201 Great Ideas For Your Small Business Revised & Updated Edition

1
2 praise for the first edition of

3 201 GREAT IDEAS FOR YOUR SMALL BUSINESS
4 by Jane Applegate
5
6 “I wish I had this kind of invaluable information when
7 I launched my company forty-seven years ago. ... From
8 one entrepreneur to another, don’t start your business
9 before reading Jane Applegate’s book! ”
10 lillian vernon
11 Chairman and CEO
12 Lillian Vernon Corporation
13
14 “The most comprehensive book I’ve ever read for the
15 owner of a small business . If you are in business for
16 yourself, make sure you get your personal copy. It could
17 prove to be your biggest asset .”
18 wally amos
19 Founder of Famous Amos Cookies
20 and Uncle Noname Company
21
22 “Give your business an extraordinary advantage—
23 buy this book. ”
24 harvey mackay
25 Author of Dig Your Well Before You’re Thirsty
26 and Swim With the Sharks
27 CEO
28 Mackay Envelope Corporation
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30 “Jane Applegate has done it again. In her uniquely
31 approachable yet insightful style, she has assembled a
32 treasured collection of 201 of the best practices in
33 small business use today. An invaluable resource for any
34 entrepreneur .”
35 todd m C cracken
36 President
37 National Small Business United
38
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“An Applegate a day will keep the business problems away. 2
A wonderful collection of practical solutions to everyday 3
business problems.” 4
bob rosner 5
Author of Working Wounded: Advice That Adds 6
Insight to Injury 7
and Nationally Syndicated Columnist 8
9
“Jane Applegate’s expert voice is a welcome one 10
for small business owners. Her book is full of solid, 11
commonsense advice; it will provide great comfort to 12
entrepreneurs who don’t know where to turn for ideas, 13
who fear they are alone in facing the many challenges 14
of running a business.” 15
jack faris 16
President and CEO 17
National Federation of Independent Business 18
19
“Any idea from Jane Applegate is a good one. 201 is a 20
treasure! Grab this book and use it often!” 21
joline godfrey 22
CEO 23
Independent Means, Inc. 24
25
“Just one of these smart ideas can help boost 26
your business. Glean a dozen, and you’ll cream your 27
competition.” 28
martha rogers 29
Coauthor of The One to One Future 30
and Enterprise One to One 31
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“Brilliantly researched. Brilliantly written. A gem of 33
priceless value on almost every page. Read. Inhale. 34
Absorb. Great stuff .” 35
tom peters 36
Author of The Circle of Innovation and 37
Coauthor of In Search of Excellence 38
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1 available from
2 Bloomberg Press
3
4 The Entrepreneur’s Desk Reference:
5 Authoritative Information, Ideas, and Solutions
6 for Your Small Business
7 by Jane Applegate
8 (January 2003)
9
10 Clicking Through: A Survival Guide
11 for Bringing Your Company Online
12 by Jonathan Ezor
13
14 The Business Owner’s Guide to Personal Finance:
15 When Your Business is Your Paycheck
16 by Jill Andresky Fraser
17
18 Outsmarting Goliath: How to Achieve
19 Equal Footing with Companies That Are Bigger,
20 Richer, Older, and Better Known
21 by Debra Koontz Traverso
22
23 The Small Business Owner’s Guide to a
24 Good Night’s Sleep: Preventing and Solving
25 Chronic and Costly Problems
26 by Debra Koontz Traverso
27
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Jane Applegate 8
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201 14
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R E V I S E D A N D U P D AT E D E D I T I O N
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B L O O M B E R G P R E S S 38
P R I N C E T O N 39
1 © 2002 by Jane Applegate. All rights reserved. Protected under the Berne Convention.
Printed in the United States of America. No part of this book may be reproduced, stored
2
in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical,
3 photocopying, recording, or otherwise, without the prior written permission of the pub-
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Drive, P.O. Box 888, Princeton, NJ 08542-0888 U.S.A.
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bloomberg, bloomberg news, bloomberg financial markets, open bloomberg,
11 bloomberg personal, the bloomberg forum, company connection, company
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personal bookshelf, and bloomberg small business are trademarks and service
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marks of Bloomberg L.P. All rights reserved.
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15 This publication contains the author’s opinions and is designed to provide accurate and
16 authoritative information. It is sold with the understanding that the author, publisher,
and Bloomberg L.P. are not engaged in rendering legal, accounting, investment-plan-
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ning, or other professional advice. The reader should seek the services of a qualified
18 professional for such advice; the author, publisher, and Bloomberg L.P. cannot be held
19 responsible for any loss incurred as a result of specific investments or planning deci-
20 sions made by the reader.
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First edition published 1998
22 1 3 5 7 9 10 8 6 4 2
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24 Applegate, Jane
25 201 great ideas for your small business / Jane Applegate. -- Rev. and
26 Updated ed.
27 p. cm.
28 Includes index.
29 ISBN 1-57660-117-X (alk. paper)
30 1. Small business - - Management. I. Title.
31 HD62.7 .A64 2002
32 658.02’2 - - dc21
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this book is dedicated to Joe, Jeanne, and Evan Applegate, 17
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who make my life worth living—also to my parents, 19
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Sherrie and Marty Weisman, who always encouraged me 21
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to “go f0r it.” 23
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1 INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
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4 C H A P T E R 1
5
MANAGEMENT STRATEGIES . . . . . . . . . . . . . . . . . . . . . . . . . 4
6
Lessons to master the everyday challenges of building
7
your business
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9 1: Always Deal with Decision Makers 8
10 2: Don’t Be Afraid to Recreate Your Business 10
11 3: Hire a Great Lawyer 12
12 4: Turn to Spiritual Leaders and Science for
13 Management Advice 13
14 5: Solicit a Quick “Yes” or “No” 16
15 6: Tell the Truth—It’s Critical 17
16 7: Say Goodbye to Corporate Life 18
17 8: Create an Informal Advisory Board 20
18 9: Move Your Business to an Incubator 23
19 10: Overcome a Fear of Public Speaking 24
20 11: Find a Mentor 26
21 12: Organize a Company Retreat 27
22 13: Create a Smarter, Safer Workplace 28
23 14: Think Ergonomically 31
24 15: Make Your Meetings More Productive 33
25 16: Never Work with Anyone Who Gives You a Headache
26 or a Stomachache 34
27 17: Meet Clients in Public Places 35
28 18: Do Something about Your Stress Level 36
29 19: Work the Phones or Walk the Floor 38
30 20: Join a Business Owners’ Support Group—There’s
31 Strength in Numbers 39
32 21: Create a “Roundtable” Editorial for a
33 Trade Publication 40
34 22: Get Help from a Restaurant Consultant 41
35 23: Listen to the Telephone Doctor 42
36 24: Create a Disaster-Recovery Plan 44
37 25: Work Hard and Play Harder 45
38 26: Know When to Reach Out for Help 46
39 27: Know the DOS and DON’TS of Buying a Franchise 48
28: Consider Joining the Family Business 49 1
29: Get Free Government Counseling 51 2
30: Move Your Business into a Main Street 3
Revitalization Zone 52 4
31: Ask Your Employees to Evaluate You 53 5
32: Take This Self-Help Quiz for Managers 55 6
33: Understand What Success Means to You 57 7
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C H A P T E R 2 10
11
MONEY MATTERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
12
Crucial solutions and novel opportunities to keep
13
the cash flowing
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34: Become a Profit Enhancement Officer 64 15
35: Look for “Smart Money” 66 16
36: Write a Killer Business Plan 67 17
37: Learn from David Bowie 69 18
38: Hire a Good Accountant 70 19
39: Find Yourself an Angel 72 20
40: Choose the Right Bank 74 21
41: Find a Strategic Partner 76 22
42: Sell Stock in Yourself 78 23
43: Rent a Financial Genius 81 24
44: Sell at the Right Time and Price 82 25
45: Be Prepared for the Sale 84 26
46: Use a Savvy Real Estate Broker 85 27
47: Shop Carefully for Long-Distance Service 87 28
48: Lock Your Supply Cabinet 88 29
49: Set Up a SIMPLE Retirement Plan 88 30
50: Create an Employee Stock-Ownership Plan 90 31
51: Join a Captive Insurance Company to Cut Costs 92 32
52: Be Prepared to Accept Credit Cards 93 33
53: Collect the Money People Owe You 95 34
54: Hire a Debt Arbitrator 97 35
55: Fight Unnecessary Chargebacks 98 36
56: Buy Disability Insurance 100 37
57: Expand Your Vendor Network 102 38
58: Ask for a Deposit 103 39
1 59: Discount Accounts Receivable 104
2 60: Be Talked Out of a Bad Idea 105
3 61: Hire an Enrolled Agent to Do Your Taxes 106
4 62: Take Advantage of a Tax Break 108
5 63: Know about Economic Development Incentives
6 and Agencies 110
7 64: Use Frequent Flier Miles for Meetings 112
8 65: Finance Your Independent Film 112
9 66: Take Advantage of Special Lending Programs
10 for Women 114
11 67: Get Free Financing Help 116
12 68: Get Some Help from Uncle Sam 116
13 69: Buy Used Office Furnishings 119
14 70: Buy Prepaid Legal Insurance 121
15 71: Locate the Right Space 121
16 72: Build Up Your Credit Lines 123
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19 C H A P T E R 3
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MARKETING STRATEGIES . . . . . . . . . . . . . . . . . . . . . . . . . . 126
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Creative ways to attract new customers and trounce
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the competition
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24 73: Strike a Deal with a Giant 131
25 74: Look Big in Cyberspace 133
26 75: Take Advantage of Co-op Advertising 135
27 76: Market to Callers on Hold 136
28 77: Set Up a Dealer Network 138
29 78: Create an Active Database 140
30 79: Market to the Gay Consumer 141
31 80: Give to Charity 142
32 81: Use Coupons to Attract Customers 145
33 82: Do Good for Your Community 146
34 83: Use Food as a Selling Tool 147
35 84: Set Up a Strong Referral Network 148
36 85: Give It Away 149
37 86: Design a Great Sign for Your Business 151
38 87: Produce an Infomercial 151
39 88: Put a Pig in Your Window 153
89: Put Your Company Name on Everything 154 1
90: Free Up Your Sales Force 155 2
91: Hire a Mascot or a Celebrity 156 3
92: Publish a Newsletter 157 4
93: Market Your Service-Based Business 159 5
94: Host an Open House 160 6
95: Promote with Prepaid Phone Cards 162 7
96: Generate Publicity in Your Community 163 8
97: Give Away a Seminar Seat 164 9
98: Know the Difference between Marketing, 10
Advertising, and PR 165 11
99: Ask for Two Business Cards 167 12
100: Have a Theater Party 168 13
101: Invite Associates to a Trade Show 168 14
102: Really Work a Trade Show 169 15
103: Know Your Competition 170 16
104: Tap the Growing Hispanic Market 172 17
105: Become Politically Active 173 18
106: Make Your 800 Line Ring 175 19
107: Attend Charity Events to Make Contacts 176 20
108: Publicize Your Food Business 177 21
109: Become a Government Contractor 179 22
110: Consider Multilevel Marketing 180 23
111: Send Pizza to Potential Clients 182 24
112: Think BIG—It Doesn’t Cost Any More than 25
Thinking Small 182 26
113: Get Certified as a Minority Supplier 186 27
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C H A P T E R 4 30
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DEVELOPING AND
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LAUNCHING PRODUCTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 188
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Nurturing your big idea and finding the perfect niche
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114: Create a Fad 192 35
115: Import Something New and Different 193 36
116: Turn Your Hobby into a Successful Business 195 37
117: Borrow Funds from Your Family 197 38
118: Become an Exclusive Importer 198 39
1 119: Be a Location Contrarian 201
2 120: Build a Working Model 203
3 121: Serve the Market’s High and Low Ends 205
4 122: Launch New Products with a Media Blitz 206
5 123: Do a Deal with a Big Company 208
6 124: Have Your Product Mandated for Use by
7 an Official Group 211
8 125: Find a Need and Fill It 212
9 126: Open Your Store in a Farmer’s Market 214
10 127: Turn Your Anger into Energy 215
11 128: Set Up a Cart in a Mall 216
12 129: Turn Your Passion into Profits 219
13 130: Develop a High-Tech Solution to a Problem 220
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16 C H A P T E R 5
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PEOPLE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 222
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Recruiting talented, resourceful team members
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and keeping them productive
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21 131: Cast a Wide Net to Attract Good Employees 227
22 132: Write Clear Job Descriptions 228
23 133: Know What Not to Ask Job Applicants 229
24 134: Recruit Good Employees 230
25 135: Look Far and Wide for the Best Person 231
26 136: Work with People You Like 232
27 137: Hire Seniors as Employees 233
28 138: Hire Teenagers 235
29 139: Use the BATH System for Hiring 236
30 140: Perform a Personnel Checkup 237
31 141: Hire a Welfare Recipient 240
32 142: Consider Telecommuting as an Option 242
33 143: Tailor Benefits to Employees’ Needs 243
34 144: Offer Classes in English as a Second Language 244
35 145: Find Out How Disney Does It 245
36 146: Ask Good Clients to Meet Key Hires 247
37 147: Work with a Great Labor Attorney 248
38 148: Hire an Interim Executive 250
39 149: Offer to Train Your Employees 252
150: Offer Employees the Right Incentives 253 1
151: Deal Carefully with Issues of Workplace Violence 255 2
152: Take Your Sexual Harassment Policy Seriously 257 3
153: Rely on Temps or Leased Workers 258 4
154: Consider Hiring Remote Workers 260 5
155: Tips for Recruiting Executives 262 6
156: Send Flowers to an Employee’s Spouse 264 7
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C H A P T E R 6 10
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TIME MANAGEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 266
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Organizing your office and yourself for better results
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157: Take This Time-Management Quiz 270 14
158: Get Organized—Right Now 271 15
159: Hire a Personal Information Officer 273 16
160: Plan “In” Days and “Out” Days 275 17
161: Beat Your Deadlines 276 18
162: Throw Away Your Expensive Time-Management 19
System 276 20
163: Follow These Five Quick Time-Management Tips 277 21
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C H A P T E R 7 24
25
TECHNOLOGY AND
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TELECOMMUNICATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . 280
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Using the latest equipment to streamline your company
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164: Five Great Things to Buy 284 29
165: Find the Right Communications Technology for 30
Your Business 286 31
166: Train Your Employees Online 287 32
167: Take Advantage of an Online Technology Marketplace 290 33
168: Set Up a Teleconference 293 34
169: Make the Most of Voice Mail 294 35
170: Perform a Technology Checkup 295 36
171: Use a Digital Camera for Your Website 297 37
172: Scan Your Business Cards 298 38
173: Create a Website 299 39
1 174: Computerize Your Service Business 301
2 175: Buy a High-Tech Postage Meter 302
3 176: Protect Your Business Data and Records 303
4 177: Use E-Fax 304
5 178: Sell Products Online 306
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7 C H A P T E R 8
8
CUSTOMER SERVICE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 308
9
Keeping customers happy to create a stronger business
10
11 179: Take This Quick Customer Service Quiz 313
12 180: Hire a Mystery Shopper 314
13 181: Don’t Make Your Customers Angry 315
14 182: Make House Calls 316
15 183: Send Employees to a Retail Training Center 318
16 184: Demand Great Service from Vendors 318
17 185: Get to Know Your Customers Personally 319
18 186: Wrap It Up 320
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21 C H A P T E R 9
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GOING GLOBAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 322
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Expanding your reach and establishing an international
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network
25
26 187: Expand Production South of the Border 326
27 188: Forge an International Alliance 328
28 189: Do Business in India 330
29 190: Explore Opportunities in Russia 331
30 191: Learn about a Culture before Doing Business 334
31 192: Go on a Trade Mission 335
32 193: Translate Your Marketing Materials 337
33 194: Abide by the Etiquette of International Trade 338
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C H A P T E R 1 0 1
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GREAT IDEAS FROM VIPs . . . . . . . . . . . . . . . . . . . . . . . . . . . 340
3
Influential entrepreneurs tell you how they do it
4
195: Herb Kelleher Be a Maverick in Your Industry 342 5
196: Muriel Siebert Find the Business That’s Right 6
for You 343 7
197: Mike Bloomberg Stick to Your Guns and Keep Your 8
Ideas Simple 345 9
198: Tom Peters Two Great Ideas 347 10
199: Harvey Mackay Benefit from Volunteerism 348 11
200: Wally Amos Reinvent Yourself 349 12
201: Lillian Vernon Take Some Advice from the 13
Mail-Order Queen 350 14
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CONCLUSION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 354 17
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RESOURCES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 356 19
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INDEX . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 380 21
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ACKNOWLEDGMENTS 13
every person quoted in this book deserves heartfelt 14
thanks for the many hours they spent being interviewed, 15
fact-checked, and pestered. 16
Every author needs a great agent and Dominick Abel is 17
the best. 18
Every writer needs great editors. My editors at Bloomberg 19
Press, Jacqueline Murphy and Chris Miles, provided the per- 20
fect balance of hand-holding, clear direction, and moral sup- 21
port. Thanks to Jared Kieling, editorial director, for his 22
enthusiasm for my work. 23
Special thanks to Michael Bloomberg for hiring me as a 24
consultant and giving me challenging projects that allowed 25
us to move to New York. He also contributed a great idea 26
and, best of all, published this book. 27
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Introduction
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1
Man’s mind, stretched to a new idea, 2
never goes back to its original dimensions. 3
—OLIVER WENDELL HOLMES JR.

4
7
Why I wrote “201” 8
with so many great ideas floating around out 9
there, you might wonder how I narrowed it down to 10
201 and what criteria I used to decide whether or 11
not the idea was just average or really great. 12
Well, to me a great idea is one that is timeless. 13

1
It’s not a fad, buzzword, or trendy fix-all. It has to be 14
useful and appropriate for a variety of small 15
businesses, no matter what they do or where they 16
are based. Universal appeal is a major requirement. 17
It also has to be something tried by a real 18
business owner in a real small business. 19
Everything in this book came from an interview 20
I’ve conducted, a business owner I’ve met, a 21
consultant I’ve quizzed, or a book or article 22
written by a respected business reporter or author. 23
Credit is given where credit is due, whenever 24
possible. If I’ve “borrowed” an idea, I’ll tell you 25
where it came from. Recognizing the people who 26

1
3
2 0 1 G R E AT I D E A S F O R Y O U R S M A L L B U S I N E S S
6 came up with these ideas is a great way to

7 encourage them to dream up more.
8 I solicited ideas from entrepreneurs in
9 Bakersfield and Bali, Fargo and France. I scoured
10 my database, Rolodex, and scraps of paper to track
11 down consultants, trainers, venture capitalists,
12 bankers, accountants, credit managers, money
13 managers, and attorneys.
2
14 We were relentless in searching for the best ideas
INTRODUCTION
15 possible. We found all sorts of interesting people to

16 press for inspiration and anecdotes. You’ll meet
17 restaurant doctors, telephone doctors, and real
18 doctors called psychiatrists.
19 My search also inspired me to collect a few
20 great ideas from some of the country’s best-known
21 entrepreneurs. Mail-order queen Lillian Vernon
22 and Southwest Airlines chairman Herb Kelleher
23 graciously shared their great ideas with me.
24 Management guru Tom Peters contributed one;
25 so did Muriel Siebert, the first woman to own a seat
26 on the New York Stock Exchange.
1
The 201 ideas are divided into themes to make it 6
easy to find what you’re looking for. Many ideas are 7
cross-referenced to easily link you to additional 8
information on a related subject. 9
And I’ve brought several ideas up to date since the 10
book’s first printing. With so much changing since 11
the first edition was released, I decided to revise 12
many sections and update or delete others. There are 13

3
new management ideas including why you should 14
ask your employees to evaluate you every year. Also 15
new are ideas about borrowing money from your 16
family and finding technology to license via a new 17
online marketplace. There are always great ideas to 18
share, and this edition incorporates many new ones. 19
This book, in its handy format, is meant to be 20
read on the run. Read it front-to-back or back-to-front; 21
it doesn’t matter. But read it cover-to-cover, and tell 22
your friends about it. I guarantee you won’t be bored. 23
jane applegate 24
CEO SBTV Corp.
25
Pelham, New York
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C H A P T E R 1
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Management
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Strategies 21
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S
1
8
ince i began writing about the
entrepreneurial market in 1988, I’ve compared
business owners to plate spinners in the circus. It
seems that as soon as you get one plate spinning,
another starts wobbling and crashes to the floor.
No matter what kind of business you’re
managing, you face big and small challenges every
day. Hands-on managers wear many hats but rarely
9 have time to hang any of them on a hat rack.
10 For instance, one morning when I arrived to have
11 my hair cut at the Total Image salon in New
12 Rochelle, New York, the owner, Frank Como, was
13 already facing an enormous pile of wet towels
14 because his clothes dryer wasn’t working. Several
15 minutes later, the real estate broker working a few
16 doors away ran into the salon in a lather because the
17 basement of her building was filling up with water.
18 That wasn’t all. Between clients, Frank was soothing
an upset hairdresser. Just a typical day, we agreed. 1
While Frank’s business is tiny compared to some 2
of the other business owners you’ll meet in this 3
book, you’ll see that no matter what size your com- 4
pany is, you can always use fresh management 5

7
strategies. 6
One of the most successful entrepreneurs I know 7
has bigger headaches than Frank’s. In recent years, 8
she’s dealt with the unionization of her assembly 9
line workers after a very nasty battle. During that 10
incredibly stressful time, she was being wooed by 11
one of the biggest corporations in her industry to 12
manage their West Coast manufacturing center. 13
Although she’s one of my closest friends, we 14
communicate mainly via voice mail, exchanging 15
detailed messages at odd hours because she rarely 16
has five minutes free for a live conversation. But, 17
like Frank, she loves being an entrepreneur. 18

1 It doesn’t matter whether you’re running a fast-growing
2 factory or a cozy suburban beauty salon—I have great ideas
3 for you.
4 In this chapter, you’ll learn how to woo clients and find
5 great places to meet with them, even if you don’t have a
6 fancy office. You’ll find out how to set up an informal ad-

7 visory board to help solve tough problems and how to
8 streamline your meetings so you have more time to work.
9 You’ll learn how to hire great attorneys, accountants, and
10 consultants, and how to create a safer workplace so you stay
11 out of trouble with health and safety authorities.
12 You’ll be inspired to plan a company retreat to rethink
13 your priorities, move your business from home into a busi-
14 ness incubator, invest in good office furniture, and improve
15 your telephone skills.
16 Maybe you’re feeling lost and want to find a mentor? I’ll
17 tell you how.
18 I’ve also included some thought-provoking ideas on deal-
19 ing at a higher, less stressful level, and why it’s so important
20 8 to tell the truth and have more fun, despite the incredible
21 demands on your time.
MANAGEMENT STRATEGIES
22 I’ve been an affordable management consultant for years.

23 For the price of a newspaper, you can get a weekly dose of
24 practical advice in my syndicated column. Or you can check
25 out the websites where I operate in cyberspace, including my
26 own site, www.sbtv.com. But for now, you can have my
27 greatest management ideas in one place—right here.
28
29
30
Always Deal with Decision Makers
31 G R E AT the entrepreneur’s challenge is always to
32 operate at the highest level possible; present propos-
33 1 als to the top decision maker, not the gatekeeper;
34 I D E A elicit a prompt response; and move on quickly if the
35 answer is “no.”
36 Even when our company was based in the den of my sub-
37 urban Los Angeles home, and later in a converted garage, we
38 always resolved to deal directly with the very top people.
39 Sure, it raised eyebrows because most of our consulting
clients were Fortune 100 companies, but they wanted to 1
work with us because they were eager to sell into the fast- 2
growing entrepreneurial market. 3
I am convinced we have been so successful because 4
we’ve insisted on dealing with the top decision makers or 5
managers with high-level access. No matter who you are, 6
you can practice this approach. You can write directly to the 7
president or chairman. Briefly outline your product and 8
what you can do for his or her company. In many cases, the 9
top person, or an assistant, will make a note on the letter 10
and direct it back down through the ranks. That notation 11
carries weight. 12
There are, of course, other ways to make the initial con- 13
tact. Voice mail is a terrific tool for getting through to the 14
person in charge. Most executives have a direct line. Ask 15
to be put through by the receptionist. Call early in the 16
morning or late in the evening—they often work longer 17
hours than their secretaries. Try phoning during the lunch 18
hour, too. 19
I should warn you that the “easier at the top” strategy does 9 20
have pitfalls. Even if the top person signs off on your project, 21
middle managers will sometimes exercise their powerful 22
veto power. And at times they’ll try to sabotage you. 23
After one project I had nurtured nearly to completion died 24
a slow death from lack of middle management support, I 25
learned that any outsider proposing a new idea to a major 26
corporation must be very aware of the “not invented here” 27
syndrome. It’s a deadly corporate virus that can wipe out a 28
good idea in no time. I share that not to discourage you, but 29
to emphasize how critical it is to have solid support from the 30
decision makers. 31
That said, be persistent—e-mail a provocative message 32
describing your product. I’m living proof that it pays to start 33
at the top and deal with whoever is signing the checks. 34
35
36
37
38
39
1
2 Don’t Be Afraid to
3
4
RecreateYour Business
5 when anthony’s fish grotto dropped the
G R E AT
6 zabaglione cake from its menu, Rick Ghio feared his
7 2 dear, departed grandmother, Catherine, would send a
8 I D E A lightning bolt down from heaven in protest.
9 “But we were throwing away more cake than we were sell-
10 ing,” said Ghio of the traditional sponge cake served with a
11 rum custard sauce. Now Anthony’s serves trendier tiramisu
12 and fresh fruit tarts.
13 After fifty years, Anthony’s also dropped rosé from the
14 wine list, switching to white Zinfandel. These menu changes
15 are just part of the major facelift under way at the famous
16 San Diego–based restaurant chain.
17 Today Rick, a co-owner, manages the financial aspects of
18 the company. His brother, Craig, and three other family
19 members are the third generation to run the family-owned
20 10 business founded by their grandparents.
21 Rick and his counterparts are giving the business a total
22 makeover, inside and out. But why would a famous San

23 Diego institution like Anthony’s reinvent itself?
24 “We were losing our market share,” he said. “Our reputa-
25 tion was still strong, but people were not dining at Anthony’s
26 as frequently as they did in the past.”
27 Families still booked tables for major celebrations and
28 holidays, but the younger, twenty- and thirty-something
29 crowd did not consider Anthony’s a hip place to eat.
30 “Competition is fierce, relentless, and unforgiving,” said
31 Craig Ghio, who oversees seafood purchasing and recipe
32 development. “Diners have more choices than ever, and tra-
33 dition is no longer enough to keep them coming back.”
34 At first they changed advertising agencies, updated the
35 menu, and did a little remodeling, but sales stayed flat.
36 The company, which started out in 1946 with one
37 eighteen-seat diner, decided to completely rethink its pur-
38 pose. The family hired two respected restaurant consul-
39 tants who urged them not only to remodel their La Mesa
location but also to turn the management of the company 1
upside down. 2
The family had always made all the key decisions. Now 3
Anthony’s is managed by interdisciplinary teams, led by 4
trained “integrators” who conduct frequent discussions 5
about everything from service to what kind of food and 6
drinks to serve. The company’s 400 employees all serve on 7
one or more of the teams. 8
Everything at Anthony’s has dramatically changed in 9
the past year or so, Rick said. For example, “You always 10
paid your bill at the cash register on the way out,” he said. 11
“Now you pay your server, which slows down turnover, but 12
on the upside, it gives the server an excellent way to close 13
out the meal.” 14
They spent $1.3 million turning the lakeside La Mesa loca- 15
tion into a fantasy grotto, complete with a video game arcade 16
built on a thirty-six-foot Criscraft boat, a trellis-covered patio, 17
and cascading waterfalls. 18
They created two new characters for kids: Sandy the fish 19
and Diego the octopus. Kids have their own menu and free 11 20
beverage cups to take home. 21
“We learned to scan the environment,” said Rick, “to stay 22
in front of current trends. For the first time, we extended our 23
hours. We are now open until 10 PM on weekdays and 11 PM 24
on weekends.” 25
Sales increased 35 percent shortly after the remodeled 26
La Mesa restaurant opened. “People of all ages love it,” 27
Rick said. 28
While retooling the management and remodeling, they 29
also worked hard to control food costs and boost profits. “For 30
every dollar we took in, we used to spend 44 cents on food,” 31
he said. “Now it’s down to 36.5 cents, and we’ve become 32
more profitable.” Anthony’s, which is privately held, has rev- 33
enues of about $18 million a year. 34
Although it has taken thousands of hours and more than 35
$1 million, Rick said the total revitalization program was 36
worth it. 37
“It is the scariest darn process,” he admits. “We literally 38
had to reexamine things that were done the same way for 39
1 fifty years. There’s a huge risk in saying goodbye to some of
2 the things we had been doing … but we are truly blessed by
3 the initial response.”
4 Check out Anthony’s website at www.gofishanthonys.com.
5
6
7
Hire a Great Lawyer
8 G R E AT when you’re starting a business, it’s
9 natural to try to save money at every turn. But it
10 3 doesn’t pay to scrimp when it comes to getting solid
11 I D E A legal advice.
12 Most business owners’ first encounter with legal forms
13 comes with a DBA, which means “doing business as” and is
14 legally known as a fictitious name statement. After this first
15 step, you’ll need good legal advice to buy or sell real estate,
16 form a partnership, create job applications, and write
17 employee handbooks.
18 A good small business attorney will protect you and your
19 business from legal troubles involving staff, vendors, and
20 12 customers. He or she can also help when you are looking for
21 investors or dealing with bankers.
22 Finding a good attorney is not as challenging as you may

23 think. According to Brad Carr, spokesman for the New York
24 State Bar Association, there are about 729,000 practicing
25 attorneys in this country, with three out of four working for
26 themselves or for a small firm. The best way to find a good
27 lawyer is to ask other small business owners if they would
28 recommend their own attorney. Your banker and your
29 accountant may have some recommendations; ministers and
30 rabbis are also good sources of referrals because they know
31 so many people in the community.
32 Another way to find one is through legal directories. The
33 reference section of most larger public libraries should have
34 the Martindale-Hubbell Law Directory. This directory pro-
35 vides brief biographical information about lawyers in your
36 area. Some listings also include the names of their clients, so
37 you can call for references.
38 Most state bar associations offer free referral services. Call
39 the bar association in your state for information. Most
lawyers listed through the referral service charge a modest 1
fee for an initial consultation. 2
Remember, hiring an attorney is a very personal thing. Be 3
sure to choose someone you can confide in, who makes a 4
good impression, and who has experience in your industry. 5
Some good news: A glut of attorneys, especially in big 6
cities, has forced many to reduce their fees to beat the com- 7
petition. Most are happy to work by the project and do not 8
expect to be put on a monthly retainer. Some attorneys who 9
specialize in working with entrepreneurs will take you on as 10
a client in exchange for stock in your company or profit- 11
sharing down the line. If an attorney is willing to work on 12
this basis, consider making him or her a part of your strate- 13
gic team. 14
The hourly fees you’ll pay depend on where you live. For 15
instance, business owners in New York City and Los Angeles 16
generally pay higher legal fees than those living and working 17
in Omaha, Nebraska. 18
When you are interviewing prospective attorneys, here 19
are the questions to ask to get you started: 13 20
◆ Are you a member of the state bar and licensed to practice 21
law in this state? (If your company does a lot of interstate 22
commerce, you might want to hire an attorney who can prac- 23
tice in the federal courts as well.) 24
◆ What kinds of small businesses do you represent? 25
◆ How long have you been practicing law? 26
◆ Could you give me some references? 27
28
Turn to Spiritual Leaders and 29
30
Science for Management Advice 31
G R E AT entrepreneurs looking for a new spin on 32
management might want to read two provocative 33
4 books: Moses on Management (Pocket Books, 2000), 34
I D E A by Los Angeles–based Rabbi David Baron, and Leader- 35
ship by the Book (William Morrow, 1999), by Ken Blanchard. 36
In this confusing and unsettling time, it’s no surprise 37
that two revered spiritual leaders have been tapped to pro- 38
vide modern management advice. If you’ve tried traditional 39
1 management books and are open to a new spin, here’s
2 what you’ll find:
3 In his book, Blanchard, with coauthors Bill Hybels,
4 senior pastor of Willow Creek Community Church in Chica-
5 go, and Phil Hodges, managing director of the Center for
6 FaithWalk Leadership, explain the principles of “servant

7 leadership” by telling a scary story with a happy ending.
8 Michael, a hard-driving, workaholic executive who has
9 neglected his family, friends, and spiritual life, has a serious
10 heart attack. His collapse brings two longtime friends back
11 into his life: The Professor (a thinly disguised Blanchard)
12 and The Minister. What Michael learns during the course of
13 the 197-page story is that true leaders think of themselves as
14 servants to their customers and employees. Anyone who
15 runs a small business is in the service business and can
16 apply these parables.
17 Rabbi David Baron, founder of Temple Shalom for the
18 Arts in Beverly Hills, said he started writing sermons about
19 how the Bible relates to business issues as a way to reach out
20 14 to members of his busy congregation. He said many people
21 would like the companies they own or work for to reflect val-
22 ues they cherish.

23 Often entrepreneurs are too busy running their business-
24 es to think about incorporating important values into their
25 day-to-day management decisions. Yet, a truly successful
26 business has to operate based on the ethics of its owner and
27 employees. For example, if you cheat or short-change your
28 customers, you shouldn’t be surprised if your employees do,
29 too. If you tell white lies about why you were late or missed
30 an appointment, your employees will think it is OK if they do
31 the same.
32 “The more I got into [these topics], the more it resonated
33 with business people,” Baron said. His book explores how to
34 balance business success with ethics. Lessons shared include
35 asking for what you want, the same way Moses asked
36 Pharaoh to free the Jews, and “bringing your staff out of the
37 slave mentality.”
38 Baron also considers why God chose Moses for such a
39 tough leadership role when he was hardly management
material. “Imagine hiring a manager whose profile reads: 1
reluctant to lead, stutters, distant, prone to long mountain- 2
top vigils, temperamental to the point of smashing corpo- 3
rate mission statements, strikes out instead of speaking, 4
settles disputes through swift violent means, and never 5
reaches his ultimate objective.” Baron’s point is that you 6
have to look beyond the obvious when you are hiring new 7
employees or grooming current employees for a promo- 8
tion. Evaluate people based on how they have handled a cri- 9
sis, dealt with an upset customer, or reached out to a trou- 10
bled coworker. 11
Both books offer a different perspective on business man- 12
agement and may inspire you to take a slightly different view 13
of a troubled employee or a difficult client. The books may 14
also inspire you to reconnect with your spiritual side, even if 15
you haven’t been to a church or synagogue in years. 16
For a totally different yet equally thought-provoking man- 17
agement book, read The Natural Laws of Business: How to 18
Harness the Power of Evolution, Physics and Economics to 19
Achieve Business Success by Richard Koch (Doubleday, 2001). 15 20
Koch relies on Darwin’s Theory of Natural Selection and 21
other scientific theories to explain how to improve the envi- 22
ronment around your business. 23
“We need to understand the natural laws, whether these 24
control tiny particles, huge planets, or our own behavior,” 25
says Koch. “We have to respect the laws. We must recognize 26
when they can undo our plans. And when we can harness 27
their power in creative ways.” 28
He offers important business lessons on finding a niche 29
to dominate based on Gause’s Principle of Survival by Differ- 30
entiation, supports experimenting before committing to a 31
major initiative based on Heisenberg’s Uncertainty Princi- 32
ple, and discusses how to improve relationships with diverse 33
employees by learning more about evolutionary psychology. 34
If the spiritual path doesn’t lead you into better manage- 35
ment, try the scientific. 36
37
38
39
1
2
Solicit a Quick “Yes” or “No”
3 G R E AT through the years, i’ve learned that a
4 quick and honest “no” is as important as a “yes” in
5 5 many, many business situations. While we all love to
6 I D E A sign on a new client or make a huge sale, too much

7 time is wasted in discussion and negotiation because folks
8 are afraid to just say “no.”
9 If someone isn’t interested in buying what you have to
10 sell, it’s painful but more efficient to know the truth and
11 move on.
12 The challenge is this: Most people don’t like to say no, so
13 they waffle, stall, mumble, and don’t return your phone calls,
14 faxes, or e-mails. This adds to your frustration and wastes
15 your time.
16 One strategy I’ve found to be extremely effective for get-
17 ting a timely answer is setting a clear deadline. You may
18 think this takes a lot of nerve, but it works very well in most
19 situations. We set response deadlines on proposals submit-
20 16 ted to even the biggest Fortune 500 companies.
21 This deadline policy is a very grown-up way to do busi-
22 ness. It alleviates anxiety and stress. We ask our corporate

23 clients, who usually take a long time to make decisions, to
24 tell us where they are in the process. Keeping us apprised
25 cements the relationships by leaving the lines of communi-
26 cation open.
27 Of course, if someone asks for an extension because they
28 can’t schedule a meeting with colleagues or something vital
29 arises, we’ll wait for an answer.
30 The secret to setting deadlines is to do it in a very calm,
31 professional, and nonconfrontational manner.
32 Be very clear. Tell them that you truly want their business,
33 but you believe a “no” is as important as a “yes.” Try it. I
34 guarantee it will change your life, and you’ll never go back to
35 waiting endlessly in limbo for an answer.
36
37
38
39
1
Tell the Truth—It’s Critical 2
G R E AT this idea may seem obvious, but telling the 3
truth is critical to business success. 4
6 Being truthful helps hone your vision for the com- 5
I D E A pany. While you may be tempted to hype sales figures 6
or inflate projections to make yourself feel better, don’t. 7
These little untruths will come back to bite you. 8
Convincing yourself that things are great, or even OK, 9
when they are really terrible creates serious trouble sooner or 10
later. Successful business people admit they need help. They 11
are willing to acknowledge mistakes and change direction, 12
no matter how embarrassed or upset they may feel. They 13
base their decisions on fact, not fiction, and take responsibil- 14
ity for their actions. 15
Telling the truth to your employees shows you care 16
enough about them to share the good and the bad news. In 17
most cases, keeping bad news secret backfires. Smart 18
employees will eventually pick up on negative information 19
and feel betrayed by your silence. If you are facing a cash- 17 20
flow crunch or major crisis, rally the troops around you, ask 21
for their help, and work together to turn things around. 22
Being honest with customers and suppliers is critical to 23
forming strong relationships. If you make a mistake, quickly 24
admit it and find out what it will take to remedy the situa- 25
tion. Making excuses, pointing fingers, and shifting blame 26
will get you absolutely nowhere. Customers appreciate deal- 27
ing with a company that admits it’s not perfect but works 28
hard to untangle problems. 29
Deal in an open and clear manner with all your vendors 30
and suppliers. If your sales are slowing, and you know you 31
won’t be ordering as many cardboard boxes, yards of cloth, 32
or other regular supplies, give your suppliers a heads-up. 33
They will appreciate your candor and, in many cases, stick by 34
you if you are going into a temporary slide. If your business 35
is seasonal, make sure they understand the fluctuations so 36
they can serve you better. 37
Telling the truth in negotiation also has a powerful effect. 38
This goes against most negotiating strategies, but I’ve found 39
1 in my dealings with blue-chip corporations that being truth-
2 ful works. If I want the deal to close, I tell my lawyer or agent
3 to work out the details as quickly and as amicably as possi-
4 ble. We begin from a positive position and sort out the
5 details. We are very clear about our expectations and how we
6 like to do business.
7 I know people appreciate our straightforward approach.
8 Down the line, if something doesn’t feel right, I try to get out
9 of it as smoothly and as ethically as possible. Sometimes the
10 chemistry isn’t right, or you realize you’ve made a mistake by
11 taking on a certain aspect of the project. Maybe you simply
12 don’t like dealing with the people you have to deal with.
13 So tell the truth and move along. People will respect you,
14 and new opportunities will surely replace the ones you leave
15 behind.
16
17
18
Say Goodbye to Corporate Life
19 G R E AT “i suddenly realized i was taking just as big
20 18 a risk staying in my corporate job as I would if I
21 7 left,” said Dairl Johnson, who was at the peak of his
22 I D E A career and managing a product line with $1.5 billion

23 in sales at IBM.
24 “With IBM cutting back, the whole idea of the company
25 being there was no longer true,” said Johnson. “It rocks your
26 whole perspective, and you suddenly say, ‘there’s no such
27 thing as job security. I would rather trust my own skills and
28 abilities.’”
29 Stressed out from too many hours at the computer, John-
30 son had developed a painful “executive slouch.” His back
31 wasn’t in great shape to begin with; he had been injured by
32 an ejection seat when he was a Navy fighter pilot.
33 One day, his doctor sent him to Relax the Back, a small
34 store in Austin, to buy some products. Johnson forked out
35 $5,000 for a recliner chair, lumbar supports, and other back-
36 savers. Amazingly, his back pain eased.
37 Sensing a business opportunity, he checked out the fran-
38 chise, cashed in his IRA, and maxed his credit cards to spend
39 $184,000 on a Relax the Back franchise in Santa Monica.
“That business did $1 million in revenue in its first ten 1
months,” recalls Johnson. “I knew there was really some- 2
thing going on here.” 3
With Southern California sales soaring, he started think- 4
ing bigger. 5
“I said to myself, ‘you know, I want to take this nation- 6
wide, and the only way I can do this is to purchase the 7
entire company.’” 8
Turning to institutional investors, he raised $6 million to 9
buy the operating company. The company owns ten stores, 10
with another seventy franchises across the United States. 11
Sales are doubling every year, from $7 million in 1994 to $15 12
million in 1995 and $30 million in 1996. 13
Johnson is planning openings internationally and posi- 14
tioning Relax the Back as the largest retailer in the $2.5 bil- 15
lion back-care market. 16
Back care is a growing field, since most sufferers are 17
thirty- to sixty-year-old baby boomers with high-stress jobs 18
and money to spend on relief. Relax the Back stores sell 500 19
products ranging from inexpensive massage oils to high-end 19 20
mattresses and reclining chairs. 21
Looking back at his life as an executive, Johnson said he 22
has no regrets about leaving the corporate nest. He has this 23
advice for other corporate types considering the entrepre- 24
neurial leap: “The most important thing is to be prepared for 25
the risk,” he advises. “It’s a real free-fall, and sometimes you 26
can’t find the rip cord.” 27
He said that once you do your research and decide what to 28
do, you “have to launch. You can’t put one foot on the boat 29
and keep the other one on land. Failure is not an acceptable 30
alternative. Doubt and fear are OK, but not failure.” 31
Finding a business that really makes a difference is also 32
critical to success, Johnson said. “Align yourself with some- 33
thing you really believe in.” 34
Meanwhile, he’s enjoying every minute in the back-care 35
business. “Having a company is like having a sports car,” 36
he said. “If you step on the accelerator, the business accel- 37
erates. If you put your foot on the brake, everything stops. 38
Everything that happens to the company is a direct result 39
1 of what you do, and not what someone three rungs up the
2 ladder did.”
3 Before you take your job and shove it:
4 ◆ Do extensive research on businesses and industries that
5 appeal to you.
6 ◆ Speak to as many entrepreneurs as possible to get a sense of

7 what it’s really like.
8 ◆ Assess your family savings.
9 ◆ Make sure you have the support of your spouse or significant
10 other.
11 ◆ Know that starting or buying a business is extremely stressful.
12 ◆ Know that things usually take three times as long and will
13 cost you at least twice as much as you expected.
14
15
16
Create an Informal Advisory Board
17 G R E AT the largest companies in the world have
18 all sorts of advisory boards, but entrepreneurs are
19 8 often reluctant to ask outsiders for help.
20 I D E A An advisory board made up of industry leaders,
20
21 deep thinkers, cutting-edge colleagues, and experts can steer
22 you and your company through the choppiest waters—at

23 very little cost.
24 Unlike a board of directors, which has legal and fiduciary
25 responsibilities, advisory boards can be set up as formally or
26 as informally as you like. You should offer to pay people a
27 modest sum, perhaps $500, to attend one meeting every
28 quarter or at least twice a year.
29 Years ago I served on a small business advisory board
30 created by the American Express Corporate Card group.
31 About a dozen movers and shakers in the small business
32 world met once or twice a year to brainstorm about new
33 products and services, review existing products, and share
34 our insights with company executives.
35 When the stock was soaring, we met in luxury hotels
36 around the United States and were paid honoraria of about
37 $1,000. After the opening-night dinner at one hotel, we
38 found fluffy bathrobes and warm chocolate chip cookies and
39 milk waiting in our rooms. A few years later, when Amex
went through some belt-tightening, the meetings were held 1
at a hotel across from their corporate headquarters in down- 2
town New York City. 3
I’m not saying you have to fly people around the country 4
and put them up in fancy hotels to obtain free or affordable 5
advice. No matter where we met, we provided good consult- 6
ing services for very little money. As board members, we did 7
a lot of networking, learned about each other’s companies 8
and organizations, and enjoyed some very lively discussions. 9
If you are in a manufacturing company, for instance, try 10
to assemble a board with representatives from your major 11
suppliers, a marketing expert in your field, a retired execu- 12
tive with experience in your industry, and perhaps your 13
accountant or attorney. 14
Create an agenda, depending upon what you need to 15
focus on at that time, but always start with a quick overview 16
of what’s happening at the company. Provide the details in 17
writing, including a current balance sheet, new company 18
brochures, and anything else that you think your advisers 19
need to know. 21 20
After you’ve presented the facts, sit back and listen to their 21
comments. Rely on your “kitchen cabinet” to keep you hon- 22
est. They will certainly have a different perspective on your 23
situation and often come up with objective solutions. 24
Look for advisers who will help you take the pulse of your 25
industry and monitor your competition. There’s nothing bet- 26
ter than feeling supported by a group of people who believe 27
in what you’re doing. 28
We have always relied on a core group of advisers to keep 29
SBTV Corp. on track. My uncle, Steve Coan, a retired partner 30
in a major Wall Street brokerage, is one of the smartest peo- 31
ple I know. He’s a whiz with numbers and terrific with per- 32
sonnel problems. 33
One of my best friends, Kathy Taggares, is one of the 34
savviest business people I’ve ever met. She’s my strategic 35
adviser. Although she isn’t an expert on the news business, 36
she is incredibly street smart, and I never negotiate a deal 37
without her input. 38
Andrew Hurwitz, a dear friend who is a highly respected 39
1 entertainment lawyer, has been steering me in the right
2 direction since we founded SBTV (Small Business TV) in
3 2000. For television production challenges I turn to Isabella
4 Rupp, a veteran director.
5 My husband, Joe, my most trusted adviser, tackles the
6 toughest problems. He’s the ethical director, responsible for

7 weighing the ramifications of every project we accept. Be-
8 cause I’m a working journalist, it’s imperative that none of
9 our other projects conflict with my day-to-day responsibilities
10 to serve small business owners.
11 Whereas this kind of informal kitchen cabinet is essential,
12 you might also consider establishing a customer advisory
13 board. Dr. Tony Carter, a professor of sales and marketing at
14 Columbia University’s Graduate School of Business, sur-
15 veyed seventy Fortune 500 companies. He found that twen-
16 ty-one of the companies surveyed had customer advisory
17 boards, and nineteen of those twenty-one said they were
18 extremely useful.
19 For example, both Swissötel and Avis Rent-a-Car created
20 22 women’s advisory boards to help tap into the growing
21 women’s travel market. Based on recommendations from its
22 board, Swissötel has offered special services to women busi-

23 ness travelers. They offered good seats in restaurants serving
24 lighter, healthier spa-style cuisine, and the health clubs have
25 extended their hours of operation to fit the women guests’
26 busy schedules. According to Susan Stautberg, a New York
27 City consultant who helps companies create advisory boards,
28 Avis is also trying to make women feel more welcome by
29 lowering sections of the check-out counters and making the
30 office areas bigger.
31 “Avis wants to stay ahead of where the customer has
32 gone,” said Ron Masini, vice president of product develop-
33 ment. “If we hadn’t used the women’s advisory board as part
34 of our process, we would have missed some important hot
35 buttons regarding the best way for Avis to serve the female
36 business traveler.”
37 So think about inviting some savvy experts and customers
38 to provide invaluable advice to you and your staff. It will be
39 money well spent.
1
MoveYour Business to an Incubator 2
G R E AT
if you think incubators are just for chicks, 3
think again. Incubators offer entrepreneurs orches- 4
9 trated business support, including mentoring, financ- 5
I D E A ing programs, and a mix of compatible neighbors. 6
There are about 900 business incubators in forty-eight 7
states, according to Dinah Adkins, executive director of the 8
National Business Incubation Association, in Athens, Ohio. 9
Ron Scovil, cofounder of Mixx Entertainment, moved into 10
an incubator on the University of Southern California cam- 11
pus in 1997. “We hope to become a full-fledged film produc- 12
tion company,” said Scovil, who received start-up funds from 13
Mitsui Venture and Nippon Venture in Japan. 14
15
Researching an incubator 16
17
BEFORE YOU MOVE into an incubator, use this checklist 18
to collect important information. Be sure to visit the incuba- 19
tor a few times to speak with current tenants. Ask them to 23 20
speak candidly and call them back if the director or staff 21
person refuses to let you speak with them privately. Don’t 22
move in until you get thorough answers to the following 23
questions: 24
◆ How long has the incubator been in operation? 25
◆ What kinds of businesses have occupied space in the incu- 26
bator? 27
◆ How long do most businesses stay? 28
◆ What are some of the incubator’s success stories? 29
◆ What specific services and support does the incubator 30
offer tenants? 31
◆ Does the incubator intend to take equity in the businesses 32
it houses? 33
◆ What financial resources are available to tenants? Access 34
to loans? Introductions to private investors? 35
◆ Are there any hidden fees or charges? 36
◆ How long do you have to stay? Can you move out sooner 37
if your business grows too fast or fails to grow? 38
39
1 Egg Company 2, or EC2 as it is known at USC, has meet-
2 ing spaces, offices, and an array of expensive, high-tech
3 equipment, including AVID video editing systems. Scovil
4 and his employees take advantage of the equipment, increas-
5 ing their ability to grow.
6 “The most vital things about the incubator are the consul-
7 tations and the meetings,” said Scovil. “You save money on
8 professional services. The people here are like angels with a
9 lot of contacts.”
10 Scovil admits that “the screening process to land a spot at
11 EC2 was pretty intense. We found out about this incubator
12 from a friend who was one of the people who set up the
13 high-tech equipment,” he said. “We were trying to figure out
14 our vision, and it just meshed with what Egg was doing.”
15 While many incubators are hatched on college campuses,
16 some are privately funded ventures. Foundation Capital in
17 Menlo Park, California, for instance, invested $1 million on
18 idealab!, a Pasadena incubator for Internet companies. ideal-
19 ab! attracted the funding in part because it was founded by
20 24 Bill Gross, a veteran software entrepreneur.
21 To find out more about business incubators, check out the
22 National Business Incubation Association’s website at

23 www.NBIA.org.
24
25
26
Overcome a Fear of Public Speaking
27 JOIN TOASTMASTERS
28 G R E AT many entrepreneurs have to be the company
29 spokesperson, whether they like it or not. While pub-
30 10 lic speaking can be terrifying, knowing how to make
31 I D E A a clear, concise presentation can mean the difference
32 between financial success and failure for many small firms.
33 You might want to join a group that has helped more than
34 three million people around the world overcome their fear of
35 speaking during the past seventy-five years.
36 Toastmasters International, founded by Ralph C. Smedley
37 in the basement of the YMCA in Santa Ana, California, is
38 that group. This self-help organization for people who feel
39 nervous about speaking in public has 8,100 chapters around
the world. In recent years, Toastmasters, with about 170,000 1
worldwide members, has helped many technically oriented 2
people feel at ease in front of a crowd by using its positive, 3
peer-counseling approach. 4
Well-known companies, including Bergen Brunswig, 5
Fluor Corp., and Rockwell International, host Toastmaster 6
meetings in their offices to make it easy for managers to 7
attend. Joining Toastmasters is easy and affordable. Most 8
chapters are listed in the telephone book. Annual dues are 9
$36; chapters usually charge another $16 for materials. 10
If you can’t get to Toastmasters or afford to hire a speak- 11
ing coach, there are some excellent books on the topic. 12
◆ Effective Presentation Skills: A Practical Guide for Better 13
Speaking, by Steve Mandel (Crisp Publications; 2000), fea- 14
tures a simple workbook format. It begins with tips for 15
reducing anxiety, including deep breathing and visualization 16
techniques, and ends with a checklist to help you prepare for 17
a presentation. 18
◆ Managing Your Mouth: An Owner’s Manual for Your Most 19
Important Business Asset, by Robert L. Genua (American 25 20
Management Assoc.; 1993), is a lively, practical guide to 21
becoming a good speaker and a good listener. Genua, vice 22
president and general manager of a patent information ser- 23
vice, provides great tips, including when saying nothing is 24
better than saying the wrong thing. 25
◆ Speak and Grow Rich, by Dottie and Lilly Walters (Prentice 26
Hall Press; 1997), is a classic for professional speakers and 27
wannabes. If you find that you actually love speaking and 28
want to pursue it as a career, buy a copy. The Walters, a 29
mother-daughter team who run a speakers bureau, explain 30
in detail how to establish yourself as a professional speaker, 31
including how to market your services and command 32
big fees. 33
34
35
36
37
38
39
1
2
Find a Mentor
3 G R E AT although finding a mentor seems like a
4 good idea, actually making the connection can be
5 11 intimidating, especially for people who are reluctant
6 I D E A to admit they need help. But a mentor can steer you

7 around the potholes and buoy you up when you are drown-
8 ing in confusion. A series of mentors have played a signifi-
9 cant role throughout my career as a journalist and entrepre-
10 neur. It’s worth the effort to hook up with someone you
11 admire—and someone who admires you.
12 My first mentor was Dr. James Julian, a journalism pro-
13 fessor who taught media law at San Diego State University.
14 He was tough, demanding, and terrifying. He peppered us
15 with complicated legal concepts and rattled us with eye-
16 crossing exams. One day he abruptly stopped his lecture to
17 reprimand me for whispering to a friend. He ordered me to
18 meet him in his office right after class. I was mortified.
19 Instead of yelling at me for disrupting the class, he handed
20 26 me an application for a national student journalism contest
21 and insisted I complete it. I did.
22 A few months later, when we were flying to Buffalo, New

23 York, to accept the award, I realized that I had met my first
24 mentor. For many years, he critiqued my work, pushed me
25 to work harder, and praised my accomplishments. We kept
26 in touch until he died.
27 Over the years, I’ve sought out a variety of mentors to help
28 me overcome a number of professional and personal obsta-
29 cles. I’ve looked for people who are much further down the
30 path I want to travel. I seek out people whose accomplish-
31 ments inspire me—people who lead lives of purpose and ful-
32 fillment.
33 Sometimes the best mentor you can find is in a totally dif-
34 ferent field from yours. One of my mentors, a successful
35 business person, is involved in national politics.
36 Once, when I was embroiled in a sticky political battle sur-
37 rounding a major project, I found that my mentor’s view of
38 the situation was far different from mine. He listened to my
39 version of the facts, asked questions about all the key players
involved, and explained how I could make some radical 1
changes without further bruising the egos of the people I 2
was brought in to help. His approach to crossing this politi- 3
cal minefield was critical to the success of the project. 4
You’re probably reading this and thinking, well, perhaps 5
it’s easy for Jane Applegate to find mentors—but what about 6
me? There are mentors to be found in every corner of Amer- 7
ica. No matter how small your town is, there is someone 8
around whom you admire, someone who is living the kind 9
of life you would like to lead. 10
Writing a simple note or making a telephone call is the 11
first step. Tell the person that you admire what they’re doing 12
and say you would like to meet for a few minutes. Don’t 13
frighten them by saying, “I want you to be my mentor.” 14
Busy, successful people won’t always have time for a long 15
lunch, but they might have time for a quick chat on the 16
phone or a cup of coffee near their office. If the mentor you 17
choose turns you down, try someone else. It’s worth making 18
the connection. 19
27 20
21
Organize a Company Retreat 22
G R E AT an annual or semiannual retreat is an 23
excellent way to measure the pulse of your business 24
12 and keep storm clouds from brewing. 25
I D E A You don’t have to book a Caribbean cruise, rent a 26
fancy hotel suite, or even get on a plane to host this event. 27
You can use the back room of a local restaurant, sit around a 28
picnic table in the park, or go to someone’s home. Hire a 29
temp to answer your phones for the day. Tell customers and 30
clients about the retreat. Believe me, they’ll be very 31
impressed. 32
A few years ago, after we landed a major radio show con- 33
tract, I flew the key members of my team—all three of 34
them—to Tucson for the weekend. We held meetings at the 35
spa, brainstormed at the pool, ate good food, and had some 36
fun along the way. 37
It is best to bring in an outside facilitator, but if you can’t 38
afford it and have to act as discussion leader, that’s OK, too. 39
1 The most important part of the retreat happens long
2 before you leave the office. Sit down and decide exactly what
3 you want to accomplish. You need to look back at what’s
4 been happening, evaluate current accounts and policies, do
5 some troubleshooting, and specify future plans.
6 Be sure to create an agenda with space for notes.

7 Use flip charts or a write-on board to summarize the
8 information and key points. Then open the meeting up to
9 discussion. Go around in a circle to encourage participation.
10 After you discuss where you’ve been, tackle what’s work-
11 ing and what’s not. For example, my colleagues gently told
12 me that my micromanaging was making them crazy. They
13 couldn’t do the work I asked of them because I was constant-
14 ly inquiring as to their progress. This was important criti-
15 cism, and once I realized what I was doing wrong, I forced
16 myself to let go to become a better manager.
17 It’s important to thrash out the little annoying things that
18 get in the way of work and to set specific goals for the future.
19 It also helps to divide goals into short-term and long-term
20 28 categories. Some things, like sending collection letters to
21 clients, can be accomplished in a week; other jobs may take a
22 month or even a year. The most important thing is to reach

23 consensus. Make sure everyone agrees on reasonable dead-
24 lines. Give everyone a calendar and make sure it has room
25 for notes as well as dates.
26 Spend time at the end of the day brainstorming and doing
27 some free association. Remember to inject humor into the
28 discussion, especially if you are dealing with serious issues.
29
30
31
Create a Smarter, Safer Workplace
32 G R E AT being aware of ways to create a smarter,
33 safer workplace can improve health and morale, and
34 13 enhance your bottom line. The Environmental Pro-
35 I D E A tection Agency estimates that, every year, indoor air
36 pollution costs U.S. businesses about $1 billion in medical
37 bills and $60 billion in lost productivity.
38 For ideas on a smarter workplace, I turned to Maryland-
39 based researcher/writer Amy Townsend, author of The
Smart Office: Turning Your Company on Its Head (Gila 1
Press; 1999). She is director of Sustainable Development 2
International Corp., in Olney, Maryland, which works with 3
governments and organizations on sustainable development 4
strategies. Her comprehensive book has hundreds of ideas 5
and resources for business owners interested in cleaning up 6
their act. 7
Here are some great ideas you can implement without 8
spending a lot of time or money: 9
◆ Design/landscaping. If you are building a new office, make 10
sure your architect orients the building to take advantage of 11
natural light to reduce lighting bills. Try, too, to design a 12
building that cuts down on unnecessary heating or cooling 13
expenditures. 14
Try to landscape with native plants that require less water 15
and suit your climate. Try to avoid the use of chemical pesti- 16
cides and fertilizers to protect the local water supply. 17
◆ Building materials. If you are building or retrofitting your 18
office, avoid building materials that create indoor pollution. 19
Avoid pressed wood products that are glued together or 29 20
treated with formaldehyde or other toxins. Be sure your build- 21
ing is well insulated with recycled, nontoxic materials. Look 22
for materials with a high R-value; the higher the number, the 23
better the insulating properties. For example, use double- 24
pane windows with a high R-value to avoid air leakage. 25
◆ Lighting. Take advantage of sunlight whenever possible. 26
Turn off the lights when they aren’t being used and replace 27
incandescent bulbs with compact fluorescent ones. 28
Try to use local, “task” lights rather than general overhead 29
lighting. Install light sensors that turn lights on when you 30
enter a room and dimmers to allow lighting flexibility. 31
Contact your local utility company for help in creating bet- 32
ter lighting at work. Be sure to ask about rebates and other 33
financial incentives available to business owners. The EPA 34
also has a “GreenLights” program that provides ways to 35
improve your lighting efficiency. 36
Keep computers out of direct sunlight to avoid glare and 37
tilt monitors away from the window. Buy blinds with silver 38
on one side to reflect sunlight. Whenever possible, install 39
1 glass along the tops of office partitions to allow light to filter
2 through the office.
3 ◆ Equipment. Be sure to purchase “Energy Star-rated”
4 copiers, computers, and other equipment that “power down”
5 when you aren’t using them. Use laptop computers rather
6 than desktop models to allow more flexibility.

7 Try to use both sides of copier paper for documents. Buy a
8 plain paper fax, because thermal paper is expensive and can’t
9 be recycled. To save money, time, and paper, use e-mail
10 whenever possible.
11 If you are buying a refrigerator for your office, check out
12 the Energy Efficiency Rating (EER) and operating costs. Pur-
13 chase a model that doesn’t rely on chlorofluorocarbons
14 (CFCs) to operate, because these chemicals deplete the
15 ozone layer.
16 ◆ Office supplies. Whenever possible, buy nontoxic high-
17 lighters, correction fluid, and dry-wipe markers. Buy recycled
18 paper folders, notebooks, pencils, and pens.
19 Consider using 100 percent recycled paper for everything
20 30 from your printing to restroom needs. Reuse office paper for
21 scratch paper and eliminate fax cover sheets whenever possi-
22 ble. Recycle all the paper you can: white paper, newsprint,
23 and cardboard. Townsend says it takes one-third less gross
24 energy to make one sheet of recycled paper compared to vir-
25 gin paper.
26 ◆ Recycling programs. Paper is not the only office supply that
27 can be easily recycled. Recycle everything you can. One com-
28 pany’s waste is another company’s treasure. You can recycle
29 carpets, CD-ROMs, computer batteries, computers, printer
30 cartridges, construction-site waste, floppy disks, glass, light-
31 bulbs, holiday cards, light ballasts, and packing materials.
32 The Association of Foam Packaging Recyclers operates more
33 than forty-five recycling centers around the United States.
34 Check the phone book for the center closest to your office.
35 ◆ Telecommuting/transportation. Encourage your workers to
36 carpool, bike, or use public transportation. Try telecommut-
37 ing at least one day a week to save time and fuel.
38 Townsend’s book is available from Gila Press: P.O. Box
39 623, Olney, MD 20830; (800) 959-0917.
1
Think Ergonomically 2
INVEST IN GOOD OFFICE FURNITURE 3
G R E AT i’m usually the last one to urge any 4
entrepreneur to spend money on office trappings. In 5
14 my previous life as a white-collar crime reporter, I 6
I D E A quickly learned the glitzier the office, the worse the 7
criminal who worked there (see Great Idea 69). 8
But with repetitive-motion injuries costing U.S. business 9
owners an estimated $100 million in lost productivity and 10
millions more in workers’ comp each year, it’s important to 11
make sure you and your employees are sitting on the right 12
kind of chairs behind the right desks. 13
If you work in California, you have to comply with a vari- 14
ety of ergonomic regulations. As onerous as it sounds, pro- 15
viding a comfortable workplace is becoming mandatory, 16
no matter where you live and work. In 1999, federal statis- 17
tics showed there were 246,000 cases of repeated trauma 18
disorders affecting workers from white-collar executives to 19
meatpackers. 31 20
“The most important investment you can make is in a 21
chair with adjustable lumbar support and height features,” 22
said Mark Dutka, founder of In House in San Francisco, a 23
design firm specializing in home office furniture. His per- 24
sonal favorite is the Herman Miller “Aeron” chair, which 25
retails for about $1,150. 26
Rebecca Boenigk, chief executive officer and chairman of 27
Neutral Posture Inc. in Bryan, Texas, is very familiar with 28
good office chairs. Her father, Dr. Jerome Congleton, is a 29
national expert on ergonomics and designer of the com- 30
pany’s adjustable chairs. 31
“If you don’t have proper support, you’ll go home hurt- 32
ing every day,” said Boenigk. “We want you to change 33
the position of your chair all day long and make it easy 34
to do so.” 35
Recognizing that too many expensive chairs are not 36
properly used, her company sends out a videotape and 37
instruction booklet with every chair. They also have an 38
animated computer software program that explains how 39
1
2 How to gear up ergonomically
3
4 ◆ Hire an ergonomics consultant to review your office.
5 ◆ Determine what equipment you need to reduce back and
6 wrist problems.
7 ◆ Start by buying the low-budget items: back support pil-
8 lows, wrist rests for keyboards, foot stools, copy holders,
9 and good lighting.
10 ◆ Work your way up to complete workstations and expen-
11 sive chairs.
12 For a serious look at how ergonomics affects your bottom
13 line, read The Right Fit, by Dr. Clifford Gross, director of the
14 Center for Product Ergonomics at the University of South
15 Florida in Tampa. The book is published by Productivity
16 Press: P.O. Box 13390, Portland, OR 97213-0390; 503-
17 235-0600 (1996).
18
19 to operate Neutral Posture chairs.
20 32 “Some people think a $200 chair is expensive,” she said.
21 “But the chair is the most important part of the workstation.”
22 Boenigk said a minor carpal tunnel injury, caused by

23 too much typing or repetitive wrist movement, can cost a
24 company $12,000 in medical treatment and physical
25 therapy. A serious injury can run into hundreds of thou-
26 sands of dollars.
27 The market for comfortable office chairs is fueling the
28 industry. There are about 100 ergonomic chair makers, with
29 big companies like Steelcase selling $400 million worth of
30 equipment a year.
31 Neutral Posture, with its $14 million in sales, is a small
32 player, but it’s working closely with good distributors
33 around the United States. Neutral Posture’s seventy-five
34 employees make more than chairs. They also make a
35 portable workstation for laptop computers which lets the
36 user stand or sit.
37 Preventing repetitive stress injuries by providing good
38 office furniture makes economic (and ergonomic) sense.
39
1
MakeYour Meetings More Productive 2
G R E AT in this high-tech era, it’s a bit surprising 3
to learn that face-to-face meetings are still the most 4
15 popular form of business communication. In fact, 44 5
I D E A percent of executives surveyed by Office Team, an 6
office staffing service, said they preferred to meet with peo- 7
ple in person. E-mail ranked second, with 34 percent; paper 8
memos, 12 percent; and voice mail, 7 percent. 9
Still, so many meetings drag on and accomplish very 10
little. “In these days of rapid change, time is precious, and 11
you can’t afford to waste it in meetings,” said Dr. Mark 12
Goulston, a Santa Monica psychiatrist who works with 13
both big and small companies to solve all sorts of people 14
problems. 15
One of Goulston’s most effective tips is to plan a quiz for 16
the end of a meeting. “We ask whether everyone really 17
understands what was discussed,” said Goulston, and also 18
“what are you going to do differently and why.” 19
This system, he says, avoids “collusion” between meeting 33 20
leaders and participants who sometimes just pretend to be 21
listening or interested—or, worse yet, agree with their bosses 22
just to gain favored-employee status. There are no right or 23
wrong answers to the “quiz.” Sometimes the person won’t 24
suggest any changes but will be asked to justify his or her 25
position to colleagues. Goulston says that “The purpose of 26
the quiz is not to shame or embarrass anyone, but to make 27
sure everyone is on the same page,” he said. 28
He said his method works especially well for new compa- 29
nies where people are more open to this unconventional 30
meeting structure. But you can certainly try this to revitalize 31
the meetings that put you to sleep. 32
Here are some of his other tips to make your meetings 33
more productive: 34
◆ Schedule meetings just before lunch so people will act quickly. 35
◆ Send out an agenda before the meeting. 36
◆ Invite the fewest number of people necessary. 37
◆ Only meet when absolutely necessary. 38
39
1
2 Never Work with Anyone Who Gives
3
4
You a Headache or a Stomachache
5 if i had a motto, this would be it.
G R E AT
6 Life is too short to work with people who make you
7 16 miserable. This isn’t emotional hogwash. You can’t
8 I D E A do your best work when you hate the person manag-
9 ing you or the project.
10 I know. I’ve tried. Without naming names, I’ll share a
11 quick story. A very big company interested in selling its ser-
12 vices to entrepreneurs asked me to come up with some good
13 ideas to get them started.
14 I came up with a concept the company believed was a win-
15 ner. My former partner and I wrote a formal proposal for
16 funding. After months of “yes, it’s happening,” then, “no, it
17 isn’t,” we were awarded a six-figure contract.
18 But it wasn’t time for champagne. During the rocky
19 negotiations, I realized that while my idea was embraced
20 34 by the top brass, his second in command hated it. Why?
21 Because it was “not invented here” (see Great Idea 1). The
22 guy felt obligated to manage my project because his boss

23 told him to, but he hated it from day one and began to sab-
24 otage it.
25 He hired another consultant to manage my consulting
26 contract. He added layers of bureaucracy, second- and third-
27 guessing everything we did. In short, he made it nearly
28 impossible for us to function. I had a headache and a stom-
29 achache every day for nearly two years!
30 Despite all the roadblocks, we pulled it together and were
31 ready to launch the new service. But then the marketing
32 campaign went south. They wrote a few lines about it in a
33 company newsletter and dropped the ball there. Instead of
34 printing up a full-color brochure as promised, they told me
35 to create something on my PC and “take it to Kinko’s.” This
36 was a company with a $200 million advertising budget!
37 That’s when I pulled the plug.
38 When it was finally over, I felt as if I had been run over
39 by a truck. Not only was I losing my mind, but I had lost
thousands of dollars of my own money providing products 1
and services to my ungrateful client. 2
I swore I would never work with people like that again, 3
and I haven’t. I admit, I’ve had some unpleasant encounters 4
with clients since then, but I always move quickly to resolve 5
the difficulties and clear the air. 6
No amount of money is worth the pain. Success will 7
evade you if you are working in a poisoned atmosphere. So 8
think about the people you are dealing with today, this 9
month, and this week. Do they make you ill? If they do, fire 10
them. Or quit. 11
Do it. You’ll be glad you did! 12
13
14
Meet Clients in Public Places 15
G R E AT the greatest thing about working at home 16
is that by keeping your expenses low, you can spend 17
17 more money on high-tech, high-productivity office 18
I D E A equipment, travel, and entertainment. But of course 19
there are some drawbacks to this arrangement. 35 20
Most home offices lack an appropriate space or place to 21
meet with a client, vendor, or business colleague. If kids, 22
dogs, and relatives preclude you from inviting a business 23
associate to your home, and you can’t meet in their office, 24
don’t panic: Make reservations. 25
No matter where you live, you can find an elegant 26
restaurant or hotel lobby to host a meeting. Be sure to 27
check out the location before you schedule the appoint- 28
ment. Make sure it’s easy to park, or better yet, look for a 29
place with valet parking. 30
Reserve a quiet table far from the kitchen. Make it very 31
clear to the maitre d’ that your meeting is very important to 32
your professional life. When you arrive and are shown to 33
your table, be sure to give the maitre d’ a generous tip ($10 34
to $20). 35
If there isn’t time to share a meal, invite your client to 36
high tea at a luxury hotel. Late afternoon is an excellent time 37
for a leisurely business meeting because it doesn’t interfere 38
with lunch or dinner plans. 39
1 If you or your client prefers to skip the food and drinks,
2 meet in a secluded section of a fine hotel lobby. I have had
3 many productive meetings in a quiet corner of a lobby.
4 Meeting important customers or clients in a public place
5 is a wonderful solution for home-based entrepreneurs. Just
6 be sure you pick the right place.

7
8
9
Do Something about Your Stress Level
10 G R E AT the entrepreneurial lifestyle is STRESSFUL .
11 And, just as you manage your time, you need to learn
12 18 how to manage stress. It’s important to your personal
13 I D E A health, and to the health of your business, to maintain
14 high energy and high spirits.
15 Dr. Mark Goulston, one of my favorite psychiatrists,
16 sent along this stress quiz to help you gauge your stress
17 level.
18
19 Circle all the items that apply to you. Add up the number
20 36 of items circled and check your score at the end.
21 1 I find myself less eager to go back to work after a weekend.
22 2 I feel less and less patient and/or sympathetic listening to

23 other people’s problems.
24 3 I ask more “closed” questions to discourage dialogue with
25 coworkers than “open” questions to encourage it.
26 4 I try to get people out of my office as rapidly as possible.
27 5 I don’t think other people take enough personal responsibility
28 for their problems.
29 6 I am getting tired of taking responsibility for other people’s
30 problems.
(COPYRIGHT © 1997: THE GOULSTON GROUP)
31 7 My work ethic is getting worse.

32 8 I am falling further behind in many of the responsibilities in
33 my life.
34 9 I am losing my sense of humor.
35 10 I find it more and more difficult to see people socially.
36 11 I feel tired most of the time.
37 12 I don’t seem to have much fun at work anymore.
38 13 I don’t seem to have much fun outside of work, either.
39 14 I feel trapped.
15 I know what will make me feel better, but I just can’t push 1
myself to do it. 2
16 Even if what you have to tell me makes sense, I’ll still prob- 3
ably say, “Yes, but.” 4
5
Total items marked: 6
S C O R I N G : 7
0–4 More exhaustion than stressed out 8
5–8 Beginning to stress out 9
9–12 Possibly stressed out 10
13–16 Probably stressed out 11
12
one of the good things about stress is that you have 13
the power to deal with it. The bad thing is, if you don’t get rid 14
of it, it can do serious harm. 15
Take it from me: Not dealing with stress can ruin your 16
health. In the spring of 2001, I caught a flu bug but just kept 17
going. Work was stressful, and I was deep into revising this 18
book. It was also March, the month in which our eldest 19
daughter, Julie, had died after open-heart surgery in 1986. 37 20
She was 41/2 and loved life. 21
Every March is rough, no matter how many Marches 22
we’ve been through since her death. Anyone reading this 23
who has lost a child knows you never get over it, no matter 24
how wonderful your life turns out to be after your loss. 25
Although I knew March is a killer month, I refused to get 26
into bed and rest. I kept going until I collapsed. Apparently, 27
the virus moved into my central nervous system and did 28
everything it could to shut me down. I had terrible 29
headaches. Light hurt my eyes. I couldn’t eat. I was so weak I 30
could barely get out of bed. I was tested for pneumonia, 31
meningitis, and bronchitis. All negative. I had blood tests, 32
X-rays, and electrocardiograms. Nothing. My doctor was 33
relieved, but it didn’t help me get well any sooner. I was done 34
in by a combination of flu and stress, and it took more than 35
two months to get my strength back. 36
So here’s my sage advice: Devote at least one hour a day to 37
yourself. It doesn’t have to be a full hour. For instance, read 38
the newspaper over a cup of tea in the morning and take a 39
1 nap in the afternoon. Or meditate in the morning and run a
2 few miles after work. It doesn’t matter what you do as long
3 as it makes you happy.
4 No matter how busy and important you are, take one hour
5 a day for yourself. It will be the best investment you’ll make
6 today and going forward.

7 And if you still feel seriously stressed out much of the
8 time, speak with your physician and decide how you can
9 make a change for the better.
10
11
12
Work the Phones or Walk the Floor
13 G R E AT elaine petrocelli, co-owner of book
14 Passage in Corte Madera, California, was named
15 19 bookseller of the year in 1997 by Publishers Weekly.
16 I D E A She’s done many things to deserve the honor,
17 including battling nearby chain stores head-on and contin-
18 ually emphasizing customer service. Book Passage hosts
19 hundreds of classes, author events, and workshops every
20 38 year. They keep in close touch with 40,000 active cus-
21 tomers via newsletters and many more via their website:
22 www.bookpassage.com.
23 Petrocelli shared one great idea that anyone who owns a
24 retail store or small business should try: Work on the floor.
25 “The company execs are scheduled like everyone else to get
26 out and sell books,” said Petrocelli. “Everyone here has been
27 on the floor as a bookseller.”
28 Covering the lunch hour while your employees take a
29 break is a great way to stay in touch with the front line of
30 your business. Sit in for the receptionist and answer the
31 phone. Don’t make a big deal out of it. Just roll up your
32 sleeves and be the best employee you can be.
33 “We had a marketing meeting, and so much of the infor-
34 mation came from people saying, ‘when I was on the floor
35 yesterday …’ ” said Petrocelli. You’ll be surprised how much
36 valuable insight can be gained by working directly with your
37 consumers. It might even provide you with the ideas and
38 ammunition you’ve been searching for to put you ahead of
39 your competition.
1
Join a Business Owners’ Support 2
3
Group—There’s Strength in Numbers 4
G R E AT entrepreneurs have a very tough time 5
admitting they need help. But the smartest entrepre- 6
20 neurs I know aren’t too proud to seek outside counsel 7
I D E A and objective perspective. 8
There are many groups set up to function as self-help or 9
peer counseling groups for troubled business owners. San 10
Diego–based The Executive Committee or TEC, as it is 11
known, has been around since 1957. Until recently, it 12
focused mainly on big business, but now the group has a 13
program for smaller companies—organizations that have 14
been in business for three years or more with at least $3 mil- 15
lion in revenues and twenty-five employees. 16
The by-invitation-only organization created the “TEC for 17
Emerging Entrepreneurs” program with more than 200 18
members in thirteen states. Each group includes no more 19
than fourteen CEOs from noncompeting industries who can 39 20
afford to spend $5,400 a year on peer support. For more 21
information on TEC, phone 800-274-2367. 22
There are many other groups out there that provide peer 23
support and motivation for busy entrepreneurs. Joining 24
your local chamber of commerce is a good place to start. Be 25
sure to attend the monthly mixers and get to know as many 26
members as possible. For more information visit the Cham- 27
ber of Commerce of the United States website (www. 28
uschamber.org ). 29
Be sure to join a trade or professional association to con- 30
nect with colleagues and competitors. I belong to several 31
journalistic groups, and their publications keep me up-to- 32
date on what’s happening in my profession. 33
Women business owners can join the National Associa- 34
tion of Women Business Owners (www.NAWBO.org), 35
which has chapters around the country. Chapters of the 36
Women Presidents’ Organization (www.womenpresidents 37
org.com) provide peer counseling, educational events, and 38
an annual conference. 39
1 Minority business owners can also contact the National
2 Association of Minority Contractors (www.namconline.org),
3 the U.S. Hispanic Chamber of Commerce (www.ushcc.com),
4 or the National Black Chamber of Commerce (www.national
5 bcc.org).
6 Franchise owners should consider joining the Interna-

7 tional Franchise Association. For more information go to
8 www.franchise.org.
9
10 Create a “Roundtable”Editorial
11
12
for a Trade Publication
13 G R E AT veteran public relations counsel harriett
14 Ruderman dreamed up this great idea for her clients:
15 21 “You get companies together in a group to discuss a
16 I D E A key issue in a specific industry,” she explained. Then
17 you submit the story to a trade publication.
18 Ruderman, based in Port Washington, New York, said
19 hosting the roundtable is a “very good method of gaining
20 40 respect and visibility within your industry. It’s good for an
21 up-and-coming organization or small company that wants to
22 put itself on the map.”

