issue pdf:05122008 - Crain`s Cleveland Business

CCLB 05-12-08 A 13 CCLB
5/7/2008
1:32 PM
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CCLB 05-12-08 A 14 CCLB
14
5/7/2008
2:09 PM
Page 1
CRAIN’S CLEVELAND BUSINESS
WWW.CRAINSCLEVELAND.COM
Date filed: March 24, 2008
Type: Employer’s withholding
Amount: $30,147
TAX LIENS
The Internal Revenue Service filed tax
liens against the following businesses
in the Cuyahoga County Recorder’s
Office. The IRS files a tax lien to
protect the interests of the federal
government. The lien is a public
notice to creditors that the
government has a claim against a
company’s property. Liens reported
here are $5,000 and higher. Dates
listed are the dates the documents
were filed in the Recorder’s Office.
Amount: $51,694
LIENS FILED
Dan Morell & Associates LPA
250 Spectrum Office Building
Independence
ID: 34-1732795
Date filed: March 3, 2008
Type: Employer’s withholding,
unemployment
Amount: $103,124
Kabat & Cull Inc.
2083 E. 21st St., Cleveland
ID: 34-1954877
Date filed: March 17, 2008
Type: Employer’s withholding
Amount: $37,679
Zincon Inc.
888 E. 222nd St., Euclid
ID: 81-0563873
Date filed: March 3, 2008
Type: Employer’s withholding,
unemployment, corporate income
Amount: $28,435
General Johnnie E. Willson
Military Academy
8555 Hough Ave., Cleveland
ID: 51-0456851
Date filed: March 19, 2008
Type: Employer’s withholding, failure
to file complete return
Amount: $35,498
Mayfield Medical
Transportation Inc.
26660 Tungsten Road, Euclid
ID: 34-1927673
Date filed: March 3, 2008
Type: Employer’s withholding
Amount: $28,397
El Rodeo-Mayfield Inc.
6030 Mayfield Road,
Mayfield Heights
ID: 20-0588169
Date filed: March 5, 2008
Type: Employer’s withholding
Amount: $31,329
Zembas Saloon Inc. TA Valley
Tavern of Independence
6125 E. Schaaf Road, Independence
ID: 34-1285640
Date filed: March 24, 2008
Type: Employer’s withholding
Amount: $101,274
Weber & Son Service
& Repair Inc.
20720 Westwood Drive, Strongsville
ID: 34-1578348
Date filed: March 5, 2008
Type: Employer’s withholding
Amount: $30,472
EOE Payroll Services Inc.
P.O. Box 110535, Cleveland
ID: 20-3926584
Date filed: March 17, 2008
Type: Employer’s withholding
Strowder Funeral Chapel Inc.
822 E. 105th St., Cleveland
ID: 34-0894101
MAY 12-18, 2008
Type: Employer’s withholding
Amount: $18,461
Audio Outlaws Inc.
14100 Brookpark Road, Brook Park
ID: 33-1005964
Date filed: March 17, 2008
Type: Unemployment, failure to file
complete return
Amount: $17,436
Wonder Gro Inc.
6642 Metro Industrial Court,
Bedford Heights
ID: 34-1761991
Date filed: March 19, 2008
Type: Employer’s withholding
Amount: $16,779
Wonder Gro Inc.
6642 Metro Industrial Court,
Bedford Heights
ID: 34-1761991
Date filed: March 3, 2008
Type: Employer’s withholding
Amount: $22,064
Jordan-Roberts
Development Corp.
3681 Ludgate Road, Shaker Heights
ID: 74-3092858
Date filed: March 3, 2008
Type: Employer’s withholding,
unemployment
Amount: $16,407
D & M Contracting of Ohio LLC
P.O. Box 46986, Bedford
ID: 03-0407512
Date filed: March 19, 2008
Type: Employer’s withholding
Amount: $20,130
Packaging Machinery Services Inc.
275 E. 131st St., Cleveland
ID: 34-1187804
Date filed: March 24, 2008
Type: Employer’s withholding
Amount: $16,346
Comfort Wear Inc.
2261 Warrensville Center Road,
University Heights
ID: 31-1502585
Date filed: March 3, 2008
AKM Childcare Centers Inc.
4020 Verona Road, South Euclid
ID: 11-3732794
Date filed: March 5, 2008
Type: Employer’s withholding
Amount: $14,870
Your Title Solution Inc.
16600 Sprague Road,
Middleburg Heights
ID: 20-2900379
Date filed: March 17, 2008
Type: Employer’s withholding
Amount: $11,740
IT’S JUST A PEN.
Until you pick it up and sign your name on the
contract that could change your company’s
future. Business transactions can be
complex. But that’s where we come in.
We guide our clients through legal issues
and consult with them on alternative
strategies and solutions to help them
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Rock Financial Inc.
3645 Warrensville Center Road,
Shaker Heights
ID: 72-1567547
Date filed: March 24, 2008
Type: Employer’s withholding
Amount: $11,377
Skutter Inc.
1267 W. Bagley Road, Berea
ID: 34-1628394
Date filed: March 19, 2008
Type: Employer’s withholding
Amount: $10,879
Orthomems LLC
10265 Carnegie Ave., Cleveland
ID: 57-1220227
Date filed: March 13, 2008
Type: Employer’s withholding
Amount: $9,681
Rudmann Inc.
1555 Winchester Road, Cleveland
ID: 34-1708813
Date filed: March 5, 2008
Type: Employer’s withholding
Amount: $9,204
J & R Health Associates Inc.
26612 Center Ridge Road, Westlake
ID: 34-1483083
Date filed: March 24, 2008
Type: Employer’s withholding
Amount: $8,929
Bowtie Hydroseeding Inc.
26949 Chagrin Blvd., Suite 104,
Beachwood
ID: 31-1524314
Date filed: March 19, 2008
Type: Employer’s withholding
Amount: $8,479
Warrensville Marathon Inc.
5012 Warrensville Center Road,
Maple Heights
ID: 74-3082556
Date filed: March 24, 2008
Type: Employer’s withholding
Amount: $8,049
Exclusive Look Ltd.
25550 Chagrin Blvd., Suite 110,
Beachwood
ID: 34-1972833
Date filed: March 13, 2008
Type: Employer’s withholding, failure
to file complete return
Amount: $7,891
Pistol Pete’s Inc.
2158 Campus Road, Beachwood
ID: 34-1353254
Date filed: March 19, 2008
Type: Employer’s withholding
Amount: $7,720
LIENS RELEASED
Montgomery Lynch
& Associates Inc.
2940 Noble Road, Suite 101,
Cleveland Heights
ID: 34-1775337
Date filed: Dec. 3, 2004
Date released: Feb. 1, 2008
Type: Employer’s withholding
Amount: $7,578
Southwest Cleveland Sleep
Center Inc.
17900 Jefferson Park Road, Suite
102, Middleburg Heights
ID: 34-1938990
Date filed: Nov. 5, 2007
Date released: Feb. 19, 2008
Type: Employer’s withholding
Amount: $58,31
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CCLB 05-12-08 A 15 CCLB
5/7/2008
1:30 PM
Page 1
MAY 12-18, 2008
WWW.CRAINSCLEVELAND.COM
CRAIN’S CLEVELAND BUSINESS
15
Global marketers must keep current base close to home
Study suggests firms miss opportunities
in retaining, capitalizing on customers
By KATE MADDOX
BtoB
While business-to-business marketers are increasingly focused
on improving relationships with
customers, they still have a long way
to go in implementing effective,
consistent customer retention practices, according to a study released
last month by the Chief Marketing
Officer Council.
