Solutions to everyday business problems
Ask the experts expert advice from business in vancouver When to make the leap
Keeping employees engaged
Taking the business online
How to use social media
ďƒ˘ And More
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questions At what point do I make the full leap from my day job to my startup? How do I effectively recruit top-quality employees? What should I consider when negotiating a commercial lease? What should I consider when choosing an employee benefits package? Should I let my employees work from home? What do I need to know about hiring a PR company? How do I use LinkedIn to benefit my business? How can I keep my employees engaged in the work they’re doing? What do I need to know if I want to buy a franchise?
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What kind of insurance coverage should I get for my business? How can my established business find new clients? How do I decide which social media to use for our target audience? How can I win back an unhappy customer? How can I communicate significant changes to the company? How can I expand my existing business with new capital? How do I implement boundaries around Internet use in the workplace? What should I consider before selling my business? What do I need to know if I want to take my retail business online? How do I fire someone without causing office disruption? What should I consider when taking my company public? How do I go about putting together a succession plan?
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answered by Alley, Susan Attfield, Beverley Bacinello, Pino Benson, Tom Blair, Josh Blake, Angela Boyle, Beth Brady, Peter Breikks, Chris Brooks, Judy Brooks, Tamara Burgoyne, Doug Campbell, Kael Carlson, Matthew Catliff, Chris Chakrabarti, Robin Chatry, Pamela Codrington, Christian Cubelic, Daniela Davies, Natasha Netschay Dennis, Drew Fox, Bruce Frost, David Gibson, Shane Hamilton, Neil Hellyer, Nikki Inglis, Kim Jeffrey, Kevin Kassardjian, Chris Klein, Eugen Kusmer, Frank Laberge, Paulin
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Labistour, David Landes, Tara Lee, Ed Livingstone, Hugh Lohmeyer, Juanita Maedel, Cori McLeod, Kevin Nakamoto, Cheryl Olson, Lindsay Parrish, Michael Pau, Cissy Peters, Basil Prevost, Roy Reder, Sandra Robertson, David Roney, Cynthia Roy, Evaleen Jaager Samuel, Alexandra Sihota, Don Steeves, Guy Steeves, Rosie Thomson, Lindsie Walker, Matt Walsh, Fiona Ward, Michael Ward, Ryan Waters, Nathan Wertz, Boris Whalley, Joanna Willcocks, Jonathan Wimperly, Tracey Wood, Simon
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Solutions to everyday business problems
ASK THE EXPERTS EXPERT ADVICE FROM BUSINESS IN VANCOUVER WHEN TO MAKE THE LEAP
KEEPING EMPLOYEES ENGAGED
TAKING THE BUSINESS ONLINE
HOW TO USE SOCIAL MEDIA
‚ AND MORE
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Ask The Experts 2014 is published by BIV Magazines, a division of BIV Media Group, 102 Fourth Avenue East, Vancouver, B.C. V5T 1G2, 604‑688‑2398, fax 604‑688‑1963 www.biv.com. Copyright 2014 Business in Vancouver Magazines. All rights reserved. No part of this book may be reproduced in any form or incorporated into any information retrieval system without permission of BIV Magazines. The list of services provided in this publication is not necessarily a complete list of all such services available in B.C. The publishers are not responsible in whole or in part for any errors or omissions in this publication. ISSN 1205-5662 Publications Mail Agreement No: 40051199. Registration No: 8876. Return undeliverable Canadian addresses to: Circulation Department, 102 Fourth Avenue East, Vancouver, B.C. V5T 1G2 Email: firstname.lastname@example.org
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6 | Ask the experts 2014 published by Business in VAncouver
Gauge your appetite for risk, willingness to survive on minimal income, before starting up Question | At what point do I make the full leap from my day job to my startup?
Doug Burgoyne | Co-founder and president, Frogbox
Paulin Laberge | Entrepreneur-inresidence, BC Innovation Council, and serial entrepreneur
Boris Wertz | Founder, Version One Ventures
his question arose at a critical point in my career with Frogbox. I took a position as a strategy consultant with Telus Mobility the same month that I started Frogbox. The service that we were providing had essentially never been done on such a large scale. Therefore, I felt quite uneasy about investing time and money into a startup without having a salary until the business model proved to work. There are three main questions that entrepreneurs must ask themselves when making these kinds of commitments: •What is my tolerance for risk? •How long can I go on an entrepreneur’s salary (often nothing!)? •How much does my undivided attention increase the probability of success? Risk tolerance can vary, depending on age, family/marital status and what point you are at in your career. Beyond emotional factors, there’s the looming financial query – realistically, how long can you survive with the reduced salary of an entrepreneur? The last thing you want is to feel like you didn’t succeed because you didn’t focus enough on your idea. Some ideas just don’t work, despite how much time and effort go into them. There is no shame in an unsuccessful venture as long as you’ve poured your heart and soul into it. My recommendation is to keep your job, if possible, until you are confident that your startup’s fundamental business model works. Every situation is different, and you need to consider the three questions above. For me, the time was right when our Vancouver location had been open for nine months and we were comfortable that our business was addressing consumer needs.
t depends on how much risk you can tolerate. If you accept Steve Blank’s definition that a startup is a “temporary institution searching for a repeatable and scalable business model” and note that the great majority of startups do not find one, it’s likely that you will never realize a financial return by giving up a paying job to start (or join) a startup. OK with that? Check! Now consider that overnight success for most startups often equates to five to 10 years of hard work. Are you comfortable with the prospect of working a long time for little or no salary? You’re good with that? Excellent! Next ask yourself, how passionate am I about the idea behind my startup? Is the idea consuming every spare moment? Am I boring my friends by taking about it constantly? Do I dream about it? If so, you’ve already made the mental leap, so you might as well make your startup your day job if you can answer yes to the following three questions: •Is my startup solving a big problem that people are willing to pay money to solve right now? •Are there enough people out there with that same problem to allow me to build a really big company? How much revenue will my startup generate in years one, two and three? Is that worth me working 24/7 for the next three years? •Is my idea so unique and powerful that people will buy my solution rather than my competitor’s? Once my cool idea gets out there, can I prevent my deeper-pocket competitors from replicating it and dominating my market? If you’re not emphatically saying yes to these questions, stick with your day job and spend more evenings and weekends refining your idea until you do.
iving up your day job and becoming an entrepreneur is something a lot of people dream about. But before you jump ship and start your own startup, consider these five questions: •Are you truly passionate about your startup idea and would you be excited to work on this business for the next 10 years? •Are you ready to work 12 to 15 hours a day, work most weekends and not take any holidays for the next few years? •Can you give up a regular paycheque and live on a minimum amount of money? •Are you OK living with daily emotional ups and downs? •Are you ready to never give up and to fight for the success of your company whatever it takes? Starting a company is one of the most exciting things that you can do in your life – but also one of the hardest. So if your answer is yes to all five questions above, you are ready to take on that challenge. While it might be smart to do some planning and research on your startup idea while still at your day job, the reality is also that the key to success for any new startup is execution – “just doing it” is the one thing that differentiates the successful entrepreneur from the “aspirational” entrepreneur. So if you feel that you have it in you to be an entrepreneur, then just do it. The best timing might be now, the best entrepreneur might be you.
Ask the experts 2014 published by Business in VAncouver | 7
Finding top talent requires employers to canvass many information sources Question | How do I effectively recruit top-quality employees?
David Labistour | CEO, Mountain Equipment Co-op
Kael Campbell | President and lead recruiter, Red Seal Recruiting Solutions
Simon Wood | President, Swim Recruiting
o attract qualified candidates at Mountain Equipment Co-op (M EC), it is necessary to understand our business needs and what skills and behaviours will be successful. One thing is certain: no single source can provide all the information needed to make a good hiring decision. Successfully attracting the right people involves using multiple sources of information. We cast a wide net when recruiting, using various means: job postings on MEC’s intranet, employee referrals, social media, online job boards, e-card campaigns, the mec.ca/jobs portal and job fairs in MEC stores. Here are some suggestions for your process: •Develop and use precise job descriptions that reflect a true understanding of the role, the skills needed to succeed and the personality best suited to the culture. •Know the key differentiators that inspire the good talent to reach full potential. It’s also important to understand the strengths of existing teams and how they can be improved by adding new skill sets. •Spread the word by posting job openings internally and externally. •Shortlist the best candidates from all the resumés received, matching education, skills, experience and personality with the needs of the job and team. •Phone-screen select applicants with questions that quickly identify the individuals who might fit. •Conduct face-to-face interviews (ideally with one or two colleagues and human resources at the table) with the top candidates using a standard set of questions. •Select the candidate who best matches the job description and meets the needs of the team. References can help inform the final decision.
inding committed, qualified employees is the cornerstone of every business, and what better place to start than with current employees? According to the Society of Human Resource Professionals, employee referral programs are the No. 1 source of hires. When individuals are thinking about finding a new job, they think about who they know and where their friends and contacts work to seek out a new employer. Good referrals from current employees are not only the top source for finding and recruiting employees, they will also help you retain them. Their ability to give a realistic overview of your workplace and support the new employee will be key in successful retention. Another advantage of using employee referral programs is the opportunity to recruit the 80% of the working population that is not actively looking for work. The keys to an employee referral program include: •ensuring your employees have the opportunity to find great referrals such as networking events or giving them access to LinkedIn; •giving them incentives to refer top employees with immediate financial rewards or recognition; and •continually promoting the program through newsletters or during team meetings. Following these steps will ensure finding top talent is at the top of employees’ minds. We have found most of our top-quality candidates at professional education and networking events. Think creatively with your team to ensure they can find referral candidates not only from their personal networks but also from trade shows, alumni and student events or even at the dog park in the summer.
f you have a legal problem you hire a lawyer, if you have a medical issue you go to see a doctor and when you have a hiring need you should go to see a recruitment specialist. In the above cases you would go and see the experts in those fields and even though you will have to pay to use their services, it is usually better than attempting to remedy issues on your own. By partnering with a great recruitment firm, you ensure the hiring process is quicker, a better-qualified candidate is found and, as a hiring manager, less of your very valuable time is used on the process. A win-win-win situation. It is likely that a specialist recruiter will be better networked and have connections to people who may not be actively looking but would move for the right opportunity, and the recruiter will definitely have access to many specialized advertising and networking media. Once you have found a great recruiting firm, there are several things you should do to ensure the recruiter can find your company a topquality employee: •Make sure that the consultant understands the culture of your company. A very wise person once said, “A person is hired on their resumé and fired on fit.” •Understand exactly what this person will be doi ng a nd d ra f t a ver y deta i led job description. •Set a realistic salary range. Your recruiter will have a finger on the pulse of the market and know competitive salary ranges. •Ensure you have enough time to interview thoroughly, ideally back to back so you can compare candidates. •Ask you r recru iter to check references and to really dig into any relevant areas of concern. •Work with your recruiter with urgency as top talent gets snapped up quickly!
