Jim Vickers

Monday, 22 July 2002 09:40

Service in a digital world

In 1986, Rose Jenne put all of her assets on the line, including equity in her home as collateral, and started Jenne Distributors with $10,000, betting that a focus on fair business practices and customer satisfaction would propel the company in its early years.

Sales topped $2.4 million that first year, then jumped to $4.2 million in the following 12 months. During the past 14 years, the company’s growth has never stopped.

“We’ve been growing at a 25 to 40 percent rate since the inception of the company over the last 14 years,” says Jenne. “We’ve been experiencing the last several years a 40 percent growth rate, and we expect to keep experiencing that. Right now, we’re still on target for that for this year.”

It was quite a feat for Jenne, who had taken her first traditional business position working as a sales representative with a regional manufacturer’s rep group just three years before. By 1984, though, she was working for herself as an independent representative of telecommunications equipment and supplies, a move that led to the creation of Jenne Distributors two years later.

The idea behind the company was born of the split up of AT&T and the general lack of distributors selling telephones and communication products. Jenne wanted to create a business that offered telecommunications installers and resellers a single point from which to purchase rather than having to deal with several different manufacturers. Wanting to avoid the “box mover” stereotype with which many distributors are branded, Jenne made customer support, easy ordering and fast service cornerstones of the company.

Presenting her vision to telecommunications equipment manufacturers, however, she met with more than a little opposition. Initially, Panasonic was the only company interested in working with her. Nevertheless, Jenne persevered and sold Panasonic products.

Within several months, however, her success rate was drawing other manufacturers to her door. They were now willing to allow her company to distribute their products. Today, Jenne Distributors carries 130 lines of products.

Eventually, the company grew to the point that Jenne realized she needed a concrete business plan. The result was a strategy that focused on a value-added approach to win clients rather than simply dropping prices lower than the nearest competitors. That formula is still what drives the company’s 40 percent average annual growth rate, even when the rest of the telecommunications industry is at 25 percent.

It’s one reason Jenne Distributors was honored by Ernst & Young LLP as an Entrepreneur Of The Year in the Distribution Services category.

“We’re exceeding the industry growth rate, I think, because of the service that we offer and the planning of how we’re going into the future with the marketplace,” she says. “We’re tying in the Internet with a lot of things we’re doing and I’m not talking just Internet sales, but Internet applications. We are in the technology arena and I would say that would seem to be the growth area for this decade.”

In May 1996, Jenne Distributors’ growth became too much for the company’s Westlake headquarters. Construction began on a 32,000-square-foot office warehouse facility in nearby Avon that would be the new company headquarters. Then, in November 1996, Jenne formed N2NET Inc., an Internet service provider offering dial-up access, Web hosting and Web design and distribution opportunities through the Internet.

Both companies moved into the Avon facility in September 1997.

But no matter how much technology changes the face of her business or offers new opportunities for growth, Jenne insists it is her company’s service that is the secret of its success. In fact, she says she has created a unique entity in her industry — a telecommunications distributor that worries less about model numbers and orders and focuses making sure customers have a good experience with the products they purchase.

“Our customers could be on the job and ask a question and we could walk them through it,” explains Jenne. “It’s fast, speedy service, and knowledgeable.

“We really provide service to our customer, and no other distributor is like that in the entire country right now, at this point, for this type of product.” How to reach: Jenne Distributors, (440) 835-0040

Jim Vickers (jvickers@sbnnet.com) is an associate editor at SBN Cleveland.

Monday, 22 July 2002 09:39

Reversal of fortune

Thirty years ago, Cleveland was left for dead on the shore of Lake Erie as residents migrated out of Northeast Ohio for nearly two straight decades.

By the 1980s, the jobless rate was one point higher than the national average and Cleveland’s slow decline become known as a “rustbowl era” for Northeast Ohio.

But somewhere around 1990, the decades of slow decline started to reverse. Ten years later, it’s hard for newcomers to imagine the city as the aging remnant of the industrial revolution it once was. During a recent visit to the newly renovated City Club, Vice Chairman of the Governor’s Board of the Federal Reserve System Roger Ferguson shared his take on how Cleveland steered clear of imminent disaster and took its role in the world economy.

