How Rick Bennet and CCA Global Partners overcame a tough housing market to expand the company’s reach in home improvementWritten by Gregory Jones
With more than 2,700 locations and 800 independent retailers, Rick Bennet oversees a cooperative that has significant strength in numbers. In fact, CCA Global Partners Inc. has more purchasing power in its floor covering business than Home Depot.
Founded by two independent retailers in the floor covering business in 1984, Howard Brodsky and Alan Greenberg, CCA Global Partners’ primary business is Carpet One Flooring & Home. CCA is a cooperative of 14 independent brands in the home improvement industry with more than $10 billion in aggregate gross sales and more than 100 consecutive quarters of profitability. Its retail floor covering stores and its non-floor covering businesses each see annual revenue of about $5 billion.
“These people have come together with our management and our infrastructure and are able to bring scale to their business and compete with big box and other large retailers by banding all of their purchases and resources together,” says Bennet, co-CEO at CCA.
Despite that ability to band together, the downturn in the housing market had an impact on CCA and its independent retailers.
“We entered the downturn early and I would suggest that we’re coming back out of it later,” says Bennet, who was formerly president and CEO of Kauffman’s and vice chairman at May Department Stores. “These guys are small independents and so they have been really rocked. The biggest challenge we continue to face is just keeping people up and moving ahead.”
Bennet has had the task of helping his retailers cope with the downturn, push through it and now move forward.
“We are not exclusively floor covering, but it is at the core of our business,” Bennet says. “Many of the things that we have opened up are things like cabinets or lighting, but they are all home improvement, so we are closely tied to the housing business and the economy has been tough out there and housing has been the worst of it.”
Here’s how Bennet and CCA Global Partners Inc. have helped independent retailers through a tough time and as a result, repositioned them for the future.
Face the facts
In a tough economy it is very hard to have to start rationalizing business and look at cutting costs. When times get tough it comes down to basic math, and you can’t spend what you don’t have.
“You do what you’ve got to do,” Bennet says. “The tougher challenge has really been the emotional one. When you go through five or six years of downturn and you’re waiting for things to bounce back, the drag on people’s patience and emotions is really tough and much more problematic than just the cost cutting that had to happen a couple years ago.”
During those years Bennet often found himself on the phone with owners of their business facing such challenges as having to fire a friend or relative.
“I get calls from guys saying, ‘I need your advice. We’re under a cash flow press and I’ve shed all the workers that I can and I’m now down to family and I’m facing firing my brother-in-law. What do I do?’” he says.
At that point, tough business decisions have to be made.
“You have to save the business first, because if the business is saved and things get better then you can re-employ,” he says. “If the business dies, then you’ve got no chance.”
One of the biggest problems CCA deals with is assuring its independent retailers that it’s OK to ask for help.
“If you’re in trouble as a small business, the best thing you can do is ask for help earlier, because then there’s time to do some of the tough decisions and save the business,” he says. “If you wait until your balance sheet is totally upside down and you’re facing bankruptcy there’s very little that can be done.”
The other challenge CCA faced was market attrition. About a third of the independent retailers in CCA’s space have shut down over the last eight years.
“Our store count is down only fractionally,” Bennet says. “Now that the pendulum is starting to swing, people actually get under more cash flow pressure because they’ve got to invest in buying product as the business starts to turn up.”
Today, business is starting to turn around for CCA and its retailers. Some of them, however, are hesitant to invest in the business, to rehire people and spend money on advertising and marketing.
“It’s tough to cross that line because you’re worried about the next customer that’s going to come in the door or when the next downturn is going to be,” he says, “and you’re nervous about launching a new ad or hiring a new person.”
But that’s where CCA’s decades of experience come in. CCA tries to provide incentives, coaching and a sounding board for people who need to make those tough decisions. The message — the time is now to switch to offense.
“Their brain tells them, yes I should, but their heart tells them, I’ve just been beaten up so badly I’m not sure I can make that investment,” he says. “The market has definitely shrunk, but it’s time to start investing in the business and get market share and it’s hard for an independent guy to step across that line.”
Reinvest and branch out
The first step in getting CCA’s independent retailers back on track following the downturn was to have them reinvest in their businesses to take advantage of new opportunities in the market.
“You first start with people whose basic business is in pretty good shape,” Bennet says. “If somebody still hasn’t made the tough decisions, then you’ve got to make the right business adjustments to your expense model before you go making investments.
“If you’re dealing with a small business that has operated with some discipline, made those cuts and their basic business is in good shape, then you have to start investing in people and advertising to move forward. If the business is growing, then it might be time to push them into the next step, which is to open an adjacent business. If they’re even stronger, then you may suggest that they open a branch.”
