Young says companies acquire equipment under lease arrangements for four primary reasons: Leasing can reduce up-front cash expenditures, improve the company's tax picture, reduce assets on balance sheets and manage the risk involved with the purchase.
"Those are the primary drivers, along with pure convenience," says Young.
Leasing is especially convenient when a company needs the equipment immediately.
But what is the best option for your company, purchasing or leasing? Young says the first rule is to know the asset and get as much information as possible.
"Know your objectives regarding the acquisition," Young says. "And be able to explain them to your lessor."
There are numerous types of purchase/lease agreements; which type is right for you depends on many factors. There are specific types of leases for transportation equipment, aircraft and construction equipment, as well as computers, barges and mining equipment. Each has its own set of accounting and tax implications that you should know about before signing.
Young advises companies to go to an expert, experienced lender before making a decision.
"Get someone to help you analyze your situation," says Young. "Someone who can understand what you are trying to accomplish and make the best recommendation to get you there."
The bottom line, says Young, is to know the equipment you are acquiring and what you want to do with it, and talk with someone knowledgeable to understand the value of each type of lease arrangement.
"Talking with someone you trust that has the expertise you need is important," says Young. How to reach: Bank One Leasing Corp., (614) 213-6995
Maybe what we really need is a good case of an attitude readjustment. I know it's easy to look to the left and to the right and see something that appears to be so much better than what we have. Each one of us has a certain lot in life and it is important to make the best of it. The first thing that happens when we look to one side or the other to see what we don't have is we forget what we do have. Discontentment sets in and we become ungrateful.
Eventually this leads to a bad attitude.
How should we view the discontentment that appears from time to time? As an enemy, and try to avoid it, or as a friend we can learn from?
I see four ways to move closer to a better attitude.
1. Appreciate what you have before you lose it. You or your business may not be where you want to be, but it is important to appreciate what you have or it could be taken from you. Don't look at what you could have, but rather appreciate what you have accomplished.
2. Appreciate what you don't have before you get it. Everything isn't always as good as it seems. Don't wish something upon yourself that appears to be good, but turns out to hurt you. Difficult economic times can lead to poor decision-making as companies take high risks to try to turn bigger profits.
3. Lead by example. A great attitude is contagious and people want to be around it. If you see how much differently you can view life with the right attitude, you'll never have a bad attitude again.
4. Learn from your mistakes. A bad attitude can only be your friend if you learn from it. Change your tone and watch how much better people respond to you. Communication and morale will improve as your attitude changes.
The true test of a person's character is not when things are going well, but how that person handles challenges. The people with winning attitudes are the ones I want on my team. Those with bad attitudes always get thrown off the team in the end because no one wants to play with them.
For better or worse, our brains don't directly plug into computers (yet). But online sales training today is better and more convenient than ever.
Upgrading sales skills to 21st century standards through Internet-based training sessions saves the time and expense of sending salespeople to a training seminar. That's good for both the company and the sales staff, because when salespeople aren't out in the field, they're not making sales or commissions.
Through a series of short Web-based training modules, salespeople at all experience levels can sharpen their skills and learn new-economy selling techniques. One company offering such modules is the Sandler Sales Institute, based in Baltimore.
In addition to training, it provides online testing and hiring profiles to make sure salespeople's skills match their resumes. While no single training system is perfect and each has its pros and cons, "just-enough, just-in-time" online sales training may be just what you or your sales team need to help build sales in a slowing marketplace.
And it's a lot less painful than a computer jack installed in the neck. How to reach: Brian Urbanski, (614) 792-3400 or Sandler Sales Institute.
But what happens when that person leaves? How can you be sure your customers won't leave, too?
According to the study "How to Lose Your Star Performer without Losing Customers Too," by Neeli Bendapudi and Robert Leone of The Ohio State University's Fisher College of Business, there are ways to ensure your customers' focus remains on your company. The secret is to build company equity over employee equity. Here's how.