8 | Ask the experts 2014 published by Business in VAncouver
Information is key when negotiating a commercial lease Question | What should I consider when negotiating a commercial lease?
Eugen Klein | Commercial realtor, principal, Klein Group
Matt Walker | Principal, Avison Young
Matthew Carlson | Senior associate, Colliers
egotiating a commercial lease requires preparation, knowledge and skill. Failure to gather the right information and plan ahead will result in a long lease commitment that may be costly. Understand your business: Developing an accurate business plan, whether you are a longestablished business or a startup, is essential. For long-time operators it will let you review what you have taken for granted or consider new alternatives. Are we operating efficiently? Do we require high-traffic areas with related tenants nearby? What type of space will be best? Will we need shipping access? How do our customers find us? Market information: Gathering accurate and applicable market knowledge is essential. You need to source completed lease transactions, which will reveal incentives, term lengths and allowances in order to assess what the costs of net rents are for tenants with comparable spaces. Many potential lease space options are not advertised, nor have a sign placed. Ensure you have sourced all the available options. The availability of alternatives gives more choice and better negotiating leverage. Space plan: With new technologies, space planning is becoming a way for tenants to reinvent business, cut costs or enhance customer experience. With this in mind, reconsider how much space is needed, how to configure space or reconfigure it to anticipate future plans. Lease terms: The length of your lease will depend on anticipated growth or quality of location for your business. Lease rate escalations should be considered to offset an average rate expectation of the landlord. Percentage rents are used when landlords and tenants have a combined vested interest in each other’s success. Lease renewals, options to purchase, use restrictions are other terms used to secure your interests long term. Ensure you have considered potential business risks wherever possible.
t is important to consider five principles when negotiating a commercial lease. Pre-negotiation preparation: Partner with experts that may include architectural, interior design, real estate brokerage, legal and tax professionals to ensure that you are equipped with all the information required to make informed decisions and negotiate with confidence. Age and stage of business: Consider the financial strength, operating history and rentable area required by your tenancy in the context of market conditions. Landlords will assess a prospective tenant’s track record when negotiating incentives such as free rent and will typically propose more favourable terms to established organizations seeking larger premises. Environment: Assess the landlord’s need/motivation to obtain/retain tenancies. The vacancy and financing status of a property, tenant activity within the building and marketplace, and the landlord’s own tolerance for risk are all factors to consider when creating leverage. Timing: Determine the best time to start the due-diligence and negotiating process and the best time in the market cycle to enter into a transaction. Also consider degree of flexibility and preferred length of lease term. Strategy for negotiations: Evaluate how best to engage the landlord in the negotiating process. A variety of strategies should be considered, including request for proposal and request for information competitive bid processes, offer to lease and short-form letter of intent. Select a strategy that is relevant to the age and stage of your business and prevailing market conditions and one that will ensure participation from multiple landlords to create a competitive environment. Access to expertise and information, an understanding of the relevance of your circumstances and a clear picture of the environment will enable you determine the optimal timing and strategy for lease negotiations.
ou’ve identified a commercial space that meets your business needs. The next step is to provide the landlord with a non-binding offer to lease, essentially a contract to enter into a lease agreement on certain business terms. Before you start negotiating, it’s important to engage a tenant representation broker who can educate you on the process, market pricing and deal terms. This broker will assist you in drafting the offer to lease and will ensure that your interests are protected. Below are a few key items to consider in the offer: Term: Most landlords will insist on a five-year lease or longer. Ensure you negotiate a term that best suits your business and ask for an option to renew and the ability to sublet. Early access: Landlords will often ask that you pay rent upon taking occupancy. If you plan on renovating, ask to pay rent after the renovations are complete. Rent and inducements: Most landlords will set aside a budget for tenants to complete renovations. Ask how much the landlord will provide within the asking rental rate. Landlord’s work: Ask the landlord to deliver the space in clean, tidy condition and confirm the building systems be delivered in good working order. Subject conditions: Landlords may ask you to sign a binding offer. Ensure the offer is nonbinding by adding subject conditions that allow you to complete your due diligence. After the offer has been negotiated, consult with your tenant broker and lawyer to review the lease document, and make any changes that could affect how you operate your business in the space. If your broker and lawyer support the business terms and lease language, you are now ready to complete the deal.
Ask the experts 2014 published by Business in VAncouver | 9
Identify which benefits current and prospective employees value most QUESTION | What should I consider when choosing an employee benefits package?
Kevin Jeffrey | Principal, Pointbreak Consulting Group Ltd.
Joanna Whalley | Assistant vicepresident, people services, Westminster Savings Credit Union
Ryan Ward | Director, human resources, GRIP Corp.
et’s start with another question: why prov ide a benef its package to you r employees? The honest, and specific, answer to this question will help you determine what to offer, whether yours is a new benefit plan or you are reviewing an existing one. Is it to keep up with competitors? To get ahead of your competitors? Do you feel a need to look after your employees? Do you want to diversify the compensation package? Or any other reasons – as long as the reasons are valid and specific to your organization. Nex t question – who a re my ta rget employees? Once you have those employees in mind, then you can begin to choose the “right” package to offer. If you are hiring a predominantly younger cohort, pension benefits might not be important, but wellness benefits could be. If you are hiring primarily mid-career engineers, orthodontics and life insurance might be highly attractive, but an office ping-pong table might not be. Ideally, you would like to be able to offer every benefit under the sun. However, the cost of this approach is not practical. Traditional benefits packages include health and dental coverage, disability protection, life and accident insurance, and savings or pension plans. These benefits range from very rich to just the basics and can total from 10% to 25% of pay. More specific benefits include wellness plans, critical illness insurance, medical access insurance, mortgage benefits, health spending accounts, employee assistance plans and flexible spending accounts. So is a benefits package a good investment? The answer is a qualified yes – the “right” benefits package is the one that attracts and retains the employees you need to drive your organization forward.
he concept of total compensation package has evolved. While salary is important to remain competitive, a total compensation package offers benefits beyond pay, which can increase an organization’s attractiveness to potential employees. Essentially, an effective package is made up of two primary parts: tangible (salary, incentives and health benefits) and intangible (the nonmonetary aspects, which people are assessing more and more these days). Below are examples of intangible benefits to consider as part of your total compensation package. •An organization’s culture is an important element that shapes work satisfaction, relationships and processes. Providing an environment that is consistent with the values of employees will keep them motivated. •Core values underpin the work an organization does and forms its foundation. For example, employees may view an organization with core values of “integrity, caring, teamwork, innovation” as one that fosters a team-oriented environment where motivated employees thrive. Having a solid foundation of core values is important in acquiring and motivating talent. •Provide employees with personal and career enrichment opportunities by giving them a platform to share feedback, empowering them to make decisions, offering career paths in different business areas and encouraging community involvement by connecting them with philanthropic organizations in their communities. •Employees are also parents, spouses, friends, caregivers and /or volunteers. Offering flexible hours and telecommuting options will help in balancing their work and life commitments.
irst, it is important to take a step back and figure out what your benefit objective is. Then engage your employees, do your research and work with a benefit consultant to understand what is out there and what will fit with your compensation strategy. When designing a benefits plan, I look at four things: employee appreciation, flexibility, cost controls and administration. Employee appreciation: benefits are expensive and should be considered part of an employee’s total compensation. If employees do not recognize the value they are receiving, either education is required or you are not offering what your employees consider important. Flexibility: different employee groups are looking for different things out of a plan. Having some choice in your benefit plan, even if the choice may increase an employee contribution, will be beneficial in the long term. Cost control: certain elements can be built in to ensure the plan will be sustainable and not too expensive on renewal. Several things to consider include: •Going to a fixed-dollar contribution amount rather than a percentage. This way the company contribution can stay fixed when increases are incurred. •Having a dispensing fee – a consumptionbased fee will ensure the heavy users are paying their share. •Building a health-care spending account into the plan that can be adjusted based on the overall cost or experience ratio. Administration: the time to administer the plan, pay the bills and sign employees up is often forgotten when designing the plan. Understanding what tools the benefit providers have to ease administration or how to set up a plan to fit your own internal systems will save money and time in the long run.
10 | Ask the experts 2014 published by Business in VAncouver
Workplace flexibility pays off in better productivity and higher job satisfaction Question | Should I let my employees work from home?
Evaleen Jaager Roy | Principal, Jaager Roy Advisory Inc.
Cheryl Nakamoto | Chief, People Progress Potential, McNeill Nakamoto Recruitment Group
Josh Blair | Executive vice-president of Human Resources, Telus
hat do 3.6 million lucky Canadians have in common? As of December 2010, according to Stats Canada, that’s how many of us have the shortest commutes of all: from bedroom or kitchen to home office. The most common reason for working at home – cited by 25% of those employees – is that they’re required to by their employer. Interestingly enough, employers are finding that productivity increases, as does workplace satisfaction, when employees have this flexibility. Added to this are the societal benefits of an improved environment with fewer cars on the road, better use of expensive office space and easier job access for working parents who often require some flexibility. For a decade, I was an HR executive at Electronic Arts. With a young, competitive, supertalented workforce to motivate and retain, we were early adopters of workplace flexibility. I always found that employees with this flexibility were more focused, productive and happier than counterparts in other companies where workplace flexibility was a foreign concept. But here’s another thought, particularly for executives: how often do we feel that in today’s 24/7 business environment, time for planning and reflection – or indeed for strategy and big picture – simply isn’t there as we all react to the constant round of fire-fighting, travel, meetings, emails, texts and tweets? For me, corporate sanity often depended on carving out the occasional day where I could catch up on the big important items without the constant interruptions at the workplace. As a working mom, the added benefit was throwing in a load of laundry – good multitasking that instantly made me feel even more productive.
lexibility, cost savings, no commuting, increased retention, fewer personal/sick days and increased productivity are some good reasons why we should let employees work from home. But what about the question of productivity? I’m still not sure of that answer, but I believe offering employees the option of working from home depends on the position, person and how much you want to influence your company culture. We all know that working from home will allow employees flexibility and some will take advantage of their situation. But some employees are so disciplined that they give more to their employer. They set themselves up for success by minimizing their personal disruptions at home. So as an employer I could benefit even more by giving this employee flexibility to work from home. Allowing your employees to work from home really depends on your company and the roles within it. You really need to set up the situation well by having clear objectives about role duties, how and when to communicate, measurable goals and instituting an audit system. At McNak, we have two positions that could allow a person to work exclusively from home. Ironically, these employees choose to work at the office knowing there is flexibility to work from home for some emergency cases. They like to be around our office “buzz” and say our corporate culture is one of the driving forces that makes their work so enjoyable. When they do work from home, they find that it is isolating, is difficult for communication and leaves them feeling disconnected from the team. They miss the office dynamics. In the end, allowing for a flexible work schedule must work for both parties, but use it with caution because it could negatively affect the company’s results and ultimately its culture.
he short answer is “yes” in many cases. Supported effectively, working from home provides a variety of compell ing benefits to employees, employers and the environment. Telus has conducted research that demonstrates teleworking increases employee performance anywhere from 10% to 50%. It’s not just about enabling employees to work at home in every case, but rather allowing employees to work where it makes sense – in the office, at home or a combination that suits them and their leader. More flexible work schedules help employees stay healthy and productive by promoting practices that enhance their work-life balance. Teleworking can save the at-home employee about 160 hours in commute time each year and saves personal costs like gas, parking, insurance, transit passes, restaurant meals and dry cleaning. The resulting increase in engagement/commitment also helps employers. They can better retain and recruit employees, a critical factor in the “war for talent.” It also enables savings in respect of real estate costs. Reducing commuting time and real estate requirements also reduces our environmental footprint – up to 3,000 kilograms of greenhouse gas a year per full-time teleworker. Furthermore, working from home relieves strain on transportation infrastructure, including roads and public transit systems. To effectively implement telework, you need to equip employees with technology like smartphones, Internet connections, videoconferencing, instant messaging and social media. Today, more than half of the Telus team has the ability to work at home. Within the next few years, our goal is to have 70% of our team working from home or on a mobile basis and 30% working full-time in our future-friendly offices.
