According to a survey taken by Ecom Ohio, 80 percent of Web sites in Ohio are less than 3 years old.
The past three years have seen a lot of changes in bandwidth, software and consumer expectations. Many businesses are re-evaluating every aspect of their e-business initiatives.
At Arter & Hadden's e-business seminar series, three local businessmen -- Lial Thompson, director of business system for Polyone; Bob Fortney, CEO of Fortney & Weygandt Inc.; and George Bielert, director of ewolf.com -- discussed the issues they faced when making decisions regarding their e-business initiatives.
"Don't worry how it gets done as long as it is effective and works," says Bielert of ewolf, an online art auction site.
He suggests decision-makers leave the complex technology to the people who specialize in it. It's too easy to get bogged down in details that in the end won't matter to your customers.
"I can't have people going through 17 or 18 screens to put a bid in," says Fortney.
His advice: Keep it simple and user-friendly. Your site should consider the most unsophisticated user. The best approach is to ask yourself what you need and what is the fastest way to get there.
One of the most difficult questions is cost. The Ecom survey revealed that only 27 percent of businesses created a Web site to save money. Think of the return on investment as a byproduct, and focus on increased efficiency and customer awareness rather than profit and loss. Fortney likens it to "looking at an individual frame of a movie," and not being able to see the whole picture.
That said, Bielert says don't forget to put in place the ability to measure results.
"You don't want to find out after the fact that you can't collect the data you need," he says.
Recognizing up front what measurements are needed promises to save time and money.
Scalability is another issue. What you need now may not be good enough later.
"There are many ways to get where you want to go," says Thompson.
You can spend capital for the best software programs, but carefully evaluate it so you don't underbuy or overbuy.
"Be prepared to throw away what you do today," adds Fortney.
As with any business venture, you need risk analysis and contingency plans. Retail is a perfect example. Once you allow customers to purchase online 24 hours a day, seven days a week, you need to have already identified what infrastructure you need to support your new office hours.
"It's not going to help your business if your customers can get to your site but not have any support," Bierlet says.
Also be prepared to start slow and be patient. Thompson warns that in some cases, depending on the purpose of the site, the existing sales force may be threatened. Polyone began with a customer service representative piloted Web site and went beta with only a select group of customers.
In the end, patience may be your best asset.
"It always costs more and takes twice as long," Fortney says. "Don't try to hit a home run. Try to win the game." How to reach: Arter & Hadden, (216) 696-1100; Polyone, Fortney & Weygant, Inc, (440) 716-4000
Kim Palmer (email@example.com) is managing editor of SBN Magazine.
Today, she is owner and president of Roscoe Medical, an international distributor of replacement parts and supplies for home medical equipment that employs 20 people and has more than 800 clients. In the 20 years between minimum wage and owning her own company, she had two children, went through a divorce and the death of her second husband, and worked two jobs for more than a year.
Thuener's story is a familiar one as more women are opting to leave their jobs and become entrepreneurs. Her story is impressive when you consider the risk she took to start her company.
As a single mother of two, Thuener began working as a secretary at Lincare, a national provider of home health care services. With the help of two mentors, she eventually became the Cleveland center manager.
She did what many good entrepreneurs have done before her -- she recognized a need and capitalized on it.
"I worked for a company purchasing a lot of small respirator parts, and my thought was, if I started my own company, it could supply these parts to every health care provider in the country," she says.
Before she started Roscoe, those needing respiratory parts had to purchase them from a number of different manufacturers.
Starting a business is neither easy nor glamorous. In fact, Thuener spent the first year-and-a-half working her full-time job at Lincare and working on Roscoe in her spare time. The business began in her garage in 1993 with the help of her brother, Jason Ziebro.
The risk of starting a business with no prior experience was significant, but she knew it was worth it.
"In my mind, who doesn't want to own their own business?" she says.
And the risk paid off -- Roscoe has seen some pretty impressive numbers recently. In an industry in which the average growth rate is 12 percent to 13 percent, its sales have grown nearly 500 percent in the past two years, and the client list tops at 800.
But finding a niche market is not always enough to keep a business afloat, let alone allow it to grow. One of the biggest challenges in any business, especially a new one, is to find a quality management team.
"I desperately needed help," says Thuener. "I was doing sales, shipping, and it got to the point where I couldn't do it all."
She knew she needed to strengthen her sales department in order to give the time and attention necessary to the mom-and-pop clients that order the equipment.
She didn't have to look further than her own family. Her oldest son, Richard Keirn, was working for Merrill Lynch as a stockbroker when she approached him to run the sales department. Thuener couldn't match what he was making at the time but "I could offer him 8 to 4:30. At Merrill Lynch he was working so much he wasn't seeing much of his family."
As Roscoe grew, so did Thuener's need for a comprehensive sales staff. So, she brought on her youngest son, Jessie, to help with what is a very service-intensive sales process.
"He was very good at it but he didn't really enjoy it," Thuener says. "So he ended up starting our product research and development department ... and it was a great fit and we have expanded our product line."
