September 2017 Office Technology

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CONTENTS Volume 24 • No. 3

FEATURE ARTICLES 10

Adjacent Opportunities Have you diversified your product offerings?

COURTS & CAPITOLS Safeguards & Social Media How far can a non-solicitation agreement go?

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by Robert C. Goldberg BTA General Counsel

by Brent Hoskins Office Technology Magazine

Today, traditional copier/MFP manufacturers are increasingly emphasizing the diversity of their product offerings. They are doing so for good reason. The level of demand and, perhaps more importantly, daily usage of their core products are changing. Talk of declining page volumes in the workplace as it relates to copying and printing has become commonplace. In considering this reality, one is led to think about the waves of technology that have passed through the industry.

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Many dealers utilize non-competition, non-solicitation and/or confidentiality agreements. In most instances, these agreements are effective, however, past safeguards are now colliding with social media services.

P R I N C I PA L I S S U E S The Successful Business Exit It is not an event for the owner, it is a phase

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by Jim Kahrs PPMC Inc.

2017 BTA National Conference BTA West hosts annual event in Las Vegas

The keys to a successful business exit lie in proper planning and having the time to bring those plans to fruition. By treating the exit of a business as a full-fledged phase, you can put a spotlight on what is needed for success.

by Brent Hoskins Office Technology Magazine

BTA West hosted the 2017 BTA National Conference Aug. 16-18 at the Mandarin Oriental in Las Vegas, Nevada. The event featured a keynote address, “Vision, Strategy, Execution: More Than Just Business Knowledge,” presented by Meridith Elliott Powell of MotionFirst Inc. The event also included a dealer panel, “A Strong Culture’s Impact on the Implementation of New Solutions & Strategies,” and eight educational sessions presented by industry leaders.

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SELLING SOLUTIONS Time to Raise Your Sights? Secure customers; start targeting the corner office

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by Troy Harrison Troy Harrison & Associates

You might not think your product or service warrants the attention of the corner office, but I guarantee you that someone else has figured out a way to do just that. And if it is not you, you are going to be that person’s victim.

Fight of the Century A look at printer OEMs versus copier/MFP OEMs by Charles Brewer Actionable Intelligence

Years ago, companies that made printers sold into one market and those that made copiers sold into another. But that was long ago. Ever since copiers went digital and moved onto networks, and copying and scanning features were bolted to A4 print engines, the markets have been converging along with the channels. Although printer and copier/MFP vendors have been sparring for decades, as markets have continued to decline over the past few years, the gloves have come off.

D E PA R T M E N T S Business Technology Association

25

• BTA Education Calendar • BTA Highlights

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Executive Director’s Page

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BTA President’s Message

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Advertiser Index

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EXECUTIVE DIRECTOR’S PAGE

BTA Announces Fall Educational Lineup

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ne of the Business Technology Association’s (BTA’s) objectives is to help train the employees of its member dealerships through its educational programs. These programs can help companies improve revenues, prepare their sales and service team members for success, develop new business opportunities and more. BTA has announced upcoming dates for four of its educational programs. I encourage you to take a look at these offerings. Also note that these programs allow members to use their $150 or $250 educational discounts received with membership toward the tuition fees — another great benefit of BTA membership. One of BTA’s most popular offerings, ProFinance 2.0, will be held Oct. 11-12 at BTA member dealership Les Olson Company in Salt Lake City, Utah. Led by John Hey and Todd Johnson of Strategic Business Associates, ProFinance 2.0 has evolved as the industry has changed over the years. This workshop will teach you the industry model, which includes more than 30 key benchmarks (including those for MPS) and will help you and your team achieve double-digit operating income. You will learn proven sales and service plans, effective management bonus programs and critical organizational strategies. For more information, visit www.bta.org/ProFinance. On Oct. 23, at BTA member dealership Imagine Technology Group in Chandler, Arizona, BTA will host FIX: Cost Management for Service 2.0. Taught by Ronelle Ingram, a longtime BTA instructor and past BTA national president, FIX will teach you how to determine the actual cost of the service hour (burden rate) and improve your overall service department profitability. Ronelle

will cover first-call completion and proven management and customer service programs to improve morale within a service department. Those struggling with MPS and IT issues can learn new management skills to help transition their staffs to the realities of solutions-based servicing. For more information, visit www.bta.org/FIX. Our newest educational offering, the BTA Strategic Sales Semester, led by Mitch Morgan and Chris Ryne of Growth Achievement Partners (GAP), will start on Nov. 13. This online program consists of 13 training sessions held every other week over six months, and will teach attendees how to determine which accounts and opportunities require a transactional approach versus those that require a strategic approach. The sessions are 45 to 60 minutes in length and geared to specific parts of the sales process. Each module includes skill-building exercises and field-based activities reps will be asked to complete. These online training sessions include opportunities for polls, test questions and interactive Q&A. For more information, visit www.bta.org/StrategicSales. Finally, on Dec. 6-7, in Phoenix, Arizona, Mitch and Chris will lead the BTA Managed Services Workshop, which details the updated Managed Services Business Model 2.0, created by GAP in collaboration with Zygoquest Group and Continuum. If your managed IT services sales numbers are not meeting expectations, if you are looking for tools that deliver results, or if you have just entered the market (or are planning to) and need to make up for lost time and avoid mistakes, this is a must-attend workshop. Mitch and Chris will provide a time-tested business model and key metrics to guide success and ensure profitability in the managed services space. For more information, visit www.bta.org/MS. n — Brent Hoskins

Executive Director/BTA Editor/Office Technology Brent Hoskins brent@bta.org (816) 303-4040 Associate Editor Elizabeth Marvel elizabeth@bta.org (816) 303-4060 Contributing Writers Charles Brewer, Actionable Intelligence www.action-intell.com Robert C. Goldberg, General Counsel Business Technology Association Troy Harrison, Troy Harrison & Associates www.troyharrison.com Jim Kahrs, Prosperity Plus Management Consulting Inc. www.prosperityplus.com

Business Technology Association 12411 Wornall Road Kansas City, MO 64145 (816) 941-3100 www.bta.org Member Services: (800) 505-2821 BTA Legal Hotline: (800) 869-6688 Valerie Briseno Marketing Director valerie@bta.org Teresa Leerar Bookkeeper teresa@bta.org Brian Smith Membership Sales Representative brian@bta.org Photo Credits: Bigstockphoto. Cover created by Bruce Quade, Brand X Studio. ©2017 by the Business Technology Association. All Rights Reserved. No part of this publication may be reproduced by any means without the written permission of the publisher. Every effort is made to ensure the accuracy of published material. However, the publisher assumes no liability for errors in articles nor are opinions expressed necessarily those of the publisher.

