Opportunity Knocks: Solidifying plans today opens door to growth possibilities, leaders say

Growth visits business in various ways: They may invite it in, or it could come crashing through the door.

Some growth is cultivated through strategies like marketing, product development or acquisition. But sometimes, the climate turns suddenly – maybe a trend takes hold or a law changes – and a growth opportunity materializes.

Either way, business leaders have to be ready for it, says Mark McNay, president of SMC Packaging Group, which manufactures corrugated boxes.

“We’ve never subscribed to the build-it-and-they-will-come philosophy or mentality,” McNay says. “We maximize the use of all of our assets, whether that’s capital, equipment or facilities.”

In 2020, a couple of things happened: SMC completed a major expansion with a new 250,000-square-foot factory, and the world went topsy-turvy with a pandemic.

McNay says SMC had been planning to expand after about a decade of growth in its customer base. The process was methodical, he says.

“We’re very conservative,” he says. “Our industry is so capital intensive. It’s not easy to get into the business, and any investment that you make in facilities or equipment has to be very well thought out.”

McNay says the new building was customized with automated equipment and advanced material handling. Big box capability was added, with a specialty folder and equipment that allowed boxes to be printed inside and out.

“We truly started off with a blank canvas, so we could lay out the machinery and set up the product flow in a way that was most efficient,” he says.

In the middle of the expansion project, McNay says, COVID-19 hit and business tanked.

“We wondered what we had done,” he says.

But after a relatively short yet severe drop in business, he says, “Things exploded.” People who were stuck at home started ordering in for the things they missed about the wider world, and e-commerce, which moves through the world in corrugated boxes, was thriving.

“Typically, in our industry a good year is 2%-3% growth per year,” McNay says. “We were seeing 10%-15%-plus growth in those COVID years. It was really a phenomenal opportunity for us.”

This was the second kind of growth – the kind that wallops a business upside the head. But though the opportunity sprung up, SMC could only capitalize because of the planning that happened during ordinary times, McNay says.

Ready to grow
Area business leaders who responded to Springfield Business Journal’s 2024 Economic Growth Survey indicated that they are ready to grow, with 60% predicting improved income this year compared to last.

Additionally, 60% reported they were coming off a pretty good year, with net income for 2023 outpacing the year before. Only 15.5% said they experienced lower net income in the same period.

Asked to name their company’s growth strategies, half of the survey respondents tapped three top options: 52% said they are looking to expand to new markets, 50% said they were focused on developing the next generation of leaders and 47% said they planned to expand their use of technology. Only 6% of respondents said they were not planning for their businesses to grow.

Margin and multitools
Ron Bogart, CEO of mechanical contracting company Gold Mechanical Inc., is seeing growth happen in real time. The company opened a Springdale, Arkansas, office recently, with a ribbon-cutting ceremony in late June, and Bogart reports it’s already wildly successful.

“We’ve already been doing $20 million worth of work down there,” Bogart says.

The company even had to import labor because it had so much work and not enough people to do it, he says.

For Bogart, the most important factor in preparing for growth is margin.

“If you don’t have margin in your business as extra capital or even in your schedule as far as time, you’re not going to be able to grow. There’s just no way to feed it,” he says.

He explains that businesses often run close on budgets to be competitive, and the leadership may feel they don’t have time for one more thing.

But that’s not a winning strategy, Bogart says.

“You can’t put 10 pounds of crap in a 5-pound bag,” he says.

While it may seem counterintuitive, Bogart says businesses that want to get big need to back off and simplify.

“It doesn’t make sense,” he says, “but unless you’ve got margin, you’ve got no place to put it.”

In addition, Bogart credits hiring the right people. He recently brought on Carl Kicklighter as construction manager and Angie Way as chief financial officer, and, in Arkansas, he made another key hire: Jasmin Santiago, a mechanical engineer with a degree in project management and a knack for marketing and business development.

“She’s like this really cool Swiss Army knife that can do all of these things,” he says. “I interviewed her, and I thought if I didn’t care what the management team thought, I’d hire her on the spot – but a cool, smart Swiss Army knife was not on the org chart anywhere.”

Bogart trusted his instincts and brought Santiago into the organization. While it’s only been a couple of weeks, he says, she’s already making huge strides.

Capacity check
Talent is the real key to growing a business, says Dan Cobb.

Cobb is a serial entrepreneur who chairs both the public-private partnership Missouri Technology Corp., which promotes entrepreneurship, and Springfield Innovation Inc., which promotes the region’s startup community.

Cobb says smart businesses hire ahead.

“You have to add talent in advance, because if you wait until you desperately need those folks, you may settle for some hires that don’t necessarily fit your business appropriately,” he says.

While those hires do come out of the bottom line in the short term, they help a business be ready for opportunities that arise, Cobb says.

The difficulty in taking on workers with future growth in mind is that it’s an investment, he says.

“Like any investment, returns aren’t immediate, and that’s a challenge if your cash flow’s not great,” he says. “Can I afford to have some people hanging around, waiting for the big surge? It’s not a black-and-white answer.”

Strong partnerships
McNay says another key to capitalizing on growth opportunities at SMC is building strong partnerships.

At the same time the box industry experienced unparalleled growth during the pandemic, supply chain disruptions hit many industries – the box-making industry included.

“We had strong partnerships with both our customers and our suppliers, and that allowed us to weather the storm pretty well,” McNay says. “The paper mill supported us in really challenging times, and our customers, because of the faith they had in us, understood and worked with us.”

Strong partnerships had also been forged with SMC co-workers, he says.

“You have to have great people – great co-workers that have dedicated themselves to taking care of customers and each other in challenging times, with tenacity, problem-solving skills and hard work,” he says.

McNay says it’s typical to find the best people when you’re not looking, which makes it impossible to time things perfectly.

“I’ve used the expression, ‘Preparation meets opportunity,’” he says. “If we have the right facilities and the right equipment, and we put the right people – people who are well trained – in a position to succeed, then we succeed as a company.”