Drill Team

Tips and trends for growing your business

Magazine Contributor

August 1, 1996 10 min read

This story appears in the August 1996 issue of Entrepreneur. Subscribe »

Dental insurance is a popular employee benefit. If you're considering offering it, the American Dental Association (ADA) reminds you that dental benefit plans are often designed differently than medical plans. The most common include:

Direct reimbursement. This is a self-funded, freedom-of-choice plan, which reimburses claims at a fixed percentage of the total cost.

Usual, customary and reasonable (UCR). Also a freedom-of-choice plan, UCR programs pay the benefit as either a set percentage of the dentist's regular fee or the amount determined to be "customary" or "reasonable."

Table of allowance. This type of program specifies a maximum dollar benefit for each covered procedure, regardless of the fee charged.

Preferred provider organization. Participating dentists agree to discount their fees as an incentive for patients to select their practices.

Capitation. These programs pay contracted dentists a fixed amount per enrolled family or patient.

For more information on choosing a dental plan, contact the ADA's Council on Dental Benefit Programs, Purchaser Information Service, 211 E. Chicago Ave., Chicago, IL 60611, or call them at (312) 440-2746.

Second Time Around

Buying a used telephone system can shave 30 percent to 50 percent off the price of a new system, but the process is not without pitfalls. Terry Chandler of telephone equipment company STE Communications in Casselberry, Florida, suggests keeping these points in mind when buying a pre-owned system (which includes phones and software):

Your needs. Do you need basic telephone service or state-of-the-art technology? How will your needs change? "Be sure the system can grow with your company," says Chandler.

The age of the system. Optimally, Chandler says, buy a system that is no more than 5 to 7 years old.

Brand name. Choose a system manufactured by a company you recognize or can at least check out.

Warranty. It's reasonable to expect a one-year warranty on a used system.

Installation and training. Be sure these are included in the total price.

Trade-in value. Says Chandler, "You may be able to negotiate a commitment for a certain trade-in amount if you agree to buy your next system from them."

Payment Due

Having a problem collecting a bill from another business? Your Better Business Bureau (BBB) may be able to help.

Houston's Better Business Bureau is one of several that assist with business-to-business disputes concerning payment accounts as part of its dispute resolution service. Dan Parsons, vice president of government and public affairs for Houston's BBB, stresses that the bureau is not operating as a collection agency, and there is no fee beyond standard membership dues for the service.

When the BBB steps in, Parsons says, there are three possible outcomes. "One, the account will be paid," Parsons says. "Two, we can serve as a forum for arbitration outside the legal system if there is a valid dispute over the bill or the product or services provided. Three, if the company refuses to pay or arbitrate, we log an unresolved business-to-business complaint in our files, and that information is available to anyone who calls for three years." In the last case, the creditor must then pursue other collection avenues.

A call from the BBB is a powerful motivator for most companies to resolve a pending complaint. And if the debtor belongs to the BBB and refuses to comply with the bureau's request for resolution, its membership could be terminated.

To find out if a similar service is available in your area, call the membership services department of your local BBB.

Going Places

If you feel like you've captured as much of the local market as you can, it may be time to move on. But before you leap into an out-of-state market, have a thorough plan in place.

"We don't go into a market unless we're committed to dominate that market," says Michael Glauser, president and CEO of Golden Swirl Management Co., a Salt Lake City company that operates more than 80 frozen yogurt retail shops in the Western United States and has a thriving wholesale division as well.

Glauser saw similar companies taking a shotgun approach to nationwide expansion and decided on a more focused method. To see the wisdom of his decision, just look at the numbers: The last 50 Golden Swirl stores were funded by operating capital and required no debt or equity financing.

"Our objective is to go into cities of 1 million to 2 million people, build a region of stores as quickly as we can, and not jump around," Glauser explains. By putting a large number of units in a particular area quickly, Golden Swirl is able to capitalize on economies of scale in distribution, management and marketing.

Before launching an expansion plan, Glauser advises, take a look within. "Seriously look at your reason for expansion," he says. "You typically have to grow to satisfy your employees, to offer them career opportunities, to have cash for research and development and those kinds of things." But, he cautions, you may not see a significant increase in your net earnings-in fact, during a strong push for expansion, your personal income may even decrease. "So know what your objective is, and be sure expansion is the way to make that happen."

Once you've made the decision, choose your market carefully. Consider distribution issues-how you will get raw materials and products to your new location, and how the cost of transportation will affect your service and pricing levels. Don't skimp on market research; you have to know the market you're going into as well as the one you're already in.

