Although savings opportunities are limited, consultants say business owners should pay close attention when it comes to picking a power supplier. Business owners should:
Do competitive shopping. Talk to more than one company t here are differences among suppliers rates. Compare them but make sure you look at other costs, such as penalties for switching to another supplier. Some contracts will vary according to your usage and rates may vary during the day. Look for a clearly stated cost per kilowatt hour.
Dont enter a contract that will be costly or difficult to get out of. Tom Gibson of the Gibson Consulting Group says its worth taking the time to meet with the supplier. Go over the details of the agreement. Use a lawyer if it is a complex agreement.
Be aware of the consequences of not choosing. If you dont choose, you will be assigned to a default supplier. Youll still be able to change suppliers in the future, however, and you dont have to worry that youll be stuck without power. If your supplier goes belly up, your local distribution company will have to supply you with electricity. Sources: Gibson Consulting Group; Energy Savers; SMC Business Councils
The Allegheny County executive will be elected to a four-year term at a salary of $90,000 a year. The positions duties are as follows:
Enforces all county ordinances;
Represents the county in meetings with other elected officials and development organizations;
Approves or rejects county ordinances;
Is accountable for all departments except those under jurisdiction of another officer;
Prepares and submits fiscal plans;
Appoints the county manager (with consent of council);
Makes appointments to county authorities and agencies;
Negotiates and signs contracts;
Calls special meetings of council;
Makes an annual report to council and other reports as council may request. Source: League of Women Voters of Greater Pittsburgh
This former senior vice president and associate director of Ketchum Public Relations in Pittsburgh has jumped head-first into marketing his own mystery novel. The novel, called The Deceivers, was published this past September by Creative Arts Book Co., of Berkeley, Calif.
The book is one of three in a series he wrote about a branch of magic called mentalism. Like the books main character, Aiello says he too has had a lifelong interest in mentalism and has been a member of the International Brotherhood of Magicians for 18 years. All three novels, set in Pittsburgh, are said to reveal one or more methods used by phony psychics.
But at this point, mentalism wont get him greater sales. Thats where his years as a P.R. executive come in handy.
Writing suspense novels might be my greatest challenge ever, he says. Im drawing on my PR experience by marketing myself to promote the book. Now I have to practice what Ive preached to clients all those years.
And then he has to sell some books.
Think your business plan is pretty good? Heres a way to find out, learn something and maybe win some serious money, as much as $50,000 if your plan passes muster.
But the moneys not all that EnterPrize, a business plan competition, offers area entrepreneurs. Organizers say participants will get the benefit of advice and coaching from successful business people, as well as valuable exposure to funding sources that may help them get their ventures off the ground or onto the fast-growth track.
The competition promises to generate viable business ideas, increase access to capital and grow the regions entrepreneurial leaders by identifying and encouraging investment in new businesses, says Sean McDonald, chairman of the Pittsburgh Technology Council, an EnterPrize sponsor.
EnterPrize was created through the partnership of local universities, businesses and development organizations. The goal is to invigorate Pittsburghs economy by bringing together ideas, capital, talent and business expertise to create growth companies. All told, $145,000 in prize money will go to entrepreneurs who assemble the best plans.
The competition, which runs from October until April, is spearheaded by Carnegie Mellon and Duquesne universities, the University of Pittsburgh, Innovation Works, McKesson HBOC Automated Healthcare, McKinsey & Co. and the Pittsburgh Technology Council. Participants plan to make the competition, which is similar to others sponsored by McKinsey & Co. in other cities, an annual event.
Events in other cities have been responsible for helping start-up ventures get off the ground and grab the attention of investors, even for companies that dont win money prizes.
Organizers of EnterPrize expect that as many as 20 companies will receive venture capital or angel funding as a result of the competition. The trend in in successive years in competitions sponsored by McKinsey in other cities is that the mix among participants tends to shift from students to professionals.
The competition is intended to spur the creation and development of growth companies, defined as companies that aspire to generate revenue in the tens of millions of dollars in a short time frame. Existing companies may also enter, provided they are incorporated within the 13 counties specified, have annual revenue of $1 million or less, employ fewer than 20 people and have raised less than $500,000 in capital.
While the competition is not limited to technology businesses, the sponsors expect that most growth companies will come out of the technology sector. A gas station, the sponsors explain, is not a growth company, but if you have an innovative plan to open alternative fuel supply stations across Southwestern Pennsylvania, you may be a good candidate.
