Joan Wall

Tuesday, 23 October 2001 10:49

Make it quick

It looked like a big break.

Ed Tromczynski, president and COO of PlanSoft Corp., had nailed an appointment at a giant Wall Street investment firm, Patricof & Co. Ventures Inc.

Heading off to New York with his business plan, a projector, laptops and a PowerPoint presentation, he and his managers sat down in front of Patricof executives to request funding for their company, a provider of e-commerce solutions for the convention industry.

"Literally 17 minutes into the presentation, the main guy stands up and says, 'Thank you for coming in,'" Tromczynski remembers. "He must have seen fire in my eyes, and he said, 'Hold on. You guys have made it to the next level.'"

Tromczynski's presentation was so polished that he had won the deal in those few minutes. Inviting PlanSoft back for another meeting, the man continued, "Unless something goes hairy, we'll invest in the company."

Sure enough, Patricof has invested twice, plunking about $8 million into Twinsburg, Ohio-based PlanSoft.

Tromczynski credits Innovest, an annual Ohio venture capital conference, for helping to hone his skills of getting investors interested in his company -- and he's received more than $50 million in funding.

He learned to gear his presentation toward what investors want to know: The size of the market, the portion of that market your products can penetrate, the quality of your management team, your competitors, your partners and how quickly the market will adopt your product. Miss any of the points, he says, and you're out of the running.

"What Innovest ends up being for an entrepreneur is a boot camp in terms of it preparing you to hit the fund-raising trail," he says, referring to the preparation, rehearsal session, critique and trade show experience required of all presenters at the event.

"We go to kind of tune up our game, and we go to build up real strong relationships," Tromczynski says, noting Innovest has such benefits even though PlanSoft did not receive funding as a direct result of the event.

Entrepreneurs and investors alike have discovered the same: Innovest isn't just about the money.

William Custer, president and CEO of New Albany, Ohio-based Custer Capital Inc., has sponsored the event in the past and attends because of the "relationships, networking, meeting new people, sharing some best practices with what works and what doesn't work for our organization, keeping a pulse on what's happening in the area."

Bill Troy of Troy Research, a Bexley, Ohio-based company selected to present its business plan at Innovest 2000, found Innovest to be a valuable exercise because through it, he realized he did not want to seek venture capital after all.

"We decided to stop looking for funding as we learned more about the situation that would be required to do that," he says, noting the venture investment required him to give up a lot more of his company than what made him comfortable.

In fact, he decided to obtain a bank loan because of how interested lenders were in his company after the Innovest presentation.

"They said, 'You guys are generating cash here. You're an ideal candidate for a debt alternative in addition to or instead of equity financing,'" Troy says.

Like Tromczynski, Tim Bartlett, CEO and president of Columbus-based eGovNet Inc., did not raise any of his $5.5 million in funding directly through his Innovest presentation in 2000 but did find the event helped him refine his business plan and selling skills.

"Unless you have an antigravity machine today or a golden goose, if you will," Bartlett says, "I think you need to show very achievable milestones and reach those milestones to show investors that you're not a one-trick pony."

How to reach: Ed Tromczynski, PlanSoft Corp., (330) 405-5555 or www.plansoft.com; William Custer, Custer Capital Inc., (614) 855-9980 or www.custercapital.com; Bill Troy, Troy Research, (614) 231-7135 or www.troyresearch.com; Tim Bartlett, eGovNet Inc., (614) 509-4868 or www.egovnet.com

Joan Slattery Wall (jwall@sbnnet.com) is associate editor of SBN Magazine in Columbus.

Tuesday, 23 October 2001 10:48

Good riddance

Kenn Fulk decided it was finally time to draw the line.

For the second time, Sterling Commerce Inc.'s Finance and Administration Systems department had outgrown its space and was moving.

Fulk, director of the department, was once again facing the task of storing the department's 300,000 pages of files. He'd have to build rolling files into the new space, at a cost of $50,000.

"We said, 'Enough is enough,'" Fulk says.

He found out Columbus' Fireproof Records Center had the capability to electronically image all the documents, and intellinetics Inc. in West Columbus had a software product called intelliVUE that would digitally process, store and manage large quantities of documents while making them Web-based and accessible to Sterling's 600-strong sales force in the field.

The sometimes major production of finding, copying, refiling and faxing a file suddenly became a one- to two-minute task that could be completed right from the employee's desk.

Matt Chretien and his father, Mike, founded intellinetics about 10 years ago, at first focusing on software for data and document management for the public safety market but later adding corporate clients and other federal, state and local government entities.

"IntelliVUE enables organizations to reduce or eliminate costs related to traditional records management," Chretien says. "And probably more important today, it allows organizations to enhance existing service levels and/or create new service abilities."

Sterling's cost to implement intelliVUE was $45,000 -- less than the structural improvements Fulk would have had to make for the rolling files.

Chretien says costs vary greatly from client to client because of three main factors: document volumes, the client's available technology and any necessary integration with other systems. In addition, some clients, like Sterling, find their own source to electronically image their documents, while others choose intellinetics to handle the entire process.

For Sterling, even just going through the set-up process would provide a benefit: The department would be able to clear out and organize the files.

"Instead of taking one or two people to do it, we spread it across 600 and allowed the problems to be identified by the users," Fulk says. "We did find out what kind of state our files were in, and it also helped us develop document flow processes to make sure we had more accurate information."

Other benefits:

* The risk of someone misfiling a paper document was eliminated, and the documents would not deteriorate and could not be modified. "All the issues that come back with handling hard copies kind of disappeared," Fulk says.