The study found that only onethird of global marketers have strategies in place to win back dormant or
lost customers, and only half have
strategies to further penetrate or
monetize key account relationships.
The study was based on an online
survey of more than 450 global
marketers, conducted in the fourth
quarter of 2007 and the first quarter
of this year.
“Everybody is spending money on
demand-generation programs, but
they are not taking their existing
customer data and leveraging it,”
said Donovan Neale-May, executive
director of the CMO Council.
“Marketers should determine their
most profitable customers and look
at how to improve the customer
experience and how to increase
business with those customers.”
According to the study, only 6.8% of
marketers said they have excellent
knowledge of the customer when it
comes to demographic, behavioral
and psychographic data, while 51.9%
said they have fair to little knowledge
of the customer.
It’s everyone’s job
“One of the problems is a lack
of ownership of the customer relationship across the company,” said
Jim Hintze, senior vice presidentmarketing at Fujitsu, which provides
hardware, software and services for
the telecommunications industry.
“No matter what your function,
you have some relationship to the
customer, whether it is direct or
indirect,” Mr. Hintze said.
To help reduce customer churn,
Fujitsu has given ownership of customer satisfaction to functional heads
across the organization, including
product development, sales, marketing
and customer service.
“Customer relationship management doesn’t usually touch the
entire company,” Mr. Hintze said.
“We haven’t solved it yet, but we
have a game plan to do that.”
One challenge with Fujitsu’s
approach is tracking all the interactions a customer has with the company and including them in an overall
measure of customer satisfaction.
“A customer might call in to an
800 number for warranty support
and get turned off because the call
isn’t handled properly,” Mr. Hintze
said. “People might not see it in total
because it doesn’t roll up into an
overall metric.”
Another challenge is dealing with
the sheer amount of customer data.
“There is so much information out
there that even for a company as
sophisticated as Fujitsu, managing it
intelligently is really, really difficult,”
Mr. Hintze said.
Copy that
Tom Karrat, executive vice president
of sales and marketing at online
printing company Mimeo.com, said
his company is trying to improve its
processes for communicating with
customers once they place their first
order.
“Often the client doesn’t know the
breadth of offerings we have except
through their salesperson or their
willingness to go in and navigate our
web site,” Mr. Karrat said.
Using Mimeo.com, customers can
order documents to be printed,
bound and delivered. To help retain
and upsell clients, the company is
rolling out an automated system that
will send out e-mails or trigger a live
contact based on customer behavior,
such as placing an order, receiving a
bill or asking a question.
“We don’t want to lose the
customer-service feel,” Mr. Karrat
said. “Sometimes our clients can
order products without our knowing
it until we receive the order.”
Mimeo.com has grown at a rate of
about 40% a year since its debut six
years ago. Mr. Karrat said one of the
problems with such high growth is
that “bad stuff can get hidden in the
good numbers.”
“Order volume is not the only
measure of the customer relationship,”
he said.
“We don’t want to lose the customer-service feel.”
– Tom Karrat, executive vice president of sales and marketing, Mimeo.com
The company uses a combination
of standard metrics, such as frequency
of use, frequency of orders and shopping cart dropoff, as well as free-form
questionnaires to measure customer
satisfaction.
Mimeo’s retention rates are
greater than 90%, but the company
still aims to improve performance.
“We’re trying to make sure we see
the good things we’re doing, and
repeat them and catch any problems,” Mr. Karrat said.
When asked what their companies
were doing to improve customer
retention, 65.2% of marketers
surveyed in the CMO Council study
said improving customer communications; 54.8% said enhancing the
customer experience; and 51.8%
said addressing complaints, problems and pain points.
The marketers also said they need
to do a better job of integrating
customer data within their organizations.
■
(Kate Maddox is senior reporter
with BtoB, a sister publication
of Crain’s Cleveland Business.)
CCLB 05-12-08 A 16 CCLB
16
5/7/2008
1:30 PM
Page 1
CRAIN’S CLEVELAND BUSINESS
WWW.CRAINSCLEVELAND.COM
MAY 12-18, 2008
Arnco’s production keeps on rolling
Tire product demand drives manufacturer’s capacity expansion
By MIKE McNULTY
Rubber & Plastics News
RUBBER & PLASTICS NEWS
A worker at Arnco Inc. in Berea moves containers of the liquid fill produced at
the facility, which is expanding its production capacity to meet current and expected demand for its flatproofing and polyurethane offerings.
+#&*
Arnco Inc. is expanding production capacity by about 50% at its
processing plant in Berea to handle
present and anticipated demand for
its polyurethane products that are
designed to prevent flats in pneumatic tires.
It’s the second capacity expansion at the plant since it opened its
doors in 2005.
More machinery — including
new reactors along with some
mothballed mixers Arnco had in
storage at the plant — is being
installed as part of the expansion,
said Joe Negrey, Arnco’s vice president of operations. In addition, the
factory has boosted its bulk storage,
bulk loading and off-loading capabilities, and the company expects to
increase its work force of about 12
by about 20%, Mr. Negrey said.
Arnco’s polyurethane flatproofing
formulations and other products
under the Arnco brand name are
used heavily in steel mills, landfills,
coal mines, scrap yards, factories,
construction sites, airports and
other areas that are hazardous to
8dbbZgX^VaGZVa:hiViZAdVcl^i]
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conventional pneumatic tires.
Mr. Negrey said Arnco will not
physically expand the 112,000square-foot Berea plant because “we
had a lot of room available.” However,
he said there’s a strong possibility
the building, located on 14 acres, will
need to be enlarged down the road
because “we plan to keep growing.”
The expansion will increase
annual capacity, based on singleshift production, of its polyurethane
liquid flatproofing material used in
off-road tires by about 50 million
pounds, according to Larry Carapellotti, Arnco president, CEO and
sole owner. The Berea plant also
produces industrial products and
advanced polymer materials.
The company, headquartered in
South Gate, Calif., is making the
move to meet current and expected
demand for its flatproofing and
polyurethane offerings, Mr. Carapellotti said. It’s also needed to support
what he termed revolutionary new
technology the company expects will
become operational in the second
half of 2008.
“Patents have been applied for,
and field and independent laboratory
testing have been successfully
completed on this technology that
will have a major impact on both tire
dealers and equipment operators,”
Mr. Carapellotti said.
He said he expected current flatproofing technologies, including the
practice of regrinding used fill, to
decrease in the future.
Mr. Carapellotti did not elaborate
further on Arnco’s new innovation,
but a spokesman said it could be on
the market in late summer or early
fall.
“Field and independent
laboratory testing have
been ... completed on this
technology that will have
a major impact on both
tire dealers and
equipment operators.”
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– Larry Carapellotti, president,
CEO and owner, Arnco Inc.
The company’s capacity expansion at the Berea factory reaffirms
Arnco’s commitment to manufacturing in the United States, Mr. Carapellotti said. He noted that products
from the plant are shipped to
customers overseas, a number of
them in China.
