Summer 2014
taking a chance on
entrepreneurs Cincinnati’s established business community fosters technology startups
breaking down Acceptd’s Success
focus on Corporate Wellness
getting to know Marie Brilmyer
going for gold
www.SSandG.com 800-869-1834 info@SSandG.com
What starts here changes the world I was recently playing golf with a good friend of mine, and we were discussing what motivates today’s young professionals and future leaders to take action and change the world. My friend mentioned Adm. William McRaven’s commencement speech to the class of 2014 at the University of Texas and recommended I look it up. The university’s slogan is, “What starts here changes the world.” In his address, which has been featured in numerous national publications, including The Wall Street Journal, McRaven talks about how change can really happen anywhere. If you have a positive impact on the lives of just a few people
AKRON 301 Springside Drive Akron, OH 44333
CHICAGO 225 West Illinois St., Suite 300 Chicago, IL 60654
CINCINNATI 11500 Northlake Drive, Suite 210 Cincinnati, OH 45249
CLEVELAND 32125 Solon Road Cleveland, OH 44139
COLUMBUS 300 Spruce St., Suite 250 Columbus, OH 43215
around you, and they return the favor to people around them, pretty soon the entire
DES PLAINES
world will be a better place. The idea of changing the world may seem daunting, but
1665 Elk Blvd. Des Plaines, IL 60016
anyone can decide to do it So, where do you start? According to McRaven, you start by making your bed. “If you make your bed every morning, you will have accomplished the first task of the day,” he said. “It will give you a small sense of pride, and it will encourage you to do another task, and another, and another, and by the end of the day, that one task completed will have turned into many tasks completed.” During his powerful speech, McRaven points out that making your bed reinforces the fact that the little things in life matter. If you can’t get little things like making your bed right, how can you expect to get the big things right? Suddenly, the morning chore our mothers always pestered us about has taken on significantly greater meaning. It isn’t just making the bed — it is the first small victory of the day, the first step toward accomplishing whatever goal or dream you have set for yourself. And that one simple task can sometimes make all the difference during rough times. “If, by chance, you have a miserable day, you will come home to a bed that is made — that you made — and a made bed gives you encouragement that tomorrow will be better.” He couldn’t be more right with his analogy. As business leaders, we can’t be afraid to rock the boat and do things differently. Sometimes this means success. Sometimes this means we have miserable days when our ideas don’t pan out. But with just a little bit of encouragement, we have to pick ourselves up and trust in our ability to do good and change the world.
DOWNTOWN CLEVELAND 1422 Euclid Ave., Ste 1500 Cleveland, OH 44115
ERLANGER 3940 Olympic Blvd., Suite 340 Erlanger, KY 41018
NEW YORK CITY 950 Third Avenue, 24th Floor New York, NY 10022
SKOKIE 8707 Skokie Blvd., Suite 400 Skokie, IL 60077
SS&G HEALTHCARE SERVICES 275 Springside Drive Akron, OH 44333 800-288-2818
SS&G PARKLAND 32125 Solon Road Cleveland, OH 44139 800-869-1834
SS&G WEALTH MANAGEMENT
I encourage you all to read or listen to McRaven’s entire speech. Other than making your bed, he gives nine other tips on how to change the world based on his experience at basic Navy SEAL training and years of military experience. His words of wisdom and sound advice are not something you will soon forget.
275 Springside Drive Akron, OH 44333 800-871-0985
PAYTIME INTEGRATED PAYROLL SOLUTIONS 31105 Bainbridge Road Cleveland, OH 44139 800-579-9529 Send letters to the editor and story ideas to Solutions@SSandG.com.
