Phil Lanctot Jr., CEO of Morrisville-based NRI Data, has adapted his company to suit the times. Over the last five years, revenue at NRI, which provides equipment and services to the data centers of Fortune 1000 companies, grew from $18.7 million to $35 million through the acquisition of small companies that added new technologies and capabilities.
“It allowed us to sell products that, in the past, we were reluctant to bring to market,” Lanctot says.
Smart Business spoke with Lanctot about how NRI Data’s sales techniques have evolved and how he expands his company through innovation.
How do you grow NRI Data?
It’s hiring and acquiring the right people, more technical people. We picked up most of them via acquisition.
We also took our sales team from your traditional relationship-type guys, and they’ve become a lot more technically savvy over the last five years. They’re required to attain various certifications and product training, something that really wasn’t that common 10 years ago.
We wanted to have a situation where our sales rep could just walk into a room, and in five minutes, do what it would take an IT guy a couple weeks and a lot of trial and error to do.
I have an ad in CareerBuilder right now which says, ‘If you’re an IT guy with very good people skills or you’re a salesperson with technical scope, give us a call.’ Our technical people have to be comfortable giving a presentation in front of customers.
You’ve got to know your product, and you’ve got to have sales skills. Our technical people are pretty good salespeople, and our salespeople are pretty good technical people.
How do you expand your company through innovation?
We’ve positioned ourselves kind of like an incubator for new technology. An example would be a Bluesocket; that’s the center of our wireless security solutions. We just finished a five-day site survey over at Rider University. (Bluesocket) can’t go to a CompUSA, a CDW or a Dell and say, ‘Pick up our line.’ They’ll say, ‘How many millions are you doing right now?’ And (Bluesocket will say), ‘No we’re just getting started.’ They’ll say, ‘Come back when you’re moving some product.’
Even the big distributors, if you buy a computer product, whether it’s from CompUSA or Best Buy, a lot of those are coming from the same people that I would get; there’s a handful of major wholesalers that feed these different outlets. But if you’re new, you’re not going to get any shelf space. They’re not going to move your product.
They don’t want to carry a product that has no existing revenue stream. They’re going to put a product in their bag, and they’re going to want $5 million or $10 million right off the bat. So a lot of times, companies like that will go to an NRI.
This is something that’s kind of developed because new products usually aren’t developed by the big names. New products are developed by the start-up companies, and the big names buy them. We look for these companies, and these companies look for us, and we’ll take their product to market because we’ve been around for 30 years. We do have access to a lot of Fortune 1000 companies, so we can take an unknown product and introduce it and create some revenue streams in their target market.
They’d have a hard time getting into a UBS, GMAC, Comcast, Bank One. They kind of work their way into that. That’s usually a good revenue stream for us, too, because we’re walking into large companies and hitting them with cutting-edge products they haven’t seen.
How does consulting play a role in NRI Data’s growth?
I call it a solution with consulting packed into that.
Having everyone involved in the solution aware of what the big picture is, who the customer is, why they decided to go with the solution and what they’re hoping to accomplish is really important. If you’re in the middle of a big install, and you’re using a subcontractor who (says), ‘Hey, I don’t know anything about what this is. I just have my job here,’ that usually creates problems.
If someone has a bad experience or two with (larger technology companies), their relationship sometimes is so big, or they’ve got some kind of contract and are so committed to them, where (the technology company) can afford to screw up every now and then. We really don’t get that luxury. People do hire consultants to do what we do but usually the results aren’t as good. Someone might actually pay a consultant hundreds of thousands of dollars to come up with the same thing that basically we offer right out of the box.
HOW TO REACH: NRI Data, (800) 828-3333 or http://www.nridata.com
The key to success in liquidity management is to strike a balance that offers you easy access to your ready cash, while taking advantage of the rising interest rates. Where do you start? Sweep accounts are the easiest and most efficient way to manage the investment of your operating cash. A sweep account is a bank account from which, at the close of each business day, the bank automatically transfers amounts that exceed a certain level into an income-earning account or investment.
Your working-capital needs are taken care of, excess funds earn income overnight and, best of all, you don’t lift a finger. However, you may not be aware of the many ways to make a sweep account work for you.