EnterPrize is advertising to get the word out, and sending brochures to university alumni and trade organizations. Speakers are being dispatched to schools and entrepreneurial groups at local colleges and universities.
The competition will be staged in three phases and structured as a learning process, complete with seminars, workshops and networking events. The phases will guide participants through the business planning process by requiring them to complete a detailed outline of the plan in the first phase, a draft business plan in the second and a refined plan in the third phase.
Prizes will be awarded at each level, and all companies that decide to continue through the entire process may do so.
We have found that the competition process serves to educate participants and stimulate new business activity, regardless of who wins the contest, says Christopher Leech, a partner at McKinsey.
Ray Marano (email@example.com) is associate editor at SBN.
If there are any doubts that entrepreneurial education is a growth industry, they might be dispelled by the University of Pittsburgh Katz Graduate School of Business Small Business Development Center and its experience with the demand on its management training services.
During the first six months of this year, the SBDC reports that it trained 1,174 people at 18 seminars, workshops and conferences. That compares to 667 trained during the same period last year an increase of 43 percent. The SBDC also provided 3,679 hours of management consulting to 586 entrepreneurs. Nearly 1,200 phone calls were fielded by the SBDC during the first half of the year.
Other highlights of the Katz SBDCs performance in entrepreneurial assistance this year include:
- A significant increase in start-up capital and expansion capital secured by SBDC client companies. Businesses landed $5.85 million in the first six months of the year, compared to $4.8 million during the same period in 1998.
- The opening of 37 new businesses by SBDC clients during the same period.
Pitts SBDC offers one-on-one business management consulting services in Allegheny, Washington and Greene counties through offices in Oakland, Harmarville, Wexford, Waynesburg and Washington, Pa. How to reach: The Small Business Development Center at the University of Pittsburgh Katz Graduate School of Business, (412) 648-1544 or www.pitt.edu/~sbdc/.
Hiring family members can qualify family business owners for special tax savings.
Indeed, hiring family is an excellent way to save money on federal income taxes. A spouse who works for a family business but is not covered by a qualified retirement plan can contribute up to $2,000, or 100 percent of earned income, to an IRA. For immediate benefit, the spouses salary can be deducted, which creates an extra $2,000 of tax-free income for the family.
The long-term benefit is that this money will accrue tax-free as long as it remains in the IRA. If you put it into a Roth IRA, its not tax deductible, but it will grow tax-free and distributions will never be taxed.
You also can save on taxes by hiring family members who are minors, since income earned by your minor children is taxed at their rate, usually 15 percent or less. Your business will also get a deduction for their salary.
To stay out of trouble with the IRS, keep detailed records. For the working spouse, records must show the spouse actually did the work for which he or she was paid. For the working children, records must show that they did the work, it was necessary for the business, and if they hadnt done it, the family would have had to hire someone.
The other deduction family business owners can take is the spouses expenses on business trips. Normally you cant deduct such expenses, but if you can prove the spouse is essential to the purpose of the trip, the expenses are an allowable deduction.
Consider these examples of when a spouses presence would be necessary:
1) The owner is traveling to another country and doesnt know the language and customs, but the spouse does.
2) The spouse is the secretary on the trip and is familiar with the technical details.
3) The client has requested the spouses presence.
Business owners also have been allowed this deduction when they showed they had an illness such as diabetes and the spouse was trained as the nurse; they proved the spouse wasnt enthusiastic about the trip; or they proved their spouses had not participated in any type of tourist activity.
If this spousal deduction werent allowed, however, you still could deduct what it would have cost to travel alone. You may not be permitted to deduct the cost of a double-occupancy room, but you could deduct the cost of a single room.
On top of spousal deductions, you can save taxes with a company car. Drive the car until its fully depreciated, then switch it over for personal use without tax liability. The car wont become taxable until its sold.
Overall, when owning a business, youll find it extremely worthwhile for financial reasons to hire family members. Utilization of simple tax strategies can ensure the financial rewards.
Louis P. Stanasolovich is president of Legend Financial Advisors Inc., a fee-only North Hills registered investment advisory firm that provides asset management and comprehensive financial planning services to individuals and businesses. Its Web address is www.legend-financial.com.
