Peanut butter and jelly. Nuts and bolts. Lennon and McCartney. Love and marriage. What do all these things have in common? They represent great partnerships — things that go together, like, well, a hamburger and fries (when I’m not on a diet, of course).
Great partnerships epitomize the concept of the whole being greater than the sum of the parts. Vanilla ice cream is great, right? And who doesn’t love an ice cold glass of root beer? But put the two together and you’ve created an American classic: the root beer float.
Business can be like this, as well. Your company may be doing fine, but perhaps it can do even better with the help of a well-chosen partner.
After many years of being an independent businessman, I’ve followed my own advice and taken on a partner for the first time ever.
I’ve always felt that to be successful, I had to genuinely believe in my products, so it’s safe to say that my high hits-to-misses ratio was precisely because I considered them all to be labors of love. The Gazelle, Body-by-Bison, Cheeks footwear — they’re like my children in many respects. Still, there are limitations to what one individual can do.
Look to expand
I’ve wanted to expand the reach of my products for quite some time, and the financial resources that a new partner brings are certainly a critical component to achieving this goal. However, the scope of the endeavor also means the partner that I choose must be able to provide more than just cash; they must understand the business I’m in, backward and forward.
Look at what a partner can bring to the table to supplement your strengths. If I approach things intelligently, I can work with my partner to get the right buyers with negotiation skills so we can source products at the best possible prices in order to make a decent profit.
Of course, having a partner who is also willing to put the money up to buy the products is also key because of the importance of having an equity stake in what you sell beyond just collecting royalties.
What makes someone a good partner may vary depending on the business that you’re in, but it’s critical to understand that a true partner contributes more than just money to the venture.
Decide if a partner is a good fit
At the end of the day, the decision to take on a partner will hinge largely on what you determine to be your ultimate goal for your business.
For me, at this stage of my life, it’s about expanding the availability of my products internationally and to broaden my retail distribution channels. Some of it is driven by my desire to be the best I can be — but it’s also fair to say that I’m looking at monetizing the value of my trademarks, copyrights and patents so that there’s a tangible value to the company that can be sold someday.
The thought of giving up 100 percent ownership and control of your business to have a lesser share might be difficult at first. I admit it, I like calling the shots. But I also know that I can’t do everything at that level. The key is to focus on the big picture and try not to let your emotions get in the way of success.
Don’t let anyone tell you differently — nobody wants to run a company forever. And if you can build your company up to the point where it’s functioning well and is highly desirable, there’s a great deal of satisfaction in that, not to mention a nice pay day, when you can relax and enjoy the fruits of your labor — especially if they’ve been labors of love.
Tony Little is the president, CEO and founder of Health International Corp., and executive chairman of Positive Lifestyle International. Known as “America’s Personal Trainer,” he has been a television icon for more than 20 years. After overcoming a car accident that nearly took his life, Little learned how to turn adversity into victory. Known for his wild enthusiasm, Little is responsible for revolutionizing direct-response marketing and television home shopping. He has sold more than $3 billion in products bearing his name. Reach him at email@example.com.
Why let a lack of staff or resources curtail your expansion plans, when the expertise you need to develop new markets is just around the corner. Business school students have the ability to conduct research, assess opportunities and develop comprehensive marketing plans, and since they’re supervised by faculty, you don’t have to spend a fortune to tap some great business minds.
“You don’t have to hire additional staff or expensive consultants to solve business problems, when students and faculty are capable of doing the work for a fraction of the cost,” says Dr. Terri Swartz, dean and professor of Marketing for the College of Business and Economics at California State University, East Bay.
“Instead of shifting projects to the back burner, tackle them by leveraging the resources at your local B-school,” says Luanne Meyer, director of the Business Opportunity Program at California State University, East Bay.
Smart Business spoke with Swartz and Meyer about the advantages of developing a partnership with a local business school.
Why should executives consider partnering with a local business school?
