MARKETING MAGAZINE
Volume 2, Issue 1 January, 2001
The Association for Rehabilitation Marketing
This is the only e-zine devoted to marketing and sales professionals working in rehabilitation businesses. We hope to bring you informative articles & resources that will help you in your daily efforts.
The Association for Rehabilitation Marketing would like to take this opportunity to wish you a Happy & Healthy New Year
In this issue:
Business to Business Companies Go Online as a Matter of Survival
Bidding on Federal Small Business Set-Asides
ARM Notes - Important Conference Update
Web Sites of Interest
Please patronize our advertisers– this e-zine is paid for by them.
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* * * * * *
Toe Path Industries manufactures Floor Maintenance Pads, Utility Pads and Hand Pads. We offer wholesale and government pricing. For information contact Gina Proctor at 1-800-995-5068 or e-mail gina@schoarc.com . * * * * * * *Feature Article
Latest News from ActivMedia Research LLCB-TO-B COMPANIES GO ONLINE AS A MATTER OF SURVIVAL
Value Found in Relationship Building, Not Profitability
(
http://www.ActivMediaResearch.com) - reprinted with premissionMany B-to-B marketing executives who responded to ActivMedia's annual "Real Numbers Behind 'Net Profits" study are being forced to do business online as a
matter of survival. Two in five of online businesses today (43%)have experienced a downturn in business since the advent of the 'Net. Most of these are newcomers to the Internet; arriving in the past year or so. B-to-B firms that are online veterans are less likely to have seen a decrease in business, probably because they came online early in the e-business cycle. Notably, B-to-B e-businesses are much larger firms than those in other segments. This may be a contributing factor to their relatively slow adaptation to the Internet. VP of Information Services Chris Anne Wheeler sees, "The value of the Web is measured differently by every company. Some want profits while others are looking to cut expenses. Regardless of the strategy or purpose, the benefits to having a website continue to demonstrate that the digital age makes businesses stronger."Business-to-business (B-to-B) selling has always been about
developing relationships whether online or offline. B-to-B firms consider their web sites more as a means to communicate with customers than to sell directly to them. Many B-to-B sites do not attempt to sell either directly or indirectly from their sites. Instead, these businesses use their sites to provide information and support, and to help build personal relationships with their customers.33% of B-to-B sites market - but do not sell - products online
In general, profitability online is somewhat elusive for B-to-B
e-marketers. Only 32% are currently profitable, with another third expecting be profitable someday. The others do not expect to ever be profitable, or simply do not intend to generate a profit. The likelihood that a Web business will become profitable, however, increases dramatically with experience. Only one in ten B-to-B web sites that have been online one year or less are currently profitable while nearly five in ten of firms that have been online three years or longer are profitable. Most B-to-B web sites are established for a dual purpose - to both sell products and services, either directly or indirectly (98%), andto provide information (73%). The primary means for creating a sale for 77% of sites is by stimulating customers to make an offline contact. Most B-to-B sites also provide pre-sale support and purchasing information (62%) and generate leads for staff to follow-up (60%) as ways to make a sale through their website.FURTHER INFORMATION:
Article 2
Bidding on Federal Small Business Set-Asides
by Steve Susman
We’ve heard it over & over– "Not-for-profits cannot bid directly on federal small business set-aside contracts". Well there is a way. A not-for-profit agency can form a for-profit subsidiary and that entity can bid on these contracts.
There are a number of agencies that have such for-profit subsidiaries. They pay taxes, just like any other for-profit. They have to follow all the rules that for-profit businesses do. And, yes, they can bid on small business set-asides.
According to Theresa Nixon of the Small Business Administration, "Non-profit businesses are not eligible. However, if the subsidiary is a for-profit business and it falls within the size standards guidelines, it would be eligible to participate in federal contracting." Most of us do fall within the size standards on these contracts.
In terms of how to structure this, the first step would be to contact the agency’s lawyer and accounting firm for guidance. I can give you one agency’s experience. Daniel E. Stern, Executive Director of the Jefferson Rehabilitation Center in Watertown, New York describes his situation in response to some questions I posed. "As you can imagine it is quite complicated. I might raise more questions in your mind while answering a few. ...We went for and received an IRS opinion letter at the outset. That is to articulate the formulation & sole ownership of the for-profit by the NFP (not-for-profit), and for what purpose, while not placing the NFP in jeopardy do to the "unrelated income". That is hard to fix after the fact, and could, at worst, put the 501C(3) status at risk". He goes on to say, "In some cases, i.e. a janitorial contract, our consumers work side by side with the FP (for-profit) employees that are training and supervising them, yet we pay the wage. If someone is employed by the FP then they are out of our training program and for all intents and purposes they are competitively employed. The FP has separate management, offices etc. The only money that flows back to the stockholders (the NFP) is in the form of dividends. If ANY money flows to support the FP, it is in the form of market rate loans, with written loan agreements and monthly payments. The IRS says there must be arm length, so there is. Of course OMR/DD, et al, still considers them related entities, which also effects how the two do business".
He structured his for profit to have"... a complete(ly) separate management structure including the CEO and board, ( I am the President) but the other members are community members unrelated to the NFP. The For Profit runs and owns; a restaurant, a convenience store and gas station, a super market, and a janitorial service. We had a bike shop but sold it; too much competition and little training opportunity. The super market is in Sackets Harbor, a small resort community, and is the largest in volume, about $1.3 million".
I’m sure there are other ways to structure this while staying within the IRS guidelines and there are a number of other agencies that also have for-profit business subsidiaries.
This opens up not only a new door to government contracting but also a competitive placement for your consumers (which is under your control). From my own experience, I can say with certainty, that the model of consumers working along side non-disabled really works. When we integrated our workforce at one place I worked, the consumers’ productivity jumped 30% in the first year.
This can be a model to investigate (and to try) if it makes sense for your agency.
ARM Notes
:ARM Conference Update: Due to a conflict with a New York State Purchasing Conference, our conference has been moved to June 4th, 5th, & 6th . It’s shaping up to be one of our best conferences yet. Besides a presentation from Federal Wage & Hour, the following topics will be covered: "Selling without a Sales Force"; "Partnering with a Private Business"; "Electronic Purchasing, Funds Transfer and Procurement"; "B2B and email marketing"; "Customer Service", and more.
Remember to submit job postings, equipment for sale, trade or to buy to the ARM web site for a free listing. E-mail them to
info@nysarm.org .info@nysarm.org for the complete advertising price schedule. Also try to keep your listing on our site up to date.The ARM web site is viewed by thousands of prospective customers for your products and services. Think about placing an ad on our site or in this publication. It’s only $200 per year plus a one time design charge. Send email to
Please feel free to join our on line discussion group. Some of the topics in our archives are "Forming a for-profit subsidiary"; "Models for Affirmative Businesses" and more. If you aren’t a member of the discussion group you can join by going to ARM’s website (
www.nysarm.org ) & clicking on the appropriate link on our home page.Web Sites of Interest
- The American Marketing Association. They have current marketing news and other features. http://www.marketitright.com/ Free help in completing your marketing plans simply & effectively. http://www.mhhe.com/business/marketing/marketplace/news/news.mhtml Marketing News from McGraw-Hill (Business Week and Current events). http://home.flash.net/~abana/ The Affirmative Business Alliance of North America http://researchindex.techrepublic.com/ Free Market & Business Research on a wide range of topics.Advertisement