Upsize Minnesota March/April 2023

Keeping up with culture

Making sure employees stay engaged in hybrid and virtual settings

“This is not an authoritarian regime,” says Adam Meyer, principal at Studio M Architects

SELLING YOUR COMPANY IN AN AUCTION

MAINTAINING PURPOSE IN RETIREMENT CATCHING UP WITH KEVIN ORTNER, CEO OF RENTERS WAREHOUSE

Maybe you can’t predict the future of inflation, interest rates, or supply chains. But a good banking partner can still help bring the possibility for growth, expansion, or whatever goal a business owner might have to life.

What can we make possible for your business?

In a climate of uncertainty, we make the possible, possible.

CONTENTS

March • April 2023 • Vol. 22 No. 2 • www.upsizemag.com

PAGE 14

Cover story

Virtual and hybrid workplaces have created opportunities to look at hiring and employing people differently, but how do companies maintain and strengthen a productive culture with people in the office less often or not at all?

BY ANDREW TELLIJOHN

Cover photograph by Jonathan Hankin

PAGE 4

Founder’s Forum:

Craig Kruckeberg, owner of Stinar, talks selling his business, reducing stress and coping with loss with Upsize Founding Editor Beth Ewen

PAGE 4

Staff list:

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

Upsize Minnesota (USPS 024-029) is published bi-monthly by Broad Axe Media, 2908 W 71 1/2 St., Richfield, MN 55423. Periodicals postage paid at St. Paul, MN and additional mailing offices.

Postmaster: Send address changes to Upsize Minnesota, PO Box 23238, Richfield, MN 55423-0238

BUSINESS BUILDERS

PAGE 6

MERGERS &ACQUISITIONS

Businesses could receive more offers and sell at a higher price going through an auction by Sam Thompson, Transitions in Business

PAGE 8

RETIREMENT

Helping your employees become more resilient can build loyalty and boost your bottom line by Bethany Krueger, Prouty Project

PAGE 10

SUCCESSION

Navigating the exciting and stressful issues related to generational transfer of a business by Jon Schindel, Schindel Segal Mendoza

PAGE 14

TECHNOLOGY

Tips for making sure your new website works for you and your business needs by Dave Meyer, BizzyWeb

COLUMNS

PAGE 20

FEATURE

You’ve gone to the trouble of advertising for, interviewing and hiring a new employee. Onboard them well so they’ll feel welcome and want to stay

PAGE 22

CATCHING UP

Kevin Ortner, CEO of Renters Warehouse, talks about how his company became a leader in the single-family housing rental market, how he stays ahead of planning for future growth and what he’s done to maintain a productive company culture

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FOUNDING PUBLISHER

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EDITOR AND PUBLISHER

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Together in loss and in business

Ihad expected a rollicking good time when I called up Craig Kruckeberg, one of my favorite Minnesota entrepreneurs, who took over his father’s company, heavy-duty truck supplier Minimizer, when it had less than $1 million in revenue and grew it to a $60 million sale to a private equity firm.

I had just read his book, “If Success Comes Overnight, You’re Going to Jail!” and it was vintage Kruckeberg: brash, profane, funny and honest.

“Never let a money guy—who cares nothing for vendors, employees or customers, take control of a company,” he wrote.

“When you’re high-end price-wise in any space, there are always assholes who follow along with ‘just as good, but cheaper.’ We had those brain-dead numb-nuts swarming in and out of our product categories all the time,” he continued.

He even called people in the press, like me, “thieves and whores,” a point I planned to raise with him when we talked. “Except for me, right Craig?” I planned to say.

But then we connected and Kruckeberg was … subdued. He told the story of selling his company—he decided to do it when his accountant told him how much he could get. Sixty million, minus 39 percent in taxes, and he said let’s go.

“My executive team, I honestly thought we were friends,” but the day after he sold, “I thought I’d got the plague or something,” he reflects. “I love the industry. I miss the industry now, after selling.”

He’s still plenty busy, but with age the losses mount. He bought Stinar, a manufacturing company, out of bankruptcy and is working to revive it. His wife, Robyn, said, “I am so, so glad you got Stinar, because otherwise you’d be home every day.”

He and Robyn, who has M.S., used to live downtown but now have a place in Mound on Lake Minnetonka and were told by her doctors to reduce the stress in their lifestyles. “We used to live

downtown. There’s something to do 24/7,” but at the lake, “I pray somebody goes by on the boat and at least waves.”

Then I realized: Kruckeberg is like all of us, who made it through the pandemic but with profound loss along the way. We at Upsize lost our founder, Wes Bergstrom, who brought us along on this journey to create a magazine.

My husband lost Tom Boerboom, his mentor in a career of service to seniors whom he greatly admired. We lost our beloved daughter, one of the many who died from deaths of despair during the pandemic, poisoned by street drugs laced with fentanyl.

You, dear readers, all have your own losses I am certain, and my heart goes out to each of you. I urge you to reach out, to tell me about what you’re going through, to contact someone else you haven’t spoken to in a while. It helps to know we’re together in loss yet still moving forward.

I asked Kruckeberg about his biggest lesson learned, as an entrepreneur.

“If you just go, just go do it, every day. Whether it’s a painful meeting, it’s just every day, you’ve got to do it. Nobody’s going to do it for you. Nobody’s going to believe in it like you do.”

I would add yes, but also: go do it together.

—Beth Ewen founding editor bewen@upsizemag.com

More than ever, the world is flooded with financial information. Who do you trust to help prioritize what really matters? To keep your emotions at bay and your plans on schedule? The team that sits on your side of the table, with you. That can design a unique and customized financial services experience for you, around you. The valuesdriven partners who take the notion of continuous, comprehensive, and coordinated wealth management to obsessive, highly personalized new levels. That’s advice driven by advocacy®. That’s JNBA.

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Chairman & CEO JNBA Financial Advisors

mergers & acquisitions

Selling your business without a price in an M&A auction

Manage your cash flow in a few simple steps

by Craig Veurink

by Sam Thompson

TIPS

Do you know the value of your business? Many small business owners don’t, plus it’s not uncommon for them to have the majority of their net worth tied up in their business.

So, it’s important they receive top dollar for their “baby” when they decide to sell.

this past year we saw a buyer pay 89 percent more than expected.

What exactly is an M&A auction?

TIPS

1. Never commit to a sale after hearing from one potential buyer. It restricts the owner’s negotiating potential.

1. Set a realistic goal for when you want to break even. This will help you to focus your efforts and provide a numerical benchmark for projecting your cash flow in the near future

2. There are various forms of auctions, yet they all involve competitive bidding. Businesses go to market without a set price and buyers must follow scheduled timelines to continue the process.

2. Put cash flow before profits. It might seem counterintuitive, but if you aren’t organizing your cash flow, you’ll run into problems that a profitable quarter might not be able to fix

3. Smaller “Main Street” businesses might not be great candidates for an auction. Lower middle market companies and up typically are pursued by more sophisticated buyers comfortable with auctions.

3. Secure credit ahead of time. Most small business owners should secure as much credit as possible. This is the best way to be prepared for the unexpected

When a business owner decides to sell, their first step should be getting a valuation. This usually involves determining the value of their hard assets and goodwill using a multiple of cash flow (using either earnings before interest, taxes, depreciation and amortization or seller’s discretionary earnings). The next step is understanding what price they are comfortable accepting and working with an M&A adviser to get their business ready to go to market. What price will they put on their business? Do they decide to go to market without a price and offer an M&A auction?

Small businesses are usually founded by entrepreneurs who have a unique vision and a passion that drives them to work late hours, take chances and believe in what they’re doing. But, just as Thomas Edison once said that genius is 1 percent inspiration and 99 percent perspiration, successfully running a small business requires rolling up your sleeves and putting in significant time on more mundane, day-today matters.

