Republic Technologies International Inc. announced plans to close its 12-inch rolling mill in Canton in late September. Work performed at the Canton facility will be transferred to Republic's rolling operations in Lorain and Lackawanna, N.Y. Republic is headquartered in Fairlawn.
Dr. Monica M. Miklo has opened a private chiropractic practice on Fulton Drive in Canton.
The Belden Village office of FirstMerit Bank has undergone a $650,000 expansion and renovation project, which was completed late last month.
The Hoover Co. of North Canton has named four managers: Frank J. Bressi, manager of the dependable manufacturing office; Mark. R. Hollis, manager of industrial engineering; W. Jim Kellum, manager of mechanical design; and Gary A. Sacco, manager of production purchasing.
Gov. Bob Taft announced that Norman McNeal of Massillon will represent Ohio on the Martin Luther King Jr. National Holiday Advisory Committee. McNeal, a retired maintenance supervisor at Ashland Oil Refinery, chairs the Greater Canton/Stark Co. Martin Luther King Jr. Holiday Commission.
Stark State College of Technology has appointed John J. Kurtz as vice president of information technology and administrative services.
Christine Guest has joined CFS of Northeastern Ohio as a staffing consultant. CFS is a staffing company affiliated with Bruner-Cox.
Todd M. Kolarik, Eric J. Williams, David H. Krause and Randall M. Traub have joined Canton law firm Krugliak, Wilkins, Griffiths & Dougherty Co. as associates.
Alexander Hays IV has been named senior vice president and central region manager for Sky Trust, a nationally chartered trust bank with offices on Munson Street in Canton.
Bruner-Cox has hired Kara M. Presto as an associate in the general services department.
Mike Tyson has joined Castle Mortgage Corp.'s North Canton office.
Belden & Blake Corp. of North Canton has appointed the following: William F. Murray, vice president and general manager of Ohio District Exploration and Production Operations; David M. Becker, vice president and general manager of Michigan District Exploration and Production Operations; Carl J. Carlson, vice president and general manager of Pennsylvania/New York District Exploration and Production Operations; and John C. Corp, vice president and general manager of Arrow Oilfield Service Co., a division of Belden & Blake.
Dr. Ahmed El Ghamry Sabe, medical director of the Cardiovascular Center at Mercy Medical Center, will serve as the 2000 American Heart Walk chairman.
Innis Maggiore Group Inc. of Canton has promoted Jennifer Barnby to art director for the agency's creative department.
Dr. Peter D. Ferguson has been re-elected to president of the National Voard of Chiropractic Examiners, headquartered in Greeley, Colo. Dr. Ferguson has been in private practice in Canton since 1972.
It took Thomas Sullivan just eight years to drive the company he took over from his father from $11 million to $100 million in revenue. That was 20 years ago.
Today, Republic Powdered Metals' revenue stands at $1.95 billion and its success comes from aggressive acquisition and mandatory innovation, says Sullivan, the company's chairman and CEO.
The company's acquisition approach is so novel that it led industry analyst Timothy Gerdeman of Lehman Brothers to offer this observation: "You (Sullivan) and (Vice Chairman and CFO) Jim (Karman) were essentially the Lewis and Clark of the chemical industry and doing a lot of great acquisitions over the past couple of decades."
Sullivan's acquisition strategy is simple: "We buy businesses that don't need fixing and we let them do their thing," he told SBN last year.
Stimulating innovation is not as easily explained, though it is a mandatory part of business for the world leader in specialty chemical coatings.
"At the operational level, we live by new products," he says. "It's through new products and new marketing that is generally the only way we can keep our margins where they should be."
Sullivan says the company's goal is that in any given year, 25 percent of its volume should come from new products developed over the previous three years.
"It's important to maintaining stable margins in a business of disinflation, which is what we've been through in the past several years," he says.
Sullivan adds that innovative thinking is not necessarily a process that can be taught; and it's an inherent trait he looks for in his employees.
"The most creative people that I can think of need little motivation because they do it on their own," he says. "They love what they're doing."
Within the company's operations (as opposed to at its Medina headquarters), employees are encouraged to think out of the box and "not discouraged from coming up with wild, wacky ideas every now and then," he says.
