Cincinnati (1116)

You might think I’m a warm, fuzzy and “Kumbaya” kind of Guy. Most of the time I am, but I have strong feelings about e-mail etiquette and what it takes to get your e-mail read — and answered.

As someone who gets dozens of e-mails every day and sends a handful of e-mails every day to get strangers to do things (“digital evangelism”), I offer these insights to help you become a more effective e-mailer.

Craft your subject line. Your subject line is a window into your soul, so make it a good one.

First, it has to get your message past the spam filters, so take out anything about sex and money-saving special offers.

Then, it must communicate that your message is highly personalized. For example, “Love your blog,” “Love your book,” and “You skate well for an old man,” always work on me. While you’re at it, craft your “From:” line, too, because when people see the “From:” is from a company, they usually assume the message is spam.

Limit your recipients. As a rule of thumb, the more people you send an e-mail to, the less likely any single person will respond to it, much less perform any action that you requested.

This is similar to the Genovese Syndrome (or the “bystander effect”): In 1964, the press reported that 38 people “stood by” while Kitty Genovese was murdered in New York.

If you are going to ask a large group of people to do something, then at least use blind carbon copies; not only will the few recipients think they are important, you won’t burden the whole list with everyone’s e-mail address. Nor will you inadvertently reveal everyone’s e-mail address.

Don’t write in ALL CAPS. Everyone probably knows this by now, but just in case: Text in all caps is interpreted as YELLING in e-mail. Even if you’re not yelling, it’s more difficult to read text that’s in all caps, so do your recipients a favor and use standard capitalization practices.

Keep it short. The ideal length for an e-mail is five sentences. If you’re asking something reasonable of a reasonable recipient, simply explain who you are in one or two sentences and get to the ask. If it’s not reasonable, don’t ask at all.

My theory is that people who tell their life story suspect that their request is on shaky ground, so they try to build up a case to soften up the recipient.

Another very good reason to keep it short is that you never know where your e-mail will end up – all the way from your minister to the attorney general of New York. There is one exception to this brevity rule: When you really don’t want anything from the recipient and you simply want to heap praise and kindness upon him or her. Then you can go on as long as you like!

Quote back. Even if e-mails are flying back and forth within hours, be sure to quote back the text that you’re answering. Assume that the person you’re corresponding with has 50 e-mail conversations going at once. If you answer with a simple, “Yes, I agree,” most of the time, you will force the recipient to dig through his deleted mail folder to figure out what you’re agreeing to.

However, don’t “fisk” either (courtesy of Brad Hutchings). Fisking is when you quote back the entire message and respond line by line, often in an argumentative way. This is anal if not downright childish, so don’t feel like you have to respond to every issue.

Use plain text. I hate HTML e-mail. I tried it for a while, but HTML is not worth the trouble of sending or receiving it. All those pretty colors and fancy typefaces and styles make me want to puke. If you can’t say it in plain text, you don’t have anything worth saying.

Control your URLs. I don’t know what’s gotten into some companies, but the URLs that they generate have dozens of letters and numbers.

It seems to me that these 32-character URLs have almost as many possible combinations as the number of atoms in the universe — I don’t know how many URLs a company intends to create, but it’s probably a smaller number than this. If you’re forwarding a URL and it wraps to the next line, it’s very likely that clicking on it won’t work.

Guy Kawasaki is the co-founder of, an “online magazine rack” of popular topics on the Web, and a founding partner at Garage Technology Ventures. Previously, he was the chief evangelist of Apple. Kawasaki is the author of 10 books including “Enchantment,” “Reality Check” and “The Art of the Start.” He appears courtesy of a partnership with HVACR Business, where this column was originally published. Reach Kawasaki through or at

Most of us sincerely want to be a better person, manager, spouse, significant other, parent, child or Indian chief. Certainly, good intentions and desire are the first steps in self-improvement. The second step is an introspective discovery process combined with a bit of discipline in order to make meaningful progress.

To get started, ask yourself several pointed questions. Has anyone ever made suggestions to you about your management or communication style? Maybe it was a boss or mentor, a good friend or an associate earnestly trying to give you a few constructive tips on how to improve. Best yet, it might have been self-discovery after you did something that did not quite measure up to your own expectations.

Reality is, for most of us, our strengths can also be our biggest weaknesses. As an example, if you're a type A, anal-retentive person who is detail-oriented to a fault and always crosses every T and dots every I, possibly this strength has morphed you into becoming a micromanager of others. Or, maybe you consider yourself a disciple of the great communicator, the late President Ronald Reagan, because you are a terrific speaker who can captivate the other person in one-on-one conversation or every individual in a large audience. The downside of this is maybe you're not a great listener because you fall in love with the sound of your voice and your words. This could translate into you talking too much and unintentionally giving the wrong impression of not being receptive to another person's point of view.

The list can go on and on. The trick, however, is to recognize what you are and what you're not, and then tweak your style for the greater good, helping not only yourself but also those with whom you interface by making yourself more effective and perhaps even a little easier to take.

Try this. Create two columns on a legal pad or spreadsheet and list all of the attributes you think you possess in terms of your management capabilities/style. Keep the list short and focus on what's important, as this is not an inventory of everything you've done or learned since the third grade. Once you've captured two, three or four key characteristics, in the next column record a corresponding set of those things you know don't help your cause.

Next, re-read this personal inventory of pros and cons and look for patterns. If you note, as an example, that you are incredibly disciplined and seldom give yourself any slack, see if you also jotted down on the detractor side of the ledger that people tend to think you push subordinates too hard without differentiating between what is mission-critical versus basic tasks. If you spot this corresponding weakness, it doesn't necessarily mean that you suffer from obsessive compulsive disorder, but you might just need to recalibrate your standards when dealing with others, recognizing that your subordinates don't have to become your clone to be successful.

