Sunday , March 25, 2018

May 2013

Featured In This Issue

May 2013


Charlotte seems like the perfect fit for new city manager Ron Carlee. He spent over three decades in the Washington, D.C., suburb of Arlington, Virginia, but even though he’s been on the job here in Charlotte for just a short time, the Birmingham, Alabama, native already feels right at home.

“I’m definitely a southern boy, there’s no question about that,” he says with a big grin. “The day we were unpacking, Interim City Manager Julie Burch dropped by with a bottle of champagne. That was a sure sign I was back in the South, because nobody in Washington ‘drops by’ to see anybody, anywhere, anytime. That really told me that I was out of Washington.”

Carlee says he stumbled onto the Charlotte opportunity almost by accident. He was working as chief operating officer of the International City/County Management Association (ICMA), but had served as Arlington County manager from 2001 to 2009. In the fall of 2012, he ran into an old friend who happened to work for a search firm that was competing for the contract for the Charlotte city manager search.

“I was very happy at ICMA and wasn’t job hunting, but I did miss city management a little,” Carlee admits. “The Charlotte job profile had my name all over it. If I were writing a profile for myself, I wouldn’t have changed a word. It even said that experience as a chief operating officer in the private sector would be helpful. When I sent it to a couple of my references, they read it and said, ‘This is your job.’”


A Perfect Fit

Carlee, 59, replaces Curt Walton who retired in December 2012 after serving as city manager for five years. The Charlotte City Council and Mayor Anthony Foxx chose Carlee after also considering two internal candidates: Deputy City Manager Ron Kimble and Assistant City Manager Ruffin Hall. Interim City Manager Julie Burch was not a candidate for the job.

Talking to Carlee, you immediately sense the enthusiasm he has for his new city. He liked the fact that Charlotte was large and urban, but had a strong foundation and a focus on the kind of redevelopment initiatives he had spent so much time on while in Arlington. He and his wife, Emily Cross, also visited Charlotte for several days prior to his interview to get a feel for the city, and they were genuinely excited by what they saw and heard.

“Geographically, my wife and I had always limited ourselves to Virginia and North Carolina due to family, friends and culture,” he explains. “She’s from southwest Virginia and I’m from Alabama. I really didn’t want to live any further south than North Carolina, but we also have family and friends within about three hours or less in any direction from Charlotte.”

“Quality of life is important to us,” he continues. “We are at that point in our lives where we’ve worked hard to build great communities, so now we want to live in one. We drove all over the city and talked to as many people as we could in restaurants, shopping and on the street.

“What we heard from every single person was that they loved living here. I’ve been in other communities where people were defensive, depressed, or even had a chip on their shoulder. That’s not the way it is here.”

Carlee was also impressed with the basic foundation that is in place in Charlotte. He asked the city planning director to show him some of Charlotte’s most challenged neighborhoods, but was pleasantly surprised that, unlike many other large cities, those neighborhoods seemed to have strong foundations and social fabric on which to build. He also liked that Charlotte is what he calls an “aspirational” city.

“Everybody here wants to do better and that is really critical,” he says emphatically. “I’ve been in other communities that are good, but they seem happy with where they are. They think they are already there, but they’re not. People here seem to have a strong sense that we’re good, and we’ve done some good stuff, but we’ve got more stuff to do. We can be an even better community than we already are.”

“I also want to emphasize how impressed I’ve been with the quality of the staff here,” Carlee continues. “People ask me how I feel about going into a community where your deputy and one of your assistants were both candidates for the job. But honestly, if this city had no qualified internal candidates, that would have been a red flag for me. So I’m thrilled to have quality staff.”

The couple has no children and they’ve decided to live uptown, renting a center city apartment for a time until they can better understand the uptown real estate market. He says he’s looking forward to living in an urban, walkable environment where he doesn’t need to spend a lot of time in a car commuting to and from work every day. He even says he hopes to try the city’s bike-sharing program when he gets settled in a bit.


Carlee on the Issues

One of the first challenges the new city manager faces is the ongoing battle between the city and the North Carolina Legislature over a proposed bill that would transfer control of Charlotte Douglas International Airport to an independent authority. Carlee has considerable experience working with independent authorities, having worked with both the Metropolitan Washington Airports Authority and the Metropolitan Washington Transit Authority while in Arlington.

While he’s keeping an open mind and waiting on the recommendations from the independent consultant hired to study the issue, Carlee openly expresses his concerns about authority-based management.

“I’m on the record as being suspect of authorities, but that doesn’t mean I’m anti-authority,” explains Carlee. “The reality is that either authorities or city departments can be successful or fail depending on the quality of leadership. But authorities oftentimes operate absent real accountability outside of the authority itself.”

Carlee uses the Metropolitan Washington Transit Authority to illustrate what can happen when authority governance goes badly. He was a member of a special task force that traced many of that transit system’s problems to micromanagement by board members concerned about the specific interests they represented, as opposed to the stewardship of the system itself.

“If the airport remains a department of the city, my intent is to run it like an enterprise,” Carlee says. “The aviation director has been very clear that his main objectives are to have the best customer service at the lowest cost. I think those are exactly the right objectives.”

Carlee is also a passionate advocate for public transit, including streetcars, but he sees transit as a part of a comprehensive economic development strategy rather than just a standalone transportation strategy. He uses his former city of Arlington as a prime example of how unified transportation and land use planning can work.

In the 1960s and 1970s, Arlington was a dying inner suburb as department stores moved out, buildings sat empty, and schools closed. But instead of building the Metro as a commuter train down Interstate 66 as originally planned, visionary leaders back then decided to put the subway right down the center of Arlington, while simultaneously updating the land use plan to allow higher density development.

“That land use transportation initiative is what turned Arlington around,” Carlee says enthusiastically. “I think the visionaries in Charlotte with the Blue Line, the Red Line, and the streetcar are trying to look forward in this same way. Charlotte has a great uptown, but as you go out into some of the neighborhood commercial areas, you see abandoned stores and empty parking lots. But these are good assets in great, accessible locations, and the neighborhoods adjacent to them are solid. We need to get the private sector in this city focused on redevelopment as opposed to green field development. By doing land use and transit together, the opportunities in this city are phenomenal.”

While he also sees the potential of the proposed Charlotte streetcar, he is quick to add that he will wait for the completion of the economic impact and funding study before drawing his final conclusions on that controversial project.

“If the streetcar can really stimulate significant private investment, redevelopment, and growth in areas where we want it to occur, why would we not want to do that?” asks Carlee. “But if it can’t do that, why would we want to do it? So I see streetcar not just as a streetcar; I see it as part of an integrated redevelopment and transportation strategy.”

Carlee also has a strategic view on using public money to help the Carolina Panthers improve Bank of America Stadium. He says that cities that want to play on the world stage need to have professional sports as one of the many institutional anchors in a community. So when the City and the Carolina Panthers reached agreement on a public/private partnership and voted to support an $87.5 million package late April, Carlee agrees it was a good investment for the local community as well as the NFL in Charlotte.

“I wouldn’t want to have sports and not have the arts; but I also wouldn’t want to have the arts and not have professional sports,” he explains. “In today’s world, you are not going to keep a professional football team unless you are willing to bring public resources to the table. There are a bunch of aspirational cities that will be eager to put up a lot of money so they can make a bigger mark themselves.

Finally, while the council has not yet agreed on an updated Capital Improvement Plan (CIP) for 2013, Carlee is optimistic the plan can be updated in the months ahead, and he says the characterization that the city is operating without a current CIP just is not accurate. He makes the point that the CIP is actually a five-year plan, so a plan is in place, it’s just the plan approved in 2012.

