Taking Ownership featuring Jim Gilliam with Montu Staffing Solutions
Written by John P. Palen for Minnesota Business Magazine January 2014
After years of rising through the ranks of a large corporation, an ambitious executive will eventually ask the question: "What's next?"
A less-traveled path is to start or purchase a business. It sounds reasonable, but executive and owner roles have less in common than you think. One successful executive is facing that reality right now after leaving SuperValu, Inc. to own a small, Minneapolis-based staffing solutions provider.
Jim Gilliam joined SuperValu in 1982 as a division controller in Ft. Wayne, Indiana. Over the years, he worked his way up through several positions of increasing responsibility to earn the role of President for the company's Northern Region. He oversaw 11 distribution centers in nine states comprising of 4,000 employees. His success included many incentives to stay and enjoy what he'd built, but something pulled him to rethink his future.
"I always had a desire to own my own business," Gilliam said. "Over the last few years of industry and economic changes, it seemed right to start looking for that opportunity."
Gilliam researched online and contacted business brokers. He connected with Dan Mulvaney, a business broker with Sunbelt Midwest who told him about Labor All Personnel. "When I found Labor All, I loved that it was in the people business. I love managing people and I've always been naturally good at it."
Under its second owner, Labor All had over 16 years of experience in staffing services to the industrial sector - representing hundreds of welders, truckers, machinists and other skilled and general labor to fill contracted or permanent staffing needs at companies throughout Minnesota. Researching further, Gilliam discovered a base of 10 employees who matched his profile for growth.
Knowing he could potentially take a major pay cut to pursue ownership, Gilliam put his financial ducks in a row by researching cash available in the company and financing options. Then he looked at the operational cash flow required as well as his personal cash flow to sustain him through the career transition.
Part of negotiations with the previous owner also entailed a month or so of on-boarding for Gilliam to observe operations and tailor his methods from there. The purchase closed in April 2013. One of Gilliam's first changes was an incentive plan of monthly bonuses for hitting sales goals, as well as a profit bonus at year-end.
As of October 2013, the company has been renamed Montu Staffing Solutions and sales are showing 28 percent growth from the previous year. The company now has four offices, in Columbia Heights, St. Paul, Anoka, and most recently Hopkins.
"My goal when I bought the company was that we'd at least match the previous year's performance," Gilliam says. "I freed employees to step up, that I trusted and expected them to do their jobs to the best of their abilities, and they did."
Using his skills in people management, Gilliam has been less hands-on than the previous owner. However, this has freed him to focus on learning the business side of the company - areas that he never oversaw in the corporate structure at SuperValu. The responsibility is on him now to understand unemployment benefits, taxes and banking.
Transitions from executive to owner aren't easy, but Gilliam's leap is showing promise. As a result, Montu Staffing Solutions has a new chapter to write after almost two decades in business.
Tips for Second Career Entrepreneurship
- Perform due diligence by reviewing financials, revenue by customer, legal issues, and employees to make sure it’s the right opportunity.
- If it makes sense, negotiate a continued relationship with the seller as a guide to running the business for the first month or so.
- Create incentives and policies that motivate employees to step up under new ownership.
- Learn the business side of the business: payroll, taxes, benefits, employment law, etc.