September 2015 Office Technology by Business Technology Association

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CONTENTS Volume 22 • No. 3

FEATURE ARTICLES 10

Managed IT Services Increasingly seen as a key diversification strategy

FEATURE ARTICLES Considering an Acquisition? How to achieve success & avoid the pitfalls

by Jim Kahrs PPMC Inc.

by Brent Hoskins Office Technology Magazine

As our industry continues to evolve and mature, business growth is becoming more difficult to achieve. Because of this, many dealership owners have considered acquisition a key growth strategy. Though this can be a great move when handled properly, it can lead to big losses if not. This article will provide some insight for those considering an acquisition and assist in formulating a plan that will help you achieve success and avoid the pitfalls that can lead to a bad outcome.

Are you actively working to diversify your product and services portfolio? Like it or not, current document output trends, the changing workforce and ever-evolving technology are collectively providing compelling reasons for today’s dealers to seek additional revenue-generating opportunities in order to ensure continued growth. For many, managed IT services has been embraced as one of the key strategies to achieve that growth.

Capture the Magic BTA West hosts district event in Las Vegas

COURTS & CAPITOLS Classifying Workers Use these six factors to ensure compliance

by Brent Hoskins Office Technology Magazine

BTA West hosted its annual Capture the Magic district event Aug. 6-7 at The Venetian in Las Vegas, Nevada. The event featured a keynote session, “Legendary Leadership in Changing Times,” presented by Nate Booth, CEO of Nate Booth & Associates, as well as a set of panel discussions titled “The Millennial Mindset.” The event also included five additional educational sessions led by industry leaders, time to network with peers and exhibiting sponsors, and a Cirque du Soleil performance.

by Robert C. Goldberg BTA General Counsel

Two areas where dealers find themselves with repeated difficulty in regard to management of their employees have now become more closely related due to recent events.

P R I N C I PA L I S S U E S Leaders Eat Last Leading change from the top down

by Mike Lecak Collaborative Consultant Group LLC

Fight or Flight? Steps to increase sales through selection & training by Melissa Whitaker Melissa Whitaker International LLC

As human beings, we are all designed to have a “fight-or-flight” mentality. As we grow up, we either develop the tools we need to stay and fight for what we believe in (have the accountability and commitment to success) or we live life running away from every obstacle. When you select people for your sales team, are you selecting fighters? After you select your key fighters, are you continuing their training with a fighter (accountability and commitment) mentality?

The “leaders eat last” leadership mantra’s basic premise is that, as a leader, you are committed to making sure your team has what it needs to survive and move forward.

D E PA R T M E N T S Business Technology Association

• BTA Highlights

Executive Director’s Page

BTA President’s Message

Advertiser Index

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EXECUTIVE DIRECTOR’S PAGE

Plan to Attend BTA Southeast’s Retreat

re you fully embracing the many managed print services (MPS) opportunities within your customer base — or are you leaving money on the table? MPS provides a significant revenue opportunity. InfoTrends, the market research firm, projects that MPS, through the dealer channel in the U.S. market, will experience a compound annual growth rate of 4 percent through 2019, when the dealers’ share of the $12.1 billion MPS market will be $2.68 billion. With a focus on MPS, the 2015 Fall Colors Retreat, hosted by BTA Southeast in Asheville, North Carolina, will help you better prepare your dealership to claim a greater share of the growing MPS revenue opportunity. The agenda features three educational sessions led by industry leaders and networking events that include a welcoming reception and dinner Friday evening, and a tour of the historic Grove Park Inn and dinner on the inn’s terrace Saturday evening. Dealer attendees will also have the chance to win prizes in exhibitor drawings and enter the BTA District Event Sweepstakes. The event begins at 2:30 p.m. on Friday, Oct. 23, with welcoming comments and the first educational session, “MPS: It’s Changing. Are You?,” led by Mike Lecak, founder and president of Collaborative Consultant Group LLC. From 3:45 to 4:45 p.m., attendees will break into small groups for vendor round-table discussions. The first day will wrap up with a welcoming reception and dinner beginning at 6:30 p.m. At 7:30 a.m. on Saturday, Oct. 24, the second day of the Fall Colors Retreat will begin with a continental breakfast, followed by the second educational session, “Six MPS Mistakes Most Dealers Make,” led by Frank

Topinka, president of the National Printer Repair Network. Following a break, additional round-table sessions with vendors will be held. Following a second break, Jim Buck, regional sales manager for Impression Solutions Inc., will present the final educational session, “An A4 Complimentary Strategy for Today’s MPS Contracts.” Prize drawings and final announcements will conclude the day’s educational agenda. From noon until 5:30 p.m., attendees will have free time to explore Asheville and the surrounding area. This will be an excellent time to enjoy the fall colors of the nearby Great Smoky, Blue Ridge or Balsam mountains, drive along the Blue Ridge Parkway or visit the iconic Biltmore Estate, the largest home in the United States at 135,000-plus square feet. At 5:30 p.m., attendees will enjoy the tour and dinner at Grove Park Inn. BTA member registration for the Fall Colors Retreat is $199 and includes the Friday educational sessions and dinner/reception at the event hotel, the Doubletree by Hilton Asheville-Biltmore, Saturday educational sessions and continental breakfast, and Saturday evening tour and dinner at Grove Park Inn. BTA members also receive two-for-one registration, so plan to bring a second employee from your dealership. This will be my 10th Fall Colors Retreat. It is always one of the highlights of the year in terms of my travels on behalf of BTA. The area is beautiful, the event format and venue are particularly relaxing and, of course, that Southern brand of hospitality is always welcomed. I hope to see you Oct. 23-24 in Asheville. I know you will find it to be a very worthwhile event. For more information on BTA Southeast’s fall event, see the ad on page five of this issue. To register, visit www.bta.org/ BTASoutheastEvent. n — Brent Hoskins

Executive Director/BTA Editor/Office Technology Brent Hoskins brent@bta.org (816) 303-4040 Associate Editor Elizabeth Marvel elizabeth@bta.org (816) 303-4060 Contributing Writers Robert C. Goldberg, General Counsel Business Technology Association Jim Kahrs, Prosperity Plus Management Consulting Inc. www.prosperityplus.com Mike Lecak, Collaborative Consultant Group LLC www.collaborativeconsultantgroup.com Melissa Whitaker, Melissa Whitaker International LLC www.melissawhitakerintl.com

