Morgan Lewis Jr.
Publications in places from the United Kingdom to Southern California turned to Kenneth T. Mayland, president of Ohio-based ClearView Economics for answers.
The short answer is yes, Mayland told them. But, he added, the disastrous events in September have slowed recovery. What helped was the early response of business owners, the Federal Reserve and even the government before the attacks, which prevented an even deeper recession.
"In my 28 years of doing this, the actions taken have been the most potent list being brought to bear on the economy," Mayland told nearly 200 real estate and construction professionals at Grubb & Ellis Co.'s 2002 Cleveland Commercial Real Estate Forecast. "Over the next year, those steps will gain some traction."
In the meantime, Mayland says you should ignore these common myths about economic recovery.
- Myth: Consumer incomes must recover before consumer spending will recover. "That is wrong," Mayland says. "It's wrong historically, and it's wrong statistically. The spending recovers before incomes do."
- Myth: After 11 interest rate cuts, there is little to show. Monetary policy is no longer effective. Wrong, says Mayland. "The lag time is one year. We're just starting to feel the impacts from the first cuts in January 2001, and there are a lot more rate cuts in the pipeline."
- Myth: A rise in interest rates will snuff out a smoldering recovery. "When the economy's prospects improve, that means the returns on investments will improve," Mayland says. "A rise in interest rates is a good sign that the economy is starting to cook."
- Myth: Company performance must improve before stock prices can rise. "That's not true," Mayland says. "Stock prices bottom out and rise before profits do."
How to reach: ClearView Economics LLC, (216) 595-9931
The Supreme Court just made it easier for the anti-discriminatory watchdog to take employers to court. In January's 6-3 ruling, the High Court said the EEOC can, on its own, sue for damages such as back pay and reinstatement in discrimination cases, even when the employee signed a binding arbitration agreement. The EEOC can also seek compensatory and punitive damages on behalf of the victim, the court ruled.
Cases like this will be rare but potentially costly to an employer, says Cleveland attorney George Crisci, a member of Ulmer & Berne's employment and labor law group.
"The EEOC only gets involved in a small number of cases," says Crisci, "But when it wants to go to court, there's very little an employer can do to limit the EEOC's ability to obtain the remedies for the victim."
Before the EEOC can file suit, it needs to find probable cause to pursue an investigation. It's here, in the early stages of a claim, that employers can help prevent litigation.
"Take a charge very seriously," Crisci says. "Devote whatever resources are necessary to presenting its case to the investigators to get a no probable cause determination."
Here are Crisci's recommendations for responding to an EEOC charge.
An employer needs to be as open and honest as possible during an EEOC investigation, Crisci says. "If you ever convey to them that the employer has something to hide, they will take it to the next step," Crisci says. "I do not ever pick a fight with them."
Control the spin
Deliver all information the EEOC requests, and do it promptly. The commission will most likely request from the employer a position statement detailing what happened to lead up to the employee termination. Include all supporting documentation. "If something bad comes out, it's always best that the employer be the person that tells the EEOC because they can put a friendly slant on it," Crisci says. "You don't want to run the risk to have somebody else do it who is not friendly to the company."
Know your rights
If you have an arbitration agreement with the employee, enforce it. If you get a favorable determination in arbitration, it could limit the damages you have to pay, even if the EEOC pursues a lawsuit.
How to reach: Ulmer & Berne LLP, (216) 621-8400
Waffle wrangleThe Supreme Court's recent ruling that the EEOC could pursue a lawsuit despite a binding arbitration agreement spawned from a simple discrimination complaint. The claim was from a former Waffle House cook in South Carolina who suffered a seizure on the job. The cook was discharged and filed a complaint with the EEOC claiming disability discrimination. He refused to enter arbitration with Waffle House.
In the end, it was a mixed victory for Waffle House. The employee was obligated to participate in arbitration under a lower court's ruling, which is what Waffle House had requested. But the suit from the EEOC was allowed to stand, which most likely cost the diner chain a lot of waffles. How to reach: Ulmer & Berne LLP, (216) 621-8400
"Just show me the houses," they complained.
Finally, Ciepiel had enough of the digital tirades and set out to redesign the site (www.realtyone.com).
Today, he admits the new site is a lot more sensible than the old one. It remembers what kind of house the user is looking for. And it remembers the price range, the neighborhood and other key data, so when house hunters log on, they see houses that fit their profile.
It's the same type of smart personalization used for selling books and CDs, for job hunting and car shopping, and, yes, for news. (Check out SBN's personalized Web site, www.sbnonline.com.)
SBN recently sat down with Ciepiel to discuss Realty One's site redesign and why the real estate giant invested in technology during uncertain economic times.
Bricks-and-mortar companies are scaling back on the Web. Why did you choose now to release such an ambitious site?
