The Leading Edge Magazine is a quarterly publication from Sikich that offers advice and information to help you manage your business. The Spring 2012 issue cover story is on Entrepreneurs Vs. Established: What the Two Can Learn From Each Other.

1. SPRING 2012
PUBLISHED BY
Sikich LLP
ADVICE & INFORMATION TO HELP YOU MANAGE YOUR BUSINESS
ENTREPRENEURS What the Two
Can Learn From
VS. ESTABLISHED
Each Other

2. ADVICE & INFORMATION TO HELP YOU MANAGE YOUR BUSINESS
Future proof your business Celebrating 30 Years of
Taking care of your company’s future can be a daunting task. The Service and Innovation.
longevity and success of your business depend on your ability to cultivate What began as a small
an infrastructure for growth that gives your stakeholders confidence. CPA firm in 1928 grew
This infrastructure has two main elements: people and technology. Now, more than into Sikich Gardner & Co.
ever, finding and nurturing a leadership team that can help you grow, innovate and in 1982. Since then,
nourish not only employees but also clients is challenging. The unpredictable and Sikich LLP has evolved
fast-paced business landscape means top talent must be more proactive and willing to into a leading Midwest
business consulting firm.
embrace change and technology.
As we reflect on the past
And by technology, I mean much more than just hardware and software. We 30 years, and chart our future course, we
are living through the IT revolution, which has exponentially improved business are ever mindful of the importance of our
efficiencies, communication, collaboration and decision-making based on real-time client relationships and the dedicated and
data. Technology has become what powers the nerve center of a business. The cloud resourceful people that are Sikich.
is the next wave of technological genius, allowing greater flexibility and scalability for
business of all sizes. We’re grateful to our clients for helping us
achieve this milestone; and this is just the
The rapid pace of technological innovation combined with the competitive beginning of our success, for us and them.
landscape for top talent in our global marketplace has created a complex yet exciting Our clients know they’re getting the best
environment. Sikich can help you create a plan for the future and build confidence resources and holistic suite of services
through the right financial strategy, technological infrastructure and future leaders. available to run their business, and they’ll
Give us a call to set up your business for healthy growth today and tomorrow. continue to have that commitment for the
Respectfully, next 30 years and beyond!
James A. Sikich, CPA
CEO & Managing Partner Through our unique combination of services,
Sikich can build value in your organization
and take it to the next level.
SUBSCRIPTION UPDATE Services:
Complete this form and fax to Samantha Staniszewski at (630) 499-7474 or e-mail • Accounting & Consulting Services
to sstaniszewski@sikich.com. Please update your subscription list as follows: • Assurance Services
• Business Software & IT Services
■ Change address ■ Subscribe • Business Valuation
■ Unsubscribe from Leading Edge • Dispute Advisory Services
Name __________________________________________________________________ • Graphic Design & Marketing Services
• Human Resource Consulting
Title ___________________________________________________________________ • Investment Banking & Corporate Finance
Company _______________________________________________________________ • Performance Measurement
• Retirement Plan Services
Address ________________________________________________________________
• Tax Services
City _____________________________State ___________________Zip_____________ • Wealth Management
Phone __________________________________ Email __________________________
For more information, visit us at
Copy this form as necessary for multiple requests. www.sikich.com or connect with us on
Facebook: www.facebook.com/sikichllp
Twitter: www.twitter.com/sikichllp
Securities are offered through Sikich Corporate Finance LLC, a registered broker dealer
with the Securities Exchange Commission and a member of FINRA/SIPC.
Advisory services offered through Sikich Financial, a Registered Investment Advisor.
General securities offered through Triad Advisors, Member FINRA/SIPC.
2 SPRING 2012

3. VOLUME 12 • ISSUE 3 • SPRING 2012
Leading Edge
www.LeadingEdgeAlliance.com
contents
The Leading Edge Alliance is an interna-
tional professional association of inde-
pendently owned accounting and con-
sulting firms. The Leading Edge Alliance
enables member firms to access the
resources of a multibillion-dollar global
professional services organization,
providing business development, pro-
fessional training and education, and
peer-to-peer networking opportunities
nationally and globally, around the cor-
ner and around the world. features
Members are quality firms who are suc-
cessful, have deep client relationships,
and strong ties to the community. The 4 Entrepreneurs vs. established
Alliance provides members with an
impressive combination: the compre-
business leaders
hensive size and scope of a large mul-
tinational company while offering their What the two can learn from each other
clients the continuity, consistency and
quality service of a local firm.
Member firms have access to extensive
teams of business advisors—a peer-to-
14 Personal professional development
peer connection that provides the right and company development
business solutions for clients.
To find out more about the Alliance, How you can have both
contact Karen Kehl-Rose, president, at
+1 630.513.9814 or kkr@The-LEA.com.
Leading Edge Advisory
Committee
16 Business in China
Tricia Egry / Alpern Rosenthal Correctly written scope of business can attract tax,
Mary Franklin /
Lurie Besikof Lapidus Co., LLP
customs treatment benefits
Jen Lemanski / PKF Texas
Gary Voth / PKF Texas
Karen Kehl-Rose /
The Leading Edge Alliance departments
In affiliation with
Smart Business Content Marketing
www.sbnonline.com
9 News and information
Ann M. Gynn / Editor from our firm
Danielle Toth / Associate Editor
Stacy Vickroy / Art Director
Andrea Jager / Graphic Designer
13 Bits Pieces
Leading Edge is published four times per
year by Smart Business Content Marketing,
835 Sharon Drive, Suite 200, Cleveland, OH
18 On the Bookshelf
44145. (440) 250-7000, (800) 988-4726,
FAX (440) 250-7001, www.sbnonline.com.
Periodicals postage paid at Cleveland, Ohio.
IRS Treasury Regulations require us to inform
you that any tax advice contained in the body
of this communication was not intended or
written to be used, and cannot be used, by
the recipient for the purpose of avoiding pen-
alties that may be imposed under the Internal
Revenue Code or applicable state or local tax
law provisions.
LEADING EDGE 3

