Detroit (1202)

Sunday, 26 August 2007 20:00

Selling enthusiasm

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Marcie Brogan still wants to be a copywriter. Years removed from her first copywriting job in the advertising business, the CEO of Brogan & Partners Convergence Marketing still loves the daily grind of deadlines and fresh ideas. So Brogan takes that excitement to work with her every day at the $72 million public relations and marketing agency and tries to get that same spark out of her 60 employees.

And as the agency has expanded to include nine partners, Brogan thinks she might be able to make some time to get back to the copy desk — even if that end of her work has to be pro bono.

“I think you shouldn’t be leading a business if you don’t have that passion,” Brogan says. “You should just retire or find another business or demote yourself.”

Smart Business spoke with Brogan about how to build passion among your employees and why diversity has made her business better.

Q: How do you build passion with your employees?

One important thing is to show confidence that we are doing well, and we are able to beat out anybody and anything and any competition with smarts and savvy. A lot of times, we work long hours, and if we can’t get a client to go our way, it’s frustrating — so I have to show that passion for what we do.

We have lots of pressures, but advertising is not like being cardiologists or sending rockets to the moon, so we are permitted to have fun. And I believe in leading that fun, which leads to high morale.

That is the distinguishing and attractive characteristic of our agency — that we always say, ‘We don’t take ourselves very seriously, but we do take our work very seriously.’

Q: What is your philosophy on hiring?

After I figured out that I could never run a business as long as I thought that I was the smartest person in the room and the only one capable of doing every task, I decided I should be a leader rather than a doer.

I look for people that I’m positive are smarter and more talented than I am and who bring new skills to the business.

Q: How does diversity play into your staffing ideas?

I’ve spent many years trying to break down the white-bread-male feeling to this business. Not as a social adventure but because I think that advertising and marketing have to reflect the environment in which we live. It’s not a white-bread world, so we have to be able to understand the customers of our clients, and sometimes, it’s easier to understand them if the membership of your agency reflects those customers.

It’s not always ethnic diversity; it can be age, gender, religion, everything. We’re in a high-tech market in our North Carolina office, so we bring in younger, more technical people. I just think diversity is only a positive because it gives us better understanding and a head start on our clients and customers.

Q: What do you do to build teamwork?

One of the best ways of doing that is by sharing the profits of the agency in a way that makes people aware of how we make money and how their work causes us to make money or lose money.

We reward people on a monthly basis when we meet our income goals, and we reward them on an annual basis when we meet our annual profits. Sharing the money quickly creates teamwork. If their monthly extra money in their pocket and their annual compensation depends on it, then they’ll take better care of it.

Q: How do you deal with the staffing challenges that come in hard times?

Last year, we had to face downsizing, and in the Michigan economy, the ability to replace that instantly was hampered. So having to downsize was a very painful task for me and a leadership challenge in a way to do it humanely and a way to do it where we didn’t permanently hamper morale. The human aspect was my first concern, and then the business aspect of it came second.

One of the things we did, rather than letting a lot of people go, was we solved a lot of problems by asking people to take pay cuts. We did that for probably five months, then were able to restore not only the salary, but we were able to bring back three of the five people we let go.

One of the things about leadership is constant communication, so everybody was aware of what was going on because we do monthly updates on where we are, and people were aware of what the issue was. Also, I have nine partners, so they led the way by example, and I think that doing that makes others feel comfortable and confident that partners are willing to do this, are willing to take a risk, so they should be, too.

HOW TO REACH: Brogan & Partners Convergence Marketing, (313) 874-8555 or www.brogan.com

Thursday, 26 July 2007 20:00

Health Savings Accounts

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A healthy and happy workplace is a productive and profitable one. That’s why many companies have started offering Health Savings Accounts (HSAs) to their employees.

“There are no retirement plan vehicles that offer a triple tax preference — tax-free in, tax-free growth and tax-free out — like an HSA does,” says Amy Chambers, director of consumer engaged health care for Priority Health, a Michigan-based health insurance plan. “Employers are able to lower their premiums immediately, and employees get the peace of mind knowing they can cover any unexpected future medical costs.”

Smart Business spoke with Chambers on what advantages both employers and employees can gain by getting involved with HSAs.

What is an HSA?

HSAs are employee-owned, portable, tax-free trust accounts. Employees, their employers or both can contribute to an HSA when the employee is covered by a high-deductible health plan. Employees may use the money at any time to pay for qualified medical expenses or save it for future expenses.

What are the advantages employers gain by offering HSAs to employees?