The headline on a recent newspaper article said that many people want to sock a co-worker. Coupled with what appears to be an escalation in workplace violence, I admit I wasnt too surprised.
According to the research, one employee in six said that in the past year, they had wanted to punch a co-worker. The numbers were even higher for people under age 35, especially those working in clerical, office and sales positions.
The survey, conducted by the Gallup organization, included 750 workers over the age of 18.
In a similar survey conducted one year ago, 42 percent said they were often at least a little angry at work. This year the number increased to 49 percent nearly half of those polled.
The Marlin Co., which publishes and markets motivational, educational and safety materials, commissioned the study. Said Frank Kenna, the companys president: This is a serious problem for people who manage any of these people. Their ability to recognize and deal with anger and potentially violent behavior is absolutely critical.
I remembered an incident about a year ago at an assembly plant. Someone had scheduled a group of people to meet with me at a time that was apparently too close to the shift change. Only one employee showed up and he was angry. The first words out of his mouth were, You dont want to talk to me, dude. I hate this (expletive deleted) place! Then he added, Sometimes I want to get my gun and blow my (expletive deleted) supervisor away.
I figured that since we were both being paid for the time, I was going to get him to talk. During the entire interview, he never looked at me once, and I remained dude.
But in the next few minutes, he revealed some interesting information. He said his supervisor often cussed him out and treated him like dirt. Just like my old man, he said. He croaked a few years ago. Good riddance.
He used to beat on me all the time when I was a kid, he continued. No matter how I tried, that old (expletive deleted) never gave me any credit for anything. He said I was a waste of good spit!
Thinking it might be a good time to change the subject, I asked what he would like to do if he didnt have to work. His response was quick.
Oh, me and my buddy are gonna take our motorcycles and go out West. Were going live in Arizona, New Mexico. Man, well just ride all day long!
Since I was somewhat familiar with the area, we talked about that part of the country. His anger faded as he talked about some of the places he had seen on his last visit. He became a different person, a person you could easily learn to like.
As he left, he stuck out his hand. Nice talking to you, dude, he said. As he reached the door, he turned slowly and added, You know, this aint such a bad place to work. Ive seen worse.
The research presented in the article pointed out that 64 percent of those surveyed said that at least part of their frustration was because their equipment frequently malfunctioned. These same people expressed dissatisfaction because they felt their co-workers wasted an average of 75 minutes a day on computer games, personal calls and e-mail.
My advice to you, as leaders and managers, is this: Get to know your people. Show them they are important to you and to the organization.
My own research has shown that more than 50 to 60 percent of your people dont need direct supervision if their equipment is functioning properly and they have a steady work flow.
By investing a little of your time getting to know your people and eliminating the root causes of their dissatisfaction, youll make significant improvements in reducing stress and improving performance. At the same time, you will greatly enhance the value of the person.
William Armstrong, a management consultant for nearly 30 years, is president of Armstrong/Associates, a Pittsburgh-based consulting firm. Reach him at (412) 276-7396 or via e-mail at firstname.lastname@example.org.
The notion is tempting. Retire by the time youre 40, share more of your time with your family and still keep your hands in the business world. Sounds like the Silicon Valley Dream.
Mark Juliano wants to live the dream, and hed like to see it become more common in Pittsburgh. The former Fore Systems executive and entrepreneur who led Islip Media, now MediaSite, to a successful raising of $7 million in capital earlier this year decided that hed had enough 16-hour days.
Now hes spending more time with his family, planning to go back to school in January and trying to figure out what the next stage of his life is going to look like.
Retiring at such a tender age may not seem like much of a chore, especially if you possess the financial wherewithal. But as Juliano tells it, mixed emotions surface when one contemplates such a move, not the least of which is fear: Fear of losing your skills, of what others might think, of the unknown, fear of whatever I do next, I wont be good at.
While Juliano may be getting off the corporate track, its clear that he plans to make the years to come as exciting and interesting as his career in high tech has been. He has retired as MediaSites president, although hes not completely withdrawing from the business. He plans to continue to spend some of his time as a board member and adviser to MediaSite.
And he wants to fashion himself as a booster for Pittsburgh business, promoting the region as a fertile valley of entrepreneurial activity and working with other local business people to burnish that image. Heres what he has to say:
Was there a defining moment when you realized that you needed to make this change?
