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Sig Schmalhofer believes in fun. He believes in hard work. And he believes in making the most of every day. You see, when Sig was in his mid-40s and in the early years of building Signature Sales, he got some life-changing news. He was diagnosed with Limb Girdle Muscular Dystrophy and a prognosis that he would likely spend much of the rest of his life in a wheelchair, using machines to stimulate muscle activity. Traditional medicine has no cure for this crippling genetic disease.
As anyone would be in that situation, he was shocked. But that shock was replaced with determination. He was determined to make the best out of a lousy hand. Sig found a doctor specializing in alternative medicine — whom he fondly calls the “Miracle on 12th Street." Dr. M has guided him through a regimented diet that stays away from processed foods that his body doesn’t process well and instead emphasizes organics. Thanks to Sig’s perseverance, his severely elevated blood pressure, cholesterol, liver and digestive functions have all returned to normal levels that have allowed him to have what he refers to as an “industrial strength” immune system. That immune system and a positive attitude have crippled a crippling disease. Sig even jokes about his “sexy walk” that is one of the physical reminders of his condition.
“It’s taught me to never give up,” he said. “I take supplements to keep my immune system strong, but a lot of it is really mind over matter. If you keep your thoughts positive, the mind can do miraculous things. My steps are calculated and measured, but I can still play golf and lead an active life. I am a 36 handicapper; the world’s worst serious golfer, but enjoy the game more than many low handicappers.”
Sig has recently taken all of his experiences and challenges and used them to write a book called Jelly Beans in Life. It’s a great read full of wit and wisdom — and the only book I know of whose main character is a plumbing manufacturers’ representative! (Read more about Sig’s literary genius in the accompanying sidebar article.)
Signature Sales — the manufacturers’ rep agency Sig formed in Southern California two decades ago — is flourishing and comfortably in the midst of a succession plan for the next generation. Sig and partner Ron Bradford, who joined him at the firm in 1994, are easing their way out, and the new management team will be comprised of his son Nick Schmalhofer, daughter Katie Hubach and trusted associates Jeremy Crane and Arron Sanders. Nick is slated to take over as President in 2016.
“We’ve had succession planning underway for 12 years,” Sig explained. “My friend Carmen Catania [now retired from Bradford White] advised me how important it was to pay attention to succession early on and to have a plan that would allow the business to continue to the next generation. So I initially put together a skeleton plan and over the years we’ve fine-tuned it. We felt it was best to implement very gradually, in a way that the transition would be seamless for the customers. It’s essential that customers have confidence in the new leadership, so I’ve been turning over much of my former responsibilities to them so they can build the relationships and trust.”
For Nick, it’s been the realization of a dream. “I’ve been best friends with my Dad my whole life, and I’ve always known I wanted to work side-by-side with him,” he said. “I started part time at Signature Sales when I was 14, sweeping floors and unloading trucks, and went full-time my freshman year of college. I took classes at night so that I could work at the business during the day doing outside sales and tool demos.”
And while Katie followed a different path — first becoming a CPA and then starting a family— she realized that she had a different calling and decided to join the agency. “We are such a close family and love working together,” she said. “It’s our passion, and this experience has truly been a blessing.”
A wing and a prayer
In the 80s and early 90s, Sig had been working with a Southern California wholesaler when he decided to make a big change and start his own business. Thanks to his relationship with the aforementioned Catania, Signature Sales was able to secure the Bradford White line, which got the ball rolling. Not that it was easy.
“Twenty years ago, Bradford White had no market share in California,” he said. “A lot of people out West didn’t even know the brand. My initial strategy was to get a large, well-respected contractor on board. So one of the first people I turned to was Mike Diamond of Mike Diamond Plumbing, who pledged his support. I was able to leverage his interest in Bradford White with a few wholesalers around town and build a little momentum.”
