Small Business Makeover Recommendations Working Document, Achatz Pies

Following meetings with the owners of Achatz Handmade Pie Company, the sponsors made the following recommendations:

Sponsor Company Name: Foster, Swift, Collins and Smith, PC
Frank Seyferth, met with Achatz and was able to prepare and execute the following legal documents:

• Last Wills (for owners)
• Revocable Living Trusts
• Durable Powers of Attorney
• Medical Directives
• Documents to fund their business and certain parts of their real estate to their Trusts

Recommendations for Future

• Possible re-organization of the business.

Sponsor Company Name: Foster, Swift, Collins and Smith, PC
Rebecca Davies had an initial meeting with Achatz, regarding hiring practices

Recommendations for Future

• Draft employee handbook and conduct follow-up meeting
• Draft memorandum summarizing hiring practices and future recommendations

These will provide a road map for employees, help provide consistency for supervisors and showcase all the benefits that Achatz already provides to its employees.

Sponsor Company Name: Hennessey Capital
Jeff Wright conducted an initial meeting with Achatz and has made recommendations for two separate scenarios for future growth of the company that he has shared with the owners.

Sponsor Company Name: Mastermind Solutions, Inc.
Renee Robertson completed an initial meeting to review the Human Resources Audit Questionnaire, existing Human Resource documentation, and an actual personnel file.

Mastermind Solutions would like to implement the use of 3-ring binder which includes in each section:

• Summary of what's included, along with additional information that may need to be considered by the client, or stating of information that is not included
• Current policies and/or forms
• Recommended policies and/or forms
• Resources and general information pertaining to that section

Topics addressed by Mastermind Solutions were; recruiting, new hires, management, discipline, termination, miscellaneous.

Sponsor Company Name: Payments Authority
Amy Smith, Denise Bahs, Anne LaPine, completed a Payments Process Review and Analysis

They met with Achatz to review their current payment and financial processes and discussed key areas for change:

• Identified areas of risk or liability
• Outlined the benefits of knowing the balances in all accounts at any given time
• Explained why they should monitor all account activity on a regular basis
• Reviewed their various payment and collection methods and introduced alternative automated solutions for which they could take advantage.

Recommendations for Future:

• Questions to ask their financial institution (or others) when looking to automate processes and implement new applications.
• Recommendations for a Direct Deposit marketing campaign to increase its use by employees. Offer key messages, promotional materials and on-site assistance from The Payments Authority staff.

Payments Authority was able to make recommendations for Achatz in several areas:

PAYROLL

Currently, there are approximately 90 Achatz employees. Direct Deposit of payroll is offered through payroll provider. Only 25-30% of employees use DD, which has been offered for 4-5 years. Almost 100% of employees are hourly with varying wages each week. In addition to employees at the plant, they have 6 retail locations, so those who get paychecks get them Wednesday night.

Payments Authority recommends a campaign to promote Direct Deposit to employees. Look for ways to encourage use, especially by employees at retail locations. It is also advised to consider establishing a separate account for payroll and human resources in order to segregate this activity from general operating expenses.

RETAIL OUTLETS/CONSUMER SALES

Currently, there are six retail locations and one website as outlets for consumer sales. Achatz accepts credit cards, cash and checks. American Express is accepted at four locations. The website accepts PayPal transactions. The majority of transactions are credit/debit card.

Using electronic transfers will provide greater flexibility for accessing funds or determining whether short term funding is needed. Incoming funds from the various store locations can be identified separately so that reports can be pulled to see how each outlet is performing from a revenue prospect. Credit/debit card transactions should also be posted.

ACCOUNTS PAYABLE / RECEIVABLE

Achatz uses QuickBooks for their accounting system. Invoices/bills are entered twice per week and checks are cut. The approval for payment process seems somewhat cumbersome as the paperwork is touched several times by several people.

Payments Authority recommeds a "deeper dive" on payables. Segregate by: overhead (electric, gas, insurance, accounting, legal, telecom, etc) and supplies (fruit, flour, boxes, thins, etc) . Post charges to multiple general ledger accounts to separate these very different payables. Identify those "suppliers" who can either debit the Achatz account, or who are willing to receive a credit for goods or services. Power/utility companies can invoice electronically and debit on due date via Direct Payment.