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.
DEAR INFORMER: How can I get the attention of large-company customers? My calls and e-mails get completely ignored.
DEAR LEFT OUT: Never stalk. Always prepare. Call at 7:30 a.m. and 5:30 p.m. And never say no. That’s the short answer from a business owner who’s managed to get large national retailers as customers.
Greg Gartner, CEO of Gartner Studios in Stillwater, remembers the day he got a meeting with a buyer for Michael’s, the national retailer of craft supplies. Gartner makes specialty paper that customers use to make their own invitations.
He had called for six months, but left messages only a few times — one of his key pieces of advice. “Do not hound them. You do not want to leave message after message,” he says. “Otherwise it gets into desperation.”
Make up a defined list of targets based on quality, not quantity. If you don’t have the person’s direct-dial number, go to the gatekeeper, and keep working to get the info you need. And before that, do a lot of homework.
“Know who you’re calling. Know about their business,” Gartner says. “Know what value you can bring to them.”
He advises spending lots of time getting to know your customer’s needs. For example, if you’re trying to get a retail buyer, go to that person’s store. Hang out for a day or two in that person’s department. Observe what’s selling and what’s not. Then perhaps you can send a letter with some of your products, and mention something specific about what you observed.
Prospects can easily tell a fake. If you just breezed through their store one day, for example, your insights may not impress. It’s much better if you can say, “I noticed your green envelopes were popular, but I have a way to help you sell more.”
While you’re waiting to get through, get everything in order at your company. When the return phone call does come, you have to respond professionally and immediately.
“The line between success and failure is thin,” Gartner says. “You have to watch the details.”
Never hesitate if you do manage to get a meeting or phone conversation with a prospect. “When they’re ready to give you an order, there is no ‘no’ in your vocabulary,” Gartner says. “Move mountains if you have to.”
Gartner says the first order from a large customer, if it’s fulfilled on time and if the products sell through well, then make it easier to attract the next one.
In his case, the Michael’s contract was followed, eventually, by an invitation from Target Corp. Gartner and several other players, all much larger, were asked to bid in a vendor auction with stationery products on four feet of space. Gartner’s company won the contract. “Your product has to sell through. And then they’ll invite you and then you’re a player,” he says.
“Now you have to sustain it for the long haul.”
Greg Gartner, Gartner Studios: 651.351.1177; ******@************os.com“>gg******@************os.com; www.gartnerstudios.com
DEAR GROWING: Struggles with cash flow are so common at fast-growing firms, that Stephanie Laitala-Welch can think of only three current clients without the problem.
“They’re in good company,” she says about this questioner. “Big companies have the problem too. They’re right on the money” to be focusing on cash flow. “I’d call this a stich-in-time question.”
She runs OWLL Financial, a Minneapolis firm that handles all matters financial for client customers. “The biggest key and the hardest part is sales projections,” Laitala-Welch says.
Do an optimistic revenue forecast, a pessimistic forecast, and then the most likely. Chart your sales forecast between pessimistic and the most likely, and you’re less likely to get in a cash crunch.
That’s difficult for business owners, she concedes. “They’re always overshooting by 20 to 100 percent. They’re blue-skying it, and God bless ’em, that’s why they’re doing what they’re doing.” But once a disciplined sales forecast is in place, estimating cash flow becomes a simple matter of plugging in numbers.
The next item to look at is, when do you collect your money, based on your credit terms. “Make sure you have someone invoicing and collecting regularly,” she advises.
“The rest, it’s just controlling expenses. It really is,” Laitala-Welch says.
Pay close attention to inventory, because it can gobble up cash quickly. Be sure you’re not buying up items that will go obsolete.
Also, watch hiring. “There’s a tendency when there’s high growth to hire people to manage that growth, but management people come with management salaries,” she says. “I would rather stretch a manager a little bit more, and have more people actually doing the work.”
Stephanie Laitala-Welch, OWLL Financial: 612.816.6007; *******@***********al.com“>st*******@***********al.com; *******@***********al.com” target=”_blank”>www.owllfinancial.com
DEAR INFORMER: I’ve been operating my business for a few years, and I want outside input. I would like to find a mentor to help me move forward. How do I go about finding one?
DEAR SEEKING: Potential mentors are everywhere, believes Kim Vappie, chief operating officer of Menttium Corp., but before finding one this seeker should define his needs.
“As their business goes through different phases, their needs change,” Vappie says. Her Richfield-based firm matches promising people, mostly women in mid-level executive positions, with mentors, mostly for corporate clients.
In the pre-startup or startup phases, many people need entrepreneurial training, not mentoring. She recommends the Minnesota Small Business Administration and various chambers of commerce as good places to learn the basics.
When the company has been operating for several years and is professionally managed, mentors can work wonders. “In that next stage people really do benefit from mentors, whether with one person or many people,” Vappie says.
She recommends strong networking. If you find people you admire at a business function, ask if they’d serve as a mentor.
Or, she points out several Twin Cities organizations that have formal mentoring programs as part of their membership offerings or for a fee.
Vappie recommends the National Association of Women Business Owners and the Young Entrepreneurs Organization, both of which offer mentoring, presumably for those who are women or young. She also likes TEC, a national organization with local leaders who run peer-to-peer advisory groups.
Whatever path you follow to find a mentor, Vappie recommends a structure that Menttium has tested with hundreds of pairs. “Determine what are his goals and what does he want to learn. The two reasons that mentoring relationships fail is, No. 1, lack of clear expectations, and No. 2, lack of commitment,” Vappie says.
Cover these points with your prospective mentor: What am I committing to Who will set the meetings Who will drive the process Between meetings, how and how often will we communicate?
At Menttium, they recommend a minimum commitment of one year, and about two to three hours a month. Shorter, more frequent meetings work best.
Don’t worry much about personality match, she recommends. “Personality should be one of the priorities that fall later on the list,” Vappie says. Working with someone unlike you may be better, because it “means you’re getting a different perspective.”
Vappie closes with the major predictor of success when a person seeks a mentor: “Being willing to be vulnerable, being open-minded, and being a continuous learner.”
Kim Vappie, Menttium Corp.: 612. 436.4501; ********@******um.com“>ki********@******um.com; www.menttium.com
