As the promotional products industry continues to change and grow, more and more people are looking to either sell their promotional products business or align with someone else. This may have something to do with the fact that many experienced promotional products owners who fit within the Baby Boomer generation are hitting retirement age. Or it may be that in today’s hectic environment, many owners and independent salespeople are tasked with simply doing too many jobs at once. Wearing several hats like bookkeeper, human resources, IT person and supplier negotiator not only keeps people from doing what they love – selling – but it also can be a huge time burden and stressor.
If you find yourself considering aligning your business with a partner or selling your business, there are a number of questions you might ask any prospective buyers or future partners.
1. What’s your company’s financial information from the last two or three years?
This can come in a number of different formats. It’ll be beneficial for you to have a complete picture of the company’s financial situation. You may also consider looking to an outside source like Dun and Bradstreet to provide you with the company’s credit rating and financial risk assessment. This is key, as you don’t want to make a change and partner with a company in financial distress.
2. What’s the history of the company?
Is the firm well-established? One great resource for this information is suppliers. Check with some of your supplier reps to get an honest opinion of what they know about the company. Have they heard good things?
3. What type of culture does the company you’re considering have?
For example, does it have long-term employees or is there a lot of turnover? Loyalty among existing employees and salespeople is very important. It can speak to both the amount of expertise and to the innovation within the company. And, most importantly, make sure the culture and values match yours.
4. Is the commission structure stable?
If you’re considering partnering with a large distributor, be sure to ask whether or not there have been recent changes in commission structures or compensation plans. Have things stayed the same or are there constant changes to the rules? Too many changes may indicate that deal you make today may be gone tomorrow.
5. How flexible is the company?
Could it meet your needs either as an employee or an independent representative? If you’d have an employee option, are benefits available, such as group health, dental and a 401(k) plan? If sales meetings, contests and other incentives are important to you, consider asking about those benefits as well.
6. How will you be compensated?
Your compensation plays a huge role in determining the right partner. Some questions to ask include: How and when will you get paid? Are there profit guidelines that must be met? Who determines sales pricing?
7. Can you keep your company name?
This may be important to you if you have strong name recognition in your market and with your customers.
8. Is there a sales contract or agreement?
If so, is there a non-compete provision? Are there financial penalties imposed if you want to leave and stay in the industry selling to your existing accounts?
9. What would the sales process be going forward?
Does the company have an easy and intuitive order-entry platform? What type of sales and marketing support is available, and at what cost? Is there assistance provided with product research, customer service, billing and working with suppliers?
10. How easy would it be to transition your business?
For example, will you have IT support to learn new technology? Are there steps in place to transition your clients to new ordering and billing processes? Who’ll be there to answer your questions? Being comfortable with your new partnership or alliance is imperative.
Understand that the decision of whether or not to make a move can be an arduous one. Knowing the answers to these questions can help ensure that you’re armed and prepared with as much information as possible to make an educated and thoughtful decision. The above insights come from the team at The Vernon Company, founded in 1902. It employs over 265 account executives, 135 administration and production employees, and serves more than 25,000 customers from its Newton, IA, corporate headquarters. To learn more, visit www.lovevernon.com.