Last Revision: May 12, 1999

Produced by the Entrepreneurship and Technology Transfer Committee

of the Technology Gateway

of the St. Louis Regional Commerce and Growth Association

Editor: Jim Hahn, UM-Rolla Engineering Center, St. Louis


"Nobody gets rich working for somebody else"

(Title of book by Roger Fritz, Dodd Mead and Co.)

NOTE: This document is temporarily located on the University website. You may have trouble going directly to web addresses hotlinked from this document because of the university's password requirements. In this case, you can simply type the address into your browser.



Congratulations! You have decided to start your own company! As the quote above suggests, that's the surest way to achieve wealth, and satisfy a host of personal objectives as well. Your decision to start your company in St. Louis is an excellent one. Entrepreneur Magazine recently rated St. Louis as the second-best large city in the entire nation for start-up companies. The city has been on the magazine's list for the last four years.

Starting a new business from scratch can be an overwhelming task. Although you are an expert on the product or service that your business will be providing, it is likely that you will need help in literally hundreds of other areas, ranging from accounting services to venture capital. That's where this guide comes in. It will help you find those resources.


The guide was produced by the Entrepreneurship and Technology Transfer Committee of the Regional Commerce and Growth Association to assist anyone in the St. Louis area who is starting or planning to start a new, technologically-oriented business. The guide is intended to be a reference, not a complete how-to-do-it book. It is designed to help you find all the assistance you need to get your business up and running - even some assistance you didn't know you needed. Each section contains a description of the pertinent product or service to explain why an entrepreneur needs it. Some topics obviously need more explanation than others, so the descriptions vary substantially in their length.

Note that the guide does NOT cover common needs such as janitorial services or office supplies, as these are readily available in the telephone company Yellow Pages and other sources.


The guide is organized alphabetically, with extensive cross-referencing. Just look for the topic you want help on, and if the reference isn't there, a cross-reference will take you to the proper section. The guide is organized so as to be most effective as a World Wide Web document. In keeping with its basic purpose or providing easy access to needed references, it includes Internet addresses and hot links to most of the references included.

In addition, the Guide itself is organized for easy navigation from one part to another. Entries in the Index are linked to the various sections, and links at the end of each major section allow quick return to the Index.


Many people contributed to this publication, and thanks are due to all of them. The Guide was started under the auspices of the RCGA Critical Technologies Committee of the Technology Council, a predecessor of the Technology Gateway. The members of the Critical Technologies Committee, as well as those from the Technology Gateway who contributed who contributed to this guide, are listed in the index. Their company affiliations are listed in their respective articles.

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In addition, the editor gratefully acknowledges the contributions of the following:

Jim Farrell, Vice President, Infrastructure, Technology and Environment, RCGA
Dr. Paul Markovits, 1997 Chair, Technology Council, RCGA
Dr. Greg Johnson, 1997 First vice-Chair, Technology Council, RCGA
Rick Foristel, 1997 Second Vice-Chair, Technology Council, RCGA.



This section of the guide provides an alphabetical listing of goods and services, with a list of suppliers for each. An introduction precedes each of the items, explaining why that particular item is likely to be needed. It is recognized that not all items will be needed by each new business, but all are included for completeness.

As with many documents on the World Wide Web, the Guide is a dynamic document. It is expected to undergo more or less continuous change, since the references involved are changing rapidly. At any given time, it is expected that some sections will be incomplete or in the process of modification. The most current version will always be available and useful to the viewer. The Guide should be considered as "undergoing continuous updating" rather than "under construction" as are many Web sites.

Disclaimer: The names of businesses and organizations listed in the various sections have been furnished by the authors of these sections. Listing of these names does not necessarily imply endorsement by the RCGA.

INDEX TO RESOURCES Index Page One Two Three Four Five

TOPIC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . AUTHOR

for Academics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Jim Hahn

Accounting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Roger T. Byrne

Advertising See Marketing . . . . . . . . . . . . . . . . . . . . . . Rick Foristel

Business Organization . . . . . . . . . . . . . . . . . . . . . . . . . .Roger T. Byrne

Business Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Patricia Hagan

Communications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Larry Cowsert

Copyrights see Intellectual Property . . . . . . . . . . . . . . .Mary Jo Bertani

Directories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Dan Holloway

Education . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Jim Hahn

Engineering see Technical Assistance . . . . . . . . . . . . . Jim Hahn

Environmental Considerations . . . . . . . . . . . . . . . . . . . .David Erickson

Exporting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Ned Klein

Facilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Larry Cowsert

Failures of Businesses . . . . . . . . . . . . . . . . . . . . . . . . . . Ned Klein

Financing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Ned Klein

General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Jim Hahn

Government-domestic . . . . . . . . . . . . . . . . . . . . . . . . . . Charles Zurheide

Governments-foreign . . . . . . . . . . . . . . . . . . . . . . . . . . . Jim Hahn

Human Resources . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Barry Flachsbart

Importing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Tom Hagerty

Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Tom Hagerty

Intellectual Property

. . . . .Patents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Mary Jo Bertani, Tom Polcyn

. . . . .Trade Marks and Trade Names . . . . . . . . . . . . . Tom Polcyn

. . . . .Trade Secrets . . . . . . . . . . . . . . . . . . . . . . . . . . Caroline Chicoine

. . . . .Copyrights . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Caroline Chicoine

Inventions see Intellectual Property

Laboratory Equipment . . . . . . . . . . . . . . . . . . . . . . . . . Larry Cowsert

Legal Assistance . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Mary Jo Bertani

Managerial Assistance . . . . . . . . . . . . . . . . . . . . . . . . . Ned Klein

Manufacturing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Jim Hahn

Marketing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Rick Foristel

Marketing on the Web . . . . . . . . . . . . . . . . . . . . . . . . . .Craig Simon

Office Equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Larry Cowsert

On-line Resources . . . . . . . . . . . . . . . . . . . . . . . . . . . .Bev Hess

Organizations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Jim Hahn

Patents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Mary Jo Bertani

Peer Groups see Support Groups . . . . . . . . . . . . . . . . Ginni Campbell

Personnel see Human Resources . . . . . . . . . . . . . . . . Barry Flachsbart

Publications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Jim Hahn

Sales see Marketing . . . . . . . . . . . . . . . . . . . . . . . . . . Rick Foristel

Standards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Jim Hahn

Support Groups . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Ginni Campbell

Technical Assistance . . . . . . . . . . . . . . . . . . . . . . . . . Jim Hahn

Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Roger Byrne

Trade Marks and Trade Names see Intellectual Property

Trade Secrets see Intellectual Property

Transportation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Barry Flachsbart

Utilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Barry Flachsbart

Venture Capital see Financing . . . . . . . . . . . . . . . . . . Ned Klein

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for ACADEMICS byJim Hahn, UM-Rolla Engineering Education Center, St. Louis

Many of the advances in technical areas come from university laboratories. The results of academic research frequently form an ideal basis for the establishment of a new business. However, many academics do not have an entrepreneurial bent, so are not usually aware of the resources available to them for starting a business.

There are many ways to commercialize the results of University research. At the one extreme, you may choose complete separation from the university in order to pursue the commercial opportunity. At the other end, you may choose to stay entirely within the university system and pursue the opportunity using the university's resources. The one that is suitable for you depends on the nature of the research results, your own personal attributes and attitudes, and the policies of your institution.

In any case, your quest to cash in on your university research results should begin with a review of the university rules pertaining to such activities. You will want to investigate your institution's policies on conflict of interest. One example is the section in the University of Missouri's Human Resources manual on Conflict of Interest. It can be found at http://www.system.missouri.edu:80/hrs/manual/507.htm, or start with www.system.missouri.edu and navigate to HR507.

Your rights and responsibilities relative to intellectual property issues will also be documented somewhere in the institution's rules. For the University of Missouri System, such information can be found at http://www.system.missouri.edu/patents/. It contains a lot of good information on the UM patent rules and regulations, documenting your discoveries and filing for patents. Rules for other institutions are likely to be similar.

Following are some of the ways to commercialize your laboratory developments:

1. Leaving the university and forming a company to manufacture and sell a product. It is not the purpose of this message to encourage anyone to leave the university, but it is nevertheless true that many companies have been started this way. The person who chooses this route essentially becomes a traditional entrepreneur, who can expect no further help from the university, but who can take advantage of the many resources available for technical entrepreneurs. Taking this route requires careful analysis of the legal and ethical considerations involved. Again, reference to the university's policies on conflict of interest and intellectual property is necessary.

2. Formation of a company, staying with the university. This arrangement is widely used, as it allows the researcher to keep a full-time job, but still allows pursuit of his/her entrepreneurial interests. Forming a partnership or corporation involving one or more outside parties is a traditional way to set up an entity that qualifies for funding from the Small Business Incentive Research (SBIR) program. This program provides, on a competitive basis, a mechanism for funding small business research, frequently with the participation of university faculty. Thus, it provides an opportunity for a researcher to serve as a principal in the small business, and constitutes a potential source of funding for faculty and student research.

3. Staying with the university, commercializing through the university facilities. With this approach, representatives of the university will patent and market the research results. At the University of Missouri, the University Patents and Licensing office, mentioned above, actively seeks marketable results of university research, and their web page spells out the rewards to the researcher whose work provides the basis for a marketable product. In general, the "profits" resulting from the licensing of university research results are shared with the inventor, with the split depending on the type of invention. In another mode, universities sometimes retain an equity position in a start-up company that uses technology from the university, and reap significant rewards when the company goes public. These options should be explored with your institution's Patents and Licensing office.

4. Licensing the product idea directly. In cases in which the university chooses not to pursue patenting or licensing, or those in which the invention does not belong to the university (see UP&L rules), the inventor may choose to license the idea directly to industry. This approach also allows the inventor to retain full-time employment, while gaining some of the rewards resulting from the invention.

Further good information on this topic is contained in:

The Association of University Technology Managers, Inc. (AUTM), No. 1, An Inventor's Guide to Patents and Patenting, Lisa von Bargen Mueller.

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ACCOUNTING by Roger T. Byrne, Schmersahl, Treloar & Co., P.C.

Even though your business may be very small at first, you will still need an accountant to take care of the more complex details of your company's finances. For example, no individual can expect to be familiar with all the fine points of tax law. An accountant can not only keep you out of trouble with the IRS, but generally will save you money by virtue of knowing the law better than you. Your accountant can also help you with your business plan, choice of computer software and hardware, etc., so should be involved from the start.

Business statistics have shown that the second leading reason businesses fail, second only to undercapitalization, is an inadequate accounting function. While the majority of owners can handle most aspects of their business, few are equipped with the necessary skills to manage all their accounting needs. Furthermore, the business owner's time and effort are much better spent selling a product or service than attempting to learn the principles of accounting.

Hiring a professional accountant can help provide a valuable system of checks and balances for the business owner. In addition, a good accountant will provide a wide array of business services that could lead to new opportunities and substantial operational savings that would otherwise go unknown. Accountants can assist in developing business plans, choosing software that is best for each business' needs and obtaining capital financing. Many banks and venture capital sources require that a business retain the services of a CPA, because this signifies that the business' finances will be cared for properly.

One of the biggest advantages accountants can provide is their knowledge of tax laws and regulations that affect businesses and their owners. There is a maze of tax matters that affect a business' everyday operations, and attempting to manage those without assistance from an accountant can prove to be costly. An accountant can remove the tax headaches, and in many cases, identify tax benefits and opportunities that can save the business literally thousands of dollars.

Choosing an accounting firm is similar to choosing any other professional service. Business owners can get recommendations from bankers, lawyers and other business owners. The RCGA can also provide a directory of member CPA's and CPA firms from which to choose. When choosing an accountant, there are many points business owners have to consider, but probably most important is choosing an accountant that they can trust, because the accountant is going to be involved in most intimate details of their businesses' finances.

Accounting firms are usually divided into two groups: the "big six", and all the others. The smaller firms will generally charge less and may be more attuned to the needs of the small company. However, the prestige of one of the big names on your company's financial reports will add substantial credibility. The most important factor is to find a firm that you are comfortable with and that meets your specific needs.

Some reputable accounting firms in the St. Louis area are:

Arthur Anderson

Deloitte & Touche, LLP

Ernst and Young

Kiefer, Bonfanti and Co., LLP

KMPG Peat Marwick


Rueben-Brown-Gornstein & Co. LLP

Schmersahl, Treloar & Co., P. C.

Back to Index


See marketing

Back to Index

BUSINESS ORGANIZATION by Roger T. Byrne, Schmersahl, Treloar & Co., P.C.


One of the first major decisions you will make as you start your new business is what form of legal entity to adopt. Choosing the most appropriate form of business will require careful consideration of immediate, as well as future business needs. The form of entity you choose will govern the liability protection of your company, as well as impact the way income tax regulations and tax rates affect you. The basic forms of business organizations can be broken down into five general types. There are advantages and disadvantages to each type of business structure, and these should be carefully considered when choosing the business form to meet your needs.


A sole proprietorship is a business owned and operated by a single individual, or a husband and wife. A sole proprietorship is not considered a separate legal entity under the law; but rather, is considered an extension of the individual that owns it. Like any other business type, the normal registration requirements for licenses, permits and payroll must still be satisfied. If the sole proprietorship's name is other than his or her legal name, the business must normally register its name with the Secretary of State's office.


A distinctive advantage of a sole proprietorship is that it is the easiest form of business to own and operate, and it does not require any specific legal organization. All profits and losses of the business are reported directly on the owner's income tax return, combined with any other income of the individual or spouse. Another key advantage is that the owner is in control of the business' decision making process and typically does not have to adhere to rules or operating regulations.


The biggest downside to the sole proprietorship business type is that the owner has unlimited liability for all debts and obligations incurred by the business. Other less critical disadvantages of the sole proprietorship are the business' lack of continuity upon the death of the owner and increased difficulties raising capital.


General Partnership

A general partnership is a business owned and operated by two or more individuals or entities under a partnership name that must be registered with the Secretary of State. Typically, the duties of the partners, the business' structure and the determination of how profits and losses are to be allocated are detailed in a partnership operating agreement.

One major advantage of the partnership is that two or more partners can pool their resources and talents. Profits and losses of the business can be divided among the partners in any manner they choose with few limitations. Finally, there are no partnership taxes. Rather, the profit or loss is passed through to the personal income tax returns of the partners where it is combined with other components of income and deductions to determine an individual's overall tax liability.

As with the sole proprietorship, the biggest disadvantage to the general partnership is that every partner has unlimited liability for the debts and obligations of the partnership. Similarly, partnership creditors typically will have recourse to the personal assets of each partner for settlement of partnership debts.

Limited Partnership

A Limited Partnership is made up of one or more general partners who are personally liable for the partnership debts, and one or more limited partners. Limited partners contribute capital and share in the profits and losses of the business but do not play an active role in running the business nor are they personally liable for the partnership debts.


An important advantage of the limited partnership is that the investments by limited partners can be a major source of venture capital, allowing a general partner to increase the partnership's financial resources without giving up any personal control of the business or incurring long term debt. From a limited partner standpoint, the limited partner's risk is directly proportionate to the amount of capital invested, therefore avoiding the unlimited liability that general partners possess.


The general partners still possess unlimited liability for the debts and obligations of the partnership. As a tradeoff for liability protection, the limited partners routinely lack any voice in the management and operation of the partnership.


Limited Liability Partnership

A limited liability partnership (LLP) is a partnership in which each partner's liability for debts and obligations of the partnership is limited to that partner's own negligence, wrongful acts, omissions, misconduct or malpractice, and to any taxes or fees that are owed to the state. In order to maintain limited liability, the partnership must be registered with the Secretary of State.


The one main advantage that the LLP has over the other partnerships is that limited liability is available to all partners, not just to one group of them.


An LLP must register with the state every year to maintain its status, and the fees can sometimes be expensive. The other drawback to the LLP is that different states have different tax and liability treatment for LLP's, so there is no uniform set of rules and regulations across state lines.


A corporation is actually a separate legal entity created by law. It exists as an entity with its own legal rights and liabilities that are independent of its stockholders, and unlike the above mentioned business types, a corporation must file income tax returns and pay taxes on any income derived from its operations. The management of a corporation consists of its directors and officers, which are usually elected by its stockholders. Again, if the corporation chooses to do business under a fictitious name, it must register the name with the Secretary of State. Corporations must adopt and file articles of incorporation and by-laws which govern the rights, powers and obligations of its shareholders, directors and officers.


An attractive advantage of a corporation is that the owners and stockholders do not possess unlimited liability. Their liability is limited to the amount that they have invested in the corporation. Another advantage of choosing to do business as a corporation is that it can facilitate bringing in additional equity, giving the owners easier access to capital. The structure of a corporation allows efficient ownership transfers among stockholders of the business, which in turn allows for business continuity upon a stockholder death or retirement.


Corporations usually require additional up front expenses to incorporate, plus there are ongoing costs to administer and maintain the business' corporate status. The main drawback to corporations is that it is subject to "double taxation". Money paid out to stockholders in the form of dividends is taxed twice. It is taxed at the corporate level as part of its profit and is taxed again at the individual stockholder's rate as income when distributed by the corporation.


A variation of the above corporation is an S corporation (S Corp). A corporation can elect S status simply by filing an election within the required time parameter. S Corps enjoy the same advantages as corporations; however, an S Corp is taxed similar to a partnership to the extent that there is no income tax payable at the entity level. The profit or loss of the business is passed through to the personal income tax returns of the stockholders to be combined with other components of income and deductions to determine an individual's overall tax liability.


The main advantage of the S Corp is that "double taxation", as mentioned above, is avoided. Dividends paid by an S Corp are considered "tax-free" distributions. At the end of each year, the S Corp files an "information return" listing all of its income and expenses. Each stockholder is then sent notice of their share of the business' profit or loss based upon their percentage of stock ownership, which will then be reported on their individual income tax return.


S Corps, contrary to regular corporations, are more restrictive in terms of the number and type of eligible stockholders. Although an S corp avoids the "double taxation" pitfall, stockholders of an S Corp that are in high-income tax brackets will have their share of the business' profit taxed at those higher rates.


