Networking like a pro

Elisabeth Fraser Au-Yeung, vice president of marketing, Sensiba San Filippo LLP

Elisabeth Fraser Au-Yeung, vice president of marketing, Sensiba San Filippo LLP

Networking is a critical best practice for business owners regardless of their company’s size. When you are just starting out, the effort you put in to making and nurturing contacts can directly impact your revenue and the future success of your business.

Smart Business spoke to Elisabeth Fraser Au-Yeung, vice president of marketing at Sensiba San Filippo LLP, about tips and tools that can help you become a polished and eloquent networking expert.

How can business owners prepare for a networking event?

Savvy networkers always have a plan in place before attending an event. A plan may include evaluating the event — is the event of high value to attend? What are your goals for attending? Will your target audience be in attendance?

Try to obtain a list of attendees and any sponsor firms prior to the event. Use the list to build a prioritized list of ‘target’ attendees you want to meet and speak with. You can take it one step further and create goals for each person you want to meet, as well as speaking points that you have thought out and practiced for when you meet that person. You can even search online for photos of the individuals you want to meet so you can more easily find and recognize them.

In addition, you need to have a few tools including business cards, a practiced and polished elevator pitch, and even marketing collateral that you can hand out. Have a pen so you can make notes on the back of the business cards you receive. Note any significant details that the person you met shared so when you follow up, you can mention this and make it a more impactful and personalized connection.

When you arrive, how do you start a conversation?

It can be more comfortable to arrive to an event early, as the room will be less crowded. Do not wait for someone to approach you. Be the master of your own destiny. Approach a person or a group and ask if you can join them. When you meet someone, make eye contact, have a firm handshake and smile. By doing so, you will look and feel more confident.

As you are speaking with people, listen to what they have to say and be cautious about interrupting. When it is your turn to speak, ask open-ended questions about the people with whom you’re speaking, such as what brought them to attend the event? What makes them passionate about their business or industry? What are they doing for the summer? People enjoy discussing the things they are passionate about, including their business and personal interests.

How should business owners ‘pitch’ themselves and their business?

When asked about your business, have a brief and easily understandable description of what you do. Be sure to incorporate into your description the ‘so what’ factor — what it is that makes you or your company different and why the person you are speaking with should be interested in hearing more about your business.

What are the most important tips for success in networking?

Networking is all about relationship building — having rapport and building chemistry over a period of time with people you meet. A relationship will not be built at just one event. It is something that needs to be nurtured.

Remember to ask everyone you meet for a business card. After the event, send an email and a LinkedIn invite to connect with them within 48 hours. Reference something you discussed by checking your notes on the backs of the business cards so your contacts have a recollection of your conversation. Make yourself ‘valuable’ by offering to send a white paper or thought-leadership piece. Follow up with your contacts every 30 days to keep in touch, and even offer to meet for coffee or lunch to further strengthen your relationship.

Elisabeth Fraser Au-Yeung is a vice president of marketing at Sensiba San Filippo LLP. Reach her at (925) 271-8700 or [email protected]

See Sensiba’s blog for more market insights.

Insights Accounting is brought to you by Sensiba San Filippo LLP

How to encourage medication adherence to decrease health costs

Chronis Manolis, RPh, vice president of pharmacy, UPMC Health Plan

Chronis Manolis, RPh, vice president of pharmacy, UPMC Health Plan

It was the late C. Everett Koop, a former U.S. surgeon general, who once famously said: “Drugs don’t work in patients who don’t take them.” That’s a simple way to look at a costly and complex problem — medication non-adherence — where the failure to take drugs on time in the dosages prescribed is both dangerous for patients and costly to the health care system.

“There are a number of reasons that people either don’t take their medication or stop taking it before they should,” says Chronis Manolis, RPh, vice president of pharmacy for UPMC Health Plan. “But what it often comes down to is a lack of understanding of the disease and a lack of respect for the condition.”

Smart Business spoke with Manolis about the problem of medication non-adherence and the ways it can be addressed.

What does medication non-adherence cost?

This problem impacts the cost of health care in many ways. According to the Express Scripts Drug Trend Report, $329 billion was spent on avoidable medical and pharmacy expenses as a result of patients not being adherent to medication treatments. Approximately 50 percent of patients do not take their medication as prescribed, which results in increases in the overall cost of treating chronic conditions and increases the number of hospitalizations and emergency department visits.

Why is medication non-adherence a persistent problem?