Once you've drilled down on the most important characteristics that you want to change, it's time to develop a game plan. For illustrative purposes, let's again assume you're that great communicator, but you sometimes go over the top and incessantly interrupt others, which leads to missing out on their ideas, not to mention becoming a bore. If this is your Achilles' heel, you must focus on the triggers that cause you to behave in this manner in order to strive for improvement.

Maybe you're really not self-consumed, but instead, your mind races ahead to follow-up thoughts that you want to make without allowing enough time for others to absorb and comment on your initial words of wisdom. This suggests you need to put a mental circuit breaker on your lips after you make your first major point, allowing for a long pregnant pause to let others amplify on your point or introduce an opposing or complementary thought. By doing this, you'll help make the conversation or presentation more interactive, which may lead to better resolutions or open the door to new unexplored concepts or opportunities.

Armed with this newly created self-assessment, you'll become a more productive and better leader who has learned to make your strengths stronger and reduce the negative effects of your weaknesses.

Michael Feuer co-founded OfficeMax in 1988, starting with one store and $20,000 of his own money. During a 16-year span, Feuer, as CEO, grew the company to almost 1,000 stores worldwide with annual sales of approximately $5 billion before selling this retail giant for almost $1.5 billion in December 2003. In 2010, Feuer launched another retail concept, Max-Wellness, a first of its kind chain featuring more than 7,000 products for head-to-toe care. Feuer serves on a number of corporate and philanthropic boards and is a frequent speaker on business, marketing and building entrepreneurial enterprises. Reach him with comments at

A unique new book with an unorthodox, yet proven approach to achieving extraordinary success.

What does it take to grow rapidly and effectively from mind to market?

This book offers an unconventional philosophy for starting and building a business that exceeds your own expectations.

Beating the competition is never easy. That’s why it requires a benevolent dictator.

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Also available wherever books and eBooks are sold, and from Smart Business Magazine and Contact Dustin S. Klein of Smart Business at (800) 988-4726 for bulk order special pricing.

Tuesday, 03 July 2012 10:30

The cost of ownership

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There are plenty of warnings about wanting too much in this world, whether it is in your personal life or as the CEO of a company.

Remember the dot-com bust? Prior to the technology market bubble bursting, tech companies could do no wrong. Investors were ignoring basic fundamentals because “this was a new era” and the old rules didn’t apply. Well, it turns out the rules did apply. As did one very old rule about “what goes up, must come down.”

Tech company valuations were slashed by billions, thousands were laid off and the ripple effect was felt throughout the economy.

More recently, we experienced the real estate bust. It was pretty much the same story — people ignored basic investing and common-sense rules and the prices for real estate went sky-high, and then the bubble burst. The results were also the same: billions in value lost, thousands of jobs affected and the ripple effect was felt throughout the economy.

There is plenty of blame to go around for these events, both by investors who got caught up on the hype and CEOs who were trying to get rich, or at least richer than they already were. It was a quest to have the biggest paycheck, the biggest yacht, the biggest plane and the biggest house. The reckless CEOs were trying to use get-rich-quick methods that are dangerous to everyone.

There are four common ways to grow a company:

  • Going public through an IPO
  • Mergers and acquisitions
  • Debt financing
  • Self-funded organic growth

IPOs cost a lot of money to launch and even more money to maintain. The second and third methods are all about leverage. Overvalued stocks and overleveraged companies were major contributors to the tech and real estate busts. Too many CEOs were borrowing more and more money to fund the next great merger or open more locations. When tough times hit and the money dried up, they had lived well beyond their means and a harsh reality set in.

Despite these recent economic failures, many companies are still playing with borrowed money, overleveraging themselves and putting their entire company at risk. You have to understand the leverage game and the risks that come with it. The best way to grow a company is to create an environment that fosters growth and to focus on building long-term relationships.

This isn’t to say that you won’t make a strategic acquisition here and there or occasionally borrow money to fund needed expansions. The key is to do it in moderation and understand how too much debt can hurt your ability to grow. Making a mistake with debt can spell doom for your company and everyone in it.

Your responsibility as CEO goes far beyond yourself. Investors obviously are counting on you, but so is everyone that works in your organization. For some of your vendors, you might be their largest account. If you suddenly went out of business, how would it affect them? Would you create your own mini “bust” that rippled through the local economy, even on a micro scale?

In today’s world, you need to take a hard look at how you are leading your company. One wrong move could cut you off from the credit you need to fund your leveraged growth. With no money, the organization often collapses under the weight of its own debt.

It’s OK to be satisfied with what you have and not play the high-risk game of leveraged growth. Growth is good but not when it requires an “all-in” risk that can ruin your organization and the lives of the people who work there. Remember, more often than not, slow and steady wins the race.

Fred Koury is president and CEO of Smart Business Network Inc. Reach him with your comments at (800) 988-4726 or

Asked to take the managing partner position of Ernst & Young’s Cincinnati office in November 2008 with the recession looming was both good and bad timing for Julia Poston. On one hand, she quickly realized the amount of challenges and drastic changes that the firm would need to cope with, but on the other hand, she could utilize personal strengths and take the firm to levels of business it hadn’t been before.

It didn’t take long for the effects of the recession to cause clients of the accounting firm’s 300-employee Cincinnati office to begin to pull back and shelve projects. Poston had to look for alternative ways to keep clients and customers satisfied while also making sure the employees of the firm understood what was needed of them moving forward.