RPM's first acquisition was in 1966, when the company bought St. Louis-based Reardon Co. (maker of Bondex products). Since then, it has overseen 81 purchases and 20 divestitures, all part of the industrial products industry, which includes roofing systems, sealants, corrosion control coatings, floor coatings and specialty chemicals. RPM's products include the well-known name brands Day-Glo, Rust-Oleum and DAP.
The company began a restructuring plan this year that includes cutting 23 facilities. The plan was developed to help cut operational costs and streamline operations, but so far, it has resulted in an earnings drop. RPM's fiscal year 2000 earnings ended a 52-year growth streak for the company.
Sullivan attributes the 17 percent decline in earnings from 1999 to 2000 to operating disruptions caused by implementation of the restructuring plan, along with large profit shortfalls at some of the company's operating units.
While sales for the 2000 fiscal year totaled $1.95 billion, a 14 percent increase over the prior year's record sales of $1.71 billion, net income was $78.6 million, compared to $94.5 million in fiscal year 1999.
Sullivan said in a public statement released in July that operating profits of the StonCor Group fell significantly below the company's plan because the group encountered difficulties in assimilating the Carboline unit into StonCor, particularly in its foreign markets.
He added that the Testor and Bondo operations also performed below expectations and RPM is addressing issues affecting the underperforming business units. In addition, a $52 million restructuring and asset impairment charge, along with restructuring-related expenses of $8 million -- primarily discontinued inventories and plant closing transitional expenses --were charged to earnings during the year.
There were other reasons for the disappointing results that Sullivan addressed during the fiscal 2000, year-end conference call.
"What I would like to do is talk about the what and the how, and most importantly, what we're doing to correct this past year and how we missed the mark so badly," he says. "In addition to growing RPM by a billion dollars in the last five years and absorbing our largest acquisition in DAP, last August we announced two major programs -- a restructuring program and a reorganization program.
"This caused the lack of focus by our operating people, and in part, probably by some of our corporate people, on what's so important to us in past years, namely, planning and growth. And obviously, it also cost us our 53rd year of consecutive record earnings.
"Why? We did too much, too soon when you put the restructuring and the reorganization together. In restructuring, we failed to understand the pitfalls that most programs of this nature have," he says.
Sullivan does not expect remaining costs associated with the restructuring program to affect future earnings.
"The positive earnings impact of this program will begin to be seen in the 2001 fiscal year," he says. "Earnings growth in 2001 will get back to our more traditional levels, upwards of 10 percent or more."
Sullivan recognizes that even an innovative operation occasionally faces some growing pains.
"Although this past year has been very painful, in the long run, I am confident that the restructuring and the reorganization programs will serve RPM well."
The Medina-based company has 96,000 shareholders, 6,800 employees and hundreds of sales and technical representatives. Its products are sold in more than 110 countries and manufactured at 72 plant locations in 14 countries.
RPM common shares are traded on The New York Stock Exchange under the symbol RPM. Of its total 1999 sales of $1.7 billion, approximately 60 percent was generated by industrial products sold worldwide and the remainder by branded consumer goods sold primarily in North America. How to reach: RPM Inc., (330) 225-3192 or www.rpminc.com
Connie Swenson (firstname.lastname@example.org) is editor of SBN Akron/Stark.
RPM's industrial maintenance products
Alumanation roofing coatings
Paraseal membranes and Vulkem, Dymeric and Monile sealants
Carboline, Plasite, Mathys, Alox, Westfield and TCI corrosion protection
Dryvit exterior insulation finishing systems
Stonhard and Duracon industrial and commercial floor coatings
Day-Glo fluorescent colorants and pigments
Wolman industrial lumber treatments
Fibergrate and Chemgrate fiberglass reinforced plastic grating
American Emulsions textile additives
Euco concrete admixtures sold by Euclid Chemical Co.
RPMs consumer products
Rust-Oleum and Stops-Rust rust-preventative coatings
Painter's Touch, American Accents decorative
Zinsser primers and sealants
Bondex and Plastic Wood patch and repair products
Wolman deck coatings, sealants and brighteners
Bondo and Marson auto repair compounds
Mar-Hyde auto body paints
Varathane, Watco, Mohawk and Chemical Coatings woodworking and wood finishing products
Testors and Floquil model kits, coatings and accessories for the hobbyist market
Pettit, Woolsey and Z-Spar marine coatings
DAP caulks and sealants
Janice Gusich opened the doors of Akhia Public Relations with three clients on six-month contracts.
