Enter Expense Reduction Consulting (ERC), a four-year-old Boca Raton consulting firm aimed at helping small businesses cut costs for a wide variety of products and services. In the telecommunications area, ERC reviews local and long-distance bills and analyzes the configuration of the telephone network. There may be blatant errors, such as charges for telephone lines no longer in use, or more subtle problems of inefficient bundling of telephone lines. ERC, like similar telephone and expense audit companies, works on contingency, charging nothing up front but collecting 50% of any savings for two years.
By analyzing Signal's long-distance and local set-up and fees for its three offices, in Fort Lauderdale, Miami and West Palm Beach, ERC saved the company a total of $700 a month. Long-distance costs are down $300, with the per-minute cost reduced to 9 cents from 11 cents, and Signal didn't have to switch from its service provider, Biztel. "My goal is to recommend staying with the same vendor," says ERC President Victor Ronder. "I try not to recommend switching."
For local telephone service, deregulated two years ago by the Florida Legislature, ERC did find a better deal for Signal with an alternative local provider. At the Fort Lauderdale office, Ronder negotiated $400 in monthly savings with MCI, which is aggressively courting local business away from BellSouth. "I'm hoping BellSouth will reduce their pricing rather than me having to switch," says Signal President Franklin.
A company should audit telephone bills first and switch, if necessary, after bringing errors to the attention of the original company, says Bobra Bush, founder and president of Telcom Corp., a Boca Raton telephone audit company that focuses on large clients, such as Broward County, Alamo Rent-A-Car and Florida Power & Light, with 50 or more telephone lines. "I caution any company on moving from an existing carrier," says Bush. "There's no incentive to provide refunds to former customers."
TIPS AND TRENDS
Check Your Phone Bill
While detailed line items on telephone bills can be very confusing, business owners should check their phone bills for some common, yet costly, problems, according to Bobra Bush, president of Boca Raton's Telcom Corp.
High phone rates
Calculate your per-minute phone rate for cellular, local toll calls and long distance. You should be able to get long-distance rates for no more than 12 cents a minute and cellular for 20 cents, says Bush. She adds, "Prices are dropping like bricks."
Employee abuse
Review any collect calls and look over the bill for high-cost "900" and "976" calls typically used for contests and astrology services. Have the long-distance company assign individual employee codes that must be used to make long-distance calls.
Telephone inefficiencies
Identify fax/modem lines that are used infrequently and analyze whether you are using special features, such as call waiting.
Tax exemption
If your company is exempt from the 3% federal excise tax, make sure the tax doesn't appear on the bill. When you switch telephone carriers, be sure to send your tax exemption certificate to the new company.
Obvious phone bill errors
Look for typos such as different billing rates for telephone lines set up with the same service. Make sure telephone numbers are accurate and that the number of lines you are charged for is correct.
MEETINGS
Scouting For Investors
On March 2-3, 1998, the fourth annual North Florida Venture Capital Forum will offer 12 north Florida businesses the opportunity to speak directly to potential investors. Hosted by Enterprise North Florida, the North Florida Technology Innovation Corp. of Gainesville, Florida North Shore Technology Centers in Tallahassee and the First Coast Venture Capital Group, the meeting also will provide the opportunity for other entrepreneurs to mingle informally with venture capitalists, investment firm principals and private investors.
The program, which consists of the 12 presentations, a trade show, two afternoon seminars, and breakfast and lunch sessions, will be held at the Jacksonville Hilton. Registration before Feb. 15, $180; after, $200. Call 904/987-5980 for more information.
DEVELOPMENT CENTERS
Changes At The Helm
Two Florida Small Business Development Centers (SBDCs) recently named new leaders. At the University of West Florida in Pensacola, Larry Strain takes over as director from interim director Martha Cobb. Prior to his appointment, Strain spent nine years as director of the SBDC at Lehigh University in Bethlehem, Pa. Cobb will continue as SBDC manager for Escambia and Santa Rosa counties.
In Tampa, at the University of South Florida, Irene J. Hurst was formally named SBDC director. Hurst, who joined the SBDC as a management consultant nine years ago, has been interim director since December 1996. She has a master's of business administration from USF and serves on the board of directors for the National Minority Suppliers Development Council of Florida.
RESOURCES
Minute By Minute Savings
Guides
How to Choose a Long Distance Carrier; How to Choose a Local Toll Company; Slamming: the Problem, the Protections, the Solutions. These pamphlets are available from the Florida Public Service Commission, 2540 Shumard Oak Blvd., Tallahassee 32399-0865; 800/342-3552. The "Slamming" pamphlet may be downloaded from the Internet (www.scri.net/psc).
Making the Best Call. A 1997 U.S. government publication that gives information on comparing local and long-distance telephone service.The eight-page report is available on the Web (www.pueblo.gsa.gov/misc.htm) or order publication 637D from the Consumer Information Center, Dept. WWW, Pueblo, Colorado 81009.