CCA itself made similar moves to advance its brands over the years. CCA was originally Carpet Co-op of America. The first strategic change for the company was to move from a carpet co-operative to a floor covering business. What was originally the Carpet One business became Carpet One Floor & Home.
Today, CCA is making the next strategic shift, which is to spread out beyond floor covering into all aspects of the home improvement field, as opposed to filling only one part of it.
“We’ve moved into the kitchen and bath business with cabinets,” Bennet says. “We have a lighting business, and we continue to contemplate other additions to that. We’ll try to engage in anything that involves home improvement so we provide synergies and leads to our dealers, as well as synergies with the customer.”
When looking to break into new markets you have to ask yourself, what’s the value that you’re providing? As you answer that question you determine where you can add on.
“For us it’s a service equation,” Bennet says. “We’re in the customer’s home and we’re providing the service. What other products can you add to that? It’s the question of what do you do well and how do you do more of it rather than trying to add stuff that’s irrelevant to your business.”
Even CCA had to learn the hard way that going too far outside your core area is a difficult undertaking. A number of years ago it tried its hand at tuxedo rentals.
“It was out of our space,” he says. “You get out of your sweet spot and you’re operating a little bit more in the blind, and you bring less expertise and value. It taught us to stay close to home.”
It comes back to that core question of, where do you add value and what are you good at. You have to make sure you get honest answers to that question.
“When you go into a new business, make sure you’re leveraging things that might work for you,” he says. “Whenever it came to standing something up that was brand new because you thought it might fit, you have to second guess it. You can dream up things that you might add to any of those business structures, but if it’s outside of the core of what you do, you have to be careful.”
CCA keeps asking the question, ‘What do we do well and how do we add to that?’
“If it’s small business, it has to do with the home and we can provide scale, then it’s an open place for us to work and we’re always looking for those places,” Bennet says.
“The world of housing has gone through a lot of attrition, so as that bounces back we’re in a terrific position to pick up a lot of share, and being able to bolt on these different extensions of what we do is a lot of fun to work on. We feel better today than we have in five or six years.”
How to reach: CCA Global Partners Inc., (800) 466-6984 or www.ccaglobalpartners.com
Don’t be afraid to ask for help in a tough situation.
Make the necessary efforts to save the business.
When good times return, be ready to invest
for the future.
The Bennet File
CCA Global Partners Inc.
What was your first job and what did you take away from it?
I was a short-order cook for a little drive-in restaurant called Carl’s in St. Louis. I started working for Carl himself at 90 cents an hour. It was all about good relations with the customers.
What is the best business advice that you’ve ever received?
I had a mentor once say to me, ‘If it is to be, it is up to me.’ That stuck in my head very strongly, and I really believe in the power of self-determination. I try to impress that in our company. If you’re going to spend time trying to figure out how somebody else screwed it up, you’re not going to get anything done.
The second one is Peter Drucker’s advice, which was managing your strengths. So many people spend all of their time trying to correct their weaknesses. You have to know what you’re good at and what you love to do and leverage that. I try to live by that.
If you could speak with someone from the past or present, with whom would you want to speak with?
If you were going to redo some flooring in your house, what product would you use?
This new product line of New Zealand wool is exceptional. It’s beautiful. I got out ahead of the launch and put some of it into my home, which we just remodeled. The brand name of it is Just Shorn, as in shearing a sheep. I love the distinctiveness of wool and the softness and warmth under your foot. It’s an exciting addition to what we do, and it’s a terrific product.
"There’s been a lot of speculation as to when I’m going to deliver a vision of IBM, and what I’d like to say to all of you is that the last thing IBM needs right now is a vision.”
What business are you in?
Building the answers to the questions above is not a discrete process — the answers are linked. This is the primary reason that just having an expression of your mission, vision and values isn’t enough. Without answers to all these questions, you won’t be able to outrun the competition over the long-term.
Imagine it’s a hot day. You’re thirsty and hungry, but don’t want anything unhealthy. There aren’t many options available to meet all those needs. In the early ’70s, the concept of the smoothie was born out of this unmet need. Opened in 1973, Smoothie King Franchises Inc. was the original smoothie brand.
In 2001, Wan Kim had this same urge to find a healthy option to quench his thirst and satisfy his hunger. He had his first experience with a Smoothie King smoothie while studying at University of California at Irvine. The high quality, healthy product had him hooked immediately.
