EYES on the PRIZE
StemoniX still reaping benefits from 2016 Minnesota Cup victory
Ping Yeh,
Co-founder, CEO at StemoniX
legal
SOLUTIONS
Effective Compliance in Small-to-Midsize Businesses by Bryan Feldhaus
S
mall-to-midsize businesses (SMBs) are not immune to compliance risks. To manage those risks, businesses must develop compliance programs that are specific and effective. That can be done by analyzing the five Ws (and one H). What:
A business must first address the purpose of a compliance program. This includes the business history, its assets, and the compliance risks affecting the business. Why: Utilizing resources for compliance instead of sales and marketing is frequently a concern. But this is the wrong focus. Compliance programs can strengthen “Compliance programs can culture, reduce risk, and strengthen culture, reduce risk, and increase market share. increase market share.” Who: A compliance program for a SMB must have employee — Bryan Feldhaus buy-in to be effective. Business leadership must provide the proper tone and reiterate the value provided by compliance programming. When: There is no time like the present, particularly when a compliance program can provide immediate value to a company’s culture and bottom-line. Where: Compliance risk is determined by location, industry, customers and vendors. It is helpful to partner with counsel to address the risks associated with a geographic profile. How: An effective compliance program should include a risk assessment, formal policies, employee training, and regular auditing and enforcement. These elements can often be integrated into existing structures with minimal costs.
BRYAN FELDHAUS is a shareholder at Lommen Abdo. He represents clients in commercial litigation, professional liability litigation, and business litigation. Mr. Feldhaus also recently obtained his LL.M. degree in Corporate Compliance and Organizational Ethics from the University of St. Thomas School of Law. He assists clients in compliance, regulatory and ethics matters, which includes litigating compliance disputes, representing clients in data privacy matters, and advising clients about mitigating compliance and ethical risks.
LOMMEN ABDO tackles the challenges entrepreneurs, closely held and family businesses face today. If compliance and cyber security issues keep you awake at night, Lommen Abdo can help. We combine legal expertise, practical business sense and a client-centric focus. One client states: “Lommen Abdo provides valuable services at cost-effective rates to their clients. Their knowledge and experience is outstanding and only eclipsed by their compassion and desire to exceed the expectations of their clients.” Bryan Feldhaus Attorney/Shareholder bryan@lommen.com 612-336-4389 Lommen Abdo, P.A. 1000 International Centre 920 Second Avenue South Minneapolis, MN 55402 www.lommen.com
Looking forward
call us optimists, but we look forward to just about everything — especially getting to know you. let’s talk about taking your business to the next level. John WEllE Senior Vice President
chad BolEn Relationship Officer
crown-bank.com
thE placE to do BusinEss ™ MeMber FDIC
Edina . 6600 FrancE . 952-285-5800
|
equal HousIng lenDer
MinnEapolis . 601 MarquEttE . 612-746-5050
CONTENTS November • December 2019 • Vol. 18 No. 6 • www.upsizemag.com
PAGE 18
Cover story
Benefiting from contests: Minnesota Cup and MEDA Million Dollar Challenge winners get more than just prize money. They hone skills, build relationships and realize countless benefits that stick with them far beyond when the spotlight dims. BY ANDREW TELLIJOHN Cover photograph by Tom Dunn
PAGE 4
Bb BUSINESS BUILDERS
PAGE 26
Editor Beth Ewen interviews restaurateur Clayton Gardner about taking on a slower pace and finding time to coach basketball
PAGE 6
NSN-BabySoft LLC and Wilcraft return to share the progress they’ve made in six weeks and receive a last round of advice from expert panelists
PAGE 4
by Kristy Laue, Lawrence & Schiller
Who’s who at Upsize magazine, and how to reach us.
PAGE 10
CATCHING UP:
Make sure non-compete agreements are reasonable and enforceable by Dawn Van Tassel, Van Tassel Law Firm
Maia Haag, co-founder of I See Me!, talks about selling the business, creating new product lines and lessons she’s learned in the last eight years
PAGE 14
PAGE 36
Consider implementing a formal business travel program
St. Paul-based Otto Bremer Trust has invested significantly in organizations that support start-ups and small business expansion
From the editor:
Staff list:
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
ADVERTISING Eight reasons your advertising isn’t working and how to fix them
GROWTH CHALLENGE:
PAGE 30
LAW
MANAGEMENT by Andy Chaussee, Professional Travel Service
PAGE 22
WORKSHOP: A panel of experts shares thoughts on preparing yourself and your business for a transition
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
tax • audit • accounting business consulting (952) 345-2500 www.ckco-cpa.com
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
HOW TO REACH US To subscribe email Georgene Bergstrom, gbergstrom@upsizemag.com or visit www.upsizemag.com With story ideas email Andrew Tellijohn, atellijohn@upsizemag.com To advertise email Wes Bergstrom, wbergstrom@upsizemag.com To order reprints email Georgene Bergstrom, gbergstrom@upsizemag.com To order extra or back issues email Georgene Bergstrom, gbergstrom@upsizemag.com To suggest Web resource links, links@upsizemag.com
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Clayton Gardner was living the glittery life as a business partner with David Koch at Seven steakhouse and Escape nightclub in Minneapolis, 30,000-square-foot seeand-be-seen hot spots that were once as riddled with controversy as patronized by celebrities. “When it starts getting bad and you’re not seeing eye to eye, it was time to move on,” he says about the former relationship, which included a legal feud alleging financial mismanagement and personal shenanigans on the job, and ended in a sale in 2016. “It was a hard breakup with Seven,” because of all he’d been through with Koch, whom Gardner calls a “very, very smart guy.” “I learned a lot of lessons from David, the majority was what not to do,” Gardner concedes. On a chilly day in October, he was tending to a visitor at the bar of his one-yearold restaurant, Caribbean Smokehouse, in Stillwater, a low-key, family-owned place in which he’s majority partner. His brother-in-law, Adam Randall, is the chef and a minority partner with two other family friends. This time he vowed to do it completely differently: simply, with sane hours and time for his family and other pursuits like coaching girls basketball. There’s still plenty of stress, like how will business be now that the weather’s turning cold again, but he’s at peace with his choice. His chief lesson: “I try to stay in my boundaries, knowing when you step into lanes” that belong to someone else, “there’s confusion,” he said. “I also learned what hospitality really means” from Chef Randall. “He is multi-talented. He can cook anything.” Randall and Gardner’s sister, Barbara, started dating when they all were teenagers. “He used to be our DJ” at the Roller Gardens in St. Louis Park, said Gardner. He is the youngest of 12 siblings, his sister the second-youngest. “When they started dating, my mother and father wanted to meet the people we were around,” he said, and his mother was a great cook. “Adam would come over and we’d say, ‘Let’s play ditch or football.’ He’d say, I’m good.’ He wanted to be with my mom
UPSIZE NOVEMBER • DECEMBER 2019
and dad. They were always shopping and cooking.” Gardner also has time to coach basketball again, the girls’ traveling team at Bloomington Kennedy High School. “Basketball is kind of like my sanctuary,” he said. “You have these pressures, you walk in the gym, start working with kids who need that adult. You forget about everything else for 90 minutes.” Gardner has four kids who are grown, including a former standout basketball player at De La Salle High School. His youngest is in eighth grade. “She’s going to be something special,” he said. Does he have lots of tales from the days at Seven and Escape? “Oh my god,” is all he’ll say. “In that atmosphere it was always early mornings and late nights. We wanted a family restaurant,” he said, and the rewards are many. “To have my family life at home, I don’t think there’s words to describe,” Gardner says. Cheers to him, and anyone else who finds a way to stay in their lane, operate a business and still have time and space for pursuits that become their sanctuary. This is one coach who’s winning at the game of life. Beth Ewen Editor and co-founder Upsize Minnesota bewen@upsizemag.com
www.upsizemag.com
PHOTO BY JONATHAN HANKIN
game of life
advertising
BUSINESS BUILDERS
Eight reasons your advertising isn’t working by Kristy Laue
TIPS 1. Tell a story that gives your brand a personality and point of view. Think about the mindset of your consumer and the problem they’re trying to solve, then speak to that in your marketing. 2. Hold your ad up for three seconds. If you can’t glean one central takeaway, neither can the consumer, and they will just move on. 3. Your advertising should tell a visual story in addition to a written one. Few things can improve memorability, evoke instant emotion and improve engagement better than a stunning image. 4. Consumers are bombarded on social media with ads and have to discern the credible ones from the shady ones. Those jampacked with exclamation points, ALL CAPS or unrealistic claims will be viewed with skepticism. 5. Don’t necessarily make “buy now” the first call to action. Nurture a lead by asking them to learn more by signing up for email updates or a free trial. Close the sale when they are ready to commit.
