Todd Shryock

Monday, 31 March 2003 08:48

You've got mail

E-mail can be an effective way to promote your products and services if it's used correctly.

To avoid being associated with get-rich-quick schemes, porn sites and unwanted solicitations for products no one would ever use, you need to be careful on how you select your recipients.

For example, Roy Harry, president of Media II, an Eastlake-based business-to-business marketing communications firm, compiles potential customers for his clients from lists purchased from relevant magazines and organizations.

"Everyone on the lists opted-in and said they wanted to receive special offers," says Harry. "Only those that opt-in get the e-mail. That's how you avoid the spam issue."

With research, it's possible to compile a list specific to the type of product or service you are selling. The more research that's done, the more targeted your list will be, giving a greater potential for profits.

Once your list of potential targets is identified, you need to create your marketing material.

"The biggest thing you want to do is have a genuine offer," says Harry. "It might be 10 percent off their next purchase, buy-one-get-one-free offers or a special promotion on a new product. Those are all good bits that call for action. You need something that really peaks their interest. It might even be something like a contest to win a Palm Pilot."

Harry says that 15 to 50 percent of recipients will actually open the mail, and the number who choose to click the e-mail's ad link to the Web site ranges from 3 to 12 percent.

Subject lines for the e-mail should be strong and to the point, such as "Receive 50 percent off your next purchase." They shouldn't be deceptive.

"People are turned off by that," says Harry. "If you've done a good job targeting your list, you don't have to be cute."

Once the information is sent, you'll have a good idea of how successful you were almost immediately.

"You'll get the majority of responses back within four to six hours of when you first send it out," says Harry. "About 80 percent of your responses will come during that time."

Lists costs between $300 and $500 per thousand addresses, but once you use them, you can take the names that respond to your efforts and start compiling your own list of qualified candidates.

Overall, Harry says that e-mail marketing typically has a higher response rate than a direct mail piece, plus you avoid the printing and postage costs.

"The piece has to be meaningful to the person receiving it," says Harry. "It can't just be hype. It needs to be highly focused and have a real value."

Media II

Friday, 28 March 2003 08:42

Static activity

The Cleveland office market, like many others across the nation, is stagnant.

Companies have downsized, consolidated or moved to another city. The result is a slow market that works to the advantage of tenants looking to upgrade their space or cut a better deal.

"In general, there isn't a lot of activity," says Todd Gabriel, vice president of Grubb & Ellis. "People who have leases ending in the next 18 months to two years realize now is the time to do something. There are some businesses that are really struggling and others that have been through down cycles before and know how to survive.

"Those that have survived know to take advantage of the market to lower their costs and improve the quality of their space."

Suburban spaces to the east and south of the city have the highest vacancy rates in 10 years. Landlords want tenants -- but within reason.

"Landlords are very hungry for tenants that are capable of performing in this market," says Gabriel. "If you are a creditworthy tenant, that's the thing people are really looking for. The landlord wants to be paid on a timely basis, so if you are a tenant with good credit, you can leverage the best terms possible."

Now is also a good time to get concessions from your existing landlord if you don't want to move.

"Maybe your space works well and you like it," says Gabriel. "You can use the softness in the market to renegotiate the renewal terms."

Area businesses are avoiding the risks of moving by staying in their existing spaces. There are also cost issues other than rent when considering a move.

"In addition to rent and utilities, if you move, you might have to recable the space for your technology needs and make other modifications," says Gabriel. "If you can stay put and lower your expenses, that might be a better option for you. On the other hand, there are companies that are saying now is the time to upgrade the quality of building we're in without spending that much more money."

Gabriel says one company he works with moved -- from an older, energy inefficient building downtown that had too much space to a smaller space in the Rockside Road area -- and is saving 20 percent off its annual rental costs as a result.

Moving to the suburbs from downtown is a trend that started decades ago and continues today.

"In the last year, quite a few companies have downsized downtown or considered moving to the suburbs," says Gabriel. "Almost always, the thing they mention is parking. The rents downtown aren't more expensive than the suburbs, but if the company pays for parking, it can add $2 to $3 a foot to the rental rate.