Kim was so impacted by the product that he became a Smoothie King franchisee in South Korea. Since 2003 he has owned several Smoothie King franchises, and in 2012 when the opportunity came about to own the brand, he jumped at the chance.
“I bought the company in July 2012,” says Kim, Global CEO. “I really love this brand. It’s not because I’m the owner, but because we have great products. There are a lot of changes still happening, but it’s exciting.”
Smoothie King, a 300-employee, more than $230 million organization, is now 40 years old. The brand has more than 700 stores and a presence in the United States, Korea and Singapore. Despite the company’s established age and fairly big size, a new owner and plenty of potential market opportunity leave the brand in growth mode today.
“Our next five-year growth plan is to open 1,000 stores in the U.S. and 500 outside the U.S.,” Kim says. “Last year the company did about 26 franchise openings. This year in the first quarter the company has done 40 to 45 signings.”
Kim’s experience as a franchisee and now a franchisor has given the company new life and Kim is excited about where he can bring the brand and its smoothies in the near future.
Here’s how Kim is spreading the word about Smoothie King in the U.S. and overseas.
Understand all areas of your business
Kim was a franchisee for nearly a decade in South Korea. His stores were some of the highest grossing for Smoothie King before he became CEO.
“Obviously franchisees and franchisors have some different views, but eventually the bottom line is to make a better brand,” Kim says. “The path they take can be different, so you have to keep communicating to each other and look at the bigger picture.”
Kim has a very unique advantage over numerous other franchise CEOs. He now has experience as a franchisee and a franchisor.
“I have both aspects and know what a franchise wants and needs, and I know how I need to communicate,” he says. “In any kind of business, sometimes people forget why we do it. So that’s why I keep communicating and keep telling our people why we do this business. We have a great mission and a great vision. We just have to talk about it.
“A lot of people want to make money and be comfortable and I get that and that’s very, very important, but there has to be another reason why we do this. Smoothie King is a healthy choice and our mission is to help people live a better lifestyle.”
While the company’s mission is to help people live a healthier lifestyle, Kim wanted to make sure that the company’s franchises were in good health also.
“As soon as I bought the company I looked at how many single franchisees we have, because when I was a franchisee I thought becoming a multi-unit franchisee was actually very challenging,” he says. “As a franchisor, they don’t understand what kind of challenges franchisees have when they have a second or third location.
“I started to visit some multi-unit franchisees that we have to look at what kind of system they have in place. Today, we are assembling all those systems so that whenever we have a single franchisee try to become a multi-unit franchisee we have some system to help them grow.”
Having those systems in place will become very beneficial as Kim continues to look at ways he can expand the brand.
“Right now we are in growth mode and are opening a lot of stores and also expanding into other countries,” Kim says. “When you grow, you are hiring a lot of people and when you’re expanding outside the United States you encounter different cultures. In order for me to assemble all those differences I need a really strong mission for why we do this business so that it doesn’t matter what kind of culture or background you’re from.”
Prepare for growth mode
Today, Kim is focused on growing the Smoothie King brand outside the U.S. and in the Southern parts of the U.S. where the company has a strong presence, but a lot of potential still remains.
“We want to make sure that we secure our market before we expand to a different part of the U.S.,” Kim says. “That expansion is happening in Florida, Texas, Georgia and other southern parts of the U.S. Going outside the United States we are looking at Malaysia, Indonesia, Thailand, Taiwan, Japan and the Middle East. Our goal is to open two markets this year and two more markets next year.”
Fast-paced growth like Smoothie King is expecting requires a strong culture and mission that make the company attractive anywhere it goes.
“When you are in growth mode I would advise that you want to have a really strong culture in your organization, so that whomever you hire can be blended into your culture,” he says. “You have to set up a strong mission, vision and keep communicating with your employees.”
When you take your company outside of the United States you will experience a lot of cultural difference, and you have to be prepared for it.
“A lot of times when people don’t have any experience with different cultures they will think it’s wrong, but in fact it’s different,” Kim says. “In order for you to go to other countries and do business you have to learn how to respect their culture. If you don’t respect their culture they will know immediately. You have to educate your employees.”
The vast cultural differences Smoothie King employees will experience as the brand continues to expand isn’t the only change they’ll have to accept, they’ll also have to buy into the sheer amount of growth that Kim sees in the company’s future.
“A lot of times when companies grow employees don’t really see how far we can go,” he says. “When we start to grow there is a lot of work coming in and a lot of things are changing. It is very important that I need to keep communicating with employees that we can get there, because if you don’t believe we can get there, then it’s not going to happen.”
One of the first things Kim did when he bought the company was to tell the employees about the growth plan and a lot of people didn’t buy in.
