Upsize Magazine http://www.syncrotex.cn Thu, 06 Feb 2020 22:30:44 +0000 en-US hourly 1 Upsize Magazine Upsize Magazine Upsize Magazine http://www.syncrotex.cn/wp-content/uploads/powerpress/Upsize_feed_logo.png http://www.syncrotex.cn Law http://www.syncrotex.cn/business-builders/law-7 http://www.syncrotex.cn/business-builders/law-7#respond Mon, 27 Jan 2020 22:12:12 +0000 http://www.syncrotex.cn/?p=14957 On December 20, 2018, President Trump signed into law the Agriculture Improvement Act of 2018, aka the 2018 Farm Bill, which reclassified hemp from a controlled substance to an agricultural product. This law change set off a surge in businesses involving hemp and hemp-derived cannabidiol (CBD) products … and a wave of legislative proposals at […]

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On December 20, 2018, President Trump signed into law the Agriculture Improvement Act of 2018, aka the 2018 Farm Bill, which reclassified hemp from a controlled substance to an agricultural product. This law change set off a surge in businesses involving hemp and hemp-derived cannabidiol (CBD) products … and a wave of legislative proposals at both the federal and state levels to transition laws away from prohibition and instead into regulation of this new industry.

Legalization of hemp and CBD under the 2018 Farm Bill

The 2018 Farm Bill changed certain federal authorities relating to the production and marketing of hemp, defined as “the plant Cannabis sativa L. and any part of that plant, including the seeds thereof and all derivatives, extracts, cannabinoids, isomers, acids, salts, and salts of isomers, whether growing or not, with a delta-9 tetrahydrocannabinol concentration of not more than 0.3 percent on a dry weight basis.” Most importantly, these changes include removing hemp from the Controlled Substances Act, which means that cannabis plants and derivatives that contain no more than 0.3 percent THC on a dry weight basis are no longer controlled substances under federal law.

The 2018 Farm Bill, however, explicitly preserved the authority of the Food & Drug Administration (“FDA”) to regulate products containing cannabis or cannabis-derived compounds under the Federal Food Drug & Cosmetic Act (“FD&C Act”) and Section 351 of the Public Health Service Act (PHS Act). FDA treats products containing cannabis or cannabis-derived compounds as it does any other FDA-regulated products — meaning they’re subject to the same authorities and requirements as FDA-regulated products containing any other substance. This is true regardless of whether the cannabis or cannabis-derived compounds are classified as hemp under the 2018 Farm Bill.

What can legally be produced using hemp and/or CBD?

In the wake of the legalization of hemp at the federal level, the FDA is currently evaluating CBD’s safety with respect to a variety of products. For now, its stance is that products that add CBD to food or label CBD as a dietary supplement are not legal for interstate commerce.

With respect to drug products, to date the FDA has approved only one CBD product, a prescription drug product to treat two rare, severe forms of epilepsy.

As for other CBD-based products not falling under the purview of the FDA such as soaps, lotions, and the like, as well as CBD oil and tinctures, consumer demand for such products is on the rise. However, a significant challenge to those entering into this industry remains that many banks, insurance companies and merchant service companies are leery of providing services for national CBD companies and of the FDA stepping in to see whether the claimed CBD levels are present in the products and issuing warnings to companies making “egregious and unfounded claims that are aimed at vulnerable populations,” such as saying they cure Alzheimer’s, cervical cancer, fibromyalgia and more.

What about CBD-infused alcoholic beverages?

While some in the craft beverage industry pondered the idea of a CBD-infused beer or distilled spirit, the U.S. Alcohol and Tobacco and Trade Bureau (“TTB”) – the Federal agency with authority to regulate the manufacture and sale of alcoholic beverages in the United States – foreclosed such speculation in May 2019. When dealing with the infusion of non-traditional ingredients into alcoholic beverages, the TTB defers to the FDA as to its interpretation of the FD&C Act and has thus issued guidance that use of CBD in alcoholic beverages is not legal.

What does this mean for legalization of cannabis?

At the same time as federal and state laws have changed to allow for legalization and exploitation of hemp and CBD-based products, several state legislatures have taken steps to legalize the use of cannabis (i.e., marijuana), either for medical or recreational use. At the federal level, however, the regulatory posture remains one of prohibition. During the Obama Administration, the U.S. Department of Justice issued guidance to all U.S. Attorney Offices known as the “Cole Memorandum” which stated that given its limited resources, the DOJ would not enforce federal marijuana prohibition in states that “legalized marijuana in some form and … implemented strong and effective regulatory and enforcement systems to control the cultivation, distribution, sale, and possession of marijuana,” except where a lack of federal enforcement would undermine federal priorities.

The Cole Memorandum was rescinded by Attorney General Jeff Sessions in January 2018 and, while President Trump has at times indicated support for federal legalization of medical marijuana or allowing the states to decide how to regulate marijuana use, no further progress has been made to date at the federal level. And so long as marijuana remains on Schedule I of the Controlled Substances Act, cannabis businesses will continue to encounter barriers to growth.

For example, marijuana companies aren’t able to take any deductions on their federal income taxes, save for cost of goods sold. If profitable, this can mean paying an effective tax rate of 70% to 90%, which leaves little income left over for reinvestment and hiring. Further, and most importantly, U.S. cannabis companies have minimal access to basic banking services, including loans, lines of credit, and even checking accounts. Since financial institutions report to the Federal Deposit Insurance Corporation (FDIC), and the FDIC is a federally created agency, banks and credit unions fear possible financial and/or criminal repercussions for aiding cannabis companies. This has made marijuana an industry dominated by cash, which is both a security concern and an expansionary constraint.

Minnesota’s legal landscape

Having legalized medical cannabis in 2014, the Minnesota Legislature is now poised to follow the lead of other states and act on recreational marijuana laws. With an upcoming legislative session occurring during an election year with divided government, look for recreational marijuana to be a hot topic of debate.

What does the future hold?

As noted herein, the developing legal patchwork which has replaced the prior system of prohibition when it comes to hemp, CBD (and on a state level, cannabis) requires thoughtful and comprehensive regulation from legislative bodies, as opposed to the current environment which leaves all authority for determination of what is permitted and what is not in the hands of the regulatory authorities. Much like the craft beverage boom that gave rise to increased jobs, tax revenue and economic growth, removing unnecessary restrictions on this new industry where appropriate will continue to present business opportunities in the years to come.

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Management http://www.syncrotex.cn/business-builders/management-13 http://www.syncrotex.cn/business-builders/management-13#respond Mon, 27 Jan 2020 22:11:46 +0000 http://www.syncrotex.cn/?p=14964 According to the Centers for Disease Control and Prevention (CDC), mental health disorders are among the most burdensome health concerns in the United States. Nearly one in five Americans age 18 or older reported a mental illness in 2016. Since approximately 63 percent of Americans are part of the U.S. labor force, supporting employees’ mental […]

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According to the Centers for Disease Control and Prevention (CDC), mental health disorders are among the most burdensome health concerns in the United States. Nearly one in five Americans age 18 or older reported a mental illness in 2016. Since approximately 63 percent of Americans are part of the U.S. labor force, supporting employees’ mental health in the workplace is vital.