“While it was disappointing to the council it did not get one passed last year, it did not mean that capital programs stopped,” he explains. “In fact, a lot of capital development has been going on very aggressively for the past year. What the city did not do last year was adopt an updated capital plan. If you just skip a year revising it, it doesn’t mean you’ve stopped your capital program. In Arlington, we updated the CIP every other year.”


A Changing Landscape

Over the years, Charlotte has benefitted from a core of strong homegrown business leaders who have been highly effective in influencing the growth and development of Charlotte in positive ways. But in recent years, the business landscape and the key players have changed, so the challenge for Charlotte is to adjust to those changes. Mayor Foxx and the council have specifically asked Carlee to reach out to build new relationships with the business community and he says he also intends to reach out to our institutions and neighborhood organizations as well.

“The best cities are going to be those that can do cross-sector planning and collaboration together,” offers Carlee. “We don’t want factions competing with each other, but collaborating and trying to build win-win situations that advantage everyone in the community. We are inextricably interrelated with one another, so if we have weaker parts of this community, it’s going to work to the disadvantage of the entire community.”

“I think we need to develop distinctive redevelopments so people have lots of different choices,” Carlee concludes. “We don’t need high-density everywhere. We will still have Ballantyne and other more traditional suburban developments as well as our solid working class inner neighborhoods. We need to offer a range of lifestyles that will suit just about anyone who wants to come and live in a place like this where we have a good climate and warm, friendly people.”

Infinisource is a leading provider of fully-integrated, SaaS-based, cloud-resident Human Capital Management (HCM) solutions for small to medium-sized employers that are looking for a better way to manage and optimize a workforce. Their offerings include everything an employer needs—including payroll, human resources, benefits administration, time management, talent management and compliance—accessible from one login, anywhere and anytime.

Sound like an employer’s dream? Well, it is for many.

Infinisource was initially formed as COBRA Compliance Systems, Inc. in Coldwater, Mich., to handle health insurance COBRA benefits under the newly passed COBRA legislation in 1986.

Throughout the years, it has grown steadily, enhanced by several strategic acquisitions to supplement and enhance its offerings—COBRA Compliance of Indianapolis, Ind.; Aurora Administrative Solutions of Dayton, Ohio; Priority Pay of Laguna Hills, Calif.; Full Circle Payroll of Palmetto, Fla.; ABCO Payroll Services of Bradenton, Fla.—and acquired the new name in the process.

Headquartered in Ballantyne, Infinisource has been in business for over 27 years now with operations all over the country, serving over 63,000 small and midsize customers worldwide including some high-profile clients such as the San Francisco Giants, Washington Redskins and several of the Inc. 500 fastest growing companies in the country.

Its powerful presence in Charlotte is due to the amazing vision of inspired entrepreneur and investor Gary Trainor, its CEO. He is on a mission to create the most trusted provider of human capital management solutions by supplying industry-leading technology and expertise that empowers people and companies to do their best work.


The Mission

The American dream of business ownership is oftentimes for people just that—a dream. But for Trainor, it’s the culmination of a lifelong pursuit with corporate America his training ground.

Trainor was born in Belleville, New Jersey. After graduating with honors with a B.A. in business administration from Rutgers and obtaining an M.B.A. in business from Fairleigh Dickinson University, he began what would be a 17-year stint with automatic data processing firm ADP in Roseland, N.J.

At ADP, Trainor served on the executive committee and was division president for two of the company’s largest business units. However he’s most renowned for launching the EasyPay system, a widely distributed payroll product.

Following ADP, from 1992 through 2005, he served as president of business management services firm CMS, Inc. in Winston-Salem, and then as division president at electronic commerce and payment services giant First Data.

But Trainor had a vision of his own. He has an entrepreneurial drive he attributes to his father, who started as a sweeper in a leather finishing factory and ended his career as president and general manager of the same company. He wanted to create an entity that would combine the best of the best into a full-service solution to serve the human capital management needs of small and medium-sized businesses.

In 2008, he joined leading private equity firm Accel-KKR as an operational advisor. Accel-KKR, a partnership between venture capital firm Accel Partners and leveraged buyout firm Kohlberg Kravis Roberts, is a firm focused on control investments in software and technology-enabled services companies.

Having had over three decades of experience at both ends of the human capital management equation, Trainor was ready to head up his own growth venture.


The Assembly

“I wanted to build a company that cuts out the cost and complexity of being an employer,” says Trainor. “I wanted to change how small to medium size companies, those with 20 to 2,500 employees, manage their workforce by providing a total workforce management solution.”

He felt his years of experience gave him great insight into the strengths and weaknesses of the market and that, by focusing on the human resource needs of organizations, he could build a company that targets all the ‘must haves’ in HR—payroll processing, tax and regulatory compliance, benefits administration, scheduling, human resources management and time and attendance systems.

Trainor’s search for the best workforce management software to offer this underserved market led to Infinisource, a leading provider of integrated benefits and compliance solutions for small and mid-size companies, known for great service and expertise in compliance law. At the time, Infinisource had over 4,000 broker relationships, 17,000 employer clients and 1.3 million “lives” on its system.

Fortunately, Trainor had a partner with capital who believed in his vision, and so in September 2011 Accel-KKR acquired a majority equity interest in Infinisource. Trainor was appointed CEO and the former head Gary Hart was retained as president of benefits administration. The investment proceeds would fund the company’s continued growth, broaden its suite of offerings, and deliver SaaS technology for employers and business partners.

Trainor had no sooner identified Infinisource as a necessary part of his vision, than he set to work surveying the workforce management landscape for the best technology available in the industry. That had drawn his eye to America OnShore, Inc.

Trainor had determined that America OnShore, a leading provider of human capital management technology for small and mid-size companies, would provide Infinisource the most leading-edge, cloud-based technology on a single platform to manage the information lifecycle of an employee.

“Not only did we have tremendous knowledge and experience around compliance issues with regard to tax filings, benefit offerings and other sensitive workforce management that must meet established regulations,” says Trainor, “but we now had the best technology in the industry with America OnShore.”

Simultaneous with the acquisition of Infinisource, Trainor, along with his equity partners, purchased America OnShore, launching the combined entity as Infinisource with Trainor at the helm and retaining the former head Todd LaFever as president of employer services and technology.

For Trainor, it was the trifecta of technology, marketplace and investment dollars to launch his vision.


The Proving Ground

In early 2012, Trainor moved Infinisource headquarters to the growing Ballantyne Corporate Park in Charlotte, announcing plans to hire more than 160 employees.

Trainor had purposefully chosen Charlotte as headquarters for the combined entity that met both personal and business needs. His two adult children reside in Charlotte, and he wanted his new company to be located in a high growth city.

“Charlotte is such a pro-business town,” says Trainor. “We knew we could grow the company with the talent pool available here, both on the technical and managerial side of the business.”

Hart and the team at Infinisource were excited to begin their partnership with Accel-KKR, who they knew to be a firm with a long track record of helping to grow great businesses.

“I knew the partnership would solidify our foundation and enable us to capitalize on the tremendous market potential while increasing our relationships with customers and partners,” comments Hart.

“I believed in their vision,” recounts LaFever. “Between the natural synergy, Gary’s vision and the technology platform, I knew that we could outsell and outperform our competition.”

Soon after the formation of the combined Infinisource, Trainor’s son Chris joined as the company’s chief marketing officer. Prior to joining Infinisource, Chris was a senior vice president and strategy executive at Bank of America.