“They were thinking, ‘Oh, it’s a new owner; of course he’s going to be thinking of growth, but it’s not possible,’” he says. “So I had to keep communicating that it’s going to happen and one by one, I started to show them that this would happen and then it really happened and people believed in the plan. I know there are still people who don’t believe where we can go, so I still have to communicate.”
Kim bought the company a little more than a year ago and he is having a blast seeing the company succeed little by little.
“I tell my employees to imagine if we were the size of any big fast food company, the world could be a different place,” he says. “It’s not just about making money and having success. It’s also about influencing more and more people to live a healthier lifestyle.”
How to reach: Smoothie King Franchises Inc., (985) 635-6973 or www.smoothieking.com
Recently, I had the privilege of attending the EY World Entrepreneur Of The Year conference in Monte Carlo. I’m back to report that entrepreneurship is alive and thriving around the globe!
It was a whirlwind of a trip, packed with networking, thought-provoking panel discussions and personal interviews. We heard from a remarkable panel of speakers including Kofi Annan, former Secretary General of the United Nations and Nobel Peace Prize recipient; Sir Timothy Berners-Lee, inventor of the World Wide Web; John Cleese, award-winning actor, author, humorist and Monty Python legend; and many more.
I also had the opportunity to sit down with some of the world’s most accomplished entrepreneurs. These business leaders come from more than 60 countries that combined represent a staggering 94 percent of the global economy.
In this issue and in the months to come, you’ll learn what the world’s greatest entrepreneurs have to say about leadership, innovation, overcoming challenges, bringing their visions to life and much, much more. You’ll also hear from the leadership at EY as to the importance of celebrating entrepreneurship.
Transforming vision into reality
“Be careful about making assumptions. Those assumptions can lead you down a pretty dangerous path. It is OK to make assumptions and have confidence but you had better do your due diligence as well. An assumption is having those critical for the business make sure it is happening. I am very trusting of people and in the past have had some unfortunate instances where I did make assumptions about something and they were completely the wrong assumptions.”
Dr. Alan Ulsifer, CEO, president and chair of FYidoctors
“Growth obviously continues to be a challenge. The markets demand growth if you are a publicly traded company, and growth is a metric of how the business is doing. If you want to continue to attract the best people, attract the right sources of capital to your business, you have to demonstrate that things are going well and growth is one measure that people look to. I think that if you are a business in an established market, growth can be a challenge because those markets by and large are growing more slowly. So in order to get more rapid growth, many companies are looking at emerging markets and trying to figure out what their strategy should be for emerging markets, those that have double-digit growth potential.”
Bryan Pearce, Americas Director, Entrepreneur Of The Year and Venture Capital Advisory Group EY
“One of the toughest things for me was that people have a certain image of my country, Colombia. They don’t trust a company there to have good quality and do good work, but I am very proud to offer those qualities from Colombia. It is not easy but it is something that you can accomplish. I have been down a lot of times, but the good thing I have noticed is that every time something like that happened, I have been able to obtain positive things out of it. I have been broke multiple times, but from being broke I have been able to learn from it and rebuild.
Mario Hernandez, founder and president, Mario Hernandez
Jim Turley leaves his post as Global Chairman and CEO for EY with deep admiration for the entrepreneurs who continue to use their vision and spirit of innovation to change the world.
“They have got this wonderful ability to think outside themselves, to look at the world outside these windows and see the needs that exist out there,” says Turley, who officially retired on July 1.
“Then they’ve got a vision to create a product or service or an idea to meet the need they have seen. They have got the courage to risk everything and they are as persistent as can be. Most of them fail the first time out. But they get up, clean themselves off and do it again.”
“Work carefully with a few people who get a twinkle in their eye. If you talk about your idea, some people will respond with excitement because they get it, but not everybody. Maybe you talk to 300 people and three people will get it. Work with those three people. The web took off because a few people all over the world got it. You get the support from a few people who get it and then it builds from there.”
Sir Tim Berners-Lee, creator of the World Wide Web
Corey Shapoff has a job that many would envy, booking well-known musical acts such as Maroon 5, Katy Perry, Christina Aguilera and Kelly Clarkson for live concerts and private corporate events. But he doesn’t take much time to stop and think about all the famous people on his call list.
“I’m a grinder,” says Shapoff, president and founder of SME Entertainment Group. “I’m the kind of guy who is always looking to what’s next. You’re only as good to me as your last deal.”
It’s that instinctual drive to always try to do it better that is embedded in the true entrepreneur and allows the next vision to become a reality.
