Fear. We all know what it feels like: The rising sensation that you might not be strong enough for what you’re about to face. Unlike in nature, where animals can quickly size up their likelihood of survival, our ability to recognize a threat and weigh our chances isn’t always so refined. In the business world, leaders often flee when what they really need to do is move forward.
Ego is also at play. Leaders often choose to stick with the plan, even when it isn’t working, rather than make changes and risk the consequences.
This isn’t a new phenomenon and yet the cost of fear is constantly rising. We live in a world where the pace of change is ever accelerating and the future is difficult to predict. As leaders, we’re often forced to make decisions without all the information we want or need — and yet timely action is a must.
What’s required is agility and confidence — the ability to look change in the face, decide how to act and move boldly in that direction. Leaders who wallow in fear get stuck in place. They suffer from “analysis paralysis” — waiting so long to make decisions that it’s too late to act. In order to be effective, leaders must push past the paralysis and be willing to take risks and face change head-on.
Here are a few ways to begin the process of breaking through the fear of change:
Admit you don’t know everything
The CEO of Manco, Jack Kahl, used to have a famous Socrates quote on his door: “I know one thing, that I know nothing.” Jack set the tone for the organization by continually driving home the message that everyone, beginning with him, was to be constantly learning, experimenting and improving.
Start mild before wild
Risk-averse businesses don’t have to go from zero to 60 overnight. They can begin by identifying mild strategies for increasing their risk exposure and move on as they become more comfortable.
The key is this: Whatever change you make, it has to be observably different. You must define in advance the impact you’re seeking to achieve so that you can measure whether you reached it. If you’re the only one who can see or feel the change, it isn’t significant enough. In order to accelerate results, your action must be observable to other people.
Question your motives
Even when teams or companies are in trouble, processes that are no longer doing any good are held on to. This happens because leaders want to prove that they’re right, rather than experiment with something new. If you find yourself continuing to push stale processes, ask yourself why.
Try on different lenses
No two people see the world in exactly the same way. As comfortable as we get seeing things our own way, the fact is we need to seek out the perspectives of others. Great innovations and change initiatives have begun precisely that way — when the circle of ideas was expanded to include people who might not otherwise have been consulted.
The ability to respond effectively in the face of change is a learned habit. And like any habit, it requires consistent practice over time to take root. Take the first step by experimenting with these strategies. Over time, your agility and confidence in the face of fear will undoubtedly grow.
Donna Rae Smith is a guest blogger and columnist for Smart Business. She is the founder and CEO of Bright Side Inc.®, a transformational change catalyst company that has partnered with more than 250 of the world’s most influential companies. For more information, visit www.bright-side.com or contact Smith at firstname.lastname@example.org.
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Michael Feuer: Why every company needs an additional type of COO — They march to a different drummerWritten by Michael Feuer
We all know what traditional chief operating officers do and what characteristics typically make them tick. There is another type of COO that every company needs — whether they admit it or not — who shares the same initials as the former, but who has diametric responsibilities.
This person is a chief opportunity officer, although the title sometimes varies because the word opportunity conveys the wrong message to the less pragmatic.
The characteristics of this rare bird were probably honed when he or she was a small child. Most parents didn’t talk much about this offspring’s special traits outside the home.
We have all seen these kids in action. They have too much energy, are in perpetual motion and feel compelled to touch everything in sight.
They also ask questions and make statements that can shock or antagonize even the most understanding adult.
When they go off to school, they’re the ones who neglect to raise their hands when answering questions, but instead blurt out their responses. And most of the time they’re right, which tends to further aggravate teachers.
At their first job, they continue to be in constant motion, questioning everyone, everything and sometimes ignoring the chain of command. At the same time, however, they seem to discover previously unthought-of alternatives to thorny issues.
If they’re lucky, a more senior manager spots the hidden talents of this potential COO and begins instilling a little, much needed, discipline and tutoring on the realities of being politically correct to get things done.
In short order, this heretofore rogue player begins to climb the organizational ladder, scoring a series of meaningful and unique accomplishments. This garners heightened recognition and a reputation as someone who can think outside the box and isn’t afraid to take well-calculated risks.
