Philadelphia (1114)

Tuesday, 26 January 2010 19:00

The Stemper File

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Education: B.S. in electrical engineering, Marquette University; MBA, University of Pennsylvania, Wharton School of Business

What is the best business lesson you’ve learned?

Be prepared to learn something new every day, and be open. You never know from whom or where it will happen, but it will. And there will be something new, every day.

What traits or skills are essential for a business leader?

Get input from multiple perspectives, especially those closest to the action. Be ready to (make) decisions with incomplete information. Monitor those decisions and adjust accordingly toward improvement.

What universal truths have you learned about leadership?

The difference is really in the people. Personnel choice is critical. Seeking to understand that their core values align with the values you are trying to build into the business is most important.

What is your definition of success?

Achieving (short- and long-term business) goals, but doing it in such a way that brings the best out of the employees, and our customers are so satisfied that they want to act as referrals.

Saturday, 26 December 2009 19:00

Flirting with disaster

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Joe Paterno once said that the minute you think you’ve got it made, disaster is just around the corner. Rick Eckert, chief financial officer of ECBM Insurance Brokers and Consultants, says the legendary football coach’s words are a perfect reminder of the importance of having a plan so that you will be ready when disaster strikes.

“Anything that has the potential to take your business out for an extended period of time needs to have a plan attached to it,” Eckert says. “The last thing you want to be doing is trying to figure out that plan in the middle of it.”

Smart Business spoke with Eckert about what to include in your company’s disaster plan and how to ensure that your plan will work.

Why is it necessary for businesses to have a disaster plan?

In the middle of a disaster, you’re emotional, and if you’re making decisions based on emotion, you’re going to make bad decisions. So take the time to have a thorough, well-practiced plan before disaster strikes. It doesn’t make it any easier if it happens, but at least you’ll have an idea of what to do and you’ll execute instead of panicking.

If you think of people who deal with disaster all of the time, such as police, firefighters, EMTs and the military, the reason it works for them is that they are well-trained and well-disciplined. They don’t stop and think, they don’t panic, their hearts don’t start racing, and they don’t get worried. They execute. That’s why you need a plan.

What areas should a good disaster plan cover?

There are basic components that are the same for everyone, but from those core components, it changes based on your industry and size. There are a lot of variables, so not every company’s plan should be the same.

Start with life and safety. Look at your evacuation plans, fire protection, security, your access to health professionals and where you are located. If you lease space in an office building, you have to understand your neighbors’ plans, as well as your city’s plans, and know how you tie into them.

Then find out exactly what your mission-critical components are. What do you have to do to function, and how would that be replicated in a disaster environment? Can you get temporary space with communications, computers and warehouse space, and how long would it take to set up?

Look at how your business data is secured and if it is accessible off site. Can your employees work from home? Do you have other work sites that can house you temporarily?

Finally, you have to keep in mind that your employees will be dealing with that same disaster in their personal lives. You can’t just expect them to be your employees and do what you say, because maybe their houses got destroyed.

How can business owners develop an effective disaster plan?

First, don’t assume your insurance will take care of everything. Most people think their insurance will take care of it, but that’s not always the case.

You have to look at your plan as a business continuation plan. From there, gather a team that represents all aspects of your business.

Rank every aspect’s importance and determine how you would attack it in a disaster environment.

Then take that a step further and talk to others in your industry. Use trade associations, business groups, your insurance broker, even peers in your business. Government Web sites such as and the Pennsylvania version of that called can also be helpful.

You have to keep in mind that your plan is a living document. Once you build it, it doesn’t just end there. You have to look at it regularly, and you have to change and adjust it.

How can you ensure that prioritizing tasks in the planning process goes smoothly?

Have somebody from the senior executive or ownership level who has significant authority lead the charge, because people by natural tendency are going to get competitive between their units and want their issues to be covered first.

It’s a good idea to have somebody from the ownership level, which is where it really counts, who can referee and make a decision if they have to.

Once it is in place, how can companies evaluate their disaster plan to ensure it is working?

Three words: Practice, practice, practice. Dry run your plan using different scenarios to see what works and what doesn’t. You actually have to run the plan from start to finish. Create a scenario and then practice executing your plan based on that scenario.

