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WINTER 2017

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Distributor's Link Magazine Winter Issue 2017 / Vol 40 No1

110 THE DISTRIBUTOR’S

110 THE DISTRIBUTOR’S LINK DENNIS R. COWHEY THE FUTURE IS NOW from page 42 Many companies in the Fastener Industry are solidly established in the methods and business practices that worked very well 50 years ago. Others are moving forward at a rapid pace. The companies that fall behind in technology rapidly become takeover targets for the more successful companies. When that time comes, their technology (or lack of it) profoundly affects the price that they can get when they sell their company. Which Path Are You On? It pays to take time to conduct a detailed assessment of where you stand when it comes to the technology that you use. Do you have “clean” data? Are your records up to date? Can you easily access and analyze your data? Do your field people have remote access to information? Do you have an online presence? How well is your inventory managed? Is your computer related hardware up to date? Technology Is Competitive Edge Access to information and the ability to place orders from the field is a huge competitive advantage in the fastener industry. Time is of the essence and there are way too many details for someone in the field to just “know” the answers to customers questions. How well are your salespeople equipped? I can assure you that many fastener companies are taking advantage of these and other friction reducing technologies to make their businesses run more efficiently. Their customers really appreciate it and their salespeople have an easier task, while at the same time they are doing a better job. Choose Your Path Each company must choose their path. If you don’t, your path may choose you and lead you in the wrong direction. Status quo is not the way of the world these days. If you question that, just look at the news, conventional wisdom said Brexit would not happen and conventional wisdom predicted that Donald Trump could not win the Presidency. What “conventional wisdom” are you holding on to that is taking you on the wrong path? Look again. DENNIS R. COWHEY BART BASI ENDING THE CONFUSION REGARDING CONVERSION TRANSACTIONS OF THE LLC & NON-LLC from page 50 Partnership to Corporation When converting from a non-LLC/partnership or LLC filing IRS Form 1065 to a corporation, this is not a distribution. It is an exchange of assets to the corporation in exchange of shares of stock in the newly formed corporation. One advantage of this conversion is that corporations are generally lower cost to maintain year-byyear and the formation fees are generally cheaper as well. For the small/household based business, this can be a positive factor. Corporation (includes both S or C type) to an LLC/Partnership This is a distribution and it is taxable. This can be an attractive conversion, though. Limited Liability Companies are great for liability exposure to the extent or better than a corporation. Additionally, in 16 states and in one territory statutes allowing, “Series LLCs” have been enacted. The states include: Alabama, Delaware, DC, Illinois, Iowa, Kansas, Minnesota, Missouri, Montana, Nevada, North Dakota, Oklahoma, Tennessee, Texas, Utah, Wisconsin, and Puerto Rico. Series LLCs allow an owner to place assets in “series” and that contains liability through cross section existence. Conclusion LLCs can be converted every 60 months. Given the technology we now have, the concept of a company has become more fluid. No more do companies have to carry a rigid structure cradle to grave. In the electronic/computer/ internet age, a business can change its name, concept, and structure as often as it suits the owners to change it. The Center routinely advises on these matters, as well as business succession and valuations of companies. BART BASI

THE DISTRIBUTOR’S LINK 111 In the last financial year, aerospace and defence part specialist, FSL Aerospace has seen an 18% increase in turnover, and now they’re aiming even higher for this year. FSL Aerospace is a world class supplier of fasteners, fixings and associated components, supporting the Aerospace and Defence industries since 1985. With their unrestricted product range, extensive product knowledge and provision of specialist logistical solutions like DLF, VMI and Kanban systems, they are a formidable player in the industry. Following their £1 million rise in sales in the last financial year, FSL are even more driven to target a further 5% increase this year. Richard Woodward, General Manager of FSL Aerospace, says: “Most of the growth we’ve seen has been as a result of signing longterm agreements with established customers, increasing component build rates and extending existing contracts.” By building a strong reputation in aerospace through their consistently reliable supply chain management, FSL have been able to establish strong connections with aerospace giants. Nicola Woodley, Purchasing Manager at FSL, says: “Managing our supply chain involves lots of variables: people, activities, data and resources, but that’s where our experience and expertise comes in.” The aerospace supplier has an impressive 99.3% right first time accuracy rate. Nicola adds: “Our excellent systems ensure we run a tight ship.” FSL have also ramped up their investments in the last year. Richard Woodward adds, “Our investments in IT systems mean that the growth we’ve experienced has been handled smoothly by our existing team.” “I’m proud of how the team has taken on the increased business so efficiently, I think it says a lot about our capabilities as a business.” FSL are not only targeting a 5% increase in turnover. Having achieved their 5th consecutive ADS SC21 Bronze Award this year, FSL have the silver award firmly in their sights. With their increased drive and clear capabilities, FSL are aiming to develop programmes with existing clients as well as developing new clients in the aerospace industry this year. For additional information about FSL Aerospace Ltd. contact them at Unit 33 Riverside Way, Uxbridge, Middlesex UB8 2YF, United Kingdom. Tel: +44 (0)1895 817600, Fax: +44 (0)1895 817601, Email: sales@fslaerospace.co.uk or visit them online at www. fslaerospace.co.uk.

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