Upsize Minnesota September/October 2019 by Upsize Minnesota

Hiring veterans Non-traditional experience, willingness to work and learn can add value to your workforce

Mike Chamberlain,

co-owner and vice president of WeatherSafe Restoration Inc.

Build Best, to Build Win the

Unleash your winning potential and gain a competitive advantage. Maximize productivity with game changing, state-of-the-art technologies from Coordinated Business Systems.

Dan Gladden

Minnesota Twins Legend & Twins Color Commentator

800-852-9084 | coordinated.com | BURNSVILLE • RED WING • ROCHESTER • ST. CLOUD • DOWNTOWN MINNEAPOLIS • HUDSON, WI

Official Document Imaging Technology Supplier to the Minnesota Twins

Re-think there’s nothing more helpful than getting a fresh perspective. We’d love to give you ours. let’s talk.

Brian doughErty Vice President

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 September • October 2019 • Vol. 18 No. 5 • www.upsizemag.com

PAGE 18

Cover story

Hiring veterans: When members of the military transition to civilian life they often struggle finding work due to nontraditional resumes. But companies that work with them say they’re accountable, trainable and willing to work. In a tight labor market that can be a valuable find. BY ANDREW TELLIJOHN Cover photograph by Tom Dunn

PAGE 4

From the editor:

Bb BUSINESS BUILDERS

Editor Beth Ewen interviews Caroline and PAGE 6 Isabel Bercaw, who founded Da Bomb bath BANKING bombs while teenagers. What to do to maximize your borrowing capacity and cash flow.

PAGE 26

WORKSHOP: A panel of experts shares insights on how to staff up amidst a tight labor market.

PAGE 30

PAGE 4

by Andy Schornack, Flagship Bank

CATCHING UP:

Who’s who at Upsize magazine, and how to reach us.

PAGE 10

MANAGEMENT

Joe Keeley, founder of College Nannies, Sitters + Tutors, has sold that business and is looking for his next opportunity.

Finding advisers for small businesses in all stages of growth

PAGE 36

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

by Mike Porter, University of St. Thomas

PAGE 14

PLANNING Don’t let a looming recession stop you from planning an exit strategy by Dyanne Ross Hanson, Exit Planning Strategies LLC

PAGE 22

GROWTH CHALLENGE: NSN-BabySoft LLC and Wilcraft navigate their plans for growth with a panel of experts.

BACK PAGE: Fergus Falls-based small business owners can get training from Minnesota State Community and Technical College due to a grant from the West Central Initiative Business Assistance Program

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

kids today

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

UPSIZE MINNESOTA INC. Lake Calhoun Center • Suite 10 3033 Excelsior Boulevard Minneapolis, MN 55416

For any old person who’s lamented about “kids today,” this story’s for you. Isabel and Caroline Bercaw of Edina are co-founders of Da Bomb, the manufacturer and distributer of fizzy bath bombs. With help from their mother, Kim, who is CEO, and their father, Ben, who is CFO, they’ve built the business to $20 million in annual revenue. They are one of six Minnesota winners of the EY Entrepreneur of the Year 2019 Heartland Awards, They employ 130 people, proudly paying benefits and living wages, as Caroline explained, and scaling up to about 230 employees during the holidays, in a building Isabel said they were “fortunate” to purchase so they can control their real estate costs. Here’s the kicker: Isabel is 18, starting as a freshman this year at the University of St. Thomas in the Schulze School of Entrepreneurship, and Caroline is 16, a junior at Edina High School. They were absolutely delightful in an interview this summer, but to say so sounds patronizing and minimizes what they’ve created, starting when they were just 11 and 12. The sisters were figure skaters and soccer players and they’d use other fizzy bath products but found they would stain the tub and sometimes their skin. So, they decided to create their own, putting a “fun surprise” in every bath bomb, like the Fairy Bomb with a fairy charm inside. Inspired by their younger brother they created the Ninja Bomb that turns the water black. Caroline’s favorite is Earth Bomb, proceeds of which go to organizations that help the oceans. They first made bath bombs starting in 2012 for an art fair and quickly sold out. Then, in 2016, Target came calling and the building purchase and executive positions for Kim and Ben followed. Isabel counts “fearlessness” as one of the pair’s main qualities. Also, “obliviousity.” Is that a word? I like to make up words,” she says with a laugh. She means they didn’t have a clue what they were getting into and that’s a good thing. Says Caroline: “Isabel and I were so young when we started this.” Adds Isabel: “A lot of people are scared to start a business. We were so young, we were like, ‘Oh this sounds fun.’”

UPSIZE SEPTEMBER • OCTOBER 2019

Caroline (left) and Isabel Bercaw are cofounders of Da Bomb, makers of fizzy bath products and an antidote to anyone who laments about “kids today.”

The grounding influence of their parents is abundantly evident. Says Isabel about their parents: “They’re so intelligent and I look up to them so much. They’ve inspired curiosity in us. That’s the main building block to become entrepreneurs.” Isabel counts a couple of turning points in their young life. “We were in Forbes 30 under 30 class of 2019. That was on my bucket list,” she said. For the EY awards process, “we felt really supported,” and she especially likes the chance to talk to other entrepreneurs. As for keeping their heads in heady times, they run counter to the Instagrammers with their riches and baubles. Money from the business gets invested back into the business. “We don’t make money at all until we sell the business,” Isabel says. They pay themselves minimum wage, just like other teenagers who work at Starbucks or wherever, although they did take a draw from the company to buy themselves a car — used – that they share. Isabel shares advice they received: “Never make decisions out of fear or greed. We do live a high quality of life and have privilege,” and Caroline chimes in with what matters more. “I’m proud that we pay living wages and provide health insurance” for all those employees, she says. Adds Isabel. “I’d rather do that than have a collection of Gucci jumpsuits.” Beth Ewen Editor and co-founder Upsize Minnesota bewen@upsizemag.com

www.upsizemag.com



banking

BUSINESS BUILDERS

Maximize your borrowing capacity and cash flow by Andy Schornack

TIPS 1. Have good accounting procedures in place. Hire a local bookkeeper or accountant if you must, but good records provide the ability to react quickly when opportunities arise. 2. Using revolving lines of credit to fund fixed asset purchases or long-term investments adds risk and can stress cash flow and working capital. The need for such tools can sometimes be resolved with better planning. 3. Using a business credit card for short-term purchases that are paid off each month can derive cash rewards, build the business’s credit profile and reduce cash needs on an immediate basis. 4. The interest rate on real estate secured debt is traditionally lower than receivable and inventory-based financing, loan advance rates are higher, and the repayment terms are longer. 5. Consider reviewing your payment process to reduce the frequency of payments to the same suppliers by consolidating bills and paying not earlier than agreed to.

As business owners and managers we want to maximize opportunities and accomplish our goals. One of the most powerful positioning tools is strong business credit. It can allow us move quickly to take advantage of fleeting opportunities and help us maneuver through the stress of a pullback. Here are five quick tips: Keep your documents in working order Weak accounting procedures and practices are more commonplace than often understood. Justifiably, we go into business not to be accountants or bookkeepers but to sell our products or services. It’s a trade off that many entrepreneurs make to focus on what will drive revenue growth. I am a strong believer in monthly financial reporting, no matter how small the business. If it’s not a strength or time is scarce, consider hiring a bookkeeper or accountant. Good financial records provide the ability to react quickly to trends in gross margin, expenses, operating income, working capital and other key performance indicators. You can then focus on areas that will drive the most profit by making faster strategic and informed pricing changes, improving sales tactics and utilizing expense management tactics. After you look at them each month alongside your sales pipeline activities, you will build a stronger intuitive feel for the direction of the business and the challenges ahead. The other great benefit as you look to maximize your borrowing capacity is that it helps provide for a smoother and more transparent loan application.