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12 | Ask the experts 2014 published by Business in VAncouver
Connections, fit and cost are key in securing a PR firm to tell your company’s story Question | What do I need to know about hiring a PR company?
Michael Ward | Vice-president of Grosvenor Americas
Beth Boyle | Co-founder, Talk Shop Media
Drew Dennis | Executive director, Out On Screen (Vancouver Queer Film Festival and Out in Schools anti-bullying program)
n business, building a strong and lasting reputation is essential – but a trusted relationship doesn’t always come easily. Here are a few things to bear in mind when considering reputation management. •Media connections: An experienced agency should have established relationships with key media across a variety of mediums. For example, it should know the most effective angle to pitch the appropriate media to get your brand in the most targeted publications, all to communicate your story to the right target audience. Furthermore, it is important these connections are in the right market. For my company, as Grosvenor places greater focus on Calgary, it’s important the agency is fluent in both B.C. and Alberta media. •Industry expertise: While strong media connections are important, industry expertise is arguably as imperative. A firm that is experienced in your type of business will be able to propose more creative opportunities to communicate your story and can draw on past experience to identify winning strategies. When it comes to real estate PR, strong knowledge and comprehension of the state of the market are also essential and so is an ability to speak the industry “language.” •Culture fit: As an extension of the internal marketing and communications team, a firm that mirrors or is compatible with company culture will find greater synergy. Is your company a bureaucratic, gradual decision maker or an entrepreneurial risk-taker? A well-matched agency-client relationship will ensure expectations are better managed and met. However, it is most important to work with a firm with unwavering enthusiasm. PR can be a slow burn, and remaining optimistic is essential.
y PR firm has created its own criteria to determine what customers we will engage. It catches people off-guard to learn that Talk Shop Media turns away more than 70% of new business. But the highest performing PR teams are typically the most discerning, and you want to be equally discriminating about who will represent your company. At the top of your PR considerations, spend time learning about the person driving your account. Often a partner or senior representative will sell his or her services – but this does not always mean you will work together. Dive into who will be your PR advocate and account leader and what they can deliver. Can they offer a list of active clients to comment on delivered coverage and service? What are some recent PR successes? How do they measure PR value? And, most importantly, do they understand your company’s objectives, ask informed questions and offer customized strategies to get you where you want to go? Cost is also a major consideration when looking to hire a PR firm. Take time to interview to get a clear sense of pricing and deliverables. PR agencies can’t guarantee media coverage. But they should be able to manage your expectations on PR deliverables. In terms of cost, you will likely be faced with one of two pricing models. The first offers a flat monthly retainer for an outlined work schedule. The other relies on hourly billings and/or calculates the billable rate of the people supporting on your account. Finally – fit. Make sure the firm you are looking to hire is a fit with the image and culture of your company. As frontline public communicators, you want to work with someone who represents your business better than you. Hire only when you are 100% confident in your PR firm’s ability and connection to your company.
eality check. We are living in a consumerdriven world saturated with advertisements. More and more people are seeking their news in bite-sized portions. And, according to Revenue Canada, the number of charities in Canada has more than doubled in the last 40 years as we strive to meet the changing needs of Canadian society. Now more than ever, it’s important to be smart about two things: how we tell our stories, and how we invest scarce resources. Working with a PR agency can take care of both of the above. Correction: working with the right PR agency. Not unlike any other hire, cultural fit is key. We look to partner with an agency that shares our values and is able to work alongside our team. We take a cross-functional approach to many projects, and we expect our PR agency to build relationships throughout the organization, beyond the traditional agency-tomarketer reporting relationship. A good PR agency: •brings expertise outside your field and fresh perspective, avoiding “bubble” thinking; •participates in strategy sessions; •is expert in social media; •can respond immediately with crisis management, if needed; and •shares your values and is a good cultural fit. Once you’ve found the right fit, sit down with your PR agency to determine an appropriate retainer that suits your budget. Together, develop service-level agreements and check in monthly to ensure they’re on the right track. Now your team is ready to start telling your story in a way that will stand out.
Ask the experts 2014 published by Business in VAncouver | 13
Most business people are failing to realize LinkedIn’s full potential Question | How do I use LinkedIn to benefit my business?
Shane Gibson | Co-author of Sociable! and Guerrilla Social Media Marketing and chief social officer of Socialized! Ltd.
Alexandra Samuel | Director, Social and Interactive Media Centre, Emily Carr University
Natasha Netschay Davies | Director of digital and social media at Peak Communicators
ith 135 million members representing every Fortune 500 company across 200 cou nt r ies a nd ter r itor ies, LinkedIn is the world’s largest social network for professionals. It’s growing at a rate of two people per second globally. Unfortunately, few people who join LinkedIn are realizing its full potential. Most still see it as a place to post your generic résumé online. LinkedIn can be a powerful tool for building your network and gaining strategic business insights. Here are four tips for ma ximizing your LinkedIn opportunities: •Have a complete profile. This means including a full work history indicating where you have worked, plus your specific contributions, successes and unique experiences. •Use LinkedIn Signal. This allows you to quickly search your entire network for key phrases or topics. More importantly, the search extends past your third level of connections, which exponentially increases your capacity to gather business intelligence and forge new connections that you wouldn’t be aware of otherwise. •Participate in and monitor the discussions of LinkedIn groups that your clients and prospects belong to. It will give real-time insight into their challenges and goals of their business, while providing an opportunity to build rapport and engage in a two-way discussion. •Prior to attending an event, meeting or presentation, review LinkedIn profiles of any key people. Quite often, you will discover common connections that can give you the right insights to close a deal, forge a new relationship or solidify an existing one.
inkedIn can be a powerful tool for growing your business, if you know how to use it. Many companies use LinkedIn to find potential hires, either by posting job opportunities or by asking their LinkedIn networks to suggest potential employees. But there are lots of other ways you can use LinkedIn to build your team and your market, if you know how to use it. I like using LinkedIn questions to ask for recommended vendors or experts or, conversely, to answer questions that position me as an expert in my field. But the most frequent way I use LinkedIn is to find new potential customers or partners. If you know who your typical buyer is, you can find potential customers in any industry or city. Search LinkedIn for people with a current job title or department that reflects your usual buyer – for example, “finance”, “marketing” or “procurement.” Filter your search by seniority level so that you’re only looking at people who are (for example) director level or VP level, or add the term “vice-president” to the keywords in your search. If you sell to a particular vertical, filter by industry or add relevant terms to your keywords like “retail” or “publishing.” You can use this technique to find a potential buyer within a specific company if you add that company’s name to your search. Look for people who are second-degree connections (i.e., who know someone you know) or third-degree connections (i.e., who know someone who knows someone you know). Introduce yourself directly (Google to find an email address for third-degree connections you can’t reach via LinkedIn) or better yet, ask your common acquaintance to make the introduction.
hile LinkedIn is known as the online networking hub for professional job seekers and recruiters, it’s also a lead generator for new clients. A social business strategy should include professional and company profiles. This will enable you to use the network’s engagement tools. Think of LinkedIn as the online version of an industry conference. In between keynotes and workshops, you network with peers, share feedback, trade business cards and Twitter handles and maybe confirm new business meetings. You can do the same on LinkedIn. It begins with researching companies, people and groups that are related to your business and then connecting with them. Your objective is to position yourself or your business as an industry thought leader. Here’s how. •Update your profile (or company page) with insights on industry news (links to articles, events you’re attending) and new products. •Join industry groups with active business dialogues relevant to your business. Participate as much as you can and share only a unique perspective. Groups offer you new connections to potential clients or those that might introduce you to them. •Start and moderate a group on an industry issue that you’re passionate about. Search for dream clients, target decision-makers, and invite them to join the group. •Think keywords – always. Whether describing your company or posting in a group, use words that describe your products, services and expertise in all updates. •LinkedIn’s recommendations feature works like testimonials. Ask customers, friends and industry peers to recommend your products and services. When they do, their entire network sees the recommendation also.
14 | Ask the experts 2014 published by Business in VAncouver
Ensure staff buy into business purpose and have tools they need to succeed Question | How can I keep my employees engaged in the work they’re doing?