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BTA PRESIDENT’S MESSAGE

Fall Colors Retreat Set for Oct. 19-20

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re you looking for a relaxing setting where you can spend time learning while also making connections with other dealers? The Fall Colors Retreat, held each year near the Great Smoky Mountains, can help you do just that. To be held Oct. 19-20, 2017, at the Doubletree by Hilton Asheville-Biltmore in Asheville, North Carolina, the Fall Colors Retreat is planned and hosted by the BTA Southeast dealer volunteer leadership team. The Fall Colors Retreat will begin at noon on Thursday, Oct. 19, with opening comments and lunch, followed by the first educational session, “Industry Benchmarks & Your Company Value Proposition,” led by Todd Johnson of Strategic Business Associates. Breaks and round-table discussions with vendors will follow the first session. Attendees will break into small groups for these round-table discussions, which will give them plenty of one-on-one time to learn about the exhibitors’ offerings. From 4 to 5 p.m., the first part of a twopart dealer panel moderated by John Eckstrom, president and CEO of Carolina Business Equipment, Columbia, South Carolina, will take place. The panel, “Breaking Through Revenue Growth Barriers,” will give attendees ideas on how to achieve greater levels of success in their businesses by hearing from fellow dealers who have overcome growth barriers — whether through organic means or acquisitions. The panelists will be: Matt Jackson, president of Copynet Office Systems, Plano, Texas; David Polimeni, president and CEO of Rite Technology, Sarasota, Florida; Tim Renegar, president and co-owner of Kelly Office Solutions, WinstonSalem, North Carolina; and Aaron Rubin,

co-founder and president of Docutrend Imaging Solutions, New York, New York. At 6 p.m., buses will leave for the historic Biltmore Estate, where attendees will have cocktails and dinner at the Biltmore’s Antler Hill Barn. The second day of the Fall Colors Retreat will begin at 7:30 a.m. on Friday, Oct. 20, with breakfast, followed by opening comments and the second educational session, “SeatBased Billing — Opportunities & Challenges in Disrupting a 30-Plus-Year-Old Business Model,” led by Luke Goldberg of Clover Imaging Group. Breaks, more vendor round-table discussions and the second part of the dealer panel will follow Goldberg’s session. At noon, the event will wrap up with closing comments and prize drawings. The Fall Colors Retreat exhibiting sponsors: ACDI, Carolina Wholesale, Clover Imaging Group, DCS, Epson, ESP AMETEK, EverBank, HP, Keypoint Intelligence, LMI Solutions, Marlin Office Technology Finance Group, Muratec, NA Trading and Technology, OKI, Panasonic Scanners, PHSI, Static Control, Supplies Network, SYNNEX, Tigerpaw, TSO Distribution, Wells Fargo and Xerox (breakfast sponsor). Two-for-one BTA member dealer registration for the Fall Colors Retreat is only $199. Registration includes the Thursday and Friday educational sessions and round-table discussions; Thursday lunch, reception and dinner at the Biltmore’s Antler Hill Barn; and Friday breakfast. BTA members may also apply their $150 or $250 educational discount received with their membership toward this event. I encourage you to join your fellow dealers in Asheville for this relaxing fall retreat. For more information or to register, visit www.bta.org/BTAAsheville. n — Dan Castaneda

2017-2018 Board of Directors President Dan Castaneda International Copy Machine Center El Paso, Texas dan@icmc-elp.com President-Elect John Eckstrom Carolina Business Equipment Inc. Columbia, South Carolina johne@cbesc.com Vice President Bob Evans Function4 Sugar Land, Texas bobevans@function-4.com BTA East Jim Donnellon Donnellon McCarthy Enterprises Cincinnati, Ohio j.donnellon@dme.us.com Tim Seeley Jr. Seeley Office Systems Inc. Glens Falls, NY tseeleyjr@seeleyoffice.com BTA Mid-America Erik Crane Copy Products Inc. Springfield, Missouri ecrane@copyproductsinc.net Greg Quirk JQ Office Equipment of Omaha Inc. Omaha, Nebraska gquirk@jqoffice.com BTA Southeast Tim Renegar Kelly Office Solutions Winston-Salem, North Carolina trenegar@kellyofficesolutions.com David Polimeni Rite Technology Sarasota, Florida dpolimeni@ritefl.com BTA West John Hines Copiers Northwest Inc. Seattle, Washington jhines@copiersnw.com Mike Brandon ABC Office Equipment Co. Inc. Spokane, Washington mbrandon@abcoe.com Immediate Past President Rob Richardson Allied Document Solutions & Services Inc. Swedesboro, New Jersey robr@ads-s.com Ex-Officio/General Counsel Robert C. Goldberg Schoenberg Finkel Newman & Rosenberg LLC Chicago, Illinois robert.goldberg@sfnr.com

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Color is the new black and white Say hello to PageWide multifunction printers, transforming the copier market with the lowest color cost-per-page to reinvent how you go about business.

hp.com/go/A3events

© 2017 HP Development Company, L.P. The information contained herein is subject to change without notice. Lowest color cost per page: Lowest cost per color page claim applies to devices that are not sold under contract: Comparison of HP PageWide A3 devices with the majority of in-class color ink/laser MFPs ($3000-$7499), and color ink/laser single function printers ($1500-$2999) as of January/February 2017; market share as reported by IDC as of Q4 2016. Cost per page (CPP) reported by Gap Intelligence Pricing & Promotions report January/February 2017, comparisons for devices/supplies not sold under contract are based on published specifications of the manufacturers’ highest-capacity cartridges, inclusive of long life consumables, MSRP, and page yield. Average yield based on ISO/IEC 24711 and continuous printing in default mode. Actual yield varies based on content of printed pages and other factors. For more information, see hp.com/go/learnaboutsupplies and hp.com/go/PageWideClaims.

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Adjacent Opportunities Have you diversified your product offerings? by: Brent Hoskins, Office Technology Magazine

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oday, traditional copier/MFP manufacturers are increasingly emphasizing the diversity of their product offerings. They are doing so for good reason. The level of demand and, perhaps more importantly, daily usage of their core products are changing. Talk of declining page volumes in the workplace as it relates to copying and printing has become commonplace. Granted, the prevailing dialog is not about the demise of the copier/MFP. New models are being introduced at a steady pace. Plenty of paper continues to pass through these devices, generating welcomed revenue for manufacturers and dealers alike. However, as noted, the page volumes are less than ideal. In considering this reality, one is led to think about the many waves of technology that have passed through the office technology industry. The history lesson is this: It is not about the technology. Instead, the industry has always remained squarely focused on serving customers by addressing pain points in the workplace, managing documents and information, facilitating effective communication and improving business efficiency. Clearly, it is incumbent upon office technology dealers to primarily keep their eyes on the needs of customers, not on technology. Meanwhile, of course, dealers must also look to ensure the long-term viability of their dealerships. How can they accomplish both tasks? Increasingly, the answer lies in the diversification of a dealership’s products and services. Gary Bailer, director of product management for Sharp Electronics Corp.’s commercial display products, says the need for dealers to diversify is obvious. “If we get down to the basics, for a copier dealer to survive in today’s climate, it is no longer just about maintaining his or her MIF, because we all know that clicks are down,” he says. “If you are reliant on MIF alone, your revenues certainly will decline. I think every copier dealer can agree to that basic premise.”

