Lynne Thompson

Tuesday, 23 October 2001 10:47

Higher learning

Fetch coffee and doughnuts, deliver the mail, man the copier -- they're the duties many people still associate with college internships.

But today's students (normally under the supervision of a faculty adviser) are doing jobs often assigned to management consulting firms, often at no charge. The beneficiaries? The businesses that give them a chance to apply textbook lessons to real-world situations.

Following is a sampling of projects performed by students at area colleges and universities, along with contact names and telephone numbers for those interested in taking advantage of them.

College of Wooster -- Since mathematics professor John Ramsay started the Applied Mathematics Research Experience eight years ago, its student teams have been hired by some of the area's biggest corporate names, including the Goodyear Tire & Rubber Co. and Newell-Rubbermaid Inc.

Ramsay describes the bulk of the projects as "management science" -- inventory control, production scheduling, floor-plan analysis, etc. But the students have done everything from creating a computer program to assisting workers at Wooster-based Metromedia in determining where to place grommets so their banners won't tear in the wind to crunching historical and weather data to predict strawberry crop volume for the J.M. Smucker Co. in Orville.

"Really, it's evolved to be more like a consulting agency than anything else," Ramsay says. "It's different from an internship in that the students work at the college. We provide office space, computers and telephones."

Representatives of companies interested in hiring teams are invited to attend a program in mid-November, at which students who worked through the previous summer give presentations on the projects they completed. The AMRE is designed to provide students with a full-time job for eight weeks in the summer; therefore, the projects they accept are limited to those where needed information and resources are readily available.

"If we have to wait three days for information, we give up a lot of hours to twiddling our thumbs," Ramsay says.

Fees vary according to the number of students committed to a project. This summer, a team with three students and a faculty adviser ran $8,700 -- approximately what it would cost to hire three interns for the same time period, according to Ramsay.

For more information, call Ramsay at (330) 263-2579 or e-mail him at jramsay@wooster.edu.

University of Akron Debbie Owens, an assistant professor of marketing, estimates the market research done by the graduate students in her Business Research Methods Class would cost a client "$15,000 to $20,000 a shot." But the only things clients pay for are any out-of-pocket expenses (postage, rental of a room to conduct focus groups, beverages for participants, etc.) Management must also agree to attend an oral presentation by the student group working on their project.

The class splits into groups of four or five students, and each group works on a project for one of the concerns Owens has lined up. Although she favors nonprofit organizations, small start-up businesses are eligible for selection. "Many of our students are first-generation college (graduates)," she explains. "They just haven't had that broad experience in the community-leader side of life."

Past projects include a survey of parents and teens served by the Akron Urban League on current and future recreational programming; a survey of past and present members of the Better Business Bureau on their perceptions of the organization; a market feasibility analysis for Masterdrive of Ohio, a provider of driver training programs for police, youth and the elderly located in Akron, on offering programs to fleet truck services; and a market feasibility study for Inventure Place on corporate interest in creative thinking courses.

For more information, contact Owens at (330) 972-6029.

Kent State University -- Approximately three years ago, Dennis Ulrich, director of executive development programs for the Kent State University College of Business Administration, and Doug Shupe, operations manager for the state of Ohio's Small Business Development Centers, created the Ohio Graduate Business Student Competition.

As the name suggests, the annual contest pits teams of business school grad students from around the state against each other. There is a cash award for the top team, but the real winners are small businesses: Each team of four to six students is judged by the project it completes for a company chosen by the local SBDC.

Last year, teams did 9,000 hours of free consulting work, developing Web sites, financial and marketing plans, business process engineering, "anything that a business really feels as though it needs," according to Ulrich.

Ulrich calls the competition "a very structured, highly organized thing."

"In most cases it's part of a college course that the (team's) faculty adviser oversees," he says.

The results can be very impressive.

"We had one case where (the winners) began to look at the financial records and discovered that the chief financial officer of the company had embezzled $150,000," Ulrich says. "That's how intense the business analysis gets sometimes."

Ulrich says 10 schools, including Kent State University, are participating in the competition. (Other participating schools in northeastern Ohio are Case Western Reserve University and Youngstown State University.) An organizing meeting is held in October, and teams work on their projects from December up to the competition in April.

Perhaps the only downside for interested presidents and chief executive officers is that each college or university is only allowed to send two teams to the competition -- which means that, for those schools that don't hold an additional on-campus contest to determine the teams, only two businesses are chosen for projects by their local SBDC each year.

For more information, contact Linda Yost, director of the SBDC at the KSU College of Business, at (330) 672-1279.

Hiram College Teams of undergraduate students enrolled in marketing research classes also conduct marketing research projects at no cost, according to Kathryn Craig, director of the college's Career Center. One team, for example, recently conducted a market feasibility study for a local woman who was thinking of opening a day care center that offered after-school programs.