Not only is taking care of our employees the right thing to do, mental health issues can also have a direct effect on businesses’ bottom lines. Unfortunately, in addition to the everyday stressors affecting employees’ mental health, over the past few years, workplaces have increasingly had to address a host of concerning behaviors, including bullying, sexual harassment, increased incidence of suicidality, anger/hostility, and overt acts of predatory violence in the form of mass shootings.

Recently, California Occupational Safety and Health Administration (OSHA) passed a regulation requiring healthcare facilities to have a formal workplace violence plan, and we are seeing movement that similar requirements will expand to many other industries across the country. Behavioral health and workplace violence are top concerns impacting the work environment.

As employers, we have much to be concerned about, yet there are some key areas we can focus on to promote workplace safety and wellbeing:

Promote a culture of respect and integrity

This seems easy, but perhaps is the most difficult outcome to achieve. Respect and integrity are not taught or trained, they are demonstrated, daily, in everyday interactions that can seem minimal and across all levels of an organization. Nothing erodes a culture of respect and integrity as much as when leadership allows disrespectful and inappropriate behaviors to continue.

Promoting respect and integrity begins at the time of hire and continues through every interaction of an employee’s pathway in the organization. Lack of these cultural values often leads to conflict, withdrawal, fear of taking risks, and, in the most extreme cases, overt violence. In fact, the single most common reason that disgruntled employees who returned to their workplace to commit violence give for their actions is their perception of not being treated fairly and with respect.


“We don’t always recognize our resilience, and far too often in the workforce we erroneously assume others don’t have it. We assume they can’t take candor or honesty. For me, nothing is more insulting.” ?


Educate employees to improve behavioral health literacy and wellbeing

Given generational differences in attitudes around mental health, most adults in the workforce were not raised with heavy attention placed on wellbeing, self-care, emotional regulation and conflict resolution. These are learned skills. Educating employees on understanding healthy emotional functioning, recognizing early signs of behavioral health symptoms and how to self-regulate emotions is energy well spent toward building an emotionally healthy and thriving work culture.

Recognize when co-workers are struggling emotionally

Help employees recognize when they or their co-workers are struggling emotionally, to identify these problems upstream prior to the issue becoming a full-blown crisis or behavioral health disorder. Some early warning signs might include: changes in mood, emotional withdrawal, increased anxiety, irritability, hostility, growing distrust of others, rapid onset or escalation of substance use, developing apathy and loss of interest in previously enjoyable activities. Early intervention is always more effective than later intervention, but that starts with awareness of the problem.

Provide useful tools to assist others in crisis

Once employees recognize a developing problem within themselves or in others, they then need to know what to do next. Where do they go? Who do they talk to? What resources are available? It’s very important to provide them the tools and pathways to get the help they need, at any level of a crisis. These can be contacting peer support groups, calling employee assistance program (EAP) resources, engaging community resources, and/or using digital support applications to assist.

An example: At R3 Continuum, where I work, we saw such a high need for this in the workplace that we developed R3SILIENCY, an artificial intelligence (AI) smartphone/tablet app that assists employees and organizational leaders navigating an emotional crisis. The app helps people maximize internal resilience by accessing best-practice treatment guidelines, offering education and training on self-care techniques, enhancing organizational connectedness at times of crisis and increasing adaptive coping at both the individual and organizational levels. ? ? ?

Empower employees and promote environmental mastery

“Environmental mastery” refers to how we interact with the world and to what extent we can shape our experiences to fit our values and priorities. It is essentially “finding your community,” and then finding your role in it in a way that helps one feel valued. That can only come through empowering employees to reach further and seize opportunities. To be clear, this does not mean giving away responsibility, authority or power to those who are not ready for such or have not earned such. Rather, it is believing enough in a person’s capabilities, strength and resilience to be open, honest and direct with them, thus allowing them to make informed choices to thrive.

Build a culture of candor

There is a great quip about resilience: “Every time you told yourself you couldn’t go on, you did.” We don’t always recognize our resilience, and far too often in the workforce we erroneously assume others don’t have it. We assume they can’t take candor or honesty. For me, nothing is more insulting.

Empowerment and candor are related. Empowerment is about honest dialogue — at times tough dialogue — that can help the person self-assess and improve. I recall years ago receiving some feedback from a supervisor, which I perceived as harsh. It was certainly negative, and I had much to improve, but the delivery was open, honest and matter-of-fact. My supervisor did not coddle me or water down the feedback and, in the process, told me “I’m sharing this because I know you can do better, you’re strong enough to take the constructive criticism, and it will help you to grow.”

The above recommendations are not an exhaustive list but serve as high-level guidelines for developing and promoting a workplace culture of respect, integrity and safety, and one in which employees thrive.

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An unmet need http://www.syncrotex.cn/letter-from-the-editor/in-a-big-corporation-youre-a-cog-and-now-in-a-start-up-youre-the-wheel http://www.syncrotex.cn/letter-from-the-editor/in-a-big-corporation-youre-a-cog-and-now-in-a-start-up-youre-the-wheel#respond Mon, 27 Jan 2020 22:11:16 +0000 http://www.syncrotex.cn/?p=14955 “In a big corporation you’re a cog, and now in a start-up you’re the wheel.” That’s how Angie Conley, CEO of the three-year-old Abilitech, described the change from her former life as an executive at Medtronic. She found her calling in a classic entrepreneurial way: “I learned of a great need that was unmet,” she […]

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“In a big corporation you’re a cog, and now in a start-up you’re the wheel.” That’s how Angie Conley, CEO of the three-year-old Abilitech, described the change from her former life as an executive at Medtronic.

She found her calling in a classic entrepreneurial way: “I learned of a great need that was unmet,” she said.

In between leaving the corporate world and starting her company, which is developing a device that uses a spring and motor to allow people with low strength to move their arms, she worked as executive director at Magic Arms. The non-profit was trying to commercialize a 3D-printed exoskeleton to help children with a rare disease called arthrogryposis.

“The kids moved their arms for the first time ever, and the parents looked like they saw a ghost and they wept,” Conley recalled. “We were able to help kids turn the pages of books and hug their parents.”

But there were three complaints: the exoskeleton was hot and heavy; the arms loaded out in the air like a Frankenstein; and the rubber bands used in the device were either set to either high or low with no ability to move between the two. “Meanwhile, people were begging me,” asking for help.

Conley had never pitched to venture capitalists before, so she applied to the Minnesota Cup, the state’s annual business competition, for mentorship. “What if I found a larger market,” was some of the best advice she received, and put together a business plan and a pitch deck. Within a month of the semi-finals she founded the company.

By late 2019, Conley’s company won the Minnesota Cup’s grand prize and its top woman-owned business category, and had attracted $10.8 million in capital. She went through the Texas Medical Center accelerator program, for one, and found intense interest from stroke patients and many more.

“Because of the unmet need we’ve had tremendous clinical interest,” including from HealthPartners and Mayo Clinic in Minnesota. Her company is working side by side with patients to perfect the device. “That’s really, really unique,” she said. “That amplifies our ability to understand the patient needs.”