4. ENTREPRENEURS
What the two
can learn from
each other
L
BY DANIELLE TOTH
eaders of entrepreneurial and
established businesses may find
they differ in motivation, work
environment and professional
responsibilities, but these
executives can teach each other a lot.
Going beyond the differences in typical
dress (casual versus power), office (tight
space versus corner office) or even salary,
experts—some of whom have been on
both sides of the spectrum—share lessons
and experiences that can improve anyone’s
business, from start-up to Fortune 500.
Entrepreneurial business lessons
Risk-taking
Entrepreneurs are determined to succeed
and willing to take chances to achieve
that success, says Omar Mohammad, who
last year launched Publingo, a peer-to-
peer website that allows businesses to
connect to form mutually beneficial
relationships.
He says he took a chance when he quit
the pharmacy business he had built, took
his savings and created Publingo.
“I had no other Plan B,” Mohammad
says. “Failure was not an option. The first
year to year and a half was tough. I didn’t
make any money, and I was putting in
60-hour weeks working six days a week.
But I didn’t give up. I stayed dedicated,
and my business turned fruitful.”
4 SPRING 2012

5. cover feature
vs. ESTABLISHED
BUSINESS LEADERS
LEADING EDGE 5

6. product innovation or improvement. Passion is
contagious—people who share their excitement
about an idea are more likely to make those
around them excited about it as well.
“Keeping passion is tough,” Roeser says.
“My advice is to take a look at what got you
into the business in the first place. In my
case, I’ve been a journalist and TV reporter,
and I’ve always loved writing articles. So even
now, with owning my own agency and
hosting my own online podcast, I still make
the time to write articles for newspapers and
magazines because I love doing it.”
Guidance
Entrepreneurs recognize they need guidance,
something business leaders shouldn’t forsake
just because this isn’t their first rodeo.
“Being a boss is sometimes incredibly dull,”
Roeser says. “And you can’t always go to your
staff, clients or spouse to vent or for advice.
I’ve been blessed to have a lot of friends who
are fellow business owners, but I’m also part
of a mentoring group in which business
owners can sit down together and work
through some common issues.”
Mentoring groups and CEO roundtables
provide business leaders with the guidance
Jeffrey Davis, chairman and founder of embrace: learning from your mistakes. and soundboard they need to keep their
consulting firm Mage LLC, says too many “As an entrepreneur, I wish I would have business running smoothly and successfully.
established business leaders don’t take risks known sooner that making mistakes is OK,” Life or business coaches are also good
for the good of the organization. Davis says. “And people in big corporations options to help business leaders evaluate
Businesses generally tend to need to understand that too. Mistakes can be their business or life and implement any
institutionalize their products and procedures productive if used properly. They help us learn necessary changes.
so they become predictable. Davis says how to do things better and make better “These resources can also help you
adopting the unpredictable, risk-taking judgments. If I make a mistake in a sales call, challenge yourself,” Roeser says. “When
nature of entrepreneurs potentially could I’ll know how to negotiate better next time. you’re the boss, it often can be tricky to
improve a product or procedure. It’s all part of the learning process.” challenge yourself when you’re busy
“Businesses are concerned with putting out challenging others. But you need to look in
the same box year after year in an efficient, Passion the mirror and ask yourself what activities
profitable manner, and they hire the Entrepreneurs may be short on cash, but they you can do to recharge your batteries and
employees that will help them put out that aren’t short on passion. As Rodger Roeser, reaffirm yourself professionally.”
box,” Davis says. “But instead of putting out owner and president of the public relations Roeser, for example, says he continually
the same old box, those employees should be firm The Eisen Agency explains, sets both personal and professional goals for
saying, ‘How can we come up with a newer, entrepreneurs are generally excited about himself. This year, for example, he has
better box?’” their ideas and love to talk about them. challenged himself to read all of Jules Verne’s
What if the risk doesn’t pay off? An executive of an established company can books. Whatever a leader’s challenge may be,
Executives of established businesses can learn use passion as well and share his or her it is important to continually push to achieve
another lesson that entrepreneurs constantly enthusiasm for a new marketing initiative, his or her goals.
6 SPRING 2012

7. cover feature
MENTORING
Experienced business lessons
Conf ident
When John Schulte started out, he sold
NETWORKING
flowers on street corners and artwork to
businesses door-to-door. Often cold calling
prospects, he was shy and nervous.
Now president of the Minneapolis-based
RESOURCES
National Mail Order Association, Schulte Entrepreneurs and business leaders alike can benefit from mentoring and
often speaks to large crowds. While he still networking resources, says Jeffrey Davis, chairman and founder of consulting
sometimes feels uncomfortable when firm Mage LLC. “I always think it’s good to have advisers,” he says. “Nobody has
speaking, especially with people he doesn’t all the answers.”
know, he has learned to speak confidently
about his ideas—something entrepreneurs Check out these resources:
need to recognize to pitch their product or
service to a potential investor or client. SCORE – www.score.org – A partner of the U.S. Small Business Administration,
“Knowledge is the first thing,” Schulte SCORE (Service Corps of Retired Executives Association) is dedicated to educating
says. “If you’re knowledgeable in a subject, entrepreneurs and helping small businesses start, grow and succeed. It has a
you’ll gain confidence. So know what you’re network of more than 13,000 volunteers who offer confidential business counseling
talking about—know your business inside
services to small business entrepreneurs at no charge. It also provides workshops
and out so you’re prepared for any questions
and events throughout the country and online workshops.
that come your way. And if you don’t know
the answer to the question, that’s OK. Point SBDCs – www.asbdc-us.org – More than 1,000 Small Business Development
them to someone who does or find out the Centers across the country provide no-cost business consulting and low-cost
answer and get back to them.”
training. Small business owners and entrepreneurs can schedule face-to-face
Another way to gain confidence is to
simply pretend. “If I tell myself to be brave appointments on everything from writing a business plan to international trade.
and I act brave, eventually I will become National CEO Network – nationalceonetwork.com – With about 3,000 members,
brave,” Schulte says.
the National CEO Network is a free organization that provides networking
He offers the example of a person
opportunities as well as mixers, socials, workshops and other events across
attending a party where he or she doesn’t
know anyone but the host. While the the country.
individual might feel strange socializing with Vistage International -
the guests, following the host around all
www.vistage.com - Vistage
night isn’t an option. So what should the
has more than 15,000
person do? Walk up to a fellow guest,
introduce him or herself and start a members that include chief
conversation. The more frequently the executives and business
partygoer does this, the more comfortable it leaders worldwide. It offers
is to initiate future conversations. executive leadership
programs and business
Analytical coaching including one-on-
Big businesses have the ability to analyze
one mentoring sessions,
data to create efficiencies. “Established
businesses know the importance of analytics,” workshops, an online
says Chris Mirabile, founder and CEO of network, peer group
Hotlist, a social networking site. “They install meetings and podcasts,
analytic platforms or conduct focus group or articles and webinars.
user testing. They can then take that data to
continued on page 8
LEADING EDGE 7