She started her own business after her long-time employer, M.H.W. Advertising and Public Relations, closed suddenly after 40 years of operation in Cleveland.
Nearly four years later, Gusich still has those same three clients and many more, and she's moved her offices three times to accommodate the firm's tremendous growth. Now settled in Hudson, Gusich reveals the universal truths that have kept her motivated and successful.
"My biggest inspiration was my dad," she says. "He was a tool and die maker with eight children. He believed in loyalty and working hard for what you want. It's funny, out of eight of us, five own our own businesses. I think that's a great example of what comes from a strong work ethic."
Gusich had her first job at age 13. By the time she was 16, she had saved enough money to buy her first car. Her predisposition for hard work proved both an asset and a challenge when she became an entrepreneur.
"My first inclination is to write that proposal or do other work for a client," Gusich says. "I had to train myself to work on visionary issues that were vital to the company's growth.
"In the beginning, you have to do everything yourself, from hiring the cleaning staff to bringing in new business. There is some security in doing the work and achieving, so it's hard to step out into areas you don't know about. It's uncertain ground, but if you're going to grow a business, you have to step into territory you've never charted before."
Performing the job of CEO, while difficult at first, is now Gusich's favorite part of the day. She says her leadership role is to provide a vision, inspire and provide support for employees.
"One of the things I'm most proud of is that I've been able to build a wonderful, supportive and talented staff," Gusich says. "That makes my job easy. When I'm under pressure, I can simply look around me and feel confident with a quality staff I know will perform."
Gusich used lived the 8-to-5 grind, commuting more than an hour to work with an infant in daycare.
"I was unhappy, exhausted and I hated every minute of it," Gusich says. "Too many companies are worried about the bottom line. As a result, they don't have quality people and they don't have fulfilled employees. You will always get a better product from a happy employee."
Akhia offers a flexible schedule to accommodate employees' personal lives and aspirations. It also boasts a zero turnover rate among its eight full-time employees.
"The most important thing I can provide is a quality of work life," Gusich says. "I think my staff chooses to be here because it fits their lifestyle. People love coming work when it helps them achieve both their personal and business goals."
Maintaining balance is a priority.
"I take the time to be as good of a parent as I am a CEO," she says. "I couldn't look at myself in the mirror if I worked at the expense of my kids and I would never ask my employees to do that, either."
Listening to others has paid off for Gusich on the road to becoming a CEO.
"I also listen carefully to anyone that I admire," she says. "I knew how to do PR work but I didn't know how to run my own business, so I asked those that I admired. If I'm in a room with someone like Bob Schneider (CEO of Patio Enclosures Inc.) who built his own business from scratch and turned it into a multimillion dollar business ... when he talks, I listen."
Gusich credits Schneider, a long-time client, with one of the most important lessons she learned about growing a business.
"Bob said to me, 'Don't worry about getting new business. Do a good job with the business you have and new business will come to you,'" Gusich says.
Part of doing a good job is putting herself in her clients' shoes.
"I take a personal interest in my clients' businesses," she says. "If I owned their business, what would I want to achieve? That helps me become a good custodian of their money and their aspirations."
One of the most important lessons she says she can share with clients is to pay attention to their image.
"You never get a second chance to make a first impression," Gusich says. "That's something I did right away.
"It's a hard lesson for a small business but image means everything." How to reach: Akhia Public Relations, (330) 463-5650
Mark Goldfarb and Gary Shamis aren't just small-town gladiators making a stand against greedy Goliath competitors.
They are the managing partners of SS&G Financial Services Co. -- a regional, full-service accounting firm with offices in Akron, Cleveland, Columbus and Cincinnati -- who are making their mark, making a point and making it easier for independent firms to compete in the financial services arena.
"There are top quality firms like ours around the country that are very successful, have deep client relationships and strong community ties, and don't want to sell out to large corporations," says Goldfarb, explaining that SS&G is often approached by big-boy firms hungry to buy local practices to create financial services conglomerates. "Like other independent firms, we're tired of large multinational rivals targeting our clients, and we want to find ways to compete." (See SBN, August 2000.)
And so they have, in ways that would impress Marvin Shamis, the founding father of the 32-year-old practice also known as Saltz Shamis & Goldfarb Inc. To provide superior client service, foster entrepreneurial growth and safeguard against industry consolidation, SS&G's managing partners are launching a steady blast of innovative ideas and leveraging the potency of like-minded industry alliances.