23 She suggests scheduling the discussion during a trade
24 show or conference where all the players and the press are in
25 attendance. Rent a quiet conference room and serve refresh-
26 ments to keep everyone happy and full of energy. Make sure
27 the conversation covers several key, even controversial,
28 issues and tape-record it with good equipment for easy tran-
29 scription.
30 “The roundtable discussion becomes the story,” said
31 Ruderman, adding that six to eight participants is the ideal
32 number. “If it’s done well, it always turns out to be a great
33 story, and it will cement your relationship with the publi-
34 cation.”
35 What better way to get your name in print, brand yourself
36 as an industry leader and, at the same time, network with
37 other companies in your field?
38
39
1
Get Help from a Restaurant Consultant 2
G R E AT isidore kharasch is a skilled chef, but 3
most of his clients don’t even know he can cook. “I’m 4
22 more comfortable managing the business end of a 5
I D E A restaurant,” said Kharasch, president of Hospitality 6
Works, a Chicago restaurant consulting and turnaround 7
company. 8
He’s a very busy guy. About 27 percent of all restaurants 9
fail after the first year, and 60 percent close down after five 10
years, according to researchers at Cornell and Michigan State 11
University. 12
About half of his clients own struggling restaurants. The 13
other half are thinking of going into the restaurant business 14
and need expert help. 15
“Our goal is to either have you committed to doing it or 16
abandoning it,” said Kharasch, who charges about $175 an 17
hour. “I teach people how to take general costs, like rent, and 18
then figure out gross sales.” 19
He once helped a couple that was ready to invest $1 mil- 41 20
lion in a pastry shop in downtown Chicago. “By the end of 21
the evening, I showed them that they would need to have 22
600 people spending $7 per person, seven days a week, for 23
them to make any money,” said Kharasch. “They were ready 24
to sign a lease, but they spent $800 for one night with me 25
and walked away with their $1 million.” 26
He said there are many reasons a restaurant fails. Leading 27
the list are poor design, poor location, overstaffing, and no 28
cost controls. 29
Kharasch does enjoy many successes, too. When we spoke, 30
he was on a two-month contract at $2,500 a month to help a 31
troubled restaurateur. “We found $300 a week in misspent 32
dollars right away, which pretty much paid our entire tab for 33
the consulting,” he said. 34
In fact, he said his clients usually save between ten and 35
twenty times the amount of money they spend with his firm. 36
He now has three full-time and twelve part-time restaurant 37
experts on his team and is working in twenty-three states 38
and abroad. 39
1
2
3
Kharasch’s tips for restaurant
4 owners
5
6 ◆ Reduce the number of managers you hire by reorganizing

7 your schedule.
8 ◆ Make sure the kitchen is designed to let the chef easily
9 supervise cooking and to get the food out to customers
10 fast.
11 ◆ Make sure your menu is easy to understand, and promote
12 high-margin items like appetizers and desserts.
13 ◆ Insist bartenders measure the alcohol they pour.
14 Bartenders who pour using guesswork “drain a restaurant
15 of profit.”
16 ◆ Be sure your staff is well trained and motivated to provide
17 good, friendly service.
18
19 “Izzy conducted a search for us and hired our chef and
20 42 general manager,” said the manager of O’Grady’s in Arling-
21 ton Heights, Illinois. “He also made drastic revisions to our
22 kitchen design.”
23 Kharasch’s reputation for improving customer service
24 is spreading beyond the hospitality business. In 1997, he
25 began offering training and seminars for banks, law firms,
26 and hospitals. “They are learning about hospitality as a
27 way to beat competition, and it has nothing to do with
28 food,” he said.
29
30
31
Listen to the Telephone Doctor
32 G R E AT nancy friedman, known as the “telephone
33 Doctor,” is one of my favorite customer service
34 23 experts. She’s an energetic, intelligent woman who
35 I D E A teaches people how to make the most of their most
36 valuable business tool—the phone—via seminars, books,
37 and tapes.
38 Unfortunately, many people take their telephone for
39 granted. They answer it without enthusiasm, half-listen to
what’s being said, and take poor, incomplete messages. We 1
may carry cellular phones around and worry about missing 2
calls, but Friedman’s contention is that we don’t appreciate 3
or make use of the telephone’s real power. 4
If you teach your employees to answer the phone properly 5
and place calls in a professional manner, it will boost sales as 6
well as morale. She was gracious enough to contribute a few 7
great ideas for this book: 8
◆ Teach your employees to smile before they answer the 9
phone. Even if it’s forced, smiling brightens your voice and 10
boosts your energy. 11
◆ Keep important numbers handy. In all print correspon- 12
dence, type the addressee’s phone number directly under the 13
city and state in the opening part of a letter. This makes it 14
easy for you to call the person to follow up. 15
◆ When you are out of the office, call your staff at a 16
specified time. When you check in, ask them to tell you 17
exactly what’s been going on that day. No business owner 18
or boss ever wants to hear “nothing’s going on” at the 19
office. 43 20
◆ Learn to love voice mail. No matter how annoying you might 21
think it is, voice mail is here to stay. Learn to swear by it, not 22
at it. If you don’t want to hear that robotic, annoying “thank 23
you for calling…,” hit the “O” and most of the time you’ll 24
reach a live operator. If you don’t want to go into someone’s 25
voice mail, return to the operator and ask if you can leave a 26
personal message. 27
28
To find out more about improving telephone skills, check 29
out Friedman’s website: www.teldoc.com. Or contact Nancy 30
Friedman: Telephone Doctor, 30 Hollenberg Ct., St. Louis, 31
MO 63044; 314-291-3710. 32
33
34
35
36
37
38
39
1
2
Create a Disaster-Recovery Plan
3 G R E AT nobody likes to talk about the possibility
4 of disaster, but that doesn’t mean you shouldn’t have
5 24 a comprehensive disaster-recovery plan for your busi-
6 I D E A ness. You may not be hit with a hurricane, tornado,

7 or earthquake, but even a broken pipe or minor fire can tem-
8 porarily wipe out your business.
9 Big companies have committees and consultants to deal
10 with recovery planning. Smaller businesses are finally recog-
11 nizing the need for similar plans, according to Judy Bell, a
12 recovery consultant in Port Hueneme, California.
13 “We see chief financial officers and company auditors
14 wanting to do plans,” said Bell. “People who lease space are
15 also asking their building managers how they can prepare
16 jointly.” Bell, who helped develop disaster-recovery plans for
17 Pacific Bell, said insurance companies are also urging clients
18 to plan for disaster recovery.
19 You might want to check out her do-it-yourself recovery
20 44 planning manuals and software available through Disaster
21 Survival Planning Network, Inc., 669 Pacific Cover Dr.,
22 Port Hueneme, CA 93041; 800-601-4899 (www.disaster-

23 survival.com).
24 Meanwhile, here’s a list of questions to answer to get
25 you started on developing a plan:
26 ◆ Where would you work if you couldn’t work in the office?
27 ◆ Can you arrange to share office space with another busi-
28 ness?
29 ◆ How would you reach your clients and customers?
30 ◆ Do you have a list of every employee’s name, address, and
31 home phone number?
32 ◆ Do you have copies of your client or customer list at some-
33 one’s home?
34 ◆ Do you have copies of your invoices and accounts receivable
35 somewhere other than at the office?
36 ◆ Are all your important business records backed up and stored
37 offsite?
38
39
as part of your plan, you should keep important 1
records at your home or in another safe place. This includes 2
tax records, returns, patents, training materials, policy man- 3
uals, personnel records, and payroll checks. Put all the perti- 4
nent information in a special binder or notebook and give a 5
copy to one or two trusted employees. Be sure to include cur- 6
rent phone numbers for your insurance agent, plus policy 7
numbers and copies of your insurance policies. 8
A list of computer equipment serial numbers is also help- 9
ful. Keep an inventory of all your office equipment so it can 10
be replaced in case it’s damaged or stolen. 11
Before a disaster strikes, develop a plan for exiting your 12
building safely. Install fire extinguishers and schedule a fire 13
drill. Assign people to act as safety monitors. 14
Speak to your insurance agent about buying business 15
interruption insurance. There are all kinds of insurance poli- 16
cies available to keep your business going even if you experi- 17
ence a major problem. 18
19
20
Work Hard and Play Harder 45
21
G R E AT the most successful entrepreneurs i know 22
work hard and play even harder. One friend, who 23
25 built a $60 million company by working seven days a 24
I D E A week for nine years, now frequently jets around the 25
world to fabulous places for long weekends to meet her 26
boyfriend. He’s a top executive in the software business who 27
stays only in the best hotels, so she’s happy to meet him any- 28
where from London to Beijing. 29
She called me the other day, fresh from playing golf in 30
Stratford-on-Avon. “Imagine playing golf in Shakespeare’s 31
backyard!” she enthused. 32
Another friend in the health care business thinks noth- 33
ing of flying to France to do some “serious eating and drink- 34
ing” for a few days. “I’ve worked hard to build up my com- 35
pany for eighteen years, and I deserve to play,” she said, 36
looking sated and blissed-out hours after she landed back in 37
Washington, D.C. 38
This work hard/play hard strategy fits the entrepreneurial 39
1 lifestyle perfectly. In the start-up years, as most entrepre-
2 neurs know, you rarely get a day or weekend off—and a vaca-
3 tion is totally unthinkable. There are so many personal sacri-
4 fices involved in running a small business. So, when things
5 finally do take off, it’s time for you to take off.
6 Getting away, even for a few days, is incredibly rejuvenat-

7 ing. New sights, a comfortable bed, a zippy convertible, or a
8 sizzling beach to stretch out on can recharge your batteries
9 when they are low.
10 And remember, it’s only money. Cash in your frequent
11 flyer miles for free tickets. Or buy coach and upgrade to first
12 class. Bring plenty of mad money and stay in a great hotel.
13 Check into the spa and get a massage. Soak your troubles
14 away. Think of your playtime as an investment in your men-
15 tal health. It sure beats going to a psychiatrist.
16 And if you’re thinking that only the really well-off can
17 afford to play hard, forget it. Anyone can sneak off to the golf
18 course or bowling alley for an afternoon. Or check into a day
19 spa for a few hours of pampering. Rent a Harley-Davidson
20 46 soft tail and leathers and play bad-boy biker for a day.
21 So set your guilt aside and get into the habit of rewarding
22 yourself for all you’ve accomplished.

23
24
25
Know When to Reach Out forHelp
26 G R E AT
every business hits a rocky patch once in a
27 while; it’s nothing to be ashamed of. You have to
28 26 reach out for help and work with whomever you can
29 I D E A to solve your problems. If you don’t, you are jeopar-
30 dizing your business, your family, and your reputation.
31 Read through this quick checklist to monitor your current
32 business health:
33 Y E S N O
34 1 Are vendors or suppliers calling you and
35 demanding to be paid immediately?
36 2 Has your banker reduced your credit line
37 or demanded full payment of a loan?
38 3 Are you having trouble meeting your pay-
39 roll?
Y E S N O 1
4 Are you dipping into personal savings to 2
pay your bills? 3
5 Are customer complaints increasing? 4
6 Do you have trouble sleeping and feel 5
out of control? 6
7
if you checked more than one “yes,” face it: you need 8
help ASAP. First, decide whether any of your current advis- 9
ers can help you sort things out. Your accountant may be 10
able to figure out ways to boost your cash flow. Your attor- 11
ney can draft stern collection letters which might help you 12
get paid faster. A freelance marketing consultant can help 13
create a low-cost, short-term promotion aimed at bringing 14
in new sales. 15
If you feel your business is in serious jeopardy, you might 16
consider hiring a professional turnaround consultant. These 17
highly skilled and experienced experts step into your shoes 18
and take charge. They work quickly to negotiate deals with 19
creditors and vendors to keep them at bay. They often deal 47 20
with your banker, your suppliers, and your landlord, convinc- 21
ing them to give you more time to sort things out. 22
Bringing in an outsider to rescue your company is a dra- 23
matic measure, but it tells the world that you care enough 24
about your business to step aside—at least temporarily. Turn- 25
around consultants do not work cheaply. A good one may 26
cost thousands of dollars that you probably don’t have, but 27
it’s worth borrowing the money from friends or relatives if 28
it’s necessary to save your business. One turnaround consul- 29
tant I know actually found $60,000 worth of uncashed 30
checks in the drawer of a panicked controller. 31
Here’s the rub: If you do hire a turnaround consultant, 32
you must step out of the management picture, relinquishing 33
the day-to-day responsibility of running the business. You 34
can’t disappear, though. You have to be available to answer 35
questions and provide information. 36
For less severe problems, schedule some affordable coun- 37
seling at a Small Business Development Center. There are 38
nearly 1,000 centers around the country, jointly funded by 39
1 the U.S. Small Business Administration and private organi-
2 zations, usually colleges or universities. You can find the
3 closest SBDC by calling the SBA office listed under federal
4 government in the white pages.
5 Ignoring your problems is a sure way to kill your busi-
6 ness. No one likes to admit they’re stressing, but sending up

7 a flare is the only way to be rescued before it’s too late.
8
9 Know the DOS and DON’TS
10
11
of Buying a Franchise
12 G R E AT franchising in the united states is a
13 $1 trillion-a-year concept. Some 600,000 franchised
14 27 small business owners provide jobs for more than
15 I D E A 8 million American workers. There is virtually no
16 product or service that can’t be bought through a franchised
17 business. But it’s not for everyone, and it is not a get-rich-
18 quick scheme.
19 Here are some tips from the International Franchise
20 48 Association in Washington, D.C.:
21 DO:
22 ◆ Talk to as many franchisees as possible.

23 ◆ Talk to the franchiser; get to know key players.
24 ◆ Consult any and all advisers you feel can help you.
25 ◆ Ask all the questions you can. No question is too trivial.
26 ◆ Compare other franchise systems in the same field.
27 ◆ Evaluate yourself. Make sure you’ll be comfortable doing
28 what the business requires.
29 ◆ Read and understand the Uniform Franchise Offering Circu-
30 lar, and know all the terms of your contract.
31 ◆ Check the history and experience of the franchise’s officers
32 and managers.
33 ◆ Research, research, research. The more you know, the better
34 your decision is likely to be. Remember, only you can deter-
35 mine if owning a particular franchise is right for you.
36
37 DON’T:
38 ◆ Hurry. Short-cutting your research will increase your likeli-
39 hood of failure.
◆ Overextend your finances. Always plan for more expenses 1
than you think you’ll have. 2
◆ Skip consulting the professionals. Skimping on fees will 3
deprive you of critical information. 4
◆ Take anyone’s word. It’s your risk and opportunity. 5
◆ Settle. Get the business you want, not the first one that comes 6
along. 7
8
Contact the International Franchise Association at 1350 9
New York Ave., NW, #900, Washington, D.C. 20005-4709; 10
202-628-8000; e-mail: ifa@franchise.org. The website is 11
www.franchise.org. 12
13
14
Consider Joining the Family Business 15
G R E AT joining the family business is no picnic. 16
But with more people spurning the corporate world 17
28 for entrepreneurship, taking over the family enter- 18
I D E A prise has become an attractive option for many. 19
“I felt like there was a real need for me to get out of the 49 20
corporate world,” said Susan Chicone, who left a job in cor- 21
porate communications to join the family’s Orlando real 22
estate and citrus company. 23
Since then, she’s been busy not only learning the busi- 24
ness, but also figuring out where she fits into the big picture. 25
The job skills she acquired in New York were helpful, but 26
she didn’t know the nuts and bolts of growing oranges and 27
developing land. 28
She’s had a good teacher: Her father, Jerry Chicone, was 29
given his first orange grove when he was seven years old. 30
His father founded the business in 1919, and there was no 31
question Jerry would join the company. 32
Susan admits she was a little nervous about the move 33
because her brother had worked in the business and found 34
that there was a good deal of friction involved when working 35
with family members. But she decided it was worth a try. 36
One of the first things her father did was suggest Susan 37
take some accounting classes to hone her financial skills. 38
“I want her to be sharper than me about planning and zoning 39
1 and the ability to put together partnerships with adjoining
2 landowners,” said Jerry Chicone. “I have a good network, and
3 it’s important that she develops a good network as well.”
4 While Dad meant improving her network of people,
5 Susan was thinking more about computer networks. One of
6 her first moves was to install computers in the office. “Noth-

7 ing was computerized when I started here,” she said.
8 “Things here had been done the same way for fifty or sixty
9 years. I like to get things done and move on.”
10 Although she owns a piece of the business with her sib-
11 lings and a cousin, Susan Chicone is the only one involved
12 on a day-to-day basis. She expects that someday she’ll take
13 over her father’s job, but they haven’t discussed a time
14 frame.
15 Halfway across the country, Barbara Gondela decided that
16 buying her Chicago-based family business was the best strat-
17 egy for her and her husband—but it wasn’t easy. Her parents
18 preferred to sell the Service Stamp Works, Inc., rather than
19 let the kids fight over who would inherit it.
20 50 “There was a lot of emotion involved,” Gondela said of the
21 stressful eighteen-month process. They finally turned to the
22 family accountants to act as negotiators. When it was all over,

23 Barbara and her husband basically bought the building and
24 acquired the stamp company’s assets.
25 When choosing a successor for your family business,
26 communicating your future hopes and goals is critical, not
27 only on the management side but also on the financial side,
28 according to family business financial experts. “Waiting until
29 you are terminally ill to think about succession is not a good
30 idea,” said Henry Ritter, former chairman and chief execu-
31 tive officer of Trust Company of America in Chevy Chase,
32 Maryland. “Analyze the business now and look at the real
33 cost of estate taxes.”
34 Ritter said too many family-owned businesses end up on
35 the block to pay estate taxes, which can be close to 55 or 60
36 percent of the company’s value. “Sit down and talk about the
37 future of the company with your kids,” advises Ritter. Be
38 sure to figure out ahead of time who will own the business,
39 who will manage it, and how outsiders fit into the picture.
1
Get Free Government Counseling 2
G R E AT
after working in retail for twenty-two years, 3
Barbara Galloway wanted to start her own business. 4
29 One of her first stops was at the Jacksonville State 5
I D E A University Small Business Development Center. 6
Counselors there provided her with help in finding a good 7
location, setting a budget, record keeping, and product pric- 8
ing. She opened the BG Boutique on the town square in 9
Jacksonville, Alabama, in 1991. The business has been prof- 10
itable from the start. 11
“It’s really great to know I can call the SBDC and say, ‘I 12
need help,’” she said. The center also partnered Galloway 13
with a mentor in 1994. They worked together for a year. 14
“My mentor is wonderful,” said Galloway. “She helped me 15
with problems such as how to deal with vendors and all the 16
paperwork involved.” 17
There are about 1,400 SBDCs around the country. You 18
can find one by contacting your local SBA office. 19
Another helpful government program is SCORE. The 51 20
SCORE program provides assistance to more than one mil- 21
lion businesses every year. The nonprofit association match- 22
es veteran business people with entrepreneurs. There are 23
eleven thousand SCORE volunteers with years of experience 24
in financing, business planning, and every aspect of running 25
a business (www.score.org). 26
Like the partnership between the SBA and SCORE, the 27
Business Information Centers are a joint venture between 28
the SBA and the private sector. They offer computers, soft- 29
ware, reference libraries, videos, and seminars. 30
The SBA publishes numerous booklets on a variety of top- 31
ics from business planning to boosting cash flow. Most are 32
free or at a very low cost (www.sba.gov). 33
If it applies to you, check out the Minority Business Devel- 34
opment Centers. They provide counseling and technical 35
assistance around the country. The SBA’s Office of Women’s 36
Business Ownership and the Office of Veterans Affairs also 37
provide special assistance. 38
Several Women’s Business Centers have opened around 39
1 the country to assist women. “Many of the success stories
2 born in these centers result in true economic development,”
3 said Sherrye Henry, former head of the women’s office of the
4 SBA. She said more than sixty thousand women have partici-
5 pated in the various programs.
6 Contact your local Small Business Administration to learn

7 more about the variety of assistance programs near you.
8
9 MoveYour Business into a
10
11
Main Street Revitalization Zone
12 G R E AT when paul curtain, owner of raymond’s
13 Jewellers in downtown Sioux Falls, South Dakota,
14 30 needed a loan to remodel his store, he borrowed
15 I D E A money, below prime rate, from a revolving fund set
16 up especially for downtown merchants. “As a small retailer,
17 I couldn’t have afforded to do what I’ve done in a mall loca-
18 tion,” said Curtain.
19 Moving merchants from malls to Main Street is a trend
20 52 sweeping America. Small business owners looking for a
21 fresh start are taking advantage of a variety of state, local, and
22 federal Main Street revitalization programs.

23 “There is a new breed of merchants, and they live in
24 Downtown, U.S.A.,” said Kennedy Smith, director of the
25 National Historic Trust’s Main Street Center program. Thou-
26 sands of deteriorating and abandoned communities have
27 been revitalized by funds and technical assistance provided
28 by the program, which started in 1976. About 1,300 commu-
29 nities in the United States and Puerto Rico have received
30 help. The Main Street program takes credit for creating
31 33,000 new businesses and 115,000 new jobs. “Every dollar
32 a community spends on downtown revitalization brings in
33 $30 in new investment,” said Smith.
34 Communities across the country are revitalizing their
35 downtown areas in a variety of ways. Peekskill, New York, for
36 example, is working hard to create a downtown area filled
37 with art galleries and art schools. Affordable rent and remod-
38 eled lofts are luring many artists from Manhattan, city offi-
39 cials said. Venice Beach, California, has also created a mecca
for art lovers along Abbott Kinney Boulevard to revitalize the 1
business district. 2
For small retailers, moving downtown has many advan- 3
tages. You can set your own hours and operate your store 4
without being restricted by mall regulations. Rents are 5
usually cheaper in downtown business districts. 6
“If we didn’t have retailing, we wouldn’t have downtown 7
as we know it,” said Susan Scott, owner of Scott’s Ltd., a 8
women’s clothing store in downtown Sioux Falls, Idaho. 9
“Anytime you can be a part of a district that’s doing well, 10
your business is bound to benefit.” 11
If you are interested in starting a Main Street program 12
or improving your downtown area, here are some tips 13
from the National Trust’s Smith: 14
◆ Schedule a meeting to introduce the idea to merchants, civic 15
leaders, lenders, and restoration-minded citizens. 16
◆ Meet with public officials and city planners to gauge their 17
interest in redevelopment efforts. 18
◆ Meet with a cross section of community groups to enlist their 19
support. 53 20
◆ Organize a downtown festival to focus attention on your 21
downtown area. 22
◆ Visit another Main Street program to see how it works. 23
◆ Create a task force of business owners, property owners, and 24
government officials to set priorities and make plans. 25
26
For technical assistance, contact the Main Street Center 27
Program: 1785 Massachusetts Ave., NW, Washington, D.C. 28
20036-2117; 202-588-6219. Or visit their website: 29
www.mainstreet.org. 30
31
32
Ask Your Employees to Evaluate You 33
G R E AT good managers are trained to evaluate 34
their employees carefully at least once a year. These 35
31 formal, written evaluations are used for giving raises 36
I D E A and promotions or documenting problems prior to 37
termination. But great managers should be confident and 38
open enough to reverse roles and let their employees evalu- 39
1 ate them once a year. Asking your employees to rate your
2 performance is not as scary as you’d think, and you will gain
3 valuable insight. In addition, human resources experts say
4 that most unhappy employees quit rather than complain
5 about their manager to their manager, so soliciting honest
6 input from your staff may prevent a valuable employee from

7 leaving. Providing an open forum for comment will benefit
8 you and the company in the long run.
9 The simplest way to collect honest feedback is to create a
10 short evaluation form and ask employees to submit it anony-
11 mously.
12 Here are some suggested questions for your staff’s
13 evaluation:
14 1 How would you describe my management style:
15 ◆ tyrannical
16 ◆ open to new ideas
17 ◆ rigid and uncompromising
18 2 Do I bring out the best in my employees?
19 ◆ yes
20 54 ◆ no
21 ◆ sometimes
22 ◆ please elaborate
23 3 What can I do to improve the way I manage the company?
24 Please comment and provide specific suggestions:
25 4 Would you recommend that friends apply for jobs here if their
26 skills fit our needs?
27 ◆ If yes, why?
28 ◆ If no, why not?
29 5 Do I praise people publicly for their good work?
30 6 Do I criticize people for poor performance in front of col-
31 leagues?
32 7 What is the best decision I’ve made this year?
33 8 What is the worst decision I’ve made this year?
34 9 How would you have handled the problem with
35 differently than the way I did?
36
37 On the form, request that responses are returned to you
38 by a specified date and remind employees that there is no
39 need to sign their names. After you review the comments,
schedule a staff meeting to discuss their suggestions for 1
improvement and how you plan to respond. 2
3
Take This Self-Help Quiz 4
5
for Managers 6
G R E AT
self-help quizzes and do-it-yourself 7
diagnostics are popular features in women’s maga- 8
32 zines, but rarely appear in business books. Yet it’s 9
I D E A worth taking a few minutes to think about how you 10
are coping with the toughest job in America—running a 11
small business. 12
Being an entrepreneur is incredibly stressful. Despite 13
computers, cellular phones, pagers, scanners, and e-mail, an 14
entrepreneur’s life is not simple. For most of us, it’s a 15
chaotic juggling act. 16
So spend a few minutes with this quiz. There are no right 17
or wrong answers. It’s meant to provoke thought—and 18
action. 19
There are three sections: Management and Personnel, 55 20
Money, and Time. 21
22
Management and Personnel 23
1 Do you dread it when someone walks into your office to speak 24
to you privately? 25
2 When was the last time you had breakfast or lunch with your 26
key employees? 27
3 When was the last time you hosted an offsite staff meeting? 28
4 Have you implemented any new ideas proposed by your staff 29
since the beginning of the year? 30
5 If you had a magic wand and could vaporize aggravating 31
employees, who would be on your list? 32
6 Do you spend an inordinate amount of time each day handling 33
personnel conflicts? 34
7 When was the last time you hired someone? 35
8 Fired someone? 36
9 Do you offer onsite training or tuition reimbursement? 37
10 Do you have a mentor or colleague to call when things aren’t 38
going well? 39
1 Based on your answers, you might want to make some
2 personnel changes. Life is too short to work with anyone
3 who gives you a headache or a stomachache (see Great Idea
4 16). In a small business, every person counts. And, since
5 you’re the boss, you can choose who you work with every day.
6 If there is a “storm cloud” on your staff, think seriously

7 about replacing that person. Why pay someone money to
8 make your life miserable? On the positive side, take advan-
9 tage of your staff’s bright ideas. You are paying them to be
10 smart and creative. Let them do their job.
11
12 Money
13 1 When was the last time you spoke with your banker?
14 2 Have you thought about next year’s tax return?
15 3 Without opening your business checkbook, how much money
16 is in your account?
17 4 How many of your accounts are past due?
18 5 How much money do you owe to vendors?
19 6 Are sales higher or lower than last year’s at this point?
20 56 7 Do you have enough money to buy the new equipment you
21 need to boost productivity?
22 8 Is your accountant doing everything legally possible to mini-

23 mize your taxes?
24 9 Is he or she up-to-date on the new tax laws and provisions?
25 10 How many new clients or customers have you gained since
26 January? How many have you lost?
27
28 Too many business owners play ostrich when it comes to
29 facing financial issues. You need to monitor your cash flow
30 every day, every week, and every month. Slow-paying or no-
31 paying customers are not worth having, and it may be time
32 to fire them. Be sure to communicate openly with your
33 banker—bankers hate surprises.
34
35 Time
36 1 How much time do you take for yourself every day?
37 2 Do you feel exhausted before going to work?
38 3 Are you working longer hours, but not accomplishing much?
39 4 Is your to-do list longer than your shopping list?
5 Do you have trouble keeping track of phone numbers and 1
important notes and papers? 2
6 Is your desk a mess and your to-read pile sky-high? (See 3
Great Idea 158.) 4
7 Do your family and friends say you look tired? 5
8 When was the last time you took two weeks off? 6
9 How many times a day do you laugh? (It’s important!) 7
10 Is your Palm Pilot or Visor overloaded with data? 8
9
No one is busier than a business owner. But being busy 10
does not necessarily mean being productive. If you find you 11
have little or no time for yourself every day, make some. Try 12
taking a short walk or afternoon nap rather than gulping cof- 13
fee. Ask a staffer to clip interesting newspaper and magazine 14
articles and put them in a file. Then tote them along to read 15
while you are waiting in line for appointments. Bring your 16
calendar home at the beginning of the month and ask your 17
family to book some time with you. Put those dates in ink 18
and don’t change them. Taking care of yourself should be 19
your first priority, because so many people depend on you. 57 20
21
Understand What 22
23
Success Means toYou 24
G R E AT
when asked for three words that define 25
success, entrepreneurs offer a variety of terms: 26
33 “Independence, control, security.” 27
I D E A “Happiness, financial reward, recognition.” 28
“Pride, acclaim, money.” 29
“Friendship, practice, failure.” 30
Success is tough to define, yet most entrepreneurs are 31
obsessed by it. How do you define success when everyone’s 32
concept is different? The best approach is anecdotally, not 33
scientifically. The initial responses to an extensive, ongoing 34
national questionnaire are worth sharing. Common themes 35
emerge: Successful people work hard to balance their work 36
and family life. Successful people rely on a mentor or series 37
of mentors as their business grows. Successful people also 38
surround themselves with other successful people and set 39
1 limits on how much time they devote to their business.
2 “I drop work the minute I leave the office,” said Marcy
3 Carsey, a successful television producer who participated in
4 the survey. Carsey and her partner, Tom Werner, have
5 brought an unending stream of hit sitcoms to the networks,
6 including Roseanne, Cybill, 3rd Rock from the Sun, and the
7 Cosby Show.
8 Although she does a few hours of paperwork at home in
9 the evening, fighting workaholism has paid off for Carsey,
10 whose firm, Carsey-Werner, is regarded as one of the world’s
11 most successful independent television production compa-
12 nies. The company is growing rapidly. It moved worldwide
13 distribution of its popular shows in-house and added a fea-
14 ture film group.
15 Despite the pressures of managing a high-profile, high-
16 profit business, Carsey puts her family first, frequently
17 speaking to her husband and kids from the office. “I very
18 much needed the ability to balance my life,” said Carsey. “I
19 believe in a team approach to doing everything—and I
20 58 believe wholeheartedly in delegating.” Carsey, who vows to
21 spend more time out of the office, “living and meeting peo-
22 ple,” defines success this way: “courage, perspective, clear-

23 headedness.”
24 They may not be as well known as Carsey, but about 100
25 business owners attending a recent San Francisco Cham-
26 ber of Commerce breakfast offered their own definitions of
27 success.
28 Mary Ann Maggiore, a consultant in Tiburon, California,
29 said she will consider herself successful when she is less
30 than $5,000 in debt, is recognized as an authority in her
31 field, and “my children are on their own and doing well.”
32 Regina Phelps, founder of Health Plus, defines success
33 as: “freedom, happiness, making a difference.”
34 Suzanne Tucker, owner of One Stop Graphics in San
35 Francisco, strives for “consistent profitability, less stress,
36 recognition/reputation.” Tucker said she can say she’s suc-
37 cessful when she is able to take more time off and when she
38 has finally hired a strong general manager to free up more of
39 her time.
Terry O’Sullivan, with CAL Insurance in San Francisco, 1
said a successful person is happy, free, and focused. “I try to 2
prioritize obligations, bearing in mind that special life events 3
take priority over business activities,” he said. 4
John Quezada, founder of Quezada Staffing Inc. in San 5
Francisco, had an interesting definition of success: posterity, 6
historical perspective, relationships. When asked when he 7
could consider himself successful, he responded quickly: 8
“Just after birth.” 9
As an entrepreneur, it’s important for you to know what it 10
will take for you to consider yourself a success. Think about 11
what it means to you—and then achieve it. 12
13
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C H A P T E R 2
11
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Money
17
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19
20
Matters 21
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39
M
1
8
spending it.
oney fuels your dreams.
Without enough of it, your business will shrivel up
and die. Entrepreneurs are obsessed with money.
We fret about raising it, saving it, borrowing it, and
This section covers a wide range of great money

ideas. Some I’ve learned through experience, from
managing The Applegate Group. For instance, I
9 know that most projects will cost three times as
10 much as projected and will take twice as long to
11 complete—especially in the TV world.
12 Too many entrepreneurs forget that they still
13 have to cover their living expenses while waiting to
14 draw a salary from their new business. They assume
15 they will be able to earn a real profit within a few
16 months. Ha, Ha, Ha. It always takes much longer
17 than you think to make any money, especially
18 enough to pay yourself a living wage.
Having someone else pay your family living 1
expenses for the first year or so is ideal—even 2
critical. I’ll always be grateful to my husband, Joe, 3
for paying the bills while I maxed out all our credit 4
cards and gambled everything we had on our new 5

63
venture, SBTV (Small Business TV). 6
Our first six years in business were very tough. 7
After a short time, I started asking myself why I had 8
quit my prestigious, well-paying reporting job (with 9
benefits) at The Los Angeles Times. 10
Joe often wondered why my first employee, 11
Josette, was making more money than I was. He 12
wondered why we spent $10,000 of our own money 13
to promote my first book. Did we really need to buy 14
another computer? A printer and a fax? 15
All the doubts and anxiety nearly wore us down, 16
but eventually things picked up, and we began to 17
make a profit. My book Succeeding in Small 18

1 Business took off after I was profiled in USA Today. The
2 next year I was retained by American Express to write and
3 produce my own small business radio report. That radio
4 report, combined with my column, served as a magnet for
5 business, and from that time forward we never looked back.
6 To be as helpful as possible, this chapter covers a wide

7 spectrum of topics. You’ll find really great ideas about how to
8 attract angel investors, how to sell stock in yourself and to
9 your customers, how to collect debts, and how to save on
10 your taxes without raising an eyebrow from Uncle Sam.
11 Check out the section on leasing space and look into renting
12 a financial expert to help you sort through your money prob-
13 lems. You’ll learn how to work with a debt arbitrator, how to
14 shop for long-distance service, and how to take advantage of
15 a special tax provision for couples who work together.
16 The section begins with one of my favorite ideas:
17 becoming a “profit enhancement officer,” or PEO, for your
18 business.
19 If you’ve had it with your current business, there are also
20 64 some good ideas about selling out and moving on.
21
MONEY MATTERS
22
23
Become a Profit Enhancement Officer
24 G R E AT we’re all familiar with ceos, but ever hear
25 of a “PEO”? A PEO is a “profit enhancement officer,”
26 34 and that’s what every business owner should be,
27 I D E A according to Barry Schimel, a Maryland CPA who
28 quit doing tax returns to devote his life to boosting business
29 owners’ profits.
30 “If you ask employees what their responsibilities are, the
31 word ‘profit’ rarely comes out of their mouths,” said
32 Schimel, cofounder of The Profit Advisors in Rockville,
33 Maryland. “People do work, but there’s no relationship
34 between what they do and how it affects the bottom line.”
35 Beefing up the bottom line is the goal of Schimel’s rigor-
36 ous analysis and intense brainstorming sessions. Although
37 he charges clients five-figure consulting fees, Schimel claims
38 he’s helped them reap more than $200 million in additional
39 profits over the past few years.
“Because he was a complete outsider, he gave us new 1
ways of looking at things,” said Debbie Hastings, vice presi- 2
dent of East End Moving and Storage Inc. in Rochester, New 3
York. After hearing him speak at a moving-industry confer- 4
ence, Hastings hired Schimel to turn twenty of her sixty 5
employees into “profit champions.” Everyone from packers 6
to salespeople was taught how to dig for profits. 7
Schimel was quick to implement money-making strate- 8
gies. His first focus was clerical. East End employees pledged 9
to vigilantly complete all the move-related paperwork, 10
because when packers and movers didn’t keep track of all the 11
materials used or hours spent on a job, the customer 12
couldn’t be billed—and profits were lost. Hastings said that 13
simple tactic added about $1,000 a week to the company’s 14
bottom line. 15
After receiving Hastings’s permission to tape-record his 16
calls to East End’s sales department, Schimel played the 17
tapes at the brainstorming session. “That was a real eye- 18
opener,” said Hastings. “One salesperson was essentially giv- 19
ing away out-of-state business by referring customers to 65 20
other movers.” The employee was counseled and sales poli- 21
cies were changed. 22
Some profit-boosting suggestions were small, such as 23
putting supervisors in charge of distributing office supplies 24
to cut costs. “It’s hard to keep track of specific savings, but 25
based on our financial statement, we’re doing better,” said 26
Hastings. 27
With Schimel’s help, Washington Express Service Inc., 28
based in Beltsville, Maryland, found that it could reap a 29
windfall just by reviewing customer accounts. The company, 30
with annual revenues of $7.5 million, serves mostly 31
white-collar clients such as law and accounting firms. 32
“We found a lot of customers with special discounts that 33
no one had reviewed for years,” said Gil Carpel, president 34
and CEO. He immediately updated the old rates. Then they 35
began charging extra for mileage, round-trips, and waiting 36
time. Very few customers complained about these minor 37
adjustments, which brought in an extra $100,000 a year. 38
“It was really manna from heaven,” said Carpel. He also 39
1 “fired” some customers to eliminate the expense of servicing
2 companies that rarely called with business. Based on
3 Schimel’s brainstorming sessions, they also installed a
4 toll-free 800 number for drivers who had been calling dis-
5 patchers collect, consolidated vendors, and installed an
6 e-mail system to improve internal communications.

7 After working with Schimel for a while, Carpel also fired
8 his chief financial officer, “because he never came up with
9 any profit-making ideas.” Now, Carpel said, he has a compa-
10 ny full of PEOs who search for ways to boost his profits every
11 day. For more information, contact The Profit Advisors at
12 301-545-0477.
13
14
15
Look for “Smart Money”
16 G R E AT byron roth, president of roth capital
17 Partners in Irvine, California, has watched his small
18 35 investment banking firm grow to $60 million in
19 I D E A annual revenues with 225 employees. His job is help-
20 66 ing entrepreneurs finance their dreams. Based on years of
21 dealing with thousands of entrepreneurs, he said small busi-
MONEY MATTERS
22 ness owners make two major mistakes while hunting for

23 financing:
24 1 They often give up too much equity too fast, instead of think-
25 ing long term.
26 2 They take money from anyone with a checkbook, rather than
27 holding out for “smart money” from investors who know their
28 industry and can help grow the business.
29
30 “when we put money into a deal, one of the most
31 important things to me is, who else can I get to invest, and
32 what do they bring to the party?” said Roth. Finding
33 investors who can help your business flourish by making
34 high-level connections and serving on your board is critical
35 to success.
36 “Some people say ‘all money is as green as the rest,’ but I
37 don’t agree with that,” said Roth. For example, Roth helped
38 finance a small apparel company that was lucky enough to
39 attract a major investor in the industry.
The investor, who owns about 10 percent of the com- 1
pany’s stock, also serves on their board, and his presence has 2
helped attract other prestigious investors. It’s a situation 3
that’s truly benefited both parties. 4
Too many entrepreneurs make capricious financial deci- 5
sions “in order to get to the next step, without thinking two 6
or three steps beyond,” said Roth. For example, two partners 7
in a popular twenty-five-location restaurant chain wanted to 8
raise some quick cash by selling Bay Area and other U.S. 9
rights to their concept. “I discouraged them because it 10
seemed like they were selling their soul for too little money,” 11
Roth said. 12
He recommends that entrepreneurs consider giving up a 13
bit more equity to investors who have the knowledge and 14
contacts to help grow the business. “If you want to raise $2 15
million, an investor may require 20 percent of your compa- 16
ny, but you might want to give up 25 percent instead to 17
attract smarter money,” he explained. 18
He said that smart money investors are usually looking 19
for a long-term relationship, and they may be turned off if 67 20
your focus is on increasing sales at the expense of other 21
goals. Still, money does fuel growth. “When a company gets 22
big, with smart money behind it, it’s scary how quickly they 23
can move and grow,” he said. 24
Roth Capital Partners has offices in Irvine, Los Angeles, 25
Seattle, San Francisco, and Santa Barbara. 26
27
28
Write a Killer Business Plan 29
G R E AT if two down-on-their-luck beggars 30
approach you on the street asking for money, are you 31
36 more likely to give money to the dirty, dangerous- 32
I D E A looking guy or the sincere, clean guy who asks 33
politely for spare change? 34
I’m not saying you are a panhandler, but too many entre- 35
preneurs send out bum business plans and wonder why they 36
never get funding. Remember this: Your business plan has 37
less than a minute to catch the eye of a serious investor. 38
Messy, typo-filled, poorly written plans end up in the trash, 39
1 according to the private investors and busy venture capital-
2 ists I’ve interviewed. They receive thousands of business
3 plans a year and don’t have time to waste on second-rate
4 pitches.
5 My sister, Dr. Andrea Weisman Tobias, a venture capitalist
6 and consultant, has some good advice to offer. An expert in

7 biotech, she says that a well-written business plan will stand
8 out from the pack. She looks for succinctly written plans
9 printed in an easy-to-read type font. Tobias, who read hun-
10 dreds of business plans each year, said: “The lighter, the bet-
11 ter. I always leave the weighty, two-pound ones until last.”
12 Tobias said that although you’ll need a detailed company
13 history, marketing summary, and management biographies,
14 the most important element is the executive summary. It
15 should be clear and concise, yet comprehensive, she advised.
16 If snappy writing isn’t your strong suit, hire a business-plan
17 consultant or freelance business journalist to help.
18 “Of course, the content is very important, especially in a
19 technical area like biotechnology,” she said. If you are in any
20 68 sort of engineering or technical field, always include the
21 most compelling research results and data. Your plan should
MONEY MATTERS
22 also explain the benefits of investing in your company rather

23 than competing firms. Consider the investor’s perspective
24 and include all the perks beyond making money. For
25 instance, if your product is really popular, your investors will
26 benefit from the press coverage it generates. Some investors
27 like to be invited to glitzy parties and industry trade shows
28 when they have money in a high-profile deal. List all
29 specifics that will make your company more attractive to
30 investors.
31 Good products and great writing aside, luck and personal
32 contacts play a significant role in raising capital. Although
33 U.S. venture capitalists invested more than $25 billion in
34 2000, thousands of great companies never attract a dime.
35 Timing is essential. Your company has to be poised for
36 growth to appeal to venture capitalists.
37 Because people lend money to people, not companies,
38 picky investors put a lot of weight on where the deal came
39 from. “The source of the deal is very important to a venture
capitalist,” said Tobias. “If we like the source, we’ll pay 1
attention to the deal.” 2
So if you want your business plan to land on the right 3
desks, take advantage of every possible contact. Attorneys, 4
accountants, and successful business people can often help 5
you get your business plan to the appropriate investor. Then 6
it’s up to your plan to be a magnet for money. 7
8
9
Learn from David Bowie 10
G R E AT david bowie may not at first be your idea of 11
a savvy businessman, but in 1997 he did a bond 12
37 deal that pulled in $55 million—and attracted a lot 13
I D E A of attention. Instead of waiting for future royalties, 14
Bowie went to Prudential Insurance Company and offered 15
to assign future earnings from twenty-five albums to the 16
insurance giant. He had, in effect, “securitized” his royalty 17
income. 18
The Bowie bonds, which are expected to yield about 7.9 19
percent over fifteen years, will pay more than a 10-year Trea- 69 20
sury bond. John Wilson, a manager with Prudential Securi- 21
ties, said the idea came up when Bowie and his manager 22
mentioned to an investment banker that the performer want- 23
ed to get his hands on more liquid cash. 24
If you are a Bowie fan and want to invest, you’re probably 25
out of luck. The bonds are not sold to individuals, only to 26
institutional investors who spread their risk among different 27
kinds of investments. Why would Prudential do such an 28
unusual deal? 29
“We had a very major, very high-quality record company 30
essentially guaranteeing the royalties,” Wilson told a radio 31
interviewer. “Their knowledge of the industry, which is far 32
beyond anything that I have, gave us a lot of comfort that 33
these bonds were quite safe.” 34
The deal works well because Bowie owns his own music 35
catalog, and he continues to be a popular and visible record- 36
ing artist. “It’s a very conservative investment,” said Tim 37
Biggs, a Prudential spokesman. “It’s an investment-grade 38
bond with a financial guaranty provided by EMI records.” 39
1 Biggs said Prudential is talking with other artists about
2 similar royalty-based bond deals. “It could be a pool of artists
3 with a collective royalty stream,” said Biggs. But he said Pru-
4 dential remains focused on more conservative investments.
5 “It’s still a very new type of deal.”
6
7
8
Hire a Good Accountant
9 G R E AT no matter what stage of life your business
10 is in, you’ll need an experienced accountant not just
11 38 to prepare your taxes, but also to help you plan your
12 I D E A long-term financial goals.
13 A good small business accountant understands and keeps
14 up with state and federal tax laws but also should know
15 enough about your business to become a vital member of
16 your advisory team. Your accountant should be consulted
17 before you buy any equipment, sign a major deal, or sell or
18 relocate your business.
19 But how do you find the right accountant for your small
20 70 business? If possible, look for someone with experience in
21 your specific industry. If you are in the apparel business, you
MONEY MATTERS
22 want someone who knows fashion. If you are in the con-

23 struction industry, you want someone who knows the ins
24 and outs of leasing heavy equipment and dealing with sub-
25 contractors.
26 The best way to find a good accountant is via word-of-
27 mouth; start by asking your friends, neighbors, and business
28 associates for recommendations.
29 Remember, in order to do a good job your accountant has
30 to know nearly everything about you, your family, and your
31 business. This is why it’s essential to find someone you feel
32 comfortable talking with. The person you choose should not
33 only be competent, but also have good chemistry with you
34 and your staff.
35 Once you assemble a list of potential candidates, call their
36 offices and ask someone there to send you a company pro-
37 file, brochure, or other written material. When the package
38 arrives, study it. Is the material clear and well presented? Is
39 the cover letter neatly typed? You want to make sure the firm
makes a positive first impression, because it will be repre- 1
senting you and your company to the Internal Revenue Ser- 2
vice and to the rest of the business world. 3
If the package looks good, call and make an appoint- 4
ment to meet with someone at the firm. Many entrepre- 5
neurs prefer to work with small accounting firms because 6
they are more likely to work directly with a partner or prin- 7
cipal. But if your business requires a big company with 8
international offices, don’t be afraid to go with a big firm. 9
Schedule at least an hour for an initial visit. If the person 10
expects to charge you for the get-acquainted meeting, can- 11
cel it. A reputable accountant will meet with prospective 12
clients at no charge. 13
Make a list of questions you want to ask during your inter- 14
view. Sit back and listen to the answers. Ask yourself if you 15
feel comfortable talking with the person. Remember, you 16
will be sharing very personal financial information. 17
If the chemistry and credentials are right, ask for a short 18
list of other clients you can call for references. If the person 19
is reluctant to provide such a list, this is a major red flag. 71 20
You should ask whether or not members of the firm are 21
up-to-date with the professional courses they are required to 22
take by their accrediting organizations. You also want to 23
know if they are certified public accountants. If their refer- 24
ences check out, be sure to discuss these specific issues: 25
1 What is the fee for specific projects and services? 26
2 Who, specifically, at the firm will do the hands-on accounting 27
and tax preparation? Can an introduction to that person be 28
arranged? 29
3 How does the firm expect information to be provided to 30
them? By fax? On disk? In person? Via e-mail? 31
4 When, specifically, does the firm need the information? 32
5 Is the firm experienced in handling disputes with the IRS? 33
6 How does the firm expect to be paid? Net 30? 34
35
Remember, if things don’t work out, don’t be afraid to 36
change accountants. There are thousands out there who 37
would be happy to have your business. 38
39
1
2
FindYourself an Angel
3 G R E AT if your company is too young, too risky, or
4 too offbeat to qualify for traditional bank financing,
5 39 you might want to look for an angel. An angel is a
6 I D E A private investor, often a successful entrepreneur, who

7 invests in small businesses close to home.
8 Angels prefer to invest in companies they are familiar
9 with. They usually seek out small and growing companies in
10 their own industry. Although the figures vary widely, angels
11 are believed to provide billions of dollars in capital to entre-
12 preneurs every year.
13 How do you find an angel for your business, besides
14 praying for help? Here are some tips:
15 1 Prepare a well-researched, detailed business plan that empha-
16 sizes why you need additional financing and exactly what you
17 plan to do with the new money.
18 2 Write an executive summary for the plan that spells out in
19 one page why someone should invest money in your business.
20 72 Explain, too, how you plan to repay the money and when.
21 3 Join a professional association or trade group for your indus-
MONEY MATTERS
22 try. Begin attending meetings on a regular basis. This is the

23 best way to get acquainted with successful business owners in
24 your field.
25 4 Discreetly inquire about the people who appear to be the most
26 successful members of the group. You might ask the executive
27 who runs the professional group whether or not those people
28 invest in small businesses.
29 5 Once you find a prospect, send a letter requesting a short
30 meeting to discuss your proposal. A letter is better than a
31 phone call. If the answer is “no,” it’s less awkward to find out
32 via the mail rather than on the telephone.
33 6 If you are fortunate enough to schedule a meeting, bring
34 along copies of your business plan and executive summary.
35 7 Practice your presentation before the meeting. You want to be
36 as confident and relaxed as possible.
37 8 If the investor is interested, bring in your accountants and
38 attorneys to draft an agreement.
39
angels may prefer to make straight loans at rates 1
comparable to banks or at a slightly higher rate. Others may 2
want to be repaid in stock if your company eventually goes 3
public. Be sure to tailor the financial arrangements to fit 4
your angel’s needs. 5
If possible, encourage your angel to become a member of 6
your informal advisory board. Many angels like to keep a 7
close eye on their money; plus, they can offer you invaluable 8
advice. If your angel is well connected in the local business 9
community, he or she may help you find additional 10
investors, introduce you to a banker or an attorney, or bring 11
in new customers. An angel may also help you gain mem- 12
bership in a club or professional society that will benefit your 13
business. 14
Remember, every relationship is different. The key to 15
success is doing everything you can to increase your 16
angel’s comfort level so the person’s investment and rela- 17
tionship with you and your business will be longstanding 18
and profitable. 19
When you find an angel: 73 20
◆ If your angel happens to be a friend or relative, be sure you 21
treat him or her with the same courtesy and respect you 22
would offer a stranger. 23
◆ Draft the appropriate legal documents and make your pay- 24
ments in full and on time. 25
◆ Be sure to give your angel frequent status reports. If busi- 26
ness falls off or problems arise, keep your angel informed. 27
You don’t want your angel to hear any bad news via the 28
grapevine. 29
30
To learn more about angel investors, read Every Business 31
Needs an Angel: Getting the Money You Need to Make Your 32
Business Grow, by John May and Cal Simmons (Crown; 33
2001) or Angel Investing: Matching Startup Funds with 34
Startup Companies, by Robert J. Robinson and Mark Van 35
Osnabrugge (Jossey-Bass; 2000). 36
37
38
39
1
2
Choose the Right Bank
3 G R E AT one of the biggest challenges a small
4 business owner faces is establishing a good rela-
5 40 tionship with the right bank. The problem is,
6 I D E A bankers are often cast as villains by the small busi-

7 ness community.
8 While the myth is that bankers just don’t like entrepre-
9 neurs, the reality is that bankers have nothing against entre-
10 preneurs personally. The problem is simple: Bankers are by
11 nature conservative and risk-adverse. Entrepreneurs, on the
12 other hand, are risk-takers and thrive on uncertainty. If you
13 look at the problem as a communication gap, not a personal-
14 ity clash, you’ll be on your way to building a tremendous
15 relationship with your banker.
16 But how do you find the right bank for your company?
17 Step One: Determine exactly what services you expect a
18 bank to provide. Your needs will depend on where you are in
19 the business life cycle. In the first year or two, you’ll probably
20 74 need a business checking account, a savings account and, if
21 you process credit card orders, merchant card services (see
MONEY MATTERS
22 Great Idea 52).

23 Other services you might require:
24 ◆ Letters of credit (domestic and international)
25 ◆ Notary service
26 ◆ Travelers checks
27 ◆ Commercial line of credit
28 ◆ Small Business Administration–guaranteed loans
29 ◆ Wire transfers
30 ◆ Direct deposit of payroll checks for employees
31 ◆ Payroll tax deposits
32
33 Step Two: Your goal is to match your needs with the right
34 bank in your community. Many entrepreneurs prefer to open
35 their business account at a small community lender. The
36 advantage to being at a small bank is that you will probably
37 get to know the people better. And, if you are lucky, you’ll
38 receive better day-to-day service.
39 The downside to dealing with a smaller bank is that it may
be limited when it comes to the amount of money the bank 1
can lend. A smaller bank may not be as financially sophisti- 2
cated as you would like it to be if you are dealing globally. 3
After my company completed extensive market research 4
for a major bank, I was surprised to find that the most 5
important thing small business owners wanted from their 6
bank was a personal banker—a banker who is responsive 7
to their specific needs and knows their business and their 8
accounts. 9
Unfortunately, most banks, big and small, are moving 10
toward centralized processing for just about everything. The 11
branch-banking system is shrinking as many people prefer 12
to use ATMs, bank by mail, and move money via electronic- 13
funds transfer. 14
Despite these drawbacks, it’s still possible to create and 15
maintain a good relationship with a banker. Choosing a 16
banker is like choosing a good doctor. You want someone 17
who is competent, personable, and a good listener. Your 18
banker, if he or she is dedicated, will become an integral part 19
of your strategic planning or management team. 75 20
Here’s how to find a good banker: 21
1 Ask friends and colleagues to recommend their favorite 22
bankers. Many bankers move around, so if you find some- 23
one you like, you may be forced to follow that person from 24
one financial institution to another. 25
2 Set up interviews with a few potential bankers. Meeting face 26
to face is critical to making an informed decision. You 27
should ask for references and call other business owners 28
who are bank clients. Because changing banks is such a has- 29
sle, you want to invest time up-front and make a decision 30
based on research, as well as on gut feeling. 31
3 When you have selected a banker, schedule time to open all 32
your accounts at once, if possible. Be sure to link your 33
accounts together if you plan to move money back and forth 34
between them. If your deposit is large enough, you’ll proba- 35
bly qualify for a free safe-deposit box and other perks. 36
4 Once your money is safely tucked away, a good banker will 37
spend time getting to know as much as possible about you 38
and your business. 39
1 5 Consider a “non-bank” alternative, like a brokerage house, as
2 your primary money manager.
3 6 Invite your banker to visit your office or factory. Send copies
4 of new catalogs, press releases, annual reports, and so on.
5
6
7
Find a Strategic Partner
8 G R E AT finding the right strategic partner is a
9 critical key to success for many small companies.
10 41 Teaming up with a bigger, financially stronger part-
11 I D E A ner can provide a source of cash for growth and
12 expansion. Joining forces with a more creative, nimble, or
13 well-connected partner can open doors to new markets.
14 In the case of BabyPressConference.com, which provides
15 live streaming video from kiosks set up in hospital maternity
16 wards, the company relied on a strong relationship between
17 its owner and the chain of hospitals he worked for to raise
18 $4.9 million in 2000 when the rest of the dot-com world
19 was crashing. The company, founded in late 1998 by Lee
20 76 Perlman, executive vice president of the Greater New York
21 Hospital Association, capitalized on Perlman’s strong indus-
MONEY MATTERS
22 try connections when it came to promoting, placing, and

23 funding its video streaming services to hospitals. A for-profit
24 subsidiary of Perlman’s nonprofit trade association invested
25 $1.5 million in BabyPressConference.com and owns 40 per-
26 cent of the company. And Perlman openly acknowledged
27 that his current high-level executive position in the hospital
28 industry gave him access to the maternity ward, a very secure
29 place in the hospital.
30 Through BabyPressConference.com, proud parents can
31 broadcast live on the Internet from seventy-five hospitals,
32 reaching friends and family at no charge. The profit model?
33 The video file is only available online for two weeks after the
34 initial broadcast. The company hopes to make money by
35 selling families a CD-ROM of the thirty-minute broadcast
36 for $29.95.
37 Because parents and grandparents are avid consumers of
38 baby clothes, toys, and equipment, investors including
39 Toys“R”Us eagerly supported Perlman’s company and part-
nered with the BabyPressConference.com site by providing 1
links to its Babies“R”Us online store. When expectant par- 2
ents register for the webcast, they can also register for baby 3
gifts at Babies“R”Us. 4
Michael Goldstein, chairman of Toys“R”Us, said that the 5
business relationship with BabyPressConference.com was a 6
natural one. And, after using Perlman’s streaming video ser- 7
vice to introduce his newborn daughter to the world, Gold- 8
stein proclaimed to the Wall Street Journal that the service 9
was fantastic. 10
Perlman said he’s attracted a total of $13 million from 11
investors, including Cabletron Systems’ Enterasys Networks, 12
which sells technology to hospitals, and Primedia, which 13
owns American Baby magazine. “In a tough financing envi- 14
ronment, you have to look for the right strategic relation- 15
ships,” advises Perlman. 16
The right relationship can also spell the difference 17
between success and failure when it comes to raising money. 18
If you listened to your parents and went to a top university, 19
you may have a better shot at funding your dreams because 77 20
of your school ties. 21
“We believe entrepreneurs who have gone to top schools 22
have a better chance of success,” said James Marcus, CEO of 23
UniversityAngels.com. “So the question is, how can we help 24
these people achieve and succeed in the entrepreneurial 25
world? We’re very much based on alumni helping alumni.” 26
Founded in 1999 by four graduates of Harvard Business 27
School, UniversityAngels.com has facilitated about a dozen 28
deals since its launch in January 2000. The company has 29
also established a $20 million fund that intends to make 30
follow-on investments in a select group of companies that 31
receive funding through the network. 32
Angels and entrepreneurs can find each other via the 33
network of about seventy-five university-specific websites. 34
(Forty-five of the schools are U.S.-based.) So far, more than 35
2,000 graduates of top schools have registered as accredit- 36
ed investors with an interest in connecting with worthy 37
entrepreneurs. 38
“We received funding from people we never would have 39
1 contacted in any other way,” said Stephen Hassett, CEO and
2 cofounder of iTendant, Inc., a small Atlanta-based company
3 that sells software to property management companies. The
4 firm raised $780,000 from several private investors.
5 Although Hassett declined to say just how much money
6 came through his UniversityAngels.com posting, he said

7 that entrepreneurs trying to raise money should log on to the
8 UniversityAngels.com site to see if their alma mater quali-
9 fies for access to the network.
10 “They really did a great job in an extremely tough mar-
11 ket,” said Hassett. “There were a lot of eager investors and
12 they found some for us.” UniversityAngels.com can be
13 reached at 914-682-2028.
14 Forming alliances is time-consuming but has the advan-
15 tage of letting you work with established companies rather
16 than starting from scratch. Keep in mind that a successful
17 alliance has to create a win-win situation for everyone
18 involved.
19 Here are some things to consider before you craft a
20 78 strategic alliance:
21 ◆ Set clear goals for what every partner hopes to accomplish.
MONEY MATTERS
22 ◆ Clarify exactly what each party has committed to do to move

23 the project forward.
24 ◆ Specify who will be the key players and how they intend to
25 communicate with everyone involved.
26 ◆ Try a small project before you leap into a major initiative.
27 ◆ Regularly review the success of the project and make sugges-
28 tions for improvement.
29
30
31
Sell Stock inYourself
32 G R E AT do your customers love your products?
33 Then maybe they love your company enough to invest
34 42 in it. Small companies with loyal customers and grow-
35 I D E A ing potential are likely candidates for an alternative
36 form of financing called the direct public offering, or DPO.
37 “Ninety-five percent of the people who invest in a DPO
38 don’t have a broker and have never bought shares directly in
39 a company,” says Drew Field, a San Francisco securities
lawyer and certified public accountant who has helped 1
clients raise more than $120 million since 1976. Through 2
the years, he’s worked with a variety of companies from 3
banks to a clothing manufacturer, pasta maker, and a homeo- 4
pathic pharmacy. 5
Field, who charges a fee for his services rather than tak- 6
ing a piece of the deal, cautions that DPOs are not for 7
start-ups; they work best for successful companies with 8
devoted customers or “affinity groups,” as he calls them. 9
Successful DPOs take about a year to complete and require 10
an investment of time and money. Company owners and 11
managers usually offer shares directly to customers, gener- 12
ally via direct mail. 13
Many successful DPOs are launched by companies 14
involved in selling alternative products, such as natural foods 15
and energy conservation products. 16
For example, a DPO launched by Annie’s Homegrown, a 17
natural pasta maker based in Chelsea, Massachusetts, raised 18
more than $1 million in 1996. The average stock purchase 19
was about $580, said Field, who helped manage the deal. 79 20
The company let its customers know about the stock offering 21
by putting a coupon in the macaroni box. 22
This down-home approach works very well for companies 23
with a strong commitment to customer service. “You can’t 24
have a better customer than someone who owns the compa- 25
ny,” says John Schaeffer, president and chief executive officer 26
of Real Goods Trading Corp. 27
Schaeffer, who hired Field to help raise nearly $4 million 28
S O U RC E : B E L L G O T H I C R O M A N 5 / 6 A L L C A P S T RA C K 2 0
via two DPOs in the 1990s, is a true believer in the process. 29

The twelve-year-old Ukiah, California–based company sells 30
energy and conservation products through catalogs and at a 31
handful of retail stores. 32
In 1996 the company, which employs about 100 people, 33
opened a twelve-acre Solar Living Center in Hopland, Cali- 34
fornia, to demonstrate its products in action. The center has 35
since become a major tourist attraction. In July 1996, Real 36
Goods began selling its shares on the Nasdaq SmallCap 37
Market—good news for investors seeking more liquidity for 38
the stock. 39
1 Despite a few solid DPO successes, like Annie’s Home-
2 grown and Real Goods, the market for DPOs remains limit-
3 ed. “DPOs haven’t reached critical mass yet, because not
4 enough people know about them to make a market,” said
5 Tom Stewart-Gordon, publisher of the SCOR Report, a Dal-
6 las-based newsletter that tracks small corporate offerings.

7 Figuring out exactly how much money is raised through
8 these small offerings is tough, he said, because although
9 companies file a form with the Securities and Exchange
10 Commission, there is no agency or person tracking com-
11 pleted DPOs. Stewart-Gordon says the current best estimate
12 is that 30 percent of DPOs are successful.
13
14
15
If you are considering a direct
16 public offering
17
18 SAN FRANCISCO ATTORNEY and DPO expert Drew Field
19 has these tips for entrepreneurs considering selling stock
20 80 directly to their customers. Ask yourself these questions:
21 ◆ Is my business profitable, and would it interest prospec-
MONEY MATTERS
22 tive investors?
23 ◆ Can my business be understood by people who may have
24 no experience buying stock?
25 ◆ Does my company have affinity groups who would recog-
26 nize our name and products?
27 ◆ Can we obtain names, addresses, and phone numbers of
28 people in our affinity groups?
29 ◆ Can our management team devote time to the offering?
30 ◆ Do we have audited financial reports for at least two
31 fiscal years?
32 If the answer to most of these questions is yes, look
33 further into DPOs. Also, read Field’s book, Direct Public
34 Offerings: The New Method for Taking Your Company Public
35 (Sourcebooks; 1997).
36 The SCOR Report is available for $280 a year from Tom
37 Stewart-Gordon. Write to P.O. Box 781992, Dallas, TX
38 75378.
39
One of the smallest DPOs in history raised $470,000 1
for Hahnemann Laboratories Inc., a homeopathic pharma- 2
cy in Albany, California. Founder and president Michael 3
Quinn said he turned to his customers for help because he 4
didn’t have the money needed to build an FDA-licensed 5
laboratory. The company produces natural homeopathic 6
remedies, which are considered an alternative to synthetic 7
prescription drugs. 8
Quinn, a former hospital pharmacist, sent 30,000 letters 9
to people on his mailing list. He followed up with a prospec- 10
tus to 2,100 people who asked for more information. A total 11
of 242 investors ended up investing just under $2,000 each. 12
The new lab in San Rafael cost about $250,000—money 13
raised by the DPO. Quinn said legal, accounting, printing, 14
and postage costs for the offering were about $103,000, but 15
said it was money well spent. “It’s worth the time and money 16
it takes if you are totally committed to the work you’re 17
doing,” said Quinn. 18
19
20
Rent a Financial Genius 81
21
G R E AT ward wieman, founder of management 22
Overload in Santa Monica, California, helps small, 23
43 fast-growing companies manage rapid growth. To 24
I D E A manage his own cash flow, he says, “I rent a financial 25
genius once a month.” Relying on this kind of outside exper- 26
tise helps him keep track of his big financial picture. 27
“These temps have proven to be exceptional,” said Wie- 28
man, who pays about $250 to $300 an hour for savvy finan- 29
cial advice. “For many business owners, these finance man- 30
agers do a good job at managing the resources the company 31
already has. Sometimes they will tackle or identify a potential 32
problem, like when a business owner doesn’t know whether 33
he’s making or losing money.” 34
Many businesses can’t afford, or don’t need, a full-time 35
chief financial officer. If that’s the case, you can “rent” a very 36
competent one. “A finance pro can highlight the problems 37
and the strong points of your business,” Wieman said. 38
He also reminds business owners that no matter what 39
1 happens in the business world, “cash is king.” “The only true
2 growth is in profits,” Wieman said. “If profits are not grow-
3 ing faster than revenues, something’s wrong.”
4 In addition to renting a financial expert, you can rent a
5 credit manager. Eric Shaw, founder and president of New
6 York Credit in Marina del Rey, California, handles accounts

7 receivable for many small- and medium-sized companies.
8 You can hire a financial genius to handle numerous
9 tasks—in-firm accounting, accounts payable, long-term
10 financial planning, fiscal year-end bookkeeping, valuing your
11 business, and any number of other figure-crunching feats.
12 But remember that discretion is often of the essence here.
13 Shaw, for instance, prefers that his clients be unaware that
14 the person calling them for payment is a “hired gun.”
15 For your business purposes, however, it doesn’t really
16 matter whether your financial genius is on-staff or rented—
17 as long as he or she can keep an eye on the finances.
18
19
20 82
Sell at the Right Time and Price
21 G R E AT
business broker colin gabriel has some
MONEY MATTERS
22 simple advice for entrepreneurs: Keep your finan-

23 44 cial statements audited and buff up your business
24 I D E A plan. Why? Because you never know when a buyer
25 will show up.
26 “The best buyers are the ones who come knocking on
27 your door, because they have an interest in your company,”
28 said Gabriel, author of How to Sell Your Business—And Get
29 What You Want: A Pragmatic Guide with Revealing Tips
30 from 57 Sellers (Gwent Press; 1998) and founder of Gwent
31 Inc. in Westport, Connecticut.
32 Gabriel specializes in selling manufacturing companies
33 with annual sales in excess of $3 million. In today’s global
34 economy, there are no boundaries for where your buyer
35 comes from. For example, Gabriel once brokered the sale of
36 a New Jersey firm to a company in France that he found on
37 the Internet. It gets even better: It didn’t matter to the French
38 buyer that the New Jersey company’s electronic products
39 were made in a Taiwanese-owned Chinese factory.
Savvy sellers know they will be put under a microscope 1
during a transaction, but they turn the tables on the buyer by 2
learning as much as they can about them. Doing your home- 3
work may reveal what Gabriel calls “nasty surprises.” But it’s 4
better to know of problems in advance, in case you need to 5
call off the deal. 6
Don’t be afraid to ask the prospective buyer for a current 7
balance sheet and details about the financing. Gabriel said 8
many deals are highly leveraged, and the new owner may be 9
planning to saddle your company with debt the minute the 10
deal closes. 11
“With a leveraged buyout, someone will borrow 70 to 80 12
percent of the purchase price and laden the company with 13
debt. The astute seller has to decide in advance whether to 14
engage in a deal like that,” said Gabriel. 15
Borrowing money to buy a small business is common, he 16
said, because it’s much easier to finance a $100 million deal 17
than a $3 million deal. Your buyer may also ask you to pro- 18
19
Gabriel’s best tips for sellers 83 20
21
◆ Don’t be unrealistic about the value you place on your 22
firm. 23
◆ Be patient. Art is auctioned; houses are sold slowly. Most 24
businesses are like houses. 25
◆ Sell future profits and document these expectations. 26
◆ Invest in audited financial statements that permit you to 27
close the deal faster and demand more cash at closing. 28
◆ Understand the financing and know what the balance 29

sheet will look like after the closing. 30
◆ Disclose everything; problems can threaten the price and 31
the deal. 32
◆ Remain on guard until the deal is signed. 33
◆ Take charge, listen to your advisers, but don’t give up the 34
helm. 35
◆ Sell the assets or sell the shares. It’s usually better to sell 36
shares rather than assets. If you sell the assets, you may 37
face double taxation. 38
39
1 vide some of the financing by taking back a promissory note.
2 If you don’t want to end up owning the company again, don’t
3 get involved in financing the deal.
4 Gabriel has this advice for the timing of your deal: “Go
5 slowly before shaking hands on the price; after shaking
6 hands, go as quickly as possible.” Moving quickly will help

7 your employees and vendors accept and adjust to the
8 changes.
9 Even when they are approached by an eager buyer, sellers
10 often face a rude awakening when it comes to setting a value
11 for their firm. Most entrepreneurs set the price for their
12 business too high because they have worked so hard to make
13 it flourish. “They are successful people, making lots of
14 money, beating their competitors. They think this sale will be
15 similar to other negotiations they have had,” said Gabriel. “It
16 is not.”
17 He said many business buyers are practiced “and know
18 the subtleties concerning taxes and other issues.” Before
19 considering any deal, make sure you get solid legal and
20 84 accounting advice. You have to determine whether to sell the
21 assets of the business or the shares. Both have tax advan-
MONEY MATTERS
22 tages and disadvantages.

23 Gabriel’s parting words surprised me: “Finding the buyer
24 is not difficult; buyers are abundant. Good sellers are the
25 ones in short supply.”
26 Think about it!
27 You can reach Colin Gabriel at P.O. Box 5026, Westport,
28 CT 06881; 800-462-9183. The e-mail address is cgabriel@
29 optonline.net.
30
31
32
Be Prepared for the Sale
33 G R E AT thousands of small businesses change
34 hands every year, but often not enough money is left
35 45 in the hands of the seller.
36 I D E A I asked David Troob, former chair of the Geneva
37 Companies, an Irvine, California–based mergers and acqui-
38 sitions firm, to share some advice about preparing your busi-
39 ness for sale.
Here are his tips: 1
◆ Have an exit plan. “Most entrepreneurs have start-up plans 2
and growth plans,” he said. “But too many fail to prepare for 3
the time when they want to sell the business or reduce their 4
day-to-day involvement.” 5
◆ Know the market value of your business. Know the value in 6
the world marketplace. “Simple formulas are often mis- 7
leading and inaccurate measures of the value of a private 8
business.” 9
◆ Explore ways to increase value. “A business could be made 10
more attractive to prospective buyers if changes are made in 11
the organization, key personnel, or marketing strategies.” 12
◆ Understand when the market is ready. “Be ready when buyers 13
are active, money is plentiful, and interest rates are low.” 14
◆ Don’t assume the best buyer is local. 15
◆ Document the growth potential of your business. 16
◆ Consider which perks you’ll miss after selling your busi- 17
ness. “Usually the transaction can be structured to retain 18
those executive perks which you enjoy while meeting the 19
buyer’s needs.” 85 20
21
In addition to implementing these tips, be sure to work 22
with a competent attorney and accountant. This is not a time 23
to scrimp on professional help. 24
25
26
Use a Savvy Real Estate Broker 27
G R E AT
if it’s time to move out of the back 28
bedroom or garage, it means your business is 29
46 doing well enough to pay rent. But moving into 30
I D E A commercial space is a serious financial commit- 31
ment. In many cases, rent is the second-highest expense 32
after payroll. 33
It’s also something that takes time and energy away from 34
managing your business. So if you’re feeling cramped now, 35
get going, because depending on the market, a relocation 36
can take six months or more to execute. 37
If you and a couple of staffers are looking to rent basic 38
office space, you can probably do it on your own. But if 39
1 you have more than five employees and need more than
2 1,500 square feet, working with a savvy broker is a good
3 idea. Plus, in many cases, landlords pay the broker’s com-
4 mission.
5 Leasing space is a complicated business deal, so relying
6 on professional help is smart. “You as a small business

7 owner are not in the real estate market day in and day out,”
8 said Steven Swerdlow, executive vice president at CB Richard
9 Ellis in Manhattan. “It’s very important for you to organize a
10 team that’s expert and that you can trust.”
11 Swerdlow recommends working with both a broker and a
12 real estate attorney because few business owners are familiar
13 with real estate law or jargon. “A lease is a specialized docu-
14 ment,” he said. “There are people who work with leases and
15 know how the game is played.”
16 Being able to get out of your lease by subletting the
17 space is very important, he said. “Keep your flexibility,”
18 advises Swerdlow. “I can’t tell you how many lease trans-
19 actions we’ve been involved in where we did all kinds of
20 86 planning for long-term leases and, invariably, the world
21 changes, and you’re either too small or too big for the
MONEY MATTERS
22 space.”
23 Sit down with your employees and decide exactly how
24 much space you need. Brokers say figure on renting about
25 250 square feet of rentable space per employee as a rule of
26 thumb. Write down what you need in terms of private
27 offices, conference rooms, a reception area, storage space,
28 kitchen, parking, and security.
29 Be sure to factor in growth.The worst thing is moving in
30 and realizing that you will soon outgrow your new digs. If
31 you end up with an extra office or two, you might consider
32 subleasing to another small business owner. But be sure
33 your lease allows you to sublease.
34 Feeling good about where you work is essential. It’s well
35 worth your effort to find the right broker to help you locate
36 space and sign a lease that suits your needs.
37 For tips on choosing office space that fits your specific
38 business, see Great Idea 71.
39
1
Shop Carefully for 2
3
Long-Distance Service 4
G R E AT every day, entrepreneurs are bombarded 5
with offers by long-distance companies. Deregula- 6
47 tion has created absolute chaos and confusion in the 7
I D E A marketplace. But you can sort it out if you know the 8
right questions to ask. 9
Gerald Dunne Jr., former chief executive officer of Group 10
Long Distance Inc. in Fort Lauderdale, Florida, put together 11
this list of questions to ask. Before you make comparisons, 12
get the answers from your current carrier. 13
1 Does your company bill in six-second increments, or will I be 14
charged for a full minute no matter how brief the call? 15
2 Will I be billed at the same rate for calls made during the 16
day, evening, or night? How will interstate, intrastate, and 17
international calls be billed? 18
3 Do you bill me directly, or will I have to resolve any billing 19
disputes through my local phone service provider? 87 20
4 What other services do you provide? Conference calling? 21
Calling cards? Debit cards? Internet access service? 22
5 Does your company own its own switches, or will my calls be 23
subjected to multiple rerouting? 24
6 Who is your underlying carrier? Is it AT&T or a smaller, less- 25
known carrier? 26
7 How long has your company been in business? 27
8 Are you privately or publicly owned? 28
9 In how many states are you licensed to operate? Licensing by 29
the public service commission in all fifty states indicates a 30
strong, established company. 31
10 Are you a member of the Telecommunications Resellers Asso- 32
ciation? Membership in this trade group is important to rep- 33
utable companies. 34
35
After getting answers to these questions, you should 36
be better able to make an informed decision. Periodically 37
check your bills to make sure you are being served by the 38
company of your choice. “Slamming”—illegally switching 39
1 customers—is a nasty and prevalent tactic. You shouldn’t
2 be switched unless you personally sign an authorization
3 form.
4 If you receive bills from an unknown company, call your
5 local phone company and demand to be switched back.
6
7
8
LockYour Supply Cabinet
9 G R E AT profit-meister barry schimel shared this
10 idea. If your office supply bill is skyrocketing, and the
11 48 supply closet shelves are always empty, try locking the
12 I D E A closet. Hand the key to one responsible person, the
13 office manager, or if that’s not feasible, to a couple of man-
14 agers or supervisors on different shifts. This way, no one can
15 just root around for an armload of supplies. Add a sign-out
16 sheet, too, to monitor who is taking what.
17 If this sounds too draconian, take a lighter approach. At
18 the end of a staff meeting, ask everyone to go back to their
19 desks and rescue all the pencils, pens, and markers hidden
20 88 under piles of paper or tucked into the backs of drawers.
21 Look in your briefcase or purse, too—you’ll be surprised by
MONEY MATTERS
22 how many writing implements you will find there.

23
24
25
Set Up a SIMPLE Retirement Plan
26 G R E AT until recently, a business as small as
27 Grassland Media in Madison, Wisconsin, had few
28 49 pension plan options for its owners and three
29 I D E A employees. The nearly twenty-year-old company,
30 founded by Stu Stroup, makes industrial videos for a variety
31 of clients. “We had been interested in establishing some
32 kind of retirement benefits,” said Stroup. “But a 401(k) plan
33 seemed intimidating with all the paperwork.”
34 Paperwork and complex tax filings discourage many
35 smaller companies from offering any sort of retirement ben-
36 efits for workers. However, with a push from former Senator
37 Bob Dole, Congress did entrepreneurs a favor in 1996 when
38 it established the Savings Incentive Match Plan for Employ-
39 ees of Small Employers, better known as SIMPLE.
“There was a gap for companies with five to fifty 1
employees, so that’s where SIMPLE meets a need,” said 2
Jeanette LeBlanc, marketing manager for T. Rowe Price 3
in Baltimore. “The plan allows employers to share the cost 4
of funding, and it’s really easy. There are no IRS filings 5
to be made, no testing for discrimination, and minimal 6
paperwork.” 7
In fact, T. Rowe Price and other major financial firms 8
make it very easy to set up a SIMPLE plan. They’ll happily 9
send you a kit that includes forms for the employer and 10
employees to fill out and return. The employer fills out a 11
5305 form for the IRS that allows the brokerage to establish 12
the plan and give it a number. 13
The employee completes some paperwork establishing 14
an Individual Retirement Account (IRA) and makes a 15
deposit. “The employees select all the funds their money 16
goes into,” said LeBlanc. “Employers like it because it’s very 17
hands-off.” Employees can contribute up to $6,000 a year 18
on a tax-deferred basis. Employers match their contribution 19
with 1 percent to 3 percent of annual compensation. 89 20
Saving a few thousand dollars a year may not sound too 21
impressive, but consider this scenario offered by LeBlanc: 22
Your employee earns a salary of $50,000 a year and con- 23
tributes $6,000 a year to his or her own retirement 24
account; you kick in $1,500 a year. At the end of twenty 25
years, the employee would have just under $400,000 if the 26
investments selected generated a fair 9 percent rate of 27
return. 28
Meanwhile, Stu Stroup’s employees are happy about hav- 29
ing the SIMPLE plan in place. “We’re matching the first 3 30
percent of the employee’s contribution, dollar for dollar,” 31
said Stroup. “Getting started was pretty straightforward. It 32
didn’t take more than three or four hours to do. Much of that 33
time was spent just talking with our employees about the 34
plan. Basically, we just had to fill out a few forms, and we 35
were done.” 36
37
38
39
1
2 Create an Employee
3
4
Stock-Ownership Plan
5 when a small business owner wants to cash
G R E AT
6 out or pull some equity out of his or her business,
7 50 there are several options. One of the best options for
8 I D E A both employers and employees is an employee stock-
9 ownership plan, or ESOP.
10 ESOPs allow business owners to sell company shares to
11 employees at a fair price. ESOPs also provide significant tax
12 benefits for owners while providing retirement benefits for
13 workers. Workers who own shares usually feel more loyal
14 and driven to perform, so productivity increases and, as a
15 result, their stock increases in value. An ESOP can also help
16 finance the expansion of the business, so everyone benefits.
17 ESOPs work especially well for small, stable companies
18 with fewer than 100 loyal, long-time employees. “The
19 employees get all the economic benefits of being a share-
20 90 holder without the liabilities,” said Steve Bohn, senior vice
21 president of business advisory services for Merrill Lynch.
MONEY MATTERS
22 Merrill Lynch helps finance ESOPs for companies around

23 the country.
24 Bohn, who had twenty-one ESOPs in progress when we
25 spoke, said there are about two hundred to four hundred
26 ESOPs set up every year. They work well for a variety of com-
27 panies in a wide cross section of industries.
28 America has about 11,500 employee stock-ownership
29 plans, according to the ESOP Association in Washington,
30 D.C. In a 1995 study by the ESOP Association, 60 percent of
31 member companies said productivity increased after the
32 ESOP was put into place. Of those surveyed, 86 percent said
33 creating the ESOP was a “good decision”; only 2 percent said
34 it was a “bad decision.”
35 One huge perk for business owners is the ability to deduct
36 both the principal and interest on any loan used to finance
37 an ESOP. “In essence, you are sheltering a bunch of income
38 that you used to pay taxes on,” said Bohn. “You can use the
39 entire distribution tax-free.”
If you are thinking of creating an ESOP, you’ll need a 1
team made up of an attorney, an accountant, and a banker 2
or brokerage to provide the cash to buy the shares. You’ll 3
also need a skilled administrator to keep track of the 4
paperwork and distribute shares when employees quit or 5
retire. Most employees are vested in the plan after five to 6
seven years. 7
“We were the ideal company for an ESOP,” said Skip 8
Musgraves, chief financial officer for Tesco Williamsen in 9
Salt Lake City, Utah. “It doesn’t work for everybody, but in 10
our case it was a perfect fit.” 11
The company, which began making covered wagons in 12
the 1890s and now makes truck-mounted heavy equipment, 13
had merged with another equipment maker in the 1980s 14
and soon after hit a sales slump. “Two struggling companies 15
came together, and it was a rough road,” said Musgraves. 16
In 1994 the company president wanted to liquefy some of 17
his investment and was looking for tax benefits, Musgraves 18
said. Tesco Williamsen did a leveraged ESOP, borrowing 19
under $5 million from its local commercial bank to set up 91 20
the plan. Every dollar spent paying off the loan is tax 21
deductible, “dollar for dollar,” said Musgraves. 22
The eighty-five loyal employees each received stock in the 23
company and were fully vested seven years from when the 24
plan was created. “They not only have the money they make 25
in salary but a piece of the action,” said Musgraves. 26
He said it is important to explain the ESOP process to 27
employees to make sure they fully understand the benefits. 28
They also need to know it doesn’t cost them anything, 29
because only the company invests in the plan. “Make sure 30
your employees understand what a wonderful, rich benefit it 31
is,” said Musgraves. 32
If you are interested in finding out more about ESOPs, 33
contact Merrill Lynch or any other major brokerage for 34
information. Contact the ESOP Association at 1726 M St., 35
NW, Washington, D.C. 20036; 202-293-2971; via e-mail: 36
esop@the-esop-emplowner.org; or at their website: 37
www.the-esop-emplowner.org. 38
39
1
2 Join a Captive Insurance
3
4
Company to Cut Costs
5 sign maintenance workers perched in
G R E AT
6 “cherry-pickers” three hundred feet above Times
7 51 Square would make most insurance brokers sweat.
8 I D E A But not Richard Butwin, who has been the Artkraft
9 Strauss Sign Co.’s broker for the past seven years.
10 Six years ago, Butwin, a principal in the Nathan Butwin
11 agency in Great Neck, New York, encouraged Artkraft to join
12 what is known as a “captive” insurance company.
13 Captives are a form of self-insurance designed to serve
14 small manufacturing companies seeking to reduce their
15 workers’ compensation and liability insurance premiums.
16 There are about 3,200 captive insurance companies in
17 existence.
18 “The primary reason to join a captive is to gain long-term
19 control over your insurance costs and make them level and
20 92 predictable,” said Butwin. To take advantage of favorable tax
21 benefits, most captives are based in Bermuda or the Cayman
MONEY MATTERS
22 Islands, Butwin said.