Money market investments
Until recently, funds transferred to sweep accounts were usually invested in traditional money market investments, such as repurchase agreements or commercial paper. These short-term investments feature flexible maturities that react daily to changes in interest rates.
Other investment options may not react to interest rate increases for up to 30 days, making money market investments an ideal place to park funds on a temporary basis. The funds are swept from your account after the close of business and returned the next day, along with any accrued interest.
Money market mutual funds
While repurchase agreements and commercial paper remain a viable option, money market mutual funds have become attractive to businesses due to strong ratings and diversification. These accounts allow you to determine how much operating cash you need on a daily basis, and keep the rest in a flexible money market mutual fund account to continue growing.
Unlike traditional sweep accounts, the money remains in the investment account until needed in your checking account. Any cash above the account’s target balance is invested in the sweep account at the end of the day. The sweep investment balance is still available to the business, if needed.
If your business requires as little as $100,000 in daily operating cash, a sweep account may be quite useful. A low monthly fee is usually associated with sweep accounts generally less than $200.
You may choose to stay with the more traditional sweep accounts involving repurchase agreements or commercial paper, based on your investment policies and guidelines. Money market mutual fund accounts, however, allow for greater flexibility in investment type, including tax-exempt options and diversification.
If you’re looking for a short-term, but not day-to-day, way to manage excess operating cash, a direct investment may be a good option. Direct investments enable you to invest some operating cash in an interest-bearing bank deposit, a U.S. Treasury bill, commercial paper or short-term, tax-exempt municipal bonds.
These are generally 30-day to 90-day investments, with higher yields than traditional sweep accounts. Direct investments are more complicated and require more monitoring. They are appealing for businesses willing to take on a little more risk and that have at least $5 million to $10 million in assets to invest.
They are a good fit if you can identify this amount of expendable operating cash each month. However, if you redeem a direct investment early, there may be a risk that the investor could lose money.
While it may take some time to learn the complexities of each sweep option, it may be well worth it especially in an environment of rising interest rates. Call on your trusted financial adviser often, if necessary for more information about all of your options.
This was prepared for general information purposes only and is not intended as specific advice or recommendations. Any reliance upon this information is solely and exclusively at your own risk.
Denise Monahan is senior vice president and sales manager for corporate at PNC Bank, National Association, member of The PNC Financial Services Group Inc. Reach her at (856) 489-2972.
He succeeds Terry Kendall, who has led CIGNA International since 1999. Kendall recently passed away.
Hartley joined CIGNA in 1985. He has held several positions in the company, including responsibility for treasury and capital management for CIGNA International, serving as CEO of CIGNA’s Hong Kong operations and vice president of life operations in Southeast Asia prior to assuming his role as CEO of CIGNA’s Asia-Pacific region.
“Under Paul’s leadership, our Asia-Pacific operations have grown rapidly and CIGNA has become an acknowledged market leader in the region in providing innovative life, accident and health insurance products and services through affinity partners,” says H. Edward Hanway, CIGNA CEO.
Hartley is a graduate of the University of Sheffield & Hallam in England and is an FCA. He is also a fellow of the Institute of Chartered Accountants in England and Wales.
“I am confident that given Paul’s extensive experience, deep knowledge and leadership skills, he and his team will continue CIGNA International’s successful record of focused growth and profitability,” Hanway says.
FIRST FINANCIAL BANK
First Financial Bank promoted William DeFalco to first vice president and commercial lending team leader.
DeFalco will manage the group that develops and manages commercial and industrial business in Chester County. He joined First Financial Bank two years ago as a relationship manager in the Commercial and Industrial Lending Group. Prior to joining First Financial Bank in 2003, he worked with Republic First Bank and Mellon Bank.
He is a 1984 graduate of the University of Scranton, where he earned a bachelor of science degree in business management.
Monica Justice was promoted to vice president of studio operations at QVC. She is responsible for management of product central, the studio operations desk, backstage operations, image, broadcast design, post-production and graphics.
Justice joined QVC as an on-call fashion stylist in 1994. Prior to her promotion, Justice was director of studio operations, where she was responsible for the studio operations She received her bachelor of science degree in fashion merchandising from Philadelphia College of Textile and Science.
