Honoring Trenton’s Small Businesses
Grabbing the Brass Ring of Your Dreams
What’s Ahead for NJ’s Uncertain Economy?
Coping with Sky-High Insurance Premiums
Corrections or additions?
This article by Kathleen McGinn Spring was prepared for the September 11, 2002 edition of U.S. 1 Newspaper. All rights reserved.
Consulting: Dream Job or Nightmare?
As surely as spring follows winter, new business start-ups
follow every spate of corporate downsizings. In this particular downturn,
managers have been especially hard hit. Out on the street, often with
a buyout in their pockets, many consider launching a consulting practice.
Be careful, warns John Tracy, who started his consulting practice,
Tracy-Hayden Associates of South Orange, in 1972. Consulting has never
been easy, but lately it has gotten a lot harder. For one thing, business
has speeded up — tremendously. “There’s been a change in marketing
strategy,” he gives as an example. “It used to be you had
two years, now it’s more like three weeks.”
To make matters worse, the managers with whom consultants have to
work have gotten crankier. “They’re under pressure to perform,”
Tracy says of this beleaguered bunch. “There is much less time
available to executives, and they have fewer internal resources.”
In addition, he is finding, managers tend to be moved around more,
and with less experience in their current positions, are often less
confident than they used to be.
Other changes include a tightening up of procedures. “Ethics was
less of a question,” he says. “And you could form relationships
much more easily with clients when they were suffering fewer stresses.”
Given these new realities it is a fair bet that a number of corporate
managers dream of joining their laid-off ex-colleagues in going out
on their own as consultants. Tracy provides insight on the independent
consulting profession when he speaks on “Management Consulting:
Dream Job or Your Worst Nightmare” on Saturday, September 14,
at 8:30 a.m. at a meeting of the Institute of Management Consultants
at the Woodbridge Hilton. Cost: $149. Call 609-325-0095.
Tracy, a graduate of the University of Maryland (Class of 1960), where
he studied industrial engineering, holds a graduate degree from Stevens
Institute. He worked for Western Electric and then for J.C. Penney,
where he worked in the then-infant field of supply chain planning
and logistics. After a decade or so at J.C. Penney he was at a crossroads.
He was getting more and more calls from headhunters, but was uncertain
about continuing in corporate America.
“I took a look at the corporate world, and decided I didn’t like
it,” he says. He chafed at what he saw as restrictions that would
keep him from doing what he wanted to do and earning what he wanted
to earn. So he set out to build a practice specializing in consulting
on supply chain, logistics, and operations issues.
Anyone thinking of following his path, he says, should be very sure
of the answers to two questions: What do I know, or what can I do,
that is so valuable or unique? and Who do I know who wants what I
know?
He says that personality traits — perhaps boldness or an outgoing
nature — are not nearly as reliable a gauge of fitness to be a
consultant.
“I’m constantly surprised,” says Tracy, “by people who
do not appear aggressive who succeed.” Yes, he admits, being able
to sell yourself and your services is vital in consulting, but he
points out that there is more than one way to sell. Consultants who
write well, for example, may build a reputation that will have clients
seeking them out.
Those who have good answers for the two vital questions, and are prepared
to sell themselves one way or another, still need to face some of
the realities of life as an independent consultant. According to Tracy
these realities include:
You are everything. If you need letterhead, you designit. If your software goes buggy, you fix it. As an independent consultantyou need to be an authority on your field, but you also need to bea marketer, a clerk, a secretary, a computer repairman, and more —much more. “Who goes and gets the mail?” Tracy asks. “Thepost office may not deliver business mail to a home. There are a thousandlittle details like that.” Of course, Tracy allows, as a consultingpractice grows, it is often possible to hire people to sweep up andrun errands.You need help. Yes, the consultant with a new practicewill most likely have to change his own light bulbs, but he needsto know his limitations. “Get legal, tax, insurance, and accountingsupport,” Tracy urges. There is no longer an employer to arrangeautomatic withdrawals from your (now non-existent) paycheck. The rulesgoverning a small business are complex, and you will need help instaying on the right side of the law.You must get out there. It is easy to focus on gettingclients’ work done as fast and as well as possible, but doing so willnot ensure success. A consultant needs to network, to market, to keephis name in circulation. Make sure that drumming up the next job —whether by attending chamber of commerce meetings or appearing onlocal radio shows — is always a part of your weekly schedule.You will do a lot of work without pay. Consultants spendan awful lot of time doing work for which there is no remuneration.There is constant reading