Pittsburgh (2550)

Friday, 28 June 2002 07:47

Going global

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Expanding your company's boundaries by going global is easier than ever thanks to the Internet. But before you set up shop outside our borders, do your tax homework.

"You definitely want to optimize the value of your investment in other countries," says Joe Bernot, international tax partner with Deloitte & Touche. "Taxes paid in foreign countries may reduce your U.S. tax liability, depending on the situation. If foreign taxes you pay are not creditable, you may be subject to double taxation, which erodes the return on your investment."

And pay attention to potential benefits obtained through tax treaties the United States has made with other nations.

"There are 40 to 50 treaties that can help minimize the tax burden," says Bernot.

Bernot cites the example of an individual or company that makes a loan to a company in the United Kingdom.

"The general rule there is that the interest on the loan is subject to U.K. withholding tax," says Bernot. "The treaty between the U.S. and the United Kingdom reduces that tax to zero."

Companies must also pay attention to where the profit from their activities is earned,.

"Let's say you set up a wholly owned subsidiary in Canada," he says. "The product is manufactured in the U.S. and sent to Canada for distribution. The price you charge the Canadian subsidiary determines how the profit is split between the U.S. and Canada, and determines which country gets the tax revenue."

According to Bernot, where the profit is taxed is important because Canadian taxes are generally higher than U.S. taxes.

Confused? Global tax considerations can be intricate and confusing, which is why Bernot recommends companies consult with an international tax professional prior to setting up business outside the United States.

"If a company ends up with a bad tax structure, it can be costly to unwind and clear up," he says. "If the company does its homework up front, it should be in a good position going forward." How to reach: Deloitte &

Touche, (614) 221-1000

Friday, 28 June 2002 06:55

Follow the leader

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Good leadership is hard to come by. Every day, you hear about company executives who have committed fraud or are just bad leaders. They didn't live up to the responsibilities of good leadership, and our trust in them was violated.

When was the last time you asked your employees if they trust you? People take their employees for granted, and that's a big mistake.

I see six ways to build better trust between you and your employees that will make you a better leader

1. Communicate. It's better to overcommunicate than not communicate at all. This can be done through daily, weekly or monthly e-mails, newsletters or managers' meetings.

2. Take a genuine interest in your employees' financial situation. If an employee is having financial problems and you are in a position to help, why not extend an interest-free loan that can be deducted out of future paychecks? It costs little, and the gesture will go a long way.

3. Take a genuine interest in your employees' personal situation. Flextime is a great way to allow employees to deal with childcare, eldercare or sickness in the family. Employees appreciate flexibility.

4. Give recognition when deserved. Surveys show employees crave recognition as much as or more than money. Show them you appreciate their efforts.

5. Show a clear direction for the company. People need to be able to see the future of the company, as well as their own future. It's important to share goals and objectives that pave the way to success.

6. Share key performance measures of how you run the company. Everyone should know what variables are used when making decisions. For instance, one variable could be return on investment and the timeframe in which you expect to get that return.

Leadership is not to be taken lightly. The more you care about your people's needs, the greater the chance that you will be the person leading them. Even when you think your employees are wrong, if you listen carefully, they're probably telling you something about your business that needs correcting.

In the current economic climate, you can't afford to ignore them.

Friday, 31 May 2002 13:10

Net casting

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Need to communicate a message to many people spread across the country? Webcasting might be the answer.

Webcasting can either be interactive or just a TV-like broadcast if two-way communication isn't important.

"Webcasting will almost assuredly save you money on your communications budget," says Ray Harris, president and CEO of The Webcast Group, a Cleveland-based Webcasting firm. "It allows you to deliver a message to a geographically diverse audience."

Typical uses include new product launch, press conferences for a select group of editors, product announcements to distributors, sales staff presentations and internal announcements to employees.

"Another good use is for a presentation at a seminar, conference or roadshow," says Harris. "If you augment these events with a single live Webcast, you have something that hit a live audience, but also can be archived on your Web site and can work for you 24 hours a day."

One of the most common areas where you'll find Webcasting is at stockholder meetings for public corporations. These allow investors from across the globe to hear and see firsthand company officials present their results.