With our team, I told them we would have a dry run on a Friday. I told them I wouldn’t spring it on them totally by surprise, but I wouldn’t tell them what time and what disaster would be coming. So they’re sitting on pins and needles, and I send an e-mail saying there is a tornado three miles from here — react.

Throw a few scenarios at them, then execute the plan from a tabletop level. We didn’t actually move people, at least on the first few runs. From there, you will find out what you missed. Then you can have some full-blown total company runs, as well.

Obviously you can’t do that a lot, because you don’t want total disruption, but you should do it at least one each year.

Rick Eckert is CFO of ECBM Insurance Brokers and Consultants. Reach him at (610) 668-7100 or

Saturday, 26 December 2009 19:00

The Paquin File

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Born: Quebec City, Quebec

Education: B.S. in biochemistry and MBA, University of Ottawa

First job: I worked in a medical laboratory in my last years of high school, separating serum from red blood cells. My father worked in the same lab as a radiologist; he knew they needed help. You don’t need a license to do it, and it’s not as complex as it sounds. You take a test tube of blood, spin it in a pipette and suck it back out. Really, it’s not rocket science.

What is the best business lesson you’ve learned?

The truth will set you free. Not that anyone is necessarily trying to lie or be deceitful, but you need to be open about the challenges your business faces and the obstacles your business has. You need to be open with stakeholders, your board, peers and employees. If you do that, it really fosters an environment of communication. If you downplay negatives or withhold information, it only leads to problems.

What traits or skills are essential for a business leader?

You need to have adaptability. You can’t be so narrow- and single-minded that you can’t adjust to your environment. What we’ve gone through at ModSpace over the last 18 months is a perfect example of that. You need to have the flexibility to adapt.

Wednesday, 25 November 2009 19:00

Brand-new brand

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Whether you realize it or not, people form opinions about your company based on your brand. And every organization, no matter how large or small, can benefit from using public relations and strategic marketing to improve the way it communicates its brand to potential customers.

“PR can help you define that brand, so you are presenting yourself and your qualities the way you want to,” says Maria Evans, adjunct professor with Delaware Valley College and president of Martino Evans Communications. “It can then help you create messages to help you communicate that brand.”

Smart Business spoke with Evans about how to use effective public relations to bolster your brand.

What can a good public relations program do for you?

A good PR program can create greater awareness of businesses and individuals, attract additional clients and increase the revenue of the business — not necessarily the number of clients but how much and how frequently they are purchasing.

If you are recognized as an expert, you can increase your revenue through additional sales or through increased demand generated from raised awareness.

PR can build your credibility, enhance your reputation and establish you as a leader in your particular niche, area of a profession or geographic area.

That doesn’t necessarily have to be tied directly to the business. An employee’s good deeds or involvement in community events can increase your company’s reputation. The halo effect gives that benefit to your company or the products and services that you sell.

How can a company improve its brand?

The first step is to decide on your brand. Keep in mind your unique offering and what the competition offers. Develop your message, then get it out consistently and constantly.

It can be something everyone can do. For example, the signature on your e-mail and the incoming and outgoing messages on your voice mail should all be consistent. They should all include whatever benefit you are trying to make sure people realize you have to offer. Whatever that benefit is, you need to get it out consistently and constantly in small and large ways.

What different avenues can you use to get the word out about your brand?

There is a lot of chatter out there, so you need to participate in the chatter that your target audience pays attention to. You can go on some of the social media sites, but if your target audience isn’t on them, that’s not going to benefit you.

However, if they spend a lot of time online, you want to make sure that you keep coming up and coming to their attention. It’s a matter of focusing.

Public relations can help you get a buzz going on your services, and it can help create that word-of-mouth, that raised level of enthusiasm and awareness about your products and services. PR also works to cultivate media, which is not just pushing out stories. It means learning what people who are important to your audience need and becoming a resource for them.

Public relations done right is a very time-consuming endeavor.

Public relations also involves managing a crisis. A good PR program deals with that before it happens and has a plan in place so you have people trained to speak to the media so they can be clear and concise about what they need to communicate. It also helps make sure they get the information out in a timely manner. Public relations is all about timeliness.

