Morgan Lewis Jr.

Thursday, 28 June 2001 20:00

The new guard

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.

Thursday, 28 June 2001 20:00

Blind site

Imagine your computer mouse disappears. Then imagine you want to surf the Web and you have to manually click through every HTML link before you can get to the one you want.

Would you want to use the Web anymore? Probably not.

But this scenario is a daily reality for blind computer users. Not only do they have to keystroke their way across the Web, they also must listen to a computerized voice read every link the cursor touches.

If that sounds like a hassle, it is. But many blind people prefer shopping online instead of facing the alternative.

''As hard as it to get around on the Internet for the blind, it's three times harder for them to get to a store, go through a store and pick out items that they can't see,'' says Holly Robinson, senior strategist at Complete Media Group in Independence. ''E-commerce is really a boon to them.''

All it takes is some simple changes in the coding of your company's Web site to make it readable to the screen readers -- JAWS -- used by the blind. If it's coded correctly, blind users will hear the page read. But if it's not, what they hear is the actual HTML code being read, which is quite irritating.

''It's a really simple matter of coding,'' Robinson says. ''The major reasons people haven't embraced this is that they think it will be very, very difficult, and they think it will be ugly. They think they can't have pictures or they can't use the graphic elements. That is just not true.''

Complete Media Group is an Internet consulting firm which has designed blind accessible Web sites for companies including the Aftermarket Group and the City Club of Cleveland. Robinson offers some compelling reasons why and how your company can and should make your site accessible for everybody.

Untapped market
Close to 50 million people in the United States have some sort of disability. And as the working population ages and starts to retire, many are facing the possibility of reduced vision and other eyesight problems.

''Some companies which deal directly with the disabled community think the people using the site are friends and family members who help these people,'' Robinson says. ''What they don't realize is that it's very likely that they have customers who just can't reach them online because of it not being accessible.''

Stay out of court
It's not a big concern today, but it may not be long before business owners face litigation if their company's Web sites aren't accessible to the blind. State and federal governments are already required to have completely accessible Web sites, as are vendors who supply information to employees of state or federal agencies.

Recently, the National Federation for the Blind sued America Online. The suit claimed the world's largest online service was completely inaccessible to the blind. Eventually, AOL settled out of court.

The company also met with the NFB and developed Web site standards that are starting to be used by other companies.

''It's sort of like a retail store,'' Robinson says. ''They have handicapped entrances, they have the ramps, they have handicapped restrooms and many stores have Braille on their signage. Yet its Web site is 100 percent inaccessible.

''It only takes enough people to complain to the federal agencies before you could face litigation.''

Wireless ready
When your company's Web site is accessible for the JAWS screen reader, it's also readable through portable Internet devices including Palm Pilots or cell phones.

''Coding your site now allows you to be one step ahead of the game when it comes time for your site to be accessible to portable devices,'' Robinson says. ''Both of them have rich benefits from a business perspective.''

How to reach: Complete Media Group, (216) 901-1212

Complete Media Group webiste

Thursday, 28 June 2001 20:00

Network power

Strolling near his home in Pompano Beach, Fla., Bob Roth saw an elderly man about his age collapse while riding a bicycle near the beach.

The man was unconscious. Roth called for an ambulance, but could find no information about the man to give to the paramedics once they arrived.

It's strange where and when the entrepreneurial spark hits. It hit Roth when he witnessed that incident.

For years, he carried in his pocket a handwritten, laminated card listing his medical conditions in case he was ever involved in an accident like the one he witnessed. If this man had a prior medical condition, Roth thought, no one would know until he reached a hospital. Precious minutes would be wasted.

Roth called his daughter, Diane Helbig, Cleveland, a marketing representative for Applied Laser Technologies in Cleveland.

''He said, 'I have this idea,''' Helbig recalls. '''I said, that's great, let's do it.' Then we found a company in Florida that would make the cards for us.''

Helbig and her father formed MyMedi-Card Inc. shortly after the incident on the beach. Aside from the basic name, address, phone and blood type information, the card lists medications, allergies and current medical conditions, and whether the cardholder has a living will or is an organ donor. It also contains detailed insurance and pharmacy information.

''This is the 21st century's answer to the Medic Alert bracelet,'' Helbig says. ''It's much more comprehensive.''

Working the network
The main challenge facing MyMedi-Card was spreading the word and getting people and organizations interested. The task was even greater due to the company's very limited marketing budget.

