The husband and wife teaM THAT LAUNCHED CAPITAL OFFICE PRODUCTS FIGURED THE ONLY WAY TO TAKE ON THE BIG GUYS IN THE BUSINESS WAS TO OFFER BETTER SERVICE. SO Far, their straTEGY IS PAYING OFF WITH SNOWBALLING REVENUE AND MORE MAJOR CUSTOMERS. Richard Nelson’s first job out of school was at his father’s office supply store, where he thought he would work for life. But family businesses sometimes aren’t entirely stable. In 1995, his father faced a decline in sales and decided to sell the firm to a national competitor. Nelson and his wife Carolyn, who also worked at the family business, were left without a job. They went to work for a bigger office supply store but soon found it wasn’t the same. Clients complained about a lack of service and an inability to easily find what they needed. So with several years of experience in office supply sales but no know-how on running a business, the couple decided to open their own office supply store in Pacoima. The couple, who had two young children, drained $20,000 from their savings and started Capital Office Products with some financial help from Nelson’s parents in late 1994. They at first relied heavily on Nelson’s father for advice and financial support. “My dad said it would be a good time for us to go out on our own,” Richard Nelson said. “He said it would be easy and painted a pretty picture for me.” But things didn’t start out as easy as Nelson’s father had promised. The first day of business was tense. “It was my husband and I and we sat and looked at each other and said ‘Oh my god,'” Carolyn Nelson said. “But then the fax machine beeped and we got our first order.” The Nelsons were entering an increasingly crowded field, competing with national chains like Office Depot and Staples Inc. They decided that to remain competitive, they would have to emphasize customer service, something they believed was a weakness of the larger companies. So far, the strategy has paid off. The company projects revenues of $2 million this year, up from $480,000 in 1995, its first full year of business. Attracting former clients Carolyn, who had been a saleswoman for her father-in-law’s office supply store, kept her Rolodex after leaving that company and convinced her clients to make the switch, promising lower costs and better service. The couple chose to locate the business in Pacoima because of the easy access to five freeways within a mile, and the low rents. Carolyn focused on building clientele through cold calls to companies throughout the San Fernando and Santa Clarita valleys. She also began making periodic checks on competitors’ prices so Capital could keep its prices in the same range. Richard, meanwhile, concentrated on stocking the warehouse with the most popular supplies, and worked on building up the number of product offerings and delivering them to customers when they needed them. He worked 15-hour days, from 4 a.m. to 8 p.m., to keep up with the load during the first three years of business. They lured clients by designing individual inventory lists for big customers so they didn’t have to flip though a bulky catalog each time they ran out of something. They offered same-day or next-day delivery and set up specific delivery times. If a client had a product not carried by Capital, Richard Nelson searched to find it and bring it to the customer. Office Administrator Vicki Davis with Re/Max of Valencia, one of Capital’s first clients, said she switched from using a larger office supply store after Carolyn Nelson made her pitch. “We like that they give professional service on a personal level,” Davis said. “Carolyn comes in once a week to check on us, she keeps an inventory of our products so that if we forget something she can remind us, and they have next-day delivery or same-day delivery for emergencies.” While Capital is more expensive for some items than the warehouse stores, Davis said the personal service more than makes up for the extra cost. “We never feel like she’s not available,” Davis said. Flurry of growth last year Despite such loyal customers, things didn’t really start to take off for Capital until 1999, when it landed big accounts like MiniMed Inc. and Twentieth Century Fox. The company increased its workforce last year to help with product delivery to all the new clients. “We don’t want to be the biggest office supplier in the world,” Carolyn Nelson said. “We just want a small chunk of business.” The Nelsons recently turned to a program sponsored by the Small Business Administration and Cal State Northridge’s business school. Under the program, MBA students at CSUN study family-owned businesses like Capital and serve as consultants, making recommendations on how to improve operations. The Nelsons are hoping it will help them grow their business to $5 million in revenues in the coming years and help them market the company throughout the San Fernando Valley. Up to this point, the Nelsons had never put together a business plan to guide their growth. With the help of the MBA students, they are doing just that. “We try everything we can to grow our business,” Carolyn Nelson said.