Is spending money on PR or marketing wise in today’s economic climate?

With the downturn in the economy, a lot of people say they can’t afford to do PR or marketing. Now is the time you should, though, because it is a little bit quieter out there.

Whether you are a small or large company, you want to position yourself as viable. If you intend to be a company that is around in five years, you need to be out there letting people know you’re still out there doing good things.

People say they’ll get the word out when the market gets better. But remember: Out of sight, out of mind. Public affairs is about consistently being involved and sharing your knowledge.

How can a business determine which branches of PR or marketing it might need?

One thing I always advise clients is that you don’t want to start with, ‘I need a press release!’ You need to start a few steps back. Ask yourself, ‘Who am I trying to reach?’ It’s basically a marketing plan. ‘What do I have to offer them? What is special about what I’m trying to offer them? Where are those people I’m trying to reach?’

If you figure out what that is and develop your message, it starts falling into place. You have to start by looking at it strategically.

Once you’ve decided that, you can determine priorities. Sure, it would be great to reach all your targeted audiences, but your resources may allow you to only do some right now.

Your PR plan needs to be strategic, or else you’ll be overwhelmed, and nothing will happen.

Maria Evans is an adjunct professor with Delaware Valley College and president of Martino Evans Communications. Reach her at (215) 738-2544 or

Monday, 26 October 2009 20:00

Ready for retirement?

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As executives approach retirement, they need to be comfortable that their team of professional advisers can focus on all of their needs.

“Advisory teams should include their investment, tax and legal advisers and at least one of these should have a specialty in estate planning,” says David E. Shaffer, director in the Auditing and Accounting group of Kreischer Miller. “If net worth and cash flow are greater than what is required to meet the family’s core needs, the investment adviser also should be knowledgeable regarding wealth transfer strategies.”

Smart Business spoke with Shaffer about how executives can develop a secure plan as they prepare for this new life phase.

What should the focus be when first considering a retirement plan?

A retirement plan should first address cash flow needs. The plan should be routinely revisited to make sure the core assumptions have not changed and new strategies are considered.

A key consideration is the amount of liquid net worth needed to maintain the family’s current lifestyle. This is determined by the estimated spending at retirement, the ages of the family members and significant financial needs prior to retirement, such as education for grandchildren, etc. Any unique circumstances — for example, handicapped children — must also be evaluated, and future windfall liquidity proceeds expected, such as inheritance or sale of a business, must also be considered.

Based on these considerations, the advisory team should be able to calculate how much net worth is required and the estimated annual needs of the family.

Historically, these factors have been based on a ‘typical’ portfolio of 60 percent stocks and 40 percent bonds, but this mix has not proven to be a long-term strategy. Today’s market considerations may indicate a different mix.

What are the key points that the advisers will consider?

  • Life expectancy: As of 2000, a couple that reaches the age of 65 has a 50 percent chance of at least one surviving past the age of 92 and a 25 percent chance of at least one living beyond 97. Planning for a retirement of 20 years is no longer sufficient, and for early retirees, four decades are possible.
  • Spending rate: How much per year can the retirees spend from the beginning principal? Typically, we see advisers using annual spending rates regarding principal per year ranging from 3 to 6 percent. Data shows that at a 3 percent spending rate, a retiree has a greater than 90 percent probability that funds will last at least 43 years. If the rate is increased to 6 percent, the amount of time is reduced to 16 years. Prior to the decline in stock values, many questioned a spending rate of only 3 percent when their portfolios were getting at least a 6 percent return per year. Now, after the most recent declines, many are wishing they had planned using the 3 percent rate.
  • Tax rates/mix of investments regarding retirement: Will the retirees be subject to tax on the proceeds that are being set aside for retirement, and what tax rate should be used for any taxable distributions, other taxable income, and/or capital gains transactions? At this point, income tax rates are likely going to increase, but no one has the crystal ball to determine what the final outcome may be. Assumptions should be based on a worst-case scenario since we are talking about how much ‘core capital’ is needed to maintain the family’s lifestyle. We are proposing a rate of 39 percent for ordinary income and a 20 percent capital gain rate, at a minimum.

How much is the current estate tax?

