Job Training Incentive Program Helps NM Companies Expand

The State of New Mexico’s Job Training Incentive Program (JTIP) Board has awarded 18 companies with over $5.5 million during September and October 2020, in support of 803 new jobs, Economic Development Department Cabinet Secretary Alicia J. Keyes announced today

The September awards totaled $3.6 million for 672 trainees and 1 intern, with another $1.9 million for 129 trainees and 1 intern awarded in October. Average salaries for trainees ranged from $11.62 to $69.71 per hour, with companies located throughout New Mexico, including Albuquerque, Deming, Las Vegas, Los Alamos, Santa Fe, Sunland Park, Taos, and Truth or Consequences.

“The recent job-training grants show that businesses from Taos to Deming are looking to create good jobs in all corners of the state,” said Gov. Michelle Lujan Grisham. “My Administration will continue to do everything possible to support businesses who want to hire workers or promote employees into higher-paying jobs so we can have a long-lasting recovery that benefits New Mexico families.”

The JTIP program is instrumental in attracting and retaining businesses in New Mexico. It’s reimbursement for training new employees and employees who wish to improve their current job position is a driving force for expansion of local employment. The robust program recently earned New Mexico a Top 10 spot on site selector Business Facilities‘ 16th Annual State Rankings Report.

“JTIP is supporting new jobs in timber, meat processing, energy, robotics, food manufacturing, software, and satellites,” Cabinet Secretary Keyes said. “These are the diverse industries that are growing and expanding in New Mexico with help from JTIP and other economic incentives. This is one way the state and lawmakers can help businesses grow and create jobs in uncertain economic times.”

If you’re thinking of expanding or making a new move, New Mexico is a great place to buy a business! Learn more about opportunities to own a business here and contact us for more info.

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Four Common Seller Mistakes

Sellers are just like everyone else in that they can make mistakes.  In this article, we’ll explore some of the most common mistakes that we see along with some of the repercussions. 

1. Not Seeing the Buyer’s Point of View

The first major mistake that sellers make is that they simply fail to look at the situation from the buyer’s perspective.  One of the smartest moves any seller can make is to step back and ask themselves two key questions. 

 “What information would I expect to see if I was thinking about buying this business? 

“Would I trust the information being presented to me if I was the buyer?” 

While there are many other questions sellers can ask to help reframe their thinking, these two simple questions can orient a seller’s thinking towards a buyer’s perspective.  Additionally, investing the time to understand the buyer’s position can help avoid a range of problems and help smooth out the negotiation process.

2. Neglecting the Business During the Sales Process

Another seller mistake we see is that the seller neglects the business during the sales process.  This can have significant negative long-term consequences.  Sellers must understand that they must maintain the day-to-day operations as though the business is still theirs.  The old saying, “Don’t count your chickens before they’ve hatched,” most definitely applies to selling any business.  Business deals fall apart all the time.  This is true from small deals to corporate acquisitions. 

3. Overall Lack of Preparation 

Any seller who is truly serious about selling his or her business will have all of their documentation available and well organized.  This list would include financial records, environmental studies, business forecasts and more.  It is important to make a good impression and convey to prospective buyers that a business is well organized and ready to be sold.  Disorganization on any level could make prospective buyers worry that the business isn’t being operated in a professional manner.

4. Holding Misconceptions Around a Business’ Value

Finally, a real “deal killer” can be when sellers don’t understand (or have a mental block) concerning the real value of their business.  This issue can lead many business owners to set a price that is simply too high or even completely unrealistic.  Many sellers have put years of blood, sweat and tears into a business.  Learning that their business isn’t as valuable as they had hoped can be an emotional, psychological and financial blow all in one.  But sellers also have to adjust to the realities of what the market will bear. 

Avoiding seller pitfalls is incredibly important.  Working with a skilled and proven business broker or M&A advisor is a way for buyers and sellers alike to avoid an array of significant problems that could otherwise arise.

Copyright: Business Brokerage Press, Inc.

