Thinking Bigger Business—Sept. 2017 by Thinking Bigger Business Magazine

VOL. 26 // ISSUE 9 // SEPTEMBER 2017

BIGGER GROWTH

Big Questions About Big Ideas

BIGGER HR

Making the Most of Two Weeks’ Notice

FLIPPING THE SWITCH Inayat Noormohmad and the team at SARIN Energy Solutions shed light on energy efficiency.

» iThinkBigger.com

Helping with challenges you didn’t even know you had. When you’re busy conducting business, it’s easy to get hung up on hidden obstacles that delay your growth. That’s why we offer solutions to help keep you successful, from streamlining your cash flow to financing options and beyond. We’re committed to handling every challenge that faces your business, and we’ll keep innovating so you can keep an eye on the big picture.

Seeking strong, talented, local partner interested in a long-term relationship. Long walks on the beach optional. Making clients successful across the globe is a pretty big job. We couldnâ&#x20AC;&#x2122;t do it without the right, committed partners helping us deliver complex projects every day. Visit our profile at burnsmcd.com/ThinkingBigger.

Offices Worldwide

CONTENTS

SE PTE M B ER 2017 VOL. 26 // ISSUE 9

SPECIAL FOCUS

27 Transitioning Your Business Are you ready for major changes in your business?

D E PA R T M E N T S

07 The Bigger Picture 08 Biz Bits 11 25 Under 25 Â® Updates 12 BIG | deals 50 BIG | shots

OUTLOOK

18 KC Futures Degrees of Success at Missouri Innovation Campus

S M A R T S T R AT E G I E S

35 BIGGER | marketing The real ROI of social media

36 BIGGER | growth What do your employees know about your innovation strategy?

38 BIGGER | hr Transitioning business knowledge when you lose an employee

40 BIGGER | law Rule 504 could streamline capital raises

22 | KC ENTREPRENEURS HE ON T R E V O C

LIGHTING

THE WAY SARIN Energy Solutions brightens bottom lines with energy savings.

14 4

THINKING BIGGER BUSINESS // September 2017

B IG I N F LU E NC E

| 16

B IG S TA R T S

| 16

MADE TO LAST

C O M PA N Y T O WAT C H

KC M A D E I T

ENTREPRENEURIAL JOURNEY

Bardavon Health Solutions

HOLSTRit

Mary Lou Jacoby

Matt Condon leverages data for better care.

Tamra Johnson has a hit on her hands with hands-free product.

Scrappy determination leads to success. SMART COMPANIES THINKING BIGGERÂ®

CONTENTS

SE PTE M B ER 2017

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THE BIGGER PICTURE

What’s the Difference?

eff Bezos. George Lucas. Steve Jobs.

career as a blockbuster film maker and revolutionized movie special effects.

What do they have in common?

Jobs dropped out of college so he could

They were different as kids. They each

continue to tinker with computers. He event-

were driven by curiosity. They pushed boundaries to the point they were considered nerds. But as adults, they leveraged their differences into successful businesses and brands. They earned

ually changed the way we use our phones, the way we listen to music, the way we communicate. Heck, he changed the way most people live. I talk to dozens of business owners every week.

reputations as best-in-class in their industries.

One question I ask consistently is how their

Bezos, the founder of giant retailer Amazon.com,

business is different. The response is often “our

changed the way we shop. As a kid, he was always

people” or “our service.”

tinkering. He wasn’t afraid to experiment to figure out how something worked so he could repair it. The story goes that he even used a screwdriver to take his crib apart when he was just a toddler. In his youth, Lucas was a sci-fi junkie, and he studied film before film schools were a thing. He ended up attending one of the first such schools in the country. He parlayed that passion into a

The reality is this: If you’re in business, you better have good people and good customer service. That’s a baseline for being successful. Go deeper: How does your business separate itself from others in your industry? The answer is the difference between mediocrity and success. Find your difference. Then make a difference.

Ke lly S can lon

// Publisher // kscanlon@iThinkBigger.com

SMART COMPANIES THINKING BIGGER®

BIZ BITS

Williams to Lead KC’s Heavy Constructors Association Bridgette Williams, a longtime executive with the Heavy Constructors Association of Greater Kansas City, has been named executive director of the Heavy Constructors Association. Williams will be the first woman and the first AfricanAmerican to serve in the role. She had been the deputy director since 2010. Before that, she was the leader of the Greater Kansas City AFL-CIO.

EDCKC Names New LCRA Chair Steve Hamilton has been tapped as the new Land Clearance for Redevelopment Authority (LCRA) chairman for the

Economic Development Corporation of Kansas City (EDCKC). Hamilton is an attorney with Stinson Leonard Street LLP who has practiced real estate development law for more than 40 years.

Heartland Civic Collaborative Announces Federal Advocacy Agenda

The HCC has concentrated its efforts on four strategic areas: federal advocacy, transportation, entrepreneurship and life sciences. The federal advocacy agenda is designed to elevate the influence of eight U.S. senators and 19 U.S. representatives and provide a strong presence in national policy debates to assure legislative and regulatory actions do not negatively impact the region.

Four Midwest cities—Des Moines, Kansas City, Omaha and St. Louis—partnered in 2016 to form the Heartland Civic Collaborative. Recently civic leaders from those metros announced their Federal Advocacy Agenda, which highlights the larger regional issues they share. The collaborative’s mission is to leverage opportunities and capitalize on the collective assets of the region to strengthen the entire region’s competitiveness and opportunities for economic development.

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THINKING BIGGER BUSINESS // September 2017

Samantha Power to Keynote Women’s Foundation Event The Women’s Foundation is bringing in Samantha Power, the 28th and youngestever U.S. Ambassador to the United Nations, as the keynote speaker of its annual event on October 3, from 4 p.m.-6 p.m. in Helzberg Hall at the Kauffman Center for the Performing Arts. More information and tickets are available at http://bit.ly/2w5QPq0. Now in its 25th year, the Women’s Foundation annual event raises funds to offset the cost of the foundation’s work in funding research, advocating policy solutions that positively impact women and their families and helping women obtain more civic leadership roles.

Meet The New Mobank! WE’RE GROWING – WITH MORE LOCATIONS… MORE CAPACITY… MORE WAYS TO HELP YOU MEET YOUR FINANCIAL GOALS You may know us as Bank of Kansas City, which was formed as a division of BOK Financial in 2006. Or you may know us as Mobank, a local bank with four locations, a reputation for world class personal service and more than a century of staying power. In 2016, BOK Financial acquired Mobank, and on February 20, 2017, our two Bank of Kansas City locations became Mobank banking centers, giving us a total of six locations in the Kansas City area.

Brookside

•

Crossroads

•

Downtown

•

Lee’s Summit

•

Overland Park

•

Prairie Village

WE LIVE, WORK AND PLAY WHERE YOU DO BOK Financial employs more than 300 people in the Kansas City metro area. Community is important to us – because we’re a part of it. Between our banking centers, our online mortgage company (HomeDirect), and our broker dealer operations, we have hundreds of loyal employees who are as committed to this area as you are.

WE BRING THE A-TEAM BOK Financial’s Treasury Service Customers have ranked our service “A+” in the most recent Phoenix-Hecht Survey.* See for yourself what “A+” rated service is all about. With clients from coast to coast, state of the art technology and customized solutions, we can help you improve cash flow, prevent fraud and streamline your business operations.

WE HAVE THE CAPACITY TO LEND WITH A FULL SUITE OF PRODUCTS That’s what you get from a top 25 U.S.-based bank.** Financial services to cover all your needs, including business loans, treasury services, investment management services, mortgage and wealth management. And, of course, everyday banking – in person, online or on the go. BOK Financial is a $33 billion, publicly-traded financial services company based in Tulsa, Oklahoma (NASDAQ: BOKF). We provide banking services throughout the southwest at regional banking locations.

WE VALUE THE COMMUNITIES WE SERVE BOK Financial continually gives back to the many communities it serves, including $5.2 million in contributions to more than 780 non-profit organizations in 2015. In addition, our employees pledged more than $2.2 million to support local United Way agencies. Combined with the corporate BOK Financial donation, our total United Way commitment was $3.2 million in 2015.

816-881-8220 | www.mobank.com

© 2017 BOK Financial Corporation. Banking services provided by Mobank, a division of BOKF, NA, Member FDIC, Equal Housing Lender. BOKF,NA is the banking subsidiary of BOK Financial Corporation. *Results are from the 2017 Phoenix-Hecht Cash Management Monitor Survey, which monitors both public and private U.S. corporations with sales of $40 million and greater. It ranks corporations in three performance categories: product performance, bank perception and relationship management.**BOK Financial is among the top 25 largest U.S.-based commercial bank holding companies in the U.S., based on total assets, according to SNL Financial as of 6/30/16.

DON’T WAIT,

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2 5 U N D E R 2 5 ® U P DAT E S

The DVS Group Helps Ink Deal Atlas Labels & Packaging, a custom packaging and promotional distributor based in Kansas City, Kan., sold to St. Louis-based ALP Holdings on June 30. Mergers and acquistions firm The DVS Group (Class of 2008) was the exclusive advisor to Atlas President Robert Drumm during the transaction. Terms were not disclosed.

The Purple Guys delivers remote service solutions, predictable pricing and preventive maintenance to its clients.

Validity Screening CEO Addressed HR Conference Darren Dupriest, president and CEO of Validity Screening Solutions (Class of 2010), recently presented at

Purple Guys Acquires We Are IT The Purple Guys (Class of 2005) has acquired

outsourced IT specialist, We Are IT. The combined company will employee 40 people and serve more than 200 client organizations with more than 5,000 local workers. The deal took effect on Aug. 1. Terms weren’t disclosed.

the Missouri Society for Human Resource Management State Conference on the risks and compliance issues associated with using social media throughout the pre-employment process of recruiting and hiring.

