Daniel Bates

Monday, 22 July 2002 10:02

Avoiding the Internet Scrooge

Don't let unscrupulous Internet-based retailers ruin your holidays. So says the Better Business Bureau of Western Pennsylvania Inc.

The local membership organization offers the following tips to avoid those Internet Scrooges:

  • Do your homework - Become informed about the retailer before giving it personal information. Check its Uniform Resource Locator (URL) to determine if you're dealing with the correct company. Request a printed catalog with the retailer's permanent address. Keep in mind that just because a site looks sophisticated doesn't mean it's legitimate.

  • Think about security - If a site asks you to create a password-accessed account, don't use a password you've used for other accounts. And never e-mail credit information, including social security number or bank information. Such information shouldn't be needed to make a purchase.

  • Check the company's return policy - Complete customer satisfaction should apply to Internet sales as it should in any business. A return policy usually indicates the company at least is willing to stand behind its products.

  • Remember your rights - Just because a retailer is selling products by Internet doesn't preclude it from the same laws that protect consumers shopping by phone or mail. For instance, all transactions paid for with a credit card are subject to The Fair Credit Billing Act, under which you have the right to challenge incorrect charges or misrepresented merchandise.

For more information about satisfactory reports of local businesses, call the Better Business Bureau at (412) 456-2700.

Monday, 22 July 2002 09:58

Breaking the bottleneck barrier

When Mel Pirchesky and his group of investors from Eagle Ventures acquired Dawar Technologies last summer, the small manufacturer of electronic membrane switches and printed switch membranes was making money and had the potential to make lots more.

As Pirchesky is fond of saying about his acquisition strategy, “When we come into a company, there’s nothing magic in what we do. The company is usually 90 percent there in what needs to happen to succeed. The other 10 percent is the trick.”

In this case, though, Pirchesky just didn’t expect that “trick” to rear its ugly head so quickly, and in such a potentially devastating way.

But quick action on the part of Pirchesky, other investors and top managers, a healthy dose of self-analysis and the adoption of a seemingly simple advanced manufacturing process aimed at eliminating bottlenecks ultimately saved the day. Here’s what happened.

The 106-year-old company had survived years of changes as an offset typesetting and printing company. In its latest incarnation, it still provided printing services, except that it had identified a profitable niche in printing plastic graphic overlays for the membrane control panels of a host of electronic products. Recently, it began manufacturing the actual control switch panels for a number of manufacturing customers.

The company manufactured its products much the same way it did its printing jobs: It would get an order, set up its machines once and complete the entire order. Sometimes, that order would be for an entire year’s worth of components. Dawar stored the completed parts, getting paid for them throughout the year, once they were shipped to the customer.

The system, according to James Ocskay and his wife, Susan, who are part-owners and two of the company’s top executives, yielded the 41-employee company a 15 percent annual growth rate and several million dollars in annual revenue.

“One of the things we looked at was our turnaround time of three to four weeks, for instance, while others did it in six to eight weeks,” says James Ocskay, president. “And we had a lot of requests for stocking [finished product for customers]. When they gave us a purchase order, we thought it was as good as gold.”

The company landed enough of those big orders that it had to turn down other orders because its machines were always in use, according to Susan Ocskay, vice president of administration.

Then in October, an odd thing happened. As James Ocskay says, the graphic overlay printing business dropped “a little bit,” while the switch business climbed to 35 percent of revenue for the month. Overall, revenue for the month had climbed.

But the company lost roughly $50,000 that month.

“We call it Black October,” James Ocskay says. “It was a wake-up call, that’s for sure.”

This isn’t a story about failure, however. As soon as Pirchesky, the investors, and the company’s top management saw the numbers, they wasted little time in changing the company’s surprising course.

The first thing Pirchesky did was contact Ronald Hawkins, who was president of Allegheny Container, another Eagle Ventures company, and an operating partner in the Dawar investment. Hawkins’ expertise was in the development and implementation of advanced manufacturing processes.

Hawkins’ first course of action: analyze and review all steps of the manufacturing process and figure out what needed to change.

“What happens is that you have to try to steal time between 8 and 10 at night to do this, but we knew we didn’t have three months to do this,” Hawkins says of the exercise.

Adds James Ocskay: “I looked at it as a crisis.”

