How Carol Wior works hard to stay positive even during the toughest of times

Carol Wior, Founder and CEO, Carol Wior Inc.

Carol Wior has a lot of experience at overcoming challenges. She started her business in a garage with three sewing machines and $77, built it into a $75 million clothing design company and then watched as it fell apart and she had to start all over again.

Add to that a couple of tough recessions and you realize Wior has spent much of the past 20 years in recovery mode at Carol Wior Inc. Fortunately for her, she can still laugh about all the ups and downs.

“You can survive anything if you want to,” says Wior, the 200-employee company’s founder and CEO. “Believe me, there are times when I’d like to bury my head in the sand. Every person goes through that, especially when you start a business on a shoestring like I did. But here’s what you can do about it. There’s a solution to every problem.”

The most recent recession hasn’t completely squelched that optimism, but Wior is still very concerned about the future of her industry.

“A lot of people are using up their reserves and their savings to get them through this rough time hoping that eventually, things are going to turn around,” Wior says.

One of the most common challenges during a recession is that with everyone struggling, you begin to have customers who have trouble paying their bills. You’ve got to find a way to connect with them and work with them to find a solution.

“I have people that owe me money that won’t take my phone call,” Wior says. “That is the most infuriating thing. So I leave messages like, ‘Listen, if you don’t have the money to pay me, I totally understand. If you can give me something, give me 10 percent of what you owe me. Just a little something. I’m not going to pressure you right now. I understand it’s tough. But I need a call back. I need you to talk to me.’

“When people are silent, you don’t know what’s going on and that’s your unknown and that’s when you start to get very worried and upset. Unfortunately, people tend to do that.”

Wior feels strongly that collaboration is vital when it comes to surviving economic slowdowns. That goes both for collecting money from customers and vendors and seeking money from lenders and creditors.

“Sit down with people who won’t give you credit and say, ‘Look, you’re not giving me credit, but I want to show you why you should. Here’s what I can do,” Wior says. “Explain what you have and why you think it’s great.”

Of course, you need to do more than just tell people that what you’re doing is awesome. You need data that backs it up and shows you’ve built something worth investing in.

“If you don’t know what your figures are, your financial statements or your working capital, that will completely turn them off,” Wior says. “You need to know your financial statement upside down and sideways. You have to know the answers to all the questions they are going to ask you.”

Don’t be afraid to bring your accountant along to help with those details and also back up your proposals.

“It’s much easier for your accountant to sell you than for you to sell yourself,” Wior says. “The accountant knows the answers. They speak the same language. As a businessperson, I get very excited. I see the marketing potential and I see the design ideas. I’m all excited about that. The bottom line, the accountants can address that. If you’re going to answer financing questions, bring your accountant with you.”

The key whether you’re trying to collect on bills or add investors is to keep the lines of communication open.

“Face it straight on and attack the problem,” Wior says.

How to reach: Carol Wior Inc., (562) 927-0052 or

Have a solution in mind

You may think you’re doing your employees a favor when you offer an overly rosy view of your company’s current financial state. But Carol Wior says you’re just asking for trouble down the road.

“If people understand situations, they can handle them,” says Wior, the 100-employee clothing design company’s founder and CEO. “It’s the unknown that freaks people out.”

When your employees hear a lot of bad news outside the company, and then hear you talk about positives without anything to back it up, you’re going to leave them very confused. And that’s not good.

So don’t be afraid to talk about problems, but do so with a real solution in mind for how to solve it.

“I usually have solutions before I present my problem,” Wior says. “Have some solutions before you express the problem. Here it is. We have a big cancellation and that’s going to mess up shipping for the month. Or so and so isn’t paying us, and they filed for bankruptcy, and that’s really going to hurt our cash flow next month. But here’s what we can do about it. You get the solutions together and then your team sees you working with solutions. They don’t just see you as, ‘Oh my God, we’ve got this problem.’”

How Darryl Jones found a new way to make his business work and stay competitive

Darryl Jones, Managing Partner, D&D Concessions LLC

Darryl Jones has watched each year as the number of convention attendees who travel to St. Louis drops a little bit more. Jones is managing partner at D&D Concessions LLC and is responsible for food service at the America’s Center Convention Complex in St. Louis.

“Now that we don’t have the 20 million people coming in, we may have six or seven million people coming into St. Louis,” Jones says. “It’s a challenge. So in our business, what do we do? We have to look outside the box because we can’t get the big conventions here anymore.”

In short, Jones had to reinvent his business. It was either that, or close up shop for good, and he wasn’t prepared to do that for his 350 employees.

“You have to have the presence to always look at the landscape and see how it’s changing,” Jones says. “At one time, we depended on X amount of conventions to generate 80 percent of our revenue. Now that number is only generating 50 percent. So how do we make up this gap?”

The simple answer is you look for other means of generating revenue. But you take caution to not make every idea out to be the grand solution to all your problems.

“You try to win people over by saying, ‘OK, look. Let’s just try it like this. Let’s tweak it a little bit.’ You try to compromise,” Jones says. “If it doesn’t work or we don’t see any change, we can always go back. There’s nothing wrong with going back. There’s nothing wrong with saying, ‘Hey, we made a mistake.’”

You may not even have to trot out a new idea if one of your competitors has tried a new initiative to get their business going again.