QVC also appointed Randy Ronning chief merchandising officer. He is responsible for merchandising, brand development and Internet. Ronning joined QVC in 2001 as executive vice president.
LITHIUM TECHNOLOGY CORP.
Lithium Technology Corp.’s board of directors promoted Andrew Manning to president and chief operating officer.
Manning had been the Plymouth Meeting company’s executive vice president since 2002 and its chief technical officer since 2003. He’s been a directors since 2004 and is a managing director of LTC’s Gaia Akkumulatorenwerke GmbH subsidiary, based in Nordhausen, Germany.
LTC’s board also appointed William Hackett chief financial officer, executive vice president and treasurer, as well as a board member.
The board also made Klaus Brandt an executive vice president.
Comcast Corp. appointed Diane L. Robina president - Comcast-Sony Networks, a joint venture between Comcast and Sony that will create new cable networks using content from the Sony library.
Robina is responsible for working with the board to determine the genres for the new networks and overseeing their start-up and operations. She is an elected member of the board of directors for New York Women in Film and Television.
Robina received her bachelor of arts degree from the University of Delaware.
Comcast also promoted Diane Dietz to senior director of public affairs and vice president of The Comcast Foundation. Dietz directs the company’s public affairs activities, including its national community investment and outreach initiatives. She also oversees The Comcast Foundation, which provides financial support for organizations and programs that work to strengthen the communities Comcast serves.
Dietz joined Comcast in 1996. She holds a juris doctor degree from Thomas M. Cooley Law School in Lansing, Mich., and a bachelor’s degree from the University of Michigan.
Stonebridge Bank appointed Russell W. Carlow chief credit officer.
He previously held positions including assistant vice president of Advanta Bank Corp., president and CEO of Bank of Chester County and senior vice president of Hamilton Bank.
No matter what industry you’re in distribution, manufacturing, professional services the livelihood of your business and the welfare of your family and your employees’ families depends on your ability to successfully market your company in the right way.
Whether your goal is to introduce your business to a broad audience, get that first meeting with a prospect, announce a new service offering or something else, a strategically crafted letter can be a very effective and inexpensive tool.
Many think a business letter is an add-on to the guts of a business package, be it a business plan, financial prospectus or a marketing campaign. Not true. A form letter is obvious at a glance, while a carefully constructed and targeted business letter hooks readers immediately and has them searching for more.
Here are six tips for producing a high-quality, effective business letter.
- Have a compelling opening. Get to the point right away. Too many letters beat around the bush before getting to the key issue. A good letter lets the reader know what to expect in the first sentence, and why it’s worth the time to continue reading. The most compelling letters open with a promise of a benefit or a solution to a problem.
- Use a postscript. Studies have proven that the part of the letter most often read (after the salutation) is the P.S. Unless the tone of your letter is completely inappropriate for a postscript, use one. These are best used as a reiteration of a key benefit or a call to action, such as “P.S.: Remember, with my service, your business can be more profitable tomorrow. Find out how by giving me a call at XXX-XXXX.”
- Set your letter aside for 24 hours after it is complete, and then reread and edit it. When looking at it cold, you will often find the message is not as clear as you may have originally thought. You also will be able to edit out repetitive or useless phrases, making it more direct and to the point.
- Read it out loud. Many business letters try too hard to sound intellectual but end up sounding aloof and incomprehensible. To avoid overuse of jargon, read your letter aloud. You may find that you can make changes to make it sound more conversational, which means you will communicate more effectively.
- Use emphasis. Help your readers find the key points by using typographical techniques. Use bullet points, underlined text, bold text, italicized text and combinations thereof to make certain points. But a little goes a long way. If too many words are emphasized, nothing is really emphasized.
- Be skippable and scannable. Make it easy for your readers to find the information they need. By putting your key message up front and by using typographical highlighting, short paragraphs and postscripts, readers should be able to easily navigate (skip and scan) their way through your letter for the information that is most relevant to them.
Mark McGuriman is in the marketing department of CBIZ Accounting, Tax & Advisory LLC and Mayer Hoffman McCann PC, an independent CPA firm in Plymouth Meeting, Pa. CBIZ, a publicly traded company and the 10th largest accounting firm nationally (Accounting Today), provides a wide range of assurance, tax and business consulting services to small and mid-sized companies. Reach McGuriman at email@example.com or (610) 862-2284.
