ASCMA is holding company, and essentially a special situation, that I believe shows up on a lot of deep value screens.  The purpose of this post is to provide an outline of the situation and a baseline valuation analysis of the company.

Business overview

Ascent Media Corporation (“Ascent”) was spun off to the holders of Discovery Holding Company in September 2008.  Ascent’s primary assets are a great big pile of cash (more about that later) and a subsidiary, Ascent Media Group (“Ascent Media”). This subsidiary provides creative and technical services to the media and entertainment industries through its two operating segments: Creative Services and Content Services, from more than 40 facilities. The Creative Services group (35% of revenue) provides post-production work to help turn principal photography into a final products (feature films, television programs, commercials and new digital media). The Content Services group (65% of revenue) provides facilities and services necessary for media owners to optimize, archive, restore, manage, reformat and repurpose completed media assets for distribution. Ascent employed about 3,100 people in 2008, generating  revenues of approximately $600 million, or just over $190,000 per employee. The company’s investor relations website is here.

Neither of the company’s business segments seems particularly attractive, and financial performance has been weak over the past several years. On a consolidated basis from 1/1/06 to 9/30/09, Ascent generated $173.2 million of EBITDA and had capital expenditures of $176.4 million… not exactly a free cash flow powerhouse, and it’s hard to justify the capital expenditures as an investment in growth since annual revenues have declined by around 20% (most of the decline came recently in 2009). At least management has cut costs fast enough to keep the company close to cash flow break-even as revenue has declined.

I don’t claim to have any deep knowledge of the segments of the media industry in which Ascent competes, but from the financial stats and the related disclosures in Ascent’s filings, their markets seem highly competitive, require substantial capital investment, and offer poor returns on capital. There also appears to be a secular decline in some of the traditional media services as technologies evolve, and the company has a lumpy revenue base for some of its services, with customer concentrations (Motorola at ~10%) and business that is performed on a one-off project basis (rather than a more attractive recurring revenue stream).

Situation highlights

My potential interest in ASCMA is less related to its current business (which seems far from promising), but instead focused on its valuation relative to its substantial cash position. As noted earlier, Ascent was spun off from Discovery in September 2008. There are two classes of stock in Ascent – A shares (ASCMA) and B shares (ASCMB). While they are economically equivalent, the B shares have ten votes for every one vote of the A shares, and they are freely convertible into A shares. As of 10/31/09, there were 13,427,479 A shares and 659,156 B shares outstanding, implying that the B shares have close to 33% of the vote. Over 90% of the B shares are owned by John Malone, giving him 31.3% voting power. Significant institutional holders of the A shares include FMR (9.9%), Gabelli (9.6%) and T. Rowe Price (9.9%). The voting control is concentrated with Malone/Liberty (35.2%), FMR (6.7%), Gabelli (6.4%), and T. Rowe Price (6.7%), giving these top holders 55% of the voting power.

Along with the A/B voting structure described above, Ascent is incorporated with plenty of anti-takeover bells and whistles: there is a poison pill (board can issue blank check preferred), staggered three year board terms, limitations on certain shareholder actions, and requirement of 80% shareholder approval (or 75% board approval) for a sale/merger. Gabelli sent a letter on 10/1/09 asking for the board to remove the company’s poison pill. However, it should be clear from the above that this is John Malone’s show, and you are largely along for the ride unless there is a major shake-up in this governance and voting arrangement. On the plus side, three sophisticated institutions are obviously intrigued enough that they’ve bought right up to the 10% threshold.

Net asset value

Based on the balance sheet analysis shown below, I peg the reproduction value of Ascent’s assets at approximately $38 per share as of its 9/30/09 financial statement. I believe that this analysis is conservative on several fronts. All deferred tax assets were written down to zero given the current loss-generating status of the operations. Clearly these assets could have value as a tax shield if a profitable operation is acquired or financial results improve, but I don’t believe that concept contributes to the tangible margin of safety for an investor buying shares in the current business. I put arbitrary discounts of 25% and 50% on net PP&E and other long-term assets, respectively. On the net PP&E, I believe this adjustment should be at least adequate based on the proportion of PP&E invested in land (over $36.7 million as of 12/31/09) and the relatively fast depreciation (3 years) on the computer hardware and software that accounts for a high proportion of the capital expenditures.