Sandra Reder | President and founder, Vertical Bridge Corporate Consulting
Jonathan Willcocks | Founder and president, Pinnacle Pursuits
Susan Alley | Vice-president, human resources, Western Canada, FirstOnSite Restoration
t starts with the bigger question – why are they doing what they’re doing? It’s not about providing pool tables, yoga classes or funky offices. While these may be indicative of your corporate culture, this is not what ultimately engages your employees. Most organizations have not looked at the “why” in what they’re doing as a business for a very long time – if ever. The reason they exist has been forgotten. What’s your purpose– why did you create the business in the first place? It’s not to provide great customer service – that’s a given, not a purpose. It’s not to treat all people with respect – that’s a value, not a purpose. Individuals engage with each other and businesses for one reason: they believe in what each stands for. Some great examples of this are Nurse Next Door – its “why” is “making lives better”; or Cisco Canada, which recently topped the Aon Hewitt Top 50 Employers in Canada survey – its purpose is “changing the way we work.” When an organization can clearly articulate its purpose, it engages the people who have the same desire, purpose and values. The “why” should be woven into hiring and interviews and then throughout the life cycle of every employee. It becomes part of individual and company-wide goal setting, performance reviews and training and development. It’s the compass that ensures that everyone is moving together in the right direction. The “why” is often difficult to articulate; it takes real effort, along with some digging, to get to the fundamental reason of why the business exists. If you’re able to get to this foundational place and ensure your organization is living its “why” in all that it does, it becomes much easier to keep employees focused and engaged. When the work they’re doing aligns closely with the “why,” it ignites a common desire to succeed.
work with executive leaders and management teams from all sectors of business as a group dynamics coach and team-building facilitator. I know that people power organizations, and I have learned the following: •Adopt a team-first mindset. People excel when their work supports open and honest communication, listening, teamwork and accountability. Ensure your team is fully aligned with each other and with clients. This requires listening, understanding, asking clarifying questions and being open to new possibilities. •Have a clear vision and inspired leadership. Martin Luther King didn’t say “I have a plan.” He said “I have a dream.” We all need a compelling vision to create a sense of purpose as this directly affects motivation. •When you focus on passions and strengths, happiness and productivity skyrocket. If your staff don’t love what they do or feel frustrated because they don’t have the skills, look for ways to alter their tasks, teach them the skills or restrategize their approach. •Encourage creativity and challenge. Creativity and challenge innately inspire people to think differently, push boundaries and explore new frontiers. Promote the idea of embracing challenge and celebrate “mistakes,” because they are learning opportunities, and inspire people to keep raising the creative bar, to learn and to grow. •Create goals and incentives together. Studies show that recognition and reward programs work, especially when they’re co-created. Find out what makes your employees tick, collaboratively create goals and encourage and support them. •It’s about the people. Once your staff love working with the people, they will love working for the company. So create time for a team retreat or strategic play day.
t FirstOnSite, we remediate conditions caused by fires, floods, winds, mould, environmental hazards, accidents and casualties. The work is 24/7 and often dirty, hazardous or unpleasant. It takes a special kind of individual to work in our industry. But helping others in their most dire times of need produces unparalleled satisfaction for our employees. But is this end result enough to keep employees focused and engaged every day? Is it enough to make them want to stay? We believe that’s where the leaders of our organization can make the difference. We believe that simpler is better. You have to satisfy critical, foundational needs and build from there. •Ensure employees know what is expected of them. •Provide the tools and resources to do the jobs. •Provide opportunities for your employees to do what they do best. •Try to regularly recognize good work, genuinely care for the welfare of your employees and encourage their development. •Do your employees’ opinions seem to count? Do they feel their jobs are important? The answers must be yes to both those questions. •Do your leaders facilitate your employees to work as a team committed to doing quality work? •Do you provide opportunities for employees to build friendships at work? •Does someone speak with them regularly about their progress? •Do they have opportunities to learn and grow? Test progress regularly through a simple engagement survey based on the above. Whatever the result, you’ll have established a foundation and know where you need to build.
16 | Ask the experts 2014 published by Business in VAncouver
Passion is a vital ingredient for ensuring success with franchise opportunities Question | What do I need to know if I want to buy a franchise?
Bruce FOx | Chief operating officer and VP of development, Browns Restaurant Group
Robin Chakrabarti | Founding partner, RAMMP Hospitality Brands Inc.
Neil Hamilton | Senior property adviser, Macdonald Realty Ltd.
uying a franchise can be easy and complex: easy because there is an established system or brand that has already been test-driven; complex because of the inherent responsibility to understand the strengths and weaknesses of each franchise. Franchising as a business model is more akin to leasing than a purchase. You don’t actually own it. You acquire the rights to use a brand in a certain place, for a certain time, under a certain set of rules, and you pay for these rights. The franchisor owns the brand. You deliver the service or product. You need to determine the demand for the product or service, and you must evaluate the reputation and success rate for the brand. Ask how long the franchisor has been in business. Do they “hard sell” to prospects? Be cautious if they do. Ask how much training will be provided, and if they provide ongoing support. Can you be absent from the business periodically or must you always be on site? Financially, is the franchisor transparent about performance? Will you get access to existing franchisees who will share their satisfaction or discontent? What amount of capital is required to set up the business and what sort of margin is generated after royalties are paid? Are you required to contribute to marketing and advertising costs, and will you have any control over how it is spent? Legally, a franchise agreement gives the franchisor and the franchisee clearly defined rights and obligations to each other. Be sure to engage the services of legal counsel that explicitly understands franchise arrangements, because not all lawyers have such expertise. Do not expect to negotiate the franchise agreement. Finally, ask yourself if you really love the business. Passion makes it all work. The rest is just an access pass.
ithout getting too existential, the most important thing you need to know if you want to buy a franchise is yourself: your level of passion for the industry, the brand and your future customer. Before you spend time wading into the techni cal details of franchise ownership, you must first visualize yourself being loud and proud about your franchise one year, five years, 20 years from today. Business ownership, whether you are creating your own brand or owning a franchise, is rewarding but demanding. Your passion for your business is what will sustain you. Another critical aspect is the franchiserfranchisee relationship. Think of the franchiser as your spouse and envision dealing with your spouse through trials and tribulations over a long time. Your spouse should be supportive, should want your input and should be willing to support you over the long haul. Get to know the franchiser and the personalities. Do they have a track record of success? Are they as passionate as you are? Do you share values? Are they innovative? Are they hiring great people? What is their long-term vision? Transitioning to cold hard cash, you must know and understand the financial levers of your business. How many customers visit and at what average spend per visit do you break even? What are the biggest cost items and who controls them? Which expenses are variable and which are fixed? At what level of sales will you be able to provide yourself a cash return? Test your assumptions for every detail and sensitize your financial model for being both extremely successful and slow. You must recognize that even with superb franchiser support, the business is still owned by you and day-to-day decisions will rest in your hands. For most people this is the fate they want, but before you move ahead, ensure that you really are one of those people.
prospective franchisee’s job is much harder than the franchisor’s. The franchisor is taking the money; the franchisee is giving it. And unless you own at least three franchises, you’re pretty much buying yourself a job, so you must be very careful. Here are the main things to check out. •How long has the concept been around? Are the people behind it qualified, honest, and do they check out? Do they answer all your questions and share information forthrightly? Research them online and see what kind of feedback the public provides on their concept. Any business worth buying into should have been around at least five years to be sure it has “made it.” If less, how many outlets are in the chain? How many are making money? How much? How many have failed? Why? •What is the price tag and what does it buy you? What are their franchise and royalty/ advertising fees? Are these aligned with industry norms? Are their stated margins aligned with industry norms? Do existing franchisees back this up? What is the facility cost and is the build-out marked up? Do they help you negotiate the space lease? Who is on the head lease? •Have conversations/visits with as many existing franchisees as possible, and not necessarily the ones the franchisor steers you to. Perform “mystery shopper” exercises. Sit out in front of one or more locations for a day, monitor traffic, see how they treat their customers and watch customers’ reactions to what they bought. •Have a good franchise lawyer. All franchise agreements are skewed hugely in favour of the franchisor. How does this one stack up? •Lastly, after your extensive research, does this concept appear to have staying power for some time to come? Is it on the cutting edge of its category or on the trailing edge?
Ask the experts 2014 published by Business in VAncouver | 17
Cutting corners on insurance can do long-term damage to your business QUESTION | What kind of insurance coverage should I get for my business?
Michael Parrish | Partner, Fasken Martineau DuMoulin LLP
Lindsay Olson | Vice-president, B.C., Saskatchewan and Manitoba, Insurance Bureau of Canada
Ed Lee | Wealth protection specialist, Vancity Life Insurance Services Ltd.
here are three main types of commercial insurance coverage: (1) insurance that protects a business’s real property, physical plant and other physical assets and inventory; (2) insurance that provides the company (and its employees and others for whom the company may be liable) defence and indemnity from third party liability claims; and (3) insurance that protects the company’s business income in the event of a loss that interrupts cash flow. There are also special policies for special risks, such as construction projects. The company should start with a risk audit that evaluates its assets and operations, its revenue sources and streams and its potential liability exposure to third parties. This should be done with a lawyer familiar with insurance issues and a commercial insurance broker familiar with your industry. It will give the business and its advisers a better understanding of the type and amount of property and income risk. This information will assist the company in obtaining suitable and adequate insurance. While every company watches the bottom line, buying business insurance is not the time to bargain-shop. Less expensive insurance or less insurance, while seemingly a good source of savings when there are no problems, can leave a company under-insured in the event of a loss or claim. This in turn might seriously affect the company’s financial stability and – in the event of a catastrophic problem – lead to insolvency. An experienced insurance broker will help you find the right coverage at the right price. While no company can eliminate all risks, knowing that you have appropriate and adequate insurance coverage will allow you to focus on your business and, in the event of a loss or claim, ensure that you have the insurance necessary to deal with the problem.
he best first step in insuring business is to shop for a commercial insurance agent or broker who knows your type of business – or is willing to invest the time and effort to study it with you. This person can help you identify those potential losses that could cripple your business and insure against them. Depending on whether your business is run from your home or rented premises, you may or may not need building coverage. However, virtually all businesses need stock or equipment coverage. Any vehicles used for business should also be covered. You should also have liability insurance, whether home-based or not, because you could be held liable for any bodily injury or property damage resulting from a business interaction. If you act as a consultant or provide professional services, you should have “errors and omissions” or professional liability insurance. Ensure you have business interruption insurance. This is usually an add-on that would cover your earnings during the period of a shutdown (e.g., riots, strike, fire). And always make sure your policy is current. In terms of your business property, in addition to perils such as fire and theft, water damage is one of the major causes of loss. Different insurance options may be available, so check with your insurance professional. Active prevention works to control insurance costs. Some ideas you might consider: •installing approved sprinklers, intruder alarms and fire alarms; •securing all doors, windows and skylights tightly; •securing storage and other low-traffic areas; •isolating flammable materials and disposing of waste materials properly; and •leav i ng some l ights on overn ight or at weekends.
amilies need a financial plan to secure their future and protect loved ones experiencing emergencies. Likewise, business owners need to protect their businesses. Using property and casualty insurance protects the place of business from liability and disasters like fire, theft or floods. Business interruption insurance offers important coverage for the business, too. These plans require an experienced insurance professional who understands your business and what risks may be involved. Unlike employees, business owners typically do not have group coverage for life, disability and medical benefits, yet they still need to seriously manage their and their families’ health risks. Business partners should consider life, disability and critical illness insurance plans. They also need key-person insurance for the business, so that if a key employee or partner becomes disabled or dies, the business can continue. A low-cost term life insurance plan can fund a buy-sell agreement. Tips when using life insurance for this include getting policies in place before key shareholders develop any health problems; making sure policy values keep up with increases in business value (review the policy amount regularly with your adviser or index it at a predetermined rate); specifying who is entitled to any excess insurance proceeds in your buy-sell agreement; and weighing owning the policy corporately or personally. A common question is whether term or permanent insurance is more appropriate. Some term plans are much more flexible and convertible and renewable policies are guaranteed to renew at a published rate, once they’re approved. Because that renewal rate is usually quite high, converting them to a permanent universal or wholelife insurance plan might be better if you need the policy past your renewal date. Permanent plans also have the potential for tax-advantaged income in retirement.
18 | Ask the experts 2014 published by Business in VAncouver
Seeking new customers is good, but servicing existing clients should not be overlooked Question | How can my established business find new clients?