As consumer use of the Internet increases, a greater percentage of our customers are utilizing the Internet as a very important part of their search. The most recent data shows that 75 percent of people with incomes over $35,000 have Web access.
When they're in the real estate market, they're looking at homes on the Web. A person who doesn't do it spends three times more time in the market. Once a person has done the education on the Web, on average they spend 2.1 weeks looking at homes, compared to the non-Web user, who spends 6.4 weeks.
The non-Web user is going to look at 15 homes. The Web user is going to look at 7.9 homes.
Now, think of our realtors having to drive people around to look at homes. For us, this was a very logical business decision. What we've really done is look at what we offered before, what was available elsewhere, and improve the customer experience with a goal to grow (our) market share.
As we grow market share, we're going to increase profits and sales, and ultimately, we're going to create shareholder value. I can't think of a better reason to build a Web site than to create shareholder value.
What did you learn from others' mistakes and successes on the Web?
We spent a year developing this site and studied some of the best sites inside and outside this industry, as well as studies by the California Association of Realtors and the National Association of Realtors. We found that consumers wanted to see homes when they came to a real estate site, so we designed our site in such a way that at the home page, every time you go to it, you see another home. We rotate them.
Customers can also see homes with one click of their mouse. Very few sites actually do that.
Another thing we learned is that consumers want to find out information about a home quickly. They don't want to make phone calls. Our site is the only site in Northern Ohio that allows the consumer to schedule an appointment to see the home online, immediately, through a technology called Showing Time.
And, most people who contact us through the Web don't have a mortgage, so we partnered with Fannie Mae to offer something called Instant Pre-Approval, an online loan approval in 10 minutes or less. We're averaging four and a half minutes.
People have never been busier than they are now. They want services performed for them in an automated fashion. Our new site enables the customer to create a private section called My Home Connection and contains a service, HomeFinder E-Mail Alert.
You fill out criteria and save it. Any time a house that meets your criteria comes on the market, we e-mail you a photo and a description of the home.
Sounds like you did a lot of market research.
We have. But we also spent nine months just planning and strategizing what the site would be before we ever started building it. For example, one of things consumers said they wanted during our research was open houses.
Talk about an inefficient process -- to open up a newspaper and look at little one-line ads that don't tell you anything. I have to drive around to try and find the place, and then I pull up to find out it's not something I'm even interested in.
Now, they can go to our Web site and don't have to wait for the Sunday paper to get a complete summary of the homes in the area they want and the price ranges.
What's the current climate of the real estate market?
We're seeing strong activity in the first-time and second-time market area. Sales for October were 1 percent ahead of last year's October, which is contrary to what you might expect. We did see a slowdown in September, and sales were off about 10 percent. The other area we're seeing softness in is the upper end, the above $300,000 part of the market.
But our mortgage business is up 25 percent because of refinancing. The main things that drive our business are interest rates, employment and consumer confidence. The only one that's waning a little bit is consumer confidence.
But if you've got a job, you're going to jump on these interest rates. There's never been a better time to invest in real estate. And since 1968, when the NAR (National Association of Realtors) started keeping track of housing appreciation/depreciation, there has never been a year on a national basis that housing values went down.
From an investment standpoint, it's much less volatile than the stock market. The Northern Ohio market has enjoyed 4 to 5 percent average housing appreciation each year. How to reach: Realty One, (216) 328-2500 or www.realtyone.com
Many business owners jump into the strategic planning process without really knowing their company's identity. In other cases, they might have a solid vision for their company and where it stands in the market, but their employees' or customers' perception is drastically different.
So before you can plan your direction for the next five to 10 years, you -– and your employees –- need to know what your brand is and what it represents inside and outside the company. Otherwise, your plans willusually fail.
Clark Culbertson, president of Culbertson Group, a marketing communications and brand strategy firm in Moreland Hills, says developing a brand concept isn't just important for consumer goods, but for any company that needs to stand out in its marketplace.
"If you don't know who you are, how will your customers?" Culbertson asks. "Once you have a brand concept, the strategic planning becomes much easier because it dictates what you do and how you communicate. It becomes the corporate culture."
Here's how Culbertson develops a brand concept for one of his clients.
- Interviews: Culbertson interviews employees from all levels of the company. From the CEO down to an entry-level data processor, Culbertson asks them what they do, what they like and dislike about the company and what problems they've seen. If one issue keeps rearing its head, then that's an obstacle standing in the way of a successful brand.
- Research: Analyzing business databases by Forrester Research and Dun & Bradstreet for your industry can help determine how your company is seen in the market, Culbertson says. Study competitor's Web sites and literature to see how they have positioned themselves in the market.
- Survey: Talk to major customers to get their perspective on your company. Focus group research is also helpful, even if your company doesn't serve a consumer market.