The students who sign up for the Organizational Communications class provide a free service called a communications audit, which Craig defines as "a survey of how communication is handled within a particular unit of a business" -- among sales reps, with clients, between departments, etc. -- and suggestions on how to improve it. Craig says some clients already know they have an internal communications problem; others ask the students to find out if they have one.

For information on marketing research projects, call Jane Rose, dean of the Weekend College, at (330) 569-3211. For information on communications audits, call Gail Ambuske, professor of management and communications, at the same number. Lynne Thompson is a free-lance writer and regular contributor to SBN Magazine.

Tuesday, 23 October 2001 10:47

Staying small

A mild-mannered business owner interviewed for an article became agitated when we asked one of our staple questions: How many people do you employ?

"Well, we try to stay under 50," he grumbled.

So why would an owner purposely stunt his company's growth?

"Because of the governmental laws," he says. "When you get over 50 employees, you've got all these things you've got to deal with."

"These things," according to Rebecca Osborne, director of human resources at SS&G Financial Services' Akron and Cleveland offices, are the federal labor laws that apply to businesses as they hire their 20th, 50th and 100th employee. She provides a review of those laws.

20 or more employees

Consolidated Omnibus Budget Reconciliation Act of 1985. Federal law does not require employers to provide health care benefits for their employees. Those who do provide those benefits, however, must allow employees to continue coverage at their own expense under the same plan if they leave their job due to what the Society for Human Resource Management calls a "qualifying event."

Employees who quit or are fired for reasons other than gross misconduct can continue coverage for up to 18 months, as can workers whose eligibility for health benefits is lost due to a reduction in work hours.

Employees who become disabled can continue coverage for up to 29 months. Spouses and dependent children can continue for up to 36 months after the death of an employee, divorce, loss of coverage as a result of Medicare eligibility, loss of coverage after the bankruptcy of a retired employee's employer or after a dependent child becomes ineligible under the plan.

Age Discrimination and Employment Act. The ADEA prohibits mandatory retirement, as well as "limiting or classifying employees in any way that adversely affects their status because of age" -- for example, discontinuing pension accruals after age 65.

50 or more employees

Family Medical Leave Act. Enacted in 1993, Osborne says it allows an employee to take up to 12 weeks of unpaid leave (including maternity leave, vacation and sick time) during any 12-month period for the birth or adoption of a child; the serious health condition of a spouse, child or parent; or his/her own health condition. During that time, the employer must hold the employee's job -- or a job with equivalent status and pay -- until his or her return.

Osborne says the 12 weeks don't have to be taken consecutively. An employee, for example, could use the time to cut the workday in half for six months.

100 or more employees

Worker Adjustment and Retraining Notification Act. WARN requires employers to give a minimum of 60 days' notice if a plant is to close or if mass layoffs are to occur. According to The SHRM Learning System-Module Two: General Employment Practices, "WARN affects employers who employ 100 or more, a) full-time employees; or b) full-time and part-time employees who in the aggregate work at least 4,000 hours (exclusive of overtime hours) or more per week at all employment sites."

Filing of EEO1 Report. The Equal Employment Opportunity Report requires employers to declare the number of males, females, African Americans, Asians, Hispanics, etc., on the payroll. Federal contractors must file an EEO1 report when they have 50 or more employees. How to reach: SS&G Financial Services, (330) 668-9696

Lynne Thompson is a free-lance writer and regular contributor to SBN Magazine.

Monday, 22 July 2002 09:46

Stress relief

It was hair that brought them together.

It was hair that split them apart — almost.

After 33 years of marriage, Joanne Liuzzo can laugh at how her husband Mario practically ended their relationship before it began. The 62-year-old co-owner of Mario’s International Spas & Hotels tells the tale while her 68-year-old partner in business and life watches the last minutes of an NFL playoff game at the bar of their flagship Aurora property.

It was 1960, and Joanne, then a student at a now-defunct Maple Heights beauty school, was attending a hair show in Cleveland with her mother. Mario, a stylist who operated a new Maple Heights shop, noticed the young woman’s head of thick, shoulder-length brown hair.

“He walks over, takes all my hair, and pulls it up,” she remembers. “He wanted to look at my neckline — that was very important for styling. He said, ‘How’d you like to model for me?’”

For the next couple of years, Joanne allowed her hair to be colored and coaxed into fantastical styles; her only payment was the coiffure she modeled. When she graduated from beauty school in 1963, Joanne assumed the hairdresser would be happy to give her a job after all the times she’d loaned her locks to him. Instead, Mario told her she needed to get a year’s experience at another salon.

“I really disliked him because he didn’t hire me,” she recalls.