Mark Goldfarb, CPA Senior Managing Director
SS&G is a founding member of LEA Global, an international
2
ss&g solutions
summer 2014
professional association of independently owned accounting and consulting firms.
first person Marie Brilmyer Title: Director, Assurance Services Degree(s)/College(s): Bachelor of Science in accounting — Case Western Reserve University, master’s of accounting — The Ohio State University Hometown: Bedford, Ohio Year I joined SS&G: 2002
When I was growing up, I wanted to be: A writer. I loved to read and would write reports on all of the books I took out of the library. To this day, my older sisters still tease me about it. My first job: A softball umpire. The word that best describes me: Zealous. When I have it in my head that I need or want to get something done, it gets done. The best part about my job: The people I work with every day. I have never worked at another firm, but I imagine the work itself is the same. It is the people that make all the difference. My business philosophy: It doesn’t matter where you work, what your job is, or how much you earn. Your work ethic should always remain the same. The people I admire most: My grandfather. He is the most unselfish person I know. My greatest achievement so far in life: I have three — my children. They are all happy and healthy, and I constantly remind myself how lucky we are. At least once in their lives, I think everyone should: Travel abroad to a nonresort area. I was fortunate to experience different cultures when I was younger, all of which were very different from the American way of life. I greatly appreciate all the opportunities I’ve been afforded in my life.
If I weren’t doing this, I would: Be a copy editor. I love to read anything and everything. My favorite movie: The Princess Bride. It has now grown on my kids, as well. My next personal goal is: To talk with my out-of-town family more. It is tough to plan visits, as they mostly live on the West Coast, but I know I can try to call, Facetime, or Skype with them more often. My favorite place in the world is: Right here. There are many family-friendly things to do in town, and so much to experience in the way of nature, history and the arts. We enjoy vacations and time away but are always excited to come back home to our quiet neighborhood. When I get discouraged, I: Talk about it. It makes me feel obligated to try again or make a change, whatever the case may be. My attitude toward change is: A little goes a long way. I am always changing around our furniture and shower curtains. For a few days, it’s a totally different house. Success is: Reaching small goals or milestones. On the road toward a lofty goal, I don’t think people give themselves enough credit for achieving the little steps along the way. j
One thing people might find surprising about me is: I sew pretty well. I took fashion design in high school and made clothes that my friends would actually wear. Last year, my daughter and I took a sewing class together, and the teacher said I was a natural.
summer 2014
ss&g solutions
3
industry Gaining acceptance Turning an innovative idea into a business
F
or high school students, the excitement and anticipation of going off to college are matched only by the equal amounts of dread and frustration that come with filling out applications. Schools, scholarships, specialized programs — they all require forms and essays and examples of your work, and it can quickly become a very expensive and time-consuming process. Especially for students interested in pursuing performance and visual arts, the costs related to putting together audition tapes and portfolios, and traveling to visit schools can be overwhelming. Derek Brown and Don Hunter saw all of this as a flaw in the admissions process and set about creating a solution. The creative-minded entrepreneurs and University of Cincinnati graduates had both benefited from scholarships and wanted other students to have similar opportunities. Noticing that voluntary video submissions were often accompanying many college applications, they had an idea — create an online, digital platform that allows students to apply to top-choice programs without the expense of traveling or filling out multiple applications. Acceptd, as they decided to call it, would be open to all sorts of applicants beyond just creative arts majors. “We wanted to be everything video to everybody in the college admissions process,” says Hunter, the company’s president. “We talked to sports programs, business programs, general admissions, scholarships — we were going to do any sort of video for all of them.”
“One of the keys to success is learning from clients to produce what the marketplace needs, rather than pushing products on a client base that may not be interested.” — Don Hunter
4
ss&g solutions
summer 2014
While talking with colleges to gauge interest in such a program, Hunter and Brown, the company’s CEO, met with advisers from TechColumbus, a local resource for entrepreneurs, to create a business plan and define their target market. They also enrolled in 10Xelerator, a 10-week investment program during which tech startups build and launch a business. On the last day of 10Xelerator, in September 2011, Acceptd launched its pilot program with University of Cincinnati and Otterbein University as the first test subjects. Instead of the all-in-one solution they first envisioned, Hunter and Brown fine-tuned Acceptd to be an online application platform specific to the performing arts. “The 10Xelerator and TechColumbus advisers helped us home in and identify the need to be specific in our target, to focus on one niche,” says Hunter. “We expanded within that by listening to the needs of the market. One of the keys to success is learning from clients to produce what the marketplace needs, rather than pushing products on a client base that may not be interested.” From three clients its first year, Acceptd grew to more than 100 clients the second year, including The Julliard School and New York University. Beyond higher education, Acceptd now connects applicants to art competitions, festivals, and camps, not just through video submissions but also by general applications and recruitment. Today, Acceptd manages applications for 500 clients in 12 countries, with a 96 percent retention rate. That rapid rate of growth has required funding to build out a team of 12 full-time and six seasonal employees. Acceptd received funding from NCT Ventures through the 10Xelerator program, and preseed funding through TechColumbus. Learning how to plan and manage business finances was key, and Brown and Hunter relied on SS&G to gain an understanding of their pro forma, operating expenses, and overhead, knowledge that served them well in front of investors.