A limited liability company (LLC) is a relatively new business form whose basic structure allows the business owner to formulate his or her business as they see fit through an operating agreement. An LLC is a hybrid entity, which shares the characteristics of a corporation and a partnership. LLC's enjoy the limited liability of a corporation and the pass-through tax treatment of a partnership, where the individual owners (members) report the business' profit or loss on their individual income tax returns. Although the majority of LLC's choose to be taxed as a partnership, an LLC can also choose to be taxed as a corporation. In addition, if the LLC has only one member, it may elect to be taxed as a sole proprietorship and still benefit from limited liability.


LLC's are easy business to form and to organize. As mentioned above, members of an LLC enjoy the same limited liability as stockholders of a corporation.


The tax filing system for LLC's can often be complex; however, the advantages that an LLC provides will usually offset the tax complexities. Similar to LLP's, tax and liability treatment of an LLC is not uniform across state lines. Finally, transfer of ownership is more restrictive than it is for corporations.

Qualified attorneys, as listed under legal assistance, and accountants as listed under accounting should be consulted when making decisions about the business organization.

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BUSINESS PLAN by Patricia Hagen, Director, Office of Research Services, Saint Louis University

A well­developed, well­written business plan is an essential component to the success of a new business. The business plan specifies company goals and the methods for achieving those goals. It describes the history and development of the business, the service or products offered, the ownership structure, marketing strategy, human resource requirements, and the financial plan. It also forces the new business owner to examine the current marketplace and to project ways for this new business to create its own niche. It sets forth a map for the future.

A business plan is also used for obtaining financing for the business, and/or to attract employees. A new business owner will not be successful in attracting capital without a well­developed business plan to explain his or her needs, business rationale, and plan for success.

Above all, the business plan serves as a beacon to the new business ­ it is the business mission statement around which the activities of the new organization are arranged. It is a document that should be alive­ referred to often, and amended as needed.

As in any fairly complex writing assignment, the hardest part in developing a business plan is getting started. You may find it helpful to begin by looking at examples of successful plans. Libraries and bookstores are full of books written on developing business plans that include examples. In addition, there is a multitude of information and resources available on the World Wide Web. Finally, excellent community resources are available (such as the local Small Business Development Center), which can provide assistance and advice in the plan composition. The business plan follows a fairly straightforward outline. A good example of a general business plan outline follows this article. Remember, however, that your new business may require more extensive and specific information in certain areas. Review other business plan outlines to find one that may be more beneficial for your particular business situation. The business plan is itself a marketing tool, so if you believe further elaboration on a specific issue will strengthen your business description, include the information!

Inclusion of important information is important; however, it is also essential to be concise, well­organized, and straightforward. Write the plan in third person­ it produces a more objective presentation. Make it neat and grammatically correct, with no misspellings. Have several trusted people honestly review your plan and comment on it. Often, when one is working on a complex written project, it becomes increasingly difficult to objectively assess the presentation. It is very important to have the critiques of several associates and/or outside evaluators.

Don't overemphasize your product or services. Your presentation needs to demonstrate that you have your feet firmly planted on the ground. Do your homework on your potential market, as you will want to emphasize the need for your product or service. You can find information on your potential market from industry trade associations, libraries, local government agencies, universities, the internet, other companies in the industry, and from census and other demographic data. The provision of firm data in your business plan is essential to building your case for the business start­up.

Many individuals from different backgrounds will be reading your business plan. It is important that you write in language that can be easily understood by anyone. Do not use jargon or technical lingo. If your business is highly technical, explain the technical details carefully, and have a non­technical friend read what you have written to determine if he or she is able to understand it.

Be realistic. Anticipate and explain how you will avoid pitfalls. Keep your growth projections within reason. Projections that show enormous growth in short periods of time raise red flags to potential financing targets. Reasonable assumptions will lead to realistic financial projections. A well developed business plan will force you to address and understand the financial aspects of your industry.

Finally, just do it! It almost goes without saying that the first step to completion is getting started. Writing a business plan can be somewhat difficult in that it requires research and careful attention to detail, but the exercise is extremely valuable. It sets your dreams within a framework of reality­the primary step toward success for your business. A sample Business Plan Outline follows:

Sample Business Plan Outline

I. Cover Page

II. Executive Summary

A. Major Objectives

B. Brief Summary of Plan

C. Brief Summary of Financial Projections

III. Table of Contents

IV. History

A. Background of Company/Principles

B. Product or Service Development

C. Form of Organization

V. Goals

A. Mission Statement

B. Business

1. Profit

2. Salaries for Owner/Principals

3. Growth

4. Other

C. Personal for Owner/Manager

D. Other

VI. Marketing Strategy

A. Objectives

B. Market Analysis

1. Industry Trends

2. External Environment

3. Definition of Target Market

a. Demographics

b. Size

c. Factors Influencing Demand

4. Competitive Analysis

C. Product or Service Offered

1. Description

2. Position within Industry

3. Competitive Advantages

D. Pricing

1. Objectives

2. Method

3. Competition

E. Distribution

1. Channel

2. Location/Site Analysis

F. Promotion

1. Objectives

2. Advertising

3. Publicity/Public Relations

4. Personal Selling

5. Sales Promotion

G. Budget

VII. Operations

A. Facilities

B. Production Process

C. Inventory/Inventory Control

D. Quality Control

VII. Management

A. Philosophy

B. Organizational Structure and Chart

C. Employee Policies

D. Resumes

IX. Financial Analysis

A. Projected Cash Flow (1 Year)

B. Projected Income Statement (3 Years)

C. Projected Balance Sheet (3 Years)

X. Risk Analysis

A. Major Areas of Risk

B. Contingency Plans

C. Quantitative Analysis

1. Break­even Point

2. Pay­back Period

XI. Appendices

A. Sales Support Materials

B. Letters of Recommendation/Endorsement

C. Letters of Intent

D. Sales Contracts

E. Additional Resumes

F. Miscellaneous

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Some excellent references for writing a business plan are:

William A. Sahlman, "How to Write a Great Business Plan", Harvard Business Review, July-August 1997, page 98.

Money Hunter at http://www.moneyhunter.com serves to "entertain, educate and empower entrepreneurs who seek capital to start, buy, or grow a business." Although it is primarily a forum for seekers and providers of capital it also has a free business plan template available for downloading.

Bit Plan Pro is a commercial software package for producing a business plan.

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COMMUNICATIONS by Larry Cowsert, New Star Collaborative Technologies


We are now living in a virtual world. You already know that. Your 5 year old knows that and so does your 95 year old grandmother. We are all connected, whether through telephones, television, computers, Local Area Networks, the Internet, video conferencing, faxing, e-mailing -- the list goes on and on.

For any company to survive in this virtually connected world, they must be connected, too. But how? What kind of connection do you need? Are a couple of phone lines and modems enough? What about ISDN? What exactly IS a T-1? Does my Internet Service Provider offer any of these services? What are the costs? Sometimes, it seems like there are more questions than there are answers. Let's try to discuss some of the issues and give you some guidance on who can help sort through all of it.

First and foremost, if you don't have an absolute understanding of network connectivity, don't try to make decisions on your own. Get some help from someone who does. Now, I'm not talking about your brother-in-law who considers himself an expert at telecommunications because he was able to splice into the kitchen phone line and put an extension in the bedroom. I mean get someone who's been there and done it. We'll give you some names of good consultants later. But, for the minimal amounts they charge to advise you, you will be money - and headaches - ahead.


The simplest method of connecting for e-mail, the Internet, or for remote access to office files is via a modem. The first thing to do, to get connected to the Internet and set up your e-mail, is to contact a local Internet Service Provider (ISP) and set up an account. You will need a computer with a modem (MO-dulation/DEM-odulation) and you will probably want a sound card and speakers to enjoy the full benefits of many Internet sites. More importantly, the next wave of e-mail will be mail you will listen to. The next step will be responding to the audio e-mail by simply dictating your response. It's being done now, so it isn't science fiction. For all this to work well, you should get the fastest modem available. As of this writing, the fastest modem speed was 56Kbps. That means that the modem will transfer data at 56,000 bits per second.

Now for the confusing news. Just because you have a 56K modem, it doesn't mean you will send and receive data, or even connect, at 56Kbps. The first thing you must do is verify that your ISP supports the 56K standard. If they do, that solves problem number one. If they don't, find one that does. Assuming that your ISP supports 56K, you will probably STILL not get 56K of connectivity. That is because, in theory, most of the telephone switches are designed to allow no more than 19.2Kbps to go through them. However, recent advancements have allowed telephone switches to increase their capacity. (As an example, there is an area of 1,200 homes in the Chesterfield, MO area that allows a maximum throughput of 26,400 Kbps, no matter how fast the modem is designed to transfer data.) Unfortunately, you will not discover the capacity of your switch until you actually try to connect and your system informs you of the connection rate. If you are getting less than the modem's ability, then you either have a capacity issue with you telephone switch or you have some bad telephone wiring in your home. If it is in the home, it could be something as simple as a bad splice or something as complicated as moisture or corrosion in the wiring. Told you it got confusing! Neither of these problems is an easy fix. But, in some cases it can be. The best thing to do is 1) get the equipment you need and 2) contact a consultant if you are not getting the performance that your system is capable of.

One more point to confuse the modem connectivity issue even further. The latest releases of Windows95 (OSR2) and Windows98 allow you to put two modems in one computer. The theory is that you can connect two modems to the same ISP and get twice the throughput. In other words, if you had two 56K modems, you would theoretically get 112Kbps of transfer speed. There are several issues with this process. First of all, you need two telephone lines. That's expensive, right away. Secondly, you have to cough up the dough for two modems AND Windows98. Third, you ISP has to be willing to support it and, in most cases, will charge you double for your connection, since you are connecting to two of their modems and, therefore, reducing the ability of another customer to log on! Confused yet?

If you are a startup with no more than two or three people, you may do well to simply get yourself an ISP business account and a couple of modems. You can have several e-mail addresses assigned to you so that, as you add people, they can log in and get their e-mail. But, as you grow, you will want to look at other options.

There is another answer for those who need more speed than the standard modem will provide. Or, you have 5 or 6 people who are not only getting e-mail, but they are using the Internet for research, transferring files to strategic partners, and performing other functions on the connection. It is a service that is really being touted by the telephone companies as a wonderful new technology. It is called ISDN.


ISDN has actually been around for over 25 years, but it has been so cost prohibitive that most telephone companies didn't push it much until the last four or five years. As costs of hardware have come down and digital switches have replaced legacy analog systems, it has become more cost efficient for the telephone companies to offer the service.

ISDN is actually no different than the telephone line that comes into your home or office. It is simply what is called twisted pair copper wire. Some people refer to it as POTS, which stands for plain old telephone system. The difference between ISDN and a standard phone line is the digital switch to which the line is connected. In ISDN, the telephone company uses all of the wires coming into your home or office, rather than just two, and they bundle them into what is called a bonded channel. By doing so, they can provide you as much as 128Kbps in bandwidth. Now, that sounds very close to the 112Kbps we were talking about earlier. But, this time the phone company is actually running the line to a digital switch. That guarantees the 128K performance. The two-modem method comes with no guarantees.

Many small businesses use ISDN as their primary connection to the Internet and e-mail services. If your business will be using the Internet for occasional research and e-mail, then ISDN may be just right for you, as long as there are not too many on the connection. A good consultant can evaluate your usage and make the appropriate recommendation.

There are a few issues that you must consider with ISDN. First of all, it takes some technical installation. It isn't as simple as plugging in a modem and clicking the dial button. In many cases, it will take several visits by your telephone company representative to get it set up just right. Make sure you know exactly what you want before they get there. Then, make sure you got it before they leave. Installation can cost as little as nothing (if you hit a special or sign up for several years of service) to over $500.

You will require special hardware, called an NT-1, that allows the information being transmitted to be coded as digital, rather than analog. An ISDN device, which is similar to a modem, but includes the NT-1, will cost you between $220 and $500. You must also decide whether you want basic or expanded ISDN service. Basic service is two phone lines bonded together. The higher capacity service is actually three phone lines and can allow you to be connected via ISDN and still receive a call on the third channel, if desired. Full service ISDN (128Kbps) from Southwestern Bell is currently running at about $100 per month, depending on the terms of your contract.

Two other things to consider. First of all, to get the full benefit of ISDN, you must connect so another entity that also has ISDN. Just because you have the capability of 128Kbps doesn't mean that, when you dial into the office from home or a customer, you will also get 128Kbps. That only happens if you have ISDN at your house or your customer's place of business. And that leads to point number two. Your ISP will charge you more for connecting with ISDN. Instead of getting that $19.95 a month rate, you will probably pay between $40 and $70 per month for unlimited service. On the other hand, that may actually save you money over having three or four separate accounts with their own modems and connections.

If your company is bigger than 6 people and you do a LOT of Internet activity, such as servicing a web site, or actually running your own web server, you need a lot more than ISDN can even provide. The next big step is called T-1 and it has only been in the past three years that it has become popular even with smaller companies.


For years, only the big boys even knew what a T-1 was. Put in simple terms, a T-1 is 24 telephone lines in one wire. That provides the capacity to deliver as much as 1.55Mbps. That is to say that data can transfer from point-to-point at 1,550,000 bits per second. That's fast! Consequently, that's efficiency. If you have a company that has a web site, or you have at least six, eight or more people who use the World Wide Web as a marketing or research tool, or you are exchanging large files with several strategic partners or customers, then you will probably want to look into a T-1.

T-1 comes in several versions. Many times, you will hear a person refer to their "fractional T-1 line". What that means is that they do not have a full T-1. They have negotiated to pay for less than 1.55Mbps. Fractional T-1 can come in 256Kbps, 384Kbps, 512Kbps, 1024Kbps and so on. Your bandwidth provider - your ISP - can adjust just how much data can flow both ways. Naturally, the cost increases with the bandwidth. So, if you are too big for ISDN, but too small for a full T-1, you might want to look at a fractional T-1 line.

Some things to keep in mind when looking at T-1 are as follows:

Installation of a T-1 can run as much as $1,000, but is sometimes waived by the provider.

T-1 requires a device, called a router, that must be connected to your company's computer network, to give all employees the connectivity. Routers can range in price from $1,100 to over $3,000. In some cases, you ISP will include the router, if you sign a three-year contract.

You can contract for a lower bandwidth in the early days and have it increased as the need arises. That is a distinct advantage.

The monthly cost for the T-1 varies from provider to provider and is based on the length of term to which you are willing to commit. On average, most provider are charging between $1,000 and $1,400 per month for full T-1 capabilities, if you sign up for three years. Typically, they will throw in the router and, on occasion, installation.

Local Loop - The secret "Gotcha"

The monthly charge for the T-1 is what you pay to the ISP or bandwidth provider, but it is not the only charge for a T-1. The T-1 actually goes from the provider to the Central Office (CO) of your local telephone service provider. Naturally the telephone company must also get some cash for their services and that's called the "local loop". Here's where things get messy, again.

Local loop charges are based on the distance from your location to your CO. It is entirely possible that you could be closer to the CO of the neighboring community than you are to your own and there isn't really anything you can do about it. Also, the amount you pay per mile will vary, based on what type of service you are receiving from your provider. If your T-1 connection is what's called PPP, the mileage charge for your local loop will be lower than if you are running over what is referred to as Frame Relay. In fact, the costs can be almost triple. To give you an example, there was a St. Louis company that moved from a location several miles away from their CO to a location only four miles from their CO. They were told by the telephone company that their local loop charges would drop from $485 per month to $225 per month. However, the first bill they received for their local loop was for $699!!! Why? Because their new ISP was running a Frame Relay connection.

Getting the best bang for the buck!

One other point about T-1 is this. If you already have - or are anticipating acquiring - a digital telephone system, it is possible to have a T-1 brought into your office and split the bandwidth between your Internet connectivity and your regular telephone service. You will recall that a T-1 is actually 24 regular telephone lines. If you could pull six of the lines and use five of them for voice and one for fax, you would still have over 1Mbps of bandwidth for your Internet connection. You would also avoid the regular monthly charges you are currently paying for all your telephone lines. In many cases, saving the $60 or so per month/per line more than pays for the local loop charges and, in some cases, actually saves the company money while providing improved Internet connectivity.


The most important conclusion you should draw from this information is that there's too much information. Don't try to solve these issues on your own -- unless you are a well seasoned telecommunications specialist who is starting or running a company. Talk to a company that knows and understands telecommunications and Internet connectivity. Talk with several Internet Service Providers and get pricing for all connection speeds. Ask for a list of their BUSINESS customers you can speak with. If they won't give you one, don't do business with them. Also, ask other business associates who they are using and how they find the service and pricing. Find out what your prospective ISP is using to connect to the Internet. If your ISP is connected to the Web with a T-1, they are probably not going to be able to provide you with a T-1. That would suck up all their bandwidth from their other customers or leave none for you!

Take the time to speak to a good independent consultant who can point you in the right direction. It won't cost much - normally it takes two to four hours, so it could run between $200 and $500 -- and it will be money very well spent, possibly saving you hundreds per month in unneeded costs and long term contracts.

Here are some references:



10777 Sunset Office Drive

Suite 330

St. Louis, MO 63127

(314) 909.4066

(800) 799.2686


Southwestern Bell Internet Services

1651 N. Collins Blvd., Ste. 200

Richardson, TX 75080



A-Net Internet Service Providers

14220 Old Halls Ferry Road

Suite 201

St. Louis, MO 63034

(314) 653.2638


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The St. Louis Business Journal annually publishes its Book of Lists. This comprehensive guide includes lists of everything from Accounting firms and Architectural firms to Who's Who in various fields. It covers approximately 60 categories, including such diverse areas as executive and athletes' pay, privately held companies, school districts and colleges, and temporary-help firms. For the start-up business, these lists can be very valuable for locating services and prospective customers alike.