An auction entails more work. Yet, if done effectively, it can provide a much better offer, including a higher price and better terms. Due to the growth in private equity and the large amount of funds PE firms have available for small business investments, auctions have become more popular the past 10 years.

You can be driven, impassioned and have a great idea to fill a niche or serve customers in new ways, but if you don’t attend to the details of the business, you can create for yourself a heap of problems.

4. Businesses that do well in auctions have many potential buyers. Owners need to have prepared the business for a sale by removing themselves from the process, having a strong team and minimal concentration of vendors or customers.

4. Consider using a payroll service. Having the professionals take care of collecting payroll taxes saves them an enormous amount of time, helps streamline their cash flow

Here, we’ll look at one of the most important of these business details: managing cash flow. Especially for early startups, knowing how much cash is coming in and going out, and accurately forecasting sales and expenses, is key to maintaining your company’s health.

5. Common auctions take four to six months and involve contacting more than 100 potential buyers, reviewing up to 15 indications of interest and selecting a buyer from multiple letters of intent.

5. Schedule your payments. Don’t go delinquent but do divide your payments into categories such as “must pay,” “important to pay” and “flexible payment terms.” This can help keep sufficient cash on hand.

Often, a business owner will be contacted by one buyer and mistakenly begin the selling process. Talking to only one buyer restricts the owner’s negotiating potential and transfers much of their leverage to the buyer. The seller finds themselves in the buyer’s “dictated” process that can include delays and retrading (reducing the price during the process).

No matter where you are in your business, keep these things top of mind:

1. Know when you will break even

Every small business owner keeps at the front of their mind the question:

Businesses sold during an auction process typically sell for 10-20 percent higher than the price our client is willing to accept. In one transaction

There are various forms of auctions, yet they all include a process that involves competitive bidding. The business goes to market without a set price, buyers need to follow preestablished timelines to continue the process and the intermediary follows a protocol to maintain confidentiality (such as using blind profiles and securing non-disclosure agreements).

“When do I start to turn a profit?”

Rather than wonder, set a realistic goal for when you want to break even. This will help you to focus your efforts and provide a numerical benchmark for projecting your cash flow in the near future.

2. Put cash-flow management before profits

Auctions are either formal or informal. The formal auction has a well-defined process with the buyers knowing they are in an auction. An informal auction differs in that the buyers are aware there are other bidders, yet they may not consider it an auction.

It is important to point out, should a business owner agree to an auction, they are not obligated to sell at the best price and/or terms.

Businesses that are successful in an M&A auction

This might seem counterintuitive, since profits are how you survive. However, if you aren’t organizing your cash flow, you’ll run into problems that a profitable quarter might not be able to fix. Keep things organized and well managed so you can be ready for whatever success comes your way.

3. Secure credit ahead of time

Not all businesses are right for an auction. Normally, Main Street businesses (those that sell for $2 million or less) are listed with a price and without set timelines. The buyers tend to be individuals or strategic buyers that insist on knowing the seller’s expected price.

Lower middle market businesses (those that sell for between $2 million and $50 million) and middle market businesses (those that sell for over $50 million) are good candidates for an auction. Buyers for these businesses tend to be more sophisticated and understand the auction process. The buyers are strategic and private

Too often, small business owners wait until they need it to secure credit. This can cause a lot of unnecessary stress, or worse. Talk to experienced business owners in your area and industry ahead of time to know how much revenue you’ll need up front. Take a realistic look at the situation and plan. You might have sufficient cash reserves or a rich uncle who is only a call away, but most small business owners should secure as much credit as possible. This is the best way to be prepared for the unexpected.

equity firms that know business values and are comfortable participating in a bidding process.

A business that will do well in an auction has many potential buyers. To be successful in an auction the business owner needs to have done a good job of preparing their business for a sale by removing themselves from the business, minimizing customer and vendor concentration and having in place a strong management team.

The owner needs to understand an auction involves talking to numerous buyers and will take time; an auction can take four to six months, if done properly. A common auction can involve contacting more than 100 potential buyers, reviewing five to 15 indications of interest (IOI) and selecting a buyer from five to 10 letters of intent (LOI).

What does an M&A auction include?

The first month includes preparing the marketing materials. First, the blind profile (one pager that whets the buyer’s appetite without letting them know who or what the business is), then the confidential information memorandum or CIM (book on the business that is sent to the buyer after the non-disclosure agreement is signed and offers enough information about the business for the buyer to make an offer).

At the same time the marketing materials are created the buyer strategy is established. Who will be contacted and how (emails? phone calls? websites? a combination of all three?).

Months two and three include vetting buyers, sending the blind profile and CIM and receiving IOIs.

Months three and four include selecting the IOIs, inviting buyers into

the data room and buyer meetings. Next, the field of buyers is narrowed down to those that will be asked to submit an LOI. At this time, the data room will be updated. It’s important to note, all information is shared to buyers equally (no one buyer is favored) throughout the auction process.

By the end of the third and fourth months, the winning LOI should be selected. This buyer now has exclusivity and due diligence begins (normally 45 – 60 days) with a signed purchase agreement and closing to follow.

Should the transaction not go through with the selected buyer, there should be enough buyer interest that a buyer that was not selected may agree to revisit the transaction.

As a buyer, there are things you will want to do to make sure you don’t miss out on a business you’ve had your eye on should one hit the market. Be ready to take action once you receive the blind profile. Follow the auction strategy and timelines and make sure your financing is in place.

As a seller in an M&A auction, the value of your business can be driven up through the process that allows the perceived value of your business to determine the price paid instead of the value on paper. Successfully selling your business in an M&A auction will ensure the largest piece of your net worth becomes a valuable reality.

Contact: Sam Thompson is the president and founder of M&A firm Transitions

In Business: 952.405.8470; sthompson@transitionsib.com; www.transitionsib.com; www.linkedin.com/in/samthompsoncbi

“An auction entails more work. Yet, if done effectively, can provide a much better offer, including a higher price and better terms.”

Sam Thompson Transitions in Business

The next act: prepping for retirement

by Bethany Krueger

Manage your cash flow in a few simple steps

by Craig Veurink

TIPS

When you think of the word retirement, what comes to mind? For many it’s 401k planning, travel, new hobbies, giving back, more golf, family time and being untethered to the hustle of what has been. As we think of our own retirement, it can also be uncertain, uncharted territory. The closer we get, the more trepidation it can cause.

TIPS

1. Set a realistic goal for when you want to break even. This will help you to focus your efforts and provide a numerical benchmark for projecting your cash flow in the near future

1. Keep stretching yourself by doing new and different things, such as going on adventures, reading multiple perspectives and challenging your current approach.

2. Put cash flow before profits. It might seem counterintuitive, but if you aren’t organizing your cash flow, you’ll run into problems that a profitable quarter might not be able to fix

2. Whether it’s giving back to the community or something else, figure out what gives you purpose.

3. Secure credit ahead of time. Most small business owners should secure as much credit as possible. This is the best way to be prepared for the unexpected

3. Begin planning now what retirement might look like. Everything you do is an input to your plans. There’s no need to finalize them now but keep it in mind as you accumulate experiences.

4. Consider using a payroll service. Having the professionals take care of collecting payroll taxes saves them an enormous amount of time, helps streamline their cash flow

4. Get curious and get to know people. Evidence suggests creating new connections is well worth it for our long-term well-being.

5. Schedule your payments. Don’t go delinquent but do divide your payments into categories such as “must pay,” “important to pay” and “flexible payment terms.” This can help keep sufficient cash on hand.

5. Don’t lose sight of what you’ve done. Some find fulfillment in retirement finding ways to contribute to that field in different ways.

