I don’t know about you, but when cash is tight, my first instinct is to save money rather than spend it. Yet, that’s exactly what these successful companies are doing. Take Maryland Glass & Mirror Co. in Baltimore, for example. It recently invested about $1.75 million in new equipment. While the company typically operates on a cash basis—“If we can’t pay for it, we don’t buy it”—officials felt strongly that an investment in new equipment was necessary to grow the business. The addition of a tempering furnace, in particular, enabled the distributor/fabricator to offer its customers a more extensive choice of products. And although it required a major cash outlay, it will save the company money in the long run. “We’re our own largest customer,” said David Dalbke, president. “We have purchased hundreds of thousands of dollars of tempered glass products from other sources. Now, we have control and can produce a quality product in a just-in-time delivery fashion.”
At Flat Glass Distributors, Jacksonville, Fla., the decision to invest in capital equipment was part of its effort to “redefine customer service” through improved turnaround times and higher product quality. So far, it’s paying off, said David Cates, vice president of sales and marketing. “We’ve been able to get customers because we’re doing a better job than our competitors,” he said. “It’s all about market share. I don’t get people telling me the economy is getting any better.”
To encourage businesses to invest in new equipment—and banks to lend them the money to do so—the Obama administration has proposed the creation of a $30 billion “Small Business Lending Fund” targeted at community and smaller banks to increase small business lending. In its FY2011 budget, the administration also proposed extending the Recovery Act provision to allow small businesses to immediately write off up to $250,000 of qualified investment, providing an immediate tax incentive to invest in plants and equipment.
If your company has found success in other ways, I’d love to hear about them as I continue to cover industry strategies for staying strong in a weak market. If you have a story to share, please leave a comment or e-mail me at email@example.com.
—Jenni Chase, Editor, Glass Magazine