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.
Focus on results needed, not technology itself, to make wise buys
by Andrew Tellijohn Dr. Daniel Carlson spent a few years looking into buying an existing dental practice or at least becoming a partner. When no opportunities arose, he started planning to open his own.
Birchwood Dental in Eagan is about eight months old and business is going well. That early success, Carlson says, is largely attributable to a heavy — and at times scary — investment in technology when he was starting up the company.
“Take the painful hit,” he says. “You’re going to spend a lot up front, but in the long run it’s going to pay off.”
Carlson wasn’t kidding. Though he’d had conversations with the banker that eventually ended up providing his financing, Carlson ran up more than a quarter million in bills, some of which went toward building out his office condo, but most of which went directly toward dental technology: computers for charting, digital x-ray machines, equipment that allows him to mold and build crowns for teeth on site and other big-ticket items — before his loan was approved.
“It’s pretty cool stuff,” he says of his tech purchases. “It’s been around for 20 years but of course the United States is a little slow in adapting.”
While he had done some research and felt he had a good basic sense for what he was buying, he used his networking skills and relationships from previous jobs to ensure the big money he was spending went for just the right products.
He ultimately chose a neighbor, Mendota Heights-based Patterson Cos., to be his main supplier of dental products because he had worked with them previously and was aware of the company’s solid reputation.
His decision to find a main supplier to build a relationship with has paid off in multiple ways.
Many of his new patients are referrals from people who were impressed by his modernized equipment. Plus, Patterson and its many suppliers often use Birchwood as a testing ground for new equipment they get in stock.
“I just went to them and said here’s the project I am looking at — if you want to be on board, I want you to be on board,” he says. “They’ve been wonderful. They would meet me whenever I needed to be met and call me whenever I called them.”
Farming out
Retailer CBR Inc., which has about 40 stores in about a dozen airports and the Mall of America, took an entirely different approach to solving its technology needs. The company farmed most of them out to somebody else.
For the first three decades of its existence, CBR didn’t ignore technology, but it definitely wasn’t a focus. Founder Carole Howe has a strong reputation among airport operators for dreaming up creative store concepts that tickle the traveling public’s fancy. She calls herself a “creative person,” and while she respects technology, she hasn’t embraced it as fast as some business owners do.
As CBR has expanded, however, she’s come to the realization that a one-person IT staff and a decade-old point-of-sale (POS) system were detrimental to the company’s expansion goals. CBR needed to be more up-to-date.
So she interviewed a number of potential outsourcing firms, eventually hiring Eagan-based Orbit Systems Inc. And she hired Dave Witzig, chief operations officer, to oversee many of the tech initiatives internally.
CBR officials decided outsourcing was the way to go because they wanted to maintain their focus on expanding their retail outlets, says Witzig, whose background includes stops at Best Buy Co. Inc. as well as a couple of Internet retailers.
When complete, the new program will include BlackBerries and a new Intranet for greater communication both at corporate and between stores, a new corporate Web site with separate pages for each store concept, a new point-of-sale system that provides to-the-minute sales figures, and a new back-end accounting system.
“We didn’t want to be an IT expert,” Witzig says. “With the complexity of IT, we wanted to find a solution that would allow us to focus on what we do best — our core competency. We looked around and found Orbit Systems … if something goes wrong, we call them and they fix it.”
Do your homework
Orbit builds IT networks, manages them and, if something goes wrong, fixes the problems. For CBR, Orbit was involved in finding the proper POS system.
Witzig, with Orbit and other partners, has finished or is working toward an upgraded Web site, accounting program, and the addition of BlackBerries for management, which overnight “made us much more efficient in how we can communicate with each other,” Witzig says. “You have to use your entire world of contacts, sit down with people, whether in-house or outsourced, get references, and understand the types of companies they work with.”
There are many ways to successfully and smartly manage technology needs. Whether you outsource or find a trusted provider, sources say the most vital thing entrepreneurs should take to heart is “do your homework.”