Mr. Carapellotti said the investment
also demonstrates Arnco “will do
everything it can to meet the growing
worldwide demand for flatproofing
products that eliminate flats, extend
the life of tires, reduce costly downtime and offer greater safety for the
operator.”
Mr. Carapellotti said Arnco’s
investment in the Berea factory “is
in sharp contrast to the rest of the
chemical industry, which, unfortunately, is moving production out of
the U.S. to China and the Middle
East.” He said investing in production
in the United States, where Arnco
has a large customer base, doesn’t
put the company at a price disadvantage because “this is not a laborintensive business.”
■
(Mike McNulty is a senior reporter
at Rubber & Plastics News, a sister
publication of Crain’s Cleveland
Business.)
CCLB 05-12-08 A 17 CCLB
5/7/2008
2:18 PM
Page 1
MAY 12-18, 2008
CRAIN’S CLEVELAND BUSINESS
WWW.CRAINSCLEVELAND.COM
JOB CHANGES
WYSE: Julie Telesz to account
director; Marie Scalia to account
executive; Laura Fejzoski to account
assistant.
LoPriore to executive director of creative development; Claudia Castelli
to director of creative
operations and marketing.
DISTRIBUTION
NONPROFIT
SERVICE
GARICK: Peter W. Klaich to senior
organics manager.
AKRON ART MUSEUM: Ellen
Rudolph to curator of exhibitions.
EDUCATION
CUYAHOGA VALLEY NATIONAL
PARK ASSOCIATION: Lauren Wentz
to director of the Cuyahoga Valley
Environmental Education Center;
Michael Fiala to executive chef.
CORPORATE UNITED: Gary Como
to vice president of operations; Craig
Lucas to vice president of member
development; Nicole Finefrock to
category marketing and development;
Andrea Morton to director of
contracting and supplier relations.
GOING PLACES
KENT STATE UNIVERSITY: Donald
R. Williams to dean, Honors College.
Evans
Miller
THE UNIVERSITY OF AKRON: Beth
A. Houseman to assistant director of
University Park Alliance.
THE GEORGE GUND FOUNDATION:
John Mitterholzer to senior program
officer.
FINANCE:
FIFTH THIRD BANK, NORTHEASTERN OHIO: Louise J.
Gissendaner to Akron City president.
Arendt
McLaughlin
FIRSTMERIT CORP.: Louis Sala to
vice president, commercial real estate.
WOMANKIND: Bernadette Boguski
to development director.
FINANCIAL SERVICES
REAL ESTATE
BARNES WENDLING VALUATION
SERVICES INC.: Jason Evans to
senior financial analyst.
GRANT THORNTON LLP: Michael
Watson to business advisory services
manager.
Cullers
Grady
HEALTH CARE
Ferguson
Kozsey
THE METROHEALTH SYSTEM:
Joan M. Ackerman to senior
development officer.
HYLANT GROUP: Cindy McDaniel
to senior client service manager;
Jennifer Povtak to client service
specialist; Vicki Sharpe, Tony Gielty
Jr. and Diana Jaworski to senior
service assistants; Pam Santa to
client service manager; Helen
Golubski to executive assistant.
LEGAL
BENESCH: Amanda M. Miller to
associate.
DWORKEN & BERNSTEIN CO.:
Robert D. Dumbrys to associate.
OGLETREE, DEAKINS, NASH,
SMOAK & STEWART P.C.: Michelle
R. Arendt to of counsel.
REMINGER CO. LPA: Rafael P.
McLaughlin to associate.
SIKORA LAW LLC: William J.
Zabkar to attorney.
SQUIRE, SANDERS & DEMPSEY
LLP: Michael A. Cullers to principal.
MANUFACTURING
JOYCE MANUFACTURING CO.:
Laura A. Jedacek to director of
marketing and communications.
PARAN MANAGEMENT CO.:
Joseph Shafran to chairman and
CEO; Stephen Niksa to president
and chief operating officer; Joseph
Del Balso to director of leasing;
Barry Lefko to director of multi-family.
specialist; Mark Parmalee to associate.
TELECOMMUNICATIONS
TELE-COMMUNICATIONS INC.:
William Moore to vice president and
general manager.
AWARDS
INTELLIGENT COMMUNITY FORUM:
Scot Rourke (OneCommunity)
received the Intelligent Community
Visionary of the Year for 2008.
WESTERN RESERVE AREA
AGENCY ON AGING: Ron Bryski
received the 2008 Senior Volunteer
Service Award.
Send information for Going Places to
dhillyer@crain.com or kratliff-null@
crain.com.
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SUMMA HEALTH SYSTEM: Laura
Bomgardner to director of service
excellence.
INSURANCE
THE BEC GROUP INC.: Mike
Kilbane and William Cunningham
to sales associates; Laura Faatuiese
to property manager.
HOME MASTER REALTY INC.:
Michael J. Smith to president and
REO manager; Sharon Marusa to
vice president of operations.
REALTY CORPORATION OF
AMERICA MORTGAGE SERVICES:
Daniel Medley to senior loan officer.
AKRON CHILDREN’S HOSPITAL:
Walter Schwoeble to vice president
of human resources; Michael Trainer
to vice president, finance department.
UNITED CEREBRAL PALSY: Patricia
S. Otter to executive director; Beth
A. Lucas to director of development;
Randall E. Simmons to director of
finance and administration.
PROSOURCE SOLUTIONS:
G. Todd Williams to Heartland
South district manager and partner
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Walker
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DARICE/PAT CATAN’S: Joe
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Petkunas to vice president of technology
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Kay Wilson to executive director of
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MARKETING
ADCOM COMMUNICATIONS INC.:
George Grady to vice president of
finance; John Ferguson to senior art
director; John Kozsey to production
artist.
HITCHCOCK FLEMING &
ASSOCIATES INC.: Mike Campana
to account manager; Amy Petronelli
to retail advertising manager; Amanda
Glozer to media planner/buyer.
OPTIEM LLC: George Nemeth to
search engine marketing specialist; Jee
Sun Pak to web production developer.
PR 20/20: Lyndsey Walker to
consultant.
ROBERT FALLS & CO. PUBLIC
RELATIONS: Julie Brosien and
Joe Mosbrook to vice presidents;
Jordan Giangola to assistant
account executive.
You do everything you can
to protect them, but it’s still not enough
THE SHAMROCK COS.: Christopher
Hunter to director of operations,
fulfillment services group.
WORKPLACE MEDIA: Stephanie
Molnar to CEO.
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CCLB 05-12-08 A 18 CCLB
5/7/2008
1:28 PM
Page 1
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CCLB 05-12-08 A 19 CCLB
5/7/2008
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Page 1
CRAIN’S CLEVELAND BUSINESS
MAY 12-18, 2008
INSIDE
22 TAX TIPS:
LATE-FILING FEE
GROWS STEEPER
FOR SOME.
19
SMALL BUSINESS
PET
PROFITS
S H O R T TA K E S
■ CLIENT SWITCH: JM Green CPA Group
LLC, a full-service accounting firm in Beachwood, recently announced the acquisition of
the accounting clients of Robert J. Fisher &
Associates CPA in Solon. JM Green CPA
Group LLC provides chief financial officer,
controllership, financial and tax planning, auditing
and compliance services to entrepreneurial and
nonprofit clients. Jonathan M. Green,
managing partner of JM Green, said his company
acquired the more than 200 business and
individual clients following a mutual assistance
agreement to run Mr. Fisher’s business during
an illness. After Mr. Fisher died in October
2007, JM Green CPA Group entered into an
agreement with Mr. Fisher’s family to purchase
the accounting clients. JM Green CPA Group
did not acquire the financial planning clients
held by Robert J. Fisher & Associates CPA.