Earnings power value

My earnings power valuation is essentially a break-up value of the two segments, Creative Services and Content Services, then adding back my estimation of the truly excess cash amount of $323.4 million. My estimate of the excess cash is derived as the excess of balance sheet cash ($337.4 million) over my estimate of $14.0 million of cash required to operate the business (swag at 3% of estimated 2009 annualized revenues of $466.5 million). The analysis below excludes corporate SG&A and capital expenditure spending, which is consistent with the fact that a reasonable price for these businesses would probably only be realized from a sale to a competitor that wouldn’t need this duplicative corporate overhead. A multiple of 6x EBIT (which equates to about 3x EBITDA in this case) is relatively conservative, and reflects the fact that while the economics of these businesses aren’t highly attractive, an acquirer could likely realize certain cost savings and take a meaningful competitor out of the market. The resulting valuation is actually below the balance sheet net working capital and PP&E values of the operating businesses, which serves as another check that these multiples probably aren’t wildly optimistic.

Growth value

I have intentionally omitted a growth value analysis as revenue and earnings growth have not been displayed over the prior few years.

Valuation continuum and margin of safety assessment

The chart below summarizes the valuation work above compared to the current trading price and targeted entry level. The calculated EPV is actually less than NAV, consistent with the fact that the operating business generates minimal free cash flow, and probably doesn’t generate high enough returns on invested capital to attract new entrants to the market at this reproduction cost.

Summary and conclusions

Based on the current trading level of approximately $25, ASCMA is trading at a discount of 25% to 33% of the base-case valuations calculated above. Valuing the excess cash in the business at par, you are essentially paying about $2 per share for the Ascent Media businesses that may be worth $10 to $14 per share based on the calculations above. This margin of safety might be adequate for the value investor. As a positive, it does seem like the downside is well supported by $23 in truly excess cash per share.  However, given the control dynamics discussed above, it will take more than a little bit of shareholder grumbling to unlock value if the stock doesn’t close this gap – the Malone/Liberty group should be viewed as extremely sophisticated in terms of the ability to defend itself from unwanted activism. The outside risk is that this control group either does nothing or enters into a deal (or series of deals) that stands to destroy the value of the $23 per share war chest, though an accretive transaction could obviously serve to increase value.  The continued deterioration of the Ascent Media operating businesses also stands to erode the margin of safety if no catalyst occurs and/or financial results don’t improve.  Not an easy call.

As of the date of this posting (1/2/10) a family member of the author owned shares of ASCMA purchased in October 2009 at a price of approximately $25.40.

AFCE is a stock I bought into for a family account in October 2008 and exited in October 2009, producing a long-term capital gain of over 40% for a one year holding period.  The purpose of this post is to update my financial analysis of the company and to stay current should another opportunity present itself in the market price of the stock.

Business overview

AFC is the franchisor of Popeyes restaurants (it used to also own brands such as Church’s Chicken and Cinnabon, but via various transactions is now solely Popeyes).  Founded in New Orleans in 1972, Popeyes is the second largest chicken fast-food franchise with 1,918 locations (vs. over 15,000 for KFC) and $1.7 billion in system-wide sales.  Only 37 stores were company owned as of 10/4/09.  The company’s investor relations website is here.

If executed well, the franchisor business model is attractive: diverse, relatively stable revenue streams, strong profit margins and very modest capital expenditure requirements lead to good free cash flow potential.  An entrepreneur who would like to own a Popeyes pays the company a franchise fee ($30,000) and development fee ($7,500 domestic, more internationally) for the right to operate in a specified location.  Going forward, the franchisee then pays the company a 5% royalty on sales and contributes 3% of sales to an advertising fund.  They also agree to operate along company standards, adhere to the menu, and meet all other system requirements.  The franchisee is responsible for all of the costs of opening and operating a location, such as the building, equipment, employees, food costs, etc.

Becoming a franchisee allows local operators to enter the market with a widely recognized brand, professionally managed menu and image, and enjoy economies of scale in food purchases, advertising, etc.  Since the capital intensive ownership and relatively low-margin operation of the individual restaurants remains with the local ownership, the franchisor has relatively low capital expenditure requirements and can generate substantial free cash flow if the underlying units remain healthy over time.  In the franchise world, company-owned restaurants are generally units that were taken back from franchisees that didn’t succeed as operators (the fewer company-owned units, the better is always the rule in our opinion).