25 Under 25® Alum Donate $1 Million to Startup Foundation Affinity Worldwide, owned by 25 Under 25® alum Mike Wrenn, will donate $1 million to

help fund the Kansas City Startup Foundation’s programs for local entrepreneurs. Wrenn has also gifted ownership of one of his companies—the Center of Entrepreneurial Ecosystem Development (CEED)—to the foundation. The foundation is responsible for an array of programs and events—including Startland News, MECA Challenge, Kansas City Startup Village and others—that support Kansas City startups and entrepreneurs. “Entrepreneurship is vital to the economy,” said Wrenn. “Those of us who have had success in business over the years should help those just starting, because none of us who are successful started at the top.” Two of Wrenn’s companies, Wrenn Insurance (Class of 2005) and Affinity Group Management (Class of 2011) are past winners of the 25 Under 25® Awards.

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816.753.2166 Commenco.com/Rental SMART COMPANIES THINKING BIGGER®

BIG | deals

AWARDS/RECOGNITIONS

ment (RDOM). URAC promotes healthcare quality through accreditation, certification and measurement.

Redivus Health Is Finalist Olathe-based Redivus Health has been selected as one of three finalists in the Clinical Information Management category of the Fierce Innovation Awards: Healthcare Edition 2017. The awards are given by the publisher of FierceHealthcare. Applications were evaluated based on competitive advantage, financial impact/value, market need and overall innovation.

HR Firm Receives CPEO Status Axcet HR Solutions

Heritage Biologics Earns Accreditation Heritage Biologics has earned URAC accreditation in specialty pharmacy. The company is a leader in Rare Disease Outcomes Manage-

has been awarded Certified Professional Employer Organization (CPEO) status by the Internal Revenue Service. It is the first professional employer organization in the Kansas City area to receive the designation.

Plaza Restaurant Wins National Award Chaz on the Plaza has won a TripExpert Experts’ Choice Award based on reviews from Gayot, Forbes Travel Guide and more than 70 other media outlets.

LockPath Garners Gartner Attention LockPath, an Overland Park company that provides governance, risk management and compliance solutions, has been included in Gartner Inc.‘s Magic Quadrant for Business

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THINKING BIGGER BUSINESS // September 2017

Continuity Management Program Solutions, Worldwide. LockPath was one of 12 vendors included in Gartner Inc.‘s report, which was published July 12. It recognized LockPath as a challenger for its Keylight Platform.

105 S. JEFFERSON

816.635.2244

Litigation Services Firms Merge The Cooper Group and LAK Reporting merged on August 1. The Cooper Group, founded by

Marketing + Technology = MindSpark Sandra Kaderly, offers court reporting and deposition services. Kelly Rexroat founded LAK Reporting in 2009 to provide court reporting. The combined firm will operate under The Cooper Group name. NextPage Acquires Printer NextPage is acquiring Burns Printing of Olathe, the latest in a series of expansion efforts for the printing and marketing company. In recent years, CEO Gina Danner and her team have added five companies, put millions into new technology, expanded their plant three times and completed a rebranding. SMG Purchases Nashville Company Service Management Group purchased Nashville-based Catalyst Healthcare Research on August 1 to accelerate strategic expansion within the healthcare category. SMG specializes in customer experience measurement, working with more than 450 brands around

Marketing Creativity To See Your Vision

Technical Expertise To Bring It Into Reality

Public Relations Social Media Graphic Design DIGITAL MARKETING Web Applications

mindsparkllc.com

(913) 912-9120

Affinity Venture Partners is a family of companies within the larger Affinity Worldwide organization, focusing primarily on support and service to the residential real estate investment sector. Supported by a capable team of talented industry professionals, these companies represent the very best in their individual industry verticals. We’d like to introduce you to three of our core busineses. affinityventurepartners.com (816) 398-4086

Wrenn Co. Finance is a boutique asset-based loan brokerage for real estate investors. With over 30 years of lending experience and access to hundreds of capital sources, we’ll get your investment closed.

Event Imagineers is a full-service global event, trade show and travel management company producing world-class events, meetings and conferences designed to grow your business and elevate your brand.

VintageKC Magazine is a high-end, glossy publication that informs readers of the styles, fashion, lifestyle, arts and crafts of the past and how they fit in the contemporary world of people and things.

wrenncofinance.com (816) 398-4089

eventimagineers.com (800) 843-8650

vintagekcmag.com (816) 474-1516 SMART COMPANIES THINKING BIGGER®

BIG | deals

the world to listen, understand and act on feedback and behavioral data. SMG is best known for its work in the restaurant, retail and services categories. Catalyst Healthcare Research will retain the name and continue to operate from Nashville. EXPANSION Boxing Club Signs Franchise Deal TITLE Boxing Club, founded in 2008, is set for global expansion with a new franchise deal in the Dominican Republic and Puerto Rico. The boutique boxing fitness franchise has more than 170 clubs across the United States and one location in Cancun, Mexico. MOVES Manufacturer Makes Move AJ Manufacturing, a manufacturer of stainless steel air distribution products for critical

environments, has completed its move into a 70,000-square-foot facility in the Three Trails Industrial Park.

BIG INFLUENCE | STUFF

Fire Solutions Company Relocates HQs Fire Door Solutions has purchased a 25,000-square-foot building in Overland Park’s Blue Valley Business Center and moved its headquarters there. The company has expanded to more than 80 employees and plans to pursue an aggressive acquisition strategy in the life safety space. OTHER BUSINESS New Portal for Compliance Safety Craig Safety Technologies has launched an online portal for its compliance safety division that allows clients to manage safety compliance for their transportation fleets. Clients can log in and manage their risk management records, accident reporting records and Department of Transportation compliance paperwork.

A Historic Event Space Unlike Any Other. Call Now to Book an Event

The Good STUFF

The Simmons Sisters Raise Funds and Awareness for KC Nonprofits For more than 20 years, A Store Named STUFF has been a mainstay of Brookside’s shopping district—a place where you’re guaranteed to find a one-of-a-kind gift or collectible. The store’s owners, sisters S. Sloane Simmons and Casey Simmons, showcase works from a huge network of local and national artists. But, as successful as STUFF is as a business, it’s also a pretty powerful ally for local nonprofits. Every year, the Simmons sisters use their store to host more than 25 parties benefiting charities, and they’re active supporters of organizations like the Women’s Employment Network. This spring, Casey and Sloane served as co-chairs of the Nonprofit Connect Annual Awards Luncheon, a salute to the city’s most giving volunteers.

816.838.7540 342 N Water St, Liberty, MO www.SaintJamesEvents.com 14

THINKING BIGGER BUSINESS // September 2017

“It was rewarding because it helped spotlight people and organizations that do so much for Kansas City while helping to fund Nonprofit Connect and all that they do to make big change,” the sisters said. “This all dovetails beautifully with the deep love we harbor for the Women‘s Employment Network. We help in any way that we can with their important work throughout the year.”

C O M PA N Y T O WAT C H K C

B A R D A V O N H E A LT H I N N O V A T I O N S

E N T R E P R E N E U R S

(Photo courtesy of Austin Walsh Studios)

Better Data, Better Care BARDAVON WANTS TO TRANSFORM WORKERS’ COMP CARE. he workers’ compensation market is a $70 billion industry—one that’s ripe for innovation. Bardavon, a young company from Overland Park, is doing its part to increase efficiency and improve care for injured workers. It has created a suite of online tools that help employers better track the progress of injured workers’ care. Its proprietary platform also gathers analytics to create “dashboards” that employers can use to monitor the effectiveness of their workers’ comp program. Bardavon was created by Matt Condon, the founder of the successful ARC Physical Therapy+. Condon made data analytics an integral part of ARC, which operates a network of physical and occupational therapy (PT/OT) providers that specialize in workers’ comp treatment. By collecting data from more than half a million patient visits, ARC uncovered valuable insights that helped it improve its service. Case in point: ARC discovered that the longer the time between injury and treatment, the longer the treatment time that patient would require. This data-minded approach worked well for ARC, but the company was limited to the regions where its PT and OT clinics operated. Condon realized the potential of creating a cloud-based platform. “We could scale that impact—identifying and supporting higher quality medical services through our data analytics platform—by deploying

ENTREPRENEUR

Matt Condon C O M PA N Y I N F O R M AT I O N

Bardavon Health Innovations 6803 W. 64th St., Ste. 200, Overland Park, KS 66202 (913) 236-1020 www.bardavon.com TYPE OF BUSINESS

Cloud-based tools for employers and health care providers in the workers’ comp space YEAR FOUNDED

2012 E M P L OY E E S

it seamlessly to the patient, provider and payor wherever they lived, via the internet,” Condon said. And that’s how Bardavon was born. DEPLOYING DATA

Bardavon better connects employer-clients with networks of PT/OT providers. The platform helps employers “to identify and support the right providers, giving the right care, at the right time, to the patients needing their expertise,” said Condon. Bardavon’s solutions identify “best in class” providers in every location where its employerclients are present. Injured workers receive the expertise they need. Medical care providers are held “accountable to true performance measures related to comprehensive claim success,” said Condon. “If we identify clinicians in a given area that aren’t providing value, then the employer can simply stop sending them patients.” CATALYST OF CHANGE

“We believe that the power of Bardavon’s data can and will be a catalyst of change in the broader health care market as well,” said Condon. “Undoubtedly, the ‘fee for value’ outcomes Bardavon is already driving in workers’ compensation have enormous potential to influence this same evolution in the broader Medicare/Medicaid and commercial health care segments.” Pete Dulin is a freelance writer based in Kansas City, Mo. // www.petedulin.com SMART COMPANIES THINKING BIGGER®

AT A G L A N C E K C

E N T R E P R E N E U R S

BIG STARTS | DREAMS KC

MADE TO LAST | CONSISTENCY IS THE KEY FOR THE PEANUT

A Tough Nut to Crack How The Peanut endures over the decades.

A New Approach to Teaching Entrepreneur strives to “liberate” through education.