* Don't allow one key person to have the only contact with the customer. Use teams or rotate employees.
* Make the customer aware that your hiring/training process ensures high caliber personnel throughout the company.
* Publicize your company, employee achievements and awards.
* Emphasize the company culture and the steps you take to ensure quality customer service and interactions. How to reach: OSU Fisher College of Business, (614) 292-8511.
Ames Department Stores Inc. filed for Chapter 11 in August 2001. In January 2002, Service Merchandise announced it will cease operations after operating in bankruptcy for nearly three years. Kmart filed for Chapter 11 protection in January 2002 and closed nearly 300 stores.
With so many retail and discount stores closing or struggling to stay in business, it may seem the companies that remain competitive just need to dig in and ride out the recession. But that's not what Big Lots is doing.
Instead, the Columbus-based company has chosen to reinvent itself in an effort to focus its branding message on a national level.
The company was founded in 1967 by Sol Shenk, who had a background in auto parts manufacturing. Shenk chose to stick with what he knew, and opened an auto parts store under the Big Lots name in Ohio. In 1970, the company began operating as Consolidated Stores; by 1982, annual revenue grew to $24 million.
That same year, the company launched the Odd Lots/Big Lots closeout retail chain, locating the first Odd Lots in Columbus. These were among the first broadline, closeout stores in the country. It works this way: When Heinz makes too much ketchup, you can find the overrun at Big Lots and buy a bottle at substantial savings. Closeout retailers also take merchandise that has been discontinued, undergone package changes or that are test market products.
By 2000, the company had several years of acquisitions, growth and changes in leadership under its belt, and Michael Potter stepped in as chairman and CEO of the $3.2 billion company with nearly 1,300 stores. Consolidated had five chains at that time: Mac Frugals, Odd Lots, Big Lots, Pic 'N' Save and K*B Toys; each with its own marketing and advertising needs.
Quarterly comparable sales numbers boasted some very modest increases, but also some decreases, and with stock prices dropping, it appeared this hodge podge of regionally branded stores needed unity to gather momentum.
A "new" company is born
Potter announced major restructuring changes in March 2001, included divesting the company of K*B Toys, changing the names of all its stores -- as well as that of the company -- to Big Lots, and placing a new focus on the customer.
That meant cleaning up less than spotless stores, refurbishing them with better lighting and equipment, revamping the merchandising supply system and improving customer service.
More than a year later, many of the changes are complete; others are still in the works.
"We have about 240 stores left to convert (to the Big Lots name) by this Christmas," says Potter, who is excited by the marketing prospects of one national identity. "It is easier to be known nationally, and we can leverage our advertising, especially television."
Potter says the company has been doing its marketing homework and determined there are more long-term benefits in television advertising than in its current means of advertising, store circulars.
"Studies show that television creates a brand more efficiently," he says. "Especially three, four years down the road."
Potter says only about 15 percent of the nation recognizes the Big Lots name, compared to a 90 percent recognition rate for Wal-Mart. That is why the company is turning to more television advertising with its spokesperson, Jerry Van Dyke.
"We want to increase brand awareness," says Potter. "We've had very good response from the television ads we've already done, so we'll continue to move in that direction."
Give them what they want To make the stores more attractive to current and prospective customers, the company asked people why they shopped there -- or, more important, why they didn't.
"We did a multiyear analysis based on detailed customer studies," says Potter. "We asked what they liked and what they didn't. Our noncustomers said there were too many barriers in place."
Customers felt many of their expectations would not be met -- expectations for customer service, product inventory and physical store standards -- which the company is working feverishly to change. When it comes to inventory, Potter says consumers cannot expect the range of products offered by Target or Wal-Mart; that is simply not its mode of business or its target market.
"We are not ever going to offer as broad an assortment (as retail discount chains like Wal-Mart) from a selection standpoint," he says.
However, the company has put together a list of more than 500 items guaranteed to stay in stock.