“Instead of reinventing the wheel, you look to see what they’ve done and you try to tweak that,” Jones says. “Very rarely will you have that one person to jump out there. If that person has jumped out there, you look at it, analyze it and you say, ‘OK, we can tweak this just a little bit better. They may not have thought about this. They’ve changed the landscape a little bit, but let’s take it a little further.’”

The key is to take a measured approach to change. If your idea works, great. But if it doesn’t, your people will still be ready to follow you with the next option.

All this relies, of course, on your ability to get out there and get engaged with your people.

“If you’re the CEO that’s always behind closed doors and you’re always meeting with senior staff and you never engage the junior staff and the hourly folks, you may have a problem,” Jones says. “You’re going to become like an untouchable.”

Get to know your people and let them get to know you. Not the polished and controlled you that only engages in small talk. Be the leader who really gets to know what your people are all about and what they like about their work and what they find challenging about it.

“You have to know them,” Jones says. “Once you engage them, you have just as much passion about their families as they have. Once you buy them over, they will do it for you. It will be a place where they think, ‘Hey, I can go to the boss’s office anytime I want to.’”

You may be thinking to yourself, ‘I always talk about my open-door policy.’ But if you don’t have anyone coming through your open door to see you, maybe you’re putting other signs out there that convey the message that you really don’t want to hear from your people.

“If the hourly employees can see you get out there and you sit down and you put that pattern together and you say, ‘Hey, this is how you’re supposed to do it,’ they’re going to say, ‘Wow, this person really knows what they are talking about,’” Jones says. “They will do anything for you if they know you care.”

How to reach: D&D Concessions LLC, (314) 429-3400

Stay hip

If you’re feeling out of touch with your customers, Darryl Jones has a suggestion on how to reconnect that you may not have thought of before. But he insists it will produce results.

“You can probably incorporate any business you have when you start looking at fashion magazines,” says Jones, managing partner at D&D Concessions LLC. “Those guys are always on the cutting edge. The auto industry didn’t get to where it is by saying, ‘Hey, we’re going to go with the same old-style look. They started looking at those fashion magazines and saying, ‘Hey, you know what? These are the colors people are looking at.’

“They are looking at tech magazines and saying, ‘We need to incorporate these things. These young adults, they want this type of experience in a car.’”

Jones believes much can be gained from the younger generation that is establishing itself and setting the trends for the future.

“You’ll pick up a lot,” Jones says. “What do you like? What type of atmosphere are you looking for? What types of colors do you like? Talk to the younger generation because that’s your next source of revenue.”

And everyone should be taking part in that dialogue.

“It’s everyone’s responsibility,” Jones says. “From the guy sweeping the floor to the guy signing the checks, it’s everyone’s responsibility because everyone is traveling in different circles.”

Conducting the proper due diligence to ensure a successful acquisition

Thomas Vaughn, member, Dykema Gossett PLLC

When you’re considering buying a company, it’s not just a matter of locating a target and writing a check. There’s a lot that goes into doing proper due diligence, and if you fail to do it right, the transaction could be disastrous, says Thomas Vaughn, member, Dykema Gossett PLLC.

“From the purchaser’s perspective, conducting an effective due diligence process is critical to maximizing value from your acquisitions,” says Vaughn.

Smart Business spoke with Vaughn about why due diligence is critical to ensure a successful acquisition.

When considering purchasing a business, what is the first step?

Start by assembling a team of in-house and outside lawyers, inside and outside financial professionals, and possibly experts in various areas impacting the target. In the due diligence process, it is the job of the buyer to learn and understand everything it possibly can about the prospective target, and that requires a very deep dive by the due diligence team.

What is the next step?

The team should develop a due diligence strategy, and one of the most important components of that is to agree on the purpose of the due diligence effort.

From a buyer’s perspective, due diligence can be a very expensive process, so it is typically done in stages to keep costs down until the buyer is certain it is going to complete the transaction. As a result, in the preliminary due diligence, you are trying to determine the target company meets your investment parameters. You’re looking for ‘go, no go factors.’

The early stages of due diligence are very financial and operations oriented. For instance, making sure the financial statements and projections accurately represent the company’s business prospects and that there aren’t any major customer problems or potential defections are critical elements of due diligence.

From a legal standpoint, you look for high-dollar legal issues, like pending litigation or claims, or legal impediments to completing a deal, such as regulatory issues.

Also determine that the value you see in the company is an accurate perception of its true value. As part of that, identify and confirm synergies. All of these efforts will help you negotiate the purchase price and other deal terms.

Once you are satisfied with value and have signed a letter of intent, you can conduct the detailed part of the due diligence process.

How do you proceed with the detailed due diligence?

This is when the process starts in earnest. Have your team divide up responsibilities so that you’re not duplicating efforts and you are conducting the process as efficiently as possible. You want to make the process as smooth as possible for the seller. Due diligence is burdensome and time consuming for the seller. Don’t have multiple people asking the same questions or asking for the same documents.

One of the best ways to help this run smoothly is to present the seller with a detailed checklist. Often there is information listed on there that the company doesn’t have, but you can use the list to trigger the seller to think through the information documents the seller has and should be providing to you. Then keep the list updated to reflect documents received and make the list available to all team members

How is the due diligence information delivered?