D’Alessandro will lead United Way’s 60-member board of business and community leaders for a two-year term and play a major civic leadership role in the region. The board establishes the policies and direction for United Way, including setting the goals of the annual fund-raising campaign, and the strategy and priorities for funds invested in the community.
“I’m honored to be part of this important team of volunteers who are shaping the future of the communities where we work and live,” says D’Alessandro, who previously served as the board’s vice chair. “United Way is committed to building a better future by focusing on long-term goals of education, employment and self-sufficiency. I cannot imagine more important work than that.”
Before joining Sovereign, D’Alessandro spent 20 years with Main Line Bank. Prior to her present position, she was president of the retail banking division of Sovereign Bank for Pennsylvania.
D’Alessandro is also a board member of the Main Line Chamber and is involved in several chambers of commerce and community groups across the region.
DEVON HEALTH SERVICES INC.
Richard A. Longo joined Devon Health Services Inc. as vice president of network and client development. He is responsible for spearheading all network and client development efforts in Western Pennsylvania and West Virginia. Initially, he will oversee the development of a Medicare Advantage provider network in these regions.
Longo has more than 25 years of experience in health care management and strategic development. He has in-depth knowledge of physician recruitment and group medical practice administration, provider reimbursement, quality improvement processes, managed care, and integrated delivery systems.
Additionally, Mike Frick was hired as sales manager for product development. Frick joins Devon Health with more than 15 years of sales experience, including large territory oversight. He will oversee the sales efforts surrounding the Devon Health Clinical Trials and electronic prescription programs. He will also play a major role in the development and test marketing of future products.
Joe Tauber was promoted to vice president - human resources and support services of Keystone Helicopter. Tauber oversees recruitment and human resource operations at Keystone, as well as oversee Composite Technology Inc.’s human resources functions.
Keystone Ranger Holdings, Keystone Helicopter’s parent company, acquired CTI last year, and the company is in the process of standardizing policies and integrating benefits. Tauber is responsible for facility safety, environmental compliance, insurance, benefits and other support functions.
IKON OFFICE SOLUTIONS
IKON Office Solutions named Bruce Fiscus to head its sales and service operations in the Bay Area as area vice president. Fiscus brings 18 years of IKON sales and sales management experience to the position, most recently serving as director of sales in the Greater Los Angeles area. He succeeds Mark Bottini, who was promoted to vice president and general manager of IKON’s western region.
Fiscus began his sales career with Xtec in Philadelphia, which was later acquired by IKON. After six years of selling, Fiscus was promoted to sales manager. In 1998, he was promoted to director of sales for IKON’s Los Angeles area.
ACE USA INTERNATIONAL ADVANTAGE
Alfred E. Bergbauer was named senior vice president, ACE USA International Advantage. The ACE USA International Advantage unit provides international insurance products and services for U.S.-based businesses.
Bergbauer leads a team of international property and casualty underwriting specialists who are responsible for delivering international programs, specialty coverage and client services for U.S.-based companies with global operational needs.
Previously, Bergbauer was south region international practice leader at Marsh USA Inc. He also previously served as CEO of two insurance companies in Asia.
ACE also named John S. Scales vice president, underwriting, for ACE USA International Advantage. Scales is responsible for overseeing the underwriting function within the International Advantage unit and leads the growth of the custom casualty underwriting segment.
Scales joins ACE from Marsh USA Inc., where he was senior vice president, southeastern zone international practice leader. Previously he was regional manager at AIG WorldRisk, southeast regional casualty manager at AIU of North America Inc. and senior business development manager at American International Companies Inc.
GENERAL FIBER COMMUNICATIONS INC.
General Fiber Communications Inc. (GFC), a cable fulfillment provider, named Richard Martin chief financial officer. Martin, a CPA and a certified treasury professional, has more than 17 years of domestic and international financial management experience. His areas of expertise include strategic planning, turnaround management, mergers and acquisitions, internal controls and capital structure management.
Previously, Martin served as CFO for Strategic Distribution Inc. He has also held financial management positions within UPS.
