Hofmann moves sales and marketing offices downtown

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SYRACUSE — Hofmann Sausage Company both makes hot dogs and sells hot dogs, so it only makes sense that its two major divisions have their own workspace, company officials say. That’s why Hofmann (www.hofmannhotdogs.com) has moved its sales offices to downtown Syracuse in the Onondaga Tower building on East Jefferson Street, says Frank Zaccanelli, CEO. […]

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SYRACUSE — Hofmann Sausage Company both makes hot dogs and sells hot dogs, so it only makes sense that its two major divisions have their own workspace, company officials say.

That’s why Hofmann (www.hofmannhotdogs.com) has moved its sales offices to downtown Syracuse in the Onondaga Tower building on East Jefferson Street, says Frank Zaccanelli, CEO.

More than a move, he says, the change is an expansion — one that will allow the sales division room to grow as sales increase and also free up space in the company’s processing plant at 6196 Eastern Avenue in the town of DeWitt. The company has moved between five and 10 salespeople to the new office, according to Reginald Bailey, chief operating officer at Hofmann Sausage Co.

“We’ve just made a separation really … between the manufacturing side and the sales and marketing side,” Zaccanelli says.

Onondaga Tower is the ideal location, right in the heart of downtown in a central location that’s easy for the sales force to get in and out of, he says. He hopes that it’s the first of several Hofmann sales and marketing offices in cities around the country.

“It’s the next logical step in the growth of Hofmann’s,” he says.

While Onondaga Tower is just the right location for Hofmann, the company is also just the type of tenant CBD Companies is looking for to fill the building, says Michael Durkin, leasing and sales agent with CBD.

Hofmann, which is currently occupying temporary offices on the 11th floor, will soon move to its permanent offices in 3,600 square feet on the 10th floor of the 130,000-square-foot building.

Work to complete the offices will begin in a few weeks and take between 60 and 90 days to wrap before Hofmann can move in, Durkin says.

CBD (www.cbdcos.com) offers Class A office space (which includes services such as security and janitorial) in the building, which is already home to Aspen Athletic Club, CBD’s own offices, and Resort Funding. A restaurant will soon open on the ground floor. All told, CBD has between 80,000 and 90,000 square feet in the building available for lease. In addition, the building has a parking garage with space for 400 vehicles.

National expansion

Zaccanelli’s Dallas–based Zaccanelli Food Group, with Oneida Nation Enterprises as lead investor, purchased Hofmann in May of this year with plans to take the regional hot dog to the national level.

Based in Syracuse, Hofmann Sausage Company is a meat manufacturer and distributor, founded by Frank W. Hofmann in 1879, that offers more than 80 products at a variety of retail locations and online.

So far, the Hofmann expansion plan is right on track, Zaccanelli says. The company kicked off its expansion Memorial Day weekend when 67 Albertsons grocery stores in Texas began carrying Hofmann products. Hofmann products also began showing up on more shelves regionally including Wegmans and Tops stores in Rochester, Buffalo, and in Pennsylvania.

The latest store to carry the brand is Brookshires Food & Pharmacy, another Texas–based chain, which will carry Hofmann products in 161 locations starting in mid-October.

By the end of October, Hofmann will launch another phase of its expansion plan when it opens its first stand-alone Hofmann restaurant — Hofmann’s Hots — in Dallas in late October, Zaccanelli says.

He hopes it will be the first of many Hofmann quick-service restaurants in cities around the country as well as locations such as mall food courts and airports.

In July, Hofmann announced a partnership with competitive eater Takeru Kobayashi as a business partner and brand ambassador for Hofmann. As part of the deal, Kobayashi now has an ownership stake in Zaccanelli Food Group, and Hofmann created a Kobayashi business division to create a Kobi line of hot dogs as part of the Hofmann family of products.

Kobayashi kicked off his stint as a Hofmann ambassador on Aug. 26 at the New York State Fair, where he ate as many bun-less Hofmann hot dogs as he could in 10 minutes. He set a new world record by downing 110 hot dogs.

Other major investors in Zaccanelli’s acquisition of Hofmann Sausage Co. include Syracuse University (SU) men’s basketball head coach Jim Boeheim, former Syracuse Police Chief and SU basketball player Dennis DuVal, and former Dallas Cowboys quarterback Roger Staubach.

Starting Your Own Business? To Achieve Success, Avoid Common Pitfalls

Business Mentors, Subscriber Only

Every year, thousands of people make the decision to start their own businesses. These determined entrepreneurs all set out to be successful, but in time, many learn a hard lesson: It takes more than blood, sweat, and tears to build and run a successful small business. In addition to the entrepreneurial spirit, you need business

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Mistakes are inevitable in the hectic startup-business environment, but there remains little room for big errors. Having started a small business myself several times — one that I still own and operate jointly with two great partners — I’m familiar with the numerous issues entrepreneurs face on any given day. It is important to be aware of these issues — big and small — because if unaddressed, they can quickly cause damage from which it is difficult to recover.

Throughout my career, which spans more than 40 years, I’ve observed the startup of many other small businesses. Some achieve success, but most don’t. Here are four common mistakes that small-business owners make, along with tips on how to avoid them.