So, what is a dealer to do? “To grow your copier business, you only have two choices,” Bailer continues. “Either acquire additional territories, which is a very expensive proposition and out of touch for many independent copier dealers, or get new customers. To acquire new customers, the problem has always been the traditional one; that is, copiers are leased. So, the chances of a rep calling on a prospect at the perfect time, when that 36-month or 48-month lease is about to expire, are fairly slim.” Given the desire of dealers to acquire new customers in today’s changing business climate and the challenges inherent to focusing solely on growing a copier/MFP MIF, Bailer points to an adjacent product category that is increasingly being pursued by Sharp dealers as they seek to diversify their product offerings — Sharp’s line of AQUOS BOARD interactive display systems. Originally launched six years ago, today there are 11 products in the lineup with screen sizes ranging from 40 to 80 inches and MSRPs ranging from $2,295 to $14,800. Sharp’s AQUOS BOARD displays “enhance communication and collaboration in meeting spaces throughout an organization of virtually any size,” Bailer explains. “Whether it is an SMB with one or two meeting rooms and a few offices, or a multinational organization, the same problems exist — it’s really all about how you collaborate in today’s world. It’s no longer just about face-to-face meetings. It’s no longer just about standing up in front of a room and presenting to people. It’s about ‘enhancing communication, collaborating and disseminating that information’; that was our theme when we launched the AQUOS BOARD interactive displays. Six years later, it’s still true.” Bailer says the enduring theme resonates well with the nature of millennials who are increasingly among those benefiting from AQUOS BOARD displays. “Millennials do not stand in the front of the room to conduct meetings and preach to people,” he says. “It’s much more about collaboration and

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exchanging ideas; they tend to based cloud video consit at their tables and push the ferencing service that “The value proposition is information to the board. Many provides interoperability that interactive displays can times, they want multiple sets within a virtual meeting help get your foot in the of information being pushed to room, so attendees candoor of accounts with the the board and the ability to colnot only hear and see same contacts that provide laborate using various mobile one another, but can also access to their copier fleets, devices. Our range of interactive share presentations. displays is designed to give these Collectively, these which can lead to print capabilities in various ways. Difproducts allow dealers assessments, print management, etc.” ferent models have different feato “expand, differentiate — Gary Bailer ture sets to that end, but every and secure customers by Sharp Electronics Corp. model provides, to some degree, going deeper and wider,” the ability to communicate with says Jim Coriddi, vice mobile devices through one of our software tools.” president of the Dealer Division at Ricoh. “We have found Even with a focus on the diversification of a dealership’s that, for our dealers, particularly given their strength in the product mix, Bailer emphasizes what many would view as SMB area, our UCS offerings are relatively portable and exthe key benefit of offering AQUOS BOARD displays. Given pandable — both important to an SMB-type of customer. that the decision makers outfitting meeting room environ- The short answer for dealers: ‘It’s a way to expand your presments are the same decision makers involved with copier/ ence within your current customer base and a way to differMFP placements, he says, AQUOS BOARD displays can ul- entiate yourself when you are approaching prospects.’” timately lead the dealership to grow its copier/MFP MIF. Although he acknowledges that “right now, it’s still very “The value proposition is that interactive displays can help early,” when addressing the question of the Ricoh dealer get your foot in the door of accounts with the same contacts channel’s current rate of adoption in terms of the company’s that provide access to their copier fleets, which can lead to “visual communications” products and services, Coriddi print assessments, print management, etc.,” he says. “That’s has great expectations. “The short-term goal is to have a the pitch for AQUOS BOARD interactive displays; it’s proven minimum of half of our IT-capable dealers driving and marto be accurate and true for hundreds of our resellers.” keting our visual communications products as a start,” he Since the AQUOS BOARD interactive display line was says. “From there, as word gets out and we gain momentum, launched, interest among dealers has increased steadily, we think it will become a lot more widespread.” Bailer says. “Initially, just the top 5 percent of our dealer Coriddi encourages dealers to consider the nature of community embraced it,” he says. “Nowadays, we’re seeing today’s workplace and how the manner in which workers more and more of our dealers not only embracing it, but communicate is changing. “If you want to continue to be a some have even launched separate divisions once they got viable, growing entity and leverage as much of the informaexperience, expanding beyond interactive displays into full- tion management business as possible, you need to have a blown display divisions and getting into signage and other broader array of solutions,” he says, advising dealers. “It’s types of solutions, such as video walls.” that simple. I wouldn’t necessarily say you have to do it — Of course, Sharp is not alone in diversifying its product doom and gloom — but if you want to grow, this is a huge mix beyond its core line of copier/MFPs. Ricoh USA Inc., opportunity. You need to be part of it.” for example, also offers interactive white boards — a line of Of course, dealers seeking to diversify their products eight models with displays ranging in size from 21.5 to 84 and services do not necessarily have to stray too far from inches and MSRPs ranging from $3,119 to $13,715 (displays the homefront — their copier/MFP lineups. Canon U.S.A. only, not fully configured). Along with the white boards, Inc. dealers, for example, have the opportunity to offer the part of its Unified Communication System (UCS), Ricoh also manufacturer’s imageFORMULA commercial document has three companion offerings: the P3500 ($2,200 MSRP) scanner line, which currently includes 16 models available and P3500M ($2,639 MSRP), devices that provides real-time for resale through the BTA Channel, with scan speeds rangaudio and video communication between multiple loca- ing from eight to 130 pages per minute and MSRPs ranging tions via the Internet (each device uses a built-in camera from $199 to $18,000. providing a 125-degree wide-angle view); UCS apps, allow“Our commercial scanners enable businesses to help iming users to log in online and join a meeting anywhere in the prove costs, workflow efficiencies, management, control, secuworld; and the Ricoh UCS Advanced Service, a subscription- rity, collaboration and compliance,” says Nobuhiko Kitajima, 12 | ­w w w. o f f ic et ec hno lo g y m a g.c om | S e p t e m b e r 2 0 1 7

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competitors. This leaves the vice president and general door open for the competimanager of the Business “ ... If they are not purchasing tors to try to take away the Imaging Solutions Group at them [document scanners] MFP business.” Canon. “All of our document from the dealer, they might While thwarting comscanners can scan in color, be purchasing them from petitors, dealers who pursue black-and-white and graythe dealer’s MFP competitors. dedicated scanners as an scale; process both sides This leaves the door open for adjacent product offering of a page at once; handle the competitors to try to take are also contributing to the hard cards and long docugoal of becoming “complete ments; and include TWAIN away the MFP business.“ solution” providers and “will drivers for superior appli — Nobuhiko Kitajima fare better than ‘box movcation compatibility.” Canon U.S.A. Inc. ers,’” Kitajima says. “Today, Not only can dedicated we have dealers who sell scanners generate incremental revenue and margin from existing accounts, but quite a few document scanners helping to each scanner sold can drag with it software and profession- position themselves as total solutions proal services sales, Kitajima says. “Selling scanners can also viders for their customers.” n Brent Hoskins, executive director of the increase account control,” he says. “Many times, document Business Technology Association, is editor scanners are in use in other areas of the customers’ comof Office Technology magazine. He can be panies, and if they are not purchasing them from the dealreached at brent@bta.org or (816) 303-4040. er, they might be purchasing them from the dealer’s MFP

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Konica Minolta Selects CIT Bank as Top Overall Partner Konica Minolta employees selected CIT Bank as “Best in Class” with the highest Net Promoter Score among their primary financing providers.* We humbly thank Konica Minolta for the recognition and are proud to serve the office imaging industry through our customer-focused approach.

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*Konica Minolta Business Solutions USA, Inc. surveyed its sales representatives and lease administrators, and asked them to rate their four primary leasing providers on a number of factors. CIT Bank earned top honors for: Top Overall Partner, Best in Class, Overall Performance, Best Customer Satisfaction, Best Sales Representatives, and Best Processes/Systems. ©2017 CIT Group Inc. All rights reserved. CIT Bank and the CIT Bank logo are registered trademarks of CIT Group Inc. CIT Bank, N.A. is a subsidiary of CIT Group Inc.