Determine up front the deliverable to come out of the due diligence process. Is the expectation a written report from the accounting and legal staff? That is the most typical result, but there is an expense involved, so you have to determine if you want to incur that. You can also start with an oral report or short written report that notes red flags and items that are potentially problematic as a precursor to the full report.

That report should come with recommendations as to which problems can be potentially fixed and how to fix them, or whether the problem is so significant that it should have an impact on the purchase price or the decision to move ahead. Another outcome when due diligence identifies problems or uncertainties might be to have part of the purchase price paid as an earn-out. If certain things represented by the seller happen, you’ll pay the full price, but if they don’t, you won’t have to.

What are some red flags?

The biggest one is a very disorganized seller. In this case, the buyer needs to do very thorough due diligence. Lack of documents where you expect to see them, or poorly drafted documents or contracts, are also an issue.

Another red flag is a seller who provides you with certain due diligence but is slow providing other information. This may be an indication the seller is holding back bad news.

How does due diligence help in preparing schedules used in the typical acquisition agreement

The seller makes representations and warranties in the acquisition agreement and puts exceptions in the schedules. Then the buyer reviews them to get comfortable that nothing new has appeared in the schedules that was not disclosed in the due diligence process. It’s not unusual for new information to appear in the schedules, which can be a big problem.

If the buyer feels the seller intentionally didn’t disclose information until the last minute, it can have a very negative impact on completing the transaction and the ongoing relationship between the retained members of the management team and the buyer.

What kinds of things can show up at the last minute?

Usually it is a problem the seller was trying to solve before he or she has to disclose it, but can’t. The seller discloses it in the schedules just before the acquisition agreement is signed to avoid later indemnity claims. But doing so at the last minute is a problem in itself.

Thomas Vaughn is a member at Dykema Gossett PLLC. Reach him at (313) 568-6524 or [email protected]

How Perfection Spring took a patient approach to help get its marketing mojo back

David Kahn, President and co-owner, Perfection Spring & Stamping Corp.

Joshua Kahn, co-owner, Perfection Spring & Stamping Corp.

David and Joshua Kahn placed a lot of faith in the strength of the automotive industry, but now it was coming back to bite them. As the recession of 2008 took hold and brought automakers, among other businesses, to their knees, sales volume at Perfection Spring & Stamping Corp. took a big hit.

“Our greatest challenge was twofold,” says David Kahn, president and co-owner of the precision metal formed component supplier. “One was to grow sales and two, to further diversify the sales base so that if another downturn did come down the road, we wouldn’t be impacted as greatly by the automotive industry.”

The Kahns concluded that their stale marketing strategy was a big part of the problem at the company, which has more than 100 employees.

“The only people that knew us were the people that knew us,” says Joshua Kahn, co-owner and executive vice president of sales. “In order to increase market share in our current markets and also obtain new markets, we needed to refocus our marketing and sales strategy.”

Joshua felt the company wasn’t doing all it could to support its existing customers, nor was it doing enough to obtain new customers and expand the business. The company’s failings at marketing were most evident on its website.

“At the time it was built in 1993, it was really about photos and fluff rather than being a user-friendly site with information that customers would go back to time and time again,” Kahn says.

He decided to get out and attend industry association meetings to learn more about what other companies were doing with their sales and marketing strategies. But before he actually went to those meetings, he met with his management team and ironed out exactly what Perfection Spring was looking to achieve.

“I made a list of all the different marketing strategies that we could come up with as a management team and then went to these meetings with eyes wide open to learn,” Kahn says. “If I were to offer one piece of advice, it would be to understand what you want to do, then go ahead and do your own research. Many things introduced in the meetings, after I came back and did research, I found were not necessarily for us.

“It was a great platform to really review our entire marketing strategy. But you still have to be wise and figure out what’s best for you, for your business and for your customers.”

Kahn says it’s easy to go to a conference or hear from an expert and simply buy in to everything that this one person is trying to sell you. But it may not be a good fit for you.

“We started doing trade shows as a result of the conferences,” Kahn says. “We redid our website. We changed our sales organization internally. We did quite a number of things. But we didn’t jump into anything.”

In fact, after attending conferences in the summer of 2009, Kahn and his team took several months to digest what they had heard and plot a new strategy for the business.

“We wanted to make sure we did it right,” Kahn says. “Not fast but correctly.”

One thing that has become very obvious to David is the need to get in front of customers on a regular basis.

“We supply parts, but we don’t supply standard parts,” Kahn says. “Everything we supply is custom. So we are in essence a service provider. The greatest service we can provide our customers is engineered solutions to their problems, not only from a design standpoint but, more importantly, from a cost reduction standpoint.”

The deeper connections that are being formed between Perfection Spring and its customers are showing results. The Kahns give a lot to credit to Thomas Industrial Network for helping them to develop an effective web strategy.

“The actual design of the website has certainly played a big role in obtaining prequalified leads and new key customers,” Joshua Kahn says. “It has let us expand into markets that we were never in before.”

How to reach: Perfection Spring & Stamping Corp., (847) 437-3900 or

Eliminate waste

One of the most important changes made at Perfection Spring & Stamping Corp. is the effort to create a website that would enable the company to prequalify sales leads.

“Just as we are prequalifying prospects, they are prequalifying suppliers,” says Joshua Kahn, executive vice president at the precision metal formed component supplier that has more than 100 employees.