“I was excited from the beginning, because these acquisitions would allow us to cross-sell a best-in-class product to a very satisfied customer base,” comments Chris. “And statistics show that when customers have a high level of satisfaction with one product, they have a greater propensity to purchase additional products.”

The new reformulated Infinisource hit the ground running with several strategic initiatives. In early 2012, the company introduced the new Infinisolved HCM technology, a cloud-based SaaS technology enabling human capital management tools accessible on a unified platform.

Chris likens the single interface to that of the iPhone: “It’s so intuitive, that on one single platform, HR managers have access to their employee database of information at so many levels.”

In December 2012, Infinisource acquired Qqest, adding a time and attendance software to its arsenal of human capital management services. This strategic move not only added more service offerings, but doubled its client base, making Infinisource the largest single-source provider of workforce tools for small and medium size employers.

With these acquisitions and strategic initiatives, Infinisource has bundled these services into its marketplace offering called iSolved, a payroll and employee management system with a complete solution for managing a workforce including payroll processing, benefits administration, talent management, and time and attendance. iSolved gives companies an unprecedented view of employee data with a single login onto a single database.

New client Angie Johnson of the Charlotte Athletic Club says, “In a small business where you wear lots of hats, I didn’t have time to waste creating spreadsheets and keying data just to get the payroll out. So we chose Infinisource, a company that does everything for you. The key benefits are the ease of using their system and their involvement in keeping us moving.”


It All Comes Together

Over 40 states in the country have laws that mandate the continuation of health benefits when employee-sponsored coverage is terminated. Infinisource helps employers comply with laws at the state level and the federal level (COBRA) that can be challenging and confusing to implement. These laws are complicated and driven by ever-changing regulation and business conditions.

With over 25 years of experience, Infinisource Compliance services prevent employers from exposing themselves unknowingly to tax issues and litigation. For example, the average cost of a COBRA lawsuit is $40,000 to a company and, according to the IRS, 90 percent of employers are noncompliant with COBRA regulations.

And, adding to their compliance expertise, Infinisource has recently announced new technology enhancements that enable employers to meet requirements and deadlines associated with the Affordable Care Act (ACA) or commonly referred to as Obamacare.

Another key market Infinisource targets is insurance brokers who work with companies selling benefit plans for their workforce. They offer exclusive programs for select brokers who want to partner with Infinisource and represent the Infinisource brand of services to their customer base.

These programs include co-branded marketing materials, dedicated account managers and access to a library of industry-related information. A Preferred Broker Program gives Infinisource the ability to share revenues with the very best of partners.

Infinisource has conducted seminars and webinars for over 25 years now, educating more than 275,000 human resource managers, benefits professionals and brokers with topics on critical issues that keep companies compliant with tax laws, benefit offerings and up-to-date on new approaches to workforce management solutions. Their website is replete with infographics, checklists and guidelines helpful in the human resources arena.

Infinisource’s solutions and services have proven successful in many industries, including manufacturing, construction, agriculture, health care, banking, hospitality, education and government, retail, service and others.

With Trainor’s substantial expertise and entrepreneurial vision, Infinisource has been nationally recognized as a leader of workforce management technology solutions and named to the 2012 Inc. 5000list of fastest-growing companies. Trainor attributes this success to his management team being the best in the industry—seasoned payroll industry executives from hand-picked companies.

Infinisource currently has over 400 employees on the payroll. They also maintain division offices in Coldwater, Mich., and Sandy, Utah, and satellite offices in Colorado, Idaho, Washington, California, New Jersey, Florida and Texas.

Trainor’s number one goal at Infinisource is growth. He believes that by focusing on growth they will continue to enhance the value of their products and services, expand their competitive advantage, and create career opportunities in the local communities where they are based.

“Growth should be our obsession,” Trainor communicates to his employees. “Not growth for growth’s sake, but rather for the discipline it demands to build great technology and deliver great service.”

When asked what his vision is for Infinisource five years from now, Trainor says, “I’d like Infinisource to be the most admired technology provider in the human resources industry, reach the $200 million mark in annual revenue, and make a significant contribution to the local Charlotte community.

In 1976, at the age of 22, Mike Thompson started in the insurance business. As a suggestion for success, more seasoned colleagues advised him to get involved in civic activities, so Thompson chose to attend a civic club meeting in East Charlotte.

Charlotte’s mayor was the club’s guest speaker and Thompson recalls the mayor’s first remarks as especially meaningful.

“When he got up and said, ‘My name is Ken Harris and I’m with New England Mutual Life Insurance Company,’ I immediately felt like my career choice had been validated. The mayor of Charlotte was an insurance agent and proud to be one,” Thompson recounts.

Today, Thompson himself is the managing partner of the former mayor’s agency, which was known as Harris Murphy and Associates before 1994.

It’s been Thompson Financial Group, Inc. (TFG) since then, but the roots of the company date back to 1905. “There have only been six others in my position, so it has been a privilege and an honor to have this firm,” says Thompson.

TFG is the North Carolina agency for New England Financial, a MetLife company. New England Financial formed when MetLife merged with the oldest mutual company in the U.S., New England Mutual Life Insurance Company, in 1998.

With close to $600 million in assets under management and over 50,000 policy holders, TFG offers a wide range of financial services from estate planning, investments, insurance and total wealth management to corporate solutions such as risk management and employee benefits.

“My predecessor handled the pension plan for the North Carolina Bar Association, so many of our clients in the 1940s and ’50s were attorneys,” explains Thompson. “We still provide financial services to many attorneys.

“We’ve also had a very large business in the construction industry. We started the Carolina Construction Alliance as a service to our customers in the construction industry. At one point, we handled the insurance and investments and were the primary financial advisor for 300 to 500 construction firms.

“More recently, we’ve been working with independent pharmacies across North Carolina and Virginia.”


Regional Coverage

TFG started out based in North Carolina with principal offices in Charlotte, Raleigh and Greensboro. In 2007, TFG merged with the Virginia agency for New England Financial, Financial Services of Virginia, and gained offices in Richmond and Charlottesville.

Last year TFG merged with the South Carolina agency known as Carolina Capital Management, whose main offices are in Charleston and Greenville.

“So now we encompass three states and we’re more of a regional firm,” Thompson comments. “We also have international clients and are licensed in 42 states.”

All of the agencies have kept their original names to retain local market recognition and, along with TFG, are covered under the corporate entity name NEF of the Carolinas, LLC.

TFG currently has about 55 career advisors and several hundred associated brokers. TFG career advisors start as employees, but as they grow they become independent contractors, eventually owning their own businesses. As the firm’s managing partner, Thompson’s goal is to assist each advisor toward that opportunity.

“Each of the 55 advisors runs their business according to their own business plan and their target clients vary according to how they wish to specialize themselves in the marketplace,” Thompson explains. “Some advisors specialize in working with individuals, some only with corporations. But whatever client market they choose, our products and services can support their clients’ needs.”

MetLife is TFG’s primary carrier but Thompson notes, “Our career advisors have access to many carriers, and choose where to place a client’s business based on what is best for each client.”

“The days of the product sales people have pretty much gone away. Agents are called advisors because they act in that capacity. Somewhere around 50 percent of our business today is in wealth management, with the remaining portion in risk management or insurance. When I started, only five percent of the business was wealth management. Today’s industry professionals need to be well-versed in the entire arena of financial services.”


Expertise, Products and Tools

Each advisor has specialized tools to best assist their clients. TFG uses a holistic approach to financial planning called “consultative selling.” The seven-step program begins with an assessment of a client’s current position and of their goals and objectives, identifying gaps and creating a vision, and then moves to development and implementation of a customized plan to achieve those goals. Periodic status meetings monitor and refine the plan.