“We were pressed to figure out how to manage our business a little differently with our revenue dropping as clients shelved things. Trying to manage the business with a smaller revenue base just meant that you had to be more frugal,” Poston says. “We really looked closely at where we could drive some of the costs out of our business without impacting the services to our clients. There were people challenges too, because people were just really worried about the recession and what it was going to mean and they felt vulnerable.”

Luckily for Poston and the firm, those were things that played to her strengths as a leader. She had to drive transparency and openness with her employees as the firm dealt with the changes of a recession.

“It caused us to have to ask them to do more with less and we had a chance to really see who the leaders were during those tougher times,” she says.

Here is how Poston took the negatives of doing business in a recession and turned them into game-changing initiatives for Ernst & Young.

Communicate in tough times

As the recession began to take effect and some of the early signs of change crept into the firm, Poston had to be upfront and clear about what this meant for employees.

“We really looked to people to come to us with ideas about how we could do things differently and challenge things that we once did,” Poston says. “What we tried to do was say to our people, ‘Hey guys, we’re in the midst of a recession and we need you guys to act like you own this firm too. Tell us how we’re going to manage through this. Rather than feeling that things aren’t as great as they once were, tell us what you would do if you were running this business.’”

In order for this approach to work, everyone in the firm had to understand that changes were inevitable and they had to embrace that fact.

“Change happens in every business,” she says. “You can either try to manage around it or you can take it and say, ‘All right, how do we need to continue to transform what we do, how we serve our clients, how we behave internally as an office given this change and react to it?’”

To get people to step up with ideas and have the urge to be engaged in helping the firm forward, Poston was open and transparent.

“If you want everybody to own the goals of your business or your practice and not just have their own personal individual goals … you have to be very transparent with them,” she says. “You have to co-develop the goals with them and then build in the accountability with all levels. The only way to do that is with transparency. Just kind of barking that out and setting those goals and telling everybody that everyone has to own those goals doesn’t work if people don’t feel that they’ve got all the right information and transparency into the process.”

Poston and her other partners took the recession as an opportunity to engage all of the firm’s employees in new ways to run the practice.

“We need to approach our work and our client services differently coming out of this recession,” she says. “We need to have far greater diversity of thought. We need to make sure that we bring, not just our partners to the table to help make decisions as it relates to our client’s business issues, but we need to invite our younger people to the table to think about how we come up with solutions and creative ways to help our clients deal with their business issues. We really have had a big emphasis on connecting everyone from partners to staff both in horizontal and vertical teamwork. We’ve really changed the culture to challenge people to speak up and share their ideas no matter what level they are in the firm.”

Through the process of communicating what it would take to get through the recession and getting employees engaged, it became evident who the leaders in the firm were.

“The people who stepped up and said, ‘We can manage through this change,’ are the ones who are most vital to our business and largely have been the ones who have been most successful coming out of the recession,” Poston says. “The ones who were kind of paralyzed by the recession and didn’t show an ability to adapt to change and doing things differently, they didn’t show great strength. They showed a resistance to change and wanted to harken back to the old days, which the old days aren’t back again.”

Discover new leadership styles

Poston wanted everyone to challenge the old ways of thinking and doing business at Ernst & Young.

“One of the things that’s been a game changer for us was we took our partner group and did something different in terms of challenging leadership styles and creating an environment of teamwork in a really different way than we had ever done before,” Poston says. “One of the things that we did was we had an off-site, three-day, two-evening event out at Camp Joy, which is a camp that has a lot of those outdoor activities like ropes courses and those physically challenging things. We called it the partner leadership challenge and it was a combination of those activities outdoors along with facilitated classroom on leadership challenge. Everyone had to attend and it was a huge game changer for us because there became an element of trust and partnership that we thought we had before, but we didn’t have any idea just how far we could take that.”

The leadership challenge and classroom part of it was started with a 360-feedback process that all the partners needed to do with at least 10 people — people above them, at their same level and below them.

“We really openly dived into all of the feedback that each of us had gotten and set goals for ourselves and buddied up to help drive that accountability,” she says. “We all got a lot of lift from one another by doing this, and that’s the kind of culture we want here — a culture of LIFT. LIFT stands for leveraging insights from teamwork with the idea being that if we team and trust in it in an extraordinary manner, we will be able to leverage each other’s insights and do an even better job serving our clients and taking care of our people here.”

The partners took it upon themselves to make sure they were acting as the best leaders they could and made sure they didn’t just talk about it, but demonstrated it.

“We identified what we thought were the five key practices of good leaders and really honed in on those,” she says. “Do we model the way? Do we actually walk the talk? Do we inspire a vision for our people and communicate that? Do we challenge processes? Do we enable others to act? Lastly, do we encourage the heart? Do we really let people get into what they’re doing? We took those five practices of leadership and we discuss those in each of our partner meetings and remind each other that we have to model the way.”

Keep your clients close

Poston understood that it wasn’t just her firm and the accounting industry struggling to get through the recession. The firm took advantage of the situation by getting closer to clients and helping them achieve better ways of doing business as well.

“When times are good and companies are growing and earnings are growing, sometimes there’s not really a burning platform for them to be interested in hearing our observations of how other businesses are tackling different issues,” Poston says. “When you’re in a recession and everybody is really struggling, we found our clients were far more interested in hearing our ideas on how they could approach the recession. They welcomed other thoughts and ideas and observations from others and they might not have as much previously. When things are good, you’re not concerned about best practices.”

It’s easy to relax and allow business relationships to just carry on when things are running smoothly. However, it’s when times are tough and those relationships are put to the test that you have to really deliver on the promises of service and support.