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SO, YOU LAUNCHED an advertising campaign. And guess what ... it’s not working. Two of the most common questions new clients ask us are why their past advertising efforts haven’t worked and how can those results be turned around. Crafting an effective marketing strategy is a layered process. Many variables can influence the success of your campaign, from your audience selection to the product you’re offering. But for a quick checklist of the top things you can do right now, here are eight reasons why your advertising might not be working: 1. You need to rethink your media strategy. You can have the most compelling product in the world, but if the right people aren’t seeing it, it doesn’t matter. If your advertising efforts aren’t performing, take another look at your overall media approach. How to fix it: Ask yourself: are you targeting the right audience — really? Are you on the right media channels? Is your spend competitive enough? Do you have analytics to see which pieces are performing? Asking these questions and tweaking your media strategy can make a big difference in a short time. We’ve seen transactions increase 400% and revenue increase almost 200% after just one month of optimizing a client’s digital placement. 2. Your ad isn’t making anyone feel anything. As logical as people may be, we’re emotional beings first. According to a NeuroImage study, scans show that
UPSIZE NOVEMBER • DECEMBER 2019
storytelling engages our brains more than facts. Is your ad funny, surprising, sad, intriguing, silly, bold — anything? If you’re not saying something, people won’t do anything. How to fix it: Tell a story that gives your brand a personality and point of view. Think about the mindset of your consumer and the problem they’re trying to solve, then speak to that in your marketing. Make it about what the customer is feeling — not about your product. 3. You’re trying to do too much with one ad. The average person has an attention span of eight seconds. So, when you cram every proof point and differentiator into one ad, it creates clutter that viewers can’t process. How to fix it: The best-performing ads are simple. Try holding your ad up for three seconds. If you can’t glean one central takeaway in that time, neither can the consumer. And guess what. They’re moving on. Say it clearly, say it simply and break up larger messages into smaller bitesized pieces across several tactics or executions. Lead with emotion, follow up with differentiators, and close the sale with a call to action. 4. Your ads don’t have a visual. Humans are innately drawn to imagery. In fact, Massachusetts Institute of Technology neuroscientists found that 90% of information absorbed by the human brain is visual. So, it makes sense your ad should have one. How to fix it: Your advertising should tell a visual story in addition to a written one. Few things can improve memorability, evoke instant emotion and improve engagement
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Congratulations to Richard S. Brown
Barron’s Top 1,200 Financial Advisors 10 Consecutive Years
An advocacy-first philosophy: that’s how JNBA Financial Advisors has operated since our founding days 40 years ago. During that time we have been recognized for our client and community work, including Barron’s ranking CEO Richard S. Brown and JNBA as one of the top independent financial advisors in country. But what’s most important to us is that since we began tracking in 2001, JNBA has maintained a client retention rate of more than 97 percent.
Barron’s Top 100 Independent Advisors 5 Consecutive Years
To learn more about how advice driven by advocacy™ could help you, begin a conversation with our team by calling 952.844.0995 or visiting JNBA.com.
MINNEAPOLIS: 952.844.0995 | DULUTH: 218.249.0044 | JNBA.COM *As seen in the 07/20/07, 07/11/08, 2/22/10, 2/21/11, 2/20/12, 2/18/13, 2/24/14, 2/23/15, 8/24/15, 3/7/16, 8/29/16, 3/6/17, 9/18/17, 3/12/18, 9/17/18, 3/11/19, & 9/16/19 issues of Barron‘s magazine. Barron‘s is a trademark of Dow Jones & Company, Inc. All rights reserved. Limitations: Neither rankings and/or recognition by unaffiliated rating services, publications, or other organizations, nor the achievement of any designation or certification, should be construed by a client or prospective client as a guarantee that he/she will experience a certain level of results if JNBA Financial Advisors, Inc. is engaged, or continues to be engaged, to provide investment advisory services Rankings published by magazines, and others, generally base their selections exclusively on information prepared and/or submitted by the recognized adviser. Rankings are generally limited to participating advisers. No ranking or recognition should be construed as a current or past endorsement of JNBA Financial Advisors, Inc. by any of its clients. ANY QUESTIONS: JNBA Financial Advisors, Inc.’s Chief Compliance Officer remains available to address any questions regarding rankings and/or recognitions, including providing the criteria used for any reflected ranking. For complete disclosure information, please visit https://jnba.com/disclosure. 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.
better than a stunning image. 5. Your approach feels spammy. There — I said it. Especially on social media, consumers are bombarded with ads and have to discern the credible ones from the shady ones. If an ad is too jam-packed with exclamation points, ALL CAPS or unrealistic claims, consumers will view it with skepticism. How to fix it: It’s good to include a strong call to action, urgency and compelling language in your ads. But it should be balanced with maintaining your brand’s credibility. Make your copy conversational but maintain professional grammar. And always justify your claims with facts. 6. Your ads are full of marketing speak. One of the first rules of advertising is to talk like your audience does. That means no jargon, advertisingspeak or ten-dollar words where a simple one will do. How to fix it: Talk to your audience like you would in a face-to-face conversation. After all, you’re just one person talking to another about solving a problem — not shoving a list of bullet points at them. 7. Your product isn’t living up to your advertising. You can talk the talk, but your product or service needs to walk the walk. A study from Dimensional Research found 95% of people will share a bad customer experience, resulting in lost sales and a damaged reputation. Similarly, you may have a good product, but if your brand doesn’t align with what consumers think of you, that’s another disconnect where sales could suffer. How to fix it: Go talk to your
customers. A little research can go a long way to make sure your brand experience is in check. Even a short survey or a few casual intercepts can pinpoint big opportunity areas. 8. Your ads don’t have the right call to action. You know what you want the consumer to do, so help them do it. Just make sure they’re at the right stage in their decision-making process. If a person is seeing your ad for the first time, “buy now” might be too large of an ask. How to fix it: Include a call to action that aligns with the consumer’s path to purchase. Nurture a lead through the funnel with other CTAs, asking them to learn more, sign up for email updates, get a free sample or sign up for a free trial. Then close the sale when they’re ready to commit. As John Wanamaker said in the early 1900s, “Half the money I spend on advertising is wasted; the trouble is I don’t know which half.” For many advertisers, it can still feel that way. But with advancements in audience data, creative technology, media placement and reporting, you can be smarter about optimizing those once-wasted efforts.
“ Are you targeting the right audience — really? Are you on the right media channels? Is your spend competitive enough? Do you have analytics to see which pieces are performing? Asking these questions and tweaking your media strategy can make a big difference in a short time.” Kristy Laue Lawrence & Schiller
Kristy Laue is vice president of creative for Lawrence & Schiller, where she splits her time between offices in Edina and Sioux Falls, SD: 605.338.8000; kristy.laue@l-s.com; www.l-s.com. 8
UPSIZE NOVEMBER • DECEMBER 2019
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Choosing a new health plan? Consider Blue Cross and Blue Shield of Minnesota for options that give you quality care close to home. Open enrollment for individual and family plans begins November 1, 2019. Call toll free 833-917-0347 (TTY 711) or visit bluecrossmn.com/2020blueplans www.upsizemag.com
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law
BUSINESS BUILDERS
Crafting non-compete agreements that are fair, beneficial and enforceable by Dawn Van Tassel
TIPS 1. Non-compete agreements must be reasonable in scope, protect a legitimate business interest and be supported by consideration. 2. Nationwide and global restrictions are almost universally held invalid. 3. Courts will consistently enforce restrictive covenants that seek to protect a business’s customer goodwill and its confidential information. 4. Attempts by businesses to overreach when writing non-compete agreements typically are met with disfavor. 5. In Minnesota, employment that is expressly conditioned upon signing a restrictive covenant is sufficient consideration, though businesses must be extremely careful on how this is done.
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Employers want to ensure
“Are these things even enforceable?” As a lawyer who counsels businesses and employers on a daily basis, this is probably the most frequent question I am asked about restrictive covenants. Not to sound like a lawyer, but the answer is: “It depends.” In Minnesota, courts will enforce a non-compete agreement if it meets three basic criteria: (1) It must be reasonable in scope; (2) It must protect a legitimate business interest; and (3) It must be supported by consideration – a legal term that means something of value was given in exchange.
The entire state of Minnesota might be a reasonable scope for a salesperson who covered a state-wide territory, but not for one who only worked the seven-county metro area. Nationwide and global restrictions are almost universally held invalid. But some positions do not lend themselves to geographic restrictions. Courts routinely find using a customer-based restriction to be reasonable. If the theory is that the employer has an interest in customer goodwill, then keeping a former employee from contacting them for a period of time helps protect that interest. It doesn’t matter if the customer is located in Duluth or Dublin or Dubai, so long as the company has an interest in that customer relationship. Temporal restrictions also must be narrowly drawn. In the employment context, courts routinely uphold restrictions of up to a year. Depending on the other circumstances of the employment and how narrowly drawn the geographic restriction is, a court will sometimes enforce a twoyear covenant.
Reasonable scope What is reasonable? Courts use a number of factors in this determination, and each case is different. However, narrowly tailored geographic and temporal restrictions are often enforced. In general, defining a geographic restriction to the actual area the employee was working, or where the clients s/he served are located, will usually be upheld as a reasonable geographic restriction. A restriction of 25 miles might be considered reasonable for a chiropractor to open a competing clinic, but not for a hairdresser to open a competing salon.
