Upsize Growth Challenge: Finish line

Founder taps advisers, sets concrete steps to smooth transitionBy Elizabeth MartinInspired by his first workshop with the Upsize Growth Challenge experts in March, Doug Adamek, CEO of Midwest EAP Solutions in St. Cloud, took his banker and his attorney to a two-hour lunch.

The trio discussed the company’s current state and Adamek’s succession plan, something they had never done before. They complimented Midwest’s achievement of debt-free status (something new since the first workshop) and provided him with additional resources for his succession planning.

“I have a pretty good estate plan in place, but it’s more of a disaster plan,” admits Adamek. Midwest EAP Solutions provides confidential employee support services to the employees of its client companies.

Midwest’s executive team, including Mitch Best, newly promoted to vice president, and Wanda Piepgras, director of marketing and operations, say that succession planning has been an emotional undertaking for the group.

But Adamek continued to pursue the formalization of a plan, and planned to meet with a consultant who specializes in succession planning.

“I am delighted that you’re meeting with a succession planner,” says Michele Vaillancourt, an attorney with Winthrop & Weinstine in Minneapolis and the Upsize Growth Challenge legal expert. “It sounds like you have an estate plan, but not a succession plan, and you need to mesh the two.”

Documenting the plan
Midwest has taken several concrete steps to document the succession plan, Adamek reports at the second workshop, in May. Since the first meeting, the company has developed job descriptions for the executive team and promoted Mitch Best to vice president of the company.

Under the plan, a president position will be created once the company’s revenue reaches $4 million.

Midwest’s current transition plan is based on revenue milestones, but Rick Wall urges the company to use timeframes as well.

“The revenue targets are a good idea, but I think you need dates as well,” says Wall, CEO of St. Paul-based Highland Bank and the Upsize Growth Challenge finance expert. “Time marches on. Everybody gets older,” whether you meet those revenue goals or not.

Although Adamek never intends to fully remove himself from the business, he does eventually plan to step back from the day-to-day operations. Wall and Duane Thompson, a tax accountant with EideBailly in Bloomington, urge him to begin the transition sooner rather than later.

“As your business grows, that transition cost gets higher,” says Wall, noting that the tax implications of the transition can be spread out over several years with proper planning.

Vertical markets
Midwest also realized since the first Upsize Growth Challenge workshop that nearly 33 percent of their clients are in the health-care field. Based on this, the company has developed a stress-management program specifically for physicians. In addition, they have developed an intervention team to deal with physician burnout.

There are few resources to assist physicians with stress and burnout issues, says Adamek. However, a physician’s negative behavior can have far-reaching consequences within a health-care organization for patients, nurses and fellow doctors. Physician assistance would make a great subject for a national Webcast, suggests Elin Raymond, president of The Sage Group in Minneapolis and the Upsize Growth Challenge marketing expert.

“Take this and run with it and make it your product,” she encourages. Talk also returned to Midwest’s Web site and using it to promote the company.

“What I’d like to see more on your Web site is articles that are outside of your geographic area,” Raymond says, noting that national articles would help the company appear larger.

Midwest is redesigning its Web presence and brought mockups for the panelists to review. The new site attempts to provide entry points for the various types of visitors, including Midwest’s partners and members. It also includes a log in feature so the company can begin capturing visitor information for its marketing efforts.

Raymond also encourages Midwest to request reciprocal links on their partners’ sites and to investigate search engine optimization on sites such as Google, Yahoo and Ask.Who’s calling, please?

Midwest also found a new telecommunications vendor since the first Upsize Growth Challenge meeting and tried its first Webinar for its staff, which is spread throughout Minnesota.

Adamek is concerned that his staff feels isolated, and wanted to use the Webinar as a way to help the team feel more connected to one another. He wondered if videoconferencing might be another option.

Neither Mary Korthour, Eschelon Telecom, nor Craig Vosper, Clientek, felt that videoconferencing was the right technology for those purposes. Korthour points out that Eschelon has employees scattered throughout eight states and doesn’t use videoconferencing for internal communication. The two serve as the Upsize Growth Challenge technology and telecommunications experts.

Midwest recently selected a vendor for all its telecom needs, including voice-over-IP and teleconferencing, as well as including all its employees throughout the state on a single phone system. In fact, the company made the deal with one of its own clients that initially had bid higher than its competitors.

This client also had a relatively loose contract with Midwest for three years, which put Midwest in a position to negotiate. After further discussion, the client lowered its bid and agreed to a firmer contract with Midwest.

Piepgras also wondered whether Midwest should use an internal or external Webcasting system, as it prepared to provide more of its content in this medium.

Clientek’s Vosper noted that having a single point of contact and an integrated Web and phone system will be worth the money.

Eschelon’s Korthour asks if their network vendor had provided them with a service level agreement, indicating how much “up time” they could expect.

“Think about what would happen to your business if your network went down. You’d be incapacitated,” she says. “What’s the backup plan and what type of compensation are they willing to give you if the network goes down?”

