The Harloff Company

www.harloff.com

Colorado Springs, Colorado

Founded: 1951

Privately owned

Employees: About 60

Industry: Bioscience & Medical

Products: Medical carts and storage solutions

President John Sweetland is working to make sure growth glides ahead as smoothly as the medical carts the company manufactures.

Norman Harloff launched his namesake company from his garage in 1951, producing housekeeping carts. After he sold the business in 1986 to the California-based Winsford Corp., The Harloff Company shifted its focus to medical carts; that's because Winsford's Forbes Industries also specialized in products for the hospitality industry, such as bellman's carts.

"It was deemed a strategic advantage to the company to consolidate all of the hotel products under the brand that was strong, Forbes, and let Harloff be freed from managing that and focus time and attention on, and get more out of, the medical market," Sweetland says. "It worked, because we did start growing more significantly after that change was finalized."

Growth has continued in later years but has been erratic at times, Sweetland says. "We certainly experienced our downturn in the 2007 to 2008 period along with everybody else, though we did regain that market share. Lately, our growth has not been where we want it to be, and we are in the process of making some significant changes in personnel and product to get back on track."

The medical market targeted by Harloff includes hospitals, doctor officers, surgery centers, long-term and assisted care facilities and even prisons, Sweetland says.

While the healthcare industry is a strong one, it has its own challenges, he adds. "The Affordable Care Act created some interesting disruptions when it came to capital equipment. The capital equipment that we offer, it doesn't produce a diagnostic service, it doesn't provide a billable service. It's necessary and it's commonly in use, but it's not necessarily the thing they're going to have top the capital list to buy."

Notes Sweetland: "The capital equipment market right now is not as healthy as we would like to see it."

Regardless, he says that Harloff, which has a 54,000-square-foot manufacturing plant on the east side of Colorado Springs, works to grab its share of that market by standing out in several ways. A big one: manufacturing its carts in-house. "Several of our competitors don't do their own manufacturing or don't have their manufacturing in the same building as their sales office," says Sweetland. "We have consolidation of production, sales and management all in one location. We're a quality-oriented manufacturer, so we have a 12-year manufacturer's warranty on our products."

Harloff also can custom-design carts and has niche products that its competitors don't. "They don't necessarily account for a large part of our business, but they are a differentiator," Sweetland says. One example: "We do a metal cart that's safe to be used in MRI suites because it's constructed out of nonferrous materials and is certified by an outside agency to be used in that way."

Challenges: Getting the right people can be a challenge, Sweetland says. "As a small company, we don't necessarily attract the best talent for sales and marketing activities, and we've been weak in those areas. As a small company, we're somewhat resource constrained as well. And sometimes, especially when times are a little bit tough, you tend to retreat in yourself and not do as much travel and exposing yourself in the market as you should. So those are the challenges that we are working on overcoming."

The continuing tariffs on steel and aluminum have also been an issue, Sweetland says. After seeing "very significant increases" from its suppliers, Harloff had to do a midyear price increase on its products.

Opportunities: New products, such as improved storage cabinets for endoscopes, and a reinvigorated sales team, led by a new vice president of sales, should open the door to future growth, Sweetland says.

As new hospitals and other health care facilities arise across the country, they offer potential new markets, he adds. "We try to look for new-build projects where we can get the attention of whoever is doing the specifications and announce ourselves to them."

Harloff also sells internationally. While that portion of the business has shrunk, Sweetland is looking to reclaim at least some of it. "The big international market for our type of products is the Middle East, which has gone through a lot of turmoil recently, what with oil prices down and other geopolitical problems. We are hoping there's a rebound."

Needs: "We have a need to sharpen our marketing and tell our story better," Sweetland says. "We really do a good job at putting the steak out there, but selling is also about the sizzle. And we need to do a better job of selling the sizzle at Harloff."