“If we had this come again, we would do the same thing in terms of investing more and more with our clients and spending more time with them and building those relationships so that you can help them and be a partner with them,” she says. “When the economy starts to turn, you’ve positioned yourself far better as a trusted business adviser to them. Spend more time with your clients when they are struggling and have bigger business issues, not less.”

Competition in the accounting industry is fierce, so it is crucial that Ernst & Young find ways to differentiate itself to clients.

“We’re in a really competitive business,” Poston says. “We’ve really coached our people to not take any client interaction for granted and always be at our best. A differentiator between Ernst & Young and our competitors is over the course of the last year and a half, we have really globalized our firm. We have the same methodology for client service and delivery, the same metrics, the same type of communications across the entire globe. The reason that that’s important is that it’s a pretty big benefit to our clients that have a global footprint. Our project teams, our integrated solutions are very consistent across the globe. That consistency that we have in our firm across every location is a huge plus. That’s not necessarily the structure for other firms.”

While the changes in thinking, communication and leadership have been a huge help to getting the Cincinnati office through the recession, the top priority and most helpful aspect of those changes were the clients.

“Make client service the No. 1 thing you do,” Poston says. “If you approach your business from what would be best for your clients, chances are you’ll probably be doing the right thing. And then, just really invest in your people. Take care of them and give them challenging things to do and let them be a part of the decision-making and treat them like the great young professionals that they are and they’ll deliver. You’ll have great retention and have really satisfied clients.”

HOW TO REACH: Ernst & Young Cincinnati office, (513) 612-1400 or


-          Communicate your challenges and changes to get employees engaged.

-          Challenge the old ways of doing things.

-          When times are tough make the best of client and customer relationships.

The Poston File

Julia Poston

Managing Partner

Ernst & Young Cincinnati

Born: Boston, Mass.

Education: Attended Miami University and received a B.S. in accounting

What was your first job and what did you learn from that experience?

I worked in a restaurant when I was 16 years old, and it was a really great job because you work really hard, but you learn all kinds of valuable things: how to operate with equipment, how to deal with customers and handle money. That’s when I started liking accounting because I enjoyed interacting with customers and the financial end of it as well. It was a great starting place to learn some valuable skills.

What is the best business advice that someone has given you?

My dad used to tell me that business was so unethical. I didn’t agree with him, but I’ll never forget that because, as a business leader, we have a responsibility to be good corporate citizens.

What is one of the most stressful things about tax season?

Right now, given the political environment, there is an awful lot of chatter and proposals of how our tax system might change. One of the things that we try hard to do is understand what these proposals are and talk to our clients about them so that if any of these come to be, we will be able to help our clients think about them and respond to them.

If you could speak with anyone either from the past or present, who would you speak with?

From a business standpoint, there are some incredible business leaders that I admire. A.G. Lafley was an incredible CEO at P&G, and I find those kinds of people inspiring.

Saturday, 30 June 2012 20:02

Tom Nies: Requirements for great entrepreneurship

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Entrepreneurs are a driving force of our economy. They help to create the jobs that deliver value, that deliver paychecks to people to raise their families, send their kids to college, buy cars from the local car dealer, etc. Entrepreneurship, for many, has now become the new “great modern dream” — that is, to become an innovator and leader, who can see and take an opportunity, and so be more able to shape and control one’s destiny in today’s globalized world.  To make such a difference one must truly be different. Consider

-          In the United States, about 600,000 to 800,000 new businesses are started each year.

-          Seven out of 10 new jobs are created by entrepreneurial businesses.

-          The National Science Foundation, U.S. Department of Commerce and others have reported that since World War II, “Smaller entrepreneurial firms have been responsible for 67 percent of all inventions and innovations, and 95 percent of all radical innovation in the United States.”

This data, from important government organizations, prove that it is not the large, and very large, organizations that are the innovators and leaders but the “smaller entrepreneurial firms,” which start small and then become large through their entrepreneurial spirit and innovative mindset. 

Entrepreneurial success

Three factors are among those that contribute to entrepreneurial success: passion, luck, and willingness to risk greatly and be or offer something that is different and better.


Passion is talked about often. But what is it really? Passion is the willingness to suffer and endure pain, sometimes very great pain, for one’s beliefs. Passion is the foundation of entrepreneurial success.

Any leader must possess passion for what he or she does if success is to be achieved. Without the willingness to endure very hard and uncertain times and to defer gratifications, there will be little chance of success, and little reason for others to follow. Passion also has an ingrained essence called persistence. Without persistence, one might talk a good game — but doesn’t play the game for keeps.


Luck, I believe, is everywhere, although not everyone sees luck when it beckons. That’s because luck favors only the alert and prepared mind. But, leaders do recognize luck when it happens and seize lucky moments to advance. 

The word entrepreneur means “to see and to take an opening.” Therefore, entrepreneurs must be persons of vision and of action. The word opportunity suggests an open port, or portal, for success, which demands the unity of purpose that generates the power needed to achieve the successful gaining of the opportunity recognized. 


I simply cannot overestimate the importance of being in the right place at the right time.  But finally — and this is what separates an entrepreneur or job-creator from a job-seeker — is an entrepreneur’s willingness to risk almost everything — comfort, income, home, health and, yes, oftentimes even family involvement, to seek opportunities, to take openings and to satisfy as yet unmet demands. 


Passion, luck and willingness to risk are the requirements to tread the path of the entrepreneur.  Sounds easy, but it’s not. Because what I forgot to mention was success also demands action.  The greater the success, the bolder and more persistent the actions required. This takes courage, creativity and commitment. While you must be willing to lay it all on the line, you must also have these latter-mentioned attributes.