“After peaking in the 1970s, the population of the six-county area, including Cuyahoga County, declined annually for nearly two straight decades,” says Ferguson. “But since 1990, more families have been arriving than leaving, which can only be due only to this area’s rejuvenated economy.”

Ferguson chalks the transformation up to several factors. He took time during the May visit to point out where Cleveland, as well as the nation as a whole, has gained ground during the past 10 years.

Productivity boom

National productivity nearly doubled during the last half of the 1990s. While nonfarm business sector productivity grew around 1.6 percent annually between 1990 and 1995, that measure jumped to 2.6 percent a year after 1995.

“Cyclical forces, such as the inability of businesses to add to their payrolls as rapidly as they would have liked, probably played some role in the efficiency gains,” explains Ferguson. “But, I suspect longer-term structural changes reflecting the boom in capital spending and the revolution in information technology have probably been more important.”

Export growth

Between 1987 and 1997, Ohio’s exports grew 60 percent faster than the exports overall in the United States, pushing the state to the position of the nation’s seventh biggest exporter.

“In 1996, the Cleveland area ranked 23rd in the top 70 export communities in the nation,” says Ferguson. “This region’s influence in the global economy appears to be still growing as its capital base expands.”

Wealth creation

The national income has jumped one-third since 1991, or about 3.5 percent a year. However, in Northeast Ohio, wealth creation has moved along at a much faster clip, according to Ferguson. “Wealth is being created at a pace rarely seen before and growth in this region has been even more impressive,” he says. “On a per capita basis, Ohioans have seen 5 percent income growth (annually) during the past eight years.”

What’s that all mean in the big picture? Well, Ferguson says, Northeast Ohio has become a dominant player in the world economy.

How to reach: Board of Governors of the Federal Reserve System, www.federalreserve.gov

Jim Vickers (jvickers@sbnnet.com) is an associate editor at SBN.

Monday, 22 July 2002 09:39

Chocolate-covered expertise

When Adele Malley got into the chocolate business, she noticed an unusual trend among other members of her industry.

Most focused intensely on the creation of their candies in the kitchen, only to scoop the chocolates into dull white paper boxes, stack them on a table and wait for customers to buy.

“The more I got around, the more I saw that everybody had the same idea,” says Malley, who with her husband, Bill, has built an impressive chain of 12 Malley’s Chocolates stores scattered across the Greater Cleveland area. “They thought the chocolates they made were the best. Because they were so kettle oriented, they thought people were simply going to come buy their chocolates because they were so great.”

The chocolate industry would seem a natural fit for impressive retail displays, but Malley says for a long time, the focus was on quality more than salesmanship. She knew that was a bad decision, especially for younger companies that did not yet have a solid customer base. So, Malley set off to devise an industry-wide educational program to help those in the chocolate business become more successful.

After much industry wrangling, she started an annual six-day educational program herself. Today, nearly 20 years later, her school is still going strong.

Along the way, Malley helped a business escape bankruptcy by honing the owner’s retail skills. She was even named a beneficiary in the will of a chocolate store proprietor who felt indebted to her for the success of his store. Her students have come from all over the United States, as well as Canada, South America and Europe.

Over the years, the school has not only brought the Cleveland-based business additional revenue, but more important, branded Malley as a recognized industry expert.

“I thought that somebody ought to help them see that they should take their life’s work and reach out to people in fun, beautiful ways,” recalls Malley, who routinely fields phone calls from chocolate makers looking for sales advice. “You should be able to say, ‘Here’s the presentation, and I can back it up with my product.’”

Getting the idea off the ground, however, presented its own set of troubles. Although Malley knew many small businesses not so different from her own needed help with their merchandising efforts, she first searched the industry for others who were willing to help her make the school a reality.

“I believed we needed to show people how to get chocolates from their kitchens and the bubbling kettles out to the customers, and how to make the stores look inviting,” she explains. “I said I would be very happy to lead the school and get it all together. But, I would need other companies to send in their best store merchandisers.”

At the time, Malley’s call for help went largely unanswered. The board of directors of Retail Confectioners International agreed there was a need for such a school. When it failed to find anyone within its own organizations who could help, Malley realized her proposal was fading fast.

Even with the initial mediocre reception, she charged ahead, discussing the idea with her husband, Bill, who ultimately suggested she set up her school at the company’s Brookpark Road headquarters.