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Strength in Flexibility? Some Unexpected Benefits to “New Normal”

A recent Economist article titled “Countering the Tyranny of the Clock” explores our changing relations to time as work becomes more flexible. A little philosophical? In fact, it’s super pragmatic!

“Flexible working existed well before the pandemic. But it only offered employees the ability to choose when in the day they worked their allotted hours,” writes Bartleby. “Remote working has brought a greater degree of freedom.”

Rather than an unraveling of work ethic when work is removed from strict office routines, we’re actually seeing people coming together and doing more. Slack conducted a survey of 4,700 people working from home to determine responses to flexible work schedules. The results were extremely positive. Only 12% of workers wanted to return to a “normal,” pre-pandemic schedule. Respondents indicated improved productivity and engagement. Interestingly, Bartleby points out, “flexible workers scored more highly on a sense of ‘belonging’ to their organization than those on a nine-to-five schedule.”

Employee engagement is a hot topic in workplace research. It correlates positively to improvements in service, sales, quality, safety, retention, and profit and share holder return. If productivity and work culture camaraderie are on the rise, we might consider how to sustain this unexpected boost.

The link between independence and engagement seems paradoxical. But people enjoy working to their own rhythm–and do it pretty well. “Few have the ability to concentrate solidly for eight hours at a stretch,” observes Bartleby.  “There are points in the day where people are tempted to stare out of the window or go for a walk; these may be moments when they find inspiration or recharge themselves for the next task.” Employees working at their own pace may bring more enthusiasm and focus to their own work as well as their team’s.

The Economist reflections agree with another study on work from home, conducted by researchers at Harvard Business School, MIT Media Lab, and McCombs School of Business at the University of Texas at Austin. That study found that job satisfaction and engagement, after an initial dip, have recovered and even increased.

Ironically, the catch to flexible working hours actually seems to be people working too much. “In the weeks immediately after the lockdown began, only half of employees were able to maintain a 10-hour workday or less, whereas nearly 80% had been able to do so previously. These patterns have started to trend back to pre-lockdown levels, although the workdays are still 10% to 20% longer on average,” according to the Harvard, MIT, and UT Austin study.

If you’re managing a team remotely, modeling perspective is a powerful way to keep your work culture energized and sane–even at a distance. Clear communication, effective collaboration/project management tech, and organized work plans (for yourself and for your team) go a long way. But helping your team not over do it is not a bad problem to have! Can your business hold onto some of the workplace flexibility of this year for higher performance moving forward?

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Unraveling the Seller’s Predicament

Selling a business isn’t always 100% about the price.  It is not like selling a house where typically the most important factor is who places the highest offer.  In the end, if the seller is to achieve the most optimal results, there are other variables that should be considered. 

The idea of selling to a competitor is one that seems attractive to many business owners.  After all, a competitor has the built-in advantage of understanding the business and thus can theoretically understand the value of the business better than an outsider.  But while this point is quite valid, selling to a competitor comes with its own problems.  Selling means disclosing a great deal of confidential information, and that could prove to be very risky if the deal were to fall apart.

A second avenue that sellers will often explore is selling to a financial buyer.  A financial buyer is likely not to be a competitor.  But on the downside, a financial buyer may be unwilling to pay the seller’s price.  It is important to remember that a financial buyer is considering buying the business with the intention of selling it for a profit within a few years.

The highest selling price may come from a strategic acquirer.  But this doesn’t necessarily mean selling to a strategic acquirer is the most prudent course of action for a seller.  A strategic acquirer may not have the best interests of the company at heart.  When a strategic acquirer takes ownership, key employees and management may be replaced.  The company may even be moved.  Many owners are unprepared for the shock that may come along with a strategic acquisition.

There are other potential buyers, many of whom are frequently overlooked, who may be the optimal fit for a given business.  It is possible that the best buyer for a company could be one of its employees.  However, this option comes with risks as well.  Key employees and management may leave if the deal falls through, as they now know that the company is for sale.