8. cover feature
ENTREPRENEURSHIP GROWING
AROUND THE WORLD
The Global Entrepreneurship Monitor, a worldwide project that entrepreneurs (ages 18 to 35), 141 million early-stage
conducts an annual assessment of entrepreneurial activity, entrepreneurs who expect to create at least five new jobs in the
recently released its 2011 report. next five years and 65 million early-stage entrepreneurs who
The report, which interviewed more than 140,000 adults expect to create 20 or more new jobs in the next five years.
ages 18 to 64 in 54 economies in diverse geographies and In the United States, the total early-stage entrepreneurial
development levels, estimated 388 million entrepreneurs were activity rate, or percentage of the working-age population
actively engaged in starting and running new businesses in actively involved in business start-ups, was at 12.3 percent in
2011. This number is up from the 250 million entrepreneurs 2011, up from 7.6 percent in 2010 and close to its all-time
the organization reported in its 2010 report. high of 12.4 percent in 2005.
The 2011 number also includes an estimated 163 million For more statistics and information, view the report at
women early-stage entrepreneurs, 165 million young early-stage www.gemconsortium.org/docs/cat/1/global-reports.
continued from page 7
determine what information is critically Realistic once I start asking them questions about
important to the success of their business.” Entrepreneurs often lack the real business- how they’re going to execute an idea, they
Mirabile implemented systems to gain world knowledge executives of established have no clue,” Harrell says. “They have a
information such as how often people log businesses have, says Ed Harrell, managing good idea, but it’s not thought through.
onto the site, how they use it and where they partner of early-stage equity investor Harrell They haven’t thought about cash flow or
spend the bulk of their time. The data Capital Partners in Maryland and international outreach or things like that.
enables Mirabile to improve the business by entrepreneur in residence at Harrisburg And that’s something that business leaders
serving his customers better. University of Science and Technology in think through every day. Before they can
Analysis need not be costly—businesses Pennsylvania. present an idea to their boss, they have to
can create focus groups and offer their “People read about Facebook creator Mark show how it will benefit the company and
company’s products or services in exchange Zuckerberg, who is worth $18 billion at less be a good use of the company’s resources.
for participation. Companies also can than 30 years old, and have unrealistic Entrepreneurs should think of it the
simply better organize their existing data to expectations as to how easy it is to start a same way.”
create useful information. For example, a company and how quickly you can become
retail store can organize its customer successful,” Harrell says. “It takes more than Shared lessons
information in a spreadsheet to identify passion and a good idea.” “Whether you’re an entrepreneur or a VP at a
from which cities their clients come and Executives of established businesses use Fortune 500 company, you can always get
better tailor its services based on the socio- their experience to set realistic expectations. smarter and should never stop learning,”
economic characteristics ascribed to those Potential funders of entrepreneurial Davis says. “Whatever you’re doing today is
locations. businesses want to see similar realism and going to be different tomorrow. The world is
Knowing just what its users want has want benchmarks set to prove the changing fast, and business is a Darwinian
helped Hotlist grow—it has about 400,000 investment is being used wisely and the world. Those who evolve will survive, and
users and is growing at a rate of 25 percent business is progressing. those who don’t, wont. And the way to
per month. “I meet with a lot of entrepreneurs, and survive is to be constantly learning.” LE
8 SPRING 2012

9. INSIDE:
• Should your company use cloud computing?
• 6 tips for using social media
• Client Spotlight / Industry Updates
Don’t overlook succession planning: Start early
E ven successful business owners
often overlook the need to
have a succession plan in place.
Succession planning isn’t easy; it Allow for emotional detachment
takes time and involves many from the business and give yourself
complex issues. Often, business more options for planning the exit.
owners simply don’t know how to
get started. Whether you’re
transferring ownership of your
company, selling your businesses Consider tax and other
or dealing with unexpected events, financial implications. A solid
you need a well-crafted succession succession plan should address the
plan to help you make important financial, legal and tax implications
decisions and ensure your business involved with transferring or
can continue long after you’re selling your business. A tax
gone. Here are a few tips to get professional can help you address
you started: the tax aspects and minimize your
tax bill and maximize the after
Assemble a team of trusted tax cash flow on the sale of your
advisors. Succession planning business. Tax strategies such as
may seem overwhelming, but gifting and use of trusts may be
you don’t have to go it alone. the exit. Establish clear personal you sell shares in your options to consider in addition to
Assembling a team of advisors goals and define where you would company to your employees. the development of an estate plan
should be at the top of your list. like to take the business. Create a 4. Selling to management and personal retirement plan for
With a seasoned financial advisor, timeline to help keep you on track the owner. Considering tax and
certified public accountant, and set milestones for achieving Put a price tag on your financial implications upfront will
attorney and business valuation your goals and objectives. Keep business. Before you sell leave you well-suited to support
expert at your side, succession your plan up-to-date by creating or exit your business, you your long-term financial goals.
planning will not seem like such a consistent, ongoing monitoring need to determine what your Other key considerations
a daunting task. Be sure to choose process. Review and modify at business is worth. Having this to make in designing a
advisors that have a demonstrated least once a year as the business information will help you make succession plan:
expertise in succession planning, world is forever changing. sound decisions regarding • Employee issues
and those with whom you have your exit strategy. You need • Ownership structure
or can build a solid relationship. Evaluate your options. The to assess a number of factors, • Management succession
Your accountant, for example, can development of your options may including future potential profit, • Legal issues
offer technical knowledge and depend on your reasons for exiting competitors, intellectual property, • Contractual issues
has worked side-by-side with you the business. Whatever the reason, income taxes and customer base. • Retirement, pension and
to understand your business and analyze all your options so when Take the time to consult with profit-sharing plans
meet your financial goals. it’s time to hand over the keys to valuation experts in order to • Emotions
your business, you can do so with gain a full assessment. Without • Family
Start planning. It’s never too ease. Some options include: a solid understanding of your
early to start planning—5 years 1. Passing the keys to a family business worth, you could receive Remember, succession
minimum. By beginning to member significantly less than the true planning should be an exciting
plan for succession, you provide 2. Selling to a partner, value at sale. Correspondingly, time. With a proactive approach
yourself time to refine personal strategic buyer or financial you may find that your business and a little forward-thinking, you
goals and build the next team, buyer (for instance, a private is worth less than you thought. If can attain personal financial
allow for emotional detachment equity firm) you planned early, you now have satisfaction and ensure the
from the business and give 3. Employee Stock Ownership the luxury of time to work toward business you worked so hard to
yourself more options for planning Plan (ESOP), which is when increasing the value before sale. build continues to thrive. LE
LEADING EDGE 9

