Matt McClellan

As a business makes its debut in online marketing, it is immediately presented with an alphabet soup of choices in channels and media. “All businesses are after bottom-line results, and depending on the competitive landscape they face, different online tactics will have different effectiveness in delivering those results.” says Kevin Hourigan, President and CEO of Web design, Web development and Internet marketing agency, Bayshore Solutions. “Implementing the right initiatives can make the difference between creating a marketing expense or achieving a return on marketing investment.”

Smart Business spoke with Kevin about how to evaluate Search Engine Optimization (SEO) and Paid Search, or Pay-Per-Click (PPC) online advertising to get the best mileage from your marketing efforts and dollars.

How do I choose the right approach?

First things first—create goals and a timeline. Define what results you expect and when you expect to achieve them. Are you aiming to boost sales during a holiday season or to double your online leads year-over-year?

Once you have a clear list of goals and a timeline for them, do some competitive research. Look at your competitors and review their strategy. Simply “Googling” the product or services keywords will help illustrate who and where your competitors are on the web.  There are a number of tools available (such as Keyword Spy and Spy Fu) to see if they’re running PPC ads and which keywords they’re bidding on.  Browse their websites to understand which keywords they’re optimizing for.

Then do some Keyword research on these and similar relevant terms. This will give you a gage of the online competitiveness you will face and an estimated cost per lead. Comparing this with your average sale and margin data will help you make decisions about the right Internet marketing strategy including a more accurate budget for achieving the results you expect.

Finally, before structuring your web tactics, you’ll need to Create an Online Marketing Plan. Now that you’ve done the homework on your specific business and competitive situation, you can better select the right tactics to leverage in your plan.

How will I know if PPC or SEO is the better choice?

Comparing pay-per-click (PPC) advertising with search engine optimization (SEO) is an “apples vs. oranges” scenario.  Both are a type of online tactical “fruit” and depending on your situation, one may be easier to pick or better match your taste.  PPC and SEO are similar in their logistics of selecting keywords, optimizing website pages and measuring conversions, but they are each unique in specific ways.

PPC is like renting a house while SEO is like paying into a mortgage.  Paid Search can be a quick and easy way to land traffic and generate leads and sales, but it only works for as long as you fund it with ad-spend. Much like owning a home, SEO is a commitment and a long-term investment of time and effort to build your website’s organic search engine “equity” of strength to attract traffic.

Real estate professionals suggest that when purchasing a home, you should be willing to live there for at least 5 years. While implementing proper SEO doesn’t take 5 years to reap results, it is not instant (like PPC can be).  It is not uncommon that it can take 6 months or more to build the SEO strength needed to sustain a high-performance business website.

Matching these attributes to your web marketing goals as well as your business requirements of urgency, resources and skills will guide your strategic decision for which tactics to deploy.

What situations indicate SEO or PPC?

Implementing an SEO strategy has several benefits and should be executed to advance goals of:

  • Brand positioning
  • Long term positioning
  • Increasing visitors
  • Ranking higher in search engines organic results
  • Increasing the number of keywords driving traffic to your site

Once a website begins ranking “Organically” via SEO, it should continue to do so, with proper maintenance measures. SEO is an ongoing effort that needs attention to maintain relevance and competitive strength. Hiring or partnering with a search engine optimization expert will decrease the time you spend on this tactic, as well as provide the most profitable ROI.

PPC ads are a short term infusion solution. You’ll get results more quickly than with SEO methods but paid search has a hard-cost that you may not be willing to incur over the long haul. Unlike SEO, which can take months before ranking on the first page, PPC immediately offers the option to rank at the top for the right price.

PPC campaigns are great for:

  • Seasonal campaigns
  • Special offers and promotions
  • New product launches
  • Geo targeting

Investing in PPC advertising can be a very effective strategy for generating results from your site. But take into consideration that the investment includes ad spend in addition to the cost of an experienced PPC professional either in-house or an external partner to manage it correctly for best performance.

For many businesses the optimal strategy is a blend of both tactics.  PPC can be effectively used up front, while the strength of your SEO is building.  When SEO results show this established presence, it is common to find that dialing down the PPC tactic somewhat can provide more cost effective leads and sales. Ongoing experience will also reveal which keywords are better organic versus paid search investments for your business.

Your online marketing plan may include both PPC and SEO.  Knowing how each contributes to your goals and best compliments your specific situation will help you strike the right balance for powerful and cost effective online marketing.

For a snapshot of Bayshore Solutions Web marketing methodology, click to: http://www.bayshoresolutions.com/Method.

Kevin Hourigan is the president and CEO of Bayshore Solutions. Reach him at (877) 535-4578 or http://www.bayshoresolutions.com.

Much attention has been paid to the American Health Benefit Exchange, the facet of the Affordable Care Act (ACA) designed to help individuals who do not have employer-provided insurance.

The ACA also requires states to utilize Small business Health Options Program (SHOP Exchange). Each state is required to set up these exchanges by Jan. 1, 2014.

“Both the state of Georgia and Georgia businesses will face challenges when it comes to meeting requirements set forth in the ACA, or health care reform law,” says Albert Ertel, COO of Alliant Health Plans.

Smart Business spoke with Ertel about how health care reform is changing how your company purchases health insurance.

How can SHOP exchanges help small businesses with health care costs?

The whole idea of health care reform is to reduce the number of uninsureds by lowering costs. But the law is not addressing the cost of care. It is attacking the cost of insurance, and adding hopefully lower-cost alternatives.

