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.
When Patrick Caruso started St. Paul-based Premier Fence Inc. in the early 1990s, he didn’t have a business plan. Or a marketing plan. Or a background in sales, accounting, human resources or management. What he did have was a willingness to work hard and on-the-job experience installing fences. At that time, that was all Caruso needed.
But as his business expanded, so did his role. He is now responsible for five full-time employees, five salespeople and six two-person crews. In fact, most of what he does now has nothing to do with installing fences, but everything to do with running the day-to-day operations of a growing business.
“I started my business with a high-school education and a very strong work ethic,” says Caruso. “That, along with a basic knowledge about my trade, was all I needed. But what I did 10 years ago compared to what I do now would call for two completely different job descriptions.”
Back then, Caruso never worried about hiring personnel, understanding finances and accounting, or complying with government law and tax regulations. He didn’t worry about marketing the business, or installing the latest industry-related software programs.
Caruso is now well-versed in all of those subjects, and actually looks forward to learning more.
Caruso took the Beyond Startup series of classes at the John M. Morrison Center for Entrepreneurship at the University of St. Thomas. This program is part of a number of growing entrepreneurial centers in the Minnesota. In Caruso’s case, the Beyond Startup program was a series of 10 classes designed to help the transition to successful growth.
The College of St. Catherine’s in St. Paul has opened the International Institute for Women Entrepreneurs. Metropolitan State has implemented a Center for Women Entrepreneurs. St. Cloud State has established the Anderson Entrepreneurial Center. Meanwhile, Dakota County Technical College has added a business entrepreneurship program to its offerings.
“A lot of business owners come back to revisit business plans, or they are coming into a period of growth or think they want to grow,” says Laura J. Price, associate director of the John M. Morrison Center. “There is often confusion between growing a business and wanting to be profitable. Growing a business doesn’t always mean you need to hire more people or add new systems. Sometimes people need to manage systems better, and we want to help them find out what solutions are right for their business.”
St. Thomas offers a number of programs for entrepreneurs. Fast Trac I helps potential entrepreneurs develop feasibility plan. Fast Trac II is for growing businesses, and Beyond Startup is for established businesses wanting to grow.
Caruso, who was expected to complete Beyond Startup before spring, attended classes with business owners of companies with annual revenue between $2 million and $10 million. Although the backgrounds differed — in the class were owners from the insurance, restaurant, retail, plumbing, manufacturing and health records industries — the goal of each was the same.
“They come to class to revisit business plans, to network with other business owners who are encountering similar problems, and to learn ways to improve the present and future of their business,” says Price.
Constant learning mode
The prospect of improvement excites business owners like Kari Lee, pesident of Kari Lee’s Country Mix Co. Inc. Lee and her husband, Tom Beutell, run the St. Louis Park-based company, which employs 24 workers during its peak season and is expecting revenue of $1.75 million in 2003.
Like Caruso, Lee never graduated from college. She spent two years at St. Cloud State University and the University of Minnesota, but says she learned more studying and reading business books on her own time. Now that she has some experience as a business owner, she says she would consider attending classes at a local entrepreneurial center.
“When I was going to school I felt the classes I needed to run a successful business were not available,” says Lee. “But I am a big believer in continuing education, and interacting with other business owners sounds like a win-win situation. I am definitely going to look into how it could help my business.”
Beutell has a degree in mechanical engineering and a degree in economics from the University of Minnesota. He too would like to add more business skills, and has tried learning through seminars or one-day classes, only to come away disappointed at information regurgitated from a pamphlet, brochure or overhead projector. He says he is open to the idea of learning with other business owners.
“We are always in a constant learning mode with our business,” says Beutell. “Right now I am outgrowing my financial background and need more training. As our business grows, so will the need to expand my skill set.”
Jeanne Bailey, director of International Institute of Women Entrepreneurs at St. Kate’s, says the goal of the center is to focus on the growth of women-owned businesses using education, research, and service to maximize potential for growth and success. The institute, in partnership with experienced women entrepreneurs, will provide programs and mentors, ongoing small group meetings, referral networks, and more.
“One thing I think business owners need to focus on is becoming better consumers,” says Bailey. “Say a business owner takes a class in accounting. That person might not become the person who does the books at their company, but it might help them ask better questions when searching for an accountant to do their books. By becoming a better consumer, be it working with a banker, a lawyer or accountant, business owners can be better prepared to ask questions. And by working closely in a classroom setting with other business owners, it is a great way of networking and forming relationships.”