10. Should your company use cloud computing?
By Jim Drumm
C loud computing is
reshaping the IT landscape.
The cloud allows companies to
Early adopters of cloud
computing are touting the lower
operating costs and scalability. In
host virtually all their data and fact, the HBR report stated 44
applications on remote servers percent of current cloud users see
and then access these items via their increased agility as a
the Internet. Cloud computing competitive advantage provided
has yet to go completely by the cloud. Another bonus,
mainstream, but usage is on the according to early adopters, is the
rise. According to “How the ability to perform research and
Cloud Looks from the Top,” a development, and take risks sans
report from Harvard Business a high cost.
Review Analytic Services, cloud If you’re still contemplating a
usage will surge from 16 move to the cloud, research is
percent to 52 percent in the key to making the right decision.
next three years. Here are a few pros and cons to
jumpstart your analysis.
PROS CONS
AFFORDABLE: The No. 1 reason companies are excited SECURITY: The main benefit and concern with cloud computing
about cloud computing is reducing costs. You no longer need is having your data accessible on the web. Although security is
to invest in a plethora of IT staff and servers. With cloud tight and getting even more advanced as technology providers
computing, you pay only for what you use, meaning you pay perfect the framework, it is still a concern. If you need to
when you access the data on the remote servers. Companies supervise and secure data on-premises and locally control your
also see reduced costs in terms of software licenses and information, the cloud may not be the right fit.
implementation costs.
SCALABILITY AND FLEXIBILITY: With cloud computing, you CONNECTIVITY: You should ask yourself whether the risk of
can maximize resources for better efficiency and reduce losing internet connection and therefore access to your database
unused capacity. You can also scale up or down to meet the will greatly impact your day-to-day business. It is a risk some
changing demands of your business. companies are willing to take but something to consider. If there
is an Internet outage, would your business grind to a halt?
EFFICIENCY: The cloud allows you to focus on your core CONTROL: You no longer have control of when the
competencies and let an expert handle your infrastructure infrastructure is changed or how fast problems are resolved.
needs. Cloud computing also makes infrastructure and
software upgrades a breeze. Even better, it reduces overall
energy use and your physical footprint.
COLLABORATION: The cloud allows easier collaboration with CUSTOMIZATION: If you require in-depth customizations and
clients and partners alike. Plus, it provides easy access to integration with your current systems for your daily business
data no matter what type of device (tablet, smartphone, functions, cloud computing may not be accommodating to your
desktop, etc.) the end-user has. needs.
If you are still unsure whether your company should utilize cloud computing, Sikich offers cloud and on-premise solutions, and we can help you uncover which
option is right for your business. Visit our website at www.sikich.com/technology to learn more about our business software and IT solutions and download a
complimentary whitepaper, 35 Questions Every CFO Needs to Ask About ERP Software In the Cloud. LE
10 SPRING 2012

11. Sikich LLP
6 social media tips to increase
customer interactions
By Michelle J. Spellerberg Social Network Users Worldwide, 2011-2014
W e are in the midst of a communication revolution. millions and % change
Technology has forever changed the way we share 1,854.7
1,662.4
information with family, friends, clients, vendors and the world.
1,433.5
Not only does information travel faster than ever before, but
1,202.2
every person has the ability to quickly and easily share his or
her voice at any time.
In fact, by the end of 2012, there will be more than 1.5
23.1%
billion Internet users and a whopping 1.2 billion social media 19.2%
16.0%
users, according to eMarketer, which compiles and publishes 11.6%
data and analyses on digital marketing, media and commerce.
Digital communication is here to stay and will expand as 2011 2012 2013 2014
Social network users % change
continuous connectivity via mobile devices such as tablets and
Note: internet users who use a social network site bia any device at least
smartphones improves. Today, web users spend the largest once per month
Source: eMarketer, Feb 2012
chunk of their online time on social media sites, according to 136999
The Nielsen Company, a leader in research, ratings and data
for all types of media. However, many businesses have yet to
fully utilize social media as a customer acquisition and
retention tool.
The first step is to start participating today. Here are a few
3 Be strategically flexible: Participating in social media means you
need to go with the flow, but you also need a plan of attack. First,
build content that fits around your customer lifecycle and needs but
tips to get your company interacting with the customer of still helps you to stand out and be heard, read or watched. Second,
today and tomorrow. find the right person to create content on-the-fly as news happens
1 Become a storyteller: Instead of just facts and figures, sell
your solutions using stories. Stories create a memorable and
personal experience for your customers. They may not remember
and your community demands answers. Social media is real-time
communication; it is not a place for static web content. Social media
is an ongoing conversation with multiple friends that takes twists and
your product or service name, but they will remember the turns. Your social media manager must adjust but also must know
highlights of a well-told story. For example, your small business when to move forward with the plan and change the conversation.
4
customers don’t care that you worked with a Fortune 500 Show it don’t type it: YouTube is the second biggest search engine
company. Instead, they want to hear how you helped a similar after Google (Google also owns YouTube). Quick video clips are a
company or organization of a similar size and in a similar great way to educate, inform and inspire your customers to act. Videos
industry improve performance or knock down hurdles. Plus, they make content more consumable. Even better, ask your social media
want to hear it from your customers—not you. community members to submit their own videos (aka UGC).
2 Think participation: No marketing spend is harder to
achieve but better for business than user-generated content
(UGC), which is content of all forms created by people outside
5 Follow the 10-second rule: You don’t have to say everything in a
social media post. Instead, you want to think in headlines. Grab
someone’s attention and then provide them a link to the detailed
of your company. However, social media makes it easier to information. You also need to get to the point; if your prose is too
obtain UGC. If you can grab the attention of the audience and fluffy and vague, social media participants won’t click as they won’t
get them to act, you can obtain UCG. Your first goal is to get know what to expect on the other side.
your community to interact with the brand by sharing your
content. Next, you want the community to comment on posts
and have conversations with you and other community
6 Brand yourself: As a CEO, your personal brand can be just as
effective at marketing your company as your company or
organization’s brand. Creating a public profile to share information
members. Third, you want people to freely share stories,
and participate in conversations with clients, vendors and the media
reviews and other relevant information. A Yelp review about a
can help you be seen as a thought leader. You can also use social
great experience or a thank you to a great employee on
media to push philanthropic initiatives or do a little customer
Facebook is better publicity than any advertisement you could
research. No matter why you decide to market yourself, the most
ever buy because it is authentic and doesn’t come directly from
important thing to remember is to be as transparent and authentic as
the company.
you would be in any public conversation. LE
LEADING EDGE 11