Business Technology Association 12411 Wornall Road Kansas City, MO 64145 (816) 941-3100 www.bta.org Member Services: (800) 505-2821 BTA Legal Hotline: (800) 869-6688 Valerie Briseno Membership Marketing Manager valerie@bta.org Mary Hopkins Database Administrator mary@bta.org Teresa Leerar Bookkeeper teresa@bta.org Brian Smith Membership Sales Representative brian@bta.org Photo Credits: Bigstockphoto. Cover created by Bruce Quade, Brand X Studio. ©2015 by the Business Technology Association. All Rights Reserved. No part of this publication may be reproduced by any means without the written permission of the publisher. Every effort is made to ensure the accuracy of published material. However, the publisher assumes no liability for errors in articles nor are opinions expressed necessarily those of the publisher.

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BTA PRESIDENT’S MESSAGE 2015-2016 Board of Directors

Have You Registered for ProFinance 2.0?

ave you had the chance to attend ProFinance 2.0, BTA’s popular financial benchmarking educational workshop? If not, I highly recommend you attend. Over the past 13 years, ProFinance has helped 671 attendees from 335 dealerships improve the profitability of their businesses. The workshop has evolved over the years to adapt to industry changes and has incorporated those changes into the new industry model. The model consists of more than 30 key benchmarks, including those for MPS, and it will help you and your team achieve double-digit operating income. ProFinance 2.0 is a hands-on workshop that provides practical ideas you can put into action as soon as you get back to your dealership. By learning proven sales and service plans, effective management bonus programs and critical organizational strategies, ProFinance 2.0 will give you and your company a competitive edge. ProFinance instructors John Hey and Todd Johnson have more than 25 years of experience advising dealers and helping build some of the largest dealerships in the United States. Over the years, ProFinance has received glowing feedback from attendees: n “The financial model was great and the general industry knowledge was invaluable. This workshop gave me a great opportunity to find what is working and not working. The industry insight was excellent.” — Jeremy Lee, Edge Business Systems LLC, Roswell, Georgia n “This is the best class I have ever attended, and I have been to many.” — Jeanie Lucier, Repeat Business Systems, Albany, New York

n “Brilliant! Marvelous! Stupendous! For two years, I’ve searched for a tool to rate my company’s performance. I needed one that has benchmarks, a clear growth path and could be ‘tuned’ to my dealership. BTA’s ProFinance course is a solid tool and an easy-to-understand framework for getting a dealership into shape.” — Sheldon Michaels, Southern Office Machines, Marietta, Georgia n “This class brought benchmarks and financial information, coupled with thought-provoking information on how we operate currently. It is a great tool to evaluate our current structure, procedure and offerings.” — Donna Nabors, Southwest Office Systems Inc., Dallas, Texas n “After working for a company that has implemented this model, I have an extreme appreciation for it and the culture and integrity that it brings to the business. Well done!” — Cyndi Orner, Fisher’s Document Systems, Boise, Idaho n “In my short six years in this industry, this was probably one of the most beneficial sessions I have ever attended. Todd and John both did great and their information was invaluable. Thanks again.” — Gene Daniel, R.K. Black Inc., Oklahoma City, Oklahoma I encourage you to register today for the upcoming ProFinance 2.0 workshop. It will be held Oct. 8-9 at BTA member dealership ProCopy Office Solutions Inc., located in Tempe, Arizona. BTA member tuition is $1,395 and BTA members may apply their $150 or $250 educational discount received with their membership toward the registration fee. If you have already attended ProFinance but would like to refresh your knowledge and obtain the new model, BTA members can attend for 50 percent off the member price. For more information or to register, visit www.bta. org/ProFinance. n — Dave Quint

President Dave Quint Advanced Systems Inc. 2945 Airport Blvd. P.O. Box 57 Waterloo, IA 50704 dquint@asiowa.com President-Elect Rob Richardson Allied Document Solutions & Services Inc. 200 Church St. Swedesboro, NJ 08085 robr@ads-s.com Vice President Dan Castaneda International Copy Machine Center 1515 Lee Trevino, Ste. EE El Paso, TX 79936 dan@icmc-elp.com BTA East Greg Gondek ACT Group 20 Commerce Drive Cromwell, CT 06416 greg@advancedcopy.com BTA Mid-America Bob Evans DigiTec Office Solutions Inc. 12560 Reed Road, Ste. 200 Sugar Land, TX 77478 bobevans@digiteconline.com BTA Southeast John Eckstrom Carolina Business Equipment Inc. 5123 Bush River Road Columbia, SC 29212 johne@cbesc.com BTA West Cathy Dimon Northern Business Systems 3526 International Fairbanks, AK 99701 cdimon@acsalaska.net Immediate Past President Ron Hulett U.S. Business Systems Inc. 3221 Southview Drive Elkhart, IN 46514 ron.hulett@usbus.com Ex-Officio/General Counsel Robert C. Goldberg Schoenberg Finkel Newman & Rosenberg LLC 222 S. Riverside Plaza, Ste. 2100 Chicago, IL 60606 robert.goldberg@sfnr.com

