HR & Compliance

Add SBAM offers a full spectrum of human resources services to keep you compliant and help your business run more efficiently and profitably....


Human Resources Solutions

ASE LogoLooking for help with tough HR issues? 

SBAM partner ASE has the answers about hiring, firing, FMLA, ADA and more! Get access to a FREE HR hotline, affordable and cost-effective research consultation services, discounted employee handbooks and workplace posters, and more.


Section 125 Plan, FSA, HSA & HRA Administration

 

KUSHNER & COMPANY LogoLooking for ways to contain health care costs?
With the cost of health insurance continuing to rise, most employers require their employees to contribute to the cost of health insurance premiums. SBAM partner Kushner & Co. can help you put a tax-favored, consumer-directed plan in place that benefits you and your employees.

 


COBRA Administration

Personalized, affordable administration for your business. 

If you have 20 or more employees, your company is required by federal law to offer continued health insurance coverage via COBRA and will face huge fines if it's not administered correctly.  Let SBAM help you stay compliant for only $30 per month. 

Interested in Selling Your Company? Tips for a Successful Transaction

By Jeffrey Van Winkle and James Waggoner

Businesses enter into financial and strategic combinations for a wide variety of reasons. Many are in need of additional growth capability, which can be supplied by new products, an infusion of capital or acquisition of new management; others are interested in a business combination to maximize shareholder value or to provide an exit for the ownership for retirement or business continuity reasons.

Whatever the reasons for considering a business combination, the needs and goals of the parties should be examined by the ownership of the business, its internal management and by experienced financial and legal advisors to establish a viable action plan. This article will address two important topics related to business combinations:
  • The current climate of merger and acquisitions in the United States
  • The various value-maximizing items firms interested in selling their business should consider prior to approaching potential buyers

M&A Market Trends


From the peak of 2007 and continuing through the first two quarters of this year, M&A transactions have dropped considerably. Though 2010 has seen a bit of up-tick in activity compared to 2009, it is apparent that the business climate here in the United States and the financial uncertainty abroad continues to negatively impact the M&A market. Potential buyers are still looking to avoid taking the big risk, while those interested in selling are having difficulty establishing a purchase price consistent with current market conditions. Nevertheless, many inside the industry continue to remain optimistic that conditions will continue to improve during the course of this year and into 2011. A cursory overview of information about completed transactions over the past 12 months shows that larger sized transactions, particularly among the publicly held businesses, have increased. That trend has not been observed in the smaller M&A transactions typical for small and mid-sized businesses.

Advisors report that many businesses and funds are very actively seeking candidate businesses to purchase, but often do not have the right connections to discover businesses interested in selling. One reason for increased optimism for completed transactions centers around financing availability, which has continued to improve. In addition, financial advisors and business brokers representing sellers say they are expecting firms interested in selling to better understand the value of their businesses.

Preparing Your Business for Sale


Ideally, selling a business is part of a long term strategy relating to existing owners reaching the end of a work career or planned management transition. However, it is often hard to know the right time to consider a sale. If the business has strong management, ownership interested in the next 10 years, sufficient capital to move to the next step and a business model or strategy that will generate growth and profits, there should be no reason to sell. On the other hand, the absence of any one or more of those four requirements may prompt consideration of a sale, especially if capital or a management team is missing.

When considering whether or not to sell, the best prepared businesses have focused on the following items in order to maximize the value of the business, especially in a struggling M&A market.

Maximizing Business Value


Financial Performance: The financial performance of a firm is often the prime factor in determining the ultimate value of the business. Certainly, potential buyers will want to see how the business has fared especially during the economic downturn. Perhaps as important, however, are the future financial prospects of the business. If the selling firm is able to provide evide

Retaining Clients: It Takes More Than You Think

By Kirk Squiers, owner of Central Michigan Graphics in Lansing. From SBAM’s member-only Focus on Small Business magazine.

With the proliferation of the Internet, the bad economy has made customers more price conscious. As a result, relationships and service have become the most important aspect of client retention. As the owner of a printing and sign company, I see the World Wide Web cutting into my business weekly. Just last week a customer said,” I can buy 500 business cards on the Internet for $10!” That’s great, but how does that help the Michigan economy?