"Webcasting does not replace getting out and meeting people face-to-face and shaking their hands," says Harris. "It augments it. All communication efforts can be enhanced with an interactive Webcast."

The cost of a single Webcast is cheaper than a cross-country business trip. A typical one-hour live event costs between $2,000 and $5,000, depending on the size of the audience, but for an archived 15-minute on-demand message, the cost drops to as low as $500.

"You can make the Webcast a private viewing for your salespeople by issuing a password," says Harris.

When users click on the Webcast link, a customized pop-up player launches to play the messages. The player is designed to look like the rest of the site, but The Webcast Group hosts the actual message.

Polling questions can be inserted into the video to get instant feedback from customers, employees or suppliers so you can refine your message or services.

Says Harris: "Webcasting allows you to not only inform your audience, but also engage them and gather data simultaneously." How to reach: The Webcast Group, www.webcastgroup.com

Friday, 31 May 2002 13:04

A sweeping change

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What do vacuum cleaners and home delivery services have in common? More than you might think.

Oreck Corp., best known for its vacuum cleaners and its founder-pitchman David Oreck, has built a strong brand in a consumer segment that has no shortage of well-recognized brands.

David Oreck was in town recently to talk about branding at the Institute for Entrepreneurial Excellence at Pitt's Katz Graduate School of Business. Oreck's company does business in a somewhat unusual way. It will sell you a vacuum cleaner or other appliance by mail, through its Web site or at one of its independent dealers, but you won't find its products at a Kmart or a WalMart or anywhere else, for that matter.

Oreck has shunned selling through the mass merchandisers that end up dictating terms because they wield so much power. They squeeze the manufacturers and shortchange the consumer on quality and choice, says Oreck.

Oreck is on to something, I believe. There will always be the consumer who is willing to spend more to get a better product, better service and perhaps some convenience.

Bob Plummer owns a company called Hours To You, a home delivery service based in New Castle that has the substantial portion of its operations in Allegheny County. Plummer was struggling a bit to get the business going, but it wasn't because of a lack of demand for the service. Once he identified who his target customer was through some sophisticated research tools, his client list and his sales soared.

With services like Hours To You, customers must pay a bit of a premium for the convenience of having groceries and other household products delivered to their doorstep. Nonetheless, Plummer has found that some are willing to pay for convenience, and a savings in their time and energy.

The big retailers aren't about to go out of business or quit squeezing every penny they can manage out of suppliers. But as companies like Oreck and Hours To You figure out ways to more economically deliver their products and services, narrow the price gap and build brand equity without sacrificing quality, they'll capitalize on their competitors' weaknesses.

And maybe clean up in the process.

Friday, 31 May 2002 12:55

Biznotes

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ARCHITECTURE/CONSTRUCTION

Burns & Scalo Roofing Co. has secured the roofing contract for Kaufmann's at South Hills Village.

PWCampbell was awarded the design/build contract by Mentor Schools Credit Union in Mentor, Ohio. The company was also awarded a design/build contract by the Peoples National Bank in New Lexington, Ohio.

Repal Construction Co. has secured the contract for renovations of the Housing Plus II Program Building in Braddock. It also received the contract for interior renovations for the Panera Bread Store at the Waterdam Plaza in McMurray.

Castcon Stone Inc., a manufacturer of precast concrete stairs and other architectural products, broke ground for a 47,000-square-foot building in Saxonburg.

Dick Corp. has been selected by GlaxoSmithKline Consumer Health Care to be the designer/builder to complete construction of its new headquarters, Millennium Center One in Moon Township.

HEALTH CARE

SeniorBridge Family Inc., a New York City-based provider of eldercare services in New York, New Jersey, Florida and Massachusetts, acquired Sterling Care Counseling, a Pittsburgh-based provider of eldercare services.

LAW

Singleton-English Law Offices has moved to the St. Clair Building, across from South Hills Village.

RETAIL

AT&T Wireless opened in a new location in Century III Mall, West Mifflin. It formerly occupied a kiosk within the mall.

Model Cleaners opened a store in Greensburg in the Eastgate Shopping Center.

SERVICES

Hadad Services is offering a cleaning service for private homes where neglect has resulted in hazardous living conditions or those that have been condemned by the Allegheny County Health Department.

