Business Black Box Quarter 1 • 2011
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36 &66 Trail Blazers: Williams & Tully
Status Check: Political Issues
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Layers of thought GUT CHECK RANDOM & RELEVANT Big Picture 11 Questions 101 days What Matters
Q1 2011 September/October Q4 2010 2009
What Matters: Jay Hewitt
the think tank
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11 Questions: Mayor Terence Roberts
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Growth sales politics HR ceos Small Biz law global kidbiz
101 Days: Table 301
devereauxsdining.com thelazygoat.com
Table 301 is a group of restaurants, a group of people who truly love food, and a group of businesses dedicated to the highest standards of hospitality. Diverse in exquisite flavors, and consistent in excellent service, Table 301 creates experiences that make downtown Greenville, South Carolina an irresistible stop on the culinary map. We’re excited to open a new Table 301 restaurant in early 2011! Visit www.Table301.com or call 864.232.7007 to learn more about this new place to experience our hospitality. At each Table 301 establishment, old and new, every table is the best table in the house.
sobys.com
sobysontheside.com
Why Business Black Box? Whether planes crash or crews overcome obstacles to successfully complete flights, airlines go to the black box to discover secrets, answers, and missing information to explain what happened and learn for the future. That’s the mission of our magazine, our connect events, and our interactive platform.Newsofbusinesses succeeding, failing, merging, hiring, firing and more are reported everyday, all over the Upstate. But in business, the real power is not just hearing the news, but about going behind the scenes, discovering, connecting, and learning from those that made it happen.
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At the heart of every event, every blog, every magazine issue, and every documentary Business Black Box produces, you’ll find a relentless passion for connecting, advising and growing Upstate business.
EDITORIAL Editor-in-Chief Managing Editor Contributing Writers
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Layers of thought Black b ox
then, a factor of reinvention, but more simply, adaptation. How can we adapt to the business market in 2011? The past three years have effected more change in the market than, arguably, any other point in history. For many, 2011 is a breath of fresh air—a chance to leave the recession and its focus on mere survival behind. Even for those who have lost businesses, all of the changes— in legislation, political representation, economy—have created a new world, and it is time for all of us to adapt. On the other hand, if you use the second definition, “to bring back into existence or use,” the new year is simply a harvest waiting to be brought in.What can we bring back, that may have been lost? Let us bring back the positive outlook.
Let’s bring back the stability. Let’s bring back a booming Upstate economy that people fall in love with and helps revitalize the nation’s free market. Let’s bring back hope. Herbert Hoover once said: “Economic depression cannot be cured by legislative action or executive pronouncement. Economic wounds must be healed by the action of the cells of the economic body—the producers and consumers themselves.” It’s not up to them to change the world. It starts with each of us. So, start imagining—drawing, creating—what you will look like this year. After all, only you can decide what you will look like in the future.
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As we planned the cover for this issue, we wanted to explore the concept of reinvention. By definition, the word reinvent means “to make over completely” or “to bring back into existence or use.” In business,the concept of reinvention is common—for those who fail, or who hit a wall in their careers or businesses, the typically immediate response is to reinvent oneself. Ironically, rarely do we ever truly reinvent ourselves, at least, by the first definition. Like we discovered in the profile on Lt. Gov. Bauer, it is rare that someone would “make themselves over completely.” We cannot change our passions, or our talents, or even our strengths, so easily.What we can change— in most cases, our environment—is not,
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b o x GUT CHECK
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I
