Back to Basics For Media Companies

Can New Jersey Be Hollywood East?

Corporate Angels

Grants Awarded

Participate Please

Donate Please

Compute in Nine Languages

Corrections or additions?

This article by Kathleen McGinn Spring was prepared for the September 17, 2003 edition of U.S. 1 Newspaper. All rights reserved.

LLCs Gain in Popularity

<B>Victor Elgort, a senior partner at law firm Norris

McLaughlin & Marcus, started out to be an engineer. But his timing

was off. "Astronauts had just landed on the moon," he recalls.

The big excitement was over, a recession was beginning, and, he adds,

"I saw that students one and two years ahead of me were having

a hard time finding jobs."

Using analytical skills, Elgort reasoned that the traits that make

a good engineer — including analytical skills — are the same

abilities that make a good attorney. "You have to break a project

down into its parts," he points out. "There is a systematic

application of rules."

So, leaving his new profession, Elgort, a 1973 Rutgers graduate, packed

up and headed to Cornell, where he obtained a law degree, which he

later followed up with an advanced degree in tax planning from New

York University.

Interesting, the successful practice of engineering or law is not

dissimilar to the successful set-up of a new business of any type

or size. Analytical skills are essential because there are important

choices to be made before a single piece of business takes place.

Yet Elgort, who spends many of his days helping to launch companies

— or to combine, separate, or expand them — sees that entrepreneurs

are often in too great a hurry to make careful choices.

"Everybody is so focused on the need to get up and running that

they don’t take the time to think about long term consequences,"

he laments. And when problems arise, he adds, "it’s often too

late to un-ring the bell."

One of the first choices an entrepreneur has to make is that of the

legal form his business will take. Is it better to make the new venture

a corporation or a limited liability company (LLC), or maybe a sole

proprietorship? Or does it even matter? Elgort provides insight and

advice when he speaks on "Choice of Business Entity in New Jersey:

How to Do It Right," on Thursday, September 18, at 8:30 a.m. at

the Best Western Palmer Inn. The cost for this program is $279. For

more information, call 800-930-6182.

Business formation is up. Fresh from lay-offs, IT professionals are

thinking of starting software development companies and former HR

directors are launching corporate training firms. Personal service

businesses are shooting up left and right as Boomers delay — or

come out of — retirement to put long-deferred entrepreneurial

dreams into play. Biotech remains active; restaurants continue to

open; and there is no dearth of attorneys and accountants ready to

hang their shingles.

No matter what the business, there is an urgency to pin that first

dollar to the wall — whether literally or figuratively. Slow down

just a little, is Elgort’s advice. Setting up the business properly

from the beginning can save untold dollars down the road.

While the possible permutations are endless — "No two businesses

are ever the same," stresses Elgort — there are some guidelines

that apply across the board:

Check with your licensing board. Most entrepreneurs are

free to make their venture any type of entity they think best. But

some are not.

"Professionals are subject to regulations by state or federal

agencies," says Elgort. These agencies establish a list of permissible

forms of business entity. "There are 22 or more different regulatory

agencies governing licensed professionals," he says. This situation

is in flux, and Elgort sees less restriction in the future, but for

now, any professional needs to check with his licensing agency before

choosing a business entity.

Look past New Jersey. Elgort recently helped a real estate

broker form a business that will have offices in northern New Jersey,

southern New York, and eastern Pennsylvania. Each state has different

regulations governing the establishment of a real estate company,

and the entrepreneur has to conform to all of them.

Think of where your customers are, says Elgort. Think of where your

manufacturing facilities are. If your business has tentacles beyond

the boundaries of the Garden State, setting up a business entity may

involve conformity to more than one set of rules, and the advantages

of a particular form of New Jersey business entity may be lessened

— or erased altogether.

Take the long view. "When a person is thinking of

establishing a business," says Elgort, "he is focusing on

taxes, liability, and insurance." That is all well and good, but,

he asks, "what about asset protection, wealth transfer, bringing

children into the business?" In setting up a business, think past

the first year or two, and try to consider as many future scenarios

as possible.

Give the LLC a good look. The LLC is relatively new. In

fact, the first one was formed in New Jersey just about 10 years ago

— by Elgort. "It was part of Christie Whitman’s bid to make

New Jersey business-friendly," he says of the legislation that

brought the LLC into being.