Small businesses are usually founded by entrepreneurs who have a unique vision and a passion that drives them to work late hours, take chances and believe in what they’re doing. But, just as Thomas Edison once said that genius is 1 percent inspiration and 99 percent perspiration, successfully running a small business requires rolling up your sleeves and putting in significant time on more mundane, day-today matters.

Use the word retirement in front of a group of individuals who are approaching it, are in it or have successfully made the transition and, for most, they’ll tell you they dislike the word. Or rather, prefer a different label. At least that was what 12 successful professionals expressed when invited to our offices in January for a discussion on retiring with purpose.

You can be driven, impassioned and have a great idea to fill a niche or serve customers in new ways, but if you don’t attend to the details of the business, you can create for yourself a heap of problems.

Here, we’ll look at one of the most important of these business details: managing cash flow. Especially for early startups, knowing how much cash is coming in and going out, and accurately forecasting sales and expenses, is key to maintaining your company’s health.

No matter where you are in your business, keep these things top of mind:

1. Know when you will break even

Over our careers, we’ve worked to build our resumes by saying yes to opportunities, networking at events and experiencing professional development to grow our skill set. We’ve done this all in the hopes to achieve, make a difference, demonstrate our worth. So, it’s not surprising that after we’ve spent much of our lives in pursuit of the next great thing, that when it comes time to slow down the career train, we’re anxious and want to avoid the screeching halt. Turns out we don’t have to be nervous (Okay, you can be a little nervous!) if we allow purpose to be present in negotiating the transition.

Charles (Chuck) Squires, who’s retired from Robert Half (fully now!)

Every small business owner keeps at the front of their mind the question:

“When do

I start to turn a profit?”

Rather than wonder, set a realistic goal for when you want to break even. This will help you to focus your efforts and provide a numerical benchmark for projecting your cash flow in the near future.

shared an early draft of his presentation, “Stretching in Retirement with Purpose.” Through his storytelling we learned about paper routes, interviewing Jackie Robinson, his faith, schooling at the University of Minnesota, his service in Vietnam and his dedication to lifelong learning. These experiences have led him to three important themes he discovered over his retirement years: how to stretch, find purpose and connect.

Stretch — Keep doing new and different things by going on adventures, reading multiple perspectives, and challenging your current approach. Chuck’s perspective reminds us of one of our favorite Prouty Project quotes by Oliver Wendell Holmes, “A mind stretched by a new experience can never go back to its old dimension.”

2. Put cash-flow management before profits

This might seem counterintuitive, since profits are how you survive. However, if you aren’t organizing your cash flow, you’ll run into problems that a profitable quarter might not be able to fix. Keep things organized and well managed so you can be ready for whatever success comes your way.

3.

Secure credit ahead of time

Purpose — Know what drives you. For Chuck, it’s giving back to others in his field and in his community. I love the quote he shared with us that day, “You can be the world to someone by doing something for the world.”

Connect — Get curious, get to know other people and treat them with respect. Wherever you maintain and create new connections, evidence suggests it’s well worth it for our long-term well-being. Through mentoring and his faith-based community, Chuck has continued building his intentional network.

As Chuck shared his memories and

Too often, small business owners wait until they need it to secure credit. This can cause a lot of unnecessary stress, or worse. Talk to experienced business owners in your area and industry ahead of time to know how much revenue you’ll need up front. Take a realistic look at the situation and plan. You might have sufficient cash reserves or a rich uncle who is only a call away, but most small business owners should secure as much credit as possible. This is the best way to be prepared for the unexpected.

Resources shared by group:

“Portfolio Life: The New Path to Work, Purpose, and Passion After 50”

by David Corbett

“Necessary Endings,”

by Dr. Henry Cloud

“What do you Want to be When You Grow Old?”

by Richard Leider and David Shapiro

“From Strength to Strength: Finding Success, Happiness, and Deep Purpose in the Second Half of Life,”

by Arthur C. Brooks

“The 3 Phases of Making a Major Life Change,”

by Herminia Ibarra

“The 4 Phases of Retirement,”

by Dr. Riley Moynes TED TALK

• Liberation (vacation)

• Disappointment (loss and lost)

• Experimentation (how can I make my life meaningful again?)

• Discovery of Purpose

learning, the group listened, smiled and nodded. It was clear they were in sync. And for each person, this is an individual exploration.

Jitesh (JR) Mehta, from JRM Consulting, shared this reflection about retirement: “I was afraid to be idle the entire day with no accomplishments to look back on, nothing to engage my intellectual mind with and no real drivers in my retired life. It seemed like I would have no purpose in life even though I was surrounded by grandkids, hobbies, a cabin to hang out at, friends to share drinks and

evenings and games with, etc.”

Even with these connections, JR was still missing purpose and fulfillment in what he calls ACT II. “Thus, here I am in ACT III of my life … engaged, contributing to the field I have spent the past 45 years working in. I am happy, busy and feel fulfilled.”

For me, as a 45-year-old in the middle of my career, retirement has always been about my 401k, financially planning for the life I think is in store for me when I retire. So, as I sat around the table as the youngest person in the room listening to the careers of these accomplished professionals, I realized there’s no need to delay thinking about how to retire with purpose. The time is now. The blueprint is right in front of us. The good news? All the work we’ve done and will do are inputs to our retirement plans. It’s what you’ve already been preparing for. Who and how do you want to be in retirement? Work it backward. Work it forward. Just work it out.

We encourage you to consider what your strategy for retirement can look like or if you prefer, the next phase of your life. And as Chuck would say, “don’t forget about the drivers that will help you retire with purpose.” Turns out, all the skills you’ve built to stretch your limits, find meaningful opportunities and build relationships, will be very handy (and needed) in life’s next adventure.

“All the work we’ve done and will do are inputs to our retirement plans. It’s what you’ve already been preparing for. Who and how do you want to be in retirement? Work it backward. Work it forward. Just work it out.”

Bethany Krueger

The Prouty Project

banking

BUSINESS BUILDERS

Ins and outs of family business succession planning

Manage your cash flow in a few simple steps

by Jon Schindel

Craig Veurink

The transition of a family business to a younger generation is an exciting, but nerve-wracking time for both sides of the deal. The older generation (sellers) is spending more and more time away from the day-to-day operations of the company and enjoying the fruits of their labor but is also confronted with the fact that failing to create and implement an exit plan can lead to the company’s demise. And, in many cases, the younger generation (buyers) has been participating in running the company and developing their own visions for a new era for the company.

Once the parties have agreed in principle on the timing of the transition and to some broad deal terms, an attorney is needed, not just to draft up relevant purchase agreements and promissory notes, but also to come up with creative solutions that give the sellers a modicum of control until they are paid off.

ownership interests at a discount it would be beneficial to have the valuation also provide the range of value based on such discounts. The valuation used for the succession plan should be less than 12-months old so that it reflects the current value of the company.

• Purchase/sale of ownership interest

TIPS

TIPS

1. Set a realistic goal for when you want to break even. This will help you to focus your efforts and provide a numerical benchmark for projecting your cash flow in the near future

1. Sellers need to retain power over some decisions in a transition to younger family members to ensure they’re protecting their ability to get paid.

2. Even within family, the interests of buyer and seller will be averse to each other during the transaction. Each side should retain their own attorney to protect their interests.

2. Put cash flow before profits. It might seem counterintuitive, but if you aren’t organizing your cash flow, you’ll run into problems that a profitable quarter might not be able to fix

3. Secure credit ahead of time. Most small business owners should secure as much credit as possible. This is the best way to be prepared for the unexpected

3. Even if the company is being gifted or sold at a discount, parties must establish a company value for tax purposes.

4. Succession plans rarely assume full cash payment by the buyer, which likely necessitates a promissory note. Both sides should be motivated to ensure the payment schedule works from a company cash flow standpoint.