The device is “remarkably different” from before, said Conley, and her name is on two patents associated with it. It’s a soft, wearable vest made of breathable material.

“We provide a support and assist at the shoulder and the elbow,” which allows movement from different levels. A spring and a motor have replaced those rubber bands. “It’s controlled by the patient. They have to provide about 10 percent” of the lift and the device does the rest. The other big difference: “We have the ability to adjust for the load of the lift,” she said, pointing out it’s different to pick up a pair of glasses than a full cup of coffee, for example.

Conley is thinking much bigger than her original group of patients. “The economics,” she muses, if only 5 percent of people with spinal cord injuries today are back to work in 10 years, are huge. “If we can get back to work faster,” she says, think of the “physical impact, the social impact, the economic impact.”

Abilitech is “pre-revenue,” as the saying goes in venture capital circles, and is set to launch its device in June of 2020.

“You get a little antsy. I can’t wait to get going,” she said, once more sounding like the wheel she has become rather than the cog she was before. “This is such a huge opportunity to make a difference.”

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Roundtable: Business boards http://www.syncrotex.cn/workshop/roundtable-business-boards http://www.syncrotex.cn/workshop/roundtable-business-boards#respond Mon, 27 Jan 2020 22:10:29 +0000 http://www.syncrotex.cn/?p=14982 Entrepreneurs often feel alone on an island when dealing with the pressures and problems they encounter running their businesses. But there usually are a number of resources they can turn to for help — including others like themselves. For many reasons, from the altruistic desire to give back to the need to put a few […]

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Entrepreneurs often feel alone on an island when dealing with the pressures and problems they encounter running their businesses. But there usually are a number of resources they can turn to for help — including others like themselves.

For many reasons, from the altruistic desire to give back to the need to put a few more dollars in their pockets, current and former business owners are willing sit on informal boards of advisers or, in some cases, more formal boards of directors.

They’re a resource that too often goes untapped, says John Francis, founder and CEO of Next Level Franchise.

“Boards may be among the more underutilized tools business owners have available to them for feedback on various issues,” he says. “A board is a powerful thing that can really add value to an organization with really little or no risk for the owner.”

Determining the right format

So, what kind of board is right for your business? The biggest difference between a board of directors and board of advisers is the level of formality and legal risk, says a panel of experts who gathered for a discussion in early January.

Boards of advisers are just that, says Jon Schindel, partner with SeilerSchindel PLLC. They offer advice business owners are free to follow or ignore. Boards of directors, on the other hand, are legal entities that have powers and responsibilities as defined by Minnesota statutes.

“If you say this is a board of directors that actually means something under Minnesota business law that has duties and consequences to it,” he says. “You just want to be a little cautious there.”

A board of directors is more permanent, harder to change and liable for the actions they take.

“They hire and fire and review the CEO, which is probably one of the most critical functions of a board of directors,” says Francis, an entrepreneur and consultant who sits on several of each. “And they have liabilities. Shareholders can sue a board of directors if they screw it up or do something wrong or don’t do something they are supposed to.”

Reducing infighting, buying time

Mike Porter, a professor and director in the Opus College of Business at the University of St. Thomas, spent 10 years on the advisory board of a publishing company that grew significantly during a difficult time for the industry.

The organization started as an advisory board and it technically remained that way throughout his tenure, though senior management had taken much of the board’s advice and used it to grow. The company’s shareholders included siblings who weren’t always in agreement with the decision to let the board make decisions, but it ended up being a good move.

“It pushes the leadership to a limit and it’s a limit that for long-term success is really important,” he says.

Having a board recommendation to fall back on actually can be a significant advantage in tamping down infighting.

“The president is the youngest brother,” he says. “The dynamics we had was in order to get him to have shareholder permission to bring somebody in to help with M&A, he needed to be able to say ‘the board says.’”

Acting as an intermediary is one of the unsung advantages boards can offer, adds Francis.

“A board is someone you can blame. You can blame decisions on the board,” he says. “‘Oh, the board made me do it.’ A board can give you credibility. ‘Let me run that past my board.’ Whether or not you ever do doesn’t matter. It buys you time to make a better decision.”

Contingency, transition planning

It’s less common for smaller companies to have boards of directors. Even when they do, the board’s function is primarily going to be keeping the business going strong through a transition, says Julie Keyes, founder and owner of KeyeStrategies LLC.

So, when working with a small business owner who is looking to sell a company, one of the first things Keyes recommends is forming a board of advisers.

“You need other outside advisers to actually help put a transition plan together and implement it,” she says. “I advocate for boards of advisers as much as I can.”

Involuntary exits from a business are common, but they’re also likely to go undiscussed, Keyes says. The five “Ds” that put enterprises at risk — death, disability, disaster, divorce and disagreement — happen to more than half of businesses. Boards provide at least the potential for some kind of safe landing.

“Where business owners are sorely lacking is in contingency planning,” she says. “They don’t look at the what-ifs, we all know the five Ds occur to at least half, if not more, of all business owners and the older they get the higher the likelihood. “

Francis agrees. An insurance policy is one thing that can help cover the individual and his or her family. What about employees, customers, vendors and others in the organization, he says.

“For some of these owners if the guy got hit by a bus, the board might have the ability to keep the wheels on things and either sell the company or hire somebody or do something else,” Francis says. “If you don’t have the board, that isn’t going to happen.”

That’s particularly important, Porter says, in family-owned situations where the unexpected death of an owner might create the need for some checks and balances.

“The board can be there so that Bobby doesn’t take the place just because he’s the next family member,” he says. “It keeps the wheels on and makes sure there is a process for deciding whether Bobby is the right person or, maybe Cindy is the right one. … Only the board is going to do that in a family-owned company.”

So, where do you find board members?

There are a few websites out there that look to match businesses with board members. They include Women in the Boardroom, founded by former Twin Citian Sheila Ronning, along with other sites like BoardSource and AdvisoryCloud.

“My experience is it’s personal and professional networking,” Francis says. “It’s people you know and respect and trust. … I think you’d be surprised the talent level you can recruit to a board. It’s usually higher than you expect.”

Don’t be afraid to ask a respected mentor or other person you think highly of, the experts say.

“To some degree it can be like an angel investor seeing themselves in those people,” Porter says. “The intrinsic value comes from helping like a shepherd.”

Make sure, they add, that the makeup has people who think and view the world differently and that it matches up with where the company is at in its lifecycle. Diversity is good, Francis says.

“Not just demographic diversity, but diversity of thought, experience, age — old people, young people,” he adds.

Keyes agrees that networking and mining those you know is part of building a good board. “Your network is your net worth,” she says.

But while hearty discussion is good, any search has to start with ensuring the members and owners share like values.

“Look at their expertise, make sure they are not a cookie cutter of the owners, I don’t think that’s ever a good thing,” Keyes says. “Having someone with the opposite in terms of skills and knowledge and style is a good thing — as long as the values match. They have to have a philosophy match. That’s the foundation of making a decision on who to bring in.”

And unanimously, the panel says board members should be compensated. It can be around $500 per meeting at the low end for a board of advisers or a few thousand for a more complex board of directors or for those serving in leadership roles.