Making waves comes easy
Many of these iconoclasts’ ideas seem at first blush to be prosaic — the idea so obvious and simple it leaves everyone in the organization scratching their heads asking, “Why didn’t I think of that?” Other times, what initially seems to be an off-the-wall concept suddenly takes shape and emerges as a breakthrough.
We all know the names of innovators who have excelled and possessed the characteristics described. Some are famous business rock stars, such as the legendary Steve Jobs of Apple or Facebook’s Mark Zuckerberg. Others are unknown hidden gems within the ranks of America’s most admired, successful companies.
Many times companies don’t parade them in public, due to the commotion they invariably cause — the same reasons their parents exposed them sparingly to outsiders.
This type of innovator devotes his or her energy to looking for low-hanging fruit, or that special something that can transform a business from the ordinary to the extraordinary.
Their techniques are non-conventional and they frequently ruffle feathers. Usually for them to succeed, they must work in an organization that recognizes the fact that not everyone has to be cut from the same cloth.
Every once in a while, these one-time outcasts emerge as the leader of the enterprise with the letter “E” replacing the middle “O” in their earlier title. After that occurs, the newly minted CEO will deny to the death that he was ever the kid whose parents were reluctant to take anywhere. ●
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. “The Benevolent Dictator,” a book by Feuer that chronicles his step-by-step strategy to build business and create wealth, published by John Wiley & Sons, is now available. Reach him with comments at email@example.com.
What’s become one of the most discussed trends in technology and manufacturing may sound more like something from a futuristic movie rather than something that is taking off in the here and now — 3-D printing.
It may even sound expensive. In reality, 3-D printing is becoming increasingly accessible and can help companies improve manufacturing efficiency and cost structure.
Although 3-D printing was conceived and invented more than 30 years ago, investment in the technology has begun to soar in recent years as more businesses see its potential to drive a new industrial revolution, one that enables businesses to get their products to market faster than the traditional manufacturing processes.
Printing in three dimensions
Sometimes called “additive manufacturing,” the popular image of 3-D printing is a machine that prints 3-D objects. Successive layers of material are laid down — in the same way paint is sprayed — creating different shapes. A wide range of materials and techniques can actually be used in 3-D printing. As one of the companies at the forefront of the 3-D printing phenomenon, Rapid Prototype + Manufacturing LLC is expanding into 3-D printing metals in addition to a traditional focus on 3-D polymer materials.
“Three-D printing technology reduces product development time, allowing designers to create more products and get them to market faster,” says Matt Hlavin, CEO of rp+m. Hlavin decided to hit the ground running with 3-D printing back in 2009 after studying and following Stratasys, a leading original equipment manufacturer for Fortus Fused Deposition Modeling Machines, for 10 years.
“We saw the benefits on how this technology would help save our clients time and money,” Hlavin says.
The process differs from machining where successive layers of a solid are cut or drilled away in a subtractive process.The evolution
With 3-D printing, design engineers are now able to touch, feel and test their designs prior to investing in capital equipment, such as tooling, for traditional ways of manufacturing.
When the 3-D printing equipment started being used, the parts coming off of the machines were being used as prototypes. For example, a small household appliance company may use prototyping expertise in order to see a product before spending thousands of dollars on tooling. Over recent years, there has been an increase in end products being used on 3-D printers.
At rp+m, about 40 to 50 percent of parts come straight off 3-D printers as end-use production parts.
Auto parts manufacturers are finding that 3-D printing has shown that it is capable of supplying high quality fused deposition modeling parts within the characteristic time frame of the automotive industry. One such company has saved time creating parts that are less expensive and do not require the tool investment of traditional injection molded parts. A quick turnaround time is ideally suited for automotive industry time-sensitive projects.
With rapid prototypes, it offers the capability of showing the customer a 3-D model of the product at an early stage of the project. Engineers are able to produce prototypes and functional parts capable of enduring harsh factors, making them suitable for testing and validation. With 3-D printing, a company can make more prototypes, reduce design time and lower total cost by yielding less-costly parts.