4. Consider using a payroll service. Having the professionals take care of collecting payroll taxes saves them an enormous amount of time, helps streamline their cash flow

5. Schedule your payments. Don’t go delinquent but do divide your payments into categories such as “must pay,” “important to pay” and “flexible payment terms.” This can help keep sufficient cash on hand.

5. Gifting of ownership interests are a common transition mechanism for sellers, often in conjunction with a partial sale. Set a specific plan for the timing of gifts to provide certainty to buyers.

Legal representation

When attorneys are retained to draft the documents for the succession plan there are technically at least three parties involved: 1) the company, 2) the seller and 3) the buyer. There may be more if there are multiple sellers and/or buyers.

Small businesses are usually founded by entrepreneurs who have a unique vision and a passion that drives them to work late hours, take chances and believe in what they’re doing. But, just as Thomas Edison once said that genius is 1 percent inspiration and 99 percent perspiration, successfully running a small business requires rolling up your sleeves and putting in significant time on more mundane, day-today matters.

You can be driven, impassioned and have a great idea to fill a niche or serve customers in new ways, but if you don’t attend to the details of the business, you can create for yourself a heap of problems.

The company and the sellers are often times synonymous with each other, but the interests of the sellers and buyers will be in competition to each other as the details of the transaction are drafted, even when both sides are family. It is important for each party in the transaction to consider having their own attorney to protect their unique interests in the transaction.

Purchase/sale of the business

• Valuation

Here, we’ll look at one of the most important of these business details: managing cash flow. Especially for early startups, knowing how much cash is coming in and going out, and accurately forecasting sales and expenses, is key to maintaining your company’s health.

No matter where you are in your business, keep these things top of mind:

1. Know when you will break even

Every small business owner keeps at the front of their mind the question:

Before any aspects of a succession plan can be implemented the value of the company must be established for tax purposes. The sellers can certainly sell their ownership interests at a discount, or even gift them, but a baseline value of the company needs to be established for tax purposes under all of these circumstances. If the sellers intend to sell the

Once the valuation is established the parties will need tax advice as to whether the seller’s ownership interests should be purchased by the buyer or redeemed by the company. There are certain scenarios that justify the sale of the ownership interests based on two transactions (direct purchase and company redemption) but that structure would be based on a tax adviser’s recommendation. The documents associated with these two versions of the sale/purchase are very similar in construction but the distinction is in the tax implications of each option.

“When do I start to turn a profit?”

Rather than wonder, set a realistic goal for when you want to break even. This will help you to focus your efforts and provide a numerical benchmark for projecting your cash flow in the near future.

2. Put cash-flow management before profits

Many companies do not do a good job of keeping track of ownership changes over time and understanding the current ownership structure is key to developing the transition model. The purchase/sale document is a good place for a reset, to make sure to clearly articulate the ownership structure prior to the transaction and to articulate the ownership structure after the transaction has taken place.

The terms of the purchase agreement need to contain several key elements. These include:

This might seem counterintuitive, since profits are how you survive. However, if you aren’t organizing your cash flow, you’ll run into problems that a profitable quarter might not be able to fix. Keep things organized and well managed so you can be ready for whatever success comes your way.

3. Secure credit ahead of time

1. The purchase price and payment terms, including terms of a promissory note (term and interest rate) and pledge agreement

2. Additional consideration: participation in company benefit plans, retention of company vehicle, reimbursable expenses and other fringe benefits

3. Post-closing obligations, such as:

• Indemnification of buyer by company;

• Mutual indemnification in the case of material misrepresentations;

Too often, small business owners wait until they need it to secure credit. This can cause a lot of unnecessary stress, or worse. Talk to experienced business owners in your area and industry ahead of time to know how much revenue you’ll need up front. Take a realistic look at the situation and plan. You might have sufficient cash reserves or a rich uncle who is only a call away, but most small business owners should secure as much credit as possible. This is the best way to be prepared for the unexpected.

• Commitment to seek release

of seller personal guaranties;

• Promissory note and pledge agreement.

Very few succession plans assume full cash payment by the buyer. The parties will need to negotiate the payment terms of a promissory note. They will want to be mindful that the payment schedule works from a company cash flow standpoint. Some note payment terms will provide an acceleration of principal payments based on the company achieving certain financial benchmarks. In addition, the buyers should be required to execute a pledge agreement which allows the sellers the remedy of retaking certain rights in the ownership interest in the case of default on the payment schedule.

Gifting

Gifting of ownership interests is a common transition mechanism for sellers and is often done in conjunction with a partial sale. An effective succession plan will have specifics about the timing of the gifts (annually, every other year, etc.) in order to provide certainty to the buyers. Instead of a lump-sum gift, sellers often choose to gift certain percentages of their ownership over time for tax planning purposes.

Post purchase/sale control

Because the sellers help to finance the buyout, their financial interests are still at risk until any note is paid in full. It is important for the sellers to continue to have a voice, or even veto power, on certain business decisions.

In the context of an LLC Operating Agreement, using a manager-managed version of the LLC can be an effective tool. The buyers can be given control of the day-to-day operations but the sellers would be elected to the board of directors on a permanent basis to control fundamental decisions affecting the company’s viability until the earlier of the payoff of any promissory note, the death/

disability of the seller(s) or the resignation of the seller(s). Such decisions which the sellers have veto power over could include the following:

• The sale or merger of the company or the addition of new owners;

• Changing the salaries of any member or the manager;

• Approval of any distributions to any member;

• The borrowing in excess of an agreed-upon threshold or the giving of guaranties of the company or the sellers;

• Any single transaction, such as a capital expenditures or lease of equipment or real estate in an amount exceeding an agreed-upon threshold.

Surrendering this kind of control may be onerous to the buyers but they need to understand the risk the sellers still carry and their reliance on the continued success of the company. The updating of the company operating agreement or bylaws simply acts to codify the powers that the sellers are going to keep during repayment.

Update to buy-sell terms

As ownership transitions to the buyer(s), the typical buy-sell provisions addressing the death/disability of a member/shareholder may also need to be updated. It is important to consider the buy-sell provisions from the perspective of the seller(s) and the perspective of the buyer(s) and to have the buy-sell terms be consistent with the estate planning intentions of the sellers. There is no formula to succession planning and it is important to spend time with the clients understanding what their goals are and what their concerns are as the business leadership transitions to the younger generation.

Contact: Jon Schindel is a partner at the Schindel Segal Mendoza law firm: 952.358.7406; jschindel@ssm-lawfirm.com; www.ssm-lawfirm.com; in/jonschindel

“Because the sellers help to finance the buyout, their financial interests are still at risk until any note is paid in full. It is important for the sellers to continue to have a voice, or even veto power, on certain business decisions.”

Jon Schindel Schindel Segal Mendoza

banking

BUILDERS

Making your website work for you

by Dave Meyer

Manage your cash flow in a few simple steps

by Craig Veurink

Every business needs a home on the web and technology has gotten good enough that almost anyone can create a decent page using tools like HubSpot, WordPress, Squarespace and many more.

The trick is to create a site that helps you grow your business. Here are the most important things to know before you build or redesign your company’s website.

TIPS

Make sure you’re findable on search engines. You’ve got to be findable on Google and other engines and you should optimize your content to improve the odds of showing up well in a search (otherwise known as SEO or Search Engine Optimization).

TIPS

1. Set a realistic goal for when you want to break even. This will help you to focus your efforts and provide a numerical benchmark for projecting your cash flow in the near future

1. Make sure your website meets your goals. Those could include generating sales, leads or providing information about your business, but should not be just “getting more clicks.”

2. Put cash flow before profits. It might seem counterintuitive, but if you aren’t organizing your cash flow, you’ll run into problems that a profitable quarter might not be able to fix

2. Don’t make your website a brochure. It should foster conversation with your visitors and gently guide them to the solution you provide.