Additional advice

It’s important for businesses to make sure the processes, procedures and responsibilities of their boards are spelled out in advance.

“Get the corporate documents together,” Schindel says. “They will dictate how you elect board members, what steps you have to take to call a meeting, how you vote, voting percentages to pass anything and will also define what the purview of the board is and what’s left to the shareholders. All that should be somewhere formal. It’s rules, it’s guardrails. That way nobody gets out of their lane and everyone knows what rules they are playing by.”

Schindel and Francis say board members should have the opportunity to get to know each other in informal, non-board settings. It’ll help build trust and collaboration for when they are working together on business issues.

Adds Schindel: board members don’t have to agree on everything, but do have to be respectful of each other. He’s worked with one company that has each prospective board member do a year-long internship before actually joining to ensure they are a fit.

“It’s okay to have a probationary period,” Schindel says.

Finally, facilitation is key. Make sure meetings are run well, Francis adds and make sure board members get agendas and supporting information far enough in advance of meetings so they have time to review

“If I don’t have the deck a week before I may not have a chance to get into it,” he says. “If you send it to me the night before, I’m not going to look at it on purpose. If you really want me to spend the time give me the time to do it.”

 

CONTACT THE EXPERTS

John Francis is founder and CEO of Next Level Franchise and a business adviser who sits on several boards: 612.868.0745; john@johnnyfranchise.com;
www.johnnyfranchise.com.

Julie Keyes is founder and owner of KeyeStrategies LLC: 763.350.5563; julie@keyestrategies.com;
www.keyestrategies.com.

Mike Porter is a professor and director in the Opus College of Business at the University of St. Thomas: 651.962.4376l; mcporter@stthomas.edu;
www.stthomas.edu.

Jon Schindel is a partner with SeilerSchindel PLLC: 952.358.7406; jschindel@seilerschindel.com;
www.seilerschindel.com.

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FInding financing http://www.syncrotex.cn/cover-story/finding-financing-2 http://www.syncrotex.cn/cover-story/finding-financing-2#respond Mon, 27 Jan 2020 22:09:08 +0000 http://www.syncrotex.cn/?p=14975 Mercedes Austin was a photography and psychology student 23 years ago. She was taking an art class for her sanity’s sake, but wasn’t planning on it providing a career. But a sign she regularly drove by advertising a high-end tile company kept catching her eye and one day she stopped. She ended up working there […]

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Mercedes Austin was a photography and psychology student 23 years ago. She was taking an art class for her sanity’s sake, but wasn’t planning on it providing a career.

But a sign she regularly drove by advertising a high-end tile company kept catching her eye and one day she stopped. She ended up working there for three years, collecting nothing more than her own tiles as a paycheck the first several months. Then, after attending one of the tile industry’s larger trade shows, Austin all of a sudden found a career.

“I went from being an irresponsible kid to seeing this huge possibility in tile,” says Austin, who is founder and CEO of Mercury Mosaics. “It was never something I thought I would have any interest in at all. It just kept me up at night.”

So, when a significant tax refund came around the same time she got prepaid for a job she’d been hired for, she added that to funds raised by selling her jazz CD collection and she bought her first kiln. At first, she started simple, working on ceramic light switch covers, accent mirrors, one-of-a-kind tabletops and the like. She’d put them in consignment shops in Minneapolis, where there is no money up front and no system for tracking overall sales, but she was hoping to get noticed.

“That’s how I got my start,” she says. “One thing led to another, where a client gets delighted about a little thing and they want to have you do something else, which led to me being a kitchen backsplash designer. Then you get a photo of it and you can say you’re a kitchen backsplash adviser.”

Growth brings success and struggles

Austin grew the business little by little. She focused on residential projects through 2010, then got noticed by a prominent commercial client and started doing the same. She’d do well on one job, get noticed by another client and, very intentionally, she was growing her business.

In 2015, she started refining her product offerings, focusing on three shapes and 20 colors, down from 130. That ended up being successful and she started looking at funding for expansion. Initially, she hoped to expand where she was located, but she’d also moved her administrative offices to a work sharing location, so that didn’t work.

“I was intending to add more equipment there,” she says. “It was a very intelligent plan, but it wasn’t thinking as big as it was going to get.”

She sought bank financing and was initially approved, but as the legal issues dragged on, the bank option disappeared. Enter Lesley Farmer, who does business development for KLC Financial, a capital equipment financing and leasing company. Despite a recent knee injury, Farmer went out to the company’s Minneapolis offices, met Austin and hit it off quickly. It helped, Austin says, that the response was fast — after several months of back-and-forth with the banker.

Farmer looked at Mercury Mosaics’ financial documents, learned about the business, met the employees … and signed her up. It took about an hour. KLC funds a fair number of business expansions. The company also has funded everything from website development to trucks to trampolines, she says.

“It’s really anything that a business could use that is going to provide them a benefit that has a capital tie to it,” Farmer says. “It’s not just people who are struggling.”

What is different, Farmer says, is that KLC isn’t regulated, which allows the company a bit more flexibility in how it assesses businesses than banks have. Banks, Farmer says, look at financing a piece of equipment once they have 20 percent down and the right cash flow ratios. With KLC it’s more of a collateral-based transaction. Character also is important – if someone has a good business but doesn’t have good character, there’s a risk they may not pay even if they do well, Farmer says.

“We think differently about how we price deals,” she says. “I go spend time with them. … I saw her, I saw her business, I saw the people she had employed there, her growth potential and we were able to overcome.”

Farmer wants to build a relationship with her clients.

“We really try to make sure the clients we are working with are people who, at the end of the day, I can call my friend,” Farmer says. Austin remains a fan.

“I am forever indebted to KLC,” she adds.

Asset-based lending

Along similar lines, Aspen Research found a successful financial partner in North Mill Capital, which focuses on invoice-based or asset-based lending.

Aspen had been around for decades as the research and development arm of Andersen Windows. The business unit created the Fibrex material used in its parent company’s Renewal by Andersen product. It has two units: One involves testing plastics and metals for the medical device industry and food contact specialists in plastics and metals. The other is the development and manufacturing of custom compounds for the plastics industry, with a special emphasis on bioplastics called PLA.

“We’ve been developing bioplastic solutions for different applications for the last six or seven years,” says Rick Burnton, who led an investor group that bought Aspen from Andersen in 2012.

The company had $5.5 million in revenue in 2019 and projects to $6 million this year, but he says the company is on the brink of finalizing the production and commercializing a new bioplastic material that could help replace polystyrenes and PVCs, plastic materials which are petroleum-based resins that work really well but have toxicity issues.

“It’s very hard to hit the characteristics you need in order to supplement and change over to a new material from the current ones,” he says. “The current materials are flexible and cheap and they do an amazing job, but there are environmental impacts that go along with them. In today’s world that’s becoming a bigger issue.”

If Aspen arrives at the finish line first — Burnton says they hope to have their first products on the market this year — the upside is potentially nine-figure huge for the company. Retail customers currently are clamoring for a bio-model. “That’s our goal,” he says. “That’s what we’ve been working on for the last eight years.”

