Upsize Minnesota March April 2020 by Upsize Minnesota

FINDING A WAY Cut costs, communicate, innovate, survive

Sarah Quickel,

owner of EnchantĂŠ

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CONTENTS March • April 2020 • Vol. 19 No. 2 • www.upsizemag.com

PAGE 14

Cover story

Surviving coronavirus: COVID-19 has turned the small business world upside down, but it doesn’t have to be the end for your company. Communicate with your business partners and innovate in order to stay alive. BY ANDREW TELLIJOHN Cover photograph by Tom Dunn

PAGE 4

From the editor:

Bb BUSINESS BUILDERS

PAGE 18

Editor Beth Ewen interviews Capsule cofounder Aaron Keller about the benefits of meeting in person

PAGE 6

A panel of experts shares thoughts on how family businesses can survive and thrive many generations into the future

PAGE 4

Staff list: Who’s who at Upsize magazine, and how to reach us. Upsize Minnesota (USPS 024-029) is published bi-monthly for $20 by Upsize Minnesota, 3033 Excelsior Blvd, Suite 10, Minneapolis, MN 55416. Periodicals postage paid at St Paul, MN and additional mailing offices. Postmaster: Send address changes to Upsize Minnesota, 3033 Excelsior Blvd., Suite 10, Minneapolis, MN 55416

COMMUNICATIONS Plan in advance for communicating during a crisis

WORKSHOP:

by Jon Austin, J Austin & associates

PAGE 22 PAGE 10

CATCHING UP:

Fixing cash flow can differentiate between CPR and embalming fluid by Tom Siders, L. Harris Partners

Lynn and Brian Richardson talk about the challenges and successes of GateKeeper Systems as it navigates airports into its third decade

PAGE 12

PAGE 28

Corporate sponsorship of sporting events can work for small business

Julie Keyes, founder of KeyeStrategies, gives some details on her forthcoming book, “Poised for Exits,” which looks at business transitions through the lens of women

MANAGEMENT

MARKETING by Patrick Klinger, Agile Marketing Partners

BACK PAGE:

Planning now means peace of mind later.

What happens if… THE ECONOMY WEAKENS

RETIREMENT LOOKS VERY TEMPTING…

A DIVORCE OCCURS IN THE FAMILY

YOU DESIRE A CHANGE IN LIFESTYLE

YOUR KID DOESN’T WANT TO RUN THE BUSINESS

THERE’S AN UNEXPECTED HEALTH ISSUE

YOUR BUSINESS PARTNER WANTS TO SELL

CK&Co. can help you proactively prepare your transition with our 4-step action plan. Visit us at lp.ckco-cpa.com/upsize to learn more.

Download our free Succession Planning Guide Online lp.ckco-cpa.com/upsize

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Member of

PUBLISHER

Wes Bergstrom wbergstrom@upsizemag.com

EDITOR

Beth Ewen bewen@upsizemag.com

MANAGING EDITOR Andrew Tellijohn atellijohn@upsizemag.com

DESIGN DIRECTOR Jonathan Hankin jhankin@upsizemag.com

CIRCULATION MANAGER Georgene Bergstrom gbergstrom@upsizemag.com

PHOTOGRAPHER

Tom Dunn tom@tomdunnphoto.com

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“I firmly believe in face-to-face contact,” declared Aaron Keller, co-founder of design firm Capsule. Granted, our interview was before the freak-out over the coronavirus arrived in the United States, but the thought nonetheless holds. “The massive move to so much digital, it becomes so shallow.” I like his solution to the problem. Every month for the last 10-plus years, he’s been hosting a luminary to speak at Capsule, in its dramatic and colorful office space in Minneapolis. The group started with about 10 people and has grown to more than 80. When he first mentioned the idea to a colleague, she exclaimed: “You’re doing a French-style salon!” like during the French Revolution. “They’d get together, and there was a lot of drinking and they started stirrings,” Keller said. For himself, his employees and his audience, Capsule’s version of those salons serve as inspiration, a way to think bigger about something other than the exact problem in the middle of your plate on that particular day. Each gives a talk for 30 minutes. “My only requirement, you have to say the word ‘design’ in your speech,” Keller said, and the speakers have been delightfully varied. Take one recent speaker, a noted apple breeder at the University of Minnesota, who described the parentage of one of its most famous varieties, the First Kiss, which Capsule helped to name. “The mom is the Minnesota princess Honeycrisp, and the dad is a redneck from Arkansas,” is how the grower described the apple, Keller said. “It takes 18 years to get to a new apple.” Or consider Eric Dayton, scion of the Dayton family and a restaurant owner, retailer and a livable urban design advocate. “He is an authentic entrepreneur,” Keller says, and also, yes, our “local billionaire,” but “he’s using entrepreneurship to do good. He could sit back and not do anything.” There was the chocolate man, who’s inventing a fermentation process in a

controlled environment that produces dark chocolate without the bitterness. “If it’s really dark it’s barely edible,” Keller explains about the percentage of cacao in the usual chocolate-making process. “His is a 92 percent and it tastes like a 70.” There was the blow painter, whom Keller calls “the Kevin Bacon of the Twin Cities.” “She’s a very interesting character, faith-driven. She did blow painting for the audience.” That’s right, blowing paint through a straw to create a piece of art. She says “the archangel Michelangelo guides her,” Keller said. “People loved it, thought it was totally different, something that you wouldn’t do on a Thursday morning.” There was the guy that studies memory, who notes “we have really strong memories from our teens and early 20s,” then it’s all a mush. “He theorizes it’s because we get in these patterns,” Keller said that prove to dull our senses. Then he scrolls through his phone, exclaiming over a half-dozen more former and upcoming speakers. “It’s freaky cool stuff.” Keller admits the monthly salons are difficult to keep going, and he concedes there are direct benefits to his business. Capsule gains attention from potential clients, and he and his employees get to expand their minds. “We’re selling our brains,” he explains, “so advancing our brains as a group is an important thing to do.” But more to the point, the salons guard against everyone just staying home and YouTubing everything, “which would be a sad end to society, wouldn’t it?” As Keller says about the topics, “This is not something you talk about every day,” and that is the point. What about you? How are you expanding your mind beyond the quotidian? (And if you don’t know what that means, take a brain-expanding moment to look it up.) Beth Ewen Editor and co-founder Upsize Minnesota bewen@upsizemag.com

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PHOTO BY JONATHAN HANKIN

freaky cool

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communications

BUSINESS BUILDERS

Plan for crisis communications before one hits by Jon Austin

TIPS 1. Have a plan in place for how you are going to handle a crisis. Make sure to revisit the plan from time to time, testing it and adjusting it as appropriate. 2. Assign responsibilities. Who takes phone calls? Who talks on behalf of the organization? Who creates content and who approves it? 3. Be prepared to pull in people from other departments or functions on a temporary basis and to supplement your resources with an outside agency. 4. There is no “winning” strategy in a real crisis. Your goal is to minimize the damage being done and to make the return to “normal” as quick as possible. 5. You’ve got a finite amount of credibility. Don’t squander it by saying things you have to take back later. Don’t guess, don’t speculate or theorize.

UPSIZE MARCH • APRIL 2020

AS YOU’RE READING the first few sentences of this article to decide if it’s worth finishing, an organization somewhere is in an unexpected, unwelcome event that could severely harm – or even end – its business and prospects. Chances are, that organization has done little planning to prepare, particularly in terms of how to communicate to its employees, customers, investors, business partners, neighbors and others stakeholders. The people running the organization will do their very best; maybe it will work out, maybe it won’t. Maybe that organization is yours. Two truths: Even the best organizations experience crises: machines break, people make mistakes, external events intrude without warning and second, every organization will eventually encounter a crisis. Despite those realities, most don’t have a plan for how they’ll respond. Most organizations that do have a plan don’t keep it up. Most organizations with an up-to-date plan haven’t tested it recently. Many organizations that maintain and test their plan don’t activate it in an actual crisis event. Where does your organization fall on this spectrum? If the honest answer to that question is, “Not where we want to be,” then creating a real, useful crisis plan should be at the top of your to-do list. While that work is in progress, though, here’s a quick-start guide.

What’s a Crisis? First, what scenarios is your organization most likely to face? While every organization is different, here’s a list of some common ones: • • • • • • • • •

Loss of key personnel Loss of facilities or capacity Employee misconduct Product quality issues Enforcement actions Accidents Workplace violence Investigations Community-wide events

What additional vulnerabilities are uniquely yours? Next, assign responsibilities. Who takes phone calls? Who talks on behalf of the organization? Who creates content and who approves it? Chances are you’ll run out of people before responsibilities because no organization staffs for the possibility of a full-blown crisis. Be prepared to pull in people from other departments or functions on a temporary basis and to supplement your resources with an outside agency. Third, do the work. Here are some tips I’ve garnered from doing hundreds of these events over the last quarter-decade: • Set your context. There is

no “winning” strategy in a real crisis. The only good crisis is one that doesn’t happen. Instead, your goal is to minimize

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The higher your net worth, the higher your anxiety index may soar. Complexities multiply. More variables come into play. At times like these, whose advice do you value most? The team who looks out for your needs, and your needs alone. Who champions for you, every day. Who provides a continuous, comprehensive, and coordinated approach to wealth management and mentors your money through every mile of your journey. We call that advice driven by advocacy. We believe you’ll call it “irreplaceable.”