What constitutes a legitimate business interest? Courts will consistently enforce restrictive covenants that seek to protect a business’s customer goodwill and its confidential information. Confidential information need not be so confidential as to be considered a trade secret — which has its own statutory protections regardless of the existence of a non-compete agreement. Customer lists, pricing information, research and development and other items that the company truly treats as confidential can usually be protected. Industry-specific circumstances
that their customer goodwill and valuable confidential information don’t walk out the door when an employee resigns. One method of protecting — or attempting to protect — a business’s interests is use of non-compete agreements or other similar types of agreements, which are collectively known in the legal field as restrictive covenants.
UPSIZE NOVEMBER • DECEMBER 2019
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You have big dreams, We have solutions. For over 100 years, we have been your locally owned and operated community bank, consistently ranked as a Top 10 SBA Preferred Lender in MN with its SBA 7(a) & 504 loan programs. "We pride ourselves on relationships we've cultivated with existing customers," says Bank President Jon Dolphin. "We've added team members, dedicated to business banking, nonprofits, residential development, and home-building. And added additional SBA expertise to our talented lending team, including John Thwing, known in the Twin Cities as, "The SBA Guy." 'We are poised to do everything we can to support our local communities by continuing to provide our customers with big bank products and sophistication with small bank speed and common sense."
might also factor into an agreement’s enforceability. Entry-level employees, those without access to research and development information, and those who aren’t tasked with cultivating client relationships will be less likely to be bound. A court is not going to put a line cook out of work for a year by saying she cannot walk across the street and work for another restaurant. Attempts by businesses to overreach in this regard are met with disfavor. Merely trying to prevent your employees from defecting to your competition is also not a protectable interest. Considering consideration The final (but often overlooked) element to enforcing a restrictive covenant is consideration. Something of value must be given in exchange for the employee’s agreement to be bound. In Minnesota, employment that is expressly conditioned upon signing a restrictive covenant is sufficient consideration. However, businesses must be extremely careful on how this is done. If an employee accepts employment, begins working, then is presented with a noncompete agreement, that is not sufficient consideration under the law. It’s best to consult with your trusted human resources or legal adviser if you have questions on how to accomplish this the correct way. But what if your key employees never had a non-compete agreement, and now you wish to put one in place? All is not lost. You can offer a financial or other work-related incentive (raises, promotions, stock options, additional fringe benefits) as consideration for an agreement.
for higher-level positions if they are bound by a previous employer’s restrictive covenant? You should. Onboarding a new employee, only to be slapped with a cease-and-desist letter a month later, is a costly and painful disruption to your business. If the former employer sues, the company can be on the hook for damages and attorney fees if it is shown that it knowingly hired someone in violation of a restrictive covenant. Selling your business? The rules change In the context of a sale of a business, courts are far more likely to enforce broader restrictions on competition. From a business perspective, it makes sense. If you pay me $1 million for my business, but I can walk across the street, open a competing shop, and eat your lunch, where is the value? Longer — often much longer — temporal restrictions will be considered enforceable. Five- and 10-year restrictions, depending upon the industry, are not uncommon. Courts will also be more generous with geographic restrictions, especially in the case of brick-and-mortar businesses. Just because it’s legal … Sometimes the Venn diagram between what is legally acceptable and what makes good business sense overlaps, and sometimes it doesn’t. Requiring a reasonable non-compete from your key employees can be an excellent business decision; overreaching or aggressive enforcement can affect employee morale and the culture of your business. Tread lightly.
“ Requiring a reasonable non-compete from your key employees can be an excellent business decision; overreaching or aggressive enforcement can affect employee morale and the culture of your business. Tread lightly.” Dawn Van Tassel Van Tassel Law Firm
How non-competes can affect your hiring practices Does your company ask candidates Dawn Van Tassel is founder of Van Tassel Law Firm: 612.751.7933; dawn@ dawnvantassel.com; www.dawnvantassel.com.
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UPSIZE NOVEMBER • DECEMBER 2019
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Getting it done right or ready to fight
WE MEAN BUSINESS Whether you need to make sure it’s done right or you are ready to take on a fight, we’ve got you covered! Attorney Matt Hartranft can help from either the buy or sell side of an M&A transaction and can advise on general corporate matters such as formation, real estate matters, S-corp issues and more. Attorney Josh Feneis is a strong advocate when you or your business face a contract claim, a shareholder dispute, a breach of a non-compete or any other challenges that arise in the operation of your business. If you are looking for a law firm to partner with you on your corporate matters or your litigation disputes, talk with us. We mean business!
Kudos to our client The Wilcraft (amphibious ice fishing vehicles) for being chosen to participate in the 2019 Upsize Growth Challenge!
Matthew R. Hartranft
Joshua M. Feneis
612.336.9317
612.336.9353
matt@lommen.com
jfeneis@lommen.com
800.752.4297 / lommen.com
Thursday, January 23rd
A Luncheon Workshop at the Minneapolis Club
FAMILY BUSINESS GUIDE 50% of American businesses are family-owned. This workshop will address their unique set of challenges. Topics shall include separating family and work, employment policies, fair compensation, fitting jobs to skills, succession planning and much more. The workshop will address a wide range of family-business concerns, and introduce experts who can serve as trusted resources. 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 bit.ly/2rajqJX 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
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NOVEMBER • DECEMBER 2019 UPSIZE
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management
BUSINESS BUILDERS
Business traveler mindset — have you considered a corporate travel program? by Andy Chaussee
TIPS 1. Think of buying business travel like you would an insurance plan or accounting software. Have a uniform policy across the board. 2. Having a managed travel program provides the company with access to travel data that can show vendor-specific spends that can be used to negotiate discounts. 3. The need for reimbursing employees or providing them a company credit card number to pay for travel expenses disappears with the implementation of a corporate travel policy. 4. Implementing a single location where travelers login to a site monitored by the company alone will move employees toward picking more cost-conscious options for travel. 5. Companies that provide employees with specific travel purchasing guidelines recognize savings in airline, hotel and rental car spend that adds to the bottom line.
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In today’s corporate travel
environment, travelers are making decisions based upon convenience, relevance, points and status, and several other factors that go beyond company cost savings. With the total travel industry spend reaching more than $1 trillion dollars there are a lot of marketing tactics to get travelers to purchase from third-party/leisurebased websites. This spills into the corporate world by using tactics that make the traveler think they are finding the best price or getting a discount that has to be booked through a specific link. Think of buying business travel like you would an insurance plan or accounting software; would you let each employee develop their own process and purchase separate software? Many small business owners don’t want to pay for a travel program because they think that it is too costly or may not fully understand what it involves. Some think the program is going to take months of training and implantation calls to launch. What business owners often forget about is the culture that it is supporting by giving their employees the tools necessary to make informed decisions about procuring business travel. What it means when a company does not have a defined corporate travel program: 1. The employee has the ability
UPSIZE NOVEMBER • DECEMBER 2019
to book travel on any website or however they see fit. They may have static guidelines that are written on a travel policy somewhere. 2. The employee is responsible for either getting reimbursed for the trip or has been given a company credit card to pay for expenses as needed. 3. Employees are responsible for finding the best price, which translates to them shopping multiple sites, including direct and third-party consumer-based websites. What it means to have a managed travel program: 1. The employee is given an online booking platform that the company has implemented and they can either book through the corporate travel tool or contact the company’s appointed travel agency. 2. The company can have a set of parameters that, if necessary, can be flexible and potentially adjusted based on the restriction levels provided within its culture. 3. The company’s travel policy is embedded into the booking platform which provides dynamic guidelines for the traveler. 4. The company has access to travel data which means they can show specific vendor spend
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to help in negotiating discounts. The discounts are then rolled out company-wide, even without knowing the employee may chose a company discounted rate. Starting a travel program Now some say that you shouldn’t start a managed travel program until you hit a certain spend or have so many employees. This isn’t always the case. Within the industry, many of the travel management companies are able to provide discounted rates they provide to all of their clients. So, while a business may not have enough spend to get their own negotiated discount, they can still have access to corporate rates by using a corporate booking tool. So instead of relying on your employees to have the mindset of a business owner, consider starting with an online booking platform to help guide them to book travel within company policy. There are a couple options on the market for buying business travel. The most widely known travel and expense management tool on the market is SAP Concur. They have products available for small businesses all the way up to large enterprises. Deem Travel is one that has been around for a long time, and it has rebranded to focus on the traveler experience. Both of these tools offer something different and unique to the travel industry. The benefits hit the bottom line Companies that have a clear travel policy and the guidelines in place to manage corporate travel find savings, cost-reductions, and corporate discounts. There are vendors in the travel industry that will only provide upfront discounts to companies us-
ing an online booking tool. Corporate Savings Estimates (based on internal research of the firm’s own clients): 1. Airline spend - 7% 2. Hotel spend - 12% 3. Car rental spend - 5% These savings are found a couple ways. The most widely disputed estimates say that you can actually find between 20% and 30% savings from buying behavior alone. By having travelers login to a site that is monitored by the company, they will trend toward picking costconscious options. These online platforms source content directly from vendors and then corporate discounts and rewards are stacked on top to help drive down spend. After you have the ability to track the data, the next step is evaluating the cost to visit Client A and the revenue generated from that client. Understanding the traveler mindset Whether your company has 10 employees that travel or a couple thousand, travelers have one thing in common: they need to source air, car, and hotel. Why not use a tool that can help bridge the gap between traveler satisfaction and corporate responsibility? That way you can track the data and make informed decisions that make sense for your business.