UPSIZE SEPTEMBER • OCTOBER 2019

Balance opportunity and risk We know risk. We live it each day as we grow our business but reality is that we are not always great at balancing the risk and the reward. Funneling energy to prudent planning will result in stronger credentials and ultimately larger credit capacities. Always plan for the worst, and work for the best. Functional planning considers matching the repayment of the debt with the life of the investment opportunity. A common issue that creates stress and distraction is using revolving lines of credit to fund fixed asset purchases or long-term investments. This adds risk and potentially strains cash flow and working capital. We have seen many cases of improper use of lines of credit resulting in working capital shortfalls that could have been resolved with proper planning. Everyone should want the structure to match the opportunity. It adds more flexibility; and ultimately, you’ll sleep better and your banker will too. Maximize your credit Funding our businesses doesn’t need to be focused on one debt tool. Many options are available in today’s marketplace. Using a business credit card for short-term purchases that are paid off each month is a good way to drive potential cash rewards, build the business’s credit profile, and reduce cash needs on an immediate basis. As debt requirements grow, it’s important to consider the structure and complementary nature that real estate, equipment term loans and revolving lines of credit can have with each other. A properly structured real estate loan partnered with a line of credit can improve cash flow. The in-

www.upsizemag.com

Fiercely Independent for Four Decades 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 financial advisors in Minnesota. 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. 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 issues of Barron‘s magazine. Barron‘s is a trademark of Dow Jones & Company, Inc. 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.

terest rate on real estate-secured debt is traditionally lower than receivable and inventory-based financing, loan advance rates are higher, and the repayment terms are longer. This provides more flexibility to support the business’s cash flow needs by reducing expenses, providing more access to cash, and improving the monthly cash flow. More importantly, doing this successfully demonstrates your ability to prudently manage debt and ultimately improves your creditworthiness. Improve the cash conversion cycle Driving a strong cash conversion cycle, that is how fast you can convert invested cash from the start to ultimate returns, will allow your business more flexibility and enhance your ability to do more with less. It also demonstrates strong management and operational controls that lead to a stronger loan application. The primary ways to improve the cash conversion cycle are to collect receivables more quickly, reduce cash tied up in inventory and manage supplier payments. Practical steps for improving receivable collections include understanding the underlying invoicing, collection and dispute process after a sale has taken place. A faster and more frequent billing system will naturally drive more frequent collections. If collections become an issue, organize your collection process by risk profile and dollar amounts. Defining the roles and responsibilities on sales and collections allow for a more informed process and ultimately a better customer experience. We can often find ourselves overbuilding inventory to support our customer needs and close sales. To the extent we can have more foresight

into our customer’s pipeline is one advantage but another is optimizing our inventory based on contribution to sales, profit and the customer payment performance. This leads the business to optimizing inventory settings for customers that provide the best profit margin and payment performance over building inventory for slower and less profitable product lines. Delaying supplier payments is often times the common solution to improving cash cycles. Frequently, we have strong supplier partners we depend on for our business activities. Consider reviewing your payment process to reduce the frequency of payments to the same suppliers by consolidating bills and paying not earlier than agreed to. Simple actions and discussions with our suppliers can provide less work and more flexibility in the cash cycle. Understand your cash flow and collateral We know how much our project will cost and that we will need to borrow capital to execute on our plan. To finance it, we will need to demonstrate that we have not only the cash flow but the collateral to support the financing request. A clear and concise request that demonstrates the before and after cash flow and collateral coverage ratios are crucial to a good loan application. It could be the case when there are unlevered assets that could be pledged as collateral to provide additional support in the loan request. This is where preparation, organization and understanding of the collateral available to the lender provides the business with the best opportunity for the most creative and competitive rate and terms for their transaction.

“ I am a strong believer in monthly financial reporting, no matter how small the business. If it’s not a strength or time is scarce, consider hiring a local bookkeeper or accountant.” Andy Schornack Flagship Bank

Andy Schornack is CEO of Flagship Bank: 952.358.2522; aschornack@flagshipbanks.com; www.flagshipbanks.com.

UPSIZE SEPTEMBER • OCTOBER 2019

www.upsizemag.com

SEPTEMBER â&#x20AC;¢ OCTOBER 2019 UPSIZE



management

BUSINESS BUILDERS

Advisers, advisories and boards: uncovering the right format for advice by Mike Porter

TIPS 1. Spend time networking to help find advisers who can help provide insight on running your business. 2. Consider joining a group that facilitates personal engagements with other CEOs. Such groups provide forums for discussion, but also contacts for discussing future opportunities. 3. If your business is evolving beyond random acts of advising, the CEO may want to ask a few advisers to formalize the relationship, through creating a board of advisers. 4. Don’t be shy about asking for a nondisclosure agreement at the time of forming a board. If a target balks, think twice about asking them to serve on your board. 5. If you form a board of directors, know it is more formal, with legal restrictions and responsibilities, and its advice requires follow through.

As an Upsize reader, you will see yourself and your business represented somewhere on the spectrum below. Having spent some time advising businesses at all these levels, and a couple of decades watching firsthand how entrepreneurdriven businesses use advisers, consider the following observations. “Anecdotal” Advice Generally, in the early stages of business development, founders take information from anyone in their network. This seems particularly true for first-time entrepreneurs with minimal management experience or education. Not that Uncle Joe’s comments over Thanksgiving dinner don’t have merit, or that reading a few blog posts and Guy Kawasaki’s “Art of the Start” won’t be helpful, but these inputs barely meet table stakes. Leveraging informal contacts Thoughtful entrepreneurs know one individual won’t have all the answers necessary to drive a successful business. Early on, your team likely includes more worker bees than strategic managers. That’s the time to cultivate new connections. Here are some options: Peers: Consider joining a group that facilitates personal engagement with other CEOs. This delivers twofold rewards: it offers a forum for discussions about how to run your business, but also builds perspective and a network for discussing future opportunities. You may find this kind of network enhancement through groups like the American Marketing Association, National Association of Women Business Owners, or various chambers of commerce. Consider what you’re looking for because the dynamics differ greatly. Professionals: Most start-ups rely on a good accounting firm, but not all take the time to find a firm with a track record and active stable

UPSIZE SEPTEMBER • OCTOBER 2019

of entrepreneur-run businesses. Sure, any CPA can help manage a balance sheet and file your taxes, but a little research to find a firm that understands the nuances of growing a business helps. Similarly, your personal lawyer or sister-in-law may be completely competent attorneys, but only a few phone calls to your network should unveil several firms attuned to business. Further, the extra effort to find a firm aligned with your industry or the specific needs of your business will save time, money and headaches in the long run (i.e. – you may not need a patent attorney now, but will you in the future?). Business consultants are another often overlooked resource. Certainly, spending money on advice feels extravagant when you’re bootstrapping, but if you get good recommendations from your network, the value of the right consultant should exceed the cost over time. Marketing communication agencies or operations management specialists are additional “business advisers” that can deliver long-term returns on your investment. Again, do your homework and look for firms that appropriately challenge you, but follow through as directed. Formalizing the stream of advice Eventually, your business must evolve beyond random acts of advising. Often this takes the form of the CEO asking a few of the aforementioned informal advisers to formalize the relationship. Ad hoc/individual Often the leader continues to access these formal advisers as-needed, specific to their expertise. Over time, some may advise together on a particular issue. A business owner may start letting some designated advisers see more of what goes on behind the curtain. Don’t hesitate to ask for a non-disclosure agreement at this stage. It protects both your business and the adviser, and anyone who refuses most likely isn’t a fit.

www.upsizemag.com

Our lenders and business banking team have helped hundreds of new and experienced business owners fund and grow their small business dreams.

Small business financing made for your big business dreams.

With recently-opened locations in Lilydale and Burnsville, the addition of new teams dedicated to business banking, nonprofits, residential development, and home building, to the hiring of key industry experts including John Thwing, known in the Twin Cities as “The SBA Guy” – 21st Century Bank is expanding its local footprint, servicing customers across the Metro. 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 will collaborate with you to offer solutions the meet your needs now, with emphasis on your businesses future. “We pride ourselves on relationships we’ve cultivated with existing customers,” says Bank President Jon Dolphin. "Adding team members and locations– to further provide our customers with big bank products and sophistication with small bank speed and common sense.”

Advisory council/board The ad hoc approach may seem efficient and cost effective, but eventually the time comes to cross-pollinate the advice. This means: establishing some regular meetings; fully disclosing your business financials; expecting presentations from key leaders (including you) — just like a true board of directors. According to Kathleen M. Pytleski, CEO of the strategic planning consultancy Sekstant: “When I help a firm build an advisory board, I start with understanding what it is they wish to accomplish… What are the desired outcomes? We then outline the roles and responsibilities for the board, determining desired skills, knowledge, experience and interpersonal skills to have a well-rounded board. From that we create the mandate, focus, size, meeting frequency, terms and compensation. After that, we can begin to source proper candidates.” With an advisory board, the CEO can take or leave the consensus of advice after the meeting. The key evolutionary change – the individual experts discuss and brainstorm your business challenges and successes in real-time, uncovering opportunities and pitfalls the siloed advisers can never fully reveal. Board of directors The final evolution likely stirs the most internal conflict in entrepreneurs, particularly business founders. Your emotional connection to the business generally helps drive success, but it may also create blinders to hard decisions. If the advisory board unanimously urges you to make changes that in a public firm would be obvious, yet you hesitate because of some internal conflict, the success of your business may require formalizing the board. This forces you to act as that group mandates regarding such issues.

