Stephen Millard

Monday, 12 May 2003 05:52

A thriving community

The Northeast Ohio arts and cultural sector is a viable, living, breathing, working industry that affects every part of our community, from the economy to education to quality of life. Though many enjoy and appreciate it, it often doesn't get the attention it should, and some believe it's time to change that.

Susie Frazier Mueller, a Northeast Ohio arts advocate, is dedicated to raising awareness that the local arts and cultural community is thriving. Mueller's efforts have included displaying artwork in downtown storefronts and being involved in the March of Dimes Art Auction, which features the work of local artists.

"We're drawing attention in an effort to save the arts in Northeast Ohio," says Mueller. "Many folks over the past decade have gone to other cities to collect art or to patronize the theaters, thinking that there's not a thriving art scene here. But there is, and it's alive and well."

Tom Schorgl, president and CEO of the Community Partnership for Arts and Culture, couldn't agree more.

"The Northeast Ohio arts and cultural ecosystem is a major center for high-quality arts and cultural products and performances. Equal to or better than most cities in the United States, the Northeast Ohio area is certainly in the top five alongside New York, Chicago, Los Angeles and Washington, D.C., when it comes to quality, depth, breadth and diversity in arts and culture."

There's a lot to be gained from having a rich arts and cultural sector. Schorgl's group reports the arts community circulates more than $1.3 billion in economic activity in Northeast Ohio and generates approximately 4,000 full-time, quality jobs.

"That's significant," says Schorgl, "especially when it represents family-supporting jobs that attract people to this community, who then encourage their friends and colleagues to join them for the local arts and culture."

The result is an improved quality of life for everyone.

The arts have a positive impact on education, as well. Says Schorgl, "Studies have shown that if arts education is integrated into a school's curriculum, students, regardless of socioeconomic background, tend to stay in school, retain more information, graduate higher in their class and score better on standardized tests."

But with all the benefits arts and culture offer, Mueller says the industry remains untapped, not only as an economic engine, but as a resource for businesses.

"Northeast Ohio creative people have degrees from some of the best arts institutions," says Mueller. "They are highly trained, talented and capable of filling the needs of various businesses."

Mueller believes that if more businesses patronized vendors from local sources, Northeast Ohio would profit both economically and culturally. Instead of hiring an out-of-town interior design firm to renovate business space, find a local designer.

Art galleries such as the Art Metro Gallery in Cleveland's Colonial Arcade may be rented out as an alternative for company parties or meetings.

"Folks tend to think they need to go to New York or Chicago to find the right resource for a special event or other business needs," says Mueller. "They don't need to do that. It's all right here at their fingertips."

On the business side, the Council of Smaller Enterprises (COSE) is doing its part by adding a category to its Business Plan Challenge to encourage business planning and a connection between the arts and entrepreneurial fundamentals.

"The thought of a business plan can be intimidating to a lot of artists," says Schorgl. "But COSE has developed the curriculum and teaching skills so that drafting a business plan isn't a burden. It is regarded more as a tool to help them grow their business."

Artists take ideas and turn them into something real that has value. COSE wants to help the entrepreneurial artists in the community use their talent to create wealth for themselves and the region. Mueller hopes one day to see the arts and cultural community as a bustling, bursting entity in Northeast Ohio.

"Everyone is starting to realize that the arts are a driving force that is now worthy of their attention," says Mueller. "We just have to keep moving ahead."

Friday, 19 July 2002 11:28

Planning for your company's future

The convergence of two frequently discussed national trends make right now an excellent time for owners of smaller companies to give careful consideration to adopting retirement programs.

The first of these trends is the continuing tightening of the labor force. Even in light of recent layoffs, hiring is a highly competitive undertaking, particularly when it comes to finding the most skilled and technologically advanced employees.

The second trend, supported by poll after poll, is the widely held perception that the Social Security system is less than secure. Even those who believe it will remain solvent over the long haul are largely unconvinced that it can or should be more than a supplemental source of retirement income.

What these trends indicate, when taken together, is that employers who don't offer retirement plans face several serious threats: They're at a disadvantage when competing for the best employees, and they're probably not adequately addressing their own post-retirement financial needs.

Just one of these threats could pose serious risk to the future well-being of the smaller business owner. Together, they're risks worth expending all efforts now to minimize in the future.

How to prepare

Don't worry, you say. The eventual sale of your company will provide all of the retirement income you need.

Maybe. Or perhaps there will be a sufficiently interested and talented family member to carry on, providing you with a steady retirement cash source.

The problem is that both assumptions have been proven wrong a multitude of times, leaving smaller business owners working harder and longer into their senior years than they ever intended.

