Business Succession Planning Insights: Tales from the Trenches

9. May 2018 09:48

By:  Terrance K. Resnick and Leon B. Resnick: Resnick Associates

(Part 2 of 6)

Inadvertently Disinheriting Your Children from Business Ownership

Yes, it happens – more often than business owners realize. Worse yet, is this trap snares many business owners that have actually implemented succession planning! There are many reasons how a business owner can disinherit his or her own child. Think it can’t happen to you? Think again.

A common example is a business that has two or more owners that happen to have their children actively working in the business with the intent of continuing the business well into the future. The problem arises when a succession plan doesn’t get updated. 

Many years ago siblings, Larry, Harry and Mary started a single lumberyard, as equal owners. The single lumberyard grew to five and the business was thriving. The siblings had the good foresight of establishing a funded buy-sell agreement that would make certain if one of the owners departed the business for any reason that there would be mechanisms in place for the owner’s business interest to be bought and the remaining owners would own the company 50/50. There were many components of the plan; however, the overriding objective was for the company to buy back the stock of an owner that departed the company for any reason. Sounds fairly straightforward, right? It was straightforward when the plan was implemented; however, as time went by Larry, Harry and Mary each had a son come into the business with the intention that their own sons would acquire their own parent’s shares. Again, a very common intention for many business owners. So what’s the problem? Harry unexpectedly passed away and the dream of having his son own his shares passed away as well. Remember, each of the owners’ business interest was structured to be bought by the company at their passing.  In this particular situation, Harry’s shares at his passing were purchased by the company. Harry’s son’s business ownership future – over and done.

 Learn more about this topic at the "Survive and Thrive - Assuring the Long-Term Success of Your Company" session at the IWF 2018 Education Conference.

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Replacing the Annual Employee Evaluation

7. May 2018 11:25

By: Mike Hill, Michael W. Hill Company

Recently I’ve read a couple articles, and I’ve even had some friends and business acquaintances send me articles, with titles like: “Companies Ditching the Annual Performance Review”! And annual reviews will no longer be given at many Fortune 500 or Inc. magazine top 500 companies. Knowing that I’m a strong advocate for employee performance evaluations, my friends who send me these articles they think they’re shocking me.

These business people fail to read past the attention-grabbing headlines. Many managers, like most of their employees, “hate” giving or receiving a review, so they think these articles with these titles give them good sound bushiness reasons to stop the review process all together.

I’m encouraging everyone to read past the “Shock and Awe Title.”

Once you get past the title you’ll see that yes, IBM, General Electric and SAP are dropping their annual reviews. But in actuality, what each company is doing is replacing the annual review with more frequent reviews. It’s an idea I’ve been advocating for years with the audiences I speak to and the executives I work with.

The annual review has fallen out of favor because the business world is changing too quickly, hence company goals and targets are changing weekly, monthly or at least quarterly. So, what the excellent companies are finding is that their employee evaluations need to be a continous performance management process.

The fact of the matter is, if you want to make your company as successful as possible, you need to evaluate your people and probably more often then you currently are.

Occasionally I’ll hear from a company owner: “Mike, we don’t evaluate our employees and we do just fine.” My response is always the same: If your goal is to be a company that does – just”fine” or is content to be “mediocre,” don’t do employee reviews. But if you want to be recognized as a leader in your field and a company that is more profitable and successful than “mediocre,” measure your employees.

Whenever you can, measure, and you’ll see results in the improved performance of everyone on your team.

 To learn more on this subject, check out Mike's session, "Using Measurable Data to Get Maximum Employee Performance" at the IWF 2018 Education Conference.

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Selection Processes Reduce Chances Of Poor Hires

7. May 2018 11:18

By: Cyndi Gave, The Metiss Group

Select (verb) – To choose in preference to another or others; pick out (Random House Dictionary).

Process (noun) – A series of actions, changes, or functions bringing about a result (Random House Dictionary).

A selection process should consist of a series of actions to bring about an ideal choice of candidates.  Many leaders rely on intuition, gut instinct, or some haphazard interview approach when choosing among candidates.  The best hiring managers use a defined, repeatable process for selecting talent.

The selection process should include three phases:

  1. Job and ideal candidate definition;
  2. Candidate screening;
  3. Candidate evaluation.

Define the job and ideal candidate in the definition phase clarifying what is expected of the job and what the ideal candidate will look like.  The screening phase should include consistent behavior-based questioning and assessments that tie back to the job and candidate definitions.  The evaluation phase should analyze gaps and discrepancies between observed candidate behavior and job and candidate requirements.

Hiring managers should define the steps in the selection process, stick to them, and empower those in the selection process for success.

Learn more about this subject during Cyndi's session, "I Hired Workers but Human Beings Showed Up" at the IWF 2018 Education Conference.

