CEO's Notebook

This section focuses on topics and advice from various CEOs around the country on issues from employees to technology.

CEO's Notebook

Everyone here wants a new computer. How do I allocate my limited technology budget?
Seko Worldwide, in Elk Grove, Ill., has a novel way of deciding who gets new computers: the $106-million company runs an essay contest. Earlier this year Seko, a freight-forwarding company, asked 80 of its independent sales reps to compete for 20 fully loaded Toshiba Satellite Pro laptops. The gist of the essay question: Why should you get a new laptop, and how will it benefit you and Seko? "We wanted to make sure we were giving the computers to the right people," explains Cathy Moran, Seko's director of sales training and support. "We got a lot of very creative responses." One rep gave the laptop a name and told a story from its perspective. Another even recorded a song, to the tune of the Beverly Hillbillies theme: "This is a story about a man named Bob, whose computer was so slow, he could hardly do his job..." Top 40 material it wasn't--but the man got his laptop. --Susan Greco

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BENCHMARK
What--me, outsource?

As overused management buzzwords go, outsourcing ranks right up there with reengineering and shifting paradigms. If you read enough trendy business books, you might start to think everybody's contracting out everything. Not so fast. According to a recent survey by Dun & Bradstreet, outsourcing may not be nearly as omnipresent as you might imagine. Nearly two-thirds of the small-company respondents said they didn't outsource any aspect of their business. --Christopher Caggiano

Small Companies' Outsourcing Habits

Does your business outsource any of its functions?
No 65%
Yes 35%

(If yes) Which services did you outsource in 1996?

Accounting or tax preparation 53%

Payroll 41%

Credit collection 13%

Customer management 3%

Sales or marketing 2%

Other 35%

Source: 1997 Dun & Bradstreet Public Relations Small Business Study, a survey of 398 businesses with 100 employees or fewer.

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What can we do to attract attention at trade shows?
One strategy: go where the big companies aren't. When Peter van Stolk, CEO of Urban Juice & Soda, in Vancouver, B.C., attended a major beverage trade show in 1996, he knew his $2.6-million company--the maker of Jones Soda--needed to draw attendees to its booth. So van Stolk paid temps to stand at the airport gates, holding up signs with the names of famous people on them ("Mel Gibson, Jones Soda, Booth 104"). He also hired people to give away Jones cigars at hotel bars and place Jones stickers in the bathrooms of popular nightspots. --Christopher Caggiano

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My company is growing fast. How can I help employees cope?
"Three years ago I was running a nice small company," says Lisa Lorimer, president of Vermont Bread Co., in Brattleboro, Vt., "but my sales have doubled in the past two years." To help her workers adapt to growth, Lorimer arranges for them to meet their counterparts at bigger companies. "We get about a dozen people into a van and travel to several companies," says Lorimer, whose business has about $8 million in sales. "We talk to the people on the floor rather than to the CEO. I sit back and let my employees do the talking." So far, Vermont Bread workers have made field trips to five companies. Most, Lorimer reports, were more than willing to "let us in behind their facade." --Susan Greco

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Customers take our early-payment discount--but pay late. Any tips?
If you offer a discount for prompt payment, how can you prevent customers from abusing it?

Collect in person. During the start-up years, Ron Huston, CEO of Advanced Circuits, a $6.2-million circuit-board manufacturer in Denver, gave customers a 1% to 2% discount on payments made within 10 days. But Huston couldn't afford to take the chance that customers would take the discount yet pay late. So he called local customers and offered the lower price, provided that he could send someone over to pick up the check in person. "The first couple of years I'd even go over myself," he says. "I had payroll to cover." For out-of-state clients, Huston would send a courier service over to pick up and mail the check.

Charge them the next time. When customers to whom he's offered early-payment discounts pay past the due date, Shelby Hacala, CEO of Plasmatec, in Montreal, Que., knows what to do. He charges customers the difference on their next invoice. "Usually, they just pay it," says Hacala, whose six-person company distributes thermal spray powders and equipment to the aircraft industry. --Christopher Caggiano

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Hot Tip
Justin Fallon, founder of 1-800-SOLD-OUT, in Darien, Conn., presents one-page "job descriptions" to prospective lawyers, accountants, and marketing companies he interviews. "If you can't clearly state on paper what you're expecting from someone, you're in trouble," says Fallon, whose $3.2-million company sells ticket packages to events. For example, Fallon says, he has learned that he needs legal advisers not just to write company documents but also to provide expert guidance. "I need them to think and anticipate problems," he says. After writing up a description to that effect, Fallon took it to the three best law firms in his state. Today, he says, he gets the top-notch legal advice he needs. --Stephanie Gruner

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Off the Record
What entrepreneurs are telling Inc. about their home lives

"My biggest problem is getting a life. My wife has threatened to turn me in for another golden retriever."

--CEO of a $1.5-million software company in Minnesota

"I see my kids all the time because I work out of my home. And now that it's summertime, it's playtime. They interrupt me while I'm on the phone with Kmart. I have to see the picture they just drew or solve a sibling issue. I have no problem with the interruptions. My office staff would choose otherwise."

--President, home-based importer in Connecticut with $4 million in sales

"I knew my travel schedule was out of control when my wife and 3-year-old were standing outside. An airplane flew overhead, and my wife said, 'Do you know what that is?' 'Yes,' my daughter replied. 'It's Daddy's office.' "

--CEO of a start-up software business in Texas

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How can I get employees to buy into our strategy?
Jennifer Lawton, CEO of Net Daemons Associates Inc., which has headquarters in Woburn, Mass., circulates her annual business plan to all of her 58 employees to get their feedback and support. Workers at the $3.3-million computer-network consulting company are given the plan before the yearly corporate meeting, at which employees are expected to ask questions and offer suggestions. "Our employees are very vocal," says Lawton. "If they don't pipe up there, they will follow up with you independently."

Lawton has demonstrated to her employees that she pays attention to their comments. At the most recent meeting, one engineer questioned the 100% to 200% growth projection for the next year. After a lengthy discussion with the staff, Lawton changed the projection to 80% to 100%. "His question caused me to think about how that growth feels from an engineer's perspective," says Lawton. She decided to grow the business more slowly rather than risk alienating her employees. --Stephanie Gruner