The most recent game-changing technology for the polymer additive manufacturing users is the Arburg Freeformer, where pellet form polymer material can be used. Arburg integrated traditional screw and barrel processes from injection molding into 3-D printing, which offers an opportunity for quickly incorporating more materials that are already in production processes like injection molding.
Metals are taking the stage
While rp+m’s core business has focused on the polymers’ technology of 3-D printing, it is now expanding into 3-D printing metals. This opens the door for new end-use and industry technology.
With the acceleration of technology maturation in the metals space, all materials classes including metals, polymers, ceramics, electronic and biomaterials can be manufactured using 3-D technologies. Today, the metals technologies are becoming not just performance competitive but cost competitive enough to engage industrial users beyond just the first adopter metal and aerospace companies.
“Contrary to popular belief, the maturation of metals additive is actually supporting expansion of traditional manufacturing rather than substitution,” says Edward Herderick, Ph.D., director of R&D at rp+m. “For example, new approaches to printing high performance metal casting molds by companies like ExOne are leading to growth in the high value end of the supply chain where American manufacturing is the most competitive with other global economies.
“Another example is that the enhanced design capability enabled by metal powder bed fusion technologies like the one made by the EOS company are allowing for higher performance metal powders to be used in greater quantity.
“These powders are manufactured using more advanced approaches that require more metal forming, welding and machining and so it is lifting the overall industry as a whole.
“The materials and processes for 3-D manufacturing will continue to mature to the point where a new paradigm of ‘manufacturing by design’ will emerge to replace the current paradigm of design for manufacturing processes,” Herderick says.
“This will empower industrial designers of engineering systems to create their machines and components with full freedom to choose approaches based on the end use performance criteria rather than limitations of manufacturing processes.
“As a result, new product designs will increasingly mimic the elegant design of nature, maximizing performance and design content while minimizing waste. In the future, designers may use nature-inspired design to develop lighter, more streamlined parts and products and increase efficiencies in industries such as oil and gas drilling, and aerospace.”
Fostering a future
As the industry continues to grow and improve, students will be needed to learn the processes, since they are the future workers.
rp+m continues to work with local schools, students and teachers to make them aware and knowledgeable of not only the current uses of 3-D printing, but also what trends are surfacing. Tours have increased at the company’s engineering playground due to the encouragement given by teachers to bring their students in for a tour.
Students are so fascinated with the technology that they begin coming into school early, they want to be in the classroom during their study halls and will even stay late after school to see the 3-D printer in action.
rp+m’s model has been steadfast in being the expert in ideation through manufacturing. The company’s philosophy is to identify waste and innovation gaps that will transform clients’ business, and develop technologies, materials and processes that drive out the wasteful steps and time to help clients get to market faster.
How to contact: rp+m, (440) 930-2015 or www.rpplusm.com
While it wasn’t literally a light bulb going off above his head, the idea that came to Jason Farro formed when President Barack Obama announced his prescription for health care reform in 2009.
Farro could see that with the federal reform, health care plans that were offered by small businesses to their employees would be reduced and individuals would become more and more responsible for finding their own insurance.
That year, Farro launched Lighthouse Insurance Group LLC in Cleveland — the first of its kind in the insurance industry.
What first drove Farro, the company’s CEO, was his research into how the Internet could be utilized, and whether there could still be a one-on-one connection with users.
“Ninety percent of insurance shoppers will go to the Internet for health insurance information, but only 10 percent will buy insurance over the Internet,” he says.
Farro was determined to increase sales. His approach was to develop a proprietary CRM and dialing system that was more sophisticated than those on the market. The new software connects Web visitors — inputting his or her name and phone number — with one of Lighthouse Insurance’s screening department staffers over the phone. The result, the quickest one-on-one personal touches possible.
“Agents at our firm spend 20 percent more time consulting with consumers than at other agencies as a result of our proprietary dialing system,” Farro says. “Our system uses a set of dynamic algorithms with the capability to analyze and direct live transfer leads to our licensed agents by state and availability, resulting in a higher percentage of potential customer acquisitions.”
