Duane Bennett

Monday, 22 July 2002 10:03

Making a living, or making a life

Arnold Zegarelli has rebuilt his life on a loss. From the 1950s to the 1980s, Zegarelli was one half of the most renowned duo on the Pittsburgh hairstyling salon scene with his brother, Robert. "I was the how-to, technician, he was the feeling," Zegarelli says. "Together, we made one good hairdresser."

The pair became prime assets of Seligman and Latz, Inc., the largest salon chain in the world, which owned Horne's and other department store salons, through the 1950s and '60s. They went on to open an advanced haircutting school for the Pittsburgh Beauty Academy, dubbed the Coiffure Creation Academy from 1961 to 1971.

But when Robert passed away in 1981, it was as though Zegarelli were torn in half, he says. "I had to reinvent myself, develop the other side of my talents he had filled," Zegarelli says.

He began to look at the elements of his personality-mental, emotional, spiritual, financial, physical-as spokes in a wheel that he needed to keep in balance.

Robert's passing also gave Zegarelli incentive to grow and create.

"When he died, I really realized that I am not immortal," Zegarelli says. "So many beautiful thoughts died with him. I decided to put all these ideas and observations I was collecting all through my life down and compile them."

Already vice president of training for Seligman and Latz, the largest salon chain in the world, Zegarelli created a whole new series of seminars he would put on for company employees, and eventually as an independent contractor to non-fashion-industry companies as well. He entitles the series "Positive Achievement through Holistic Hair-dressing. He became a mainstay of local and national television, appearing on Pittsburgh Today regularly to make over audience members and on Oprah Winfrey, both in Baltimore and Chicago.

Zegarelli also created his own line of beauty products, Arnold Zegarelli Products, which he says grew from his and Robert's ideas. Zegarelli products are slowly gaining a foothold in a hotly competitive market dominated by giants like Matrix and Redken. Zegarelli's goals for the line are long-term ones. In keeping with his philosophy of balanced, stable growth, he says he wants to create a classic for professionals, and he's in no hurry to mop up short-term profits.

And finally, in a culmination of his goals and ideals, Zegarelli recently published a book of his favorite credos to live by, Diamond Capsules for Success and Wisdom, which can be found in Pittsburgh-area Barnes & Nobles and Borders bookstores. We asked him about his credos and his lifetime of developing them.

Where did you get all your quotes?

From talking to my clients. I've learned such a great deal from them. I don't like to give any names of who they are, though. It's like being an attorney, attorney-client privileges. You shouldn't take advantage that way. There was one famous hairdresser in New York who used to do JFK Jr.'s young wife. He started talking about the things she would tell him, and she dropped him right away. I don't think you should use people, you should love people.

Building relationships in your business is even more important than in most, isn't it?

We are really licensed to touch. People, when they come to us, really let down their hair literally; they let down their defenses. A trust factor is built in. One of my favorite bonus gems from the book is the noble quartet, four keys to building any type of relationship. Part one is trust, two is respect, three is sharing a common goal, and four is bonding. I don't do hair, I do people. Cutting hair is easy. It's the people that really fascinate me.

Hairstyling and fashion have the reputation for being a very name-recognition-based industry. How did you begin to build a nationwide reputation?

We would go out and do lots of international shows. You see, a manufacturer [of hairstyling products] would go out and find the best stylists from across the country and get them to teach cutting and styling onstage and use, say, Clairol products. Robert and I became very well-known. People would come to school from New York, from everywhere.

If you keep doing nice things for people, it comes back to you 100-fold. Robert and I used to speak to the Ladies Clubs around here in Pittsburgh, 30-some years ago. We used to go to the club and demonstrate on how to set your own hair, and at the end, we would give one lady a gift certificate for a makeover. And one person would win, but 10 would come after her! It was really priming the pump.

Does that kind of promotion work especially well in your field? After all, your service isn't like a watch, that you'll only need one of, but a service you'll want again and again?

Absolutely. When we used to go on "Pittsburgh Today," we weren't just showing hair styles, we were giving education, not specifically to get customers, but to educate the audience. It all keeps going back to the same thing.