The financial benefit is that employers are able to lower their premiums immediately with HSAs and set themselves on track for lower long-term premium trends in the future. Another benefit is that HSAs will also play a competitive role in the labor market as many new workers are gravitating toward these types of plans. As these accounts take hold, employers will have the opportunity to maintain a competitive cost advantage while increasing their ability to attract and retain good, qualified employees.

The engagement of employees in their own health care will prove a benefit for both employees and their employers. Finally, employees will learn that there’s a direct connection between their good or poor lifestyle decisions and the higher costs that come with the poor decisions. We’re certainly not saying that all medical costs are attributable to lifestyle decisions, but we do know that many of them are.

What are the advantages employees can gain in participating in an HSA?

Employees must pay for their own services up to the deductible, but above that, there’s the security of the high-deductible plan with an out-of-pocket maximum. HSAs also carry great tax savings since HSA money goes in tax-free, grows tax-free and comes out tax-free, as long as it’s used for qualified medical expenses. There’s no other tax shelter like it out there.

Additionally, these accounts are portable, meaning that the money belongs to the employees and follows them through their careers. Employees can make their own health care decisions, and those who manage their costs well are rewarded with increased savings.

Finally, the longer they’re in the plan, the greater the savings. For many people, that will form a powerful part of their retirement plans in years ahead. The rewards of an HSA can be great. If an employer is willing to invest in their employees’ HSA education and can make a contribution to each employee’s account to get the ball rolling, an HSA can make financial sense for almost any employee.

Are there any disadvantages to HSAs?

The biggest is that they’re new, and for employees who don’t like change, ‘new’ can be bad. So, we don’t suggest that employers can just drop an HSA into their business and consider it done. They have to work at educating their employees on how these plans work. Employers need to make sure they understand how these plans will work for them. We also think it’s important for employers to keep supporting the plan after it has been launched. They must keep demonstrating their commitment to its success, keep educating people — especially new employees — and continue to help employees use the plan well and effectively. This isn’t a one-year tryout. Employers have to be in it for the long run for the benefits to accrue for themselves and their employees.

Where does an HSA stand in value in comparison to other employee benefits an employer can offer?

I would put an HSA right up there with the best that both health care and retirement plans have to offer. There are no retirement plan vehicles that offer a triple tax preference — tax-free in, tax-free growth and tax-free out. The best an employee can get with a retirement plan offering is two tax preferences out of the three. Providing employees with a high-quality, sustainable health care product like a high deductible health plan, accompanied by a tax-preferred account like an HSA, could be an exciting addition to any employer's benefit lineup.

AMY CHAMBERS is director of consumer engaged health care for Priority Health, a Michigan-based health plan. Reach her at (616) 464-8540.

Thursday, 26 July 2007 20:00

Count your assets

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Wealth management is important to every business owner because, the fact is, most of us plan on funding our retirement from the sale of our greatest asset. Because this is so often the case, we must plan how much wealth we need to maintain a comfortable lifestyle and determine whether our businesses are capable of “earning” this wealth so we can retire at a targeted date.

“Wealth management isn’t a process that takes a few weeks or even just a couple of years — it should be an ongoing strategic plan that involves your key advisers early on,” says Craig Johnson, president and CEO of Franklin Bank, Southfield, Mich.

The last few months, we covered how to set retirement goals, value and then sell your business with Mero Capo, president of APB Financial Group Ltd., the wealth management arm of Franklin Bank. Now comes the last step in your exit strategy: wealth management.

Smart Business asked Capo to provide insight on how to make the most of your assets and time during the ongoing process of wealth planning.

Even though wealth management is the last process of an exit strategy, when should owners begin planning?

Often, business owners think about wealth management as, ‘What do I do with this money now that I have it?’ While this is the case, you should be considering this question before you sell the business or even think of selling. How much wealth do you need? If you don’t have this wealth now, how will you achieve it before you exit your business? An investment adviser will help you address these issues while you can still do something about them. By waiting to manage wealth until after you’ve already ‘cashed out,’ so to speak, you may find out that you didn’t realize necessary gains — and this introduces a whole different management issue. Enlist in a professional, early on, who can help you determine objectives and evaluate your current situation. Once you know what your goals are, you reach them by developing your business and making sure you can boost sales, revenue or expand your customer base.

What should an owner consider when determining wealth management objectives?