“It’s hard for me to turn it off and say, ‘That’s great,’” Shapoff says. “I’m always thinking about tomorrow. You just can’t take things for granted in our business.”
“The skill sets of an entrepreneur involve understanding how to create business. So if you’re going to give back, why not work with kids who need it the most and actually teach them and help them to be entrepreneurs. That’s what is going to grow our economy and create stability where otherwise we’re going to have a lot of social unrest.”
Amy Rosen, president and CEO, Network for Teaching Entrepreneurship
“When you’re an entrepreneur you feel like you have never met a deal that you didn’t like. You only have limited resources and limited time to be successful. You have to stay disciplined and focused and being able to say what we are not is every bit as important as being able to say what we are.”
Jim Davis, president, Chevron Energy Solutions
“It’s important that you have teamwork and all your top players are well motivated with passion, principles and values. We make sure that people know where we are going and what our main objective is for that year. We promote teamwork inside and outside the company. Our directors have to make sure they are sharing our company values and principles with each of their team members.”
Lorenzo Barrera Segovia, founder and CEO, Banco Base
“For entrepreneurs you get a great idea, you start your business and then you have to keep focused. Keep executing that idea if that idea is big enough. Never fall into the temptation of getting out of your business or change it unless it’s strategic. Secondly, try to get financing as late as you can. Never get financing as soon as you can. Thirdly, create a great team and culture, because that’s what will prevail and create value for shareholders and your community. That’s how you scale your business. The last one is to dream big.”
Martin Migoya, CEO, Globant
“It was nothing but a gut feeling. The only thing I knew was there was a big opportunity in yogurt. I grew up with yogurt. Being from Turkey yogurt was a big part of our diet. I wasn’t sure if I could do it – break through in the world of yogurt in retail.
The category was owned by two major companies; Dannon and Yopliat owned about 70 percent of the market, and they had been there for years. As a startup you go to the specialty stores first. That’s how you start and you grow and once you reach a certain level then you go to the big retailers.
I didn’t want to do that. I wanted to go to the big retailers and be in the regular dairy aisle. That was a crazy idea and nobody thought that would go, but at least we tried. When we tried, we convinced one retailer in New York, ShopRite. The result from that was we were able to expand to a couple of other retailers. After the second or third customer that we had success with for our yogurt, I knew it wasn’t going to be about selling, it was about making enough.”
Hamdi Ulukaya, founder, president and CEO, Chobani Inc.
One of my favorite business books, which also made it as a Broadway play and a big-screen movie, is “The Wonderful Wizard of Oz,” written by L. Frank Baum in 1900. My hero in this story is not the young orphaned Dorothy, nor the Cowardly Lion, the desperately in-need-of-some WD-40 Tin Man, nor even the Scarecrow in search of a brain.
Instead it is the Wizard. To understand why the dubious Wizard is my favorite character, one must get past the portrayal of him as scheming, phony and at times nasty.
To appreciate the man behind the curtain, recognize that he is a very effective presenter, though at times this ex-circus performer behaved a bit threatening. OK, he was a jerk, but the point of this column is to take you down the yellow brick road on the way to the enchanted Emerald City and corporate success.
From this tale there is a lesson that one can say all sorts of things, not be visible, and yet still have a meaningful impact.
Another takeaway is that playing this role provides plausible deniability. This absence of visual recognition is particularly beneficial in negotiating when you, as the boss, use a vicar, aka a mouthpiece, to speak on your behalf. This allows you to have things said to others that you as the head honcho could never utter without backing yourself into a corner.
Another plus is you can always throw your mouthpiece under the bus if necessary, of course, with his or her upfront understanding that sometimes there must be a sacrificial lamb. This is not only character-building for your stand-in, but also many times presents an unprecedented opportunity for him or her to learn in real time.
Perhaps the Wizard was the first behind-the-curtain decision-maker, but today this role is used frequently in business and government. In a similar vein, the “voice” of Charlie from the well-known 1970s TV series “Charlie’s Angels” was always heard, but he was never seen.
Frequently there is much to be said for using anonymity to float a trial balloon just to get a reaction. Think about a son having his mom test the waters by talking to dad before the son tells him he wants to drop out of junior high school to join the circus. Maybe that’s even how our former circus-drifter-turned-Wizard-of-Oz got his start.
In the negotiating process it is important to have a fallback when the talks hit a rough patch by instructing your vicar to backpedal, saying that he or she has just talked to the chief and the benevolent boss said, “I was overreaching with my request.”
This also serves to build a persona for the boss-behind-the-curtain as someone who is fair-minded and flexible. All the while, of course, it’s the boss who is calling the shots and maneuvering through the process without getting his or her hands dirty.
