When Max Polin started Huges Enterprises in 1950, his goal was to provide convenience and competitive pricing as a wholesale distributor of supplies to the packaging industry.
In over half a century, those goals have remained the same, even if the tools and strategies Hughes Enterprises uses to reach those goals have changed with the times.
Today, Hughes Enterprises serves its industry across the country, with a special focus on Delaware, New Jersey, and South Eastern Pennsylvania, from their home base in Trenton, New Jersey, under the leadership of Max's nephews Neal Magaziner and Stephen Polin.
Max, although now retired, still comes into the office to pass along his time-tested advice.
"What he's forgotten about business is probably more that we'll ever learn!" jokes Neal, who took some time to talk to Family Business Strategies about the company.
Like any family business, Huges Enterprises faces a number of challenges, such as compressed profit margins and weathering a difficult economy in a time of rising costs. Does he see an end to these turbulent times?
"I do see the industry picking up. Had you called me three months ago, I would have said no, but in the last couple of months I¥ve seen it finally start to pick up again, which is encouraging."
Being a family business certainly adds another dimension to the current economic trends, Neal says, "in the sense that we don¥t have a bottomless wallet!" But he is quick to acknowledge that these same challenges are faced by all businesses, public and private.
"That's why the squeeze is on. So many of the Fortune 500 companies that we deal with that do have unlimited resources are facing the same issues we're facing.
Hughes has met these obstacles head-on, not only by keeping on top of the competition, but by shifting the idea of his business away from a simple wholesale model to a more service-oriented, customer centered philosophy.
"I think we address these challenges as much as possible by trying to differentiate ourselves from our competitors. Every day I wake up, I try to think about how we are different from everyone else who does what we do, and try to develop strategies and ideas that will help us differentiate ourselves.
"We were founded as a company that sells products, but today we want to look at ourselves as having more reliance on services and solutions.
Rather than walk in to a client and say `This is what we sell and we'll quote you a price, we walk in with a more consultative approach and find out what areas they're having issues with in regards to packaging and solve those problems for them.
Because once we solve those problems for them, they really want to turn that business over to us. Rather than walk in and say `We want your business with supplies' we walk in and say `We're here to help you.' It's a different focus for us today."
Their ability to apply their consultative approach far beyond their back yard has been greatly expanded by their participation in a national affiliate network called Afflink.
Founded in 1977, Afflink acts as both a buying and selling network that enables distributors and suppliers to more effectively transact business, develop innovative business solutions, gain new customers, and increase profitability.
"Afflink joins together a variety of suppliers which provide businesses like mine and links those people or companies with member distribution companies. There are about 400 members across America.
The beauty of this Afflink relationship is that, years ago, we would walk into a company and they would say `Well, we'd love to do business with you, but we've got a location in Dallas and a location in Seattle-- can you handle those locations?' and we'd have to walk away because there was no way we could handle them as a local company.
Now we say absolutely! We turn it back over to Afflink and they pull in distributors from those particular areas and tie it all together through a common billing system. All the distributor members are still independently owned, so if you'¥re a member of Afflink, you've got the best of both worlds.
But even growth can come at a cost. A successful business creates new challenges-- Employees, and even the top brass, can soon find themselves overextended, as Neal found out over the summer.
"In August, we brought on a vice president of sales. I got to the point where I saw all the things I was doing had really stretched me to the limit, and I wasn't performing up to my standards. So I decided to back out and get a little bit of help. Our VP of sales is now able to focus on the sales end of the business, which allows me to focus more on the operations end of the business.
"If you go back five years, everything that happened in this business crossed my desk and Stephen's desk. Today, we have a middle management team and they direct the groups under them.
It's been a very positive thing because they're more in touch with customer service issues, and it relieves us to be able to focus on longer term strategic issues instead of being grounded in the day-to-day tactical operations.
"Stephen, the company president, is more involved in the trucking end of the business and in purchasing. We do cross over [in our roles] probably more than most owners or family members in business do. We have areas that we focus on, but we consult each other constantly, and discuss things more than most. We don't have a specific delineation of responsibilities."
Neal has also found that peer groups are an excellent opportunity to discuss ideas and to develop working relationships with other business leaders in his industry and beyond.
"Seven or eight years ago, I was put on a board with 3M, our largest supplier, which they called their Distributor Advisory Board.
The board was a great opportunity for me to talk to other people who do exactly what I do in other parts of the country. The learning that took part as a result of that group was just immeasurable.
After that association, I was on the steering committee with Afflink, and again I got to meet and discuss issues with my contemporaries a few times a year. I'm looking to get back involved with that type of situation because you do find that a problem you really thought was only your problem is the same issue others are facing.
"I've made many friends through these associations, and every few weeks I pick up the phone and we talk and compare notes. We learn from each other constantly. Even though I'm no longer a part of those boards, I'm in contact with these people all the time."
Hughes Enterprises has developed a web presence through their information and e-commerce site, www.hughesent.com.
"We'¥re more set up to link up with our existing customer base. Our model isn't like Amazon.com-- we don't have people just looking up our site online and putting in their credit card and buying one of our products.
It's really more addressing an electronic link with those customers we already have or those we're courting. It's a B-to-B model rather than a B-to-C model."
With so many businesses growing on the Internet, and with so many high-tech options being touted as the solution to every business woe, I wondered what kind of role technology plays at Hughes. Neal admits that he views these cutting-edge toys with measured skepticism.
"You've got to be careful with technology.
For a small company, we're on a good technology curve, but I'm always a little careful with technology. I see all that information about equipping your sales force with Palm Pilots and all those tools, but while they have big wow factor, you have to ask yourself if they will truly help you increase revenues or if they will only increase expenses.
You can spend an awful lot of money on technology, but you need to be sure that it will actually help your business, not just increase your wow factor.
"However, having said that, I think that for a small company, what we do with our e-commerce site and what we're able to do in terms of customization and linking up electronically I think we're on a good technology curve.
As we finished our talk, I wanted to ask Neal the same question we've asked other business leaders: What's the best piece of advice you can offer to someone else in a family business?
"In running a family business, I think one of the most important things is keeping your ego in check, because you're always going to have disagreements about how to run the business with those you're running the business with.
You tend to think you have all the answers, but the advice I'd give anyone in a family business is really to take a deep breath, step back, and really listen to the other person's perspective. They may have some very good points that you need to consider."