to keep up with their fields, says Tracy.There is research and analysis just to prepare to pitch a job. Thereare the pitches that result in no contract.You will work harder. “You will work 50 to 60 hoursa week,” says Tracy. Lots of people in corporate jobs say theywork those hours, but there is a difference. The employees, says Tracy,may be in the office for 50 to 60 hours, but spend a good chunk ofthat time going to lunch, catching up on the latest gossip, and discussingSunday’s big game. The independent consultant, in his experience,spends those same hours actually working — hard.You will pay your own way. Tracy is sometimes asked whyhe didn’t attend some seminar or workshop. For starters, he pointsout, consultants pay their own way. There is no employer to pick upthe tab for travel, fees, and meals on the road. Also, every half-dayspent at a seminar is a half-day in which a consultant is not billingfor his time. It is important to go to some meetings and seminars,but consultants have to watch their expenses and time more carefullythan do their corporate counterparts.You will be very busy, then not busy at all. “Feastor famine,” says Tracy, “it’s a big problem. There are naturalcycles in the economy and in industry.” Sometimes there will bemuch too much to do, and at other times there will be no work —and you will be sure there will never be work again.Despite the drawbacks, Tracy says consulting offers a flexibleschedule, great variety, and the satisfaction of seeing clients comethrough a difficult time stronger than they were before. “I canlook around at dozens of buildings that were built and jobs that werecreated because of our work,” is how he puts it.So, after 30 years as a consultant, what does Tracy think: Dream jobor nightmare?”For me?” he asks? “Oh definitely, dream job.”Top Of PageHonoring Trenton’s Small BusinessesTrenton Small Business Week begins on Monday, September4, this year. During the week, Mayor Douglas Palmer presentsSmall Business of the Year awards to companies in three categories:Small Business of the Year, for companies in business for at leastthree years; Most Successful New Business, for companies between oneand three years old; and Most Improved Appearance, for companies inbusiness for at least two years.Nominations in each category must be completed by Monday, September16 and faxed to the Trenton Small Business Week office at 609-396-8603.The awards will be presented during the Opening Kick Off Breakfaston Monday, September 30.Top Of PageGrabbing the Brass Ring of Your Dreamsd>Sandy Schussel, a lawyer by training, was justabout back on his feet in 1993 after more than a year of cancer treatments.Healthy again, he needed to get back to work, but balked at the prospectof picking up where he had left off. “I was unable to functionfor a year,” he recalls. “There was chemo, radiation, complicationsfrom a first surgery. During that time I did try to restart my lawpractice, but after a year I had lost a lot of clients. I was facedwith the miserable prospect of doing what I hated, and starting itup all over again.”Schussel found the courage to move in another direction, and courage,he says, is what it takes to go for the work you love. “Everybody’safraid,” he says. “When you’re a kid, your mom calls you backwhen you go out of your safe neighborhood.” Pretty soon, justcrossing safe boundaries causes sweaty hands and a racing heart. “Itsaves your life as a kid,” he says, “but as adults, when wehave some goal that is beyond our `safe neighborhood’ we back away,mixing fear with its little cousin, guilt. We need to learn and practicea new response.”On Tuesday, September 17, at 7 p.m., Schussel — now working full-timeas a sales trainer for a financial services company, and moonlightingas a consultant, personal coach, and writer — speaks on “LiveYour Dreams” at the Princeton Radisson. He repeats the free workshopon Wednesday, September 18, at the same time and place.These free workshops serve as an introduction to Schussel’s “ThreeNights in October Coaching Workshops.” Also taking place at theRadisson, and beginning at 7 p.m., these three-session workshops seekto focus participants on pursuing goals and dreams. One series ofworkshops begins on Monday, October 7, and the other on Tuesday, October8. Cost: $389. Call 888-289-5551.Schussel is eloquent on the downside of a career as a lawyer. “Earlyon, it became clear to me,” says the graduate of the New EnglandSchool of Law (Class of 1976), “that it was a profession filledwith unhappy people. There are long hours, mountains of paperwork,droning work, endless arguments, and then you fight to get paid forit.” In the beginning, says Schussel, he saw himself as a whiteknight, out to save the world. Soon, he found himself sitting aroundoutside courtrooms in the company of unhappy clients, facing off againstunhappy lawyers in front of unhappy judges.Still, he was “too afraid to move.” He had studied for yearsto become a lawyer. He had a family. He had clients. “I wantedout, but I couldn’t get out,” he recalls. “Then I was diagnosedwith cancer. I believe my immune system was saying `if this is whatlife is going to be like, let’s quit now.’”Schussel’s choice of law was based largely on a fantasy — lawas practiced on television — and on