"I have a client where the bulk of the employees are paid in the $8 to $9 range. If you ask the employees to pay for parking, they'll spend an hour each day working to pay to park their car. That company is looking at a suburban location, because they think they will be able to recruit much better."

Vacancy rates and construction

Office spaces are classified as A, B or C.

A buildings are less than 25 years old, C buildings are turn-of-the-century spaces and B buildings are everything in between. An example of an A building is BP Tower, while the Tower at Erieview is a Class B building.

The downtown Class A vacancy rate is about 11 percent, while Class B is around 24 percent.

"Normally, a healthy market is in the 8- to 10-percent range," says Gabriel. "You rarely get down to 5 percent."

So while the Class A market is in decent shape, the high number of vacancies in Class B buildings is creating problems for Class A landlords.

"The downside for Class A is, even though the market doesn't have a real high vacancy rate, the high vacancy rate in Class B spaces is dragging down the vacancy rate in the A's. Rates are getting so low that class A tenants are considering B buildings because of the rates. Over time, that difference in vacancy rates forces the A's to reduce their rates."

The office construction market is also slow because of so many vacancies in existing spaces.

"It's very tough for many developers to consider new construction," says Gabriel. "The rental rates just don't justify it. If the market for suburban space in the Rockside area is $22 per square foot and the new building will charge $26 per square foot, you are probably not going to have a whole lot of people interested. For many developers, new construction will most likely be in the Rockside Road area, and that market is very soft right now.

"When the economy starts growing again, it will probably be a hot area. If you look at a map, it is a bull's-eye on the county. It's 10 minutes to the airport, 10 to downtown and 20 to most any of the suburbs."

Build-to-suit construction is very slow as well. There are so many vacancies that unless a company has very specific building requirements, there's no reason to take on the expense of new construction. Even large chunks of office space aren't a problem in today's market.

"If someone needs 25,000 square feet of space, they have at least a dozen choices," says Gabriel.

High vacancy rates in some areas do not necessarily mean the city is stagnant.

"Even though the activity is not significant within the market, there are still a lot of companies that are doing things," says Gabriel. "Just because some people are shrinking doesn't mean that others aren't growing. It doesn't mean activity has come to a complete halt. There are opportunities out there.

"There are still things happening. There are some winners and some losers. If you are a creditworthy tenant, right now is a good time to be in the market." How to reach: Grubb & Ellis, (216) 861-3040

Friday, 28 March 2003 08:37

Paper trails

The Enron scandal rocked financial markets and led to a lot of questions, mainly, "Who knew what and when did they know it?"

The problem is in identifying the truth amid the finger pointing.

Technology, in the form of document management, can bring a level of responsibility that will let corporate officers and shareholders alike sleep easier at night.

"This technology solution, if employed at Enron or WorldCom, may not have stopped what happened and may not have prevented anything, but at least there would have been a tracking mechanism that would have allowed investigators to follow the trail back to the source of the problem," says Michael Pray, vice president of Solon-based DocMan Technologies.

Document management basically takes a company's paperwork and indexes it for ease of use by others. Parameters can be set to limit viewing or editing access, and for accountability purposes, a paper trail is established that could serve as a deterrent to wrongdoing.

"The value in these systems is the indexing," says Pray. "The information is saved the same way and can be searched and retrieved. When information needs to be destroyed after a time, it can be destroyed or archived permanently, and the system can alert you to these tasks.

"Companies may have hundreds of users on a network that are creating documents and storing them on the network or on their hard drive. They can store the information wherever they want. Document management systems give you a point of access, a search and retrieve ability, and most importantly, security audit trails and document retention policies."

Pray says that while most larger companies have implemented physical building security, including some that track who accessed what room at what time, most have neglected to secure their documents.

"When you look back and read about all the corporate scandals and the companies that have been in the news, the concerns focus around e-mail conversations and who knew what," says Pray. "It's all about document trails, who had access to documents and who had the rights to alter or destroy what. There are technologies out there that can guard against the exposure and weaknesses that are in existing systems that open a company up to lawsuits." How to reach: DocMan Technologies, (440) 542-9660

Thursday, 27 February 2003 08:25

Factory direct

During the technology boom in the '90s, there was a lot of buzz about direct public offerings. But when the tech bubble burst, so did much of the interest in the DPO.