The goal of these exchanges is to create a well-functioning marketplace providing an array of affordable, high-quality health insurance plans for small businesses and their employees.

States can combine individual and small business exchanges — an option with many proponents, because expanding the pool would mean more competition among insurers, which leads to more choice and should result in better pricing for consumers.

Also, companies that purchase insurance through the approved exchanges may be eligible for a sizable health insurance tax credit. The credit is based on an employer’s number of employees and average payroll. If the average payroll is less than $25,000, the employer receives 100 percent of the premium through the tax credit. It declines proportionally as average payroll increases to $50,000, at which point the credit is no longer available.

How will small businesses determine whether they’re eligible to participate in an exchange?

Currently, Georgia law defines ‘small businesses’ as two to 50 employees for insurance purposes. The federal law indicates eligibility is up to 100 employees. This leads to two important questions: Will single entrepreneurs become eligible? And what will Georgia decide?

What issues will the state of Georgia run into when implementing exchanges?

Numerous decisions will have to be made. First, whether the exchange is going to be public, private or a combination — the state of Georgia is working through that now.

There are questions about whether the SHOP exchange, single or multiple, will end up competing with individual exchanges. Also, there will be competition outside of the exchanges. For small business health insurance, price is king.

Additional considerations include a regional approach to the exchange, dividing Georgia into regions, similar to the approach used to enhance competition for Medicaid plans. Or another option is joining states to form a ‘compact.’ Adding multiple states to an exchange is a double-edged sword. With that expansion, you may eliminate competition by turning it over to the big players in those states, because they are already there.

What can states do to help exchanges be successful?

They have to understand what their constituencies are: small and medium-sized businesses. They must decide if they are going to do it on a defined contribution basis, and whether they are going to set up an active or passive exchange. Competition should rule, and my bet is that Georgia will choose a ‘passive’ approach. Most involved in the current committees do not want to add more levels of bureaucracy, which is something they would have to do with an ‘active’ exchange. The state would have to set up a separate committee to approve not only the carriers, but also the plan designs.

One of the keys to the success of the exchange will be the technology that is needed. If the exchange is going to be charged with approving and monitoring whether individuals qualify for the tax credit, there has to be successful transfer of qualifying data sets and information provided by the employer to the exchange. An example is payroll through the IRS. Ensuring qualification may need to occur as often as quarterly, or will be an annual process, so there will have to be an active link to the IRS, Department of Labor, HHS and several state agencies. There are many issues yet to be defined.

What are some potential problems ahead?

Health care reform expands the definition of eligibility for Medicaid. With the increased definition, Georgia may add up to an additional 850,000 to Medicaid. That’s going to be very costly.

Also, as long as it is an employer-sponsored plan, health insurance is deductible as a business expense, allowing employers to continue to provide the insurance. Also, the current system allows employee payroll deductions to be done on a pre-tax basis. That option will be lost in the individual exchange, because individual insurance is purchased with post-tax dollars.

That whole system could be up in the air, because Congress has talked about an option to reduce the deficit, which is to eliminate the tax deduction for employer-based health insurance. You talk about blowing up a system — with unintended consequences. With no incentive for employers to provide insurance, the number of uninsured goes through the roof. If you give the individuals the choice without serious penalties, many would take the ‘insurance’ dollars and fend for themselves. The result is the loss of a significant amount of people in the insurance pool, which hurts these exchanges, because insurance relies on a large pool of covered lives to be successful. I agree changes are needed, but an exchange may be unnecessary when we already have one — it’s called ‘the market.’

Albert Ertel is COO of Alliant Health Plans. Reach him at (706) 629-8848 or aertel@alliantplans.com.

Would one of your customers recommend your company to a friend or colleague? In the telecommunications industry, client satisfaction is historically very poor. Ken Williams, vice president of client services at Simplify Inc., says the key to breaking that trend is to fill the gap and bring a high level of service to the customer.

“Client retention comes down to serving your clients well — putting your clients’ success first,” he says.

Smart Business spoke with Williams about how to improve customer service and satisfaction.

What are the keys to improving client loyalty?

I think of them in two broad categories: job performance and behavioral competency. Job performance is the service you provide, the quantifiable, measurable actions a company is looking for in its telecom partner — the ‘hard’ skills. Behavioral competency represents the more qualitative, but equally important ‘soft’ skills: emotional intelligence, communication skills and interpersonal ability. Behavioral competency is driven more by the culture and values of the organization.

Every company needs both. They need quality, dependable service on all fronts and a truly professional partner they can trust.

What ‘hard’ skills need to be honed to improve customer satisfaction?

First is cost. All companies are looking to reduce costs in this extremely competitive, ever-changing business environment. Telecom costs can be a somewhat hidden goldmine of potential cost reductions. As the telecom industry faces constant consolidation and price reductions, a savvy consulting partner will find lower cost providers for its clients. But the partner must be vendor neutral. Consider the insurance industry. When an agent works with only one insurance company, you have no idea if you are getting the best pricing because the agent is only bringing one provider to the table. Companies looking to reduce telecom costs should look for a trusted adviser who is vendor neutral and sees their relationship as being with the customer, not a particular carrier. Look for an adviser whose fees are primarily paid by the carriers to avoid another layer of expense in your cost structure.