Nonetheless, Hawkins says he looked most closely at three parts of the process:

  • Set-up times

  • Through-put rates

  • Units produced per hour and per day.

The key problem, all agree, was in the numerous bottlenecks created along the production process. With big orders being pushed through the process all at once, some steps could handle far more units per hour than others. Workers at one station would finish their work and have to wait on the rest before taking on another order.

Part of the thinking behind such traditional production methods, James Ocskay says, was that the company had tried to cut down on set-up costs by setting things up once and producing the entire order. But the company also had to continually buy large quantities of raw materials up front, even if it wasn’t getting paid for the finished product for nine months.

“It worked well enough to make money, but not enough to eliminate bottlenecks,” he says.

Don Linzer, a partner at Pittsburgh accounting firm Schneider Downs who is chairman of the firm’s manufacturing focus group, says older small companies often manufacture products the way Dawar did, with lots of raw materials around.

“Smaller companies don’t always have the muscle and largess to manage cash flow by controlling inventory,” he says. “It can be very difficult. The old way is to have a lot of stuff around and not run out of inventory.”

It didn’t take Hawkins and the others long to realize that the answer was in eliminating the bottlenecking problem.

“What we were really after was to get, in a quantifiable way, the rhythm of the process’s eight to 10 steps,” Hawkins says. “We didn’t want one step operating at a different rhythm than the rest.”

Adds Pirchesky: “The bottlenecks have to pace the production line’s speed.”

Then there was the cash flow. Dawar incurred significant costs up front to buy supplies to produce the year’s worth of orders for some customers — and then store them. Meanwhile, customers only paid Dawar when it shipped them the products on demand.

The ultimate answer: a manufacturing process methodology Pirchesky calls J.E.T. manufacturing, or Just Enough Through-Put. It’s a variation of a method known as “Just In Time” manufacturing. The ownership/management team spent hours developing a formula built around the bottlenecks that determined how many units each work station could produce per hour without creating bottlenecks — and still meet customers’ demands. Then they figured out how much raw material they would need to produce those smaller quantities.

They cross-trained workers on a number of the process steps and based efficiency on each worker’s contribution to the overall process rather than on the capacity and speed of each step. And they no longer worried as much about set-up costs since they weren’t nearly as costly as the bottlenecks.

“It’s better to set up two to three times a year to do a year’s quantity than to do it all at once,” James Ocskay says of the implementation of the J.E.T. method. “Now everything runs smoother, and our lead time has been cut down from three or four weeks to one or two weeks.”

Schneider Downs’ Linzer does caution, however, that you have to be careful implementing such a plan because you don’t want to become too lean.

“You can literally get too lean and shoot yourself in the foot,” he says. “If you have a line with 40 people and run out of a 50 cent part, you’ll have to send everyone home. So the logistics are very important.”

But so far, the new system seems to be working well. In fact, thanks to such efficiencies, Dawar was able to pick up orders that it previously had to turn down. The result this past January was, as Susan Ocskay says, “that we saved 10 percent on production hours, while having the second highest billing period ever. The change was dramatic, but it happened quickly. People in the shop didn’t believe we could do it.”

Pirchesky and his investment team, along with the company’s top management, couldn’t be happier.

“It didn’t cost us anything except for the time to plan it out,” says Pirchesky, who hopes to grow the company to at least $10 million in revenue over the next several years. “Applying this technology to manufacturing is a great way to stimulate job growth, even for little companies. It’s not equipment. It’s not R&D. It’s just applying concepts that work out there and being willing to change.”

How to reach:: Mel Pirchesky says Eagle Ventures is looking for other local small manufacturers to acquire. Call (412) 683-3400. The Ocskays can be reached at (412) 261-1904.

Monday, 22 July 2002 09:57

How about some coffee with that beer?

The new general manager of John Harvard’s Brew House in Monroeville discovered quickly that the restaurant had a bit of an image problem. But it didn’t take him long to turn that problem into an effective grass-roots marketing opportunity.

The problem, says John Longo, who began running the restaurant in February, is that some people think Brew House means coffee house — not microbrew pub, as the restaurant’s Boston-based owners intended. He realized the problem when a woman walked in on a recent Saturday morning before the restaurant opened for the day and asked for a cup of cappuccino.