Many advisors also take advantage of the firm’s specialized technology tool called Personal Financial View (PFV). According to Thompson, “PFV is a web-based program that aggregates all of a client’s critical documents and key information in one location. A client can easily access and view their financial picture and collaborate with us in real time. The PFV tool separates us from our competition.”

TFG identifies several common stages with specific financial planning needs: early stages include a new couple or a startup business, both needing to establish a relationship with a financial services person; intermediate stages may involve a couple buying a home or starting a family or a growing business needing advice on liability insurance, adding employee benefits or group health insurance; later stages could involve establishing kids’ college education funds or estate planning for the individual and additions of a 401(k) plan or programs for key employee retention or a business succession plan for a mature business.

Through their in-house specialists or affiliated companies, TFG has the personal solutions for all the stages of the financial life cycle. But Thompson notes that TFG also stands out for its expertise in an emerging market.

“Many companies can help you make money, but what happens when you want to start taking the money out?” asks Thompson. “Who will help you integrate your 401(k) with your pension? When is the best time to start receiving social security? As a business owner, how will I be able to retire? What are the tax implications when you withdraw or move money from an account?

“Baby Boomers are running into these questions now. They’re afraid they might outlive their money. Our expertise really works well with distribution planning. My goal, and our goal as a firm, is to make sure clients have a comfortable retirement. This kind of planning is a specialty for our firm. There’s no substitute for planning.


Lifetime Relationships

Thompson has been assisting some of his clients for over 30 years. Dr. Jerry Punch became a client 36 years ago when he was just a second-year medical student at Wake Forest’s Bowman Gray School of Medicine.

“The first time I met Mike Thompson, my wife and I were living in a three-room apartment that had no heat. Mike came over to speak to us about planning for our future,” recalls Punch. “When you’re a medical student a lot of insurance and investment people reach out to you because of your potential for a significant income in the future. I had turned down numerous other people, but Mike was different. After speaking with him, I realized this was an individual who really cared and would look after my family long-term.”

Punch, who in addition to having been CEO of his own emergency medicine company and a hospital chief of staff, is also well known for his work as a commentator for NASCAR and college football and basketball games on ESPN and ABC and as a motivational speaker and a consultant in sports medicine.

“I travel a lot in my career and I’m constantly bombarded with people who say they’re an expert in estate planning or that they have this high profile athlete or NASCAR driver as a client,” Punch says. “But in my opinion, none of them have anything more to offer or are anymore knowledgeable than Mike Thompson.

“I use almost every service TFG offers and I’ve never had a single regret. I trust him with my future and with my finances. I have a tremendous comfort level knowing that Mike is taking care of me and my family as if he were a part of my family.”

Thompson acknowledges that the most satisfying part of his work is seeing the tangible effects of what he does in his clients’ lives:

“It’s always rewarding when my work helps a client achieve a goal.” He recalls one instance when he met with partners in a lumber company in theNorth Carolina mountains to discuss a buy-sell agreement so that in the event of a partner’s death the remaining partner could buy the deceased partner’s share of the business. It would protect the business but one partner was very resistant.

“It took a lot of planning, explaining and working with the partners to finally get the agreement in place, but it was important that we did it because within two years of the policies going into effect, one of the partners passed away. Because of the policies though, the remaining partner was able to retain the business, and the deceased partner’s wife and family received a fair market price for their share of the business.. They were so thankful that we had worked to get that protection into place. That had a huge effect on me.”

Thompson’s concern for his clients is one of the reasons he’s initiated a succession plan for his own firm. “My plan is to retire from management of the company in the next few years, but I want to ensure my clients are still receiving the service they deserve. So I’ve entered into a succession plan with my partner Ed Cook, who will be the management successor. But I’m not getting out of the business; I’m just changing roles.”

Last year MetLife initiated a “team selling” system where experienced advisors pair up with individuals new to the business. The new people assist the advisors, freeing them up to focus on clientacquisition and sales. There are dedicated roles within the team for the advisors who focus on sales and the practice managers who manage service to clients.

“I’m forming a team myself so I can lead by example,” says Thompson.

Thompson’s team practice manager is April Lee. Lee, who has worked as Thompson’s right-hand person since 2007, finds many advantages in the team selling approach. “This service model enhances the client experience,” she says. “Clients like having one point of contact and the responsiveness that brings. They also like that the advisors have more time for interaction with them.”

Thompson predicts that service enhancements will also result from MetLife’s choice of Charlotte as the hub for their U.S. retail business. The move will consolidate MetLife’s product management, marketing, sales and customer support people in the city by the end of 2015.

“I am very proud that MetLife chose to relocate to my hometown,” says Thompson. “This is a good thing for the city of Charlotte, for our firm and for our clients.

“And that’s the most important thing—that we can continue to provide a great client experience. We want to ensure that our clients’ financial needs and concerns are addressed with the highest level of attention, insight and capability.”

Each time Mel Graham passes through the gates at The Club at Longview, he is struck by the natural beauty of the land—the rolling topography of old trees, natural streams and Six-Mile Creek, along with natural land preserves.

“God gave us a wonderful canvas to work with,” says Graham, the founding partner and visionary of The Club at Longview. And what a masterpiece he and his partners have created.

The Club at Longview is situated in a 500-acre private gated residential community south of Charlotte with the region’s only Jack Nicklaus Signature Golf Course. The Club is consistently ranked one of the top 20 private clubs in North Carolina by Golf Digest ‘Best in State.’

Graham began design and construction of the Club in 2000 and completed it in 2003. He owns it in partnership with James Little, formerly an investment banker, and Bruce Anderson and Pat Welsh of Welsh, Carson, Anderson & Stowe.

Together, the partners have built a community that promotes an atmosphere of relaxation and exclusivity with uncompromised conveniences and amenities for members to enjoy, with respect for the highest quality design concepts and land preservation.

There are 310 manor-style luxury estates. Approximately half of the home sites are built out with homes valued from $1 to over $10 million. There are 40 home sites remaining for sale. The integrity and high standards of the community are maintained by the Club’s Architectural Review Committee.


A Signature Imprint

The “signature” attraction to The Club at Longview is its 220-acre, 18-hole Jack Nicklaus Signature Golf Course.

“As Jack Nicklaus stood on this property, and looked at the gently rolling hills with its pines and hardwoods, its creeks, ponds and nature preserves, he said, ‘It’s as if it was always meant to be the home of a great golf course,’” Graham remembers. “Jack shared and appreciated the inherent beauty of the land, and had a plan to maximize and preserve it.

“I told him we wanted the architecture and old-world themed amenities emulating traditional English and Scottish manors—something that looked like it had been here forever,” continues Graham.

It was a natural for Nicklaus, who said it reminded him of Muirfield, which he had designed in his hometown of Dublin, Ohio, the site of the famous PGA Memorial Tournament, echoings old stone walls and Irish-themed landscaping.

Graham worked closely with Nicklaus as he personally designed the course, and supervised the building of it every step of the way. “The process is incredibly involved; everyone sees the surface result, but what is necessary to make a golf course functional is literally buried,” explains Graham.

“There are hundreds of thousands of tons of dirt that must be moved to grade and balance the site, plus there are over 30 miles of irrigation lines, 280-plus miles of wiring and over 15 miles of drainage lines that must be laid at the site. Add to that an average of 100 million gallons of irrigation water annually, and there is a lot going on beneath your feet.

