KBQ VOL 1 ISSUE 2 THIRD QUARTER • 2015
K E N T U C K Y B U S I N E S S Q U A R T E R LY. C O M
KENTUCKY QUARTERLY
™
Sizemore Strategic Solutions PUTTING THE FOCUS ON CRITICAL FACTORS
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Vol. 1 No. 2 Kentucky Business Quarterlyâ„¢ | 3
Staying Connected
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CONTENTS 14
FEATURE
KENTUCKY
Sizemore Strategic Solutions Putting the FOCUS on Critical Factors Attorneys: A resource for your business or a pain in your pocketbook?
6
QUARTERLY
BY DEREK D. HUMFLEET
™
Advertising you can Afford
8
BY BRIAN WRIGHT
10
The purpose of Kentucky Business Quarterly magazine is to bring small business leaders business solutions from local business.
Using Social Selling to GROW Your Business BY BOB WOODS
12
As a small business owner myself I am always amazed at what I don’t
How to (and not to) Conduct Interviews
know about how to run a business and all the people I can learn from. I am proud to bring you our 2nd issue with some very strong
BY JOHN M. WILLIAMS 18
20
22
resources to help you succeed. From legal help, marketing, sales, HR
Staying Connected
and more we have we have some strong contributing writers.
NEWS • ANNOUNCEMENTS CURRENT EVENTS • TRENDS
This issue, we feature as our cover story Sizemore Business Solutions.
Workplace Violence
The team at Sizemore are a lot of fun to know. They are passionate
BY BEVERLY CLEMONS
about what they do and they customize their services for their clients, which is something that is rare. I am proud to introduce them to you
4 Ways to Leverage Your Business
and have them as a part of our publication. I hope you enjoy this
BY ANDREW VAN HORN
26
Don’t pay the Ransomware!
28
10 Tips to Improve the Art of Sales
issue and if you would like to be a part of one of our upcoming issues please reach out to me.
BY BRENT COOPER
Brian Lord, PUBLISHER
859-368-0778 brian72676@gmail.com
BY BRIAN LORD 30
Seller Financing in Small Business Sale Transactions BY MARK SIEVERS
v
Kentucky Business Quarterly™ is Published by Rock Point Sales Marketing & Consulting LLC
Vol. 1 No. 2 Kentucky Business Quarterly™ | 5
Attorneys:
A resource for your business or a pain in your pocketbook? BY DEREK D. HUMFLEET
Last time I wrote about some overlooked questions to consider when hiring an attorney. Do they stand up to you? Do they have a capacity for risk? And do you actually like the person? Today I write about some overlooked reasons why you should always have an attorney at your fingertips. Everyone knows they need an attorney when the sheriff is standing at their door waiting to hand them a summons. And you should know once that happens, it’s going to be expensive, time consuming and emotionally draining, even if you win. What if I told you there may be a way to avoid the expense, avoid the lost time and avoid the anxiety of a lawsuit? Would you be interested? . . . Maybe, just a little? Here you go: • Don’t wait til it’s too late. • Don’t wait til a major issue arises. • Develop a relationship with an attorney who adds value to your business. • Remember legal issues crop up almost every day. For example: Do you have employees? Or are they independent contractors? Why does it matter? You are responsible for payroll taxes on employees. Not so with independent contractors. You are responsible for the negligence of your employees while
they are “on the clock.” You may not be responsible for the negligence of an independent contractor. If an employee is injured while “on the clock,” you may be responsible for his workers’ compensation. But you probably would not be responsible if the individual was an independent contractor. Do you need a contract? Are you negotiating a deal with another business? What happens when an unforeseen change occurs? Do you need to terminate a contract because of unforeseen changes or poor performance? Contracts are like laws that govern the interaction between two parties. All business people know what they want to happen. You know your business well enough to foresee some of the problems. But to paraphrase Donald Rumsfeld, there are known-knowns, known-unknowns and unknown-unknowns and it’s those unknown-unknowns that sometimes jump up and bite you. A good attorney can help you see those unknown-unknowns. Like why is an antiassignment clause important? Or if I do screw something up will I have a chance to cure the problem? Or can I withhold payment and cancel the contract if I’m not satisfied with the finished product? Does your business deal with governmental entities? Is your business under investigation? You know you didn’t do anything wrong, but how do you prove it to the bureaucrat trying to justify his position? If you regularly do business with governmental entities you should expect
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audits of your records. An experienced attorney can review your records and help you prepare for the inevitable audit. Develop a relationship with an attorney who knows your business. She can provide key information to the government, which may head off an investigation in its early stages. The more time and effort the government spends in its investigation, the more costly the consequences. Do you hire and fire employees? What is the basis for the termination? Can you legally justify the termination? Kentucky is an “at will” employment state. Generally that means you can hire and fire employees at will. But the law protects employees in certain cases. Many city ordinances prohibit discrimination against employees based on their race, color, religion, national origin, sex, sexual orientation or disability. State and federal civil rights laws also offer protection against certain kinds discrimination. Some employees are protected against retaliation and are offered whistleblower protection. While you may have a perfectly legitimate reason for terminating an employee, you need to articulate and document the reason for termination in a way that protects your business if the employee makes a claim against you. Attorneys can help you articulate and document those reasons. There may also be questions about whether the terminated employee is entitled to unemployment benefits. Again consultation with an attorney will help with unjustified unemployment claims. Do you want to acquire a competitor?
Does a competitor want to acquire you? Do you want to sell your business? Do you have partners that disagree whether or not they want to sell or buy a business? Again there are the questions of the unknown-unknowns. An experienced attorney can help you with due diligence questions, valuation questions and act as a mediator between the partners. There are always serious risks and benefits to buying or selling a business and lawyers can help you address those questions. Most business owners are smart people. Some of these questions may not require legal advice. A good attorney, who knows you and your business, will tell you when you can handle a situation on your own and when you need their involvement. But you’ll never know unless you ask. Develop a relationship with a good attorney. Let him know what’s going on with your business or industry. Give him the chance to make your business more valuable or save you money by avoiding a costly lawsuit or investigation. Oh, and here’s the disclaimer. Nothing in this article constitutes legal advice. I am an
There are known-knowns, known-unknowns and unknownunknowns and it’s those unknownunknowns that sometimes jump up and bite you.
attorney, just not your attorney. The answer to most legal questions is fact intensive. Nuance is important. If you have a legal question like the ones posted above please consult an attorney, someone you actually pay for legal advice. You can even call me if you want. Just don’t think I’m your attorney because you read something I wrote without knowing anything about your particular situation. Plus this is free. Real legal advice costs money. ABOUT THE AUTHOR Derek D. Humfleet is a partner with Braden Humfleet & Devine, PLC and typically represents individuals, entrepreneurs, startups and small businesses with legal problems ranging from business and construction disputes to unfair business practices to issues with governmental regulatory agencies. He also helps creative professionals make wise choices in complex legal environments. ON THE WEB: www.bhdlaw.net
ROCKPOINT Sales Marketing & Consulting LLC
?
