Exploiting the information age

A wide variety of online services enable you to reach out to business partners and investors worldwide, take orders from customers all night, even kibitz with other family business owners.

By Stephen J. Simurda

For 28 years the Thomas S. Klise Company of Peoria, Illinois, has helped to teach millions via the company’s educational film strips, which are widely shown in the nation’s schools. But as new technologies filtered their way into education over the past decade or so, the family company found it harder and harder to create growth with its increasingly outdated product. Sales, which had topped $1 million annually in the company’s early years under founder Thomas Klise, had dipped to roughly $500,000 by 1990 under his wife, Marjorie, who took over when Klise died in 1978.

Something had to be done and the people to do it turned out to be the Klise’s two daughters, Margaret and Elizabeth, who joined the family business almost five years ago to try and breathe new life into it. They opened a development and marketing office in New York City, and almost immediately started to transfer the images from the company’s film strips onto videotapes which many schools were beginning to use.

But this was just the first step. Today, the sisters are at work on the next level of technological sophistication, creating a CD-ROM version of a popular series on mythology. To get the job going, they have become aggressive users of a rapidly growing group of data and telecommunications services that can be accessed with a computer and modem.

“It’s been incredible for me in trying to learn about a new technology,” says Margaret Klise, 35, of her networking activities on Compuserve, the largest of the commercial online services. “We’ve joined forces with a development company in New York to create our first product, met a developer in Israel with whom we communicate regularly, and even found a representative for our product in the Pacific Rim,” she says. “These are people I probably wouldn’t have met any other way.”

As she expands her family company’s horizons, Margaret Klise is learning what many other business people have in recent years, namely that information networks can help their business thrive. Often it’s been the younger generation that has brought this revelation to family firms. “I think it would really be an exception to find a member of the older generation as the computer hacker,” notes Kenneth Kaye, a psychologist in Evanston, Illinois, who works with family businesses and recently began the Family Business Bulletin Board, an online forum for family-run firms.

Like other businesses, family companies cannot afford to ignore the opportunities waiting for them online. The information superhighway connects a local company with a wide world of information, services, and other businesses. But in order to benefit from this communications revolution, family business owners have to understand the new technology and give it a serious try. This is where intimidation and the fear of being overwhelmed often stops people.

“It does seem like a major deal, at least in the beginning, but it’s really not,” says Jeanne C. Ryer, a writer and marketing consultant in North Sandwich, New Hampshire, who is co-author of The Internet Companion (Addison–Wesley, 1993). “You don’t have to become a full-fledged geek to understand what to do with this.” All you do need, according to Ryer and others, is the ability to look at online services as a tool—just as a computer or copy machine is a tool—and the willingness to invest a bit of time learning how to use it. If you turn vaguely ill at the thought, remember that you can always hire someone to help you, which could ease the pain in the beginning.

There are a variety of services to choose from. These include commercial services such as Compuserve, America Online, or Dow Jones News Retrieval; the Internet, a non-commercial service that is operated by a loose confederation of universities, government agencies, and research organizations; and a number of private systems that offer services geared to specialized needs. All that is required to use any of these is a computer, a modem, and a phone line.

The commercial networks and Internet offer many of the same basic services, and then add unique features. They offer three of the most popular online features: electronic mail, research and reference help, and user groups. There are other networks that offer just one of these options for less cost, such as MCI Mail, which is strictly an electronic mail service. Let’s take a look at some of the most popular and useful types of online offerings to help determine which of them can help your business.

Electronic mail. This is called e-mail for short. It allows you to send and receive messages almost instantly around the world for a fraction of the cost of other communications options. Each subscriber to the system has an address. You type in a local phone number on your computer and make the call through your modem. This links you to the e-mail system. You then type in a message and send it to another person’s address. The message is stored there until the other person checks to see if he’s received a message. For a company with any international presence or offices in different parts of the United States, e-mail should be part of the day-to-day operation. All online services offer electronic mail as part of their basic service (which typically costs $10 to $20 a month).

This is a good place for a novice to get his feet wet, too, since using e-mail is simple and can help your business very quickly. “People who have e-mail generally prefer it as a means of communication and you will get orders from customers if you are on e-mail,” says Ryer. For those who want only e-mail capability, Internet or MCI Mail might be the cheapest options. You can communicate with people on various online services via e-mail, no matter which service you actually use, by simply tapping a few extra keys on your computer.

Research and Reference. Information is everywhere online, and plenty of it can be helpful to businesses, whether small or large, family or non. You can call up the day’s business news, find out how your mutual funds are doing, look for articles about a prospective client, investigate the demographics of a market you are thinking of moving into, or get a credit report on a supplier. The options are almost endless.

“We’re trying to rewrite our buy-sell agreement and last week I was looking for articles on that subject and I found several, including two or three that were real interesting that I distributed to other members of the family,” says Scott Stephens, director of personnel for Ironwood Plastics Inc., an injection molding company his family runs in Ironwood, Michigan.

Dow Jones News Retrieval, for example, offers access to articles in more than 1,400 regional, national, and international trade publications and business newspapers. It also contains company and industry data compiled by Dun & Bradstreet and Standard & Poor’s. This type of service can provide information that ordinarily takes hours to compile. Prentice–Hall Legal & Financial Services, for example, can provide uniform commercial code information, bankruptcy data, records on court judgments and tax liens, state corporation records, and real estate records, among other items, all online. It could all be quite useful when an out-of-state buyer you never heard of calls in a big order and you want to make sure they are on the up-and-up.

Commercial online services can also provide information about weather or enable you to reserve an airline ticket. Internet can hook you directly into the databases of libraries and government organizations around the world.

