Steve Timura is at that point in the life of his agency that he’s contemplating growth. As he states it, “I have been a rep for just a little over a year now. I finished my first year ahead of my projections. During that time, I kissed a lot of toads to find good principals. I still have a couple teetering, mind you. I have a pretty large territory to cover and really need extra people to help me do so.” He goes on to say he’s interested in learning from others just what his numbers have to be in order for him to expand.

As Shakespeare might pose the question: “To grow, or not to grow?”

Timura, who heads Team-T Engineered Solutions, LLC, North Ridgefield, Ohio, continues by describing how he got to where he is today. “When I decided to become an independent manufacturers’ representative, the company I used to work for was my largest principal. Like so many reps before me, that’s how I made the transition from direct employee to rep. I couldn’t have made the move without them.”

Timura was hardly a stranger to the rep way of going to market. As he explains, “I had worked in manufacturing and distribution and as such had been a customer to reps. In addition, in my capacity as a manufacturer, I managed reps. In both those positions, I experienced the good and the bad reps and I was convinced I could do the job well. That’s why I made the move.

“When the manufacturer I formerly worked for brought me on board, they gave me a very large territory covering Ohio, Indiana, Michigan, western Pennsylvania and West Virginia.”

Covering the Territory

He adds that while that’s a lot of real estate to cover, with a lot of hard work and the efficient use his time and all the communications tools he could muster, it’s been a successful transition. “As I’ve brought some additional principals on board, however, a couple of them have asked if I would be willing to take on Kentucky. I’m at the point now where I’m wondering if I need more of me out there.”

At the outset, Timura admits that the question of growing or not growing and the ensuing conversation about it are both probably inevitable for the single-man agency. “From day one, I knew I wanted to grow. As one person, you can only do so much. It’s only through growth that I can reach more customers, cover more territory and do a better job for my principals. How to get from here to there is the question.”

Timura admits that as he continues to weigh all his options, he’s faced with questions:

• “If I make the move to add personnel, what do I do to be sure that I bring on the right person or people?”
• “Should — or can — I make the move without adding more principals?
• “If I bring someone on, should it be someone who can generate business from day one?
• “What about their compensation?”

Managing vs. Selling

Then he adds the concern about whether the time he’ll be spending managing another person will be time taken away from what he really does for a living —selling to customers. “What would happen is that I won’t be selling all the time, but managing. Sure, I’ve been in sales management and I know how to teach and coach other people. Right now as an agency owner and a rep, I split my time between sales and performing administrative functions. Teaching and coaching would be something else I’d have to add. Maybe down the road that would be the model I would follow, but I’m not sure about right now.”

He notes that he’s even considered the possibility of contracting with a sub-rep but hasn’t found that prospect to be overly inviting. “I certainly understand the concept of sub-reps but when you consider that a commission might be about five percent, then there’s not an awful lot to split with the sub-rep. To me that doesn’t seem like much of an incentive for the sub-rep. I think the sub-rep would really be working with only one eye on the ball and wouldn’t be fully committed.”

Oh, and then there’s the question of how and where do you find the person you’d be comfortable with to join your agency. In addressing this concern, he says probably the ideal way to find someone is through networking with others. “Obviously what you’re looking for is someone you feel you can depend upon. One of the biggest things you’re looking for is whether the person is an entrepreneur like yourself. Are they self motivated? Do they possess a desirable work ethic?”

As he weighs all his options, Timura admits that long-term he probably will be bringing someone on board. “Not immediately though. As a relatively new rep there are some other challenges I’ve got to get under control.”

Seeking Advice

Having described his situation, Timura posed some of his concerns to fellow MANA members and he was gratified with the responses he received.

For instance, Mike Fowler, president of Evergreen Sales & Marketing, Inc., St. Paul, Minnesota, recommended that whatever is done should be done with an eye on a professional approach. That’s why he said, “First, keep in mind that we are professional salespeople, not reps. He adds, “Frankly, I hate the term ‘rep.’ To me that sounds more like a description of a door-to-door Fuller Brush salesperson or a guy who is just doing something to get by. It’s so important to keep in mind that we are professionals, and everything we do should be done in a professional manner. If the move to add personnel is done in a professional manner, then you will know when you have to have more feet on the street.”

He continues that for any independent manufacturers’ representative, there are some signs to look for to guide you towards potential growth:

• “The first sign is when you have enough income to support paying another salesperson.
• “The second is when a principal tells you the territory isn’t being covered.
• “Third is when you feel you can properly manage having an employee and paying expenses with a commission on his or her sales.
• “And, finally, the fourth sign is when all signs point to you losing principals if you don’t put another person on the street. Financial concerns outweigh all the others.”

Fowler was adamant in urging the agency owner to “Talk to your principals and ask them what they think of the coverage you are providing. I think you need more than a year in business to evaluate the need for another person. In addition, you may have to pay another person for a year or more before you see your first commission check and depending on the capabilities of your principal, it could take as long as three years to get a commission return. Just remember I said this: ‘It will likely take twice as long as you think and cost twice as much to accomplish what you plan for.’”

Before leaving the subject of agency growth, Fowler added a few words of caution: “Don’t be too concerned about adding lines. Stick to your products and the territory you know. There are all kinds of people trying to add lines and find more people to rep. That approach can cause you to move away from the people and products that you know.

Consult With Principals

Weighing in from the West Coast was Joe Perez, Applied Mechatronics, San Francisco, California. Perez’s advice included: “Consider asking your primary vendor(s) for an increased commission or retainer that helps fund the new hire if you feel the market is strong and you need to capitalize on its momentum, especially if you feel you’re almost there but can’t quite afford it yet. This may help put you over the hump. That said, you would have to show the principal making the additional outlay how much more focused your new hire will be on that line in return.”

In considering the challenge of having to supervise a new hire, Perez acknowledges that will “definitely take time away from being on the road. Ultimately, you hope the time you put in initially will pay itself back down the road. Speaking for myself, at the beginning this was tough for me as I’ve had to do the bulk of new-hire training.”

Finally, Perez cautions that whatever action an agency might take there can be some danger. “First there’s the danger of growing your company too fast. There are always going to be peaks and valleys in your agency’s performance. You want to be sure that whatever you do, you can survive the valleys and grow during the peaks. We’ve been lucky with the decisions we’ve made.

“On the other hand, there can be danger in taking no action and failing to grow with your growing business. You don’t want to be in a position where there’s the possibility of losing a line because you don’t have the personnel to handle business. Remember, when your principals are paying out commissions that are two to three times higher than when you started and you haven’t grown to keep pace, you could be at risk.”

A Manufacturer’s View

No discussion of agency growth should take place without input from a manufacturer, and that’s what William H. Ingram, Fusion Tank & Silo, offers.

According to Ingram, who spent several years as an independent manufacturers’ representative before taking up residence on the manufacturer’s side of the desk, “The one and only reason to hire a second salesman is that you are having trouble keeping up with your current business. The success of your business is based on how well you take care of your customers. If you are starting to slip and missing deadlines then you’d better get someone aboard pronto! As far as how to finance the second person, you have to search out someone that already has a customer following and can bring some of those customers to you. That will be added income.

“Also, consider bringing the second person on as a partner and have him buy into your business. Then he will have some ‘skin in the game’ and you won’t have to worry about him making money for you.

“Last, to give you a time frame, I started my rep company many years ago. The first year it was just me. The second year I hired a full-time secretary to handle phones, typing letters, calling leads, making appointments, quotes, etc. That kept me on the road selling. The third year I hired a salesman and the fourth year I hired a serviceman and a third salesman. I continued the firm to 11 years with the five of us, until I sold.”

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