President JNBA Financial Advisors

MINNEAPOLIS: 952.844.0995 | DULUTH: 218.249.0044 | JNBA.COM Past performance may not be indicative of future results. Different types of investments involve varying degrees of risk. Therefore, it should not be assumed that future performance of any specific investment or investment strategy (including the investments and/or investment strategies recommended and/or undertaken by JNBA Financial Advisors, Inc. (“JNBA”)) or any non-investment related services, will be profitable, equal any historical performance level(s), be suitable for your portfolio or individual situation or prove successful. A copy of our current written disclosure Brochure discussing our advisory services and fees is available upon request. The scope of the services to be provided depends upon the needs of the client and the terms of the engagement. Please see important disclosure information at www.jnba.com/disclosure.

the damage being done and to make the return to “normal” as quick as possible. Playing defense, though, is not the same as being passive. Play aggressively. • Don’t guess. You’ve got a

finite amount of credibility. Don’t squander it by saying things you have to take back later. Don’t guess, don’t speculate or theorize.

• Gather facts. Monitor main-

stream and social media. Listen to what your employees, clients, customers and shareholders are saying. Do this in a methodical way by setting up your own monitoring function, using clipping services or outside media monitoring agencies, regular conference calls with key personnel on the frontlines, etc.

• Get help from people who have been there. Unless your

organization has a well-developed response capability of its own, consider reaching out to experienced communications counsel – someone who’s been there, done that and got the T-shirt to prove it – as a source of both strategic counsel and for frontline team members.

• Don’t leak bad news over time. If you’ve got bad news,

get it out and get all of it out upfront. Hiding it almost always fails, and dribbling it out in spurts only spreads the pain over a longer period of time and makes others suspicious of you.

• Don’t waste the moment.

In a crisis scenario, there’s an opportunity to connect with stakeholders that should not be wasted. When everyone is paying attention and wants to know, “What does this mean for me?” answer that question with honesty, sincerity, empathy and humanity.

Now what? Crises are those kind of lowprobability, high-risk events that are easy to ignore in the face of more urgent demands on an organization. Like many of those events, however, should the bill come due, it will fall most heavily on those organizations that neglect to prepare for such events. The good news is, with a modicum of preparation and practice, the costs of such events can be effectively reduced. It is within the reach of almost any organization. So, get to it. Now.

• Tell the truth. It should go

without saying, but don’t lie to your stakeholders. It’s bad karma and it doesn’t work in an era when every document, every action, and every statement is one click away from being everywhere. Don’t do it. Ever.

“ There is no ‘winning’ strategy in a real crisis. The only good crisis is one that doesn’t happen. Instead, your goal is to minimize the damage being done and to make the return to ‘normal’ as quick as possible.” Jon Austin J Austin & Associates

Jon Austin is senior partner at J Austin & Associates: 612.839.5172; jon@jaustingroup.com; www.jaustingroup.com.

UPSIZE MARCH • APRIL 2020

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financial

SOLUTIONS

Two Important Ways to Align Your Business and Personal Financial Lives by Kim Brown

t’s not exactly a surprise that the delineation between leaders’ business and personal lives is blurry, to say the least. (And, for those operating as an S-Corp, it’s all even more entwined.) Owning and operating a company is far from a 9-to-5 endeavor; every decision an owner makes impacts their home life as well. So how can business leaders make sure both sides of the equation are aligned? Here are two important steps to keep in mind:

KIM BROWN: As president of JNBA

Create a personal financial life plan, not just a business plan. Business success doesn’t happen by accident, and neither does making sure that success carries over to one’s personal life. Establishing a formalized plan that incorporates both will help with bigger decisions like business transition plans, retirement or investment spending. Business leaders need to take into consideration not only their business goals, but their family’s life goals as well.

JNBA FINANCIAL ADVISORS

Financial Advisors, one of the country’s top independent wealth management firms, Kim Brown — along with her husband, CEO Richard S. Brown — leads a team of financial professionals that work with business owners, companies and family offices to make sense of the personal impact and opportunities planning strategies have on the owner and family’s life plan. Kim was inducted into Finance & Commerce’s Top Women in Finance Hall of Fame in 2018.

Leverage the right team. Assemble a team of advisors that understands how business and personal fit together. Tax professionals, attorneys, financial advisors, and even key employees can all play an important role, from building a safety net for the business and the family, to creating a legacy for the next generation to developing an exit strategy. Financial advisors with small business experience can counsel and advocate for business owners, and build a strong foundation for both business and personal success. The key is to ensure that owners and all their professional advisors understand how business challenges and opportunities impact their personal financial picture, then act accordingly.

Please see important disclosure information at https://jnba.com/disclosure/.

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Founded over 40 years ago, JNBA Financial Advisors is an independent fee-only wealth management firm that delivers customized life planning strategies and solutions to optimize resources. JNBA’s advice driven by advocacy™ approach employs a multigenerational team to drive the planning process for its clients, including strategy development and implementation with other professionals (attorneys, accountants, etc.) as appropriate. JNBA also provides financial planning services as an executive benefit to companies and their management teams. Kim Brown President Kim.Brown@JNBA.com 952.844.0995 JNBA Financial Advisors 8500 Normandale Lake Blvd. Suite 450 Minneapolis, MN 55437 www.JNBA.com

MARCH • APRIL 2020 UPSIZE

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management

BUSINESS BUILDERS

Cash flow projections mean life or death for struggling businesses by Tom Siders

TIPS 1. Start a turnaround effort with benchmarking, which will help identify areas in which a business is underperforming and may have opportunities for near-term improvement. 2. While cutting overhead can be important for turning around a struggling company, make sure those cuts aren’t in areas that could support potential areas of improvement. 3. Growth is important, but it must be strategic and profitable growth. 4. Slow- and never-moving inventory should immediately be discounted in order to convert it into cash. 5. The biggest potential area for improvement with some companies involves shortening the cash operating cycle, which is the time between paying for purchases, converting them to inputs, selling them and collecting from customers.

UPSIZE MARCH • APRIL 2020

WE ARE NOT turnaround specialists. Regardless, we are occasionally asked by intermediaries to intervene with a business in financial distress. Before accepting such an assignment, we ask ourselves, “Will CPR work for this business, or is it too late?” The answer almost always comes down to cash flow. With a troubled business, little else matters. If the business can be improved to produce enough cash flow to work out of the problem, applying CPR makes sense. If not, it is time to order embalming fluid. Why cash flow? Cash flow is the lifeblood of the business. Further, projected future cash flow is the single biggest driver of the price a sophisticated buyer is willing to pay for a business. Cash flow drives value. Improving cash flow We typically start rehabilitation projects with benchmarking. If the business is a member of a trade organization, typically there is industryspecific benchmarking data available. Otherwise, other generic sources are available from places such as the Risk Management Association (RMA). We use the benchmarking to compare the client’s financial ratios and key metrics to other businesses of similar size and industry. Identifying the data for which the client is in the bottom quartile, or bottom half, helps identify the areas within the business that can produce near-term improvement in cash flow. With the benchmarking data, we typically find four areas that can be addressed by cash-starved business-

es. But since cash flow drives business value, even healthy businesses should consider some attention to these four areas on a regular basis. Overhead Businesses in financial distress typically slash overhead, often in the form of across the board cuts. While reducing overhead is necessary for a troubled business, care should be exercised to avoid cutting into muscle or bone. Cuts to marketing can damage revenue growth at a time when additional revenue may be needed to work out of the problem. Mandatory pay cuts, especially in the current job market, can cause an unwanted loss of talent. Excessive or misdirected overhead cuts can further damage the business. However, regular control of overhead is good business hygiene, even for a healthy company. We worked with the owner of a profitable, growing manufacturing business who conducted a head count on the first of each month. He believed his business required three employees producing goods or services to support the budget for every nonproduction or overhead employee. So, no new “overhead” position could be filled unless there was sufficient growth to add three new production personnel. Growth Often, financially troubled businesses attempt to grow themselves out of the problem. This is an admirable goal. The challenge is how to grow sales. If marketing and sales resources are downsized through overhead cuts, growth could be a challenge. If the strategy is to cut prices to

