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Upsize on Tap: The scoop on M&A

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.

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by Andrew Tellijohn
May 2005

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Tech buyer's guide: Telephone service

Perfect pitch

Sort through telecom offers to identify differences that matter

by Andrew Tellijohn   When Robb Leer was a reporter for KSTP-TV, the station took care of his every telephonic need. But when he set out on his own last year, he was unprepared for the bombardment of telecom offers he was going to receive.

Leer’s needs weren’t complicated. He needed call forwarding, conference calling, faxing and other fairly basic business services.

“It’s very difficult to differentiate, even when they try to break down prices and amenities,” says Leer, owner of Bloomington-based Leer Communication and Consultants, a public relations and marketing firm specializing in communicating with the media. He acknowledges being a tad overwhelmed by the attention. “Perhaps had I done a little more homework myself … I’d almost have somebody lined up before I opened my door.”

At the end of the day, he chose Qwest Communications. “For me the winner was the one that was the least annoying,” Leer says. “You launch a new business and telecommunications companies find you fast. You’ve got enough going on in front of you that I took the path of least resistance.”

He says that choice has served him fine. Still, a year smarter and entering his second year in business, Leer says one of his goals is shopping around a bit to compare some pricing and other amenities.

“I’m in a better position now to reevaluate the services I need,” he says.

While still not claiming to be an expert on telecom, Leer suggests small-business owners do their homework ahead of time and adds that perhaps providers should allow potential customers to try services on a trial basis, “like a buffet,” before making them decide what they want.

Gearing up quickly
Leer isn’t the only business owner who has had problems with a telecom provider. About a year ago, the telephone system at the Muscular Dystrophy Association Inc. (MDA) wasn’t working properly. The provider told the person in charge the problems didn’t exist. But Trendy Stanchfield, regional director, didn’t have time to quibble. She was busy preparing for the fast-approaching annual Jerry Lewis MDA Telethon.

So she called a local provider and told them about her nonprofit’s needs, adding that under no circumstances would she sign a contract unless the firm could illustrate how it would solve the MDA’s problems.

The firm, Minneapolis-based Eschelon Telecom Inc., agreed to meet with her, and had its technicians look over the phone system before they even had a signed deal.

“We’re not communications experts in the office,” Stanchfield says. “We basically were told the problems we were having we weren’t having ‘because our system doesn’t show it.’ It was pretty insulting. Frustrating to say the least. We came out guns a-blazin’. [Eschelon] settled us down.”

The phones at the MDA offices have worked fine ever since. Plus, Eschelon agreed to donate about $20,000 worth of phone hookups, service and other technology for the annual telethon, held locally at the Mall of America.

The lesson is that you can get what you want and need from your telecom provider, Stanchfield adds. Do your homework. Research any complaints filed against the companies you are considering, she says.

“We didn’t sign anything or even give the hopes to anybody until they had shown us the entire package,” Stanchfield adds.

John Phillips, vice president of sales with Eschelon, agrees. A provider of telecom or any other tech services worth its salt should be able to work with its clients to determine their needs and tailor a plan that fits. He advises people to make sure companies have a history in the industry, because many fly-by-night firms are popping up.

Also, when you are discussing your business with potential providers, make sure they are asking questions and trying to understand your business as well.

“Seek out companies — partners — who understand the technologies, but who are focused on understanding your business first,” he says. “It’s the classic ‘there is more than one way to skin a cat.’ ”

Combining service
Finally, there has been a movement in recent years toward using one company for both telecom and Internet service. Eschelon can do that, Phillips says, and so can other providers.

That was one of the strongest reasons Mark Hoffman, president of Hoffman Communications Inc., gave Eschelon a tryout when the company called.

“As a small-business owner, you are really looking to save every penny you can,” he says, adding that when things go wrong and need to be fixed immediately, “It’s nice to make one phone call.”

But since signing on, he’s also been impressed with how Eschelon has altered its service.

The event and video production and creative development firm started with all local clients served by two phones and a fax line. As the company has grown and its clientele moved across the country, Hoffman has needed the capability of sending videos and graphics securely through its Web site.

“We did shop a lot of providers,” Hoffman says. “It came down to price and service.”

Brenda Nemastil, senior manager of market development with St. Louis Park-based telecom and Internet service provider Onvoy Inc., echoed Phillips’ sentiment that a telecom firm should listen first in an effort to tailor a telecom plan for the specific business.

They’ll need to talk about what their business needs are now, but also about what their projections are for the future, she says, so the system eventually will grow the business.

“Focus on asking other people and focusing on your business requirements are the key considerations,” she says. “Selling someone something that is not appropriate and trying to make a fit creates a lot of frustration on both sides.”

Less tech-savvy small business owners that don’t have an IT staff and don’t know what they need often rely on consultants or advisers for assistance. Those firms can likely provide guidance for those seeking telecom services as well, Nemastil says.

Take the latest and greatest trend,Voice-over-Internet Protocol (VoIP). In theory, it reduces your long-distance charges by carrying voice calls over the computer.

“You don’t have all the stuff in choosing a long-distance carrier, because your calls are all local,” she says.

While it’s a fantastic service for a company that needs to link branches in many cities, Nemastil adds that for a one-branch company that doesn’t use a lot of long distance, other options might make more sense.

[contact] Mark Hoffman, Hoffman Communications Inc.: 612.436.3600; ma***@*******************ns.com; www.hoffmancommunications.com. Robb Leer, Leer Communication and Consultants: 952.842.8133; le***************@*cc.net; www.leercommunication.com. Brenda Nemastil, Onvoy Inc.: 952.230.4133; br*************@***oy.com; www.onvoy.com. John Phillips, Eschelon Telecom Inc.: 763.745.8000; ja********@******on.com; www.eschelon.com. Trendy Stanchfield, Muscular Dystrophy Association Inc.: 952.896.6226; ts**********@****sa.org; www.mdausa.org.

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