Is there more? Of course. You really didn’t think there were just three requirements for great entrepreneurship did you? There are many more. But those are the nub, the essence, the core of it.

If you’re considering building a business, becoming an entrepreneur, controlling your own destiny, creating jobs and making a real difference in this world, do you have the three essentials?

Thomas M. Nies is the founder and CEO of Cincom Systems, Inc. Since its founding in 1968, Cincom has matured into one of the largest international, independent software companies in the world. Cincom’s client base spans communications, financial services, education, government, manufacturing, retail, healthcare and insurance. For more info visit

Determining how much credit your business can obtain or should have can seem like a complicated endeavor for businesses. However, your banker can simplify the process and help you determine that figure, says Stephen Klumb, senior vice president and chief lending officer, National Bank & Trust.

“A line of credit is a commitment by a bank to a borrower to advance short-term money, working capital or receivables financing over a specified period of time for short-term working needs,” says Klumb. “And that line of credit can be estimated through a fairly simple formula.”

Smart Business spoke with Klumb about how to work with your banker to determine your line of credit and how to identify the right banker to help you through the process.

How can a business determine what its line of credit should be?

Take your total estimated annual gross revenue (sales) and divide by 365. That gives you your daily cash need. Next, determine your total number of accounts receivable, plus inventory days on hand (Use of Funds) and subtract your accounts payable days on hand (Source of Funds), and this is your usage. Multiply your daily cash need times the usage (accounts receivable days less accounts payable days) and you will get the estimated line of credit needed for your business.

For example:

Sales ............... $9,125,000/365 = $25,000 (daily cash need)

Accounts Receivable days on hand ............. 68 days (usage of cash)

Add Inventory days on hand .................... + 30 days (usage of cash)


........................................................................98 days (usage)

Less Accounts Payable days on hand ........ - 52 days (source of cash)


...................................................................................46 days

Multiply by usage ................................ x $25,000 (daily cash need)


..........................................................$1,150,000 (estimated need)

Your company estimated line of credit need is now known ($1,150,000 in the example) and that number sets the tone for discussion in terms of the amount of money you need in working capital to operate your business.

Is this number a moving target?

Generally, it’s a one-year commitment. Most customers do an annual projection, but if, for example, the business picked up a new contract or lost an existing contract, then it would become a point of discussion. A new contract could require an adjustment to the working capital needs. However, the number is not always a moving target. You might instead do a guidance line, which is a little extra during a period of time that eventually comes back to the normal operating line.

Is there such a thing as too much credit?

Absolutely. Too much credit, when not monitored, could become a problem if you’re allowing your receivables to go out too far. Talk to your bank about what your peer group average receivable days are and to get perspective on where you fall within that group. If your receivables are coming in later than those of your peer group, a good bank would recommend that you address your internal collection process to get your receivables in more quickly; otherwise, you’re borrowing money and the additional credit is taking up profits.

How do banks determine what credit line they’re willing to extend?

Because they’re giving you a line of credit to operate, they need to know your liquidity, so they’re going to use a current ratio. Current ratio is determined by taking current assets minus current liabilities, or a quick ratio, those assets that can be easily turned within a short period of time to produce cash.

Sometimes a line of credit will be established, but if it never goes to zero during a 12-month cycle ,you might lower your line and make a portion of it term debt to get back in balance between term debt and line of credit debt.

What can a company do to set itself up for a line of credit?

The best way to do it is to be on top of your accounts receivable aging report. Monitoring your accounts receivable for payment and having those reports available lets the banker know you are aware of where your receivables are. Having receivables crawl into 90 days could affect your operating line and won’t be counted as collateral.

What are some common mistakes businesses make when applying for a line of credit?

Not having their controller or accountant in meetings with their bankers. When you’re talking to a banker and he’s asking specifics, having the people there who know the answers makes the banker feel more comfortable. Meetings should include the owner, accountant and CFO for lines of credit or term debt. And be honest with your bankers. If you’re having a problem, the bank’s going to know, and it gives you the opportunity to explain why it happened.

How can your choice of bank affect how creditworthiness is determined?

A very large bank may use systems to determine credit. In short, the commercial lender feeds information into an often-automated system, and it comes back with an answer.

At community banks, generally speaking, there is individual involvement. They don’t use those types of systems and instead give more attention to the numbers and to understanding the individual business’ situation.

Regional banks are compartmentalized by market size and often have multiple officers handling each market. Once a business jumps into another category, it has to get a new loan officer. Today’s market is not just about being a lender, it’s value added. If your banker can’t bring value to the table, the bank is just a commodity, and the lowest price wins. Community banks provide a higher value because they are selling the value that can be brought to the relationship going forward.

Stephen Klumb is senior vice president and chief lending officer with National Bank & Trust. Reach him at 1-800-837-3011.

Insights Banking & Finance is brought to you by National Bank and Trust

If your business is looking for a better way to communicate, Session Initiation Protocol (SIP) may be the answer. SIP, a signaling protocol, can improve voice and video over Internet Protocol, video conferencing and file transfers. And best of all, it can spell substantial savings for a business over traditional phone lines, says Anton Loon, director of enterprise sales at PowerNet Global.

“When a company uses SIP technology instead of traditional phone lines, it can move much more quickly and at a lower cost,” Loon says. “SIP solutions are available for businesses of all sizes, from a small company that needs only one line with local and long distance for about $20 per month, all the way to corporations that have large call centers that operate 24/7.”

Smart Business spoke with Loon about how companies might benefit from implementing a SIP solution.

What is the primary difference between a SIP solution and traditional call routing?