Making a mark
To boost retention rates and brand SS&G as a cutting-edge financial services practice, the partners debuted offerings unique to traditional CPA services. For example, SS&G was one of the first nonnational firms of its kind to introduce a product like SS&G Investment Services. The partnership with R.C. Morris Inc., a local employee-benefits consulting firm, augmented SS&G's employee benefit offerings.
The partners then introduced SS&G Healthcare Services to assist physicians with practice management, contract negotiations, strategic management, billing and collection issues.
To provide operational and managerial consulting to the restaurant and hospitality industry, the firm partnered with Carroll Consulting, a restaurant and hospitality consulting firm. And this spring, SS&G enhanced its IS consulting practice by merging with F1 Ltd. to create SS&G Technology Consulting.
"Offering all these services is unheard of for a traditional accounting firm, but we realized the capabilities would set us apart from other accounting firms," says Goldfarb. "It's also allowed us to grow at an unparalleled rate."
Making a point
To establish a competitive advantage, Shamis arranged a meeting of several top national independent accounting firms, and last fall, "The Leading Edge Alliance" was formed. The consortium is the first international association of its kind designed to help large independent accounting practices leverage the strength of a multinational firm, while maintaining individual local expertise.
Goldfarb says the outcome has been "overwhelming" in that, to date, the consortium includes 25 domestic firms, and a recent partnering with an international association secured a combined membership of 245 firms in 68 countries -- and more than $600 million in annual revenue.
"Through this alliance, we can tap into global resources of cutting-edge knowledge from leading experts and deliver even more value to clients," Goldfarb says.
And since the power of The Leading Edge is based upon the strength of its regional affiliates, this June, SS&G merged with Greene & Wallace, the fourth largest independent accounting firm in central Ohio. The merger made SS&G the largest independent accounting firm in Ohio and an employer of about 240 people.
"We can grow and receive awards, but it all comes down to serving your clients by coming up with innovative ideas to help them with their businesses," says Goldfarb. How to reach: SS&G Financial Services Co., (330) 668-9696
This may appear to be a simple question for most entrepreneurs, but in reality, how you embrace the business market over the next few years will affect your growth potential and existence. What we are really talking about is the ultimate survival issue.
Let's examine what the current and recent past marketplaces have produced. We are loosing 2,000 to 3,000 jobs per day in the United States. Approximately 72 percent of all U.S. mergers and acquisitions have been financial failures over the last 10 years. Is it possible that what we think of as creative business thinking may not working?
What about the 150 mph pace we have become accustomed to? Was it not just a few years ago that we were happy with a 286 computer?
We can't find workers to fill our demand. And if we can, how many are really dependable enough to show up every day, and for how long? What is the answer? How can I still grow my business? How can I still be competitive?
I have dealt with survival and growth issues for 10 years. I have restructured, sold off divisions and created services in response to the markets and have utilized all the creative business thinking I could muster.
As I entered my 10th year of business, I realized that my business, SACS Consulting, had to confront these pressing issues and I started analyzing newer business trends.
I discovered that mergers and acquisitions will continue. There is simply too much money available and the economy is too strong for them not to. But, what about the small- and medium-sized businesses that comprise the majority of American business? What is the answer for them? Partnerships. You are going to see a trend in a new type of partnership between businesses and competitors.
Company A will examine the services and products it provides. It will focus on and maintain its strengths. It will find Company B to provide the additional services and products it needs. Both companies may find Company C to assemble the products or market the services. The key is that each company only performs in its strength areas instead of trying to do it all.
I recently formed a partnership organization called Workplace Solutions Group. After several clients requested additional consulting services, I had to decide what I could and wanted to provide. Did I really want to invest money and time and search for personnel, etc., to expand our services, or was there a better way? I decided to stay focused on our strengths, but add the ability to solve other issues our clients faced.
The partnership group of Workplace Solutions Group has provided that avenue. SACS Consulting can now deliver consulting on issues including OHSA/safety, environmental, workers' compensation, repetitive motion injury and urine/hair drug testing.
I am seeing a trend in which competitors come together to form these unique relationships. Even in the mergers and acquisitions arena, partnerships are being formed to better manage the newly acquired entities.
But for these partnerships to work, you must work at them just like you work at your business. Workplace Solutions Group meets every month to discuss our action plan for the year, our joint marketing strategy and how we can improve. We are going to plan joint training seminars, joint mailings and creative coordinated business efforts.
