As president and CEO of Merrimak Capital, Mary Kariotis’s focus has changed. As a young UC Berkeley graduate, she accepted a job selling telecommunications equipment. “I loved that the sales industry was upbeat and that success largely depended on your ability to be a people pleaser,” she says. When Kariotis’s clients began to lease equipment from her, it was the beginning of a successful 30-year career that would take her to the top of Merrimak, where her leadership has been instrumental to the company’s growth. Kariotis is now responsible for making the difficult decisions, though she hasn’t lost her love or excitement for the industry. Today, she’s still “down in the trenches” with her team, learning from every mistake and celebrating every multimillion-dollar opportunity with enterprise accounts. Here, the president and CEO talks to us about what’s happening in her industry.
You’ve been instrumental in many of Merrimak’s biggest changes, including its restructuring as a woman-owned business. What’s your approach?
Kariotis: Once identified, ineffective business practices must be immediately remedied, and this often requires taking risks. It was clear that the company needed to be restructured. Our business had evolved where our lease originations were predominately generated through independent contractors; though successful, this model did not allow for the growth I envisioned. Four years ago we began restructuring the company; we eliminated the independent contractor channels and have since tripled lease origination revenues, added 21 active enterprise accounts, and we’re on our way to achieving our goal of having over 50 active enterprise accounts by the end 2014.
Competitive pricing is one of the company’s biggest goals, and it’s made possible by your refurbishment centers. How does this give you a competitive edge?
Kariotis: Merrimak is one of the few leasing companies that provide in-house refurbishment and remarketing services for off-lease equipment. This gives us an edge because we do not have to pay outside brokers for equipment refurbishment and resale. We like to know and understand the assets we lease. By this I mean we like to know the entire sales cycle of laptops, servers, forklifts, medical equipment, etc. By controlling the entire sales cycle, we understand the products we lease, enabling us to provide better pricing and service than our competition.
What I’ve Learned
Lessons in Leadership
From Mary Kariotis
1.
“Never hear the word no. This is a message that I fully expect the entire company to adhere to. Rather than accepting no as an answer, find a creative way to provide a solution.”
2.
“Solve a problem. Merrimak’s sales approach is to identify each individual customer’s specific need.”
3.
“Take a leap of faith. If you have properly evaluated all the possible outcomes, take educated risks with the goal of improving processes and increasing revenues. Make sure there’s always a Plan B for every critical decision, because things don’t always go as expected.”
What are some of the biggest challenges your industry faces? How does Merrimak navigate these issues?
Kariotis: The industry’s greatest challenges are a declining economy, eroding margins, and increased competition. Merrimak’s focus is on mitigating credit risk with enterprise accounts that provide essential-use products. The sheer size of these companies provides an array of leasing opportunities, and our creative structures enable us to offer solutions that work for clients in a difficult economy.
What are the advantages of leasing equipment for companies in today’s economy?
Kariotis: Our clients have the cash to purchase equipment, but typically don’t want to deal with having to remarket or dispose of retiring equipment. There are many other advantages, such as preservation of capital and hedging against technological obsolescence. It’s our goal to provide a solution that provides the lowest cost of use to our clients, which helps make the decision to lease an easy one. The need to lease will always exist, because it increases cash on hand, improves balance sheets, increases efficiency, provides a competitive edge, and takes customers out of the business of remarketing used equipment.
What type of equipment is most commonly leased? How has Merrimak found the reserves to own and license these products?
Kariotis: Merrimak’s portfolio is predominately comprised of IT, materials handling, and machine-tooling equipment, with an increased focus on manufacturing and fleet. Merrimak holds 99 percent of the assets it originates for its own account by investing its own capital. The company also has access to multimillion-dollar preapproved recourse equity lines from our long-term banking partners.