A regulation change at the SEC added to its decline, and the DPO has all but disappeared as a means of raising capital. But that doesn't mean it's not right for your company; it's just not as attractive an option as it used to be.

"With a DPO, you sell the stock at what it's worth, cutting out the middleman and the fees," says Christopher Hubbert, partner with the law firm of Kohrman Jackson & Krantz. "The public participates on the ground floor. With an IPO, the investment bank might buy the stock at $9.50 and sell it for $11 or $12. With a DPO, the public can get in on the ground floor. Theoretically, everyone benefits."

The explosion of the Internet made this possible, giving companies a means of reaching large numbers of potential investors and distributing their stock for minimal costs. Hubbert recalls working on one transaction in which investors could buy the company's stock online with a VISA card.

There are two types of DPOs: Regulation A, which is limited to $5 million, and Rule 504, which is limited to $1 million; both are exemptions under the Securities Act of 1933. With the Reg A, there is a filing requirement with the SEC. Your offering is reviewed and commented on, similar to what an IPO goes through.

Rule 504 filings fall under the jurisdiction of state laws. In Ohio, state officials perform a merit review of the filing to decide whether it is fair.

Several years ago, the SEC clamped down on DPOs and issued new rules.

"There was a lot of fraud, and the securities people were concerned about stocks being pumped up, then dumped on the market," says Hubbert. "New rules were adopted requiring the filing with the SEC and that all information be made public. This increased the burden to that of a publicly traded stock, so one of the advantages of a DPO has fallen by the wayside.

"It's a bigger project to complete a DPO than it used to be." How to reach: Kohrman Jackson & Krantz, (216) 696-8700 or www.kjk.com


Direct choice

So who's a DPO good for?

"If you have a hot product, a good presence on the Web or a strong customer base to sell to, then a DPO might be right for you," says Christopher Hubbert, partner at Kohrman Jackson & Krantz. "If you are a supplier to a limited number of companies and you make gaskets, then you are probably not a good candidate for a DPO."

Other DPO facts:

* "Trying to do a 504 for a million for most companies isn't going to be worth it because of state regulators," says Hubbert.

* If you are considering a 504 offering, you must obtain approval in every state in which you will sell your stock. Getting Ohio approval means you can only sell to customers or other investors in Ohio.

* If you are considering a Reg A offering, expect to spend at least three months preparing documents for the SEC review.

* Much of your private information will become public when the offering is complete, so competitors and employees may gain access to information they normally wouldn't have.

* Your business is, in most cases, going to have to be organized as a C-Corp to complete a DPO.

* When the stock is sold, you will have fiduciary duties to your shareholders. "You can't take all the money out of the business as salary and not pay dividends," says Hubbert. "A lot of small business owners treat their business as a piggybank and take money out of the register.

"You can't do that if you bring on investors."

Thursday, 30 January 2003 19:00

Collection notice

Privacy is one of the hottest Internet issues.

As companies collect more data on Web site visitors to hone their marketing messages, target products and launch promotions, visitors are starting to object to how that information is being used and in some cases, sold.

"There are no uniform rules of conduct for businesses," says Mark Terzola, an associate partner at the law firm of Roetzel & Andress. "There is a sort of piecemeal regulatory scheme that is principally federal in nature and enforced by the FTC, but there are no one-size-fits-all answers."

The problems occur because of the nature of doing business over the Internet. There are 50 states, each with its own privacy laws, plus federal regulations for some sectors. And if you are doing business overseas, the laws of the European Union or each individual country may also apply.

So how do you protect yourself in this evolving legal environment? Be conservative, and be honest.

* Protect the information you collect.

Make sure your database is protected from hackers and others who might benefit from information you have collected about your Web visitors.

* Tell users what you plan to do with the information.