recently read an interview (on the site www. DumbLittleMan.com) with Richard Branson, one of the most successful entrepreneurs of this era. Branson talked much of his success, and how he has walked the path of success — and failure— for so many years. Something Branson said stuck with me: “We certainly need to know where we are going in life, but we also need to remain open to new possibilities. Things have a tendency to change and if we are prepared to sail with the wind, and not fight against it, life can take us on wonderful adventures, and we can end up in the most magical places.” How cool, that this successful billionaire (yes, that’s a B) is so open to new challenges and opportunities. It’s easy to dismiss it with “Of course he’s open to new things.You can be open to new things and risks when you have a billion dollars in the bank.” But to those naysayers I say, being open to opportunity is not something that comes with money—you either are, or you aren’t. It’s a state of mind, not a state of pocketbook. Those who are open are sometimes accidental in their success, but never in their perspective of opportunity. Then that reminded me of a quote from Dave Weinbaum: “A window of opportunity won’t open itself.” I grew up, as many of us did, hearing about that legendary “window of opportunity” or how, “when God closes a door, He opens a window.” But nowhere, at no time, did anyone mention what that window would look like, or how or when it opened, or who physically had to open it? I mean, would God actually open a window, or would He simply unlock it and let me do the opening myself? Of course, I’m being silly here, but let me just say it out loud:The window of opportunity being open to you, with heavenly lights shining and a golden arrow pointing the way…it’s a hoax.Yep. Just like the tooth fairy. (Sorry, but it’s true.) I’m with Weinbaum on this. The window doesn’t open itself. Sometimes, I doubt it’s even a window. Some of my opportunities have looked like keyholes, and others have resembled garage doors. Some opportunities hurt when you decide to take them — like an old broken window with a shattered pane. Some windows are six feet off the ground, and you’ll need a little help to get through. Some windows are made by a sledgehammer and a lot of work. And some windows are 10 stories from the ground, and the fall alone will kill you. (After all, just because a window is open doesn’t necessarily mean you should go through it.) The trick is not determining if something is a purported opportunity— it’s realizing when it’s a good opportunity. No one is going to tell you when it’s the best time to jump on something. No one will walk you over to a window and say, “this way.” It’s up to you— and me— to know enough about ourselves, and our passions, and our needs, to be able to see that chance. It’s 2011. What do your windows look like this year?
Editor, Business Black Box jordana@insideblackbox.com 864/281-1323 x.1010 twitter.com/jmegonigal facebook.com/jordana megonigal linkedin.com/in/jordanam Q1 2011
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Dine like a King. Or Queen.
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Q1 2011
what’s happening?
Here are just a couple of things going on around the Upstate for business owners, networkers, or entrepreneurs.
• WHAT - Greenville Chamber of Commerce’s 122nd Annual Meeting • WHEN - February 8, 2011, at 5:30 p.m. • WHERE - Carolina First Center, 1 Exposition Drive, Greenville • DETAILS - We will present the Chamber’s annual awards and the passing of the gavel from 2010 Chairman of the Board, Michael J. Hayes, to the 2011 Chairman, Sam Konduros. The keynote speaker will be Gary Kelly, Chairman of the Board, President, and CEO of Southwest Airlines. Cost to attend the Annual Meeting is $75 for Chamber members and $130 for non-members. For more info: For ticket information and questions regarding the event, please contact Jennifer Powell at 864-239-3731.
• WHAT - Spartanburg Chamber of Commerce’s 2011 Economic Forecast Breakfast • WHEN - February 18, 2011, at 8 a.m. • WHERE - Campus Life Center Ballroom, USC Upstate, 800 University Way, Spartanburg • DETAILS - During this annual event, the Chamber takes a look at the 2010 Economic “Year in Review” and looks ahead to the trends we are seeing as we begin 2011.
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For more info: Call (864) 859-2693 or email ecc@ easleychamber.org • WHAT - GSATC Luncheon • WHEN - February 9, 2011, at 11:30 a.m. • WHERE - Embassy Suites, 670 Verdae Blvd, Greenville • DETAILS - Ample networking opportunities, a great presentation, and door prizes, all within the Upstate tech community. This month, Juan Gilbert, Chair of the Human-Centered Computing Division in the School of Computing at Clemson University, will speak on “Developing Systems People Can Use” For more info: visit www.GSATC.org
The Best We’ve Heard... “If yo u busin don’t dri drive ess, you ve your n ou t of b will be usine - B.C ss. ” . For b es
Get connected by listing your event for FREE on our Business Black Box master business calendar:
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For more info: Contact Yvonne Harper at (864) 594-5032 or yharper@spartanburgchamber.com
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• WHAT - Easley Chamber of Commerce Luncheon • WHEN - January 20, 2011, at 11:45 a.m. • WHERE - DunBurks Premier Events, 110 S. Pendleton St, Easley • DETAILS - A monthly luncheon, hosted by the Easley Chamber of Commerce. January’s speaker will be Jane Robelot from WYFF. Cost is $15 for members and $18 for guests.
