Time to Work on Customer Relations and Productivity

May 2, 2008

Small food and beverage companies should focus the next 12 months on programs that satisfy customer needs and bolster the skills and motivation of their human resources. That was one of the key findings of a nationwide quarterly poll of 950 food and beverage company owners and managers, co-sponsored by the Small Business Research Board (SBRB), Northfield, Ill., and International Profit Associates, Buffalo Grove, Ill.

Improving staff training, adding more staff and implementing or enhancing employee incentive programs are the top three elements that can boost productivity. Improvements to existing automation or technology or the addition of new automation or technology round out the top five.

While only 27 percent of respondents plan to expand their business during the next 12-24 months, 67 percent of them say programs aimed at meeting customer needs is their priority (20 points higher than the prior period). Adding new products is the growth strategy of 26 percent, followed by more services (25 percent) and enhancing customer services capabilities (16 percent). Adding new location facilities was mentioned only by 15 percent and expansion at current locations is the plan for a meager 10 percent.

Any growth plans are tempered by data indicating a decline of more than 17 points from the prior quarter in SBRB’s Food & Beverage Industry Small Business Confidence Index. The score was 30.67 at the end of the fourth quarter of 2007. Only 28 percent expect the economy to improve during the next 12 months. And only 18 percent plan to increase hiring, versus 43 percent in the prior period.

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