The value of using this clean-hands technique is that it enables the real decision-maker to come in as the closer who projects the voice of reason, instead of the overeager hard charger who at times seems to have gone rogue.
It actually takes a bigger person to play a secondary role behind the curtain rather than always be in the limelight. It also takes a hands-on coach and counselor to maneuver a protégé through the minefields to achieve the objective.
However, accomplishing the difficult tasks through others is true management and the No. 1 job of a leader who must be a master teacher.
After you have guided a handful of up-and-comers a few times through thorny negotiations, you will gain much more satisfaction than if you had done it yourself, while engendering the respect and gratitude of your pupils. They in turn will have learned by doing, even though they were not really steering the ship alone.
The final step is to let the subordinate take credit for getting the big job done. This will also elevate you to rock star status, at least in his or her eyes. Soon those who you’ve taught will emerge as teachers too, and the big benefit is that you will populate your organization with a stellar team of doers, not just watchers.
So, forget about the Wicked Witch of the West and move backstage for the greater good of the organization.
A few years ago, one of my friends embarked on what he deemed an ambitious, yet simple plan: Write a New York Times Best Seller.
“Ed” had reason to be optimistic: His first two books had sold well and he had successfully leveraged them to launch a burgeoning consulting practice. Ed also had a nationally known book publisher to handle distribution for this book, and he had developed a comprehensive marketing and promotions plan for the launch.
Ed felt all the pieces were in place and was sure he would succeed. His goals were two-fold: break out from the pack and grow his business, and hit the New York Times Best Seller’s list. While his head told him the first goal was more realistic, his heart was set on the second — publicly claiming it was his only true benchmark of success.
Needless to say, Ed’s book didn’t make the list. Few books do. That doesn’t mean Ed’s book was a failure. Quite the contrary, it was a huge success.
As a result of Ed’s book, he landed numerous speaking engagements with organizations and companies around the world. He began to command four- and five-figure speaking fees from those engagements, and his book was purchased and distributed to every attendee.
Further, Ed’s speaking engagements lead to dozens of private companies hiring him to provide one- and two-day seminars, where he taught executive teams how to implement the ideas he espoused in the book. Ed was also presented with numerous business opportunities for new and existing clients to tackle initiatives beyond the book’s subject matter that he had not previously considered but were related to his expertise.
Finally, Ed did sell thousands upon thousands of copies of his book in bookstores nationwide and online through booksellers like Amazon.com and BarnesAndNoble.com. His book was in the hands of the right people — and lots of them — and he had established a national profile.
Viewed through this lens, there is little doubt that Ed’s book was wildly successful — even if it wasn’t a New York Times Best Seller and even if it didn’t stack up to his primary benchmark.
This is the reality of book publishing. Each month, I speak with dozens of entrepreneurs and CEOs about their nascent book ideas and the possibility of having Smart Business Books handle development and publication of their stories and manuscripts. I begin every conversation the exact same way: “If your goal is to have a New York Times Best Seller, we’re not the right option for you.”
That’s because you should write books for the right reasons. If your only goal is getting on a best-seller’s list, then your ambitions are off the mark. Writing and publishing a book is not like a professional sports team’s season — there isn’t one winner who takes the championship and a bunch of losers who fall short. Publishing a book is not an all-or-nothing proposition.
This isn’t to say you shouldn’t aim high with your goals, and having your book become a best-seller is certainly one way to measure success. Setting reasonable expectations, however, is essential.
So why write a book?
One of the most important questions you should be able to answer when thinking about writing a book is, “Who is going to read it and why?”
As Ed’s story demonstrates, a book is a very useful business development tool. It is an immediate conversation starter, an excellent credibility builder and one heck of a leave-behind. If you’re engaged in marketing, why not capture your expertise through a book?
Another reason is to celebrate a milestone or establish a legacy piece. It could be for a 50th or 100th anniversary, or to recognize the history of an organization upon the founder’s retirement or death.
And, if you are interested in helping others succeed, a book is a great way to share your expertise or what makes you and your organization special. For example, if you’ve built an amazing corporate culture where productivity blossoms and innovation flourishes, the “how” and “why” are good subjects for a book. And if you’ve been involved with several mergers and acquisitions, consider sharing what worked and what didn’t, and the lessons learned along the way.
Whatever your story, the key is having a reason to share it with others. The bottom line: It’s your story. Make it count.
Health care cost transparency is the ability of patients to learn how much a medical service or treatment costs, preferably before receiving the service or treatment. This is important because treatment and service costs vary widely from doctor to doctor and from facility to facility.