Business Consumer Guide's Long Distance Service Report. Designed to help businesses choose a long-distance service provider, this 13-page report includes a direct comparison of 40 programs from 11 major carriers. There are recommendations on the best programs to use depending on call volume and calling patterns, as well as negotiation tips and details of real world pricing for businesses that use anywhere from 100 to 50,000 minutes per month. Published May 1997, costs $25 including shipping and handling. Call 617/924-0044.
Buyers Laboratory's Long-Distance Services: Hidden Costs and Secrets to Savings. This 20-page report includes an overview of the types of long-distance vendors and their rates. Also, the report looks at ways to circumvent high international calling rates, how to avoid high hotel telephone surcharges and how to take advantage of competition in 800 numbers. Published January 1996, $35 plus $3 shipping and handling. Call 201/488-0404.
Software
Telecompare - SOHO, Telecompare - Professional and Telecompare - Corporate, all by Swift River Communications. These software programs analyze long-distance plans for home-based or small businesses. They compare over 50 rate plans as well as custom long-distance proposals and multiple locations. Require Windows 3.1 or Windows 95; $199, $299 and $399, plus $5 shipping. Call 603/434-0980 or download demonstration copies from Swift River's Internet site (www.swiftriv.com).
Internet
Teleworth (www.teleworth.com). Business and residential telephone customers may input their calling patterns and obtain a free, unbiased comparison of long-distance services and products.
COMPANY PROFILE
Keep 'em Flying
Hard-to-find aircraft parts provide a money-making niche for a Fort Lauderdale business.
When mechanical troubles ground a commercial airplane, every hour on the tarmac means lost revenues and disgruntled passengers. Airlines need quick fixes. "The aviation business is extremely time-sensitive," says Rodd Sheradsky, president of Hubair, a Davie-based supplier of spare aircraft parts.
Since 1989, Sheradsky, 37, has been working 15-hour days peddling spare parts to airlines around the world. His niche is locating hard-to-find parts or replacements and getting them to customers quickly. Says Sheradsky: "We find an alternate part with the same fit, form and function, and we provide it the same day."
Operating initially out of his one-car garage, Sheradsky began by convincing airplane repair facilities to let him sell their surplus parts on consignment. Before long, he was locating obscure parts for the repair shops, often buying large mechanisms and disassembling them to get the single piece that a shop needed. The leftover parts went into Hubair's inventory.
Today, Sheradsky's shop is stocked with over 150,000 separate parts and has contacts with repair shops and suppliers worldwide. Additionally, Hubair operates a repair management service, acting as a general contractor for aircraft repairs. The 33-employee company recently broke ground on a 33,000-square-foot building on 2.5 acres at Sawgrass International Corporate Center in Sunrise.
What sets Sheradsky's business apart from other parts suppliers is his focus on trouble-shooting in an emergency and locating components that other retailers don't keep in inventory. If, for example, Air France needs to replace a part for a Boeing 747, it first checks the Inventory Locator Service (ILS), an airline industry computer system that shows parts' availability. If the part isn't readily available or if it's too expensive through the ILS, Air France can ask Hubair to find it. "Our system has been successful when ILS fails," says Sheradsky.
Hubair's rapid response and top-notch customer service have propelled sales steadily upward. This year, the company expects to post $12 million in revenues, up tenfold from $120,000 in 1989. Sheradsky says Hubair has been profitable from day one, with approximately $1.7 million in net income projected for this year. The company's customers include major airlines such as Air France and Air New Zealand and large repair facilities in the U.S. and overseas.
With partner Russell Bonnell, hired four years ago to help manage the company, Sheradsky plans to acquire an entire aircraft and dismantle it for parts. He'd also like to open an aircraft leasing service, but that will have to wait three to five years. "I'm afraid of growth overnight," says Sheradsky. "I know my limitations."
SMALL TALK
Know-How
The recently opened Fraunhofer Technology Center Hialeah, a not-for-profit joint venture of the city of Hialeah and Fraunhofer USA Inc., is designed to improve the productivity of south Florida's manufacturing industry and create new jobs. The center provides leading-edge skills training, technology development and manufacturing support services for small and mid-sized companies in the fields of automotive products manufacturing, biomedical products, medical instruments, tool & die, textiles and others.
Contract Bids
Municipal Code Corp., the Tallahassee publisher of the Florida Administrative Weekly (FAW), offers a "Bids Only" version that describes state government contracting bids and requests for proposals (RFPs) published in the FAW as well as those posted on the Department of Management Services' Florida Communities Network Internet site. Bids Only is delivered via e-mail or first class rather than "periodicals class" mail. Subscribers who use the service get a look at bid information several days before the full, printed FAW is delivered and often before the FAW is available on the Internet, says A. Lawton Langford, president of Municipal Code. The price for Bids Only is $179 annually. For more information, call 850/576-3171.