Whether it’s keeping up with your accountant or tax lawyer throughout the year or making sure your employees are on the same page, communication is key.
It helps strengthen relationships with professional partners, it helps build the business when everyone who works there is on the same page and it can help owners find like-minded people whom they can talk with about problems or ideas as they arise.
Communication was one of the main messages at a workshop, co-sponsored by Rick Brimacomb’s Club E and Upsize magazine at the Minneapolis Club in late November, where five business professionals shared lessons they’ve picked up over their years in the business world.
Finding — and keeping in touch with — your partners
When business owners are hoping to establish a relationship with a banker, John Lindquist says owners should treat the occasions much like a first date.
Lindquist, senior vice president of commercial lending with Crown Bank, says they should be prepared with something to talk about when they first meet. They should be organized, with financial statements and other important information. And they should prepare to regularly communicate through good times and bad.
“The more prepared you are for the meeting, the more success you are going to have with the banker,” he says.
“The most successful customers I have are organized ones that are prepared and they are willing to give you information or put you in contact with their accountant to give you the information you need.”
As the relationship develops, it’s important to keep in touch with the bank — not only when the business is running well, but perhaps even more importantly, when it has come across some hurdles.
“I’ve had customers who have kept me in the dark on everything,” Lindquist says. “You don’t find out something is going wrong until one, the obvious, they are slow to make payments or, two, you receive their financial information and you start seeing some issues. I always tell my customers it’s great we’re talking when everything is good, but it’s just as important — if not more important — to talk about things when they are bad. As a bank, we are there for you to help you come up with a solution.”
The same is true with an accountant, says Brad Theisen, partner in charge at Eide Bailly LLP.
He’s had clients approach him at the end of the year telling them they bought, built, sold or did something of magnitude, as an aside.
“I say ‘I wish you would have called me before you did this’ he says. ‘We could have structured it differently.’ “Talk to people before you do stuff, don’t just jump ahead and do things.”
In general, he adds, tax planning is something that should take place throughout the year.
Whether it’s a good year or a bad one, Theisen says it’s vital to keep in touch with your team of professionals. “After the year, when we are doing tax returns, it’s too late,” he says.
Communication is internal too
While communicating with professional partners is key, so is communicating with employees. For Tanya Korpi Macleod, founder and CEO of MacLeod & Co., having a cohesive marketing strategy is the most important thing a business can do. That strategy then needs to be communicated, not just to the public-at-large, but internally, so all employees, from C-suite executives to receptionists, are working on the same page.
“That’s going to allow everybody to make decisions and buy in,” she says.
Tech Guru, a technology service provider with a partner in London and a marketing person in Los Angeles, has streamlined its internal communications.
Everyone uses an office chat app called Slack (an acronym for Searchable Log of All Conversations and Knowledge), which allows for archived discussions on all work matters from the serious to the mundane.
It has eliminated thousands of internal emails and it’s easier for people to catch up on conversationally than following long chains of previously sent messages, says Dan Moshe, founder and CEO at Tech Guru.
“All that history is logged forever,” he says. “If you are not using a collaboration tool, 2018 is the year to start.”
And then business owners themselves frequently need someone with whom they can discuss problems and ideas, Theisen says. It can be an individual, a professional you already work with or, in some cases, clients he works with have created formal or informal boards of directors.
“Owners feel like they are out on an island,” he says. “I would recommend you always have a mentor or somebody to go to in order to help them run the business.”
Moshe says Tech Guru established a board of advisers in 2017 that has been an invaluable help to the business as it began focusing on a new niche working with CPA firms.
“It turns out people will help you just because they want to – all you have to do is buy them lunch,” he quipped. “They have provided us with critical information. They helped us better understand the market. We learned so much. It was definitely a worthwhile endeavor.”
Prepping for harassment issues, spending on HR
Having someone to go to, especially these days with a lot of thorny issues making headlines, may be even more important than ever before. Kristen Baas, a certified business performance advisor at Insperity, says recent headlines involving sexual harassment with celebrities and large companies has driven up interest among business owners in having good training programs and well-defined policies.
While many of the companies being taken down by sexual harassment allegations are large and public, she says, small and growing firms also must be just as prepared in the event they face an allegation.
Baas cited a local company that had just signed on as a client when allegations against film producer Harvey Weinstein were hitting the airwaves. That company, almost immediately after, faced a similar situation: an executive sent an employee a suggestive email that was forwarded to another executive.
Insperity was called in to conduct an investigation.
The company’s policies, spelled out in its manuals, were unclear, vague and had not been updated in four or five years. Following the investigation, the executive was given a written reprimand and training and, Baas says, the issue was closed. However, she adds, situations like this can be just as catastrophic for small businesses as their larger, more visible counterparts — if not more. It’s illustrative of a company’s need to be prepared to respond.
