Recap of February Dinner Meeting
Thursday, February 12th, 2003

February 13th's monthly dinner meeting topic, "Creating Your Own Brain Trust", provided all attendees with a chance to hear three experts speak: Steve Klein (Klatzkin& Company LLP); Bill Rue (Rue Insurance); and Steve Portrude (Harwill Express Press). Their insights on brain trusts, advisory boards, and peer groups are summarized below:

Klein, who has 35 years of experience as a CPA, is a partner is Klatzkin & Company LLP. He reminded business owners that we build our businesses so that someday they can run without us, so that we can sell them if we choose to. Klein offered us several methods which we can use to build our own brain trusts. He encouraged us to include an attorney, a CPA, and representatives of other functional areas in our trusts, while pointing us towards our own professional organizations to get information and to do networking for our business. Other sources for possible brain trust members include SBAs, SCORE, and government program events. He encouraged the use of business coaches, and referred us to www.startupjournal.com, a Wall Street Journal-sponsored Web site with "lots of good articles." Mentors, Klein says, should be successful either in your field or another one. To keep a mentor for years, he says, ask them what their successes and failures were, and take their suggestions seriously. "They have made their share of mistakes, and have had their triumphs. It pays to learn from someone else's experience." says Klein. His experiences with his mentor made a great difference in getting truthful answers that helped direct the future course of his business, he says.

Rue is President and owner of Rue Insurance in Hamilton, a property casualty firm. He formed an advisory board at his company several years ago, and pointed out that entrepreneurs often feel that it "gets a little lonely at the top. Sometimes the people who work for you...tell you what you want to hear, not what's really going on." he says. Rue pointed out the value of having an outside source to get some feedback from, with no axes to grind, and to say what was on their mind. Rue says that advisory boards can be good for getting insights for his management team, which otherwise might be a little myopic. Rue was surprised at how easy it was to ask people to be part of his advisory board--the first five people he asked to join it said yes. So that his advisory board would not have to incur any liability, he did not make them a board of directors. They meet three times a year, on a Tuesday evening at 4 o'clock, and the meeting lasts several hours. His advisory board meeting attendees include his Executive VP, Sales Manager, head of his benefits department, and the advisory board, including an attorney, an accountant, a management consultant, a bank president, and the head of a non-profit organization. It's a great mix of people, Rue says, people he has known for a long time, with great respect for their business acumen. He pays them a "modest" fee for their participation. His advisory board is 4 years old now, and members receive information in advance of the meetings. Topics include financial information, annual goals and status, financial benchmarks, industry averages, pilot versions of sales presentations, etc. A typical meeting will also include 2 or 3 discussion points, like whether to set up a service center to turn clients over to or not, or remodeling the office, which may lead to, as in his case, the re-negotiating of the contract for the remodeling. "The feedback is exciting." says Rue, and his management team reports appreciation for having this board available, too.

Steve Portrude is a graduate of Rochester Institute of Technology with extensive printing and publishing experience, has been involved in formal and informal peer groups for the past 16 years. He says that most people "don't have a clue that they want to own or open a business. Having worked for one of the largest printing companies in the world, he went back to his family's printing business with the ability to have a conversation on the level associated with that of the very largest companies in the business. "Peer groups are a group of people who get together to try to solve some things." Portrude says, encouraging us to look around at the informal peer groups we may already be in, like NJAWBO. His company serves as a peer group to Quark, a billion dollar software company, by being a beta site for their software testing. Peer groups are "anyone who lets you get info back and forth", and cites the collaborating of his company with others to pool their marketing budgets to share their advertising resources and leverage them. Peer groups can result in relationships, both business and personal, and friendships, says Portrude. How many of us are willing to "take off our clothes and show our financials?" he asks. He challenged us to examine how comfortable we are with the people with which we share closely held information about our businesses. He regularly gets financial information from a group of ten peer group members once a month, and stressed the importance of financials and benchmarking. "What are you benchmarking against?" he asked, pointing out that "Each industry must run within a certain range to be successful. A peer group can help you to determine what you need to do to stay in business. You need to go outside of your geographic (competitive) area when selecting peer group members." says Portrude. Peer groups can be used to help check your prices, and as a reality check, adjusted for regional labor costs. Portrude encouraged us to talk to our vendors to find potential peer group members. Peer groups can help determine what to do with a mature business, or how to prepare for selling, even for a divorce, he says. "To get started, talk to some friends, and find people you are comfortable with who run the same kind of business", he says, encouraging the use of industry associations for finding peer group candidates. When his peer group meets, they spend a total of four days at each meeting event. Portrude recommends that your group be no greater than 12 people, and indicates that sometimes extensive preparation for these meetings may be required by all in attendance. His peer group meets four times a year--twice a year formally, and twice a year informally at a trade conference. Above all, Portrude stresses the importance of "quality of life" and building one's life around business and family.

- Josephine Giaimo, VP Marketing
  NJAWBO Mercer Chapter