Total Cost of Ownership at Work

In previous communications, we have discussed the philosophy commonly referred to as Total Cost of Ownership (TCO). TCO is a way of calculating the cost associated with securing and maintaining a product or service by taking into consideration both time and money.

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    • RELATED: How to integrate the total cost of ownership model into your everyday business practices.

    But how do you put TCO to work? Well, the COSE Office Supply Program is a great place to start.  Let’s look at how.

    TCO at work

    For many organizations, the most common challenge when purchasing office supplies is the inability to pinpoint the total cost for their organization’s office supplies. This challenge typically stems from conducting price comparisons, which often leads to purchasing from multiple vendors.

    With the COSE Office Supply Program, you can consolidate your purchases down to a single vendor. This vendor consolidation allows you to confidently calculate the out of pocket cost of your organization’s office supplies, and helps ensure that your organization is getting a more efficient solution. 

    How? By consolidating vendors, you also cut the number of invoices in need of processing, and the amount of shipping and delivery charges. While it may not seem like much, this really can equate to more than substantial cost savings for your organization.

    So then we are left with the question, which vendor do you choose?

    COSE has made the decision easy for you by working with Office Depot to negotiate the deepest discounts over the broadest range of products. These discounted products offer an average discount of 30% off retail price, and can be accessed through your Office Depot online account by shopping under the “best value” filter. You’ll also get the same great savings by visiting any of your local OfficeMax or Office Depot stores with your Office Depot Store Purchasing Card in hand.  

    Want to further reduce your TCO? You get free shipping on online orders over $50 in addition to free in-store pickup. Not to mention that when you choose to do a free in-store pickup, items available in store will be ready within one hour!

    All things considered, the COSE Office Supply Program has fully integrated the TCO model in order to provide you with all of these great features and benefits. It is an exceptional reference to how your organization can take TCO, and apply it throughout your purchasing process for acquiring and maintaining products and services to achieve great savings. 

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    Next up: What I Learned from the Goldman Sachs 10,000 Small Businesses Program: Part I
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  • What I Learned from the Goldman Sachs 10,000 Small Businesses Program: Part I

    Dana Freund was a public-school teacher in Northeast Ohio for two decades. Education was her life. But there came a point where she wanted to add a new element to her life to go along with education, and that’s where Pinnacle Gymnastics, of which she is the owner, comes in. After starting the new company, however, it became clear where some of her weaknesses were.

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    “From a business standpoint,” she says, “I had never taken a business class.”

    This is where the Goldman Sachs 10,000 Small Businesses Program was especially helpful for Freund. She knew there were business skills she needed to sharpen for her business to grow, including negotiation and communicating her business’ culture to her employees. Both of these crucial business skills, however, were included among the curriculum in the Goldman Sachs 10,000 Small Businesses program.

    “For me, this was an opportunity to get a business education without enrolling into a MBA program,” Freund says of the free program. “I didn’t have time for a MBA.”

    Freund says after taking the 16-week program, she was successfully able to address both of those knowledge gap areas. Here’s how.

    Negotiation know-how

    Negotiation is not a strong suit for Freund. In her world, for instance, she sets a price at her gymnastics business and that’s what the customer pays, so it’s not something she’s had a lot of experience with—until she went through the Goldman Sachs program.

    “My partner on that session whose entire life was built around negotiating contracts,” she recalls. “We were supposed to role play like we were negotiating, so I threw out a number, he threw one back, and I said, ‘OK.’

    “He said, ‘No, that’s not how it works!’ Spending the day with him, it helped me learn how to do it and now I look at the negotiation process a lot differently.”

    Playing off the strengths of the other students in the course was one of the program’s best features, Freund remembers. “It’s a huge, diverse room of people. Everybody in there does something different.”

    The courses aren’t all about dollars and sense and business strategy, however. There were human resources lessons to be learned as well, including how Freund could best communicate with her staff.

    Communicating culture

    Freund says another of her key takeaways from the program was how to effectively communicate with her staff. “I go to my staff a lot more now,” she says. “I have given my staff a lot more ownership in the choices made in the office every day.”

    For example, one idea Freund took from the Goldman Sachs program was to go back to her office and set up a dry erase board with a question about the business Freund is seeking input from her staff on. These questions have ranged from, “What could a direct competitor do to put us out of business?” to “If you were to define Pinnacle Gymnastics in one word, what would that word be?” Employees write their responses to the questions on the board, and Freund takes a picture of the question and answers so they can be recorded.

    Surveying the staff on questions such as these has been a valuable exercise in getting everyone on the same page, Freund says.