The dialer, which took eight years to develop, can handle up to 100,000 calls a day. Lighthouse processes roughly 30,000 a day, 6,000 of which go through a screening process to be narrowed down to 600, which are turned over to a full-time agent at Lighthouse Insurance’s Cleveland and Irvine, Calif., sites. Each agent is licensed to sell the major health care insurance brands and can also assist with the Affordable Care Act.
“That’s another feature that differentiates us from other insurance agencies — our agents are all W-2 employees, not independent contractors,” Farro says.
Anywhere from two to five follow-up calls are made between the insurance agents and the customer until he or she is satisfied with the outcome.
The relationship doesn’t stop there, Farro says. The retention department works with the client over time, reviewing client needs.
“Our company culture is all about the client,” he says. “We focus on creating a highly valuable customer experience and our culture supports this mission. The numbers back it up. Lighthouse garnered national recognition for submitting 31,000 applications in the first nine months of operation. We also have a high rate of employee retention.”
The company plans to add property and casualty insurance to its offerings in the near future. ●
How to reach: Lighthouse Insurance Group LLC, (216) 393-1850 or www.Lighthousequotes.com
"Building Stronger Communities"
The story of New Avenues to Independence Inc. is not only about how the organization addresses the needs of the developmentally disabled and the disadvantaged. It’s also about how New Avenues blends a business model with a not-for-profit mission.
When it was founded 62 years ago, the group consisted of parent volunteers who wanted to offer children with disabilities educational, vocational and recreational experiences.
One feature that makes New Avenues unique is its vocational services program, which partners with local businesses and accomplishes a dual mission.
“The not-for-profit side of it is to employ people with disabilities who will make a decent wage; we fulfill our mission at the same time we are generating sustainable models that are also helping the environment and local businesses,” says Thomas Lewins, New Avenues’ executive director.
A focus on recycling materials
More than 150 business partners use the services of Buckeye Industries, the business enterprise division of New Avenues. Buckeye Industries comprises four entities: a document destruction center, a Styrofoam recycling facility, a pre-incision medical waste processing site and a plastic recycling facility. People with disabilities staff each facility.
The Styrofoam recycling facility is the only one of its kind in Ohio, Lewins says. Another unique project has been pre-surgery medical waste processing.
“We have already engaged more than 20 of the Cleveland Clinic hospitals, and we have 18 of the University Hospitals,” Lewins says. “We process all the Styrofoam from their labs, and we process all the pre-incision medical waste from their operating rooms. We are the only one in the country now that is doing that.
“The doctors open the packages and only use what they need for the specific surgery. So anything that is not used, prior to incision, goes to us.”
It begins with a relationship
While the recycling and employment efforts are impressive, so is the process that spawned the enterprises. Lewins says it all starts with a relationship.
“With our business contacts that we have, once they supply us with cardboard or Styrofoam or whatever, we say, ‘OK; now tell us about a need you have that you can’t seem to find a way to solve. Let’s see if we can find a way to match what we can do with what your need is and save you some money so we can put people to work,’” he says.
For instance, a business contact from the waste management industry recently told New Avenues that a company had been collecting Redbox plastic video cases after they’ve been returned and discarded.
That got the wheels turning at New Avenues, and a new enterprise was born.
“We’ve already processed 1 million of those cases, cleaning them up, and then we crush them, bind them, sort them by color, and companies make other products out of them. We’ve done a million of them, and they have 19 million more for us to do.”
For Lewins and New Avenues, thinking out of the box is a routine that leads to success. “It’s a matter of trying to be creative in ways that traditionally not-for-profits don’t think about, in terms of the private/public sector collaboration as well as a business/community collaboration.” ●
How to reach: New Avenues to Independence, (216) 481-1907 or www.newavenues.net
Global branding has become increasingly popular in the past few decades. Companies are more often seeking to expand overseas into tempting and lucrative developing markets. Furthermore, the Internet has given global branding a heightened importance as websites can be accessed from anywhere. This is why international trademarks have become a necessity for companies operating in the global marketplace to ensure as much protection for their brands as possible.