Sorkins' Directory of Business and Government

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EDUCATION by Jim Hahn, UM-Rolla Engineering Center, St. Louis

If you are starting a science or technology-based business, you will probably be concerned about sources of properly educated employees as well as continuing education for your current employees. In general, educational resources fall into two main categories: formal education and continuing education. Many institutions offer both types, but many do not.

The major institutions in the St. Louis area, and their offerings in the technological area are listed below. Note that most of them have many other programs, such as business schools which could be beneficial to the entrepreneur.


Southern Illinois University at Edwardsville (SIUE)

Public University with comprehensive programs in most fields. Technical programs include Physics, Chemistry, Biological Sciences, Civil Engineering, Electrical Engineering, Industrial Engineering and Mechanical Engineering , Computer Science and Mathematics. All offer degrees at the BS/BA level and some the MS or MA as well.

The University of Missouri-Rolla Engineering Education Center in St. Louis

8001 Natural Bridge Road

St. Louis, MO 63121


Branch of public university, located in St. Louis. Provides programs at MS level in Computer Science, Engineering Management, and most branches of Engineering.

Programs are tailored to needs of working students; all courses scheduled evenings or Saturdays, one meeting per week.

The University of Missouri-St. Louis

8001 Natural Bridge Road

St. Louis, MO 63121


Public university with comprehensive programs in most fields. Technical programs include Chemistry, Physics, Biology, Mathematics and Computer Science. The Ph.D. degree is available in several and the MA or MS in the others. In addition, a joint program between UM-St. Louis and Washington University provides a UM-St. Louis BS degree in several engineering fields for working students. As with the UMR MS program described above, all classes are held in the evenings or on Saturday.

Washington University

St. Louis, MO 63130
Private university with comprehensive programs in most fields. Technical programs include Chemistry, Physics, Biology, Mathematics, Computer Science and most major branches of Engineering. Degrees of B. S. and B. A. to D. Sc. and Ph.D.

Webster University

Private liberal arts institution, with B. S. degree in Computer Science; emphasis on Information Management available.

Lindenwood University

Private liberal arts institution, with B. S. degree in Management Information Systems.

Maryville University

Private liberal arts institution, with bachelor degree in Information Systems.

St. Louis University

Private University, with approximately 11,000 full and part-time undergraduate, graduate, and professional students. It has programs in Arts and Sciences; Business and Administration; Social Service; Law; Engineering, Aerospace, and Aviation Sciences; Public Health; Medicine; Nursing; and Allied Health Professions.

The University also has a School for Professional Studies. which serves the needs of the nontraditional student; e.g. weekend and evening classes, accelerated programs, and several sites across the St. Louis metropolitan area.

The University's School of Business and Administration is one of the 25 best business schools in the nation for entrepreneurs, according to the September 1996 issue of "Success" magazine. It has a nationally recognized Center for Entrepreneurial Studies, and also houses the state-funded Small Business Development Center.


The community colleges provide training for many sub-professional fields. In addition, many students choose to continue their education at a four-year institution. Some of the local community colleges are:

The St. Louis Community College District. With three campuses, the Community College District provides convenient access to most of St. Louis City and County.

The St. Charles County Community College provides similar convenience to the St. Charles County residents.

The Belleville Area College serves the St. Louis Metro-East area.

Several community colleges in outlying areas reasonably close to St. Louis are East Central Junior College in Union Missouri and the Mineral Area College in Flat River, Missouri.


Trade schools are an excellent source for technicians and crafts persons. In the St. Louis area, some of the major schools of this type are:

Rankin Tech

Missouri Technical School


The American Association of Industrial Management (AAIM) conducts training programs on a variety of topics. There are a number of commercial firms providing training on specialized subjects. These can be found in the Yellow Pages under "training."

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ENVIRONMENTAL CONSIDERATIONS, by David R. Erickson, Blackwell, Sanders, Peper, Martin

As you begin to consider the type of business you will be starting, as well as possible locations for your new business, you will need to address environmental concerns - environmental issues that both affect the business as well as issues caused by the business.

Environmental issues are regulated at the federal, state and local level. The main federal laws cover pollution due to past practices at the property (Superfund or CERCLA), ongoing practices at the property (RCRA), discharges to water (the Clean Water Act) and discharges to the air (the Clean Air Act), use of chemicals and new chemicals (TSCA), and community right to know (EPCRA or SARA Title III). These federal laws are enforced by the U.S. Environmental Protection Agency (EPA) and the U.S. Department of Justice. Most of these federal laws have similar state counterparts, which are enforced by each state's department of environmental protection and attorney general's office. At the local level, zoning, building and health codes may yet impose additional requirements.

One of the first questions you will need to consider is where your new business will be located. If you will be developing land, you may need to get predevelopment evaluation and approval under a variety of Federal laws. For example, will your new construction adversely affect any endangered or threatened species? Are you located in a floodplain or floodway? Will you be dredging or filling a wetlands? Does the location have a historical or cultural significance that affects the use, renovation or demolition of existing buildings?

Furthermore, as you plan your operations, you may need to get operational permits (such as air emissions, discharges to water from point and nonpoint sources, underground storage tanks, and sewer) before you begin. You may also want to inquire about transferring the previous property owner's permits to your new operation. It is often possible to transfer air, water and RCRA permits from one owner to the next, particularly in an industrial setting.

In addition, and in particular if you are buying or leasing existing space, you will need to consider further environmental issues. For example, you will want to have a baseline environmental assessment of the property performed prior to closing the transaction. This typically takes the form of a Phase I Environmental Site Assessment. The Phase I helps the purchaser set up an innocent purchaser defense under CERCLA if contamination is later found on the property and this contamination was caused prior to the purchaser's acquisition of the land.

The information obtained during the Phase I also puts the purchaser in a better negotiating position during the transaction because the purchaser and seller are on more even levels. The Phase I is a basic, non-intrusive look at the site and addresses issues of past land use and current condition as well as compliance with relevant environmental laws. You may want to include additional assessments to the basic Phase I, such as testing for asbestos, lead-based paint, radon and indoor air pollution.

In addition to the Phase I, you will also want to require that the seller make full disclosure of any known obvious or hidden environmental concerns on the property, or on property located near the land that might affect the property. You will also want to make your own independent investigation. Traditional concerns include previous on-site dumping of hazardous waste or chemicals that has resulted in contaminated soil, groundwater, surface water, and migration of this contamination off-site to adjacent property. Other concerns are underground storage tanks (have they been abandoned, are they leaking, are they in compliance with state requirements?), and PCB-contaminated transformers, capacitors and fluorescent light ballasts that might be or were leaking. Of course, depending on the type of business you envision starting, there are many more business-specific environmental issues you will want to address up front.

As you consider investigating a potential location for your new business, you will most likely want to hire an environmental consultant to perform the Phase I for you. Equally important is hiring an attorney to help you with all of the issues mentioned above, as well as to help interpret the Phase I results. You should hire your consultant through your lawyer to preserve the confidentiality of the report. Your lawyer will also craft the transactional documents to best protect you from liability associated with historic contamination of the site, if any.

Tied in with environmental concerns are those related to health and safety. Typically health and safety issues are regulated by OSHA, but the EPA and state agencies overlap on many topics, such as conditions surrounding lead-based paint, asbestos, proper use of construction materials, improper storage and handling of chemicals, and indoor air quality. These agencies overlap because the OSHA laws are designed to protect worker/employee safety, while the EPA laws are designed to protect the general public.

Additional overlap is found with the Department of Transportation, whose laws may affect your business, for example, if you plan on shipping hazardous chemicals. The DOT requires that certain labels be placed on the chemical containers, as well as on the trucks shipping the chemicals. Also, if you will be producing a product for consumer use, the Consumer Product Safety Commission requires very specific labeling to protect the customer. Coordinating the labeling requirements under OSHA, the DOT, the CPSC, and EPA is just one example of how these laws overlap and work with each other.

Once you are in business at your new location, you will have new environmental and health and safety issues to contend with. For example, and depending on your business, you will want to develop and implement an environmental awareness training program tailored to your business for all of your employees. You will also want to conduct periodic audits of your operations. However, you will want to consult with your lawyer before you undertake either of these programs to ensure that the programs, and any noncompliance they may uncover, can be dealt with most favorably to you and before the federal, state or local regulators get involved.

There are many resources available to help you work through the federal, state and local environmental laws and how they may affect your business. For example, the EPA and the Missouri Department of Natural Resources both have Web pages on the Internet that provide a basic summary of the laws and give contact names and phone numbers. In addition, the EPA provides general "hotlines" which you can call and ask specific questions. Some of these phone numbers are:

Asbestos Hotline 800-368-5888

Air Quality Hotline 202-260-5575

US Customs 202-927-6724

DOT Regulatory Hotline 800-467-4922

EPA Region VII 913-551-7000

EPA Headquarters 202-260-2090

EPA Office of Water 202-260-9545

EPCRA Hotline 800-424-9346

Electromagnetic Fields Hotline 800-363-2383

OSHA Region VII 913-483-9531

PCB Hotline 202-554-1404

RCRA Hotline 800-424-9346

Safe Drinking Water Hotline 800-426-4791

Superfund/CERCLA Hotline 800-424-9346

TSCA Hotline 202-554-1404

Underground Storage Tank Hotline 800-424-9346

Wetlands Hotline 800-832-7828

Because of the significant legal issues involved in the environmental area, qualified legal assistance should be sought for advice on managing hazardous materials, evaluating environmental risks in real estate and other transactions, etc. For qualified attorneys, consult the list of law firms listed under the heading legal assistance.

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EXPORTING by Ned Klein, Baring Private Equity Partners. Ltd.

Markets are increasingly global, and sooner or later, any business must consider export opportunities, but probably not during the early stages of business development. This, of course, depends on the individual situation. If the market exist only overseas, that is where the business must go. An early-stage high-tech start-up will have its hands full managing the domestic situation in markets it knows and understands.

However, when the time arrives to consider export possibilities, it is usually necessary to make arrangements with someone who knows the particular overseas market (who "knows the territory"). This can be a local partner who understands how business is done in the area, or a reputable agent. (At least one small company lost a substantial sum because of receivables it could not collect when its agent filed for bankruptcy.) It also is important to have a person in the company who has had experience in overseeing a successful export market initiative.

It is not the purpose of this Handbook to describe how to set up an overseas sales initiative, but the following resources will be useful:

Service Corps of Retired Executives (SCORE)

815 Olive Street (Old Post Office Building), Room 208.

Tel. 314-539-6970. SCORE is housed with the U. S. Small Business Administration

Contacts include: Carl Trautmann, Tel.: 314-256-3331

World Trade Center of St. Louis

121 S. Meramec Avenue

St. Louis, MO 63105

Tel: 314:854-6141

Contact: Bob Frue, Acting Director

World Trade Club of St. Louis, Inc.

121 S. Meramec Avenue

St. Louis, MO 63105

Tel: 314:725-9605

World Affairs Council of St. Louis

121 S. Meramec Avenue

St. Louis, MO 63105

Tel: 314-727-6402

U.S. Export Assistance Center (USEAC)

8182 Maryland Avenue, Suite 303

St. Louis, MO 63105

Tel: 314-425-3304, ext. 228

Contact: John Blum, ext. 228

Randy LaBounty, ext. 223

The Foreign Trade Association (?)

Professional Societies (e.g. the Commercial Development Association) (?)

U. S. Department of Commerce (Commercial Attaches) (?)

Legal assistance may be required to draft and provide advice relative to international distribution and trade agreements, as well as handling customs and import regulations. For a list of qualified legal firms, see the section on legal assistance.

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FACILITIES by Larry Cowsert, New Star Collaborative Technologies

No matter what kind of business you have, you are going to need facilities. If you are a brand new, out-of-the-box start-up, you will need facilities. If you are an existing business, but you're thinking of adding a new division or expanding to another market, you need facilities. Even if you are toying with the idea of starting a business, you need a facility from which your plans and dreams are explored and refined.

Many great businesses have started at the kitchen table. That's a facility! All one needs for the planning stage is a note pad, a calculator and a pencil. From there on, it gets a little trickier. In this section, we will attempt to give you some guidance on what resources are available to companies of many sizes and ages.

Concept stage:

This is the stage where you are mulling over what kind of business you would like to have. How you would run it. What resources you would need to get started. How much money it would take to get it up and running.

Most of these plans and designs can be handled at the "kitchen table", which can also be a home office, a desk in the bedroom or even a folding table in the basement. In this day and age, it would be nice to have a computer to do your financial modeling on, but that's optional in this phase. So, the concept phase is relatively easy to get to … you typically sleep there … and the rent, utilities and telephone are already being paid for.

As a note: There are dozens of different types of businesses that never have to leave the home. There are direct mail companies, direct marketing companies, manufacturing representatives, accounting and financial services, computer consultants, software developers and many other businesses who do an excellent job of working from their home offices. Furthermore, many companies have chosen to operate as "virtual corporations", contracting out many of their peripheral needs and minimizing the need for high cost work space for employees. (We will hit on this point later, when we discuss Office Suites.)


So you've decided on the perfect money making business and you've written a killer of a business plan. You've convinced you mother, brother, sister and two cousins to invest in your new idea. You may have even gotten a few bucks from some friends. You've also made sure that your Visa card is paid off and your limit is raised. You are now ready to look for the perfect place to launch the next Dell Computer or Glaxo Pharmaceutical. The first thing you have to do is answer a few questions.

How many people will I have, to start out and how long before I add more?

Do we need wet lab facilities?

Shipping docks?

Special telecommunications access?

Meeting rooms or training facilities?

Manufacturing facilities?

Warehouse Space?

Will all the employees be housed in one location, or can some work from home?

What is my budget for space?

Am I willing to sign a long-term commitment?

Can I afford a long-term commitment?

These are just a few, and I do mean a FEW of the many questions you should be pondering. But, for a startup in St. Louis, there are some real opportunities to get the space you need, but only pay for the space you use. There are two different types of facilities that would probably fit the bill. Incubators and Office Suites. Let's discuss the Office Suites first.

Office Suites

There are several companies throughout the U.S. that provide office facilities on a "room-by-room" basis. You are able to rent a one room office or several rooms within the office suite, depending on your needs. Each room typically comes with furniture and a telephone. Most of the newer Suite services also provide either an extra telephone line for modem access, or they provide a network outlet so you can use their server and, perhaps even their high speed Internet connection. These facilities are not necessarily cheap. In fact, if you go for the corner office with the high-end furniture and the plants, you can spend as much as $1,000 per month or more. On the other hand, that includes the furniture, fixtures (pictures, etc.), multi-line telephone, someone answering your phone by your company name, a receptionist, a copier (billed by the copy), a fax machine (if you don't use your own), a very attractive waiting room with receptionist, and even secretarial services. It is possible that, if you plan on having only a one or two man office, this could be the best - and least expensive - choice. Do the research and visit several of these. One thing to consider, though. You will typically NOT find bio-chemical labs at these types of facilities.


Incubators are very similar to Office Suites, except that they are typically funded by some governmental agency (federal, state or local - sometimes in combination) and, therefore, provide facilities at reduced prices. They are usually medium sized facilities that provide office space, meeting rooms, telephone services, copier and fax services and, in some cases, wet labs for bio-tech startups. As in the case of Office Suites, you would rent one or more rooms, based on your requirements, and you would have use of all the other facilities. One more thing that Incubators provide that you would not likely get at an Office Suite is support. In an Incubator, the administration of the facility is charged with doing all they can to help your venture succeed. Their purpose for existence is to create as many success stories as they can so they can continue to receive their funding. That's not a bad thing. It's just their primary motivation and that's good for you. There is also support from an equally important source and that's peers. Everyone else in the Incubator is a startup, as well. That means you can all sit around the coffee machine and swap war stories of how the big deal got away or how you are creating the next step in "no-spam" e-mail. More than likely, at one of these social gatherings, one of the other tenants is going to say something or recommend that you talk with someone and that little piece of advice can be the catalyst to launch your venture to the next level. That is priceless support. And, it's included in the monthly rent!

Early Stage

When your company has grown to the point that: a) it is too expensive to rent space a room at a time; b) your revenues are such that you can afford your own facilities; or c) you have received investment funding from outside sources and are ready to move to the next level of growth, you will need to consider your own private facilities. There are hundreds of office buildings in the St. Louis region and hundreds of commercial real estate brokers who are prepared to show them to you.

For most of the technology companies concentrating in telecommunications, you will find some exceptional facilities along what is fast becoming known as the "Technology Corridor". That is the area along I-64/US-40 between 270 and the Missouri River. Along that stretch of road, you will find such companies as WorldCom, Advance Communications Group, IBM, Hewlett Packard, Ameritech, Brooks Fiber, and many local technology companies. However, the rent is not cheap in this neighborhood, so be prepared to pay a hefty price for location.

Another area that is good for technology but with some less expensive spaces would be the Westport area. This industrial park, located both north and south of Page, just east of I-270 has lots of low-rise, one and two-story office buildings, some of which do actually have facilities for wet labs. There are several early stage software and bio-tech companies in that area.

For the best bet in finding most appropriate location, at the best price, contact a reputable commercial real estate agent or broker. Ask around. By the time you've reached the Early Stages of your company, you should have made some friends in the business who have already gotten there. They have a lot of answers to your questions and can help steer you to the right person or the right location.


This one we don't need to spend a lot of time on. By the time you get to this stage, you've learned most of the rules. You've moved through the process and know how to manage your resources. You are on the way. Moreover, you probably are playing golf with your commercial real estate agent at least once a month and he/she has been on the lookout for your next facility for the past year. Let them do the work for you. That's what they get paid to do. That way, you get an extra round of golf in this week, instead of looking at raw land or an unfinished building.

Here is a list of just a few of the Incubators in the St. Louis Metropolitan area. If you look in the Yellow Pages under "Office Space", you will find listings for several Office Suite type facilities. Also, there are many companies who have down-sized but have long-term leases on more facilities than they now need. In many cases, these companies are renting space room-by-room and providing some services to boot, such as copiers, faxes, Internet access and the like. You can find out about some of these offers by checking out the classified section of the St. Louis Business Journal or the St. Louis Post-Dispatch.



