Because most of the owners -- both home and business -- were so well insured, the township didn't qualify for federal aid. But that didn't ensure against profit losses for those businesses. Property insurance isn't the only coverage you need to keep you in business if disaster strikes.
I spoke to experts in the insurance industry to find out what types of coverage are available, as well as how to decide what to purchase -- without solely relying on the recommendation of your insurance agent.
Most agree that both the type of insurance you decide to carry and the level of coverage provided by each are equally important.
First, learn everything you can from people with training and experience in the business, and don't rely on just one insurance agent's advice. Ask about the type of insurance available, the recommended levels of coverage and the premium costs of each alternative. Also ask about business continuation insurance, coverage that replaces income if your business is interrupted.
Then, talk to owners of businesses similar to yours about their coverage and their experiences with different types of coverage. And remember to change or update your coverage periodically.
Here are the two most basic areas of business insurance that agents mention:
1. Liability and property coverage is probably the most basic and critical coverage a small business needs. Property insurance protects in the event of fire and theft, while liability protects a business from lawsuits due to injury or damage to a third party.
Additional coverage can be purchased for computer protection, earthquake and flood insurance, workers' comp or autos.
2. Business interruption insurance is designed to cover the loss of income incurred if normal business operations are disrupted or halted by damage to property. If your business's location is critical to your ability to produce revenue, you should carry business interruption insurance.
Businesses most affected by this kind of loss include manufacturing, wholesale and retail. Those less affected include most service businesses. But still, many service businesses affected by the World Trade Center attacks suffered from business income losses because customers or vendors were unable to reach them.
In this case, business interruption insurance may not have covered profit losses, so make sure you fully understand the limitations of your coverage.
Fred Krum is 50, and it's hard to believe he's been working at the Akron-Canton Airport for 30 years and has been its director for the last 21. While some companies grow stagnant after five years of the same leadership, under Krum's rule, the airport has broken its own passenger records as recently as January.
To put this accomplishment into perspective, business at the average U.S. airport was down 14 percent in January, while business at Akron-Canton Airport was up 7 percent.
"We're way ahead of the pack," Krum says.
He attributes CAK's quick recovery from 9-11 to several factors. First, it is a relatively small airport (115th in the country) in a large market.
"The carriers (airlines) added capacity back here quicker here than with other airports," he says. "We're a secondary airport in a large metropolitan area, so they looked at that as a chance to get more passengers. We have the ability to take more passengers from all over Northeast Ohio. Part of it was the fares, but also there was a little more comfort level."
He says the combination of low fares from carriers like AirTran and CAK's size brought passengers back more quickly.
The obvious question now is, will these passengers stay loyal to CAK?
"Does that mean there's a 50 percent switch in market share between Cleveland and here? No," says Krum, "but if it's a 3 to 5 percent, that's significant for us."
He says ultimately, the airport would be better off if 9-11 had never happened. In 2000, it was ranked by an independent research firm as the eighth fastest growing airport in the country. Krum thinks business would have been up more than 7 percent it was in January if the airport had been able to continue that growth record.
"In 2001, nobody grew. Every airport was down in 2001," he says. "In September, we were off 35 percent. September and October were disasters. Every airport shrunk. Since then, we have come back far stronger than 95 percent of the airports in the country."
How to reach: Akron-Canton Airport, (330) 896-2376
About six weeks ago, a newspaper reporter called me about an article she was working on for the employment section of The Plain Dealer. I am finishing up my one-year term as board president of the Northeast Ohio chapter of the Society of Professional Journalists, and she wanted to interview me for a piece she was working on about the current job market for journalists.
Every week she profiled a different profession for the front page of the employment section, to give job seekers a glimpse into a career they may be considering. I had to assume that most people who read this section are either out of work or unhappy with their current position. While I felt it was my job to paint the journalism profession in the best possible light, the truth is, I didn't know of a media operation that was growing at the time.
In fact, while I have been lucky to work at a stable company for many years, more and more of my industry peers and fellow SPJ members were finding themselves out of work.
I had to think about how best to answer her questions without painting too dismal a picture of my chosen field. After talking to some of my peers, it became clear that, while media companies may not have been adding positions to their work forces, there were always positions available for the best qualified journalists.
