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Case Study

MFS Creates Opportunities in the Midst of COVID-19 Pandemic

National distributor pivots quickly to stave off financial impact of coronavirus shutdowns. I’ve always been a very optimistic person. Optimistic people are also risk takers. We just see opportunities where others see issues. Upset customer? Let’s prove ourselves beyond belief. Slow moving product? Try a new market and see what we discover. There’s not much that will slow me down. I have to say, COVID-19 almost did. A national health pandemic was not something I’d ever considered, let alone prepared for. There isn’t a single business leader out there who entered this pandemic truly confident or left unscathed. I credit both my team and our prior experiences launching new products in new markets for how we’ve been able to weather the COVID storm and create opportunities where others saw issues. Restarting in ‘Startup Mode’ At MFS Supply, we were facing a 30% decline in sales in March. I knew I needed to make moves to survive as a company and save jobs. MFS Supply is a national distributor of renovation and preservation supplies. We work with contractors, investors and property managers in both the single-family and multifamily space. Because we provide appliances, cabinetry and other construction materials deemed essential, MFS Supply was able to stay open and operating during stay-at-home orders. But just because we were open, that didn’t mean our customers were. Real estate agents were pretty much shut down; HUD postponed foreclosures, leaving our preservation contractors in a lurch; new construction projects couldn’t find workers even if they were still operating; and multifamily renovation projects had to be deferred indefinitely. This pushed us into what I call “startup mode”—MFS Supply had to trim down, run lean and pivot into new areas that could support our company during this time. Our approach for survival boils down to three steps. First, we had to accept reality. I had a beautiful and ambitious budget for 2020 to hit—and I had to accept that it wasn’t going to happen. If I clung to what we had planned for, we would fail. Second, I needed to redefine winning for MFS Supply. We weren’t going to hit that budget, so what were we going to work toward instead? And finally, I had to execute the plan. I knew it would take speed and discipline to align the business to our new goals and game plan. Accepting Reality: A Pivot MFS Supply had run a “Jan San” unit years ago that provided custodial supplies to businesses and cleaning crews across the nation. We had always stocked masks, gloves and disinfectants although they were never a hot product for us. We sold out of everything we had by the end of March. As an essential business with employees returning to work each day, we knew firsthand how important it was to get these products into our offices and warehouses as soon as possible. So, we pivoted to personal protective equipment (PPE) and cleaning supplies—and we did it fast. Our purchasing team started searching for new vendors, any vendors that were selling PPE domestically or overseas. This was the most difficult part. Our existing vendor network was sold out of PPE almost immediately. We had to start from scratch. This new market for PPE was fast-paced and harsh. If we didn’t commit to 10,000 Lysol wipes in 15 minutes, we lost the deal. It was definitely a risk for the business. Big deposits were due upfront. We were working with new vendors who charged hefty prices that would lead to high costs to our customers. We had to jump in with both feet, win or lose, to take on this opportunity. We jumped in. Our marketing team whipped up emails, e-commerce messaging and flyers on these new products as fast as possible and rolled them to the sales team. Our sales team hit the phones armed with the basics, and we told to run with it. We transformed our fulfillment department in the warehouse to support this new program. We built out our shipping tables to include mini-bins for picking and packing to improve speed and efficiency. We quickly pushed lean practices into fulfillment, including new practices to reset inventory levels quickly and correctly. Keep in mind, we did all this with minimized staff and many employees working from home. We also had the additional challenge of implementing COVID safety practices into both fulfillment and a warehouse. Building out six-foot distances, hand-washing stations, limiting contact between employees, wearing masks and gloves—all while launching this new initiative. Here’s my optimism again: A silver lining to COVID-19 is we proved as a company that we can launch a new product program and get it out the door in record time. We definitely made mistakes—we were moving too fast not to. For example, we thought we could get products out faster and more efficiently by stocking some PPE products in our New Jersey location and others in our Ohio location. Split the load. That quickly proved to be a logistical nightmare. We had to short ship orders; New Jersey had limited staffing, so their products took longer to get out; back orders piled up. But we learned, and it strengthened our program. It also put all hands on deck. I was back in fulfillment packing boxes on Saturdays and approving orders on Sundays. From my directors to support staff, we had employees from all departments getting trained on our fulfillment process so we could keep up with our customers. Battle Scars We still have our scars from COVID-19. This PPE program wasn’t a cure-all, but it certainly helped us triage. It saved jobs, and even created new ones. The risk paid off for us, and we’re doubling down for the future. We’re continuing to build this program out to make it permanent at MFS Supply. States are opening up, and employees are returning to work. All businesses need masks, shields, wipes and more to keep their employees and customers safe. We’ve begun working with municipalities, schools and local businesses—all