The legislation passed in the summer of 1993 and went into effect

in January of 1994. Elgort attended a ceremony in Trenton to celebrate

the state’s first LLC. Elgort will not reveal the name of that first

LLC. The business is still his client, and, he says, "I don’t

want to be mentioning clients’ names." He does say, however, that

the pioneer LLC is a family-owned business with sales of about $10

to $15 million a year.

In his view, the LLC, which has most of the advantages of a corporation,

but is more flexible, and easier to administer, did, in fact, give

New Jersey a business edge. In most respects, for most businesses,

it is the way to go.

Don’t worry about an LLC’s acceptance. A number of Internet

sites that give advice about business formation — and that generally

provide the service for a fee — state that an LLC is to be avoided

because it is not taken as seriously as a corporation. Banks may hesitate

to lend money to an LLC, the online legal advice sites say, and other

companies may hesitate to do business with them.

Some of that may have been true years ago, says Elgort, but he is

seeing that such fears have largely died down. "At first, banks

were worried," he says. They feared that an LLC would free an

entrepreneur of all liability, and that, therefore, they could be

left holding the bag in case of a default.

Here again, the online advice sites seem to mislead, stating that

LLCs do, in fact, free their owners from liability. This is a common

perception among entrepreneurs, says Elgort. And it is wrong. There

are a number of reasons for choosing an LLC, but counting on it to

act as a shield against all liability is not one of them.

The LLC’s owner is on the hook for any obligation for which he gives

his personal guarantee. In the real world, that covers just about

everything. Certainly, says Elgort, "banks have the negotiating

power to demand a guarantee." In other words, if a kite shop owner

wants a bank loan, he is going to have to sign for it, perhaps pledging

his home or his stock account as collateral. Should the kite shop

go under, he would be responsible for making good on the loan.

Letting banks know this, says Elgort, was all it took to make them

comfortable with LLCs.

The LLC does offer some liability protection, though. Suppliers, says

Elgort, may not have the clout to demand a personal guarantee. So,

should a business go under, its owner might not be personally liable

for business supplies and the like.

Choose a corporation when an IPO is in the future. One

of the times when a corporation can be a better choice is the case

where a new company is quite sure that it will be going public. Theoretically,

an LLC can go public and can issue "units" rather than shares

of stock. But, at least for now, potential shareholders are much more

comfortable with stock.

When in doubt, go with an LLC. It is easy to convert an

LLC to a corporation, and the consequences generally are tax neutral.

The converse is not true. When a corporation becomes an LLC, "the

tax consequences can be dramatic," says Elgort. "Essentially,"

he says, "you are liquidating the corporation."

There are often ways to mitigate the tax bite, but doing so takes

time and expert advice.

LLCs are now the most popular business choice. Leaving

corporations in the dust, LLCs are now the top choice with new New

Jersey companies. This is so, says Elgort, because they are so much

easier to form and to administer, and because they carry substantial

flexibility in taxation. A corporation, for instance, has to have

a board of directors, officers, an annual meeting, and bylaws. LLCs

need none of these things.

But LLCs are free to adopt any or all of these corporate trappings.

They can mimic a corporation in almost any way.

A company of any size can be an LLC. It used to be that

many one-person businesses would operate as sole proprietorships,

but now, even these very small businesses can reap the advantages

of an LLC. There have been a number of amendments to the original

LLC legislation. One, in 1998, declared that an individual can own

an LLC.

At the other end of the spectrum, says Elgort, an LLC can be a large

company with hundreds of millions of dollars in annual sales.

Taxes cut both ways in an LLC. Owners of an LLC can choose

to pass-through their business’ net profits — or losses —

and figure the tax as they would on personal income. Or, the owners

may elect non-pass-through treatment, in which case the tax liability

would remain with the entity.

Setting up a business entity is not, in and of itself, difficult

or expensive, says Elgort. He cautions, however, that a new business

owner consider the choice in a broader context. This is particularly

true when more than one person is going to be involved in the enterprise.

Issues of management, succession, buy-out rights, and more are best

addressed upfront.

A little analytical thinking done in advance, as Elgort’s career path

amply demonstrates, can pay outsize dividends for the new entity —

whatever its form — for decades to come.

