Marco Business Products, Inc. Business Information, Profile, and History

Company Perspectives:

Marco's vision is total customer satisfaction for integrated informat ion solutions--guaranteed. Marco's mission is to help our customers u nderstand and apply information technology that contributes to their success. Our philosophy is that any organization in order to survive and achieve success, must adhere to a sound set of beliefs. These bas ic precepts provide the foundation for Marco's principles, policies, practices, procedures and rules. We believe the success of our custom ers and our company is interdependent. Our mutual well being is best achieved through the establishment of long-lasting business relations hips.

History of Marco Business Products, Inc.

Marco Business Products, Inc. stands out among the largest business s ervices and business product companies in Minnesota and North Dakota. The company operates out of six satellite offices throughout Minneso ta and a branch office in Fargo, North Dakota. Marco Business Product s partners with such companies as Cisco Systems and Microsoft to offe r data networking solutions. The company assists other companies with Information Technology services including systems integration, data migration, and software programming. Marco also serves companies with telecom services including IP telephony, Internet access, and web si te hosting. In addition to its services, Marco sells products for the office, including digital copiers and printers, video systems, and o ffice furniture.

1972-90: Looking for Opportunity

In the early 1970s Gary Marsden was a young salesman eager to step ou t on his own. Marsden teamed up with a partner named Dave Marquardt t o buy a typewriter shop in St. Cloud, Minnesota, that had been advert ised in the newspaper. The Typewriter Shop was an established busines s with 14 employees and sales of approximately $500,000 a year. T he business appealed to Marsden because he had worked for IBM when he was first out of college and knew a bit about business machinery.

There was one significant drawback to the company that Marsden learne d after inquiring further. The advertisement for The Typewriter Shop had been listed in the wrong section of the paper. Marsden had been l ooking for business opportunities in the Twin Cities metro area and T he Typewriter Shop was in St. Cloud, over 100 miles from where Marsde n had wanted to establish his business.

Though reluctant to leave the Twin Cities of Minneapolis and St. Paul , Gary Marsden believed that the opportunity to begin his own operati on was good enough to draw him to the smaller city of St. Cloud. The Typewriter Shop held promise, and it was priced right. Marsden and Ma rquardt spoke of the impetus behind the purchase in Twin Cities Bu siness Monthly saying, "We thought we could do something good wit h a sleepy business like this, and so we bought it in January 1973."

Knowing they had plans for expansion on the horizon, Marsden and Marq uardt changed the name of the company from The Typewriter Shop to Mar co Business Products and began to expand the inventory from typewrite rs to an assortment of business products, machines, and services.

In 1974 Marco had begun selling CPT word processing systems and the f ollowing year the company began marketing Savin copiers. Business mac hinery was rapidly changing during the 1970s as innovations industryw ide were replacing products that had long been the staple of offices for many decades. Mimeograph machines, manual typewriters, and the li ke had become obsolete in a few short years.

By 1977 sales had increased to $3 million. Marsden and Marquardt' s gamble was paying off. While expanding its machinery offerings, Mar co also focused on office furniture systems and opened a facility in 1977 at 609 E. St. Germain in St. Cloud. The company became a distrib utor of Steelcase office furniture systems. By 1979 Marco signed an a greement to carry Sharp copiers. The sales and service of copiers bec ame one of its most profitable areas of business.

The 1980s were an ideal time to own a business machine company. Techn ological advancements related to business instruments had occurred at a rate unparalleled in history. The advent of personal computers rev olutionized the workplace and Marco Business Products was in place to capitalize on the PC's success.

In 1983 the company became a marketplace for IBM typewriters. The typ ewriters were still in demand despite the trend towards computer syst ems in the workplace. Nonetheless, from the mid-1980s home and busine ss computer use had become a worldwide trend. Marco Business Products was connected and established in central Minnesota and was the logic al choice for many businesses converting their business systems over to the latest technological wave. Throughout the decade the company f ocused a large part of its inventory on business software for both co mmercial and personal use.

In 1985, Marco sold Epson personal computers and Sharp facsimile mach ines. By 1988 the company continued its emphasis on the emerging pers onal computer market by becoming a computer franchise for IBM, Compaq , and Hewlett Packard.

In 1987 Marco consolidated its offices into one corporate headquarter s based in St. Cloud. The company opened its facility on Division Str eet, one of the main thoroughfares in town. The company maintained sa tellite offices in Brainerd and Fargo.