Assets and time are the key variables in wealth management. First, you must figure out what lump sum of money you need to retire. You must know how much wealth you will require to sustain your lifestyle after you exit the business. The next question you should answer is, when will you exit the business? Some owners retire at 60, others plan to work until they can no longer do so. Establish these two goals as early as possible — time and needed assets. The same rules apply if you are an executive participating in a 401(k) or similar program.

Once you set these asset and time goals, what’s next?

This is when having an investment adviser is especially helpful. He or she will evaluate your current situation because you must understand where you stand now before you can figure out if your assets are at the level you expect for your retirement target date. You’ll tally the current worth of your business, your assets, outside investments and their returns. What will those investments look like on your retirement date goal? Will the assets of your business increase by that point? What assets can you rely on that are not generated by the sale of your business? Depending on your situation, you’ll identify that there is a shortfall or an overage in what you have versus what you need to retire. The next question becomes, how can you boost your assets, personal and business, to reach your goal? Now you are starting to create a pathway to meet your goals.

How should owners invest outside the business?

It’s difficult for owners to take money out of their net pay to put in investments, and many of us don’t fully explore all of the options available in the qualified retirement world. We view profit-sharing plans, 401(k)s and other benefit programs as something good we are doing for our employees. It’s a good idea to accumulate assets in a tax-deferred plan, so if you don’t get the value out of your business that you anticipated, you’ll still have a secondary nest egg to fall back on. And these days, there are many creative plans out there that are combination profit-sharing/defined benefit plans. Talk to an adviser about the options. You don’t want to count on the sale of your business alone to fund your retirement.

MERO CAPO is president of APB Financial Group Ltd., the wealth planning and advisory arm of Franklin Bank. Reach him at meroc@apbfinancial.com. Reach Craig Johnson, president and CEO of Franklin Bank, at clj@franklinbank.com or (248)386-9860.

Thursday, 26 July 2007 20:00

Solid foundation

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After separating from his business partner in 1999, Bernd “Bernie” Ronnisch found he had underestimated the effort and knowledge it took to manage people. Ronnisch Construction Group, with 2006 revenue of more than $50 million, was experiencing a lot of turnover, so Ronnisch began to hire people based strictly on the skills on their resumes, “thinking, if they can build a building, I’ll work along with the quirks of their personality,” says the company’s president. “That never worked.”

Then about four years ago, the company established core values and began making decisions that reflected those values.

“We hire and fire based on those core values,” Ronnisch says. “We’ve hired the right people. We don’t have the turnover we had.”

Smart Business spoke with Ronnisch about how establishing core values and making decisions that reflect those has helped his company succeed.

Q: How do you handle problems?

As a leader, it’s my duty to look at the company from 30,000 feet above, look down on it and think to myself, ‘What are my goals as a company? When people say Ronnisch Construction Group, what do you want people to think?’

We have a core value, and it’s called, ‘United we stand.’ There were many companies I worked for where everybody toed the company line until they got out in the parking lot. Then it is this cancerous conversation that took place that undermined everything that we just sat through in a meeting. There were just under-currents and a cancer running through the organization. The management didn’t even know about it, so they couldn’t react to it.

So, we try to have open and honest communication. If someone has an issue with something, let’s air it out. Let’s sit in a conference room and fix it. We leave the room saying, ‘That’s resolved. Now I don’t have to speak badly.’

We ended up getting rid of an individual that would call up and tell everyone what his bonus was and how they were going to get laid off or just stir bad karma. We warned him once. He was a great employee in one way, really performed on the job, but the cancer was terrible. We warned him once. The next time I had a cab waiting for him.

He found another job, called me up five months later and told me it was the best thing anybody had ever done for him. It made him realize that he actually did that.

Q: How do you know if potential employees will fit in?

You have to take a leap of faith, but you are putting it on the table for them to show. One of our core values is, ‘Family comes first.’ If a guy is a philanderer and doesn’t do well with his family, then he’ll probably second-guess about the position.

If accountability is an issue, and he knows he’s a procrastinator, and he doesn’t get things done when he’s supposed to, he may not accept the position.

What you are doing is putting it out there from Day One. You aren’t trying to scare them with it. You are just saying, ‘Hey, I’m sure you can do your job, but you just may not fit in here. If you can’t fit in, you’re not going to stay here.’

Q: How do you handle failure?

You don’t ever want to chastise somebody for making a mistake if the decision was well thought out, and they took the initiative to make the decision. If you chastise and criticize, you will contaminate that person forever.

If they have confidence, then you destroy some of the confidence in their ability to make decisions in the future. You can sit them down and say, ‘What were you thinking?’

