Three Tips for Combatting Supply Chain Challenges

This month we’ve teamed up with Tom Rioux to guest write a blog on issues all of our members are facing: Supply Chain.

The two biggest challenges we hear from EFBC members continue to be finding awesome team members and finding much-needed supplies and materials. And we’re not alone. A poll released in January of 2022 by Goldman Sachs found that 69 percent of small-business owners said issues with the supply chain have hurt their bottom lines. While we have amazing Strategic Partners who can help with recruiting strategies – we’re looking at you Psyched! – we had to look a bit farther to get insights on logistics. Guest contributor Tom Rioux of Rioux Safety & Logistics agreed to share his thoughts to help us all navigate these on-going supply chain hassles.

Be fastidious about your stocking levels

It is a common best practice to know exactly what supplies, materials and finished goods you have on hand. But most all of us can admit to moments when our efforts have become a bit, shall we say, lax? After the last two years, we all know the importance of keeping daily inventory totals. And then looking for any risks that may be on the horizon. Ask yourself, are we covered for the next couple of months? Can we handle surges in demand, holidays and who-knows-what should it happen? Is stockpiling an option if cash flow can absorb it? Which is the bigger risk – being caught with too much or being caught without enough? If we do add inventory, do we even have the space for it? While these used to be somewhat philosophical questions, today they are the types of conversations you should be discussing with your team most every day.

Let the courting begin

All those voicemails and emails from alternative vendors you’ve been deleting for years? It’s time to give them some of your attention. Even if your supply chain has mostly recovered to pre-pandemic shape, world events prove time and time again the need to always have another option. Single sourcing proved dangerous during the pandemic, dual sourcing faired better, having multiple other options proved best. It can take time to connect and vet suppliers so start courting those relationships long before you need them.

Get it together

In that same Goldman Sachs poll, 66% of those companies negatively impacted by supply chain issues agreed that suppliers were favoring larger businesses over smaller ones. One way to jump your place in line is to join a buying group. Many industries and segments have buying groups that allow smaller and independent companies to pool their purchasing power. Especially important in those segments with large, resource-guzzling companies in their midst, these groups do come with restrictions along with the perks so research fully before committing.

Bonus tip: Just communicate

One more tip that is always worth repeating: Communicate. Whether it is with suppliers or customers, a vast majority of the damage that is done to relationships isn’t because of unmet delivery dates or unkept promises. It is because of the lack of communication. Every organization up and down your supply chain is living through the same disruptions. So communicate clearly and often. And don’t forget to share your appreciation when an order goes right. Those moments need acknowledged now more than ever.

About Tom Rioux

Tom is a dynamic, high-performance team leader with unique skill set that he’s gained from over 25 years of logistics and manufacturing experience. He comes with over ten years of experience as an authorized OSHA instructor, Forklift Trainer Certification through The National Safety Council, and customized training for numerous areas of safety protocols and practices. Tom has a unique ability to encourage and motivate staff to excel within expectations and guidelines by serving as model for intuitiveness and creative problem solving.

President’s Letter: Spring has Sprung!

Things are starting to warm up, the smell in the air is fresher, and Spring is about to kick off. I love spring. Springtime reenergizes me about business and life. Although the economic outlook is seemingly volatile for the near future, I am trying to remain optimistic, and the change in weather is definitely helping. Baseball and other seasonal sports are starting back up, the NCAA brackets are in full swing, and golf is back on the local menu. Of course, my kids are getting anxious to be closer to summer break and I too will be happy to put winter behind me.

As the clock “springs forward” this season, my wife, Annette, and I have a few trips coming up to the Southwest that we’re looking forward to taking. We’re stoked for the multiple opportunities to travel together again, because like many others, we haven’t taken a real trip in a while. I’m excited to be with the whole family for my sister, Kerra’s wedding in Scottsdale next month, and then we’re off to try our luck in Vegas with my dad the following month. The opportunity to be back to traveling is slowly feeling like a return to semi-normalcy. Again, it’s slow, but I’ll take it!