Forgetting to do your research

I’ve seen many small businesses go to market with great ideas, products, and services. The problem is similar offerings were already in the market, and there was little to no differentiation from the competitors. Your ideas, strategies, and planning may seem brilliant and bulletproof, but it will be difficult to bring them to fruition without adequate research. Know your market, your competitors, and industry forecasts before launching.

Leaving marketing out of your business plan

Marketing and communications should never be used to create false attributes, but as a way to inform prospects. Many entrepreneurs make the mistake of not adequately funding or planning for marketing and communications efforts.

In the age of social media, some people believe that marketing can be done for free. While using the tools may cost nothing — or next to nothing — the time and resources it takes to strategically use and manage accounts can be consuming, especially if you’re a one- or two-person operation. Marketing and communications timelines should be built into your business plan, with detailed objectives, strategies, tactics, budgets, and execution plans.

Not protecting your content with copyrights and trademarks

When starting a small business, it’s imperative that you also understand U.S. copyright and trademark laws so that you can protect your creations — names, logos, slogans, and manifestos are all trademark-worthy content and important branding components that need this safety net.

When creating your website, include the copyright symbol with content so that visitors know from where it originated. Also, routinely conduct searches for your content online to ensure that other sites are not copying your material without proper attribution. Of course, it is always smart to have an attorney on board from the get-go. Integrating the copyright and trademark processes into your business plan will protect your company and position it as an original entity within the marketplace.

Failing to manage cash flow

To set yourself up for success, there are three external experts every small-business owner should invest in from the very beginning. In addition to a marketing adviser and an attorney, you should absolutely have an accountant. Whether in your personal or professional life — and the line between these worlds will blur as an entrepreneur — cash management is crucial. Understand your financials, and speak openly and consistently with your accountant so that you know the state of your company in financial terms. Make sure that your cash flow is tracked meticulously to avoid any inconsistencies.

While there are many mistakes a small-business owner can make, if you can avoid these four errors, you will be well-positioned to handle other issues that may arise in the future.

Ray Martino is a partner at Rochester–based, Martino Flynn, LLC (www.martinoflynn.com), a full-service advertising, public relations, and digital media agency with clients across upstate New York.

Five Strategy Pitfalls in Strategic Planning

Business Mentors, Subscriber Only

Do you feel as if you are slogging along instead of buzzing? It is business as usual but things are just not clicking? Sales are OK but not great. If this scenario resonates with you, then it is time to tap your strategic reserves. You need to drill deep, though, if you seek to isolate

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You need to drill deep, though, if you seek to isolate the real problems behind your sluggish performance. More often than not, strategy is formulated from a knee-jerk reaction to changes in the environment — low-cost manufacturing in China is eroding your competiveness, or your competition has introduced a new product with the market disruption power of the iPad. Causality should be considered in strategy, but it should never dictate it.

Good strategic planning is developed by understanding why you were vulnerable to these external factors in the first place. And only those with a deep understanding of your internal and external terrain can expose the underlying problems. Yet today, when we develop strategy, we are increasingly relying more on models than local know-how. Most of the pitfalls in strategic planning relate to leaving out the stakeholders — executives, management, staff, customers, and so on — from the planning process.

Overdependence on the models

While the integration of technology into all facets of strategic planning has added tremendous value, it alone is not the solution for dealing with the increased complexity in today’s marketplace. Strategic planners are grappling with more diverse product offerings, increased competition, and more complex supply chains. And, of course, there is a model for that. Monte Carlo, competency modeling, and real options are all useful tools for drilling down into increased complexity.

Moreover, it seems as if there is an enterprise software solution for everything. But the complexity of today’s challenges does not neatly fit into a database silo or algorithm. What you need is better thinking, and that thinking comes from people who are genuinely engaged in the process. Engagement requires a genuine alignment of the values and goals of the organization with those of stakeholders.

The power of corporate culture

Everyone in the business media has been weighing in lately on whether culture has a greater impact than strategy on business results. The consensus is that culture trumps strategy if left unattended. The obvious response, therefore, is to ensure that corporate culture is taken into account in strategy planning. If your strategy involves elements that are counter to culture, it is more likely to be derailed by internal discontents. But if you have a bad strategy, all the employee motivation and health-club memberships in the world are not going to increase your sales.

My advice then is to ensure that the strategy is aligned with your corporate culture. The way to accomplish this is to involve internal stakeholders in the strategy planning process.

Oops, we forgot the leadership

Strategy used to be the domain of the boardroom and the executive office, alongside analysts who would crunch the numbers and report them to the higher-ups who would then decide how to use the data. Today, students start doing SWOT analysis in high school, and after four more years of SWOTs, graduate to strategy teams in corporations. Empowered, they perform business analysis and formulate the strategy for their divisions.

Conducting the analysis closer to the business unit is smart strategy and execution but it can be risky if units operate in isolation. It is the leader’s job to link strategy to overall objectives and streamline planning. Telltale signs that that your pistons are not all firing together are failed products, lost customers or markets, failed bids for new business, and higher employee turnover.