Staying close to customers should be a number one priority in these rough times. Regular visits to your top ten clients and constant contact through e-mail, Facebook, Twitter, etc. is crucial to maintain top of mind awareness. One of the many ways that my small company stays close to our clients is through our Facebook page. Every time we do a new project, we take photos of it and put it on our home page. The comments we get are amazing; not to mention that it’s like the old adage of tell two people and they will tell two people and so on. A great aspect of social media for small businesses is that it allows you to reach a large group of people with minimal time and resources.

Another great vehicle for communicating with customers is through YouTube. My company has a full video presentation of a time lapse installation on a vehicle wrap on YouTube. And the best part is – YouTube is free!

As a small business owner, your day is filled wearing multiple hats. Social media helps you reduce time spent on marketing, sales and client retention. Facebook, Twitter and blogs are great ways to keep in contact throughout the year. Start using all the free services available on the Internet and you will see client retention surge. Customer loyalty cannot be bought, it must be earned!

Here’s some strategies that have worked for us:
  • Customer communication – be sure to keep in communication with your client base. Send them small thank you notes, birthday e-mails and company newsletters. Make sure you focus on the customer over your company and foremost, do what you say you will do! The recession presents some unique challenges to customer retention management. But the current climate also provides opportunity for small businesses that know how and when to act.
  • Listen for needs and wants. Figure out how can you make the customers life easier. Diversify your product line. We were once just a printer. Now we offer signs, banners and vehicle graphics. Find a niche that you can easily piggyback onto your current offerings.
  • As a current board member of SBAM, you will hear us talk about economic gardening in terms of nurturing relationships with successful businesses already here in Michigan. As a small business owner I am constantly cultivating and gardening my current client base. It is like taking care of a garden. Water and feed the customer with things you provide to help their business flourish. Weed out your competition consistently by paying attention to details and following through.
  • And here is the kicker. If you can’t do something, admit it! Your customers will respect your honesty. 

As we move into the next few years, Michigan-based small businesses will continue to face tough times economically. Continue to seek new business and spend even more time and energy with your top ten accounts. Make it a personal goal to speak in person or on the phone directly with the decision maker of each of those top ten clients at least once a month. You can surely make enough time to call or stop by three places a week. This will lock out your competition and reaffirm your concern for the business relationship. If you do the little things that create the “Wow” factor and y

Employment Law Alert: National Labor Relations Board Permits Unions to Display Large Stationary Banners in Front of Businesses Where They Have No Primary Labor Dispute

Reproduced with permission from Clark Hill PLC

by Kurt M. Graham

The newly comprised National Labor Relations Board ("NLRB" or "Board"), which now consists of a majority of pro-union appointees, has wasted no time expanding the rights of organized labor. In Carpenters & Joiners of America (Elaison & Knuth of Ariz. Inc.), 355 NLRB No. 159 (2010), the NLRB found that a union's practice of displaying large stationary banners in front of a secondary employer's business is not coercive and thus does not violate the secondary boycott provisions of the National Labor Relations Act ("NLRA").

Under the NLRA, a union having a dispute with an employer over the terms and conditions of employment being offered to its employees (the primary employer) must confine its picketing activity to that particular employer. It may not extend the labor dispute to other employers (secondary employers) in the hope that pressuring those employers to cease dealing with the primary employer will help it gain the upper hand in its primary labor dispute. Section 8(b)(4)(ii)(B) of the NLRA makes it unlawful for a union to force or require "any person to cease using, selling, handling, transporting, or otherwise dealing in the products of another other . . . person . . ."

In 2003, the Carpenters & Joiners of America Union was involved in primary labor disputes with four construction employers - Eliason & Knuth of Arizona Inc., Delta/United Specialities, Enterprise Interiors, Inc., and Hardrock Concrete Placement - that the union contended did not pay their employees wages and benefits that equaled area standards. In furtherance of the dispute with these four primary employers, the union engaged in peaceful protest activity at the Thunderbird Medical Center in Phoenix, the Northwest Medical Center in Tucson, and the RA Tempe Restaurant in Tempe during which union members held a large banner on a public sidewalk 15 feet to 1,050 feet from the company's facility. The banners stated "SHAME ON [the name of the employer]" in large letters, flanked on either side with the words "Labor Dispute" in smaller letters. As they were displaying the banners, union members offered fliers that explained the nature of the labor dispute to interested members of the public. The fliers explained that the union's complaint was with the construction companies but asserted that the employer was contributing to the undermining of area labor standards by using the services of those construction companies.