There is a 45 percent estate tax on all estates that have net assets in excess of $3.5 million, the exemption amount. In 2010, this tax rate is repealed to zero and, in 2011, the exemption amount is scheduled to be reduced to $1 million and the tax rate is scheduled to increase to 55 percent. Almost all advisers believe that prior to Dec. 31, 2009, Congress will amend the law to at least keep the 2009 exemption equivalent of $3.5 million and the 45 percent rate. There is also a generation-skipping tax (GST) for gifts made to individuals two generations or more below the retiree, such as grandchildren or nonrelatives more than 37.5 years younger than the retiree. The GST tax exemption is approximately $2 million.

What are some ways to minimize GST, gift and estate taxes?

  • Credit shelter trusts: For married couples that have net assets in excess of the exemption amounts, the retiree can create a trust at the first spouse’s death up to the exemption amount, effectively doubling the exemption for married individuals if assets of the respective spouses are properly titled. Typically, an attorney can draft these documents to satisfy the technical requirements.
  • Annual gifting: Both a husband and wife can gift up to $13,000 each without reducing the estate tax exemption amount. At a minimum, families with high net worth should be making gifts annually to children/grandchildren to reduce the amounts of estate tax that may be due in the future. These gifts should be assets with the greatest future appreciation value, for example, interests in closely held businesses that may be eligible for valuation discounts.
  • Pay tuition and medical expenses for another individual: The retiree may pay these expenses gift-tax-free without using the exemption equivalent amount, as long as the retiree makes the payment directly to the school or medical provider.
  • Other potential strategies: Qualified domestic trusts, qualified terminable interest property trusts, irrevocable life insurance trusts, grantor retained interest trusts and dynasty trusts should all be considered. These are complex alternatives, but, when properly used under the right circumstances, can significantly reduce the estate tax burden.

David E. Shaffer is a director in the Auditing and Accounting group of Kreischer Miller and specializes in government contracting. Reach him at (215) 441-4600 or

Friday, 25 September 2009 20:00

No surprises

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As a business owner, you need to be on the lookout for indemnification clauses in every agreement you sign, or you could be in for a surprise.

Indemnification clauses are the language in a contract that creates the transfer of risk. Brian Chance, vice president of claims and services at ECBM Insurance Brokers and Consultants, says that can be costly if you’re the party taking on risk in the agreement.

“You could become responsible for paying for things you didn’t anticipate, that were not budgeted, or that you didn’t build into your pricing for the work you performed,” he says. “It could create a liability that you aren’t prepared to handle.”

Smart Business spoke with Chance about how to avoid getting more than you bargained for in a contract.

What is the most common mistake people make when navigating contracts?

People sign agreements every day in the regular course of their business, and they don’t read all the fine print that can be in a contract. Contracts can be a page long, or they can be 25 pages long. Many times, people won’t read the nonbusiness transaction-related information in a contract.

For example, if I’m hiring you to paint my house, I might read the part of the contract that discusses what room you’re going to paint, what kind of paint you’re going to use and how much I’m going to pay you to do it, but I may not read the other stuff in that contract you give me. That ‘other stuff’ is where the problem lies.

What types of problems can occur in a contract?

When you sign a contact with an indemnification provision in it, you could become obligated for many different kinds of liability and payments you wouldn’t normally anticipate. If the contracts are ordered properly, those transfers of risks and costs are valid. After you discover the problem you can’t say, ‘I didn’t read the whole thing, so you can’t hold me accountable for this.’ Once you’ve signed it, you’re stuck with what the agreement says. The scary thing about an indemnification provision is it can cause you to become responsible for things you didn’t do or didn’t cause to happen simply by signing a piece of paper.

What can business owners do to ensure they don’t fall into that trap?

The most important thing is to read the entire contract before it’s executed. Second, don’t assume that a contract that is sent to you on a standard form is just like all the other contracts that look just like it and that you’ve signed in the past. Third, consult with someone who has experience at reading those types of agreements. It may be your insurance broker or attorney.

Why is professional help needed to read contracts?