Does your business need: Help with Marketing Strong Internal & External Communication To Gather New Clients while Keeping Old Ones Faithful At Rock Point we can help you with a simple evaluation of your firm to help develop a custom marketing & communication strategy. Call today 859.489.1450 or Email brian72676@gmail.com
Vol. 1 No. 2 Kentucky Business Quarterly™ | 7
Advertising you can Afford BY BRIAN WRIGHT
The good old days of inexpensive advertising is a distant memory. Its death may have coincided with the airing of the first million-dollar commercial during the Super Bowl. To make matters worse, most people can’t even remember the name of the product. Production and creativity are the most important aspect now. The old rule of saying the name of your business at least five times in 60 seconds has been shoved aside for funnier, cuter and sexier commercials. Watching half-naked men and women dance around on dark pools of water may be pleasing to the eye, but I still can’t remember which tire they’re selling. Large corporations use television as a major source of advertising, but that’s probably not something you can do. That’s where the Internet comes in. Search Engine Optimization or SEO is vital to success. The process can get your company or organization near the top of the page in any Google search. Key words are vital. Let’s use a non-profit organization that focuses on historic preservation as an example. Key words should include historic, preservation, landmarks, property, condemned, eminent domain and other words that would be used by a surfer. Those words should be peppered
throughout every part of your online presence including your website and social media. Two of the most popular reasons people surf the Web are to make a purchase or get the latest news. A report from the Pew Research Center for the People and the Press, found that 31 percent of Americans regularly get their news online. That’s a 29 percent jump from just a decade ago and the numbers continue to rise. Seventy-six percent of Internet users surveyed by Pew said they “bumped into” the news when online. That’s up 20 percent from 10 years ago. So what does that mean to the small business or non-profit that uses a web site for outreach? Let’s look at one simple advertising tool that can bring today’s surfer to your site at no cost. A news release was something sent out to the media to alert reporters of an upcoming news conference, event or some interesting information related to your company. But the Internet has given it a more important role. The news release now comes together with those “key words” from SEO. Key words in a release that’s on your website can bring even more people to your door. It becomes a backdoor entrance. The viewer is directed to the news release within your website navigation. But it’s not just limited to news releases. You can add articles, editorials, blogs and white papers to your website. But there can be a downside to attracting surfers to your website or
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social media. If you don’t regularly update your sites, you’re out of luck. There’s nothing that turns off a surfer more than finding outdated information. If your latest Facebook post is from a year ago or your website is promoting an event from 2014 then you’re in bad shape. So the next time you get a little depressed about the high cost of advertising, remember that the next person knocking at your door could be a news hounds with a mouse in one hand.
ABOUT THE AUTHOR Brian Wright is the owner of Brian Wright Consulting in Lexington, Kentucky. He provides corporations, small businesses, nonprofits and individuals with public relations and marketing expertise. Brian is a national award winning writer, editor and consultant. He has received awards from the National Society of Professional Journalists, The Public Relations Society of America, The American Society of Political Consultants and 27 Associated Press Awards. ON THE WEB: www.brianwrightconsulting.com
There’s nothing that turns off a surfer more than finding outdated information. If your latest Facebook post is from a year ago or your website is promoting an event from 2014 then you’re in bad shape.
Vol. 1 No. 2 Kentucky Business Quarterly™ | 9
BY BOB WOODS
Using Social Selling to GROW Your Business
It’s pretty amazing the revelations one can learn from a conversation with the Old Man. My wife and I have been traveling a lot this year, including several days over the summer. On this particular trip, we finally had enough time to have lunch with my dad and stepmom. Just prior to my trip, I had sent him several of my articles I’ve published on LinkedIn and elsewhere (including right here at Kentucky Business Quarterly Magazine). He’s retired now, but he owned an independent manufacturer’s rep company for many, many years. As a tried-and-true sales guy, I thought he might be able to relate to what I do for a living.
The Conversation
While at lunch, he told me he didn’t really understand all of the LinkedIn/ Twitter/other platforms “stuff ” I taught. He does, however, understand the networking and relationship side of sales. He certainly didn’t like to cold call, but he did it as part of his sales strategy. What he excelled at, though, was moving retailers and manufacturers alike from that cold-call zone to a place where he had true relationships with them. When you consider he had to “sell” his capabilities to those manufacturers before he could even think about approaching retailers with their wares, he really had to have great relationship-building skills. “I’d travel, take them to lunch or coffee, play golf with them, and really build relationships with them,” he said. He’s still friends with several of those people, and even attends college football games, plays golf, etc., with them.
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Considering how successful he was in his business, and even without the tools we have access to nowadays, I’d say he networked rather well.
The Take-Away
During that conversation, I experienced a BFO (blinding flash of the obvious). I had always used tools like LinkedIn as part of my networking strategy. I even taught others how to do it as far back as 2008. And now, I’m training and coaching the process of Social Selling as my profession. After our lunch, though, I realized I was teaching and using Social Selling in a way that’s probably not 100% right. With all of the tools, techniques and strategies involved with the “electronic” part of Social Selling, I’ve been concentrating more on the platforms, and a bit less on actual relationship building.
I think that’s where many people who balk at the concept of Social Selling are at right now. They see it as something that’s too new—too entirely new, actually—to take the time to learn and master. They see LinkedIn, Twitter, etc., and think, “This is too much.” Keep in mind that all of these Social Selling platforms and tools are just that: Tools. The networking part of things is still crucial.
Social Selling: Online Tools = Good Ol’ Handshake Networking
Here’s what you can remember going forward: Social Selling is not about just mastering tech tools to increase page views or LinkedIn Profile views, putting faceless contacts and prospects into a pipeline, or (the worst) increasing the number of one’s connections, followers or page likes. In a nutshell, Social Selling is about using online tools, techniques and templates to supplement and augment what many in sales, business development and even business ownership should already be doing: Networking and building relationships. These tools are a means to an end; in this case, developing deep relationships that can also be profitable in a business sense. The use of these tools are not “the end.”
Where to Start
One starts at the beginning, of course. When companies come into being, they usually have very specific ideas about their customers: what age they are, how much they make, etc. The question to you is, “If a company’s owner or management takes the time and energy to determine this, why shouldn’t you?” Determining the persona (or personas) of your buyers is an important part of this process. But you also need to be concerned with engaging them at not only the right time, but the best time. Have you ever worked hard to get a meeting with a person or company you thought was perfectly qualified, only to find out they’ve already obtained whatever it is you’re selling from another salesperson or vendor? Frustrating, right? Shot down before you even begin.
That’s why best time for that engagement to take place is before they even need your product or service. This is where Social Selling really shines. I recommend using what I call “prior engagement” in Social Selling. Prior engagement is the process a Social Seller goes through to attract prospects to her or him before said prospects are ready to buy. It also builds a Social Seller’s “thought leadership” in whatever field or vertical they serve with your products and/or services. If done right, Social Sellers may not even know the specific identities of their prospects prior to being contacted.
Identify Their Triggers
To be in that “prior-engagement” zone, you first need to identify three triggers your prospects need to pull prior to them even thinking about a purchase from you: Who does your client hire before they need you? Example: If you sell office furniture, your future client is already talking to commercial real-estate agents, architects, telecom companies, IT firms, office-supply companies, recruiters and so on. What conversations are your prospects having internally that leads up to your solutions? Continuing our office-furniture example, they’re talking about expansions, new hires, moving, mergers, etc. What questions and challenges will your prospect be facing when deciding how and what to purchase? With office furniture, they’re concerned about quality, quantity of pieces needed, functionality, budget, style... the list goes on.