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2017 BTA National Conference BTA West hosts annual event in Las Vegas by: Brent Hoskins, Office Technology Magazine

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TA West hosted the 2017 BTA National Conference Aug. 16-18 at the Mandarin Oriental in Las Vegas, Nevada. The event featured a keynote address, “Vision, Strategy, Execution: More Than Just Business Knowledge,” presented by Meridith Elliott Powell of MotionFirst Inc. The event also included a dealer panel, “A Strong Culture’s Impact on the Implementation of New Solutions & Strategies,” and eight educational sessions presented by industry leaders: Mitch Morgan, Growth Achievement Partners; Darrell Amy, Dealer Marketing; Ken Staubitz, Modern Office Methods; Jim Kahrs, Prosperity Plus Management Consulting; Doug Johnson, LMI Solutions; Andy Slawetsky, Industry Analysts Inc.; Tom Callinan, FlexPrint LLC; and Gil Cargill, Cargill Consulting Group. Networking opportunities included a welcoming dinner with entertainment by humorist Devin Henderson and a Cirque du Soleil Mystère performance. BTA also presented its annual awards, including the 2017 BTA Channel’s Choice Awards, during the event. The exhibiting sponsors: ACDI, Agent Dealer, BEI Services, Brother, Carolina Wholesale, Clover Imaging Group, Collabtic, Compass, Continuum (lunch sponsor), CoreDial, Crawford Thomas, ECi Software Solutions, eesyQ, Epson, ESP AMETEK, EverBank, GreatAmerica, HP (breakfast sponsor), Innovolt, ITC Systems, Kyocera, Laserfiche, Lexmark, LMI, Marlin, Miracle Service, Muratec, OKI, Panasonic (breaks sponsor), PHSI, Plustek, Polek & Polek, Prism, ProcureIT, RISO, Royal Imaging, Static Control (keynote sponsor), Supplies Network (breakfast sponsor), Square 9, SYNNEX, Tigerpaw, TonerCycle/InkCycle, Toshiba, Wells Fargo (dinner entertainment sponsor), Xerox (dinner sponsor) and Unitone. The next BTA event, the Fall Colors Retreat, will be held Oct. 19-20 in Asheville, North Carolina. For more information or to register, see the ad on page 3 or visit www.bta. org/BTAAsheville. n Brent Hoskins, executive director of the Business Technology Association, is editor of Office Technology magazine. He can be reached at (816) 303-4040 or brent@bta.org.

Top: The 2017 BTA National Conference featured a keynote address, dinner entertainment, a dealer panel, eight educational sessions and a Cirque du Soleil Mystère performance. Middle: Powell presents the keynote address. Bottom left: Henderson provided a bit of humor with dinner on Aug. 16. Bottom right: Steve Urb (left) and Jerry Coffidis (center) of Brother visit with Dan Welch of ABC Office Equipment Co., Spokane, Washington, during a break between sessions.

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Sales Management I

The 2017 BTA National Conference schedule included eight educational sessions led by industry leaders: (top row, from left) Morgan; Amy; Staubitz; (middle row, from left) Kahrs; Johnson; Slawetsky; (bottom row, from left) Callinan; and Cargill.

Above: The dealer panelists were (left to right) Brett Butler, Excel Office Services, Los Angeles, California; Debra Dellaposta, Doing Better Business Inc., Altoona, Pennsylvania; and Gary Harouff, AIS, North Las Vegas, Nevada. Jennie Fisher of GreatAmerica Financial Services Corp. (right) served as moderator. Above right: Chris Stroud (left) and Dan Ray (center) of Accent Imaging, Raleigh, North Carolina, visit with Johanna Williams of eesyQ during a break.

n his 2017 BTA National Conference educational session, “Effective Sales Management,” Tom Callinan counseled dealer attendees about the importance of truly managing sales reps. Drawing on his experiences as a dealer, IKON executive and sales management consultant, he suggested that many dealerships may not have effective sales management practices in place. Sales reps must be properly developed on an ongoing basis, Callinan said, referencing the need to implement such practices as account planning sessions and post-call debriefs. “You need to develop people; that’s the manager’s number-one responsibility,” he said. “If you are not developing people and you are turning people over, you don’t have a turnover issue, you have a management issue.” Often, Callinan said, many sales managers are not properly trained to develop reps. In his own experience as a young sales rep, “development” meant “they put me in a conference room with VHS tapes all day and the next day I went cold calling,” he said, noting that few sales reps are able to “make it” long-term in the industry. “Why can’t they make it? Because all we ever talk to them about in this industry is: ‘What are you going to sell this month?’ That’s it.” Callinan asked, “What percentage of your customers do you believe you are able to retain?” He suggested that “85 percent” might be a common answer. “Let’s say that 5 percent disappear; they don’t buy from somebody else, but something different happens to them,” he said. “So, 10 percent of the people buying a new device are going to buy from somebody else.” Assuming the same holds true with competitors and 10 percent of their customers are going to switch vendors, “when is the best time to get into that customer so that you have a good chance of being the person they switch to? How far in advance of their decision?” Callinan asked. “I would say I want to get in there at least nine months in advance. But, if all you are ever talking to reps about is what’s going to close, you are sending a totally different message. You are sending them in the wrong direction.” That “wrong direction” leads sales reps to focus on quick sales of commodity products based on price, calling on the wrong contacts, Callinan says. “We have to get in there nine months before and have to talk to the right level,” he says. “We have to change the trajectory of the sale so that it’s not a price sale.” Ensuring it’s not a “price sale” means helping sales reps understand how to pursue the right person, Callinan said. “If you send people out cold calling, randomly knocking on doors, you have to be crazy,” he said. “They have this thing that’s called the Internet, and inside that Internet they have this application called LinkedIn. I don’t need to go after the lowest person in the company — the receptionist — and ask: ‘Who makes the decisions?’” The sales rep’s target is dependent on the company’s size, Callinan said. “If it’s under $15 million, it’s the owner,” he said. “If it’s between $15 million and $40 million, it’s the owner or the CFO. If it’s between $40 million and $80 million, it’s the CFO or the CIO. If it’s more than $80 million, it’s the CIO, the vice president of IT or the director of IT. Go look them up on LinkedIn.” No rep should be working to find the decision maker through the receptionist, Callinan said. “It’s crazy,” he said. “I had to do it in 1980 after I watched those VHS tapes and then made calls to ask: ‘Who makes the decisions?’ We don’t have VHS anymore and we should not be cold calling anymore.” n — Brent Hoskins www.offi cetechnol ogymag.com | Se p te mb e r 2017 | 17

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Top left: 2017-18 BTA President Dan Castaneda (left), 2017-18 BTA Vice President Bob Evans (middle right) and 2017-18 BTA President-Elect John Eckstrom (right), present the 2017 BTA Channel’s Choice award for Primary Product Line to Joe Contreras (center left), vice president of product and solutions marketing, Toshiba America Business Solutions. Top right: Evans, Castaneda and Eckstrom present the Channel’s Choice award for Secondary Product Line to Jim D’Emidio (middle left), president, Muratec America Inc. Bottom left: Castaneda, Evans and Eckstrom present the Channel’s Choice awards for Wholesale Distributor and Remanufactured Cartridges Provider to Chris Polek, CEO, Polek & Polek. Bottom right: Evans, Castaneda and Eckstrom present the Channel’s Choice award for Third-Party Leasing to Jennie Fisher, senior vice president and general manager, Office Equipment Group, GreatAmerica Financial Services.