Clearly, there are a number of reasons why people may not take their medicine as directed by their physician. Consider, for example, people who have asymptomatic conditions such as high blood pressure, cholesterol disease and Type 2 diabetes. For them, taking medication may have no immediate effect on the way they feel. And, when medicine does not make you feel better, some don’t understand why they need to take it. As a consequence, many do not.

What are other factors that contribute to medication non-adherence?

Well, first, there’s the cost of the prescription. If there’s no generic available, it can be expensive, and a patient may simply choose not to purchase it. Then, there’s forgetfulness, which is a factor for older patients, but also for others as well. Some patients may avoid taking medicine because they fear the possible side effects. Others may not take it because they do not believe that the medication is truly effective.

But, what is often the underlying cause is a basic lack of understanding of their condition. Many patients do not realize they are taking medicine now in order to stay healthy in the years to come and to avoid a more serious condition 10, 20 or 30 years later when it will be too late to treat it with medication. For some, that’s a hard concept to grasp.

What kinds of solutions would help promote medication adherence?

Solving the problem of medication non-adherence is complex because there is no ‘one size fits all’ solution. A comprehensive, multi-pronged solution is needed to improve medication adherence.

These include promoting the need for more conversation between physicians and patients concerning the importance of medication in the overall treatment plan. There also needs to be a way to involve pharmacists more. Pharmacists are uniquely positioned to reinforce the message regarding the importance of medication. This can include encouraging patients to use their medication as prescribed and asking patients if they understand why they are taking a drug and if they understand the condition that it’s being used for.

Health plans can play a role as well because they can determine if patients are refilling their prescriptions in a timely manner. Health plan pharmacists can reach out to non-adherent patients and provide customized solutions and tools for patients to improve adherence. Additionally, health plan pharmacists can help triage specific patient adherence issues to other members of the health plan’s team including care managers and health coaches. For example, if cost is a factor, often less expensive generics are available. If forgetfulness is a problem, pillboxes or enrolling in refill reminder programs could work. Or, finding a substitute for the medication or changing dosing and/or frequency of the medication can eliminate side effects.

Chronis Manolis, RPh, is a vice president of pharmacy at UPMC Health Plan. Reach him at (412) 454-7642 or [email protected]

Save the date: Join UPMC WorkPartners for an upcoming webinar, “Best Practices for Return-to-Work,” at 10 a.m. Aug. 6. To register, contact Lauren Formato at [email protected] or (412) 454-8838.

Insights Health Care is brought to you by UPMC Health Plan

How to choose a firm to handle IRS Form 5500 filings

Danielle B. Gisondo, CPA, partner, Skoda Minotti

Danielle B. Gisondo, CPA, partner, Skoda Minotti

The Internal Revenue Service (IRS) requires companies to file a Form 5500 to provide information about their benefit plans. If the company has 100 or more eligible participants that also means the benefit plan has to be audited.

“The 5500 form is an informational return filed with the Department of Labor (DOL) on an annual basis. It includes not only plan-specific information but financial information, which is where the benefit audit comes in,” says Danielle B. Gisondo, CPA, a partner at Skoda Minotti.

Companies are required to have an independent accounting firm conduct the benefit plan audit. Smart Business spoke with Gisondo about the audit process and how to choose a firm for the work.

What should you look for in selecting an accounting firm?

Find a firm that has benefit plan experience. There are accounting firms that audit only one or two plans throughout the year, but you want someone with a wide variety of experience auditing plans. Some firms don’t have a specific department for these audits, doing them as part of the overall accounting and auditing practices. Firms that specialize in this arena have a separate department and dedicated professionals.

Ask how many plans the firm audits, and the size of those plans. Check for membership in the American Institute of Certified Public Accountants Employee Benefit Plan Audit Quality Center. This ensures they have the required education and access to benchmarking and industry data that can be helpful for the audit work and throughout the audit process.

There are specific continuing professional education requirements from a benefit plan industry perspective, and the accounting is unique and definitely different than for a regular audit of a financial statement.

What do accountants look for in the audit?

They’re testing for contributions coming into the plan, making sure participants have proper amounts withheld from paychecks and money is deposited in a timely manner into the plan. Investment elections are reviewed; if contributions are to be deposited into five different mutual funds, accountants ensure money goes into the right funds.

Distributions also are tested, whether it’s money rolled over into a new plan or making sure a loan is repaid over the proper time period.

It’s really about testing samples of transactions into and out of the plan. Then financial statements are prepared for filing along with Form 5500.

Where do problems usually arise?