Finding overlooked buyers is what business brokers do best.  Matching the right buyer with the right business is both a science and an art.  Teaming with the right business broker or M&A advisor can open up a range of new avenues and help a seller reach the kind of buyer that is as close as possible to the perfect fit.

Copyright: Business Brokerage Press, Inc.

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Communicate Care for Positive Online Customer Experience

Creating a positive online customer experience has been catapulted into top priority status by the pandemic. We have written lately about a recent survey-based study titled “The New Reality: Understanding the Retail Consumer Experience During a Pandemic.” In it, Wharton Marketing Professor Thomas Robertson finds “about a 10% increase in problems from before the pandemic to the middle of May, with some decrease in loyalty. As the percentage of online sales was going up, many retailers weren’t ready for the onslaught and had trouble coping with it.”

Business can seize this opportunity to improve online customer experience to stand out in their field.

Online (dis)Engagement and Empathy

Communicating empathy is a fairly simple and extremely powerful way to improve online customer experience. In an article titled “How Should Companies Talk to Customers Online,” in MITSloan Management Review’s Creating Great Online Customer Experiences, marketing researchers Brent McFerran, Sarah Moore, and Grant Packard point out the shifting nature of business’ opportunity to interface with customers.

More and more consumers are engaging with customer service through digital channels, including websites, email, texts, live chat, and social media. In 2017, only half of customer experiences with companies involved face-to-face or live-voice-based interactions, and digital interactions are expected to represent two-thirds of customer experiences within the next few years. The vast majority of customer service interactions around the world begins in online channels. Despite the convenience and speed of such interactions, they lack some of the most important aspects of off-line customer service. In-person interactions are rich in nonverbal expressions and gestures, which can signal deep engagement, and an agent’s tone of voice can convey empathy and focus in phone conversations. Over time, these interpersonal touches help companies build and sustain relationships with customers.

The Research

Customer service scripts tend to emphasize the use of “we” (as in, “We–the company–are happy to help you!”) and “you” (as in, “We’re sorry you are experiencing difficulties.) To test whether this language is actually helpful, the authors surveyed over 500 customer service managers or agents, analyzed more than 1,000 customer service emails from 41 of the top 100 global online retailers, and conducted controlled experiments with 2,819 North American adult participants.

“You” Know Who “We” Are (and When We’re Lying)

Findings suggest something basically intuitive but alarmingly easy to lose sight of: customers are people. We’re wired for social interactions. Most of us instinctively understand–and strongly dislike–when communication is insincere.

In all cases, our modified responses with “I” pronouns significantly outperformed the “we” pronouns that real service agents were using. Relative to using “we,” the benefit of using “I” stems from the fact that customers perceive the employee to be (a) more empathetic and (b) more agentic, or acting on the customer’s behalf.

When two people are communicating with each other, “I” suggests a personal focus on the issue at hand. Specifically, our research on customer service finds that saying “I” signals that the agent is feeling and acting on the customer’s behalf. For example, telling a customer “I am working on that” conveys a greater sense of ownership than “We are working on that,” which can imply a diffusion of responsibility. Similarly, “I understand the issue” shows more empathy than “We understand the issue.”

Ultimately, customers need to know that the agents with whom they are interacting care and are working on their behalf. Research has consistently shown that customer perceptions of empathy and agency drive satisfaction, sales, and profits,9 and our studies show that “I” fosters these perceptions to a significantly greater degree than “we.

We also resent feeling like we’re being blamed. The use of “you” can backfire.

Sometimes, using the word “you” can actually have a negative effect on company and customer outcomes. For example, we found that saying to a customer, “Sorry your product was defective,” rather than “Sorry the product was defective,” resulted in decreased satisfaction and purchase intentions. This result was driven in part by perceptions that the employee wasn’t being accountable (that is, lacked agency), potentially shifting the responsibility or blame toward the customer.