Almost every writer I spoke to knew of a case in which an employee had simply been replaced by a better qualified candidate during recent months. While companies were laying off employees, not every layoff was due to a position being eliminated.
Some were simply upgrades. Employers were taking advantage of the sudden rise in the quality of job candidates, and using this opportunity to boost the quality of their work forces.
The side effect of bringing one superstar into a company can be dramatic. Even my perpetually critical journalist friends admit this can motivate an entire staff in a very positive manner if handled with sensitivity.
A talented work force fuels growth, which, in turn, leads to more positions to fill, and, in theory, a lower unemployment rate.
I found that I was able to answer the reporter's questions both honestly and positively, by encouraging job-seeking journalists to hang in there. Since then, many of my peers have found jobs, and admit things are starting to turn around.
He pointed out that, until the past year, the U.S. economy had been in an unprecedented state of fertility, a period that lasted more than 10 years (20 if you include the Reagan era). Because of this, business people in their 20s and 30s lack the first-hand experience of running a business in a flat economy, let alone during a recession.
I was reminded of the remark when I called to make a long-overdue appointment with my hairdresser.
After placing my request for the next available time slot, I expected the usual response of "three weeks from next Wednesday at three o'clock," or some other option that meant three more weeks of dark roots and an appointment that cut right in the middle of my workday.
To my surprise, I was offered a choice of several convenient times (including one that same evening) by a professional and courteous voice on the other end of the line. Once I arrived, I was treated to a slew of free services that had never been offered before, including beverage service and a hand and arm massage.
Salons and other businesses that provide nonessential products and services have become aware that their customers don't need pedicures and massages when times are tough. And for those of us whose household budgets haven't been cut over the last year, we still think about the possibility every day, and we spend more cautiously because of that.
My experience at the salon was not an isolated one. Over the last few months, I've noticed a new appreciation for my business from many companies. I'm getting so used to being treated well that I've started to expect a higher level of service, at a fairer price, from just about everybody.
If I don't get it, I'm quick to take my business elsewhere, because I know I can.
Maybe we needed to be reminded that the last decade was not "normal." The reality is that business cycles go down as well as up, and you can't always expect customers to be clamoring for you.
"One thing I've discovered is that the typical business owner doesn't talk to his advisers unless he has a transaction contemplated," says Wojcik.
Business owners rarely spend the time or the money to just brainstorm with their lawyer or financial planner, he says, and that oversight could be costly.
"They're thinking, 'It might cost me $1,000 to see my accountant,' but out of that meeting you might make $50,000 as a result of some of the changes that took place," he says.
So if Wojcik has described you, he offers these financial planning tips in lieu of an office visit. But he does advise you to set a follow-up appointment with your financial planner.
1.) Make sure your estate plan reflects the law changes effective Jan. 1, 2002. One of the biggest changes in tax law this year for business owners is the unified credit increase that became effective this year.
Prior to Jan. 1, 2002, a business owner could transfer $675,000 worth of business interest in a lifetime to their children without paying an estate tax. As of Jan. 1, that amount rose to $1 million.
"People who had already used up their unified credit of $675,000 got a new $325,000 credit," says Wojcik. "Every business owner needs to visit their estate planning professional to ensure that their estate plan is up to date with the new tax law change."
In addition, the amount that can be transferred as a gift each year, separate from the unified credit, increased from $10,000 to $11,000 per person.
"The primary message is that there has been and will continue to be over the next six or seven years, changes that are already law in estate taxes," says Wojcik, who is a CPA.
2.) Find out how to implement a Section 125 plan at your workplace.
"The 125 Plan is a way to help your employees and help yourself at the same time," Wojcik says.
The plan is set up so that certain expenses, such as health insurance and retirement contributions, are deducted from an employee's paycheck at the pre-tax level. The plan not only saves employees money, but the employer can avoid paying Social Security taxes and workers' compensation premiums on those expenses, too.
"I have noticed that often these plans don't exist. It's a slam dunk that they should," Wojcik says. "It's not new, but many employers don't have them who should."
