Jeff: Welcome to Deal Talk, brought to you by Morgan and Westfield, I'm Jeff Allen. If you're selling or buying a business or just interested in this subject, this is the place to be. Our mission is to educate and inform you with the help of some of the most credible, highly regarded experts in the industry of transacting businesses, so you'll be better equipped to make some very important decisions when the time comes to sell your business or buy one for that matter. Now, today it is a little bit different on deal talk; we are going to change things up a bit. If you're an entrepreneur or someone looking to buy a small business or even someone who currently owns a small business I have a few questions for you. Please don't take them the wrong way, please only take them in the spirit that they are intended.
How much do you know about running a business?
How much do you know about marketing your business to help it grow and prosper?
Well, surprisingly, many newer aspiring business owners and some who have been added for a while may be a bit challenged by some of the basic tenets or principles of operating a business. But good news is, chances are you have a very valuable resource in your own backyard, and I am talking about the Small Business Development Center and if you've never heard of these and there are number of them across the country we are here to talk with an expert who can shed a little more light, because he is essentially an insider. His name is Jim Griggy, he is a business advisor for the Small Business Development Center at the Summit Medina Business Alliance in Akron Ohio and Jim Griggy, welcome to deal talk, it is good to have you.
Jim: Thanks. It is good to be here.
Jeff: Jim, first of all, it would be nice to kind of get to know you a little bit more, kind of where you've been, what you're doing and what you do there at the Small Business Development Center in Akron?
Jim: I have been at the Small Business Development Center about eight years. Prior to that I was a director of finance for a franchise organization. Prior to that I was the director of IT for that same organization and prior to that I was the head hunter for that organization. So that is kind of my background in a nutshell.
Jeff: The Small Business Development Center, Jim, give us a little background on how this operates. Is it not sponsored by the Federal government? Is it actually kind of an offshoot of the small business administration?
Jim: Well, that is correct. You might look at the U.S. small business administration as a master franchise or as the franchisor and they contract with an entity in every state or territory to make sure that SBDC Services are available in that state or territory, in Ohio, that is the Ohio development services agency which is part of the Ohio government and then they contract with an entity or entities throughout the state to make sure that our services are deployed to all areas of the state. I am actually employed by this Summit Medina Business Alliance, which is a consortium of local city and county governments, so I can literally say I am from the government and I am here to help because I am funded by the government in just about every level.
Jeff: And for some people to hear someone say “I'm from the government and I am here to help” that's actually kind of a welcome message. [Laughs]
Jim: [laughs] you usually get to laugh and a little bit of interpretation.
Well, that is certainly one of the strong suits that we have, we work with businesses throughout the entire lifecycle
Jeff: But you know what though, Jim, the fact of the matter is there is kind of this renewed interest and striking out on one's own in starting things fresh and operating of one's own business and it seems that there are so many startups now and many people, quite frankly, they have a great idea, they have a business that they would like to be in or maybe a business that they would like to buy, but they just don't have all of the knowledge necessary to really get started and I mean, isn't that really where the SBDC comes in handy for those people who are looking for a way to kind of get in and get help and get started with their business?
Jim: Well, that is certainly one of the strong suits that we have, we work with businesses throughout the entire lifecycle, from people that have an idea and they are not quite sure how to take an idea and make a business out of it, like you are talking about, or people that have started their business and they just want to make sure that they have got all their ducks in a row and so are they in compliance, are they forgetting something, something have overlooked, to businesses that are successful and say: "Hey, we have met our first set of objectives, now we want to either introduce a new product line or develop a new market or expand this business in some way we need a little help on that and, finally, we work with businesses that come to us in crisis and say: "We are looking at our leading indicators and they are not going to the right direction, what do we do?
Jeff: How does someone, Jim, qualify to use the services that are available to them through their SBDC, and you can speak from your perspective there in Akron and how your outfit works there?
Jim: Well, certainly our services are free of charge because we have the government funding. For qualifications, I'm working directly with business owners or business leadership and that's about it. In terms of basic qualifications, you have to be the owner of the business or senior management in the business and then it's simply setting up an appointment to come and see me or have a phone conversation or we do offer a regular series of workshops and seminars that people can come to.