North Mill has allowed Aspen to use asset-based lending to fund its receivables over the last couple years. The process is simple and straightforward.

“They’ve been a good partner for us,” he says. “It’s been a hard stretch for us to get to commercialization, but we’re just about there.”

North Mill provides short-term help

Kristin Erickson, senior vice president with North Mill Capital, says the company tries to help businesses that aren’t currently bankable, through invoice-based or asset-based lending. Where banks are largely focused on historical cash flow, she says North Mill focuses on the ability to convert collateral to cash for repayment.

The company might lend to a start-up, a company that has grown really quickly or one that is distressed. And the relationships are typically short, occasionally around six months but more typically a year or two, and involve helping them through fast growth or a time of distress.

The relationship can involve providing hands-on support for business owners in addition to the working capital. That could mean providing help with credit limits for customers or in making collection calls, introducing them to a consultant who can help with cash flow projections or renegotiating terms with vendors.

“Our goal is to get them to be bankable,” she says. “We’re helping them develop that track record they need in order to be bankable.”

The financing is more expensive than what traditional banks offer. Some will stay anyway because of the side services North Mill offers, Erickson says, but most move on when they can, though they often do so with more discipline and a sharper business sense.

“Most borrowers are looking to lower their cost of financing over time,” she says. “That’s why they’re not with us forever.”

Further alternatives exist

So, don’t give up if your first attempts at finding financing don’t succeed. There are ample sources available to businesses that can make a strong case. Don’t forget about economic development options, as well.

All has worked out well for Mercury Mosaics since it found the capital it needed for the first expansion — a fabulous space that Austin says has tons of natural light and alone acts as an employee retention tool. She’s now growing fast and on to another project and economic development perks helped her get there. Several municipalities were interested in the project. Three greater Minnesota cities were finalists after 16 initially bid. More than 60 communicated interest.

The company will soon build a warehouse in Wadena, about three hours from its current space in Minneapolis. Wadena was selected from a handful of communities that offered up packages to try and lure the company.

Justin Erickson, a principal with Essex Capital LLC, which owns the Community Venture Network (CVN). CVN has been helping small- and mid-sized businesses explore locations across the Midwest since 1991. He says communities tend to be competitive and want to attract businesses to grow. It takes a little time to put incentive programs together, which businesses need to be mindful of, Erickson says.

“If expansion is something a company is even contemplating in the early stages, it’s time to start the conversation on the economic development side,” Erickson says, adding that the market is generally good right now and a trip to talk with local municipal or economic development officials in the area where the company wants to be can help get business owners started.

Mercury Mosaics’ Austin is happy with the results. The bidding communities really made her feel welcome.

“I’m not an Amazon or Google. So, I don’t register on anyone’s radar in Minneapolis,” she says. “Out there, I feel like I might as well be Michael Douglas arriving in town. They treat you like a Hollywood celebrity.”

Contact:

Mercedes Austin, owner and founder of Mercury Mosaics: 612.400.7649; mercedes@mercurymosaics.com;
www.mercurymosaics.com.

Rick Burnton, CEO of Aspen Research:
rick.burnton@aspenresearch.com; www.aspenresearch.com.

Justin Erickson, principal at Essex Capital LLC: 612.281.4648; justin@essexcapitalllc.net; www.essexllc.net.

Kristin Erickson, senior vice president at North Mill Capital: 952.259.6222; kerickson@northmillcapital.com;
www.northmillcapital.com.

Lesley Farmer, does business development for KLC Financial: 952.224.2901; lesley@klcfinancial.com;
www.KLCFinancial.com.

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Sales http://www.syncrotex.cn/business-builders/sales-10 http://www.syncrotex.cn/business-builders/sales-10#respond Mon, 27 Jan 2020 22:08:30 +0000 http://www.syncrotex.cn/?p=14970 What is your New Year’s resolution? To grow your business? To stop working harder than you have to for better results? To begin working with more of your best customers? This is the formula that worked for me in achieving all of these while also finding more enjoyment in my business. The cost of new […]

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What is your New Year’s resolution? To grow your business? To stop working harder than you have to for better results? To begin working with more of your best customers? This is the formula that worked for me in achieving all of these while also finding more enjoyment in my business.

The cost of new business

Start by understanding what you are spending to bring in new clients. To figure that out add up all the money you spent on sales last year (salaries, commission bonuses, etc.) and your total marketing spend for the year (trade shows, mailers, website, brochures, etc.). Then divide that by the total number of new clients you onboarded in the year. Example: $475,000 spent on the sales force + another $600,000 marketing expenses divided by 47 new clients in 2019 equals a cost of $22,872 per new client.

This doesn’t distinguish the costs to bring in a profitable, loyal client from an abusive, money-losing customer. So why not focus on the ones we want? Whether your new business comes from a sales force or by referral, using the “Grand Slam Clients” approach makes it crystal clear which customers are best for your company.

The baseball reference isn’t accidental. To get Grand Slam Clients, we can learn from Ted Williams of Boston Red Sox fame. He was the last player to hit over .400 in the majors for a season. He mapped out every pitch from every at bat to see which pitches he should swing at and which ones (even some strikes) he should let go by.

Hitting singles — demographics

Demographics are the easiest to identify. This includes the employee or revenue size, industry, geography and role of the prospects you would like to have as clients. Most companies can identify these attributes reasonably well. Some still struggle because they don’t want to lose out on any opportunities. A lawyer once told me that “anyone with a checkbook and a heartbeat” will make a good client. That can make for expensive marketing and painful customers.


“A few years ago, I assessed my best and worst client experiences to create my own Grand Slam Clients filter. As a result, now I have seven key points I look for in a good prospect.

In our first conversation I can ask some easy questions that identify if we are a fit.”


Hitting doubles — timing triggers

To drastically improve your own batting average, understand your clients’ timing triggers. Simply put, what is different today than yesterday that led to your client answering the phone, clicking the “BUY NOW” button on your website or signing off on the contract that had been sitting on their desk for the past three months?

The challenge here is that we all make rational decisions for emotional reasons. We hear “it was an annual review” or “they did an exhaustive interview process” or “they went with the low bidder.” In reality it often comes down to an emotional trigger “I didn’t want to work another weekend to fix mistakes from my vendor” or “he’s the dad of my daughter’s best friend.”

Hitting triples — psychographics

If you want laser-sharp focus on your best clients, get to know their psychographics. The master marketer Seth Godin framed it this way: “people like us do things like this.” What are common beliefs your clients hold? “I’m terrible with being on time” or “punctuality is a hallmark of success.” “Tesla’s are a gigantic waste of money” versus “Tesla’s will help save the planet.” How do your best customers think, behave and feel?

Pulling it all together

For me, the best way to get those details out is through storytelling. Creating the stories requires someone to lead the discussions who can be an active listener and who can ask good questions, but who won’t finish your story for you. Start with the stories about your best clients. The ones that love you, challenge you and pay you well (and on time). What makes them special? What makes them work with you versus your competitor down the street? Was it a large sale? Were you doing your best work? Get all the stories down that describe your greatest successes. In other words, what makes for a great victory lap?

