When I was a kid, everything essential to life could be found on our town’s courthouse square. Lemmy Chalfant was the town plumber. His shop was next door to the bank, just north of the Buckhorn Bar, near the dry cleaners, which was beside the post office and across the street from the Hoosier Hotel, alongside the Coffee Cup Restaurant, beside the Johnston’s IGA, across the alley from the office supply store, catty-corner from Baker’s Hardware and Money’s Television and Radio, just down from the Royal Theater and Lawrence’s Drug Store, beside the town’s other bank, across Main Street from Dinsmore’s Basket Shop, which was east of Mingle’s dress shop and Thompson’s Rexall, next to Beecham’s Menswear, down the block from Danners’ five-and-dime.

In the basement underneath the Hoosier Hotel was Floyd’s Bicycle Shop and John Foster’s barbershop. John Foster was one of three barbers in town, none of whom had the least bit of talent in matters tonsorial. Every man in town had tufts of hair sprouting amidst shorn flesh, like a dog with mange who had scratched itself raw. In our town, if a man failed at every other venture, he became a barber in order to share his misery with others.

As town squares go, ours was a doozy, so of course it could not last. The stores died one by one, replaced by law offices, except for the Royal Theater, which has enjoyed a resurgence, and The Republican newspaper, whose editor is a Unitarian democrat.

Of all the stores now gone, I miss Danners’ five-and-dime the most. It sold, among other wonders, hairnets, penny candy, lampshades, and parrots who had been taught to cuss by our town’s juvenile delinquent, Ronny Millardo. His very name was synonymous with wanton depravity. Even the Quaker pastor, who loved everyone, despised Ronny Millardo. Continuing his early penchant for hanging around the ethically suspect, Ronny Millardo moved away, went to college, became a lawyer, and was eventually elected to Congress. His mother, as you can imagine, was devastated.

But I digress.

Another favorite was Baker’s Hardware, ran by Rawleigh Baker, who also owned the funeral home. We lived down the street from the funeral home and became such close friends with Rawleigh that when my sister went to college, we transported her belongings in Rawleigh’s hearse. Eighty-seven miles from our front door to Ball State University, my sister weeping in shame the entire way, her reputation in tatters the moment we drove onto campus, my father stopping at every corner to ask directions, rolling down the hearse window to introduce himself and his daughter, another proud parent paving the way for his beloved first child.

Smiley Dinsmore and his wife owned the Dinsmore’s Basket Shop. Smiley had the world’s largest false teeth, causing his lips to pull back into a permanent rictus grin, hence his nickname. Dinsmore’s had once been a grocery store and among the back shelves one could still find evidence of Smiley’s life in the food trade, mostly old cans of beans dating from the Civil War era, which Smiley had marked down to a nickel and still couldn’t sell, except to the occasional museum.

When the grocery trade dried up, Smiley switched to baskets. A hand-painted sign stood out front of the store, along Main Street. The sign should have read: “Lady, make that man stop. Let you look. See 10,000 baskets.” Smiley was a fine man, but a poor grammarian, so the sign was devoid of punctuation. “LADY MAKE THAT MAN STOP LET YOU LOOK SEE 10000 BASKETS.” By the time motorists figured out Smiley was selling baskets, they were a block past the shop and in no mood to turn around.

For four years of my childhood, I delivered The Indianapolis News, whose local office was in the basement of Mingle’s dress shop. It was Ronny Millardo who had the idea to drill a hole in the newspaper’s ceiling and peer up into the changing rooms of Mingle’s, where he saw Mrs. Miller, the school librarian, in a state of undress and fainted dead away.

It was my pleasure to deliver newspapers to nearly every business on the square—the hotel, the two lawyers, the banks, the five-and-dime, Lemmy Chalfant’s plumbing shop, and the Buckhorn bar, where I would stand at the door, not permitted to enter, so would fling the paper into the smoky depths, then cross the street to the Coffee Cup Restaurant where Mrs. Smith had a bottle of Coke waiting for me on hot, summer days. Though it did not seem so at the time, in my memory it has become a nearly perfect childhood and one I return to visit time and again in the dappled light of present days.