3. Secure credit ahead of time. Most small business owners should secure as much credit as possible. This is the best way to be prepared for the unexpected

3. Don’t focus on yourself or on industry jargon customers won’t understand. Make it about customers’ problems and how you can solve them.

4. Consider using a payroll service. Having the professionals take care of collecting payroll taxes saves them an enormous amount of time, helps streamline their cash flow

4. Optimize your website using relevant keywords so you appear highly on search engines. Think like your customer and search using words they would use.

5. Schedule your payments. Don’t go delinquent but do divide your payments into categories such as “must pay,” “important to pay” and “flexible payment terms.” This can help keep sufficient cash on hand.

5. Ensure your site is fast and easy to use on any device and make sure every page has a call to action.

Small businesses are usually founded by entrepreneurs who have a unique vision and a passion that drives them to work late hours, take chances and believe in what they’re doing. But, just as Thomas Edison once said that genius is 1 percent inspiration and 99 percent perspiration, successfully running a small business requires rolling up your sleeves and putting in significant time on more mundane, day-today matters.

Make sure your website meets your goals. Goals could include increasing sales, generating leads or making sure your customers know about your business and recognize your name.

Simply “getting more clicks” isn’t a goal and it won’t help you earn money. Too many businesses think their site should be an online brochure. That’s boring. Your website should foster conversation with your visitors and gently guide them to the solution you provide.

You can be driven, impassioned and have a great idea to fill a niche or serve customers in new ways, but if you don’t attend to the details of the business, you can create for yourself a heap of problems.

Focus on the needs of your audience. When you create your site, be sure to think like your customer. What problem do you solve for them? Too many company websites focus completely on themselves: how long they’ve been in business, the specs of the products they sell or use jargon their customers don’t understand.

Here, we’ll look at one of the most important of these business details: managing cash flow. Especially for early startups, knowing how much cash is coming in and going out, and accurately forecasting sales and expenses, is key to maintaining your company’s health.

No matter where you are in your business, keep these things top of mind:

1. Know when you will break even

Every small business owner keeps at the front of their mind the question:

Share how your company helps your customers and make it all about THEM. Retail websites should guide toward your products as the solution to the visitor’s needs. Business-to-business company websites should share how your services can help visitors solve their problems and give them the next step to try and/or buy.

To optimize your website, focus on using relevant search terms (keywords) and formatting your pages with attractive titles and descriptions to encourage searchers to click to find out more. Think like your customer and search using words they would use. Make sure your site has those keywords listed in the content of your pages.

“When do I start to turn a profit?”

Rather than wonder, set a realistic goal for when you want to break even. This will help you to focus your efforts and provide a numerical benchmark for projecting your cash flow in the near future.

Ensure your site is fast and easy to use on any device. Cheap websites are almost always really slow. Drag-and-drop web builders require a ton of back-end code to make work and images can get very large, which increases download time (especially on a phone).

2. Put cash-flow management before profits

This might seem counterintuitive, since profits are how you survive. However, if you aren’t organizing your cash flow, you’ll run into problems that a profitable quarter might not be able to fix. Keep things organized and well managed so you can be ready for whatever success comes your way.

3. Secure credit ahead of time

Google hates slow sites. More importantly, your visitors won’t wait for your site to load for more than three seconds. Your site also needs to look good on more than your computer. More than 60 percent of all web browsing happens on phones.

Ensure every page has a call to action. The goal of your website is to get your visitors to take an action. It could be to fill out a form, explore more about your business or buy your products.

If it’s not clear what the point of a page on your site actually is, you can’t reasonably expect your visitors to take action. Tell them what you want them to do — common CTAs include “Buy Now,” “Learn More,” “Request

Too often, small business owners wait until they need it to secure credit. This can cause a lot of unnecessary stress, or worse. Talk to experienced business owners in your area and industry ahead of time to know how much revenue you’ll need up front. Take a realistic look at the situation and plan. You might have sufficient cash reserves or a rich uncle who is only a call away, but most small business owners should secure as much credit as possible. This is the best way to be prepared for the unexpected.

a Quote,” “Subscribe to Our Newsletter,” or “Talk to Sales.” Ideally each page on your site should only have one CTA. If you offer too many choices and buttons, people will give up due to “analysis paralysis.” They won’t know what to do, so they’ll simply leave.

Pay attention to the most important pages of your site. Great websites all share a few kinds of pages. There’s the homepage, which is an introduction to the problems you solve for your customers, and a directory to guide visitors where you want them to go.

The “About Us” page is actually the second most important page on any website, according to Google. Include information about your team, your qualifications and links to your services or products.

Your Products and/or Services pages should be clearly labeled and give visitors clear next steps: “Buy Now,” “Request More Information” or “Fill Out a Form.” The “Contact Us” page should include directions if you have a physical location, a phone number and an easy form to request a call. A blog lets you share news about your business, keyword-rich content for Google and information about how you help your customers.

Consider how the rest of your marketing works with your site. Trying to kludge together your website with a form that emails your sales team (or worse, your “info” email), trying to remember to load your new contacts into a thirdparty email tool and tracking sales relationships in a spreadsheet is begging for confusion, lost deals and frustration. Incorporate a customer relationship management database,

or CRM. Do-it-all tools like HubSpot will build your website, manage your social media, engage your sales team and track your customer interactions from a single spot.

A well-built site that’s part of a system will let your customers request more information and you can trade valuable information (white papers, product information or demos or even events) for the ability to connect with visitors after they give you their email address. The process of trading valuable information for connection is called inbound marketing, and it’s the best way to make your website into an actual sales tool vs. a static, boring brochure.

Finally, it’s important to analyze your website’s performance. Free tools like Google Analytics track your website’s traffic, your most popular pages and the kinds of people you’re reaching. Look for pages that are getting visitors to take action (converting), receive a lot of traffic and generate leads or revenue. Do more of what works and get rid of pages that don’t help you meet your goals.

Your website is a tool to help your business achieve its goals. Yes, creating a site is easy, but it’s hard work to make your website perform. Whether it’s driving sales, generating leads or building brand awareness, your site has a job to do.

Speak to your customer needs and allow your visitors to learn more about you at their own pace, while giving them easy steps to ask for more. If all this seems like a lot of work, it is. Consider working with a professional to help you create a useful sales tool that generates business growth.

Contact: Dave Meyer is the president of Champlin-based growth marketing agency BizzyWeb: 612.293.9323; dave@bizzyweb.com; www.bizzyweb.com; in/dave1meyer

“Too many businesses think their site should be an online brochure. That’s boring. Your website should foster conversation with your visitors and gently guide them to the solution you provide.”

Dave Meyer BizzyWeb

Keeping it personal

Maintaining company culture in non-traditional work settings

Studio M Architects has helped design some funky, iconic restaurants, bars and retail spaces in the Twin Cities and across the country.

It’s a small team of five, though Principal Adam Meyer has a team of contractors and another company he can call to partner with when the workload gets heavy.

Prior to COVID, Studio M employees worked exclusively in the company’s North Loop offices in Minneapolis. That flipped to entirely virtual during the pandemic and, like many companies, Meyer and his team have since adopted a more flexible hybrid approach.

“We have a really flexible schedule,” he says. “We try to shoot for a minimum of four days in the office, sometimes three depending on people’s schedules.”

Consulting staff on a policy

Much of the work done at Studio M involves collaboration — looking over drawings and doing mentorship. “We have a lot of younger people in the office,” he says. “You can point and touch and communicate a little simpler. We like that. We all agree that full-time remote is not for us.”

Meyer set the new four-day policy collaboratively. He sought input from employees in arriving at Wednesday as the flex day.

“This is not an authoritarian regime,” he says. “I try to include them and make them feel a part of the team. If I’m just telling them what to do all the time, that’s different than sort of letting them help us figure out how to navigate forward. Letting them

by Andrew Tellijohn photographs by Tom Dunn and Jonathan Hankin

own some of the decisions is good.”