Top Of Page
Back to Basics For Media Companies

Media is pulling out from under a tech-induced haze.

"For the last five or six years, people got very excited about

technology and its promise," says Rod Ammon, president of

Stonehouse Media. "It put a spanking on all of us."

There is paradox here. Some of the fancy tech-enabled stuff is gone.

Stonehouse Media’s web page, for example, no longer opens with an

elaborate show of sound and motion. "We used to have a 60-second

intro to the website," says Ammon. "Now it’s a straightforward

approach." But at the same time, technology’s reach into all kinds

of media messages is multiplying.

The market for the creation of these messages, meanwhile, is slowly

building after a long drought. At the same time that technology was

confusing some clients, and disappointing others, their receipts,

hurt by the recession, were dropping. Media spending was cut from

any number of corporate budgets.

"No question," says Ammon, "it’s been a difficult time

in the media business." He does see signs of a turnaround, though.

Clients have some dollars to spend once again, and are ready to learn

about all of the new ways in which they can reach customers, train

staff, and educate the public.

Ammon joins a panel discussion on "Where the Work Is: Selling

Yourself Creatively and Finding Your Niche" at the Princeton Media

Communications Association on Wednesday, September 24, at 6:30 p.m.

at the Sarnoff Corporation. Also speaking are Tom Sullivan,

president of Princeton Partners, and Debra Newton, president

of Newton Gravity Shift. The event, which includes a light supper,

is free for PMCA members, and $15 for others. Call 609-818-0025, ext.

146, for more information.

Ammon founded Stonehouse Media, which has offices at 989 Lenox Drive,

eight years ago with James Paulus. They had been working at Videosmith,

a media company with offices in Philadelphia and Princeton. When a

decision was made to close the Princeton location, Ammon and Paulus

decided to open their own shop.

Ammon, who grew up in Summit, studied communications at Northern Michigan

University (Class of 1987), and then went to work for PBS in Michigan,

where he was vice president of marketing and sales.

When Ammon and his partner started Stonehouse Media, he says, "we

knew technology was coming." And come it has. Where print once

led the parade, with television following, there is now an explosion

of options, and each requires a special expertise. The way you deliver

a message over a cell phone, Ammon points out, can be very different

from the way you deliver it over the Internet.

Nevertheless, for media companies, he is convinced, it is time to

"get back to basics." Here are some suggestions for winning

business by doing so:

Know the client. Forget the technology for a moment, and

concentrate on just exactly what it is that the client does, and who

exactly it is that he needs to reach.

Mine your expertise. "We’ve been expanding our markets,"

says Ammon. "We looked at what we knew. We looked at what relationships

were successful, and what relationships were a waste of time. Then,

we zeroed in on all the things that had been worth the time."

As an example, the shop had done some work for fire investigation

companies, producing some large-scale training tools. After terrorism

exploded into everyone’s consciousness, Ammon’s company realized that

many kinds of organizations would need the same type of training programs.

Using the types of materials it had already prepared, it added a number

of new clients, including the Secret Service and the Department of


Dig into your verticals. Another specialty of Stonehouse

Media had long been the medical field. Looking around, Ammon and his

staff realized that pharmaceutical companies had a need to communicate

with both their over-the-counter customers and their prescription

drug customers. At the same time, both pharmaceutical companies and

healthcare providers had a growing need to train their people.

The lesson for Stonehouse, and for every other media company, says

Ammon is "take advantage of what you claim to have expertise in."

Focus on your core competencies, is his advice. "The really good

agencies," in his opinion, "really learn about a product or


Never stop marketing. Stonehouse Media, like most media

shops, uses a number of freelancers. "On some days, we have five

people working on a project," says Ammon. "Other days, it’s

50. We’ve had as many as 90." These freelancers, at least those

who have been offering their services for any length of time, are

intimately familiar with boom and bust cycles. They’re either working

like crazy, or not working at all. The same can be true for agencies,

says Ammon, and the answer is the same: "Keep marketing."

No matter how much work there is today, it is imperative to keep an

eye on keeping the work flowing tomorrow.

Build solid relationships. Yes, it’s basic. But nothing

is more important. Networking? Well, it’s not a total waste of time,

opines Ammon. But getting out and schmoozing pales in importance next

to the daily imperative of turning out exceptionally good work —

again, and again, and again.

