Corrections or additions?
This article by Kathleen McGinn Spring was prepared for the July 17, 2002 edition of U.S. 1 Newspaper. All rights reserved.
Getting Green For Building Green
Business is run by traditionalists and won by innovators.
Tradition tells us that our energy needs can be met only by raping
more wilderness and damming more streams. But innovation now is making
it abundantly clear that by directing a little bit of human brain
power toward conservation we can spare the ravaging of our resources
— and our corporate pocketbooks to boot. So says Smart Start Buildings,
an energy-efficiency consortium of the Garden State’s utilities.
Smart Start’s massive energy saving incentive program is explained
in a detailed workshop "Building Energy Efficient Buildings"
on Thursday, July 25, at 4 p.m. at PSE&G’s Edison Training and Development
Center in Edison. Several representatives of PSE&G’s Smart Start outline
the available financial, technical consulting, and equipment incentives,
as well as long term cost-saving paybacks. A thorough preview of the
program can be found on the organization’s website: www.njsmartstartbuildings.com
This event is sponsored by the New Jersey Technology Council.
It is no secret that New Jersey’s power providers have been unable
to meet growing demands for over two decades — a deficit they
only see growing in the future. At the same time, conservation incentives,
specifically and prudently applied, have already made major dents
in energy demands. A series of programs that stagger peak usage in
summer and winter has cut the Garden State power drain by as much
as 18 percent.
Now New Jersey utilities are going directly to the source: the structures
that draw all this energy. The Smart Start Buildings Program consists
of Jersey Central Power and Light, Connective Power Delivery, PSE&G,
New Jersey Natural Gas, Rockland Electric and Gas, Elizabethtown Gas,
and South Jersey Gas, all in a single conservation alliance. For new
builders, Smart Start aids in the configuration of energy-wise plans
and encourages the adoption of higher efficiency equipment. For existing
plants, cost-effective, energy-saving retrofit methods are available.
A three-pronged approach of direct incentives, planning assistance,
and reduced payback time allows Smart Start to individualize each
program to customer needs.
Smart Start Program receives up to eight hours of technical assistance
in design planning — more if the consultant authorizes. The consultant
will walk through your plant and come up with a list of energy saving
items. He may work with your architect to produce a more efficient
layout or building configuration. Lighting selection and placement
— typically a source of great savings — will be analyzed.
All power equipment, including chillers, motors, HVAC, gas boilers,
heaters, and varied frequency units will be examined with an eye for
overall cost. Various renovation and remodeling options will be discussed.
Initially, Smart Start consultants meet with your firm’s engineers
and architects for a brainstorming session. A design simulation is
then created and checked over. Finally a thorough analysis of all
energy efficient measures is made both in existing and new parts of
Buildings of over 50,000 square feet qualify for a three-step comprehensive
support program each with its own cash incentive.
to the benefits of energy efficient construction, many firms are justifiably
hesitant. High-efficiency equipment frequently costs more. And even
a quick three-year payback can seem awfully far down the road to a
startup firm desperate to pinch every dollar until the eagle yells.
In answer, Smart offers upfront cash incentives and discount purchases
for most pieces of power-driven equipment. Electric chillers (air
or water), geothermal units, motors, air and water pumps, natural
gas water heaters, and prescriptive lighting all carry rebates. In
addition, the program will link you with low cost suppliers and installers.
Those seeking alternative power sources also are eligible for rebates.
Beyond these basics, the Multiple Measures Bonus, applied to firms
employing two or more conservation efforts on a single project, adds
another 10 percent to the incentive package. Larger builders, entering
the Comprehensive Design Program, can claim a $1,000 incentive on
the brainstorming stage, $5,000 for the design simulation, and another
$5,000 for the final analysis stage.
Even for the small business, the incentives alone become considerable.
For a building under 50,000 square feet, Smart Start customers are
typically receiving $5,000 in incentive funds before any energy payback
comes in. Such savings range from the $50 incentive for installing
a 0.6 energy factor gas water heater; to the $300 for the 92 percent
AFUE gas furnace; to the $3,400 rebate for more efficient and better-placed
the energy payback. The FAA’s William J. Hughes Training Facility,
located just outside Atlantic City, plunged into Smart Start in l999,
and is already saving thousands of kilowatts and bucks. Ahmad Hazaveh,
the plant’s engineer, joined architect Barry Hinkle with Connective
Power Delivery’s program manager Jim Cinelli to make their expanded
facility as low-energy as possible.