3.) Make sure your investment mix is consistent with your risk tolerance.
"Last year, a lot of people found out that they didn't have quite the risk tolerance they thought they had, and it caused them to panic," Wojcik says.
He says people should take stock of their investment mix and adjust it according to their risk tolerance. If you don't know what your risk tolerance actually is, ask for help. How to reach: FirstMerit, (330) 384-7304
Jackson has been drawing up these policies since the mid '90s, but over the last three years, he's seen the need -- and the demand -- for them, rise. He says, policies can enable an employer to investigate past wrongdoing and help curtail current wrongdoing.
"E-mail and obtaining and forwarding objectionable information from the Internet seem to play an ever-increasing role in harassment cases," he says. "That's one of the main reasons employers want to have the ability to monitor or restrict Internet and e-mail use. You need to do that as a company just to attempt to minimize liability to some degree."
A policy outlining allowable e-mail and Internet usage can also help protect trade secrets, he says.
The Stored Communications Act -- the law referred to most frequently regarding e-mail usage -- basically puts a limit on what the owner of the equipment (the employer) can do. It was written to prohibit wiretapping, but has been applied to situations in which an employer has monitored e-mails or Internet usage.
"Essentially, what the courts have said is that the act only prohibits an employer from accessing e-mail which is in the process of being transmitted or before it's been viewed by an employee. Once the employee views it or discards it or puts it into permanent storage, then that Stored Communications Act prohibition no longer applies," Jackson says.
After that point, an employer has a right to access stored or deleted information on a computer.
Jackson offers the following considerations in creating a clear policy on e-mail and Internet usage.
1. Put the policy in writing and put it on your computer system. "Have it in written form and have the employee acknowledge that they've received it," he says. "That removes that issue of, ' I didn't get it.'"
2. Start with a philosophical statement -- because you can't cover every scenario -- that e-mail and Internet access are provided as business tools and should only be used for business-related purposes. Make it clear that since the employer owns the equipment, employees have no reasonable expectation of privacy in their e-mails.
3. Include a statement that the company insists that employees respect copyrights, software licenses, and privacy policies.
4. Make it clear the company has and will monitor e-mail activities.
5. State that employees must refrain from making false or other statements which could expose the company to liability, particularly if their e-mail addresses are the company's e-mail address.
6. Make it clear employees must only access the Internet for business-related purposes, and before they send something from the Internet through the company's e-mail system, it needs to be approved. This is for content and for security reasons.
7. Even from business-related Web sites, employees should not download files they believe are untrustworthy.
8. "You want to caution your employees not to open an e-mail unless they know where it comes from. That's not a guarantee, but you're supposed to know who your source is before you open any attachments," he says.
9. State that e-mail is not to be used to transfer proprietary information or trade secrets to a competitor.
For more information, contact Jackson at (330) 849-6657.
The group is called the Community Bank Exchange (or COBE), and consists of the presidents of Home Savings Bank in Kent, Morgan Bank in Hudson, Cuyahoga Falls Savings Bank, Valley Savings Bank in Cuyahoga Falls and Portage Community Bank.
"The premise of our get-togethers is simple," says Howard Boyle, president and CEO of Home Savings Bank. 'Community banks have a great deal in common, even though we may service different markets."
Because community banks share so many goals and philosophies, members of COBE don't view other members as their competition, says Richard Coe, president and CEO of Portage Community Bank. "We don't really look at ourselves as competitors. We think of our competitors as the Key Banks, the big banks."
In fact, the bank presidents who founded COBE say they welcome other community banks as members.
In mid-November, the group made its first public announcement, telling the community the presidents had agreed to waive ATM fees for their customers when they use one of the 11 ATMs the group of banks operates.
"As far as we can determine, we are the only banks in an area stretching from Lake Erie to Stark County to make this commitment to our customers," says William Dougherty, president and CEO of Morgan Bank in Hudson.
According to a survey conducted for the American Bankers Association last March, 43 percent of the banking public pays from $2 to $10 a month in ATM fees. In Ohio, the cost of ATM surcharges is among the highest in the country, with the average bank customer paying $3.49 in fees per transaction.
