From the October 1996 issue of Entrepreneur

If you think 800 numbers are strictly for national companies, think again. A growing number of small companies with a local customer base are marketing with vanity 800 numbers.

"It's a different application of an 800 number," explains David K. Ashley, president of Tele-Name Communications and Advertising Group Inc. in Sarasota, Florida. "This is a marketing tool that reduces the cost of advertising."

A vanity number is one that translates into words for easy recall. Such numbers are now available on a regional basis, usually by area code. This means, for example, that landscape companies across the country can share the advantage of 1-800-555-LAWN.

Why an 800 number when most of your customers are local? If used aggressively in your marketing materials, Ashley says, a memorable 800 number lets prospective customers reach you without referring to the telephone directory--where they'll also see ads for your competitors. In addition, because Americans are so mobile, you'll benefit from other companies promoting the number in their areas.

These numbers also provide consistency. "A lot of area codes are splitting, and it's very difficult for people to know what is a toll call and what is not anymore," says Ashley.

Of course, you will pay toll charges on the incoming calls, but, as Ashley puts it, "Would you give somebody a quarter to call you if you knew it would translate into new business?"

Music To Their Ears

Looking for a productivity edge? Greg R. Oldham, a business professor at the University of Illinois at Urbana-Champaign, says letting employees use personal stereo headsets may help.

The effects of background music have been studied extensively, Oldham says, and the findings docu-menting productivity increases are impressive. But there will always be people who object to background music, and headsets can eliminate the problem. Headsets allow individuals to listen to the music they prefer whenever they wish.

In a research project to measure the effect of stereo headsets in the workplace, Oldham found marked productivity gains. Employees using headsets were less nervous and fatigued, and more enthusiastic and relaxed (the study did not include non-music programming). Providing music via stereo headsets appears to be an effective way to boost productivity, particularly for workers doing relatively simple, routine jobs. What's more, Oldham points out, as a strategy for enhancing productivity, headsets are easy to implement and extremely affordable.

If you're considering introducing headsets into your workplace, however, Oldham offers words of caution. Headset users may have difficulty hearing alarms, warnings or instructions, and those who listen to music at high levels may experience permanent hearing loss. Employers may be held liable for accidents, injuries or disabilities attributed to headset use. Consider these risks and develop guidelines before your employees slip on their headsets.

Rent Check

As a tenant of a commercial space, you probably get a monthly or, at the least, an annual rent statement. Failing to audit that statement could be an expensive oversight.

In most commercial leases, there are two components of the rent, says James A. Light, a managing member with Business Properties Group LC, a commercial real estate brokerage in Salt Lake City. One is the base rent, which is the charge for the space; the other is the expenses shared by the tenants.

Check your rent statement against your lease. Be sure you are being billed only for the amount of space you occupy and that any rent increases have been calculated accurately. Then check the expenses against the terms of your lease.

"Compare the operating costs you're being billed to the costs that you negotiated for in the lease," Light says. He adds that often, the person doing the billing is not the person who actually negotiated the lease, which is one way mistakes happen.

If you find the idea of auditing your rent statement intimidating, consider hiring someone to do it for you--it could be well worth the fee. Light recommends using a commercial real estate broker or real estate attorney. "They do nothing but negotiate leases day in and day out," he says, "and they understand them inside and out."

Stamped Priority

First come, first served may be the simplest production scheduling policy, but it's rarely the most efficient. At Varian X-Ray Tube Products in Salt Lake City, materials manager Bill Kriegbaum says the master scheduling process is based on three key considerations: supporting the customers' needs, scheduling within the company's equipment and staffing capabilities, and maintaining sufficient flexibility to allow a response to changing customer requirements and unexpected situations.

"Our production operation is designed as a continuous flow, just-in-time shop," Kriegbaum says. "We build to long-term schedules, we build based on a 30-day-or-less notice from our customers, we build to the projected needs of our customers, we build to a stock replenishment program, we build to special requirements, and we also mix in a variety of research and development projects."

Each order is handled with appropriate priority, and last-minute rushes are virtually eliminated. For maximum productivity in the production process, Kriegbaum offers these tips:

  • Closely manage your critical equipment and processes. Know your alternatives in the event a piece of key equipment breaks down. Can another piece of equipment or a different process be substituted?
  • Minimize material shortages. Maintain a concentrated, dependable and flexible vendor base. Use dual suppliers on critical components. Be sure your suppliers have the resources to quickly respond to unforeseen requirements.
  • Maximize your staffing capability. Cross-train workers to avoid downtime and bottlenecks in production.
  • Streamline your production documentation system. Minimize the documentation required to establish new production demands on your workers.
  • Maintain a close information relationship with your customers. Get early feedback on changes in your customers' needs--upward or downward--so you can begin planning a strategy to meet those needs. Kriegbaum says informal communications will provide you with indications of upcoming actions much sooner than formal communications, such as purchase orders, will.

The key to the entire process, Kriegbaum insists, is people. "Don't get strangled by systems and procedures," he says. "Keep things simple and flexible. Get good people, train them well, empower them, communicate with them, and depend on them. Roadblocks will come up in every production operation, but good people know how to avoid many of the obstacles and how to maneuver around those that can't be avoided. This is what will keep you responsive to your customers' needs and differentiate you from your competition."