“I told her this was a microbrew pub that served beer, and she said that’s not what the sign says,” Longo recalls.

Instead of sending her on her way, Longo says he summoned his chef to whip up a cappuccino for the woman, who was prepared to leave in a huff. While she sipped her drink, Longo told her about the restaurant and everything it offers. Eventually she left, clutching a coupon for a free appetizer for the next time she comes for lunch or dinner.

Monday, 22 July 2002 09:56

The art of the cooperative

That’s why they usually leave the business end to gallery owners. The one drawback: gallery owners often take a steep percentage of sales as commission. Hence, the term starving artist.

But in downtown Pittsburgh, a group of watercolor artists have adopted a rather painless solution that gives audience to their art without putting them in the poorhouse. They formed a cooperative.

The cooperative idea came to artist Meda Kiming Rago early last year. She had been showing her work in local cafes that agreed to hang the art on their walls. But when she lost her job after the company she worked for dissolved its office, she pursued her art full time. To make a living at it, though, she thought she would have to find a gallery willing to show her work, which would have meant paying 15 percent to 30 percent commission to the gallery.

“After framing and other costs,” Rago says, “it’s tough to make a living at it.”

Then she and a number of her fellow painters, all members of a local Watercolor Society chapter, got together and discussed potential solutions. That’s when someone brought up the fact that there was a cooperative gallery in Washington, D.C., where members paid $1,000 in dues a year and had to commit to gallery sitting. They realized that no such cooperative existed in Pittsburgh, so they created one.

She and artist friend Kit Paulson (wife of Scott Paulson of WDVE-FM fame) last summer opened Watercolors, a gallery that recently moved to Penn Avenue downtown and boasts 75 members. Each pays a $100 initiation fee and $25 a month for the right to hang three pictures at a time on the gallery walls.

But even this small cooperative needed some rules. First, the group set up bylaws that include such legalities as protecting any single member from being personally liable for any problems that might arise; making sure the gallery and cooperative are insured; and requiring regular membership meetings.

In addition, members each must agree to “gallery-sit” periodically to make sure the gallery doors stay open at designated times during the week.

Rago says the biggest challenge now is making sure members and officers are communicating regularly.

She notes that most of the artists don’t get caught up in membership politics, as long as they can display their art.

“The bottom line is that most artists would rather be making art than doing business,” she says.

The gallery so far has sold more than 60 paintings, which Rago says demonstrates the early success of this cooperative.

Says Rago: “It’s the fulfillment of a dream for me.”

For Watercolors gallery information, contact Rago at (412) 231-2049.

If there’s one person in this region who truly knows adversity, it’s Ilana Diamond. But she’s also among the few who know how to turn that adversity — and the challenges it creates — into prosperity. That unique ability is what made her the ideal winner of Mass Mutual’s 1999 Blue Chip Enterprise Award.

Diamond’s entrepreneurial adversity began in 1990, when her father, Irwin Diamond, founder and president of Chicago-based Sima Products Corp., died, leaving his majority stake in the company to a family estate trust. Ilana Diamond, a senior manager with accounting firm Price Waterhouse in Pittsburgh at the time, headed that trust for the family.

Initially, her plan was simply to sit on the company’s board and serve as an adviser. She found over the next couple of years, though, that the company was heading into serious trouble as it lagged further and further behind its competition in the manufacturing of photo, video and camcorder accessories. Moreover, the company’s new president, who was his father’s second in command, was in his 60s and close to retirement.

Still, she didn’t just jump in and take over, especially since she told the board that she wanted to keep her family in Pittsburgh because of other commitments. So she took the title of vice president of planning and development, allowing her to get closer to the day-to-day business without shaking up the operation.

Then she advised the board that the company needed to move more aggressively into the digital computer age with its consumer electronic products, and that it needed to quickly expand its product lines. But she didn’t try to change things overnight.

“I decided that it didn’t make sense to come in and say, ‘I’m here,’ and just start to change things,” she told SBN in a 1997 interview.

But as she learned the hard way, the less-than-dramatic change taking place was pushing Sima Products onto a course of self-destruction. Then in 1993, the president decided to retire.

That’s when other board members took her aside and told her that not only had her observations been correct about the company’s direction, but that the only way for her to effectively change its course would be to run the company herself. And that’s what she decided to do.