“ Why not use a tool that can help bridge the gap between traveler satisfaction and corporate responsibility. That way you can track the data and make informed decisions that make sense for your business.” Andy Chaussee Professional Travel Service
Andy Chaussee does business development for Professional Travel Service: 763.577.2307; andy@professionaltravelservice.com; www. professionaltravelservice.com. www.upsizemag.com
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exiting
SOLUTIONS
SOLUTIONS
The Benefits of Building to Sell by Andy Kocemba
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y wife and I are home-bodies, and we like to fix and create and make our house our own. In a world obsessed with resale value, we always made it a point to make the home improvements for us, not for the future owner. New kitchen and bathrooms helped when we eventually sold the house, but by doing those projects earlier in our ownership we could enjoy the results for years before we sold. The same holds true with businesses. We can all agree that someday you will sell your business, and that planning for the sale will create a better outcome and get you closer to your sale goals. Simply put: building your business to sell creates a better sale outcome. But regardless of your sale timeline, “building to sell” creates a better business for you to run and enjoy right here and right now. Here are three areas of your business you can work on to benefit you both today and in the future when you sell. 1.
Profits: One of the key metrics in business valuation, having higher profitability will increase your sale price. Don’t wait to sell to do those little things to increase your price. Implement those changes now and enjoy the increased profitability of your business while you still own it.
2.
Infrastructure: A well run infrastructure, documented processes, and strong employee base all make a business more valuable to a buyer and easier to sell. But don’t wait to create those systems simply for a new owner’s benefit. Get those processes in place now and reap the rewards of a business that runs smoothly, while you are the one to enjoy it.
3.
Intangibles: Items like brand reputation, intellectual property, and even “curb appeal” (think cleanliness of shop/office, the look of website and marketing materials, etc.) all influence the trust and value a buyer will place on your business, and are areas that should be in tip-top order when you are ready to sell. Having those items fully utilized will make your life easier and make your business more profitable, both now and when you decide it’s time to sell.
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ANDY KOCEMBA is President and co-owner of Calhoun Companies. A graduate of Bethel University, Andy is energized by his daily interactions with the owners and entrepreneurs behind the Midwest’s thriving small business community. Business organizations and media outlets regularly seek commentary from Andy about everything from the state of the small business economy to advice for small business owners. He has also written two books, providing a checklist of things to consider when buying or selling a business. Andy is a member of the International Business Brokers Association, The M&A Source, Minnesota Chamber of Commerce, and serves on the board of the Better Business Bureau of Minnesota and North Dakota. For more than 100 years, CALHOUN COMPANIES has served as matchmaker for buyers and sellers, guiding both into the next phases of their lives. We focus on healthy and profitable businesses, helping them leverage their assets and realize their goals through business brokerage, commercial real estate, mergers and acquisitions, and business valuation services. Contact Info: Andy Kocemba, President andy@calhouncompanies.com Direct: 952-564-3822 Calhoun Companies 4550 W. 77th St., Suite 180 Edina, MN 55435 Phone: 952-831-3300 Fax: 952-831-6516 www.CalhounCompanies.com
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SOLUTIONS
exiting
SOLUTIONS
Exit Strategy — What’s Your Plan? by Dyanne Ross-Hanson
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% of Business Owners will leave their businesses, whether planned or otherwise. 79% plan to do so over the next 10 years. Yet, only 17% of those owners have created a written Exit Plan. * Risking personal financial security, employee’s financial well-being and the survival of the business they have worked so hard to create.
DYANNE ROSS-HANSON is President of Exit Planning Strategies, LLC. She is a Certified Exit Planning Advisor™ (CEPA), Chartered Financial Consultant (ChFC) and Certified Financial Planner® (CFP). Dyanne is a speaker for Vistage International™, published author, Secretary of Exit Planning Institute and Past President of the Society of Financial Service Providers.
Owners also recognize that most of their financial net worth is locked inside their businesses. They know they need a plan. However, they are hesitant about how or where to start. At Exit Planning Strategies, LLC we provide that direction. Through a proven, multi-disciplinary, outcome agnostic process. A process that results in a coordinated, accountable Action Checklist for the owner and his/her advisors to follow. Exit planning is not an event. Rather, it is a process. One that requires experienced, independent council in order to succeed. Every successful exit plan requires answers to tough questions. •
When does the owner want to depart or reduce day to day involvement with the organization?
•
How much capital is needed to support the owner’s desired lifestyle upon departure?
•
Whom, ideally would the owner like to transition the business to?
•
What’s the business worth?
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What exit options exist?
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If transitioning to an “inside” buyer — does the individual(s) have the financial ability to pay for the purchase?
•
How can an owner motivate and retain key personnel, before they’re ready to share equity?
•
How does an owner manage contingencies — loss of shareholders, key people, financial resources, customers?
* Data from the BEI 2016 Business Owner Survey
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At EXIT PLANNING STRATEGIES, LLC, our mission is to act as experienced advocates in helping clients develop comprehensive, written Exit Plans. Our process is well defined. Our client’s objectives form the core of our work. We strive to thoroughly understand an owner’s unique set of circumstances, along with vision for the future. By doing so, we position ourselves to “Direct the Process” of developing a transition strategy that integrates a client’s financial and legacy objectives. Contact Info: Exit Plan Strategies, LLC 539 Bielenberg Drive, Ste. 200 Woodbury, MN 55125 p. 651 426 0848 w. www.exitplanstrategies.com e. drh@exitplanstrategies.com l. https://www.linkedin.com/in/ dyannerosshanson/
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Eyes on the
prizes Mentorship and networking while competing still benefiting past Minnesota Cup winners
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t an awards dinner in early November, StemoniX was named by Singularity University’s Exponential Medicine one of five companies to claim a 2019 MEDy Award. The MEDy awards recognize companies that are creating new solutions to redefine health and medicine and are on track to help millions, if not billions of lives. StemoniX was named “Most Disruptive.” It was just the latest set of accolades collected by StemoniX. The company, which has invented products that allow for testing chemical reactions between drugs and human cells while they are outside the body, has come a long way in the three years since it was on local stages selling Minnesota Cup judges on the efficacy of its product. The idea stemmed from co-founder Ping Yeh’s own battle with cancer. The initial treatments did not work well and left him with long-term side effects he thought could be averted by better testing methods. For winning the Minnesota Cup in 2016, StemoniX won $80,000 that was used quickly, Yeh says, on general business needs. Those dollars are long spent. But the benefits of competing in and winning the competition continue paying dividends. “It was a huge moment in our company’s history,” he says.
Wouldn’t be where we are
Upsize reached out to several of the last decade’s winners of the Minnesota Cup to get an update on how their companies have fared in the years since. Yeh says he’s now on the radar of some of the top medical minds in the country. The company has secured more than $20 million in investment through various sources in the three years since the Minnesota Cup win. And in recent months, StemoniX’s have received validation from several quarters, including the IQ Consortium, a pharmaceutical and biotechnology association aiming to advance innovation and quality in the industry. Long-term, there’s hope that the company can contribute to helping researchers solve the causes of Alzheimer’s, Parkinson’s and other diseases of the brain. “I feel like we’re getting our legs under ourselves to drive forward here,” he says. “The last several months have been just an explosion of increased customer traction, results and it’s been awesome to experience.” When asked if the company would have eventually gotten where it is now without the assistance of the Minnesota Cup, Yeh says he’s not sure. Well educated, but not a public speaker or entrepreneur by trade, Yeh says he learned a ton
by Andrew Tellijohn photographs by tom dunn
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UPSIZE NOVEMBER • DECEMBER 2019
www.upsizemag.com
Ping Yeh, StemoniX
www.upsizemag.com
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COVER STORY about honing the company’s message and communicating verbally to those he’s pitching. He found some investors and other supporters in the community who offered media training. It ended up being a tremendous experience. “Of course, just getting that top of mind communication out to the public about us and our brand,” he adds, recalling being interviewed on the CBS Morning News the morning after finding out StemoniX had won. “That was a lot of fun. It has a ripple effect throughout the community. It gives you confidence that if you can present on a stage at Minnesota Cup, you can do it anywhere.”
Last year’s winner
Aneela Idnani feels similarly. In 2018, her company, HabitAware, swept both the Minnesota Cup and the MEDA Million Dollar Challenge. The company’s Keen bracelet, that can be programmed to pick up on repetitive motions, such as hair pulling or nail biting, and programed to vibrate when it catches users in the act. It also was named one of Time Magazine’s best inventions for 2018. “2018 was a big year for us in terms of being in the news,” she said. As with other winners, she says the money helped, but the act of building a business plan on paper instead of in your head, the mentorship from people all over the Twin Cities business community and the overall visibility created by the win have helped even more. “It’d been in our heads since we started on this path of developing a smart bracelet,” she says. “That was super helpful. Without that application process and without those mentors, who are steps ahead of us in what they are doing … it’s more than just the prize money. The community support, the connections you make. It’s a testament to the Twin Cities start-up community wanting to be part of something that is helping people and that is changing lives.” After a wild year, HabitAware is settling down and staying focused on moving the product forward. The company
CONTACT: STEVE ANDERSON, 612.327.4795; steve@preceptismedical.com ; www.preceptismedical.com. ANEELA IDNANI, president and co-founder of HabitAware: aneela@habitaware.com; www.habitaware.com. MATT RONGE, co-founder and CEO of Astro HQ: matt@astro-hq.com; www.astropad.com. PING YEH, co-founder of Stenomix: 855.783.6669; info@stemonix.com; www.stemonix.com.