With one more key management position to fill, Thuener set her sights on Jennifer Keirn. Keirn worked at Edward Howard Co. and happened to be married to one of Thuener's sons.
"We really needed someone to help with PR and run trade shows, and Jennifer was spending a lot of time on the road with Edward Howard, so I wanted to talk her into coming to work at Roscoe," she says.
As convenient as having a ready-made management staff within your own family may be, there are unique concerns.
"You must work hard at separating family and business and being professional," says Thuener.
She stresses professionalism and accountability when it comes to working with family.
"I believe that you never create a position for a family member," and for her, it is equally as important that each of her family members have had work experience outside of Roscoe.
"It is critical that they have had other experience or else you have nothing to compare it to," she says.
One of the upsides to a family-run business is the family-like atmosphere Thuener fosters at Roscoe. In fact, in seven years, not one employee has quit.
"We look at employees as part of a larger team, and we take a one-on-one approach instead of treating everyone the same," she says.
Thuener strongly believes in empowering her employees.
"Each member of Roscoe's management team is given both authority to make decisions and accountability for the results of those decisions," she says.
Thuener admits she is a "jack-of-all-trades but a master of none" and attributes much of Roscoe's success to her strong and capable staff.
Roscoe has seen a good deal of success in a time high volatility for the health care industry. It has 20 employees and a growing sales and product line, all with no debt, giving it a solid financial foundation. The reason for Roscoe's success, among other things, is its customer service and technical expertise.
"Oftentimes these people calling don't even know what they really need ... They need the whatchamacallit on the thingy but our staff knows the equipment and can help them."
Growth has been so consistent that Thuener is breaking ground on a 40,000-square-foot facility in Strongsville.
"It makes me excited and nervous, but I was nervous when we moved out of the garage," she says. "In the end, you just look at the numbers and make the decision."
How to reach: Roscoe Medical, (440) 582-5300
Steve Sneiderman, an attorney at Hahn Loeser + Parks, has a cautionary tale about one of his clients, a supplier who made a very untimely delivery the week before a large local steel company filed for bankruptcy.
"It was a small company, a fuel supplier," says Sneiderman. "He had an open purchase order with the company for twice the normal amount of fuel he usually delivered. The company agreed to reduce their terms from 30 days to seven days, and then three days later they filed for bankruptcy."
His client was trying to protect himself but now stands in line with thousands of other debtors for the money owed.
"They assured him they had plenty of cash, and they would be paying him," says Sneiderman.
But in the end, his client was out close to a million dollars and at the mercy of a protracted bankruptcy proceeding.
"He got frustrated and asked, 'What are you guys doing for me?' but we are limited by the law," Sneiderman says.
Once a bankruptcy has been filed, most creditors' hands are tied.
"In the purest sense of the law, bankruptcy is intended to frustrate creditors, literally slow them down from being able to exercise their rights and in many cases completely stop them," he says.
But there are a few things Sneiderman suggests doing when dealing with a company on the brink of or in bankruptcy proceedings.
Get your own house in order
When dealing with a company on the brink of bankruptcy, this often means doing a little spring cleaning. Sneiderman suggests an "out with the old, in with the new" policy.
"We ask our clients if they have any contracts out there that they have the ability to terminate now," he says.
Sneiderman stresses that companies should always re-evaluate existing contracts, but once the rumors start regarding a pending bankruptcy, the key is timing.
"When you know that someone is in trouble, the first thing you should do is ask, 'How are we legally related to these people and what is our potential exposure?'" he says.
Play out all possible scenarios.
"What if they file tomorrow, then what happens?" he says. "If they don't file tomorrow, what can I do between now and when that happens to reduce the risk?"
You have the legal right to terminate a contract as long as doing so doesn't breech the existing agreement. If you've had the foresight and done the planning, there should be a 30-day clause allowing for termination. But this is much easier to do before the filing because, as Sneiderman says, "The magic of bankruptcy is that the debtor has all the cards."
The other means of minimizing risk is to manage your receivables. In some cases, that means cutting down your payment terms or even demanding cash on delivery. The shorter the terms the better, as his client learned the hard way.
"A lot of times a supplier is willing to trade off those termination rights for a longer term commitment or pricing differences," he says. "They may not know the day they sign the contract how great the risk is."
This is the end
If you find yourself on the creditor side of a bankruptcy, it's important to know your rights and liabilities. If you're not able to terminate a contract before a company files, the proceedings go to the court and your ability to negotiate is cut off.
"After a bankruptcy, you cannot negotiate on the debt that is owed," says Sneiderman. "If you do, you could go to jail for violating the automatic stay."
Negotiation on monies owed before the filing is strictly verboten.
"It is called an executory contract because it is open and because once the bankruptcy is filed, the debtor then has the option to assume the contract and compel performance," Sneiderman says.
Compelled performance is, for the most part, as unappetizing as it sounds and means you must abide by the original agreement.