COMPANY //Dreams KC ENTREPRENEUR // Catina Taylor WHAT THEY DO // Dreams KC is a new type of school, one that

incorporates cutting-edge approaches to education: project-based learning, adaptive technology, wrap-around services for students and their families, and other resources. It’s currently running as a pilot program. Taylor wants to fully launch Dreams KC—which was tapped for The Lean Lab incubator—in 2019. THE INSPIRATION // Taylor taught for 17 years in private, district

and charter schools, working with students from pre-K up through adult basic education. The “system” wasn’t working for the majority of students. “Light in the eyes of children [was] being extinguished the longer they were in institutions meant to support their hopes and dreams,” Taylor said. “I wanted to create a school that liberated [children] through education and nourished their homes and dreams for the future.” WHAT’S NEXT? // Dreams KC is working through its second pilot

program and serves 20 students. (The previous eight-week pilot served 10 students.) Going forward, it’s possible that Dreams KC will partner with Kansas City Public Schools as a contract school or become a charter. Taylor is working to secure additional funding through grants and personal donations. Want to get involved? She’s building a group of DREAMS Ambassadors for community support. HOW TO CONTACT // dreamskc.weebly.com 16

THINKING BIGGER BUSINESS // September 2017

Not even Prohibition could stop The Peanut, one of Kansas City’s oldest pubs. Back in the 1920s, it operated as a speakeasy from its home at 5000 Main Street, stealthily serving illegal alcohol. “It had different cuisine over the years, like barbecue,” owner Melinda Kenny said. “People used to illegally order a pail of beer for 75 cents and take it home.” Kenny and her husband Rich purchased the bar and restaurant in 1981, making them the fourth owners of the Kansas City institution. Rich died in 2007. Kenny owns the South Plaza location and the one at Ninth Street and Broadway. The Peanut is best known for its chicken wings and—Kenny’s personal favorite—its BLT sandwiches. “I got the idea from my Dad,” she said. “In summer, he got whole wheat bread and put sharp cheddar, red onion and homegrown tomato with salt and pepper on it. I thought it would be good with bacon. It makes an exceptional BLT.” Kenny offered simple advice for enduring as a business: “Be consistent. Know what you’re doing. We do what we do and do it better all the time.” She’s proud of The Peanut’s legacy. “I consider us to be a landmark destination like the Savoy Hotel,” she said. “We’re the last of the neighborhood dive bar and grills.” www.peanutkc.com

KC MADE IT K C

HOLSTIRIT

E N T R E P R E N E U R S

(Photos courtesy of Allie Coyle Photography)

Look, Ma, No Hands! NECESSITY DROVE STAY-AT-HOME MOM TO CREATE THE HANDS-FREE HOLSTR. t’s been said that necessity is the mother of invention, and for Tamra Johnson, the phrase couldn’t be truer. The mother of five children ages six to 17, Johnson invented the HOLSTR, a fashionable bottle holder that allows the user to carry their favorite liquid hands-free. “It has a back pocket that fits most phones, with an eyelet to fit earphone cords through. So you can listen to music and also carry your driver’s license and credit cards,” Johnson said. Her company HOLSTRit produces the HOLSTR, which can be used with a waist or shoulder strap. It is available in a variety of colorful washable fabrics and retails for $24.99 to $29.99. It is sold online and through gift shows. Johnson came up with the idea in 2014 after her daughter Maleena—who was 11 years old at the time—underwent a kidney transplant. (The donated organ came from Maleena’s dad, Jamie Johnson.) Maleena has to drink at least 100 ounces of water daily to keep her kidneys healthy, but carrying a water bottle along with her schoolbooks was challenging. Then a light bulb went off for Johnson.

A BRIGHT IDEA FOR HER DAUGHTER

“I was lying in bed thinking about her going to church camp and how was she going to do this, and I came up with this idea,” she said. “There is really nothing out there that is comfortable and cute that encompassed all I wanted it to carry.”

Johnson described her idea to her daughter’s sewing teacher, who made up a few samples. “I took paper and was pasting things where I thought they should go,” she said. Johnson took photos of every aspect of the prototype, wrote descriptions and sent it off to the factory, placing an order for 1,000 pieces. It takes up to three months for a shipment to arrive at Johnson’s home, where she handles order fulfillment. The HOLSTR is designed for anyone’s use, not just people with kidney conditions. “We have a ton of travelers who choose our product,” Johnson said. “Most people don’t realize that money or a phone can fit so it is a little more secure.” In her entrepreneurial journey, Johnson has sought advice from several sources, including her father and her husband. Kansas City is a great place for entrepreneurs, Johnson said. She cited her own situation as a case in point. Johnson has a business coach through Johnson County Community College. She also sought advice through the E-Scholars Program, part of the Regnier Institute for Entrepreneurship and Innovation at the University of Missouri-Kansas City. “There are a lot of free opportunities for entrepreneurs in Kansas City,” Johnson said. ‘IT HAS BEEN HARD BUT EXHILARATING’

The HOLSTR has gone through a few revisions since it first hit the market. “You used to have to choose a waist pack or a cross-body strap to go over the shoulder.

We redesigned it so you get both in one product,” Johnson said. “And we had to make them a half-inch wider because phones keep growing bigger.” Almost 4,000 HOLSTRs have been sold. Johnson has added new fabric patterns and formed a partnership with another stylish Kansas City brand, Charlie Hustle. A portion of all sales from HOLSTRs goes to the National Kidney Foundation. As of June, $2,665 has been give to the foundation. Johnson continues to look for new opportunities for her product. In September, for example, HOLSTRit will release two University of Kansas-branded products. “I would eventually like to have more schools, but I have to take baby steps,” she said. While HOLSTRit operates an e-commerce website, the bread and butter for sales is still gift shows. Johnson is already booked for multiple shows in the area, all the way up to the holidays. The HOLSTR is also available in Branson Mill Craft Village in Branson, Missouri. Johnson is amazed at how far she has come with her company. “Two years ago, I was just a home-school mom with five children … and now I am selling things,” Johnson said. “I knew nothing about business when I started. I have had to learn accounting, web design, marketing and social media. I didn’t realize I was so teachable until I did all of this. It has been hard but exhilarating.” Ruth Baum Bigus is a freelance writer in the Kansas City area. SMART COMPANIES THINKING BIGGER®

KC FUTURES

( by Kate Leibsle)

Degrees of Success MISSOURI INNOVATION CAMPUS SET TO OPEN NEW FACILITY IN LEE’S SUMMIT.

harles Ambrose knows Corporate titans such as that the Missouri Hallmark, DST, Cerner, VML, Innovation Campus makes a Burns & McDonnell, and difference in students’ lives. Black & Veatch have been Ambrose is the president early adopters and supporters. of the University of Central “The goal is to take the silos Missouri in Warrensburg, a key out of the way and make it easDr e .C huck Ambros partner in the innovative eduier for students to get a degree,” cation program. He’s watched the Ambrose said. MIC transform the futures of many young The MIC is trying to combat four big people, such as the Lee’s Summit student problems with higher education as it’s curwho finished his degree at UCM in less than rently delivered right now. two years, thanks in great part to the time » College costs too much. he spent as a high-schooler receiving dual » It takes too long. credits for his school work. » Students leave with the skills Oh, and the student also graduated as an they need to be workforce-ready. employee of DST, thanks to the paid intern» Students rack up huge student debt. ship part of the MIC program. TURNING THE PRODUCTION FLOOR Now, Ambrose is overseeing the biggest INTO A CLASSROOM change to the program thus far: moving it The MIC is designed to help educators to its own facility in Lee’s Summit. The and students face the changes and challenges two-story, 137,000-square-foot building at in today’s education and business environ1101 N.W. Innovation Parkway is set to open ments, Ambrose said. this month for student use, and is made The program grew out of a conversation possible through an innovative partnership Ambrose had with Don Nissanka, the chairbetween the Lee’s Summit R-7 School District man, president and CEO of energy storage and UCM. company Exergonix, about Nissanka’s desire The new building will give the program, to give back and encourage students and facwhich began in 2012, a permanent home and ulty to work with the business community. allow students to access its programs—and “He wanted our students to be his those of Summit Technology Academy, which employees, and for the faculty to be his shares the building—from 8 a.m. to 10 p.m. managers and the production floor to be the classroom,” Ambrose said. “It was a simple SOLVING HIGHER ED’S BIGGEST PROBLEMS equation that led to the genesis of this.” The goal of MIC, which focuses on STEM With the new building opening, Ambrose subjects, is for students to graduate from high is proud to reflect on the unique partnership school already having completed an assoof the MIC and the results thus far. ciate’s degree at Metropolitan Community “In our first two graduating classes, all College, with the opportunity to earn a of the students are now fully employed, bachelor’s degree in just two years after high averaging salaries at $60,000 at the best school. Students accumulate little to no companies,” he said. student debt, but do walk away with highly “The reality is that college costs have sought-after skills for today’s work environbeen the reason that a lot of people have ment and applied experience gained through questioned the value of a college degree. paid internships.

THINKING BIGGER BUSINESS // September 2017

But a college degree is the key to social and economic success.” Ambrose is looking forward to expanding MIC’s program to include adult learning opportunities. He wants to help other universities, school districts and business communities to start up their own programs. And he’d like to welcome more students to MIC. MIC is also developing a program with the Kansas City (Missouri) Public Schools at the district’s Manual Career and Technical Center.

