Small Businesses Get Creative

May 10, 2002
| By Katy Rent |
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GRAND RAPIDS — Creativity is a common thread that connects the two winners of this year’s Small Business of the Year award.

Mor Electric Heating Associates Inc. and Professional Benefits Services are typical small businesses in that they work hard to achieve success. What’s not so typical is the ways in which they’ve been able to achieve that success. The Grand Rapids Area Chamber of Commerce recognized the firms May 7 during a Small Business Week celebration at Frederik Meijer Gardens. The theme for this year’s luncheon was “Connecting the Pieces to Build a Great Workplace.”

Deitz Kracker of Mor Electric said the creative aspects of running a small business are what makes the job interesting.

“The nomination process really forced you to take a step back and look at your business and see what unique things you are really doing and what you are really about,” she said. “One thing for us is our business on the Internet.”

Mor Electric, an electric parts distributor, recently doubled the size of its customer base through the implementation of a Web site.

“Now, it is not unusual for us to sell more to the state of California via the Internet than to the state of Michigan. We have had over a million Web site hits per month for the last five months,” Kracker added.

Another application Kracker felt made the company one of the chamber’s honorees was its vendor assessment program. Mor Electric does an internal assessment of its 10 largest vendors. “This isn’t a critique or an insult, it is merely a way of creating a dialogue and keeping a constant flow of communication,” explained Kracker.

That communication brings about a meeting between Mor Electric and the vendor through which both parties can discuss positives and negatives of the working relationship. “Many changes have come from this process where one of us will see where our strengths are and where we need improvement,” she said. “We need to look at these problems in a positive way, as constructive, friendly criticism, not an attack. It can only make business better.”

With a business comprised of Kracker, her husband Allan, who serves as president, 10 employees, two cats and a gerbil, Mor Electric is rapidly meeting its goals. One of those goals was to sell products worldwide, which the Web site has accomplished.

“It is important, too, that when you are selling worldwide that you don’t forget your own backyard, and I think that this award can help us get back to that and focus on that,” she said. “It will create local awareness and also has helped us to understand more about ourselves as a business and create more goals.”

A creative approach also helped Professional Benefits Services (PBS) land an award.

“This award is really a recognition of everyone’s efforts here and it has truly been an evolutionary process,” said Bud Gottlick, president of the company. “We take a team approach to everything and everyone’s opinion is important. It’s the kind of environment which produces a willingness to think creatively.”

That kind of thinking also develops creative solutions to tough problems. One of those problems is how to help retirees cover their medical bills. PBS developed a Variable Employee Medical Account (VEMA) for pre-funding an account to be used for medical expenses during retirement. The program was introduced last year after PBS developed it, patented it and trademarked the name.

“It is an innovative way of addressing the whole issue of what happens when a person works their entire life, thinking they are going to have medical coverage, and they get to 65 and retire and all of a sudden their employer is no longer in existence and their benefits are gone,” said Gottlick. “So this is keeping that from happening. Basically the fund is much like a 401(k) from the standpoint that money is saved during working years for use during retirement. And in this particular case there are some tax advantages, because the money grows tax-free and then they can pull it out when they retire without paying any gains on it. But the money has to be used for medical expenses.”

The GRACC is not the only group recognizing the work of PBS. The U.S. House Committee on Ways and Means has expressed an interest in what the company is developing.

“There are 76 million baby boomers coming down the line, and we need to be prepared for that,” Gottlick said. “So we want to educate the crowd and show employers that they need to take care of their employees who have dedicated years of service to the company.”           

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