The fact is that although the debtor is required to give "adequate assurance" that the creditor will be paid the balance of the contract, anything outstanding from before the date of the bankruptcy filing is left for the court to resolve.
Also watch out for payments made within 90 days of a filing. Sneiderman says that any payment that demonstrates preferential treatment is subject to reclamation by the court.
"The idea is that if I'm the bankrupt company and I know I'm going to file and I need to keep you happy, I will pay you as opposed to paying these guys over there and I've treated you preferentially," he says.
If a trustee deems preferential treatment, you must relinquish the funds, and that could cause more grief than not getting the money at all. There are a number of defenses, but if a payment is out of the ordinary or not in the terms of the original agreement, it is best to not count on those funds as solid assets.
However, reclamation in some cases works both ways. In the case of products sold, "You have the ability, if you haven't been paid for sales of goods within 10 days of the filing, to go back and reclaim those goods," says Sneiderman. "If the goods are gone, then you have the right to demand payment in full."
Again, the key is timing. It's best to file that claim as soon as possible after the bankruptcy filing.
Life after bankruptcy
Any bankruptcy filing that catches you off-guard is going to hurt. But in many cases, not all is lost.
"The flip side of it is that now it is a new negotiation if you don't have a contract that is being assumed," Sneiderman says.
Everything starts over, new contracts can be brokered, "and bankrupt companies expect not to get the most favorable terms."
Sneiderman suggests you not burn your business bridges.
"A lot of companies can go through bankruptcy and come out strong," he says.
Why lose out on more money by holding a grudge when you are now free to negotiate contract terms that will minimize your company's exposure? How to reach: Hahn Loesser + Parks, (216) 274-2520
Kim Palmer (firstname.lastname@example.org) is managing editor of SBN Magazine.
Schnabel, president and CEO of Canton-based Fitness Quest Inc., is an innovator in the world of infomercials -- tuned into by an estimated 50 million households each week.
Infomercials -- or direct response TV, as it is called in the industry -- are commercials that include a phone number or Web site address and instruct consumers how to buy the advertised product immediately or, one might say, impulsively.
The idea is simple: visually and emotionally appeal to consumers in a short form (two to 30 minutes) or long form (60 minutes); create a sense of urgency that makes consumers believe they need this product immediately; and let them know they can get it for just a few easy payments of less than $40 each.
"Fitness Quest was the company that basically ran the first of these fitness product commercials," says Schnabel.
His firm, previously known as Consumer Direct Inc., is one of the oldest and most successful marketers and distributors of home fitness and healthy living products in the United States. The company's product lines include the Total Gym and Gazelle Glider, the Abdominizer, Jane Fonda's Bench Step and Tony Little's Ab Isolator.
Fitness Quest has survived nearly three decades in the business, through ever-changing consumer product lines, the introduction of the Internet and three owners. For Schnabel -- an avid athlete who has been a team member in the Iditarod Dog Sled race across Alaska and climbed in the Grand Teton mountains -- the company today is significantly different from when he joined in 1979 as a fledgling copywriter.
Fitness Quest employs nearly 150 people, and its products generate annual revenue in excess of $200 million. That success has come, in large part, from Schnabel's competitive personality, keen eye for marketing and product development, and his willingness to venture into territory never considered by his competitors.
From employee to owner
Schnabel rose quickly through the ranks at Consumer Direct in positions including media director, vice president of marketing and, after 12 years, executive vice president. He built a reputation as a trailblazer, and was among the first in the industry to seek out and land celebrity endorsement contracts, inking such notables as Jane Fonda, Joe Montana and Sheena Easton. His efforts effectively changed the landscape of endorsements in response marketing.
In 1988, he led Consumer Direct from being solely a direct response company to mass retail distribution, breaking new ground with an approach to marketing that virtually all other direct response companies copied -- and doubling sales and profits in three years.
But after a series of disagreements with the owner, Schnabel in 1992 left to form Schnabel & Associates Inc., a marketing and business consulting firm whose principal clients were Consumer Direct and the National Academy of Recording Arts and Sciences.
Following his departure, Consumer Direct ran into financial trouble, and two years later, his phone rang with a request from Stuart Hersch, president of Warner Vision, to return to the home fitness product company where he had made his name. Warner, an affiliate of Time Warner, had acquired many of Consumer Direct's assets, including the trademark "Fitness Quest," and Hersch offered Schnabel the opportunity to run the newly formed Fitness Quest as its president and CEO.
Suddenly, Schnabel, with only a high school degree, found himself with a high-profile executive job, with a stable corporate power bankrolling the operation.
"Things were good for me," he says.
However, the courtship didn't last.
Explains Schnabel, "There was some internal conflict in the Warner Music Group. New management came in, and here we are, this fitness company. They eventually said they didn't want to be in the video business."
In 1997, Schnabel and his management team found themselves at a crossroads. Fitness Quest was being sold, and Schnabel and his team lined up investment dollars from venture capital firm Brantley Partners and purchased the company.