Pytleski suggests: “A Board of Directors has fiduciary and legal responsibilities to the shareholders of a company … the ‘duty of care’ and the ‘duty of loyalty.’ As a company becomes larger and more complex, a Board of Directors provides additional oversight for the shareholders. This is especially important if there is a large, diverse group of shareholders and/ or shareholders who are not part of the company’s management.” She also advocates that the CEO keep in mind that working with a true board of directors: • Is more formal, with legal restrictions and responsibilities, and is not as flexible as an advisory board. What the board decides requires follow through. • Is governed by company bylaws, making it more difficult to make rapid changes to the board. • Is elected by the shareholders, where advisers can be handpicked by the CEO and management team. • Is governed by a fiduciary duty requiring it to place the needs of the organization and its shareholders before the needs of its employees. • Will result in increased costs, such as directors and officers (D & O) liability insurance and compensation. A final consideration: both a board of advisers and a board of directors can help firm up business operations. However, in preparation for transitioning a company’s leadership from one generation to the next, or more critically, in seeking a merger or acquisition, the more formal director format provides documented management oversight, which increases the confidence of a suitor that the transfer of management can be handled professionally.

“ If the advisory board unanimously urges you to make changes that in a public firm would be obvious, yet you hesitate because of some internal conflict, the success of your business may require formalizing the board.” Mike Porter University of St. Thomas

Mike Porter, professor and director in the Opus College of Business at the University of St. Thomas: 651.962.4376; mcporter@stthomas.edu; www.stthomas.edu. 12

UPSIZE SEPTEMBER • OCTOBER 2019

www.upsizemag.com

40% OFF for Upsize Readers

Discount good for 40% off the ticket “Cyber Security for Small and Mid-size Businesses.” Use code UMCSS19.

Regular Pricing: $69

Cyber Security practices protect and leverage your small to mid-sized organization. TUESDAY, OCTOBER 29 | 1:00–6:00 PM Turn a Cyber Security plan into Business Security to enable your business to thrive. Without executing a cyber security strategy, you risk your company’s Reputation, Financial Well-Being and Intellectual Property. Protect yourself, your customers and your assets. Join us for an afternoon with our top sources for small to mid-sized businesses who will provide tools for developing policies on the technical, legal and financial aspects of a cyber plan.

Your Pass Includes: Cyber Risk Awareness Training Resource break in the Cyber Security Summit Expo to meet with security resources Networking Reception Sponsors:

Supporters:

Wednesday, October 30th

A Luncheon Workshop at the Minneapolis Club

EXIT STRATEGIES A success that lasts

Attend this workshop to improve your chances for success when selling your business. Discussion topics will include what businesses are worth, due diligence, the most common mistakes made by sellers, and much more. 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 https://bit.ly/2lj1omg For questions, please contact the Front Desk team of The Minneapolis Club 612.332.2292 or concierge@mplsclub.org

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

www.upsizemag.com

SEPTEMBER • OCTOBER 2019 UPSIZE



planning

BUSINESS BUILDERS

With recession looming, is planning an exit sound strategy? by Dyanne Ross-Hanson

TIPS 1. The earlier an owner establishes a plan and communicates it, the more likely the company will successfully navigate any forthcoming financial challenges. 2. Exit planning is a process, not an event. Waiting to plan and communicate can reduce exit options. 3. Most of a typical business owner’s net worth is tied up in their business, so gaining an accurate valuation from an expert is critical when exploring exit options. 4. When preparing to sell, a business owner should pay attention to value drivers, such as developing operating systems, documenting sustained earnings, paying down debt and incentivizing key managers to stay. 5. Create and regularly update a contingency plan. It can make the difference between receiving or paying fair market price and/ or adjusting to an unintended business partner.

WITH ECONOMISTS and forecasters predicting a near-term recession in the U.S., business owners may be asking if now is the right time to plan their exit strategy? Similar to other questions we hear from clients, including “How early is too early to plan for retirement” or “When is the ideal time to plan for business continuity” or “When should I implement an Employee Retention Plan,” the answer to all is the same … yesterday! Or, at the very least, today. Why? Because the likelihood of surviving an exit, retirement, continuity challenge, or key employee’s unexpected departure, is having a plan in place well before the triggering event occurs. And the earlier an owner establishes that plan and communicates it, the more likely they and their companies will successfully navigate the accompanying financial challenges. Exit planning is a process, not an event. In fact, the longer an owner waits, the more limited their exit options may become. Independent of what the economy is doing, owners need to begin planning for their inevitable departure, sooner rather than later. So where should they begin? The first step in developing an intentional plan for ownership transition starts with the owner’s objectives. These form the foundation of exploring options, evaluating realistic strategies

UPSIZE SEPTEMBER • OCTOBER 2019

and, most importantly, offering direction to his or her advisory team. That team, by the way, is essential to the development of a comprehensive plan. No one adviser has all the answers and even those already on the team may not have the exit planning expertise needed to complete the project. Owner objectives requiring clarification include when they want to depart or reduce involvement in the company, whether they have an idea of whom they would like to transfer the business to and, finally, what amount of capital is required to offer the owner financial independence upon departure. The next step involves identifying financial resources available to the departing owner, including the business value. Since it is estimated that as much as 85 percent of a typical business owner’s net worth is tied up in their business, gaining accurate value is critical to exploring exit options. While the owner likely has an opinion on the company’s value, an accurate valuation typically comes from a qualified valuation expert. It is at this juncture that analysis of whether financial independence needs and financial resources available are a match. Less than 20 percent of business owners are in the enviable position of not needing a dime from their business in order to reach independence. The vast majority must either maintain business value or enhance value in order to reach their

www.upsizemag.com

financial independence goals. As such, attention to business value drivers is a perpetual endeavor for most owners and a necessary step in the development of their exit plan. There are many: developing operating systems, documenting sustained earnings, focus on before tax earnings (EBITDA), growth strategy, paying down debt, managing inventory, updating facilities, equipment and systems, audited or reviewed financial statements, solid diversified customer base, and finally developing, incentivizing and retaining a key management group, to name a few. While a CPA or business consultant can measure many of these value drivers, the hardest one to measure, in my opinion, is the last. As a litmus test to determine if the business would survive without an owner’s day-to-day involvement (translated: motivated/ loyal/capable management team), ask when was the last time he or she took a six-week vacation without checking in and the business survived or even thrived? If the answer is “no way,” then an owner’s task should be to begin working their way into operational insignificance. By doing so, that owner increases the transferability of the business and, indeed, enterprise value. Next, if the owner’s objective is to build the business and eventually sell to an outside party, such as a financial or strategic buyer, focus on the aforementioned value drivers should be early and often. They should add a transaction intermediary to their adviser team, ideally two to three years before an anticipated sale. A qualified expert can help navigate the process and help fight against dismal statistics indicating that only 30 percent of sales culminate in a closing transaction. If an owner’s objective is to transfer the business to an “inside” buyer, such as a co-owner, family member or a key employee group, they will need to rec-

oncile the fact that those buyers are likely going to be supported via some sort of seller financing. When coordinated with a properly designed key employee incentive plan, seller financing can be cash flowed via increased profits. That in turn, is synonymous with increased enterprise value. A win-win for the selling owner. An internal transition is going to require an owner’s continued involvement with the business to ensure payment. It typically requires a minimum of a fiveyear runway to facilitate and finance. A final step in the development of an owner’s exit plan involves establishing and/or updating a definitive business continuity plan. Unplanned “triggering” events do occur, often without warning. They often initiate the need for stock transfer. While not all-inclusive, in the event of a death, disability, disagreement, divorce, etc. provision for stock transfer should be identified in a well drafted shareholders agreement. An updated contingency plan can make the difference between receiving or paying fair market price and/or adjusting to an unintended business partner. Market cycles go up and they go down. That’s not a prediction, it’s a certainty. Another certainty is that 100 percent of business owners will one day leave their businesses, voluntarily or involuntarily. The question is will it be on their terms, at their desired price and to their chosen successors? Odds are significantly improved with an intentional exit plan, developed well in advance of a triggering event, regardless of what’s happening in the economy.

“The likelihood of surviving an exit, retirement, continuity challenge, or key employee’s unexpected departure, is having a plan in place well before the triggering event occurs.” Dyanne Ross-Hanson Exit Planning Strategies, LLC.

Dyanne Ross-Hanson is president and CEO of Exit Planning Strategies, LLC., which assists business owners in developing ownership transition plans: 651.426.0848; drh@exitplanstrategies.com; www.exitplanstrategies.com. www.upsizemag.com

SEPTEMBER • OCTOBER 2019 UPSIZE

technology

SOLUTIONS

Consider an IT Development Collaborative by Jonny Brannum and Philip Brand

f you’re the owner of a thriving small business, ask yourself:

NOVA HORIZONS is a leading IT development firm located in Bloomington, Minn. Its experienced developers specialize in development projects requiring front-end and back-end website development and support using HTML CSS, JavaScript, PHP, MySQL, CMSs, Linux servers and cloud services.