12. Sikich LLP
Client Spotlight: Huston Patterson
Huston Patterson Printers’ success dates company in Ottawa, Ill. Sigma Graphics close personal relationships with Sikich
back to its roots in 1895 when it operated offers clients’ smaller scale print products accountants and advisors. Over the
as Herald Review Printing and Stationery, such as brochures, calendars, envelopes years, Sikich has developed a meticulous
the commercial printing division of the and catalogs. understanding of the company that allows
Decatur Herald Review newspaper in Huston Patterson puts innovation at the the Sikich team to proactively bring ideas
Decatur, Ill. Today, the industry leader is the forefront of its business and its clients at and solutions uniquely structured to help
longest-standing, privately owned package the center. The company’s reputation for Huston Patterson uncover tax advantages
printer in North America. excellence comes from creating, developing and meet its financial goals.
Huston Patterson specializes in and adopting the best innovative solutions Want to get an inside look at Huston
large format printing, focusing on large- that lead the industry and consistently Patterson and learn more about how
format offset prints up to 64 inches. The exceed client expectations. The company’s Sikich added value to the company?
company prints labels that get laminated commitment to innovation and customer Watch the Client Spotlight Video at
to corrugation in order to create point-of- service is evident in its HPX-brand programs. www.sikich.com/client-spotlight.
purchase (POP) displays (the large stands or Programs such as the HPX Academy, an
kiosks that promote merchandise, typically online training program that keeps clients
located near the checkout counter where abreast of critical issues within the print
consumers make last-minute purchase industry; or the HPX Quick Ship program,
decisions) as well as labels for product which guarantees same-day shipping for all
boxes, both found in many major retail orders in by 10 a.m. (CST) are innovative ways
outlets. The company also operates a the company adds value to client service.
specialty products division, Sigma Graphics, Huston Patterson has partnered with
which is a full-service commercial printer Sikich for more than 25 years, developing
Industry Updates
Keeping abreast of statistics, trends and industry developments allows you to identify risks and uncover opportunities in the market.
With better insight into the competitive landscape, you can make more informed, strategic decisions and gain a competitive edge. Our
quarterly industry updates offer intelligence from First Research* and focus on the critical facts that affect your day-to-day business.
CONSTRUCTION PROFESSIONAL SERVICES
Risk of skyscraper boom – A recent report by Forecast: Double-digit growth to continue
international investment bank Barclays Capital suggests for digital advertising – U.S. spending on online
the state of skyscraper construction projects in China and advertising increased about 20 percent in 2011 from
India could signal an impending economic correction. The report points the year before, compared to growth of about 2 percent for overall
to the economic crises that followed similar building booms in the past, ad spending, according to data from eMarketer, which compiles
such as the Great Depression amid the completion of the Empire State and publishes data and analyses on digital marketing, media and
Building and the Chrysler Building, and the oil crisis and economic commerce, reported by the Chicago Tribune. Online ad spending
stagnation of the 1970s while the Sears Tower and the World Trade is predicted by some industry insiders to reach $31 billion in 2012
Center were finished. Barclays Capital suggests the booms are a sign and grow to about $50 billion by 2015. Digital will also continue
of excess credit and represent a misallocation of capital. to be a larger portion of total ad spending, growing from about
20 percent to 28 percent during the same three-year time period.
Scattered gains for residential construction – While still
Search advertising is the largest spending segment, accounting
depressed nationally, residential construction activity has picked
for nearly half. However, video is the fastest-growing segment. As
up in regional markets, according to the Chicago Tribune. Builders
digital continues to expand, many predict the space will cease to be
are seeing an uptick in activity in Raleigh, N.C.; Austin, Texas; and
its own segment and will become the norm among agencies, just
Omaha, Neb.; among other markets. Experts said some metro areas
as radio, TV and print advertising evolved into the norm.
weathered the recession better than others, and those with fast-
*Industry Intelligence from First Research, a division of Hoover’s (a DB company).
growing populations have a higher need for new housing.
Data Published: February 6, 2012
12 SPRING 2012