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attract more sales, will competitors match those cuts to retain their customers? If so, that strategy may only result in reducing prices to the current customers without the expected increase in total sales, and thus it may compound the cash flow problem. If the strategy is to chase new revenue with new products or services, or in new markets, a cash strapped business will not likely have the necessary cash flow to cover the required investment. We once worked with a client who was pursuing an opportunity with a potential new customer that would have nearly doubled his sales. Due to declining cash flow, his bank was reluctant to increase his credit line. We were asked to help him work through a cash-flow forecast. Turns out the incremental net operating profit on the new business would be just under 3% of sales, which would only modestly boost profits. But the 60-day terms required by the new customer would have essentially put him out of business due to negative cash flow. Growth is important, but it must be strategic and profitable growth. Every business, regardless of health, should project the impact of growth not only on profit, but also on cash flow. Gross profit Cash-starved businesses often overlook the opportunity to improve cash flow by improving gross margin. A business can increase gross profit by increasing its selling prices. Yes, business owners fear losing customers. But if gross profit is at 50 percent, a 10 percent increase in prices means you can lose 17 percent of your customers and be no worse off. A business can improve gross prof-

it by eliminating sales discounting. Using the same example as above, at the same gross profit of 50 percent, if you discount your prices by 10 percent, you need a 25 percent increase in sales just to maintain. The exception, of course, is slow-moving or unpopular (never-moving) inventory, which should be immediately discounted to convert the inventory to cash. Shorten cash operating cycle Perhaps the biggest short-term “bang for the buck” is the opportunity to shorten the cash operating cycle. This is the number of days required between paying for purchases, converting the inputs to product, selling them and collecting from customers. It is calculated using the average of days costs in inventory plus days sales in accounts receivable minus the average number of days in accounts payable. If your accounts receivable averages 47 days and the days in inventory averages 31 days, and number of days in accounts payable is 25, your cash operating cycle is 53 days. Simple math of 47 plus 31 minus 25. Shorten the cycle and cash flow improves. It improves by faster collections from customers, gaining better prices or terms from suppliers, maintaining leaner “just in time” inventory levels or some combination of all three. In conclusion, we remind every business owner, whether cash strapped or healthy, that the eventual buyer of your business will set the price based primarily on the cash flow of the business. So, start benchmarking, manage your overhead, only grow strategically, improve gross profit and shorten your cash operating cycle.

“ If the business can be improved to produce enough cash flow to work out the problem, applying CPR makes sense. If not, it is time to order embalming fluid.” Tom Siders L. Harris Partners

Tom Siders is a partner with L. Harris Partners: 952.944.3303; tom.siders@lharrispartners.com; www.lharrispartners.com.

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MARCH • APRIL 2020 UPSIZE

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marketing

BUSINESS BUILDERS

Sponsoring sporting events isn’t just for large corporations by Patrick Klinger

TIPS 1. Consider your audience. Older demographics might be a better fit for golf or baseball, while a millennial target might be more suited toward a soccer or college sports sponsorship. 2. Also consider the seasonality of sports. Make sure your partner can help you during your key business season. A landscape company might not be an ideal sponsor for a hockey team. 3. Don’t get swayed by pitches upselling soft assets that won’t grow your business. Know your budget and stick to it. 4. Formulate a strategy. Ask yourself how the sponsorship and every benefit in it will help you accomplish your objectives. 5. Most sponsorship sellers provide sponsors with the right to use their logo in advertising and promotional efforts. Use it. You’re paying for the right to be affiliated with a team or event and its fans. Including the logo will highlight your support and set your company apart.

UPSIZE MARCH • APRIL 2020

STEP INTO ANY SPORTS VENUE and you’re immediately met by an array of corporate logos. Even before you’ve emptied your pockets at security, you’ve likely witnessed the logo of a naming rights partners on the venue, another over the gate and more on the outdoor marquee. There even might have been a sign for a corporate sponsor on the parking ramp adjacent to the venue. Sign after sign sharing brand after brand. Sponsorship of sports competitions and venues, in its various forms, has existed since the 5th century BC in Ancient Greece. Now, 2,500 years later, teams and sponsors need each other more than ever. Settle into your seat and you’ll notice giant brands like Target, US Bank, Pepsi and Best Buy. As a small business owner who must manage marketing resources judiciously, the idea of joining forces with a sports team seems fanciful. But sponsorship is not just the domain of big business. Small and local companies can also use it as a marketing tool to grow business and improve their standing in the community. Companies invest in sport for a variety of motives, from the chance to leverage the passion and loyalty shown by fans to the opportunity to engage in hospitality and offer a great experience to businessto-business contacts, potential clients and customers. Key reasons typically fall into the following categories: • Brand building — will a sponsor-

ship create more brand awareness for your business? • Driving business — can you generate business with the team’s fans, other sponsors or even from the team itself? • Entertainment/hospitality —

are you looking to entertain top clients, prospects and employees? • Community — would you like to showcase your support of the hometown team?

With so many teams and events at every level in Minnesota, choosing the right sports marketing opportunity can be overwhelming. Start with your target audience. It’s the most critical component in selecting any sponsorship and it’s especially important for a small business. If the fans of the sport, team or event don’t fit with your current and prospective customers, your investment, no matter how big or small, won’t be successful. For instance, if you have a product or service that appeals to an older demographic, baseball and golf might be a good match. If you’re attempting to reach millennials, consider soccer or college sports. A local youth sports team or venue can be an effective platform if you have a business that appeals only to a small geographic area. Also consider the seasonality of sports. A landscape company sponsoring a hockey team may not be an ideal fit. Make sure your partner can help you during your key business season. Other key considerations when selecting a partner include the team or event’s reputation, performance, popularity, attendance, media coverage, willingness of the partner to support your efforts and, of course, cost. Once you’ve identified the right partner, determine what you can afford. Focus on securing the assets that are most beneficial. One of the biggest mistakes new sponsors make is purchasing lots of unnecessary options that are good for the ego yet not so great for the bottom line. Only buy what you need to make the sponsorship work for you. Sponsorship sellers will often attempt to upsell you by adding “soft” assets that won’t grow your business but will expand your budget. Don’t do it. Your budget should also include resources to “leverage” the sponsorship. The sponsorship fee is only the starting point. Usually a sponsor will spend an amount over and above the sponsorship fee to maximize the return on

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their investment. A successful example of leveraging a sponsorship was when Hiway Federal Credit Union amplified its sponsorship with the Minnesota Wild by creating Hiway Hockey Kids4Kids, a program that encourages youth hockey teams throughout Minnesota to raise money for Gillette Children’s Specialty Healthcare in Saint Paul. The credit union used some of the benefits it received as a sponsor of the Wild to inspire youth to community service. By doing so, they were able to engage prospective new members who hadn’t yet selected a banking partner and generate positive media exposure that increased brand awareness. Now that you’ve established objectives, identified the right partner and developed a budget, how do you go about putting together a program that works for your company? Here are some tips: 1. Formulate a strategy. Ask yourself how the sponsorship and every benefit in it will help you accomplish your objectives. 2. Be clear about what you need. Teams and events rely on sponsors. Most will present an opportunity even for those companies with modest budgets. Skip the extras that will bloat your budget. 3. Add value to the fan/brand experience. For instance, Hiway created a “Prize ATM” that gives fans at Minnesota Wild games the chance to insert a promotional card into a special ATM that spits out a receipt for a corresponding prize. Fans enjoy a fun experience and go home with a free gift and a positive impression of Hiway. 4. Have a plan for every benefit. Let’s say you decide a partial season ticket plan could be beneficial. How are you going to use the tickets? Sweepstakes, vendor incentive programs, contests and employee awards/recognition are

all appropriate. Letting them sit unused is not. In fact, 43% of all tickets owned by businesses go unused. That’s a lot of wasted dollars. 5. Use the logo. Most sponsorship sellers provide sponsors with the right to use their logo in advertising and promotional efforts. You’re paying for the right to be affiliated with a team/event and its fans. Including the logo will highlight your support, increase brand preference and set your company apart from the competition. 6. Attend sponsor events. Most teams conduct sponsorship summits and other events exclusively for corporate sponsors including golf tournaments, holiday parties and luncheons. Participation provides a great opportunity to learn best practices from other sponsors and make valuable business connections. 7. Ask the sponsorship seller for their business. Teams and events need products and services, too. Your company may be able to offset some of the cost of the sponsorship by offering in-kind services or products or selling them. 8. Be realistic. Like most marketing efforts, you may not see direct or immediate conversions. Good sponsorships are an investment that pay dividends with time. As a small business owner, you can benefit from sports marketing. Just make sure you’ve prepared before you get in the game.

“ Only buy what you need to make the sponsorship work for you. Sponsorship sellers will often attempt to upsell you by adding ‘soft’ assets that won’t grow your business but will expand your budget. Don’t do it.” Patrick Klinger Agile Marketing Partners

Patrick Klinger is president of Agile Marketing Partners: 612.366.0419; patrick@agilemarketingco.com; www.agilemarketingco.com.