The much-anticipated and highly publicized bill to reform the federal bankruptcy law -- the Bankruptcy Abuse, Prevention and Consumer Protection Act of 2005 -- was approved by Congress and signed by President Bush on April 20th. Although attention has been focused on its effect on consumers, the act contains many provisions that impact creditors in commercial settings.
The Bankruptcy Code recognizes the rights afforded by state law (the Uniform Commercial Code) to an unpaid vendor to reclaim goods sold to a buyer who is insolvent. Under the Bankruptcy Code, the vendor is entitled to exercise a reclamation right or receive certain compensation in the debtor's bankruptcy case, provided that the vendor complies with state law and certain notice and timing requirements.
Nevertheless, it has been very difficult for a reclaiming vendor to satisfy all of the reclamation requirements for a variety of reasons, including the fact that the vendor's rights in many cases are subordinate to the rights of the debtor's secured lender(s), and the time period to assert a reclamation demand was narrow.
The act affords some relief to vendors by enlarging the time period they have to assert a reclamation demand from 10 days to 45 days. A vendor is entitled to reclaim goods sold on credit to a debtor within the 45-day period prior to the bankruptcy filing, provided the required written notice is given. If the 45-day period expires after the bankruptcy filing, the vendor has 20 days from the bankruptcy petition date to assert a reclamation demand.
While this increases a vendor's chances of recovering its goods or, alternatively, receiving certain preferred status in the debtor's bankruptcy case, it does not entirely solve the vendor's problems. The vendor's claim is often still a lesser priority than the debtor's secured lenders' claims.
However, the act does grant the vendor an administrative claim for goods delivered within the 20-day period prior to the commencement of the bankruptcy case, provided that the goods were purchased by the debtor in the ordinary course of its business.
As a result, a reclaiming vendor may be more likely to receive payment on its claim because an administrative claim has priority over the debtor's pre-petition unsecured creditors' claims. In addition, as an administrative creditor, a reclaiming vendor may demand immediate payment from the debtor.
Prior to the act, a debtor had until 60 days after the date of the filing of the bankruptcy petition to assume or reject its nonresidential real property leases, though a bankruptcy court was permitted to enlarge that time period for cause. The intent of this provision was to place limitations on the time period within which a debtor could decide whether to assume the lease and remain in possession or reject the lease and surrender possession.
However, in practice, bankruptcy courts routinely extended the 60-day period, and in many situations, did not require a decision by the debtor until the debtor confirmed its reorganization plan. This extended period forced commercial landlords to wait long periods of time before the fate of their property was determined.
The act provides relief to landlords by imposing strict deadlines and time periods for assumption or rejection of nonresidential leases. Under the act, a debtor has, at most, seven months to assume or reject its nonresidential leases. If the debtor has not made a decision about its leases within 120 days of filling for bankruptcy, the debtor must show cause for an extension. Then, after another 90 days, the debtor may only assume the lease if it obtains the prior written consent of the lessor.
The act also affords landlords protection from the loss of rent during the seven-month time period by elevating certain amounts of the rent for a lease that a debtor assumes, but subsequently rejects, to an administrative priority.
Jami B. Nimeroff, a shareholder, and Magdeline D. Coleman, a senior attorney, are members of the Bankruptcy and Creditors' Rights Group at Buchanan Ingersoll. For more information on creditors' rights matters, contact Nimeroff at firstname.lastname@example.org or Coleman at email@example.com.
Two of the United States' most significant contributions to the world -- maximizing of the potential of capitalism and inventing jazz -- may not, at first blush, seem closely related.
But to Mathias Kirchmer, CEO of North American and Japanese operations for IDS Scheer, they're in perfect harmony. Like a jazz ensemble, each of the company's four managing directors operates within the general framework of the company's goals, but has plenty of room to elaborate on a theme.
Kirchmer, a jazz aficionado in a company full of the same, believes that the freedom to improvise is part of the company's formula for success.
"If you have a jazz band, it doesn't work like a symphony orchestra, where everybody gets sheet music and plays exactly what the conductor wants," says Kirchmer.
But the Berwyn-based unit of the German company hit some sour notes when it first reached North America in 1996. Few businesses were ready to accept the kind of business process management solutions that the company offered. Most potential American customers rejected IDS Scheer because it "wasn't made here" or because they didn't see the need for it.