23 Captives are best suited for companies with good safety
24 records, especially ones that are willing to implement worker
25 safety programs aimed at keeping claims at a minimum.
26 Members of the captive hire an outside firm to process
27 claims and purchase extra insurance to pay off major claims.
28 They share overhead expenses and investment income, if
29 any remains after paying all necessary expenses and claims.
30 He said the annual premium is based on each company’s
31 five-year claims history. “Companies pay about 20 percent
32 less going into the program and over time can save 40 to 60
33 percent on their insurance premiums,” he said.
34 Butwin encouraged Artkraft to join a captive insurance
35 company about six years ago, when its workers’ compensa-
36 tion and liability insurance premiums approached
37 $500,000. Insurance is a major expense for the 105-year-old
38 sign maker. The company’s eighty-five employees design
39 and build neon and electronic signs in a 40,000-square-foot
building overlooking the Hudson River. Published reports 1
estimate the privately held company’s annual sales at about 2
$15 million. 3
Like many successful entrepreneurs, president Tama 4
Starr said she is too busy running the company to fret about 5
insurance. “Workers’ comp is a big issue, and it’s always 6
been a headache,” said Starr. “This [the captive] has offered 7
some relief.” 8
Neil von Knoblauch, Artkraft’s chief financial officer, said 9
the captive has reduced the company’s overall insurance bill 10
by about 20 percent. Von Knoblauch, who served on the cap- 11
tive insurance company’s board of directors, says he received 12
detailed monthly reports of all claims and activities. He also 13
voted on whether to admit new members to the group. In 14
past years, he’s watched their captive’s membership grow 15
from sixteen to twenty-five members. The member compa- 16
nies are involved in a variety of industries located across the 17
United States, he said. 18
As for the investment income shared by members, von 19
Knoblauch says “It’s really a little bit of icing on the cake.” 93 20
Kept in an offshore bank account, the money earns about 21
5 percent on a tax-deferred basis. “The money that’s down 22
there is really to pay claims—you don’t want to put it in risky 23
investments,” said von Knoblauch. 24
For more information on captives, contact your insurance 25
broker. 26
27
28
Be Prepared to Accept Credit Cards 29
G R E AT many big and small clients prefer to pay 30
their bills with credit cards. If you run a retail busi- 31
52 ness, restaurant, or offer professional services, such 32
I D E A as consulting, production, or design, you will need to 33
enable your business to accept credit cards. A plus for your 34
business: Credit card payments can substantially boost your 35
cash flow by encouraging customers to pay you right away 36
for products and services, rather than waiting the customary 37
thirty days to pay. And, your customers will appreciate this 38
payment option because they can charge purchases to rack 39
1 up airline mileage or enjoy some breathing space by financ-
2 ing their purchase for thirty days.
3 A few months ago, one of our best clients, a financial ser-
4 vices giant, wanted to pay a big invoice due within days of
5 receipt via a corporate credit card. Unfortunately, at the time,
6 we didn’t have a merchant account set up. Although the

7 company agreed to transfer the money electronically to our
8 bank account as an alternative, setting that up required a pile
9 of paperwork and two weeks to accomplish.
10 A simple and cost-effective way to accept credit card pay-
11 ments is to set up a merchant account. A merchant account
12 is a bank account that enables credit card networks to route
13 funds to you. How it works: You approve the sale and take
14 the customer’s credit card details, the card is verified and
15 approved (a service your merchant account company can
16 provide), your merchant account provider passes the details
17 to their credit card processor, and the credit card processor
18 then debits the customer’s credit card and deposits the
19 money into your business bank account.
20 94 Applying for a merchant account is easier than you may
21 think. Every commercial bank offers credit card processing
MONEY MATTERS
22 services, but initial set up and per-transaction processing

23 fees vary considerably, so shop around. If you are home-
24 based, you may have a tougher time being approved for a
25 merchant account, but if you provide financial statements
26 and tax returns showing you are a solid business, you will
27 most likely be approved.
28 Costco’s Executive membership program has an excellent
29 merchant card service. There is a modest set-up fee (usually
30 under $50), and you can apply to accept Visa, MasterCard,
31 Discover, and American Express cards with one application.
32 You’ll pay a fee ranging from 1.5 percent to 3.5 percent per
33 transaction. Although, the processing fees are based on the
34 volume charged and if you are a big customer, may be nego-
35 tiable. For more information, call Costco at 800-774-2678
36 (www.costco.com).
37 A merchant credit card account can be linked to your
38 business checking account, so all fees are automatically with-
39 drawn and all monies are deposited directly into your busi-
ness account. You can process charges over the phone, 1
online, or by mail. If you sell products or services outside of 2
your office, consider ordering the portable “swiper” (about 3
$30 each), which allows you to accept credit cards anywhere. 4
If you are processing dozens of charges a week, it makes 5
sense to have the electronic processor that automatically 6
approves and records charges via a telephone line in your 7
office. The electronic processors cost around $200 each. 8
When selecting a merchant account provider, it’s impor- 9
tant to consider the options they offer. Make sure you 10
research the following: 11
◆ What kind of security do they offer your customers? Do they 12
use encryption technology? This is especially important for 13
Internet transactions. Your customers will want to feel secure 14
when sending their personal credit card information. 15
◆ Credit card fraud protection. Will they check if the card has 16
been stolen or has expired? Accepting invalid card transac- 17
tions can cost your company a lot of money. 18
◆ What other services do they provide? Will they verify a cus- 19
tomer’s address? Can they enable other non-cash payments 95 20
such as ATM or debit cards? 21
◆ What kind of customer service do they provide? Will you 22
be able to reach them twenty-four hours a day, seven days 23
a week? 24
◆ Are fees refundable on returns? What is their policy if a 25
transaction dispute arises? 26
◆ What’s the average wait time for money to reach your 27
account? Is there a way for you to easily access your deposit 28
history? 29
30
31
Collect the Money People OweYou 32
G R E AT when people owe you money, it hurts you 33
and your business. No matter how careful your 34
53 credit-granting policy may be, someday, sometime, 35
I D E A some people will fall behind on their bills and owe 36
you money. 37
The key to collecting money from customers is to do it in 38
a way that won’t ruin the business relationship. First, you 39
1
2
3
Tips for finding the right
4 collection agency
5
6 ◆ Ask for a client list; call other clients for references.

7 ◆ Visit the company offices to check out the operation first-
8 hand.
9 ◆ Try to meet with the owner or manager.
10 ◆ Don’t base your decision primarily on price, because pay-
11 ing an agency a higher percentage to work harder on your
12 behalf may actually bring in more cash.
13
14 have to determine whether the person or company has tem-
15 porarily fallen on hard times, or if it is going under and has
16 no ability or intention to pay up.
17 If a good customer is experiencing a short-term cash flow
18 crunch, you might want to be patient. But speak directly with
19 the business owner and tell him or her that while you are
20 96 prepared to wait a few weeks longer for payment, you expect
21 to be paid what is owed on the account. You should also ask
MONEY MATTERS
22 for a partial payment as a sign of good faith.

23 If you find out a customer is going out of business, move
24 quickly to try to collect something before all the assets
25 vanish. Ask your lawyer to write a strong collections letter.
26 If there is no immediate response, you might look into fil-
27 ing what is called a “writ of attachment” in court. This puts
28 the matter before a judge, who can call a hearing to deter-
29 mine whether there are any assets to attach. You may not
30 end up being paid in cash, but if the business is liquidated
31 you could end up with office furniture, a truck, or some
32 other equipment. However, try a firm collections letter
33 before going to court.
34 When you write a collections letter, be sure to:
35 ◆ Clearly tell the customer what he owes.
36 ◆ State your demand; spell out exactly what you want him
37 to do.
38 ◆ Explain your next course of action if he doesn’t pay right
39 away.
If you don’t have the time, patience, or staff to deal with 1
deadbeat customers, it might be better to turn matters over 2
to a collection agency. Collection agencies work on a contin- 3
gency basis, usually keeping about 35 percent of what they 4
collect as payment for their services. 5
6
7
Hire a Debt Arbitrator 8
G R E AT at ten, robert “bobby” blumenfeld was 9
already working the sales floor of his parents’ retail 10
54 stores in the Catskill Mountains. At twelve, he was 11
I D E A selling men’s suits. So Blumenfeld isn’t bragging 12
when he says he knows every aspect of the retail business. 13
He’s worked both inside and outside of companies as an 14
investor, owner, and consultant. Through the years, he’s seen 15
too many companies drown in debts when they could have 16
been saved. 17
He said many creditors misinterpret a company’s failure 18
to pay as a lack of desire to pay. These misunderstandings 19
lead to costly litigation and aggravation. That’s when he steps 97 20
in to help. 21
“I always enjoy trying to save a business, versus shutting 22
the door on them,” said Blumenfeld, who now works as a debt 23
arbitrator, negotiating settlements to help both sides resolve 24
their financial distress. As a debt arbitrator, Blumenfeld sorts 25
through the situation to negotiate a settlement. He works on a 26
contingency basis for debtors, earning a percentage of the sav- 27
ings he creates. For example, if you owe a creditor $100,000 28
and Blumenfeld settles the debt for $30,000, you would pay 29
him about 35 percent of the $70,000 you saved. 30
“A settlement provides creditors with immediate cash and 31
avoids the enormous financial and human costs of litiga- 32
tion,” said Blumenfeld. “Debtors have the opportunity to 33
reduce their debt burden, improve their balance sheet, and 34
increase cash flow.” 35
Arbitration can often save a small, struggling business 36
from disaster. Blumenfeld can also help clients locate financ- 37
ing and sort out other financial problems as part of the 38
process. 39
1 “Large companies can turn to an army of internal spe-
2 cialists who can often negotiate highly favorable terms with
3 creditors,” he said. “That leaves small- to medium-sized
4 businesses without the resources to assist them in debt
5 negotiation.”
6 Blumenfeld said American business owners are often in a

7 cash crunch because they aren’t paid for thirty to sixty—or
8 even ninety—days after they deliver the goods. In Europe,
9 terms call for payment in fifteen days, which really keeps the
10 cash flowing.
11 Blumenfeld has been very busy lately because the apparel
12 industry is in tough shape. On a recent visit to the chil-
13 dren’s apparel building in New York City’s garment district,
14 he was sad to see the showroom floors half empty. “There is
15 massive consolidation and a whole new set of rules in retail-
16 ing,” he said.
17 Debt arbitration, he said, is very common in Europe and
18 slowly catching on in this country. You can find a good arbi-
19 trator by contacting the International Association of Busi-
20 98 ness Mediation Consultants at 800-549-2128.
21
MONEY MATTERS
22
23
Fight Unnecessary Chargebacks
24 G R E AT every year, hundreds of small apparel
25 manufacturers are charged millions of dollars for fail-
26 55 ing to ship clothing to stores in “floor ready” condi-
27 I D E A tion. Retailers, contending that without specifications
28 there would be chaos in their stores, deduct funds for items
29 that are not packed in the right kind of box, hung on the
30 right hangers, or properly tagged.
31 Smaller manufacturers have the most trouble meeting
32 these demands, and while they can protest these deductions
33 or chargebacks, it’s a long and tedious process. Major retail-
34 ers publish telephone book–sized packing and shipping
35 guides for vendors who want to do business with them.
36 There is little consistency; every retailer has a different set of
37 specifications. Bill Chapman, accounting manager for Seattle
38 Pacific Industries Inc., offered an example: “We were
39 charged $150 for putting a piece of tissue paper in a carton.”
Seattle Pacific, which sells trendy casual wear to Sears, 1
Mervyn’s, and Federated, among others, is trying to reduce 2
its chargebacks from about $10 million a year to $2 million. 3
Company executives have made reducing chargebacks a top 4
priority, and the company’s 250 employees are working hard 5
to reduce problems caused at their end. 6
John Metzger, founder and chief executive officer of 7
Creditek, a financial services outsourcing company based 8
in Parsippany, New Jersey, said U.S. retailers have grown 9
so huge through consolidation that it’s difficult for a $10 10
million clothing company to do business with an $8 billion 11
retailer. 12
“I fear that in five to ten years, the innovative, small fash- 13
ion houses are going to go out of business,” said Metzger. 14
“It’s a scary scenario for the apparel industry.” Metzger said 15
small companies find that dealing with chargebacks “is grue- 16
somely technical, detailed, and labor-intensive work.” 17
Sandi Wolf, chargeback manager for Gabar Inc., a Farm- 18
ingdale, New York, maker of resort and swimwear, agrees. 19
Plus, she said, the penalties have become “beyond outra- 99 20
geous.” On the day we spoke, Wolf was dealing with a 21
$2,000 penalty for shipping too many swimsuits to a store. 22
She said chargebacks can equal 2 to 5 percent of total annual 23
sales, which is significant for smaller companies like Gabar, 24
with sales of under $50 million. 25
Ken Green, president of the Internal Audit Bureau in 26
Hamlin, Pennsylvania, helps companies like Gabar recover 27
chargebacks and provides other accounting support services. 28
IAB is paid a percentage of the funds collected, usually less 29
than 50 percent. 30
Green said the big guys win most battles in the charge- 31
back war. “It used to be a 65/35 percent split in favor of the 32
retailers,” said Green. “Now, it’s 75/25 percent in favor of 33
retailers.” To their credit, several major retailers, including 34
Federated, are involved in an industrywide effort to make life 35
easier for small manufacturers. 36
“The wave of the future is the website, where, with the 37
proper security codes, manufacturers could find out what’s 38
wrong and correct the problems in advance,” said Kim 39
1 Zablocky, president of the New York Credit and Financial
2 Management Association (NYCFMA), which represents
3 credit managers in many industries. Henry Gerstman, a
4 NYCFMA member and treasurer of Century Business Credit
5 Corp. in Manhattan, which finances apparel transactions,
6 agrees that better computer systems can simplify the com-

7 plex relationships between manufacturers and retailers.
8 He served on a high-level industry committee revising the
9 standardized computer codes used in the apparel industry.
10 Gerstman said small companies who want to sell to major
11 retailers have to become computer literate. Sears, Penney’s,
12 Dillard’s, and Wal-Mart already require vendors to use elec-
13 tronic data interchange, or EDI, to transmit purchase orders
14 and/or invoices and payments.
15 “We are also developing a prototype Internet facility for
16 retailers,” said Gerstman. “We recognize the tremendous
17 value of the Internet.” He cautioned that it could take five to
18 ten years for electronic commerce to solve the problems.
19 Meanwhile, back in Seattle, Seattle Pacific’s Chapman
20 100 said the company is taking a new approach to the chargeback
21 dilemma. “We are going after the specialty stores,” which
MONEY MATTERS
22 have much friendlier shipping and receiving policies, he

23 said. “With smaller retailers you [the manufacturer] are in
24 the driver’s seat.”
25
26
27
Buy Disability Insurance
28 G R E AT a busy entrepreneur risks losing every-
29 thing if he or she is temporarily or permanently

30 56 unable to work and is not properly insured. Yet insur-
31 I D E A ance executives estimate that only 30 to 40 percent of
32 the nation’s small business owners have disability insurance.
33 This is a chilling statistic, especially when you consider that
34 at age thirty-seven—the prime age for an entrepreneur—the
35 probability of becoming disabled is three and a half times
36 higher than the probability of death.
37 Virtually all personal disability policies offer the same
38 kinds of benefits. They generally pay a monthly benefit that
39 is slightly less than what you would earn if you were healthy
and working. This gap is intentional: Insurers want you to 1
have an incentive to get well and return to work. 2
The kind of policy you qualify for depends on what you 3
do for a living. Professionals, such as attorneys and archi- 4
tects, usually have the easiest time buying disability insur- 5
ance. Automobile and real estate salespeople, subject to the 6
ups and downs of the economy, have a tougher time. People 7
in risky professions—such as private detectives, construc- 8
tion workers, and actors—may have to look a long time for a 9
policy. Insurance companies tend to distrust home-based 10
entrepreneurs, thinking they are less stable and more likely 11
to fake accidents. When my firm was home-based, I man- 12
aged to buy disability insurance only because my insurance 13
agent visited my office several times and convinced his 14
bosses that I was running a legitimate communications 15
business. 16
Insurance underwriters look at the probability and length 17
of possible disabilities when determining the type of policy 18
you might require. They also consider the number of 19
employees, the length of time you have been in business, 101 20
and your industry’s disability claim history. 21
One way to save money on insurance premiums is by 22
choosing a sixty- to ninety-day elimination period. This 23
24
25
How to find the right disability 26
insurance 27
28
◆ Figure out how much you need to cover all your personal 29
monthly expenses. 30
◆ Obtain estimates from several insurance carriers. 31
◆ Check the financial stability of the company you buy a 32
policy from. 33
◆ Although it costs more, try to buy a policy with lifetime 34
benefits. 35
◆ Consider buying business interruption insurance to further 36
protect your business from closing if something happens 37
to you. 38
39
1 means you will have to wait a while before your payments
2 begin. Insurance companies think if you are willing to wait
3 for benefits to kick in, you might be less likely to claim a dis-
4 ability.
5 Normally, disability benefits are tax-free. Always pay with
6 a personal check. If your company pays for the premium and

7 takes a tax deduction, your benefits will be taxed.
8 Make sure your policy covers your specific occupation, not
9 just any occupation. If you have a stroke and can’t do your
10 old job, you can collect your benefits even if you take up a
11 less demanding, lower-paying occupation.
12 Although it’s cheaper to buy a policy that provides bene-
13 fits to age sixty-five, many agents recommend paying a bit
14 extra for a policy with lifetime benefits.
15
16
17
Expand Your Vendor Network
18 G R E AT is your business overly dependent upon one
19 or two suppliers for the things you need on a regular
20 102 57 basis? What would happen if your primary supplier
21 I D E A called today and said he or she unexpectedly ran out
MONEY MATTERS
22 of the materials you need?

23 What would your employees do if the delivery truck broke
24 down in Ohio, and your raw materials were sitting on the
25 side of the highway for three days?
26 Although most small business owners prefer to establish
27 stable, long-term relationships with vendors and suppliers,
28 savvy entrepreneurs always find alternative sources for key
29 products. Being loyal to vendors is important, especially if
30 what you need is in short supply. But things change. You
31 have to protect yourself and your workers by having alterna-
32 tive sources.
33 No matter what business you’re in, begin looking around
34 for new places to buy materials:
35 ◆ Order catalogs from competing companies.
36 ◆ Send away for brochures.
37 ◆ Collect current price lists.
38 ◆ Put all the information you receive in a file, with the hope
39 that you’ll never need it.
when you begin looking around for new or alterna- 1
tive suppliers, you might be surprised to find that you are 2
paying too much for essential products or services. If you do 3
find a better deal, there’s nothing wrong with going back to 4
your primary suppliers and asking them to meet or beat the 5
new prices you found. Your current suppliers probably 6
won’t want to lose your business. They will often propose a 7
discount or new payment terms to maintain the business 8
relationship. 9
If it’s been so long that you don’t know where to look for 10
new suppliers, browse through an industry trade magazine 11
or newsletter. Trade magazines are a terrific source of new 12
ideas and products. Check out all the advertisements placed 13
by companies that serve your industry. 14
Another great way to expand your business horizons is to 15
attend a trade show or professional meeting. You’ll be able to 16
find new products, services, supplies, and customers—all in 17
one place. 18
19
20
Ask for a Deposit 103
21
G R E AT
for many entrepreneurs, making a sale is 22
easy. The tough part is getting paid. But without steady 23
58 cash flow, even the strongest business will starve. 24
I D E A In 2000, small businesses buffeted by the reces- 25
sion began asking customers for deposits before they started 26
the work or filled an order. Asking for a deposit is a great way 27
to boost your cash flow. If handled fairly and properly, it 28
won’t alienate good customers. 29
Professional consultants often require 50 percent of the 30
first month’s fee when they are retained. Payments are made 31
along the way, and the balance is due when the project or 32
report is completed. 33
If you haven’t required deposits before, draft a short letter 34
of explanation and send it out to all your customers or 35
clients. Make sure you are clear about your new policy and 36
don’t play favorites. If you begin asking for deposits, you 37
have to make sure every customer or client is required to 38
comply with the policy. 39
1 You don’t have to be a painter or carpenter to ask for a
2 deposit. Your customers shouldn’t object to paying 20, 30, or
3 even 50 percent down when they place an order or sign a
4 contract. So ask for a deposit to secure your products, time,
5 and services. It makes good business sense.
6
7
8
Discount Accounts Receivable
9 G R E AT here’s another cash-flow boosting idea.
10 If people owe you money, consider offering them a
11 59 discount on the balance—if and only if they pay up
12 I D E A immediately. Try this only after you’ve called and
13 asked why they haven’t paid up on time. This incentive often
14 does the trick if the person actually has the cash but is just
15 holding back.
16 For this to work, you need to offer a significant dis-
17 count—at least 20 percent—because most people need a
18 real incentive to send the check immediately. Set a tight
19 deadline for them to respond. To sweeten the offer, include
20 104 a self-addressed, stamped envelope. Even if just a handful
21 of customers respond, it may bring in needed cash. Be
MONEY MATTERS
22 clear that if they don’t respond by your deadline, the dis-

23 count expires.
24 If you want to avoid the hassle of deadbeat customers in
25 the first place, be very picky when it comes to granting credit.
26 Require every new customer to fill out a detailed credit appli-
27 cation. Check their business references, call their bank, and
28 ask Dun & Bradstreet to send you any information they have
29 on the company. When you grant credit to a customer, you
30 become their banker, so think like a banker before you lend
31 out a single dollar.
32
33
34
35
36
37
38
39
1
Be Talked Out of a Bad Idea 2
G R E AT bruce tyson manages money for a living. 3
Big money. As president of Weston Capital Manage- 4
60 ment Inc., in Los Angeles, California, he manages 5
I D E A about $150 million for wealthy entertainment- 6
industry clients. 7
Tyson is extremely bright, fiscally conservative, and a care- 8
ful listener. He serves as a sort of financial adviser/shrink for 9
his clients. Tyson’s favorite great idea? “Be willing to be 10
talked out of something,” he said. 11
It turns out that he spends quite a bit of time talking 12
clients out of investing in harebrained schemes. For exam- 13
ple, a young client wanted to lend her boyfriend $50,000 of 14
her inheritance to buy out his partner in a Santa Monica 15
restaurant. Tyson diplomatically pointed out to her that this 16
was a bad idea for several reasons. 17
First of all, the loan would have been collateralized by an 18
expensive car, which is known as “moving collateral” and 19
often disappears without a trace. Tyson also knew the 105 20
restaurant didn’t have a liquor license, and the chances of 21
getting one were slim. It was located in a very popular area 22
of the beachfront city, and local officials had been opposing 23
new liquor licenses in order to cut down on crime and con- 24
gestion. 25
Of course, his client was not happy with his advice, but 26
she listened. Good thing, too. A few months later, the restau- 27
rant went under—and so did the romance. 28
Another client called Tyson requesting a check to buy her 29
boyfriend a sailboat so they could sail around the world. “Do 30
you sail?” Tyson asked her. 31
Silence. “No.” 32
“So I said to her, ‘Why don’t you go sailing for a week with 33
him and see how you like it?’” She did. She didn’t like it. She 34
didn’t buy him the boat, and the wind went right out of the 35
relationship’s sails. 36
I guess that you could say that the real moral of Tyson’s 37
great idea is “don’t mix romance and money.” 38
But seriously, willingness to step back and think through 39
1 a serious financial decision takes maturity. Listen to your
2 advisers. You pay them well to be wiser, saner, and more pru-
3 dent than you.
4
5 Hire an Enrolled Agent
6
7
to Do Your Taxes
8 G R E AT nobody likes to pay taxes. it’s even worse if
9 you’re unhappy with your current tax preparer. If you
10 61 are thinking about a change, you might consider hir-
11 I D E A ing an enrolled agent.
12 Although they’ve been around since 1884 and prepare
13 millions of tax returns a year, enrolled agents, or EAs as they
14 are known, are a well-kept secret. While certified public
15 accountants (CPAs) and public accountants (PAs) are
16 licensed by the state, enrolled agents are licensed by the fed-
17 eral government. Enrolled agents specialize in preparing tax
18 returns and can represent taxpayers before the Internal Rev-
19 enue Service, just like CPAs and tax attorneys.
20 106 They have to renew their license every three years after
21 completing seventy-two hours of education in taxation.
MONEY MATTERS
22 Despite their background and education, EAs tend to charge

23 lower fees than CPAs or PAs.
24 EAs are definitely outnumbered: There are only about
25 35,000 enrolled agents in the United States, compared with
26 500,000 certified public accountants and public accountants.
27 There are probably so few because it’s tough to become
28 one. There are only two ways: pass a tough, two-day exam
29 given once a year by the IRS (only about 30 percent of those
30 who take it pass it) or work for the IRS for five years.
31 Through the years, EAs have had to battle CPAs who have
32 pushed legislation aimed at limiting an EA’s ability to pre-
33 pare balance sheets and financial statements for business
34 clients. CPAs contend EAs should only do tax returns. EAs
35 insist they can’t do a good tax return without an accurate
36 financial statement.
37 “CPAs treat us as a subspecies,” said Sid Norton, presi-
38 dent of the California Society of Enrolled Agents, based in
39 Sacramento, California. Norton said that in 1986 California
CPAs launched a major political battle to keep enrolled 1
agents from preparing financial reports for business owners. 2
The EAs fought back and prevailed, but similar battles have 3
been waged in other states. 4
“CPAs are very upset when we use the word ‘account- 5
ing,’” said Sharon Flynn, who has been an EA since 1969. 6
“But the state Supreme Court said we can use the word.” 7
Flynn said about 300 of her 650 clients are small business 8
owners filing Schedule C tax forms. For example, one of her 9
newest clients operates a driving school; another just opened 10
a bakery. 11
David Costello, president of the National Association of 12
State Boards of Accountancy in Nashville, Tennessee, said 13
his group, which deals with state licensing matters, consid- 14
ers “EAs very beneficial” and “serve a useful purpose in the 15
scheme of things.” “I wouldn’t have a problem taking my tax 16
return to an enrolled agent if I didn’t do it myself,” said 17
Costello, who is a CPA. 18
The National Association of Enrolled Agents is working 19
with legislatures in South Carolina, Indiana, Florida, and 107 20
Georgia to clarify the services EAs are permitted to perform, 21
according to Janet Bray, executive vice president of the 22
Gaithersburg, Maryland–based group. 23
If all this has inspired you to find an EA, try not to call 24
them in March or April, when they’re working on tax 25
returns. “Trying to interview a tax pro during the peak of tax 26
preparation season can be like chatting with a doctor during 27
brain surgery,” said Sid Norton. 28
For information on EAs, send a self-addressed, stamped 29
business envelope to NAEA, 200 Orchard Ridge Drive, 30
Suite 302, Gaithersburg, MD 20878. The NAEA also oper- 31
ates a free referral service. For information, call 800- 32
424-4339, twenty-four hours a day. 33
I recommend buying a couple of good books and surfing 34
the Net for help with your taxes. Tax Savvy for Small Busi- 35
ness: Year-Round Tax Strategies to Save You Money (Nolo 36
Press; 2001) by Frederick Daily is filled with practical tips 37
and suggestions. Nolo Press, which publishes a wide variety 38
of self-help law books, has a website at www.nolo.com. 39
1 Intuit, publisher of Quicken and TurboTax software, offers
2 help via its Tax Center. The online service offers a variety of
3 personal and business tax information. Check it out at
4 www.Quicken.com.
5
6
7
Take Advantage of a Tax Break
8 G R E AT the old cliché, “if something sounds too
9 good to be true, it probably is” applies to many
10 62 schemes and scams offered to small business own-
11 I D E A ers. However, an obscure provision of the federal tax
12 code actually gives mom-and-pop businesses a real break.
13 Although it sounds too good to be true, Section 105 allows
14 very small, family-owned businesses to reimburse them-
15 selves for 100 percent of their uninsured medical, dental,
16 and vision-care expenses. The regulation has been on the
17 books since 1954, but few business people seem to know
18 anything about it.
19 Those who do take advantage of Section 105 have to meet
20 108 strict requirements set up by the Department of Labor and
21 the Employee Retirement Income Security Act, known as
MONEY MATTERS
22 ERISA. You also have to file the appropriate forms with your
23 tax returns and keep careful payroll records, according to
24 Juda Kallus, a Manhattan accountant who is familiar with
25 Section 105. “First of all, you have to have a bona fide work-
26 ing relationship with your spouse,” said Kallus. “Then, the
27 record-keeping requirements are very severe.”
28 Kallus says Section 105 may work for you, if
29 1 You operate a husband-and-wife sole proprietorship or part-
30 nership.
31 2 One spouse works for the other.
32 3 You pay your spouse a reasonable salary.
33 4 You withhold payroll taxes and keep careful time sheets.
34 5 You keep a separate business banking account for reimburse-
35 ments.
36 6 The spouse on the payroll incurs the expenses and requests
37 reimbursement from you, the business owner.
38 7 You are willing to file the necessary paperwork with the fed-
39 eral government.
kallus, who has about fifteen clients using section 1
105, said he advised Patricia Buckley to look into Section 105 2
when she lost her job and began managing her husband’s 3
photography studio a few years ago. 4
Buckley and her husband, Ned Matura, are typical of 5
those who take advantage of Section 105. “I’m a full-time 6
employee of our business,” said Buckley. “I invoice clients, 7
write up estimates, and run the office.” 8
Before they heard about Section 105, Buckley said they 9
were spending about $9,000 a year for a health insurance 10
policy through a federal plan which allows people who have 11
lost their jobs to pay insurance premiums on their own. It’s 12
generally more expensive than group coverage, but better 13
than nothing. 14
By switching to a cheaper, catastrophic medical insurance 15
with a high deductible, Buckley said they save about $4,000 16
a year. Under Section 105, she’s now reimbursed by the busi- 17
ness for all out-of-pocket family medical expenses. 18
Although any accountant can learn how to fill out all the 19
forms, many refer clients to a company set up exclusively to 109 20
administer Section 105 reimbursements for business own- 21
ers. “I would not set up a plan for my clients on my own— 22
it’s too complicated,” said Don Yoder, founder of Yoder’s Tax 23
and Accounting Service in Kalona, Iowa. 24
Yoder, who prepares tax returns for scores of farmers and 25
small business owners, lets AgriPlan/BizPlan, based in Adel, 26
Iowa, handle all the Section 105 paperwork. In 1995, Agri- 27
Plan/BizPlan had 40,000 clients taking advantage of Section 28
105; in 1997, the number grew to 50,000, says president 29
Phil Harrington. 30
Harrington, who joined the company in 1989, said it was 31
founded in 1986 by Don Rashke, a Wisconsin insurance 32
agent. Rashke, now retired, wondered why big corporations 33
could legally deduct 100 percent of the cost of providing 34
medical benefits, but small businesses couldn’t. He found 35
Section 105 when he was digging around for answers. “Our 36
clients have an average tax saving of $1,800 a year,” said Har- 37
rington. BizPlan, which relies on computers to keep the 38
administrative costs down, charges clients a flat fee of $175 a 39
1 year to handle all the necessary paperwork. BizPlan markets
2 its services to accountants and pays them a modest referral
3 fee of about $50 per client.
4 Their client base is growing, even though small business
5 owners can now deduct 40 percent of their health care costs
6 under the Health Coverage Availability and Affordability Act.

7 By the year 2007, the deduction increases to 100 percent.
8 There is one big catch to Section 105: If you have employ-
9 ees, you must provide similar health care benefits to the ones
10 you provide for your family. “You can’t discriminate; you
11 have to offer it to everyone,” he said.
12 For more information, contact your accountant or BizPlan
13 at 800-626-2846.
14
15 Know about Economic Development
16
17
Incentives and Agencies
18 G R E AT if you are thinking of relocating or
19 expanding your business, be sure to investigate the
20 110 63 wide variety of economic incentives and tax breaks.
21 I D E A Hundreds of local, state, federal, and private agencies
MONEY MATTERS
22 offer scores of programs designed to entice business owners

23 to move into economically disadvantaged areas.
24 As a way to revitalize the economy, former President Bill
25 Clinton began an initiative that designates distressed com-
26 munities across the country as Empowerment Zones and
27 Enterprise Communities (EZs and ECs). In 2001 he moved
28 his office into one of the first EZs, Harlem, which had been
29 selected for $1.2 million to stimulate tourism by developing a
30 tour package and gift shop for the Apollo Theater. The initia-
31 tive seeks to use public and private partnerships to attract the
32 investment necessary for economic and community develop-
33 ment. In the first two rounds of funding (the third round
34 closed in December 2001) about $4 billion in grants and tax
35 incentives had been awarded to eighty-seven EZs and thirty-
36 eight ECs (the Empowerment Zone’s rural counterpart).
37 The EZ/EC initiative, which is administered through the
38 Department of Housing and Urban Development, rewards
39 hiring by giving an employer as much as $3,000 in tax credit
for every new job created. Every year, business owners in an 1
EZ can also deduct $37,000 worth of business equipment 2
and supplies, about $20,000 more than otherwise allowed. 3
Tax-exempt bonds are also available for capital improve- 4
ments such as factories and offices. Some cities with federal 5
EZs are Miami; Boston; Columbus, Ohio; Knoxville, Ten- 6
nessee; El Paso, Texas; and Santa Ana, California. 7
In Richmond, Virginia, where government programs 8
alone failed to bring in new business, a public/private devel- 9
opment group was formed in 1994. By 2000, the Greater 10
Richmond Partnership Inc. had brought in about 25,100 11
new jobs, half of its five-year goal; total investment in build- 12
ings and equipment was $1.9 billion, or 99 percent of the 13
goal. A business owner looking at the Richmond area sees a 14
growing population and good basic infrastructure: an air- 15
port, two expressways, and a university. Then the partner- 16
ship steps up with tax breaks, fast-track development per- 17
mits, and even state help in training new employees. 18
Case in point: Barber & Ross Millwork, maker of exterior 19
windows and doors, opened a $4 million plant in Richmond 111 20
in 1998, taking advantage of low taxes in a state “enterprise 21
zone.” Now the company has expanded again—this time to 22
Orange County, California, where it will refurbish a vacant 23
plant and take advantage of the county’s offer to pay $50,000 24
for the extension of a sewer line. The company’s strategy is 25
to be a regional source for homebuilders, hence to locate in 26
hot real estate markets. Project manager Bruce Weber said 27
the company’s next move may be to Charlotte, North Caroli- 28
na, where, again, there is a private-public partnership group 29
to encourage new business. 30
New or expanding companies can qualify for programs 31
where the state helps pay part of the cost of training workers. 32
There is also a variety of tax credits and incentives available 33
for employers. To contact the Greater Richmond Partner- 34
ship, call 804-643-3227. To find out more about EZ/EC ini- 35
tiatives in your area, go to the Department of Housing and 36
Urban Development website at www.hud.gov, or contact 37
your local SBA chapter for information on other programs in 38
your area. 39
1
2
Use Frequent Flier Miles for Meetings
3 G R E AT
futurist david snyder flies more than
4 150,000 miles a year, giving speeches and consulting
5 64 for private and government clients. To build up fre-
6 I D E A quent flier miles, he flies first class and books his

7 own tickets, although his clients reimburse him for travel
8 expenses. Every few years, he cashes in all those free miles to
9 hold retreats for The Snyder Family Enterprise.
10 “We prefer United for its service and because it covers
11 most national routes,” says Sue Snyder, David’s wife and
12 managing director of the company. “If he can’t fly United, we
13 charge the tickets on his American Express card and transfer
14 the miles to other airlines.”
15 So if you are always on the road and in the air, bank those
16 miles and cash them in for a business-related trip.
17
18
19
FinanceYour Independent Film
20 112 G R E AT
powered by black coffee, peter hall raced
21 downtown in New York City to pick up 10,000 slick
65
MONEY MATTERS
22 postcards promoting Delinquent, his independent

23 I D E A film that opened in September 1997 in Los Angeles
24 and New York. Rushing back uptown, he double-parked in
25 Columbus Circle, risking a ticket to FedEx 5,000 cards to
26 Los Angeles.
27 “I have to pour it on the opening weekend, then go back
28 into battle,” said Hall, a former financial journalist turned
29 entrepreneurial filmmaker. While major studios spend an
30 average of $19.8 million marketing their films, Hall spent
31 about $5,000 on postcards, stickers, buttons, and tee-
32 shirts to promote the film that had been his life for five
33 years. After two years on the international film festival cir-
34 cuit, he finally found a distributor willing to give it a shot
35 in America.
36 Like hundreds of other independent filmmakers, Hall per-
37 sonally raised the $300,000 he needed to write, produce,
38 and direct Delinquent. He maxed out a collection of
39 high-limit credit cards, directed karaoke videos, ghost-wrote
articles, and cashed-in on a few high-flying biotech stocks. 1
He had to do it all himself because “This is a movie full of 2
people with no connections,” he said. 3
As tough as it is to make your own movies, getting them 4
seen is becoming a bit easier. In 1997 actor and director 5
Robert Redford teamed up with Newton, Massachusetts– 6
based General Cinemas to open a chain of Sundance Cine- 7
mas to show independent films. Redford’s Sundance Chan- 8
nel also is cablecasting independent films twenty-four hours 9
a day in selected markets around the United States, and the 10
Independent Film Channel has been showcasing entrepre- 11
neurial films since 1994. “Filmgoers are starved for new 12
ideas, voices, and visions,” said Redford, who founded the 13
Sundance Institute in Utah in 1981. 14
Although the number of art movie houses is dwindling, 15
the success of many bigger-budget independent films, 16
including Like Water for Chocolate, The Brothers McMullen, 17
and Sling Blade, inspires novice filmmakers to raise money 18
any way they can. “It’s hard [to make a movie] even with 19
$1 million,” said Caroline Kaplan, director of programming 113 20
and production for the Independent Film Channel. 21
Across the country, Michelle and Michael Wehling from 22
San Clemente, California, decided to make their own films 23
through Cedar Creek Productions after struggling to find 24
work as actors for ten years. “We had to treat it like a busi- 25
ness to make it work,” said Michelle Wehling. But she 26
admits making a movie is not the way to get rich quick. In 27
fact, they had to sell one of their cars to pay a sound editing 28
bill. “Still, nothing else was as fulfilling as this,” said 29
Wehling. 30
In 1995 Michelle and Michael set up a limited liability 31
corporation to raise about $180,000 from friends and fami- 32
ly members to produce their first film, Out of the Darkness. 33
The R-rated psychological thriller stars Michelle, who plays 34
a sweet but dangerous pregnant robber. “Our investors 35
made a 55 percent return on their money on our first film,” 36
said Wehling. They made money by selling distribution 37
rights to about a dozen foreign countries, although the 38
movie was not widely seen in the United States. 39
1 Cedar Creek’s investors stayed around for Time Shifters,
2 which cost about $350,000 to produce. The film is a futuris-
3 tic drama featuring television star Corbin Bernsen and his
4 mother, soap-opera star Jeanne Cooper.
5 Despite the expense and anxiety, independent filmmakers
6 continue to thrive. Redford’s Sundance Institute receives

7 650 feature-length films, 200 documentaries, and 1,500
8 short films a year, according to John Cooper, associate direc-
9 tor of the respected festival. About forty feature films are
10 screened at the high-profile festival, but about 80 percent of
11 those eventually end up in a theater somewhere, even if for
12 just a few days.
13 “It gets harder every year to make a film, but at the same
14 time, more get made every year,” said Cooper. “People used
15 to put together grants to make these films; now private
16 investors are big.”
17 That may give some hope to Peter Hall, who is probably
18 still paying off the bills for Delinquent.
19
20 114 Take Advantage of Special
21
Lending Programs for Women
MONEY MATTERS
22
23 G R E AT
although there are nine million women
24 business owners in America, employing roughly 18.5
25 66 million people, women still have a tough time secur-
26 I D E A ing bank loans.
27 But there is help: the women’s prequalification program,
28 which was launched as an experiment in 1994. The pro-
29 gram works like this: The SBA directs women business
30 owners to a nonprofit group that helps them write or polish
31 up their business plan and fill out a loan application. The
32 completed application package is then presented to the
33 SBA. If it looks good, the SBA issues a letter stating that
34 the applicant qualifies for a government loan guaranty. Let-
35 ter in hand, the business owner goes to a commercial
36 lender to apply for a loan of up to $250,000. “The SBA’s
37 stamp of approval helps women get what they need,” said
38 former SBA chief Ada Alvarez.
39 Fortunately, two of the nation’s largest banks are
embracing women business owners by aligning with major 1
women’s business organizations. San Francisco–based 2
Wells Fargo Bank has teamed up with the National Associa- 3
tion of Women Business Owners, a Washington, D.C.– 4
based group with sixty chapters, while Bank of America 5
linked up with Women Inc., a Los Angeles–based trade 6
association. 7
Both giants have committed billions to the women’s mar- 8
ket. “The success of our efforts has exceeded our expecta- 9
tions,” said Terri Dial, formerly responsible for small busi- 10
ness and consumer lending at Wells. “What’s really exciting 11
about reaching this goal is that we accomplished it by mak- 12
ing lots of small loans. In fact, most of the small businesses 13
seeking loans want $25,000 or less.” 14
Wells’s loans are unsecured and require a one-page appli- 15
cation form with no tax returns or financial statements. The 16
minimum loan amount is $5,000. To qualify for a loan, 17
women must have good personal and business credit, be in 18
business for two years, and be profitable. 19
Bank of America (BofA) jumped into the market with its 115 20
own lending program targeted at women. “We are excited to 21
be working with an organization that shares our goal of 22
financially empowering women business owners,” said 23
Kathleen Brown, former executive vice president of BofA. 24
She said the bank committed to lend $10.6 billion to small 25
business owners over a three-year period. “We expect about 26
30 to 40 percent of that will finance women-owned business, 27
based on the makeup of the small business segment, but 28
there is no upper limit.” 29
Before you apply for a bank loan, make sure your financial 30
records are in good order. Minding Her Own Business: The 31
Self-Employed Woman’s Guide to Taxes and Recordkeeping, 32
by Jan Zobel (Adams Media Corp.; 2000), is a great addition 33
to any woman’s business library. 34
35
36
37
38
39
1
2
Get Free Financing Help
3 USE A SCORE COUNSELOR
4 G R E AT in 2001 counselors from the service
5 Corps of Retired Executives counseled more than
6 67 250,000 entrepreneurs. Since its founding in 1964,

7 I D E A more than 4.2 million business owners have par-
8 ticipated in SCORE’s extensive counseling and seminar
9 programs.
10 No matter where you live, free and low-cost help is provid-
11 ed by more than 12,000 counselors working through 389
12 chapters across the United States.
13 “Probably the most frequently asked question is how to
14 find money and manage finances,” said Ken Yancey,
15 SCORE’s executive director. To provide high-quality help,
16 SCORE partners with major corporations like Visa to provide
17 extra help to business owners.
18 In addition to bookshelves filled with books and helpful
19 publications, SCORE offices sponsor all kinds of workshops
20 116 ranging from starting a business to more advanced sessions
21 on export financing. You can find your closest SCORE chap-
MONEY MATTERS
22 ter by calling the local Small Business Administration office

23 or by going online to www.score.org.
24
25
26
Get Some Help from Uncle Sam
27 G R E AT good old uncle sam. he stands there with
28 his finger pointing at you, but most business owners
29 68 think he should be portrayed with that same bony
30 I D E A hand reaching deep into our pockets.
31 If you’ve ever spent an hour filling out a payroll tax form
32 or dealing with a federal safety inspector, it’s easy to think of
33 the government as an evil entity. But there are many ways
34 the government can actually help grow your small business.
35 The trick is to figure out what kind of help is available and
36 how to get it. The truth is that the federal government is easi-
37 er to access than ever. You don’t even need to get in your car
38 to get help from the U.S. Small Business Administration—
39 you just need a computer and a modem.
The SBA’s Business Advisor website (www.business.gov) 1
is a business owner’s one-stop electronic link to govern- 2
ment aid. It helps you identify and contact a variety of 3
resources. Vikki Craven, founder of Fly By Night, a flight 4
simulator software company in San Antonio, goes online 5
when she needs help from Uncle Sam. “I spent hours— 6
instead of days—figuring out what resources were available 7
in my area,” she said. 8
Although there is no such thing as “free money” for small 9
business owners, the SBA provides government guarantees 10
for billions of dollars’ worth of bank loans made to business 11
owners every year. If you need a government-guaranteed 12
loan, check out the SBA’s 7(a) Guaranty program. Details 13
about the loan program are available on the SBA’s home 14
page or by calling the Answer Desk at 800-U-ASK-SBA. The 15
SBA’s “Programs and Services” brochure is a good one to 16
request for a basic overview. 17
Greg and Heather Green of Anchorage, Alaska, used an 18
SBA loan to open a Play It Again sports-equipment fran- 19
chise. The franchise sells used sporting goods at low prices. 117 20
They started the business in 1992. 21
There are other loan programs offered by the SBA. The 22
Low Documentation (LowDoc) program relies on a one-page 23
application for loans of $100,000 or less. The application 24
process usually takes three days. There are also CAP Lines to 25
finance short-term, working capital needs for cyclical busi- 26
nesses. Under this program, loan proceeds are usually 27
advanced against a borrower’s existing or anticipated inven- 28
tory and/or accounts receivable. Some companies need a 29
bridge loan, others just a small cash infusion. 30
For loans under $25,000, try the Microloan Program. Jim 31
and Carla Italiano used this program for their J&C Coatings 32
in Benson, Arizona. For twelve years, Jim had been working 33
as a painter for other companies. He wanted to start his own 34
business, but needed cash for supplies. “So many times, 35
when we ran out of funds, I thought about quitting,” said his 36
wife, Carla. “But we loved having our own business, and I 37
knew there had to be something, somewhere to help us.” 38
Fred Little at Western Bank in Lordsburg, New Mexico, 39
1 was impressed with their determination. “I liked their con-
2 servative approach,” said Little. After making a small loan
3 and repaying it, the Italianos applied for $40,000. It was
4 approved and guaranteed by the SBA.
5
6 Other SBA–financing programs include:

7 ◆ The Certified Development Company Program (Section 504)
8 provides long-term, fixed-asset financing for up to $1 mil-
9 lion.
10 ◆ The Surety Bond Guarantee Program provides bid, per-
11 formance, and payment bonds for contracts up to $1.2
12 million.
13 ◆ The Defense Loan and Technical Assistance (DELTA) pro-
14 gram offers financing and technical help to defense firms
15 trying to diversify into peacetime products.
16 ◆ ACE-NET is a nationwide Internet service that tries to match
17 investors with entrepreneurs in need of capital. Companies
18 pay a fee to register with the service.
19 ◆ The Minority Prequalification Loan Program helps business
20 118 owners prepare loan applications for under $250,000. The
21 Women’s Prequal program does the same for women.
MONEY MATTERS
22 ◆ The Department of Transportation Bonding Assistance Pro-

23 gram provides bonds for businesses working on transporta-
24 tion contracts or subcontracts worth less than $1 million.
25 The DOT also offers short-term loans for minority busi-
26 nesses. For information, call 800-532-1169, or check out the
27 DOT home page at http://osdbuweb.dot.gov.
28 ◆ The IRS offers more than 100 free publications to help you
29 file your taxes. The three most popular are Tax Guide for
30 Small Businesses, Taxpayers Starting a Business, and Guide
31 to Free Tax Services. You can call 800-829-1040 to order
32 forms, but the lines are frequently busy. Don’t call in March
33 or April!
34 ◆ If you need statistics, demographic, or economic data to
35 write your business plan or to develop a marketing strategy,
36 it’s available through the Economic Statistics Administration
37 at the Department of Commerce. This group also releases
38 Census Bureau data. You can go online to look for numbers
39 at www.stat-usa.gov.
◆ The Bureau of Labor Statistics at the Department of Labor 1
is a gold mine of information. Contact the BLS at labstat. 2
helpdesk@bls.gov. 3
◆ If you are looking for information on publicly traded compa- 4
nies, the Securities and Exchange Commission provides the 5
EDGAR database via the Internet. This allows access to cor- 6
porate filings to the SEC. The SEC’s home page also has in- 7
formation on what’s needed to sell stock in your company. 8
So don’t be afraid to turn to Uncle Sam for invaluable and 9
affordable help. As Francis Bacon said long ago, “knowledge 10
is power.” And you might as well take advantage of programs 11
paid for by your tax dollars. 12
13
14
BuyUsed Office Furnishings 15
G R E AT when i was an investigative reporter, my 16
beat was white-collar crime. I chased after the slick- 17
69 est, sleaziest business criminals in the country as 18
I D E A they defrauded investors out of millions with pre- 19
cious metals scams, stock frauds, and real estate schemes. 119 20
The one thing they all had in common—other than a pas- 21
sion for stealing money—was a passion for glitzy, opulent 22
offices. To impress prospective victims of their schemes, they 23
always rented expensive space on the top floor of the nicest 24
buildings, with a spectacular city or ocean view. 25
My favorite con man had a reception area the size of a 26
small apartment, with plush gray carpeting and stained glass 27
panels. His perfectly coiffed secretary sat behind a massive 28
cherry wood desk. His private office was about 2,000 square 29
feet with a panoramic view of the Pacific Ocean. It was no 30
wonder that visitors were convinced he was a legitimate 31
commodities dealer. Only a very successful businessman 32
would have such a fabulous office! 33
He’s why, to this day, I still equate fancy offices with crim- 34
inal behavior. And that’s one of the reasons I urge smart 35
business owners to outfit their offices with as much used 36
equipment and furniture as possible. 37
Unless you are running an advertising or modeling 38
agency, which depends heavily on presenting a hip image, 39
1 forget about buying expensive office furniture. In my view,
2 the funkier the office, the smarter the business owner. Think
3 of all the money you’ll save if you rent space in a building a
4 bit off the beaten track or in a less than desirable area—as
5 long as it’s safe for you and your employees.
6 But before you spend a dime on furnishing your office,

7 buy some graph paper and draw up a floor plan. Take inven-
8 tory of everything you have and make a detailed list of what
9 you need.
10 Then, when it’s time to buy, find the nearest used-office-
11 furniture company. They are all over the country and offer
12 tremendous bargains on barely used furniture. Companies
13 going out of business are often forced to sell new or barely
14 used desks, file cabinets, credenzas, and chairs. Another
15 option is refurbished office equipment, which is available
16 at a fraction of the price, but make sure it comes with a
17 solid warranty. You should also check the classified ads for
18 private sales.
19 Here are some office furniture buying tips from Steel-
20 120 case, a Grand Rapids, Michigan–based firm:
21 ◆ Define your furniture requirements by what your employees
MONEY MATTERS
22 need to work effectively rather than by the features of a par-

23 ticular furniture line. Ask these questions: What kind of fur-
24 niture do we need? Tables for meetings? Acoustical panels
25 for privacy?
26 ◆ Inventory all the furniture you have to avoid buying things
27 you don’t need.
28 ◆ Buy furniture for its functionality, not for image. If furniture
29 isn’t appropriate for the way your people work, it becomes
30 impractical.
31 ◆ Consider leasing or renting furniture. This will increase your
32 flexibility as your company grows or shrinks.
33 ◆ Think about the health and safety of your employees—be
34 sure to consider comfort and ergonomics (see Great Ideas 13
35 and 14).
36
37 For more information on buying office furniture, check
38 out the Steelcase site on the Web at: www.steelcase.com.
39
1
Buy Prepaid Legal Insurance 2
G R E AT did you know that 52 percent of all 3
Americans have some sort of legal problem? And 4
70 that one of every three people will need legal advice 5
I D E A in the next twelve months? With attorneys charging 6
an average of $175 per hour, legal bills can eat into your prof- 7
its. Even a small legal problem can drag down your morale 8
and your business. That’s why many small business owners 9
are signing up for prepaid legal insurance. 10
One of the oldest providers of this benefit is Pre-Paid Legal 11
Services® Inc., based in Ada, Oklahoma. The company sells 12
coverage to both individuals and small businesses. For about 13
$75 a month, businesses with fewer than fifteen employees 14
and $250,000 or less in net income can have access to experi- 15
enced business attorneys. Their team of lawyers can review 16
contracts, write debt collection letters, and deal with leases, 17
partnerships, creditor harassment, and bankruptcy, among 18
other problems. If you need additional services, you are given 19
a 25 percent discount off their regular legal fees. 121 20
To get help, call the toll-free consultation line. A represen- 21
tative collects all the details and refers you to the right person 22
in the firm. You’ll usually get a call back by the end of the 23
next business day, according to company officials. 24
Pre-Paid Legal Services, a publicly held company, was 25
founded in 1972. It contracts with 2,700 law firms in forty- 26
six states. The company has paid $100 million to 100,000 27
attorneys on behalf of clients. 28
Shop around for the best deals, but consider this type of 29
insurance as a way to sleep more soundly at night. 30
31
32
Locate the Right Space 33
G R E AT
entrepreneurs cringe at the thought of 34
leasing office space. It’s scary and expensive and 35
71 takes time to do. That’s why so many of us work at 36
I D E A home until we get thrown out by our loving families. 37
The Applegate Group, founded in the cozy den of our 38
home in Sun Valley, California, outgrew that space within a 39
1 year. Taking a big risk, we invested $10,000 to remodel the
2 garage. It was a great commute—down the driveway.
3 We stayed in the garage until we moved to New York. Our
4 temporary quarters there were in a basement—it was either
5 blasting hot or freezing cold. When my husband and I
6 bought a spacious, three-bedroom apartment in a gorgeous

7 pre–World War II building, it was evident that the company
8 was going to be evicted.
9 So it was time to look for an office. We found a big, sunny
10 space in the Pelham, New York, post office building in early
11 1997, and now have three offices there.
12 If, like me, you can no longer work at home, here are
13 some options. First, look for a business incubator in your
14 area (see Great Idea 9). There are hundreds of private,
15 university, and government-sponsored roosts for small
16 companies. The rent is affordable, and there is great com-
17 fort to be found in the company of other crazy entrepre-
18 neurs.
19 Another great option is to share space with another small
20 122 business. I once profiled two happy bakers in Orange Coun-
21 ty, California: a gourmet brownie baker and a cheesecake
MONEY MATTERS
22 baker. They shared a commercial kitchen for years; the

23 brownie guy worked days, and the cheesecake guy worked
24 nights. They split the expenses and kept the ovens warm
25 around the clock.
26 The owner of an upscale framing store in Hollywood
27 rented out his extra space to an art dealer. They figured they
28 would attract the same sorts of art-loving customers, and it
29 worked out very well for a while.
30 I also profiled a nurse who became an expert witness.
31 When she quit her hospital job, she moved into an empty
32 office at a law firm that specialized in defending malpractice
33 suits. They gave her a discount on her rent in exchange for a
34 reduced fee when they needed her to testify!
35 If you must rent space on your own, prepare to do a lot
36 of walking and talking. Many major cities have a glut of
37 office space, so with some persistence, you can find afford-
38 able digs.
39
Here are some tips to help you find the right space: 1
◆ Drive around neighborhoods that appeal to you and look for 2
“For Rent” signs. 3
◆ Check the neighboring buildings to see if they are well main- 4
tained. Take notes on the parking situation, proximity to mass 5
transit, and street lighting. 6
◆ Check out the lobby. Is it well lit and clean? Remember that 7
deodorant commercial that warned, “You never get a second 8
chance to make a first impression”? Well, you don’t want a 9
building with a dreary lobby. 10
◆ Visit the restrooms and check the fire exits and hallways for 11
cleanliness and accessibility for disabled workers and cus- 12
tomers. 13
◆ Speak to other tenants before you meet the building manager. 14
They will usually give you the scoop on life in the building. 15
◆ If you are renting retail space, find out whether the landlord 16
expects a percentage of gross sales as well as rent. 17
◆ Find out exactly what the landlord pays for and what you are 18
financially responsible for. 19
◆ It may make sense to work with a commercial real estate 123 20
broker, especially if you are renting more than a small office. 21
◆ Ask a lawyer to review a lease before you sign it. 22
23
For more information on using a savvy real estate broker, 24
see Great Idea 46. 25
26
27
Build UpYour Credit Lines 28
G R E AT
having a personal credit line or two is a 29
great cushion for the times when you are a little short 30
72 on cash—if a client doesn’t pay on time, or you 31
I D E A decide at the last minute that you really must rent 32
that exhibit space at an industry trade show. 33
This cool financial strategy was actually taught to me by a 34
banker. Ian Jack is a talented composer and musician who 35
fell in love with my best friend, Francine, and went to work 36
for her father’s bank. He used credit lines to build an 37
impressive real estate portfolio and now owns his own mort- 38
gage banking firm in Los Angeles. 39
1 My credit helped our small company stay afloat until we
2 landed our first big project. Through the years, we’ve relied
3 on personal credit lines to fill in the gaps when our biggest
4 client deliberately held their payments beyond thirty days to
5 collect the interest on my money. We’ve later applied for
6 commercial credit lines to weather cash flow crunches.

7 Here’s how you build up a personal credit line: First, con-
8 solidate all your accounts in one bank. Then introduce your-
9 self to the branch manager and get to know the tellers. If
10 you’ve held a well-paying job for at least a year, or your
11 spouse has a good job, apply for a personal credit line of at
12 least $5,000. A credit line is different from a credit card. It
13 has a checkbook and operates like a checking account, but
14 you’re dealing with borrowed money and paying substantial
15 interest.
16 After you obtain the credit line, it’s time to use it. When
17 you are absolutely sure you’re going to receive a big pay-
18 ment, use the credit line checks to pay all your bills or to take
19 a cash advance. A few days before the payment is due, pay
20 124 off the entire amount and zero out your account.
21 If you do max out and pay off your account a couple of
MONEY MATTERS
22 times, in most cases, the bank will automatically increase

23 your credit line limit. Bankers like to see that you are using
24 their money prudently and love to see a balance being paid
25 off, even though they aren’t making any money on interest.
26 If the bank doesn’t automatically increase your limit after a
27 few months of doing this, call the service center or ask your
28 branch manager for an increase.
29 Once you’ve built up your borrowing power, you might
30 want to apply for a couple of credit lines at different banks. It
31 sounds crazy, but using credit wisely is the best way to create
32 a positive credit history.
33 So give this great idea a try. But remember, it only works if
34 you have a good personal credit history and a steady income!
35
36
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C H A P T E R 3
11
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Marketing
17
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Strategies 21
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M
1
8
arketing is considered
the “softer” side of any business plan. Yet without a
well-executed marketing strategy, your business will
never be as successful as it could be.
This is the chapter with the most great ideas for
several reasons. I love writing about savvy
marketing ideas—the nuttier the better. Marketing
challenges your creativity. It’s fun and compelling.
9 For many entrepreneurs, it’s the most confusing,
10 expensive, and upsetting aspect of running their
11 businesses.
12 It’s not so squishy or confusing if you realize that
13 the only way to judge whether something is working
14 is to track, measure, and carefully monitor every
15 marketing gimmick you try. If you spend money
16 doing something zany without determining whether
17 it’s working, you might as well toss the money out
18 the window.
Through the years, I’ve emphasized marketing 1
strategies in my weekly “Succeeding in Small 2
Business” newspaper column and in my lecture 3
presentations. Why? Because I’m not great with 4
numbers, and marketing is something I can wrap 5

129
my arms around. 6
I love collecting and sharing great marketing 7
ideas. I’ve met people doing wonderful things on a 8
shoestring budget. 9
One of my favorite marketing ideas comes from 10
a company called My Fortune, which makes acrylic 11
fortune cookies filled with customized messages. 12
I bought hundreds of fortune-cookie key chains and 13
gave them away to promote my second book. They 14
were a huge hit—I still meet people who remember 15
those silly key chains. 16
Based on personal experience, I know the power 17
of a clear marketing strategy. By carefully following 18

1 the marketing plan developed in 1993 by marketing expert
2 Brooke Halpin of Halpin House West, I have watched our
3 business flourish and my personal income soar.
4 Brooke, who lives and works in a Malibu canyon overlook-
5 ing the Pacific Ocean, came to me with a simple premise.
6 “You could be the ‘Dear Abby’ for small business owners,”

7 he told me over a cup of tea in a hotel restaurant. I remem-
8 ber staring at him and thinking to myself, “This guy is nuts.”
9 But I listened carefully to his plan. At the time, I was feeling
10 increasingly frustrated. Although my small business column
11 was popular, I was broke. I was jealous of the wealthy entre-
12 preneurs I was profiling every week—so many had no spe-
13 cial education or talent, other than guts and a great idea.
14 The five-year marketing plan detailed how we would turn
15 a popular newspaper column into a thriving multimedia
16 communications company. By connecting the dots, Brooke
17 developed a unique way to fund my speaking tours by part-
18 nering with companies who want to reach my fans. Together
19 we created and marketed a national small business radio
20 130 report, produced television shows, and developed all kinds of
21 new features for websites. I’ve appeared at events all over the
MARKETING STRATEGIES
22 country sponsored by companies including IBM, AT&T,

23 Merrill Lynch, American Express, Microsoft, and Hewlett-
24 Packard. In 1998, GTE Communications sponsored a
25 twelve-city book tour.
26 My secret of success is to know my market better than
27 anyone else. I live and breathe the entrepreneurial life.
28 Your challenge is to figure out exactly who your clients or
29 customers are before you spend a penny on marketing or
30 advertising.
31 In this chapter, you’ll find great ideas on how to create a
32 cross-promotion, find a mascot, do co-op advertising and
33 telemarketing. You’ll learn how to put some pizzazz into
34 your business cards and send pizza to potential clients, how
35 to market to callers waiting on hold, and how to set up a net-
36 work of dealers.
37 I explain what it takes to get your pet product on QVC,
38 how to hold an off-season sale, how to take advantage of
39 coupons, and why “free” is the most powerful word in the
English language. And if you’ve ever felt overwhelmed at a 1
trade show, be sure to read about how to make the most of 2
your time and money before you register for the next one. 3
This chapter also features some ideas for marketing your 4
products to special-interest segments and using PR to boost 5
your business. 6
Once you’ve read through the ideas in this section, your 7
next course of action will be to implement some of your 8
favorites and use the rest to fuel your creativity to construct a 9
new and more creative marketing plan for your business. 10
11
12
Strike a Deal with a Giant 13
G R E AT until 1997, anyone wanting sandra 14
Nunnerley’s elegant, custom-designed furniture for 15
73 their home or office had to have deep pockets as well 16
I D E A as good taste. Long accustomed to serving the 17
upscale market, with a single chair tagged at up to $10,000, 18
Nunnerley said she was pushed into the retail market by 19
copycats. “I started to notice that copies of my custom 131 20
designs were appearing in retail outlets,” said Nunnerley. 21
Skilled at managing a six-person boutique design firm, 22
but unfamiliar with producing furniture for the masses, 23
Nunnerley teamed up with furniture giant Lane Upholstery 24
to manufacture her line. Her licensing deal for sofas, beds, 25
chairs, and tables calls for Lane to pay Nunnerley a royalty on 26
sales, as well as an advance against royalties to help cover her 27
design and start-up costs. She declined to discuss the finan- 28
cial details of the deal, but said if the line is a hit, it would 29
create double-digit sales increases. 30
Not every entrepreneur has the reputation, talent, and 31
clout to strike a deal with a giant. Nunnerley was already 32
established as a hot, young designer. Her furniture and inte- 33
rior designs, widely recognized by her peers and featured in 34
Architectural Digest, among other publications, appealed to 35
Lane Upholstery president Arthur Thompson. 36
“Sandra is a designer of remarkable talents, one who has 37
consistently responded to a discerning international clien- 38
tele,” Thompson said when the line was launched. “Her sim- 39
1 ple, sophisticated designs fill a void in the marketplace for
2 furniture that meets the demands of modern living without
3 sacrificing elegance, style, and tradition.”
4 Realizing that negotiating a licensing deal with a big com-
5 pany requires special contacts and skills, Nunnerley relied
6 on Carl Levine, a veteran home-furnishings retailer and con-

7 sultant to North Carolina–based Lane. Levine, who receives a
8 percentage of her royalties for brokering the deal, said Lane
9 benefits by its association with Nunnerley.
10 “Her name is like a brand,” he said. “It’s like putting Kel-
11 logg’s on the A&P shelf rather than a generic brand. That’s
12 why many manufacturers want a designer name attached to
13 their product. It gives them extra clout and prestige.”
14 Levine not only brokered the deal, but helped Nunnerley
15 decide what kind of pieces would appeal to middle America.
16 In addition to designing the furniture and selecting fabrics,
17 Nunnerley spends many hours on the Lane factory floor,
18
19 Tips for finding a powerful partner
20 132
21 THE FIRST STEP toward making a deal with a much big-
22 ger company is to target potential companies that are right

23 for your business. Here are some suggestions:
24
25 ◆ Scour industry trade journals and newsletters for the
26 names of the biggest players in your industry.
27 ◆ Order annual reports and spend time on the company’s
28 website to learn all about their divisions, marketing
29 strategies, and other alliances.
30 ◆ Determine who would be the best person to contact to dis-
31 cuss a possible deal; set up a face-to-face meeting and
32 tour so you can get a feel for the company culture.
33 ◆ Have a specific short-term proposal in mind; you only get
34 one chance to make a good impression, so come up with
35 something great.
36 ◆ Suggest a very limited test of your marketing concept.
37 ◆ Trust your instinct, but ask colleagues what they know
38 about the company you want to do business with.
39
teaching workers how to create her fashion-inspired uphol- 1
stery details, like pleats and tucks. Creating a win-win situa- 2
tion between designer and manufacturer is critical to doing 3
a successful licensing deal, Levine said. He also recom- 4
mends working with a skilled contract attorney to protect 5
your interests. 6
If you have a concept or invention you hope to license to a 7
manufacturer, check out The Inventor’s Notebook, by Fred 8
Grissom and David Pressman (Nolo Press; 2000). The work- 9
book helps you document your idea and covers the hows and 10
whys of licensing. 11
12
13
Look Big in Cyberspace 14
G R E AT one of the best things about the web is 15
that even though you may operate a very small busi- 16
74 ness, you can look huge and prosperous online. To 17
I D E A do this, you should invest in a website that’s profes- 18
sionally designed, with tools that allow customers and clients 19
to order goods or services, track orders, and communicate 133 20
quickly with you. This will be an expense, but the money you 21
spend on a great-looking website is a fraction of what you 22
would spend to rent and outfit a fancy office anywhere in the 23
country. And, your site will let you do business locally as well 24
as globally. 25
Whether you sell high-tech components for rockets or 26
rubber stamps, customers still need to find you in cyber- 27
space. When Scott Johnston designed www.rubberstamp 28
.com, the website for Oregon Stamp and Stationery in Port- 29
land, he didn’t assume that customers would find their way 30
to the site on their own. Johnston made sure the site was reg- 31
istered with multiple search engines, monitored how effec- 32
tively the search engines were pulling up his site during 33
searches, and had the Web address printed on all of the com- 34
pany’s materials—forms, brochures, and business cards. 35
“We made sure that everything we printed had the URL 36
on it,” Johnston said. “I also would go to search engines and 37
see if I came up listed, and how. If we didn’t come up, I’d 38
make sure we registered with them,” he said. He also made 39
1 the site a destination, serving as a resource center for rubber
2 stamp enthusiasts with links to other related sites.
3 Here are some other things you can do to raise your profile
4 on the Web:
5 ◆ Post your site to Internet news groups whose topics are rele-
6 vant to your site.

7 ◆ Make sure your site provides the real name, phone number,
8 and location of your company. Consumers want to know
9 with whom they are dealing, and a phone number with a
10 human voice on the other end of the line is crucial.
11 ◆ Register your site with as many search engines as possible.
12 Yahoo!, AltaVista, Lycos, Hotbot, and Google are examples of
13 some major search engines.
14 ◆ Search engines index sites based on the repetition of key
15 words appearing in the site name, the site’s content, or both.
16 Choose three to four key words that directly apply to your
17 business type, products, and services, rather than just your
18 company’s name or location.
19 ◆ Monitor search engines for how they index your site. If you
20 134 do not appear in their top ten ranking for your key words,
21 modify your site until you do. If you pepper your site with
22 keywords that relate to your business, you have a better

23 chance of moving up in the rankings. For example, when the
24 big, venture-funded Wine.com site went out of business in
25 2001, a much smaller company, SelectWinesLLC.com,
26 moved up in the search engine rankings. Every search
27 engine has a different system of ranking, although you can
28 buy your way to the top of the list—the more you pay, the
29 higher up the list your site will be.
30 ◆ Don’t be stingy about showing your product. Include lots of
31 photographs. Describe it in detail and offer pricing informa-
32 tion and options. Let the site function as a catalogue. (Be
33 sure to include your website address on every page of your
34 catalogue if you publish one.)
35 ◆ Be creative but judicious with graphics. The more graphics
36 and images, the longer the page will take to download.
37 ◆ Maintain your website to keep it current and to give repeat
38 customers a reason to return.
39
1
Take Advantage of Co-op Advertising 2
G R E AT do you ever wonder how local merchants 3
get their name and address in the corner of glossy 4
75 ads for a car, computer, or watch? They do it through 5
I D E A what’s called “co-op advertising,” and this form of 6
cost-sharing has given small business owners a marketing 7
boost for years. 8
Ad agency executives say companies like Omega, the 9
high-end watchmaker, “tag” 100 percent of their print ads 10
with the names of local retail suppliers, because they don’t 11
have their own boutiques to sell watches. “It’s a kind of dual 12
extortion,” said Eric Dochtermann, chief executive of Katz, 13
Dochtermann & Epstein, a Manhattan ad agency. “The retail- 14
er wants support, and the manufacturer wants the retailer to 15
lay out money.” 16
Dochtermann, who also works with Dress Barn and Bara- 17
mi Studio, said retailers typically spend 3–10 percent of the 18
total sales of an item on co-op advertising. By hooking up 19
with a big manufacturer, they can get more bang for their 135 20
advertising bucks and significantly more exposure. “For the 21
manufacturer, it’s the 80/20 rule—you spend more money 22
on your big clients,” Dochtermann explained. 23
To qualify for inclusion in a co-op program, retailers have 24
to stock enough of the product to be considered a major 25
player. In other words, if my slick ads are driving customers 26
into your store, I expect you to stock enough of my products 27
to meet the demand. 28
Many ads, especially those in magazines, are redesigned 29
for specific regions, so local retailers benefit. A dealer in 30
Denver wouldn’t want to be listed in an ad appearing in an 31
Atlanta newspaper. 32
One Omega retailer who took advantage of co-op ads is 33
Refeal Solly, owner of Daniele Trissi Ltd. in Scarsdale, New 34
York. Information about his store is featured in Omega 35
posters prominently displayed on the Metro North railroad. 36
“The people who commute every day see these ads again and 37
again,” said Solly. 38
Solly, who opened his jewelry store in 1977, said Omega 39
1 approached him about the co-op ads several years ago. He
2 declined to discuss the financial details, but said he likes
3 being part of the program. “Ads in the New York Times are
4 prohibitively expensive to a small business,” he said. “This is
5 the only way advertising can be affordable.”
6 Meanwhile, Dochtermann said high technology may jeop-

7 ardize the future of co-op ads. Why? Many big companies
8 now have their own websites that allow customers to collect
9 product information and quickly access a list of local retail-
10 ers. “With so much retail happening on the phone, over the
11 Internet, and by mail, tagging becomes less valuable as an
12 advertising tool,” said Dochtermann.
13 It’s a good idea to check with all your major suppliers to
14 see if they have a cooperative advertising policy. Most manu-
15 facturers have some kind of program to offer retailers. Even
16 the biggest companies in the world want to split the advertis-
17 ing costs. Hewlett-Packard, for example, relies on major co-
18 op deals with Intel to promote the Pentium processors inside
19 its computer equipment.
20 136
21
Market to Callers on Hold
22
23 G R E AT
“we put over 100 customers on hold every
24 day,” said Elie Wade, president of Mortgage Makers
25 76 in Oklahoma City, Oklahoma. Wade turned that
26 I D E A annoying waiting time into a marketing opportunity
27 by signing up for a service that produces the messages
28 callers hear while on hold.
29 “We make mortgage loans, so one of the things we put
30 on the message is a list of things you need to bring to a
31 [real estate] closing,” said Wade. “We also provide infor-
32 mation about my radio show, and customers always say,
33 ‘Oh, you do a radio show!’ and they don’t mind holding
34 anymore.”
35 Wade worked with Tulsa-based Impressions on Hold,
36 which has 10,000 clients and seventy franchises in thirty-
37 two states, to set up and maintain her system. “We gave
38 them the information, and they wrote the script. They did
39 everything,” said Wade, adding that a messages-on-hold
1
2
Tips for creating good messages 3
on hold: 4
5
◆ With a captive audience on the line, record a message 6
that will encourage people to do more business with your 7
company. 8
◆ Feature topics that will be interesting to callers such as 9
special offers or discounts you are currently promoting, 10
details of any industry news, and awards won by your 11
company or employees. 12
◆ Change the message every few weeks to keep it fresh. 13
◆ Ask colleagues to recommend the company they use for 14
this service, or you can search online for a company. Be 15
sure to check references and sign the shortest agreement 16
possible. 17
18
service is affordable and professional. “I’ve never had nega- 19
tive feedback.” 137 20
Impressions on Hold charges about $400 a year for 21
equipment and set-up of an eight-minute tape. That’s in line 22
with other companies like On Hold Advantage, also in Tulsa. 23
On-Hold Inc., in Stoughton, Massachusetts, has been in 24
business since 1983 and boasts a client list of 15,000, includ- 25
ing MetLife, the Marriott Corporation, and Century 21. It 26
charges about $600 and $800 for a one-message set-up; the 27
higher price is for digital equipment, which is more reliable 28
than audiocassette. Costs go up when you change your mes- 29
sage frequently. On-Hold’s “unlimited message” package 30
costs about $200 a month with a two-year minimum com- 31
mitment. 32
John Bersin, who founded Impressions on Hold in 1991, 33
said too many small business owners buy the wrong kind of 34
advertising for their business. “You want to spend dollars 35
impacting the right prospects,” said Bersin. “We know we’re 36
dealing with a targeted audience because they wouldn’t be on 37
hold otherwise. They’re at the point of purchase.” 38
39
1
2
Set Up a Dealer Network
3 G R E AT consumers are accustomed to buying cars,
4 tires, and computers through authorized dealers—
5 77 and other businesses can benefit from a similar sales
6 I D E A model.
7 David Usher, who died in a kayaking accident in March
8 1997, was a brilliant entrepreneur. A former paper salesman,
9 he began selling artists’ prints out of the trunk of his car. He
10 traveled around the United States, establishing close rela-
11 tionships with galleries and framing shops, believing that
12 direct distribution was the way to go.
13 Today Greenwich Workshop, founded by Usher, sells lim-
14 ited edition prints and porcelain collectibles through a net-
15 work of 1,200 dealers across the country. Usher said the
16 secret of the company’s success was treating every dealer like
17 part of the family.
18 “We’re continually providing them with information, mar-
19 keting, and resources, and helping them run their business,”
20 138 said Usher, who served as chairman and CEO until his
21 death.
22 “It’s a very close family,” said Fred Turra, co-owner of Art

23 Works, Etc. on Brookhurst Avenue in Fountain Valley, Cali-
24 fornia. Turra, who’s been a Greenwich dealer for twenty
25 years, said the company helps attract customers to his gallery
26 by sending noted artists to make personal appearances. One
27 event, featuring a personal appearance by noted wildlife
28 artist Bev Doolittle and two others, attracted nearly 1,000
29 people to his gallery.
30 “Greenwich provides us with turnkey materials so even
31 the most untrained of art dealers can sound very profession-
32 al when they approach the media,” said Turra. Although he
33 carries other lines of prints, about 90 percent of his invento-
34 ry is provided by Greenwich.
35 Greenwich dealers buy the art outright at wholesale
36 prices, but they can return unsold prints for credit. Usher
37 said that limiting the number of dealers and assigning
38 them an exclusive territory has been an element in the
39 company’s success. In Southern California, for instance,
there are dealers in West Covina, Sherman Oaks, Fountain 1
Valley, and Corona del Mar. The dealers also keep in touch 2
with each other, referring clients and sharing information 3
and marketing hints. 4
The John Lane Gallery, located in Poughkeepsie, New 5
York, was one of Usher’s first dealers. “I remember when he 6
drove up with the prints in the trunk of his car,” said Erica 7
Canevari, manager of the gallery owned by her family. “They 8
are one of the best publishers to work with,” said Canevari. 9
“They are always asking what we think, asking for our opin- 10
ions and suggestions. They make a point to make sure we 11
are happy and understand what’s going on.” 12
Usher never wavered from his original plan of relying on 13
dealers to sell his products. Based on his success in the art 14
world, entrepreneurs should consider applying Usher’s 15
model to selling their particular products and services. 16
17
Tips for a dealer network 18
19
A SUCCESSFUL dealer network relies on good communica- 139 20
tion and support from the home office. Here are some ways 21
to support the people who sell your products and services: 22
◆ Keep people well informed via weekly e-mails and by 23
posting confidential information at a password-protected 24
area of your website. Create a monthly e-newsletter to 25
share sales tips, success stories, and company news with 26
your dealers. 27
◆ Limit the number of dealers you sign up to serve a geo- 28
graphic area. This honors the relationships you have and 29
gives everyone a better shot at making more money. 30
◆ Ask veteran dealers to mentor new dealers working in 31
other areas of the country. Suggest the veteran and novice 32
dealer schedule a phone call once a month to share infor- 33
mation and ideas. 34
◆ Ask your dealers to be open about what you can do back 35
at headquarters to make their lives easier. Keep the lines 36
of communication open and let them know you really 37
value their opinions. 38
39
1
2
Create an Active Database
3 G R E AT if you look at the piles of business cards
4 on your desk and just see a mess—look again. What
5 78 you’re really looking at is potential income.
6 I D E A No matter how small your business may be, you

7 should be creating and updating a database. With simple
8 software, a current database allows you to easily mail
9 newsletters and sales information to customers. You can also
10 target prospective customers by renting mailing lists. Add
11 telephone numbers, and your database becomes the basis for
12 a telemarketing initiative.
13 Collecting detailed information about people and their
14 companies is easier than you think. Business cards, sales
15 invoices, catalogs, directories, and magazine and newspaper
16 articles all contain invaluable information and contacts.
17 Small business magazines such as Entrepreneur usually
18 include contact addresses and telephone numbers in their
19 articles.
20 140 The easiest way to create and maintain a database is
21 with a simple software program. There are many very
22 affordable programs on the market that keep track of the

23 information and allow you to cross-reference and access it
24 in several ways. Microsoft’s Outlook is one of the more
25 popular programs.
26 More complex programs, such as Goldmine, Act!, and
27 Sharkware, organize your daily appointments and remind
28 you when to place important telephone calls. The biggest
29 headache is entering the data into the program, but you can
30 certainly assign this task to a staffer or hire a temporary
31 worker or student to do it. Before you hand over material to
32 be entered, be sure to indicate exactly what information to
33 include in each field.
34 Keep in mind that every year a certain percentage of peo-
35 ple in your database will move or change jobs. A database
36 filled with out-of-date information becomes a waste of time
37 and money, so it’s important to update the information at
38 least once a year.
39 A simple, cost-effective way to clean up your database is to
send out a perforated, two-part postcard with a simple offer 1
or discount and a space for people to update their informa- 2
tion. Be sure to print or stamp “address correction request- 3
ed” on each card, so the post office will return the undeliver- 4
able cards. You’ll pay the postage, but it’s worth it. When the 5
undelivered cards come back, spend time deleting the 6
names. Then update the responses as they are returned. 7
Once your database is up and running, you’ll find that 8
you’ll be using it frequently to keep in touch with the world. 9
In addition to purging annually, be sure to add new informa- 10
tion on a weekly or monthly basis to keep your list clean and 11
accurate. 12
13
14
Market to the Gay Consumer 15
G R E AT about ten years ago, cush honda of san 16
Diego became one of the first automobile dealerships 17
79 to aggressively pursue the gay and lesbian communi- 18
I D E A ty. “The first year we participated in the San Diego 19
Gay Pride Parade was a little difficult,” admitted Frank Lech- 141 20
ner, spokesman for the dealership. “We received some nega- 21
tive feedback from anonymous callers.” 22
But Cush didn’t back down. “Our involvement is another 23
part of embracing the community in which we do business,” 24
he said. “Why wouldn’t we want to support it?” 25
Savvy businesses in all industries are reaching out to 26
serve America’s gay consumers. According to Advertising 27
Age, up to 10 percent of the population in urban markets is 28
gay, and that translates into a large chunk of market share— 29

gay men and women spend about $514 billion a year. 30
Victoria Garcia, a San Diego marketing consultant who 31
specializes in this segment, said it makes economic sense to 32
cater to gay consumers. “Mainstream businesses have now 33
recognized the power of the gay dollar,” said Garcia. “The 34
fact that more celebrities and athletes have come out of the 35
closet has a definite impact on the acceptance of the new 36
trend [in marketing to gay people].” 37
Garcia, principal of the Marketing Impressions Advertis- 38
ing Agency, helps non-gay businesses reach the gay market. 39
1
2 More tips from Garcia
3
4 ◆ Keep advertisements simple and avoid overstating your
5 “plea” for their business.
6 ◆ Humor is a great tool to break the ice.