Up-sells and three easy payments
You can only partially credit -- or blame -- Schnabel for the infomercials that inundate the airwaves. But Fitness Quest is soley responsible for the celebrity -- and quasi-celebrity -- endorsements of fitness products, which began with the Jane Fonda workout video and a unique deal engineered by Schnabel.
"We bought the video from Time Warner," he says. "Then we sold the video with a piece of plastic and moved that product from TV to retail distribution."
Thus was born Jane Fonda's Bench Step.
Until then, Warner had sold about 350,000 copies of the video for $29.95 each. But once Schnabel added the bench step and $30 to the price, it sold more than 2 million additional units.
With that one bold move, Schnabel pioneered the add-on or up-sell concept -- suggesting to the purchaser of a direct response product that he could add to his original purchase in some value-enhancing way, such as with a useful accessory or a deluxe, more fully-featured model -- in the world of infomercial products. In 2000, up-sells added as much as 30 percent to the price of the sale of direct response products. And up-selling is just one of the firsts Schnabel attributes to Fitness Quest.
"We were the first with three easy payments of, say, $19.95," he says. "It revolutionized the payment concept."
He also claims his marketing gurus came up with the "As seen on TV" concept, an integral part of Fitness Quest's multichannel marketing approach that adds to direct response TV with Internet sales, widespread retail availability at stores including Target, Kmart and Sears, and sales through catalogers like Spiegel and Sharper Image.
"(Now) we are in all the major sporting good stores," Schnabel says. "It's a cradle-to-grave marketing and distribution strategy. It allows us to introduce successful products and lengthen their viability in the marketplace."
The Total Gym
Direct response TV is responsible for overnight sensations such as the George Foreman Grill, which sells millions of units in both the direct response and retail markets. Direct response TV also provides almost instantaneous feedback about the effectiveness of the product and marketing strategy, a tool that Fitness Quest has used to build long-term marketing and branding campaigns.
"Many companies sell 300,000 units, and then they are out," Schnabel says. "We have a different foundation. We are trying to promote the brand."
To accomplish that, Fitness Quest markets and distributes more than 1,000 pieces of fitness equipment at any given time. The average lifespan of an infomercial is nine to 18 months, but brands like the Total Gym and the Gazelle have outlasted many of their counterparts.
"This year, we just hit 1 billion consumer dollars spent on our Total Gym product," says Schnabel.
The Gazelle line, endorsed by Tony Little, this year is closing in on $500 million worth of total units sold.
The company's products come from sources including individual inventors, product partnerships and an in-house development department. It invests between $2.5 million and $3.5 million each year in product and development costs.
In return, Schnabel counts on high returns from his marketing and distribution system. His approach is not always to get in and sell big quickly, but to increase the effectiveness and longevity of the brand and add products under a well-branded line.
This is achieved by "thorough market research based on the company's database of existing and potential customers," he says.
In fact, one key to Fitness Quest's success has been its ability to continually identify, develop and market new products and introduce innovative enhancements of its existing product lines.
Fitness Quest's team has also developed its own proprietary software to measure the cost-effectiveness of specific cable channels, times and programs. The software calculates consumer response rate per advertising dollar and lets them know if they're committing dollars to the right places.
Another driving force behind Fitness Quest's growing success, Schnabel says, is the exercise revolution.
"All the science and research tells us to exercise more," he says. "And, we are always learning to move the body in new and unique ways."
According to the company's promotional literature, "Fitness Quest benefits from favorable trends that are taking place in the direct marketing and fitness industries." That's a bit of an understatement. Direct response TV generated sales of $142 billion in 2002, with sales projected to hit $218 billion in 2007, according to the Direct Marketing Industry 2003 report. And exercise products and health/weight items are the most popular items sold via direct response TV.
The home exercise equipment market was worth an estimated $5.8 billion in 2000, and is expected to grow 7 percent to 10 percent by 2010. That project growth is what Schnabel is banking on as he looks toward marketing a new line of New Balance exercise equipment.
The New Balance line will be available in higher-end retail outlets and begin at a higher price point than Fitness Quest's other product lines, Schnabel says.
"Different products have different demographics," he says. "The exercise equipment is like the auto industry. It's, in part, about getting you from point A to point B. But depending on how much you want to spend, depends on what kind of equipment you're willing to pay for."
What Schnabel and the rest of the fitness equipment industry are banking on is that exercise, and specifically home exercise, is going to become more of a need for the aging baby boomer generation. In response to that growing demographic, Fitness Quest introduced the BOSU, a half sphere air-filled balance product that retails for $129 and takes advantage of the yoga/Pilates balance strengthening exercises.
"It's the hottest trend in health clubs these days," Schnabel says, adding that the low-impact BOSU is his personal favorite, "because I'm old."
Schnabel says exercise trends come and go, and with them, some of Fitness Quest's products.