Notes on the business

The management team seems to have done a capable job even during a dismal economic stretch in 2008 into 2009. Same store sales have stabilized (though expected to be flat for FY 2009 they are performing well versus their peers), the number of company-owned franchises has been managed down, and it looks like the franchise unit count should continue to rise modestly.

Excluding the company-owned locations, AFC employs only about 150 people.  Based on annual franchise revenues of approximately $85 million, that works out to revenue of over $566,000 per employee, showing the strength of the franchise model.  It looks like there was an upgrade in the leadership in the 2007 timeframe, and the current team does appear to have substantial restaurant experience.

The company does have almost $90 million in debt.  However, its total leverage ratio was only 2.14x (total debt/EBITDA) as of 10/4/09 and has been decreasing due to debt repayments from free cash flow and asset sales (company-owned stores).   There is an excess cash flow sweep and covenants on the debt restrict share repurchases if total leverage is above 1.75x.

Per Yahoo! Finance, the company is 82% owned by institutions and mutual funds.   Largest institutional owners are Chilton and Columbia Wagner.

Net asset value

Based on the balance sheet analysis shown below, I peg the reproduction value of AFC’s assets at approximately $5.80 per share as of its 10/4/09 financial statement.  The company only spends about $0.5 million in capital per year on franchise operations, so the majority of the PP&E is tied up in the company-owned restaurants.  As AFC  has reduced its company-owned restaurant count from 55 to 37 this year, it has actually generated a gain on sale (rather than recognizing a permanent loss or impairment vs. the carrying value of these assets).  Based on this fact, I believe leaving the PP&E unadjusted is reasonable approximation of the reproduction value of these units.

Earnings power value

The calculation of the earnings power value will focus solely on the value of the franchise operations, then adding the PP&E in at book value at the end of the analysis for a complete sum-of-parts valuation of approximately $9.00 per share.

Growth value

I have intentionally omitted a growth value analysis as revenue and earnings growth have not been displayed over the prior few years.

Valuation continuum and margin of safety assessment

The chart below summarizes the valuation work above compared to the current trading price and targeted entry level:

Summary and conclusions

AFC’s financial performance has been steady, if unexciting, over the past few years.  The franchisor business model (which I calculate at well over 90% of the enterprise value in question) produces relatively stable, recurring revenue from a diverse base of customers, as well as high free cash flow requiring minimum working capital or capital expenditures.  The “customers” (the franchise owners) operate under long-term agreements, and have substantial capital invested in the local operations.  While the fast food marketplace is very competitive, Popeyes is an established brand with meaningful franchise value that doesn’t need to rely on any particularly trendy concept for growth.  It seems that the company has the potential to produce an attractive return on invested capital over time.

While AFC doesn’t appear to be overvalued as of the date of this analysis (it closed at 8.16 on 12/31/09), a suitable margin of safety does not appear to currently exist for a value investor.  I’ll be adding this stock to my current screens and look to potentially build a position should the stock fall back closer to $6.00 (it traded between $5 and $7 for most of the first six months of 2009, with a dip below $4 during the March 2009 market lows).

As of the date of this posting (1/1/10) the author had no position in the securities of AFCE.

DARTON believes in the power of knowledge.

Our team of project professionals and consultants are known for doing their homework and researching DARTON’s clients prior to pre-engagement interviews and joint meetings.

Last month, BusinessWeek published a helpful article that spotlights nine ways to conduct effective research on a company. 

We like the article because it includes tips for conducting research using social media tools in addition to the “old standards”. 

Check out the article at http://www.businessweek.com/managing/content/oct2009/ca20091027_294979.htm?chan=careers_managing+your+career+page_top+stories.

WikiWealth.com, a user generated provider of interactive investment analysis, initiated coverage of Qiao Xing Mobile (QXM) with a $15 price target giving QXM an estimated 250% investment potential. Wikiwealth.com’s coverage of QXM includes a comprehensive analysis of its short and long-term investment potential, company description wiki, real time company news, telecom industry analysis, SWOT analysis, WACC discount rate computation, cash flow analysis, comparative valuation approach, and Buffett-inspired valuation conclusion.

A summary of the QXM research report is presented below:
Description: Qiao Xing Mobile Communication Co. (QXM) develops and sells mobile communication devices and accessories for mobile cellular technologies in the People’s Republic of China.

