Most investment decisions for a SMB are big ones. So, what would you do if your business was humming along nicely and just at the point you’re making a BIG go/no-go expansion decision, the economy slams on the brakes? Do you:
- Hunker down and hopefully last it out with the wait-and-see or no-go route?
- Get resourceful and go for it?
That’s the crossroads decision Paul Neustadt, president of Neuco, Inc. in Downers Grove, Ill., and the four other owners faced in 2007 with the recession just starting to pick up steam. Explains Neustadt, “Neuco was growing and adding employees but we found ourselves facing two big issues with our (then) current building configuration; not enough parking, and not enough office space. Even though we liked where we were and really just wanted to stay, we were prepared to move, even out of state, since we honestly didn’t think we could expand the building AND get the parking spaces we needed. But we invited a commercial realtor in to give us an appraisal and he came up with the amazing suggestion to expand the building over the detention pond on our property. Issues solved.” And that’s when Neuco got even more resourceful.
“In a recession, you have to ask yourself, ‘How bad is this going to impact us?’ before moving forward with doing something like this (a major building expansion),” adds Neustadt. “What we did was gather the Village of Downers Grove mayor and members of the Economic Development Committee, plus representatives from DuPage County and the State of Illinois together, and basically said, ‘This is what we want to do and we need your help.’ They were receptive and willing to help us secure the bonds to do the project and we also qualified for the EDGE program (Economic Development for a Growing Economy) tax credit.” The EDGE program is designed to offer a special tax incentive to encourage companies to locate or expand operations in Illinois when there is active consideration of a competing location in another state. For a company with 100 or fewer employees, such as Neuco, the company must agree to make a capital investment of $1million and to create at least five, new, full time jobs in Illinois.
Actual construction finally began in April, 2011, and was completed in December. The modern, 2-story building literally “floats” over the detention pond with a 50-stall parking garage on the ground level and office space above complete with a full kitchen and lunchroom, large classroom area, and ample open/storage space for future expansions. They also incorporated what Neustadt refers to as “LEED-Lite” sustainability elements, such as building automation and lighting, wherever feasible.
Neuco isn’t finished either. They are in the process of converting the old office space back into additional warehouse space and weeks away from installing a substantial warehouse automation project.
Hindsight always being 20/20, Neustadt is “99.7% positive” they wouldn’t have done anything differently other than some functional tweaks they uncovered once they got into the building. “We would do it exactly the same way all over again. Doing the expansion when and how we did it gave our employees, suppliers and customers the clear message that we are in business for the long haul. I believe it actually gave our business sustained momentum and our employees confidence during the recession…something hopeful and good was going to come out of this downturn.”
Most investment decisions are big ones for SMBs. Neustadt offers this advice he learned for other SMBs contemplating go/no-go decisions, regardless of the economic climate, “Don’t be afraid to reach out to your local municipality, your Economic Development Committee, your county and your state officials for assistance. That’s what they’re there for and it certainly makes some of the decisions easier. Sometimes, you’ve just got to take an educated flyer.”
In other words, get resourceful and go for it!
More about Neuco
In business since 1907, Neuco is a leading heating, ventilation, air conditioning and refrigeration (HVACR) master distributor providing control products and replacement parts to other HVACR distributors and wholesalers. Customer service is the #1 priority for every one of their 60 employees with stock from over 36 control manufacturers in their 40,000 square foot, soon-to-be fully automated warehouse. Visit Neuco at www.neucoinc.com or call them at 800.323.7394.
Gail is a national small business and Milwaukee marketing examiner. Please click on the Subscribe button above or below if you wish to continue receiving articles from Gail. She’d be thrilled if you did.