* The product was simple to install and use, yet it allowed Sterling the capability to fax documents directly to a customer -- without ever touching paper.

* "We did a training session that must have lasted all of about 20 minutes," Fulk says. "We just set people loose on it because it's sort of intuitive."

* Sterling trained about 10 people originally; they shared their knowledge, as did others, until all 600 could use it.

* The ability to enlarge contracts that were often in very small print let the sales force eliminate uncertainties that could have been caused previously by the document quality.

* The process gave Sterling more backups of its documentation, previously available only on paper.

* Temporary employees who spent the majority of their time working with files now are put to better use in other functions, such as collections.

Sterling is moving to electronic document management in its other operating groups, which were consolidated into one with Sterling's acquisition last year by SBC Communications. Sterling is switching to a new image-viewing application and document-management system from a company in Dallas. The new system will, among other benefits, allow its contracts group to work with contracts online.

The new application also happens to be the most widely used application for legal firms in the United States, Fulk says, so the company knew it would have support in any location.

In all, about 1 million pages of documents will be available on the system.

"The total cost, when all is said and done, for the million documents accessible worldwide via the Web with security -- hardware, software, training and all," Fulk says, "will be under a quarter million dollars." How to reach: Kenn Fulk, Sterling Commerce, 793-3740 or kenn_fulk@stercomm.com; Matt Chretien, intellinetics Inc., 921-8170, matt@intellinetics.com or www.intellinetics.com; Fireproof Records Center, 299-2121

Joan Slattery Wall (jwall@sbnnet.com) is associate editor of SBN Magazine in Columbus.


How it all stacks up

* The average document is copied 19 times.

* White collar workers spend 70 percent of their time processing paper.

* Prevailing private industry estimates indicate that a worker performing in a typical department will take 12 minutes to process a document. Nine of the 12 minutes are spent searching for, retrieving and refiling the document, while 3 minutes are spent processing it.

* It is estimated that electronic document management technology will reduce time spent on nonproductive activity by as much as 75 percent.

* American businesses generate more than 2.7 billion sheets of paper that go into file folders every day. On average, the number of active files is growing 25 percent annually, and record storage costs are doubling every year. Source: Matt Chretien, president, intellinetics Inc.

Tuesday, 23 October 2001 10:48

Pay your way

State Rep. Geoffrey Smith, R-Columbus, wanted to be prepared for an upcoming speaking engagement at which he knew health care would be a prominent issue.

A new Web site allowed him to research the topic at one location -- an important factor, considering he had only one night to find out the positions of organizations such as Medical Mutual of Ohio, the Ohio State Medical Association and the Ohio Hospital Association.

"I looked up each one of their stances on the different bills, such as patient access and prompt pay issues," Smith says of his visit to Capitolgate.com. "I didn't have much time, so I couldn't get them on the phone. But I had a prepared statement right in front of me, so if something were to come up, I was prepared."

Capitolgate.com was launched in April as a one-stop resource for legislators and their staff, says founder Dan McCarthy, who also serves as president of The Success Group Inc., a government affairs firm based in Columbus.

"What this means for businesses is that for the first time, there's an opportunity to deliver and provide information directly to policymakers electronically," McCarthy says. "Really it's for anybody who has an interest in being known to state policy makers."

But only if those businesses are willing to pay for that privilege.

Although McCarthy declined to give exact costs for businesses or associations to post information on Capitolgate.com, he says the pricing structure is not out of line with what clients would pay for newspaper and magazine advertising.

"In some ways, that's what it is," McCarthy says, "a targeted advertising for clients."

Todd Baker, Capitolgate's CEO, says businesses and business associations can use the site by:

* Taking a position and advocating for their point of view on a particular subject, and explaining how it will affect their business or industry.

* Becoming a resource for legislators on those issues by providing background information.

* Sharing, in general terms, information about what's going on in their industry at any given time.

Ameritech, for example, uses the site to provide general information about the company and post its stance on issues including telecommunications competition.

Legislators and their staff can view the site for free, as can anyone.

While Capitolgate.com does not track individual users of the site, its hits indicate activity from statehouse offices was about 35 percent of the total traffic -- 24,578 pages viewed -- during its first month.

Rep. Larry Wolpert, R-Hilliard, has not used the site to do research for legislation but visits it every day to read about Statehouse news and see profiles of legislators, staff members and representatives of advocacy groups.

"It's a very complex business we're in, and it's nice to have one single source of information that's very concise and very knowledgeable," Wolpert says.

About a month after the site's launch, Carol Caruso, executive director for government relations for the Greater Cleveland Growth Association, and Chris Hess, the association's manager of political education and development, said they had already heard from members of the General Assembly who had accessed the site.

"Even though we have a representative in Columbus, and Chris and I try to get down there when we can, this is daily," Caruso says.

Her association is one of the site's founding partners.

Other Capitolgate.com participants -- there were about a dozen two months after the site launched -- include Fraternal Order of Police of Ohio Inc., FirstEnergy Corp. and Children's Defense Fund - Ohio.

"We're hoping that, as we get our information on the site, we become experts (and) legislators will want to come to us for information on how small business owners will be affected," Hess says. How to reach: Capitolgate.com: Todd Baker, (614) 222-2573 or tbaker@capitolgate.com, and Dan McCarthy, 232-8304; Carol Caruso and Chris Hess, Greater Cleveland Growth Association, (888) 304-4769, ext. 2347; Rep. Geoffrey Smith, (614)644-6005; Rep. Larry Wolpert, (614) 466-9690

Joan Slattery Wall (jwall@sbnnet.com) is an associate editor and statehouse correspondent for SBN Magazine.

