Impact Networking's Successful Balancing Act
Top Independent Dealer Taps Growth Areas Across Products And Services
By Frank G. Cannata
May 1, 2013
Once again, we found ourselves in Waukegan, Ill., We were invited to meet with Impact Networking, LLC. This has almost become an annual event as the company typically asks us to make a presentation and share our thoughts on a relevant topic at one of its quarterly sales and admin meetings.
The story of Impact Networking is an inspiring one. CEO Frank Cucco and President and Partner Dan Meyer are a good team as they fight the battles of maintaining profitability and a growth pattern that exceeds national averages. When the economy went south in 2009, Impact Networking found itself overextended and under financial stress. After a difficult struggle, the dealership righted itself with Cucco admitting that it was a painful learning experience. Who among us hasn't had similar experiences in their business? I know I have, and those types of sobering episodes bring to mind the old adage that experience is the best teacher.
Impact has offices in Waukegan, Chicago, Indianapolis and Brookfield (Milwaukee, Wisc.). The company's current run rate of $9 million per quarter puts them on target to hit its goal of $36 million in 2013. The company employs 158 people, with 43 sales people that will soon increase to 49.
Konica Minolta and Kyocera are Impact's major suppliers. Representatives from both companies attended our meeting and indicated that Impact is doing exceptionally well within its respective territories. We learned Impact has increased its Kyocera hardware sales revenue by 49 percent on a year-over-year basis, while Konica Minolta has helped fuel Impact's success in Production Print.
In March 2013, Impact experienced a record month in hardware with $2,232,675 in sales. As a result, the first quarter of 2013 year-over-year percentage increase was a staggering 40.3 percent. In addition, maintenance revenue was up 13 percent, yielding $1 million net revenue per month for the same period.
This is largely thanks to Impact's sales team. I could easily observe the reasons for its success. Each member of the team emanated enthusiasm and motivation. The camaraderie between them was evident. Aware of the team's contributions, Impact distributed awards to seven sales reps who generated over $1 million in hardware sales in 2012 and even one who closed over $2 million.
Since its inception in 1999, Impact's CEO Cucco has steered this company through organic growth. His targets have always been extremely ambitious and may have even caused him to overextend. However, Cucco has weathered several storms over the years, and Impact is still aggressively pursuing its objectives. The growth Impact has experienced over a 13-year period is commendable. While acquisition was originally a strong component of Impact's growth strategy, it is much less so today.
In my opinion, the products provided by its two major OEM partners — Konica Minolta and Kyocera — have been major factors in helping Impact grow. The latter has given Impact Networking the means to attack Production Print while the former has filled the lower ranges with products that are highly reliable and carry a low service burden. These two product lines align well. Adding Document Management and MPS completes the picture.
In our opinion what has helped this company grow are the products provided by its two major OEM partners, Konica Minolta and Kyocera.
Document Management and MPS completes the picture. We are not the only ones who have a high opinion of this company. For three years in a row J.D. Power and Associates ranked Impact as the top office equipment provider in Northern Illinois.
Sustaining Impact's high growth rate will be capital intensive and will require — at least at some point in the foreseable future — engagement in an acquisition strategy. However, we do not believe Cucco wants to go down that path at this time (as previously alluded to).
That said, Cucco and Meyer have skillfully taken advantage of the growth areas in our business — Production Print and Managed Services. If they can continue to maintain that balance, growth may lessen, but the company will experience a very steady stream of business.
Impact has the potential to become a $50 million company within the next five years, though it remains to be seen if the company can achieve that level of success without embracing an acquisition strategy. However, I would never bet against these guys and I wish them every possible success.