    “You might think the answer is one thing,” she says, “but does everyone share that?”

    Lean on me

    At the end of the day, Freund says the key to the program’s success lies with her fellow classmates who were also enrolled.

    “The peer relationships I took out of the Goldman Sachs 10,000 Small Businesses program were monumental,” she says. “Everyone in there is stressing about the same thing.”

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    Next up: Where are they now? Catching up with past Business Pitch Competition winners.
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  • Where are they now? Catching up with past Business Pitch Competition winners.

    For a lot of small business owners, a little money can go a long way, especially in the early stages of their companies’ development. COSE’s annual Business Pitch Competition provides a total of $40,000 in prize money for business owners to take their business from start-up to established small business. In the following profiles, winners talk about how the competition helped them achieve greater sales, enabled them to add more employees and changed their business operations.

    For a lot of small business owners, a little money can go a long way, especially in the early stages of their companies’ development. COSE’s annual Business Pitch Competition provides a total of $40,000 in prize money for business owners to take their business from start-up to established small business.

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    In the following profiles, winners talk about how the competition helped them achieve greater sales, enabled them to add more employees and changed their business operations.

    Entrepreneurial Spirits

    Founder: Kevin Suttman
    Former life: Sales exec for an international company
    Start-up: Seven Brothers Distilling Company, 2011
    Product: Vodka, rum, gin, whiskey, infused liquors
    Tag line: World-class liquors made in Ohio
    Growth: Added gin, whiskey, private-label liquors and retail sales
    COSE: $20,000 first-place winner, 2012
    Website: www.seven-brothers.com

    It’s been rapid growth for Kevin Suttman of Seven Brothers Distilling Company since 2012 when he won the $20,000 first-place COSE Business Pitch Competition award.

    After winning the competition, Suttman built a new still and tasting room at his Lake County microbrewery. He added gin, Ohio wheat whiskey and several flavor-infused vodkas to his original line of vodka and two rums. He also started private label production (now up to nine liquors for three companies) and expanded Seven Brothers’ distribution by three states.

    The microbrew began monthly tastings and formulated new, infused liquors — a complicated process that needs federal approval for formulas and labels. Today, Seven Brothers has a dozen infusions approved or in development.

    Suttman is also planning to move his distillery from a 1,000-square-foot building in LeRoy Township to one twice its size. The move, near the end of May, means he can hold two tastings a month and roll out new flavors of liquor.

    “I’m excited,” he said. “The new building is more on the Ohio winery and Ohio wine tourism trail and should do well.”

    So, what makes Seven Brothers’ process unique? Suttman uses a vacuum distilling process he developed to infuse flavors such as cinnamon and espresso into vodka and other liquors.

    “I distill under vacuum, which lowers the boiling point,” he said. “I can pull out flavors that others can’t. Distilling this way is a lot more time-consuming, but the results are worth it.”

    Until eight months ago, Seven Brothers liquors were sold only at Ohio state stores (Vodka is $33.10; Erie Island Silver Rum is

    $25.80) and now distribution has been added to Indiana, Illinois and Georgia. Suttman sells his gin exclusively out of state, to test the waters. “Our gin is great and gin is an up-and coming liquor,” he stated.

    Now Suttman, once a one man operation (with help from his wife and children), is hiring. First he plans on adding staff for the new tasting room and then managers as he begins to turn over some responsibilities to concentrate on his core business. An independent sales woman is introducing Seven Brothers into more bars and restaurants to help grow his brand recognition.

    “With the move, I’ve been developing a new organizational structure with new roles and, little by little, will start adding people,” he said. “We are always working on new products, equipment and techniques so that we can bring new flavors to our customers.”


    Person Powered Success

    Founder: Michael Stanek
    Other life: CFO for Hunt Imaging, Berea
    Start-up: Cleveland Cycle Tours, 2012
    Product: Two-hour pub tours on 15-person bicycle
    Tag line: The Ultimate Group Party Bike
    Growth: Full weekend bookings, may purchase second bike
    COSE: $5,000 third-place, 2012
    Website: www.bikecct.com

    Cleveland Cycle Tours (CCT) was still in the start-up stage in 2012 when it won thirdplace and $5,000 in the COSE Business Pitch Competition.

    Michael Stanek had purchased a 15-person party tour bike and was going through the city vendor permitting process for CCT.

    “The city didn’t know what to do with us,” he said. “At one point we were licensed under horses and carriages.”

    The COSE win helped in several ways. From talking to COSE members, Stanek realized that his plan to operate downtown was not as good as offering bike pub crawl trips to Ohio City and Tremont bars. And he was having a hard time finding affordable garage space near downtown for his $40,000, custom-made vehicle (18 feet long, eight feet wide and nine-and-a half feet tall), moved by the peddle power of party-goers heading to pubs.