This is where the difference is today. The partnership is formed and worked on as if each entity participating were one of your company's divisions. Workplace Solutions Group requires specific responsibilities of each participating company.
As a result, our service has increased, our reputation has grown, but our additional overhead has been minimal. I now have six to eight established organizations marketing our services on a regular basis. I couldn't afford this type of expansion if I had to do it all myself.
When I sought out companies to partner with, I was overwhelmed and shocked by the response. We sold out our available office space in our new building within 45 days and now have a waiting list.
These companies saw and embraced the opportunity this new and creative thinking presents. Timothy A. Dimoff is president of SACS Consulting & Investigative Services. He can be reached at (330) 633-9551 or www.sacsconsulting.com.
Years ago, I insisted that the people who worked for my company know a basic philosophical tenet. One that the company was founded on and one that could not be strayed from: "People Before Profits." It is something that is extremely important to me, and the basis of what we, as an organization, stand for.
The customer came first, period. They were the ones who told others how well we treated them. They were the ones who would come back, time and time again to buy from us. They were the ones who helped us expand and who monitored our service. They were they ones who wore our products and premiums. They were the ones who paid our salaries, rents, utilities, etc., and enabled us to buy more products to sell them. Without them, there would be no business.
Too often in today's society we find that customer service, relations and care has evaporated like water that sits in a glass for days without anyone paying attention to it. And that analogy is what causes customers to run to competitors.
How often have you walked into a department store, supermarket, boutique, law firm, accounting firm, insurance or doctor's office only to find that there's no one available to help you? You wait, scream out for help and still not a soul comes forward, or worse, when they do, it's with an attitude because you're interrupting their activities, personal phone conversation, water cooler gossip, etc. Eventually, you evaporate from the premises. A customer just waiting to hand over your hard-earned money but frustrated when you realize that no one wants to take it.
So, how do we avoid sending our hard-fought for patrons from bolting out-of-sight? First, acknowledge people, and never, ever, ever say, "Can I help you?" especially if you're in retail. Why? Because you already know what the answer is going to be 95 percent of the time: "No thanks, just looking." So why ask it?
The fact is, we're almost culturally programmed for that response. Instead, start by greeting people with, "Hi, have you visited us before?"
Of course, that's only if you don't recognize them. If you do, then "Hi Pat (or whatever their name is), glad to see you again," is a great way to acknowledge someone. We all like to be remembered by name and you should learn how to remember your customers' names. Just that one element begins to build that all-important rapport.
If the customer is new and the response to your greeting is "no," then you may want to say, "Welcome, thanks for stopping in, I'm Dan, what's your name?" Making someone feel like a guest in your establishment is very comforting. Remember, customers buy and carry on business relationships with people they like and feel care about them.
Keep a list of pertinent facts about each customer: their spouse's name, kids names, likes, dislikes, birthdays, etc. Then you can start to do and say those little things that help build a solid relationship.
Now that we've got acknowledgement and respect in order, we have to make sure that we listen to our customers. Asking them probing questions and allowing them to respond or giving them the opportunity to "vent" and/or tell us what's on their mind - without interrupting - enables us to understand their needs and react favorably to them. Once you understand their needs and wants, then you must
follow-up on their requests efficiently and effectively. A timely response is worth a thousand phone calls. Respond to them even if you don't have all the information.
Show reliability in what you do. If you can't be reliable for your customers, then it won't be long before you won't have to be!
Not that long ago, a survey listed the reasons why customers defected. The list was extremely revealing:
- 3 percent relocated
- 5 percent developed new relationships (i.e., my brother-in-law just became a CPA and if I don't use him there'll be big problems)
- 9 percent defect for competitive reasons (i.e., I have to rearrange my finances and the store across town is less expensive)
- 14 percent are unhappy with the product, service or location (i.e., it didn't work for me and besides, there's another office much closer to my home now)
- 68 percent defect because of a negative attitude or apathy shown by the store or office employees, including management and ownership
customers can be saved from defection with some empathy, care, consideration, help, listening, and timely, effective resolution.
How much money and time is wasted looking for new customers that could be saved by just holding on to old ones?