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UPSIZE NOVEMBER • DECEMBER 2019
is using the award money, along with a grant procured from the National Science Foundation and the National Institutes of Health, to improve on the Keen products. “This has been a heads down year of taking these new ideas and making that new product we’re working on,” she says. “We’ve been using the funds for research and development.” Idnani, through connections made during the MEDA challenge, has worked on building her confidence through coaching she’s received on improving her public speaking skills. And she’s been sharing the story of HabitAware, which grew from her own battle with Trichotillomania, on a wider scale. Earlier this year she spoke on mental health during a TedXFargo event in front of around 2,000 people. “That wouldn’t have happened if I didn’t go through the MEDA challenge,” she says. “And the MEDA Challenge wouldn’t have happened if we hadn’t done the Minnesota Cup. … It’s been phenomenal how the Twin Cities ecosystem has rallied around us.”
Astropad bootstrapping continued growth
One of the early lessons Matt Ronge, co-founder of Astro HQ, learned from Minnesota Cup judges and mentors was to not undersell the company. The projections, they said, weren’t ambitious enough. And, he says now, they were right. Turns out Astropad, which allows users to turn their iPads into drawing tablets, was just the beginning. Since winning in 2015, the company has launched Astropad Studio, a subscription-based professional edition. Then, on the hardware side, it launched Luna Display, which enables the iPad to be a full wireless sector display. So far, Astro HQ has focused all its efforts on Apple products. Down the line, Ronge says, the company plans to introduce additional products, including similar technology to those already existing products for Windows as well. “We think that’s at least 50 percent of the market we’re missing,” he says. “We see huge potential there.” When Astro HQ participated in the Minnesota Cup, it was just Ronge and co-founder Giovanni Donelli. The company now has 14 full-time employees. And it has accomplished this growth without the assistance of any outside investors. Venture capital will be considered down the line if there’s a project that requires it for completion, or if there is a dramatic increase in the need for ad spend or some other unforeseen expense. But so far, growth has been slow and steady enough where it’s been unnecessary — which has allowed Ronge and Donelli to maintain control. They remain in contact with some of the mentors they met during the competition. Ronge and Donelli are knowledgeable about technology, but new to owning their own shop. “We go to these folks with business problems,” he says.
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COVER STORY “That’s been really helpful, be it how do we approach the market or we’ve had help with hiring, management and areas where we know we need to hire somebody but we’re not quite sure what to hire for. … We were software developers. We were working on our business chops.” And you don’t necessarily need to win the Cup to enjoy the benefits, he adds. “It’s great to win the prize, it’s great to get the press coverage,” Ronge says. “Even if you participate and you make it fairly far in the process, you’re going to get a lot out of it.”
Mentoring pushed Preceptis forward
Steve Anderson, CEO at Preceptis Medical, says his company got lucky when it won the $65,000 pot that came along with the 2013 Minnesota Cup. “We knew we had a strong idea and a good product,” he says. “We thought it might be difficult to beat the software companies.” But win Preceptis did, and, as with other winners, they say the prize money helped, but the contacts met along the way were an even bigger deal. Preceptis, which manufactures the Hummingbird Tympanostomy Tube System that minimizes surgical pain and trauma during ear tube placement, has approvals allowing physicians to use moderate sedation for routine procedures. Anderson says he’s optimistic the company will soon get clearance allowing physicians to perform the procedure using nothing more than a topical anesthetic to numb the eardrum. “It’s hard, grinding work,” he says of the process, which has taken longer to gain approvals because regulators are more cautious with pediatric products. “Yet, it’s needed. It’s a moral crusade. We know how important this is going to be.” It’s been a long road since he and a neighbor started working nights and weekends on bringing this idea to complete fruition. “That would be the big one,” he says of this last approval. “At that point, everybody benefits. Kids avoid the risks of general anesthesia. It’s way more convenient for parents. Its way less costly for parents because you’re paying for an office procedure instead of a procedure in an operating room. The payers want it because the cost of doing things in the office instead of the [operating room] is significantly less. And the [emergency medical technicians] want it because everything works better for them.” Anderson says he recalls getting a mentor through the Minnesota Cup competition that helped Preceptis improve its plans for marketing, raising money and putting together a solid business plan. The company has since reportedly raised nearly $10 million through several rounds of financ-
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“That was a lot of fun. It has a ripple effect throughout the community. It gives you confidence that if you can present on a stage at Minnesota Cup, you can do it anywhere.” — Ping Yeh, StemoniX ing, including a Series B round that closed in 2018. Capital does remain the company’s biggest need, he adds. Anderson says in recent years he has gone back and spoken to and mentored some Minnesota Cup participants as a way of giving back for the help Preceptis received. “We are big fans of the Minnesota Cup,” he says. “We are always available to support the Minnesota Cup and its companies. Even more than that, any entrepreneur in the device space. It’s a fraternity. It’s a difficult space.”
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WORKSHOP: SELLING YOUR BUSINESS
SUPERSIZE YOUR SALE Experts offer advice on maximizing the return on your business
By Andrew Tellijohn Photographs by Tom Dunn
P
reparing a business for sale, putting together a team of advisers figuring out what kind of buyer and legacy a seller wants and not getting overly emotional as negotiations play out are all healthy pieces of advice for entrepreneurs who are looking to transition from their companies. One oft-overlooked factor in the sales process is making sure the seller and his or her family have prepared for the transition and know what it’s going to look like. Richard Brown, chairman and CEO of JNBA Financial Advisors, says he’s seen family members break down in tears over how they think the change will disrupt their wellmapped life routines. “So, there’s the financial aspect of it, the planning aspect of it, and then, truly, what does it mean for you and your family and how are you going to go on to the next stage,” he says. JNBA can help walk its clients through the basics of making a sale, but staff also spends time monitoring their emotional state, as well. Jerry Clark, founder and managing officer of SealedBid Marketing, agrees on the importance of monitoring a seller's state of mind. During a late October panel discussion, he talked of taking the time to plan ahead so the newly freed business owner has a path forward. “The emotional aspect is huge,” he says. “I just got off the phone with one of our clients this morning and he said ‘I took last week off, my wife and I, to figure out what we’re
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Rick Brimacomb, ClubE going to do for the rest of our lives.’” Selling a company is hard. It’s a long, often tedious process. There are a lot of details to work through. But it’s often the one chance a business owner has to maximize his or her life’s work. Doing it correctly in a way that will provide the greatest value was the topic of the panel at the Minneapolis Club jointly sponsored by Upsize magazine and Rick Brimacomb’s Club Entrepreneur.
Preparing for the sale
One thing an owner can do to make the sales process go more smoothly is spend some time “professionalizing” the business, says Todd Eberhardt, founder and CEO of Dynasty
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WORKSHOP: SELLING YOUR BUSINESS “So, there’s the financial aspect of it, the planning aspect of it, and then, truly, what does it mean for you and your family and how are you going to go on to the next stage.” —Richard Brown, JNBA Financial Advisors
Leadership Consulting. Get the books in order. Map out any systems that allow the company to function well. Show a potential buyer why they should be interested in your business above another. “If you are in your last three years and you are getting ready for a transition there are absolutely some things you could and should be doing to get the maximum value out of your business,” he says. Another key is understanding the buyer universe and knowing what a potential sale might look like, Clark says. Are you concerned about continuing your company as it is today? Will it move forward with your existing management team or possibly be merged into another entity? Selling to an individual or group of current employees will create a different future than selling to a strategic acquirer looking to merge your firm into one of its existing business units. “It may not act as it’s being operated today,” Clark says. “Those are some of the aspects we look at.” That plays a role in vetting potential prospects. “That’s the whole key, to understand what your client wants,” Clark says. “At the end of the day it’s all about the collaboration with the deal team and getting the transaction done in the
best method for what your seller truly wants to finalize at the end of the day.”