Smart Business spoke with Namit Bhatt, an associate at Fay Sharpe LLP, about protecting brands when advertising abroad.
What should a company consider before expanding internationally?
One of the first steps is making sure the brand is protected at home. In the U.S., this means registering a trademark with the U.S. Patent and Trademark Office (PTO). Securing a federal trademark registration with the PTO offers the strongest protection by helping to fight dilution and infringement of the brand marks used on the company’s products and in any advertisements.
Before a company expands into a foreign marketplace, it should conduct a trademark search to look for any marks in that country that could be confused with its brand. Fighting against a conflicting trademark is costly and time consuming to a growing company; a search helps avoid that cost.
How can a company achieve international protection?
When dealing internationally, take advantage of international agreements between countries because multi-national treaties and agreements can determine branding protections. The World Trade Organization is a useful source for treaties dealing with intellectual property (IP) standards. The World Intellectual Property Organization (WIPO) is also a useful resource for determining the IP rights available. WIPO manages the Madrid Protocol, which assists the international registration of trademarks. More than ninety countries have acceded to the Madrid Protocol with India, Rwanda and Tunisia becoming members in 2013.
The Madrid Protocol allows companies that own trademark applications or registrations in a member country to expand the trademark application to other member countries with a single application. For example, a company with a registered trademark in the U.S., a member country, that desires to expand to India, can electronically file an international application with WIPO under the Madrid Protocol. The designated member countries are then notified of the international application and can examine the application for any conflicts within the local trademark system. Using this method is a convenient way to expand into a global marketplace quickly, efficiently and with one set of fees instead the expense of applying to each country individually.
Another international treaty that is helpful for global branding is the Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS). The TRIPS agreement establishes a minimum level of IP protections including trademarks. This means that any member country of the treaty must adopt at least the amount of protection set forth in the treaty and can choose to give more protection than the minimum.
How can a company maintain international protection?
After a company achieves trademark registration in the new marketplace, it is important to maintain and enforce the rights granted under the trademark registration. Generally, the company should maintain continuous use of their trademark to not relinquish any rights for the brand. Also, the company should watch out for any marks that could dilute the protection of a registered mark. These methods will ensure that the global branding can be used for many years after registration.
Ensuring global protection of a company’s brand has become easier as the need for international protection has increased. Companies looking to enter new markets should be mindful of the options available and consider using them. Before advertising a product in a new marketplace, a company should look to gain protection of its brand in the marketplace. •
If your organization is using social networking sites to search for potential job candidates, it is not alone. Social networking sites have become an increasingly popular recruitment and screening tool because of the ease and efficiency they allow for finding new talent. However, in the absence of an existing evidence-based model for using social networking sites, organizations must find a way to balance the risks and rewards as research catches up to practice.
Recent surveys tell us that LinkedIn is the most frequently used social networking site for recruiting and screening potential candidates. Perhaps this is because LinkedIn was developed for professional networking purposes and offers the most structure and consistency in what and how potential candidate information is presented. The challenge, however, is that depending on the job, both relevant and non-relevant information can be found on LinkedIn.
Smart Business spoke with Rosanna F. Miguel, Ph.D., SPHR, an assistant professor of Human Resource Management in the Department of Management, Marketing and Logistics in the Boler School of Business at John Carroll University, about the effective use of social media for hiring.
How are organizations using social networking sites to reap the most rewards?
Many organizations are using social networking sites to search for passive candidates who possess a specific skill set, which may be difficult to find. For example, an organization may be interested in finding bilingual candidates with leadership skills, or candidates with a background in health care and management. Other uses include looking for active job seekers, posting job information, or participating in discussions to spur interest in the organization and increase employer brand. Most often, organizations seek out individuals to fill salaried mid- to upper-level management or director positions.
What guidelines should organizations follow to minimize legal risks?