    COSE contacts helped CCT work through the City Hall licensing process and put Stanek in touch with owners of warehouses, and before long, he found garage space near the West Side Market.

    He recently moved to a garage at 2135 Columbus Road in the Duck Island part of Tremont, sharing space with the new Forest City Brewery. “It is a great symbiotic relationship,” Stanek said. “We can start or end our pub crawls at Forest City.”

    When CCT started, Stanek and his son did all the driving. Demand grew quickly and the company now has four part-time drivers who handle three or four outings per day on weekends. Typical bookings include bachelorette, birthday and anniversary parties and friends gatherings. Due to demand and growth, Stanek is considering a second party bike.

    He used his $5,000 COSE prize money to buy a trailer so he can take the bike farther afield. During a typical two-hour pub crawl, party-goers peddle four to five miles an hour, making it to three or four bars in a two-mile round trip. That gives the bike a limited range unless you can trailer it for special events and other tours a little further away from their home base. Most of their tours stay close to near west side of Cleveland. In Ohio City, party-goers might peddle over to Johnny Mango World Café & Bar on Bridge Avenue, then to the Nano Brew on West 25th Street and end nearby at the Market Garden Brewery or Great Lakes Brewing Co.

    In Tremont, a group might peddle over the Abby Road Bridge to Fat Cats on West 10th Street, then up Professor Avenue to the Flying Monkey Pub or the Bourbon Street Barrel Room and end at The South Side on West 11th Street.

    Stanek said that “one of the neatest parts (of CCT) is that it is so different from my day job. And, I have been seeing the changes in the neighborhoods as Cleveland downtown food and entertainment venues have exploded over the last couple of years. This is truly fun.”


    Sweet, Chewy Success

    Founder: Erika Boll
    Former life: Retail merchandising for Victoria’s Secret and others
    Start-up: The Toasted Oat LLC, 2013
    Product: Gluten-free granola
    Tag line: Sprinkle, Munch, Devour
    Growth: Product in some 200 stores, up from 6
    COSE: $10,000 second-place, 2013
    Website: www.thetoastedoat.com

    When Erika Boll entered the 2013 Business Pitch Competition, six Columbus grocery stores sold granola made by The Toasted Oat, her three month-old start-up company.

    The month following Boll’s $10,000 second-place win, Heinen’s agreed to launch The Toasted Oat in all of its stores. It was the beginning of impressive growth for the company. Today, the granola’s four flavors are on the shelves of more than 200 grocers, including Kroger stores in Ohio and Kentucky, all Whole Foods Markets in the mid-Atlantic region and Kings Food Markets and Balducci’s grocers in the Northeast.

    Boll said the COSE prize money allowed her to move from a shared kitchen to a leased space. “It became obvious that we needed to move,” Boll said. “After the COSE win, I signed a lease on a kitchen space, purchased an oven and sink and made all the electrical and other upgrades required by the agriculture department. The COSE money was the catalyst.”

    A contract with an Akron distributor followed and Boll soon took over adjoining space to have room to hold TheToasted Oat ingredients and pallets of granola boxes she ships to grocers. Today the company has 15 employees, plus five who demo her granola in stores.

    Boll intended The Toasted Oat for the gluten-free market, but she found that most stores place her granola on their regular, not gluten-free, cereal shelves.

    “It’s become a cross-over product. Stores have given us great support and our brand sells 200 to 300 percent above others in its category,” she said.

    Boll attributes that to the work she and her team do when The Toasted Oat is introduced into a new store.

    “We understand the importance of having customers engaged. Because we are so different than regular granola, people need to try The Toasted Oat. We see people walking away with our little cups and they just stop in their tracks and say, ‘This is unbelievable,’ she commented.

    In 2014, Boll won the $25,000 Excellence in Entrepreneurship award from the Ohio Chamber of Commerce. She used the money to help expand beyond Ohio and to develop high-volume packaging.

    “The COSE award and having the support of the Northeast Ohio community helped us in the judging for the Ohio grant,” she said.

    Fans of her granola call it addictive and rivals have attempted – and failed – to duplicate her unique, chewy flavors. Boll developed her recipe from her grandmother’s version.

    “When I was going on a trip one time, my husband asked me where the recipe card was….just in case,” she said laughingly. “Now I keep it well hidden.”

    What’s next: She has a laundry list of new flavors to eventually add to those Toasted Oat line. All sell for $8.95 in 12-ounce, round and reusable, cardboard boxes.