Investment Conclusion: A conservative estimate of value indicates that Qiao Xing Mobile has a $15 price target and over a 250% short-term investment potential. The long-term potential has positive ratings on business simplicity and the SWOT analysis.

Industry Analysis: The telecom industry performs best during the early stages of bull markets. The largest telecom companies have a weighted average potential of 54% and the most undervalued telecom stocks have an average potential of 123%. Based on the telecom industry SWOT analysis, the long-term outlook for the telecom industry is positive.

Valuation Analysis: Each quantitative analysis features a Wikiwealth Innovative Experiment Mode (WIEM) where users can experiment with QXM’s valuation analysis. A Discounted Cash Flow analysis produced a $17 price target and 280% investment potential; a Comparative analysis produced a $14 price target and 215% potential; Buffett valuation conclusion is a $4 price target and zero percent potential. QXM’s WACC discount rate conclusion was 12%.

SWOT Analysis: QXM has more strengths than weakness and more opportunities than threats, which results in a positive SWOT analysis. The full investment report has full details for the SWOT statements listed here: SWOT Strengths: emerging market phone development, low cost input, take-over candidate, country market leader; SWOT Weaknesses: company resources; SWOT Opportunities: domestic market potential, Chinese currency revaluation, mobile device growth, government bias, supply chain cost reductions, high-end phones, emerging markets, smart phones; SWOT Threats: counterfeit products, iPhone.

The full valuation report, found at http://www.wikiwealth.com/research:qxm, features detailed analysis of each section listed above. Users can also use the WIEM to experiment with the analysis and create their own conclusions and add their input to improve the investment community’s analysis of Qiao Xing Mobile (QXM).

About WikiWealth.com: WikiWealth.com mobilizes the diverse talents of Main Street investors to produce interactive research reports of the highest quality, clarity, and transparency. The wiki-based platform – popularized by Wikipedia – gives investors the ability to add content, openly discuss opinions and influence investment ratings. Control your future with the world’s only interactive investment analysis. http://www.wikiwealth.com/. Get our latest investment alerts by following us on WikiWealth Twitter. Facebook Interactive Fan Page: Latest WikiWealth News.

Disclosure: WikiWealth.com is not a registered investment advisor. Nothing contained in any materials should be construed as a recommendation to buy or sell any investments.

Hi, if you are out job looking

Often, they will ask you how much money you want earn.  It can be a complex question, and it helps to know how much they typically pay for such a role.   You can likely get good info at these websites:

http://www.salary.com/

http://www.glassdoor.com/

I like Glassdoor personally, it has lots of very detailed info about wages at specific firms.  Salary.com is useful too, but the wages are more industry-based, rather than company specific.  Salary.com has excellent job descriptions.

The Professional Association of Resume Writers had a great conversation on their elist about how to identify companies in a specific geographic areas – like San Francisco metro and in a specific industry — life medical device or biotech – recently.

The ideas for conducting targeted searches were so good, I consolidated all the posts and am sharing the information here.

Linkedin: Create an account, if you don’t already have one. Log in, look for link to “Companies” across the top menu bar. From there search companies by zip code, industry, company size, and whether or not there are posting job openings.

Public Library: (Yes, the library). Locate The Standard Industrial Classification Manual (SIC). Please note, the SIC codes could be now be referred to as  North American Industry Classification System (NAICS).

The government assigned a SIC code to each industry. Ask the reference librarian for (specific to your geographic location) the equivalent of “The Greater San Francisco County Directory of Business and Industry” broken out by SIC code number.

The book is huge, but contains company name, company president’s name, street address and phone numbers for every business in the county that does business within that SIC code. There are letter codes for the size, number of employees, numbers of branches.

There is also ReferenceUSA. The database has a wealth of information on US and Canadian businesses. Try college and public library to see if they subscribe to this. Searches include business name, industry, geographical location and the like.

And another source for business information is the local Economic Development Corporation. They could have different names in different areas, but are usually affiliated with state or county government. Google: Economic Development Corporation and your geographic area and you’ll locate information about local organizations. They sometimes publish a list of employers and their sectors. Dig around for similar publications in different areas. The usually list employers by type and include other helpful information.

Search Chambers of Commerce for business lists online or call and ask. Search the Job Bank site for the state. (Enter “city name” as a keyword and the state abbreviation in Job Search box and you can locate job in your city.) There’s also information available on the One-Stop Web site. Here’s the link to the main map. Click on your state and explore.