In the expanded section of the Hughes facility, they made a $21,000
investment in lighting modifications, with an admittedly paltry $1,267
upfront incentive. The result? 49,896 kilowatt hours saved annually.
In retrofit, the $178,000 investment in new lighting (mitigated by
a Smart Start $50,000 incentive) saves the FAA 1 million kilowatt
hours annually of your tax dollars.
Many businesses still labor under the ancient misconception that for
business to rise, our environment must fall. Recycling, which is a
$22 billion industry in the Garden State, is silly in their view.
Conservation, they assure themselves, is a costly frill. If these
are the rumblings coming out of your accounting department, call Smart
Start (800-854-4444) and have the experts come out for a quick audit.
You may just find that investing in a little efficiency now can crunch
out to a lot of savings by the end of fiscal year.
One of the best ways to get star employees may be to
buy them. The same is true for customers. Acquiring a competitor nets
you both, and this is an unusually good time to look into doing just
that. Beware, though, a business marriage is not without risks.
an education and consulting company, speaks on "How to Make Money
by Acquiring Companies Right" on Wednesday, July 31, at 8 a.m.
at the Princeton Hyatt. Cost: $149. Call 866-836-5669.
Harmon attended the University of Maryland (Class of 1993) on "the
10 year plan," working as he studied. He holds an M.B.A. from
Florida State and has extensive experience in acquiring companies,
in integrating them into larger companies, and in reversing the process
through the sale of business units. His first experience was in the
latter field. As controller of retailer Georgetown Leather Design
in 1993, a period he recalls as "the last recession," he was
responsible for selling that business out.
He took that experience and went to work for Encompass, a publicly
traded company that buys businesses in the construction services field
— plumbing concerns, janitorial services, HVAC companies, and
the like — and combines them into larger companies. Doing this
work, he observed that large public companies like Encompass did not
always get a good price for their acquisitions.
"The goal of business is to make money," Harmon says, "but
the goal of a public company is not as much to make money as to report
making money." There has been ample evidence of this preoccupation
of late, and it is one of the reasons Harmon thinks the little guy
can home in on acquisitions better than his behemoth business brethren.
His concern should center solely on whether a particular acquisition
will up his profits. He has no need waste sleep worrying about where
to put it on his books so that it has maximum appeal to shareholders
Besides, says Harmon, acquisition "is not rocket science."
His five years at Encompass taught him how to spot a good acquisition
target, and how to bag it at a good price. His company specializes
in passing along this wisdom to others.
all but the most hapless public companies saw their value skyrocket
in the late 1990s. Neither is it a secret that the rocket has fallen
to earth. In some cases, it has even nosed right into the turf. Small
business went through the same cycle, albeit more quietly, says Harmon.
In building services, for example, he says that companies that had
traditionally fetched two-and-a-half to three times earnings were
pulling in six times earnings at sale. Now, the multiple has fallen
back to three, or less. Through last year, sellers clung to hope,
and tried to fetch more for their companies, but, says Harmon, most
are now more realistic.
At the same time, the cost of capital is hovering at historic lows.
Banks may be cautious, he says, but they do have money, and are willing
to lend it. Low-cost money combined with sellers who finally believe
the ’90s are over equals the possibility of acquisition bargains.
business owner who has made his money, but has no relative or manager
ready to take on his company, and you may find the ideal seller. The
less time this business owner has spent preparing an exit strategy,
the better. Getting out from under his responsibilities — rather
than reaping the best possible price — may be his top priority.
the leg work, but, obviously, they charge for their services. Hart
says a broker may not be necessary if you have an acquisition target
— perhaps a longtime competitor — in your scopes. If, however,
you see acquisition is the right way to grow your business, but have
no idea what complementary companies are out there, a broker could
be an invaluable asset. If you do choose to use a broker, Harmon says,
"make him earn his money."
