FIND THE CAPITAL YOU CRAVE
See things your banker’s way
Do you know what your bank requires before it can loan you money? If not, you’d better find out. That’s the advice of Jonathan Finley, president and CEO of Credit Bureau of Canada Collections (No. 191 on PROFIT’s 2009 ranking of Canada’s Fastest-Growing Companies). Finley, who spent 12 years as a banker before launching his Mississauga, Ont.-based collection agency, says, “You have to understand the banks’ requirements and then meet them.”
At the top of the list, says Finley, are solid financial statements, such as a review engagement or audited statements from a reputable source. Other essentials — which a surprising number of entrepreneurs don’t have at the ready — are a current business plan, how you’ll use the money and the intended results. Supplying his bank with these documents helped Finley recently secure two loans and an expanded credit line. “We’ve borrowed more money from our bank in the past four months than we did in the previous 10 years,” he says. “If you can present a good case, you can get money.”
To ensure you have plenty of cash on hand, follow the lead of Innovative Vision Marketing Inc. (No. 123). Sajan Choksi, managing director and CEO of the Toronto-based provider of call-centre services, says that while his clients usually pay up within 30 days, Innovative Vision typically pays its invoices via credit card. That extends his payment terms by an additional 25 days.
“Instead of having a cash outflow of 30 days, we have 55,” says Choksi. Of course, this tactic works only if you pay your credit-card balance in full every month. Otherwise, you’ll get hit with hefty interest charges.
Get credit before you have to
When Brian Edmunds launched Nexstaf Inc. (No. 151) in 2000, he arranged a $200,000 bank line of credit — even though he didn’t need it. “I just wanted to build a rapport with the bank,” says Edmunds, managing director at the Mississauga-based IT staffing agency. Indeed, with ample cash on hand from the sale of his previous business, Nexstaf didn’t use the credit for five years, prompting several queries from puzzled bankers.
Still, Edmunds’ foresight paid off. When his cash requirements grew apace with his firm, the money was waiting for him. This avoided the common situation in which a bank is reluctant to loan to any business anxious to get its hands on the money. “Usually, when you need the credit,” says Edmunds, “they don’t offer it to you.”
Don’t count on just one lender
Derek McGeachie, CEO of Toronto Sylvan Learning Centres (No. 64), knows the value of dealing with more than one bank. That’s why the franchisee of after-school tutoring centres spreads its business among three lenders.
“That’s three banks that know us and like us,” says McGeachie. “If you’re a new customer and you walk into a bank and ask for money, especially in these times, they’re suspicious.”
McGeachie says you’re likelier to get financing if you have three potential lenders rather than just one. And, he says, he gets better service because each of his banks knows about the other two: “If there’s a competitor, it tends to make a bank a bit more eager to work with you.”
GREAT WAYS TO FIND GREAT PEOPLE
Make everyone a headhunter
Many firms reward staff for referrals to people who they wind up hiring. But FXinnovation (No. 80) goes a step further. You don’t even have to work at the Montreal-based IT consultancy to participate in its employee-referral program.
Julie Laplante, director of HR and recruiting, says the firm opened up the program to outsiders in 2007 when referrals from staff began to drop off: “Employees may not be able to refer someone, but may know someone who can, and so on.”
Employees spread the word to friends and contacts at industry events and workshops, advising them that FXinnovation will pay $500 to $1,000 to anyone who provides a referral leading to a hire who is kept on after three months’ probation. “In the first year, we hired 10 people from referrals,” says Laplante. “And in the second year, we doubled that.”
Go where the tech-savvy hang
When George Tsiolis has a job to fill at Toronto-based Agoracom (No. 57), an online community for small-cap companies and investors, he goes straight to Craigslist. Not only does the popular online-classified network attract a larger audience than traditional job boards, it’s free.
What’s more, says Tsiolis, Agoracom’s president, his online company needs staff who are a bit more tech-savvy — precisely the sort who know about Craigslist. “You can’t beat the results,” he says. “Pretty much everyone we’ve required in the 18 months has come via Craigslist.”