Now you need to switch gears and talk about your worst client experiences. The ones who cost you money. The ones who logged numerous hours with your customer service team. The ones who complained about every bill. We look past these stories because they don’t paint a very flattering picture, but they are key building blocks to your process. Document these so you are not forced to repeat them.

Once you have exhausted all the stories, step back and start to look for common themes. What do all your successes share? What are the key points that separate you from your competition?

Grand slam clients

A few years ago, I assessed my best and worst client experiences to create my own Grand Slam Clients filter. As a result, now I have seven key points I look for in a good prospect. In our first conversation I can ask some easy questions that identify if we are a fit. Their answers help me determine if they could be a Grand Slam Client where I can add value to their business and help them get where they want to go. I even added a scoring rubric for each question to make it easier to know “what good looks like.” Score 25 or higher on the 35-point scale and we will do great things together. Score 24 or lower and I will make a good referral to someone who will be a better fit.

Making it work for you (Workshops — call to action)

Are you ready to take action? There’s no time better than now to grow and improve your customer mix. Don’t do this exercise in a vacuum. Over time it’s been proven that the best results come from bringing your team together to build your own Grand Slam Clients filter in a workshop. People who contribute to the process and the solution are 10 times more committed to using it and seeing it through to success.

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Catching up http://www.syncrotex.cn/primer/catching-up-8 http://www.syncrotex.cn/primer/catching-up-8#respond Mon, 27 Jan 2020 22:07:42 +0000 http://www.syncrotex.cn/?p=14988 When Landmark Creations, owned by the husband and wife tandem of Tom and Stephanie Meacham, appeared in Upsize in 2004, it had 12 employees, a little over $1 million in revenue and it produced fun, large inflatables for many businesses, sports teams and the occasional musical tour. Though computer-aided design (CAD) and 3D were starting […]

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When Landmark Creations, owned by the husband and wife tandem of Tom and Stephanie Meacham, appeared in Upsize in 2004, it had 12 employees, a little over $1 million in revenue and it produced fun, large inflatables for many businesses, sports teams and the occasional musical tour.

Though computer-aided design (CAD) and 3D were starting to take off, the bulk of the products were pretty basic.

“They would inflate and that’s it,” Stephanie says. “They were just statically there.”

That’s changed dramatically, say the Meachams, who talked with Upsize a few days before Tom was getting ready to head to Los Angeles to put up a project for the Grammy Awards.

“One of the things that has changed since 2004 is we have done a lot of stage productions, we’ve done a lot of work with A-list artists, and music awards shows,” she says. “The demand from our customers over time has really ramped up over the last five years. What our products do rather than just being giant static displays is they have to be interactive. They have to be able to perform on stage.”

That could mean having fabricated parts or internal lighting systems. It might mean they need to quickly inflate or deflate so they can appear to magically show up on a set or interact with other mechanical components of a display.

“Back then, we basically did everything by hand,” Tom says. “We’d do a clay model, we’d paint by hand, we’d sew by hand. Today, the transition of the digital influence is we’ve replaced doing clay models with 3D models. The painting is all digitally printed.”

Its work with top celebrity performers has put Landmark inflatables on the Country Music Association Awards, MTV Video Music Awards, and other high-profile shows. The Grammy’s project is for a performance by Ariana Grande, whose tour has also featured a different inflatable.

Landmark still does a lot of its more static, bread-and-butter inflatables, too. The sales split is about half-and-half throughout any given year, Stephanie says.

But the newer, more complex makeup of its larger-scale work has required a shift in the couple’s management structure and style. The more complex projects mean Tom is often required to be on site to help users learn to operate the inflatables. Recently, Stephanie took over day-to-day management of the company’s Burnsville offices, which freed Tom up to be more available for those trips.


What our products do rather than just being giant static displays is they have to be interactive. They have to be able to perform on stage.”


The company, which has tripled its revenue since 2004 and now has 23 employees, has also started providing more opportunities for growth to those workers, many of whom have been around a long time and understand the market.

“It’s a balance,” she says. “You have to let go a little bit. You have to let your employees grow.”

One thing that has lessened over the years is the need to pound the pavement to attract sales. Tom and Stephanie say between repeat business, word-of-mouth referrals and online leads, the company stays more than busy. They think that’s due, at least in part, to providing great service and making sure they help find something that really makes sense for customers.

“We never try to sell somebody something that doesn’t make sense,” Stephanie says. “The industry is so small, the minute we burn somebody, there’s going to be trouble for us.”

There have been opportunities to grow more quickly at times, but the Meachams remain as committed as they were in 2004, to making sure they control the business rather than being controlled by it. That means occasionally saying no when time and resources don’t allow them to do a job up to standard.

“A little bit of you dies inside when you have to do that, but it’s still a matter of we only have so many resources,” says Tom, adding that he’d rather not take on a project than not be able to do it well. “We just keep staying on that razor’s edge as far as we stay busy without being manic and trying to outrun our headlights.”

The Meachams didn’t have any experience in the industry when they bought the company in 1993, but he had a mechanical background and they inherited experienced employees. Stephanie says one lesson learned over the years is making sure when you increase your staff count, you do so carefully.

“The people you choose make a big difference,” says Stephanie. “Be very picky about the people you hire and don’t be afraid to develop them early on. If we had started that earlier it would have been even better for us. We have been successful but maybe we wouldn’t have had to work quite as hard as we have for the last 15 years if we had started this trajectory a little earlier.”

Building long-term relationships with customers and making sure you meet or outperform your promises to them is also key.

“Listen to your customer and understand what value you are bringing to them,” adds Tom. “It’s not magic. It’s a relationship. And we’re not in this for the one-time sale, we’re in it for the long-term. They’re a customer just like you are a customer to somebody else.”

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Back page http://www.syncrotex.cn/back-page/back-page-10 http://www.syncrotex.cn/back-page/back-page-10#respond Mon, 27 Jan 2020 22:06:48 +0000 http://www.syncrotex.cn/?p=14992 True North Advisors will soon be one of a dozen or more entities swept up by newly formed, Minneapolis-based Business Broker Investment Corp. (BBIC). But in the meantime, small- and medium-sized business owners across the country will have greater access to a technology platform aimed at helping them prepare to sell their business due to […]

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True North Advisors will soon be one of a dozen or more entities swept up by newly formed, Minneapolis-based Business Broker Investment Corp. (BBIC). But in the meantime, small- and medium-sized business owners across the country will have greater access to a technology platform aimed at helping them prepare to sell their business due to a recent True North acquisition.

The company has agreed to acquire Peak Development, a technology platform for marketing business brokerages and advisers.

Brian Slipka, who is managing partner of True North and will be president and CEO of BBIC, shared his thoughts on the importance of this transaction with Upsize Managing Editor Andrew Tellijohn.

Tellijohn: Could you explain the entities involved in this deal?

Slipka: The BBIC is a separate entity I created with another individual where we are trying to defragment and aggregate the best business brokerage offices in the nation and Canada. The BBIC will be a coalition of at least 12 or 13 offices around the country that have sold their business into the BBIC in exchange for stock.