Many times it’s on the contributions side — a participant wanted 3 percent withheld but the plan sponsor or third-party administrator (TPA) withheld 5 percent. Some employers do not deposit employee withholdings on a timely basis with the trustee or custodian that handles the funds.

On the distribution side, there are situations where participants took out more money than they had vested in the plan and it didn’t get approved by the proper party at the TPA or plan sponsor.

What manpower commitment is required for the audit?

Depending on the company’s size, the firm will work with the human resources director or accounting department. If the accounting firm has a specific audit process, it should only require a few hours of pulling information together on the company’s part, while having someone available for questions when the audit work is being performed. Depending on the size of the plan, field work runs from one day to a week.

The entire process, starting with the request for information and ending with a completed financial statement, takes about four to six weeks.

Does the firm you use make a difference?

Both the IRS and DOL conduct independent plan checks, and could randomly look at completed 5500 filings and audits. If an accounting firm missed something — maybe the plan wasn’t compliant or didn’t have the proper amendments — those plans could be disqualified. Then all contributions going to the plan could be taxable, even though the plan is tax-exempt.

You definitely want a reputable accounting firm with experience doing benefit plan audit work; any mistakes could be costly.

Danielle B. Gisondo, CPA, is a partner at Skoda Minotti. Reach her at (440) 605-7132 or [email protected]

For more information or to have a confidential conversation with Dani, please call (440) 605-7132.

Insights Accounting & Consulting is brought to you by Skoda Minotti

How the marketplace will respond to health care reform

DeVon Wiens, partner, Health Care Practice, Moss Adams LLP

DeVon Wiens, partner, Health Care Practice, Moss Adams LLP

California’s health care exchange may see a flood of customers when it opens in 2014 — not only from people who have been uninsured but also many previously covered under employer-sponsored plans.

“What the policymakers are saying is different from what we’re hearing from businesses,” says DeVon Wiens, a partner in the Health Care Practice at Moss Adams LLP. “Policymakers don’t anticipate a big shift among employers away from providing coverage and toward letting employees go to the exchanges to purchase their own insurance.”

That’s likely true for larger employers with 1,000 employees or more who have enough critical mass to self-insure, he says. But it’s not the case with smaller businesses.

“Many employers may be sending up the white flag,” Wiens says. “Instead of spending $8,000-plus a year per employee, they’ll give them an equivalent increase in compensation and let them buy their own health insurance through the exchange. Some studies show that there won’t be a huge shift, but we see it more often than not among our clients.”

Smart Business spoke to Wiens about the Affordable Care Act (ACA) provisions and how businesses are responding.

Why do you anticipate many people will buy insurance from the exchange?

Many small to midsize companies are waiting and watching — they don’t want to be the first to go to the exchange, but they’re not going to be last either. Once one or two companies in the same industry go to the exchange, the others will follow suit. This will only accelerate now that the employer mandate has been delayed a year. Essentially, it means businesses can drop coverage and send employees to the exchange without facing a penalty. This is more likely in industries that do not require a professional level workforce or for which current levels of available qualified candidates to fill open positions are hard to find.

Insurance companies clearly expect more people to flock to the exchange because they’re purchasing providers. United Healthcare through its affiliate, Optum Heathcare, and Humana recently acquired large medical groups in the California market, as well as others around the nation. If groups opt to go into the exchange, their commercial insurance business shrinks and insurance profits drop dramatically. They want to offset the loss by having more control over physicians and other providers, with closed networks similar to Kaiser Permanente. This consolidation will likely lead to access-to-care problems later for those not covered by commercial insurance, employer-sponsored plans or Medicare.

Will the exchanges be ready by 2014?

In 1982, California counties responsible for indigent care established the County Medical Services Program. They basically set up their own HMOs, and the program struggled mightily at first. Today most are well-run organizations.

It will be the same with the health care exchanges. After a few years, the exchanges likely will learn how to operate and more effectively administer the insurance products offered. They’ll probably have to reduce the number of coverage options to be efficient.

Over time a switch to a single-payer system is likely. Approximately 20 percent of the cost of health care is because we don’t have one system, one way to pay a claim. The lack of centralized control drives up costs. However, a single-payer system also adds costs by taking competition out of the insurance market. Still, pure economics dictate a shift to a single-payer system eventually, especially with a slow economy.

Will the exchanges lower health care costs?

