Kelly Tomkies

Thursday, 31 October 2002 10:22

Gaining control

E-mail is convenient and easy to use, but it also presents data storage problems and legal concerns.

"E-mail can take up quite a lot of space on a server," says Jeff Tujetsch, vice president, product development for Sherpa Software in Pittsburgh.

So how long should you retain e-mails? Tujetsch says that depends on your business's needs.

"Some companies keep their e-mails on file for 10 days, others for years," he says. "There's no vanilla way."

Software like Sherpa's Mail Attender lets an administrator enforce the company's e-mail retention policy. It can also search for e-mails that contain a certain word or phrase, which comes in handy if a company wants to pull all electronic documentation pertaining to a particular employee, product or situation.

"If it is needed, Mail Attender can prevent the user from editing or deleting his or her e-mail," says Tujetsch.

Inappropriate e-mails, such as those that contain pornography, can also be a problem. The solution is software that allows the company to search for those e-mails and alert the administrator.

"The administrator can either move them offline or delete them altogether," says Joe Ogrodnik, Sherpa's president and CEO.

It all boils down to a company defining its e-mail policies and needs, then finding the best software to meet those needs.

When managing your e-mail system, consider privacy. You need to find the right balance between protecting your firm and maintaining employee confidentiality before you design your e-mail management system.

"Software is a tool that can help enforce the company's system," says Ogrodnik. But even with the right tools, "it's up to the company how they use them." How to reach: Sherpa Software, (800) 255-5155 or

Monday, 30 September 2002 09:14

Balancing act

As with any business, The Ohio State University Athletics department has bills to pay and a bottom line, says Athletic Director Andy Geiger.

"I think any enterprise needs to run like a business," says Geiger. "You're never exempt from the issues of the day -- paying bills."

Geiger says the athletic department generates revenue and has to balance its budget. The primary difference between the athletics department and a business is that the department gets to spend most of the money it earns.

"We're doing well, though we tend in our business to spend most of the revenue on programs," says Geiger.

That's because, as a public institution, OSU is tightly regulated and required to offer special programs for its constituents, he says.

"Title IX programs figure aggressively in our spending. We add activities that do not generate a profit but help us meet the law," says Geiger. "In business and industry, that's called a loss leader."

So how does Geiger balance generating revenue with meeting students' needs?

"That's the art of management," he says. "Running a successful college athletic program and getting it to mesh academically is the fun for me as a manager."

Geiger finds that balance by remembering the athletes are students and the primary responsibility of the university is to prepare them for the rest of their lives.

"We're not independent of university accounting and principles of good management," says Geiger. "We work together to create terrific experiences for our young people."

So does Geiger predict a winning season for the Buckeyes?

"The true and honest answer is, I don't know. That's why we schedule the games -- to find out. I hope we do well." How to reach: The Ohio State University Athletics Department, (614) 292-2477

Monday, 30 September 2002 09:06

To catch a thief

Most employees are honest and would never consider stealing from your company. But others will steal from your firm and every other one they work for.

How can you be sure an employee isn't embezzling from you?

Often it's the employee you'd least suspect who is the culprit, says Heinz Ickert, president of Columbus-based Ickert & Co. Ickert's firm employs CPAs trained in forensic accounting and is part of a group of companies that form an entity called Fraud Alliance. Weidner Associates, private investigators, and computer forensic expert CompuSloop complete the Alliance.

"Most frequently what is being stolen is cash," says Ickert.

And the vast majority of incidents involve fraudulent disbursements.

"An accounting person creates a fictitious employee or vendor and pockets the paycheck or payment," he says.

Companies like those involved with Fraud Alliance can conduct an audit of a firm's records and question suspicious transactions.

"A CPA doing a regular audit is not looking for this type of problem," says Ickert.

Glen Morrow, president of Morrow-Mackey Inc. in Heath, says that thanks to an employee tip, his company was able to recover 100 percent of the cash that was misappropriated.

"Glen Morrow was smart," says Ickert. "His first action was to call his attorney, who called me."

