Dress Rehearsal In the land of simulation, you can test sales strategies, plot market development and more -- without a bit of risk.

Every few years, just like clockwork, Bill Biach would have a really good year. He'd reinvest earnings in a new marketing campaign, an extra salesperson or an engineer who added expertise to Biach Industries. Then every few years, just like clockwork, profits would plunge and force him to curtail his marketing efforts, lay off salespeople and furlough engineers.

Biach, whose father founded the 26-person, Cranford, New Jersey, industrial design firm in 1955, went through several cycles before seeing that the cause of the bad times was his reaction to the good times. "We didn't realize it, but we weren't managing these investments well," Biach admits. He'd hire an engineer with expertise in a new market, for instance, but fail to add salespeople with experience in that market. "After four or five years, we had this body of expenses we weren't getting anything from."

Biach gained this insight after modeling the company's boom-and-bust profit swings on a computerized business simulator. The software program used a mathematical model incorporating Biach's figures, such as costs and profit margins, to represent the way the company's policies would fare in the real world, and quickly revealed that although reinvesting in the business may have been well-intentioned, it was poorly executed.