7 ◆ Understand your community and find out exactly what
8 local gay consumers are looking for.
9
10 But she cautions clients against launching a campaign with-
11 out careful planning.
12 “An effective gay-targeted campaign requires more than
13 just showing a room full of men using a certain product or
14 flying a rainbow flag,” she explained. “It means demonstrat-
15 ing a sincere understanding of their perspective. It’s very
16 important for consumers to walk into a business and feel
17 accepted and comfortable,” she said.
18
19
20
21
142
Give to Charity
22 G R E AT even if you can’t write a big check, as a

23 business owner you can raise your community pro-
24 80 file by making personal contributions of goods or
25 I D E A services to your favorite charities. In addition to
26 benefiting others, your contribution might also help your
27 business when it comes to customer and employee rela-
28 tionships.
29 “Our favorite cause is The Valerie Fund, an organiza-
30 tion that manages treatment centers for children with can-
31 cer and blood disorders,” says Ira Almeas with Impact
32 Incentives and Meetings Inc. in East Hanover, New Jersey.
33 Founded in 1976 in memory of Valerie Goldstein, The
34 Valerie Fund offers support groups, a day school, and a
35 free summer camp for children with cancer and blood
36 disorders.
37 “The old adage that it’s better to give than to receive is
38 never more true than during the holiday season. We go one
39 step further by acknowledging gifts with holiday greeting
cards that benefit other nonprofit organizations,” says 1
Almeas. “Three years ago, one of our clients called me after 2
receiving our holiday charity card. In tears, she informed me 3
that her three-year-old is a cancer patient at one of the bene- 4
fited clinics.” 5
Becoming involved in charitable or community works can 6
raise your profile in the business community. In my home- 7
town, Pelham, New York, one of the top real estate brokers, 8
Sona Davidian, a principal owner of McClellan Real Estate, is 9
a true community leader. She serves on the board of several 10
community organizations and last year chaired the major 11
fundraiser—the Pelham House Tour—for the high school 12
PTA. The tour, which costs $25 per ticket, raised more than 13
$25,000 for the high school in one afternoon. Davidian said 14
that her community work always puts her in touch with new 15
clients. Being mentioned in the local paper every few weeks 16
when she does something for the community attracts even 17
more business. 18
If you can’t volunteer your time during the busy start-up 19
phase of your business, you can still make a contribution to 143 20
one or two local community associations or buy a raffle ticket 21
for the local fundraiser. “A person with a growing business 22
may have no time, energy, or money to give,” says Jay Goltz, 23
CEO of Artists’ Framing Service in Chicago. “If your compa- 24
ny is on shaky ground, your first responsibility is to the com- 25
pany,” adds Goltz, who is also an active mentor and volun- 26
teer in his community. 27
Although he’s turned down invitations to sit on nonprofit 28
boards because, “they want money and friends with money,” 29
Goltz serves on the board of the American Cancer Society. 30
He volunteers and often donates in-kind services from his 31
company—like frames for a photo exhibit the charity pro- 32
duced. When he donates the frames to charitable causes, he 33
receives credit in the program and frequently, another credit 34
on each piece he frames. He said he has landed thousands of 35
dollars’ worth of new business by donating a few hundred 36
dollars’ worth of frames and labor. 37
If money is tight, entrepreneurs should consider volun- 38
teering their time to aid good causes. Shelley Seale, presi- 39
1 dent of RPS, a relocation business in Cedar Hill, Texas, has
2 always been an active volunteer and continued to give her
3 time when she went into business for herself.
4 “Time is just as or more valuable than money,” said Seale,
5 who runs a program called Girls Who Dare, which intro-
6 duces girls to the concept of business ownership during

7 meetings held once a week over an eight-week period.
8 Seale’s company also started the Making a Difference
9 Fund in 1996, which donates 10 percent of her compa-
10 ny’s profits to charity. Her employees, who can adjust
11 their schedule to volunteer and are encouraged to do vol-
12 unteer work on company time, also decide which chari-
13 ties will receive funds. A happy result of her philanthropy
14 has been the hiring of two top employees who applied for
15 jobs after learning about her company’s commitment to
16 charitable work.
17 Here are some simple ways to get involved:
18 ◆ Read the local community newspaper to learn about what’s
19 going on.
20 144 ◆ Choose a group that fits with your personal interests. If you
21 like sports, support the local soccer league or high school
22 football teams.
23 ◆ Join the chamber of commerce to get acquainted with other
24 business owners in your town.
25 ◆ If you can’t serve on a board or devote a lot of time to work-
26 ing with a group, sign up to work on a specific project.
27 ◆ If you have a big conference room, consider providing the
28 space for a community group to meet in your office after
29 hours.
30
31 Doing good work can attract good workers to your busi-
32 ness, raise your profile in the community, and make you feel
33 good about yourself. Entrepreneurs often forget how impor-
34 tant they are to the community, their employees, and their
35 families. They rarely receive the credit they deserve for pro-
36 viding jobs, goods, services, and a future for many young
37 employees.
38
39
1
Use Coupons to Attract Customers 2
G R E AT on a balmy spring evening, i took myself 3
out to the local movie theater. Standing outside the 4
81 door was a young man in a Häagen-Dazs apron. He 5
I D E A was passing out coupons offering a “double fea- 6
ture”—a free scoop of ice cream when you bought one scoop 7
at the regular price. I immediately knew where I was head- 8
ing after the show. 9
Ticket stub in hand, I trotted down the block to be the first 10
in line. (I didn’t want to embarrass myself by running.) For a 11
mere $1.85, I savored my calorie-laden pralines-and-cream 12
and coffee-chip double scoop. The kid even let me keep the 13
coupon for a repeat performance. Talk about generating 14
goodwill! 15
Giving away a free scoop of ice cream brought me into the 16
store for the first time. And, of course, it wasn’t the last. It 17
also proved to me that a coupon is a low-cost way to attract 18
new and repeat customers. 19
Coupons are great because they are cheap to print and 145 20
easy to distribute. You can print them yourself on your PC if 21
you don’t want to do anything fancy. Then you can pay to 22
have them stuffed into the local Pennysaver or newspaper. 23
You can also pay the post office to deliver them to local 24
households. 25
Or you can send an associate to place them under the 26
windshield wipers of parked cars. Although, admittedly, this 27
method can be annoying and produces litter, it’s good for a 28
local promotion. You might also consider giving your 29
coupons to local merchants—and offer to pass out their 30
coupons in exchange. 31
When you print up your coupons, be sure to code them so 32
you can track response. For example, put an “N” on them if 33
they were placed in a newspaper or “M” if they were mailed 34
to “resident” or “occupant.” 35
But before you run to the printer, think about an appeal- 36
ing offer. Anything “free” works if you have some sort of 37
retail operation. If you own a dry cleaner, you can offer dis- 38
counts on large orders. Any sort of “gift with purchase” 39
1 coupon will attract customers. It doesn’t matter what you
2 offer as long as it has a high perceived value and will draw
3 people to your door.
4
5
Do Good forYour Community
6
7 G R E AT one of the easiest ways to draw attention
8 to your business is to do something good for your
9 82 community. Small business owners across the coun-
10 I D E A try are coming up with terrific ways to contribute and
11 make a positive impression at the same time. You don’t have
12 to spend a lot of time or money on your project.
13 Here are some of my favorite ideas:
14 ◆ If you have a store with foot traffic, collect food or clothing
15 for the homeless or for your favorite charity.
16 ◆ Ask your employees and their families if they will participate
17 in a blood drive for the Red Cross or a local hospital.
18 ◆ Donate your services—it’s easy. A dry cleaner in Ohio, for
19 example, offered free dry cleaning to unemployed cus-
20 146 tomers who needed clean clothes for job interviews. When
21 someone got a new job, of course they became a steady,
22 loyal customer for life.

23 ◆ Join together with other business owners in your neighbor-
24 hood to sponsor a trash pickup day or graffiti cleanup cam-
25 paign. Ask a local paint store to donate paint and brushes in
26 exchange for the publicity. A True Value hardware store in
27 Mississippi provided supplies for the senior class to repaint
28 the high school gym; it made the papers and kept the kids
29 out of trouble for weeks.
30 ◆ Ask city officials if you can plant trees or start a community
31 garden.
32 ◆ Check with your accountant about the tax advantages of
33 donating excess inventory to a charitable organization. You
34 can get rid of what you don’t need and take advantage of a tax
35 break at the same time.
36 ◆ If you own a restaurant and want to attract new patrons, host
37 a fund-raising dinner for a local charity. A small Greek
38 restaurant in Maryland hosted a dinner and gave away a free
39 trip to Greece donated by a local travel agency. To liven
things up, collect door prizes from other merchants and raf- 1
fle them off at the dinner. 2
◆ If you really want to make a difference, create an apprentice- 3
ship program and hire local high school students or welfare 4
recipients to work part time at your company. Solid, on-the- 5
job training can mean the difference between success and 6
failure for a young or underemployed person. While many 7
big corporations are doing this, small companies can do the 8
right thing just as easily. 9
10
Once you’ve chosen a project, be sure to write a lively 11
press release and send it to your local newspapers, radio, and 12
television stations. The media are always looking for upbeat 13
local feature stories. 14
15
16
Use Food as a Selling Tool 17
G R E AT food is a powerful sales tool. everyone needs 18
to eat, so take advantage of tasty treats whenever you 19
83 can. This is a simple idea that really works. 147 20
I D E A Bright Star Resorts, which rents vacation homes 21
and condominiums in Central Florida, hosts a monthly bar- 22
becue for their vendor travel agents, owners, and employees. 23
The barbecues not only give people a chance to socialize, but 24
also help Bright Star’s management keep up with what’s 25
going on in their offices. 26
Food is also the most appropriate gift for many business 27
purposes. Holiday gift baskets filled with southern delicacies, 28
including divinity, pecan rolls, and miniature pecan pies, are 29
a huge hit among our clients and associates—so much so 30
that I sent the same basket two years in a row, then switched 31
back to Harry & David fruit baskets the following season. 32
One of the nicest presents we received from a client was 33
an attractive wicker basket filled with wine, goblets, coffee, 34
and gourmet snacks. We love to give and receive any sort of 35
edible gifts. Food has another advantage: It’s very affordable 36
and appreciated by people, no matter how affluent or impor- 37
tant they are. 38
39
1
2
Set Up a Strong Referral Network
3 G R E AT unlike the folks at big companies, small
4 business owners are usually eager to help each other
5 84 out by making referrals. Entrepreneurs really believe
6 I D E A that “what goes around, comes around.”

7 While many referrals are made informally by word-of-
8 mouth, some entrepreneurs take it a step further. Dana
9 Adkinson, owner of Keepsake Floral Inc. in Orlando, Florida,
10 runs a national floral preservation service. Because her ser-
11 vice relies heavily on referrals from florists and wedding con-
12 sultants, her challenge is getting these folks to recommend
13 her services.
14
15
16 Ways to encourage referrals
17
18 WORD OF MOUTH is still the most powerful marketing tool
19 for a small business. That’s why you want to do everything
20 148 possible to encourage your clients and customers to make
21 referrals. Here are some ways to recognize people who refer
22 business to you:
23 ◆ Establish a “best customer” program to reward good
24 customers for referrals with free shipping, two-for-one
25 and early-bird specials, or extra discounts on products
26 they buy frequently.
27 ◆ Ask customers if they know anyone who needs your prod-
28 ucts or services. You have to be proactive and not wait for
29 them to make referrals.
30 ◆ Publicize good referrals in your company newsletter or
31 on your website. People love to be recognized for doing
32 good things.
33 ◆ Offer incentives to your employees who ask customers to
34 refer new business. A day off with pay is a welcome
35 reward for landing a new client or customer.
36 ◆ Thank customers for their referrals by sending flowers,
37 a fruit basket, a gift certificate for a restaurant, or
38 movie tickets.
39
“We put together information so it looks like they’re pro- 1
viding a very needed service for their clients, yet the end 2
result is a valuable referral,” said Adkinson. “We do all the 3
work, then give them a 10 percent commission for each 4
referral.” The beauty of this cash-incentive system is that 5
Adkinson in effect expands her sales force “for the cost of 6
postage, printing, and phone expenses.” 7
You don’t have to be in the floral preservation business to 8
share customers. For instance, years ago I wrote about a 9
group of Orange County, California, hardware and software 10
companies that formed a marketing alliance to provide better 11
service. If someone called one of the companies for help, 12
they would inquire if they should also bring along someone 13
from an associated company. Business owners benefited 14
from the extra service and usually appreciated a turnkey 15
approach to solving their computer problems. 16
David McLean, with the Institute of Business Excel- 17
lence in Orlando, suggests faxing a coupon to customers 18
and clients offering them a discount on their next order if 19
they provide three referrals. Betsy Holtzapple, with Apple 149 20
Irrigation Inc. in Orlando, also sends coupons to clients 21
offering them a free sprinkler system inspection if they 22
come up with three referrals. Setting up a strong referral 23
network is a great way to receive a constant stream of new 24
customers. 25
26
27
Give It Away 28
G R E AT no matter what kind of business you’re in, 29
“free” is the most powerful word in your marketing 30
85 vocabulary. Offering potential clients or customers a 31
I D E A no-charge deal is an excellent way to gain new busi- 32
ness. For example, Sprint signed up thousands of new cus- 33
tomers by offering small business owners free phone calls 34
on Fridays. 35
“I was given a Sprint deal which pays all my local tele- 36
phone service for two years and provides free calling on 37
Fridays, plus free 800-line pagers for my employees,” 38
said Bob Dudley, president of Amerisat, a San Diego 39
1 commercial satellite-dish provider.
2 But you don’t have to be as big as Sprint to offer cus-
3 tomers something for free. Consultants can host a free edu-
4 cational seminar to attract potential clients. The session is a
5 perfect way to show off your expertise and prequalify clients
6 without spending a lot of time or money. Breakfast meetings

7 work best because people can stop by on their way to work—
8 and breakfast is the cheapest meal of the day!
9 If you sell clothing, consider giving free fashion consulta-
10 tions, by appointment, to new customers. Of course, after
11 the private consultation, encourage customers to buy the
12 clothes and accessories that looked best on them.
13 If you are an image consultant, create free “dress for
14 success” seminars for local businesses. Business owners
15 welcome the program because the consultant’s outside
16 expertise helps them establish a more professional dress
17 code for employees.
18 Offering a gift-with-purchase is another effective way to
19 boost sales. Big cosmetic companies have done this for
20 150 years, giving away tote bags, umbrellas, and sample-size
21 goodies.
22 You don’t have to sell cosmetics to make this free promo-

23 tion work. Other industries such as food distributors also
24 find this tactic particularly effective. Free samples are an
25 inexpensive and effective way to get products into the
26 mouths of consumers. Food companies rely on in-store
27 demonstrations quite frequently to test-market products.
28 Years ago, I was browsing through the aisles of a
29 gourmet food store when a woman ran up and stuffed a

30 bite of plum pudding in my mouth. I ended up buying
31 some as a gift—and also interviewing her for my syndicated
32 column.
33 So whatever you do, figure out a way to give it away for
34 free.
35
36
37
38
39
1
Design a Great Sign forYour Business 2
G R E AT when you don’t have a lot of money to 3
spend, your sign becomes a magnet for business. It’s 4
86 a perpetual advertisement. 5
I D E A Lloyd Miller, with Canterbury Travel Inc. in Win- 6
ter Park, Florida, uses a clever sign to lure customers. “I 7
own a travel agency on a high-visibility corner,” said Miller. 8
“We put our cruise price specials on a dry-marker board 9
labeled ‘Cruise Catch of the Day.’ The graphic is a cruise 10
ship on a fish hook. “The success has been phenomenal, 11
with some people calling on their car phones looking at us 12
through the window.” 13
It doesn’t take much time or money to design an eye- 14
catching sign for your business. Many sign makers rely on 15
computer technology to design a sign and then cut the letters 16
out of durable vinyl sheeting. 17
The first step is coming up with a great name for your 18
business. Then decide whether you need a logo or graphic 19
element to go along with your name. 151 20
A street sign usually features just your business name 21
and possibly the phone number. A window sign may include 22
your hours of operation and other details. 23
I’ve always been partial to a good neon sign, but what- 24
ever type you choose, it should fit the style of your business 25
and that of your community, and it has to be carefully 26
maintained. 27
28
29
Produce an Infomercial 30
G R E AT if you think marketing your product via an 31
infomercial is a quick and easy way to make mil- 32
87 lions—think again. Industry experts say only one 33
I D E A product in twenty actually hits the big time. 34
Although consumers bought more than $1.5 billion worth 35
of products via infomercials in 2000, it remains an “impre- 36
cise science,” according to Chris Ourand, spokesman for the 37
National Infomercial Marketing Association, based in Wash- 38
ington, D.C. Ourand said infomercials (which first hit the 39
1 airwaves in 1984 when Congress deregulated the television
2 industry) fall into a few broad categories: health and beauty
3 products, exercise equipment, motivational programs, and
4 household products.
5 One big success on the housewares front was the Smart
6 Mop, designed and manufactured by Santa Monica–based

7 Smart Inventions Inc. Cofounder and president Jon Nokes, a
8 former biology teacher from England, began selling his
9 super-absorbent rayon mop on the county fair and home-
10 show circuit about seven years ago.
11 Although retailers expressed strong interest in the mop,
12 Nokes decided to market it directly to the public. When three
13 established infomercial producers turned him down, he and
14 a team of out-of-work actors and models hit the home show
15 circuit, selling enough $29 mops to raise the $65,000 need-
16 ed to shoot their first infomercial. They then bought about
17 $15,000 worth of air time on a few stations to test consumer
18 response. The mops took off, and in nine months they sold
19 millions.
20 152 Nokes, who started the company in a tiny apartment and
21 stored the mops in rented garages, said the secret of making
22 money is to make something easy enough for an eight-year-

23 old to use. It has to be cheap to make but have a high per-
24 ceived value. In his case, the mops cost under $5 to manufac-
25 ture, but they sold for six times that much (including refills)
26 on the air.
27
28
29
Tips from the National Infomercial
30 Marketing Association
31
32 ◆ Do your homework. Find out what worked for successful
33 infomercial producers.
34 ◆ Pick the right stations, market, and time to air your
35 infomercial.
36 ◆ Offer strong money-back guarantees to boost consumer
37 confidence.
38 ◆ Believe in your product.
39
Another surprising secret, he said, is that a truly success- 1
ful infomercial sets the stage for dynamic retail sales. “We 2
went into retail stores and during the first three months we 3
sold one million mops a month,” he said. “The following 4
year we sold almost four million units.” 5
Nokes, whose company also sells the Smart Chopper and 6
Quick Sand easy-cleaning cat box, said he believes infomer- 7
cials are a great way for entrepreneurs to introduce new 8
household products. “It doesn’t matter how good the product 9
is if the public doesn’t know about it,” he said. “When you 10
have a new product, you need to educate the public.” 11
12
13
Put a Pig inYour Window 14
G R E AT iris fuller, founder and president of 15
Fillamento in San Francisco, cried for two hours after 16
88 attending a retailing seminar by Peter Glen. They 17
I D E A were tears of joy and inspiration. 18
“He made such a difference in the way we do what we 19
do,” said Fuller, whose 10,000-square-foot, upscale home- 153 20
accents store is a Pacific Heights landmark. The spacious 21
store features dinnerware, lamps, pillows, candles, glass- 22
ware, and unique gifts. 23
Fuller subsequently hired Glen, a former actor turned 24
retail guru, to meet with her staff and push them to new 25
heights in visual merchandising. Glen also inspired her to 26
surprise her employees with an overnight trip to Las Vegas 27
so they could collect ideas from Cirque du Soleil’s magical 28
performance. 29
The magic appears to be working: Fillamento is posting 30
double-digit sales increases and posts sales of about $5 mil- 31
lion per year. “For sixteen years, I’ve kept a customer’s point 32
of view,” said Fuller. “The store is crispy clean, we have fresh 33
flowers—it feels good, and it smells good.” 34
Fuller, who does all the buying for the store, is one of 35
thousands of small retailers who rely on Glen’s advice and 36
zany ideas to get them out of a rut. Glen, who is a popular 37
keynoter at retailing conferences, insists that smart retail- 38
ers will not just survive, but flourish, if they set them- 39
1 selves apart from the competition.
2 Small retailers, Glen says, must create “cheap miracles” to
3 attract shoppers. For example, Glen suggests spending $40
4 to tie a big ribbon around your store. Put a pig in the win-
5 dow, or a bull in your china shop—as one New Zealand shop
6 owner did. Do whatever you can to create a stir.

7 “The retail business is routine and can kill you one day at
8 a time,” said Glen, author of It’s Not My Department (Berke-
9 ley; 1992). “Retailers have to face the competition instead of
10 whining about it,” he said. “Most are waiting for Wal-Mart to
11 kill them.”
12 Surprisingly, he urges small retailers to sell merchandise
13 at regular price. “Don’t discount it, and don’t give it away,” he
14 said. “You have the unique ability to provide real customer
15 service and keep a customer for life.”
16 He warns small retailers to pay attention to customers
17 when they step into the store. “If you don’t want someone to
18 interrupt your discussion of who’s in the hospital, why not
19 just shut down?”
20 154 Glen urges retailers to “love your business again.” “Retail-
21 ing is a terrible job—nobody is in it for the hours or the
22 money,” said Glen. “Concentrate on what you do best and go

23 in that direction—furiously.”
24
25 Put Your Company Name
26
27
on Everything
28 G R E AT when they first started making “rack
29 Sacks,” plastic bag holders, Exhifix Inc. didn’t have
30 89 much money to spend on advertising. That’s why
31 I D E A they printed their company name and phone number
32 on every product. As a result, it became very easy for people
33 to order bag refills.
34 It sounds so simple, but too many small companies
35 neglect to put their name and phone number on their
36 products.
37 One small Arizona company that didn’t forget benefited
38 with a big reorder. After just one sniff, I fell in love with
39 Tessita’s Secret, a deliciously fragrant lotion made with cac-
tus extracts and aloe vera. Before I used the last dab, I 1
called the number on the bottom of the jar and ordered 2
more—lots more. 3
It makes sense to use your product as its own billboard. If 4
people liked it enough to buy it once, you want them to know 5
how to buy it again. 6
7
8
Free UpYour Sales Force 9
G R E AT “most salespeople love to sell but hate to 10
generate their own leads,” said the co-owner of a 11
90 financial planning firm in Orlando. “So we invest a 12
I D E A great deal of time and money for telemarketers to 13
generate leads. This frees the salesmen to do what they love 14
to do the most—sell.” 15
Freeing people to do their best work is good not only for 16
morale, but also for your bottom line. For the aggressive 17
salesperson who hates to dig up leads, a good telemarketer 18
using a current database can provide dozens of leads in a 19
few hours. They can eliminate the chilling aspect of cold 155 20
calling. This two-pronged approach works best when you 21
are selling a high-end product or service, like financial 22
products. 23
Busy, well-to-do people don’t like to be interrupted in the 24
middle of dinner by an unsolicited phone call. But they will 25
make an appointment to speak to someone if they are inter- 26
ested in what you are offering. Supporting your sales force 27
with telemarketers and appropriate communications tech- 28
nology makes good financial sense. 29
In many cases, top sellers not only hate to generate their 30
own leads, but they also dislike and resist filling out the after- 31
sale paperwork. And when they mess it up, it creates more 32
problems down the line. So consider hiring an assistant to 33
take care of the after-sale details. This expedites orders and 34
frees the salesperson to move on to the next sale. 35
Smart managers know exactly what everyone’s time is 36
worth and provide all the necessary tools and support to 37
maximize productivity. 38
39
1
2
Hire a Mascot or a Celebrity
3 G R E AT brenny watt didn’t set out to find a
4 mascot for her small store, but she ended up with a
5 91 famous cat. “One day, a stray cat wandered in, and we
6 I D E A started to feed her,” said Watt. “Then one night, we

7 accidentally locked her inside the store. The next morning,
8 when we came in, she was asleep in the window. She
9 became an instant celebrity.”
10 People, especially kids, loved Lily the cat and came to visit
11 her weekly. To raise money for a local school, Watt decided to
12 host a “Tea with Lily.” It was easy to promote the event,
13 because by then most people knew who Lily was.
14 Today Watt works as a freelance writer, but she remem-
15 bers her famous cat mascot. “She was wonderful PR for us
16 and loved her unusual home.”
17 But remember, if it’s appropriate to have a pet in your
18 business, make sure it’s a people-loving one.
19 Some small businesses are fortunate enough to hook up
20 156 with a celebrity spokesperson. David Blumenthal, president
21 of Lion Brand Yarn Co. in Manhattan, learned that Wheel of
22 Fortune hostess Vanna White loved to crochet. He immedi-

23 ately contacted her agent to ask if she would be interested in
24 becoming the spokesperson for their line of yarns and cro-
25 chet patterns.
26 They made a deal that has endured through the years.
27 White worked with Lion on two illustrated pattern books on
28 crocheting. She consistently wows customers when she
29 appears at trade shows on behalf of Lion Brand Yarns,
30 demonstrating her crocheting skills and emceeing a fashion
31 show of crocheted creations.
32 It doesn’t make sense in every single case, but many small
33 businesses benefit enormously from a mascot or spokesper-
34 son. It’s a component of your marketing plan that can help
35 establish a brand identity for your product and stir up a good
36 deal of excitement, too.
37
38
39
1
Publish a Newsletter 2
G R E AT in this age of instant information on the 3
Internet, it’s comforting to know that there is still a 4
92 vibrant market for old-fashioned printed newsletters. 5
I D E A There are about 5,000 subscription newsletters and 6
thousands more for free, according to industry experts. 7
Newsletters cover everything from fly fishing and school vio- 8
lence to gluten-free baking. 9
With the right mailing list, exclusive or proprietary infor- 10
mation, and a few thousand dollars, just about anyone who 11
can write or hire writers can start one. But making money is 12
another story. 13
“You have to pick a field as narrow as you can get it, but 14
leave it wide enough so there’s an audience to promote to,” 15
advises Howard Penn Hudson, president of the Newsletter 16
Clearinghouse in Rhinebeck, New York. “Too often, people 17
who start newsletters find they haven’t narrowed the field 18
enough.” 19
Health care, technology, and celebrity newsletters are hot 157 20
right now, according to Penn Hudson, who publishes the 21
Newsletter on Newsletters, founded in 1964. “Rush Limbaugh 22
has a newsletter and attracts an audience with his name,” 23
said Penn Hudson, adding that “newsletters ride the trends.” 24
“When we had an energy crisis in this country, there were 25
two dozen newsletters about energy,” he said. “When the cri- 26
sis ended, so did those newsletters.” Newsletter publishers 27
charge whatever the market will bear, especially if they are 28
offering specialized or competitive information. One of the 29
most expensive newsletters, the Daily Report for Executives, 30
costs $5,811 a year, according to Penn Hudson. 31
You might think that the Internet and all that free infor- 32
mation is hurting newsletter sales. Not so, says Patty Wysoc- 33
ki, executive director of the Newsletter Publishers Associa- 34
tion. She said newsletter publishers aren’t too worried about 35
competition from the Internet. Some even use it to market to 36
potential subscribers. 37
Hundreds of kitchen-table publishers and major corpo- 38
rations belong to Wysocki’s trade association, which 39
1 offers several helpful publications.
2 Beverly Davis, editor and publisher of Supermodel News,
3 started writing and publishing her newsletter after pursuing
4 a modeling career. “I started with $4 and a lot of faith,” said
5 Davis, who still works as a secretary to support herself.
6 Supermodel News has grown from two to eight pages since

7 she began publishing it in November 1995. Her 2,600 sub-
8 scribers in twenty-one states are eager for her modeling tips,
9 lists of model search contests, pageants, fashion events, fit-
10 ness tips, and stories about top models. Most of her sub-
11 scribers are teenage girls, but one of her oldest subscribers is
12 Mrs. Senior America 1995.
13 Davis attributes much of her success to mentions of her
14 newsletter in the press. “With no advertising budget, I rely
15 totally on free publicity,” said Davis. “Money from sub-
16 scribers pays for postage and printing,” said Davis. “I work
17 on this about three hours a day, seven days a week.”
18 Before you publish a newsletter, read Starting and Run-
19 ning a Successful Newsletter or Magazine, by Cheryl
20 158 Woodard (Nolo Press; 1998). Her book is a lively,
21 easy-to-read bible for publishers.
22 Meanwhile, here are Woodard’s tips for first-time

23 newsletter publishers:
24 ◆ Concentrate on markets you know very well.
25 ◆ Listen to your readers and advertisers and develop products
26 responsive to their needs.
27 ◆ Get help from experienced people.
28 ◆ Adopt good ideas whenever you find them. Study what’s
29 already working for other publishers by collecting media kits
30 or renewal promotion letters and use their best ideas.
31 ◆ Befriend influential people and ask them to support your pub-
32 lication.
33 ◆ Study your results and be prepared for change.
34 ◆ Aim for readers who have continuing information needs.
35 ◆ Look for ancillary profit opportunities. Many publications
36 make most of their profits from special reports, books, and
37 videos.
38 ◆ Look hard before you leap into print. Don’t go forward until
39 you’ve got a long-term plan you can live with.
If you want to check out the competition before launching 1
a newsletter, Penn Hudson publishes a newsletter directory 2
and a variety of other relevant publications. For information, 3
write to The Newsletter Clearinghouse, P.O. Box 311, 4
Rhinebeck, NY 12572 (www.newsletter-clearinghse.com). 5
For additional information, write to Newsletter Publishers 6
Association, 1401 Wilson Blvd., #207, Arlington, VA 22209. 7
8
9
Market Your Service-Based Business 10
G R E AT selling your expertise—an intangible 11
product—requires a much different approach from 12
93 selling a product that sits on the shelf. Some profes- 13
I D E A sionals, like doctors and lawyers, are limited by pro- 14
fessional ethics to marketing their services through specific 15
channels. If you’re a consultant, you have more options. 16
One of the best ways to market your services is to position 17
yourself as an expert in your field. This can be accomplished 18
by writing articles for trade publications or general interest 19
magazines—or by being quoted in newspapers and making 159 20
guest appearances on local or national television. You may 21
think that you could never attract a reporter’s attention, but 22
it’s easier than you think. 23
The first step is to find out who covers your particular 24
industry at the local newspaper, radio, or television stations. 25
Once you have a name, draft a short introductory letter. 26
Explain that you are available to provide background infor- 27
mation, resources, or a quote on a particular subject. 28
Attach your business card or company brochure. Wait 29
about a week and then make a follow-up telephone call. Be 30
sure to find out when that particular news organization is on 31
deadline, and never call when the reporters and editors are 32
closing an issue. 33
Reporters are continually looking for new sources. So be 34
patient and continue to send along clippings and items of 35
interest. You’ll find that once you get quoted in one newspa- 36
per or magazine, other reporters will begin to call you and 37
recognize your name. 38
Another good way to attract new clients is to offer them a 39
1 sample of your expertise. Invite current and potential clients
2 to a breakfast or seminar. Give a brief presentation to whet
3 everyone’s appetite and then take questions from the audi-
4 ence. Ask your existing clients to each invite one or two
5 guests to expand your circle of contacts.
6 In fact, your current clients are always your best source of

7 new business. You should be spending at least one hour a
8 day soliciting referrals, sending out letters or brochures, or
9 making cold calls. Ask your clients if they can refer you to
10 one or two potential leads. At first they may be reluctant, but
11 if you give them time to think about it, they should be able to
12 come up with at least one or two names for you.
13 Many consultants find that the cross-marketing approach is
14 another effort that works very well. Team up with a consultant
15 whose business compliments yours—but is not competitive.
16 You might share mailing lists or produce a joint brochure.
17 Although the “Pig in the Window” approach is not the
18 answer for most consultants (see Great Idea 88), there are
19 plenty of other similarly creative and effective ways to market
20 160 your services.
21
22
23
Host an Open House
24 G R E AT one of the best ways to acquaint customers
25 and clients with your business is to arrange a visit.
26 94 An open house combines a social event with the abili-
27 I D E A ty to do some serious one-to-one marketing. Of
28 course, if you deal with toxic chemicals or dangerous
29 machinery, you’ll have to decide whether or not an open
30 house is the best way to boost awareness of your business.
31 One of my strongest and fondest memories is touring the
32 Pepperidge Farm bakery on a third-grade field trip. I’ll never
33 forget the sweet, yeasty smell of the bakery and the freshly
34 baked loaf of white bread they gave each of us to take home.
35 Since that tour, I’ve been a loyal Pepperidge Farm customer.
36 Hershey Foods is another big company that invites thou-
37 sands of visitors into their factories each year. That open-
38 door policy has turned Hershey, Pennsylvania, into a major
39 American tourist mecca.
Even if you rarely have visitors, think of the things people 1
would like to learn about your business. Few people ever have 2
the opportunity to see how things are made and packaged. 3
You may not have a glitzy office, but even a small-scale 4
open house can draw people to your door. Derek Selbo, pro- 5
gram manager of The Knowledge Shop in Casselberry, Flori- 6
da, decided to host just such an event to introduce people to 7
the vast array of personal enrichment and professional class- 8
es they offered. 9
“When the Internet was new we had a free ‘Try the Inter- 10
net Day,’” said Selbo. Visitors were encouraged to ask ques- 11
tions and surf the Net. They sent electronic-mail messages to 12
friends and learned how to find and navigate websites. “This 13
event brought us a surge of enrollment in our computer and 14
social classes,” said Selbo. 15
No matter how boring you think your business is, re- 16
member that people love to have a behind-the-scenes look 17
at anything. Consider the incredible popularity of Universal 18
Studios tours that visitors line up for. 19
Here are some tips for planning an open house: 161 20
◆ Create a small committee to make the preparations, but 21
involve everyone you can in the planning process. 22
◆ Figure out whether you’ll give organized tours or let people 23
wander around on their own. 24
◆ Plan a menu of easy-to-eat finger foods and simple beverages. 25
Restrict eating to the lunchroom or other suitable area. 26
◆ Pick a time of year when your business looks its best, and 27
weather won’t jeopardize attendance. 28
◆ Send out invitations at least a month in advance. Ask people 29
to RSVP via telephone, fax, or e-mail. Schedule the event to 30
last two or three hours—no more. 31
◆ Ask all your employees to tidy up their areas and find places 32
to lock up any valuables before the open house. 33
◆ Hand out a flyer with basic information about your company. 34
◆ Assign plenty of staffers to act as hosts and guides. 35
◆ Buy flowers or plants to decorate the reception area. 36
◆ Rest up the night before so you are ready to meet and greet 37
people. 38
◆ Try to have fun. 39
1
2
Promote with Prepaid Phone Cards
3 G R E AT phone cards have been popular in europe
4 since the mid-1980s when British Telecom first
5 95 issued them to make it easier for customers to call
6 I D E A home from Germany and France. But they took

7 another ten years to take hold in America. “We in the United
8 States are not used to prepaying for anything,” said Rick
9 March, president of MHA Communications in Highland
10 Park, Illinois.
11 March, who previously worked in the telecommunications
12 industry, decided to make his niche in phone cards. His
13 company helps clients make a marketing splash with the
14 popular plastic cards, which are now fast becoming collec-
15 tor’s items. In addition to giving away free calls to clients as
16 an incentive to use your services, you can also use the phone
17 cards to take a market survey or to provide product informa-
18 tion. For a survey, you send out the cards and ask recipients
19 to call a toll-free 800 number. A menu-driven voice mail sys-
20 162 tem asks a few short questions, and the answers are record-
21 ed. After completing the survey, customers can use the card
22 to make free domestic or international telephone calls,

23 depending on how you set it up.
24 A polling company provides help with the surveys, while
25 MCI and Sprint provide the actual long-distance service,
26 March said. The survey costs between $1,000 and $2,000
27 to conduct.
28 Even if a survey isn’t for you, giving away phone cards as a
29 promotion is very affordable. For example, a small company
30 can buy 500 ten-minute phone cards with their logo printed
31 on the front and a recorded message for about $1,000,
32 March said. You can send in your own artwork or pay his
33 firm to design something appropriate.
34 “We can make a card with anything from five free min-
35 utes to three free hours,” he said. Best of all, “there is a high
36 perceived value of $5 to $10 for a fifteen-minute card,
37 although it costs you much less.”
38 March said the greatest thing about phone cards is that
39 they are so easy to use.
For more information on marketing with phone cards, 1
go to mhacom.com or call MHA Communications at 800- 2
260-9642. 3
4
5
Generate Publicity in Your Community 6
G R E AT most small business owners, at least at 7
first, can’t afford to hire a professional public relations 8
96 person. But you don’t need expensive consultants to 9
I D E A attract publicity. You can do it yourself if you do some- 10
thing noteworthy—and then focus on obtaining coverage by 11
your hometown newspaper, radio, or television station. 12
One of the best ways to generate publicity for your com- 13
pany is to do something positive for the community. 14
Here are some suggestions: 15
◆ Sponsor a 5 or 10k run for your favorite charity. Print up tee- 16
shirts for the runners. Put your company logo on everything 17
from the paper cups to the signs along the route. 18
◆ Collect food or clothing for the homeless or a local shelter. 19
Offer your customers a discount for participating in your 163 20
charity campaign. 21
◆ Create a scholarship. Even $500 will make a big difference to 22
a disadvantaged student. 23
◆ Create a photo opportunity by planting trees along a street, in 24
front of your store, or in an unattractive part of town. 25
◆ Help organize a community flower or vegetable garden. If you 26
have a parcel of land, offer it for public use. 27
◆ Organize a merchants’ neighborhood crime-watch program. 28
Hold the meetings in your store or office. 29
◆ Offer your conference room for community meetings. Then 30
every time the paper lists the meeting schedule, your company 31
is mentioned. 32
◆ Join with a local paint store to sponsor a graffiti paint-out 33
campaign. Organize volunteers from several community 34
groups to increase involvement. 35
36
community service is ideal for local television news 37
coverage, especially if you hold an event on a weekend. Com- 38
munity projects will merit at least a paragraph or two in your 39
1 local newspaper. Local television stations are always looking
2 for visual stories involving people doing something positive
3 for the community.
4 Once you decide on a project, draft a press release two
5 weeks before the event. Send it on company letterhead to the
6 editors of local newspapers and the assignment editors of

7 the nearby television and radio stations.
8 Follow up a few days later with a brief phone call. Try not
9 to call any news organization in the late afternoon. Most
10 morning newspapers are edited and put together from 3 PM
11 to 7 PM. Your best chance of reaching an editor is between
12 10:30 AM and noon. Take advantage of voice mail and leave a
13 detailed message. You want to be persistent without being a
14 pest. Television stations are more apt to assign stories to
15 reporters on a daily basis.
16 But realize that if something more newsworthy happens,
17 such as a crime, fire, or flood, your neighborhood cleanup
18 story will never make it to the 11 o’clock news.
19 You might also invite your local station or paper to partici-
20 164 pate in your event as a media sponsor. This takes more time
21 and effort, but it may be worth it. Be sure to involve all your
22 employees and their families in your event.

23
24
25
Give Away a Seminar Seat
26 G R E AT karen tate, president of the griffin tate
27 Group in Cincinnati, teaches employees of big and
28 97 small companies how to manage complex projects.
29 I D E A Although she earns most of her money conducting
30 group seminars for big corporations, she attracts new indi-
31 vidual clients by raffling off a free project management
32 course once a month.
33 “The free seat costs me the printed materials and two free
34 lunches,” said Tate. “But, when I raffle off a free seat at a
35 meeting before the next seminar, I’m mentioned in the orga-
36 nization’s newsletter and that gives me free publicity.”
37 Her basic, two-day project management seminar costs
38 $995 and is open to any businessperson interested in learn-
39 ing how to manage complex projects. “Once, a quiet guy
showed up at a meeting and won the free seat,” recalled 1
Tate, author of Getting Started in Project Management (John 2
Wiley & Sons; 2001). “He took the course and must have 3
liked it because soon after that, he referred four paying col- 4
leagues to me.” 5
Tate, who also authored the pocket-sized, spiral-bound 6
Project Management Memory Jogger (Goal/QPC; 1997), 7
said there are about 100,000 professional project man- 8
agers working around the United States. When she entered 9
the field about twenty-five years ago, there were only 500. 10
With so many projects to manage, learning how to keep 11
things moving is a valuable business skill, she said. For 12
more information, check out www.griffintate.com or call 13
877-984-8150. 14
If you provide any sort of training, consider trying Tate’s 15
give-it-away philosophy. An unfilled seminar seat is perish- 16
able, just like an airline seat. If you can fill it with someone 17
who may recommend your class to someone else, it’s worth 18
the price of a lunch and a notebook. 19
165 20
Know the Difference between 21
22
Marketing, Advertising, and PR 23
G R E AT too many entrepreneurs use a scattershot 24
approach to marketing, advertising, and public rela- 25
98 tions, primarily because they don’t understand the 26
I D E A subtle differences between the three. But knowing 27
which to use, and when, can save you time, aggravation, 28
and money. 29
Marketing encompasses a broad range of tactics from call- 30
ing customers on the telephone to attending a trade show 31
and passing out hundreds of pens with your company name 32
printed on them. 33
One of the most cost-effective ways to market your busi- 34
ness is to put your name on something useful. Jack Nadel, a 35
veteran marketing expert and author of There’s No Business 36
Like Your Business (iUniverse.com; 2000), specialized for 37
several decades in developing promotion items for big and 38
small companies. 39
1 Nadel says the key to putting your company name or logo
2 on something is to make sure it’s something people will
3 keep around for a long time. He said tee-shirts, baseball
4 caps, jackets, and fanny packs were the most popular com-
5 pany giveaways in the 1990s. Sports bottles with logos were
6 also hot.
7 Marketing involves a myriad of creative promotional
8 campaigns—all designed specifically to push your products.
9 Advertising means paying for space in a newspaper or mag-
10 azine, or buying time on a radio station, television station,
11 or website.
12 But before you spend a dollar on advertising, figure out
13 exactly what your competition is doing, establish specific
14 goals, and set a budget, advises Andy Narraway, general
15 manager of Odiorne Wilde Narraway & Partners, an adver-
16 tising agency based in San Francisco.
17 Narraway’s colleagues at the shop charge clients flat fees
18 and present simple sketches rather than elaborate cam-
19 paigns to land new business. He has this advice for entrepre-
20 166 neurs: “Determine whether you really need an agency or
21 whether a graphic designer, freelance artist, or copywriter
22 will suffice,” said Narraway. “Very often, if you want to run

23 an ad in a local newspaper, radio, or TV station, the sales
24 reps will help you develop your own ad.”
25 If you decide that you need an agency, meet with at least
26 three agencies before you sign with one. Ask for client refer-
27 ences and check them carefully before the first meeting.
28 Public relations, often the most misunderstood form of
29 promoting your business, involves getting your company or
30 products mentioned in the media. “An effective PR program
31 can bring valuable recognition to your company, because if
32 your product or service is mentioned in the media, it’s an
33 implied third-party endorsement,” explains Christine Soder-
34 bergh, an independent PR consultant based in Pacific Pal-
35 isades, California.
36 The key difference between advertising and PR is that
37 with an ad, you own the time and space and can basically say
38 anything you want to; with PR, you can’t control the timing,
39 placement, or editorial process.
“Don’t ever ask a reporter if you can see the copy before it 1
appears,” advises Soderbergh. “And if you call an editor or 2
reporter cold, always ask if they can talk, or if they are on a 3
deadline.” She said it’s critical to match the story pitch to the 4
reporter, by following their work and making sure they cover 5
the industry you’re involved with. 6
With public relations, you’ll pay a PR person to pitch the 7
story, but won’t pay for the story to appear. Independent PR 8
professionals usually charge by the project. Larger PR 9
agencies require a retainer, usually $3,000 to $5,000 10
a month or more, plus all expenses. One critical issue: 11
There are never any guarantees that your story will be pub- 12
lished or broadcast, no matter how hard you or your PR 13
firm may try. 14
15
16
Ask for Two Business Cards 17
G R E AT whenever you meet a new, interesting 18
person, always ask for two business cards. Why? 19
99 Because you want to keep one and pass the other 167 20
I D E A along to someone else who might benefit from this 21
person’s products or services. 22
I learned this tip from a veteran networker who attended 23
many early morning networking breakfasts around Los 24
Angeles. Asking someone for two cards is very flattering and 25
serves another purpose. Your request will make you stand 26
out in a crowd. And, chances are, you will more likely be 27
remembered by the person you just met. 28
Here’s another business card-related tip: When you attend 29
a trade show, professional meeting, or conference, always 30
wear a jacket with two pockets. Use one pocket to hold the 31
cards collected from the people you meet and the other to 32
hold your cards. This two-pocket systems eliminates fum- 33
bling in your purse or wallet to dig out a business card when 34
people are on the move. 35
36
37
38
39
1
2
Have a Theater Party
3 G R E AT when eric schwab moved his advertising
4 specialties company out of his home, he needed a
5 100 novel way to entice clients to visit the new location.
6 I D E A “We partnered with the Civic Theatre of Central Flori-

7 da for the opening night preview of Forever Plaid,” said
8 Schwab.
9 He used the plaid theme for everything: the invitations,
10 balloons, and decorations for the Open House/Theater
11 Party. It was scheduled on a Wednesday night for maximum
12 attendance.
13 While Schwab threw a lively party and raised his company
14 profile, the theater benefited by having an audience full of
15 happy patrons on preview night and by selling ticket sub-
16 scriptions.
17 And according to Schwab, not only did lots of people dis-
18 cover his new location, but they also couldn’t stop talking
19 about his creative marketing approach.
20 168
21
Invite Associates to a Trade Show
22
23 G R E AT
if exhibiting at or attending a trade show
24 is on your calendar this year, turn it into a valuable
25 101 business trip by inviting business associates to meet
26 I D E A you there. As soon as you sign up to attend, go
27 through your database or business card file and make a list
28 of everyone you know who lives within 100 miles of the
29 show. Then invite them to meet you there. You might want
30 to pay their registration fee, if it isn’t too exorbitant.
31 Meeting business associates or prospective customers
32 at a show has several advantages. It saves you an extra
33 trip to their city, for one thing, and if you are exhibiting at
34 the show, they’ll see your products and services displayed
35 in a high-profile place. They’ll also be able to meet your
36 key staff members and see how you interact with the pub-
37 lic. If you can wangle an invitation to speak at a seminar
38 or take part in a panel discussion, better yet. Invite your
39 associates to hear your presentation. What better way to
position yourself as a leader in your industry? 1
If you aren’t exhibiting, it’s still great to walk the aisles 2
with a colleague and check out the competition. You can 3
brainstorm as you collect information and brochures; you 4
can introduce your guest to others in your industry. 5
If several clients accept your invitation to meet, turn it 6
into a party by planning a breakfast or dinner to entertain 7
them. Be sure to make reservations early because the city 8
may be overrun with convention attendees. 9
Attending a trade show, with or without guests, is an 10
essential activity for successful entrepreneurs—it helps you 11
to keep up with the competition and connect with other 12
industry movers and shakers. 13
14
15
Really Work a Trade Show 16
G R E AT hedy ratner, founder and copresident of 17
the Women’s Business Development Center 18
102 (WBDC) in Chicago, really knows how to work a 19
I D E A room. A consummate networker, she has devoted 20
169
years to helping women entrepreneurs start and grow their 21
businesses. 22
Here are some of her great tips for making the most of a 23
trip to a trade show: 24
◆ Remember why you registered. Ask yourself whether your 25
goal is to find new suppliers or study the competition. 26
“Decide on your goals and be certain to accomplish them 27
before the day ends,” said Ratner. 28
◆ Dress for success and comfort. “First impressions are impor- 29
tant, so dress businesslike,” Ratner advises. “You’ll meet 30
potential clients, resource people, and perhaps a banker who 31
may one day consider your loan.” 32
◆ Wear comfortable shoes because you will walk for miles. 33
◆ Plan your schedule and decide which exhibits you want to 34
visit ahead of time. 35
◆ Carry a small tape recorder or notebook to take notes on 36
things you need to follow up on. 37
◆ Note seminars, workshops, and other events that occur during 38
the conference. Be sure to attend the key ones. 39
1 ◆ Bring lots of business cards and brochures. Don’t forget trav-
2 elers’ checks, credit cards, and personal identification.
3 ◆ Be flexible and leave time for spontaneous meetings with
4 important people. “Trust your instincts to lead you to men-
5 tors, models, key contacts, and resources.”
6 ◆ Don’t forget to follow up. Sort out the material and cards you
7 collected soon after returning to the office. Record new con-
8 tacts and remind yourself to take action.
9
10 For information on WBDC programs and services, call
11 312-853-3477.
12
13
14
KnowYour Competition
15 G R E AT
entrepreneurs love to brag about beating
16 their competition, but the truth is, most small busi-
17 103 ness owners are too buried in work to keep track of
18 I D E A what their competition is up to. But operating your
19 business in a vacuum can lead to its demise.
20 170 “You have to start with the basic premise that you need
21 to know what your competition is doing,” said Guy Kawasa-
22 ki, author of How to Drive Your Competition Crazy (Hyper-

23 ion; 1996). “So you need to shut off the fax machine and
24 the phone, close the door, and really figure out what you
25 stand for, what your competition is doing, and what they
26 stand for.”
27 Kawasaki, who rejoined Apple Computer after a break to
28 help with their marketing strategy, says there’s no excuse not
29 to know everything about your competitors. You can sit at
30 your computer with a modem to find out just about anything
31 by tapping into database services such as Nexis or Dialog or
32 by searching for free information through the Internet and
33 the World Wide Web.
34 After you fully understand what your competition is
35 doing, figure out where they are vulnerable, he says. “You’re
36 looking for chinks in the armor,” said Kawasaki. “You’re
37 looking for pockets of dissatisfied customers that you can
38 steal from them.”
39 Kawasaki’s book is filled with exercises, tips, strategies,
and interviews with people ranging from hotel magnate 1
Steve Wynn to bull-riding champion Charles Sampson. 2
Meanwhile, here are some ways to check out your com- 3
petition without spending a lot of money: 4
◆ Go shopping. If you make or sell a retail product, get out to 5
stores at least once a week. One of the most successful entre- 6
preneurs I know, Kathy Taggares, president and founder of 7
K.T.’s Kitchens, prowls supermarket aisles checking out her 8
private label frozen pizzas and Bob’s Big Boy salad dressings. 9
She needs to know where her products are placed, but also 10
wants to see what she’s up against. 11
To learn more about her great company, see Great Idea 12
121. 13
◆ Subscribe to your industry’s trade magazine or newslet- 14
ter. Read it from cover to cover when it arrives. I see too 15
many piles of unread trade journals sitting in entrepreneurs’ 16
offices. Smart reporters are paid to collect valuable informa- 17
tion for you—so read it. 18
◆ Attend a professional meeting at least once a month. 19
Getting out of your office and meeting competitors face to 171 20
face is invaluable. People love to brag about what they are 21
doing and often say too much about their upcoming prod- 22
ucts or services. 23
◆ Go to a major trade show at least once a year. You may 24
associate trade shows with exhaustion and aching feet, but 25
walking the aisles at an industry show can revitalize or even 26
save your business. Sign up for the seminars, go to the 27
receptions, and talk to everyone you can. Eavesdrop shame- 28
lessly during cocktail hour. 29
◆ Relentlessly survey your customers. Ask them what 30
they like and don’t like about doing business with you. 31
Ask the right questions, and they will tell you quite a bit 32
about your company—and your competition. Postcard sur- 33
veys are cheap, quick, and effective. Send out a stamped 34
postcard with multiple choice or fill-in-the-blank ques- 35
tions. Offer a discount or incentive if they return the card 36
promptly. 37
◆ Assign a staff member to order your competitor’s mate- 38
rials—brochures, catalogs, annual reports, price lists, and so 39
1 on. Read their ads carefully. Check out their pricing and
2 return policies. Know all you can about the enemy.
3 ◆ Order something from your competitor every few
4 months. This is the best way to find out exactly how they
5 treat their customers. If what they sell is too big or too expen-
6 sive to buy, visit their showroom.

7 ◆ Organize an informal focus group at your church or syna-
8 gogue, or with members of an organization. Ask what they
9 like and don’t like about your products and your competi-
10 tion’s. It may not be scientific, but market research is more
11 art than science.
12 ◆ Talk to industry analysts or consultants who serve your
13 industry. Buy stock in your competitor’s firm so you can
14 receive annual reports and other information.
15 ◆ Read newspapers and magazines. Clip out articles relating
16 to your business or assign a staff member to do it on a
17 weekly basis.
18
19 For more about assigning a personal information officer
20 172 to help keep you informed, see Great Idea 159.
21
22
23
Tap the Growing Hispanic Market
24 G R E AT some of the 2000 census figures have the
25 U.S. Hispanic community feeling new strength.
26 104 The numbers show a population growing faster
27 I D E A than expected and more broadly distributed than
28 in years past.
29 “Best of all,” says George Herrera, president and CEO of
30 the United States Hispanic Chamber of Commerce, “it’s a
31 young population, which means it’s a population of con-
32 sumers who will be here for a long time. We are offering
33 corporate America a very young and very long-term con-
34 sumer base.”
35 The Census figures released in March 2001 indicate that
36 in twenty years Latinos will represent 20 percent of this
37 country’s youth. In 1997 they were 16 percent of the nation’s
38 69.5 million people under the age of eighteen.
39 A young and growing population represents an increas-
ingly significant economic force, Herrera says. Corporations 1
on the ball already are moving to serve this market. Others 2
will follow. “Hispanics in this country have a purchasing 3
power of $348 billion,” Herrera says. 4
One way to test sales in the Hispanic market is to partner 5
with a Hispanic company. Another way is to repackage your 6
products to appeal to Hispanic tastes. But this takes an 7
investment and careful planning. 8
Savvy business owners wanting to expand sales into the 9
Hispanic market should always rely on a competent transla- 10
tor. One major Los Angeles bank had egg on its face a few 11
years ago when a loan campaign aimed at Spanish-speaking 12
clients went awry. When translated into Spanish, the ad copy 13
said something like: “Remember when your mom used to 14
steal money from you? Think of us as your mom.” 15
A mortified bank representative told the ad agency that the 16
newspaper advertising salesperson had messed up the trans- 17
lation. So never trust your translations to an amateur. Be sure 18
to hire someone familiar with the local dialects and who 19
knows the cultural nuances of the specific Latin community 173 20
you want to reach. Mexicans speak a different type of Spanish 21
and have a far different culture than Salvadoreans or Panama- 22
nians, so make sure you carefully target the market. 23
Many ad agencies now specialize in ethnic marketing, so 24
find a good one in your area and try test-marketing one prod- 25
uct or service. 26
For more information, contact the U.S. Hispanic Cham- 27
ber of Commerce at 202-842-1212. 28
29
30
Become Politically Active 31
G R E AT dal lamagna has sold millions of tweezers. 32
In 1996 he was busy selling himself. 33
105 “Hi, I’m Dal LaMagna, and I’m running for Con- 34
I D E A gress,” LaMagna said, handing out campaign flyers to 35
sunbathers on Tobay Beach on Long Island. “LaMagna— 36
rhymes with lasagna.” 37
LaMagna, a successful entrepreneur, spent about 38
$200,000 of his own money to unsuccessfully run against 39
1 Rep. Peter King (R-NY). King represents the affluent 3rd Dis-
2 trict, which includes Nassau County.
3 “Tweezerman,” as LaMagna is known, said he decided to
4 run for office when the federal government shut down dur-
5 ing 1995’s acrimonious budget debate. “I was outraged,” he
6 said. “Hey, you’re running the largest business in the world.

7 You don’t shut it down when you’re trying to figure out your
8 budget. Period.”
9 The man his wife Marissa describes as “the Italian Woody
10 Allen” ran on a simple platform: He wants to protect the
11 environment, create jobs, and keep kids off the streets. He’s
12 personally against abortion but believes in giving women the
13 right to choose what’s right for their families. “I care about
14 humanity, I care about social causes, and I care about giving
15 back,” he said.
16 Looking back, LaMagna said running for public office rep-
17 resents the American Dream. His grandfather emigrated
18 from Italy and shined shoes for a living. His father worked
19 as a longshoreman and fireman to support his wife and five
20 174 children. He never got to Washington, but he doesn’t regret
21 his attempt. In fact, he might try to run again.
22 Persistence is what eventually propelled his business to

23 success. The company he founded twenty years ago with
24 $500 worth of tweezers has been growing at a rate of 30 per-
25 cent a year.
26 Although LaMagna has an MBA from Harvard University,
27 he’s been involved in a string of entrepreneurial mishaps. In
28 1969, when teenagers were into free love and rock concerts,
29 he tried turning drive-in movie theaters into discotheques—
30 a major flop. Other ill-fated ventures included selling lasagna
31 pans and producing a coming-of-age movie that tanked.
32 In 1982, discouraged and nearly broke, he moved back
33 home and took a $6-an-hour job at an electronics firm. It
34 was there he first saw needlepoint tweezers used to pick up
35 tiny electronic parts.
36 He remembered how difficult it was to remove a splinter
37 he got when sunbathing nude on a roof. So he bought a few
38 industrial tweezers, repackaged them, and tried selling
39 them to lumberyards for splinter removal. A beauty supply
shop owner suggested he find a tweezer that would really 1
pluck eyebrows. 2
Tweezerman tweezers were a big hit, despite selling for 3
$12 when regular tweezers sold for $3. In 1994 Time maga- 4
zine named his tweezers one of the best products of the year, 5
and sales exploded. 6
Today Tweezerman markets sixty grooming products and 7
expects to sell close to two million tweezers. The company 8
offers a lifetime guarantee and repairs about 200 tweezers a 9
week free of charge. 10
11
12
MakeYour 800 Line Ring 13
G R E AT an 800 line is a great way to boost sales, 14
especially if you serve customers in a wide area. If 15
106 you can’t get an 800 number, try 888 or 877, which 16
I D E A are also toll-free for callers. 17
Here are five tips to generate more calls: 18
1 Put your 800 number on every document customers see. 19
A printer can put your number on existing stationery at a frac- 175 20
tion of the cost of reprinting. Or order a brightly colored stick- 21
er or stamp that says, “We’re pleased to announce a new con- 22
venience for customers. Now you can call us toll-free at . . .” 23
Make sure the sticker or stamp goes on all printed materi- 24
als—business cards, brochures, catalogs, fax cover sheets, 25
billing statements, and packing materials. Add your 800 26
number to building or vehicle signs. 27
2 Notify your customers of your 800 number. Call key 28
accounts personally and follow up with a letter and updated 29
Rolodex card. If you time your calls to match your cus- 30
tomers’ purchasing cycle, you also might end up with a 31
reorder. 32
If you have too many customers to call personally, send 33
brightly colored postcards featuring the 800 number. If 34
postage is a concern, include the card in another mailing, such 35
as a monthly statement or newsletter. Add your 800 number 36
to voice mail greetings. The message could say, “Please make a 37
note of our new toll-free 800 number …” Say the number 38
twice slowly so listeners have time to write it down. 39
1 3 Add your 800 number to print, radio, and television ads
2 as soon as possible. Make a list of all the directories you’re
3 in and find out the closing date for next year’s ads. Then
4 have your yellow page ads redesigned to feature your 800
5 number prominently. Do this now so it’s ready when you
6 need it.
7 4 Notify all your employees. They should know who’s autho-
8 rized to use the 800 number and what you want it to accom-
9 plish. Your employees can’t help you if they don’t know the
10 game plan.
11 5 Appoint someone as 800 project manager. Tell them their
12 charter is to make the number start ringing today. Challenge
13 them to be creative but cost-conscious. Consider giving
14 awards or bonuses for increasing 800 calls. Ask for weekly
15 progress reports. Get every employee involved in publicizing
16 the number by sponsoring a contest to see who can come up
17 with the most creative way to use it to get new business.
18 Then award prizes for ideas you use.
19
20 176 Attend Charity Events
21
to Make Contacts
22
23 G R E AT dust off your tuxedo or evening gown—
24 it’s time to socialize with the leaders of your business
25 107 community. One great way to meet the “who’s who”
26 I D E A of your town is to buy a ticket to a local charity event
27 where you can rub shoulders with people you wouldn’t oth-
28 erwise be able to contact. At such events, you can mingle and
29 schmooze your way through the cocktail hour and look for
30 an empty seat at a corporate table if you wait until the last
31 minute to sit down.
32 A friend who was making a transition from the shoe busi-
33 ness to high-end real estate went a step further. She didn’t
34 have the money to buy the $500 or $1,000 tickets to the
35 charity balls she needed to attend, so she volunteered to
36 work at the registration desk. At one gala, she was given the
37 task of pinning carnations on the lapels of all the men who
38 arrived. She’s a relentless flirt and made an impression as
39 she fastened flowers to the jackets of dozens of New York
City’s business elite. She made new contacts and was able to 1
follow up with phone calls a few days later. 2
One of the best ways to find out about charity events is to 3
read the society pages of the local newspaper. The New York 4
Times, for instance, has a section devoted to upcoming 5
events, where they are, and how to buy the tickets. While 6
you may think $1,000 per ticket is expensive, it is much 7
cheaper than the cost of attending an industry trade show in 8
another city. 9
Do your research carefully. You want to attend a benefit 10
that attracts high-level people in your industry. For example, 11
music industry executives may be in attendance at an annual 12
benefit that raises money for music education. If you are try- 13
ing to make connections in that industry, that’s the benefit 14
you want to attend. 15
Since most people leave their business cards home when 16
they put on a tuxedo or formal dress, you will have to depend 17
on your memory to make follow-up calls after the event. Be 18
charming and interesting, and if you decide to make a call, 19
do it shortly after you’ve met the person so they don’t have 177 20
time to forget who you are. 21
22
23
PublicizeYour Food Business 24
G R E AT
the power of the press is greater than 25
ever when it comes to driving sales of offbeat 26
108 specialty foods. Positive publicity sends foodies to 27
I D E A the phones to feed their passion for unique food 28
and condiments. With Americans buying an estimated 29
$400 million worth of specialty foods a year by mail, 30
according to the National Association for the Specialty 31
Food Trade in New York City, the field is a gold mine for 32
smaller companies. 33
A short blurb by a noted food writer, critic, or author often 34
means the difference between success and failure for a start- 35
up. For example, a mention in Florence Fabricant’s New York 36
Times “Food Notes” column launched Matt and Ted Lee’s 37
boiled-peanuts-by-mail business. 38
“The reason I went for the boiled peanuts was because it 39
1 was a regional specialty,” said Fabricant. “Before the Lee
2 Brothers offered it, boiled peanuts were not available outside
3 a certain region in the South.” Fabricant said she receives
4 about two dozen pitches a week from small, specialty food
5 product makers hoping for her attention.
6 The Lee brothers say they owe their success to journalists

7 like Fabricant. “Publicity is crucial,” said Ted Lee. “We’ve
8 never paid a dime for advertising.”
9 When Ted and Wendy Eidson, founders of Mo Hotta Mo
10 Betta, started their San Luis Obispo, California–based spicy
11 food catalog, they relied on the public library to find the
12 addresses of 200 regional newspapers. They often attach
13 samples of spicy wasabi chips to tempt the palates of the
14 food editors. The Eidsons said 30 to 40 percent of the editors
15 they send information to use it in some way.
16 The free publicity and growing passion for super-hot
17 foods has fueled sales. The company, with sales under $5
18 million, is growing at 200 percent a year, Ted Eidson said.
19 “The catalog business has flattened out at this point,” said
20 178 Eidson. “Now we’re diversifying. Last year we started making
21 our own sauces and tamale kits.”
22 Twenty years ago, an article in Delta Airline’s Sky maga-

23 zine drew customers from all over the country to Nathalie
24 Dupree’s tiny Georgia restaurant. Dupree, an Atlanta-based
25 author and cooking expert, has produced more than 300
26 shows for PBS and The Food Network. “When an article is
27 written about me, I may get calls for up to five years after-
28 wards,” said Dupree, author of Nathalie Dupree Cooks Great
29 Meals for Busy Days (Crown; 2001) and many other books.
30 Dupree, Fabricant, and other food writers and experts
31 realize the impact their coverage can have on a small busi-
32 ness. “I don’t mention anyone unless I think they can handle
33 the business,” Dupree said.
34 Although success in the specialty food business is largely
35 publicity driven, proper marketing etiquette can be tricky.
36 For instance, don’t call to follow up after you send a press
37 release to a food editor. “Assume it got here—and don’t
38 pester the editor,” said Patricia Mack, food editor for The
39 Record in Hackensack, New Jersey. Mack said every week her
staff receives hundreds of press releases and about half end 1
up in the trash. 2
The National Association for the Specialty Food Trade 3
(NASFT) is a membership organization for the industry. 4
They publish a magazine and a mail-order directory and 5
sponsor fancy food shows twice a year. 6
For information, write to NASFT, 120 Wall St., New York, 7
NY 10005 (www.nasft.com). 8
9
Become a Government 10
11
Contractor 12
G R E AT the federal government is the world’s largest 13
purchaser of goods and services, so why not get in 14
109 line? The Federal Marketplace should be your first 15
I D E A stop. To get started, check out www.fedmarket.com. 16
The site is rich with information on how to market and sell 17
products and services to Uncle Sam. The SBA’s Office of 18
Government Contracting and Minority Enterprise Develop- 19
ment (OGC/MED) are also there to help. 179 20
For example, the OGC/MED administers the Prime Con- 21
tracting Program, which initiates set-asides for government 22
contracts, so small companies get their share of the work. It 23
also helps small companies work their way through the pro- 24
curement process. 25
The Subcontracting Assistance Program ensures that 26
small businesses receive the information needed on avail- 27
able work. The recently revised 8(a) Program helps minority- 28
owned small businesses receive federal contracts on a sole- 29
source or limited competition basis. 30
The Procurement Automated Service System (PASS) is a 31
database with more than 200,000 small companies interest- 32
ed in doing business with the government. PASS provides 33
companies with a quick way to find small suppliers. 34
Most government agencies have a special department 35
dedicated to helping you do business with them. Ask for 36
the Office of Small and Disadvantaged Business at any fed- 37
eral agency. 38
The Business Service Centers (BSCs) are located in twelve 39
1 major cities. These centers offer counseling, bid lists from
2 vendors, and information of all types. Check with your local
3 SBA office for locations.
4 The Department of Defense, a big spender, operates Pro-
5 curement Technical Assistance Centers that provide infor-
6 mation to businesses interested in selling goods and services

7 to the government. The Air Force also has a special small
8 business program. It conducts two-day seminars around the
9 country to explain the process through the Air Force Busi-
10 ness Education Team.
11 Susan Gilbert, owner of Interactive Elements, a New York
12 City–based mass-transit consulting firm, landed her first
13 government contract after going through procurement train-
14 ing. She later won the Women’s Business Enterprise Award
15 from the Federal Transit Administrator. She continues to
16 work with state, federal, and local transit agencies.
17 The DOD’s Mentor-Protégé Program has matched more
18 than 200 small companies with successful government con-
19 tractors. The experienced company teaches the ropes to the
20 180 newcomers.
21 The SBA also has special programs for veterans, includ-
22 ing the Transition Assistance Program (TAP), which helps

23 military personnel start small businesses. The Veteran’s
24 Entrepreneurial Training Program is one that provides train-
25 ing to vets.
26 These are just some of the programs established to hook
27 up small business with government contracts: Do some
28 research and see which might apply to your company.
29
30
31
Consider Multilevel Marketing
32 G R E AT fran lyles-harper was a physicist working
33 on the Space Shuttle’s main engines when she
34 110 attended an in-home art party. “The art really touched
35 I D E A my soul,” said Lyles-Harper. “It wasn’t only beautiful,
36 but it was quality art at affordable prices.”
37 Lyles-Harper didn’t buy anything that night, but agreed to
38 host a showing in her home a few weeks later. Impressed by
39 everyone’s response to the art, she signed up with Personal
Preference Inc. (PPI) to sell art on a part-time basis. 1
For a few years, she kept her day job, selling lithographs 2
and paintings on the side. When she earned $65,000 one 3
year, she decided it was time to sign on full time. 4
Janet Madori, founder of PPI, has created a very fair and 5
lucrative business concept, which you could apply to other 6
kinds of products with the right price points and wide con- 7
sumer appeal. Instead of charging thousands of dollars 8
upfront for the business opportunity, she sets people up in 9
business for under $300 by giving them about $3,000 worth 10
of art and providing extensive training. Art consultants earn 11
a minimum commission of 20 percent, plus monthly bonus- 12
es. If you sign up at least two new consultants, your commis- 13
sion and bonuses can reach 34 percent, she said. 14
PPI, based in a 52,000-square-foot headquarters building 15
in Bolingbrook, Illinois, recently added a 35,000-square-foot 16
extension to keep up with the growth. The 100-employee 17
company sells more than 200,000 pieces a year and generat- 18
ed $22 million in sales in 1997. 19
Madori continues to grow the company through incen- 181 20
tives. For example, she set up a program to reward managers 21
who built $1 million sales divisions. She put 20 percent of 22
her company stock in a trust to give to her top salespeople. 23
“They have ownership and a lifetime override on sales, even 24
after they leave the business.” 25
“About 35 percent of my people are making over 26
$100,000 a year,” she said. “One of my best people was a 27
presser in a dry cleaners. There she made $23,000 a year. 28
Last year, at fifty years old, she made over $118,000, has a 29
new company Cadillac, and bought a new home. To see 30
where she’s come from and where she’s going thrills me. 31
When I heard she used her $20,000 bonus as a down pay- 32
ment on a house, I cried like a baby.” 33
Personal Preference Inc. is located at 800 Remington 34
Blvd., Bolingbrook, IL 60440. Its motto: “A painting is 35
created by the blending of beautiful oils. A company is creat- 36
ed by the blending of beautiful people.” 37
38
39
1
2
Send Pizza to Potential Clients
3 G R E AT everybody loves pizza. it’s not just hot,
4 gooey, and delicious—it’s also a business opportuni-
5 111 ty. You probably never thought of pizza as a powerful
6 I D E A business tool, but it is.