“In all my travels, with all the different hospitals I visit — hundreds of them — only one had the general charges of fees and services, like cost per day in the hospital, posted up on the wall. It just doesn’t exist today,” says Mark Haegele, director, sales and account management, at HealthLink.
“This system has made it difficult for people to get the information. We’re getting there, but a spotlight on transparency and the cost and options gives people a little more decision-making authority,” he says.
Smart Business spoke with Haegele about the shift toward transparency and helping employees shop for better health care prices.
Why do health care prices vary so much?
Physicians are just trying to diagnose you to help you get better. In addition, surgeons only get paid if they recommend surgery. So, cost doesn’t really weigh into whether patients get knee replacement surgery or are sent to therapy for six months.
If you go to a store and look for a refrigerator, one of the first things you try to figure out is the price. But if you go to the doctor, and you’re talking about getting your knee replaced, that conversation — if it ever comes up — comes up at the very end.
The average treatment for heart failure might vary by tens of thousands of dollars within the same city. A list of Medicare costs, released by the Centers for Medicare & Medicaid Services, found a difference of $21,000 to $46,000 in Denver, Colo., or $9,000 to $51,000 in Jackson, Miss.
Only some rate differences are because of health care’s complexity. If two people with the same insurance get a tonsillectomy at the same hospital, they still could have different doctors ordering different levels of anesthesia and pain medicine with different philosophies on hospital-stay length.
How does transparency lower costs?
As the government, media and patients push for reliable cost and quality information, it motivates the entire system to provide better care for less money. For example, according to the book “Unaccountable: What Hospitals Won’t Tell You and How Transparency Can Revolutionize Health Care,” the governor of New York mandated that hospitals publish their mortality rates for heart surgery. By the year following, hospitals started implementing quality metrics to reduce mortality, and the trend in the mortality rates dropped dramatically, which ultimately saved lives.
In another instance, a Thomson Reuters study of a Chicago employer found a cost variance of 125 percent for health insurance members receiving an MRI of the lower back without dye, with similar differences in diagnostic colonoscopies and knee arthroscopy procedures. If employees were given information to select providers at or below the median cost, it was estimated the company could save $83,000.
What can benefit administrators do to help facilitate transparency?
As a general rule we feel helpless, but there are some things benefit administrators can do to move costs. You’ve got to get information out to members, and then align incentives. The average member, once he or she meets the $2,000 out-of-pocket maximum, for example, doesn’t care if a hip replacement costs $5,300 or $223,000. They should — but most don’t make better purchasing decisions until it impacts them.
Under a self-funded health plan, you have more control over what you are able to publish and demonstrate to employees, as well as more ability to align incentives. But regardless, you need to start identifying costs of providers of key procedures to treat your health plan like an asset.
By putting together a best-in-class grid for your members, and then aligning incentives to ensure they use the lowest cost providers, such as giving a $200 gift card, you can empower your members and move the needle on health care cost.
Mark Haegele is director of sales and account management at HealthLink. Reach him at (314) 753-2100 or email@example.com.
Website: Visit the website to learn more about transparency and other key health care business trends.
Insights Health Care is brought to you by HealthLink
Computing personal property taxes can be a chore for businesses, particularly if the company’s locations cross various state and local jurisdiction boundary lines. Each state has its own statutes, due dates, assessment ratios and instructions that must be adhered to for a company to be considered “compliant.” These property tax requirements vary greatly and most often have late penalties for missing deadlines. However, digging into these very statutes and instructions can also provide an opportunity to minimize your company’s tax burden.
“Many will run the fixed asset ledger right out of the system and that’s what they’ll report,” says Jenna R. Kerwood, CMI, a principal in Tax Services at Brown Smith Wallace.
However, that usually results in paying more taxes than what is owed because not all assets are taxable. Often, fixed assets are capitalized at a project level, which results in inaccurate reporting for property tax purposes. There may be costs that are not taxable or components of the cost that should be removed. The taxability of these assets can be determined by examining the state and county websites, statutes, assessor manuals and return instructions.
Smart Business spoke to Kerwood about what constitutes personal property and why it’s worth the effort to keep an accurate track of assets.
What is the difference between real estate and personal property?
Real estate refers to land and buildings. Personal property is defined as tangible property that’s movable. It can be difficult to distinguish between the two, especially with manufacturing facilities, and each state has different rules and instructions.
Most states have a three-prong test:
- Can the item be moved without destroying the real estate?
- What is the primary purpose the item serves? The more special its use, the more likely that it will be considered personal property.
