David’s Contact Info:  312-502-9649 or dhunt@gelscrubs.com

MidwestHR: What are the products and/or services that your company provides?
David Hunt:  Allegra Brands is the leading provider of licensed medical apparel. We provide medical scrubs, lab coats, surgical caps, and healthcare footwear to healthcare workers. GelScrubs is the leading brand of collegiate medical apparel, putting Illinois, Ohio State, and other college logos onto scrubs. New Balance Healthcare is the most innovative new medical apparel product with stretch, innovative moisture-wicking features, and great styling.

MHR: What are your company vitals?

DH: Location(s) -Chicago, IL
DH: Number of years in business – 13
DH: Number of employees – 20

MHR: Who does your company specialize in working with?  Do you have a niche market?
DH: We provide scrubs to retailers including college bookstores, uniform retailers, and sports fan shops, as well as to hospitals, doctors offices, and individuals online.

MHR: What sets your company apart from your competition?
DH: Allegra Brands features the highest-quality brands in the marketplace. Consumers are looking for branded product in scrubs. Our company provides those great brands for them.

MHR: What are the best ways for people to receive information/updates from your company (i.e. website, blog, twitter, etc)?
DH:  You can purchase product at www.gelscrubs.com, or from any of our dozens of online retailers including Scrubs.com, Lydia’s Uniforms, and Amazon.com.

MHR: What do you personally love about your job?
DH: First, I love the great people I have the opportunity to work with every day. We have the best team in the industry. We strive as an organization of dedicated individuals to help those healthcare workers that provide such an immense difference in the lives of those in need every day. Nurses, doctors, and other medical workers do amazing work, and I am glad we are able to be even a very small part of making their jobs easier and more enjoyable.

MHR: What is one thing about you that most people don’t know?
DH: While I am not a virtuoso by any means, I really enjoy playing the piano. And while my 3 and 1 year olds keep me very busy, I still try to do at least one triathlon each summer.

MHR: What is your favorite…?
DH: Book – The Power of Habit
DH: Movie – The Matrix
DH: Type of Music – I honestly like just about every type of music
DH: Food – Chili

MHR: Away from work, what do you do for fun?
DH: Enjoy time with my family and friends, in particular by wife Joi, daughter Allegra, and son Jack! We like to travel when we can, usually someplace warm and tropical.

MHR: If you could travel anywhere in the world, where would you go and why?
DH: Either the Galapagos Islands, or the Great Barrier Reef, to go scuba diving.

With some states still weighing their options with respect to setting up certain types of health insurance exchanges, employers were beginning to worry about an important compliance deadline on the horizon. According to the original Health Care Reform Acts, effective March 1, 2013, employers of all sizes were required to provide each newly hired employee with a written notice of the existence of health insurance exchanges and potential subsidies available (Notice of Exchanges and Subsidies). This notice was subsequently required to be provided to all current employees.

However, on January 24, 2013, the US Department of Labor (DOL) announced that it has delayed the compliance date for the delivery of this document. The delay most likely results from some uncertainty and indecision among state exchanges and anticipated information regarding the federal exchange program.  The DOL estimates that the notices (for both new hires and current employees) will be required in either late summer or early fall of this year. The DOL will publish a model notice prior to the new deadline.

The notice must contain the following information:

• Announcement of the exchange and an explanation of services provided through the exchange.
• Statement of an employee’s right to purchase insurance through the exchange, as well as information on how employees can contact the exchange.
• Notification of whether or not the employer’s health plan offers “minimum essential coverage” as defined by the federal law and the potential that an employee has to receive a government subsidy.
• Notice that employees may lose the employer’s contribution to health coverage if they purchase insurance through the exchange.

If your company has more than fifty full-time equivalent employees (FTEs), it is time to carefully consider how your organization intends to comply with the Employer Mandate, or if it determines that non-compliance is the best strategic option.  Whether your organization will face employer penalties depends on whether your current health plan design and employer contribution meet the minimum requirements.  Your decision in this regard may affect information contained in this notice.

