Corrections or additions?
These stories by Teena Chandy and Barbara Fox were published in U.S. 1
Newspaper on December 9, 1998. All rights reserved.
Private Records? Not!
You are in court fighting with your ex-wife over the
custody of your child. Your wife’s attorney brings up a medical
situation
you divulged in total confidentiality to your doctor. And how did
they know? Your health care company sent it to them.
Difficult to believe, but it happens a lot, claims Russell
Holstein,
a psychologist with the New Jersey Coalition of Mental Health
Professionals
and Consumers. The incident above happened with one of Holstein’s
own patients. The health care company made a mistake and sent the
treatment authorization to the wrong address.
The company then made things worse when it tried to correct the
mistake.
The next time it sent the authorization to the patient’s own address.
Except that the authorization was not for him, it was for a person
living in Massachusetts. Holstein attributes these mistakes to the
“carelessness” of health care companies. “People do not
need their confidential information mishandled,” says Holstein,
one of the speakers at the conference organized by the New Jersey
Coalition of Mental Health Professionals and Consumers on
“Preserving
Confidentiality in a Hostile Health Care Environment” on Sunday,
December 13, at noon at the Newark Airport Sheraton. Cost: $20. Call
Karol McNulty at 732-571-1200.
Other speakers include Margo Goldman MD, a psychiatrist with
the Coalition of Patient Rights based in Wakefield, Massachusetts;
Karen Shore of the National Coalition of Mental Health
Professionals
and Consumers; Rick Marek of New Jersey Clinical Social Workers;
and Gary Herschman of the law firm of Sills and Cummins in
Newark.
The conference will focus on how confidentiality is being handled
in all healthcare situations with special reference to mental health
care.
Holstein is by no means an unbiased observer of changes in the health
care industry. He is, in fact, suing the company which fired him for
failing to provide information about one of his patients. “It
is not that I did not provide any information, but I did not provide
enough information,” says Holstein. “I am licensed to practice
in New Jersey and under state law, a doctor cannot provide
confidential
information to a third party. They kicked me out because I refused
to violate the law.”
— Teena Chandy
Technology businesses have little or no revenue, and
their chief assets are technology-based, so they are particularly
difficult to value. “Determining the Value of Small,
Technology-Based
Businesses” is the topic for Geoffrey D. Dennis and
Howard
A. Scribner, both of the valuation services practice of Arthur
Andersen LLP. Sponsored by the Technology Help Desk and Incubator,
they give a workshop on Thursday, December 10, at 8:30 a.m. at the
Rutgers Biotech Center on Cook Campus. Cost: $30. Call 732-545-3221.
A biology major at Denison, Class of 1979, Dennis worked for the
federal
Environmental Protection Agency and then studied accounting at Baylor
and Georgia State, emerging with a second undergraduate degree and
a master’s in tax accounting. He lives in Society Hill, Philadelphia,
and commutes to Manhattan.
“Look at the value from two perspectives,” suggests Dennis.
A traditional business is most often valued according to the
price/earnings
ratio, which means that its net income and cash flow drive the stock
prices. “The other way to look at is from the asset perspective,
what are the assets?”
Those assets could include inventory, current receivables, land,
buildings,
equipment, hardware, or people. Then there are intellectual assets:
patents, software developed on an enterprise system, or technology
used to create a product not patented. (A firm may choose not to apply
for a patent in order to guard against someone reading the public
records on the patent and then using reverse engineering to come up
with an effective substitute.)
“If it is an emerging company, you have to assess what the demand
will be, and the likelihood of success, and where the technology is
in the development process,” says Dennis. “If it is in the
tail end of the process, as with a pharmaceutical firm with a product
that has gone through several FDA trials, there is more value than
with an idea at the beginning of the pipeline.”
When Arthur Andersen does equity valuations of intellectual assets
for joint venture purposes, it taps industry teams. “These teams
know quite a bit about just every industry,” says Dennis. The
process generally takes six weeks and includes a due diligence phase
that involves management interviews.
But you can also do a rough valuation on your own company, whether
you are a boss or a mere employee. Dennis tells how: Find some
competitive
companies that are publicly traded. Get the annual report, the income
statement, and balance statement, and follow the stock prices.
“Use
the price earnings ratio of several competitors as a proxy for what
your company might trade at if it were public.”
For instance, if a competitor’s stock is trading at 10 times earnings,
the P/E ratio would be 10. If your stock is earning a sum equivalent
to $2 per share, the stock could be valued at $2 times 10 or $20 per
share. So a company with 100,000 outstanding shares would be worth
$2 million. But if the competitor’s P/E ratio was 8, the same company
would be worth only $2 times 8 or $16 per share or $1.6 million.