They may bend the cost curve, but they won’t reduce costs. If you look at health care spending, the freight train coming at us isn’t the uninsured; it’s our aging population.
Regulation and market forces drive the health care market, and right now market forces are moving faster. But the ACA is here to stay, and the market will adjust to it. The smartest thing the government can do is outsource the work of the exchanges, like it does with Medicare, one of the smaller federal government departments. Medicare outsources most claims processing and auditing to private industry. If they approach the exchanges in the same way — set the ground rules for how health plans play, and let the private sector participate — over time they’ll figure out how to make this work.

DeVon Wiens is a partner, Health Care Practice, at Moss Adams LLP. Reach him at [email protected]

Insights Accounting is brought to you by Moss Adams LLP

How to identify and protect your intellectual property

Karl W. Hauber, attorney, Fay Sharpe LLP

Karl W. Hauber, attorney, Fay Sharpe LLP

Business and product names, logos; unique product designs, shapes, utilities, functions; and other proprietary manufacturing methods can comprise a significant portion of a company’s potential revenue and intellectual property (IP).

Protecting IP is a critical component of a sustainable business strategy. However, many companies don’t take the steps necessary to fully guard the ownership of these properties, leaving them vulnerable to encroaching competitors and/or missing out on sources of revenue generation.

Smart Business spoke with Karl W. Hauber, an attorney at Fay Sharpe LLP, about identifying and protecting IP to avoid costly legal lapses.

What do trademarks cover?

Trademarks are used to protect business and product names (i.e. words and phrases), logos, and in some cases shapes and colors that are used to identify a company and its named products or services.

There are common-law protections for using a name or symbol, but a mark not registered with the U.S. Trademark Office can cause issues. For example, a second entity can register the same name or mark. The non-registering first entity may be restricted with respect to future use and prevented from further expansion.

By registering, an entity can become the exclusive user of a trademark in association with particular goods or services, so as to develop source association in that mark. The customer goodwill and market association can become valuable IP, the rights of which may be licensed or sold outright.

How does a copyright work?

Copyrights cover software, website content, schematics, music, photos, literary and artistic works, among other things. Once ‘original works of ownership’ are secured in a fixed medium or recorded in some way, there’s an inherent copyright associated with that material and the manner in which it is expressed. Copyright ownership provides the rights to reproduce the work and to prepare derivative works based upon it.

Copyright registration with the U.S. Copyright Office provides additional benefits. Mainly it’s a public record of the copyright claim, enabling the applicant to seek legal remedies and initiate a lawsuit against someone who has copied material or is using it without authorization.

What can be patented?

The most common patent type is a utility patent, which protects unique devices and apparatuses, methods of manufacture, chemical compounds, formulas and drugs — collectively referred to as inventions. Generally, an invention is a solution to a technological problem and may be an apparatus or a method. Having patent protection provides the owner the right to exclude others from using, making, selling or importing devices protected by the patent for 20 years from the application filing date. Patent rights can be licensed, assigned and sold, which may provide monetary gains and revenue for the patent owner.

A company can be barred from patenting an invention. If the invention is on the market, or publicly known, for more than one year it’s barred from patent protection and deemed a contribution to the public.

In addition, design patents cover the shape of or pattern applied to a product — how it looks through ornamental design only. Design patents have a 14-year lifespan and different protection. The bulk of the design patent application is drawings and figures that accurately depict a product. Enforcing a design patent involves infringers trying to market a substantially similar design.

What are the pros and cons of trade secrets?

Sometimes companies have a unique manufacturing method, for example, so they protect it by keeping it secret. In contrast to patents, where a detailed description submitted to the patent office eventually becomes known to all, trade secrets must be shielded from the public. The lifespan of a trade secret is based on its secrecy and will last as long as it remains unknown to others.

Once a company has something it believes is secret, it must take active, detailed internal steps to maintain the secrecy. But if someone can reverse engineer a product, there’s nothing to stop him or her from doing so. Manufacturing methods, for example, sometimes can’t easily be reverse engineered, so are better candidates for trade secrets.

Who can help companies protect their IP?

Working with counsel knowledgeable in this area of the law can help parties get through matters concerning the best way to protect IP. It is beneficial for interested parties to be proactive with their IP counsel and openly discuss plans and future initiatives so one can avoid costly disputes with others’ intellectual property rights.

Karl W. Hauber is an attorney at Fay Sharpe LLP. Reach him at (216) 363-9212 or [email protected]

Insights Legal Affairs is brought to you by Fay Sharpe, LLP

How your business can benefit from a government-backed SBA loan

Raymond Monahan, senior vice president, group manager SBA Lending, Bridge Bank

Raymond Monahan, senior vice president, group manager SBA Lending, Bridge Bank

Small Business Administration (SBA) loans are particularly popular in challenging economic times, when traditional lenders are less willing to provide funding. Program changes, including increasing the maximum loan size from $2 million to $5 million, are attracting more businesses. In the fiscal year ending Sept. 30, 2012, the SBA approved 39,442 loans for a total of $15.25 billion, and in the first nine months of fiscal year 2013 the SBA has approved 39,063 loans for $16.25 billion.