Doug Adamek, Midwest EAP Solutions: 320.253.1909; do**@********ap.com; www.midwesteap.comMitch Best, Midwest EAP Solutions: 612.285.1155; mi******@********ap.com; www.midwesteap.comWanda Piepgras, Midwest EAP Solutions: 320.656.9037 ext. 104; wa***@********ap.com; www.midwesteap.com

LINE DRIVE SPORTS

Financials completedand creditors called, owner can look ahead

By Sarah BrouillardAt the first Upsize Growth Challenge workshop in March, experts advised Line Drive Sports owner Tom Imdieke, first and foremost, to organize his financial statements.He did that, reporting to the second workshop, in May, with complete statements. And seeing his company’s fiscal picture in black and white — and red — helped him make some important decisions, he says.

Imdieke and his wife, JoAnn, paid off three of their five highest interest-rate credit cards, and asked most of his individual creditors — many who are friends and family members — for a temporary reprieve.

“Rather than sit there in my little world, wondering where am I going to get the cash from to pay these people, I just called them upfront and said I don’t have it right now,” he says. “I’m not saying I won’t try continuing to work on it and get it for you. But this Friday, I won’t have $30,000 for you; I won’t have $10,000 for you.”

Their reaction — “Get back to us when you can,” says Imdieke — has freed him from some of his immediate cash-flow concerns so he can turn his mind toward improving his business.

He’s continued to mitigate the seasonality of his batting cage and sports-instruction company, in Lino Lakes. By installing a weight room and contracting with a football trainer, he’s opened up his facility to a whole new audience. And the recent closing of Fridley-based Columbia Arena — home to several nearby high school and college hockey teams — gives Imdieke an opportunity to market his half-sheet of ice, he says.

Since Imdieke doesn’t have the cash to carry the inventory he’d like on his own, he’s partnered up with two other metro-area sports-equipment and -apparel companies. He purchases items from them at their cost plus between 10 percent and 15 percent.

Though still “chasing cash,” as he says, Imdieke hasn’t been chasing customers: Traffic this spring was up 25 percent to 30 percent at the training school, probably due to word of mouth and an out-of-business competitor.

Up-to-date statements
Imdieke “has a good foundation started by having statements brought up to date,” says Duane Thompson, senior tax adviser and CPA with Bloomington-based EideBailly, and the Upsize Growth Challenge accounting and operations expert.

The next step, he says, is to build some financial forecasts. He suggests Imdieke play with two or three different scenarios, to help manage cash and pinpoint expenses. “You start to see the trends fairly quickly,” says Thompson.

Rick Wall, CEO of Highland Bank in St. Paul and the Upsize Growth Challenge finance expert, suggests “balling up” his creditors, and handing them off as a group to a professional finance company or a bank — “somebody’s who’s paid to figure out how to repay them,” he says.

His creditors could also be brought together to brainstorm ideas on how to drive revenue. “They’re stakeholders in the business,” he says. “They have as much of an interest in you succeeding because they’re investors.”

Besides, transparency about the business builds good relations, and heads off potential misunderstandings down the road. “If you let the sunshine in and you’re open, that opportunity is a lot less for them to get upset.”

A second company?
Launching a second company, majority-owned by JoAnn, is another alternative the Imdiekes have considered for handling their large debts. Woman-owned companies can get special government-backed loans, and using JoAnn’s good credit means the couple would start with a clean slate, financially speaking, they say. Then, “I can try working my way out of the mess I’m in,” says Tom.

Imdieke has always fancied the business names “Total Athlete” and “Peak Performance,” either of which he’d consider for the potential new company. He believes those names are now available, given that the companies that originally used them no longer exist, he says.

But it’s possible that someone still owns the trademarks, says Michele Vaillancourt, an attorney with Winthrop & Weinstine in Minneapolis, and the Upsize Growth Challenge legal expert. The Imdiekes should check the United States Patent and Trademark Office Web site (www.uspto.gov) to find out. Trademark owners often want an agreement where they’re paid royalties in exchange for use of a name.

Two companies, however, means double the marketing effort, says Elin Raymond, president of The Sage Group in Minneapolis and the Upsize Growth Challenge marketing expert. “It could become a little confusing,” she says. And Imdieke would need two Web sites.

Imdieke says he’s still working on his current Web site, which marketing and technology experts at the first workshop said should be easier to navigate and read, and could be more interactive.

Adding video to his Web site is one solution he’s mulled, says Imdieke. At a recent baseball game between Forest Lake and Mounds View, 16 out of the 18 players on the field were Line Drive students, he says. Playing a snippet of that online would entertain clients, as well as educate potential ones.

Imdieke also wants to add his customers’ training calendar onto the site, so that young clients can check when they or their friends are scheduled to be at the facility. But Kirk Hoaglund, Upsize Growth Challenge technology expert and CEO of Clientek, a Minneapolis-based IT firm, says uploading too much personal information could lead to safety concerns — especially since there are children involved.

It’s important not to use full names on Web sites, for privacy reasons, says Hoaglund. Instead, he suggests the use of a log-in and password-protected mechanism, so that strangers can’t learn about kids’ whereabouts.

Imdieke has also considered adding Web access to the waiting areas where parents and other bystanders hang out. Right now, they’re an untapped, captive audience, says JoAnn Imdieke.

Mary Korthour, senior manager of product marketing at telecommunications provider Eschelon Telecom in Minneapolis, says the only costs would be capital ones, for extra computers and the additional Internet hookups.

Imdieke says he’d prefer the homepage to be a Line Drive Sports customized catalog, so users could order merchandise online.Tom and JoAnn Imdieke, Line Drive Sports: 651.790.7898; tI****@*****st.net; www.linedrivesports.com