Another amazing thing is that these defections don't happen overnight. There is almost always a frustrating build-up and warning signs. The complaining begins and no one addresses the need. The customer's shipment comes in wrong and the manufacturer's office doesn't respond quickly enough. The patient needs care and the doctor makes them wait forever. The claim needs to be filed and nobody returns the client's call. A call, ane-mail or a fax is all it takes at the beginning - just a response.
Figure out what it's going to take to turn the customer around and make them happy - then do it. Of course,
if keeping customers happy is what you do as a matter of policy, then
you won't have to turn too many customers around.
It's also important that you fully understand what the problem really is. Never make assumptions. And when it comes to rectifying the situation, you may want to respond by asking the customer, "If you were me, what would you do?" And guess what, they'll tell you. Of course, there may be some extenuating circumstances that won't allow you to do what they've requested, but at least you have a starting point that will enable you to satisfy the customer.
You can follow their response with, "You've made some good points and I'll do the best I can to fulfill your requests, however, in case our policy won't enable me to do that, what I can do is X, Y or Z. Now let's suppose you could pick one of those options - which one would it be?" Obviously, these are just suggestions that would be put into your situation, but they give you some dialogue to start with. The customer will be more than happy to guide you along and you can even begin to calm down the irate ones. The goal, of course, is to never get to that point.
If you can be proactive, rather than reactive, you can also avoid a lot of problems. If you know that a shipment will be late, then call the customer first. If you have an overflow of patients, call those scheduled or tell those in the waiting room that it may be a bit longer wait but you'll do the best that you can. You, the doctor, should do that and not the staff. But do something that will help them feel more comfortable.
In addition, it is important to keep your customers informed about new procedures, inventory, services, etc. This doesn't mean that you only send them a newsletter once a month. Call them and tell them what's going on.
If you're into serving them, then do it! Let them know that you're aware of their desires (i.e., the customer who likes to buy the latest items should be called when a shipment comes in; the one who could benefit from a change in a legal code should be updated; etc.).
Quality customer service has another major factor. More than anything, it's about how you view yourself. Do you take pride in what you do? Do you have self-respect? Do you care about people and how what you do affects them? Are you secure enough to admit your own mistakes and shortcomings and do something about them? Do you realize that what you do reflects positively or negatively on you? Realize that customer service is as much about you and your organization as it is about your customers.
In today's environment, with the "new" economy intermingling with the "old," it becomes more and more apparent that quality customer service is vitally important. Nothing will ever replace personal interaction.
At the beginning of this article I mentioned a phrase that has been a part of my business philosophy from my first day in business, "People Before Profits." It may sound like a contradiction in terms in this capitalist, "make lots of money fast," environment, but I've found it to be just the opposite. If you put "People Before Profits," it won't be long before you start seeing more and more business, and with that business, more and more profit.
Quality customer service is more than three little words; it's a credo that should lead your business into the world of growth and prosperity.
Dan Goldberg is the President of Dan Goldberg Consulting, L.L.C. a training, coaching and business development firm in Philadelphia. Reach him at 215.233.5352 or via e-mail at email@example.com.
It's the kind of benefit employees are looking for -- a profit sharing/401(k) plan that effectively matches employee contributions dollar for dollar up to 4 percent of total employee compensation.
And the 77 employees at Digital Day, a Fairlawn-based provider of corporate Web solutions, have found it. Jacqueline Alt, manager of internal operations and human resources, doesn't think of the plan as a luxury. In fact, she considers it a necessity in today's top job market.
"In our industry, we have to be competitive for human resources," she says. "You have to have not only a 401(k) plan, but a really good one in place. The profit sharing plan is another major issue with the employees. They're looking for the best place to be."
Just how does a small business provide such perks? It's not as cost-prohibitive as it sounds, according to Mario Dolciato of Retirement Benefit Systems, an Akron-based company that specializes in designing, administering and investing retirement plans for smaller companies.
He says it's actually quite affordable to set up a retirement plan, and, in most cases, it is the employer who decides just how generous he or she will be, from matching employee contributions dollar for dollar to kicking in nothing at all.
"When we design the plan, we talk with a business owner and find out what they want out of a retirement plan," Dolciato says. "Every retirement plan out there is different. There are things that you can design in the plan to work for each company -- eligibility can be different, the vesting schedule can be different. If the business changes in the future, we amend the plan to allow other things to happen."
While plans differ from company to company, Dolciato says the most popular types of qualified retirement "products" offered by the IRS can be narrowed to the following. He explains exactly what they are, how they're set up, and what they cost to implement, fund and administer.
