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Network: September 1992

Network questions and answers.

This month a reader asks how he should reward employees with equity: should he sell it or give it away, and when? Maybe he's asking the wrong question. What's your advice on equity sharing, or any of this month's questions?

Do Your Own Deal
I own a one-person personal-training business. I want to attract some accountants, lawyers, and other professionals as investors. Can I can put together an offering memorandum without a lawyer?

Christopher Peterson

President

Christopher's Metro-Fit

Flemington, N.J.

* * *

Yes, but Dennis O'Connor, a lawyer with O'Connor, Broude & Aronson, in Waltham, Mass., says a do-it-yourself offering is unusual and unwise. Make a mistake and you'll have to rescind the offering and give the money back to investors. If a jury finds criminal fraud, you'll be fined by the Securities and Exchange Commission or state securities commissions. If civil fraud is found, investors could sue for punitive damages. If there's no fraud, and you simply make a mistake, you could be sued for negligence.

Still interested? A company's officers may sell securities without a license in some states, according to Drew Field, author of Take Your Company Public , (Simon & Schuster, 1991, $24.95). Other states require you to pass exams. Call the state securities commission, or check The Blue Sky Law Reporter (Commerce Clearing House, available at most law libraries), which lists state regulations.

If you're raising money in several states, you may have to register the offering with the SEC. The local SEC office can tell you if you qualify for exemptions for small offerings. Call the SEC's publications unit (202-272-7461) to order its Small Business Package, which walks you through the offering process. And write for copies of the Regulation D private-placement package (SEC, 450 Fifth St. NW, Washington, DC 20549, Attn. Public Reference Branch; state that you're willing to pay for copying, billing, shipping, and tax). And ask the state securities commission in your investors' home states for guidelines and advice.

* * *

To Market, to Market

My company has never done formal market intelligence, lead follow-up, sales-force management, or forecasting. Now I've been asked to establish a marketing department. What books will help?

Richard Bates

Marketing Manager

Standard Steel Specialty

Beaver Falls, Pa.

For an overview of marketing, David G. Fubini, managing director of McKinsey & Co.'s Boston office, recommends The Portable M.B.A. in Marketing (John Wiley, 1992, $24.95). Authors Alexander Hiam and Charles D. Schewe "strip away the vocabulary and get to the substance."

When you're ready to write a marketing plan, "there are some basic primers out there to get you going," says Geraldine A. Larkin, manager of the emerging-businesses department at Deloitte & Touche, in Ann Arbor, Mich., who wrote one of them, 12 Simple Steps to a Winning Marketing Plan (Probus, 1992, $16.95). For step-by-step advice, Gordon Paul, co-author of Marketing Management: Strategies and Programs (McGraw-Hill, 1985, $45.85), suggests Strategic Market Planning (1990), by Robert J. Hamper and L. Sue Baugh, and The Successful Marketing Plan (1990), by Roman G. Hiebing Jr. and Scott W. Cooper (both from NTC Business Books, Lincolnwood, Ill., $39.95 and $34.95, respectively). The first identifies pitfalls; the second tells how to write a plan.

As you're writing the plan, you'll need a guide to available resources. Chuck Savage, vice-president of sales at Kullman Industries, a construction company in Avenel, N.J. (see "A Seminar of One," Sales & Marketing, December 1991, [Article link]), recommends The Marketing Sourcebook for Small Businesses , by Jeffrey P. Davidson (John Wiley, 1989, $24.95). Also try the American Marketing Association ($145 for an annual membership; 312-648-0536) and the Direct Marketing Association (membership fees begin at $495; 212-768-7277), which has a database of direct-marketing facts, theories, and case histories.

* * *

Recruiting Recruiters
We run a small student-exchange program that brings Scandinavian teens to the United States. Our problem is selling the program's merits overseas, so we'd like to find a partner who knows the ins and outs of recruiting in Scandinavia. How do we find such a partner?

Ed Bikales

Director

New Friends

Burlington, Vt.

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