HATTIE: Welcome back. If you were here last week, you know our first season provided us with incredible feedback, more than 21,000 phone calls. Well, we've taken your ideas to heart, to give you even more helpful `where the rubber meets the road' information about starting and running your own business.

We have new features this year: Smart Practice, and Deliver Your Message. Plus your favorites from the first season are back: LawTalk and Streetfighter Marketing. And our search for the right stories has convinced us that this country is full of people with great ideas doing great business. So once again, we'll lead off with our profile of an outstanding small-business owner in the trenches.

Sometimes I whine to myself about how hard life is. Now that I've met Vicki Bondoc, I know I have someone to call who'll tell me to straighten up my attitude and look at what I have, not what I don't have.

HATTIE: I grew up in San Diego, California, close to General Dynamics, and so I thought all government contractors were huge companies. I came to Boston to meet a small-business owner who does plenty of work with the government.

(Voiceover) I first met Vicki Bondoc in Washington, because we both serve on the US Chamber of Commerce Small Business Council. A first-generation American with a bachelor's degree in mathematics from MIT, and a master's degree in computer engineering from Boston University, it is clear that Vicki has the academic credentials to be in high-tech industry. However, it was not until I visited her headquarters outside Boston, that I began to understand what she does.

VICKI BONDOC (Gemini Industries): We're a service company. We specialize in helping organizations become more effective. Our customers are typically organizations who want to focus their attention on delivering their products and services, and they come to us to enhance their ability to do this by having us take over the operation of parts of their infrastructure. We run their computer centers, we run their stock rooms, we will manage their libraries. They will be within the Department of Defense...

HATTIE: (Voiceover) Joint STARS is a multimillion dollar project Gemini is involved with.

Good. You're the person who can explain this to me, right?

GARY LEWITZKY (Joint STARS): Yes, I'll try. You're seeing targets coming down. They don't realize that they're being seen, and yet the Joint STARS platform, standing many, many miles away, sees these and is able to predict exactly when they will reach certain points, so that they can be attacked.

VICKI: You develop these simulations so that you make sure you haven't gone off and spent a lot of money building a system that the user's going to say, `I don't like what this display looks like,' or `It doesn't have the functionality that I need.'

HATTIE: (Voiceover) Named to Inc.'s 1994 list of America's fastest-growing companies, I asked Vicki about the key growth points along the way.

VICKI: At the beginning, it was just me and the business card, and what I was essentially doing was marketing my own services. So I would get contractual arrangements, consulting contracts with different organizations, where I would literally do that work myself, and then spend time at the end of the day, on the weekends, instead of sleeping, instead of having a real life, marketing the organization, taking on the overhead requirements, like the accounting and the review of the contracts.

HATTIE: All right. Well, let's talk about that process. At the beginning, did you office at home?

VICKI: Yes.

HATTIE: You officed at home, you had the calling card, you had maybe a little bit of savings or you had low personal overhead, so you were able to manage up till the time you got that first contract in six months.

VICKI: The first--what was--the first key growth point was in 1990. In 1990, we won two major contracts. During the period of time from, I'd say, March to probably August of 1990, we brought in something on the order of 20 people, 20 new people within the organization. And over the year after that, the numbers kept on growing, and it would be--I would say we were bringing in maybe five people every month.

One of the things that we look for within the organization are individuals who are prepared to take accountability, and take responsibility for the work that they're doing, and really feel as though they want to create that job and they want to create that environment that is going to be theirs, and that they're going to want to grow with. These people will tend to be people who are not afraid of conflict and the process of taking a current situation or a problem and working through it.

One of the ways in which we sell ourselves is to demonstrate to the customer how we can go into an organization, and by updating and streamlining the procedures, by bringing in new technology, we can save the customer money in the operation of that facility. Just last March, we were able to show one of our customers that there was--had been so many new tools that have been implemented and there were new procedures established that we could give him a credit of $100,000 on the operation of their system.

HATTIE: So, boom, they saved that money.

VICKI: So, boom, they saved that money, and it was already under contract to us. We just wrote them a letter and said, `We don't need this money anymore. We'll give it to you on a credit.'

HATTIE: That's good customer service. You'll get them again. (Voiceover) It might not surprise you that her nine-year-old company will do $5 million in sales, but what will surprise you is Vicki was diagnosed as legally blind when she was two years old.

