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 design

it. If your software goes buggy, you fix it. As an independent consultant

you need to be an authority on your field, but you also need to be

a marketer, a clerk, a secretary, a computer repairman, and more —

much more. "Who goes and gets the mail?" Tracy asks. "The

post office may not deliver business mail to a home. There are a thousand

little details like that." Of course, Tracy allows, as a consulting

practice grows, it is often possible to hire people to sweep up and

run errands.

You need help. Yes, the consultant with a new practice

will most likely have to change his own light bulbs, but he needs

to know his limitations. "Get legal, tax, insurance, and accounting

support," Tracy urges. There is no longer an employer to arrange

automatic withdrawals from your (now non-existent) paycheck. The rules

governing a small business are complex, and you will need help in

staying on the right side of the law.

You must get out there. It is easy to focus on getting

clients’ work done as fast and as well as possible, but doing so will

not ensure success. A consultant needs to network, to market, to keep

his name in circulation. Make sure that drumming up the next job —

whether by attending chamber of commerce meetings or appearing on

local radio shows — is always a part of your weekly schedule.

You will do a lot of work without pay. Consultants spend

an 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. There

are the pitches that result in no contract.

You will work harder. "You will work 50 to 60 hours

a week," says Tracy. Lots of people in corporate jobs say they

work 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 of

that time going to lunch, catching up on the latest gossip, and discussing

Sunday’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 why

he didn’t attend some seminar or workshop. For starters, he points

out, consultants pay their own way. There is no employer to pick up

the tab for travel, fees, and meals on the road. Also, every half-day

spent at a seminar is a half-day in which a consultant is not billing

for his time. It is important to go to some meetings and seminars,

but consultants have to watch their expenses and time more carefully

than do their corporate counterparts.

You will be very busy, then not busy at all. "Feast

or famine," says Tracy, "it’s a big problem. There are natural

cycles in the economy and in industry." Sometimes there will be

much 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 flexible

schedule, great variety, and the satisfaction of seeing clients come

through a difficult time stronger than they were before. "I can

look around at dozens of buildings that were built and jobs that were

created because of our work," is how he puts it.

So, after 30 years as a consultant, what does Tracy think: Dream job

or nightmare?

"For me?" he asks? "Oh definitely, dream job."

Top Of Page
Honoring Trenton’s Small Businesses

Trenton Small Business Week begins on Monday, September

4, this year. During the week, Mayor Douglas Palmer presents

Small Business of the Year awards to companies in three categories:

Small Business of the Year, for companies in business for at least

three years; Most Successful New Business, for companies between one

and three years old; and Most Improved Appearance, for companies in

business for at least two years.

Nominations in each category must be completed by Monday, September

16 and faxed to the Trenton Small Business Week office at 609-396-8603.

The awards will be presented during the Opening Kick Off Breakfast

on Monday, September 30.

Top Of Page
Grabbing the Brass Ring of Your Dreams

<d>Sandy Schussel, a lawyer by training, was just

about 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 prospect

of picking up where he had left off. "I was unable to function

for a year," he recalls. "There was chemo, radiation, complications

from a first surgery. During that time I did try to restart my law

practice, but after a year I had lost a lot of clients. I was faced

with the miserable prospect of doing what I hated, and starting it

up 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’s

afraid," he says. "When you’re a kid, your mom calls you back

when you go out of your safe neighborhood." Pretty soon, just

crossing safe boundaries causes sweaty hands and a racing heart. "It

saves your life as a kid," he says, "but as adults, when we

have some goal that is beyond our `safe neighborhood’ we back away,

mixing fear with its little cousin, guilt. We need to learn and practice

a new response."

On Tuesday, September 17, at 7 p.m., Schussel — now working full-time

as a sales trainer for a financial services company, and moonlighting

as a consultant, personal coach, and writer — speaks on "Live

Your Dreams" at the Princeton Radisson. He repeats the free workshop

on Wednesday, September 18, at the same time and place.

These free workshops serve as an introduction to Schussel’s "Three

Nights in October Coaching Workshops." Also taking place at the

Radisson, and beginning at 7 p.m., these three-session workshops seek

to focus participants on pursuing goals and dreams. One series of

workshops begins on Monday, October 7, and the other on Tuesday, October

8. Cost: $389. Call 888-289-5551.

Schussel is eloquent on the downside of a career as a lawyer. "Early

on, it became clear to me," says the graduate of the New England

School of Law (Class of 1976), "that it was a profession filled

with unhappy people. There are long hours, mountains of paperwork,

droning work, endless arguments, and then you fight to get paid for

it." In the beginning, says Schussel, he saw himself as a white

knight, out to save the world. Soon, he found himself sitting around

outside courtrooms in the company of unhappy clients, facing off against

unhappy lawyers in front of unhappy judges.

Still, he was "too afraid to move." He had studied for years

to become a lawyer. He had a family. He had clients. "I wanted

out, but I couldn’t get out," he recalls. "Then I was diagnosed

with cancer. I believe my immune system was saying `if this is what

life is going to be like, let’s quit now.’"