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MARCH • APRIL 2020 UPSIZE

Surviving

COVID-19 Cut costs, contact business partners and look for opportunities to beat back tough times

hen COVID-19’s arrival in Minnesota started forcing the closure of schools, restaurants and bars, it sent Minnesota small businesses reeling. Doom and gloom, ranging from layoffs to closings, dominated the headlines. Sarah Quickel, owner of Enchanté in Stillwater, heard all the noise and felt the same pain. But she also keeps plowing forward, finding ways to meet customers’ needs in as many different ways as possible. While there are a lot of ways she can’t compete with large retailers, she can be nimble. She’s offering through social media to meet up with customers at the Stillwater store or to display her women’s apparel offerings via Facetime. It’s not replacing all of her lost sales by a long shot, but it has made a difference. Within a day of a series of social media advertisements, she was showing shoes to a woman in Arizona over a social media channel. “Really, honestly, you have to just keep being creative,” she says. “I’ve tried to come up with ways that we can succeed that the big stores can’t offer. You’ve got to keep it personal. What we do well is keeping it unique and personal and fun.” Where everyone’s email inbox is inundated with messages from every list they’ve ever signed up for describing how they’re getting through the pandemic, Quickel is determined to be an oasis, a source of fun amidst the drumbeat of bad news. “That’s not our job,” she says of the hundreds of companies out there reminding people to wash their hands and not touch their faces. “I really focus on retail therapy. Let’s just try to make people laugh and smile. They can turn to other

sources for fearful information or factual information. Everyone has their different forms of therapy. What I’ve been trying to focus on is people who do like retail therapy. You’ve just got to focus on how you can remain unique.”

Staying upbeat, finding sales

Quickel’s husband works in healthcare. She’s heard all the bad news and felt the panic. But she’s also got bills to pay and she’s determined her store isn’t going to succumb to the tough times without a fight. So, while the streetss surrounding Enchanté are mostly empty, her staff is taking videos of spring wear, getting ready to put it on social media and find some sales. “We’re trying to find ways we can succeed that the big stores can’t offer,” she says. “We’re all in this together. Nobody needs a pity party. We’re all in this together.”

Preparing in advance

Enchanté is just one of many small businesses across the state right now trying to find ways to stay alive. St. Paul-based Deneen Pottery, which manufactures high-quality handmade mugs, shut down for a week as soon as the “social distancing” guidelines were released. The company has 60 production employees in a small space working together to manufacture the mugs through its production process, which means “a lot of

Normally bustling streets in St. Paul were nearly empty on St. Patrick’s Day as COVID-19 ended the revelry.

BY ANDREW TELLIJOHN photographs by Tom Dunn 14

UPSIZE MARCH • APRIL 2020

www.upsizemag.com

COVER STORY people working within six feet of each other,” says Niles Deneen, president. Plus, with a lot of restaurant, tourism and national park partners, a significant portion of its upcoming orders are on hold. Employees were sent home for a week while the executive team pondered its next moves. “I see a contraction for the next two to four months probably,” he says. “I don’t know how the economy can bounce back when we’ve got so many small businesses operating on thin margins without a lot of cushions, with fixed costs that are not being covered. There’s no assistance that can come fast enough to business owners and I don’t think anyone is really considering how impactful it is for people who have a personal guarantee on a loan that is now going to be called in.” That said, while Deneen has been growing by double-digit rates for several years, he also knows cash is king. He began noticing some weakness in the financial indicators he monitors and he began pulling back on growth, focusing on building up reserves and paying down debt. Not that he predicted this. “Oh, my God, no,” he says. “This contraction is unprecedented.” But the advance preparation has him in a little bit better shape than he otherwise might have been. “This year was the year we decided to take a step back,” he says. Deneen adds that he’s also arguing losses should be covered by insurance policies that have business interruption coverage because the virus created a physical loss when governmental agencies ordered shutdowns.

Contact your team — don’t disappear

In the meantime, as businesses attempt to figure out how to work through the disastrous landscape spread by the coronavirus, experts say it’s vital they reach out and remain in contact with business partners, bankers and other members of their team.

CONTACT: DAVID DEEDS, professor at the University of St. Thomas’ Schulze School of Entrepreneurship: ddeeds@stthomas.edu; www.stthomas.edu/centers-institutes/schulze-school/ NILES DENEEN, president of Deneen Pottery: 651.646.0238; niles@deneenpottery.com; www.deneenpottery.com. ALFREDO MARTEL, president and CEO of the Metropolitan Economic Development Association: 612.332.6332; info@meda. net. www.meda.net. SARAH QUICKEL, owner of Enchanté: 651.439.7232; Enchantemn@gmail.com; www.shopEnchante.com. JOHN THWING, SBA Guy at 21st Century Bank: 612.372.4320; sbaguy@21stcb.com; www.21stcb.com.

UPSIZE MARCH • APRIL 2020

Talk to everyone and see about working out new terms that will help get through this, says John Thwing, also known as the “SBA Guy,” at 21st Century Bank. “If you end up with more cash than you need in the short term, that’s a good thing,” he says. That’s echoed by David Deeds, a professor at the University of St. Thomas. “The first thing is move quick, get in front of this,” he says. “Your revenues are going to be declining substantially. Get in touch with your banks, your landlords and any creditors you’ve got. Start working out payment terms. Don’t hide. Everybody is in the same situation. Everybody should be having some forbearance.” If you haven’t spoken with your banker about a line of credit, now might be the time. Your landlord doesn’t want to kick you out or they’d then have to re-lease the space. “It isn’t going to get re-leased anytime soon anyway,” Deeds says. “If you need some rent forbearance, it’s probably in their best interest to work with you.” Then think about your cash outflow. Are there expenses you can put off so you can take less out of the business for a while? Revenues are going down. “So, you now have to get in front of the cash going out the door,” he says. “Then you can keep your business alive until we can get past this and you can keep yourself alive until we can get past this.” Once you have done that, then take a look at whether or not there are creative ways you can find to generate any kind of revenues during the difficult time. “You’re always balancing is it going to pay,” he says. “You may want to cull as much of your marketing back as possible.” The big thing is to really plan — and for longer than you expect. “The point is not to thrive, for small businesses right now,” he says “The point is to survive.” Finally, Deeds says, keep an eye out for government programs at the local, state and federal level. There will be small business disaster plans put together to help. “Take advantage of them.”

Watch out for predators, look for opportunities

The Metropolitan Economic Development Association is one among many organizations working with clients to survive the coronavirus-associated challenges. Alfredo Martel, president and CEO, has spoken with a number of consultants, loan officers and other experts to put together a list of the top steps businesses should take, ranging from checking on financing to evaluating overhead spending and communicating with employees. Of special note, Martel says, small businesses need to be extra careful about answering any emails they receive promising fast solutions to their problems. “Any small business owner that is receiving offers or contacts that are unsolicited, they should manage them with extreme caution as a phishing tactic,” he says.

www.upsizemag.com

COVER STORY On the upside, Martel says difficult times in the past have often brought out some of the greatest innovations. He hopes this is no different. It’s going to take leadership and creativity to get through the difficult times, but it can happen. Already, he says, some companies have been innovating by reconcepting their core competencies to find ways to help out during difficult times and earn revenue in the process. He cited as an example Tattersall Distilling, among other distilleries, switching gears and producing hand sanitizer. “One thing that small business owners have is agility,” he says. “We have an immense opportunity to be creative and agile in these circumstances and in creative thinking there is an opportunity to take a look and evaluate is there a new market emerging for your core competence.” So, with some creativity and strong leadership, he says, small busiSarah Quickel, owner of Enchanté, has

been meeting cusotmers one-on-one or over social media channels to retain some revenue while stores are closed due to the coronaviris.

Thursday, May 21

A Luncheon Workshop at the Minneapolis Club

AVOIDING THE AVOIDABLE It is not unusual for companies to fail after years of profitability. And the worst part is, many times such dire outcomes could have been prevented. This workshop’s panel of experts discuss what to look out for, so that you can “Avoid the Avoidable”. Cost: $34.00, which includes the program, lunch and parking during the event. Location: The Minneapolis Club, 729 Second Ave. S. Enter the parking ramp from the 8th Street side. SPACE IS LIMITED! REGISTER NOW, go to www.brownpapertickets.com/event/4506517 For questions, please contact the Front Desk team of The Minneapolis Club 612.332.2292 or concierge@mplsclub.org

SCHEDULE: 11:00 – 11:30 — Registration & Networking | 11:30 – 1:00 — Introductions, Lunch & Workshop | After 1:00 — Networking

www.upsizemag.com

MARCH • APRIL 2020 UPSIZE

WORKSHOP: FAMILY BUSINESS

STAYING within the FAMILY

Best practices for ensuring successful transitions into the future By Andrew Tellijohn

Photographs by Jonathan Hankin

hether it’s the preceding generation not wanting to let go, the succeeding generation being unwilling to acknowledge the need for outside leadership or any number of other potential problems in between, statistics show that the more generations a business stays within a family, the lesser its chances of staying successful. So, what steps can family business owners take in order to give their company the best chances of staying strong for the long term? A panel of experts shared their thoughts during a January panel discussion at the Minneapolis Club hosted jointly by Upsize magazine and Rick Brimacomb’s Club Entrepreneur.