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Managed IT Services Increasingly seen as a key diversification strategy by: Brent Hoskins, Office Technology Magazine

re you actively working to diversify your product and services portfolio with an eye on increasing the value of your dealership and ensuring its long-term success and viability? Like it or not, current document output trends, the changing workforce and ever-evolving technology are collectively providing compelling reasons for today’s office technology dealers to seek additional revenue-generating opportunities in order to ensure continued growth. For many, managed IT services has been embraced as one of the key strategies to achieve that growth. “If you look at what is happening in the copier world as a whole, you can see that manufacturers are all positioning themselves to be more than just hardware providers,” says Britt Siedentopf, manager of managed services for LeapForward Managed Services, a new offering from Muratec America Inc. “They realize that the copier and printer side has become more of a commodity than anything else. Sales are declining; people aren’t buying as much as in the past. That’s just the way it is. “Look at Ricoh; they made a huge investment with the acquisition of mindSHIFT,” Siedentopf continues. “And Konica Minolta, of course, bought All Covered. These companies know that whoever controls the customer’s infrastructure and the management of their data wins. We are all scrambling to try and do that, as are our dealers. Muratec sees this and, so, is looking to diversify what it brings to its dealers.” Michael Amiri, senior director of the dealer division at Continuum Managed IT Services, now partnering with more than 150 dealerships, offers a similar perspective. “You should transform your dealership so that it has a more diverse product and services mix,” he advises. “We all know that copier and printer activities are flat, if not declining. All dealership principals are looking for additional sources of profitable revenue.” Amiri is pleased that dealers are increasingly looking to managed IT services as a key diversification strategy, noting

that office technology dealerships are ideal for the services offering. “About four or five years ago, we did a pretty healthy amount of market research,” he says, referencing Continuum’s search for its “next generation” of partners beyond today’s traditional managed IT services providers (MSPs). “We found that there are two main channels that are poised to be that next generation — one is the office equipment channel, the other is the telecommunications channel. Both of these channels are perfectly suited for success because they have large customer bases and today’s marketplace is demanding credible IT support from trusted advisors.” While MSPs still compose approximately 90 percent of Continuum’s partners, they generally have “many fewer sales representatives as compared to office technology dealerships,” Amiri says. “When you bring in a dealership — with sometimes up to 50 or so sales reps — the revenue opportunities for both of us are so much greater than through traditional MSPs. From a revenue perspective, the office equipment channel is absolutely our highest growth provider year over year.” Amiri provides a sense of the amount of revenue that a dealer can expect from managed IT services over time. “Take a dealership that has 3,000 customers,” he says. “If that dealership could get just 5 percent managed IT adoption among its customers in three years, that would be 150 contracts. With an average of $1,500 a month per contract, that represents $2.7 million in annual revenues in three years. “What is reasonable and what can be expected?” Amiri continues, regarding the percentage of dealership revenues generated by the opportunity. “Our forecast would be that within three years, IT services should represent 10 percent of the dealership’s top-line revenue and, within five years, it should be 25 percent of top-line revenue.” Lindsay Dick, director of sales for Collabrance LLC, the managed IT services subsidiary of GreatAmerica Financial

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Services, reports even higher exAlthough he reports pectations and success among that many dealers are “The dealership’s success Collabrance partners. “A lot of not yet achieving profhere goes hand in hand with our partners — especially the itability with managed its sales team’s effectiveness ones who are doing really well IT services (and even and the ability to go into the and achieving high profitability with the current “dumb customer location and tell — envision growing managed tax” assessed for some the right story. Dealers who services to at least 50 percent as part of the learning of their revenue over the next curve), Johnson emphadon’t emphasize IT sales five years with our support,” she sizes that dealers should training and IT sales support will struggle.” says. “They want to have fewer consider the opportunity — Michael Amiri customers, but more revenue — but only when they are Continuum Managed IT Services per customer, which makes ready. “There is definitely their sales costs lower and their a place for BTA dealers in profitability higher. This also improves their stickiness with this space,” he says. “It represents a great avenue of growth, customers for long-term relationships and positions them as but not all organizations are ready for the challenges today.” true trusted advisors.” Meeting the challenges involves, in part, having properly Though increased dealership revenues can be achieved in trained personnel in the dealership, particularly when it the short term, reaching profitability in managed IT services comes to selling managed IT services. “We believe that sales may take some time. Each year, Strategic Business Associates training is equally important — if not more important — than (SBA) surveys members of four office technology dealership training on the technical side,” Amiri says. “The dealership’s collaboration groups, collecting details on their financial per- success here goes hand in hand with its sales team’s effectiveformance. “This year, that included 127 of the top dealerships ness and ability to go into the customer location and tell the in the nation, with $2.1 billion in total revenues,” says Todd right story. Dealers who don’t emphasize IT sales training Johnson, a partner in SBA, noting that 60 percent (76 dealer- and IT sales support will struggle. Those dealers who place ships) reported some activity in managed IT services. “As a an emphasis here will succeed and ensure their sales teams group, the dealerships reported a 6 percent operating loss in will enter this marketplace with the utmost confidence.” 2014. That is not to say that some dealerships aren’t experiencSiedentopf likewise notes that the proper training of ing a profit; 27 of the 76 dealerships were profitable, but their sales reps is paramount. Under the LeapForward offering profits were far outweighed by the operating loss of the rest.” — which includes providing the dealer’s IT customers with Third-party managed IT services providers — offering the necessary hardware infrastructure as well as live, U.S.dealers and their customers such services as network opera- based help-desk/NOC services and Internet connectivity tions centers (NOCs), help-desk support and remote monitor- all under a monthly per-user fee — “‘Copier techs’ can pering and management software — acknowledge that it takes form the on-site service calls,” he says. “It is more importime for dealers to achieve profitability. Says Amiri: “You’re tant to invest in the people who will be out there selling likely not going to be profitable in the first year, but your ef- managed IT services. These specialists must have knowlforts should produce 60 percent gross margins with a mature edge of the sales process and business acumen. This is more operational model.” Says Dick: “We inform our partners, ‘It’s of a business conversation, not a technical conversation a smart investment and your return will occur much more with the customer.” quickly in the first year or two if you follow the best practices, On the service side, most of the IT issues experienced training and business-planning strategies we recommend.’” by the dealer’s customers can be handled remotely by the Johnson says SBA is often asked why it takes some time for third-party managed IT services provider in cases where dealerships to achieve profitability in managed IT services. the dealer opts to partner with such a company. Amiri, for “We reply that the IT services business is quite unique com- example, reports that Continuum typically handles up to pared to our traditional imaging business, requiring differ- 90 percent of IT issues for a dealer’s customers, in a “whiteent skill sets across the whole organization,” he explains. “We label fashion,” through the company’s 700-plus NOC techthink dealers are paying the ‘dumb tax’ as they get into a space nicians and help-desk engineers. Similarly, LeapForward’s that has such a steep learning curve. Our advice to dealers is dealer customers can expect to make “one on-site call per to make sure their core businesses are healthy before heading month per 100 users,” Siedentopf reports. “So, it is very low.” down this road. We also believe it is smart to partner first, and Even with most of the IT service issues being handled by then progress to building the infrastructure.” the third-party providers — as in the case of Collabrance, 12 | w w w. o f f ic et ec hno lo g y m a g.c om | S e p t e m b e r 2 0 1 5