VICKI: Well, I think that I am very fortunate in that my vision has never been at a certain level and gotten progressively worse. So for me, this is the way the world is. Everybody's system is different, OK? The priorities are different, the focus is different, the emphasis is different, and I think that that really led me in part to the focus of Gemini Industries.

HATTIE: Oh! Because you see things different than I see them...

VICKI: Right.

HATTIE: So you can tell your customers that you can help them see things differently.

VICKI: There are times when it becomes an office joke, because, for example, somebody will give me a contract to sign, and I will pick up a pen and start to write, and they'll say, `Oops, red ink! Let's try that again. Let's get her another blank contract.'

HATTIE: Did you have role models or mentors as you were growing up?

VICKI: I think that my parents were mentors and role models.

REMEDIOS BONDOC (MD, Vicki's Mother): We taught them the same traditional family values that we had, like belief in God, respect for parents and the elderly, desire to learn and most of all, hard work.

CONRADO BONDOC (MD, Vicki's Father): She is highly motivated. She's conscientious, and most of all she's very innovative.

REMEDIOS: I tried to get books with large print. I even got eyeglasses, even suggested a cane, but she refused all this. I would talk to the teachers of her disability and asked that they put her in--let her sit in front. But she refused it. She said...

HATTIE: She didn't want anybody to know.

REMEDIOS: No. She said, `I can listen, and I want to compete on their level.'

VICKI: I said to myself, `I'm 26 years old. What's the worst thing that could happen to me? It doesn't work, and I'm 27 and I have to go find another job?'

HATTIE: So you took the risk.

VICKI: So I took the risk. Life is one big risk, and the only thing that I can say about failure is, failure is nothing more than a temporary resting place on the way to success.

HATTIE: Here's what I learned from Vicki: If you really believe you can do something better than someone else, go do it. Your own disabilities can be your company's greatest strengths. And all of life is a risk.

38% of all small businesses are owned by women. -Small Business Administration

We can't take the place of your local attorney; however, if you listen to our legal expert, John Patrick Dolan, we may save you a phone call or two. This week, John explores some of the complications when more than one person holds a bank account.

JOHN PATRICK DOLAN (Legal Consultant): Here's how a problem could come up. Let's suppose a husband and wife have a business venture together, and one or both of them has a previous marriage, so they have children from a previous marriage. If there's a joint tenancy bank account set up, when one spouse dies, the surviving spouse gets everything. And even if that spouse who died had in their will, `I want half the money to go to my children, there won't be any money to give because of the way joint tenancy works by operation of law.

Here's how it comes up as a problem: The children of the spouse who died come into my office and they say, `My mom wanted me to have half of the money for that business,' and the remaining spouse, the husband, says, `Oh, no, we had our bank account in joint tenancy and it's all mine.' You want to avoid these problems. So if you have an interest in giving part of your business to children or any other relative besides your spouse, you want to set up your bank account in what they call `tenants in common,' so that you can give away your one-half interest through your will or through your trust.

HATTIE: (Voiceover) Welcome to the SMALL BUSINESS TODAY home page on the Internet.

You can do this, too. Mind you, it is 1996, and in this week's You're Wired, Web master Dan Schulman is going to convince you it's a new way to make money.

DAN SCHULMAN (Computer Consultant): Well, today on the Internet there are many small businesses are going to make, by year end, about $200 million in transactions over the Internet. Now that's just a drop in the bucket, given the $1.5 trillion that Americans spend in catalog shopping or in stores today, but that's acceleration is great. Let me give you an example. There is a small-business owner today, it's a flower shop, that has their own home page on the Internet. So you click on them when you look under flowers, it comes up to their electronic mall, their electronic storefront, and you click on there, on their picture, and they say, `For Mothers' Day, show me the different floral arrangements you have.' And they download images of the different floral arrangements. None of this is being done over the phone, so the small-businessperson isn't incurring the cost of either an 800 number or the time, even more important, of explaining all this information.

ISP: Small-business owners can't afford not to be on the Internet and understand how this technology, which is a major paradigm shift in the way that we buy products, the way that we exchange information, the way we talk to each other. It's a major shift. It's like not having a telephone on your desk. And if you are a small-business owner, or you run a retail profit center, you better be understanding how the Internet can apply to your business, because it can.

HATTIE: You don't have to hire a high-priced guru to do this for you. Our Web adviser, Benjamin Matthews, is 14. He's helped us get on the Net, and if you're lucky, you'll find a Benjamin. Watch out, Bill Gates!