A year later, however, Mario called Joanne and offered her a position as a stylist. They married in 1967 and began building a collection of five Northeast Ohio locations that have made the name Mario’s synonymous with the word spa.

In 1993, Conde Nast Traveler named the Aurora location one of the top 10 spas in the United States. Over the years, the hotel register and spa appointment book has included the names of David Letterman, Olympic figure skating champion Kristi Yamaguchi, Las Vegas crooner Wayne Newton and opera star Sarah Brightman. Joanne says their success in the salon business has resulted as much from her love of acquiring and rehabilitating old buildings as from Mario’s knack for wielding a pair of scissors.

“It seemed like things would knock on our door,” she adds, referring to the opportunities that led to each expansion. “But we took a lot of chances, and we worked really hard. We spent our lives devoted to it.”

Both Joanne, who grew up in the Canadian Maritime Province of New Brunswick, and Mario, a first-generation American whose parents emigrated from Italy and settled in Cleveland, say they enrolled in beauty school because it was an affordable alternative to college.

“I thought I’d make a good living,” says Mario, who opened a his first salon in 1960 with a $13,000 down payment provided by his godfather. His instincts were correct. By the time Joanne arrived in 1964, Mario had already hired three other stylists — all of whom still work for him today — to handle the business in his thriving establishment. He was doing well enough to consider a second location by 1970, when a client from Chagrin Falls suggested opening a salon there in a spot occupied by a hairdresser going out of business.

“It was just a disaster,” Joanne says of the onetime blacksmith’s shop. “Poison ivy was growing in the window. The man was working in his bare feet — the state board would never allow that kind of thing today. But it really was cute, and being on the water, (the location was really, really nice.)”

Mario dispatched Joanne — who was less than thrilled to leave the familial atmosphere of the Maple Heights location — to work in the new outpost alone. A few year later, the couple was shopping when they spotted a gas station for sale in Parma.

“We both said at the same time, ‘Wow, that would make a nice beauty shop,’” Joanne said.

The Liuzzos bought the gas station and opened their West Side shop in 1977. Mario, who saw no reason to rent property when he could own it, closed the Maple Heights location in 1984.

Eight years later, Joanne struck out on her own again, this time to take over a tiny Aurora salon the Liuzzos bought from a retiring stylist. Four years later, in 1977, a client asked if she’d be interested in buying an mid-19th century residence down the road.

“It looked like a haunted house,” remembers Joanne, who was nevertheless smitten with the dilapidated place. “Mario wasn’t even in town. I’m thinking, ‘He’s not gonna want to buy this.’”

By the time Mario returned, Joanne had signed on the dotted line for the house and the two acres on which it sat. But Mario shared his wife’s enthusiasm for the property. Refurbishing the Chagrin Falls location, however, had kindled a love of old. The couple promptly sold their Aurora shop and, after two years of renovations, the first Mario’s International Spa opened its doors in 1980.

The Victorian retreat offered massages, facials, manicures, pedicures, a whirlpool, sauna, steam room, exercise room and, of course, a full-service hair salon — a place, in short, where working women could get everything done under one roof. Joanne believes that Mario’s was one of only six or seven spas operating in the country at the time — a fact that drew plenty of out-of-town visitors, thanks to her press mailings.

At first, the Liuzzos made reservations for overnight guests at the Aurora Inn directly across Garfield Road. Patrons dined on food fetched from the inn’s restaurant in the spa’s tea parlor.

“That became very cumbersome,” she says. “My employees were running across the street with boxes all day in the snow, in the traffic.”

The lodging dilemma was solved in 1984, when a neighboring homeowner offered to sell the Liuzzos his property — a deal spawned by his concerns about the couple’s plans to put in a never-built outdoor pool. The century home was converted into a four-bedroom guest house and kitchen.

The couple began building a rambling home of their own in 1988, complete with a showplace for Mario’s collection of antique cars, on an acre between the guest house and a recently-acquired gas station they converted into office space.

“All of a sudden, once we got going, we thought this would probably make a better hotel,” Joanne said.

The couple moved from Brecksville into the guest house instead. An 1840s cabin that came with the guest house property was outfitted with a new roof, connected to both the hotel and spa, and dubbed the Cabin Lounge. It eventually replaced the hotel restaurant as the property’s main dining room after an expansion.

In 1997, the couple added two locations, a spa and wellness center at Akron General Hospital and a spa at Beachwood Place. Their newest property is the Sanctuary, a year-old new-age health and wellness center located in a rehabilitated barn across the street from the hotel on State Route 306. Here, clients can experience yoga, reiki, shiro dara, reflexology, aromatherapy, raindrop therapy and ayurvedic cuisine.

Joanne gave up doing hair when the Aurora spa opened to manage the ever-growing Mario’s empire. She haunts the corporate offices, now located in yet another home the business has purchased. But Mario is still very much the stylist, dividing his time between the Chagrin Falls, Parma and Aurora locations.