“He was right,” says Diamond, who was seven months pregnant at the time. “You can’t sit on the sidelines and direct.”

When Diamond took over, she says she faced lots of resistance from some employees who apparently didn’t want her running the company. She ultimately told the board she would have to move the company to Pittsburgh. The board agreed.

She uprooted the company and relocated it to Oakmont, Pa., where she continues to rebuild the company along the course she has prescribed since the beginning of her tenure there. She has replaced the 75 percent of the staff that didn’t make the move. She also has implemented a production improvement plan that has cut operating expenses by 35 percent.

And she has pushed employees to pursue a growth strategy that avoids competition based on price alone.

Today, the company employs 15 people and generates annual sales of more than $8 million.

Diamond says her father, while likely acknowledging her accomplishment with Sima Products, probably would offer one piece of fatherly advice if he were here — and it’s most likely one she wishes she could adopt today: “Don’t work so hard.” Ray Marano also contributed to this article.

Hats off to the finalists

Congratulations also go out to Mass Mutual’s local Blue Chip Enterprise Awards finalists, Air Excellence International of Oakdale, Pa., and Precise Tank Modifications of Madison, Pa.

Air Excellence (featured in this month’s Start-up section), whose president is Robert Williams, restores interior panels for commercial airplanes. Precision Tank Modifications, owned and run by Don Maughan, specializes in the removal and modification of oil storage tanks.

Monday, 22 July 2002 09:54

From the editor

I stood in line for at least a half-hour to talk to my son’s fourth grade teacher during the annual open house last fall. Parent after parent paraded before her to hear another doting rendition of “Your son’s a wonderful student” or “Your daughter is so pleasant to have in class.” Then it was my turn.

As I identified myself, the teacher took a deep breath and smiled at me. “I’m so glad you came tonight,” she began, “because, let me tell you ... ” Then she began to tell me.

I felt like I was in school again. She proceeded to tell me how Adam liked to talk a lot and entertain the others in his class. She told me how he liked to negotiate with her. And she said he liked to “work the room” when he would arrive at school in the morning.

He liked to work the room? I didn’t realize until later what that was all about. One day, Adam asked me to get onto the Internet for him. He was looking for new patterns so he could create new figures out of large beads and some kind of silky thread. It turns out he was selling them to fellow students as key chains or knapsack decorations. Indeed, he was an entrepreneur.

Dr. Cindy Iannarelli, this month’s cover story subject, adamantly contends that all children hold within them an entrepreneurial spirit, a spirit which we slowly sap from them as we mold them into conforming adults. Family business owners in particular, she says, should be trying to reverse this process as they raise potential successors to their businesses. And what better way to do it than to start teaching them about the business as early as 3 years old?

“Your business is like a classroom,” Dr. Cindy stresses. “Your child will have so many more life skills that most people aren’t teaching in the classroom.”

Frankly, I’d be tempted to take this whole notion a big step further. I think we could stand to learn a lot from our kids in business, if we’d just take the time. Here are five things my wayward son taught me about business, without the advantage of having a graduate business degree.

Know what your customers want. He realized quickly that boys usually preferred lizards and alligators, while the girls liked the bumblebees and butterflies. So he made what they wanted, and they paid him either in cash or in milk, pencils or yo-yos.

Manufacturing efficiencies can save you money. He knew exactly how many beads each figure required and how much the beads cost. So he looked for sales and clearances to get the cheapest beads. And he would search the Internet for new patterns for the same figures, which required fewer beads.

Research and development are important. He was constantly trying new patterns and remaking the same patterns with different-colored beads to see what sold best.

You must be willing to change with the times. When his lizards lost popularity and that raunchy South Park cartoon became the elementary school rage, he searched the Internet for South Park character patterns and began making them. He wasn’t hung up on what worked in the past.

You have to be willing to work the room. It wasn’t enough for him to have a cool beady product to sell. He had get out there and, as the teacher disdainfully put it, “work the room.” That’s what sales and success are all about.

Now, I could have encouraged him further. I could have helped him design the packaging. I could have talked to him about distribution and pricing and every other teaching opportunity his little venture could have provided us. Instead, I told him about my open house experience. I blew a perfectly good opportunity to teach him about business and entrepreneurship —such opportunities that are important if you’re to raise a diligent successor to your company.

