CEO's Notebook

Various senior businesspeople answer topical questions about such areas as taxes, banking, and training.

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CEO's Notebook

How can we make our training programs more effective?
Try role-playing. Stan Frankenthaler, chef and president of Salamander Restaurant, in Cambridge, Mass., brings an element of the theater to his ongoing training sessions. Once a week waitpeople at the business act out scenarios such as medical emergencies and computer breakdowns. "Verbal instructions are often hit-or-miss," says Frankenthaler, whose restaurant reported more than $2 million in 1996 sales. "When the staff is actively involved in training, the lessons are more long lasting." Another payoff: group participation fosters camaraderie.

Mark Leavitt, president of MedicaLogic, in Beaverton, Oreg., uses skits to train not only employees but also customers. MedicaLogic, a $10-million company that makes electronic-medical-records software, holds half-day "clinic work-flow simulations." Groups of new employees (or a new client's medical-office staff) take turns playing doctor (or patient or receptionist) and responding to various illustrative crises. Leavitt says customers are better prepared for their first day with the system "because they've been through it before." Armed with a feel for medical-clinic life, employees can better design, sell, and service the product. --Stephanie Gruner and Christopher Caggiano

Benchmark
Cutting Tax Bills Through Deductions

According to a recent survey, one of small-business owners' biggest tax concerns is finding all the deductions for which they qualify. The study, conducted by Intuit, also revealed that small-company owners are spending 208 hours a year--or four hours a week, on average--maintaining business tax records. (Caveat: Keep in mind that Intuit, which commissioned the survey, is a financial-software company.) Check out the data below to see which deductions other entrepreneurs find most useful. --S.G.

My company's largest tax deduction-- Automobile: 18%
Business equipment: 46%
Advertising/ promotion: 26%
Entertainment/meals: 2%
Travel: 3%
Other: 5%

Source: Survey of 200 small-business owners with 20 or fewer employees, conducted by Intuit, San Diego, and David Michaelson & Associates Inc., New York City, October 1996.

What can I do to land a big customer?
Thomas Beggs, founder of market-research company Stat One Research, in Atlanta, regularly combs the local and national press for "help wanted" ads related to his field. In fact, Beggs, who is a part-time M.B.A. student, got his first Fortune 500 client by responding to an ad he found at his university's placement office for a paid internship. His theory: the ad indicated a need his business might be able to fill. Using the ad as an opening, Beggs followed up with faxes and phone calls until he got an order from the company. Though the contract was small, Beggs says it was a major milestone for Stat One Research, which had 1996 sales of about $100,000. --S.G.

How can I improve my presentations to potential investors?
Consider attending venture-capital fairs early on. That's the recommendation of Diane Vincent, a senior editor at Exam Master Corp., a publisher of medical-study tools in Middletown, Del. "Although our products were still in the development stage, we attended two fairs this past year: first a small one in Wilmington, and then the larger Mid-Atlantic Venture Fair, in Philadelphia," she explains. "The first one was like a dress rehearsal, because we got wonderful feedback about our business plan, including focused advice about what venture capitalists wanted to know about our management team. After that first fair, we didn't exactly change our business plan--but we clarified and streamlined it." The result: at the second fair, Vincent says, Exam Master caught the attention of some venture capitalists who want to follow its growth. --Jill Andresky Fraser

We're gearing up to challenge established competitors. Any tips?

Consider a focus group about their product or service, not yours. "Our competitor does very good business," says Paula Connaghan, cofounder of Weather or Not, a start-up retailer in Albany, Oreg., that specializes in outdoor fabrics. "We wanted to know what we could do better." Before Weather or Not put together its first catalog, the company held a focus group using its competitor's catalog. Weather or Not's two founders picked up valuable insights about what to imitate and what to improve. --S.G.

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