Swartz: Student projects provide companies with the opportunity to develop the work force of the future and evaluate prospective employees, without incurring the managerial responsibilities and costs of a formal internship program. We help company representatives scope out the project, while course professors guide and supervise the undergraduate and graduate students during the assignment. The concept is similar to the tried and true programs used in teaching hospitals and dental schools, where students gain hands-on experience under the close supervision of faculty experts.
Meyer: Busy executives like the fact that they have access to our faculty brain trust, so they can hear about the latest marketing trends or consider another solution to a challenging problem.
How do student projects benefit all parties?
Swartz: Class projects give business students the chance to augment their classroom studies through experiential education, so they hit the ground running when it’s time to enter the job market. At the same time, the Business Opportunity Program gives the university the chance to partner with local businesses, share faculty expertise and give back to the community.
Meyer: Companies have limited time and resources, so it can be difficult to source the right interns or freelancers and shepherd them through a complex project. But the program office does the legwork by evaluating your needs and connecting you with a faculty adviser who has the right experience and knowledge to manage your project.
Are some projects more appropriate for students than others?
Swartz: The students work on pricing and positioning projects, product launches, opportunity analyses and marketing communications plans and they even find solutions to human resources or supply chain issues. Projects typically last from two to nine weeks and are often divided into phases, so client partners can monitor the team’s progress. For example, our students have developed recruiting strategies for the FBI and helped Lawrence Livermore Labs develop a plan to commercialize one of its licensed technologies.
Meyer: Many projects involve the development of new revenue streams for companies in both the non-profit and for-profit sectors, and through our entrepreneurial studies program, we often help small businesses find innovative ways to expand. For example, we are currently helping a small detergent manufacturer reposition its product for the Latino market by designing new packaging, creating a new message and developing a comprehensive marketing campaign. We can help companies use social media to reach new customers, develop a marketing database or lower costs by utilizing cutting edge technology. In fact, our students can even lower the cost of using a major consulting firm for marketing projects by conducting some of the background research or designing a portion of the program.
How can companies work with B-schools to develop talent pipelines?
Meyer: Client partners have numerous opportunities to interact with the students during a project, which gives them a chance to assess their capabilities and gauge their interest in future employment. For example, a company representative usually addresses the class before each project in order to provide background on the company and articulate its objectives. In turn, students prepare a proposal, map out the specific milestones and timeline and state the need for client support and involvement during the project.
Swartz: The professors align students with projects that match their interests and talents, which increases the chance that the parties will end up working together in the future.
What’s the best way to initiate a mutually beneficial relationship?
Meyer: At CSU, businesses can simply contact the Business Opportunity Program office to initiate a dialogue and assess whether we can meet each other’s needs. We typically need a few weeks’ lead time to scope out a project and get it on the schedule before the start of the quarter.
Swartz: We ask our client partners to cover nominal expenses like office supplies or occasional meals and transportation costs for the students, and we certainly appreciate reasonable donations. But all in all, student projects are a great value when you consider that you’re gaining access to our faculty brain trust and discovering a future star performer during the process.
Dr. Terri Swartz is the dean and professor of Marketing for the College of Business and Economics at California State University, East Bay. Reach her at (510) 885-3291 or firstname.lastname@example.org. Luanne Meyer is director of the Business Opportunity Program at California State University, East Bay, www.csueastbay.edu/businessopportunityprogram. Reach her at (510) 885-7135 or email@example.com.
Tom Fricke’s resale cartridge business is part of a multibillion-dollar global printing industry.
Fricke, who has been CEO of Cartridge World Inc. since 2008, has helped his company expand as the largest global dedicated retailer of ink and toner cartridges by taking advantage of the industry’s tremendous growth to build out franchises in new and existing global markets. Operating in 65 countries and growing, Cartridge World generated 2010 revenues of more than $160 million under Fricke’s leadership.
Smart Business spoke with Fricke about how to sustain long-term corporate growth by finding the right business partners and having a responsive leadership style.
What is the challenge of finding good partners in a fluctuating industry?
Our business is changing, the challenges we face are changing, and that change is consistent with the vendors, as well. I think that the biggest pitfall is you find vendors that are right today but aren’t going to be right in a year or two years from now as the evolution of the industry continues. So the biggest thing we’ve looked for is finding those kinds of vendors who are going to be able to change with us. There are some vendors who may have been great today but just weren’t going to be right for tomorrow. I think you are constantly trying to look for those who have the same mindset and the same approach to the future as much as today.