You can learn a lot about a company and an industry prior to turning in an application, prior to an interview. In this day and age, there’s no reason for being uninformed.

NOTE: On November 30, 2009, The Recruiting Animal, @Animal on Twitter, did a great post on his blog about this topic. You’ll find even more ideas there.

Because LinkedIn and Facebook are referred to as social networking, most jobseekers use them primarily or even exclusively as networking tools.  However, social networks are valuable at every stage of the job search, not just networking.

Target identification.  Use the detailed profiles in LinkedIn to get a better understanding of different job functions and career paths.  If you think you want to work in corporate philanthropy, find people who have these jobs and review their experience, skills, and projects.  Use this as a guide to what you might need in your career, or at least as good issues to research.

Company and industry research.  Again using the profile data, pay attention to how people talk about their work.  The projects people are working on are invaluable clues to deciphering what their company exactly does, especially when it is a small, privately held company with little published information about clients or projects.  Group Discussions are another way to get a sense for a company or industry.  Find a company alumni group or industry niche and follow the discussions or ask questions out right.

Salary data.  Use the Q&A function or specific Group Discussions in LinkedIn to collect data on salary, lifestyle, growth prospects, and other useful information for your own offer negotiation.   Because so many geographies and industries are represented on online social networks you can specify exactly what you are looking for and likely find a close proxy.

The following was submitted by Caroline and I would now like to share with you.

Your resumes have gone out, the phone calls have come in and finally… you’re gearing up for your first interview.  Now’s the time for you to bring your qualifications to life and put a smiling, eager, confident face to the name you so proudly displayed in the header of your cover letter.

You might be thinking as long as you look ironed, cleaned and well-kempt, the interview will be cake. Think again, my friend!

First interviews are critical for establishing the possibility of your future with the company in question. As such, they should be taken seriously and prepared for intentionally.  Interview 101 boils down to common sense: be on time. It’s hard to stress the importance of this cardinal rule; but equally difficult to emphasize the damage that an oversight in this arena can create. Timeliness is not only an indication of your level of responsibility and capacity to meet deadlines; it is also a sign of respect. The interviewer has a schedule to keep. You are but a single part in his or her very full day. Do what you can to show them that you realize the demands they are under and that, starting now, you can be a positive part of helping them meet every one of them.

Timeliness is important, but just step one in this initial interview phase. You should take this opportunity to showcase that you not only know your own talents, skills and experience, but you are well aware of the company’s accomplishments, goals, and trends. Research the history of the company; brush up on any recent developments or additions and make yourself aware of the company’s overall philosophy. By doing so, you will be better prepared to link your own aspirations and qualifications to the needs of the open position. Be specific! Know enough to be able to converse beyond generalities.

Part two of your research should include preparing questions to ask the interviewer. It’s sadly unimpressive when it comes to the time for your own questions and you have none. Think through the position—what do you want or need to know in order to perform the proposed responsibilities? What are the expectations from your potential superiors? What are the possibilities for development and growth?

Remember—these questions aren’t just for show or to impress. This interview is as much about you getting to know the company as it is a chance for them to size you up. Regardless of the salary, benefits or other perks that this job may bring your way, if you walk into a situation blindly or without fully understanding the role you will play or the environment you will be in, chances are, the working relationship may be short-lived or, at best, frustrating and unsatisfying (And you didn’t just get through all those eight-o-clock classes to be frustrated and unsatisfied!).

Finally, when you are preparing for your initial interview, remember to dress and present yourself in a way that is impressive, complimentary to the company’s culture, but also representative of who you are. Your professional ventures should not be a masquerade. You need to be honest about where you come from, your past experiences and your personality. Too much of your life is spent in the work place to make it an arena for a façade.

In short, heed the clock, know what you’re walking into, prepare questions that will help you evaluate the fit and be yourself. Of course, the most polished, professional version of yourself… but yourself nonetheless. Interviews are a two-way street. Do your part to contribute to the process honestly and thoroughly. And then, engage in the process. Remember… regardless of the outcome, no interview is a wasted opportunity. You will always learn more about yourself, how you relate to others and your personal and professional goals.

So congratulations on the call-back… and get to work! This is just the beginning!

Again, thank you Caroline for your insight and no doubt many of our followers will benefit from your comments.