Even those who've made the wise decision -- to remain competitive in the work force and secure their own long-term financial stability with a company retirement fund -- can find themselves confused over the next step. How do they begin to put together such a program?

Keep in mind that a bad retirement plan can be worse than having none at all since business owners can be held legally responsible for decisions that squander retirement savings. As John Lipaj, vice president at McDonald Investments, puts it, "The typical small business owner doesn't have the time or experience to research and monitor employees' retirement plans. They're too busy running their businesses."

That's why it's imperative to rely on the expertise of trusted professionals.

The next logical step, according to Martha Lanning, COSE's director of group benefits, is to offer quality retirement plans managed by topnotch professionals. Criteria should include generous selection options, investment flexibility, dependable consultative support and availability at preferred pricing for members, another way of maximizing the competitive advantage.

In COSE's case, members have a menu of provider options to help meet their retirement plan needs. For each alternative, from SEP through SIMPLE to 401(k), there are a wide range of plan choices -- from basic plans to full-service offerings -- from the nation's most respected retirement providers.

Taking similar steps will keep you focused on the most important thing -- running your business -- while industry experts focus on the details of your company's retirement plan needs. After all, says Lanning, "Our members want to run a business, not a retirement plan." Stephen A. Millard is executive director of COSE, the nation's largest chamber of commerce and the region's largest small business organization. COSE, which provides such small business advantages as health insurance, workers' compensation coverage, education, networking opportunities and government advocacy, will also serve as an educator and aggregator of energy buyers for increased savings. Millard can be reached at (216) 592-2436 or online at For more information about the COSE Retirement Program, call (866) 284-1929.

The next five to 15 years will reveal subtle differences in the way entrepreneurs look, think and work.

That's the forecast outlined in "The Future of Small Business: Trends for a New Century," a national study conducted by American Express, IBM and National Small Business United (NSBU) and in cooperation with RISEbusiness. NSBU is the nation's oldest bipartisan political advocate for small businesses.

The report highlights new challenges and fresh opportunities for the savvy business owners. At COSE -- the Council of Smaller Enterprises -- we'll be helping entrepreneurs negotiate successful paths through what could be a pretty unfamiliar landscape.

The best news for many start-up and fast-growth ventures is that the globalization of financial markets is expected to create additional capital sources, and the Internet will be the tool you'll use for accessing many of these new markets.

The study, led by Dr. Richard W. Oliver, professor of Management at Vanderbilt University's Owen Graduate School of Management, examines emerging trends and developments in the areas of small business ownership, labor force requirements, new technologies, business commerce and financial markets.

It was conducted in consultation with panels of experts in each of the five areas and based on an examination of current data, interviews with topic experts and the review of scientific literature. Oliver's team predicts that some of the most significant changes will involve technology, demographic shifts and the ever-increasing influence of the Internet.

New technologies are expected to yield fertile business opportunities in such developing fields as microelectronics, microelectro-mechanical (MEM) systems, wide bandwidth communications and biotechnology. Additional technological developments will combine with changes in organizational structure and a move by entrepreneurs to more knowledge-based service businesses to increase productivity and profits. In other words, if you're a techie, you're in business.

The Internet will further stimulate the rapid growth of the business-to-business sector. There will be expanded online opportunities for market-niche, home-based and virtual businesses -- defined as short-term alliances among independent businesses to complete single projects. If you're not conducting business online yet, get there.

In business-to-consumer commerce, the study projects growth will be less rapid and the ease and convenience of e-commerce will let the buyer effectively set price, quality, service and delivery standards.

Among the projected challenges is the aging of the U.S. population, which could result in chronic labor shortages. Small technology firms could be further threatened by a shortfall of skilled math, science and computer professionals. As a smart entrepreneur, you'll anticipate these changes and create attractive work environments and competitive compensation packages that get and retain top employees without necessarily outspending the competition.

The study describes a work force of the near future that relies to a growing extent on women and minorities. The overall graying of America, and a population decline in the 25-44 age group -- the segment that traditionally creates most new businesses -- will translate into an accelerated rate of business closures and fewer new companies taking their place. Perhaps this trend will create markets that never existed for you before.

When it comes to evaluating the worth of a company, physical assets will take a backseat to intellectual property, including patents, brands, business models, competencies of personnel and innovations. It's not what you have, it's what you know that will matter most. What the survey points out more than anything else is the value of staying informed and flexible enough to accommodate new ways of finding and conducting business in the coming years.

Steve Millard is executive director of COSE, the nation's largest small business organization. COSE provides such small business advantages as health insurance, workers' compensation coverage, education, networking opportunities and government advocacy.

Survey says

The face of smaller businesses will change in subtle but critical ways, according to "The Future of Small Business: Trends for a New Century."