A traditional time-division multiplexing (TDM) system uses physical switches to route calls. SIP uses IP routing, which provides a company’s employees with a much easier way to connect with each other, as well as the outside world.

SIP is not a new technology, so why have companies only recently begun to adopt it?

In 1994, IT managers knew that ‘AT&T worked’ in the telecom industry. If a business switched to another company and there were mistakes as a result, that IT manager’s head was on the line.

It’s been the same with SIP over the last few years. IT directors and managers have been leery about making the switch to this technology because, as with most things in life, change is scary. However, the technology has now progressed to the point that the cost savings are just too good for a business to pass up.

How can SIP improve a corporation’s flexibility and efficiency?

In terms of flexibility, a business can have the service up and running within 24 hours of requesting it. For example, a construction company can add trailers to various job sites and have phone service at those sites within a day.

The same holds true if a business moves to a new location. With a traditional system, you would typically have to wait 30 to 45 days for the new phone lines to be operational.

With a SIP solution, you can move around and operate anywhere in the world. SIP also provides flexibility for call center operations, because you can launch a new operation within days. For businesses like telemarketing centers, this means you can start selling more quickly.

In terms of efficiency, choosing a SIP solution will eliminate the 30 to 45 day waiting period required to implement a TDM system, as well as all the time that is required to coordinate the effort between all parties.

What are the three most important things that companies need to know about SIP technology?

First, that it works. There is no reason to fear this technology. Second, it’s scalable. This is important because it allows you to start small to test the waters in order to get comfortable with the technology. It also allows you to ramp up for a larger call volume at any given time without having to add equipment to handle the increase. For example, if you want to launch a new outbound calling campaign tomorrow, you can do that. It also goes the other way, in that you can cut back on the number of phone lines servicing your company if business slows down. There’s a misperception that SIP is fraught with quality issues, but that is not the case. In our experience, there are no more service tickets with SIP than there are with traditional TDM systems.

Finally, the technology is here to stay, and it will only get better and more robust as time goes on. Another common misconception about SIP is that it’s the future, but it’s not. It’s here now, and it’s not going anywhere.

How is SIP being used practically in businesses?

A good example is a company in the health care industry. Their patients have to call in to confirm appointments and get verification of their medications. Obviously, this is a critical operation. This company had a TDM system and was dealing with high costs and quality issues. Then it switched to a more cost-effective SIP solution with a redundant platform. Now if it has problems with one of its carriers, it can signal to another platform. In total, it can toggle back and forth among three platforms to avoid outages.

How can a SIP solution help companies better manage remote employees?

Remote employees have become more commonplace today — not just salespeople, but call center employees, as well. SIP solutions improve productivity by enabling remote workers to quickly and easily access the company network.

In addition, sophisticated reporting tools such as hosted PBX solutions are available that can help managers monitor the number of sales calls being made, to whom they are being made, when, and at what cost per call.

Anton Loon is director of enterprise sales at PowerNet Global. Reach him at (866) 764-7329.

Insights Technology is brought to you by PowerNet Global

The current economic climate has made it necessary for many companies to change the roles of their employees.

Often, this results in company safety responsibilities falling to an employee who may not have much experience in managing and implementing a safety program. This, coupled with a new enforcement-oriented posture from the Occupational Safety and Health Administration (OSHA), can result in a deficiency gap between OSHA compliance and the safety conditions that actually exist in a company, says Brad Swinehart, senior safety consultant at Sequent, Safety & Risk Reduction.

“This enforcement-oriented position is based on recent changes to the OSHA administrative penalty structure — changes that could result in increased fines, especially to employers in high-hazard industries,” says Swinehart. “If your facility does not already have a formal safety and health program, it can be overwhelming to put together a plan to achieve OSHA compliance, especially if you don’t have experience in developing or implementing a health and safety program.”

Smart Business spoke with Swinehart about the steps to take to put you on the road to OSHA compliance and provide a safer workplace for your employees.

What is the first step toward OSHA compliance?

First, conduct and document some form of safety training on a monthly basis.

Many people have the idea that safety training involves spending multiple hours in a conference room watching videos or reading handouts which, to many people, is not the most interesting way to spend their time. But this does not need to be the case. Safety training can consist of a variety of more interactive methods such as:

  • Pre-shift toolbox talks require just 10 to 15 minutes and can be used to address a recent workplace safety issue or possibly a hazard associated with a task that may be completed during that shift.
  • Hands-on training, such as lockout/tagout procedures, is helpful for those adult learners who learn by doing as opposed to watching videos or reading handouts.
  • New hire orientation training is a great opportunity to establish basic safety expectations. Once an employee arrives in his or her department, the supervisor may provide training around specific safety topics.

Proper documentation is another important  component of safety training. For every training-related exercise you conduct, provide a sign-in sheet for all employees in attendance. This critical documentation serves as a record of what safety topics have been covered for the year as well as who completed the training.

The method you choose to conduct the training is entirely up to you. However, training success should be judged by effectiveness, not merely by making sure that every employee attends.

Comprehension of training may be measured by using written tests, hands-on demonstration of the task or a combination of both. Some OSHA regulations outline the preferred types of testing to be applied to measure comprehension and verify competency.

What is the next step?

The second step toward OSHA compliance is the implementation of a safety management system. The recommended approach is to use a process based on the ANSI Z10 standards: ‘Plan, Do, Check, Act.’

  • Plan: Identify the goals you hope to accomplish.
  • Do: Implement your plan to achieve your goals.
  • Check: Make sure that your goals were fully accomplished.
  • Act: For any goals that were not achieved, take action.

This process is designed to be an iterative process for continuous improvement to your overall safety program. The implementation of a safety management system essentially involves looking for OSHA deficiencies and establishing a means and target date to resolve those deficiencies.