Terms of the acquisition were not disclosed.
No matter how tough the times,
businesses catering to our furry
friends are still seeing steady
increases in spending
By SCOT ALLYN
clbfreelancer@crain.com
R
ecession or not, it appears
most pet owners are still
spending money — and
more of it than ever — on
their nearest and dearest.
This year alone, it is estimated that
Americans will spend $43.4 billion
on their pets, which is up more than
5% from last year, according to the
American Pet Products Manufacturers
Association, a nonprofit trade group
based in Greenwich, Conn.
Indeed, Northeast Ohio
INSIDE: A look
small business owners
at pet ownership in
looking to make a few
the United States.
bones off the pet industry
Page 21
say they have noted
increased sales in recent years.
One of those pet-friendly entrepreneurs is Adam Proctor, whose bright
yellow Adam the Groomer mobilegrooming trucks serve eight counties
in Northeast Ohio.
Mr. Proctor, 42, said he thinks
people always have considered their
pets as members of the family, “but
when I was a kid, there wasn’t an
industry to support their pets.
People want to take better care of
them now.”
Bob Vetere, president of the pet
■ NEW STAR IN TOWN: BrightStar Healthcare, a full-service health care and staffing
agency, has opened a location at 24700 Chagrin
Blvd., Suite 202, in Beachwood. The franchise is
owned by Alan and Mary Soirefman. BrightStar’s expansion into Cleveland is part of a plan
that calls for 400 new franchises and seven
corporate locations by the end of 2010. The
Chicago-based firm provides medical and nonmedical home care to private clients and supplemental health care staff to corporate clients.
RUGGERO FATICA
ABOVE: Heather Parthemore gets acquainted with Seamus, a beagle/dachshund mix,
at Inn the Doghouse, a dog and cat day care, boarding and grooming facility on
Cleveland’s West Side. Brutus, a brindle Great Dane, looks on. BELOW: Sally Balch
works with her 1 ½-year-old Australian terrier, George, during an agility class
taught by Ed Dickson at North Coast Dogs, Inn the Doghouse’s neighbor on Berea
Road.
See PETS Page 21
“I think people no longer view their animals as
pets, they see them as children. ... Their
dogs no longer sleep in dog houses, they
sleep in their bedrooms.”
– Whitney Callahan, owner, Inn the Doghouse
■ TOP HONORS: Ronald Clutter, president
and owner of Nordic Air Inc. of Geneva, was
honored as the Ohio State Small Business
Person of the Year as part of last month’s
National Small Business Week 2008.
Nordic Air designs and manufactures air
conditioning, heating and filtration equipment
for heavy industry, according to the firm’s web
site. According to a U.S. Small Business Administration spokeswoman, winners are selected
from submitted nominations.
SNAPSHOT
FUELING CONCERN
According to a recent survey, small
business economic confidence continues
to slide. Among other findings:
75%
of business owners say rising gas
prices affect profitability; 86% are
affected negatively.
58%
of consumers said small businesses
they patronize charge more when
gas prices rise.
39%
of consumers said they would pay
higher prices from small businesses
using “green” energy practices.
SOURCE: Discover Small Business Watch
MY CAUSE IS TO HAVE AN OUTLET FOR MY PASSION. And to turn a profit.
Your cause is our cause. Which is why we created the COSE Arts Network. Visit cosearts.org or call (216) 592-2355 for events and more information.
Join your cause.
CCLB 05-12-08 A 20 CCLB
5/7/2008
1:42 PM
Page 1
20 CRAIN’S CLEVELAND BUSINESS
WWW.CRAINSCLEVELAND.COM
MAY 12-18, 2008
SMALL BUSINESS
GRANDOPENINGS
VANITYLAB
24945 Detroit Road
Westlake 44145
VanityLab is a 3,500-square-foot
salon, spa and shop that aims to
feature personalized services with a
chic, city edge. Owner Angie Hofelich
launched VanityLab based on
experience as a stylist at salons in
Cleveland and the SoHo neighborhood
of Manhattan, as well as from being
senior regional manager for a major
professional hair product company.
VanityLab offers customized salon
services, professional products and
spa services, including chocolate
pedicures and demi spa options.
There also is a lounge and gallery/
shop that features work by local
artists.
green products, including soy candles,
organic baby clothing, gardening
supplies, wooden toys, personal care
items, a variety of tote bags to
replace plastic and jewelry and paper
goods made out of recycled products.
According to proprietor Mary Evans,
local suppliers will be used whenever
possible to reduce emissions from
transport. The store also will attempt
to heighten awareness around
sustainability with “green tip” signage
throughout the store and a children’s
area with a coloring station and
educational books. Store hours are
9 a.m. to 6 p.m. Tuesday through
Thursday; 9 a.m. to 7 p.m. Friday
and Saturday; noon to 5 p.m. Sunday;
and closed Monday.
216-712-7980
mary@greensmartgifts.com
440-835-4490
GREENSMARTGIFTS
JUST A MOMENT
CANVAS IMAGES
14534 Detroit Ave.
Lakewood 44107
www.greensmartgifts.com
9350 Progress Parkway
Mentor 44060
www.justamomentimages.com
GreenSmartGifts is a new earthfriendly gift shop, offering a range of
Owned and operated by Jackie
Swanson, Just a Moment reproduces
JESSE KRAMER
Mary Evans, owner of GreenSmartGifts in Lakewood, is doing her part to help the sustainability cause. She offers “green
tips” in the store and also will use local suppliers — to reduce transportation emissions — whenever possible.
photos and artwork on canvas, using
the firm’s trademarked border and
MuseumWrap. Prints are available
in a variety of sizes, coated for
protection against ultraviolet rays
and come complete with hanging
hardware. Just a Moment specializes
in special award and recognition gifts
and collages.
440-639-8761
jackie@justamomentimages.com
SAFE IDENTITY INC.
120 W. Aurora Road
Cleveland 44067
www.SafeIDentification.com
Safe IDentity Inc. is a Cleveland-based
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company that works to protect
customers — individuals, families
and businesses — nationwide from
identity theft. The company aims to
create a comprehensive, personalized plan to proactively protect
clients from identity theft. Safe
IDentity also works with identity theft
victims to prevent further
damage to credit. To do this, the
company provides a proprietary
service called ID freeze, which
essentially minimizes damage to
one’s credit by locking the victim’s
credit report. The firm is owned by
M. Petti, G. Petti and C. Guenther.
877-496-6641
info@safeidentification.com
KETTLEBELL STUDIO
16 S. Main St.
Chagrin Falls 44022
The Kettlebell Studio focuses on
strength training using one of the
oldest modalities, the Russian
kettlebell. The kettlebell, a hand-held
gym, develops all-purpose strength,
blending it with flexibility. The kettlebells replace barbells, dumbbells, grip
devices, medicine balls and cardio
equipment. The studio, which caters
to men and women of all ages, also
trains with other non-movement
restrictive equipment such as ropes,
sandbags, bands and free weights.
