Using the Metric System in Your Business

Successful small business expansions and new formations lead the way in creating new markets, innovations and jobs that fuel economic growth and prosperity. In recognition of the importance of small business to a strong economy, the U.S. Small Business Administration (SBA) is pleased to help meet the information needs of aspiring entrepreneurs. We hope Focus on the Facts meets your needs and we invite your comments and questions. Metrication The U.S. government's decision to mandate the metric system as the preferred system of weights and measures for procurement contracts will have far reaching implications for the business community and for society. Metrication will have an impact on both product- oriented and service-oriented firms. For example, a retail business currently selling fabric in units of inches and yards will, after conversion, sell fabric in centimeters and meters. Similarly, a janitorial firm vying for cleaning contracts will bid on office space based on specifications for square and cubic meters. Metrication in essence will create a new business language as well as new opportunities for business growth. Despite these new opportunities, some small business owners will resist metrication. You should, however, convert as quickly as possible. Why? The answer is simple. Those small businesses among the first to convert to the metric system will be able to obtain the benefits of improved competitiveness, market access and standardization savings, while those who are slow to convert will recover little, if any, of their costs. The conversion process, which may involve some effort, is a procedure small business owners must undergo in order to retain their share of federal contracts. Any small businesses failing to make the transition eventually will not be competitive in metric markets of the future. The Process Metric conversion is not necessarily a complicated process. But, it will take time and careful planning to make the transition as cost-effective and as efficient as possible. There are a number of steps you can take to simplify the process. First-Cut The initial stage in metric conversion is called First Cut. In First Cut you perform a quick, rough analysis to determine if conversion is warranted. Questions you should address are: - When should you start developing a metric capability? - How fast should you phase-in metric capability? - What is involved in moving in that direction? Once you have assessed and answered these questions, you are ready to analyze the market to assure yourself there is or will be a large enough market to justify the investment. Also during this stage, prepare a cost analysis for an estimate of the costs and prepare a preliminary phase-in plan to identify when to start implementation. Your analysis should include: Market Analysis - Define goals and objectives - Check metric products sales trends (foreign and domestic) - Check suppliers, competitors and trade associations for trends - Identify types of product conversions and their impact on servicing work - Project customary vs. metric new business Cost Analysis - Add, replace or modify tools and service equipment - Add, replace or modify inspection and test equipment - When necessary, train employees in metric - Maintain, store and handle dual inventories, but work to reduce and phase-out non-metric items - Revise service order forms and other documents - Project total costs for developing metric servicing capability Preliminary Metric Phase-in Decision - Review projected sales revenues - Consider alternative phase-in plans for cost reductions - Evaluate non-cost considerations - Make preliminary decision By analyzing these factors, you will be able to - Identify new market areas, - Determine if your market is saturated with small businesses offering similar services, - Estimate the initial cost and - Outline a conversion method. Planning Next, start your Planning. This process usually focuses on four major areas -- - Demand forecasting - Service planning - Personnel training and - Paperwork changes Gather the following data for each area. Demand Forecasting - Trends in converting products now serviced to metric - Potential new metric product service work - Sales literature - Customer notification - Continuing metric market research Servicing Planning - Tools and service equipment - Inspection and test equipment - Performance and testing specifications - Metric supply sources - Purchasing specifications - Dual inventory facilities procedures - Scheduling metric servicing phase-in (lead time requirements) Personnel Training - Employee notification - Training needs identification - Type of training determination - Training materials availability (including shop charts) - Scheduling training Paperwork Changes - Service order forms - Testing reports - Parts/tools check-out forms - Accounting records - Scheduling procedural/printing changes By working through the areas described above, you now have a comprehensive, detailed metric servicing plan. But, before you make a final decision, there are two additional cost factors to consider. First, consider whether you will need to borrow money to cover the costs of metrication. Second, consider the tax implications of your metric phase-in plan. With this information you will be able to prepare a fairly accurate cost projection, which can be incorporated into the financial section of your business plan and used to justify investment costs if you apply for a loan. Phase-In Now you are ready to begin the final stage of the metrication process: Phase-In. A usual way to begin this stage is to schedule a meeting in which you affirm your commitment to the metric program. Employee motivation and support can be enhanced by outlining the importance of the program to the future of the company and to job security. Also, keeping employees informed about and identifying their roles in the process will alleviate fears and make the transition smoother. Remember, your employees are a vital key to the success or failure of the conversion process. As your company changes to metric, it is critically important that you keep a continuous check on how closely the conversion process correlates with your plans. Many companies have discovered that the most effective way of accomplishing this is by having frequent meetings of task leaders to review the previous week's experience, and by generating a set of special reports for use by the leaders. The contents of these reports should be tied closely to your phase- in plans. Metric Information Excellent sources for further information and assistance on metric conversion and the metric system are: American National Metric Council 1735 North Lynn St., Suite 950 Arlington VA 22209 National Institute of Standards and Technology Office of Metric Programs Gaithersburg MD 20899 American National Standards 1430 Broadway New York NY 10018 U.S. Small Business Administration 409 Third St. SW Washington DC 20416 For More Information Make it your business to know what business information is available, where to get it and, more importantly, how to use it. Several sources of information include: U.S. Small Business Administration - SBA District Offices - Small Business Development Centers (SBDCs) - Service Corps of Retired Executives (SCORE) - Small Business Institutes (SBIs) Consult your telephone directory under U.S. Government for your local SBA office or call the Small Business Answer Desk at 1-800-8- ASK-SBA for information on any of the above resources. Other sources - State economic development agencies - Chambers of Commerce - Local colleges and universities - The library - Manufacturers and suppliers of small business technologies and products - Trade and professional associations All SBA programs are available to the public on a nondiscriminatory basis.