Above left: 2016-17 BTA President Rob Richardson (left) presents the 2017 BTA Volunteer of the Year award to Castaneda during the awards ceremony on Aug. 16. Above right: Castaneda presents a Past President’s plaque to Richardson. 18 | ­w w w. o f f ic et ec hno lo g y m a g.c om |S e p t e m b e r 2 0 1 7

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Fight of the Century A look at printer OEMs versus copier/MFP OEMs by: Charles Brewer, Actionable Intelligence

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ears ago, companies that made printers sold into one market and those that made copiers sold into another. The products that each group offered were distinctly differentiated and so were the channels that sold the devices, as well as the markets themselves. But that was long ago. Ever since copiers went digital and moved onto networks, and copying and scanning features were bolted to A4 print engines, the markets have been converging along with the channels. Although printer and copier/MFP vendors have been sparring for decades, as markets have continued to decline over the past few years, the gloves have come off and the battle has gotten downright existential. Moves made recently by two of the industry’s most iconic hardware manufacturers, HP and Xerox, nicely illustrate the current battle. After years of declining sales, HP decided to invest more than a billion dollars to purchase Samsung’s printing business so it can establish itself in the A3 market. Similarly, when Xerox announced the largest product launch in its 110-year history earlier this year, company representatives said the move was, in part, to allow the manufacturer to capture more of the A4 market. Success for HP and Xerox is far from certain. In the past, each company has tried to move into the other’s market with less than stellar results. Can they succeed this time? We can only wait and see. Other leading hardware vendors have made moves like those taken by HP and Xerox recently — or they have signaled they will soon. Companies like Canon, Epson, Lexmark and Ricoh have all recently made important product announcements indicating that they are no longer willing to be locked out of a market segment because of the form factor of the machines they sell. Hardware Tells the Tale In terms of new product launches in the United States, last year was one of the most active we have experienced at my company, Actionable Intelligence. Vendors are offering a more diverse mix of machines than ever before as they subsegment the market to better meet the requirements of end users in specific verticals. This is especially true of A3

machines, which are now available with a wide range of feature sets and price points. Of the 313 new machines we wrote about in 2016, 44 percent were electrophotographic A3 devices and 36 percent were laser and LED A4 machines. Apparently, A3 devices are growing in popularity. The last time we experienced a year with more than 300 new machines was in 2012. Of the 330 units released that year, only about one-third were A3 and more than half were A4. The pace of product introductions has cooled a bit in 2017, but remains frenetic, with more than 200 machines debuting in the United States by the end of July. So far this year, A4 products have regained some ground and the A3 versus A4 split is roughly 50-50 among new electrophotographic devices. The copier/MFP companies are the ones driving the number of new A4 devices up, while the printer folks are releasing more new A3 devices. Along with its traditional A3 machines, Ricoh has introduced a number of A4 units in various product categories this year. The company updated its mid-tier A4 color MFP offerings with the launch of the Ricoh MP C307 and MP C407 machines, which sell for $4,589 and $5,499, respectively. At the lower end of the market, Ricoh upgraded its entrylevel A4 monochrome printers and MFPs in February by launching the single-function SP 325DNw and SP 377DNwX, and the multifunction SP 325SFNw and SP 377SFNwX. The www.offi cetechnol ogymag.com | Se p te mb e r 2017 | 19

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machines range in price from $169 to As you are probably aware, Epson has As copier/MFP $365 and allow dealers to pursue busimade some interesting announcements nesses with small or remote offices. Ricoh on the inkjet side along with HP. Epson companies seek to also recently released its SP 5300DN, has moved upmarket with the release of take market share SP 5310DN, MP 501SPF and MP 601SPF its WorkForce Enterprise WF-C20590, from their printer foes, monochrome A4 devices, which feature a 100-page-per-minute (ppm) A3 MFP printer manufacturers Kyocera laser engines. Pricing for these featuring the new page-wide Precision... are marching into machines ranges from $1,229 to $4,449. Core print head. Epson also released the The operating costs, which are about $.005 WorkForce Pro WF-C869R, a 24-ppm the A3 space. per page, are lower than other machines A3 color MFP that employs Epson’s Rein this class because Kyocera machines placeable Ink Pack System (RIPS) but feature imaging drums that can last the life of the machine. lacks Epson’s new print head. Epson also offers A4 maSince 2015, Canon has been actively expanding its selection chines with the RIPS technology, but nothing yet with the of A4 machines. While Canon is as serious in the market as its page-wide PrecisionCore print head in an A4 form factor, rival copier/MFP companies, it seems to have been more quiet although it seems like it is just a matter of time. With speeds about expanding its A4 lineup than its competitors have been. ranging from 60 to 80 ppm, HP released six new PageWide Presumably, the company does not want to make waves with inkjet MFPs, as well as 14 new A4 devices based on its Pageits longtime A4 print engine customer, HP, which markets Wide technology. LaserJets based on Canon technology. Regardless, this year alone, Canon launched more than a dozen new A4 color and So Far, So Good? black-and-white imageCLASS devices, along with several new HP and Xerox have made the heaviest bets that they can A4 machines in its imageRUNNER line. Last year, Canon also transform their respective businesses and move into new released a couple dozen new A4 machines. Hiroyuki Imamu- markets. Each company has completed corporate restructurra, senior vice president and general manager of marketing at ing that has resulted in the formation of new businesses where Canon U.S.A. Inc., opined earlier this year at the Canon One printer and copier/MFP sales will be the key to their long-term analyst event that the company now has the right mix of A3 success. While companies like Canon, Epson, Lexmark and and A4 machines to meet the diverse needs of business users. Ricoh have not implemented such dramatic reorganizations, I should note that the only other copier/MFP company that they recognize that the path to sustainable growth requires has brought to market a strong A4 line based on its own tech- moving into new segments of the office technology industry. nology is Konica Minolta. While the company has been active So far, it appears HP is on the right track. In April, HP’s in the United States this year with the acquisition of Muratec new LaserJet and PageWide Pro A3 machines began shipand the introduction of its new Workplace Hub IT ecosystem, ping. (The PageWide Enterprise portfolio, which includes A3 Konica Minolta has not released much new office technology units, will be available in the fall.) Early indications are that hardware in 2017. Last year, the company was focused on re- the machines are doing well. The company has reported it freshing its A3 machines and it has been several years since we experienced a boost to its A4 business as it contacted existhave seen much activity by Konica Minolta in the A4 market. ing and new channel partners about its A3 business. When As copier/MFP companies seek to take market share reporting improved financial results early this year, HP from their printer foes, printer manufacturers in addition to President and CEO Dion Weisler described Q2 as a breakHP are marching into the A3 space. In June, Lexmark Inter- through quarter for the printing business. Speaking with national unveiled the CS920 family of A3 color laser print- the channel news website CRN, Weisler credited HP’s chaners and the CX920 series of A3 color MFPs, which will be nel partners for the positive results in the printer segment released in the fall of 2017. Although pricing was not avail- in Q2, saying that they helped HP grow its printer business able at the time of this writing, it is clear that Lexmark is “up, up, up, up, up.” He added that they were also “really fallworking hard to compete in the mid-tier copier/MFP mar- ing in love with our A3 product portfolio.” ket. Last year, the company released a range of A4 color laser Xerox’s move into the A4 space has not been as successful printers and MFPs available exclusively through Authorized as HP’s foray into A3 — at least not so far. The company said Lexmark Business Solutions Dealers (BSDs), the company’s in August that while it improved gross and adjusted operatdealer channel. When the machines were introduced last ing margins, its revenue declined in Q2. The company’s bigyear, prices started at $2,996 for the C4150 color printer and gest product launch ever, which I noted earlier, took place in went up to $25,996 for the XC8160, which, at the time of this the first quarter, so the industry has watched to see if Xerox writing, is Lexmark’s highest-priced machine to date. improved installs (shipments) and equipment revenue as a 20 | ­w w w. o f f ic et ec hno lo g y m a g.c om | S e p t e m b e r 2 0 1 7