Tuesday, 23 October 2001 10:48

Covering your bases

Even though it's a part of his daily business, Terry Kelso can't help but be aghast every time he sees the costs of health care.

The president of Associated Insurance Agencies Inc. in Westerville particularly remembers when his wife was in the emergency room of Riverside Methodist Hospital for a couple of hours for treatment of a kidney stone. The bill: $2,700, not including the doctors, medications and tests.

"I see what the premiums are," he says, "but I see, good grief, $2,700 just to be there? You didn't even get a cookie, you know."

The costs make insurance premiums look like a pittance -- although business owners are struggling even with those.

Kelso says small firms are highly unlikely to even have disability coverage, but they may need it most considering what would happen if the owner of a one- to three-person company were injured.

A study released this spring showed 82 percent of workers either have no long-term disability income coverage or have coverage they believe is inadequate. Fifty-nine percent of participants in the study, sponsored by the Consumer Federation of America and the American Council of Life Insurers, said they are covered either by group long-term disability income insurance or an individually purchased policy.

Kelso says for the most part, you will be limited to replacing 60 percent of your income with the insurance.

"The reason for that is you've got to understand the amount you're going to receive is a totally net amount. There isn't going to be tax or anything taken out," he says. "So if you pay taxes and Social Security, that 60 percent is still going to put you pretty close to where you were."

His advice regarding disability insurance:

* Be aware of variations in plans that can change your premiums.

For example, you could choose protection for a period of months, such as 24, or coverage until you turn 65. Your occupation will determine whether you're at greater risk of being disabled -- hence, higher premiums.

"You can also choose an elimination period," Kelso says.

That's the number of days you feel you could go without an income before the insurance kicks in.

As an example, he says a 33-year-old male who opts for a 14-day elimination period and coverage until he is age 65 would pay about $50 per month to receive $1,000 of monthly disability income. If he chose an elimination period of 90 days, he'd pay about $30 per month.

* Consider a group plan, which could save 20 to 25 percent over an individual plan.

* Follow the rules. Group coverage, Kelso warns, has a catch: In order to have it, all employees must be covered. Employees can waive coverage, but your rates will be determined based on all employees who could be covered -- even family members.

* Get regular checkups.

"Periodically, I don't think every year, but periodically, I think you need to shop the plan, because there's newer, bigger, better things happening all the time," Kelso says.

Like most business owners, Kelso struggles with the increasing costs of health care for his 23 employees.

His only other advice: "Stay healthy," he says bitterly. "If you'd see some of the bills that some of these companies incur, it's just incredible. I don't know who to begin to blame. Doctors are obviously part of it, facilities are part of it, drug manufacturers are part of it," he says, adding that prices are also affected by legislated mandates and recent Ohio Supreme Court decisions.

"It has been going up for about a year," he says. "I don't think we've seen anything come in (at) less than a 20 percent increase, and it's still going strong." How to reach: Terry Kelso, Associated Insurance Agencies Inc., 882-2335 or www.associated-ins.com

Joan Slattery Wall (jwall@sbnnet.com) is associate editor of SBN Magazine in Columbus.

Tuesday, 23 October 2001 10:47

Hiring freeze

When R. Blane Walter persuades out-of-state executives to join his company, he knows he's won only half the battle.

Sure, the candidates might be as gung-ho to join Gerbig Snell/Weisheimer & Associates Inc. as Walter is to bring them there, but they've also got to feel comfortable in Columbus.

The move, after all, might be a lifestyle change compared to Chicago or the East or West coasts, places Walter finds many recruits for his Polaris-based health care marketing company.

Walter, GSW's chairman and CEO, says such recruitment efforts are no different than any of the other marketing challenge his company handles every day.

"These interview processes are as much about selling," Walter says, "as they are about interviewing."

He ought to know. Last year alone his company hired 270 people -- 20 to 25 percent of them from out of state -- bringing GSW's employee count to about 530.

"There was a time when four days a week I was having dinner with different families," he says of the company's fast growth. During one 120-day period in 1998, he notes, GSW hired 120 people.

In the past two years, the company's retention rate for executives at the vice president level and above has been better than 90 percent. Of those, more than 75 percent were recruited from out of state.

Walter says he'd much prefer to hire candidates from Columbus, but his company's fast growth in such a specialized niche forces him to look elsewhere.

What he's learned in the process is that the best way to do out-of-state recruiting is to give candidates as much information as possible and answer their questions not only about the company but about Columbus -- then step aside and let them mull it over.

"We understand it's a big decision," he says.

Get their foot in the door

Three years ago, Mark Frank, now an executive vice president and general manager at GSW, received a call from a recruiter who wanted to talk to him about GSW. Frank was happy in his position as a marketing director at a New Jersey-based pharmaceutical company called Novartis, but the recruiter piqued his interest by describing GSW's rise in the industry and philosophy of building the company with employees who have client-side expertise.

"He just described an organization that had a particular personality, a particular style, a particular aggressiveness that really appealed to me," Frank says.

GSW enlists Taylor Search Partners LLC, based in Columbus north of Worthington, to help in recruiting.

Bill Taylor, the recruiting firm's president, says wooing a potential employee depends heavily upon how the company presents the open position.

"Focus as much attention as you can on the position you're trying to fill and create as much attraction or sizzle to that to make it more of a dream or an opportunity and not just a job," he says.

Once a candidate shows interest, it's time to start selling Columbus.