The structure and consistency offered by LinkedIn is a substantial advantage over sites such as Facebook and Twitter that do not allow for a highly disciplined approach to the use of available information. Structure and consistency lead to higher validity and help ensure organizations are meeting the professional and legal guidelines that have been in place since the 1964 Civil Rights Act.
While the use of social networking sites for screening purposes is relatively new, the potential pitfalls associated with this approach are not. The guidelines that apply to the use of the standard resume and application blank, for example, apply to the use of social networking sites. In fact, LinkedIn has been described as a new version of the traditional application blank. Problems arise when organizations use LinkedIn or other social networking sites haphazardly, without a formal policy or concern for professional and legal guidelines. Most importantly, organizations must ensure the use of job relevant information about potential candidates by focusing their search on the requirements of the job based on a recent job analysis. Information that may discriminate against protected groups or that is not job relevant must be avoided (e.g., photographs, age, personal information, etc.).
How can the use of social networking sites positively and negatively affect an organization’s pool of potential candidates?
Organizations are looking to social networking sites to expand the population of high potential candidates, particularly when organizations demand a specific skill set that may be in high demand by employers. Some of the most talented individuals can be found on social networking sites, and their identities are just a few clicks away. However, research tells us that social networking sites do not adequately represent the true population of potential candidates. That is, fewer Hispanics and African-Americans use social networking sites. This means that relying exclusively on social networking sites to search for potential candidates is not effective for increasing employee diversity and ensuring that minorities have a fair chance of being selected. This puts organizations at risk for discrimination lawsuits. Organizations can avoid this potential pitfall by including other methods to source candidates, such as job boards, job fairs and magazines. More specifically, methods that have a higher chance of targeting minority groups can be selected to widen the demographic representation of potential candidates.
Why should organizations create social networking policies to screen job candidates?
Surveys suggest that more than half of all organizations using social networking sites to screen job candidates do not have a formal policy for doing so and do not intend to create one in the near future. If one of the goals is to ensure social networking sites are used according to professional and legal guidelines in a consistent and fair manner that leads to the identification of job relevant information, a policy to describe those guidelines to the users of social networking sites is a must. An EEOC or OFCCP audit should not come as a surprise to organizations; organizations must be prepared to support their recruitment and selection procedures in advance of a potential discrimination lawsuit, regardless of whether that procedure involves social networking sites or not. •
Rosanna F. Miguel, Ph.D., SPHR, is an assistant professor of Human Resource Management in the Department of Management, Marketing, and Logistics in the Boler School of Business at John Carroll University. Reach her at firstname.lastname@example.org.
Insights Executive Education is brought to you by John Carroll University
Overseas sales and exports can really help business owners grow their companies. But, when the company gets its first international inquiry, an owner might say, “I always deal cash in advance. Send me a check. I’ll send you the product.”
That’s not how the world works, says Art Rice, vice president and manager of International Operations and Product Management at FirstMerit Bank.
“The world rarely operates on cash in advance anymore. So, it may be days, weeks or months between the actual sale of the merchandise or service and the resolution of the accounts receivable,” he says.
This extended sales cycle can strain your working capital, but the U.S. government has several programs to help, Rice says, including the Export-Import Bank of the United States (Eximbank) and the Small Business Administration (SBA).
And your banker can be very helpful as you get into international sales or expand into new markets, says Frank Pak, vice president, International Division, at FirstMerit.
“We can serve as a great referral source to other professionals involved in supporting exporters, and also referring them to government assistance centers like the U.S. Export Assistance Centers or the SBA, an international lawyer, a freight forwarder, export insurance broker, etc.,” he says.
Smart Business spoke with Rice and Pak about available export support programs.
What are some export support programs?
The Export Working Capital Programs of the Eximbank and the SBA provide an exporter with funds for things like materials and payroll while producing the product. Banks receive a 90 percent guarantee on the loan’s principal and interest, because the government wants to encourage U.S. job creation. Also, the work in process can be included in the advance funding calculations.
It’s better to work with a bank that has Delegated Lending Authority from the Eximbank or Preferred Lender designation from the SBA for this program as it can expedite the process and assures that you’re working with an experienced lender.
