Interviewing Do’s and Don’ts

Interviewing Checklist For Employers-  Do’s and Don’ts

DO:

  • Be as casual in appearance as your company will allow
  • Be on time for the interview and apologize for tardiness.   Live on “Vince Lombardi Time”
  • Let the candidate sit where they want in the room
  • Set a comfortable mood in the room- ie. get a drink and offer one to your candidate
  • Discuss your core values, along with a personal story about how your company’s culture is driven by its values
  • Tell a story about your background and the background of the company
  • Bring in an employee on the team which the candidate will be working
  • Look him/her up on LinkedIn and social media-  learn something interesting about him/her to discuss in the meeting
  • Ask questions about his/her interests outside of work  
  • Ask a “wild” question ie.  “Describe your favorite dessert” 
  • Be conversational about examples, questions, and fact-finding
  • Ask him/her to discuss freely what they really want to contribute 
  • Give instant, respectful feedback  
  • Learn something based on your conversation with the candidate
  • Share something about YOUR personal life (if comfortable)
  • Explain “Day 1” if hired
  • Outlay expectations in a clear, concise manner
  • THANK your candidate for their time- multiple times in the meeting
  • Invite him/her to connect on LinkedIn and to your network

DON’T:

  • Make your candidate wait longer than 15 minutes
  • Ask him/her to “tell you about them”
  • Talk about how “busy you are”
  • Leave people hanging onto false hope of getting the job
  • Ask “canned” interview questions
  • Assume your candidate knows everything about your business
  • Assume your candidate isn’t interviewing with other companies
  • Take for granted the extra skills your candidate may bring to your organization
  • Leave your candidate waiting- if they aren’t “the one”, tell them right away
  • Send “canned” messages about your decision
  • Rely on a resume for all the important information about your candidate
  • Ask about politics, religion, or sensitive social topics

How to Avoid the “Garage Sale”

If you own a small business you’ve likely put in years of work and money into your business.  Your business is YOUR legacy.   Today more than ever your legacy is being threatened by a living organism that cannot be seen by the naked eye.  One that has created fear and anxiety among your customer base and has ripped small businesses down by the thousands.   Sure, you’ve survived recessions-  but have you ever survived a pandemic that turned political and psychological?  

The problem with today’s business climate is that NO ONE saw it coming.   We’re all urged to plan for the worst and have contingencies, cash reserves, and branding that will last.    If you were like many who didn’t plan for the plague, you might be thinking about selling your business right now.   If you’ve survived and/or are surviving, let’s discuss some ways to avoid where many are today:  Sell or Close.  There ARE ways to make an impact on the value of your business rather than make an emotional decision to call an auctioneer or traditional business broker (aka, the “garage sale”).

Let’s discuss a few of those ways-  specifically these are things we do for clients to increase value in the business.   These simple (and cheap) tips will help add value to your business if today you said “I need to sell NOW”.   We’ve even SAVED businesses by doing these things. 

  1. Dump useless inventory.  If you hold inventory and it has surpassed its natural life or you bought it anticipating a sale-   get rid of it.   There should be no “sacred cows” on your shelves-  it holds no value in a sale. 
  2. Clean house.  We literally mean-  clean.   Clean restrooms tell your customers that you are serious about health and safety.   Skimping on cleanliness will drive down the value of your business.  Take out the trash, present your products in an organized fashion on your shelves, cut the grass, weed your flower beds, and sweep the floor.   Curb appeal applies to business, too!
  3. Optimize Space.  Have you ever walked through a particular big box retailer and said “geez, if you are going to have 30 registers but they’re all closed, why are they there???”   So have we.   If you’re going to have a bunch of check out lanes, but never anyone there to man them-  how could you use that space more profitably?  
  4. Pick a successor.  There are SO many ways to do this-  and it costs you nothing.  If you have dedicated and loyal employees and customers, they’ll thank you for stepping out responsibly.   People have dedicated their lives and careers to YOUR business-  it will mean something to them to imagine a successor who will carry forward (and maybe improve) what you’ve built instead of selling to someone who will turn your property into the shiniest new apartment building. 
  5. Know your worth.   You’ll be happier if you look in the mirror today and say “I’m worth more than a fire sale of my assets, and so are my customers and employees”.    Capitalism rocks, we agree-  so use it to your advantage.   Don’t let someone come into your business and stick a number on it to the market.   If it takes an extra year to add some extra value, why not do it?  Explain to the leaders in your business what you’re trying to do.   Gordon Gekko can’t touch you if you don’t let him. 
  6. Creatively find capital.   Hire a utility auditor, sell your building (but keep the business), sell off useless inventory and equipment, or consolidate debt.   These are ALL ways you can keep your business going without losing everything.  