“He says that’s what he wants to be doing when his time comes — cutting hair,” Joanne says. “He loves to cut hair.”

How to reach: Marios’s International Spa and Hotel in Aurora, (330) 562-9171

Monday, 22 July 2002 09:42

Take stake in your name

In 1998, Robert Miller decided it was time he registered the name of his family’s then 4-year-old store with the U.S. Patent and Trademark Office.

The manager of Thinker Toys, an educational toy store located in Fairlawn’s West Market Plaza, envisioned at one point starting a mail-order Web site, and he knew the move would take the store name into areas far beyond its sole west Akron location — areas where other entrepreneurs might adopt the catchy moniker as their own.

As it turned out, someone already had.

Local intellectual property attorney Roger Emerson discovered the proprietors of a California toy store had beat his client to the punch by submitting an application to register the same name a mere two months earlier. Common law, he explained to Miller, entitled the family to use the name in the Akron area — and, if it was found they had used it on their Web site before the California counterpart, in the rest of the country as well.

Trademark rights are based on who used the trademark first and, secondly, in which geographic location the trademark was used,” Emerson says.

There’s even a 5-year period between the time a registration is issued and the time it’s deemed incontestable, when anyone believing they have a claim to the name in question can petition to have the registration canceled.

In the end, the family contented itself with retaining the rights to the Thinker Toys name in the Akron area alone.

“We just decided it was easiest to leave it at that just because of the expense,” Miller, now 25, says. “Roger was very straightforward about it, that this was not going to be an inexpensive [thing] for us to do.”

The cost of going to court, he adds, could well have put the toy store out of business.

The problem is a growing one, thanks in part to the Internet explosion. Businesses with identical or similar names that once operated within different geographic areas, blissfully unaware of one another because of the miles that separated them, are now bumping into each other in cyberspace.

“Once you hang your page up on the World Wide Web, you no longer have little strip mall jurisdictions,” says John Garred, an intellectual property and patent lawyer at Arter & Hadden in Cleveland. “You have broadcast that trademark to virtually everybody in the world.”

Problem can often be avoided by researching and registering a trade name (the name by which a business is known), trademark (a word, symbol or slogan identifying a good or service), and/or domain name (commonly known as a Web site address) with the U.S. Patent and Trademark Office and securing rights to it, preferably before going into business.

“Most people think of a name they like for their store or for their product, and they just adopt it,” Emerson says. “They don’t do any checking at all to see if it’s available.”

Business owners can do the work themselves by logging onto the U.S. Patent and Trademark Office’s Web site at www.uspto.gov, where visitors can access the office’s database to see if the trade name, trademark or domain name in which they’re interested is available. It also allows them to fill out an application to register it online. (Registration packets can also be obtained by calling the Trademark Assistance Center at (703) 308-9200.)

Garred suggests amateur sleuths also check local trade directories, telephone books, Yellow Pages, and other resources to make sure the name they’re considering isn’t already being used by someone who hasn’t registered it.

According to Jessie Marshall, an attorney adviser in the Arlington, Va., office of the U.S. commissioner for trademarks, the federal government charges $325 to file an application. It takes four to five months for an examining attorney to review the application.

Emerson does the job for $850 — $250 to do the research and prepare an availability opinion and $600 to prepare and file an application — a price he regards as standard in the area. He allows that most people can conduct an adequate search of the trademark and patent office’s Web site database on their own; in fact, he highly recommends doing a self-search to those who cannot afford a professional’s services.

However, he points out that most people do not have access to all the databases, some of which require a membership or fee, that he and other attorneys use. And Marshall says private search firms peruse state records, corporate filings, “any kind of commercial listing they can.”

Emerson believes many people do not have the knowledge and experience to interpret their results — for example, whether the name chosen for a new business or product is too similar to an already-registered counterpart for legal comfort.

“That’s usually where the attorney is providing the value,” he says.

He refuses to interpret information submitted by clients, mainly because he fears it is incomplete.

For those who can only afford to register one item, Garred suggests registering the name of the main product or service in block letters with a thorough description of basic goods and services. He explains that logos and slogans come and go and, in many cases, consumers are infinitely more familiar with the name of a product or service than that of its manufacturer or provider.

Also at the top of the to-register list is the domain name, along with any common misspellings. It is far more expensive to obtain a domain name already registered by someone else, he points out, than simply registering it first. And the sooner a business starts a Web site with that domain name, the better.

Business owners with cash to spare may want to consider registering what Garred refers to as “pejorative alternates” to the domain name. Common examples include yourdomainnamesucks.com and yourdomainnameblows.com.

“It’s not unusual for someone to post a whole Web page as to why your product’s so horrible,” he says. “It happens all the time.”