Host: Hundreds of thousands of you make good livings building a practice, a unique kind of business. Jim and Naomi Rhode are with us each week with tips on building your professional practice. This week, Jim says the greatest enemy of any business is `out of sight, out of mind.'

Small Business owner: Current customer referals are very important. When there's an occasion to refer, do they say, `Oh, yes, and think of you?" I wish busy offices were busy because they were better dentists, better lawyers, better doctors. Not necessarily. It's often because they nurture referrals.

They keep their name in front of their clientele. And, you have to decide to it. By sending pertinent notes, making short informative calls, bringing them into your other affinity relations. . . it isn't complicated and it doesn't take much time.

It's clear to me that word-of-mouth marketing is under-appreciated. But you have to feed it. You must keep your name in front of people. And I'll guarantee you that if you do that, your business will be bigger. It just works that way.

HATTIE: Not only do you need to keep your name in front of your customers, you have to make sure you know where your customers are, as you deliver your message.

Marketing Advisor: You deal with customers. The most important thing to do is --when you meet a customer-- is get their name and get their address. Get their correct name and their correct address. Get their title, get the city they live in and their ZIP code. Now you have to do that before you do the mailing, but you should do that as a businessperson, because if you want to build loyalty with your customers, surely you should know who they are. If you want to make it complex--and it can be, and it could be worth the time--what you can do is, you can hire a letter shop, and they'll show you a variety of ways to use the mail. For example, they may show you with a shared mail program, that by cooperating with them, you're actually going to spend less than if you would have done it yourself. So there's a lot of advantages to hiring a professional mailing service.

BUSINESS BASICS: I first ventured into business by buying a franchise. It was a positive experience and I made money. But if you choose this route to get into business, I want you to have more information than I had. So let's take a look at the world of franchises.

More than one-third of all retail sales now come from franchise establishments, and futurist John Nesbitt predicts that figure will rise past one-half by the year 2010. What's so appealing about franchises? Well, for one thing, you don't feel like you're out there all alone. Franchiser Steven Beagleman.

STEVEN BEAGLEMAN (Franchiser): A person should buy a franchise if they want to be in business for themselves, but not by themselves. And the reason for that is the support.

BUSINESS BASICS: Jack and Sue Maxwell were so convinced a franchise was the way to go, that they risked it all.

JACK MAXWELL (Maxwell HealthCare): We sold our house, took $20,000 in equity that we got out of the home, we used $13,000 of that equity to buy a Dunhill Personnel franchise in Tulsa, Oklahoma. We had enough money left over to operate the business on for three months, and to live on for three months.

Host: Now their company has grown to more than $20 million in sales.

JOHN APPEL (Consultant): Being a small-business owner can be very lonely. And one of the advantages of working with a franchise firm is not only do you have the leadership and the management from the franchisor, but a very strong concept here is peer leadership, and that is, franchisees learn from each other.

Host: And learning a proven method of success is really what owning a franchise is all about. So a good franchiser will show you every step to take along the way. Unidentified Man #5: You need to have an eight-week shipping window to receive 90 percent of your new inventory.

GrowBiz International took the concept of a garage sale and turned it into a highly-structured chain of stores selling everything from used sporting goods to children's clothes. And they'll tell you exactly how to make it work, but as Ron Olson points out, the most successful business system in the world won't do you any good unless you're willing to implement it.

RON OLSEN (GrowBiz International): And we always say to people that you pay us a franchise fee, you pay us a royalty fee, then follow the formulas. Don't try to change the formulas that we've been successful with.

Host: Franchisors tend to say, `If you're new, please spare us your brilliance for six months.'

RON: That's really what we would like them to do, is follow the formula for six months to a year, and then implement your creative ideas. Because truly, a franchise system does develop and grow through the brain power of the franchisee.

Host: If you decide that you are right for a franchise, how do you select a franchise that's right for you?

STEVEN: You have to love what you do, in anything, and that includes a franchise. It's very important. If you can't see yourself working and cooking hamburgers in a McDonald's, then that's not the right business for you.

JOHN APPEL: Once you've found out what you enjoy doing, and you've found the company within--or companies within the industry, I would certainly use some due diligence, and one of the elements I would look at is the financial condition of that company. Again, franchising is a partnership. If I'm going to entrust $1,000 or $100,000 or $1 million with this partner, I want to make sure that they're solvent. The direction of the firm is critically important, the vision of the company. What is it it wants to build? And in good franchise firms, you can ask what the vision or the objectives are for the next five or 10 years, and they'll have a well-defined statement supported by a strong mission statement.