Second is speed. Enterprises who are starting new locations or moving locations cannot afford to delay openings. Consider a retail company that is opening 50 or 100 new stores a year. They sign a lease, put people on payroll, connect their utilities, start paying insurance on the location — so the quicker they get the store open, the quicker revenue starts coming in to recoup these expenses and generate a profit.

We see enterprise companies who consistently have openings delayed by 10, 20, 50 days — that’s a lot of lost revenue. Multiply that by 100 new stores per year, and it becomes a very substantial amount to the bottom line. So it is paramount to find a partner that understands carrier processes, has good installation processes, provides specialized software tools to manage the telecomplexity, and can be a productive part of a team with real estate, construction and project management to ensure facilities open on time.

The third area is responsiveness. If you are a multi-location service provider, or if your business depends on your data circuits, data network or voice lines, responsiveness is crucial. Say you are a multi-location auto parts store chain and you have a lot of repair shops calling in orders. If your phone lines go down, every minute that goes by is lost revenue. Mean time to repair for telecom services becomes incredibly important. If you want to minimize business downtime due to telecom outages, it’s important to find a partner who understands the carrier processes, has the volume to demand the best repair escalation paths with telecom carriers, and has its own team of people who work with the carrier to get issues fixed as quickly as possible. Businesses who attempt to simply go straight to the carrier for repair issues typically get lost in the morass of processes and departments and do not have insider contacts to expedite repairs. Businesses need a trusted partner to navigate that for them.

The fourth client satisfaction driver is accuracy. There are tons of horror stories of lines and data circuits being delivered to the wrong address, creating weeks or months of delays. Businesses need a partner who knows the potential mistakes that can be made, and has the processes and software in place to help identify the errors before they become critical and can catch them on the front end instead of on the back end.

What ‘soft’ skills can improve client loyalty?

First, trust is essential. Revisiting the insurance agent comparison, if you know the person works for one insurance agency, and only one, it’s hard to trust him. Is he here to help me get the best insurance I can at the best rate, or is he here to make a sale? You have to find someone independent, carrier-neutral, vendor-neutral, there to serve you and make sacrifices. When a company trusts its partner, client satisfaction goes up significantly.

Next is servant focus, which is the mindset that the biggest reward for a trusted adviser comes when its clients are doing well. Everyone claims to provide good service; not many will make sacrifices to ensure their client’s success. Of course, serving your clients will pay off in the end with solid client loyalty, but you need to start with a giving mindset and let the benefits flow back to you naturally.

Third is a sense of urgency. A business owner never wants to call a partner or carrier and tell them his store is down, the business is losing revenue every minute, and get a lackadaisical, ‘we’ll see what we can do,’ and ‘are you sure it’s our issue?’ finger-pointing. They want to hear that the carrier knows the business and has the connections to get this fixed as soon as possible.

Last is honesty. When it comes to telecom, like most technologies, most people don’t understand it. It’s easy to mask facts or place blame elsewhere. You want a partner that owns its mistakes. If they do something wrong, they will admit it and do everything they can to make it right for you.

Ken Williams is vice president of client services for Simplify Inc. Reach him at Ken.Williams@simplifycorp.com.

A growing number of businesses are using cloud computing to access resources over the Internet, store data and run applications. However, in abandoning traditional on-premise computing and data storage for a cloud-based solution, many companies fear what will happen if the remote data center housing the cloud experiences its own crash.

“As Amazon’s recent outage at its Dublin data center showed, it is possible, though unlikely, that a data center might go down,” says Indu Kodukula, executive vice president, products, and chief technology officer of Sungard Availability Services. “That is a risk that companies are able to mitigate with a managed multisite availability solution.”

Smart Business spoke with Kodukula about how managed multisite availability is changing what’s possible in the cloud, and how your business could benefit.

What is managed multisite in a cloud environment, and why is it important?

If you look at managed multisite availability, each term essentially defines what the service is. ‘Multisite’ is the next logical evolution of our cloud platform. Instead of having one, we now have multiple sites where the cloud is available. That allows the cloud to be geographically redundant.

No matter how unlikely, a cloud infrastructure that is housed in a single data center has the potential to be the victim of either natural or man-made disasters. To provide a better level of availability, a cloud provider needs to be able to keep services and customer environments up and running, even in the event of an entire site disaster.

‘Availability’ fundamentally refers to the fact that most applications can only tolerate a certain amount of downtime that is directly related to the business value of the application. Most cloud developers use the cloud to run development and test environments. To ensure high availability in a production setting, a cloud environment should be built from the ground up to run production applications and customer environments, which have a higher availability threshold than development and test environments. A multiple-site cloud environment provides availability for an application that is commensurate with what’s appropriate.

The last aspect is ‘managed.’ In contrast to many cloud service providers that essentially provide DIY service, a business should find a provider that builds the environment for information technology (IT) from day one.

Why is it important to have a cloud environment with IT capabilities?

If you are looking for a cloud environment for production that provides all the capabilities and processes expected with IT — change management, security, operations control, the ability to resolve problems and issues — those are all part of the managed services that should be provided on top of the cloud environment. That means companies can have a tremendous level of comfort and that they can trust the production environment and get the level of availability they need.

That is very different than the DIY model that many cloud developers provide, in which you could be left to fend for yourself.

Is cloud computing for everyone?

There are several points that companies typically walk through when making the decision to use the cloud. The No. 1 reason that companies want to use the cloud for their applications is to align their spending with business value. Increasingly, enterprise IT has become very capital intensive. Companies don’t know up front what business return they would receive from a capital investment in enterprise IT, but they would make the investment anyway and hope that it all works out.