Key Lessons

The takeaway: service employees should be coached to communicate from a personal perspective that implies real, live, human care. “There are simple language changes that any company can implement,” conclude McFerran, Moore, and Packard. “By making these changes to customer service language, organizations can create more meaningful interactions with their customers — and improve the bottom line.”

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Buying a Distressed Business 

It is safe to state that Howard Brownstein, President of The Brownstein Corporation, is a true expert in providing turnaround management and advisory services to companies, as well as their stakeholders.  Brownstein serves as an independent corporate board member for both publicly held as well as privately-owned companies and nonprofits.  During his career, he has been named a Board Leadership Fellow by the National Association of Corporate Directors (NACD) and served as Board Chair and President of its Philadelphia Chapter.  He also serves as Vice Chair of the ABA Corporate Governance Committee and has been named a Fellow of the American Bar Foundation.  He has been a speaker at many of the world’s top universities including Harvard Business School and Wharton.  Brownstein received his J.D. and M.B.A. degrees from the University of Pennsylvania.

Mr. Brownstein is considered to be one of the world’s top experts in distressed businesses.  He believes it is essential to remember that not all distressed businesses are, in fact, the same.  There is simply no way to know how bad things are for a given distressed business until one begins to “look under the hood,” and get a full view of what problems may lurk underneath. 

Brownstein firmly believes that distressed businesses can represent a real and often overlooked opportunity for buyers.  The recent economic downturn brought about by COVID-19 means that there will likely be a great deal more distressed businesses on the market in the coming months or even in the next couple of years. 

Why is a Given Business Distressed? 

Before you consider purchasing a distressed business, you absolutely must understand the core reasons for the distresses.  Without a proper and detailed understanding of why the business entered a state of distress in the first place, it is impossible to clearly articulate why the business will potentially be valuable in the future.  It is essential to be able to convey “what went wrong” and how the problems can be fixed.

Brownstein points out that while there are many reasons for a business to enter distress, two symptoms top the list.  The first is cash flow issues and the second issue relates to management.  Often it turns out that the management was simply not rigorous enough.  He also notes that companies will tend to gravitate to external issues as a way to explain away their failure.

Of course, no two distressed businesses are failing from 100% identical causes.  Brownstein suggests a series of questions that you need to ask when you begin exploring a distressed business.

  1. What is the business’ potential value?
  2. Is there something of value under the problems?
  3. Under better or different circumstances, could the business be viable?

These are all questions that your business broker or M&A advisor can assist with.  It’s important to gain a clear understanding of the business’ past, present and future. 

Copyright: Business Brokerage Press, Inc.

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For Happy Online Customers, Deliver Meaningful Benefits

We recently wrote about customer frustrations with online shopping experiences and the related opportunity for businesses to foster delight. In a survey-based study titled “The New Reality: Understanding the Retail Consumer Experience During a Pandemic,” Wharton Marketing Professor Thomas Robertson finds “about a 10% increase in problems from before the pandemic to the middle of May, with some decrease in loyalty. As the percentage of online sales was going up, many retailers weren’t ready for the onslaught and had trouble coping with it.”

Actually Rewarding Rewards Programs

Specifically, Robertson identifies poorly executed customer loyalty programs as a source of annoyance. In another article titled “Why Personalization Matters for Consumer Privacy,” McKinsey partners Phyllis Rothschild, Julien Boudet, and Gadi BenMark take a deep look at customer attitudes towards data use and personalized reward programs. (That article is part of a compilation from MITSloan Management Review called Creating Great Online Customer Experience.)

Their main takeaway: “By understanding what people value, companies can do more to create trust.”

While privacy concerns are different than service concerns, there are instructive parallels for understanding how customers decide what is or isn’t worth their time and money. To find out, Rothschild, Boudet, and BenMark conducted a survey of 1,012 U.S. consumers between the ages of 18 and 70 who had made an online purchase in the last six months.

Levels of concern diminish as the benefits of personalization go up, the McKinsey researchers find. That might sound obvious, but personalization is hard to get right. You need to actually understand something about the person you’re rewarding. To deliver meaningful benefits, businesses need to make sure the advantages they’re offering are important to their customers.