Jeff: And I've had a chance to attend 1 or 2 of the seminars and workshops and they are extremely valuable. Jim, does your operation or agency specialize or tend to cater more to businesses of certain industries or certain types of businesses, maybe with respect to the size in terms of revenues that they generate on an annual basis?
Jim: We are all over the map from self-employment, micro enterprise people that say: "Hey I just want to do this to make a living for myself,” to companies that have couple of million dollars in annual sales or ranges from zero to one and a half million, no, 15 million in net asset value, or up to 500 employees, so we can really cover quite a range. Most of the businesses we deal with are much smaller, they are on the smaller side not the larger side of that range.
We are all over the map from self-employment, micro enterprise
Jeff: So, really, Small Business Development Centers are all about helping local communities build in their economic development efforts while at the same time helping the individual, helping people out taxpayers like you and me and anybody else out there, get started operating their own business and really, when you think about it, it's really kind of helping to facilitate the American dream. I mean, it's not just enough for some people to simply own a home and make that surviving wage and go in work for somebody else and push the papers all day but really there is something very very rewarding. I think many people will see this opening and operating your own business, working for yourself, contributing to the local and regional and national economies because most of the business that is done in this country is done by small businesses. They are makeup the largest part of the economy, do they not?
Jim: They certainly do and you've got it correct. Our government sponsors are all economic developed and oriented sponsors are of city and our county people that we work with that are on board or out of the economic development departments and they all recognize, as we do, that the greatest potential for job creation, the greatest potential for increase revenue, is through small business.
Jeff: Jim Griggy, let me ask you a question. With respect to kind of getting started, let's say that I'm coming to you with an idea, maybe I've opened my doors but I'm looking for ways to really do things the right way. I need some help. I have done all of my research on the Internet, I have talked to my great uncles and my friends and people who know others who have run their own businesses, but I need your help, where do you start off someone who is coming in to see you for the first time?
Jim: Well, the first thing we do is basically an assessment of that business. Where are you, what have you done, what have you addressed, what happens to your address, are you looking for capital or financing or is that not an issue for you? And so we might look at first of all, legal, how they were formed? Are self-prop, are they looking to be an LLC, do they have a reason to be in S-corporation or maybe a corporation? We can help with that a little bit. Do we have a business plan, do we have a roadmap for where we want to go and how are we going to get there? What I find typically is that small business owners are the experts in operational material to business. If they are restaurant they know how to put food out, if they are manufacture they know how to design and build whatever they are making, but they don't always understand the business structure that goes around it and that is kind of what we bring to the party and one of the things I tell or talk about in now, this is basics which is the workshop we use for people that are considering starting their own business is not every good idea, is a good business idea?
What I find typically is that small business owners are the experts in operational material of their business. If they are restaurant they know how to put food out, if they are manufacture they know how to design and build whatever they are making, but they don't always understand the business structure that goes around it and that is what we bring to the party.
Jim: There are lots of good ideas out there that when you do the map they will not bring in the kind of revenue you need to survive and thrive. What I find typically is that small business owners are the experts in operational material of their business. If they are restaurant they know how to put food out, if they are manufacture they know how to design and build whatever they are making, but they don't always understand the business structure that goes around it and that is what we bring to the party.
We coach and we have an outline that we use and we offer workshop on how to do that and we do one on one coaching with how to do a business plan
Jeff: They can end up costing a business owner more money to simply stay in business or make a go of it rather than as opposed to what they might make no matter what they try to do, it's a very interesting point and I think it's really really helpful. You're doing a service to these people and sometimes doing that service really kind of passing along that brutal honesty, it may be a bitter pill but it could have helped them avoid some, truly some financial calamities, I would think, Jim, when you get right down to it. Do you help business owners or those people that are newbies who kind of just getting started, write that business plan, you kind of tell them what they need to include in it and kind of help them along and other things?
Jim: Absolutely. We coach and we have an outline that we use and we offer workshop on how to do that and we do one on one coaching with how to do a business plan. I rarely get involved in writing the business plan because when that business plan is presented to a lender, a banker or some sort of an equity investor, they do not care that the business advisor understands how the business works. They care that the person who is going to be receiving the funding understands how their own business works, so I need to coach them through how to do that business plan, all that flow through their mind and kind of register.