Schussel’s choice of law was based largely on a fantasy — law

as practiced on television — and on disappointment over an acting

career 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 consider

other options. "What do you see yourself doing?" a friend

asked. He recalls answering, "being one of those lawyers on TV."

Looking back, Schussel says he might have made it as an actor if fear

of this notoriously difficult career hadn’t pushed him toward something

safer. After recovering from cancer, he began his move, one step at

a 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 acting

as a consultant even when he was practicing law. He had one client,

for example, who was always being sued by customers. When customers

tried to return something, his client blew up and refused to take

the goods back, whereupon — with great regularity — he was

sued. Schussel convinced this client that it would be in his best

interests to bend a little and take some of the stuff back. This meant

less repeat business for Schussel, but he found satisfaction in seeing

the client break his self-destructive cycle.

When he decided to escape from the practice of law, Schussel did more

business consulting. He had already learned a good deal about the

workings of small business through his legal practice, and learned

more 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 pay

on the spot," the former lawyer says of the venture. His wife,

who had worked in a clothing store on Palmer Square, has been in charge

of day-to-day operations from the beginning. Schussel contributed

marketing 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 of

New 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 of

Continuing Education, teaching marketing management and entrepreneurship.

At the same time, he was building a private coaching business, which

he maintains today, although, he notes, "there was no coaching

then, it was called `consulting.’"

"At one time I was doing 10 different things," Schussel recalls

happily. He found every one of his new gigs far more satisfying than

the practice of law. Still, constantly drumming up business was time

consuming, and he started casting about for a steady paycheck. Fresh

from a career as a lawyer, he could not even earn consideration for

a job in corporate training, the area he decided was most aligned

with his interests and abilities. But after several years of leading

seminars, consulting, and teaching, he had proved himself, and landed

a job as a national sales trainer.

Through self-education, Schussel has moved himself most of the way

from job hatred to job nirvana. But he still has a short way to travel.

"I want to be a motivational speaker," he says. "That

is my brass ring."

Going back to childhood visits to the Coney Island amusement

park, he vividly recalls the handsome painted horses on the carousel.

And he recalls watching the big boys leaning far off the tall horses

to 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 won

a 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. "That

was 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, naming

it Brass Ring Consulting.

The workshops he hosts this month are his final steps in banishing

the fear that kept him indentured to a job he hated for nearly 20

years. For while he has led seminars, this is the first time he addresses

the public as a motivation speaker. His message is that everyone can

— and should — reach for a brass ring. (His 15-year-old daughter

is following her father’s advice. Under the name Madeline Blue, she

is 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 small

company culture would be a better fit. Maybe you are practicing a

branch of the career that chafes, and another would be a better fit.

Start thinking of possibilities. You need to act if you

are convinced that your career is making you miserable. But not everyone

can quit a miserable job today, Schussel acknowledges. A first step

is to start thinking about exactly what would constitute a better

job. "This is your life," he says. "You don’t know how

long it’s going to be. You might as well make every minute something

you want to live."

Identify bridge skills. "Start exploring the positive

side," Schussel advises. A consultant might hate prospecting for

clients, but might enjoy giving presentations. A lawyer might hate

court room wrangles, but might enjoy legal research. Look for elements

you like in your current job — or in jobs you have held in the

past.

Construct the bridge. "You want to leave your job

without plunging into poverty," says Schussel, "and there

are 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 know

you want to teach, do some research. After you find out what licenses

you need and what courses you have to take, sign up. Start building

the 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." Many

times, people remain stuck because they are afraid of making a career

mistake — again. Don’t sweat it, says Schussel. "Get over

the concept that there is a perfect choice," he says. "You

can switch again."

Top Of Page
What’s Ahead for NJ’s Uncertain Economy?

Last September 11, just as Joseph Seneca, vice

president for academic affairs at Rutgers, and James Hughes,

dean of that university’s Edward J. Bloustein School of Planning and

Public Policy, were to present their economic forecast for 2002, two

hijacked aircraft crashed into the World Trade Center. Stunned, they

added a disclaimer to their talk: "All bets are off," they

said.

A year later, uncertainty about the economy abounds. Inflation and

interest rates remain low, industrial production is recovering, and

housing and consumer spending are remarkably resilient. Yet, the bear

market continues, consumer confidence is down, a turnaround in business

investment has not materialized, the federal budget is in deficit

and the rest of the world is relying on stronger U.S. growth. In this

overall ambiguous economic climate, where is New Jersey’s economy

going?

On Wednesday, September 18, at 9:30 a.m., Seneca and Hughes lead a

panel discussion, "Will the Economic Recovery Be Sustained or

Is a Double-Dip Ahead?," at the opening session of the New Jersey

Public Policy Seminar Series for 2002-2003 at the State House Annex,

Committee Room 1, in Trenton. Call 732-932-7741.