“In down times, the SBA programs become more important and fill a vital need for small businesses,” says Raymond Monahan, senior vice president and group manager of SBA Lending at Bridge Bank.

Smart Business spoke with Monahan about the types of SBA loans that are available and recent changes to the program.

What types of SBA loans are available?

The 7(a) is most commonly used; 75 percent of the loan is guaranteed by the government and money can be used for working capital, inventory, equipment, debt repayment (in certain instances) or real estate.

The 504 loan program is less well known. It’s more structured and is generally for real estate acquisitions. A borrower typically provides 10 percent down; a real estate mortgage pays 50 percent of the project cost; and the SBA guarantees a debenture for the remaining 40 percent through a Certified Development Company (CDC).

What are the benefits to SBA loans versus traditional loans?

The most obvious advantage is that there is a guarantee backing the loan. It’s also easier to qualify. Some businesses that are new, don’t have a certain profit level or don’t have the necessary down payment for traditional financing can get an SBA loan. Generally, you may need only a 10 percent down payment, whereas a bank will want 25 to 30 percent down if you’re buying real estate.

Another nice aspect is a longer amortization period. Most commercial real estate loans have a 25-year amortization period, but a 10-year maturity rate. That means you need to refinance at some point. With an SBA program, the loan is fully amortized over 25 years and you never have to worry about refinancing. Non-real estate loans can be financed for up to 10 years.
Although SBA loans aren’t subsidized by the government, the guarantee may be able to get you a better rate.

Are there disadvantages as well?

With 7(a) loans, there is a prepayment penalty in the first three years if the maturity is more than 15 years. Because 504 loans are financed through bond sales, they have longer prepayment penalties on those.

The SBA also may require additional collateral. You might put 10 percent down, but the SBA could want a house or other collateral to further secure the credit.
Finally, there also are fees. The 7(a) program has a guarantee fee of 1.7 to 2.8 percent of the total loan amount — the percentage goes up as the loan size grows. With a 504 loan, there’s a fee of about 3 percent of the CDC portion — the 40 percent financed through the SBA plus any fees charged by the first mortgage lender.

What recent changes have been made?

In addition to increasing the maximum loan amount from $2 million to $5 million, the definition of a small business has expanded. Instead of having different standards based on industry, the new alternate threshold is that the net worth of a company cannot exceed $15 million and profits over the last two years cannot exceed an average of $5 million. They have also loosened restrictions on line of credit programs.

There are two further changes being considered — simplifying the affiliation rules and eliminating personal liquidity tests.

The SBA has many cumbersome rules about what constitutes affiliate companies, and they’re attempting to simplify that so you have to own a majority of the business in order for it to be considered an affiliate. Someone might own 40 percent of a business with an SBA loan and not be able to qualify to get a loan for another business.

As for liquidity, the SBA has rules that you can’t have more than a certain amount of liquidity to be eligible for a loan. They’re looking to get rid of that test and just focus on whether it is a small business.

The changes are about helping more businesses that might need financing, which is the goal of the SBA.

Raymond Monahan is a senior vice president and group manager SBA Lending at Bridge Bank. Reach him at (408) 556-8384 or raymond.monahan@bridgebank.com[email protected]

Social media: Follow Bridge Bank on Twitter @BridgeBank.

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How to use service plans to gain control over commercial insurance

James Misselwitz, CPCU, vice president, ECBM

James Misselwitz, CPCU, vice president, ECBM

When it comes to insurance, many customers feel they have no control over their price, product, how incidents happen, losses, etc. A properly constructed service plan mitigates this frustration.

James Misselwitz, CPCU, vice president at ECBM, says a service plan is something business owners should be asking their broker about upfront.

“They should say, ‘OK, you’ve given me this spiel on all the wonderful things you’re going to do. Now show me how you’re going to deliver it to me,’” he says. “‘Show me how you deliver it to your existing customers, and show me what happens when something doesn’t get done. Give me that blueprint, so I know I can depend on you.’

“There’s no question that somebody who doesn’t follow an active service plan with a broker will ultimately pay the highest premium out in the marketplace.”

Smart Business spoke with Misselwitz about effective service plans that help manage risk.

