• BusinessWeek
• Business Exchange

Diversify and Build Trust

When the Depression hit, the Schmidts diversified, selling janitorial supplies to restaurants and bars, including toilet seats. "It didn't matter what it was," says Kurt Schmidt, the firm's fifth-generation CEO. The company cut back on its salesforce and turned those who remained into door-to-door salesmen. The factory served as a warehouse to store the billiard tables that were purchased on credit.

At the same time, it kept its credit lines open to customers, many of whom had bought their tables. Ed Schmidt, Kurt's grandfather, told them: "If you can stick it out through these tough times, we will allow you to pay just the monthly interest on your debt to us; when business picks up, as it will, you can make payments on principal." The move paid huge dividends, creating enormous goodwill and customer loyalty.

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