Develop the Right Content
After you’ve identified those triggers, you need to develop insights that provide your prospects with the right questions ask and the pitfalls to avoid. The tactics and strategies you proactively offer to solve their problem will draw them toward you to start a conversation. After all, you’ve proven you will provide value to them during your talk.
The next step is to develop the content that supports those insights. This is where both LinkedIn and your thought leadership come in. Here are some tips you can use to engage on LinkedIn: • Share great content. You can write LinkedIn Published Long-Form Posts (think blogging, but on LinkedIn), and/ or place relevant articles, blog posts and other content on your LinkedIn and Twitter news feeds. Doing either or both, though, will constitute a large part of that “prior engagement” you need to have, so you’re at the forefront of your prospects’ thoughts when they have a problem or situation that only you can solve. • Use Google Alerts and/or LinkedIn’s Sales Navigator (Premium product) to keep tabs on your prospects’ articles, activities and announcements. Look for triggers that arise and reach out to them at appropriate times. • Develop relationships with strategic alliance partners and other vendors that your prospects work with before they need you. Create a networking group with select referral sources with whom you can all benefit from strategic introductions. By using the prior-engagement strategy, you can attract prospects you may not even know exist at the best time for them... just before and/or when they need you! ABOUT THE AUTHOR Bob Woods is a partner and co-founder at Lexington, KY-based LevelUp Business Coaching & Training. He specializes in Social Selling, which uses platforms like LinkedIn and Twitter to aid sales and marketing teams, business professionals and selling CEOs to generate better leads, close more business and develop strong professional relationships. Bob’s LinkedIn Profile is at https://linkedin. com/in/bobwoods, and he can be reached at: EMAIL: bwoods@levelupforsuccess.com PHONE: (859) 514-0700.
Vol. 1 No. 2 Kentucky Business Quarterly™ | 11
How to (and not to)
Conduct Interviews BY JOHN M. WILLIAMS
Employers are inundated with advice— both legal and practical— about everything from employee handbooks for new hires to exit interviews for new “fires.” The employment relationship actually begins before hiring. Indeed, even those potential employees who are rejected can have significant impact on an employer. Claims of discrimination in hiring procedures are common. Many can be avoided through implementing simple procedures during interviewing. For several years, I was on the personnel committee of a large law firm which reviewed resumes and interviewed prospective new hires. I interviewed dozens—if not hundreds—of entry level attorneys. We periodically received information on how to (and how not to) conduct interviews. Sometimes, it seemed like there were so many “don’ts” that it was difficult to know what we could do. It doesn’t have to be that difficult.
DO THESE THINGS: Know the Law
Federal and state laws generally prohibit discriminatory hiring practices based upon sex, age, religion, race or national origin. Many states and municipalities now have “fairness” laws which prohibit discrimination based upon sexual orientation or identification
as well. Skilled human resources professionals know the basic law. If your organization does not have an HR person on staff, train your interviewers on the law. Seminars, internet resources and consultants are readily available. Most law firms with employment practices can also provide training, often at no charge or a reduced fee.
Assemble a Team
Management should identify those who will handle the interview process from soliciting and reviewing resumes to actual interviews. Not every person in your organization can be an effective interviewer. Some simply lack the people skills. Others may not have the time or inclination. Too often, interviewing job candidates is viewed as “grunt work” best left to those who have nothing better to do. The better approach is to treat this as a vital part of the organization. After all, a company is only as good as the people it hires.
Train
Interviewing requires more than just basic people skills. You want to find out if your candidate meets the job requirements. This demands more than just a 30 minute chit chat session. An interviewer must know the job requirements and what is expected of a new employee. Avail yourself of training resources to help the interviewer develop his or her skills. Everyone on the interview team should thoroughly understand the position to
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be filled, skill and hours requirements and any other particular needs of the company or supervisor. There is no such thing as boilerplate interview. Each position in a company has its own requirements. Job candidates now train and prepare for interviews more than ever before. The interviewer should do the same.
DO NOT DO THESE THINGS
The most common legal pitfall of interviewing involves questions which can be taken as discriminatory, even when that is not the intent. Adequate training can eliminate or at least minimize this risk. Here are a few basic rules: Don’t: Ask about citizenship. This can be construed as screening based on national origin. Even an innocent question such as “Where are you from?” can be viewed as discriminatory. It is, however, acceptable to ask if the person has legal status for employment. It is best to avoid this topic altogether. Don’t: Ask about religious beliefs. Ever. Unless you are a religious-based organization (i.e., a church), personal faith is not relevant. You can, however, ask about work availability on specific days (Saturday, Sunday, evenings). Don’t: Ask about marital status or plans to have children. This can be construed as gender biased. These questions should never be asked. It is acceptable to ask if the candidate can work overtime and evenings and if travel presents a problem. Don’t: Ask about age or date of birth,
If your organization does not have an HR person on staff, train your interviewers on the law.
either directly or indirectly. For example, asking when someone graduated from high school is essentially the same question. Questions regarding experience are fine but avoid questions about age. Don’t: Ask about health or disabilities. The Americans With Disabilities Act of 1990 provides broad protection for employees by requiring employers to make reasonable accommodations for disabilities. Questions about whether the
employee can perform job functions are acceptable. Don’t: Get too personal. One of the best ways to establish a rapport is to discuss topics of interest outside work. Interviewers must be careful here. Seemingly innocuous conversation can be taken out of context later. For example, a discussion about outside interests may include church activities or children. You do not want to leave an impression that such things impact the hiring process. It is best to stay focused on the job requirements. Don’t: Abandon common sense. The test for any question is whether it could be used to screen out candidates based upon a protected criterion. If so, don’t ask it. For example, social clubs and organizations are not relevant. There is no legitimate reason to have a photograph submitted with an application. Other examples can readily come to mind. If the question is itself questionable, skip it.
CONCLUSION
At the conclusion of an interview,
you should know whether (1) the candidate has the required skills for the position; (2) seems to be a good fit for the organization; and (3) has a genuine interest in the job. These goals can easily be accomplished without risking problems down the road.
ABOUT THE AUTHOR John M. Williams is a Lexington, Kentucky attorney and a founding member of Rajkovich, Williams, Kilpatrick & True, PLLC. John is a 1987 graduate of the University of Kentucky College of Law. He is also the 2015 winner of the U.K. College of Law Community Service Alumni Award. John’s clients range from individuals to publically-traded companies. He has extensive experience in construction, business, personal injury and mining law. He is also a member of the Board of Trustees of the Kentucky Lawyers Assistance Program Foundation, Inc., and a member of the Kentucky State Corrections Commission. PHONE: 859.245.1059, ext. 26 E-MAIL: williams@rwktlaw.com
Vol. 1 No. 2 Kentucky Business Quarterly™ | 13
Emily Sizemore, CPA CFO
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Jacob Sizemore, CPA CEO
Stephanie Kaelin VP of Business Development
Sizemore Strategic Solutions PUTTING THE
W
“The goal of our company is to help clients focus on the critical success factors of their businesses by alleviating the burden of back office management,” says Jacob Sizemore, CPA and partner in Sizemore Strategic Solutions.
ON CRITICAL FACTORS
ife and business partner Emily Sizemore says, “As a CPA, I saw many small business owners struggling to maintain their financial information which led to poor decision making as they didn’t have the information needed to make sound financial decisions about their business. We wanted to create a company that would support small business owners by acting as their back office – providing information needed to properly run their business. We’ve put together the best of the best cloud based accounting software solutions combined with a team of accounting and payroll professionals. Our clients can have all of this for a fraction of the cost of hiring a qualified internal accountant.” Sizemore Strategic Solutions was founded by the Sizemore husband and wife team and Stephanie Kaelin. Each of the owners has a background in business process outsourcing. The firm serves central Kentucky, but has plans to expand to statewide operations.