• Do you have big IT development objectives but only a small IT department on staff? • Are your technology needs beyond your budget? • Can you afford all the IT expertise you need? • Do you desperately need front-end developers or back-end coders to improve your web presence? You’re not alone. The Problem “It seems that most thriving small businesses have IT development needs beyond their means and often require outside development resources (designers and coders) to achieve their project objectives. However, most outside IT development resources are prohibitively expensive for small businesses, billing at $150/hour or more,” says Jonny Brannum, co-founder of Nova Horizons. “But an IT development collaboration may be a solution.”

Nova Horizons is ready to help small businesses get more of their IT development projects done on time for less. Combined, the Nova Horizons offers over 70 years of IT development and entrepreneurial business management experience. Jonny Brannum (top) and Philip Brand

The Solution The secret to keeping a group of experienced quality developers in house is allocating and billing most (if not all) of their available hours. This is where collaboration comes in. As part of longer-term service agreements, many IT development shops are willing to work at below market rates to ensure near 100% allocation of their developers’ available hours. For a limited time, Nova Horizons is offering an IT development collaboration opportunity for ongoing development work to four small businesses. “The collaborative partners will benefit from the vast hands-on experiences and the career successes of Nova Horizons’ senior developers, strategic marketers, business owners and consultants. Recent partners have realized up to 35% increased development efficiencies to date,” says Brannum.

NOVA HORIZONS FOUNDERS Jonny Brannum is an industry veteran with 13 years of professional programming experience. He has worked with companies like Best Buy, Hallmark and the Nerdery solving complex software problems. Phillip Brand has over a decade of software development experience. Phillip has worked with large and small companies on current software implementation. He’s improved business efficiencies by recommending software and architecture strategy, and led teams through development and implementation. The IT Dev. Collaborative from Nova Horizons Helping Small Businesses Navigate the Digital Age Contact the IT Dev Collaborative Visit www.novahorizons.io and contact us jonny@novahorizons.io

UPSIZE SEPTEMBER • OCTOBER 2019

www.upsizemag.com

financial

SOLUTIONS

Four Ways to Build a Strong Advising Team by Richard S. Brown

hen you run a small business, you make thousands of decisions, covering everything from personnel to profitability. And one of the most important decisions you can make is choosing the right counselors to advise, support, and protect you and your business.

RICHARD S. BROWN As CEO and Chairman of JNBA Financial Advisors, ranked as one of the country’s top independent wealth management firms, Richard has received national attention for his advocacy-first approach, business acumen, and commitment to community. He and the JNBA team help leaders of small, medium, and large companies and other clients with their business and personal financial management, often working with and overseeing clients’ other business advisors to ensure strong collaboration and focus.

While financial advisors, CPAs, attorneys, insurance professionals, real estate agents, and others can each provide very specific expertise and value, a team-based approach can help you cover all your bases and tie everything together. Here are four things to keep in mind as you build that team: Take time to vet. Like you would with any business deal, do your due diligence. Make sure prospective advisors have the appropriate capabilities to thrive in their role, and that they’ll be a fit with your way of working. Define roles. Consider appointing one advisor the “quarterback.” That ensures everyone on the team is collaborating with an eye on both short- and long-term financial, professional, and personal goals. Recognize potential conflicts of interest. This is especially applicable to advisors who help with the financial aspects of your business. Whenever possible, look to hire advisors who have a fiduciary responsibility, a legal mandate to look out for your best interests and not their own. Stay involved. Through it all, be an active participant. Don’t rely exclusively on others to make major decisions about your business — especially your financial dealings. The best team of advisors is built upon mutual trust, with everybody headed in the same direction — yours.

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

www.upsizemag.com

JNBA FINANCIAL ADVISORS Bloomingtonbased JNBA Financial Advisors is an indpendent fee-only wealth management firm driven to deliver a higher standard of comprehensive planning, asset management, and life enrichment by providing customized financial strategies with an advocacy approach. Celebrating its 40th anniversary in 2019, JNBA’s fiduciary business model employs a team approach to drive the planning process for its clients, including strategy development and implementation with estate, tax, risk, and other professionals as appropriate. Richard S. Brown Chairman and CEO Richard.Brown@JNBA.com 952.844.0995 JNBA Financial Advisors 8500 Normandale Lake Blvd. Suite 450 Minneapolis, MN 55437 www.JNBA.com

SEPTEMBER • OCTOBER 2019 UPSIZE

VETTING vets Companies find military hires trainable, adaptable and open to hard work

eathersafe Restoration is a general contractor that focuses on commercial and residential roofing, windows, siding and roofing for commercial and residential buildings, The company has around 25 employees at any given time with a commercial division that is growing nicely. At any given time one or more of those employees has been a veteran returning to work in civilian life. “We find it important for us to help veterans get back into the workforce if we can help,” says Mike Chamberlain, vice president and co-owner. “I wish we had more sources to get in with veterans that are looking to work in our industry.”

Filling all roles

Returning to civilian life for veterans can, at times, be a rocky transition. That often includes difficulties with finding employment. Military personnel are not trained to talk about themselves, which can make interviewing for jobs challenging. And their resumes, though potentially filled with useful experiences, don’t always check the boxes or provide the keywords employers are seeking. Whatever challenges military personnel may have with the process of a job search or baggage they bring back from time spent overseas in service of the country, Weathersafe Resto-

ration is one of a growing number of companies finding that even with nontraditional resumes and skill sets, veterans bring a lot of skills to a variety of roles. From sales to assisting with installations to helping the production team, there’s not a role in the organization outside of office manager that veterans haven’t held at some point in time, Chamberlain says. They don’t always stay long. The last veteran he hired ultimately decided he wanted to get into helping other vets, so he ultimately left for the U. S. Department of Veterans Affairs. But it’s always worked out well. They aren’t charity hires. “We want to make sure we hire someone that fits our business and can represent our business well,” Chamberlain says. “It could be permanent, that’d be great.” Even if it ends up being a bridge job, he adds, “it seems like it’s always a good fit,” he adds. Chamberlain’s brother, Travis Walker, is co-owner, company president and, himself, a veteran. Several other family members were in the military and, Chamberlain says, it’s a way of helping out others who served. “We just look at it as a way to give back,” he says. “We kind of help each other out. We’re trying to fill that position and we know veterans come back from their service and they’re trying to get back in the work force. It’s just an understanding.”

by Andrew Tellijohn photographs by tom dunn

UPSIZE SEPTEMBER • OCTOBER 2019

www.upsizemag.com

Travis Walker, co-owner and president of Weathersafe Restoration, served overseas. The company has hired several veterans returning to the civilian workforce.

www.upsizemag.com

COVER STORY Wants to work with more

About 5 percent of the just over 100 employees at Horizon Roofing Inc. are veterans. It’s not a formal hiring strategy or anything like that, though Kurt Scepaniak, president and CEO, says he’s trying to figure out how to make it more concrete. So far, when he has ended up hiring veterans, it’s been by happenstance. And it has worked out well. “I definitely don’t have as many as I’d like to,” Scepaniak says. “They understand roles, responsibilities and they make good employees for sure. We haven’t found any magic sauce yet. We’re just trying to figure out how do we really tap into that group.” It’s important, he says, to have good employees who understand that quality work, even when most people won’t see it, still matters. For example, Horizon Roofing does commercial flat roofing. The general public won’t often see the results, but if there is a leak, it has to be fixed and it’s not always easy work. “Even simple things like making your bed and making it look good when you’re going through basic, that starts teaching them,” he ways. “They understand because of things they’ve gone through that it’s not always going to be easy.”

Intangible characteristics

Dennis Davis spent 16 years in the United States Navy and the United States Air Force Reserve. He deployed twice during Operation Iraqi Freedom and Operation Enduring Freedom and wrote “Not Your Average Joe: Profiles of Military Core Values and Why They Matter in The Private Sector.” He agrees with Scepaniak’s assessment of the characteristics veterans can bring to the table, and then some. Many

CONTACT: MIKE CHAMBERLAIN, vice president and co-owner, Weathersafe Restoration Inc.: 651.528.6219; wse@weathersafeinc.com; www.weathersafeinc.com. DENNIS DAVIS, consultant on veteran transition and author of “Not Your Average Joe: Profiles of Military Core Values and Why They Matter In The Private Sector”: 612.486.2501; dennis.davis@metafrazo.net; www.NYAJvets.com. KURT SCEPANIAK, president and CEO of Horizon Roofing: 612.333.1481; kurt@horizonroofinginc.com; www.horizonroofinginc.com. HAMSE WARFA, deputy commissioner for workforce development, Minnesota Department of Employment and Economic Development: 651.259.7501; CareerForce@state. mn.us; mn.gov.deed. MIKE WOLBRINK, president of Azule Staffing: 952.956.6550; mike@teamazule.com; www.azulestaffing.com.