Fiona Walsh | CEO, FM Walsh and Associates
Tara Landes | President and founder, Bellrock
Pamela Chatry | Business strategist, Pamela Chatry and Associates, and executive managing director at eWomen Network
inding new clients is simple if you follow these rules consistently: 1. Decide that you really are going to find new clients – that this is a key strategy for your success. Stop making excuses for why you haven’t gotten around to it. 2. Figure out who your new target customers are. Get to know as much about them as possible – what they read, how they make their buying decisions, what need they have that your company can fill. 3. Build a strong marketing message around why people should buy your product. This is based not on what you think but on the research you have done. 4. Get people talking, get them to know your name. 5. Create an interesting website – 80% of people will look at a website and make their short list long before they talk to you. A bad or merely boring website will sink you every time in this competitive market. 6. Come in from the dark and get involved in social media. Pick one tool your target customers use the most and use it effectively. Hire talent to do this if you cannot. 7. Give clients excellent customer service and thank them for doing business with you. There is no downside to having outstanding customer service. 8. Reward existing customers well and consistently for sending clients your way.People like to help others, and if they get a reward, more referrals come your way. 9. Collect testimonials from happy customers – put them on your website. 10. Reach out to clients you haven’t done business with in a while. Most importantly, follow up with all leads for new clients quickly as they come in. Speed impresses people and makes them more likely to want to buy from you.
o something. There are many strategies for finding clients – approach new markets, offer different services, create a unique product or enter a geographic region you’ve never tried. While business leaders spend a lot of time thinking about what to do, only the act of doing – trying new things, or trying old things in a new way – will generate returns. If you do something (sometimes anything) differently in your business, you will get different results. For those who like more guidance, try these actions: Identify five prospects (five minutes): You’re probably going to make some mistakes with your approach, so don’t pick your best prospects; just pick five in a segment or geography that you’d like to explore. This is a quick Google search. Don’t overthink it. Identify a method for meeting those prospects (five minutes): Join their associations. Find them at trade shows. Look in your LinkedIn network. Heck, call them. Identify a goal for those meetings (five minutes): Figure out who makes decisions and how, and make a plan to reach your goal. Execute on that plan by a deadline (four hours): If you are the only person taking on this challenge, set a public due date so you’re more likely to get it done. If you have many people in your organization, assemble a team so you can run multiple experiments simultaneously. Learn (one day): You tried one method five times – now decide whether it works. Run the prospecting experiment a few more times with different methods in step No. 2 and discover the best practice for you. As it turns out, the hard part isn’t figuring out what to do, it’s getting people to do it. What’s holding you back?
he joy of having an established business versus a startup is that you already have customers. Let’s start with a reminder – 80% of our business comes from 20% of our customers. We can build our business by searching far and wide for new customers, but it’s so much easier and less costly to “go deep.” How well do you know your best clients – those who spend the most money or who frequent your business regularly? Build a personal relationship with them. Stay in touch with them and let them know you rely on them for opinions as well as feedback. Satisfied customers are our best source for new business. The key is to establish a strategic plan for taking care of your customers: Step 1: Make the sale Step 2: Follow up in a timely manner. Call and ask how their experience was. Do they have any questions, concerns or suggestions? Thank them for the business. Step 3: Send them a thank-you gift – and include a handwritten card. Step 4: Ask for the referral. Contact the customer and ask how the new product is working out, and don’t hesitate to ask for a referral. According to Attracting Perfect Customers by Stacey Hall and Jan Brogniez, say, “I only want to work with people just like you. Do you know of anyone that I would enjoy serving through my business?” Ask if they would make an introduction. Honour them with a huge thank you! They have made you money and reduced your advertising expenses. Remember, we all want to deal with businesses that we like, know and trust. You have already established these values with your existing customers. They will pave the way for you with new relationships and plant the trust seed in the minds of potential customers.
Ask the experts 2014 published by Business in VAncouver | 19
Companies must know why they’re using social media and which audience they’re aiming for Question | How do I decide which social media to use for our target audience?
Tamara Brooks | Partner and CEO, October 17 Media
Nikki Hellyer | Director of marketing, Future Shop
Chris Breikks | President, 6S Marketing
hree key things to consider: 1. Demographics. Facebook users generally fall between 25 and 44 years old; Twitter pretty much works for any age group. Pinterest is mostly for females 24 years and up, while Google+ is the opposite, made up mostly of high school to university males (usually techies). LinkedIn favours business professionals 35 years or older, but lots of young people have started to get on it, too. 2. Online behaviour. Once you’ve zeroed in on your target market’s demographics, think about what they do online. Home buyers/sellers spend hours browsing property photos and videos, so if you’re a real estate agent then it might be good to invest in a Flickr or YouTube account. Shoppers tend to look for inspiration in the form of blog posts or images online, so Pinterest would be a great investment for retailers and shopping centres. For municipalities (a huge chunk of our client list), Twitter and Facebook are a pretty powerful combo. Why? Citizens get real-time announcements or alerts through Twitter while establishing a sense of community with their neighbours on Facebook. 3. Quality versus reach. You don’t need to restrict yourself to the bigger social media networks like Pinterest or Facebook. There are niche communities out there, which may be a better fit for your audience. Remind yourself: quality beats quantity when it comes to social media. A strong online presence doesn’t mean being on every channel. One of the most common mistakes we’ve seen businesses make is to create a Facebook or Twitter account simply for the sake of having one. You should start an account only if it has a role to play and stick to one to three social networks that best fit your brand strategy and resources. Otherwise, you’ll end up with an inactive page and frustrated fans.
or us, social media has become an effective real-time marketing vehicle – one with significant reach – and it’s become where consumers can engage with our brand. We’re focused on maturing our presence on Facebook and Twitter and have championed the use of these both internally with our staff (e.g., customer service, merchants) and externally with our vendor partners. We use them to communicate product launches, offers, sales events, etc. – in real time, ahead of traditional media. They also help us engage customers directly on issues around their shopping experience. We are constantly testing new things like Facebook ad units (e.g., sponsored stories), Twitter ad units (promoted Tweets) and establishing our footprint on new social networks like Pinterest. Social media is changing daily, and so we’re always adjusting to see what fits our business best. The most important lesson we have learned has been figuring out the organizational structure to make social media sing for our company. Additionally, figuring out the intent for each social network because not all businesses need to be active in all social spaces. The secret to social media is that there is no secret: focus on serving and delighting your audience, earning their attention and trust along the way. Don’t chase arbitrary fan counts or the next shiny thing. If your staff isn’t going to take part in whatever initiative, don’t expect customers to. We expect our tech-enthused, informed and approachable persona to stay – but our tactics will evolve depending on the feedback our customers provide daily. We foresee that our use of social media will cascade to a wider user base internally and real-time advertising will become a more significant part of our mix.
irst, you need a social media strategy or a clearly stated plan that identifies what you hope to achieve. With Facebook, Twitter, YouTube, Google+ and LinkedIn, you might interact with people to develop relationships with them and your brand, not necessarily to drive them to your website. If all of your interactions are focused on driving people to your website and trying to sell them stuff, you will quickly alienate your followers. You can still gain customers and use direct response on social media, but in the form of advertising. Facebook has a fantastic ad program that allows you to target specific demographics, including age, sex, geographic location and interests. Twitter’s promoted tweets also allow you to expand your reach on Twitter beyond the audience that follows you. LinkedIn also has terrific advertising options that focus on business-to-business advertising and, of course, Google and YouTube have very advanced advertising opportunities that can help deliver customers to your door. Content creation should be a major part of your social media strategy, and you will need to have resources producing some or all of the following: blog posts, tweets, Facebook updates, videos, photo galleries. But most people get stuck on publishing content, you will also need to have a concise listening strategy to monitor who is talking about your business and/or industry and identify who you should be engaging and interacting with on social media. Beyond Google Analytics, you will want to use a social mediamonitoring tool like Radian6. You need to have a presence on all social media channels, but how much time and resources to each you need to allocate is the real question. Facebook, Twitter, YouTube, Google+ and LinkedIn are key. Pinterest might also be in that category.
20 | Ask the experts 2014 published by Business in VAncouver
Disgruntled customers can be turned into advocates for your business QUESTION | How can I win back an unhappy customer?
Roy Prevost | Retail consultant
Tom Benson | Chief experience officer, WildPlay Element Parks
Guy Steeves | Regional development director – Western Canada, Constant Contact
f you are the cause of the unhappiness to the customer, then there is a time-tested strategy to approaching this customer and inviting them back into the fold. First, you should be well prepared with your responses to any questions that might occur during the conversation. As an example, drawing up a history of the unsavoury experience (in writing) will clarify it in your mind as well as providing you with some confidence when you are talking to the customer, either face to face or by phone. Next, begin the conversation by saying, “Mr./Ms. (name), this is (your name) from (your company) and I am calling to address the issue you have had at our store. Do you have a few moments to discuss it further?” You begin by apologizing for the misunderstanding and reminding the person how valuable they are as a customer and saying that you would like to take measures to regain their trust. If they begin to vent their frustrations, remain silent until they are finished, even though you might be tempted to intervene and fix the problem. If you do this, you lose! You will intuitively know when the person is finished venting; at that point you can say, “What would it take to resolve this issue to your satisfaction?” It is my experience that, many times, the client simply wants to be heard. Finally, your goal is to help mitigate the client’s unhappy experience, voice your appreciation for their past business and invite the customer to come back to your place of business. It doesn’t work all the time, but at the very least you have reached out and attempted to resolve the issue and have demonstrated good faith.
ere are six questions we use to watch for, and win back, an unhappy customer. What are the warning signs? Tools that give customers a safe way to send feedback – such as guarantees you can be called on, and online suggestion forms – are a simple way to collect information and respond before customers share a negative story with others. What is the real problem? Solutions are likely to be ineffective without understanding why a customer is disgruntled. Don’t fear the truth. Observe, listen and identify the core issue. Stuff happens – what’s expected? Luckily, most customers’ demands are not too complex; dissatisfaction simply indicates a gap between service delivery and expectation. Determine how best to bridge their opinions with your interests, then ask what’s the least it will take to exceed their expectations. How do we take action? Take their issue personally – but act professionally. We address the original issue and take responsibility, then engage our guest in figuring out a solution that is best for them and fair for our business. It’s easy to get defensive, but quoting policy, overexplaining or playing down the situation will only solidify the customer’s resentment. How are we doing? In measuring customer sentiment, strive for 100% feedback – and 0% complaints. How do we do better? Look to your values. If you strive for a culture of quality, then caring about customers comes first. Commit to service delivery standards at every touch point, and be accountable. Want to take things to a higher level? Ask tough questions, and ask often. People will tell you how to make them happy. With these questions, we get to decide to be right, or build relationships; to recede into obscurity, or exceed and win back a believer. Choose wisely – and be your own happy customer.
ocial media has changed customer relations forever. Facebook and Twitter, along with consumer review websites and local online directories, give customers a megaphone for their views. While you can’t control everything consumers say about your business, you can control the quality of your products and services – and the customer experience. First and foremost, focus on offering the best experience possible to all of your customers and you’ll be one step ahead in the customer satisfaction game. As the same time, be open to the comments offered by customers, positive and negative. Listen to what people are saying about your business and engage them in a two-way conversation. Let them know you’re listening and that their opinions matter. How you respond to an unhappy customer is going to vary, depending upon the specifics of a situation. While you don’t want to have a knee-jerk reaction, you do want to try your best to quickly address a problematic situation and create a dialogue. In some cases, offering a refund might be in order, but oftentimes offering a quick fix to the issue at hand or a thoughtful explanation as to what went wrong will be enough. You could also consider offering a discount on a future product or service as a way to say “Thanks for sticking with us.” Whatever you do, make sure you acknowledge the issue at hand, show that you understand and appreciate their perspective and ensure that whatever resolution you select, it’s confident and well executed. That not only helps calm an upset customer, it demonstrates to every other customer that you’re accepting responsibility, which is something everyone can respect. When handled well, you can win back customers you would have lost and even turn them into advocates because of how well you addressed their problems.