Jeff: What about helping the people understand they need for other types of things to help them with respect to not just things like culture which is kind of internal and it's really kind of the personality of the company but things like basic things like operational a procedure--procedural manuals and things like that, you go through those types of things and whether or not a particular type of business should have those types of resources available to their workers in order to help make sure that the operation of their business goes as smoothly as possible with respect once again to policy procedures and things like that.
Jim: One of the biggest example of that is that a lot of small businesses never actually reduce their employee policies to writing. One of things that we like to see a small business have is an employee handbook so that if there is an issue that were questioned down the road, everybody's working from the same set of information, everybody knows what the rules are. Certainly the other thing is, a lot of people think that they can manage the finances of the business with a checkbook. Of course there can be money in the checking account because the business profitable or there can be money in the checking account because business has not paid all of its bills. So, there's a need to, a real need to encourage small business owners to actually make good financial statements, do monthly financial statements and learn how to read more than whether that bottom line is a plus or a minus. It is a management tool to choose and we spent some time teaching people how to use financial statements as a management tool.
One of things that we like to see a small business have is an employee handbook so that if there is an issue that were questioned down the road, everybody's working from the same set of information, everybody knows what the rules are.
Jeff: Jim Griggy, let me ask you one question here before we break for a moment. In a typical week, what is one or maybe even two of the most common questions or needs that new and prospective business owners come in to get help with, things that you would kind of deal under regular basis?
Jim: Three things that I would say are, the top of the list, 1. what and how to organize the legal entity I should be, 2. help me put together a business plan and 3. I need to raise some money, how do I do that?
Jeff: And with that said, we are going to take just a quick break. We are going to come back and talk more to Jim Griggy and get more specific answers to some questions about what business owners need to know or what they can find, in terms of information from their Small Business Development Center, to help them get on up and running and, not only that, but to help them continue to operate at a level that will be for their best interest to run their business profitably and help contribute to the local economies as well. Jim Griggy, business advisor for the Small Business Development Center is our guest, you are listening to Deal Talk brought to you by Morgan and Westfield. My name is Jeff Allen; I will be back after this.
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Jeff: This is Deal Talk, Morgan and Westfield brings it to you and my name is Jeff Allen. Speaking with Jim Griggy, business advisor for the Small Business Development Center at the Summit Medina Business Alliance in Akron Ohio, Jim, thanks for staying with us through the break. This is a real interesting conversation because many of us, yours truly included, small business owners, so I always like to stay in touch with the things that are going to be of help and assistance to me down the line because it helps me provide improved service to my clients and my customer, so everyone is happy and we all want to grow, let's face it, until we just simply do not want to grow anymore, we are ready to hang them up and retire, but Jim, there is something that you have found that really most new business owners lack? I mean, we talked about the understanding of how to operate a business because they are in their own little world, but is there something else that stands out oftentimes when you talk to your clients about things that many people, business owners, surprisingly don't really have a firm grasp on?
Jim: That is the risk. I will start with a story. Back when I was an undergrad, I would adorned the psychology college department of a university and there was a sign on a door that said: “Reality therapy", and I always wondered what was on the other side of the door. Lately, I am thinking I am the guy on the other side of the door.
A lot of what I do is help to bring things into focus. What will you bring to market, how do you monetize it, are you going to be able to generate enough revenue if you are buying an existing business? Are you doing your due diligence, are you doing the market research, are you looking at the competitors, are you looking at the lay of the land, how you fit and whether there's enough room for you to succeed, whether it's pre startup market research or whether it's due diligence on the part of someone buying an existing business? It's very important to understand the environment in which you are going to play and also to understand what the realities of your business circumstances are.
And I find that people hate due diligence, they are trying to avoid it. I worked with a young veteran who was buying a business and it was a very friendly sale. He had worked with this business he was looking at, as a manufacturer’s rep, repping the line of products to them and through a strange set of conversations, they got talking about this young man taking over the business. He was very hesitant to want to do the due diligence because it was such a friendly transaction and there was a lot of, “hey I know these guys are friends,” I know they're being straight with you but you really need to understand what you are buying. And if they are that friendly then they will understand that you need to really understand in detail what you are buying, what you are getting and all the more so if you're not in business already, watch the reality of the world you are entering. You need to understand that before you start throwing money at it.