Culbertson does not recommend trying to build a brand concept internally. Personal biases and company politics can stand in the way of creating a strong brand. Your employees might be wary of discussing what they don't like about the company unless it's with an objective third party.
"The companies that embrace this idea, it starts to filter through the organization," Culbertson says. "It's not just driving the advertising, it drives how they structure themselves, how they're organized and how they make sales presentations."
How to reach: The Culbertson Group, (216) 292-4881.
Buy recycled. More and more shelving and countertops are being made from recycled alternatives to conventional wood or fiberboard products.
Consider "Wheatboard." This alternative is manufactured from straw that is normally discarded when wheat is harvested. Instead, the waste is compacted into a sturdy fiberboard that is more economical than standard wood particle board.
Avoid tropical woods. Select domestic woods (pine, cherry, oak) over tropical varieties like teak and mahogany.
Try metal. Seek out one of the growing number of manufacturers that incorporate recycled steel or aluminum into their furniture designs.
Avoid VOCs. VOCs, or volatile organic compounds, are gases emitted by furniture glues, some of the foams used in making cushions, and some types of carpeting. These gases contribute to indoor air pollution and can cause headaches and other personal discomfort. Check with furniture manufacturers before you buy to select items that emit low or no VOCs.
Read the label. Some foam cushions are manufactured from polyurethane foam made from hydrochlorofluorocarbons or, HCFCs, chemicals that reportedly contribute to global warming and the destruction of the ozone layer. Look for less harmful alternatives like foams made with acetone, isoprene and even carbon dioxide.
Open the windows. When new furniture is installed, air out the room to reduce the indoor air quality impact.
Refurbish. Before you buy new furniture, consider the possibility of recovering or refinishing your current stock. Wood can be restained or repainted, cushions can be recovered.
Donate, don't trash. Contact community groups, churches, shelters and even schools before you discard used desks, filing cabinets and other office furnishings.
How to reach: Earth Share, (800) 875-3863.
"More than $2 billion in venture capital was invested in e-recruiting," says Phillip Singh, senior director of strategy and business development for Cleveland-based Management Recruiters International Inc. (MRI). "About $100 million of that is left as standing companies."
Singh says the online recruiting boom made a lot of people at brick-and-mortar recruiting agencies nervous, including at his company. There was little to worry about.
"These companies did a lot of simplistic things without good underlying business practices," says James Bennett, chief executive at EmployOn Inc. in Euclid, a Web-based recruiting firm. "They didn't have a broad enough offering and couldn't offer employers good candidates."
All that has changed. Recruiters and job placement services now offer many on-line tools not only for the job seeker, but for the company owner as well. While employers now get flooded with more resumes than ever, the quality of candidates is better and the process moves much faster. Firms are trying to make the task even easier.
EmployOn's Candidate Identification system allows employers and recruiters to find relevant resumes from the millions posted on the Web. Its ClientMatch system lets recruiters match a resume with all the jobs posted on the Web. Bennett says EmployOn will soon offer more services including a tracking system for business owners to log a job candidate from the resume screening to the job interview to the offer and all the calls between.
"It's an exciting time," says Bennett. "The growth in this industry is there, but not everybody will be to capitalize on it."
MRI's BrilliantPeople.com site focus is confidentiality. Candidates can post their resumes without worrying that their boss will view it. Some of the major sites, like Monster.com, don't offer that feature, Singh says. MRI prides itself in offering the jobs that only recruiters know about.
On the back-end, MRI's RecruiterVillage.com, lets recruiters access those candidates' resumes and share job seekers with each other.
In today's job market, 75 percent of people who are online have used the Internet to find a job, and 60 percent say they're going to do it again on their next search. Even with these tools, the human interaction is still what sells the candidate on the job, says Singh.
"People aren't pieces of steel," he says. "We don't have bar codes on our heads. People have families, they have choices to make, and they're not necessarily going to take job just because of the money. The process has kind of come full circle."
How to reach: EmployOn, (216) 502-5500 or www.employon.com; Management Recruiters International, (216) or www.BrilliantPeople.com.
Liss has heard all the arguments about office furniture, all the debate over rent, lease or buy. One thing he's learned is that one method isn't necessarily better than another; it all depends on your business.
"If you have the capital and you have the cash, you should go out and buy," Liss says. "But not everyone can afford to do that."
Here's how he breaks down the advantages and disadvantages of renting, leasing and buying office furniture. Keep in mind that these tips apply to office equipment and business vehicles as well.
Renting office furniture has its advantages. There's little capital outlay, you don't have to maintain it and you can give it back at the end of the month. Renting is good for start-up companies that don't have a lot of cash to spend on furniture, or for those with temporary furniture needs, Liss says.
Renting allows you to upgrade to a higher quality than you would be able to afford if you bought. Rental and lease agreements can cost from $100 to $300 per person outfitted, more per month than buying, but there's little or no money up front.
