Business Services

Strong and sound

By Abby Cymerman

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Duane Hickerson
Partner and founder, Relay Gear

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Duane Hickerson wants to put your name on his merchandise.

As a partner and founder at Relay Gear, a promotional products company, Hickerson creates partnerships with clients to design customized promotional programs, keeping their names front and center.

“You want your customers to think of you when they want something in your industry because they know you’re professional, and you’re providing value,” he says.

In addition to establishing customer relationships, he says a strong infrastructure and sound financial base are essential to success, and Hickerson and his 30 employees have grown sales from $5.5 million in 2005 to $8.5 million last year.

“It’s a lot of moving parts,” Hickerson says. “The key is to get the moving parts to work together.”

Smart Business spoke with Hickerson about how to recover from bad hiring mistakes and how to build a strong infrastructure to grow your business.

Q. How do you build a strong infrastructure?

Get the proper personnel in the right roles. Most of us in small business know enough people that we can find good people. I’d rather have people who were recommended than go out and find people.

If you put an ad today online or in the newspaper, you get deluged with responses. People are very good at making themselves look great on a resume, and some people are professional interviewers. We’ve hired that way, and we’ve found out that their skills were not what we thought they were.

Q. How do you recover when that happens?

Sometimes, it takes awhile because you keep trying to get the person to do what you need them to do. You have to hold their feet to the fire, and you have to be honest. If the person’s not getting it done, you need to address it. They can step up and get it done or they can’t, and you need to move them out — and then try to find the right person.

Hiring is difficult because most small businesses don’t have HR experts. HR experts can see some of the danger signals a lot quicker than we can.

Q. How do you find people who you are confident will work out?

We try to find people through recommendations, and we also use temporary agencies that will screen applicants for us, and we only meet the screened people. The temporary agency knows our business, our culture and our personalities, and they get a feel for who will fit and who doesn’t fit.

We use it as an outsourced function. It’s still not a perfect solution, but it has helped.

If you can prevent the bad hires, you’re saving yourself a lot of time, money and headaches.

Q. How do you create a sound financial base?

First, you have to have a good relationship with your financial institution and your banker. We use a local business-only bank because they’re more flexible than a major bank would be. At a major bank, if your loan officer happens to leave, the new loan officer may not like the deal or may not lend this much money or might have to change the deal.

Second, cash flow is critical, so you need to have good customers that pay timely. If you do a big job for somebody, and they don’t pay or drag it out over a long period of time or complain and find ways to not pay the whole bill — those are killers to small business.

We can only fund so much activity — payroll, payroll taxes, health insurance and operational invoices. When customers don’t pay timely, it starts eating into funding the basic functions of your business.

You have to manage your receivables; you cannot let these companies stretch you out. A lot of companies will slow pay, and if you don’t call them, they figure you really don’t need the cash. As soon as customers get past 30 days, you need to be on them because if you wait until 60 days, you probably won’t get the money for 75 to 90 days, and you go through all that rigamarole. Bigger companies can fund that; little guys can’t.

Q. How can companies fire a bad customer?

A lot of small businesses keep trying to do business with bad customers. A bad customer doesn’t necessarily mean that it’s a bad business; they might be an OK customer for somebody else, but they might be a bad customer for you. You need to evaluate that. When you call and find out new information about things that were wrong, you’ll realize it’s just not working.

For a salesperson, it’s hard to walk away, but you have to put your business hat on and say, ‘These guys are killing us. They’re too hard to do business with.’ Just try to get the money that they do owe you, shake hands and say, ‘Have a nice life,’ and go on your merry way.

HOW TO REACH: Relay Gear, (888) 735-2943 or www.relaygear.com