STEVEN: Some of the other things that you really should look for is what are the other franchisees like? You really need to contact franchisees. What I would do if I was looking at a franchisor to possibly be my franchisor is I would go out and I would contact all the franchisees in the local market that I was looking at and see how they were, see what they felt about the business, see what they were like, see if I'd get along with them, and what type of support that they got provided by the franchisor. Then I would probably take the farthest franchisees from where I was located and contact them.

Host: The initial price of a franchise can range from hundreds of dollars, as you know, to hundreds of thousands of dollars. How do you determine what's fair?

JOHN APPEL: The amount, although relevant--of greater relevance is the returns that you're going to get from your investment. If you invested a dollar and got no return, it's a bad investment.

STEVEN: I we honor our end of the bargain, which is supporting our franchisees the way that we're supposed to do, which I'd like to say that we do, OK, and you honor your end of the bargain, which is you're going to put in every amount of effort that you can in making this business successful, then that's where your return is going to be.

Host: Well, John, in your opinion, what type person would not do well in a franchise?

JOHN APPEL: I don't feel that a true entrepreneurial person does well in a franchise company. I think you're looking for an individual that although he has an entrepreneurial spirit, likes the idea of structure, looks for guidance.

STEVEN: The right person for a franchise is somebody who can listen, and listening's the key thing there. They will--they want to learn, and they want to work real hard. Those are the keys. If they do every one of those things, they're going to be successful.

Franchising is a good way to increase your odds of success, but only you can decide if it's right for you. You should say a definite `yes' to these questions before buying a franchise.
1. Is it important to you to be a part of something big?
2. Can you afford the franchise purchase price?
3. Are you teachable and willing to take instructions, even when they don't make sense?
4. Do you want to be able to call the home office or other people in your business for advice? 5. Is a proven system for making your business successful more important to you than creating your own plan?

The choice is yours. You can start from scratch, buy an existing business, or buy a franchise. So there are a lot of options if your dream is to work for yourself.

HATTIE: Nothing happens until something's sold. And you can't sell anything until you get to the person who can sign the check. Jeff Slutsky tells us exactly how to do that.

JEFF SLUTSKY (Marketing Consultant): One of the biggest challenges for a salesperson is getting through to the decision-maker, and past the gatekeeper. Well, we have a number of different tactics for doing that, and we sort of like associate them with football plays.

The first technique we have is called a run up the middle. This is where the gatekeeper has a number of questions they're going to ask you to see if you're worthy of getting through. The more questions you can answer and still survive, the better you increase your likelihood of getting through. So always give them the minimal amount of information, never volunteer anything extra, don't try to sell your product or service to the gatekeeper, and always end with a call to action. Give them an order to do something--they're used to taking orders.

So I'll call up and say, `Mr. Smith, please.' `Well, who's calling?' `This is Jeff Slutsky. Please let Mr. Smith know I'm on hold.' `And who are you with?' `I'm with Streetfighter Marketing in Columbus.' `Is he expecting your call?' `Well, I don't believe we set up a specific time for my call, but let Mr. Smith know I am waiting.' `What's the nature of your call?' `Let Mr. Smith know I have the answer to all those marketing questions. Whatever questions he has about marketing, I've got the answers.' I might get through.

Now if that doesn't work, I've got to use some other plays. Now we have the end sweep. This is where I call shipping and receiving and ask for Smith, who happens to be in marketing. `Well, you got the wrong division.' `Could you please transfer me directly in to Mr. Smith?' and sometimes you'll bypass the secretary.

Or the reversal. This is my favorite. You call the CEO or president's office and ask for Mr. Smith. `Well, he's down in marketing.' `Stupid me. Could you do me a favor and transfer me directly in to Mr. Smith?' And sometimes I'll get in.

Now if that doesn't work, we got the quarterback sneak. This is when you call at lunchtime when the regular secretary's gone. They put in a switch, a secretary who doesn't know what the rules are, and sometimes will let you through.

And if that doesn't work, your last technique is the punt. Know when to quit, don't waste your time. That's street fighting.

HATTIE: Next week, go with me to Manhattan. We'll meet two men with staying power, 45 years' worth.

We'll introduce you to a woman who wrote a great book on business plans. Plus our regulars, with advice on everything from the law to technology as it affects small-businesspeople. Remember, this program is about your business and your life.

The Closing of the Show.