“Each green also has its own separate remote-controlled mister system to cool it during hot weather conditions. There are over 1,500 sprinkler heads that are individually controlled and a sub-air system that functions as a giant shop-vac, to pull moisture out of the green.

“Jack is very specific about what it takes for proper play conditions and proper course health, and what goes on beneath the surface is a huge component of that,” Graham comments, appreciative of Nicklaus’ strict course specifications.

“Working with the natural topography of a great piece of land, he designed a world-class golf course,” Graham says, nodding. “Jack Nicklaus is a great in the golf world and a great friend. We could not have worked with anyone better.”

Graham credits director of golf course operations and longtime friend, Ray Avery, for overseeing the details of construction and the ultimate quality of the course today. “The golf course would not be what it is today without Ray and his great team of maintenance professionals,” says Graham.


Idyllic Surrounds

The charming gatehouse and the magnificent clubhouse of The Club at Longview have an air of distinction, and along with the manor-style homes on the grounds look native to England or Scotland, favorite travel spots for Graham and his wife Terri.

“This is the common theme and goal for the entire project—the golf course, clubhouse, streets and homes. We want it to have an old-world look and a feel of home and permanency,” says Graham. “It’s unique architecture that you won’t find anywhere else in the Carolinas.”

While the architecture may be purposefully dated, the amenities are anything but. The clubhouse facilities, totaling 38,000 square feet and open 24/7, include a 10,000-square-foot activity center housing a full-service fitness center, adult and family pools, aerobic studio, spa and steam room, and an expansive youth lodge. Buildings also include a gate house and carriage house.

There are multiple dining facilities on the property to accommodate both casual and formal dining, as well as banquets and meetings. Four hydro-clay tennis courts await the inclination of members. There is a tennis pro and a golf pro on staff to provide instruction. Personal concierge services are available.

“When you first drive through the gates, you don’t realize the complexity of the operation. It takes a small army to manage this property and all the amenities,” says Graham, adding “We have a great staff that is second to none. We train our people to treat members and guests with down home southern hospitality.”

Waxhaw resident Rick Poling is the Club’s general manager; he most recently hails from the Miramont in Bryan, Texas. Chip Swanson is the director of golf, a PGA member since 1993 most recently hailing from The Club at Spanish Peaks in Big Sky, Montana, although he has over 20 years’ experience at several high end clubs throughout the country.

The tennis pro is world-renowned ATP tennis tour coach Louis Vosloo from South Africa. Vosloo has played with the likes of Pete Sampras, James Blake, Robin Soderling, the Bryan Brothers and Andy Roddick. As a tennis pro and coach, he has worked with the Brickell Tennis Club in Miami as well as The Dunes Golf and Tennis Club and The Sundial Beach and Golf Resort on Sanibel Island.

Both Avery and Golf Course Superintendant Barry Rewis maintain and manicure the course to provide one of the best conditioned courses in theCarolinas.


The Longview Tradition

The history of Longview dates back to the 1800s when it was first known as The Longview Black Jack Farm. In the early 1950s, a portion of the grounds were purchased by Graham’s father, owner of Graham Brothers’ Dairy Farm and brother of Reverend Billy Graham, to put his dry cattle out to pasture.

“As a kid, I walked the property all the time, appreciating this God-given, beautiful landscape,” says Graham. “I always knew we could make Longview something very special.”

Graham alongside his father farmed the land into his twenties at which time he embarked on what became a successful career in the construction and real estate business.

“As I started making money, I began to purchase adjoining parcels to the farm,” recounts Graham, “and, over the next 20 years, was able to accumulate over a thousand acres. In the late 1990s, Charlotte was exploding to the south. So when the Rea Road extension and Highway 485 were announced, I decided to develop what is now Longview,” recalls Graham.

At the highest points of the property, the Charlotte skyline is visible. “This property was perfect due to its proximity to the rapidly growing south side of Charlotte. It’s 30 minutes from uptown Charlotte, a reasonable commute, plus, its location in Union County means lower taxes and great schools,” he points out.

Graham’s vision came about after extensive travels through England and Scotland. “I fell in love with old world architecture and wanted to create one of the finest residential communities anywhere in the Carolinas. I wanted classic architecture that would withstand the test of time.”

He was also influenced by the longevity and stability of Charlotte’s Eastover and Myers Park neighborhoods. The streets of Longview are lined with plantings of majestic oak trees now 10 years old. “They will only improve with age,” observes Graham.

“I enjoy golf. I’m not a pro but enjoy playing on a challenging, fair and physically attractive golf course,” says Little, who adds that he’s always wanted to own a golf course. “The opportunity to become a partner came at just the right time.”

“There is a tendency for people to assume that anyone who invests in this [Longview] is in it for the money, but it’s a long term prospect,” says Little. “It’s really about seeking a high quality of lifestyle.”

“It’s a close-knit community and a great place for families. The schools are ranked very highly. When it was conceived, everybody thought that only older people would live here, but that’s not the case now,” Little says.


Life at Its Best

Although The Club at Longview has certainly felt the slowing effects of the recent economic downturn, Graham says they have continued to grow at a rate of about 12 new members per year. Currently, there are 22 homes—all sold—under construction.

Graham attributes Longview’s success to the business knowledge and economic strength of the ownership partners. “We had the pockets to support it,” says Graham. “Not only did we weather the storm, but we paid off all the debt.”

The partners also recently invested an additional one million dollars to complete and repair infrastructure across the property. “We put our money where our mouths are and stuck with our original convictions,” says Graham. “I have three great partners and I am thankful for them.”

Graham describes the membership as “a broad mix, bringing together older families from Charlotte and Union County and newcomers from across the country. We have self-made entrepreneurs all the way to executives and CEOs. It’s a wide demographic and racially diverse.”

“Most residents within the community tell me they feel very fortunate and blessed to live in such a pristine, serene neighborhood,” says Graham, “ and we are very appreciative of the support we have from them.”

Membership to The Club at Longview is contingent upon application approval by the membership committee. “We’re looking for like-minded individuals and professionals that can contribute to the social community that we’re building here. That will require the financial wherewithal to be a member of the club,” explains Little.

“People come for different reasons,” says Graham. “Some are here because it’s a great place to raise a family; for others it provides a second or third retirement home. Still, others are attracted to all the activities, and, of course, excellent golf with no tee times.”

The Club at Longview has four types of memberships: golf memberships, social memberships, corporate memberships and national memberships. Golf memberships are capped at 395, but are still available. Social memberships have no cap; management expects to add 30 new members this year.

The Club at Longview also contributes to the greater region. “We want to be good corporate citizens and an asset to the surrounding area,” says Graham. “Personally, I believe that God has blessed me and I want to reach out to the community and give back.”

The Club sponsors multiple fundraisers each year to benefit a wide variety of charities. Last year, it hosted the Chiquita Golf Tournament. Approximately $1 million in proceeds went to benefit local charities.

Mel Graham currently has a home in Blowing Rock and also lives in the old governor’s mansion in Charlotte, known as Morrocroft.

“I kept about 50 acres in the heart of Longview which was the small farm that my daddy first bought,” confided Graham. “I intend to build out there. I can have all the stress the world has to offer, but when I pull through the gates of Longview, it all disappears leaving peace and serenity.

“For me, Longview is far more than another real estate venture—it is home.”

For over 30 years the National Science Foundation (NSF) has played matchmaker with the nation’s businesses and universities. These clever scientists have taken a dollop of federal dollars, added a few rules and regulations, and created dozens of abiding relationships. The courtships are all centered on common research interests and many have lasted for years.