Ask the experts 2014 published by Business in VAncouver | 21
Harbouring assumptions will sink your communication ship Question | How can I communicate significant changes to the company?
Juanita Lohmeyer | President and founder, Forward Strategy Group
Tracey Wimperly | Associate, Tekara Organizational Effectiveness
Beverley Attfield | Director of marketing and communications, Omicron Canada Inc.
enry Winkler said, “Assumptions are the termites of relationships.” This applies equally to our relationships throughout the company. When it comes to communicating significant changes, don’t assume your colleagues understand anything about the initiative beforehand. Even after you have communicated it, through one medium, people still need time to absorb, ask questions and hear it again. If you think you have communicated something effectively, do it a few more times in a different way. It may seem like over-communicating, but people don’t always hang on our every word … really! Key steps: Get them on your side early •Appoint someone as communication plan owner. •Involve key change champions, such as executives, steering group members, influential front-liners. •Be forthright about potential issues. Easy does it •Release information gradually, step by step, to allow people to digest it. •Be persistent and consistent to let it sink in. •Fo l l o w u p a n d c o n f i r m t h a t p e o p l e understand. Variety is key •Determine your audience makeup and cater to different styles. Try email, face-to-face, phone calls, newsletters, workshops, social media, videos, etc. Keep running past the finish line •Ensure continued communication before and throughout the launch, including addressing challenges. •Communicate lessons learned. •Recognize and celebrate success. Follow these tips to ensure your company transitions run smoothly. You may even get the Fonz thumbs-up and “Ay” from your team.
hen organizations impose change on employees, they are taken out of their comfort zones and experience a gamut of emotions ranging from curiosity and suspicion to fear. People struggle with change when they feel controlled and have no say in changes that affect them. What they need is information to sort through their thoughts and emotions. Organizations that manage change successfully recognize they need their employees to help get them from the current state to the future, envisioned state. And they know employees won’t jump aboard the change train until they have answers to these critical questions: how is the change going to affect my life and will I have any opportunity to influence decisions? A change communication strategy spells out the approach and methods that will be used and defines such elements as key messages, who has responsibility for delivering what messages and what communication channels should be used. Communicating change is a leadership responsibility: it cannot be delegated. Senior management must use their power to convey a sense of purpose, energy and direction. They must motivate and inspire employees to trust them as they ask them to step into the unknown. Supervisors have a vital role in communicating change, too. All research shows that employees prefer to hear about changes from their immediate supervisor. The line manager is the person to whom the employee will turn to “shorten the line of sight” between the change initiative and what it means to them. A change communication plan isn’t the only ingredient needed to guarantee successful change, but the lack of one will almost certainly guarantee failure.
hange is often a complex and difficult undertaking and if not properly communicated, it can be much harder to reach a successful outcome. Effective communication is a powerful tool with which to implement and support change initiatives, and it can be achieved by employing these five Cs. •Clarity: Be clear and honest about what the change entails and how this will impact the organization as a whole as well as departments, teams and individuals. Keep your communication direct and concise, with emphasis on critical components, timing and purpose. Use simple language to cut through the clutter. •Consistency: Ensure that key messaging and associated actions are consistent. Centralize message creation and then deploy through key channels such as human resources, marketing and operations so that every part of the organization receives the same information at the same time. All change leaders should be briefed and prepared to speak and act consistently. •Connections: Encourage connections between individuals, teams and departments. Embrace change by introducing ways for people to identify with the change, such as creating an intranet or blog to invite discussion and participation. This builds trust and culture, which can result in a smoother transition. •Champions: Identify key individuals who will be champions for the change, and empower them to speak positively and regularly. Creating a positive environment for change can be achieved by key individuals at all levels across the organization. •Continuity: Keep communicating before, during and after the change. Change does not always proceed according to plan, but continuous communication will help dispel inaccurate information, reduce uncertainty and maintain focus on the goals.
22 | Ask the experts 2014 published by Business in VAncouver
Raising capital requires passion, diligence and an impeccable business plan QUESTION | How can I expand my existing business with new capital?
Kim Inglis | Investment adviser and portfolio manager, Canaccord Wealth Management
Nathan Waters | Director of operations, Small Business BC
Chris Catliff | President and CEO, Blueshore Finance
aising capital in the equity markets is one way of expanding your business. It provides the funds necessary to move your company into the next growth phase and offers a means for securing ongoing capital through subsequent financing rounds. The added liquidity helps the company in valuation terms and can potentially improve brand value by enhancing the business’ overall profile. And you can gain from the business expertise your investors bring. Raising capital is an eye-opening yet enlightening process. It is quite intensive, but it can help your long-term success because it forces you to analyze your business plan critically and get it perfect. A corporate finance group will not consider you unless you’ve got a comprehensive business model, complete with detailed financial projections and revenue models. Your management team must have the expertise to help you hit your targets and ensure proper execution of processes such as cash flow. And you must show you have the drive to put your plans into action. If you cannot, you will have problems attracting investors. Raising capital is an important decision requiring careful thought. How much are you prepared to give in return for the investment? Does it involve seats on your board or handson participation? How long will the arrangement last and how is it concluded? The more questions you consider and resolve, the better equipped you are to get a good deal. You might also consider using an expert to help you. At the end of the day, additional capital can help launch your business to the next level. The devil is in the detail, so it’s important not to focus solely on the capital itself. The focus should be on ensuring funds are allocated to fully maximize your business plan.
inancing your business expansion is all about finding the lowest cost of capital possible. Because interest rates are low right now, banks and credit unions are one of the best bets for expansion funding, as long as you have positive cash flow and are not currently overleveraged. If you’re looking for a small loan, you may find that microloan programs at credit unions like Vancity are perfect. In addition to your credit score, they tend to also look at your contributions to the community. While seeking financing, however, be careful how many credit checks you receive; your credit rating can take a hit if you have too many. If you are overleveraged on the borrowing side or you have a poor credit rating, then your best option could be equity financing or personal loans (a.k.a. love money). Equity financing is great for those who are expanding into an area where they lack experience. Bringing on partners with the right skills can be the key to successfully expanding your business while also providing you with financing. A third option it to research the availability of government and NGO funding opportunities. Visit www.canadabusiness.ca and use the search tool in the financing section, but keep in mind that this can involve a lot of time and work to find funding that’s right for your business. Finally, research the costs associated with the different forms of financing that are available to you. Look at all of your options and how they affect your cash flow before you make a decision on the type of financing that’s right for you.
t is essential to first examine your operation with a detached, objective internal and external view. Behavioural finance teaches us that emotion often plays a significant role in decision-making, and emotion can be both good (passion and drive) and bad (excess personal belief in our product or market). You must start with a plan. Document how and what you want to achieve by developing a thorough business plan, which includes pro forma cash flow, balance sheet and income statements with various scenario sensitivities. Confront current realities fully through a SWOT analysis. Think about production capability, personnel, market and economics. Building a plan can be a complicated and exhausting exercise and may require the assistance of external advisors. You will also want to review corporate structure and evaluate how assets are held. Are they held through an operating company, holding company, family trust? Does the structure optimize tax minimization, ensure legal protection and cover succession planning? Outline where your capital needs will be. Is it for daily working capital or for fixed costs? Different needs may lead you to different lenders. Seek out options. These will include banks, equity investors, angel investors or family. Remember this will be the start of a partnership, so choose an investor that you can work with now and in the future. Now it’s time to execute the business plan. Consider your brand awareness, audience and online presence. Review your product and service development. Find ways to improve efficiencies by reducing waste and increasing efficiency of production operations. Expanding your business means it’s really working! But you must monitor progress continuously.
24 | Ask the experts 2014 published by Business in VAncouver
Be wary of privacy and human rights issues when establishing rules for Internet use QUESTION | How do I implement boundaries around Internet use in the workplace?
Cori Maedel | CEO and HR executive, Jouta Performance Group
Cissy Pau | Principal consultant, Clear HR Consulting Inc.
Lindsie Thomson | Partner, Harris & Company LLP
nternet use in the workplace is so commonplace that employers sometimes overlook the need for policies. Here are some guidelines. Boundaries for use Implement a policy for your company that outlines: •why the Internet is being provided; •expectations around use; •how use will be monitored; •specific restrictions/allowances that exist; and •consequences of misuse. Boundaries for collecting information online When writing a policy around collecting information online about potential employees, tread carefully. Recent case-law decisions penalized those using such findings to influence hiring decisions. This goes for current employees, too. But it’s not cut and dried. These cases shouldn’t set the precedent for your organization, but it’s important to be up to date when creating policies. To minimize repercussions from Internet searches, outline who in your organization will search, what they are viewing and how it will be used. The fine line between privacy and a company’s rights is tricky to get right but costly to get wrong. Next steps An Internet policy must be solid. Ensure yours follows privacy legislation, human rights laws, WorkSafeBC regulations and case law. Seek advice from HR professionals to create a policy that aligns with your culture and is legally sound and relevant. Consult an IT professional to ensure HR captures the necessary safeguards it is putting in place. Consider balance – between no social media access and some access. This is an open debate and one worthy of finding common ground.
ere are some key considerations when determining the boundaries for your company’s Internet use policy: 1. W hat are employees’ roles and responsibilities? The policy will depend on whether employees require Internet access to accomplish their job. If so, establish ground rules on acceptable and unacceptable use of the Internet and any restrictions that apply to different positions. For example, perhaps your marketing staff need to access social media constantly – but maybe your production workers, who don’t need Internet access, should be online only during their breaks. 2. What is your company culture? Your company culture will shape the policy you develop – is it open, trusting and casual? Or more conservative? If your company consists of staff who are accustomed to being constantly connected, a policy significantly limiting Internet access may appear archaic and inefficient. Also, consider your staff’s reliability and trustworthiness to see how much oversight is required. 3. How will the policy improve productivity? The Internet can be an abundant source of information as well as a big time waster. Boundaries for employee Internet use need to be practical, realistic and allow for the greatest level of work productivity and efficiency. Here are some good ways to implement the policy: •Inform employees that you are developing the policy and seek their input. •Once the policy is developed, communicate it to your employees. Answer any questions they have and ensure they understand the policy. •Document the policy for inclusion in your employee handbook or email the document to your staff.