How do service plans create fail-safe procedures?

Although most brokers use some version of a service plan, many do not monitor and control it. A service plan is a client-driven method where business owners determine, along with a broker or agent, what services they need, how often they need it and who is responsible for delivering it to them.

Some services might be a review of market conditions before renewal; a review of the loss experience and current claim activity; a review of the outstanding reserves on claims that have already occurred; a review of information for the renewal like the current automobile schedule or payroll; and a tentative experience modification factor review that shows the impact of workers’ compensation on your renewal.

The service plan helps manage the insurance throughout each cycle of the policy. Both the company and broker know the expectations, and the plan can operate as a safeguard. When the broker doesn’t complete a claim review at six months, for example, a fully automated, computerized service plan notifies the underwriter by triggering an alert at the brokerage firm. At the same time, executives have a copy of the plan and can ask the broker about it.

What happens when service plans aren’t properly executed?

Things fall through the cracks. The insurance business is a deluge of paper and electronic messages, so it’s easy to lose a due date or report that needs to be run. If companies don’t actively manage insurance with the help of their brokers, they give up control of pricing, coverage, and losses to the whims and vagaries of the insurance companies and marketplace.

For instance, if your company doesn’t have a regular claim review on workers’ compensation activity, you could have a few large claims on reserves. You might not be working on action plans to mitigate those claims. So your renewal comes up, and it’s running a temperature with a poor loss ratio. Your insurer might ask for 40 percent more to underwrite the risk or send out a notification of cancellation. Now, you and your broker are scrambling to put together a response that will allow the underwriter to stay on a reasonable price.

With what types of insurance is a service plan most important?

With a commercial account, service plan diligence is most critical with insurance lines that have loss activity and when there is anticipated change. You want to automatically stay in control of critical items like losses, payroll, premiums, sales, etc.

Also, you need a service plan if there’s an anticipated change, such as a merger or expansion. It’s important to have the right coverage at the inception, as well as coordinating existing coverage so you’re not being overcharged because of overlap.

Why is flexibility key?

As a commercial insurance purchaser, it is important to develop a system with your broker that will deliver the service that you want and need. A service plan is one such system that can help you control costs and deal effectively with change, both in your operations and in the insurance marketplace. While flexibility is the key to tailoring a service plan for each business owner, it is the ability of the broker to audit the process that seems to be the critical element in making the program work extremely well.

James Misselwitz, CPCU, is a vice president at ECBM. Reach him at (888) 313-3226, ext. 1278, or [email protected]

Visit our blog, for more information about risk management.

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How to see past the medical community’s fixation on walking

Joshua Trentine, president, Overload Fitness

Joshua Trentine, president, Overload Fitness

By Joshua Trentine

Walking does not generally qualify as exercise. A movement or activity is not perceived as a stimulus by the body unless it is demanding. An activity that does not render a muscular failure — an inability of the muscle to continue, reached within one to three minutes — is not demanding.

Walking can be continued ad infinitum because there is no meaningful muscular taxation. If walking becomes impossible, it is because the subject has become sleepy, hungry, generally fatigued, ridden with blisters, injured or dehydrated.

The muscles, per se, do not fail. They can go on and on and on. And since they can go on and on, and they are never meaningfully challenged, overuse syndromes are proportionately probable.

There are exceptions. Walking may indeed be exercise for individuals whom find walking is all but impossible. In this instance of debility, walking is momentarily and meaningfully demanding. It is therefore exercise for these people — there will be an “exercise effect,” but is it appropriate for such patients?

In my opinion, it is not the best form of rehabilitation for these debilitated people. I would prefer that these people were performing specific strength exercise for the musculature that is required for walking; that remaining upright and gait training is included to regain the skill of walking after the muscles are conditioned enough to provide sufficient support.

The best exercise and the best physical rehabilitation are done with high-intensity and low-force exercise that tracks muscle and joint function. These compressive forces are nourishing and healthful to our joints and articular cartilage, as well as strengthening to muscle and bone.

Even with such a benign activity as walking, our stance limb may be exposed to 2.3 times our body weight with a brisk pace. Under normal conditions this is no great issue, but for someone with a functional leg length difference, someone experiencing back pain or a person with arthritic knees, excessive walking in the name of exercise will only exacerbate these conditions, while the compressive forces of slow-speed, strength exercise are far safer and more therapeutic.