“When they put in their search terms, they are finding us and we are finding them. By the time we get a quote request, there is a good match. We go through a detailed qualification process after we get a quote request to make sure our company is on the same track with their company.”

When it comes to websites, you’ve got to know what you want since there are so many directions you can go.

“The first thing we did as a management team, we listed everything we wanted and we literally wrote it down,” Kahn says. “We brainstormed. Then when we met with the various vendors that could provide us with those services; we were sure to ask them all the same questions. Then when we met again and reviewed the answers from all the companies, very clearly as our management team saw, there were certain companies that would meet what we expected and others that would not. A website is a living, breathing thing. Even though we went live, we are constantly changing it.”

How the data center market is changing

Tim Chadwick, President, Alfa Tech

For many companies, a data center has become a necessity. Whether your company is considering building its own stand-alone data center or renting space in a colocation center, there are some recent trends to consider.

“The trends happening fall down different lines,” says Tim Chadwick, president of Alfa Tech. “There are some commonalities that happen on both sides, but things that work for the enterprise market don’t always work in the colocation world.”

Smart Business spoke with Chadwick about what companies should watch for in the changing market for data centers.

What are the latest data center trends in the market?

The major trend right now in designing,  building and operating data centers is improving energy efficiency — reducing the carbon footprint. The fringe benefit of this environmentalism is saving on utility costs.

In moving toward energy efficiency, what we’re able to do for enterprise customers is look at the specific equipment to be used — the specific types of computers, storage devices and networking equipment — and really tailor the space to that equipment. The best example of that is the air that enters the computer to cool it. With an enterprise customer who may know specifically what equipment he is going to buy, the designer of the data center can let that temperature go a lot hotter or colder, or the air more humid or dry than past data center designs allowed.

In the colocation market, the colocation facility’s owner rarely knows what his tenants will require. The whole point of being a colocation landlord is you want a facility that appeals to everybody. If you were to build a facility that could only house a type of computer that can take hotter air, you are limiting your market. So builders and designers of data centers don’t always have as much flexibility in colocation spaces. Enterprise spaces have more innovation, more things happening. But what’s happening in the enterprise market is starting to find its way into the colocation market.

How is the enterprise market driving the colocation market?

For instance, Facebook has proven that you can use most servers at higher inlet temperatures. Once you start to get people to realize that, there is a larger clientele that is willing to go into a data center (like a colocation space) with higher temperature ranges. Instead of always seeing facilities using 75-degree air, they might see 80 or 85 Fahrenheit. When you have those higher temperatures coming in, that is where you can achieve big energy savings. You are spending less to cool your computers and equipment. And sometimes you’re not spending anything; the data center could just be bringing in fresh air from outside.

Because it’s already happening in the enterprise market, more people are willing to try it in the colocation market. Ten years ago, the only lease people would sign up for was guaranteed 75-degree air going into your computer. Now more and more people are considering that the old way of thinking. As long as people are open-minded to go to a higher inlet temperature, the colocation owner can pass along the savings. If the facility is cheaper to build and operate, he can charge you less for rent.

What other trends are occurring?

There have been changes in electrical in regard to the power coming in. We are starting to see more variations on the voltage coming into servers. That opens up opportunities for energy efficiency, and it has led to a similar situation with the enterprise customers driving the market for those sharing and leasing data center space.

Once one enterprise customer buys a thousand servers at a previously unknown voltage, the price point comes down. If there is no demand, the supply price is high. If you can increase demand to where there is a viable market, Dell, HP, IBM — the big computer manufacturers — are starting to see a market in these different voltages, so the price point is coming down. If you can buy cheaper equipment and save energy, that is the best of both worlds.

How would a company know what voltage is necessary for its data center?

You can buy the same computing platforms at different voltages. It’s a matter of what type of infrastructure you are plugging into. If you are in the U.K., for example, the voltage is different than in the U.S. So you have to make sure your server can plug into that and absorb the different voltage. If you’re in a colocation market, you have to talk to your provider and find out the available voltages at his facility. If you’re in a purpose-built data center, you work with your consultant to figure it out and design around your needs.

However, companies need to find a balance. Everyone is trying to wring out every last cent from the design and construction, without realizing that if you can get the end customer to buy different voltage equipment, they could save 5 percent in annual energy costs, for example. That might be true, but that different voltage equipment might cost 10 percent more in capital costs.

It might be worth it. But when you compare 10 percent more in capital costs versus a 5 percent annual savings on energy, sometimes it just doesn’t pencil out. You have to be careful to look at the whole picture. Quite often, data centers are not designed holistically. They aren’t designed knowing what equipment is going to be in them.

The key to a good design is a good understanding of the equipment that will be used in the space.

Tim Chadwick is president of Alfa Tech. Reach him at (408) 487-1278 or [email protected]

How Mike Kahoe started a health-smart program and cut insurance premiums at Group Management Services

Mike Kahoe, president, Group Management Services Inc.

Mike Kahoe was not happy with the 15 percent increases for health insurance premiums that his company, Group Management Services Inc., was facing each year. It was time to take control to lower health insurance costs for the 50-some people on the plan.

Once Kahoe, president of the $24 million professional employer organization, searched for some information, he was swayed over to a plan of wellness for his business. He believed he could cut the health insurance premiums significantly ­― and there were other benefits.