But, on the same token, you have to give some positive reinforcement to that mistake. Mistakes are made in our business every day. Some of them cost nothing, and some of them cost a lot. If the decision was well thought out, and you can understand the logical nature of that decision, then there are no issues. If the decision made was off the cuff and more made on emotion than thought, then I have an issue. That’s where you have to sit down with them and say, ‘I think this is where you went astray.’ Maybe bring them back down to basics and try to build them back up that way.

Q: What’s one thing a leader should never do?

Adopt a management style that doesn’t fit your personality. It will always be trying, unnatural, and people pick up on it, and I don’t think you can excel.

You read all these management books, and everybody has a way to manage people. I think you can take bits and pieces to help establish who you are and how you manage. To try to fit the square peg into the round hole does not work.

HOW TO REACH: Ronnisch Construction Group, (248) 549-1800 or www.ronnisch.com

Monday, 25 June 2007 20:00

Unfettered growth

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Dilip Dubey is working to revolutionize the workplace as we know it. He partnered with Anurag Shrivastava to start Netlink Software Group with just a great idea and $1,000 in capital. The information technology and business process outsourcing services company got its first large contract a year later with Daimler Chrysler. Since then, it has executed projects using its Delta Platform model in the United States, Germany and Australia for mid-market and Fortune 500 companies.

When Netlink entered the market, the industry was focused on large players and convinced that no innovation could significantly change IT delivery service. Dubey led the company to overcome resource challenges and the perception of a start-up until the value of Netlink’s business model became apparent to clients based on achieving immediate business results.

Today, the company has 300 employees worldwide, a client list that includes Starbucks, GM and Ford, and a five-year business backlog.

Part of that success is attributable to Dubey’s approach to marketing his product and services to potential clients — he guarantees 20 percent savings back to the client, some of which is delivered to the client upfront at the time the contract is signed.

Dubey’s vision is for Netlink to be the leader in IT and business process outsourcing for mid-market companies. He says that when the company achieves its full potential, it will be the largest company of its kind in the mid market and will achieve revenue of $1 billion.

HOW TO REACH: Netlink Software Group, (248) 204-8800 or www.netlinksoft.com' target='_blank'>www.netlinksoft.com

Monday, 25 June 2007 20:00

No slowing down

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To Lloyd Ganton, managing multiple retirement centers isn’t just a job; it’s a chance for him to share his compassion for the elderly and exercise his entrepreneurial drive.

Ganton had been working as an assistant superintendent when, in 1967, inspired by his parents who provided care to seniors in the Spring Arbor community, he decided to quit his job, cash in his retirement savings and build a private nursing home, although he was not in the ideal financial position to do so.

Today, his Ganton Retirement Centers Inc. has expanded beyond that initial nursing home to include independent living centers, semi-assisted living centers, rehab centers and a center that specializes in Alzheimer’s care.

He also partnered with a local hospice organization to build a hospice house to care for terminal patients.

Despite Ganton’s success today, the road to this point was not an easy one, and in the early years, Ganton struggled to make payroll after being turned down for a bank loan. But his risk-taking, perseverance, and his devotion to his business and to the seniors and retirees who live in his homes helped him overcome the obstacles and establish a thriving business.

Ganton’s passion has been a big part of his success, and he periodically makes surprise visits to his retirement centers to observe and inspect the facilities.

In addition, he strives to develop relationships with the retirees who live in his centers in an effort to better understand and satisfy their physical, psychological and spiritual wants and needs.

HOW TO REACH: Ganton Retirement Centers Inc., (517) 750-0500

Monday, 25 June 2007 20:00

Banking on growth

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David Tull attributes his success in starting Crestmark Bank to perseverance, risk-taking and a little bit of luck.

When Tull decided to launch his bank, he faced several obstacles, including the difficulty of obtaining a state charter. Regulators were skeptical of the potential of a bank exclusively focused on factoring and asset-based lending, specializing in lending to small businesses, start-ups and undercapitalized companies, but he ultimately prevailed, obtaining a state charter and FDIC protection. As such, Crestmark is held to the high standards of commercial banks while specializing in a niche that traditional banks tend to ignore.

As an entrepreneur, Tull, chairman and CEO of Crestmark Bank, says he empathizes with others who have a dream but are not financially equipped to develop that dream and cannot receive assistance from a traditional bank. He finds satisfaction in knowing that he and his talented staff can play a pivotal role in helping clients realize their goals and aspirations.