Communication is key

One regular theme among the entire expert panel was the need for better communication among participants in the family business. Those that are successful meet regularly, whether quarterly, monthly or on some different schedule, to discuss various issues of importance, says Jon Keimig, director of the Family Business Center at the University of St. Thomas. “There are different types of meeting where they get together, but it is not talking about the day to day of the business,” he says. “It’s talking about far off into the future and planning for the family and ownership of the business.” It’s especially important for dealing with any lingering conflicts, which can be healthy to a point, but often go unresolved and become a hindrance, Keimig says. “The problem is the family wants unity,” he says. “Those

" It’s really easy to kick the can with planning. Nobody wants to talk about death and taxes. It’s really easy to push it off for another day. And that can really create problems.” —Doug Wolgamot Winthrop & Weinstine

UPSIZE MARCH • APRIL 2020

www.upsizemag.com

WORKSHOP: FAMILY BUSINESS “ Sometimes we do have blinders on because it’s something we desire, we want for that person. There are times when those blind spots can create pressure to join a family business where maybe that person is going to be better suited following a passion somewhere else.” —Kelly Thorp, Sarah Bridges Consulting

two things are tough.” Kelly Thorp, president of Sarah Bridges Consulting, suggests using outside resources, whether it’s an advisory board, a coach or a consultant, who is trusted and objective. “Have someone come in and mediate and coach and have the conversation together,” she says. “This does a couple things. One, it gets you to the other side, but also, two, it ensures that everybody is heard. Because we all have roles in our families outside of work that sometimes show up at work. We want to make sure that one, it’s conducted in a way where the best possible outcome occurs, and two, where everyone has a voice at the table.” What does not work is ignoring the issues. “If there is a conflict it’s better to get it out in the open instead of bottling it up,” says Tammy Hutter, tax manager at Eide Bailly. “Everybody might get a little heated and you might have to have somebody in the room, a neutral party, which helps.”

Succession planning

One area where family businesses have traditionally struggled, both in communication and execution, is succession planning. In the past, says Doug Wolgamot, a shareholder at Winthrop & Weinstine, family business owners often waited until it was too late to take up the issue of what would happen when they wanted to move on. “It’s really easy to kick the can with planning,” he says. “Nobody wants to talk about death and taxes. It’s really easy to push it off for another day. And that can really create problems.” Even if they did make plans, they often put them in a drawer without informing their heirs. “Then mom and dad would die and [the kids] would find out what the plan was,” he says. “It just didn’t work really well. Now there’s a shift toward family governance and family meetings and having those meetings early. I think that’s really

" Sometimes you’ve got to cycle off advisers and bring new ones in. Often when there is that transition, mom and dad’s advisers are mom and dad’s age. So, how do you start integrating younger advisers that align more with the next generation?” —Jon Keimig Family Business Center

www.upsizemag.com

MARCH • APRIL 2020 UPSIZE

WORKSHOP: FAMILY BUSINESS “ One thing I’ve learned is when an outside leader comes in, they soon discover it’s not all about profits, it’s about legacy, it’s about intangibles. It surprises some people.” — David Lyman, Lyman Executive Search

the key to having a successful plan.” That’s important, Thorp says, because business owners cannot assume their children or other relatives want to actually stay in the business. “Sometimes we do have blinders on because it’s something we desire, we want for that person,” she says. “There are times when those blind spots can create pressure to join a family business where maybe that person is going to be better suited following a passion somewhere else.”

Add outsider help

While family business owners might be tempted to insulate themselves from the greater community around them, panelists say they should actually be more aggressive in seeking advice and assistance from the outside. That can come in the form of a board of directors or

CONTACT THE EXPERTS TAMMY HUTTER is tax manager at Eide Bailly: 612.253.6571; thutter@eidebailly.com; www.eidebailly.com. JON KEIMIG is director of the Family Business Center at the University of St. Thomas: 651.962.4560; jon.keimig@stthomas.edu; www.stthomas.edu/familybusiness. DAVID LYMAN is principal at Lyman Executive Search: 612.812.3263; dlyman@lymanexecutivesearch.com; www.lymanexecutivesearch.com. KELLY THORP is president of Sarah Bridges Consulting: 612.290.8231; kelly@sarahbridges.com; www.sarahbridges.com. DOUG WOLGAMOT is a shareholder at Winthrop & Weinstine: 612.604.6756; dwolgamot@winthrop.com; www.winthrop.com.

UPSIZE MARCH • APRIL 2020

board of advisers, says Thorp, who recommended at least a few such voices. They’ll be impartial but vested and they’ll tell you the truth. “They’re going to care about your business,” she says. “Getting that outside perspective from a couple different people is really important.” One note: It’s important as younger generations cycle into leadership that they bring on their own advisers. “Sometimes you’ve got to cycle off advisers and bring new ones in,” Keimig says. “Often when there is that transition, mom and dad’s advisers are mom and dad’s age. So, how do you start integrating younger advisers that align more with the next generation?” Or, in the case where none of the succeeding family members are ready to step into leadership roles, outsiders can help bridge the gap there until that next generation is prepared. That’s important, not just for having the right people in the right roles, but also for being able to grow and adjust as a company to new ways of doing business. “A family member might not be the best person for that job. Even though you want to hire them, you have to be realistic,” Hutter says. “As families go down the next generation, there are going to be some members that are involved and some that aren’t. Along those lines, maybe what worked for mom and dad for 30 years isn’t going to work for the next 30 years, so they have to be open to making changes for the future.” Adds David Lyman, principal at Lyman Executive Search: “As a family business you have to realize there is a market out there. You can’t get so insular about talent; in particular you’ve got to be an attractive employer.”

Family culture as selling point

Panelists universally agreed that hiring is one of the biggest challenges facing family-owned businesses today. “Everyone is feeling that pressure,” Keimig says.

www.upsizemag.com

WORKSHOP: FAMILY BUSINESS “ People don’t realize when they are coming into a family business that the next generation doesn’t automatically happen. The transitions to the next generation don’t automatically happen. It takes a lot of work and planning to make it successful.” — Tammy Hutter Eide Bailly Lyman says family businesses and the cultures they bring with them can be an alluring selling point for bringing in leaders from larger corporations. One thing to keep an eye on, however, is the newcomer’s fit into the culture of the business. “One thing I’ve learned is when an outside leader comes in, they soon discover it’s not all about profits, it’s about legacy, it’s about intangibles,” he says. “It surprises some people.” Communicated well, he says, it can be a tremendous advantage for a family business. People outside a family business often times think it’s automatically going to be dysfunctional. That’s often not the case. “I think the family dynamics are actually a real sell,” Lyman says. “They’re very attractive. For a large company person coming in, it’s less bureaucratic. It’s quicker decision making.” But while the family dynamics can be a selling point, they can also be a challenge. You might have two or three different generations within the business under one roof, Thorp says. They’re different people driven by different motivators. “Understanding the motivation, the thinking style, the drivers, even things as simple as the way different generations like to give feedback can help you be effective in your leadership of that family business,” she says. “Stay curious and informed on multi-generational implications.”

Transitions also bring challenges

That can be true, as long as the family dynamics don’t turn dysfunctional. Often, panelists say, parents transition ownership to their children but don’t then give them the rope to actually take over. They often haven’t saved enough for their retirements or figured out what they are going to do with their lives. “They think their kids are going to have the money to buy them out or they need to have a salary for the next five

www.upsizemag.com

years, even though they are only coming in on those Tuesday mornings to make those ill-advised phone calls,” Keimig says. While a honed, family business culture can be a benefit, it can also lead to some blind spots. That may be true of nonfamily “sacred cow” employees who underperform at their jobs, but have tenure and relationships in their favor. “A new leader comes in and that’s a surprise,” Lyman says. At times, family businesses also deal with entitlement issues, such as next generation members who believe “my dad is the boss so I can do whatever I want,” Hutter says. “That doesn’t go over very well. So ... boundaries are very important to have in place.” One strategy for dealing with that might involve the elder generation requiring a certain amount of experience outside the family business before a next-generation employee is allowed in the fold. Keimig cited one company that requires a four-year degree, five years of outside experience and an invitation from an uncle to apply for an open position. “It shows the thoughtfulness behind the family’s decision to be a business-first family business” he says. “They weren’t just going to give you a position because your last name was on your jersey.” So, it is possible for family businesses to survive and thrive from one generation to the next. But the path is fraught with some challenges and perils not always seen by non-family businesses that take diligence to overcome. “People don’t realize when they are coming into a family business that the next generation doesn’t automatically happen,” Hutter says. “The transitions to the next generation don’t automatically happen. It takes a lot of work and planning to make it successful.”

