Quaestor Equity Partners LLC
The Niche Industry Brief: Highlights for $5 to 50
million makers and marketers of
industrial products.
Fourth Quarter 2004
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Articles:
Exploring New Channels to
Market
Preserving Your Ideas at the
State Grants for Employee Training
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Exploring New Channels to Market
By Jim Stone, jestone@sbcglobal.net
You're experiencing flat sales in your traditional market areas, and little growth in new
market areas. You're unhappy with current sales levels, but anxious about the idea of a
wholesale scrapping of the current marketing practices. If that's the case, consider that
only a tweak or two might be in order.
Manufacturers' Agents
For example, many smaller
companies find that their most economic path to the
marketplace is through
independent manufacturers' agents. These independent sales groups
come in a variety of
sizes - from the one-person shop to the multi-office company - and are
customarily paid on a
commission-only basis, though these arrangements do vary.
Professional
manufacturers' agents generally operate as multiple-line sales forces, usually
specializing in related
products or in a particular industry or market. Augmenting your sales
force with them is an
inexpensive way to get sales troops on the street, when compared with
hiring numbers of direct
sales personnel. Manufacturers' agents also bring the advantage of
local contacts and
specific geographic expertise.
You can research the
availability of such agents in several ways. Try the Manufacturers'
Agents National
Association (MANA) at www.manaonline.org.
You can talk to several of
your best customers, and
frankly ask them who calls on them for other products, and who
they like the best. It's
also a good idea to reach out to sales managers in other companies that
sell into your target
customer base and get their advice.
Industry Specialists
This doesn't mean that independent agents are the complete solution. Many
are
geographically restricted, and call on customers in
unrelated industries due to their varied
product line. There may be times that your product
requires penetration of a particular
industry, or a foray into a new market. In these
cases, a move to an industry specialist - a
factory-direct sales professional that covers only
one target industry - can signal your
commitment to boosting sales.
For example, let's say the drug industry is a new
focus for you. If your sales force is arrayed
by geography, they will likely have trouble
cracking this new market because current
customers and market areas have a stronger pull on
their time and attention. Consider an
additional sales person that calls only on
pharmaceutical customers. This allows for vertical
penetration and acute familiarity with the issues
in that industry. Consequently, that specialist
becomes a clearinghouse for new developments in the
market, and identifying new customer
needs, all of which can be passed on to the general
sales force when and if the time is right.
Creating an "authority" for that industry
is also a great way to raise your visibility, by
participating in, speaking to, and writing for
industry associations, trade shows, and
seminars.
Communication Is Crucial
The most crucial consideration in any sales force
tinkering, however, will always be
communication. If you supplement an agent-only
force with a new direct sales specialist, you
must take great pains to explain this direction to
the agents - there are few developments
more alarming to a manufacturers' agent. Without an
adequate explanation, this may wrongly
signal an impending dissolution of the rep force,
and chaos and de-motivation can result.
Similarly, the addition of some manufacturers'
agents to a force that has previously been all
direct can wrongly signal the intention to "outsource"
all sales activity, with similar de-
motivational results. Keep each member of the sales
force informed of the changes and the
reasons why, and accept their feedback eagerly.
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Jim
Stone has over 15 years experience in the management of industrial sales and
marketing
teams,
spending most of that time with small manufacturers. His expertise includes
sales
team
building, sales force automation, capital equipment marketing, and industrial
search
engine
optimization. You can reach him at jestone@sbcglobal.net.
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Preserving
Your Ideas at the
By
In the last issue, I
mentioned the method to preserve the invention date of your new idea by
sending yourself a letter
with the new product idea enclosed. Why send yourself a letter? To
"prove" the
invention date indicated by the postmark.
First-to-Invent vs. First–to-File
The US Patent and Trademark
Office (PTO) follows the "first-to-invent" rather than the
"first–to-file"
rule to establish patent ownership. Assume you have an idea one day, and
weeks or months later you
send in a
date (also called the
priority date) to your request. If the PTO receives at about the same
time another inventor's
application detailing the same ideas, the PTO declares the two patent
applications to be in "interference".
The inventor that can prove their invention
date (not the
first filing date) preceded
the other's invention date will receive the patent. (Most other
countries in the world
have the "first–to-file" rule which, while unfair to the inventor
with
poor organization and
mailing skills, makes it much easier to grant a patent to the first
received patent
application.) Obviously, proving the invention date via SASE works if you
immediately document the
idea and send the letter that day.
SASE and Validity
Besides the real world
problems of inventing, documenting and mailing your ideas on the same
day,
there is another potential difficulty within the future patent application
process: validity.
If informed of
interference by the PTO, you will need to prove the envelope was not
tampered with in order to
prove that the idea was mailed within the postmarked envelope.
And there is no second
time you can open the envelope and prove the idea corresponded
with the postmark date
without extensive supporting affidavits from witnesses.