Manager buy-in

The disenfranchised manager is not a new problem to strategy execution. Managers need to understand why they are executing the strategy. One does not have to be a sports fan to know that the manager is the first one fired if the game strategy does not work out. Unlike managers of the Red Sox, Astros, and Indians this season, corporate-manager firings seldom hit the headlines, but these frontline managers understand that they are easy scapegoats, too.

Manager involvement in strategy, however, should never be an issue. The identification of the underlying problems and formulation of solutions should take place at each level of the organization during strategic planning. Every manager should have a written plan for their area of responsibility.

Customer engagement

If you are communicating effectively with your customers, then you are doing the listening. The introduction of new products and price-cutting strategies from your competitors should not come as a surprise. Your customer will already have described the product to you.

If you are not drilling down to your organizational lifeline and getting a pulse of what is happening from key stakeholders, then you are essentially playing the horses. You only have a 50/50 chance of reaching your destination. To improve those odds, you need to conduct strategic planning with those who are intimately familiar with the local geography.

Good strategic planning is never easy, never short term, and never episodic. It should roll from year to year, engage your best thinkers and doers, and be communicated relentlessly throughout the organization.

Thomas Walsh, Ph.D. is president of Grenell Consulting Group, a regional firm specializing in maximizing the performance of organizations and their key contributors. Email Walsh at tcwalshphd@grenell.com

Two conflicting views of the American dream

Opinion, Subscriber Only

The traditional definition of the American dream: America is a land of opportunity to those who are self-reliant and who work hard. Everyone can follow his/her dream to pursue whatever legal avenue brings happiness. It is a land where your station in life is not fixed at birth; rather, each individual can rise based on

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A progressive view of the American dream: The American dream can’t be fulfilled unless it can be assured. To protect it, government must be involved to ensure that everyone gets a “fair share.” Individual effort must be superseded by government oversight to distribute the fruits of labor equitably.

The Heritage Foundation, in a special report issued in September, contrasts the two conflicting dreams succinctly. The traditional view uses the ladder of opportunity as a symbol of progress; the progressive view uses an escalator of results. The traditional view aims to ensure all have the opportunity to rise; the progressive view ensures that all actually rise. The traditional view sees the primary focus on the individual, not on government assistance, with government playing a supporting role; progressives see government in the primary role. The traditional view sees opportunity springing from free markets; the progressive view relies on government spending. As to the greatest threat, the traditional view cites government dependence while progressives blame income inequality.

For progressives, the last point is the real focus. Inequality is the result of a new gilded age, in which those who succeed financially do so at the expense of others. But is the assertion true and does inequality threaten opportunity? The answer to both is no.

The unit used to measure wealth is household income, which shows a growing disparity between the highest and lowest income brackets. The yardstick is misleading. First, it doesn’t account for the explosive growth of pass-through entities created in the last 40 years. These corporate creations add company profit to personal income, which boosts the “income” for tax purposes but, in fact, creates no new wealth. Second, the income is determined before taxes are applied, thus not accounting for the lower net income of the recipient. Third, non-cash transfers to low-income households are not included in any calculations as income. Fourth, the number of households has grown with the breakup of the traditional family, thus lowering household income but not reflecting overall personal income.

I have long argued that household income is a poor unit of measure. A better yardstick is consumption. How are Americans faring compared with the rest of the developed world? Quite well, it appears. Those Americans classified as poor occupy more living space than the international middle class, and 42 percent own their own homes. America’s poor are not undernourished; in fact, we have a national epidemic of obesity. Health-care consumption for the poor is covered through Medicaid, which spends twice per-capita of any other country; 80 percent have air conditioning; all have TV sets and cellphones; and 75 percent own at least one auto with a third of the poor owning two.

Does inequality threaten opportunity? Everyone recognizes the inequality around us. Some are born handsome, smart, and athletic. Some cultures stress education and striving to achieve and their offspring often excel. Our genes can determine our state of health and longevity. Society accepts that superstars in sports, business, and entertainment are compensated for their prowess at levels far above most competitors. Inequality surrounds us, but it is not an obstacle to opportunity for all unless you believe that the economic pie is fixed and one sector must take a share from another.

The focus on inequality masks what really impedes the growth of the traditional American dream. Let me start with mindless government regulation, which strangles growth in the name of protecting society (Does every would-be barber need 1,500 hours of training?). Next is crony capitalism, where big government and big business collude to benefit the politically connected (think Solyndra).

The collapse of the family over the last five decades has trapped millions, especially children, in poverty. Dependence on government welfare has become endemic, sapping individual initiative. With 70 federal programs, six federal departments, and scores of state agencies doling out nearly $1 trillion annually, millions of beneficiaries find it easier and more remunerative to stay on welfare than to find work. We see a similar pattern in federal disability benefits which have increased eight-fold in the last half century while the population has only doubled. Our concept of a safety net has been replaced by that of a hammock.

But individuals classified as poor aren’t the only ones addicted to public largess. American farmers (2009 figures) have an average net worth of $915,019 (159 percent above the national average), and in 2010, the U.S. Department of Agriculture tells us the average farmer enjoyed $84,440 in income. Keep in mind that farmers typically live in areas with a significantly lower cost of living, and the failure rate of farms is one-sixth the rate of other businesses.