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pressures. The opposite was true for result. While the overall answer seems Installs in the midrange Ricoh’s printers, however, as unit shipto be “not yet,” some of the new A4 hardments fell nearly 12 percent, but revenue ware appears to have been well received and high end were rose nearly 2 percent. by the market. Installs improved in the down, however, and total Canon’s printer business is looking entry-level segment, which is primarily equipment revenue fell strong. Reporting second-quarter results A4 units. Installs in the midrange and sharply. Xerox blamed in July, Toshizo Tanaka, executive vice high end were down, however, and total this on the timing of president and CFO at Canon, said that equipment revenue fell sharply. Xerox during the first half of 2017, the compablamed this on the timing of product product introductions. ny completed the A4 refresh it began in introductions. Xerox’s VersaLink B400/ 2015. According to Tanaka, Canon is seeB405 and C400/405, which are entry-level A4 monochrome and color devices, were the first of the new ing double-digit unit sales growth of its new A4 devices. As machines to hit the market in Q1. Other new models were not the installed base of these new products grows, he said that Canon is also enjoying strong growth in toner sales for these available until later in Q2. Ricoh’s A4 products seem to be doing OK. Reporting its fi- machines. It was not clear, however, how much of the growth nancial performance for the period between April 1 and June Tanaka mentioned was generated exclusively by Canon and 30 in July, the company said total hardware and supplies how much came from gains that HP had in its LaserJet busisales dipped nearly 3 percent. Sales of its A4 color MFPs rose, ness. That will become more clear over time. Epson says that its move into the copier/MFP market is however, along with sales of A3 color MFPs. Total MFP revenue retreated almost 5 percent, while unit shipments rose going well. Reporting on its first quarter performance in 1.3 percent, suggesting that Ricoh is feeling some pricing July, the company said that the launch of its 100-ppm WorkForce Pro WF-C869R in the United States is off to a “smooth start” and similar machines sold into other markets are doing well. According to Epson, “The response from dealers and distributors in the U.S. and China has exceeded expectations, so we are confident in the growth potential going forward.” The company said that the best way to close deals on its higher-end inkjet office machines is to let customers experience their performance, so Epson is strengthening its marketing activity in this area. So, it seems that the moves being taken by certain companies to expand their businesses into new segments of the office-equipment market are proceeding on track. Is it sustainable or are these companies just picking low-hanging fruit? Well, that remains to be seen. The only thing for sure is that success will not be easy and competition is bound to grow even more fierce between the copier/MFP and printer manufacturers in the coming years. n Charles Brewer is president and founder of Actionable Intelligence. With more than 20 years covering technology, he was previously an editor for Inc. Magazine and ComputerWorld, and managing editor of The Hard Copy Supplies Journal. Actionable Intelligence launched its website in 2010 and, today, it is a destination site for news and analysis related to the hardware and consumables markets. Brewer is a popular industry speaker and presents regularly at various events in China, Europe and North America. He can be reached at (508) 528-1297 or cbrewer@action-intell.com. Visit www.action-intell.com. 22 | ­w w w. o f f ic et ec hno lo g y m a g.c om | S e p t e m b e r 2 0 1 7

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COURTS & CAPITOLS

Safeguards & Social Media How far can a non-solicitation agreement go? by: Robert C. Goldberg, general counsel for the Business Technology Association

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dealer’s most valuable asset is his (or her) customer base. That customer base can be at risk thanks to actions of both current and former employees. To protect their customer bases, many dealers utilize non-competition, non-solicitation and/or confidentiality agreements. In most instances, these agreements are effective, however, past safeguards are now colliding with social media services. Social media provides the instant communication of current events. One can quickly share a picture of his current activity to all those with whom he has a social media relationship. Likewise, a career change can quickly be broadcast to all. Does a former employee who updates his profile page on Facebook or LinkedIn do so in violation of a non-solicitation agreement? Clearly, the update publicizes a change of employer and contact information. Employers often wonder how far a non-solicitation agreement can go. Employers, who may pay extra money for employees to sign non-solicitation agreements, may be frustrated to later learn that their former employees have violated such agreements. With the rise of social media and its convergence into the business realm, potential violations through communications between current, prospective and even previous employees and customers have become more complicated than ever. A court recently considered the complex nature of these communications in the form of a LinkedIn invite. A company hired a branch sales manager who signed a nonsolicitation agreement. Part of the agreement required the manager not to solicit the company’s employees after he left the company. Suffice it to say, the manager left the company and, according to his former employer, “recruited or attempted to recruit its employees and agents by sending LinkedIn requests to connect.” Once connected on LinkedIn, three employees clicked on the former sales manager’s LinkedIn profile and saw that his new employer had open positions, as the advertisement was posted on the former employee’s profile. The question before the court was whether a LinkedIn invitation to connect can be considered an attempt to solicit employees in violation of a non-solicitation agreement. The former sales manager claimed that merely inviting one to connect on LinkedIn is not a prohibited solicitation. The sales manager put forward evidence to show that he did not send any direct messages to the three employees, but simply sent the standard LinkedIn request asking the three employees to form a professional connection with him through the social media platform.

The court agreed with the former employee. The court found dispositive the fact that the “invitations to connect via LinkedIn were sent through generic emails that invited recipients to form a professional connection. The generic emails did not contain any discussion of his new employer, no suggestion that the recipient view a job description on the employee’s profile page and no solicitation to leave their place of employment and join his new employer.” The individuals were free to accept or reject the invitation. A similar case of a beautician updating her profile page to show a new affiliation was found not to violate a non-competition agreement, as the individual did not seek a business relationship despite the fact that 60 percent of her former customers left her previous employer to follow her. Dealers should consider social media information in regulating post-employment activities. If employees are using social media to communicate with and friend dealership customers, those names should be designated as belonging to the dealership and confidential. An individual’s voluntary posting of names and affiliations on Facebook or LinkedIn makes that information public and, therefore, no longer confidential. By placing rules and restrictions on employee use of company information and participation on social media sites, confidentiality may be preserved. n Robert C. Goldberg is general counsel for the Business Technology Association. He can be reached at robert.goldberg@sfnr.com.

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EDUCATION CALENDAR September 21

Building My Business Webinar: “A Look at Current Office Technology Industry Trends” A variety of current trends associated with inkjet, color printing, MPS and solutions are driving change in how office technology dealers go to market in today’s business climate. In this webinar, Sheryne Glicksman of Keypoint Intelligence will share her insight on these trends, as well as review key industry statistics, address attendee questions focused on the BTA Channel’s greatest opportunities in 2018 and more. Visit www.bta.org/BuildingMyBusiness to register.