A Perfect Childhood The Saturday Evening Post

Quigley’s Building Supply—Putting Customers First

The St. John River in Maine swiftly and relentlessly surged over its banks. After a record snowfall and heavy spring rains in May 2008, the river’s waters rose more than 30 feet. The lumberyard of Quigley’s Building Supply in Fort Kent, Maine, became a grim yardstick of the floodwater’s progress. Foot by foot, plank by plank, the water swallowed pallets of wood until the 66-year-old family business was 12 feet under water. In just an hour, more than $200,000 of the small business’s inventory was either waterlogged or swept away by the murky currents.

Six months before the flood, owner Norman Ouellette died in a boating accident at just 51 years old. That left general manager Justin Dubois, Ouellette’s son-in-law, running the company. Then, only a few months after the flood came, the man-made disaster of the financial crisis hit. Fresh from college and only 24 years old, Dubois felt a little like the Biblically unfortunate Job.

But Dubois wasn’t alone. Many other businesses throughout the country were submerged or swept away in the overflow of the financial meltdown. However, Quigley’s and many others survived and even thrived through these tough times.

Despite an economic mess and big businesses outsourcing labor and manufacturing, the spirit of small business continues to drive the growth of our nation with enterprise, ingenuity, and craftsmanship. Small businesses still create most of the nation’s new jobs, employ half of the country’s private sector work force, and produce more than half of the private sector gross domestic product, according to the Small Business Administration. Much like the hardworking Americans that came before them, the modern-day entrepreneurs you’ll meet here are striving for success against all odds, whether the problems are thrown at them by the economy or Mother Nature herself. These small businesses keep their doors open with a mix of smarts, guts, and determination, even in the face of unexpected hardship.

After the floodwaters crested, Quigley’s buckled down, adapted to the changes and challenges, and notched one of their highest sales years ever, with a 21 percent sales increase from 2008 to 2009.

“Just like everywhere else in the United States, there was a slumping economy and the housing market was nonexistent,” Dubois recalls. “If we just sat back and allowed it to happen, we’d fall. We looked at the slump as a chance to increase sales, customer traffic, and loyalty.”

To increase customer count, Quigley’s needed to find their niche. The store increased advertising, and management looked to long-term employees for new revenue suggestions. Of the 16 employees, many have been working for the company for 12 years or longer. Their know-how helped identify that customers were requesting more and more products they saw on television or the Internet. The bottom-line result for the store: The special order department has increased 50 percent in the past three years. “This has changed the way we do business,” Dubois says. “We’re increasing customer service. No matter where a customer sees a product, we can get it for them.

“The employees are the reason we changed,” he says. “I looked to them for advice and knowledge. We couldn’t have done that without their knowledge and support.”

Schacht Spindle Company—Woven to Success

From its humble origins, Schacht Spindle Company has grown to world-class status with a reputation as a maker of quality hand-made looms and spinning wheels.
Photo courtesy Schacht Spindle Company.

Pulling together the similar fibers of employee knowledge, Barry Schacht has spun the Schacht Spindle Company into the kind of American success story that’s vanishingly rare these days. The Boulder, Colorado-based company began in Schacht’s garage about 
40 years ago and has grown into a 35,000-square-foot factory with 35 employees. Today, Schacht’s is the second-largest weaving supply and loom manufacturer in the world.

“In those early years, I made a point of finding people who knew more about the business than I did,” says Schacht, who owns the company 
with his wife, Jane Patrick. “That employee knowledge helped me 
create a better product.”

Schacht says he constantly strives to improve relations with his staff and provide them the right tools and benefits—both at work and in their personal lives. In addition to health insurance, the company offers two months of unpaid leave, assuring employees that they’ll still have a job when they return. Schacht and Patrick also built a special, environmentally controlled room for an employee with asthma and allow flexible schedules for workers with children.

“We hire people for their skills, then work with their schedules,” Patrick says. “We emphasize family values, getting back to what’s important. If employees need time to take care of a sick parent or child, it’s not a problem.”

The work atmosphere Patrick and Schacht created has paid off: The duo’s philosophy has fostered long-term staff retention. One employee has worked with the company for 39 years, a few others for more than 20, and several for more than 15. And Schacht is quick 
to credit those employees with the company’s ongoing success. For example, staffers recognized a market for lower-priced, entry-level, easy-to-use spinning wheels. Their input led to the development of the company’s new Ladybug spinning wheel. Adding to the company’s handmade cachet, each is unique, with a ladybug logo individually placed somewhere on the wheel. During the past two years, such entrepreneurship has helped Schacht Spindle Company to post a 35 percent sales increase. But the company can’t rest on such successes, and its bottom line can be dramatically affected by the fortunes of suppliers and profit-driven big box retailers. “Some of the companies I have dealt with over the years have disappeared,” Schacht explains. “I have had a more difficult time finding suppliers.”