440-382-1059
flexappealdiane@msn.com
To submit a new business for Grand
Openings, e-mail sections editor
Amy Ann Stoessel at astoessel@crain
.com or call 216-771-5155.
BRIEF
■ SIMILAR BUT DIFFERENT:
Self-employed women tend to be
better educated and have more
managerial experience than wage
and salary earners, according to a
report released recently by the
Office of Advocacy of the U.S.
Small Business Administration.
“Human capital factors such as
education and experience have
long been known to have a positive
correlation with entrepreneurship,”
said Dr. Chad Moutray, chief
economist for the Office of
Advocacy. The report also noted
that, in comparing self-employed
women to other working women,
self-employed women are more
likely to work in non-traditional occupations and are likely to be older.
MY CAUSE IS TO MAKE MY HOME-BASED BUSINESS FEEL LIKE A HOME-BASED CORPORATION.
Your cause is our cause. That’s why we launched the COSE Home Business Network. Visit cosehome.org or call (216) 592-2355 for events and more information.
Join your cause.
CCLB 05-12-08 A 21 CCLB
5/7/2008
3:22 PM
Page 1
MAY 12-18, 2008
CRAIN’S CLEVELAND BUSINESS 21
WWW.CRAINSCLEVELAND.COM
SMALL BUSINESS
Pets: Humanization brings demand for services
continued from PAGE 19
trade association, said Americans
— especially baby boomers — have
tended to increasingly humanize
their pets in the last decade. Young
professionals focusing on building
a career instead of a family also
lavish more attention on their
animal companions.
According to the American Pet
Products Manufacturers Association,
the top three pet-related expenses
in 2007 were food at $16.2 billion;
veterinarian care, $10.1 billion;
and supplies/over-the-counter
medicine, $9.8 billion.
“The people can be poor, but the
animal adds a lot to their lives,”
said Mr. Proctor, who started his
grooming service four years ago
with a portable tub and table in the
back of a GMC sport-utility vehicle.
“It’s easier to live alone if they have
a pet. People want to spend money
on the things that are important to
them.”
Gone to the dogs
At Cleveland-based North Coast
Dogs, pet owners can find dogtraining classes, home delivery of
pet foods and professional portrait
photography for their four-legged
loved ones. Ed Dickson has owned
the company, which currently has
six employees, since 2004.
Mr. Dickson said sales of high-end
pet food have doubled since last
year’s pet food scare, which is
believed to have caused hundreds
of dog and cat deaths in the United
States. Pet food across the United
States had to be recalled in a food
contamination that was linked to
wheat gluten made in China.
“People are willing to spend the
money to be safe,” he said. “We sell
the higher-end products, the
better-quality foods made in the
United States.”
Mr. Dickson also said pet photography at North Coast Dogs gets a
boost at Christmas, increasing from
two or three sessions a month to
three or more a week during the
holiday season.
“Some people want the dog alone,
some with their families,” he said.
“We have shot rabbits and cats as
well. Our most unique job was a ball
python and a pug. I don’t know how
you monitor affection in snakes, but
it was right on the dog.”
Next door to North Coast Dogs at
10237 Berea Road, Inn the
Doghouse offers day care, boarding
and grooming for dogs and cats in
an old warehouse space.
Owner Whitney Callahan started
the company in October 2003. She
said revenue doubled in each of the
company’s first two years, was up
40% to 50% in its third year and is
still growing.
The facility, with seven employees,
now offers 22 kennel runs, where
boarded dogs spend the night.
During the day, the dogs play in a
day care area while Inn the Doghouse
employees supervise and work on
potty training as needed.
“I think people no longer view
INSIDE THE INDUSTRY
The American Pet Products Manufacturers Association estimates that pet
spending will grow to $43.4 billion in
2008, a 5% increase over last year.
A breakdown of pet ownership in the
U.S. (numbers in millions):
Number of U.S. households
that own a pet
Animal
Number
Bird
6.4
Cat
38.4
Dog
44.8
Equine
Freshwater fish
4.3
14.2
Saltwater fish
0.8
Reptile
4.8
Small animal
6.0
SOURCE: AMERICAN PET PRODUCTS MANUFACTURERS
ASSOCIATION’S 2007-2008 PET OWNERS SURVEY
their animals as pets, they see them
as children,” Ms. Callahan said.
“The majority of my customers are
empty nesters or young professionals
without children. Their dogs no
longer sleep in dog houses, they
sleep in their bedrooms.”
Industry’s nine lives
full-time employees and plans to
acquire a third truck by the end of the
year, said Mr. Proctor, whose services
are not limited to dogs and cats.
“I have groomed a donkey,
although not in the truck,” he said.
“We also trim rabbits’ nails and
once gave a bath to a guinea pig. If
it’s got fur, and it’s not a human or
a spider, I’ll try to groom it.”
Burials have increased about 20%
over the last 10 years, Mr. Pavone
said. Animals buried there include
alpacas, horses, sheep, cockatiels,
pigs, cats and dogs.
The memorial park also has
a viewing room where final farewells
can be said.
And in the final acknowledgement
that pets have become the same as
family, some pet owners have
chosen to be buried next to their
beloved companions, according to
Mr. Pavone.
About six people are buried there,
and another six have expressed
interest in joining dogs already
buried there, he said.
■
Final farewells
And when it’s time to say their
final good-byes to the companion
they loved, pet owners in Greater
Cleveland can choose from a
number of pet cemeteries, including
the Paws Awhile Pet Memorial Park
in Richfield.
Owner Joe Pavone said about 3,000
cremations are performed a year, and
500 to 600 animals are buried on the
10-acre cemetery, which has room to
expand to 23 acres. He founded the
memorial park in 1984.
The cemetery, which includes
sections for stand-up monuments
and other areas for flat stones, was
designed by one of the landscape
architects of Arlington National
Cemetery, Mr. Pavone said.
Cremations include a wooden urn
with a brass plate engraved with the
pet’s name, given to the owner in a
velvet bag embroidered with the
words “In Loving Memory.”
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Sheila Blecman, owner of Coventry
Cats in the hip Coventry Road
neighborhood of Cleveland
Heights, said she has seen many
changes in the pet scene in the 20
years since she opened her feline
emporium.
“When I first dove in, there was
virtually no competition anywhere,”
said Ms. Blecman, who expanded in
1995 to include dog products. “The
big box stores didn’t exist then.”
At first, Ms. Blecman focused on
items for the people who loved cats,
rather than the cats themselves.
“When I started, I didn’t know
what would sell,” she said. “Mostly
it was kitschy stuff for humans.
That did well for a while, and then I
brought in more cat beds, scratching
posts and cat toys. The majority of
sales now are products for the pets
themselves. Clothing for dogs is
selling well right now. Most of my
customers want practical things,
jackets that really keep the dog
warm, not just look cute.”
Coventry Cats also offers food
deliveries and can have orders
ready for pickup if customers call
ahead, she said.
While Ms. Blecman has seen the
industry change over the years,
on-the-go groomer Mr. Proctor said
he knew he was on to something
from the start.
“The day my first ad went into a
community paper in Broadview
Heights, I got three calls,” he said.
“After my first year I hired another
groomer in a second truck. We
worked five days a week. Now I
have four groomers working 10
hours a day, seven days a week in
our two trucks.”
