The Business: SESCOM Inc., based at 2100 Ward Drive in Henderson, manufactures more than 100 audio electronic products. The company was originally known as Scientific Electronic Systems, but the name was later shortened to make it easier to remember.
The Players: Franklin Miller, sole owner and founder of SESCOM, grew up in the Los Angeles area. While attending junior high school, he developed an interest in electronics which ultimately became a lifelong pursuit.
The Problem: Miller discovered shortly after starting his business in 1968 that there existed a strong market for his products in Europe and Asia. He had no experience in exporting and had to learn the rules of the game and how to do business in other countries.
After building a successful export operation, Miller contracted diabetes in 1992 and developed other health problems that prevented him from traveling to see his clients overseas. His export business began to decline, spurring him to investigate ways to get his international business back on track.
The Background: Miller originally chose to start his own company because there was a strong market for the microphones he developed for the electronic paging systems used by fast-food chains, grocery stores and similar operations to let customers know their order was ready, or give employees key information.
In 1973, he was contacted by an Australian railroad that wanted to buy 50 of his microphones. Miller decided to conduct the transaction himself, instead of using the services of a international trade broker. An official at the U.S. Department of Commerce helped him with the complex paperwork and gave him advice on how to ship his products. As a result, Miller saw the potential of international trade to boost his company’s sales.
Six years later, Miller made another key business decision and relocated his company from the Los Angeles area to Las Vegas. He was attracted to Southern Nevada because the taxes were lower, land was cheaper and local government was more friendly to business. He subsequently moved his operation in 1986 from a small building in Las Vegas to a 1.3-acre parcel in Henderson where he built a 10,000-square-foot facility. Miller has twice taken on partners, but both times the arrangement did not succeed. Over the life of his company, he has relied upon his own instincts to become successful in the difficult world of international trade.
The Solution: After the Australian deal, Miller came up with a strategy to find more international customers. He advertised in four trade publications for a year, but did not expect to generate business from the ads. Miller’s goal was to gain name recognition for his company and products. His next step was to attend a foreign trade show in London.
“I had tremendous success,” Miller recalls. He made $60,000 worth of deals at the show and arrangements to distribute his products in six countries.
Miller no longer needed the help of a government official to navigate the bureaucratic maze. He learned how to negotiate with freight forwarders to ship his products, and how to move his products through customs. He also studied the sophisticated world of international banking.
Miller’s company expanded its product line during the 1980s to keep up with new technology. He developed audio products that enabled two different mediums to “communicate with each other?’ For example, SESCOM innovated an electronic system that allowed a person using a computer to make an audio presentation to an auditorium at a remote location.
In 1988, Miller’s company was named Nevada’s Exporter of the Year by the U.S. Small Business Administration. He won similar honors from the U.S. Department of Commerce and was twice honored by the city of Henderson for SESCOM’s success in foreign exports.
Miller was never concerned about obtaining contracts. He believed they were too easy to break, and if he had a problem with a customer reneging on a contract, he would have to deal with lawyers and regulations in a foreign country. Instead, he did business with a handshake and visited all his foreign customers personally. He continued to display at trade shows in Europe and Asia to develop his foreign business.
His customers recommended him to other customers and his business grew. “This only happens when you make the effort to go there in person and meet with your customers face-to-face,~’ Miller said. It was in the best interests of both parties to trust each other, If a customer didn’t pay, Miller stopped shipping his products.
Miller’s person-to-person approach suffered when he became ill eight years ago. He was forced to curtail travel causing sales to eventually drop off.
Miller made several business decisions in an effort to remain profitable. He streamlined his operation and cut the number of products from about 300 to 100. He made arrangements to have his products manufactured in Mexico and Taiwan to save money. One of the main products he is counting on to become a big success is a device that takes the “hum” and “buzz” out of remote audio transmissions such as those made by television correspondents to TV studios.
Product line modifications notwithstanding, Miller’s biggest decision came when he signed a deal with E&E Exports of Orange County, Calif. His arrangement is for E&E to represent him at trade shows and make the trips he used to make to see customers. Miller said E&E has a good track record and he has faith it can carry on for him in the international arena.