“He said, ‘The whole project is yours, and it needs a home,’” she recalls. “I wrote to the board again and suggested I would take full responsibility and make it a Malley’s school. They wrote me back and said, ‘We wish you the best of luck.’”

The Malley School of Merchandising is more boot camp than educational seminar. No more than 20 people usually fly in to Cleveland for the six-day course that is packed from morning to night with Malley’s own brand of instruction, practice and inspiration.

But it’s not limited to how to design window displays and set up a store. It’s also about gaining confidence and having the guts to make changes.

During the course of each seminar, Malley keeps a close eye on those who make the trip to Cleveland to see who is catching on to the principles and who may need a little more instruction. It is not uncommon that after the day’s slate of events is complete, she will provide additional help to those who need it.

“Some people just don’t get it, and they need to be taught a different way,” she says. “I can attack it from a different viewpoint than the one presented in class, so that person knows I am truly interested in their welfare and that they leave here with the confidence and the know-how.”

Malley believes her school continues to be seen as a valuable experience for those in the chocolate business because of the diverse field of experts she pulls together. When it comes time to discuss lighting, she takes her visitors to General Electric’s Nela Park for a demonstration from senior lighting specialist Mary Beth Giotti.

Meanwhile, Dick Blake, a service trainer who works with large corporations like McDonald’s and Ritz-Carlton hotels, on the final evening of the seminar lightheartedly tackles the topic of how a little customer courtesy can pay big dividends. Over the years, Malley believes she’s perfected the formula.

“I used to have a motivator come and continue on about motivating, but I could hardly keep my eyes open at the end,” says Malley, who routinely makes changes in the line-up of the seminar if her school starts feeling flat. “You have all these ideas in your head and you’re so overwhelmed, I decided to have Dick Blake come and take a completely different twist on what we’d been talking about.”

Word of mouth has been the strongest marketing tool for the Malley’s Merchandising School. In fact, Malley once fielded more than a dozen calls from a Turkish bubble gum manufacturer who wanted to attend the seminar, even though he did not sell chocolates and did not own a single retail store.

On a separate occasion, she had to enlist the help of her daughter, who was visiting Europe at the time, after the Chocolate House of Dublin called with questions about its retail display strategy.

A steady round of speaking engagements at industry conferences and success stories from students have generated a great deal of buzz for the small school Malley founded in 1981. And, it is not uncommon for those who attend to phone her looking for a little guidance when they hit a snag in their retail strategies.

For those who have never learned from her first hand, she suggests a trip to Cleveland, where she can teach them what they need to know to survive in the industry.

“It’s just overwhelming when you get into the business,” she explains. “I try to make sure that everybody who leaves the school has enough confidence that, when they look me in the eye on the last day, they smile and say, ‘I can’t wait to get back to my store.’”

How to reach: Malley’s Chocolates, (216) 362-8700

Jim Vickers (jvickers@sbnnet.com) is an associate editor at SBN.

Monday, 22 July 2002 09:38

Brand builder

The average supermarket freezer aisle is a battle of images, messages and packaging.

Many of these purchases are fueled by impulse, so it’s important to have a recognizable product staring out at consumers from behind the frosty glass. Cleveland-based Pierre’s French Ice Cream Co. understands this as much as anyone, having built the Pierre’s script logo into an instantly recognizable brand.

Yet, when company officials unveiled two new flavors, they decided it was also time for an image update. To handle the task, they hired Concord, Ohio-based SiD Studios. Owner Bill Sintic’s four-person shop designed new graphics and revamped the ice cream company logo and packaging strategy.

“They were successful at retaining the same, familiar Pierre’s look that still works today, but enhanced the logo and typestyles to give it a more present-day feel,” explains Laura Hindulack, marketing manager for Pierre’s. “With that change came a consistency that carried across Pierre’s other lines as well.”

For those who would like to modernize their business image in the eyes of the public, the thought of a makeover might be an intimidating prospect. If you count yourself among those who have no idea where to start, Sintic offers some guidelines that will get you on the right track.

Evaluate your logo

The public will initially judge your company’s image from its logo. If you’ve had the same one for the last 15 years, Sintic says it is probably time to modernize a bit. Since it is the image that ends up on invoices, faxes, delivery trucks and employee uniforms, it is crucial to communicate a strong message.