The Disclosure
Document Program (DDP)
To get around the validity issue, the PTO has set up the Disclosure Document Program.
Paperwork disclosing the
invention and signed by the inventor is forwarded to the US Patent
Office with $10. The PTO
microfilms the paperwork and retains it for two years. If you do
not apply for a patent
via the patent application process within those two years, the
microfilm is destroyed.
The PTO considers the invention date to be when they receive the
DDP documents even though
the real invention date precedes the receipt date.
The invention date provided
by SASE or DDP documents helps establish when an
invention was first
imagined and prove priority if future interference is declared by the PTO.
However, submitting DDP
documents is not the same as submitting a patent application.
But unlike patent
applications, DDP documents are kept in confidence by the PTO.
Remember, both the SASE method
and the Disclosure Document method only indicate an
invention date when
postmarked the day of the invention idea. If postmarked days or weeks
after the idea date,
proving the real invention date is harder. Using bound "laboratory"
notebooks, electronic
"watermarks" and other simple witnessing and notarization systems
can better pinpoint and
prove the actual invention date, and they all are inexpensive.
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systems for companies,
has helped perfect numerous patent applications including personal
presentations to US
patent examiners, and is a diverse patent holder of electrical, acoustic,
aerodynamic, illumination
and radio-based products. Paul also has extensive experience in
the design of new
products and processes in Engineering, Marketing, Sales, and Quality, and
is a Registered
Professional Engineer. You can reach him at CnIConsulting@mcihispeed.net
or (708) 420-9201.
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State Grants for Employee Training
By John Chalekian of HR by Design, Inc., jchalekian@hrbyd.com
Are you considering any
of the following decisions for your business?
- relocating a part of
your business
- expanding your business
by adding a new product line
- adding new machinery or
equipment
- instituting a
continuous improvement management system (TQM, Six Sigma, etc.)
- complying with new
government regulations that require worker education
Each of these actions can require a substantial investment in worker training. Having
owned and operated my own business for four years, I've learned the true meaning of the
term "limited resources". As a small business owner, you know a decision to spend
money on one thing means you don't have the money for something else. Fortunately,
there are state sponsored programs in all 50 states that are designed to assist local
employers in keeping pace with overseas or out-of-state competitors by helping defray
the costs of improving workers skills. If only more employers knew of these programs.
The Employer
Training Investment Program (ETIP)
The Illinois Department
of Economic Opportunity's ETIP is fairly representative of these
programs. According to
its website, the ETIP "helps keep
new technologies and
business practices, which, in turn, helps businesses increase
productivity, reduce
costs, improve quality and boost competitiveness. ETIP grants can
reimburse
may be awarded to
individual businesses, to original equipment manufacturers sponsoring
multi-company training
for employees of their
intermediary
organizations operating multi-company training projects."
Eligibility: Companies
that are re-locating, expanding or have facilities in
workers to be trained
must be full-time workers who are located in
Exclusions: Retail
workers; consulting or training providers; units of government; part-time,
seasonal, temporary or
contract employees.
Company Classification:
Large Companies are defined as having 250 employees or more. A
Small Company has 249
employees or less. The difference is the paperwork processing,
speed of approval and
reimbursement schedule. Under both company classifications there
are two training options.
Single Training Program:
A direct grant to a company for an approved program expansion
or business development
project. The company chooses a trainer, completes required
paperwork on program
details, and submits paperwork for approval.
Multiple Company
Training: Training conducted by an intermediary agency. Agencies may
be a trade association,
non-profit organization, community college, or a labor organization's
training program.
Free Money
By taking advantage of free
money, you can do more with limited resources. Let me
encourage you to explore
the state grants available in your area. A good source with links to
all 50 state training
grant programs is www.incentisgroup.com/training_grants_credits.aspx.
In
website that has many state
programs that might be right for your business, as well as other
useful links for small
business owners or managers. If you are interested in these programs,
contact me to help you
through the process.
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John Chalekian, SPHR, is
CEO of HR by Design, Inc., a Human Resources services firm
providing small businesses
with strategic solutions that impact the bottom line. He holds an
MBA and has taught at
please visit www.hrbyd.com. For immediate help with your
business issues, contact John
directly at jchalekian@hrbyd.com or (847) 215-6706.
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Edited by Mark Gibb, Quaestor Equity Partners LLC, mark@quaestorequity.com
Mr. Gibb is a Partner of
Quaestor and President of SINCO, Inc., a $20 million provider of
safety netting solutions.
Prior to Quaestor, he was President of Safety Storage, a $20 million
manufacturer of pre-fabricated
HazMat buildings. Before that he was a Strategy Consultant
for Accenture, and he held
senior sales and operations roles with Stewart Warner and
Federal Signal. Mr. Gibb
has a BA from the
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Copyright 2004 Quaestor
Equity Partners LLC,
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