The S.I.M.P.L.E. IRA plan. Like the individual retirement account so many Americans are familiar with, this IRA allows an individual to defer and invest a portion of pre-tax income every year. However, an employee can sock away up to $6,000 a year -- three times the Internal Revenue Service's $2,000 limit for the Plain Jane IRA.
The catch? Each year the employer must match 3 percent of each participating worker's total annual compensation or 2 percent of every worker's total annual compensation, regardless of whether they contribute to their IRA or not. All contributions are vested immediately.
Dolciato says this is a good option for businesses with 10 or fewer employees. To set it up, employers need only contact a registered securities representative.
"There's no IRS reporting, no administration, no cost for administration," Dolciato adds.
Employees, who are able to choose the mutual funds in which they invest their money, pay an annual custodial fee of about $30 to the investment company, just as they would if they'd opened a regular IRA of their own.
The profit sharing/401(k) plan. Dolciato recommends the profit sharing/401(k) plan for businesses with more than 10 employees. The profit sharing component, as the name suggests, is funded by employer contributions only.
The plan document can be worded so that such contributions are made at the employer's discretion from one year to the next.
"The business owner can decide at the end of the year if they want to put $50,000 in, $100,000 in, or zero," Dolciato says.
Even if a business enjoys a year of record-breaking success, its owners may decide to contribute nothing.
The 401(k) component is made up of employee contributions and matches made by the employer. The IRS allows each employee to contribute a maximum of $10,500 pretax income annually (a figure indexed each year). A well-worded plan document allows the employer to make contributions at his or her discretion.
Some companies, like Digital Day, do commit to matching a percentage of employee contributions annually.
"But we like to make the document read, 'We'll put a match in if we'd like,'" he says.
Such wording prevents employers from making legally binding promises they can't afford to keep. And even if the employer decides to contribute nothing, the plan still offers employees the opportunity to defer and invest pretax income.
Retirement Benefit Systems charges a one-time fee of $800 to draw up a plan document. Annual administration charges are $1,100 plus $42 for each employee.
The rates, Dolciato says, are comparable with those of competitors. There are also investment costs, or fees charged by mutual funds, to consider. But setting up a profit-sharing/401(k) plan for larger groups allows a business to control how much it will contribute and when employees are vested for those contributions.
Employees, of course, are immediately vested for the balance produced by their own money, but a vesting schedule dictates when they're fully vested for employer contributions. Dolciato says workers are typically vested in 20 percent increments for each year of service and are fully vested after six or seven years.
The money purchase plan. A money purchase plan is a pension plan fully funded by the employer. Because it is a pension plan, it must be funded for an amount stipulated in the plan document.
"If you write in your money purchase plan that you're going to put 10 percent (of an employee's total annual compensation) in for everyone, every year, then you're going to do it," Dolciato says.
Retirement Benefit Systems charges a one-time fee of $800 to draw up a plan document. Annual administration charges are $1,000 plus $32 for each employee. Dolciato says some competitors charge more to come on site and talk with employees so they can each invest their own funds. He says the money spent is worth it, for it releases the employer from the fiduciary liability inherent in what he calls pooled accounting, or putting the money in one pot of investments.
The employer is responsible for the funding only. How to reach: Retirement Benefit Systems, (330) 666-8883
If you don't think that classic car you've had your eye on for years can be a legitimate business expense, Ronald Wesley is out to prove you wrong.
Wesley, who owns Select Leasing in Hudson, just arranged a lease for a local business owner who had been searching for the perfect 1967 Corvette. After Wesley located the car, he leased it to the business owner, who now writes the car off as a business marketing expense.
The catch? He drives it for business purposes, and included a picture of it on his business card to help promote his company as a "classic business."
Wesley says the leases he arranges are designed so that the lessee can write off up to 100 percent of the use of the auto. He says that 80 percent of his customers are business owners who are looking for cars for themselves and fleets for their companies.
For companies, leasing makes more sense than purchasing, he says. For one, there's no recordkeeping for the IRS: If you use the car 80 percent of the time for business, you can write off 80 percent of your monthly payment.
He says that's why larger companies like Kinkos and IBM, for instance, lease their fleets. Wesley should know: He's not only a car enthusiast, he's also an accountant.
"You don't have to prove depreciation, as with a purchase," he says. "You have an instrument that shows exactly what your depreciation is. And you don't have to monitor fleet usage."