So many in business aren't patient enough. They're always in a hurry to make money right away and don't try to build relationships. You're not going to be successful right away. When you start a business, you're just not going to make money right at first. If you just think about the short term and just getting something from your customers, never mind about the future, that's a win/lose situation. It should be win/win, and that's the way to sustain a business.

Not long ago, I heard the greatest story. A young Indian man and maiden were chasing the goddesses of success and wisdom. The funny thing is, first, they tried to catch Success. But she eluded them. When they decided to chase Wisdom, Success caught them. When I heard that, I said, that's got to be the name of my book, Success and Wisdom, because it represents the way to go about finding balance and happiness in life.

How did you get into your own product line?

Robert and I had so many ideas, so many creations, and we were always trying to find what the customer really needed. But the exact right thing was never on the market. We knew what we wanted-for instance, a mousse that would give fine hair lots of body, but was light and wouldn't weigh hair down. But we couldn't afford to do it ourselves.

Eventually, after Robert died, my sister-in-law Judy went into the business of manufacturing of beauty products and makeup. When her company went public, she came to me, and said, could we try to start this company, with you as the head? It's a public company, and I design the lines and act as the chairman of the company. It's a very different type of business.

When you're marketing your product, the fact is, the name is what attracts attention and respect of the buyer. That's the key to these sales. These products are sold from the hairdresser to the consumer.

And it's doing fine. We're playing ball against some real giants. The key is distribution. One way is to have a very large advertising budget and go directly after the consumer. Or do what we do-build our name with the professionals and find a niche.

Mine is a pretty general product right now. We plan to take it long, slow, and solid-we're in no hurry. We want a strong foundation, built on a cadre of professional users who want quality products. It doesn't have to necessarily be massive. It take just tons of money to introduce a new product. We have to get the basics first. The stage we're at now is growing distribution.

We've been on the Home Shopping Network with the products, and it's been very successful. It was more of a testing situation. We go on five times a year. As far as sales, you don't make a whole lot of money doing this, but the exposure is just great; it builds fantastic consumer awareness.

How did you decide to do the book?

The book really grew from the product line. Once I get to the top of one mountain, I find another. It was the next logical way to find a place for my ideas. The book is a legacy, it'll live after me. So many ideas die with the person.

It seems like you're really into the philosophy of growth.

I like to try t o be a creative entrepreneur. I'm not just interested in making money. Success follows wisdom, and my life is beautifully balanced because of that. It's a shame so many people spend so much time just trying to make money and not helping others get success. Eventually I know if I help others, I'll get mine.

My greatest gift is as an educator. As an educator, you affect eternity. Another of my favorite quotes is, you make a living out of what you get, but you make a life out of what you give. That's how I feel as an entrepreneur - I want to make a life.

Maggie Bennett is a freelance writer from Pittsburgh.

Monday, 22 July 2002 10:01

The Zoo Guy's clam to fame

For the last four years, Saul Markowitz has been known as "The Zoo Guy." Director Barbara Baker and Markowitz's marketing department took the Pittsburgh Zoo from a withering nonevent to one of the city's favorite places to be. True, privatization and Regional Asset District Funds played an important role, but without an aggressive campaign to awaken Pittsburgh to changes at the zoo, it could well have been a case of throwing good money after bad. And it all started with a clam.

In 1994, Markowitz and Marc Advertising began their "But have you seen the Quahog Clam" campaign. A series of TV, radio and other media spots appeared, featuring all the animals at the Pittsburgh Zoo and leaving one unseen, hinting that, unless you've seen the clam, you haven't seen the zoo. Although it really was just a clam, the campaign worked, spurring the zoo to its second busiest season ever without even featuring a new attraction.

Markowitz kept hammering home one imaginative campaign after another. Four years later, attendance is up almost 50 percent-more than 770,000 people visited the zoo last year. Membership is up and major sponsors including AT&T and Duquesne Light have lent their names and assistance.

