For Scott Manning, a Mac Tools mentor distributor, there is no mystery to success in mobile tool distribution. Manning, based in Kent, Ohio near Akron, vigilantly focuses on “the basics” of the business. By paying careful attention to customer payment terms, collections, customer...
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He takes the plunge
Manning took a second mortgage on his home in order to lease a 16-foot step van that was previously a bread truck. “I put everything up for hock to get the money,” he recalls. His DM helped him write a “break even” plan, covering his lease payments and his starting inventory.
His first three months were nerve-racking. “The pressure was on,” Manning recalls. “It was a bit scary at first. I don’t think I did anything else but think, breathe and eat Mac Tools for three months. I had so much I had to absorb and learn to get something going.”
In retrospect, it was a great help to have weekly sales goals. “I’ve always been someone driven to go after numbers that are put out there,” he says. He also credits Mac Tools management for its moral support. There were days when mounds of tools on his truck weighed on his mind. Having someone to encourage him was helpful.
Manning had no problem meeting his sales goals from the outset. Most of the 100 or so stops the company gave him were good customers.
While he didn’t know a lot about the tools, he wasn’t shy about asking techs what the tools did, and the customers were willing to educate him. “It’s amazing what you can learn from customers,” he says. “If you listen to what they say, you can turn it around as you’re sales pitch on that item.”
Manning also made it a habit to keep on the lookout for new stops. “In any area, there are nooks and crannies you would not know were there,” he notes.
He made it a policy to make at least three visits before deciding to cancel a stop. In such instances, he tells the people that he can’t continue visiting, but he leaves his business card and tells them to call him if they need anything. He stresses the fact that his decision is business-driven and not personal.
He also revisits these stops periodically. All it takes is some new blood, and the buying habits change. “You can change the complexity of a shop with one technician,” he notes.
Body shops proved to be a big market for Manning. This was one area that he knew little about in the beginning. Hence, he familiarized himself with body shop tools.
Body shops are especially busy in the fall, thanks to deer hunting season. During this season, deer become careless and get hit by cars, which then need body work.
Big basic: payments and collections
One of the most important “basics” is stating payment terms and expecting customers to honor them. Manning allows five or six weeks on smaller ticket items. For larger ticket items ($500 and above) the term can be as long as 26 weeks using Mac Tools’ long-term financing.
Having never previously owned a business, he didn’t realize that collection issues are a reality of owning a business. “If you’ve never been exposed to collections, you don’t know,” he recalls. Being shy by nature, Manning was initially reluctant to confront customers who were slow to pay him.
“Being more direct in collections is the biggest thing you can do,” Manning says, enunciating one of his “basics.” At the same time, he notes, you can’t be too aggressive with customers.
“Once you get over the timidness, you almost feel guilty,” he says. “Then you realize if you don’t ask for it, you’re not going to get it. Once you get that in your head, it’s not a big deal.”
To reduce collection problems, Manning made it a habit of watching how customers act when he first meets them. This helps him decide whether to lend the customer credit. He pays attention to whether or not a customer makes eye contact with him when he comes to the stop. “It’s about being observant,” he says. “Body language tells you a lot.”
Manning notes that receivables are a part of being in business. He has tried taking people to small claims court and using collection agencies for unpaid bills, but he has found these efforts useless. By being careful about who he sells to, he has been able to keep his receivables at a manageable level. He estimates that only 3 percent of his customers are problem payers.