Upsize is a magazine with a single mission: to help Minnesota's small-business owners build bigger and more profitable companies, and to connect CEOs with the people, products and ideas they need to grow.
Issue link: http://www.e-digitaleditions.com/i/66695
Q&A Best of Upsize busy, and we added to that. Each focuses on the market they're responsible for, and it's been a great team. Upsize: You mentioned the process you go through every year. It sounds quite detailed, and it sounds as though it gives everyone in the company specific tasks. Lowenberg: Yes, even our bookkeeper has specific tasks, for example, how can we focus on the apartment customers, how can we meet their needs? We also look at realtors, they're a nice referral for us, because they're trying to sell homes and when you sell a home you have to bring it up to code. Dentists, banks—they all have different needs. We try to craft a message to each of them. Upsize: Why do you involve everybody in the company and give each person specific tasks? Lowenberg: Well you wouldn't want me doing it, that's for sure! No. 2, every- body has to be on board. The electricians are the face to the customers out there, so they're critical to knowing what our business plan is. It adds so much value because all come from different backgrounds. They can bring in their expertise. They've tried something with past contractors that did work or didn't LAW Why all owners need to sign a buy/sell agreement "The reality is there's no better time than when relationships are strong and positive to develop an agreement that protects the partnership against unforeseen changes down the road. If a shareholder decides to leave the partnership, a buy/sell agreement can provide liquidity, establish a value for the stock, and offer restrictions on stock transfer in a closely held company. It requires thought and discussion, but can be a lifesaver for a company if done properly." Terri Krivosha Maslon Edelman Borman & Brand, LLP 612.672.8340; terri.krivosha@maslon.com This expert's advice was taken from an article that ap- peared in Upsize. To see the entire article: CLICK HERE 22 UPSIZE ONLINE THE GROWTH GUIDE 2012 work. The bottom line is they're a lot smarter than pushing stuff from the top down. When a company starts to get in trouble, all the decisions tend to bubble up to the one person, the Dad who started it, let's say, or the son who has taken over. The best ideas come from the floor, as I say, because I work with so many manu- facturers. They see the issues; they live it; they breathe it. They're going to have the best ideas all the time. Upsize: You said that often when a company gets in trouble, the owner has started to make all the decisions. Is that a cause or an effect of trouble? Lowenberg: There's a lot of different reasons that companies get in trouble, but there are two or three top ones. One is they took on too much debt, and their business didn't increase. For example I see it all the time when the Dad started his business in the garage in 1968, and moved it to a shed and did fine through the next decades. Now when the second genera- tion comes on 30 years later they want to add to the company and the business isn't there. So they start to bring in low-margin work, which is another red flag. A lot of time the revenue has doubled but it's low margin work so the profits are down. And then you probably have a man- agement team that's not diverse enough for that business. Upsize: What do you mean, not diverse enough? Lowenberg: In my opinion there's three pieces of a business. You have the busi- ness development side, and then you have the operations piece and the finance piece. A lot of times the owner is really good in one of those areas, but maybe the spouse is doing the books, and the spouse is a good bookkeeper but isn't a good CFO type. Or maybe the son is good at sales like his Dad, but isn't skilled at operations. The problem with turn- arounds is you don't have those three strengths in the business. You have to have those three legs that are strong, and if you don't you'll have problems. Upsize: When you evaluate a company, what are you looking for in those three areas? Lowenberg: Every industry is a little different. And so sometimes it's impor- tant to have that industry knowledge; sometimes it isn't. In the finance area it's probably less important, but it's impor- tant to know cash flow. The problem with turnarounds is they probably know their p&l well; they may or may not be manag- TECHNOLOGY Computing 'in the clouds' can help small firms "Cloud computing allows organizations to focus on their greatest areas of expertise by letting others with computing specialization take care of those functions on their behalf. But beware: cloud comput- ing does not absolve your organization of the need to do due diligence or to have a backup plan in place in case something goes awry. Legitimate service providers already have multiple layers of redundancy in place to ensure data security. Nonetheless some organizations with legal responsibility for handling customers' data with utmost care may prefer to build a private cloud for another layer of security." Tom Salonek Intertech 651.288.7000; tsalonek@intertech.com This expert's advice was taken from an article that ap- peared in Upsize. To see the entire article: CLICK HERE www.upsizemag.com