I often hear the adjective: low impact. This term is used indiscriminately to imply low force. On the contrary, low impact does not indicate low force. Relatively high force is encountered without an impact. Forces occur and vary depending on the rate of change in movement. Thus, excessive force can be encountered merely by jerking your limbs around in the air (a gas) or water (a liquid) — not just against a solid.

Notice the deliberate heel strike of those on walking programs as they briskly march about the neighborhoods or in shopping malls. And if a so-called march fracture can put a soldier out of commission, just imagine the chain of events that might follow with an elderly man or woman: immobility, foot surgery to relieve bone spurs, increased danger of falling while maneuvering with crutches, infection subsequent to surgery, and on and on.

In reality, exercise is just as much a chore as brushing one’s teeth, making the bed, washing the clothes, mowing the grass, washing the dishes or taking a bath. It is an absolute requirement for a normal, healthy life, and must not be confused with recreation any more than flossing one’s teeth or scrubbing the kitchen floor. Not enjoying it doesn’t factor into the matter. It must be done.

I expect that some will read this and conclude that it is passé. People may feel this attitude toward walking overlooks the fact that the exercise physiologists and mainstream medicine now acknowledge strength training as an important component of exercise.

No, they don’t. Strength training is not a component of exercise. It is the exercise.

Ditch the steady-state, low-intensity activities. It is anti-exercise. It is empty exercise. It is counterproductive and can even be injurious.

Joshua Trentine is president of Overload Fitness. Reach him at (216) 292-7569 or visit www.overloadfitness.com.

Insights Health & Fitness is brought to you by Overload Fitness

How to encourage employee wellness and increase workplace contentment

Satinder Dhiman, Ph.D., Ed.D., associate dean, School of Business; chair and director, MBA Program; professor of management, Woodbury University

Satinder Dhiman, Ph.D., Ed.D., associate dean, School of Business; chair and director, MBA Program; professor of management, Woodbury University

Workplace contentment, fulfillment or wellness may be intangible, but it will affect the growth and success of your business. When it’s present, there are obvious, unmistakable signs, says Satinder Dhiman, Ph.D., Ed.D., associate dean of the School of Business, chair and director of the MBA Program and professor of management at Woodbury University.

“When you go into an organization, you can almost smell it,” he says. “Being highly fulfilled takes a conscious decision; it’s not something that just comes about.”

Businesses have less absenteeism, turnover and stress leave when employees have a sense of belonging, enhanced contribution, and more engagement and trust.

Smart Business spoke with Dhiman about how to encourage highly fulfilled employees.

Why do executives need to be concerned with workplace contentment?

A recent Gallup survey found that 47 percent of employees feel disengaged, and when that’s the case it will affect the bottom line. People just going through the motions are more likely to be absent and leave the company. There also are about, depending on the survey, 17 to 20 percent of employees who are positively disengaged.

Organizations are not just numbers, and you don’t want to pursue profits in an unbridled manner. Remember that businesses are about people.

What are the characteristics of highly fulfilled employees?

These employees have a sense of ownership and commitment. They focus on what is right, are generally more appreciative and concentrate on making things work. They are aware of their contribution to the organization and know how it adds to the bigger picture.

This then leads to high emotional intelligence. They are in better control of their own feelings, so they are better equipped to deal with the feelings of others. And better interaction leads to greater trust, which is the glue holding things together.

Research shows corporate communication failure happens not because the message was wrong, but because it was interpreted wrong. There was distrust of the messenger.

How can management increase workplace contentment?

A great employer will inspire employees through actions, not just words or slogans. To achieve this, approach employees in a holistic manner, appreciating all skills and abilities. There’s a joke that at his retirement party, an employee said, “For 40 years you paid me for my hands; you could have had my brain for free.” Also, strive to create a culture of appreciation. Instead of catching people doing something wrong, catch people doing something right.

Fulfillment engages the body, mind and spirit. So, take a genuine interest in employees’ well-being and what is happening with their emotional makeup. You want to help employees attain their dreams — send a few staff members to a local conference, provide tuition reimbursement or be flexible on hours to allow them to go to class.

If employers support employee education, many fear employees will gain skills and leave. However, in addition to being more productive while working for you, think of the economy as a whole. You hire people who have been trained elsewhere. Your employees gain skills and go elsewhere. There is no real gain or loss.
Of course, bonuses and pay raises don’t hurt in terms of building trust and appreciation.

Why is personal fulfillment so important?