Danny Huffman, MA, CPRW, CPCC, CEIP
dhuffman@careersi.com

www.linkedin.com/in/dannyhuffman
Education Career Services: www.educationcs.com
Career Services International: www.careersi.com

I know, you thought your days of doing homework were long past you, but when you are searching for a job, you are always doing homework. If you get a phone call requesting and interview at XYZ company, your assignment begins now.
Before you hang up: Get as much information as you can about your interview.

Who are you going to interview with?

What is the title of this person? (HR Specialist or Hiring Manager?)

Will it be a group interview?

Where are you located? (Unless you are very familiar with the area, this can be quite important, since some large companies have multiple buildings on their campuses.)

Get on the Internet and start searching:

    Look up the company’s website. Even if you know Nike makes shoes, go find out more about the company and their philosophy, etc.

If they have a business site, so much the better. This is where you can research the company from a business standpoint. Sometimes this is a part of the public site.

See what Business Week and Fortune Magazine have to say about them. That should give you a wider view of the company.

Don’t read the negative stuff. All companies have their flaws and someone will write about them. This stuff can stick in your mind and come out at the worst time. I know this from personal experience.

Next: More Interviewing Homework

According to Armstrong & Kotler (2009), marketing is:

• Creating and Capturing Customer Value

Armstrong & Kotler (2009) also identify the key elements of  a customer-driven marketing strategy. The marketplace includes:

• Needs which create “market offering”,
• Wants which create “market offering”, and
• Demands.

A simple marketing process includes:

1. Understand!
2. Design!
3. Construct!
4. Build!
5. Capture value!

If you are designing a customer-driven marketing strategy “marketing management” is important. “Marketing Management” is:

• “The art and science of choosing target markets and building profitable relationships with them” (Armstrong & Kotler, 2009).

Remember the potential profitability of a product and its production and the projected  loyalty.

Reference:

Armstrong, Gary & Kotler, Philip (2009). Marketing An Introduction, 9e. upper Saddle River, New Jersey: Pearson Prentice Hall.

At the end of every interview the tables are turned and the interviewer will ask, “Do you have any questions for me?”  Let me give you a hint—you do.

I do?  Yes you do.  And let me tell you why.  First, asking questions is a terrific way to find out information about the company.  An interview is your chance, a one-on-one opportunity, to find out for yourself everything you wanted to know about the company of your dreams or at least the company of your daydreams.  The other research you do—the career fairs, the company website browsing, the inside info you get from friends—should synthesize the questions you ask at the interview not take their place.  Companies are like people in that respect—there is always more information to discover and more questions to ask.

The second reason you want to ask questions is a more strategic one.  Imagine you are on a date at your favorite Italian restaurant with the cute guy or girl you just met at the hip-hop club downtown while you were dancing over Whiskey Sours and the thumping base of Ne-Yo’s “Closer”, my current favorite song.  You just spent 45 minutes asking about your date’s background, their goals, their dreams, found it all very interesting and were yearning to share your life.  And then all of the sudden they raised their hand for the check, threw down a 20 spot, said “Nice talking to you” and walked out.  How would you feel?  Probably horrible—off balance, like you wasted your time and there would definitely be a sense that they weren’t that into you.   The same holds true during interviews.  Not asking a question will signal to the interviewer that you aren’t really that interested in the company they represent.  So you’ll want to ask thoughtful questions to convince them otherwise.

So without further adieu let’s talk about some common categories of questions you might want to ask and give a few examples of each.

Get them to talk about themselves
One of the best kinds of questions to ask are those about the experiences of the recruiter in the context of the company you are interviewing with.  Research has shown that when the interviewer talks about themselves they will perceive a better overall experience about the interview and are more likely to remember you.  I highly recommend asking at least one question about the interviewer not least because it is a very effective way to gain some real insight into what an insider sees as the opportunities and challenges of working at a particular firm.

Here is a short list of questions to get you started:

• What do you love about this company?
• What career path did you take at this company to get to your current position?
• Why did you choose to work for this firm over other options you had?
• What are the biggest challenges a new employee would face when working for your organization?

Ask about the position
Depending on the amount of information available on a company’s website and what you are able to acquire at a career fair, there is a wide range of information you may (or may not) know about the position you are applying for.  For that reason it may be worth your while to ask some questions about your target position.

Some possible examples might be:

• What is the typical career path of this position?
• What do employees in your company like about this position?
• What challenges do employees in this position face?
• What skills make a successful candidate?
• What sorts of projects might I expect to work on in this position?
• What sort of travel opportunities does this position entail?