In 2010, the average farm income increased by more than $7,000, while the average U.S. household income dropped by $500. And how do we distribute welfare payments to farmers? The bottom 80 percent receive just 20 percent of the payments while those with incomes of $200,000 and net worth in excess of $2 million garner the rest.

The failure of our public education system stymies the growth of our economy. Despite doubling education expenditures (in real dollars) since 1970, only 40 percent of fourth-graders countrywide achieve their grade level in math; under one-third read at grade level. By eighth grade, the number performing math at grade level drops to 34 percent. In math, the U.S. places 25th among the 30 developed nations compared internationally. Also impeding our economic vitality is the escalating cost of higher education, which has now saddled taxpayers with a $1 trillion obligation of indebtedness.

Finally, the uncertainty created by an unresolved economic-policy direction and the indebtedness accumulating at an astronomical rate make planning and investing especially risky. Business people are reluctant to invest in this climate, uncertain of customer demand and of a predictable return on their investments.

Dream still alive

For me, the traditional concept of the American dream is still very much alive. For the past quarter century, I have spent every week interviewing entrepreneurs and executives, listening to stories of how they pursued their personal dreams. Many had no higher-education, some are immigrants, others their first-generation sons and daughters. There is, however, a common thread of hard work, perseverance, and self-reliance that binds all of these stories together. None believed in the Huck Finn notion that work was for suckers, and all knew they were liable for their own bad decisions or could be victims of bad luck. Each took whatever talents he or she had and applied them, overcoming myriad obstacles to reach their dream. Many have been very generous in sharing their expertise with others and in giving back to their communities.

For these Americans, the dream is also alive. These entrepreneurs see justice in the process, not in the outcome. They don’t look for guarantees in life. Their success is earned; it’s not built on envy of others but on emulating those who were successful before them.

It’s time to defend the traditional American dream by explaining it so all can see the promise of its premise. This is what’s at the center of the debate between Republicans and Democrats as we head for the crucial presidential election in November. It’s all about economic freedom.

Norman Poltenson is publisher of The Central New York Business Journal. Contact him at npoltenson@cnybj.com

Gallery One Fourteen marches out new location at Fort Drum

Construction, Design & Real Estate, Regional News, Small Business, Sports, Entertainment & Tourism, Subscriber Only

FORT DRUM — Kathleen Backus Alibrandi didn’t expect the military to recruit her art and framing gallery. But it did. And she responded to the call, opening a new branch of her Syracuse–based Gallery One Fourteen at Fort Drum on Sept. 4. Alibrandi hadn’t planned to open a second location. She operated Gallery One Fourteen

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FORT DRUM — Kathleen Backus Alibrandi didn’t expect the military to recruit her art and framing gallery.

But it did. And she responded to the call, opening a new branch of her Syracuse–based Gallery One Fourteen at Fort Drum on Sept. 4.

Alibrandi hadn’t planned to open a second location. She operated Gallery One Fourteen in 1,200 square feet of space leased from Eileen Heagerty at 114 Helen St. in Syracuse. Then Alibrandi heard from officials at The Army & Air Force Exchange Service — the Exchange — at Fort Drum.

“They said, ‘We’re looking for a custom framer here at the base,’ ” says Alibrandi. “My initial reaction was, ‘Are you kidding me? With the way the economy has been I’m lucky to have one store open with the lights on.’ But I decided to take on the challenge and see where it took me.”

The new gallery at Fort Drum has the chance to do plenty of business because it is close to the military members and civilians who work on the base, Alibrandi says. Fort Drum’s 2011 Economic Impact Statement, released April 16, 2012, showed that it employed 19,978 soldiers and 4,614 civilians.

Alibrandi decided to keep the name Gallery One Fourteen for the Fort Drum location, even though it’s not at that street number. The new gallery’s address at the Exchange at Fort Drum is Building P-10730A on Enduring Freedom Drive. It leases 640 square feet there.

“The Exchange at Fort Drum is their mall,” Alibrandi says. “I’m an independent vendor, so what I do inside of the store is up to me.”

Alibrandi did ask customers what they wanted from the new location. In addition to custom framing, demand is high for engravings on items like trophies and plaques, she says. They are often given as gifts for military members who are arriving at the base or departing from it.

So Alibrandi ordered an engraving machine to allow her to offer engraving onsite. In the mean time, she outsourced engraving to A-1 Trophy of Syracuse.

Framing isn’t currently being done onsite at the Fort Drum location, either. For the time being, Alibrandi completes all framing at Gallery One Fourteen’s Syracuse gallery. She would like to outfit the Fort Drum location to do its own framing, but does not yet have a timeline for doing so.

“As winter approaches, I’d like it to be as independently functional as possible,” she says. “I’m hoping to get it streamlined to where I can be up here one day a week, possibly two. It has been three to four days a week.”

Alibrandi hired a full-time employee to help run the Fort Drum gallery. She also wants to hire a part-time worker for it in the near future. Eventually the location could expand to have two full-time employees and two part-time employees, she says.