"The magic exercise product doesn't exist," Schnabel says. "We all gravitate toward a quick fix. It's human nature. But I also don't think exercise should be all about pain. It's about moving your body. You have to enjoy it and make it part of your everyday life."
How to reach: Fitness Quest Inc., (330) 478-0755 or www.fitnessquest.com
The only way for these suppliers to make it in this economy is to hold on to or increase an existing customer base and increase productivity.
"Everything we do is in response to the customer," says Daniel Sedor, president and CEO of Voss Industries, a manufacturer of parts for the automotive, aircraft and aerospace industries. "You have to be competitive in price ... so you ask yourself what you can change internally to be competitive."
Every business wants to increase productivity without increasing cost, but in manufacturing, it is a do or die proposition.
"We saw it as an opportunity," says Sedor. "The pie got smaller, and we asked what we had to do to get more of it."
Voss' first step was to create a real-time recording of jobs in-house, allowing for immediate visibility throughout the entire process.
"The question we asked: How do we shorten the process?" says Sedor. "When you really look at it, and we did, we realized that (one product) traveled 1.8 miles through the building ... now we have it within 150 feet."
Each department averages two PCs, and shop supervisors are provided with e-mail notifications of job or engineering changes, job routings, material availability and job progress.
Voss also moved from hard copy engineering drawings to Web-based PDF files, accessible in real time to authorized personnel and easily e-mailed to customers. The system increased the efficiency of processing orders through engineering by 25 percent.
"The increase in revenue is there as well," says Sedor. "When you reduce lead times, you affect the bottom line. There is more potential work. And (the technology) changes have attracted new business."
Even with a company like Voss, which is 75 percent employee-owned, management and leadership play a big part in the implementation of any technology.
"I haven't made any parts today, and I won't," says Sedor. "My job is to make it easier for the employees to do their jobs." HOW TO REACH: Voss Industries Inc., (216) 771-7655 or www.vossind.com
"Well over 50 percent of our machine sales are for products that are less than five years old," says John Stropki, COO of Lincoln Electric. "For traditional mature manufacturing markets, like we have in North America, any company that doesn't continue to push the productivity envelope will die on the vine."
Stropki knows that growth in the manufacturing industry comes from increased productivity and new markets. And part of Lincoln Electric's increased productivity comes in the form of less costly, more efficient customer service.
"We have made significant investments in the business process area to improve the linkage between our customers and ourselves," says Stropki.
The marketing improvements go beyond just updated catalog materials. Lincoln Electric's site has a more interactive component to complement its relatively new line of retail-based products.
"Fifty-percent of new customers that buy welding machines have never welded before (and) we wanted to have efficient and timely data to those customers," says Stropki. "This commitment has resulted in annual retail sales growth of over 20 percent."
Increased sales are coupled with decreased processing costs. For example, more than 2,500 warranty applications are downloaded monthly online rather than faxed by the sales staff. This reduces warranty claims processing time by 30 percent.
And an estimated 8,000 potential customer service calls a month have been eliminated since the creation of online account information, inventory check, and invoice, price and sales order inquiry functions.
The elimination of an off-site distribution center also saved money. With technology integration, the company was able to shrink inventory and dramatically reduce the cycle time, eventually saving more than $3 million annually.
"We are very vertically integrated," says Stropki. "Things that we used to outsource, now we do internally ... we've shortened the supply chain, and there is less cost."
Stropki says all of Lincoln Electric's changes have been centered around its customers' needs.
"The primary driver for all that we have accomplished has been listening to the customer's input and to drive our business transaction to be more efficient for our customers," he says. "These changes have forced us to have stronger integration with our customers." How to reach: Lincoln Electric Holdings Inc., (216) or www.lincolnelectric.com
A number of health care providers are looking toward consumer products to increase profits, and nowhere is this trend more prevalent than in procedures that affect appearance.
"We don't want to look old," says A.C. Uveges II, dentist and co-partner of the Uveges-Heimke Group, a practice specializing in aesthetic dentistry. "The baby boom population wants to be part of the game. Look at Botox; there is no stigma anymore."
The rise in the number of procedures such as Botox injections, facelifts and breast augmentation highlights the trend of people willing to spend money outside of insurance premiums for medical and quasi-medical procedures, including aesthetic dentistry or veneers -- a process well-known to the Hollywood crowd and gaining popularity in Northeast Ohio.
"We have one of the first populations of people who will finish life with a full set of teeth," says Uveges' partner, John Heimke.
Heimke says the ravages of time, improper bite, coffee, smoking and dentistry's newest foe, tongue piercing, change and damage teeth, affecting a person's smile and self-confidence.
The veneer procedure is noninvasive, requires two three-hour visits and, at most, involves a local anesthetic. During the first visit, patients are photographed and evaluated, and a digital image is created to simulate changes in tooth size, bite and color. This information is sent to a lab, where the veneers are produced. On the second visit, the patient is fitted with the permanent veneers.
Heimke and Uveges use all the latest lab equipment, including Computer-Aided Design (CAD) software, but they are quick to add that there is an art to the process.