"I would say half the people said, 'I don't even want to consider Columbus, Ohio. I have an aunt who lives there. I got stuck in the airport once. But beyond that I'm not really interested,'" Walter says.

For the other half, who do express an interest, Walter has got his work cut out for him.

First, he invites candidates in for a Columbus interview, during which he tries to arrange meetings with as many people as possible, including employees, executives and clients.

"It's all hands on deck," Walter says.

Once Walter knows he'd like to make an offer and sees the candidate is interested, he's likely to put the brakes on the process.

"We often give them offers contingent upon their having spent a weekend in Columbus," he says, adding that the visit should include the candidate's family.

Tell it like it is

Frank was one of those candidates whom Walter insisted visit Columbus with his wife before a job offer was made.

The couple had a nonwork-related dinner out with GSW executives and was introduced to a real-estate agent who took them around the city. The agent told them about areas to live in, school districts where they could send their two children, then ages 2 and 5, and where Frank's wife might consider continuing her teaching career.

"You know there's a big sell going on, but it was a take-a-look-and-ask-questions (situation)," Frank remembers.

He and his wife certainly weren't sold on the weather -- they visited on rainy days in March when the temperature dropped low enough for a little snow.

"We were really turned on by just the way people were open and really honest and forthright," Frank says. "I was really convinced by getting to know the people out here."

That's exactly why Taylor's company arranges community tours through Elizabeth Ortlip & Associates Inc.

"We really are their first nonbusiness contact," Ortlip says. "It's more of a peer-on-peer kind of thing. It creates an element of trust and comfort. They feel free to ask questions that they might not want to ask a company they're interviewing with."

Another participant in GSW's recruitment efforts is Charlotte Van Steyn, president and broker of the Re/Max Premier Choice franchise.

She uses a software system that compares the school system candidates are leaving with that in Columbus and sends them a relocation packet which includes a breakdown of all Central Ohio communities and their amenities, cultural aspects, economics and tax information.

"Columbus is a real easy city to sell," Van Steyn says. "You know why? Because of the relationships here. People in Columbus are very receptive to new relationships, and I think that's a key factor when people are moving into a new area with their families."

When candidates visit Columbus, she spends three to six hours showing them various communities and available real estate.

While the practical side to recruitment is essential, Taylor points out the success of the effort depends greatly on the company seeking the new employee.

"In my mind, you can provide all these services," Taylor says, "but if these people do not feel the connectivity or they don't feel wanted, they're not going to be interested."

In fact, Walter says, a candidate's likelihood of accepting a position at GSW is in direct proportion to the amount of time and senior executive attention that go into the recruitment effort. The candidate perceives such attention as an indicator of what he or she might expect once hired, he says.

"In our business, we believe people decide to buy on the emotional reasons and then kind of put them in check with the rational reasons," Walter says.

Don't drop the ball

Once an out-of-town candidate accepts a job offer in Columbus, Taylor suggests helping ease the transition by providing information about services, such as banks, insurance companies and utilities.

GSW's recruitment efforts have been very successful -- 90 to 95 percent of those offered positions accept. Part of that is due to the wealth of information provided to candidates, Walter says.

"They've already figured out most of what they'll encounter before they've joined us," he says.

Frank agrees.

"The nice thing was I think that expectations were managed very well," Frank says of his recruitment experience. "There's no disappointment: 'Gee, I thought this.' This isn't New York City. If you're looking for a New York City style here, it isn't here."

Although Frank quips that he'd like to see in Columbus a 24-hour diner, an outlet for Ben & Jerry's Ice Cream and some hills -- "Columbus is really flat. I'm trying to arrange to have some mountains put in" -- Frank says he had no regrets after he moved here.

The other big factor in GSW's recruiting success is the recent growth of Columbus. In the last five years, Columbus has had more to offer, for example, in the way of entertainment. GSW has also grown tremendously and had noted success and recognition in the industry. In addition, as the company grows, there's more of an opportunity for candidates to get input from GSW employees who already have moved to the area.

Remembering his own recruitment to GSW as an example, Frank says he now uses the same strategies when he's filling positions for his own team at GSW: be open and honest about what's here and what's not.

"If you're hiring a really good person and they're smart, they're going to figure it out anyway," he says. "It's nothing to be afraid of with what we can sell from the Columbus area. There's no reason to be embarrassed -- there is a ton here to do." How to reach: R. Blane Walter, Gerbig Snell/Weisheimer & Associates Inc., 543-6418 or bwalter@gswa.com; Mark Frank, Gerbig Snell/Weisheimer & Associates Inc., 543-6280 or mfrank@gswa.com; Bill Taylor, Taylor Search Partners, 436-6650; Elizabeth "Betsy" Ortlip, Elizabeth Ortlip & Associates, 899-6386; Charlotte Van Steyn, Re/Max Premier Choice, 436-0330

Joan Slattery Wall (jwall@sbnnet.com) is associate editor of SBN Magazine in Columbus.

Tuesday, 23 October 2001 10:47

Tom Rausch

You don't have to tell Tom Rausch about the significance of change in a business organization.

After all, he's adjusted the sails four times at Interactive Ink Inc. to deal with the unpredictable winds of the technology industry.

Now, he's actually encouraging the 28 employees of his $2.8 million, e-business consulting and technology firm to avoid smooth sailing.

When his wife, Kathy, founded the business in 1994, its focus was dinosaurs -- Theo the Dinosaur, to be exact, who was a character in the new-media programs the company produced for children.

In just a couple of years, however, the publisher, Panasonic Interactive Media, cut off business with small developers, taking away nearly 95 percent of the Rausches' business.