A big turning point came in early 1994 when the Northridge earthquake caused widespread damage, and tens of thousands of water heaters had to be replaced. Wholesalers had trouble keeping enough in stock and the demand was tremendous. As Sig describes, “The earthquake was a horrible disaster to hit our area; however it gave us an opportunity to get Bradford White water heaters into the market.”
“Ron [Bradford] came on board with me a year later, and we’ve put a lot of hard work into promoting the line with plumbing contractors and wholesalers. It’s tough to get a wholesaler to change water heater brands, so we’re very proud of the fact that’s we’ve helped build the brand from nothing to something very special in our market. That enabled us to attract other manufacturers because of the reputation we were building.”
In the first 2-3 years, we were fortunate enough to build a strong line up of independent wholesalers to help entrench the brand. As time progressed, consolidation took its course, and larger, national distributors purchased the independents, which created both opportunities and challenges. The end game is that we have an amazing distribution network that has a nice combination of local independents and national distributors.
Being so close to some of those major acquisitions early on opened our eyes to what can happen — and it taught us that the best defense is to develop such a good position with the plumbing contractor community that our brand would be very difficult to displace.”
As Signature Sales has grown their business, they made a strategic decision to limit the number of the lines they represent.
“In order to provide maximum support for our manufacturers, our strategy has been to operate with a short line card,” Nick explained. “We currently represent 13 manufacturers. That allows us the ability to really focus on each line, not only to benefit the manufacturers we represent, but us as well. We evaluate every line on how they are to work for, the success we’re having with the line’s sales and its potential for future growth. When we discover one that isn’t an ideal fit for us, we sit down with the manufacturer to make sure we are the best fit.”
Signature Sales currently represents the following lines in both the Southern California and Las Vegas markets:
• Bradford White
• Laars Heating Systems
• Cash Acme
• Highland Tank
• Red-White Valve
• Trim By Design
And there are six additional lines that they represent solely in Southern California:
• Pioneer Industries
• Sioux Chief
• Speakman Company.
As is uniquely typical in the world of manufacturers’ reps, Signature Sales works on 30-day contracts with all their vendors. This scenario requires a great deal of trust, confidence and a keen business sense to be adaptable to potentially fluid situations.
“We’ve built very close personal relationship with key factory management people,” said Sig. “Our business partners are also our friends.”
Katie credits her mother with keeping the company on the right financial track to absorb changes in the market.
“Despite the nature of being on 30-day contracts, in some ways our business income stream is actually more predictable than a wholesaler, as they have to collect money from their customers. We have aligned ourselves with manufacturers that pay their bills promptly. And my mom has been remarkable at handling our financials. She is very conservative; we don’t keep outstanding loans or offer lines of credit. And we didn’t have any layoffs when the California economy took such a hit a few years ago. She’s really the backbone of this operation.”
One of the critical ways that Signature Sales supports their lines and customers is through training. More than 4,000 contractors have participated in Signature Sales’ product training, which stresses continual product development, installation requirements, and changes to codes and standards. Their facilities include live-fired water heaters and boilers for hands-on training and troubleshooting. There is no charge for any of their programs.
“We have regular monthly training sessions at our facilities, and we also conduct special sessions by appointment with customers,” Nick said. “Many of our customers will bring all of their people out together for a session so they know everyone is hearing the same message. And when they hire new technicians they’ll send them to us to get them up to speed. We have a licensed contractor on staff that knows how to talk the lingo — and that translates to instant credibility with our customers.
“We use iPads that synch up with a big-screen TV in the training facility and we typically show some fun pictures like ‘installations gone wrong’ at the beginning of the sessions to get people loose and joking. It takes the pressure off and opens them up to better learning and conversation.”
Team building for success
Signature Sales has a tremendous track record of success — in fact, they have grown their sales 18 of their 20 years in business. And the team is optimistic (knock on wood) that 2014 will be another record year.
The leadership emphasized that their extraordinary staff play a major role in that success.