Using the cloud is fundamentally different, because you only pay for the data or compute resources that you use or store, you don’t have hardware to buy or install and, in a managed environment, you don’t need internal  resources to manage your IT. Here, the service provider takes responsibility for maintaining the software, servers and applications.

Therefore, companies utilizing the cloud for enterprise IT can make investments that are in line with the business value. Then, they can invest more capital into infrastructure and resources as the application supports it and as the business becomes more successful.

However, there are multiple concerns. The moment something moves outside your firewall, you don’t own it anymore. So you have to decide what to keep in house and what to move to the cloud. Others are concerned about performance and availability of data in the cloud. The multisite availability feature is most useful for applications that can tolerate only about four hours of downtime a year, need geographic redundancy, or are responsible for keeping the business up and running if you don’t want to have the internal responsibility of running the application yourself.

How can businesses get started?

The first step is to do a virtualization assessment. Then, there is the option of what processes to virtualize. Next, take the virtualized application and decide what to keep in house and what to move outside your firewall.

Look for a cloud service provider that will guide you through the process, helping you understand and decide what applications should stay in house, either because they are not ready to be virtualized or they are too tied into business, and which applications can be moved safely. The goal is to create a roadmap for moving applications to the data center.

What applications are good fits for the cloud?

If you have an application that supports your business and has such strong growth that it will need 10 times more resources next year than it does today, the elasticity the cloud offers is a great option. If the application also uses modern technology, which is easier to virtualize, that combination makes it compelling to move that application to cloud.

The business argument for moving older technology, like ERP, to the cloud is much less strong.

Indu Kodukula is executive vice president, products, and chief technology officer with SunGard Availability Services. Reach him at indu.kodukula@sungard.com.

When signing a contract with a vendor or supplier, you are most likely agreeing to terms that are either bringing on risk or passing on risk. Almost every company doing business has partaken in this for years, but have you ever examined what is actually written in your contracts and how your company is affected or exposed?

“A product will be handled by multiple parties throughout its life cycle while moving through the entire supply chain, manufacturing chain and distribution chain,” says Dennis J. Vogelsberger, CPCU, CWCC, a partner at Neace Lukens. “Sound business relationships are vital for smooth functioning and for getting the product out to market quickly. So how do you handle mishaps that inevitably occur, while still avoiding potentially contentious situations with suppliers and vendors?”

Smart Business spoke with Vogelsberger about how to make sure your company is protected by its contracts.

How can a company protect against taking on undue risks with suppliers and vendors?

The best way is to clearly spell out each party’s responsibilities in advance through various contractual agreements, which are typically required. Because injury and liability can be created at any point along the product’s path to the end consumer, it is important to create language that shifts the burden of responsibility to the party that has the greatest ability to mitigate the risk.

The portion of the contract that deals with risk transfer is critical. Contractual laws vary from state to state, and your attorney should advise you on those nuances. Also, every contractual agreement should be looked at individually. A generic agreement is not recommended, as relationships with vendors and suppliers can vary.

What are some commonly used provisions to accomplish contractual risk transfer?

Indemnity provisions may include one or more of the following obligations: to indemnify, or to reimburse the other in the event of a loss; to defend by paying for legal defense if a third party brings a claim; and to hold harmless — to exempt a party from responsibilities in the event of damages.

Before agreeing to an indemnification provision in a contract, check the wording against the coverage provided by your insurance policy, as many times the indemnification section in the contract is broader than the coverage in the policy. In that case, you would be responsible for the uninsured liability. This is important, as many policies will not cover the other party’s sole negligence, yet many contracts have this wording in them.

Another common provision is the exculpatory provision, which is a way to eliminate a company’s liability stemming from its own wrongful acts. It may be a simple statement in the contract requiring the other party to waive claims against you that result from the business being transacted. In theory, this shields you from potential lawsuits; however, courts may not enforce it. As a result, be very wary of accepting this type of provision.

What additional provisions should businesses be aware of?

The additional insured provision allows you to transfer risk by requiring the other party to list you on its insurance policy as an additional insured, and vice versa. This obligates its insurance carrier to defend and indemnify you as an additional insured, even though you pay no premium. Within this provision, other insurance requirements may also be stated, such as limits, type of policy form and what type of insurance is required.

It is not enough to get an e-mail stating you were added as an additional insured, or a certificate of insurance. You need to see the actual endorsement, as coverage for an additional insured can be drastically reduced to limit the insurance carrier’s exposure, leading you to be severely underinsured. The endorsement will spell out how you are covered and if there are restrictions or sublimits.

On the other side, if you are adding companies to your insurance policy to gain their business, be careful. Protect yourself by doing an annual aggregate contractual liability exposure analysis with your broker to understand all the liability that you have taken on.

For example, if you add 10 companies as additional insureds throughout the year and you only have $1 million in liability coverage, is that enough in the event of a claim? Or if you have a $900,000 claim, that leaves only $100,000 left for all the other additional insureds to tap in to, which can leave you woefully underinsured.

Finally, waiver of subrogation provisions can be critical. Subrogation is the process of one party’s insurance carrier seeking reimbursement from the other party for money spent if it believes that other party was at fault. If your insurance carrier is seeking reimbursement from your business partner, it has the potential to severely damage that business relationship. To avoid deteriorating partnerships, one or both parties can agree to waive their right of subrogation against the other before a loss occurs. As with the exculpatory provision, the waiver of subrogation may not hold up in court in the case of gross negligence or willful misconduct. Additionally, your insurance company, in some cases, will have the final say because it is paying the claim and/or trying to recover monies.

