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Small Business Grows Up

Having been forewarned about our retrospective interview, Herb

Spiegel, former director of Mercer County Community College’s Small

Business Development Center, tried the question out on his class.

"What do you students see as the greatest change in small business

over the past 20 years?" Hands shot up, and almost unanimously the

answer was technology.

This assessment coming from these future business leaders is probably

typical of the post-Boomer generation. Says Spiegel: "Of my 158

students, not one knew what the Warren Commission was, and when I pull

down a map of the European Union, their lack of knowledge makes me

wince, but boy, can these guys handle a joy stick and make any

computer dance!"

The Spiegel family has a justifiable claim to being true Trentonians,

having arrived in the city in l899. In l932 father Herman Spiegel

opened up a furniture store, which Herb, along with his brother, took

over. Eventually they moved the shop to Lawrenceville, and finally

closed the doors in l983. Along with U.S. 1, Spiegel is marking a 20th

anniversary this year. It has been two decades since he left retail

behind and became one of the area’s premier small business gurus from

his post as former director of the SBDC and instructor at Mercer

County Community College.

His own college experience dates back to l955, when he graduated from

Rutgers with a degree in marketing (then called advertising). Yet the

length of his career in small business reaches farther back – into

early childhood.

As much as anyone, Spiegel realizes how advice must evolve with the

times. "Probably the biggest change we have seen in small business

over the past two decades," says Spiegel, "is the overall acceptance

of low overhead operations." This breaking down of expensive protocols

and accessories has been made possible, at least in part, by the

technology mentioned by his students – but there have also been

economic factors at play.

Formal letters on company stationery, neatly typed by a secretary, now

carry no more gravitas than a dashed off E-mail note. Costly personal

assistants have been replaced by thrifty, if annoying, answering

machines and cell phones. Personal business cards and brochure can now

be entirely computer generated. Newsletters can now be designed and

typed onscreen, and then E-mailed or posted on a website – or mailed

as hard copy, possibly after being sent electronically to a mailing


The technologies necessary to streamline business operations were just

beginning to emerge in 1984, and were being embraced by early

adopters. But what has changed is the general acceptance of this

cheaper, quicker method. Competition has pushed us all into a leaner,

faster mode – and gradually we have come to appreciate it.

Aiding the switch, in Spiegel’s view, is the upswing in women’s

participation in the workplace. First, to no one’s surprise, women are

different from men. They have brought novel perspectives to the marble

halls of business and are constantly pointing out new market niches.

The small and mid-size company that wants to follow this feminine lead

into such markets must invariably do so in a shoe string. It must

operate at low cost on such ventures or not at all.

So, women have changed established practices, but they have had an

even greater impact on central Jersey’s entrepreneurial scene, says

Spiegel. One has only to mingle with the Central Jersey Women’s

Network or the New Jersey Association of Women Business Owners to see

the strong feminine startup pattern.

Having taken a breather from familial duties, women return to the

workplace only to find that their best shot at upward career

trajectory is to create an outsourcing niche for a large firm. Several

surveys indicate that more Garden State businesses are now being

started by women than by men. Many of these women have little money,

and even less ability to shake some loose from lenders. So they bring

their products to market cheaply, with few of the former frills.

Women’s entry into the workplace, mass firings by major corporations,

the discovery of the thrift of outsourcing, and several technological

factors have all conspired to bring about what Spiegel calls the

home-based business boom. Since 1980 Department of Labor estimates of

workers at home has risen from four to as high as 20 percent in New

Jersey. Increasingly everyone has accepted these as not only viable

businesses, but attractive suppliers and clients. "It is now O.K. to

answer your own phone, with out having a receptionist run

interference," says Spiegel. "People are more impressed by your

independence than by the number of folks on your payroll."

Corporations are scooping up scores of home-based workers for dozens

of outsourced chores. Funding agencies have also finally come around.

Both banks and venture capitalists are now far more likely to fund a

person operating diligently out of his cellar than they were 20 years

ago when the plush facade was a financial necessity. Even the state

has loosened its jaws and lifted the ancient restraints on "cottage

industry." In l984 it was easier to register a toxic waste dump in

your backyard than a kitchen-based consulting firm or graphics shop.

Now government views the home as a legitimate place for business.