If after reading this you STILL want to call an auctioneer or traditional broker-  call us.   We can at least provide a referral or provide some very creative ways to get the most out of your business at the time of sale.

Rob Simon | Principal

Phone: (440) 590-5298

Email: rsimon@vendadvisors.biz

Company Culture & Value

Company Culture and Company Value:  Any Correlation?

What exactly is company culture?   For some it’s a fancy buzz word used to talk about in job interviews, and for others it’s a built-in value proposition for the business.

Your company’s culture definitely adds value to the organization. 

 Think about it like this-  would you buy a home for market value if the bathroom and kitchen were outdated, the back porch was falling, there’s some mold in the basement, the bedrooms are far away from the rest of the house, and the dining room doesn’t welcome your future dinner guests?  

Of course, you love the property, the foundation is solid, and the walls are stable.   Taxes seem high, but all in all, you’re wanting to make an offer.      Would you bid lower because of some cosmetic changes and updates that need to be made?

If you said “no, I’d bid at market price”, we should talk about some other things.  

What are some positive attributes of a company with a valuable culture?  Let’s break down a few that we immediately notice when performing our due diligence on a company.

  1. Attitudes of administrative staff–  We love to walk into your business unannounced and feel either welcomed or pushed away.   An outsider to your organization should feel welcomed even if it’s a cold calling salesperson dropping in.   Why?   Because salespeople are professional networkers.  They distribute their opinions among their contacts and will remember the mood expressed upon them when visiting your facility.  A positive response to a cold caller, even if it’s a smiling person at the front desk saying, “I am glad you stopped by”.    A smile at the front desk means your company values relationships, and that value trickles down.
  2. Attitudes of mid-level managers– When we sit down with your leadership team, we love to do it outside of the facility.    These are typically the ones who open right up and talk about if their ideas are heard and what their career path looks like.   A really great culture means that your mid-managers feel appreciated, are rewarded for ideas, and are empowered to lead their teams with an ample budget and can manage both up and down stream effectively.    That manager’s subordinates should then feel empowered by the boss to openly discuss the ideas of their staff. 
  3. Attitudes of the sales force– When we ride along with your sales team, we are listening for words like “the company definitely listens to me” and “I feel supported with training and marketing support”.   If we hear that, it means that R&D comes from sales, and that the company listens to what the customer is asking for.  A great culture will typically reward its salespeople for both performance and relationships, with emphasis on relationships. 
  4. Lack of silos–  Imagine driving through the country and seeing grain silos on the farms along the highway.   Each silo holds its own stock and isn’t concerned with the silo next to it.  That’s what happens in companies as they grow and age.   You end up with one person who knows everything about one topic, and before you know it, that person retires or exits, and you have no idea what he/she knew.   Additionally, he/she didn’t share information with others or document anything.  Happens all…the…time.  How do effective organizations avoid this?  Cross-training.   A great culture has cross-trained staffers in several areas of the business and can easily collaborate on multi-functional projects.   The value here is in how well teams work together, or if cross-training is required.  It also demonstrates how well the new staff will fit in with the legacy folks.
  5. Employee Benefits-  You don’t have to be Google, or put a pool table in the breakroom, but if you’re offering your employees some amazing benefits then you have built some good value.  Do you subsidize healthcare?  Maybe your retirement plan is top notch?   Or do you offer “paternity time” when a new dad has a baby?   Possibly you allow your employees to donate to a charity of their choice instead of pushing United Way every year AND match their contribution?  Do you have in-house daycare, offer assistance, or pay off your employees’ student debt?   These are all value-adds during a sale.
  6. Employee safety and security–    If your employees feel safe before, during, and after work, you’ve created a culture of safety and empathy.   Safety doesn’t mean you have a handbook or signs all over or host training.   It means you have a culture which does not tolerate inappropriate behavior.  If disrespect occurs, you have a distinct method of handling it.   Believe it or not, security isn’t something enough business owners think about-  but a new buyer will.  