Sizemore Strategic Solutions focuses on business process outsourcing (BPO) services in two key areas: accounting and payroll. Their clients are provided comprehensive, reliable and timely financial services so the owners do not have to invest inordinate amounts of time and money dealing with staff and multiple vendors to just manage their back office. “I spent most of my career as a CPA in public practice and I have seen the challenges business owners face on a daily basis obtaining good information and dealing with back office nightmares. QuickBooks has tricked business owners into thinking they are accountants and payroll service bureaus convince business owners they can do payroll on their own. The real tragedy here is that business owners are still getting delayed inaccurate information,” Jacob Sizemore says. Kaelin says, “We make business owners’ lives less complicated, providing more time and energy to spend with their families, and to do what they got in Vol. 1 No. 2 Kentucky Business Quarterly™ | 15
This is not one size fits all, this is not bookkeeping; this is what business owners have been asking for but didn’t know where to get it. —Jacob Sizemore
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business to do in the first place, which we all know wasn’t payroll and accounting. We are in this together with our clients, as a partnership, and the ultimate goal is to help get them to the next level, become better business owners and give them their time back. Time really is money. The firm’s accounting clientele is primarily small businesses in the $1 million to $15 million revenue range. Jacob Sizemore says, “We utilize a collaborative, educational process to work with business owners to establish an accounting system that works for them and meets their needs. This is not one size fits all, this is not bookkeeping; this is what business owners have been asking for but didn’t know where to get it. Our payroll services are for any size business that wants to have worry free payroll. We have solutions that take care of everything from HR to background checks and labor law posters. Again, we have incorporated the best solutions available together in one place to simplify business owners’ lives.” Emily Sizemore says, “We tie it all together. We can provide payroll, accounting, accounts receivable, accounts payable, human resources, pay as you go worker’s compensation insurance, retirement solutions and much more! We pull all those resources together – and more – under one umbrella with one primary point of contact. It doesn’t get more convenient than that.”
The Future
The partners foresee two major trends that will have a dramatic effect on business owners in relation to their financial service providers. One is technology, which constantly changes the business environment. Jacob Sizemore says, “I believe the accounting industry is going through a major shift in service delivery due to developments in technology. I think this change is really going to challenge the traditional accountant. Business owners want insights into their business, not just a financial statement. We have recognized the value of what cutting edge
technologies offer, and are positioning ourselves to be an industry leader.” Emily Sizemore cites age as the second factor. “There are many baby boomers in the accounting profession that will begin to retire over the next decade or so. These people are at the end of their careers and are not embracing the technological advances available today. In my opinion, their clients are losing out on some extraordinary solutions. As baby boomers retire, their clients will be looking to transition their payroll and accounting services. Our firm is prepared for this transition as we’ve structured our company around the technology of the future.”
Consultants Who Listen
The firm’s principals view themselves as their client’s payroll department, not just a service bureau. Their approach for each client is strategic. They note that most so-called payroll providers are really selling software and do not provide the training or support needed to avoid the costly penalties and compliance headaches that are rampant in the payroll arena. As a CPA, Jacob Sizemore has been involved in clients’ payroll matters many times when their service provider was not helping them get notices or mistakes resolved. He says, “Too many business owners try to be experts at everything. I like to ask them, ‘Did you really go into business to become an expert at filing payroll returns or entering information into QuickBooks?’ I believe the business owner needs to focus first on the things that no one else can do. Business owners who outsource also run into problems such as having to juggle multiple vendors and deal with vendors that just pass the buck. We saw an opportunity to meet a need by focusing first on the objectives of the business owners. We are the consultants who listen.” Emily Sizemore says, “Our personal approach is our edge over our competition. All three owners believe in providing a customized solution for our clients. The only way to accomplish this is to listen to the client and read between the lines to fully understand what their
financial needs are. Then we create a package that suits their needs and their budget, it’s not a take-it-or-leave-it approach.” Kaelin, says “We have an impeccable staff that won’t quit, top notch technology and resources that most small businesses simply cannot access without us, but to add to my partners above, it is all about the people. I often times say I am in the people business because ultimately that is what really matters to us.” “You could talk about our cutting edge technology, education, or experience, but at the end of the day what sets us apart is client service. We take ownership of our client’s problems. If there is a way we can make your life easier we are going to do it,” Jacob Sizemore says.
Contact Information
Sizemore Strategic Solutions, LLC 525 Darby Creek Unit #29 Lexington, KY 40509 859-309-4220
Vol. 1 No. 2 Kentucky Business Quarterly™ | 17
Staying Connected
NEWS • ANNOUNCEMENTS CURRENT EVENTS • TRENDS Marshall Hixson Selected for Leadership Lexington’s Class of 2015-16
LEXINGTON, Ky. (Aug. 25, 2015)—Leadership Lexington has selected Stites & Harbison, PLLC attorney Marshall Hixson as a member of the 2015-16 Leadership Lexington program. Through the eleven-month program, participants are provided with opportunities to gain a better understanding of Lexington and the challenges it faces by meeting with and learning from today’s leaders. Hixson is Counsel with Stites & Harbison in the Torts & Insurance Practice Service Group based in the Lexington office. His practice focuses on commercial litigation, coal supply litigation, product liability, and professional liability. Hixson also has significant experience in motor carrier litigation, and has litigated a wide array of complex and catastrophic injury cases in state and federal jurisdictions. His commercial practice involves representing businesses in cases with claims ranging from breach of contract, promissory estoppel, and indemnification to fraud and negligence. Leadership Lexington is a leadership development program sponsored by
Commerce Lexington intended for individuals who demonstrate leadership qualities. The program provides an opportunity for participants to broaden their perspectives and gain increased understanding of community dynamics and public issues. About Stites & Harbison Stites & Harbison, PLLC is a nationally recognized, full-service business and litigation law firm with 10 offices in five states – Kentucky, Georgia, Indiana, Tennessee and Virginia. Tracing its origins to 1832, Stites & Harbison is one of the oldest law practices in the nation and among the largest law firms in the Southeast. For more information, visit www.stites.com.
David Owsley Selected for Leadership Louisville’s Class of 2016
LOUISVILLE, Ky. (Aug. 26, 2015)—The Leadership Louisville Center has selected Stites & Harbison, PLLC attorney David Owsley as a member of the Leadership Louisville program for 2016. The Class of 2016 will spend 10 months of training and hands-on experiences with local leaders who currently tackle our community’s biggest challenges. With the benefit of new perspectives
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and connections, Leadership Louisville graduates are prepared to become effective community leaders. Owsley is a Member (Partner) of Stites & Harbison in the Business Litigation Service Group based in the Louisville office. His practice focuses on intellectual property and complex litigation. Created in 1979, the Leadership Louisville Center is the region’s most valuable resource for leadership development and civic engagement. Its mission is to grow and connect a diverse network of leaders who serve as catalysts for a world-class community through dynamic programming and strong community connections. In 2011, the center was recognized as one of the top seven community leadership programs in the U.S. in a benchmark study by the Center for Creative Leadership, the “gold standard” global provider of executive leadership education and research.