True North Advisors is the parent of Sunbelt Business Brokers and it now has Peak under its umbrella. It’s the platform business that will run the BBIC. What I’m trying to do is bring together the best platform businesses, which facilitate transactions between two or more parties, under True North Advisors so when it joins the BBIC we have an off-and-running enterprise that can quickly bring on other businesses around North America.

Tellijohn: Why was acquiring Peak important?

Slipka: Peak Development, a free-of-charge omnichannel tech platform, works with buyers and sellers to provide counsel to them to bring them to the point where they are ready to bring their business to market. It is more of a relationship-based checklist. It’s what small business owners need. Instead of writing big checks to have a consultant come ready their business for sale, often they just need someone like Peak to tell them the steps to take to get your business ready.

I’m excited about being able to leverage their expertise and reach with small business owners so when they are ready to sell, or if they are a strategic acquirer, we have the right advisers at that point to come along and help them. We’re trying to standardize the industry. There are a lot of business advisers and consultants and expensive resources out there. What business owners need is someone willing to go at their pace, low-touch and high-impact.

Tellijohn: What’s the timeframe for this BBIC transition?

Slipka: We’ve already got 12 offices that have signed legal agreements to contribute their business into the BBIC. They’re saying we’re better together than trying to do this individually across North America. I’m throwing resources into helping them. The acquisitions will be finalized in the second and third quarters of this year, but we are allowing them to engage in our best practices now. The Peak transaction was important to do now so those employees could start focusing on the markets where we are going to be invested.

Contact: Brian Slipka, managing partner of True North Advisors and CEO of Business Broker Investment Corp.: 612.454.6221;
brian@bbicnow.com; www.bbicnow.com.

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Selling your business http://www.syncrotex.cn/workshop/selling-your-business http://www.syncrotex.cn/workshop/selling-your-business#respond Tue, 17 Dec 2019 18:31:47 +0000 http://www.syncrotex.cn/?p=14928 Preparing a business for sale, putting together a team of advisers figuring out what kind of buyer and legacy a seller wants and not getting overly emotional as negotiations play out are all healthy pieces of advice for entrepreneurs who are looking to transition from their companies. One oft-overlooked factor in the sales process is […]

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Preparing a business for sale, putting together a team of advisers figuring out what kind of buyer and legacy a seller wants and not getting overly emotional as negotiations play out are all healthy pieces of advice for entrepreneurs who are looking to transition from their companies.

One oft-overlooked factor in the sales process is making sure the seller and his or her family have prepared for the transition and know what it’s going to look like.

Richard Brown, chairman and CEO of JNBA Financial Advisors, says he’s seen family members break down in tears over how they think the change will disrupt their well-mapped life routines.

“So, there’s the financial aspect of it, the planning aspect of it, and then, truly, what does it mean for you and your family and how are you going to go on to the next stage,” he says.

JNBA can help walk its clients through the basics of making a sale, but staff also spends time monitoring their emotional state, as well. Jerry Clark, founder and managing officer of SealedBid Marketing, agrees on the importance of monitoring a seller’s state of mind. During a late October panel discussion, he talked of taking the time to plan ahead so the newly freed business owner has a path forward.

“The emotional aspect is huge,” he says. “I just got off the phone with one of our clients this morning and he said ‘I took last week off, my wife and I, to figure out what we’re going to do for the rest of our lives.’”

Selling a company is hard. It’s a long, often tedious process. There are a lot of details to work through. But it’s often the one chance a business owner has to maximize his or her life’s work. Doing it correctly in a way that will provide the greatest value was the topic of the panel at the Minneapolis Club jointly sponsored by Upsize magazine and Rick Brimacomb’s Club Entrepreneur.

Preparing for the sale

One thing an owner can do to make the sales process go more smoothly is spend some time “professionalizing” the business, says Todd Eberhardt, founder and CEO of Dynasty Leadership Consulting. Get the books in order. Map out any systems that allow the company to function well. Show a potential buyer why they should be interested in your business above another.

“If you are in your last three years and you are getting ready for a transition there are absolutely some things you could and should be doing to get the maximum value out of your business,” he says.

Another key is understanding the buyer universe and knowing what a potential sale might look like, Clark says. Are you concerned about continuing your company as it is today? Will it move forward with your existing management team or possibly be merged into another entity? Selling to an individual or group of current employees will create a different future than selling to a strategic acquirer looking to merge your firm into one of its existing business units.

“It may not act as it’s being operated today,” Clark says. “Those are some of the aspects we look at.”

That plays a role in vetting potential prospects. “That’s the whole key, to understand what your client wants,” Clark says. “At the end of the day it’s all about the collaboration with the deal team and getting the transaction done in the best method for what your seller truly wants to finalize at the end of the day.”

Building the right team

It’s likely that a business owner’s expertise does not include selling businesses. So, said owner should spend some time putting together the right team of advisers and engaging them early in the process, panelists say. Some sellers, Eberhardt says, do try to go it alone. “They also will get their wisdom and advice from the same place they watch cat videos,” he quipped.

Eberhardt has been involved in starting five companies. When preparing to sell one, he and his partners told each other they’d be happy if 12 companies showed interest. Instead, they received more than 200 letters of interest.

“Had we not had talented people around us we would have been swamped,” he says. “We probably would have missed out on the one that ended up becoming the best fit for us. So, when I spend my time coaching and getting these people ready, it’s getting them prepared for what’s to come.”

Larry Fox, attorney, shareholder and co-founder of Avisen Legal, says his firm often gets called in at the last minute when companies receive an unsolicited sale offer. That can work, but it’s not ideal. Better, he says, is three years or more ahead of a planned sale.

“My advice would be, if you are thinking of selling your company, to engage counsel as early on in the process as possible,” Fox says. “Start early engaging your advisers. Start early thinking about a sale. Because you can maximize your value by early planning.”

A law firm with M&A experience can get involved in negotiating agreements in tandem with business brokers and investment bankers, preparing letters of intent that start to “put stakes in the ground in terms of deal terms,” and just reading the fine details of term sheets. They also help with due diligence so company officials can continue working in the business in case a deal falls through and, ultimately, negotiate the end document.

“We understand what’s market in terms of a deal,” he says. “We can get you the best deal. I would say engage us early. Help us fix the cracks in your foundation. Get the company looking really good for sale.”

The same goes for a banker, says Ben Hangge, vice president of commercial banking with Highland Bank. A bank’s due diligence process will include poring over three years of historical financials looking for trends in revenues, margins, expenses and profitability. The bank will look at a breakdown in revenue by customer.

“So, as a seller, I would recommend having a good explanation for any negative trends or customer concentrations,” Hangge says.

Bankers will also complete due diligence on individual buyers’ ability to make down payments, help with appraisals if there is real estate involved in a deal and assess records related to what are business expenses versus what are personal.

Typical deals, Hangge adds, are finished through conventional bank financing if the buyer is stronger, or through U.S. Small Business Administration lending, if the buyer wants a minimized down payment or a longer amortization period.