That's when Helbig started flipping through her Rolodex and picked up the phone. She called sales and marketing contacts she'd made over the years. She rung friends and family who could recommend the card at their companies, PTA meetings, senior centers and charitable organizations where they were involved.

Helbig sent out e-mails about the card to friends and colleagues. People in her professional network told others in their networks, and pockets of interest started to form all over the country.

''Fortunately, we knew a lot of people,'' Helbig says. ''I e-mailed them and explained what we were doing, then asked them to visit the site and give me feedback if they thought it was a good idea. There are a lot of people who have a lot of contacts and, as a matter of fact, we didn't even ask them to sell it. They came to me and said 'I'd really like to sell this thing.'''

Such is the power of networking.

How to reach: MyMedi-Card Inc., (866) 696-3341

MyMedi-Card website

Thursday, 28 June 2001 20:00

Outbreak

People who say it's a dry heat in Arizona have never been to Phoenix after the monsoon season. That's right, there is a monsoon season in Phoenix.

Cleveland native Richard C. Adamany learned that the hard way when he exited the Sky Harbor International Airport just after the torrential rains ended in late August 1999. The balmy, 108-degree air and merciless sun made the city's barren landscape wave before his eyes. A concrete deck hanging over the airport doors trapped the heat, the moisture and the diesel fumes of the cars and buses taking busy travelers to rental car lots.

''We walked out and I thought to myself, 'This isn't going to work,''' Adamany says with a laugh. ''It was unbearable. Unbearable.''

Adamany and his business partner, Bennett S. Rubin, were in Phoenix to do a due diligence investigation. A company based there, Empyrean Bioscience, looked to be a diamond buried beneath the dry, cracked soil of the Southwest.

''We were looking for an opportunity to build some equity, build a company and use the talents and the abilities that we've both developed over a number of years,'' Adamany says. ''I found nothing that was as close to compelling as what I found with this product and its technology.''

Empyrean Bioscience is a company with auspicious beginnings. Several years before Adamany's arrival in 1999, Dr. David Thornburgh developed a consumer germ-killing solution called GEDA for his company, International Bioscience Corp., based in West Palm Beach, Fla. The unique formula didn't include alcohol or Triclosan, an overused antibiotic common in hand soaps and lotions. The solution was marketed, sold and distributed through Empyrean Bioscience as a hand sanitizer under the brand name Preventx, but had only limited success.

It wasn't the lackluster sales of the germ-killing hand lotion that sparked the men's interest. Instead, it was a variation of the GEDA formula, which was in the clinical testing stages for use as a contraceptive gel that could not only prevent pregnancy, but also kill gonorrhea, chlamydia, herpes, hepatitis B, syphilis and even HIV, the virus that causes AIDS. The product, says Adamany, is poised to be a first of its kind.

''We believe it is an absolute homerun product,'' he says. ''I don't know of any product on the market that comes close to that.''

Adamany and Rubin were impressed with the GEDA formula and its market potential, but thought the company needed better direction to compete in the growing household germ fighting industry. Moreover, the men couldn't bide their time and wait for clinical and then FDA approval on the contraceptive gel while the company's other product line floundered.

Empyrean needed an aggressive marketing effort to sell other GEDA-based products before the contraceptive gel was deemed safe for use. That meant it needed to stand out in the aisles from its competitors.

''It's difficult to go to market as a one-product company,'' Rubin admits. ''Buyers (for retail chains) aren't interested in just one product. Secondly, from a retail consumer prospective, one product on a shelf really doesn't have a lot of impact. It kind of disappears on the shelf.

''The more products you have on the shelf with consistent packaging, you can grab the attention of the consumer more quickly, then be able to create a family approach and communicate the features and benefits.''

Sowing the seeds of change

First, a new headquarters was in order. Adamany is a Cleveland native who has held top executive positions at Solon-based Advanced Lighting Technologies Inc. and at Mr. Coffee, formerly in Bedford Heights. Rubin relocated to Cleveland from New York 15 years ago to join GE Lighting in Nela Park and later worked with Adamany at Advanced Lighting.

Once the two men joined Empyrean, they commuted to Phoenix for four months. It didn't take long for them to realize that the area was not going to house Empyrean's headquarters, and it wasn't just because of the weather.

''We needed that intangible Midwestern work ethic,'' explains Adamany. ''We have a wonderful team here of people that are all hard working. We're not sure we could find the same out in the Southwestern climes of Phoenix.''