Once Ickert completed the audit, he confronted the employees responsible for the embezzlement. Both confessed, and they turned over the funds. Unfortunately, this is not a typical result.

"In a civil suit against the perpetrator, you can typically regain about a third of the money stolen," says Ickert.

To prevent theft at your firm, Ickert recommends keeping accounting functions separate, or incorporating checks and balances.

"Do comparison checks like Social Security numbers of employees and tax IDs or addresses of vendors," he says. "And make it known you have a zero tolerance theft policy."

And, says Ickert, if you suspect an employee, do not confront the person or fire him or her, especially if you don't have evidence. Instead hire an investigator to determine whether the person is indeed embezzling. How to reach: Fraud Alliance, (614) 464-3343

Wednesday, 31 July 2002 11:31

Web applications

Most businesses have discovered that a Web site is a valuable marketing tool. But is your site doing all it can for your company?

"There is so much more a Web site can do beyond marketing," says Rob Pettit, president of LSYdigital, a discipline of Lord, Sullivan & Yoder of Columbus. "It can really change the way a business functions."

Pettit cites sales training as an example.

"It's hard to get your sales force in for training because you want them out selling," he says. "But you also want them to use every tool in their arsenal to teach the prospective client more about the company."

In response, LSYdigital created a sales training CD for a client with sales teams worldwide. Its salespeople found that customers knew more about their site than they did. Since a number of interactive customer tools are accessible from the site, it was imperative the sales team become more knowledgeable.

Pettit says any company required to supply Material Safety Data Sheets (MSDS) can benefit from having them available for downloading.

"If an employee has a spill at 2 a.m., he doesn't have to wait until the next day to report it," says Pettit.

And offer clients access to their accounts through your site.

"Depending on how your current internal system is set up, placing your billing and accounts receivables system online can make it more efficient," says Pettit. "Clients can check to see if a payment has been credited or what is outstanding on the account," saving administration time.

With today's security technology, the risk to company information online is minimal.

"Some companies resist out of fear of hackers," says Pettit. "But with a secure system and due diligence on the part of the company, they shouldn't be afraid." How to reach: LSYdigital, (614) 846-8500 or

Wednesday, 31 July 2002 11:23

Vitrual insurance policy

More consumers are looking for insurance online, especially automobile insurance. That's good news for companies such as Nationwide Insurance.

Although it was a late entrant into the race to serve customers online, Nationwide has been steadily gaining ground against its competitors. There is, however, a major difference between the model of the $29 billion Nationwide and that of its top two competitors, Geico and Progressive.

That difference is agents, who are helping Nationwide hold on to its market share and make the most of its Web site.

Although the number of visitors to its site is growing, the majority of Nationwide's customers in the 46 states it serves still prefer the old-fashioned means of conducting business -- via an agent.

"In general, people use the Internet to gather information and shop for insurance, but most still prefer to purchase a policy from an agent," says Nationwide CIO Michael Keller.

"Agents are and will remain an integral part of our business as our primary distribution channel," he says. "The Internet serves as an enhancement to our agents and the superior service they provide. Customers want to be able to do business on their terms, whether it's with an agent, over the phone or on the Internet, at noon or midnight. We strive to do business when and how our customers want."

The Internet has allowed the company to remain competitive with Geico and Progressive, which both have a strong Internet presence. Geico sells directly to consumers without agents and Progressive does have agents. But both companies encourage consumers to either conduct business by phone with a customer service representative (any rep will do) or via the Web- with no personal contact with a rep at all.

However, the value of human contact is beginning to come into focus.

"The other big players are starting to send policyholders e-mail responses with a particular customer service person's name, so the policyholder doesn't feel like his transaction just went out to cyberspace with no one receiving it," says Tim Carpenter, a research analyst with Gomez, an Internet quality measurement company in Waltham, Mass.

E-volution of the site

The Nationwide Web site has come a long way since it launched just three years ago as an information only page. Since then, it has evolved into an award-winning site.

Internet site rating company Gomez has ranked its site in the top three the last two years for ease of use and in its overall ratings of insurance carriers' sites.