Get ’em while they’re young
Many firms balk at the idea of hiring young, inexperienced people. Prollenium Medical Technologies Inc. (No. 118) takes the opposite view. “We want to do on-the-job training, so we hire people who are young and haven’t learned a lot of bad habits,” says Ario Khoshbin, president of the Aurora, Ont.-based manufacturer of specialty medical devices for the dermatology and cosmetics markets.
His best source of raw talent: new grads from local universities and colleges. “We find that they fit our culture,” says Khoshbin, “and we like their energy and enthusiasm.” Prollenium is such a fan of fresh young graduates that it has hired 60% of its workforce right out of school.
Throw some curveballs
Go for a job interview at Search Engine People Inc. (No. 87), and you won’t be asked only straightforward “Tell me about yourself” questions. Jennifer Osbourne, senior vice-president of business development at the Ajax, Ont.-based provider of search-engine marketing and optimization services, says interviewers at the company always toss in a few curveballs, such as “How many golf balls will fit in a bus?” or “Which freezes faster: an ice-cube tray filled with hot or cold water?”
Besides the offbeat questions, candidates are asked to prove their abilities — on the spot. “If we’re looking for a blog writer,” says Osbourne, “we’ll hand them a client profile and ask them to write three blog posts.”
She says these tactics help Search Engine People identify traits it doesn’t want in potential hires, such as needing a lot of hand-holding and being unable to think creatively under pressure: “Candidates who won’t try, or give up too easily, aren’t a good fit with our company.”
HOW TO BUILD A BETTER TEAM
Onboard staff the right way
A quick handshake from their manager and colleagues is about all new hires can expect when they start work at most firms. But newbies at Camilion Solutions Inc. (No. 23) spend their entire first day with senior executives, much of that with Ross Orrett, the company’s president and CEO. Orrett, whose Markham, Ont.-based firm develops product-management software for insurers, spends about one morning a month giving that month’s novices — who all start on the same day — the lowdown on the company, its culture and his performance expectations.
Orrett also treats new staff to lunch during their first month on the job, typically four or five people at a time. “It allows me to get to know them, and them to know me,” says Orrett. “It makes for a lot of lunches, but it’s worth it.”
Pay your team to get active
Rick Skauge is a fitness buff who knows the benefits of healthful living. When he’s not running Oympia Trust Co. (No. 144), you’ll find the president and CEO of the Calgary-based provider of diversified financial services participating in myriad sports, including skiing, scuba diving, golf or boating.
So, it seemed natural to encourage his staff to get active, too. To nudge them along, Oympia provides each employee with an annual $300 wellness account. The only stipulation: “They have to spend it on something that makes their heart work better,” says Skauge. “It could be running shoes, a bike or a dinghy with two paddles. I’m sure we’ve also allowed the occasional Lululemon outfit.” As well, the company buys ski-lift tickets and golf fees in bulk and sells them to staff at a hefty discount.
The wellness accounts cost about 1% of Olympia’s payroll expenses, and are worth it, says Skauge. Although his firm doesn’t track numbers, Skauge believes this program makes employees stronger physically and mentally, reducing absenteeism and boosting productivity.
Spread some points around
Camilion Solutions does much of its corporate purchasing on a credit card, racking up reward points that can be redeemed for travel or merchandise. At the end of each year, the company uses these points to purchase prizes that are given away at its annual holiday party.
“It’s a simple thing, and technically it doesn’t cost us anything because we’re spending that money anyway,” says Orrett. Past giveaways have included trips, big-screen TVs and even a trampoline. The added staff perks make good business sense, says Orrett. They signal that the company recognizes the work of its staff, and it “feeds into one of our values, which is to create a winning team.”
Create a chill-out zone
The pace of work at CoastalContacts.com (No. 152) is often frantic, admits Roger Hardy, the company’s president, chairman and CEO. But when stress levels get too high, staff at the Vancouver-based online seller of contact lenses and eyeglasses can slip away and decompress in the firm’s Zen room.