"Opt for full disclosure rather than something less than that," says Terzola. "Where companies have gotten in trouble is when they don't do exactly what they told the user they were going to do. Don't dance around the issues. If you are going to sell the information to a third party, then tell them that."

* Allow users to see what information you have.

There should be a way for users to see the information you have so they can see what has been collected and check for accuracy.

* Make users opt in.

"Give the consumer a meaningful choice as to what happens with his or her information," says Terzola. "Give them an opt-in or opt-out decision. Make them elect to allow you to use their information."

Outline all your policies and procedures in a privacy policy posted on your home page. For an extra level of protection, make users agree to the terms before providing them access to your pages.

"Having a privacy policy is a good thing," says Terzola. "Take it seriously, because this area is becoming more heavily regulated." How to reach: Roetzel & Andress, (216) 623-0150


The regulated few

Not every business is left to determine its own actions in cyberspace.

There are specific federal regulations that cover Web sites collecting information from children; financial institutions; and businesses that deal with personal health information.

* Children's Online Privacy Protection Act (COPPA). This applies to the online collection of personal information from children under age 13. The law spells out what a Web site operator must include in a privacy policy, when and how to seek verifiable consent from a parent and what responsibilities an operator has to protect children's privacy and safety online.

* Gramm-Leach-Bliley Act. Any financial institution that provides financial products or services to consumers must comply with the privacy provisions of the act and the privacy rule. It primarily applies to providers of financial products or services to individuals, not businesses, to be used primarily for their personal, family or household purposes.

* Health Insurance Portability and Accountability Act. This act sets standards health care organizations must follow to protect personal health information that is transmitted electronically.

Friday, 31 January 2003 09:33

Selling yourself

Selling a business you've poured countless hours into isn't easy, and trying to do it yourself while still running the operations can be a challenge.

Just determining how much the business is worth can take three to six weeks, and someone at the company will have to gather documentation during that time, says Terri Lastovka, manager at Zinner & Co. in charge of business valuation and litigation support.

Once you know what it's worth, it's time to find a buyer. But where do you look?

"It depends on the business and the relationships you have with various people," says Lastovka. "You can look to friendly competitors, employees, vendors or even customers, depending on what the makeup of your business is. You can also look to family members. If none of those are options, then you'll probably want to get some help by getting someone with some experience in finding buyers."

That's where a business broker comes in. Most are generalists and deal with all types of businesses. Many also have real estate licenses to handle real estate transactions that may be part of the deal.

"It's a different process than selling a house," says Lastovka. "There is no multiple listing service, so it's a matter of brokers either advertising or talking to people they know. Some will do research and send out letters to potential buyers, and all brokers talk to each other."

Expect to spend six months searching for a buyer, and the process could stretch to two years.

"A business owner could sell the business themselves, but it would be difficult," says Lastovka. "How much time do they have on their hands? A family member might be able to help, but it's very time-consuming. They don't have the contacts or the know-how."

Another advantage to using a broker is that it makes it easier to keep the potential sale of the company hidden from employees and customers.

"If employees get wind of it, they might get nervous and jump ship," says Lastovka. "Customers may get nervous and find another source." How to reach: Zinner & Co., (216) 831-0733


What's it worth?

The first step in selling a business is determining its value.

"A lot of business owners have a tendency to think their business is worth much more than it really is," says Terri Lastovka, manager at Zinner & Co. in charge of business valuation. "They've poured their heart and soul into it, and it's more than just a job to them. There is a lot of emotion attached to it, so they often have unrealistic expectations.

"It is really important to talk to a professional who can analyze the financials and the revenue streams, the vendor base and the cash flow. They can take a look at the equipment and the history of capital expenditures so they can put together a package of information."

Taxes are also a major issue when selling a business.

"It's always good to know what the tax consequences are before you go into it," says Lastovka. "You can get really creative with the tax planning if you know what you are getting into. There are different trusts or a number of different tax avenues you can go down if you really look at it closely, because you don't want to get hit with a big tax bill. Always get a tax adviser when selling a business."