Less related to cost, but certainly tied to efficiency, has been what

Spiegel sees as the steady growth in sophistication of business

methods over the past two decades. He jokes, "I was a company owner

for 26 years and never knew what a business plan was. Now I teach it."

Gone are the days when all it took was a better mousetrap or niftier

piece of software. A thousand E-commerce firms with this premise rose

and cratered. Even if you think you can run a business off the cuff,

your backers will not. Planning, training, market surveys, and formal

courses to upgrade knowledge are now more essential than ever.

Thus, sorting out these evolutions, Spiegel sees his advice as fairly


Don’t spend where you do not have to. Make your workplace productively

comfortable, even fun, but forget about paneling your environs to

impress. Instead, concentrate on winning over your clients and backers

with a professional, sophisticated presentation, laced heavily with

numbers, facts and research.

Don’t hide your origins. When applying for funding, the small,

minority, feminine, or home-based business person need no longer

crouch before the lender. Never say that you "only" work out of the

house. If a bank is so medieval as to ask your husband to co-sign a

loan, laugh, and walk out. You don’t want to deal with a company so

far behind the times. And do not be afraid to show investors your

cellar operation. Most would rather seen your cash – and theirs –

spent on innovative productivity.

Don’t fail to network. This is probably the greatest mistake Spiegel

sees small firms making in this new environment. Small entrepreneurs

are not getting out. They’ve got to join the local chamber of

commerce. "Yes, that’s designed for you," insists Spiegel. Seek out

the professional organizations in your field – and join them.

One final and refreshing wind of change that Spiegel has noted

throughout recent years is that business has become not only accepted

but also popular. No longer the haven of greedy capitalistic yuppies,

everyone of all ages in involved. "Look at Donald Trump’s show `The

Apprentice.’ People talk about it everywhere," Spiegel says. When Tom

Peters wrote his "In Search of Excellence" a little over 20 years ago,

it was the first business best seller. Now go into the book shops and

you will find aisle after aisle dedicated to the fine art of making


We can hope that the trend keeps going, and that we become less

disparaging of profit and more concerned with how to use it wisely.

– Bart Jackson

Be a Service Star

‘Distinguish yourself from your competitors by the service you

provide," advises Arlene Schragger, of ads Public Relations and

Marketing. Schragger founded her company in 1987 after working as the

in-house marketing coordinator for an area firm for several years. Her

office is located at 2860 Brunswick Pike.

Service to your customers is one of the key ingredients to success in

business, says Schragger. "Knowing what people want and need is very

important. When people promote their business they often get caught in

talking about their company’s features; why they are the best at what

they do. But what they really need to emphasize is how they can help

their client."

To do that, says Schragger, explain how your products or services can

benefit your client. "Tell them why what you do will help them. How

can you make them feel good? What you are really selling is your

benefit to them."

One of the biggest mistakes business owners often make, adds

Schragger, is in not letting their customers and clients know all of

the services that they can provide. The "kiss of death," she says, is

in hearing that a client has gone to someone else for a service or

product your company can provide. "Make sure your clients know all of

your services. Use newsletters, postcards, whatever way is feasible to

let them know about what you do and about any new services you have,"

she says.

The growing "onslaught of media," has created one of the biggest

changes in public relations and advertising over the past few decades,

says Schragger. "The rule used to be that it took between seven and

ten impressions to gain recognition." Today however, because we are

bombarded by so much advertising from so many sources, it is even

harder to gain that notice. "It now takes between 12 and 15

impressions for a business to gain customer recognition" says

Schragger. Those impressions don’t have to be just through traditional

advertising, however.

"You might meet a person through a networking event, then they see

your ad, then they might hear that you are a sponsor of a Little

League team." Each of these "impressions" add up, says Schragger.

"You have to keep putting yourself in front of your clients. Don’t let

them forget you. After all, it is easer to sell to a current client,

someone you already have a relationship with, than it is to develop a

relationship with a new client."

While we may feel "bombarded" by the many new sources of advertising,

these new areas have also made it easier and less expensive for

smaller businesses to advertise in traditional ways. Cable television,

for example, has made TV advertising much more affordable for smaller

businesses. "I think it is particularly noticeable in this area, where

we don’t really have local TV stations," says Schragger. "I always

notice when I’m flipping channels and I see a local advertiser."

