Diversify

Unified Marine faced the biggest challenge in its history in 2002.

After successfully developing a niche market serving mass merchants, the marine accessories manufacturer was experiencing strong growth, primarily though a contract with Kmart. Then, Kmart declared Chapter 11 bankruptcy.

“Eighty percent of my business went away in one fell swoop,” explains David Nirenberg, CEO. “My bank, my CPA, my landlord, they didn’t give me much hope for survival.”

But Nirenberg was determined to persevere. So, he sat down with his staff and laid out the situation on the table, explaining that he wanted to work together to save the company from bankruptcy.

While some staff members were laid off, the remaining employees agreed to stay with Unified Marine and accept a pay cut under a plan in which they would return to their previous salaries or better once the company recovered.

Those cuts were part of a four-year business plan Unified Marine presented to its bank, along with its attorney and landlord.

“A bank doesn’t want to lose money,” he explains. “If they think there is an opportunity for them to get their money back at some point, you’d be surprised [at what they’ll consider.]”

By spelling out exactly how it would survive for the bank and the company’s employees, Unified Marine was able to get the support it needed to not only stay afloat, but pay the bank and its vendors off early — in only a year and a half to two years.

Since then, Nirenberg has been working to diversify his business to prevent a similar situation from happening again. Unified Marine’s catalog, for example, is separated into six markets, the performance of which the company tracks individually to ensure each is a success.

The Unified Marine CEO also underlines the importance of the company’s relationships with employees and customers.

“A lot of companies won’t share their numbers with their staff. I think you’ve got to let them see your financial statement. They need to understand what makes the company tick,” he explains. “And you’ve got to make all of your customers a partner of yours to get through this. Sometimes, I have to tell them what my cost is and ask them what they think is a fair profit for me to make.”