October

11-12 ProFinance 2.0 Salt Lake City, Utah With color, connectivity, software, MPS and MNS, the business has changed — and ProFinance has changed with it. Taught by John Hey and Todd Johnson of Strategic Business Associates, ProFinance 2.0 incorporates these changes into the industry model, including benchmarks for MPS. Visit www.bta.org/ProFinance to register. 19-20 Fall Colors Retreat - Hosted by BTA Southeast Asheville, North Carolina The 2017 Fall Colors Retreat, open to dealers from across the country, will feature: a dealer panel on breaking through revenue growth barriers; two educational sessions presented by industry leaders; round-table discussions with exhibitors; time to network with peers and exhibiting sponsors; and a cocktail reception and dinner at the historic Biltmore Estate’s Antler Hill Barn. Visit www.bta.org/BTAAsheville to register. 23

FIX: Cost Management for Service 2.0 Chandler, Arizona (suburban Phoenix) Successful BTA dealers use their service departments to maintain profit margins as new equipment sales margins decline. FIX, BTA’s popular service workshop, teaches attendees how to compute the cost of the service labor hour (service burden rate) and improve their overall service department profitability. Visit www.bta.org/FIX to register.

November 13

BTA Strategic Sales Semester The industry is shifting from transactional to strategic sales, and sales reps need new skills for this transition. The BTA Strategic Sales Semester, taught by Mitch Morgan and Chris Ryne of Growth Achievement Partners, consists of 13 45- to 60-minute online training sessions held every other week over six months. Each module includes skill-building exercises and field-based activities reps will be asked to complete. Visit www.bta.org/StrategicSales to register. For more information, visit www.bta.org/Education or call (800) 843-5059.

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BTA HIGHLIGHTS BTA would like to welcome the following new members to the association:

Dealer Members ABC Office Machines, Grants Pass, OR A.F. Smith Trading Co. Ltd., Hamilton, Bermuda DocuSense, West Chester, PA Executive Image Solutions, Lemoyne, PA Office Equipment Service, West Bay, Cayman Islands Premier Office Systems, Las Vegas, NV Rocky Mountain Competitive Solutions, Ogden, UT Royal Business Systems, Spokane, WA Standard Office Systems, West Collingswood, NJ Telovox, Brooklyn, NY Triumph Technology Group, Tustin, CA X-Digital, Escondido, CA Service Associate Members Crexendo, Tempe, AZ Morisey-Dart Group, Naples, FL Vendor Associate Members Liberty Laser Solutions, Marseilles, IL Mito Color Imaging, San Diego, CA For full contact information of these new members, visit www.bta.org.

Credit Card Processing Cayan’s free statement analysis provides a clear picture of what you are paying and what you can save. BTA members receive a $100 dues credit when they sign up with Cayan. Visit www.bta.org/CCProcessing for more information. For information on BTA member benefits, visit www.bta.org/MemberBenefits.

For the benefit of its dealer members, each month BTA features two of its Vendor or Service Associate members in this space. BTA Vendor Associate Member Midwest Copier Exchange is a leading remarketer for copier/MFPs and all office electronics. Its services include asset relocation, remarketing and recycling supported by the company’s in-house R2, ISO 14001 and 18001 certifications. With more than 25 years in business, the company’s experience and resources gives its customers the best total solution to maximize ROI, while adhering to the highest environmental standards. Midwest Copier Exchange is centrally located north of Chicago, Illinois, and its fleet actively services the broader United States. www.midwestcopier.com BTA Service Associate member Rainmaker Sales Support is dedicated to being your sales partner. The company, founded by a salesperson and comprised of salespeople, specializes in outbound cold calling, lead generation and appointment setting. Rainmaker supports your sales efforts, from setting appointments for you with the prospects you would like to meet, to staying in touch with your prospects after that first meeting, to trade show follow-up and client retention customer service calls. Rainmaker does the legwork that allows you to have the time to do what you do best — sell. www.rainmakersalessupport.com A full list of BTA Vendor and Service Associate members can be found online at www.bta.org.

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PRINCIPAL ISSUES

The Successful Business Exit It is not an event for the owner, it is a phase by: Jim Kahrs, Prosperity Plus Management Consulting Inc.

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nless you have been living under a rock, you have heard about the increase in acquisition activity in the industry. It seems there are new announcements weekly. With all of this activity comes the Monday-morning quarterbacking that inevitably follows. How much did the businesses sell for? Who are the buyers? Why are they buying? Why are the sellers selling? How long will this surge continue? Are values going up or down? The questions are endless. However, there is one question that seems to slip by: What are the keys to a successful exit? When considering why there has been so much activity, the answer is pretty straightforward. It is being driven by a combination of three factors. First, there are quite a few baby boomers who own office technology dealerships. By definition, a baby boomer is someone who was born between 1946 and 1964. Many of these business owners started their businesses after successful sales or service careers with larger companies. These businesses have grown with varying degrees of success. These owners are now anywhere from 53 to 71 years old. They are entering — or are already in — a different phase of life. Many are looking to make some changes. The second factor is the state of the industry as a whole. The traditional copy/print side of the business is stagnant at best. Growth is difficult to come by. Companies that are looking to grow have realized that acquiring others is a great strategy. It allows for fast, profitable growth, as many of the expenses of the selling company can be eliminated. And, finally, the third factor: Historically low interest rates and the availability of money from banks makes it easy and profitable to borrow money for acquisitions. However, with all of this potential opportunity there are too many dealership owners who have not had the successful exits they were hoping for. When considering the reasons for this, one seems to rise to the top of the list. Too many business owners view their exit as an event when, in reality, it is a phase in their businesses. Each phase in a business takes planning and preparation, and the success of each phase is often tied to the success of earlier phases. This universe operates in a certain pattern, whether we are talking about a person or another “living” thing’s (like a tree or a business) life. There are distinct phases that each will go

through. With a business, the first phase is startup. As mentioned, many of the baby boomers in the industry today started their businesses from scratch after a successful sales or service career with another company. Many started in their garages or basements. It likely took a lot of blood, sweat and tears to get the company to a viable point. This phase could be viewed as the business’s childhood, and it leads to the growth phase. In the growth phase, the business starts to take on a more formal look and feel. This phase includes hiring additional people and moving to a true office. A great deal of planning goes into this, as owners have to locate, interview and hire good candidates. They have to research locations that will be suitable and affordable. This phase could be viewed as the business’s adulthood. As noted, we have seen varying degrees of success in the growth phase. Some businesses have grown to a certain level and then plateaued, while others have continued to grow throughout their lives. However, like all living things, a business does not go on forever. After the growth phase, at some point all businesses will enter a retraction or decay phase. I have seen office technology dealerships enter this phase as strong, profitable and viable businesses, only to shrink to much smaller sizes, fighting to meet payroll. If unchecked, this deterioration will continue until the business is no longer viable. This leads to the need to take drastic action. Some have sold their businesses from positions of weakness while others have simply closed the doors. But this does not have to be the outcome. The mistake made in these cases goes back to understanding the phases of the business. Ideally, the business should go from startup to growth and then to exit before it can hit the retraction phase. In order to accomplish this, one must view the exit as a true phase of the business and plan accordingly. There are a number of ways to handle an exit. One can sell the business, as we have seen many do recently. A business can also be passed on or sold to the next generation, sold to employees or held by the owner, who replaces himself (or herself) with a management team that can continue the growth phase. The one thing each of these strategies has in common is the need for proper planning. This planning begins with the recognition of the exit as being a phase of the business. w w w. o f f i c e t e c h n o l o g y m a g . c o m | S e p t e m b e r 2 0 17 | 27