Consider who will be in charge of the new site. "Those who run that operation for you in the new area have to be as committed, hard-working and enthusiastic as you are," Glauser says. "They have to duplicate what you're doing in your present market. That means either you're in the new location a lot, or you bring in a partner, or you offer sufficient incentives for someone to behave like an owner in that new market. If you hire without creating that feeling of ownership, your operations will deteriorate dramatically as you move out of your state."

It's Party Time

Even in these days of downsizing, companies are still celebrating with annual holiday parties or summer picnics. Combined with the proper planning, the right perspective can make these gatherings more than just a good time.

"Seeing an annual event as just a party is shortsighted," says Clare L. Sullivan, owner of Clare Sullivan & Associates Inc., a corporate event production company in Houston. "There's a bigger picture involved. Events must be seen as part of a means to an end-the company's bottom line." This applies whether the event is a full family event that includes spouses and children or is restricted to employees.

Well-planned, coordinated events that are promoted in advance and include games and contests can boost employees' morale, improve teamwork, enhance interdepartmental cooperation and generally establish better working relationships throughout the company. "Employees who feel good about themselves and their employer are less likely to contribute to the millions of dollars lost every year to absenteeism, sick leave and turnover," Sullivan says.

The key to a successful event is thorough organization, which is why you should consider hiring a professional event planner-even if your company has a small staff or limited budget.

Keep in mind one important caveat: Don't burden your employees with planning. "This is the '90s," Sullivan notes. "We're outsourcing everything to people with the appropriate expertise."

Hire Power

Then you need to hire someone, your first thought may be to run a classified ad. Think again: That's one of the least effective ways to find top-notch employees.

"The percentage of people you reach by running a classified ad is very small," says Donna Cornell, founder of The Cornell Group Consulting, a national recruiting firm based in Newburgh, New York.

Cornell says classified ads play a role, but they should be supplemented with other techniques, such as:

Employee referrals. Let employees know you're looking and offer a reward-typically cash or a gift certificate-if they recommend someone you hire. If you institute an employee referral program, be sure everyone understands their own jobs are not at risk if they participate.

Networking. Take advantage of your professional associations, civic organizations, church, neighbors and other connections. Let all your business and personal associates know you have a job opening.

Technology. Cornell says an increasing number of people are posting resumes, and employers are listing job openings on the Internet.

Trade and vocational schools, colleges and universities. Most educational organizations have placement services; post your opening with them. Keep in mind that many people are going back to school to train for midlife career changes. "Someone coming out of a trade school may have had years of experience doing something else," says Cornell. "This means they have business maturity and savvy, and now they have added a new set of skills."

Employment agencies. Consider working with private and government employment agencies; they can assist with pre-employment screening.

Beyond these techniques, Cornell advises always being on the lookout for good people-even when you don't have an opening. "We maintain a 'potential employees' file," Cornell says. "Whenever we hear of or meet someone we think might be an asset to our company-whether they are looking for a new job at the time or not-we put their name and some information about them in a file. We tell them we're 'interviewing for the future.' "

Finally, Cornell advises, be sure to let everyone you interview know the status of their application. "It's the courteous thing to do," she says, "and it keeps the door open."

Jacquelyn Lynn is a business writer in Winter Park, Florida.

Going To Pieces

Once considered the domain of defense contractors, corporations with valuable trade secrets and government agencies, document shredding has become increasingly common in companies of all sizes.

"Information is just as valuable to a small company as it is to a large one," says Todd Grier, who handles document destruction for Waste Management in Denver. "Companies don't want their trade secrets and other confidential information to fall into the wrong hands." Shredding documents guarantees they won't be intercepted and the information used for competitive or even criminal activities.

Grier says documents you should consider shredding include confidential company correspondence, payroll records, checks, credit card receipts and personnel information. "Audit your waste stream," Grier advises. "Walk around the office, and pull a few sheets of paper out of a trash can and ask yourself, 'Would it be better if this was shredded rather than just thrown away?' "

Some shredding companies will remove the documents from your location and take them to a secure facility for destruction; others have mobile units. Once shredded, the fibers are usually recycled. Shredding services are typically listed in the telephone directory under "Document Shredding."

As for buying your own equipment, Grier doesn't think that's a great idea. He says shredders are notorious for experiencing mechanical difficulties, there are safety factors to consider, and you probably don't want the mail clerk reading documents as they are being fed into the shredder.