MARCH • APRIL 2020 UPSIZE

catching up by Andrew Tellijohn

Ground transportation management software company flying high in airports

hen GateKeeper Systems participated in the initial Upsize Growth Challenge in 2004, the company’s biggest challenge was diversification. The company was developing systems for vehicle access control at airports, such as helping them manage busy taxi queues. And it was growing slowly, but CEO Lynn Richardson was exploring other industries, from medical to manufacturing. In the end, Richardson, who spent nearly 20 years working at the Metropolitan Airports Commission after growing up in an aviation family before starting GateKeeper Systems, stuck with the familiar. The company has, in fact, diversified, but it’s been in a series of airport-specific enhancements that have helped the company double in revenue, add significantly to its collection of partners and weather the ups and downs of more than two decades in business. “It’s hard to break into other industries, even if the product is a good match,” he says. “We looked at a variety of ways to use our technology and what we really found is we were better off sticking with airports and sticking with a limited number of things.” The company has continued plugging along, never trying to grow huge, but always looking for ways 22

UPSIZE MARCH • APRIL 2020

issues that have to be fixed,” Richardson says. “You’d write them down and find a maintenance guy to fix them. We’ve moved that to a technology platform.” Now, if the technician sees a hole in the concrete they touch an iPad screen with GPS coordinates so the maintenance workers know what to fix and where. The software keeps track of the inspections and allows the FAA to do an annual review. “This helps the airport manage that activity,” he says. to capitalize on changing technologies Back in 2004, GateKeeper Systems and how they might affect the airport. was working with a small number of For example, GateKeeper TNC-Ops airports. Now the number exceeds was designed to help track the activities 100 overall, with about three-quarters and fees associated with the explosion involved in App-139. And there is plenty of growth in transportation network of room for growth, especially since the companies at airports. company landed its first international “It’s been a complete upheaval in who opportunity with several airports in does hauling of passengers and how Sweden. they do it, and we were able to offer to Another upside: More than half of airports the ability to track TNC activity the company’s revenue is now recurclose to the way we had been tracking ring, through its ongoing support and with” radio frequency identifications, maintenance activities and subscripRichardson says. tion-based pricing for its new products, Additionally, its App-139 product Richardson says. Initially, only around airfield inspection product allows Gate- 20 percent of GateKeeper Systems’ revKeeper Systems to help airports fulfill enues were recurring – another of his the Federal Aviation Administration’s challenges from the early years. daily airfield inspection requirements. The company’s slow, steady growth “That activity for 75 years had been the last 15 years has worked out fine done by an airport operations or main- for Richardson, who had expressed to tenance technician with a clipboard, Growth Challenge experts in 2004 a paper and pencil going around and iden- frustration about not being able to land tifying lights that aren’t working, holes venture capital funding. In the end, in the concrete, safety and operational growing organically has worked out www.upsizemag.com

Airport focus keeps growth steady at GateKeeper Systems

well for GateKeeper Systems, as it has been able to maintain control of the business. He doesn’t reveal revenues anymore, but did say the company has 15 employees and likely will add more. “We’re in our 22nd year, which in and of itself is a bit of a cause for celebration, weathering a couple of recessions and 9/11, which was almost a death blow to a lot of airport companies like us,” he says. “That was a particularly difficult time.” GateKeeper survived. And it appears the company will transition to the second generation of Richardson leadership. Lynn Richardson still is CEO, but he’s ceded the title of president and most of the day-to-day leadership to

GateKeeper Systems Description: Provider of ground transportation management systems and other software programs for airports CEO: Lynn Richardson President: Brian Richardson Headquarters: Eagan Employees: 15 Website: www.gksys.com

his son, Brian Richardson. They’re working out the final details now. Brian says he doesn’t foresee any major changes. The business is changing a little bit, in that it’s becoming more of a software business than the hardware business it started out as, he says. And there may be a chance to explore some uses of, for example, the existing TNC technologies at sporting events or universities, though like his father, he sounds like he’d be fine either way. “It’s not a major focus to try and expand outside airports, but with the current landscape, you never know,” he says. Meanwhile, Lynn is working three partial days weekly at GateKeeper on various projects and spending the rest of his time learning to play the guitar, volunteering at a Mobility Worldwide organization in the Twin Cities that makes carts for people who don’t have use of their legs, flying radio control airplanes competitively and spending time with five grandchildren. “I got some pretty good advice once when one of my co-workers was retiring at the MAC,” he says. “‘If you really want my advice, retire to something, not from something.’ That has proven very true in my case. After 50 years of working I’m ready to do some other things and I don’t feel the obligation to be here all the time.”

“ We looked at a variety of ways to use our technology and what we really found is we were better off sticking with airports and sticking with a limited number of things.” — Lynn Richardson,

GateKeeper Systems

Contact: Lynn Richardson, CEO, and Brian Richardson, president, GateKeeper Systems: 651.365.0700; ldr@gksys.com; brichardson@gksys.com; www.gksys.com. www.upsizemag.com

MARCH • APRIL 2020 UPSIZE

UPSIZE RESOURCE DIRECTORY accounting Cummings, Keegan & Co., p.l.l.p

BANK Flagship Bank Minnesota

COMMERCIAL PHOTOGRAPHER Tom Dunn Photography

St. Louis Park, MN • Apple Valley, MN 952-345-2500 • www.ckco-cpa.com Kathy J. Klang, CPA/ABV

Andy Schornack, CEO | 952-358-2522 Brian Wagner, President | 952-358-2513 952-944-6050 | flagshipbanks.com

Business owners in all phases – new and emerging, established, and those planning a succession or exit strategy – rely on Cummings, Keegan & Co., P.L.L.P. for a complete range of tax, accounting and auditing, and business management needs. Clients receive a tailored client experience – driven by client preferences, needs, and goals.

Today’s entrepreneur brings creativity, passion, and flexibility to the task of achieving success. Flagship Bank can help because these are precisely the qualities that we bring to each customer of our bank, and their community. With six convenient locations and a staff of experts, we are ready to offer our support. Let’s talk today. Member FDIC. Equal Housing Lender.

308 Prince Street Studio 242 Saint Paul, MN 55101 651-368-2047 www.tomdunnphoto.com Tom Dunn tom@tomdunnphoto.com

ACCOUNTING Eide Bailly LLP

BANK Highland Bank

COMMERCIAL REAL ESTATE The Ackerberg Group

800 Nicollet Mall, Ste. 1300 Minneapolis, MN 55402 612-253-6500 | www.eidebailly.com Contact: Brad Theisen, Partner-in-Charge

Rick Wall, CEO | 952.858.4753 Troy Rosenbrook, President | 952.858.4810 952.858.4888 | www.highland.bank

Lake Calhoun Center, Suite 10 3033 Excelsior Boulevard • Mpls, MN 55416 612/824-2100 • www.ackerberg.com Stuart Ackerberg • stuart@ackerberg.com

We’re a business advisory and accounting firm, helping our clients embrace the opportunities that change and innovation bring to the evolving business landscape and personal financial decisions. We offer our clients inspired ideas and solutions to tackle risk and spur growth.

Founded in 1943, Highland Bank is focused on business lending and is an SBA “Preferred” Lender, making us uniquely qualified to help your business obtain the financing it needs expeditiously. Work directly with the decision-makers who will treat you like a business partner. Member FDIC.

Tom is a commercial photographer who has been helping businesses tell their unique story with photographs for websites and marketing materials since 2006. Tom works closely with his clients to understand their business and branding strategy and creates images that support their mission and success.

The Ackerberg Group creates vibrant neighborhoods in Minneapolis’ urban core by combining astute development, renovation, investment, management and brokerage services with passion for social and ecological sustainability and the arts. Since 1964, Ackerberg has created office, industrial, retail, residential and mixed-use projects that have transformed neighborhoods through the development of long-standing relationships with neighbors and tenants alike.

ADVERTISING • MARKETING Risdall

Bank North American Banking Company

computer consulting Intertech

Offices located in: Roseville, Minneapolis, Woodbury, Hastings Brad Huckle, President and Chief Lending Officer www.nabankco.com

1575 Thomas Center Drive • Eagan, MN 55122 www.intertech.com • Ryan McCabe at rmccabe@intertech.com or 651.288.7001

With over 40 years of success, Risdall is one of the longest-standing marketing agencies in Minnesota. We harness creativity, technology, and data to help brands live fully and effectively online- creating vital digital visibility that drives engagement and business growth. Our experienced team can provide your organization with the strategy required to create integrated programs that drive bottom line success.

Our goal at North American Banking Company is to give business owners all of the banking services they need and make it a great experience. Our bankers are seasoned professionals in all areas of business banking. You will find it’s easy to do business with bankers who are focused on you. We’re not your average bank.

Member FDIC

BANK Crown Bank 6600 France Avenue South, Suite 125 Edina, Minnesota 55435 Ph: (952) 285-5800 www.crown-bank.com Tom Healey, founder Imagine a bank that actually helps you get what you want. Instead of red tape, loan committees and canned lending formulas. Work with a decision-maker who can back you up from start to finish.

Member FDIC

UPSIZE MARCH • APRIL 2020

Intertech consultants are leading software developers who focus on more than simply “heads down” programming. We provide comprehensive software services – consulting, project delivery and mentoring – for all leading technologies, most notably Java, .NET and mobile. Intertech consultants are highly experienced and among the IT industry’s top contributors at conferences, technology journals and user groups.