Ask about something you learned about at the career fair or from another employee

Another great set of questions to ask are those that delve into information you discovered at a career fair or from another employee at the company.  You can get can get massive bonus points if you take the initiative to use your school’s alumni network, career services office, Linked In (a website dedicated to networking), or some other means to contact a current employee.  When framing this question at an interview you may want to mention that you talked to a past employee who said XYZ and you wanted to compare and contrast that view with that of the interviewer.

Ask about something you researched
One way to demonstrate the research you have done while at the same time gaining insight into a company is by asking a question that builds on information you have already acquired.  Perhaps you read a news article about a new product a company is coming out with, a new office that opened abroad, or a new environmental initiative the company started.  But be careful, don’t ask a question that might be taken as being obscure or irrelevant, as this might be seen as you simply showing off how much you read the Wall Street Journal.

Looking at recent news articles about some large companies I might ask these questions:

• I was reading about Jacob Jinglehimmer Smith, the new CEO your company recently brought on, and I was wondering how his hiring might affect the key values and direction of your company?
• Because of the economic crisis, I have been reading that many companies are shifting some key elements of their corporate strategies.  Is your company doing the same, and how might that affect the day-to-day work of employees.
• I was reading an article recently that was detailing the aging work force in the aeronautical industry.  What kind of knowledge transfer best practices do you have in place to make sure that young employees have an opportunity to learn from the experience of the older work force before they retire?

Alternatively, you might have looked on a company website during your research effort.  Looking at the home page for a company, I might ask these questions:

• While looking on your website I noticed there is a full time leadership development program available for new hires.  I was wondering what that program looked like on a day-to-day or week-to-week basis and how it interfaces with other entry-level positions?
• I noticed on your website that there are mentors available to help advise some employees as their career progresses.  Do all new employees get a mentor and what sorts of issue does the mentor help address?
• I read recently that your company was listed in Forbes Top 100 Diverse Companies in the US.  What opportunities are available for me to help get involved in promoting the diversity initiatives of your company?
• I saw work-life balance mentioned briefly on your website, but I was unable to find details.  What sorts of mechanisms and best practices are in place to promote work-life balance?

Ask about something that came up during the interview
During the interview the employer often times mentions something that interests you.  It might be a company sponsored rotation program in the finance department or the fact that the analyst position you’re applying for usually leads to a consulting position within two years.  This is a great time to ask any follow-up questions you might have.

Other common questions
There are many other common questions that people are often curious about asking and here are just a couple:

• Do you have any hesitations about my application?
• What’s the next step?

In fact you should always ask what the next step is if it is not explained by the recruiter.  Otherwise you risk days or week of nervousness wondering who is suppose to contact you in what amount of time for what kind of next application step.

What shouldn’t I ask?

Most of this falls into the common sense category, but the main concern I hear students inquiring about during career panels is whether it is OK to ask about salary or benefits during an interview.  Opinions between recruiters vary on this topic, but I recommend  that you don’t ask about salary or benefits during a first interview, although this may be appropriate during later interview rounds.

How many questions should I ask

I would recommend asking 3-5 questions.  It is good to keep track of how much time is left in the interview and read the interviewer’s body language to get a sense if they are getting antsy.  Also, keep in mind the time of day.  Before lunch the interviewer may be hungry and at the end of the day they will probably be tired, but again watch for specific body language.

Questions strategy

Now that we’ve talked about some typical types of questions and given some examples, it is worth taking a few moments to discuss some strategy behind asking these questions.

-Open Ended Phrasing

First, you’ll want to frame questions using open ended phrasing.  For example, say you are curious about how much travel is required for the position.  You wouldn’t want to say, “Will I get to travel?”.  The reason is two-fold.  First, the question is phrased such that the response is a “yes” or “no” when in reality you want to give the interviewer some room for explanation.  Second, you don’t want to bias your questions such that the interviewer gets the impression that you are just trying to get hired so that you can travel.  A more open ended way to ask the question would be, “What kind of travel opportunities are available?  Another quick example: you wouldn’t want to say, “How long will it take me to get promoted” as that will signal that you aren’t really interested in the job you are being hired for but only moving upward.  Instead, you might phrase this question as, “What does the typical career path for this position look like?”