Ed Nail, Nationwide's associate vice president of technology services, says when the site launched in 1999, its first order of business was to get policyholder and consumer feedback and fine-tune the site.

"Access and ease of use were the two aspects that we focused on first," says Nail.

Nail says that in its quest for improvement, the company does a complete site redesign every year. Future changes could include wireless connectivity through PDAs and Net phones, as well as customization.

When the site is fully customized, it will recognize policyholders and customize content appropriately.

"Our studies with both customers and noncustomers show us that we need to constantly enhance the site with respect to content," says Nail.

Doing business online

So why are so many consumers turning to the Internet for insurance?

"It's a great convenience factor," says Susan McManus, director of marketing and usability at Nationwide. "On our site, you can get a quick quote in less than three minutes or a full quote in 10 to 15 minutes."

Carpenter says there are three reasons consumers access an insurance company's Web site.

"They already have a policy and want to look up their policy or make changes, they want to get a quote or they want to get familiar with the company," he says.

And since the quote process can lead to new business, it is critical that it be fast and accurate.

"We've also added some features that put the customer in control of his or her policy," says McManus. "Customers can find an agent online, pay a bill, get a quote or file a claim."

Room for improvement

Carpenter says there are several steps Nationwide can take to lead it to that coveted No. 1 spot in Gomez's rankings.

"There are tools a site incorporates to prevent the user from hitting obstacles that prevent them from completing an application," says Carpenter. "In Nationwide's case, those tools could be integrated a little better in the process."

He says the Web sites of other leading companies offer policyholders immediate adjustments to existing policies and allow them to view the cost of the change before enacting it. Nationwide's site does not yet offer this feature.

Carpenter also suggests Nationwide offer electronic document delivery, providing customers with all their documents electronically vs. sending them in the mail.

"Electronic document delivery is another area where we see the industry going," says Carpenter. "And this is another area where Nationwide can improve."

Nail says his company plans to continue to improve its Web site and is on its way to being ranked No. 1.

"And we don't consider it a question of if that will happen, but when," he says.

Gomez's overall rating of insurance carriers' Web sites
State Farm Insurance
GE Financial Network
Electric Insurance Co.

Gomez's ranking of insurance carriers' sites for ease of use
Electric Insurance Co.
GE Financial Network
State Farm Insurance

Gomez Web site

Friday, 28 June 2002 07:35

Meaningful meetings

The key to a successful corporate meeting is knowing what you hope to get from it before it starts, according to professional meeting planners.

"We start by asking the client what they really want to accomplish," says Woody King, owner of Destination Management and Marketing. "Once your objectives are established, the meeting can be planned more effectively."

There is no one-design-fits-all plan for ensuring an effective meeting. Factors to consider include the ages of participants, their gender and what positions they hold in the organization.

"All of those demographics influence the choices you'll make," says King. "The theme and design of the meeting, as well as the detailed execution, comes from the up-front understanding you gain from this information."

And it's important to share the purpose of the meeting with the attendees, says King.

"Tell the attendee why the meeting is important. If you can't do that, you won't get his or her attention and buy-in," he says.

Chris Curry, owner of Destination by Design, agrees that having a clear-cut goal for the meeting is critical to its success.

"You need to define the meeting's desired results and then come up with objectives to make them happen," Curry says.

Devil's in the details

Plan the meeting well in advance.

"Successful meetings are not planned in days, especially if they are for large groups," says Curry. "Some hotels are booked two or three years out."

King says the average lead time for meeting planning is from three to six months, depending on the meeting type and size.

And before you put it together, define the budget for every facet, including the location, food, speakers and gifts.

"Knowing your budget is another key part of planning," says Curry. "And you have to have more than an overall number. Have it broken down by category, food, equipment, etc., in targeted ranges that match the goals. In other words, don't plan a hot dog dinner at a formal meeting."

Flexibility is important.

"There is a great deal of detail to oversee when planning a meeting," King says. "Select a date and site, but be flexible on these."

Once you've narrowed your location choices, get references from planners who have conducted meetings at those places.

