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.
www.fyste.com, where anyone can check up on what Murphy’s doing, and she says Murphy updates it often.
Also, he sends her instant messages three to four times a week.
The company’s holiday letter this year was full of pictures of Murphy. And she encourages everyone, customers and employees alike, to cheer him up. “He loves it when people respond” to the blog, she says.
She also finally got serious about a backup plan for herself, something she believes all business owners should do.
“We had to work up a backup plan in case I got hit by a truck,” she says. “I identified an old boss of mine, and we worked out a contingency and backup plan.”
Diann Albers, UpNorth Consulting: 952.224.8656; *****@***************ng.com“>da*****@***************ng.com; www.upnorthconsulting.com
OUTSOURCING
DEAR INFORMER: It seems I get more and more calls from vendors that want me to outsource some of my business functions to other countries. How can I tell if this is a good idea?
DEAR DOMESTIC: The vast majority of companies in Minnesota don’t outsource functions to other countries and don’t plan to in 2006, according to a new Upsize survey that’s detailed elsewhere in this issue.
Just more than 83 percent of 372 total respondents say they do not outsource outside of the United States. 4.8 percent say they will outsource more to other countries in 2006, compared with last year. 2.2 percent say they will outsource less, and 9.4 percent say they’ll outsource about the same.
But the trend toward globalization that has swept large companies is starting to hit small companies hard, says Loren Viere, managing partner of KDV, the accounting and consulting firm with offices in the Twin Cities and St. Cloud.
He says he gets many calls now encouraging him to send his firm’s tax-return preparation to other countries. And that’s entirely new. The year before, he says, he maybe got a couple of calls a year pitching the subject.
“I get a call every week. They’re offering $8 an hour, in India. There’s a whole lot more marketing going on and even when you say no they keep calling you back.”
He says his firm’s clients, including many small companies and many manufacturers and contractors, also say they’re being pitched.
“Our clients in the manufacturing sector are being pushed by their large vendors to outsource,” Viere says. Service companies will feel the heat just as much in the months to come, and they should take a close look at the option to stay competitive. “It’s scary if you find out your competitor can deliver it for 20 percent less,” Viere points out.
The first part of the evaluation is relatively simple, Viere says. Partly because there is so much outsourcing, companies abroad have track records that anyone can check out, just as they can easily do with domestic vendors.
The quality of the work, the security of the systems, the responsiveness of the supplier are all considerations, no different from any decision to send work outside the firm or keep it inside. Some experts recommend answering this question: Is this function a core part of your company’s business or not? If not, consider outsourcing, at home or abroad.
But there is still the political aspect to examine. Viere says he received calls from Minnesota legislators last year, asking him if he was going to outsource tax preparation and hinting that laws might be passed to discourage the trend. Also, he believes many of his customers wouldn’t like it much if they knew their work was going to India.
The point: Because outsourcing abroad is controversial, consider more than the numbers when making your decision.
Loren Viere, KDV; 763.537.3011; ****@*dv.com“>lv****@*dv.com; www.kdv.com.
CUSTOMER RELATIONS
DEAR INFORMER: I heard Brad Cleveland, CEO of Protomold, speak at an Upsize event about how his company tells customers “no” all the time if their requirements don’t fit Protomold’s expertise. How can I educate my customers about my company’s main capabilities?
DEAR TRAINER: Saying no to a customer is too scary for a lot of business owners, which is probably why Brad Cleveland’s comments drew so much attention at the Upsize Business Builder Awards & Seminar last October.
The Informer called Cleveland after the event to get more details on his company’s approach. The first step, he says, is creating your mantra — that is, understanding and articulating what your company does best, and for what kind of customers, and repeating it so often that even you get sick of hearing it.
In Protomold’s case, that was getting injection-molded parts to customers fast, which also means inexpensively. Protomold couldn’t do that if a part’s design was complicated, so they started telling customers how to simplify their designs to fit Protomold’s software. If a simplified design wasn’t possible, they told customers they should go elsewhere.
Your company’s mantra, of course, will be something completely different, but until you know what that something is you can’t take the next steps.
Next, Protomold communicates frequently and in many different ways with customers, to let them know about its capabilities.
Protomold chooses methods to communicate based on the preferences of its customers, in this case engineers. “We want to be the fastest, easiest and coolest way to get injection-molded parts,” he says. “All of our communication keeps that in mind.”
To achieve “cool,” the company responds to customer inquiries with computer-generated redesign suggestions, in 3-D graphics, incorporated into the price quote. Engineers dig that kind of thing.
He purchases ads in many trade magazines read by engineers, and sends thousands of direct mail pieces each year. He also purchases pay-per-click ads on Google, so “Protomold will come to mind easily,” he says.
Cleveland says it’s only been about a year since he began articulating the company’s mantra, and he developed it organically by hearing what Protomold’s customers were saying.
At first it was a big stretch, he says, to change his thinking. “I came out of aerospace, and in aerospace I had eight customers. I knew their wives’ names, their kids’ names. I said, sales is all about a relationship with the customer,” he recalls.
Well, Protomold had hundreds of customers, even when he first joined the company. “We don’t have time for relationships,” one of the top managers told Cleveland.
“Engineers don’t want relationships. They want their parts fast,” he came to realize, and thus was born his mantra. Why not start developing yours now?
Brad Cleveland, The Protomold Co. Inc.: 763.479.3680; **@*******ld.com“>in**@*******ld.com; www.protomold.com