“At the end of the day, you have a bunch of people who you work with that are healthier and happier,” he says. “And that means happier customers.”

Here are some of the steps he took to reach his goals.

“One of the first steps is to get nurses to test everybody’s cholesterol and blood sugar levels, height and weight and so on,” he says.

This will establish some base-line statistics that you can work on to improve, and the recommendation that some health behaviors need to change has more substance coming from a health professional.

“You should use nurses rather than staff,” Kahoe says. “A lot of times, it’s delegated to an HR person who tells you to quit smoking or says you should quit smoking. I just don’t think it’s very powerful. I think when a nurse or a doctor tells you, it’s a different story.”

The company leader needs to support the efforts.

“Don’t be afraid to get involved in it personally. Take a look at yourself first,” Kahoe says. “People tend to replicate your behavior; for example, if you’re out back smoking a lot, I think it’s bad for the company.

What Kahoe found out about his personal base line became a driving force for the program.

“Honestly, at the time, the thing that was most shocking was that I might have been the biggest violator of all,” he says. “I was smoking two packs of cigarettes a day, working hard and not watching what I was eating. I was also on the obese level, and I really didn’t like that term associated with me.”

The second step is to develop the programs by getting information from health sources on popular initiatives such as smoking cessation, weight loss and healthy eating programs.

“We just put together some programs and some incentives for people to quit smoking and live healthier lifestyles.” Kahoe says. “We had some weight-loss competitions and things like that.”

As soon as he knew what his initiatives would be, Kahoe devised ways to make it easier to stay focused on goals.

“There has to be a carrot, and there has to be a stick,” he says. “I think the people that are making bad choices in their behavior should pay a little bit more for health insurance. I mean it takes a little bit of work to be healthy, to get on a treadmill for a half-hour a day or whatever it takes. I think those people should be rewarded for the work they put in.

“If you are a smoker, you pay a little bit more for your insurance, but can get a bonus if you quit; if you are a nonsmoker, you actually get another contribution to your health savings account every year to help fund your health insurance.”

As a last step, you should invest in tools to help employees reach their goals. Kahoe built a workout room where there are treadmills, an elliptical machine and weights.

“It gets very heavy usage,” he says. “The goal is just one more way to get people involved.”

After the programs have been in effect for some time, you should see some impressive results.

“We are down to single digits for the percentage of smokers, we cut in half the obesity numbers and the overweight numbers. Our health insurance costs were cut in half and continue to go down every year. Your people are just healthier. You should get less sick days and a happier environment.”

How to reach: Group Management Services Inc., (330) 659-0100 or

Peer support

When Mike Kahoe, president of Group Management Services Inc., wanted to start some wellness initiatives at his company, he knew that peer involvement would be a key point.

Getting people involved starts with your initial event, which is a type of health inventory. You should make it voluntary to participate in the health professional-run event, which includes blood pressure, cholesterol tests and blood tests. With some promotion, you should get a high rate of involvement in the kick-off event. You want to get as many involved as possible to be a success.

“We had almost 100 percent participation,” he says. “People need some awareness and a little bit of a nudge sometimes.”

A good idea is to open the programs to all employees, not just the ones enrolled in the health care plan. This will help unify the participants even more. Team members will give each other encouragement.

“It would be a complete failure if you don’t get the employees inspired,” Kahoe says.

A smoking cessation program featuring a bonus for quitting can start small, but with participation and positive results, it will likely grow.

“A lot of people will encourage each other,” he says. “Once it catches on, and 10 people quit smoking, I think the other people could figure out that they could too.”

How loan syndications are changing the lending environment

Ron Majka, Senior Vice President and Manager of Loan Syndications, FirstMerit Bank

Companies with large capital needs often employ a commercial banking relationship that includes a syndicated bank loan — a commercial loan that is provided by multiple banks (a bank group), where one bank acts as the lead arranger and administrative agent for the bank group. A company’s bank group can be as small as two or three banks, or, depending on the size of its credit facilities, can be much larger to include dozens of banks.  Over the last 15 years, syndicated bank loans have become the dominant way for companies to finance their capital needs.

“Despite what you hear about banks not lending, 2011 was a record year for syndicated multi-bank loan financing, topping $1.8 trillion,” says Ron Majka, senior vice president and manager of loan syndications for FirstMerit Bank. “The syndicated loan market is very healthy and active, and local banks in Northeast Ohio are hungry to support healthy growing companies.”

Smart Business learned more from Majka about multi-bank loan syndications and how to tell if it could benefit your company.

What types of companies could benefit from considering a multi-bank loan syndication?

The need for a syndicated bank loan is often event-driven. Frequent triggering events include the financing of mergers and acquisitions (M&A), new construction associated with corporate expansions, large equipment purchases, or dividends to owners (referred to as leveraged recapitalizations). In addition to event-driven situations, the need for a syndicated bank loan sometimes can be more evolutionary. As companies reach a certain size, they may outgrow a singular relationship with one bank. Moving to a larger, syndicated multi-bank credit facility is a natural next step for these companies.

Why are loan syndications becoming so popular?