We have some really solid events this Spring, and I am fired up to see our members and engage with our community once again, face-to-face. On 3/23, a Wealth Management panel and Annual Leadership award is being held at Elements in Naperville. The award is celebrating my predecessor, Nirel Inman, who served on the EFBC Board of Directors for four years. I’m also looking forward to making up for lost time and celebrating our extraordinary organization at our >25 Gala Celebration on May 7th. We’re ecstatic to finally celebrate our members

Plenty of additional programming and content coming up. It’s my hope to see as many of you as possible as we continue to add more educational opportunities. Please keep in mind any of your business associates, internal or external, that might benefit in attending these upcoming events. Spread the EFBC word!

Neil O’Donnell
VP of Business Development, Progressive Industries
EFBC President 2021-2022

Event Takeaways – Highlighting 4 from Strategies To Maximize Valuation

Last month, we partnered with Greg Stanley, the President and founder of Accelerant Consultants, for a sales workshop Inevitable Business Transition: Top Strategies To Maximize Valuation.

Greg has over 25 years’ experience in business and community leadership. His unique set of experiences gives him a deep understanding of leadership, strategy, sales, and marketing in both small and large company environments.

At the workshop, Greg revealed strategies to maximize the value of the company for business owners to gain the highest valuation during their business transition.

At some point, all business owners need an exit strategy, even if that just means transferring ownership of the company, ie when one owner decides to retire. Choosing an exit strategy for your business may not seem like an obvious step when you’re just starting out, but planning ahead is a vital aspect of growing a business. Planning ahead gives you more time to improve your business, processes, and value in order for the business to become more appealing for a sale. Additionally, it gives you greater confidence in your decisions when the time comes.

Below we’ve broken down some key takeaways from Greg’s workshop:

1. Intentionality starts at the beginning, and must be carried throughout all aspects of the business.

Always begin with a mission statement. What is the mission you want to achieve, what are the objectives you want to achieve within the mission, and how will you eventually reach the greater goal by completing smaller goals in the interim? Provide your sales team with a value proposition that’s effective, compelling and differentiating.

2. Understand what drives the value of the business and what makes your organization marketable/profitable.

Every decision you make should be based on the business’s mission to produce value. Once you understand your value, ensure to rely on those components as you are problem solving and streamlining your processes. Approach every decision with a high degree of intentionality and build a structure around it that enables an optimized sales and marketing function. Do you have a cohesive sales strategy that has defined targets and markets that the sales team is directed to pursue?

3. Hire and coach the right team.

The key is to hire the right people and ensure that everyone is trained and running the business in your image as the business owner. They should be executing in a way that does not put yourself, as the business owner, in a situation where you have to micromanage people, taskes, or processes. If you have to micromanage staff, you have the wrong people. Greg encourages business owners to think about hiring fewer people, but better people. Hiring the proper people, putting them in a position where their task is defined, and allowing them to perform their job all will help you gradually begin to exit from the business.

4. Integrate Sales & Marketing – Make sure the organization determines the customer portfolio and aligns its sales team to convert targets accordingly.

Marketing needs to be approached in the same manner as any other business investment; with a high level of intentionality, a high level of integration with the sales function, and with a goal to build a larger customer base as well as to grow within the existing customer base. While it is beneficial to have a relatively prolific brand, especially if you have a highly developed value proposition and can articulate that in the marketplace, it is also important to have a sales force that has the ability to back that up. Meaning a sales force that can create and cultivate relationships, understand customer issues, build trust with customers, have some cadence of contact that customers will appreciate, and will be viewed as valuable. Employees tasked with sales and marketing should be treated a fully integrated into the continuum for success within the organization.