Schadt’s hard work has paid off: The company’s spindles, looms, and winders are in just about any weaving supply store in the country, and they ship orders worldwide.

Yet, Schacht’s garage-born business roots are never far from his reach. On his desk is the first spindle he ever made. Constructed from an old, used doorknob and wooden stick, it’s the genesis of his business. “It reminds 
me of the complex, yet simple, beginnings,” he says. “When I started, what was most inspiring was making new products and solving old problems with a creative touch.”

Hudson Beach Glass—Hearts of Glass

Touch of glass: Operating out of a renovated firehouse, the artisan owners of Hudson Beach Glass prove that pursuing their passion makes good business sense.
Photo courtesy of Hudson Beach Glass.

The glass-blowing furnace in Hudson Beach Glass burns 24 hours a day. Visitors to the converted firehouse in Beacon, New York, feel the heat and hear the hum of the furnace that glows white hot, full 
of molten glass. For the 26-year-old company’s owners—John and Wendy Gilvey, Michael Benzer, and Jennifer Smith—that furnace is the source of their art and entrepreneurial freedom.

“In the last 26 years, we’ve been able to make the work we want to make,” John Gilvey says. “Doing that has been satisfying. I feel like I’ve done it my way. That’s so corny. But true.”

The different blown glass styles of the artist-owners are on the shelves throughout the store. John, for example, crafts Tiffany-like vases with leaf-like patterns. Benzer’s trademark work is hand-cast tiles and bowls that have been Hudson Beach Glass signature pieces for more than 20 years. Wendy Gilvey and Smith produce fluid-form pieces, often with opaque, sandblasted finishes.

“Every object we make, we’re proud of it,” Benzer says. “We’re not making big money, but we’re not sure we could work for anyone else.” John likens the Hudson Beach Glass business model to subsistence farming. “Or subsistence artists,” he says with a laugh. “We know we have done something right at the end of the year if we’re still in business.”

The four originally opened Hudson Beach Glass Studio in 1984 in a warehouse-type building and sold through distributors and trade shows. Seven years ago, they opened their retail store in an old firehouse on 
Main Street. In 2008, John’s son, 
Sean, opened his own Hudson Beach Glass storefront in Philadelphia. Works from the studio have been featured in the book 500 Glass Objects, and plates from the Philadelphia store were used by 
chef Jose Garces when he competed 
on the cooking reality show Iron Chef.

Such success came after riding more than two decades of up-and-down economic trends. The downturn 
of 2009 definitely caused some scrambling. “Our business took a big hit,” John says. “No one was calling with orders, no one was buying.” And they had to make the difficult decision to lay off four full-time employees. Knowing that their business could 
turn in a season, John and Benzer continually look for new markets and different ways to distribute their work. In recent years, they have expanded to include etched glass awards and table settings for high-end restaurants. 

“We adjust to what’s happening in the marketplace,” John says. “We’re also continually experimenting with new colors, forms, and processes. In our business, new is everything.”

They learned that lesson in the mid-90s. After 20 percent to 30 percent growth per year, their business became flat. When attending a business consulting seminar, they realized the studio hadn’t been rolling out enough new products. “After that, we didn’t go to a trade show without something new,” Benzer says.

Enterprising Endurance The Saturday Evening Post

American companies were paying their workers $4 or $5 an hour for a 40-hour week, and Chinese workers were paid $10 a month for a 56-hour week. Munro & Company faced pressure to lower its prices or lose business. Munro founder Don Munro did not want to go overseas. He believed in buying American, insisting on purchasing American cars and TVs. He did not want to close factories, lay off workers, and move jobs out of the country.