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Everyone connected with the MIC feels as though they are changing education and is ready to take the program to other places. “Tom McDonnell (former CEO of both DST and the Ewing Marion Kauffman Foundation) tells me, ‘Don’t say it is a new model; it is the new model.’ “The Missouri Innovation Campus was meant to be transformational, and it has been.” Kate Leibsle is a freelance writer in the Kansas City area. SMART COMPANIES THINKING BIGGER®

ENTREPRENEURIAL JOURNEY K C

E N T R E P R E N E U R S

success ever since. And, this year, she decided to share that success with her staff when she led Warehouse 1’s employees through an Employee Stock Ownership Plan (ESOP). Jacoby recently shared with Thinking Bigger Business some of the things she’s learned during her three decades as a business owner. 1. You don’t know what you can get unless you ask. // When Jacoby got the idea to buy the

building by selling its contents, she had no idea whether the owner would agree. But she told herself that she wouldn’t have a chance if she didn’t ask. “So I asked,” she said. 2. Don’t be afraid to let go. // “Learning what

not to do was probably one of the primary things that was in my way of success for a long time,” Jacoby said. Over the years, she’s had to learn what was profitable to sell and what wasn’t. She realized, for example, she couldn’t sell file cabinets cheaper than Office Depot anymore. “It’s hard to let go of something,” she said, “but it’s important to understand what you do that makes money and what you do that’s a detraction from what you do that makes money.” 3. Take advantage of resources. // Joining

Turning Salvage Into Success Mary Lou Jacoby offers scrappy advice born from decades of experience.

hirty years ago, Mary Lou Jacoby, the founder of Warehouse 1, was a 30-something single mom who had recently left a family business and was “looking for a way to feed my kid.” An auction company had a building full of old, used equipment at 33rd and Forest. Jacoby, who had a background in the scrap business, thought the retail shelving, storage cabinets, conveyor belts, fork lifts and other items that hadn’t already been sold at auction

20 THINKING BIGGER BUSINESS // September 2017

NAWBO and HEMP were two great investments of time as Jacoby grew Warehouse 1. “It’s important to be open to new ideas and learning. It’s unfortunate that some people think it’s more valuable to sit at their desk with their head down rather than sitting in a room with 50 to 100 of the smartest people in the city gathering ideas and new concepts,” she said. 4. “Get over yourself.” // That’s advice Jacoby

got early on, and she’s never forgotten it. “When you’ve made a decision that didn’t work out, move on,” she said. 5. Plan your exit. // “I didn’t want to be driving

could be resold to other companies if they were cleaned up a little. “The building was completely crammed full from the back wall to the front door. It was like Grandma’s attic on steroids,” Jacoby said. She struck a deal to buy the building, paying the loan by reselling the used inventory. She sold it all, and repaid the loan in 90 days. Warehouse 1, an international provider of new and used warehouse and storage equipment, was born. Jacoby has been turning salvage into

into the warehouse in my wheelchair each morning,” Jacoby said. “It just didn’t seem like the right way to go out.” So she started looking for exit strategies, including the ESOP, and even formed an internal team to consider options. She said that to ensure continued success of an ESOP company, you need a dedicated team of talented people to guide it forward. They need to make good decisions for the company and the other employee-owners to be successful. // wh1.com

Kansas City SCORE

4747 Troost Ave., Suite 101 Kansas City, MO 64110 https://kansascity.score.org/ 816-235-6675

25TH ANNIVERSARY CELEBR ATION OCT 03, 2017

FEATURING AMBASSADOR SAMANTHA POWER

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BRIGHTENING BOTTOM LINES A typical SARIN Energy client spends 65 percent less on lighting.

THINKING BIGGER BUSINESS // September 2017

KC ENTREPRENEURS

Flipping the Switch on LED Lighting The team at SARIN Energy Solutions leads the way in energy-efficient technology.

ENTREPRENEUR

Inayat Noormohmad C O M PA N Y I N F O R M AT I O N

SARIN Energy Solutions 9209 Quivira Overland Park, KS 66215 1-855-997-2746 www.sarinenergy.com TYPE OF BUSINESS

Energy-efficient lighting and HVAC YEAR FOUNDED

2012 E M P L OY E E S

12 KEYS TO SUCCESS

“The customer wins, and so do we.”

left // Inayat Noormohmad,

founder and president with Rozina Noormohmad, CFO.

achelor’s degree in aerospace engineering from Georgia Tech. Master’s in economic and public financial policy from the London School of Economics and Political Science. More than a decade as the chief economist for the Kansas Department of Labor. By any standard, Inayat Noormohmad is a very bright guy—one who has found his way into an industry with a very bright future. As the CEO of SARIN Energy Solutions in Overland Park, Inayat and his team provide energy-efficient LED lighting and HVAC systems to hotels, hospitals, grocery stores, gas stations, warehouses and other clients. They’ve served everyone from Mars Inc. to the neighborhood hair salon. “I had no idea that I was going to get into this business,” Inayat said. But once he saw the size of the opportunity, his training as an engineer and an economist kicked in. “The engineers always think of better ways of doing something,” he said. “And then economists are always looking at trends … You try to understand where things are going.”

By adopting LED, a typical SARIN Energy client spends 65 percent less on lighting, or up to 80 percent in some cases. For large commercial clients with round-the-clock operations, the savings are substantial. And that’s led to strong demand for the company’s solution. In recent years, the company has recorded annual revenue growth of about 50 percent. According to Zion Market Research, the global market for LED lighting was worth $26.09 billion last year—and should more than double in the next five years. SARIN’s pitch— the ability to quickly reduce the price of an unavoidable ongoing expense—is catching on with more and more business owners. “OK, you have certain fixed operating costs,” Inayat said. “One of those things is utilities. How can we help you reduce your utility costs, so that your bottom line improves almost immediately, from Day One?” ‘WE CONTROL THE QUALITY OF THE PRODUCT’

Inayat loved his job with the State of Kansas. In his time there, he said, he could count the number of bad days on a single hand.

by James Hart // photography by Dan Videtich SMART COMPANIES THINKING BIGGER®

But he was searching for a new challenge. His father, who owns several gas stations, had been nudging Inayat to take a look at a technology that was gaining in popularity: LED lighting. LED—which stands for light-emitting diode—has several advantages over traditional incandescent bulbs. For starters, this kind of lighting uses less electricity and lasts longer. The basic technology has been around for decades, but LED has become a general-use product only in the last several years. Inayat researched the technology for eight months before deciding to take the plunge. He started SARIN Energy Solutions in his garage. His first project was at a gas station partly owned by his dad. Inayat found many of his first clients by knocking on doors— most of them in Missouri, where Kansas City Power & Light, Ameren and other utilities were giving rebates to customers who adopted LED lighting. KCP&L, for example, has offered rebates worth up to $500,000 per year to businesses that complete approved energy-efficiency projects. Small businesses can qualify for a separate program dedicated to lighting—the utility will help cover up to 70 percent of those upgrades’ cost. “The incentives were a good way of starting the conversation,” Inayat said. Even so, SARIN had to educate customers about the benefits of LED—like the fact that colors tend to look better under LED, which is important for retailers who want to present their wares in the best possible light. And LEDs don’t have the mercury that you find inside fluorescent tubes. Within six months of its launch, SARIN had moved out of Inayat’s garage and into rented

space. It has continued growing and just relocated to its third headquarters. More growth could be on the way: The company is launching a new “dollar a month” program. Customers pay as little as $1 per month per fixture or lamp, and SARIN will take care of essentially everything related to lighting. “We change it out to a much more environmentally friendly and much, much more efficient LED tube light,” Inayat said. “And that is all the customer has to pay for that fixture or lamp—$1 per month. And that includes the service, that includes that new product, and all the

24 THINKING BIGGER BUSINESS // September 2017

while that they’re paying a dollar a month, if anything goes out, we just go and change it for free.” SARIN has an edge when it comes to LED lighting, one that competitors lack. “We control the quality of the product by being the manufacturer,” he said. About 50 percent of what it sells are devices that Inayat himself designed and that are patent pending. They’re manufactured in China, and he has an employee based there to help oversee production. While LED lighting is SARIN Energy’s most popular offering, the company also sells energyefficient HVAC systems.

That’s a powerful combination, Inayat said. LED tends to generate far less heat than other types of lighting, which reduces the need for (and cost of) air conditioning. And finally, SARIN Energy provides consulting services on rebates and incentives for energy-efficiency upgrades. The company will research state and federal incentives that clients could qualify for and then prepares the necessary paperwork. “We do the application,” Inayat said. “We do all the submittal … The customer has to do nothing. It’s all on us.”

“OK, you have certain fixed operating costs. One of those things is utilities. How can we help you reduce your utility costs, so that your bottom line improves almost immediately, from Day One?” Inayat Noormohmad // Founder and president

‘IT’S A LONG-TERM RELATIONSHIP’

SARIN is actually an acronym. Each letter stands for family members who played a crucial role in starting the company, Inayat said. He and his daughter, Izzah, are represented by the letter I. The R is for Rajab, his father, and Rozina, Inayat’s wife, who handles the finances and consults on larger strategic decisions. “She is my confidant in every major decision,” Inayat said. “Whether it’s bringing on a new vendor client or bringing in a new employee or any other thing, we talk.”

Like when he got the idea for the dollara-month program—at 2 in the morning—he immediately asked for her insight. “It’s more than a sounding board,” he said. “It’s someone you can rely on for their advice and for their insight. She has much better observational skills than I do.” While he’s proud of SARIN’s positive impact, he’s also clear about why it’s personally important: The company provides him a way to make a better life for him, Rozina and their daughter. “It’s not so altruistic, right?” Inayat said. “I’m in a business. It’s

not an NGO (nongovernmental organization) that I have here. So yes, we make a difference environmentally and on the bottom line of our clients. But at the same time that’s allowing me to make money for me, my family and my employees.” He takes his relationship with his team seriously. The company employs 12 full-time people, not counting others who work on a contract basis. The company might have been able to grow faster, but Inayat didn’t want to add staff unless he was 100 percent sure the business could support them. “Because when we take on an employee, it’s a long-term relationship,” he said. “We take on the responsibility of not that person, but that family, and we don’t take it very lightly. “So that’s why we’re being a little bit conservative in how we grow because we don’t hire people so that we can make them disposable and say, ‘Sorry, I don’t need you today, goodbye!’ We don’t do that.” ‘YOU JUST HAVE TO PERSEVERE’

Right now, most of SARIN Energy Solutions’ clients are based in Kansas and Missouri.