UPSIZE SEPTEMBER • OCTOBER 2019

companies, however, are inflexible and unwilling to see those skills and characteristics. Instead, many of today’s job applications, particularly in the digital world, are not really about talent acquisition, but more about typing the right keywords and clicking on websites. “That hurts a lot of great candidates, but especially military because we speak a different language,” Davis says. He’s hopeful, particularly with the hiring market companies are facing today, that perhaps military personnel might start getting a closer look from employers. “It’s incumbent on the company to be able to make sure every rock is overturned properly and when its overturned properly they are able to assess that talent for what it really is, so they are not just recruiting, they are truly acquiring talent,” he says. He acknowledges that veterans need to do their part, as well. He works with a lot of folks returning to civilian life on making the transition. But he also encourages companies to think about hiring for values rather than skills. That will help when exploring the possible contributions a veteran, with his or her different experiences, might make. “Realize there are some universal skills that tend to be applicable, like the ability to follow directions, accountability, integrity, some universal things that are values and also are directly applied to your skills,” he says. “There are skills they are learning in the military. They may not be on a resume, but if they are doing their work and you understand a little bit about what they are doing, then you’d understand you can look at this person.” He also suggests that companies bring another veteran into their hiring process. “Let him work with the talent acquisition staff,” Davis says. “If you don’t have someone in that position, bring someone in to coach human resources professionals up so they do understand.”

Staffing company seeks veteran placements

Following college, Mike Wolbrink became an Army Ranger who did two combat tours. He’s now founder and president of Azule Staffing, a 7-year-old company aimed at putting veterans to work in rewarding civilian positions. The company has four divisions: IT staffing, program management, cyber security and professional services. The company never turns down a veteran in need of work and he’s tried to help organizations see the upside in hiring former military personnel. They bring skills that make them fit in many roles, Wolbrink says. But, in addition to the challenge of simply landing their first job, it’s not unusual for a veteran to have one or two short-term “bridge” jobs because they don’t really know what they want to do, Wolbrink says.

www.upsizemag.com

COVER STORY “We kind of help each other out. We’re trying to fill that position and we know veterans come back from their service and they’re trying to get back in the work force. It’s just an understanding.” — MIKE CHAMBERLAIN, Weathersafe Restoration “The veteran doesn’t know what they are going to be good at,” he says. “The third gig is what they hold on to. We’ve seen this hundreds of times over the last seven years. It doesn’t matter if it’s a private or a sergeant or a colonel, it’s a trend of people not knowing what they want to do.” One of the most successful areas of placement in recent years has been cyber security. In 2015, with a grant from JP Morgan, the company started a cyber division. It’s proven hugely fruitful. “Military people naturally understand how to take a defensive and offensive position on things,” he says. “They totally get it. Other people take a look at this and don’t understand offense and defense the way military people do. We knew vets would fit well into the cyber security realm.” Because of that mindset, and because most business owners don’t have the mind for or time to dedicate to cyber security, there have been opportunities for veterans to slot into roles within companies or start their own businesses. “People are really good at whatever they do,” Wolbrink says. “If I run a beauty parlor or I run a restaurant or I run a manufacturing company, that’s what I need to be good at. When we get to the cyber stuff, I need to bring in somebody else to take care of that.”

Websites, state offer assistance

There are some sources available for companies that want to hire veterans. HireaVeteran.com is a website where companies can post openings solely with veterans in mind. RecruitMilitary.com is a site that connects employers with veteran talent. With Minnesota dealing with a tight labor market and a long-time low unemployment rate, the state’s Department of Employment and Economic Development also sees the availability of veterans as a huge component of strengthening the

www.upsizemag.com

state’s work force. There are about 50 DEED operated CareerForce locations around the state and last year alone more than 7,000 veterans received some level of employment services, which included training on how to apply for jobs and plan for careers, says Hamse Warfa, deputy commissioner for workforce development. “For us to reduce that gap, hiring veterans is a big component,” he says. The state also works with businesses — primarily smalland mid-sized companies — to educate them about the availability of such talent and about the benefits they can provide for a business. “What we’re seeing is everywhere we go across the state, employers are really looking for help,” Warfa says. “Given the extremely tight labor market, we are noticing that employers are more willing to consider hiring veterans. Our message is it’s good for the company’s bottom line.” With around two jobs available for every one person seeking employment, he says it should be hard for companies to pass up the skills and characteristics veterans do bring to the table, even if they might not have a traditional resume or the exact skills sought. “We find them very trainable and retrainable,” Warfa says. “They came from adaptable complex environments. That becomes of great use to them. Adaptability is a strength to bring to the table for employers. The ability to work under pressure is an area of strength that is helping veterans in their job searches.” To learn more, employers can go to one of the 50 CareerForce locations or go to www.careerforcemn.com.

SEPTEMBER • OCTOBER 2019 UPSIZE

2019

READY TO GROW

Experts help newborn ID band, ice fishing vehicle companies plan By Andrew Tellijohn

Photographs by Jonathan Hankin

hen Ellen Roeser was visiting her newborn granddaughter in the hospital, she unswaddled the baby to changer her diaper and was shocked upon finding the identification band. “She had little cuts on her opposite leg,” Roeser says. “The ID band was super sharp. It just didn’t make any sense to me. This is a direct opening for infection.” Roeser and her colleague, Vicki Sheaffer, who together own North Star Newborns, an in-home infant care provider, started NSN-BabySoft LLC, to exclusively distribute in the U.S. a softer, kinder band aimed at providing more comfort and reducing the risk of infection. The bands are comprised of two parts. The first, a latexand allergen-free soft foam that forms the base of the band, is the part that comes into contact with the patient’s skin. It

connects with a durable, antimicrobial vinyl label that they say is compatible with thermal printers in use by most health care providers. They believe the product will make infants more comfortable and reduce incidents of infection where those babies are delivered. “It’s designed and created specifically for their delicate skin,” Sheaffer says. “We asked the question ‘why even allow the potential for an entry way of pathogens to occur by allowing nicks, cuts and scrapes to happen from an inferior ID band when they could be avoided completely.” The product is patented in the U.S. It’s designed to last four to six weeks, if necessary, and it can be washed with soap and warm water. Sheaffer and Roeser say they believe strongly in the product, in part due to positive feedback received from patient-facing personnel. But after many visits with officials at many health care facilities, they're still looking for a taker. They sought advice because they feel the company's next step, which would include significant investments, both in a professionally built website and, possibly, in adding to their team with sales and marketing assistance. “We believe in the product because we’ve seen what’s out there,” Roeser says. Adds Sheaffer: “Ellen and I are at a point where we have done all we can do … Is this worth pursuing? Is it something worth pushing out there? Because it’s now going to take an investment.”

Expert thoughts

Experts said the BabySoft bands could have potential, especially if they can get a first customer. It might be a good idea to start with a smaller practice NSN-BabySoft LLC wants to distribute a softer, kinder ID band for babies in the U.S. 22

UPSIZE SEPTEMBER • OCTOBER 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, co-founder of NSN-BabySoft LLC, found tiny cuts on her granddaughter in the hospital caused by an ID band.

where it’s easier to get a foot in the door, says Andy Schornack, CEO of Flagship Bank. “You should find a small regional instead of trying to go to the larger ones, even though those would be a bigger hit,” he says. “You’ve got to find that first one to try it.” Dean Willer, chair of the corporate practice group at Winthrop & Weinstine, agrees that while the cost savings at a large health care organization would be more substantial, the likelihood of finding a partner quickly is at the local or regional level. “It's never easy dealing with a huge faceless organization,” he says. "You'd be better off with a smaller group where you actually talk to the decision makers and convince them to take a chance on you." He also suggests pitching doctors who ultimately might end up becoming some of the product’s biggest supporters. “Find a way to make it mutually beneficial for you and the doctor," he says. ”You can find champions if you frame it right. They get credibility out of doing white papers or speaking at conferences. If they get in front of an audience to talk about how the product could improve medical practice, that could really develop a buzz." Jon Austin, senior partner with J Austin Associates, expressed concerns that by limiting the bands to babies, NSN-BabySoft might lose the ability to market cost savings because hospitals would then have two systems to upkeep. “You’re offering them a lot of extra work,” he says. “If you are a hospital administrator you are thinking ‘ok, where are we going to put it, how are we going to get it, who is going to train it, who is going to maintain it.’” Austin suggested considering broadening the scope and pitching it as a solution for everyone. “Then you’ve got a better argument to be made on costs because you are replacing a system instead of adding a second one,” he says. Diane Paterson, associate director of the Small Business Development Center in the Opus College of Business at the University of St. Thomas, says the company is going to SEPTEMBER • OCTOBER 2019 UPSIZE

Tom Roering, president of Wilcraft, says his company has aggressive growth plans for its recreational ice fishing vehicle.

need a stronger, stand-alone web presence with pictures and a description of its value proposition if it is going to succeed. Currently the product is being marketed on the duo’s infant care company website. “I think it would help you from a credibility standpoint when you are out selling to care providers and OBGYNs,” Paterson says. “There was a disconnect to me. … The section of site dedicated to this didn’t sell me on the value proposition. If I am a health care provider and I have met with you, the first thing I’m going to do is go see your web presence and review what it is you were selling me on at our face-to-face meeting."