Mark Herren, CEO for Bank of the Bluegrass & Trust Co., presents The Lexington Rescue Mission with a multi-functional copy machine The Lexington Rescue Mission is a non-profit organization dedicated to meeting the physical, emotional, and spiritual needs of hurting people in
RECENT AND RELEVANT INDUSTRY NEWS AND INFORMATION ON EVENTS, MATTERS OF IMPORTANCE AND INTEREST WITHIN THE LOCAL BUSINESS COMMUNITY. ALL SUBMISSIONS FREE OF CHARGE! SUBMIT INFORMATION TO: BRIAN72676@GMAIL.COM
the greater Lexington area. On Sept. 1, the Mission launched a staffing service, Advance Lexington, to provide temporary employment to local job-seekers. “This service is an extension of our employment rediness program, Jobs for Life, and is operated in partnership with Jubilee Jobs and the New Life Day Center” said Jim Connell, Executive Director for The Lexington Rescue Mission. The Mission hires Jobs for Life graduates who do not yet have jobs and places them into temporary work assignments where they will receive wages, on-the-job training, and job placement services to help transition them into regular employment. Advance Lexington is located at the New Life Day Center at 224 Martin Luther King Boulevard in the heart of downtown Lexington. Laura Carr, Director of Development with The Mission said, “The equipment provided by Bank of the Bluegrass will enable this new staffing servcie to have a functional office for staff and communicate with prospective employers in the community.” Mark Herren, CEO with Bank of the Bluegrass & Trust Co. commented, “The bank has partnered with The Lexington Rescue Mission on several occassions and our employees donate their personal time to support The Mission by volunteering to help serve lunch every Tuesday.
When we determined we had this piece of equipment available to donate, The Lexington Rescue Mission was the first non-profit organization we considered because of their contribution to the Lexington community.”
Have a story to share?
CEO Mark Herren with Laura Carr, Dir. Of Development
Andrew Van Horn with Action Coach is Holding A Free Business Seminar 6 Steps to a Better Business Seminars: • Sept. 30 starting at 10:30, 710 East Main St. Lexington • October15th , starting at 9am, 710 Eat Main St. Lexington Andrew is also developing a referrals group in Lexington for small business leaders. It is taking place on September 28 at 8am. It will be held at Blue Lotus Health and Acupuncture, 3720 Willow Ridge Road. Andrew Van Horn, Certified Business Coach can be reached at 859.629.6103 and on the web: www.actioncoach.com/ andrewvanhorn.
All submissions are free of charge! SEND YOUR INFORMATION TO BRIAN72676 @GMAIL.COM
Vol. 1 No. 2 Kentucky Business Quarterly™ | 19
Workplace Violence
BY BEVERLY CLEMONS
With the recent terrible tragedy in Roanoke, VA where 2 television station employees were gunned down live on the air, the attention of employers and employees nationwide is focused once again on violence, and more specifically, workplace related violence. Since the 1980s, violence has been recognized as a leading cause of occupational mortality and morbidity. According to the Bureau of Justice Statistics, an estimated 1.7 million workers are injured each year during workplace assaults and hundreds are
fatally wounded. In addition, violent workplace incidents account for 18% of all violent crime in the United States. Nearly 2 million American workers report having been victims of workplace violence each year and unfortunately, many more cases than that go unreported according to the United States Department of Labor website. The National Institute for Prevention of Workplace Violence, Inc. has released its 2013 Workplace Violence Fact Sheet, a repository of information, statistics and charts on workplace violence presented to give Human Resources, Threat Management, Security, Risk Management and Operational Managers current information on workplace violence. Data for the report was provided by the Bureau of Labor Statistics, Department of Justice, National Institute of Safety and Health (NIOSH), NCCI Research and more.
KEY FINDINGS:
• Workplace homicides and other violent
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acts are the second leading cause of death for women at work • In 2013 9% of all workplace fatalities were homicides. • For the first 10 years of the 21st century, an average of 558 work-related homicides occurred annually in the U.S • Workplace suicides rose to an all-time high of 270 incidents in 2010. • Estimated more than half a million incidents reported each year • Most often occur in nursing homes, social services, hospitals and late-night convenient stores • Workplace violence costs an estimated $121 billion a year nationwide • Non-fatal assaults alone result in more than 876,000 lost workdays and $16 million in lost wages While workplace homicides are not common, an analysis by The Washington Post shows the share of workplace homicides appears to be increasing as is the desire by the perpetrators to make a statement, or be famous.
So many of the recent events that have occurred have had the element of individuals who want their story recorded, broadcast, publicized, and shared around the world. This is a very scary and disturbing trend. Interestingly enough, many experts and professionals are also linking the use of anti-depressive drugs to increased rates of workplace violence. Fueling the perception that America is an overmedicated society, a new Mayo Clinic study finds that nearly 70 percent of Americans are on at least one prescription drug, and more than half take two. Researchers found that the “second most common prescription was for antidepressants – which suggests that mental health is a huge issue and is something we should focus on. The third most common drugs were opioids, which is a bit concerning considering their addicting nature” according to Rick Nauert, PhD, Psych Central. In a paper titled “Antidepressants and Violence: Problems at the Interface of Medicine and Law,” David Healy, a British professor of psychiatry at Cardiff University and an authority on side effects of psychiatric drugs, writes: “Legal systems are likely to continue to be faced with cases of violence associated with the use of psychotropic drugs, and it may fall to the courts to demand access to currently unavailable data. The problem is international and calls for an international response.” UC Haas School of Business professor Jo-Ellen Pozner says one possible key to addressing workplace violence is to find ways to address employees’ mental health and wellness. “It seems clear that there was an emotional, mental health issue going on here (Roanoke shootings) and that’s I think the key to figuring out how to deal with these things in the workplace,” Pozner said, “I think there’s a public policy question there that we need to address in a larger level, that’s less about workplace violence and more about the violence in our society today.” Obviously, this issue is a complicated issue.
So What Can, and Should, An Employer Do? Employers have a legal and ethical obligation to provide employees with an environment free from threats and violence. Beginning this process before you even hire someone is the first step in prevention and that starts with your recruiting and hiring process. Organizations should have a comprehensive hiring system and strategy, and be clear regarding the knowledge, skills, abilities, and attitudes that are required for each position within the organization. Prospective employees should be screened and evaluated extremely carefully to make sure there is a close match. Conducting background checks prior to hire and then developing clear, enforceable policies for your organization are also vitally important. Some of the policies you should have in your handbook to address this issue include Harassment, Anti-bullying, Open Door, Dispute Resolution, Progressive Discipline and Electronic and Social Media. In addition, employers should adopt and practice fair and consistent disciplinary procedures, foster a climate of trust and respect in the workplace, and have appropriate and safe reporting mechanisms in place. Best practices for employers also include providing regular training in the areas of Harassment, Bullying and Workplace Violence for new and current employees as well as managers and supervisors. The training for employees helps them to identify the early stages of a threat or potential violence and coaches them on how to report their concerns. Training for your managers will assist them with recognizing and being more aware of possible threats, being familiar with internal policies and understanding the law and OSHA guidelines. In addition, employers should remember that two other key components to all of this is to take immediate action when a concern is reported and having an Employee
Support System in place (EAP / Mental Health Services through your insurance plan.) Many companies now are taking additional steps to ensure that their buildings and offices have adequate building security, and that employees have proper employee identification. While some people may exhibit what is deemed as bizarre or eccentric behavior, it might not be anything, according to Dr. Andrew Franklin, Norfolk State University Assistant Professor of Psychology. While all employers and employees need to be diligent and observant, it is important that we do not fall into a state where we are constantly paranoid or suspicious … just cautious. ABOUT THE AUTHOR Beverly Clemons is president of CMI Consulting, based in Lexington, Kentucky, a KGA/KACS partner company that provides organizations with human resource solutions. She can be reached at beverly@cmiconsulting.com. Learn more by visiting www.cmiconsulting.com.
