Many Michigan manufacturers rely on government contracts for many different reasons. Some manufacturers leverage them to grow their business while others will use them to diversify the products that they produce. New regulations though, winning government contracts a little tougher. Or at least force Michigan manufactures to take a little deeper look into their cybersecurity.
New mandates on government contracts that are set to take effect December 31 of this year may cause manufacturers to find themselves shoveling out money to keep up with new cybersecurity policies. The upkeep is estimated to range a few thousand dollars to update company policies and up to $40,000 if a manufacturer’s security equipment needs to be updated. These include access control protocols of sensitive information, maintenance of security systems, and even an increase of the company’s physical security of their server room. You can find the new requirements in the National Institute of Standards and Technology (NIST) Special Publication 800-171.
The Business Law Group was very proud to take part in the successful transaction of Central Interconnect. Central Interconnect is a great example of a small business opportunity for potential buyers. It was run very well by the seller and had a strong infrastructure in place to ensure the transition would be a success. The new owners have some big visions for where this Grand Rapids small business can go. We can't wait to see what the future holds. Thank you to everyone that helped make this transaction a success.
You can read more about this deal by clicking here.
Getting into business can be a confusing process. You may be interested in the prospect of being the owner of a company but you don’t know the first place to start. This can seem like a huge hurdle to overcome but all the businesses you see every day were business opportunities that found owners somehow. So how do you find a business opportunity?
Finding Business Opportunities
Business opportunities are everywhere. You need to know what you are looking for though. Living in a time period where instant gratification has become the norm, we can sometimes expect that we should be able to jump online and spot business opportunities or find a website that has collected all of the current business opportunities.
As an owner of a Grand Rapids startup or Michigan business, it can be tough to figure out what type of business strategy you should implement. Big sales numbers are great but potential to growth is so exciting. Is it better to have a business with a lot of potential for growth or for you to have a business with a lot of sales?
The two are not mutually exclusive. A business can have a high volume of sales and still have a massive amount of growth potential. At the same time you can have a business with little room to grow and have very low sales also.
Think of this like a graphing exercise. Along the horizontal axis you have your business’ growth potential and along the vertical access you measure your business’ sales volume. You can obviously have a business fall into the upper-left quarter of the graph (high sales-low growth) or the lower-right quarter (high growth-low sales). At the same time, some businesses fall into the other two quadrants too.
The newest private equity firm in Grand Rapids is looking to shake up the market. Looking to raise $50,000,000.00, Auxo Investment Partners is hoping to invest in 10 to 15 companies over the next 5 years. This may sound like a traditional PE firm model (raise money and then invest it) but Auxo looks to differentiate itself from the others.
Jeff Helminski and Jack Kolodny (both formally with Blackford Capital) along with Fred Tedori, will be the managing partners of Auxo. They look to add transparency between the firm and their investors as well as provide a different option for businesses trying to choose between a family office and a traditional PE firm.
Many Grand Rapids businesses are asking a lot of questions about the new overtime laws, but the number one question being asked is, “How do I deal with the changes to the overtime laws?”
The “new” rules are not actually new. The Fair Labor Standards Act (FLSA) has always required that employees be paid at least the Federal Minimum Wage and receive overtime pay at time and one-half the regular rate of pay for all hours worked over 40 hours in a work week.
The impact on many small businesses is the change to the section of the FLSA that is commonly referred to as the “white collar” exemption. Under the current rules, any employee receiving a salary over $23,660 a year could be considered exempt and employers do not have to pay overtime. After December 1, 2016, if an employee earns less than $47,476 a year, he or she is eligible for overtime. (It should also be noted that the employee must perform executive, administrative or professional duties in order to fully qualify for the “white collar” exemption.)
So with thousands of employees about to become eligible for overtime (and wages that most small businesses cannot afford), what are some of the ways that a small business can legally avoid paying overtime?
Franchises are some of the world’s most recognizable businesses. There are thousands of franchises registered throughout the United States of America. Franchising is an awesome tool for growing your business. But the process is more complicated than deciding to franchise your business and finding someone to be a franchisee. Drafting a Franchise Disclosure Document and a Franchise License Agreement, creating operating manuals and training programs, creating marketing plans, registering with specific states and more can take a massive effort and requires a capital investment.
One way that some consultants have claimed to save new franchisors effort and money is by packaging the entire franchise setup process under one roof. They will walk a new franchisor through the entire process an assist in the development of every document that is needed for your business to become a franchise. The problem is this creates a major legal issue for a business that is making one of the biggest changes that it will ever go through.
Selling your business is not something that should be entered into lightly. Putting out feelers or testing the market to see if there is any interest can do more harm than good. When you actually are starting to consider putting together an exit strategy, the first place to look is internally. Sell-Side Diligence is growing in popularity in the United States because of the number of benefits it can bring before, during and after the deal but some business owners do not understand the process.
Sell-Side Diligence is nothing new to world. In Europe it is often referred to as Vendor Due Diligence and is extremely standard in in transactions. From a logical standpoint, the process makes a lot of sense. Look into your own closet, drag out all the skeletons you can find, take care of those that are easy to resolve and then let potential buyers know about the rest so there are no surprises. This process will not only increase the value of your business but it will also smooth out the transaction process.
Conventional business wisdom tells us that if we work hard, have a great product or service and the right marketing plan, your business will consistently grow. Anyone that has ever ran a business will tell you that this conventional wisdom is flawed. The hardest working individuals with the best products in the market with the best laid plans can often fall flat. So how do you as a small or medium size business owner stimulate growth in your business? One short cut to growth can be through acquisition.
Growth through acquisition is often associated with large, Fortune 500 companies. You open any business publication and can read about these major national corporations buying up a startup or a competitor for millions, if not billions, of dollars. While this is the general perception of “Mergers and Acquisitions” the fact is there are an even greater number of transactions that take place on a much smaller scale. These types of acquisitions can accelerate or maintain growth trends in your business.