he best way to implement rules on Internet use in the workplace is through an easy-to-understand policy that is communicated to all employees. A policy on Internet use should be focused on ensuring employees work during work time and do not engage in online activity that could harm the interests of your organization. Some basic rules include: •limiting online activity during working time to work-related tasks; •prohibiting online activity that is contrary to the law or offensive; •prohibiting online activity that exposes the organization to liability; •prohibiting the downloading of copyrightprotected or unlawful material; •a reminder that rules and policies on confidentiality apply to all online activity; •prohibiting the viewing of online material that is obscene, pornographic or otherwise inappropriate; and •prohibiting the use of the organization’s equipment or network to post on social media sites. Depending on your work environment, you may wish to allow employees to engage in personal use of the Internet during the workday. Be warned, though, if you allow this, it will be harder to monitor whether an individual’s use complies with the policy. Your policy should explain the consequences for non-compliance and state that the employer may monitor Internet use in order to ensure compliance. If you have a unionized workforce, there are additional considerations, including whether your collective agreement places any limits on your management rights. Once the policy has been drafted and communicated to employees, it’s up to you to ensure compliance. Consistent enforcement is critical to ensuring employee buy-in and your credibility.
Ask the experts 2014 published by Business in VAncouver | 25
Key issues include accurate valuation, ownership interests and depth of company management Question | What should I consider before selling my business?
Hugh Livingstone | Managing director, MacKay LLP’s Vancouver office
Don Sihota | Partner, Clark Wilson
Basil Peters | M&A adviser, exit coach and angel investor
he price: There are many factors that affect a company’s value, including earnings history, projected future earnings, asset base, goodwill, competition, management depth, employees, customer base and the extent to which contracts are in place. Often a business owner will want to have a chartered business valuator perform a valuation resulting in a formal valuation report. This can be used to benchmark a third-party offer or as an independent assessment for a sale from one shareholder to another. What is being sold? Are you selling the shares of the company or the net assets of a business? Generally, sellers like to sell shares and buyers like to buy assets to avoid unknown skeletons that remain with the company after the sale. Income tax considerations: Sellers can sell shares and claim the $750,000 lifetime capital gains deduction (perhaps for each selling family member). Certain tests must be met – e.g., a Canadian private company with sufficient active business assets held for two years prior to and at the time of sale. A buyer might prefer to buy assets to get a larger write-off of depreciable assets. HST might also be an issue. Legal advice: Seek it. When negotiating with a buyer, how much are you going to disclose about your products, customers, suppliers and employees when the deal may collapse? Confidentiality agreements and non-compete agreements are important. What about severance? What security will be provided for any vendor take-back note? Many risks can be mitigated by the appropriate representations and warranties in the purchase and sale agreement.
irst, ensure that all ownership interests (i.e., shareholdings) are properly documented so there is no ambiguity about who owns the business. I’m amazed at how often problems arise with the legal documentation on ownership. If there are minority shareholders, you need a shareholders’ agreement with a drag-along provision, which will prevent the minority from holding up the sale. If this is not in place prior to the sale, ask your lawyer to provide you with one. A review of critical legal agreements (such as those with major suppliers or customers) is also important to ensure there are no weaknesses that a buyer will exploit. A lawyer with experience in buying and selling businesses will help get your house in order and ensure that your business is attractive to buyers. However, the value of your business also depends on its stability, customer base, potential for growth, ability to generate profits and cash flow, effective management information systems, strategic market position or proprietary assets. It’s also important to consider the income tax you will pay on the sale. Getting qualified tax advice in advance can save you tens of thousands of dollars. Based on my experience, you will need to consider a corporate reorganization to maximize tax savings on the sale. Finally, you should consider engaging a proficient mergers and acquisitions (M&A) adviser who can identify multiple qualified buyers and help you to get the best price and terms possible. Choosing your advisers is critical. Your team of professionals should consist of a lawyer, an M&A adviser and a tax adviser. You need to ask each of them how often they do this type of work in order to determine whether they have the experience necessary in the field of buying and selling businesses.
he first step is to develop a clear exit strategy. At a summary level, it’s pretty simple. There are only two essential elements: the target date and the exit valuation. Here’s a real-life example from the Parasun case study (available online): “Our core purpose is to sell the company for more than $10 million by late 2006 or early 2007.” This exit strategy was a key part of Parasun’s successful exit. The second essential step is to develop full alignment around the exit strategy with all of the principal stakeholders. My recommendation is to start with everyone signing a hard copy. This often happens at the successful conclusion of a two-day offsite strategic planning session. I used to believe it was sufficient to review and sign the exit strategy about once each year. More recently, some of my investor friends at the Ohio Tech Angels have been doing the alignment check at the beginning of every board meeting. Increasingly, I have been leaning toward considering this a new best practice. The exit strategy must be realistic. One of the worst things a CEO can do is to build alignment around a timeline or valuation that is not achievable. This can lead to a failed transaction and will almost certainly have a negative impact on corporate morale. Dozens of CEOs have told me that once they had a clear exit strategy, it affected business decisions made inside the company every week. Alignment on a well-developed exit strategy also significantly improves the probability of completing a successful exit.
26 | Ask the experts 2014 published by Business in VAncouver
Online offers a new world of opportunities for expanding your company’s business Question | What do I need to know if I want to take my retail business online?
Kevin McLeod | Founder and CEO, Yardstick
David Robertson | Owner, the Dirty Apron Cooking School & Delicatessen
Daniela Cubelic | Tea master and founder, Silk Road Tea
hen taking your retail business online, you are potentially starting a whole new business with a separate marketing strategy, sales process and operational flow. Here are seven things that retailers need to think about: •Competition. These can be websites from around the world. Examine your online competition, and don’t assume that it’s the same as for your retail store. •Differentiation. Going online means you’re open to being price-shopped. Be sure your products are differentiated enough from the competition that they can’t be compared solely on price. •Software-as-a-service. There are a number of SaaS e-commerce platforms that will give you a fully functioning e-commerce website at a low monthly fee. This is a lower risk option, which will avoid you having to pay thousands of dollars up front. •User experience. Get your users to the product they want and through the checkout process with as few clicks as possible. Fewer steps mean fewer chances for users to give up before the transaction has been completed. •Shipping and returns. Get a handle on your process for packaging and shipping products as well as the costs therein. And have a system to promptly process any returns. •Internet marketing strategy. Online shoppers may not buy right away. That’s OK. Think about engagement and building relationships. If in doubt, read up on some local social media or Internet marketing success stories. Copy what has worked for other companies. •Foot traffic. Typically, an in-store shopper is more likely to buy and will spend more money than an online shopper. Encourage your online shoppers to come down to your retail store through promotions or special events.
ecause customers now expect to be able to get what they want without having to leave their desks, taking your retail business online would appear to be a logical decision. However, the room for error is much greater. Because you have to track your inventory based on online sales as well as the sales in your physical retail store, it takes an enormous amount of organization and attention to detail to maintain a high standard of customer service and keep the numbers accurate when expanding online. A big aspect to keep in mind is timing. For an online order to be processed in a timely manner, one must check back often to ensure that no orders are being missed. This proves especially true with our catering business that takes online orders. If we do not check back often to see if there are any last-minute placements, we might not only miss a deadline, we could also lose future business. Therefore, it’s vital to be unmistakable about deadlines for online orders. We have made it very clear on our website that orders need to be placed before 4 p.m. the day prior. This way our staff know what to expect when starting their working day, and customers can expect their order to be delivered at the appointed time. Beware the illusion that an online store will reduce staff costs. In order to have staff process online orders, one must hire employees who are computer-savvy, and thus more expensive, while maintaining staff to help customers who prefer to visit the bricks-and-mortar location. The Dirty Apron’s Cooking School system is 100% online, and after four years, class bookings are now at about 50-50 between online and phone bookings. So while there is a good portion of customers who are happy to book online, there are just as many people who still prefer to be able to talk to a person. That 50% of our customer database can’t be ignored. Without it, our business would not be profitable.
nline sales are an opportunity to grow your business with lower overhead costs as compared with a bricks-and-mortar outlet, but it’s important to consider whether you can be truly successful at it. Do you have unique products that aren’t available anywhere else? If not, assess whether you can compete on price, selection and service. Your competitors are likely to have sophisticated software, a larger product selection, lower pricing and enticing incentives, including free shipping and generous return policies. If customers love your product or if it’s unique, they may be willing to pay for shipping. If not, do you have the margins to absorb the cost? Beware of hidden costs, including packing materials, labour on assembling orders, and higher merchant fees for online transactions. Breakage and returned goods can double postage fees and staff labour. Will you need to add new telephones or hire customer service staff? How much can you afford to invest in a website, online advertising and search engine optimization? It’s your 24/7 sales force and a well-designed site drives sales, but it can cost significantly more than a bare-bones option. Do you have the infrastructure and policies to ensure a great, consistent and congruent customer service experience online and in-store? I also always begin and end by thinking about how I can exceed my customers’ expectations, knowing that happy customers are my best ambassadors. Finally, be sure to take the time to do your research and develop a strategy for success.
Ask the experts 2014 published by Business in VAncouver | 27
Firing an employee is never easy, but doing it the right way makes it less painful for both parties Question | How do I fire someone without causing office disruption?