Multi-bank syndicated loans are popular because they are the most flexible and economic financing alternative available to companies.  Other methods of raising large amounts of capital include going public through the sale of stock, issuing bonds, or attracting investors through a private placement. Each of these options is much more expensive, and not nearly as standardized and flexible as bank loans. From a banking perspective, nearly every bank that is active in commercial lending is involved in some level of providing syndicated loans. Together, these factors contribute to the amount of multi-bank syndicated loans issued -— now exceeding $1 trillion per year.

How can loan syndication benefit a company?

Having an optimal credit facility is a crucial component to the long-term success of a company. A syndicated loan sets the platform for a company’s growth. A simple two-bank syndicated loan facility can be very easily expanded to accommodate increased loan amounts and additional banks, to complement a company’s growth needs. Another benefit of loan syndication is that a company can tailor a bank group that fits its specific corporate strategy and needs. For example, a Northeast Ohio company that is engaged in international business may choose a strong local agent bank that provides stable, trusted leadership. That agent bank might then add an international bank to the bank group to help provide overseas trade and banking needs for that company. Also, competition is always a good thing. Having multiple banks involved in competition is a way to make sure the client is always getting the best execution, and that its banking terms and structure are most favorable.

How can a company choose the right agent bank to lead the loan syndication?

It’s important to put a lot of thought into whom you are entrusting as your agent bank. Bigger isn’t always better, nor is it wise to adopt a cookie-cutter approach. You want an agent who understands your business, takes the time to fully comprehend your company’s strategy and growth plans, and then crafts a financing arrangement that helps you achieve those goals. Choose a bank where you will have an experienced group that is solely dedicated to structuring, leading, and administering multi-bank syndicated loans. Lastly, any successful relationship is a two-way street.  Make sure you are comfortable with your agent bank’s culture, strategy, leadership, health and stability. This relationship is very important.

How does the process of issuing a syndicated loan work?

It is typically a five- to eight-week process from start to finish. First, it involves choosing the right agent bank. Next, the company works with the agent bank to craft the right strategy to produce the kind of bank group it wants to achieve. For instance, you may have a number of questions to consider. Do you want international or local banks as part of your bank group?  Are you interested in banks that are active in or have expertise in your industry?  Should you just include those banks you are familiar with? Or, are there banks that you do not know that can add value to your bank group? Once you determine your optimal bank group, the agent bank will use its knowledge of the marketplace to approach and attract the right partners.

The process also includes the agent bank and the company working together to create materials that fully describe the company’s business, philosophy, industry and corporate plans. That package of material, called a confidential information memorandum, is a 25- to 100-page document that includes a complete assessment of the company and its operations. Once everything is set, the opportunity is launched to the bank market and the agent bank works with the targeted banks and the company to answer questions and move those banks through their credit approvals. This process ultimately culminates in a successful closing and funding of the company’s multi-bank syndicated credit facility.

Ron Majka is a senior vice president and manager, loan syndications for FirstMerit Bank. Reach him at (330) 996-6446 or [email protected]

How Terry Cunningham broadened EVault’s niche by changing its story

Terry Cunningham, president and general manager, EVault, A Seagate Co.

Terry Cunningham knows that you need to have a compelling story for potential customers if you want their business. So when he joined EVault, A Seagate Co., around three years ago, his first objective was finding out how well the company’s story resonated with its customers and its 400 employees.

“We spent of time looking in the mirror and saying, ‘Well, would you buy it, and if not, why not?” says Cunningham, the president and general manager of EVault. “What’s not true about it? What is it that the customer would say, ‘I don’t really buy that story and here’s why’?”

Often, the problem isn’t that you don’t have a compelling story, but that you’re not communicating it correctly. Cunningham realized this was the case at EVault, which provides online backup and disaster recovery using cloud-based systems.

“So they had the right idea — the previous generation of the company,” he says. “It just wasn’t told in a way that had a broader market appeal.”

At the time, the company was serving only a small niche of industries that were legally required to backup their data anyway. But Cunningham knew that there was an opportunity to communicate to more consumers and markets that the cloud was a better way to handle their data protection and disaster recovery.

So how do you go about broadening the appeal of your story? Cunningham says the first step is floating the idea with people who may not think that they need your product.

“You begin with getting to the prospect that isn’t compelled buyers or compelled markets,” he says. “Go beyond the regulated industries that are required to do it and get to somebody that doesn’t care.”

Even if they seem unenthused at first, if you can open up a dialogue you will probably be able to identify some pain points.

“So now we get to the prospect or customer that at first doesn’t care that much because he thinks everything is OK, but then in the conversation, you discover that there are some challenges that they’re facing,” Cunningham says. “So OK, what’s the first problem you’re trying to solve, … what’s the second problem you have to solve … and so on.”

As you find these pain points, you can walk the customer through what a new solution might looks like and how a new story could meet them.

“Then it’s the usual sort of discovery process,” Cunningham says. “Let’s say we did have all of this. How much would you pay for it? When would you do it? What are all the other issues?”

Using this feedback, the company has been able to retool its story with pricing, packaging and other specifications that reach a broader spectrum of consumers. Now, Cunningham says the key to growth is being able to tell that story in a way that is simple and memorable.

“The early stage of that is to get out and tell the story and tune that story in the simplest possible way so that people can retell it,” he says. “If I give you the pitch, can you turn around and give it to somebody else easily?”

To help employees communicate it effectively to others, Cunningham regularly travels around to the company’s different offices to talk about the new story and why it is significant.