Center for Emerging Technologies
4041 Forest Park Blvd
St. Louis, MO 63108
Marcia Mellitz, President, 314-615-6903, mmellitz@emerging tech.org , fax: 314-615-6901
Bill Simon, Vice President, 314-615-6903, bsimon@emergingtech.org, fax 314-615-6901
St. Charles County Synergy Center
Chesterfield Enterprise Center
Missouri Innovation Center
5650A South Sinclair Road
Columbia, MO 65203
Contact: Chip Cooper
Fax: 573-443-3478

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FAILURES of new companies by Ned Klein, Baring Private Equity Partners, Ltd.

Where there is an upside, there is also a potential downside in any high-tech start-up. The most general statement for why a business fails is that it runs out of money before it achieves its initial objectives (it has not "made plan") and cannot convince its investors that it is worth putting up additional funds. Faced with a high expenses ("burn rate") it must fold or fade away.

This is a simple way of stating what can be an extremely complex process. A high-tech start-up often faces two compounded uncertainties: the uncertainty of the technology and the uncertainty of the market. If each uncertainty has a 50% probability, the overall probability of success is only 25%, the product of the two.

This means that timing becomes extremely critical. Often high-tech start-ups fail, not because the concept is wrong, but because the whole process takes much longer than expected and planned. It is rare that high-tech start-ups "make their original plan" There are countless examples of successful start-ups which have been through several rounds of finance before they finally reached break-even.

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FINANCING by Ned Klein, Baring Private Equity Partners, Ltd.

The financing of any new enterprise begins with the creation of a Business Plan, and the following are two sources are excellent places to start:

William A. Sahlman, "How to Write a Great Business Plan", Harvard Business Review, July-August 1997, page 98.

David Gladstone, Venture Capital Handbook, Prentice Hall, Englewood Cliffs, NJ 07632

The following comments are in the nature of some additional summary observations.

There are two general ways to get money to start a new business:

1. The sale of equity in the business, thus giving up part of the ownership

2. Borrowing (taking on debt)

Of the two, the equity route is often the most practical for major funding of a small start-up company with no fixed assets or collateral upon which to borrow. However, sometimes the only way for an entrepreneur to get started is borrowing "seed" money from friends and relatives or by taking a second mortgage on his house. For major funding, the best use of hard-to-get cash in any new business is for the building of value, not for the payment of interest (the financing of debt).

Another source of early-stage "seed" capital is from "angels", a term which has been applied to wealthy individuals interested in participating in new ventures. "Angels" might be individuals who have had previous successes in venturing, like Paul Allen, one of the founders of Microsoft.

The Missouri Venture Forum was set up to bring together entrepreneurs with new business ideas with individuals interested in early-stage investments. It holds breakfast meetings on the first Friday of every month, and details can be obtained by contacting Judy Taylor at 241-9178.

Venture capital firms are more likely to become funding sources after the "seed" stage. These subsequent stages are conventionally defined as

I. Development Stage or Second Round

I. Expansion Stage or Third Round and

II. Growth Stage or Fourth Round.

A new early-stage funding development in Missouri is the authorization of "CapCos." These are early-stage venture capital funds raised from insurance companies who are granted tax benefits from the state for making the investments. CapCos represent a $50 million source for equity investments and unsecured loans for Missouri companies. Three CapCos recently certified are Gateway CAPCO, LLC (BOME Investors, Inc.), Advantage Capital Missouri Partners, and Stifel CAPCO, LLC

One of the key issues faced by the first-time entrepreneur is the prospect of giving up ownership in his enterprise, but in the absence of a collateral base, he often has no choice. Looked at positively, there is an old saying in the venture capital industry: "Would you rather own 100% of a struggling $500,000 business or 25% of a viable $100 million business?" The prospects for growing a $50 to $100 million business without major infusions of equity capital are not very great, although there are exceptions which prove the rule.

Some basic terms:

Commitment Letter - The primary instrument defining the terms and conditions for a loan.

Investment Memorandum or Term Sheet - The primary instrument which spells out the business deal, not the legal deal, for sale of equity. It is in the nature of a non-binding Letter of Intent which will be later be referred to lawyers for producing the appropriate legal documents such as formal Stock Purchase Agreements and Articles of Incorporation. A term sheet can even be on one page as the following example shows:

"Liquidation preference: in the event of liquidation, sale, merger, consolidation or winding up of NewTech Co., the investor will be entitled to receive, prior to distribution on the basis of share holding positions, an amount pro-rata of the investment amount with a maximum equal to the purchase price of its shares.

III. Anti-dilution provisions: if during the first two years after the investment, NewTech Co. issues additional shares at a purchase price less than the price paid by the investor in this investment round (excluding shares issued to employees in the form of stock options and stock purchase plans), the number of shares acquired by the investor in this investment round will be adjusted as if the current investment by the investor would have taken place at this lower valuation, in order to diminish the dilutive effect for the investor.

IV. Registration rights: In case of an IPO or secondary offering the investor may request to sell its shares pro-rata of the other shareholders.

V. Information rights: NewTech Co. will provide the investor with monthly unaudited balance sheets and profit/loss accounts, annual audited balance sheets and profit/loss accounts, annual budgets and annual cash flow projections.

VI. First refusal rights : If new shares are issued or if a shareholder proposes to offer shares for sales, these shares will first have to be offered to all other shareholders.

VII. Tag-along clause: When a shareholder proposes to offer shares to third parties, this shareholder will have to include in this offer the shares of those other shareholders interested in selling."

The above discussion tends to imply a choice of either debt or equity financing. Actually there are various compromises and combinations of the two. For example, once a new enterprise receives equity financing, then it becomes important to obtain a line of bank credit to finance, for example, receivables. Also, there are other instruments besides common stock. Among them:

Convertible preferred stock - Non-voting but convertible in the future to voting common

Convertible debentures - Essentially loans convertible later to equity shares.

Warrants - Options which permit the holder to buy shares in the future at a fixed price (the "strike" price). Warrants are often issued to "sweeten" a debenture offering.

Another approach which has been used by some venture capital firms, but is now less common, according to the Venture Capital Handbook, is the Voting Trust. It is a technique which enables the venture capitalist, who is usually a minority holder, to step in and take control if things get out of hand. The venture capital firm can exercise its rights under the voting trust, vote the shares of the company, and elect a new board of directors favorably disposed to the venture capital firm. A more typical way for the venture capitalist to take control if things get out of hand is based on the fact that the entrepreneur, under those circumstances, is usually way off his plan and needs money; the time will then have arrived to restructure the deal.

Information on local sources of venture capital can be obtained from the following:

Olin Hatchery, Olin School of Business, Washington University has a program in which graduate students write business plans for outside entrepreneurs or their own ideas and present them to a panel of investors. Contact: Prof. Russell Roberts, Director, Management Center.

Missouri Venture Forum

c/o Judy Taylor

917 Locust Street, 5th Floor

St. Louis, MO 63101

Tel.: 314-241-9178

Gateway CAPCO, LLC (BOME Investors, Inc.)

8000 Maryland Avenue, Suite 1190

St. Louis, MO 63105

Tel.: 314-721-5707

Contact: Dr. Gregory Johnson

Advantage Capital Missouri Partners

7733 Forsyth Street

Suite 1600

St. Louis, MO 63105

Tel.: 314-725-8922

Contacts: Scott Zajac or David Bergmann


500 North Broadway

Suite 1400

St. Louis, MO 63102

Tel.: 314-342-4002

FAX: 314-342-2179

Contact: Jim Lahay

Baring Private Equity Partners, Ltd.

P.O. Box 12491

St. Louis, MO 63132

Tel: 314-993-0007

Contact: L. Edward Klein

CAN DO Club, an organization of potential investors in early-stage start-ups.

P.O. Box 411604

St. Louis, MO 63141

Contact: Marc W. Braun

St. Louis Angel Network, Inc., an organization of accredited investors who make investments in technology-based companies which are located in St. Louis.

One Metropolitan Square, Suite 2600

St. Louis, MO 63102

Contact: Andrew T. Hoyne, Armstrong-Teasdale LLP

Tel: 314-342-8066


The Stolar Partnership


One approach to financing is to use a placement agent to help organize an offering memorandum and to approach a wide audience of investors. An excellent listing of agents is provided in DealMakers Digest, 1955-96 St. Louis Edition.

Missouri Investors Center


There are many publications on the subject of financing new companies. Some of the better ones, which include information about angels as well as venture capitalists, are:

William A. Sahlman, "How to Write a Great Business Plan," Harvard Business Review, July-August 1997, page 98.

David Gladstone, Venture Capital Handbook, Prentice Hall, Englewood Cliffs, NJ 07632

Start-Up Companies: Planning, Financing and Operating the Successful Business, Law Journal Seminars-Press, 345 Park Avenue South, New York, New York 10010. This two-volume set contains twenty-two chapters written by "distinguished experts from the nation's leading law, accounting and venture capital firms." Updated annually, the set is a well-done and comprehensive reference resource. It is not bedtime reading.

Pratt's Guide to Venture Capital Sources, Securities Data Publishing, Inc., 40 West 57th Street, New York, New York 10019. This annual directory contains investment, operating and management data on nearly 800 venture capital firms. The Guide includes eighteen articles written by prominent venture capitalists, attorneys and entrepreneurs who provide a look at where venture capital is headed, how to structure a venture investment, legal considerations, etc. Bear in mind that the articles are written from the viewpoints of professional venture capitalists, not business angels. The Guide is not cheap.

The Guide for Venture Investing Angels, Arthur Lipper III, Missouri Innovation Center Publications, 5650A South Sinclair Road, Columbia, MO 65203. This is a useful guide for angel investors who have $50,000 to $250,000 available for investment in early-stage companies and for entrepreneurs seeking such an investment. Based on more than 42 years experience, the author offers help for angels in minimizing losses as well as maximizing gains. Entrepreneurs will learn more of investors' fears and needs, as well as the techniques that best accommodate the needs and wishes of investors. This is one of the few guides written by and for private equity investors. Bear in mind that it represents one investor's point of view. Angels come in a variety of shapes and sizes.

Structuring Venture Capital, Private Equity, and Entrepreneurial Transactions, Jack S. Levin, CCH Inc., 4025 West Peterson Avenue, Chicago, IL 60646-6085. This book addresses (1) the general nature of venture capital, private equity, and entrepreneurial transactions and (2) the legal, tax, economic, and practical implications of structuring these transactions. It is designed to be used in a law school or business school course but is also suitable for use by a lawyer, accountant, investment banker, venture capitalist or private equity investor.

Directory of Venture Capital, C.E. Lister & T.D. Harnish, John Wiley & Sons, New York. This directory is designed to help business owners, advisors and others determine if they, or their clients, are candidates for professional venture capital and, if so, which venture firms to approach. The directory includes over 600 of the nation's most active venture capital firms. The book is a resource for planning an organized, targeted search for capital. Sample term sheets, forms and agreements are included. Like Pratt's Guide, this book focuses on raising funds in the institutional venture capital market.

New Venture Creation: Entrepreneurship in the 1990's, Jeffrey A. Timmons, Irwin, Homewood, IL 60430. Probably the most widely used university-level text in the field of entrepreneurship. The book is about the actual process of getting a new venture started, growing the venture, successfully harvesting it, and starting again. The chapters and cases devoted to financing entrepreneurial ventures are well worth reading. The appendices include sample term sheets, investment agreements and vesting and stock restriction agreements.

A Financing Guide for Recycling Businesses: Investment Forums, Meetings and Networks, KirkWorks, National Recycling Coalition & the U.S. Environmental Protection Agency, available from RCRA Hotline (800) 424-9346. This Guide is well written and relevant for start-up ventures in any field. Investors, as well as entrepreneurs, looking for local organizations with which to connect will find Chapter 5: Investment Forum, Meeting, Network and Association Directory especially helpful.

"A Driving Vision Sees the Light," Manager's Journal (op ed page), Wall Street Journal, February 3, 1997. Don't miss this tale about raising capital from angels. If and when permission is received from the Journal, the text of this article will be included in the Table of Contents.

Some Internet-based sources of financing information are:

GetSmart's Business Finance Center (www.getsmart.com) matches business owners with prospective lenders. Users select the type of financing they are looking for and fill out the site's proprietary SmartMatch application. The application is then used to generate a list of appropriate vendors from GetSmart's member base. Users are then contacted by phone.

Intuit's Quicken Business Cashfinder (www.cashfinder.com) provides a downloadable software application that automates the credit application process. Business owners can review more than 30 credit options proposed by the 10 participating financial institutions. They can then download the software, which simultaneously fills out multiple credit applications. These are printed out, signed and sent by mail to the participating institutions, which generally respond within 48 hours.

ACE-Net is a nationwide Internet-based listing service that provides information to angel investors on small, dynamic, growing businesses seeking $250,000 to $5 million in equity financing. ACE-Net, sponsored by the Office of Advocacy of the U.S. Small Business Administration, was announced by the President of the United States in October 1996. It is a major effort by the Office of Advocacy to start systematizing, on a nationwide basis, and expanding information available to investors on firms seeking equity financing. ACE-Net's Internet address is https://ace-net.sr.unh.edu.

Another on-line information on "angels" is available at: http://www.venvest.com/avia.html, a networking group for angels http://www.venturesite.co.uh/alist.html, a list of 65 angels looking for investment proposals in various categories and finally http://www.thevine.com or info@thevine.com for those interested in listing themselves as an angel investor.

Several companies are in the business of matching start-up companies with investors.

PriCap, www.pricap.com and edie-online, www.edie-online.com are examples,

Another, www.garage.com claims to screen potential companies more carefully than the others.

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GENERAL sources of help, by Jim Hahn, UM-Rolla Engineering Education Center, St. Louis

If you don't know where to turn for assistance with your start-up business, the St. Louis Regional Commerce and Growth Association should be your first stop. The RCGA provides a wide ranges of services for new and small businesses. Some are detailed under the Managerial Assistance section of this handbook, but there are many others available. For information on them, call the RCGA at 314-231-5555.

The American Institute of Small Business has available a two-volume set of books on "How to Set Up Your Own Small Business". They are intended for the person starting a new business, written in layman language and contain numerous examples and case studies. The cover the entire range of necessary activities for starting a new business. For information, call the Institute at 800-328-2906.

Small Business Development Center (SBDC) - consulting, training

3750 Lindell, 243 McGannon Hall

St. Louis, MO 63108


Mid-America Manufacturing Technology Center (MAMTC)

12208 Missouri Bottom Road

St. Louis, MO 63042

Tel.: 314-731-1110

The center will perform up to eight hours of free consulting work in manufacturing for small to medium-sized companies. There are two other locations in St. Louis and St. Charles.

Missouri Enterprise

St. Louis County Economic Council - Guaranteed Loan Program, Enterprise Centers

121 S. Meramec


Small Business Administration (SBA) - Advocacy, guaranteed loan program, SCORE (Service Corp of Retired Executives)

815 Olive

St. Louis, MO 63101


Department of Commerce - The Commercial Service

8182 Maryland


MO Department of Economic Development - loan programs, job training, international trade

111 North 7th


The First Stop Shop - for assistance with a variety of start up questions regarding doing business in the state of Missouri


St. Louis Development Corporation - guaranteed and special loan programs

330 N. 15th


Business Assistance Office

St. Louis City Hall


St. Charles County Economic Development Council

5988 Mid Rivers Mall Drive


Economic Development Corporation of Jefferson County

P.O. Box 623

Hillsboro, MO


Regional Commerce and Growth Association (RCGA)

#1 Metropolitan Square, Suite 1300

St. Louis, MO 63102


National Association of Women Business Owners (NAWBO)

7165 Delmar Boulevard, Suite 204

St. Louis, MO 63130


Irina Bronstein, Executive Director

Inventors Association of St. Louis (IASL)

P.O. Box 16544

St. Louis, MO 63105


St. Louis Enterprise Center (Incubator)

3830 Washington Boulevard 743 Spirit 40 Park Drive

St. Louis, MO 63108 Chesterfield, MO 63005

534-1818 519-4700

The RCGA conducts an excellent series of programs in its Business Management Institute, designed to help you start and operate a business. A recent lineup included:


What Is In Your Marketing Bag of Tricks?

Make A Winning Presentation

Creating Strategic Alliances For Maximizing Overseas Marketing

You Ought To Be In Pictures-Guidelines For Effective Media Relations


Dialing For Dollars---Effective Telemarketing Techniques

Why Sales People Fail And What To Do About It

Networking: Getting A Return For Your Investment In Organizations

Using Technology To Sell Internationally


Finding Your Way Through The Legal Maze Of Employment Law

Make Your Employees Your Biggest Fans!

Entrepreneurial mentality: The Key To Individual And Organizational Success

Dealing With STRESS!


Electronic Payments Forum

The Dynamics Of A Closely-Held Business

Preparing Your Business For Sale

Credit Plus Collections Equals Cash

In addition to the Business Management Institute, the RCGA also sponsors the following:

CEO Roundtable: Your Small Business Board Of Advisers

CEOs of small- to mid-sized, non-competing businesses meet on a monthly basis to discuss management issues in a confidential forum. Established in 1992, the RCGA CEO Roundtable program provides CEOs with the opportunity to improve their companies by creating a surrogate board of directors. CEOs share experiences, challenges and opportunities with and get advice and support from CEOs of similarly-sized companies. The RCGA provides a professional facilitator to support each CEO Roundtable group which typically consists of 8-10 members. Outside guest speakers and consultants are often scheduled.

RCGA Leads Connection To Help Your Business Do More Business!

RCGA Leads Connection is the premier leads program in the St. Louis region and is designed to help businesses increase their sales. Owners, sales managers and sales persons, and professionals from several diverse, non-competing businesses meet every two weeks to exchange tips, leads, ideas and information. RCGA presently has three Leads Connection groups.

