Local business owners offer tips on managing growth

The owners of four fastest growing businesses agree the main ingredients for successful growth involve three things: proper planting, a balance between work and personal life, and treating employees fairly.

Gary Johnson, founder and chief executive officer of Cardmember Publishing, said his company will earn $100 million in revenues on its seventh anniversary this year.

Johnson outlined five points he characterized as crucial to successful growth:

* A company should always have set aside a little venture capital to provide for those periods when business is slow. “Venture capital is the lifeblood of any business. Don’t run short, or the competitors will try to crush you.”

* A company is expected to make mistakes, hut a successful company “capitalizes” on them to improve the business.

* A business must hire good people, and then reward them specifically for taking risks, even when those risks may fail. Making employees wealthy will make the business owner wealthy, Johnson said, offering this as a successful alternative to “pigging everything for yourself.”

* Owners should hire employees who will challenge them. “I don’t want a bunch of ‘yes’ men following me around,” Johnson said. These employees are productive when treated fairly and allowed to participate in making important business decisions, he said. They also serve as a team of advisors who can help a company rise out of a down period.

All businesses need to invest in the latest technologies to stay on top. “In my experience, technologies will help a company grow,” he said.

Benson Zinbarg, president of Sun Hill Industries Inc., said he found success when major department store chains began placing large orders for the holiday decorations he was selling through mail order. “Big companies do pay attention to small-business owners working in their basements,” Zinbarg said.

Sunhill’s springboard to explosive growth, however, was the invention of lawn leaf bags with large pumpkin faces sold during the Halloween season–an instant hit with consumers. Walmart began placing orders for 100,000 lawn decoration bags at a time, Zinbarg said.

The idea or the bag came not from Sun Hill’s management team or from its advisors but rather from Sun Hill’s purchasing agent (who consequently was promoted to vice president of operations), Zinbarg said. “You must involve everyone in your company in all decisions from the receptionist on up.”

Catherine C. Candland, president of Advantage Staffing Services, agreed that employees should be invited to participate in strategic and tactical decisions. In addition to motivating employees to do a better job, the business owner also sets himself up for “an incredible idea flow,” Candland said.

In 13 years, Candland has grown her employment placement business into a company churning out $80 million in annual sales.

When interviewing for the ideal employees, she said, the business owner should tune into the prospective employee’s motivations–past and future.

This is as an important job criteria as experience and skills, according to Candland. “If motivated, they can do and will do the job.”

Candland said a business should attract and retain the best talent and set up a remuneration package for them based on individual as well as team performance.

As for the retail trade, Edward Schachter, founder of Richards of Greenwich, offered what he said was responsible for transforming that clothing business from a $100,000 per year store in 1956 to an $11 million one today. Schachter recently sold the business to the Mitchell family, which continues to operate it.

“You must attend to your customers on a daily basis. You must treat each customer like the most important customer who ever walked into the store,” he said.

Schachter also attributed diversity in clothing lines – from Docker pants to $1,500 suits – to attracting diverse customers. That diversity should range from the kid out of college dressing for his first job to the area’s most distinguished CEOs. Schachter cited that as a reason his business has thrived in spite of a growing number of national clothing chains opening in the area. “You always must improve whatever product you have.”

As did the other owners at the conference, Schachter characterized his personnel as playing a starring role in his successes. “You must motivate your personnel. I’ve decided they are not perfect – but then I tell myself the next person I hire will not be any better.” That remark drew a big laugh from the conference audience.

In reference to finding and managing the money necessary to grow a business, Brian O’Connor, a financial advisor with Diserio, Martin, O’Connor & Castiglioni, said the growing businessman must surround himself with accountants and attorneys, as well as an experienced board of directors.

He said financial advisor scottsdale can, for example, help structure a business to make the best use of tax laws that can mean the difference between paying 40 or 60 percent of earnings on taxes.

A business owner should spend 25 percent of this time devising financial and other plans for the future, O’Connor said. “They should not get bogged down with the everyday minutia of the business.”

O’Connor said he frequently encounters the “high-energy, opinionated” business owner who does not want to listen to advisors, or anyone else. “You cannot know everything. You need a willingness to listen to others,” he said.

Another speaker was Michael F. McNulty, managing director of corporate finance for Forum Capital Markets L.P., a venture capital firm that invests in companies in exchange for an equity position. He agreed that some entrepreneurs and others have forgotten how to seek help. “Often the hardest thing to do is to ask.”

McNulty said companies seeking to earn $5 million to $7 million a year should not discard the idea of spending a typical $5,000 to $7,000 on professional advisors to help devise a sound business plan.

On lawyers and accountants, however, Zinbarg offered conference attendees a different point of view. “I have a strong feeling the best advisors are other people in business who really care about you. You don’t want lawyers and accountants. Instead, look for the people in business who have scars, who have already been beaten up. Lawyers and accountants haven’t been beaten up.”

He said lawyers and accountants will routinely reject some of the best ideas. “If you have an idea, don’t listen to the lawyer or accountants. If it’s in your gut, go for it.”