“There is a risk out there and small businesses are just as open to it as big businesses,” she says. “This is happening in our community. In those types of situations, we want to be really respectful to the person who received the email. The outcome of not handling that situation effectively could be catastrophic to that business. We’re trying to keep the business safe, keep the business running forward and be respectful to all of their employees.
Establishing a culture
Baas adds that she frequently comes across small business owners who decide they don’t want to spend significant money on human resource functions, such as preparing sexual harassment policies, only to contact her again months later when problems arise.
“It’s good for my business,” she says. “It’s not good for their business.”
She recommends that executives look at hiring professional human resources assistance as not just an expense, but as an investment in the business. There are too many issues of concern today to have someone in the office doing HR work as a secondary responsibility.
“It helps you get a better ROI out of your employees,” she says. “It reduces your risks so that you can keep more dollars in your pocket. At the end of the day, HR is not there to be your friend, it’s there to keep your company safe.”
And having policies in place that ensure a safe, comfortable environment for employees can be marketed as part of a culture that makes your business a place people want to work and used as a guide during the hiring process.
She cited a quote from the book “School Culture Rewired,” written by Steve Gruenert and Todd Whitaker: “The culture of any organization is shaped by the worst behavior the leader is willing to tolerate.”
Technology rules
In addition to internal marketing, Korpi Macleod says companies need to take a holistic look at how they are presenting their business and they need to be demanding with their marketing budgets.
Korpi Macleod worked with several large advertising agencies before heading to Europe for 10 years. Upon returning, she and her husband bought several Valvoline Instant Oil Change locations. Over the years, she says, she and many companies she has observed make the mistake of not defining their culture or their marketing plans.
That’s important, she adds, not just externally but internally, as well. If people don’t embrace the culture, if they don’t understand what is expected of them, they cannot work as effectively or sell the company to their maximum capacity.
“Culture will kill you or it will make you,” she says.
“Your culture will help low performers rise and it will help star performers work better on a team. Culture is just imperative. Everybody in the organization has to be aligned in supporting your business goals.”
It will also help companies get employees aligned around business goals and working on the same page …
One additional point on marketing, Macleod says: Social media can be a revenue generator “and should be treated as a serious tool in your toolbox.”
“People of a certain age are quick to say ‘that’s a young people’s game,’” she says. “It needs to be part of a holistic marketing strategy. It needs to reflect your culture. Your social media is just as important as your website and as when people walk in.”
One additional marketing point: Korpi Macleod says people need to avoid marketing myopia, otherwise known as “talking to yourself.”
“That’s what happens when you are too close to your marketing and you think Average Joe cares about what you are selling,” she says. “They don’t. You have to make them care. You need to get an outside perspective on your marketing. That’s the biggest thing to avoid.”
Additional lessons learned
Communication wasn’t the only thread. The panelists discussed several other topics, including best and worst practices they’ve observed in small business owners over the years. Theisen and Lindquist both say control of the checkbook can be a risk at times for entrepreneurs, who sometimes go a bit overboard on spending when the company can’t afford it.
“Being a business owner does not give you a right to have an ATM card to the bank account,” Theisen says. Adds Lindquist: “That’s probably the biggest mistake we see.”
Moshe called on business owners to improve efficiencies and productivity by staying as ahead of the technology curve as they possibly can, as long as they do so in a financially intelligent manner.
“Plan it out, invest in it and be pragmatic,” he says.
Baas echoed Moshe’s emphasis on technology, indicating that companies doing human resources on paper are prone to dangerous mistakes. She cited a company whose general manager was performing HR duties who let four employees go in the spring, then realized several months in the winter that the firm was still paying their benefits because he missed some paperwork.
“Don’t do your HR on paper,” she says. “There are low cost easy entries into bringing technology to the people side of your business.”
CONTACT
Kristen Baas is a certified business performance advisor at Insperity: 952.960.5360; kristen.baas@insperity.com; www.insperity.com.
John Lindquist is senior vice president of commercial lending with Crown Bank: 952.285.2716;
jlindquist@crown-bank.com; www.crown-bank.com.
Tanya Korpi Macleod is founder and CEO of Macleod & Co: 612.315.5200; tanya@macleodandco.com;
www.macleodandco.com.
Dan Moshe is founder and CEO at Tech Guru: 612.235.4895; dan@techguruit.com; www.techguruit.com.
Brad Theisen, is partner in charge at Eide Bailly LLP: 612.253.6500; btheisen@eidebailly.com;
www.eidebailly.com.