Adamany still laughs about the time he was in the former Phoenix office and an employee rushed in with a look of horror on his face.

''We're gonna have a thunderstorm, I've got to go,'' the frazzled employee said.

The incredulous Adamany and Rubin just shrugged and let the skittish young man leave.

''We couldn't believe it,'' Adamany says. ''In Cleveland, we have thunderstorms all the time. It was one of those things where I didn't even want to hear why (he had to leave). We just didn't find the type of employee that could match the work ethic that we found here.''

''It's a laid-back, California-type work ethic,'' Rubin says. ''They're good people, it's just a different culture.''

Skeptical of the work force and weary of the 1,750-mile commute, last year, in less than three weeks, the men packed up and moved Empyrean to its Beachwood headquarters.

''We weren't planning on doing something this quickly,'' Adamany says. ''We got a lease, we signed a lease, we arranged for the move, we sold off a lot of excess inventory, we threw out a lot of stuff, we helped some other people get resettled and then we moved in. You have to be nimble when you're starting out.''

An agile business model

That nimbleness allowed the duo to quickly set up shop in Cleveland and begin to expand and improve Empyrean's product line based on the GEDA germ-killing formula. The lone hand sanitizer lotion had a bland, institutional label. Rubin revamped the look and launched a diverse antibacterial towelette line under the Preventx name.

Rubin also hooked up with Coleman sporting goods and licensed its name for a line of germ-fighting outdoor products that include a lotion, wipes and spray cleaner. The spray cleaner is the only item not based on the GEDA solution.

All of these strategic moves put Empyrean, under the Preventx and Coleman names, on the shelves of drug store chains including Rite-Aid, Eckerd and Walgreens, as well as big box retailers Wal-Mart, Target and Kmart.

But the products alone didn't persuade the overwhelmed inventory buyers for the big chains. After all, nobody had really heard of Empyrean. So Rubin and his sales staff put together targeted, flexible sales pitches and used shelf display ideas and enticements to make the buyer take notice of the fledgling Cleveland business.

''You're dealing with big companies,'' Rubin says. ''They have large egos and a lot of experience in their environment and stores. You don't necessarily want to go in and say, 'This is the program we had for Sears and this is going to work for you.' You have to say, 'Here is our general product line, this is how we understand your business and this is the program we think would work for you.' But then work with them and adapt quickly, get back to them with a program.''

In January, the two launched a national radio and print consumer advertising campaign to spread brand awareness of Preventx. The company was featured on nationally syndicated radio programs ''Delilah,'' which is heard by an estimated 5.8 million listeners in 250 markets, and ''Lia,'' which has 1 million listeners in more than 100 markets.

Future advertising is planned for national magazines and cable television stations.

Putting a charge into sales efforts

When the company reincorporated under the helm of Adamany and Rubin in March, its earnings outlook was bleak. It chalked up huge sales increases of more than 418 percent during 2000, but suffered losses due to heavy operating costs and a one-time litigation expense against International Bioscience Corp. over the royalties paid by Empyrean to market and sell the GEDA formula. This year is not expected to be profitable despite a sales increase of 260 percent over the previous quarter.

''It's really too early to make predictions for 2002, and I wouldn't make them anyway,'' Adamany says. ''If you look at 2000, it was really a transition year. That's when we first got there, and we focused on putting together retail programs and things like that. What we're really focusing on is this year.''

Luckily, the market for household germ killers shows no signs of fading. Thanks to news of Legionnaire's disease in a Cleveland Ford Motor Co. plant, hoof and mouth disease sweeping across Europe and sporadic, sometimes deadly, cases of E. coli popping up in fast food restaurants, it's hard to forget about germs and bacteria. And with international air travel becoming faster and cheaper, the threat of new bugs looms heavy.

''No longer are you isolated from the other things that are happening in this world,'' Adamany says. ''People want to protect themselves from that.''

Adds Rubin, ''It's a growth category for consumers. Retailers see that. They're not looking for one product, they're looking for product lines that help address those consumer needs and that will help them sell more products.''

How to reach: Empyrean Bioscience, (216) 360-7900

Empyrean Bioscience website

Thursday, 26 July 2001 20:00

Take coverage

About two years ago, a small article about an obscure U.S. Supreme Court ruling on workplace discrimination ran in the Washington Post.