The many changes in advertising have also led to another new way of

getting the word out, she says. There is a trend for businesspeople to

sponsor their own seminars or educational events. "Business people are

doing more and more of this these days," says Schragger. "It is a way

to gain credibility. By sponsoring a cocktail party or networking

event or seminar you have a room of 50 or 60 people who can get to

know about you and your business."

Another important tool for businesspeople is networking. "People find

that when they help other people get what they need, they get help in

return. When you put two people together they are going to talk about

you. Word of mouth is often the best way of advertising."

Marketing and positioning your business should not be "a hit or miss"

type of thing, says Schragger. Instead, it should be a coordinated

campaign that includes a combination of many elements. "Don’t just

throw some things out there and see if they stick," she says. The

campaign should include traditional advertising such as display ads in

newspapers or radio and television advertising, as well as

"non-traditional" methods such as hosting a breakfast or sponsoring a

seminar or event. Another way of gaining recognition, she says, is to

write an article for a professional journal, or having an article

written about you in a publication.

"The most important thing is to try to touch your customers and

clients every day," says Schragger. "Come up with a plan that works

for you and stay with it."

– Karen Miller

GigaTechnology’s Potential & Perils

It’s been a lot like a gold rush. Wild fortunes were amassed early.

Then, ‘though veins played out, prospectors still poured in, living on

dreams. But the cycles went on and substantial rewards came to those

who brought forth the right material in the right place. The business

of high tech has never been for the faint-hearted.

Maxine Ballen, founder and president of the New Jersey Technology

Council (NJTC), credits our last two decades of booming technology

with inspiring an equally explosive entrepreneurial spirit. In l985

Ballen had just joined mentor Bill Rouse of Rouse & Associates in

trying to help market Pennsylvania’s Great Valley as a major

technological center. "Back then," she recalls, "the term entrepreneur

was just becoming part of popular business language. Everyone was

filled with innovative thoughts and was discovering that they didn’t

have to join some big firm, but could market their idea on their own."

Then as the layoffs increased, particularly in the higher tech parts

of industry, hordes of recently unemployed folks latched onto the hope

of starting their own software company. The tantalizing tales of some

little Cinderella, cellar-based firm’s sale to Bill Gates for $200

million hit the papers just often enough to fan the fantasies of a

thousand consultants.

Within 10 years the whole high tech world had cycled round. Dot-com

had become dot-bust. Money, not innovation, became the issue. Ballen

found herself crossing the river into the Garden State and finding a

new mentor, John Martinson of the Edison Venture Fund. With his

encouragement she founded the NJTC in l996. Her goal was to link the

most creative innovators with the best business managers and

interested investment sources, and for the past eight years, hundreds

of high tech firms can credited their success to NJTC.

The past 20 years have seen high tech mature from a rambunctious

childhood into a steadier, but still growing, young adult. "Technology

had really not mainstreamed into business back then," says Ballen.

This was a new wave of ideas, and many entrepreneurs believed that old

business monitors, like price/earnings ratio and balanced expansion,

could be swept aside by increasing customer awe. The advice then was

to ground a young tech company in more traditional business practices.

Concentrate on fulfillment and product control, and avoid separating

into camps of techies and fiscal managers.

Alas, it all too often went unheeded.

"I think we have learned many lessons from the collapse of Dot Com,"

says Ballen. "Gone are the days when people invest solely in an idea,

and entrepreneurs seem to understand that." As capital tightened,

investors began to look harder, and take a longer time in deciding.

Companies saw that they had to come to market with solid products, and

be able to ride through a longer startup process.

"Since l984 the funding pendulum has swung back and forth four

distinct times," says Ballen. "This is natural, but currently funders

are somewhat too reticent. I feel that innovation is being held

hostage, and that we would all be better if the funding channels were

a bit freer."

In 2004 a series of factors beyond tight funding make the high tech

entrepreneur’s lot more demanding. Most significant is the accelerated

rate at which products race to and through the market. Things may have

been wilder in l984, but they are faster now. Additionally, the amount

of competition has increased exponentially. Every product or service

dangled in front of investors and clients has to go up against scores

more companies from all over the earth offering something similar.

Little is new under our sun.

Ballen’s advice to entrepreneurs operating in this atmosphere mixes

the old with the new:

Surround yourself with good talent, whom you can understand. "Too many

people go off with the idea that their product will sell itself," says

Ballen. "Not any longer. You had better have a good sales or marketing

director." The good news is that now there are enough

technologically-informed selling specialists who can thoroughly

comprehend and explain your product. Along the same line, Ballen

suggests seeking out a seasoned financial advisor, both on staff and

on the board of directors.

