Attending a show? Get financing pre-approval first
Use events to develop, strengthen relationships
—Sponsored article by Blue Chip Leasing
Just as the seasons change on the calendar every year with consistency, so do the events in the Canadian manufacturing world. By the time you read this article, you might be planning to spend some time visiting the Montreal Manufacturing Technology Show (MMTS) this month.
Even it isn’t the only machine tool exhibition in Canada, MMTS provides a unique experience to interact with all the major sellers in the marketplace. The show organizers are expecting more than 4,000 attendees who will be visiting 200 sellers of machinery, equipment, and accessories. It’s not only designed to showcase some of
the newest machine technologies, but also to make this technology available to be delivered as soon as the show ends.
The entire show can be covered in one day, and it can be very easy to meet and spend time with the upper management of nearly every significant seller of machinery in Canada.
The key for MMTS is the booths are, for the most part, arranged by local representation with support from the manufacturers. From the visitor’s perspective, this means the people working the booth will be a combination of staff from the distributor level and some of the applications support staff.
On a personal level, what I always found most important about attending these smaller shows is the ability for business owners to interact with their suppliers. Having come from the sales side of the machine tool industry and working out of the Toronto-based head office, I didn’t have many opportunities to interact with our Quebec customers face-to-face.
We had a loyal customer base, developed over many years, and although we represented good equipment and provided excellent service and support, it was our ability to develop close relationships with our customers that allowed us to continue to sell them equipment.
There is nothing more important than to be able to pick up a phone and know exactly who is on the other end when you’re dealing with an important issue like a machine being down, and it is at these shows where the relationships are established and strengthened.
I remember working on the sale of a large, multiaxis CNC lathe to one of our best customers in Montreal some years ago. As any seller or buyer will tell you, the sales cycle for such a machine (usually costing in excess of $500,000) is typically months.
In any event, the plan was to finalize their purchase order at this show, but when my uncle was about to close the deal, we found out our competitor had a machine available, which was about 15 per cent cheaper, and it could be delivered right away. Ours was a factory order, meaning an approximately four-month delivery time.
The only way for us to salvage the order was to take one of the machines we had at our booth and deliver it to the customer after the show on a short-term rental basis until a properly configured machine was available from the factory.
Because it was my responsibility to make all this happen from a logistical standpoint, I had a front-row seat to watch it all unfold, and there is no way this could have happened if the two of them were not sitting right in front of each other at the show.
Having spent many hours at this show, first as a seller and the last three shows as a financier, I can attest that most manufacturers don’t attend just for the experience.
Yes, the industry is its own little world, and if you have been in it long enough, you will no doubt run into some old friends, but the reality is anyone attending is doing so with a specific purpose in mind. Usually, attendees have a piece of equipment or technology that needs to be upgraded or replaced, or they are looking for new ideas to improve efficiency and increase profits.
I suggest to my clients, particularly if they’re thinking of making a purchase at a show, to get financing pre-approval before attending. They then know what money will be available—a budget so to speak—and when they’re configuring a new piece of equipment, they have an idea of what they can spend and what the monthly payment will look like. Ultimately, it becomes a simple business decision as to whether or not to proceed.
The most common theme a potential buyer will come across at one of these exhibitions is a show special. I can tell you from first-hand experience that sellers spend inordinate amounts of money to decorate their booths and stock them with new technology and people, so there is an immense amount of pressure to move product.
Going to a show with a pre-approval in hand may provide an opportunity to negotiate a great deal on a new piece of equipment, and if that’s the case, it certainly will have been a productive use of time.
Ken Hurwitz is senior account manager with Blue Chip Leasing Corporation, an equipment finance company in Toronto. Ken has years of experience in the machine tool industry and now works to help all types of manufacturers either source or tap into their own capital to optimize their operations. Contact Ken at (416) 614-5878 or at via email. Learn more at www.bluechipleasing.com
This article is part of the Financial Management Success Centre, showcasing strategies to access working capital, reduce costs, and leverage the value of shop floor equipment, and was first published in the April 2016 edition of Canadian Metalworking.