- What was the owner’s intent?
The key is whether it would destroy or cause permanent damage to the building if you were to remove the item.
What is the basis of property tax assessments?
The basis of value for real estate and personal property is fair market value — the amount a willing buyer would pay in a market when there’s no duress, such as a bankruptcy or foreclosure. Fair market value is subjective, which gives you an opportunity to analyze all of the capitalized cost to determine how best to reflect the ‘fair market value’ of the asset.
When reporting assets for property tax purposes, you need to understand their physical life, use, maintenance schedules, etc., in order to depreciate correctly. Items with a short life have faster depreciation. Manufacturing equipment might have computerized components that can be placed on a shorter life with a more reasonable depreciation schedule.
How can businesses lower their tax burden?
Start with fixed asset accounting records. When filing personal property tax returns, you report the original cost of the asset by year of acquisition. Companies might have a retirement policy by which they dispose of, melt down or cannibalize an asset, but that’s not reflected on the books.
It’s best to address problems on the front end. Review the asset ledger for listings that don’t look right — focus on the high dollar items or assets with ‘miscellaneous’ as the description. Scrutinize asset invoices and review them with the people who know them; it might be the plant manager for the manufacturing facility, facilities person for the furniture and IT people for the computer asset listing. Another area to consider is depreciation. The county will tell you the rate, but that may not be accurate and is negotiable.
How much can be saved?
Conservatively, businesses can lower personal property taxes by 20 percent. Most state rates are at 2 percent. When you tell a company that cleaning up asset lists can save $30,000 or more, it gets their attention.
Jenna R. Kerwood, CMI, is a principal, Tax Services, at Brown Smith Wallace. Reach her at (314) 983-1360 or firstname.lastname@example.org.
For more on this and other tax topics, visit Brown Smith Wallace's Tax Insights.
Insights Accounting is brought to you by Brown Smith Wallace
STL Ernst & Young Entrepreneur of the Year 2013
Recognized as one of the world’s most prestigious business award programs, the Ernst & Young Entrepreneur Of The Year Awards celebrate gravity-defying innovators who build and run great companies. This June, we gather here and in 25 cities across the U.S. to honor all of our regional finalists and welcome the class of 2013 into our Hall of Fame.
Entrepreneurs change the world and make it a better place to work and live. We honor them for their fortitude and resilience, and we celebrate their ability to forge new markets, navigate uncharted territory and fuel economic growth.
Congratulations to this year’s finalists and winners for their unyielding pursuit of business excellence. We are honored to share their inspiring stories with you.
Randy Buseman, partner, Kansas City Ernst & Young Office
Mike Hickenbotham, partner, St. Louis Ernst & Young Office
Here are the 2013 Ernst & Young Entrepreneur of the Year finalists and winners:
Agriculture and Plant Sciences
Engineering & Consulting
Technology & Business Services
Winner – Daniel Reed, CEO, UnitedLex
Transportation & Logistics
STL Ernst & Young Entrepreneur of the Year
Technology & Business Services
For Daniel Reed and UnitedLex Corp., the root of excellence is passion. Cultivating passion and creating highly motivated, accountable and committed professionals is the secret of UnitedLex Corp., and the reason the company has driven transformation within the global legal profession.
Daniel Reed is CEO of UnitedLex and an innovator who is changing a legal industry that has historically been slow adapters of technology.
Recognizing a new opportunity to change the legal profession by leveraging technology and process improvements, Reed co-founded UnitedLex, a consulting, technology and outsourcing provider of legal services in 2006. The company’s lightning bolt moment came after several collaborative discussions with the leadership team of Hewlett Packard, which became UnitedLex’s first client, and recognition of gaps in the global legal system.
The mission that emerged was to transform the global legal industry by providing a single point of knowledge and capability in those support areas most critical to law firms and law departments in becoming efficient business operations. The biggest obstacle for Reed was that no one had ever executed such a strategy before.
Rather than adopt a law firm or BPO model for the delivery of legal support services in the areas of litigation, intellectual property, contracts and immigration, UnitedLex created a model that has a management consultancy front end, a technology development and integration enablement group and a centralized resource outsourcing engine for delivery execution. Within five months of starting, UnitedLex was providing legal services to IBM, Microsoft and Marriott Hotels in addition to HP.
By maintaining focus on current business lines, UnitedLex expects to continue to see significant growth in the future. The company is in a position to grow without cash constraints, and given the receptivity and strong demand of an international client base, UnitedLex will continue to invest in areas of core differentiation.
How to reach: UnitedLex Corp., www.unitedlex.com