The article may have been small, but that ruling greatly increased the power employees have to sue their employers and has changed the face of workplace lawsuits across the country.

Carole Kolstad sued her former employer, the American Dental Association, claiming she was sexually discriminated against when a male employee with less experience was promoted ahead of her. Kolstad was awarded $52,718 in back pay, but was not allowed to seek punitive damages in trial court. Punitive damages, as we've seen, can reach into the millions of dollars and signal a death knell for a small- or mid-sized company.

Kolstad appealed the decision and the case found its way to nation's highest court. The justices ruled that employees could seek punitive damages if they could prove they were intentionally discriminated against on the basis of sex or race.

But there's a loophole. If a company can show it made a good faith effort to protect against bias on the job, the burden falls directly on the employee's supervisor and away from the company.

The number of employment discrimination lawsuits in federal court has increased by 2,000 percent in the last 20 years. Even if a case is without grounds, defense costs can exceed $100,000 for a typical discrimination lawsuit.

Just over half of the employers who responded to the Workplace Practices Survey from the Employers Resource Council and SBN Magazine say they keep Employers Practice Liability Insurance, an increase in the number who last year said they had it. Only 20 percent of employers this year reported an employee has sued them in the last two years, well below the national average.

William Edwards, a member of the employment and labor group at Ulmer & Berne LLP, says that in light of the Kolstad case, an EPLI policy is vital, but not a replacement for good, common-sense management practices.

''If you're in the business long enough, you're going to get sued regarding some type of employment-related practice,'' he says. ''You need to carefully shop for and scrutinize the EPLI policy that is best for your company.''

In response to the mind-boggling increase in litigation, there's been an equally dramatic increase in the number of EPLI policies available. In 1992, there were three; today, there are more than 100. Edwards offers the following tips for picking an EPLI policy that's right for your company.

Your best defense

Much like with heath insurance, EPLI policy holders are not always entitled to use the law firm of their choice. In fact, your law firm may not necessarily be the one assigned the case if you're sued.

The EPLI policy carrier could even assign an insurance defense firm that doesn't have the expertise in employment law that you need.

Hammer time

An EPLI insurer will often have a provision in the policy that gives it the final say about whether a case should settle before a trial. If the employer disagrees and wants to keep fighting, it's usually on its own for defending against the claim.

That's called a hammer clause. Edwards says you can usually negotiate a modified hammer clause with which you only pay a percentage of damages and fees if you go against the insurer's recommendations.

How to reach: Ulmer & Berne LLP, (216) 621-8400

Morgan Lewis Jr. (mlewis@sbnnet.com) is senior reporter at SBN Magazine.

Ulmer & Berne website

Tuesday, 27 February 2001 19:00

Clean and sober

Each year, $100 billion is lost in terms of reduced productivity, increased safety risks, theft and accidents as a result of drug and alcohol abuse.

While drug tests might be the norm at some companies, 26 percent of manufacturing and 14 percent of nonmanufacturing companies in Northeast Ohio report drug testing would cause them to lose a substantial part of their work force.

Faced with a labor crunch, company owners are caught in the middle. They don't want an employee with a substance abuse problem at the very least, hurting productivity, or at worst, injuring themselves or another worker. But they still might want to retain a valuable employee despite his or her personal problems.

More often than not, an employer will work with an employee to help him or her get better, says Paul Taller, an employee assistance professional at the Center for Families & Children.

"Employees aren't easy to replace," Taller says. "It can take $10,000 to replace an employee by the time you go through the loss of productivity with the person being off, the time it takes to hire a person in, and the work it takes to bring the person in. It's much more cost effective if you have an employee that you can rehabilitate rather than getting rid of that person and trying to find somebody better."

The Center for Families & Children contracts with 75 companies in Northeast Ohio for rehabilitation and services for employees and their families. In most cases, the employee goes to the center seeking help. About 10 percent of the time, employers provide referrals directly.

Once employees enroll, the center's psychologists and counselors evaluate them to find the causes of the problem and what methods they can use to get them on the road to recovery. Counselors create an employee assistance program, which may include inpatient or outpatient phases, during which the employee meets with physicians and counselors to combat withdrawal symptoms and resolve personal problems that may be causing chemical dependency.

"I would say that there's a greater chance of a successful outcome with employee assistance programs," Taller says. "If the person tries to do it on their own, they tend to lose motivation because there's no encouragement to help them to get back on track. That's why employers do contract with the agency, because they are effective."