Lots more to see at www.insideblackbox.com
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Q4 2010
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Random&Rele Random & Relevant
Between the Pages
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What we read: Eat Mor Chikin, Inspire More People: Doing Business the Chick-fil-A Way, by S. Truett Cathy, 2002 The Gist: If anyone knows what it takes to run a successful business, it’s Truett Cathy, the founder of Chick-fil-A restaurants across the country. In Eat Mor Chikin, Cathy takes an honest perspective of his successes and failures, and how he built one of the most loyal customer bases in this business generation (as well as the origin of those crazy cows!)
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what Steve said...
a ding t u p o t “I wante universe.” in th s Job -Steve
what we said... iDing? n a e b that oes “Would h will it run? D uc ” How m mera? a c a e it hav
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x ack Bo l B s s e Busin
Business directory
How it’s Written: As an autobiography, where Truett tells the beginning-to-middle of his career (it was written in 2002, so there was a lot more that happened as the Chick-fil-A brand continued to grow), the book is easy to read and makes for a great story on growth,
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Great if: You’re building a brand, starting a business, or just love a great story.
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Don’t miss: Chapter 9: “The Loyalty Effect”, where Cathy talks about his refusal to fire a restaurant operator, and the reprocussions of that decision. He transfers the concept of true loyalty from his employees to his customers, and guess what? That trait was one of the most important that Cathy ever introduced. Our Read: Cathy is an inspiration to many, and is no different in the business market. So it stands to reason that his book would be inspirational to small or growing companies, as well.
Q42011 Q1 2010
Networkfleet
Networkfleet, Inc. is a leading provider of wireless fleet management services that improve fleet operating efficiency by reducing fuel consumption, maintenance expenses and vehicle emissions. The company’s technology combines patented remote diagnostic monitoring with GPS-based Automatic Vehicle Location (AVL) systems. With more than 50 patents issued or pending, the company received a 2006 American Business Award for Most Innovative Company and a 2006 Frost & Sullivan Technology Innovation Award for Wireless Emissions Monitoring. 864-356-4714 • www.networkfleet.com
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RANDOM & RELEVANT
New technologies such as smart phones, iPads, Netbooks, and other mobile devices provide you with way more than just email support and fun games for the kids. There are many extremely powerful tools for facilitating business. We get asked all the time what technology or apps we utilize in our day-today workflow. So, here, we’ll share just a few with you each issue. This issue focuses on Apple’s revolutionary device, the iPad (which we love), and several productivity apps that will empower you in your next meeting. DropBox. DropBox is a web-based cloud storage service for any files you have such as documents, emails, audio clips, videos, etc. This service installs on your desktop (PC or Mac) and allows you to sync your files so you can access them anywhere. Download the free DropBox app from iTunes, and you can access your files on your iPad. DropBox has several tiered plans, but their basic free plan allows you to sync up to 2GB of data—more than enough for most people to sync hundreds of documents. Audiotorium. Audiotorium is a note-taking app that allows you not only capture text notes, but also audio of your meeting, then divide your notes into separate categories based on subject or by client name. The best part is the ability to sync it to your free DropBox account on save, where you can access those notes from your personal computer or through the DropBox website.
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Both of these are great apps on their own, but together provide a powerful combination for any one using multiple systems for files and work information.
MEDIABUZZ
We looked up (with the help of Google’s new ngram viewer) how often the following words were printed in books, magazines or newspapers, from 1800 to 2010. As you can see, we wanted to see how the words “innovation”, “Invention”, and “creativity” trended. Looks like we are becoming more and more innovative and less inventive, as years go by. Input your own words online at Ngrams.googlelabs.com
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b o x STATUS CHECK
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Healthcare, tort reform, tax breaks, unemployment— they all get a lot of attention during campaign time. But what is the one issue that is the most important for a business? What is the one thing you’d like to see addressed to ensure a better climate for the business economy?