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years are any indication of Continuum and LeapForthe next three to five years, ward — the vendors em“You cannot just put your then we would fully expect phasize that dealers moving toe into it. You have got the office equipment dealer forward with managed IT to be fully committed, channel to become the preservices cannot take the opand that commitment must eminent provider of manportunity lightly and must start with the C-level in the aged IT services,” Amiri says. recognize the high level of dealership; if that individual “I think that if you asked the commitment that is necesisn’t fully committed, it’s customers of dealers today if sary. “You cannot just put they would rather have more your toe into it,” Siedentopf not going to happen.” or less vendors, the vast masays. “You have got to be fully — Britt Siedentopf jority would say they would committed, and that comLeapForward Managed Services like to have less vendors, as mitment must start with the long at the vendors are trustC-level in the dealership; if that individual isn’t fully committed, it’s not going to happen.” ed advisors. Again, that’s where dealers are As dealers seek to diversify their product and services of- perfectly positioned; they already have that ferings in order to generate additional revenues, more may trusted relationship with their customers.” n Brent Hoskins, executive director of the want to consider making the commitment to managed IT Business Technology Association, is editor services, particularly given the growing number of partnerof Office Technology magazine. He can be ing options. There are also the high expectations for the dealreached at brent@bta.org or (816) 303-4040. er channel going forward to consider. “If the past three to five

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Capture the Magic BTA West hosts district event in Las Vegas by: Brent Hoskins, Office Technology Magazine

TA West hosted its annual Capture the Magic district event Aug. 6-7 at The Venetian in Las Vegas, Nevada. The event featured a keynote session, “Legendary Leadership in Changing Times,” presented by Nate Booth, CEO of Nate Booth & Associates, as well as a set of panel discussions titled “The Millennial Mindset,” moderated by Sally Brause of GreatAmerica Financial Services. The event also included five additional educational sessions: “Best Practices & the 2015 Industry Benchmark Model,” led by Todd Johnson, Strategic Business Associates; “Sales Is Still a Numbers Game, but the Numbers Have Changed,” led by Gil Cargill, Cargill Consulting Group Inc.; “Are You Prepared to Engage Buyer 2.0?,” led by Chris Glover, Ricoh Americas Corporation; “Landing the Largest Opportunities in Each Territory,” led by Kate Kingston, Kingston Training Group; and “How to Use LinkedIn to Grow Net-New Business,” led by Larry Levine, Dealer Marketing. Capture the Magic also included time to network with peers and exhibiting sponsors during breaks, a welcoming reception and a Cirque du Soleil show of the attendee’s choice: Michael Jackson ONE or Zarkana. The exhibiting sponsors: Balboa Capital, Brother, Compass Sales Solutions, ConnectWise, Crawford Thomas, Depot International, Digitek, DocuWare, ECi e-automate, ECi FMAudit, Epson, ESP/SurgeX, EverBank, Evolved Office, Express Sales Corp., GreatAmerica Financial Services, Gwentaa, HP (Aug. 6-7 breaks sponsor), Hytec, ILG, Impression Solutions, Innovolt, Laserfiche, Laser Pros International, Lease Corporation of America, LMI, Muratec, NA Trading and Technology, OKI, PHSI, Print Audit, Sentry Insurance, Supplies Network, SYNNEX, Toshiba, Wells Fargo and Xerox (Aug. 6 reception sponsor). The next BTA district event will be Grand Slam, hosted by BTA East. The event will be held Sept. 24-25 at the Boston Marriott Copley Place in Boston, Massachusetts. For more information, see the ad on pages two and three, or visit www.bta.org/BTAEastEvent. n Brent Hoskins, executive director of the Business Technology Association, is editor of Office Technology magazine.

Clockwise from top: Capture the Magic attendees participate in the keynote session; The millennial panelists (second from left to right): Lindsay Dick, Collabrance, Cedar Rapids, Iowa; Pete Eckstrom, Carolina Business Equipment, Columbia, South Carolina; Michael Schwartz, Image Systems for Business, Somerset, New Jersey; and Jenna Stramaglio, MWA Intelligence, Scottsdale, Arizona; The baby boomer panelists (second from left to right): Scott Shanafelt, Da-Com Corp., St. Louis, Missouri; Jim Donnellon, ABS Business Products, Cincinnati, Ohio; Joe Escamilla, Document Systems, Oxnard, California; and Dave Quint, Advanced Systems, Waterloo, Iowa. Sally Brause ( far left in both photos) moderates the panels; and Nate Booth presents the keynote session.

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Today’s Buyer 2.0 S

The Capture the Magic educational session presenters were (clockwise from top left): Todd Johnson, Gil Cargill, Chris Glover, Larry Levine and Kate Kingston.

Above, left to right: Larry Adeva (left) of JB Print Solutions, Las Vegas, Nevada, visits with Elizabeth Bachan and David Renteria of Balboa Capital during a break; BTA West President and Capture the Magic emcee John Hines assists Mary Williams of DocuWare during prize drawings at the conclusion of the event.