Develop a policy

Companies need to clearly state their substance abuse policy in the employee contract.

Review all previously written policies, agreements and laws related to workplace substance abuse issues, and review the company's insurance policy to determine the coverage offered for substance abuse treatment

Define the company's standards regarding the use, transfer or sale of illicit drugs or alcohol on company premises or company time. Include standards about the improper use of prescription medication, intoxication from drugs or alcohol while on company premises and the off-hours use of alcohol or drugs to the extent that it affects health and work performance.

Spell out the methods of detecting substance abuse and include enforcement procedures, specifying which offenses will lead to immediate dismissal, suspension, referral to treatment and so forth. Avoid liability by sticking to behavioral observations (see sidebar) and do not make accusations.

Call cabs or give rides to employees sent home for on-the-job intoxication; otherwise, the employer could be held liable for any accident caused by the intoxicated employee.

Test

Testing not only provides peace of mind for the employer, it also boosts the bottom line. Some private insurance companies offer significant discounts on premiums to company owners who test, thanks to the reduced threat of accidents, workplace violence and theft.

In the public sector, the Ohio State Bureau of Workers' Compensation reduces premiums to state-funded companies and organizations that drug test.

The benefits of testing are clear, so how do you get started? Most private companies call a private testing clinic, which coordinates collection, testing and reporting duties, leaving the employer only with the decision of what to do if a test comes back positive.

Concentra Medical Services, a 210-clinic nationwide drug testing chain, has four clinics in Northeast Ohio. The company sends urine, hair or saliva samples to be screened at a testing laboratory and receives results usually in about 24 hours.

While urine testing has been the method of choice since screening began, hair testing will be the wave of the future, says Dr. Steve Sanford, Concentra's Northeast Ohio area medical director.

"Hair testing detects drug use over a longer period of time," Sanford says. "You can detect drug use two, three, even four months back, depending on how long the hair is. Urine screening will detect only recent drug use, three to five days." How to reach: Center For Families and Children, (216) 241-6400; Concentra Medical Centers, (216) 426-9020

Tuesday, 27 February 2001 19:00

Big money or bust

Hal Nissley has served as an organizer, consultant or director at 44 start-ups.

In 1979, he secured the first commercial customer for Oracle, now a $4.9 billion company. In short, he knows a good business opportunity when he sees it.

Among his other business interests, Nissley is also founder of the International Angel Investors Institute in Silicon Valley and attended the first seminar of the Northeast Ohio branch of the Institute. There, he spoke to area investors and business owners about what he looks for in an investment.

He was joined by Krist Jake, president and CEO of Redwood Capital Partners in Silicon Valley, and Mike Pogue, president and CEO of Angel Capital Network, a Sausalito, Calif.-based venture investment bank.

"Simplistically, the perfect deal can be summed up in two words: markets and management," Nissley says. "It can't be 40 percent on one and 60 percent on the other; they almost have to be in perfect balance."

More specifically, here are some of the factors these seasoned investors look for in a deal, and they aren't always the same things.

Product

While Nissley says he likes to get involved in a start-up at the early stages, even help the founders write their business plan, Pogue says his firm usually waits until technology is in place and customers are placing orders.

"We had to have market validation before we were ready to stand up and get out our checkbooks," he says.

Jake, on the other hand, says it really depends on the product or service idea. If his firm's research shows that the opportunity is too good to pass up, it will invest even at the idea stage.

Market potential

When it comes to expected sales, there's little difference of opinion among investors: $100 million within 10 years, or they'll pass.

"I would say a $100 million market is an absolute minimum," Nissley says, while pointing out that it should only be a first benchmark on the way to much higher sales.

Jake says his firm isn't stuck on an absolute dollar figure, but there must be a large payoff down the road for it to invest.

"I think there's lots of good businesses out there that can succeed in a market that is much smaller than $200 million," Jake says. "It's just that the amount of capital consumed to get to that point can't be very much at all."

Barriers to entry

While patents and protectable intellectual property are good stonewalls to keep competitors from stealing your market share, they will find other ways to stay in the race. Likewise, the investors say a start-up owner claiming a first mover advantage or patents doesn't make or break a deal for them.

"I must have heard first mover advantage at least 1,000 times over the last year," Jake says. "All else equal, that's great, but it's rarely all equal."