"Customers expect to find items like bathroom tissue, light bulbs, diapers and cleaning supplies," he says.
By working with suppliers, the company has found a way to meet that expectation, although the brands may not always be the same.
"We wanted to find a way to satisfy our customers," he says.
That's not all Big Lots has done to improve its merchandise flow.
"Day after day we are relevant in our product offering mix," says Potter. "Our flow is more consistent, and our front-end buying and distribution improvements have had the most important impact on our sales."
And converted stores that were below the new, higher standards of cleanliness and service have undergone a substantial facelift. The result, says Potter, is not just happier customers, but happier employees, since employee break rooms were part of the redo.
"We have begun customer service initiatives, and our customers are noticing a significant difference in service," he says. "And we are producing a wonderful environment to work in. The stores are cleaner, brighter and safer, and our associates are doing a better job."
So what about the bottom line? The "after" Big Lots definitely appears better than the "before." But have these changes had the desired impact on the bottom line? If comparable store sales are an indication, the answer is a definite "yes."
For the first time in nearly two years, the company experienced a sales increase in the double digits, reporting an increase of 14 percent for February. And Potter says new sales figures indicate the double-digit trend will continue.
Brad McGill, a financial analyst with Banc of America Securities in New York City, agrees the company's restructuring initiatives appear to be paying off.
"We are beginning to see some signs of traction," he says. "Comparable store sales are impressive, and fourth quarter numbers are in line with expectations. It appears they are heading in the right direction."
But the company does not plan to rest on its laurels or remain satisfied with the status quo. Potter says it's full steam ahead when it comes to expansion and growth.
"We are adding 90 stores this year, and will add a similar number every year for the next 10 years," he says. "We plan to have a total of 2,500 stores at the end of 10 years." How to reach: Big Lots Inc., (614) 278-6800 or www.biglots.com
Ross Products' employees don't have to look far to see the nutritional company's customers. Their pictures line the walls in the plants -- senior citizens, babies, even members of the employees' families.
"It's not too hard to understand who our customers are and the role we play in making it right for them," says James Hughes, divisional vice president for the company's Quality Center of Excellence for Nutritionals. "It's not like a light bulb doesn't work and you take it back. Our products are expected to work every time somebody uses them."
Quality, then, becomes the focus of Ross, a division of Abbott Laboratories that makes adult and infant nutritional formulas such as Ensure, Similac and Isomil.
"You have to have an organizational commitment to quality," Hughes says. "In general, that's just where everyone in the organization from top to bottom believes that quality is a key business strategy and thinks it's necessary for the success of the business."
In 1999, Abbott executives decided to centralize the company's quality functions. All seven of its divisions had quality structures and processes, but by creating a new corporate Quality Center of Excellence, it could create initiatives to specialize in regulating quality in its three global lines of business: pharmaceuticals, medical devices and nutritional products.
Continuous training and employee involvement ensure quality through all facets of the organization.
"When someone asks, 'How many people do you have in your quality group?' I'm tempted to say 5,000 -- that's everybody in the company," Hughes says, adding that it takes well-trained, well-informed and well-motivated people to maintain quality.
The company offers recognition, awards and gift certificates -- anywhere from $50 to a couple hundred dollars -- to employees for quality initiatives.
"It's a continuous improvement process itself," Hughes says of quality assurance. "You're never there." How to reach: James Hughes, Ross Products, (614) 624-5441 or email@example.com
If you don't have DSL, you may want get it, especially if your company uses dial-up for connecting to the Internet.
"DSL lines are much faster than dial-ups," says David Palan, director of marketing for Sprint Business DSL. "And they are also faster on downloads than T-1 lines."
However, if your main concern is uploading files as quickly as possible, T-1s are the way to go.
Choosing a DSL line positions your company to take advantage of future technology, since dial-up service will not accommodate these technologies, says Palan.
"New technologies in the pipeline are built using IP platforms over broadband-based connections," says Palan. "These include voice command recognition systems and PDAs."