“If it’s a stodgy or old look it needs to be updated,” he says. “The look needs to be contemporary. A look that represents companies you wish your company could be. If you own a small company that makes software, it would be ideal if you could look like Microsoft. We did that with one of our clients who sells software.

“They have 25 employees, but the first time people see it, they think of a Silicon Valley company.”

Brand everything

After you’ve settled on a logo, it is crucial to get maximum public exposure. That means incorporating the new design not only into your letterhead, invoices, business cards and marketing campaigns, but also company vehicles, product packaging and any corporate literature sales representatives present to potential customers.

“Everything needs to be very corporate and consistent,” explains Sintic. “That’s kind of the beauty of big companies like Nike and Pepsi. You can spot their TV commercials before they even start. They have that look and that feel. And you would never questioning buying a can of Pepsi vs. a can of Dr. Joe’s pop.”

Create a Web image

Even if you never plan to sell a product via the Web, creating a place where customers can receive an initial impression about your company online is another way to build brand recognition. Sintic says it is important your Web image is professional and communicates the same theme as your corporate literature and catalogs that are also in public circulation.

“More customers are driven to the Web. It needs to portray the same basic foundation that is laid out from the ground up, from their logo to their stationary,” he says. “It has to have a consistent look and feel. The wording should be consistent and it should be a total package.”

Keep it fresh

After putting a load of work into a new image, the sad fact is your corporate logo will eventually go out of style. Consider how the brand images that define Coke and Pepsi have changed over the years.

But, after building brand recognition, you may not be so fast to deep-six a recognizable logo. Sintic doesn’t think you have to do that. Just be sure to periodically modernize the look and feel of your image.

“You can bank on the investment you’ve made for three to five years, something in that neighborhood,” he says. “You don’t have to think about doing it every year, but there should be an evolution.”

How to reach: SiD Studios, www.sidstudios.com

Jim Vickers (jvickers@sbnnet.com) is an associate editor at SBN.

Monday, 22 July 2002 09:37

Juris prudent?

It's not as if discrimination lawsuits have ever been a walk in the park, but it used to take solid evidence of wrongdoing to get them before a jury.

That changed in June, when the U.S. Supreme Court unanimously ruled that indirect evidence of discrimination, if strong enough, is enough to send a case to trial.

What's it all mean? Attorney George Crisci, a member of Ulmer & Berne's Employment Labor and Law and Public Law Groups, expects the decision will up the ante when it comes to settlement talks between disgruntled employees and their former bosses.

"It's going to increase the risk that employers take every time a case goes to a jury," he says. "It's going to increase how much it's going to cost to settle, because plaintiffs now have a greater opportunity to win these cases."

The case that prompted the recent Supreme Court decision involved a Mississippi man who worked for a toilet factory for 40 years before being fired by a much younger supervisor. A jury awarded the man $100,000, but the U.S. Circuit Court of Appeals overturned the decision, ruling that there was not enough direct evidence of age discrimination. In fact, the only comment about age brought to light during the case was the fact that the supervisor had once said the plaintiff was "older than the Mayflower."

The Supreme Court said, however, that direct proof of an illegal motive is not always required for a successful age discrimination lawsuit. Writing for the court, Justice Sandra Day O'Connor said a federal appeals court wrongly relied on "the premise that a plaintiff must always introduce additional, independent evidence of discrimination."

While the decision most likely won't lead to a landslide of discrimination cases, Crisci says business owners who find themselves in the cross hairs will likely be caught between a hefty payout to settle or the uncertainty of a jury's decision.

"When you send it to a jury, anything is possible," explains Crisci. "And, if you get an adverse verdict, it's very hard to overturn."

The only way for business owners to protect themselves is with thorough documentation of each and every disciplinary action taken against employees. For years, Crisci has been telling businesses to document, but says that now it is absolutely crucial to have the ammunition to defend yourself if you get hauled into court.

"That is going to be the only sure way that you have to be able to win one of these cases either on summary judgment or in front of a jury," he explains. "You're going to have to prove that the reasons were true and justified and that's the practical impact of it. "You just can't make decisions that aren't supported by solid evidence." How to reach: Ulmer & Berne, www.ulmer.com

Jim Vickers (jvickers@sbnnet.com) is an associate editor at SBN.