Building the right team
It’s likely that a business owner’s expertise does not include selling businesses. So, said owner should spend some time putting together the right team of advisers and engaging them early in the process, panelists say. Some sellers, Eberhardt says, do try to go it alone. “They also will get their wisdom and advice from the same place they watch cat videos,” he quipped. Eberhardt has been involved in starting five companies. When preparing to sell one, he and his partners told each other they’d be happy if 12 companies showed interest. Instead, they received more than 200 letters of interest. “Had we not had talented people around us we would have been swamped,” he says. “We probably would have missed out on the one that ended up becoming the best fit for us. So, when I spend my time coaching and getting these people ready, it’s getting them prepared for what’s to come.” Larry Fox, attorney, shareholder and co-founder of Avisen Legal, says his firm often gets called in at the last minute
“The biggest thing is trying to decrease as much risk in your business as possible. That’s everything from reducing the nonessential expenses you run through the business, reducing your customer and industry concentrations, also ensuring you have a strong management team as well as strong systems in place." —Ben Hangge Highland Bank www.upsizemag.com
NOVEMBER • DECEMBER 2019 UPSIZE
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WORKSHOP: SELLING YOUR BUSINESS “At the end of the day it’s all about the collaboration with the deal team and getting the transaction done in the best method for what your seller truly wants to finalize at the end of the day.” —Jerry Clark, SealedBid Marketing Inc.
when companies receive an unsolicited sale offer. That can work, but it’s not ideal. Better, he says, is three years or more ahead of a planned sale. “My advice would be, if you are thinking of selling your company, to engage counsel as early on in the process as possible,” Fox says. “Start early engaging your advisers. Start early thinking about a sale. Because you can maximize your value by early planning.” A law firm with M&A experience can get involved in negotiating agreements in tandem with business brokers and investment bankers, preparing letters of intent that start to “put stakes in the ground in terms of deal terms,” and just reading the fine details of term sheets. They also help with due diligence so company officials can continue working in the business in case a deal falls through and, ultimately, negotiate the end document.
CONTACT THE EXPERTS RICHARD S. BROWN, chairman and CEO JNBA Financial Advisors: 952.844.0995; richard.brown@jnba.com; www.jnba.com. JERRY CLARK, founder and managing officer of SealedBid Marketing Inc.: 952.893.0232; jclark@sealedbid.com; www.sealedbid.com. TODD EBERHARDT, founder and CEO Dynasty Leadership Consulting: 612.845.2076; todd@dynastylc.com; www.dynastylc.com. LARRY FOX, attorney, shareholder and co-founder of Avisen Legal: 612.723.1366; lfox@avisenlegal.com; www.avisenlegal.com. BEN HANGGE, vice president of commercial banking, Highland Bank: 952.858.4741; ben.hangge@highland.bank; www.highland.bank.
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“We understand what’s market in terms of a deal,” he says. “We can get you the best deal. I would say engage us early. Help us fix the cracks in your foundation. Get the company looking really good for sale.” The same goes for a banker, says Ben Hangge, vice president of commercial banking with Highland Bank. A bank’s due diligence process will include poring over three years of historical financials looking for trends in revenues, margins, expenses and profitability. The bank will look at a breakdown in revenue by customer. “So, as a seller, I would recommend having a good explanation for any negative trends or customer concentrations,” Hangge says. Bankers will also complete due diligence on individual buyers’ ability to make down payments, help with appraisals if there is real estate involved in a deal and assess records related to what are business expenses versus what are personal. Typical deals, Hangge adds, are finished through conventional bank financing if the buyer is stronger, or through U.S. Small Business Administration lending, if the buyer wants a minimized down payment or a longer amortization period.
Maximizing a sale
So, what’s the best way to maximize the return in a sale? Especially if the owner wants to step away right away or after a short transition period, that person needs to begin delegating. It’d be a turnoff to a buyer to see too much being handled by someone who’s not going to be around long. This could mean handing off sales to someone else or loosening rules requiring purchases over a certain amount cross your desk. Let your management team handle those situations. “One of the easiest rules of thumb I look for is, if I have someone else in my business who can do [a task] at 80 percent as good as me, I should be passing that off, so long as they are interested and excited in taking care of that,” Eberhardt says. “Let them grow into that because guaranteed there are bigger problems ahead.”
www.upsizemag.com
WORKSHOP: SELLING YOUR BUSINESS “One of the easiest rules of thumb I look for is if I have someone else in my business who can do [a task] at 80 percent as good as me I should be passing that off, so long as they are interested and excited in taking care of that.” —Todd Eberhardt Dynasty Leadership Consulting
Clark agrees. Management depth is one of the biggest factors an acquiring company looks for in a target. “Even if it’s a small company you still have to get that owner out of the day to day fray. He or she needs to back off.” Furthermore, lock up those top employees and managers with viable non-compete or non-solicitation agreements. Not doing so can scuttle a deal at the last minute, Clark adds. Ultimately, it comes down to getting the company as ready as possible for a sale, Hangge says. “The biggest thing is trying to decrease as much risk in your business as possible,” he says. “That’s everything from reducing the nonessential expenses you run through the business, reducing your customer and industry concentrations, also ensuring you have a strong management team as well as strong systems in place.”
Blind spots?
So, what makes a deal go bad? Often times, sellers have an unrealistic expectation of what their company is worth. It’s understandable, panelists say, because it often represents
a life’s work. But for a sale to take place, sellers have to be based in reality. You must, Hangge says, “Balance your personal expectation of what your company is worth versus market realities.” Failure to do due diligence will reveal blind spots in a deal, says Brown, who adds that a lot of those can be uncovered by bringing the right team into play. And, finally, keep in mind the role family and emotions will play in doing a deal. “Sometimes they are super supportive and incredibly helpful and sometimes it makes people take a hard-left turn that nobody saw coming,” Eberhardt says. “Never underestimate the toll the 11th-hour will take on the seller. For all the numbers you are going to discuss, you are still going to lay in bed at night talking to yourself about 'am I doing the right thing for myself, for my people? Is this the right time?'” Every deal, he adds, dies three times before being completed. “You have to keep working through it.”
“Start early engaging your advisers. Start early thinking about a sale. Because you can maximize your value by early planning.” —Larry Fox Avisen Legal
www.upsizemag.com
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2019
PROGRESS REPORT Growth Challenge participants, experts gather for update, final round of advice By Andrew Tellijohn
Photographs by Jonathan Hankin
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n mid-August, NSN-BabySoft LLC and Wilcraft gathered with a panel of experts sharing their growth challenges with a panel of experts assembled to help them solidify their plans. Six weeks later, the group reconvened in the offices of Winthrop & Weinstine in downtown Minneapolis for an update and a final round of advice.
Progress on baby band movement
NSN-BabySoft, which is attempting to gain traction as the exclusive U.S. distributor of a softer, gentler identification band that company officials say would prevent cuts and irritation on babies and, as such, reduce the risk of infections at a cost not significantly higher than what hospitals use now, was active during the interim. Based on the advice of experts, co-founders Vicki Sheaffer and Ellen Roeser, spent considerable time updating the company’s presence on the Internet. Previously, NSNBabySoft was marketed primarily on the site of North Star
Newborns, an in-home infant care provider. Experts felt the bands needed to be set apart more. So, they established separate Facebook and LinkedIn pages, updated the logo and began using social media to tout the benefits of their product, particularly emphasizing the risk of infections present with the current products, they say. They’ve also been hunting down statistics on statewide hospitals, in particular seeking out independent hospitals that aren’t associated with larger systems. They think there’s a better chance of getting face-to-face with decision makers in such venues. “We have made contact with 21 of 34, some in person, some via email, some over the phone,” Sheaffer says, adding that they’ve only received two firm “no” answers to their inquiries. “There is interest from the personnel we have contacted. They are working to take it to the next level. Hopefully that will be an in for that beta test trial.” They’re exploring the possibility of finding a partner to help navigate some of the larger systems and also are looking into meeting with large medical suppliers that service hospitals. “This is a whole different avenue and a whole different beast to tackle,” she says. “They know the inner-workings of someone who has been within a large medical supplier. They know the inner-workings of what it would take to be a menu offering.” And, Roeser says, NSN-BabySoft plans to step up its plans for attending expos, conferences and other forums where there may be an in. Experts were generally positive about the product itself and the work they’d done, though they expressed a bit of concern about the market size.
Expert insights
Andy Schornack, CEO of Flagship Bank, questioned
Jon Austin, J Austin & Associates 26
UPSIZE NOVEMBER • DECEMBER 2019
www.upsizemag.com
About this project: The Upsize Growth Challenge, presented by Winthrop & Weinstine, was designed by Upsize magazine to match two winning business owners with the expert advice they need to reach their goals. Winners, selected based on the ambition of their growth and the quality of work they’ve completed, meet twice with a panel of experts. During the first they share plans and receive advice. Then, two months later, they meet again, sharing their progress and getting a final round of thoughts from the expert panel.
www.upsizemag.com
Ellen Roeser (left) and Vicki Sheaffer, NSN-BAbySoft
whether there are enough babies born in a year to make the finances work. “If you’re making $1 per band, profit over cost, you’ve got to think what can I spend on these other things and still maintain a profit we’re comfortable with,” he says Even with tremendous market share, upside revenue potential gets capped pretty quickly, which could diminish the chances of attracting investors, adds Dean Willer, chair of the corporate practice group at Winthrop & Weinstine. Roeser and Sheaffer understood the challenge, but add that they think once they get through testing the product on infants, hospitals may see the value in expanding their use to other parts of the hospital. They may also be able to go into senior care facilities at some point. “I think this band is so good there is potential for them to use it throughout the hospital for all patients, burn victims, the elderly,” Roeser says. “Once they use it and see how good it is it becomes a favorite and is used throughout the hospital.” While Roeser and Sheaffer say they have a great relationship with the United Kingdom-based band manufacturer, Willer Andy Schornack, Flagship Bank also cautioned that they should ensure they get a contract that protects them against doing the work to break in to the market only to be replaced. “If I were in your shoes I would want to lock up your supplier and get a contract that allows you to renew unilaterally based on some objective metric NOVEMBER • DECEMBER 2019 UPSIZE
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Tom Roering, Wilcraft
- volume, sales, payment amounts, etc. - so that when you prove concept, the supplier can't say 'you did a great job, now we're going to replace you,'" Willer says. Schornack suggested not waiting too long to see if it might take moving to another market – perhaps the elderly – to prove the efficacy of the bands “You want to make sure the ultimate capacity is something you’re willing to spend time on,” he says. Diane Paterson, associate director of the Small Business Development Center in the Opus College of Business at the University of St. Thomas, suggested one next step might be taking some of the research the company has done and submitting it as an article to a parenting magazine. “Maybe Shop it to Parent Magazine or something where your target customer is reading those articles and has some serious concerns they may bring to their medical professionals,” she says.