Premier FastTrac

An 11-week business development program for existing companies that coaches entrepreneurs through the creating and development of a growth-oriented business plan. Premier FasTrac is presented by the RCGA's Business Services Council in partnership with the Missouri Small Business Development Center at Saint Louis University and the St. Charles County Economic Development Council. Through certified instructors and counselors, Premier FastTrac provides the skills, tools and connection to ongoing resources, to help growing companies take their operations and profits to the next level. Modeled after highly successful programs in Denver, Los Angeles, and other cities, Premier FastTrac is a proven resource for entrepreneurial growth. Over a 10-year period nationally, 40-50 percent of the graduates have experienced more than doubled sales growth within two years of graduation; 20-40 percent experienced improved full-time job creation one year after graduation; and 90 percent are still in business five years after graduation. Classes are offered in the spring and fall at Saint Louis University and at the Small Business Synergy Center in St. Charles. A seven week FastTrac program for aspiring entrepreneurs is also offered.

For information about CEO Roundtable, RCGA Leads Connection and Premier FastTrac, contact Kelly Ferrara,

RCGA Business Service Manager at (314) 444-1147.

Team Small Business

The RCGA makes getting connected to the RCGA easy for smaller companies with Team Small Business, a one-stop shopping approach for small business members. Team Small Business makes all of the RCGA's networking opportunities, events, education programs, legislative issues, and economic development resources accessible. As a small business member of the RCGA, you need only call one person to learn about any RCGA program or resource. Team Small Business is the RCGA's way to help you make the most of your RCGA membership.

To get connected, contact Michelle Fredeking, RCGA Member Relations Manager, at (314) 444-1148.

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GOVERNMENT, Domestic by Charles Zurheide, Zurheide-Hermann, Inc.

The initial step in evaluating compliance with government requirements is to establish with your attorney the form of business best suited to your particular circumstances. It is to say that decision made whether the business be conducted as a standard corporation, an S corporation, a limited liability corporation, partnership, individual owned business or an individually owned business operating under fictitious name.

Having made that decision, the description of the business entity should be registered with the Secretary of State in the state in which the business is to be transacted. In order to make future use of the State courts for litigation that may confront the company in all states that the company plans to do business, filing with the Secretary of State of each state should be made and approval to do business in that state obtained from the appropriate state official. An application should be made to the Federal Department of Labor to obtain EIN (Employer Identification Number) which will be used for future withholding tax deposits and necessary reporting to federal and state agencies.

After satisfying the basic requirements it is then important to identify the local and state requirements for doing business in the location selected for the principal operation. Often times, business licenses are required in various states and in local municipalities. If the business involves providing the general public professional services vs. the sale of a product, states often require registration licensing of the principals in charge for providing the professional services being offered to the public. Your attorney should advise what licensing requirements exist in the locations to be served. An application should be made to the appropriate state or municipal boards. Empower the issued license so that qualifications may be established and responsible individuals can be identified.

Before deciding upon a location for the business, an investigation should be made of local zoning to determine whether the products to be handled, the traffic developed, or the business to be conducted is permissible in the area where the business is to be located. If any of these are in doubt, contact should be made with the local authorities to identify necessary procedures. Should the new business involve the need to modify existing buildings, it is likely that qualified contractors will have to be hired and building permits obtained for the various trades that may be involved in the building modifications. These modifications may well require the design services of licensed architects and engineers in order to obtain permits. If the business to be undertaken involves the handling, processing or disposal of classified or hazardous materials, contact with representatives of state and local government should be made to make certain that the methods and processes to be employed will in fact satisfy the established regulations.

In summary, the intent of this effort is to make a public declaration of the ownership of the business and the principals involved, to establish appropriate relations with federal, state and local governments so as to comply with necessary statutes and regulations and to establish qualifications to satisfy the licensing and taxing authorities, and those agencies protecting the public welfare. Your attorney is probably the best source to assist in identifying the specific steps to be taken.

State and Federal Laws

Having identified the business format and after making contact with all government agencies as previously outlined, the business will begin to receive instructions as the agencies deem appropriate. These will included: payroll instructions involving withholding tax deposits, forms to be completed by employees, safe work practices, and reporting requirement. Obtaining workmen's compensation insurance is desirable for every business and is mandatory for businesses employing more than eight (8) people. The details of business in corporate practice are best described by your attorney, but some information can be gained from the Secretary of State, and in the case of professional practice, the State Registration Board controlling the profession being offered by the business. For the practice of architecture, professional engineering and land surveying, in Missouri the authority is the Missouri Board for Architects, Professional Engineers and Land Surveyors, Jefferson City, Missouri.

State and Federal Legislation

In the event that the conduct of your business identifies the need for new legislation or for revisions to existing legislation, the best source is to contact other organizations with members doing business similar to the business selected. By discussions with that organization, one can reach a consensus as to the necessary moves and perhaps interest the group in putting the power of the organization behind the selected legislation.

Contact with the elected official, council member, or alderman for a municipal government, state representative or senator for the State government is always helpful. These elected officials often desire to obtain information from properly qualified professionals on legislative matters which most elected officials are ill-equipped to deal with. The RCGA through its lobbyists and established committees can be helpful if the subject legislation is of general interest or if the proposal seems to justify participation by RCGA in total. Certainly all should be kept informed and a request should be made to the elected officials to furnish copies of proposed legislation.

List of Contacts:

Federal ID Number IRS

Application Form Federal Tax Forms Ordering (1-800-829-3676)

City of St. Louis

Comptrollers Office (625-3588)

Business Assistance Office (622-4120)

Business License Bureau (622-4528)

St. Louis County

(41 S. Central, Clayton, Missouri 63105)

Small Business Development (889-7663)

Department of Revenue/Business Only (889-2141)

Collector of Revenue (889-2869)

State of Missouri

Office of Secretary of State

600 W. Main and 208 State Capitol

P.O. Box 778
Jefferson City, Missouri 65102

Registration Board for Architects, Professional Engineers and Land Surveyors

P.O. Box 184

Jefferson City, Missouri 65102

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GOVERNMENT, FOREIGN by Jim Hahn, UM-Rolla Engineering Center, St. Louis

For the entrepreneur who wants to export products, dealing with foreign governments will represent a whole new experience. The laws and business practices that we take for granted in the U. S. are completely different in many other countries.

Some of the areas which can represent real problems for companies just entering a market include:


Your operations in another country will be subject to the same sort of business requirements as they are in the U.S. Licenses and other permits to operate will be required, but they will be different than those you need in the U.S. Banking laws are different. An agent in the country where you hope to do business, as discussed in the section on Exporting, can go a long way towards handling the necessary business issues. An agent fluent in the local language, who knows the local business climate, can prevent costly mistakes and can recommend local professionals such as attorneys and accountants when such are needed.


Technological laws and practices vary substantially from country to country. The best known example is probably the AC power supply. The U.S. standard of 120/240 volts, 60 Hz is used in only a few other parts of the world. The supply mains in some countries carry anywhere from 100 to 240 volts, and very likely 50Hz. Furthermore, the connectors, wiring and required insulation colors are likely to be different. Shipping a product to other countries without making provision for the local current is economic suicide.

Similar considerations concern the communications infrastructure. Although the situation is changing, the telecommunications facilities are owned by the government in many countries. In any case, whether the facilities are publicly or privately owned, the rules governing the use of the facilities and interconnecting with them will likely be different. For example, in the U. S., the maximum (and perhaps minimum) signal levels on the telephone lines will be specified, signals at certain frequencies may be prohibited because they interfere with the carrier's control signals, line impedances may be different, etc. However, the limits are likely to be different in other countries. The same philosophy applies to radio signals. All of these rules, and many more like them, are the domain of the regulatory bodies in the various companies.


The treatment of intellectual property will also be different from one country to another. For example, the U.S. patent systems generally awards patents to the original inventors, while other countries such as Japan, patents are awarded to those who file first. An awareness of such rules is necessary to protect your ideas from being legally "stolen" by competitors in another country. The section on Intellectual Property will give you some ideas on areas to be considered. Just make sure you find out how those areas are handled in the countries in which you intend to do business.


In each country there will be regulatory agencies that develop and publish regulations concerning the performance and safety of your products. For example, there will be counterparts to the FCC in the U.S and the CSA in Canada which publish standards for telecommunications equipment.

A good agent in the target country can be immensely helpful in determining just which agencies are involved, which regulatory standards have to be observed, and how best to meet them. Some of the more prominent standards bodies are listed in the section on standards.

Other important steps to consider include the use of the metric system for physical quantities, translation of your manuals into the native language, observance of local customs and idiom, and attention to prevailing safety standards. The advent of the European Economic Community (EEC) promises to simplify some of these requirements in the long run, but may case significant difficulties during the transition from local control to EEC control within the next few years. The section on importing also contains some good information on dealing with the various entities in other countries.

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HUMAN RESOURCES by Barry Flachsbart, Union Pacific Technologies

Attracting and keeping key personnel is one of the biggest challenges facing the start-up company. Initially, the founders can rely on their network of friends and previous co-workers to find people whose skills and characteristics they know well. There comes a time, however, when that network is exhausted, and new talent must be recruited. This event may well mark the start of the transition from the personalized, informal phase of the company to the more formal phase of professional management. It can also generate substantial concern on the part of the founders, related to the hiring of people whose real personalities and skills are only partly understood, at best.

Besides the usual admonition to be very cautious about hiring relatives, recruiters generally suggest the following considerations in hiring new employees:

  1. Accept the fact that money is a motivating factor only to a certain degree
  2. Emphasize your company's unique advantages over potential competitors - for example, flexible hours, in-house training, company-provided workout facilities or child care, educational assistance, options to work from home, stock option plans, and any others that companies competing for the employee may not offer.
  3. Recognize that the potential employee's family may have a strong voice in the choice of an employer or location. Finding out and accommodating the prospective employee's spouse, even to the point of finding a position for that person, may be necessary to attract a particularly desirable candidate.

Finding key technologists and executives is only one part of the human resources challenge - retaining them is equally important.

In addition to standard sources for hiring assistance, such as the recruiting organizations and temporary help organizations listed in the yellow pages, some of the educational institutions can make opportunities known to their students - both full time students and, perhaps more important, part-time students who may already have experience. The Educational section of this handbook provides a list of these kind of resources. Retention of employees is always difficult, but can often be aided by establishing effective benefit plans and by providing stock options. Some resources to aid in constructing benefit plans:

Greg Stewart of National Financial Services:

Phone: 314/542-9335

FAX: 314/542-0884

Chris Thixton of Pension Consultants;

Phone: 417/889-9584

FAX: 417/889-9962

The Retirement Sales Support group of Scudder Kemper Investments, Inc.:

Phone: 800/621-5027, x 7830

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IMPORTING by Tom Hagerty, Hagerty Enterprises

As with any business, high technology start-ups are searching the world for quality and price. Included here is basic information to help you get started with importing if that appears to be a potentially profitable course of action. Below is a list of sources for information:

  1. International Business Information: How to find it, how to use it by Ruth A. Pagell and Michael Halperin (Oryx Press, 1994)
  2. Contact the World Trade Center in St. Louis at telephone 854-6141. They have international trade specialists who can provide counseling.
  3. World Business Directory (World Trade Centers Association) information 800-877- GALE (www.thomson.com/gale/)..
  4. Thomas Register. (www.thomasregister.com) This workhorse publication has an international version. Call 212-290-7279.
  5. Europages (www.europages.com) lists 150,000 European suppliers and their products.
  6. United States Customs House Guide (North American Publishing). This publication includes a guide on how to import with information on the North American Free trade Agreement, customs audits, and insurance.
  7. Directory of United States Importers (Journal of Commerce, 1998). This work

provides a listing of imported products classified by product code.

Engaging in importing may require legal assistance to draft international distribution and similar agreements, to advise in international trade regulatory matters, assist with customs and import regulatory compliance, etc.

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INSURANCE by Tom Hagerty, Hagerty Enterprises

When you begin to evaluate insurance coverage for liability and property exposure, you might consider employing the services of an insurance brokerage firm. These firms offer a wide variety of insurance packages which can be customized to meet your needs. For a list of insurance brokerage firms, contact the Missouri Department of Insurance at 800-726-7390. For the Illinois Department of Insurance, call 217-782-4515. For questions pertaining to matters in the St. Louis area, call 314-340-6830.

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PATENTS by Mary Jo Bertani, Haverstock, Garrett & Roberts, and Thomas A. Polcyn, Howell & Haferkamp, L.C.

Patents can be very important to small businesses and start­up companies because they can add value to a business and may help a company establish a foothold in a market. A patent is a type of "intellectual property" that can be purchased, sold, or licensed the same as a piece of equipment. Like a piece of equipment, a patent is a piece of property included in the assets of a business. Patents can increase the value of a company and can be used to protect a company from its competitors.

A patent gives its owner rights which can be enforced against third parties, and which can be used to prevent others from manufacturing or making items or compositions that are covered by the patent. Specifically, the owner of a patent has the right to exclude others from making, using, or selling the invention covered by the patent. This limited "monopoly" may provide the necessary means for a new company to become established in a particular market and, perhaps, to gain an advantage over its competitors. The term of a patent is twenty years from the effective filing date of the patent application.

Another advantage of having patents, aside from the issue of protection, is that a patent is a tangible asset that an investor can see, and may, in fact, be the only asset a startup company owns. Investors see the patent as evidence that the company's product or proposed product is real and feasible. Sometimes it is worth the cost to secure a patent, or at least a "patent pending" status, for your products, because of the advantage it affords in raising capital.

When seeking a patent, it is best to consult a registered patent attorney who has experience in drafting patent applications, and who has expertise in your particular technical field. Firms specializing in patent law will have patent attorneys with backgrounds in mechanical engineering, electrical engineering, chemical engineering, biotechnology, computer software, and other technical areas.

Depending on the nature of your business, it may be beneficial to consult a local patent attorney. A local patent attorney may be more available to meet with you face to face than a patent attorney located in another city. Also, patent attorneys in the St. Louis area should be able to provide the same high quality legal services for far less than patent attorneys from, for example, Chicago or New York.

You will want some idea of the costs involved for preparing and filing a patent application, as well as for "prosecuting" (negotiating with the U.S. Patent and Trademark Office, if necessary) the application after it has been filed. The complexity of the subject matter will affect the costs involved. For relatively simple subject matter, the costs for preparing and filing a patent application will probably range between about $3,000 and $5,000. For more complex subject matter, the cost may be much higher. You should ask the patent attorney for an estimate of the costs up front. When getting estimates, keep in mind that you will want a well thought out and competently drafted patent application, and you should be willing to spend an amount sufficient to develop a valuable patent.

The patent process is initiated by filing a patent application with the U.S. Patent and Trademark Office. The patent is "pending" until it either issues or is abandoned. U.S. law requires that the application be filed in the name of the true inventor(s), but the ownership rights to a pending patent application or an issued patent can be transferred ("assigned") to a third party, such as an employer or purchaser of the technology.

Under U.S. law, the patent application must be filed within one year of the first publication of the subject matter of the invention, the first public use of the invention, and/or the first sale or offer for sale of the invention in the United States by the inventor or anyone else. However, in order to preserve the right to obtain patents in foreign countries, the patent application should be filed in the U.S. before any publication, use, or sale of the invention.

A patent will be granted for an invention that is found to be new and useful, and which meets the required standard of invention. A patent will not be granted if the invention is too similar to something that is already publicly known, e.g., an invention for which a patent has already been granted to another. Your patent attorney will be able to explain the standards and requirements for patentability in greater detail.

Generally, there are three kinds of patents. The most common type of patent is a "utility" patent. A utility patent may be granted for the invention of: (i) a machine or article; (ii) a composition of matter; or (iii) a process of making or doing something (e.g., chemical process for making a compound). "Composition of matter" refers primarily to chemical compositions, and may include a new chemical compound or a mixture of constituent ingredients.

Another type of patent is a "design" patent. A design patent may granted for the "ornamental" design of an article of manufacture (e.g., the shape of a chair or a telephone).

A third type of patent is a "plant" patent. A plant patent may be granted for the asexual reproduction of a new plant variety (e.g., a new variety of hybrid seed corn).

In many situations, your patent attorney will advise you to begin with a "patentability search" prior to preparing and filing a patent application. A patentability search may reveal prior patents or other references that are pertinent to your invention. Your patent attorney will be able to consider these references and will be able to render an opinion as to whether patent protection is available for your invention. Thus, a patentability search is useful because it may save you the cost of preparing and filing a patent application if the prior art found in the search would render your invention unpatentable.

A patentability search is also beneficial because it allows your patent attorney to consider what is already known ("the prior art") when drafting a patent application so that the prior art can be avoided. The United States Patent and Trademark Office internet web site allows you to search for patents on line. You can also search through patents at certain public libraries. However, in most cases, it would be advisable to have your patent attorney handle the patentability search and patentability opinion for you.

It would probably be beneficial for you to meet with a patent attorney prior to initiating a significant research project. This will allow you to develop a plan for properly protecting your inventions and for building a strong patent portfolio. Your patent attorney will be able to assist you in implementing procedures and rules that will help to ensure that technology developed by your company is protected from misappropriation by others.

The process of obtaining a patent requires an intimate understanding of complex rules and regulations. Although it is possible for an inventor to prepare and file his or her own patent application, the U.S. Patent and Trademark Office recommends that inventors obtain the assistance of a registered patent attorney. More information can be obtained by contacting a patent attorney, a local library, or the Commissioner of Patents and Trademarks. The following are some St. Louis law firms that specialize in patent law, or that include departments that specialize in patent law:


720 Olive Street, 24th Floor

St. Louis, Missouri 63101

  1. 421-3850


611 Olive Street, Suite 1610

St. Louis, Missouri 63101

(314) 241­4427


7733 Forsyth Blvd., Suite 1400

St. Louis, Missouri 63105

(314) 727­5188


763 S. New Ballas

St. Louis, Missouri

(314) 872­8118


One Metropolitan Square, 16th Floor

St. Louis, Missouri 63102

(314) 231­5400



One Metropolitan Square

Suite 2600

St. Louis, MO 63102



1 Metropolitan Square, Suite 3000

St. Louis, MO 63102



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TRADEMARKS AND TRADE NAMES by Thomas A. Polcyn, Howell & Haferkamp, L.C.