How do you decide who will be the best partners for growth?
The best way to do it is to spend a lot of time with them. I like to get out and meet with as many of my partners as I can. I like to be as open and forthright with them of the challenges we face and the challenges that we’re considering as we go forward. I think that kind of dialogue and that kind of personal relationship is critical as you really start working through your suppliers.
We like to be demanding of our vendors. We like to be fair. We want to make sure that they’re the right kind of partner that has similar strategies that we do. We like to them to be technically very capable. We like them to be very responsive, and we want partners who are going to be as supportive and focused on the franchise network as we are. The best way for us to make all those assessments is to be as interactive with them as we can. So if it’s not me, it’s the local, regional teams or management teams. We like to spend as much time with our partners as we can to make sure that we understand them and they understand us.
How can a leader facilitate a culture that is responsive to change?
To me the secret is you always try to find the balance. … You do what you have to do in order to operate in a new environment, but you also have to be patient. You are struggling between being demanding and being patient. You need to be a perfectionist, but you also need to let people know that it’s OK for them to try new things and make mistakes in the process of making it.
The capabilities of a leader really have to be a function of the environment in which they are operating in, the challenges that they have in front of them, the nature of the system they are dealing with and the business that they are in. I think if anything the leader needs to be multifaceted, because you really need to try and get a feel for all of that. Your style needs to flex and change. It’s really that ability to get in and sense what the business needs, what the people need and provide whatever leadership is needed.
How to reach: Cartridge World Inc., (510) 594-9900 or www.cartridgeworld.com
When it comes time to search for an IT consulting partner, there are a lot of areas that you should consider before selecting a firm. According to Zack Schuler, founder and CEO of Cal Net Technology Group, it takes a specific skill set to understand and address the technology issues that businesses face.
“Over the years, we’ve taken over from sub-standard providers, and I’ve seen some pretty bad work that our clients have paid a lot of money to get done,” he says.
Smart Business spoke to Schuler about how to choose the right IT partner for your business’s needs.
How can business leaders best approach the process of finding the right IT firm?
In my experience, there are six things to look for when selecting an IT consulting partner:
1. Years in business. I’ve seen a ton of ‘fly-by-night’ IT companies. They usually start with a very technical owner, who has difficulty hiring and managing good people, and are out of business within three years of getting started. When looking at years in business, it is important to see whether or not the company survived the last recessions. For example, if they started their business in the ’90s, they’ve been through the dot-com bubble, as well as the latest recession. If they survived one or both, that is a good sign. My recommendation: if they’ve been in business less than five years, I would steer clear.
2. References from your industry. Even though many of the IT systems are the same across industries, there are some industries that have their idiosyncrasies. For example, with accounting firms, an IT provider familiar with that industry would plan upgrade projects in November. Then, between the Christmas holiday and April 15th, they wouldn’t make any changes unless absolutely necessary. And while they might not be experts in tax accounting software, they have enough experience with the packages to know when to call the software vendor when they run into an issue. My recommendation: hire an IT firm who can provide references in your industry, and call those references.
3. Industry certifications. IT is one of those areas where you don’t need any sort of minimum certification to practice. It’s like hiring a contractor without a license, or a lawyer who hasn’t passed the Bar. Because of this, it is important to see if the companies themselves have industry certifications. This entails their engineering team to have personal certifications, among other things that the company has to do. Also, check to be sure that their certifications are current. For example, they could have been a Microsoft Gold Certified partner two years ago, but haven’t qualified this year for the new requirements. My recommendation: look closely at industry certifications when selecting a partner, and make them prove their currency.