"It always helps to find out what some of the pitfalls and benefits were of using that facility if you haven't used it before," King says.

And always have a back-up plan.

"It's a good rule of thumb to have a contingency plan for everything," says King.

Executing the perfect plan

Once your meeting is set, communication and follow-up are essential.

"Take the time to have a pre-conference meeting," says King. "Remind everyone of what their responsibilities are and discuss food and security issues, ground transportation and even the accounting."

That means knowing who can sign the master account and who can't, and who will review the bills.

And make sure there are accommodations for attendees with disabilities.

King recommends all department heads, the sales staff and the general manager of the hotel attend the meeting, and that hotel staff, including telephone operators, get the word about any VIPs attending. The pre-conference meeting can take place as late as the day before the scheduled date, preventing potentially costly mix-ups the day of.

"It pays to make sure all the bases are covered," says King. "When you don't think through all the details, you'll get no return on your investment."

For especially large meetings, Curry recommends the services of a professional planner.

"It can be a full-time job planning big meetings," he says. "Planners can save a lot of time and leg work. We can provide alternatives without the company having to make 150 phone calls to figure them out."

Curry says his company recently found a way to save a client $10,000 on its annual Family Day event.

"They took that money and used it to enhance the event," he says.

Looking for the perfect place

If your meeting is a large one with many attendees from out of town, a hotel or convention center is a logical choice for location. But how do you choose one that fits your budget and meeting needs?

Joe Bocherer, director of sales at the Hyatt on Capital Square, says knowing what's been done at previous meetings is vital to getting the best deal.

"A planner basically needs to provide us with a history of what's been done," says Bocherer. "Then we can take our facility and find a way to match what's been done or do it better. The more detailed the history is, the better. With a lot of information, we can put our best foot forward."

Bocherer also recommends flexibility in budget and accommodation requirements.

"We have 17,000 square feet of meeting space. If the planner can be flexible and use theater style seating instead of classroom, it allows us to maximize the space," he says.

Bocherer says the Hyatt offers the planner more than a place for the meeting; the staff can provide ideas if the theme is still up in the air.

"We become more of a consultant then," says Bocherer. "We provide the planner with pictures of what we've done in the past that can spark ideas."

If you're looking for a place that can pull together many venues, The Westin Great Southern Hotel partners with local theaters, restaurants and clubs to offer a complete package of entertainment and hospitality to its meeting clients.

"We are adjacent to the Southern Theatre, which has 900 seats, and attendees don't even have to walk outside to get there," says Juliann Beatty, the hotel's director of sales and marketing. "We are also next to the Pulse Nightclub and have hosted after-hours parties there."

The Westin also works with COSI and German Village and Arena district restaurants for entertainment and progressive meal packages. Beatty says some companies buy out the entire hotel and redecorate the lobby or other areas to match themes.

"We have turned our lobby into a disco and the second floor into a safari," says Beatty.

Like Bocherer, Beatty can help planners come up with unique and creative meeting themes.

"We work with so many local businesses, we can give them ideas for things they didn't know existed," she says.

Day tripping

If your meeting is of the small, one-day variety intended for local attendees, there are several location options to meet your needs. For example, a training meeting may require special equipment, computers and a convenient setting, while a retreat calls for a quiet, out-of-the-way spot with no computers or equipment.

Here are some possible locations:

* Columbus Zoo and Aquarium (614) 645-3466

* Franklin Park Conservatory (614) 645-1800

* Cherry Valley Lodge (740) 788-1200

* Schottenstein Center, OSU (614) 688-3939

* Greek Orthodox Cathedral (614) 224-9020

How to reach: Destination Management and Marketing, (614) 785-0605; Destinations By Design, (614) 798-9857; Hyatt on Capital Square, (614) 228-1234; Westin Great Southern Hotel, (614) 228-3800

Friday, 28 June 2002 07:28

Unlimited potential

Four years ago, Les Wexner, CEO of the Limited Brands, looked at his powerhouse retailer and women's apparel conglomerate and decided it was time for a change.

