CEO's Notebook

I need good sales reps. Where do I look?
Tony Prisco of GI Apparel, a $20-million company in Farmingdale, N.J., turns to other companies for help finding top-notch reps to sell his novelty T-shirt line. If Prisco is trying to break into a particular geographic area, he calls manufacturers of complementary products with significant distribution in that region and asks which sales representatives they use. While not everyone will share a talented rep, some manufacturers happily pass along names. "They know who the good reps are," Prisco says. "They've already done your job for you." If he's trying to get into a particular store, Prisco contacts the buyers and asks them to recommend a rep. "Buyers like to work with only a limited number of vendors," he says. But the stores might buy from Prisco if he can go through a rep they already deal with. --Christopher Caggiano

Where to Find Business Help
Where do small-business owners get information to help them run their companies? According to a recent survey, the most popular sources are magazines and newspapers, followed by books and software. The next choice? Local business organizations such as chambers of commerce and Rotary Clubs. That doesn't surprise the U.S. Chamber of Commerce, since 75% of its members are businesses with 10 or fewer employees. Mary Lou Bessette, president of Bessette & Co., a home-based consulting business in Phoenix, even uses her state chamber of commerce office for client meetings. "I can meet customers at my home," she says, "but if they don't like miniature dachshunds, I'm in trouble." --Stephanie Gruner

Where do you get information about running a business?*
Magazines and newspapers 25%
Books and software programs 22%
Associations (such as chambers of commerce) 15%
Past personal experience 11%
Education and training 9%
U.S. Small Business Administration 7%
Friends and family 5%
Nowhere 4%
Other business owners or businesspeople 3%
State and federal government 2%

Source: Survey of more than 300 small-business owners with fewer than 100 employees, conducted by New England Business Service Inc., in Groton, Mass., 1996.

How can I identify good candidates for a telephone-intensive job?
"It's amazing the number of people who are uncomfortable on the phone," observes Chuck Surack, president of Sweetwater Sound, a $20-million business in Fort Wayne, Ind. When Surack hires telephone salespeople, he runs newspaper ads listing only the position and a telephone number. Callers get a recording that introduces Surack's musical-equipment company and gives them five minutes to explain why they should be hired. Any caller who provides a good "audio rÉsumÉ" is asked to submit a written version. --C.C.

How can I get more from my bank?
Terry Anderson, CEO of $58-million computer manufacturer Omni Tech, in Pewaukee, Wis., says that changing his attitude improved his banking relationship. "It took me a long time to realize that I'm valuable to a bank," says Anderson, whose Inc. 500 company had sales of close to $5 million as recently as 1991. Viewing his bank as merely one of his suppliers makes Anderson feel more comfortable playing the demanding customer. The result? His bank started offering better terms. Here's his advice:

Check out your peers' banking relationships. Anderson asks fellow businesspeople what kinds of deals they get from their banks and then asks his bank for similar terms. He also taps his accountants for advice. "They said we could get a better interest rate by a point," says Anderson. Sure enough, the bank agreed to that. Other improvements: the bank waived a number of requirements and granted him a certain type of sweep account.

Shop around. Anderson submits financials to two other banks every quarter and meets with them semiannually. He says the process lets other banks track his progress and keeps his bank competitive. "It's OK to let two or three banks work against each other," he observes. "They'll recognize you as a shrewd player and accommodate you." --S.G.

What can I do to improve employee morale?
Have you considered giving employees a say in hiring new colleagues? Ric Edelman, CEO of Edelman Financial Center, in Fairfax, Va., believes an all-inclusive hiring process helps create a close-knit atmosphere at his $7.5-million investment-advisory company. No applicant wins a job in any of the service's six subsidiaries without facing grueling officewide scrutiny. First, potential hires are screened by telephone. Then as many as 10 are interviewed, usually by employees from the division that's looking to hire. Finally, 80 employees organize six teams--one per subsidiary--and each team interviews the top 3 candidates. If any team turns thumbs down, not even Edelman can veto the decision. He says the strategy both reduces turnover and yields "high-quality people, because employees hire in their own image." --Robert A. Mamis

Hot Tip
Tom Siebel, chairman and CEO of $39-million Siebel Systems, in San Mateo, Calif., wants to make sure employees always keep customers in mind. So he covered the walls of his sales-force-automation-software company with customer paraphernalia. The lobby is plastered with client logos, and the halls are decorated with framed letters and annual reports from clients. What's more, Siebel Systems' conference and training rooms are named after clients. In addition to getting employees' attention, the decor yields another payoff. Says Siebel, "Customers walk in and see their logo in the lobby and their name on the conference door--and they know that we value their business." --S.G.

Off the Record
This month Inc. asked company builders, "When do you step back and think about the big picture?"

"I do most of my thinking when I'm driving or working around the house. And almost every day, I have lunch with the company's two founders. We're so busy that that's the only time we've got for big-picture planning." --CEO, high-tech start-up with more than $1 million in sales

"Our entire company meets twice a year in the Catskills to focus on planning. In between meetings we hike, swim, and play volleyball." --Vice-chairman, natural-foods company with $6.5 million in revenues

"I plan in between managing the business from 9 to 5, picking up the kid at 5, cooking dinner, and then spending 10 to 2 surfing the Web and reading about our industry. On weekends and late at night I look at what we've done and look ahead to what we want to do." --Founder, Internet-related business with $400,000 in sales

Why give stock options rather than stock?
Although stock-option plans are most commonly associated with publicly traded companies, privately held companies also use them. Federal Document Clearing House, a four-year-old electronic publisher of news and information in Washington, D.C., started a stock-option plan recently, according to managing director Jim Ellis. Previously, the privately held company, which has more than $1 million in sales, simply gave key employees nonvoting stock periodically. Why the change? "Since our company is growing rapidly, our stock has also become more valuable," Ellis explains. "That meant we were saddling our employees with a tax liability each time we made them a gift." With the kind of option plan the company chose, taxes become an issue only when employees exercise the options. Plus, the new option plan includes rules regarding employee departures and a three-year vesting schedule to discourage turnover. One downside: the company must now have regular stock valuations. --Jill Andresky Fraser


FEDERAL DOCUMENT CLEARING HOUSE, Jim Ellis, 201 Pennsylvania Ave. SE, Washington, DC 20003; 202-547-4512; 104

GI APPAREL, Tony Prisco, 271 Adelphia Rd., Farmingdale, NJ 07727 104

EDELMAN FINANCIAL CENTER, Ric Edelman, 12450 Fair Lakes Circle, Suite 200, Fairfax, VA 22033; 703-818-0800; 104

OMNI TECH, Terry Anderson, N. 27 W. 23676 Paul Rd., Pewaukee, WI 53072; 414-523-3300 104

SIEBEL SYSTEMS, Tom Siebel, 1855 S. Grant St., San Mateo, CA 94402-2667; 415-295-5000 104

SWEETWATER SOUND, Chuck Surack, 5335 Bass Rd., Fort Wayne, IN 46808; 219-432-8176 104