In addition, you don't have to tie up capital on the front end, because you're paying as you go, only for what you use. With the average cost of a new car today at $21,000, companies that need fleets of 20 or 40 cars can be looking at a huge up-front expense.
Wesley says that 79 percent of all cars costing more than $28,000 are leased. This year, Mercedes-Benz is leasing 88 percent of its cars; Cadillac is leasing 96 percent.
But even with the growing popularity of leasing, Wesley cautions against getting trapped into a vehicle you really can't afford.
"Everybody's using it as a catch-all, low payments to get people in. But that's not what it's all about," he says.
He advises that before you negotiate a lease, you should know how much you'll be driving and the amount of wear and tear you normally put on your vehicles. He says the ideal lease arrangement has no down payment and no end-of-lease charges, so the lessee is literally paying month by month for exactly what he or she is using.
But if you find you can't afford the payments on your dream car, there's still hope, he says. Try looking into a lease on a used vehicle. Wesley says he recently arranged leases on several year-old Cadillacs for one company, at about $250 less than the monthly cost of leasing a new Cadillac.
That's because most cars depreciate about 25 percent in the first year, and another 15 percent in the second, he says.
"Some cars, after two or three years, almost don't depreciate," he adds.
"As an independent leasing company, my interest is in assuring that my customers are driving the car they want or need at a price they can afford with the service they deserve," he says. "Obviously, a satisfied customer continues to lease and is the single greatest source of new business.
"Customer referrals account for nearly 75 percent of all of our business." How to reach: Select Leasing (330) 650-9900
If you think everyone is chasing your customers and trying to erode your market share, your fear might be justified.
The Internet has given companies long arms to reach into your backyard. This means new competitors and new challenges in the battle to retain customers and gain new ones. Enter CRM, or Customer Relationship Management.
This new acronym comes with promises of increased market share, big ROI (another cool acronym), happier customers, richer salespeople and all-around euphoric feelings for all.
But CRM is as misunderstood as the undoing of the dinosaurs or the reason it rains the day after you wash your car.
Remember Y2K and ERP (Enterprise Resource Planning)? These were two acronyms that put our economy into a tailspin in the '90s and brought multibillion dollar companies to their knees like an unidentified virus strain. Why did so many ERP efforts fail? In my opinion, some vendors did not deliver on promises and many companies implemented ERP without having sound processes in place.
We scrambled to embrace CRP (Capacity Resource Planning) and MRP (Manufacturing Resource Planning) technologies in the '70s and '80s, and the same mad dash was made to implement ERP before 11:59 p.m., Dec. 31, 1999.
Let's put CRM into perspective. It is supposed to be a tool for enhancing, facilitating and managing customer relations. Every client I have encountered has a unique personality and a unique way of maintaining customers. Therefore, it's not safe to assume that a handful of CRM software products is going to fit out of the box. In fact, one-third of CRM implementations provide significant benefits, one-third provide negligible benefits and one-third generate no improvements.
With companies spending millions of dollars, one would hope the return would be rosier.
I have been in and around the IT industry for 20 years and I am convinced that software does not solve process problems. At best, it may bandage the problem; at worse, it could cause you to make mistakes faster.
If you feel a panic to rush out and buy a piece of software as the end-all, be-all of your customer relationship, here is Dr. Steele's remedy for CRM ails:
1. Process, process, process. Get your house in order. If weaknesses are inherent in your customer interface, or you are considering the Internet as a new sales vehicle, back office changes are inevitable before implementing software.
Every organization can be evaluated based upon its ability to be receptive to and integrate CRM solutions. Some companies will be more ready than others.
2. How about a contact management tool? Consider Gold Mine, SalesLogix, TeleMagic, Pivotal and Firstwave, ACT! (recently purchased by SalesLogix). I have used all but one of these and found each to be easy to use and powerful enough.
3. Employ application service providers.
4. Use portals. Upshot.com, Interact.com, Sales.com, Salesforce.com, SalesRepsOnline.com are examples. I like them all, for different reasons. These typically charge a monthly member fee for browser access.
5. Repeat No. 1 daily until all medication is used. Tim Steele is the sales director for Idea Integration and president of ADI Consulting. A Cuyahoga Falls resident, Steele specializing in sales management, target marketing, account management and strategic planning. He can be reached via e-mail at firstname.lastname@example.org.