Maximizing a sale

So, what’s the best way to maximize the return in a sale? Especially if the owner wants to step away right away or after a short transition period, that person needs to begin delegating. It’d be a turnoff to a buyer to see too much being handled by someone who’s not going to be around long. This could mean handing off sales to someone else or loosening rules requiring purchases over a certain amount cross your desk. Let your management team handle those situations.

“One of the easiest rules of thumb I look for is, if I have someone else in my business who can do [a task] at 80 percent as good as me, I should be passing that off, so long as they are interested and excited in taking care of that,” Eberhardt says. “Let them grow into that because guaranteed there are bigger problems ahead.”

Clark agrees. Management depth is one of the biggest factors an acquiring company looks for in a target. “Even if it’s a small company you still have to get that owner out of the day to day fray. He or she needs to back off.”

Furthermore, lock up those top employees and managers with viable non-compete or non-solicitation agreements. Not doing so can scuttle a deal at the last minute, Clark adds.

Ultimately, it comes down to getting the company as ready as possible for a sale, Hangge says.

“The biggest thing is trying to decrease as much risk in your business as possible,” he says. “That’s everything from reducing the nonessential expenses you run through the business, reducing your customer and industry concentrations, also ensuring you have a strong management team as well as strong systems in place.”

Blind spots?

So, what makes a deal go bad? Often times, sellers have an unrealistic expectation of what their company is worth. It’s understandable, panelists say, because it often represents a life’s work. But for a sale to take place, sellers have to be based in reality. You must, Hangge says, “Balance your personal expectation of what your company is worth versus market realities.”

Failure to do due diligence will reveal blind spots in a deal, says Brown, who adds that a lot of those can be uncovered by bringing the right team into play.

And, finally, keep in mind the role family and emotions will play in doing a deal.

“Sometimes they are super supportive and incredibly helpful and sometimes it makes people take a hard-left turn that nobody saw coming,” Eberhardt says. “Never underestimate the toll the 11th-hour will take on the seller. For all the numbers you are going to discuss, you are still going to lay in bed at night talking to yourself about ‘am I doing the right thing for myself, for my people? Is this the right time?’”

Every deal, he adds, dies three times before being completed. “You have to keep working through it.”

CONTACT THE EXPERTS

Richard S. Brown, chairman and CEO JNBA Financial Advisors: 952.844.0995; richard.brown@jnba.com;
www.jnba.com.

Jerry Clark, founder and managing officer of SealedBid Marketing Inc.: 952.893.0232; jclark@sealedbid.com;
www.sealedbid.com.

Todd Eberhardt, founder and CEO Dynasty Leadership Consulting: 612.845.2076;
todd@dynastylc.com; www.dynastylc.com.

Larry Fox, attorney, shareholder and co-founder of Avisen Legal: 612.723.1366; lfox@avisenlegal.com;
www.avisenlegal.com.

Ben Hangge, vice president of commercial banking, Highland Bank: 952.858.4741; ben.hangge@highland.bank; www.highland.bank.com

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Management http://www.syncrotex.cn/business-builders/business-traveler-mindset http://www.syncrotex.cn/business-builders/business-traveler-mindset#respond Sun, 08 Dec 2019 05:11:31 +0000 http://www.syncrotex.cn/?p=14819 In today’s corporate travel environment, travelers are making decisions based upon convenience, relevance, points and status, and several other factors that go beyond company cost savings. With the total travel industry spend reaching more than $1 trillion dollars there are a lot of marketing tactics to get travelers to purchase from third-party/leisure-based websites. This spills […]

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In today’s corporate travel environment, travelers are making decisions based upon convenience, relevance, points and status, and several other factors that go beyond company cost savings.

With the total travel industry spend reaching more than $1 trillion dollars there are a lot of marketing tactics to get travelers to purchase from third-party/leisure-based websites.

This spills into the corporate world by using tactics that make the traveler think they are finding the best price or getting a discount that has to be booked through a specific link.

Think of buying business travel like you would an insurance plan or accounting software; would you let each employee develop their own process and purchase separate software?

Many small business owners don’t want to pay for a travel program because they think that it is too costly or may not fully understand what it involves. Some think the program is going to take months of training and implantation calls to launch. What business owners often forget about is the culture that it is supporting by giving their employees the tools necessary to make informed decisions about procuring business travel.

What it means when a company does not have a defined corporate travel program:

  • The employee has the ability to book travel on any website or however they see fit. They may have static guidelines that are written on a travel policy somewhere.
  • The employee is responsible for either getting reimbursed for the trip or has been given a company credit card to pay for expenses as needed.
  • Employees are responsible for finding the best price, which translates to them shopping multiple sites, including direct and third-party consumer-based websites.

What it means to have a managed travel program:

  • The employee is given an online booking platform that the company has implemented and they can either book through the corporate travel tool or contact the company’s appointed travel agency.
  • The company can have a set of parameters that, if necessary, can be flexible and potentially adjusted based on the restriction levels provided within its culture.
  • The company’s travel policy is embedded into the booking platform which provides dynamic guidelines for the traveler.
  • The company has access to travel data which means they can show specific vendor spend to help in negotiating discounts. The discounts are then rolled out company-wide, even without knowing the employee may chose a company discounted rate.

Starting a travel program

Now some say that you shouldn’t start a managed travel program until you hit a certain spend or have so many employees. This isn’t always the case. Within the industry, many of the travel management companies are able to provide discounted rates they provide to all of their clients. So, while a business may not have enough spend to get their own negotiated discount, they can still have access to corporate rates by using a corporate booking tool.

So instead of relying on your employees to have the mindset of a business owner, consider starting with an online booking platform to help guide them to book travel within company policy.

There are a couple options on the market for buying business travel.

The most widely known travel and expense management tool on the market is SAP Concur. They have products available for small businesses all the way up to large enterprises. Deem Travel is one that has been around for a long time, and it has rebranded to focus on the traveler experience. Both of these tools offer something different and unique to the travel industry.

The benefits hit the bottom line

Companies that have a clear travel policy and the guidelines in place to manage corporate travel find savings, cost-reductions, and corporate discounts. There are vendors in the travel industry that will only provide upfront discounts to companies using an online booking tool.

Corporate Savings Estimates (based on internal research of the firm’s own clients):

  • Airline spend – 7%
  • Hotel spend – 12%
  • Car rental spend – 5%

These savings are found a couple ways.

The most widely disputed estimates say that you can actually find between 20% and 30% savings from buying behavior alone. By having travelers login to a site that is monitored by the company, they will trend toward picking cost-conscious options. These online platforms source content directly from vendors and then corporate discounts and rewards are stacked on top to help drive down spend. After you have the ability to track the data, the next step is evaluating the cost to visit Client A and the revenue generated from that client.

Understanding the traveler mindset

Whether your company has 10 employees that travel or a couple thousand, travelers have one thing in common: they need to source air, car, and hotel. Why not use a tool that can help bridge the gap between traveler satisfaction and corporate responsibility? That way you can track the data and make informed decisions that make sense for your business.

 

Andy Chaussee does business development for Professional Travel Service: 763.577.2307; andy@professionaltravelservice.com; www.professionaltravelservice.com.

The post Management appeared first on Upsize Magazine.

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