To get the zoo there, Markowitz used a blend of marketing and public relations with a couple of ideas: use humor and get media attention with advertising. It's the same formula he used at the Pittsburgh Symphony, the Benedum Theater for the Performing Arts and Carnegie Mellon University's College of Fine Arts.

In April 1997, Markowitz took the leap and started his own business. Now, as Markowitz Communications, his team still works with the zoo's lions and tigers and bears, as well as other corporate and nonprofit clients across the region.

In this month's One On One interview, Markowitz tells how he turns humor and a low budget into effective publicity and media attention-even for the lowly clam.

How do you get so much attention for your clients with so small a budget?

You have to be very proactive in what you're doing, PR-wise, marketingwise, promotionwise, everything, because no one will do anything for you unless you ask for it. It's not every day that you have Phantom coming in. I always say that in the theater world. It works for any other clients we have, as well.

When I was with the Benedum, I liked the shows that were tougher to sell; it got you thinking more. Like when Michael Feinstein came in. The first time they booked him was the same night as the Rat Pack at the Civic Arena. Think about it, the same audience, and nobody knew who Michael Feinstein was, nobody had a clue. So tickets weren't selling that well. One of the things I always loved to do was try to make people have more fun trying to buy tickets. One of the ideas I had was, let's get people to sing for their tickets. People knew [Feinstein] as this Gershwin expert ... So what we did was we had people come to the box office and sing Gershwin for a dollar off.

That was the other funny angle to this-what would you do for a buck? Why give them half off? I think a buck's funnier, because it's like, are you that silly, that you're willing to take only a buck to do this?

And the other thought behind this was, as a PR person, how can you do a promotion, not just because you want to sell tickets, but to do it so you get some press on it too. So, the idea was, if you get people to sing Gershwin, people might buy tickets, but we can also get some media attention. When you have a small budget in the nonprofit world, you've got to think of anything possible to get the word out.

I remember Lynn Cullen did this really funny story. She wore a sandwich board up on Forbes and Murray, and it said, "Sing Gershwin to me." It was very fun. The box office thought I was the biggest idiot in the world, but ... it became this tradition. Shows would come in, and it wouldn't be just about doing the media relations about the performer that's coming in, setting up the interviews and doing that kind of stuff. It was also coming up with some kind of promotion.

We did one with the Clancy Brothers once, this Irish band that was coming in to perform for St. Patrick's Day. Tickets weren't selling very well, so I decided to give away a trip for two to Dublin. But it wasn't Dublin, Ireland, it was Dublin, Ohio. That was funnier.

We wanted to make it a really silly trip. You didn't want to just take a promotion and do it, you wanted to take a promotion that was going to get you some press, which means you take it as far as you can go without looking really stupid. So it would be really tongue in cheek. You'll see a lot of that moved into the things we've done at the zoo.

You had to find your way there, that was the other thing - you had to drive to Dublin. Then [the winner] was also invited to a sausage and pancake breakfast the next morning at a Chevrolet dealership in Dublin, and also to be in the parade with Lucky the Leprechaun. This whole weekend was the silliest. If you really want to party, this was your weekend. That was the first prize.

Let me tell you something. That show sold like that-just to win that damn trip. There were two ways of winning it-either you can buy a ticket, or you have to write a limerick and say why you deserve to win a trip for two to Dublin, Ohio. It was unbelievable. This promotion just kicked butt.

Do you specialize in nonprofits?

Really, we don't. We have some corporate accounts-we actually are doing a little of everything now. We're handling all of CoGo's now, the "Who knew" concept.

We try our best to push the envelope ... in this market it's really important to stand out. There's a limit, too, but you need to stand out. My motto's always been 'do good work, but don't mess anyone over.' People will respect you.

Ever done anything that was over the line?

We did one once, at the zoo. I got a call from Scott Paulson over at WDVE. He had this idea for Valentine's Day and animals doing it. This was two years ago. So we invited 10 couples to come, we did a live remote in the Tropical Rain Forest complex, and they all got a camera, and the first couple that photographed two animals doing it wins $500.