Just because you sign a contract doesn’t mean your insurance company will agree to the terms and cover a claim. Understanding these terms and provisions, as well as how to properly transfer risk, is a step toward limiting your company’s overall liability landscape.

We are not attorneys and are not recommending any legal advice. All contracts and the information above should be discussed with your counsel before implementing.

Dennis J. Vogelsberger, CPCU, CWCC, is a partner at Neace Lukens. Reach him at (216) 446-3324 or dvogelsberger@neacelukens.com.

As a business owner, you are focused on customers, products, marketing and day-to-day operations. You can’t afford to be worried about your financial support. That’s why it’s important to have a trusted partner that thinks ahead, has the necessary capabilities and shares in your business philosophies.

“When you pick a partner that understands what you do, they aren’t asking you a million questions daily,” says Sean Richardson, the NorthCoast President and CEO of FirstMerit Bank. “They’re supporting you, offering new ideas and helping you grow and develop your  business.

“When you pick the wrong partner, there’s no trust. They may then begin to question your business decisions. This slows down an organization, which is not what the right partner does. You don’t want a partner that dresses it up in the beginning but then doesn’t deliver once the commitment is made — the last thing either party wants is buyer’s remorse.”

Smart Business spoke with Richardson about how to pick the right banking partner for your organization.

What should a company look for in a banking partner?

Before meeting with a bank, take the time to figure out what you are looking for from your banker. Once you outline your criteria, make sure you stick with them when you make the decision to move banks.

A good rate doesn’t always make a good financial partner. Many people say a strong relationship is most important to them, but at the end of the day they can’t pass up a promotional rate or quick return on the financial side. Then, if that relationship doesn’t turn out the way they thought it would, when they review why the relationship failed, they find they strayed from what they thought was most important.

Stick to it. Tell the banks you are meeting with what’s most important so they know what you are looking for and can tailor their solutions to meet your needs. Here are some starting points:

  • Look for multiple people within a bank that you can know, call and trust. It’s not enough to just know your banker. Have more than one contact who understands your company and can be your advocate in case your main contact leaves or gets promoted.
  • Seek financial strength. When you need cash, your bank needs to be able to step up.
  • Look for breadth of solutions. Banking is more than loans and deposits.
  • Make sure your bank has the technology to make it faster and easier to manage your finances.
  • Find a bank that focuses on your type of business by industry and size.
  • Remember, you often get what you pay for. A negotiation to pay nothing may get you an unsupportive partner that eventually loses money on the relationship.

How should a company handle its ‘interview’ with a potential banking partner?

Provide an agenda for the meeting. Take the time to outline your expectations and objectives.

Usually the bank has its own agenda, two or three things it is trying to accomplish, and it’s wise for a company to go through the same process. Here are some items to consider:

  • Understand the credit approval process and who the true decision makers are.  Do any of these decision makers truly know you and your business?
  • Review the target markets they serve and are comfortable with.
  • Understand all of the bank’s capabilities, whether it’s for credit, cash management, international, real estate financing, etc.
  • Ask about their financial situation and request proof of success.
  • Look at their customer service channel for your business and if it is recognized by other customers as strong.  Most banks say they have strong customer service — make them prove it by asking them for references.
  • Have them walk you through how and when they will reach out to your business and for what reasons — understand the touch plan.
  • Know what possible customer and vendor introductions they can make to you that will help you grow market share and add customers to your company.

Why is a bank’s touch plan important?

Too many times, the banker assumes he or she knows how a company wants to be treated from a communications standpoint. The touch plan resolves this issue by setting expectations for communication between the bank and the company.

What are the keys to getting a banking partnership off to a good start?

  • Full disclosure of financial information and future expectations.
  • Tight communication with multiple contacts on both sides.
  • Anticipation and sharing of any possible hiccups to understand how trouble could occur, but also what proactive solutions may solve the problem.
  • Identifying expectations for communication that includes scheduled, regular contact.
  • Introduction of your team and their team, face to face if possible.
  • Help from an expert when changing banks.

Sean Richardson is the NorthCoast President and CEO of FirstMerit Bank. Reach him at Sean.Richardson@firstmerit.com or (216) 802-6565.

As a business owner, you are focused on customers, products, marketing and day-to-day operations. You can’t afford to be worried about your financial support. That’s why it’s important to have a trusted partner that thinks ahead, has the necessary capabilities and shares in your business philosophies.

“When you pick a partner that understands what you do, they aren’t asking you a million questions daily,” says Tim Burke, CEO of FirstMerit Bank’s Central Region. “They’re supporting you, offering new ideas and helping you grow and develop your  business.

“When you pick the wrong partner, there’s no trust. They may then begin to question your business decisions. This slows down an organization, which is not what the right partner does. You don’t want a partner that dresses it up in the beginning but then doesn’t deliver once the commitment is made — the last thing either party wants is buyer’s remorse.”

Smart Business spoke with Burke about how to pick the right banking partner for your organization.

What should a company look for in a banking partner?

Before meeting with a bank, take the time to figure out what you are looking for from your banker. Once you outline your criteria, make sure you stick with them when you make the decision to move banks.

A good rate doesn’t always make a good financial partner. Many people say a strong relationship is most important to them, but at the end of the day they can’t pass up a promotional rate or quick return on the financial side. Then, if that relationship doesn’t turn out the way they thought it would, when they review why the relationship failed, they find they strayed from what they thought was most important.

