CEO's Notebook

Various CEOs share thoughts, concerns and advice on such subjects as training and international banking.

CEO's Notebook

I need a bank that can handle our international business.
Frederick Roberts, chief financial officer of Allen Systems Group, a $24-million software developer based in Naples, Fla., knows it's crucial to build the right international banking relationships. "Some U.S. banks say they're international banks--but it turns out that they're really relying on a network of foreign-correspondent banks, which may or may not efficiently serve your needs," he says. Roberts, who works with 11 banks, recommends choosing "international banks that have major presences in the financial sectors of the big cities of those countries where your business is centered."

At one point, Roberts noticed that Allen Systems' international customers paid bills weeks or months later than domestic clients. Once the company set up bank-deposit accounts in key European and Asian locations, that gap disappeared. When shopping for a foreign bank, Roberts suggests, focus on the countries where your international business is concentrated. Then compare several banks, considering both service and fees, especially on cross-border transactions. "There's more room to negotiate than you'd imagine, especially as your business increases," he notes. --Jill Andresky Fraser

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BENCHMARK
What Worries CEOs

The companies on the 1996 Inc. 500 list may be the nation's fastest-growing privately held businesses, but their CEOs aren't complacent. When we surveyed the Inc. 500 CEOs, their most frequently cited concern was competitors' plans. Some other responses, such as managing growth and managing people, most likely reflect the stresses of running a hypergrowth company. Since the companies on the list had a median 1991­1995 growth rate of 1,037%, it's no wonder their CEOs worry about keeping up with management challenges.

What business issues worry you most? Send your comments to stephanie.gruner@inc.com.

Inc. 500 CEOs' Biggest Worries
Competitors' strategies	18.0%
Managing people	17.2%
Keeping up with technology	13.0%
Managing growth	12.5%
Managing money	12.3%
Raising enough money	9.0%
Government legislation	7.0%
Meeting orders	3.3%
Lawsuits	2.0%
Other	5.7%

Source: Based on a survey of the 1996 Inc. 500.

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We're building a Web site. How can I ensure a bug-free launch?
Jeffrey Bezos, founder of the online bookstore Amazon.com, tested his giant World Wide Web site before opening it up to the Web at large, in 1995. Employees gave friends the site's address and a fake credit-card number and asked them to place mock orders. The planned six-week test period mushroomed into three months as the 300 users reported bug after bug. "It was a huge success," Bezos reports. "We found all the major and most minor bugs." He now recommends a trial run to even the smallest sites. "Most people just put a site up and learn about the bugs over time. But the problem with that is the first people who try it may just give up and never come back," he notes. --Phaedra Hise

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How can I choose compatible joint-venture partners?
Lisa Jacobson, president of Manhattan-based Stanford Coaching Inc., asks potential joint-venture partners to take the same behavioral test she uses to screen prospective employees. When Jacobson, whose company expected $2.3 million in 1996 sales, is approached by people interested in opening new sites for her exam-preparation service, she asks them to take the behavioral test before she agrees to talk seriously to them. She uses it to filter out personality types that she'd find hard to work with. --Stephanie Gruner

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How can I develop better relationships with suppliers?
Can you find a role model? When Cagwin & Dorward Landscape Contractors, in Novato, Calif., won a contract with Hewlett-Packard, the landscape company got a supplier-relations model as well as a prized client. Using the supplier-evaluation criteria developed by Hewlett- Packard, Cagwin & Dorward, which expected $13.3 million in 1996 sales, evaluated its own suppliers in such areas as technology, responsiveness, and customer service. According to chief operating officer Wayne Richards, the new standards helped Cagwin & Dorward identify unsatisfactory suppliers--so that it could work more closely with those remaining. --S. G.

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How can I possibly find training that fits my needs and budget?
Don't overlook the resources of your local community college. While services among community colleges vary, that's where Bill Carson, president of Cutting Dynamics, recently found the training his employees need--at a price he can afford. Workers at the Cleveland-based aircraft-parts manufacturer, which has more than $5 million in sales, will study skills like blueprint reading three mornings a week. Cutting Dynamics will pay per community-college course, rather than per student, at a rate of $3,000 for each 30-hour class, which includes approximately 18 students. Carson expects the class to pay for itself in improved productivity. "Some machine tools cost as much as $600,000," he estimates. "It costs more to have people who don't know how to operate them efficiently." --S. G.

See Resources below.

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Hot Tip
Gerald Padian is both a partner in the New York City law firm Tashjian & Padian and an investor in a start-up restaurant. He realizes he could be responsible for the start-up's payroll- and sales-tax liabilities. "Although the company is the first line of liability for those unpaid taxes--as well as for back-interest charges and tax penalties--if the company is unable to pay, tax authorities can go after any number of people," says Padian. That hit list can include shareholders--even if they didn't know tax payments were skipped. So when Padian and others invested in the restaurant, they made sure the company hired a payroll service to handle payroll-tax filings. "Since we couldn't find a similar firm to handle our sales taxes, we set up an internal system that calculates and sets aside those taxes on a daily basis," says Padian. --J. A. F.