In addition to losing that revenue, the five member banks had to spread the word about the no-surcharge zone, including training associates, inserting statements in customer mailings, placing signage on their ATM machines and buying advertising space in local newspapers.
Waiving ATM fees was chosen as the group's first public initiative as a response to the difficult economic times many customers are facing. Privately, the group has taken initiatives such as partnering with each other to make loans that exceed one bank's lending limits, says Coe.
By partnering in this way, the banks share both the risk and the profit.
Combined, the five member banks hold about $385 million in assets. Connie Swenson (firstname.lastname@example.org) is editor of SBN Magazine.
Saxon is the new president and CEO of Camp Invention, a program of the National Inventors Hall of Fame that runs 388 camps in 34 states for children in grades two to six.
Students who attend the camps are taught how to develop critical thinking skills, which, it is hoped, will aid them in every aspect of their lives and prepare them for a higher level of success in business. Saxon, who has held the positions of executive vice president and corporate officer for LTV Corp., and group vice president, specialty plastics, for BFGoodrich Co., says there are many similarities between fostering creativity in a classroom and in a workplace.
But right now, he's content working with children.
''It's pretty easy to get motivated about marketing a program like this as opposed to plastic or steel parts,'' he says.
From your experience with adult workers, which applications transferred most easily to the programs and methods you've implemented at Camp Invention?
We work very hard at Camp Invention to create an environment that fosters creativity and critical thinking skills. Part of the way to do that is that the culture has to be conducive to that.
In these classroom settings that we have, we create an immersion for the students. For example, one of our modules is called the Ancient Pueblos. In that module, we recreate the environment of the Native American Indians from 1,000 years ago. They were the first North American inventors.
It's so different from a normal classroom setting where there's rigidity. Not that it's necessarily right or wrong for a classroom setting, but it's definitely not right for an environment that fosters creativity. You want to be out of the box. You want them (the students) to feel as if there's not a wrong answer; you're not looking for an outcomes-based kind of approach.
In business, many parts of an organization will strive to do things the same way (as their competition), yet do them a little bit better. That's not a bad business model. But if you want to create an environment that fosters creativity, you have to get out of that box.
You can't just be looking for incrementalism. You need to be going for the big idea and thinking blue sky. You need to set a culture or an environment where that kind of thinking is encouraged.
One of the business buzzwords that is germane here is the term empowerment. That's what we're doing with the students in the camp, we're empowering them. You take the ball and run with it. You figure this out. That's such a stark change for them from the normal classroom.
Can the process of creative thinking be taught to adults who are already entrenched in their jobs and set ways of doing things?
The answer is clearly yes. There are creativity and critical thinking seminars and there are consultants that will come into your business.
They all have different methodologies, but they're mostly based on academic research that's been done on what drives creativity. How do you develop critical thinking skills?
Which of the skills learned at Camp Invention are thought to help people later succeed in business?
In the traditional school setting -- and I'm not trying to diminish the teaching of the basics because it's very important -- there's reading, writing and arithmetic, science, history and social science. They are things that you have to learn. You have to learn that two and two equals four.
But if you think about a business person, a business person is not just dealing with facts all of the time. You're being hit with some things that are facts and some things that are perception. You have to be able to synthesize all of those things.
It's widely recognized that there are different levels of knowledge and thinking skills. The lowest level of the thinking process is base knowledge. The highest level is synthesis and evaluation. The highest skill level is knowing what to do with all of that knowledge.
How do you put that together? How do you invent something? How do you create a business plan? You're taking disparate pieces of data and perception and intuition and solving a problem with it. That's basically the concept of what we're trying to foster in our program. Many liberal arts schools say their purpose is to teach students how to think. We're trying to do that at a much earlier age.
We're also teaching social interaction. I think back to my education, and I went all the way through (grade school, high school and college) without hardly ever collaborating with anybody. When you think about success in business, there aren't many lone rangers out there.
You're almost always working with somebody else. You've got to make decisions as a team. That's another element of setting up a culture for creativity to happen. You've got those disparate people on that team, and everybody's looking at it differently.
Give an example of an invention that is used in your curriculum and why it was chosen.