"In about 1997, we went from flying high with them to our revenue stream gone," Rausch says, admitting that although they saw it coming, they had only just started to prepare for the loss. It was the only year the company was not profitable.

Since then, Interactive Ink has continued to change with the industry, moving from Web site development to interactive marketing. Now, it is a consulting firm working to show clients such as J.C. Penney Co. Inc., Lockheed Martin Corp., Fortin Ironworks and CrimsonCup Coffee Roasters how to integrate e-business to help run their companies.

"We believe the 'e' is going to go away from 'e-business' and it's just going to become 'business,'" Rausch says.

Interactive Ink is using its years of flexibility to welcome change within, thanks in part to a relationship with national speaker Lou Pritchett, author of "Stop Paddling and Start Rocking the Boat." When company executives met Pritchett at a seminar hosted by Commerce National Bank, they asked if he needed a Web site. He did. They developed one in exchange for a private, day-long seminar and workshop conducted by Pritchett on the subject of change management.

The result: Interactive Ink has "Boat Rockers" -- committees of employees who come up with ideas on topics such as branding, customer service, fun and community involvement.

One of the Boat Rockers' first moves was to implement a database-driven survey of every customer to monitor quality.

"They're doing so much, and I don't even have to think about it," says Rausch. "I don't have to do anything."

Rausch would rather have involvement with his employees -- and other business owners -- in another role.

"I think the main job of a manager is to mentor," he says.

Walter Doyle, president of Forest Capital and an investor and board member of Interactive Ink, calls Rausch a "real motivator of his people."

"His troops are so excited," Doyle says. "People under a manager take the lead from the personality and the person at the top. His organization does great things."

Getting employees involved, Rausch says, does two things. First, their work becomes much more multifaceted, and second, they feel they're making a contribution to a team and having their voice heard.

Employee development is strong, from quarterly reviews and discussion of leadership books to a personality profile test taken by everyone to learn the best way to communicate with each other.

"That's another thing I find gratifying is when people say, 'I'm learning every day here,'" Rausch says.

In fact, he's trying to structure the company and its management in such a way that he can spend half of his own time doing community relations about business processes and employee involvement.

"I had him speak on search-engine optimization and, even more recently, on e-mail marketing," says Interactive Ink client Rich Ottum, corporate vice president for new media at Highlights for Children Inc.

Ottum also points out Rausch's involvement as a volunteer speaker and mentor for the Small Business Development Center and a member of the Greater Columbus Chamber of Commerce's Small Business Council.

It's not just business where Rausch makes his mentoring mark. As co-chair of the Rotary District 6690 youth exchange, he's responsible for bringing more than 30 exchange students from other countries into Ohio and sending another 25 or so abroad each year, says Dave Kott, president of the Rotary Club of Westerville Sunrise and president of Asset Management Consultants Inc.

Kott relates a story of Rausch telling Rotary members about a Colombian student who had come into hard times because his father lost his job.

"When he was speaking to our club, he was speaking from the heart, which was pretty impressive to me," Kott remembers. "We ended up raising over $500 to help him out."

Rausch's family has hosted exchange students -- an experience Rausch says has given him insight. He watched his son, Ian, return from an exchange program in Ecuador with a new sophistication after seeing riots and living with a multimillionaire. His other son, Eric, is headed for Costa Rica this year.

"I have so much respect for these kids," Rausch says. "As outgoing as I was as a kid, I don't think I'd have had the guts to go to a totally different country, with a totally different language, with a totally different culture. When they come back, they see a wider range of possibilities of what they can do with their lives and the world."

It's a view Rausch tries to share with his employees and others.

"Life is too short to walk through it in quiet desperation, like Thoreau said. It doesn't take much to find out what juices you and go after it," Rausch says. "That's what I get the most out of in this current position, is helping people grow." How to reach: Tom Rausch, Interactive Ink Inc., 221-7089, ext. 20 or tom@interativeink.com

Joan Slattery Wall (jwall@sbnnet.com) is associate editor of SBN Magazine in Columbus.

Tuesday, 23 October 2001 10:47

Michael Leaventon

Michael Leaventon calls it just "a nice, long weekend to move my stuff."

Still, you can't miss the significance of Independence Day 1996, when he was sent by his family from Northeast Ohio to the Columbus area to lead a second printing company.

"I came down to Columbus to be our plant manager and within a couple of months took over the whole operation," says Leaventon, who was just 25 at the time.

Since he was 13 years old, he has been working with the family business.

"I started sweeping the floors and emptying the garbage cans," he says.

He's come a long way in his current post at Precision Printing Co. of Columbus Inc.

"When I took over, we had 16 employees and did under $1 million in sales," he says. "Now we have 45 employees and will do about $5.5 million in sales this year."

Growing the company so much obviously required significant changes in the 16-year-old Columbus operation.

First, Leaventon has focused more on advertising agencies and business-to-business direct marketing and direct mail for his client base.

"Columbus is kind of a unique market compared to most," he says. "A lot of the print dollars are controlled by the advertising agencies in Columbus. We identified that as an area to grow in."

He also added sales representatives to help carry out the company's goals.

A more daring step, perhaps, has been Leaventon's investment in new technology and new equipment.

In January 2000, he spent $700,000 on prepress equipment and computers, and early this year invested a whopping $2.5 million in a new press.

These were scary moves, he admits, but the company's success -- an average of 37 percent growth in each of the past four years -- gave him confidence. In turn, he's gained the confidence of clients such as Safelite AutoGlass, the Greater Columbus Chamber of Commerce and the Ross Products Division of Abbott Laboratories.