“The ultimate goal here is to communicate a story that gets told and retold by others, and we don’t have to keep doing all the heavy lifting,” he says. “If this is a better way, then eventually the world adopts it as proof that is really is a better way. You need everyone in your company to be able to communicate the story passionately and with the same enthusiasm.”

How to reach: EVault, A Seagate Co., or (877) 382-8581

The next best thing

When Terry Cunningham goes out to dinner, he loves to eat at restaurants that have paper on the table. That’s because when the whiteboard is out of reach, he has a spot to sketch out the next great idea for his technology business.

“They used to deliver crayons for the kids, now they deliver crayons for people like me to draw pictures while we’re talking about something,” he says.

As you continuously recast the story of what your business means to customers, you always want to be asking yourself, “What’s the next step?” even if it means sketching out the plan in Midnight Blue.

“[It’s] what’s changing from our customer’s perspective and how does it affect us to make sure that we’re not becoming irrelevant without even knowing it,” Cunningham says.

“There isn’t a technology company on the planet that isn’t sort of assessing where they’re at because the world is changing very quickly. So they’ve got to sort of reassess and figure out what the customer, target or prospect is looking for today.”

The key to long-term growth is to consider what the customer or the market is saying today, but never stop looking forward and innovating.

“I see a lot of companies and people I’ve worked with just chase the current model or market and they basically end up saying ‘me too,’” Cunningham says.

How Nick Fortine expanded his sales force while cutting back in operations to set up long-term growth

Nick Fortine, president, CSC Worldwide's Retail Specialty Group

Nick Fortine had to face a 40 percent drop in business as the retail sector put on its capital expenditure brakes in 2009.

Fortine, the president of CSC Worldwide’s Retail Specialty Group, which makes fixtures such as fitting rooms, display walls and cash register stands, was startled, but he knew he had to act soon.

“I was particularly surprised by the level at which capital expenditures stopped in the specialty retail sector,” Fortine says. “We had to create a strategy rather quickly based upon our new reality.”

Once Fortine examined the landscape, he made a bold decision to downsize personnel but to invest ― by adding people ― to the sales team. The company hired a handful of sales associates at the time it was laying off an equal number on the operations side.

“At the beginning of ’09, we knew the future was far from certain,” he says.

“We also knew that if we took our foot off the gas on our selling efforts, our pipeline would quickly dry up.”

Fortine knew that in many businesses, including fixture manufacturing, relationships with prospects and opportunities to sell usually take from several quarters to years to develop.

“So when spending picks back up, you need to have new opportunities queued up,” Fortine says.

In the meantime, when the dust is settling, it’s time to get started with your new strategy.

“As a leader during periods like these, first of all, your team needs to know you have a plan,” Fortine says. “Then they need to understand the plan, believe in the plan and buy in to the plan. They need to know that you are a part of a plan. You are there to support and assist them and to successfully execute that plan.

“A natural result of adversarial times in a workforce is tension, fear, doubt and uncertainty about the future,” he says. “During periods like those, open and frequent communication about the state of the business, the strategy, the goals and measurements against those goals is really critical. In fact, it’s always critical in a business, in good times or bad.”

A key factor is to make sure that everyone understands the steps you are taking to move the business forward given the environment.

“People are much more effective at doing their jobs when they know that they are aligned with the overall goals of the company,” Fortine says. “People perform much more effectively when they are not running scared but rather when they feel like they are empowered to go make a difference in the business. That is the biggest challenge and how you overcome it is by making sure that the people left truly understand what their role is in turning this situation around.”

You need to be positioned to find and win new opportunities all the time.

“While the economic environment is still unpredictable, you have to keep selling throughout,” he says. “You need to be positioned to find and win new opportunities all the time. When the market experiences the inevitable upswing that will come in the future, and those levels of spending return, you will be very confident in your position to take advantage of that.”

While the new sales representatives were getting their feet wet, Fortine was coaching the remaining employees on the new strategy to keep selling and to do more with less. It was critical for them to understand their new roles.

“We needed to explain that if we wanted to sustain our business long term, you don’t do that by laying off sales people,” he says. “You’ve got to always be selling.”

While this wasn’t a company culture makeover, Fortine felt it added a new dimension to the culture.

“I really believe it changed us culturally,” he says. “Your associates should really learn to think creatively about new approaches to managing the business. You have to continually ask yourselves and challenge each other, ‘What can we do to make this better?’ and ‘What can we do to make this easier, more economical, take less time?’”

How to reach: CSC Worldwide, (614) 850-1460 or

Recreate success

Recreating positive sales and service experiences is an effective way to add to your bottom line ― once you know your strengths and weaknesses.

“You grow by continuously finding ways to do what you do more effectively,” says Nick Fortine, president of CSC Worldwide’s Retail Specialty Group. “You become more honed in doing what you do best.”

The best way for you to hone your business performance is to review the customer satisfaction level.

“Your clients will be very clear about how they believe you are doing,” Fortine says. “Continually ask them. If you are growing, if you’re profitable, and if your clients are happy, you know you are doing the right things.”

You should also believe also that your strength is your domain knowledge in the market.

“Knowing what it takes to pull off a world-class product rollout and translating that knowledge into exceptional service and program results ― that’s your differentiation in market,” Fortine says. “Believe that you do that as well as anyone in market.