That’s a big change for Gallery One Fourteen, which had no employees other than Alibrandi before the Fort Drum gallery opened. Alibrandi would also like to hire an experienced framer in Syracuse to fill a position that could be full time or part time, she says.

The Exchange at Fort Drum found Gallery One Fourteen through an Internet search, according to Beth Faciane, office assistant to its services business manager. It was searching for a new firm to fill space vacated by a “framing and engraving-type business,” she says, declining to discuss the departed business or why it left.

“We really didn’t want the soldiers to have to go without those services,” Faciane says. “We feel very fortunate to have found [Alibrandi]. She does really nice work.”

Alibrandi says she doesn’t know many details about the business Gallery One Fourteen is replacing. She adds that she intends to offer framing and engraving services while also branching out a bit, she says.

“From what I’ve gleaned from talking with people, they didn’t do very much business with artwork,” she says. “They would frame things that would come into the store. I’m a little bit more into the art end of it. I’m hoping eventually to segue into more artwork.”

That would be in line with the Syracuse Gallery One Fourteen, which stocks art, handles frame design, assembles frames, and provides other services like hanging and installation. Alibrandi declined to discuss revenue totals or projections for her business.

Equity Crowdfunding: Issuers Assemble

Business Mentors, Law, Accounting & Taxes, Subscriber Only

More than five months have passed since enactment of the Jumpstart Our Business Startups Act (the JOBS Act), and its much-heralded third article, the Capital Raising Online While Deterring Fraud and Unethical Non-Disclosure Act (the CROWDFUND Act). Only four months remain until the acts’ provisions are scheduled to go into effect, and for a business

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Only four months remain until the acts’ provisions are scheduled to go into effect, and for a business contemplating an equity crowdfund offering, now is the time to decide if such an offering is a viable option. And if so, it’s time to assemble business plans, documents, and an expert team of management advisers, so when the curtain rises on equity crowdfunding, the company will be prepared for the spotlight.

The JOBS Act will allow small businesses, under certain conditions, to publicly offer their equity securities over the Internet without being required to register those securities with the U.S. Securities & Exchange Commission or state securities commissions.

This exemption from the registration requirements of the Securities Act of 1933 and its state counterparts is the first to recognize the power of the Web in raising capital. And, it is the final piece of the crowdfunding landscape that will complement debt-based crowdfunding, donation-based crowdfunding, and reward-based crowdfunding — all of which made waves this past year via online organizations such as Kiva, IndieGoGo, and Kickstarter, respectively. A given company will be permitted to raise up to $1 million in any 12-month period from an unlimited number of investors, each of whom will be subject to an individual investment cap based on yearly income.

At the outset, it cannot be stressed enough what a departure equity crowdfunding will be from a traditional private capital-raising model that essentially requires that an issuer know the investors being solicited. An issuer, under the equity crowdfunding model, won’t be required to know any wealthy investors or even how to find them. So the success of an offering will depend less on who a business knows than on the viability of the company’s product, which will be a huge equalizer for small businesses with no real connections to capital. However, to take advantage of this new model, a prospective issuer must first decide whether it is comfortable with the investment of time, attention, and capital, set forth below, that an equity crowdfund offering will require, and whether that investment is likely to yield substantial benefits.

In order to participate in an equity crowdfund offering, an issuer will be required to submit to prospective investors, via an online “funding portal,” a battery of documents and information, all designed to protect those investors from “fraud and non-disclosure.”

Specifically, each issuer will need to provide:

• its legal status, address, and website;

• names of its directors, officers and 20 percent stockholders, and their shareholdings;

• a description of its business and a business plan; and,

• a target offering amount, price per share, deadline to reach the target amount, and a description of the intended use of offering proceeds.

An issuer must also disclose its ownership and management structure, including:

• a description of the terms of the offered securities and each other class of the issuer’s securities;

• how the issuer’s principal stockholders could negatively affect the purchasers of the new securities;

• how the offered securities are being valued, and methods for how the issuer may value its securities in the future; and,

• the risks associated with minority ownership in the company, including dilution, additional share issuances, a sale of the issuer, or transactions with related parties.

Finally, an issuer must describe its financial condition in varying detail depending on the size of the proposed offering. For offerings totaling less than $100,000 in a 12-month period, an issuer need only provide income-tax returns for its most recently completed fiscal year and financial statements certified by the principal executive officer.

For larger offerings less than $500,000, an issuer must provide financial statements reviewed by an independent public accountant; and for even larger offerings up to $1 million, the issuer must provide audited financial statements.

Aside from the above statutory requirements for an equity crowdfund offering, a company must also consider an offering’s practical aspects to determine if equity crowdfunding is a desirable option. Specifically, issuers will be subject to criminal and civil penalties, under Section 10b-5 of the Security Exchange Act of 1934 and Section and 12(a)(2) of the Securities Act of 1933, for any fraudulent or deceitful act or omission. And, they will be subject to enforcement actions by individual state attorneys general in similar instances.

Issuers will have ongoing disclosure requirements to their shareholders regarding operations and financial condition, and those individual shareholders will retain all statutory corporate rights such as access to company books and records and rights to dissent in certain large corporate transactions. Companies will also, due to the large number of independent shareholders, need to strictly follow corporate formalities such as holding annual shareholder and director meetings and maintaining share and transfer ledgers, actions which many closely-held companies fail to take on a regular basis.