In late 2003, Eliason & Knuth, Northwest Hospital, and RA Tempe filed unfair labor practice charges with the NLRB contending that the union violated the NLRA by displaying the banners at secondary employer sites with the intention of forcing the neutral employers to cease doing business with the primary employers.

In a case of first impression, the NLRB found that the Carpenters & Joiners of America Union did not violate Section 8(b)(4)(ii)(B) because the provision does not prohibit the "peaceful stationary display of a banner." According to the majority, the conduct that makes picketing coercive is the combination of carrying picket signs and the persistent walking of picketers back and forth in front of an entrance to a worksite so that a physical or symbolic confrontation with workers entering the worksite exists. The majority further stated: "Banners are not picket signs. Furthermore, the union representatives held the banners stationary, without any form of patrolling . . . the banners were located at a sufficient distance from the entrances so that anyone wishing to enter or exit the sites could do so without confronting the banner holders in any way."

According to the two dissenting Board members, the Board has long held that the use of picket signs and patrolling are not prerequisites for finding a union's conduct to be the equivalent of traditi

Businesses are Not Launched Overnight, Nor Are They Sold Overnight

By Eric Seifert, a Senior Business Consultant with the Michigan Small Business & Technology Development Center. From SBAM’s member-only Focus on Small Business magazine.

A successful business is not created overnight or in a conference room some rainy afternoon. It takes years of strategic planning, long hours and usually the owner’s personal financial investment to launch and grow a new business. The whole process of launching a business could take years. As the economy recovers, and it is recovering, more business owners who spent that time developing and growing their businesses will consider selling their business.

Establish an Exit Plan
Similar to planning the start of a business, a well thought out exit plan will increase the possibility of a positive outcome. Ideally, a seller should begin preparing two to three years prior to putting the company on the market. According to Kevin Hirdes, Managing Partner of NuVescor Group, “With solid planning for a transition in place, the enterprise value of the entity being sold can increase substantially.” It’s much more expensive, disruptive and time-consuming to rush and prepare all the necessary information in a short period of time than it is to consistently compile the necessary records over a period of several years.

Timing Can be Crucial
Many business owners wait until their business is stagnating, or they are exhausted with running the business to decide to sell. They wait until the last minute to try and sell their business-which will not provide the results they want. The optimal time to sell is when a business is doing well. Business valuations are driven by cash flow, so stronger cash flow creates higher value. At times, some business owners have a tendency to disengage from the business prior to selling it. As a result, these businesses many times are sold at compressed values as the business owners passion has decreased for leading the business, and the performance of the business often times follows suit. In sports, the adage is to leave at the top of your game. It is the same with selling your business.

Position the Business for a Sale
Staging or positioning the business for sale can result in a higher price. This can include grooming a level of management and leadership that reduces the reliance of the business on the owner. Unless the buyer is already familiar with the industry, he may need to turn to someone for help running the business after the seller exits. From the buyer’s perspective, it’s better if the current owner is not important to the day-to-day operations and ultimate success of the business. A great management team enhances a firm’s value. Steven Tjapkes, attorney with Clark Hill, Grand Rapids, commented that key employees should be under contract prior to placing the business on the market. “The type of contract is critical – a personal services contract cannot be sold,” according to Tjapkes.

Not only is a succession plan important for the business owner, so too is the management of the customer concentration risks and other key concentrated relationships within the entity. Critical vendor, employee, and customer concentrations are common risks associated with a business. These concentrations should be mitigated well in advance of a sale.

Pricing is Critical
Without professional assistance, many business owners price their businesses based on emotion or hearsay rather than a solid valuation. Unrealistic seller expectations torpedo many transactions. Paul Jackson, a business attorney with Warner Norcross and Judd, believes that sellers lacking a clear understanding of their business’s value can be at the mercy of buyers. Professional valuation experts, accountants and experienced intermediaries [business brokers and merger & acquisition advisors] can
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