By Bridget McCrea
An article series that looks at what NAED members would do differently if they were starting their distributorships in 2014
Ask Burt Schraga what he’d do differently if he knew back in 1973 what he knows now and his answer is straightforward: “I would be slow to hire and quick to fire,” says this CEO of Santa Clara, Calif.-based Bell Electrical Supply. By that, Schraga means he’d take time filling the ranks and not hesitate when an employee or manager was no longer a “good fit” for the firm. “It took me 35 years to figure out that one key strategy,” says Schraga, who was 25 when he opened the doors to Bell Electrical Supply, “and even today I’m still probably guilty of not living by that rule.”
Schraga’s point is particularly relevant in challenging business environments where the companies that can operate in the leanest fashion tend to win out. “When business slows, you start thinning people out and realize that you probably would have fared better if you had gotten rid of the C and D players sooner,” Schraga explains. “They were probably costing you money and impacting company morale all along.”
Hiring Good Help
If he had to do it all over again, Schraga says he’d hire a good CPA and an attorney earlier than he actually did. “I can remember not seeking out good advice and it wound up costing me a lot more money than it would have if I’d paid for the outside support in those areas,” says Schraga, who today retains a few lawyers (one for labor law, one for general business law, etc.) and relies on a reputable CPA to manage Bell Electrical Supply’s finances and taxes.
“We waited way too long to get good help in the legal and financial areas,” says Schraga, who is also a member of EDIC, an insurance company founded by a group of electrical distributors, and Vistage, a CEO group that acts like a board of directors for a company. “Vistage is a peer group that does a very good job of holding you accountable,” says Schraga, “and if it doesn’t, then you’re in the wrong Vistage group.”
Looking back, Schraga says he also acquired EPL insurance to cover issues like sexual harassment and wrongful termination. “We waited entirely too long to take out this type of policy, which is actually quite reasonable in price,” says Schraga. “Of course, these are the things you don’t necessarily think about when you’re starting your company and worried about everything else.”
Power in Membership
Finally, Schraga says he’d attend even more NAED meetings and spend more time networking with his peers in the industry via the association. “You can learn more about pretty much everything mentioned here by attending NAED meetings,” says Schraga, who especially likes the peer group breakouts with non-competing distributors. “That’s a pretty powerful thing. Anytime you can get into a peer group of any sort you wind up learning an awful lot – both about running a business and about your industry in general.”
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