But the team has done work in other states for local clients with locations as far away as Florida and California. To grow the business, Inayat is building formal partnerships with lighting companies in other parts of the country, including Dallas, Houston, Phoenix, Austin and Arkansas. Instead of SARIN Energy hiring staff in those cities and opening physical locations, existing businesses there will sell and install SARIN’s products. “We become their manufacturer suppliers,” Inayat said. The last few years have been a whirlwind for Inayat, but he’s excited about the future. “You just have to persevere and keep doing what you’re doing, because you believe in what you’re doing,” Inayat said. “I cannot emphasize enough of how we want to work with our clients to save money.” Unlike other businesses, he’s selling a product where he can clearly demonstrate to customers—usually in dollars and cents—the utility and value they’re getting from SARIN Energy Solutions. “We are very fortunate to be in an industry which is a win-win industry,” he said. “The customer wins, and so do we.” James Hart is a freelance writer based in Kansas City. SMART COMPANIES THINKING BIGGER®

Hungry for Knowledge? Register for the next BIG Breakfast. Learn behind-the-scenes stories from business owners featured on the cover of Thinking Bigger Business magazine.

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TRANSITIONING YOUR BUSINESS Join a panel of experts who answer questions for business owners considering selling the business or building a C-level staff

Wednesday, September 27, 7:30 a.m.–9 a.m. Indian Hills Country Club 6847 Tomahawk Rd, Mission Hills, KS 66208 $25—Includes a panel presentation, Q & A, networking and continental breakfast RSVP at www.iThinkBigger.com

W hat You Will Learn • What to consider as you develop your personal and business transition plan • How to develop a transition mindset • Keys to shifting management and leadership responsibilities • How to prepare other stakeholders in the business for the transition

• Options for selling a business— and keys to preparing for success no matter which option you choose • Financing options • Who you need on your team to ensure a successful transition

W ho Should Attend? • Business owners interested in selling their business in the near term • Business owners who want to know what they can do now to prepare for a sale in the future • Members of family-owned businesses

anelists • Katheigh Degen // Twin Financial • Valerie Vaughn // Apex Business Advisors • Tim Barron // CrossFirst Bank • Sheila Seck // Seck & Associates

28 THINKING BIGGER BUSINESS // September 2017

• Business owners who want to transition leadership and management responsibilities to a new president or C-level team • Key members of a business’s management team

TRANSITIONING YOUR BUSINESS

Planning Your Exit THINKING LONG-TERM KEEPS YOUR BUSINESS ON TRACK

ou’ve navigated a competitive market, steered your company to profitability, and put it on track for healthy growth and expansion. It’s now time to start thinking about an exit strategy. Sound premature? It’s not. Proper planning can help ensure both a successful business transition and an equally successful retirement for the owner. Too often, owners get caught up in day-to-day operations and forget to think long-term. Some figure they’ll simply turn the business over to the kids. Others plan to sell when it’s time to retire and live on the proceeds. But often the kids don’t want the business, and finding the right buyer may not be easy. Those who do find a buyer may end up agreeing to an installment sale, which means they’ll likely get the business back if the new owner goes broke. A boomerang sale is a headache if the business comes back when you’re young, but it can be a disaster if the sale is a critical part of your retirement. That’s why owners who want to get full value from their business need to think ahead. Succession planning should start as soon as an owner is able to move beyond tactical dayto-day operations to think strategically about the business and his or her own role in the company’s future. Consider Barry Middleman, now 71, who founded his architectural firm back in 1973. He was still in his early 50s when he first

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(Con tr ibuted by K atheig h D eg en)

began his succession planning. He started by crafting a new identity for his business. In 1994, the firm shed the name Middleman, De La Garza & Neugebauer and became MDN Architects. “A personal identity drives down the value of a company,” Middleman explains. “It is not as marketable.” At about the same time, MDN began working to seriously diversify its client base, once again increasing the company’s value. Then two years ago, a new partner came on board, dramatically lowering the average age of the partners. Now Middleman is planning to gradually step back from the business, staying involved in those areas that interest him most. Eventually, he says, he’ll retire, leaving the new partner at the helm. Yet, even careful succession planning can be bumpy, as Middleman learned when the recession hit in 2008. That’s why owners can’t afford to put all of their assets into their business. Money tucked away in a 401(k), IRA or other retirement plan can act as a shock absorber, cushioning owners from any economic potholes they encounter on the way to the exit door. For young companies, the best retirement savings vehicle might be a SIMPLE IRA, which lets both owners and employees contribute and at higher levels than those allowed with a traditional IRA. As companies grow, 401(k) plans can be a good next step,

and Roth 401(k)s—which are funded with after-tax dollars—provide distributions that may be tax free. Permanent life insurance offers another way for owners to diversify their holdings while creating a potential safety net for both their company and their retirement. Business owners, for example, may be able to borrow on the accumulated cash value in these policies to help meet expenses or payroll during lean times. And if the policies have cash value when the owner is ready to retire, it can be a good source of supplemental retirement income.* Ultimately, succession planning is about more than simply finding the exit door. It’s also good business. While there are no guarantees, planning that focuses on such things as increasing the company’s value can help keep a business on track while it’s still growing. And that’s a good way to make sure you won’t be leaving your retirement to chance. *Access to cash values through borrowing or partial surrenders will reduce the policy‘s cash value and death benefit, increase the chance the policy will lapse, and may result in a tax liability if the policy terminates before the death of the insured. The information provided is not written or intended as specific tax or legal advice and may not be relied on for purposes of avoiding any Federal tax penalties. MassMutual, its employees and representatives are not authorized to give tax or legal advice. Individuals are encouraged to seek advice from their own tax or legal counsel. Provided by Katheigh Degen, a financial representative with Twin Financial, Inc., courtesy of Massachusetts Mutual Life Insurance Company (MassMutual); (816) 333-2334 CRN#201908-216519 SMART COMPANIES THINKING BIGGER®

TRANSITIONING YOUR BUSINESS

(By Va ler ie Va ug hn)

SPONSORED CONTENT

What Nobody Tells You About Selling Your Business TRANSITIONING YOUR BUSINESS TO A FAMILY MEMBER OR A KEY EMPLOYEE MAY BE MORE CHALLENGING THAN YOU EXPECT.

ack and Jill started their very profitable business more than 30 years ago and have built it to more than $4 million in annual revenue and 25 employees. Last month, Jill asked Jack to put an exit plan in place, one that would allow them to be out by age 70. Although Jack is nearly 69, he has no succession plan other than a belief that their daughter, Jenni, may want to take over the company. While they really want to sell to her, Jack and Jill have serious concerns as to whether Jenni would be successful as a business owner. 30 THINKING BIGGER BUSINESS // September 2017

Jenni has worked for the company for eight years and is currently doing very well as vice president of sales. She’s extroverted and likable, and she has a lot of the right education and work experience to succeed. Still, Jack and Jill see a few signs that worry them. For starters, Jenni has not been groomed for business ownership. Also, she is about to be married, is in the process of buying a house and wants to start a family immediately after the wedding. Three major life milestones in a brief period—while simultaneously taking ownership of a business with 25 employees—sounds like a recipe for disaster.

WHY A GENERATIONAL TRANSITION IS SO HARD

I frequently meet business owners like Jack and Jill whose retirement plan is to sell their business to a younger family member or key employee. Frequently, I find these owners have not thought through some critical elements such as: “Is the identified successor savvy enough to sustain and grow the business?” and “Can the potential successor afford to buy the business?” Most business owners want to maximize the selling price of their business. They also want cash at closing so they can move their dollars to a diversified investment. The business is their largest asset, and they need the proceeds from its sale to fund their retirement. What business owners planning to sell to a younger generation don’t realize is that

TRANSITIONING YOUR BUSINESS

the financial logistics of starting a business are different from those for buying a business. A business can be started with very little cash, and growth can be funded organically. But the acquisition of a mature, ongoing concern will require access to capital and frequently more than the younger generation can manage. What will Jenni need in order to acquire Jack and Jill’s business? Can she afford it? Back-of-the-napkin calculations yield a selling price of $1.5 million. Jenni doesn’t have that kind of money lying around, so she’ll need to find financing. If she goes to a bank for an SBA-guaranteed loan, she’ll need to put in 20 to 25 percent equity—$300,000 to $375,000. Jack and Jill could gift the down payment to Jenni or sell the business to her at a substantial discount, but neither of these options would meet their financial needs for retirement.

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The story of Jack, Jill and Jenni is a relatively simple situation as it involves just one child. Imagine how complicated it can become if two or three adult children are involved. Is it realistic for you to sell your business internally to the next generation? Does your family member or key employee have the desire, business acumen and financial strength to make it happen? Don‘t just assume. Have the conversation. Today, not a year before retirement!

Extra! Extra! Sign up for iThinkBigger.com Extra— a FREE email newsletter designed to help you become a smarter, more successful entrepreneur.

BY VALERIE L. VAUGHN Valerie L. Vaughn is a business broker and certified mergers and acquisitions professional with Apex Business Advisors, an Overland Park firm that assists with business sales, mergers and acquisitions. If you are curious about how well your business is positioned for a future sale, contact Valerie for a no-obligation complimentary consultation. (913) 433-2315 // www.kcapex.com

TO SUBSCRIBE OR RENEW TODAY, CALL (913) 432-6690 OR VISIT WWW.ITHINKBIGGER.COM

4 TIPS FOR A SUCCESSFUL TRANSITION

While there are many aspects to selling a business and transitioning ownership to the next generation successfully, here are four key steps:

Plan ahead. A successful transition plan

Confirm your successor. Have a conver-

Groom your replacement. Prepare your

takes at least three to five years, and it’s never too early to start. If Jack and Jill had planned, Jenni might be better prepared to buy their business. sation with your family member or key employee about acquiring your business. Do they really want the business? Or is it just a nice idea? Don’t assume you know their intentions. next-generation successor with the training, education and hands-on experience they’ll need to operate the business successfully when you are no longer involved. This will take time, so see Step 1.