“You need to show that you’ve thought through your financials very logically so investors can see what kind of return to expect,” Hunter says. “Having a plan of how much money you need and how you’ll spend it gives a lot of confidence to investors. You need to always be very disciplined in how you allocate those resources.” To develop everything from financial statements to business plans, down to the technology features that comprise Acceptd’s platform, Brown and Hunter found success by heeding valuable input from partners and clients. “The key to our success has been surrounding ourselves with good advisers and mentors, being coachable, taking feedback from them, and also listening to customers — not assuming we have the right answers, but listening to their pain points and then building a process that serves those needs.” j For more information: www.getacceptd.com
summer 2014
ss&g solutions
5
case study
6
ss&g solutions
î Ş
summer 2014
Taking a chance on
entrepreneurs Cincinnati’s established business community fosters technology startups
A
Photos: Mike Lyons and Cintrifuse
few years ago, a council of Cincinnati’s top CEOs — from companies such as Procter & Gamble, Kroger, and Duke Energy — rallied together to coordinate an entrepreneurial hub in the city. In July 2012, their collaboration became Cintrifuse, a startup accelerator and venture capital fund of funds focused on attracting businesses to Cincinnati. “They were looking for a way to spur more startup growth and add more business diversity to the region,” says Tim Schigel, the former director of Blue Chip Venture Co. who now manages the Cintrifuse fund of funds. “Cincinnati has a lot of great assets, but the issue was that they hadn’t been coordinated. There was no master plan to tie together incubators, funding sources, and service providers for startups, so Cintrifuse became that coordinator.” What makes the nonprofit successful is how it began — not driven by government, but by the local business community. The support of experienced executives is foundational to fostering startups and Cincinnati, with more Fortune 50 companies per capita than any other city, is packed with the experience to guide the next generation of entrepreneurs. “Having corporations directly involved and having their mindshare was probably the biggest piece,” says Schigel, noting that the founding CEOs don’t just offer investment dollars but also advice, feedback, and mentoring for entrepreneurs. “It’s created a lot of buy-in to the process and enabled CEOs to advocate for entrepreneurs.” There is a long list of services that Cintrifuse offers, including free mentoring and advising for entrepreneurs, and a regional job board to help startups recruit talent, and it will also soon offer shared office space. A total of 38,000 square feet spread across three buildings will open in the city’s historical district next year to house startups with up to 10 employees. The space will be shared with angel investment firm CincyTech and The Brandery, which was named one of the top 10 incubators in the country.