Vol. 1 No. 2 Kentucky Business Quarterly™ | 21
4 Ways to Leverage Your Business
BY ANDREW VAN HORN
Let’s talk leverage this quarter. Leverage is doing ever more with ever less, and your team is the group of people that can make that happen. In fact, without leverage and a team you are never going to take your business to the next level and have a business that will work without you. You are stuck in a job that you own and nothing more. How does one leverage their business? The only to leverage your business is what I call The 4 Ways. They are People and Education, Systems and Technology, Delivery and Distribution, and Testing and Measuring. Each of the four can be broken down and worked on at the same time. Let’s start by looking at People and Education.
As a business owner, it is imperative for your survival that you train and educate your staff. Educating your staff requires time and money to be invested in your workforce. The most common excuse I get from business owners is that if I train my people they might leave. The answer is yes, they might, but if you don’t train them, they will stay, and an untrained employee is a cost, not an asset. There are many strategies that you can sue for this, here are my favorites: • Scripting out everything that needs to be done and said. • Doing personality assessments and training. • Skills training for each person in their role. • Have each employee read one book a month. • Individual and group coaching sessions focused on growth and goal setting in their job.
People and Education
Systems and Technology
If your business is growing it will require you to hire a team, there is only so much that an individual owner can do, time is the limiting factor. To achieve wealth and massive cash-flow, you must hire. Once you hire employees, you have to start to leverage their time. That is where People and Education come in.
One of the best books I ever read on Systems and Technology is Frank Gerber’s E-myth. It is a good book, and if you have not read it, I encourage you to go out there and buy it today. Systems allow you to replicate a great result consistently regardless of the employee performing the task. Everything in your business should have a system attached to it, this allows for
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consistent delivery over a consistent period so you can maximize the profit of your business. The biggest excuse most owners give me about systems is that they just don’t have the time to implement, come up with, or create a system in their already busy days. I tell that their days are busy because they do not have a system in place. Again, a system allows anyone the path to getting the same result. Systems are the gold mine that allow you to free up your time, and they can be easy to create. Here are some simple tips that can get started on creating systems for your business. • Use your phone camera to take pictures and video of how to perform daily tasks, then everyone can duplicate that. • Download a voice recording app on your phone and simply record how something to do a task Then you can get on Fiverr.com or a similar site to have it transcribed into a system. • Create a flow-chart of a process, this can be done on a piece of notebook paper in about 10 minutes. • Invest 5 minutes as you perform a task to write down how you did it step by step. The most important to remember when creating systems is this rule: do the work once and get paid forever for it. Systems are about doing it once and then making money from that process forever.
Without leverage and a team you are never going to take your business to the next level and have a business that will work without you.
Delivery and Distribution
A great way to leverage your business and exceed customer expectation is looking at how you deliver and distribute your products or services. Distribution was WalMart’s advantage and what help them to expand nationally. They could get the goods everywhere in the country cheaper than anyone else. Look at your business. What sort of innovations can you create or reuse? In my business, I leverage delivery through the use of my cell phone and moving my clients to phone coaching instead of in person coaching. It was a win for me and the clients because it greatly reduced drive time for each of us, and we were still able to get the same amount done. Here are some thoughts to get you started. • Switch from in-person to the phone or video conference. • Use someone else’s delivery network, or copy how they do it. • Look outside of your industry for ideas that can give you a competitive edge. • Use cloud based programs for greater collaboration and efficiency. The central idea to most of the strategies listed above is research, learning and innovating from what you learned for your business. Ask yourself how it can be it achieved not if it’s a good idea to do. The how questions generate ideas that allow you to achieve leverage in your delivery and distribution.
Testing and Measuring
The last of the 4 Ways to look at and I think the most important, is a fundamental strategy for every business to work on immediately. Testing and Measuring gives you the data you need to make educated choices about your business. Without testing and measuring going on in your business, you are doomed to making changes without knowing if they were effective or not. Everything in your business should have a couple of key performance indicators (KPI) to help you measure it. KPI’s are easy to figure and track if you follow the below strategies. • Use a spreadsheet to tally what you want to track. Then use formulas to convert the raw data into percentages. As you make changes see if the percentage are moving up or down. • Run the numbers first to see if a new venture/product/idea will produce enough revenue to be a viable Idea. • Use and track your business with 5 Ways Formula: Leads X Conversion Rate = Clients X AVG $ Sale X # Trans. = Revenue X Profit Margin = Profit By using the above strategies, you can start to forecast the effect on your profit the actions you take will have. Testing and measuring also gives you quick feedback on
mistakes and successes that are happening within your business allowing you the ability to change direction and adjust.
The 4 Ways
People and Education, Systems and Technology, Delivery and Distribution, Testing and Measuring are the 4 Ways that you start to get your business to become a highly profitable cash machine that does not require your daily direction. A business machine gives you the freedom to choose what you want to do with your time. You can invest time in a non-profit, travel, and whatever interests you have. I encourage you to start creating a business that is truly a commercial, profitable, enterprise that will work without you.
ABOUT THE AUTHOR Andrew Van Horn is best summed up in one word: Abundance. Abundance simply means having enough time and money to do the things that you want to do. As an ActionCOACH Business Coach Andrew helps owners all over the area in building a business that creates abundance for the owner that can be passed down for generations. He loves helping businesses grow into their full potential because a growing business creates jobs and money that can bring about positive change in the area. His goal is to help 1,000 businesses in the next five years achieve abundance.
Vol. 1 No. 2 Kentucky Business Quarterly™ | 23
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Vol. 1 No. 2 Kentucky Business Quarterly™ | 25
BY BRENT COOPER
Don’t pay the Ransomware!
At a tech conference in Washington D.C. earlier this month, we heard from security experts from all over the country that threats to computer networks have risen dramatically over the past year. According to one security business, there were 140 million new security threats last year alone! Some of the most publicized attacks, increasing at an alarming rate, are referred to as “Ransomeware” attacks. Ransomware attacks encrypt the data on a computer and/or network. Users are then extorted in order to receive the decryption key. CryptoLocker, KEYHolder, or CryptoWall are all examples of Ransomware. If you receive a message like this, you’re having a bad day: “Your files are encrypted. File
Decryption costs - $500. If you really value your data, then we suggest you do not waste valuable time searching for other solutions because they do not exist.” Once your data is encrypted, you are faced with either restoring data from backup, or paying the ransom. Paying the ransom usually involves converting money to Bitcoin (the currency of choice for criminals), and transferring to the criminal’s account. That process is an adventure that can take up to 24-48 hours for those who aren’t familiar with how to do it, and there isn’t any guarantee that it will work. Some have paid the ransom and still lost their data! Dell estimates that over the first 6 months of the year, CryptoWall infected over 625,000 computers throughout the world. 250,000 of that happened in the United States. Why has there been such a rise? Well, unfortunately, people are paying the ransom. People decide they just can’t afford to lose their data, and they pay up.