What do online shoppers want?

“Not surprisingly, receiving individualized pricing in the form of discounts for a product or service that consumers really wanted was among the most favored benefits for data use, with 57% expressing excitement,” according to Rothschild, Boudet, and BenMark, “Coming in second, with 55% expressing excitement, was receiving a free product or service that consumers wanted but felt was too indulgent or not high enough in priority to purchase themselves. Interestingly, receiving dedicated concierge services and personalized advice came in at the bottom of the list of customer delights (less than 25% excitement each).”

Furthermore, younger shoppers, shoppers who live in urban areas, and shoppers who spend more time on social media were more comfortable with online purchasing and rewards programs. Depending on your business’ demographics, you may need a closer look to really know what your customers will appreciate in a loyalty program.

Understanding and Communication are Key

Rothschild, Boudet, and BenMark conclude with two pieces of advice:

  1. Understand your consumers’ preferences “Companies need to analyze consumer preferences to develop a clear understanding of what benefits each demographic values the most. By delivering on those benefits through personalized offers, companies can mitigate some consumer concerns. This requires companies to invest in deep consumer research, ongoing testing of the effectiveness of offers, and advanced analytics to provide deeper levels of insight.”
  2. Communicate and educate “Companies that do this best focus on communicating in simple terms, clearly defining the benefits, and being transparent about the types of data collected and how it is secured. They often communicate this information within the typical user’s onboarding or sign-up experience.”

 

 

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New Mexico Economic Development Department Regional Representatives Support Local Business and Community Development

The Economic Development Department has a complete network of economic development experts around the state that are uniquely qualified to assist local governments and community organizations as New Mexico works toward a sustainable recovery.

Economic Development Cabinet Secretary Alicia J. Keyes said the Community, Business & Rural Development program was created by the Legislature to provide the EDD with an expert assigned to each regional economic planning district. When first created, each regional representative had an office in Santa Fe.

Today, there are six Community, Business & Rural Development employees at EDD, working full-time throughout the state. They are known as regional representatives, and are located statewide, with EDD staffers living in Las Cruces, Roswell, Mora, Albuquerque, Bernalillo, and Santa Fe. They assist businesses and communities in a broad variety of economic development needs, providing local support and knowledge within their designated regions.

“The regional reps are EDD’s boots-on-the-ground in all corners of the state,” Cabinet Secretary Keyes said. “They know their communities, they are trusted in their communities, and they are an especially important resource to businesses and local organizations during the health emergency, helping to provide information and assistance as we move forward.”

The team specializes in areas such as passing and using the Local Economic Development Act (LEDA) which primarily provides brick and mortar funding for job creation; community infrastructure financing assisted by FUNDIT; starting and maintaining Business Retention & Expansion (BRE) programs; workforce training through the Job Training Incentive Program (JTIP); the LEADS grant program, which funds projects with quick impacts; assisting communities in locating new companies with the support of the New Mexico Partnership; help resolving state regulatory issues; and improving access to other EDD programs such as MainStreet, Arts & Cultural Districts, and the Frontier & Native American Communities Initiative.

Learn more about the Community, Business & Rural Development program administered by the N.M. Economic Development Department, including full contact information for each region and links to other community and business resources.

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How Should Your Company Deal with an Orphaned Product?

Keeping a product or service around that isn’t pulling its weight might prove to not be a very good idea.  You may have invested a good deal of time and resources into its development, but if that product or service is no longer contributing to your bottom line, it might be time to cut it loose.  Even if your product is pulling its weight, but doesn’t fit into your overall core business, then you should still consider getting rid of this “orphaned product.”  Let’s take a look at some of the reasons you might want to keep or remove an orphan product from your company.