“He has always been appalled at the unwillingness of people to understand what happens when you give away your manufacturing base,” says his daughter, Mollie Munro, vice president of the 37-year-old, Arkansas-based company. “That’s when he pulled in my two brothers, my sister, and me. He said, ‘Look, I’m not willing to go overseas. You guys have to figure out a way to make this work.’ ”

As their competitors’ prices plunged, says Mollie Munro, the only alternative they saw was pursuing a specialty niche —they’d make shoes for women with especially small, long, thin, or wide feet. They would no longer be able to sell to Wal-Mart, Sears, JC Penney, and similar retailers because the company was not willing to manufacture in China to lower its price.

At that time, the company made “old lady shoes” for private labels, Mollie says. So they decided to start their own line of shoes under the name Munro American and expand to offer 40 styles, most of them feminine but not flirtatious. And their sweet spot, they decided, would be women whose foot size fell outside of the norm.

For each style the company sells, there are 75 different sizes—from 4 to 14, from super slim to wide wide. (The typical mass-producing manufacturer makes 17 different sizes per style, she says.)

Munro & Co. sells its women’s shoes through specialty retailers and Nordstrom, the company’s largest single client.

Through primarily word-of-mouth advertising, they have developed a loyal following among baby-boomer teachers, business women, real estate agents, and government workers who are on their feet a lot and want to look professional.

“They’re power shoes,” Mollie says. “They’re shoes saying that what I do is more important than how I look.”

Teachers are not collecting six-figure incomes, so how can they afford to pay $130 to $200 for a pair of shoes? Mollie says the shoes not only project an image of confidence and competence; they are quality, comfortable shoes that last for years, making them a good value.

Commitment to America

Munro & Company survived its decision to keep manufacturing in America, but not without serious cutbacks. Its work force shrank from 2,200 and seven factories in 1982 to about 530 employees, three factories, and a distribution center today. There were years when the management staff took a 10 percent pay cut. Some years, the family-owned company reduced the company’s matching contribution to its employees’ 401(k) plan, but restored the match when times improved.

The company’s health plan is self-insured, so in the years where demand for medical care exceeded employees’ contributions, the company supplemented with operating funds.

But the ability to offer a self-insured health plan has been not only good for employees’ health, it also has been good for the bottom line, says Stan Grise, vice president and chief financial officer.

“If we have [a request for] a particular kind of medical procedure that makes sense medically and financially, we pay for it. We don’t have to go through the approval of an insurance company,” he says. “Quality medical care costs less. We avoid the bureaucracy and red tape that’s involved in an insurance plan.”

Munro Shoes are crafted by longtime employees trained on the "factory floor" such as Shirley Williams who works in the fitting department.

The health plan exists to serve the employees’ medical needs, not make money, he says.

To weather the economic downturn, all travel has been cut by 10 percent the past year. The company has reduced production expenses by eliminating overtime, cutting 10 percent of its labor costs. It had to lay off about 6 percent of the work force in December.

“We stay pretty fiscally tight,” says Mollie, who runs the business with her older brother Bruce, the chief executive officer. Her father, 82, is chairman of the board and busy with philanthropic endeavors, leaving day-to-day operations to the next generation. The other Munro siblings have left the company, one to start a separate, related com-pany—Neil M. Footwear, maker of high-end men’s shoes and boots.

With what some economists call the worst economy since the Great Depression, Munro & Co. faces another challenge. Competitors that once ignored the specialty-size business have entered the market with shoes made in China for a fraction of Munro’s cost.

Munro has stuck to its practice of using quality leather and letting it sit for four to 12 hours on the plastic foot form, called a last, a process which ensures the shoe holds its shape and lasts for years, Mollie says.

Shoes that are mass produced in China, she says, are generally left on the lasts for 45 minutes, which doesn’t allow the leather a chance to set. “So when you wear the shoe, your foot stretches the leather,” she explains. “It’s not going to wear as well.”

Another factor that has allowed Munro & Co. to stay in business is not having to answer to shareholders, says Grise, who has been with the company for 23 years.

In these tough economic times, when retailers are reducing their inventory to remain profitable, Munro felt it was crucial to be able to offer its customers the wide range of shoe sizes they’ve counted on. The company known for carrying difficult sizes could not afford to have stores stock fewer sizes.

Munro had to find a way to remain on the shelves when retailers looked to trim costs.

“We’re going to make a smaller profit so the retailer can make enough money to keep the brand,” Mollie says. “If they can’t make money on you, sooner or later you’re going to go. That’s how a little, nobody-company like Munro manages to survive. We make them money.”