Stick to it. Tell the banks you are meeting with what’s most important so they know what you are looking for and can tailor their solutions to meet your needs. Here are some starting points:

  • Look for multiple people within a bank that you can know, call and trust. It’s not enough to just know your banker. Have more than one contact who understands your company and can be your advocate in case your main contact leaves or gets promoted.
  • Seek financial strength. When you need cash, your bank needs to be able to step up.
  • Look for breadth of solutions. Banking is more than loans and deposits.
  • Make sure your bank has the technology to make it faster and easier to manage your finances.
  • Find a bank that focuses on your type of business by industry and size.
  • Remember, you often get what you pay for. A negotiation to pay nothing may get you an unsupportive partner that eventually loses money on the relationship.

How should a company handle its ‘interview’ with a potential banking partner?

Provide an agenda for the meeting. Take the time to outline your expectations and objectives.

Usually the bank has its own agenda, two or three things it is trying to accomplish, and it’s wise for a company to go through the same process. Here are some items to consider:

  • Understand the credit approval process and who the true decision makers are.  Do any of these decision makers truly know you and your business?
  • Review the target markets they serve and are comfortable with.
  • Understand all of the bank’s capabilities, whether it’s for credit, cash management, international, real estate financing, etc.
  • Ask about their financial situation and request proof of success.
  • Look at their customer service channel for your business and if it is recognized by other customers as strong.  Most banks say they have strong customer service — make them prove it by asking them for references.
  • Have them walk you through how and when they will reach out to your business and for what reasons — understand the touch plan.
  • Know what possible customer and vendor introductions they can make to you that will help you grow market share and add customers to your company.

Why is a bank’s touch plan important?

Too many times, the banker assumes he or she knows how a company wants to be treated from a communications standpoint. The touch plan resolves this issue by setting expectations for communication between the bank and the company.

What are the keys to getting a banking partnership off to a good start?

  • Full disclosure of financial information and future expectations.
  • Tight communication with multiple contacts on both sides.
  • Anticipation and sharing of any possible hiccups to understand how trouble could occur, but also what proactive solutions may solve the problem.
  • Identifying expectations for communication that includes scheduled, regular contact.
  • Introduction of your team and their team, face to face if possible.
  • Help from an expert when changing banks.

Tim Burke is CEO of FirstMerit Bank’s Central Region, including Stark, Tuscarawas, Wayne, Holmes, Medina, Ashland, Richland and Crawford counties, as well as the Bank’s presence in western Pennsylvania. Reach him at timothy.burke@firstmerit.com or at (330) 764-7276.

As a business owner, you are focused on customers, products, marketing and day-to-day operations. You can’t afford to be worried about your financial support. That’s why it’s important to have a trusted partner that thinks ahead, has the necessary capabilities and shares in your business philosophies.

“When you pick a partner that understands what you do, they aren’t asking you a million questions daily,” says Sue Zazon, President and CEO of FirstMerit Bank’s Columbus region. “They’re supporting you, offering new ideas and helping you grow and develop your  business.

“When you pick the wrong partner, there’s no trust. They may then begin to question your business decisions. This slows down an organization, which is not what the right partner does. You don’t want a partner that dresses it up in the beginning but then doesn’t deliver once the commitment is made — the last thing either party wants is buyer’s remorse.”

Smart Business spoke with Zazon about how to pick the right banking partner for your organization.

What should a company look for in a banking partner?

Before meeting with a bank, take the time to figure out what you are looking for from your banker. Once you outline your criteria, make sure you stick with them when you make the decision to move banks.

A good rate doesn’t always make a good financial partner. Many people say a strong relationship is most important to them, but at the end of the day they can’t pass up a promotional rate or quick return on the financial side. Then, if that relationship doesn’t turn out the way they thought it would, when they review why the relationship failed, they find they strayed from what they thought was most important.

Stick to it. Tell the banks you are meeting with what’s most important so they know what you are looking for and can tailor their solutions to meet your needs. Here are some starting points:

  • Look for multiple people within a bank that you can know, call and trust. It’s not enough to just know your banker. Have more than one contact who understands your company and can be your advocate in case your main contact leaves or gets promoted.
  • Seek financial strength. When you need cash, your bank needs to be able to step up.
  • Look for breadth of solutions. Banking is more than loans and deposits.
  • Make sure your bank has the technology to make it faster and easier to manage your finances.
  • Find a bank that focuses on your type of business by industry and size.
  • Remember, you often get what you pay for. A negotiation to pay nothing may get you an unsupportive partner that eventually loses money on the relationship.

How should a company handle its ‘interview’ with a potential banking partner?

Provide an agenda for the meeting. Take the time to outline your expectations and objectives.

Usually the bank has its own agenda, two or three things it is trying to accomplish, and it’s wise for a company to go through the same process. Here are some items to consider:

  • Understand the credit approval process and who the true decision makers are.  Do any of these decision makers truly know you and your business?
  • Review the target markets they serve and are comfortable with.
  • Understand all of the bank’s capabilities, whether it’s for credit, cash management, international, real estate financing, etc.
  • Ask about their financial situation and request proof of success.
  • Look at their customer service channel for your business and if it is recognized by other customers as strong.  Most banks say they have strong customer service — make them prove it by asking them for references.
  • Have them walk you through how and when they will reach out to your business and for what reasons — understand the touch plan.
  • Know what possible customer and vendor introductions they can make to you that will help you grow market share and add customers to your company.