“We’ve put a big focus on recruiting smart, young, energetic people to come into our business,” said Nick, “while embracing and putting a great value on our veterans. It’s an ideal mix that generates new ideas with the wisdom of experience. It used to be that you’d come up through the business because of family involvement and then slowly work your way in. While that still happens, we’re bringing in motivated new hires from outside the industry that we believe will ensure a solid future for Signature Sales. They need to get a bit more experience and seasoning, but we believe we’ve got a lot of all-stars in the making.”
Katie added, “Our best asset when it comes to recruiting is our culture. Once people see the type of environment we have and the people we have working here, they want to be part of it. We get resumes every week. Some of our employees’ spouses have even told us that after everything they’ve heard about our company, they wished they worked here too. That’s pretty high praise!”
As part of their efforts to build an engaging culture that drives business and loyalty, Signature Sales organizes various social events for their customers — as well as team-building events internally. Among them, they host tailgate parties for all of the San Diego Charger home football games, and typically draw about 50 wholesalers and contractors for spirits and some BBQ.
Signature values team building events such as softball, dodge ball, and bowling. “It’s a way for everybody to get together after hours and hang out and have fun,” said Sig. “We are all friends. We find that you do a lot better work and are more motivated when you’re working with friends. When it’s teamwork, it’s not really work. There’s also a lot less finger pointing and a lot more solution finding.”
As a thank you to employees and to mark 20 years in business last fall, Signature Sales hosted a special weekend celebration on Catalina Island for everyone in the company and their guests.
“We’ve been on a real good run,” described Katie. “We’re so proud to be a part of it. And it’s extra special because our pops started it from absolutely nothing twenty years ago. Now we have 36 employees in two facilities. We thought a company-wide outing would be really memorable for everyone.”
They kicked off the weekend with a pizza on Friday evening as everyone arrived. They also played a special video that Arron Sanders had produced, that featured every Signature Sales employee. The video was a comedic production in which the employees were looking for the “golden water heater”.
Then on Saturday morning, everyone got in the spirit with an Amazing Race type of adventure on golf carts! Everyone got special commemorative hats, t-shirts and backpacks — while Sig and Ron received specially designed Tommy Bahama shirts that depicted caricatures of them riding in a 1961 Red Corvette and Signature Sales Amazing Race logo.
Each team had a designated leader and clues to get them through seven different challenges and landmarks. One challenge involved finding a campsite on the island, assembling a tent and taking a picture of the group with the tent. Another was climbing to the top of Mount Aida, counting the number of steps and reporting back with the correct number. Members of the management team staffed each of the check-in locations, and handed out prizes as each team finished their challenges.
“People all over the island asked if we were with the actual Amazing Race TV show,” Katie laughed. “It was a lot of fun for everyone!”
At a group dinner that night, the grand prize was given to the winning team based on their total time. Although they appreciated the gift cards and gold medals, it was really the bragging rights that they were after! And Sig and Nick took the stage to show a video and tell the story of Signature Sales. Following dinner, the management team came out with boxes of iPad Air tablets to give to every employee.
More to come!
Everyone at Signature Sales is optimistic and primed for a bright future. They see the California market starting to heat up again, and believe they have the right relationships and team in place.
“We have a lot of bright prospects ahead,” Nick shared. “We recently partnered with Sioux Chief, which will be huge opportunity for us to get in front of more contractors. And that provides a domino effect — getting in front of more contractors helps all of our lines.”
Katie added, “We really look at our role as driving demand; it’s up to us to get contractors to buy our products. And our long-standing relationship with wholesalers gives them confidence to make an investment in our products. We believe we’re in the right position to truly influence the market.”
As part of the next generation of management/ownership at Signature Sales, siblings Nick and Katie are carrying on the legacy. It’s a role that is meaningful to them.
“It’s very significant for us because when Signature Sales was founded, it was the right team at the right time to get the business off the ground and build it,” Nick shared.
“And now, as we transition for the future, we’re excited because we believe that once again, we have the right team at this time at the company. The jump start that Dad and Ron and the rest of the team gave Signature Sales is phenomenal, and now we’re pumped about the future.