Michael Petracca, managing partner of the Columbus PricewaterhouseCoopers office, says the buyer and seller in a given transaction may be at odds as to how to transact the deal because of differing tax consequences.
"Sellers want to sell shares of stock, while the buyers want to buy the assets of a company," says Petracca.
He says there may be unfavorable results for someone buying shares of stock.
"When you buy stock, you step into the shoes of the shareholder," says Petracca. "That can cause problems because you are assuming all known and unknown liabilities."
Once the seller has the cash, there may not be a way to get restitution for unforeseen liabilities. One way to deal with this possibility is to extract indemnification through a cash escrow to cover potential losses.
On the other hand, as a buyer, when you purchase a company's assets, the transaction is taxable to the seller, while selling company shares is not.
Keep in mind that when purchasing a company's assets, each client under contract must resign that contract. If an important client says no, it could be a major blow. You don't have to worry about that with a stock transaction. So which is the best way to go? That depends on the situation.
"The buyer needs to determine what is best," says Petracca. "Is the stock as valuable as cash? Is it better than cash? It becomes a business decision." How to reach: PricewaterhouseCoopers, (614) 225-8700 or www.pwcglobal.com
When was the last time you asked your employees if they trust you? People take their employees for granted, and that's a big mistake.
I see six ways to build better trust between you and your employees that will make you a better leader
1. Communicate. It's better to overcommunicate than not communicate at all. This can be done through daily, weekly or monthly e-mails, newsletters or managers' meetings.
2. Take a genuine interest in your employees' financial situation. If an employee is having financial problems and you are in a position to help, why not extend an interest-free loan that can be deducted out of future paychecks? It costs little, and the gesture will go a long way.
3. Take a genuine interest in your employees' personal situation. Flextime is a great way to allow employees to deal with childcare, eldercare or sickness in the family. Employees appreciate flexibility.
4. Give recognition when deserved. Surveys show employees crave recognition as much as or more than money. Show them you appreciate their efforts.
5. Show a clear direction for the company. People need to be able to see the future of the company, as well as their own future. It's important to share goals and objectives that pave the way to success.
6. Share key performance measures of how you run the company. Everyone should know what variables are used when making decisions. For instance, one variable could be return on investment and the timeframe in which you expect to get that return.
Leadership is not to be taken lightly. The more you care about your people's needs, the greater the chance that you will be the person leading them. Even when you think your employees are wrong, if you listen carefully, they're probably telling you something about your business that needs correcting.
In the current economic climate, you can't afford to ignore them.
JoAnn Sears, sales center vice president for small- and medium-sized businesses at AT&T, says there are more factors to consider than rate per minute.
"Customers are looking for stability and maximizing productivity," says Sears. "Purchasing long distance is not any different than purchasing any other type of technology."
But don't wait until the last minute to make a decision.
"Plan ahead and do some research," Sears says.
She advises decision-makers to go online to see what a variety of long distance providers are offering.
"But read the fine print and make sure you are comparing apples to apples," Sears says.
She cautions long distance shoppers to consider the financial stability of the long distance company.
"You have to ask yourself, 'What will I do if this company goes bankrupt?'" says Sears.
Plus, says Sears a company with a tight cash flow may not have money for research, development and improving or upgrading services.
When looking at that all-important rate per minute, Ray Wendell, voice and LD product manager for Qwest, says to make sure you're including all charges when calculating rates.
"You might be surprised when the other charges are factored in, like minimums, what the rate per minute is," says Wendell.
Like Sears, Wendell encourages business customers to do their homework.
"It's a pretty fluid market right now, so it's worth the effort," he says. "And don't forget to ask your current account rep if you qualify for any new programs."
Also look into bundling services, which can save you money.
"Companies that have data needs may get a better rate if they buy multiple services," says Wendell, and some companies offer discounts depending on your average total bill. How to reach: AT&T, (800) 222-0400 ; Qwest, (614) 798-6000
Law firm Thompson Hine LLP has combined with the 110 year-old New York law firm Gould & Wilkie LLP, adding 19 attorneys and 16 legal assistants and support staff. The combined firm will operate under the name Thompson Hine LLP.
Fifth Third Bank has been named to the Barron's 500. Published annually in the Dow Jones Business & Financial Weekly, the Barron's 500 grades the top 500 U.S. firms on their investment performance using four criteria: stock market return; cash flow return on investment or real return on equity for financial institutions; forecast growth or decline in cash flow or real return on equity; and sales growth over a 12-month period. Fifth Third was ranked sixth.