7 Scott Jackson, founder of the Jackson Design Group in
8 Orlando, Florida, has used pizza as an ice-breaker for
9 many years. He sends potential clients a fresh pizza right
10 before lunchtime. “If you walk into an office with pizza,
11 people are going to smell it and get to the right person, no
12 matter what.”
13 Jackson’s pizzas are delivered in a custom-printed box
14 with one slice missing. In the open space it says: “For a
15 larger slice of your market, call Jackson Design Group.”
16 Recipients also find short client-success stories printed
17 under the other slices. Jackson’s printer now provides the
18 boxes at no charge because he’s getting so much new busi-
19 ness from Jackson. The best news: Jackson said that of the
20 182 companies he’s sent pizza to, about half have signed up with
21 his agency.
22 A couple of other food ideas: Try sending a pair of choco-

23 late shoes or cowboy boots in a box with a note: “I’m trying
24 to get my foot in the door.”
25 A meeting planner from Orlando once sent out the invita-
26 tion to a baseball-themed fund-raiser on Cracker Jack boxes.
27 It cost 55 cents to mail each box, and they had record-break-
28 ing attendance.
29
30 Think BIG—It Doesn’t Cost Any
31
32
More than Thinking Small
33 G R E AT i learned an important lesson from all the
34 entrepreneurs I profiled for my “Succeeding in
35 112 Small Business” column before starting my own
36 I D E A multimedia communications business: It doesn’t cost
37 any more to think big than it does to think small. When I was
38 working in the garage behind my Sun Valley, California,
39 home I wrote “THINK BIG” in four-inch high, black vinyl
stick-on letters on the battered file cabinet beside my desk. 1
Visitors would always laugh at that message, but it really 2
inspired me to follow my dreams and create a successful 3
media company. 4
No matter what kind of business you have, you should 5
always strive for the biggest accounts, the biggest deals, or 6
the biggest network of dealers. Thinking big motivates you 7
to do the best work you can and to operate at a higher level 8
professionally and personally. So much depends on your 9
mental attitude, and if you feel and act confident, you will be 10
more successful in life and in business. 11
I started thinking big from the moment I quit my job to 12
start my own company, and it has led me in some astonishing 13
directions. Thinking that I could provide custom small busi- 14
ness–oriented content and event production services to the 15
biggest companies in the world was pretty audacious. But 16
after creating and syndicating my own small business radio 17
show, we landed a major contract with American Express to 18
develop a small business resource center. Soon after that, we 19
were providing high-level consulting services to Wells Fargo 183 20
Bank and coproducing a national book tour to promote the 21
first edition of this book with three corporate sponsors. 22
Thinking big also led me to the creation of Back on Track 23
America™, a national coalition to revive the small business 24
economy. The morning of September 11, 2001, my friend, 25
Vanessa, had taken the train from Manhattan to Pelham to 26
meet me for a quick breakfast before flying home to Cincin- 27
nati. When we stopped in the taxi dispatcher’s office to ask if 28
we could leave her luggage there, we found out that the air- 29
ports were closed because planes had crashed into the World 30
Trade Center and the Pentagon. Vanessa came home with 31
me, and when she had no luck finding a car to rent, I sug- 32
gested she call Amtrak. “The trains will start running again 33
much sooner than the airports will reopen,” I predicted. 34
Vanessa was able to get the last seat on a train leaving 35
New York for Boston the next day. From Boston she would 36
make her way West, eventually returning to Cincinnati (by 37
car from Dayton). That night, I did my biggest thinking ever: 38
If I could get Amtrak to give me a train (or at least free tick- 39
1 ets), I could take a faculty of small business experts around
2 the country to shore up the morale of small business owners
3 already suffering from the recession before the September 11
4 terrorist attacks.
5 The “back on track” phrase came to me that night, but it
6 was our CPA, John D’Aquila, who suggested adding “Ameri-

7 ca.” With the perfect name and a simple premise, I went into
8 a manic phase that lasted three weeks.
9 I called every person I knew and asked them to join what
10 soon became a national coalition of big and small compa-
11 nies, business associations, and business experts willing to
12 volunteer their time and brainpower to get the nation’s
13 entrepreneurs back on track. I convinced speakers to talk for
14 free and producers to cut their day rates. With the help of my
15 friend and colleague, Linda Denny, we obtained free hotel
16 rooms from Wyndham Hotels and VIP receptions across the
17 country from Club Corp., which owns clubs and resorts
18 around the United States.
19 America Online, our biggest client, provided an enor-
20 184 mous amount of online marketing and public relations
21 support for six stops on the tour. They also paid for a press
22 party in Union Station in Washington, D.C. Fleet Bank

23 rented an off-Broadway theatre for the first event in New
24 York City and the New Jersey Performing Arts Center in
25 Newark, New Jersey.
26 Although every event included workshops, a reception,
27 and a community Town Hall–style meeting, each was differ-
28 ent, crafted to reflect the specific needs of the community.
29 SBTV produced the tour at cost, paying the operating
30 expenses with modest contributions from our biggest corpo-
31 rate clients and by selling memberships and newsletter sub-
32 scriptions at Back on Track America™ events.
33 The idea was so big that people understood it right away.
34 When one person said yes, it inspired me to keep asking for
35 bigger and bigger favors. I asked a composer friend to write
36 a song, “Back on Track,” which we recorded in Hollywood
37 and distributed to radio stations. Another friend, who
38 designs high-end custom jewelry, agreed to design a railroad
39 track pin for sponsors and supporters.
If you look at why some entrepreneurs attract money and 1
support while others never get anywhere, it’s because the 2
successful people aren’t afraid to take risks, and their bold 3
thinking attracts others to invest in them. Microsoft founder 4
Bill Gates never graduated from college but managed to 5
start the most successful software company in the world 6
because his big thinking predicted that people would want 7
their own easy-to-operate personal computers. Michael Dell 8
started building made-to-order computers in his dorm room 9
and continues to lead the industry by providing reliable 10
hardware at a fair price. They both had a simple but big idea 11
and never stopped trying to make more money and serve 12
more customers. 13
One of the secrets of thinking big is being able to clearly 14
express and articulate your vision. When Amtrak agreed to 15
provide transportation, for example, everyone got the mes- 16
sage that Back on Track America™ was going to be a very 17
big effort to revive the entrepreneurial spirit across America. 18
When America Online, part of the biggest media company 19
on the planet, said yes to promoting the initiative to its mem- 185 20
21
How to think big 22
23
1 Once you’ve perfected your idea on a small scale, figure 24
out how to grow it to the next level quickly before some- 25
one with a similar idea does. 26
2 Engage other big thinkers to help you. Ask successful 27
industry leaders to serve on your advisory board or act as 28
informal mentors. 29
3 Enroll your employees in the concept by sharing your 30
vision frequently. Ask them how they would improve the 31
idea or concept. 32
4 Pitch your story to the media. Once someone reports on 33
your idea, it’s much easier to attract new investors and 34
supporters. 35
5 Be open to evaluating what is working and what isn’t. 36
Don’t be afraid to regroup and change direction if 37
necessary. 38
39
1 bers, other companies raced to get on board. With such solid
2 support, Back on Track America™ reached thousands of vet-
3 eran and novice business owners across the country with our
4 message: “Bringing Spirit, Strength, and Prosperity Back to
5 America’s Entrepreneurs.”
6 So, don’t be afraid to think big even if you’re small. You

7 have nothing to lose and everything to gain.
8
9
10
Get Certified as a Minority Supplier
11 G R E AT
marguerite thompson browne, director of
12 special projects for San Francisco–based Washington
13 113 Sportswear Inc., was among the 4,000 people attend-
14 I D E A ing the National Minority Supplier Development
15 Council’s (NMSDC) twenty-fifth annual conference in New
16 York City. “This conference gives you access,” said Thomp-
17 son Browne, whose sportswear company is a certified minor-
18 ity-owned business. Although its products have to stand on
19 their own merit, being certified has opened doors for the
20 186 apparel firm, which has 140 employees and annual sales of
21 about $5 million.
22 During the busy trade show, Thompson Browne made a

23 promising contact with members of the Pequot Indian tribe,
24 which owns the Foxwoods Casino in Connecticut. Thomp-
25 son Browne’s company, which already makes clothes for
26 Sears and Target, is leveraging its minority status to close
27 more deals. She is now hoping to sell a new line of casual
28 clothing to the Pequots.
29 In 1996, minority-owned businesses like Washington
30 Sportswear sold about $30 billion worth of goods and ser-
31 vices to major corporations, according to the Manhattan-
32 based NMSDC. That $30 billion represents about 4 percent
33 of total corporate purchases. The national council serves as a
34 matchmaker—working closely with forty-three regional sup-
35 plier councils to match up 15,000 certified minority business
36 owners with 3,500 corporations.
37 There are local, state, and federal programs that certify
38 minority-owned businesses. A good place to start collecting
39 information is by writing to the NMSDC.
Although the NMSDC said that making personal contacts 1
is critical to landing a contract with a big firm, most big U.S. 2
companies are actively seeking business with minority firms 3
in order to meet various government and corporate goals. 4
They also see the economic advantage of catering to minority 5
consumers. 6
“The buying power of minority groups is $900 billion a 7
year, and that is a huge opportunity we have to pay attention 8
to,” said John Edwardson, former president and chief execu- 9
tive officer of United Airlines. Edwardson said he encour- 10
ages all United suppliers to seek out business with minority- 11
owned firms whenever possible. 12
Small minority-owned companies also provide a variety of 13
new products to large companies. For example, H.K. Enter- 14
prises, a small New Jersey firm, developed “Undeniable,” one 15
of Avon’s best-selling fragrances. “We see minority business 16
development today as an investment in our own future,” said 17
James Preston, former chairman of Avon Products. He said 18
Avon contracts with 400 minority-owned suppliers, account- 19
ing for 12 percent of the cosmetic company’s annual purchas- 187 20
es. The 12 percent is about three times the national average 21
for corporate purchases from minority suppliers. 22
One reason Avon is so committed to minority-owned 23
firms is because Avon products, sold by independent repre- 24
sentatives, are extremely popular among women of color and 25
their families. Preston said his minority suppliers also pro- 26
vide Avon with insight into the marketplace. 27
Dealing with minority-owned companies makes good eco- 28
nomic sense for any company. Census data indicates that by 29
the year 2050 two of every five Americans will be of minority 30
descent. 31
The U.S. Small Business Administration and the Com- 32
merce Department’s Minority Business Development 33
Agency have programs for minority business owners. Minor- 34
ity Enterprise Development Week is celebrated in November 35
every year. 36
For more information, contact the NMSDC at 15 W. 39th 37
St., 9th floor, New York, NY 10018. You can also try the SBA 38
and your local Commerce Department office. 39
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C H A P T E R 4
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Developing 14
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Launching 21
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Products
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1
8
T he american dream of becoming wildly
successful with a new product or service turns into a
nightmare for far too many entrepreneurs—not
because their idea is bad, but because they lack a
coherent development plan.
Too many business owners consider the launch of
a product an event rather than a long, carefully
orchestrated process. Saving or borrowing enough
9 money to design and manufacture a prototype of your
10 product is just a baby step along the way to success.
11 Thousands of entrepreneurs working in back
12 bedrooms, garages, incubators, and industrial parks
13 get through the exciting initial stages of product
14 development, but few manage to get any further
15 before running out of money. Most end up wasting
16 thousands of dollars on products that really should
17 have made it, but didn’t, for a variety of reasons.
18 Based on interviews with hundreds of entrepre-
neurs, I see that many make the same fatal 1
mistake—they fail to take the time to determine 2
whether or not a market truly exists for their product. 3
In the euphoria of the moment, entrepreneurs are 4
blinded to the reality that many others are launching 5

191
similar products at the same time. They fail to check 6
out the competition and make sure a niche exists. 7
Luck and timing also play a huge role in the 8
success of a new product. Who could have predicted 9
that Beanie Babies would become a fad or that kids 10
would spend millions on electronic “pets” from 11
Japan? 12
You might be reading this and thinking that 13
only big companies with deep pockets can launch 14
products, but in fact many more products are 15
dreamed up by small, innovative companies. Think 16
about Netscape and the small company that per- 17
fected Java software. Think about Napster, a tiny 18

1 company that revolutionized how people download music
2 from the Internet.
3 In this chapter, you’ll meet a young composer who invent-
4 ed Magnetic Poetry for his own refrigerator, and
5 Frieda Caplan, a Los Angeles woman who brought kiwis to
6 American dinner tables by pioneering the exotic-produce

7 industry. They both started with nothing and ended up with
8 millions.
9 Sometimes, to succeed, it takes a mixture of novel prod-
10 ucts and great marketing skills. Check out how Avi Sivan
11 made millions selling the same products through many dif-
12 ferent channels in Great Idea 122.
13 The desire to make millions with a new idea keeps the
14 entrepreneurial spirit alive. Through the years, I’ve inter-
15 viewed an incredible array of people trying to sell everything
16 from paper toilet-seat covers to kids’ soap that smells like
17 bubble gum. With thousands of zany ideas floating around
18 out there, it’s no wonder the U.S. Patent and Trademark
19 Office is overburdened with applications, and small inven-
20 192 tors are lining up to audition for a time slot on QVC and the
21 Home Shopping Channel.
DEVELOPING AND LAUNCHING PRODUCTS
22 In this chapter, you’ll also learn how to create a working

23 model, license your product, and how two North Dakota
24 women who loved an obscure form of embroidery turned
25 their hobby into a thriving business. You’ll meet two women
26 from New Jersey who fell in love with a special type of Italian
27 pottery and ended up importing it for use in gardens and
28 greenhouses across the country. This batch of great ideas will
29 help you develop a realistic strategy to get your product in
30 shape, out the door, and onto store shelves.
31
32
33
Create a Fad
34 G R E AT people used to stand in front of dave kapell’s
35 refrigerator for hours, even when they weren’t hun-
36 114 gry. They were mesmerized by his collection of hand-
37 I D E A made magnetized words—-an idea that evolved into a
38 major 1990s fad: the Magnetic Poetry kit.
39 Kapell, a songwriter and cab driver, made the first kit as a
way to combat writer’s block. He started giving them away to 1
friends. “Instead of bringing wine to a party, I’d bring the 2
magnetic poetry kits,” said Kapell. 3
He began selling kits at craft fairs and to local retailers. 4
When sales took off, he had thirty people making kits in 5
their homes. He worked ninety hours a week getting the 6
company off the ground. 7
So far he’s sold more than two million kits. Kapell said he 8
knew he had hit the big time when Magnetic Poetry 9
appeared on Jerry Seinfeld’s TV apartment refrigerator. 10
Seinfeld is the perfect customer for the $20 kit. Kapell 11
said his target market is educated, affluent gift-buyers. He 12
sells his kits in museum gift shops, bookstores, and catalogs. 13
Kapell said he would discourage entrepreneurs from try- 14
ing too hard to protect their products. His kits aren’t patent- 15
ed, but they are trademarked and copyrighted. 16
“Little guys should get out there quick and sell the hell out 17
of it,” said Kapell. “Don’t worry about legal protection—peo- 18
ple are paralyzed by it. It costs a lot of bucks to patent some- 19
thing, and it’s not important.” He said rushing your product 193 20
to market is more important than getting bogged down in 21
legalities. “The big boys aren’t going to pay attention or try to 22
compete until you sell millions.” 23
The company also makes other magnetic poetry items, 24
including lunch boxes and coffee mugs with coffee- 25
related magnetic words. Check out their website at 26
www.magneticpoetry.com. 27
28
29
Import Something New and Different 30
G R E AT a new industry was spawned forty years 31
ago by a homely fruit then known as the Chinese 32
115 gooseberry. The palm-sized brown fuzzballs, now 33
I D E A called “kiwis,” were the basis for Frieda Caplan’s wild- 34
ly successful exotic-produce business. 35
Before Frieda Caplan began importing fruit and vegeta- 36
bles from around the world, apples, bananas, and oranges 37
were about the only fruits Americans ate. You can now thank 38
Caplan for alfalfa sprouts, macadamia nuts, sugar snap peas, 39
1 spaghetti squash, and dried blueberries. Frieda’s Inc. also
2 popularized the succulent, oversized mushrooms called por-
3 tobellos that sell for up to $7.50 a pound.
4 Frieda’s Inc. brokers about 450 fruits and vegetables from
5 growers around the world. Their number-one seller is jica-
6 ma, a crunchy root that can be eaten raw with a splash of

7 lime juice.
8 Caplan began introducing Americans to tastebud-tingling
9 delicacies in 1962. She started the company with a $10,000
10 bank loan—an enormous amount of money at that time.
11 The vegetable growers welcomed her willingness to distrib-
12 ute their novel produce and helped finance some of her ini-
13 tial start-up costs.
14 A few years ago, daughters Karen Caplan and Jackie
15 Caplan-Wiggins joined their mother’s business, which has
16 about forty employees. Karen, who joined the family firm in
17 1986, said she pushed to expand the business. Today about
18 30 percent of their produce is imported, with the rest grown
19 around the United States.
20 194 Importing produce doesn’t seem like such a revolutionary
21 concept, but twenty years ago, most grocery store produce
22 departments featured fewer than 100 items. Today the aver-

23 age market stocks about 300—thanks in part to Frieda
24 Caplan’s vision.
25 In addition to offering offbeat fruits and vegetables, Frie-
26 da’s Inc. has set itself apart from the competition through its
27 use of a distinctive signature purple color in packaging and
28 advertising.
29 “When mom started, she needed a sign for the store,”
30 recalled Karen Caplan. “She had to have it up over the week-
31 end. The guy who painted the sign only had one color in his
32 truck—lavender. Now it’s our trademarked purple. It
33 becomes like subliminal advertising. When I show up
34 places, people say things like, ‘I really expected to see you in
35 a purple suit.’”
36 Caplan’s employees sign their letters with purple ink. The
37 produce boxes are purple, too. “A unique design is OK,” said
38 Caplan. “But color is especially effective.”
39 Caplan said when she learned to relinquish control and
hire more salespeople, sales quickly increased. The company 1
has also moved into the modern age with a website that 2
receives hundred of hits a day. Visit it at www.friedas.com. 3
4
TurnYour Hobby into 5
6
a Successful Business 7
G R E AT turning your passion into profits is easy 8
when you figure out a way to transform your inter- 9
116 ests into a business venture. The secret of success is 10
I D E A finding others who share your pastime and parlay- 11
ing their need for supplies into a money-making concept. 12
For the past twenty-five years, Roz Watnemo and Sue 13
Meier have leveraged their passion for an obscure form of 14
Norwegian embroidery into a successful retail and mail- 15
order business. In fact, Nordic Needle, based in Fargo, North 16
Dakota, is one of the state’s most successful small exporters, 17
honored by state officials and the U.S. Small Business 18
Administration. 19
College friends Roz and Sue were unlikely entrepreneurs. 195 20
Looking for something to do, they signed up for a class in 21
Hardanger embroidery, a traditional form of white thread- 22
on-white fabric stitchery used to decorate tablecloths and 23
aprons. Embroidery is especially popular in the Plains states, 24
where winters are long and cold, and people are looking for 25
something to do to pass the time productively. 26
Tired of driving to Minnesota or sending away to Norway 27
for sewing supplies, the partners decided to sell a few 28
Hardanger necessities. They opened a 400-square-foot shop 29
in downtown Fargo, thinking they’d sell a few yards of fabric 30
to friends. 31
When they were literally bursting at the seams, about thir- 32
teen years later, they built a 9,000-square-foot building in a 33
suburban shopping plaza. The bright, cozy store is a stitch- 34
er’s paradise. Nearly every inch of floor and wall space is 35
filled with yards of fabric, miles of thread, patterns, sam- 36
plers, and sewing kits. Multicolored threads from around the 37
world create a fantasy of rainbows. 38
Their passion for stitchery is shared by many. Nordic 39
1 Needle boasts 1,500 wholesale customers in eighteen coun-
2 tries. About 53,000 retail customers buy supplies, mostly
3 via mail order. About 45 percent of Nordic Needle’s sales
4 are generated by their catalogs, 35 percent from wholesale
5 outlets, and 20 percent from their one bustling retail store
6 in Fargo.
7 Meier and Watnemo, who started their business before
8 they started their families, now have five children between
9 them. They divide the work and profits equally. Their hus-
10 bands also help out when they can.
11 Meier, the more outgoing partner, focuses on the whole-
12 sale, marketing, and advertising side of the business. She
13 designed their website and encourages online sales promo-
14 tions. Watnemo, the quiet partner, designs all the new pat-
15 terns and keeps close track of the retail operation. “I know a
16 lot of partnerships don’t go well, but Roz and I are very dif-
17 ferent from each other, and we complement each other,”
18 said Meier.
19 Watnemo, the Hardanger expert, produces about a
20 196 dozen new pattern books each year. She designs by hand,
21 but relies on a software program to create the actual pat-
22 tern graphs.
23 Here are some tips for turning your hobby into a small
24 business:
25 ◆ Find out if others who share your passion are looking for
26 equipment or supplies in your town.
27 ◆ Attend a hobby or craft trade show to check out the trends
28 and competition.
29 ◆ Subscribe to all the magazines and newsletters that cover
30 your hobby.
31 ◆ Find out if their subscription list is offered for “rent” and do
32 a test mailing.
33 ◆ Start small. Offer a few products to test the market.
34 ◆ Check with your accountant about the IRS rules on tax
35 deductions for hobbies versus businesses.
36
37
38
39
1
Borrow Funds from Your Family 2
G R E AT like most good parents, gene and sandee 3
Nabat did everything they could to give their three 4
117 kids a comfortable upbringing. They lived in West 5
I D E A Bloomfield, a suburb of Detroit, and sent the children 6
to good schools. But the Nabats never planned to invest 7
$500,000 in their only son’s invention, a small black plastic 8
gizmo called the Findit™. 9
As a teenager Craig Nabat washed, waxed, and detailed 10
cars and sold T-shirts to earn extra cash. In college he sold 11
pepper spray to sorority girls. Reading Napoleon Hill’s 12
classic book Think and Grow Rich (Fawcett Books reissue 13
edition; 1990) prompted Nabat to dream up something he 14
could sell to the masses via infomercials. He wasn’t sure 15
what “it” was until he came home late one night and 16
couldn’t find his TV remote control. That’s when the 17
brainstorm hit. He’d invent something to help people find 18
lost items. Designed to help absent-minded folks locate 19
small things like remote control units and car keys, the 197 20
Findit emits a high-pitched beep when you clap your 21
hands three times. 22
With his own family’s money on the line, Nabat works 23
seven days a week and has put his romance on hold to devote 24
all his time to his invention. When dozens of electronic engi- 25
neers refused to meet with him, he flew out to Northern Cal- 26
ifornia and finally got an appointment. 27
When his parents balked at contributing any more capi- 28
tal, he hired a consultant to draft a formal business and 29
financial plan, which indicated the Findit could actually 30
make money—if it was a hit. “He keeps saying to me, ‘Dad, 31
we’re going to be rich!’” said Gene. “He’s convinced he’ll 32
sell millions.” 33
Gene and Sandee Nabat admit the past six years have 34
been very tough. Gene, an accountant by training, manages 35
the money for a property management firm. He’s planning 36
to retire soon and hopes to have his money back. What was 37
initially going to be the $35,000 they’d set aside for Craig 38
to attend graduate school, somehow ballooned into half a 39
1
2
3
How to borrow money from your
4 family
5
6 1 Establish the amount of the loan and terms of repayment

7 in writing and sign a promissory note.
8 2 Treat the family loan as professionally as you would a
9 bank loan. Make payments in full and on time.
10 3 Keep your family informed with regular written reports
11 outlining what’s going on at the business, but don’t dis-
12 cuss business matters at family social events.
13 4 If things are going badly and you can’t make a payment,
14 tell your family immediately. Try to get an extension on
15 the term of the loan.
16 5 If you don’t think you will be able to repay the funds bor-
17 rowed, let your family know right away. They may be able
18 to write off the money they gave you as a business loss.
19 6 Don’t borrow money from any family member who can’t
20 198 afford to lose it.
21
22 million dollars. Craig’s sister, Jacqueline, also invested

23 money she hopes to see again. So far, no family member
24 has been repaid.
25 The current Findit retails for $20 to $25, is about one inch
26 wide and two inches long. For more information visit
27 www.ambitiousideas.com or call 800-531-4945.
28
29
30
Become an Exclusive Importer
31 G R E AT
sometimes being the first to introduce
32 a product to the United States is the best way to
33 118 establish a successful small business. This was
34 I D E A the case for Mara Seibert and Lenore Rice, two
35 former high-powered Wall Street players who traded in their
36 briefcases for a new life that includes a New Jersey ware-
37 house full of handmade Italian terra-cotta pottery.
38 Mara Seibert was on the fast track as a mergers and
39 acquisitions specialist at Chase Manhattan Bank, structur-
ing big leveraged buyouts and hostile corporate takeovers 1
during the 1980s. 2
Tax attorney Lenore Rice was also on Wall Street during the 3
takeover mania. She was on a partnership track at Shearman 4
& Stirling, a tony law firm. But tired of the rat race and lucky 5
enough to have wealthy husbands, Seibert and Rice decided to 6
quit their jobs to stay home with their young children. 7
Seibert spent her free time collecting ceramic art and 8
remodeling her home and garden. Rice studied Italian. They 9
became close friends after Rice rented an Italian villa in Tus- 10
cany and offered the Seiberts a chance to share the house 11
and expenses with them. 12
Bored one day when their husbands left to play tennis, the 13
two women wandered into the tiny village of Impruneta to 14
look around. They were immediately dazzled by the town’s 15
deep orangey-pink and white-tinged pottery. They began 16
selecting pots to buy for their yards and dragged their hus- 17
bands into the village to look at the merchandise. 18
When their husbands agreed the pots were beautiful and 19
durable, they called customs brokers to figure out whether it 199 20
was feasible to buy a pallet full of pots. Thinking if they 21
couldn’t sell them, they would keep them, they spent 22
$3,000 on pots and another $1,000 to ship them by boat to 23
New Jersey. 24
They began showing the pots and planters to landscape 25
designers and upscale nurseries. It was an immediate hit, and 26
the pottery, which retails from $35 for a small pot to $1,200 27
for a tree-sized planter, spawned a very successful business. 28
They invested $5,000 on a high-quality brochure and sold 29
$20,000 their first year in business. Sales reached close to a 30
million three years later. 31
That fateful vacation in the tiny village of Impruneta, 32
Italy, about two hours south of Florence, inspired Seibert 33
and Rice to open a company bearing their names. One big 34
secret of their success was signing exclusive import agree- 35
ments with four families, giving them the sole U.S. distrib- 36
utorship for Impruneta pottery. 37
They are so worried about others wooing their suppliers, 38
they won’t reveal the last names of their potters. They visit 39
1
2
3
Tips for becoming an exclusive
4 importer
5
6 AN EXCLUSIVE IMPORTING relationship is one based in

7 trust. You have to trust the people you are working with to
8 sell only to your company, and they have to trust you to
9 make every effort to sell their products in the United States,
10 or wherever you agree to market their products. To help
11 establish a trustworthy arrangement:
12 ◆ Make sure they don’t have any existing relationships with
13 other companies.
14 ◆ Hire an interpreter to help you negotiate the agreement.
15 Work with a local attorney to draft an agreement in their
16 language and make sure you understand the terms and
17 aren’t breaking any local or national laws.
18 ◆ Start with a short-term deal to see if things are working
19 out for both parties.
20 200 ◆ Find a reputable customs broker to handle the shipment
21 of goods from the manufacturer to your warehouse.
22 ◆ Set up a system to account for all sales and shipping

23 information and communicate with your supplier on a
24 regular basis.
25
26 the artists once or twice a year to place more orders and
27 monitor quality.
28 The business, which started with about $50,000 in inven-
29 tory, began in the upstairs bedroom of Seibert’s home. They
30 now store and ship the pottery from a warehouse in Short
31 Hills, New Jersey, minimizing breakage with a special foam-
32 making system that protects the pottery. Although you can
33 buy terra-cotta garden pots from many sources, the company
34 still appears to have a lock on the unique pottery made by
35 Impruneta’s craftsmen.
36 Floral and interior designers have contacted the company
37 to have American-style pots made in Italy by Seibert and
38 Rice’s artisans. Visit them at www.seibert-rice.com or call
39 908-467-8366.
1
Be a Location Contrarian 2
G R E AT
most young, cocky restauranteurs would 3
rather die than open their cool restaurant in a subur- 4
119 ban shopping mall. But Gary Leff, founder of Stir 5
I D E A Crazy Enterprises, took a different spin. He headed 6
for the suburbs, and it paid off. 7
“The first inclination is to open up in the city, and one of 8
the main reasons is ego,” said Leff. “The city is sexy, you can 9
see your friends, and the ‘big boys’ are in the city.” 10
But in downtown Chicago, restaurant owners face fierce 11
competition, high rent, and safety concerns. “It’s also hard to 12
get above the ‘noise’ in the city,” said Leff, who worked as a 13
management consultant for five years before writing a busi- 14
ness plan and raising about $5 million from investors to 15
open his restaurant chain. His primary investor is a partner 16
in JMB Realty, a major Chicago-based real estate firm. 17
The first three Stir Crazy restaurants are located in 18
upscale shopping malls. Each one cost about $1.3 million to 19
open, and they made money from the start. The first two 201 20
units generated $5.5 million in revenues the first year. Know- 21
ing that many new restaurants fail, Leff spent years doing 22
market research before launching his venture. 23
“I felt there was a huge gap in the marketplace to do 24
something fresh and fun with Asian food,” said Leff. Stir 25
Crazy isn’t cheap; lunch averages $9 to $10 a meal, and din- 26
ner is $14. At Stir Crazy restaurants, patrons select a variety 27
of vegetables, meats, and sauces to be stir-fried while they 28
watch. They can also order dishes from an extensive menu. 29
“Creating your own stir fry is the biggest hit,” said Leff, 30
who works with chefs and food consultants to dream up new 31
dishes. “People love it because it gives them a lot of choice; 32
plus, it’s fresh, healthful, and fun. 33
“Contrary to what people say, the suburbs are sophisti- 34
cated. People who live in the suburbs used to live in the 35
city,” said Leff. “We can also stand out because we are 36
going to compete against the restaurant chains that people 37
are sick of.” 38
Leff is now looking to expand and is searching for loca- 39
1
2
3
What to consider when looking
4 for space
5
6 BASING YOUR BUSINESS in a shopping mall has certain

7 advantages over renting space in a strip mall or in a tradi-
8 tional retail district. A mall has built-in foot traffic, good
9 parking, and a mallwide marketing budget. It’s best to work
10 with an experienced real estate broker who represents many
11 malls in your area. Shop carefully; renting space is costly,
12 and you don’t want to be stuck in the wrong place. When you
13 go out looking, consider the following:
14 ◆ How much space will you need for your sales and storage
15 areas?
16 ◆ What kinds of businesses are operating around you? Are
17 they competitive or complimentary?
18 ◆ How responsive is the management company to tenants?
19 Speak to other small retailers in the mall to find out.
20 202 ◆ What hours is the mall open on weekdays? Weekends?
21 Holidays?
22 ◆ Do you like the feeling of the place? Can you see yourself
23 working here every day? Visit the mall at different times
24 of the day and night to check foot traffic and parking
25 availability.
26 ◆ How many arrests for shoplifting were made in the recent
27 months? Mugging? Vandalism in the parking lot? Check
28 with the local police department to determine the safety
29 and security of the mall.
30 ◆ Will you be paying for utilities? Do you have to pay for all
31 interior improvements? Can you sublease the space to
32 another business? Make sure you understand exactly what
33 your lease includes and sign the shortest lease possible to
34 give yourself an out if your business fails.
35
36 tions in Boston; Washington, D.C.; Denver; and several areas
37 in Florida. “We are looking for the best real estate opportuni-
38 ties,” said Leff, adding that it took a year to find the right site
39 for the first Stir Crazy location.
He doesn’t envision being the next McDonald’s or Red 1
Lobster, but he would like to build forty units in the next five 2
years and 150 in ten. “We will be a major player in Asian 3
casual dining,” he predicts. Leff’s compensation and stake in 4
the company are hinged to performance, so he hopes his 5
predictions are right. 6
7
8
Build a Working Model 9
G R E AT you may have the most brilliant concept 10
in the world, but raising money to manufacture and 11
120 market your baby is almost impossible without a 12
I D E A working model. The problem is that too many entre- 13
preneurs fall prey to invention scam artists who promise to 14
introduce them to manufacturers but often end up stealing 15
their money. 16
Your challenge is finding a reputable product design firm 17
that won’t just perfect your prototype, but will also propose 18
economic options to mass-produce it and bring it to market. 19
“People think that if they have a patent they are nine-tenths 203 20
of the way there,” said Henry Keck, who has been designing 21
products since the 1950s. “When the inventor says it’s 90 22
percent complete, we say there’s 90 percent more to go.” 23
Keck, cofounder of Keck-Craig Inc. in Pasadena, has 24
many well-known product designs to his credit. He’s most 25
famous for designing the sleek metal-and-glass flip-top 26
sugar dispenser sitting on millions of restaurant tables 27
around the world. 28
“We want our products to be well styled and highly mar- 29
ketable,” Keck said. He and his partner, Warren Haussler, 30
rely on a staff of six engineers and model makers to design 31
everything from portable eye washers to battery-operated 32
pesticide sprayers. Their tidy model shop is a tinkerer’s 33
dream, filled with rows of lathes, presses, mills, and saws. 34
The veteran industrial designers say that too many inven- 35
tors make the mistake of patenting their idea before they 36
find out whether or not it can be mass-produced in a cost- 37
effective way. “People suffer by being stuck to their patents,” 38
Keck said. “You can add things to a patent or make changes 39
1 while it’s being processed, but once it’s issued, that’s it.”
2 Although many big companies, such as Robertshaw
3 Controls and Avery-Dennison, turn to Keck-Craig for
4 design help, the firm serves small entrepreneurs as well.
5 Small design projects cost $5,000 to $10,000; big jobs can
6 run into hundreds of thousands of dollars, according to

7 Warren Haussler, president. The fees they charge depend
8 upon the amount of time and work needed to design and
9 build a model or prototype. They work with ten to twenty
10 clients at a time.
11 Jim Harris, who invented the Shrimp Pro shrimp de-
12 veiner, turned to Keck-Craig to bring his dream to reality. His
13 machine, which is sold to restaurants around the world, can
14 devein sixty shrimp a minute. It hit the market in 1995 with
15 the help of a team at Keck-Craig. Because the machine was
16 so well designed and engineered, Harris said he could cut
17 the retail price in half—from about $1,000 to $500.
18 “Engineers are an absolute necessity for an entrepreneur,”
19 said Harris. “I’m chief visionary officer. The best ideas come
20 204 from people who are least capable of bringing them to
21 fruition.”
22 Harris said he worked Keck-Craig’s model makers and

23 engineers for four months, “yelling and screaming” through-
24 out the process. “You have to agree to disagree,” he said.
25 “That’s the most important part of the process. Engineers
26 have a mind-set, and sometimes you have to bring creativity
27 to their mind-set.”
28 Harris advises other entrepreneurs looking for engineers
29 and model makers to ask people with similar but noncom-
30 petitive products where they had theirs designed. “Check out
31 their facilities and the company’s résumé. Look at what
32 they’ve done,” he said.
33 He also cautions inventors to raise money to bring a prod-
34 uct to market. This can come to between $150,000 and
35 $300,000, depending on what you are trying to make, espe-
36 cially if you intend to patent your device as he did.
37 For information on patents, check the U.S. Patent and
38 Trademark Office website: www.uspto.gov.
39
1
Serve the Market’s High and Low Ends 2
G R E AT one of the most successful and creative 3
entrepreneurs I know built an incredibly lucrative 4
121 frozen-pizza manufacturing business by serving all 5
I D E A ends of the pizza market with specific products. 6
A former potato saleswoman, Kathy Taggares cashed-in 7
her condo, jewelry, and insurance policies in 1989 to buy a 8
nearly defunct salad dressing factory from Marriott Corp. 9
She named the company K.T.’s Kitchens. A few years later, 10
she added pizza crust to her product line. She eventually 11
added a full line of frozen-pizza products. In 1997 she made 12
a staggering 125 million pizzas. 13
With 2001 sales around $40 million, she’s definitely 14
doing something right. Taggares has mastered a full spec- 15
trum of approaches to marketing her products. This ability 16
to tailor the same product to suit many customers applies to 17
other businesses. 18
In her case, K.T.’s provides products for the low, middle, 19
and high end of the pizza market by creating lines of differ- 205 20
ent private-label products. The mix is about one-third high, 21
middle, and low price points, Taggares said. 22
If you think “pizza is pizza,” think again. At the low end 23
of the market, she sells pizza in bulk to public schools and 24
the military. K.T.’s also produces a line of mid-priced pizzas 25
for club stores like Sam’s and Costco. At the high end, K.T.’s 26
creates gourmet pizza for Trader Joe’s. 27
Because the ingredients for making any pizza are basic- 28
ally the same, with only the toppings changing, Taggares 29
saves thousands of dollars by buying flour, spices, sauce, and 30
toppings by the container load. The bustling factory, featur- 31
ing one of the largest commercial freezers in southern Cali- 32
fornia, has the largest refrigerated USDA processing room 33
on the West Coast. K.T.’s runs several production lines at 34
once; some workers are making big, low-cost pizzas for Cost- 35
co, while across the way, others are carefully hand-stretching 36
crusts for upscale lines. Taggares continues to focus on mak- 37
ing all kinds of pizza for a variety of customers. 38
“The biggest benefit of a diversified product mix is to 39
1 spread my risk,” said Taggares. “At first, I didn’t have enough
2 money to develop and market my own brand, so I got into
3 food service, selling to schools and doing private-label pack-
4 ing for others.”
5 Maintaining multiple product lines has another strong
6 advantage: “It helps even out the sales year-round,” she

7 explained. “During the summers, school business is down,
8 but club store business is way up.”
9 I asked Taggares if her multiple product approach would
10 work for other entrepreneurs. “It depends on the flexibility
11 of your product line,” she said. “We can serve pretty much
12 every segment of the market with the same type of equip-
13 ment. It wouldn’t work if you needed different equipment to
14 make different products.”
15
16 Launch New Products
17
18
with a Media Blitz
19 G R E AT avi sivan, a former israeli commando and
20 206 stuntman, gives new meaning to the expression
21 122 “media blitz.” Through an aggressive and expensive
22 I D E A combination of magazine advertising, infomercials,

23 and direct mail, Sivan has created a marketing machine for
24 his personal care products sold under the “IGIA” brand. His
25 company is called Tactica International.
26 “His simultaneous multimedia push is unusual,” said
27 John Kogler, founder of Jordan Whitney Inc., which moni-
28 tors the billion-dollar-plus infomercial industry. “I think it’s
29 unique.”
30 Kogler’s Tustin, California–based firm publishes several
31 direct response television reports and newsletters. In the
32 fall of 1997, IGIA’s hair removal system ranked among the
33 top ten on Jordan Whitney’s list of top fifteen direct
34 response ads. IGIA’s blemish remover ranked eleventh on
35 the same list.
36 Kogler said Sivan takes advantage of the fact that the
37 infomercial industry “has become a lot more dependent on
38 retail to sell a variety of consumer products.” Many con-
39 sumers who are reluctant to give their credit card numbers
over the phone may want a product they’ve seen demonstrat- 1
ed on TV, but prefer to buy it in a store. “A product that gets 2
into stores because of TV will sell six to ten times as much in 3
the retail stores as it does on TV,” explained Kogler. 4
Although Tactica International Inc.’s intense marketing 5
campaigns drive sales, they also created customer service 6
problems, including late deliveries and slow refunds. One 7
Christmas, the Manhattan-based company fell way behind 8
on deliveries, prompting consumers to file hundreds of 9
complaints. 10
Sivan said every complaint was taken care of, and every- 11
one whose “Active Air Advanced Beauty System” was delayed 12
was sent $20 worth of face cream free as an apology. “We 13
looked at it as good trouble,” said Sivan. “We were over- 14
whelmed with orders for that product.” 15
Sivan, an intense entrepreneur, said he learned how to 16
market personal care products to women when he worked 17
for EPI Products USA, the ill-fated Santa Monica–based 18
company that grew to $200 million in sales before it filed for 19
bankruptcy in 1990 amid lawsuits and other legal troubles. 207 20
Epilady, a hair removal product invented on a kibbutz in 21
Israel, was infamous for painfully removing hair, but it still 22
sold by the thousands. After working for EPI Products and 23
watching it grow, prosper, and collapse, Sivan said, “I knew 24
there was a huge opportunity because the market for hair 25
removal products is enormous.” 26
Determined to learn from Epilady’s mistakes, Sivan found 27
a British inventor who developed a less painful tweezing 28
method. The IGIA hair removal system sells for $120. “It’s a 29
huge success in the department stores,” said Orly Zoran, 30
who worked with Sivan at EPI Products and handles sales 31
and marketing for IGIA products. 32
Zoran, who specializes in launching and marketing new 33
consumer products, said thousands of beauty magazine ads 34
and huge TV budgets made Sivan’s hair removal product a 35
hit. Sales also skyrocketed after Sivan spent more than $2 36
million on slick ads inserted into a department store’s 37
monthly statements. 38
Privately held Tactica, with sales approaching $100 mil- 39
1 lion, is managed by a small team of people working on the
2 seventy-fourth floor of the Empire State Building. Moving
3 his company into an American landmark is significant for
4 Sivan, who grew up in a poor family in Israel. At nine, he
5 started delivering laundry to earn money to pay for his own
6 bar mitzvah. At fourteen, he ran away from home and joined

7 a kibbutz. He later served in the Israeli Army. In the early
8 1980s, he was the only survivor of a secret mission into
9 Lebanon and spent six months in a hospital recovering from
10 gunshot wounds.
11 “My name and credibility are very important to me,” said
12 Sivan, who works from 6 AM to 11 PM most days. Sivan says
13 his entrepreneurial hero is Richard Branson, founder of Vir-
14 gin Records and Virgin Airlines, who is expanding his
15 empire into banks and soft drinks.
16 “We get fifty to sixty pitches a month,” said Sivan. “We
17 have a focus group to filter the products, but I make the final
18 decisions.”
19 Meanwhile, Sivan has these tips for anyone interested in
20 208 following his aggressive marketing model:
21 ◆ Develop a product that appeals to the masses. It has to be
22 unique and not a “me, too” product.

23 ◆ Find a product with markup of five times the wholesale price.
24 If it costs you $20, you want to sell it for $100.
25 ◆ Register copyrights and trademark your product to protect it
26 from knock-offs.
27 ◆ Encourage inventors to present you with new ideas.
28
29
30
Do a Deal with a Big Company
31 G R E AT for a small business owner, doing a deal
32 with a giant corporation is thrilling, intimidating, and
33 123 scary. But the opportunities are out there. Big compa-
34 I D E A nies of all kinds are hungry for the nimble thinking
35 and new products created by entrepreneurs.
36 The first challenge is making contact with someone at the
37 big company who is interested in what you have to offer.
38 Sometimes this takes weeks, but once in a while the big
39 company finds you.
That’s what happened to Santa Monica–based Round- 1
house Products, which designs patented CD storage systems 2
for itself and others. Six years ago, Roundhouse signed a 3
lucrative licensing and design agreement with office prod- 4
ucts giant Avery Dennison. (In 2000, they sold the company 5
to Targus.) 6
Jon Williamson, senior product manager for new prod- 7
ucts at Avery, said he was in the process of designing a CD 8
storage system when he found Roundhouse’s products and 9
said, “this is it.” 10
“They bring a freshness that I can’t always get in a larger 11
company,” said Williamson. “I’m constantly intrigued by 12
their intelligence and how quickly they can get something to 13
market.” 14
The relationship, which ended in 1997, benefited both 15
companies. When it was growing, Roundhouse benefited 16
from Avery’s tremendous retail distribution clout, while 17
Avery took advantage of Roundhouse’s design talents and 18
speed in executing new ideas. Neither company would dis- 19
close the exact financial details of the agreement, but both 209 20
said it was positive for everyone involved. 21
“When Avery came to us, we had a good, strong patent 22
position and something exciting to offer,” said Howard Sher- 23
man, Roundhouse’s chief executive officer. Roundhouse’s 24
sales have been so strong, they no longer need Avery’s help. 25
Sherman joined Roundhouse to bring some management 26
expertise to the founders, who have a strong background in 27
design but little financial expertise. 28
Roundhouse was founded in 1989 as a design consultan- 29
cy. “Two guys from Art Center in Pasadena basically invented 30
and patented a system for storing CDs,” said Sherman. The 31
company’s patented “Roladisc” system eliminates the need 32
for the bulky plastic jewel cases by storing CDs in plastic 33
sleeves. In fact, customers are encouraged to send back the 34
plastic cases to Roundhouse for recycling. 35
Roundhouse also had a significant business relationship 36
with a division of Sony to develop another line of customized 37
CD storage products. “We didn’t care about their size,” said 38
Carl Walter, senior vice president of operations for Sony Sig- 39
1
2
3
Tips for dealing with large
4 companies
5
6 ◆ Find the right person to contact and be persistent until

7 you reach them.
8 ◆ Present the gist of your idea in a clear, concise manner.
9 ◆ Be well prepared for your first meeting so you make a
10 positive impression.
11 ◆ Surround yourself with experienced advisers, including
12 your attorney and accountant.
13 ◆ Be patient. Things take longer to be decided at big com-
14 panies.
15
16 natures in San Francisco. “What was important to us was
17 that we felt they were very creative. They had a very innova-
18 tive product that we liked.” That joint venture agreement
19 covered a line of CD storage cases featuring famous artists
20 210 including Neil Diamond, Santana, Kiss, Janis Joplin, and
21 Bob Dylan.
22 Roundhouse’s Sherman said one challenge in dealing

23 with a big company is not to appear too anxious or naive,
24 even when you are so eager to do the deal. “It was very excit-
25 ing for us when we first met with Avery,” he said. “But we all
26 had to wear our poker faces.”
27 He said another big challenge is timing. People who work
28 for big companies often can’t believe how quickly a small
29 company can turn something around. Although they had a
30 letter of intent drafted in a few days, it took ten months to
31 sign a formal contract with Avery. Being patient and persis-
32 tent are both important, Sherman said.
33 “You also need to persevere and be flexible as the play-
34 ers change within a corporation,” Sherman advised. He
35 and the other founders remained with Targus after the
36 acquisition.
37
38
39
1
Have Your Product Mandated 2
3
forUse by an Official Group 4
G R E AT
in 1988, miami radio salesman eduardo 5
Barea read about a mandatory uniform policy about 6
124 to be implemented in local public schools. That day a 7
I D E A great idea took hold: He would get into the school 8
uniform business. 9
This father of four founded Ibiley School Uniforms Inc. 10
and immediately began pitching the benefits of uniforms to 11
parents, kids, and teachers. He truly believes that wearing 12
school uniforms reduces peer pressure and truancy and 13
encourages better behavior. 14
His fervent pitch to school board members worked: In the 15
first year, he sold uniforms to fourteen schools. Barea, who 16
was named the Small Business Person of the Year from 17
Florida in 1997, has sales of $6 million and 200 employees 18
during the peak summer buying season. 19
His greatest challenge is still the seasonal nature of the 211 20
business and being able to keep the cash flowing year-round. 21
He continues to grow his business by attending PTA meet- 22
ings and lobbying for more schools to adopt the mandatory 23
uniform policy. 24
Up the coast, a New York firm is also benefiting from 25
government mandates. Maurice King, founder of King 26
Research Inc. in Brooklyn, pioneered a mandated product 27
strategy in the late 1940s. King, who developed Barbicide, 28
the bright-blue disinfectant for haircutters, traveled around 29
the country with his younger brother, James, meeting with 30
state health officials to extol the virtues of his sanitizing 31
product. 32
“Sure enough, the state officials began to pass rules that 33
there be a disinfectant [in barber shops] and in some cases, 34
they said, ‘Sure, Mr. King, but can you suggest a product?’” 35
recalls Maurice’s son, Ben King. “‘Why, yes!’ my father 36
replied. ‘Barbicide! It’s germicidal and fungicidal’—and Bar- 37
bicide got written into a number of the rule books being cre- 38
ated,” says Ben King, who serves as chief executive officer 39
1 and president of the small family business.
2 As more and more states issued regulations requiring
3 barbers to soak their barbering tools, Barbicide sales grew.
4 Although the product is mentioned by name in only two
5 state rule books, it still flourishes.
6 The company celebrated its fiftieth anniversary with a

7 party at the Smithsonian Institution’s National Museum of
8 American History and presented the museum with a jar of
9 Barbicide—and a donation. Maurice King, who died of a
10 heart attack in 1988, would have gotten a big kick out of the
11 ceremony, which included, of course, a barbershop quartet.
12 King’s twenty-five employees make twenty different prod-
13 ucts, including talcs, hospital disinfectants, and creams. But
14 bright, almost-neon blue Barbicide is still the flagship brand.
15 “My father’s secret joke was that he had a rash condition
16 on his scalp and whenever barbers pricked him, it hurt like
17 the devil,” says Ben King. “When he developed Barbicide, he
18 decided to name it as such because it translated into ‘kill the
19 barber.’ I don’t think he ever put that into his advertising.”
20 212 So think about a way to encourage an official government
21 agency or organization to mandate that people buy your
22 product or service. Then work hard to build your marketing

23 strategy around the requirements.
24
25
26
Find a Need and Fill It
27 G R E AT when nellie may sutton was diagnosed
28 with Alzheimer’s disease in 1985, her son Joseph
29 125 began searching for a place where she could live safe-
30 I D E A ly and comfortably. After checking out nursing
31 homes and elder care services, Sutton decided to rent a
32 ranch-style house and hire a caregiver to take care of his
33 mother. He then found four other Alzheimer’s patients to fill
34 the extra bedrooms, and a novel business concept was born.
35 “I opened my first home to care for my mother—no other
36 reason,” said Sutton, founder of Sutton Homes, based in
37 Englewood, Colorado. Sutton sells franchises to entrepre-
38 neurs who want to operate homes for the elderly around the
39 country. Serving America’s aging is providing tremendous
opportunities for savvy entrepreneurs like Sutton. 1
About 19 million Americans have a family member suf- 2
fering from the progressive, degenerative disease that affects 3
memory. Many Alzheimer’s patients require round-the-clock 4
attention and supervision. Smaller group homes are often 5
more suitable for Alzheimer’s patients, who find nursing 6
homes, with their many activities and visitors, too hectic and 7
confusing, according to Joe Sutton. 8
Gladys Thankachan, a Los Angeles gerontologist and hos- 9
pital consultant, said small units of five to seven residents 10
are more friendly and accommodating than large institution- 11
al facilities for people in the early stages of Alzheimer’s. 12
However, she said, independent “board and care” homes 13
such as Sutton’s can be difficult to regulate. Yet given the 14
increasing geriatric population, she said, such homes are a 15
step in the right direction, “if we can make sure the standard 16
of care is appropriate.” 17
Although anyone can apply for a license to operate a 18
board and care facility in most states, Sutton teaches people 19
how to operate the homes in a professional manner. Sutton 213 20
has franchisees operating almost fifty Sutton Homes in the 21
United States. 22
Potential Sutton Homes franchisees make an initial 23
investment of $250,000 for the minimum of three homes, 24
to $450,000 for a nine-home package. That amount covers 25
leasing the homes, renovating them, and paying for the staff 26
for about a year. Franchisees also pay Sutton a 7 percent roy- 27
alty on revenues, plus a 1 percent marketing fee. 28
Once franchisees are up and running, several homes can 29
generate profits into the six-figure range, according to David 30
Coker, vice president of franchise development for Sutton 31
Homes. 32
Sutton said he tries to balance business savvy with elder 33
care. He insists the services be top-notch but affordable. Sut- 34
ton Homes provide franchisees with a week of training in 35
Colorado, plus several days in their hometowns. The com- 36
pany also encourages franchisees to hire professionals to 37
staff and manage the homes. 38
Sutton realized there are thousands of Americans dealing 39
1 with the same stress he faced in finding a safe place for his
2 mother. For him, Sutton Homes filled a personal need and,
3 at the same time, produced a real business opportunity.
4 For more information, contact Alzheimer’s Association
5 National Headquarters, 919 Michigan Avenue, Suite 1000,
6 Chicago, IL 60611, 800-272-3900; Sutton Homes at 407-

7 740-8815; or the U.S. Department on Aging Information
8 line: 800-222-2225.
9
10
11
OpenYour Store in a Farmer’s Market
12 G R E AT americans have loved shopping in markets
13 since before there was America. The first farmer’s
14 126 market opened in Alexandria, Virginia, in the 1750s.
15 I D E A Today the U.S. Department of Agriculture reports
16 there are about 35,000 farmer’s markets across the country.
17 In addition, thousands of flea markets and other ventures
18 sell everything from junk jewelry to jam.
19 Opening your business in an established market setting
20 214 has tremendous advantages. The rent and utilities are often
21 more affordable than stand-alone retail space. Plus, the land-
22 lord takes on part of the responsibility for attracting cus-

23 tomers through signage and advertising.
24 You can also find safety and encouragement in numbers.
25 You won’t feel so alone when you can wander next door and
26 visit with your neighboring merchant.
27 Before you run out and rent space, here are some tips:
28 ◆ Go shopping. Visit all the markets in your area. Some are
29 open every day; others open only on the weekends. You want
30 to make sure your merchandise fits the clientele.
31 ◆ Check out the competition. Make sure your product or
32 service fills a need in that particular market. You don’t want
33 to be the fourth bakery in a market.
34 ◆ Speak with the other vendors. Ask them how the landlord
35 treats them and whether he or she keeps promises made to
36 tenants.
37 ◆ Check out the appearance and maintenance. Are the
38 public areas and restrooms kept clean? Is there adequate and
39 well-lit parking for customers? Are security guards provided
by the management? How will you secure your space when 1
the market is closed? 2
◆ Ask to see the advertising materials or brochures put 3
out by the landlord. Be clear about the kind of advertising 4
they pay for and whether there are any restrictions on doing 5
your own advertising. 6
◆ Find out how you will be charged for your space. Some 7
open-air markets charge by the running foot; other, more 8
permanent markets tend to charge by the square foot. Make 9
sure you understand exactly what you are paying for, includ- 10
ing utilities. Will you need to buy liability insurance? Will 11
you be paying a percentage of sales to the management? 12
◆ Spend some time in the market to get a feel for the 13
ambiance. You will be spending many long hours in this 14
place, so you want to be sure it feels right. 15
If you are ever in New York City, visit one of my 16
favorites—the Chelsea Market. Built in an old Nabisco facto- 17
ry, it is one of the nicest markets I’ve ever wandered through. 18
The architecture is unique and captures the feeling of the old 19
stone factory. The stores sell everything from discount pro- 215 20
duce to gourmet baked goods. There’s a florist, a fish mar- 21
ket, and a basket store, among others. It’s located at 9th 22
Avenue at 15th Street. Check it out. 23
24
25
TurnYour Anger into Energy 26
G R E AT carmen muñoz knows how tough it is to 27
make it in a man’s world. She’s been in the automo- 28
127 tive parts business for more than thirty-five years, 29
I D E A starting out as the sole saleswoman for a small firm 30
in the Detroit area. 31
In 1984, when the owner’s son took over the business, 32
she was called into his office. “He told me I was making too 33
much money for a woman, especially ‘a Mexican woman,’” 34
recalls Muñoz. She was so stunned, she asked him to repeat 35
what he said—slowly. 36
He did. She’ll never forget Thursday, March 13, 1984, the 37
life-changing day she quit her job. The following Monday, 38
she started her own company to compete with the misguided 39
1 son. She’s never looked back, although she did laugh a little
2 when her former employer shut down eighteen months after
3 she left.
4 “Anger is a marvelous thing,” said Muñoz. “You can use
5 the energy to propel you to accomplish major feats.”
6 Muñoz, winner of Avon’s 1997 Women of Enterprise

7 Award, became chairman of the board of GSC Industries
8 Inc. in 1996, when her company was acquired by another
9 automotive firm. Based in Detroit, with offices in Livonia
10 and Indianapolis, GSC’s 220 employees make precision
11 parts for transmissions. Clearly, one would hope that it
12 not take being insulted and harassed to motivate women
13 (or men, for that matter) to excel in business, but—let’s
14 face it—sometimes it takes an extreme situation to move
15 you toward a better future and to clarify the potential in
16 front of you. Even anger can be used in a positive way, if
17 you let it.
18
19
20 216
Set Up a Cart in a Mall
21 G R E AT
veteran silversmith kent m C custion used
22 to travel to about fifty craft shows a year, often driving

23 128 hundreds of miles to shows around Illinois. In 1997
24 I D E A he cut back to six or seven shows because of the Col-
25 orado Silversmith’s kiosk he opened in the Northwoods Mall.
26 He’s sold more than $100,000 worth of jewelry, with some
27 silver buckles and necklaces selling for $500 each.
28 McCustion, who designs and produces his own jewelry in
29 addition to selling Navajo, Zuni, and Hopi pieces, said he
30 planned on operating the twenty-by-eight-foot kiosk just dur-
31 ing the holiday shopping season. But business is so strong,
32 he has no plans to leave the mall.
33 Colorful kiosks and carts featuring unique merchandise
34 have become fixtures in American malls. The first were set
35 up in Boston’s Quincy Market in 1976 when local developers
36 set out to rejuvenate the city’s ailing downtown area. Today,
37 about 80 percent of America’s 1,800 enclosed and regional
38 shopping malls have so-called “temporary tenants,” accord-
39 ing to industry experts.
Kiosks and carts have tremendous benefits for small busi- 1
ness owners and mall operators: Entrepreneurs are able to 2
display their wares in a prime, high-foot-traffic setting with 3
little investment; malls benefit from a wider variety of inter- 4
esting merchandise and extra rent. 5
“The mall doesn’t have to take a risk on a long-term 6
lease,” said Mark Schoifet, spokesman for the International 7
Council of Shopping Centers. “For the retailer, there’s access 8
to a lot of customers that they would not otherwise have.” 9
Major mall developers, such as the Indianapolis-based 10
Simon De Bartolo Group, aggressively promote their tem- 11
porary tenant program. Jim Allen, vice president of retail 12
development, said the company’s malls, which often have 13
between ten and forty carts per mall, rely on carts to add 14
color and variety, as well as to generate income. Allen said 15
while some cart operators move in just to capitalize on 16
the busy holiday gift-buying season, many more remain 17
year-round. 18
Danny Vaswani, a longtime Simon De Bartolo mall ten- 19
ant, said the secret of success is to offer something “the 217 20
anchor stores are not offering.” He began selling perfume 21
from his Cleopatra carts in two El Paso malls four years ago. 22
Most of the European fragrances he sells from his carts are 23
not available elsewhere in the mall, and some retail for as 24
much as $100. 25
“By selling in shopping malls with this kind of arrange- 26
ment, you can come in with a small investment,” he said. 27
Initially he paid $2,500 to get into the mall, not counting the 28
cost of inventory. Now he pays $1,300 a month rent for every 29
cart he operates. “But rent for in-line stores can be four 30
times the rent for carts or kiosks,” said Vaswani, who has 31
become a cart magnate. 32
He’s expanded beyond perfume to sell Dippin’ Dots ice 33
cream and tee-shirts. All together, he said, his carts generate 34
annual sales of more than $1 million. 35
“The pushcarts used to act as incubators for a potential 36
market,” said Jennifer Ciotti, manager of specialty retail 37
for Boston’s Faneuil Hall. “Now the retailer is a profes- 38
sional specialty retailer who opens more and more carts. 39
1
2 Tips for making the move to a mall
3
4 ◆ Visit malls in your area to check out the competition and
5 foot-traffic.
6 ◆ Meet with the specialty retail manager to discuss what

7 merchandise they are looking for.
8 ◆ If possible, work for someone else before you invest in
9 your own cart.
10 ◆ Speak to the other vendors to find out what life in a mall
11 is really like.
12 ◆ Make sure your cart is attractive, well lit, and functional.
13
14 It’s become reputable and very sophisticated.”
15 Unlike the pushcarts of yesterday, today’s carts feature
16 phone lines, elaborate lighting, and computerized inventory
17 systems. Vendors can accept credit cards and orders via com-
18 puters, Ciotti said.
19 Minnesota’s Mall of America is not only America’s
20 218 biggest mall, but it operates the largest specialty leasing
21 program in the nation. “The temporary tenants are really
22 the gems of the mall,” said Theresa McFarland, spokes-

23 woman for the mall.
24 Kathy Rusche, director of the mall’s temporary leasing
25 program, said they set very high standards for vendors. All
26 temporary tenants must pay $1,500 in “key money,” which
27 pays for a store designer to design and build a cart with the
28 right look. “We want to make sure the curb appeal is there
29 for the customers,” said Rusche.
30 Temporary tenants can expect to pay a premium for space
31 at a consumer wonderland like the Mall of America. Last
32 year, 40 million shoppers visited the mall, which boasts an
33 amusement park in one section. Cart rental rates are $2,300
34 a month or 15 percent of monthly sales, whichever is greater,
35 Rusche said.
36
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1
TurnYour Passion into Profits 2
G R E AT
geoffrey berliner is a tinkerer. he began 3
tinkering with old watches, pens, and lighters when 4
129 he was at Harvard Divinity School in the late 1980s. 5
I D E A “I like to bring things back to life,” he explained. 6
As a student in Cambridge, he frequented a pipe and 7
tobacco shop that had a collection of vintage pens and 8
antiques in the back room. He began collecting old pens for 9
around $25 each because he couldn’t afford to buy old watch- 10
es. “Those pens warmed me up,” said Berliner, who intend- 11
ed to be a college professor, but became a paralegal when he 12
moved back to New York City. 13
In New York he began haunting flea markets and antique 14
stores, buying and repairing pens, some more than 100 15
years old. “I began machining some of my own parts and 16
finding parts from old junker pens,” he said. “I was still col- 17
lecting and working out of my apartment.” 18
His fame as a “pen doctor” grew. He began writing arti- 19
cles on pen repair for Pen World magazine and became a 219 20
director of the Pen Collectors of America. “I’ve always liked 21
the idea of living in another century,” said Berliner. “Pens 22
slow you down—they’re very deliberate. Computers make 23
you do everything quicker.” 24
When it was apparent there was a real market for his 25
products and repair services, he moved his business out of 26
his apartment into a 1,000-square-foot space in the Flatiron 27
District of Manhattan. And as he became busier, he couldn’t 28
keep up with demand. He met his future partner, Bernard 29
Isaacson, at a flea market, and they became friends. Isaacson 30
eventually gave up his job as a hospital administrator to work 31
full-time at Berliner Pen. Today their cozy shop sells both 32
antique and contemporary pens. They also have a pen muse- 33
um, a website, and a quarterly magazine, Penfinder. 34
“We are a full-service pen shop,” said Berliner, who sells 35
pens ranging from $35 to $20,000. “You’ve got to spend at 36
least $300 on a quality pen.” Berliner said sales are between 37
$500,000 and $1 million a year. At some point, he’d like to 38
design his own line of pens, “but who has the time?” 39
1 Berliner has this advice for entrepreneurs who want to
2 turn their hobby into a business: “Enjoy what you’re doing,
3 and the money will follow,” he said, adding that being ethical
4 when you parlay your passion into a business is essential.
5 Why? Because you want to develop long-term relationships
6 with collectors and customers.

7 Berliner Pen is located at 928 Broadway, Suite 604, New
8 York, NY 10010; 212-614-3020 (www.berlinerpen.com).
9
10 Develop a High-Tech
11
12
Solution to a Problem
13 G R E AT concerns regarding infant abduction from
14 hospitals have created a hot market for infant security
15 130 systems. Several small high-tech equipment manu-
16 I D E A facturers are competing to sell high-tech systems to
17 nervous hospital administrators.
18 While there are no exact figures on the market for infant
19 security systems, the United States has about 35,000
20 220 birthing centers handling about 4.1 million births a year.
21 About 1,000 hospitals are big enough to afford high-tech
22 security systems, according to industry experts. They are

23 willing to pay for tracking and alarm systems because one
24 abducted baby can result in a multimillion-dollar lawsuit.
25 “The financial loss to a hospital could be in the realm of
26 about $55 million,” said Bernard Shore, vice president of
27 Dynaflow in Syosset, New York. That’s how much a sympa-
28 thetic judge may think a newborn baby’s life is worth to the
29 distraught parents, Shore said. Dynaflow began making elec-
30 tronic bracelets used to keep track of adult patients and
31 entered the infant security market with a system that costs
32 about $30,000. Shore said increased publicity about infant
33 abduction and pressure from the Joint Commission on
34 Accreditation of Health Care Organizations to increase
35 hospital security has prompted many entrepreneurial
36 companies to enter the market.
37 “Most of the feedback we get is peace of mind,” said
38 Joseph Gulinello, director of Interfaith Hospital’s security
39 and safety division. He said Dynaflow’s infant security sys-
tem at the Brooklyn hospital generates very positive feedback 1
from parents and medical personnel. “People say, ‘this insti- 2
tution obviously cares about us, and I can close my eyes and 3
go to sleep and know that there is an integrated system that 4
is going to help keep my baby safe.’” 5
Dynaflow systems are installed in about forty hospitals, 6
mostly in the Northeast. Many hospitals are in high-crime 7
areas where babies must be protected from drug-addicted 8
mothers or fathers trying to take a baby out of the nursery 9
where it’s being held by social workers. 10
Small electronic devices on bracelets attached to the 11
baby’s ankle trigger an alarm signal if the baby is taken out 12
of the authorized area. The system also disables elevators 13
and exit doors to prevent escape. 14
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1
8
P eople can make your business and person-
al life miserable or magical.
If it’s magic you want, surround yourself with
talented, confident, and resourceful people. It’s a
secret of success to swear by in life and in business.
The challenge is to find the right mix of people in
a very competitive economic environment. Talented
workers, especially in health care and high tech-
9 nology, have their pick of good jobs virtually any-
10 where in this country—or abroad. This means small
11 business owners have to compete for talent with not
12 only local competitors, but also with bigger com-
13 panies offering fat salaries, benefits, and expensive
14 perks.
15 It’s tough, but you can build and grow a terrific
16 team if you try some of these great ideas to attract,
17 develop, and retain good employees. In this chapter,
18 you’ll learn how to find great applicants, how to
interview and screen them, hire them, discipline 1
them, promote them, and even fire them. 2
As an employer since 1991, I’ve learned the hard 3
way how to deal with personnel issues. Through the 4
years, I’ve handled a disruptive office romance, 5

225
incompetent assistants, a talented but moody 6
researcher, an insecure business partner, an insane 7
client, and a variety of other wackos. 8
At times, when my head is about to explode, I 9
think about the good old days when it was just me, 10
my cat, and my computer in a cozy corner of my 11
den in Sun Valley, California. 12
But of course you can’t go back. You have to learn 13
to manage yourself and then lead and manage the 14
people around you. 15
Above all, I’ve found that good communication is 16
critical to managing staff. Life is so much less 17
stressful when you are honest and clear about 18

1 your expectations. Spell them out. Write them down. Scrawl
2 them in crayon on the wall, but tell people exactly what you
3 expect them to do, how you want them to do it, and when
4 you need to have it done.
5 I realize that everyone communicates differently. Being a
6 writer, I like to write notes filled with instructions. The prob-

7 lem is, my husband, Joe, and our kids, Jeanne and Evan,
8 absolutely hate receiving them. “Just tell me what you want
9 me to do,” admonishes my daughter. “Don’t write it down.”
10 “You’ll be leaving notes on our graves,” jokes Evan, our ninth
11 grader. He’s probably right.
12 Once you’ve established a clear style of communication,
13 master the art of motivation and delegation. If people don’t
14 feel truly appreciated, they won’t work hard for you. They’ll
15 be unhappy and quit or force you to fire them. And if they
16 don’t feel trusted, they won’t overachieve. It’s that simple.
17 Human beings crave personal feedback and reward. With-
18 out those, our work suffers, and we feel meaningless. So you
19 have to figure out how to evaluate and respond positively—
20 226 or negatively—to the work people do for you every day.
21 Sometimes a simple “Thanks, good job” is all someone
PEOPLE
22 needs to hear. Sometimes you need to do more, including

23 giving some sort of financial reward or perk. A day off with
24 pay is one of the best ways to thank someone for their extra
25 effort or for meeting a tough deadline.
26 This chapter includes a variety of ways to deal with the
27 people you work with, whether they are clients, customers,
28 employees, or vendors. You’ll learn how to let your clients
29 participate in the hiring process and how to hire an interim
30 executive. There are great ideas about training, teaching Eng-
31 lish to employees, recruiting, and giving your business a
32 tough personnel audit. My friends at Disney share their
33 ideas about customer service. You’ll also learn what to do if
34 an employee turns violent on the job.
35 So remember: You are only as good as the people you
36 work with.
37
38
39
1
Cast aWide Net to 2
3
Attract Good Employees 4
G R E AT one of the greatest challenges for small 5
business owners is to recruit, train, and retain good 6
131 workers. It’s very tough for a small company, espe- 7
I D E A cially in the bootstrapping start-up phase, to compete 8
with bigger companies when it comes to offering competi- 9
tive salaries and attractive benefits. 10
But it’s essential to focus on hiring the best people from 11
the very beginning. Hiring mistakes are costly. A big compa- 12
ny can afford a few duds on the payroll, but a small business 13
doesn’t have the time or financial resources to waste on a 14
poor hire. 15
Here are some low-cost ways to recruit good workers: 16
◆ Tell your customers and vendors that you’re hiring. They 17
know your business and can tell you the kind of people they 18
would like to work with. 19
◆ Call other small business owners and ask if they’ve 227 20
interviewed any good people they haven’t hired. This 21
isn’t as strange as it sounds. Many times people wish they 22
could hire someone but they don’t have the budget or the 23
timing isn’t quite right. 24
◆ Consider hiring older and younger workers. Students and 25
retired people are a tremendous resource for small business- 26
es (see Great Ideas 137 and 138). Contact your local business 27
school, community college, or even high school to find a 28
competent student. Students have all sorts of talents and are 29
eager for real-world job experience. 30
I found a terrific research assistant through the job board 31
at a nearby journalism school. Inquire about internship pro- 32
grams that offer students class credit for work experience. 33
Sometimes students are willing to work for free if they can 34
get school credit for the job. If not, a good intern is worth 35
paying well. 36
Retired managers and executives not only have tremen- 37
dous experience and knowledge, but also are often willing to 38
work at a lower rate of pay. Contact your trade or professional 39
1 association or local chamber of commerce, and rely on word-
2 of-mouth.
3 ◆ Advertise in the local newspaper or in trade publications
4 before you spend a lot of money on advertising in major
5 papers. If you want to launch a national search, the Wall
6 Street Journal and the National Business Employment Weekly

7 are good places to start. Advertise in trade journals or week-
8 lies serving your industry.
9 ◆ Contact your state Employment Development Depart-
10 ment. The state can help you find job candidates in many
11 fields. The state also offers training programs and tax
12 incentives for hiring new people, so check out what’s
13 available.
14
15
16
Write ClearJob Descriptions
17 G R E AT
in the interest of clarity and good com-
18 munication, it’s a great idea to outline specific job
19 132 responsibilities for everyone on your staff. This helps
20 I D E A avoid confusion and boosts productivity. It also helps
228
21 cross-train workers to cover for each other. Be sure to update
PEOPLE
22 your job descriptions every six months and whenever you

23 hire new people or consultants.
24 If you don’t think you need to do this, just ask your staff to
25 tell you exactly what they are expected to do every day. You
26 may be very surprised at the contrast between what you think
27 you hired them to do and what they are actually doing.
28 We are a very small company, but our responsibilities
29 are very clear:
30 jane applegate: Manage the big picture at SBTV. Write weekly
31 “Succeeding in Small Business” column; coordinate produc-
32 tion for video segments; work with the business develop-
33 ment team to put together new deals; write proposals; speak
34 at events.
35 john d’aquila: CFO and business development manager.
36 Responsible for drafting sponsorship proposals, day to day
37 financial operations, and forming strategic alliances.
38 sarah prior: Manage daily operations and coordinate efforts
39 between the Web design and production teams; research and
report stories for print and broadcast; write scripts and assist 1
Jane with sponsor relations. 2
scott wylie: Manage all computer systems, e-mail, and video 3
editing and compression efforts; coordinate all tech coverage 4
on SBTV; create new strategies to sell SBTV content. 5
joe applegate: Managing editor responsible for editing all new 6
content posted on SBTV; review all projects from an ethical 7
and financial perspective; provide guidance and moral sup- 8
port to Jane. 9
10
11
Know What Not to Ask Job Applicants 12
G R E AT when 100 small business owners were 13
asked if they had ever asked a job applicant any of the 14
133 following questions during an interview, all of them 15
I D E A said “yes.” 16
1 Have you ever filed a workers’ compensation claim? 17
2 Do you have any physical problems or injuries? 18
3 How many days were you sick last year? 19
4 Are you currently taking any medication? 229 20
5 Have you ever been treated for drug abuse? 21
22
the problem is, under the americans with disabilities 23
Act, it’s illegal to ask applicants these questions, according to 24
Morlee Rothchild, head of the labor and employment prac- 25
tices section at the law firm of Kahn, Kleinman, Yanowitz 26
and Arnson in Cleveland, Ohio. 27
“Small companies are especially at risk when it comes 28
to complying with the ADA and other employment-related 29
laws,” said Rothchild. They are often too busy to keep up 30
with current regulations, which makes them vulnerable 31
to lawsuits and complaints. And remember, ignorance of 32
the law is no defense if a prospective employee decides to 33
sue you. 34
“When interviewing to fill a particular position, you 35
must ask questions relevant to the prospective employee’s 36
ability to perform the essential functions of the job,” 37
Rothchild said. 38
For more information on conducting effective, legal inter- 39
1 views, read Hire, Manage & Retain Employees for Your Small
2 Business, edited by Joel Handelsman (Commerce Clearing
3 House; 1998). It’s part of the CCH Business Owner’s Toolk-
4 it. Call CCH at 800-248-3248.
5
6
7
Recruit Good Employees
8 G R E AT a small business can’t afford to make poor
9 hiring choices. Yet small business owners too often
10 134 hire the first person who drifts through the door,
11 I D E A even for key jobs. Casting the widest net possible
12 before hiring is one approach (see Great Ideas 131 and 135),
13 but it often pays to bring in professional help. Why? Because
14 in a small, expanding business, your people-power means
15 the difference between success and failure.
16 You should begin a search with local networking, classi-
17 fied advertising, and word-of-mouth, but that’s often not
18 enough to attract the very best candidates. Many entrepre-
19 neurs believe they can’t afford the professional services of
20 230 an executive recruiter. But consider how critical a savvy
21 sales manager or controller can be to the future of your
PEOPLE
22 business.
23 Executive recruiters, long retained by big companies to
24 find just the right person, also work with many smaller
25 firms. Their fee—traditionally 331/3 percent of the total first
26 year’s salary plus all expenses—may sound steep, but think
27 of it as an investment. “We create a strategy for the hunt,”
28 said Brad Marks, chairman and chief executive officer of
29 Brad Marks International in Century City, California.
30 Marks, a veteran executive recruiter, has placed many top
31 executives in the entertainment industry. A former executive
32 at Walt Disney Co. and ABC, he’s been helping companies
33 find just the right person since 1982.
34 Marks, who works with four women colleagues, is particu-
35 larly known for placing high-level women in a traditionally
36 male-dominated field. “I have a distinct desire on my part to
37 find the best executive for the position, and in many cases
38 that turns out to be a woman,” said Marks.
39 According to an industry report, 24 percent of the news
directors in the top ten media markets are women. Two- 1
thirds of all news writers and producers are women, and 41 2
percent of all middle managers at radio and television sta- 3
tions are female. 4
Marks said a willingness to consider women for high-level 5
jobs began in the 1980s, when the leveraged buyouts of Hol- 6
lywood studios took many out of family hands and put them 7
under corporate control. 8
Marks, who encouraged KNBC in Los Angeles to hire Car- 9
ole Black as general manager and placed Dawn Tarnofsky at 10
Lifetime, said his type of work can be very “cloak and dag- 11
ger,” especially when he is replacing people who don’t know 12
they are about to lose their jobs. 13
He said the executive search process has several steps. 14
After meeting with clients to determine exactly what kind of 15
person they need, he and his team begin searching for suit- 16
able candidates. It can often take up to ten weeks to track 17
down and interview people. Marks then narrows the field to 18
about twenty people who are interviewed by him and his 19
associates. After careful evaluation, the top five people are 231 20
scheduled to meet with the client. 21
Hopefully, one will be a perfect fit. If you need to hire a 22
key manager, consider paying for professional help. 23
24
25
Look Far and Wide for the Best Person 26
G R E AT finding the right person to help run your 27
small business may mean hiring an out-of-towner 28
135 and paying to relocate that person. Relocation 29
I D E A involves a myriad of financial and emotional issues 30
for both you and your employee. It’s a complex and expen- 31
sive process. 32
Finding a comparable and comfortable place to live is 33
important, but a positive relocation depends on many fac- 34
tors, according to Maryanne Rainone, vice president of Hey- 35
man Associates, a Manhattan executive search firm. “We talk 36
to thousands of job candidates, and you get to know what 37
kind of things are red lights for a prospective employee,” 38
said Rainone. 39
1 She said it’s important to ask job candidates if they’ve
2 thought about relocation even before the first interview. If
3 their résumés show they’ve gone to school and worked in
4 only one state, they are probably not good candidates for a
5 major move. “Make sure the candidate is open to moving
6 before you get too interested, because sometimes companies

7 fall in love with one person and end up comparing everyone
8 to the candidate they can’t get,” she said.
9 By law, you can’t ask a job candidate if they are married or
10 have children, but you can ask if they have any family issues
11 affecting a relocation. At this point, most people will tell you
12 whether they need a good nursery school or a nursing home
13 for their mother. “Elder care is a big issue now and one of
14 the primary reasons people can’t leave where they are,” said
15 Rainone.
16 Even if you aren’t using an executive search firm, Rainone
17 suggests calling a relocation consultant to collect vital infor-
18 mation about schools, real estate prices, and quality-of-life
19 issues in your town. She also recommends looking locally
20 232 before you look elsewhere. You may be able to hire a wonder-
21 ful person by offering a higher salary, rather than paying all
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22 the relocation expenses to hire an out-of-towner.

23 Being aware of spousal issues is also important to a suc-
24 cessful relocation. If the trailing spouse will have a tough
25 time finding work or adjusting to life in your town, the relo-
26 cation could prove to be a disaster, Rainone warns. Remem-
27 ber, you are not just recruiting one person—you are recruit-
28 ing an entire family.
29
30
31
Work with PeopleYou Like
32 G R E AT
john chuang, founder of boston-based
33 Acquent, matches candidates with Mac and Windows
34 136 expertise with companies that need temporary sup-
35 I D E A port. He has some contrarian advice for entrepre-
36 neurs growing their businesses.
37 “You’ve heard that two things you never want to do with
38 friends is lend them money and go into business with
39 them,” said Chuang. “But the reality is that people who go
into ventures with people they know and trust are one step 1
ahead of the game.” 2
Chuang attributes the success of his high-tech profes- 3
sional temporary agency to the fact that he went into busi- 4
ness with friends from college and graduate school. They set 5
out to serve a small base of computer-literate customers in 6
Boston, but ended up creating a business that now has 7
offices from Atlanta to Tokyo and places about 2,000 temps 8
a week. 9
Chuang said working with people you know lets you work 10
around their strengths and weaknesses. You also communi- 11
cate better with people you like, and this can be a real advan- 12
tage over working with strangers, he said. “Hiring trusted 13
friends cuts down on the time spent interviewing and 14
screening,” he said. “You know who you trust, and it takes 15
some of the guesswork out of the process.” 16
Sharing the same sense of humor can also help you ride 17
the entrepreneurial roller-coaster. “We used humor to weath- 18
er the tough times,” said Chuang. 19
Best of all, “if you have to work late, you’d rather be with 233 20
your friends than a room full of strangers.” 21
22
23
Hire Seniors as Employees 24
G R E AT one of the best salespeople i ever dealt 25
with was a tiny woman in her late seventies. A few 26
137 weeks before we moved into our beautiful, pre-war 27
I D E A apartment, my husband, Joe, and I wandered into a 28
suburban Westchester County lighting store, long shopping 29
list in hand. We were immediately dazzled and baffled by the 30
vast selection of fixtures. 31
Gratefully, we were met by a pixie. Barely five feet tall and 32
smartly dressed, Ann introduced herself, clipboard in hand. 33
I must admit I was surprised to see a woman of her age still 34
working in sales. 35
But she was absolutely amazing. She quickly steered us 36
around the store from the ceiling fan room to the chandelier 37
department to the brass table lamp section and back to the 38
sales counter. She answered all of our questions about 39
1 quality, wattage, and installation, standing on tiptoe to reach
2 the cords to illuminate the fixtures.
3 Ann knew everything there was to know about light fix-
4 tures. She spent more than an hour with us, writing up an
5 order totaling hundreds of dollars—including the appropri-
6 ate light bulbs.