User Groups. Of the many potentially useful services available online, user groups are probably the most enjoyable, although they can be a bit time-consuming. A user group consists of subscribers with a common interest who communicate electronically. There are many types on the various services, including groups for entrepreneurs, people who work at home, businesses involved in international trade, and those who use the same spreadsheet. Some industry organizations offer online user groups, as do professional groups such as engineering societies.

In these groups, users hold dozens of ongoing public conversations by typing in ideas or questions and responding to those of others. A business owner might ask a question about tax laws (or marketing strategies, or cash flow management) and leave it in the appropriate place on the user group’s message board. Within a day or two there will likely be a response, or several, from other business owners offering their advice or perspective.

“I’m in a total of about 15 different groups,” says Scott Stephens of Ironwood Plastics, who also handles computer systems for his family business. Each group deals with a software program or piece of hardware that the company uses. When Stephens has a question, he doesn’t hire an expensive consultant, or even try to reach the manufacturer’s technical support staff. He puts a message in the user group for that product and inevitably gets an answer more quickly than the manufacturer can provide.

“It’s especially helpful for small businesses, which don’t have a lot of computer experts on staff,” says Stephens. “It’s like having another person in your company. Sometimes there’s no place else to go.” People also use these groups to help buy or sell products. Most of the commercial services offer a classified ad section, and many user groups are commercially oriented. On any given day, for example, you can locate products from sugar to shoe polish available for import or export on international trade forums.

Other Online Options. Many companies, including Ironwood Plastics, have systems that allow customers to place orders online, any time of day or night. “We have one large client that places orders daily,” says Stephens. “They enter their orders into their computer and we go into their system once a day to retrieve them. We can immediately work the orders into our production schedule.” Stephens says the client prefers the system because orders can be placed directly from a computer terminal. He prefers the system, too, because he knows every day what is needed and when.

There are other online applications for small business. Rick Pfeifer, who along with his wife, Elaine, runs Family Resource Group Inc. in Portland, Oregon, wants to start distributing his product, a directory of resources and services for families in the Portland area, in online form. “To date our distribution has only been in print, but we hope to make it available online by the end of this year or early next year,” says Pfeifer, noting that the demand has come from service providers eager to have a comprehensive list that can be updated regularly.

Ken Kaye, the family business psychologist in Evanston, hopes his new bulletin board can become a place for family businesses to meet and share information. A bulletin board allows people to call in and choose from a selection of menu items all related to the given subject. The Family Business Bulletin Board is free (except for the phone call), and includes a discussion section, a library of articles relating to family business, a chance to buy books at a discount, and networks where family business service providers can communicate.

Taking advantage of online opportunities can expand the potential of any family business, and can help firms avoid the insularity that can harm both a business and a family, says Margaret Klise. “What’s really important for a family business is avoiding that feeling of being all alone because your whole life becomes your family,” she says. “An online service is a nice way of keeping in touch with the world.”

Stephen Simurda wrote about Dorian International in the Spring 1994 issue.


What you need to get started

You won’t have to invest thousands of dollars in equipment to get started online. In fact, you can probably get going by spending less than $200, as long as you already have a reasonably new personal computer.

First, you’ll need a modem. This allows your computer to “talk” with another computer over phone lines. Get one that is at least 2400 baud, and 9600 baud is not a bad idea. But don’t get persuaded to buy anything more powerful than that unless you absolutely know you need it. Expect to spend no more than $150.

Next you may need communications software, which tells your computer how to operate the modem and “talk” with another computer over the phone. Some of the commercial services provide this as part of the user fee, so decide which one you want to try first, then ask them about the software. Many popular communications programs cost from $50 to $100.


Plenty of options online for business users

Internet. The grandfather of them all, Internet was created by the U.S. military but is now mostly associated withuniversities. There are lots of academics on this network, but plenty of business people, too. This is not the easiest system to maneuver in, however, since there are few handy graphics or menus. If you can join via a school, institution, or larger corporation, Internet is free. Otherwise, you’ll need to get on through a commercial service. One big one is Delphi (800-695-4005), which costs $10 a month plus $4 for each hour spent online.

Compuserve. The largest and oldest of the online networks that charge a fee. It runs the gamut from sports news to personal ads, to business information, and is easy to use. There is plenty of financial news; research information for marketing, patent, and legal issues; databases of newspapers and magazines; and even the option of doing customized searches by subject. There are many active user groups for business people. The basic fee is low ($8.95 a month), but the best services, including user groups, cost extra money (800-848-8199).

America Online. A fast-growing service that has a good range of services, including a small business center that includes user groups and other information. Nice graphics and especially good for those who use Macintosh computers. The level of sophistication is not always as high as Compuserve. Cost is $9.95 a month plus $3.50 per hour (800-827-6364).

Dow Jones News Retrieval. If it’s business news and information you want, this is where to get it. In addition to access to the Wall Street Journal, the network has five newswires, hundreds of business weeklies, a huge text library, and loads of financial data. There is a $29.95 sign-up fee, then $1.50 per 1,000 characters of information retrieved (800 223-2274).

Prentice–Hall Legal and Financial Services. A compendium of legal and real estate information that can provide help in researching a client or supplier. It costs $150 to establish an account plus $300 per quarter. Cost of a typical service (such as retrieving information on a company) is $13 (800-833-9848).

Family Business Bulletin Board. A free bulletin board designed to be a place for family business members to meet and share information (708-470-9311).

American Venture Capital Exchange. This service links investors with small businesses. Deals can be made here to help your company get the money it needs to grow (800-292-1993). Call for cost options.

Business Opportunities Online. A matchmaker for owners looking for capital, or to sell the business, and people looking to invest or buy. Cost is $10 an hour plus various fees (908-872-9355).