Des Moines Register
10-08-06
Small firms revamp minus Maytag
As the appliance maker keeps shrinking, Newton businesses seek out new ways
to grow.
By BONNIE HARRIS
REGISTER BUSINESS WRITER
Newton, Ia. - For 16 years, Maytag was the biggest source of business for Cindy
Bruner's company.
Her graphic design firm, Art a la Carte, printed brochures and training materials
for Maytag. The brochures, training materials and manuals - printed in up to 13
languages for four of its product lines - made up 75 percent of Bruner's work. It
was because of Maytag, she and co-owner Cathy Rickers said, that they grew so
quickly from two employees to more than 12.
But now Maytag is the reason they're reinventing themselves, along with other
small businesses and even Newton itself, which relied so heavily on the
appliance maker to make a living.
"It took some real soul searching to figure out how we were going to replace that
business and keep growing," Bruner said. "We just knew we weren't going to let
the Maytag situation bring us down."
Immediately after Whirlpool made the announcement that it would close the plant
and headquarters in Newton, Bruner and Rickers hired five more employees to
begin their "diversification process." They added a multimedia component to their
print product offerings, and began to attract new clients with a greater geographic
reach. Their company now designs Web sites and develops updates as needed
by each client, and has a menu of "a la carte" services that range from creating
logos to coming up with a new corporate brand.
Where they once had about 20 other clients besides Maytag, Bruner said they
now have more than twice that.
"Our customer base is different now, but that's what we want," said Bruner,
adding that they hope to continue working for Whirlpool but have not finalized a
relationship so far. "We changed the way we think about ourselves. We're not
just a design company, we're an extension of the clients we serve."
As Maytag's white-collar jobs shrink - the next wave of cuts is expected this
month - the company's former suppliers and other business owners are learning
how to switch gears and diversify.
That approach will make the difference for businesses in Newton, said Ken
Stone, a retail consultant in Ames.
"And attitude is especially important to small businesses, which absolutely must
face the facts and think of other strategies they can offer," Stone said. "Certainly
a lot of our small-business people are very adaptable, and I never cease to be
amazed at their ability to bounce back.''
John and Elaine Mattingly, who own the longtime family-run Mattingly Music and
Bookstore on the town square, have a "cautious" attitude but a creative spirit.
Even before the Whirlpool announcement, the couple began what Elaine
Mattingly called "the Maytag transition" - rearranging the store's displays to give it
a different feel while still keeping its vintage trademark.
"We've been dealing with uncertainty for a very long time," Elaine Mattingly said.
"But we knew we were going to have to do more."
The Mattinglys partnered with another business owner, Colette Hill of Sugar
Grove Vineyards, to form a four-course dinner and performance event at the
nearby winery. The Mattinglys write, produce and perform in the shows, while Hill
organizes the meals and wines. Local actors and musicians are hired as well.
The events draw an audience of up to 50 people.
"It was a real natural partnership because we are in the music and book business
and we're writers and musicians ourselves," Elaine Mattingly said. So far they
have hosted four dinner shows with five more planned this year.
"We have lots of reasons to be hopeful, but lots of reasons to be worried because
replacing 3,000 jobs takes time," she said.
David Swenson, an Iowa State University economist, said the loss of jobs will
multiply in Newton, beginning with those businesses that had a direct relationship
with Maytag and extending to the community level by way of cutbacks in
spending and sales.
"I call it the Main Street effect, and it has to happen," Swenson said. "Once you
lose those jobs ... that loss of labor has to multiply itself through the economy."
Bill Johnson, who owns Meisner Electric, said he has already experienced that
trickle-down effect in his business. General service calls are down because fewer
dollars are being spent on construction additions or luxury purchases that require
electrical work, he said.
"Those calls don't come in anymore," said Johnson, whose company once did a
large amount of work for Maytag.
Johnson said he has adjusted to the change by going after jobs in a broader
market, including Ankeny, Iowa City and Des Moines. He also was able to land a
$2.5 million contract with the Newton racetrack.
With more hotels, restaurants and other development expected around the
racetrack, Johnson hopes his 80-employee company will continue to grow. He
offers an apprenticeship program to new employees. Nineteen new apprentices
will start this year. Four being trained now are former Maytag employees,
Johnson said.
"If we want to grow, we have to have good people trained and ready to grow with
us. There's no time to waste."
ADVICE FOR BUSINESSES ON THE CUSP OF CHANGE
The Iowa Small Business Development Center network has begun hosting
weekly counseling sessions to business owners in Newton.
Mike Hahn, program manager for the University of Northern Iowa's small
business development center, and Jon Ryan, the SBDC's state director for Iowa,
have advice for entrepreneurs facing change in their business climate:
KNOW YOUR EXISTING CUSTOMERS
In two years, most companies will lose between 20 percent and 60 percent of
their clients, Ryan said. "They move, they die, they decide they don't like you,
they try out a new competitor instead," he said. "Pick one, any one." Knowing
everything you can about your existing customers will help you retain them, and
that is far less expensive than having to find new ones.
KNOW WHAT YOUR POTENTIAL CUSTOMERS REALLY WANT
Do research, conduct surveys, network with other business owners about their
own experiences. Listen to all suggestions.
EXPAND YOUR REACH
Don't just think the market for your business is anything within a 20-minute drive.
With the Internet and other advertising strategies, "it's much wider than that,"
Hahn said.
PLAN AND THINK
Small-business owners often work their business day in and day out, but few put
a lot of thought into planning - until something happens, Hahn said. "Now is the
time to plan for everything," he said.
BE POSITIVE
"Just being open to change and possibilities is always go