The company has a total of eight
MY CAUSE IS TO DEVELOP VERSION 2.0 OF MY BUSINESS.
Your cause is our cause. Which is why we bring you NEOSA: The COSE Technology Network. Visit neosa.org or call (216) 592-2355 for events and more information.
Join your cause.
CCLB 05-12-08 A 22 CCLB
5/7/2008
2:13 PM
Page 1
22 CRAIN’S CLEVELAND BUSINESS
WWW.CRAINSCLEVELAND.COM
MAY 12-18, 2008
SMALL BUSINESS
Partnerships now facing
steeper late-filing penalty
W
hile there’s always been
a consequence for filing
a tax return late or
failing to file it at all, the
penalties just got a lot steeper for
many small businesses.
Packaged into the Mortgage
Forgiveness Debt Relief Act of 2007,
Congress added a provision to
increase the penalties on businesses
structured as partnerships that fail
to file their business tax returns on
time or at all.
The potential for Uncle Sam to
generate some revenue with this
new penalty is significant, given
that limited liability companies
generally are treated as partnerships
for federal income tax purposes
and that LLCs seem to be the
business structure of choice for
small businesses these days.
The new provisions will first be
applied for returns required to be
filed after Dec. 20, 2007, so the new
penalty regime will affect calendar
2007 partnership returns.
The late-filing penalty on a partnership is assessed based on the
number of partners in the business
and the number of months or
partial months that a return is late.
Before the recent increase, the rate
was $50 per partner per month.
If, for example, a small business
with three business partners was
three months late filing a return,
the penalty was $50, times three
partners, times three months, for a
total of $450. There was a cap on
the penalty at five months, so if the
same partnership was eight months
late filing its return, the total penalty
would only be charged for five
months, for a total penalty of $750
($50 x 3 x 5).
The new penalty structure under
Small firms offer
learning experience
PETERDEMARCO
the recent mortgage relief act raises
the per-partner, per-month rate to
$85 and raises the cap on the number
of months to be assessed to 12. On
its face, it doesn’t sound like a significant change, but with the magic of
multiplication, the potential penalties add up quickly.
If the same three-partner business
was eight months late filing under
the new penalty structure, the total
penalty would be $85, times three
partners, times eight months, for a
total penalty of $2,040.
Compared with the $750 penalty
the partnership would have faced
under the old calculation method,
the increase is nearly triple.
Unfortunately, the news is similar
for small businesses organized as S
corporations. Before the law, there
was no specific statutory penalty for S
corporation tax returns that were
filed late or not at all.
The mortgage relief measure now
establishes the $85 per-partner,
per-month penalty on late-filed S
corporation returns as well. S corporations with numerous partners will
be hit even harder for filing late.
The new law makes a provision for
a business that can show it failed to
file on time due to some “reasonable
cause.” That puts the burden on the
business owner and tax adviser to
make a case for why the return is late.
The Internal Revenue Service
typically shows leniency for cases
where there’s a death or serious
illness involved, where there’s some
calamity such as a fire or a natural
disaster, where there’s some inability
to obtain necessary records or
where a taxpayer followed the
counsel of a mistaken tax adviser or
IRS representative.
There’s still plenty of leeway to
By KIMBERLY BONVISSUTO
clbfreelancer@crain.com
TAX TIPS
request an automatic extension
when more time is needed without
any penalty.
Partnership returns typically are
due on April 15, but taxpayers can
request a six-month extension to
Oct. 15 with no undue consequence. For S corporations, the
initial due date for the return is
March 15, and that can be extended
six months to Sept. 15.
Business partners should also be
aware that the late or missed filing of
one individual partner return causes
the entire partnership to be affected.
Partnership income is recognized
and taxed at the individual level, so
a late filing by an individual partner
affects the entire partnership.
The IRS provided some relief,
however, for “small” partnerships, or
those with 10 or fewer partners who
are all natural people, not another
business entity of some kind.
Under its procedures, the IRS
allows small partnerships whose
partners all fully reported their share
of income, deductions and credits on
a timely filed personal income tax
return to qualify for the “reasonable
cause” waiver of the penalty.
Now that the April 15 deadline is
passed and given the new consequences on late filings, it’s probably a
good time for partners and shareholders to check in with one another
to assure the taxes are finished.
■
C
Peter A. DeMarco is vice president
and director of tax services for
Meaden & Moore, a regional
accounting and business consulting
firm headquartered in Cleveland.
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ollege students will be
descending on businesses
of all kinds as finals wrap up
and the promise of job
experience, money or both beckons.
But as a small business owner,
should you take on an intern?
Should you pay them? And should
you suggest the possibility of
future employment?
It depends, said Neil E. Klingshirn, a partner in the Akron law
firm of Fortney & Klingshirn.
A true internship follows a
number of guidelines, according to
Mr. Klingshirn: It is structured so the
student is not paid; the relationship
between the employer and intern is
for training purposes only; there is
no entitlement to a job at the end of
the training period; the intern
should not displace a regular
employee; and the business must
not derive any direct benefits from
using an intern.
“I don’t know many (small businesses) that do it right because it’s
not easy. You’re limited on what
you can do,” Mr. Klingshirn said.
Often the term intern is applied
loosely to temporary student
workers, but according to Mr. Klingshirn, it comes down to whether a
person is paid. If an employer pays,
then the person falls under the Fair
Labor Standards Act and Ohio
minimum wage requirements. If the
employer doesn’t pay, the person is
truly an intern.
“I think with small businesses,
what they really do is they hire
students with an interest in and
some academic knowledge about
their business,” he said. “If they’re
lucky to have that good of a selection, we’re talking summer help.”
Filling the gaps
In most cases, small businesses
are looking for summer help, and
students are looking for something
to put on their résumés.
Christine M. Brown, president
of Hudson-based Marketing
Resources & Results Inc., has used
interns — and paid them — over the
last four years in her five-person
business. She creates job descriptions each year and assigns interns a
list of projects.
“I remember when I first started
in my career, the transition from
college to career can be very hard,”
Ms. Brown said. “What you learn
in the classroom and what you do
in the workplace, there’s a gap. I’ve
felt that internships help to fill that
gap. It’s a way for us to give back
and provide real-world training for
young people.”
Ms. Brown posts internship
openings at her own web site and
at ClevelandIntern.net, a web listing
of Northeast Ohio internship
opportunities run by the Northeast
Ohio Council on Higher Education.
She also contacts Northeast Ohio
colleges and works with professors
to find the right people.
Merrie Frost, director of the
Cooperative Education Program
at Notre Dame College in South
Euclid, said she works with an
average of 100 students annually
searching for jobs and internships.
Ms. Frost said the majority of
Notre Dame students work for
small companies, including
nonprofits. The success or failure
of an internship, she said, is “really
about whether the employer takes
an interest in the student and
spends time with the student to
train or teach them the position.”
A student’s first act
Paul Vincent, president of
Vincent Lighting Systems in Cleveland, has worked with students for
the past 20 years. The company
provides permanent and temporary lighting systems for theaters,
television studios, hotels, restaurants, churches, office buildings
and sports complexes, along with
production services for special
events and theatrical shows.
Mr. Vincent said his 50-person
company’s primary sources for
interns are colleges and universities
with a strong technical theater
program.