Bailey also says it’s important to discuss the characteristics of what makes a successful business successful. Business owners, she says, are quick to forget that success doesn’t always mean more.
“It’s characteristic of the entrepreneur to want to expand, to want more,” says Bailey. “But just because things are going well doesn’t mean you have to add staff, or implement new programs. We are here to help discuss and formulate ideas to better assess those issues.”
With the economy in a state of turmoil, more and more people are turning to entrepreneurship, says Mary Riebe, director of the Center for Women Entrepreneurs at Metro State in Minneapolis. She says that while most people have a general idea of how to start a business, the hard part is continuing that business and making it successful. That’s where these entrepreneurial centers play a crucial role.
Anyone who comes through the center will take part in a three-hour, oneon- one session with a banker, a lawyer, and an accountant from a Twin Cities firm. Wells Fargo has partnered with Metro State to provide banking advice, and Riebe was finalizing partnerships with a law and accounting firm.
“Even if you already have established relationships in your business with these professionals, the key to continued success revolves around the business owner’s ability to adapt to the times,” says Riebe. “What may have worked two, three, five years ago may be different today. We hope to provide an opportunity for business owners to help establish and identify what their changing business needs are, and how they can find the best solution to those changes.”
Mike Cleary, founder and owner of Coridian Technologies Inc. in Chanhassen, could be considered the poster child of ongoing entrepreneurial education. Cleary has gone through the Fast Trac I, Fast Trac II and Beyond Startup classes at St. Thomas, and often comes back to speak to other business owners who are also taking these classes. Coridian focuses on identification and data collection solutions and was named to the 2002 Inc. 500 as one of the fastest-growing privately held companies in America. Here’s the kicker: The company has 10 employees. “It shows that you don’t always have “We are growing as a business, and we are cautious about how we do that.”
One aspect of the Fast Trac II class that still stands out for Cleary is a 70- page document he developed that estimated projections for the company, showed what they planned to sell, who they planned to sell it to, and how they were going to attack the market. When Cleary brought that document to the bank, it brought instant credibility, Cleary says.
“And we hit every one of those milestones we projected,” says Cleary. “That proves that if you write things down, you will accomplish what you set out to do. If I never took that class I never would have had that document. It doesn’t mean we wouldn’t have grown to be successful, but I feel a whole lot better knowing I did that.”
More than anything though, Cleary enjoyed the camaraderie of being involved with other business owners. He says people in the Fast Trac I program were pretty tight-lipped, but at the Fast Trac II and Beyond Startup classes, these business owners were already established, and not afraid to open up about their situation. Cleary says the chance to meet with other owners was worth the time alone. But the chance to apply what you learn as he went was even more invaluable.
“I still try and get back and speak with as many classes as possible,” says Cleary. “I think the programs were a great value to my company and what we were trying to accomplish.”
Caruso agrees. While he still misses the physical work of installing fences, he knows the best place for him is running the business side of Premier Fence, not working out in the field.
“I do miss getting out there, getting my hands dirty and doing the work that got me interested in this business,” says Caruso. “I really enjoyed the art of fence building, but now my role has changed, and I have to change with that.
“I took a lot of pride in doing a good job, but I don’t think my workers would want me out there, I would just get in their way,” he says.
pat@premierfence; www.premierfence.com. Mike Cleary, Coridian Technologies: 952.361.9980, mc*****@******an.com; www.coridian.com. Mary Riebe, Center for Women Entrepreneurs, Metropolitan State University: 612.659.7259, ma********@********te.edu, metrostate.edu. Laura Price, John M. Morrison Center for Entrepreneurship, University of St. Thomas: 651.962.4401; http://www.stthomas.edu/entrepreneurship/ morrison.htm. Kari Lee Beutell, Kari Lee’s Country Mix Co. Inc.: 952.935.2014; ka**@*****ee.com. Tom Beutell, Lee’s Country Mix Co. Inc.: 952.935.2014;******@*****ee.com“> tb******@*****ee.com; www.karilee.com. Ken Maddux, Anderson Entrepreneurial Center, St. Cloud State University: 320.255.2120; www.haec.org, ec*****@**********te.edu. Jeanne Bailey, director, College of St. Catherine’s International Institute for women entrepreneurs; 651.690.8891; jm******@****te.edu, www.skate.edu
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