Trademarks, service marks and trade names are very important to a business in marketing its products or services. A trademark is a name, logo, or other device used by a business to identify a product. A service mark is a name, logo, or other device used by a business to identify a service. A trade name is the name used by a business to identify itself; it is the name by which a business entity is recognized. A trademark is different from a copyright or a patent. A copyright protects an original artistic or literary work; a patent protects an invention (see section on patents in this guide). Trademarks, service marks and trade names are commonly referred to as "marks". Normally, a mark for goods appears on the product or on its packaging, while a service mark appears in advertising for services.

Generally, there are four types of marks: generic marks, descriptive marks, suggestive marks, and arbitrary/coined marks. Generic marks are terms that are, or have become, the common descriptive name for a product or service. Because of the belief that all persons should be free to use the terms, generic marks generally cannot be protected. A good example of the generic mark is "Super Glue" for super-adhesive glue.

Descriptive marks are marks that describe some aspect of the goods or services. While descriptive marks are generally not protectable or registerable at the outset (because of a belief that others should be free to use descriptive terms to describe their own goods or services), it is possible that, through use and promotion, a descriptive term can come to be regarded as an indication of the source of goods or services. A typical descriptive mark is the "Vision Center" for businesses offering optical goods and services.

Suggestive marks are marks that suggest some aspect of the goods or services. Suggestive marks are distinguished from descriptive marks because they involve some play on words or require some mature thought or reflection to make an association between the mark and the goods or services. Suggestive marks are generally protectable and registerable from the outset. The use of "Arrid" for a deodorant is a typical suggestive mark..

Arbitrary marks are marks that have no apparent relationship to the goods or services. These are the strongest types of marks, and are the easiest to protect and to register. In selecting a trademark, service mark or trade name, a business should endeavor to select a distinctive and protectable mark. The name of the Internet search engine and service "Yahoo" illustrates a typical arbitrary trademark.

A trademark or service mark is a piece of personal property that can be owned by an individual or a business. As a piece of property, a trademark or service mark can be purchased, sold, or licensed and is considered to be an asset of the business.

When selecting a trademark, service mark or trade name, it is advisable to conduct a search. The mark that a business adopts must not be "confusingly similar" to a mark that is already in use by another. While there generally is no duty to conduct a search, it is in a businesses' best interest to conduct a search to avoid adopting a mark that is confusingly similar to a prior mark. A business that chooses a mark blindly may find itself in a trademark infringement lawsuit and may have to change the mark that it has spent so much time and money developing and promoting.

A trademark attorney can conduct a trademark search for you. Trademark searching can be conducted on several different levels. In most cases, trademark searches cover federal trademark registrations, pending federal trademark applications and state registrations. More extended searches will cover pertinent business and trade directories and other references. Although no search is perfect, searching is valuable and useful in selecting a new mark and can substantially reduce the risk involved in adopting a new mark.

Federal or state registration is not required in order to establish rights in a mark, nor is it required for beginning use of a mark. However, as explained below, registration can secure benefits beyond the rights acquired by merely using a mark. In the United States, trademarks, service marks and trade names enjoy "common law" protection in those geographic areas where the mark has actually been used. Generally, the first user of a mark or name in a particular geographic area is protected from a subsequent user's use of the same or a similar mark or name in a manner that is likely to cause confusion, mistakes, or deception. However, it is possible for a subsequent innocent user to acquire rights in an unregistered mark in geographic areas where the prior user has not yet used it. As explained below, federal trademark registration of a mark can prevent this problem.

Trademarks and service marks can be registered at the federal level, which provides protection throughout the entire United States, its territories, and possessions (even in geographic areas where the mark has not been used). A federal trademark or service mark registration provides numerous benefits to the Registrant. First, it serves as "constructive notice" of the Registrant's rights in the mark, and gives the Registrant superior right against all subsequent users of the mark even in geographic areas where the mark has not been used. Thus, federal registration can allow a business to essentially "reserve" its mark throughout the country, even in those geographic areas where it has not actually used the mark. Federal registration also makes the mark easy to find in a search, making it less likely that someone else will inadvertently adopt the same or similar mark. Federal registration entitles the Registrant to identify the mark with the symbol "®", which may also serve to deter others from adopting the same or a similar mark. Federal registration entitles the Registrant to enforce the mark in federal court. A federal registration provides a presumption of the Registrant's ownership of the mark and of the Registrant's right to use the mark, which makes it easier for the Registrant to enforce its rights in the mark. Finally, federal registration entitles the Registrant to enlist the aid of the U.S. Customs Service to exclude or, in some circumstances, seize infringing imports. These are substantial benefits that make it well worthwhile for a business to federally register all marks it uses. The process of obtaining a federal trademark registration begins with the filing of a federal trademark application in the U.S. Patent and Trademark Office. Although it is possible for an individual or business to file its own federal trademark application, the process of obtaining a registration requires an intimate understanding of complex rules and regulations. It is therefore advisable for a new business to seek the assistance of a trademark attorney.

A trademark or service mark must be used properly to avoid using rights in the mark. First, trademarks and service marks should be clearly identified as such. Unregistered trademarks should be identified with the symbol """ and unregistered service marks should be identified with the symbol "SM". Federally registered marks should be identified with the symbol "®". Also, preferably, a trademark or service mark should be used as an adjective in conjunction with a generic name for the product or service and not as the name of the product or service. For example, it is proper to use "Buy an Acme _______". It would improper to use "Buy an Acme" ________. The word "brand" can be used to draw attention to the trademark or service. For example, it is proper to use "Ask For An Acme" Brand _______". Your trademark attorney will be able to advise your further on proper trademark/service mark usage and will be able to assist you in implementing a program that will help to ensure that your company's trademark/service mark rights are sufficiently protected. The following are some St. Louis law firms that specialize in trademark law, or that include departments that specialize in trademark law:


720 Olive Street, 24th Floor

St. Louis, Missouri 63101

Tel: 421-3850


611 Olive Street, Suite 1610

St. Louis, Missouri 63101

Tel: 314-241­4427



7733 Forsyth Blvd., Suite 1400

St. Louis, Missouri 63105

Tel: 314-727­5188


763 S. New Ballas

St. Louis, Missouri

Tel: 314-872­8118


One Metropolitan Square, 16th Floor

St. Louis, Missouri 63102

Tel: 314-231­5400


1 Metropolitan Square, Suite 3000

St. Louis, MO 63102

Tel: 314-241-1800


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TRADE SECRETS By: Caroline G. Chicoine, Blackwell Sanders Peper Martin, LLP

The Uniform Trade Secrets Act ("USTA") was created in 1979 to help create uniformity in trade secret laws in the U.S. The USTA has been adopted in whole or in part by the majority of the states, including Illinois and Missouri. While this topic will be discussed with reference to the USTA, you should consider the Trade Secrets Act of each state in which you are involved in transactions concerning trade secrets to determine what laws apply.

Under the USTA, a trade secret is defined as information, including a formula, pattern, compilation, program, device, method, technique, or process, that (1) derives independent economic value, actual or potential, from not being generally known to, and not being readily ascertainable by proper means, by other persons who can obtain economic value from its disclosure or use, and (2) is the subject of efforts that are reasonable under the circumstances to maintain its secrecy. Examples of trade secrets include customer lists, the Coca-Cola® formula, "know how" and computer programs, to name a few.

It is important to distinguish "confidential" information by itself from that which qualifies as a trade secret. Only confidential information which affords you a demonstrable competitive advantage may be properly considered a trade secret. Since secrecy is a requisite element of a trade secret, it loses this status if disclosed. Likewise, however, trade secrets have the ability to be perpetual if their secrecy is maintained.

One of the dichotomies of a trade secret is that it must be kept secret in order to maintain its trade secret status, but yet must be disclosed to your employees in order to make it profitable. With the increase in the mobility of employees, this can be a risky proposition. There is also a tension between an employer's need to prevent disclosure of its trade secrets and an employee's right to use the skill, knowledge and experience he or she gains during employment.

As an employer, there are a number of steps you can take to protect your trade secrets rights and avoid the risk of disclosure. These include: requiring all employees to sign non-disclosure agreements; conducting exit interviews with terminating employees emphasizing the need to keep certain information secret upon their departure; requiring identification badges for all employees to prevent unauthorized people from entering your establishment; and issuing computer passwords to prevent or restrict access to secret information.

As a further precautionary measure, you may wish to include a provision in your employment agreements preventing an employee from leaving your company for a competitor. Such a restriction, however, must be reasonable both respects to time and location. If you are an employee, you should be aware that even if you do not have an express contract with your employee to keep certain information secret, a court may imply such a contract with respect to information you have or should have reason to regard as confidential and proprietary.

What happens if someone misappropriates your trade secrets? The USTA permits injunctions against actual or threatened misappropriation. In addition, you may recover damages for the actual loss, and the unjust enrichment caused by the misappropriation that is not taken into account in computing damages for actual loss. If the misappropriation is willful and malicious, the court may also award punitive damages and attorney's fees.

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COPYRIGHTS, by Caroline Chicoine, Blackwell Sanders Peper Martin, LLP

A copyright protects original works of authorship from being copied during the life of the copyright. Other exclusive rights granted to copyright owners include the right to distribute, publicly perform and display the work, as well as to prepare derivative works based on the copyrighted work.

Unlike patents, however, copyrights do not protect against the independent creation of a work. In other words, someone who independently comes up with a work substantially similar to your work will not infringe the copyright in your work. Examples of protectable works include advertisements, architectural plans, packaging, brochures, books, videos, software, to name a few. Ingredients, raw data, facts, titles, names, common geometric shapes and useful articles (tools, clothes, machines, etc.) are normally not protected by copyright, although there are exceptions to this rule.

While the duration of a copyright is not perpetual, it is fairly long. In the case of an individual, the copyright extends for the life of the author plus another fifty years. With respect to a company-owned copyright, its lasts seventy-five years from publication or one hundred (100) years from creation, whichever expires first.

Generally, a copyright is owned by the author of the copyrighted work. However, one exception to this rule are works created by employees within the scope of their employment. While the authors of such works are the employees, such works are owned by the employer. Accordingly, to the extent you use non-employees to create copyrightable works, you should obtain written assignment of all rights in and to such works before the works are created, and preferably before the non-employees are paid to create such works. Without a written assignment, the non-employee will own all rights in and to such works.

Federal copyright protection automatically extends to any original work the moment it is fixed in a tangible form. While no particular notice or registration is required to create or preserve a copyright, proper notice and registration strengthens the scope of the copyright. Proper notice includes the copyright symbol ©, the copyright owner's name and the date of publication (e.g., © ABC Company, 1998).

An important characteristic of registration is that it is your ticket to the courthouse. Without a federal copyright registration, you cannot sue anyone infringing your copyright. Moreover without a copyright notice, an infringer can assert an innocent infringement defense in mitigation of damages. In addition, the following benefits are accorded to copyright registrations: (1) A presumption of validity; and (2) statutory damages in the amount of not less than $500 or more than $20,000 per infringement (which may be increased to $100,000 by a court); and possibly attorney's fees.

With respect to software, it is important to note that "special relief" is available when filing a copyright application to protect software, which allows up to 50% of any proprietary source code deposited with the U.S. Copyright Office to be kept secret. If special relief is not sought, client's complete source code will become a public record.

Registering your copyright with the U.S. Copyright Office is fairly easy. Forms can be obtained from the U.S. Copyright Office at the address and website listed below:

Register of Copyrights

Library of Congress

Washington, D.C. 20559-6000


The cost of each application is only $20.00. If an application is filed with the U.S. Copyright Office within three months after publication of the work, you can obtain a award of statutory damages or attorney's fees for an infringement of copyright commenced after first publication of the work but before the effective date of your registration.

For legal assistance on copyrights, refer to the firms with intellectual property attorneys on staff, such as those listed under "Patents" and "Trademarks".

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INVENTIONS by Mary Jo Bertani, Haverstock, Garrett & Roberts
See Intellectual Property

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LEGAL ASSISTANCE by Mary Jo Bertani, Haverstock, Garrett & Roberts

General Business Legal Assistance

You can tell all the lawyer jokes you want, but sound legal advice is essential to organizing and managing your business in the most effective way possible. Areas where new and existing businesses often require legal assistance include:

(a) determining which organizational structure best suits the enterprise (sole

proprietorship, etc.) and drafting and filing the legal documents to form the entity and govern its operation

(b) securities

(c) labor and employment

(d) intellectual property (patents, trademarks, copyrights, and trade secrets)

(e) environmental regulations

(f) acquisitions and mergers

(g) taxation

(h) succession and estate planning (especially for closely held corporations)

(i) employee benefits and compensation

(j) real estate

(k) contracts

It is beyond the scope of this guide to outline the legal ramifications of each of the areas listed above. However, some guidelines for selecting and managing legal counsel to help you obtain cost effective legal assistance best suited to your needs are listed below.

Following are the qualifications you should seek in your business lawyer:

* A practice with experience relevant to your business.

* An ability not only to answer questions as they arise but also to practice preventive law, i.e. anticipating problems, reviewing employment and other policies and

contracts to avoid legal traps, and giving advice on new laws, regulations, and court

decisions that can affect your business.

* A reputation as a practical problem solver.

* A willingness to function as a partner.

* An awareness of your broad business needs rather than just narrow legal considerations.

* An ability to reconcile demands of the law with commercial necessities.

The nature of a business often requires specific legal knowledge. For example, a retailer, who at one time may have worried only about contracts with landlords and suppliers and occasional customer complaints, must today be prepared to comply with the Americans with Disabilities Act as well as state and federal civil­rights acts. Manufacturers accustomed to legal problems over product quality and liability, delivery obligations, and contracts for raw materials now face environmental requirements ranging from eliminating toxic waste to reducing air pollution.

A good way to begin your search for a lawyer is to check with other small­business owners in your community. Other leads may come from your accountant, your bank, or a trade association.

If your sources recommend a law firm without naming an individual attorney, ask the group's managing partner which member would best fit your needs. Guard against the possibility that once a large firm has you as a client, your matters might be assigned to someone unacceptable to you.

With promising recommendations for a law firm in hand, you can do preliminary screening of the assigned attorney by consulting a directory of lawyers, which is often available at a public library. Some directories provide background information on individuals, including age, education, publications, specialties, and representative clients. Others list specialists in areas such as patent law or bankruptcy. There are also state directories.

When you have narrowed your list, do some comparison shopping. You can screen prospects initially by phone, making it clear that you are checking out the legal market. Focus on your criteria.

Find out how recently a prospect has handled a legal matter related to your field. What client references can he or she provide? Will the lawyer you are interviewing personally handle your affairs?

At what point will the lawyer you are interviewing be willing to recommend bringing in a specialist? When you have a tentative choice, explain what services you expect. Keep in mind the four leading complaints by clients about lawyers: overcharging, procrastinating, keeping clients in the dark, and ignoring settlement possibilities in a desire to win at all costs (to the client).

Require a written agreement on fees and billing methods. The lawyer who quotes the lowest charges is not necessarily the best one for your business. There are several different fee arrangements. Without a clear understanding of client expectations and the likely costs of meeting them and without strict supervision, legal costs can get out of hand.

Stipulate at the outset whether you want periodic updates on changes in laws affecting your business. Do you want your lawyer to attend certain meetings at your company, such as discussions of possible new business alliances or important directors' meetings? Find out whether your lawyer is familiar with and willing to use alternatives to litigation, such as mediation and arbitration.

Above all, you must feel comfortable with the person or persons you are going to work with, and you should be sure that they understand their roles as advisers, with you in ultimate control.

Of course, you must recognize that on pure questions of law, the attorney is the expert. If he or she is to do a good job, you must provide all your relevant information and documents that the lawyer asks for, whether you think it helps or hurts your cause.

Keep your lawyer informed of new developments affecting your business. The more help you provide your counsel, the more chance he or she will have of success at a lower cost to you.

In choosing a lawyer to handle litigation, whether you are suing or being sued, many of the same criteria apply. But the choice of advocate may be even more crucial. A lawsuit is usually a one­shot venture, and the trial lawyer is your only tool in a case that may make or break your business.

If you have retained a trial lawyer, either to sue someone or to defend your company in a lawsuit, you should require:

* A litigation budget and risk analysis. How much is the action expected to cost at various stages of the case, and how are the services broken down? How long will it take to reach a conclusion? What are the chances of settlement? Your decision on how to proceed must be based on the costs (including the time value of money if you are seeking recovery), the risk and amount of possible loss, the diversion of executives' time, and the possible rupture of ongoing business relationships.

* Your approval in advance of projected discovery actions, such as depositions, motions, and briefs the attorney intends to file. These are usually the most expensive items in litigation.

* Copies of letters and other materials the lawyer is preparing or has used in your case. Be kept up to date on all legal activities.

* A clear understanding by the lawyer that you are looking for a business solution, not a legal victory. Since 90 percent of cases are settled before trial and 85 percent of legal expenses are incurred before a settlement, an early settlement usually makes better business sense than a legal victory or even a slightly better settlement months or years away. It is not unusual to hear stories about spending $100,000 in legal costs to reach a $10,000 settlement.

* Work with your lawyer at the outset to determine your minimum acceptable outcome, remaining flexible as new circumstances arise. If your adversary is another business, especially one with which you will have further relationships, don't let your lawyer dissuade you from talking directly with its executives if you feel it might help bring about a settlement.

* If, despite your instructions, your lawyer ignores your requirements, you should have a frank talk about the problem immediately. Irritations such as unreturned phone calls, failure to inform you of actions taken, and reasonable delays can be avoided if you make it clear in advance that those deficiencies will be reason to look for other representation. You should be ready to change attorneys without feeling apologetic.

* A change should not be made in haste, however, because such a move means you have to find and educate a new advocate and pay charges incurred to date by the attorney you are dropping.

If you have done your homework, chosen well, and made your requirements clear from the start, the relationship with your lawyers should be one of the best investments you business has made.