summer 2014
ss&g solutions
7
later moved its headquarters from Cincinnati to Silicon Valley. Schigel stepped down as CEO in August 2011, but remains chairman. With both tech startup and venture capital experience, Schigel can fully empathize with the challenges of launching a business. “The challenges are still the same: finding talented people who want to take a risk with startups, and then finding investors,” he says. “The benefits that you have now are that the barriers of location have been coming down. Silicon Valley played a huge role in building the infrastructure of the Internet, but now, with the cloud, people can do development anywhere. There are so many tools now like Kickstarter to help you get businesses off the ground, but the real challenge is building it from there. To build it from there, you need a lot more talent and savvy investors.” The fund of funds Cintrifuse developed serves to Entrepreneurs need to connect with the right draw attention and activity to Cincinnati by connecting employees, mentors, and investors to be successful, and entrepreneurs with capital. Operated by a wholly owned a strong network of support can be the power that brings subsidiary underneath Cintrifuse’s nonprofit umbrella, an innovative idea to life. Cities such as Cincinnati, the for-profit fund of funds has raised nearly $60 million where the local business community is collaborating to to date. orchestrate this support, can be incredibly conducive to The fund of funds does not invest directly in startups; startups, and entrepreneurs who visit from the coasts instead, it invests in venture capital funds around the and other countries can feel the difference. country with track records of high growth in fields such “We’ve had a number of entrepreneurs move here as technology, energy, and consumer goods. Cintrifuse from other cities, and they’ve said the support is off the introduces funds to Cincinnati’s startup and investor charts,” Schigel says. “They find a lot of people who are communities to increase the region’s flow of funding, willing and want to help. They’re happy to sit down, but it doesn’t require funds to invest in local have coffee, make introductions to investors or startups. Believed to be the largest privately customers, and help put mentors together. funded, first-time regional fund of funds It’s a very receptive community for “One of our in the country, Cintrifuse is modeled entrepreneurs, and entrepreneurs really messages is that after Michigan’s Renaissance Venture see it.” entrepreneurs need Capital Fund, which reported a local That level of support doesn’t advocates... Cincinnati return of $15 for every $1 invested. happen in isolation. It takes an entire has to take a chance on By connecting entrepreneurs to community of business owners, entrepreneurs.” the resources they need to succeed, investors, customers, and advisers — Tim Schigel, manager, Cintrifuse is fostering an environment who are “rowing their oars in the Cintrifuse fund that helps Cincinnati compete same direction, singing the same of funds globally for innovative startups. The song,” Schigel says. That, in itself, is rare region’s entrepreneurial ecosystem has a and difficult to activate if it doesn’t come deep-seated history of successful businesses, naturally. and Schigel says it’s as vibrant today as ever. “Other cities ask me, ‘How do you get all these “It has never been as good and as active as it is now,” corporations to invest and support?’” he says. “I answer, says Schigel. “There are a lot of resources, and they’re ‘It was easy. I didn’t. They created it. They came together growing by the day. There’s also a sense of excitement collectively and focused on solving this problem.’ and momentum that even the corporations — those that It’s very unique to see that happen anywhere, and it aren’t startups — are excited by. One of our messages happened here. That’s been a catalyst for everything else.” is that entrepreneurs need advocates. It’s a hard, lonely job, and we can’t ask entrepreneurs to take a chance Opportunities to innovate on Cincinnati; Cincinnati has to take the chance on Being in a region rich with resources helps, as entrepreneurs.” well. Home to the world’s No. 1 consumer packaged
Supporting entrepreneurs Schigel understands the plight of the entrepreneur quite well. In 2007, he founded ShareThis, which became the world’s largest web sharing widget. The company
8
ss&g solutions
summer 2014
goods company, No. 1 grocery store, No. 1 department store, one of the top children’s research hospitals, and several major universities, Cincinnati is brimming with executives and customers and the ancillary services to fuel them.