Monday, 22 July 2002 09:36

Lessons in love

At first, nobody knew what to make of Jennifer Downey's small Northeast Ohio chain of Ambiance stores.

Despite the company's profitability, banks were more than a little wary about extending thousands of dollars in financing to a business that counted lingerie and massage oils among its assets.

Over time, though, Downey was able to convince the bankers she worked with that they wouldn't end up selling the contents of her store from the back of a truck. Four years ago, Downey sat down with SBN to share how she secured the loans that allowed her to grow her chain of Ambiance stores. Today, she operates six locations across Northeast Ohio, with two more slated to open this fall.

But it's the long-range blueprint for growth that is even more impressive. Downey plans to open 10 stores in the next 18 months and move beyond the company's Cleveland roots. After that, her only plan is to keep growing -- a move that will admittedly require Downey and her husband and co-owner Henry Keiluhn to rely more on outside investors for financial backing.

"We see this concept is not out there yet," explains Downey, who just moved the company's headquarters from Parma to a larger building in Middleburg Heights. "There is going to be a market leader in this industry and we want it to be us."

So, after 19 years of steady growth financed largely by astute cash flow management, Downey is making serious plans to take her concept national. And in the evolution from a small regional company to one with an eye on new markets, Downey has learned how to deal with the inevitable pains that accompany business growth. She offers four ways other owners can do the same:

Spend money to make money

Sure, it may be the one of the oldest business adages in the book, but Downey was reluctant to sink money into an expensive inventory software program six years ago, even though it promised to cure problems she had keeping her stores' most popular products in stock.

Occasionally, some items would be out of stock for two, three, even four weeks at a time. Downey ultimately decided she simply had to invest in an automated reordering system if she hoped to maximize revenue for her stores.

"I bought this inventory program that was way over my budget," she recalls. "I couldn't believe it would bring us any money, but it has. It helped me tremendously increase the turn on my inventory, increase my margins, and I always have things in stock that I didn't have before."

Stick to the business plan

To ensure her company's growth would not be limited by the inability to secure loans, Downey worked hard to build a strong case for why her business concept was a safe investment. When she originally went to the bank for a $225,000 loan to open her fourth store, she was met with some reluctance.

Since then, it's been easier, not only because the company is more well known, but because Downey can show increased profitability and revenue as proof that her business plan is a viable one.

"They've seen us grow, they've seen our financials for almost 20 years and they see that we have done what we said we were going to and have watched us increase our business," says Downey, who notes she and her husband have worked with the same bank for 19 years. "I think that's why it's so much easier now."

Always keep an eye out for good people

Finding workers is hard for everyone today, but the retail sector is one in which the need for dependable help is at an all-time high.

"Not everybody wants to work retail now," explains Downey.

She has tried to combat the problem by constantly interviewing and meeting with people who express interest in working at one of her Ambiance stores. But, like many of her retail brethren, the tight labor market has forced her to get downright aggressive when it comes to finding workers, especially for open management positions.

"We interview store managers every time somebody sends us a resume," she says. "We have a sign in every store, in every window, all year long, that says 'accepting applications, inquire within.' We also run a lot of classified ads and use cold calls."

Don't try to do it all yourself

When there were only two Ambiance stores, keeping a handle on them was easy. Downey was in charge of one, while her husband operated the other. But as the company grew, it was obvious that level of control could not be maintained.

Downey admits she and her husband battled to keep up with all the work for a while, but eventually learned that delegating and outsourcing jobs and responsibilities was the only way to deal with the growth.

"I used to do everything," she says. "Now we have a bookkeeper, a warehouse manager, we've even hired someone to do our windows. There are all these jobs that you have to outsource, because you just can't do it all." How to reach: Ambiance, (216) 676-0669

Jim Vickers (jvickers@sbnnet.com) is an associate editor at SBN.

Monday, 22 July 2002 09:36

It's who you know

If there's a moral to John Kaplan's story, it is never underestimate the power of your business contacts.

What Kaplan started as a side interest 12 months ago has blossomed into a viable Web hosting company fueled by the young entrepreneur's ability to strike the right deals with the right people.