Leasing, like renting, doesn't require a big capital investment, but you will be tied into a lease agreement for anywhere from 36 to 60 months. However, unlike with renting, you can often purchase the furniture at a reduced price at the end of the agreement.
Companies will sell the furniture for 5 percent to 10 percent of its value at the end of the lease. Leasing can also be deducted from your taxes as an operating expense, but it's not as much of a deduction as a purchase.
Also, when you lease or rent, the company will install the furniture for you. That's not always the case when you buy.
The big advantage to buying your office furniture is that you can claim it as an asset, which helps when creditors look over your financials. However, buying is expensive, and your company needs a decent credit history if you want to take out a loan to buy the furniture. You have to decide if it's the right time to make the investment.
"Furniture doesn't depreciate that much when you buy it," Liss says. "Your car still has a value when you pay it off, so does furniture. Then it comes down to what someone is willing to pay." How to reach: Budget Office Furniture Superstore, (216) 566-1540
Morgan Lewis Jr. (email@example.com) is senior reporter at SBN Magazine.
The marketing communications and project management firm only started its philanthropic activities in June 2000, but has raised more than $22,000 among its 60 employees at its headquarters and 30 other employees around the Midwest.
But cutting a check is not the only way the company pays back, says Don Schenkenberger, president of Shamrock Companies Inc. Of the 25 organizations supported by the company over the last year, 15 contributions involved employee volunteer hours and activities.
"Our employees want to pay back, and that's one of the values that we established here at Shamrock," Schenkenberger says. "Paying back, which means getting involved in our community and actively helping to improve the life of people in our community and making a difference."
Shamrock's efforts, which earned the company a 2001 Pillar Award for Community Service, support well-known national organizations including the United Way and Junior Achievement, but also smaller, local groups. Shamrock employees donated marketing designs and materials to Celebrate Westlake and Our Lady of the Wayside, a nonprofit group which operates homes for physically and mentally challenged adults and children.
For Our Lady of the Wayside, based in Avon, Shamrock employees held a cake and pie auction for its employees, customers, vendors, friends and family. At the one-day event, employees built an auction block in the fulfillment center at Shamrock's offices and auctioned 63 cakes and pies, raising $4,325. It was just one of several food-oriented fund-raisers Shamrock employees have championed over the past 12 months.
For the United Way, Shamrock's community outreach group, called the Involvement Committee, compiled a cookbook of recipes submitted by employees and their spouses. The idea was a natural fit for Shamrock, says Dale Masino, Shamrock's human resources vice president and Involvement Committee organizer.
"We were able to put together the book very economically using our own equipment," he says. "We turned out a significant hardbound cookbook that we sold to employees and our sales consultants gave to clients."
The cookbook raised $2,000 for United Way, and a bake sale raised another $285.
"I told our United Way rep, 'Our folks sure like to eat,'" Masino says with a chuckle. "Wherever there's food, people will spend some money."
Schenkenberger was pleasantly surprised by the overwhelming employee response to the charitable activities. Since it was the Involvement Committee's first year, there were no expectations and no rigid guidelines for how the group would operate. Masino simply sent out a memo to employees describing the committee he wanted to form and hoped for the best. The employees took over from there.
"It's been tremendous," Schenkenberger says. "We feel very fortunate to be a part of the Greater Cleveland community. It's a value we all personally believe in, and it's become a value of our corporation.
"Our employees have really stepped up." How to reach: The Shamrock Companies Inc., (440) 899-9510
Morgan Lewis Jr. (firstname.lastname@example.org) is senior reporter at SBN Magazine.
You can't miss the first one --- a thin, eight-inch long white scar that runs down his left forearm. If you look closely, you can also see the small indentation, right in the center. It's a divot in the skin, courtesy of a two-ton Cadillac Fleetwood that pinned and nearly killed Weaver on a blustery summer evening in 1978.
Weaver owned a body shop and towing company back then, a small, six-man operation just outside of Canton. He received a call from the State Highway Patrol, an organization he frequently towed for, asking him to pick up an abandoned Cadillac left on Whipple Avenue in Canton.
The car had a flat tire and was locked. The owner was nowhere to be found. It was a typical pain-in-the-you-know-what job for any tow truck operator, especially at night. Worse, the car was in gear. So after hoisting the front end up with his truck, Weaver climbed underneath to disconnect the gear linkage.
Perhaps because it was late and he was tired, Weaver neglected to put a safety block behind the wheel before he started working. Without warning, the 5,200-pound Caddy slid off the truck, broke loose from the chains and landed on Weaver. Whether it was luck or divine intervention, Weaver's arm was between his chest and the car when it landed, providing a cushion that meant the difference between life and most certainly more serious injury or death.
Weaver cheated the Grim Reaper twice that night. Arm or no arm, he couldn't breathe with the car on him. The lone state trooper, ''a little guy,'' Weaver says, wasn't able to lift the car off its suffocating victim.