7 Dealing with Ann reinforced my belief that experienced
8 older people can be an incredible asset to your business. No
9 matter what you do, consider hiring at least one senior
10 worker, at least part-time. Seniors not only have a lifetime of
11 experiences, but they also like flexible hours and probably
12 won’t demand a fat paycheck.
13 One summer, when I was just starting my business, I had
14 two great seniors working with me: my grandparents, Jean
15 and George Coan. They were staying with my parents in the
16 sleepy San Fernando Valley and feeling very bored when I
17 showed up with a huge box of fan mail. At the time, I was
18 offering a free resource guide, and we had received thou-
19 sands of requests from my newspaper readers. I handed the
20 234 mail over to them to open, sort, and stuff.
21 I relied on my grandparents because I couldn’t afford to
PEOPLE
22 hire anyone to deal with the mail; plus, it was the perfect
23 job for them. George got a kick out of reading the fan mail
24 and questions from readers. Jean was content to slice
25 open the piles of envelopes and be on the brochure-stuff-
26 ing team.
27 For that same project, I recruited my now dearly depart-
28 ed Aunt Pearl Weissman. Although she was busy tutoring
29 foreign-born students and volunteering at the local Democ-
30 ratic Party headquarters, she would make time to stuff a
31 few hundred envelopes with brochures every week. I’d visit
32 with her and my uncle Sam for a while, then return a few
33 days later to pick up the finished work at their Santa Moni-
34 ca apartment.
35 Consider how you can tap into the wisdom and skill of
36 older workers. Don’t reject candidates because they have gray
37 hair and wrinkles. Hire them.
38
39
1
Hire Teenagers 2
G R E AT in response to the shifting economy, seven 3
out of ten high school students want to start a busi- 4
138 ness, according to a Gallup Poll. The primary motiva- 5
I D E A tion is to be their own boss, not to earn a lot of money. 6
Although there are no firm statistics on how many of 7
America’s 27 million teens run small businesses, the num- 8
bers are well into the thousands and growing, according to 9
those involved in training young entrepreneurs. Teens are 10
selling handmade crafts, moving furniture, detailing cars, 11
and designing clothes, among other ventures. But not all 12
teenagers have a natural entrepreneurial bent. 13
Despite this strong interest, 86 percent of the teens sur- 14
veyed said they lacked the skills needed to start even the sim- 15
plest business. The study, commissioned by the Center for 16
Entrepreneurial Leadership at the Ewing Marion Kauffman 17
Foundation in Kansas City, Missouri, also found that most of 18
the students were taught little or nothing about running a 19
small business. 235 20
This thirst for practical information has fueled the growth 21
of several organizations aimed at training young entrepre- 22
neurs. Independent Means is an educational organization 23
devoted to teaching teenage girls about business, with offices 24
in New York and Santa Barbara. It operates summer camps, 25
sponsors seminars, and organizes a national business plan 26
competition for girls. “We have to train kids not just how to 27
get a job, but how to make a job,” said Joline Godfrey, 28
founder of Independent Means. 29
Other groups are serving low-income youth or business 30
owners’ children with a variety of training programs. Steve 31
Mariotti, founder of the National Foundation for Teaching 32
Entrepreneurship in Manhattan, said his group reaches out 33
to economically disadvantaged teenagers in fourteen cities. 34
The program boasts 12,000 graduates, a $5 million budget, 35
and 200 corporate sponsors. 36
“Economic illiteracy is an intellectual handicap in a 37
capitalist society,” Mariotti said. “It’s life-threatening for 38
the poor.” 39
1 Mariotti, coauthor of The Young Entrepreneur’s Guide to
2 Starting and Running a Business (Times Books; 2000), said
3 teens who participate in the foundation’s classes are taught
4 the practical marketing and financial skills needed to make it
5 in the business world.
6 Many teens get into business because their parents are

7 entrepreneurs. Katy Meyer of Carlisle, Massachusetts,
8 launched her silk scarf business after she won a national
9 business plan competition sponsored by Independent
10 Means. She learned silk painting at an art camp and has
11 been perfecting her technique ever since. The tenth-grader
12 has sold scores of scarves, ranging in price from $100 to
13 $500. She also created ten wall hangings for a Massachusetts
14 medical center as part of design project managed by her
15 mother, an interior designer.
16 What better way to support aspiring teen business owners
17 than to hire one as an intern or part-time worker? This can
18 serve to fill a labor void in your business and also add a new,
19 younger perspective to your team. Are you thinking of aim-
20 236 ing your products at the teen market? Why not get your teen
21 employee involved in the initiative?
PEOPLE
22 If you’re interested in hiring a teenager, start by contact-

23 ing one of these organizations for more information: Inde-
24 pendent Means, at 805-965-0475; and the National Founda-
25 tion for Teaching Entrepreneurship at 212-232-3333.
26
27
28
Use the BATH System for Hiring
29 G R E AT jay gol tz has been an entrepreneur since
30 he got out of school in the 1970s. He’s learned a lot
31 139 about hiring and now has about 140 employees at his
32 I D E A framing and home-and-garden stores in Chicago.
33 He’s found through the years that hiring good people is
34 the toughest challenge for business owners. “Seventy-five
35 percent of good management is hiring the right people in
36 the first place,” said Goltz, author of The Street-Smart
37 Entrepreneur: 133 Tough Lessons I Learned the Hard Way
38 (LPC; 1998).
39 Although former employers are reluctant to provide refer-
ences, try asking them if they would rehire the person. This 1
is one good way to get an honest opinion. 2
Another way to gauge your current hiring strategy is to 3
consider this hypothetical situation: An employee comes in 4
this morning to tell you they have to quit because they are 5
moving to California. Do you say “yippee!” or would you be 6
sad to see them go? If you’re happy that they are leaving, 7
Goltz says they are clearly not the best person for the job. 8
Goltz helps other entrepreneurs by holding seminars he 9
calls “Boss School.” He spends a lot of time explaining how 10
to hire and screen workers. His process is called the BATH 11
test, and here’s how it works: 12
“B” is for buy into your concept. Tell prospective 13
employees what your company is all about. You want to fit 14
square pegs into square holes. 15
“A” is for ability. Find people who have done this job 16
before. 17
“T” is for team playing. Will they tell you what is on 18
their mind? You can spend your whole life playing psychoan- 19
alyst with your employees—and it’s a waste of time. 237 20
“H” is for hungry. “I need people who are hungry and 21
want to work,” he says. 22
Consider using the BATH system when screening poten- 23
tial employees—it may help reduce your turnover rate. Since 24
he’s begun using his BATH system of hiring, his turnover 25
rate has dropped to 10 percent. 26
Goltz also likes to do a “gang interview.” He meets with 27
groups of applicants to tell them about the business. Some 28
folks ask where the bathroom is and run off. But, he says, it’s 29
better to scare off the wrong candidates at the beginning. 30
31
32
Perform a Personnel Checkup 33
G R E AT business owners used to getting routine 34
dental and medical checkups would benefit similarly 35
140 by giving their businesses a periodic personnel 36
I D E A checkup. The reason: Every year, thousands of unhap- 37
pily terminated employees sue their former employers. Their 38
complaints, justified or not, cost small business owners mil- 39
1 lions of dollars in legal fees, emotional distress, and lost pro-
2 ductivity. While many problems are easily avoided if you fol-
3 low the rules governing employment, there are so many
4 complex regulations on the books, it’s tough to keep up.
5 As her fast-growing public relations firm approached fifty
6 employees, Ellen LaNicca, chief executive officer of Patrice

7 Tanaka & Co., felt she needed expert help. Many state and
8 federal employee regulations kick in at the fifty-employee
9 level, and she wanted to be sure she was in full compliance.
10 LaNicca turned to Peter Skeie, an attorney and cofounder
11 of The Personnel Department Inc., to sort through the
12 morass of laws she had to deal with. Skeie and his partner,
13 Craig Chatfield, left their jobs at Fortune 500 companies to
14 set up their own human resources consulting service in New
15 York City. (They closed the company in 1999.)
16 “Peter is part diplomat, part human resources legal coun-
17 sel, and part troubleshooter,” said LaNicca. “He helped us
18 through the process of restructuring jobs and creating sepa-
19 ration packages for employees being let go.”
20 238 Skeie helped LaNicca review all the company’s personnel
21 practices, including revising the employee policy manual
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22 and job applications. “From the beginning, we wanted to

23 have the best working environment possible,” said LaNicca.
24 In addition to providing traditional medical benefits and flex-
25 ible scheduling, the firm has a meditation room to help
26 employees “de-stress.”
27 Skeie said most small businesses aren’t as employee-
28 friendly as LaNicca’s, but they all face similar people prob-
29 lems. “We realized small companies have the same
30 employment liability as Fortune 500 companies,” said
31 Skeie. “We set out to provide that kind of support on an
32 outsource basis.”
33 He admits that serving entrepreneurial companies was a
34 challenge because smaller employers are reluctant to bring
35 in outsiders. Most are too busy to keep good personnel
36 records, but in today’s litigious climate, they have to keep on
37 the straight and narrow.
38 “Failure to document problems as they occur is at the top
39 of the list,” said Skeie. “It’s much better to take a half hour
and document employee problems, because if you don’t 1
write them down, it’s much harder to defend yourself later 2
in court.” 3
He said too many small business owners tolerate high lev- 4
els of poor performance from employees because they don’t 5
know what to do. “Eventually, a straw breaks the camel’s 6
back, and they fire the person,” said Skeie. “But then they get 7
sued because this person who has become accustomed to 8
9
Tips for a personnel evaluation 10
11
EVERY YEAR, business owners are supposed to evaluate 12
their employees to rate their performance and productivity, 13
but it’s just as important to evaluate your personnel prac- 14
tices to determine whether or not you are operating your 15
business in a legal and ethical manner. Here are some tips 16
on getting started: 17
◆ Invest in a consultation with an experienced labor 18
lawyer. Ask him or her to review your job application to 19
make sure it doesn’t violate any state or federal employ- 239 20
ment laws. (For example, you can’t ask a job candidate 21
how old they are or whether they have kids.) Ask them to 22
review with you the documentation required before you 23
can legally terminate a problem employee. 24
◆ Do you have an employee handbook and a policy 25
manual? Your policy manual should outline things like 26
the company dress code, rules about attendance, employ- 27
ee benefits, and vacation issues. Be as specific as possible 28
to avoid confusion. (You can buy software that provides 29
templates to create these documents.) Circulate copies to 30
everyone and require employees to acknowledge, in writ- 31
ing, that they have read them. 32
◆ Do you have a written policy prohibiting sexual 33
harassment at your company? If not, create one and 34
ask every employee to read and sign a copy of the policy. 35
◆ Encourage your employees to suggest ways to boost 36
morale and improve communication with new poli- 37
cies or changes to existing ones. 38
39
1 doing virtually nothing gets fired and wants revenge.”
2 Not knowing labor law is no defense when an employer
3 gets sued by an irate former employee. Employers are
4 expected to keep up with all the changes and new require-
5 ments, but many don’t.
6 “Another mistake made by business owners is having

7 incomplete policies and procedures,” said Skeie. “You can
8 get in trouble if it can be proved there’s been a lack of atten-
9 tion to employment-related issues.”
10 Plain old management misconduct is another serious
11 problem. “Employers make stupid but innocent mistakes,”
12 he said. “They probably don’t mean anything discriminatory
13 by asking whether you are going to get married and have
14 children, but it’s against the law.”
15 Here are a couple of books worth checking out to get you
16 up to speed on employment law.
17 ◆ Slash Your Workers’ Comp Costs: How to Cut Premiums Up
18 to 35%—And Maintain a Productive and Safe Workplace by
19 Thomas Lundberg and Lynn Tylczak offers lots of practical
20 240 tips and a clear explanation of workers’ comp regulations
21 (AMACOM; 1997).
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22 ◆ The American Bar Association Guide to Workplace Law:

23 Everything You Need to Know About Your Rights As an
24 Employee or Employer is written in plain English. It covers a
25 variety of topics from sexual harassment to hiring and firing
26 (Times Books; 1997).
27
28
29
Hire aWelfare Recipient
30 G R E AT
you can complain about welfare recipients
31 spending your tax dollars, or you can do something
32 141 about it by offering an entry-level job to one person
33 I D E A on the public dole. With training programs and sup-
34 port in the form of public transportation vouchers or help
35 with childcare, thousands of welfare recipients are joining
36 the working class—some for the first time in their lives. You
37 might think your business is too small to give someone on
38 welfare a chance, but in today’s tight job market, you can
39 find untapped talent—as well as do a good deed.
A few years ago, my father hired two brothers to work for 1
his small nail products company. One brother was a recover- 2
ing drug addict; the other was on and off welfare. I admit 3
that when I heard what he had done, I was surprised that he 4
would take that kind of a risk. But they turned out to be 5
tremendously loyal and competent workers. 6
Sure, they had their share of personal problems, but most 7
days they showed up and worked hard, mixing flammable 8
chemicals and loading fifty-five-gallon drums on trucks. My 9
dad became sort of a surrogate father to them. By treating 10
them with respect and setting high standards, he helped 11
them get their lives together. 12
There are a variety of state, local, and federal programs 13
available to help business owners hire welfare recipients. On 14
the national level, the Welfare to Work Partnership, based in 15
Washington, D.C., provides a variety of resources. 16
More than 20,000 big and small companies have joined 17
the Partnership, an independent, nonpartisan group of busi- 18
nesses pledging to hire welfare recipients without displacing 19
other workers. 241 20
Businesses across America are stepping up to the plate to 21
hire people from public assistance, said former Wisconsin 22
Gov. Tommy Thompson. More than 350 companies have 23
signed the pledge in Wisconsin alone. Thompson, a Bush 24
cabinet member, has been a pioneer in welfare reform. By 25
eliminating cash payments to welfare recipients a few years 26
ago, he slashed Wisconsin’s welfare rolls by 70 percent. 27
Before his time, welfare was so easy to qualify for in Wiscon- 28
sin, Thompson said bus companies were selling discount 29
tickets so people from Chicago could sign up for benefits in 30
Wisconsin. 31
Today, Wisconsin’s welfare recipients must take part in 32
some sort of training program or work in a sheltered work- 33
shop to receive any public assistance. The state also provides 34
money to business owners who hire former welfare recipients. 35
Dozens of governors have joined the Partnership’s efforts 36
to reduce the welfare rolls. “Our success in implementing 37
comprehensive welfare reform throughout the nation will be 38
largely dependent on our ability to forge powerful ties 39
1 between the public sector and employers,” said Gov. Tom
2 Carper, a Delaware Democrat.
3 The Partnership’s bipartisan approach has attracted sup-
4 port from America’s blue-chip companies, including United
5 Airlines, Monsanto, Marriott International, The Limited,
6 Time Warner, Burger King Corp., Sprint, and United Parcel

7 Service of America.
8 For more information on how to hire a welfare recipient,
9 contact the Welfare to Work Partnership, 1250 Connecticut
10 Ave., NW, Suite 610, Washington, DC 20036-2603; 202-
11 955-3005. The Partnership’s website can be found at www.
12 welfaretowork.org.
13
14
15
ConsiderTelecommuting as an Option
16 G R E AT telecommuting has tremendous benefits
17 for workers and employers, but only if it’s handled
18 142 right. Telecommuting can boost the productivity of
19 I D E A workers who are independent self-starters. Motivated
20 242 employees who live far from their offices can accomplish
21 more by eliminating a long and stressful commute.
PEOPLE
22 Here are some tips if you are considering telecommuting

23 as an option for your business:
24 ◆ Determine whether the work can be done offsite. If the staff
25 person is responsible for writing proposals or crunching num-
26 bers all day, telecommuting is a viable option. If he or she is
27 managing a team of salespeople, it probably won’t work.
28 ◆ Figure out what equipment, software, and furniture you’ll
29 need to provide for your remote workers and whether it’s
30 worth the investment.
31 ◆ Determine which of your employees are best suited to work-
32 ing at home. In many cases, employees ask to telecommute
33 as a way to spend more time with their young children or to
34 care for a sick relative.
35 ◆ Set up a probationary period to see if telecommuting works.
36 Begin with one or two days a week—this gives you a chance
37 to work out the kinks. Then try it for a month or two. Tell
38 your telecommuters that this arrangement is considered
39 experimental and could end at any time.
◆ Be sure telecommuters understand that keeping company 1
files and information confidential and safe is essential. This 2
is one case where if the “dog ate my homework,” it could be 3
disastrous. 4
◆ Stay home and telecommute at least one day a week yourself. 5
Many busy managers I know swear by this. Have your office 6
transfer calls to your home. If working at home is not a good 7
option, check into assigning workers to telecommuting cen- 8
ters opening up around the country. 9
10
11
Tailor Benefits toEmployees’Needs 12
G R E AT in the small business world, one size 13
definitely does not fit all. Every company has a dis- 14
143 tinct group of employees with varying personal lives, 15
I D E A professional goals, and priorities. 16
While big companies prefer to offer the same insurance 17
benefits and options to everyone, small companies have an 18
advantage in being able to tailor benefits to their employees’ 19
specific needs. In many cases, your employees are covered 243 20
by their spouses’ corporate benefits, and you won’t want to 21
duplicate coverage. 22
If your business is really small, you might consider giving 23
each employee a fixed amount of money each month that 24
they can use to buy a particular benefit. A single person may 25
want dental insurance, but a young mother might prefer that 26
you help her pay for child care. Another employee might 27
want legal insurance if they have legal problems relating to 28
property or investments. 29
There is a wide array of insurance benefits and programs 30
available to employers. One option is to hire a benefits con- 31
sultant to tailor what is called a “cafeteria” program of bene- 32
fits to your employees’ needs. You’ll also need professional 33
help to figure out whether to pay for employee benefits with 34
pre-tax or after-tax dollars. 35
Basically, as long as you spend the same amount of 36
money on each employee, you’ll stay out of trouble. Even 37
$150 a month goes a long way toward buying one single 38
person’s coverage in a health maintenance organization 39
1 (HMO) or other group insurance program.
2 Remember, some of the best benefits you can offer employ-
3 ees may not cost you much money at all. Flexible scheduling is
4 one of the ways small business owners can retain good work-
5 ers and boost morale. It doesn’t cost you any more money to
6 stagger work hours to fit your employees’ needs.

7 If some people really want to be home when their chil-
8 dren get home from school, why not let them work from
9 6 AM to 2 PM? This works especially well if you are a West
10 Coast company dealing with East Coast clients. Job-sharing
11 is another perk to consider. Often two working mothers or
12 fathers will ask to split a job and split the benefits that go
13 with that job.
14 When you think about benefits, don’t just think about
15 insurance. Think of ways to address your employees’ specific
16 needs; chances are, they will serve your business better in
17 the long run.
18
19 Offer Classes in English
20
21
244
as aSecond Language
PEOPLE
22 G R E AT it’s no surprise to me that two of the

23 nation’s most successful entrepreneurs offer free,
24 144 onsite English as a second language (ESL) classes to
25 I D E A employees.
26 David Giuliani, president of the Optiva Corp., and the
27 Small Business Administration’s 1997 Small Business
28 Person of the Year, faced a major challenge at his fast-grow-
29 ing toothbrush company. Employees at the Bellevue, Wash-
30 ington, firm speak fifteen different languages, so Optiva,
31 which makes Sonicare toothbrushes, decided to host free
32 lunchtime English classes. “Taking good care of employees
33 is required for good business,” said Giuliani.
34 Through the years, scores of employees have taken advan-
35 tage of the free classes. Their improved English skills lead to
36 improved productivity and better communication through-
37 out the company.
38 Marsha Serlin, president of United Scrap in Chicago, also
39 provides onsite ESL classes to the mostly Spanish-speaking
workers at her recycling business. Serlin said she benefits 1
from a skilled, English-speaking workforce. “Many of my 2
workers, who started here with nothing a few years ago, are 3
now able to buy their own homes,” she said. 4
If you think your multilingual workforce would benefit 5
from ESL classes, call your local community college or con- 6
tinuing education program to find out how much it will cost. 7
Teaching English to employees is a great way to invest in 8
your company’s future. 9
10
11
Find Out How Disney Does It 12
G R E AT no one is surprised when an entrepreneur 13
heads to Harvard, New York University, or USC for a 14
145 management training program, but eyebrows raise 15
I D E A when they sign up for a course at Walt Disney 16
World’s Disney Institute in Orlando, Florida. More than 17
60,000 people a year attend these classes, which offer a 18
behind-the-scenes look at the Disney management philoso- 19
phy. In the past five years, small business owners with fewer 245 20
than fifty employees represented 44 percent of attendees, say 21
Disney officials. 22
“Walt Disney was probably one of the premier entrepre- 23
neurs of all time,” said Valerie Oberle, former vice president 24
of Disney University Professional Development Programs. 25
In fact, Disney’s company was started in a garage, with next 26
to no capital. 27
Oberle said Disney began sharing its management philos- 28
ophy eleven years ago, after the company was profiled in 29
Tom Peters’ In Search of Excellence (Warner Books; 1988). 30
From that point on, she said, business owners and managers 31
were eager to find out how Disney managed the 40,000 peo- 32
ple in its Florida parks alone. People pay about $2,500 to 33
attend a three-and-a-half-day course in leadership, people 34
management, orientation design, and quality service. Disney 35
characters are heavily used throughout the course. 36
“Before the Disney course, we hired people if they were 37
breathing,” said Michael Collands, chief executive officer of 38
Perfect Response, a customer service company based in 39
1 Willoughby, Ohio. “Now we screen thoroughly.”
2 Collands, who also has an office in San Diego County, has
3 taken three Disney courses so far. His company, which helps
4 auto dealers improve customer service, once had a tough
5 time recruiting and retaining good employees. Based on
6 what he learned at Disney, Collands now requires all job can-

7 didates to read a company newsletter before they are handed
8 a job application. After reading about company policies and
9 requirements, Collands said 15 percent leave without apply-
10 ing. Those who are eventually hired go through an intense
11 one-and-a-half-day orientation.
12 “Our morale is up 2,000 percent,” said Collands. “Every-
13 one has pulled together. Before, employees took my ideas
14 and executed them if I stood over them; now they take my
15 great ideas and make them ten times better.”
16 Collands, who has thirty employees and annual sales of
17 about $3 million, said he registered for the Disney program
18 instead of a university course because all of the Disney
19 employees he’s met seem happy. “Most people will tell you
20 246 what their job is when you ask them, but when you ask Dis-
21 ney employees, there’s a twinkle in their eyes,” he said.
PEOPLE
22 Lamar Berry, chairman of New Orleans–based Interna-

23 tional Marketing Systems, says he sends hundreds of clients
24 a year to Disney University. Berry also works with Disney U.
25 officials to develop special programs for his clients.
26 “There is a tremendous benefit to going to an icon and see-
27 ing how that culture is maintained,” said Berry. He said it’s
28 easy for his clients to adapt Disney’s culture to their business-
29 es in other industries, including hospitals and oil companies.
30 Bob Van Dyk, chief executive officer of Van Dyk Health
31 Care Inc. in Ridgewood, New Jersey, said he first attended a
32 Disney program when he was working for a large, nonprofit
33 health care company. He said he liked the way Disney
34 employees feel “like a big family.” “After hearing about Dis-
35 ney’s approach to management, I realized how applicable it
36 was to my own business,” said Van Dyk, who has attended
37 three Disney programs.
38 Since then, he’s gone out on his own to operate two nurs-
39 ing homes with 220 employees and sales of $9 million.
To learn more about the Disney Institute, call 407- 1
566-2629 or visit their website: www.disneyinstitute.com. 2
Other entrepreneurial management programs to con- 3
sider: 4
◆ Harvard Business School’s Owner/President Manage- 5
ment Program. This nine-week, full-time residential pro- 6
gram consists of three three-week segments. 7
Participants take one session a year for three years. The 8
fee is $17,750 per session. Harvard Business School 9
spokesman Jim Aisner said about 2,400 people have gone 10
through the program in recent years. 11
For information, contact the Harvard Business School at 12
800-HBS-5577; e-mail to executive_education@hbs.edu; or 13
visit Harvard’s website: www.exed.hbs.edu/. 14
◆ New York University, Stern School of Business: Execu- 15
tive Development Programs. For information, write to 16
Stern School of Business, 44 West 4th St., Suite 10-66, New 17
York, NY 10012; call 212-998-0789; or visit their website: 18
www.stern.nyu.edu/executive. 19
◆ University of Southern California Marshall School of 247 20
Business, Executive Development. For information, check 21
out www.marshall.usc.edu/execdev. 22
◆ University of California, Los Angeles. For information, 23
write to UCLA Management Development Program, 110 24
Westwood Plaza, Suite C-305, Los Angeles, CA 90095. 25
26
27
AskGood Clients to Meet KeyHires 28
G R E AT
when it comes to hiring key employees like 29
a new sales or account manager, marketing chief, 30
146 graphic designer, or executive assistant, it makes 31
I D E A sense to go that extra step. Introduce your top candi- 32
dates to the clients they will work with if they get the job. 33
This serves several important purposes. First of all, it gives 34
the prospective employee an opportunity to meet your most 35
important clients. It emphasizes the client relationship by 36
involving them in the hiring process. It also gives you the 37
benefit of another expert opinion on your candidate. 38
Don’t make a big deal about the meeting. Be clear that it’s 39
1 an informal thing. You just want to drop by with your candi-
2 date to give everyone the chance to chat. Try to leave them
3 alone for a few minutes so they have time for a short conver-
4 sation. Give them time to form an impression of each other.
5 You should realize that there are small risks involved with
6 this courtesy call. If your client feels negative about the per-
7 son, and you end up hiring him or her, the new employee
8 will have to work extra-hard to build the relationship. On the
9 flip side, if your client is very impressed, you might risk los-
10 ing that person to the client at some point. But I believe the
11 risks are worth it.
12 When I was looking for a new research associate, I
13 planned to introduce the top candidate to my then biggest
14 client, my colleagues at Bloomberg Television. But, as it
15 turned out, they had already met, as she had previously
16 interned at Bloomberg.
17 Because of that, I was able to judge the quality of her work
18 firsthand. It worked out well for everyone. They benefited
19 from her familiarity with Bloomberg and her expertise in
20 248 scouting locations and helping to produce segments for our
21 small business show.
PEOPLE
22 So, consider the benefits of introducing top job candidates

23 to important clients. It will add considerably to your peace of
24 mind when you are ready to make that job offer.
25
26
27
Work with a Great Labor Attorney
28 G R E AT “you will be assaulted, abused, or sued by
29 an employee; it’s only a question of when and how,”
30 147 declares Robert Millman, a feisty labor attorney and
31 I D E A partner at Littler Mendelson in Los Angeles. “Small
32 business owners, in particular, are being hit very hard by
33 employment laws, even if they only have five employees,”
34 said Millman, who has been defending and protecting com-
35 panies from their angry, derisive employees for more than
36 twenty years.
37 Business owners eagerly buy liability insurance to pro-
38 tect themselves from fires and floods, yet they don’t spend
39 time or money getting up to speed on employment laws.
“The most dangerous thing you face in your small busi- 1
ness is not a fire or your truck driver wiping out a family of 2
six,” he said. “The most dangerous thing is one of your 3
employees suing you.” 4
Although an employment liability insurance policy can 5
prevent a lengthy legal battle from bankrupting your firm, 6
you usually don’t get to choose your own lawyers to repre- 7
sent you. And the policy may not cover all costs. 8
Millman said far too many small business owners get ter- 9
rible legal advice and end up spending $500,000 on a case 10
that should have settled for $10,000. Most of the time the 11
bad advice comes from attorneys who want to run up their 12
bills. Millman avoids this by charging clients a flat fee for 13
handling some of the most challenging matters. 14
His firm, with 350 people and offices around the country, 15
has been a pioneer in training and education for employers. 16
He said the scariest issue is workplace violence because you 17
are liable if someone hurts or kills someone else at your 18
business. 19
“There are so many telltale signs,” said Millman, adding 249 20
that good employees rarely show up one day for work and 21
go berserk. There is always a pattern of negative behavior 22
and clear signals that employers must learn to spot. “A 23
company is going to face severe liability if someone is 24
sending out signals, and they don’t do something about it,” 25
warned Millman. 26
His firm offers a variety of reports and materials on how 27
to do employee background checks, write legal employment 28
contracts, and conduct disciplinary investigations. They also 29
publish national and state-by-state reference guides on 30
employment law. 31
Littler Mendelson also created “Winning through Preven- 32
tion,” a $99 board game made by the makers of Trivial Pur- 33
suit™, which helps employers learn how to avoid personnel 34
land mines. 35
For a list of related products and their prices, write to 36
Littler Mendelson, P.O. Box 45547, San Francisco, CA 94145- 37
0547. 38
39
1
2
Hire an Interim Executive
3 G R E AT
big and small businesses are turning to
4 temporary executives more and more to fill important
5 148 positions. While the number of traditional clerical
6 I D E A temps is declining, the professional and technical

7 segment of the temporary staffing industry is growing by
8 about 5 percent a year, industry experts say. In 1999 profes-
9 sionals represented about 25 percent of the total interim
10 workforce.
11 “With temporary staffing, you get a level of executive you
12 may not be able to afford long-term,” said a spokesman for
13 the Alexandria, Virginia–based National Association of Tem-
14 porary and Staffing Services (NATSS). Temporary staffing
15 companies provide small businesses with skilled executives
16 they probably couldn’t attract, screen, or hire on their own.
17 Another benefit: The staffing company handles all the
18 employee-related paperwork, benefits, and payroll taxes.
19 With thousands of skilled executives tossed into the labor
20 250 pool by downsizing, executive temps often have between
21 fifteen and thirty years’ experience in their industry to offer
PEOPLE
22 your firm. “Small businesses may want a professional with

23 very specific skills or experience—a financial strategist, a
24 marketing consultant, or someone who has taken a company
25 public,” said Marilou Myrick, president and CEO of ProRe-
26 source Inc., a staffing company in Cleveland, Ohio. Myrick
27 said her clients are usually billed between $1,500 and $2,500
28 for a week’s worth of service by one of her temporary execu-
29 tives or professionals.
30 Jean Ban, executive vice president at Chicago-based
31 Paladin Inc., said, “our temps are highly focused, flexible peo-
32 ple who can hit the ground running.” Paladin Inc. sets itself
33 apart by placing high-level creative temps, specialists in pub-
34 lic relations, marketing, and communications. After intense
35 interviews and reference checks, the company has built a pool
36 of 5,000 “flex execs.” When a client puts in a request, Paladin
37 sends along two or three candidates who fit the bill. Then the
38 client chooses the best person for the job and often pays up to
39 $200 an hour for the executive’s expertise.
1
2
Is an interim executive right 3
for you? 4
5
INTERIM EXECUTIVES work best for companies in tran- 6
sition. If your business is growing or shrinking, relocating or 7
launching a new product line, you may want to hire a high- 8
level executive on a short-term basis. Here are some things 9
to consider: 10
◆ What duties and responsibilities can I turn over to a 11
hired gun? 12
◆ Will hiring a temporary executive make my life easier 13
and free me to do more important work? 14
◆ What specific skills should the interim executive have? 15
◆ Can I find an agency that specializes in finding interim 16
executives for my industry? 17
◆ What is my budget for hiring an interim executive? 18
◆ Will I be able to check the candidate’s references? 19
◆ Does the work I need have a beginning, middle, and end? 251 20
◆ What kind of a contract will I have to sign to hire this 21
person? 22
23
Finding the right short-term help isn’t cheap. Executive 24
staffing companies take a significant cut for themselves— 25
as much as 30 percent of billings go to the matchmaking 26
service. They are the employers of record; they pay the 27
employer’s contribution to FICA and Medicare and provide 28
state and federal unemployment insurance coverage. 29
When the home health care agency director at Mindy 30
Jacobsen’s Idaho hospital said she’d be taking a six-month 31
leave of absence, Jacobsen needed someone with special 32
skills to supervise the agency’s forty employees on a 33
short-term basis. 34
Jacobsen, chief operating and chief clinical officer at 35
Columbia West Valley Medical Center in Caldwell, Idaho, 36
called Healthcare Concepts in Memphis, Tennessee, a com- 37
pany specializing in short-term, high-level temps. Within a 38
few months, Jacobsen had located an interim director who 39
1 filled in for the missing director until she returned.
2 It’s very important to prepare your permanent staff before
3 the arrival of a new temporary manager or director. Jacobsen
4 met with her employees to fill them in. “I told them she
5 would provide them with support and guidance, and I
6 assured them it was a temporary arrangement.”

7 There are quite a few challenges to stepping into a com-
8 pany at a top level. Janet Sodaro, a Paladin associate with
9 expertise as a marketing manager, was hired to help an
10 insurance company launch a new product. A three-month
11 stint turned into two years, during which she orchestrated a
12 four million-piece direct mail program.
13 “Because I’m not really staff but I’m not a consultant,
14 either, I have to know when to let go of certain issues and
15 when to press on others,” said Sodaro. Her presence in the
16 company freed up permanent employees to think about
17 long-term strategy while she managed the marketing cam-
18 paign.
19
20
21
252
Offer toTrainYour Employees
PEOPLE
22 G R E AT spending on training and education pays

23 off big for you and your employees. For a modest
24 149 sum, your employees can learn a new skill, build con-
25 I D E A fidence, and boost productivity. Subsequently, you
26 and your business benefit from happier, healthier, and more
27 energetic workers.
28 Ask your employees what skills they would like to learn or
29 develop. If you are doing business globally, maybe they
30 would like to study a foreign language or brush up their con-
31 versational skills for a language they already know.
32 Maybe taking a weekly yoga or tai chi class would relieve
33 stress. Learning a new graphic design or financial spread-
34 sheet program might make their life easier.
35 Assign someone on your staff to collect catalogs,
36 brochures, and class schedules from local community col-
37 leges, extension programs, the Learning Annex, Learning
38 Tree University, and other adult education programs in
39 your area.
Figure out how much you want to spend on a quarterly, 1
semiannual, and annual basis. If money is tight, you might 2
provide a one-time $100 bonus to pay for books and mate- 3
rials. Or if you can afford it, reward your key managers 4
with a day-long seminar of their choice. Many seminars 5
cost under $300. 6
Once you’ve decided to offer training as a perk, be fair, 7
and don’t play favorites. You can establish a policy making 8
these educational perks available only after six months or a 9
year of service. Be sure to keep track of who is taking which 10
classes and encourage people to share their experiences and 11
knowledge with coworkers. 12
An alternative to sending workers offsite for educational 13
programs is to hire your own trainers. Another option is to 14
hire a trainer and split the cost with other small business 15
owners whose employees also need training. 16
Finally, take advantage of your state’s extensive and afford- 17
able community college system. For just a few dollars a 18
course, your employees will learn valuable skills that they 19
will bring to work every day. 253 20
21
22
Offer Employees the Right Incentives 23
G R E AT if you think glitzy trips to atlantic city or 24
Las Vegas are great sales motivators for your employ- 25
150 ees, think again. When offered the choice between a 26
I D E A trip or money, 44 percent of the employees polled 27
preferred the financial reward, while 39 percent said they 28
would take a trip by themselves or with a family member. 29
Only 5 percent would choose to take a trip with coworkers, 30
according to a survey commissioned by American Express 31
Gift Cheques, Amex’s gift certificate division. 32
A $50 gift certificate is preferred by a four-to-one margin 33
over any other type of monetary appreciation, the survey also 34
found. Only 14 percent of respondents preferred $50 worth 35
of tickets to a concert, show, or sporting event, and fewer 36
than one in ten wanted to be treated to a lunch worth $50. 37
But cash rewards, in the long run, may not be enough to 38
keep employees satisfied. 39
1 “Money is a powerful incentive, but it has its limitations if
2 it’s the only incentive,” said Dr. Barrie Greiff, a psychiatrist
3 consultant at Harvard University Health Services in Cam-
4 bridge, Massachusetts, who consults with big and small
5 companies. “You have to make sure there are more than eco-
6 nomic rewards and that people are challenged,” Greiff said,

7 adding that if you do decide to give a monetary reward, try a
8 gift certificate, because cash is “just spent at the supermar-
9 ket.” Greiff said taking time to express your appreciation for
10 a job well done means a lot more than money to many
11 employees.
12 He said too many employers are reluctant to express their
13 feelings to employees, whether they are positive or negative.
14 “It takes a certain degree of skill and candidness—and
15 people are uncomfortable being candid,” said Greiff.
16 “You want to create a profile of incentives,” said Greiff.
17 “You want to give employees an interesting work environ-
18 ment, a talented team, opportunities to stretch and grow, and
19 adequate vacation time.”
20 254 He said it’s important to take time to really think about
21 business relationships and ways to improve communica-
PEOPLE
22 tion. “You have to maintain the pulse of the organization,”

23 he advises. He said one of his clients was in shock after los-
24 ing four key employees at his twelve-person firm. They quit
25 and took the client list because they felt they could do a bet-
26 ter job serving clients themselves. The owner was disheart-
27 ened, but decided not to take legal action and, instead, just
28 pick up the pieces.
29 He favors what he calls “360-degree communication.”
30 Twice a year, you should evaluate employees and let them
31 evaluate you as the boss (see Great Idea 31). “If the ultimate
32 goal is to improve the performance of the company, then
33 feedback is a valuable tool,” Greiff said.
34
35
36
37
38
39
1
Deal Carefully with Issues 2
3
of Workplace Violence 4
G R E AT what would you do if your sales manager 5
walked into work one morning with a black eye? 6
151 What do you say when your secretary shows up with 7
I D E A a split lip and puffy, swollen eyes? Do you ask what 8
happened? Do you pretend nothing is wrong? 9
A battered employee is impossible to ignore. No one likes 10
to invade an employee’s privacy, but too often domestic vio- 11
lence adversely affects you and your business. Smaller busi- 12
nesses, which usually operate more like a close-knit family, 13
are profoundly affected when an employee is in trouble. 14
Chances are that at some point, you will experience the 15
devastating effects of domestic violence. Every year, about 16
one million women are attacked by someone they know. And 17
according to a report by the U.S. Department of Labor’s 18
Women’s Bureaus, battered women can’t help bringing their 19
problems with them to the office. 255 20
A recent study of women who are victims of domestic vio- 21
lence found that 96 percent experienced some problems at 22
work. More than 60 percent were late for work; 70 percent 23
reported having a tough time concentrating on their tasks. A 24
distracted or unmotivated employee poses a personnel prob- 25
lem, but a battered and emotionally overwrought employee 26
can turn into an emotional and financial disaster. 27
While corporations have formal employee assistance pro- 28
grams, small business owners, who can’t even afford basic 29
insurance benefits, rarely have such programs in place. In 30
fact, only 15 percent of small businesses offer some sort of 31
employee assistance program, according to the Bureau of 32
Labor Statistics. But you obviously have to do something 33
when an injured or emotionally upset employee appears at 34
your office door. 35
The first step may be to provide basic medical attention at 36
a local clinic. Referring the employee to a social service 37
agency that provides counseling on a sliding-scale basis may 38
also be a short-term solution. As an employer, you have to be 39
1 careful not to cross the line and demand the details, but
2 being truly compassionate rarely gets anyone in trouble. In
3 many cases, a battered spouse only feels safe at work, so your
4 place of business becomes her only haven.
5 Troubled employees rarely leave their problems at home.
6 You may have to deal with coworkers’ fear and be forced to

7 increase security. If coworkers are afraid of the batterer, it
8 can turn into a sensitive companywide problem, especially
9 if people know the husband or boyfriend. (Most domestic
10 violence cases involve men battering women, but there are
11 definitely women who physically abuse their husbands—
12 and lovers.)
13 In California, employers can seek a temporary restraining
14 order on behalf of an employee if the person has been threat-
15 ened with violence that could take place at work. This provi-
16 sion, in a piece of pioneering legislation, is part of the Work-
17 place Violence Safety Act. Make sure you know what laws
18 apply in your state.
19 If domestic violence is affecting your business, don’t be
20 256 an ostrich—deal with it.
21 Here are some of the many resources available to help:
PEOPLE
22 ◆ You can contact the National Workplace Resource Center

23 on Domestic Violence in San Francisco, 383 Rhode Island
24 St., Suite 304, San Francisco, CA 94103-5133; 415-252-
25 8900.
26 ◆ The U.S. Department of Justice has a special office set up to
27 deal with violence against women: Violence against Women
28 Office, Room 5302, 10th & Constitution Ave., NW, Washing-
29 ton, DC 20530.
30 ◆ The Occupational Safety and Health Administration (OSHA)
31 also deals with workplace violence of all kinds.
32 ◆ The NOW Legal Defense and Education Fund is another
33 resource for employers, located at 99 Hudson St., New York,
34 NY 10013; 212-925-6635.
35 ◆ A twenty-four-hour, toll-free national domestic violence hot-
36 line (800-799-SAFE) provides counseling and referrals to a
37 variety of services including medical care and shelters.
38
39
1
TakeYour Sexual Harassment 2
3
Policy Seriously 4
G R E AT in june 1997, a federal jury awarded $6.6 5
million to a woman who was subjected to regular sex- 6
152 ual taunts from her coworkers at a car dealership. 7
I D E A Sexual harassment is serious business. That’s why 8
even the smallest company should have a written policy in 9
place, according to Lawrence Rogak, an Oceanside, New 10
York, attorney who specializes in the subject. According to 11
federal regulations, a company is responsible for sexual 12
harassment in the workplace “where the employer (or its 13
agents or supervisory employees) knows or should have 14
known of the conduct.” 15
If you think telling sexual jokes or touching employees is 16
funny, it’s not. Of all working women, 40 to 60 percent have 17
reported being subjected to some sort of sexual harassment 18
on the job, according to the American Psychological Associa- 19
tion. Complaints from men or women on your payroll 257 20
should never be taken lightly. The last thing you need is an 21
expensive and time-consuming lawsuit. 22
Here are some tips from Rogak and others: 23
◆ Draft and distribute a clear policy prohibiting sexual harass- 24
ment at your company. Ask employees to acknowledge in 25
writing that they have received and read it and understand 26
the ramifications of violating it. 27
◆ Document any sexual harassment complaints in writing. 28
Create a paper trail that contains details of the alleged event. 29
◆ Question any witnesses to the alleged event and document 30
their account. 31
◆ Consult an experienced attorney if your employee threatens to 32
file a formal complaint. 33
◆ Remember, under federal law, an employer is automatically 34
liable for an employee’s behavior in the workplace, unless you 35
can prove that you wrote and distributed a policy prohibiting 36
sexual harassment. 37
38
39
1
2
Relyon Temps or Leased Workers
3 G R E AT finding skilled workers is a small business
4 owner’s nightmare. Talented people, especially in
5 153 the high-tech arena, are fielding multiple job
6 I D E A offers. In a seller’s market, top people demand

7 high salaries, incredible benefits, and perks. Big compa-
8 nies can afford to woo them, but what can you do to com-
9 pete for talent?
10 Don’t despair. There are millions of terrific people who,
11 for one reason or another, prefer to work for a variety of
12 firms. So they register with temporary agencies or employee
13 leasing firms. Temping also has a strong appeal to people
14 who are between jobs or people who just need a fresh start
15 after a bad work experience, maternity leave, or a move
16 across country.
17 In 2001, we were blessed with a terrific temp. Sibyl
18 worked as our office administrator and coordinator for the
19 “Back on Track America™” campaign while waiting to get
20 258 into medical school.
21 Unlike the strictly clerical or secretarial agencies of the
PEOPLE
22 past, modern temp agencies attract top talent and frequently

23 specialize in specific industries. There are agencies that
24 place accountants, software engineers, marketing execu-
25 tives, construction managers, graphic designers, and med-
26 ical doctors.
27 No matter what kind of work you require, you can find a
28 temporary worker to fit the bill. The greatest advantage to
29 hiring a temp is that because they are on someone else’s
30 payroll, you don’t have to worry about benefits or payroll
31 taxes. If the person doesn’t work out, you just call the
32 agency and they quickly disappear. The best agencies will
33 replace problem workers on the same day if you call early
34 enough in the morning.
35 Olsten, Manpower, Kelly Services, and Adia are among
36 the best-known staffing companies. In fact, Manpower
37 ranked number one in 1996 with $7.5 billion in world-
38 wide sales.
39 If you can’t find what you need locally or by referral, you
can contact Staffing Industry Analysts, a research group that 1
tracks the industry: 881 Fremont Ave., Suite A3, Los Altos, 2
CA 94024; 650-948-9303. Or check out their website: 3
www.sireport.com. 4
Another alternative is leased workers. Leased workers are 5
hired with a more permanent situation in mind. It works 6
like this: You sign an agreement with an employee leasing 7
company and pay a fee, which is usually a percentage of the 8
total payroll. The leasing company then hires the kind of 9
people you need, puts them on their payroll, and “leases” 10
them back to you. 11
One advantage of leasing is that most of the time-consum- 12
ing personnel and administrative aspects of staffing are han- 13
dled by the leasing company. Another great thing about leas- 14
ing is that you can easily convert your existing employees to 15
leased workers if you are tired of dealing with all the paper- 16
work. “A client company has the flexibility to lease all or a 17
portion of their work force, even top management,” accord- 18
ing to a brochure from Personnel Coordinators in Fair Lawn, 19
New Jersey. 259 20
Companies like Personnel Coordinators can take care of 21
everything from filing payroll tax reports to setting up 22
direct deposit for checks, pension plans, credit unions, 23
and employee reward programs. They also perform back- 24
ground checks on applicants, comply with all state and 25
federal hiring regulations, and legally terminate problem 26
employees. 27
The Department of Health and Human Services estimates 28
the average manager spends about 15 percent of his or her 29
time on employee-related administrative tasks. If you can 30
think of better ways to spend your time and are tired of deal- 31
ing with the hassles of hiring and firing people, look into 32
employee leasing. 33
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Consider Hiring Remote Workers
3 G R E AT
lloyd henry, founder and president of
4 Biotech Marketing Inc., which buys and sells used
5 154 and refurbished hospital equipment, prefers to hire
6 I D E A salespeople without meeting them. “The important

7 thing to me is that the person relates well on a personal basis
8 over the phone,” said Henry. “Often I’m more convinced by
9 what I hear than what I see. After five or six phone conversa-
10 tions, you can tell what people are made of.”
11 That’s good, because Henry rarely ever sees his employ-
12 ees, except for his wife, Anita, who handles marketing and
13 customer service from their company headquarters based
14 in their Margate, Florida, home. The company relies on
15 independent sales reps in Atlanta, Denver, Indianapolis,
16 and Los Angeles.
17 Henry has grown his business despite the lack of in-per-
18 son contact with his colleagues. “Many of our customers are
19 rural hospitals, so the bulk of sales work is done over the
20 260 phone, anyway,” says Henry. “One customer is located eighty
21 miles from the nearest McDonald’s.”
PEOPLE
22 Managing remote employees is fast becoming one of the

23 true business art forms. And it will continue as skilled work-
24 ers demand flexibility and mobility.
25 Finding responsible and motivated remote workers is eas-
26 ier than you think. Corporate downsizing has left hundreds
27 of thousands of middle-aged, tech-savvy professionals look-
28 ing for new ways to work and live. Many of them are reluc-
29 tant to relocate for family reasons and are looking for high-
30 level, home-based job opportunities.
31 “After the many years of corporate layoffs, a lot of people
32 are finding the best way to excel is to work on their own
33 terms,” said Tom Miller, vice president of research at the
34 Emerging Technologies Research Group in Ithaca, New
35 York, which studies the impact of technology and work on
36 culture. “Many of these people are tempted by the ease of
37 computer networking to break out of the corporate rat race
38 and consult. From a management perspective, the key is to
39 find people who are good self-starters,” Miller said.
1
How to find remote workers 2
3
FINDING GOOD PEOPLE at a distance isn’t easy, but it can 4
be done. You’ll have to set up a system to interview and 5
screen candidates online and on the telephone. Consider 6
placing help wanted ads in the newspapers serving the cities 7
where you want to do business, as well as placing ads online. 8
Below are some other ideas on getting started: 9
◆ Create a simple application form that you can email to 10
candidates. Be sure to leave space for references and ask 11
for full contact information. 12
◆ Send the candidate detailed information about your com- 13
pany’s products and services. Ask them to prepare a sam- 14
ple sales letter or pitch for your review. 15
◆ If the candidate appears qualified, set up a half-hour tele- 16
phone interview. Look for people with good telephone 17
skills and a pleasant speaking voice; keep in mind that 18
they will represent your company. 19
◆ Set up a probationary period before you make any long- 261 20
term commitments. Clarify in writing the terms of their 21
contract, sales commissions, return of unsold merchan- 22
dise, and any other issues. 23
◆ If you want to leave the screening process to profession- 24
als, consider retaining a national employment agency that 25
can find workers anywhere in the country. 26
27
Entrepreneurs like Lloyd Henry are hungry to hire mature 28
and independent self-starters. But putting together a virtual 29
team is not as easy as it sounds. 30
“We’ve had a few personnel changes,” said Henry, who 31
started the business after burning out as a financial consul- 32
tant who spent months on the road. “Some of our people 33
just couldn’t keep up with the learning curve and didn’t pan 34
out. All were laid off by larger organizations and didn’t real- 35
ize that working remotely takes a tremendous amount of 36
discipline.” 37
More difficult than managing remote employees is man- 38
aging some of his hospital customers’ expectations. “They’re 39
1 used to salespeople coming around to take them out to
2 lunch,” said Henry. “We don’t do that, but we do provide a
3 much higher level of service. We can have an engineer on
4 the phone in a minute.”
5 For all the media coverage on sophisticated technology,
6 the plain old telephone—with its host of services—is the

7 backbone of Biotech Marketing’s infrastructure. A toll-free
8 800 number is answered at the Margate headquarters. Con-
9 ference calls between the field representative, customer, or
10 vendor, and the headquarters are common. All his people
11 can forward calls to one another; they can also patch another
12 rep into a call when needed. The company’s monthly phone
13 bill averages $3,000 to $4,000.
14 Henry generates price quotes and faxes or e-mails them
15 to field reps. The reps all have personal computers and color
16 printers to create sales presentations.
17 It’s a plain-vanilla setup with the advantages of a quick
18 start-up, a short learning curve for employees, and no need
19 for a high-tech network manager or Internet guru.
20 262 Still, Henry admits his remote workers miss “the
21 water-cooler interaction.” But his secret of success is “hiring
PEOPLE
22 professional, mature people.”

23 “We’re all forty-five years old or older. We’ve been
24 through the rat race. Now we’re at a point in our lives
25 where we want to look at the quality of life. Our associate
26 in Denver, for instance, loves to ski. There’s no reason he
27 can’t work thousands of miles from our main office here in
28 Florida.”
29
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Tips forRecruiting Executives
32 G R E AT gregory h. wingfield, president of the
33 Greater Richmond Partnership Inc., suggests the
34 155 following guidelines for recruiting small business
35 I D E A executives:
36 ◆ Make certain the executive is not a dyed-in-the-wool
37 corporate player. Those spoiled by the trappings of a huge
38 support staff and a battalion of secretaries may resent having
39 to roll up their sleeves and write a marketing plan.
◆ Look for decisive individuals capable of making choices 1
without the support of blue-ribbon committees. The 2
bureaucratic gamesmanship that goes with the turf in a 3
giant corporation cannot be tolerated in smaller firms where 4
speed and agility are vital weapons. The owner’s top aide 5
must have the self-confidence to act. 6
◆ Seek those executives with an entrepreneurial flair. 7
Managers experienced in working for other small firms 8
may fit the bill. They are likely to have the right skills and 9
can withstand the economic pressures that are a way of life 10
in small companies. An ideal candidate will relish the 11
opportunity to net a large bonus while simultaneously 12
accepting the risk of no bonus at all. He or she must be a 13
bit of a gambler. 14
◆ Stop short of hiring former entrepreneurs on the 15
rebound from their own losing ventures. Most will want 16
to call all the shots and will seek to introduce the same man- 17
agement tactics that failed in the past. 18
◆ The best bet is to look for someone who is not looking for a 19
job. That way, you raise the odds of finding a winner. Come 263 20
up with a strong-enough salary and benefits package to lure 21
away a well-established executive presently contributing to 22
another firm. The last thing you want is for your company to 23
be a haven for those executives seeking any kind of work that 24
comes along. 25
◆ Be wary of the “small business is a family affair” syn- 26
drome. Although hiring brothers and sisters may be a kind 27
gesture, it should be done only if the individual is the most 28
qualified person for the job. 29
◆ Look for those who lead by example rather than by 30
force. The team effort is too important in small business 31
for the executive to alienate workers, prompting good 32
people to resign. It is a good idea to check references to 33
establish evidence of a solid track record in companies 34
like yours. 35
◆ Consider asking executive recruiters and business asso- 36
ciates for referrals. It’s important to use all of your con- 37
tacts to locate a pool of suitable candidates. 38
39
1
2
Send Flowers to an Employee’s Spouse
3 G R E AT being on the road away from home can be a
4 drag. But when you get to spend time with people
5 156 like Dr. Allan Weis, it’s worth the trip. Weis and I met
6 I D E A a few years ago when we were part of a traveling fac-

7 ulty hired by IBM to speak to entrepreneurs.
8 Weis, credited as one of the key developers of the techni-
9 cal backbone of the Internet, has founded several small,
10 high-tech companies. Through the years, he has learned how
11 to keep employees happy, especially when they are working
12 long hours on complex, technical projects.
13 One of his most inventive morale-boosters is to send a
14 bouquet of fresh flowers to the spouses of busy employees as
15 a special thank-you gesture. “I never send roses,” said Weis.
16 “That’s too emotional.” He said the flowers serve several pur-
17 poses: They cheer up the upset spouse and show his appreci-
18 ation for the extra effort put in by his staff.
19
20 264
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1
8
T ime is money” is a very old cliché, but
it’s still true. If you waste time, you waste money
and add major stress to your busy life.
Most successful entrepreneurs work incredibly
long hours. There are some people, though, who
manage to accomplish so much more than the rest
of us—and in less time. So what’s their secret?
They are relentless delegators. They let go of all
9 the things they know they don’t need to do
10 themselves, like answer the phone, open the mail,
11 and fill out FedEx forms. They have skilled support
12 people manage their schedules, deal with paper-
13 work, return phone calls, host nonessential staff
14 meetings, and make travel arrangements.
15 Savvy entrepreneurs take full advantage of voice
16 mail and e-mail. They leave long, detailed messages
17 and instructions late at night when they are sure no
18 one will answer the phone. They answer e-mail in
batches and don’t continually sign on to check 1
messages during the day when they should be 2
working on more important projects. 3
They have wonderful administrative assistants 4
who keep track of all the details that bog down busy 5
269
entrepreneurs. A good assistant screens calls, deals 6
with most requests for information, and knows 7
when to interrupt. A good assistant keeps the space 8
around you clear so you can concentrate on doing 9
the strategic work and making the money. 10
I admit, it took me years to learn not to 11
micromanage the details of projects I assigned to 12
my employees. By peering over shoulders and 13
second-guessing work, I was wasting both my time 14
and theirs. And, of course, doing that cost me 15
money in addition to hurting productivity and 16
morale. 17
I urge you to try the time-saving ideas in this 18

1 chapter. For instance, I use index cards to keep track of
2 daily tasks and calls. I rely on a Handspring Visor. It’s easi-
3 er to plan your schedule and keep track of big projects and
4 deadlines when you have the whole month on view in front
5 of you.
6 I work hard to maintain a schedule of “in days” and “out

7 days” (see Great Idea 160). When I’m in transit, I try to med-
8 itate and rest; I spend time considering larger issues rather
9 than engaging in busywork. I find it much too distracting to
10 concentrate on airplanes, especially in first or business class
11 where fellow passengers tend to talk very loudly on the
12 phone or to each other. Plus, as much as I love my IBM lap-
13 top, I don’t enjoy lugging it around airports.
14 Other time-savers to implement include returning phone
15 calls in batches and letting the voice mail take messages
16 when you’re alone in the office. I go through all the new
17 story pitches and mail once or twice a week, rather than
18 every day.
19 And I work at least part of one weekend day, so I can
20 270 spend evenings at home with my husband and children.
21 The following great ideas are meant to get you started on
TIME MANAGEMENT
22 a new path. For more detailed information, read any book by

23 Ruth Klein, Barbara Hemphill, Stephanie Culp, or Susan Sil-
24 ver. They are experts in this field, and their books will help
25 streamline your life.
26 As you’ll see from reading this chapter, I asked every
27 expert I know for great ideas that anyone can use, no matter
28 what kind of business you’re in. Your first challenge, right
29 now, is to make time to read them!
30
31
32
TakeThis Time-Management Quiz
33 G R E AT
marketing consultant ruth klein helps
34 clients manage their time, which of course then
35 157 allows them to work more effectively and make
36 I D E A more money. She sent along this provocative little
37 time-management quiz to help you determine how well you
38 organize your day. Spend a minute or two thinking about
39 your answers.
Which of these statements below are true in your life? 1
1 You send or receive more Federal Express mail than ordinary 2
C O P Y R I G H T © 1 9 9 7 T H E M A R K E T I N G S O U RC E
mail. 3
2 You bring an overflowing binder or briefcase with “stuff you 4
have to do” on a one- or two-day trip. 5
3 Your cell phone bill is half your office rent. 6
4 Most of your conversations begin with, “I’m sorry I didn’t get 7
back to you sooner, but….” 8
5 You dream about e-mail more than you dream about humans. 9
6 While on vacation, you spend more time around the fax 10
machine than around the pool. 11
12
If you agree with most of these statements, you need to 13
get a grip and get your life organized. For help, read on and 14
find more great ideas for better time management. 15
16
17
Get Organized—Right Now 18
G R E AT
every successful entrepreneur tries to be 19
well-organized in order to maximize every minute of 271 20
158 the day. If you believe getting organized is just for the 21
I D E A compulsively neat, add up the time you spend every 22
day hunting around for misplaced files or documents. You’ll 23
be shocked at how much time and money your messy desk 24
costs your business. 25
Hiring a professional organizer is one way to go, but be 26
prepared to pay between $50 and $150 an hour. It’s also not 27
that difficult to do it yourself. Start by reading Taming the 28
Paper Tiger at Work (Kiplinger Books; 1998), by Barbara 29
Hemphill. 30
Meanwhile, here are some things you can do to get 31
started right now: 32
1 Schedule a weekend or two to totally clean up your 33
office. If necessary, pay employees overtime to help you 34
tackle the mess. Get into the right mood by playing your 35
favorite music. Bring in plenty of snacks, soft drinks, clean- 36
ing supplies, and lots of big trash bags. 37
2 Take everything off your desk and set things on the 38
floor. Throw away any piece of paper that you haven’t 39
1 touched for a month. Next, go through your “in” basket and
2 distribute everything you can.
3 3 Scan through those stacks of magazines and newspa-
4 pers. Tear out articles that you absolutely must read. Recy-
5 cle the rest.
6 4 Clean out every file in your filing cabinets. Ask your

7 employees to do the same with their files, too. Be ruthless.
8 You don’t need paper copies of everything that is in your
9 computer as long as the files are properly backed up and
10 stored offsite.
11 5 Remember, your desk is work space, not an exhibit
12 area. Clear off all the plants, family pictures, toys, and
13 gadgets.
14 6 Once you’ve dumped the accumulated trash, figure out
15 what nifty supplies will help you stay organized. Every-
16 one has a different style of organization. Wander around a
17 big office-supply store. Do you like to see project files hang-
18 ing on the wall? Would colored files help you keep better
19 track of projects? Use filing cabinets for storage, not for
20 272 active projects.
21 7 Sort through your piles of business cards. Throw out the
TIME MANAGEMENT
22 ones you’ll never use. Then put the remaining ones in a

23 Rolodex file or a business card album, or scan them into a
24 business card database.
25 8 Buy a calendar that works for you. Keep one master cal-
26 endar for yourself. Multiple calendars create confusion. Do
27 you like one that shows the whole week, the whole month,
28 or each day individually? I use a book-sized calendar that
29 shows the entire month on two pages. When I’m traveling
30 or have a lot of appointments, I transfer my daily schedule
31 to an index card. Index cards are cheap and easy organizing
32 tools. Save the cards if you want a daily journal.
33 9 Once you’ve cleaned up your office, try to keep it neat
34 by avoiding the paper pile-up. Sort the mail into cate-
35 gories: bills, personal letters, marketing materials, and so on.
36 Throw out the junk mail right away. Put the bills in a file and
37 keep them in a safe place for check writing. Pass along as
38 much mail as you can to key employees. Write notes and
39 action steps right on the letters or information.
10 Try scheduling what I call “in days” and “out days” (see 1
Great Idea 160). Schedule back-to-back appointments for 2
your “out days” and stay out all day, if need be. But on your 3
“in days,” stay in and work hard. 4
11 Set aside an hour or two every day to return phone 5
calls. Take advantage of voice mail to leave after-hour mes- 6
sages. Don’t be afraid to let your assistant or your voice mail 7
pick up your phone. You’ll never get any work done if you 8
take every call that comes in. 9
12 Promise yourself that you’ll try to stay organized for at 10
least a month. Then take it one day at a time. 11
12
13
Hire a Personal Information Officer 14
G R E AT
the information superhighway leads to 15
information overload for many busy entrepreneurs. 16
159 With so much to do, it’s difficult to find the time 17
I D E A to keep up with all the websites, books, magazines, 18
and professional journals we know we should be reading. 19
One solution with multiple benefits is to ask your assis- 273 20
tant or a key staffer to serve as your “personal information 21
officer,” or PIO. 22
Your PIO benefits by being well informed and learning 23
about your world, while you save time by reading only the 24
material you absolutely must read. This system takes a lit- 25
tle time and planning, but it will save you many hours over 26
the long run. 27
First, decide which magazines, newspapers, and web- 28
sites provide valuable information and insights for your 29
particular business. If your daily newspapers are piling up 30
unread, get started by pulling out the business section and 31
recycling the rest. 32
If you don’t subscribe to your industry’s top trade journal, 33
subscribe right away. 34
Once you’ve made a “must-read” list of publications, 35
go online and use search engines to find the websites 36
that should be visited at least once a week (don’t forget to 37
include sbtv.com ). “Bookmark” these sites or put them in 38
“Favorites” so you can reach them quickly when you or 39
1 your assistant sign on.
2 Collect a stack of current publications and sit down with
3 your assistant to point out which articles are of particular
4 interest to you. Note which columns (including my weekly
5 newspaper column) you want clipped out every week.
6 Some people want their assistant to highlight key para-

7 graphs, as well.
8 Create a “To Read” file for the clippings or computer
9 printouts. Urge your PIO to be selective. You won’t be
10 saving much time if he or she clips dozens of articles
11 every week.
12 In addition to articles and editorials about your particu-
13 lar industry and those that affect your business, your PIO
14 should look for articles about the United States and world
15 economies, unemployment, and interest rates. These may
16 also be very helpful to your decision-making process.
17 While your PIO’s job is to fill up your “To Read” file, your
18 job is to empty it out at least once a week. Carry the file with
19 you and get into the habit of reading in line at the bank or
20 274 the movies or while riding the train, bus, or subway. Try
21 reading for a half hour in bed before you pick up the novel
TIME MANAGEMENT
22 you’re reading for pleasure.

23 I read in hotel lobbies and offices while waiting for
24 appointments. Once it becomes a habit, you’ll look for times
25 to do some quick reading.
26 If you prefer to listen to the news highlights, you might
27 want to contact the Newstrack Executive Tape Service in Pit-
28 man, New Jersey. Newstrack hires professional announcers
29 to record a variety of business columns clipped from publica-
30 tions around the United States. For information on New-
31 strack, call 800-334-5771.
32 The final step is deciding what to save and what to toss
33 out. Save only the articles you know you will refer to again
34 and discard the rest.
35 I have long contended that a lack of pertinent informa-
36 tion, rather than a lack of money, leads to business failure.
37 Uninformed business owners invariably make poor busi-
38 ness decisions.
39
1
Plan “In” Days and “Out” Days 2
G R E AT as my business flourished and my life 3
became busier and busier, I needed a better way to 4
160 structure my time. I came up with this plan when I 5
I D E A was working out of my home office in Sun Valley, 6
California. Sun Valley is a rural community about twenty-five 7
miles from downtown Los Angeles. Unfortunately, it’s not 8
easy to get from Sun Valley to anywhere in Los Angeles. 9
Because traffic is such a nightmare no matter when you trav- 10
el in L.A., setting up one appointment across town meant I 11
would be gone for most of the day. 12
I found that the best way to break up my week was to 13
schedule “in” days and “out” days. On my “in” days, I never 14
left the office, except maybe to drive someone to school or 15
run to the supermarket. I spent the day writing, returning 16
calls, working on project proposals, dealing with paperwork, 17
and basically digging out. 18
On my “out” days, I scheduled back-to-back appoint- 19
ments in one area. I would book a breakfast appointment, 275 20
an interview at lunch, a meeting, a trip to my acupunctur- 21
ist, and anything else I could squeeze in. I’d be gone from 22
very early in the morning until late into the evening, stay- 23
ing out as long as it took to complete my work. Halfway 24
through the day, I would check in with my assistant and 25
return calls. 26
I still use this system, although we live in New York now. 27
This plan is really effective, especially if you travel a lot and 28
need quiet time in your office between trips to accomplish 29
the work. 30
If you have a similarly hectic lifestyle, it might help you, 31
too, to organize your time and get more accomplished. 32
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Beat Your Deadlines
3 G R E AT janice gay, a freelance desktop publisher in
4 Florida, shared this great idea during a brainstorm-
5 161 ing session a few years ago. It’s simple but smart.
6 I D E A “I move my deadline up a few days earlier than the

7 date I quoted the client,” she said. “Then I meet my personal
8 deadline. The client is surprised and pleased that I turned
9 out a quality product ahead of schedule, and I always get
10 return business.”
11 This is a great idea because it sets you apart from the rest
12 of the business world, which is thick with folks who beg for
13 deadline extensions. Better yet, it exceeds your clients’ expec-
14 tations and costs you absolutely nothing.
15 I like to set internal and external deadlines for projects.
16 With so many different projects under way at one time, it
17 helps to stagger the deadlines so things are not all due at the
18 same time. Setting earlier deadlines also helps avert last-
19 minute disasters.
20 276 Moving the deadline up a few days gives you peace of
21 mind. If a computer crashes, the printer freaks, or someone
TIME MANAGEMENT
22 calls in sick, you won’t fall behind.

23 Making a promise and keeping it sounds so simple, but
24 too often, it’s the exception and not the rule.
25
26 Throw AwayYour Expensive
27
28
Time-Management System
29 G R E AT
i don’t know about you, but i have a collec-
30 tion of pricey organizers—all gathering dust. I hate
31 162 to throw them out because they are so darn expen-
32 I D E A sive. But I’ve tried them all: the big chunky note-
33 books, the planners, the runners, the memo managers—all
34 for naught.
35 They were too complicated for me to keep up with, and I
36 consider myself a pretty smart woman. I finally went back
37 to one of the oldest—and cheapest—organizing tricks, the
38 lowly index card.
39 Yep. A top corporate executive was the first person I saw
pull an index card out of his shirt pocket. Every morning, his 1
secretary handed him a card with the highlights of his day 2
neatly typed. It included addresses, phone numbers, and a 3
few details to remind him of what he had to say during 4
important meetings. “I save them for a few weeks as a 5
record, then I toss them out,” he confided. 6
Of course, you can save a year’s worth in a plastic recipe 7
box and have your whole year on record, if you insist. 8
I must admit, I’ve backslid through the years and spent 9
another few hundred bucks on organizers. I now use my 10
Handspring Visor, which I grudgingly accepted as a holi- 11
day gift. 12
Try using index cards for a few weeks and see if you aren’t 13
ready to toss out that heavy, expensive leather notebook you 14
lug around. 15
16
Follow These Five Quick 17
18
Time-Management Tips 19
G R E AT
time-management guru peter gordon 277 20
offered these five tips; I knew I had to pass them 21
163 along to you. 22
I D E A 23
24
1 Start with the big picture. Ask yourself what you want 25
to accomplish, where you are trying to go, and what the 26
most important things are for you to do. “This type of clear 27
thinking will give you a solid foundation for goal setting, 28
prioritizing, and establishing a clear sense of direction,” 29
said Gordon. 30
2 Use one planning and organizing system. “Consolidate 31
your various calendars, schedules, and to-do lists into a sin- 32
gle planning system. Eliminate those floating notes and 33
scraps of paper,” said Gordon. “Integrate phone numbers 34
into your system for quick reference.” 35
3 Invest the time to plan each day. “Review and prioritize 36
your to-do list, blocking out time for the most important 37
tasks,” said Gordon. He suggests choosing the most “dis- 38
tract-free” time to do your daily planning. 39
1 4 Make appointments with yourself. Schedule time to do
2 certain mundane tasks, especially ones you don’t like to do.
3 Gordon says this is a great way to avoid procrastination and
4 just get them finished.
5 5 Batch the little things. When it comes to going through
6 your “in” basket, answering e-mail, or filing, do it all togeth-

7 er, advises Gordon. “For maximum efficiency, batch tasks
8 together and handle them all at once, whenever possible.”
9 Getting yourself more organized seems like a daunting
10 task, but once you do it, it will change your life.
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39
1
8
I admit that i am no high-tech guru,
but any book full of great ideas has to include vital
tips on making the most of affordable equipment
and technology. Even the worst technophobe has to
deal with it. You can’t be in business without the
right stuff, especially when computer and
communications equipment has never been faster,
better, and cheaper. Affordable technology truly
9 levels the playing field, giving any company the
10 chance to act as competitive and professional as
11 much bigger firms with greater resources.
12 Computers are great, but they’re not cheap.
13 Companies with fewer than twenty employees
14 spend an average of $292 a month on computer
15 maintenance. Companies with fifty to one hundred
16 employees spend an average of $1,019 a month,
17 according to a survey conducted by Hewlett-Packard.
18 Most entrepreneurs rely on others to guide them
when it comes to choosing and maintaining their 1
computers and software. Although 81 percent of 2
those surveyed said access to free or low-cost 3
technical support is critical when they decide what 4
brand to purchase, only 5 percent said they use the 5

283
manufacturer’s tech support for routine 6
maintenance; 14 percent use it for troubleshooting. 7
Anyone who has ever waited on hold for thirty- 8
five minutes or more trying to speak with a human 9
tech-support person will be happy to pay the extra 10
fee to speak to a real person twenty-four hours a day. 11
For this chapter, I’ve relied on several colleagues 12
to share inside tips. Mie-Yun Lee, a syndicated 13
columnist and founder of Buyerzone.com, suggests 14
some great equipment to buy for your business. 15
Amy Berger, founder of Berger Technology Re- 16
search, follows the ever-changing communications 17
technology market and keeps me posted. She 18

1 helped with the section on communications options.
2 This chapter includes a variety of ideas to help you,
3 whether you barely know how to use your voice mail or are
4 running a $50 million software company. My emphasis is on
5 telecommunications, because to me, good communication is
6 the core of every successful business. We’ve also found a few

7 new things to whet your appetite for the future of business
8 technology.
9 So check out how to train your employees online, what to
10 buy for the busy entrepreneur on the run, how to sell your
11 products online, and many more great ideas to get your
12 small business moving into the future.
13
14
15
Five GreatThings to Buy
16 G R E AT before you can be truly high-tech, your
17 business needs to have the right equipment and be
18 164 set up properly.
19 I D E A Here are the five things your office probably
20 284 doesn’t have but should, according to business equipment
21 expert Mie-Yun Lee:
TECHNOLOGY AND TELECOMMUNICATIONS
22 1 Computer backup system. It’s easy to think your comput-

23 ers will never crash or be damaged by water or fire or be hit
24 by a virus. But it could—and probably will—happen.
25 Prevent the despair you’ll feel when a disaster strikes by
26 buying a backup system. You want a system that can store
27 key data from all your current and future computer systems.
28 Brands to look for include Exabyte, Hewlett-Packard, and
29 (for Macs) APS Technologies. Lee also suggests practicing
30 recovering your data before you actually need to do it. And be
31 sure to back up files every week, if not every day.
32 2 Router: Rather than buying modems for every computer
33 you add to the office, buy a router. These devices serve as
34 an officewide modem for everyone, with access available to
35 all networked computers.
36 A router can save you money, because all modem usage
37 can be consolidated to just a couple of phone lines instead of
38 requiring a separate line for each modem. This devise can
39 also eliminate unsightly telephone wires snaking around the
office. A router can connect to regular phone lines, ISDN, 1
and dedicated lines. Try 3Com or Ascend for PC-based 2
routers; Farallon is a good source for Mac routers. 3
3 Color printer: A splash of color can make your impor- 4
tant documents more memorable. A color ink-jet printer 5
is good for basic printing. Whatever printer you choose, 6
make sure you buy a four-color, not three-color, model. 7
Four-color models have a reservoir that holds black ink, 8
while three-color ones combine various colors to approxi- 9
mate black. 10
Also, make sure that you can reload or refill cartridges 11
separately. Otherwise, when you run out of one color, you 12
will be forced to throw out the entire cartridge. 13
Consider brands like Epson, Canon, or Hewlett-Packard 14
for printers and cartridges. 15
4 Computer-height desks. Computers sitting atop standard- 16
issue desks often spell trouble for employees. Many suffer 17
aching hands or carpal tunnel syndrome, a serious repetitive 18
stress problem (see Great Idea 14). To alleviate the discom- 19
fort, buy lower desks or desks that adjust to computer key- 285 20
board height. 21
You can retrofit desks by adding a keyboard platform that 22
is adjustable. If you use a mouse, make sure the platform is 23
wide enough to hold both the keyboard and the mouse. 24
Remember, part of working in the information age means 25
having the right office equipment to accommodate the new 26
technology. 27
5 Employee 800 number. If you have employees calling in 28
from the road, try installing a toll-free 800/888 number 29
instead of issuing calling cards. You can save money in the 30
long run, and employees will have fewer numbers to dial 31
when they are on the run. Many telephone service providers 32
offer toll-free service. You can also equip the 800 number 33
with account codes to prevent employees from using the 34
800 number for personal calls. 35
36
For more ideas visit www.buyerzone.com. 37
38
39
1
2 Find the Right Communications
3
4
Technology for Your Business
5 when it came time to consider the best
G R E AT
6 kinds of communications technology for my busi-
7 165 ness, I turned to an expert I can trust: my sister Amy
8 I D E A Berger, founder of Berger Technology Research in
9 Reseda, California.
10 Communicating with your customers is the most impor-
11 tant thing for small business owners. Here are some key
12 devices and services to consider:
13 ◆ Cellular telephones.In today’s mobile society, most busi-
14 ness owners need a cell phone. They are getting cheaper
15 every year and many companies offer excellent and flexible
16 service plans, so you’ll want to shop around for the best deal.
17 Digital phones are being superseded by PCS telephones.
18 PCS stands for “personal communications services.” PCS
19 relies on radio frequencies that the FCC made available with-
20 286 in the past few years. PCS frequencies are now available
21 nationwide, but make sure they are in your area before you
22 buy a phone.
23 There are many, many companies providing a confusing
24 array of cellular phone services. Do your homework and ask
25 other business owners which providers they use before sign-
26 ing a long-term service contract.
27 ◆ Multifunction boxes. This telecommunications product
28 looks like a printer with a scanner, but it can do four things:
29 fax, print, copy, and scan. For about $800 retail, it’s a great
30 deal for a small office. Hewlett-Packard and Canon make
31 these affordable multifunctional machines.
32 ◆ Two-way pagers. PageNet and Skytel sell pagers that can
33 answer a message. With new technology and radio fre-
34 quencies, users can send an alphanumeric message and
35 receive a reply. Some pagers can hook up to your voice mail
36 system for continual access to incoming phone calls.
37 Again, there are many, many models and service providers,
38 so look for reliability and solid equipment. E-mail pagers
39 are also available.
◆ Internet service providers. There are more than 5,000 1
Internet service providers in the world, ranging from tiny 2
businesses to AT&T. The Internet provides access to unlimit- 3
ed information, e-mail, and electronic commerce. You can 4
also link to individual customers’ websites and find all sorts 5
of specialized business-support groups. 6
◆ Personal digital assistants (PDAs). These devices are the 7
size of a small waffle. They typically have a small screen and 8
a writing device—much like the Etch-A-Sketch you played 9
with as a kid. Many PDAs have some kind of mini-keyboard 10
and modem. They are portable companions to your personal 11
computer, not a replacement, and must be hooked up by a 12
wire or wireless communication. 13
What you create on a PDA can easily be downloaded into 14
your PC. PDAs are good for people on the go who don’t want 15
to lug around a laptop. PDAs are made by U.S. Robotics, 16
Palm, Casio, Apple Computer, Sony, and Handspring. 17
◆ Fax/modem card. For less than $100, you can buy a 18
modem/fax card that you can put into your PC. This dual- 19
function device allows you to send and receive faxes, 287 20
e-mail, and computer files. You need to leave your PC turned 21
on to enjoy the benefits of a fax/modem card. 22
◆ Wireless modems. Another technology to consider is wire- 23
less communications devices, which transmit information to 24
the nearest radio tower, then rely on land lines to connect a 25
provider who relays the information to the client’s database. 26
This works well when you have lots of sales reps on the road 27
who need to place orders with a quick turnaround. 28
29
30
TrainYour Employees Online 31
G R E AT
in the rush to upgrade computers and buy 32
new software, many business owners forget that peo- 33
166 ple need to be taught how to use the software before 34
I D E A they can begin to be more productive. Employees can 35
lose up to three weeks of work time tackling computer prob- 36
lems on their own, according to a survey of 400 PC users by 37
SCO, a British software firm, and Harris Research. In fact, 38
the first month after a new software program is introduced, 39
1 employees spend an average of 100 minutes a week trying to
2 figure out how to use it. “The latest software isn’t empower-
3 ing these users, it’s disrupting their workday,” said Geoff
4 Seabrook of SCO.
5 One alternative to sending your employees to community
6 college classes or hiring private instructors is to look into

7 customized training provided online.
8 “I don’t like to be instructed. I like to work on my own,”
9 said Barbara Epstein, who spent about an hour a day teach-
10 ing herself how to use Microsoft spreadsheet and database
11 programs with an online tutoring service. “I really don’t
12 enjoy reading instruction books,” said Epstein. “This has
13 given me confidence with the computer.”
14 Epstein is the site manager for the Physick House, a his-
15 toric mansion built in 1786 and located in Philadelphia’s
16 downtown historic district. She now uses her personal com-
17 puter to schedule tours, catalog antiques, and do the book-
18 keeping. Because her job keeps her so busy, taking classes
19 was not an attractive option. Instead, she taught herself how
20 288 to use the programs via LearnItOnline, a tutoring service
21 offered by Element K (formerly Ziff-Davis Education) on the
22 World Wide Web. Because it operates twenty-four hours a

23
24 Tips for training employees
25
26 SAVVY ENTREPRENEURS invest time and money train-
27 ing their employees. Here’s how to get started:
28 1 Ask your employees what software programs they think
29 would boost productivity before you buy anything new.
30 2 Schedule time during the day for training, whether it’s
31 online or with an instructor.
32 3 Encourage employees to practice their new computer
33 skills on company time and after hours.
34 4 Share the expense of hiring a trainer with another small
35 business owner in your area.
36 5 Call your local community college district for informa-
37 tion on the variety of affordable classes available for
38 employees.
39
day, LearnItOnline and other services like it allow people to 1
work at their own pace and set their own training schedules. 2
It’s like having a virtual tutor who never sleeps and isn’t on 3
the payroll. 4
“The people who benefit most from this are often the peo- 5
ple who are most scared of being online,” said Dina Wood, a 6
spokeswoman for Hand Technologies in Austin, Texas. 7
Hand, which sells computers to small companies and indi- 8
viduals, has been offering LearnItOnline services to cus- 9
tomers on a trial basis. The company, which has 1,000 sales 10
consultants nationwide, now plans to offer the program to 11
clients across the country. 12
Element K relies on computer resellers and popular web- 13
sites to market the service, paying its partners a 10 percent 14
referral fee for every new subscriber they sign up. Check out 15
the sites at www.learnitonline.com and www.elementk 16
.com for course offerings and more information. 17
Because everyone learns differently, the online tutorials 18
include audio instruction as well as visual demonstrations. 19
You can pick up the basics of a program or learn more 289 20
advanced functions. Then you can practice everything you’ve 21
just learned. 22
Meanwhile, back in Philadelphia, Epstein said her main 23
complaint about her online tutoring was that the audio por- 24
tion of the lesson takes several minutes to download. But she 25
said it’s worth waiting for the voice to explain to her exactly 26
what she should do to master the program. 27
In the year 2001, worldwide revenues for the information- 28
technology training and education market was expected to 29

reach $27 billion, according to International Data Corp. 30
Investing in training has become necessary because nearly 31
one-fifth of the top U.S. information technology executives 32
rated the lack of skilled people as the most serious constraint 33
to the growth of their businesses, according to Ellen Julian, 34
IDC’s research manager. 35
36
37
38
39
1
2 Take Advantage of an Online
3
4
Technology Marketplace
5 licensing new technology to other
G R E AT
6 companies is a win-win scenario for everyone
7 167 involved. Corporations invested $187 billion in
8 I D E A research and development in 2001, according to the
9 Battelle Memorial Institute, and selling licenses and collect-
10 ing royalties is one way to earn back that money. Additional-
11 ly, licensing deals can create new opportunities to grow your
12 business. One simple way to find a product to license or to
13 expose your intellectual property to potential licensees is via
14 an online technology marketplace.
15 Frank Jaksch, CEO of ChromaDex Inc., a small Laguna
16 Hills, California–based company that sells high-purity chem-
17 icals isolated from plants to manufacturers of vitamins and
18 supplements, saved his company time and money by looking
19 online. Screening for bacterial contamination is important to
20 290 maintaining the safety of ChromaDex’s products, which are
21 produced using the raw materials derived from plants and
22 flowers. Jasch was searching for a test to detect minute

23 amounts of bacteria in food and nutritional supplements. On
24 a website called www.yet2.com he found information about
25 a bioluminescent toxicity screen offered by German pharma-
26 ceutical giant Bayer AG. The test, developed by Bayer for
27 internal use, was just what Jaksch was looking for.
28 “One of the ways to develop new products is to find out
29 what other people have done, rather than creating things on
30 your own,” said Jaksch, whose ChromaDex is a small, but
31 growing, player in the U.S. market for nutritional and “func-
32 tional” foods, which reached about $50 billion in 2001.
33 “We worked it out so we didn’t have to outlay any cash
34 and Bayer took a stake in our company,” he explained. His
35 licensing deal came with an added bonus: Bayer AG not
36 only took a 10 percent stake in his company, but asked for a
37 seat on his board of directors. “A company like Bayer is not
38 going to take a deal like this lightly, so it says a lot about us
39 and our credibility.”
Ralf Du Jardin, manager of new business development for 1
Bayer AG, said posting information about its toxicity screen 2
on yet2.com “led us to a fast-growing innovative company, 3
ready to extract the added-value from the R&D efforts we 4
have pursued with our technology in the food market seg- 5
ment.... We agreed on an equity-based license so both of us 6
will benefit from ChromaDex’s product development and 7
expanding portfolio of customers,” said Du Jardin. “Taken 8
together, these new opportunities provide Bayer with a num- 9
ber of ways in which we can generate increased revenue for 10
our shareholders.” 11
“We look at this Bayer deal as a new method to raise capi- 12
tal,” said Jaksch, adding that ChromaDex hopes that sales of 13
the test kits to customers will generate a fresh, steady source 14
of revenue for his small firm. But, without an online intro- 15
duction, it was unlikely that ChromaDex, with twelve 16
employees and annual sales under $10 million, would have 17
made a high-level contact with Bayer, which has 117,000 18
employees and operates 350 individual companies on all 19
continents. 291 20
Henry Lieberman, vice chairman and president of 21
Advanced Motion Technologies Inc. (AMT), based in 22
Rockville, Maryland, also relied on yet2.com to complete its 23
first major technology licensing deal. Lieberman said he 24
relies on fourteen subcontractors to work on projects at the 25
firm, which posted annual revenues under $5 million in 26
2001. “We found yet2.com shortly after they launched and 27
thought it looked like a really fantastic way to expose major 28
companies to what we were doing,” said Lieberman. “For 29
me, many of the sponsoring companies that support the site 30
were on my hit list to approach.” 31
AMT struck a deal with Curtiss-Wright, which has 2,600 32
employees and has been serving the aeronautical industry 33
since it helped the Wright brothers with their first flight in 34
1903. Curtiss-Wright agreed to purchase four separate 35
licenses from AMT related to the smaller company’s electro- 36
magnetic actuator. The devices, which use powerful magnets 37
to replace traditional, oil-powered hydraulic systems, are 38
used extensively for military and commercial purposes. 39
1
2 Are you ready for a licensing deal?
3
4 BEFORE POSTING your technology on a marketplace-type
5 website to attract interest, consider the following:
6 ◆ Have you determined anything your company has devel-

7 oped that may have value to another company?
8 ◆ Have you filed to protect your trade secret or invention
9 with the proper federal trademark or copyright filings?
10 ◆ Have you established a value for licensing the technology
11 to others? Hire an outside consultant with expertise in
12 your industry, if necessary.
13 ◆ If you find a deal, make sure you work with an experi-
14 enced intellectual property attorney to draft contracts
15 that protect your company from harm. And, be sure to set
16 a schedule that guarantees payments before you release
17 the technology to the buyer.
18
19 Chris De Bleser and Ben DuPont, among others, founded
20 292 yet2.com in 1999. The entrepreneurs raised $1.5 million in
21 private angel funds to get started and have since raised
22 another $45 million in several rounds.