Ice fishing on the move

If you watch Kent Hrbek Outdoors or other recreational sports programming in the Twin Cities, you may have seen the Wilcraft, a water, ice and land-based vehicle that extends the winter ice fishing season. It’s mobile, so those on the ice can move around to find the fish, unlike with a fixed fish house. It’s insulated and it floats. And if it does break through the ice, it can crawl back out of the water. There are four aspects of the sport Wilcraft focused on, addressed and improved upon, says Tom Roering, president. They include the accessibility, the mobility, the safety and the extension of the ice fishing season.” 24

UPSIZE SEPTEMBER • OCTOBER 2019

The Wilcraft fits on a trailer or, in the case of one early model, the back of a pickup. It doesn’t have to be physically moved by hand like a fish house. “Our option is jump in the Wilcraft, back it off trailer, and head out on to the lake,” he says. “Once in Wilcraft you never have to get out.” Roering came up with the concept in 1998, spent several years coming up with the prototype, and began producing them 2006. To date the company has been self-funded. It’s been profitable since 2016 and has seen double-digit growth the last three years. Now, the company hopes to significantly ramp up sales and profits over the next few years with a goal of selling to a private equity or larger all-terrain vehicle/powersports brand in about four years. Wilcraft is seeking financing to ramp up production and staffing. “We are right at that threshold of some good growth and we need to be able to strategically manage it and move forward," Roering says. “Funding is probably our next step." Roering is considering several different options. He met in April with economic development officials around the Midwest. There were some individuals interested in investing, but taking advantage of community superfunds that include low-interest rates, some of which are forgivable, would involve a move that could cost the company some vendors. Other options include traditional private equity to help ramp up marketing and staffing. A final, though less appealing, option, he says, is staying the course. “We have to be able to ramp up our marketing in a more www.upsizemag.com

professional manner, hire some key people and ramp up production,” Roering says.

Expert thoughts

Experts called the Wilcraft a cool product but expressed concerns that the company’s patents expire in five years, something a potential buyer will find important. They also see production limitations of the vehicle as an issue as sales growth speeds up, though Roering says the manufacturers that currently assist with assembly can ramp up as needed and “will do more of the assembly for us to the point where it could be turnkey for them.” Austin says Roering’s growth goals eliminate staying the course as an option. “You’re going to have to change the way you do business pretty radically to get to those goals,” he says, adding that creating a professionally produced video for the company’s website and for the tradeshow circuit would be helpful. Roering has been active on the trade show and State Fair circuit. The experts think it would be a good idea to ramp that presence up by bringing in a commission-based sales staff of at least a couple people who are dedicated to hitting every outdoor tradeshow possible. “This is a product people need to see and touch and sit in and see it in use,” Austin says. “So, you marry that experience with the target customer. How do we get to those people? A lot of people go to those shows looking for something to buy even if they don’t know it.” Willer quizzed Roering about the size of investment he’s seeking and what it would be used for. When Roering listed a number of ideas, Willer suggested nailing down a specific plan for how he would use the roughly $500,000 he says he’s seeking. “Investors want to know where their money is going and how it will accelerate your growth," he says. "If you can show a detailed plan of how you intend to spend that investment, that goes a long way." Schornack and Paterson aren’t sure Wilcraft will need that much in order to ramp up production. The company typically gets 20 percent of the cost upfront. It's a luxury product with a healthy profit margin. Such a down payment could allow the company to continue self-financing much of its growth, especially if a sales team went to several shows and made a few sales. “I would be looking at it as how quickly can I build and maintain a backlog,” Schornack says. “You could finance yourself at pretty limited cost. It comes back to balance sheet structuring and how you handle that in terms of what your capacity is to extend more debt from existing cash flow.” Paterson also suggested that he contact local resort owners to see if they’d have interest in a fleet of Wilcraft vehicles instead of monitoring and maintaining ice houses. If they buy a bunch, he might be able to get more than a 20 percent down payment in lieu of discounting an overall bulk purchase. www.upsizemag.com

She did express concern about Roering’s current staffing, which leaves him in a key role. He should consider making sure that some of the incoming hires he makes can stay around if he wants to leave the company after a sale. “As the business stands now, you’re it,” she says. “When you step away and you are selling the business, other than the patent and the product — because you’re even making part of the product — the whole brand is about what you’ve created. There is no opportunity for somebody to buy your business with staff in place as it stands right now.” Dean Willer Winthrop & Weinstine

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; 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 NSN-BabySoft: 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.

SEPTEMBER • OCTOBER 2019 UPSIZE

WORKSHOP: HIRING

HIRING and RETAINING

Expert panel discusses finding the right employees and keeping them around

By Andrew Tellijohn Photographs by Tom Dunn

t Brown & Brown Insurance, account services manager is an important, customer-facing position held by people knowledgeable about the industry and in charge of servicing clients on a daily basis. The company has one person in that role who works from home. She starts her day early, sending around 50 emails before breakfast, then takes a break to get her daughter on the school bus and take care of other personal business. She gets back in front of her computer around 10 a.m. to answer any returned correspondence, working until her daughter gets home. She then finishes her workday around 7 p.m., returning more messages and updating supervisors on any issues that have arisen with accounts during the day. Allowing her the freedom to work from home helped the company keep this employee in a role where retention is often difficult. “That became the single most important benefit,” says James Clairmont, managing principal of employee benefits. “It’s not an insurance benefit. It’s strictly a benefit that is designed around being able to operationally provide that flexibility.”

Know your audience, stick with your culture

There are many ways to attract and retain employees, from flexible scheduling to providing a great culture. And 26

UPSIZE SEPTEMBER • OCTOBER 2019

Rick Brimacomb, ClubE there are ways to fill roles with temporary consultants to ensure companies can conduct productive searches for their permanent counterparts, according to a panel of experts. The group shared their thoughts during an August discussion at the Minneapolis Club hosted by Upsize and Club Entrepreneur’s Rick Brimacomb. Clairmont says companies need to get beyond thinking about benefits as just health care, dental and 401K plans and focus more on designing programs that will differentiate the company and actually attract employees. “Those are all great and you need them and we probably

www.upsizemag.com

WORKSHOP: HIRING “Don’t be desperate. Know who you are and state that. If you exclude sleeping hours, we’re at work more than we’re not. I want people who want to be at Irish Titan for who we are, not because I’m desperate and I need a butt in the seat." —Darin Lynch, founder and CEO Irish Titan

all have them,” he says of the traditional approach. “But we have found that by really understanding the demographics and needs and wants of the individuals you specifically want to attract, that you can design benefit programs that are more effective and that will help you to attract and retain the best and brightest.” That’s become part of the culture at Brown & Brown, he says, adding that among the benefits offered by the company now include a Thursday afternoon happy hour and a tuition reimbursement program that was so popular that the original budget was exceeded well before all interested employees had signed up. “All of those things are falling into the bucket of employee benefits and culture,” he says. Darin Lynch, founder and CEO of Irish Titan One, told attendees that creating a rock-solid company culture and staying true to it are vital when hiring and retaining employees. Irish Titan builds websites and works with clients on strategy, marketing, search engine optimization and content. The company is unique in its industry in that it doesn’t work with contractors, freelancers or off-shore resources. He’s also particular about who he hires, looking for people who meet five values, including passion, ownership, teamwork, impact and skills (POTIS). He’s worked hard over the years to develop a culture that is people driven both in the sense that he needs his employees to, in their way, portray those values daily. “We expect all of our titans to demonstrate those in their own authentic way every day,” he says. “Some of those are more external, client facing and some are more internal, but that’s what we expect of everybody.” He also described the Irish Titan as a “no snowflake” kind of place. There is a culture of respect and acceptance, but people joke around with each other and Lynch, himself,

www.upsizemag.com

acknowledged the occasional expletive flies out of his mouth. “If someone is easily offended, we’re just not the place for them,” he says. “All of this is couched in respect. I’ve had to makes pretty snap decisions on peoples’ tenure at Irish Titan when they’ve acted in ways that are disrespectful. And I do that without much hesitation.” To cement the culture, the company has a lot of traditions. All new hires have to perform their high school fight song or, if they don’t know it, another song. It’s turned into a big presentation and the performances are archived on social media. “People rent costumes, we’ve had a ukulele,” he says. “It’s just a good way for people to become part of the family.” But employees also are recognized for their hard work. At the one-year anniversary everybody gets an Irish Titan rugby shirt with their name and employee number on the back. The company recognizes a “Titan of the Quarter” and lets those with birthdays pick the food at the monthly meeting. It’s a passionate place with employees who are screened intensely before they are hired. “Don’t be desperate,” he says. “Know who you are and state that. If you exclude sleeping hours, we’re at work more than we’re not. I want people who want to be at Irish Titan for who we are, not because I’m desperate and I need a butt in the seat.”