You need someone who is experienced at reading the contract to help you realize what it is that you are being asked to do. Business owners can assume responsibility for many unusual and/or problematic things that someone looking at it logically wouldn’t ever think was possible. So you need someone who is experienced at reading contracts to help you understand exactly what you are being asked to be responsible for. A typical example of an unpleasant surprise is if you agree to be responsible to pay reparations for something that is not your fault. Signing contracts without consulting with someone who understands how they work can directly impact your bottom line.

How can contract mishaps affect your bottom line?

First, you can be responsible for something you didn’t expect to be responsible for and didn’t consider in your pricing. Second, if you sign contracts without someone advising you, you could be taking on legal responsibility for things for which you don’t have insurance coverage. By creating responsibility for yourself, you could be creating an uninsured liability. You may have to pay out of your own pocket because you agreed to do something your insurance policy won’t cover.

It’s one thing to take on responsibly for something your insurance carrier will pay for; it’s something else altogether to take on responsibility for something you have to pay for out of your own pocket.

How can a business owner become better at navigating contracts?

You have to read things you’re asked to sign. Many things you are asked to sign contain indemnification agreements that you wouldn’t naturally expect to be there. For example, you could sign a purchase order for something and it could contain an indemnification agreement.

Look for clauses in the contract that use the words ‘indemnify,’ ‘defend’ and ‘insurance.’ Phrases containing those three words are typically where you will find the problematic language in an agreement. That doesn’t mean it won’t be somewhere else, but most of the time the troublesome language is in those areas.

Work with a consultant, broker or attorney who can help you understand how to read contracts.

And last, take classes from local insurance societies that can educate you on contractual indemnification.

Brian Chance is vice president, claims and services, for ECBM Insurance Brokers and Consultants. Reach him at (610) 668-7100 or

Friday, 25 September 2009 20:00

The Carbone File

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Born: Camden, N.J.

Education: Bachelor’s degree in economics, Rowan University

What traits or skills are essential for a business leader?

You need to be honest and an effective communicator. You need to look people in the eyes and tell them what they want to know. People don’t want a wishy-washy leader.

What is the best business lesson you’ve learned?

Don’t fall on your sword. Learn from the decisions that don’t work out and move on. Inevitably, you’re going to make a decision that is not going to be the best. But you can’t dwell on it. You have to move on.

Carbone on decision-making: If you don’t have a certain intestinal fortitude, you can never make a decision. You have to have the ability to realize that sometimes you’re going to make a wrong decision. But you have to have the confidence to know that you’re not going to make such a catastrophic decision. If you’re going to make a decision that could have potentially catastrophic effects on your business, you’re certainly not going to make that decision without input from other people. If you allow someone to make that kind of decision in the first place, that was a poor decision and you didn’t do right by them or the company.

I tell my people if they call me and I can see that they’ve done the research, they’ve gotten the input, I tell them to make the decision. Sometimes, all they’re looking for is reinforcement. That builds confidence.

Wednesday, 26 August 2009 20:00

3 Questions

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Charles Bernier, president of ECBM, joined the firm in 1984 and later purchased it in 2001. The firm has doubled in size under his leadership. Bernier has helped ECBM develop service capabilities and create standards and methods for monitoring the consistent delivery of services. He graduated from Philadelphia University with a bachelor of science in business administration.

Q. How can a business determine the risks it faces?

The first step is to talk to your insurance broker and determine if your insurance broker has some sort of a procedure that they can come in and do an analysis of your particular business. If they don’t, I think you should find one that does. They’ll come in, and ask a lot of specific questions about your business and go through a step-by-step process to determine risk. They have to have a procedure; it can’t be just off the cuff.

Q. Are there ways to save money on risk management?

The answer is yes, and the process would be to evaluate the risk and make sure you understand what the costs of the risks are. We’re getting back to management. If you, for example, take a claim and manage the claim process, you will ultimately reduce the cost of the claim and, by doing that, reduce the cost of risk transfer. From a savings standpoint, it’s very important to look at the values of whatever you’re insuring and understand if the values are too high — perhaps there’s savings there. If your insurance broker is not actively speaking to you about this on a quarterly basis you need to contact them and say, ‘I want to re-evaluate what I’m covering.’ You don’t want to wait a year.