Mix it up with technology. Don’t let technology call the

tune, but play it for all it’s worth. There are so many new tools

available, and mixing them up can be effective — and great fun,


Stonehouse has a client, Avecia, a pool and spa company, with a new

product. "It’s a chlorine alternative," explains Ammon. To

teach salespeople in pool companies all across the land about the

new pool-cleaning option, Stonehouse created a training program on

a CD-ROM. Despite the proliferation of the Internet, CDs are still

important, he points out, because so many people still do not have

access to fast connections. But, while a dial-up connection doesn’t

work well for video-intensive presentations, it works wonderfully

for testing.

So salespeople learned about chlorine-free pool maintenance through

a CD-ROM, and then logged onto the Internet to test their new knowledge

— and to gain certification. An added benefit of putting the Internet

in the mix was that Avecia could know exactly how effective its campaign


"It’s like watching the stock market!" exclaims Ammon, clearly

thrilled with the hybrid technique. "You can watch the results.

You can tell which store is using the training."

The hybrid approach also works well in other settings. "Companies

in the medical industry would love to do broadband online training,"

Ammon finds, but the bandwidth is still not there. It’s coming —

probably soon — but in the meantime, putting the training on a

CD, a DVD, or even a reel of videotape, and then putting the testing

online, is a good solution.

Top Of Page
Can New Jersey Be Hollywood East?

The Garden State’s image isn’t tied too closely with

truck farming anymore. It’s more of a technology kind of place. Well-known

as the birthplace of television, and as fertile ground for telecom

and pharma, it is not often linked with movies. Tinsel town? Nah,

no one thinks of New Jersey that way.

At least not yet. But at this very moment, scores of movies, television

dramas, and commercials are being filmed from Bergen County right

down to the shore. "It relates nicely to the technology industry,"

says Michael Glass, director of Statewide Training Programs

for Mercer County Community College. "There is a whole new aspect

of the kinds of things that people can do with computers."

This convergence is one reason that MCCC decided to hold the area’s

first Entertainment Technology Conference. Subtitled "Exploring

the New Frontiers of Entertainment Technology," the event, which

Glass is busy organizing, takes place on Thursday and on Friday, September

25 and 26, at the Conference Center at Mercer County Community College.

The cost is $295, but $99 with a college ID. Call 609-586-9446 to


"We were looking for topical conference topics to help with economic

development," says Glass, "and entertainment came to the forefront."

A further impetus for holding the conference now is

the news that Hollywood special effects studio Manex has firmed up

plans to locate a facility in Trenton, in the Roebling Center. Glass

says that exact plans are still being worked out. But MIX, an industry

publication, wrote in July that Manex has purchased seven buildings

on which to develop the Trenton Studios Development Project. Plans

include converting 89,000 square feet of existing floor space into

production offices, post-production, visual effect, sound, rendering,

and classroom facilities.

Manex has entered into a redevelopment agreement with the Mercer County

Improvement Authority (MCIA) and the City of Trenton for assistance

in the development of its new facilities. The agreement includes capital

improvements of approximately $25 million by the end of phase two.

Both the City of Trenton and the MCIA have approved the company’s

conceptual plans.

Two weeks before the conference kick-off, Glass says that it is not

yet certain whether representatives from Manex will attend the conference.

Many other speakers have signed on, however, and, says Glass, "we’re

adding speakers every day."

Michael Uslan, New Jersey resident and executive producer of

the Batman movies, gives the keynote. In addition to his Batman fame,

Uslan is an Emmy Award-winning producer of many television shows and

movies, a cartoonist, an author, a lawyer, and a noted authority on

comic books.

Acknowledging the convergence Glass sees in technology and entertainment,

the conference offers three tracks: Movies, including special effects,

digital cinema, and production; Video, including streaming video,

animation, broadcast TV, and production; and Desktop, including streaming

video, DVD creation, multimedia, and video games.

Topics include "Design Direction and Zen," "Go Shoot Yourself:

One Day Movie Making," "Making Corporate Videos," "Blurring

the Line Between Gaming and Reality," "Adobe Encore DVD,"

and "Career Opportunities in Multimedia and How to Position Yourself

to Get Them."