As Weaver blacked out, two Jackson Township police officers pulled up and managed to lift the car enough so the third man could slide Weaver out. The trooper said Weaver's face had turned purple by then.
''You know that life after death experience thing?'' Weaver says, holding up his hand as if taking an oath. ''Been there. Done that. Been out in the sunny field. I was there.''
Weaver spent a week in the hospital, but his only real injury was a broken arm.
It was the first and only time he neared physical death, but he has been to the brink and back with his business ventures over the last 23 years. He has earned his stripes there, too. From running a body shop to a software design firm, Weaver has weathered industry transitions, betrayals by business partners, near bankruptcy, a consolidation threat and IRS problems, only to emerge each time a bit more confident in his future.
Weaver's company, North Royalton-based Tracker Management Systems Inc., sells office and communications software for towing companies. He just inked a partnership deal with ZIM Technologies Inc., of Ottawa, Ontario, Canada, that provides capital and software development assistance.
ZIM's chief executive, Michael Cowpland, was the founder of Corel and co-founder of Mitec. Cowpland's claim to fame was going head-to-head with Microsoft in the late 1990s with Corel's WordPerfect software program. That earned him a reputation as a Microsoft basher and provided his nickname, ''The Bill Gates of Canada.''
For Weaver, the deal means something else. It underscores the realization of his years of perseverance and belief in his abilities. Simply put, like Weaver himself, good ideas are hard to kill.
Weaver's agreement with Cowpland includes an undisclosed financial investment. It allows Tracker to further develop its wireless towing and roadside assistance software and propel the two companies to the forefront of the emerging telematics technology.
Telematics allows a driver to push a button on the dashboard, a cell phone or a pager to signal for roadside help. General Motors unveiled the service in America in 1996 with its OnStar system for its Cadillac Northstar. Now, Tracker is positioned to help towing operators catch up with GM.
As a sign of validation, Weaver's 15-year-old company has been named a preferred supplier for towing communications and operation management systems by the American Automobile Association. The auto and travel services giant will help market Tracker to its more than 13,000 affiliated tow truck operators out of the 36,000 towing companies across North America.
Weaver doesn't write most of the code to his software; his wife, Terri, does. What Weaver does is sell. It's what he does best.
Like most salesmen, he loves to talk. But what you notice about Weaver is the way he talks. It's not a pitch. He doesn't use marketing jargon. It's never calculated or condescending, but it is fast. His brain seems to be moving a step ahead of his mouth, often forcing him to stop mid-sentence and ask, ''Can I back up for a second?''
His folksy style is part of the reason he's been such a successful salesman over the years. It's certainly what attracted his first business partner, a former professor from a large state university. But it was likely Weaver's lack of business sophistication that attracted the professor more -- like a hungry lion is attracted to a gazelle.
''He got the mine, I got the shaft,'' quips Weaver, quoting a favorite line of his. ''We split six months later; it had nothing to do with me.''
After three years as a U.S. Army air traffic controller during the Vietnam War, Weaver returned to Canton and borrowed $500 from his mother to open an auto body shop and towing business. It did well, a couple hundred thousand dollars a year, but the profits disappeared on the books.
Work was never billed and overhead costs got out of hand. Weaver discovered for the first time that he was good at sales but bad at management. He knew he needed help.
He began taking business courses at a nearby state university and started a conversation with his professor one day after class. The professor seemed unusually interested in Weaver's problem; he also needed $600 in repairs to his car, which Weaver took care of for some business advice.
The first thing the professor discovered was that Weaver didn't have a lease on the building. He took care of that. He then organized Weaver's bookkeeping and other paperwork procedures and put a process in place where there was none.
The nave 27-year-old Weaver, perhaps a little intimidated by his adviser's business savvy, was afraid for his business and wanted to keep the professor involved. He asked him to become a partner. The professor agreed, but demanded 51 percent of the business for his $4,000 investment.
''I thought I'd rather have 49 percent of something very successful than 100 percent of something that's losing money,'' Weaver admits, though he regrets ceding over control of a business he spent three years building.
After winning over Weaver's employees, some of whom were understandably resentful at being passed over for partner, the professor told Weaver he wanted to buy him out. Weaver refused.
''Too bad,'' the professor told him. ''The lease is in my name. If you don't want to sell, then move.''
Backed into a corner, Weaver agreed to sell the business for $2,000 and $12,000 in back taxes. Again, the consequence of his poor financial management reared its ugly head.
The professor went out of business in a year and left town. Shortly after, the IRS called Weaver and demanded its $12,000 in taxes -- the professor never paid that bill.
It was strangely fitting that Weaver would take a job managing a body shop at a Cadillac dealership after one nearly crushed him to death.