BUSINESS TRAVEL Professional Travel Service

EXECUTIVE RECRUITING Lyman Executive Search

Andy Chaussee | 763-577-2307 andy@professionaltravelservice.com 3545 Plymouth Blvd Ste 114 Mpls, MN 55447 www.professionaltravelservice.com

Twin Cities 612-812-3263 www.lymanexecutivesearch.com David Lyman

Business travel platforms should be affordable and painfree. Today’s business travel programs are complex and restrictive. With Concur Travel and Deem Travel our clients gain valuable insights into travel spend before it’s just a number on an expense report. Our deep expertise and innovative approach help your company Professional will understand today’s business Tra ve l S e r vice traveler mindset. ADVERTISING SECTION

Lyman Executive Search is a highly focused boutique search firm where getting to know a client’s culture and team is at the heart of a successful search. Focused on C-level and Board searches for mid-size, private equity-owned and family-owned organizations.

www.upsizemag.com

UPSIZE RESOURCE DIRECTORY EXIT STRATEGIES Exit Planning Strategies, LLC

LAW FIRM Lommen Abdo

MANAGEMENT & OPERATIONS BCV Consulting

p. 651 426 0848 — www.exitplanstrategies.com Dyanne Ross-Hanson: President e. drh@exitplanstrategies.com

1000 International Centre, 920 Second Avenue South Minneapolis, MN 55402 612-339-8131 | 800-752-4297 www.lommen.com | Contact: Matt Hartranft

Greater Twin Cities Area Fractional Integrator | COO Barbara Voorhees | 612-247-3189 www.bcv-consulting.com | Barb@bcv-consulting.com

Looking for a business lawyer who speaks plain English and not legalese? Contact Lommen Abdo where we focus on small, medium-sized, family and closely held businesses. Our attorneys operate like your outside general counsel – providing you effective legal advice and sound business strategies. We are upfront about our costs and will work with you to budget legal expenses.

Transform something strong into something superb! Hitting the ceiling is inevitable and timing is everything in business growth. As a Fractional Integrator/COO, orchestrate day-to-day business functions to engage people in problem solving and integrating solutions. Committed to providing the Visionary with trust, clarity and accountability for your team.

FINANCIAL PLANNING Goff Investment Group

LAW FIRM Winthrop & Weinstine, P.A.

MANAGEMENT & OPERATIONS Visionary Integrator Solutions

5201 Eden Avenue, Suite 130 • Edina, MN 55436 952-836-2745 • www.goffinvestmentgroup.com Janel M. Goff, CRPC®

Capella Tower, Suite 3500 225 S. Sixth St. • Minneapolis, MN 55402 Tel: 612.604.6400 • www.winthrop.com

The Goff Investment Group team helps clients invest and manage wealth for retirement and legacy planning. They take pride in building long-term relationships with their clients. For over twenty five years they have specialized in retirement planning for individuals and small businesses. The team has tremendous passion for educating investors about their financial future.

Winthrop & Weinstine has a long tradition of representing entrepreneurs and rapidly growing private and public companies across the Upper Midwest and the United States. Our mission is to help fuel the growth of great companies. We are committed to providing outstanding service, sound advice and strong execution. We offer flexible fee arrangements including fixed fees, “success” fees, hourly fees, blended fee arrangements and performance-based agreements.

Contact: Barbara Voorhees, Mark Francis, Roger Scherping, Suzanne Lyon integrator@integrator-solutions.com www.integrator-solutions.com

insurance O’Rourke Agency, Inc.

LEADERSHIP DEVELOPMENT Prouty Project

41 North 10th Avenue Hopkins, MN 55343 952-932-7219 (phone) 952-932-2820 (fax) www.orourkeagency.com Tim O’Rourke

6385 Old Shady Oak Road, Suite 260 Eden Prairie, MN 55344 952.942.2922 | www.proutyproject.com Kari Baltzer | stretch@proutyproject.com

Exit Planning Strategies, LLC, a firm dedicated to offering business owners objective, fee based, financial consulting in the development of intentional ownership transition plans. We direct an interdisciplinary process to explore planning options, map realistic exit strategies and to develop an Action Checklist, to accomplish an owner’s unique objectives.

Our agency has provided personal and business insurance services for the past 30 years. We proudly represent a number of outstanding insurance carriers, including Chubb, Metropolitan, Progressive, Travelers and Kemper. Call us for all your insurance needs!

mailing services Braemar Mailing Service Inc.

Lisa Holter Ankel, shareholder 612.584.3401 www.avisenlegal.com

7379 Washington Ave S • Edina, MN 55439-2417 tel: 952-767-0300 fax: 952-767-0345 www.braemarmailing.com cu@braemarmailing.com

www.upsizemag.com

MARKETING & PRINT SOLUTIONS Allegra — Marketing • Print •Mail STRATEGIC Greater Twin Cities Area SOLUTIONS FOR&YOUR Your local marketing print consultant SUCCESS Arden Hills – 651.484.5000 Whether you need help developing a new marketing campaign, ideas to improve the Blaine –of763.780.0792 effectiveness an existing project or you just want to save time and money, we can help. Allegra is the Eagan – designed 651.645.1224 single source to assist organizations just like yours with: Eden Prairie – 952.835.2720 • Printing Services Minneapolis/Downtown – 612.332.8669 • Signs, Banners, and Posters • Complete Mailing Services St. Paul/Downtown – 651.222.8004 Design Center • Creative • Full Bindery Services Full service marketing & print communication expert. • Web-to-Print Solutions and Trade Show Graphics • Display A one-stop shop, to help you with a high quality project, • Promotional Products more... • Much, much,on delivered time & on budget.

Our leadership development engagements and cohort-based leadership programs – Prouty L3 and Prouty i•will – link behavior to team performance in your workplace through the lenses of Leading Self, Leading Others and Leading the Business. We focus on STRETCHing participants to lead business within internal and international divisions. Give us a call or stop by.

LAW FIRM Avisen Legal, PA

We are a boutique business law firm, with 10 highly seasoned and experienced lawyers, who practice with common sense, collaboration and commitment. At Avisen, we bring our deep knowledge of business to the table to assist you with just about any aspect relating to business including the laws that govern how to start, buy, manage or sell any type of business.

Don’t be a Trapped Visionary! ™ Work on your big ideas. Develop your big relationships. Get out from under the day-to-day. Leverage part-time leadership and enjoy day-to-day order. Your team can be focused, aligned and accountable. We provide Fractional Integrator/COO/GM services for EOS® companies. We help Visionaries get un-trapped.

FOR QUALITY AND SERVICE YOU CAN TRUST, CONTACT YOUR LOCAL ALLEGRA TODAY!

Since 1985 business mailers who value personal service and meticulous attention to detail have found one company rich in both. We are postal experts and list brokers who offer a full service lettershop and data management services. Your mailing, unique or ordinary, in large quantities or small, receives Braemar-style attention to detail. We are proud of the work we do and the customer service we provide. ADVERTISING SECTION

MERGERS & ACQUISITIONS Lingate Financial Group

Arden Hills Blaine Eagan

MARKETING

651.484.5000 763.780.0792 651.645.1224

Eden Prairie 952.835.2720 Minneapolis/Downtown 612.332.8669 St. Paul/Downtown 651.222.8004

7575 Golden Valley Road, Suite 100 Minneapolis, MN 55427 763-546-8201 www.Lingate.com Greg Loeschke — Managing Principal PRINT

MAIL

DESIGN

WEB

SIGNS

APPAREL

PROMOTIONAL

MOBILE

Founded in 1945, Lingate Financial Group is a leading provider of lower middle market merger & acquisition advisory services, representing privately held businesses of all types with revenues of $5 – 50 million. Lingate helps business owners with market-based valuations, business sales, mergers, acquisitions, recapitalizations, and internal transitions among family members, partners and management. We get deals done. MARCH • APRIL 2020 UPSIZE

UPSIZE RESOURCE DIRECTORY MERGERS & ACQUISITIONS SealedBid Marketing, Inc.

SBA LENDER Highland Bank

SBA LENDER 21st Century Bank

5151 Edina Industrial Blvd., Suite 140 Minneapolis, MN 55439 (952) 893-0232 • www.sealedbid.com Gerald R. Clark — Founding/Managing Officer

Troy Rosenbrook, President | 952.858.4810 Kim Storey, SBA Lending Manager | 952.858.4590 952.858.4888 | www.highland.bank

17 Washington Ave N. Suite 200 Minneapolis, MN 55401 612-372-2178 www.21stcb.com

Founded in 1943, Highland Bank is focused on small business lending and is an SBA “Preferred” Lender, making us uniquely qualified to help your business obtain the financing it needs expeditiously. Work directly with the decision-makers who will treat you like a business partner. Member FDIC.

At 21st Century Bank, we know what it takes for businesses to survive, grow, and prosper in today’s market. For over 100 years, we have been your community partner. A family-owned bank, with expertise in all SBA and conventional lending programs covering all stages of your business. We tailor solutions and respond to your unique business and banking needs.

SealedBid Marketing, Inc. is a Minneapolis, Minnesota based Mergers & Acquisitions firm focused on lower mid-market companies with revenues ranging from $2 million to over $50 million. Founded in 1993, SealedBid represents clients in the sale, merger, purchase and valuation of closely held private businesses across the state of Minnesota, the Midwest region and the United States.

PEER GROUP Creative Business Coaching, LLC

SBA LENDER Sunrise Banks

STAFFING Scouts Talent

Ted Williams /C: 612-413-2735 O: 952-927-8796 twilliams@creativebusinesscoaching.org www.creativebusinesscoaching.org

(651) 265-5600 | SunriseBanks.com Chris Albrecht, Director of SBA Loans

1600 Utica Ave S, #900 Minneapolis, MN 55416 (952) 484-6947, www.scoutstalent.com Gwen Martin, Mark Flaherty, Susan Haugen, Partners

Access to a close group of peers is an incredibly valuable resource for any Business owner/leader, especially when dealing with issues where there are no clear solutions. Sharing ideas with others on similar tough issues accelerates your thinking toward new and innovative ideas. It’s like multiplying your options tenfold, which is so valuable you can’t put a price tag on it. If interested in exploring further...let us know.