He typically hires students on a
part-time basis and pays them an
hourly wage, including overtime or
the production rate, depending on
the project. He said an internship
is a great way to help students
develop their interest in theatrical
lighting and an equally great way
for him to develop an ongoing
work force.
“A lot of these students consider
it a summer job,” Mr. Vincent said.
“The effort is worth it because it’s a
great way to develop talent. It’s
hard to find good people.”
Steve Benders of Shaker Heights
worked an internship with Vincent
Lighting during his junior and
senior years of high school. At the
time, he was weighing his options
about a future career and thought
the experience would be telling.
Now a sophomore at Carnegie
Mellon University, Mr. Benders said
while he valued the skills he learned
and the experience of working on a
crew, he realized he was interested
in a creative technical position. He’s
now working toward a career in the
video gaming industry and is setting
up additional internships.
“It definitely showed me what
things were what, how not to kill
yourself working with more electricity
than anyone should handle, how to
deal with customers who don’t
necessarily understand what they
want, how much work goes into
lighting things,” Mr. Benders said. “I
had no concept it takes hours and
hours to make things look great.” ■
COSE NETWORKS. YOUR CAUSE IS OUR CAUSE.
Join COSE today. And connect with like-minded businesses that face the same challenges. Visit cose.org or call (216) 592-2355.
Join your cause.
CCLB 05-12-08 A 23 CCLB
5/8/2008
1:22 PM
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CRAIN’S CLEVELAND BUSINESS 23
WWW.CRAINSCLEVELAND.COM
SMALL BUSINESS
Solon firm aims for an ace with hole-in-one device
By CHUCK SODER
csoder@crain.com
D
an Quigg describes
VeriShot with three words:
Excitement, revenue and
promotion.
The Solon company, formerly
called Charitee Golf, aims to bring
those three things to golf courses
nationwide in 2009, when it plans
to begin a national rollout for its
hole-in-one monitoring technology,
said Mr. Quigg, VeriShot CEO.
The system, which uses video
cameras to monitor hole-in-one
attempts and other contests for
prizes, helps courses make golf more
fun, bring in extra money and
promote themselves, Mr. Quigg said.
“We’re excitement plus revenue
plus promotion,” he said. “The
acronym could be ERP.”
Quigg
VeriShot was founded by Mike
Burkons, who came up with the
idea in 2003 while working as a
cashier at the Big Met Golf Course
in Fairview Park.
Mr. Burkons, then a 27-year-old
student at Cleveland-Marshall
College of Law, noticed that the
course only held hole-in-one contests during large outings because
someone had to watch them.
So, after winning a Council of
Smaller Enterprises business plan
competition and raising thousands
of dollars, he developed a pilot of
the system and installed it at
Manakiki Golf Course in Willoughby
Hills. He later put systems at
Briarwood Golf Club in Broadview
Heights and Little Mountain.
“They believed in the concept,
and they gave us a shot,” said Mr.
Burkons, who now sits on VeriShot’s
board. The company has since taken
down pilot systems at Manakiki and
Briarwood.
The company has raised about
$1.9 million from Cleveland venture
financing organizations such as the
North Coast Angel Fund and
JumpStart Inc. as well as several individual investors.
■
Hiltebrant
Though the national rollout won’t
begin until next year, VeriShot, the
name by which Nine Iron Innovations Inc. does business, aims to have
its system on 50 courses by the end of
2008.
The system is on 13 courses now,
including one in Ohio at Little Mountain Country Club in Concord, which
is currently being upgraded. The rest
are in warmer climates, where golf
courses are open for more of the year.
The 2008 expansion should allow
the company to learn more about its
technology and how golf courses use
it.
“We’re not trying to be everywhere
at this point,” Mr. Quigg said.
At courses that use the newest
version of the system, cashiers in
the pro shop ask customers if
they’d like to pay $5 to take the
hole-in-one contest. Those who
take it receive a ticket with a code
they type into a kiosk near the hole.
Cameras then record the golfers’
shots. Players who get a hole-in-one
receive $10,000 or, at some courses,
the option to lease a Hummer or another car for a specified period of time.
The courses keep a portion of the
$5, and VeriShot pays for the prizes.
“It has to be no overhead to the
golf course,” said Mr. Quigg, who
declined to release revenue figures
for the company.
The system also can be used to
monitor closest-to-the-pin contests
and other shootouts. In addition,
some courses are printing discount
offers on the tickets players receive
when they take the challenge, said
Steve Hiltebrant, VeriShot’s director
of sales and golf aficionado.
“It’s so broad, we don’t even
know the capabilities of our tool
yet,” said Mr. Hiltebrant, one of the
company’s six employees.
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CCLB 05-12-08 A 24 CCLB
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24 CRAIN’S CLEVELAND BUSINESS
WWW.CRAINSCLEVELAND.COM
MAY 12-18, 2008
SMALL BUSINESS
CURATOLO SIDOTI
A LEGAL PROFESSIONAL ASSOCIATION
Patent, Trademark & Copyright Practice
Procurement, Counseling, Opinions, Dispute Resolution
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24500 Center Ridge Road, Suite 280
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Telephone: 440.808.0011
Facsimile: 440.808.0657
PATENTANDTM.COM
During real estate
slump, firms relying
on past experience
Name recognition, adapting work force to current
trends help small companies survive downturns
By DIANE DI PIERO
clbfreelancer@crain.com
T
oyster perpetual
submariner
OFFICIAL ROLEX JEWELER
ROLEX
OYSTER PERPETUAL AND SUBMARINER ARE TRADEMARKS.
here’s no question the
housing and building
markets are going through
a tough time. Typically, the
focus is on large companies in
these industries and the struggles
they face, but small businesses also
are feeling the pinch as jobs become
scarcer and the competition
becomes fiercer.
Several small businesses within
Northeast Ohio’s real estate sector
have found their own ways to rise
above the industry’s troubled
times. And some professionals
who have extensive experience in
the real estate industry say the
slump is nothing they haven’t seen
before.
“In the 1980s, it was the savings
and loan situation,” said Maureen
Dockrill, a saleswoman with True
Title Agency Inc. in Elyria and a
former real estate agent. “I don’t
think we’ve had such a shift since
then, but there’s always some shift
happening of one kind or another.”
Anita Campbell, CEO of Small
Business Trends LLC, a media and
information company in Medina,
said it’s imperative during a
“Recessions and economic
slowdowns are always
temporary conditions. Your
goal needs to be to make it
through the slowdown and
not run out of cash before
things pick up again.”
– Anita Campbell
CEO, Small Business Trends LLC
downturn that a business watch its
cash flow.
“Recessions and economic
slowdowns are always temporary
conditions,” she said. “Your goal
needs to be to make it through the
slowdown and not run out of cash
before things pick up again.”
At True Title, the company has
been facing this current slowdown
head-on with distinct shifts in how
it does business.
Changes have included making
all members of the nine-employee
team a salesperson of sorts, even if
that is not their major focus with
the company. Employees also are
rewarded for bringing in new business with incentives such as gas
cards.
“We saw this coming,” Ms.
Dockrill said, “and we made changes
prior to the eye of the storm.”
A strong reputation helps
Thomas Assad, co-owner of
Assad & Crea Realty Group in
Parma Heights, doesn’t deny this
is a slow time for the real estate
industry, but he noted that people
continue to buy and sell houses
even in down times, which allows
many real estate firms to continue
doing what they do.