TECHNOLOGY

Red Square Systems secured several contracts, including Iron & Glass Bank, Manchester Bidwell Corp., New Kensington Library, Wagner Insurance, TimeSys, Strategic Technologies, American Made LLC, Fibchem Industries, Pullman Financial and United Cerebral Palsy.

Straightline Source, a division of United States Steel Corp., expanded its electronic procurement and online steel distribution service to steel buyers in Pittsburgh.

AMTECH Computer Systems opened its U.S. support operations in the Airport Office Park in Coraopolis. The U.K.-based company develops software for low voltage design, test and inspection, and high voltage circuit and design analysis.

Medrad Inc. signed a two-year agreement with W.L. Gore & Associates Inc. to be the exclusive worldwide distributor of the cardiovascular array surface coil, the first magnetic resonance coil to combine a dedicated cardiac coil and a dedicated abdominal coil in a single device.

Respironics Inc. completed its acquisition of Novametrix Medical Systems, a leading cardiorespiratory monitoring company. The transaction is valued at approximately $502 million.

TRANSPORTATION

Pitt Ohio Express introduced an enhancement of its document retrieval function that allows customers to retrieve documents up to 365 days from the date of pickup.

ADVERTISING/PUBLIC RELATIONS

CommuniTech landed an account with Systems Imaging Inc., a provider of document scanning and imaging products and services.

Manges Marketing Services Inc. has added Federated Investors Inc. and Fidelity Bank to its client roster.

Allerton Marketing Communications Inc. has assisted Ocean Spray Cranberries Inc. in the introduction of Ocean Spray Sweetie Grapefruit Juice Drink by producing sales materials for use by the Ocean Spray sales broker network.

Friday, 31 May 2002 12:11

How much is enough?

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Do you find yourself always wanting more? Sales are great one month and poor another. Cash flow is hit and miss. Some employees have great attitudes and others don't. Some days you just want to give up. Many of us live in an idealistic world with the perfect idea of what we would like life to be about, but we need to be more realistic.

Maybe what we really need is a good case of an attitude readjustment. I know it's easy to look to the left and to the right and see something that appears to be so much better than what we have. Each one of us has a certain lot in life and it is important to make the best of it. The first thing that happens when we look to one side or the other to see what we don't have is we forget what we do have. Discontentment sets in and we become ungrateful.

Eventually this leads to a bad attitude.

How should we view the discontentment that appears from time to time? As an enemy, and try to avoid it, or as a friend we can learn from?

I see four ways to move closer to a better attitude.

1. Appreciate what you have before you lose it. You or your business may not be where you want to be, but it is important to appreciate what you have or it could be taken from you. Don't look at what you could have, but rather appreciate what you have accomplished.

2. Appreciate what you don't have before you get it. Everything isn't always as good as it seems. Don't wish something upon yourself that appears to be good, but turns out to hurt you. Difficult economic times can lead to poor decision-making as companies take high risks to try to turn bigger profits.

3. Lead by example. A great attitude is contagious and people want to be around it. If you see how much differently you can view life with the right attitude, you'll never have a bad attitude again.

4. Learn from your mistakes. A bad attitude can only be your friend if you learn from it. Change your tone and watch how much better people respond to you. Communication and morale will improve as your attitude changes.

The true test of a person's character is not when things are going well, but how that person handles challenges. The people with winning attitudes are the ones I want on my team. Those with bad attitudes always get thrown off the team in the end because no one wants to play with them.

Tuesday, 30 April 2002 08:41

In the bag

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Jim D'Ottavio wanted to bring technology into his company, but he also to keep out the complexity that it can bring with it.

South Side-based Rynn's Luggage Corp. operates retail stores and repair facilities in Pittsburgh, Baltimore and Dallas, and has contracts with the major airlines for repair and replacement of damaged luggage. The 75-employee company is also an authorized vendor for warranty work for luggage manufacturers.

D'Ottavio, vice president of Rynn's Luggage, figured a technology fix could streamline the customer service side of his business, allowing customers to track their orders electronically to find out when to expect repair work to be completed. Using a Web-based solution, he concluded, could provide 24/7 access for customers while reducing the call load to customer service reps and 800-line costs.