Schigel estimates that about 60,000 consumer brand research professionals work in Cincinnati. “You have a city full of people who understand how to understand consumers,” he says. “Whether you’re applying that to marketing your products or to health care compliance, we’ve got the richest community of consumer behavior people on the planet. That’s a source of skills for startups.” In fact, Schigel says that a lot of Cincinnati’s startups are capitalizing on the potential to support the city’s existing businesses, whether by providing information technology services or marketing the big data that corporations produce. For example, large corporations often have large IT budgets. Thanks in part to major health care, telecom and insurance companies with complex technology requirements, Cincinnati has an annual IT spend of about $6 billion. For IT startups, the potential is huge. Schigel cites dunnhumby as a local success story born from Cincinnati’s big data. Partially owned by Kroger and Tesco, dunnhumby is a customer science company that analyzes point-of-sale data for consumer packaged goods to help them understand and meet customer needs. In the last 10 years, he says, the agency has grown from just a few people to more than 600 local employees. Another company, Market6, saw opportunity in Kroger’s data and developed predictive analytic Software-as-a-Service to optimize retail operations for consumer packaged goods. “If you’re doing anything in the supply chain with data, this is a great place to do it,” Schigel says. “The other major trend is there’s a lot of mobile interest here from big companies. So if you’re doing anything related to mobile commerce, you should be here.” An example is Dónde, a startup that developed a mobile store locator. Although the CEO hails from Vancouver, he rooted the company in Cincinnati after incubation in The Brandery. “He stayed here because of all the connections he was able to make and all the help he was able to get,” Schigel says. “One of the venture funds in our network funded them, so it showed the whole model working.” Similar success stories are happening throughout the region. As Schigel travels through the Midwest, he sees a lot of commonality. Technology innovation is moving inward from the coasts as the once Californiabased infrastructure moves to the cloud, mobilizing entrepreneurs everywhere. Still, he hasn’t seen anything on the scale of Cintrifuse’s coordinated effort. People from Cleveland, Nashville, Pittsburgh, Charlotte, and St. Louis are still asking how to get the corporate alignment necessary to spark a hotbed of entrepreneurship and innovation. “The Cintrifuse model has become a magnet,” Schigel says. “The model is a way to operationalize the community, so we’ve been able to activate the whole community in a way that just hasn’t happened in other places.” j
Funding tips for startups Nearly 200 funds have met with Tim Schigel, to explore opportunities with Cincinnati’s investors and entrepreneurs. Of those, Cintrifuse has only invested in a strategic few. “We’re trying to find venture firms that have a natural affinity for the types of businesses that we have here,” he says. “When we look at VC firms to invest in, what we’re looking for are company builders. You might think all VCs are company builders, but they’re not. Some add more value than others in terms of how they help startups.” Schigel offers these tips to help entrepreneurs find solid sources of funding. a lot of feedback. “Have your friends, mentors, parents, and grandparents read your business plan. Let people shoot it full of holes; you’ll learn something every time you go through it. Some people think only the people who understand their business should read their business plan, but that’s not true. If it doesn’t make sense to the average person, it’s not going to make sense to the investor.”
Get
Do
your homework. “Money isn’t the same wherever you go, so find out who invested in companies you admire or companies that are similar to yours. Find investors that understand your market and go after those investors. Don’t just blindly call any investor.”
Talk
with investors before you need to raise the money. “VCs love it when an entrepreneur comes to them for feedback first. If you have a chance to give them updates along the way and they see that you take the feedback and you’re making progress, that sets you up nicely for funding.”
Contact Cintrifuse: (513) 246-2700 or www.cintrifuse.com
summer 2014
ss&g solutions
9
focus on Return on performance
The real benefit of corporate wellness programs
T
here is no denying the correlation between healthy employees and productive employees. Research has shown time and time again that people who are happy, healthy, and well rested will perform better at work. With this knowledge in mind, more and more companies are looking at corporate wellness programs as a way to increase overall business performance. “Around 80 percent of a workforce is inactive,” says Blake Squires, founder and CEO of MOVABLE, a Cleveland- based company that focuses on providing simple, engaging ways to keep people moving. “The average employee costs an employer $8,800 a year in health care costs, and research has attributed 15 percent of that to inactivity. Employers are realizing that being unhealthy costs them and the employee, so they need to implement programs to fix that. “ While effective corporate wellness programs can directly impact productivity by reducing stress and the number of sick days, most programs average less than 40 percent engagement, says Squires. MOVABLE’s program, which is designed to be “simple, social, and fun,” has engagement rates up to 70 percent. And the higher the participation rate, the higher the returns. “Rather than measuring ROI in terms of dollars and cents, employers are asking first, ‘How do I engage my population?’” Squires says. “Measure that, because you need to implement programs that people are actually