In addition to the time and attention the above requirements will entail, they will obviously also lead to ongoing legal and accounting costs. And, that is also something a business should consider when contemplating an equity crowdfunding capital raise. Further, like all equity capital, crowdfunded capital will be significantly more expensive than traditional debt financing because a company will have to pay its investors a percentage of its profits rather than a predictable interest rate.

Finally, beyond the time, costs, statutory requirements, and practical considerations associated with an equity crowdfund offering, certain types of companies as a rule may not be well suited at all for wide equity investment. These include family-owned businesses, which are reticent to involve outsiders in company ownership; professional-services organizations, which by law are restricted to ownership by certain licensed individuals; publicly traded companies, which are not eligible to participate in a crowdfund offering; and companies that anticipate future investment from venture capitalists, who may be reluctant to invest in a business with a large number of shareholders.

In short, equity crowdfunding is not a decision to be taken lightly. But, balanced against all of the potential risks is the promise of the JOBS Act itself, which by its own preamble aims to “increase American job creation and economic growth by improving access to the public capital markets for emerging growth companies.” In the event a company determines that the potential benefits of equity crowdfunding outweigh its potential risks, a company must take the next steps:

• compile the information above;

• perform all the due diligence required and determine whether any third-party agreements, government permits, statutory requirements, or internal restrictions prohibit the offering;

• research the market risk factors, market share prices, and reasons why the company is a superior offering to all others;

• amass an expert legal and accounting team qualified to advise on the structure, size, and value of the offering;

• round out a management team to demonstrate to potential investors the strength and vision of the company’s leadership; and,

• polish the corporate books, records, taxes, and operating history to a high shine.

T minus four months and counting.

Douglas J. Gorman is a New York and Delaware business attorney specializing in corporate matters, emerging business, business succession, and commercial law. He is a founding member of Crisafulli Gorman, PC, a boutique law firm based in Fayetteville. Contact Gorman at djg@cg-lawyers.com

Survey: Small-business owners uncertain about new 401(k) fee notices

Law, Accounting & Taxes, Small Business, Subscriber Only

New U.S. Department of Labor required 401(k) fee disclosures haven’t given small-business owners a shot of confidence about explaining their retirement-plan offerings, according to a new survey. The rules, which the Department of Labor’s Employee Benefits Security Administration put into effect this summer, require plan administrators to provide participants and beneficiaries with plan-related information like

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New U.S. Department of Labor required 401(k) fee disclosures haven’t given small-business owners a shot of confidence about explaining their retirement-plan offerings, according to a new survey.

The rules, which the Department of Labor’s Employee Benefits Security Administration put into effect this summer, require plan administrators to provide participants and beneficiaries with plan-related information like administrative expenses and individual expenses. But most small-business owners who reviewed mandated fee-disclosure documents from 401(k) providers reported feeling confused, according to findings of a survey released Sept. 12 by a Seattle–based investing firm, ShareBuilder 401k.

A full 83 percent of small-business owners walked away from disclosure documents with questions about what their company should do, the survey found. And 68 percent did not feel fully prepared to answer employee questions about their plans.

“Part of the issue is it’s new,” says Stuart Robertson, president of ShareBuilder 401k, which is a subsidiary of McLean, Va.–based Capital One Financial Corp.’s ING Direct business. “The second is that they may not fully understand their company’s fee-disclosure document. We’ve seen them range from 8 pages to over 30 pages.”

Small businesses — defined in the ShareBuilder 401k survey as having 100 or fewer employees — often don’t have as many resources to dedicate to looking at retirement plans, Robertson points out. Without dedicated human-resources staffers like those found at larger companies, small-business owners are often left trying to examine 401(k) costs themselves, he says.

Yet the average time owners spent reviewing fee-disclosure documents was just 16 minutes, the survey said. Some business owners, 37 percent, indicated they had hired or planned to hire consultants to help them understand their 401(k) options. Another 34 percent had gathered or planned to collect benchmarking data to help them compare alternate retirement plans in which their company could enroll.

“There is no benchmarking data on [a required fee-disclosure document],” Robertson says. “I’m paying X percent. Is that a lot or a little? We want the employer to realize you can go to a cost comparison or talk to your current provider about what options are available to lower fees.”

Fees are normally based on a percentage of a plan’s assets. However, small-business owners don’t know what 401(k) fees are fair, according to the survey.

The average small-business owner who participated in the ShareBuilder 401k survey pegged 4 percent as a fair rate. That’s higher than the rate ShareBuilder 401k recommends, Robertson says. The company tries to keep employee fees at 1 percent or lower.

“While a few percent may not seem like a lot, over a career, it adds up to be hundreds of thousands of dollars in someone’s nest egg,” Robertson says.

Even so, few small-business owners seemed concerned with shopping for lower fees, the survey said. Only 33 percent reported using the new disclosure documents as a jumping-off point for negotiating about their plan with their current 401(k) provider. A mere 26 percent said they used the disclosures as a flashpoint sparking shopping for a new provider.