Credit Insurance on foreign receivables is when an exporter purchases protection against non-payment of its foreign receivables from Eximbank or a private insurance company. Normally, banks don’t allow the foreign accounts receivable to be included in a company’s borrowing base because of the perceived heightened risk when buyers are located in a foreign country.
With insurance, an exporter has the opportunity to offer longer repayment terms. For example, a company, that typically offers no more than 60-day terms to its customers, sees its competitors in foreign markets offering 120-day terms. With export credit insurance, the exporter is able to take the risk of longer terms that will enable it to be more competitive. Also, if it assigns the insurance policy to its bank, the bank can advance against those receivables, improving cash flow.
For larger export sales, buyers in higher interest rate countries often look for some form of extended payment terms. Typically referred to as buyer financing, the exporter can decline and lose the sale, offer unprotected terms or use a form of insurance to protect its medium term receivable. The U.S. government supports such sales with programs called Medium Term Loan Guarantees. A bank is willing to participate because repayment is guaranteed by the U.S. government. The exporter benefits because it satisfies what the buyer needs and receives payment from the bank almost immediately after shipping its product. While there are restrictions, successful exporters have used such programs for 70 years.
What’s important to know about using export programs like these?
You don’t have to go it alone. Your banker is an advocate who can help you find the right resources as you set up your export program and understand the advantages and disadvantages of available payment methods.
Contacting your banker early in the process, as you’re developing your business plan and researching markets, will shorten your learning curve and help you become successful sooner. Banks can also direct you to government resources, which have additional tools available to support exporters as they expand into new markets. Reach out to your bank now, even if you’re just thinking about exporting overseas, because your banker will be happy to share his or her expertise. ●
Art Rice is vice president and manager of International Operations and Product Management at FirstMerit Bank. Reach him at (330) 384-7178 or email@example.com.
Frank Pak is vice president, International Division at FirstMerit Bank. Reach him at (216) 317-7399 or firstname.lastname@example.org.
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Overhauling an office phone system is often a necessary part of growing, improving and updating an organization’s technology. Voice over Internet Protocol (VoIP) is a common upgrade that offers a variety of options to fit a business’ needs, whether it has a small, medium or large employee base.
Each VoIP system can be custom built to fit the specific requirements of a company, says Alex Desberg, sales and marketing director of Ohio.net. A specific VoIP product is chosen based on the company’s specific needs, and its implementation is ramped up in a way that’s manageable.
“When you’re talking about your phone system, it can be pretty painful when you don’t know what to expect,” Desberg says. This is why companies have the option of switching everything over at once, or taking a step-by-step approach when switching to VoIP.
Smart Business spoke with Desberg to examine the ways companies can integrate VoIP.
When converting to VoIP, is there one best way to transition or are there options?
Each VoIP-based phone system is meant to work uniquely. Some companies don’t know what’s available out there, and really aren’t ready to jump in with both feet to a brand new phone system and service provider. If a company knows that over the next few years they’re going to grow, they’re going to change, or they’re going to move, then there are specific opportunities that arise.
When does it make sense to use a step-by-step approach?
Unlike traditional telephone service, a step-by-step approach can be used as opposed to transitioning everything when improving communications using VoIP. In many situations, dial tone from traditional telephone providers can be duplicated and moved to the VoIP realm. It’s then offered back in a cost-effective way.
If a company is planning to move to a new facility it is a great opportunity to start down the path of new technology. The organization can take the phone numbers that it currently has and move them to VoIP services. Then in the new location, deploy what looks like traditional phones. When the company is ready, it can retire its old phone system and slowly step completely into VoIP. It eases the process for the company and its employees.
Remote workers or remote offices that are using separate phone systems raise more opportunity to investigate VoIP options. Those multiple environments can be brought together so that they look and operate like a single phone service. It can be a mix-and-match environment, offices and workers can be spread out across the country, deploy individual phones and systems for them while the main office is still working off of the traditional phone configuration.
In what circumstances is it better to switch all at once?