He also understands the advantages of working in a family business. His father and uncle run the Brecksville, Ohio, operation, so he often calls on them for advice.

"In general dealing with him, he's always very conscious of his relationship with his elders," says Gary Shamis, managing partner of SS&G Financial Services Inc., which serves Precision Printing. "His uncle and his father have been with the company 30-plus years. He's still very respectful to the relationships, always has been.

"I think that's just a sign of his maturity. He's not a know-it-all; he definitely relies on the experiences of others," says Shamis, who also serves on Leaventon's board.

Leaventon calls Shamis the person he admires most in business.

"I think he's really good at being a 1-minute manager," Leaventon says. "He taught me to hire good people and let them do their job. That's a difficult thing to do. I can't say I've mastered it, but it's an important lesson to be told."

Leaventon also gains knowledge through his memberships in the American Marketing Association and the Advertising Federation.

He's also quick to share his expertise with others. This year, he received an Involved Member recognition from the Westerville Area Chamber of Commerce, where he serves on the board of trustees.

For the past four years, he's served on various committees for the chamber-sponsored Westerville Music & Arts Festival, of which he'll be chair next year.

"He's quiet, but a doer," says Westerville chamber president and CEO Janet Davis. "Even in board meetings he's quiet, very methodical. When he expresses his opinions, they're usually very well thought out."

This year Leaventon was instrumental in helping festival organizers determine where to locate the artisans and musicians in the festival's new location.

Davis surmises that Leaventon's success as a business person comes from his commitment.

"What he says he's going to do, he does it," she says, adding, "He has very willing staff; they're very positive. To me that's a reflection that he must have a good work environment."

Shamis doesn't see Leaventon as quiet but, rather, cautious in new relationships or situations.

"He kind of takes it all in before he reacts," he says.

"The impression I get about him is that he's a lot wiser than his age would lead you to believe," Shamis says. "Everybody makes mistakes, and I'm sure he makes his share of mistakes, but in his enthusiasm, his passion, his instincts for business, I think you see a very capable, well-matured business person in a very young individual." How to reach: Michael Leaventon, Precision Printing Co. of Columbus Inc., 794-3555 or mleaventon@precisionprint.com

Joan Slattery Wall (jwall@sbnnet.com) is senior editor of SBN Magazine in Columbus.

Who do you know?

Central Ohio business owners with exceptional business and community accomplishments are prime candidates for "Who to Know." If you know a local entrepreneur who is active in the community and whose company is at least three years old, profitable and generates more than $1 million in annual sales, contact Senior Editor Joan Slattery Wall by phone at 428-2648 or by e-mail at jwall@sbnnet.com.

Tuesday, 23 October 2001 10:47

Improve your prospects

Some of Nancy Barr's most important lessons in client relations have come from listening to those who have left her competitors.

"A common thing we hear is, 'The service was not great,'" says Barr, president and COO of Lord, Sullivan & Yoder Marketing.

The comment reminds her of a rule she uses when dealing with her clients: Don't get complacent.

"Always treat your clients you've been working for for a long time as if you were trying to gain their business," she says -- and treat the client's business as if it were your own.

Finding out what went wrong previously is just one step in Barr's formula for prospecting new business. Doing your homework before you approach prospective clients, she says, makes it easier not just to gain their business, but to keep it.

It's an important step for a company like LSY, which handles ongoing needs for many clients as their agency of record.

"We've been very fortunate in retaining those relationships, and some of them are very long-term relationships," Barr says. "We have a client in Maryland we have had for 36 years."

Barr says one of the most important things you can do before you solicit a clients' business is research --not only about their company, but also about their industry.

"Understand the dynamics of the arena in which the prospective client is striving every day," she says.

This means learning about the marketplace, the competitors and the brand of your prospective clients, as well as how they differentiate themselves from their competition.

Here are some methods she uses.

* Ask a lot of questions.

"Generally when you're going after a piece of business, you have a contact at that business," Barr points out. "They're generally helpful because they want to find the best partner they can find."

Also consider talking to the company's customers or sales force.

"You just need to make sure you're not stepping on anybody's toes, so we usually ask permission from them," she says.

The situation is easier if you're responding to a request for proposals.

* Find out about the individuals you would be working with if you win the business.

"If you find out how they like to work, then you have a better chance of establishing a comfort level," she says. "For example, if they're hard-charging and you're the leisurely type person, it may not be a good match."

* Be flexible.

"I think sometimes the way companies approach prospective business is maybe too rigid," she says. "We always try to approach prospective clients with a degree of flexibility ... to let them know we will tailor our working arrangements."

* Find out what their biggest and most urgent needs are, even if those needs fall outside your expertise.

"Sometimes we run into a situation where the one most urgent thing the company is dealing with is they're trying to hire someone," Barr says. "We are not recruiters, but we have many times made recommendations."

For example, a resume may come across her desk for a position she does not need to fill, so she passes it along.

"Sometimes you have to go outside your immediate area in order to go the extra mile," she says.

* Most important, be sincere with potential clients, and show them you're passionate about your work.

"I think when a client understands you are critically interested in helping their business grow," she says, "there's a comfort level." How to reach: Nancy Barr, Lord, Sullivan & Yoder Marketing, 825-1816 or nbarr@lsy.com

Joan Slattery Wall (jwall@sbnnet.com) is senior editor of SBN Magazine in Columbus.