reasons to acquire a company: to get its best employees and to reel
in its customers. Do not assume that every customer will automatically
go with your company, says Harmon. Find out what your target is charging
customers and what kind of service he is giving them. Are your prices
and service offerings as good — or better? If not, the customers
may not stick around long.
want to keep every employee, but are bound to find at least one or
two "diamonds" among them. These people exist in every small
business. "If they didn’t," says Harmon, "the business
would have failed." Making these key people happy, while at the
same time keeping your existing employees and customers happy, can
be a balancing act. Never underestimate the force of company culture,
Gaining employees through acquisition is different from gaining employees
through hiring, he says. Employees generally are hired one at a time
and are fully aware that they are expected to adapt to their employer’s
culture. The same may not be true for employees who arrive en masse
from a newly-purchased company. They may tend to hang together, and
to cling to their former employer’s way of doing things.
The best way to prevent this mindset, says Harmon, is to let the newcomers
know that they are, in fact, new hires, and are expected to conform
to their new company’s culture.
acquisitions, says Harmon, the owner of the newly-purchased company
does not stick around long. If he is involved in operations, his former
employees are likely to cling to him, making their integration into
their new company more difficult.
But while the former owner may hamper operations, his short-term presence
can be invaluable in sales, and especially in binding his customers
to the company.
and the former owner is in a unique position to retain them. While
his salary may be a drain, it can be a trifle compared with the cost
of winning new customers any other way. "Think what it takes to
attract a new customer," says Harmon. And think what it takes
to find a star employee. An acquisition can deliver both, and the
time to grow a company through one has rarely been better.
Lots of times, owners of small businesses think the
only exit strategy is to liquidate assets and turn off the lights,
says John Harmon. After he finishes speaking to business owners considering
making acquisitions (see above), he turns to the other side of the
equation and offers advice to business owners considering a sale.
On Wednesday, July 31, at 1 p.m. at the Princeton Hyatt Harmon speaks
on "How to Make Money When You Exit Your Business." Cost:
$149. Call 866-836-5669.
"There is no reason to sell dirt cheap," he says. But neither
is getting a good price a no brainer, especially in this economy.
The businesses that fetch the best prices are those whose owners have
spent something on the order of five years preparing an exit strategy.
But even without that lead time, there are steps that make it more
likely that the owner can negotiate a fair price.
your business into a success is the element that devalues it most
at the time of a sale. And that element would be you — the owner.
Buyers, says Harmon, are purchasing future sales. They want assurances
that those sales will be there. If it is obvious that the company
can not function without the presence of its owner, there is a good
chance that future sales will decline.
see that operations are under the control of managers who know the
continuous sales effort that does not depend on you. It is very common
for the owner to be the top manager and the top salesman, too. Drop
those roles well before putting your company on the market, says Harmon.
go, and attracting the interest of a publicly-traded company may net
the best price, but there are other options. It is possible, for example,
that an employee, or a group of employees, might be interested in
buying the company.
more than 100 employees are better able to create a company that can
function well without them. Below that level, it is hard for the owner
to extricate himself completely from day-to-day operations. Where
that is the case, says Harmon, a sale to "a downsized executive
looking for his next adventure" may be the answer. If this is
the scenario, the owner can expect to stay around for a while training
made to an individual — whether an insider or a recently laid-off
executive — there is a good chance that the owner will have to
hold a note for at least part of the sale price.
says Harmon. It is essential to take the measure of the buyer’s integrity
and personality. "There is quite a bit of drama," says Harmon.
But that is better than the alternative — just shutting off the
lights and walking away.
New managers who lack experience can get themselves
into financial and administrative difficulties, says
J. Lahoda of GrowthQuest Management Training LLC. "That’s why
it’s important that new — and prospective — managers learn
essential skills early in their careers." He quotes statistics
that 42 percent of today’s managers have fewer than three years experience
and that fewer than one-fourth of new managers receive any training
in basic management techniques and responsibilities.
Lahoda’s company has landed a contract to offer sales management and
officer development training to 253 banks in the network of Atlantic
Central Bankers Bank. One of 18 "bankers banks" nationwide,
Atlantic Central provides comprehensive banking services to community
banks in Pennsylvania, New Jersey, Maryland, Delaware, and New York.
Its clients include Hopewell Valley Community Bank and Grand Bank.