Passions are kept alive because each has something the other needs. For the university, it is the money and sense of urgency that businesses bring. Companies pay a membership fee for entrée to the universities laboratories. Businesses also link important social and economic value to what might otherwise be isolated academic work. For business, it is the university’s expertise, students, equipment and ideas and the commercial possibilities of that intriguing mix.

Each NSF pairing is not restricted to one university and one business, but many, with multiple universities and multiple businesses all working together. NSF’s Industry/University Cooperative Research Centers (IUCRCs) have a significant track record of contributing to the commercialization of valuable research and, in fact, have served as a premier example of “leveraged” funding—a model for other government programs in how to develop cost-effective synergy with the nation’s research and development process.

The Charlotte region can be particularly proud of UNC Charlotte’s participation in the IUCRC program, which has brought together significant industry-university partnerships helping to nurture the seeds of innovation targeting areas for future growth.


Planting a Seed

An IUCRC typically begins with a small collaborative one-year planning grant to a group of university faculty members able to demonstrate the scientific, organizational and entrepreneurial skills necessary to form a team and run a successful Center. From there, it is up to the Center to obtain commitments for funding from the affiliated universities and industry partners.

If successful on a merit review, NSF may make an initial five-year award; NSF funding may be extended for two subsequent five-year periods. After that, a center “graduates” and must reinvent itself and reapply for a final five years.

Currently there are approximately 61 IUCRCs at 178 university sites across the nation. Corporate members now number over 500 with many holding memberships in two or more IUCRCs. Counting duplications, there are over 1,000 corporate memberships in FY 2012.

Of UNC Charlotte’s six IUCRCs, two are in the planning stages, three are active and one has graduated and reapplied for a longer and revamped life span.

Vice Chancellor for Research and Economic Development Dr. Robert Wilhelm, also executive director of the Charlotte Research Institute, oversees the six IUCRCs at UNC Charlotte established in the following areas: Freeform Optics; Safety, Security, and Rescue; Metamaterials; Sustainably Integrated Buildings and Sites; Configuration Analytics and Automation; and Precision Metrology.

“Some IUCRCs have as many as 50 corporate affiliates,” asserts Wilhelm. “We don’t have one that big yet, but it is our hope. Centers will not get support from NSF unless they have at least six member companies with each contributing $30,000 to $50,000 a year. For that investment, a corporation plays an active role in defining the Center’s research agenda. It also has access to research results and the university’s vast wealth of human capital.”

Member companies regard the IUCRCs research agenda as “pre-competitive,” says Wilhelm. “It is early R&D.” Discoveries typically apply to a broad range of potential products rather than to one in particular. Nevertheless, IUCRCs consistently produce research that results in the creation of intellectual property. In one recent year, there were 29 invention disclosures, 30 patent applications, 12 patents, six license agreements and one copyright.


Six Seeds: Freeform Optics

UNC Charlotte, the University of Rochester and Penn State University have teamed up to propose a Center for Freeform Optics for NSF support. Dr. Angela Davies, an assistant professor in optical metrology, would co-lead the IUCRC at UNC Charlotte.

They cannot release the names of companies committed to joining it, as they won’t find out the NSF decision until July.

“Freeform optics is the ability to manufacture optical surfaces in arbitrary shapes,” explains Davies. Arbitrary usually means shapes other than spherical. Google Glass, a wearable-computer with head-mounted display is a recent and highly publicized example.

Collaboration with the University of Rochester and Dr. Jannick Rolland would bring “strong expertise” to the new center, says Davies. That’s because Rolland has perfected a head-worn display for augmented reality that looks like something out of the sci-fi thriller Minority Report.

She takes information from the environment and integrates it with data from the Internet, GPS, an infrared camera, light-emitting diodes (LED) and mobile phone applications. It is then selectively displayed on lenses in a set of goggles. This is reality augmented by modern technology.

Head-worn displays would revolutionize our driving experience. Highway travelers would see the next turn overlaid on their goggles, eyeglasses or windshield. Ratings for restaurants would pop up as you approach. In a blinding snowstorm or dense fog, images of vehicles ahead would be seen clearly in enough time to avoid an accident.

Business tried to commercialize augmented reality glasses in the late 1990s and failed. Recent developments in miniaturization, illumination and freeform optics have brought ultra-cool augmented reality glasses closer to reality. But the microdisplay industry lags behind the technology, a problem the new Center intends to remedy.


Six Seeds: Safety, Security and Rescue

Another of UNC Charlotte’s new partnerships is the Safety, Security and Rescue Research Center. Dr. Jing Xiao is its director. Although it may sound like a burglar alarm laboratory, Xiao’s research combines two modern technologies—robotics and sensing.

“The two are inseparable,” says Xiao. With colleagues from the Universities of Minnesota and Denver, Xiao studies how these two technologies can enhance the safety and security of human workers. Her University of Pennsylvania colleagues have adopted the rescue emphasis. They are experts in developing small, agile flying robots that swarm, sense each other’s presence, survey disasters and coordinate rescue operations.

Xiao champions the use of robotics and sensing in healthcare. Doctors already use robotics for minimally invasive surgery, a branch of medicine more precise than cutting with a hand-held scalpel. The robotic scalpel needs to provide important feedback to the human operator so that the physician does not cut too deeply or push too hard. That’s Xiao’s specialty, the science of haptics. She has successfully incorporated the sense of touch into robotic scalpels, making them more human.

“A lot of elderly people want to stay at home,” says Xiao, “and robotics can help them.” These robots don’t look anything like a human nurse, but they can fetch water and food and remind patients to take their medicine. There are also smart hospital beds that integrate the various devices monitoring a patient’s condition.

Some beds sense when a sleep apnea patient stops breathing. The bed then turns the patient so that breathing can resume. Mobile patients now have smart wheelchairs equipped with a laser range scanner, tablet computer, infrared camera and speech recognition software. The wheelchair can learn the layout of the home from the patient’s voice and then travel to where it is told.

So far, three Charlotte businesses have partnered with this center: Robotics Operations CoroWare Charlotte, Electric Power Research Institute (EPRI) and Carolinas Medical Center. “We are still recruiting members,” says Xiao.


Six Seeds: Configuration Analytics and Automation

Five banks including Bank of America and Wells Fargo, were recent victims of large scale cyber attacks. Foreign governments are prime suspects. What’s next? Wrong question, says Dr. Bei-Tseng Chu, chair of UNC Charlotte’s Department of Software and Information Systems.

“It is better to ask what industry is not open to attack. The answer is only those we don’t care about. If it’s important and of value, it is in danger from ‘hacktivists’ and thieves,” says Chu.

Protecting the nation’s information technology infrastructure is the goal of the newly approved Center for Configuration Analytics and Automation. Chu is a researcher at the center; Dr. Ehab Al-Shaer, its director. Its first day in business was May 1. George Mason University and the University of California-Davis are center members; allied companies will be announced later.

Complex computer systems are built or configured with thousands of components—everything from routers and servers to firewalls, switches, DMZ subnetworks and proxies. “The more complexity, the more opportunity for error,” says Chu. Configuration analytics enable computers to do the work of correcting problems ahead of time.

Moving information to the cloud presents a promise and peril for small businesses. Before the cloud, they couldn’t afford high-level system security. With the cloud, they have more resources, but they become a bigger target. In the movie, Jaws, the crew needed a bigger boat to take down a Great White. In the cloud, it is a bigger weapon like Cloud Checker, a pet software project of Dr. Al-Shaer and a big gun for his new center.