Why is a bank’s touch plan important?

Too many times, the banker assumes he or she knows how a company wants to be treated from a communications standpoint. The touch plan resolves this issue by setting expectations for communication between the bank and the company.

What are the keys to getting a banking partnership off to a good start?

  • Full disclosure of financial information and future expectations.
  • Tight communication with multiple contacts on both sides.
  • Anticipation and sharing of any possible hiccups to understand how trouble could occur, but also what proactive solutions may solve the problem.
  • Identifying expectations for communication that includes scheduled, regular contact.
  • Introduction of your team and their team, face to face if possible.
  • Help from an expert when changing banks.

Sue Zazon is President and CEO of FirstMerit Bank’s Columbus region. Reach her at sue.zazon@firstmerit.com or (614) 545-2791.

Small startup businesses and individual inventors often don’t take the necessary steps to protect their intellectual property. That can hurt them in the long run, even rendering them unable to profit from their own ideas.

“Many startups look at what it costs to achieve patent protection and they say, ‘I can’t afford that,’ but that is underestimating the value of IP and properly protecting it,” says Sue Ellen Phillips, a partner with Fay Sharpe LLP. “The U.S. Patent and Trademark Office has done startups, individual inventors and small shops a big favor by initiating the provisional patent filing option.  It gives smaller entities a cost-effective route to protecting their innovations with time to explore their options for getting to market.”

Smart Business spoke with Phillips about some common mistakes startups make with their IP and how they can protect their innovations.

Why should startups be concerned about IP?

They should be concerned primarily because it can be a very valuable asset to them moving forward, whether it is in the form of a patent, copyright or trademark. If they develop a cohesive IP portfolio, it gives them an offensive position within their relevant market, and they can also use it defensively to keep others from encroaching on their market.

On the flip side of that concern, startups should be aware that there are third-parties out there with IP that may be the same or similar to what the start-up is developing, and that there are serious consequences to encroaching on the IP rights of those third-parties. Businesses can be fooled into thinking the way is clear by not seeing their innovation in the market – but that doesn’t mean someone else does not have patent rights relating to that innovation.  Not practicing your patented technology does not mean you can’t enforce it against an infringer.

Also, a strong IP portfolio can become an asset you can license or sell. Maybe you have several streams of innovative ideas that come from your initial ‘a-ha’ moment. You decide to concentrate on line A, but you also have lines B and C. As you’ve grown and your business has become more focused, you have realized you don’t really want those other ideas, but somebody else might. If your IP has been properly protected, i.e. if you have patent coverage, it can be a good revenue source, whether you sell your IP rights outright or license them and collect royalties.

What options are available for startups to protect their ideas?

A lot of startups have financial concerns. They usually aren’t working with a big checkbook, so they should take advantage of provisional patent filing, assuming they meet the patent office criteria, and file for protection of their ideas right from the start, particularly for patentable technology.

Under the provisional filing procedures, you file a patent application defining your innovation. It’s very inexpensive and the patent office doesn’t do anything with it for one year after your filing date.

Nobody looks at it, and it is kept confidential, but you have preserved your filing date.  You can also now mark your product as ‘Patent Pending.’ A year from the filing date, you must convert the provisional filing to a full utility application filing and the normal examination process begins.

This provisional patent application is especially appealing for startups, because it gives them a year to determine whether or not they can find backing, whether or not it is a viable idea they can take to market, whether they can find a licensee or buyer who wants their technology or wants to partner with them. Essentially, you have a year to get your ducks in a row.

When a startup has an innovative idea, what should the next step be?

The first step is to record every idea. This used to happen in lab notebooks. People would make sure everything was properly dated, witnessed and signed off on by someone who could verify it was their work. Today, that happens on a computer, but you still want to do it. Keep good records. Document your progress.

Then, there are three basic things the start-up needs to do.

1. Initiate the process to protect their IP, whether by preparing and filing a provisional patent application or a full utility filing.

2. Be sure your innovation does not infringe the IP rights of a third party.  This step dovetails somewhat with the first.  By conducting a state-of-the-art search or a freedom-to-operate search to be sure the way is clear for you to move forward, also known as doing your due diligence, you will be able to define your innovation in your patent application to achieve patentability over the art you find that may be close.  This step also keeps you from finding out down the road, subsequent to any expenditure of time, effort and money to get your business up and running, that your use of your innovation is blocked by the IP rights of another.

3. Make sure you have appropriate documents and agreements in place to protect your ownership interest in your innovation. It’s very important for startups to ensure they have the appropriate ownership and confidentiality agreements in place with any third-party to which they disclose their innovation. An appropriate agreement provides for maintaining the confidentiality of any and all disclosures you may make to a third party, including an acknowledgement that they will not themselves use the information to compete with you or to help someone else compete with you. Depending on the service the third party is providing, it may be appropriate to provide for ownership of innovations that may be developed by them through collaboration with you and based on your IP. Also, be sure that your own associates and employees have signed employment agreements with these same provisions. You want to block off your technology as yours – effectively building your IP portfolio. Often, a startup or individual inventor will develop something that fits well with an existing business of a third party. Your first idea might be to take the idea to that company, hoping they will buy it or help you market it because it complements what they do. Especially in this instance, you want to make sure you have an agreement in place before you disclose anything, to prevent them from declining to do business with you and then walking away with your idea. Be careful to whom you disclose your ideas.