Developing a proper plan can be overwhelming, but it doesn’t need to be. First, identify your goals through an audit of the facility, equipment and observation of employee behaviors. Once these three areas of the audit process have been completed, prioritize the list based on level of risk.

Then develop a plan for how to best mitigate the hazards or behaviors, using administrative and engineering controls, as well as personal protective equipment. During this phase of the plan, it is important to involve all levels of employees which, in most cases, leads to a better, more comprehensive solution.

How can you increase the chances of success?

In order for a process of continuous improvement to be successful, it is important to clearly define the roles and responsibilities of employees, managers and executives. This allows a business to understand who is responsible for what level of the safety program.

In addition, a corrective action log should be developed and maintained to document the actions needed in order to implement the program. This log should identify the task, person(s) responsible for completion and an anticipated completion date. This log is critical for tracking task completion and for identifying accountability of responsible parties.

Once your plan has been developed and implemented, conduct ongoing audits and reviews to determine the effectiveness of the plan. These may consist of employee interviews, observation of tasks being completed, and audits of equipment and facilities.

The data collected from the audits and reviews can then be analyzed to determine the level of success of the plan and of your overall safety program. When deficiencies are found, review your plan and make necessary adjustments in training, policies or equipment to achieve the required results.

Following these steps will provide the tools necessary for the development and implementation of a successful safety program.



Brad Swinehart is a senior safety consultant with Sequent, Safety & Risk Reduction. Reach him at (888) 456-3627 or

Insights HR Outsourcing is brought to you by Sequent

As an employer, does your organization have departments with tasks or duties that never seem to get done? If you are like many employers in Ohio, the answer to this question is yes.

One possible solution to create a win-win scenario for both your organization and your injured workers is to consider implementing a transitional work program with the assistance of grants offered by the Ohio Bureau of Workers’ Compensation (BWC). Transitional work is a cost containment strategy for workers’ compensation that helps injured workers return to productivity in the workplace by providing modified job duties that accommodate their medical restrictions due to work-related injuries.  In turn, the employer reduces the costs associated with long-term claims and improves overall company productivity.

“Implementing a transitional work program is an ideal way to keep injured workers engaged in their employment and assist them with their income stream,” says Randy Jones, senior vice president, TPA Operations for CompManagement, Inc. “But it also offers the employer an alternative to downtime, the retention of knowledgeable and experience employees, and lower premium costs by preventing a loss in wages and payment of compensation by BWC.”

Smart Business spoke with Jones about the monies that are now available for your business in Ohio.

Who is eligible to receive a grant?

All active employers, both public and private, participating in the state-funded workers’ compensation program are eligible for the grant. Self-insured employers and state agencies are not eligible.

An employer must also be current with respect to all payments due to the BWC and have no cumulative lapses in coverage in excess of 40 days within the 12 months preceding the application date. Employers that received a transitional work grant through the BWC’s prior program from 2001 to 2006 will not be eligible for a new grant but will be eligible for a performance bonus. Employers that may have an existing transitional work program without use of a prior grant are also eligible only for a performance bonus after their current program is reviewed and approved by BWC.

Why should my organization apply for this grant and implement a transitional work program?

A transitional work program provides an alternative to lost time and allows an employer to minimize workers’ compensation disability costs associated with lost work days, compensation, and reserves. Often with minor modification in job duties or hours, an employee is able to return to work following an injury. The idea is to return an injured employee to gainful employment activities as soon as possible to avoid the so-called ‘disability trap.’

Injured workers receive a full paycheck, with the goal of returning to their original job. The advantages include a reduction in costs associated with long-term claims, improved productivity, lower injury downtime, improved employee recovery time, increases in employee morale and a protection of your work force investment, as the loss of experienced employees will result in costs associated with hiring new employees.

How is the amount of the grant determined?

BWC determines the amount of the grant based on employer size and the complexity of services needed for transitional work.  Factors include the employer’s payroll, job classifications, job analyses needed and collective bargaining units.

How does the application for grant monies work?

Applications are received and reviewed by BWC. The application form is available on its website at Key components will include policies and procedures, job analyses, program evaluation criteria, medical provider listing and employee education.

Who can develop a transitional work program for my organization?

Transitional work developers certified to participate in the Health Partnership Program as a vocational rehabilitation case manager, occupational therapist or a physical therapist can assist your organization.  Your developer of choice must also complete BWC-sponsored transitional work development training prior to delivering programs and have verified experience in developing programs or verified mentoring experience according to BWC’s transitional work policy.

Any costs associated with a transitional work developer preparing and submitting a proposal to an employer are not reimbursable under the grant.

Can my organization receive additional monies for participation?

A separate application may be filed to receive a performance bonus of up to 10 percent. The calculation occurs at six months following the end of the applicable policy year (June 30 for private employers, Dec. 31 for public) and is dependent on the number of eligible claims and successful use of the program.

All claims with injury dates within the applicable policy year will be evaluated to determine how many had the potential for transitional work services and how many of those actually utilized those services. Say an employer had 12 claims during the policy year and 10 met the requirements for transitional work. Of those 10, five injured workers were offered and accepted transitional work services. Because 50 percent of eligible claims were helped by transitional work, the employer would receive 50 percent of the possible 10 percent bonus, which equals 5 percent.

Are there deadlines for applying for the grant?

There is no deadline for applying for the grant, but there is for the performance bonus. For private employers the deadline is the last business day of April; for public employers it is the last business day of October.

Randy Jones is the senior vice president of TPA Operations for CompManagement, Inc. Reach him at (800) 825-6755, ext. 65466, or

Insights Workers’ Compensation is brought to you by CompManagement, Inc.