Avoid These 5 Common Pitfalls During Your Succession Planning Process When Looking to Extract Value from Your Company

So, you’re a fan of “Succession” on HBO? Us too, purely for the entertainment! We never want to see a family business go through the drama that the Roy’s portray as they exhibit all the dangers of not having a succession planning process. Even though it can be daunting to try and answer, “What’s your number?” when it’s tied to both the value of your business and the amount you are seeking to extract after the sale or transition, there is no more important question for a business owner to decide. Luckily for us, our Strategic Partners have five pitfalls you can make sure to avoid during your succession planning process to not end up like the Roy’s!

“It’s hard to boil it down to one red flag but a common theme is a lack of trust. Perhaps the exiting party doesn’t trust the newcomer with certain information that will be critical to know as the business moves forward. Or the newcomer has his/her own ideas and doesn’t trust or acknowledge the expertise and experiences shared by the exiting party. A lack of trust amongst the major players will usually be a sign that significant hurdles are already in play even before the succession takes place.” – Karen Snodgrass, CPA, MBA, Principal at Cray Kaiser Ltd.

“The biggest red flag that the succession will not go well is lack of communication. There needs to be consistent, clear and candid discussions about the expectations and desired outcomes for all parties. It never works if we assume that we know what the other party is thinking!” – Mary Beth McLean CFP, MBA, Partner at Private Vista

“The first red flag we look for in the succession planning process is there being no buy-sell agreement in place to allow a non-participating family member to gracefully exit the business.” – Rachel Bossard, JD, Partner at Burke, Warren, MacKay & Serritella, P.C.

“Most often, we see business owners starting too late and not involving their entire team of advisors. If you make decisions in a vacuum and don’t discuss how they impact your goals for the next phase of life for you and your loved ones, you may take steps that don’t set you up in the best way. Knowing your number is one piece. Knowing what you are moving towards is equally important. How will you fill the day once you are not running your company? What will be your identity? Your purpose?” – Nicole Romito, CFP, CDFA, Partner at Private Vista

“From my experience, communication is the name of the game! Expectations are built off of information and information becomes relevant through communication. When we see a company whose ownership has a high level of communication and information sharing, the succession process will likely have more traction. Also, understanding that succession is not only a plan or a document but also a journey that will have a number of bends and discomfort along the way. A solid footing in ownership communication can smooth out many of these challenges. – Deanna Salo, CPA, Managing Principal at Cray Kaiser Ltd.

You Can’t Handle The Truth

Famous Jack Nicholson line from the 1992 movie, “A Few Good Men.”

The question for us is, “can we handle the truth? and from whom will we accept the truth?”  In these days of political correctness, and not wanting to rock the boat, how many people in your life are willing to give you the truth?  How many bosses, colleagues, direct reports are you willing to give the truth to?

Performance improvement requires feedback.  Continuous learning is built on measurements/judgements/conclusions and communication of such, providing the opportunity for improvement.  The fact is you can’t improve if you don’t know!

You can improve the chances of knowing what other people think by doing the following:

• Communicate your intentions – you want their feedback, opinions and perceptions
• Listen with the intent to understand when feedback is given
• Ask clarifying questions – differentiating the content and the packaging
• Do not defend or try to excuse the communication or behavior being discussed
• Show appreciation for the feedback provided

You can improve the chances of others wanting to know what you think by doing the following:

• Communicate your intentions – you are interested in their improvement and success
• Confirm the confidentiality of the conversation and the associated trust
• Communicate specifics including statements and behaviors
• Do not try and assume their intentions – ask for intention if appropriate
• Show appreciation for the feedback request

Everyone with whom you come into contact has a perception of you and an opinion of how you are performing in your professional or personal roles.  In your multiple life roles, stakeholders (people who expect something from you) have heard you say things, seen you do things and have at least some questions, if not preliminary conclusions based on those observations.  Their perceptions directly influence the status of your relationships with them today and into the future.

Can you handle the truth?  How easy have you made it for others to tell you the truth?  At least their truth?  How easy have you made it for others to accept your truth?

Be a person who can not only handle the truth but be trusted with the truth.  Get Psyched about the Truth!

-George Karavatuveetil, President, Psyched!