Hardy got the idea for this room a few years ago after his first spa visit. “It was very relaxing, and I felt recharged afterwards,” he says. “I wanted to recreate that experience for employees.” So, two years ago, the firm spent about $20,000 to build its own retreat, complete with a soothing waterfall, electronic-massage chairs and a lounge area, where staff can unwind, relax and refocus.
While Hardy admits that he doesn’t have any data showing a return on his investment, his instinct tells him the expense was worth it. “I’ve used the Zen room myself,” he says. “Even spending 10 to 15 minutes there can change your attitude, recharge you and make you more productive.”
Reward for kicking a bad habit
“Healthy employees are productive employees” is the mantra at Fusion Learning Inc. (No. 120). That’s why the Toronto-based sales-training firm implemented a unique incentive program to encourage employees to quit smoking.
“Butt Out” started three years ago, when managing partner Kevin Higgins asked the company’s two resident smokers (in a full-time workforce of 12) what it would take for them to quit. “A week’s vacation in the Caribbean might do it,” quipped one. Higgins surprised them by agreeing to the incentive. The two employees accepted the challenge, which included signing monthly declarations that they hadn’t given in to the nicotine monster. “It was really hard for them, but they both succeeded and both got their trip,” says Higgins.
Besides reducing Fusion’s number of employee sick days, Higgins says, this investment also boosted productivity by eliminating smoke breaks. “We’re a small firm,” he says. “When you have two people frequently slipping outside for a cigarette, it impacts us all.”
GET MORE OUT OF EVERY CUSTOMER
Hang out in your clients’ space
Are phone calls and e-mails enough to keep you top of mind with clients? Not according to Peter Day. To stay close to his biggest customer, the president of Endo Networks Inc. (No. 111), a Mississauga-based field and event marketing agency, regularly installs one of his employees in the client’s office. “We were constantly in meetings with them,” says Day, “so it just made sense.”
For half a day per week, Endo’s project manager takes up residence on the client’s premises, where she meets with her client counterpart and others who may be involved in ongoing projects. “The client gets an experienced, accessible manager who they can bounce ideas off, and we don’t charge for her time,” says Day. “And we’re closer to the point of inception of ideas.”
Having the project manager on-site allows both parties not only to work on ongoing projects but to share ideas more freely than is typical in formal meetings. As a result, says Day, “Business has increased, client satisfaction has increased and the quality of the end-project has increased.” Endo is now making similar arrangements with a second client.
Dump the small fry
It may seem counterintuitive — verging on suicidal — to walk away from business during a recession. But doing so hasn’t hurt Calgary-based Rare Method Interactive Corp. (No. 114). Last year, the interactive marketing services agency began divesting itself of smaller accounts in order to focus on large clients that could leverage its full array of services.
“It was scary,” says Tom Short, Rare Method’s president. “We were walking away from a million or so worth of work.” But the smaller accounts had been stretching the agency’s resources for little return. Shedding them freed up resources and gave Rare Method more time to engage its larger core clients. Short says this move has led to more work with these clients, who enjoyed efficiency gains from no longer having to deal with more than one agency. In the past year, says Short, “The revenue from our top 10 accounts has grown by 27%.”
EQUIP YOUR STAFF FOR SUCCESS
Share profits on new accounts
On any given day, MGA Computer Consulting Ltd. (No. 71) has hundreds of professional engineers and IT contractors in the field providing project management, business analysis and technical support for Fortune 500 companies. These workers often hear about upcoming projects and new opportunities for the Toronto-based IT staffing and consulting firm.
Yet, a year ago, they likely would have sat on such information because it didn’t pertain to their job or they didn’t know who at MGA to share it with, says president and CEO Mehrdad Arjomandi. Now, they’re passing along this information.
Why the change? Simple, says Arjomandi: “We’re paying them a bonus for bringing in new business.” To encourage staff to share potential job leads, MGA pays 10% of the profits from the first six months of any new contract.
