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Donation Ration

My company is inundated with requests from local charities. I want to support the community, but how do I determine which ones to support and which ones to say no to?
Name withheld

Some company owners do good where they can do well by mimicking the philanthropic leanings of their best clients. That's not exactly cold, but it sure seems calculating. A better tactic: Try boosting loyalty and morale by favoring the causes of your employees.

That's what Paul Brainerd did when his Seattle-based software company, Aldus Corp., started growing rapidly in the late 1980s (it was acquired by Adobe Systems in 1994). Besieged by requests from charities, Brainerd created a 10-employee committee to choose one cause they felt especially passionate about. They identified homelessness -- a major problem in Seattle.

Once you've picked a charity (or more than one, if your work force is philanthropically diverse), designate it the sole recipient of your largess. That makes other solicitations easier to decline. "You can tell people, 'I'm sorry, but that's not our focus," says Brainerd. And since bad guys may skulk behind good causes, consult a watchdog group such as the Better Business Bureau's Wise Giving Alliance. If you can meet the charity's executives and tour the facilities, so much the better.

To really make an impact, donate time as well as money. Nothing fosters teamwork like serving sandwiches side by side at a soup kitchen. And be sure to honor your commitments. If those in need can't trust you, why should your customers?

The Price of Advice

I have a small software-development business. I recently hired a consultant to help negotiate contracts and handle legal issues. Its fee is 25% of what I make on any given deal. It does a pretty good job, but isn't 25% high?
Name withheld

Consultants who make rain deserve to soak up some themselves. Contingency fees are common when business-development services include drumming up new clients, says David Galbenski, CEO of Contract Counsel, a legal staffing company based in Madison Heights, Mich. But if you're landing all the fish and your consultants just fillet them, an hourly fee is more appropriate, Galbenski advises. Rates for contract lawyers vary based on factors such as experience and location, but $175 to $250 an hour is reasonable. If you're being billable-houred out of house and home, you might even consider hiring your very own in-house attorney, which typically costs between $80,000 and $150,000 a year.

Pay Attention to Me!

My partner and I have a small public relations firm with one client. What are the best ways to develop our business? We know how to promote others but are having a hard time promoting ourselves.
Susan Walsh Marketing Mystic, Chicago

No one will consult a dentist whose own teeth are rotting, and no one will hire publicists who can't distinguish themselves from the crowd. So figure out what all those other PR firms are doing and then march in the opposite direction.

For example, instead of telling prospects what they should know about you, demonstrate what you know about them. Bill Toliver, CEO of Sweetgrass, an advertising firm based in Seattle, researches all potential clients and sends them books and video clips he thinks they'll find useful in their business. Patience is key, says Toliver, who spends a third of his time finding and mailing provocative tidbits to each company every few months. "They will call eventually," he says. (Note: This practice works because it reflects on you while turning the light on your customers.)

Also, avoid the Stupid PR Trick of inundating prospects with Slinkys, mousepads, and other worthless clutter. Instead, impress them with class. Top-notch paper stock and high-quality printing have helped Tom Goodman, CEO of New York City PR and advertising firm Goodman Media International, land such blue-chip clients as department store Neiman Marcus. Goodman spreads company news in style, spending up to $7,000 once or twice a year on elegant announcements of milestone anniversaries, for example, or changes of address. Prospects see those high-toned communiques and imagine their own messages similarly adorned.

Stumped by a thorny business problem? Let Inc. help. Send your questions to AskInc@inc.com. We'll consult with experienced entrepreneurs and savvy advisers, folks who've been where you are and figured out what works and what doesn't. If you don't like what we have to say -- well, you can tell us that, too.

Last updated: Dec 1, 2004




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