Thursday, 30 January 2003 19:00

Content to commerce

Less than two years ago, executives at Alcan Inc., a metal products manufacturer, realized the competition had seized the initiative in e-commerce capabilities. Something had to be done.

Alcan quickly formulated an e-commerce strategy and implemented several initiatives to revamp its existing Web presence.

Using a Net architecture, the company added more personalization and functionality to the site. It included an employee benefits section, along with a logistics site and an e-message board.

It installed user content management features into new brand templates, pushing the responsibility of updating portions of the site to the appropriate managers, which eliminated bottlenecks in the IT department.

"Each business unit now has its own Web coordinator," says Wilton Foster, manager of e-commerce, corporate systems, for Alcan. "It shifts the burden of keeping the site fresh out to the business end user."

The company also added a 24/7 help desk for the benefit of employees who need to update the site, and for customers, as well.

"We never want to be in a situation where they are not able to get ahold of us," says Foster.

With inventory for sale on the Web site, Alcan customers have stated they will increase purchase volume by an estimated 5 million to 10 million pounds, just in one business group. The company has seen benefits from the e-commerce initiatives including inventory cost reduction, improved employee communication and an enhanced brand alignment.

The results have been impressive.

The Alcan Recycling Group had been handling about 9,000 loads per year before moving to a Web-based load tendering system in March 2002. It now processes approximately 25,000 loads with no additional staff.

The company had similar results at its Terre Haute facility. When the Web-based tendering system was implemented, the facility saved 15 hours a week in overtime paid to administration personnel, saving more than $17,000 per year.

While some of the savings are measurable, other benefits are less defined.

"Our e-commerce initiatives have given us a base of information to use to reduce the number of vendors," says Foster. "It has also let us eliminate some labor costs."

The company has also used the new initiatives to start bringing all IT projects under one unified platform.

Foster says there are legacy systems still in place, but everything done from here on out will be on the same platform as everything else. How to reach: Alcan, (440) 423-6600

Friday, 20 December 2002 10:11

Design focus

Did you launch your Web site with great fanfare last year, only to find it languishing in the World Wide Wasteland today?

The Web sites of many businesses are not achieving all the goals originally set forth, and a common problem is simply the design -- both from a technical and aesthetic standpoint.

"For a small or medium-sized business, it's about content, content, content," says Jeffrey Rohrs, senior digital marketing strategist at Optiem. "You have to make sure you are providing very specific information about the products and services you offer, and do it in such a way that is search engine friendly. You want to organize your site so it's targeting concepts, keywords and product names that will draw people to the site."

Search engines remain the No. 1 way sites are found. Half of all people looking to make an online purchase start with a search engine.

To attract customers, keep your content current. And to let people know about site updates, offer an e-mail subscription list. E-mails can update customers on new product information or offer tips and advice.

"E-mail is a retention tool," says Rohrs. "If you are launching a site and have a loyal clientele, and you think they want to hear about updates, then integrate a simple registration form. The permission-based e-mails are very powerful, and smaller businesses can take great advantage of that."

Site design should focus on a clean appearance with no broken links.

"Don't do everything on your home page," says Rohrs. "Too many sites have way too much on the main page. Users need a chance to orient themselves. You don't walk into Walmart and see all the products at once.

"If you've got pop-ups flying around and 24 levels of primary navigation, you are shooting yourself in the foot."

A site should have a site map, contact information and a search function.

"Don't think you are done when you launch a Web site," says Rohrs. "Your job has just begun. You have to treat it like it's one of your stores and put effort into it along with a bottom line commitment that lasts for the rest of the life of the company." How to reach: Optiem, (216) 615-9100

Friday, 20 December 2002 09:16

Termination date

Firing an employee is never a pleasant task.

No matter how poor the performance record, it's hard not to empathize with being thrown out of work. But if the time comes to cut someone loose, make sure you are prepared.

"When someone calls me regarding a termination, the first thing I ask is if they have a progressive discipline procedure in their handbook, and if they do, did they follow it," says Lisa Satonick, HR resource line specialist for the Employers Resource Council. "The No. 1 reason why an employee can come back on an organization is for not following its own procedures."