“ Sheila is the ﬁrst attorney I have worked with

who put her business hat on ﬁrst during our conversations and only got the legal hat out when she needed it. -J. Schram, The Purple Guys

”

Access to capital. Work with your

intended successor to plan ownership transition in a manner that meets everyone’s financial goals. Again, refer to Step 1.

www.seckassociates.com Overland Park, KS

St. Louis, MO SMART COMPANIES THINKING BIGGER®

TRANSITIONING YOUR BUSINESS

Use Your Bank to Buy Your Business HOW TO USE SBA LENDING TO FACILITATE AN ACQUISITION.

he process of buying a business is anything but simple, and one of the toughest parts is determining how you are going to fund the purchase. Unless you are sitting on a pile of money and can simply write a check, you will need help from outside sources. That capital can come from many sources: outside investors, mezzanine debt, private equity or bank financing. Bank financing is an often-overlooked option. Sometimes that’s because the buyers do not have the necessary collateral. But many buyers overlook banks because they are not aware of the lending options that are available to them. SBA TO THE RESCUE

The purchase of a business frequently involves buying the business enterprise value— a good deal of which may be made up of “goodwill.” Bankers will refer to this component of the business as “blue sky,” because in a liquidation scenario—i.e., the buyer defaults on the loan and the bank has to sell the company 32 THINKING BIGGER BUSINESS // September 2017

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(By Tim B a r ron)

or its assets to recoup its loss—there is no “real” value. However, the business enterprise value is often how these companies are valued and sold. When I meet with borrowers who are interested in purchasing a business, they may look to their personal financial statement for collateral to pledge. If they lack sufficient assets, they will assume there are no other options. This is when we turn to the U.S. Small Business Administration for help. The SBA has multiple loan products that allow a bank to provide capital to a borrower who may not be fully secured. In fact, using an SBA loan to facilitate an acquisition makes perfect sense. The SBA provides a guaranty typically equal to 75 percent of the loan request. This guaranty helps to shore up any collateral risk that may be present in a business acquisition. DOWN PAYMENTS AND TERMS

The SBA also allows for flexibility on the down payment requirements.

For acquisitions in which there are intangible assets of less than $500,000, the SBA does not have specific down payment requirements. It is really up to the bank’s comfort level and internal policy. For acquisitions that involve more than $500,000, the SBA does require 25 percent down payment from the borrower. However, the SBA will allow seller carryback debt to count as equity if the payments are structured correctly. To explain, a seller carryback loan is when the seller of a business does not require 100 percent of the sale proceeds up front, but rather takes a portion back in the form of a loan owed to the seller from the borrower. Well, if this carryback is structured so that no payments of principal or interest are due in the first 24 months of the loan, then that can be considered equity down from the buyer. This is a wonderful tool that allows borrowers who may only have 10 to 15 percent in cash down to ask the seller to carry back the difference and satisfy the SBA loan requirements. Additionally, the SBA allows for more flexible terms that can help keep the buyer’s monthly payments low. For transactions that do not involve the purchase of real estate, the SBA permits terms that are as long as 10 years. And if real estate is being purchased, the terms can extend as far as 25 years. FIND THE RIGHT PARTNER

The key to all this is finding a bank that really knows SBA and has funded these types of loans in the past. To do this, you can simply call the bank and ask about their level of experience. Or better yet, talk with the SBA’s local office, and the staff there can provide you with lists of the top-performing SBA banks in your district. Although buying a business can be an intimidating process, finding a solid bank partner— one that can fully utilize SBA programs—will give you peace of mind and properly structure your financing to ensure your new business is a success.

BY TIM BARRON Tim Barron is the manager of small business banking at Crossfirst Bank. (913) 327-1214 // Tim.Barron@crossfirstbank.com

TRANSITIONING YOUR BUSINESS

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Selling Your Business to a Key Employee KEEP THESE OPTIONS IN MIND IF YOU ARE CONSIDERING SELLING YOUR BUSINESS TO A KEY EMPLOYEE.

wners wishing to sell their businesses often look to key employees as a way to transition the business to someone who knows and understands the business and often has a similar vision for the business. But selling a business to a key employee is not as simple as handing over the business and cashing a check. Here are some steps you must still take: • Identify and groom a successor if the business has no identifiable candidate. Calculate a fair value of the business for • the sale and determine whether that value is adequate to move forward with a sale. • Consider how involved the owner wants to be in the business during a defined transition period. • Develop a deal structure that works for both parties because key employees often don’t have cash or the ability to raise capital. Evaluate the tax implications of any • deal structure. FINANCING THE DEAL

Typically, business owners use two types of sales methods when selling a business to key employee(s): (1) long-term installment sale and (2) leveraged management buyout. LONG-TERM INSTALLMENT SALE

Under the long-term installment method, the owner is paid over a period of time using the company’s cash flow to support such payments. A long-term installment sale is structured as follows:

The owner and the key employee(s) agree on a valuation of the company.

The key employee(s) pay the purchase price using a promissory note, with a reasonable interest rate and installment

payments. The note is often secured by the company’s assets and equity, and the key employee(s) makes a personal guarantee, including pledging some personal collateral (usually residences).

Little or no money is paid to the business owner at closing.

LEVERAGED MANAGEMENT BUYOUT

The leveraged management buyout method draws upon the company’s management resources, outside or seller equity and significant debt financing. This buyout can be ideal for business owners who want to reward key employees, position the company for growth and minimize his or her ongoing financial risk. To effectively execute this buyout, a business should possess some of the following characteristics: The company’s management team is capable of operating and growing the business without the business owner’s involvement.

1 2

The company has stable and predictable cash flow.

The company has strong prospects for growth described in a detailed business plan.

The company has a solid tangible asset base, such as inventory, machinery and equipment. Hard assets make it easier to finance a sale using debt; however, service companies without significant tangible assets can obtain debt financing, at higher cost.

The company has a fair market value of at least $5 million.

If a business possesses some of these characteristics, a leveraged buyout may be a good option. Still, a prerequisite for a

management-led leveraged buyout is the business owner/seller and the management team being able to agree on a fair value for the company. Once that occurs, the parties execute a letter of intent that gives management the exclusive right to buy the company at the agreed price for a specified period of time. Next, the management team and its advisors arrange for a portion of the transaction to be funded by the senior bank debt. Bank lenders usually require the management team to make an equity investment prior to closing. After bank debt, the management team may seek an equity investor. An equity investor would receive from the management team a complete package of price, terms, debt financing and management talent. Under either method, a business owner has the flexibility to structure a transaction to best meet his or her personal goals and goals for the company as it transitions into new ownership. BY SHEILA SECK Sheila Seck is the founder and managing partner of Seck & Associates, a law firm specializing in mergers and acquisitions, startups, corporate counsel, technology and licensing, and securities and private equity. //sseck@seckassociates.com SMART COMPANIES THINKING BIGGER®

BIGGER | marketing S M A R T

( by Anne Cull )

S T R AT E G I E S

What is the Real ROI of Social Media? Build relationships, and you’ll build up your business, too.

hat’s the right way to measure the impact of your social media? The answer is not a number, and it doesn’t have anything to do with website traffic. The real return on social media is ROR: return on relationships. Social media, after all, is about people. So many marketers are focused on honing target audiences that they forget about the real people who pay their company’s invoices. If you never pay attention to the real people you do business with, or if all you do is remind them about what your product or service can do for them, they never have the opportunity to get to know, like and trust you, which means they are unlikely going to buy anything else from you.

source of word-of-mouth marketing because they have their own circle of peers who know, like and trust them. If they tell those friends to use your product or service, that referral carries more weight than all the advertisements they see popping up in their newsfeeds. That is the return you experience when you have good relationships with people you do business with. How do you measure ROR? Start by tracking who pays attention to your company on a monthly basis—names, not numbers! Who are your notifications coming from? If they are all random, they are unlikely going to share your posts or refer you. Social media is as much about offline behavior as it is about online behavior. If you

don’t pay attention to the people you want to do business with—on or offline—it’s going to be tough to stay in business. HOMEWORK: Take a look at your client list and

ask yourself how well you know them. How well do they know you? Your clients are your best source of referrals, and if you don’t make time to talk to them, help them, thank them and show support for them, you are leaving the door open for your competitor. A quick thank-you email or social network message goes a long way toward building ROR!

Anne Cull is president of ThinkViral LLC, which helps companies put social media business development systems in place. www.thinkviral.com

The Difference Between Social Media and Advertising Social media = Talking with people online. Advertising = Paying to get the name of your business in front of people online.

Social media is not “better” than advertising, and advertising is not “better” than social media. They are two completely different things. Advertising campaigns target a specific demographic over a specific amount of time, and the result is usually measured by clicks or conversions. Great social media has nothing to do with campaigns and website clicks. People do business with people, not campaigns or logos or buildings. It’s people who ultimately buy what you sell, and people who tell their friends what their experience was like. All of those people socializing can make a big impact on your bottom line if your company’s name is in the mix! Building a Captive Audience It’s relatively easy to create posts and collect fans. It’s not easy to turn those fans into paying clients. How do you turn them into paying clients? Focus on honing a captive audience instead of a target audience. A captive audience is full of people who know, like and trust you. They are your best

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BIGGER | growth S M A R T

( by Mike Brown )

S T R AT E G I E S

Big Questions About Big Ideas 6 things your employees need to know about your innovation strategy.

etting ready to unveil your new innovation strategy? Here are six things your employees will want to know. Are you prepared to answer their questions? Is this innovation push just 1 for this quarter or this year? Your employees have been through the flavor-of-the-month strategy. Probably not at your 36 THINKING BIGGER BUSINESS // September 2017

company, but somewhere they worked before, no doubt. They know innovation strategies come and go. They will want to know whether your innovation strategy is here to stay. Demonstrating that it is will take both words and lots of actions. How innovative do you want us to be? The easy answer is to say you are looking for big ideas. Who doesn’t love big ideas? The problem: Asking for big ideas rarely leads to big ideas. Instead, give your team creative-thinking questions appropriately sized to the innovation you are seeking. Then let them go to town answering the questions.