Then you have to factor in some other variables. “A small private
company without access to capital markets, its shares are not as
liquid,”
says Dennis. “And buyers might argue that there are more risks,
or that you don’t have a lot of funds for R&D.” So the calculation
might drop from $2 million to $1.8 million. “With greater growth
potential, the company will command a higher price,” says Dennis.
How can you keep your company’s value high? The suggestions that
Dennis
offers seem obvious, but maybe not:
Have a successful business.Have a successful product that the buying public wantsand appreciates.Price the product reasonably.Develop channels to manufacture, distribute, and market.Maintain momentum with active R&D. Failure to keep upthe research and development, says Dennis, is a common failing.”Lookat how fast computers and software are evolving; the life of a productcould be three years, and your market share could be taken away.”Top Of PageFamily ValuationsIf technology businesses are difficult to value, soare family businesses. Just imagine the sibling arguments that canerupt when one sibling wants to cash out. Michael A. Cuneo,a partner with the Philadelphia firm of Howard, Lawson & Company,will discuss “Unlocking Shareholder Value in a Family Business. . . Without Firing the Family” for the Venture Association ofNew Jersey on Tuesday, December 15, at 11:30 a.m. at the Westin inMorristown. Cost: $55. Call 973-631-5680 for reservations.Cuneo will use actual transactions to answer such questions as whatthe shares are worth, where to get cash to buy out the sellingshareholders,and how can the business grow after the buyout. Most important, ewill discuss how to get the deal done and still have family memberson speaking terms.Top Of PageE-Commerce:Marketing SmartYou don’t have to take credit card numbers to have aneffective marketing scheme on the World Wide Web, says CraigBroadbentof Okidata. He and two marketers from Bell Atlantic Mobile –MarioBrassini and Mark Como — are featured in an electroniccommerce workshop and holiday networking opportunity sponsored byTechnology New Jersey on Tuesday, December 15, at 8 a.m. at the HyattCost: $30. Call 609-419-4444. Brassini and Como will speak on”E-Commerce:Building and Running an On-line Store for the Customer and theBusiness,”while Broadbent covers “Web Site Success: a Look Behind theContent.”Broadbent majored in marketing at the University of Utah, Class of1990, and was an independent consultant, a marketer in a smallsoftwarefirm, and an employee at Regis McKenna, a consulting firm in SiliconValley consulting. He is manager of electronic marketing at Okidata,a firm which has chosen not to sell its products from the Internetbut to use its website for pre-purchase marketing and post-purchasetechnical support.One of the biggest mistakes you can make on your website is to makeassumptions about what the visitors to your website find interesting.”Find out what is really valuable to the user,” saysBroadbent.Reports on “hit statistics” for each page are standard. TheOkidata site, for instance, has an overall “hit” record, foreach page view, of six figures on a monthly basis. But thesestatisticscan be used in innovative ways, he says. Ask your consultant fornumberson what browsers are being used to access your site. “We knowa majority of people who come to our site are using a specificbrowser,and we know what version they use, so we make sure we maximize theexperience for them — to use the latest and greatest things thattheir browser provides.”Next find out where your visitors go when they get to the site. ForOkidata, site visitors’ three primary motives are to get informationon new products, to get support for existing products (probably withuser manuals) or to get a driver. “We make those very easy tofind and very easy to use,” says Broadbent.”We also do user surveys; we have asked people to register invarious areas, such as our small business resource center. We offera small promotional item such as a free CD-ROM with tips or a freeissue of a small business question.” To get this the visitors,perhaps surprisingly, are willing to fill out a form in great detail:how many PCs they have installed and what they use their printer for,for example. “We get a very good response,” says Broadbent.”For example, we’ve gotten 600 people registered over a six-monthperiod.”Top Of PageDyslexic CEO:Seeing StraightDon A. Winkler has turned a disability into anability that helps him see unconventional approaches to problems.He is chairman and CEO of Finance One Corporation, a subsidiary ofBank One Corporation, and he will be the keynote speaker at the”Treeof Light” holiday concert and open house at the Lewis School onFriday, December 11, at 7:30 p.m. The ceremony is free. Call609-924-8120.The Lewis Clinic’s diagnostic program provides independent educationaltesting and contributes to the research of dyslexia. “Learningproblems are understood here at the Lewis School, not as disabilities,but as differences: the expression of remarkable and diversecapacitiesof human thinking and perception,” says Marsha Gaynor Lewis,founder and director.The tree of light ceremony is an annual fundraiser that supports theLewis School Curriculum Development and Scholarship Endowment Fund.It features the tree with 100,000 lights, symbolizing hope andencouragementfor people struggling with learning and literacy. A $10 donationsponsorsa light.Founded in 1973, the Lewis