If the procedure outlined in the handbook has been followed, the company is relatively safe. But what if there is no procedure?

"The most important thing you can do is document everything," says Satonick. "Document any discipline or performance problems. I can't stress this enough."

An employee you've had for years who keeps showing up late and has had other issues may be a candidate for termination, but if the only action taken is verbal warnings by the supervisor, you could be putting your company at risk.

"Have the employee sign everything, and if they refuse to sign, document that fact," says Satonick.

Employees on the verge of termination should be given a final warning, with a 30-, 60- or 90-day improvement plan.

"You need to give them specific steps to improve, but let them know that just because they make it, you will continue to track and document their performance," says Satonick. "What you are basically doing is setting up a documentation trail that shows you did every thing possible to help the person get better or correct the situation, and that you are not kicking them out at the first sign of trouble."

Satonick also recommends having your lawyer look over your documentation and review the case to make sure that you, as an employer, have done everything you needed to do. How to reach: ERC, (216) 696-3636 or www.ercnet.org


Judgment day

When you have to fire someone, be prepared.

Once you decide that the only course of action left is to fire the employee, act immediately.

"Postponing it does not make it better," says says Lisa Satonick, HR resource line specialist for the Employers Resource Council. "If you made the decision on what to do, act on it, the sooner the better. The employee probably knows something is wrong and that something will happen. It makes it harder on both the company and the employee if you wait."

When the meeting time arrives, be direct.

"Communicate clearly why you have come to this decision to the employee," says Satonick. "Communicate the rationale for the decision. Communicate by listening and responding appropriately."

Communicate the terms of the separation, and how and when the transition will occur. If appropriate, tell the employee what will be done to help him or her, such as outplacement assistance.

"Be very to the point," says Satonick. "You don't want to get into a situation where you are going back and forth with the person. Be nice, professional and appropriate."

If you've taken all the appropriate steps before the meeting, it will be less stressful for you and the employee. Providing documentation outlining the reasons for the firing puts the onus on the employee. Specific examples are much harder to debate than vague generalizations.

"If the employee does come back on the organization, you'll be in a good position with the proper paperwork and you'll be prepared," says Satonick.

Tuesday, 26 November 2002 08:20

Virtually working

Every day, more employees are working from home.

Those employees often find that being away from interruptions at the office means more stretches of time to spend focused on a task, and employers benefit from the increased productivity.

But how should a home office be set up, and who should pay for equipping it? It all depends on who's pushing for the home office, and how progressive the company is.

"If it's an employee-driven decision, and they have the space and the technology and they want to be at home, then it's probably up to the employee to pay for it," says Jeffery Zbar, author of "Teleworking & Telecommuting." "If the boss says, 'We're in a space crunch and need to clear out 30 percent of the workers on any given day and use space-sharing,' then it may be more incumbent on the employer to pay."

Zbar says the basic set-up will cost $1,000 to $1,500 for a laptop computer, assuming the employee doesn't have one already, plus $40 to $50 a month for a broadband connection.

"Maybe the broadband will be used by the family, so only part of it might be reimbursed," says Zbar.

The furnishings also need to be adequate to work on.

"Don't just grab six cinderblocks and a door," says Zbar. "You need a dedicated office that suits work. You have to have good furniture. Go to an office supply store and buy used furniture.

"Look in the local paper for companies that are having bankruptcy and liquidation sales. You also need a good chair that is ergonomically sound, comfortable and suitable to your needs."

Even though the office space is in the employee's home, the employer should mandate a safe work environment.

"An employee is on the clock in a bona fide telework program, so the employer is liable even when the employee is off site," says Zbar. "If an employee walks into a client's office and tripped and got hurt, it would be a workman's comp issue. It's no different at home.

"If the employee has broken stepping stones and minefields of stuff to trip on and entertains customers at home, it's a real liability issue. What if the client gets bit by the dog, trips or falls? The liability is not only on the employee as a homeowner, but the employer as well."

Zbar recommends employers require photos of the employee's workspace to show that it's reasonably safe and ergonomically sound. How to reach: Jeffery Zbar, www.chiefhomeofficer.com