"Just by changing the angle and light, you can affect proportions," Heimke says. "We can add to the bottom teeth or subtract from the top to change the perception."
Everything is customized, and patients can choose how many teeth they want to veneer.
"On average, for about 10 teeth, it may cost from $8,000 to $10,000," says Uveges. "You can have three years of braces or two appointments, and get the same results."
The procedure accounts for almost 40 percent of new business for the office, where Uveges and Heimke are finding that more and more professionals feel it's worth the cost.
"When they decide they want something, they want it," says Heimke.
He adds that when it comes to health care, baby boomers are willing to spend more for what they perceive as a better value.
"People say I want the best there is. They don't say, 'I want what my insurance will pay for,'" he says.
This entrepreneurial role is familiar territory for the dental industry, which is used to having its services treated as elective rather than medically necessary. However, these dentists are learning to be much more aggressive in their marketing campaigns and to increase customer service.
"We try to create a 'spa-like' atmosphere in our office," says Uveges.
It's a new atmosphere, catering to a new, older clientele with an impressive amount of expendable income.
It all comes down to the value of self-esteem, Uveges says, whether you're a salesperson, a CEO or, like one patient, a retired 80-something.
"I had one patient tell me, 'I felt so good (after the procedure), I went out and bought a Corvette,'" he says. How to reach: The Uveges-Heimke Group (877) 586-6470
We're so vain
More than 6 million women and 1 million men in 2001 decided there was something about them they wanted to change or enhance.
Topping the list of surgical procedures were lipoplasty, eyelid surgery, breast augmentation, nose reshaping and facelifts. The top five nonsurgical procedures were botulinum toxin injections, chemical peels, collagen injections, micro dermabrasions and laser hair removal.
* There were nearly $8.5 million cosmetic surgical and nonsurgical procedures performed in 2001.
* From 1997 to 2001, there was a 304 percent increase in the number of cosmetic procedures.
* From 2000 to 2001, there was a 48 percent increase in the number of cosmetic procedures.
* Baby boomers ages 35 to 50 had the most procedures - 44 percent of all procedures performed.
* Those ages 51 to 64 receive 25 percent of all cosmetic procedures performed.
* People ages 19 to 34 had 22 percent of all cosmetic procedures performed.
* Those ages 65 and older had 5 percent of all cosmetic procedures performed.
* From 1997 to 2002, the number of Botox injections increased from 700,000 a year to 1.7 million a year.
Source:The American Society for Aesthetic Plastic Surgery
This is not too shocking until you know that these medical professionals are employed by one of the two most renowned medical facilities in the region.
As a first-class trauma center, MetroHealth System has become a safety net hospital, taking in those who don't have access to other facilities or services.
"Many hospitals are backing away from trauma care, and we are getting more pressure to provide those services," says Terry R. White, president and CEO of The MetroHealth System. "We are seeing more of a demand for those resources, and there are a lot of ambulances looking for a place to take critical care patients."
With the closing of Mt. Sinai and St Luke's in 2002, MetroHealth became the region's only safety-net hospital at a time when uncompensated charity care costs in the region have reached $100 million. MetroHealth operates 13 inpatient and outpatient facilities in urban and suburban settings throughout Greater Cleveland, and these neighborhood health centers saw approximately 175,000 patients in 2002.
"We really feel that we are a health care delivery system, and we want to provide care in the most efficient and effective setting ... which is close to home," says White. "People like to get service in the immediate community."
In the end, it cost a lot less to see a patient in the health care center than in the emergency room. But for patients in need of emergency care, MetroHealth is building a 5,000-square-foot Critical Care Pavilion, capable of handling 100,000 emergency visits annually.
"This will be the nicest surgical facility in the world with the best surgical suites and everything," says White. "It will be the best until someone builds the next one, at least."
And does White have to say about the T-shirt rumor? He won't confirm or deny, but says, "Maybe, after the (Pavilion) is finished, we'll have a party and give them away." How to reach:The MetroHealth System, (216)778-7800 or www.metrohealth.org
Nonprofit organizations are filled with people trying to make Northeast Ohio a better place to live for everyone. These organizations thrive on the energy of volunteers and board members who keep the organization focused, raise money and lend a helping hand to those in need. The Greater Cleveland area is fortunate to have more than 1,000 charitable foundations, each with its own unique mission -- and its own unique demand for future leaders.
But with an aging population, nonprofits are looking to the next generation for help. There are fewer young people to fill positions, but demands for time and help are increasing for the foundations and the charitable organizations that serve our communities.
In the early 1990s, many nonprofit organization executive directors looked at their boards and saw they were aging. Few had mechanisms in place to replenish their boards with younger professionals, who would bring with them fresh concepts and a different outlook.
"In the last nine to 10 years, we've actually seen a number of nonprofits creating associate boards," says Alice Korngold, president of Business Volunteers Unlimited, an organization that helps place young executives on nonprofit boards. "It's a vehicle to engage the next generation of volunteers."