It's very important to understand the environment in which you are going to play and also to understand what the realities of your business circumstances are.
Jeff: So, I think many people want to believe that the person they are doing business with, or buying a business from, I should say Jim, they want to believe that it's possible to really be able to get a deal done with the-- negotiate a deal that's satisfying everybody and a handshake without actually doing their homework in advance to see exactly what's underneath the hood. Let's take a look at this thing more closely, is there a little bit more than meets the eye here that I need to have to deal with and so, what you are saying is you are able to sit down with an individual and basically just kind of give a lay of the land and remind them that, look this is for real, once you take and you transfer the funds to this individual and you take over their business you're also going to be taking over potentially some problems, right?
Jim: Exactly and it's not that the Sellers necessarily trying to be dishonest or hide something but the seller may think the buyer understand something and the buyer may not even know how to ask and part of my job is to help them to know to ask so that when they walk in the door they know what they have got, they know what their restrictions are, they know what their contracts are, they know what their responsibilities are to the outside world.
Jeff: That's Jim Griggy; he is with a Small Business Development Center in Akron Ohio. My name is Jeff Allen this is deal talk brought to you by Morgan and Westfield. Jim, let's say for example, hypothetically I have a business and it’s been up and running for about five years now and, it could be any business, maybe it's an auto parts store. We have been successful but we want to grow our business beyond our current location. I've never come in and seen you but maybe you've driven by my business on your way to the office there in Akron, can the SBDC help me and my team grow our business even though we kind of been at it for a while, but we are the kind of in a position where we need a help with that?
Jim: Absolutely and for circumstance like that, where there is an established business, I would want to go and visit that business at that business site early in the process, maybe not the first meeting, it might be the second meeting, just to understand and get a feel for how that business operates. If you are talking about opening another store somewhere, another location, it is what they do at location A- transferable, is there a reason that the location B makes sense or they may -- would they be smarter just to expand their operation at location A. So things like that, assessing where they’re at, what they do well, helping them understand what new kinds of problems that are going to come up if they expand the shift or expand to a new location or in some other way expand into a new market and of course help them do the map. Help them with financial projections to see that this makes sense from a money standpoint.
I have an awareness of what the banks in my region requires, the minimum standard for getting a business loan of various sizes and various stages and I even go along with my clients a lot of times to their loan meetings if they like, again not to present for them because the lender doesn't care that I get how the money is going to be used, but I can be there to prod if there was a good point that's not coming out
Jeff: And speaking of money, great segway Jim, when a business owner comes to you in need of financial help what kind of guidance will your office provide and how can you help?
Jim: We do a lot with that and I like to say I get my clients loan ready. We don't have a source of money that we deal with directly but we help them with the business planning. I have an awareness of what the banks in my region requires, the minimum standard for getting a business loan of various sizes and various stages and I even go along with my clients a lot of times to their loan meetings if they like, again not to present for them because the lender doesn't care that I get how the money is going to be used, but I can be there to prod if there was a good point that's not coming out if there is something that would help the case that's just not coming up the conversation I could say: " Hey, I bet the bank would like to hear about this or I bet the investor would like to know that you've got his activity going on."
Jeff: Here is a question that really I think kind of speaks to the wants and needs of individuals that are -- they're sitting back in their office or their place of employment or they work in a shop or maybe, I do not know they could do any kind of myriad of types of jobs for any industries Jim, and they are unhappy, they think that maybe they know deep down inside that owning their own business would be the thing that they would like to do would really be fulfilling and maybe they even have the means to get started with this somehow someway may be financially or otherwise, they've got what it takes but they really don't know what they want to do, they don't know specifically what industry they want to be involved with, all they know is that they have this dream and they have had it for a while of being able instead of driving to their current Office or work location, going to their own business putting that key in the lock opening the door saying: "Okay this is my place, this is my business," how do you to talk to people with these dreams and aspirations, even though they may not know exactly what it is that they want to do, I mean is there something that your agency or the people who you work with can do to help these people discover what it is that they might be able to get involved with?