It went over the line a little bit. It worked very well for us, actually. But I know that my boss over there was thinking that might be a little bit too much, for a family place.

What made it over the line, your boss being unhappy with it?

I just think that it was so different for the zoo that it might have been a bit too much. The consequences were that it worked very well, but it was the one promotion that we'd done that Barbara Baker said we'd never do again.

We've always pushed the envelope. Over at the zoo, we work with Marc Advertising on the creative, and one of the charges I've given those guys is that we have to do creative that stands out in the market, and doesn't look local, that people look forward to seeing.

The clam was the first for the zoo, the beginning of the whole thing. He was our 'clam' to fame. When I first started in April 1994, they brought me in as the first PR and marketing director the zoo had ever had. One of the things [Zoo Director] Barbara Baker told me was that we needed to get the awareness out quickly.

The image of the zoo was really awful. The thought behind it was, what can we do very quickly to change the image that the zoo is a smelly, caged-up place to go? I thought, let's focus on an animal that no one's ever heard of. We had lions, we had tigers and bears, we know that; we're a zoo. We had this list of animals you can adopt at the zoo, and the last animal at the bottom you can adopt for 15 bucks is the Quahog Clam.

There was a little bit of internal strife on this one, because it was so different. You know, why weren't you talking about my elephant? We started working up this idea of signage throughout the zoo, to make it more fun. Let's make it like a game. We got a banner that said when you walked in, "Home of the Quahog Clam," signs that said "500 feet to the clam." And then the payoff in the tank, that the clam is really nothing. The sign said, "What did you expect from a clam, standup comedy?"

But the idea behind this clam thing, we tied it into everything we did that year. We tagged our press releases to say, "Home of the Quahog Clam." And then the media started really talking more about the zoo. They'd say, "Hey, you're the clam people!"

It was just the right timing for everything. It got people that hadn't been to the zoo in a long time. If they just came to see the stupid clam, that's fine with me. The point was, you had to go almost throughout the entire zoo to get there. People would walk through and say, "I didn't know the zoo was so great." And then, that damn clam. Maybe they didn't like it, but by then, they already saw the zoo.

It sounds like you had to convince people inside the zoo to change some images they had of themselves. How do you change the clients' image of themselves?

You don't hide anything from them. If you really work along as a team on this stuff, they know you're not just doing it for yourself. You're doing it for what's best for the zoo. When they start seeing results it's very easy to get people on your side.

Barbara was more into it than some of the other people at the zoo at the time. Barbara had this great line. She said, "You don't have to like the clam, you just have to respect it."

In the beginning it was tough, because it was so different. I decided to present the campaign in front of the entire staff. Anyone who has any questions, if they're talking about us now, to my face they'll have to say something.

I remember rolling the TV in, and here's this new little guy. I remember rolling the TV in and saying, "I know there's been some rumbling, and you're not really sure what we're trying to do in the PR/Marketing department. This will be a new tradition. I'm going to present my campaign every year to you guys, so you can take a look at it."

So I showed it, and they laughed their heads off. After the meeting, people came up to say how much they appreciated that we did that. I said, you can always come in my office, if you have any ideas, you let us know.

Another thing I tried to do was to give everyone their due, their 15 minutes, and do it quickly. When I first started at [Carnegie Mellon University], people in the departments said to me, "I want you to do this story." They were so used to the PR people not really doing it. I decided to give each one of them their hit, real early. People would come up to me after that and say, "Do you think this is a story?" They weren't forcing you into it; they were asking your opinion. It became more of a 'let's work together on this thing.' Same thing with the zoo. Show them that you know what you're doing up front, then people come to you and go, "I have an idea." It's a whole different feeling than saying 'you better do this or that.' It makes life much easier for the department, too.

Monday, 22 July 2002 10:02

Risk taker

Andy Russell, who sports two Super Bowl rings from his stint as a center linebacker for the legendary Pittsburgh Steelers of the 1960s and 1970s, has a long track record in business, a career he started in the off seasons as a partner in Russell, Rea and Zapalla.