Wexner, who founded the firm in 1963 with a single Columbus store called The Limited, realized that after several years of acquisitions, it was necessary to break off several of the brands he had folded into the company, including Abercrombie & Fitch and Lane Bryant, in order to solidify the brands and strengthen the corporation's balance sheet.

That began a string of spin-offs and divestitures that continued until earlier this year, when the company shifted directions yet again -- making a series of moves that included changing the company's name.

In May, The Limited officially became Limited Brands. But it was not just a simple name change.

The corporation also announced it was buying back the approximately 17 percent of Intimate Brands shares that it didn't already own. Because Intimate Brands Inc., which controls the Victoria's Secret and Bath & Body Works brands, accounts for 90 percent of The Limited Inc.'s operating income, the announcement came as no surprise.

For each one of the 72.6 million shares of Intimate Brands tendered to the company, shareholders received in return 1.1 shares of The Limited stock.

"The recombination makes us a more balanced business," said Limited Brands chairman and CEO Les Wexner at the company's annual meeting in April.

But the move is about more than just balance. It's about cost savings, leveraging resources and centralization. More important, says Wexner, it's about enhancing shareholder value.

Ironically, that's something the company's four-year divestiture was supposed to accomplish. So why reverse direction?

The formation of Limited Brands allows the company to avoid having all of its revenue flowing from one retail sector. According to Wexner, under the new arrangement, 45 percent of Limited Brands' revenue is expected to come from apparel, 27 percent from intimate apparel and 28 percent from cosmetics and packaged goods.

"The balance in our portfolio is important," says Tom Katzenmeyer, vice president of investor relations. "We're in fashion apparel, lingerie and personal care. It takes the risk out to be in the three categories."

According to Katzenmeyer, the move will save investors about a penny a share in costs because with just one company, there will no longer be a duplication of listing fees, legal fees and other expenses. And the buyback has been good for investors in another way. Last October, shares of The Limited stock were around $9; after spiking at just over $22 at the time of the name change, shares of Limited Brands last month were in the $20-range.

But Katzenmeyer says money was just one reason.

"There are benefits all across the board," he says. "We are narrowing our focus to a handful of very powerful brands."

The centralized corporation has the benefit of sharing resources, which legally couldn't be done before.

"The new company structure allows us to move people and ideas seamlessly with no legal considerations," says Katzenmeyer. "If Express wants to introduce its own fragrance, it can go to The Limited for that expertise."

Operationally, Katzenmeyer says there won't be many changes. Each company will retain its own CEO and operating committee, all administration offices will remain housed in Columbus, and no store closings or layoffs are planned.

The story

The Limited made its first public stock offering in 1969, and in 1980, it began introducing additional brands, starting with Express, then adding Lane Bryant, Henri Bendel and Lerner. By 1988, it had launched Limited Too and acquired Abercrombie & Fitch.

By 1995, The Limited represented a conglomeration of companies and brands. That same year, it offered a partial IPO of Intimate Brands, a company which includes the Victoria's Secret and Bath & Body Works brands.

The partial IPO established Intimate Brands as an independent public company, while The Limited retained control of 83 percent of the stock. At the time, Intimate Brands represented 72 percent of The Limited's operating income and 57 percent of its market capitalization.

"We spun out Intimate Brands to get a market value put on it," says Katzenmeyer.

The Limited was in acquisition mode until 1998, when it began divesting itself of some of its holdings. That year, it split off Abercrombie & Fitch. It sold off a 60 percent interest in Galyan's Trading Co. in 1999. And last year, it sold Lane Bryant.

What's left for the $9.36 billion retailer are higher-profit brands that match the company's new direction, new name and logo, and a respectable financial picture. It has changed its strategy to refocus on the market that made it a leader -- fashion.

"We are striving to be the world's best in fashion brands, brands that stay relevant and are sophisticated and forward-thinking," Wexner says.

The evolutionary process

Wexner said The Limited began redefining itself in 1998, and the old name was, well, limited, in its scope and ability to define the changing company.