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MidwestHR is a PEO serving companies in Chicago and surrounding areas since 1997.  We work with growing companies looking for support with time consuming HR functions such as payroll, employee benefits, employee on-boarding, COBRA administration, compliance, unemployment claims management, workers’ comp and more.  In addition, our innovative health insurance strategy allows our clients to significantly reduce their monthly health insurance costs.  For more information please call 630-836-3000.

Before moving forward with the sale, it is important that you understand the steps involved. Taking the time to determine what you want from the sale, planning carefully, obtaining professional advice and negotiating a satisfactory price and acceptable terms will help make the sale a success.
Once you have made the decision to sell your business, here are just a few of the major considerations you should think about before selling your business.
1. Deciding when to sell your business – Deciding on when to sell your business will include many factors: for example, the condition of the economy, estate planning and the status of your health. All of your reasons may not line up perfectly to make for an easy decision and there will be certain issues that will emerge as more important than others. Some of the considerations may become to-do projects in your overall exit plan. For example, if you are facing a potentially damaging lawsuit, you would have reason to clear up this obstacle. Or if you have important leases about to expire, you may want to negotiate longer terms now so as not to be facing this roadblock later on when you decide to sell.

2. Defining Your Priorities – Just as the decision to sell can be triggered by a number of factors, what you want to achieve from the sale can take a wide variety of forms. It is important that you go into the sale knowing exactly what you want to achieve: what are your non-negotiable items and what items are negotiable. As with most things in life, you’ll have to make some compromises. Rarely does a sale completely meet all of the seller’s objectives —or all of the buyer’s. The more flexible you can be on terms, the closer you’ll get to realizing the top-dollar value of the business.

3. Planning and Preparation – You will need to plan and be prepared for what is about to happen. The due diligence process is the most tedious part of a business sale. It refers to the process the buyer undertakes to investigate and analyze the business being purchased. For a seller, this can be very intrusive. A buyer will ask you to supply information on every contract, report, financial statement, tax return, business relationship, permit, license, filing and significant piece of correspondence imaginable which relates to the business. A buyer wants to know (and has a right to know) every detail about the business. It is very important that your business be in top operating order so spend sufficient time to polish up all aspects of the business. You should be prepared to answer probing questions and furnish specific documentation.

4. Professional Help – Because of the many complex issues that arise in every business sale, you will be well served to engage experienced professional advisors. Investment bankers or business brokers prepare your business for sale and then market it. Their goal is to maximize the price you receive for your business and they are effective at creating a competitive bidding process. It is important to find one that has deep industry knowledge within your business sector. They typically charge a percentage fee of the sale price for their services and the fee can end up being quite large. However, these professionals often create a price premium far in excess of the fee they charge.  You will also need a trusted business lawyer and CPA who can advise everything from the structure of the transaction, the liabilities you will have moving forward as well as the tax implications. These professionals should be brought into the process as early as possible.

5. Disclosures – When you are selling your business, you must provide the buyer with truthful and complete information about the business. This “duty to disclose” is not an option, but rather a legal requirement. As talks progress, you will need to ensure that your buyer knows as much as you do about any potential problems in your business. You don’t have to dwell on the problems, and you should always present possible solutions when you discuss them, but you must disclose them.
6. Negotiations – You should understand your key negotiation points and understand what you can expect from the deal- keep your expectations realistic. Some key considerations might include- how will the purchase be made- stock or asset deal; will you become an employee post acquisition; is an earn out part of the deal. Part of the purchase price may be in the form of a holdback or equity in the new company. Sellers will often have the opportunity to share in the continued growth of the company, but may also need to share in the risk that the company does not thrive. You should also make sure you will be able to work as you would like following the sale. In many instances when an entrepreneur sells his business he has to sign a non-compete agreement, basically declaring he will stay out of that market for a significant amount of time.
7. Continue to Run Your Business – This is a real danger zone. Business owners get so wrapped up in selling their business that they forget to run their business. Value can decline rapidly if you take your eye off the ball.  Remember that these deals can fall apart for many reasons, don’t get too attached to the outcome.

8. Be Patient – Selling a business is a process, one that takes time. Both buyer and seller will need to get comfortable with one another and take the time to build a trusting relationship.