Tuesday, 23 October 2001 10:47

'Gorilla' marketing

When Kelly Borth's boss at the time, Sandy Fekete of Fekete + Co., gave her a newsletter about agency management more than 10 years ago, she tucked it away.

Someday, Borth thought, she might use the information if she started her own marketing agency.

Since then, Fekete has merged her public relations and marketing company with The Axis Group and Borth has taken the reins at GREENCREST, but still the faded newsletter remains.

Inside is a description of an ideal client mix, complete with a pie chart suggesting client ratios: one client delivering 25 percent of total agency income, two delivering 12.5 percent each, four with 6.25 percent each and eight with 3.125 percent each.

Developed long ago by PR guru Chuck Bowes, it's a formula for balance Borth uses to make sure she has a stable, steady income for her company. Although she declines to state revenue, she says the company's average annual gross sales increase between 1997 and 2000 was 17.33 percent.

"You just don't want to have any one client make up the majority of your sales base," Borth says. "You don't want that gorilla client."

Of course, GREENCREST's mix doesn't match exactly because it has 50 clients rather than the 15 suggested in the chart, but Borth stays above the minimum and below the maximum client size. She's constantly marketing the company and has potential clients in mind, so if she ever loses a client, she's ready to fill the slot with another.

"We've developed enough of a reputation that we can at least meet face-to-face with a company we may like to do business with," Borth says. "We're firm believers that any company should be marketing themselves all the time -- not just in bad times. If you're doing that ,you always have opportunities pending."

Using the formula for balance brings more than just a source of security for Borth:

* She's able to offer more job security for employees.

"We have never hired a new employee because of a new account we've taken on. We've never laid off an employee because of a loss of business," Borth says.

She also can maintain a fairly normal working day for the employees she has.

"You don't find people working here until midnight or 10 o'clock or even 8 o'clock most of the time," she says. "It gives them a better quality of life."

* Focusing on the right client mix has enabled GREENCREST to offer higher quality work, Borth says.

"It allowed us to have time to be strategic and proactive, not reactive. We wanted to be their strategic partner, not their job house," she explains.

The balance also helps Borth watch out for clients that might keep her employees too busy with smaller, more frequent tasks rather than strategic planning. For example, she'd likely turn down business from a car dealership that needed a retail ad placed in newspapers every week; it would be too disruptive for her company.

"We've been in situations where certain clients have caused us to put other clients on hold week after week after week," she says.

* Following the formula forces Borth to take a frank look at what's good for the business.

In 1998, for example, she realized that more than 25 percent of her clients, then numbering about 80, each gave her less than 3.125 percent of her sales base.

"We began to see there was some business we needed to let go of, and we needed to really search for those businesses that would fill the top," she says.

From a new business standpoint, she began to turn away clients that were not looking for a full-service relationship with GREENCREST.

While she did not flat-out stop doing business with the clients giving her small pieces of business, she let them fall away over time.

"What you hear is true that sometimes the smaller the business, the more handholding, the more time it takes to service it, and you're probably losing money on some of that," she says. "What it does is it keeps you from really being able to focus on some of the business you really want -- the business that's going to help you grow your business."

Instead, she's referred that business elsewhere or offered advice pro bono over a lunch meeting.

She knows her limits in the other direction, too, however. If a new client would require her to staff up for its work, she'd probably turn the business away.

Using such a formula requires an intense review, which Borth does every January and July.

"You have to be conscious of where you're at," Borth says. "You have to be conscious of what you're looking for in terms of new business." How to reach: Kelly Borth, GREENCREST, 885-7921 or gcm@greencrest.com

Joan Slattery Wall (jwall@sbnnet.com) is senior editor of SBN Magazine in Columbus.

Monday, 22 July 2002 10:10

Staying 'inn' the game

Staying 'inn' the game

Customers were giving it straight to Red Roof Inns CEO Francis W. "Butch" Cash: It was time for a change. Here's how Cash listened to them and invested $68 million to renovate all 231 inns nationwide to improve customers' view of his product and stop a downward slide in occupancy rates.

By JOAN SLATTERY WALL

When Francis W. "Butch" Cash joined Red Roof Inns Inc. as president and CEO in July 1995, one of the first things he saw was a red flag.

Cash had come to Hilliard-based Red Roof Inns with experience as an executive vice president at Marriott Corp., which focused on customers' wants. At Red Roof Inns, however, he found that the basic philosophy was to be the low-cost provider-and to be consistent.

Cash notes: "As a guest said to me one time, 'When you wake up one morning in a Red Roof Inn, you might not know what city you are in, but you know you're in a Red Roof Inn.' "

But that philosophy of uniformity, alone, wasn't pleasing the customer.

Research indicated the company was starting to slide in some of the ratings, such as room appearance and security issues, says Cash.

Cash, who in 1996 assumed the additional position of chairman of the company, knew he'd have to make changes to keep the chain competitive-big changes-before the situation worsened.

So he initiated Big Red, a $68 million project to upgrade and renovate all 231 inns in the chain over a two-year period. The cost of the renovations in 1996 equaled 5 percent of the company's revenues, while the greater portion, spent in 1997, equaled 15 percent.

Cash spent a year and a half researching the needs and convincing his board to support the project before bringing it to fruition. It was a gamble, to be sure, since the payoff was not guaranteed. He carefully weighed the risks and potential rewards and then mustered up the courage to climb out on the limb.

"If you feel that it's the right thing to do, you've got to go with your gut," he says. "You never get to the point where you're 100 percent sure, 100 percent confident that this is going to work. You have to study it. But there's a point in time where you have to say, 'Here's what we've got to do.' "


Hour of reckoning

Red Roof Inns' customers saw the truth: The chain had a good product, but it was dated-by nearly 10 years.