The company experienced rapid growth toward the end of the 1980s. One of the defining moments in its history came in 1989 when the company began its employee ownership plan. Partner Dave Marquardt decided to sell his share of the company. An ESOP (Employee Stock Ownership Pla n) was established allowing employees to own a part of the company. M anagement at Marco credited the ESOP with making the company more sta ble over time. The fact that employees worked for themselves led to l ess employee turnover and greater employee satisfaction. Those two el ements contributed to greater customer satisfaction, according to CEO Marsden. He stated in Business Central: "The ESOP helps attra ct and retain good people. We've had eight percent turnover at Marco compared to 20-plus percent in the industry."

Marco Business Products was also one of the earliest Minnesota Keysto ne Companies. The Keystone program recognized businesses that contrib uted 2 to 5 percent of pretax profits to charity. Marco had maintaine d its status as a 5 percent donor since the program's founding.

From 1989 to 1990 Marco had more than doubled its number of employees , jumping from 57 to 117. By 1991, however, the company faced its fir st financial setback since its founding. In that year, the company fa iled to turn a profit for the first time ever.

President Gary Marsden's analysis of the loss of revenue led to a res tructuring and retraining of his employees. Marsden provided the trai ning himself, focusing on customer service. The push for customer sat isfaction paid off when in subsequent years the growing company recor ded a profit once again. According to an article in the St. Cloud Are a Chamber of Commerce magazine, Business Central, Marsden desc ribed the loss as a "wake-up call." The article continued by pointing out the success Marco experienced because of the retraining program: "What emerged at the end of the year was a newly awakened giant pois ed for high speed growth in a high tech environment."

The company sold off its office supply division in March 1997 to U.S. Office Products. U.S. Office Products set out to acquire 11 differen t company's holdings. The consolidation of the office products indust ry had been a trend consistent with many industries in the 1980s and 1990s and Marco decided to concentrate its work on the growing inform ation systems industry and rising e-business sector.

Later that year, Marco began a partnership with Microsoft. The compan y became a Certified Solutions Partner, teaming up with the software giant to provide business software to its regional customer base. The company continued to expand its products and services when Cisco Sys tems certified engineers and network professionals, through rigorous training in the current technologies available, at Marco in 2000.

With years of experience and a regionally and nationally recognized c ompany to his credit, Marsden received statewide recognition in 2001 when the corporate leader was selected for the Minnesota Entrepreneur ial Success Award. The previous year Marsden had been lauded as the r ecipient of the St. Cloud Area Entrepreneurial Success Award. The sam e year, Marco Business Products distinguished itself by becoming 100 percent employee owned. In anticipation of his January 2005 retiremen t, Marsden had sold his own share in the company.

In June 2004, Marco Business Products received one of its highest hon ors when it was named one of the top 25 Best Small Companies to work for in the United States. The ranking was done by the Great Places to Work Institute, a research and management agency that provided human resource consultancy.

Marsden spoke of his company's success in a December 2004 article in< I> Twin Cities Business Monthly, "Our strength has been that we'v e been able to adapt and change over time, from a seller of office pr oducts to a technology solutions provider."

The corporate culture at Marco Business Products had always been one of giving back to the community and the recognition that Marsden and Marco received was the community's way of acknowledging the service a nd leadership the company promoted.

In January 2005 Gary Marsden retired and Jeff Gau, a Marco employee s ince the mid-1980s, took over the helm as president and CEO.

Twin Cities Business Monthly honored Marco as a small business success story in January 2005. The company was among nine companies chosen from approximately 60 nominations. The criteria for selection included entrepreneurial insight, management ability, marketing acume n, and a marked sense of purpose and drive.

Marco Business Products has been a successful venture for many reason s. The company excelled because of excellent leadership, adaptability , consumer trends, and a generosity of spirit that helped endear it b oth to its employees and to its customer base. Its ties with the late st technology provided by cutting edge partners including Microsoft a nd Cisco Systems ensured it a strong position in its market area in t he future.

Principal Competitors: International Business Machines Corpora tion; Ingram Micro Inc.; Tech Data Corporation

Chronology

• Key Dates:
• 1973: Gary Marsden and partner Dave Marquardt buy The Typewrit er Shop and rename it Marco Business Products.
• 1977: Marco expands its products and services and adds second location.
• 1981: Marco adds third location and shifts product emphasis to personal computers and copiers.
• 1987: Marco opens corporate headquarters on Division Street in St Cloud.
• 1991: Sales decline after rapid growth; Marco leaders restruct ure.
• 1994: Company rebounds and wins industry awards.
• 1997: Company forges partnership with Microsoft.
• 2000: Cisco Systems certifies Marco network professionals.
• 2001: Gary Marsden is selected for Minnesota Entrepreneurial S uccess Award; Marco becomes 100 percent employee owned.
• 2004: Marco is honored as one of the top 25 Best Small Compani es to work for in the United States.