Many companies fail in this area because while they are busy protecting ideas and technology, trade secrets such as customer lists, investor lists, vendor lists and channels of distribution lists are not as guarded, but just as valuable.

"Most people fall flat on their face when it comes to this type of intellectual property," Nissley says. How to reach: International Angel Investors Institute, Northeast Ohio, (216) 377-0619

Morgan Lewis Jr. (mlewis@sbnnet.com) is a reporter at SBN Magazine.

Thursday, 13 September 2001 13:05

Cut to the chase

"Anybody can have ideas -- the difficulty is to express them without squandering a quire of paper on an idea that ought to be reduced to one glittering paragraph," Mark Twain wrote in his famous letter to Emeline Beach in 1868.

That fact is it's still true today, more than 130 years later.

The executive summary of your business plan should be short regardless of the complexity of your ideas. It's the single most important section of your business plan when luring investors, so the temptation is to make it longer than it needs to be. Keep it two to three pages at the most.

Experts recommend the section focus on:

  • Background about the entrepreneur and the management team in terms of education, work experience and accomplishments, and skills.

  • The basic idea and the market background focus on the uniqueness of the idea and its competitive advantage, along with the market size and characteristics.

  • Sales and profits forecasting for three years.
  • "While you may want to grab an investor's attention, you need to be careful not too be too glitzy," says Robert Hisrich, professor of entrepreneurial studies at Case Western Reserve University Weatherhead School of Management. "It should be written in a professional business style and should be very carefully written and rewritten and rewritten again as it is very important, particularly in securing outside capital."

    Consider the audience

    It's true the executive summary is the most often-read section of the business plan for investors, but investors shouldn't be the only ones looking it over.

    "I might use the executive summary to convince a key supplier to supply me, even though I don't have a track record," says Jeffrey C. Susbauer, associate professor emeritus at the James J. Nance College of Business Administration at Cleveland State University. "I may use it to entice a key customer to buy from me or to get a potential key employee on board."

    The executive summary is like a cover letter before a resume, Susbauer says. You wouldn't send the same cover letter to apply for a job at a bank as you would for a job at a marketing firm. You need to emphasize the important facts based on the intended reader.

    Stay conservative

    An investor will certainly be impressed by a forecast saying you will dominate the market or you will have billions of dollars in sales in less than five years. But don't play Nostradamus unless you can prove your predictions will come true.

    "I always tell my students you have be both Republican and Democrat in writing a business plan," Susbauer says. "You want to be very conservative on the sales numbers -- almost a worst case scenario. You want to be extremely liberal on the expenses because if there's anything I know about starting a business, it's going to cost more and take longer to get there than you could wildly imagine.

    "If I end up with conservative sales forecasts and liberal expenses, if I still make money, I've got a pretty good case."

    Save the best for last

    Experts recommend you write the executive summary last. If you write it first, it often bears no relationship to what is in the plan.

    "It serves as the guide to what's behind the plan," Susbauer says. "It's an evolving thing."

    How to reach: Weatherhead School of Management Case Western Reserve University, (216) 368-2030 ; James J. Nance College of Business Administration Cleveland State University, (216) 687-3786

    Morgan Lewis Jr. (mlewis@sbnnet.com) is senior reporter at SBN Magazine.

    COSE VentureQuest 2002

    Thursday, 13 September 2001 09:03

    Like a rock

    Landing a client like General Motors isn't easy. It takes months of preparation and meetings, not to mention the risk to your company if you don't win the contract.

    But if you're successful, the rewards can be sweet.

    Just ask Arthur L. Healan, president of PPI Technical Communications in Solon. PPI was awarded the contract for GM's documentation control center for its Truck Division this year. The project will likely double the size of the 40-employee technical publishing firm over the next 12 months.

    How did Healan land such a deal?

    "We listened to them," he says. "We asked, 'What do you like about what you're getting now? What don't you like about what you're getting now?' We came back to them with a proposal on how we were going to address the issues they had with their present supplier and would get the job done."

    Healan used the same tactic to land a lucrative contract with fluid system components manufacturer Swagelok, also in Solon. Healan heard Swagelok hired a California company to translate its manuals into other languages, but the job was overpriced and not getting done.

    "We sell our clients on a project execution process," Healan says. "Through trial and error and many years of experience of what works and what doesn't work, we've developed a template for project execution. Knowledgeable customers that see this process -- and we graphically illustrate it to show it to them --understand the value of it."