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On one hand, you can’t blame them. They are, after all, victims of a crime and just doing what they can to recover their information. Paying $500-$750 is much better than losing something that is priceless. On the other hand, the reason we have seen such a rise in ransomware attacks is because the criminals are getting paid. When asked why he robbed banks, Willie Sutton replied, “Because that’s where the money is.” The same thing could be said by these cybercriminals. If everyone stopped paying the ransom, we probably would have a lot fewer attacks. But according to various surveys, anywhere from 30%-50% of victims are paying the criminals. Even the police have paid the ransom! It’s hard to believe, but it has been reported that law enforcement officials in Illinois, Massachusetts, Tennessee, and Pennsylvania have all paid the ransom when cybercriminals encrypted police computers. (The reason we know they paid it is because when it comes
to government agencies, those kinds of expenditures are public record.) As I’ve said before, you can be a victim of cybercrime, even if you do everything right. Once you plug into the Internet, nobody can guarantee you’ll be safe. That said, many businesses and organizations throughout our country aren’t taking basic security precautions, including some in law enforcement. It is one thing to have locked doors, night vision cameras, and an ADT security system. You might still get robbed, but you’ve lowered the odds tremendously. It is quite another to have your doors unlocked, no cameras, no security system at all, and a sign in your front yard that says “We aren’t watching the place”. The latter is where many of our homes, businesses and government agencies are when it comes to computer network security. We need to talk about how these attacks are happening, spread the word, and take basic precautions to protect ourselves. Some of these attacks are being directed toward systems that either don’t have updated anti-virus and/or anti-malware software, or don’t have the latest software security patches, or both. It is important to stay up to date. That said, most of the attacks I’ve personally seen lately have been coming through fake e-mails and websites. For example, someone receives an e-mail from UPS, and they click on the link embedded within the e-mail. So we need to spread the word: If you get an e-mail from UPS telling you to check the status of your recent shipment, don’t click on the link. Sure, it could be legitimate, but it could also be a trick. Why risk it? I realize that you may have just ordered something and you’re in a hurry. But it doesn’t matter, don’t click the link. I know, it can be inconvenient. But remember, security is always at odds with convenience. Instead of clicking the link in the e-mail, go to the UPS website directly. The same thing goes for e-mails you receive from banks and credit card companies like Citibank, Discover and American Express. If you receive an
e-mail from one of them, don’t click on the link. Instead, go to their website directly. And if you get an e-mail from the FBI marked urgent, before you click the link, ask yourself how many e-mails you get from the FBI? If the answer is none, don’t click the link! In fact, if the answer is a bunch, still don’t click the link! These criminals are smart. They monitor unencrypted communications and modify e-mails to appear as though they are the same as something you would typically receive. So don’t be fooled! Next, remind yourself that you can never have too many backups. Backup everything, and backup often. And test your backups on a regular basis. Periodically pretend that you’ve lost everything and go through the process of trying to restore. New disaster recovery services allow you to backup all your data to a local drive(s), as well as to the cloud. Now, if or you are wondering what the “cloud” is, it is just a hard drive in another location. For offsite “backup in the cloud” services, you are paying someone else to securely store the backup copies of your data. New automated software tools can be configured to automatically backup your data as often as you want (every 15 minutes, hourly, etc.). And these solutions can copy data offsite “to the cloud” so your data is protected regardless of the disaster or attack. Assuming your entire system is encrypted in a ransomware attack, with an automatic offsite backup solution in place, you can retrieve all your data and avoid paying the criminals. Personally, I like a mix of onsite and offsite backup solutions, because even with a fast Internet connection, it can be painfully slow retrieving all your data from the cloud in an emergency. With an onsite copy of your data, recovery time is dramatically reduced. I also prefer to use cloud solutions that I can physically get to in an emergency. That is, if something is wrong with the Internet, or if it isn’t fast enough, and I
still needed access to my data, can I get a hard drive shipped to me and/or can I get physical access to my offsite system? Regardless of the type of disaster recovery solution you choose, having one in place, and testing it regularly, is ultimately the best way to protect your data from the ever increasing attacks we are seeing. We may not be able to completely thwart the bad guys. After all, we are in a constant battle. I’m not sure we’ll ever be able to spike the ball and declare that we’ve won. But we can collectively make it more difficult for the criminals to exist. If we collectively invest in basic security training, perform regular updates on our software, and implement consistent & reliable backups of our data, we’ll all be a lot safer. ABOUT THE AUTHOR Brent Cooper is President of C-Forward, an I.T. services company founded in 1999 with locations in Lexington and Covington. A University of Kentucky graduate, Brent has over 24 years experience in computer networking. Brent is active in the community serving on the Kentucky State Chamber Board of Directors, the Covington Partners Board, and NKY Education Council Board. Brent has received numerous awards over the years including the Boy Scouts’ Trailblazer award and the prestigious “Unity Award” from the NKY Chamber of Commerce, and was named one of Leadership Northern Kentucky’s Leaders of Distinction.
Instead of clicking links in e-mails, go to the websites directly. Vol. 1 No. 2 Kentucky Business Quarterly™ | 27
10 Tips to Improve The Art of Sales
BY BRIAN LORD
Sales is an art, not a science. It needs to be practiced. Here are 10 helpful sales tips to keep in mind as you work on your sales process.
1. Be Trustworthy: It’s not what you say; It’s what your customer believes.
You can have the best sales presentation in the world, but if the customer doesn’t believe your proposition, then you don’t have a chance. Take the time to engage with the customer. Ask them questions and let them tell you their wants and needs. Yes, many times they don’t know what their needs are and you’ll have to guide them, but in the end, if they don’t believe it, you don’t have a chance. Don’t be in a hurry. Practice getting to know the client.
2. Be Honest: If you don’t know the answer, do not guess.
People will ask you tough questions, and you may not always know the answer.
The person asking you may be testing you, knowing the answer full well. And if you fumble, it’s very hard to rebuild credibility. Do not guess. Do not make up an answer; people can tell when you are making things up. If you don’t know or can’t remember then say that. “I don’t know; I have not been asked that before,” or, “I have to think about that some more, but let me get back to you on that question,” are legitimate answers. Telling them you will get back to them is an answer that lets them know you hear them and are not dodging their question.
3. Be Personable: Develop a relationship.
It can be hard with sales over the phone, but the Golden rule of sales states that if a customer likes you, they will find a reason to buy from you. Conversely, if a customer does not like you, they will find a reason not to buy from you. Building a sales relationship is hard work. It does not happen every time, but when you can get to know someone, it increases the chance you will get a sale.
4. Be A Closer: Never go into a sales call not knowing how you’re going to
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close the sale.
If you don’t know where you are going, then how will you get there? The most common part left out of any presentation is the close. Plan for it upfront by developing the strategy and your course of action. This does not mean you are only going to use one type of closing technique. On the contrary, it means you are going to be ready to close using several different techniques based on what the customer tells you.
5. Be Clear and Direct.
When pitching, do not use complicated diction. Pride yourself, instead, on being able to explain the concept as quickly, clearly and simply as possible. This is important because the biggest problem in sales is client confusion. Confusion does not lead to a “Yes.”