And I told him to quit working the room. Fortunately for me, he doesn’t always listen.

Monday, 22 July 2002 09:47

Looking up

The rumpled old man, his long beard matted to the gray tattered blanket around him, almost blended into the doorway as I strolled casually past him on Forbes Avenue with my young son that Christmas Eve.

I hadn’t even noticed him or the cup of change in front of him.

It was my son’s first trip into Pittsburgh, and I wanted him to fully experience the blend of music, frigid air and the mad rush of last-minute shoppers like me running around like panicked elves. I dragged him by the hand up and down each street, showing him the holiday window displays.

I pointed out the landmarks and tall buildings, and I shared some history about the region. We rode the escalators and bought gifts. In all of this Christmasy excitement, I almost caught myself singing “Silver Bells” as we glided through this fair and festive city.

But I never saw that old man.

We rushed right past him and on down Forbes to Wood Street when my son finally tugged on my hand to stop me.

“Why is that man sitting there like that?” Adam asked, pointing to the weathered old man in the doorway, sitting hopelessly on a piece of cardboard. This was the first time he had ever seen a real beggar on the street.

“He has no place to live,” I told him matter-of-factly, “and he wants people to give him money.”

“But it’s Christmas,” Adam said. “You mean he doesn’t have anywhere to go on Christmas? No family of friends?”

“No,” I said. “He lives on the street.”

I pulled Adam forward. We had lots of shopping left to do, and we were running out of daylight. But he pulled me back and just stood there. Then he asked me the question of questions.

“Could we take him home with us tonight?” he asked. “Nobody should be alone like that on Christmas.”

I stood there speechless. He had just knocked the wind out of my pleasantly shallow Christmas experience. So I gave to Adam $5 to give to the man, and we went on our way.

I was too busy watching the sidewalk in front of me to look up long enough to notice this guy. I was too busy thinking about the experience I wanted to have and share with my son of downtown Pittsburgh, and of all the things I still had to do between then and Christmas Day.

My son got to experience Pittsburgh, alright, but not the Pittsburgh I wanted him to remember. But I was too focused and selfish to notice.

How many of us go through our business lives thinking about ourselves and the success of our companies, staying focused only on what remains in front of us? And we fail to look up long enough to see how we might contribute to the greater good.

Contributing to the economic vitality of this region certainly is part of it. But many people don’t bother. They figure someone else will reach out and mentor or invest or help set policy for the region’s economic future. They’re too busy managing their own companies, they say. They’ve got enough to do without worrying about getting involved in the region.

Those same people then grumble about how far behind this region is economically from similar cities. And they complain about the region’s shortcomings. In football, we call them armchair quarterbacks.

In this special issue, we have taken the time to identify 55 business, civic and government leaders, Pittsburgh’s Pacesetters, who are willing to give of their time, money and ideas to make Southwestern Pennsylvania a great place to live and do business. Many of them are doing it one person at a time. Some share their wisdom and experience with others. Some are using the wealth they have earned in this region to invest in the futures of other entrepreneurs. Still others are doing what they can to promote Pittsburgh to the region itself and to the rest of the world.

Then there are people like Jack Roseman, this month’s One On One interview, who offer up all of the above in a life dedicated to others in business. It took him a massive heart attack and doctors giving him one day to live to get the picture. But when he finally looked up from his life as a workaholic entrepreneur, he never looked back.

Twenty-seven years later, he’s still looking up, taking time to notice the people who need his help — and then helping them. That’s why I call him the Quintessential Pacesetter.

So what does it take to become a quintessential pacesetter? Wisdom that you’re willing to share, passion for life and for the region — and a compassion that forces you to take the time to look up and see who you can help today. But most of all it takes action. You can think about it all you want, but it’s your action that truly benefits the greater good.

In this issue, we’re talking about business and economic prosperity, but the same does apply for the greater good of humanity as well. If you make only one New Year’s resolution this year, make it this: To look up and contribute to the greater good of this region and its people.

It’s just a shame it took an innocent, compassionate 8-year-old to teach me that lesson. Daniel Bates (dbates@sbnnet.com) is editor of SBN magazine.

Monday, 22 July 2002 09:41

Think global, but ...