Marshall stresses that the U.S. Patent and Trademark Office does not dispense legal advice or wield enforcement powers. It is up to the owner of the registration to police and take action against anyone who uses his/her property. But she calls the federal registration “a huge piece of ammunition” in the fight to defend one’s right to a name or mark.

“A cease-and-desist letter to a later user saying, ‘I have a federal registration for this mark, so back off,’ means a lot more than, ‘I used it before you,’” she says.

How to reach: Thinker Toys, (330) 665-3860; Roger Emerson, (330) 535-9999

Monday, 22 July 2002 09:39

Banishing the waiting game

Mark Williams didn’t need any outside inspiration to dream up the concept that launched Virtual Hold Technology.

As a part-time call-center agent/manager for the Scandinavian Health Club chain (now known as Bally’s), he’d spend much of his shift placating frustrated members whose quick calls to clear up a billing problem had turned into an exercise in Muzak tolerance. And he discovered the astronomical cost of extensive 800-number hold times when he dropped out of the University of Akron and started his own call-center consulting firm.

Coming up with idea of a “virtual queue” that allowed callers to hang up the telephone and yet maintain their place in line was truly an example of the old saying, “Necessity is the mother of invention.”

But the 29-year-old entrepreneur readily acknowledges that it is Virtual Hold’s employees, now 18 in number, who are responsible for the five-year-old West Akron company’s prosperity. In 1999, the business posted revenue six times that earned in 1998. And Williams projects Virtual Hold will triple that figure this year.

“Once you have an idea, you’ve got to bring the people in who can help you get from Point A to Point B,” he says. “You have to surround yourself with people who are better than you and have diversified skills. ... The key is to understand what your weaknesses are and hire the people who have the skills that complement yours.”

Williams is a firm believer in giving workers “a piece of the action” and creating innovative incentive packages. Each Virtual Hold employee owns a portion of a substantial equity pool and has the opportunity to gain additional options based on the company’s performance. Such an arrangement motivates the salesman as well as the technician who might otherwise view a new order as just more work.

“One hundred percent of a small pie is not as good as a smaller piece of a larger pie,” he says. “It’s important to make sure that all of your people have their blood and sweat in this thing, too. They have to look at it as their business.”

According to Williams, that attitude helps foster the team, or family, environment he believes is so critical to the survival of a start-up concern. He encourages that camaraderie by scheduling regular company get-togethers that include employees’ families and by creating a workplace people want to come to every day. The latter is perhaps in part because of a lesson he learned from his father, who drove a truck for 40 years.

“He made good money and kept a roof over our heads,” Williams remembers. “I never wanted for anything. But he hated getting up every morning. He told me, ‘Mark, don’t make the mistake I did. It doesn’t matter how much you make. You gotta enjoy what you do. If you don’t, you’ll be miserable.’” How to reach: Virtual Hold Technology, (330) 666-1181

Lynne Thompson is a free-lancer for SBN.

Monday, 22 July 2002 09:35

The right balance

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

Monday, 22 July 2002 09:35

Knowledge is power

Some small business owners think of market research as a luxury for large companies with deep pockets, not as a tool they themselves might use.

That perception isn't accurate, says Amy Merrill, president of Data for Decisions in Marketing in Fairlawn, a full-service market research concern whose clients include car dealerships, real estate agents and insurance brokers, as well as corporate giants such American Greetings and the Sherwin-Williams Co. Small businesses can reap the same benefits from consumer surveys as multinational corporations, and at a cost that's more affordable than their proprietors may imagine.

"The value far outweighs the cost," she says. "You're moving forward with a strategic operating plan instead of seat-of-the-pants management. It saves money in the long run."

According to Merrill, companies conduct market research to validate theories about the marketplace and to build confidence among their investors. The best time to conduct market research is before the implementation of a product, program or plan.

Businesses that skip doing their homework are often forced to return to the drawing board. Merrill remembers the client who invested heavily in an advertising campaign that didn't produce the projected sales. A subsequent test conducted with consumers revealed it contained the wrong message.

"At that point, it was kind of like bailing the ship out with a spoon," she says. "The money had been spent."

In contrast, an area builder avoided a similar situation by conducting market research before using a material not traditionally used for construction in its product. When results indicated that consumers thought of the material as "weak and flimsy," the business embarked on an ad campaign addressing their misconceptions.

Merrill says the tab for a survey conducted by her company is generally based on the incidence of qualified respondents and the length of the interview with them. The cost of conducting and analyzing a single 10-minute telephone interview with a consumer is about $20; business-to-business interviews are $25 to $30 apiece.

The price of conducting a 12-person focus group runs between $5,000 and $6,000. The focus group is used to elaborate on open-ended concepts -- for example, a company is considering the expansion of a product line and wants to find out what the public believes are the benefits of such a move.