For the past decade, Russell has teamed with partner Don Rea and managing director Jeff Kendall to access capital for their own growth and acquisition projects. The trio's merchant bank company, Laurel Mountain Partners, continues to foster a growing string of success stories every year.

Russell points to Liberty Waste Services, a landfill and solid waste company he, Rea and Kendall took from a single landfill with $3 million in revenue in 1996, to 28 acquisitions later, more than $50 million in revenue and more than $12.5 million in free cash flow.

Russell, in typical self-effacing manner, attributes Laurel's achievements to good luck and a good choice of compatible partners. He describes Rea's role as that of idea man, Kendall's as executor of good ideas, and his own, perhaps ironically, as that of a cheerleader. Time and time again, Russell's eternally optimistic philosophies of "if at first you don't succeed, try 600 more times," and "of course we can do it," emerge from his own tales of triumph through perseverance.

Kendall and Rea concur that informed innocence and not knowing it can't be done have played a part in Russell's success.

"I would say that if we knew going in to each of the deals that we've done-what the problems were that were going to come up, we may not have done any," Rea says. "But once we were into it, we had to solve them. So we solved them and survived."

Recently, Russell published his memoirs, a tale packed with football and business war stories. "A Steeler Odyssey" tells how his credo, "Get the bat off your shoulder," took him around the globe and to the top of the business world. In this SBN interview, Russell talks about his book and what it took to make that successful leap from football to business.

In your book, you describe how you and your partner at the time, Sam Zacharias, turned tours around the world to talk about football into business trips-more like business odysseys. Most people wouldn't have thought to turn a sports-oriented tour of Japan into a business trip.

Don't misunderstand; those were a lot of fun. I love those clinics for children and giving speeches and telling humorous stories to audiences. They seemed to enjoy those stories regardless of what their ethnic background was. But in the daytime, during the hours away from that, I was able to make presentations to investors, and that was ultimately a very successful strategy.

Sam Zacharias and I were simplistic thinkers. We thought, "Well, we're in investor products, there are moneyed investors all over the world, and why not?" The first trip, we went to the Middle East, Saudi Arabia. At that time, they were making a million dollars a day, the government [in oil production].

First of all, I did have an interest in seeing the world, for the pure joy of understanding other cultures and seeing other places. But for me, to take that kind of time without working-it might take us a month to go around the world, and we did five [trips in five] years. The shortest trip was two weeks. So for me to take that much time, I had to justify it in my mind, see if I could develop the business and expand a little. We made thousands, literally thousands of presentations, to everything from private Swiss banks to Saudi sheiks out in the desert sitting on oriental carpets drinking goat's milk and goat's blood, to Indian caste members of the Zoroaster religion, to Japanese industrialists like Sony-it was very exciting.

How did you find the right people to talk to?

We approached some of the corporations in Pittsburgh which had businesses in these countries and asked for referrals. We had no contacts. We started exactly at zero.

I think you just have to do it. You can be scared to death, but just do it. Nike's right. Get the bat off your shoulder and do it-I'm a big believer in that. Everybody worries. I had people telling me my whole life, "You can't do that! Who do you think you are?" You know, you can do things. I've always had partners who think really big. I think sports does help one in the sense that you are used to rejection. In this case, you're used to defeat, and you know about coming back, never giving up, all those trite things-but they work in business.

How many times did you get rejected in that first year?

Hundreds, hundreds of people said no. Only a few said yes. The first trip, I was telling dumb football stories-I thought I was there to make a presentation about tax-sheltered investments to these American employees of RAMCO, and Gulf Oil had told me, "Andy, take the Super Bowl highlight films." I said, "What for? I'm not going there to spread NFL goodwill." They said, "Don't be stupid." So I took them.

But I knew we were in good shape when, the first year, we made a presentation in the RAMCO headquarters in Dhahran, the oil-producing entity in Saudi Arabia. I gave a presentation to almost entirely Saudis, all sitting in their white robes and headdresses. There must have been a couple hundred of them, and afterwards, one of the officials of RAMCO asked me if I would come back the next year and do this again.