Choose investors well. When it comes to funding, Ballen says, "go for

the smart money – connect with people who have expertise in your

product and can network you into further funding. The best hunters

have the greatest patience and rather than grabbing at any investor,

it behooves the business owner to measure exactly what links a funder

can provide. More and more, smaller technology firms are choosing to

partner up, rather than sell out to a large entity. Such link-ups are

more likely when an entrepreneur’s funder is the person who makes the


Be a joiner. Finally, Ballen urges all companies to seek out and join

all possible trade associations. High tech firms are notoriously lone

wolf operations, but, as in any trade, the more people you meet, the

better your information. And – no change here – information is power.

Although the wild days of the gold rush are temporarily over, gold is

still there to be mined. Getting it out of the earth just takes a

sharper set of tools.

– Bart Jackson

Profit by Diversity: John Harmon

John E. Harmon, the president and CEO of the Metropolitan Trenton

African American Chamber of Commerce (, has some good

advice for those who want to start their own business.

"What typically happens," says Harmon, "is someone has an idea and

wants to start a business. However, without a plan, and without the

proper advisors around and the right foundation – it’s going to be a

short-lived business."

Born in Trenton, in a family of five boys and two girls, Harmon lives

there still with his wife and three sons, John Jr., 21, Joshua, 16,

and Justin, 15. He attended Mercer County Community College and then

transferred to Fairleigh Dickinson College, graduating with a BS in

business management.

Harmon joined Bowery Savings Bank in New York in the residential

mortgage lending business. He then set up an office on Wall Street for

Chemical Bank. In 1989, he started Harmon Transfer Corporation, a

trucking company based in Trenton, which he has scaled back in recent


When Harmon took over as president of MTAACC a little over five years

ago, it had around 20 members. Today that number is up to 165. Not

only has the number of businesses grown, but the diversity has as

well. Members include major universities, financial institutions,

construction, professional service firms, and supermarket chains.

Harmon’s advice to anyone who is considering starting a business is to

develop a plan. Secondly, you must believe in the plan and be able to

convince others of its significance and that it will work. "You have

to be very passionate about your business and pursue it as if your

life depended on it, every day," stresses Harmon.

But you also have to be willing to adjust the plan. "There’s a saying:

the numbers don’t lie," says Harmon. "If the numbers are telling you

that the plan won’t work the way you’re proposing it to work, you must

be willing to revise it."

Thirdly, seek out those who have done it before. "There are others who

have traveled the path that you pursue," says Harmon. "Persevere to

get access to them to talk about what you’re planning on doing."

Another thing is to network. It’s important for small business people

to join an organization. You do business with people you know.

"Twenty years ago, many minorities experienced difficulty attracting

capital," he says. "There was a reluctance to lend to African

Americans. My business was just coming into its own and I thought if I

could get the capital, we could execute and get to the next level.

Even though I had passion and a business plan, and a contract pending,

we were unsuccessful in getting the capital. As a result, my business

experienced a lot of bumps and bruises."

Since then, Harmon says, "capital access options have increased for

African Americans. There are community loan funds and technical

assistance from small business development centers, which can assist

with business plans and then help someone move forward to getting a

loan. New Jersey has an entrepreneurial training institute. Trenton

has the regional business corporation, which is a community loan fund.

The technical support organizations are critical to helping secure the


According to a 2000 study by the Small Business Administration, the

success rate for Asian businesses is 50 percent, white businesses 49

percent, Hispanic around 39 percent, and African Americans about 34


"Those are the real numbers of who’s making it in business and who’s

not," says Harmon. "Those numbers are scary. If you don’t have good

banking relationships, you can’t grow, because the larger the

contract, the longer it takes to get paid. Businesses that are able to

grow have the wherewithal to be patient in collecting their

receivables. That’s a killer for a lot of start-up businesses. They

start out out-of-pocket, and they may start out pretty well. But when

they get into a volatile period and don’t have a banking relationship

to draw down a line of credit, you’re done."

Harmon says it all goes back to relationships. If businesses are part

of an association, then they have a third-party lending support to

their credibility.