 

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Create Better with PaperStone Labs

7. May 2018 11:13

By: Kim Loftis, Caragreen

 Mar 06, 2018  - Hoquiam, Washington

 PaperStone has launched its latest venture, PaperStone Labs, to help designers, architects and innovators get a sneak peek into what really goes on behind the scenes at its Washington think tank. PaperStone Labs is a place to go if you have an idea that you would like to collaborate on and help bring to market. Want a new color? Ask PaperStone Labs. Is there a textured finish you would love to see? Ask PaperStone labs. Need a specific resin made for your application? Ask our scientists.

Long thought to be just a countertop, PaperStone is much more. The proprietary resin developed by PaperStone is tweaked and modified for a myriad of applications including pool tables, guitar parts, knives, and more. Behind the scenes, PaperStone collaborates with OEM manufacturers to make the perfect material for their applications.

One of the recent innovations that have come out of PaperStone Labs include GatorSkins, the most durable, least-wearing skate ramp material on the market. Competing against large skate ramp suppliers, skaters prefer GatorSkins small company feel and the handholding throughout the process and ease of getting the material.

Another creation, CharredStone, is a textured vertical panel that can be used to emulate charred timber without the wear and durability issues of the burned wood itself. CharredStone has the durability of PaperStone but is lightweight and very cost effective.

Our Labs released PaperStone Cladding, an exterior product comprised of a PaperStone core, but incorporating a more UV stable cap sheet to ensure fading is kept to a minimum and performance and durability are unmatched.

Long forced into organic neutral colors as a result of the base resin, PaperStone Labs came up with an innovative technique to create lighter colors which are incredibly stable and show very little wear over time.

Have an idea for PaperStone Labs? Share it with us. We want to give innovators a place to speak their minds and work with our material scientists and chemists to create better.

To learn more about this topic, check out the "Innovation in Composite Materials" session at the IWF 2018 Education Conference.

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It is not the team with the most talent that succeeds….it is the most talented team”

1. May 2018 15:32

By: Gary Vitale, GFV Business Advisory

We all strive to hire the best individuals for positions in our company; and we evaluate these individuals on an annual basis.  But how often do we evaluate them as a team?  How often do we really sit back and look at the talent gaps that are keeping us from reaching maximum performance as a company?   We can learn a lot from professional sports teams that evaluate talent gaps all the time.

Sports teams recognize that to succeed they need players that complement each other’s strengths.  Done correctly, this is powerful and gives the team a slight edge that can mean the difference between a win or a loss, or getting into post season tournaments verses watching from home.

Unfortunately for businesses, we do not have the luxury of observing or “scouting” candidates in game situations like professional sports teams.  We must rely on other tools; interviews, references, and professional assessments.  And just like a sports team, when these tools are used correctly, it gives you a powerful edge over the competition.

The best way to give yourself that slight edge over the competition is to know your strengths and the strengths of your team.  The first step is to learn all you can about yourself and your team using interviews and professional assessments.  You’ll be surprised to see how much easier it is to manage through crisis and challenges when you understand your strengths and those of your team members and can match them to address specific situations.

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Compressor vs. HVLP Turbine System

1. May 2018 15:28

By: Jim Larin, Fuji Spray

Which is Better: A Compressor System or an HVLP Turbine System?

When it comes to spray equipment, different systems, such as a compressor system or HVLP turbine system, have different capacities. Depending on the type of outcome you’re looking for, you may use one system over the other. Each has their advantages and drawbacks, and knowing which one to use can improve your operations and save you both time and money.

Here’s what you need to know when choosing which system is best for you and your spraying needs:

A compressor system offers a faster speed of application

A compressor sprayer applies material with more power and at a higher speed. An HVLP system must spray material at lower air pressure levels (below 10 psi), while compressor systems spray material at higher air pressure levels (20-90 psi, depending on the specific system). We find that for production workshops and manufacturing facilities working with a high number of products or larger surface areas, the speed of a compressor sprayer is advantageous.

An HVLP turbine system is more environmentally friendly

While a compressor system operates at a faster speed, the HVLP sprayer’s slower, more precise application also offers benefits. For example, an HVLP turbine system’s application results in less overspray and ‘bounce-back,’ as paint and finish particles are less likely to rebound into the air. In fact, in certain areas of the United States, such as Southern California, you’ll find that high-pressure compression systems are prohibited entirely. As a result, compressor spray systems require higher safety standards, including a well-ventilated spray area or even a spray booth.

Certain materials require more preparation with HVLP turbine systems

The pressure settings of an HVLP system can be adjusted – but they cannot be increased beyond the maximum limit of 10 PSI, and this maximum limit is lower than that of compressor systems. So, in order for higher viscosity materials to be applied properly, they must be diluted.