''That's funny, I never thought about that,'' Weaver laughs, and without missing a beat, adds, ''I guess I could've claimed intimate knowledge.''
Weaver's life took yet another direction in 1979 after he read a Wall Street Journal article about the potential growth of the personal computer industry.
''I wanted to get involved with (computers) because it was technology and it was a tool,'' Weaver says. ''I was left with no other talent than to pump gas or something, but I figure if I get a head start on you, even though you're smarter, I can keep up if I get a good enough head start.''
Weaver took night classes in computer programming. He also set out on a campaign interviewing business owners, both successful and unsuccessful. He estimates he talked to at least 150 over the span of a year and half. Having been burned badly, he wasn't about to jump back into business without learning a little more about how to not let it happen again.
In the beginning, he stuck with what he knew. He and his wife created a program for body shop estimates. Weaver showed it to body shop owners, they critiqued it, and at night, he and Terri changed it. He used the program at his Cadillac dealership and for his claims as an insurance adjuster. Many owners were begrudgingly pleased to learn that computers did make running a business easier.
But before he could build his insurance empire, Weaver discovered a firm in Boulder, Colo., which had a nearly identical program. He called the company and found it was just a couple of University of Colorado students operating out of their bedroom. He asked what it took to sell their system.
''Go sell one,'' they told him.
For six months, Weaver traveled around Cleveland trying to sell the software system. The first year, he sold three. Two years later, he helped 60 body shop owners computerize their businesses.
Despite footing the bill himself for all of his expenses and marketing of the software, once again, Weaver was betrayed. The students, who had designed the system more as a hobby than a business, started allowing other sales reps to move into Weaver's territory, which included all of Ohio and some surrounding areas. Body shop owners played Weaver against the other two reps, driving the price down until his profit margin was close to zero.
Fed up, he quit. It was 1985, Weaver was 34 years old, and he was once again starting over.
Terri Weaver calls herself a pragmatist, which nicely balances her husband's unbridled optimism.
Their conversation styles are a study in opposites, too. Jim speaks in torrents of sentences, one idea popping up in front of another before any are finished. Terri ponders her words before they leave her mouth. Each thought is completely delivered. Their differences make them a perfect business couple.
''Jim gets very bubbly and excited at times,'' Terri says. ''I'm always telling him, 'Well, let's see how it goes.'''
Terri responded with her typical cool-headedness when Jim told her he was leaving the body shop software company to create his own office management software system. This time, the software would be for tow truck operators, and it would be the last time Weaver would switch careers.
He marketed hard. He went to every trade show, about 12 each year. In his first year, he made only one sale. Everyone was interested in computerization, but it was far down the priority list for most tow truck operators.
But at each trade show, Weaver and his wife helped develop the product by interviewing more than 100 tow shop owners, finding out what they liked about the software, what they didn't like and what was missing. They gave three systems away for owners to evaluate.
The next year, Weaver sold 12.
By 1988, he opened a corporate office in a glass towered building on Chagrin Boulevard in Beachwood. Including his wife, he had six employees. Sales skyrocketed, but they came with financial problems. Checks often bounced. Taxes weren't paid. Employees were overpaid, but Weaver was afraid to lose them.
Finally, on a warm spring day, his accountant stopped by his office to deliver the news that Tracker was broke. Weaver's first thought was, ''How could I be broke? I still have all these blank checks.''
He owed $60,000 in back taxes. His accountant told him he was in danger of slipping into bankruptcy without serious cutbacks, including the fancy office. The software he created to help tow truck operators get their businesses organized nearly cost him his business because he wasn't watching his own books. The irony isn't lost on Weaver.
''The key to success in business is the office,'' he says. ''All money is made or lost up there. It has nothing to do with science and it has nothing to do with hard work. It has to do with diligent detail. That's what I did wrong.''
Weaver closed the office, laid off his employees and moved the business into the basement of his family's Garfield Heights home. More important, Terri assumed control of the checkbook, and Jim never wrote a check without consulting her. Within six months, the taxes and all the bills were paid, and they never bounced a check again.
''I never thought we would go out of business,'' Terri says. ''I've always had a lot of faith in Jim and a lot of faith in Tracker. I always thought we would be successful and we'd get through whatever we needed to get through and do whatever we needed to do to make it happen.''
The Weavers worked out of their home for a year. They built up a war chest of about $20,000 and moved into an office condo in Oakwood Village.
In a year, they had nine employees and $900,000 in sales. Then the bottom fell out again. This time, it wasn't because of mismanagement. The market fell apart. No one was buying. Sales slid by $600,000, and the Weavers moved back home again.
''We did the necessary things to stay profitable this time,'' Weaver says. ''We didn't just continue to bleed. We did a controlled shrink back down and came home.''
Over the next eight years, sales climbed, but it was controlled growth. By 1998, there were 14 employees working out of the Weavers' basement office, forcing them to move to the company's current home in North Royalton.