William Goodlin will be the first to tell you — taking your product or service overseas can prove difficult at best.

He should know. As the long-time president of Bricmont Enterprises, a local engineering firm that designs furnaces for the steel, glass and brick industries, he has taken 12 trips to China in the past two years, 10 days each trip. And he still doesn’t have any contracts there.

But he wouldn’t have it any other way.

Goodlin knows that exporting takes patience, not to mention persistence and some level of fortitude. And the result? Since Bricmont, a Southpointe, Washington County-based firm that employs about 100 people, started targeting overseas projects in 1992, it has increased its annual revenue to more than $50 million. Today, 37 percent of its revenue comes from export sales.

So why aren’t more Pittsburgh-area companies doing it? Wayne DiBartola, a senior technical consultant working with the World Trade Center Pittsburgh, puts it simply: “Business in the U.S. is too good, so they’re reluctant to go international. But I would think twice about that because the future is in the global markets.”

For those willing to try, he offers this advice: “Persistence, persistence, persistence, persistence. And patience, patience, patience, patience.”

Both he and Goodlin, along with World Trade Center director Mame Bradley, are on a mission to increase export activity in the region. They recently took their message to a gathering of CEOs at a CEO Club program.

“We are way behind in terms of export employment,” Bradley told the audience, adding that only one job in 20 in the region is the result of export activity here, far behind the statistics of other metropolitan areas. “But for every billion dollars in exports, 15,000 jobs are created and supported. That’s one job for every $66,000.

“If we could catch up to the rest of the country, we could add 60,000 new jobs immediately,” she says. “The impact of $3 billion on local business is very direct and very powerful.”

The impact on a company’s bottom line isn’t so bad either, Goodlin says. Bricmont earns a profit margin of between 4 and 8 percent on domestic sales. But overseas, it can earn a margin in the neighborhood of 12 to 17 percent. That got Goodlin’s attention.

So where does a company begin? Goodlin offers a laundry list of advice, beginning with a willingness to work with the U.S. government.

“We avoided the government like the plague for 35 years,” he says, before finally realizing that it could help Bricmont immensely in breaking into new markets. Today, the company works actively with the U.S. Trade and Development Agency, the Export-Import Bank, the U.S. Department of Justice, U.S. embassies and the U.S. Department of Commerce in both Pittsburgh and Washington, D.C., among others.

Goodlin says he even relies on the government for cultural information, so that he’s aware of appropriate and inappropriate goodwill gestures and other behaviors before entering a market.

Time is the other significant barrier to entry, Goodlin stresses. As with his Chinese adventure, overseas relationships require a much longer-term view of things.

“When you get into the international market, they don’t know you from Adam,” he says.

That means you have to take the time to get to know the people and how they do business. Overseas, relationships come long before actual sales, in most cases.

Here’s the rest of Goodlin’s checklist for export success:

  • Your senior executives must make a huge commitment to doing business overseas because they will be doing most of the relationship building.

  • Expect to make a large number of trips to those overseas destinations. “They want to see you more and more,” Goodlin says.

  • Be prepared to share three to four times the information you typically provide to prospective customers. “Customers desire education on your products,” he says.

  • Expect your first sale or contract to take as long as three to four years to close, which may be how long it takes to develop a comfortable relationship with the customer.

  • Expect some language barriers. But, Goodlin says, most prospective customers want to speak English in the meetings, even if their English is substandard. “They’ll use you as the English teacher,” he quips.

  • Transportation within some countries can prove difficult, so leave lots of time to get to your business destination.

  • You need a local agent within your target country, which you can locate through U.S. government officials.

Overall, Goodlin says, entering the export arena as a senior executive “does change the way your life is, and your husband or wife won’t see you much ... but they say absence makes the heart grow fonder.” Daniel Bates (dbates@sbnnet.com) is editor of SBN.

Monday, 22 July 2002 09:40

Lessons from the jungle

When Bob Smith's Colorado Springs, Colo.-based marketing firm was hired by a small computer software company to get the attention of top executives of computer giants that were potential customers, he could have just produced a slick brochure and sales kit.

But "normal" isn't exactly how one might describe Smith's typical approach to marketing challenges.