Breaking the ice
While much of the state is lamenting the end of fall and prepping for winter, Tom Roering, president of Wilcraft, can’t wait for cold weather. The manufacturer of the water, ice, land vehicle known as Wilcraft, also spent the six weeks after the initial meeting enhancing his growth efforts. Some of the work wasn’t sexy. Partially in response to concerns raised by experts at the August meeting, he spent the summer documenting processes to make it easier to hire people to take on some of the tasks he currently handles himself. “As you mentioned, [the company] is me,” he says. “If I’m gone, it’s gone.” As he attempts to ramp up growth with the goal of selling the company in a few years, he also took steps to establish a consumer financing program and to hire some management and sales people to lessen his responsibilities. Along those lines, he’s hired a new accountant, who may become the company’s controller after a probationary period. He’s interviewed a few sales people, as he acknowledges that is not his forte. “We need to hit the road,” he says. “We need to visit the resorts, we need to do shows. We also need to put on a more professional face.” And he’s interviewed some videographers, with plans to shoot some videos that can be used on various social media and web platforms – though they can’t shoot much for him until there’s actually ice. He also acknowledged after doing a poll on the company’s Facebook page that experts were correct in concluding that the main factor preventing potential buyers from completing a transaction is the need to see, touch and feel the product.
Diane Paterson, University of St. Thomas 28
UPSIZE NOVEMBER • DECEMBER 2019
www.upsizemag.com
Pricing can be a challenge, but that’s usually overcome when people actually get a chance to see the vehicle up close, Roering says. “It’s all about getting the vehicle out in the public at locations where people can see them,” he says. To that end, distributors have stepped up, agreeing to take their Wilcrafts to several shows. And Roering says he’ll do a few more, as well. Wilcraft also is working to establish an ambassador program where previous buyers provide their contact information and allow those considering a purchase to contact them in exchange for some apparel or, possibly, cash. “Those people are so proud of their machines they’re happy to talk about it,” he says. “We’re looking forward to implementing that.”
Expert thoughts
The panel of experts liked several of the steps he’s taken. “I think you’re focused on the right things,” Schornack says, adding that increasing the dealer network is a sound avenue toward greater sales. And requiring cash down payments can help the company grow with minimal need for outside financing, he adds. He adds that the ambassador program coupled with the social media efforts, in much the same way Harley Davidson does, will build a following. “It’s not about the Harley, it’s about the experience.” Paterson also was intrigued by the ambassador program. “It builds community, that’s what you’re building through ambassadorships and shows,” Paterson says. “The pride these owners have because they love their vehicles is building a community much like Airstream did with their trailers.” She also praised the steps Roering has taken to remove some of his responsibilities. “The business is so owner dependent,” she says. “That’s a huge risk.” Jon Austin, senior partner at J Austin & Associates, expressed some concern that Roering is still heavily involved in manufacturing the units. Roering says that’s his forte and that he’ll always have a hand in that part of the business. “One of the perks of being the boss is that you can pick and choose what you do,” Austin says. “But all of the rest of the business depends on you too, so when you’re putting together one of your units, you’re not selling, you’re not arranging financing, you’re not supporting dealers who are doing shows.” He does like the ambassador program and working with dealers to attend shows as ancillary opportunities. But he reiterated a point made in the earlier meeting that bringing on a couple commission-based sales people and assigning them to do nothing but selling at shows might be his best avenue for significant growth. “When people see and touch and are face-to-face with the machine is when they buy it,” he says. “I keep coming back to … I think the real opportunity to boost sales and to line up www.upsizemag.com
Dean Willer, Winthrop & Weinstine
distributors is to put a couple teams on the road with a trailer and some professional booth-ware.” Consumer financing, leasing, anything that makes sales easier is the answer, says Willer, adding that it might make sense to spend some money on a market study to see just how big the potential sales could be. “Given it is a niche product, it might be worthwhile making a small investment in a market study, which would help you make some critical decisions, like whether investing in a phenomenal sales organization would genereate the sales volume you're anticipating or whether you're targeting the best market segments."
CONTACT THE EXPERTS JON AUSTIN, senior partner at J Austin & Associates: 612.839.5172; jon@jaustingroup.com; www.jaustingroup.com. DIANE PATERSON, associate director of the Small Business Development Center in the Opus College of Business at the University of St. Thomas: 651.962.4503; diane.paterson@stthomas.edu; www.stthomas.edu. TOM ROERING, president, Wilcraft: 651.653.0534; troering@thewilcraft.com; www.thewilcraft.com. ELLEN ROESER, co-owner of NSN-BabySoft: 612.819.0716; eroeser@northstarnewborns.com; www.northstarnewborns.com. ANDY SCHORNACK, CEO of Flagship Bank: 952.358.2522; aschornack@flagshipbanks.com; www.flagshipbanks.com. VICKI SHEAFFER, co-owner and president of NSNBabySoft: 651.402.7697; vsheaffer@northstarnewborns. com; www.northstarnewborns.com DEAN WILLER, chair of the corporate practice group at Winthrop & Weinstine: 612.604.6633; dwiller@winthrop. com; www.winthrop.com.
NOVEMBER • DECEMBER 2019 UPSIZE
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catching up by Andrew Tellijohn
Personalized book publisher sold business, still writing and innovating
I
n 2000, Maia and Allan Haag started I See Me! Inc., two years after receiving a personalized book as a gift for their first newborn son. They loved the personalization, but thought the illustrations and customization could have been better. By 2011, when I See Me! participated in the Upsize Growth Challenge, it was about a $5 million company with hopes of doubling that in the next five years. Now, another eight years later, that goal has been met. Sales and profits are up and the company continues to have a clear vision for its future growth, though co-founder and President Maia Haag says she no longer discusses specific financial details. In addition to more than doubling sales, I See Me! has had an interesting eight-year run. First, the company was acquired by San Francisco-based The McEvoy Group LLC, which owns several publishing companies, including Chronicle Books, which in 2012 established MyChronicleBooks, a line of personalized books and gifts. 30
While under new ownership, Haag still operates I See Me! relatively autonomously. She says the company has benefited from The McEvoy Group’s expertise in the business. The larger firm had international contacts that Haag expects to leverage over time to increase distribution of I See Me! books. The company is just getting into Canada this year. I See Me! also now has access to illustrators across the globe. The sale also has provided I See Me! with an influx of financial resources, access to best practices and information about what is working and not working with other peer companies, and improved financial reporting practices, she says. “By selling the business, it brought another layer of discipline to us in the sense of reporting we do on a monthly basis,” she adds. “Strategic conversations we have with our owners have really helped to provide another layer of financial and strategic discipline.” I See Me! also is getting into new product lines. The company in October launched BookofUs.com, a new brand operated under the I See Me! corporate profile, but as a separate, stand-alone website. The new entity
UPSIZE NOVEMBER • DECEMBER 2019
provides a collection of personalized books adults can give other adults. “It’s a book that allows an adult to express their love for someone else whether it’s their spouse, their partner or their best friend,” Haag says. When someone buys a book there, they customize an avatar, text, illustrations and other aspects of the story. The idea stemmed from when I See Me! published “Super Dad,” a book kids can give their fathers and others in which both children and adults are both featured. “I See Me! Has been a leader in personalized children’s books for almost 20 years,” Haag says. “We wanted to take that strong capability we have in personalization and bring it into the world of people being able to give books for adults. … It was a natural extension for us to now offer books for an adult to give to an adult,” she says. Not long before that, I See Me! had launched personalized books for pets, written from the perspective of the family dog or cat. The line also includes personalized puzzles that includes images and the name of a pet. The success of the last decade has not come without some lessons www.upsizemag.com
I See Me! was sold to The McEvoy Group LLC in 2014, giving the Eden Prairie-based publisher access to illustrators from around the world.
learned along the way. Haag says the business had one of its more challenging times when its printing partner had financial problems and was not able to ship its books. The solution there was switching printers and adding a second such partner “so we would not be 100 percent dependent,” she says. Financially, she adds, I See Me!