“People are still getting married.
Families, unfortunately, still lose
family members,” he said. Many of
these people will want to buy a
house, and they will look for an
agent and an agency they can trust,
he added.
Assad & Crea’s business is
holding steady, according to Mr.
Crea, who attributes much of that
to the company’s 24-year reputation
in the southwest suburbs.
“We live in this area, and we take
care of people in this area,” Assad
said about himself, co-owner
Anthony Crea and the firm’s 43
agents.
“When a family member can’t
handle their house anymore, Assad
& Crea is a familiar name to call,”
Assad said.
Ms. Dockrill agrees that a solid
reputation in the community and
the industry is beneficial. “We’re
big on relationship building,” she
said. “It’s important for people to
look at me not just as a title person
but someone with knowledge and
background.”
True Title strengthens its bonds
by offering services that may not
bring them immediate business.
Teaching continuing education
to real estate agents and mentoring
real estate professionals in tough
times are ways to show a commitment to the industry, Ms. Dockrill
noted. “It may not bring us business now, but it will help us reap
the benefits down the road,” she
added.
Establishing a comfort level
within an agency also is important,
said Mr. Assad. This keeps morale
high even during a down market
and encourages agents to continue
to work toward their personal best.
“The flavor we have created is
stability,” he said. “Agents usually
don’t leave. They know they’re
stable here.”
Find your niche
Young companies don’t have the
advantage of a pre-existing reputation in the community. Just ask
Stephen Coleman and his wife,
Pamela, both retired members of
the military who moved to the
Cleveland area two years ago to be
closer to her family and to start
Northstar Contracting.
The two share an impressive
résumé. Stephen spent 24 years in
project management roles with
Acquisition, Technology and Logistics and the Defense Intelligence
Agency during his service in the
Navy. Pamela is a veteran of the Air
Force, where she held administrative, financial and government
contracting positions for 20 years.
The Colemans realized that,
despite their extensive professional
backgrounds, they would need to
build relationships and secure a
solid reputation in the community.
Located in Westlake, Northstar is
working to establish itself as a
minority-owned business that
prides itself on hard work and
reliability.
“Being in the military, we know
that communication is very important,” Mr. Coleman said. “We try to
keep everyone involved in every
aspect of the company. I think
these ways will take us a long way
with customers and vendors.”
Because of Mr. Coleman’s
service-disabled status with the
military, Northstar can benefit from
set-aside contracts available
through the U.S. Department of
Defense. “This helps get our name
out to other areas,” he said.
As a small business, Northstar
can’t and doesn’t try to compete
with big contracting companies,
Mr. Coleman said.
These days, the competition can
be tough within the small business
community as well, which is why
the Colemans developed a niche for
Northstar.
“In this area, we find the jobs that
aren’t very popular and would not
be as competitive, and we bid on
those,” he said.
At the same time, Northstar
is bidding on projects outside
Northeast Ohio and even the state.
The company is currently under
contract for a project in Port Clinton,
and is looking into opportunities in
Indiana. Northstar also recently
added a roofing division, which has
helped the company attract new
business.
And Small Business Trends’ Ms.
Campbell said there’s no time like
the present to reach out to potential
new customers.
“During lean times, the smart
businesses do not pull back on
marketing,” she said. “They market
even more aggressively.”
■
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CRAIN’S CLEVELAND BUSINESS 25
SMALL BUSINESS
SBA loan program can be good deal for borrowers, lenders
R
ecent changes in the SBA
504 loan program have
created important
enhancements for both
lenders and their clients.
This fixed-asset financing
program is a breath of fresh air to
help make some deals work in a
tight credit market. The program
can be accessed through a certified
development company, or CDC,
which is a nonprofit company
certified and regulated by the Small
Business Administration.
The program is designed to help
lenders assist clients in financing
the purchase of land and the construction of owner-occupied buildings, or for improvements and
renovations to existing buildings.
The program also is geared to
finance the acquisition and installation of machinery and equipment
with a minimum 10-year life cycle.
The program — financed with
generally below-market, long-term,
fixed-rate funds — offers a lower
down payment of 10% for established
businesses, which enables the
firm to have more cash flow up front.
John Kropf, executive director of
Growth Capital Corp., Northeast
Ohio’s most active certified development company, refers to the 504
loan program as “mission lending.”
There are times when a bank wants
to do a deal, but only if the right
partner can share the risk. The
CDC’s role is to take on an acceptable risk when a bank is uncomfortable taking on too much alone.
Some details of the program are:
■ Funding structure: Funding
through this program typically is
divided among sources: 50% from
the lender through a conventional
real estate loan; 40% from the 504
loan financing program through the
issuance of debentures, which are
guaranteed by the SBA, pooled
nationally and sold monthly; and
10% from the borrower.
This program helps a lender
achieve a 50% loan-to-value ratio and
the bank has a reliable financial
partner to help share risk in the deal
that they could not cover otherwise.
■ Project size: The minimum
project size is $125,000 with no
upper limit.
■ Maximum loan amount: In a
standard introduced this past year,
if the project is for manufacturing
in North American Industry Classification System sectors 31, 32 and
33, the maximum 504 program loan
is $4 million.
If not in these sectors, the 504
financing is limited to 40% of total
eligible project costs up to $1.5
million. Under certain circumstances, the 504 loan can go up to
$2 million when the borrower is a
veteran or meets specific economic
development, export expansion,
minority ownership or other federal
requirements.
■ Soft costs: A variety of costs associated with the project are eligible
for financing, including architect and
engineering fees, appraisals, environmental reports, title insurance and
interim interest. Costs that go back
nine months prior to submission to
the SBA generally can be included.
■ Refinancing: Refinancing of debt
is not eligible for 504 financing;
however, the lender can consolidate
an existing mortgage on a real estate
project, when there is new construction or remodeling of the building.
In this case, the existing debt is part
of the lender’s loan, but it is not
technically part of the 504 project.
■ Equity requirements: Established
businesses are required to have 10%
equity. Businesses with less than two
years of operations or that are using
the financing for the purchase or
construction of a special-use facility
are required to have 15% equity and
504 program financing would be
reduced to 35%. Equity in the building
can be counted in the equation. To
determine current market value, a
real estate appraisal, usually completed by the lender, will be used.
■ Personal guarantees: Owners
MARSHAPOWERS
SMALL BUSINESS
FINANCE
with 20% or more of the business,
the operating company, real estate
holding company or other direct
entity will be required to guarantee
the 504 loan portion.
■ Job creation and retention
requirements: No longer required.
■ Terms and collateral: The 504
portion of financing is funded
through SBA-guaranteed debenture sold for terms of either 10 or
20 years. A lender must provide a
minimum 10-year maturity when
there is a 20-year 504 loan. The
lender can offer an amortization
up to 30 years with interest rates
adjusted periodically.
■ Interest rates and fees: The
504 program portion is a fully
amortized, fixed-rate loan. The
lender can determine rate and fees
on its portion of financing.
The 504 program satisfies
Community Reinvestment Act
compliance and involvements in
community lending and development. There is no fee or interest
rate restriction on the lender’s
portion. Because of the 504
program loan structure and low
loan to value, these loans can be
sold in the secondary market. Call
Growth Capital Corp. for more info
at 216-592-2343.
■
Marsha Powers is president and CEO
of Powers Financial Group Inc.
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