One set of courses is for those who have recently entered the management
ranks, and another for newly-appointed sales managers who need to
build, motivate, and coach sales teams. The training will be conducted
at Atlantic Central’s Camp Hill training facility near Harrisburg,
Pennsylvania, in September and October.
Lahoda majored in accounting at Northeastern University, Class of
1982, and has an MBA in finance from New York University. A certified
cash manager, he has done training for the American Institute of Banking
and held positions at American Express and Summit Bank. At Summit
Bank, as senior vice president and director of Treasury Services,
he ran the commercial cash management division. He founded his firm
in July, 2001. He offers these pointers for new managers:
employees for input and advice while reserving the right to make critical
your employees view you as such. You can be cordial with your former
peers but you shouldn’t maintain personal friendships with them. To
do so will affect your ability to make objective decisions.
If you don’t communicate, don’t delegate, don’t administer discipline,
or don’t provide coaching, you’re sending the message that these things
aren’t important. Your employees will react accordingly.
to promote your organization’s strategy and to help make it work.
To do otherwise causes your employees distress.
through other people, and it only works if you spend time developing
5256, Princeton 08540-5256. Christopher J. Lahoda, president. 609-844-9883;
<d>Yardville National Bank is the first major sponsor
of Mercer County Community College’s $9 million corporate conference
center, which is supposed to be finished by November. The lobby will
carry the bank’s name. A room at the center will be named for Jamil
E. Faridy, an architect who has been a longtime supporter. His firm,
Faridy Veisk Fraytak, joins GBQC of Philadelphia as architects for
"Yardville National Bank may be scheduling a future shareholder’s
meeting there," says Patrick M. Ryan, the bank’s president and
CEO. "We view this facility as providing us with new opportunities
to interact with MCCC and its student body."
for Children’s Miracle Network and attracted more than 130 golfers
and professionals to held at Olde York Country Club in Chesterfield.
Don Tollefson, Fox Philadelphia sports anchorman and Phil Neuman of
KYW Newsradio were the live auction MCs.
as the second largest CMN contributor among more than 4,200 other
offices. Contributions will be made to Children’s Hospital of Philadelphia
and Bristol-Myers Squibb Children’s Hospital at Robert Wood Johnson
University Hospital in New Brunswick.
The state chapter of the
Industrial & Office Properties is planning its third annual community
service project — developing a playground for the residents of
Perth Amboy. The 350 member firms of NJ-NAIOP will partner with the
New Jersey Department of Community Affairs Adopt-A-Neighborhood Program,
government agencies, and businesses in developing this year’s playground.
Build Day is scheduled for Wednesday, October 16. Individuals interested
in volunteering time, providing financial support and/or supplies
for its fourth annual gala, set for Saturday, October 26, at the Lafayette
Yard Marriott in Trenton. Entitled "Laisse rouler les bon temps,"
the evening will include the presentations of the Michael J. Niozolek
awards to Sahbra Smook Jacobs of Brotman Graziano & Hubert. The county
prosecutor’s office will get the Community Partner Award.
Ads cost from $125 for a business card add to $500 or $600 for a full
page. Sponsorships are available from $100 (for a flower centerpiece
for one table) to $5,000, which includes tickets for 10 people. Funds
generated from the program book will go to Kids Instructed in Tolerance
through Education and Support (KITES), a foundation charity that educates
children and their parents about conflict resolution and violence
prevention. Call 609-586-6200.
Get statistics on the northern and central New Jersey
office market from the June edition of "Office Market Trends New
Jersey," published by commercial realtors Grubb & Ellis. Vacancy
rates in the first quarter of this year, says
have increased to close to 20 percent. "This represents a level
that has not been seen for seven years." Sublease space continues
to rise and represents 40 percent of total space available. For a
copy of this report call
or call 973-786-2538.
Online training programs that were formerly available
only to Food and Drug administration investigators are now being offered
to corporations, says
of Eduneering on Campus Drive.
"The Basics of Investigation" curriculum has 10 modules, and
the Food Drug & Cosmetic Law curriculum has five modules. For information,
call McFarland at 609-627-5300.
Corrections or additions?
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— the web site for U.S. 1 Newspaper in Princeton, New Jersey.