For once, Tracker was stable -- and Jim Weaver hated it. The status quo was killing him. He would go to the office, do nothing all day and leave. If he worked for anybody else, he would've been fired or quit. Depression started to set in.
''Entrepreneurs love building and creating,'' he says. ''They hate maintaining. That's the most boring thing in the world. There's no thrill, no excitement. It just is. I truly wanted the business to fail so I could start over.''
And, although it was his company, Weaver didn't feel a part of it. He didn't feel like he was in control. His top sales rep was following his own lead, making strategic business decisions without consulting Weaver and barked orders at fellow employees. The problem was, Weaver was afraid to lose him, just like the professor before him.
''When you surround yourself with intellect, some of them are very difficult personalities because they're proud, arrogant and knowledgeable,'' Weaver says. ''All of a sudden you feel like you can't live without them because they're doing things you can't do. That's why you hired them.
''So how in the world do you run your business if you've got this guy who's very knowledgeable and very good at what he does, and you can't do it? You start putting up with him.''
With his depression lingering, Weaver considered selling his business to a national software consolidator. The company had $1 million in investor backing and offered to pay Weaver and his wife $100,000 each per year to stay on and run Tracker. The couple was only paying themselves about $40,000 a year at the time.
Selling the company excited Weaver. He liked the idea of helping build something much larger than Tracker. Customers and friends were telling him to sell.
''Either sell or you'll get rolled-up,'' they told him.
But Weaver didn't sell. After several meetings, he lost faith in the consolidating company. The owners lacked vision. They seemed to be in it for a quick buck.
''I could just sense it wasn't going to fly,'' Weaver says. ''I didn't want to lose everything I had built up.''
Weaver backed out just in time, in 1999. The Y2K craze hit, and everyone, including tow shop owners, was affected. There was a huge demand for Tracker's Y2K-compliant software, which at that time had just switched from MS-DOS-based to Microsoft Windows-based. It was the greatest sales year of Weaver's career.
The consolidator that nearly purchased Tracker was floundering. It overspent on acquisitions and was having problems upgrading its software.
Turn the calendar to Jan. 1, 2000. Like every other company tied up in Y2K consulting or upgrades, Tracker took a hit. Weaver had to lay off four employees in one day, but he was still afraid to fire the sales rep who caused him so much grief.
The depression returned. He didn't think it could get any worse. Then, it did.
His older brother, Bud, died of cancer at 65. The youngest of eight children, Weaver grew up with his nephew, Larry, who was only two years younger than Weaver. In April, Larry walked into his boss's office and said he was having chest pains and needed a doctor.
Moments later, he passed out. He died that day of a ruptured aorta. One month later, on Mother's Day, Weaver's mother died in her sleep.
''In one year, I lost three people,'' says Weaver. ''That will change your philosophy of what's important.''
After he returned from his mother's funeral, Weaver called his employees one by one into his office and told them the company was changing. He explained where the business was going, how they should treat customers, how decisions would be made and how he was going to grow the company.
The problem sales rep agreed to the new rules, but was soon fired for returning to his old ways.
Born in Sussex, England, Michael Cowpland made his name in the late 1980s and early '90s as the CEO of a Canadian company, Corel Corp.
Sales of its hugely successful CorelDraw graphics software prompted Cowpland in 1996 to tackle the word processing market by purchasing WordPerfect to go head to head against Microsoft's Word program. The gamble didn't pay off, although most analysts agree WordPerfect is as good or better, not to mention cheaper, than Microsoft Word.
After a failed acquisition of California software developer Inprise/Borland and a steadily declining stock price, Cowpland stayed on at Corel long enough to stabilize the company before resigning in August 2000.
Less than one month later, he joined the technology advisory board for ZIM Technology, a small software developer in Ottawa, Ontario. In February 2001, he bought a majority stake in the company and assumed the reins as president and CEO.
Part of Cowpland's attraction to ZIM was that its software could be used to develop applications for wireless devices like cell phones and pagers. With the growth rate of wireless at 600 percent a year, and an expected 1 billion devices on the market by 2005, Cowpland sought to position ZIM to benefit from the growth.
That same month, he got a call from ZIM founder and former CEO Blake Batson, who told him about a Cleveland-based software company that used ZIM's software to create a program that helps tow truck companies manage their businesses.
A five-minute phone call between Cowpland and Weaver led to a four-hour conference call with Cowpland's development team. In March, the men announced the agreement between the two companies to develop a ZIM application that will allow truck drivers to receive text dispatches on their cell phones.
''It will provide a fully integrated solution,'' Cowpland says from his Ottawa offices. ''If you look at the motor clubs, they're all getting their information from their call centers and it's keyed in digitally. But until now, it hasn't gone to towers digitally. AAA has gone part of that way, but now we're trying to take it all the way right to handsets in the towers' hands.''