Monday, 18 June 2012 12:00

Lowering 401(k) fees while seeking value

Written by

New federal rules regulating 401(k) plans will ultimately have the effect of driving down fees — but, in many cases, at a cost.  One result of an increased emphasis on price will be a lack of attention to value. The result of this could be a commoditization of plans that makes them less expensive but not necessarily any better for participants, and in some cases worse.

The new rules from the federal Department of Labor (DOL) require employers to determine, and all service providers to disclose, all fees and the services they cover by July 1. Though the DOL has sent plan sponsors reams of documents outlining its requirements under the new rules — and listing fines that could befall them for not complying — many of these employers remain unaware of this deadline.

Those who are dutifully on schedule for this compliance are also probably aware that they must then determine whether these fees are reasonable — that is, where these charges fall in the national market. If employers find that these fees are relatively high, they must make arrangements to assure that they’re reasonable, perhaps by changing service providers.

Previously, federal rules didn’t require these service providers, including the large financial institutions that package 401(k) plans and sell them to companies, to disclose all fees. Though service providers have long been required to disclose fees when asked, mandatory disclosure rules stemming from the Employee Retirement Income Security Act (ERISA) of 1974 haven’t come close to covering the plethora of fees charged by plan providers, investment companies supplying investments for plans and the advisors engaged by sponsors.

Thus ensued decades of murkiness about fees, further beclouded by the benign neglect of overworked HR people at small and midsize companies. Aware that this state of affairs has led to excessive fees in many cases, the DOL is trying to do something about it to stanch the unnecessary hemorrhaging from employees’ retirement accounts. By requiring employers to know these fees and seek out lower ones when appropriate, goes the federal logic, excessive fees will inevitably shrink under the sunlight of disclosure.

There’s little doubt that the new rules will have this effect — accelerated by the entrée of low-cost providers in what will be an increasingly low-cost arena — but they will also have an unintended consequence: commoditizing 401(k) plans, often to the detriment of participants. Like most quantitative analyses, benchmarking fees will inevitably result in apples-to-oranges comparisons. How else can one say, without reams of nettlesome footnotes, precisely where one service provider’s fees land relative to those of its competitors?

The DOL is seeking to retain a focus not just on price, but on value, as the new rules require employers to determine and benchmark fees “for services provided.” Yet in plan sponsors’ rush to benchmark fees — and, in many cases, after getting eye-opening results, to seek lower ones — this stipulation doubtless will receive short shrift unless sponsors steadfastly maintain a quality orientation.

The rationale for preventing excessive fees is to enable employees to accumulate more wealth to get them through retirement. Yet if employers fail to also focus on services, plans won’t be able to serve participants by delivering the best returns for their particular situations: their age (time horizon for retirement), retirement goals, risk tolerance, retirement goals and existing wealth.

It’s entirely possible that after plans’ fees are benchmarked, some sponsors will find service providers who will do the same work as their current providers but at a far lower cost. Or these sponsors might hit the jackpot by finding lower fees accompanied by much better service. Yet the powerful tide of commoditization will surge against the likelihood of these outcomes unless sponsors view the new rules as a wake-up call for positive action; they should view them as an opportunity to lower fees and improve service.

This conscientious mentality compels consideration of what the components of good service might be. These include governance to maintain a steadfast dedication to employees’ interests, investment evaluation to examine the worthwhileness of specific items such as mutual funds, and education to empower employees to make intelligent, unbiased choices for their 401(k) portfolios.

Without sufficient plan education, a 60-year-old employee might end up with the same portfolio risk levels as 25-year-old, exposing him to potential losses from which he will never have time to recover and thus jeopardizing his retirement.

The new rules also require sponsors to make clear distinctions between fiduciaries, who are legally bound to advise clients in their best interests, and brokers, who are prohibited by ERISA rules from advising participants on the suitability of specific investment products.

So, at a time when the lead service provider in many 401(k) plans is a broker whose services may be fraught with conflicts of interest, it’s more important than ever for plan sponsors who want to enhance plan quality to seek the advice of a wholly independent fiduciary. Moreover, in an era when people change jobs and investment markets put on different faces from year to year, such advisors can play a highly beneficial role in assessing the fees of plan providers on a regular basis, preferably every 90 days.

Discipline is essential not only to get plans in shape, but also to keep them that way. Staying in shape may require a personal trainer working with you in your interest; this doesn’t necessarily come with the lowest-price gym membership.

Aside from doing the right thing for your employees, there’s another reason to assure that the rush to lower fees doesn’t eclipse considerations of quality: It’s smart business.

Remember that one reason your company has a 401(k) plan in the first place is to be competitive in the marketplace for skilled employees. Sponsors whose plans have the best returns and best employee outcomes will have an edge as the economy recovers and the labor market gradually ceases to be a buyer’s market.

This is not a lure that you can fashion in short order. To attract the best employees five years from now, you must begin work on your plans today. The new DOL rules present an unprecedented opportunity to do so.

Anthony Kippins is president of Retirement Plan Advisors, Ltd., a Registered Investment Advisory firm that addresses the needs of retirement plans and the employees who invest in them.

An Accredited Investment Fiduciary Analyst (AIFA®) with more than 30 years of experience domestically and abroad, Kippins specializes in providing fiduciary advice to retirement plans on governance, investments and educational services. He also advises individual clients on retirement planning and investment management after retirement.

Kippins also serves as managing director of Institutional Fiduciary Assurance LLC, an organization that provides fiduciary advice to trustees of endowments, foundations, non-profit organizations and charitable trusts. He can be reached at