The tune has changed in the last five years, says Kirchmer, because the company made a concerted effort to put its name and its ideas in front of industry analysts and academia, kept the research community up to speed with the company's progress and provided curricula to university business and IT departments.
Its big break came when it landed a deal with aerospace giant Lockheed Martin, a development that brought credibility and a prestigious reference.
Kirchmer spoke with Smart Business about how IDS Scheer overcame market resistance. after a slow start in capturing the U.S. market.
Why did IDS Scheer select Philadelphia as its North American headquarters?
First, our location is very well-suited to our business. It's very close to New York. Many of our customers in the financial area are in New York. Second, it's only an hour-and-a-half from Washington, and in Washington are all of our public sector clients, especially the Army and the Navy.
Another key area is chemicals and pharmaceuticals; many are in the Philadelphia and New Jersey area. It was also important that SAP America had their headquarters here, too, and we have a lot of collaboration with them, so it simplifies things by being close to each other. We have been working with SAP for more than 20 years; we have a lot of joint development and joint business initiatives that started in Europe and were later transferred here.
What was the source of the initial resistance to your IT solutions?
First, it was a philosophical thing. Business process management means that you don't just improve and optimize individual functions in an organization but that you check how things fit together and how you can improve business by improving integration.
For example, we would not just look at the finance department and then the shipping department, but we would check how an order goes from sales to production to shipping, and how can we make it faster? So that way of looking at things and analyzing and improving them is a bit more complex than people were accustomed to.
The supporting methods and technologies were not as mature as they are now. And the economic ups and downs of the last years helped us because they were very good motivation for companies to think about [business process management's] value. The real acceptance of the idea came when all the e-business hype developed; then, suddenly, companies had to talk to each other about how to work together and how to organize that work between companies.
So they were basically forced to talk about business processes. Suddenly, all these business process ideas were widely accepted and sought after.
How did you overcome that resistance?
When I came over here to the States almost 10 years ago, I had read the books by our founder (Dr. August-Wilhelm Scheer) and by Michael Hammer, an expert in business process management. I came here very enthusiastic and thought everybody here would work with our business processes.
It was really kind of a shock when I visited the first business prospect and they looked at me and said, that's a nice academic topic, however, don't waste our time with that; get this ERP system installed or get us some costs reduced, but please leave your business process topics at the university.
So we had to, in the first four years here, [do] a lot of educational groundwork, and we did that in three fields. On one hand, we started with organizations we thought would be receptive to that message and we worked on them to make them reference clients. The first in North America was Lockheed Martin. They are very engineering-minded, so they understood quickly that you can design and engineer your business processes just as you can design an airplane.
We started working with them and built them as a reference so that we could use that to enter other industries.
What are the other two fields in which you needed to educate people?
We started working very closely with industry analysts like Gartner Inc., Forrester Research, AMR and a half-dozen others, so they knew what we were about. They recognized very quickly our capabilities in our field. That's why Gartner has been ranking us for more than seven years as the clear market leader in the business process and design area.
Third, we started working with universities. IDS Scheer had been founded as a spin-off from a German university, so we had a natural touch point there. So we started floating this idea and approach to business process management in the universities.
Now there are 16 universities in North America that teach based on our ARIS [Architecture of Integrated Information Systems] architecture. So the combination of having the industry analysts aware of us and having the academic mindshare behind us, that was the basis for when, about five years ago, when the notion of business process management was generally accepted, we could benefit from all of this groundwork and suddenly, business just exploded.
In the last three years, in our core business, we have doubled our revenue every year.
Which industries are you most actively pursuing?
In the U.S., we have six industry segments where we are the most active. The first and largest one is consumer packaged goods. We have split it into food and beverages, consumer packaged durable goods and consumer packaged cosmetics, where we really have very specialized solutions.
Second, we have chemicals and pharmaceuticals. Third, we have pulp and paper and related industries, and fourth, we have the homebuilding industry. These four are where we offer process improvement and software implementation systems.
In addition, we are very active in the finance industry and in the public sector. In those areas, we focus more on the business process management and less on the technical implementation.
Which are has the most potential for business process management IT?
I think there's a huge potential in the financial area and in the public sector. In the financial sector, until about five years ago, they had so much money they could afford to be inefficient. They started inefficient organizations, they developed all their own software products, and now they're in a position where nobody can maintain those software products, nobody can improve the organization.