Q. How can a company benefit from a long-term relationship with its broker?

I think the way you benefit from that is your broker almost becomes an outsource of risk management. They become part of your team and they understand not only your company but your industry, so they’re acting in a proactive manner to help you reduce risks and contain costs.

Wednesday, 26 August 2009 20:00

Following the vision

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Today’s executives are relying more and more heavily on data, to the point that leadership abilities are diminishing, and true leaders are becoming harder to find, says Don DeLash, an adjunct professor at Delaware Valley College’s MBA program.

“There can be a big difference between managers and leaders,” DeLash says. “Neither extreme is good, but as a business executive, you should try to find the happy zone, where you recognize and blend the skills of a manager and a leader. Emphasize your strengths and build upon your weaknesses. What people are doing on the data side facilitates great management, but there is a void on the leadership side.”

Smart Business spoke with DeLash about how to improve on your weaknesses and how to balance the scales between leadership and management.

How does an overreliance on data impact a business?

Don’t get me wrong. Data is a great thing and there is deep analysis of and great belief in information. But as a byproduct, you don’t see the same emphasis on leadership or conviction about management-level trends, industry knowledge and gut feel.

People have a greater fear of taking a leadership approach because when managers make a decision, it can be quickly scrutinized using facts, charts and data analysis. People are more likely today to dismiss a decision or a leadership attempt because the data doesn’t immediately back it up. That makes them more cautious to go off the data and make a visionary decision.

But your competitors have data, too. The key differentiator can be whether they have the leadership.

How can managers become better leaders?

Even leadership has a process. To be a better leader, you first have to make your vision clear to your team. Then you have to align your organization around that vision and get the right people in the right positions. After that, it’s all about execution of the vision and making sure that you continually communicate through the process. Those are the elements of great leadership.

Managers should spend a proportionate amount of time on those things, in addition to the operational data and the results data.

There’s a saying that you can’t improve what you can’t measure. That’s true to a point, but I’ve never agreed with it wholeheartedly.

I’m trying to be a better father, a better husband, a better Little League coach, a better teacher and improve in ways that you can’t necessarily measure. Instead, I’ve tried to measure leadership by creating followership: How willing are people to follow me and trust in me? How often do they seek my guidance? It’s not very scientific, but I don’t think leadership is scientific.

How can a leader teach leadership skills to others?

There’s the question, ‘Can leaders be developed, or are they just born?’ I think leaders can be developed to a great extent. First, leadership is very risky by definition because if you make mistakes, they are very visible. Teaching managers about risk-taking is important — when it’s a good idea, how it should be approached, how to create a fallback plan. Analyzing the risk of your decisions is an important element of teaching confident leadership.

Second is developing communication skills. Communication doesn’t mean always being a chatterbox. The best leaders I’ve known were more about quality than quantity in terms of their communication. When they did speak, you knew it was something to take note of. Quality of communication over quantity is part of great leadership and is something that should be taught.

Today, instead of quality of communication, quantity of data has become the fallback. With electronic data, written data, vocal data, presented data, there is a tendency for businesspeople to fall back on data too much. Henry Ford wouldn’t have gotten away today with, ‘You can have any color you want as long as it’s black.’ He would have everyone in the company giving him all kinds of data and research.

Great leaders have the ability to communicate well and inspire their teams to believe in them.

How can you balance data-based management with more intangible leadership skills?

I don’t think we do a good job as a business community of educating people on decision-making and recognizing where they are in that manager-leader continuum.

We need to rely on data and continue to develop leadership. One trend — not just in business but in society — is that people are much less personal. We e-mail, we text, we have Web seminars. Just 10 years ago, that was not the case. There was a lot more personal interaction.

No one calls a customer or business associate for directions anymore. If you can’t find the address on the Web and punch it into your GPS, you’re Fred Flintstone. This has certainly created a strain on leadership development.

It takes a conscious effort to pick up the phone and talk to somebody, as opposed to dropping them a quick e-mail. Our society is trending away from relationships and personal connections. That needs to be brought back into businesses and schools and emphasized.

Don DeLash is an adjunct professor at Delaware Valley College and a financial adviser at Legacy Planning Partners in Doylestown, Pa. Reach him at (267) 614-6790 or