Jim: Well, as a business advisor, I don't tell people what line of business to go into. I want them to come to me with an idea, this is what I want to do, how do we make it happen? As a person I can say: "Hey, you have got to be passionate about whatever it is that you're going to do, you are going to be spending 60 to 80 hours a week on this business idea of yours. If it is going to support you and your family, it is got to be something that you care about more than just the dollars and cents of it, that you actually are excited about the product or service you are offering and so you have to do the soul searching, what excites me in that way,” and oftentimes what will help people is I tell them: "Make a list, look at all of the job you have ever had, what did you like about that job? What did you dislike about that job?” And find a business or an industry that checks off a lot “likes” and not so many “dislikes.”
Well, as a business advisor, I don't tell people what line of business to go into. I want them to come to me with an idea
Jeff: What could be worse then leaving a perfectly good paying job with benefits and then you go to work for yourself in a business that quite frankly you just did not end up giving enough thought to when you find out you don't like it all, so your comments there about finding something were discovering which you are passionate about speaks volumes Jim, about the kind of rudimentary basic first steps that someone has to take before they go down the line and start looking into the type of business or types of businesses that they want to get involved in or possibly own. So I appreciate that, that's huge feedback.
Jim: My worst client is someone that comes in, sits at my desk and says: "What is making money today, I want to do that."
Jeff: Yeah, you really kind of have to question exactly what their motives are and whether not their serious about what they want to do because there are plenty of people online who prey on individuals like that the get rich quick schemes and things like that and those are the types of things obviously that any reasonable person should stay away from. Jim, how important is the SBDC to the communities that it serves in terms of the value of the services it provides, the business owners and the role it plays in local and regional economic development?
Jim: Well, I am going to give you few stats of course, Small Business Development Centers are graded on economic impact and so last year, my center here in Akron, the three of us that do business advising , four of us to do business advising cost eight million dollars in capital infusion, our clients had sales increases of over 18 million dollars for the last year, 9 new businesses started, and by started I mean actually opened the door and started generating revenue under our guidance, and if we look at the state of Ohio, SBDC's work with clients that increase their sales by almost 200 million, 198 million and responsible for helping businesses get a 122 million in new capital and in terms of jobs created throughout the state of Ohio over 3000 jobs were created by businesses working with the SBDC.
Jeff: And when you think about it, it's unbelievable in terms of the fact that, well, it's helping to bring all of this money into these communities and helping business owners expand their businesses. It doesn't cost anything for a business owner to walk into your office and get guidance.
Jim: That is absolutely correct.
Certainly. Get your idea formed; what is it that you want to do, what is it that are doing, and you can call us and schedule an appointment to come in and see us, most of the Small Business Development Centers have websites where workshops and training schedules are posted so you can register for those.
Jeff: Unbelievable. Jim we are running out of time, any final thoughts or advice that you'd like to leave these people who might be interested in seeking the guidance or assistance of their local or regional Small Business Development Center where ever it is that they live.
Jim: Certainly. Get your idea formed; what is it that you want to do, what is it that are doing, and you can call us and schedule an appointment to come in and see us, most of the Small Business Development Centers have websites where workshops and training schedules are posted so you can register for those. In the state of Ohio, there is the first stop business connection on the Ohio website that will guide you to a preliminary process that will lead you to the Small Business Development Center in your area. Please reach out and come talk to us. Let us talk about your business, a lot of times a client will learn something about their business simply by trying to explain it to somebody who's not familiar with it.
Jeff: Jim, give us that website address, would you?
Jim: For our center its akronspdc.org. For the State of Ohio it is ohio.gov and go the business tab.
Jeff: There you go, Jim Griggy. What a delight, it's been fun. Thank you so much for being with us today in Deal talk, we really appreciate it.
Jim: Thank you, Jeff.
Jeff: Thanks again. Jim Griggy, business advisor for the Small Business Development Center at the Summit Medina Business Alliance in Akron Ohio for joining us today on deal talk, presented by Morgan and Westfield, a Nationwide leader in business sales and appraisals.
If you'd like more information about buying or selling a business call Morgan and Westfield at (888)-693-7834 or visit MorganandWestfield.com. I hope that you enjoyed today's show, I know that I did. I'm already looking forward to talking to you again. So, until next time, my name is Jeff Allen. Take care.