What are your expectations or limits? I know, I know. You want your employees to start with a clean sheet of paper as they start imagining the future. Be honest, though. You’ve never given them free rein before to innovate. Do everyone a favor. Share goals, objectives and strategies for where you want to direct your innovation strategy. You’ll all be more successful. Pinky swear.

What are you going to do with our ideas? If you announce you want everyone to innovate, you need to have thought up front about how you are actually going to review and process the ideas your employees share. Have you figured that out? We didn’t think so. Identify the process, then make your big innovation strategy announcement.

Will I get into trouble if I break something? Your employees are concerned about getting into trouble. As much as you say you want disruptive innovation, they have doubts. Heck,

Overcoming Generational Challenges at Work So much has been written about generational challenges in the workplace that you may believe that working with multiple age groups is impossible. We beg to differ. Since the dawn of time, older generations have frowned upon the likes, dislikes and standards of the younger generation. And the younger generation has complained about similar traits in their elders. This era is no different than any other. To those who are younger, don’t fall prey to stereotypical views of your elders. They have a lot of life experience under their belts. If you take the time to listen, you might gain some knowledge and skill that could progress your career a lot faster. Likewise, we encourage those of you in the workforce who are more seasoned to be open-minded to the bright minds emerging through the ranks of the workforce. Sometimes the “way we’ve always done it” isn’t the best solution. You’ll miss the opportunity to evolve if you write off the ideas those new faces have to offer.

we were talking with a new CEO recently. His board told him to be both innovative and to not mess anything up with the organization. He’s running the show and struggling to find the right balance. You can imagine how someone with less standing in the organization struggles. Stake out a penalty-free space in which your team can experiment and break things. Who owns my idea if it turns into something successful? I hate all the legal mumbo jumbo. But innovation is all fun until somebody’s idea starts generating lots of money, and you have to settle up equitably. Let your team know the rules. Who owns what? How much does everyone get paid for an idea that proves successful? It can seem premature to consider this while still figuring out how an electronic idea box works. Set the rules before you ask people to play the innovation strategy game.

Each generation has a place in the way a workforce develops and grows. Eventually, one generation will take the reins to manage organizations going forward. If you’re a seasoned business professional, don’t lose sight of the fact that someone probably once viewed you as a “whipper-snapper.” If you’re new to the business world, don’t just assume that those who have gone before you have no idea what they’re doing—they’ve gone through an awful lot of life experiences to get the organization where it is today. If you have generational communication challenges, you know who to call.

When you have an employee issue, you need a professional answer right away. The HR Help Desk is ready 24/7 to answer your tough HR questions.

There Is Work to Do We’re not saying everything requires an immediate answer. Being ready to tackle these questions at the start, however, is important to creating an innovation strategy that works. Mike Brown is the founder of the The Brainzooming Group and the author of “Taking the NO Out of InNOvation,” a guide to breaking through personal challenges to live a more creative and innovation-oriented life. Additionally, he’s a frequent, repeat speaker for organizations, associations and universities.

Give us a call at (855) 474-2836 to find out how to subscribe to get real-time solutions and guidance for your HR challenges.

855.474.2836 | thehrhelpdesk.com

Mike.Brown@brainzooming.com SMART COMPANIES THINKING BIGGER®

BIGGER | hr S M A R T

( by Lauren Sobaski )

S T R AT E G I E S

Making the Most of Two Weeks’ Notice How to transition business knowledge when an employee leaves.

hen I was getting ready to join my first startup, I dreaded having to tell my old boss that I was leaving. I was leading a large project, and I didn’t want to burn any bridges. Before I approached my boss, I outlined a plan for my final two weeks. She was disappointed by my resignation, but gratefully surprised by the transition plan. Losing a knowledgeable employee doesn’t have to drain the long-term expertise and capabilities of your business. How do you preserve that deep knowledge before a key employee leaves? Here are four departure processes that make the two-week transition easier. Cross-Train Ask your departing employee to list: » Projects or functions that he or she is currently managing 38 THINKING BIGGER BUSINESS // September 2017

» Activities that must be performed daily, weekly and monthly in the next 60 days » Essential documents, email threads or contacts for each of the projects, functions or activities Before assigning these activities to specific employees, review the list with them and ask, “What projects or activities are you interested in learning?” Provide access to the relevant files and schedule time for the employee to learn from your departing team member. Develop a Departure Checklist Include both information and access that your employee has, such as: » Files for projects, key relationships or functional responsibilities stored on the employee’s computer hard drive

» Email archives, both sent and received » Calendar of meetings and activities, both internal and external, for the next 60 days » Physical files or meeting notes » Shared drive files » Software log-ins and passwords for company-sensitive information, such as videoconferencing, CRM, financials, web content management software or social media accounts » Authorizations for business accounts, as well as checkbooks or credit cards » Business organization or professional association memberships paid for by the business » Company equipment or location access Schedule time to review the status of the checklist with your employee on a daily basis, and ensure that files and access are transferred. Transfer Relationships Ask your employee to list all of the supplier, key account, customer and other significant relationships that he or she manages. Then draft an email or conversation script for these contacts, informing them of your employee’s departure and introducing their new key contact in your business. Ensure that both your departing employee and the new contact participate in the conversations or are copied

on the emails. Transfer access to past communications to the new key contact. Stay in Touch This kind of post-departure access is one of the greatest benefits of keeping the notice period productive and cordial. Bundle questions from your team into an email, or arrange for a periodic call with your former employee. I’m still in touch with my former boss, and her good-luck note is still on my desk. That two-week plan made the departure easier for both of us. Not everyone in your business is replaceable, but their business knowledge is an asset you can retain.

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BIGGER | law S M A R T

( by Chris Stewart )

S T R AT E G I E S

Rule 504: What You Need to Know Recent changes could streamline capital raises for businesses.

very founder knows that capital raises are rarely easy for any business. Thanks to recent amendments to Regulation D of the Securities Act of 1933, Rule 504 may offer a more streamlined approach. Capital raises take many forms, including a simple “friends and family” cash-for-equity raise, a new partner or investor buying into your business, or a more complex transaction involving seed or Series A equity or convertible debt financing. No matter the size or complexity of your capital raise, compliance with state and federal securities laws can be confusing, time consuming and expensive. The federal government (through the Securities Act of 1933) and each state (through their own “blue-sky laws”) regulate the offering and sale of securities. Because the Securities Act and blue-sky laws define “securities” broadly, almost all capital raises involve securities and require compliance with these laws. Every offer or sale of securities (an “offering”) must be registered with the U.S. Securities and Exchange Commission (SEC) and each state in which the securities are offered or sold … unless it meets an exemption. Options for Exemptions The most common exemptions from federal registration for private offerings are in the SEC’s Regulation D (“Reg D”). Reg D describes specific safe harbors and exemptions in Rules 504, 505, 506(b) and 506(c). Each rule

contains its own set of requirements, qualifications and limitations that must be met to rely on the rule’s exemption and avoid registration, such as no general solicitation or advertising, sales restrictions and other requirements specific to each rule. Rules 504 and 505 exempt certain offerings based on the limited size or character of the offering. Before the SEC’s recent amendments, the maximum amount that could be raised was $1 million under Rule 504 and $5 million under Rule 505. Due to the dollar limitations and other requirements under Rules 504 and 505, most companies have traditionally relied on Rule 506(b) for exemption from the Securities Act’s registration requirements. Rule 506(b) is advantageous because it has no dollar limitation and it “preempts” state blue-sky laws. That means if you rely on Rule 506(b), you don’t have to find a separate blue-sky exemption for each state involved (though you may still need to file some basic state forms). Rule 506(b) specifically allows a company to raise an unlimited amount from unlimited accredited investors and up to 35 nonaccredited investors. In the capital-raising context, an “accredited investor” is typically a wealthy individual who meets certain net worth requirements while a “nonaccredited investor” is an individual who does not meet those requirements. However, if any nonaccredited investors participate in a Rule 506(b)

offering, the issuing company must provide them with very detailed disclosures in advance of sale. Preparation of these disclosures can be time consuming and expensive and may include updated financial statements (potentially including audited financial statements), extensive nonfinancial disclosures regarding the business, and other regulatory disclosures. These costly disclosure requirements make participation of nonaccredited investors impractical, if not impossible. The Case for Rule 504 On Oct. 26, 2016, the SEC amended Rule 504 to increase the maximum amount of securities that may be sold from $1 million to $5 million in any 12-month period and Rule 505 was removed. With the increase of the dollar limitation to $5 million, the rarely used Rule 504 may now be a useful alternative to Rule 506(b) for capital-raising efforts by startups and small to midsize companies because it allows an unlimited number of investors, accredited or not (subject to blue-sky law limitations noted below). Unlike Rule 506(b), Rule 504 does not require the company to provide any particular line item or other information to nonaccredited investors in order to claim the exemption (though it is still advisable to provide all material nonpublic information to potential investors). The primary disadvantage of Rule 504 is that—unlike Rule 506(b)—compliance with Rule 504 does not preempt all blue-sky laws. As a result, if you rely on Rule 504 for federal exemption, you will need a blue-sky exemption in every state where your securities are offered or sold. If your offering is limited to a handful of states, Rule 504 may be better compared to Rule 506(b) since many states have “limited offering” exemptions. For example, both Missouri and Kansas blue-sky laws contain limited offering exemptions for certain sales to up to 25 investors, accredited or nonaccredited (subject to certain qualifications). For startups and companies contemplating a capital raise under $5 million and a limited

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Chris Stewart is a corporate attorney and shareholder at Seigfreid Bingham, P.C., a full-service law firm in Kansas City, Mo. His practice focuses on startups and emerging Businesses; mergers and acquisitions; and private securities laws. Chris enjoys working in the startup ecosystem by serving startups and investors in a variety of investment transactions. (816) 421-4460 // cstewart@sb-kc.com // www.sb-kc.com

This article is for informational purposes only. It does not constitute legal advice or solicitation. Readers with legal questions should consult an attorney. The choice of a lawyer is an important decision and should not be based solely upon advertisements.