HVLP turbine systems are portable, but compressor systems are not

Since turbine systems are light and compact, the entire system is portable. We find that being able to spray or do touch-ups on any job site can be very beneficial. Even having the option to move your unit indoors or outdoors can help when spraying specific projects. Compressor systems are not mobile, and this yields less flexibility and last-minute fixes.

Ultimately, both HVLP turbine systems and compressor systems will get the job done quicker and more effectively than using a paintbrush and rag or roller. The decision of which system to use largely depends on your operations, whether you’re a DIYer or an avid, professional sprayer. Contact the experts at Fuji Spray to learn more about the features of each system and to find out which one is right for you.

 Learn more about this at Jim's session, "Benefits of Portable Spray Finishing System in a Small to Medium Sized Production Shop Setting" at the IWF 2018 Education Conference.

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What exactly is “Modern Design” anyway?

30. April 2018 10:54

By: Shelley Wehner, Cabinet Concepts by Design

Your prospective customer says they prefer a modern look, but you’re not quite sure what they mean. To put it simply, modern design focuses on minimalism, neutral colors, clean lines and environmentally-friendly materials. Modernism, at its core, rejects ornate flourishes of other design styles. Now that you understand the general meaning, specifically how would you implement modern design elements in the kitchen décor and other areas of the home?

Clean Straight Lines

Modern design is the antithesis of the previous design styles which used heavy textures, carvings and wood tones throughout the home. Because of this, most components of modern design from the furniture to the shape of the rooms include clean, straight lines with no additional detail. There are several different design types that fall into this category, particularly for furnishings, such as:

  • Mission style
  • Art Deco
  • Shaker

Any of these or other clean, spare furnishings are an integral part of modern interior design. Paired with the furnishings are things like:

  • Oversized tiles with rectified edges
  • Sanded wood floors that minimize the grain
  • Bookcases and shelves inset into walls, rather than protruding into the space
  • Open floor plans with few walls
  • Lack of moldings trimming windows, doors and walls

Use of Metal

Chrome and stainless steel make up a big part of modern design. Doing away with traditional metal details, like wrought iron for example, opens up the door for clean, polished metals to be used instead.

It's not uncommon to see chrome or stainless steel as part of the furniture, such as table legs or exposed portions of a chair's frame. Chrome is used extensively throughout the home seen in faucets, doorknobs, cabinet handles, lamps and railings. Polished chrome has a very high shine and a slightly blue undertone that makes it appear very cold, which helped it fit in well with modern design's mission for moving away with older, more "lived in" styles.

Minimalism

Minimalism plays an integral part in modern design, as well as contemporary modern design and contemporary design. The basics of minimalism include a "less is more" approach to designing a space. This means there are no superfluous details such as columns, moldings, cabinet trim, excessive use of color or excessive use of textiles.

Minimalist design can be thought of as sparse, but in reality it takes a lot of planning to ensure that what's included in the home is absolutely necessary. Minimalist homes are often far more comfortable than they appear, due to the way they are streamlined for efficiency.

Lack of Clutter

A lack of clutter ties into the minimalist approach to modern design. While clutter can mean many things to different people, in regards to modern design it refers primarily to accessories. This means no knick-knacks, vases, pottery, collections or excessive use of throw pillows, rugs or blankets. Any necessary items, including books, electronics and keepsakes are kept either out of sight inside a cabinet or closet, or are built into the home with built in shelves or hidden storage beneath benches or window seats.

Bold Accent Colors

The majority of homes decorated in modern styles use neutral colors and shades of black and white throughout the home. Bold, often primary, colors are only used as accents to help break up the neutrals and provide focal points. These colors are often introduced sparingly, and rarely used as an all-over wall color. Examples of how to use bold colors in modern design may include:

  • Abstract wall art
  • A single piece of furniture in a bold color like a red leather sofa or an orange plastic chair
  • A few bold-colored throw pillows
  • A single bold-colored throw rug

Learn more about modern design during a lively panel discussion during IWF called “Acing that modern job”. The panel features myself and two others who do modern work. We will explain our methods and tricks for executing award-winning modern cabinetry and millwork.

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But I Don’t Want to Run a Software Company

30. April 2018 10:49

By: Randall S. Becker. Factory Automation Consultant. CBD of Central Ontario.

At IWF Atlanta 2016, we saw a virtual cornucopia of sparkling new hardware on the floor that made us all tremble with glee and panic at the same time. An increasing requirement to use these fantastic productivity assists is full-on automation. Sure, you could always do it by hand, and keep your factory small and rustic, but to really grow, you probably have already decided that automation is the thing. Even existing products, like edge banders, which are notoriously hands-on, are getting technology face lifts. That’s right, when you wear out your awesome five-year-old bander that did so much for you, you may find that the new one has a sparkling new screen on it, with network connectivity, automatic this, barcode that, and oh my goodness how are you going to use it, and don’t touch the screen with glue and solvent on those hands.