I See Me! Publisher of personalized books for children Founded: 2000 Co-founder and CEO: Maia Haag Headquarters: Eden Prairie Employees: 25 Web: www.iseeme.com
learned how important it is to understand precisely what is driving the company’s success. For example, personalized books that are great gifts the recipient will turn around and give another person enable building a viral effect for the business that is beyond when the company creates a book for a parent to give to their own child. “Emphasizing the gift-giving aspect of our business is something that has really driven our success,” she says. “Being successful is one thing. It’s even more important to understand what is driving your success and finding a way to replicate it.” After all, the company’s goal is to make people feel special. “When we are at our very best, we are taking limited amounts of personalization information and doing an extraordinary job of personalizing a book and making it unique to that individual while still making it easy to order,” she says.
“ When we are at our very best, we are taking limited amounts of personalization information and doing an extraordinary job of personalizing a book and making it unique to that individual while still making it easy to order.” — Maia Haag
I See Me! Inc.
Contact: Maia Haag, co-founder of I See Me!: 877.744.3210; mhaag@iseeme. com; www.iseeme.com.
www.upsizemag.com
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UPSIZE RESOURCE DIRECTORY accounting Cummings, Keegan & Co., p.l.l.p
BANK Flagship Bank Minnesota
BUSINESS BROKER Sunbelt Business Advisors
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.
1300 Godward St. NE, Suite 6000 Mpls MN 55413 Contact: Peggy DeMuse, pdemuse@sunbeltmidwest.com 651-288-1627 www.sunbeltmidwest.com
ACCOUNTING Eide Bailly LLP
BANK Highland Bank
BUSINESS TRAVEL Professional Travel Service
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
Andy Chaussee | 763-577-2307 andy@professionaltravelservice.com 3545 Plymouth Blvd Ste 114 Mpls, MN 55447 www.professionaltravelservice.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.
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Thinking about buying or selling a business? Sunbelt is the world’s largest seller of private companies. We work with business owners to help them understand the current value of their business and how to maximize their net proceeds at the time of sale. Sunbelt will provide business owners with a completely confidential, no-obligation value range. www.sunbeltmidwest.com.
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 • MARKETING Risdall
Bank North American Banking Company
COMMERCIAL PHOTOGRAPHER Tom Dunn Photography
Contact us: 651.631.1098 and www.risdall.com Ted Risdall, Owner Dave Schad, General Manager
Offices located in: Roseville, Minneapolis, Woodbury, Hastings Brad Huckle, President and Chief Lending Officer www.nabankco.com
308 Prince Street Studio 242 Saint Paul, MN 55101 651-368-2047 www.tomdunnphoto.com Tom Dunn tom@tomdunnphoto.com
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.
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.
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.
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
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BUSINESS BROKER Calhoun Companies
COMMERCIAL REAL ESTATE The Ackerberg Group
7600 Parklawn Ave, Suite 225 Edina, MN 55435 952-831-3300 www.CalhounCompanies.com Andy Kocemba
Lake Calhoun Center, Suite 10 3033 Excelsior Boulevard • Mpls, MN 55416 612/824-2100 • www.ackerberg.com Stuart Ackerberg • stuart@ackerberg.com
For more than 100 years, Calhoun Companies has served as matchmaker for buyers and sellers, guiding both into the next phases of their lives. We focus on small- to mid-sized businesses, helping them leverage their assets and realize their goals through business brokerage, commercial real estate, mergers and acquisitions, and business valuation services.
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.
UPSIZE NOVEMBER • DECEMBER 2019
ADVERTISING SECTION
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UPSIZE RESOURCE DIRECTORY computer consulting Intertech
insurance O’Rourke Agency, Inc.
mailing services Braemar Mailing Service Inc.
1575 Thomas Center Drive • Eagan, MN 55122 www.intertech.com • Ryan McCabe at rmccabe@intertech.com or 651.288.7001
41 North 10th Avenue Hopkins, MN 55343 952-932-7219 (phone) 952-932-2820 (fax) www.orourkeagency.com Tim O’Rourke
7379 Washington Ave S • Edina, MN 55439-2417 tel: 952-767-0300 fax: 952-767-0345 www.braemarmailing.com cu@braemarmailing.com
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.
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!
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.
EXECUTIVE RECRUITING Lyman Executive Search
LAW FIRM Avisen Legal, PA
MANAGEMENT & OPERATIONS BCV Consulting
Twin Cities 612-812-3263 www.lymanexecutivesearch.com David Lyman
Lisa Holter Ankel, shareholder 612.584.3401 www.avisenlegal.com
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.
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.
Greater Twin Cities Area Fractional Integrator | COO Barbara Voorhees | 612-247-3189 www.bcv-consulting.com | Barb@bcv-consulting.com
EXIT STRATEGIES Exit Planning Strategies, LLC
LAW FIRM Lommen Abdo
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
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.
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.
FINANCIAL PLANNING Goff Investment Group
LAW FIRM Winthrop & Weinstine, P.A.
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.
www.upsizemag.com
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.
ADVERTISING SECTION
NOVEMBER • DECEMBER 2019 UPSIZE
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UPSIZE RESOURCE DIRECTORY MANAGEMENT & OPERATIONS Visionary Integrator Solutions
PEER GROUP Creative Business Coaching, LLC
SBA LENDER Sunrise Banks
Contact: Barbara Voorhees, Mark Francis, Roger Scherping, Suzanne Lyon integrator@integrator-solutions.com www.integrator-solutions.com
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
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.
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.
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
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.
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
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UPSIZE NOVEMBER • DECEMBER 2019
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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 STAFFING Scouts Talent
TRANSITION PLANNING KeyeStrategies
WEALTH MANAGEMENT JNBA Financial Advisors
1600 Utica Ave S, #900 Minneapolis, MN 55416 (952) 484-6947, www.scoutstalent.com Gwen Martin, Mark Flaherty, Susan Haugen, Partners
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
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.
“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 fee-only 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 marks its 40th year of providing advice driven by advocacy™ and always doing what’s in the best interest of clients.
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
NOVEMBER • DECEMBER 2019 UPSIZE
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BACK PAGE Otto Bremer Trust investing in small business start-ups and growth
T
he Otto Bremer Trust, which owns 86 percent of St. Paulbased Bremer Bank, has invested more than $700 million in people, places and opportunities in the Upper Midwest. The Trust’s investments have gone to organizations supporting minorities, women, youth and more. The organization has found it successful enough to recently form a financial services subsidiary — Community Benefit Beneficial — to consolidate and grow its funding pathways. Small businesses are a major component. Brian Lipschultz, co-CEO and trustee, Otto Bremer Trust, shared some details on the organization’s efforts with Upsize Managing Editor Andrew Tellijohn. Tellijohn: How is the Otto Bremer Trust helping entrepreneurs and small business owners start up and grow? Lipschultz: Entrepreneurship has always been at the forefront of our
work. Year in and year out we support organizations that help individuals and small businesses with everything from training to direct financial support. In some cases, we’ve even “endowed” programs to use our reputational capital in addition to financial support. For example, we know that young people have choices to make in seeking education and future employment and we want to highlight the benefits of entrepreneurship. That’s why we worked with Junior Achievement to create the Otto Bremer Trust Company of the Year and the Otto Bremer Trust Student Entrepreneur of the Year. Minority communities have plentiful talent but often lack access to capital and support. So, we partnered with the Metropolitan Economic Development Association to create the Otto Bremer Trust Small Business Fund, which makes longerterm investments in minority-owned early stage ventures.
Brian Lipschultz, co-CEO of the Otto Bremer Trust, with Gina Blayney, CEO at Junior Achievement of the Upper Midwest
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UPSIZE NOVEMBER • DECEMBER 2019
It’s been a huge success. The growth in this area led to forming Community Benefit Financial to consolidate and grow our funding pathways. Small business remains a major component. Tellijohn: What types of projects is the Trust investing in and what is it looking for from an organization that wants to apply? Lipschultz: As noted above, there are a number of projects and organizations we invest in. We provided a $1 million program-related investment to WomenVenture to address a funding gap for female small business owners. The investment will be used for small business loans for women entrepreneurs who may not have access to traditional lending. Ideally, we’re looking at nonprofit organizations that help specific groups in the community, such as those noted in these examples. We recently created a credit facility for The Sheridan Story, a program that provides backpack meals for students to help them with access to food over weekends. Appetite for Change — a fast-growing non-profit focused on healthy food and related training and education — received a financing package from us that will help them with their signature Breaking Bread Café in North Minneapolis and to expand their catering operations throughout the Twin Cities. So, we do both direct and indirect lending. At this point our efforts have centered around support for members of our Upper Midwestern communities that have limited access to critical capital. Tellijohn: How would an organization get more information about the Trust’s efforts in this area? Lipschultz: The best place to learn about applying for grants or programrelated investments is at: www.ottobremer.org. We have a section on our guidelines that helps applicants better determine whether they are a fit. Contact: Brian Lipschultz, co-CEO and trustee for the Otto Bremer Trust: 651.227.8036; info@ottobremer.org; www.ottobremer.org. www.upsizemag.com
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