With so many dealerships closing or being acquired and their owners retiring, it’s refreshing to hear of a new independent office products dealer opening its doors. Sometimes, all it takes is a gentle nudge at the right time.
By 2020, Michael Thompson—founder and CEO of Commercial Business Supply, Chandler, Arizona—had been in sales for 30-plus years, including the last 13 years with the same dealer. But on September 1, at the height of the COVID-19 pandemic, he was let go.
“I had created a small LLC, toying with the idea of maybe going out on my own at some point,” he recalls. “When I lost my job, I figured now was the time.” Exactly one month later, Commercial Business Supply received its first order.
Learning the ropes
“The biggest challenge was the financial side of things,” continues Michael. “I’d touched on some of that over the years, but I was really always in sales and sales management.”
To gain the knowledge he needed, Michael partnered with a CFO for hire who taught him and his staff to get them started on the right track. He also turned to his mentors: “One of them suggested I not get my own fleet for deliveries. Another advised me to start by finding a good accounting person.”
A third mentor suggested a different route to ensure cash flow. “I can’t tell you all the time and headaches I spent developing a business plan to take to banks, only to have them tell me it looked great, but they needed two years of financials to give me a loan,” admits Michael. “I worried the money would be a big hurdle, especially since S.P. Richards wants money upfront to hold in case you are late with a payment. One of my mentors suggested I do a home equity line of credit instead, because it is usually easier and faster. I wish I’d known that earlier. I ended up not having to tap into that money, but it was a nice safety net.”
Secret sauce
Michael doesn’t hesitate when asked to spell out what has made his new venture such a success: “No. 1 is service. I am not sure why, but since COVID-19, when I go to the store or out to dinner or anywhere, it seems service has gone to the wayside. We give real service, handling what is needed when customers call or email and getting right back to them.
“No. 2, I am a big believer that you reap what you sow. We give 10 percent of our profits to charity, along with other monetary gifts, and volunteer for a lot of community giving-back activities, like distributing meals to those in need.
“The third part of the secret sauce is we are a consultative company. We approach our customers’ needs based on conversations. We ask what is working and what may be broken, and say, ‘Hey, have you thought about this?’” He also credits Stacey Montoya, Commercial Business Supply’s director of administration, as key to the company’s success.
But like any business, the company still has hurdles to overcome. Michael quickly ticks off the top three: “The first and biggest challenge is finding good salespeople. The second is finding good employees in general. I know from the ISG roundtable [during Industry Week] that this is a major problem for many dealers. The third is bad service from some vendor partners—so bad we’ve had to fire some.”
Hunting for unicorns
Michael has this parting advice for existing and new dealers: “Find a couple of good mentors. Consult customers and figure out what they need. And try to hire people with vision. Only eight to 10 percent of people have it, so it can be like finding a unicorn. But if you find them, hire them, pay them well and keep them happy.”
Headquarters: Chandler, Arizona
Top management: Michael Thompson, founder and CEO; Stacey Montoya, director of administration
Annual sales: $2 million-plus
Main wholesaler: S.P. Richards
Online business: 98%