When a company is growing, often its phone system is something that’s an afterthought. Either the current phone system can’t handle more employees, the voicemail is always full or the technology is in need of updating. A good option at that point is to move to a platform that doesn’t have those limitations. Hosted VoIP, where all services and all phones are provided, has basically unlimited growth potential. So there is a great opportunity for a company to avoid continuously reinvesting in old technology.
How can a company determine what’s best for its situation?
The best and most important part of the process is planning. It’s based on what a company needs going forward. Not only is the company preparing for new hardware, but also new expectations on the IT staff and the network itself. It’s important to make sure that the VoIP provider offers training as part of its service. And financially, a company has to make sure that it is a good way to go and a good investment. ●
Alex Desberg is sales and marketing director at Ohio.net. Reach him at email@example.com.
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The JOBS Act, passed in 2012, changed rules to make it easier for small businesses to secure funding from investors.
“The Securities and Exchange Commission actually has three initiatives related to the JOBS Act. Crowdfunding has received most of the attention, but the SEC also amended Regulation D to allow small businesses to use general advertising and offers the Regulation A option, which is sort of a mini registration,” says James S. Hogg, a partner at Brouse McDowell.
Smart Business spoke with Hogg about how these JOBS Act options work and what they offer small businesses looking to raise funds.
What has changed with the amendment to Regulation D?
In the past, a private placement had to be done without general advertising, so you would either use a broker to find wealthy investors or you would find them; it was more or less word of mouth. Once you found investors, you would do a conventional private placement.
According to the SEC, $900 billion was raised that way in 2012. Of that, about $8 billion was raised in offerings of less than $5 million each. The amended regulations are intended to allow more small businesses to participate by expanding the pool of investors they can reach. But when you use general solicitation — Internet, newspapers, radio — you can only sell to accredited investors and there are more rigorous procedures to follow to ensure buyers are accredited.
To be accredited, an investor must have a net worth of $1 million or annual income of $200,000. You can still raise funds the old way under Regulation D, which allows for up to 35 non-accredited investors and an unlimited number of accredited investors. But if you use general solicitation, all investors must be accredited.
How can small businesses use crowdfunding?
Nothing is set until the SEC adopts final rules, but based on the proposal, companies are limited to raising $1 million in a 12-month period.
Crowdfunding has hit a couple of snags. One involves regulation; the proposal doesn’t allow for state regulation and some regulators would like to see more safeguards, while other people want to get money to small businesses as quickly as possible.
The SEC proposal requires use of a funding portal such as Kickstarter or Indiegogo and limits purchasers — a person with net worth of less than $100,000 can’t spend more than $2,000 or 5 percent of their net worth a year, and someone with a net worth of more than $100,000 is restricted to 10 percent of their net worth.
Crowdfunding would also require annual reports, although they would be basic — including financial statements that may have to be reviewed by a CPA firm, and if the amount raised was more than $500,000, you would also need an audit. As proposed, the rules might make crowdfunding unattractive. I’m sure that’s part of the comments the SEC is wrestling with.
What is happening with Regulation A offerings?
Historically, if you did a Regulation A offering, which is like a mini registration, it would not be given an exemption from state registration. As a result, only 0.2 percent of offerings under $5 million used Regulation A.
The SEC has made it a two-tier system by adding a new rule that allows an exemption from state securities law registration. You can still raise money the old way, but if you elect to do so under the new rule, there are reporting requirements in return for the state law exemption. The maximum amount that can be raised would also increase from $5 million to $50 million.
This is still in the proposal stage, and comments are being accepted through March 24.
How do businesses decide what route to take?
If you’re really small and raising funds entirely in Ohio, you can sell to up to 10 investors without any filings, but make sure you meet the requirements for this exemption. Most companies with larger offerings will probably continue to opt for Regulation D, but when the regulations are finalized they may consider crowdfunding or Regulation A if those are exempt from state securities registration. ●
James S. Hogg is a partner at Brouse McDowell. Reach him at (330) 434-4106 or firstname.lastname@example.org.
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