Thursday Night Welcome Dinner at The Nash restaurant: (left to right) Tarik Benmbarek, Luci Miller, John Lipari and Hiram Russell.
By Ed Avis
A dozen APDSP members gathered in Houston on March 16-17 to learn and share information about buying or selling a reprographics firm. The speakers were Chuck Gremillion, former co-owner of A&E The Graphics Complex in Houston; Joel Salus, a long-time reprographics entrepreneur and consultant; and Carter Crisp, vice president of marketing for Crisp Imaging, a rapidly growing reprographics firm based in Southern California.
Loads of information was exchanged during the event, and here are five key take-aways:
Chuck Gremillion
1) Your delivery drivers are your ambassadors. Chuck Gremillion’s presentation covered the years he and his brothers built up their reprographics firm in preparation for a sale. He explained that when they made the determination to eventually sell, they created a years-long strategic plan to grow the business so that they could maximize value when the time was right to sell. This plan led to many improvements, but one key improvement was a commitment to customer service. They decided that they wanted their customer service to be considered the gold standard, and they would know that when other companies emulated them. Among the ways they lived up to that commitment was by telling their delivery drivers that they were not just drivers, they were company ambassadors. That expressed the attitude they wanted all employees to feel – that they should always represent the company well, and that they should act as if they were owners, not employees. The commitment paid off, Gremillion says, because soon word spread about the amazing customer service they offered and new customers signed on.
2) Create standard operating procedures. Another way Gremillion and his fellow family-owners improved their business was by developing standard operating procedures for every job. That way each employee clearly knew how to do his or her job. Salus, who spoke about his experiences buying, selling and brokering the sales of reprographics firms, reinforced that point. He said that at one of his firms, employees of a new location were frequently calling him at the main location to ask questions about how to do things. The calls became a constant interruption. He solved the problem by writing operating procedures for everything those employees were supposed to do. The questions stopped.
3) Consider giving key employees “phantom stock.” Gremillion and his brothers wanted to give key non-family managers a sense of ownership without giving them actual stock, so they issued “phantom stock.” The phantom stock did not come with ownership privileges, but it did give those employees a share of the proceeds when the company was sold, assuming they were still employed there. That way these key employees knew they stood to benefit from the strategic growth of the company.
Joel Salus
4) Keep your books “clean.” Small business owners commonly funnel some personal expenses –such as family travel or personal auto expenses -- through the business in order to reduce their income tax burden. When they get ready to sell their business, they typically add these personal expenses back into their bottom line, with the idea that the new owner will not have to pay these expenses, so they are legitimately profit. But if you plan to eventually sell your business, avoid that as much as possible, Salus said. Potential buyers are wary of these “owner add-backs,” and may walk away from a sale because of them. “The buyers who do make an offer will reduce their offer because of them,” Salus said.
Carter Crisp
5) If you’re a buyer instead of a seller, don’t overlook the importance of culture when evaluating a potential acquisition. An acquisition can fail – or at least go less smoothly – if the culture of the firm you’re buying doesn’t mesh with your own, Crisp explained. He said they meet with the leaders of potential acquisitions before the sale happens in order to get a sense of how those leaders run their business, treat their employees, serve customers, etc. – all elements of company culture. When they find a potential acquisition where the culture meshes well with Crisp’s culture, the sale is more likely to happen.