Clockwise from above left: Steve Reed (left) of ECi FMAudit visits with David Shire of Laser One Inc., Nashville, Tennessee, during a break between sessions; Amy Dills of NA Trading and Technology visits with Fred Bolanos of American Business Machines, San Dimas, California, during a break; and attendees enjoy lunch on the second day of Capture the Magic.

everal of the Capture the Magic educational sessions provided attendees insight and guidance into achieving greater sales success in today’s marketplace. One of the sessions, “Are You Prepared to Engage Buyer 2.0?,” specifically focused on the changing nature of the customer’s buying style. The session was led by Chris Glover, channel marketing manager for Ricoh Americas Corporation. Discussions about the best ways to sell to Buyer 2.0 are not only taking place in the office technology industry, but within all industries, Glover said. “What ‘Buyer 2.0’ means is that the buyer is becoming much more educated before they ever speak to you as a salesperson,” he said. “That is a very dangerous thing.” The Internet is the source of that education, Glover said, asking audience members to consider how often they do online research before making any purchase of at least $500 or more. “What’s happening is that people are doing research online without our salespeople being there,” he said. “What are the opportunities going on around you that you are not participating in? That’s where the buyer is changing.” Glover shared market research findings to demonstrate the significance of the changing nature of the buying process. He cited, for example, the results of one research firm’s survey of approximately 1,000 customers across multiple industries nationwide. “What they found out is that the average customer is 57 percent through the sales process before they ever bring in a salesperson,” he said. “That’s very scary; that means we have no impact up until that point.” Among the other findings Glover shared from various market research firms: 60 percent of buyers use nine-plus means to research product purchases; only 50 percent of sales teams achieve quota; and only 3 percent of sales interactions are considered worthwhile. He also noted that the Buyer 2.0’s research efforts include using social media to gather feedback from peers when facing a challenge requiring a purchase, citing research that shows: 59 percent of buyers engage with a peer who has addressed the same challenge; 37 percent post questions on social networking sites looking for suggestions and feedback; and 20 percent connect with potential solutions providers via social media channels. To address the rise of Buyer 2.0, Glover recommended that dealerships concentrate on becoming “micro-marketers.” He said dealerships should: create a Web presence about “who you are” as a company; utilize LinkedIn, given that it is the “numberone search site” used by customers; share thought leadership papers; and blog or use Twitter. “If you are relying on your sales reps to reach all [potential] customers, they can’t do it,” he said. “You have got to give them some help; promote your brand.” Glover said dealerships should also position themselves as “situational influencers” by: becoming “fluent” in vertical and horizontal selling; knowing the competition; and leading with addressing business problems. In addition, dealerships should demonstrate to customers that they are “risk managers” by providing case studies and being able to demonstrate to prospective customers that the dealership has addressed, with other customers, the same problems that the prospective customers are experiencing. “Show them the risk of not doing business with you,” he said. “And show them, ‘these are the companies that I’ve done business with; these are my [customer] reviews; these are my five stars. Join the family.’” n —Brent Hoskins www.offi cetechnol ogymag.com | Se p te mb e r 2015 | 17

BTA West Sept 15.indd 2

8/27/15 3:00 PM

Fight or Flight? Steps to increase sales through selection & training by: Melissa Whitaker, Melissa Whitaker International LLC

s human beings, we are all designed to have a “fightor-flight” mentality. As we grow up, we either develop the tools we need to stay and fight for what we believe in (have the accountability and commitment to success) or we live life running away from every obstacle. When you select people for your sales team, are you selecting fighters? After you select your key fighters, are you continuing their training with a fighter (accountability and commitment) mentality? I grew up playing soccer for 14 years. Any great athlete learns early on that obstacles you face are not bad; they are just opportunities to advance your skills, keep your mind sharp and, ultimately, develop the commitment and mindset of a fighter. It is important to not only be a fighter on the field, but also in life and anything you set your mind to doing. So, as I travel around the world working with thousands of sales reps and sales teams, I am saddened by the lack of accountability and a winning, fighting mindset. Yes, I know our industry has changed tremendously over the years, but what industry hasn’t? I work with reps to help them understand that buyers have also changed and, therefore, they must adjust as well. Since when do “fighters” get so caught up with change? I know change can be difficult and obstacles can be frustrating, but I encourage all of you to reinstate a mindset and mentality of accountability and a fighter’s drive. So how do you do that, and what does that mean? There are three steps to accomplish this: (1) Selection: Hire the best salespeople first. (2) Training for a fighter’s mentality of accountability, commitment and determination. (3) Atmosphere & Culture: Create an environment where accountability, commitment and adapting to change is expected and modeled. Hire the Best Salespeople First A person who is not meant to be a salesperson will quickly blame everyone but himself (or herself), play the victim and procrastinate. A salesperson who is not wired for the sales role he is in will not bounce back from setbacks. In fact, setbacks often turn into increased anxiety for a salesperson

who is not a good fit. This is a universal truth that usually cannot be overcome. However, when the best salespeople are hired, commitment and accountability become highly learnable skills that will catapult your team’s success. The fighter salesperson has awareness of his position and the correct combination of behavior, motivators, intelligence and skills to fulfill the needs of the position. He also has a commitment to attack each obstacle as an opportunity — to choose to stay and fight for success instead of taking the easy road of flight. Training for a Fighter’s Mentality As I mentioned earlier, buyers and our industry have gone through an immense amount of change. It still amazes me that managers and salespeople frequently ask me: “What is the magic pill for sales success?” Well, there never has been, nor will there probably ever be, a “magic pill” for overnight success. It comes down to hard work, commitment to learning, growing and adapting, and being accountable (taking personal responsibility for one’s actions and outcomes). Now we can train our reps on what is working and what is