Six Seeds: Sustainably Integrated Buildings and Sites

Urban Eden, UNC Charlotte’s entry into the 2013 Solar Decathlon competition, combines state-of-the-art photovoltaic panels and geopolymer cement concrete embedded with water-filled capillary tubes. With the help of the sun, it’s designed to fully power a home for 10 days. That feat may win the 49ers points at the Solar Decathlon Village in Irvine, California, in October.

It may also help advance the work of the NSF Sustainably Integrated Buildings and Sites Center (SIBS). Associate Professor Dr. Robert Cox, who was an advisor on Urban Eden, is its director.

The center is new. Its first day under NSF was tax day, April 15. Academic partners include Carnegie Mellon University and the City University of New York. At this early date, the participating companies are Wells Fargo, Bank of America, Ingersoll Rand, Johnson Controls, Vornado Realty Trust and the New York City Department of Citywide Administrative Services.

SIBS will concentrate on four basic resources—air, energy, water and materials—and then spiral the investigation up a notch to see how each contributes to a building’s interior, the building itself and the environment in which the building is placed.

“To date, most of our emphasis has been on energy,” says Cox. “We currently have a heavy emphasis on the use of data mining and sensing for improved energy efficiency in buildings.”

Buildings are unlike other engineered environments, says Cox. They are often designed with aesthetics first and energy efficiency further down the line.

“Even when architects design an energy-efficient building, when you put people in it, all of a sudden, it isn’t,” says Cox. “Occupants use more light than anticipated, they add space heaters.” The first rule of the new SIBS center is occupant comfort. A comfortable occupant is more productive and more efficient.


Six Seeds: Metamaterials

It is a little more complicated to explain the magic taking place in Dr. Mike Fiddy’s two-year-old Metamaterial Center.

Metamaterials are not found in nature. They are artificial structures engineered to have refractive indices below +1, even into the negative numbers. What makes them so intriguing is that they not only reverse a few laws of physics, but also move Harry Potter’s cloak of invisibility closer to reality.

Much of the work that goes on between Fiddy’s lab in Charlotte and those at City University of New York, Clarkson University and Western Carolina University is theoretical. Today’s metamaterials are microscopic and years away from production.

Fiddy talks as often about meta-atoms, nanostructures and models as he does about metamaterials or invisibility. “When it comes to making practical metamaterials,” says Fiddy, “we need a world that is a lot more sophisticated than today.”

At this early stage of development in a field barely 10 years old, research is driven by the Center’s corporate sponsors, says Fiddy. Those on board include Raytheon, Corning, Xerox, Goodrich, the Army Research Labs and the Air Force Research Lab at Wright-Patterson Air Force Base.

The military certainly has an interest in Harry Potter’s cloak. Imagine a battleship that is invisible to both radar and sonar, one that can’t be seen or heard.

“Today we can’t make something invisible, but we can make it hard to see at some frequencies,” says Fiddy. “The theory is there, but we are really still taking baby steps. We are only 10 to 15 percent of the way there.”


Six Seeds: Precision Metrology

“We are big dogs in precision metrology,” says Wilhelm also Charlotte Research Institute’s executive director. Based on the number of industrial partners the Center for Precision Metrology has recruited (14), its faculty (20), laboratory inventory (41), past and current projects (49) and longevity (19 years), he is not exaggerating.

Unlike all of the university’s other NSF IUCRCs, this is the only one based solely at UNC Charlotte. That’s because there are no other universities in its league. That too is no exaggeration.

The metrology center invented the world’s first subatomic measuring machine, the first laser tracker and set at least four national standards adopted by the American Society of Mechanical Engineers. It also spun off numerous production companies, including Charlotte-based, InSituTec.

The center graduated from NSF in 2008 and this year Center Director Dr. Bob Hocken has reapplied for continuing status as an IUCRC. “I’d be rather surprised if we were not approved,” he says. Precision Metrology Center was first approved in 1998.

Included among its industrial affiliates are Caterpillar, Corning Cable Systems, Pratt & Whitney, GE Energy and General Dynamics. Hocken hopes that one of the Center’s early affiliates, Boeing, may soon be returning. Affiliates, some with offices in Charlotte or in nearby communities, provide the center with $400,000 in annual financial support.

Clearly, the Precision Metrology Center is a success story writ large.


Significant Leverage: Buy-in and Return on Investment

The IUCRC Program is a model of “leverage”—in terms of “leverage in,” obtaining the buy-in of partner companies, and in terms of “leverage out,” the return to the community on the Program’s activities.

NSF’s financial contribution to the Centers is relatively small—about $15 million in FY 2011. Funding from sources other than NSF is much larger, totaling more than $68 million in FY 2011. Over the past three years, for every dollar the IUCRC Program invests, the average center secures $2.9 to $3.8 dollars in industry funding and between $7.3 to $10.9 of total funding.

It is difficult to measure the impact of IUCRCs since they perform pre-competitive, shared research, nonetheless, the data consistently documents the leveraging effect of IUCRC financial support, the establishment of valuable partnerships, immediately realized R&D impacts and descriptions of technology breakthroughs. In one assessment strategy, it was determined that each dollar invested by NSF helped to create $69.4 in benefits, with a total net present value of $1.27 billion.

“The IUCRC Program allows for critical collaboration delivering advancements in research that can be commercialized and monetized in the global marketplace more expeditiously,” attests Vice Chancellor Wilhelm. There is no doubt that the IUCRCs at UNC Charlotte truly leverage this region’s university resources and personnel, and business relationships, generating wealth and job creating opportunities.


Part Three: Are You “Personally Ready” to Sell?


As we have been discussing in the past two articles, the personal decision to sell your business is usually based upon some combination of the following:

  • A desire to “take the chips off the table.” Your tolerance for risk just isn’t what it used to be.
  • The joy of going to work each day is fading. Not only has the fire in your belly gone out, but it’s been replaced by the desire to do “something else,” known or unknown.
  • The “successor designate” can’t and/or won’t succeed. Neither child nor employee is able and/or willing to fill your shoes.
  • You realize that now is the time to sell because you can attain financial security.
  • There are a lot of activities other than running a company that you still want to experience.


Along with the personal motives listed above, there are objective conditions that must be present to maximize your chances for a successful business sale. These include:

Ø            Your company should be experiencing increasing cash flow.

Ø            Your company should be maximizing the “value drivers” recognized by investment bankers as causing your company to be more valuable.

Ø             The merger and acquisition (M&A) market should be vibrant and near the peak in deal activity and pricing.


On a regular basis (no less than annually), you should discuss with your “planning team” (which normally includes your CPA, attorney and personal investment advisor) current business value and how best to increase and protect it. If your business has reached a value threshold that permits a sale that allows you to realize your financial goals, you have reached a point where you may be able to sell.

If this is the case for your business, then the next step is to discuss with your team the process for selling to an outside third party. With access to an experienced “deal team” (including a transaction intermediary) who can estimate the marketability and pricing if you sold your business today, a professional legal advisor (preferably one with substantial experience with sale of business transactions) can help guide you through the process of cashing out of your business and moving on to the next stage of your life.

If your business is not ready to be sold, even though you are ready to sell it, you may need to focus on increasing cash flow. This is best achieved by employing value drivers recognized by the M&A professionals.