    Here are Healan's tips to find and attract big clients away from your competition.

    Be accountable

    Companies sometimes take advantage of a large client's deep pockets, and GM's concerns about that were no exception. To soothe those concerns, Healan offered GM a real-time, Web-based progress report displaying what percentage of its project was complete and how much of its money had been spent.

    "Don't take any customer for granted," Healan says. "Whether it's a small local company or a General Motors, business, at least in a service business, is based on trust and relationship-building. We take that very seriously."

    Build on your partners

    PPI is a division of Contract Professionals, a $54 million technical staffing company based in Waterford, Mich. Contract Professionals often supplies engineers, designers and programmers to General Motors, which helped Healan and his marketing staff land an appointment with GM management.

    "It's important to keep your ear to the ground," Healan says. "If you listen to your customer long enough, they'll tell you what their problems are. And then it's whether you have a viable solution or not, or if you can even refer them to somebody if it's not you."

    Diversify

    Healan has invested more than $750,000 in internal computer servers, new Web servers, storage space and software programs since he acquired PPI in 1998. With the new technology, PPI's services expanded with the growing needs of its client base.

    "As we got out there and talked to more clients, many of them were asking us, 'We've got a problem in this area, do you do that?'" Healan says. "It's a building block process. There were a few blocks missing in that first tier so we took care of that first tier. Now we're up to four tiers of blocks in place.

    "We've expanded our offerings and built sound business practices and processes that we've tried to adhere to and follow closely."

    How to reach: PPI Technical Communications, (440) 498-9254

    Morgan Lewis Jr. (mlewis@sbnnet.com) is senior reporter at SBN Magazine.

    PPI Technical Communications website

    Thursday, 13 September 2001 07:19

    Magic Man-ny

    It's all in the hands, magic.

    You sense the deception when you see those fingers start to move, crunch into a fist, then blossom into a bare palm. You watch the ball or coin disappear before your eyes and reappear in the magician's pocket. There is a strange delight in being tricked by a magician.

    Manny Sperling has those hands. On his, he wears a gold ring with black stone, a homage to his idol, Harry Blackstone Jr. He wears a gold bracelet and a gold watch with a black leather band. The hands move precisely, but effortlessly. Every motion is calculated, but graceful.

    Today he's doing what he does best, close-up work. It's not the type of illusion where some TV magician steps into a tornado of flame or encloses himself in a block of ice. It's just you and the magician.

    You stare at those hands, inches away, determined not to let them fool you. But they always do. Manny Sperling's made a living on it.

    "Do you have a dollar bill?" Sperling asks a man in the audience, who cautiously hands him the bill. "This is your dollar bill. As I fold the bill, I'll ask you if it's face up or down. While we're doing this, I want you to keep one important fact in mind: This dollar bill represents an investment in this company and the return you can get in that investment. Are you ready?"

    The man nods, a slight grin on his face, perhaps aware of what will happen next.

    Manny folds the bill into a small half-inch square. Then, as he unfolds it, after each fold asking the man if it's right side up or down, we begin to see George Washington has disappeared, replaced by Ben Franklin.

    "At this point, this is the return on the investment," Sperling says. "Unfortunately, I'm required by the rules and regulations of the various magic groups I belong to, to return your dollar bill investment, the way I got it. See the $100 bill? Kiss it goodbye."

    The audience laughs, unaware that Sperling has just planted a powerful and positive message about the company he's working for. It's what marketing is all about.

    "If you put magic with what you want to get across to either your clients or your staff, you heighten the percentage of what they remember because of what they see," Sperling says. "Magic is probably the most nonthreatening form of entertainment in a client's booth because people will stop to watch a magic show. They're pretty confident that they're not going to get pounced on around your booth."

    Sperling's love of magic began at age 7, when his father bought him a magic cup and balls set at a local magic shop.

    The childhood fascination remained with him as he grew up. After college, he taught speech, drama, radio, television and communications before taking a position as a consultant for an audio-visual company selling closed circuit television or rear screen projection systems.

    Today, Sperling's main act is entertaining crowds of people at trade shows under the company name Magic Concepts. He doesn't go for the hard sell in his act, but he never lets a captivated audience slip away without delivering key messages about the company he's representing that day.