"It was pure hobby," explains Kaplan, who founded Cleveland-based EarthISP Net with his 26-year-old business partner, Aaron Hawk, in 1999. "We didn't plan to be where we are right now."

The entrepreneurs have set up shop on the 12th floor of 1621 Euclid Ave. in the Keith Building, one of the most wired buildings in the city and home to MCI WorldCom, ICG Communications and a host of local Internet Service Providers.

Here's how Kaplan, who spent his teen years hanging out at his local ISP in Ashtabula instead of flipping burgers or bagging groceries like others his age, became familiar with cyberspace and used his connections to go into business.

Be in the right place

Kaplan became familiar with the Keith Building while working at Cleveland's APK Net. Eventually, he left the job, only to return a short time later with a host of questions about buying his own server. The part-time gig, it appears, left an indelible impression on his young mind.

A few thousand dollars later, he was hosting the Web site for Cleveland's Graphik Factory design firm and fielding calls from would-be customers who visited the site and needed similar services.

Make the right connections

One of those inquires was from Media Design Imaging, a Cleveland company that needed a Web hosting service that could handle the load of information it wanted to put on the Web, including video clips of films and documentaries on which it was working.

A deal was arranged, and it wasn't long before Kaplan and Hawk became friends with MDI owner Johnny Wu and hit the trade show circuit with him to get the name of their new Web hosting company, EarthISP Net, in front of the public.

"The response from going to a little tiny show with Johnny and MDI was just amazing," recalls Kaplan. "We had three people who wanted dedicated servers from one small, tiny little trade show."

The relationship with MDI also caught the attention of the independent film community in which MDI works and helped Kaplan find investors to foot EarthISP Net's recent $150,000 hardware expansion.

Find the right location

As far as landing the prime piece of real estate, Kaplan struck a partnership deal with his former employer in an agreement that will allow the young company to rent space for its equipment in exchange for selling some APK Net products with its Web hosting packages.

EarthISP Net has landed clients in Atlanta, Miami and Los Angeles and plans to continue targeting its services toward radio stations looking for full-service hosting for everything from Web pages to streaming audio.

"We already have tiny little branches out there," says Kaplan. "But, they're growing."

And as for making new connections, Kaplan's on the prowl to build more relationships to help him further his company's success. How to reach: EarthISP Net, www.earthisp.net

Jim Vickers (jvickers@sbnnet.com) is an associate editor at SBN.

Monday, 22 July 2002 09:36

Electronic cornerstone

Robert Fortney lives by one adage when it comes to construction work: the thickest file wins.

No matter how many general contractors are bidding on a project, Fortney knows it is the firm that comes to the table with the most subcontractor bids that will almost always be able to provide the best deal.

It was this rule of thumb that led the president of Fortney & Weygandt Inc. to ask his company's base of subcontractors last year to make the necessary preparations to do business with his company via the Web, a move that would streamline the bid process and allow more participation. What he didn't expect was the overwhelmingly positive response that spurred the immediate development of www.fwprojects.com.

The efficiencies created by the Internet initiative convinced Fortney to take the concept of online bidding nationwide with a second site, www.constructionbidding.com.

Fortney is not the first one out of the gate with the idea, but his model seems to be among the more solid. His www.constructionbidding.com requires no annual membership fee; the costs of the Web service are passed on to the parties who will be saving money by using it. In the end, putting a project up for bid is less expensive and more subcontractors can participate, resulting in more competitive prices.

Most other online bidding services are geographically based and require annual subscriptions, two characteristics that Fortney believes hold those concepts back. Moreover, his is the first site to place plans and specifications on the Web for downloading and printing by those interested in bidding on a project.

"Everybody who's seen it likes it. It's just that it's a bit of a slow sell because it involves people changing the way that they think," explains Fortney. "More and more people are using it and, as they use it, they like it. Everybody realizes it's something that's going to happen, they just aren't a thousand percent ready for it to happen right now."

Nevertheless, www.fwprojects.com and www.constructionbidding.com together snare an average of 40,000 hits and 4,000 user sessions a week without any unified marketing effort to date. Fortney has tabbed a team to draft an advertising strategy, and has already made moves to protect his concept by applying for a business method patent similar to claims staked by online players Amazon.com and Priceline.com.