13. bits
21ST CENTURY
DORIAN GRAY SAVES
Facial-aging software
has moved from being
an entertainment
gimmick to a planning
tool. It allows
consumers to visualize
BUT STAY FLEXIBLE
pieces
JOB GROWTH A GOOD SIGN,
While the U.S. Bureau of Labor Statistics recently reported that
the overall jobless rate had fallen to a three-year low, a leading
workforce solutions company reminds employers that flexibility should
still reign supreme.
Flexible work models that employ a range of full-time, contingent
and virtual skilled workers are the way to drive productivity in a
their older self and feel challenging environment.
less inhibited about Jeffrey A. Joerres, chairman and CEO of ManpowerGroup of
saving for their Milwaukee, says the job growth serves to boost the nation’s hiring
retirement. confidence, but his firm expects the number of job openings to continue
In Journal of Marketing Research’s “Increasing Saving to fluctuate.
Behavior Through Age-Progressed Renderings of the Future “Employers must master flexible work models which enable them to
Self,” researchers found all test subjects who interacted with tap the right skilled talent, even
their virtual future selves exhibited an increased tendency to remotely located, in a moment’s notice,”
accept later monetary rewards over immediate ones. he says. “The pressure to drive
In other words, the image sinks home the message that you productivity while volatile market
would be wise to think about those golden years now. conditions vacillate is intensifying­
—
Previous research has suggested that committing to companies that cannot quickly tap the
decisions about your future or expanding the value of future right talent inevitably lose their
rewards can help in the future-oriented decision process. competitive edge.”
LEADERS CAN UNWITTINGLY KILL OFF MEANINGFUL WORK
The single most important job in your that matters. The first, and fundamental,
company is not to develop a super strategy so requirement is that the work be meaningful
you gain an impressive market share—it’s to to the people doing it.”
ensure that employees make progress in The authors argue that managers at all
meaningful work, say the authors of the levels routinely—and unwittingly—
recent, The Progress Principle. undermine the meaningfulness of work for
Teresa Amabile and Steven Kramer their direct subordinates through everyday
describe a multi-year research project that words and actions. “These include dismissing
found that even incremental steps forward the importance of subordinates’ work or
boost what they call “inner work life,” which ideas, destroying a sense of ownership by
is the constant flow of emotions, motivations switching people off project teams before
and perceptions that constitute a person’s work is finalized, shifting goals so frequently
reactions to the events of the work day. Inner that people despair that their work will ever
work life also affects the bottom line, see the light of day and neglecting to keep
Amabile says. subordinates up to date on changing
“People are more creative, productive, priorities for customers,” Amabile says.
committed and collegial in their jobs when “A sense of purpose in the work, and
they have positive inner work lives,” she says. consistent action to reinforce it, has to come
“But it’s not just any sort of progress in work from the top,” she says.
LEADING EDGE 13

14. Personal professional
development
AND company development
How you can have both BY DANIELLE TOTH
P
ersonal professional development
and company development go
hand in hand. Better-trained,
more knowledgeable employees
not only improve their individual
skill set but bring those skills to improve
the company.
Some companies struggle to appreciate
professional development for fear that the
improved skill set will make the employee
more marketable and increase the risk of
departure for a better opportunity. Other
companies may think personal professional
development isn’t “real work” because it
takes time away from normal duties
employees should be fulfilling.
“There’s the fear that if you’re caught
going out to a networking breakfast or lunch
that your boss won’t see you at your desk, or
in the break room at noon, and think you’re
out on the golf course,” says Rodger Roeser,
owner and president of The Eisen Agency, a
public relations firm in the Cincinnati area.
“While the perception is that you’re not
working, it is really quite the opposite.”
Develop employees and reap rewards
Make personal development part of your
company culture, says Dave Lavinsky,
president and co-founder of Growthink, a
company that offers products and services
for entrepreneurs. For example, he and an
employee attended a marketing conference
to learn the latest thinking, tactics and
strategies. Growthink paid for the three-day
14 SPRING 2012

15. strategic
trip, and when the two returned the first should make sure an employee is generally
thing they did was have a company-wide happy on all four of those axes,” he says.
conference call to share key takeaways from
the conference. “YOU CAN For example, in terms of the progressing
toward a goal or achievement criterion,
MOTIVATE
“You can motivate employees by having Growthink asks its employees how they
them share their ideas and advice and think they should be judged. Lavinsky asks,
EMPLOYEES
participate in the growth of the company,” “If I were to remove your fixed
Lavinsky says. “The key is to make it a part compensation and pay you solely on variable
of your culture so that everyone wants to compensation, what factors would be fair to
learn and is excited about learning.”
Roeser says in some industries earning
BY HAVING judge you on?”
Employees usually respond with things
individual accreditation is a boon to both
the employee and the company. “We have an
THEM SHARE such as customer satisfaction, revenue or
profits, depending on their position.
incentive program that if anybody at my
firm wants to earn their accreditation in
THEIR IDEAS.” Lavinsky then meets with them to discuss
the factors, whether he agrees or disagrees
public relations, we pay for them to go – Dave Lavinsky, and why. The two agree on a factor the
through the training and give them a $1,000 president and co-founder employee can work toward, and the
bonus. It’s attractive for my firm to say we’re of Growthink employee can receive bonuses based on
an APR-accredited business, and the whether he or she meets that factor.
(benefit to the) employee is learning new “This allows employees to voice their
skills, meeting new people and getting that Marketability vs. Departure opinions and also gives them opportunities
personal, professional growth.” Lavinsky heard some advice once that stuck to grow,” Lavinsky says.
Roeser also asks employees who attend a with him. Rather than thinking, “What if I Roeser agrees a company should foster an
professional development event to fill out a spend time and money training my environment where people want to stay, but
TPS report (jokingly named for the inane employees and they leave,” a good leader it also accepts that even if it does everything
reports in the movie Office Space) that should turn that around and think, “What if for the best, employees will inevitably come
includes whom the employee met and what I spend time and money on my employees and go.
they talked about. When an employee turns and they stay?”
a report in, he or she receives a poker chip, He acknowledges that employees could What’s the answer?
which can be cashed in at the end of the leave after they advance their skills, but the While helping employees develop personally
year for various rewards, such as time off, investment still is worth it for a company. and professionally takes time and money, it
the ability to go home early or come in late, “No great company has employees doing is worth it in the end, experts say. The new
parking passes and even money. mediocre jobs,” Lavinsky says. skill sets and confidence developed should
A company also can gain by appealing to However, companies can enhance the bring new ideas, efficiencies and revenue to
causes for which employees are passionate chance that employees won’t leave by a company. And companies needn’t worry
and encouraging their personal and implementing strategies to foster a work about employees taking those skills to a
professional development in those areas. For environment in which employees will want competitor—employees naturally come and
example, Roeser says, he encourages his to stay. Employees generally look at four go, but more will be apt to stay if they are
employees to join a philanthropic cause. things when deciding whether to stay or provided with a desirable work environment
“There is no shortage of nonprofits to leave a job: where they can grow professionally.
adopt,” he says. “Each person was able to • Am I paid well or fairly? “Owners, executives and employees
evaluate those nonprofits on their own • Do I have job fulfillment? should get out at least once a week and
criteria and then tell me the group they • Am I learning and improving so I will be participate in some sort of professional
wanted to help. It wasn’t a mandate, but more valuable in the future? development,” Roeser says. “How else will
most of the employees decided to become • Am I progressing toward a goal or people know you? People don’t hire
involved. And when it came down to it, making achievements? businesses; they hire people … and the way
there’s no better personal or professional A company needs to address all of these they’re going to get to know and eventually
growth than serving your community. You criteria but not necessarily satisfy each one hire that person is by meeting them in a
learn a lot.” 100 percent, Lavinsky says. “An employer professional development situation.” LE
LEADING EDGE 15