As Crestmark grows, Tull is continuing to work on adding a new business segment focusing on financing legal claims. He is also considering entering into a partnership with community banks in an effort to expand the bank’s clientele base and to expose community banks to a diverse group of clients.

Outside of the bank, Tull contributes to the community in other ways, as director of the Music Hall Center for Performing Arts and previously as director of the Detroit Historical Society.

HOW TO REACH: Crestmark Bank, (248) 267-1654 or www.crestmark.com

Monday, 25 June 2007 20:00

Overcoming barriers

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Robert Schnieders dreamed of being a school department chairman — until he got fired as an assistant superintendent by a board rebelling against the superintendent.

As part of his new job, he began asking employers to describe their desired skills and discovered that educators and employers use different terms, creating a language barrier to employers getting the workers they sought. To close that gap, he founded Educational Data Systems Inc., which provides unique analysis of a job, connecting people’s skill sets with specific jobs.

With 24 offices in 14 cities staffed by 340 employees, Schnieders, who serves as EDSI’s president, makes sure each office has the same d├ęcor and uses the same work processes to reduce indirect labor and improve processes and outcomes. And his business model allows Schnieders to succeed in any economy. When the economy is up, clients view EDSI as a recruiter and trainer; when it’s down, EDSI is seen as an outplacement specialist and placement agency.

Schnieders understands that his employees play a big part in his success, so he tries to do for them what he does for clients, matching their skill sets and interests with jobs as they become available within his firm. In addition, he offers a program allowing quality employees to work part time while completing a degree, paid for by EDSI.

Despite his success in the nearly 30 years since founding EDSI, Schnieders has no intention of slowing down.

HOW TO REACH: Educational Data Systems Inc., (313) 271-2660 or www.edsincorporated.com

Monday, 25 June 2007 20:00

Star player

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Brad Wardell was halfway through college when he began running out of money and realized he had to do something fast if he wanted to stay.

So Wardell, who’d been interested in computers since he was a boy, began building customized computers. And he also decided to design a computer game, “Galactic Civilizations,” which he hoped to sell for a few dollars here and there.

The idea was such a success that not only was he able to afford tuition, he also attracted the attention of IBM, which called to say it was interested in his game and in contracting work to him, and Stardock Corp. was formed.

After Wardell graduated from college, he got the good job he’d always wanted, but it wasn’t enough, and he left to take a chance on Stardock. At first, business was great, and by 1996, he had six employees. But the next year, when people began switching from IBM’s OS/2 operating system to Microsoft Windows, revenue dropped. With no venture capital and no other option for cash, Wardell took out a loan and began to create a new game for Windows — “Entrepreneur” — to generate sales. The game sold 100,000 copies, and the company’s switch to designing for Windows was under way.

Today, Stardock is a major player in both the PC gaming and customizations software industries. It recently released “Galactic Civilizations II: Dark Avatar,” the No. 1 strategy game on the market.

The company employs nearly 50 people in four countries, and Wardell is projecting phenomenal growth for 2007, capitalizing on partnerships with GM, the NHL and colleges across the country.

HOW TO REACH: Stardock Corp., (734) 927-0677 or www.stardock.com

Monday, 25 June 2007 20:00

Fueling growth

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When Ravinder Sandhu and his family assumed management control of Advanced Assembly Products Inc. in 1991, the company was nearly bankrupt. With just one client at the time — Chrysler — Sandhu began focusing on people, quality and growth, and the family obtained ownership control in 1993.

To grow the business — an auto supplier specializing in hinges, brackets and hangers for consoles, fuel tanks and doors —

Sandhu first improved the product and delivery for his lone client, then began making acquisitions and gaining new customers. However, with those acquisitions came the difficulty of integrating cultures. Sandhu believed it was imperative to break down the barriers between different facilities and unite them. And to encourage his employees, more than half of whom are minorities, he began investing in them through extensive training, consistently providing new opportunities to learn. He is also investing in his company, providing more effective tools and machines, with the philosophy that better-trained employees with better tools are going to provide a better product.

As the company continues to grow, Sandhu says overseas competition is his most pressing issue, but feels AAP’s nimbleness and ability to react to customers’ needs position it to continue growing. The company has developed a partnership with the state of Michigan in research and development that has resulted in new and innovative technologies, and has developed automation and assembly equipment to ensure that its products exceed customer expectations and quality standards.

Going forward, Sandhu plans to continue to diversify AAP’s product capabilities and customer base and to foster sustainability in the turbulent auto industry.

HOW TO REACH: Advanced Assembly Products Inc., (248) 543-2427