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Whitaker Sept 15.indd 1

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with them. By having a good frequency not based on all of the shifts and changes Set proper expectations of touches (reaching out every two to in our industry so they can have success three days to ideal, pre-qualified prosmore quickly. However, that will not take for your team members pects) using the phone, in-person meetaway the need for persistence, hard work and give them the ings, emails, voicemails and social meand determination to overcome obstacles. training they need in dia, we increase our success. Here is an example: There is an amazregard to behavior, This type of determination and pering buzz out there at every conference tomotivation, intelligence sistence can either cause sales reps to day about using social media (e.g., Linkedstay and fight for success or make them In) to make sales. Do not be fooled, this is and sales skills. take flight. They may think that when not the quick fix or magic pill I know all things get too tough, looking for some of you are so desperately wanting. Do not be blinded by the fact that even though many trainers and mystical, easy way out is the answer, but that just leaves coaches have been talking about how to effectively use social them more frustrated and with a negative mindset. Hence, media to make more sales, it still requires hard work, deter- they get fired or quit. Set proper expectations for your team mination, accountability and frequency of touches. It will members and give them the training they need in regard to still require patience, diligence and time to reach key people, behavior, motivation, intelligence and sales skills. and to build relationships and trust. What I tell sales reps today is that they must use a combination approach to acceler- Creating the Atmosphere & Culture Last but not least, where is your mindset as a leader? It is ate conversion and connection rates. What is a combination approach? Since everyone is different, we do not know how your job to create an atmosphere that exudes accountabilthe people we reach out to would prefer us to communicate ity, commitment, that adapting to change is required and a fighting mentality. It is your job to create a synergistic team that does not just have one or two superstars who are only out for themselves. What is better is to have an all-star team of employees who are built to fight for themselves, for each other, for you and for their clients. For consistent results, you must model these areas as a core part of your sales culture. This is modeled through language and action. It begins with sales management and leadership. When you expect and model these attributes, your sales team will as well. Salespeople who are unable or unwilling to model these must be set free to work for the competition. So you decide: Is your organization going to be known for “fighters” or “flighters”? n Melissa D. Whitaker has a proven track record in coaching salespeople and managers in selling at a higher level. She is the co-author of the best-selling book “Pushing to the Front” with Brian Tracy, and the author of the forthcoming book, “Beat the Curve.” Whitaker is a sales and management expert, business consultant, speaker and coach. She is the founder and president of Melissa Whitaker International LLC (MWI), where she helps executives and their teams achieve alignment and drive profitable sales. Before MWI, Whitaker had years of proven sales and management results with leading organizations including Impact Networking, Toshiba America Business Solutions and Chicago Office Technology Group. She can be reached at (847) 845-4922 or melissa@melissawhitakerintl.com. Visit www.melissawhitakerintl.com. 20 | w w w. o f f ic et ec hno lo g y m a g.c om | S e p t e m b e r 2 0 1 5

Whitaker Sept 15.indd 2

8/27/15 10:48 AM

Laserfiche-ProFinance ads Sept 15.indd 1

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Considering an Acquisition? How to achieve success & avoid the pitfalls by: Jim Kahrs, Prosperity Plus Management Consulting Inc.

s our industry continues to evolve and mature, business growth is becoming more difficult to achieve. Because of this, many dealership owners have considered acquisition a key growth strategy. Though this can be a great move when handled properly, it can lead to big losses if not. This article will provide some insight for those considering an acquisition and assist in formulating a plan that will help you achieve success and avoid the pitfalls that can lead to a bad outcome. As a start, it is important to look at why you want to buy another dealership. Obviously growth is a driving factor, but I have learned that growth alone is not enough. You need to look at why this particular strategy is on your radar. If it is driven by things like ego, vendor pressure, peer pressure or other similar reasons, it might not be the right decision for you. I have seen dealership owners embark on this journey for the wrong reasons and the results have been disappointing. When looking at why you want to grow through acquisition, you also need to consider what effort will be required from you and your team. It is never a matter of buying a company one day, plugging it into your existing company the next and having everything run smoothly. There will be an integration period that requires work and attention. Often, one plus one does not immediately equal two, meaning that the sum of your revenue and the revenue of the company you acquire could take a step backward. You should be prepared for this in your integration plan. What are some reasons for making an acquisition that do work well? Here are a few: a desire to add revenue without all of the corresponding costs and expenses; to bring in additional resources; to bring on additional salespeople and techs; to take on additional territory; to bring in additional vendors; and to bring in additional product/service offerings. Once you decide to pursue an acquisition strategy, it is important to look at whether you are ready to buy another company. Start with looking at your own operation. Is your house in order so that you can take on the challenges and

additional business that comes with an acquisition? Do you have smoothly running systems? Do you have policies and procedures that are firing on all cylinders? An acquisition will magnify and multiply problem areas in your company. Do you have the managers necessary to integrate the newly acquired company while continuing to drive your current business? If your current managers are stretched thin, they will need to prepare themselves for more. If they do not have and cannot create the bandwidth needed, you will struggle with the integration process. Finances are another key consideration. How will you pay for an acquisition? This includes paying the seller, as well as having the working capital needed to keep the business going. Almost every acquisition requires a significant payment at closing. No one wants to sell his (or her) business and hold the paper for the full purchase price. If you do not have the necessary cash available, there are options. You can approach your bank for a loan, you can look to the U.S. Small Business Administration for a loan (typically done in conjunction with a local bank) or you can work with your key manufacturer(s). Often, manufacturers will provide support for an acquisition if an owner can show how it will help build the manufacturer’s installed base. So you have looked at why you want to do an acquisition and have determined that you are prepared. The next step is to choose a target. The easiest, safest and often most profitable scenario is to buy a smaller dealership in your area that carries the same product line(s) you do. This typically allows for immediate synergies and the elimination of redundant expenses. You usually do not need the other dealership’s office and can often reduce headcount by having your current staff pick up much of the work. You can also target a related business in the same territory. Recently, I have gotten calls from dealers around the country looking to buy IT and managed services companies in their areas. This model can be a good one if it allows you to leverage your customer base with a new