Innovation for Fortney, however, goes much farther than two new Web initiatives. For the past decade, he has run his company with an eye on constant improvement and streamlining, whether it be a single-entry software overhaul or building an environment in which his workers are encouraged to suggest ways to improve the company. The Internet strategies, it turns out, are just manifestations of the innovative culture Fortney has built over the years.

>"I think the entire way that we look at business is innovative," explains Fortney. "The entire way that we look at things long-term instead of short-term and that we're looking for constant improvement in every area. We're very productivity and efficiency conscious and gearing yourself that way demands that innovation happens." How to reach: Fortney & Weygandt, (440) 716-4000

Jim Vickers (jvickers@sbnnet.com) is an associate editor at SBN.

Monday, 22 July 2002 09:35

Services for hire

Somewhere along the line, the traditional bean counter turned into a "financial services" expert.

There have been a lot of changes in the accounting industry lately, most notably the addition of new services to the bookkeeping and tax preparation that had been every CPA's bread and butter.

"I would imagine that a lot of it is a need to leverage basic accounting services into, we'll say, higher mark-up services that are more profitable to deliver," explains Tim Fogarty, chairman of the accounting department at Case Western Reserve University's Weatherhead School of Management. "The large Big Five firms have been very successful at using base-level accounting and tax services as a kind of foot in the door."

As technology shrinks the profitability of older CPA services, new ones are being born every day. However, figuring out what your company needs in a financial services firm can be intimidating in the face of so much change.

If you're new to financial service companies or you haven't had to choose a new firm lately, here are a few points to consider when shopping your company's business around.


Mergers in the financial services industry are here to stay. In fact, some experts predict that within 10 years, 60 percent of the CPAs practicing today will work for a public company. That means a lot of smaller firms are still to be swallowed up.

So, if you're more interested in dealing with a small firm than a large player, figure out whether it has a plan to hold its ground in the face of such rapid change. If not, it may end up on someone's acquisition list.

Regulatory changes

It's very likely your CPA will want to keep track not only of your finances, but your investments as well. Regulatory changes allowing CPAs to accept fees and commissions opened a new revenue stream for the industry and have fueled the trend of accountants reinventing themselves as investment advisers.

One-stop shopping

It's a reality of the modern American economy. People do not want to visit more than one store. That's how the Wal-Mart and Home Depot chains got so popular so quickly.

The accounting industry is no different. A modern financial services firm will likely offer a host of services ranging from payroll processing to consulting services. Before hiring a firm, determine the specialty services you need. More than likely, you'll find somebody that offers them.

An Accounting Today study found litigation support, business valuations, heath care consulting and technology consulting topped the list of services provided by today's financial services firms. How to reach:Case Western Reserve University Weatherhead School of Management, (216) 368-2030

Jim Vickers (jvickers@sbnnet.com) is an associate editor at SBN.

Monday, 22 July 2002 09:34

Strength in numbers

When Tomas Weisz invited his customers to Cleveland for a client meeting more than a decade ago, barely enough people showed up to fill a small conference room at a local hotel.

Only 15 people accepted his invitation that first year to learn more about the TMW tracking software they used to run their businesses.

Today, however, with a dozen client meetings under his belt, Weisz says those days are gone. Last month, more than 400 TMW customers converged on downtown Cleveland for what has become an annual event for Weisz -- the TMW User Group.

Between roundtable discussions and product meetings, his customers also get a taste of life on the North Coast through a host of social events in the evenings that include a dinner at the Cleveland Metroparks Zoo and a cruise along the Cleveland Waterfront. It is, undoubtedly, a lot of fun, and also living proof of the viability of Weisz's strategy for staying connected with his clients.

"One thing about our business is all of our clients are all over the place," explains Weisz, CEO of TMW Systems, a Beachwood-based company that creates the tracking software that keeps a large chunk of the nation's trucking industry on the road and on time. "Trucking companies tend to be outside the big metropolitan areas. People come here to work and say they want to travel. We say you'll travel, but you're not going to London or France, you're going to go to places like Big Moose, Ontario."

Weisz discovered while doing business with this geographically diverse base of clients that many of them had tweaked the TMW software system to fit their individual needs. What surprised him most was that his tracking system was being used to create efficiencies that Weisz's own staff didn't expect.

It didn't take him long to realize that he needed to find a way to share that information with all his clients.