"We felt at this point it was time to change names. We are building a family of the world's best fashion brands, an ambitious goal. Limited Brands recognizes what we are now in contrast to what we've been," says Wexner.

But this is just the beginning, he says.

"Clearly, there is much to be done," he says. "Building implies systematic, relentless change."

It's clear the company hopes that evolving from a decentralized group of separate companies into one centralized company will help build the market shares of the lower-revenue-generating companies that formerly fell under The Limited's corporate umbrella. To aid in the centralization, it has brought in new blood.

"We brought in talent from outside the organization, people from companies like General Electric and Pepsi, and each brought expertise in a particular function, like marketing, IT or real estate," Katzenmeyer says.

The result is a significant transformation that has helped lead the company to the best financial results in its history.

"We are reporting record earnings," says Katzenmeyer. "We've earned three times more than analysts expected."

So will Limited Brands mirror Intimate Brands' success? Katzenmeyer says that while the brands will not be marketed differently than they have been, the marketing channels may change.

"We are considering a test of Express on television," he says. "Right now, the only brand that advertises on television is Victoria's Secret."

And, he says, the company wants to expand the venues where Bath & Body Works and Express are marketed.

"We think Express will do well on the Internet, although it will take some time to launch the Web site," says Katzenmeyer.

All in the family

As a sign of the company's new direction, Wexner now refers to his company as a family of brands.

"The word family implies values and a particular behavior," he says. "It says that we will take care of each other. The potential advantage of family-like behavior is that we can collectively do more than we could as an individual. We have to be a family."

So how do analysts feel about the Limited Brands family? Dana Telsey, managing director of New York's Bear Stearns, says bringing Intimate Brands back into the fold was a good move.

"Given the significant contribution of Intimate Brands, the recombination was the right thing to do," she says.

Telsey says Limited Brands' future looks rosy.

"They have been one of the best performing retail stocks this year, and the outlook is quite positive," says Telsey. "I expect this performance to continue the rest of the year."

Telsey says Limited Brands' proactive management style makes it attractive to investors.

"The company finds ways for adding shareholder value," she says. "Given their large cash picture, I anticipate a share repurchase down the line."

The company recorded $1.4 billion in cash in its annual report, and that large cash balance kept the annual meeting a quiet one. When Wexner opened the floor to questions, one shareholder asked why the company keeps so much cash on its books.

"In uncertain economic times, it's better to be secure," he said.

That said, no one else had anything to ask.

"It's amazing how tripling your earnings per share can silence a room," Wexner said. How to reach: Limited Brands,

Limited Brands (Formerly The Limited) closed its fiscal year with this portfolio:

Intimate Brands Apparel Assets Equity Stakes and Other

Victoria's Secret Stores Express, Women's $416 million market value of

Victoria's Secret Direct Express, Men's equity stakes in public cos.

Bath & Body Works, The Limited $1.4 billion cash on balance

White Barn Candle Lerner/New York & Co. sheet

Intimate Beauty Corp. More than $3.6 billion in sales

2,000 stores

Limited Brands' mission statement:

Create a family of the world's best fashion brands to drive sustained growth in shareholder value.

Friday, 31 May 2002 12:40

Software scoop

The amount of business-to-business e-commerce is expected to grow in the next few years, thanks primarily to the increasing number of European Internet users, according to a Forrester research report.

Thirty-nine percent of Europeans now regularly use the Internet, double the percentage in 1999. With that increase comes the opportunity for American companies to expand their markets outside the country through the use of the Internet.

In anticipation of this increased demand for e-commerce applications, Microsoft has released Visual Studio .NET, a programming tool that allows data sharing across Web-based applications.

"It's very important for companies to have the ability to write programs quickly and inexpensively," says Gerry Miller, chief technology officer at Microsoft's Great Lakes District office. "Visual Studio .NET uses Visual Basic language and contains a tool set that enables programmers to write quickly and realize the fruits of their labor quicker."

Visual Studio .NET allows developers to assemble applications from new and existing code, regardless of platform, programming language or object model.

"There are other programming packages on the market, but no other is as complete as Visual Studio," says Miller. "There are 25 programming languages supported. You'd be hard-pressed to find a language not supported in the program."

