30 / 108
has changed since the 50-50 commission split
was first implemented, so you should consider
the advantages of changing your structure
accordingly.
4. Assemble a board of advisors
(BOA).
Often, when facing tough decisions,
business owners struggle to find relevant
advice. One of the most valuable resources
business owners have is each other. A board
of advisors is simply a group of trusted col-
leagues and/or friends whose opinions you
value. A BOA can help with all sorts of issues
from simple human resources questions to IT
questions. One tip: When assembling the
BOA, try to find people who have knowledge
in areas where you might be lacking. For
example, if you hate computers, then find
someone who is strong in IT. Once you have
assembled the BOA make a schedule to meet
quarterly and discuss the issues or decisions
you have been struggling with. One question
about the BOA that always arises is how to
compensate them. Many colleagues will serve
for no charge assuming the commitment does
not become burdensome.
3. Write a policies and procedures man-
ual.
While it won’t be your go-to book on your
next vacation, a policies and procedures manual
might just be the most important book you’ll
ever own. In the current legal and regulatory
climate, it is necessary to have a guide that
documents and defends both the actions of a
company and its employees. The operative
word is “guide.” A good policy will not lock
you into a rigid pattern of decision making.
Rather, it will provide an outline for handling
company issues as they arise. While premedi-
tated control of all company decisions is
unlikely, a framework for decision making in
important or particularly problematic areas is
necessary. A copy of the manual should be pro-
vided to every employee and a documentation
of their receiving it should go on file. For a list
of important items to include, see the sidebar.
2. Develop a succession plan.
Lack of a
plan is one of the most costly shortfalls we
see in the industry. Whether your company
consists of one or 1,000 employees, a succes-
sion plan is the best way to preserve and real-
ize the value you have built in your company.
Many people think a succession plan only
addresses what to do when an owner decides
he or she wants to retire. However, it can also
address the development of talent and leader-
ship skills within an organization. Effective
and proactive succession planning not only
sets an outline for future events, it defines the
steps and strategies necessary to achieve com-
pany goals. Even in a situation where the
company is sold to an outside party, most
buyers want strong salespeople in place for a
seamless transition. Because this type of plan
takes time to cultivate, it is imperative to start
the plan years before the transition actually
takes place. If you are lost in where to get
started, it is best to start by daydreaming.
What do you envision for the future of your
company? What practical steps can you take
to start to get there? Documentation, while
the first step, is only the beginning of the
process. Start with implementation of the
goals and policies that will strengthen your
company from the inside out. Not only will
the company be better prepared for the
future, but it will also be filled with motivated
and well-rounded employees.
1. Consider non-compete and non-
solicit agreements.
While sometimes con-
troversial in the level of enforcement, a non-
compete or non-solicit agreement can be one
of the most important ways to protect your
sales, trade secrets, good will and overall
investment in employees. Many business
owners question the validity or enforceability
of the contracts. It is best to consult legal
representation because laws vary from state to
state, but the following factors are most often
discussed when determining enforceability:
length of time, geographic area, employee vs.
contractor status, compensation for signing,
overall restrictions and reasonableness of con-
tract. Courts will look at these issues and how
they relate to the overall protection of the
employer’s legitimate interests. Regardless of
enforcement questions, there is no doubt that
every company is better off executing non-
compete and non-disclosure agreements with
every employee on the date hired.
POLICIES AND
PROCEDURES MANUAL:
WHAT TO INCLUDE
1. Company Mission Statement
2. Sales Policies
• Sales order completion
• Artwork procedures/cost
• Extra charges
• Order changes
• Credit policy/terms
• Preferred suppliers
• Gross profit percentage require-
ments
• Commission policy
3. Accounting Policies and
Procedures
• Internal controls
• Management report /frequency
• Reporting frequency
• Bank requirements/reporting
• Government requirements/
reporting
4. IT Policies and Procedures
• Routine backups
• Obsolescence policy for com-
puters
• Software types and updates
• Key internal and external contacts
5. Employee Policies
• Compensation
• Standards of conduct
• Non-disclosure agreements
• Work schedules
• General employment information
• Safety and security
• Employee benefits
• Employee leave policies
26 •
PPB
• DECEMBER 2014
INNOVATE
Jamie Watson, CAS, BASI, is a
financial analyst with Certified
Marketing Consultants, Ltd., a
PPAI business services mem-
ber. She has been involved in
various aspects of finance and
accounting for more than 12
years and has provided con-
sulting services for both suppli-
er and distributor companies
for more than seven years.
Watson graduated magna cum
laude with a Bachelor of
Business Administration from
Stetson University and earned
her Masters of Accountancy
from Manchester College. She
qualified as a CPA in the state
of Indiana where she worked
for the regional accounting
firm of Alerding & Co., LLC
before joining the promotional
products industry.
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