Id say there really was not. But there definitely was one time when I started thinking about this, and that was the day Fore Systems went public, which was five years ago now. I consider that a defining day in the sense that I was never allowed to have this conversation with myself before that day. Financially, theres a good chance I wont have to work again, so what do I really want to do with the rest of my life, if you will?
I decided what I really wanted to do was continue to work. I actually went through the whole scenario of not working and doing what Im doing now and concluded, I guess, I hadnt quite finished what I set out to do from a career standpoint.
Over the last four or five years, Ive achieved what I set out to do on a career point. So I guess those two goals were taken care of, both the career goal and the financial goal, and thats when I pretty much decided it was time.
So you decided early on that you wanted to do this?
I wouldnt say I decided early on that I wanted to do this. What I decided early on was I wanted to seriously consider it. It was now an option that could be taken. Many people at the point of making some kind of financial windfall say, Youre crazy, I would never do anything but what Im doing now. I did not say that to myself. I said, Gee, theres this other possibility. Id like to go down that road.
When I left Fore Systems, one of the things I did, for example, was go to Europe for two months. That was my debriefing time. I didnt know if I wanted to get right back into it. I went through the motions, certainly, thinking about what if I stopped working. What would this mean in terms of my career, what would this mean in terms of what Id do with myself, and decided that it did not make sense.
Would you say you satisfied the career and entrepreneurial goals you set out to achieve?
What I would say is I exceeded my career goals. I never really had the goal of necessarily being the CEO of a small company, but it was obvious that I could do that after my last company (AVIDIA). MediaSite moved from the incubator/pure start-up phase to the growth phase. I feel successful in doing what I started out to do, which was to start a company. I didnt set out to finish a company.
What plan did you make for the transition from busy entrepreneur to retired executive?
Basically, I really see two phases of a plan. I have one right now, but to be honest, this whole deal is about not having a plan. I consider myself now in a transition phase. There is still work to be done at MediaSite. Im coming in half-time or so, maybe a little less as the weeks go on.
On the other side of the transition, which is starting up new things, I didnt have any plans and this kind of proves it: If Id had plans six months or a year ago, I would have just jumped into something new, but I didnt. So now Im really doing a lot more investigation. Ive talked to folks ranging from the heads of departments at the school of drama at CMU to a guy at Point Park College. Ill be attending school pretty much on a full-time basis.
Ive put out feelers for getting involved with a lot of things with my kids. I was just at a Cub Scouts meeting this weekend, something I probably never would have done in the past. People were talking about maybe starting a new den, and I said, Ill lead it. I would never have been able to say that before.
What kinds of economic development activities will you be involved in?
Ive been very involved with two groups. One is called Next Step (a group of CEOs of Pittsburgh-area companies). The other is the Hot Team group. There have been a lot of studies done, but one in particular was done by the Pittsburgh Regional Alliance over the past year with a consulting firm from the Silicon Valley that looked at what it took for cities to become hot in the high-tech and entrepreneurial areas. They studied Pittsburgh, and now were at the implementation phase.
One of the things that they found is that the city is not taking advantage of its own base of high-tech entrepreneurs, any-tech entrepreneurs, for that matter, so they formed this group. We have a series of projects we have recommended. One project that I will be involved within a smaller group is something that doesnt have a name yet. We just call it The Entrepreneurs Club.
It will have a real name pretty soon. Perhaps the easiest way to describe it is an alternative to the Duquesne Club for the year 2000. Its different in the sense that we envision having cybercafes, hookups for your PC, no dress codes, that sort of thing.
Do you think you will be able to resist the entrepreneurial urge?
I just got off the phone with somebody about an hour ago. He asked me if I know of anybody who was interested in a very senior executive job at a regional telecom company thats being formed around here. He said the salary would be somewhere between $200,000 and $400,000, with a huge amount of options. Thats easily the kind of job that I could say yes, Id be interested and probably get, and Im just not interested. Everybody is enticing in the world. You read Time magazine and you find out about all of the dot-com companies, but youve got to look at them and say, Ive been there, done that, Im moving on.
Its definitely not easy. People value people based on their jobs. What you do is about the most common question someone asks you after Whats your name? Thats something at this point in my life Im ready to deal with. Perhaps five years ago at Fore when I thought about it I was not ready for the question. Now, Im confident in the answer.
