A Denver-based health-care coalition is planning an unusual experiment in medical self-insurance for even very small companies. The Colorado Business Coalition for Health already negotiates discounted group rates with local health-care providers for its 400 member companies; it then assists those with 50 or more employees to control rates by self-insuring while buying stop-loss insurance. Now, the coalition wants to organize companies with fewer than 50 employees into group cooperatives large enough to self-insure.
Trade shows have become good places to encounter heads of larger companies, according to a new survey. When consultant Allen Konopacki interviewed 100 CEOs of Fortune 500 and midsize companies in 1984, only 39% said they ever attended industry trade shows; this year 82% of the chief executives reported they go. In the first survey, "many corporate chiefs seemed insulted by the inference they might be attending shows," says Konopacki. "Now, they seek [them] out." He thinks the changes reflect a fast-paced competitive environment and an emphasis on forming close relationships with suppliers and customers.
The newest concept in business structure is something called the limited-liability company. Last year the IRS gave its initial blessing to this form, which combines the individual taxation of a partnership with a corporation's limited liability, but without the special eligibility requirements of an S corporation. It "could be the [business] entity of the future," says Jerry August, editor of The Journal of S Corporation Taxation. A big stumbling block: only Florida and Wyoming allow businesses to adopt the form. Unless more states sign on, limited-liability companies will enjoy limited benefits as well.
Payroll-deduction plans for auto and homeowners' insurance, while still rare, are growing in popularity. The reason? Companies can tout a plan's convenience, and sometimes offer group discounts, without significantly adding to benefits costs. Although many insurers offer such plans only to very large employers, some sell to companies with 100 or more people, and a few firms target groups as small as 25. And the field is growing: Liberty Mutual Insurance says that payroll-deduction plans account for only 4.5% of its total business in homeowners' and auto insurance -- but for 15% of its new business in the area.
As colleges offer more courses in entrepreneurship, new academic niches are opening up. At least 18 colleges now have courses in family business, for example. There are a handful of franchising programs being offered as well, and two schools are working on programs dealing with entrepreneurship and the law. "It's marketing strategy," says Bernard H. Tenenbaum of Fairleigh Dickinson University. "The schools are trying to position themselves." He should know: Fairleigh Dickinson hopes to develop its own specialty -- entrepreneurship and public policy.
A Thornwood, N.Y.-based limousine franchisor hopes to avoid traditional conflicts with franchisees by making them stockholders. Under the plan, franchisees of Leros Point to Point will receive equity in Leros according to a formula based on royalties and franchise fees. Founder Lonnie Lehrer thinks that, as shareholders, they will be better attuned to the franchisor's interests. The plan appears to be the first of its kind, which doesn't mean it won't work. "I've never heard of it," says consultant Robert Kushell, "but . . . I think the idea is beautiful." n
-- Martha E. Mangelsdorf
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