I said, frankly, "I couldn't afford to do that, that I'm a businessman. I'm here trying to sell my investment products." He said, "You Americans are so impatient. You need to learn patience. We need to get to know you, become friends first, and trust. Why don't you come next year, and...could you teach our children how to run and jump?" I said, "I think I could do that." He said, "We'll send our plane for you." I said "You'll send a RAMCO plane to Pittsburgh and pick us up?" He said, "Absolutely." That was a light bulb going off.

We ended up with our first deal overseas. We built a warehouse which was a tennis bubble for RAMCO. They used it as a warehouse in the desert. That took us months, after we made the initial contact. That was the second trip.

So it took two visits before any deals even got started?

Oh, yeah. We went around five years in a row. Really, the biggest connection we made was the final presentation in the fifth year, to a Swiss investor. I wrote that in the book, called the Sauna.

Having gone around the world five years in a row, making presentations in every city, Tokyo, Osaka, Hong Kong, Bangkok, Singapore, Bombay, Jedda, Dhahran, London and Frankfurt, and finally, after literally hundreds of presentations, and literally hundreds of rejections, we found an investor that ultimately proceeded to do a lot of business with us, millions of dollars worth of business. So there was a lot of perseverance in that. A lot of people thought we were foolish-if we had had a financial adviser, he probably would have said, "Stay home and take care of business right here-you don't need to be flying around the world."

Do you still do business with any of those people?

Yes, we still see those people, and we're still doing international business. In fact, I'm leaving tomorrow for Amsterdam to negotiate the acquisition of two cable television systems.

What was one of the craziest things you've done about which others have told you it's never, ever going to work?

Probably the craziest thing I ever did was finance a movie about Rocky Blier, a documentary, and I paid for a camera crew to go to Green Bay, Wis., follow him around his hometown, and then we played the Green Bay Packers. And Rocky, who was just barely a starter at that time, had this wonderful game. He had like 137 yards rushing; he had the game of his lifetime. And I had this camera crew there. I'm standing there on the sideline thinking, "You're so smart." And it was just perfect. Then NFL Films wouldn't allow us to use it. They had the rights to the films, so we couldn't use that in the movie, and that was a loser. We certainly didn't bat 1,000.

What about a crazy one that turned out to be a winner?

Some of these were just unbelievable. We bought a landfill in Houston, Texas, right underneath the noses of BFI, Sanifill. All the major players were in Houston. I asked Jeff [Kendall], "How can we possibly buy a landfill from under their seats? What are we, the experts? They don't know about this?" I said, "Let's go ask them if they'll go joint venture with us." So we went to BFI and Sanifill and told them about it. They said, "Why don't you sell it to us? We'll double your money." We said, "No, that's not what it's worth, but we'll take this much." They said, "Forget it. You guys will never get this done. It's got too many problems, politics." They just didn't believe we could get it done.

So we did. We spent the money and time to go through all the legal, and get the permitting, and host community agreement, and all that kind of stuff, get some lawsuits settled, and we were about to open it, had X amount of dollars in it, and Sanifill came in and said, a week later, "We'll pay you two times X." I said, "We offered it to you three months ago for half that price." And they said, "But we gotta have it." So it's just beyond belief. We sold it.

That sounds too easy.

Well, all of it's not easy. Because the problems... like, we bought a hauler in Chicago from an old Dutchman who had been there for 55, 60 years. And Waste Management had been trying to buy him for 40 of those years, never could buy him. And Jeff Kendall bought that company. He said it was easy.

Well, he called the owner every day for a year. Talked to him every day for a year. He became like a son. I mean, the guy loved him. That's what it took to get that deal done. He thinks that's easy. I said, "People don't do that, Jeff. They get worn out."

On one hand, you want to do deals that are not completely off the wall, but on the other hand, it seems like you're doing deals that big people say are crazy. Why?