23 “We are dealing with intellectual property and corporate
24 assets, the family jewels of a business,” said De Bleser, who
25 previously worked for Polaroid and Black & Decker, helping
26 those big firms develop new technologies. “Both of us [he
27 and DuPont] were frustrated over how hard it was to transfer
28 technology,” said De Bleser. “With our model, regardless of
29 their size, companies are allowed to expose their intellectual
30 assets to the world.”
31 Buyers of technology register on the site and can search
32 without paying a fee. So far the company has 45,000 regis-
33 tered technology buyers. If a deal is made, buyers pay
34 De Bleser’s firm a finder’s fee of 10 percent, with a maxi-
35 mum of $250,000 per deal. Small companies pay about
36 $4,000 to post information about the technologies they have
37 available to license. Access to many areas of the site is free,
38 but registered companies are asked to provide a credit card.
39
1
Set Up aTeleconference 2
G R E AT if you are stressed out and tired of airports, 3
bad airline food, and the expense of traveling, con- 4
168 sider joining the modern age. Videoconferencing, 5
I D E A once available only to major megabuck corporations, 6
is now accessible and affordable for smaller companies. Best 7
of all, you don’t need any equipment to conduct a multisite 8
discussion. 9
Although many other companies offer videoconferencing 10
services, Kinko’s, the small business owner’s friend, offers 11
videoconferencing services at more than 150 locations. If 12
everyone on your conference call goes to a Kinko’s, the cost 13
is $150–$200 per hour per site with a half hour minimum. 14
In addition to broadcasting your image, you can transmit 15
graphics, slides, videotape, and computer data. “It’s the sec- 16
ond-best thing to being there,” said a Kinko’s spokeswoman. 17
Here are some tips from Kinko’s on making your video- 18
conference a success: 19
◆ Arrange the conference in advance and make sure everyone 293 20
knows what needs to be accomplished. 21
◆ Send out an agenda and other materials prior to the confer- 22
ence. 23
◆ Remember, time is money, so prioritize your points and 24
choose one person to act as chairperson at each location. 25
◆ Avoid wearing bright red, white, plaids, stripes, or prints, 26
because they are distracting and create visual problems on 27
camera. 28
◆ Speak naturally and clearly. Pause briefly at the end of your 29
remark because there is a slight lag-time in transmission. 30
◆ Don’t cough into the microphone or hold side conversations 31
during the session. 32
◆ Let everyone know when you are about to show graphics. 33
◆ Identify yourself from time to time so everyone can keep 34
track of the participants. 35
36
For more information and to make reservations, contact a 37
Kinko’s in your area, or visit www.kinkos.com. 38
39
1
2
Make the Most of Voice Mail
3 G R E AT even the worst technophobes love voice
4 mail. For me, it’s the greatest technology ever invent-
5 169 ed. The ability to change your outgoing message
6 I D E A every day, receive multiple messages while you’re on

7 the phone, and call in for messages from anywhere on the
8 planet is an irreplaceable part of doing business today. I
9 don’t pretend to understand all the intricacies of how it
10 works, but I know I couldn’t work without it.
11 The problem is, many people don’t take full advantage of
12 the system. It takes only a few seconds to change your mes-
13 sage whenever necessary. Busy entrepreneurs can impress
14 clients and customers by telling them whether they are in
15 or out of the office every day and when callers can expect a
16 return call. This really cuts down on telephone tag.
17 After I leave a detailed message, I also mention the best
18 time to reach me. Voice mail is especially wonderful when
19 you are dealing across multiple time zones, nationally and
20 294 internationally. Through the years, I have negotiated,
21 planned, managed, and completed six-figure projects with-
22 out ever meeting certain members of the client’s team.

23 When people know how to use voice mail like a pro, it
24 can really speed things up. Sometimes just forwarding a
25 message to the right person for a reply can get a problem
26 solved quickly.
27 It may seem basic, but when you leave a message,
28 remember to give your name, your company name, your
29 phone number, and the best time to reach you. If you’ve cho-
30 sen a more elaborate voice mail system with different mail
31 boxes for each employee or department, it’s important to
32 make it easy for callers to find the right extension or to reach
33 a human being. I truly believe businesses lose millions of
34 dollars in sales because frustrated callers hang up when they
35 can’t maneuver through a tricky voice mail system.
36 In addition to voice mail, if you expect to put callers on
37 hold, you might consider installing a “messages on hold”
38 feature. These systems allow you to do everything from
39 play popular music to review your business hours—all
while people are waiting to get through to a person (see 1
Great Idea 76). 2
Messages on hold are annoying if they are on a short, 3
repetitive loop. The best ones, used by many big compa- 4
nies, tell callers exactly how much more time they have to 5
wait for service. 6
Because the industry is evolving so fast, it may pay to hire 7
a telecommunications consultant before choosing a voice 8
mail system. But whatever system you order, use it well— 9
to make life easier for everyone who deals with you. 10
11
12
Perform aTechnology Checkup 13
G R E AT with the cost of technology plummeting, 14
there’s no excuse not to have the best hardware and 15
170 software available. The right technology not only 16
I D E A makes your life easier, but it also boosts employee 17
morale and productivity and improves customer service. 18
One way to figure out exactly what you need to purchase 19
is to take this quick technology checkup. My three-step 295 20
checkup helps you determine whether you are serving your- 21
self, your employees, and your customers well. It will also 22
help you match the equipment you need with the work you 23
must accomplish every day. 24
1 Determine your own technology preferences. Busy 25
entrepreneurs rely on quick, clear communication to keep 26
up with all their responsibilities. Ask yourself how you pre- 27
fer to communicate with people: Is it via e-mail? Voice 28
mail? Fax or pager? Even the most computerphobic entre- 29
preneurs are slowly realizing that the PC is their most pow- 30
erful business tool. Decide whether you need a laptop com- 31
puter. Or maybe you prefer to work in the office and 32
transmit files via modem? 33
Determining what kind of equipment is necessary to do 34
your work sets the stage for the way the rest of your employ- 35
ees, vendors, and customers deal with your company. Once 36
you’ve figured out what is needed, make a “wish list” of 37
things to buy. Decide whether single-purpose or multi- 38
purpose equipment best fits your needs. Take a stroll 39
1 through a showroom to become acquainted with what’s on
2 the market.
3 2 Speak with key employees about their technology
4 requirements. You can’t make smart purchasing decisions
5 without feedback from your people on the front lines.
6 Add your employees’ equipment requests to the compa-

7 ny “wish list.” They may not need much. Maybe they’d like
8 a color printer to add pizzazz to sales materials. Perhaps
9 they need faster personal computers or networking capabil-
10 ities. Assign one interested person to begin researching
11 prices and equipment specifications. Speak to other busi-
12 ness owners and ask for their personal recommendations.
13 Most people are very happy to share what they like and
14 don’t like about the hardware and software they use.
15 3 Poll your customers and vendors. A quick, efficient way
16 to collect information is to send out a prepaid, perforated,
17 two-part postcard. Most quick printers can help you
18 design one.
19 Keep the questions short: Do they prefer to fax orders or
20 296 phone them in? Would they order more if they could order
21 online? Find out if they need an after-hours phone number,
22 an e-mail address, or fax-back service. Ask them if your

23 brochures and catalogs are providing them with all the nec-
24 essary information. Most customers will be happy to take a
25 few minutes to let you know what’s right and wrong about
26 their dealings with your firm.
27 Add the customer requests to your wish list before you set
28 your budget and priorities.
29 While you probably can’t afford to run out and pur-

30 chase everything on the list right away, at least you can
31 get started. Then set a time to do this checkup again at
32 the same time next year so you can see what progress
33 you’ve made.
34
35
36
37
38
39
1
Use a DigitalCamera for Your Website 2
G R E AT one summer, john and betsy powell, owners 3
of Salt Marsh Pottery, skipped the Atlanta gift trade 4
171 show they had attended for years. It just didn’t seem 5
I D E A worth spending $8,000 to participate in the show, 6
which generated only $16,000 worth of orders. 7
Still, they didn’t want to lose the business. So they printed 8
and mailed colored “sell” sheets to the trade show attendees. 9
Soon after, they booked $16,000 worth of orders, and the 10
phone is still ringing. 11
The Powells produced the sheets themselves in a couple 12
of days using a digital camera, a computer, and an ink-jet 13
color printer. The camera cost about $1,000; they also use it 14
to shoot product photos for their website. 15
Steve Morgenstern, author of Grow Your Business with 16
Desktop Marketing (Random House, 1996), said rather than 17
using run-of-the-mill clip art to convey ideas, small business- 18
es can put their products on display fast. “The combination 19
of digital cameras and computers to print or electronically 297 20
publish color photos is the second publishing revolution for 21
small businesses, following desktop publishing, made possi- 22
ble by laser printers and computers,” said Morgenstern. 23
Like other digital media, digital cameras allow you to view, 24
erase, or edit images before you print. To edit the image, you 25
connect the camera to your computer via a cable. There are a 26
variety of software programs ranging in price and capability, 27
so shop around. Adobe’s PhotoShop is widely used, but is a 28
bit pricey for small business owners. With the right software 29
in place, you can adjust the brightness, contrast, and size. 30
Once you’ve concocted the best image, you print it out with a 31
laser or color ink-jet printer. With a modem, you can send 32
the image by e-mail to a customer or post it on your own 33
website. 34
Professional-quality digital cameras, like those used by 35
Sports Illustrated photographers, start at $15,000, and go up. 36
But digital auto-focus cameras for the layman cost less than 37
$1,000. A good ink-jet printer can be had for under $300; 38
however, the special high-gloss paper you need for images 39
1
2 Some advantages of going digital
3
4 ◆ No per-picture expense. After you buy the camera,
5 there are no film or development costs. You can fire away,
6 free of charge.
7 ◆ Immediate results. Wonder whether you got the shot?
8 Just hook the camera up to your computer or view the
9 results instantly on the camera’s built-in LCD panel.
10 ◆ Easy integration into digital media. With desktop
11 publishing tools, digital cameras provide powerful
12 graphic ammunition with minimal fuss and bother.
13 ◆ Easy transmission via fax or modem. With a digital
14 camera, you can grab a picture and quickly send it by
15 e-mail or print a copy and fax it.
16
17 costs about 75 cents a sheet.
18 There is a downside: While digital images are quicker and
19 easier to manipulate than traditional film images, the quality
20 298 is still not as good as film if you want to produce a high-end
21 catalog or advertisement. And professional photographers
22 will tell you that digital images pale compared to those they
23 shoot on film. Morgenstern also cautions: “Unless you use
24 an expensive laser printer, the quality of photographic output
25 doesn’t match the clarity of a drugstore snapshot reprint.”
26
27
28
ScanYour Business Cards
29 G R E AT your rolodex is a gold mine, but flipping
30 through it and keeping it up-to-date is a hassle.
31 172 Insurance broker Richard Butwin, of Great Neck,
32 I D E A New York, said his greatest idea was to buy a Card-
33 Scan system. Through the miracles of modern technology,
34 you pop a business card into the scanner, and within min-
35 utes the data is read and stored. Then, when you are ready,
36 the software transfers the information into whatever contact
37 management software you use.
38 The company says the system is great for salespeople,
39 executives, assistants—anyone who has to keep track of lots
of people. CardScan’s basic software costs $79; the system 1
with scanner and software is $299. For more information, 2
call CardScan at 800-942-6739, or visit their website at 3
www.cardscan.com. 4
5
6
Create aWebsite 7
G R E AT
creating your own website is a complex 8
and demanding project that can cost you money 9
173 instead of making you money—if you don’t do it 10
I D E A right. Before you plan your site, determine whether 11
you can afford to create and maintain it. You can’t just put it 12
out there in cyberspace and forget about it. At least once a 13
week, you should be adding fresh information, offers, and 14
incentives to visit your site. You also need to make sure that 15
your customers and clients are Web-savvy. If they aren’t yet 16
going online to find information or make purchases, there’s 17
a chance you may be wasting your time and money. 18
Here are some steps to get you started: 19
1 Go online to check out a variety of websites belonging 299 20
to big and small companies. This is the best way to figure 21
out exactly what you like and don’t like. Some sites are very 22
elaborate, with all sorts of graphics and animation. Some are 23
very simple and elegant. Mark the sites you like so you can 24
share them with a designer. 25
2 Outline all the elements you would like to include on 26
your own site. Carefully list the information you want to 27
share with your customers or clients. Ask yourself: Do you 28
need to include product information and a price list? An 29
order form? Will you be putting your catalog online? Will 30
you feature some sort of schedule to track product releases 31
or shipments? 32
3 Make a list of the sections and estimate how many 33
pages of text they will take up. Most website estimates 34
are based on the number of pages or screens. 35
4 Once you’ve outlined all of the sections you want on 36
your site, make appointments to meet with at least two 37
or three designers. Ask your friends or colleagues to rec- 38
ommend good website designers. Or better yet, call the com- 39
1 panies whose sites you liked best and ask them for the name
2 and phone number of their designer. Before you set up an
3 appointment to meet with a designer, ask for some refer-
4 ences and call them. Meet only with the people who come
5 highly recommended. You don’t want to waste time getting
6 an estimate from someone who is difficult to work with,

7 doesn’t meet deadlines, or has a bad reputation.
8 5 At the first meeting, ask the designer to go online and
9 show you some of the work created for other clients.
10 Before you show them what you want done, get clear
11 answers to these questions:
12 — Will they do all the work themselves, or farm it out to
13 others?
14 — How and when do they expect to be paid? Do they require
15 a deposit up front?
16 — How much do they charge to update and maintain a site?
17 Most designers have an hourly rate for these services.
18 — Will they find you a host and help set up your site?
19 6 After you get answers to the above questions, ask for a
20 300 written, detailed estimate—including a “site map” which
21 shows you how all the pages will flow from the home page.
22 7 Remember, development prices will vary considerably,

23 depending on what you want. Developing a new website
24 can cost as little as $2,500 or as much as $500,000, depend-
25 ing on the complexity. Many online services offer very low-
26 cost personal sites to members, but if you are in business,
27 you probably want to have a more professional-looking site.
28 When you receive the estimates, make careful comparisons.
29 Be sure to factor in the cost of the server and any setup fees.
30 8 Watch out for padding or hidden costs. Don’t be afraid to
31 ask questions to really understand everything you’ll be pay-
32 ing for.
33 9 When your site is finished, be sure to obtain a disk or
34 CD-ROM with your completed site from your designer.
35 Remember, the designer doesn’t own the site—you do. Hav-
36 ing a copy in hand will protect you from losing all the work
37 should you decide to hire someone else down the line.
38 10 Start out simple. Nothing should be more than two clicks
39 from the home page. Aim for a very clean, elegant design;
you can always add animated graphics later, if you need to. 1
11 Check out these books before getting started: Creating 2
Killer Websites: The Art of Third-Generation Site Design, by 3
David S. Siegel (Hayden Books; 1997), and Clicking Through: 4
A Survival Guide for Bringing Your Company Online, by 5
Jonathan Ezor (Bloomberg Press; 2000). 6
7
8
ComputerizeYour Service Business 9
G R E AT before veteran tailor and dry cleaner yoon 10
Lim bought the Manor Cleaners in Pelham Manor, 11
174 New York, whenever I forgot my yellow dry cleaning 12
I D E A receipt, I had to sign my name in a worn spiral note- 13
book to confirm that I had collected my clothes. That old- 14
fashioned system ended abruptly one day. When the door 15
opened at 8 AM, there stood two shiny computer stations set 16
into slick blue-and-white Formica counters. Manor Cleaners 17
had gone high-tech overnight. 18
Lim, who owns two other dry cleaning businesses in 19
Westchester County, said he spent about $5,000 for each 301 20
customized computer. The system, which he has installed in 21
all three stores, is designed specifically for dry cleaning busi- 22
nesses. Each keyboard key is coded to record a shirt, coat, 23
dress, or bedspread. 24
The prices ring up automatically, and the system prints 25
out a crisp, two-part, detailed receipt—one for the store, the 26
other for customers. We may keep losing our receipts, but 27
Lim’s staff will never lose track of our clothes or what we owe 28
him. Lim said he couldn’t operate the business efficiently 29
without help from his new computers. 30
No matter what kind of small business you own, you can 31
buy a customized computer system. If you operate a pet 32
store, construction company, restaurant, law firm, insurance 33
office, or a chain of beauty salons, you can find a customized 34
system to track inventory, log point-of-purchase sales infor- 35
mation, generate invoices, and trigger reorders. 36
You can buy systems from many big companies, includ- 37
ing IBM, the granddaddy of customized systems, or hire a 38
local hardware consultant to put together a system from 39
1 scratch. According to a survey by Microsoft, there are about
2 250,000 independent computer dealers who create cus-
3 tomized systems for business owners just like you. Although
4 about 20 percent of them disappear or go out of business
5 every year, most stick around long enough to get your system
6 up and running.
7 The advantages of having a customized system are many.
8 You get exactly what you need—nothing more. The software
9 is written for your particular industry and is frequently
10 updated.
11 The best way to find the right software is to contact your
12 trade or professional association and ask for a list of software
13 vendors serving your industry. If you don’t belong to a group,
14 now is the time to join.
15 If you think your business is too esoteric to have software
16 written for it, think again. My friend and neighbor, Debra
17 Orlando, designs store interiors for Esteé Lauder stores
18 around the world. She works on a Macintosh computer
19 loaded with special CAD-CAM software for interior design-
20 302 ers. She sends a disk to the architects and contractors, who
21 download her files to print out detailed construction plans.
22 Orlando rarely meets face to face with her colleagues, but

23 she manages to do very high-level design work from her
24 home-based studio. Her computer systems allows her to
25 spend more time with her young daughter, Kara, and to be
26 home when her 14-year-old son, Peter, gets home from school.
27 So no matter what kind of small business you run, consider
28 looking beyond what’s available off the shelf to find exactly
29 the kind of hardware and software you need to succeed.
30
31
32
Buy a High-Tech Postage Meter
33 G R E AT the days of lugging a heavy postage meter
34 to the post office for a refill are over. On March 31,
35 175 1999, the U.S. Postal Service outlawed the mechan-
36 I D E A ical postage meters used by most small businesses.
37 The Postal Service’s decision to phase out the mechanical
38 meters was aimed at eliminating about $100 million a year
39 in postal meter fraud.
Luckily, the new digital postage meter is much more effi- 1
cient. It can download postage via modem in less than a 2
minute for a small fee. 3
Pitney Bowes, the granddaddy of postal equipment, has a 4
“Personal Post Office” product designed specifically for small 5
businesses. The sleek, digital postage meter can download 6
postage via a modem in about twenty seconds, twenty-four 7
hours a day. The software can print up to ten envelopes a 8
minute, design envelopes, manage addresses, and tell you 9
how much postage a letter or package needs. 10
“Mail is the engine of commerce for small firms, but it’s 11
time-consuming,” said Mike Stecyk, vice president and gen- 12
eral manager of Pitney Bowes small office/home office divi- 13
sion. “Pitney Bowes is reinventing the way small businesses 14
generate mail. We understand there is more to mailing than 15
just putting postage on an envelope.” 16
Stecyk said a recent company-sponsored survey found 17
that 85 percent of small businesses surveyed are still licking 18
stamps and preparing mail by hand—this is a big waste of 19
time and money. The company also has a Mail Marketer 303 20
CD-ROM, which provides a direct mail tutorial, and a special 21
mailing service that allows small companies to modem mail- 22
ings to Pitney Bowes for distribution. 23
For information on Pitney Bowes products, call the 24
company at 800-640-7058, or check out their website at 25
www.pitneybowes.com. 26
27
Protect Your Business 28
29
Data and Records 30
G R E AT before disaster strikes, spend some time 31
figuring out how to protect your business records 32
176 and computer data. The first step is to make sure 33
I D E A your customer database, payroll records, bank 34
records, and tax information are all duplicated and safely 35
stored off site. 36
Details like this should be addressed in a formal disaster 37
recovery plan. Nobody likes to think about a disaster 38
befalling his or her business, but a solid plan will cover 39
1 exactly how you could keep working even if you couldn’t get
2 to your office.
3 Start the planning process by asking yourself these
4 questions:
5 ◆ Where would we work if the office lost all power or was dam-
6 aged by fire or flood?

7 ◆ Can we arrange to share space temporarily with another busi-
8 ness?
9 ◆ Do we have copies of all our essential business records in case
10 our computer systems are damaged?
11 ◆ How would we keep in touch with our customers, clients, and
12 suppliers if the office were closed?
13 ◆ How would we keep in touch with each other?
14
15 no matter what kind of business you operate, arrange
16 for copies of critical business records to be kept by your
17 attorney or accountant. If they don’t have the space, keep
18 one set of records at home or in a secure, waterproof stor-
19 age facility.
20 304 Before the end of each day, require everyone on your staff
21 to back up their work on zip disks as well. Back up all data
22 on rewritable CDs at the end of every week. While it seems

23 like a hassle, getting in the habit of backing up data on a
24 daily basis is critical in case of emergency.
25 Collect home phone numbers and assign a team of
26 employees to keep in touch with everyone else. You might
27 want to add remote call forwarding to your list of telephone
28 services. With it, you can forward calls from your office line
29 to anywhere without actually going into the office. Hope for
30 the best, but plan for the worst.
31
32
33
Use E-Fax
34 G R E AT rather than eliminating paperwork,
35 personal computers generate massive piles of
36 177 paper. Sure, we e-mail files around the world, but
37 I D E A most of us then print out a copy and stick it in a
38 file somewhere.
39 Still, the main advantage of using electronic mail to trans-
mit information is that it can save you time and money. For 1
example, using the Internet to fax can be substantially cheap- 2
er than using traditional phone lines, even if you delay docu- 3
ments until the long-distance rates drop. 4
There are scores of companies around the world now pro- 5
viding electronic fax services. Here are a couple of them: 6
◆ Extreme Data reported that if you send 500 one-page docu- 7
ments by first-class mail, the postage will cost $160; good- 8
quality letterhead and envelopes will cost about $175; and 9
labor to prepare the envelopes is $130. 10
If you decide instead to go the fax broadcast route, you can 11
send the mailing list and the information to their service 12
bureau. The charge for transmitting to 500 locations is about 13
$85, or 17 cents each, according to Extreme Data. For more 14
information on Extreme Data, call 800-252-0360. 15
◆ Efax, founded in 1997, estimates it can save any company 16
about $330 in one year. That’s the difference between the 17
cost of a one-year subscription to the service and $450 for 18
a fax machine plus the cost of telephone service for a year. 19
With an Efax subscription ($10 a month) you get a local 305 20
phone number to which any fax machine can send. Efax 21
receives the fax and sends it to your computer as an e-mail 22
attachment. To send a fax from your office, you e-mail the 23
document to Efax, which will then send it to a fax number 24
anywhere in the States, except Alaska, for 10 cents a page 25
(Alaska costs 14 cents; Uzbekistan, $1.22). Or you can 26
blast one fax to a hundred clients at a cost of 6 cents a 27
page domestic, 13 cents overseas. For an extra charge, 28
you can use an 800 number to send and receive faxes on 29
the road. 30
A small business owner in Franklin, Virginia, lost his 31
office equipment in a flood in 1999 and, after signing up 32
with Efax, has found no need to replace his fax machine. A 33
mortgage broker in Seattle, Washington, says he saves time 34
by reviewing the long documents he receives by e-mail and 35
deleting the pages he doesn’t need. For more information, 36
visit efax.com. 37
38
39
1
2
Sell Products Online
3 G R E AT after some internet security–related cold
4 feet, consumers seem to have become more comfort-
5 178 able shopping online, so it’s time to figure out if you,
6 I D E A too, should be selling via the World Wide Web. The

7 Commerce Department reported in November 2001 that
8 e-commerce sales continued to grow at an average rate of
9 6 percent each quarter but represented only about 1 percent
10 of total retailing in the United States in 2000.
11 Shoppers gravitated toward trusted names; the seasoned
12 catalogue companies and established brick-and-mortar retail-
13 ers dominated e-commerce, representing 75 percent of
14 online sales in 2000, according to Nielsen/NetRatings in
15 New York. Is there still room for a small business in e-com-
16 merce? Yes, especially if you are focused on exploiting a
17 niche, pay particular attention to the convenience and securi-
18 ty concerns of online shoppers, and create a customer-
19 friendly website.
20 306 One way to make your site inviting is to include full color
21 photographs of your products, along with well-written sales
22 copy, detailed descriptions, prices, and shipping information.

23 This is what customers will base their purchases on, so you
24 want to be informative. Consider featuring detailed written tes-
25 timonials from happy clients and customers. Everyone wants
26 to be reassured that they are shopping or eating at a popular
27 place—just think of the local restaurant that posts autographed
28 photos of famous celebrities who frequent the eatery.
29 Be sure to include all the contact information customers
30 need to pick up the phone to place an order if they’re not
31 comfortable with online transactions. Savvy Web-preneurs
32 tell me that it’s important to offer a variety of payment
33 options so you don’t scare customers away. Although finan-
34 cial transactions over the Net are usually secure, there have
35 been some problems. But if you’ve ever ordered things over
36 the phone, you know that there are hassles with catalog
37 shopping as well.
38 To assure your customers’ security, make the telephone
39 number and address of your business a prominent feature of
your site. Your customers will feel they’re dealing with a 1
merchant they can talk to, if need be. They may want more 2
information about a particular product or shipping option. 3
Mossberry Hollow Natural Care Products (www.mossberry 4
.com) in Edmonton, Canada, also posts the Web address of 5
the company that processes credit card sales on its site. If 6
doing commerce in the United States, you must post policies 7
for refunding money or exchanging damaged or unsatisfac- 8
tory products. 9
Make sure all your back-end systems are functioning per- 10
fectly. In the early days of online shopping, nearly 80 percent 11
of customers failed to complete transactions due to technical 12
problems. Those high failure rates soured people who were 13
trying to save time by shopping online. Test and retest your 14
online shopping function before your site goes live and con- 15
tinue to check it every single day. 16
Consider offering online-only specials, the way the air- 17
lines offer special discounts to customers who book their 18
own tickets online. Look into online coupons and coupons 19
that customers can print out and use in a brick and mortar 307 20
store. And, be cautious about investing heavily in inventory. 21
Make sure people want to buy what you have to sell! 22
Here are some things to consider before offering prod- 23
ucts online: 24
◆ Do your clients or customers use the Internet? If they don’t, 25
it’s not worth setting up shop online. 26
◆ Can you display your wares through simple photographs or 27
illustrations? 28
◆ Can you provide enough product information online for people 29
to make an intelligent buying decision? 30
◆ Is your fulfillment process in place? Do you accept credit 31
cards? 32
◆ Do you have someone on your staff who is Web-savvy and can 33
process online orders? 34
◆ Can you test-market your products on someone else’s site 35
before investing in your own? 36
37
If you answered “yes” to at least four of the questions, it’s 38
worth looking into online sales. 39
8
8
C H A P T E R 8
Customer
Service
I laughed when someone once said to
me, “Business is great, except for the people.” It’s
true, but without people you won’t have a business,
so your job is to provide the best customer service
possible.
We all know that one unhappy customer blabs to
ten others about how awful you or your staff has
treated them, but a happy customer rarely passes
along the good news.
Your challenge is to get your good customers to
generate a positive buzz about your business. They
will, if you give them excellent service and a reason
to recommend you.
It sounds easier than it is. Providing really
good customer service takes time, money, and
extraordinary patience. It means putting yourself
out there to take the good news with the bad.
And it means taking responsibility for making
sure no complaint goes unresolved.
My husband, Joe, refuses to put up with poor
service or shoddy products. In a typical week, he
returned a broken cordless phone to Staples and
got a full refund from the manager, even though a
311
clerk said it was impossible because we had
thrown the box away. “I had the receipt, so they
had to give me my money back,” he explained.
Then he returned a broken plastic dimmer knob
to the manufacturer and received a nice brass one in
the mail a few days later. He’s found that being a
squeaky wheel really works—most of the time.
But don’t wait for complaints to set your services
in order—having a courteous and consistent
customer service policy will win you a lot of new
business. The burden is on you, the business owner,
to keep customers loyal.
No chapter on customer service would be com-
1 plete without mentioning Nordstrom, the Cadillac of cus-
2 tomer service-oriented companies. Their employee hand-
3 book is just a five-by-eight-inch gray card that reads:
4
5 We’re glad to have you with our company.
6 Our number one goal is to provide outstanding cus-

7 tomer service. Set both your personal and professional
8 goals high. We have great confidence in your ability to
9 achieve them.
10 Rule #1: Use your good judgment in all situations.
11 There will be no additional rules. Please feel free to ask
12 your department manager, store manager, or division
13 general manager any question at any time.
14
15 Pretty cool. But it takes a total commitment to customer
16 service and a special, almost cultish approach to pull it off. If
17 you want to know more about how Nordstrom customer ser-
18 vice can’t be beat, read The Nordstrom Way: The Inside Story of
19 America’s #1 Customer Service Company ( John Wiley & Sons;
20 312 1996), by Robert Spector and Patrick McCarthy.
21 When I asked one of my former research associates, Mimi
CUSTOMER SERVICE
22 Schultz, for her favorite customer service–oriented company,

23 she said it was Mindspring, an online service. She likes the
24 way they give her a $10 credit toward one month’s service
25 every time she refers a new customer.
26 In this chapter I cover how to survey customers to find
27 out what they really think about your business. You’ll learn
28 how to take advantage of “mystery shoppers,” and how tak-
29 ing your product or service to your customer’s home or
30 business can really boost sales. There’s also a retail train-
31 ing center that’s teaching clerks to do more than ring up
32 a sale.
33 As tough as it is to be pleasant and patient some days,
34 remember that if you put people first, more business will
35 follow.
36
37
38
39
1
TakeThis Quick Customer Service Quiz 2
G R E AT
take this customer service quiz to find out 3
whether you are treating your customers the way you, 4
179 yourself, would like to be treated. 5
I D E A 6
7
1 Do you really know who your customers are and whether 8
you are responsive to their changing needs? If you are 9
unsure, create a database to collect information on their pur- 10
chasing habits, likes, wants, and business practices. Be sure 11
to update the database on a regular basis. 12
2 When customers return products, are they treated the 13
same way as when they purchased those products? 14
How do you handle complaints? Use the same courtesy 15
and level of service when a customer is returning a product 16
as you did when he or she bought it. Treat complaints as a 17
way to improve your business and generate goodwill. 18
3 Are telephone calls answered promptly and returned the 19
same day? Do customers and clients complain that your 313 20
phone lines are constantly busy? Customers expect a 21
quick response. Return phone calls the same day, if possible. 22
And when customers call, they should never get a busy sig- 23
nal. Voice mail can help you, but it should never replace a 24
human at the other end of the line. 25
4 If your product comes with a guarantee, are you honor- 26
ing that guarantee? If a customer thinks the product is 27
guaranteed, but finds too many loopholes that void it, you 28
could be perceived as dishonest. Honor all product guaran- 29
tees, even if the conditions are not fully met. Nordstrom 30
takes back any item, with no questions asked. 31
5 Does your staff really know how to serve your cus- 32
tomers? Make sure everyone on your staff knows exactly 33
what kind of service to provide. Review their performance 34
and reward employees for providing good customer 35
service. 36
37
38
39
1
2
Hire a Mystery Shopper
3 G R E AT carol cherry may make her living from
4 shopping, but you won’t catch her at the local mall
5 180 browsing for a gift. “I hate shopping. I can’t remem-
6 I D E A ber the last time I’ve been to a mall,” said Cherry,

7 owner and president of Atlanta-based Shop’n Chek Inc., one
8 of the nation’s largest mystery shopping companies. Busi-
9 nesses hire her firm to see if employees are providing good
10 customer service.
11 Cherry founded the company in 1974, and today it has
12 about 50,000 freelance shoppers in the United States and
13 abroad. They visit restaurants, department stores, gas sta-
14 tions, bowling alleys, and anywhere else people shop, eat,
15 or play. “This industry can really help a small business,
16 especially one with two locations when the owner can’t be in
17 two places at once,” said Cherry, whose client list reads like
18 a Who’s Who of American business. (Client confidentiality
19 precludes her naming any names.)
20 314 Cherry said the industry began years ago as a way for big
21 retailers to learn why certain appliances weren’t selling.
CUSTOMER SERVICE
22 Mystery shoppers are now working in all areas including

23 retail, hotels, and the travel industry.
24 Mystery shoppers are regular folks who are observant and
25 like to deal with people. They are paid per assignment, which
26 involves filling out a detailed questionnaire immediately
27 after a visit. They note how they were greeted by salespeople.
28 They examine the way merchandise is displayed and how
29 salespeople handle their questions, complaints, and returns.
30 Mystery shoppers will also check to see if employees offer
31 information about special promotions or explain company
32 services properly.
33 A good mystery shopping service will spend time learn-
34 ing about your business and how you expect your employ-
35 ees to behave. And it will be objective. Mystery shoppers
36 set their own hours and do the work more for fun than
37 money. A shopper might earn $10 to $20 for a night at a
38 local bowling alley.
39 Many services specialize. For example, Melinda Brody &
Associates in Orlando, Florida, focuses on tourism, travel, 1
and home building. Brody, who worked as an apartment 2
leasing agent and sales trainer, knows the real estate busi- 3
ness, and so she focuses on that. Her partner, Marilyn Whe- 4
lan, works on the hotel accounts. 5
One of their company’s specialties is checking on real 6
estate salespeople. Home builders get permission to tape 7
their salespeople while they are speaking with customers. 8
The salesperson never knows whether that nice couple look- 9
ing to buy a condo are real customers or one of Brody’s mys- 10
tery shopping teams. 11
In its work with hotel chains and resorts around Florida, 12
the group relies on a statewide network of 500 freelance 13
shoppers. The ten-year-old company had its best year yet in 14
1997— its sales approached $1 million. 15
In most cities, mystery shoppers are listed in the Yellow 16
Pages under “shopping services.” 17
18
19
Don’t MakeYour Customers Angry 315 20
G R E AT one of the smartest businesspeople i know 21
is my grandfather, George Coan. He finally retired 22
181 after sixty-six years in the retail business. Yes, sixty- 23
I D E A six years! 24
Coan started his retail career as a teenager, selling clothes 25
on the Lower East Side of New York City. Movie-star hand- 26
some and always a snappy dresser, he worked his way up to 27
store manager and eventually served as vice president of 28
personnel for a major East Coast men’s clothing chain. 29
Soon after he retired and moved to North Miami, he sold 30
leisure wear in a tiny boutique in his condominium com- 31
plex. He offered this great idea based on his experience wait- 32
ing on thousands of customers. “Whatever you do, don’t 33
make your customer angry.” 34
It sounds simple, but so many things in a retail setting 35
can upset a customer. For example, if you make a customer 36
wait too long while you look for their size or obtain a credit 37
approval, they grow impatient. 38
If your salespeople are rude, act bored, or are careless, 39
1 you will alienate customers. Nothing is worse than waiting
2 for a salesclerk to finish a chatty conversation with a col-
3 league or cooling your heels while they blab away on a per-
4 sonal call. Customers are gold to any business. If you do
5 things to upset them, they may walk away and never return.
6 You want every person’s visit to your store to be a pleasure,

7 not a nightmare.
8 With so many alternatives to retail shopping, including
9 mail order and electronic commerce on the World Wide
10 Web, do everything you can to keep your customers coming
11 back, checkbook in hand.
12
13
14
Make House Calls
15 G R E AT
in this high-tech, constantly bustling
16 world, a little personal service goes a long, long way.
17 182 Visiting your clients or customers at their homes or
18 I D E A in their neighborhood gives some businesses a defi-
19 nite edge over the competition.
20 316 Mary Heyob and her husband, Tom, sell crop insurance in
21 the Midwest. Nadya, a Balinese-based clothing designer,
CUSTOMER SERVICE
22 meets her clients in hotel suites across America. First Union

23 National Bank of Maryland sends bankers to set up branches
24 in retirement homes. And London-based Norton & Townsend
25 tailors visit well-off and well-dressed men in their homes and
26 offices. Although they all sell vastly different products, they
27 attribute much of their success to meeting their customers’
28 needs on their own turf.
29 “We see 95 percent of our customers on their farms, all
30 over the state,” said Mary Heyob, who serves as office man-
31 ager and bookkeeper for the Pro Crop Insurance Agency.
32 Because the sale of crop insurance is totally regulated by the
33 Federal Crop Insurance Corp., the prices are set by the gov-
34 ernment. This means the only way the Heyobs can set them-
35 selves apart is by providing terrific service. They know their
36 customers’ needs and meet with them on farms throughout
37 Indiana and western Ohio.
38 Keeping thousands of customers happy is what Nadya
39 does best. Originally from Chicago, the one-name designer
fell in love with Bali while vacationing there in 1978. By 1
1980 she started hiring artists and seamstresses to create her 2
unique, comfortable batiked or hand-painted cotton and 3
rayon clothing. On a visit to New York City, she told me she 4
had 125 people working in two locations, with annual sales in 5
excess of $1 million. 6
Nadya spends about six months creating new lines of 7
clothing, then she hits the road—selling her wares across 8
America. She keeps her overhead low by setting up shop 9
in hotel suites in Los Angeles; Washington, D.C.; San 10
Francisco; Boston; Chicago; and Irvine, California. For 11
more information, go online to Nadya’s website at 12
www.Nadya.com . 13
While banking services are not as glamorous as Balinese 14
fashions, smart banks are sending bankers to nursing 15
homes to serve elderly customers. A branch in Maryland’s 16
Edenwald retirement facility has 500 square feet with about 17
170 safety deposit boxes. 18
Jim Bowe, vice president of American Seniors Housing 19
Association, told the Washington Business Journal that 317 20
seniors are attractive bank customers for several reasons. 21
They have consistent income and have to maintain a cer- 22
tain standard of living to stay in a retirement community. 23
They are a good source of deposits and tend to be very loyal 24
customers. 25
Finally, if you want a fine, custom-tailored English suit 26
brought right to your doorstep, just call Norton & Townsend 27
in London. Their tailors visit busy men in their homes and 28
offices in both London and Manhattan. 29
Think about ways to expand your business by reaching 30
out to customers at home or at their offices. Consider Avon’s 31
tremendous global success: They send representatives in 32
canoes up the Amazon River! Providing any sort of delivery 33
service is a cost-effective way to reach more people. Not 34
many businesses make house calls these days—maybe you 35
should give it a try in your business! 36
37
38
39
1
2 Send Employees to a
3
4
RetailTraining Center
5 finding skilled workers has edged out
G R E AT
6 access to capital as the top small business challenge
7 183 in several recent independent surveys. Now the retail
8 I D E A industry is doing something about it, and every con-
9 sumer who has waited patiently while an unskilled clerk
10 attempted to ring up a sale can rejoice.
11 The nation’s first “retail skills center” opened in 1997 in
12 the King of Prussia mall near Philadelphia. The National
13 Retail Federation partnered with American Express, Kravco
14 Co., the mall developer, and the Commonwealth of Pennsyl-
15 vania to sponsor the hands-on training program.
16 “I’ve heard from employers time and time again that they
17 can’t find workers with the skills to succeed,” then Pennsyl-
18 vania Governor Tom Ridge told members of the National
19 Retail Federation meeting. “This unique partnership helps to
20 318 ensure that this is not the case in King of Prussia. And for
21 those desiring the skills to go to work, the program lends
CUSTOMER SERVICE
22 them that helping hand.”

23 Entry-level employees are taught the basics of customer
24 service and how to make a sale, among other things. Retail
25 federation leaders said the center is specifically designed to
26 help small retailers whose training resources are typically
27 limited and who often hire the greenest, lowest-paid work-
28 ers. If the center is successful, it could serve as a nationwide
29 model. For information, call The National Retail Federation
30 at 202-783-7971.
31
32
33
Demand Great Service fromVendors
34 G R E AT david gumpert, an author, journalist, and
35 website wizard, gave me a great idea when we met
36 184 in Washington, D.C., to celebrate Small Business
37 I D E A Week a few years ago. When he’s negotiating with
38 new suppliers or vendors that he wants to do business
39 with, he doesn’t niggle on price. Instead, he tells them, “I
will pay you top dollar, if you promise to always give me 1
excellent service.” 2
Basically, he’s very clear that he wants his phone calls 3
returned quickly, his supplies delivered on time, and any 4
problems resolved immediately. He said this direct approach 5
really works. People appreciate not being beaten up over 6
price and are happy to respond to his demand for excellent 7
service. He’s willing to pay a few dollars more to be treated 8
like a king. 9
It’s similar to what happens when you need technical sup- 10
port from a hardware or software vendor. You can wait on 11
hold all day by using the free side of their support team, or 12
pay $20 to $30, speak to a real person, and get your problem 13
resolved in minutes. 14
Remember, time is money. And if you’re striving to give 15
your customers and clients top-notch customer service, 16
shouldn’t you expect the same courtesy from your vendors? 17
18
Get to KnowYour 19
20
Customers Personally 319
21
G R E AT
one of the benefits of owning a small 22
business is being able to get to know your customers, 23
185 suppliers, and vendors. When you meet people, jot 24
I D E A down a few personal notes on the back of their busi- 25
ness cards or on Rolodex cards. Ask for their birthdate, fam- 26
ily members, pets, and club memberships. We all like to do 27
business with people who treat us well and seem genuinely 28
interested in what we do and say. When you know some- 29
one’s birthday, send a card. It’s a cheap and wonderful way to 30
keep in touch. 31
What better way to nurture loyalty than to create a person- 32
al connection—it’s important for customers to want to do 33
business with you. That little bit of extra effort can go a long 34
way toward solidifying a long-term contract. 35
Send handwritten notes to customers and clients when- 36
ever possible. The most successful, important people I know 37
put this into practice, and it makes a tremendous, positive 38
impression. One of my busiest friends—a person who has 39
1 one of the top jobs in the country—sent me a one- or two-
2 line note at least once a month. His notes meant a lot and
3 always brightened my day. Of course, I responded with a
4 handwritten note!
5 So spend the time it takes to make that personal connec-
6 tion. It’s worth the effort.

7
8
9
Wrap It Up
10 G R E AT
one of the nicest things you can do for
11 your customers and your business is send them out
12 186 the door with their merchandise beautifully gift
13 I D E A wrapped. It saves customers time and money, and
14 great packaging is one of the smartest and most cost-effec-
15 tive advertisements for your retail business. Think of
16 Tiffany’s signature turquoise box and how much goodwill
17 that has generated through the years.
18 One of my favorite stores is Takashimaya, an elegant
19 Japanese-owned boutique on Fifth Avenue in Manhattan.
20 320 The multilevel store features unique jewelry and clothes, as
21 well as gifts for home, garden, and bath. And, in addition to
CUSTOMER SERVICE
22 its gorgeous merchandise, the store is famous for its perfect

23 gift wrapping.
24 Gift items are swathed in layers of tissue paper and nes-
25 tled into a heavy triangular box. The wrapped packages are
26 then swathed in tissue paper and placed in a signature trian-
27 gular bag. No matter what you buy there, whether it be a
28 candle or $500 earrings, the gift is even more special be-
29 cause of the unique gift wrapping.
30 Craft Company No. 6, Rochester, New York’s dazzling,
31 one-of-a-kind craft gallery, wraps gifts in custom-designed
32 cardboard boxes. Their gift boxes feature a pen-and-ink
33 drawing of the converted firehouse that houses the 6,000-
34 square-foot store. While you are waiting for your gifts to be
35 wrapped, they encourage you to sign up for their mailing
36 list. The store also has a newsletter to keep good customers
37 posted on merchandise, special events, and promotions.
38 As an avid shopper, I’m always surprised when a mer-
39 chant hands me my purchases in a blank paper or plastic
bag. If you can’t wrap merchandise, at least invest in 1
custom bags or order stickers with your logo, address, and 2
phone number. It doesn’t take much to make every customer 3
a walking billboard for your business. 4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
321 20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
9
9
C H A P T E R 9
Going
Global
I f your business is failing, going
global won’t save it. But if your business is poised
for growth and offers a product or service with
universal appeal, read on.
Entering the international marketplace has
never been easier. The U.S. Small Business Ad-
ministration has several export development
programs. There are wonderful books on how to
deal with customs brokers, shipping lines, and
embassies. State and federal agencies, including
the U.S. Export-Import Bank, offer entrepreneurs a
plethora of business development services. Major
insurance companies sell insurance policies
designed to help minimize the risk of doing
business abroad.
Doing your homework is the first and most
important step on the road to international trade.
Find out everything you possibly can about the
country you think you’d like to do business in.
Make sure there are consumers with cash and a
business infrastructure before you book one plane
ticket. Most developed and undeveloped nations
have consuls and business development officials
325
based here and abroad. You can search the
Internet and collect more information than you’ll
need to get started.
The best way to find out what’s going on in
other countries is to speak with other business
owners already doing business overseas. Most en-
trepreneurs are happy to share their horror stories
and victories.
In this section, I cover a few specific countries,
and I share some tips on how not to embarrass
yourself abroad. So read it all before you pack
your bags.
1
2 Expand Production
3
4
South of the Border
5 japanese giants sony, sanyo electric, and
G R E AT
6 Hitachi made headlines by investing hundreds of
7 187 millions of dollars in Mexican border factories, but
8 I D E A hundreds of small U.S. businesses are also taking
9 advantage of Mexico’s affordable skilled labor force. “It’s the
10 big guys and the small guys—the growth is phenomenal,”
11 said Mike Patten, editor of Twin Plant News, a trade maga-
12 zine covering the maquila industry.
13 Shared production plants, known as “maquiladoras,” offer
14 big and small businesses a cost-effective way to boost pro-
15 duction. There are about 3,000 maquiladoras employing
16 about one million workers in Mexico. Employment has dou-
17 bled since the peso devaluation in 1994, according to indus-
18 try experts. The majority of workers are making electronic
19 equipment, automotive parts, textiles, and furniture. Tijuana
20 326 has become the TV production capital of the world, manu-
21 facturing 14 million units a year, according to Business Week.
GOING GLOBAL
22 While it’s easy for megacorporations to deal with govern-

23 ment permits, customs regulations, and cultural and lan-
24 guage problems, working in a foreign country is daunting
25 for most entrepreneurs. Jeff Paul had about one thousand
26 Mexican workers when he was working for a major blue-
27 jeans manufacturer ten years ago. But too many labor and
28 financial problems made it an unpleasant experience.
29 A few years later, Paul, now the president and owner of
30 Sierra Pacific Apparel, decided to return to Mexico. His
31 Visalia, California–based company has 400 workers in Cali-
32 fornia and about 100 in Mexicali, Mexico. Sierra Pacific’s
33 Mexican workers sew jeans for Gap, Old Navy, and Sears,
34 among other customers. Making jeans in Mexico saves Paul
35 about seventy-five cents per garment, but he still faces some
36 challenges. “Our employee turnover in Central California is
37 5 percent a year,” said Paul. “In Mexico, we lose 5 percent
38 a week.”
39 Still, he said, his Mexican workers produce high-quality
jeans, and his customers are satisfied. To make it easy, Paul 1
set up his Mexican operation in partnership with North 2
American Production Sharing Inc. (NAPS), a small Solano 3
Beach, California–based company that helps U.S. companies 4
set up shop over the border. 5
NAPS, founded by Bill Lew and Richard Jaime in 1991, 6
works with about a dozen U.S. companies doing everything 7
from refurbishing telephones to making computer cables. 8
NAPS, which has an office in Tijuana, screens applicants 9
and hires workers, manages the payroll, helps train workers, 10
and even rents buses to collect workers for one client’s sec- 11
ond shift. Best of all, they handle all the permits, payroll- 12
related paperwork, taxes, and customs requirements. 13
But before they’ll help a company move across the border, 14
they spend quite a bit of time evaluating the company’s 15
needs and goals. “We start by helping them understand if it 16
makes sense to be in Mexico,” said Lew, NAPS vice president 17
and a former loan officer for Wells Fargo Bank. “We make 18
sure the client is right for Mexico.” 19
The low labor cost, usually under $3 an hour for assembly 327 20
line workers, is what attracts most U.S. businesses to Mex- 21
ico. But contrary to popular belief, Lew said his clients are 22
not firing U.S. workers and fleeing to Mexico. They head to 23
24
25
If you’re considering setting up 26
a production facility in Mexico 27
28
◆ Carefully calculate your current labor costs. 29
◆ Determine whether unskilled or semi-skilled workers can 30
be trained to make your product. 31
◆ Determine whether you can wait for finished products to be 32
shipped back to the United States or abroad from Mexico. 33
◆ Budget extra money for start-up costs. 34
◆ Find a partner who knows how to work in Mexico. 35
◆ Learn about the Mexican culture and how business deals 36
are done there. 37
◆ Be patient. 38
39
1 Mexico to expand production. “It’s not a zero sum game.
2 Our clients are not closing down U.S. factories,” he said. In
3 fact, he cautions, “Mexico won’t save a company—Mexico
4 will help a growing company.”
5 Ray Noble, president of Storm Products Co. in Santa
6 Clara, California, hired NAPS because he couldn’t find

7 enough assembly workers in northern California. Storm
8 Products makes a variety of cables. Its Mexican operation,
9 which has grown from one to 130 employees, makes com-
10 puter cables for Internet access.
11 “Domestically, it’s very hard to get people to work on
12 assembly lines,” he said. “They [Mexican employees] do an
13 excellent job. The quality is good—we are still working on
14 productivity.”
15 Noble said Storm, which has a total of 500 workers in
16 seven domestic locations, saves about 50 percent on labor
17 costs in Mexico. NAPS found and leased a 20,000-square-
18 foot facility for Storm in the La Mesa area of Tijuana. Noble
19 said he pays more for rent in Mexico than in Los Angeles,
20 328 but the company makes it up on labor costs.
21 Twin Plant News, an El Paso, Texas–based monthly publi-
GOING GLOBAL
22 cation, has been covering the maquila industry since 1985.

23 Subscriptions cost $85 a year. Their address is 4110 Rio
24 Bravo, Suite 108, El Paso, TX 79902 (www.twin-plant-
25 news.com).
26
27
28
Forge an International Alliance
29 G R E AT forging an international alliance is a

30 quick way to expand your business without spending
31 188 a lot of money. The secret is to find a partner who can
32 I D E A share his or her contacts and also understand your
33 vision and integrity. Entrepreneurs in the service sector often
34 have the easiest time striking informal agreements to work
35 together because they are selling time and talent.
36 A few years ago, Manhattan architect William Leeds was
37 introduced to Indian architect Bobby Mukherji by a mutual
38 friend. Mukherji, founder of a five-person firm in Bombay,
39 was interested in entering the U.S. market. Leeds was eager
to tap into India’s thriving economy, which is growing about 1
5.5 percent a year. 2
For several years, the two architects have designed a vari- 3
ety of projects, including a fabric showroom, a trendy Chi- 4
cago restaurant, and a major Indian government office in 5
New York City. They say they both benefit from sharing their 6
clients and talents. 7
“To be working with somebody from a place as far away as 8
India gives us a new perspective on architecture and a new 9
approach to planning,” said Leeds. “Bobby brings in new 10
ideas that we wouldn’t necessarily have at our fingertips.” 11
Besides new ideas, Mukherji provides access to unique 12
Indian building materials and a team of twenty-five Indian 13
craftsman and artisans on his payroll in Bombay. Many 14
Mukherji projects, especially his nightclubs, feature original 15
artwork and hand-carved details. Although they live thou- 16
sands of miles apart, Leeds and Mukherji communicate fre- 17
quently via phone, fax, and modem. 18
“Something that is on our computer screen here in New 19
York City is on his screen in minutes,” said Leeds. 329 20
The firms work together on a project-by-project basis 21
based on a handshake, not a written agreement. They split 22
the expenses and profits depending on who does what. Joint 23
projects with Mukherji comprise about 10 percent to 15 per- 24
cent of Leeds’ total billings. 25
Leeds hopes that eventually 25 percent of his total projects 26
will be in conjunction with Mukherji’s firm. Both say one of 27
the great benefits of the relationship is acting as each other’s 28
marketing representatives in the United States and India. 29
“We look out for his interests and help him to grow,” said 30
Leeds. “In India, Bobby helps us because he can usually 31
determine who is real and who is not. Between the two of us, 32
we can accurately target the right clients.” 33
Finding the right international partner requires a combi- 34
nation of luck and skill. One way to make connections 35
abroad is to sign up to participate in a government-spon- 36
sored trade mission (see Great Idea 192). The Department 37
of Commerce and the U.S. Small Business Administration 38
organize and send high-level government representatives 39
1 on several missions a year. You can find out what’s being
2 scheduled on the SBA’s website (www.sba.gov). Business
3 owners pay for all their travel expenses, but the govern-
4 ment sets up appointments and escorts the business own-
5 ers, who travel as a group.
6 You can also contact the Department of Commerce’s

7 commercial officer assigned the country or countries
8 where you want to do business. These country experts are
9 usually fluent in the language and happy to make introduc-
10 tions between U.S. businesses and compatible companies
11 abroad. Visit the agency’s site (www.home.doc.gov ) for
12 more information.
13
14
15
DoBusiness in India
16 G R E AT all types of american entrepreneurs should
17 be exploring ways to tap into India’s thriving econo-
18 189 my, according to Bobby Mukherji (see Great Idea
19 I D E A 188). A growing middle class of 300 million is eager
20 330 to buy American goods ranging from computers to clothing.
21 Business expansion is rampant in Bombay, New Delhi, and
GOING GLOBAL
22 Bangalore, where there is a vast pool of cheap, skilled labor.

23 But before making a trip to India, he suggests doing
24 extensive research into its history and culture. He said many
25 foreigners are astonished by the massive poverty in the
26 midst of great wealth. “An American who has never been
27 exposed to the Indian culture will find the conditions
28 extremely different from anywhere else in the world,” said
29 Mukherji.
30 He recommends hiring a driver to get around, but there is
31 no need for an interpreter because most Indians speak Eng-
32 lish. Still, be prepared for challenges. The business infra-
33 structure is far from modern. Power outages are frequent,
34 and there are only about 20 million phone lines for a country
35 of 900 million people.
36 “India is an extremely friendly, social place,” said Mukher-
37 ji. “Personal relationships are very important. There is a lot
38 of weight given to word-of-mouth agreements, and people
39 respect that.”
1
More thoughts on India 2
3
BOBBY MUKHERJI has these additional tips for Ameri- 4
cans interested in doing business in India: 5
◆ Learn how India’s Foreign Exchange Regulation Act 6
affects financial transactions. 7
◆ Find an accountant who is familiar with Indian account- 8
ing rules and regulations. 9
◆ Cultivate personal relationships. Bring American-made 10
gifts that are not widely available in India. 11
◆ Make sure your Indian business partner has a good repu- 12
tation, as well as good contacts. 13
◆ Learn as much as you can about the culture and what to 14
expect before making travel plans. 15
◆ Book hotels in advance. Many, especially in major cities, 16
are filled with foreign businesspeople. 17
◆ Be on the lookout for torn or damaged bills. Many mer- 18
chants won’t accept holey money. (Banks staple the notes, 19
and the staples often rip up the bills.) 331 20
21
If there’s a specific country you’d like to do business in, 22
contact the U.S. Commerce Department and speak to a 23
trade officer. Most officers are assigned to a particular 24
nation or region, and they can put you in touch with 25
prospective contacts. 26
You can also call the commercial attachés assigned to 27
most embassies in the United States. Most countries want to 28
encourage trade with the United States, so they will send a 29
businessperson along with the ambassador. 30
31
32
Explore Opportunities in Russia 33
G R E AT if you want to understand the challenges 34
of doing business in Russia, consider this: Although 35
190 new ATM machines adorn major boulevards in 36
I D E A Moscow, most people are reluctant to use them. Fear 37
of being robbed is one reason, but that’s not all. Until 1997 it 38
was legal to drive your car on the sidewalk. In light of that, 39
1 what Muscovite in their right mind would line up on the
2 sidewalk in front of an ATM machine?
3 In addition to impossible traffic jams and crime, Russia’s
4 corrupt politicians, lack of a business infrastructure, and
5 crippling bureaucracy pose real challenges. In 1997, a few
6 weeks after I returned from a five-day trip to Moscow (to

7 speak at a U.S. Agency for International Development–
8 sponsored conference promoting entrepreneurship), this
9 headline appeared in The New York Times business section:
10 “Russia Punishes Eleven Financial Concerns.”
11 The story reported that Russia’s central bank refused to do
12 business with eleven Western financial institutions because
13 apparently they had failed to honor international securities
14 deals. Chase Manhattan and J.P. Morgan were among the
15 U.S. banks in trouble with the Russians. By the time you
16 read this, the dispute will certainly be resolved, but it illus-
17 trates how precarious the Russian economic system is,
18 despite lip service promoting the free market.
19 No matter how tough it is, doing business in Russia
20 332 has tremendous appeal to Western entrepreneurs. Since
21 1993 the Russian Federation, especially modern Russia,
GOING GLOBAL
22 has welcomed Westerners and their cash. But wanting

23 to do a deal in Russia and actually doing it are two differ-
24 ent stories.
25 There are myriad roadblocks awaiting the swarms of
26 U.S. businesspeople packing Delta’s daily nonstop flights
27 from New York City to Moscow. For instance, while stand-
28 ing in line waiting to board the flight home, I overheard an
29 engineer from Illinois Power and Light describing how the
30 Russians wanted them to build a desperately needed
31 nuclear power plant. After ten years of work, however, only
32 one cooling tower and a section of one building were com-
33 plete. The Russians really wanted to do business with the
34 utility, but had no money and apparently were hoping for a
35 barter deal.
36 A few years ago, Mary Heslin, an American business
37 consultant, opened her Limpopo drop-in daycare center in
38 a suburban Moscow community center to protect herself
39 and her employees from the Mafia. Unlike American day-
care centers, her facility has a highly educated staff, includ- 1
ing a doctor and an engineer, tending kids and hosting 2
birthday parties. 3
It took $4,000 and nearly a year to obtain the permits she 4
needed to open the center, but things are going well. She 5
hopes to open more around Moscow. 6
If you have a product or service that you think will appeal 7
to Russians, start doing your homework now. You can call 8
the U.S. Commerce Department and ask to speak to a trade 9
specialist. The U.S. Agency for International Development 10
also has assistance programs for people wanting to do busi- 11
ness in Russia. 12
Officially, you need an invitation from a Russian firm or 13
individual to obtain a business travel visa. However, there are 14
several U.S.–based companies who can easily facilitate that. 15
The Russia House in Washington, D.C., for example, needs 16
eight to ten days’ notice, a copy of the first two pages of your 17
U.S. passport, three passport photos, and $195 to provide a 18
one-trip visa. 19
Do try to arrange for a colleague or the hotel driver to pick 333 20
you up at the airport. The taxi drivers who greet new arrivals 21
allegedly are mafia-controlled. If you go with them, you risk 22
getting ripped off or worse, a Moscow friend told me. 23
Here are some resources if you are interested in doing 24
business in Russia: 25
Websites 26
◆ American Chamber of Commerce in Russia: www.amcham.ru 27
◆ Russian-American Chamber of Commerce: www.russianamer 28
icanchamber.org 29
◆ Business Collaboration Center: www.bcc.ru 30
31
U.S–based business development groups 32
◆ Citizen Democracy Corps: 202-872-0933 33
◆ Deloitte & Touche is working with USAID on several business 34
development programs: 202-879-5600. 35
36
37
38
39
1
2 Learn about aCulture
3
4
before Doing Business
5 sometimes an international business deal
G R E AT
6 that makes perfect sense falls apart for no apparent
7 191 reason. The numbers look good, but personalities
8 I D E A clash, or someone says something that sends the deal
9 spinning out of control.
10 The problem may be caused by a breach of business eti-
11 quette, according to experts in protocol and negotiation.
12 “About 80 percent of all business owners going abroad fail to
13 complete a deal because they don’t do their homework,” said
14 Syndi Seid, founder of Advanced Etiquette in San Francisco.
15 Frank Acuff, author of How to Negotiate Anything with
16 Anyone, Anywhere Around the World (AMACOM; 1997)
17 agrees. “American culture focuses on the logical part of the deal,
18 but in other cultures the relationship comes first,” said Acuff,
19 director of Human Resources International based in Oakbrook
20 334 Terrace, Illinois. Knowing how to act in a foreign business situa-
21 tion is critical to your success, he said, especially since many
GOING GLOBAL
22 entrepreneurs are thinking globally for the first time.

23 Acuff said Americans are considered too open and direct
24 by most foreigners. “We are not widely regarded for our
25 business savvy in other parts of the world.” For example,
26 Americans often complain that Japanese businesspeople
27 do not look them in the eye. But the Japanese consider
28 looking directly at someone to be a sign of disrespect,
29 according to Acuff.
30 “Some countries, like China, have a strong need for
31 harmony,” he said. “So they may agree to do something, but
32 not comply with the terms of the agreement.”
33 He said Americans are often frustrated when foreigners
34 have a totally different concept of time. Americans, Ger-
35 mans, Swiss, and Australians tend to be prompt and expect
36 meetings to begin on time. But Latin Americans, for
37 instance, usually begin meetings a half hour after the
38 appointed time and can’t understand why their American
39 guests are so agitated.
Another common problem: Americans prefer to have 1
about three feet of space around them, Acuff said. Yet Latin 2
Americans and Middle Easterners often embrace their busi- 3
ness associates, which upsets many American men. 4
So take the time to learn as much as you can about a 5
country before you book your plane ticket. You’ll save money 6
and time by being a savvy traveler. 7
Acuff offers these tips for entrepreneurs thinking of 8
doing business abroad: 9
◆ Before visiting a foreign country, talk to people who have 10
done business there to learn firsthand about their experiences. 11
◆ Meet with people from the country you are planning to visit. 12
Ask them what they like and don’t like about doing business 13
with Americans. 14
◆ Do your homework. Learn as much as you can about the cul- 15
ture and customs of the country you are planning to visit. 16
17
18
Go on aTrade Mission 19
G R E AT
“going global” is a popular buzz phrase, but 335 20
talking about doing business abroad is much easier 21
192 than actually doing it. 22
I D E A One smart way to explore the overseas market is to 23
go on a government-sponsored trade mission. Every year, the 24
Department of Commerce’s International Trade Administra- 25
tion invites selected entrepreneurs in search of new business 26
to travel to foreign countries. 27
Business owners apply for a slot on the trip and pay all 28
their own travel expenses. The government organizers find 29
appropriate local business contacts and set up an intense 30
schedule of meetings, tours, and receptions. A high-ranking 31
official usually accompanies the group. 32
Although most trade missions are coed, the White House 33
has been organizing special missions just for women busi- 34
ness owners. Missions have headed to London, Amsterdam, 35
Paris, Milan, and Mexico City in recent years. 36
“The Women in Trade Business Development Missions 37
create a level playing field for mission members to network 38
with each other, as well as with buyers and sellers in interna- 39
1 tional markets,” said Alexis Herman, former director of the
2 White House Office of Public Liaison and current Secretary
3 of Labor. Herman, who has escorted business owners, said
4 the women-only missions were created by President Clinton
5 and former Commerce Secretary Ron Brown.
6 Glenda Binkley, owner of D&H Electronic Systems Inc. in

7 Mount Juliet, Tennessee, went on trade missions to Amster-
8 dam, Mexico, and London with Herman. “My objective was
9 to gather data and look at the market potential,” said Binkley.
10 Before making any deals or decisions, she needed to know
11 how to adapt her security systems and other electronic prod-
12 ucts for sale and use in European countries. Other countries
13 have different electrical systems, safety requirements, and
14 fire codes. Since visiting Europe, she’s begun modifying
15 some of her products for future export. She is also asking the
16 manufacturers she buys equipment from to think about
17 redesigning their products for export.
18 In addition to collecting the technical information she
19 needed, she attended a variety of receptions and business
20 336 meetings to acquaint herself with business opportunities.
21 “The embassies took our product brochures and matched
GOING GLOBAL
22 them with prospects,” she said.

23 Lori Foster, who owns a gift business and a juice business
24 in San Francisco, went with Binkley on the mission. She
25 returned from Amsterdam with memories, souvenirs, and a
26 contract to sell her juices to a Dutch grocery chain.
27 “The business deal happened within two weeks of coming
28 home,” said Foster, founder of Creative Juices, which makes
29 upscale beverages. Her juices are sold at Nordstrom and
30 Neiman Marcus stores in San Francisco, as well as other out-
31 lets. She’s also looking into ways to manufacture her juices
32 abroad to save the cost of shipping them from the United
33 States.
34 “Every single minute was filled with interview possibili-
35 ties, business contacts, and meeting people,” said Foster,
36 adding that because the women on her mission all made
37 something different, there was no competition, just a lot of
38 good feeling. “It was nonstop business in a very pleasant way
39 from the minute we got on the plane,” she said.
For more information on the women’s trade missions, 1
contact the International Trade Administration in Washing- 2
ton, D.C.; 202-482-5479. 3
The Commerce Department sponsors trade missions for 4
all kinds of entrepreneurs. Missions for minority business 5
owners are organized through the “Matchmaker” program, 6
which has taken business owners to Mexico, Canada, and 7
South America. For information, call 202-482-0692. 8
The Export-Import Bank offers various programs for 9
business owners, including financing and insurance poli- 10
cies designed to protect small exporters against political and 11
commercial risks. The bank is based in Washington, D.C.; 12
202-565-3946. 13
A tremendous amount of information is available by call- 14
ing the Commerce Department’s Trade Information Center 15
at 800-USA-TRADE. The TIC coordinates information from 16
nineteen federal agencies. Call to receive information on var- 17
ious countries via fax or to speak with a trade representative. 18
The center provides export counseling, advice on export 19
licenses and controls, market research, and trade leads. 337 20
Check out the TIC website at www.ita.doc.gov/tic. 21
22
23
TranslateYour Marketing Materials 24
G R E AT one of the biggest mistakes business 25
owners make is not hiring native speakers to create 26
193 marketing materials destined for foreign markets. In 27
I D E A the 1970s Chevrolet made a legendary cultural faux 28
pas when it decided to market the Chevy Nova in Mexico. 29
The family car was a big hit in the United States, but the 30
Mexican advertising campaign was a total disaster. Why? 31
Because “no va” in Spanish means “no go.” 32
Another famous goof involved a soft drink company that 33
used a photograph of a happy family dressed in white clothes 34
to push its sodas in Japan. The ads were beautiful, but white 35
is the color of mourning in Japan, and the campaign was 36
offensive. 37
If you are going to spend thousands on marketing materi- 38
als, spend some more up front to make sure you are saying 39
1 just the right thing. You should avoid using slang at any cost.
2 It’s easier than you think to find people who are fluent
3 speakers in whatever language you need. You can hire
4 university graduate students or professional translators.
5 Most translators charge by the project, and their fees are
6 negotiable.
7 You might want to call the consulate of the country you
8 are preparing materials for and ask if they can recommend a
9 native speaker who freelances. Advertising agencies and
10 marketing consultants who specialize in target marketing
11 often have a stable of skilled linguists on call.
12 Above all, be sure to do your homework and learn every-
13 thing possible about the culture; you don’t want to end up
14 offending the people you are trying to attract.
15
16 Abide by the Etiquette
17
18
of InternationalTrade
19 G R E AT with everyone buzzing about international
20 338 trade, it helps to know the DO’s and DON’Ts of con-
21 194 ducting business abroad. I asked my friend Syndi
GOING GLOBAL
22 I D E A Seid (see Great Idea 191) for a few specific ideas to

23 share with you.
24 ◆ Avoid calendar confusion. One of the most confusing
25 things about dealing with foreign businesspeople is the way
26 they note the date. In many countries, people put the day,
27 month, and year, rather than the U.S custom of writing
28 month, day, and year. One good way to avoid confusion is to
29 write a date like this: 5 February 2002. This can save you the
30 grief of a missed appointment or conference.
31 ◆ Bring a gift. Many foreigners will expect you to present
32 them with a gift before any real business can be done. “Con-
33 sider the person’s heritage, religion, and culture before
34 choosing a gift,” advises Seid.
35 For instance, items made of cowhide are verboten in India
36 because cows are considered sacred. Never give a Chinese
37 person a clock, because if it stops, it’s considered bad luck.
38 And don’t give letter openers or sharp objects to Mexicans.
39 They consider that offensive. So what is the best universal
gift? Chocolate! If it’s too hot to bring chocolate, try a well- 1
crafted business accessory. 2
Don’t wrap your gifts before you leave home because you 3
may be asked to open them by picky customs officials. “Take 4
paper and simple ribbon along to wrap it after you arrive,” 5
Seid advises. 6
◆ Treat shopkeepers with respect. All small business own- 7
ers will appreciate this international etiquette tip. Always 8
acknowledge the person standing behind the counter when 9
you visit a shop. “Americans have often been criticized for 10
being rude because we don’t say anything to the clerk or 11
cashier,” said Seid. “Most small stores throughout the world 12
are owned by husbands and wives and often staffed by fam- 13
ily members. It is customary for visitors to greet the shop- 14
keeper when entering the store and say goodbye, even if you 15
don’t buy anything.” 16
Seid’s business, Advanced Etiquette, is located at 1168 17
Clay Street, San Francisco, CA 94108-1406; 415-346-3665. 18
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C H A P T E R 1 0
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1
2 HERB KELLEHER
3
4
Be a Maverick inYour Industry
5 herb kelleher, his friend rollin king,
G R E AT
6 and banker John Parker sketched out the idea for
7 195 Southwest Airlines on a cocktail napkin in a bar.
8 I D E A True story.
9 They began with one simple notion: If you get your pas-
10 sengers to their destinations when they want to get there, on
11 time, at the lowest possible fares, and make darn sure they
12 have a good time doing it, people will fly your airline. Kelle-
13 her, now chairman of the fifth-largest U.S. airline, said he
14 liked the idea because he had admired the way the now-
15 defunct Pacific Southwest Airlines pioneered cheap, short-
16 haul service throughout California.
17 Doing the same thing in Texas generated a firestorm of
18 industry opposition and a tangle of government red tape. But
19 Kelleher fought on. In 1968, after much wrangling, the
20 342 Texas Aeronautics Commission finally approved Southwest’s
21 plan to fly between three cities. But the next day, competing
GREAT IDEAS FROM VIPS
22 airlines went to court and got a temporary restraining order

23 against Southwest. It took three years to clear up the legal
24 mess, but Southwest finally got off the ground.
25 Service began June 18, 1971. Of course, the rest is history.
26 His formula of frequent, cheap, no-frills service has paid off.
27 In a cyclical and often depressed industry, Southwest has
28 been profitable more than twenty-five years in a row.
29 Southwest has broken so many traditions it’s tough to list
30 them. They fly only 737s to cut down maintenance costs. By
31 not assigning seats, they can turn a flight around in twenty
32 minutes. Southwest’s quick turnaround time allows for
33 more than 2,200 flights a day to sixty cities. They open the
34 front and back doors to let people on and off faster, and they
35 serve only peanuts and a few kinds of drinks.
36 Although it flies to only twenty-five states, Southwest
37 boasts the best safety record and youngest airline fleet in
38 the business. Southwest was the only major carrier in 1990,
39 1991, and 1992 to make net and operating profits. It
became a major airline in 1989 when it exceeded the bil- 1
lion-dollar revenue mark. 2
“Our people were perfectly aware that our company could 3
cease to exist at any given time,” Kelleher told Success maga- 4
zine. “In that kind of environment, you come together as a 5
band of warriors.” 6
To land an exclusive account with Sea World of Texas, 7
Southwest painted a model airplane to look like Shamu, the 8
killer whale. When the deal was signed, they painted a real 9
plane the same way. They also painted the Texas state flag 10
across a 737 named Lone Star One to celebrate their twenti- 11
eth anniversary. 12
Today, Southwest Airlines is a member of the Fortune 500 13
and and was ranked in the “The 100 Best Companies to 14
Work For in America” in 1993. Kelleher has succeeded in his 15
business by setting himself apart, by being unconventional 16
and charismatic. Although this approach won’t work for 17
everyone, if it suits your personality and your business, why 18
not be a maverick? 19
343 20
21
MURIEL SIEBERT 22
23
Find the BusinessThat’s Right forYou 24
G R E AT in 1967 muriel siebert became the first 25
woman to own a seat on the New York Stock 26
196 Exchange. A true pioneer in finance, she was made a 27
I D E A partner in a major Wall Street brokerage firm, yet was 28
turned down when she originally sought sponsorship for her 29
application for a seat on the NYSE floor. 30
Today her thriving investment management company 31
offers discount brokerage services, online financial transac- 32
tions, advice for individual investors, industry newsletters, 33
and a lot more. 34
Muriel Siebert devotes her time to many areas besides 35
finance. Her credits are far too numerous to list, but her 36
dossier includes honorary doctorates, fellowships, trustee- 37
ships, and directorial positions in public and private sectors. 38
She was gracious enough to contribute this sage advice: 39
1 If you don’t really know what you’re good at, starting a small
2 business is an expensive way to find out. A burning desire to
3 be your own boss may be a necessary condition for taking the
4 plunge as an entrepreneur—but it’s not sufficient for success.
5 The Greek sages said “Know Thyself”—that is indeed the
beginning of wisdom. Before going out on your own, I rec-

6
ommend taking some serious time off to explore your areas
7
of strength and weakness.
8
I’ve come to identify four areas of ability which distin-
9
guish most people. In my experience, people are good at
10 working with either words, numbers, things, or people.
11 If you’re fluent with well-chosen words, why not create
12 conferences or training seminars in fields where you can do
13 some public speaking? If you already have some experience
14 in a particular field, use your strong verbal skills to share
15 your knowledge.
16 If you’re comfortable crunching numbers and enjoy
17 detailed analytic work, how about concentrating on the fast-
18 growing audit business? You can analyze utility bills, hospital
bills, mortgage payments, and all the other daunting docu-
19
ments that people hate to handle. The beautiful part is that
20 344 this work can be done part-time. Or if you are at least average
21
in handling numbers, train as a financial planner.
22
Were you born with golden hands? If you can fix anything
23 from leather to lampshades, a repair business may be your
24 bag. Even in our affluent society, folks don’t like to throw
25 things away. You might want to sublease some space from a
26 mall merchant—you’ll both benefit from each other’s traffic.
27 Finally, if you are great with people, consider signing on as
28 an independent sales rep for a company whose product you
29 respect, especially if you are handy enough to demonstrate it.
30 You may have noticed that entrepreneurs need to com-
31 bine several strengths to launch their ships—and to avoid
steering courses where their weaknesses will wreck them.
32
Match your own strength to the opportunities popping up
33
around you, as lifestyles change along with the economy. Test
34
your idea. Don’t commit to a long lease or expensive equip-
35
ment until you are certain that the idea is viable.
36 No matter how favorable the financing terms may be, how
37 glowing the prospects of the industry, if a prospective busi-
38 ness bores you or scares you, step away from it.
39
This advice is born from decades of experience. Siebert 1
proved herself to be an entrepreneurial risk-taker from the 2
very start of her business career. To learn more about the 3
“First Woman of Finance,” check out Siebert & Company’s 4
website at www.msiebert.com. 5
6
7
8
MIKE BLOOMBERG
9
Stick toYour Guns and 10
11
KeepYour Ideas Simple 12
G R E AT michael bloomberg is a genius whose 13
success is an inspiration for all entrepreneurs. His 14
197 achievements exemplify the American Dream—start- 15
I D E A ing a business from scratch and earning billions. 16
And since this interview, Bloomberg has gone on to run an 17
even bigger operation: the City of New York. 18
After some sticky personality clashes and the sale in 1981 19
of Salomon Brothers to Philbro Corporation ended his fif- 345 20
teen-year career there, Bloomberg, with about $10 million in 21
hand, set out to develop the premiere, proprietary informa- 22
tion system for traders and savvy investors. Hence, the 23
beginning of Bloomberg Financial Markets. 24
There are about 157,000 Bloomberg terminals in use 25
around the world today, providing current data on a myriad of 26
subjects that matter most to traders, brokers, analysts, and 27
investors. Once focused exclusively on financial market data, 28
the Bloomberg system of today also offers news stories, multi- 29
media reports, apartment listings in New York City—it even 30
helps you send flowers. The amount of financial information 31
and general resources available on the Bloomberg system, and 32
the level of customer service that is offered, is astounding. 33
I know Mike personally and was able to watch him in 34
action on a regular basis when I was a producer/reporter 35
on Bloomberg’s small business TV program. Of course, I 36
took appropriate advantage of my time at Bloomberg to get 37
into the mind of the master and ask him to share some of 38
his ideas on business for aspiring entrepreneurs. 39
1 “Do something simple that you can really define,” he said,
2 twirling his reading glasses. “Sitting in your office, ponder-
3 ing momentous, abstract ideas doesn’t always work.” You
4 need to keep it straightforward, particularly in the initial
5 stages, and then you can build from there, he said.
6 It’s also essential to share your dreams openly and stick to

7 your game plan. “I went out and said to someone, ‘I’m going
8 to do it,’” he said. “Then I did it.”
9 “It” is a continually growing multimedia communica-
10 tions company with nearly 7,000 employees and annual
11 sales approaching $3 billion. The company buzzes with
12 innovation. If you go away from Bloomberg’s New York City
13 office for three days, you won’t recognize the place when
14 you return.
15 As soon as a newly expanded area opens up, it’s filled with
16 people, phones, and equipment. The kitchen, known world-
17 wide for its unlimited supply of free snacks, fresh fruit, and
18 beverages, bustles with visitors and staffers from early morn-
19 ing to long past dinnertime.
20 346 Need a Coke? A raspberry truffle? A phone to call to Los
21 Angeles? Just hang out in the Bloomberg kitchen and recep-
22 tion area and do your thing. You never know who you’ll meet
23 or bump into. The structure is deliberate.
24 “Walls and titles act as barriers,” said Bloomberg. That’s
25 why open space is the rule around the office.
26 Although it appears that the company took off like a rock-
27 et from the beginning, Bloomberg said it took years to build
28 the business because “we didn’t try to do everything at once.”
29 Perfecting and updating the Bloomberg system takes top
30 priority. The company spends about $30 million a year on
31 research and development.
32 The radio, television, and publishing operations are the
33 toddlers in the Bloomberg family. Bloomberg Television
34 provides twenty-four hours of news every day through
35 national cable distribution, USA Network, DirecTV, and
36 the Bloomberg terminal. Bloomberg News Radio is syndi-
37 cated through more than 200 affiliates worldwide and airs
38 on Bloomberg 1130 AM in New York. The company pub-
39 lishes four magazines for consumers and professionals
and books focused essentially on finance and business. 1
“You’ve got to sit back and do things carefully,” advised 2
Bloomberg. “You can’t jump to the endgame.” 3
4
TOM PETERS 5
6
Two Great Ideas 7
G R E AT
tom peters, best-selling author, high-level 8
consultant, entrepreneur, and speaker, was in a state 9
198 of transition when we met in New York City in the 10
I D E A summer of 1997. He had just sold The Tom Peters 11
Group, the training side of his Palo Alto–based communi- 12
cations business and was devoting most of his attention to 13
his new company, a textile and bedding venture owned by 14
his wife, textile designer Susan Sargent in Pawlett, Ver- 15
mont. Previously, Peters worked for McKinsey & Company, 16
a management consulting firm, where he eventually 17
became a partner. 18
Taking a cue from the Japanese, Peters adopted manage- 19
ment strategies which he teaches around the world. Since 347 20
he’s been a sharp observer of the changing business world 21
for many years, he has offered two great ideas for small busi- 22
ness owners. 23
1 Focus on a creative brand design. “Produce first-class 24
marketing materials for your company,” he said. “Find an 25
innovative, young design team on Day One to create a Star- 26
bucks/Nike kind of feel for the enterprise.” Then put your 27
very cool image on “everything from the website, to the 28
nameplate, to the business cards.” Although graphics and 29
printing are costly, “spend the money whether you are run- 30
ning a twelve-table restaurant, a three-person company, or 31
anything in between.” 32
2 Look beyond credentials. “The great people at business love 33
hanging around people,” he said. So, when you are building 34
your team, “my advice is, ‘forget the certificates.’” 35
He said when he and Susan began advertising for their 36
first administrator for their textile business, “I stole the 37
words from Steve Jobs, and I said, ‘this is a company that 38
from Day One intends on being insanely great, and if you’re 39
1 not insanely great—don’t even think about applying.’”
2 “Well,” he said with a grin, “that draws in some flakes
3 you wouldn’t touch with a twenty-meter pole—on the
4 other hand, it was great to see the responses from all over
5 the map.”
6 Before racing off to keynote another business conference,