-Positive Phrasing

Being positive in an interview is extremely important, so try to avoid negative phrasing in your questions.  Instead of saying, “Are there any sucky parts to working here?”  a very brash phrasing indeed, try asking, “What are the biggest challenges a new employee might face in your organization.”  Interviewers really look for, and appreciate, a positive attitude during an interview as this is a sign that the same demeanor will carry over into the workplace.

- Never ask without researching first

You should never ask a question without first researching the information to see if it is available from a company’s website.  There is no better way to give a bad impression to a recruiter than wasting their time by not doing basic research to prove you have more than a passing interest in their firm.

-Ask relevant questions

Don’t show off, phrase all questions in a way that makes them relevant to your potential position.  Note that this could include company wide changes in strategy or company values and initiatives.

-Memorization of Questions

This is a helpful tip for most students because many people, myself included, can get pretty nervous during interviews.  Having to suddenly think up a question on the spot can lead to a variety of poorly chosen and poorly phrased questions.  For that reason, I would come into the interview with about 3 or so questions memorized, that way if you panic, you’ll have some questions to fall back on.  In practice, you’ll probably have some questions in mind anyway before stepping foot into the interview.   If you find yourself completely unprepared in the interview and have no questions memorized, remember you can always ask about the interviewer’s experience in the company and what their career path within the company has been.

OK, well that’s it for today.  I’d love to know what questions you’ve found to be successful in an interview.  So leave your response by posting a comment below.

In the November 6, 2008 issue of Early to Rise, the Internet’s most popular health, wealth and success newsletter, Suzanne Richardson wrote a great article about interviewing – “A surefire way not to get hired”. In it she stresses the importance of some advanced planning and research and what it could have done to change the course of an interview for her friend “Carly”.

In a nutshell, her friend “Carly” made the same mistake so many job seekers make – thinking the potential employer is interested in them and only wants to hear about them and their career. At this point in the process, the company in interested in what you can do for them – period. They could care less about your hopes and aspirations. They want to know “What are you bringing to my party? And is it name brand chips or the store brand?”

For some reason, people think the job search is all about them and they assume (and we all know what that does) the interviewer is enamored to hear every detail of their career along with all their dreams for the future. WRONG.

The beginning of the job search is all about you – you decide to look – and the end of the job search is all about – you decide to accept the position. The middle? It’s all about them. Every syllable out of your mouth should be an example of how you can help the organization grow, run better, launch a new product … whatever. In order for you to do that, you have to do your homework. Research the company. Talk to people who work there. Google the company. Look for articles written about them and most likely the challenges they face. Dig past the first five entries of a search and you’ll be surprised at what you discover.

Use Hoovers and ThomasNet (formerly The Thomas Registery) to gather basic data. Sometimes you can even find the names of department heads listed in the info. At the very least, visit their Web site, so you know about the product or service provided. Difficult as it is to believe, I interviewed people when I was a manager at Chloride Systems in Burgaw, NC who had no idea what we made (emergency lighting and uninterruptible power sources). When I asked if they knew about our product lines, I heard GUESSES ranging from pool chemicals to car batteries. Needless to say, their visit was a waste of both of our times. In this Internet age, there’s no excuse not to know the company’s product, their mission statement, their culture.

Think about it. When you finally landed the dream date with Mr. or Ms. Right, did you spend the entire evening “boring” them with every detail of your life starting with your first breath, or did you show them you were interested in them by sharing tidbits you’d gathered from friends and friends of friends intending to dazzle and impress. I understand the physiological drive behind why you’d conduct this type of research. But isn’t living indoors and eating regularly also something that drives you? Isn’t advancing you career a reason to spend an hour or two researching a company?

The sooner you begin phrasing your responses in a “this is what I can do for you”, rather than a “what can you do for me” position, the more success you’ll have during interviews. Remember, this part of the job search process is all about them. Not you.

PS – For those of you who don’t get the Early to Rise daily e-letter, you’re missing a great resource. And you can’t beat the price – FREE. Go subscribe now.

Places to start researching possible products:

ThomasNet http://www.thomasnet.com/

Personal Electronic Devices Owned by Students
http://www.campustechnology.com/Articles/2008/01/Snapshot-Personal-Electronic-Devices-Owned-by-Students.aspx

100 Best Products of 2008 – PCWorld
http://www.pcworld.com/article/146161-12/the_100_best_products_of_2008.html