Cynthia Roney | Certified executive and business coach and founder and CEO, Executive Passage
Rosie Steeves | President, Executive Works
Christian Codrington | Senior manager, operations, BC Human Resources Management Association
magine how you would feel if your boss walked in and said “You’re fired!” Were you surprised or did you know this was coming? Were you hurt or embarrassed about the way you were told? Once you absorbed the news, were you angry or mad about how you were treated? Put yourself in their shoes. Think about these three questions before firing someone to minimize office disruption. Understand what went wrong to make sure it doesn’t happen again. Good companies: •hire people with the right fit for the job and organization; •provide appropriate training; and •ensure ongoing feedback so everyone knows what they’re supposed to do and how they’re doing. Don’t assume people know how they’re doing; often they’re the last to know. Even when it’s obvious that someone needs to go, no one is ever really ready or prepared for the news. Sometimes, as in a mass layoff or downsizing, the news is a surprise to everyone in the organization, far beyond those being fired or let go. Understand in advance that people will likely feel vulnerable and emotionally raw. Deliver the news simply and clearly with empathy, professionalism, dignity and respect for all. Long before taking any action, get legal advice to ensure you’ve done the right thing to treat people fairly. When done poorly, the shock and awe of firing can have a devastating impact on an entire organization. Learning how to fire with empathy, dignity and respect is an important yet often overlooked leadership skill.
irst, don’t assume firing someone will cause office disruption. While those “doing the deed” worry about negative repercussions, often the rest of the team respond to a dismissal with a sense of relief and mutterings of “it was about time.” However, whether or not it was justified in the eyes of the rest of the team, the manner in which the dismissal takes place can go a long way toward minimizing disruption. At times like this, company and personal values must be honoured. All too often, those receiving their walking papers are suddenly turfed with little respect or consideration for their needs. That approach does little to build trust in the organization for those left behind. The most important thing is to do it thoughtfully and carefully. When circumstances permit, allow the people being terminated to conclude their employment in a way that meets their needs. That is rarely being summarily escorted off the premises by security. Instead, consider giving employees a few weeks’ warning of what will be coming so they can wrap up their work and end their relationships with dignity. People do not always react in a way that necessitates a brutal eviction. Pay attention to the rest of the team. Allow them time to grieve, to process and make sense of the dismissal. Don’t ignore it, but instead provide an opportunity for others to talk. Bring up how they’re feeling in the team meeting, conduct one-on-ones with everyone, and really try to empathize with them. If you’ve taken time with the dismissal, terminated the person respectfully and have a well-thought-out plan for handling the workload of the person you have let go, then the disruption should be minimal.
fact of life (and work) is that sometimes things just don’t work out. There is no perfect way to end someone’s employment, but the entire event will be easier for all involved if you strive to protect assets – human and capital – and keep the following in mind. Human assets include the dignity of the individual being terminated as well as the rest of your team. This can accomplished by: •planning the logistics of a termination meeting; •delivering the message in a private setting; •where possible, having the discussion early in the day and in the middle of the week; •allowing the individual some say or input into what will be communicated with coworkers; •allowing the individual time to process the news before working out logistics like return of work-related items; •agreeing on a time when the individual can discreetly and out of the eyes of colleagues have a chance to collect personal belongings; •letting the rest of your team know; and •when speaking with clients, customers and external stakeholders, saying nothing other than that the individual is no longer with your company. As for protecting your capital assets: •determine when to disable access to internal communication vehicles and IT systems and then make sure to do it; •collect company property, keys and corporate cards; and •determine the pros and cons of asking the person to close off work in progress.
28 | Ask the experts 2014 published by Business in VAncouver
Be prepared for increased challenges and scrutiny when going public question | What should I consider when taking my company public?
peter Brady | Director of corporate finance, BC Securities Commission
Angela Blake | Associate, Clark Wilson LLP
David Frost | Partner, McCarthy Tétrault LLP
here are many important considerations to think about when taking a company public. Among them are the cost of preparing and filing a prospectus, the ongoing costs of maintaining a public company (some estimate the minimum annual expense at around $200,000) and the fact that much of a public offering’s success depends on unpredictable market conditions. As well, there are founders’ share restrictions and new restraints on management. Another factor to consider is the increased disclosure required of public companies. You need to ask, “Is my company prepared for the increased level of scrutiny?” Disclosure requirements for public companies take many forms, including interim and annual disclosure, press releases and material change reports, as well as additional disclosure requirements for senior management and shareholders (insider reports and early warning reports are two examples). It’s important to note that regulatory oversight is increasingly becoming a fact of life in the private placement market. For example, the BCSC reviews offering documents and reports prepared by private companies for so-called “exempt” distributions. However, there is no question that for public companies, added disclosure requirements will touch virtually every aspect of a company’s operations. Of course, the added challenges of going public have to be measured against the significant benefits of accessing public markets. For a company looking to finance growth or large capital projects, engage in M&A activity or access a wider range of financing options, taking it public might remain the best option, providing the company enters the process understanding the changes that lie ahead.
hile going public can give your company a higher profile and the potential to attract greater amounts of capital through public markets, there are a number of factors that boards need to turn their minds to before making such a decision. •Will you have sufficient capital? Taking a company public is an expensive process. Once public, in addition to the substantial fees that need to be paid to regulators and stock exchanges, you can expect your legal and auditor fees to increase dramatically. In a down market, it might be hard to raise the capital needed to maintain your public listing. •Have you kept adequate financial records? Regardless of the method you choose to take your company public, the process will require audited historical financial statements for up to three years. •Do you have quality board members that can meet corporate governance guidelines? Regulators expect board members with good track records in operating businesses and raising capital, with expertise in your industry and in the countries in which you operate. •Are you prepared for the public scrutiny that comes with being public? Stock exchanges and securities regulators impose many requirements on public companies related to public disclosure and financial reporting. You must keep the market apprised of all material information about your company, disclosing particulars of executive compensation and filing copies of all significant contracts, which could include contracts with customers and suppliers. •Do you have adequate personnel to manage disclosure obligations? Management will have to devote substantial amounts of time to ensure the company is meeting these requirements, which can take away from time they have to run the company.
hether or not to go public is one of the most critical decisions a company can make. Your company must consider whether it is ready to undertake the process of becoming and being a public company. Some factors to consider: •Choose your path carefully. There are two traditional ways to take a company public. An initial public offering involves the sale of shares to the public. In a reverse takeover, the company acquires an existing public company. Both have advantages and disadvantages. •Have experienced, strong management. Management must possess sufficient experience to carry out the process and must be willing and able to assume the responsibilities involved. The board of directors plays a significant role in both the management of a public company and its public image. Changes to the board are often required and additions can strengthen the independence and expertise of the board. •Prepare a solid framework. A company must consider whether its existing corporate, capital and governance structures are appropriate for a public company, as well as checking corporate records and contracts. •Conduct a systems check. Internal systems and procedures should be capable of supporting the demands of the going-public process and the requirements to report reliable financial information to investors. Accounting issues must be addressed early and records must be examined to prepare for financial disclosure. •Get the right experts involved. The right choice of investment bank, legal counsel and auditor is critical. Advisers should have a solid reputation in the financial community and in the industry of the company. Enlist help early to ensure success.
Ask the experts 2014 published by Business in VAncouver | 29
Map out business objectives and exit strategies from the beginning Question | How do I go about putting together a succession plan?
Pino Bacinello | President, Pacific Business Brokers Inc. and Pacific Mergers and Acquisitions Inc.
Judy Brooks | CEO, Forum for Women Entrepreneurs
Chris Kassardjian and Frank Kusmer | Principals and co-founders, CK Global Solutions
he lack of proper exit planning by entrepreneurs, coupled with today’s aging entrepreneurial demographic, could potentially result in an economic meltdown. Planning for succession need not be too complicated but having the right team of advisers to assist is critical. Here are three simple steps: 1. Make the decision to plan. 2. Find a certified and accredited exit planner. This is essential to assist with the development and implementation of a simple plan based on realistic needs of lifestyle and expectations. Key elements of proper succession planning include: •determ i n i ng you r persona l a nd fa m i ly objectives; •realistically and objectively assessing your family’s needs and dynamics; and •developing the business into what I like to call a “state of change readiness.” Just as critical is working the plan so it will ensure a successful transition, and exit, to the benefit of all those involved – within the business and within the family. 3. Assemble a team of competent advisers. Start with a knowledgeable professional certified business broker or a certified business valuator who can determine the current value of your business. Armed with this information, measure it against the value that you want to achieve according to the goals identified within your succession plan. This will make clear the gap between where you are and where you want to be. From there, you can determine the required actions to close the gap to achieve your goals within your plan. To protect your family and your investment in your business, you owe it to yourself and your loved ones to properly plan and prepare for your eventual exit.
here are plenty of sites and resources that will walk you through the mechanics and process of exiting your business. But what do I consider when business owners come to talk to me about exiting their business? 1. Do you really want to sell or is the business like your baby? Selling my businesses was easy for me emotionally – but even then there’s an adjustment period. For some business owners, whose trade or craft is what the business is about, selling their business is beyond painful. What will they do after the sale? 2. Get advice. For a big deal, use someone like David Lam from Deloitte who understands business transactions are about people – not just money. Especially when it comes to founders. If it’s a little deal, you should still seek out an appropriate adviser (not a family member or neighbour; they may be emotionally attached, not emotionally supportive). Tip for finding good advisers: if they’re asking questions about you and your life they’re probably going to serve you well. 3. Terms matter. People tend to focus on the sale price, but how long a deal takes to close can be crucial to a smaller deal. The due diligence process takes you away from focusing on your business. My first sale was tied up in 30 days to a third party. My second was tied up in 30 days as a sale to my partners, because we had terms written into our agreement. It made life way easier and saved me money. Top tip for exiting your business: set your company up from day one as if you’re going to sell, even if you never want to. Ensuring you have good systems, documentation and professional advice with regard to things like intellectual property, agreements and contracts (shareholder, partner, client, etc.) and financials serves you well in a speedy due diligence or just running your business successfully.
very business owner will eventually retire and pass his or her company on to the next generation, sell the business or close it. The statistics are sobering: only 20% of all small businesses for sale are actually sold, and only three in 10 family-owned businesses survive the transition from their founder to the next generation. Too often, the owners of small and family-run businesses don’t even consider the question of who will succeed them until it’s too late. Succession planning is a long-term process, not a one-time event, and you should plan at least five years in advance. It helps to formally determine who will take over your business and how that transition will occur. It begins with a detailed analysis of your business and its current value. If your business has suffered financially, strategies to turn the business around first need to be implemented. A well-designed succession plan helps ensure the financial stability of your business and your retirement capital. It also includes reducing tax liabilities, estate planning and a timetable for transfer of ownership. Components include the timing of retirement, who will continue to manage the business, whether it should be sold instead, if you will remain involved after retirement, how ownership will be transferred, the capabilities of any successor and many other factors. An essential part of the succession planning is the need to openly discuss the issue of succession with family members, key managers and employees. Failure to communicate is one of the biggest obstacles to a successful succession. While much depends on other people, it starts with the owner of the business. Using advisers with succession planning expertise is critical to ensure the business is properly analyzed, appropriate strategies are developed and the process is smooth.
Return of Tightening Labour Market Are you ready for an increase in unfilled job openings? The tight labour market that we experienced in 2007 may seem like a distant memory but it will likely return, sooner than you think, as the economy continues to improve and the working population ages and retires. Employee benefits have consistently rated as an important factor in attracting and retaining employees, particularly key talent. But employees are now looking for more from these plans and their needs are as diverse as the employees themselves. As we have done for over 30 years, ZLC helps BC businesses attract and retain their most valuable asset â€“ their people â€“ so they can focus on growing their business. Check out our website to read a related article or give us a call at 604.602.7888 to speak with one of our team members.
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www.zlc-employeebenefits.com 1200 Park Place, 666 Burrard Street Vancouver, BC V6C 2X8 Tel: 604.602.7888 Fax: 604.688.7268 Toll Free: 1.800.663.1499
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