Nearly all small-business owners, 92 percent, were aware of the new fee-disclosure rules, the survey said. A lower portion, 60 percent, recalled actually receiving the documents, though.

Fees are an important aspect of a 401(k) plan for business owners to review, as are other features, Robertson says.

“They’re going to look at fund performance, they’re going to look at services,” he says. “It’s a good action for doing what’s best for them and their employees.”

The market-research firm Wakefield Research, which has offices in Washington, D.C. and New York City, conducted the national survey for ShareBuilder 401k. It polled 500 small-business owners online between Aug. 17 and Aug. 27. Survey results have a margin of error of plus or minus 4.4 percentage points.

Contact Seltzer at rseltzer@cnybj.com

Rising astronomer launches New Moon Telescopes

Energy, Environment & Sustainability, Manufacturing & Engineering, Small Business, Subscriber Only

WEST MONROE — Celestial inspiration led Ryan Goodson to look into telescopes, and 10 years later he’s viewing them as a chance to run a business in a field he loves. “It started a little over a decade ago,” Goodson says. “I saw a fireball shoot across the sky when I was on my way

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WEST MONROE — Celestial inspiration led Ryan Goodson to look into telescopes, and 10 years later he’s viewing them as a chance to run a business in a field he loves.

“It started a little over a decade ago,” Goodson says. “I saw a fireball shoot across the sky when I was on my way to play golf one morning. I had no idea what it was.”

After some research, Goodson realized the fireball was a meteorite. But that research sparked a curiosity in astronomy, an interest that eventually compelled him to build his own telescope.

He assembled that telescope, which had a five-inch reflector, about six years ago. And he’s been building the instruments ever since, honing the craft to the point where he felt comfortable launching a business around it.

Goodson started New Moon Telescopes along with his wife, Heather, in June. He assembles the telescopes, while she handles the company’s underpinnings like its finances, taxes, and website. The Goodsons run the business from their home at 260 Tanner Drive in West Monroe, in Oswego County.

Ryan Goodson assembles the telescopes in a 1,100-square-foot workshop. It’s an ideal space for putting together the instruments, which can be quite tall, he says. For example, a telescope with a 12-inch reflector stands five-and-a-half feet tall, while one with a 30-inch reflector measures nearly 12 feet when assembled.

“You have to be able to have tall ceilings to test your very, very large telescopes,” Ryan Goodson says. “On our website, the smallest I have is a 12-inch reflector, and we have the capacity to go all the way up to 30 inches.”

New Moon Telescopes focuses on telescopes geared toward amateur astronomers, but the firm also wants to sell to universities and professionals, he says.

Aside from using the company’s website for marketing, Ryan Goodson plans to generate interest in his telescopes at “star parties.” Star parties are gatherings of amateur astronomers that draw people from multiple states.

“For a few days you basically throw a party for amateur astronomy that involves looking at the stars,” Goodson says. “They’ll come and bring telescopes. You have vendors set up.”

Eventually he would like to purchase land in Oswego County to host his own star parties twice a year. He’s not at that point yet, however.

The Goodsons want New Moon Telescopes to generate $18,000 in revenue by the end of this year. They would like to grow that to more than $100,000 next year, which would be their company’s first full year of operation.

New Moon’s telescopes are designed to be portable so that astronomers can move them. They feature a truss assembly that detaches and closes like an accordion — an improvement over standard trusses, which consist of several separate aluminum poles that can be difficult to assemble in the dark, according to Ryan Goodson.

Additionally, New Moon’s telescopes have some unique woodwork, he says. Goodson does not use screws to fasten together his instruments’ mirror boxes and rocker boxes, which he says is a typical construction method for telescope makers.

“We do all box joints,” he says. “The overall result has a mechanical advantage, and it’s prettier.”

New Moon’s telescope work can cost from $2,000 to more than $10,000, Ryan Goodson says. He can put together a “rebuilt” scope with a new enclosure around optics from a customer-supplied, mass-market telescope for about $2,000. But instruments featuring New Moon-supplied optics are more expensive.

Ryan Goodson does not make New Moon’s optics, although he says he has made his own for personal telescopes in the past. Instead, he purchases the optics, usually from Lightholder Optics, a California firm.

“The optic is about 50 percent of the cost on my end,” he says. “Buying that mirror, getting it here, and putting it safely in the telescope is a large part of the process. It’s very complex, and if you know the measurements involved in telescope making, there’s not much tolerance for error. If you have a 32nd or 64th of an inch error in your scope, you’re going to get bad views.”

Ryan Goodson is a board member of the Syracuse Astronomical Society. In addition to his business, he works in manufacturing at M.S. Kennedy Corp. in Clay.

Goodson was previously a manager for Raymour & Flanigan Furniture in Yorkville, and he’s moved around the country managing different furniture stores. He was in Kansas when he saw the meteorite a decade ago.

Binghamton Thrifty Shopper reaches new sales high

Nonprofits, Regional News

SYRACUSE — The Binghamton location of the Rescue Mission’s Thrifty Shopper chain has hit $1 million in sales for the first time in its history.