Entertainment is big business in New Jersey. Steve Gorelick,

associate director of the state’s Motion Picture and Television Commission,

says that last year the state hosted 801 projects. Among them were

70 features, two telefilms, and 153 TV series and specials.

A Rutgers graduate (Class of 1979), who studied film at New York University,

Gorelick has worked for the Motion Picture and Television Commission

since 1980. In the intervening years, he has seen a tremendous growth

in filming activity in the state. In 1980, there were 17 features

and 19 TV series. The numbers rose to 31 features and 90 TV series

in 1990, and really took off in the late 1990s.

Reasons for New Jersey’s budding film career include the tremendous

popularity of the state’s most famous crime family, the Sopranos.

So obviously of New Jersey — with its Turnpike intro and mix of

gritty old industrial streets and McMansion suburbs, the series helped

put the state on the entertainment map.

Upon getting Hollywood’s — and New York’s — attention, New

Jersey was more than able to follow through. "We have a wealth

of talent here," says Gorelick. "Crews don’t have to be flown

in." Then there is the state’s proximity to New York City. Add

generally cooperative towns, and New Jersey makes it easy for film

makers to operate efficiently here.

Gorelick’s commission works ceaselessly to make this so. He spends

a good part of his time scouting locations and even more of his time

talking to multiple officials in towns that would make for good film

locations. "Helping to pave the way," he speaks with mayors,

city councils, and police departments. "It’s everybody," he

says, "county agencies, Port Authority, NJ Transit." Filming

can be disruptive, so he lets everyone involved know what to expect.

Most towns are enthusiastic, and welcome the film crews. It is part

of Gorelick’s job to make sure that the welcome mat stays out. So,

in addition to prepping the towns, he works with the film companies

to make sure that they "work responsibly so that the towns will

welcome them back."

Gorelick enjoys going on location, and has even been drafted as an

extra from time to time. But, as anyone who spent any time watching

the filming of IQ or of A Beautiful Mind in Princeton knows, being

an extra often is not as much fun as it would seem. Filming is slow

business. "I’m impatient," says Gorelick. People are always

telling him that they want to get their kids into films. "Well,"

he says, "I tell them they have to be patient children."

An upcoming movie that Gorelick is eager to drop in on has a working

title of "Cookout." A Queen Latifah project, it is about the

drafting of a young basketball phenom. "Jason Kidd is going to

make an appearance," reveals Gorelick.

Movies are fun, but as Trenton’s near-obsession with Manex’s move

demonstrates, they are also big business. Last year, says Gorelick,

the entertainment industry pumped $70 million into the state. And

while everyone thinks of that money going to actors, directors, key

grips, and all the other delightfully enigmatic professions that roll

quickly by in movie credits, there are a huge number of industries


The Movie and Television Commission keeps a list of state resources

for movie makers, and the number of jobs represented is nothing short

of staggering. There are categories for day care providers, animals,

tutors, dry ice, portable toilets, water trucks, parking attendants,

paging companies, gift companies, music composition, mural artists,

insurance, hot air balloons, air freight, art dealers, and dozens

and dozens of others.

To encourage the activity that adds to the revenues of companies in

all of these categories, the state recently agreed to provide loan

guarantees of up to $1.5 million through the NJEDA to film makers

working in the state. This is a per-project guarantee, and is meant,

says Gorelick, to encourage small film makers, perhaps those with

$6 million projects who need a bit more money to make a project a

reality. "Many Sundance winners have been shot here in New Jersey,"

Gorelick points out, citing Two Family House, Clerks, and The Station

Agent. "Throughout the country," he says, "people are

worried about films going to Canada, Eastern Europe, Mexico, this

is a way to level the playing field."

Top Of Page
Corporate Angels

Major supporters of the American Red Cross of Central

Jersey’s benefit performance of the Music Man include DeVry College

of Technology, Franklin’s Printing in Edison, Sovereign

Bank, WCTC Talk Radio, Englehard Corporation, IBEW

Local Union 456, and Johnson & Johnson. The performance takes

place on Saturday, October 18, at 8 p.m. at the State Theater in New


Culture Club, the new dance club located in the Westin

Princeton at Forrestal Village, is giving free admission cards on

Saturday, September 20, to all enlisted walkers in the Mercer County

Heart Walk, which took place on September 13.

