More than 120 independent manufacturers' reps at the three-day Keystone 2005 program sponsored by the National Electrical Manufacturers Representatives Association (NEMRA), Tarrytown, N.Y., and Manufacturers Agents National Association (MANA), Lake Forest, Calif., learned about succession planning, the increasing globalization of the electrical world and new strategic positioning models for their firms.
Held in Louisville, Ky., in September, the rep summit, entitled “Many Industries — One Profession,” gave independent reps the opportunity to learn from their peers.
A common concern for all attendees at the conference is succession planning, and Keystone offered a lively panel on the topic. Joe Yore, principal, Electrical Marketing Services Inc., Altamonte Springs, Fla., recommended a slow, gradual approach to a succession plan.
“I would recommend five years for preparation and five more for its execution,” he said. “It's equally important to have the right person involved with you in your succession planning. All your work will collapse if that individual lacks character and competence.”
John McNellis, principal, McReps Inc., Oconomowoc, Wis., an independent rep firm that sells to specialized components manufacturers, discussed the eight-year succession plan his agency developed with his father. The plan includes 5 percent share of stock in the agency and an agreement where his father works five-to-six hours per week for a salary, incentives and benefits. He said the stock “went a long way toward having him keep his interest in the business and contributing to the success of the agency.”
Another Keystone panel discussion explored the positioning strategies some reps have used to move beyond the traditional rep model. Pat Cobb, principal, World Class Industries Inc., Hiawatha, Iowa, a rep that focuses on OEM manufacturers in agriculture, automotive, machinery and appliance industries, said his company has had to learn how to anticipate the opportunities and threats presented by a more globalized world.
“We're no longer a rep in the traditional sense. We've positioned our warehousing and computer capabilities to enable us to serve an international market. Our feeling is that if we're not prepared for tomorrow, the world will pass us by.”
Chuck Hopper, principal, CEH Consulting Inc., Punta Gorda, Fla., also saw opportunities in the global market and started up Datacom Electronics Inc., Norcross, Ga., as an importer of structured wiring products from offshore manufacturers.
“When I retired as a rep four years ago, I decided that it was time to look at something new and different,” he said. “We started an import company and established relationships with foreign manufacturers. Part of our motivation was to learn something new while becoming less dependent on others.”
Offering a diverse group of complementary product has led to new business opportunities for the Dallas-based rep Hugh M. Cunningham Co. The firm represents eight separate business groups, including fire and water, flow control, retail hardware, warehousing and factory service. Its primary lines include products for the plumbing, mechanical, electrical and lighting markets. Some of the company's business groups are one- or two-person operations, each with separate profit and loss responsibility.
Dave Cunningham, president and CEO, says the strategy allows the company to offer diversification with synergistic and complementary lines. “Altogether, we rep about 90 different product categories,” he said.