16. Business in China
Correctly
written scope
of business
can attract
tax, customs
treatment
benefits
BY CHRIS DEVONSHIRE-ELLIS,
DEZAN SHIRA ASSOCIATES
E
stablishing a business in China
does not necessarily mean you can
engage in any kind of business
activity, as is the case in most
Western countries. Companies can
operate only within a business scope
approved by the registration and licensing
authorities, and if you breach these, your
company can either be fined or, in serious
cases, have its license withdrawn.
Accordingly, it is vital to determine what you
want to do right from the start.
Generally speaking, “normal” business
activities are fairly easily defined in China
and you’re unlikely to find problems.
However, certain activities are linked to an will not even necessarily qualify you as a this is why there is usually a link between the
increase in the registered capital production company in the eyes of China’s scope of business and finance. In fact, the
requirements, and even to the specific regulations, even though it suggests you are. most common challenge to dubious scopes of
qualifications and numbers of employees you This is because registering a business in China business generally comes from the local
have. In certain fields, the business itself must involves several government departments. A Chinese tax bureau. If they are not satisfied
prove that it has the required professional clerk who doesn’t spot a cheeky scope of with the scope of business written on your
experience prior to a business scope being business, and issues the license anyway, doesn’t new business license, they can refuse to
granted in the desired industry. mean you are home free. Indeed, we have process your tax registration—a vitally
The scope of business must in fact be well encountered numerous problems of this important document when going through the
defined, and leave no large room for nature, all requiring a scope of business change complete licensing process in China—which
interpretation. Lazy, or deliberately on the license. The issue here is that businesses will leave you hanging, unable to operate.
disingenuous, business scopes—such as only involved in manufacturing require different tax The tax bureaus in China are often far
using the phrase “production of (product)”— treatments than, say, a consulting business, and sharper and pay greater attention to the
16 SPRING 2012

17. implications of your scope of business than scope of business can improve, which is The lessons for writing a scope of business
the business license issuing departments. You obviously good news. An example is the in China are simple: Be honest and be
do need to satisfy the tax bureau’s inspection, recent announcement by Chinese customs accurate. It is advisable to take professional
and this means ensuring your business scope that grants tax exemptions to foreign advice and use a firm with a strong China
is accurate. Attempts to fool the tax bureau investors in encouraged industries. Of course, presence that knows what it is doing. Its
into thinking you are one thing, while in fact this advantage needs to be applied for—and advice might not just help you write a good
you are another—even if you can get it past it too is cross-referenced with your scope of scope of business, but may help you obtain
the approvals process—will inevitably end in business on the business license, as well as other benefits that China often provides to
failure. Play the game the right way and say your tax bureau registration, to ensure your foreign investors in select areas or industries.
what it is you are really doing. If not, you are company qualifies. For instance, having the correct scope of
only saving up trouble for later. That said, businesses of course evolve and business not only clears away uncertainties,
Writing your scope of business in China mature, and at a later stage you may wish to but may also help you obtain better tax and
usually requires assistance from a professional increase your scope of business to include customs treatments. LE
firm familiar with China’s business laws and, other activities. Often, but not always, this can
for foreign investors, the “Foreign Investment mean an additional investment into the Dezan Shira Associates, a Leading Edge Alliance
Catalogue.” This document, which is usually business is required in terms of registered firm, specializes in foreign direct investment,
redrafted every four years, outlines exactly capital status; however, in all cases an providing business advisory, tax, accounting, payroll
what investors in China may and may not do, application to amend the business license can and due diligence services to multinationals
which areas require additional licenses or be made with your original licensing investing in China, Hong Kong, India, Singapore and
permission, and the circumstances surrounding authorities. The procedure involves Vietnam. Established in 1992, the firm is a leading
these. Accuracy is the watchword here. submission of the original license, redrafting regional practice in Asia with 20 offices in five
But attention to detail by your advisors isn’t of the desired scope, and proof of any jurisdictions, employing more than 170 business
just about ensuring your scope of business is additional requirements that may need to be advisory and tax professionals.
accurate. There can be positive aspects to this met. If completed properly, an enhanced scope
too, as in certain encouraged industries tax of business—and the license to go with it— To contact the firm please email china@dezshira.com
treatment towards companies in your defined can be issued within four to six weeks. or visit www.dezshira.com.
LEADING EDGE 17