The decor hadn't changed since 1987. Despite no evidence to support it, guests perceived that the inns were less secure than competing inns because of the dark colors and dimly lit surroundings. Even inn managers complained that the old brown carpet never looked acceptable, no matter how many times it was cleaned.

These managers relayed to Cash what they had heard from guests. In fact, because customers said Red Roof didn't look as good as its competitors, inn managers told Cash they were uncomfortable charging the existing room rate.

Red Roof was also falling behind in its pursuit of executive guests.

"Our Business King room was, 10 years ago, the best room available for the business traveler," Cash says. "Over time, our competition caught up with us."

In the spring of 1996, Cash set out to convince his board of directors of the need for change-change he calls a defensive move rather than one justified by an immediate return on investment.

"When we went to our board we said, 'We cannot let our customer ratings continue to go down,' " he recalls.

Big Red would be financed out of the company's operating funds. In 1997, for example, operating income was $87 million, so there was no need for Red Roof to borrow money. In addition, Cash told the board that the changes would reduce repair and maintenance costs in the long haul. Add to that the troubling results of focus groups and customer surveys, and Cash did not have much trouble getting support from his board of directors.

"We wanted to end up with our hotels having a modern residential look and feel," he says. "We wanted to enhance the experience with all of our guests." He also wanted to reposition the Business King room as the premier room among similarly priced competitors-and increase the inns' occupancy rate at a time when there was a decrease industrywide for economy lodging chains.

According to Smith Travel Research, an independent firm in Tennessee that tracks the lodging industry, occupancy rates in the economy lodging segment for 1996 decreased 2.5 percent; between 1992 and 1995, the highest increase during any given year was 1 percent.

Cash started the Big Red transformation in the summer of 1996 by looking at room interiors; he knew Red Roof needed a new decor-and needed it fast.

Since his customers had told him what Red Roof was doing wrong, Cash wanted to ask them what would be right. He worked with an interior designer and decorated sample rooms at existing properties in the Columbus area to solicit guest comments before making the final decision.

Improving the dark exterior appearance of the properties involved more trial and error.

"We must have painted some of those doors 10 times before we got the color we wanted," Cash says, referring to the change from the dark green and brown color scheme to cream and red. Parking lots were restriped and sealed, and brighter lights were installed.

The planning stage involved about 50 senior managers from Red Roof's Hilliard headquarters, some of whom made nearly 30 visits to Red Roof properties across Ohio and out of state, to do testing and check feedback.


Sweating the details

It took most of the summer to research and plan for the project; in the meantime, Red Roof Inns' staff worked out a schedule to complete the projects with the least disruption to guests. Renovations would begin during the latter months of 1996 and early 1997, when occupancy was traditionally lower.

To maintain close coordination between Red Roof Inns' operations staff and the outside design and construction crews, Cash made one of the chain's best managers, Skip King of the Dublin Red Roof Inn, responsible for the entire project.

Once work started, Cash was surprised to find out how difficult it was to complete the job in one fell swoop at each inn. Problems ranged from follow-up work when a project wasn't completed just right, to the case of one inn that still isn't complete-a husband and wife who have lived there for seven years simply don't want their room remodeled.

To ease the challenge, inn managers kept in touch with King to provide daily, and even hourly, feedback.

The bulk of the project was completed before 1997's busy summer season, but Red Roof still faced the challenge of publicizing the change to its customers-since some had sought other lodging during renovations.

"It hurts you in the short run," Cash admits, noting that guests will go across the street to another hotel to avoid the inconveniences of construction. To help draw back those customers and bring in new ones, Red Roof added the word "remodeled" to many of its 500 billboards, and during the summer of 1997 the company ran a special media promotion on television and radio and in USA Today.

The company spent approximately $5 million-20 percent of its 1997 sales and marketing budget-to promote the changes.


Out of the slump

Right off the bat, Cash saw his primary goal fulfilled: Red Roof's occupancy rates increased 2.7 percent during the final quarter of 1997, after the bulk of the improvements were completed.

Also during that quarter, customer surveys showed improvement in 27 of 30 attributes, such as the cleanliness of the rooms and the value for the price as well as the room decor and safety issues that had fallen previously.

"So the customer is shouting back to us: 'Hey, we appreciate what you've done,' " Cash says.

Red Roof Inns has increased room rates-in all rooms, not just the Business Kings-every quarter since the Big Red project, while still staying an average of $1.50 per night lower than competitors, Cash says. An additional $1 million in income per year is generated from Red Roof's new video-on-demand ser vice added during renovations.

Also, as promised, 1997 repair and maintenance costs were reduced by $5 million-about 10 percent of that budget-and this year's budget is down another $2.5 million.

Employees appreciate the improvements, too.

"Our people are proud of what they're selling now," Cash says. Since the project's completion, he's received no further customer complaints.

Stock analyst David L. Gardner, who's been watching Red Roof for about three years, says he thinks Red Roof's brand was pretty strong even before the renovations.

"It kind of gives them a competitive positioning as the market tightens and new supply comes into the market," says Gardner, managing director of Baltimore stock brokerage firm Legg Mason Wood Walker.

In addition, Gardner says, the inn renewal program should help Red Roof's recent move into franchising, giving potential franchisees motivation to buy into the brand.

While Gardner sees Big Red as simply part of Red Roof's basic business strategy, Cash says he considered the project a risk.

"We were already a very successful chain," he says. "We were just trying to make sure we were back on top of the heap."