Newsclips Featured

9:46am EDT July 22, 2002
Dave Moore, game over

Crystal Mortgage Co.’s nearly two year battle with the city of Amherst came to a close rather unremarkably as company CEO David Moore agreed to drop his civil suit against officials there. After spending $100,000 to fight a relatively inconsequential tax dispute with the city and running a campaign that successfully ousted city Law Director Allan Anderson from office, Moore agreed to call off the dogs in exchange for a simple public apology. With it, he proved that the pen is mightier than the sword.

Acquiring mind strikes again

Terrence Profughi doesn’t know the meaning of the word standstill. The acquiring mind CEO of Hi TechMetal Group (profiled in SBN’s August 1998 issue) purchased two more companies last month: IMT, of South Carolina, and Fusion Engineering Co., of Columbus. HTG is comprised of 22 strategic business units that have been started or acquired over the past 15 years. Under Profughi’s leadership, HTG has grown from $1.2 million in sales and 38 employees in 1984 to $55 million and 700 employees in 1999.

Knowledge is power

In a sign that Cleveland area businesses take software, hardware and the Internet seriously, six local organizations were the recipients of the first annual Cleveland-Area Knowledge Industry awards in November. TMW Systems Inc., PlanSoft Corp., Cleveland Live, Flashline.com Inc., Perritech, Lorain County Community College and Cuyahoga Community College were honored by the Northeast Ohio Software Association for their commitments to the emerging knowledge industry. For more information, visit NEOSA’s Web site at www.neosa.org.

Going rates

Ever wondered just how your company’s salaries stack up in comparison to the average? Do you get the employees you want in this tight labor market or do prospects choose your competitor’s firm over yours? Two Web sites let you benchmark your employees’ paycheck against the going rate. Baker, Thomsen Associates (www.SalariesReview.com/freedata) and the ERI Economic Research Institute (www.erieri.com/doltrends) offer insight into competitive pay rates for more than 3,000 jobs defined by city, state, region, experience and job responsibilities. Be prepared for a surprise.

Working the niche

QuickChange, the 10-minute oil change chain Tim LaGanke has built over the past four years, grew by 50 percent last year, with similar growth anticipated this year. LaGanke, who formerly co-owned Lube Stop chain, plans to open another six oil-change shops by the end of 2000.

LaGanke targets secondary markets and installs his patented modular 10-minute oil change buildings on affordable, often unusable lots about the size of four parking spaces. In addition to 12 QuickChange stores in the Cleveland market, there are 18 others around the country, which are owned and operated by private investors.

Ameritech New Media strikes again

Northeast Ohio cable companies should be afraid, very afraid. After popping up to do battle in 11 local communities, Ameritech New Media — the nation’s largest competitive cable company — is introducing a new fiber optic service in Garfield Heights. Boasting a “razor sharp picture,” 99.9 percent reliability, an interactive television listings guide and 24-hour customer-care line, Ameritech New Media may quickly catch the attention of other city leaders hoping to breath a little life into their communities’ dusty cable packages.

Not fading away

For anyone still thinking the Linux operating system is going to be a passing fad, there are solid new numbers showing its popularity is on the rise. In a national survey by California-based RHIConsulting, 57 percent of chief information officers polled believe use of the Linux system will increase over the next three years. Three percent projected a decline. The survey polled 1,400 CIOs from a stratified random sample of U.S. companies with more than 100 employees.

Export growth

Ohio companies expect a dramatic increase in exports over the next five years, according to a joint study conducted by Xavier University and Cleveland State University, and sponsored by the U.S. Department of Commerce. Of the business owners who responded, about two-thirds saw a substantial increase in exports over the past five years. Almost three-quarters expect an export volume increase of more than 50 percent.

The forecast is good news because it seems to be just the opposite of the national trend, according to Dr. William J. Lundstrom, Professor of Marketing at CSU’s College of Business and a co-author of the report.

The U.S. has a growing trade deficit caused by the purchase of more goods and services imported to the U.S. than U.S.-made goods and services exported to other countries,” Lundstrom told Global Vision, a publication of the World Trade Center Cleveland. “The situation worsened rather than improved over the past several years.”

For more information on the report, visit www.wtccleveland.org.

Join the revolution

Small Business Survival Committee — a Washington D.C.-based nonprofit organization geared toward protecting the small business owner — released a disturbing report on the local telephone industry and its unfair treatment of small companies even after the Telcom Act of 1996.

“A thorough study of the current state of local telephone service leads to a simple conclusion: Even after the promises of the Telecom Act of 1996, the local telephone industry remains one of the most anti-competitive industries in America,” says SBSC Chair Karen Kerrigan. “With repeated attempts to gain access to local telephone customers being fought by Bell monopolies in practically every state, markets remain closed or difficult to penetrate.”

The SBSC is trying to convince lawmakers that small businesses need more local telecommunication choices to compete against large corporations, since upgrades promised by providers, the report points out, have gone largely unfulfilled. To obtain a copy of the SBSC report on local phone competition, click on “What’s New” at www.sbsc.org.

Lamson & Sessions on the defense

A U.S. District Court judge in Illinois in November denied Cleveland-based Lamson & Sessions’ request to set aside a jury’s decision to award Illinois-based Intermatic $12.5 million in damages in resolution of a patent infringement case. The court also ordered Lamson & Sessions to pay $1.5 million in prejudgment interest to Intermatic. The ruling came two months after a jury’s ruling that Lamson & Sessions infringed on Intermatic’s patent for an outdoor electrical outlet cover.