If you’re looking to sell your business, then you’ve got to be aware of these issues which dramatically affect the final negotiated sales price.  We are looking for it, your investors want to see it, and your employees need to know they are cared for after the sale.   If you’re buying another business to expand, they’ve got to be aligned with your values.   If they aren’t, we can negotiate. 

Company culture means more to many when investing than the foundation itself.   To discuss this concept more, please reach out!

Cheers!

The Vend Advisors Team

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10 Ways to Grow the Value of Your Business

Whether Covid-19 has impacted your business or not, there are ways to improve the value of your business.  If you are looking to sell or just want to be running on all cylinders, these ten items will enhance your operations and will make you attractive in the industry and the community.    Not only is the value of the business increased, but profits follow suit with time after implementing these ideas.

  1. Invest in training programs for your people

One of the best things you can do is implement real training for your staff.  In today’s age, there are several sales management programs for salespeople, accounting systems training for your finance staff, and security training for your IT people.   If you do not have these staffers on your payroll and you do the work yourself-  fine-  then you should be furthering your education in each of these fields.   It is important for your staff (or you, the business owner) to be up to date on techniques used in today’s environment.   We grade training as high as maintenance programs on equipment (discussed later) when valuing your business.

2. Document processes in all departments and follow an ‘ISO’ outline for process management

ISO stands for International Organization for Standardization.   It’s a fancy way of saying “doing what you say you do”.   ISO certifies that a management system, manufacturing process, service, or documentation procedure has all the requirements for standardization.

Put clearer, it means your business follows a strict set of guidelines to document things like customer complaints (and how you handle them), maintenance logs, quality assurance, and inventory controls.

Even if you’re a small business you can document these things and follow your own guidelines along with an audit to ensure your staff is complying with operational guidelines.   ISO is an expensive investment- but some research will help learn the basics without immediately spending the money.

The bottom line is that ISO will help get your processes documented and reviewed.    It will also help you in the market, as most large companies won’t do business with a supplier unless they are ISO certified.

We care about documented processes in every department of your business.  If you don’t have documentation-  from employee handbooks to production controls- we will give you a noogie.

3. Buy a competitor’s business or similar operation

This is a great way to immediately gain value and market share in your industry.  If you’ve got some extra cash and looking to make an investment, why not grow by acquisition?   Acquiring another business can double your operations, and with the right staff in place you’ll be producing and hopefully selling more than you did.  Growth looks great to investors!

4. Clean up receivables balances

Cleaning up receivables (if this applies to your business) is a great way to show that you are a liquid company.   Having customers that honor their payment terms, and a system that proactively takes payments, tells any investor or banker that your business is strong in the cash game.

5. Clear excess inventory

Inventory can be a good thing until it’s a bad thing.    Depending on your type of business there are different ways to manage inventory.   Inventory is simply the quantity of raw materials, works in process, or finished goods that are waiting on the shelf awaiting processing.   Certain industries, such as non-perishables, can get away with some excess- but too much excess is tying up cash in the form of stuff on the shelf.  Only make what you need, and don’t order extra goods just because your vendor makes you a good deal this month.  We’ll ask “how do you plan to get rid of all of that product?”  If the answer is “I don’t know”…   noogie.   It counts against you when we need to add value to your business.  Have a yard sale, sell it on ebay, sell it back to your vendor-  don’t leave it on the shelf.