From There to Here

From Salesman to CEO

Drive, thick skin and a customer-focused approach propelled Brandon Guzman’s quick rise in the industry. You could say I grew up fast. I was a latchkey kid from Puerto Rico with a single mom. I didn’t have any rules. If anything, that fueled my drive to create something, succeed at something. After moving to Cleveland, Ohio, with my mother, I attended a local Catholic school and was always searching for ways to make money. At age 13, as an eager eighth grader, I officially joined the workforce as a bag boy at the Heinens—a popular local grocery chain. I walked to work after school and worked as long as they would let me. That job taught me a lot about work ethic. Entrepreneurial Spirit Emerges Early My first entrepreneurial endeavor happened the summer after my freshman year of college at Ohio University. My friends and I had all returned home and we needed to make some cash for books and tuition. So, we decided to start a lawn care company. We rented some equipment for lawn cuts and mulching, and we printed thousands of flyers that we hand delivered to every mailbox. We started to get some calls, and then referrals, and then it just took off. Sure, it was a simple business idea, but I found I loved building something from the ground up. And I learned I could outwork the competition. Once I was back at Ohio University, I tended bar every night I could while working toward my business major. After graduation, I took a job I thought would lead to a big career and a big paycheck—insurance sales. I had no idea what I was doing or talking about. I compensated by outworking every other rep in the room. I was good at sales. I have the drive for it, the thick skin, the confidence. But I did not like the company. It was stagnant. A Startup Calls A chance encounter with an investor introduced me to a new startup that was looking for its first sales rep—MFS Supply. I jumped at the offer. The idea of working at a company that had its whole future ahead of it appealed to my entrepreneurial spirit. I started with MFS Supply that Monday. As I walked into the office, I realized the reality of startups. I walked into a single room shared with the other two employees where we had to jostle for chairs. There weren’t any desks. The only bathroom was in another tenant’s office. If all of us were making calls at the same time, you couldn’t hear yourself think. I took to it immediately though. This fledgling company needed its employees to mold it, grow it, establish its brand. Growing Pains In 2007, the year I started at MFS Supply, the company sold five products into the property preservation space to about 20,000 contractors nationwide. As the subprime mortgage crisis hit and the recession enveloped the U.S., MFS Supply thrived. Banks were foreclosing on homes left and right, hiring more and more property preservation contractors to secure and winterize the properties. MFS Supply’s customer base grew to 60,000 contractors by 2008 and hit 100,000 contractors at the height of 2009. I led the charge on expanding inventory from securing products to winterization materials. In 2007, as the first and only sales rep at MFS Supply, I didn’t know what I was doing. I didn’t know the industry, the customer. I worked 10-12 hours a day, just calling customers. Not just to sell but to ask them questions, have a conversation and start educating myself on what they really needed. The idea of really collaborating with your customers, listening to them, putting them first is what made MFS Supply stand out from the competition. It’s now a core value of the company and something we do every day. This set the tone for me and the company. I built out a strong referral program with my customers, and the company grew by focusing on adding value. When I was promoted to senior account manager, I was tasked with bringing in more sales reps to support growth. The customer-focused attitude was instilled in all of us. I remember a time I had a customer who had to have product the next day for a job. But he couldn’t afford the $300 overnight shipping. Another rep and I jumped in my car and drove the three hours to his home to deliver it to him. Often we’d get a customer order after the UPS pickup cutoff. We’d box up the order and take turns driving around the neighborhood to catch a UPS truck to hand off the package. Eyeing the Future In 2010, I signed up for night classes at Baldwin Wallace and started working toward my MBA. College had prepared me for sales, but I wanted a full understanding of management, operations and finance too. My MBA classes were a key driver in my career expectations, shifting my focus beyond sales goals and toward management. The same year I graduated from the MBA program, I was promoted to director of sales. In this new role, I oversaw the birth of a new market—REITs. In 2015, these real estate investment trusts started snapping up affordable homes in bulk in the wake of the financial crisis. Invitation Homes, American Homes 4 Rent—MFS Supply was their first vendor. REITs didn’t need many securing products, they needed appliances. This was MFS Supply’s first big product diversification. Selling appliances was a different ballgame—new shipping structure, new pricing model, huge variety of SKUs, new sales knowledge. So, I built out an appliances team to support this initiative. The following year, I launched into another new market—multifamily—and was promoted to vice president of sales and marketing. The appliance game is tough. High competition, low margins and price driven. We found it was a great way to get a foot in the door in the multifamily industry but not a product we could use

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