18. on the bookshelf
SPRING READING: INNOVATION, FAIR PRAISE, RIGHT MANAGEMENT
T
his edition’s installment of “On the something goes wrong can create anger and 1977), is best known for his 1973 Small is
Bookshelf ” includes volumes that advise frustration, and cause workers to disengage and Beautiful: A Study of Economics as if People
on generating innovative ideas for your perform tasks with less enthusiasm. Further, it Mattered, a critique of Western economies that
organization; being fair when doling out praise can cause people to shut down and not speak proposes human-scale, decentralized
and criticism; and selecting the right their minds because they fear reprisals. The technologies as a path toward environmentally
management tools to get maximum value. authors offer compelling evidence that sustainable economic growth. In Small is
mismanaging the allocation of credit and Beautiful in the 21st Century, Diana
Beyond the Obvious: blame can destroy workplace morale, and they Schumacher, who is married to E.F.’s eldest
Killer Questions That provide advice on avoiding the blame-game son Christian, traces the economist’s legacy
Spark Game-Changing trap and dealing successfully with company through the activities of a number of like-
Innovation finger pointers and credit grabbers. minded organizations that have been
Phil McKinney established since his death. Schumacher has
Hyperion New Perspectives on worked for the British Council, the University
272 pages Asset Price Bubbles of Chicago School of Business Studies, and
McKinney, who most Douglas Evanoff, the New Economics Foundation.
recently served as vice president and chief George Kaufman and
technology officer for Hewlett-Packard’s A. G. Malliaris Beyond Performance
Personal Systems Group, writes that Oxford University Press Management: Why,
companies’ fortunes rise and fall on their ability 480 pages When, and How to
to generate ideas that produce the types of New Perspectives on Asset Use 40 Tools and Best
innovations customers will buy. To help Price Bubbles examines our understanding of Practices for Superior
companies generate groundbreaking ideas, asset bubbles in light of the global financial Business Performance
McKinney presents a series of “Killer crisis of 2007-09, a crisis caused in part by a Jeremy Hope and
Questions” designed to spur reevaluation of old sequence of repeated bubbles in the Nasdaq Steve Player
organizational beliefs to determine whether market, the housing market, the credit market Harvard Business Review Press
they still have value for the company. The and commodity markets. With the most 416 pages
author also provides a guide that explains in recent bubble effects in mind, the editors Countless management tools are available to
practical terms how to apply the ideas he sets review earlier conventional-thinking research help executives lead their companies, but
forth in the book, as well as a timeline and a that accepted that asset bubbles could be they often fall short of their potential.
set of rules to keep companies on schedule and managed with little or no real effect on Beyond Performance Management explains
on track. economy. They also examine research that why. The authors review several popular
challenged that thinking long before the management tools—e.g., mission statements,
The Blame Game: 2007-09 economic crisis. In the end, they balanced scorecards, rolling forecasts, key
How the Hidden summarize the lessons learned to create a performance indicators, Six Sigma, and
Rules of Credit and better understanding of the potential impact performance appraisals—and explain how to
Blame Determine Our of asset bubbles. select the right ones, how to implement
Success or Failure them correctly, and how to extract maximum
Ben Dattner with Small is Beautiful in value from each. Hope is co-founder of the
Darren Dahl the 21st Century: Beyond Budgeting Round Table (BBRT)
Free Press The Legacy of E. F. and has authored numerous books and
266 pages Schumacher articles on performance management,
In The Blame Game, Dattner and Dahl explore Diana Schumacher including Reinventing the CFO (2006).
how credit and blame are apportioned in the Green Books Player is the director of BBRT North
workplace. The act of unfairly impugning an 128 pages America and co-author of Future Ready
employee or a group of employees when The subject of this book, (2010). LE
British economist E.F. Schumacher (1911-
18 SPRING 2012

19. This firm and other members of the
Leading Edge Alliance are leaders in
many key markets, including:
The Leading Edge Alliance is an international professional
Alabama India Palestine
association of independently owned accounting and consulting firms.
Albania Indiana Panama
Afghanistan Indonesia Paraguay The Alliance enables member firms to access the resources of a
Argentina Iowa Paris multibillion dollar global professional services organization, providing
Atlanta Ireland Peru
Australia Israel Philadelphia business development, professional training and education, and peer-to-
Austria Italy Phoenix peer networking opportunities nationally and globally, around the corner
Azerbaijan Jordan Philippines
and around the world.
Bahrain Kansas Pittsburgh
Baltimore Kazakhstan Poland
Bangladesh Kenya Providence Members are quality firms who are very successful, have deep client
Belgium Knoxville Puerto Rico
Bolivia Korea Richmond relationships, and strong ties to the community. The Alliance provides
Boston Kuwait Reno members with an impressive combination: the comprehensive size and
Brazil Las Vegas Romania
scope of a large multinational company while offering their clients the
British Virgin Islands Latvia Russian Federation
Buffalo Lebanon San Francisco continuity, consistency and quality service of a local firm. Member firms
Bulgaria Lexington Saudi Arabia have access to extensive teams of business advisors – a peer-to-peer
Cayman Islands London Scotland
Chattanooga Los Angeles Seattle connection that provides the right business solutions for clients.
Chicago Luxembourg Senegal
Chile Macedonia Serbia
China Madison, WI Singapore
Cincinnati Malaysia Slovakia
Cleveland Malta Slovenia The Leading Edge offers:
Colombia Mauritius South Carolina
Croatia Memphis Spain
• Access to extensive teams of accounting professionals and business
Cyprus Mexico Sweden advisors—a peer-to-peer connection that provides the right solutions
Czech Republic Miami Switzerland
for clients.
Dallas Michigan Taiwan
Dayton Minneapolis/St. Paul Thailand • Innovative, practice-proven strategies for improving performance in
Denver Missouri Tokyo management, business processes, finance, operations, information
Dominican Republic Moldova Toronto
Ecuador Montenegro Tucson technology and marketing.
Egypt Montreal Tunisia • A leading knowledge resource for multi-disciplinary information and
El Salvador Morocco Turkey
industry-specific expertise responsive to clients’ unique needs.
Finland Nashville Ukraine
Fort Lauderdale Nebraska United Arab • The Alliance offers accounting, consulting and tax services through a
Ghana Netherlands Emirates global alliance of firms with over 18,323 professional staff, more than
Germany New Orleans Uganda
Greece New Jersey Uruguay 1,600 partners and over 23,518 staff in 455 offices.
Guatemala New York U.S. Virgin Islands • The Leading Edge Alliance offers global business advisory expertise
Harrisburg, PA New Zealand Venezuela
and experience with innovation, progressiveness and quality.
Hartford North Carolina Washington, D.C.
Hong Kong Norway Vietnam
Honolulu Orange County, CA Virginia/West Virginia
Houston Oregon
Hungary Pakistan To find out more about The Leading Edge Alliance, visit
www.LeadingEdgeAlliance.com or contact Karen Kehl-Rose,
Visit LeadingEdgeAlliance.com for a detailed listing of member firms. president, at +1 630.513.9814 or kkr@The-LEA.com.
LEADING EDGE 19

20. PRSRT STD
U S POSTAGE
PAID
WILLOUGHBY OH
Sikich LLP Corporate Office PERMIT NO 58
1415 W. Diehl Road, Suite 400
Naperville, IL 60563
(877) 279-1900
www.sikich.com
RETURN SERVICE REQUESTED