Another quality Munro offers, Grise says, is the ability to be hyperresponsive to its customer. For example, when one of its retailers calls before 10:30 a.m. to place an order, the order is shipped the same day.

“That allows our independent retailers not to have to carry as much inventory,” he says. “That quick response is something that competitors can’t offer.”

And they have never lost sight of their customer—the woman who wears their shoes. Bruce and Mollie Munro, as well as their sales staff, travel regularly to stores and talk directly to the customers about the shoes. Mollie meets customers at trunk shows about 75 days a year.

“We listen to the consumer and try to give them what they are not getting from the competition,” Grise says.

Nordstrom’s Jack Minuk, executive vice president, general manager for the shoe division, says the retailer enjoys working with Munro. “Munro

shoes have a large and loyal following with many of our customers,” he says. “Probably the most outstanding attribute of Munro is the superior fit these shoes provide to a range of customers.”

Munro believes “true expertise comes from the factory floor. We have never hired a designer. We have tons of engineers. They are all trained in the business,” she says. They learned about how shoes were made firsthand. “If you don’t understand how shoes are made, you’ve got no business designing shoes.”

Long-Term View

When Mollie was fresh out of college and new to the business, her father said: “There are two reasons to own a business. One is to make money and one is to be in business. I always chose the latter. My decisions have been predicated on staying in business.”

The Munro family has put the longevity of the company ahead of their personal wealth. “I do think principle is a much stronger motivator than money,” she says.

Don, Bruce, and Mollie Munro will not take a raise until the business is profitable, she says.

In good years, the profits are saved as a cushion toward the lean years, Grise adds.

Daniel Barnes demonstrates "lasting," a process ensuring a shoe holds its fit for years.

In 1975, there were more than 1,000 shoe factories in the United States, and about 40 remain, Bruce Munro says.

“I think the single biggest factor that keeps us in a competitive position versus a lot of other companies is that we’re a private company, not a publicly traded company,” Grise says. “Don Munro has never been greedy or anxious to take money out of the company.”

Since 1992, Munro & Co. has had asset-based borrowing with its bank. This means the bank grants loans using the company’s existing assets as collateral. This reduces the risk to both the lender and Munro, and that has helped the shoe company weather financial storms, Grise says. “Our critical mass was strong enough that during the toughest times, we had enough staying power to draw on.”

Fewer than half of the past 10 years have been profitable, Mollie Munro says. “As long as we can make payroll and pay the bank, we’re fine.”

The company has made decisions that hurt short-term profits. For example, in 1991, the company bought a factory out of bankruptcy. “We knew it wasn’t the greatest business decision,” she said.

When Don Munro went to look at the factory, the employees who had not received their last paycheck were sitting outside, angry and defiant. “My father wrote a check on Christmas Eve so those people could get their paycheck and go buy presents for their kids,” she says. The factory never turned a profit.

The factory made shoes for small children, whose feet grow so fast that shoes have to be replaced every few months. When parents stopped buying $100-shoes, Munro & Co. made the choice that to keep its Jumping Jacks business alive, it would have to transfer manufacturing to China, she says.

Munro & Co. continues to face challenges. Because some 92 percent of shoes purchased in the United States are made in China, the raw materials are manufactured there, Grise says, forcing Munro to import its leather and other materials from China.

China does not have the health, safety, and environmental laws that exist in the United States, allowing Chinese manufacturers to use an adhesive with more staying power than the adhesives permitted in America, Mollie says.

Furthermore, Munro executives, Grise, and their bank are well aware that even well-established, successful retailers have gone bankrupt. If any of their retail customers were to stop carrying their shoes, Grise says, they have contingency plans in place.

As long as they ensure that their ultimate customer —the women buying their shoes —is happy, they expect to continue.

There may come a day when Munro & Co. has to forgo American manufacturing, but the company would only do that as a last resort.

“We are doing everything we can to avoid going overseas for the manufacturing of our Munro American brand of women’s shoes,” Mollie says. “As long as enough of our customers believe that our shoes offer a good value for the price, we will be able to stay domestic.”

What happens When Jobs Leave? Read how two different companies led by extraordinary men with old-fashioned corporate values adapt to the issue of succession and changing market forces.

Links

MunroShoes.com
Store Locator – Where to Buy

Munro Shoes-Made in America The Saturday Evening Post