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Kahrs Sept 15.indd 1

8/27/15 1:30 PM

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offering. If done correctly, this can lead to Once you have determined the value very quick growth. of the business, it is time to create an I would advise anyone The potential problem here tends to offer. Key elements to consider include: looking to acquire to come from taking over a business you are the price to be paid and how and when it start on the smaller not familiar with. You will want a stratwill be paid; non-compete agreements side. Do not go out and egy to retain and incentivize some of the for the owners; employment of the ownacquire a company that key players to transition business knowlers and other key staff members; how edge to your organization. Some dealers the seller’s office lease will be handled; is the same size as yours have targeted businesses that have little how due diligence will be handled; timon the first acquisition. relationship to the copier/MFP industry. ing for each key step in the process; and Though this can be workable, it often more. The typical process is to create a leads to a fragmented company and does not yield the de- letter of intent (LOI) that outlines the key components of an sired results. The further you stray from your core competen- offer. It is usually a non-binding document that helps both cies, the more you risk making poor or uninformed decisions. parties understand what is being agreed to before moving When looking at any of these models, the idea of geog- on to create a full set of legal documents. The LOI can be the raphy comes into play. Do you want a company that shares initial offer or a second step following a simple terms sheet your territory, one that is contiguous or one that is com- that outlines the basics of an offer. pletely outside your area? Each scenario has its pros and Once the LOI is accepted, the process moves into due dilicons, but I have found the key factor lies in the management gence. This is where you, as the buyer, get the chance to look at abilities of you and your team. Managing multiple locations anything and everything you need to see to feel comfortable has its challenges. Add distance to the mix and it is even that what you are buying is indeed what you think it is. While more challenging. Who will run the remote locations? Ex- you are working through the due diligence process, your atactly what functions will be handled at each location? Do torney will be working on the legal documents needed to comyou want to travel and, if so, how often? plete the transaction. The due diligence and document negoThe size of the target company is another key point to tiation process will likely take 30 to 90 days. This culminates consider in an acquisition. I would advise anyone looking with a formal closing. Though closing used to be an event to acquire to start on the smaller side. Do not go out and held at the office of one of the attorneys, it has, with the help acquire a company that is the same size as yours on the first of scanning, email and the Internet, become a process where acquisition. It works better to acquire a smaller company each party signs the documents in his own office and emails first. This gives you the chance to learn the process and them to his attorney. The attorneys review and exchange the work out your plans on a smaller scale. Trying to swallow documents. Once everything is in order, your attorney will a company that is the same size or larger than yours can be tell you that you can wire transfer the closing payment to the traumatic without a good, proven plan. seller. At this point, the transaction is officially closed. Finally, when looking at acquisition targets, you need to As you can see, the acquisition process has many compoconsider the business model and performance of the com- nents. Success depends on having a good plan and sticking pany you are buying. The best thing to buy is a company to it. The margin for error can be large and mistakes can with a strong business model and track record of success. be costly. However, when planned and carried out correctly, Yes, you will have to pay more for it, but the return on invest- acquisitions can be a great way to grow your revenue, profment is much easier to realize than it is with a company that it and overall business value. As you look around at your is struggling. If you are going to buy a “fixer upper,” be sure peers, it is easy to see that many of the largest, most profityou have the experience and talent to actually fix it up. able and most respected dealerships have made acquisition Once you have found one or more candidates, you will a significant part of their game plans. However, it is not a need to look at how to value the companies and how to struc- tool reserved only for large dealerships. A dealership of any ture an offer. This can be a tricky process. There are numer- size can successfully acquire another and reap the rewards ous valuation models that can be applied, however, most con- now and for years to come. n sider a few key factors: adjusted net profit (also referred to as Jim Kahrs and Prosperity Plus have worked Earnings Before Interest and Taxes [EBIT] or Earnings Before with more than 125 dealerships in the Interest, Taxes, Depreciation and Amortization [EBITDA]), valuation, purchase and sale process. recurring revenues, contracted revenues, employees and key Kahrs can be reached at (631) 382-7762 business performance indicators. If you are new to acquisior jkahrs@prosperityplus.com. tions, it is best to get some help with the valuation process. Visit www.prosperityplus.com. 24 | w w w. o f f ic et ec hno lo g y m a g.c om | S e p t e m b e r 2 0 1 5

Kahrs Sept 15.indd 2

8/27/15 1:30 PM

Depot Intl ad Sept 15.indd 1

8/14/15 10:06 AM

COURTS & CAPITOLS

Classifying Workers Use these six factors to ensure compliance by: Robert C. Goldberg, general counsel for the Business Technology Association

here are two areas where dealers find themselves with repeated difficulty in regard to management of their employees. The first is the proper classification for overtime compensation. The second is the distinction between an employee and an independent contractor. These two areas have now become more closely related due to recent events. Previous columns have discussed overtime compensation, however, just this month, two dealers received inquiries from the Department of Labor in regard to their overtime policies. In both instances, the dealers assured me that the individuals were paid a salary and, thus, were not entitled to overtime. But how an individual is compensated is not relevant — it is the employee’s duties and responsibilities that determine whether overtime compensation must be paid. Service technicians are the individuals who are usually misclassified. In most situations, technicians will be entitled to overtime compensation. Service managers will not. Also, technicians dispatched from home are on the clock once their normal commute time is reached. It should be noted that in both actions brought by the Department of Labor, a technician who was terminated blew the whistle on the employer. Even though the employers had provided generous compensatory time for extra hours worked and time off when needed, these facts were not considered when it was determined if proper compensation was paid. The Department of Labor recently issued guidance on the classification of employees versus independent contractors. At times, dealers will classify individuals as independent contractors in order to avoid paying benefits, Social Security taxes, withholding taxes, and state and local taxes. An independent contractor is responsible for the payment of all taxes based on his (or her) gross income. If an individual is found to be improperly qualified as an independent contractor, then the employer becomes responsible for all taxes and withholdings — regardless of whether the funds were withheld. Thus, the employer would have to pay the full withholding, both portions of Social Security and Medicare, and state and local taxes. In several situations, misclassified individuals have

sued for medical benefits, profit sharing and other benefits that would have been received if they were properly classified as employees. Regulators are also concerned that independent contractors are not covered by many of the legal protections extended to employees such as the Family and Medical Leave Act and workers’ compensation. The Department of Labor established six factors of an economic realities test to help employers properly classify individuals. The factors are: (1) Is the work an integral part of the employer’s business? (2) Does the worker’s managerial skill affect his opportunity for profit or loss? (3) How does the worker’s relevant investment compare to the employer’s investment? (4) Does the work require special skills and initiative? (5) Is the relationship between the worker and employer permanent or indefinite? (6) What is the nature and degree of the employer’s control? Significant budget deficits have prompted governments to narrow definitions to expand coverage of applicable taxes. The Department of Labor has long thought that the independent contractor designation was an area where proper taxes were being avoided. The Department of Labor thinks that most workers should be classified as employees and the six factors support this belief. Courts have thought the same, having reviewed relationships based on the six factors in the economic realities test. With new standards for overtime compensation raising the gross compensation required to be exempt from overtime compensation, it is thought that independent contractor status might be considered to avoid paying overtime. Clearly, federal and state regulators will be closely monitoring worker classification and dealers are encouraged to examine their job descriptions and classifications to ensure compliance. The six factors set forth are a good basis to begin a review. n Robert C. Goldberg is general counsel for the Business Technology Association. He can be reached at robert.goldberg@sfnr.com.