Money Matters

Here are the most common types of fee arrangements between lawyers and their business clients:

Hourly fee: A fee based on the time spent on a matter. Get an estimate of the time needed and any charges not included in the fee. You may want to set a dollar limit beyond which the lawyer must ask permission to proceed.

Fixed Fee: A set amount for a routine legal matter, such as incorporating your business. Determine what services are included and what charges are not.

Retainer: This term may apply to an amount paid to the lawyer to guarantee services on a particular matter, with additional work billed separately, or it may be an amount paid to have the lawyer "on call" to handle routine legal matters.

Contingency fee: This is a payment to the lawyer based on a percentage of what you recover after trial or in a settlement in a case, such as a recovery of excessive taxes against your property. The client pays costs and should find out whether the lawyer's fee is calculated before or after costs are deducted. You should also determine whether and under what arrangement you pay the lawyer for related matters that arise as a result of the case.

Legal Directories

Some of the following directories can be found in public libraries and law libraries. All can be ordered from their publishers.

Martindale­Hubbell Law Directory . Available free on-line at http://lawyers.martindale/marhub.

Reed Reference Publishing, 121 Chanlon Road, New Providence, N.J. 07974 (908)464­6800.

Attorneys Directory

American Business Directories, Inc., 5711 S. 86th Circle, Omaha, Neb. 68127,


The American Bar

Forster­Long, Inc., 3280 Ramos Circle, Sacramento, Calif. 95827; (916)362­3276.

Campbell's List

Campbell's List, Inc., 100 E. Ventris Ave., P.O. box 428, Maitland, Fla. 32751


Other legal references

Keuster Law, a comprehensive intellectual property resource website, sponsored by a private law firm. http://www.keusterlaw.com


Franklin Pierce Law Center Intellectual Property Mall, a "full-stop shop" for intellectual property law resources and guides. http://www.ipmall.fplc.edu




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 MANAGERIAL ASSISTANCE by Ned Klein, Baring Private Equity Partners, Ltd.

The RCGA sponsors the Business Management Institute, which provides leading-edge education and training for small- and mid-sized business owners, managers and key employees. The Institute covers areas such as Marketing, Sales, Human Resources and Finance, Planning & Strategy. Sessions concentrate on specific topics such as Making a Winning Presentation, Effective Telemarketing Techniques, Employment Law, Closely Held Businesses and Preparing your Business for Sale. For registration or further information, contact Elaine Yelton at 314-441-1182.

The RCGA also sponsors several other activities designed to assist the entrepreneur. One is the CEO Roundtable, at which CEOs of small to mid-sized businesses meet monthly to discuss management issues in a confidential forum. Another is the RCGA Leads Connection, under which owners, sales managers and salespeople from diverse businesses meet every two weeks to exchange tips, leads, ideas and information. A third is the Premier FastTrac program, which is an 11-week program to help entrepreneurs create and develop a growth-oriented business plan for existing companies. For information about any of these programs, contact Kelly Ferrara at 314-444-1147.

Finally, the RCGA provides a one-stop shopping facility to small businesses for all RCGA services. All of the RCGA networking opportunities, events, educational programs, legislative activities, and economic development resources accessible to the small business person. For further information, call Michelle Fredeking at 314-444-1145.

It is unlikely that a first-time, high-tech entrepreneur will be able to attract outside investors unless he is able to put together a management team which has had previous business experience. Investors, particularly venture capitalists, don't invest in technology per se or just an idea; they invest in a business. Therefore, the management team along with its background is all-important.

Having said that, there are sources of management assistance which might be useful to the management team of a high-tech start-up. Some are listed as follows:

Service Corps of Retired Executives (SCORE)

815 Olive Street (Old Post Office Building), Room 208.

Tel. 314-539-6970.

SCORE is housed with the U. S. Small Business Administration

Contacts include: Carl Trautmann, Tel.: 314-256-3331

Missouri Small Business Development Center

McGannon Hall 243

St. Louis University

3750 Lindell Blvd.

St. Louis, MO 63108

Contact: Virginia Campbell, Director

Tel. 314-977-7232

Mid-America Manufacturing Technology Center (MAMTC)

12208 Missouri Bottom Road

St. Louis, MO 63042

Tel.: 314-731-1110

Fax: 314-731-4144


The center will perform up to eight hours of free consulting work in manufacturing for small to medium-sized companies. There are two other locations in St. Louis and St. Charles.

Center for Emerging Technologies

4041 Forest Park Avenue

St. Louis, MO 63108

Tel.: 314-615-6903

FAX: 314-616-6901

Contact: Marsha Mellitz, President

AAIM Management Association (American Association for Industrial Management)

8514 Eager Road

St. Louis, MO 63144

Tel: 314-968-3600

MIDTECH Corporation, a non-profit organization primarily involved with machine shop activity and in the training of operators.

706 North Jefferson

St. Louis, MO 63103


Contact: Joe Mowrey


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MANUFACTURING, Jim Hahn, UM-Rolla Engineering Center, St. Louis

If your business involves a product to sell, you will likely need assistance in getting it manufactured. Even if the product is software, you will need to have it duplicated and packaged for shipment, user manuals printed, etc. The type of manufacturing assistance you will need obviously depends on the type of business you are in. Several organizations are available to assist you in getting ready for manufacturing. These include:

Mid America Manufacturing Technology Center (MAMTC) – see description under previous heading.

Mid Tec – see description under previous heading

Midwest Manufacturing Technology

Society of Manufacturing Engineers

In addition, there are many companies which can fabricate, assemble and test your product. There are companies that specialize in mechanical, electronic/electrical, metal, and plastic manufacturing and assembly, as well as specialists in areas such as software production. Many of these are listed in the Yellow Pages.

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MARKETING for the Technology Entrepreneur by Rick Foristel

Many entrepreneurs will not want to hear this, but no matter how good your product is, the world will not beat a path to your door. You will have to let people know about your product and provide a means for them to purchase it. The activity that provides these services is called Marketing. The Marketing function is responsible for determining who the potential customers are, analyzing the total market for your product and what portion you can realistically hope to capture, setting up channels for distribution and organizing and training your sales force. It is also responsible for projecting the costs of the marketing operation. If you want to be taken seriously by the rest of the business world, and especially by venture capitalists, you will have to have a Marketing Plan as part of your overall business plan.

If you have a marketing expert as a part of your startup group, great! If not, it is essential that you bring one on board. If you can't afford to hire a full time Marketing Manager, bring in a consultant, part-time employee or a graduate student. A part time marketer is much better than none at all.

The list that follows provides many sources of assistance in understanding the marketing function and a need for it. In addition, any university with a business school will likely have graduate students eager to gain practical, real-world experience, under the tutelage of experienced business professors.

Two of today's leading marketing objectives are the determination of the wants and needs of the customer; and development of methods by which the customers can be happily served. When new technology is involved, it is almost always necessary to educate potential users about the new product in terms of their current values and objectives. You as a product developer must build a knowledge of how the prospective user can integrate the new into current tasks, processes, or larger systems. Potential buyers don't want to have to consider new product. It is extra work and the market is always competitive. Other sellers, even with inferior products, will assure your target buyer that there is no need to change, and that the new technology may be a risk, if not totally without merit. If there are no competitors now, trust that there will be shortly after you make your introduction. You must first identify, then contact potential users and/or distributors and make a clear, convincing argument for adoption of your product.

Marketing includes all promotional activities, including advertising, public relations, and personal selling. It is an activity which requires hearing from the market place and speaking to it. Marketing is a system that requires the application of outside energy in the form of a budget for mailings, ads for trade magazines, time and expenses for personal selling, maybe even a Website. Marketing is also prioritizing which of the various marketing methods should be put in place first and how much should be spent on each. Implicit in these elements is the planning function: yearly, quarterly, perhaps even monthly and weekly.

The following resources will be useful in preparation for putting a new product on the market or impelling an existing one.

The Successful Marketing Plan, second edition, Roman G. Hiebing, Jr. and Scott W. Cooper, NTC Business Books.

Marketing from Advertising to Zen (A Financial Times Guide), Tim Ambler, FT Pitman Publishing

Command Performance: The Art of Delivering Quality Service, Harvard Business Review

The internet has recently emerged as a powerful marketing tool. For more information, see the section on On-Line Resources.

The following are contacts who can provide marketing consultation or make a referral:

Wilford Miles , Ph.D., Dean, Webster University School of Business and Technology. 314-968-7021

Ginny Campbell, FastTrack Program at Saint Louis University, Small Business Development Center, 314-977-7232

American Marketing Association 314-861-2626

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MARKETING ON THE WEB by Craig Simon, AKA Design

Marketing Your Company, Product or Service on the Web


The Internet is a gigantic computer "network" commonly referred to as the "Net." It is connected to other computer networks of more than six million computer hosts. This includes more than 300,000 businesses and approximately 30 million people in the United States and almost 130 countries. Continued growth of the internet is difficult to project but a conservative estimate by some experts is 15 percent each month.

Simply described, the Net provides the exchange of information, opinion, news and ideas. The World Wide Web or "the Web," on the other hand, is organized differently. It is part of the internet system but it is set up to utilize a more graphic or visual interface with pictures, text, sounds and multimedia. To state it in the simplest of terms, think of the Net as a vast and nearly endless "library" of information and data, whereas the web is more like a "super store," providing countless varieties of products and services.

A "home page" on the Web is your permanent location, address, or "storefront." It is reached by a visitor keying in your individual "URL,"or Uniform Resource Locator. Much like a personal telephone number, your URL is your specific web site address. Unlike the telephone which utilizes a sequence of numerals, the URL are letterforms spelling out a certain word or word phrases to identify your business. Most URL's are company names or variations of names to help customers easily remember their addresses. Each URL must be registered through a service provider early on during the development of the site to ensure that your web address will not be taken by companies with similar names or product lines.

Web sites are programmed to enable a visitor to quickly browse from one location to the next or to "surf" the web. This is easily accomplished with a click of a button on "hypertext links." These are normally names, titles or URL's colored in blue and underscored for easy identification. To access the web, you will need a personal computer running preferably MacOS, Windows 3.1 or higher, with either an online service such as Compuserve or America Online, or a direct "ISP" (Internet Service Provider). You should be running a Web browser such as Netscape Navigator or Microsoft Internet Explorer, or a browser provided by your online service.

Marketing and Sales

The web is proving to be an effective new component to sales and marketing programs. Experts have estimated web commerce to grow 300 percent this year alone. One of the reasons for this phenomenal growth is that the web offers companies marketing opportunities currently unavailable by conventional means and at costs that are extremely affordable. The web enables companies to expand their markets regionally, nationally and globally as well as allowing their products or services to be available to customers 24 hours a day.

Web marketing should not be considered a replacement for the traditional face-to-face sales meeting or as an adjunct to conventional print material, but this electronic-based form of marketing is much less costly than these traditional methods. (For instance, sales staff will not need to attend conventions and trade shows as often.) Also, expensive reprintings of catalogs and sales flyers due to changing price lists and updating product codes are virtually eliminated since the web enables firms to continuously update information at little or no cost.

Another positive aspect with this high-tech approach to marketing is how your customers "read" your information. Conventional print is linear and logical because pages of a brochure, catalog or pamphlet are opened, viewed and read in a specific and particular order. The specific product information your customer is seeking may not always be easily or quickly attainable. Web sites are, in a sense, "three-dimensional" where information can move up and down, back and forth, from one subject or category to the other. The visitor, therefore, chooses how to "read" your material. They access information in the manner which they decide and, by doing so, they attain the ability to learn more about your product, service or company.

Designing Your Website

Until recently, the Internet was the sole domain of certain highly-trained computer programmers that understood "HTML" (HyperText Markup Language) programming. Now, with recently improved software, that all has changed. There are reasonably priced programs that make it easier to create your own web sites. Business owners, new and old alike, can now create a web presence with little or no graphic design or computer experience.

However, before jumping in head-first into the creation of your site, as a business owner you should consider seeking professional design assistance. This will enable you to avoid the many pitfalls and organizational errors commonly made in this new medium. Many new businesses on the web create sites that are slow-loading, hard-to-read and visually uninspired. Additionally, many sites are poorly organized, trying to provide too much information so, more often than not, these sites do more damage than good.

As more and more people and businesses hook up to the Web, the speed at which the information becomes available decreases. The lowest practical speed for modems on the internet is 14.4 Kbps (kilobits per second - a kilobit is a unit of storage required for storing documents, graphics or photographic images). Therefore, it is essential to keep attention to "file size." When designing your site, keep your images, text files and graphics small to make them easy to download. Traditional "300-dpi" (dots per inch) images should be reduced to 72 dpi. One option is to create several versions of documents each with different content. By offering this variety, customers with different systems and software can more readily access your information. The best sites are fast, personalized and easy-to-use. Don't fall into the trap that bigger is better.

Value-Added Design

Most successful businesses hire graphic design professionals to develop creative and effective sales and marketing materials. Since the advent of the web, these same businesses are turning to their graphics consultants to apply the same design principles to their web sites. Today's leading design firms have willingly learned this new web technology and have combined their creative talent with this new technical knowledge to produce very effective web designs. However, your current cash flow situation may not be able to afford such outsourcing fees, forcing you to develop the site on your own .

If this is the case, carefully consider the following suggestions: Good design is a necessity and it will have a direct impact on how well-visited and successful your site becomes. The constant barrage of information, combined with today's higher appreciation of visual communications, makes readers more sensitive to good design but even worse, they will recognize bad design. A poorly designed web site devalues your message, product or service and insults the very customers you are trying to reach.

Visitors to your site will make immediate judgements about your company based on the design of the home page alone. A well-designed site will project a sense of importance, optimism, professionalism and excitement, causing the reader to stay and learn more about your product or company. Good design makes your page easier and more fun to read. A well laid-out site can increase readership by organizing lengthy text into manageable bits of information. Graphic elements can make complicated data easier to comprehend. The use of graphs, charts and visual tables can make information jump off the screen and communicate your message at nearly a glance.

Remember, design is structure, not window dressing. Design is evolutionary, not revolutionary. It is more than color, balance, light and dark, contrast and subtlety, it is analytical. It is a process. It is the basis of your site, its foundation. Before you begin to develop your site, answer these important questions.

* Why do I want to be on the Web?

* Whom do I want to reach?

* Is your objective brand-building? commerce? customer service?

* Am I seeking publicity for my product? company?

* Do I want to exchange information?

* Is there a need to offer customer service or follow up?

* Am I ready and prepared to sell products on the web?

* Will my customers want to track orders and check product availability?

How you answer these basic questions will affect all other aspects of your online activity. The size of your site, how it flows, what it will eventually look like and how it interacts with the viewer should be determined by how you answered these questions. Establishing goals and parameters is essential to developing an effective site. Think about your message:

* What is the most important message I want to convey?

* How do I want it to be conveyed and to what audience(s)?

* Who are my audiences?

* What characterizes them from other visitors?

* What will they expect to gain from visiting my site?

* What action do I want my audience to take?

* Once an action is taken, how and by what means do I respond?

* How do I plan to evaluate its success?

Once you've answered these questions, establish a priority for each message to be conveyed. From this simple base of understanding, you can begin the design evolution of your site. Design it, try it, refine it, try it again, gather feedback and retry it until it works. Unlike a brochure or catalog, which would be cost prohibitive if produced in this hit and miss fashion, web design can easily and inexpensively be changed as you discover what is working and what is not.

You're On the Web, Now What ?

Once you develop your web page, advertise it in and on as many media as possible and affordable. It must be integrated into other marketing efforts and venues - it is not a case "If you build it, they will come." Include it in your electronic signature in online e-mail and forum postings. Register with all the major Web search engines and directories. Be as committed to your site as you are to your product, make it an integrated part of your marketing plan. Utilize the same imagery and vernacular on your site as you have in your printed material. Remember that photographs, illustrations or graphics from your brochures will need to be converted to lower resolution files to minimize downloading time.

Another important factor that most home page dwellers tend to neglect is maintenance of the site itself. The quickest way to lose web traffic is to not change it. It is essential to keep graphics fresh and information current. Daily updates are not uncommon in successful sites. Another recommendation is to add links to the rest of the Web by establishing links with related companies and industries and to be listed on all indexes.

Proprietary Information:

A final issue for you to consider when utilizing web technology is security. A private web, or Intranet, is an effective and useful way to make information available to those people who need it, or to provide special information to those special customers, but what about proprietary information? Firewalls can be created to protect your private web and any other important data from the outside world. Although these firewalls help protect against unwanted surfers or competitors from discovering your proprietary information, no protection system is foolproof.

References and Resources:

The following list are sites presently on the web to help you in your new electronic marketing endeavor:

Information, Resources and Entertainment:







Search Engines:

Yahoo: http://www.yahoo.com/

Web Crawler: http://www.webcrawler.com/

Excite: http://www.excite.com

Lycos: http://www.lycos.com

Open Text: http://www.opentext.com

Starting Point: http://www.stpt.com

Global Network Navigator: http://www.gnn.com

InfoSeek: http://www.infoseek.com/

All-in-One Search Page: http://www.albany.net/~wcross/all1srch.html


AT&T Business Network: http://www.ichange.com

The McKinley Internet Directory: http://www.mckinley.com/

Access Business Online: http://www.futuris.net/touch/welcome.html

Inter-Links: http://www.nova.edu/Inter-Links/cgi-bin/lists

Web Design & Desktop Publishing for Dummies by Roger C. Parker, IDG Books Worldwide, Foster City, CA

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OFFICE EQUIPMENT AND SUPPLIES, by Larry Cowsert, New Star Collaborative Technologies

There are all kinds of war stories about companies that started out with a desk made of two file cabinets and a door they got out of a trash heap. Some of them may actually be true! But, whether you are an aspiring entrepreneur or a seasoned venture guru, you are going to need some place to sit and work. (Or stand and work.)