Finalists for Columbus and Central Ohio's 2002 Ernst & Young Entrepreneur Of The Year Award are Mark T. Wehinger of EMI; Rick Malir of City Barbeque; R. Blane Walter of inChord Communications; Harley E. Rouda of Real Living; and Joseph C. Dager of Velvet Ice Cream Co.
Famous Photography, which specializes in golf photography and memorabilia, promoted Ron Bissinger to president. Amy Sagle was named marketing director and Ron Bollie was hired as vice president of sales and marketing. The company is headquartered in Dublin.
The Greater Columbus Convention Center promoted John R. Page to senior operations manager and Larry McDaniel and Richard Cook to operation coordinators. Suzanne Turgeon has joined as a sales manager focusing on the service of Ohio associations and government groups. Turgeon was formerly with ARAMARK Sports and Entertainment at the Convention Center.
Squire, Sanders & Dempsey LLP formed an association with Brazilian firm Farroco & Lobo Advogados. The firms will operate from offices in Rio de Janeiro and Sao Paulo. The association allows Squire Sanders to provide services to multinational companies doing business in Brazil and to Brazilian companies expanding locally or globally.
Osteopathic Heritage Foundations has moved its offices to 1500 Lake Shore Drive, Suite 230, Columbus 43204-3800. Phone and fax numbers, as well as e-mail addresses, remain the same.
Kathryn Lorz, president of Lorz Communications Inc., has been named the 2002 winner of the Marion "Pat" Renick Headliner Award by the Columbus Chapter of the Association for Women in Communications. The award is bestowed annually and recognizes a member's business professionalism, community involvement and association activities.
Douglas Frazier, partner at Clary Communications, received the Tom Poling Practitioner of the Year award from the Central Ohio Public Relations Society of America. The annual award goes to a PRSA chapter member whose accomplishments have made a major contribution to the public relations profession. The Central Ohio chapter has approximately 400 members.
Schottenstein Zox & Dunn received the Legal Marketing Association's Your Honor Award, presented for first place in creativity and brand identity in a signature item. The item, a hockey puck with the firm's logo, was mailed to clients announcing its upcoming move to Columbus' growing Arena District.
C. Russell "Rusty" Thompson was appointed president and CEO of Evans Adhesive Corp., an adhesive company with manufacturing facilities in Columbus; Sandersville, Ga., and Rancho Cucamonga, Calif. The company supplies adhesives for a wide range of applications, including packaging, labeling, product assembly and outdoor billboards.
TDCI Inc., a Columbus-based software and consulting company that specializes in enterprise resource planning, e-business and engineering solutions, named Steven Frianco director of the Enterprise Engineering Solutions Practice. Frianco was formerly with the Cleveland office of Arthur Andersen, where he was responsible for Andersen's Customer Relationship Management (CRM) practice.
Griffin Communications has created a Health Care Marketing Division and named Gary Stelluti vice president. Stelluti was formerly director of communications and marketing for the Columbus Medical Association and Foundation. He will oversee the management and growth of Griffin's health care clients.
A TRTW program will contribute to the bottom line with maintained productivity, improvement of your incident rates and increased employee morale, with injured workers able to be productive while recovering from an injury.
Employees' chances of successfully returning to their original positions increase if they return quickly from an injury. Studies show that the longer the employee is off work, the more difficult it becomes to return. A quick return also boosts the self-esteem of the injured employee.
Retaining experienced employees helps minimize the costs associated with decreased productivity, hiring and training replacements, and overtime. It also decreases the disruption of having temporary workers or workers in unfamiliar job rotations. National statistics show these types of indirect costs are often four times more than the direct costs of the injury.
A solid return-to-work program uses real job duties combined with the employee's restrictions. The program should be viewed as transitional, with a definite end point. Avoid creating light duty jobs that injured employees may see as long term or permanent.
It may be appropriate to work with transitional work developers to implement a TRTW program. The need for outside help varies depending on your work environment and the types of injuries your employees is experiencing. The Ohio Bureau of Workers' Compensation's Transitional Work Grant program helps ease the cost of implementing a program and works with an approved list of transitional work developers.
The goal of a TRTW program is to get the employee back to full duty quickly and safely. Employees see a successful program as a benefit, and getting them back to work quickly reduces their stress as they continue to receive a full paycheck and transition back into a normal routine. Dianne Grote Adams is president of Emilcott/DGA. Reach her at (614) 890-0800, ext. 208, or firstname.lastname@example.org.
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