The following value drivers are just a few of the key value drivers which are important to selling your business for the highest price:


  1. A motivated management team tied to the company by “carrots” (stay bonuses and ownership or ownership-like incentive arrangements”) and “sticks” (“non-competition and non-solicitation agreements”)
  2. Quantified operating systems
  3. A diversified customer base (no one customer constitutes over 10% of your revenues)
  4. Recurring revenues and multiple streams of revenue
  5. Realistic growth plan and scalability
  6. Financial systems and controls to withstand due diligence
  7. Financial growth in all three areas at once (revenues, cash flow, and profitability)
  8. Protected intellectual property
  9. Owner already removed from the business
  10. Relational health (engaged employees, engaged customers and engaged suppliers)


Again, meeting with your planning team is key to maintaining a focus on increasing business value and cash flow through value drivers. The planning team will help you make the decision to sell as early as practical—hopefully years before the actual sale—so that the business is ready when you are!

Remember, it usually takes years to significantly and consistently increase cash flow and business value. Once you’ve made the decision that you would like to someday sell your business, the time to begin planning and implementing begins immediately.

If you are ready to exit, and your business is saleable given the current M&A marketplace, the decision is usually straightforward. It is when you are ready to sell, but your business isn’t, that the chance for burnout increases. Be sure to choose an experienced exit planning professional so that your potential for owner burnout is minimized and you are able to exit on your terms and in your preferred timeframe.

Many small and mid-sized businesses rely heavily on their banking relationships. It is not uncommon to have a business checking account, payroll account, line of credit, equipment loan, commercial mortgage, company credit cards and/or merchant account with one or more banks.

While many companies are heavily dependent on their bank, some business owners and managers do not know their banker, or they may even consider their bank an adversary, not a partner.

Businesses frequently invite customers and vendors to visit or tour their companies regularly, so past performance and future expectations can be discussed and problems identified and solved. These visits help strengthen business relationships.

This same process should be used with your banker. Your bank can significantly assist your business, so you should “invite your banker to work” and try to build as strong a relationship with your bank as you have with other critical customers and vendors. For a bank visit to be successful, however, you should consider the following:


Understand your bank’s wants and needs

Banks earn profits by providing financial services and loans, and these services are not free. For example, while most small commercial bank loans are backed with some form of collateral (such as accounts receivable, property, equipment and other “hard” assets), the bankers underwriting these loans almost always want to be confident that the loans can be serviced and eventually repaid through a company’s cash flow, since confiscating and then trying to sell collateral is always a last resort.

As a result, these bankers are keenly interested in factors that impact your company’s ability to generate cash on a consistent and predictable basis including your total annual sales, operating margins, net profits, total number and diversity of customers, types of items produced and sold in a year, etc.


Approach your banker as a partner

Your banker should not be an adversary; instead he should be a partner who supports your needs. If your bank is aggressive toward your company, your account is either not profitable for them, or they feel you are too risky and are worried about losses. Ask your banker if you are a good customer. If you are not a match and you determine the relationship cannot be fixed, then change banks.


Market to your banker

Give your banker a tour of your facility, and explain what you do and how you are different from your competitors. Market your company, as you would to a customer or another supplier. Be excited about your products, your expertise, processes, competitive advantages, etc.


Be comfortable discussing your financial performance

Bankers should be trained to read and analyze financial statements and ask tough questions. Do not be intimidated by this process. Do your homework and be aware of what your financial statements show. Discuss your successes and failures and explain how you are working to fix your problems. Failing to discuss your weaknesses suggests that you are either not aware of the problem or you are not working to fix.


Discuss your future

Banks usually ask to see your budget, because it shows them your plan for the next year. If you do not have a budget, explain whether your sales are expected to increase or decrease, and how this change will affect your net profits and cash flow. You should be able to talk about how much your material, labor and other costs will increase or decrease as a percentage of sales. If you do not know or cannot explain, then your banker may get concerned that you have no plan.

Also, talk about new equipment needs or building additions. These changes could require a working capital loan, equipment lease or loan, or a new mortgage. These products generate additional profits for your bank and make you a more important customer.


Ask your banker for advice

Bankers visit a variety of companies and review financial data from many. Ask if your banker sees any problems or if they have concerns about your company. Then ask for suggestions about how they think you can improve.

Building a strong bank partnership takes time, but you can begin the process by “inviting your banker to work”. You have a wealth of knowledge about your company, and you can use a visit to teach your banker about your unique business and expertise. This is also a great time to honestly and openly discuss your past performance and future needs, and ask for advice about how you should improve. Michael Waddell is a Financial and Management Consultant at Potter & Company.

Publisher's Posts

As the Affordable Care Act (ACA) is implemented, it will become clear that there is little in its guidelines and regulations that addresses health care costs. Nevertheless, the ACA positions business owners and consumers to become increasingly engaged and active in making health care decisions.

To make good health care decisions, they need to be armed with access to information about costs as well as quality, in addition to the overwhelming variances in coverage from one plan to another, one provider to another, one doctor to another and even from one procedure to another.

The current U.S. health care system was substantially configured in the mid-1960s when Medicare was introduced and approved by Congress and then President Lyndon Johnson to provide for the elderly. While most would agree that care for the elderly has been vastly improved—most seniors had no health coverage prior to its passage, it also created an incredibly complex system.

What is needed is health care transparency.

Health care transparency provides employers and consumers the ability to see provider-specific information on the quality and cost of medical services reflecting the true costs that include any group-negotiated discounts, as well as the costs of various facilities and diagnostic tests, and accounts for co-pay, co-insurance and deductibles.

Equally important to the display of costs is information about the quality of care indicated by collectible data such as patient outcomes, rate of complications, readmissions, hospital-acquired infections, and other factors.

In the 1980s, Medicare reimbursement was built around a diagnosis-related group system (DRG) classified into 467 DRGs. These were used to compensate hospitals for patient care. In 1992, Medicare adopted the resource-based relative value scale (RBRVS). From this system, providers received payments determined by the expected resources needed to provide care including physician work, practice expense and professional liability expenses. These could be adjusted by geographic differences.

As you might expect, providers started to use the Medicare reimbursement rates as the baseline costs and then add other expenses when individuals were not covered under Medicare. This is known as cost-shifting.

From 2006 to 2010, health care costs have increased by 19 percent while inflation over the same period has increased by 8.6 percent. Presently, consumers often have no idea what the cost of care will be until they receive sometimes multiple bills in the mail weeks or months after the services have been rendered. Health care transparency will benefit consumers, employers, providers and health plans to make sure costs are not being unfairly shifted and to assist them in determining the extent to which they can afford health care and in paying for the health care they consume.

A report delivered by the Catalyst for Payment Reform and Health Care Incentives Institute compares and rates health care transparency from state to state. Unfortunately, North Carolina and South Carolina were given Fs by the Institute. From their research, only two states deserved As, five earned Bs, seven achieved Cs and Ds, and more than half, 29 states received Fs.

To have any impact on health care costs, it is important that health care transparency be adopted as widely and as soon as possible, and delivered to employers, consumers and their families so they can make appropriate judgments regarding their own health care. As consumers increase deductibles and co-pays to afford health care, transparency becomes even more important.

One company that I know—Castlight Health—works with large self-insured companies to provide their employees with information about health care costs in their communities and how they vary with in provider networks within the company’s self-insured plans. This is exactly the type of resource that smaller businesses and their employees need to make wise decisions about purchasing health care in their communities.

Now is the time to act. The sooner policies, laws and regulations encourage health care transparency; the sooner consumers can act in their best self-interest and the better the outcome for the health care system. Technology will be helpful, but education and articulation of the need for transparency to our lawmakers will be immensely important.

Remember that costs are only one side of the equation. Quality outcomes are the other side of the equation and they should be contemplated and considered at the same time. With the tools that transparency can provide, our health care will improve and costs will be contained or maintained before they become unsustainable.


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Thank you, John Paul Galles