“Spend all your time trying to recreate those success patterns by finding opportunities and serving more of them. Become really focused at what it is you do well and knowing what it is you don’t do well. Spend your time concentrating on just getting better and better at what you do really well.”

Talent management solutions

Sheryl Dawson, Executive Partner, Talent Strategies Group, a Division of CPI Houston

The largest and fastest growing career and talent management partnership, Careers Partners International (CPI) is a global talent management organization comprised of 70 partners with 1,500 consultants operating in over 200 locations across 35 countries. As a CPI partner, CPI Houston offers local expertise and a global reach to companies large and small.

For over 25 years, CPI Houston has been helping Fortune 500 and many smaller companies optimize their bottom lines through talent acquisition, development and transition services. In contrast to other firms that provide off-the-shelf programs, CPI’s approach customizes talent management solutions for improved results.

Smart Business sat down with Sheryl Dawson, Executive Partner with CPI Houston and Talent Strategies Group, a Division of CPI Houston, to learn more.

What are some of your biggest business challenges?

Having been in business for over 25 years, I have found that one of the toughest challenges has been navigating the changing landscape of our business, especially during difficult economic times. Talent management consulting has undergone dramatic shifts with the impact of changing workforce demographics, globalization and technology. Expanding and altering our various practices to respond to the needs of our client companies in acquiring, accessing, developing, retaining and transitioning talent has been an ongoing process.

Strategies employed to address these challenges include:

  • Becoming a partner in the fastest growing global talent management consulting organization in the world with over 200 locations in 35 countries.
  • Building a team of top coaching and consulting talent to deliver best-in-class services.
  • Partnering with innovative talent management technology companies to support our clients’ talent strategies with top rated products.
  • Developing innovative solutions to “right now” challenges our clients face.
  • Partnering with our clients to ensure their business needs, unique requirements and challenges are met and expectations exceeded.
  • Remaining vigilant to developing economic, business and talent management trends that impact both our clients’ and our business, then adapting accordingly to ensure a competitive advantage.

Finally, we have created our brands to best reflect our values of integrity, high quality, commitment to our clients and optimal results. Demonstrating our value proposition to clients is an everyday goal.

How do you drive innovation?

Innovation is the life blood of any successful organization and it is a passion of mine. We are known for creating custom solutions for our clients using a blend of traditional and technology-driven learning and development resources. While innovating is serious business, for us it is also fun! I recall years ago, long before cloud technology, that we developed a “virtual” outplacement solution to complement our highly personalized programs. Today while major outplacement competitors have adapted technology as the primary delivery mode, substituting personal coaching with virtual online tools, CPI retains a coach-centric model of delivery that combines the best of both approaches.

In all aspects of talent management, we partner with organizations that are leaders in SAAS solutions such as SuccessFactors and Orca Eyes. We also utilize Harrison Assessments, a best-in-class assessment for the entire talent management cycle from recruiting to development and succession planning. Our forte is identifying and creating the best solutions and applying them to our clients’ unique requirements for optimal results.

What is a lesson you’ve learned in business?

One of the lessons I have personally learned is that I cannot be “best” at everything. It truly takes a team to deliver the best solutions. One of my greatest privileges in consulting is the opportunity to work with highly talented consultants and coaches. The old adage that our most important resource is our people is by far the greatest truth for a consulting firm. Without our experienced coaches, consultants and trainers, we have little to offer. Even our technology solutions are developed by extremely experienced and talented people. Over the years, I have focused on developing a network of highly talented consultants and creating an environment in which they can do what they love and what they do best. Having the right talent, at the right time, with the right solution for the right client is what I do best. Rather than trying to be all things to all people, I partner, collaborate and innovate to present the right solution with the right delivery team to achieve our clients’ goals.

How has your organization impacted your community and regional economy?

Our impact on the community and regional economy has been significant over the years. As a talent management consulting organization, our business is people. We directly impact the lives not only of those employees whom we personally coach, but their families and their entire organizations as well. We help our clients find new jobs and careers, advance their careers and become better leaders. We help organizations develop talent management strategies that optimize their engagement and retention. We help communities by enabling their population to find their passions, achieve their career goals, provide for their families, become more productive employees and entrepreneurs, and improve their leadership capacity.  That adds up to an immeasurable contribution for over 25 years.

How do you provide value to your clients?

Our value proposition is constantly changing and adapting to our clients’ needs, requirements and business goals. What sets us apart is our commitment to adding value at each step of the consulting engagement. From identifying needs, to assessing solution alternatives, to delivery, we seek to differentiate our services and products with strong relationships of trust, innovative solutions, high quality delivery, and measurable results. We take pride in our long term client relationships and repeat business.

How do you go “above and beyond” for clients?

Going above and beyond is not merely a slogan for us — it is a commitment. Our philosophy of customer service is that we want our customers to be our best “sales force.” We deliver every assignment with the goal of having every client be willing to recommend us to their closest colleague or friend. We guarantee our performance will warrant the trust and confidence placed in our extraordinary team. It is great to get a generic reference, but when we receive a direct referral we know we have gone above and beyond for our client and that is the best reward for a project well done.

Sheryl Dawson is an Executive Partner with Talent Strategies Group, a Division of Career Partners International (CPI), Houston. She can be reached at [email protected] or (713) 784-3197.