Merrill says some small businesses begin their foray into market research with a mystery shopping program, in which the customer base is replicated and a report written on the services received.

"Web surveys are fast becoming the methodology of choice, especially for business-to-business interviews," she says.

Those who provide the all-important list of e-mail addresses can commission surveys that are completed quickly and at about half the price of a telephone survey. Purchasing a list of e-mail addresses for a broad-based survey, on the other hand, costs about the same as a telephone survey but cuts completion time in half.

"We conducted 500 interviews in less that 2 1/2 days during a recent study," Merrill says.

Merrill cautions businesses against trying to save money by testing concepts with friends and family of employees.

"They're too close to the issue," she says. "They're really not an objective audience."

Ditto for bringing complete strangers into their facilities. Subjects may only say what they think the company wants to hear.

The beauty of using an independent market research firm, she says, is "nobody knows who the sponsor of the research is." How to reach: Data for Decisions in Marketing, (330) 867-0885

Lynne Thompson is a free-lance writer for SBN.

Monday, 22 July 2002 09:34

Painless plans

Dianne Moore is all too familiar with the challenges of securing a good health insurance plan for the 55 full- and part-time workers employed by Austin Tape & Label Inc. in Cuyahoga Falls.

There was a time when Moore faced daily complaints from employees who, fearing their credit histories might be damaged, paid long-overdue doctor and hospital bills simply because the company's former insurance provider hadn't.

"We've had some nightmares," admits the company's office manager of eight years.

But those nightmares disappeared three years ago, after a former employee of that insurance company introduced Moore to her new employer, Akron-based Summa Health Care. The plan Austin Tape & Label selected requires a biweekly employee contribution of $7.26 for single coverage and $27.94 for family coverage.

For their nominal payroll deductions, workers get $10 office visits to their primary care physician of choice in the extensive Summa network. The $10 co-payment applies for visits to any specialists to whom employees are referred, as well as eye exams performed by ophthalmologists listed in the Summa directory.

"Virtually, if you could have open heart surgery in a doctor's office, it would cost 10 bucks," Moore says.

Those admitted to the hospital incur no out-of-pocket expenses.

A prescription card cuts co-payments to $5 per prescription for generic drugs and $10 for name-brand drugs, while another Summa discount card provides a 10 to 35 percent price break on glasses and contact lenses purchased at select opticians and optical centers.

The company offers dental insurance through another insurance carrier, at no cost to employees, that covers 100 percent of the cost for twice-yearly cleanings and exams and 50 to 80 percent of the tab for dental work after a $50 annual deductible is fulfilled.

Austin Tape & Label isn't the only small business in the area that still manages to provide a "rich" health care plan for its employees, while others -- some much larger in size -- continue to cut benefits and increase payroll contributions. Just how does it do it?

"It starts with basic compassion for people," says Dana Shoff, vice president and secretary of DA-Stirling Inc., a Cuyahoga Falls producer of dyes for molded rubber and plastics.

Smart shopping also helps. Moore points out that at one point, Austin was paying far more than the approximately $23,000 a month (including short-term disability and life insurance premiums) it now shells out -- and getting far less for its money. She says this year's rate increase was about 3 percent.

Like Moore, Shoff has encountered the problems inherent in purchasing insurance for DA-Stirling's five employees. During her 18 years with the company, there have been insurance companies that hiked premiums as much as 40 percent from one year to the next.

"A lot of (plans) are rated by the size of your company vs. your usage, that kind of thing," she explains. "It's a killer if you're a small company and you have one thing happen, a fairly major illness or incident."

About six years ago, an independent insurance agent gave Shoff a quote from Summa for a plan similar to the one enjoyed by Austin employees. Office visit co-payments are $5 more, and there are deductibles of $500 for inpatient hospital procedures and $100 for outpatient procedures. However, workers pay nothing for their insurance.

According to Shoff, modest premium increases have, in part, allowed DA-Stirling to continue to offer the coverage, for which it pays about $2,000 a month.

"You play around with your plans when you can," she says.

For example, she switched prescription plans this year to avoid a rate increase. Employees now pay $10 instead of $8 per prescription for generic drugs; $20 instead of $15 for name-brand drugs; and $40 for highly advertised "designer" drugs not listed on Summa's preferred drug list.

"By going to that three-tiered plan, I feel I still gave everyone choices," Shoff says

Kent Clark, marketing director and group benefits coordinator for the Akron-based land surveying company Bock & Clark Corp., says it's a challenge to pay the health insurance bills for the company's 55 employees. Nevertheless, conversations about health care there usually focus on adding perks -- Clark mentions the prescription drug card added last year -- not eliminating them.

"We are fortunate to be profitable and able to maintain that coverage level," he says.

