Plain Talk Consider Partnering Up COLUMN BY ROB BUKSAR Last month I praised Nick Staub’s thinking on “partnering up.” Let me be real clear— there are many possi- bilities and approaches to partnering up. Like é most things it’s not for everyone. But if the shoe fits, it very well could mean sal- vation for a small owner/operator. If you think changing strategy is not necessary for you, let’s revisit some facts about where rebuilding is today. Sometimes hearing it again is like hav- ing a wooden leg and being constantly reminded you’re limping. Nevertheless, this background info better enables me to offer one man’s opinion of what might be a solution to the commercial woes some of us are experiencing. Here’s what we know but sometimes try to forget: *You have been circumvented. Many customers that formerly came to you for “A” and “B” level units and merchandise now go to the dealer or large corporate chain distribution for new and cheap. You may still see this customer from time to time but it’s only for parts or units he can’t find within his new distribution network. * Replacement component parts are difficult to find for late model units. Suppliers can provide a new replacement unit but components to rebuild it are “slim pickins” or costly. This is beginning to translate into smaller margins for the rebuilder. ¢ The dealers and corporate retailers are able to sell new units to the pub- lic in many cases cheaper than you can buy them from your sources. ¢ The OEM guys are not interested in having you involved in their distri- bution chain. They have eliminated the margins for jobbers so you’re now cut out of that picture. eA small operation is often overly dependent on one major customer. ¢ It’s almost impossible to work on your business and in your business at the same time. These days, being small and self-employed is difficult because you’re working for a crazy person—yourself. I know, I’ve done it for 30 years. So now that some of you have revis- ited your relatively needy position, I offer encouragement to consider the possibility of partnering or co-venturing with another much larger company that’s probably unlike your own. Start by looking outside of our indus- try. Most of us can remember when American highways were dominated by small trucking companies and inde- pendent owner operators. How much of this do you see today? Next to none. Where are they? Those that didn’t retire or bail out of transportation have either been bought up, crushed, merged or signed on as a subcontractor to a larger cartage company. The larger company provides all the logistical support, mar- keting, sales, billing, finding loads and collecting the money. The former inde- pendent now does only what he did best when he was on his own—deliver loads and take care of his truck. He also can now take advantage of whatever cost reductions are offered by the larger company such as cheaper fuel, parts, maintenance, and insur- ance. He can probably even participate in the larger company’s retirement plan, and there’s a good chance it’s better than what he had if he had one. Last but not least, cash flow is no longer an issue. For decades auto and truck parts in this country were dominated by independently owned distributors. Generations of the same families owned and operated these concerns. How many do you see today? Darn few. Did the former independents bail out when the corporations moved in? Some retired, some died, some changed industries, some were bought out, merged or crushed. Yet many are still in parts and doing well. When they realized that they couldn’t beat them they joined them. Why? Because this is business and it just made good financial sense to do so in many cases. I could go on and on from one indus- try or business to the next. Everything from gas stations to grocery stores, dry cleaners to messenger services—even medical offices have few independents remaining. Most of them are now part of larger corporations. The cost of doing business coupled with the indi- vidual cost of living has gotten too high for a small concern to tackle on its own. By the time the small guy pays his overhead there’s little left. Is your wife’s job subsidizing your small business? Unless you have an exclusive, unique product line or service, or a captive mar- ket, you are probably working a lot harder for a whole lot less, or you’re hardly working at all. The Illusion of Independence I wouldn’t be concerned about relin- quishing the illusion of your independ- ence and becoming captive to a larger corporate partner or investor. I’ve been a rebuilder for 30 years and have known armies of guys like myself who thought they were independent when actually they were totally in bondage to their lit- tle business (job). How many ball games, PTA meet- ings, birthday parties, holiday festivi- ties, vacations, or dates have you missed due to the business? There are costs involved in everything and lunch for a small business owner gets more expen- si