Smile-Therapy wants to beam emails to colleges, businesses

Small Business, Subscriber Only

CAMILLUS — Have grouchy employees in the morning? A small firm in Camillus wants to help everyone grin so you don’t have to bear it. Smile-Therapy sends out an email at 8 a.m. every morning that’s designed to help people start their days on a positive note. The company started signing up individuals for its

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CAMILLUS — Have grouchy employees in the morning? A small firm in Camillus wants to help everyone grin so you don’t have to bear it.

Smile-Therapy sends out an email at 8 a.m. every morning that’s designed to help people start their days on a positive note. The company started signing up individuals for its service in April 2008 and has now added focuses on businesses and colleges to help it grow its subscription base.

“If you’re not happy where you’re at, absenteeism goes up, turnover is huge,” says Tim Smith, founder and owner of Smile-Therapy. “Customer service suffers, and that rolls into productivity and profitability.”

For businesses, Smith believes his daily emails improve employees’ moods and inspire them to be more productive over time. Each email is built to be read in 30 seconds to a minute so that they do not take up too much time, he says.

Every day’s email follows a different theme. Monday is a giggler, or a joke. Tuesday is a shot of encouragement. Wednesdays and Thursdays bring motivational or inspirational stories. And Friday emails are based on fun — they can contain anything from a brain teaser to a money-saving tip.

Smile-Therapy also sends out an extra email on Saturday. It’s called the “Smooth Jazz Café” email and features a link to a single song.

Smith writes the emails, drawing information and ideas from his own research. For example, books he reads often contain quotes that make it into his emails, he says.

Some companies can’t or don’t want to pay for another employee benefit, Smith says. So, he suggests they pay for Smile-Therapy through their existing tuition-reimbursement training programs. As professional development, he contends his emails are better at reinforcing good working habits than going to a seminar once or twice a year.

“The reason this is so good is the frequency of it,” he says. “A little bit every day. Drip, drip, drip, drip.”

Smith started pitching Smile-Therapy to colleges about two-and-a-half years ago. He’s had some success, signing up workers at companies such as Cam’s Pizzeria and the Times Union in Albany.

Six months ago he decided to start trying to attract college students and employees at colleges. Those efforts, which are still just beginning, evolved out of conversations he had with parents who said their children weren’t getting any positive information from social-media sites like Facebook and Twitter, Smith says.

Smile-Therapy isn’t pursuing college students solely through their parents, however. The company is looking to strike a deal with a college that will have it send its daily email to all freshmen.

“When you go from high school to college, you don’t know anybody,” Smith says. “The pressure’s on. It’s a pretty stressful time. So I can go to a college and say, ‘If I can do anything to make your first-year student experience more positive, less stressful, isn’t that a good thing?’ ”

Smile-Therapy has hired two part-time employees to help Smith reach out to businesses and colleges, bringing its employee total to three, including Smith. It hired the employee focusing on business a year-and-a-half ago and the employee specializing in colleges six months ago.

The company is headquartered in 200 square feet of leased space in suite 3 at 25 Main St. in Camillus. It leases the space from the Camillus–based leasing, management, and development company Olympus, Smith says.

However, Smile-Therapy doesn’t limit its distribution to one geographic area, according to Smith. It has individuals receiving its emails as far away as Australia and Brazil.

Smith declined to share Smile-Therapy’s revenue total, but says he expects to increase revenue by 20 percent to 25 percent in the upcoming year.

The company charges $5 per month per person for its emails.

“We land one big college, it’s going to go nuts,” he says. “We’re in talks with probably 60 companies. We’re going to all the SUNY schools to start off.”

———————————————————————————————————————

Smile-Therapy email from July 31, 2011

Today at Smile-Therapy: Important lesson to learn from the intelligent Socrates

(Again thanks to the worthwhile-to-visit site Fropki.com)

In ancient Greece (469 – 399 B.C.), Socrates was widely lauded for his wisdom.

One day the great philosopher came upon an acquaintance who ran up to him excitedly and said, “Socrates, do you know what I just heard about one of your students?”

“Wait a moment,” Socrates replied. “Before you tell me, I’d like you to pass a little test. It’s called the Triple Filter Test.”

“Triple filter?”

“That’s right,” Socrates continued. “Before you talk to me about my student, let’s take a moment to filter what you’re going to say.

“The first filter is Truth. Have you made absolutely sure that what you are about to tell me is true?”

“No,” the man said. “Actually, I just heard about it and …”

“All right,” said Socrates. “So you don’t really know if it’s true or not.

“Now let’s try the second filter, the filter of Goodness. Is what you are about to tell me about my student something good?”

“No, on the contrary …”

“So,” Socrates continued. “You want to tell me something bad about him, even though you’re not certain it’s true?”

The man shrugged, a little embarrassed.

Socrates continued. “You may still pass the test though, because there is a third filter — the filter of Usefulness.

“Is what you want to tell me about my student going to be useful to me?”

“No, not really …”

“Well,” concluded Socrates. “If what you want to tell me is neither true nor good, nor even useful, why tell it to me at all?”

The man was defeated and ashamed.

Might be one to print off for the kids, the refrigerator, or even the next sales meeting.

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