Here are some of the highlights:

  • New technologies and organizational structures will increase productivity and profitability, but smaller technology firms will acutely feel the shortage of computer, math and science professionals.

  • The expansion of e-commerce will dramatically add to the $2.8 trillion in total business-to-business sales anticipated by 2003.

  • The Internet will encourage the growth of market-niche, home-based and virtual businesses.

  • Improved credit technologies and the Internet will offer smaller companies wider access to financing and the more flexible use of money.

  • Major demographic shifts will results in chronic employee shortages and a work force that's older and more female, Hispanic and African-American.

  • The dip in the supply of younger (25-44) workers will mean a temporary reduction in the rate of the creation of new businesses.

Monday, 22 July 2002 09:36

Complex choices

In late July, the PUCO approved plans by FirstEnergy to move to a deregulated marketplace by Jan. 1, 2001.

Our experience in more than three-and-a-half years of studying energy deregulation tells us that while the situation will improve over time, there will be significant complexity in the short term for small business.

Many business owners are looking forward to energy deregulation as a means of gaining better rates through a more competitive marketplace. And it's about time small- and mid-sized companies got some help. While residents get rate protection and representation by the Ohio Consumer Counsel (OCC) and the largest corporations have their impressive buying power to leverage discounts, it's the smaller businesses that have taken the brunt of changes in energy and related costs for years.

But you'll learn in the coming months that while deregulation has the potential to bring relief, the savings won't add up dramatically -- at least not immediately. However, joining with other businesses or residential customers through aggregators that give energy buyers the ability to pool together for increased buying power can maximize these initial savings.

To understand the complex deregulatory picture, keep in mind that in Northeast Ohio, the process won't be finalized until some time in 2008. The more immediate alterations, which will occur on Jan. 1, 2001, are part of a transitional phase on the way to more comprehensive changes.

FirstEnergy will start the process of retooling to the demands of a competitive market and begin making capacity available for competitive electricity shopping for 20 percent of the region's electric needs. If you participate, you'll see your charges for electricity broken out in new ways. Whether or not your company takes part, you'll also assume a new charge for paying down the large investments that FirstEnergy made in past years to serve the region but won't be able to recover due to deregulation (stranded costs).

Only about 77 percent of your electric bill -- the tab for generating power -- is up for discussion. The rest of the itemized charges are for such nonnegotiable items as transmission and distribution of the electricity through the poles and wires still owned by First Energy. We estimate that a reduction of 5 percent to 10 percent is a realistic expectation during this transitional phase, and even that's only likely to occur if you buy through an aggregator like COSE.

That doesn't mean you won't be promised a better deal by unfamiliar energy companies. Watch out for rates that sound too good to be true. As with some long-distance telephone carriers, energy marketers might get a foot in the door with a lowball rate that escalates rapidly as the provider discovers the difficulty of maintaining profitability even through volume.

Our understanding of the experience in other states that have gone through these changes is that buyers, especially small businesses, must ask lots of questions of these new and evolving providers.

Energy deregulation can be as frustrating as the similar occurrence years ago in long-distance communications, but a thorough understanding of the situation could be critical to your company's bottom line. Businesses in Northeast Ohio -- which currently pay about double the energy costs of companies in other parts of the state -- could begin to save in the neighborhood of 25 percent of their current energy bill by the time true deregulation kicks in.

That's a nice neighborhood for any business. Stephen A. Millard is executive director of COSE, the nation's largest chamber of commerce and the region's largest small business organization. COSE, which provides such small business advantages as health insurance, workers' compensation coverage, education, networking opportunities and government advocacy, will serve as an educator and aggregator of energy buyers for increased savings. Millard can be reached at (216) 592-2436 or online at

A deregulation primer

We've all got plenty to learn about the complex issue of energy deregulation as it relates to residents and business owners. Here's a good start:

When do I get to choose my electricity supplier?

Beginning Jan. 1, 2001, Ohio consumers and business owners can select the company that generates their electricity.

What are stranded costs?

The terms refers to the financial investments, such as additional generating plants, made by the utility company. These costs are considered to be unrecoverable from ratepayers in a competitive marketplace. In a regulated environment, the utility company would have been able to pay for these investments by including costs in their regulated rates.

Who should I call if I have a power outage?

If you experience a power outage or have concerns about safety and service reliability, you will continue to call your current electric company. It owns and maintains the wires that deliver electricity to your home or business.

What is an aggregator?

It is an entity that puts customers together in buying groups for the purchase of commodity services at favorable rates. The vertically integrated investor-owned utility, municipal utilities and rural electric cooperatives perform this function in today's power markets. Other entities such as buyer cooperatives or brokers could perform this function in a restructured power market.