There are four main reasons why a company might want to divest itself of a product line or service completely:

  1. An orphaned product line can be a distraction that takes away from core business operations. 
  2. Funds allocated to an orphaned product could be used instead to build the core business or make improvements that are not in the current budget. 
  3. Another good reason to remove an orphaned product from your lineup is that, while it could ultimately be profitable with increased resources, the funds would be better allocated elsewhere.
  4. Your orphaned product could be profitable.  Some buyers, companies and private equity groups are looking for product lines they can use to augment their existing ones.  In fact, some buyers may even want to build a new business around a given product line.

Of course, it isn’t always as simple as “pulling the plug” and moving on.  It is important to step back and consider the negative impacts of jettisoning an orphaned product, such as the fact that the product line could have key employees attached to it.  Or there could be company culture issues related to removing the product, such as causing disruption within your company.  You must also consider if the orphaned product could ultimately play a role in the sale of your company.

At the end of the day, an acquiring company may feel that the orphaned product line is a great fit for their existing distribution chain.  Additionally, your offering might fit into a new product line that the acquiring company has launched.  It is important that you evaluate every aspect of an orphaned product before making the decision to remove it from your company. 

Understanding the needs and goals of your most likely buyers should play a role in your decision making.  Working with an experienced business broker is an easy way to increase your chances of making the right decision.

Copyright: Business Brokerage Press, Inc.

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Challenge and Opportunity in Online Customer Experience

A recent study by Wharton’s Jay H. Baker Retailing Center and WisePlum suggests rising consumer frustration with retail as shopping shifts online. The survey-based study, “The New Reality: Understanding the Retail Consumer Experience During a Pandemic,” finds mounting customer impatience and decreased loyalty. In a Knowledge@Wharton interview, the study’s co-author, Marketing Professor Thomas Robertson, says these findings are related to underprepared online shopping and loyalty program customer experience and the tech that underpins it.

The Challenge

We have written before about the importance of (and some ways to) deepen customer relations during this time. But Robertson raises an excellent point. “Loyalty programs will not compensate for poor service or a poor product. They will just add cost,” he says. “You have to have the IT in place. Point of sales data, for example, has to be in place for you to be able to use loyalty programs. And if you’re transitioning to online, you have to be ready for it. You have to design integrated online-offline programs.”

As health concerns ferry more and more commerce online, customers’ expectations for a positive virtual shopping experience are on the rise. But businesses have struggled to meet these expectation.

“It’s about a 10% increase in problems from before the pandemic to the middle of May, with some decrease in loyalty. And there is a difference,” says Robertson. “Before, when consumers had problems, the focus was in-store. They would have problems not being able to find things, or they would complain about the messiness of stores or that the salespeople were not helpful. As we got to May, all of this had changed, and what people were now sensitive about was having to pay for shipping to return things, that you needed a receipt to return things, and that the website was difficult to navigate. This seemed to suggest that as the percentage of online sales was going up, many retailers weren’t quite ready for the onslaught and had some trouble coping with it.”

The Opportunity

The takeaway, according to Robertson? “Service recovery is absolutely critical.”

There are some significant bright sides to this story. By smoothing out kinks in your online systems, you can really differentiate your business. There is also a tremendous opportunity in “transforming disappointment into delight.”

In Creating Great Online Customer Experience, a compilation of research by MIT Sloan Management Review (available for download here), Stefan Thomke writes about creating the kind of customer experience that stays with someone:

“When employees are taught to be in tune with the customer’s emotions, they can notice changes in emotional state and respond quickly. As their alacrity accelerates the shift from disappointment to delight, the intervention creates a sudden contrast that makes experiences sticky.  Magicians, who constantly think about the audience experience, understand the emotional value of rapid shifts from disappointment and confusion to happy resolution. They have developed techniques to change people’s emotional states. Momentary disappointment at failure to “catch” the magician quickly transforms into delight in his excellence. Disappointment to delight: Magicians know that this emotional transition will wow audiences more than a constant flow of technically perfect tricks. The former creates memorable moments, while the latter may cause eyes to glaze over.”

In upcoming posts, we’ll share more tips on online customer experience. Stay tuned!

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