That’s true not just within Studio M but with the contractors and reps from the partner company when it is called in to help. “We’re definitely meeting virtually, in-person and on-site,” he says. “They’re as active and vocal on some of our projects as we are.”

So, even with the new policy, he’s frequently had people work remotely more than once a week so they can stay with sick children, avoid weather issues or attend appointments. In-person works best, but Zoom meetings suffice at times.

“We really haven’t said no,” Meyer says. “Any weather-related issues? We just don’t come in. Everybody’s on a laptop, so wherever they are, their office is there.”

Companies updating culture

Studio M is one of many businesses of all sizes that has and continues to deal with cultural issues around where and when people can work and how a younger generation of workers differ from near retiring baby boomers.

Another is Village Bank, generally an upbeat place to work with many employees having longevity nearing 20 years. But the company has experienced some increased turnover the last couple years, especially within the teller ranks across its four locations. So, many of its 70 employees also are within their first two years on the job.

Also, Village is adapting from having switched from being a fully in-person workplace to a hybrid environment.

Kelly Klopotek, chief experience officer at Village Bank, is helping oversee some cultural fine tuning

“I would say this is something that we’ve had to evolve through COVID,” says Kelly Klopotek, chief experience officer. “That’s a big driver for us. And then there is making sure there is more collaboration across departments and across locations so that they have a similar and shared experience.”

Village Bank leaders also want to improve at helping employees with their personal and professional development to improve retention because “they’re able to go across the street and make more money,” Klopotek says. “We want to invest more. We think that’s important. We do some of that already.”

Upfront work

Village’s moves have buy-in at the top. In practice, company officials contracted with Heather Polivka, CEO of HeatherP Solutions, to assist. They’re in the early stages of working together as Village navigates moving forward.

Polivka says a lot of companies are working through cultural issues that were more easily defined in the past when everyone was sitting at a desk next to each other. The new hybrid work scenarios require some changes on things like how people are going to communicate, celebrate successes, resolve conflict and count on each other. The younger generation of workers between 26 and 40, who value relationships and meaning over money, also require a different outlook.

“It’s a bigger deal than it has been in the past,” she says, adding it is better to deal with that upfront than leave issues unaddressed and festering. “It just takes attention and design to make sure that we can maintain collaboration if we’re not in the same workplace or working there at the same time. It requires people to be willing to try and to maybe even struggle and embrace new approaches.”

Polivka suggests starting with putting mission and values, employee recognition strategies, intolerable behaviors and other aspects of the culture down on paper, all the while seeking feedback from employees on what those should look like.

“Those are all the various dimensions of culture,” she says. “And why most businesses are struggling is they just haven’t. It doesn’t have to be a big thing.”

Polivka also suggests leaders keep an open mind and embrace a willingness to try new things, learn and grow.

“You know, there was a time where email seemed really crazy and we couldn’t imagine that would be one of the primary ways we communicate,” she says. “We have to evolve with the times. And this is one of those times.”

In person get-togethers

So, how do you make it work? Several culture consultants said even in the most virtual of companies it’s best when employers can get people together in person at least occasionally. If not everyone can make it, proactively find ways to make

sure they feel included. Polivka came across one company that had an on-site garden used to grow food for employees. The company sent hybrid and remote workers an herb garden and asked people to share how they used it or recipes they created.

But in order to foster that togetherness, when possible, many companies are seeking at least one or two days a week, everyone come in on the same day, says Hillary Feder, CEO of Ask Hillary’s.

“Everybody, barring having a sick kid at home, should be in on Tuesday and Thursday and you can pick the third day,” she says.

Then, it’s about building moments. Whether it’s a time to collaborate on a project, celebrating a success or a team building moment, there is a reason for those hybrid and virtual workers to come in together.

It’s also important, Feder says, for mentoring purposes. A high-level official at one of her clients told her, “What’s getting lost and what my senior level advisers aren’t getting is that they’ve forgotten what it is like to be younger and newer,” she says, adding that in the virtual world, those off-site employees can’t knock on a supervisor’s door for assistance.

“These water cooler conversations don’t happen over a digital platform,” she says. “I’m not going to send you an email and say ‘I really want to talk to you about X.’ It just doesn’t happen. It’s too stiff.”

For those whom geographic distance creates greater challenges to in-person meetings, Feder recommends making sure they can meet up at least a couple times a year. Her son, a journalist on a remote staff, works for a publication that entails considerable travel. The company pairs them up in teams “so that even when they’re out on the road, they may see each other,” she says. “I really coach how can you get your team together, especially in a virtual team, live and in person, no less than twice a year and ideally four times.”

But make it meaningful and have a purpose.

“There are so many different reasons, whether that means you’re celebrating your five-year anniversary or hiring your 100th employee,” she says. “You just have to figure out meaning and put meat behind it.”

Define your culture ahead of time

Mark Komen, president of Kodyne Inc., is a mentor of Studio M’s Meyer. He says being conscientious and inclusive toward hybrid workers doesn’t require “some kind of hybrid-specific culture.”

Rather, you need to look at your existing culture, line up expectations on how you are going to operate your business, and just plan accordingly.

“That should be under any circumstances,” he says. “Norms and expectations for how we are going to perform tasks and interact with people, those should be pretty well defined. If they’re not, that could be an issue.”

Twenty-five years of Fish!

By Andrew Tellijohn

It’s been 25 years since John Christensen was on a visit to Seattle when he encountered Pike Place Fish Market, the open-air seafood store at the corner of Pike Street and Pike Place.

Christensen, CEO of what is now ChartHouse Learning, had just taken over leadership of the company from his father, documentary filmmaker Ray Christensen. He was mesmerized by how a group of employees had turned the relatively routine act of buying fish for dinner into a famous routine involving throwing fish, playing games and performing for customers.

“I saw these guys engaging in their work in such a way that was really incredible,” he says. “I mean, they hugged their customers. Where do you see people being hugged?”

They connected in other ways, as well. In one instance, one of the fishmongers took a crawdad and playfully tried attaching it to a young boy’s jacket. The boy wasn’t amused, however, crying and fleeing to find mom. The worker got down on his knees to apologize to the boy and gave him a hug.

Christensen, in an interview, contrasted that moment with one where he was checking his daughter in at a children’s clinic during an asthma attack and the receptionist didn’t even look up to take their information.

“I saw more love and care happening with the little boy in a fish market than I did in the healthcare system,” Christensen says. “And it was like, ‘wow, this is an incredible place. Look at this engagement they have.’

“So, I knew there was magic there. There was customer service, there was having fun at work.”

That experience turned into the Fish! Philosophy. Christensen interviewed much of the staff, created an 18-minute video and came away with a training solution aimed at helping companies build a culture where

people bring their best to work.

The video starts showing employees at the Pike Place Fish Co. in Seattle regaling potential customers by tossing fish back and forth and engaging with people while clearly enjoying what could otherwise be mundane work.

“Energy! Passion! Fun!,” scrolls on the screen. “Everyone at world famous Pike Place Fish Co. chooses to bring these things to their work. Let’s go behind the scenes to see how they do it.”The crux of the philosophy boiled down to four main points:

• Play — a mindset that boosts engagement and creativity and brings new energy to everything you do.

• Make their day — everyone wants to be appreciated and every interaction is an opportunity to make a positive impact on people.

• Be there — being fully present strengthens trust, teamwork and service.

• Choose your attitude — you have the power in every situation to choose whether you’re engaged and helping everyone around you or not.

So, it isn’t about throwing fish. As one of the employees in the video says, “once you start imitating us, you’re stuck.” Rather, it’s about creating your own environment for having fun doing what you’re doing, being engaged in your work and giving customers the best of you.