CBR was referred to Orbit Systems by another client at a networking event. Orbit Systems gets much of its new business from word-of-mouth, says Steve McFarland, president of the company, which provides IT outsourcing to small and medium-sized companies. Their focus is on clients with 25 to 150 computer users in any one location, a demographic that fits the airport retailer.
McFarland makes his list of customers available for potential new business partners to peruse and call for references, something he recommends companies not be afraid to ask of an IT provider.
“All of our customers are referenceable,” he says.
McFarland also recommends that companies seeking help with their technology be wary of individuals who think technology can be the answer to all problems.
“We also know technology is just a tool for a business owner to use,” he says. “It’s not an end-all solution to every problem.”
Stuart DeVaan, CEO of Minneapolis-based Implex.net Inc., agrees that technology is a tool to help you make more money and run your business more efficiently. He suggests shopping around.
He also adds that it might be more convenient to find one-stop-shops, companies that can fill many aspects of a technological need. “We take it from a holistic approach,” DeVaan says. “We deal with the network infrastructure, the application design, and the marketing of that Web site.”
After investigating a number of choices, checking references, interviewing clients and determining that a potential IT provider is likely going to be around for a while, you still might not have found the right fit.
Bloomington-based Axonom Inc. is a provider of Microsoft customer relationship management (CRM) products to high-technology companies, including Eden Prairie-based Compellent Technologies. The company has a good reputation and is in Microsoft’s “President’s Club.” But Axonom might not be the best fit for your business, says Mike Belongie, vice president of sales.
It’s vital that companies find technology providers that have a knowledge of the industry you are in. “We know high technology,” Belongie says. “That’s why Compellent works with us. We have very specific products to do that.”
Entrepreneurs also should seek IT providers with a vertical array of products so that as upgrades become available they can be installed at minimum costs.
Joe Hines, owner and CEO of Voice & Data Networks Inc., echoes much of what Belongie says. His company works to provide communications systems to businesses with 100 or more employees.
He suggests not getting overly analytical. Early-stage entrepreneurs should figure out the simplest answer for their needs and not let sales people talk them into levels of technology that are unnecessary.
“My advice would be to be very focused on the results you want from the technology, and don’t wade into the technology itself, because it will absolutely consume you,” Hines says. “Spend your time there and then don’t let the vendors drive you through that horrible process of evaluating one technology against another.”
Do you really need it?
Finally, one pertinent question should be asked: “Do I really need this?”
Kerry Goldstrand does all the software buying for St. Paul-based WomenVenture. As a nonprofit on a limited budget, the organization can’t afford to purchase a lot of technology products and the organization often relies on hand-me-downs.
Goldstrand recently saved the nonprofit some money when she overheard a board member discussing a recent technology upgrade. She asked the board member what the company was doing with the old, spare parts and voila: WomenVenture had several new — well, newer — PCs.
“It goes back to networking. When you are starting a biz or sustaining a business, networking seems to be one of the best things for you,” she says. “People are usually very willing to pass that along.”
[contact] Mike Belongie, Axonom Inc.: 952.653.0351; mb*******@****om.com; www.axonom.com. Dr. Daniel Carlson, Birchwood Dental: 651.994.1700; www.birchwooddental.com; bi*************@***st.net. Stuart DeVaan, Implex.net Inc.: 612.339.8255; st****@****ex.net; www.implex.net. Kerry Goldstrand, WomenVenture: 651.251.0729; kg*********@**********re.com; www.womenventure.com. Joe Hines, Voice & Data Networks: 952.946.5353; jh****@*******ta.com; www.voicedata.com. Steve McFarland, Orbit Systems Inc.: 651.767.3322; sj*********@****ts.net; www.orbits.net. Dave Witzig, CBR Inc.: da*********@**************il.com; www.CBRAirportRetail.com
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