There are a couple of things that we're trying to weave into the programming. Every year, we revise which inventors and which inventions we talk about to keep it fresh.
We have several objectives for the kinds of inventions that we talk about. We try to bring the element of diversity into the decision. It is widely believed that inventions, historically, have all been made by white males. We blend in white male, African American and female inventors, so that we're giving a balanced view. And believe me, there's plenty of fertile ground to pick from.
For example, one of the inventors that we're featuring this year is Stephanie Kwolek, a retired scientist from DuPont, who invented Kevlar, the material used in bulletproof vests, an extremely hard polymer. Here's an example of a woman who made an important contribution to society. How to reach: National Inventors Hall of Fame, (330) 762-4463
Connie Swenson (email@example.com) is editor of SBN Magazine.
When Bill Welsh was a second lieutenant in the U.S. Army in Vietnam, he learned that switching to a survival mindset was sometimes the only way to get out of a crisis.
Once, when his squadron was preparing to leave for a mission, he discovered that two tanks were inoperative. One had a bad engine, the other a bad transmission. As the leader of his squadron, Welsh made the decision to order his men to spend the night moving the operative parts into one tank so that the troop would have an operating vehicle.
The next morning, when the commanding officer offered his congratulations on a job well done, Welsh gave the credit to his men who had spent the night working on the tanks. The commander looked squarely at Welsh and told him if the tank had not been operating by morning, it would have been Welsh alone who would have paid the price.
As a management consultant, Welsh built a career on making strategic 11th-hour decisions, taking credit for success and responsibility for failure. In 1989, he was doing consulting work for Steel Products, an aging steel manufacturer in Stow. He had been working with the company's owner, Bill McCracken, on a desperately needed turnaround plan when McCracken offered to sell Welsh part ownership in the company as compensation for his work.
Welsh accepted the offer and soon decided the only way to push the company back into the black was to go through a complete restructuring. He made the tough decision to focus exclusively on machining; prior to that, Steel Products had provided fabrication, machining and assembly services to its customers.
"In 1992, I determined the company was not a viable long-term structure," he recalls. "I had to make a decision, shut it down or redirect the business."
Welsh had plenty of research to back his decision. When he was brought in as a consultant, he commissioned a marketing study from an outside firm, using comments from previous, existing and prospective customers.
"When I got the results, it was a revelation," he says.
The company received high marks on its machinery services, but "below par" in other areas, such as overall customer service, fabrication and assembly processes.
"We realized that we had machinery expertise ... and said, 'We can't do 14 things well, so we'll do one thing well.' We started to focus on service, quality and to guarantee the work."
But the redirection did not come without casualties. When the company's equipment was trimmed from 30 machines to 10, the work force was cut from 165 to 28. As expected, sales dropped from $8 million to $2.5 million, but within a year, the company started to turn a profit and gain a reputation with larger corporations, including Rockwell International and Fairbanks Morse, for its ability to help out in a crunch with excess work.
For the next five years, Steel Products' cash flow remained good, but sales have been relatively flat, Welsh admits.
"It's difficult to anticipate a problem when you don't have a problem," he says.
Welsh, who came on as the full-time president and CEO this year, is again leading the company into a new, critical stage.
"One of my biggest mistakes in the past was thinking that if we were servicing customers and delivering the product, business wouldn't go away," he says.
Welsh recently implemented a new marketing plan in attempt to spark new business. He no longer assumes today's customers will be there tomorrow.
The company's management is building relationships with existing customers by offering product consultation and referrals on services Steel Products no longer provides, and it's using hit lists to prospect for new customers -- something that was never even thought of before.
Vice President and General Manager Lew Nelson has made it a regular part of his job to visit existing and prospective customers' plants to determine where Steel Products' services could fit in with their machinery needs.
By simply talking with customers, peers and consultants, Welsh found that customers actually wanted a broader relationship from the company.
"We're not trying to be just a machining shop," Welsh says, "we're trying to be a partner.
"It's not scientific. It's figuring out what you do well and going after it." How to reach: Steel Products, (330) 688-6633
Connie Swenson (firstname.lastname@example.org) is editor of SBN Magazine.