Fish! spun off quickly into a couple of

books and facilitation programs.

It took off quickly within education and healthcare industries, Christensen says. One hospital in Woodbury, he says, built a tackle box filled with candies and trinkets that anyone from employees to doctors to nurses to patients could take to give to someone with a Post-It note telling them how they’d been helpful. “This really hit a chord with people,” he says. “This film is not just only about customer service, it’s about how we engage in our work.”

And it’s held up pretty well, he adds, saying it’s almost more important today than it was a quarter century ago with people “quiet quitting” due to being miserable or actually leaving their companies in droves in recent years.

“Why are they leaving? Why are nurses striking? Why are teachers leaving?” Christensen says. “It’s because we’re not treating them properly. We’re not having an environment where they’re cultivating the people and really acknowledging what they bring to the table.”

COVER STORY

apply in an environment where after staff is out of the office or at some remote site?”

Luckily, small businesses can be nimbler and change quickly when necessary. Komen recommends finding ways to get employees involved together for a cause. “I’ve been a big proponent of small focus groups, employee focus groups, just to get folks engaged,” he says. “I’m also big on one-on-one. I know that gets tough if you have 100 employees, but I think being able to touch and have a private conversation with everybody to the extent you’re able is important too.”

Ultimately, if the company has a strong culture in place when tough times hit, a new challenge will not push it off course.

“For people that have their hands around what their culture is, if it’s working for you, you want to strengthen it and not let the rough waters of the day impact what you’re doing,” he says. “You may have to modify things, change some stuff, but at the end of the day are you living the values the company is designed around?”

Culture is coming, be proactive about it

Now, if you were a 100 percent in-person business and you’ve shifted to hybrid since COVID, you may need to adapt that culture to your current circumstances in order to keep it constructive.

“How agile are you,” he says. “A lot of highly conventional organizations go, ‘Here’s the book, here’s how we’ve always done it.’ If you have a good book, that’s wonderful. Does it still

CONTACT:

John Christensen is CEO at ChartHouse Learning: 800.727.3446; info@fishphilosophy.com; www.fishphilosophy.com; in/johnchristensenfish

Hillary Feder is CEO of Ask Hillary’s: 952.933.8365; hillary@askhillarys.com; www.askhillarys.com; in/hillaryfeder

Kelly Klopotek is chief experience officer at Village Bank: 763.780.2100; kklopotek@villagebankonline.com; www.villagebankonline.com; in/kellyklopotek

Mark Komen is president of Kodyne Inc.: 763.551.4777; mark@kodyne.com; www.kodyne.com; in/markkomen

Adam Meyer is principal at Studio M Architects: 612.524.5375; adam.meyer@studiomarchitects.net; www.studiomarchitects.net; in/adam-meyer-4763134

Heather Polivka is CEO of HeatherP Solutions: 612.208.8587; heatherp@awesomepeopleleaders.com; www.awesomepeopleleaders.com; in/heatherpolivka

Ultimately, whether employees are working for a large or small company, they’re looking for something to get behind, says John Christensen, CEO at ChartHouse Learning and founder of the Fish! Philosophy that functions around four principles: play, be there, make their day and choose your attitude.

That program is 25 years old now, but applies, he says, maybe more than ever. Today, with employees sometimes scattered, they still need to embrace what the company is about.

“Then managers, leaders can talk to people in the field and say, ‘are you making people’s day?’” he says. “Are you getting people engaged in conversations that are making people’s day?”

With employees in more of a power position than ever, it’s more important for companies to embrace this. “Business wasn’t hurting then like it is now, with people quiet quitting, people resigning,” he says. “Why are nurses striking? Why are teachers leaving? It’s because we’re not treating them properly. We’re not having an environment where they’re cultivating the people and acknowledging what they bring to the table.”

Whether working in an office or at home, it comes down to engagement. It shouldn’t be forced, he says. Engage them. Treat them as humans.

“We’re talking about human beings. We’re herd animals. We need that human interaction,” Christensen says.

After all, culture will happen one way or the other, so you might as well be cognizant of it.

“You’re going to have a crappy culture if you don’t pay attention to it,” he says. “Or you can have a great culture if you intentionally build it and talk about it. Either way, you are going to have a culture. It’s going to happen anyway, so why not be intentional?”

Village Bank enlisted cultural consultant Heather Polivka to help the company reduce turnover and adapt to a new hybrid work formula.

All onboard

F3Wireless employs a team of engineering experts that partners with clients on anything from wireless technology certification test plans to complete device development. It’s been set up from the start where people can work remotely because such engineers tend to work best if they have long stretches of quiet time.

Until recently, the company was small enough where staff could collaborate or have questions answered through Google Chat or other online tools. But often times, information most new hires would get early in their time on a job fell by the wayside due to the lack of formal processes.

“There was no process associated with ‘How do I find someone, how do I document.’ There was no process for the job description,” says Chris Anderson, chief technical officer.

He would find someone interested in a new role, they would negotiate compensation, he’d send them a letter and refer them to the company wiki, which contained information about how to punch in to work, access the time tracking system and start getting paid and fill out the paperwork for getting paid.

Once that was filled out, he’d hand the new hire off to a project manager and they’d get to work.

Growing up

That worked fine for a while but a lot of information never ended up getting conveyed to new hires.

by Andrew Tellijohn

As the company grew — it now employs about 45 people and adds another employee every month or two — it became clear to Williams that he needed to firm up the hiring and onboarding process and that he needed help doing so.

“I was making it up each time. There were no templates, there were no existing job descriptions to riff off of,” he says. “I was doing the recruiting and it was very ad hoc.”

Through a colleague, he was introduced to Heather Boschke, owner of Vogel Venture. He contracted with Boschke to perform mostly marketing tasks, but she also took on building some systems.

Though she is a contractor, he has included her as a part of the team.

“It was that aspect of starting to become a grown-up company,” he quips. “One of the biggest keys to that is that you, as a business owner, need to focus on things that only you can do. I don’t remember who said it, but if you can pay someone to do it for you, you should.”

Now, F3 Wireless has a documented written recruiting process for what happens to create a job and recruit a new hire. There are templates to use as starting points for job descriptions and processes for winnowing the applicant pool to serious candidates truly interested in the job.

And, once someone is hired, they are assigned a “buddy” within the company to help them acclimate. The new hires

receive a full employee handbook along with a checklist of activities they must perform as part of the onboarding process. Then there is a check back period several months in to make sure they have progressed as expected.

The system isn’t entirely complete — there are still things added from time to time, Williams says. Company officials have sought feedback from previous hires on what they wish they had been taught earlier in their time with the company. But it’s a professional process that provides workers with a clear understanding of the company and their place within it.

“When we do know things need to be addressed, we do add them in,” Boschke says, adding that the company just did its first round of annual reviews. “We’re going through what we’re calling universal themes that maybe one person had feedback on but it’s something the whole team could benefit from.”

Part of the culture

Properly onboarding is a vital part of making sure new employees are engaged and engineered into the company in a way that makes them feel welcomed and that they understand what the company is all about, says Boschke. Small companies do sometimes let that slide, but that can become problematic quickly as the company grows.

“In the past, when you’re small, it’s just ‘OK, you’re just going to talk to this person and they’ll fill you in,’” she says, adding that F3 Wireless’s situation was much like that faced by many growth companies. “As the team grew it was like ‘we’re big enough that we need to document and have an actual process.’”

With F3 Wireless, it took a few sit-down meetings to create the process, which lays out a total of about 30 steps that happen over the first few months.

One thing she adds is that it’s key to make the employee accountable for the information. There’s a checklist at the end of the process where they can go to make sure they know the important things like where to access the time-off calendar or how to access benefits.

“It’s not just us as an organization saying, ‘here’s your process,’” she says. “You are now in this flow.”