If you already have DSL, are you getting the most for your money? If a slow connection is bogging down your e-mail system or you're not getting business-quality service from your provider, you may not be getting all you could be from your DSL connection.
"There are four issues companies should look for in choosing a DSL provider: a dedicated business line, guaranteed network availability, and dedicated customer and technical service," says Palan.
Some providers offer businesses the same line as residential customers, which could be a problem.
"That's not an issue until about 3 p.m. when the kids get home and start sending streaming videos and other large files to each other," he says.
And some providers offer business customers the same representatives as residential customers, which can slow response time and productivity while employees wait for a connection.
In addition, business customers should ask potential providers what they guarantee in network availability, as this can vary from company to company. How to reach: Sprint Business DSL, 866-806-3278 or www.sprintbusinessdsl.com
Pardon the dust. After months of strategizing, a restructured Huntington Bank is emerging, and planning to make the most of its Midwest markets.
The demolition of the "old" Huntington began more than a year ago, when Frank Wobst handed over the reins of leadership to Bank One veteran Thomas Hoaglin. While at Bank One, Hoaglin experienced the success of working for the hometown favorite bank, and saw the opportunity to achieve the same results at Huntington.
Within months of taking over, Hoaglin announced his restructuring plan: Sell the Florida operations, close more than 40 branches in the Midwest, cut dividends by 20 percent and create a new corporate culture. And the underlying strategy behind the plan was to leverage Huntington's hometown team advantage.
So where do things stand as the dust settles?
"We completed the sale of the Florida franchise, reduced dividends and consolidated offices predominantly in Ohio and Michigan," says Hoaglin. "Other changes that address how we position ourselves and operate going forward -- those are a work in progress."
You can't change the corporate culture for more than 4,000 employees overnight. But Hoaglin's vision is clear.
"We decided to become the local bank with national -- or more sophisticated -- resources," Hoaglin says.
Part of this cultural change is a renewed dedication to customers.
"We have to dedicate ourselves to our customers' needs and be responsive and flexible," says Hoaglin.
To provide that flexibility, Hoaglin is giving managers more autonomy -- and accountability.
"Being close to the customer requires you to give decision-making authority to local management," Hoaglin says." And with that authority comes accountability. We want managers to apply their skills, run their businesses, but be held accountable to the results."
This decentralization led Hoaglin to re-examine his leadership team. As a result, the only regional president who wasn't replaced was Central Region President James Kunk.
Kunk, whose authority and accountability include Central Ohio and West Virginia, says his biggest challenge in the months ahead is to make good on the bank's new focus.
"We want to make sure all our people deliver and do what we say we're going to do," says Kunk. "That means making decisions at the local level and not passing the buck."
Kunk wants associates to take ownership and feel connected to the customers they serve.
"We want customers -- whether they are retail or commercial -- to have a personal relationship with our associates," says Kunk.
This relationship starts with the associate.
"In my experience, happy employees make happy customers," he says. "Associates are enjoying the new Huntington and their work. They can share ideas in a less formal way. There's a real esprit de corp, and it's not about winning. It's about being a team. And that is reflected back to the customer."
Kunk cites Hoaglin's vision as the goal for his region: To make customers feel their branch is the local community bank.
"We are the local bank, and that's something that we're proud of and I want to accentuate," says Kunk.
While there are 43 fewer community branches after the recent closures, Kunk says the customer retention rate has been higher than forecast.
"Initially there was some concern over the closings," he says. "But I feel good about the customers we've retained."
From the shareholder's perspective
Huntington's changes have made associates and shareholders alike happy. Pre-change stock prices (more than a year ago) were around $15.30 a share. The stock was priced at $19.74 as of March 8. Confidence in the leadership team and its initiatives is also on the rise.
"A year ago we had quite a few unhappy shareholders," says Hoaglin. "I have spent the last year communicating with shareholders, keeping them apprised of our progress. The response has been very positive."