The younger volunteers act as manpower first, but have a larger goal. Says Korngold, "Many of these people in their 30s are moving into leadership roles on the boards."
BVU provides an outlet for young professionals who want to get involved with nonprofits but don't know how to break through the old who-you-know-method of board placement or what nonprofits exist. Cleveland Bridgebuilders, founded by David Akers, tackles the problem from the other side, engaging young professionals whom it taps as the next group of leaders and helps spur their development. These groups have brought a greater sense of open-mindedness to the boards, says Korngold, including a more diverse membership.
"Before, being on a board was more who you know," she says. "Today, boards are very purposeful."
Tapping every available source for volunteers , donations and leadership is vital because the nonprofit sector has weathered several years of public and private funding cuts.
In 2002, individual donors in the United States contributed more than $183 billion, excluding donations to to churches, a nearly 1 percent decrease over 2001, adjusted for inflation. Foundation giving, however, decreased by 2.7 percent, adjusted for inflation, according to a Giving USA survey.
Unfortunately, the real squeeze lies ahead. State budget deficits are projected to reach a cumulative $80 billion to $90 billion in fiscal year 2004, and that threatens funding for health care and other services. Ohio alone has a projected $2 billion deficit that has to be made up through budget cuts or tax increases. Budget cuts will likely affect funding levels and increase the strain on nonprofits as state services are replaced by private ones; tax hikes take money away from people, leaving them less to donate to charity.
But not all the news is bad.
Volunteerism is at an all-time high, with many of the increases coming from minority and youth group participation. In 2001, a study conducted by Independent Sector found that 44 percent of U.S adults volunteer time to at least one nonprofit organization.
That number is even higher in the corporate world -- a Smart Business/BrownFlynn Communications Community Relations Survey found that 62 percent of Northeast Ohio companies allow employees to volunteer during work hours.
Despite the positive numbers, they could still be higher, says Margie Flynn, co-principal of BrownFlynn Communications.
"I was surprised to see that 65 percent of companies that participated in the survey do not have (company-directed) employee volunteerism programs," says Flynn. "With the high percentage of management that allows their employees to volunteer during company time, you have to wonder whether there's a disconnect and whether the efforts can become part of a bigger corporate strategy."
But taken as part of a larger picture, there are encouraging signs. Volunteering by high school students recently reached its highest level in the past 50 years -- about 55 percent offer their time, according to a report from America's Children -- and studies show that people who get involved as youths continue that involvement into adulthood.
So it's no wonder that many organizations now see young adults as an effective long-term solution to one facet of the nonprofit crisis.
The responsible generation
"I'm out of town so much ... this is the only board I sit on," says Mark Shapiro, general manager of Cleveland Indians, of his involvement with the Center for Families and Children. "I wanted to be involved in one thing so I could focus. I didn't just want to lend my name to something."
Making a difference is what it's all about for people like Shapiro, who are not content with just seeing their name on a board of directors list.
"Younger professionals might not have a lot to give, but they still want to be involved in a more personal hands-on way," says Sylvia Kertsey, president of Young Directors, the associate board of the Center for Families and Children.
Young Directors, founded in 1992, has 60 full-time members, more than 600 people on its mailing list and more on its e-mail list. Like other young professional arms, the group is not a huge source of monetary donations, but it organizes and puts on affordable fund-raising events for Adopt-a-Family and other CFC-related programs.
"We try to pick up some of the slack," Kertsey says.
She says the events benefit young professionals and nonprofit organizations in two ways.
"It's a good way to meet people and better the community," she says. "They may start with the socializing and then, if it interests them, they might venture into becoming more involved. Hopefully, they do both."
Korngold puts it another way.
"They only have time to do one thing, and they want a positive experience, which adds a new pressure to nonprofits," she says. "The days of lending your name to a board are over. This group wants something meaningful and productive ... and they are impatient."
While some organizations are courting younger members for the first time, others already rely on that population to drive the bulk of their initiatives.
"Throughout the night, we had 500 people," says Manda Gillespie of EcoCity Cleveland about the Green-tie Ball, an event hosted last spring by environmental groups including the Green Building Coalition as a fund-raiser for the Cleveland Environmental Center. "There were definitely some people there who had never been to a fund-raiser."
The Green-tie Ball was more of a coming out party than an event to raise money, Gillespie says.
"No one had any mic time, there were no speeches," she says. "It was all about having fun and being social together."
That's why Gillespie says the organization spent a considerable amount of time thinking about the $45 ticket price.
"We could have charged double and still sold out," she says. "But we wanted it to be accessible, including (to) the 80-year-old trustee and the 21-year-old Oberlin student."
Although the '90s had its share of 20- and 30-something dot-com millionaires, the average professional in that age range doesn't have the type of disposable income most nonprofits target for significant donations. The standard fund-raising approach has been to tap into large donors and depend on their largesse to sustain the organization.