    "About 80 percent of what I do in the booth is sheer entertainment," Sperling says. "What's fun for me is I try to learn enough about the company and its products. Not to be a salesman for them, but many times after I finish a show in the booth, if all of the salesmen are busy, if I notice somebody standing and looking, I'll ask, 'Can I help you?' They'll ask if such and such is correct about the product. I'll say, 'Yeah. Everything I said about the product is absolutely correct and absolutely true.'"

    Early in Sperling's professional magic career, he performed at a water treatment equipment trade show for long-time client JWI Inc. in Holland, Mich. He performed a trick in which he transforms a cup of water into a glob of dry material after a dash of magic dust and a "hocus pocus." The trick delivered the message that JWI's wastewater treatment equipment could take waste and sludge from a city's sewer system and transform it into a dry, environmentally friendly material in one simple step.

    After the trick, a soft-spoken man approached Sperling and asked if the information about the equipment was true.

    "I told him I knew it was true because I read the literature, saw the equipment and talked with the people in the lab that developed it," Sperling says.

    The man thanked Sperling and left.

    Six months later, David Spyker, president of JWI, called Sperling to thank him because the man he had spoken with was a city wastewater treatment operator and had bought a $250,000 piece of equipment. The man turned out to be a magic fan. Otherwise, he never would have stopped at the booth. He had never even heard of the company.

    "The thing you need to do at these trade shows is to get the client to cross that magical yellow line into your booth," explains Spyker. "In our business, you're dealing with operators of wastewater plant and water treatment plants. These are not high-profile, glamorous occupations. A lot of these individuals tend to be reserved.

    "So you have this reserved individual, he may be too shy to step across that line and look into your booth. Manny was able to draw that moment's hesitation out of that individual, so they stick around to see what he has to say. That's exactly what he did with this guy."

    Thirty years ago, Sperling and his wife had just finished eating dinner at the home of his accountant and his accountant's wife.

    The accountant asked if they would like to see some magic tricks, to the surprise and delight of Sperling. He had no idea his close friend knew any magic tricks.

    "He took out a little table and a deck of cards and for about 20 minutes, he frustrated the daylights out of me," Sperling says. "To tell you the truth, it fascinated me and frustrated me at the same time, sitting right next to him watching this."

    The evening rekindled his childhood fascination with magic and the feeling lingered for rest of the weekend. The following Monday, fate struck again. He was downtown after a client meeting, and instead of stopping at a nearby cafe for lunch, something caught his eye. It was Snyder's Magic Shop in Public Square.

    "I walked in, and the place was just jam-packed with stuff," he says. "Unless you've even been in a magic shop, you walk in and you can't believe there's that much stuff. I bought the trick my friend did and I bought two decks of cards and a book on card magic.

    "When I got home that evening, I sat down with the book and the deck of cards for about three hours because I was fascinated by what I was reading and what I could do."

    For the next two years, Sperling practiced magic at home and performed occasional card tricks at parties just for fun. Then the word started to spread. He got a call from a woman who was throwing a mystical membership theme party, complete with a Tarot card reader, a Ouija board reader and a palm reader.

    She wanted Sperling to perform a couple hours of close-up magic because she had seen him at a party doing his tricks.

    "She asked me how much I charged," Sperling says. "I had no idea. So I made something up. She said 'Yeah, that's more than fair.' That was my first professional performance."

    The Tarot card reader turned out to be the assistant director of continuing education at John Carroll University, who asked Sperling if he'd like to teach magic in his spare time. Eight months later, he was teaching basic magic in the evenings to classes of more than 20 students.

    "Some of the people that took the course were not only students, but salespeople who just wanted to learn enough magic or enough things so while they were out to dinner with a client, they could entertain the client," Sperling says. "There wasn't anything else they could do that would turn a formal situation into an informal, fun evening. It breaks down the air of formality when somebody does a little trick."

    If he's not at a trade show or teaching a magic class, now at Yendor's World of Magic, Sperling is entertaining at private company parties. He starts off those events blending into the crowd as if he's one of the guests, but the ruse rarely lasts long, says Alan Schonberg, founder and chairman emeritus of Management Recruiters International.

    "Manny is really a very warm, outgoing and empathetic person," Schonberg says. "Because he is so engaging both before his act and during his act, people just like being there with him. He sizes up the crowd quickly and he plays toward their hot buttons, even when the audiences in some cases are as high as 800 people."

    How to reach: Magic Concepts, (216) 486-4540

    Morgan Lewis Jr. (mlewis@sbnnet.com) is senior reporter at SBN Magazine.