7 Peters had these parting thoughts for us: “I think it’s the
8 halcyon years for entrepreneurial firms,” he said. But “you
9 gotta be damn good at something. Your ‘it’ has to be fabu-
10 lously special.”
11
12
13 HARVEY MACKAY
14
15
Benefit fromVolunteerism
16 G R E AT from envelope salesman to best-selling
17 author of Dig Your Well Before You’re Thirsty (Dou-
18 199 bleday; 1999) to entrepreneurial guru, Harvey Mack-
19 I D E A ay makes a big impact on the business world every
20 348 day. He’s always selling. Selling himself, selling his books
21 and columns and, of course, selling his envelopes. Among
22 his pursuits, Mackay is a founder and major partner in

23 Cogni-Tech Corporation, a company that develops and dis-
24 tributes computer software.
25 He admits that after he completes his big-ticket, cus-
26 tomized corporate presentations, he follows up later with the
27 decision makers and usually lands a big envelope account for
28 his Minnesota-based company, Mackay Envelope Corpora-
29 tion, founded in 1959. He’s also pushing “Sharkware,” his
30 contact management software, as an easy way to keep track
31 of all those people you meet.
32 But although he’s known for his for-profit ventures, he
33 also knows how to give back to the community. A veteran
34 networker, Mackay believes strongly in the power of volun-
35 teerism.
36 “I’ve spent 25 percent of my life in volunteerism,” Mackay
37 said. “When I started, I didn’t realize that I would become a
38 better speaker because I had to lead. I became a better sales-
39 person because I had to raise money from all my friends.”
Mackay, who has served on many charitable and cultural 1
boards, recommends joining a group you have an interest in 2
or aiding a cause you feel passionate about. If you’ve lost rel- 3
atives to cancer, raise money for cancer research. If you 4
adore modern art, become a benefactor. Try ushering at your 5
church or synagogue. It takes so little time—and it can bring 6
you into contact with a lot of new people. 7
“Believe it or not, you’ll become a better networker, 8
you’ll have more contacts, and you’ll also be doing good.” 9
Mackay’s moral: “There can be surprising rewards for 10
thankless jobs.” 11
12
13
WALLY AMOS 14
15
Reinvent Yourself 16
G R E AT
on march 10, 1975, at 7181 sunset boulevard 17
in Hollywood, Wally Amos, showbiz talent manager, 18
200 became Famous Amos, the Cookie Man. Using his 19
I D E A Aunt Della’s chocolate chip cookie recipe, Amos sold 20
349
deluxe cookies for the unheard of price of $3 a pound. 21
Celebrities and locals alike lined up to buy Famous Amos 22
cookies. Sales skyrocketed. Media attention drove sales as he 23
increased production to keep up with demand. 24
But the initial success wasn’t enough to keep the com- 25
pany in Amos’s hands. Looking back, Amos sees clearly why 26
he lost control of the company ten years later. 27
“I was irresponsible in the management. I really wasn’t 28
focused on the core business. I was doing audiocassette 29
tapes, television shows, and I was focused on getting into a 30
movie,” he admitted. 31
After going through four management changes from 32
1985 to 1988, his original venture was eventually acquired by 33
a Taiwanese food conglomerate, which still sells cookies 34
under the Famous Amos brand. 35
Because he was the living brand and image of the cookie 36
company, the new owners sued Amos to keep him out 37
of the cookie business. He went to court and eventually 38
won the right to use his name for other ventures, including 39
1 a line of dolls named Chip and Cookie.
2 Although he can’t bake cookies, Amos and his partner,
3 Lou Avignone, are back in the baking business under the
4 brand “Uncle Wally.” They sell fat-free and sugar-free
5 muffins baked in Bohemia, New York.
6 “Now, I’m the muffin man,” laughs Amos. “I didn’t plan

7 it. Circumstances created it. And you have to go with what
8 works.... I believe if you have an idea and focus on achieving
9 your goal, your whole energy is focused on doing it, and
10 ideas just come to you.”
11 He is determined to avoid making the same mistakes he
12 made twenty years ago. He says he finally has a great man-
13 agement team that keeps him busy with marketing and pro-
14 motion.
15 “You never know what the hell is going to happen. Life is
16 unpredictable, yet we spend much of our time trying to pre-
17 dict it. I have no regrets. I’m still feeling good. And for Uncle
18 Wally, the future looks fantastic.”
19
20 350 LILLIAN VERNON
21
Take Some Advice from
22
23
24
the Mail-Order Queen
25 G R E AT the first thing i thought when i met
26 Lillian Vernon was, “Wow, I hope I have as much
27 201 energy and look as great as she does when I’m older!”
28 I D E A This petite powerhouse of the mail-order industry
29 started her business on her kitchen table in the early 1950s.
30 She was pregnant and needed to earn money, but working
31 outside the home was frowned upon at the time. Her father
32 was in the leather business, and she thought she could make
33 money by selling his fashion accessories.
34 Taking a risk, she placed a $495 ad in the September
35 1951 issue of Seventeen magazine: “Be the first to sport that
36 personalized look on your bag and belt,” read the ad tout-
37 ing a $2.99 leather purse and $1.99 belt. That ad, placed
38 by Vernon, a suburban New York housewife and mother,
39 garnered $32,000 worth of orders—a huge amount of
money at the time. It also launched a mail order empire. 1
“I make quick decisions based on my golden gut,” said 2
Vernon, who named her firm after the New York suburb of 3
Mount Vernon where she lived. Later in life, she changed her 4
name legally from Lillian Hochberg to Lillian Vernon. 5
In several interviews, the feisty entrepreneur told me how, 6
despite a lack of formal business training, she turned 7
$2,000 in wedding money into a successful mail order busi- 8
ness serving 18 million customers. “To this day, I don’t know 9
how to read a financial statement,” she admits. “I still need 10
help with the numbers.” 11
She doesn’t need any help selecting merchandise. Every 12
year, hundreds of items are submitted by eager vendors. 13
Only a fraction ever make it into her slick catalogs. Her 14
biggest hits are the items she dreams up herself. For exam- 15
ple, once Vernon received 120,000 orders for the Battenburg 16
lace Christmas tree angels she designed. Not bad for a Jew- 17
ish woman whose family fled their comfortable life in 18
Leipzig, Germany, after the Nazis threw them out of their 19
home in 1933. 351 20
Vernon’s rags-to-riches story is detailed in her amazing 21
autobiography, An Eye for Winners (Harper Business; 1997). 22
Vernon’s book stands apart from many autobiographies 23
because it combines intimate and often painful details of her 24
life story with practical business advice. 25
Known for her sharp wit and strong support of Demo- 26
cratic politics, Vernon told me her company has flourished 27
by finding the right professional managers to complement 28
her entrepreneurial style. But the process hasn’t been easy. 29
“At one point, I surrounded myself with experienced veter- 30
ans of large corporate cultures,” she said. “Unfortunately, 31
they almost killed us—they took analysis to the point of 32
paralysis.” 33
Now she relies on a team of skilled managers, including 34
her two sons, to help her manage the Rye, New York–based 35
company. Times have changed since she started the busi- 36
ness. In the 1950s there were about fifty specialty catalogs; 37
now, there are nearly 10,000, generating about $70 billion 38
a year. 39
1 The tough competition keeps Vernon busy. A few years
2 ago, she said, 89 percent of the items in her catalogs made
3 money; today the percentage has dipped to about 79 percent.
4 A few years ago, mail-order industry analysts criticized
5 Vernon for lagging behind competitors when it came to
6 using modern technology. For example, the company,

7 which went public in 1987, didn’t install toll-free 800 lines
8 until 1993.
9 Today, the company operates a one-million-square-foot
10 warehouse in Virginia Beach, Virginia, and keeps close tabs
11 on customers with sophisticated computer programs. Ver-
12 non said she sells via 180 million catalogs a year, nearly 100
13 editions in all.
14 Vernon, the queen of free personalization on most mer-
15 chandise, offers this advice to small business owners: “Risk
16 your own money, trust your creative instincts, and find
17 someone who can execute your vision.”
18
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20 352
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37
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39
Conclusion
1
2
3
4
5
6
7
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10
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17
18
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21
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39
1
2
Just one great idea can completely 3
4
revolutionize your life. 5
—EARL NIGHTINGALE 6
7
8
9
10
11
ABrief Conclusion 12
well, if you’ve gotten this far (or, maybe you started 13
reading here!), you deserve a short farewell. For several 14
years, I collected and researched these 201 really great ideas. 15
I set the bar very high and rejected many for being too dull 16
or too obvious. To make the cut, these ideas had to be cre- 17
ative, practical, and proven effective. None were made up or 18
embellished. 19
I hope you are able to use many of these ideas in your 355 20
business. Or maybe some of my ideas inspired you to come 21
up with a great idea of your own. 22
Now, I’d like to ask you a favor. If you have a great idea 23
that has helped you make money or run your small business 24
better, send it to me! I would like to share it in my column, 25
or perhaps in another book. 26
During the final days of writing, I joked that my next book 27
will be titled: “Two Ideas for Great Success.” The ideas are 28
simple: Rob a bank and flee the country. 29
But, I’m kidding. You know I’ll be back interviewing more 30
wonderful entrepreneurs just like you, as soon as I can take 31
the Band-Aids off my fingers. 32
If reading this book inspires you to share a great idea 33
with me, I’d welcome it. Please send it to: Jane Applegate, 34
P.O. Box 768, Pelham, NY 10803. 35
36
37
38
39
Resources
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
1
Agencies, SBA, and Other 2
3
U.S. Government Offices 4
SBA OFFICES 5
SBA Office of Financial Assistance 6
202-205-6490 7
Direct loan funds are limited to businesses owned by dis- 8
abled individuals; all other assistance is provided through 9
SBA guarantees of loans made by local banks. 10
(See also “Getting Money” section, below) 11
SBA Office of Rural Affairs & Economic 12
Development 13
(See U.S. Department of Agriculture, below) 14
SBA Office of International Trade 15
202-205-6720 16
(See also “Export/Trade” section, below) 17
SBA Office of Government Contracting 18
202-205-6460 19
SBA Procurement Automated Source System (PASS) 357 20
409 3rd Street, SW 21
Washington, DC 20416 22
202-205-7310 23
For small businesses interested in government procurement 24
opportunities. 25
Service Corps of Retired Executives (SCORE) 26
National SCORE Office 27
409 3rd Street, SW, 6th floor 28
800-634-0245 30
fax: 202-205-7636 31
In addition to one-on-one counseling, SCORE offers a free 32
nineteen-page workbook entitled How to Really Start Your 33
Own Business. 34
35
REGIONAL GOVERNMENT AGENCIES 36
in addition to sba district offices, every state has a 37
primary agency or office to provide one-stop guidance on the 38
programs and services offered to small businesses at the 39
1 state level. In each state this agency or office goes by a differ-
2 ent name. Below are listings for the biggest states.
3 California Trade and Commerce Agency
4 Office of Small Business
5 801 K Street, Suite 1600
6 Sacramento, CA 95814
7 916-324-1295
8 New York Department of Economic Development
9 Business Assistance Hotline
10 633 3rd Street
11 New York, NY 10017
12 800-782-8369
13 Texas Department of Economic Development
14 1700 North Congress Avenue
15 Austin, TX 78711
16 512-936-0100
17 U.S. Small Business Administration
18 409 3rd Street, SW
19 Washington, DC 20416
20 358 800-U-ASK-SBA; 800-827-5722
21 fax: 202-205-7064
RESOURCES
22 TDD: 704-344-6640
23 Most dealings with the SBA are best handled through district
24 or regional offices. Call the toll-free number above to find the
25 SBA district office nearest you.
26
27 FEDERAL GOVERNMENT WEB SITES
28 SBA
29 www.sba.gov
30 The home page of the SBA.
31 U.S. Business Advisor
32 www.business.gov
33 A one-stop link to government for business.
34 Federal Marketplace
35 www.fedmarket.com
36 The “federal marketplace” is the Internet’s procurement
37 resource gateway for firms interested in marketing and sell-
38 ing products and services to the U.S. government.
39
The Patent and Trademark Office 1
www.uspto.gov 2
The home page of the Patent and Trademark Office. 3
(See “Patents” section, below.) 4
5
CONGRESSIONAL COMMITTEES 6
Senate Small Business Committee 7
Russell Building, Room SR-428A 8
202-224-5175 9
or write to: 10
The Honorable ____________________________ 11
U.S. Senate 12
Washington, D.C. 20510 13
House Small Business Committee 14
Rayburn Building, Room 2361 15
202-225-5821 16
or write to: 17
The Honorable ____________________________ 18
U.S. House of Representatives 19
Washington, DC 20515 359 20
21
DEPARTMENT OF COMMERCE 22
14th Street & Constitution Avenue, NW 23
202-482-2000 25
www.doc.gov 26
Economic Development Administration (EDA) 27
202-482-5081 28
The purpose of this administration is to generate jobs, to 29
help protect existing jobs, and to stimulate commercial and 30
industrial growth in economically distressed areas of the 31
United States. 32
(See also Trade Information Center in “Export/Trade” 33
section, below.) 34
35
U.S. DEPARTMENT OF AGRICULTURE 36
the u.s. department of agriculture works to improve 37
and maintain income and to develop and expand markets 38
abroad for agricultural products. 39
1 12th Street and Jefferson Drive, SW
3 202-720-2791
4 Rural Information Center
5 800-633-7701
6 Rural Development Administration

7 202-690-4730
8
9 U.S. CHAMBER OF COMMERCE
10 the chamber of commerce is the largest private
11 volunteer business federation in the world. The national
12 headquarters, below, provides materials geared specifically
13 for small business.
14 Center for Small Business
15 1615 H Street, NW
17 202-659-6000
18 Small Business Center: 202-463-5503
19 www.uschamber.org
20 360 Institute of Standards and Technology (NIST)
21 100 Bureau Drive
RESOURCES
22 Gaithersburg, MD 20899
23 301-975-2000
24 www.nist.gov
25 Advanced Technology Program (ATP)
26 800-287-3863
27 Provides funds to help U.S. businesses develop new tech-
28 nologies that are commercially promising.
29
30 OTHER GOVERNMENT AGENCIES AND PROGRAMS
31 small business development centers (sbdc) coordinate
32 federal, state, local, university, and private resources in coun-
33 seling and training small business owners. There is an
34 SBDC in every major city in the United States. You can find
35 out the telephone number of the SBDC nearest you by call-
36 ing the SBA’s toll-free number 800-U-ASK-SBA. Some U.S.
37 state SBDC reference lines are listed below.
38
39
CALIFORNIA 1
California Trade and Commerce Agency 2
916-324-5068 3
NEW YORK 4
State University of New York (SUNY) 5
800-732-SBDC 6
TEXAS 7
Dallas County Community College 8
214-860-5850 9
10
11
Books 12
◆ The Business Owner’s Guide to Personal Finance: When 13
Your Business Is Your Paycheck, by Jill Andresky Fraser 14
(Bloomberg Press; 2001) 15
◆ Clicking Through: A Survival Guide for Bringing Your 16
Company Online, by Jonathan Ezor (Bloomberg Press; 17
1999) 18
◆ Dig Your Well before You’re Thirsty: The Only Network- 19
ing Book You’ll Ever Need, by Harvey MacKay (Doubleday; 361 20
1999) 21
◆ Effective Presentation Skills: A Practical Guide for Bet- 22
ter Speaking, by Steve Mandel (Crisp Publications; 2000) 23
◆ Hire, Manage and Retain Employees for Your Small 24
Business, by Joel Handelsman (Commerce Clearing House; 25
1998) 26
◆ Home Business Made Easy: How to Select & Start a 27
Home Business That Fits Your Interests, Lifestyle & 28
Pocketbook, by David Hanania covers businesses you can 29
run from your home and has a small business resource guide 30
(PSI Research/The Oasis Press; 1998). 31
◆ How to Drive Your Competition Crazy: Creating Disrup- 32
tion for Fun and Profit, by Guy Kawasaki (Hyperion; 1996) 33
◆ How to Sell Your Business—And Get What You Want!, 34
by Colin Gabriel (Gwent Press; 1998) 35
◆ Leadership by the Book: Tools to Transform Your Work- 36
place, by Kenneth Blanchard (William Morris & Co.; 1999) 37
◆ Minding Her Own Business: The Self-Employed 38
Woman’s Guide to Taxes and Recordkeeping, by Jan 39
1 Zobel (Adams Media Corp.; 2000)
2 ◆ Moses on Management: 50 Leadership Lessons from the
3 Greatest Manager of All Time, by David Baron (Pocket
4 Books; 2000)
5 ◆ The Natural Laws of Business: How to Harness the
6 Power of Evolution, Physics, and Economics to Achieve

7 Business Success, by Richard Koch (Doubleday; 2001)
8 ◆ The Small Business Owner’s Guide to a Good Night’s
9 Sleep: Preventing and Solving Chronic and Costly Prob-
10 lems, by Debra Koontz Traverso (Bloomberg Press; 2001)
11 ◆ The Smart Office: Turning Your Company on Its Head,
12 by A.K. Townsend (Gila Press; 1999)
13 ◆ Starting and Running a Successful Newsletter or Maga-
14 zine, by Cheryl Woodard (Nolo Press; 1998)
15 ◆ The Street-Smart Entrepreneur: 133 Tough Lessons I
16 Learned the Hard Way, by Jay Goltz and Jody Oesterreicher
17 (LPC; 1998)
18 ◆ Succeeding in Small Business: The 101 Toughest Prob-
19 lems and How to Solve Them, by Jane Applegate (Plume;
20 362 1994)
21 ◆ Taming the Paper Tiger at Work, by Barbara Hemphill
RESOURCES
22 (Kiplinger Books; 1998)

23 ◆ Tax Savvy for Small Business: Year-Round Tax Strategies
24 to Save You Money, by Frederick W. Daily (Nolo Press;
25 2001)
26 ◆ Think and Grow Rich, by Napoleon Hill (Fawcett Books;
27 1990)
28 ◆ Working from Home: Everything You Need to Know
29 About Living and Working Under the Same Roof, by Paul
30 and Sarah Edwards (JP Tarcher; 1999).
31 ◆ Working Solo: The Real Guide to Freedom & Financial
32 Success with Your Own Business (John Wiley & Sons;
33 1998) and Working Solo Sourcebook: Essential
34 Resources for Independent Entrepreneurs (John Wiley &
35 Sons; 1998), both by Terri Lonier.
36 ◆ The Young Entrepreneur’s Guide to Starting and Run-
37 ning a Business, by Steve Mariotti (Times Books; 2000)
38
39
1
Book Publishers 2
Bloomberg Press 3
100 Business Park Drive, P.O. Box 888 4
Princeton, NJ 08542-0888 5
609-279-4670 6
The company that published my book, Bloomberg Press, 7
is a division of the larger Bloomberg L.P. This business 8
press publishes accessible, authoritative books on small 9
business, personal finance, investment, and professional 10
finance topics. 11
Nolo Press 12
950 Parker Street 13
Berkeley, CA 94710 14
510-549-1976 15
fax: 800-645-0895 16
www.nolo.com 17
Begun in 1971 by two legal aid lawyers, Nolo now publishes 18
more than 100 titles. In addition to legal self-help books for 19
the small business owner, they also publish software. 363 20
21
22
Directories Online and byMail 23
Oxbridge Mediafinder Connection 24
www.oxbridge.com 25
Targeted lists to rent, advertising sources, and subscription 26
information from almost 100,000 magazines, journals, cata- 27
logs, newspapers, and directories. 28
American Business Directories 29
5711 S. 86th Circle, P.O. Box 27347 30
Omaha, NE 68127 31
402-593-4600 32
33
34
Export/Trade 35
OIT (Office of International Trade) 36
www.sba.gov/oit 37
Has trade terms, trade links, and trade loans. The agency 38
offers export-related guaranteed loans. In 1996 the SBA 39
1 assisted small firms with more than 1,300 export-related
2 loans worth nearly $385 million.
3 International Trade Administration (ITA)
4 212-466-5222
5 Export Opportunity Hotline
6 800-243-7232
7 Speak to a trade specialist to discuss export problems and get
8 advice; they also publish industry reports, distributor lists,
9 country market reports, and more. Their basic starter book
10 is Exportise; it includes a list of sources.
11 Export/Import Bank (EXIMBANK)
12 811 Vermont Avenue, NW
14 202-565-3200
15 Government agency that provides export financing to large
16 and small businesses and exporters who have had difficulty
17 obtaining loans from commercial lenders.
18 Export Hotline (International Strategies, Inc.)
19 800-USA-XPORT
20 364 www.exporthotline.com
21 The export hotline and trade bank provides global business
RESOURCES
22 information by fax or online.

23 Trade Information Center (TIC)
24 U.S. Department of Commerce
25 800-872-8723
26 Also 800-USA-TRADE
27 Small Business Exporters Association (SBEA)
28 4603 John Tyler Court, Suite 203
29 Annandale, VA 22003
30 703-761-4140
31 A national organization representing small and midsize
32 exporters.
33 National Association of Export Companies (NAXCO)
34 P.O. Box 1330, Murray Hill Station
36 212-725-3311
37 Can help companies searching for information on financing
38 or trade leads.
39
1
Family Business 2
Family Firm Institute 3
221 N. Beacon Street 4
Boston, MA 02135 5
617-789-4200 6
fax: 617-789-4220 7
www.ffi.org 8
Publishes a membership directory of professionals who offer 9
services to family businesses in the United States; they also 10
publish a quarterly journal, Family Business Review. 11
The Family Business Advisor 12
A monthly newsletter on successful business management, 13
family relations, and asset protection, $179/year. 14
Family Business Advisor 15
P.O. Box 4356 16
Marietta, GA 30061-4356 17
800-551-0633 18
fax: 770-425-1776 19
365 20
21
Franchising 22
International Franchise Association (IFA) 23
1350 New York Avenue, NW, Suite 900 24
202-628-8000 26
fax: 202-628-0812 27
e-mail: ifa@franchise.org 28
www.franchise.org 29
A resource center for current and prospective franchisees 30
and franchisors, the media, and the government. IFA is 31
franchising’s only trade group. For their publications desk, 32
call 800-543-1038. 33
Contact IFA’s International Affairs Department at 34
202-662-0760 for the following: 35
◆ National Franchise Association—a list of forty associations 36
around the world that maintain their own publications and 37
products. 38
39
1 ◆ International Calendar—a compilation of expos, seminars,
2 and conferences around the world.
3 AAFD
4 800-733-9858
5 www.aafd.org
6 Sixty chapters, formed of the AAFD’s National Purchasing

7 Co-op to enhance members’ buying power; created a set of
8 Fair Franchising Standards; offers insurance programs. One
9 of the leading franchisee trade associations.
10
11
12
Free Things
13 Brochure on “slamming,” or getting your phone service
14 switched without your permission. Contact Call For Action at
15 301-657-8260.
16 Disk from KeyCorp to help you with your financial plan-
17 ning from the SBA’s top-ranked small business lender for
18 loans under $250,000 and microloans under $100,000. Call
19 888-539-4249.
20 366
21
Getting Money
RESOURCES
22
23 U.S. Small Business Administration
24 Office of Financial Assistance
25 202-205-6490
26 Direct loan funds are limited to businesses owned by dis-
27 abled individuals; all other assistance is provided through
28 SBA guarantees of loans made by local banks.
29 Small Business Investment Companies (SBICs)
30 SBICs are privately capitalized, owned, and managed invest-
31 ment firms licensed by the SBA that provide equity capital,
32 long-term financing, and management assistance to small
33 business. Contact your nearest SBA office. A directory of
34 SBICs is available by sending $10 to:
35 NASBIC Directory
36 P.O. Box 4039
37 Merrifield, VA 22116
38 Office of Business Development and Marketing (SBA)
39 409 3rd Street, SW
Washington, D.C. 20416 1
202-205-6666 2
Offers free fact sheet on the basics of raising money, types of 3
business loans, writing a loan proposal. 4
National Association of Development Companies 5
(NADCO) 6
6764 Old McLean, Village Drive 7
McLean, VA 22203 8
703-812-9000 9
The trade group for Certified Development Companies 10
(CDCs) promotes small business expansion through the 504 11
loan program. This program offers fixed, low-interest loans 12
to qualified existing businesses for the purchase of fixed 13
assets such as real estate or machinery. All CDC funding is 14
guaranteed by the SBA. 15
National Association of Small Business Investment Com- 16
panies 17
666 11th Street, NW, Suite 750 18
202-628-5055 367 20
fax: 202-628-5080 21
www.nasbic.org 22
National Venture Capital Association 23
1655 N. Fort Myer Drive 24
Arlington, VA 22209 25
703-524-2549 26
www.nvca.org 27
Membership organization of over 200 venture capital firms. 28
The site includes a discussion of venture capital in general 29
and what it does for the business community. 30
The Foundation Center 31
79 Fifth Avenue 32
New York, NY 10003 33
212-620-4230 34
www.fdncenter.org 35
Gathers data on foundations /corporate giving programs/ 36
contribution programs; also has grant listings. 37
38
39
1
2
Minorities
3 Office of Minority Enterprise Development (MED) SBA
4 409 3rd Street, SW, Suite 8000
6 202-205-6410
7 Helps foster business ownership by individuals who are
8 socially and economically disadvantaged. The SBA has
9 combined its efforts with those of private industry, banks,
10 local communities, and other government agencies to meet
11 that goal.
12 Minority Business Development Agency (MBDA)
13 U.S. Department of Commerce
15 202-482-1015
16 Management and technical assistance provided to business-
17 es primarily through a network of local Minority Business
18 Development Centers. Call number above to find your near-
19 est MBDC.
20 368 National Minority Supplier Development Council
21 (NMSDC)
RESOURCES
22 1040 Avenue of the Americas, 2nd Floor

24 212-944-2430
25 www.nmsdcus.org
26 Can supply information about becoming certified as a
27 minority contractor. NMSDC has matched more than 15,000
28 minority-owned businesses with member corporations that
29 want to purchase their goods and services. Local chapters
30 exist throughout the United States.
31 National Association of Minority Contractors (NAMC)
32 666 11th Street, Suite 520
34 202-347-8259
35 A trade association formed in 1969 to address the needs of
36 minority contractors worldwide.
37 Equal Opportunity Employment Commission (EEOC)
38 1400 L Street, NW, Suite 200
800-669-EEOC 1
TDD: 800-800-3302 2
U.S. Hispanic Chamber of Commerce 3
1019–19th Street, NW, Suite 200 4
202-842-1212 6
Represents the interests of more than 400,000 Hispanic- 7
owned businesses. Its annual convention combines a trade 8
fair, business sections, and workshops designed to promote 9
business opportunities. 10
National Association of Investment Companies (NAIC) 11
1300 Pennsylvania Avenue, NW, Suite 700 12
202-289-4336 14
Provides entrepreneurs with names of investors in their area 15
who invest exclusively in small businesses owned by minor- 16
ity entrepreneurs. See also “Getting Money” section, above. 17
18
19
Newsletters and Other Resources 369 20
SCOR (Small Corporations Offering Registrations) 21
Report (Not to be confused with SCORE) 22
Tom Stewart-Gordon, Editor/Publisher 23
P.O. Box 781992 24
Dallas, TX 75378 25
972-620-2489 26
www.scor-report.com 27
An eight-page newsletter published fourteen times annually 28
reporting on capital formation alternatives for small compa- 29
nies. SCOR is a securities registration at the state level that is 30
simpler and quicker than the SEC process. 31
The PC Bible 32
Peachpit Press; edited by Eric Knorr 33
1249 8th Street 34
Berkeley, CA 94710 35
510-524-2178 36
Nineteen top PC experts discuss hardware and software; 37
hundreds of tips to sort through the tech maze. 38
39
1 The Money Connection: Where & How to Apply for Busi-
2 ness Loans and Venture Capital, by Lawrence Flanagan;
3 published by Oasis Press/PSI Research
4 800-228-2275
5 Leadership Directories Inc.
6 104 Fifth Avenue, 2nd floor

8 212-627-4140
9 A series of “who’s who” guides in the worlds of government,
10 finance, law, business, etc.
11 Six Figure Consulting: How to Have a Great Second
12 Career, by Gary Goodman; published by AMACOM Books
13 1601 Broadway
15 fax: 212-903-8083
16
17
18
Online Resources
19 SMALL BUSINESS MAGAZINES ON THE
20 370 WORLD WIDE WEB
21 Entrepreneur
RESOURCES
22 www.entrepreneurmag.com
23 Franchise Times
24 www.franchisetimes.com
25 Inc Online
26 www.inc.com
27 The online version of the magazine has some content the
28 magazine doesn’t. You can download worksheets on finance
29 and management.
30 Black Enterprise Magazine
31 www.blackenterprise.com
32 Business Week Online
33 www.businessweek.com
34 SBTV (Small Business TV)
35 www.sbtv.com
36
37 WEBSITES TO CHECK OUT
38 CCH Business Owners’s Toolkit
39 www.toolkit.cch.com
A great resource for small business owners. Basically, a 1
small business guidebook on the Web. 2
Costco 3
www.costco.com 4
Hewlett Packard’s small business site 5
www.hp.com 6
7
Organizations, Foundations, 8
9
and More Advocacy Groups 10
National Federation of Independent Businesses (NFIB) 11
1201 F Street NW, Suite 200 12
800-634-2669 14
fax: 202-554-0496 15
www.nfibonline.com 16
Nation’s largest small business advocacy group; represents 17
more than 600,000 small and independent businesses 18
before legislatures and government agencies at the federal 19
and state levels. Also disseminates educational information. 371 20
National Small Business United (NSBU) 21
1156 15th Street, NW, Suite 1100 22
202-293-8830 24
fax: 202-872-8543 25
e-mail: nsbu@nsbu.org 26
Join and subscribe to a weekly two-page fax of information 27
on legislation, regulations, and news that affects the small 28
business world. 29
American Staffing Association 30
277 S. Washington Street 31
Alexandria, VA 22314 32
703-253-2020 33
fax: 703-253-2053 34
www.natss.org 35
Call American Staffing Association for information about 36
employment and economic trends. 37
38
39
1 TEC: An International Organization of CEOs
2 5469 Kearny Villa Road, Suite 101
3 San Diego, CA 92123-1159
4 800-274-2367
5 fax: 800-934-4540
6 www.tecceo.com
7 More than 7,000 members worldwide; membership by invi-
8 tation only.
9 Edward Lowe Foundation
10 58220 Decatur Road, P.O. Box 8
11 Cassopolis, MI 49031
12 800-232-5693
13 fax: 616-445-4350
14 smallbizNet: www.lowe.org
15 American Society for Training and Development (ASTD)
16 1640 King Street, Box 1443
17 Alexandria, VA 22313-2043
18 703-683-8100
19 www.astd.org
20 372 Business for Social Responsibility (BSR)
21 A national association that provides assistance to companies
RESOURCES
22 seeking to implement policies and practices that contribute

23 to their success.
24 609 Mission Street, 2nd Floor
25 San Francisco, CA 94105-3506
26 415-537-0888
27 fax: 415-537-0889
28 The Grantsmanship Center
29 1125 W. Sixth Street, 5th floor; P.O. Box 17220
30 Los Angeles, CA 90017
31 213-482-9860 (list of publications catalog/seminars)
32 www.tgci.com
33
34
35
Patents
36 U.S. Patent and Trademark Office (PTO)
37 Public Service Center
38 P.O. Box 2089, 2021 South Clark Place
39 Arlington, VA 22202
703-308-4357 1
800-PTO-9199 2
www.uspto.gov 3
General Information Concerning Patents (stock #003- 4
004-00659-5) can be ordered: 5
Superintendent of Documents 6
U.S. Government Printing Office 7
9
10
Trade Associations 11
American Consultants League (ACL) 12
30466 Prince Williams St. 13
Princess Anne, MD 21853 14
410-651-4869 15
American Health Care Association 16
1201 L Street, NW, 8th floor 17
202-842-4444 19
www.ahca.org 373 20
American Management Association (AMA) 21
1601 Broadway 22
212-586-8100 24
www.amanet.org 25
American Retail Federation 26
325 7th St. NW, Suite 1000 27
202-783-7971 29
American Small Business Association (ASBA) 30
8773 Illinois Route 75E 31
Rock City, IL 61070 32
800-942-2722 33
www.asbaonline.org 34
Members are businesses with twenty or fewer employees; 35
member benefits and services. 36
Direct Marketing Association 37
11 West 42nd Street 38
1 or
2 1120 Avenue of the Americas
3 212-768-7277
4 212-790-1400
5 Direct Selling Association (DSA)
6 1275 Pennsylvania Avenue #800

8 202-347-8866
9 fax: 202-347-0055
10 www.dsa.org
11 International Mass Retail Association (IMRA)
12 1700 North Moore Street, Suite 2250
13 Arlington, VA 22209
14 703-841-2300
15 www.imra.org
16 International Taxicab and Livery Association
17 3849 Farragut Avenue
18 Kensington, MD 20895
19 301-946-5701
20 374 Multi-Level Marketing International Association
21 (MLMIA)
RESOURCES
22 119 Stanford Court

23 Irvine, CA 92612
24 949-854-0484
25 fax: 949-854-7687
26 www.mlmia.com
27 Also known as “network marketing.” Distributors not only
28 sell products and services but also recruit other salespeople.
29 National Association of Wholesaler-Distributors
30 1725 K Street, NW, Suite 710
32 202-872-0885
33 www.nawpubs.org
34 National Association of Desktop Publishers
35 462 Old Boston Street
36 Topsfield, MA 01983
37 978-887-2246
38 National Business Association (NBA)
39 P.O. Box 700728
Dallas, TX 75370 1
800-456-0440 2
www.nationalbusiness.org 3
Assists small businesspeople in achieving their goals. NBA 4
offers benefits/services that provide discounts and resources. 5
National Business Incubation Association 6
20 E. Circle Drive, #190 7
Athens, OH 45701 8
740-593-4311 9
fax: 703-593-1996 10
www.nbia.org 11
The comprehensive listing of incubator programs on the 12
Web. 13
National Restaurant Association 14
1200 17th Street, NW 15
202-331-5900 17
www.restaurant.org 18
Professional Association of Innkeepers International 19
P.O. Box 90710 375 20
Santa Barbara, CA 93190 21
805-569-1853 22
www.paii.org 23
Promotional Products Association International (PPA) 24
3125 Skyway Circle North 25
Irving, TX 75038 26
972-252-0404 27
fax: 972-594-7224 28
www.ppa.org 29
Small Business Institute Director’s Association (SBDIA) 30
Stephen F. Austin State University 31
Department of Management and Marketing 32
Nacogdoches, TX 75962 33
409-468-4103 34
U.S. Food and Drug Administration (FDA) 35
Food safety center 800-532-4440 36
37
38
39
1 TRADE SHOW INFORMATION ONLINE
2 EXPOguide
3 www.expoguide.com
4 Search for trade shows, conferences, and seminars.
5
6
7
Video Publishers
8 Video Arts
9 8614 W. Catalpa Avenue
10 Chicago, IL 60656
11 800-553-0091
12 e-mail: videoart@interaccess.com
13 This video publisher is “The world’s leading provider” of
14 business training programs, founded in 1972 by Monty
15 Python comic genius John Cleese. Video programs cover
16 management, customer service, finance, and sales.
17
18
19
Women in Small Business
20 376 Office of Women’s Business Ownership (OWBO)
21 SBA
RESOURCES
22 202-205-6673
23 www.sbaonline.sba.gov/womeninbusiness
24 An office of the SBA; advocates the ownership and success
25 of women-owned businesses with information and special
26 assistance programs. Call the number above to find your
27 nearest OWBO office.
28 National Association of Women Business Owners
29 (NAWBO)
30 1595 Spring Hill Road, Suite 330
31 Vienna, VA 22182
32 703-506-3268
33 fax: 703-506-3266
34 e-mail: national@nawbo.org
35 www.nawbo.org
36 A membership-based federation with fifty local chapters and
37 almost 5,000 members nationwide. It works with women’s
38 businesses to expand operations and represents women’s
39 business interests to federal and state governments.
Center for Women’s Business Research 1
1411 K Street, #1350 2
Washington, DC 20005-3507 3
202-638-3060 4
fax: 202-638-3064 5
e-mail: info@womensbusinessresearch.org 6
www.womensbusinessresearch.org 7
Les Femmes Chefs d’Entreprises Mondiales 8
www.fcem.org 9
NAWBO is a member of this international organization. 10
Business & Professional Women (BPW USA) 11
BPW Foundation 12
2012 Massachusetts Avenue, NW 13
202-293-1100 15
fax: 202-861-0298 16
www.bpwusa.org 17
Women’s Bureau of the U.S. Department of Labor 18
800-827-5335 377 20
TDD: 800-326-2577 21
This bureau researches and promotes policies to improve 22
working conditions for women. Find out about issues relat- 23
ing to sexual harassment, medical/family leave, pregnancy, 24
and discrimination. 25
26
27
Working from Home 28
National Association for the Self-Employed 29
P.O. Box 612067 30
Dallas, TX 75261 31
800-232-6273 32
www.nase.org 33
Offers health plans and free booklets for members, includ- 34
ing the Small Business Resource Guide Book. 35
National Association of Home-Based Businesses 36
P.O. Box 362, 10451 Mill Run Circle, #400 37
Owings Mills, MD 21117 38
410-363-3698 39
1 www.usahomebusiness.com
2 Home Business News
3 12221 Beaver Pike
4 Jackson, OH 45640
5 614-988-2331
6 www.homebiznews.com
7 Bimonthly magazine for home-based entrepreneurs.
8
9
10
Young Entrepreneurs
11 KidsWay, Inc.
12 5589 Peachtree Road
13 Chamblee, GA 30341
14 888-KIDS-WAY
15 Publishes Young Biz, a bimonthly magazine (annual sub-
16 scription $18) that includes a calendar of upcoming events
17 for young entrepreneurs, business strategies, and profiles of
18 enterprising young people.
19 National Foundation for Teaching Entrepreneurship
20 378 (NFTE)
21 120 Wall Street, 29th floor
RESOURCES

23 212-232-3333
24 fax: 212-232-2244
25 www.nfte.com
26
27
28
29
30
31
32
33
34
35
36
37
38
39
1
10
11
12
13
14
15
Index
accountants, finding, 70–71 Corporate Card, 20–21, 183
ACE-NET, 118 Gift Cheques, 253
Act!, 140 America Online, 184, 185
Acuff, Frank, 334–335 Amos, Wally, 349–350
Adia, 258 Amtrak, 183, 185
Adkins, Dinah, 23 Angel Investing: Matching Startup
Adkinson, Dana, 148–149 Funds with Startup
Adobe PhotoShop, 297 Companies (Robinson and
Advanced Etiquette, 334, 339 Van Osnabrugge), 73
Advanced Motion Technologies Inc. angel investors, 72–73
(AMT), 291 Annie’s Homegrown, 79
advertising Anthony’s Fish Grotto, 10–12
See also marketing strategies apparel industry, 98–100, 326–327
co-op, 135–136 Apple Computer, 287
differences between marketing Applegate, Jane, 228
and public relations and, Applegate, Joe, 229
165–167 APS Technologies, 284
signs, 151 Artists’ Framing Service, 143
advice Artkraft Strauss Sign Co., 92–93
free, 116 Art Works, Etc., 138
from financial advisers, 105–106 Ascend, 285
from government sources, Association of Foam Packaging
116–119 Recyclers, 30
from spiritual leaders, 13–15 AT&T, 287
advisory boards, creating, 20–22 Avery Dennison, 209
AgriPlan, 109 Avignone, Lou, 350
Air Force Business Education Team, Avis Rent-a-Car, 22
180 Avon, 187, 317
Allen, Jim, 217
Almeas, Ira, 142–143 Babies“R”Us, 77
Alvarez, Ada, 114 BabyPressConference.com, 76–77
Alzheimer’s disease, 212–214 Back on Track America™, 183–186
American Bar Association Guide to Ban, Jean, 250
Workplace Law: Everything Bank of America, 115
You Need to know About Your banks, selecting, 74–76
Rights As an Employee or Barber & Ross Millwork, 111
Employer, 240 Barbicide, 211–212
American Express, 318 Barea, Eduardo, 211
Baron, David, 13, 14–15 Caplan, Karen, 194
1
BATH system for hiring, 236–237 Caplan-Wiggins, Jackie, 194
Battelle Memorial Institute, 290 captive insurance companies, 92–93 2
Bayer AG, 290–291 CardScan, 298–299 3
Bell, Judy, 44 Carpel, Gil, 65–66 4
Bergen Brunswig, 25 Carper, Tom, 242 5
Berger, Amy, 286–287 Carr, Brad, 12
6
Berliner, Geoffrey, 219–220 Carsey, Marcy, 58
7
Berliner Pen, 219–220 Carter, Tony, 22
Berry, Lamar, 246 cash flow, methods for improving, 8
Bersin, John, 137 103–104 9
big, thinking, 182–186 Casio, 287 10
Biggs, Tim, 69–70 CD storage systems, 209–210 11
Binkley, Glenda, 336 Cedar Creek Productions, 113, 114
12
Biotech Marketing Inc., 260–262 celebrities, for marketing, 156
13
BizPlan, 109–110 Certified Development Company
Black, Carole, 231 Program, 118 14
Blanchard, Ken, 13, 14 Chamber of Commerce, 39, 40, 333, 15
Bloomberg, Michael, 345–347 360 16
Bloomberg Financial Markets, changes, making, 10–12 17
345–347 Chapman, Bill, 98, 100
18
Blumenfeld, Robert, 97–98 chargebacks, 98–100
19
Blumenthal, David, 156 charities, marketing using, 142–144,
Boenigk, Rebecca, 31–32 176–177 381 20
Bohn, Steve, 90 Chase Manhattan, 332 21
bonds, royalty-based, 69–70 Chatfield, Craig, 238 22
Book Passage, 38 Chelsea Market, 215 23
Bowe, Jim, 317 Cherry, Carol, 314
24
Bowie, David, 69–70 Chevrolet, 337
25
Branson, Richard, 208 Chicone, Jerry, 49–50
Bright Star Resorts, 147 Chicone, Susan, 49–50 26
Brody, Melinda, 314–315 ChromaDex Inc., 290–291 27
Brown, Kathleen, 115 Chuang, John, 232–233 28
Brown, Ron, 336 Ciotti, Jennifer, 217–218 29
business cards, 167, 298–299 Clicking Through: A Survival Guide
30
Business Information Centers, 51 for Bringing Your Company
31
business plans, 67–69 Online (Ezor), 301
Business Service Centers (BSCs), clients, 34–36 32
179–180 Clinton, Bill, 110, 336 33
Butwin, Richard, 92–93, 298 Club Corp., 184 34
Coan, George, 234, 315 35
Cabletron Systems’ Enterasys Coan, Jean, 234
36
Networks, 77 Coan, Steve, 21
37
Canevari, Erica, 139 Cogni-Tech Corp., 348
Canon, 285, 286 Coker, David, 213 38
Canterbury Travel Inc., 151 Collands, Michael, 245–246 39
Caplan, Frieda, 193–195 collecting money owed you, 95–98,
104 Daily, Frederick, 107
1
collection agencies, 96, 97 Daily Report for Executives, 157
2 collection letters, 96 Daniele Trissi Ltd., 135
3 community programs, marketing D’Aquila, John, 184, 228
4 and, 146–147, 163–164 databases, 140–141
5 Como, Frank, 6–7 Davidian, Sona, 143
companies, teaming up with large, Davis, Beverly, 158
6
131–133, 208–210 deadline policy, 16, 276

7
company names, as advertising, dealer networks, 138–139
8 154–155 De Bleser, Chris, 292
9 competition, knowing your, 170–172 debt arbitration, 97–98
10 computers, 29, 30, 284–285, decision makers, contacting, 8–9
11 301–302 decision making, quick, 16
databases, 140–141 Defense Loan and Technical
12
Congleton, Jerome, 31 Assistance (DELTA) program,
13
co-op advertising, 135–136 118
14 Cooper, John, 114 Dell, Michael, 185
15 corporate life, leaving, 18–20 Denny, Linda, 184
16 Costco, 94 Department of Transportation
17 Costello, David, 107 Bonding Assistant program,
coupons, marketing using, 145–146, 118
18
149 deposits, asking for, 103–104
19
Craft Company No. 6, 320 designing products, 203–204
20 382 Craven, Vikki, 117 designing workplaces, 29–30,
21 Creating Killer Websites: The Art of 119–120
INDEX
22 Third-Generation Site Design Dial, Terri, 115

23 (Siegel), 301 digital cameras, 297–298
Creative Juices, 336 Dig Your Well Before You’re Thirsty
24
credit, extending, 104 (Mackay), 348
25
credit cards, accepting, 93–95 direct public offerings (DPOs),
26 Creditek, 99 78–81
27 credit lines, increasing, 123–124 Direct Public Offerings: The New
28 credit managers, 82 Method for Taking Your
29 Curtain, Paul, 52 Company Public (Field), 80
Curtiss-Wright, 291 disability insurance, 100–102
30
Cush Honda, 141 disaster recovery plans, 44–45
31
customer service Disaster Survival Planning Network,
32 house calls, 316–317 Inc., 44
33 importance of not angering, discounts, giving, 104
34 315–316 Disney Institute, 245–247
35 personal relationships with cus- Dochtermann, Eric, 135, 136
tomers, 319–320 Dole, Bob, 88
36
quiz, 313 Dudley, Bob, 149–150
37
training for, 318 Du Jardin, Ralf, 291
38 use a mystery shopper to moni- Dunne, Gerald, Jr., 87
39 tor, 314–315 DuPont, Ben, 292
from vendors, 318–319 Dupree, Nathalie, 178
Dutka, Mark, 31 ergonomics, 31–32
1
Dynaflow, 220–221 ESOP Association, 90, 91
ethnic marketing, 172–173 2
East End Moving and Storage, Inc., Every Business Needs an Angel: 3
65 Getting the Money You Need 4
economic incentives, 110–111 to Make Your Business Grow 5
Edwardson, John, 187 (May and Simmons), 73
6
Efax, 305 Exabyte, 284
7
Effective Presentation Skills: A executives
Practical Guide for Better hiring interim, 250–252 8
Speaking (Mandel), 25 recruiting, 230–231, 262–263 9
Egg Company 2 (EC2), 24 Exhifix Inc., 154 10
Eidson, Ted, 178 Export-Import Bank, 324, 337, 364 11
Eidson, Wendy, 178 Extreme Data, 305
12
Element K, 288, 289 Eye for Winners, An (Vernon), 351
13
employees Ezor, Jonathan, 301
evaluation of, 237–240 14
feedback from, 53–55 Fabricant, Florence, 177–178 15
handbook/policy manual, 239 fads, 192–193 16
incentives for, 253–254 family, borrowing from, 197–198 17
morale boosters, 264 family businesses, 49–51, 365
18
recruiting and hiring, 227–228, Famous Amos cookies, 349–350
19
230–237, 240–242, 247–248, Farallon, 285
250–252, 260–263 farmer’s markets, 214–215 383 20
seniors as, 233–234 faxes, 287 21
tailoring benefits to, 243–246 electronic, 304–305 22
teenagers as, 235–236 Federal Marketplace, 179, 358 23
temps or leased, 258–259 feedback, from employees, 53–55
24
training, 252–253, 287–289, 318 fictitious name statement, 3
25
working with, 38 Field, Drew, 78–79, 80
employee stock ownership plans Fillamento, 153 26
(ESOPs), 90–91 filmmakers, independent, 112–114 27
employment laws, 240 financial advisers, 105–106 28
Empowerment Zones and financial issues 29
Enterprise Communities accountants, use of, 70–71
30
(EZs/ECs), 110–111 aid for minorities, 118
31
English as a second language (ESL) aid for women, 114–115, 118
classes, 244–245 angel investors, 72–73 32
enrolled agents (EAs), 106, 107 banks, selecting, 74–76 33
Environmental Protection Agency bonds, royalty-based, 69–70 34
(EPA), 28, 30 borrowing from family, 197–198 35
EPI Products USA, 207 cash flow, improving, 103–104
36
Epson, 285 chargebacks, 98–100
37
Epstein, Barbara, 288, 289 collecting money owed you,
equipment, 30, 31–32 95–98, 104 38
See also technology credit/financial managers, 81–82 39
used, 119–120 direct public offerings, 78–81
economic incentives, 110–111 for international clients, 338–339
1
free help, 116 services as, 164–165
2 government, help from, 116–119 wrapping, 320–321
3 investors, finding, 66–67 Gilbert, Susan, 180
4 profit enhancement officers, Girls Who Dare, 144
5 64–66 Giuliani, David, 244
strategic partners, finding, 76–78 Glen, Peter, 153–154
6
taxes, 106–110 Godfrey, Joline, 235

7
financial managers, using, 81–82 Goldmine, 140
8 Findit™, 197–198 Goldstein, Michael, 77
9 First Union National Bank, 316, 317 Goltz, Jay, 143, 236–237
10 Fleet Bank, 184 Gondela, Barbara, 50
11 Fluor Corp., 25 Gordon, Peter, 277–278
Flynn, Sharon, 107 Goulston, Mark, 33, 36
12
food, as a selling tool, 147, 177–179, government, free help from the,
13
182 51–52, 357–361
14 Foster, Lori, 336 government contractor, become a,
15 Foundation Capital, 24 179–180
16 franchises Greater Richmond Partnership Inc.,
17 help for owners, 40 111
sources of information, 365–366 Green, Greg, 117
18
tips for buying, 48–49 Green, Heather, 117
19
free offers, as a marketing tool, Green, Ken, 99
20 384 149–150 Greenwich Workshop, 138–139
21 frequent flier miles, 112 Greiff, Barrie, 254
INDEX
22 Frieda’s Inc., 194–195 Griffin Tate Group, 164–165

23 Friedman, Nancy, 42–43 Grissom, Fred, 133
Fuller, Iris, 153 Gross, Bill, 24
24
furniture, 31–32, 285 Gross, Clifford, 32
25
used, 119–120 Grow Your Business with Desktop
26 Marketing (Morgenstern), 297
27 Gabar Inc., 99 GSC Industries Inc., 216
28 Gabriel, Colin, 82–84 Guide to Free Tax Services, 118
29 Galloway, Barbara, 51 Gulinello, Joseph, 220–221
Garcia, Victoria, 141–142 Gumpert, David, 318–319
30
Gates, Bill, 185
31
Gay, Janice, 276 Hahnemann Laboratories Inc., 81
32 gay consumers, marketing to, Hall, Peter, 112–113, 114
33 141–142 Halpin, Brooke, 130
34 Genua, Robert L., 25 Handelsman, Joel, 230
35 Gerstman, Henry, 100 Handspring, 287
Getting Started in Project Hand Technologies, 289
36
Management (Tate), 165 Harrington, Phil, 109–110
37
Ghio, Craig, 10 Harris, Jim, 204
38 Ghio, Rick, 10 Harris Research, 287
39 gifts Harvard Business School, 247
food as, 147 Hassett, Stephen, 78
Hastings, Debbie, 65 Guide with Revealing Tips
1
Haussler, Warren, 203, 204 from 57 Sellers (Gabriel), 82
help Hurwitz, Andrew, 21–22 2
free governmental, 51–52 Hybels, Bill, 14 3
knowing when to ask for, 46–48 4
self-help quiz, 55–57 Ibiley School Uniforms Inc., 211 5
support groups, 39–40 idealab!, 24
6
Hemphill, Barbara, 271 IGIA, 206, 207
7
Henry, Lloyd, 260–262 Impact Incentives and Meetings
Herman, Alexis, 336 Inc., 142–143 8
Herrera, George, 172–173 imports, 193–195, 198–200 9
Hershey Foods, 160 Impression on Hold, 136, 137 10
Heslin, Mary, 332–333 incubators, 23–24, 122 11
Hewlett-Packard, 136, 282, 284, 285, Independent Means, 235, 236
12
286 India, 330–331
13
Heyob, Mary, 316 infant security systems, 220–221
Heyob, Tom, 316 infomercials, 151–153, 206–208 14
Hire, Manage & Retain Employees In House, 31 15
for Your Small Business insurance 16
(Handelsman), 230 captive, 92–93 17
hiring and recruiting disability, 100–102
18
BATH system for, 236–237 prepaid legal, 121
19
executives, recruiting, 230–231, Intel, 136
262–263 Internal Audit Bureau (IAB), 99 385 20
interim executives, 250–252 Internal Revenue Service (IRS), 118 21
remote workers, 260–262 International Association of 22
seniors, 233–234 Business Mediation 23
teenagers, 235–236 Consultants, 98
24
tips for, 227–228, 230–237, international businesses
25
247–248 culture differences, 334–335
welfare recipients, 240–242 etiquette, 338–339 26
Hispanic market, 172–173 forging alliances, 328–330 27
H.K. Enterprises, 187 in India, 330–331 28
hobbies, 195–196 in Mexico, 326–328 29
Hodges, Phil, 14 in Russia, 331–333
30
Holtzapple, Betsy, 149 sources of information, 363–364
31
home, resources for working from, trade mission, 335–337
377–378 translating materials, 337–338 32
honesty, 17–18 International Council of Shopping 33
Hospitality Works, 41–42 Centers, 217 34
How to Drive Your Competition International Data Corp. (IDC), 289 35
Crazy (Kawasaki), 170 International Franchise Association,
36
How to Negotiate Anything with 40, 48–49, 365
37
Anyone, Anywhere Around International Trade Administration,
the World (Acuff), 334 337, 364 38
How to Sell Your Business—And Get Internet 39
What You Want: A Pragmatic marketing using the, 133–134
selling products using, 306–307 Koch, Richard, 15
1
service providers, 287 Kogler, John, 206–207
2 Inventor’s Notebook, The (Grissom Kravco Co., 318
3 and Pressman), 133 K.T.’s Kitchens, 171, 205–206
4 investors
5 See also financial issues LaMagna, Dal, 173–175
alumni as, 77–78 landscaping, 29
6
finding, 66–67 Lane Upholstery, 131–133

7
Isaacson, Bernard, 219 LaNicca, Ellen, 238
8 Italiano, Carla, 117–118 lawyers
9 Italiano, Jim, 117–118 how to find, 12–13
10 It’s Not My Department (Glen), 154 need for labor, 248–249
11 Leadership by the Book (Blanchard,
Jack, Ian, 123 Hybels, and Hodges), 13, 14
12
Jackson, Scott, 182 LearnItOnline, 288–289
13
Jacobsen, Mindy, 251–252 leasing, 86, 121–123
14 Jaime, Richard, 327 workers, 259
15 Jaksch, Frank, 290–291 LeBlanc, Jeanette, 89
16 job applicants, interviewing, Lechner, Frank, 141
17 229–230 Lee, Matt, 177–178
job descriptions, 228–229 Lee, Mie-Yun, 284–285
18
John Lane Gallery, 139 Lee, Ted, 177–178
19
Johnson, Dairl, 18–20 Leeds, William, 328–329
20 386 Johnston, Scott, 133–134 Leff, Gary, 201–203
21 Jordan Whitney Inc., 206 legal insurance, prepaid, 121
INDEX
22 J.P. Morgan, 332 Levine, Carl, 132, 133

23 Julian, Ellen, 289 Lew, Bill, 327–328
Julian, James, 26 licensing, 133, 290, 292
24
Lieberman, Henry, 291
25
Kallus, Juda, 108 lighting, 29–30
26 Kapell, Dave, 192–193 Lim, Yoon, 301
27 Kaplan, Caroline, 113 Limbaugh, Rush, 157
28 Kawasaki, Guy, 170–172 Lion Brand Yarn Co., 156
29 Keck, Henry, 203–204 Little, Fred, 117–118
Keck-Craig Inc., 203–204 Littler Mendelson, 248, 249
30
Keepsake Floral Inc., 148–149 loans
31
Kelleher, Herb, 2, 342–343 Small Business Administration
32 Kelly Services, 258 programs, 116–119
33 Kharasch, Isidore, 41–42 for women, 114–115
34 King, Ben, 211–212 location
35 King, Maurice, 211–212 finding the right, 121–123,
King, Rollin, 342 201–203
36
King of Prussia mall, 318 shopping malls, 202, 216–218
37
King Research Inc., 211–212 long-distance service, 87–88
38 Kinkos, 293 Lundberg, Thomas, 240
39 Klein, Ruth, 270–271 Lyles-Harper, Fran, 180–181
Knowledge Shop, 161
Mack, Patricia, 178–179 Internet, 133–134
1
Mackay, Harvey, 348–349 mascots/celebrities, 156
Mackay Envelope Corp., 348 multilevel, 180–181 2
Madori, Janet, 181 newsletters, 157–159 3
Maggiore, Mary Ann, 58 open houses, 160–161 4
Magnetic Poetry kit, 192–193 prepaid phone cards, 162–163 5
mailing lists, 140 referrals, 148–149
6
Main Street revitalization programs, for service-based businesses,
7
52–53 159–160
Making a Difference Fund, 144 signs, 151 8
malls, locating in, 202, 216–218 teaming up with known part- 9
management ners, 131–133, 208–210 10
advice from spiritual leaders, telemarketers, 155 11
13–15 on telephones, 136–137, 175–176
12
contacting decision makers, 8–9 trade shows/parties, 168–170
13
problems with middle, 9 Marks, Brad, 230–231
Managing Your Mouth: An Owner’s Marshall School of Business, 247 14
Manual for Your Most Martindale-Hubbell Law Directory, 12 15
Important Business Asset mascots, 156 16
(Genua), 25 Masini, Ron, 22 17
Mandel, Steve, 25 May, John, 73
18
manpower, 258 McCarthy, Patrick, 312
19
March, Rick, 162 McCustion, Kent, 216
Marcus, James, 77 McFarland, Theresa, 218 387 20
Mariotti, Steve, 235–236 MCI, 162 21
marketing strategies McLean, David, 149 22
attention getters, 153–154 medical benefits, 108–110 23
business cards, 167 meetings
24
charities, using, 142–144, how to have productive, 33
25
176–177 with clients, 35–36
community programs, 146–147, Meier, Sue, 195–196 26
163–164 mentors, finding, 26–27 27
company names on products, merchant accounts, 94–95 28
154–155 Merrill Lynch, 90, 91 29
co-op, 135–136 messages-on-hold services, 136–137
30
coupons, 145–146, 149 Metzger, John, 99
31
databases, 140–141 Mexico, 326–328
dealer networks, 138–139 Meyer, Katy, 236 32
differences between advertising MHA Communications, 162–163 33
and public relations and, Microsoft, 185, 302 34
165–167 Outlook, 140 35
ethnic, 172–173 Miller, Lloyd, 151
36
food as a selling tool, 147, Miller, Tom, 260
37
177–179, 182 Millman, Robert, 248–249
free offers, 149–150 Minding Her Own Business: The 38
gifts, 147, 164–165 Self-Employed Woman’s Guide 39
infomercials, 151–153, 206–208 to Taxes and Recordkeeping
(Zobel), 115 National Minority Supplier
1
Mindspring, 312 Development Council
2 Minority Business Development (NMSDC), 186–187, 368
3 Centers, 51 National Retail Federation, 318
4 minority business owners, help for, Natural Laws of Business: How to
5 40, 51, 179, 186–187, 337, Harness the Power of
368–369 Evolution, Physics and
6
Minority Prequalification Loan Economics to Achieve Business

7
Program, 118 Success, The (Koch), 15
8 modems, 287 Neutral Posture Inc., 31–32
9 Morgenstern, Steve, 297, 298 Newsletter Clearinghouse, 157, 159
10 Moses on Management (Baron), 13, Newsletter on Newsletters, 157
11 14–15 Newsletter Publishers Association,
Mossberry Hollow Natural Care 157, 159
12
Products, 307 newsletters, 157–159, 369–370
13
Mukherji, Bobby, 328–331 Newstrack Executive Tape Service,
14 Muñoz, Carmen, 215–216 274
15 Musgraves, Skip, 91 New York Credit, 82
16 My Fortune, 129 New York Credit and Financial
17 Myrick, Marilou, 250 Management Association
(NYCFMA), 100
18
Nabat family, 197–198 Noble, Ray, 328
19
Nadel, Jack, 165–166 Nokes, Jon, 152–153
20 388 Nadya, 316–317 Nolo Press, 107, 363
21 Narraway, Andy, 166 Nordic Needle, 195–196
INDEX
22 Nathalie Dupree Cooks Great Meals Nordstrom, 312

23 for Busy Days (Dupree), 178 Nordstrom Way: The Inside Story of
National Association Enrolled America’s #1 Customer
24
Agents, 106 Service Company, The
25
National Association for the (Spector and McCarthy), 312
26 Specialty Food Trade North American Production
27 (NASFT), 177, 179 Sharing Inc. (NAPS), 327–328
28 National Association of Minority Norton, Sid, 106–107
29 Contractors (NAMC), 40, 368 Norton & Townsend, 317
National Association of Temporary NOW Legal Defense and Education
30
and Staffing Services Fund, 256
31
(NATSS), 250 Nunnerley, Sandra, 131–133
32 National Association of Women
33 Business Owners, 39, 115 Oberle, Valerie, 245
34 National Black Chamber of office space, determining needs, 86
35 Commerce, 40 office supplies, 30, 88
National Business Incubation Olsten, 258
36
Association, 24 Omega, 135
37
National Foundation for Teaching On Hold Advantage, 137
38 Entrepreneurship, 235, 236 On-Hold Inc., 137
39 National Infomercial Marketing online resources, 370–371
Association, 151, 152 open houses, 160–161
Optiva Corp., 244 Pressman, David, 133
1
Oregon Stamp and Stationery, Preston, James, 187
133–134 Prime Contracting Program, 179 2
organized, how to get, 271–273 Primedia, 77 3
Orlando, Debra, 302 printers, 285 4
O’Sullivan, Terry, 59 Prior, Sarah, 228–229 5
Ourand, Chris, 151–152 Pro Crop Insurance Agency, 316
6
Procurement Automated Service
7
PageNet, 286 System (PASS), 179, 357
pagers, 286 Procurement Technical Assistance 8
Paladin Inc., 250 Centers, 180 9
Palm, 287 professional organizations, help 10
Parker, John, 342 from, 39–40 11
partners Profit Advisors, 66
12
finding strategic, 76–78 profit enhancement officers (PEOs),
13
teaming up with known, 131–133, 64–66
208–210 Project Management Memory Jogger 14
patents, 193, 204, 359, 372–373 (Tate), 165 15
Patten, Mike, 326 Prudential Insurance Co., 69–70 16
Paul, Jeff, 326–327 publicity, using a roundtable for, 40 17
Pen Collectors of America, 219 public relations, differences
18
Penn Hudson, Howard, 157, 159 between marketing and
19
pens, 219–220 advertising and, 165–167
Pepperidge Farm, 160 public speaking, fear of, 24–25 389 20
Perlman, Lee, 76–77 21
personal digital assistants (PDAs), Quezada, John, 59 22
287 Quicken, 108 23
personal information officer (PIO), Quinn, Michael, 81
24
273–273
25
Personal Preference Inc. (PPI), Rainone, Maryanne, 231–232
180–181 Rashke, Don, 109 26
Personnel Coordinators, 259 Ratner, Hedy, 169–170 27
Personnel Department Inc., The, real estate brokers, using, 85–86, 28
238 123 29
Peters, Tom, 2, 245, 347–348 Real Goods Trading Corp., 79
30
Petrocelli, Elaine, 38 recreational needs, 45–46
31
Phelps, Regina, 58 recruiting employees. See hiring
Pitney Bowes, 303 and recruiting 32
pizza market, 205–206 recycling, 30 33
Play It Again, 117 Redford, Robert, 113 34
politics, marketing and role of, referrals, how to encourage, 35
173–175 148–149
36
postage meters, 302–303 relationships, selecting, 34–35
37
Powell, Betsy, 297 Relax the Back, 18–19
Powell, John, 297 relocation, 231–232 38
Pre-Paid Legal Services, Inc., 121 remote workers, hiring, 260–262 39
prepaid phone cards, 162–163 renting, determining needs, 86
restaurant businesses, 41–42 selling your business
1
retail training, 318 preparation for, 84–85
2 retirement plans, 88–89 real estate brokers, using, 85–86
3 retreat, organizing a, 27–28 timing and pricing issues, 82–84
4 revitalization programs, 52–53 seminars, offering, 164–165
5 Rice, Lenore, 198–200 Serlin, Marsha, 244–245
Ridge, Tom, 318 service-based businesses, marketing
6
Right Fit, The (Gross), 32 for, 159–160

7
Ritter, Henry, 50 sexual harassment, 257
8 Robinson, Robert J., 73 Sharkware, 140, 348
9 Rockwell International, 25 Shaw, Eric, 82
10 Rogak, Lawrence, 257 Sherman, Howard, 209, 210
11 Roth, Byron, 66–67 Shop’n Chek Inc., 314
Rothchild, Morlee, 229 shopping malls, locating in, 202,
12
Roundhouse Products, 209–210 216–218
13
roundtable, creating an editorial, 40 Shore, Bernard, 220
14 Routers, 284–285 Shrimp Pro, 204
15 Ruderman, Harriett, 40 Siebert, Muriel, 2, 343–345
16 Rupp, Isabella, 22 Siegel, David S., 301
17 Rusche, Kathy, 218 Sierra Pacific Apparel, 326–327
Russia, 331–333 signs, 151
18
Simmons, Cal, 73
19
Sargent, Susan, 347 Simon De Bartolo Group, 217
20 390 Schaeffer, John, 79 SIMPLE (Savings Incentive Match
21 Schimel, Barry, 64–66, 88 Plan for Employees), 88–89
INDEX
22 Schoifet, Mark, 217 Sivan, Avi, 206–208

23 Schultz, Mimi, 312 Skeie, Peter, 238–240
Schwab, Eric, 168 Skytel, 286
24
SCO, 287, 288 slamming, 87–88, 366
25
SCORE (Service Corps of Retired Slash Your Workers’ Comp Costs:
26 Executives), 51, 116, 357 How to Cut Premiums Up to
27 SCOR Report, 80, 369 35%—And Maintain a
28 Scott, Susan, 53 Productive and Safe Workplace
29 Scovil, Ron, 23–24 (Lundberg and Tylczak), 240
Seabrook, Geoff, 288 Small Business Administration
30
Seale, Shelley, 143–144 (SBA), 48, 51–52, 114,
31
Seattle Pacific Industries Inc., 116–119, 179–180, 187, 324,
32 98–99, 100 329–330, 357, 358–359, 366
33 Section 105, 108–110 Small Business Development Center
34 Securities and Exchange (SBDC), 47–48, 51, 360–361
35 Commission (SEC), 119 Small Business Investment
Seibert, Mara, 198–200 Companies (SBICs), 366
36
Seid, Syndi, 334, 338–339 Smart Inventions Inc., 152–153
37
Selbo, Derek, 161 Smart Mop, 152
38 self-employed, sources of informa- Smart Office: Turning Your Company
39 tion, 377–378 on Its Head, The (Townsend),
self-help quiz, 55–57 28–30
Smedley, Ralph C., 24 Swissötel, 22
1
Smith, Kennedy, 52, 53
Snyder, David, 112 Tactica International, 206–208 2
Snyder, Sue, 112 Taggares, Kathy, 21, 171, 205–206 3
Sodaro, Janet, 252 Takashimaya, 320 4
Soderbergh, Christine, 166–167 Taming the Paper Tiger at Work 5
Solly, Refeal, 135–136 (Hemphill), 271
6
Sony, 287 Targus, 209, 210
7
Signatures, 209–210 Tarnofsky, Dawn, 231
Southwest Airlines, 342–343 Tate, Karen, 164–165 8
Speak and Grow Rich (Walters and taxes 9
Walters), 25 economic incentives, 110–111 10
Spector, Robert, 312 enrolled agents for preparation 11
Sprint, 149–150, 162 of returns, 106–107
12
Staffing Industry Analysts, 259 Section 105, 108–110
13
Starr, Tama, 93 sources of information on,
Starting and Running a Successful 107–108, 118 14
Newsletter or Magazine Tax Guide for Small Businesses, 118 15
(Woodard), 158 Taxpayers Starting a Business, 118 16
Stautberg, Susan, 22 Tax Savvy for Small Business: Year- 17
Stecyk, Mike, 303 Round Tax Strategies to Save
18
Steelcase, 32, 120 You Money (Daily), 107
19
Stern School of Business, 247 technology
Stewart-Gordon, Tom, 80 backups, importance of, 303–304 391 20
Stir Crazy Enterprises, 201–203 buying online, 290–292 21
stock ownership plans, 90–91 communications, 286–287 22
Storm Products Co., 328 computers, 29, 30, 240–141, 23
strategic partners, finding, 76–78 284–285, 301–302
24
Street-Smart Entrepreneur: 133 digital cameras, 297–298
25
Tough Lessons I Learned the electronic faxes, 304–305
Hard Way, The (Goltz), 236 evaluating your needs, 295–296 26
stress, handling, 36–38 necessary equipment, 284–285 27
Stroup, Stu, 88, 89 postage meters, 302–303 28
Subcontracting Assistance Program, scanning business cards, 29
179 298–299
30
Succeeding in Small Business training employees, 287–289
31
(Applegate), 63–64 voice mail, 43, 294–295
success, defining, 57–59 websites, creating, 299–301 32
Sundance, 113–114 telecommuting, 30, 242–243 33
Supermodel News, 158 teleconference, setting up a, 293 34
suppliers, expanding network of, telemarketers, 155 35
102–103 Telephone Doctor, 42–43
36
support groups, 39–40 telephones
37
Surety Bond Guarantee Program, 118 cellular, 286
Sutton, Joseph, 212–214 800 numbers, 175–176, 285 38
Sutton Homes, 212–214 how to get the most use from, 39
Swerdlow, Steven, 86 42–43
long-distance service, 87–88 Tylczak, Lynn, 240
1
marketing messages on, 136–137 Tyson, Bruce, 105–106
2 prepaid phone cards, 162–163
3 slamming, 87–88, 366 Uncle Wally, 350
4 television, 163–164 United Airlines, 187
5 temporary employees, 258–259 United Scrap, 244
Tesco Williamsen, 91 U.S. Agency for International
6
Thankachan, Gladys, 213 Development (USAID), 333

7
The Executive Committee (TEC), 39 U.S. Department of Agriculture,
8 There’s No Business Like Your 359–360
9 Business (Nadel), 165 U.S. Department of Commerce, 118,
10 Thompson, Arthur, 131–132 187, 329, 330, 337, 359
11 Thompson, Tommy, 241 U.S. Department of Defense, 180
Thompson Browne, Marguerite, 186 U.S. Department of Justice, 256
12
3Com, 285 U.S. Department of Labor, Bureau
13
Tiffany’s, 320 of Labor Statistics, 119, 255
14 time, managing U.S. Department on Aging
15 deadlines, internal and external, Information, 214
16 276 U.S. Hispanic Chamber of
17 organization, importance of, Commerce, 40, 172, 173, 369
271–273 U.S. Patent and Trademark Office,
18
personal information officer, use 204, 359, 372–373
19
a, 273–273 UniversityAngels.com, 77–78
20 392 plan “in” and “out” days, 275 University of California, Los
21 quiz for, 270–271 Angeles, 247
INDEX
22 tips for, 277–278 Usher, David, 138–139

23 Toastmasters International, 24–25 U.S. Robotics, 287
Tobias, Andrea Weisman, 68–69
24
Tom Peters Group, 347 Valerie Fund, 142–143
25
Townsend, Amy, 28–30 Van Dyk, Bob, 246
26 Toys“R”Us, 76–77 Van Osnabrugge, Mark, 73
27 trade associations, 373–375 Vaswani, Danny, 217
28 Trade Information Center (TIC), vendors
29 337, 364 customer service and, 318–319
trade missions, 335–337 expanding network of, 102–103
30
trade shows/parties, 168–170, 376 Vernon, Lillian, 2, 350–352
31
training employees, 252–253, Veteran’s Entrepreneurial Training
32 287–289, 318 Program, 180
33 Transition Assistance Program videoconferencing, 293
34 (TAP), 180 violence, domestic, 255–256
35 translations, 337–338 Virgin Airlines, 208
Troob, David, 84–85 Virgin Records, 208
36
T. Rowe Price, 89 voice mail, 43, 294–295
37
Tucker, Suzanne, 58 von Knoblauch, Neil, 93
38 Turra, Fred, 138
39 Tweezerman, 173–175 Wade, Elie, 136–137
Twin Plant News, 326, 328 Walter, Carl, 209–210
Walters, Dottie, 25 sexual harassment, 257
1
Walters, Lilly, 25 Workplace Violence Safety Act, 256
Washington Express Service Inc., Wylie, Scott, 229 2
65–66 Wyndham Hotels, 184 3
Washington Sportswear Inc., 186 Wysocki, Patty, 157–158 4
Watnerno, Roz, 195–196 5
Watt, Brenny, 156 Yancey, Ken, 116
6
websites, creating, 299–301 yet2.com, 290, 291, 292
7
Wehling, Michael, 113 Yoder, Don, 109
Wehling, Michelle, 113 Young Entrepreneur’s Guide to 8
Weis, Allan, 264 Starting and Running a 9
Weissman, Pearl, 234 Business, The (Mariotti), 236 10
welfare recipients, 240–242 11
Welfare to Work Partnership, Zablocky, Kim, 99–100
12
241–242 Zobel, Jan, 115
13
Wells Fargo Bank, 115, 183 Zoran, Orly, 207
Werner, Tom, 58 14
Whelan, Marilyn, 315 15
White, Vanna, 156 16
Wieman, Ward, 81–82 17
Williamson, Jon, 209
18
Wilson, John, 69
19
Wingfield, Gregory H., 262–263
Wolf, Sandi, 99 393 20
women 21
domestic violence, 255–256 22
financial aid for, 114–115, 118 23
help for, 39, 51–52, 376–377
24
international trade missions and,
25
335–336
sexual harassment, 257 26
Women Inc., 115 27
Women in Trade Business 28
Development Missions, 335 29
Women Presidents’ Organization, 39
30
Women’s Business Development
31
Center (WBDC), 169–170
Women’s Prequal program, 118 32
Wood, Dina, 289 33
Woodard, Cheryl, 158 34
working model, creating a, 203–204 35
workplace(s)
36
designing, 28–30, 119–120
37
domestic violence and, 255–256
ergonomics, 31–32 38
location, finding the right, 39
121–123, 201–203
1
2
About Bloomberg
3 Bloomberg L.P., founded in 1981, is a global information ser-
4 vices, news, and media company. Headquartered in New York,
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1
About the Author 2
Jane Applegate is one of America’s most respected busi- 3
ness journalists. She is an award-winning syndicated writer 4
and television producer. Her previous books are Succeeding 5
in Small Business and Jane Applegate’s Strategies for Small 6
Business Success. SBTV (Small Business TV), her multimedia 7
communications company based in Pelham, New York, 8
produces custom content for entrepreneurs and orchestrates 9
strategic planning and marketing initiatives for corporate 10
clients. She is married to Joe Applegate, an editor and avid 11
tennis player, and has two children, Jeanne and Evan. 12
13
14
15
16
17
18
19
20
21
22
23
24
25
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28
29
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31
32
33
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Great Idea #202:
1
5
Buy This
6
7
Book!
Jane Applegate knows you
8
have no time to waste when
9 looking for answers to tough
10
business questions. In The
Entrepreneur’s Desk
11 Reference, she has compiled
12 advice, information, and
solutions in an alphabetical
13 Available in
format, making it easy to find
14 exactly what you need—fast. January 2003
15 Filled with definitions, checklists, proven strate-
16 gies, and specific resources, The Entrepreneur’s
Desk Reference points you in the right direction. In
17
each entry Applegate and other top small business
18 experts answer your top-of-the mind questions on
19
subjects like accountants, brand building, employee
benefits, firing and hiring, mission statements, trade
20 associations, valuation, and much more.
21
Whether you are a seasoned entrepreneur or
22 just launching your small business and The
23 Entrepreneur’s Desk Reference belongs on your
shelf—you will turn to it over and over again.
24
25
26

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1

2 praise for the first edition of

Ideas FOR YOUR

never goes back to its original dimensions. 3

—OLIVER WENDELL HOLMES JR.

with so many great ideas floating around out 9

there, you might wonder how I narrowed it down to 10

201 and what criteria I used to decide whether or 11

not the idea was just average or really great. 12

Well, to me a great idea is one that is timeless. 13

useful and appropriate for a variety of small 15

businesses, no matter what they do or where they 16

are based. Universal appeal is a major requirement. 17

It also has to be something tried by a real 18

business owner in a real small business. 19

Everything in this book came from an interview 20

I’ve conducted, a business owner I’ve met, a 21

consultant I’ve quizzed, or a book or article 22

written by a respected business reporter or author. 23

Credit is given where credit is due, whenever 24

possible. If I’ve “borrowed” an idea, I’ll tell you 25

where it came from. Recognizing the people who 26

6 came up with these ideas is a great way to

15 possible. We found all sorts of interesting people to

The 201 ideas are divided into themes to make it 6

easy to find what you’re looking for. Many ideas are 7

cross-referenced to easily link you to additional 8

information on a related subject. 9

And I’ve brought several ideas up to date since the 10

book’s first printing. With so much changing since 11

the first edition was released, I decided to revise 12

many sections and update or delete others. There are 13

ask your employees to evaluate you every year. Also 15

new are ideas about borrowing money from your 16

family and finding technology to license via a new 17

online marketplace. There are always great ideas to 18

share, and this edition incorporates many new ones. 19

This book, in its handy format, is meant to be 20

read on the run. Read it front-to-back or back-to-front; 21

it doesn’t matter. But read it cover-to-cover, and tell 22

your friends about it. I guarantee you won’t be bored. 23

While Frank’s business is tiny compared to some 2

of the other business owners you’ll meet in this 3

book, you’ll see that no matter what size your com- 4

pany is, you can always use fresh management 5

One of the most successful entrepreneurs I know 7

has bigger headaches than Frank’s. In recent years, 8

she’s dealt with the unionization of her assembly 9

line workers after a very nasty battle. During that 10

incredibly stressful time, she was being wooed by 11

one of the biggest corporations in her industry to 12

manage their West Coast manufacturing center. 13

Although she’s one of my closest friends, we 14

communicate mainly via voice mail, exchanging 15

detailed messages at odd hours because she rarely 16

has five minutes free for a live conversation. But, 17

like Frank, she loves being an entrepreneur. 18

6 fancy office. You’ll find out how to set up an informal ad-

22 I’ve been an affordable management consultant for years.

22 makeover, inside and out. But why would a famous San

22 Finding a good attorney is not as challenging as you may

6 FaithWalk Leadership, explain the principles of “servant