I could give you a list of deals that I didn't do that I should have done. I've turned down deals that have turned out to be huge. I meant to put a list down some time, everything from a steel manufacturing company that ended up being one of KKR's first deals, Kolberg, Kravitz and Roberts-one of the biggest leveraged buyout groups in America. Back when we were starting out, I got offered one of their deals, turned them down, and they did it-and made huge bucks, everything from that to being asked to raise money to search for a ship that sunk off the coast of North Carolina back in the 1800s with gold bullion on it, a treasure hunt.

I said, "What are you, crazy? I'm going to get involved in a treasure hunt?" And I showed it to one investor, a friend in South Africa, and he said no way, so I said no.

They found the boat, and it's worth zillions. It's called the Central America. I bet I've got 20 stories like that, deals that I just thought were crazy. I'm a serious businessman; I can't do that deal. And yet it turns out to be just unbelievable.

Do you think that being a little more risk-averse is a good place to be now, or if not, how are you going to stay fresh?

That's a good question. I think there is a certain degree of cynicism that gets into large companies. They go ahead and become bureaucratic and become less and less of a risk taker, whereas a younger person or a newer person into the arena might be less cynical and more hopeful, and more optimistic, and maybe more na?ve. But sometimes, guess what happens? By getting the bat off your shoulder and just trying, it turns out to be successful. Your point's well taken; maybe as Don and I get older, maybe we'll get a little more cautious.

My guess is we're not afraid of risk, never have been, and we will do our homework. If the risk-reward ratio is in balance, we'll do it. It's a corny thing to say, but that's probably what it'll come down to.

Maggie Bennett is a Pittsburgh-based freelance writer.

One big mystery of this technology-driven world is how some telephone companies cannot produce an invoice the average person can interpret. Your business could be losing money and you may not even know it.

When one Columbus-based company with an annual phone bill of more than $10 million had an audit performed, executives discovered they'd been overbilled $1.5 million on an annual basis. If your business adds or deletes services on a regular basis, it's a safe bet that your telephone bill is wrong.

Even smaller companies with 10 to 20 lines regularly find major errors on their invoices. But don't despair.

Here are some ways to safeguard against being billed incorrectly.

The consultative approach

Some consultants specialize in interpreting telephone bills. Payment for these services is either a fixed fee or a percentage of the savings determined from the annual telephone bill.

It's a good idea to shop around and compare companies and pricing. When your bill is evaluated, the final report should separate out the fixed costs reflected on your bill, the variable costs and the one-time costs. The fixed costs become a monthly benchmark by which to compare your bills. Variable costs can also be reviewed each month to ensure they are reasonable.

If overbilling is confirmed, contact the telephone company and request a credit.

Help from the competition

A free way to verify the accuracy of your phone bill is to get a quote for services from a competitive local exchange carrier (CLEC). A CLEC offers many of the same products and services as a larger telephone company, but often at a more competitive price.

My company, Adelphia Business Solutions, is a CLEC. With a letter of authorization signed by you, a CLEC can access customer service records from your phone company, review the bill, identify which services you have and provide you with a quote. During this process, the CLEC should identify any errors in billing or service.

If you switch service providers, make sure the representative thoroughly explains each item on the first bill. Some providers even deliver the first bill in person and answer your questions face to face.

Do the math

On invoices that include long distance charges, verify that the actual cost per minute billed matches what was quoted. To do this, take the total number of minutes for the billing period and divide them into the total costs, before taxes and other fixed costs are added.

Some companies have a service charge or monthly cost per line for long distance, which should be factored in to determine the true cost per minute. You may be surprised to discover your fixed per-minute charge for long distance is twice what you think it is.

One Central Ohio company thought it was being charged seven cents per minute, when in reality it was being charged more than 25 cents per minute because of the limited number of calls placed.

Telephone bills may never be easy to interpret, but it's important to understand which services you have and the charges billed to you. With this understanding, your business can potentially save a lot of money.

And always keep documentation, in case of future discrepancies. Duane C. Bennett (duane.bennett@adelphiacom.com) is general manager of Adelphia Business Solutions' Central Ohio office. Bennett previously held senior management positions with LCI, now known as QWEST, and CoreComm Ltd.