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number of investors (including nonaccredited investors) in a few states, Rule 504 may provide an easier and more streamlined path to federal and state securities law compliance. If, however, your capital raise involves more than $5 million or potential investors in many states, Rule 506(b) will likely remain your best option. No matter the size or complexity of your capital raise, the deal should be vetted for compliance with federal and state securities laws.

An exclusive event, featuring expert speakers in the fields of Marketing, Finance, and Business Development. Sept. 28 The Culinary Center of Kansas City 12:30 pm *Early bird pricing available for a limited time. For more information and registration, visit @NAWBOKC on Facebook.

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SCALEUP! KC

FIRST RESPONSE CONSTRUCTION

( by Dawn Bormann )

Remodeling Your Business Model CHRIS AYALA AND FIRST RESPONSE CONSTRUCTION ARE ADOPTING NEW HABITS—AND SETTING THE STAGE FOR BIGGER GROWTH.

hris Ayala earned his reputation in construction by meticulously hanging Sheetrock and satisfying customers from every walk of life. So when he set out on his own 10 years ago and opened First Response Construction LLC, there was little doubt that he would be in demand. Customers quickly came to him, and business was steady. Now Ayala wants to grow his small business to compete on a broader scale, with larger projects. Doing so means acknowledging and addressing his weak link: The office 44 THINKING BIGGER BUSINESS // September 2017

side of the business has never been Ayala’s strongest suit. Transitioning from the construction site to the boardroom has come with challenges, Ayala admits. “It’s hard to transition,” he said, pointing out that he spent much of his life in construction. “When we saw the suits come in, they were from a different world. Now I’m one of those guys.” It’s why Ayala sought guidance from ScaleUP! Kansas City. The business growth program is offered by the University of

Missouri-Kansas City Innovation Center and the U.S. Small Business Administration. It’s open to entrepreneurs who have been in business at least two years, generate $150,000 to $500,000 in annual revenue and are in a market capable of supporting more than $1 million in sales. MASTERS OF THE REMODEL

It’s proven to be an ideal fit for Ayala, who was eager to grow his company. The business has already stopped working in a subcontractor to subcontractor situation on smaller projects in order to seek better-paying contracts with prime contractors including JE Dunn, Straub Construction and others. ScaleUP! has also shown Ayala that he could either be intimidated by shrewd

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negotiators or learn to speak their language. ScaleUP! has helped him employ several strategies to communicate more effectively. The veteran craftsman has quickly learned that people on the other side of the desk might seem savvier, but few people know his industry better than he does. The team at First Response works on residential and commercial properties. Their specialty is Sheetrock. On the residential side, the company handles insurance claims for fire restoration and water damage. The firm completes full renovations, including drywall, ceiling work, painting, framing and more. On the commercial side, First Response completes tenant build-outs or remodels for commercial customers, especially when these clients are downsizing or expanding. First Response avoids working on new construction. Ayala and his team have renovated churches, recreation centers and retail stores.

ScaleUP! has helped Ayala think about day-to-day business operations that he had overlooked. For years, First Response operated without an employee handbook. ScaleUP! showed him how counterproductive that was. If you want to scale your business, after all, you need to trust others to take on more responsibility as you work on growth. Policies help guide your team when you’re not there to supervise them directly. “It needs to be on paper. You should be able to step away from your business and your business should be able to run,” Ayala said. ScaleUP! also taught Ayala to think about time management in a new light. He had to take a good long look in the mirror after hearing that. He used to drop materials off at jobsites so he could review the work. He loved it. But he ended up micromanaging. “By going through the classes, it’s helped me realize that I have hired the right guys for the jobs, and I kind of need to step back and let them do their thing and let them shine,” he said. It’s a new outlook for Ayala. “If you have a manager and then you try to manage for him, it’s kind of like a slap to his face,” he said. “I don’t have to be involved in every facet. It’s what I’m good at, so that’s where I want to go. But I need to challenge myself.” Instead of stopping by jobsites, Ayala was encouraged by ScaleUP! experts to get out of the office and find new growth markets. For Ayala, that means researching projects before making bids and building relationships with partners and potential customers. “I put my time into pre-bid meetings now,” he said. Ayala pulls the blueprints, attends all the meetings with project managers, checks out the competition and looks for partnership possibilities. Every conversation he has builds goodwill and potential sales. “It’s about getting out there,” he said.

‘NOT EVERYBODY IS YOUR CUSTOMER’

ScaleUP! also encouraged him to think wisely about his customer. “Not everybody is your customer,” Ayala said. Ayala used to submit bids for projects that didn’t fit his niche. It often meant his bid wasn’t as complete as one from a competitor who understood the full scope of work and expenses. ScaleUP! has shown him it’s more important to focus on his niche than to take every dollar being waved his way. He’s already turned down some jobs in order to concentrate on long-term growth. Ayala prizes the connections he’s made with other entrepreneurs. Many come from diverse industries that Ayala wouldn’t otherwise have crossed paths with, but there’s been an instant connection nonetheless. “Business is business,” he said. Ayala plans to turn to the ScaleUP! network of entrepreneurs and experts for advice with complex problems for years to come. “There’s going to be a brotherhood of scalers,” he says. “We will forever have someone in our corner when it comes to business.” Dawn Bormann is a freelance writer in the Kansas City area.

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First Response Construction LLC (913) 915-7711 www.frckc.com First Response Construction handles trimto-finish interior construction in residential homes and commercial structures.

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EQUITY BANK NAPKIN STORIES

KASA ELECTRIC

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KASA Electric: It’s About the People hen Mark Lamanno talks about how he’s built a successful company, he says without hesitation, “It’s about the people.”

same look and feel as we did on the same job last year,” he said.

A BANK AS PARTNER Lamanno says the five-year relationship he has with Equity Bank has been instrumental in the company’s growth.

In fact, some people very close to him inspired him to take the leap to start his electrical contracting company, KASA Electric, in 2007. “My inspiration to strike out on my own came from my family. We’d just had our fourth daughter, and I wanted to provide the best life I could for them. I felt starting a company would be the best opportunity to achieve that,” Lamanno said. It was a family affair from the beginning. When the company launched, Lamanno’s wife worked part-time in the office. Even the name of the 10-year-old Grain Valley company reflects the family commitment. The letters in KASA represent the first initial of each of his four daughter’s names: Katherine, Angela, Sofia and Anna. A TIGHT-KNIT TEAM Lamanno and the two electricians who made the leap with him quickly landed a large job. “We were off and running, enjoying a good first two years,” he said. But then the recession hit, and “it was scary times. We were a young company, but we muddled through,” Lamanno said. One of the reasons KASA persevered through the downturn was Lamanno’s ability to reach out to a long-time friend and project manager, Ernie Cota, who bought into the company as a partner. “We kind of locked arms and fought through the hard times. I’m glad we did, because the last three to four years have been fantastic,” he said. KASA Electric specializes in commercial and industrial work, and they also have a fully-staffed service department for 24-hour emergency calls. “Anything that has to do with electrical, we can handle,” Lammano said. As the company has grown, Lamanno continues to look for the same “good 48 THINKING BIGGER BUSINESS // September 2017

“They were looking for some younger businesses and were immediately receptive to what we were looking for. And we were interested in what they were offering,” Lamanno said. people” that served the company well in the early days. He looks for good character, first and foremost. “We can always teach the tools of the trade,” he said. “We ask the right questions that help us understand the people we interview, and we have a good understanding of what we really want out of people. That’s what brings those people to us.” BANKING ON TRUST Lamanno explains that finding good people isn’t just about his staff. It also extends to customers. “We try to align ourselves with customers who are partnership-driven as well. Things just seem to run better when there’s trust,” he said. “We pride ourselves on the Top 10 people we’ve been doing business with for a long time.” The company specializes in nursing and assisted living facilities, but has worked on other high-profile projects such as the 170-unit apartment project at 51st and Oak and industrial projects related to the Intermodal in Gardner, Kansas. The company has sustained steady 20 percent growth year after year, a rate that Lamanno says is manageable. Lamanno also credits the company’s internal processes—and the staff’s ability to carry them out consistently—with establishing and keeping good customer relationships. “We have a standard we uphold to keep consistency. I think people like knowing that if we do a job, it’s going to have the

He noted that his representative at Equity Bank has been a true partner: “Not only do we have business together, we actually go out and share a baseball game together sometimes.” Lamanno expects to see continued growth, and he knows Equity Bank will be a strong partner as they do. “Having that backing as we grow, as our need for cash or capital grows, is important,” he said.

SHARE YOUR NAPKIN STORY

Some of the most amazing business stories started as an idea scribbled on a napkin. Mark Parman, Kansas City Market President of Equity Bank, invites you to share your Napkin Story. “We not only want to hear your origin story, we can help you continue to write the rest of your company’s story,” he said. Equity Bank is a full-service community bank with offices in Kansas, Missouri and Arkansas. Our group of bankers are experienced with businesses from small to large. We take the time to listen to your story and help you design the services that will benefit you and your business. To share your napkin story, get in touch at marketing@ equitybank.com or (913) 323-9300. Visit: Equitybank.com/napkin-stories

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IBC Ribbon Cutting IBC hosted a ribbon cutting to celebrate the expansion of the company’s traffic control division into a building at 1213 W. 8th Street in the West Bottoms.

Youth Entrepreneur Pickleball Champs Nathen Daniels and Ben Anderson, showed off their trophies at the inaugural tournament, which raised funds for Youth Entpreneur‘s programming.

Corporate Collaboration Several corporations collaborate to underwrite scholarships for two Kansas City area M/WBEs to attend the Tuck Executive Program at Dartmouth each year. Representatives of those organizations were recognized on August 8 at Burns & McDonnell’s annual Community of Inclusion Awards: Joyce Christanio, Sprint; Michelle Word, Burns & McDonnell; Valerie Coyazo, KCP&L; Phillip Yelder, City of Kansas City, Missouri; Not pictured: Kate Narboneta, DST Systems, and Mark Smith, Hallmark. A N S W E R I N G S E RV I C E S

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