By Katie Logisz
June 21, 2004

Five years ago, the United States Conference of Mayors partnered with American Management Services, a management consulting firm, to create PartnerAmerica®. This partnership is the first public-private endeavor to benefit small businesses across the United States. PartnerAmerica® has brought together government agencies alongside private expertise to allow mayors to successfully assist the small businesses that drive their local economies. Recently George Cloutier, President and CEO of American Management Services, and the Chairman of PartnerAmerica® sat down to answer some questions about the specific goals and practices of his company as a partner to the United States Conference of Mayors.

AMS started with a dream. It has long been my dream to help the small business community. I had worked in the small business community for years, and I realized that there was no consulting company that really paid attention to the small business owner.

I did my thesis at Harvard Business School on small business. From there I went out and began my career, but this idea of assisting small business owners was always in the back of my mind. In March of 1986, I started American Management Services with the goal of helping the small business community.

The business survey is one of the greatest values a small business can take advantage of. It is fifty to one hundred hours of a senior executive analyst coming into a company and observing the inner operations. The senior executive analyst has twenty to thirty years of experience. The analyst has owned a business, run a business, and managed a business. This analyst has worked in the sales force and has been responsible for the financial aspects of a business. The senior executive analyst goes into a company and spends fifty to one hundred hours over three weeks examining areas to help improve operations, sales and marketing, financials, and reporting. At the end of the day, the goal is to identify issues to help improve the business. The survey is really quantified into three main areas: improving sales, improving profit, improving cash-flow. All of these areas tie into improving the quality of life for the small business owner.

American Management Services does what is right for the small business. At the end of the day we are hired to help an owner improve his or her lot in life.

At this point we've conducted almost 7,000 surveys, and at any one point we are probably managing between thirty and fifty consulting assignments.

The first thing we will do is take control of banking, because typically that is the biggest headache an owner has. Most of our clients, when they-re in that four to ten million dollar range, are strapped for cash. The bank is pressuring them, their vendors are pressuring them, their customers are pressuring them, their employees are pressuring them, so we take over and we deal with the vendors. We deal with the banks and we deal with the unions — everything to take the squeeze of cash-flow off their chest. We allow them to focus on whatever will help their company the most, which is typically driving sales. They know how to sell their widgets better than anyone. The second thing is organization. You cannot affect a change in culture in an organization if you do not have the right people in the right places. Many of our clients have great people in the wrong places — or just the wrong people. Most owners do not know how to train their people. Those are the kinds of things we do right out of the gate before we start implementing huge organizational changes.

Most owners think they can borrow their way out of problems, which they cannot. Most of the time the banks will go along with this idea because the bank is already in for $800K, so they are afraid not to go in for the next $100K or $200K. The second biggest problem that I see all the time is that every owner is a dreamer. They are entrepreneurs and dreamers. They think that the next sale is going to fix everything, and if the next sale doesn't come, then that is a problem. A lot of times these next sales come, but they-re not exactly profitable. If a company doing $5 million a year is not profitable now, then why would the next sale for $200K help them? It will not. The owners do not know how to manage, and have never been taught how to manage. Many small businesses took off in the 1980s and 1990s because of the economy, and the small business owner is not trained to manage a $5 million company.

I think that some companies can implement some improvement on their own. However, I think that very few can do all of it on their own. What we bring to the table is a discipline that says, "We-re going to change things now." Owners have the habit of saying, "I-m going to do it, but I-ll get to it tomorrow." It does not happen. We approach a problem or an issue by saying, "Today we-re going to accomplish these twenty things." The worst of the twenty, those four hardest things, are what we will do first. Owners take that list of twenty and want to do the easiest things first. We don't believe in that. We-re going to make them eat their broccoli now. We-re going to make them attack their issues and teach them how to manage.

AMS has been helping small businesses for over 18 years. At the last tally, savings were valued at over $1 billion. Last year alone, savings topped $120 million.

Typically, the Business Survey would bill between $16-18K. However, the fee we charge through the PartnerAmerica® program is $500. We never ask a client to hire us. If we-ve done our job well and they want help, we stand ready. If they go in another direction, we give them their report, we wish them the best of luck, and we never contact them again. We are not out there trying to chase companies down. Consulting charges vary from company to company, as every client is different.

The only time our approach won't work, is when ownership or management won't let it work. We are human, and we make mistakes, but the only time we truly fail is when there is a tremendous disconnect between management and consulting firm on what we are going to accomplish. On a rare occasion a client will say that what we are trying to do is too hard and that's okay. Our discipline is not to break even but to improve profit everyday. No one should be managing a Fortune company that can't manage to a profit.

For more information on PartnerAmerica®, please contact Managing Director Jeff Bean at 1-877-778-6726 or email him at jbean@usmayors.org.