For Smith, the only logical way to the computer giants' hearts was through, well, computers. So his team purchased a bunch of laptop computers and packed them tightly into secretive-looking metal attache cases, complete with combination codes hidden behind provocative labels. As the recipients followed very specific directions, they ultimately found themselves facing multimedia presentations with a "cool" message.

Adding to the creative messages was the fact that the team sent them directly to the executives' assistants, asking for their feedback on just how cool those kits were. And if they felt they were cool enough, they were asked, could they simply pass them along to their bosses?

Smith says the cost of the marketing campaign -- roughly $5,000 for each complete kit -- may seem a bit steep, but the result was millions of dollars of new business for the small software firm.

This was the general message from Smith at Duquesne University's second annual Entrepreneur's Growth Conference, where he was the morning keynote speaker. Smith, armed with a rain forest full of jungle props, says he ventured head-first into such creativity out of necessity. Blessed with the less-than-unique name of Bob Smith, coupled with Communications, Smith says his marketing communications firm almost went broke before he decided he needed something to make him stand out.

That's when he decided to rename his company Jungle Marketing Inc. and build his consulting and speaking businesses around the jungle theme. He's been swinging from vine to successful vine ever since.

His message to the masses: "High-impact, relationship-based marketing is the key to the future success of all small businesses. We need to connect on an emotional level with our customers."

The approach, he says, has to begin with the passion that drives the entrepreneur into a particular business.

"What happened is we have forgotten why we have started it in the first place," Smith says.

Then there's what he calls reasonability, which restricts one's thinking.

"You have to break the rules," he says. " ... Reasonability does not work in a small business. You have to reinvent yourself. Are you on the edge?"

To reinvent your company, start with your Unique Selling Proposition, which, according to Smith, has four goals:

  • To motivate the prospect.

  • To attract attention.

  • To distinguish you from the competition.

  • To fulfill an industry gap.

"But don't show your lawyer your USP," Smith jokes, given the aggressive nature of the selling proposition.

Then you have to create an attention-getting marketing campaign around the USP. Creating a campaign, Smith says, is all about building what he calls your "magic story." Here's how to do it:

1. Use headlines. "Ninety percent of your story is written after you have established a powerful headline," he says.

2. Harness the point of WIIFM, or What's In It For Me? "You have to understand the emotional buying criteria of your customers," he says, along with what motivates them.

3. Employ power words such as free, new, money, discover, introducing, suddenly, health, easy, proven, guarantee, you, your, save, love and how to.

4. Package it uniquely. For instance, Smith worked with a dry-cleaning company to find ways to promote its customer service. During a discussion, they realized customers probably don't even notice that the company replaces missing buttons -- for free. So they launched a marketing campaign with smiley stickers and a note that tells customers when a button has been replaced. Sales increased substantially, Smith says.

5. Reverse the risk of buying the product. Include some kind of guarantee, perceived or otherwise, to assure customers that they take a very little risk in buying your product. In the end, Smith advises, remember this: "People will almost never remember what you say. But people will always remember how you make them feel." How to reach: Jungle Marketing Inc., (800) 444-4094

SBN was a proud sponsor of the 2000 Entrepreneur's Growth Conference. Daniel Bates (dbates@sbnnet.com) is editor of SBN magazine.

Monday, 22 July 2002 09:38

Airing it out

A little more than a year ago, West Penn Airport was a tiny, obscure, public-use airstrip known only to a close-knit group of flying enthusiasts.

Then, one day, everything changed. Suddenly, that little airstrip and the property surrounding it were propelled into massive economic development that made even the governor's office sit up and take notice.

That was the day Rock Ferrone flew over it.

Ferrone, president and owner of printing industry equipment manufacturer Rock-Built, simply wanted a place to land and keep his four-seater Cessna. So when he found out the airport's owner wanted to sell, he couldn't resist. He also couldn't sit still.

Ferrone didn't see just a tiny airstrip. He envisioned an entire business community built around a slick, new airstrip, with business owners flying in and out all day long. And he saw himself leading the way.

If skeptics existed back then, when he started articulating his high-flying ideas to anyone who would listen, they're gone now, thanks in large part to the giant earth movers, bulldozers and dump trucks that have begun to reshape the land around the airstrip. The earth-moving equipment is preparing the land for a 270-acre office park, which he has named Rockpointe Business Airpark.