EXIT PLANNING: Directing the Process! Have you determined: When you want to leave your business? To whom you want to transfer your business? What your business is worth? How “Inside Buyers” are going to finance a purchase? Your “back up” plan should the unexpected happen?

e. drh@exitplanstrategies.com w. www.exitplanstrategies.com p. 651 426 0848

UPSIZE MARCH • APRIL 2020

Sunrise is a preferred SBA lender in Minnesota focused on working with our clients as partners, not transactions. Give us a call to discuss how we can help make your business goals a reality.

Member FDIC

Scouts is an accounting and finance talent firm in Minneapolis - St. Paul. Financial hiring managers count on Scouts to provide consultants when they need specific expertise to fill interim roles or complete projects. Scouts represents highly-marketable financial consultants, from senior accountants/analysts to CFO’s, who depend on Scouts to find them projects that best leverage their talents and interests.

Offering IT development work for less. For a limited time Nova Horizons is offering a group of no more than four small businesses an IT development collaboration opportunity for on-going development work. This is an opportunity for a few small businesses to get the expert IT development resources they need to navigate the digital age; getting more of their development projects completed on time and for far less money. “Small businesses with big development projects need outside development expertise at below market rates.”

jonny@novahorizons.io www.novahorizons.io 952.888.7541

ADVERTISING SECTION

John Thwing

"The SBA Guy"

With over 30 years in the industry, John Thwing, SVP Head of Lending, locally known as the “The SBA Guy” is a recognized Twin Cities lender that entrepreneurs know and trust.

Specializing In

Owner-occupied Commercial Real Estate Business Acquisition Expansion Partner Buyout Franchise Construction Financing 612-505-9751 sbaguy@21stcb.com 17 Washington Ave N Suite 200 Minneapolis, MN 55401

www.upsizemag.com

UPSIZE RESOURCE DIRECTORY STRATEGIC PLANNING Prouty Project

TRANSITION PLANNING KeyeStrategies

WEALTH MANAGEMENT JNBA Financial Advisors

6385 Old Shady Oak Road, Suite 260 Eden Prairie, MN 55344 952.942.2922 | www.proutyproject.com Kari Baltzer | stretch@proutyproject.com

Minneapolis, MN Keyestrategies.com 763-350-5563 Julie Keyes, Founder/CEPA

8500 Normandale Lake Blvd. Suite 450 Minneapolis, MN 55437 952.844.0995 www.jnba.com Cärin Viertel, Director of Client Services

We start with a blank sheet of paper to elevate your clarity on vision and purpose, create alignment in your strategy to achieve your vision and gain commitment to execute. What are your “market, product/service, people, and financial” strategies over the next 1-5 years? Can you articulate your strategic plan on one page? Join us in our Creative Think Tank to stretch your thinking and ignite your creativity.

“KeyeStrategies LLC advises business owners in Transition and Exit Planning. Julie Keyes is both a Certified Exit Planning Adviser (CEPA) and Value Growth Adviser. She is also a faculty member for the Exit Planning Institute’s Global organization and President of its local Chapter.”

As a pioneer of an independent approach to wealth management that allows advisors to sit on the same side of the table as clients without being influenced by commissions and other conflicts of interest, JNBA has been providing advice driven by advocacy™ for more than 40 years.

SUCCESSION PLANNING Lommen Abdo

venture capital Brimacomb + Associates

WEB DESIGN/DEVELOPMENT ThermoDynamo

1000 International Centre, 920 Second Avenue South Minneapolis, MN 55402 612-339-8131 | 800-752-4297 www.lommen.com | Contact: Cameron Kelly

TCF Tower, Suite #1600, 121 South Eighth St., Minneapolis, MN 55402 612-803-3169 * www.brimacomb.com Rick Brimacomb, rick@brimacomb.com Chief Strategy and Relationship Officer

601 Carlson Parkway #1050, Mpls, MN 55305 612-250-2828 | www.ThermoDynamo.com Alex Levin | alex@thermodynamo.com

You owe it to yourself, your family, your co–owners and your employees to have a business succession plan in place in the event of incapacity or death. Every business and every family is unique and your succession plan needs to fit your goals for your business and your family. Contact us to design a plan that meets your goals.

Results-oriented advisory firm with unparalleled access to executive suites and financing sources. Emerging companies and established professional services firms rely on our depth of knowledge and deep-network connections to grow client lists, assemble project resources and secure new sources of funding.

ThermoDynamo is a Web Design + Development + SEO + Marketing company. Our business first approach creates highly visible, compelling digital content that captivates audiences and produces measurable outcomes for our clients. We also specialize in website re-designs, website maintenance and repair. Excellent customer service, fast turnaround times and great outcomes are our modus operandi.

GROW OR DIE Move your business forward with investment capital generation, deep-level network connections and strategic refinement consultation from Brimacomb and Associates. We partner with emerging companies and professional services firms to offer unparalleled access to professional resources, executive suites and financing sources.

www.brimacomb.com 612.803.3169 • rick@brimacomb.com www.upsizemag.com

ADVERTISING SECTION

MARCH • APRIL 2020 UPSIZE

BACK PAGE Keyes contributing exit planning book targeting women

omen business owners looking for advice specific to their own challenges with business transition will soon have a resource. Julie Keyes, founder of KeyeStrategies, has written “Poised for Exit: A Woman Entrepreneur’s Guide to Business Transition,” which shares advice from business owners she has advised and from other transition experts. She also shares details around her own business sale. The book is scheduled to be released soon. Keyes joined Upsize Managing Editor Andrew Tellijohn to talk about the book. Tellijohn: What will readers get from this book? Keyes: They’re going to get a lot. The content is really rich. It’s formatted with stories of clients I’ve worked with over the years who have exited from their businesses, women entrepreneurs and married couples when there was a woman involved. I focused on women because there

Julie Keyes 28

UPSIZE MARCH • APRIL 2020

isn’t anything out there on women and there are 17 million women entrepreneurs in the country. Each of the eight chapters has a checklist that addresses issues having to do with exit and transition planning relating to the stories I tell in that chapter. There are seven or eight questions they can utilize to think about what they need to do to get their business ready for transition. Several local and national firms have also contributed tools in the appendix of the book on subjects like M&A, estate planning, family business. The tools are basically for the business owner to understand they can’t do it alone, it’s not a do-it-yourself project. It emphasizes the importance of having a good advisory team, a collaborative team to work with in an exit planning situation. Tellijohn: How is selling a business different for a woman than a man? Keyes: Logistically speaking the nuts and bolts are the same. If a man read the book he’d get as much out of it as a woman. I wrote it focused on women because women tend to have a higher emotional stake around their companies and employees than men do, so they may resist exiting their business because of that. A lot of times their employees, their team become like family to them. They are the nurturer many times. That’s kind of our nature. The book is meant to address those kinds of feelings as well, and to acknowledge they are there, accept that they are not going to go away and to give themselves permission to move on with their lives. Another nuance is that women business owners experience over men is women often struggle to figure out

Poised for

EXIT

A Woman Entrepreneur’s Guide to Business Transition

Julie Keyes who they really are outside of the fact that they run a household, they raise kids, they are a wife and they also own and run a business. I’ve lived all that. If that goes away, like the kids move out or the business gets sold, the woman has a big job to do figuring out who am I without all of these things in my life. The time to have this conversation isn’t after it’s over, it’s before. Tellijohn: Where can people find the book? Keyes: It will be on Amazon and at Barnes and Noble or they can pre-order the book by contacting me. Contact: Julie Keyes is the founder and owner of KeyeStrategies LLC and president of the Exit Planning Institute of the Twin Cities Metro Area Chapter: 763.350.5563; julie@keyestrategies.com; www.keyestrategies.com.

www.upsizemag.com

Shaping the future Lathrop GPMâ&#x20AC;&#x2122;s Entrepreneurial Services team speaks your language. We help growing enterprises across multiple industries from inception to successful exit. We leverage our legal and business acumen, along with our networks, to provide counsel and strategic advice to help you achieve your goals. We look forward to helping you shape the future of your company.

Working together, we build exciting futures.

Dan Tenenbaum Partner, Entrepreneurial Services Chair 612.632.3050 dan.tenenbaum@lathropgpm.com lathropgpm.com This is an advertisement. The choice of a lawyer is an important decision and should not be made based solely upon advertisements. Neither the highest state courts nor state bar associations review, recognize, or approve certifying organizations, certifications of specialties or specialist designations in the practice of law. The certificate, award or recognition is not a requirement to practice law. Lathrop GPM LLP, 80 South 8th Street, 500 IDS Center, Minneapolis, MN 55402. For more information, contact Michael Sullivan Jr. at 612.632.3000.

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