Marco Business Products, Inc.

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Marco Business Products, Inc.

3000 Division Street
St. Cloud, Minnesota 56301
U.S.A.
Telephone: (320) 259-3000
Toll Free: (800) 892-8548
Fax: (320) 259-3087
Web site: http://www.marconet.com

Private Company
Incorporated: 1973
Employees: 188
Sales: 40.5 million (2004 est.)
NAIC: 541512 Computer Systems Design Services; 541519 Other Computer Related Services; 443120 Computer and Software Stores

Marco Business Products, Inc. stands out among the largest business services and business product companies in Minnesota and North Dakota. The company operates out of six satellite offices throughout Minnesota and a branch office in Fargo, North Dakota. Marco Business Products partners with such companies as Cisco Systems and Microsoft to offer 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 site hosting. In addition to its services, Marco sells products for the office, including digital copiers and printers, video systems, and office furniture.

1972–90: Looking for Opportunity

In the early 1970s Gary Marsden was a young salesman eager to step out on his own. Marsden teamed up with a partner named Dave Marquardt to buy a typewriter shop in St. Cloud, Minnesota, that had been advertised in the newspaper. The Typewriter Shop was an established business with 14 employees and sales of approximately $500,000 a year. The 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 learned after inquiring further. The advertisement for The Typewriter Shop had been listed in the wrong section of the paper. Marsden had been looking for business opportunities in the Twin Cities metro area and The Typewriter Shop was in St. Cloud, over 100 miles from where Marsden 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 operation 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 Marquardt spoke of the impetus behind the purchase in Twin Cities Business Monthly saying, "We thought we could do something good with a sleepy business like this, and so we bought it in January 1973."

Knowing they had plans for expansion on the horizon, Marsden and Marquardt changed the name of the company from The Typewriter Shop to Marco Business Products and began to expand the inventory from typewriters to an assortment of business products, machines, and services.

In 1974 Marco had begun selling CPT word processing systems and the following year the company began marketing Savin copiers. Business machinery was rapidly changing during the 1970s as innovations industrywide were replacing products that had long been the staple of offices for many decades. Mimeograph machines, manual typewriters, and the like 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, Marco also focused on office furniture systems and opened a facility in 1977 at 609 E. St. Germain in St. Cloud. The company became a distributor of Steelcase office furniture systems. By 1979 Marco signed an agreement to carry Sharp copiers. The sales and service of copiers became one of its most profitable areas of business.

The 1980s were an ideal time to own a business machine company. Technological advancements related to business instruments had occurred at a rate unparalleled in history. The advent of personal computers revolutionized 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 typewriters were still in demand despite the trend towards computer systems in the workplace. Nonetheless, from the mid-1980s home and business computer use had become a worldwide trend. Marco Business Products was connected and established in central Minnesota and was the logical choice for many businesses converting their business systems over to the latest technological wave. Throughout the decade the company focused a large part of its inventory on business software for both commercial and personal use.

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

In 1987 Marco consolidated its offices into one corporate headquarters based in St. Cloud. The company opened its facility on Division Street, one of the main thoroughfares in town. The company maintained satellite 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 Plan) was established allowing employees to own a part of the company. Management at Marco credited the ESOP with making the company more stable over time. The fact that employees worked for themselves led to less employee turnover and greater employee satisfaction. Those two elements contributed to greater customer satisfaction, according to CEO Marsden. He stated in Business Central: "The ESOP helps attract 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 Keystone Companies. The Keystone program recognized businesses that contributed 2 to 5 percent of pretax profits to charity. Marco had maintained 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 first financial setback since its founding. In that year, the company failed to turn a profit for the first time ever.

President Gary Marsden's analysis of the loss of revenue led to a restructuring and retraining of his employees. Marsden provided the training himself, focusing on customer service. The push for customer satisfaction paid off when in subsequent years the growing company recorded a profit once again. According to an article in the St. Cloud Area Chamber of Commerce magazine, Business Central, Marsden described 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 poised 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 different company's holdings. The consolidation of the office products industry had been a trend consistent with many industries in the 1980s and 1990s and Marco decided to concentrate its work on the growing information systems industry and rising e-business sector.

Later that year, Marco began a partnership with Microsoft. The company 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 Systems 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 company to his credit, Marsden received statewide recognition in 2001 when the corporate leader was selected for the Minnesota Entrepreneurial Success Award. The previous year Marsden had been lauded as the recipient of the St. Cloud Area Entrepreneurial Success Award. The same year, Marco Business Products distinguished itself by becoming 100 percent employee owned. In anticipation of his January 2005 retirement, Marsden had sold his own share in the company.

In June 2004, Marco Business Products received one of its highest honors 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 Twin Cities Business Monthly, "Our strength has been that we've been able to adapt and change over time, from a seller of office products to a technology solutions provider."

Company Perspectives:

Marco's vision is total customer satisfaction for integrated information solutions—guaranteed. Marco's mission is to help our customers understand 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 basic precepts provide the foundation for Marco's principles, policies, practices, procedures and rules. We believe the success of our customers and our company is interdependent. Our mutual well being is best achieved through the establishment of long-lasting business relationships.

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 and leadership the company promoted.

In January 2005 Gary Marsden retired and Jeff Gau, a Marco employee since 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 acumen, and a marked sense of purpose and drive.

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

Principal Competitors

International Business Machines Corporation; Ingram Micro Inc.; Tech Data Corporation

Key Dates:

1973:: Gary Marsden and partner Dave Marquardt buy The Typewriter 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 restructure.
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 Success Award; Marco becomes 100 percent employee owned.
2004:: Marco is honored as one of the top 25 Best Small Companies to work for in the United States.