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Goldberg Sept 15.indd 1

8/27/15 1:34 PM

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BTA HIGHLIGHTS BTA would like to welcome the following new members to the association:

Dealer Members A D Solutions, Orlando, FL Hicks Office Equipment, Hermitage, PA Velocity Imaging Products, La Mesa, CA Service Associate Member Sepialine, San Francisco, CA Vendor Associate Members Parts Now, Madison, WI For full contact information of these new members, visit www.bta.org.

AssociationBackgroundchecks provides the following to BTA members: a free cloudbased pre-employment background check account; a free online and over-the-telephone account tutorial; a free background check; and a policy and procedure review for maximum ROI per client. Users will have the ability to: locate applicants’ current and past address histories; scan more than 1,000 nationwide/international databases; search more than 500 million criminal records for adverse information; cross reference national and international terrorism sources; and validate applicants’ Social Security numbers. BTA members receive up to 46 percent off background check prices. Visit www.bta.org/BackgroundChecks for more information. For information on BTA member benefits, visit www.bta.org/MemberBenefits.

For the benefit of its dealer members, each month BTA features two of its Vendor or Service Associate members in this space. BTA Vendor Associate member Nuance Document Imaging provides the software solutions and expertise required by professionals and organizations to gain optimal control of their document and information processes. The company’s portfolio enables strict compliance with information security policies and regulations while enabling organizations to streamline and eliminate gaps across the full spectrum of workflows spanning the life cycle of their documents from origin to archiving. For users, Nuance’s imaging solutions deliver an experience that is consistent, familiar and intuitive. www.nuance.com

Since 1998, BTA Service Associate member Sepialine has developed print management, cost recovery and remote device monitoring solutions that the company sells direct, as well as through reseller and partner channels. Companies around the world, big and small, use Sepialine software every day to lower costs, reduce waste, improve productivity and increase profits. Sepialine is the creator of Argos — print management software that puts you in control of your print and copy expenses without sacrificing productivity. The software offers robust tracking, sophisticated management tools and an unobtrusive interface. www.sepialine.com A full list of BTA Vendor and Service Associate members can be found online at www.bta.org.

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Highlights Sept 15.indd 1

8/27/15 1:38 PM

PRINCIPAL ISSUES

Leaders Eat Last Leading change from the top down by: Mike Lecak, Collaborative Consultant Group LLC

“L

eaders eat last.” It is a leadership mantra that has been used for years. Its basic premise is that, as a leader, you are committed to making sure your team has what it needs to survive and move forward. This level of selflessness is quite often the difference between success and failure. As our business climate changes, we are all called to change as well. Today, it is imperative to focus our efforts on the here and now. Managed print services, managed network services, solutions and solutions as a service are just a glimpse of the oncoming traffic we now face in our industry. Some leaders have been very adept at navigating these waters; they have prepared, pulled together teams of managers and advisors, and have done all they can to stay ahead of the technology curve. Others have lagged behind, and the reasons are many. For example: manufacturer quotas, lack of sufficient funds to start down another path, internal expertise, “we already tried that; it doesn’t work here,” and “our customer base is not the right target.” I could go on, but the reality is that all of these reasons are valid. I think the only way around this is a full and total commitment to change from leadership. Leading change is truly an art. It takes a clear understanding that change is required to better the business or the people in the business. It also requires an understanding of what employees need to be ready for what is coming at them. A leader must be committed to providing the resources, training and support employees will require during times of change. A leader will also need to know what results will come from that change and what must be done to ensure that the change actually takes place. A clear understanding by all involved will help ensure that the message is being heard and the necessary support is evident. Change efforts in organizations often do not take hold because leaders do not go “all in.” Leading change of any kind takes effort, communication and consistency. Leadership cannot be a situational event. As leaders, we must always support the change we are trying to institute. If we are striving to create a services-driven business — one that is moving in the direction of managing environments and not selling equipment — we must ensure that all of our processes support that model. Are your sales teams sufficiently trained to enter this space and can they realistically impact the decisions that will be made? Do your managers completely understand this model and are

they engaged in the sales process? Does your compensation support your message or does it simply pay a bonus if a rep gets a managed network services order? Is there a high level of understanding of what this model represents to the business moving forward? Do your employees understand what not changing could possibly mean? Change provides a business with a great opportunity that can take shape in many forms. It allows a business to become relevant in its respective market. This can be called “forced greatness.” It also allows management to begin to develop new leaders — leaders who are capable and ready for a challenge. Expanding leadership gives a business the ability to see things through a fresh set of eyes. It also provides new leaders with a purpose that is tied directly to the business’s success. This purpose is a driving force in establishing a leader’s position, as well as promoting change within. When this change is set in motion, it is the actions of the leader that will be most observed. Is this really where the company is going? Are the actions being taken as loud as the words being recited? Can the change be felt throughout the business and is the support significant enough to make it stick? These and many other questions will be asked, but problems arise when they are asked silently. Most employees will simply observe the actions of their leaders and decide if they are serious, or if “this too shall pass.” It is important to live the “leaders eat last” mantra in order to facilitate change in an organization. Make sure the table is set, the food has been prepared and all have been invited. When all of that has been done, you then can sit and enjoy the fruits of everyone’s labor. n Mike Lecak has been in the industry since 1983, starting with ComDoc in Pittsburgh, Pennsylvania. After a successful 15-year career, he joined Toshiba as a district sales manager. Lecak joined Print Inc. in 2004 to manage sales for the company’s channel-focused PrintValue Solutions program. In 2009, he joined Konica Minolta to manage its West region for managed print. Lecak currently serves as president of Collaborative Consultant Group LLC. He can be reached at mlecak@collaborativeconsultantgroup.com. Visit www.collaborativeconsultantgroup.com. www.offi cetechnol ogymag.com | Se p te mb e r 2015 | 29

Lecak Sept 15.indd 1

8/27/15 1:40 PM

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