Benefits of temporary consultants

While a creative approach to benefits and a supportive culture might help lure employees in and keep them around a while, participants say it’s important that companies still take a reasonable amount of time doing due diligence on potential hires to make sure they find the right match. One solution in the interim, says Susan Haugen, partner and director of recruiting with Scouts, is bringing

SEPTEMBER • OCTOBER 2019 UPSIZE

WORKSHOP: HIRING “We have found that by really understanding the demographics and needs and wants of the individuals you specifically want to attract, that you can design benefit programs that are more effective and will help you to attract and retain the best and brightest.” —James Clairmont, , Brown & Brown Insurance

in a temporary hire. Scouts places high-level financial consultants into roles on an interim or project basis. “If you bring in a consultant, they can be there quickly to overlap with the outgoing employee and they can get up to speed in days rather than weeks or months,” she says. “Also, importantly, having that consultant in there doing the work allows the hiring manger to really do a good and patient search.” Having someone like that in place eliminates offloading duties on other co-workers, who might already be feeling overburdened. Temporary consultants might also make sense when a company has a specific short-term need, such as a specific software implementation or an updating and documentation of company processes. And temporary hires in upper-level roles are becoming more common. As consolidation pushes long-tenured employees out of jobs, it’s increased the population of

CONTACT THE EXPERTS JAMES CLAIRMONT, managing principal of employee benefits, Brown & Brown Insurance: 952.698.1132; jclairmont@bbmpls.com; www.bbmpls.com. SUSAN HAUGEN, partner and director of recruiting with Scouts: 952.484.6947; info@scoutstalent.com; www. scoutstalent.com. DARIN LYNCH founder and CEO Irish Titan: 612.910.1414; darin.lynch@Irish Titan.com; www.Irish Titan.com. MARK PIHART, attorney and shareholder with Winthrop & Weinstine: 612.604.6623; MPihart@winthrop.com; www. winthrop.com.

UPSIZE SEPTEMBER • OCTOBER 2019

available consultants. And it’s being seen by more employers as an acceptable career path. “It’s not just a temp job that you have to do between perm jobs,” Haugen says. “More employers are aware of consultants and the benefits they can bring. There are more consulting opportunities, so consultants have wider choice of the types of roles they take.”

Legal pitfalls

While there are many ways of attracting and keeping workers, there also are hiring standards companies must follow. Mark Pihart, attorney and shareholder with Winthrop & Weinstine, says most involved in hiring know discrimination against anyone via gender, age or disability is not allowed. But there are other protected classes that are not widely known, such as marital or parental status. “We’re seeing a significant uptick in failure to hire claims by applicants based on some of these protected classifications,” he says. “There may be this assumption that while this person is married or this person has young children at home, he or she is not going to be as dedicated to the job, and therefore the decision is made to hire somebody else.” Additionally, the Equal Employment Opportunity Commission is cracking down via wage audits on companies that hire someone at a raise but well below their own company salary guidelines, he says. “You have to make sure those individuals know the rules,” Pihart says. Right along with that, he adds, is maintaining a fair and impartial hiring process. For instance, if one manager doesn’t hire someone because of a drug conviction, but the manager in another department down the hall does so, that lack of consistency within the process, “makes it ripe for somebody to bring a claim.”

www.upsizemag.com

WORKSHOP: HIRING “If you bring in a consultant, they can be there quickly to overlap with the outgoing employee and they can get up to speed in days rather than weeks or months. Also, importantly, having that consultant in there doing the work allows the hiring manger to really do a good and patient search." —Susan Haugan partner and director of recruiting with Scouts

“It’s easy for somebody to take a swing and say ‘I think the real reason I wasn’t hired is because of this,’ he says. “So, those are the two biggest things I would say that create legal exposure from employers in the hiring process.” There also are some red flags the Department of Labor and Internal Revenue Service look for with respect to using a contingent workforce. Probably the biggest, he says, is when a temporary employee is hired to fill a role as a contractor when several others within the organization are W2 employees. It’s not necessarily wrong to use temporary employees, but misclassification of workers is a big focus of the government at present. At other times, when the relationship sours, claims can be filed against both the temp service and the business the person was placed with because of a lack of clarity over who legally is the employer. Pihart recommends getting the deal on paper.

“If you have one or more go-to temp agencies you are working with, you should have a contract with those temp agencies that clearly spells out who is on first and who is on second,” he says. But he concurs with the panelists on the importance of company culture. Opportunities for development and advancement and support from all organizational levels are keeping employees around. “How am I going to be trained?” he says. “Is this an environment of swim or sink mentality or is my employer going to invest in me and provide me with the training and resources so that I feel like this could be a career as opposed to just another job I might jump from two years from now? All that plays in.”

“Is this an environment of swim or sink mentality or is my employer going to invest in me and provide me with training and resources so that I feel like this could be a career as opposed to just another job I might jump from two years from now? All that plays in.” —Mark Pihart Winthrop & Weinstine

www.upsizemag.com

SEPTEMBER • OCTOBER 2019 UPSIZE

catching up by Andrew Tellijohn idea of helping build stronger families by using pre-screened nannies and tutors as role models for kids. And the concept worked. He got to 200 locations, though it took longer than expected. The company now has more than 12,000 “role models” in any given year. The biggest change is that Keeley no longer owns the company. There were a couple big moments that helped him get there since he last appeared in Upsize. First, in the early 2000s, he was preparing to travel one night when he and his wife needed a sitter. At a meeting the next day with someone in the tech industry, he was telling them about how he wanted to get real-time availability from his employees and be able to display in penny-pinching mode, while Lytle con- that availability to parents so they could vinced him they had to be willing to spend always book a sitter. some money to help the company grow. The counterpart said “Like Uber.” “I came from the school of thought to Keeley had not heard of Uber, but he bootstrap everything,” Keeley told Upsize looked it up and “it was just shy of magic,” at the time. “And then we’re spending he says. “I said ‘that’s exactly what I want $10,000 on a software program just to to build.’” The company soon became find out that we needed to build our own. College Nannies, Sitters + Tutors (CNST) It blows my mind. It’s a keep-me-awakeand that moment led to creating the Myat-night type of thing. Sitter app. “Peter came in and was a really helpful The second major milestone came in investor early on,” Keeley told Upsize in 2006 when the company started providSeptember. “He helped as I literally gradu- ing corporate backup care for a $9 billion, ated from college … It’s amazing how Boston-based public human resources much you don’t know.” company called Bright Horizons Family For whatever he didn’t know, Keeley did Solutions, which provides sitters for corknow that he believed in the concept: the porate clients. “If you couldn’t get to work because one of your children didn’t have child care or was home from school or mildly ill, you could send the child to one of their backup centers or, what was just starting out, was offering the option of having nanny or sitter come to the home. CNST, with its national network of employed nannies and babysitters, was a perfect match. Keeley ultimately sold the franchisor to Bright Horizons in 2016 and, as of July 1, has left the company, ending his 18-year-old journey with CNST. He’s now on a search for his next opportunity. He’s likely to get involved in another business, He’s looking for opportunities to either start, partner or buy into a company that is looking to use technology

With College Nannies, Sitters + Tutors sold, Keeley seeking next challenge

2005, Joe Keeley was 25, six years into the launch of his successful nanny placement business that matched college students with families. He’d attracted the attention of the late Minnesota businessman Peter Lytle as an adviser and source of financing. And he’d launched the process of nationally franchising then College Nannies & Tutors with the idea of opening 200 locations in five years. One of the lessons he learned from Lytle right away dealt with the challenges of dealing with cash flow. Having launched while he was in college at the University of St. Thomas, he was