If a consultant brings in two or three new clients, that could add up to $13,000 to $15,000. “It has opened up a new sales channel,” says Arjomandi, “and already business is up by 30%.”
Yammer till you drop
Steve Byrne, CEO of ThinkWrap Solutions Inc. (No. 16), an Ottawa-based provider of Web content and e-commerce solutions, may be one of the few bosses who actively encourages his staff to spend part of their workday using online social media. But it’s not as if he encourages them to while away the hours on Facebook; instead, he’s a fan of Yammer, a free microblogging service for business that debuted last September.
Similar to Twitter, Yammer (yammer.com) allows users to send messages, documents and photos to a group of virtual followers. But there are two key differences: users are limited to a dedicated e-mail network, and messages can be any length, not just the 140 characters allowed on Twitter.
“There are no hierarchies here, and Yammer is an extension of that,” says Byrne. “It levels the playing field and allows every employee in our company to speak candidly.”
Since ThinkWrap adopted Yammer last fall, it has become “part of the woodwork.” Staff keep it running on their desktops for constant updates about what people are working on. Postings might include information about potential new-business leads or questions about how to handle a negotiation. “We challenge each other, think together and post content that’s insightful and relevant,” says Byrne. “It’s a way to connect people to the business all the time. It’s very effective.”
Build a thank-you culture
Employees at Rare Method don’t have to wonder whether their work is valued by their colleagues. If it is, they’ll receive praise online from a peer-to-peer recognition system called Kudos. The program, which the agency developed in-house, allows employees and managers to send thank-yous to each other for jobs well done. “It’s a way of publicly recognizing employees’ good work,” says Short.
Each month, employees receive an allotment of Kudos to send to deserving colleagues. The receptionist might have 10,000 to allocate per month; an account manager, 50,000. Employees who have been awarded Kudos are notified via a pop-up on their computer, like an instant message. And staff can log in to the system anytime to see a list of current recipients.
The company enters each month’s top 10 point-getters into a draw for gift certificates. Short says that although his staff appreciate the prizes, the real reward is the positive recognition: “It has helped keep the team engaged, and has helped build a culture that says, We care about the work you’re doing.'”
Share financials in real time
For years, Elastic Path Software Inc. (No. 25) has shared management and financial information with employees at the firm’s quarterly meetings. But now, if staff members at the Vancouver-based developer of e-commerce software and services want real-time numbers on how the company is faring, they need only check out the giant whiteboard that occupies an entire wall of Elastic Path’s centrally located lounge area.
Updated every couple of days by the firm’s operations manager, the whiteboard reveals key metrics such as revenue, profits and gross margins to date for both the current quarter and year. But the company goes further. It also reveals strategic information, such as Elastic Path’s top five priorities for the quarter, customer-satisfaction ratings and the number of new-business leads the firm is chasing. “We’ve always operated very transparently,” says CEO Harry Chemko. “It keeps everyone on the same page, and helps employees better understand why we do the things we do.”
Use training to build loyalty
When Gordon Reykdal, chairman and CEO of The Cash Store Financial Services Inc. (No. 72), took his annual tour of the company’s 425 stores last year, the No. 1 request he received from branch managers was “more training, please.” Reykdal, whose Edmonton-based firm provides short-term consumer loans, answered the call by launching a new certification program for staff (known as “associates”) and ramping up in-store training. In an industry known for high turnover and a lack of training, says Reykdal, “We’re providing our associates with better tools to be more successful.”
The online certification program, which is mandatory for all new hires, schools associates on everything from The Cash Store’s code of conduct to specific aspects of their jobs, including customer service. The program would take about three full days to complete all at once, although most employees spread that out over a week to 10 days. They’re then tested on their comprehension of what they’ve learned. The firm enhances its online training with on-site instruction such as role-playing and situational exercises.
Since the program’s launch last year, turnover has plummeted to a third as high as in 2007, says Reykdal. He’s so pleased by this that The Cash Store is spending $2 million this year to roll out a similar program to all 1,500 employees.