What's Going To Happen In '82?

 

Distribution company president. "We started out in 1936 as a retail laundry. Three years ago we decided to get out of the laundry business because it was our least profitable and most labor-intensive area, and it was in a declining industry. But I didn't have the guts to say I was going to lay off 35 people. There's a lot of emotion tied up in my business.

"So we decided instead to expand the laundry division, in association with the health-care industry. We see the hospital as being an integrated customer -- over a time we can pick up one service, then another. From a business point of view, it makes a lot of sense. I see about 100 jobs being added to our present staff of 50 over the next year.We'll probably grow from $2 million in sales to $4 million in the next two years." -- Joseph A. Williams, president, Arrow Services Inc., Chicago, a commercial/industrial laundry and a distributor of uniforms and paper products, with annual sales of about $2 million and 50 employees.

Manufacturing company president. "Ten or 11 years ago I was sent on a trade mission to Japan by the Chicago Association of Commerce and Industry. I soon learned that I couldn't teach the Japanese anything, so I hired an interpreter and asked him to take me around to small companies making miscellaneous metal products. I learned some things from these small businessmen that I put into practice.

"What I learned was, number one, when you hire somebody, don't consider him an employee; consider him part of the family. You don't fire him or lay him off. How do you do that? You have to hire a minimum number of people. If you think you need 50, don't hire more than 40. When you get very busy, either work overtime or obtain temporary help.

"But the nucleus, the people you employ permanently, are told they will have their jobs as long as the company stays in business. As a result, you get a certain type of productivity out of them. The results are much better than I can get in any other operation." -- Allan Harris, president, Harris Hub Co., Harvey, Ill., a manufacturer of bed frames and miscellaneous metal products, with sales of $20 million and 200 employees.

Trade association executive. "Manufacturers are going to pay for marketing services as the marketing service is done, rather than making the very definite investment in salaries and sales forces. That way, their sales cost is exact and definite on the piece of goods that goes out the door to the shipping dock. The use of manufacturers' agents is increasing 20% per year.Our membership is increasing at least by that." -- James J. Gibbons, president, Manufacturers' Agents National Assn. in Irvine, Calif.

Construction company executive. "We are cutting back. About 60% of our business has been road building for federal or state agencies. The state of Illinois has the smallest road program in this fiscal year, in real dollars, that it has had in 20 years. The private sector is so far down in this part of Illinois that those sales have almost been cut in half. We had a payroll of over $300,000 that we'll probably cut by $125,000.

"The other factor affecting us is the labor problems we've had this year and the enormous inflationary settlements that took place in the construction trades. As a result, I think you're going to see a tremendous influx of small construction companies popping up, and a tremendous movement to nonunion construction in the state. A company like ours, which has always been a union company, will have to consider that. We would never have thought of doing that until now." -- John Holub, executive vice-president, Rockford Blacktop Construction Co., Rockford, Ill., with 400 employees.

Economist. "Our task force found that, from 1975 to 1979, firms with 20 or fewer employees accounted for 56% of net employment added in the economy. We also found that much of that creation is concentrated in relatively few firms over a relatively short term. Most of the gain in employment was added in the firms' first two years.

"Clearly, a lot of the firms disappeared. To get one net new job among new firms, we found, about two new jobs have to be created just to take account of the loss. Among old firms roughly three jobs have to be created just to get one net new job.

"This suggests that an emphasis on creation of new firms and new jobs is very important. You lose jobs no matter where you are in the country or in the business cycle. The difference between areas that are growing and dynamic and those that are not is in the creation of new employment rather than the prevention of the loss of old." -- Michael Teitz, professor of city and regional planning, University of California at Berkeley, and a member of the Urban Small Business Employment Project of the state of California in 1980, speaking at an INC. 200 awards banquet in San Francisco, October 1981.

This article contains selected results from INC.'s subscriber survey and comments by some participants in the three small business forums. For a complete summary of findings and a list of all the forum participants, write on your company letterhead to: Outlook Editor, INC. Magazine, 38 Commercial Wharf, Boston, MA 02110.

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