6. Update maintenance programs on equipment

When you buy a car, the best practices are to change the oil and rotate the tires.  Why not make sure that your equipment is kept up to date with all maintenance as prescribed by the manufacturer?   Maintenance keeps everything in line with warranties, as well as allowing it to depreciate properly.  If the equipment is valued at over $500, keeping a log of routine maintenance by a licensed practitioner will guarantee to any buyer that they are gaining equipment that works, and has value.   Remember, “an ounce of prevention is worth a pound of cure”.

7. Pay back debts

Pay the debts you can afford at higher interest rates than the returns on your investments.  That means  any credit card debt, personal loans, and unsecured debt owed in the company’s name.  This will remove notes payable and make your company more liquid-  an attractive characteristic to a buyer.

8. Have a financial audit performed and correct issues that arise

A financial audit isn’t just for publicly traded companies.  In fact, the goal of an audit is to test and stamp your financial reports for accuracy.   This credibility can go far when looking for a buyer as the due diligence process includes an intense review of your financials.   It could be expensive but budgeting for the expense annually will pay off years later if the IRS audits you, or if you’re trying to sell the business.  Lastly, the best practice is to have a separate CPA firm audit your books.  If the same CPA firm that prepares my reports is also auditing their own work-  credibility is of course lost.  

9. Review and upgrade systems where possible

Systems are a vital part of your business.   You (may) have a system for tracking sales, manufacturing process, human resources, IT, and accounting.  Your business may even be sophisticated enough to have an ERP (enterprise resource planning) system which ties all these together.   If you don’t have these systems it’s ok, but probably a good idea to implement one.   Nothing has to be wildly elaborate- many companies use Excel for a sales tool-  but we like to see systems in place.  Additionally, Quickbooks tends to be used by many small businesses today- which is fine for startups and microbusinesses- but at some point you’ll grow out of it.   Updated systems enhance the value of your business. 

10. Take out the trash

Both literally and figuratively, remove the trash from your office and operations.  When we go through a business to value it, we’re looking for the intangibles like culture, workplace safety, redundant processes, and things that just don’t make any sense.   If you have a management team that doesn’t get the job done, it may be time to upgrade.   If your people grumble about coming to work and don’t feel rewarded and motivated, we might have to make some changes.   Believe it or not, culture says a lot about your company-  and a satisfied workforce increases the value of your business.

If you or someone you know needs help, please reach out.  We’d love a conversation about how to implement any of these.

-Rob Simon | Principal, Vend Advisors

The #1 Ingredient in a Merger

People.

That’s right, it’s not about money, buildings, equipment, recipes, or products-  it’s all about people in a merger or acquisition.  

Why?

People run all of those processes.  Without people, and understanding the social and psychological issues within both the acquired and acquiring companies, the merger WILL likely fail.

Failure to recognize that a human pushes the button on the process that you’re acquiring WILL likely create bad feelings, could lead to sabatoge, and may even become an incurable cancer within the new business.   

So what do you do if you are either the buyer or seller in an M&A deal?

1. Be sure all processes in finance, operations, and sales are completely documented.
2. Align both organizations side-by-side and get to know the staff in each company responsible for key processes, including overlapping roles, vacant.roles, and/or people doing “double duty”.
3. Understand the accountability chart in each organization and how everyone reports to leaders.
4. Develop a clear plan to transfer knowledge from the acquired company to the purchasing company.
5. Create a project team to clearly communicate with team members of each organization as each step of the merger is completed.  
6. Align core people related processes- like HR handbooks, benefits, compensation, and reviews to be sure the new team is welcomed and acclimated.  

The more information the better, and transparency is key.   You’re buying a company because of the processes leading to additional growth for your current business.   Don’t be cut off at the knees because you didn’t think about the people!

Vend Advisors LLC and our sister company SharpCFO strive to deliver the most support when we are involved in a merger of any size.   We get people, processes, and product-  and our finance and operations brains are wired differently-  in your favor.  

If you or someone you know is thinking about buying an existing business, please contact us.   We have actual experience working in companies which were part of deals-  and we know how to help your people.