4. Strategic IT consulting. In today’s times, it’s relatively easy to find an IT provider who can patch your servers and workstations, update your anti-virus software, and fix your e-mail when it’s not working. These types of services have become somewhat commoditized simply by the fact that so many people can perform them. That being said, to find a company who can truly be a ‘strategic partner’ with your organization is another set of skills entirely. This would be a company who can, with your input, write a full-scale strategic plan around technology. They would be able to manage any other vendor you’ve got who provides a technological role, as well as track your IT assets, forecast your upcoming expenses, etc. These are duties typically involving an IT director or CIO, and you should have the expectation that a firm you work with, no matter your company size, should have these types of resources.
5. Number of employees. While even the smallest of IT organizations can have some very talented people, those talented people can’t know everything. It is hard to throw a number of people out there as to what the ideal number of people is. On the smaller end, somewhere between 15 and 20 people is a good number, assuming that they don’t have too many disciplines, nor cover more than a county or maybe two. You want to make sure the IT provider has great ‘back-office’ support (i.e. HR department that can hire quickly if they lose a key employee, good accounting department, etc.) as well as field personnel who are ‘local’ to your place of business, and have redundancy. In other words, if you have a ‘subject matter expert’ on your account who knows a specific piece of technology, you want to make sure that the IT provider whom you partner with has multiple experts on that technology as redundancy. My recommendation: ask how many employees they’ve got, and then go to their office to see their place of business. It’s an easy step if you are going to trust them with your IT
6. Hiring and retaining. The last and perhaps one of the most important aspects to inquire about is how they hire and retain their people. I would encourage you to read our August article, entitled ‘Your toughest hire.’ This article outlines how to hire a good IT person, and I feel as though IT providers should be placing these same standards upon themselves.
In terms of retaining, there is no harder employee to retain than an IT employee, and this can spell bad news for you if the company that you are partnering with is riddled with turnover. Every time an employee at your IT partner turns over, there is going to be some knowledge lost — it is likely the idiosyncrasies of your business, but sometimes, that can be a lot. I think it is important for you to ask them, ‘How do you retain your people?’ An average sales person might not know the answer to this, but any member within their management should have a good answer for you. My recommendation: inquire hard about hiring and retention processes.
Zack Schuler is founder and CEO of Cal Net Technology Group. Reach him at ZSchuler@CalNetTech.com.
Entrepreneurship arises from the strangest of places.
For Talia Mashiach, founder and CEO of Eved, her winding path began shortly after she accompanied her musician husband to a meeting at a hotel where he hoped to generate more referrals for his band.
“I have a technology background,” she says. “But I love thinking about business models. I had done some back-office work for his band, and he figured I could help with some ideas that would lead to more business.”
The meeting didn’t go as planned.
“I went with him and the hotel executive said, ‘Well, we don’t just want to offer bands. Our catering and event managers spend so much time manually handling logistics and dealing with these multiple suppliers that come in for an event, can you handle everything for us?’”
Mashiach didn’t know anything about the event business, but she did understand how to deploy technology-based solutions. “When I looked at the opportunity to aggregate all the individual suppliers and sell and manage them for the hotel, I really saw a supply chain play, which has been done in other industries, but not in Meetings & Events,” she says. “I couldn’t get over how manual and fragmented everything was, how many logistics between multiple supply chain members and how often things needed to change throughout an event. So we came up with this idea.”
Smart Business Publisher and Executive Editor Dustin S. Klein sat down with Mashiach, who was named to the 2009 class of the Ernst & Young Entrepreneurial Winning Women, and talked about the roots of innovation for her 30-plus employee organization.
What were the early applications you developed at Eved?
I saw a big opportunity for a global event portal in the long-run, but knew we needed to start with understanding the event industry, how the supply chain members worked together and what ultimately the client wanted. We needed to build our own service company to figure this out. We came up with a model in which we would put people in-house in the hotel, providing the client with a one stop shop when they came to a hotel.
We developed technology to communicate and transact between ourselves and the suppliers we bought from – florists, transportation companies, entertainers. We also created technology that enabled our sales people to view a catalogue of our suppliers’ products online and easily add items to a quick quote or proposal reducing the turnaround time to clients by an average minimum of 48 hours. Automated purchase orders and change requests took out the manual back and forth, saving thousands of hours in labor from sales and operations to finance.