9. Legacy – Most sellers don’t want to cash out and watch the company fall apart. Ten years from now they want to look at a successful business that they had a hand in building. Also, do you care what happens to the company after you sell? Some entrepreneurs who buy businesses do so because they can fold the new company into their existing one in a complimentary way. The brand you created will live on, and potentially even grow beyond where you could have taken it. Other people purchase businesses in order to blow them up, either to destroy a strong competitor in the marketplace, to take on a technology or IP they can use or to sell the new business off for parts and make a quick buck. Can you deal with this result? If you want the best price for your business you won’t always have the luxury of an opinion on the matter.

10. Post Sale – Now that the sale is complete, there are still several areas owners need to focus on to ensure an effective transition into the next stage of life. On the soft side, you have just gone from “whose who” with all its perks and the associated respect to “whose he”, almost literally overnight, it’s a big change, one that will take some getting used to. Also, you have just come into a financial windfall, one that requires significant planning in order to have the proceeds accomplish all of your goals. Frequently, the financial, estate, and life goals of owners will change shortly after a large liquidity event. Make sure you have a comprehensive financial plan in place.  Selling your business will be one of the most important decisions you will ever make. Proper planning is essential in order to maintain control of the process and ensure the desired financial outcome. You should begin the planning process long before the sale.

Why is it important to hire an outside facilitator? When you’re a member of a team, you listen to your coach more intently than you listen to a teammate. Experienced facilitators can say things nobody else can say. They are trained to let all voices be heard and to hold an atmosphere that allows for healthy conflict, respectful dialogue and positive intent to thrive. For a CEO or leader to try facilitating a common vision conversation is simply confusing to both the leader and the team.

The formula I use is “ME-YOU-WE.” It begins with a respectful unearthing of the individual ideas in the room so that each participant understands what is internally important. We do this unconsciously, and having a facilitated session focused solely on one’s self or “ME” helps to articulate one’s values, beliefs and behaviors.

The second portion is what all of us would like to get better at but don’t really know how: to be a better listener—the “YOU” part. This is where deep democracy, or the allowance of all voices to have a piece of the truth, not all of it, is honored. Being encouraged to listen with curiosity and un-tethered fascination to your colleagues allows collaboration to begin. It is a paradigm shift for most leaders to begin listening more than they speak and pivotal for a common vision to emerge.

The third portion is devoted to the “WE” in team. We’re led to believe in most relationships that compromise or consensus is the best we can hope for in our conversations. But the system itself also has a wisdom that, mostly out of ignorance, is rarely acknowledged. It is where the brilliance and the heart of the team is allowed to speak what it knows and wants.

Going through this process with a team of any size allows for a powerful, common vision to come to light that everyone can fully claim as their own. It then drives alignment to the bottom line in every department and division. Imagine what might be different in your company or organization if you were to hire an independent, masterful facilitator to help you develop a highly effective, common-purpose driven team.

The program works like this: program funds are lent via the DCEO on a subordinated basis to the lender at a “below market rate” (below the lenders’ rate). This structure enhances a prospective transaction in the eyes of the lender since the subordinated debt is quasi-capital; meaning in the worst case scenario of default and subsequent liquidation, the bank is repaid first before any monies are repaid back to the DCEO. This enhancement makes a marginal loan opportunity stronger and more likely to get approved by the lender, resulting in prospective economic opportunity for small businesses.

The above example is not the sole benefit and use of the program. Let’s describe another example. Let’s say a company is looking at expanding and purchasing a new facility (or equipment), but cash flow is tight due to an increase in revenues so coming up with a down payment would be a cash strain on the business. This program in conjunction with the SBA 504 can provide 100% financing. That’s right, the minimal 10% down payment requirement of the SBA 504 program could be financed via DCEO funds, leaving the working capital in the business to remain “working”. American Chartered Bank recently helped facilitate the acquisition of a $700,000 piece of machinery for a manufacturing client utilizing this exact structure.

You may be thinking that “the catch” must be the dollar limits. The program can provide the lesser of: a) 25% of the project b) 50% of the lender’s loan amount or c) up to $2MM. Simple math suggests the program could be involved in a “project” of $8 million, so it’s large enough to cover many opportunities.