The hotel also will donate money to the Heart Association on behalf

of all the walkers who attend the Culture Club on the 20th.

Bear Creek Assisted Living in West Windsor has set up

a hearing aid drop to benefit Help the Children Hear, a project that

alleviates the plight of lower-income hearing-impaired children.

Donations of new or used hearing aids, or of cash, are being accepted

at Bear Creek’s facility, at 291 Village Road East. For more information,

call 631-427-1713.

The United Way of Greater Mercer County held a Back-to-School

party for underprivileged children on Friday, August 22. Boomer, the

Trenton Thunder’s mascot, was the star attraction.

At the event, children were given book bags full of school supplies

donated by employees of Pfizer, Bristol-Myers Squibb,

Sarnoff, and The United Way.

Top Of Page
Grants Awarded

<B>Stony Brook Millstone Watershed Association has

announced $100,000 in grants to 14 watershed groups throughout the

state. Funded by the Geraldine R. Dodge Foundation, the association

established the program to help strengthen the capacity of grassroots

watershed organizations to protect environmental resources in their


Awards ranging from $2,200 to $20,000 fund projects ranging from membership

development to volunteer monitoring patrols for watershed organizations.

Funding will enable organizations to teach environmental programs

in schools, offer guidance for municipalities on the upcoming stormwater

regulations, and to increase volunteer water quality monitoring efforts.

Raritan Valley Community College has received a $315,575 grant

from the National Science Foundation under the computer science,

engineering, and mathematics scholarship program.

The four-year grant will enable the college to award 20 to 25 full

scholarships to academically talented, financially needy students

pursuing studies in the fields of computer science, engineering, mathematics,

and related technologies.

The college plans to combine these resources with the privately raised

funds for the Galileo Scholarships, which was launched last spring,

and build a community of learners supported by online integration,

faculty mentors, internship opportunities, and other learning activities.

For information contact Janet Thompson at 908-526-1200, ext. 8271.

Top Of Page
Participate Please

The Leadership Trenton program is continuing to accept

nominations for the Class of 2004. The program is based on the belief

that a city’s greatest resource is the quality and commitment of its

civic leaders. It aims to expand and improve the network of civic

and community leaders who care about the city’s future and who are

committed to working together to make that future brighter.

Leadership Trenton seeks applicants who live or work in Trenton. Successful

applicants display evidence of professional accomplishments with indications

that advancement is in their future, clear potential to exercise civic

leadership, and a commitment to positive change for Trenton and the

surrounding region.

The program is a collaboration of Thomas Edison College, the John

S. Watson Institute for Public Policy, and the Partnership for New


The application deadline is Tuesday, September 30. For more information,

contact Nelida Valentin at 609-777-4351, ext. 4255.

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Donate Please

The Princeton Regional Chamber of Commerce is sponsoring

a blood drive on Tuesday, October 28, from 11 a.m. to 3 p.m. at a

Bloodmobile adjacent to the Forrestal Village Food Court. The chamber

reminds donors to eat within four hours of giving blood and to bring

a picture ID.

Call 609-520-1776 to schedule an appointment.

G.O.A.L. Project, and international non-profit addiction

leadership and learning training project with offices in Princeton,

plans its first Benefit Evening on Saturday, September 27. The event

is entitled "Healing the Nations with Music." It kicks off

at 6 p.m. with a reception and seated dinner in the main dining lounge

at McKay Hall, Princeton Theological Seminary, followed by an evening

of choral music with the Choral Scholars in Miller Chapel.

A reception follows the concert.

According to organizers, 85 percent of all money raised will go directly

toward in-country projects and training scholarships. Tickets range

in price from $25 to $150. Call 609-921-8298 for more information.

Top Of Page
Compute in Nine Languages

The East Brunswick Public Library now offers computing

in nine different alphabets on the Windows 2000 computers in the reference

department. Accessible languages include Arabic, Chinese, Greek, Hebrew,

Hindi, Japanese, Korean, Russian, and Urdu.

The capability may be used with such Microsoft programs as Word, Excel,

Access, PowerPoint, and Outlook. It is also possible to send multilingual

E-mail in Hotmail, Yahoo Mail, or any other Web-based E-mail account.

A PowerPoint guide on using the language features is available on

the library’s computers. For more information, call 732-390-6767.

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