Miller says other features in the program, including a dynamic Help feature that guides programmers to what they need, may boost developer productivity.

"The pre-built code you get with Visual Studio .NET makes development easier," says Jeffrey Almoney, chief technology officer of Reynolds & Reynolds, which uses the software for its contact management product used by automotive retailers.

"The common language run makes it more reliable and gives you better memory management," Almoney says.

Almoney says Visual Studio .NET saves his company time and delivers functionality.

"It's got a nice debugging environment," he says. "Its usability is good and we can customize it to our needs."

Miller says companies will like the fact that applications developed by Visual Studio .NET can be accessed through the Internet via mobile phones, pocket PCs and other alternative technologies. How to reach: Microsoft Corporation, (800) 936-3500,

Friday, 31 May 2002 12:23

New economic lifeblood

No industry remains untouched from the virtual explosion of new technologies.

Even our state's leading industry, agriculture, has plunged into the technology pool with biotechnology. State and local governments forge ahead with new incentives to attract more life sciences companies, and existing organizations like Battelle and the Ohio State University are partnering to better Ohio's position as a biotech magnet.

But will the life sciences industry be our community's new lifeblood of revenue and development? The industry generates $10 billion in tax revenue and $11 billion in research and development spending nationwide, according to the Biotechnology Industry Organization. No one can argue that a piece of that revenue would not be welcome.

And with companies like Ross Laboratories and Cardinal Health poised to move on lucrative opportunities, the industry is a natural choice for business development.

But creating a life sciences corridor will take time. From discovery to approval, it takes about 10 years and millions of dollars for new therapeutics to hit the market. In the meantime, other states are launching initiatives to land these companies, and Pennsylvania is backing its initiatives with millions of dollars from tobacco settlement money. Do Columbus and Ohio have what it takes to compete?

Many people, like Battelle President and CEO Carl F. Kohrt, say yes. But we can't put all our economic eggs in one basket. While just the word "technology" brings dollar signs to people's eyes, not all technologies are successful. The life sciences industry is still a work in progress, with ethical issues and risks. It can't be considered a panacea for all our medical or financial ills.

There is no doubt the life sciences industry should be a part of our financial future. But we must also continue investing in other leading edge industries and companies. In our cover story, Kohrt appropriately says, "Life sciences is one growth area, but we are just adding another car to the train."

Friday, 31 May 2002 12:17

International considerations

Expanding your company's boundaries by going global is easier than ever thanks to the Internet.

But before you set up shop outside our borders, do your tax homework.

"You definitely want to optimize the value of your investment in other countries and make it more valuable," says Joe Bernot, international tax partner with Deloitte & Touche. "Taxes paid in foreign countries may reduce your U.S. tax liability, depending on the situation. If foreign taxes you pay are not creditable, you may be subject to double taxation, which erodes the return on your investment."

And pay attention to potential benefits obtained through tax treaties the United States has made with other nations.

"There are 40 to 50 treaties that can help minimize the tax burden," says Bernot.

Bernot cites the example of an individual or company that makes a loan to a company in the United Kingdom.

"The general rule there is that the interest on the loan is subject to U.K. withholding tax," says Bernot. "The treaty between the U.S. and the United Kingdom reduces that tax to zero."

Companies must also pay attention to where the profit from their activities is earned,.

"Let's say you set up a wholly owned subsidiary in Canada," he says. "The product is manufactured in the U.S. and sent to Canada for distribution. The price you charge the Canadian subsidiary determines how the profit is split between the U.S. and Canada, and determines which country gets the tax revenue."

According to Bernot, where the profit is taxed is important because Canadian taxes are generally higher than U.S. taxes.

Confused? Global tax considerations can be intricate and confusing, which is why Bernot recommends companies consult with an international tax professional prior to setting up business outside the United States.

"If a company ends up with a bad tax structure, it can be costly to unwind and clear up," he says. "If the company does its homework up front, it should be in a good position going forward." How to reach: Deloitte & Touche, (614) 221-1000.