6. Be Organized For What Matters: Prospecting Without new prospects you don’t get new clients. Take time to be organized with a dedicated time set aside either daily or weekly to do your prospecting. Too many salespeople find themselves
spending far too much doing everything else but prospecting. If you don’t schedule it and hold yourself accountable then you won’t do it. I set aside one day a week for just prospecting phone calls. Then I set aside two other time slots in my week to work on proposals. Tuesday-Thursday are my main meeting days for sales.
7. Be Confident: Believe in yourself and what you’re doing to help your customers.
Why should anyone buy anything from anybody if the person from whom they are buying doesn’t even believe in it? There’s a reason why confident salespeople are more successful. Passion is contagious, so be a leader – have confidence that what you are selling is awesome, it’s going to meet a need or give a desired outcome. If you don’t see how this product will help, then don’t sell it.
8. Be On Time: Show up and show up on time.
More sales are lost because the salesperson either failed to show or failed to follow through. It’s sad that something so basic and easy deters so many sales, but it’s a fact. This is the main reason
why when companies are looking for salespeople, I tell them to find candidates who have a proven track record of selfdiscipline.
9. Be Constant: Follow on your prospects
I read from the National Sales Executive Association that 48% of salespeople never follow up on a prospect. And that 25% of salespeople make a second contact and stop. And only 12% of of all salespeople only make three contacts and stop. Only 10% of salespeople make more than three contacts. But here is the kick in the teeth: for every business owner, they said that 80% of sales are made on the fifth to twelfth contact. The sales rep that is constantly following up with people is the one who gets the sale. Stay on people. Be polite. You might only be on contact number three or four and it’s not going to be for several more contacts that that person will say, “yes.” This means you have to keep them interested, keep building that relationship, keep talking to them about benefits and their lost opportunity costs.
10. Be Self Motivated:
A great way to stay motivated is with
positive self talk. This can become your secret weapon to stay motivated and happy throughout your workday. Think of it this way: you can plant the seed of possibility in your life, but the seed cannot sprout and grow without moisture and fertilizer. Think of the positive self talk exercises as preparing the soil with moisture and fertilizer. When you set your sales goals, you have already planted the seed. Once you establish your goals, you should review them every morning. If you don’t seem to be making progress in achieving them, listen to your own self talk. Focus on doing what you can control not on what is out of your control.
Sales is an art and every sale is a new challenge. So work hard at your sales process and be willing to grow. Vol. 1 No. 2 Kentucky Business Quarterly™ | 29
BY MARK SIEVERS
Seller Financing in Small Business Sale Transactions
Each year thousands of small business (defined here as the sale price under $2,000,000) are sold. This will likely continue and even accelerate over the next 15-20 years for a combination of reasons: 1. According to the U.S. Census Bureau, about 70% of all businesses (approximately 4.2 business) are owned by people over 53 years old . 2. About 8,000 baby boomers will turn 65 years of age over the next 15 years. 3. Baby boomers generally have fewer children then their parents which creates succession and liquidity issues. 4. There are also thousands of businesses owned by private equity firms that will become available . 5. It is estimated that 65-70% of small companies in the US (approximately 10 million) will be for sale during the next 5-10 years according to Inc. Magazine. This is a demographic and business cycle never before experienced in our country and has real ramifications.
While the deal structure will vary with each business sale transaction, most of the sales will involve some level of seller financing. In fact, some sources estimate that as much as 80% of all small business sales includes some seller financing. For sales of business under $500,000 the % of seller financing may be higher. This is also a trend that will likely continue and even accelerate. An important reason for this is that if every owner in the over 53 age group sells their business it is estimated the amount of capital required to fund and close those transactions is in excess of $10 trillion. Many experts believe this will create a shortage of capital available for small business acquisitions. What this will likely mean is that seller financing and creative financing will become more commonplace out of sheer necessity. In its simplest form, seller financing is where the seller of a small business will agree to a deal where the buyer will pay some of the purchase price in the form of a promissory note. Sometimes the deal structure will involve only the buyer down payment and a seller note for the balance. Alternatively, many deals involve a mixture of buyer down payment, bank financing (often an SBA loan) and seller financing.
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Certainly most sellers would prefer to receive the entire purchase price at time of closing, but most also realize this is not common nor realistic. While being uncomfortable with playing the role of a bank and having a natural fear of the unknown there are some important positive considerations a seller should understand. If a seller is willing to offer some seller financing at the beginning of the sale process it can attract more buyer prospects and even accelerate the sale process. The more buyers that are in the buyer pool, the greater the chance of obtaining the highest price for the business. There are some buyers who won’t even consider a business purchase opportunity unless the seller offers seller financing. One of the reasons is that by offering some seller financing, the seller is showing faith in the future of the business. There may also be tax advantages to seller financing in that capital gains from a small business sale will be stretched out over several years. Another factor is that often a buyer wants seller transition assistance post closing and in some cases a short, medium or long term consulting arrangement to capitalize on seller knowledge and business relationships. Having seller financing in place increases buyer confidence that this
post closing relationship will be optimal. However, the confidence aspect works in both directions. A buyer who has demonstrated business success, knowledge of the industry (or a close-related industry), and a strong business plan will give a seller more confidence in agreeing to seller financing . From the buyers perspective, there are advantages in addition to increased assurance that the seller will be helpful post closing and has confidence in the business. If a business does not have a significant tangible asset collateral asset base this could limit or impact how much traditional bank financing he/she will obtain to fund the transaction. Where seller financing can come into play is that it can be the funding source for the goodwill portion of the deal. If the deal is all buyer down payment and seller financing it can lead to a speedier closing and lower closing costs. The structure of the seller financing will vary with each deal but often will contemplate some or all of the following and more: 1. A promissory note that sometimes includes a personal guarantee. 2. The term of the loan can vary greatly from 1-2 years to 10 years or more. If the
deal includes an bank SBA loan the bank and SBA may dictate not only the term of the loan but some of the repayment stipulations. For example, they may only allow interest only payments for the first year or two. 3. The interest rate is often 1-2 % points over prime but can vary greatly and is part of an overall negotiation. Additionally, a bank/SBA will have some input here. 4. There are often clauses in the note that stipulate remedies for late payments. 5. Sometimes life and disability insurance policies on the buyer and/or his key management team are used to add security to a seller financed transaction . As a seller or a buyer thinks through seller financing it is recommended that they consult appropriate professional financial and legal advice. In addition to seller financing the future business transaction environment also portends a fertile ground for other creative financing vehicles. One of these is royalty financing. In this lending model the loan is paid back through a percentage of business’s revenue over a certain period of time up to a specified amount. One of the advantages to this is the payback obligation is flexible depending on revenue which for certain
businesses may have important advantages (especially those with seasonal or other cycles). In summary, seller financing of small and medium size businesses are extremely important and are here to stay. In fact, the concept is likely to increase in importance and use. All professional who may be involved directly or indirectly in such transactions need to be aware of the importance of seller financing and the evolving environment for this lending model . ABOUT THE AUTHOR Mark Sievers is the owner of The Sievers Company LLC and is a central Kentucky based business broker and consultant. Representing both buyers and sellers, he brokers small and medium sized businesses, franchises, equipment, and intellectual property. He also provides small business consulting services. PHONE: (859) 576 2257 EMAIL: thesieversco@aol.com ON THE WEB: www.thesieverscompany.com
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