    And she’s aiming for national distribution and increasing her presence in the Celiac market. She is working with local and national organizations, including Nationwide Children’s Hospital in Columbus, and doing national promotions for Celiac Awareness Month in May.


    This story originally ran in the March/April 2015 issue of the COSE Update.

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    Next up: Why I Dislike the Story About the Sword in the Stone.
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  • Why I Dislike the Story About the Sword in the Stone.

    I hate the story of The Sword in the Stone. If you aren’t familiar with the story, it goes like this: The legendary sword Excalibur was magically stuck in a stone and only the rightful king of England could pull it out. Men from across Europe came and tried but no one would succeed until the rightful King Arthur came to claim the sword. My problem with this story is that all these people came to try to remove the sword from the stone by pulling on the sword. No one tried to use a chisel to remove the stone from the sword. Point being that there is always another way, and sometimes that other way is the smarter way.

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    The other day I was having a conversation with a customer. We had a miscommunication about a load and she was upset. She told her customer that the freight would deliver on a specific date without checking to make sure that date was possible. It wasn’t. I pulled out all the stops and came up with a solution that works for everyone. During the conversation, the customer started venting to me about issues she was having with a portion of her business we didn’t control. I asked why she didn’t use us for that portion. I hadn’t even come up with a solution for the problem yet but I wanted to let her know that we could help with more of her business. She was a little taken aback and I know she probably thought “is Jack really asking for more business while I am complaining?”, but after the initial shock of my request faded, she started thinking of the advantages. She loves our pricing and other than this case, our service is normally outstanding. She told me she would work up some lanes for me to quote.

    The point of this story was to explain how I used listening as a tool to develop more business. Because I was willing to listen, I was given the opportunity to add to our business. Too often when negotiating, following up, or dealing with issues, we are just waiting for our turn to talk. We aren’t really listening. Sometimes, we need to take a step back from conventional problem solving and chisel at the stone.

    Read the story in its entirety here.

    Jack Holmes is the Operations Manager at Global Transport. He has been in the freight industry for over 15 years, covering all aspects of transportation from importing to freight brokerage.

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    Next up: Why You Should Buy Local
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  • Why You Should Buy Local

    From fostering creativity to creating jobs, there are no shortage of reasons how buying local can have a big impact on a local community. That’s what was behind the Brecksville Chamber of Commerce recent “Buy Brecksville” shop local campaign. Curious to know how else shopping locally can benefit your local community? Check out the infographic below.

    From fostering creativity to creating jobs, there are no shortage of reasons how buying local can have a big impact on a local community. That’s what was behind the Brecksville Chamber of Commerce recent “Buy Brecksville” shop local campaign. Curious to know how else shopping locally can benefit your local community? Check out the infographic below.

     

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    Next up: Ask the Expert: With so many stories of violence in the workplace making headlines, what should I be doing to safeguard my business?
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  • Ask the Expert: With so many stories of violence in the workplace making headlines, what should I be doing to safeguard my business?

    “There has been an upswing in recent years in how businesses look at the safety and security of their physical business locations — whether it is an office, warehouse or storefront. Companies are seeing more aggressive behavior in the workplace, not only from visitors and unknown persons, but also from current and discharged employees.

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    “There has been an upswing in recent years in how businesses look at the safety and security of their physical business locations — whether it is an office, warehouse or storefront. Companies are seeing more aggressive behavior in the workplace, not only from visitors and unknown persons, but also from current and discharged employees.

    “The good news is there are fairly inexpensive and even no-cost ways to better ensure the safety of your employees, customers, visitors and vendors. I recommend an objective physical analysis of the workplace. A professional risk assessment usually includes a walk-through of the business as well as interviews with employees. You can then formalize a 1-3 year plan and budget for small and large improvements to strengthen security and reduce vulnerability and risk. A few easy to implement safety features include:

    • Control the flow of all people in and out of buildings. Limit the amount of doors utilized for normal exit and entrance to your business.
    • Secure the lobby or entrance area and require visitors to sign in and out.
    • Control external access electronically and limit access to crucial areas of your business.
    • Add cameras and improve lighting.

    “Companies are also realizing the need for awareness and training in workplace violence issues. Training to combat bullying, deal with difficult persons, and diffuse dangerous situations can be crucial in safeguarding your business.”

    Timothy A. Dimoff is CEO & president of SACS Consulting and Investigative Services, Inc.

    Want more expert advice? Check out COSE Expert Network, an online forum connecting business owners with creative solutions to the tough questions they face every day. 

    This article originally appeared in the January 5, 2015, edition of Small Business Matters.

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