For Dirk Benthien, the difference between $1.6 million and $16 million is about 2,500 miles.
Benthien, the co-founder and CEO of CPi — Construction Polymers Inc. — relocated his foam insulation business from Moorpark, Calif., to Barberton in 2006. The next year, the company — which had posted 2006 revenue of less than $2 million — soared to $7.2 million. And even before the end of 2008, it had more than doubled its previous year’s revenue as the exploding company moved again, this time to North Canton.
Meanwhile, CPi jumped from five employees — only two of whom made the move to Ohio — to 27.
But initially, the move wasn’t about the revenue; it was all about the customers, many of whom were traveling too far for training with CPi equipment.
“We were losing proximity to our customers, coupled with excessive travel expenses, even difficulty communicating because of time zone differences,” Benthien says. “We spent more and more time flying across the country and not serving customers locally.”
He learned how quickly your business can grow if you choose a location that has you optimally based to best serve your clients. First, find an area that is central to your customer base. Benthien plotted his 500 customers on a map and marked their distribution in a line stretching from Toledo to Atlanta.
Next, track where your competitors are and, more importantly, where they’re not. The presence of many insulation companies in the South sent Benthien north, where he could command the market.
Then, look at the economic market data of different regions to find communities where your business will fit. High unemployment rates, for example, could signal a large pool of potential employees.
But you don’t necessarily need to be downtown to attract attention and employees. CPi got lost in the Los Angeles bustle before Benthien learned that a small company can reap more success in a small town.
To zoom in on a location for your next office, consider the surroundings. You want to be accessible to customers, near freeways or airports. And if you plan on frequently bringing visitors into the office, pick a spot near hotels and restaurants.
Although your employees will be using your new space more than anyone else, you should still set it up with the customer’s convenience in mind.
“We have a nice training center that demonstrates to the customer that we’re serious about the business, that it’s not only about making profit, but it’s about putting it back into the business, investing in services for the customer,” says Benthien, who included in the new building customer perks, such as empty offices with wireless Internet and an observation deck for visitors to scope out equipment.
And while you’re making those customer-focused improvements, don’t let communication lapse. Keep your old lines of communication available while gradually weaning customers off them and over to new ones.
For the first eight months after the move to Ohio, Benthien forwarded the company’s California phone number to the Barberton office through a separate line.
“We knew when someone called the old number, and every time, we told people, ‘Please make note of it; we have a new number,’” he says.
Remember that while you’re taking huge strides to improve your connection with customers, it’s the small steps during that process that they’ll notice the most — such as simply answering their calls.
“We always had the attitude that the phone is ringing, we’re going to talk to the customer now,” Benthien says. “... Once you hang up, then you go back to worrying about getting the telephone installed properly or whatever it may be.
“The building is not going to run away. If you don’t get to it today, the problem’s still there tomorrow. The customer that you chase away today, that’s a loss forever.”
A clean slate
Dirk Benthien learned his relocating lessons when he moved his business from California to Ohio in 2006 — and revisited those lessons for a local move the next year.
After the first move, CPi — Construction Polymers Inc. — swelled from five employees and $1.6 million in revenue to 17 employees and $7.2 million in revenue. Benthien, the co-founder and CEO, used the bigger budget to get an even bigger building.
“Get as much space as you can afford, because once you have it, you will fill it with additional business,” he says.
Budget with building improvements in mind, but be aware it could cost more than you expected. Benthien planned $75,000 for the first move, and it cost $200,000. Have open credit lines for unexpected renovations, because you shouldn’t have to settle for less than you need.
“You have a clean slate, meaning that this is the perfect opportunity to look at ... what is not working well and then address all those issues in the new facility, from enough offices for the employees to proper material flow,” he says.
And although CPi moved again the next year, soon after the move from California, that should be the
exception to the rule. When you move your company, do it with the mindset that you won’t be moving again for a long time.
“You only get one chance,” he says. “If the carpet looks bad, this is the opportunity to do it right. In half a year, it will be more difficult. It’s another interruption, and you will procrastinate.”
How to reach: CPi — Construction Polymers Inc., (330) 861-5200, (877) 300-3150 or www.cpifoam.com or www.ezerosolutions.com