10
ss&g solutions
summer 2014
getting involved in. You could measure ROI as return on performance.” By focusing on participation, ROI becomes more of a correlation than an equation. Costs associated with increasing productivity aren’t easy to measure. However, it is possible — the 2012 Aflac WorkForces Report concluded that wellness programs reduce sick days an average of 28 percent, health costs by 26 percent, and workers’ compensation and disability claims by 30 percent, for an average savings-to-cost ratio of nearly $6 to $1. Still, for many companies, the culture, camaraderie, and personal progress stories are sufficient to justify investments. Any financial perks are merely side effects of a healthier workforce. A few years ago, SS&G began to offset the cost of rising deductibles by offering wellness credits to employees who passed certain health checks. Still, cost savings weren’t the driving force behind the creation of SS&G’s official corporate wellness program, which includes a 12-week MOVchallenge through MOVABLE. “SS&G got into wellness because we were looking at productivity,” says HR Director Rebecca Osborne. “Accountants work a lot of hours during busy season, so everybody’s looking for more energy. It was more about employees than it was about cost savings. We don’t measure ROI because we know the program is such a benefit to the health and well-being of our employees.” Whether measuring ROI or not, smart implementation can maximize the impact of any wellness program. “Pick something affordable so you’re not putting so much pressure on yourself to get specific ROIs,” Squires says, noting that MOVABLE’s cost is $40 per employee. “Start simple because the first step is engagement.” Also, make sure your program offers accurate participation data in case you do need to measure ROI. Whether companies trace the impact to a dollar amount or just observe the change anecdotally, wellness programs pay off. “We’ve had CEOs say, ‘My employee base is performing better, and it’s affecting the bottom line,’” Squires says. “It wasn’t in dollars and cents; it wasn’t in percentages. It was this overall notion, this direct correlation, that employees are getting more active and performing better. Those are hard things to measure, but it happens.” Contact MOVABLE: www.movable.com or (440) 746-1234 j
the last word
with Bob Littman
Combatting complacency
B
eing comfortable is a wonderful feeling. During the hot, sticky summer months, being comfortable can mean sipping a cool drink or relaxing by the pool. If you are talking about life, being comfortable with who you are is a good thing, too. But in the world of business, too often being comfortable means being complacent — which is something no entrepreneur or leader can afford to be. Complacency is dangerous. It is detrimental to innovation and kills creativity. When you are complacent and content with your business or your career, you are no longer striving to do your best or looking at how you can improve. Today’s world is very competitive, and if you reach the point of success and become complacent, you will quickly be passed up by someone who is more driven. To combat complacency, you must never settle. With the world changing as quickly as it does, never forget how hard you’ve worked to get to the top, and never stop fighting to be the best. If you have a product or service that your customers and clients love, that’s great. Now how can you make it even better? Challenge yourself every day to look for ways to innovate and reinvent. Focus on continuous improvement, and make it an ongoing process in your day-to-day life.
“With the world changing as quickly as it does, never forget how hard you’ve worked to get to the top, and never stop fighting to be the best.”
At SS&G, we didn’t stop with just being the best at accounting and tax work. We’ve added services, affiliates, and niches to make sure we can meet all of our clients’ needs and become trusted advisers. Our professionals are also constantly taking advantage of opportunities to stay on top, such as enrolling in our leadership academy or internship program to get a better taste of all the different services SS&G offers. The most dangerous sentence in the English language is, “We’ve always done it that way.” We hope you can eradicate those words and that way of thinking from your office. j
summer 2014
ss&g solutions
11
PRSRT STD U S POSTAGE PAID CLEVELAND, OH PERMIT NO 1940
32125 Solon Rd. Cleveland, OH 44139
top
We haven’t peaked yet. It takes a lot to be the best. At SS&G we strive to consistently provide not only highquality services for our clients, but also the ideal work environment for our employees. SS&G professionals are some of the most dedicated in the industry, and we are proud that they have voted the firm one of the Best Employers in Ohio* for nine consecutive years. We couldn’t provide superior service and solutions without the finest people. Discover what makes us different at SSandG.com/words. *Ohio SHRM State Council