Ferrone, with help from Pennsylvania Lieutenant Gov. Mark Schweiker and a host of other local dignitaries, recently kicked off the development with a ground-breaking ceremony. However, Ferrone himself has been breaking new ground, figuratively, for the past year as he works every state and federal government angle in his efforts to talk up the project. He was also trying to line up early funding for a project which he predicts will cost about $30 million before it's all finished.

His efforts have landed him as a poster boy of sorts for general aviation-driven economic development in the state as he cuts through bureaucracy with speed and a welcomed sense of wide-eyed naivete. In fact, he managed to convince not only state officials but township and school district officials as well that his development project was worth getting behind.

As a result, the combined taxing bodies have designated Ferrone's site as a Keystone Opportunity Zone, a program launched last year which allows businesses to locate to the site free of local, school and state taxes for 12 years. Ten-and-a-half years remain on that program, compelling Ferrone to forge ahead even more aggressively than before.

Said Schweiker at the event: "Suddenly we stand here looking at the soon-to-be-developed 300-acre airport industrial park. Together, there's no stopping Allegheny County. There's no stopping Pennsylvania."

Rita Pollock, executive director of the economic development and planning agency SPC, sums up Ferrone's efforts simply.

"He's an absolute dynamo," she says of Ferrone. "You don't see people like Rock Ferrone who are so driven and so active. There's something about him. He's such a good guy. And this project is outstanding, because it combines general aviation and industrial sites. It's so clearly a winning opportunity."

Mulugetta Birru, county development director for Allegheny County at the time of the ground-breaking, adds: "He has the energy to move a mountain."

In a very real sense, that's just what Ferrone and the earth-moving crew are doing. They are preparing the land for a new airstrip that will extend 5,000 feet --almost double the size of the existing strip -- and be 100 feet in width. Plans also call for a new terminal building, which will house a restaurant and fuel service company for aircraft, as well as facilities for the two flying clubs that use the airport.

The airstrip and terminal ultimately will be turned over to a public authority as a requirement of receiving state and federal grants that are available to improve public-use airports.

But the biggest part of the development is the rest of the land surrounding the airport, which Ferrone hopes to turn into a parklike office complex housing 30 to 40 businesses and providing amenities such as a walking trail, a golf course and even racquetball, to name a few.

"I want it to be a country club environment," Ferrone says.

Ferrone has secured a significant development commitment from Zambrano Corp., which has known the Ferrone family for years, according to Eugene Zambrano III, vice president of Zambrano Corp. and a general partner in the firm's commercial real estate holdings. Zambrano, which provides commercial construction services, owns 16 commercial and residential buildings throughout the Pittsburgh area, including a 70-unit high-rise in Leetsdale, a 10-story, 100,000-square-foot building in Monroeville and a 50,000-square-foot commercial/industrial building in the RIDC Park in O'Hara Township.

"What we bring to the deal is 40-plus years and tons of real estate development credibility," Zambrano says.

For starters, Zambrano plans to build a 25,000-square-foot headquarters building for its own company, which currently is located in Sharpsburg. The firm is doing so on a five-acre parcel it purchased from Ferrone. Zambrano says the company will use three of the acres for its headquarters and the other two for other "real estate investment."

Zambrano says he reacquainted himself with Ferrone last year after seeing a cover story about him in the November issue of SBN. From that point, Ferrone took him for a ride to the airport for an early look.

"As soon as we drove up there last November, it's like I got it -- I understood," Zambrano says of Ferrone's vision for the property. "He's a fireball and a great entrepreneur."

Zambrano and Ferrone also have entered into an agreement to jointly develop a 52,000-square-foot flex-space office building on speculation and are in discussions for others.

Moreover, Zambrano Corp. is in line to provide construction services for any third-party developers who plan to purchase land in the air park for office buildings. Zambrano won't disclose specifics, but he says he's in discussions with at least seven people who have expressed an interest in building.

Says Zambrano: "Right now the action is fast and furious." Ferrone, himself, plans to build a new headquarters and manufacturing facility there for Rock-Built sometime "in the middle of next year." He also has plans to build a new home on the property which would allow him to taxi from the runway right to his home. Daniel Bates (dbates@sbnnet.com) is editor of SBN.