Workplace fulfillment is more likely when employers and employees are fulfilled in their own lives. It trickles down.
Attaining personal wellness comes from self-knowledge or understanding your purpose in life, as well as selfless service. Once those two pillars are in place, certain mental habits or gifts contribute and help create a sense of self-fulfillment. They are:

  • Pure motivation.
  • Gratitude.
  • Generosity.
  • Taking a vow of harmlessness.
  • Acceptance.
  • Mindfulness.

By focusing on each of these habits, you can create personal fulfillment. And, by sharing it with your employees, achieve organizational well-being.

Satinder Dhiman, Ph.D., Ed.D., is an associate dean in the School of Business; chair and director, MBA Program; and professor of management at Woodbury University. Reach him at (818) 252-5138 or [email protected]

Book: More on this subject can be found in Satinder Dhiman’s new book, “Seven Habits of Highly Fulfilled People: Journey from Success to Significance.” Find it on Amazon.com.

Insights Executive Education is brought to you by Woodbury University

How to expand your business through an SBA loan

Santiago “Chico” Perez, SBA Sales Manager, California Bank & Trust

Santiago “Chico” Perez, SBA Sales Manager, California Bank & Trust

You need operating cash to grow your business, but securing a traditional commercial loan isn’t always easy for small and midsize business owners. Fortunately, Small Business Administration (SBA) loans are a worthwhile financing option. An SBA loan typically offers longer terms, more competitive interest rates and, best of all, bankers can be more lenient because the government guarantees up to 75 percent of the loan amount.

“An SBA loan is a sensible option for businesses that experienced a decline in sales and profits during the recession,” says Santiago “Chico” Perez, SBA sales manager for California Bank & Trust. “Bankers can consider your financial projections, along with historical data, when evaluating your loan application.”

Smart Business spoke with Perez about the growth opportunities through an SBA loan.

When should business owners consider an SBA loan, and how do these loans differ?

New ventures traditionally have a hard time securing working capital, but you may get $100,000 to $5 million through a SBA loan, as long as you’ve run a similar enterprise and propose a viable business strategy. You also can use SBA funding to purchase another company or procure equipment or inventory to fulfill a new contract.

Generally, SBA loans can offer more favorable terms. For example, you only need 10 percent down to purchase real estate, and you can roll fees into the loan balance. SBA loans feature higher loan-to-value ratios, longer repayment periods and no balloon payments. Companies often qualify for higher loan amounts because they can amortize the purchase of buildings over 25 years or equipment over the remaining economic life, and need less cash flow to service the debt. Owners also can use funds to buy raw materials, finished goods or equipment to expand into new markets.

How does the SBA’s underwriting criteria differ from traditional commercial loans?

Bankers will review standard requirements such as financial statements and credit reports, but some criteria differ:

  • Projections. Bankers consider future sales and historical data when evaluating loan applications. Ensure your projections are realistic and correlate with current financials and forecasts. For example, earnings won’t automatically double with a larger facility or new equipment. Instead, explain how the equipment lowers operating costs or how you’ll use the extra space to add a new production line. Substantiate claims with copies of customer agreements and contracts.
  • Resumes. Tout your management team’s industry experience and track record.
  • Ownership. Owners with more than a 20 percent stake must submit signed personal financial statements and tax returns.
  • Down payment. Lenders must determine the source of a borrower’s down payment, even if the funds are in an escrow account.
  • Collateral. The need for collateral hinges on the loan purpose and program so review underwriting criteria at SBA.gov, and state both in your proposal.
  • Tax returns. Owners must supply three years of tax returns, financial statements and balance sheets to qualify.

Does the SBA offer other support to small business owners?

The SBA provides myriad tools and support to help owners create a loan proposal and navigate the underwriting process. Small Business Development Centers offer free assistance with financial, marketing, production and feasibility studies, and many centers engage local experts.

The SBA also provides mentorships, free counseling and business plan expertise through the national nonprofit SCORE.

What else can owners do to successfully navigate the lending process?

Loan approval hinges on an accurate, thorough proposal, so take your time and seek expert advice. Bankers want to hear the story behind your numbers; be ready to explain how you overcame adversity and how you’ll use the SBA loan to take your business to the next level. Help your banker understand your customers by including links to your company’s website, LinkedIn page or Facebook page in your proposal. Finally, you can accelerate the process by selecting an approved Preferred Lender who can approve loans without submitting the entire package to the SBA.

Santiago “Chico” Perez is an SBA sales manager at California Bank & Trust. Reach him at [email protected]

Website: California Bank & Trust is an SBA Preferred Lender. Learn more at www.calbanktrust.com/smallbusiness/loans/small-business-loans.html.

Insights Banking & Finance is brought to you by California Bank & Trust