Hoaglin says that overall, shareholders feel the company is heading in the right direction and look forward to seeing results this year.
"Shareholders are expecting us to deliver results in 2002," Hoaglin says. "And we are confident we can meet that expectation," despite the current economic environment.
Hoaglin says while there is no doubt the recession has had a negative impact on the bank's markets with a weaker loan demand, it is also experiencing stronger deposit growth.
"We'll do just fine," Hoaglin says. "The economy is not causing any major concerns."
And with the changes that have taken place, there won't be any more any time soon.
"We have our game plan and we'll be working hard on it. I don't anticipate any major changes of direction," he says. "We have the talent and the capability of achieving our goals."
Huntington doesn't plan to expand outside its Midwest markets anytime soon. Hoaglin feels strongly that the bank's success lies in its own backyard.
"I think we'll do best to keep our focus on the Midwest," he says. "There may be some expansion opportunities within the Midwest but we will not be expanding outside that footprint."
Pressing the hometown advantage
To emphasize Huntington's commitment to its community, the company is partnering with Mayor Michael Coleman to revitalize the city. Huntington is establishing a goal of $275 million for lending and investments over the next five years in low- and moderate-income neighborhoods.
While the majority of loans will be for home purchases and improvements, it will also be used for some small business lending programs.
"It is our intention to be more and more visible in strengthening our community," says Hoaglin. "We expect to see the mayor focusing in developing the downtown and we will play a leadership role in that initiative. There will be a lot of participants from both the public and private sectors, but we expect to be a visible player in that plan."
It seems Columbus stands to gain a great deal from the "new" Huntington Bank's commitment to community. How to reach: Huntington Bank, (614) 480-8300 or www.huntington.com
When the Internet boom was going full force, we began investigating ways to use Internet technology to better serve our audience -- top decision-makers of local companies. As we were putting the finishing touches on our plan, the bubble burst.
Undaunted, we moved forward with our vision of building a Web site that not only met the needs of busy executives but did so profitably. The revised SBN Online (www.sbnonline.com), launched as a pilot site in our Cleveland market, has met both our goals.
Each subscriber to SBN Cleveland has been pre-registered for SBN Online. By using the user ID and password we supplied by mail, readers can activate their registration and get a personalized home page containing local business news and information relevant to them. Our database of thousands of articles, ideas and resources is filtered using a reader's profile, resulting in the display of news, events, presentations and other information that best matches the profile.
The response has been great. We are ahead of our projections for users and site activity, though SBN Online is only a few months old. We are so pleased with the success that we plan to expand the concept to other cities this summer.
As I look back on what it has taken to relaunch SBN Online, a number of important lessons stand out.
1. Stick to what (and who) you know. We spent a great deal of time and money researching our concept for SBN Online. What became clear is that while we may not be concentrating on the biggest market, we are concentrating on the best market. Middle-market companies account for only 10 percent of all businesses, but they boast nearly half of all corporate revenue and purchasing power.
2. Work within a budget. In the headiest days of the Internet boom, we were quoted incredible prices for products and services. While many of these offers would have met our needs, we continued to look for the right deals with the right partners.
3. Stay the course. Even as events conspired against us, we pressed forward. The bursting of the Internet bubble had everyone rethinking the role of the Internet for businesses. As the economy weakened, more doubts crept into people's minds. Then came the Sept. 11 terrorist attacks. Each one of these developments could have caused us to put the project on hold. Instead, we made adjustments and kept moving forward.
Having done these things, SBN Online was reborn even as the bursting of the Internet bubble caused other business Web sites to fold or take significant steps backward.
If you haven't registered for SBN Online, I encourage you to do so soon. If you receive SBN Magazine under your name, you were sent a user ID and password. If you've misplaced it, e-mail your name, business and address to firstname.lastname@example.org and we will reply, or call us at (216) 228-6397 and ask for SBN Online customer service.
And please let us know what you think. We already are at work on improvements and welcome your feedback.