A Big Step Beyond Small
Edition: September 2001 - Vol 9 Number 09
Author: Laura Thill
Who's to say what keeps a small family business moving forward year after year? Perhaps it's an intuitive sense of customers' needs, or the ability to diversify, or, simply, an awareness that the family's name is on the line.
Possibly a bit of all three have helped Bergenfield, N.J.-based Cornell Surgical Co. once a small family business begun in 1945 in Union City, N.J. find its niche in the market. Today, while still family-owned, Cornell is a big step beyond small.
Cornell currently covers the northern half of New Jersey, New York City, the lower half of New York State and Eastern Pennsylvania as its regular territory. The company has 11 sales reps four more than it had just six months ago, says President Howard Shiffman. The key to this growth, Shiffman believes, has been Cornell's strong sense of diversification. The company presently caters to a range of markets:
Physician 52.4 percent.
Home care 24.3 percent.
Hospital 11.6 percent.
LTC 9.2 percent.
Wholesale 2.1 percent.
Internet 0.4 percent.
''Diversification has helped us build and grow,'' he says. ''We can sell products across markets.'' As Sales Manager Bob Hutzelman says, ''When one segment takes a dip, the strength of another offsets it.''
Since its early days, Cornell Surgical has taken an interest in new and developing markets. It was the first company to market a polio vaccine and even sold air conditioners to offices when they became available, says Shiffman.
Keeping the Customer at Heart
Big is not always better, Howard's brother and partner David Shiffman says. ''People buy from people they trust not necessarily people they like, but people they believe they can depend on.''
Indeed, next to diversification, Cornell employees cite premium customer service and attending to customers' needs as a big force behind the company's success. ''We are very personal with our customers,'' says Accounts Receivable Manager Maggie LaBoy. ''We show we care with whatever needs they may have. This is a big point that helps us compete.''
Boasts another employee, Renee Allessio, ''Service is Cornell's middle name. We have the best personnel in the business who can explain to our customers anything about med-surgical supplies, home care supplies, rehab equipment, braces, prostheses, ostomy supplies and compression therapy.'' Company employees take continuing education classes and attend national meetings and shows to keep current with industry advances, she continues.
Since the beginning, the company's motto has been ''Cornell for Service.'' It since has added, ''Serving physicians, hospitals and their patients since 1945,'' says Shiffman. What Cornell keeps in mind, adds David Shiffman, is that ''if you do something good, someone will tell two or three people. If you do something bad, the whole world will know.'' Cornell obviously has been doing something good.
Cornell Surgical began in 1945 as a partnership between Shiffman's father, John J. Shiffman, and a buddy of his from International Vitamin Corp. (currently a part of American Home Products) where the two worked during the war. The company actually included Cornell Surgical (med-surg supplies), Cornell Drug (a pharmacy) and Cornell Pharmal (a pharmaceutical manufacturer).
The seeds for this entrepreneurship were sewn years earlier in the 1930s when John began a surgical supply company, Shiffman Surgical, in Hoboken, N.J. Prior to this, he had been working 12-hour days as a pharmacist earning no more than $12 a week, and he knew there had to be a better way to make a living. Shiffman Surgical ran smoothly until such factors as the company's expansion, the Depression and the onset of World War II took their toll and forced the business finally to close its doors in the late 1930s.
A passion for the med-surgical supply business and a desire to be his own boss motivated John Shiffman to begin all over again once the War ended this time with a partner. By 1948, the two partners had grown apart. John kept the med-surgical end of the business and moved to New York, while his ex-partner retained the rest of the business in Union City.
There was at least one memorable event that the two partners shared a role in, recalls Shiffman: a smallpox epidemic. ''My father arranged for a large amount of vaccine to be made available to the local boards of health for mass inoculations for the public,'' says Shiffman. '' A local police car was sent from New Jersey to Philadelphia to pick up the vaccine. I still have a newspaper clipping of this.''
After dissolving the partnership and moving Cornell Surgical to the west end of New York City, the elder Shiffman slowly grew his company, building on a solid reputation and rapport with local physicians. It was the post-War era, when the economy was attempting to get back on its feet and physicians were seeking to return to civilian practice. Still, no one had money, says Shiffman. ''My father would set up physicians with an entire office, get a down payment if he could, and then ask them to pay him (the balance) as fast as they could after they got started. Of course, he made customers for life.''
In 1960, the Shiffman family was forced to regroup, following the untimely death of 50-year-old John Shiffman from a cerebral hemorrhage. John's wife, Anne F. Shiffman, assumed responsibility for the company's day-to-day operations while Shiffman, then 19 years old and still in college, ran the financial end of the business. ''We survived for three years like this while I finished pharmacy school and took my internship,'' says Shiffman.
At age 21, Shiffman completed his education and became president of Cornell. ''I couldn't become an officer even though I was running the business until I was 21,'' he says. ''I couldn't even sign a check.'' Howard's brother and partner David Shiffman became vice president in 1967 after graduating from college. Today, the brothers each own 50 percent of the company.
January 19, 1993, will not be a day forgotten by the Cornell members. It was a day that could have torn apart their operations if it hadn't brought them all closer together. Shiffman remembers clearly: ''That night, I got a call from the alarm company saying, 'Your alarm's down. There's a fire in the area.''' Shiffman called the police and discovered it was the Cornell building on fire. ''The fire chief said he was sorry for our loss,'' reflects Shiffman, ''But what can anyone really do?'' The next morning, Shiffman recalls, ''We sat outside on cardboard boxes, calling all of our people.'' They were wonderful, he says. ''Everyone came in jeans to pitch in.''
Cornell suffered three losses from the fire: the building, its contents and the interruption to business. Amidst haggling with the insurance company whose obstacles alone nearly knocked Cornell out of commission Cornell continued to operate out of its warehouse, which had been left standing. The door to the adjacent warehouse had been locked for security reasons, sparing it from fire damage.
In retrospect, Cornell learned that the insurance company would have paid for a temporary move. But hindsight is of little help, and for two years Shiffman, brother David and Sales Manager Bob Hutzelman all shared a desk and phone. The rest of the company weathered similar conditions.
The million-dollar question is, exactly how did the fire start? ''We had just redecorated our showroom,'' remembers Shiffman. The contractor elected to save money by polishing the walnut paneling with linseed oil instead of lemon oil. ''He left his supplies overnight and it was spontaneous combustion,'' Shiffman explains. Somehow, business continued to grow during this time, even if marginally. In 1995, Cornell moved to its current location a modern 22,000-square-foot building complete with an even nicer showroom, offices, warehouse, a 48-car parking lot, a loading dock, and an area for vans. Cornell is aware that being a private company calls for much business savvy. ''It's our money and we have to work efficiently and within our limits,'' says Shiffman.
Shiffman believes the company's biggest hurdle in the years to come will be to ''seamlessly transfer control and ownership to the next generation.'' Shiffman's son, Adam, is director of operations while daughter Jodi Silverman is director of pediatric rehab. Jodi's children, Erika and Alec, enjoy coming to work to help. ''That's how Jodi and Adam got started,'' says Shiffman. ''Maybe the fourth generation is now getting started.''
Financially speaking, Shiffman expects to double the business over the next three years, simply by ''doing what we do.'' He says, ''There was a time when we couldn't get into certain doctors' offices. We were small and unknown. Today, people see us as a viable alternative and the same offices are calling us to help them. Being a member of IMCO, our buying group, allows us to compete favorably against the larger national companies.''
''We've always moved forward,'' Shiffman adds. ''Just not in a straight line.''