disappointment over an actingcareer that was going nowhere. A graduate of the University of Pennsylvania(Class of 1972), he “went to New York to be a star on Broadway.”After six months of rejection, he was discouraged enough to considerother options. “What do you see yourself doing?” a friendasked. He recalls answering, “being one of those lawyers on TV.”Looking back, Schussel says he might have made it as an actor if fearof this notoriously difficult career hadn’t pushed him toward somethingsafer. After recovering from cancer, he began his move, one step ata time, toward a career more in line with his talents.Finding that collaboration was much more his style than confrontation,he started doing some consulting. In truth, he says, he had been actingas a consultant even when he was practicing law. He had one client,for example, who was always being sued by customers. When customerstried to return something, his client blew up and refused to takethe goods back, whereupon — with great regularity — he wassued. Schussel convinced this client that it would be in his bestinterests to bend a little and take some of the stuff back. This meantless repeat business for Schussel, but he found satisfaction in seeingthe client break his self-destructive cycle.When he decided to escape from the practice of law, Schussel did morebusiness consulting. He had already learned a good deal about theworkings of small business through his legal practice, and learnedmore by helping his wife, Hannah Schussel, open Toys…The Store,a toy store on Palmer Square.”I wanted a business where people are happy — and they payon the spot,” the former lawyer says of the venture. His wife,who had worked in a clothing store on Palmer Square, has been in chargeof day-to-day operations from the beginning. Schussel contributedmarketing and operations advice and worked on training employees.He then started holding seminars. Clients included retail mall managers,travel industry professionals, toy manufacturers, and the state ofNew Jersey. His topics revolved around leadership, customer satisfaction,and employee training and motivation issues.He also took work as a teacher in New York University’s School ofContinuing Education, teaching marketing management and entrepreneurship.At the same time, he was building a private coaching business, whichhe maintains today, although, he notes, “there was no coachingthen, it was called `consulting.’””At one time I was doing 10 different things,” Schussel recallshappily. He found every one of his new gigs far more satisfying thanthe practice of law. Still, constantly drumming up business was timeconsuming, and he started casting about for a steady paycheck. Freshfrom a career as a lawyer, he could not even earn consideration fora job in corporate training, the area he decided was most alignedwith his interests and abilities. But after several years of leadingseminars, consulting, and teaching, he had proved himself, and landeda job as a national sales trainer.Through self-education, Schussel has moved himself most of the wayfrom job hatred to job nirvana. But he still has a short way to travel.”I want to be a motivational speaker,” he says. “Thatis my brass ring.”Going back to childhood visits to the Coney Island amusementpark, he vividly recalls the handsome painted horses on the carousel.And he recalls watching the big boys leaning far off the tall horsesto reach for the rings hung along the rail, high and to the right.One in ten on the rings was brass, and the child who grabbed it wona free ride.He was only five when his family took him to ride on the carousel,but Schussel grasped the lure of the brass ring right away. “Thatwas adventure, passion, joy, fulfillment,” he says.Although he has been coaching and consulting for nearly a decade now,Schussel has just incorporated his Princeton-based business, namingit Brass Ring Consulting.The workshops he hosts this month are his final steps in banishingthe fear that kept him indentured to a job he hated for nearly 20years. For while he has led seminars, this is the first time he addressesthe public as a motivation speaker. His message is that everyone can— and should — reach for a brass ring. (His 15-year-old daughteris following her father’s advice. Under the name Madeline Blue, sheis pursuing a career as a professional actress — U.S. 1, May 29,2002).Here is Schussel’s advice on how to pull down the prize:Analyze your situation. Maybe the career is not so bad.Maybe the problem is that you are in a large bureaucracy, when a smallcompany culture would be a better fit. Maybe you are practicing abranch of the career that chafes, and another would be a better fit.Start thinking of possibilities. You need to act if youare convinced that your career is making you miserable. But not everyonecan quit a miserable job today, Schussel acknowledges. A first stepis to start thinking about exactly what would constitute a betterjob. “This is your life,” he says. “You don’t know howlong it’s going to be. You might as well make every minute somethingyou want to live.”Identify bridge skills. “Start exploring the positiveside,” Schussel advises. A consultant might hate prospecting forclients, but might enjoy giving presentations. A lawyer might hatecourt room wrangles, but