Passing the bell to generation three

Jess A. Bell Jr., grandson of founder Jesse G. Bell, has been named chairman and CEO of Bonne Bell Inc., a Lakewood-based cosmetics and beauty aids manufacturer. Bell takes over from his father, Jess A. Bell, 74, who assumes the post of vice chairman of the 72-year old company.

“We are now officially in the third generation,” says Bell, whose innovative use of senior workers was profiled in SBN’s April 1999 issue. “Very few private family businesses make it to the third generation.”

Hospitals get creative

Nine out of 10 of the 185 hospitals and other health care organizations surveyed by HR consultants William M. Mercer Inc. reported turnover among RNs was a problem. Organizations exceeding revenue of $500 million rated the problem as significant. Not terribly surprising, given today’s tight labor market. The shortage has forced health care organizations to sweeten the pot to keep RNs on the payroll.

Increasing base pay was the most common approach and rated as very or somewhat effective by 96 percent of respondents. “Pay raises are often excellent as a short-term solutions, but may be insufficient as a long-term approach unless employers also make other changes to the work,” says Mercer pay expert Jose Paogoaga.

Continuing education was rated as very effective by 30 percent of health care organizations, while flexible scheduling and shifts was at 28 percent. Although it looks like showing employees the money may be the most dependable option, Pagoda says it is an issue that can’t be avoided when an RN shortage means longer response times, a reduced capacity to treat patient or even errors.

“At some point, these negative outcomes will have an effect on a hospital’s bottom line,” he says. “It costs an organization one-and-half to two times annual salary to find and train a replacement for an employee who leaves.”

Do-it-yourself business valuations

You want to know the value of your business, but don’t want to hire a high-priced business consultant to do the work for you. Companies are cropping up with products allowing entrepreneurs to determine a value for their business in the comfort of their own homes. Colorado-based Innovative Professional Software Inc. offers a program to value your business for a mere $200. VALUware, a different business valuation program, is for sale at www.bizbookssoftware.com for $330. The only question seems to be whether any of these means of business valuation would hold water with the IRS.

Health care compensation blues

CEO pay packages at the nation’s largest publicly owned, for-profit health care companies remained flat in 1998, reflecting Wall Street’s continued skepticism of an industry troubled by a stunning drop in market value, according to a new study by William M. Mercer Inc.

From fiscal year 1997 to 1998, the median increase in total cash compensation, which includes base pay and bonuses, among health care CEOs was 5 percent, due largely to a median salary increase of 9 percent. However, total CEO pay packages at the largest health care companies declined — due mainly to poor stock performance — but nevertheless a rare phenomenon in the world of executive compensation.

A lesson in self-promotion

A survey at Chicago’s O’Hare and Dallas/Ft. Worth International airports found 72 percent of business travelers were carrying at least one promotional product imprinted with a company’s name, logo or message. Even more incredible was the fact that 77 percent of those polled said they used the promotional product once a day. Pens and pencils topped the list of favorites, followed by clothing. But, before you go rushing out to buy those fleece pullovers bearing your company’s logo, consider that the Promotional Products Association International conducted the survey.

Customer cloning?

Ever wanted to find a batch of new clients just like the ones you already have? InfoUSA.com, a widely popular business-to-business Web site, is offering a “Customer Analyzer” that helps find new prospects free of charge.

“(It) takes the mystery and guesswork out of prospecting for new customers,” says Bill Chase, CEO and president of InfoUSA.com. “It answers the age-old question: How do I find really good sales leads for my business?”

Web site visitors are asked to supply the phone numbers of existing customers and click a specific geographic area to build the profile of new customers. The user can then search, sort and print the results. The list of prospects includes contact names, fax numbers and credit ratings. Impressive results for a few minutes of work.

Another chunk of medal for the collection

Cleveland’s youngest microbrewery, Western Reserve Brewing, added another national medal to its quickly growing collection — a silver at the Great American Beer Festival in the category of Belgian & French Style Specialty Ales for its Cloud Nine beer. More than 400 breweries from around the nation competed in the festival. The beer joins other Western Reserve winners American Wheat Beer, Amber Ale, Nut Brown Ale and the seasonal Lake Effect Winter Ale.

Small companies and health care

Maybe it’s because small business owners have to look at

their employees every day, but recent numbers about employee health care costs are a bit startling.

Only 75 percent of employers with fewer than 250 employees require their workers to pay part of their health care coverage. Meanwhile, 94 percent of large companies with 2,500 or more employees require employees to pay part of their health care coverage, according to Watson Wyatt’s 1998/99 ECS Survey Report on Employee Benefits.

What drug abuse costs your company

If one of your employees is using on the job, it could be costing you as much as $10,000 each year. That comes from Cyndy Cook, director of marketing and sales for Clinical Health Laboratories Inc.

“In addition,” she says, “the Bureau of Workers’ Compensation discounts premiums from 6 to 20 percent for organizations that develop a drug screening program in support of a drug-free workplace.”

The best care everywhere

A research corporation announced that the Cleveland Clinic Foundation is one of the nation’s top 126 hospitals, according to the 1999 Consumer Choice Award winners. Hospital consumers selected the clinic as one of those having the highest quality and image in 101 markets throughout the United States.

This is the fourth year National Research Corporation (NRC) has bestowed awards on hospitals. NRC President and CEO Michael Hays says the company expanded winning criteria this year to reflect composite scores on multiple quality and image ratings provided by consumers in NRC’s annual Healthcare Market Guide Study. Of the 2,500 hospitals rated by consumers, the winning 126 rank highest in their Metropolitan Statistical Areas, defined by the U.S. Census Bureau.

The 1999 study surveyed more than 170,000 households representing more than 400,000 consumers in the contiguous 48 states and the District of Columbia.