The advice in 2016 was, “Go hire your teenage kids because they know all about computers”. I’ve been a teenage kid, really. I swear. And back then, yes, I was a wunderkind, who could program up a storm on almost anything. But I am not normal or representative, then or now. Understanding how to use a smart phone or laptop is a lot different than running a CNC or bander. Here’s why, and what you might want to consider:

Running a CNC is more than hitting the green start button. The production side of your company, the factory, the part of your organization where the dust collection is so important, is about running the machines consistently and following the regular processes. That hasn’t changed much although the tools of the trade have become really complicated compared to even ten years ago. There’s a good chance you can teach existing staff how to use the automation. The number of steps required to run one of those machines is not that large, and it mostly comes down to lubrication and cleanliness. It is the development side of the shop that has really evolved to confound you – you may not be calling it that, yet.

The development side is where you are becoming a software company. The role of your designer/cutlister/CNC coder – you know, the kid you were supposed to hire – must understand how to get from an idea to a set of instructions that a big machine, which can do real damage, can understand. As a low-tech owner/craft-master, you could understand the tooling and techniques required to get from the idea in your idea to a set of instructions for people in the back. That kid should do the same thing, except there are no people in the back to talk to, there’s a laser, or router, or bander glue feed, or inventory robots. I don’t envy them – well, I do really because for me it’s a lot of fun -but they need to understand and embrace your entire business and understand the nuances of each tool. They are not using a computer, they are telling a computer how to control very expensive and potentially destructive tools.

The secret sauce is to be able to follow a development to production process that includes quality control and testing of components that are being sent to the factory. I’m pretty sure that I never heard most of those words when I was a kid. Software development processes are very similar to coming up with a new design for a table. You must make sure your designs are going to work before you send it into production and repeated exactly thousands of times – you don’t want to have to replace them all if a joint is cut badly or improperly fastened, exactly as told to the machinery, right? What I learned from being involved in factory automation is that you need to have a level of process maturity that comes with experience. You need the technology background, sure, but you also need to know the business. As the owner/manager, you need to have people who are know how to program your machines and can take direction to follow your manufacturing processes. That’s not a kid with a phone.

Learn more about this subject during Randall's session, "Managing Your Soft Assets - Advanced Manufacturing Processes for Managing Your CAD Component Designs and More" at the IWF 2018 Education Conference.

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Pricing for Profitably

27. April 2018 11:37

By: Sean Benetin, Millwork & More, LLC

Every woodworker I know struggles with pricing. If you have reviewed FMDC magazine’s annual pricing survey, you know that quotes for the same project vary drastically from company to company, and it’s not just the regional factor. Why is this so difficult?

Quite simply, it’s difficult to be competitive and still make a profit. So how do you find the balance?

In truth, pricing is not nearly as complicated as it appears. However, in order to profitably price projects, you need to know the answers to the following questions:

  • What is your hourly rate(s)?
  • What is your minimum break even yearly/monthly/weekly?
  • How much do you pay yourself as an “employee” of your company?
  • Total invested in your company? If you had to start from scratch tomorrow what would it cost?

Easier said than done, right? How do you even begin to calculate these things? How can you put a value on what some may consider “intangibles”? Do you wish that there was a “cheat sheet” that you could use? Why isn’t there an Easy Button for pricing and profitability?

Here’s the good news: there is an Easy Button – an actual “cheat sheet” does exist. I have taken the time to develop spreadsheets and pricing structures to calculate the numbers needed to price profitably. And, here’s even better news: I’m willing to share this information with you.

During my seminar at IWF, you will have the opportunity to learn “The Art of Pricing Profitably”.  In an straight-forward way, I explain the importance of knowing your numbers. Not only will you gain an understanding of key financial concepts, you will also leave with prepared spreadsheets that you can use to do your own calculations.  Essentially the class will set you up for future success. Consider this your springboard to profitability.  

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Sustainable Innovation is Built on Trust

27. April 2018 11:28

By: Monique MacKinnon, Energetic Evolution

Everything is energy. And since hugging a tree can benefit our mental and physical well-being, do different woods elicit different moods? The simple answer is yes.

Woodworkers and furniture manufacturers can also influence customers’ states: through their craft and level of consciousness. Consider this: How do you respond to people who trust you? Are you more likely to trust or distrust them? On the consciousness scale, trust is in the neutral position.

Therefore, if you trust yourself, does trusting others come more easily to you than for someone with trust issues? Do you prefer doing business with and being someone with a toned trust muscle, developed through years of discernment? If your company or business is known for being trustworthy and reliable, how does this affect your and your sphere of influence’s prosperity and quality of life?

We will deep dive beyond tree hugging into where you most trust yourself to be successfully and sustainably innovative in the woodworking industry.

 Learn more about this topic during the "Sustainable Innovation is Built on Trust" at the IWF 2018 Education Conference.

 

 

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