Whatever Happened to "Small" Business?
Slide Show >>
I always dreamed I would retire in my late 50s, buy a small fly-fishing gear company, and spend my twilight years running a simple small business and telling fish stories. Boy, was I wrong.
I spent time over the past couple of months with K.C. Walsh, owner and president of Simms Fishing Products, the world's premier fly-fishing gear company. One of the products Simms makes is fishing waders—how tough can that be, right? Wrong again. It turns out that Walsh is running one of the most complex small businesses I have ever seen—and to do it he keeps up a pace that would put many Fortune 500 CEOs I know to shame. (Since I began talking to Walsh about his business, he has asked me to help Simms out with its corporate strategy beginning in 2007.)
NO MARGIN FOR ERROR.
The term "small business" doesn't mean what it used to. Small businesspeople today have to deal with the same issues big businesses do—global markets, complex supply chains, and fluctuating currencies—and they have to do it without an army of MBAs to support them. Gone are the days when the business owner could walk out back to talk to his local production crew before knocking off early to sneak in a round of golf or go fishing. Many small businesspeople today are the business equivalent of fighter pilots—hurtling around the globe at breakneck speed as larger competitors leave them little room for error.
With fewer than 100 employees, Simms manages the kind of complexity we used to associate only with firms of a half a billion in sales or more. Headquartered in Bozeman, Mont., the company produces more than 120 products including footwear, outerwear, and accessories, making up a total of over 1,000 stock keeping units (SKUs)—it produces more than 100 SKUs for waders alone. The company sells products in 31 countries and sources raw materials and finished goods from 12 countries. It has distribution deals with some 400 independents and most major specialty chains, as well as partnerships with the companies behind Gore-Tex and Polartec. It faces the same problems confronting larger firms in hiring skilled craftspeople, and is taking risks making major investments in manufacturing infrastructure.
Since Walsh bought the company in 1993, Simms has racked up a compound annual growth rate of over 25%—and emerged as the premier manufacturer of fishing waders in the world. To do this has required some major-league multitasking on Walsh's part.
A slide show follows on how Simms handles complex operations and keeps competitive on a small-company budget.