The agreement between ZIM and Tracker includes undisclosed financial backing and a revenue-sharing arrangement. Weaver predicts the partnership will help grow his company by 1,000 percent over the next few years. After hours talking over the phone, the men finally met in person at the International Tow Show in Florida in April.
''(We) spent some great quality time with him and his team, and they're really a great bunch,'' Cowpland says in a British accent a little diluted from too much time spent in North America. ''It was nice to find out that Tracker already had the market lead in their industry.''
The deal couldn't have come at a better time for the companies. Nearly every automaker has or is working on some form of telematics system for its vehicles. OnStar is in most GM cars now, as well as in some Acura and Volvo vehicles. Ford Motor Co. officials have announced the company will have a similar feature in 3 million of its vehicles by 2003. Soon, millions of drivers will be able push buttons on their dashboards for help.
''When that's all said and done, the call has to go out to a service vehicle,'' Weaver says. ''Nobody's working on the service vehicle end except for us.''
Cowpland's involvement notwithstanding, Weaver's greatest coup to date was his deal with AAA. AAA, North America's largest motor club, wanted Tracker to be its preferred supplier for towing communications and operations management.
AAA's 13,000 tower affiliates won't be required to use Tracker, but it will be the system its field representatives recommend. The agreement, in effect, expands Tracker's marketing force by several hundred employees, without Weaver having to put one more person on his payroll.
''Success begets success,'' Weaver says. ''As soon as we got their endorsement, the phones started ringing.''
Now, with strategic partnerships in place, Weaver is poised to take Tracker farther than ever without the danger of getting sidetracked by poor management or market downturns. In control of his employees, his finances and his market, Weaver says he's poised to expand Tracker's market out of logistics and management solely for tow truck operators. Fleet-based service, EMS, local courier and message delivery and taxi services are new targets.
From borrowing $500 from his mother to start his first body shop to his top-level dealings with multibillion dollar companies, Weaver's learned as much about himself as he has about business. He's had help from his wife and key employees, but it wasn't until he stood firm in his own vision for the company that he began to benefit from his persistence.
''I'll be 50 in two months, and I'm just pulling it all together,'' Weaver says on a balmy morning in early August. ''All of a sudden, I just have total faith and belief in my ability to manage, to take (the business) and grow it.
''It's there for the taking.''
How to reach: Tracker Management Systems Inc., (440) 843-9273
A close look at this year's finalists and winners of Ernst & Young's Entrepreneur Of The Year Award reveals the change occurring in Northeast Ohio.
Steel companies are on the verge of collapse. Domestic car sales continue to slump. The big industries that drove the economy here are facing tough times again, but this time it doesn't look like there will be a turnaround. The writing is on the wall, and today's entrepreneurs have forged a new direction.
Today's thriving entrepreneurs don't exist simply to serve the steel or auto industries. They make state-of-the-art medical devices, create innovative business software, care for our region's elderly, manage trucking logistics and produce cutting edge chemicals. In short, these companies are diverse and dynamic.
On the flip side, you'll see none of the dot-bombs which have come and gone on the coasts in the past 12 months, but left our part of the country unscorched. Instead, these entrepreneurs built their companies on a foundation of sturdy business practices. They faced risk and battled competition to stay afloat in the lean start-up days.
"The common thread that you have is that the entrepreneur took some risks," says C. Lee Thomas, partner-in-charge of entrepreneurial services for Northeast Ohio for Ernst & Young LLP. "These entrepreneurs were clearly leaders and able to capitalize on the strength of their management team and their employees. That's something that you see throughout."
From established powerhouse IMG Inc. to future industry leader Hyland Software Inc., this year's crop of 15 finalists and nine winners deserve the kind of recognition not often granted to the entrepreneur, says Thomas.
"We see a lot of information out there about the public companies because they have public shareholders," Thomas says. "What you don't hear about is a lot of the success stories that the entrepreneurs have. How do they get the recognition? It's not going to be through earnings releases. You're not going to see very many press releases.
"But here is a real opportunity to take what they've done, meet with independent judges who are rock-solid business people and educators, get in the contest and get recognized as being the best."
Entrepreneur Of The Year Award judges looked not only at the financial growth of a company, but at the entrepreneur as a person and a business leader. They considered the nominees' ability to adapt to challenges, the passion for their endeavors, their visions and their courage to face risks, yet continue to dream.
"It's not just being an entrepreneur that maybe raised $5 (million) or $10 million, but they competed and they were judged the best," Thomas says. "That's pretty significant. There's some real recognition behind this. I think that real recognition is what's different, and that helps others get excited in the area about taking an idea as an entrepreneur and making it a business." How to reach: Ernst & Young LLP, (216) 861-5000
Morgan Lewis Jr. is a reporter for SBN Magazine.