What all can be considered intellectual property?

Your intellectual property is not just your innovation. It’s not just the device or process, but also all the know-how you used in the developing the innovation. That can include design, manufacturing and processing, and many other aspects, even marketing.

If you are taking your idea to a manufacturer to get it produced, you will probably disclose a lot more information during a meeting than you put on paper. You need to realize that is all part of your total IP portfolio. Be sure that when you get those agreements in place they cover everything you might tell someone, give them in a physical format, or transfer to them electronically. Everything you disclose needs to be covered, not just the plans for your device.

What are some common IP mistakes startups make?

Startups often underestimate the value of doing their research and due diligence, and making sure what they are doing doesn’t encroach on the IP rights of a third-party. If they haven’t taken a look at that and they aren’t protecting their own IP, what often happens is they put a lot of time, effort and money into turning their innovation into a going concern, only to get a knock on the door from a third-party who says, ‘You’re infringing on my patent rights’ and proceeds to sue them for infringement. The legal system does not take kindly to those who do not do their due diligence and do not respect the IP rights of others.

You can lose everything you have by not respecting the IP rights of others.  Of course, if you protect your IP, you can be the party knocking on someone else’s door.

Sue Ellen Phillips is a partner with Fay Sharpe LLP. Reach her at (216) 363-9000 or at sphillips@faysharpe.com.

Thursday, 01 September 2011 17:08

Innovative solutions for higher education

Running a large educational institution poses a unique set of challenges. From the duty of care requirement, to campus safety, to bedbugs in the dorms, school administrators have to keep track of a lot more than just the average student’s GPA.

“One of the issues regarding colleges and universities is they are very complicated organizations,” says Anne Mulholland, director of Aon Risk Solutions’ Higher Education Alliance. “They tend to be very focused on institutional responsibility. Most complex entities tend to be that way because there are so many aspects to control.”

Smart Business spoke with Mulholland; Angela Tennis, COO of Aon’s Higher Education Alliance; and Mary Walkenhorst, senior account executive, Aon Risk Solutions, about how new solutions available to administrators are improving safety for colleges and universities.

Why are educational institutions particularly susceptible to risk?

Schools have a lot to consider. There are now students coming to school with mental or developmental issues who never would have been able to attend school in the past, but now can because of new medications.

Alcohol is still a huge issue in educational institutions. Some schools have nuclear labs, 100,000 seat arenas, or students traveling abroad, and each of those areas pose different risks.

What types of risks should concern those involved in higher education?

Student safety is a risk that everyone needs to be aware of. Consider the past 12 months, with man-made disasters such as the spring uprising in the Middle East, or the Japan earthquake and tsunami, and the resulting potential nuclear disaster.

When parents send their child to school, they trust that the college or university will meet its duty of care and take care of that student. They expect that if their child travels abroad that the college will have thought of any contingencies that may come up. Schools often turn to risk management companies to help answer that duty of care.

When you have a mass loss, like a campus shooting, it can hang over the institution for a long time, and not just from a legal standpoint but from a cultural standpoint. It’s a malaise that’s hard to shake for years, and it carries a reputational risk, as well. Schools have done a lot of work to help make their campuses safer and more capable of being locked down.

Also, products such as Aon WorldAware can help keep people safe when they travel internationally. The program is an online country information service that tracks not only students but faculty and administration as they travel abroad. It is a coordination of whatever insurance the school has combined with the resources of the program.

The system does pretrip planning and training regarding culture, safety, political environment and recommended security procedures. WorldAware responds to both small issues, like a lost passport, and large issues, such as medical evacuation.

What are some other higher education risk issues?

Another issue is bedbugs. They can be a major headache for anyone in the hospitality industry, but specifically in dormitories. Typically, there is a heat process to remove them, or sometimes you’re just told to burn all your clothes.

Aon has developed a joint initiative with the leading pest control provider, which uses a methodology that freezes the affected area and reduces property damage. It also reduces the time necessary for rooms to be out of commission. A major residence hall infestation can cause the residence hall to be unavailable for months, creating quite a juggling act for the university.

How can administrators facing these risks manage them?

Enterprise risk management is a way for them to think of their risk, because it is a less silo-focused approach. It has the benefit of trying to capture all the risks the university faces in one overall analysis. One of the biggest questions is, ‘How do we know what we don’t know? How do we know what’s on the horizon?’

ERM is a good paradigm for organizations to use to interpret their current risk profile and what new risks may be coming at them. Then they can build a business plan to avoid it, mitigate it or deal with it.

Can other types of organizations use this approach to risk?

It is a framework that is useful not just for colleges and universities but for any complex organization. There is no one-size-fits-all approach to ERM.

ERM is not an insurance product; it’s a way of thinking about risk. It’s a major way to look at risks with a comprehensive focus.

Your risk management partner can help develop strategies to avoid the perception of ERM being an add-on, or something a consultant dreamed up. To work properly, it has to come from the culture itself, so it has the best chance of being successful. The analysis and implementation strategy have to fit the organization’s culture, or it’s just not going to work.

Anne Mulholland is director of Aon Risk Solutions’ Higher Education Alliance. Reach her at anne.mulholland@aon.com. Angela Tennis is COO of Aon Risk Solutions’ Higher Education Alliance. Reach her at angela.tennis@aon.com. Mary Walkenhorst is senior account executive, Aon Risk Solutions. Reach her at (314) 854-0702 or mary.walkenhorst@aon.com.