We were able to manage an average of 1,800 event orders to our suppliers per month with one finance person and 25 people in sales and operations.
The hotels had become channel partners, so when their clients came to the hotel and were looking for something, they’d say, ‘Anything you need outside of rooms and food or beverage you can work with the expert team from Eved, who is on-site and works closely with our catering and event manager to create a great event.’ This model proved that with the right technology, even small one-off orders, like a single sedan transfer or VIP floral bouquet, can be profitable. For the first time, it allowed a company to service the client for their large event needs and their very small ones. This was a key service the client was looking for.
I’m sure this was eye-opening. What did you learn from this?
Through this experience, I learned a tremendous amount about the industry. How the markets and supply chain members work together. What clients are really looking for in an event service partner and the real inefficiencies that are experienced daily by this industry. We put a plan together to really scale this company. We created a global platform that would bring all the members of the event supply chain online to be able to communicate and transact through an online marketplace.
In 2010, we launched our global marketplace, Eved, and took the experience and technology and offered it to all members of the event supply chain to interact and transact online. Now anyone can sign up to automate their entire process – from proposal creation to purchase orders to transactions.
We are just finishing our beta and will offer online Event Galleries where event suppliers can create storefronts to sell their services online. Companies and individuals will be able to purchase all their small meeting needs online.
What do you offer in products and services for your clients today?
Eved is a B2B marketplace that allows members of the meeting and event supply chain to communicate and transact online. There’s about $150 billion spent on event services in the U.S. All of this is currently transacted offline by literally thousands of destination-specific small businesses that are involved in providing services for events – from ground transportation to restaurant reservations. Our cloud-based platform gives those businesses the ability to quickly and efficiently conduct business with each other. Whether a business is using our vendor management capabilities to search for a new supplier, or employing our online commerce tools to streamline the proposal, purchase order, invoice or payment process, The technology takes a lot of the manual labor out, significantly reducing the cost of sale. Eved is all about helping our clients grow, strengthen, and control their businesses.
How would you describe segments of clients?
We target all the members of the event supply chain – corporations and organizations that hold meetings or conferences, third-party meeting planning companies that are hired by corporations, hotels, destination management and event companies, restaurants, suppliers such as florists, entertainers, décor companies and transportation companies. We believe that the meeting, incentive companies and destination managemetn companies play a major role in the future of events and ensuring events bring measurable results to a corporation. Our technology enables these companies to provide more cost effective and new services to their existing corporate clients.
We were fortunate enough to have some great clients come on early and clearly articulate how our technology can help them work with their suppliers. When we met their expectations, they invited their global suppliers to join them on Eved, providing value for both buyers and sellers. This also helped us quickly populate that segment of the supply chain globally. We have now provided valuable tools for these destination management and event companies to streamline how they work with their suppliers. This creates new opportunities for everyone. We have engaged all of our early adopters and clients to give us their input and continue to help us develop technology that enables all members of the supply chain to reduce costs and increase sales. Perhaps most exciting about Eved is that you can streamline the way you do business with whoever you choose as long as both of you are on Eved. Eved creates the bridge.
What is an example of a business challenge that your organization faced and the solution you used?
What most people don’t realize is the magnitude of pioneering technology that will transform an industry. Many people assume that if they create the best technology, then people will use it. But it’s not just the technology. You have to understand and communicate how by using the technology your business can grow It’s not so much training – how to click, where to click and what to do within Eved – it’s much more about how you help these companies, especially small businesses, maximize the business opportunities Eved can create for them. One comparison could be what businesses thought of having a website when the internet was in its early stage. Some people bought into the vision early and got their websites going and created new business models around having this new technology. Others waited and were pushed to create a website because their competition had one. The early adopters created a huge advantage for themselves. Our clients can see the Eved vision, but we need to continue to help them understand how it helps their business. So it’s about reaching out personally, and working with them on how to use Eved to better change their business practices and grow their companies. Our future offerings will be continuing to introduce and evolve new technology that will help our clients grow their sales and cut their costs.
How do you consider yourself an innovative leader?