"Let me give you an example," Harmon says. "I happened to see an

individual’s credit card statement recently and the interest rate was

ridiculous. I thought, what’s going on here? Although this person has

relatively good credit, he was just happy to even have a card. I

called the bank and asked what was going on. They called me back and,

after speaking with me, reduced the person’s credit card rate by 10 to

12 points. That’s why relationships make a difference."

As Harmon sees it, as a whole, African American businesses still have

a huge challenge. "We need to network more," he says. "We need to do

more business with each other. That is a historical hurdle for African

American businesses. And more importantly, African American corporate

executives and professionals need to find a way to get more involved

in supporting African American businesses and organizations. Find a

way because you realize what it means to us as a people. It speaks to

that 30 percent ratio. If more successful African American

professionals would make the commitment to support the plight of

African American communities, I think over time we could force a

paradigm shift and get some better numbers."

– Fran Ianacone

More Tools, Less Time, More Anxiety

According to Katherine Kish, president of Market Entry Inc., a

Cranbury-based strategic marketing and business development firm, our

general sense of time has gotten very, very short. "People’s patience

has disappeared and their sense of urgency and sense of anxiety has


Kish believes this is directly related to the time crunch we all face.

"The critical difference is time," says Kish. "When I started this

business in 1982, people met face-to-face. Corporations were using

three-year planning cycles. The process took forever because those

plans were meant to be so forward thinking that they would carry a

company forward at least five years. Guess what? These days planning

takes place via a conference call. And the things that used to take

place on a conference call, now take place online. We’re lucky if a

strategic plan lasts for five months. The half-life of planning, the

half-life of products and marketing strategies has gotten very, very

short. And because circumstances are changing so quickly, time is

compressed enormously."

Compressed timeframes leads people to tactical thinking, not strategic

thinking. People are wound tight nowadays. Corporations are

unforgiving. Nobody has time to make mistakes anymore. "It has to be

correct, right out of the box," says Kish, "and it has to do something

for our bottom line NOW. The tolerance for failure, the tolerance for

mistakes has also disappeared. For the sake of efficiency and

productivity, we have really given away some of the creativity and the

involvement of people."

Kish, who lives in Cranbury with her husband Bill Kraft, founder of a

business called VoteScan, also has an adult stepson who lives in the

area. "The whole world of online didn’t exist back when I started this

business," says Kish. "We now have many more tools, but much less

time. Think about how you buy a product now. You may do your research

online. Then you walk into a local store that sells the product where

you’ll look at it, feel it, and touch it. But you might not like the

price, so you go somewhere else or try to get it cheaper online. What

we have today is a more educated customer, or client, who has less

tolerance and wants results faster. That sense of impatience goes

through everything.

"There are so many more choices today for my clients that it’s much

more difficult for them to decide how to allocate resources. Do you do

advertising, do you use direct mail, telemarketing, do you hire a

salesperson, do you use a manufacturer’s rep, do you sell online? I

try to help them understand the business, think strategically, and

then create an appropriate position and strategy and help them

implement it."

Aware of the need for balance, many people are frustrated that they

haven’t achieved it. Kish feels this is directly related to the rise

in anxiety and loss of time. "People make less balanced and less

informed decisions oftentimes today because they are in such a hurry.

They don’t feel that they can stop and think."

But, not only do individuals need balance, organizations need it as

well. "Many businesses do not see a balanced picture when they look at

their strategic marketing going forward," says Kish. "They see the

short-term tactical stuff like running an ad on television, or putting

up a billboard. They aren’t as patient about the longer returns, and

maybe deeper returns that can come from things like philanthropic

efforts in the community, where you can demonstrate that you really

are a good corporate citizen."

On top of time pressures, companies also face the obstacle of being a

faceless, nameless, global player. "Again," says Kish, "it’s very

important to maintain a face in the community you work in, and in the

communities where your clients and customers live. If you have 500 or

5,000 employees living in an area, what are you doing to improve the

quality of your employee’s lives and their sense of participating in

the community? If the president of a company rolls up his sleeves to

help build a house for the homeless, or runs in a race for a cause,

those things really do pay off in the ong-run. I’m talking about

building long-term goodwill. Because it’s possible that people will

understand that it’s smarter to pay a dollar more for your product,

than the one manufactured in China, because you are making an

investment in the community."

– Fran Ianacone

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