It's a method that's been quite successful for Ohio nonprofits -- the area has one of the oldest and most generous groups of private givers in the nation and ranks in the top 10 states in charitable contributions.
However, significant drops in the stock market have had a profound effect on bequests and estate gifts. That where events like Cool Fridays, hosted by the Cleveland Museum of Art, and Theology On Tap, hosted by the Catholic Diocese of Cleveland Foundation, come in. These organizations have found that the large-scale events aimed at donors who pay hundreds of dollars per ticket engage only a small percentage of potential givers.
"We've tried to create events to attract (people) under (age) 35," says Karen Carr of Young Friends, the associate board of the Cleveland Museum of Art. "They don't have a lot of money, but it's a way to educate and introduce them to our older groups."
Young Friends events include movie screenings, happy hours and awareness education such as contemporary art appreciation lectures. Last year's Fast Forward event attracted more than 1,000 young professionals to the museum to meet, greet and learn about the museum.
The Diocese Foundation has long had a similar approach to its youth membership. Its annual Crooked Halo event is priced at $50 per person and attracted more than 800 attendees.
Awareness and involvement are key for these groups as nonprofits are quickly learning what corporations have known for quite some time -- brand loyalty, or in this case, cause loyalty -- is strong, and will often follow a person through his or her life.
The one thing that many of these groups that attract the younger philanthropist-volunteers have in common is the opportunity to be intimately involved in change. This, says Gillespie, makes members feel they are instantly making a difference.
"We give to the organization that we care about," she says, "where my $20 can make a difference instead of (being) forgotten at a big organization." How to reach: Center for Families and Children, (216) 696-6900; Cleveland Museum of Art, (216) 421-7340; Catholic Diocese of Cleveland Foundation, (216) 696-6525; EcoCity Cleveland, (216) 932-3007; Business Volunteers Unlimited, (216) 736-7711
"According to the ABA (American Bar Association), wage discrimination cases are more prevalent than sexual discrimination cases," says Sharon Regas, attorney at McDonald Hopkins. "And lately, more and more, we've seen attorneys tagging on wage disputes onto other charges."
In some cases, employers don't pay overtime or enough overtime when it is required; in other cases, employers deduct from employee salaries when they shouldn't, and plaintiff attorneys are taking advantage of employers' mistakes.
"Employers don't look at the regulations carefully. They don't take the time, and operate under misconceptions," says Regas.
And this opens them up to litigation.
Some of the problems are due to the confusing and often antiquated regulations that, until recently, hadn't been changed to meet new job duties.
Previously, tests based on salary levels and work duties determined whether an employee was qualified for overtime, but those definitions were vague. The regulations used terms like "regularly exercises discretionary powers" and "management of enterprise" to describe exempt salaried employees.
In response, Congress has passed new standards for exempt and nonexempt employee classifications under the Fair Labor Standards Act. The rules are designed to clear up the confusion surrounding job duties, moving some employees into the exempt category while moving others out. The rules will affect as many as 6.5 million U.S. workplaces.
"Now there are two tests (long and short) for the three major office exemptions ... and each test has two components -- salary and duties," Regas says. "Now is a good time to correct any policies that allow improper salary deductions ... because by taking an improper deduction, you destroy the employee's exempt status."
One of the most notable FSLA changes is that now employees are considered exempt if they "hold a position of responsibility," changed from an employee who "customarily and regularly exercises discretion and independent judgment."
With the old regulations, some employees, like IT workers, could still qualify for overtime.
"With technical positions ... someone could be making $80,000, and you still have to pay them overtime. The new proposals just give you a hint as to how complicated and convoluted the regulations (were)," Regas says. "This helps give some clarity ... and it's not going to set off a wave of audits."
These proposals could affect as many as 110 million employees and provide employers an excellent opportunity to re-examine the status of employees without the risk of back-pay lawsuits.
Regas stresses that, "It's good time for employers to make changes and not alert the work force that mistakes were made in the past."
Last fiscal year, the government collected nearly $143 million in back wages for violations of the Fair Labor Standards Act, which requires employees to be paid overtime. How to reach: McDonald Hopkins, (216) 348-5834 or www.mcdonaldhopkins.com
The long and the short of it
Changes in the Department of Labor's Fair Labor Standards Act address both the salary and duties tests used to determine whether an employee is exempt.
The rules eliminate the long test rule that restricted exempt employees from devoting more than 20 percent of their workweek to performing duties that were considered nonexempt. Employees can now be classified based on their primary duty.
Under the old rules, an employee earning $155 a week can qualified as a white-collar employee not entitled to overtime pay. The changes raise this minimum salary to $425 a week.
The changes guarantee overtime to an employee working 42 hours a week supervising a machine shop for $17,000 a year. They also allow deductions from the salaries of exempt employees for full-day absences taken for disciplinary reasons, such as sexual harassment or workplace violence.
Previously, only hourly workers were subject to deductions. The salary-basis rule prohibiting deductions from exempt salary for partial-day absences remains. Source: U.S. Department of Labor