A lot of people realize the meeting and event industry is a good 15 years behind when it comes to technology. I think we are unique in our approach to incorporate the existing supply chain and enable them to better work with one another. I think the industry has embraced us because no one gets displaced. Everyone wins when they work with us. What is being cut out is all the no value-add manual labor that can be reallocated to grow one’s business. I also think we have earned the respect of some of the industry leaders because they appreciate our deep industry knowledge and innovative approach.
We’re in a unique situation. Either technical people see an opportunity in the meetings industry and want to build technology to solve a problem without knowing the ins and outs of the space, or they are familiar with the meeting industry but don’t know a lot about technology. So they outsource it, with instructions on what they want it to do.
As the founder of Eved, I was a technologist that spent six years in the trenches building an actual business in the meeting and event space. I have a thorough understanding of the pains of all our clients. I also understand what it means to own and grow a business and how valuable technology can be to achieve those goals. As a technologist, I can translate those pains and develop technology to solve them.
From an organizational perspective, how do you employ innovation on a day-to-day basis to keep the company on the leading edge?
We continue to encourage that through creating a culture of innovation. Celebrate new ideas and encourage people to take some risks. We have something called an innovation box where if you come up with an idea, we are going to celebrate it. Based on how much it impacts the company, you can get a monetary award. We also have brain storming sessions twice a month where we bring everyone together just to talk about an idea.
Is there a management style you use to spur innovation?
I definitely think there is. A lot has to do with how you make people feel when they interact with you. Are you open to a discussion? How available do you make yourself to those that don’t report directly to you? How do you react when someone gives you a suggestion to improve something? Even if you don’t like it, you don’t want to say, ‘I don’t like your idea’ especially in front of other people, or they will never bring you their next idea. You want to at least think about and consider the ideas that are brought to you. You may want to give them direction and (say), ‘Ok, well think about it a little bit differently, have you thought about xyz and come back to me.’
One of our strategies to foster innovation between people was to create a small contest. Everyone was assigned to do an innovative project that could benefit the company. The team that scored the highest got a spa day. It encouraged people to work together to create something new for the company.
What’s the greatest lesson you’ve learned and how do you apply that to how you run the company?
The greatest lesson I’ve probably learned is from a mentor who taught me that everything in life, but especially in business, revolves around your relationships with other people. Whether it’s managing people, building new sales, working with clients, or dealing with investors; it is crucial to take the time to understand the person as an individual, what is important to them and how do they get value from the relationship with you. I learned that focusing on the other person and adjusting my style for them is what will make me successful, instead of assuming that everyone else should adjust to me.
I have had the privilege over the last seven years to work with many different kinds of people; the hard working banquet staff at a hotel to a hotel general manager; CEOs of large corporations to owner-operated small businesses, strategic partners and investors. I have learned something different from all of them.
How do you think your organization makes an impact on the community?
We do a number of different things. As an entrepreneur you’ve got a limited amount of time, and the things I do, I want to be impactful. We have a philanthropy program in the company where we match donations. We also offer paid days off to volunteer. But personally, I am passionate about entrepreneurship and children’s education. I sit on the board of the Chicagoland Entrepreneurial Center – a great organization that fosters and support entrepreneurs in Chicago. I am also very involved with projects that involve innovating the way our children learn. It is also very exciting for me that Eved as a technology platform is impacting small businesses all over the world to help them grow their companies, add more jobs, cut costs and find new revenue streams.
What are your plans in terms of growth?
Eved is soley focused on technology. The event service company that we started as seven years ago is now called Access Chicago and a client of the Eved Platform. We need to stay very close to our clients and understand how we can continue to bring value to them. It is hard to transform the way you do business so we want to make the experience as easy as we can.
As a global event marketplace, we see tremendous growth opportunity. Event suppliers include tours, gift items, printing, signage, restaurants, special event locations, team building, concerts, and so much more. There are businesses that don’t even realize yet that they can sell into the event market. They just need a cost effective way to do it. Then you think about the fact that events happen all over the world. There are literally hundreds of billions of dollars that we want to streamline and aggregate on Eved.
How to reach: Eved LLC, www.eved.com