Creating an annual user group meeting is a labor-intensive endeavor for the TMW staff, but it has proved to be the best way for Weisz to build customer loyalty while also finding new ways to improve his product. But calling together your best clients for an intensive four days of work and fun can be a challenging experience. Weisz understands that.

And for others who may consider a similar undertaking, he has plenty of advice.

Plan year round

Roughly 75 percent of Weisz's staff spends the 30 days prior to the annual meeting handling tasks related to the event. However, there is never really a down time the entire year, a time when at least someone within the company is not working to prepare the next user group.

The event is usually scheduled for the end of September or beginning of October. By November, client evaluations are compiled and work begins on planning for the following year. However, Weisz says the only time he really feels the crunch from the workload that goes into each event is in the month leading up to it.

"The biggest problem is being able to give everybody enough time to prepare for their classes, prepare for their user group, and that's fine," he says. "Taking a month off and having three-fourths of the staff involved in the planning is a significant investment and it's not something we immediately recoup."

Originally, Weisz planned to have his user meetings twice a year before he realized the intensive labor would take too much time and energy from his staff. Still, if he was going to unveil new products at the annual meeting, he needed a mechanism in place to allow for debate on possible upgrades and changes during the course of the year.

The solution he devised was the formation of a steering committee for each of the trucking lines TMW serves, like bulk carriers or flatbed trucks, for example, composed of clients in each of the sectors who could commit to meeting on a quarterly basis.

"This is kind of like the Oscar night for us," explains Weisz of the planning that goes into the event. "At the user group, we report on what the steering committees did in the last year and then we talk about what we're going to do the next year and about new products that are coming out."

Develop valued-added benefits

TMW operates in a market with such tight profit margins that Weisz knew from the start the company would not be able to afford to pay for their customers' trips to Cleveland for the user group.

Instead, he decided early on to create a line-up of speakers and events that speaks for itself. He tries to create an event that his clients see as a business trip that is worth the $895 price tag.

"We only wanted to do it if people saw value in it," says Weisz, who adds that 400 people attended this year's event. "And the way that they recognize value is by saying, 'I'm going to come here and pay for it.' Fortunately, we've been able to generate a value for them."

This theory worked from the start, but along the way, Weisz also decided he wanted the annual gathering to be a valuable place for networking and striking deals. Initially, Qualcomm approached him about sending representatives, who could use the event to find new clients and showcase their products. Today, more than three dozen suppliers to the trucking industry attend the user group, creating a "mini trade show" environment.

Meanwhile, Weisz says it is not uncommon for CEOs of trucking companies to cut partnership deals with industry colleagues they meet during the user group.

"It all started with this idea of really exchanging information," he says. "People sometimes form partnerships after the meeting. It's kind of a big family and everybody kind of understands each other's business because there are a lot of similarities in the way various customer run their business."

Create champions for the cause

The biggest obstacle to successfully pulling off an annual client meeting is convincing people it's a worthwhile investment of both their time and money, especially during the first year of the event.

Fifteen years ago, Weisz picked up the phone and lobbied the CEOs of the trucking companies he worked with to send someone. Today, the repeat interest in the event -- Weisz estimates nearly 60 percent of the companies who attended his first user group still make the trip -- sells itself, for the most part.

When asked to offer a bit of advice to CEOs in similar industries contemplating their own annual meetings, Weisz suggests finding an ambassador of sorts outside the company who understands the value of the event and will rally others in the industry to attend.

"Pick a guy from your customer base who would be a great champion for you, so you could not only share the work but add credibility to it and give it to you from your customers' point of view," says Weisz. "Pick somebody and name them chairman of the event, even if you have to assign some staff members to the person."

That is also the way Weisz found members for the steering committees that he keeps populated by the relationships he has built with clients at the annual user group. Because, as Weisz says, it is having a drink after a user session or standing next to someone in the buffet line at dinner that often provides the good old-fashioned networking opportunities necessary to keep each of TMW's steering committees fresh and fully staffed.

"We all try to encourage people we think would be good for it," explains Weisz. "All the real work gets done in the smoke-filled rooms, except they're not smoke-filled anymore." How to reach: TMW Systems Inc, (216) 831-6606

Jim Vickers (jvickers@sbnnet.com) is an associate editor at SBN.