Make it personal

A lot of companies see the onboarding process as a way to get the employee set up so they can get benefits and pay, figure out their operating system and get started with work.

Those are all important, says Steve Schad, president of Optima Advisory LLC. But there’s a better way.

“We’re bringing somebody into the organization and we want this to be a decision affirming process,” he says. “Businesses really need to center their thinking on the employee experience. The employee is the one who’s in this job market. They’re in the driver’s seat. They have a lot of power in the employee-employer relationship. That makes it all the more important for employers to do this well.”

So, find ways to show them they made the right choice in joining the company. He suggests clearly explaining right away what the new person’s first day, first week and first month will look like on the job. Erase any confusion.

Schad remembers onboarding a new employee several years ago at Andersen Corp. where he sent her a written letter explaining just that. He told her he’d meet her in the lobby, that he’d be buying her lunch, what the dress code is, when she would be introduced at a team meeting and how her desk would be ready on day one.

“She still talks about that today and it’s almost 15 years later,” he says.

He compares it to a student on the first day of school needing to find their locker. A good or a bad experience can paint the person’s entire experience with the company.

“You’ve touched something in them on both a rational level — this is a job that’s going to meet my needs — and an emotional level — this is a job that’s going to give me fulfillment and I’m going to enjoy my work,” he says. “You want the experience of joining the organization to be one that builds on that decision.”

Chris Anderson is chief technical officer at F3Wireless: chris@f3wireless.com; www.f3wireless.com; in/the-wizard97

Heather Boschke owns Vogel Venture: 612.327.7735; heather@vogelventure.com; www.vogelventure.com; company/vogelventure

Steve Schad is president of Optima Advisory LLC: 651.587.0588; sschad@optimaadvisoryllc.com; in/steveschad

Properly onboarding employees welcomes them to the company and helps in engagement, says Vogel Venture owner Heather Boschke

catching up

by Andrew Tellijohn

Rapidly growing Renters Warehouse sees infinite opportunities ahead

When Renters Warehouse won the 2014 Business Builder of the Year award, the company had just eclipsed $5 million in revenue.

A couple years later, when CEO Kevin Ortner spoke on a panel hosted by Club Entrepreneur, it was up to 15 offices and $15 million in revenue.

The growth has never stopped, though a lot has changed over the last nearly 10 years. Now, while leasing and management is still the core of the business, Renters Warehouse is far more technically savvy. That has allowed the company to become more of an end-to-end solution.

That means the company can underwrite any home that’s for sale in its more than 40 markets across the country. It’s also created a marketplace that allows

Renters Warehouse has passed on buying its own properties in favor of becoming a technology and service company helping others at every stop in the single-family rental property market.

people to buy single-family rental properties with tenants already in place.

It has created proprietary technology for the management of its homes. It has quit seeking franchises and bought back about half of its franchised locations.

And, during or after the company helps a client buy a home, if it needs some renovation, the company will oversee that, as well.

“We’re trying to simplify this and make it more like buying and investing in other more traditional investments versus the complexity that sometimes comes with trying to find the right investment from a house,” he says. “When you bring all of these pieces together, it really creates a wonderful investor experience.”

Tried and true strategy

Renters Warehouse has stuck with

Renters Warehouse

Description: Single-family rental marketplace and management platform

Headquarters: Minnetonka

Founded: 2007

CEO: Kevin Ortner

Employees: 250

Website: www.renterswarehouse.com

single-family homes, Ortner says, because there wasn’t a glut of large marketshare competitors in the niche like there are for investors in multi-family housing.

“Single-family rental property managers historically, up until a decade ago, have been very local, mom-and-pop type businesses,” he says. “There’s a huge opportunity in single-family versus multi-family because there wasn’t a large national single-family rental property management brand until five years ago.”

The market has become more crowded in recent years, but even now, Ortner adds, there are around 16 million single-family homes in the country and Renters Warehouse, as one of the larger players in the sector, is involved with just more than 15,000. So, there remains tremendous opportunity for growth.

“It’s a huge opportunity,” he says. “That’s what we serve and that’s what we’re going to continue to focus on.”

The company also chooses to help manage properties for others rather than buying the properties themselves for long-term reasons, as well. As an asset owner, Ortner says, the company’s value gets locked in at some percentage of net asset value. A service- and technology-based

company, he says, likely has a higher upside in terms of stock price and value creation.

“We have considered ‘Hey, should we start a fund and buy the houses ourselves,’” he says. “We’ve just made a strategic decision to keep our business really asset light and be the best service providers we can.”

Renters Warehouse is now in 42 markets, 27 of which are companyowned. It reported $27.9 million in 2021 revenue. The newly public company has yet to release 2022 financials.

Growth brings challenges

While Renters Warehouse has grown significantly, it hasn’t happened overnight or without the occasional sleepless night. Significant growth in a relatively short time actually brings on its own challenges, says Ortner, who started with the company in Phoenix as its first franchisee well before taking on his current role in 2015. He recommends business owners build time into their schedule for looking at

Contact: : Kevin Ortner is CEO of Renters Warehouse: 952.470.8888; kevin@renterswarehouse.com; www.renterswarehouse.com; in/kevinmortner

Kevin Ortner, CEO of Renters Warehouse, has overseen significant growth and recently helped take the company public since taking on the role in 2015.

the big picture.

“Such an important thing I wish I had started doing earlier in my career was really building in strategic planning time in my calendar,” he says. “If it’s not built in, it’s not going to get done.”

Falling behind on that gets costly when you are forced to solve problems by hiring more people when it might have been better strategically to instead acquire or build a new technology or implement a new process.

“Strategic planning time for me is really looking at different aspects of the organization and its processes and saying, ‘all right, this is working well at $5 million of sales, but can it work at $25 million? Does this system or process scale to $100 million?’” he says. “If you’re thinking about it strategically, then you can stay ahead of it. It just makes your business run so much more efficiently and profitably.”

PHOTO COURTESY OF RENTERS WAREHOUSE

Find the right people

While it might be cliche, Ortner says he also believe business owners need to focus on evaluating their staff, figuring out if the right people are in place and hiring the right people to fill holes — while not being concerned about whether or not some of those hires are smarter than they are.

“Some people are worried, whether it’s ego or whatever, that ‘I don’t want people who make me look bad,’” he says. “I say, ‘hey, I’m weak in these areas, I want really strong people here.’ So, I’ve been able to, over the last five or six years, certainly hire really key individuals through the business that I can say ‘great, this is your role, this is your deal.’ And they, in turn, make me look good.”

Bringing in the right people also helps establish a good company

culture from the bottom up. In its earlier years, Renters Warehouse won several “Great Places to Work” awards from different publications. Maintaining that has been challenging as the company has grown, Ortner acknowledges, especially with workers spread across 27 locations in 20 states.

He does try to engage with them through team building events, celebrating people’s successes, giving away prizes and just being available. The company holds monthly town hall meetings to stay on top of it.

“It starts with transparent communication to everyone,” Ortner says. “When you’re remote and everyone’s not around, it’s easy to not communicate with people all the time, but doing so brings some camaraderie among the team.”

A culture is defined by what leadership is willing to tolerate.

Lead people, manage the process.

This is either by design or default.

Culture is the foundation of a work community that provides an environment of communication and collaboration.

Create a common language in your culture.

25CELEBRATING 25YEARS OFTHEFISH PHILOSOPHY YE AR S

“Such an important thing I wish I had started doing earlier in my career was really building in strategic planning time in my calendar. If it’s not built in, it’s not going to get done.”

catching

Schedule a call or complete a FREE Culture Checkup at www.fishphilosophy.com info@fishphilosophy.com 800.727.3446

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Exit Planning Institute

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Lingate Financial Group

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KeyeStrategies

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