Sellers Market

Thinking about selling your company? To get the most out of what you've worked so hard to create, a little advance planning is essential. David H. Troob, chairman of The Geneva Companies, a national mergers and acquisitions services firm in Irvine, California, offers these tips:

  • Know the market value of your business. Crucial to the profitable sale of a business is knowing its real market value and understanding what makes it valuable, says Troob. "Too often, sellers don't maximize proceeds from the sale because they don't know the real market value prior to entering the process," he says, adding that many business owners seriously underestimate the value of their companies.

"One key reason entrepreneurs tend to underestimate value is that they fail to understand what potential buyers may see in the business," Troob says. "You need to have an evaluation done by a professional in the business of selling businesses."

  • Consider strategies to increase value. Once you know what your company is worth, you can decide whether your best strategy is to sell now or delay while you take actions to increase the price. This may include changes in your organization, key personnel, or marketing and sales strategies.
  • Understand buyer motivation. Troob says the two most common types of buyers are strategic buyers, who are looking for product extensions or niches they can buy rather than build, and financial buyers, who want a return on their investments.
  • Don't assume the best buyer is local. Marketing your business in a narrow geographic area limits your opportunities for a successful sale. Troob recommends using a broker with a national and international network to find a buyer who has the resources to move forward.
  • Know what you want in both cash and noncash compensation. The sale price is only part of the negotiations. If you desire, Troob says, the transaction can usually be structured to give you continued input into the business, such as through a consulting position, while still meeting the buyer's needs.

Board Games

In a typical corporate situation, the shareholders elect a board of directors who hire the officers who actually run the company. But if you're the sole shareholder and you're running your own company, do you need a board of directors?

Perhaps not in the traditional sense, but you could benefit from setting up an advisory board, says Lois Mitten, founder and CEO of Children's Discovery Center, a chain of child-care centers in Toledo, Ohio. "My advisory board has been crucial to my success," Mitten says. "They have steered me away from some bad business decisions. They have also prodded me in times when I have not wanted to grow."

Mitten formed her board shortly after she opened her first center. She was taking a small-business financial management course, and the professor advocated creating an advisory board. "He said many businesses fail because they don't have an advisory board, but putting together a strong advisory board and using it well can mean the difference between success and failure," she recalls. "I decided to take his advice."

Today, that professor serves on her advisory board, along with an accountant, an attorney, a banker, an insurance agent and an early childhood education professional. "We get together at least once a year, sometimes more frequently, and look at various business decisions," Mitten says.

Some members of Mitten's board donate their time; others, such as the accountant and attorney, are paid at their standard rate; and still others, such as the banker and insurance agent, consider their participation and advice as part of their overall service package.

To set up your own advisory board, look for individuals whose business acumen you admire. Include members with a variety of areas of expertise, both in general business and specific to your industry. Establish a term of office and make your expectations clear--when and for how much time do you want them available, and what are you offering in return? A position on your board shouldn't necessarily mean a lifetime commitment; stagger two- and three-year terms to keep the board fresh.

Get the most out of your advisory board meetings by preparing for them well in advance. Choose a site that is comfortable and free of distractions. Solicit input for the agenda, and distribute important information ahead of time. Run the session as you would any professional meeting, and follow it with an action plan.

Finally, keep your board members informed of your company's activities between meetings. The fact that they've agreed to be on your board means they care about your company, and keeping up-to-date will help them be of greater value to you.

Make Your Mark

In the business world, the name associated with a successful company, product or service contributes significantly to its worth. Trademarks are the names and symbols used to identify products; when they are used to identify services, they are called service marks. Both are covered under trademark law, and it's common for the terms to be used interchangeably or for the term "mark" to refer to either. But whatever you choose to call it, your mark is a valuable asset, and you need to take care of it.

Here's how to protect your mark:

  • Register your mark. Consider protecting your mark through state or federal registration. Contact your state trademark office or the U.S. Patent and Trademark Office in Washington, DC, for more information and instructions. Once your mark is registered, always use the appropriate symbol--either TM, SM or ® (the federal registration symbol)--with your mark.
  • Use your mark. A mark must be in continuous use for the owner to be able to keep others from using it. A mark that is not used for two years or longer is no longer protected under trademark law.
  • Control your mark. Establish clear policies for how your mark is to be used, and enforce them consistently. This keeps your mark distinctive and avoids confusion in the marketplace.

Contact Sources

Biographies, 1126 Forest Ave., Wilmette, IL 60091, (847) 251-5295;

Cloudburst Misting Systems, 1842 Washington Wy., Ste. B, Venice, CA 90291, (800) 800-5479;

Creative Products Resource Inc., 132 W. Greenbrook Rd., North Caldwell, NJ 07006, (201) 403-0723;

George S. May International Co., 303 S. Northwest Hwy., Park Ridge, IL 60068-4255, (847) 825-8806;

International Bagel Institute, 1550 Berkeley Rd., Highland Park, IL 60035, fax: (847) 831-4242;

McMillan Bros. Creative Business Environments, 1041 S. Main St., Royal Oak, MI 48067, (800) 788-3375, (810) 546-1480;

National Association for the Self-Employed, 2121 Precinct Line Rd., Hearst, TX 76054, (800) 232-NASE;

National Small Business United, 1156 15th St. N.W., #1100, Washington, DC 20005, (202) 293-8830;

New York State Department of Labor, State Office Campus Building 12, Albany, NY 12240, (518) 402-0189;

Tauriello Interiors & Painting, 275 Smallwood Dr., Snyder, NY 14226, (800) 563-4214;

Vanelli's Restaurant, P.O. Box 7315, Tupelo, MS 38802, (601) 844-4410.