The environment in which you formulate your plan, develop your product, entertain customers and investors, and pay your bills is very important. All kinds of studies show that work environment can be a creative, or dehumanizing, factor in your desire to nurture to life the next IBM, Microsoft, Monsanto, or Bob's Hand Built Computers. But, that doesn't mean you have to spend a fortune on big-ticket desks and leather chairs, 30 foot conference tables, or a 60" wide screen TV in the waiting room. In fact, sometimes the file cabinets and door are not such a bad idea, for the first couple of weeks.

Ask yourself these questions:

What is my budget?

How much furniture do I need?

How long do I plan on using this furniture?

What kind of wear will this furniture see? (Chemical accidents? Computer cases dragged on the top?)

For new companies who want to have a decent appearance for their customers' and employees' benefit, there are several options. Many entrepreneurs will make the trip to Mecca (Office Depot or Office Max) and buy "knockdown" desks that they will load in their station wagon, take to the office and assemble. Other business owners will walk the dozens of aisles at Warehouse of Fixtures for a few matching pieces of high quality, but used office furniture. Still others will peruse the classified ads in the St. Louis Post Dispatch, or the Trader, for copiers, fax machines, desks, chairs and file cabinets. What you as a business owner need to decide is "How long will I use the furniture I am about to buy?" If the answer is "more than one or two years, you might want to look into something more solid than the "knockdown" things that you have to put together. On the other hand, if the furniture is not going to be "abused" or loaded with heavy duty hardware and such, there is some pretty nifty looking - and relatively good quality - knockdown furniture out there.

If you are lucky enough to have an unlimited budget, you are one in a million entrepreneurs. But, you will still want to be practical in your choices. Buy only what will suit your needs for the duration of your current business plan (3 to 5 years). Chairs break, desks crack or come unglued, file cabinets get dents and bookshelves collapse. It happens. So, if you are frugal in the beginning, by the time you need a new piece, your company will be in better financial shape to afford nicer things. One more thing you might want to consider is renting or leasing furniture. It's a great way to stretch your startup cash, if you are a startup. It's also a good way to manage your cash flow. And, in some cases, there could be some tax advantages to renting or leasing. Those issues should be discussed with your accountant or tax advisor.

There are several office supply companies, such as Finley's Office Supplies in the Earth City area, that will lease good quality furniture and at favorable terms. Color Art Office Interiors is another resource for leased furniture, although the quality (and therefore the price) will be higher. If you are interested in renting some good furniture, for a temporary setup, check out Aaron Rents Furniture. They have a very nice selection of low-end to high-end furniture that can be rented by the month or as a "rent-to-own" arrangement. You will pay a bit more than retail, if you rent, but it helps to budget your dollars. Ask your accountant about the best option for your situation - buy, lease or rent.

Most importantly, before you write that check for the file cabinets and door, go check out some of these resources for good furniture bargains. You will also want to do some of your own research into suppliers.

Office Depot - dozens of locations throughout the Metro-St. Louis area

Office Max - also plenty of locations from which to chose.

Warehouse of Fixtures - 3720 Laclede in Midtown and 3600 Rider Trail in Earth City

Finley's Office Supplies - 4212 Shoreline Drive

Color Art Office Interiors -- 11901 Lackland Road

Aaron Rents Furniture - several locations in the Metro area.

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ON-LINE RESOURCES by Bev Hess, Microsoft

There is a wealth of information available, mostly free, via the Internet. The entrepreneur can benefit greatly by conducting searches for information and even buying and selling via the Internet. Some Internet resources are:

St. Louis Business Journal http://www.amcity.com/stlouis Carries business news and information from 28 U.S. cities.

The Small Business Advisor http://www.isquare.com

IdeaCafe http://ideacafe.com

Microsoft Smallbiz http://www.microsoft.com/smallbiz/

Digital Daily http://www.irs.ustreas.gov/prod/cover.html

The Marketplace Resource Center http://www.imarketinc.com/

Business Know-How http://www.businessknowhow.com

Upside www.upside.com

Venture One www.V1.com

Ace Net at www.ace-net.sr.unh.edu


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ORGANIZATIONS, by Jim Hahn, UM-Rolla Engineering Center, St. Louis

There are many organizations that can help the budding entrepreneur. Some provide advice and assistance on specific topics, and others are more general in nature. For a list of some of the organizations designed to make life easier for the entrepreneur, see the section on Support Groups.

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PATENTS see Intellectual Property

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PEER GROUPS - see Support Groups

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PERSONNEL - see Human Resources

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PUBLICATIONS by Jim Hahn, UM-Rolla Engineering Center, St. Louis

There are several publications of interest to the entrepreneur. These include:


INC Magazine

St. Louis Small Business Monthly

The St. Louis Business Journal.

Upside although California Oriented, an excellent source of news from high-technology industries.

Red Herring - similar to Upside

Entrepreneur Magazine written especially for the entrepreneur, available at most newsstands


The guide for Venture Investing Angels

Arthur Lipper III

Available for $42.50 at Missouri Investor Center, 1-800-467-9304

Pratt's Guide to Venture Capital Sources

Available at your local library

There are two excellent books written by St. Louis authors Chuck Kuehl and Peggy Lambing:

Small Business, Dryden Press, 1987

Entrepreneurship, Prentice Hall, 1998

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STANDARDS by Jim Hahn, UM-Rolla Engineering Center, St. Louis

The design and sale of your products will be heavily influenced by the standards that the products have to meet. Most countries have their own set of standards and organizations which produce them. Some of the most important ones are:


Standards Australia

Ph: +61-2-97464600

Fax: +61-2-9746-3333



Osterreichischer Verband fur

Elektrotechnik (OVE)

Ph: +43-1-586-6373

Fax: +43-1-586-7408



Canadian Standards Association (CSA)

Ph: 800-463-6727

Fax: 416-747-4149

Institute for National Measurement Standards (INMS)

Ph: 613-998-5567

Fax: 613-954-1473


Standards Council of Canada

Ph: 613-238-3222

Fax: 613-995-4564


Telecommunications Standards Advisory Council of Canada

Ph: 613-990-4290

Fax: 613-957-8845



State Office for Standardization and Metrology (DZNM)

Ph: +385-1-6133-444

Fax: +385-1-536-688


Cyprus Telecommunications Authority

Ph: +357-2-310727

Fax: +357-2-310267



Dansk Standard

Ph: +45-39-96-61-01

Fax: +45-39-96-61-02


National Technology Agency, Denmark

Ph: +45-35-43-03-33

Fax: +45-35-43-14-34



European Telecommunications Standards Institute (ETSI)

Ph: +33-0-4-92-94-4200

Fax: +33-0-4-93-65-4716


European Committee for Electrotechnical Standardization (CENELEC)

Ph: +32-2-519-68-71

Fax: +32-2-519-69-19



Finnish Electrotechnical Standards Association (SESKO)

Ph: +358-09-696-391

Fax: +358-09-677-059


Telecommunications Administration Centre

Ph: (358) 09 69 661

Fax: (358) 09 6966 873



Association francaise de normalisation

Ph: +33-01-42-91-5555

Fax: +33-01-42-91-5656



VDE- The Association of German Electrical Engineers

Ph: +49-0-69-63-08-0

Fax: +49-0-69-6-31-2925



Hellenic Orandization for Standardization (ELOT)

Ph: +30-1-228-0001

Fax: + 30-1-228-3034



Hungarian Standards Institution (MSZT)

Ph: +36-218-3011

Fax: +36-218-5125



Bureau of Indian Standards

Ph: +91-3231-391



Atm Forum

Ph: 650-949-6700

Fax: 650-949-6705


ADSL Forum

Ph: 510-608-5905

Fax: 510-608-5917


ESD Association

Ph: 315-339-6937

Fax: 315-339-6793


Frame Relay Forum

Ph: 510-608 5920

Fax: 510-608-5917


International Telecommunications Union

Ph: +41-22-730-5111

Fax: +41-22-733-7256


International Electrotechnical Commission (IEC)

Ph: +41-22-919-02-11

Fax: +41-22-919-03-00


International Standards Organization (ISO)

Ph: +41-22-749-01-11

Fax: +41-22-733-34=30



National Standards Authority of Ireland

Ph: +353-1807-3800

Fax: +353-1807-3841



Standards Institution of Israel

Ph: +972-3-646-5191

Fax: +972-3-642-6762



Italian National Standards Body (UNI)

Ph: +39-2-25-773-295

Fax: +39-2-25-773-222


Italian Electrotechnical Committee

Ph: +39-2-2577-31

Fax: +39-2-2577-3210



Japanses Industrial Standards Commission

Ph: +81-3-3501-2096

Fax: +81-3-3580-8637



Telecommunications Technology Association

Ph: +82-2-723-7073/5

Fax: +82-2-736-0384



Lithuanian Standards Board

Ph: +370-2-70-93-60

Fax: +370-2-22-72-52



Department of Wireless Telegraphy

Ph: +356-247-224

Fax: +356-247-229



Asociacion Nacional De Normalizacion Y Certificacion Del Sector Electrico (ANCE)

Ph: +52-520-9026

Fax: +52-520-8800


New Zealand

Standards New Zealand

Ph: +64-4-498-5991

Fax: +64-4-498-5994



Netherlands Standardization Institute (NNI)


Fax: +31-152-69-0271



Norwegian Technology Standards Institution

Ph: +47-22-59-67-00

Fax: +47-22-59-67-33


Norsk Elektroteknisk Komite (NEK)

Ph: +47-22-52-69-50

Fax: +47-22-52-69-61


Portuguese Institute for Quality

Ph: +351-1-294-81-00

Fax: +351-1-294-81-01w



Romanian Standards Institute

Ph: +40-0131-55870

Fax: +40-0121-00833


Saudi Arabia

Saudi Arabian Standards Organization

Ph: +996-1-452-0132

Fax: +966-1-452-0133



Slovak Office of Standards, Metrology, and Testing

Ph: +42-393-521

Fax: +46-8-30-18-50



Swedish Electrotechnical Commission

Ph: +46-8-610-30-60

Fax: +46-8-30-18-50



SwissTelecommunications Association

Ph: +41-31-390-40-40

Fax: +41-31-390-40-41



Thai Industrial Standards Institute

Ph: +66-2-202-3300-3304

Fax: +66-2-202-3415



Turkish Telecommunication Co.

Ph: +90-312-555-6700

Fax: +90-312-555-6705


United Kingdom

British Standards Institution (BSI)

Ph: +44-181-996-7000

Fax: +44-181-996-7001


British Electrotechnical Committee

Ph: +44-181-996-9000

Fax: +44-181-996-7799

United States

American National Standards Institute (ANSI)

Ph: 212-642-4900

Fax: 212-302-1286


Audio Engineering Society Standards Committee

Ph: 212-661-8528

Fax: 212-682-0477



Ph: 800-421-2673

Fax: 732-336-2559


Electronic Industries Alliance

Ph: 703-907-7500

Fax: 703-907-7501


Federal Communication Commission (FCC)

Ph: 800-225-5322

Fax: 202-418-0232


Food and Drug Administration (FDA)

Ph: 301-443-6597

Fax: 301-443-8818


Institute of Electrical and Electronics Engineers (IEEE)

Ph: 732-562-3800

Fax: 732-562-1571


Instrument Society of America

Ph: 919-549-8411

Fax: 919-549-8288


National Conference of Standards Laboratories (NCSL)

Ph: 303-440-3339

Fax: 303-440-3384


National Institute of Standards and Technology (NIST)

Ph: 301-975-3058

Fax: 301-926-1630


Society of Automotive Engineers (SAE)

Ph: 724-776-4841

Fax: 724-776-5760


Telecommunications Industry Association

Ph: 703-907-7700

Fax: 703-907-7727

Underwriters Laboratories

Ph: 847-272-8800

Fax: 847-509-6219


Standards can be purchased from their respective agencies. In addition, many can be purchased from the following distributors listed below. Note that Global Engineering Documents has a local St. Louis office.

Document Center

Belmont, CA

Ph: 650-491-7600

Fax: 650-591-7617


Document Engineering Co.

Van Nuys, CA

Ph: 800-645-7732

Fax: 818-782-2374



Manchester, MA

Ph: 987-526-1687

Fax: 978-526-7118


Global Engineering Documents

Englewood, CO

Ph: 800-854-7179

Fax: 303-397-2740


or at

7730 Carondelet Avenue

St. Louis, MO 63105


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SUPPORT GROUPS by Ginni Campbell, Small Business Development Center

Inventors Association of St. Louis

P.O. Box 165544

St. Louis, MO 63105


National Federation of Independent Businesspeople (NFIB)

RCGA Small Business Council


National Association of Women Business Owners

7165 Delmar Boulevard, Suite 204

St. Louis, MO 63130-3403



World Trade Center of St. Louis


World Trade Club


Small Business Network ( sponsored by the St. Louis Small Business Monthly)


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TAXES by Roger Byrne, Schmersahl, Treloar & Co., P.C.


The process of starting a new business presents a myriad of tax issues that have to be addressed early on. There are some basic principles that apply to starting a business no matter what type of business is being established; therefore, as the process commences, attention should be focused on these certain considerations, not the least of which are tax related.

Taxation issues are an important part of being in business and are relevant to virtually all significant business and planning decisions. As the tax system becomes increasingly complex, it is imperative that a business either have someone on staff experienced with the relevant tax systems or utilize the services of a tax professional who can respond to the business' tax needs.

The following is a listing of the various types of taxes that businesses are affected by on a continual basis and need to be addressed.

Federal Taxes

Federal income taxes

Federal payroll taxes

State Taxes

State income taxes

State annual registration fees

State franchise taxes

State payroll taxes

Local Taxes

City/county income taxes

City/county registration fees

City/county payroll taxes

City/county real estate taxes

City/county personal property taxes

Wage Withholding & Payroll Taxes

Federal withholding taxes

Federal payroll taxes

Federal unemployment taxes

State withholding taxes

State payroll taxes

State unemployment taxes

City/county withholding taxes

City/county payroll taxes

Sales / Use Taxes

State sales & use taxes

City/county sales & use taxes

While information on the federal and state tax systems is usually readily available, information on local taxes is not quite as easy to come by. Some counties and cities provide tax information on their websites; however, for those counties and cities without websites local city and county officials should be contacted.

The services of a qualified tax lawyer should be engaged when undertaking corporate acquisitions or mergers or seeking financing through public bond offerings. Although such activities may be more applicable to the successful growth company than the start-up, start-ups generally aspire to become growth companies.

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TECHNICAL ASSISTANCE by Jim Hahn, UM-Rolla Engineering Center, St. Louis

Most technology-based hardware products will require some technical assistance to get them to market. Depending on the circumstances, this assistance may include any and all of the following:

Feasibility, cost and performance advice on a product idea

Design and construction of a mockup or working model

Limited production for evaluation and test marketing

Failure analysis and reliability evaluations

There are a number of sources for this type of assistance, but they are not well-organized or easily found. In many cases, the best approach for finding them is to ask someone who has recently used this type of assistance. If that is not possible, some sources to try are:

Engineering and product development companies listed in the Yellow Pages. Be aware, however, that companies listed under "Engineering" are generally consulting firms for construction and public works projects, and do not do product development. Nevertheless, it may be worth a telephone call to some of the firms listed in the Yellow Pages, on the possibility that assistance or a further referral can be obtained.

Another excellent source of technical help, especially in the early conceptual stages is the local educational establishment. The St. Louis area boasts several fine engineering schools, with substantial faculty expertise in a very wide range of technical areas. You will find that many faculty members are not interested in working with inventors or entrepreneurs, as they do not view such work as being a part of their charter as faculty members. However, if you can get professors interested in your product, they can be an invaluable asset. They can tell you if your product idea violates some basic scientific principle, which can keep you from investing a lot of time and money in an idea that isn't feasible (even though you don't want to hear that it isn't feasible). Some with a practical bent can also help you design and build your first working model, prepare specifications for the product, and assist with the testing and evaluation of your first units.

A professor can also be a conduit to a senior or graduate student, who may be willing to perform design and development of your product as a senior project or research for a Master's degree. The cost for this approach can be quite reasonable, but scheduling for faculty or students can be unpredictable, so the approach does not suit every situation.

Local universities with Engineering Schools are:

Saint Louis University

Parks College


Southern Illinois University-Edwardsville

School of Engineering


University of Missouri-Rolla

Engineering Education Center, St. Louis


University of Missouri-St. Louis

Joint Engineering Program


Washington University

School of Engineering and Applied Science


See the Education section for more information about universities.

There are several firms listed in the Yellow Pages under "Product Design, Development and Marketing", which can provide assistance in their specific areas of competence. Since there are relatively few of these, their suitability can be ascertained quickly by a few phone calls.

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TRANSPORTATION by Barry Flachsbart, Union Pacific Technologies

Employees need to get to and from your work site - a resource that can tell you about public transportation is: Bi-State Development Agency: 231-2345

In addition, taxi services (see "Taxicabs" in the yellow pages) and limo services (see "Limousine Serv" in the yellow pages) can sometimes be useful.

Goods often need to be shipped out and supplies and parts usually need to be shipped in. Packages can move via the U.S. Postal Service (phone: 800-222-1811) or via express shippers (e.g., UPS, Federal Express, Airborne) as listed under "Air Cargo & Package Express Serv" in the yellow pages. Also see "Air Courier Serv," "Trucking-Motor Freight," and "Freight Forwarding" in the yellow pages.

Larger shipments can move via trucking companies, as listed under "Express & Transfer Serv" in the yellow pages. Also see "Shipping Servs" and "Freight Forwarding" in the yellow pages.

"Railroads" in the yellow pages provides numbers that can be useful in making contacts for rail cargo services.

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UTILITIES by Barry Flachsbart, Union Pacific Technologies

Utilities are readily available throughout the area. Contact points:


Union Electric: 123-4567


Laclede Gas: 342-0500

(Also see "Gas Cos" in the yellow pages.)


St. Louis City Public Utilities 664-8330

St. Louis County Water 991-3404

(Also see "Water Cos-Utility" in the yellow pages.)


The regional bell telephone company in most of Missouri is Southwestern Bell.

Contact is: 800-203-8080

(Also see "Telephone Cos" in the yellow pages.)

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