School was the first educationalorganizationin the Princeton area that committed its resources and expertise tothe full-time education and advancement of bright learning differentpersons. Some 130 students are currently enrolled in pre-schoolthroughpost-graduate age.Winkler, a native of Phillipsburg, New Jersey, has overcome learningdisabilities, including dyslexia, to rise to his senior position atFinance One. As a CEO with dyslexia, Winkler actively advocates forthe challenges of those with learning disabilities. A frequentlectureron breakthrough thinking at graduate business schools, he has writtenmany articles on management. Earlier this year, he was profiled inthe Wall Street Journal and quoted extensively in the New York Times.”I see almost everything backwards,” says Winkler. Thischaracteristichas actually helped him in his career path: Because he is unable toform mental images naturally, he does not take anything for granted.Top Of PageTelecommutingLast year Merrill Lynch rolled out an impressivelydetailedfour-step process to ensure “appropriate” levels ofproductivityfor its telecommuters. Eileen Keyes, assistant vice presidentfor private client technology at Merrill Lynch, will discuss herfirm’sexperience with telecommuting in a workshop for Greater MercerTransportationManagement Association on Tuesday, December 15, at 8:30 a.m. Call609-452-1491 for information.As Keyes describes the process (U.S. 1, April 23, 1997), it startswith employees writing proposals for their managers justifying thereasons why they wish to telecommute. Then the employee and theemployee’sdirect line manager go through a one-day training program to learnhow telecommuting will affect their lives, their careers, and theirco-workers. After the prospective telecommuter clears up any homeinsurance issues, several meetings are held with managers, staff,and the employee.Last year’s plan called for every future telecommuter to report toa simulated home office on the Scudders Mill campus for two weeks.This allowed the employee to figure out equipment what he or sheneededat home in order for work to be completed successfully, and allowedthe manager to adjust to the employee’s physical absence.Next step: Install two phone lines in the employee’s home, and givethe employee instructions on how to move a PC — how to unhookit and put it back together again.And after all that, the office gets inspected: the employee receivesa visit from an inspection team.Top Of PageNJ CAMAThe New Jersey Communications, Advertising, andMarketingAssociation (NJ CAMA) has opened its 1999 membership drive toprofessionalsin the communication industry. “Our mission statement `To uniteprofessionals in the communications industry to advance and improvethe quality of communications, advertising, and marketing’ is morethan just a philosophy on paper. It’s the driving force behind everyprogram, workshop, seminar, and event,” says president NinaMalone of Thomas Edison State College.Membership rates are $85 for individual memberships; $165 for companymemberships; and $350 for corporate memberships. Call NJ CAMAHeadquartersat 609-890-9207 for membership applications; E-mail: Hedqtrs@aol.com(www.btb.com/cama); or call Susan Tibbetts at 609-275-4501 forspecific information.As part of its annual community book drive, NJ CAMA members will becollecting new, unwrapped books for underprivileged children, agestwo to six at its holiday party on Thursday, December 10, at ForrestalVillage’s Tre Piani restaurant at 5:30 p.m. Cost: $35.Tim Finer of Jersey Printing Associates is organizing the bookdrive. The books will be distributed through Mark Ferrante,the director of Mercer County’s Youth Services Division. Contributionsmarked “NJ CAMA Book Drive” can also be mailed directly toMark Ferrante, Youth Services Division, 640 South Broad Street,Trenton08650, or to Tim R. Finer, account executive, Jersey PrintingAssociates,153 First Avenue, Atlantic Highlands 07716. Finer will also arrangeto pick up contributions. Call him at 732-872-9654.”Publicity on the Internet” ($24.95), a manual describinghow to increase traffic at your website, plan and promote onlineevents,get media coverage online and off, launch a new product or business,and defend yourself from online attacks, will also be available atthe holiday party.Top Of PageY2K `FaxBack’The U.S. Small Business Administration (SBA) haslauncheda new FaxBack service to help small business owners deal with theY2K millennium bug. This service gives small business owners and thepublic access to Year 2000 information and possible solutions.SBA’s Y2K FaxBack service is available 24 hours-a-day by calling atoll-free number: 1-877-RU-Y2K-OK (1-877-789-2565). The caller canmake a selection from a menu and within minutes receive a fax targetedto their specific Y2K needs. In dealing with the Year 2000 problem,SBA urges small business owners to take three immediate steps:Determine your business’s Y2K risk with affected hardware,software, or embedded data chips. A self-assessment test is availableon the SBA’s Internet Y2K web page. (www.sba.gov/y2k/)If you are vulnerable, take action now. Don’t wait. Fixyour problem and test the results. Develop contingency plans to dealwith effects of Y2K problems outside your control.Stay informed. Accurate information may change assolutionsevolve.Next StoryCorrections or additions?This page is published by PrincetonInfo.com— the web site for U.S. 1 Newspaper in Princeton, New Jersey.