So that's a perfect field for us to enter. We attack that by explaining to those organizations our process approach and showing them how they can learn from other industries, especially manufacturing. Even banks and insurance companies are using more expressions that come from manufacturing.
Banks talk about 'loan factories' because they organize the way they create and provide loans just like a factory, or they talk about service engineering because you design a service just the way you would design a car or a machine.
How are you pursuing opportunities i n the mid-sized market?
We saw about three or four years ago that there were a lot of big companies and, of course, you can make a lot of money with them. But there are also lots of small and medium-sized organizations that have similar needs, just that they are smaller and have smaller budgets. But there are so many of them that it's worth creating a special approach.
We created a special solution for mid-market companies we call ARIS SmartPath that is a combination of software that can come from either Microsoft or SAP, some best-practice process service models and a service component. They get the business process management environment, they get the services needed to put that in place. So they get one fixed price for the whole package, and basically that helps them to move their business to the next level.
We have solutions that are consistent with our industry focus, so we have ARIS SmartPath for beverages, foods, cosmetics, one for chemicals, so we have very narrow industry solutions for those small and medium companies. They can basically leverage the same software and the same ideas that are available to much larger businesses.
How to reach: IDS Scheer, www.ids-scheer.com
However, as the old adage warns, "It's not a seller's market, it's a buyer's market." Therefore, it goes without saying that buyers primarily purchase marketable investments.
What is a marketable investment? Marketable means an investment that is in demand or saleable and capable of being marketed. As you consider placing your company for sale in the marketplace, does the term marketable apply to the business as it exists today?
So when is the best time to sell your business? When you're ready to sell it? Or when the business is marketable and ready to be sold? Privately owned or closely held businesses are sometimes considered unmarketable in that they lack an available and ready market or prospective buyers.
This is because, among other things, closely held businesses are not traded or registered on a public exchange.
However, closely held entities may be considered marketable from the standpoint that they provide an investment vehicle capable of generating acceptable future returns for an investor. Approximately 90 percent of businesses in the United States, including one-third of the Fortune 500, are not publicly traded.
A business owner contemplating the sale of a business should keep in mind that competition in the closely held marketplace is steep, and the pool of potential investors is much smaller than that available to publicly traded companies. Essentially, it is a beauty contest, and the business for sale needs to stand head and shoulders above other companies competing for a limited number of investment dollars.
How can this be accomplished? Through planning. Planning your exit strategy is a key variable if you ever hope to receive a desirable price upon the sale of your business. You must develop a plan, execute that plan, monitor the results achieved and continually modify the plan while charting your course to sale.
As a business owner, not only should you gauge the health of the business on a regular basis, you also should monitor its attractiveness with each strategic step taken toward exit enhancing that attractiveness to prospective outside buyers whenever possible. A business valuation is as important to an exit strategy as a scale is to an individual's health and diet program.
How can you possibly assess and gauge accomplishments without some means of measurement? Preparing to sell your business should be a planning regimen you adhere to in order to accomplish your long-term goals, whatever they may be. A
professional business valuation, conducted by an experienced, accredited valuation expert, allows for a business owner to execute a strategic plan and annually track the resulting impact of that plan on the value of his or her business interest.
Erin Hollis, AVA, is the business valuation manager for Accountancy Associates LLC, a related company of International Profit Associates. Reach her at (800) 531-7100 or www.ipa-iba.com.
Education: Moravian College, Bethlehem, Pa., bachelor of arts in accounting
Involvement: Board of directors, Direct Marketing Association's Educational Foundation
Whom do you admire most in business and why?
The ex-president of Rodale Inc., Robert Teufel. There is a guy who, over a 30-year period, took a small, quirky company and made it the most respected health and fitness publishing company in the world. He never compromised on products and he hired talented people and gave them space and authority.
What is the most important business lesson you've learned?
When I talk to vendors, I tell them I want a fair price but I want to make sure they make money on our business because I want to keep them engaged and happy.
What has been your toughest business challenge?
Working in an industry where you have a declining market. It is much more challenging when the wind is at your face than at your back.
Describe your leadership style.
Hire good people and give them goals and room, and stay in touch.