might enjoy legal research. Look for elementsyou like in your current job — or in jobs you have held in thepast.Construct the bridge. “You want to leave your jobwithout plunging into poverty,” says Schussel, “and thereare probably 1,000 ways to do that.” Take one small step, he urges,then add as many steps as you can. For example, he says, if you knowyou want to teach, do some research. After you find out what licensesyou need and what courses you have to take, sign up. Start buildingthe infrastructure that will take you where you want to go.”The main thing,” says Schussel, “is to take action.If you take action, it means that you are not paralyzed.” Manytimes, people remain stuck because they are afraid of making a careermistake — again. Don’t sweat it, says Schussel. “Get overthe concept that there is a perfect choice,” he says. “Youcan switch again.”Top Of PageWhat’s Ahead for NJ’s Uncertain Economy?Last September 11, just as Joseph Seneca, vicepresident for academic affairs at Rutgers, and James Hughes,dean of that university’s Edward J. Bloustein School of Planning andPublic Policy, were to present their economic forecast for 2002, twohijacked aircraft crashed into the World Trade Center. Stunned, theyadded a disclaimer to their talk: “All bets are off,” theysaid.A year later, uncertainty about the economy abounds. Inflation andinterest rates remain low, industrial production is recovering, andhousing and consumer spending are remarkably resilient. Yet, the bearmarket continues, consumer confidence is down, a turnaround in businessinvestment has not materialized, the federal budget is in deficitand the rest of the world is relying on stronger U.S. growth. In thisoverall ambiguous economic climate, where is New Jersey’s economygoing?On Wednesday, September 18, at 9:30 a.m., Seneca and Hughes lead apanel discussion, “Will the Economic Recovery Be Sustained orIs a Double-Dip Ahead?,” at the opening session of the New JerseyPublic Policy Seminar Series for 2002-2003 at the State House Annex,Committee Room 1, in Trenton. Call 732-932-7741.Top Of PageCoping with Sky-High Insurance PremiumsHealth insurance, property and casualty insurance, terrorisminsurance, directors and officers insurance, you name it and the ratesare up — – way, way up. In a clear case of it-never-rains-but-it-pours,companies struggling with a recession that shows no signs of leavingtown are being saddled with rate increases of 18, 44, even 300 percent.The jump packs an added wallop because it comes after a decade duringwhich modest increases — and in some cases, even reductions —were the norm.”Carrier reps used to deliver three, four, seven percent increases,”says insurance broker Bill Borton, “now they come in withthe same happy face with 15 to 18 percent increases.” Indeed companiesseeing healthcare premium jumps in the high-teens are the lucky ones.Borton has a North Jersey-based client who just got a 44 percent increase,and a suburban Philadelphia client whose rates went up 40 percent.Borton, an independent employee benefits insurance consultant affiliatedwith Fleet Insurance, moderates a panel on “Skyrocketing InsurancePremiums” on Wednesday, September 18, at 5 p.m. at a meeting ofthe New Jersey Technology Council’s CFO forum at Fleet Bank headquartersin Carnegie Center. On the panel are Clelland Green, CEO ofAmerica’s Choice Healthplans; John Merrigan, director of risk managementfor PWC; Michael Losch, CFO of Tellium; Jeff Carlson of FleetInsurance; and Bill Tully of Chubb Insurance. Cost: $70. Call856-787-9700.The reasons for increased property and casualty insurance rates aremore clear-cut than those for the healthcare insurance hikes, and,while generally more steep, are also more apt to be short term. Bortonsays sloppy underwriting and outsized returns on premiums investedin the stock market led to artificially low property insurance ratesthroughout much of the 1990s.”In the last 10 years,” Borton says, “everyone got a passon renewals, but a year ago it started getting harder. Insurance companieswere losing money.” Claims kept coming in, but investment profitsshrank substantially. Industry consolidation reduced competition.Then came the terrorists’ attacks. The result? “You’re lucky ifyour increase is 20 to 30 percent,” he says.For terrorism insurance the hit is much harder. “If you own anoffice building in New York or Philly that sticks up, you need terrorisminsurance,” says Borton. The banks holding mortgages on thesebuildings demand it, but, he says, “good luck getting it. It costsa fortune.”There is not much a small or mid-sized company can do about propertyand casualty rates. Self-insurance, a possibility with healthcareinsurance, is only an option for the largest companies. Smaller companies,says Borton, simply can’t afford the risk.While property and casualty rates have gone up dramatically, Bortonsays the move most likely is a correction to make up for rates thatwere too low for too long. Barring a bear of a bear market — oranother catastrophe on the scale of 9/11 — rates should stabilize.Healthcare insurance is another matter. The forces driving premiumshigher are multi-tentacled and intractable. Borton ticks off a dozenand seems capable of going on forever. The factors include an agingpopulation, increasing