But D'Ottavio realized the Internet might provide additional opportunities for Rynn's Luggage. He wanted to expand its sales to consumers online, offer buying groups such as airlines discount prices for members or employees as a benefit, and operate a business-to-business site for the airlines to purchase replacement products.

And while he wanted to add distribution channels and smooth the customer service operation, he didn't want to add a lot of infrastructure to manage the process.

"What we were looking to do is take advantage of the technology on the Internet," says D'Ottavio.

Enter Blue Archer, a Shadyside company that builds customized Web-based solutions, mostly for manufacturing and distribution applications.

Robert Faletti, a principal in Blue Archer, says his company provided a consumer-accessible e-commerce site, a system that allows customers to track repair jobs, specialty portals for the airlines and employee and corporate buying groups, each with unique pricing, all with a central product database and controlled by one backend site manager at Rynn's.

None of the hardware or software is internal to Rynn's, and Web hosting is handled by a third party.

Airline customers, D'Ottavio figured, are fairly sophisticated as a group and not tech-shy, and the airlines themselves are comfortable using information technology. D'Ottavio, says Faletti, looked at a technology solution in the context of a true understanding of his business and his customers and how a solution could best be applied to his company's needs.

That's not always the case, Faletti has found.

Says Faletti.: "A lot of companies jump in before they work out the strategy for using the technology." How to reach: Rynn's Luggage, www.netbags.com; Blue Archer, www.bluearcher.com

Tuesday, 30 April 2002 08:28

Financial Services Advocate

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Patrick Nagle has been a central figure in the Blair County small business community for more than six years.

Now vice president for Central Bank, a division of First Commonwealth Bank, he began his career there as a collection manager and earned rapid promotions. For the past 11 years, he has been a commercial lender.

In 1994, he became Central Bank's small business manager; the next year, he was appointed SBA lender. He then earned designation as a certified lender under the SBA CLP Program, and was named Lead SBA Lender for the First Commonwealth Financial Corp. He also has earned the designation of Preferred Lender under the SBA PLP Program.

In 1997, he received the Financial Services Advocate Award by the St. Francis College Small Business Development Center, and was given the first SBA Champion Award.

Nagle attended Juniata College and Pennsylvania State University. He began his career in finance with Capital Finance, then spent four years with General Motors Acceptance Corp. and five years with Mellon Bank.

He is a member of the Western Pennsylvania Association of SBA Guaranteed Lenders and the Blair County Chamber of Commerce Board of Directors, and chairperson of the Blair County Chamber of Commerce Small Business Advocates. He is chairperson of the CARE Program for Central Bank and on the board of the Southern Alleghenies Planning and Development Commission.

Additionally, he is president of the Southern Alleghenies Commission Development Corporation and a member of the Altoona Incubator Advisory Council.

William McCloskey

Tuesday, 30 April 2002 08:14

Entrepreneurial success

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Jeffrey Druzak's tenacity and perseverance, combined with dedicated employees and the consistent growth of his business, are all reasons he's been named the 2002 SBA Regional Entrepreneurial Success winner.

Druzak says Druzak Medical Inc. has a family-type atmosphere, and proudly recalls an employee who introduced the $18 million annual revenue company to a potential customer as "Team Druzak."

"That's why we're successful." he says, "The nomination could also be attributed to our ability to overcome numerous obstacles."

Druzak has overcome several obstacles since Druzak Medical opened for business in 1990, including a three-and-half-year development process for the company's fast and efficient Treetop Shopper, a Web-based, split-screen ordering system for physicians and nursing homes.

"I ended up starting and scrapping at least two other versions of the project before I finally came up with a design that worked. (It took) at least six different computer programmers. After the fifth programmer left for Chicago, I decided to build our own MIS department (and hire) our own programmer," he says.

Personal loss has challenged Druzak as well. In 1992, one of his two partners, Janet Charland, the company's business and accounting manager,lost her fight with cancer. Then Druzak's son, Benjamin Jared, died at age 6 in 1995 from bacterial meningitis. Far from giving up, he continued growing his successful business and adopted three children from Poland in 1996.

"I consider ourselves an organic-style company. We also have the philosophy of developing long-term business relationships based upon trust and a mutual respect for one another," says Druzak.

Amanda Lynch