Listening to My Business Why I decided to kiss off pessimism and embrace the recovery.
(FORTUNE Small Business) – Anyone who knows me accepts that consistency is not one of my attributes. Now, dear readers, you too can join that club. Just a few months back in this column--last October, if you must know--I dubbed myself "Alan Greenspan's worst nightmare." No matter how low interest rates fell or how robust my business, I insisted, I wasn't cranking up spending or hiring. Last summer I even canceled the purchase of a $500,000 printing press. I just didn't believe in the recovery. My pessimism so enraged one reader that he labeled me "gutless" and "spineless."
Well, I've grown a spine. I have now embraced the economic recovery with wild abandon. My family's $30-million-a-year plastic-bag-manufacturing company has spent close to $1 million on new equipment over the past few months and plans to fork over another $1.5 million before year-end. That's almost triple our 2003 capital spending. We're buying a new printing press at double the price of the one I nixed last year. Thanks to my new friend the Fed, I'm still financing the darn machine at around 5.5%. We're not just on the bandwagon, we're virtually driving it: Unlike so many U.S. businesses, we've hired new employees, expanding our workforce 10% in the past few months, to 120.
Why the change of heart? I listened more to my business than to my macroeconomic fears. For months I allowed the media drumbeat about the fragility of the recovery and my paranoia about industry overcapacity and cheap imports to drown out what I heard in my business--the pulse of rising sales. Beginning in mid-2003, our sales growth hit as much as 50% year over year and averaged around 30%, thanks to an influx of new customers and increased business from existing accounts. As backlogs lengthened, customers got angrier about late shipments. I recognized that if I didn't expand, our hard-won growth could disappear overnight.
So I swapped one paranoia, about the economy, for another--a fear of losing business through underinvestment. My spine has been stiffened by my fellow chief executives, who unanimously cheer the economy's arc. As early as last October, other bosses in my Alliance of Chief Executives group, which meets monthly to hash over business, began turning optimistic. Time has borne out their confidence. Every consultant has landed more work, manufacturers have booked more orders, and even software developers report brighter prospects.
Of course, my company's double-digit growth helped allay my anxieties most of all. We owe much of our good fortune to new-product launches, the kind of projects no one undertakes during a recession or anemic recovery. We're manufacturing a costly new line of salad packaging for one customer, featuring the cheery visage of celebrity chef Emeril Lagasse. If the rollout goes well, it could add as much as 2% to our sales. Multiply that by several customers doing the same, and the sales pile up. In my small circle, it began to feel as if I was the last pessimist around.
I almost dallied too long. Our inability to deliver angered many customers, several of whom threatened to take their business elsewhere. One did, but not before calling me to ask whether something was wrong.
Then there was the human cost. I've watched stress levels zoom as we struggled to deliver a high volume of production with a skimpy staff. Too often service has suffered. One customer-service person even gave up calling customers to warn them their products would be late. She got so burned out that she figured if they didn't call her, it meant she didn't need to worry.
The chaos obliterated any lingering doubt about the need to expand. I have to admit that with all the money we're shelling out, I'm still more than a little nervous about how long the recovery will last. So what makes me think I'm on solid ground? My business keeps telling me I am. And that's what I believe in, now.
Kevin Kelly left full-time journalism seven years ago to run his family's California company, Emerald Packaging.