Steve Hanson

It’s no easy or automatic task to successfully plan an exit from an agency. Perhaps one of the more successful efforts in this direction can be seen in the experience of Steve Hanson, Western Safety Associates (WSA).

Established in 1974 and headquartered in Corona, California, WSA boasts more than 40 years of expertise in sales and distribution serving manufacturers in industrial safety, construction, medical, aerospace and industrial distribution marketplaces. The agency’s outside sales force is supported by customer service personnel, distribution staff and a warehouse distribution center in Corona. The WSA sales team is composed of representatives covering the Western United. States.

As he looks back over his career and describes how he reached the point where he began thinking about planning an exit strategy, Hanson explains, “While in college I worked part time ‘for food’ with a safety equipment distributor. The head of the company, Ed Mossinger, began coaching me and moved me up from the warehouse into offices’ services and then into the field as a sales associate. I spent a few years with Ed and then was recruited to WSA as a manufacturers’ representative. I started working as a junior sales associate in the 1980s at WSA.”

He continues, “Back then, the agency was a partnership between two men. In 1984 I was promoted to a position in the outside sales team and then later, as the result of a strong performance, was offered the opportunity to buy into the partnership. I accepted this opportunity. Our partnership evolved into my becoming the sole owner of WSA over the 30 years that became my career.”

As to how and why he was attracted to markets that WSA serves, Hanson notes that “The agency has always been a health- and safety-based agency. I enjoy health and safety and I take it seriously. It is a tremendous responsibility knowing that the consequence of us doing our job well means that we’re making people’s work environments safer.”

He adds, “Over the years WSA has gained a reputation for professionalism, integrity and a strong sense of conviction in the superiority of the products we sell. Our fluency between product lines and extensive knowledge of product capabilities distinguishes us when working on an end-user level. WSA end-user marketing targets the following sectors: manufacturing, construction, municipalities (city, county and state), oil and gas, mining, utilities and food processing. We constantly take pride in our ability to meet the needs of customers by evaluating their goals and recommending the right product for the right application. Our solution-based approach and vast contact network continues to successfully promote sales in our territories; Arizona, California, Nevada and Hawaii.”

Changing Industry Profile

Steve Hanson discusses the warehousing and 3PL services that WSA provides to some of its manufacturers with Brad Kemp.

Given his more than 30 years spent as a rep, Hanson can attest to the fact that the profile of the industry he works in today is quite different from what it was in 1984. “Definitely there have been changes to the manufacturers we work with. Originally, most of the manufacturers we worked with were family-owned. Through industry consolidation most of our manufacturers are corporate- or capital-investment-group-owned. Substantial changes continue in our industry, just like I’m sure the founder who preceded me saw substantial changes.”

He adds that these “Corporate acquisitions continue to cause consolidation in our market. An expected result of these acquisitions is that relationships and performance are thrown in the air when a principal is acquired.”

A changing industry profile isn’t all that he observes. “Certainly one new major change has been the rise in e-commerce, which is certainly a threat and is driving agencies like mine to really prove their worth to manufacturers. I know that in our niche we are still a necessary resource because if a company buys the wrong product — a product that is not compliant — it can result in injury. They need an expert to recommend products that meet the application needs.”

MANA’s Contribution

Continuing to speak of the manufacturers he and his agency have worked with over the years, he notes that MANA has been a major contributor when it came to finding principals to work with. “We are happy to be a MANA member. This membership has opened doors for us. Most of our new principals come from our MANA membership and from referrals from other representatives, distributors and even some from our current manufacturers.”

He continues, “Many manufacturers tend to go back and forth with their sales strategy between having their own inside sales team to relying on rep agencies like mine. That has always been in a constant state of flux. But now more than ever they are looking to the agency to demonstrate their value. It’s hard to show an ROI on face-to-face interactions and relationships, which is what we cultivate. We have tried to do this by adopting a CRM system to track our engagement with customers and distributors, but we don’t have it down to a science yet.”

The Succession Plan

Finally, on the subject of his transition from the agency, Hanson explains, “Approximately four years in anticipation of my leaving, I began succession planning. I hired a consultant to work with me in identifying my goals for leaving and my goals for the continuity of the agency. It’s not been a task without challenges, but I think by contemplating the future I was able to prepare my agency for the next phase.

“In 2019 I initiated a buyout agreement between myself and a group of key reps that I had worked with and mentored for several years. I now maintain a key role on our advisory council, but we’re working to transition me out of day-to-day management of the agency. These reps included in the buyout will be leading my agency into its next phase. By getting a jump on this process, I am able to have a role in shaping and training them to thrive after I step away.”

As the transition plan evolved, Hanson explained, “We did lean heavily on MANA, which had published several helpful articles on this subject, but aside from that there were not a lot of resources out there for a small agency like ours. It’s unfortunate and does make it that more challenging for a small company to carry out the task of succession planning and execution.”

He explains that basically it took about a full year to negotiate and complete the buyout. “We are still in a state of transition six months after the agreement was signed, but I hope over the next 12 months I’ll be off-duty as an executive.”

As to whether the journey from start to completion was free of any problems or concerns, he observes that “No change can be made without challenges.”

But he concludes with this bit of advice to other reps planning their orderly exit from an agency, “Read everything you can. For me it was very helpful to seek professional services for the appraisal of the company, for the legal aspect and help from my accountant regarding tax implications.”

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