What do you believe that you have to offer to the entrepreneurial community?
I think certainly one of the main things is Ive been involved in successful ventures, but Ive also lived in Silicon Valley and New York City and worked there. Those are the kinds of places that Pittsburgh aspires to be like or to (adopt some of their) a ttributes. Very few of us in Pittsburgh have actually done that and succeeded out there. I had a venture that I worked at before Fore that was quite successful. I think thats real key, having a link to other places.
One of the major problems in Pittsburgh is in marketing. Whether were good or not doesnt matter if nobody knows about us. The old perception is the real issue. I think my marketing skill is of value to the organizations Im working with. The third thing is, Im the kind of guy that gets stuff done. I dont need a lot of data to make a decision and move. Thats an attribute, I think, that comes with a lot of entrepreneurs. We may not always be right, but were certainly moving somewhere.
Are you surprised by the ventures that have been spun out of Fore Systems?
One is, it didnt surprise me at all to see the success of people who left Fore and started companies. What did surprise me, frankly, is how few companies spun out of Fore Systems. I expected by now at least a dozen companies to have formed from Fore, and there really have been three, maybe four, depending on how you define it.
Why do you think that has been the case?
I think some of the reason is a lot of the senior guys at Fore who did leave got pulled outside of Pittsburgh. Fore continued to do well, so a lot of them just stayed put and got promotions and made more money, so there were opportunities there. When I was [in Silicon Valley], a dozen spin-offs out of a successful company was nothing. Every company that was successful spun that many off.
So maybe, and this is the part Im really guessing, this area isnt exactly one that fosters entrepreneurship in the high-tech arena, at least that was it five years ago. Maybe today it is, and youre starting to see more of these smaller companies getting started from Fore and Transarc and from all of these other companies.
How to Reach: MediaSite at (412) 288-9910 or www.mediasite.net Ray Marano (email@example.com) is associate editor at SBN.
Ray Marano (firstname.lastname@example.org) is associate editor at SBN.
Here we are, not just facing a whole new year, but a whole new century. So what challenges will the new millennium bring? What problems? What opportunities? What lessons from the past can we use to our advantage in the new century?
There was a time early in this century when Congress actually considered closing the Patent Office. Many of the leaders of the time believed that everything that could be invented already had been. After all, didnt we have the wireless and the telephone? And up in Detroit, a guy named Ford was saying that everyone soon would be able to buy a horseless carriage.
One thing is certain, though, at this point: The next century will be different. The advances in technology will continue probably even more rapidly than in the recent past. If the past is any indicator, everything will change. Our markets will change. Our people will change. And all of that will necessitate changes in how we manage our businesses.
So, how do we prepare for all this change? Traditionally we prepare for the new year by making a list of resolutions. The list usually consists of good intentions. We plan to eat healthier foods, exercise more, and in general, make an effort to become better people. Occasionally we actually keep our resolutions, at least for a time.
The secret to improving the quality of life in the coming century begins with you. You are a leader, and you need to be the best you can be in your workplace, in your home and in your community. If you are a good leader, you can improve the quality of life for the people around you. And it will improve exponentially in ever-widening circles. The positive influence you can generate will spread as others become energized.
One of the greatest gifts you, as a leader, can give to the people around you is gift of flexibility. Teach them that change is always with us and that the rate of change is sure to escalate. Going from the horseless carriage to the computer chip will be nothing compared to the change we will face in the coming years.
Some change will be good for us, some will not. Regardless, as a nation, we need the ability to react quickly, to take advantage of the positive changes, and to avoid or eliminate the changes that pose a threat. Our greatest enemy will always be complacency. And fear.
But with complacency and fear comes decline. If we are to remain a vital society, we must continue to respond to change and use change to our advantage.
It begins with one person. As a leader, you are the one who can make the difference. You will be the one who will inspire others to keep the wheels of progress moving forward at an ever-increasing pace. You can inspire people to avoid complacency, and to see the opportunities that lie hidden in every change.
So add one more resolution to your list. As the pages of the calendar turn, resolve to share the gift of flexibility with those around you.
Remember that you represent the Power of One.
William Armstrong, a management consultant for 30 years, is president of Pittsburgh-based management consulting firm Armstrong/Associates. Reach him at (412)276-7396 or by e-mail at email@example.com.