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Every business begins with a decision on the part of the owner(s) to get it started. Exiting a business also starts with a decision. One must decide when he wants to exit and how. I have had many clients tell me that they want to exit their businesses by the time they reach age 60 or 65. The timing is not important, but the decision is. Without a planned timeline, you are left with an ambiguous target that becomes impossible to plan for. With a timeline in place, you can plan for this phase of the business in the years leading up to it. Next, consider how you would like to exit. If the plan is to sell the business to a third party, you need to plan at least three to five years out. It would be even better to begin 10 years out. This gives you time to prepare the business to be sold at the best possible price, with the best possible terms. You will want to have clean books and records, a track record of profitability, a strong team and a plan to pass the business on to the new owner. If the decision is to pass the business on to the next generation, you need time to train that group for the task. You also need to work out how you will either be paid for the business, or continue to draw a salary to have the retirement lifestyle you want. If the decision is to sell to your employees, you need them to be trained and ready to take over, and you will have to work out how they (or the business) will be able to pay you. If you plan to retain ownership and replace yourself with a management team, you need time to hire and train the managers, and the business will need to have enough cash flow to not only support itself, but your retirement lifestyle needs as well. There is a lot to consider in a business exit. The keys to success lie in proper planning and having the time to bring those plans to fruition. By treating the exit of a business as a full-fledged phase instead of an event, you can put a spotlight on what is needed for success. One who attempts to handle his exit as an event is often disappointed to see that his options are limited and the value is not what he expected. As the old saying goes, “the one with the most options wins.” Treat your exit as a phase in the business life cycle and you will set yourself up to win. n Jim Kahrs is the founder and president of Prosperity Plus Management Consulting Inc. Prosperity Plus works with companies in the office technology industry to build revenue and profitability, and plan successful exit strategies. Kahrs can be reached at (631) 382-7762 or jkahrs@prosperityplus.com. Visit www.prosperityplus.com.

The timing is not important ... the decision is. Without a planned timeline, you are left with an ambiguous target that becomes impossible to plan for.

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SELLING SOLUTIONS

Time to Raise Your Sights? Secure customers; start targeting the corner office by: Troy Harrison, Troy Harrison & Associates

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roy, I just don’t understand it,” my friend was telling me, “I lost one of my best customers and I didn’t even have a chance to save them!” My friend is a long-time industrial salesperson and he had been calling on the particular customer he was lamenting for the past 12 years. “Twelve years!” he said. “I’ve been working with the stockroom manager and the maintenance mechanics, helping them solve their problems, for 12 years. And the guys who replaced me never even called on my contacts.” What happened was that my friend lost his customer to an integrator — and an integrated supply agreement. He was selling the company a small part of its plant’s consumable products and doing a great job of it. He had gotten used to competing and selling against other companies that did what he did. He had solid relationships with the implementers and influencers in the plant (the stockroom manager and the maintenance mechanics), but had never bothered to call on the plant manager, who was the ultimate decision maker. Then an integrator — a company that specializes in taking over all the consumables in a plant, from bearings to toilet paper — called on the plant manager and pitched the plant manager on vendor consolidation, back-office savings, better service through fewer vendors, etc. Where my friend had been focusing on the small issues of his own product and service superiority, the integrator went to the corner office and sold the plant manager on much bigger needs. This is the biggest trend I am seeing in sales today. I call it the “elevation of needs,” which basically means that salespeople who are selling products in a transactional fashion are seeing other salespeople take a more big-picture approach and selling solutions, using the products as tools. What these salespeople have figured out is that, if you sell a concept and a solution as part of a system, you get the products and the transactions. On the other hand, selling the products and transactions does not mean that you are solving the big-picture problem. A great example of this is the office technology industry. For years, salespeople in this industry have basically had a similar, transaction-focused sales approach. First, they find a customer with MFP(s) coming off-lease. Then they define the technology and functionality. Finally, it is typically a race to the bottom in terms of price and profit. As in many industries, there is a better way. Now, sharp salespeople are selling document management systems. These software products can manage the entire document life cycle,

from creation, to distribution, to archiving, and doing much of it electronically, empowering companies to retrieve documents more effectively and saving massive amounts of space that was used for storage. The MFPs end up coming along with the document management sale. Not coincidentally, profits are going up. Here is the other key to the document management sale. It is typically made at a higher level — the C-level, for instance — than the MFP sale, which can be handled by middle managers (who then have to ask permission from their bosses). So, what does this mean for you? It means that you better start thinking at a higher level than you are right now. You might not think that your product or service warrants the attention of the corner office, but I will guarantee you that someone else has figured out a way to do just that. And if it is not you, you are going to be that person’s victim. How do you do it? That is a little more difficult, but I can give you some guidelines and ideas to get you started. Identify the key business process. If you are selling a product category as a transaction, you are probably selling to a subset of a key business process (KBP). Look at our two examples above. My friend was selling a particular product category, but it was a subset of a KBP that could be best titled, “Buying Consumables.” In such a plant, “consumables” are typically separate from components of their finished goods; they were in the maintenance and related operations (MRO) category. Normally, MRO buying authority stays with low-level managers, such as the stockroom manager and the maintenance mechanics, but when you put together all the consumables used by the plant, it becomes a sizable enough number to get the attention of the plant manager. In the same fashion, MFPs and document management www.offi cetechnol ogymag.com | Se p te mb e r 2017 | 29

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sell at a higher level than you are used to. become part of a key business process You might need to create a new infomercial that could be titled, “Written CommunicaIdentify your decision for the pitch or completely redo your whole tions.” Again, its components do not justify maker. For a smaller thought process. the attention of the corner office, but the company, that is obvious; You may also need to do other things, KBP does. your decision maker such as find partners with whom to inIdentify your decision maker. For a is the corner office — tegrate, but it is worth it. In the future, I smaller company, that is obvious; your depredict that more and more business concision maker is the corner office — ownowner, president, CEO, tracts are going to be won this way. Time to er, president, CEO, plant manager, etc. plant manager, etc. start elevating your thinking. n For larger companies, you might want to Troy Harrison is the author of “Sell Like choose a C-level executive below the CEO — You Mean It!” and“The Pocket Sales Manager.” for instance, CFO, CMO, CIO, etc. The key to remember is that He is a speaker, consultant and sales navigator who helps KBPs are decided by C-level executives, not middle managers. companies build more profitable and productive This means that you need to be prepared to sell at that level. sales forces with his cutting-edge sales training Articulate the win. You are probably already accustomed and methodologies. For information on booking to selling the “win” to your current contacts. The wins there come from better products, better service, etc. However, at speaking/training engagements, consulting or to sign up for Harrison’s weekly e-zine, call the C-level, the “win” must be more global in nature and be something that affects the big picture of the company. That (913) 645-3603 or email troy@troyharrison.com. Visit www.troyharrison.com. puts a far different burden on you, because you might have to

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