Clark estimates the firm spends $10,000 to $15,000 a month for a comprehensive preferred provider plan offered by Anthem Blue Cross and Blue Shield. The plan features an annual deductible of $300 for singles, $600 for families, and a 20 percent co-payment until the maximum for out-of-pocket expenses -- $1,000 for singles and $2,000 for families -- is met. (Deductibles and maximum out-of-pocket expenses are higher for those who choose providers outside the network.)

The coverage costs employees $18 per biweekly pay period for single coverage, $36 per pay period for family coverage.

The payoff for providing a good health care plan? The ability to retain and attract good workers.

"Sometimes that's tough to measure," Clark admits.

But he adds that Bock & Clark counts on the costs of providing good health insurance to offset those of hiring and training new employees. Moore, on the other hand, says employees have told her they've looked for work elsewhere and decided to stay at Austin because of the low contributions and comprehensive coverage.

"Our group is reasonably young, but they realize medical insurance is important," she says.

Shoff agrees. She says DA-Stirling employees have come to realize just how much their health care benefits are worth -- so much so that they've come to accept the fact that raises aren't as frequent because of the plan's cost to their employer.

"The fact that we've continued to absorb that cost, that's part of an annual increase that maybe you would see as an employee somewhere else that you won't see here," she says.

How to reach: Summacare Health Plan, (330) 996-8410; Anthem Blue Cross and Blue Shield, (800) 443-6722

Monday, 22 July 2002 09:34

A melding of the minds

The Applied Polymer Research Center at the University of Akron's College of Polymer Science & Polymer Engineering is a creation of the area's small business community -- indirectly, at least.

According to Kent Marsden, the college's director of administrative services, during the 1960s, the university began receiving requests from small businesses and industries to develop a testing center "to use the expertise of in-house facilities and people to service the greater polymer community in Northeastern Ohio and beyond."

The idea wasn't exactly a new one. Marsden says the university had been "doing the business of polymer, rubber and plastics research" since 1910, when it began teaching rubber chemistry in the science college. But as the polymer community grew, so did its needs for a complete research facility that accepted projects on a job-by-job basis, without long-term binding research agreements, issues of intellectual property rights, etc.

That facility has evolved into a high-tech lab-for-hire with access to the college's extensive research facilities. The center's staff of five full-time employees (all scientists with advanced degrees) provides services to companies big and small, some as far away as France and Brazil.

But center manager Bob Seiple estimates that 60 percent of the 1,500 clients which have gone to the center in the last 15 years are Ohio companies, smaller enterprises that cannot afford research facilities or technical people of their own.

"They are manufacturers, for the most part, who crank out a product," Marsden says.

"Our main focus is to be here to assist those companies that can't afford to have a half-million dollars' worth of instrumentation on site," Seiple says.

A decent lab, he adds, would cost approximately two to three times that figure -- and that doesn't include the $120,000 to $150,000 in annual salaries for a couple of technicians and a supervisor. Such an investment isn't always warranted.

"Many of these companies don't have ongoing problems," he says.

The 400 to 500 projects the center accepts each year range from the simple to the complex. Seiple says a typical in-and-out job might involve a small manufacturer whose customer requires independent confirmation that a material it uses to make a product meets specific guidelines -- the material might have to withstand heat to an exact degree, for example.

"Polymers aren't exact materials," he says. "There's a lot of things that can change in the manufacturing process if the manufacturing parameters are not controlled within a very tight tolerance."

The center can perform tests and measurements and provide results in a matter of hours.

"It's very important that these folks get this turned around in a reasonable amount of time because they've got product sitting in a warehouse that they can't ship until they get this data point," Seiple says.

A more involved project might concern a product -- say, a rubber mat -- that isn't standing up to wear and tear like it did a few months ago. The center can "tear apart" two rubber compounds, analyze the differences in composition, and determine how they affect performance.

Seiple says such a service, which can take two or three weeks, is helpful to companies that mold products but do not mix the materials from which they're made.

"In a given formulation, there can be anywhere from, say, five ingredients to perhaps 20," he says. "Many of these custom mixers, if they own the formulation or the recipe, will change ingredients based on economics or availability."

A number of businesses go to the center with more time-consuming endeavors, perhaps a request to develop a compound that meets certain guidelines for a product it wants to make.

Some of Seiple's examples of the work done at the Applied Polymer Research Center are intentionally vague, because one of the facility's most valuable commodities is confidentiality.

"Many clients don't like the fact that they're even in here known to the general public," he says.

A business's very association with the center, he says, may be construed by some customers as evidence of a problem with a product. Seiple says that the center's regulars -- 100 or so -- like the one-on-one relationship that develops from driving to the center, sitting down at a table and solving a problem, rather than doing it through faxes, e-mails and telephone calls.

Such close contact helps control the scope and direction of projects, as well as their costs.