UPSIZE SEPTEMBER • OCTOBER 2019

www.upsizemag.com

There are 12,000 “role models” employed by College Nannies, Sitters + Tutors across more than 200 locations.

to grow, possibly through franchising. “I like being in that position of teaching and growing this sort of entrepreneurship through building a national brand,” he says. He’s also looking at possibly investing, mentoring and getting actively involved in other early-stage businesses. His introduction to Lytle came when Lytle was a judge at the Minnesota Student Entrepreneurial Awards, which Keeley won. “I was looking for a place to land postcollege and looking for a little bit of seed capital,” he says. “It was very helpful at

College Nannies, Sitters + Tutors Description: Provider of screened, trained nannies, sitters and tutors for parents in more than 30 states Founder: Joe Keeley Year: 2001 (as Summer College Nannies) Sold: 2016 to Bright Horizons Family Solutions Web: www.collegenanniesfranchise.com

the time. I’ll probably do a little bit of that myself.” Keeley advises new small business owners with growth plans to ask lots of questions and seek help. He bounced ideas off not only Lytle but from his professors at St. Thomas. Plenty of willing resources exist. “Young entrepreneurs or new entrepreneurs they think when they take that CEO title, by virtue of starting something, that they need to have all the answers, and that they need to be able to do it all themselves,” he says. “The opposite of that is true. There’s a really good Minnesota Nice start-up community here where there are a lot of people and organizations eager to have coffee or take a lunch and help folks that are thinking of doing something.”

“ Young entrepreneurs or new entrepreneurs they think when they take that CEO title, by virtue of starting something, that they need to have all the answers, and that they need to be able to do it all themselves. The opposite of that is true.” — Joe Keeley

College Nannies, Sitters + Tutors

Contact: Joe Keeley, founder of College Nannies, Sitters + Tutors: Joe@ collegenannies.com; www.collegenannies.com.

www.upsizemag.com

SEPTEMBER • OCTOBER 2019 UPSIZE

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

BANK Highland Bank

business machines Coordinated Business Systems, Ltd.

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

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

851 W. 128th Street• Burnsville, MN 55337 (952)894-9460 (p) (952)894-9238 www.coordinated.com • Jim Oricchio – President

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.

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.

Coordinated Business Systems is Minnesota’s premier independently owned and managed provider of document imaging technology and managed IT and network services. In addition to providing the latest hardware and software, our mission is to offer custom designed managed print services, document management and managed I.T. and Network services programs to help business of all sizes improve profitability, increase productivity, lower costs and maintain their competitive edge.

ADVERTISING • MARKETING Risdall

Bank North American Banking Company

BUSINESS TRAVEL Professional Travel Service

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

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

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.

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

BUSINESS BROKER Calhoun Companies

COMMERCIAL PHOTOGRAPHER Tom Dunn Photography

7600 Parklawn Ave, Suite 225 Edina, MN 55435 952-831-3300 www.CalhounCompanies.com Andy Kocemba

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

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.

BANK Flagship Bank Minnesota

BUSINESS BROKER Sunbelt Business Advisors

COMMERCIAL REAL ESTATE The Ackerberg Group

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

1300 Godward St. NE, Suite 6000 Mpls MN 55413 Contact: Peggy DeMuse, pdemuse@sunbeltmidwest.com 651-288-1627 www.sunbeltmidwest.com

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

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.

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.

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

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.

UPSIZE SEPTEMBER • OCTOBER 2019

ADVERTISING SECTION

www.upsizemag.com

UPSIZE RESOURCE DIRECTORY computer consulting Intertech

it managed services Tech Guru — The Caring Technology Company

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

612.235.4895 - www.techguru.mn

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.

Tech Guru’s Caring Technology Services offering is built for businesses and non-profits with 25-250 employees that want consistent uptime. By being responsive, collaborative, and security-minded, Tech Guru helps organizations maximize returns on IT investments, minimize technology risk, and achieve their strategic visions.

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.

EXIT STRATEGIES Exit Planning Strategies, LLC

LAW FIRM Avisen Legal, PA

MANAGEMENT & OPERATIONS BCV Consulting

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

Lisa Holter Ankel, shareholder 612.584.3401 www.avisenlegal.com

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

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

FINANCIAL PLANNING Goff Investment Group

LAW FIRM Lommen Abdo

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

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

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.

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.

insurance O’Rourke Agency, Inc.

LAW FIRM Winthrop & Weinstine, P.A.

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

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

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!

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.

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. ADVERTISING SECTION

SEPTEMBER • OCTOBER 2019 UPSIZE

UPSIZE RESOURCE DIRECTORY MANAGEMENT & OPERATIONS Visionary Integrator Solutions

SALES DEVELOPMENT Minnesota Sales Institute

SBA LENDER Sunrise Banks

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

301 – 4th Avenue South, Suite 272 Minneapolis, MN 55415 (612) 789-5700 www.mnsales.com Contact: Scott Plum, Founder

(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.

Minnesota Sales Institute works with business owners, CEO’s and salespeople who are committed to learn, grow and change their selling skills and process to adapt to the current marketplace. We offer full and half day, interactive workshops; onsite classes; individual coaching and executive consulting.

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

UPSIZE SEPTEMBER • OCTOBER 2019

Offering IT development work for less. John Thwing

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

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

SEPTEMBER • OCTOBER 2019 UPSIZE

BACK PAGE Grant to provide technology, finance, social media skills training for Fergus Falls-area small businesses

mall business owners in the Fergus Falls, MN area can get training on various computer programs and social media skills in the next few months due to a $10,000 grant secured by the Workforce Development Solutions division of Minnesota State Community and Technical College (M State). M State is among the largest providers of non-credit training in several fields. The Fergus Falls grant came from the West Central Initiative Business Assistance Program. Most of the time M State officials visit businesses with trainings, but that sometimes leaves out small companies that lack the necessary volume of employees, says Amy Hochgraber, director of business and industry in the Workforce Development Solutions division. She visited with Upsize Managing Editor Andrew Tellijohn to discuss the grant’s impact. Tellijohn: Who will benefit from these training sessions? Hochgraber: The target is small businesses located roughly within one hour or so of the Fergus Falls. Typically, our group at M State (formerly known as the Minnesota State Colleges and Universities System, or MnSCU) goes into businesses and does customized one-on-one training. We go into a number of manufacturing companies or hospitals and we do a training for 15 employees and we charge them a flat amount. Often 36

a smaller business might not have enough people to bring to one of our training sessions. So, it’s really nice to give these small businesses the opportunity to get the same education we’re giving bigger businesses. Tellijohn: What will the grant-provided training cover? Hochgraber: So far, we have six classes planned. Three of them are on Microsoft Excel. We’ll have an essential or beginner level class, an intermediate one and an advanced level class. They’ll meet once a week in successive weeks. Attendees can do all three of them or just show up for one. It’s up to them. Then, in November and early December, it’s more about social media. We’ll do one on being a Facebook page owner, which is an important marketing tool. The next will address creating a social media strategy to help companies develop a tailor-made strategy aimed at driving results. The last 2018 session will cover digital presence, where attendees will assess their current presence and talk about allocating the time necessary to ramp up their strategy. Nothing is set in stone for 2020, but there have been discussions about covering available city, county and regional financial programs and resources that are available for small businesses. We’re working with agencies and organizations like Greater Fergus Falls, Otter Tail County and the Fergus Falls Chamber of Commerce to make those plans. Small business owners

UPSIZE SEPTEMBER • OCTOBER 2019

Amy Hochgraber

don’t always know the resources that are out there, so we’re going to share a bunch of that information. Tellijohn: Is there a cost for this and where would people go to find more information? Hochgraber: We’re asking people for a $20 fee, primarily to ensure they show up. We have a registration form on our website that can be found at the “register for classes” link on our website, which can be found here: https://www. minnesota.edu/wds. Contact: Amy Hochgraber, Workforce Development Solutions director of business and industry at M State: 218.846.3766; amy.hochgraber@minnesota.edu; www.minnesota.edu.

www.upsizemag.com

WE MOVE IN ONE DIRECTION

FORWARD. C O R P O R AT E D E PA R T M E N T C H A I R

DEAN D. WILLER P / 612.604.6633 E / dwiller@winthrop.com

Our Corporate & Transactions attorneys use the law to help you reach your goals for your business. We work with clients at all stages of growth, from business formation to succession planning and everything in between, focusing on creative solutions and practical advice that helps you move your business forward.

Investing in you.

Todayâ&#x20AC;&#x2122;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 member of our bank, and their community. With six convenient locations, and a staff of experts, we are ready to offer our support. Letâ&#x20AC;&#x2122;s talk today.