obesity, declining fitness, malpractice suits,defensive medicine, life-extending technology, rising hospital costs,rising doctors’ fees, rising prescription costs, government mandates,increased consumer demand, fraud and abuses, and a sense of entitlement.Mix it all up and out comes sky-high healthcare costs — and insurancerates.But rates in New Jersey are among the highest — if not the highest— in the nation. A reason, says Borton, is those government mandates.He points, for example, to recently-passed legislation that requiresinsurance companies to pay for infertility treatments. “That’s$10,000 a pop for in vitro,” he says. But that is just the beginning.The treatments, he points out, can lead to multiple births and prematurebabies, each of whom may need hundreds of thousands of dollars worthof medical care.There are no easy answers. Borton comments that most of us expecteverything possible to be done for our loved ones, no matter whattheir age or prognosis. And he points out that the nation’s generallack of fitness and fast food habit can be traced, at least in part,to the long work hours that lead to a rushed lifestyle.These trends are not likely to reverse themselves any time soon. Sowhat’s an employer to do?Raise deductibles. In the early days of managed care,employees would fish two singles out of their wallets to pay for adoctor’s visit, and just flash their insurance cards upon exitingthe hospital. No more. Borton is seeing employers choose coveragewith $20 or $30 office visit co-pays, $500 co-pays for in-hospitalprocedures, $250 co-pays for out-patient services, $15 co-pays forgeneric drugs, and $30 co-pays for brand name drugs.During the tech boom, worker hungry companies assumed all of the costof healthcare insurance, but the soft labor market is allowing themto shift more of the burden to their employees, a trend Borton seescontinuing. “Once the genie is out of the bottle,” he says,”you can’t put it back in.”Still, the savings from these pass-alongs are surprisingly slim. Anemployer who ups his workers’ co-pays to something approximating theabove figures would cut his premium only about three to four percent,says Borton. Instead of paying 20 percent more for healthcare insurancethis year, he would pay 16 or 17 percent.Go to defined contribution. A new healthcare insurancevehicle, a defined contribution plan makes employees partners in choosinghealthcare — and gives them an incentive to shop wisely. Underthese plans, each employee gets a healthcare account of perhaps $500to $700 to spend on any healthcare expense. When the money is gone,he is on his own until expenses mount to about $1,000 to $1,500, atwhich time traditional healthcare coverage kicks in, with the employerpaying about 80 percent and the employee paying 20 percent until costsreach $10,000. At that point, the employer would pay 100 percent.The theory behind this concept, says Borton, is that employees willsee what healthcare costs. Now, he says, they just flash their plasticcards, get treatment, and never consider the price. Perhaps unsurprisingly,employees have been underwhelmed by the appeal of defined contributionplans. “Businesses offering it as an option are getting very limitedparticipation,” says Borton. Big insurance companies, includingAetna, United Healthcare, and Humana offer defined contribution plans.Humana, he says, “went through a tremendous process introducingit.” Despite the fanfare, only three percent of subscribers signedup.A negative for the plans, Borton points out, is that there is a disincentivefor employees to spend dollars in their fund for preventive care.A plus is that it forces them to confront the costs of medical care.”Everybody agrees,” he says, “that until American consumersgain an appreciation for what the stuff costs, we won’t see significantchanges.”Consider self-insurance. Many large companies self-insurefor healthcare claims, hiring an insurance company to handle the claimsand issue the cards, but funding outlays themselves. Generally, theybuy catastrophic coverage for out-sized claims. This option can workfor companies with over 100 employees, but the more employees thebetter because the risk gets spread around. If most employees aresingle, healthy, twentysomethings so much the better. Employers witha roster of fiftysomethings probably want to stay away from self-insurance,says Borton.Self-insurance carries risk no matter what the age of the workforce,and is not the right vehicle for a small company. Yet, says Borton,”I’ve seen 50-person companies self-funding. They’re desperate.In the short term, they save money, but long term it could bankruptthem.”While skyrocketing insurance premiums have these small self-insuredcompanies on the ropes, the higher costs are a problem for all NewJersey companies. For some, the premiums are a drain on the bottomline. For others, especially tech firms with dwindling venture capitaldollars, they are fast becoming the difference between making it andnot making it.The only way businesses will get substantial relief, says Borton,only half kidding, is to “move to South Carolina and hire healthy,single, 20-year-olds.”Next StoryCorrections or additions?This page is published by PrincetonInfo.com— the web site for U.S. 1 Newspaper in Princeton, New Jersey.