"We never get so far out in dollars or in trying to tackle a problem that the client is really upset when he leaves here," Seiple says. "He guides the project; we don't guide it."

Although the University of Akron is a state school, the center itself is a self-supporting entity that reinvests profits in upgraded equipment and facility expansion. Seiple says the center's services are generally billed at $110 an hour, a rate he describes as "very reasonable" for a lab of this type. (Businesses that hire the facility to work on a long-term project or a number of projects receive a volume discount determined on a case-by-case basis.)

Center staffers are responsible for discussing projects with clients, writing up purchase orders and invoicing. No university bureaucracy is involved.

"We have been given a blanket OK by the university to provide these services to industry," Seiple says. "We don't have to jump through hoops to make that happen.

"If we had to jump through hoops, then we wouldn't have a client base." How to reach: The Applied Polymer Research Center at the University of Akron's College of Polymer Science & Polymer Engineering, (330) 972-7542

Thursday, 28 March 2002 05:35

Choose carefully

It's that time again. Between May 6 and May 31, Ohio employers dissatisfied with their managed care organization may select a new one.

But how to choose? Karen Conger, chief executive officer of Ohio Employee Health Partnership, a managed care organization with an office in Akron, says the prospect can be daunting for workers' compensation administrators in small- and medium-sized businesses who wear many different hats. She suggests asking four questions to help determine if a managed care organization is performing up to par.

1. Does the managed care organization understand the concept of "timely and safe return to work" and work with medical providers to achieve that goal? "It's not very often that somebody who is injured at work is completely disabled," Conger says. "They have some ability. If they hurt their right arm, they still have a good left arm and two legs."

One sign that managed care organizations may not be working closely enough with medical providers is that an employer's light-duty programs aren't being utilized.

2. Does the managed care organization understand what your company does? Conger says that knowledge is essential to safely returning employees to work as soon as possible. She cites a truck driver with a major knee injury. Someone who knows that the driver also unloads the truck, which is equipped with a standard transmission, could recommend to the doctor that person could return to work sooner by using a rig with an automatic transmission and limiting lifting to five pounds twice per hour.

3. When an injury occurs, does the managed care organization communicate with your company and provide timely information regarding the employee's condition?

"The sooner the managed care organization can communicate with the employer, the better they both can manage that injured worker on return-to-work issues," Conger says.

A managed care organization should contact the injured worker, the medical provider and the employer once an injury is reported so information can be verified. Accurate information, says Bob Carr, president of Ohio Comp Choice in Warren, not only reduces lapses in the injured worker's treatment but speeds payments to providers. In many cases, it is the managed care organization that first notifies an employer of an employee injury.

"They don't even know the injured worker went to the emergency room," says Conger.

That communication should also come in a form and frequency the employer prefers. Conger says some of her clients like a weekly update faxed to their offices; others demand a daily phone call.

"If you're not hearing from them as much as you feel you need to, then that's a red flag."

4. Is your company seeing a decrease in costs? Conger acknowledges that savings in medical management and return-to-work costs are often difficult to measure because of the rebates many managed-care organizations offer. But time spent dealing with workers' compensation claims should definitely be cut.

The managed care organization -- not one of your employees -- should keep track of injured employees' doctors appointments, progress during physical therapy, etc., and providing timely updates so staffing decisions can be made.

5. But Conger says the key indicator of whether a managed care organization is doing its job is employee satisfaction. "If they're constantly in your office complaining about the managed care organization, that's a red flag," she says. "If you're not hearing any bad news from your injured workers, you're probably OK."

When picking a new managed care organization, Conger recommends looking at the managed care organization report card compiled by the Ohio Bureau of Workers' Compensation and mailed in April to every employer paying workers' compensation premiums. She cautions that ratings are based on variables such as employer size and volume; therefore, they may not provide the most accurate assessment of a managed care organization's performance.

"But it's a place to start," she says.

She also suggests checking out performance with other employers and medical providers.

"The providers deal with the managed care providers every single day -- they probably deal with at least 10 in each region," Conger says. "They'll have a pretty good feel for what is going on."

Don't forget to ask about the staff, Carr says. Are they friendly and professional in addition to being knowledgeable and responsive? Is employee turnover low enough to provide a sense of continuity when discussing claims?

"We've heard complaints at some of the meetings we go to that the managed care organizations just hang up on you," he says.

And what if you discover long before the next open enrollment period that your new managed care organization doesn't meet expectations? Carr advises making your concerns known.

If they're not addressed, report them to the Ohio Bureau of Workers' Compensation's managed care organization business unit and petition the managed care organization for a release. The request, he assures, is usually granted.

"Nobody wants a dissatisfied client," he says.

How to reach: Ohio Employee Health Partnership, (330) 923-6320