Jay Sachetti joined Jeff O’Brien, partner at Husch Blackwell and Dyanne Ross-Hanson, president of Exit Planning Strategies talked about the market for mergers and acquisitions, exit planning opportunities for companies that don’t end up for sale and how companies can maximize their eventual sale price during an early October panel at the first Upsize on Tap event at Summit Brewing Co. in St. Paul.
When the state Legislature passed a law requiring employers to provide paid leave and safe time for employees, Justin Bieganek started hearing differing details from friends, colleagues and peers.
illustration by www.victorgad.com Log onto the Web sites of most major telecom providers and you’ll find special pages targeting small businesses.
At Qwest’s site, for example, small-business clients can peruse packaged deals and special offers, purchase equipment online, and subscribe to Qwest’s quarterly small-business newsletter. MCI, too, offers a section for small and medium-sized businesses to pay bills online and check out the latest offerings. Some feature photos of studious workers bent over brightly lit computer screens; others have a sporty theme, depicting people crouched together in a team huddle.
The message of these companies is clear: We’re partners in your telecom needs. But for small businesses, determining what equipment fits them best usually isn’t as easy as a mouse click. Instead of choosing one provider right away, it makes more sense to scope out your options, say local telecom professionals.
“To determine the best equipment for the company’s needs, business owners should get proposals from two or three providers and research their recommendations,” says Al Lampe, president and chief operating officer of Comm-Works Inc., a Plymouth-based provider of enterprise voice and data services. “A growing company should look for a well-established business partner that has experience providing solutions to growing companies.
Look for a provider that can deliver bundled services: long distance, local service, Internet and data services all in one. Small businesses can get reduced rates for these packages, as well as discounts if they sign long-term contracts with providers. Packages also reduce the number of bills, says Mary McFetridge, senior market manager for Onvoy, a St. Louis Park-based telecom provider.
Also, given all the turmoil in the telecom industry, select a stable provider, so “you won’t have to regroup due to a vendor business failure,” says McFetridge.
The best partner is usually the closest in proximity, says Paul Bertino, director of marketing at HickoryTech, a Mankato-based telecom provider. He suggests that small-business owners contact the sales office of their local telephone company. Professionals can then review your technology needs and suggest some solutions.
Don’t get dazzled by the latest and greatest gadgets; they’re usually not in a small business’s best immediate financial interests. Leasing equipment or buying refurbished equipment is the best way to cut costs, says Lampe of Comm-Works.
Leasing opens up your options. When a lease expires, a business has the option of buying the equipment, renewing the lease or upgrading the equipment with a new lease. “Purchasing refurbished equipment can be a great alternative to buying new because it is much more affordable and offers great warranties,” Lampe says.
As a small-business owner, Tom Salonek, CEO of St. Paul-based e-business and e-consulting firm go-e-biz and training firm Intertech, Eagan, echoes Lampe’s advice. The authorized dealer “stands behind the equipment, and you save 10 to 30 percent off of the standard cost,” says Salonek.
“Picking the bones of the dead” — as unpleasant as it sounds — is another way to save on costs. With so many startups going under, says Salonek, there’s plenty of practically brand-new equipment available for quick sale. “Talk directly to the owner to find out what is happening to their phone system,” he says.
Local telephone companies can provide services with the same features but without the large equipment expense, says Bertino. “Many small businesses buy a small telephone system, perhaps not aware that a service from their telephone company can provide similar features without the large equipment expense,” he says.
For example, many local telephone companies in Minnesota provide Centrex, a generic term used by phone companies to describe enhanced business class phone features typically associated with very large office phone systems and digital phones. Business customers can benefit from efficient communications without the cost and operational complexity associated with a Private Branch Exchange (PBX), or internal telephone system.
Conference calling, call transfer and direct dialing between internal telephone stations are some features of Centrex, says Bertino. The only equipment you need is your existing phone.
To really cut costs, a little amount of elbow grease may be required, says Salonek. He suggests owners consider running the wires themselves upon moving into a new space, and then have the telecom provider install the jacks when they wire the system.
Some local telecom providers offer arrangements that allow companies to join together in a shared service plan. “For cell phones, conference calling, and long-distance calling, you can aggregate your demand with other business owners to get a discount,” says Salonek. His companies share phone conferencing services with another firm, then split the fee each month.
Long distance can prove the trickiest service for tracking the best deals. Small-business owners should analyze the calling patterns of a provider to determine the most competitive plan, says Bertino. Many long distance providers have two domestic rates for customers — one is the interstate rate, for calls outside Minnesota, and is typically the lower of the two. This rate is usually the one quoted in advertising, he says. The intrastate rate, for long distance calls inside Minnesota, is usually higher — in some cases twice as much as the interstate rate.
Other billing practices may affect the cost of long distance services, says Bertino. How calls are billed, for instance, can vary from six-second increments to 30-second or full-minute rounding.
Internet options are also becoming more complicated for businesses, says Bertino. “Many businesses are using the Internet primarily for browsing, gathering information and retrieving e-mail,” he says. If that’s the case for your small business, a high download speed is sufficient. “But if a business sends large files, has a mail server for their internal e-mail or hosts their Web site on a local server, a business high-speed connection that provides greater upload speeds will be important to them,” he says.
Small businesses, especially companies with aggressive growth, should re-evaluate their telecom needs each year. They should make sure to upgrade or add equipment that won’t have to be replaced once the newest wares are hatched months or years down the line. “Look for equipment that has a migration path toward future technology,” says Lampe.
Once you’ve made the decision to upgrade, call your current provider and tell them what you need. “They should have been keeping you posted on new services and prices. But if they haven’t, give them the chance to compete,” says McFetridge. But also be sure to examine what competing providers are offering.
“When your term expires for any type of service, stop and compare plans,” says Salonek. “Automatic renewal doesn’t ensure good rates. Competition does.”
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