Top Of Page
Coping with Sky-High Insurance Premiums

Health insurance, property and casualty insurance, terrorism

insurance, directors and officers insurance, you name it and the rates

are 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 leaving

town are being saddled with rate increases of 18, 44, even 300 percent.

The jump packs an added wallop because it comes after a decade during

which 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 with

the same happy face with 15 to 18 percent increases." Indeed companies

seeing 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 affiliated

with Fleet Insurance, moderates a panel on "Skyrocketing Insurance

Premiums" on Wednesday, September 18, at 5 p.m. at a meeting of

the New Jersey Technology Council’s CFO forum at Fleet Bank headquarters

in Carnegie Center. On the panel are Clelland Green, CEO of

America’s Choice Healthplans; John Merrigan, director of risk management

for PWC; Michael Losch, CFO of Tellium; Jeff Carlson of Fleet

Insurance; and Bill Tully of Chubb Insurance. Cost: $70. Call

856-787-9700.

The reasons for increased property and casualty insurance rates are

more clear-cut than those for the healthcare insurance hikes, and,

while generally more steep, are also more apt to be short term. Borton

says sloppy underwriting and outsized returns on premiums invested

in the stock market led to artificially low property insurance rates

throughout much of the 1990s.

"In the last 10 years," Borton says, "everyone got a pass

on renewals, but a year ago it started getting harder. Insurance companies

were losing money." Claims kept coming in, but investment profits

shrank substantially. Industry consolidation reduced competition.

Then came the terrorists’ attacks. The result? "You’re lucky if

your increase is 20 to 30 percent," he says.

For terrorism insurance the hit is much harder. "If you own an

office building in New York or Philly that sticks up, you need terrorism

insurance," says Borton. The banks holding mortgages on these

buildings demand it, but, he says, "good luck getting it. It costs

a fortune."

There is not much a small or mid-sized company can do about property

and casualty rates. Self-insurance, a possibility with healthcare

insurance, 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, Borton

says the move most likely is a correction to make up for rates that

were too low for too long. Barring a bear of a bear market — or

another catastrophe on the scale of 9/11 — rates should stabilize.

Healthcare insurance is another matter. The forces driving premiums

higher are multi-tentacled and intractable. Borton ticks off a dozen

and seems capable of going on forever. The factors include an aging

population, 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 insurance

rates.

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 requires

insurance 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 premature

babies, each of whom may need hundreds of thousands of dollars worth

of medical care.

There are no easy answers. Borton comments that most of us expect

everything possible to be done for our loved ones, no matter what

their age or prognosis. And he points out that the nation’s general

lack 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. So

what’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 a

doctor’s visit, and just flash their insurance cards upon exiting

the hospital. No more. Borton is seeing employers choose coverage

with $20 or $30 office visit co-pays, $500 co-pays for in-hospital

procedures, $250 co-pays for out-patient services, $15 co-pays for

generic drugs, and $30 co-pays for brand name drugs.

During the tech boom, worker hungry companies assumed all of the cost

of healthcare insurance, but the soft labor market is allowing them

to shift more of the burden to their employees, a trend Borton sees

continuing. "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. An

employer who ups his workers’ co-pays to something approximating the

above figures would cut his premium only about three to four percent,

says Borton. Instead of paying 20 percent more for healthcare insurance

this year, he would pay 16 or 17 percent.

Go to defined contribution. A new healthcare insurance

vehicle, a defined contribution plan makes employees partners in choosing

healthcare — and gives them an incentive to shop wisely. Under

these plans, each employee gets a healthcare account of perhaps $500

to $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, at

which time traditional healthcare coverage kicks in, with the employer

paying about 80 percent and the employee paying 20 percent until costs

reach $10,000. At that point, the employer would pay 100 percent.

The theory behind this concept, says Borton, is that employees will

see what healthcare costs. Now, he says, they just flash their plastic

cards, get treatment, and never consider the price. Perhaps unsurprisingly,

employees have been underwhelmed by the appeal of defined contribution

plans. "Businesses offering it as an option are getting very limited

participation," says Borton. Big insurance companies, including

Aetna, United Healthcare, and Humana offer defined contribution plans.

Humana, he says, "went through a tremendous process introducing

it." Despite the fanfare, only three percent of subscribers signed

up.

A negative for the plans, Borton points out, is that there is a disincentive

for 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 consumers

gain an appreciation for what the stuff costs, we won’t see significant

changes."

Consider self-insurance. Many large companies self-insure

for healthcare claims, hiring an insurance company to handle the claims

and issue the cards, but funding outlays themselves. Generally, they

buy catastrophic coverage for out-sized claims. This option can work

for companies with over 100 employees, but the more employees the

better because the risk gets spread around. If most employees are

single, healthy, twentysomethings so much the better. Employers with

a 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 bankrupt

them."

While skyrocketing insurance premiums have these small self-insured

companies on the ropes, the higher costs are a problem for all New

Jersey companies. For some, the premiums are a drain on the bottom

line. For others, especially tech firms with dwindling venture capital

dollars, they are fast becoming the difference between making it and

not 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."


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