and the rest outside the state. Customers look at Arrow because it performs for them. Susan sees growth opportunities to continue in the mining, transportation and medical industries.
Concern about the future
Even though the company is performing well at this moment, the unknown about the turbulent economy is what keeps Susan awake at night. The recent volatility in the markets and economy are a concern with many business owners and requires focus on their businesses. Build your plan and work it, while staying aware of the economic changes.
Larry Turner is CEO of Roundhouse Advisors, Inc. and has over 25 years experience growing, starting up, repositioning, and revitalizing organizations. Roundhouse Advisors is a consulting practice focused on helping businesses increase enterprise value by managing pain, growth and owner exits. Larry is a consultant, public speaker, and the author of two books "Owner Exit Planning: Leave On Your Own Terms" and "Mapping Your Recovery: Grow sales in difficult times", www.roundhouseadvisors.com/growsalesbook . For additional information visit www.RoundhouseAdvisors.com
Larry Turner is CEO of Roundhouse Advisors, Inc. and has over 25 years experience growing, starting up, repositioning, and revitalizing organizations. Roundhouse Advisors is a consulting practice focused on helping businesses increase enterprise value by managing pain, growth and owner exits. Larry is a consultant, public speaker, and the author of “Owner Exit Planning: Leave On Your Own Terms." For additional information visit www.RoundhouseAdvisors.com