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There are certainly the popular issues
which sell great on the campaign trail. In my opinion, we have an underlying issue of utmost importance which is education. Considering the fact that we have some 11 percent unemployment in S.C. and at the very same time some 140,000 open positions that cannot be filled due to the lack of qualified applicants with the educational background, training and experience necessary for these careers, I certainly believe the focus must be on public education reform combined with parent involvement, support from the business community and our political leadership. The dropout rate in S.C. high schools is still simply catastrophic in spite of current improvements and we must not fall into the trap of comparing with the worst to make it look reasonably okay. S.C. has successfully managed to get international companies to set up their facilities here and major efforts are under way to entice more to come and settle in our state. It is crucial that we manage to provide a world class level workforce and employees. We must look at education standards in the leading countries and find solutions that are competitive on the global level and not just compare ourselves with other states in the US.This requires some bold thinking and evaluation of alternatives that are potentially unconventional to current local standards. The voucher discussion is just a diversion from the real issue, which is the creation of an outstanding public education infrastructure and a comprehensive strategy to engage, enroll and integrate parents physically and emotionally.
There are at least three dark clouds gathering
for the near future. Definitive tax policy, banking and lending crisis and unemployment. Just to start!
Bryon Culbertson, Investment Concepts I agree with all the comments because I think they are all part of the alternative universe in which the government entities operate. Somehow they do not think Small Business Owners will notice that the governments are taking huge amounts in taxes from our pockets and then offering a fraction of it back to us in the form of tax credits.And apparently they don’t believe us when we say give us an opportunity to do business (sell our products and services for a fair return) instead of offering us loans that we are afraid we cannot pay back.And they appear to be puzzled when we ask them to hire or buy from our companies instead of creating new agencies and departments that cost more money to man and operate than if they had hired or purchased from our Small Business. It feels like a low budget science fiction movie.
“The question is: will our political leadership be willing and capable of taking on this 800-pound gorilla?”
If we cannot manage to solve this matter we shall not be able to reduce our unemployment rate significantly, as the market place will attract qualified people from outside of S.C. to fill the positions, leaving those who have no jobs now without jobs in the future, too, and the pool of jobless people just grows with every student dropping out. Obviously, this will also have a negative effect on the crime rate which reduces the quality of living, which lessens the potential of new company moving here to create more jobs.The question is, will our political leadership be willing and capable of taking on this 800-pound gorilla in the room in an effective and efficient manner without wasting time, energy and resources on continued political posturing?
Manfred Gollent, QLI International Taxes, taxes, taxes
Julie Brown I would agree, it would be healthcare reform and
taxes.
Chip Smith, Groundsmaster
Leverage & Development, LLC
I’m going to agree with Chip and Julie and perhaps
broaden my answer to “the government-added costs of doing business.” It’s one thing to have marketing costs, product costs, R&D costs, technology costs, etc, etc. It’s another to have costs that have nothing to do with serving the customer, producing an excellent product or service, or growing the business—and those are the masses of costs that we’ve had placed on us by the local, State, and Federal government. That includes the cost of the unfunded healthcare mandates/regulations, but also so much more in regulations and taxes and spiraling energy costs—all of which and more spring from the government mandates.
Sarah Hey,Wyche Law Firm Fueling small business and entrepreneurship. We know our prosperity comes from small business.With health care changes, tax law and other business pressures, how do we (government and the private sector) promote small business growth?
Hank Merkle, ITW Shakeproof
Join the discussion! Join our group— Business Black Box—on LinkedIn to give us your feedback on this and many other subjects! Q1 2011
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including unemployment tax increases for many businesses who have done a great deal of the hiring over the past few years! Small businesses employ the majority of the workforce and most pay taxes at the individual rate (S corps, LLC’s) so policy directly affects the ability to add/keep jobs.
Janet Christy,
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GROWTH Black
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GROWTH
6 ways to improve your selling system Terry Weaver is the owner and CEO of Chief Executive Boards International, a peer advisory community for successful business owners and CEOs. Terry has held many leadership positions, such as Divisional VP for Johnson Controls, Inc., President/COO of KEMET Corporation and director of two Japanese Joint Ventures. He is also founder of Metaprise Consulting and Delta Resource Group.
Last quarter, we visited the essential ingredient in your growth strategy—a selling system that delivers enough new and repeat revenue to meet your growth objectives. As a reminder, an effective selling system includes:
Lead generation—A repeatable process for finding those who might need your product or service
Opportunity development—When prospects put their hands in the air, wanting to hear more Qualification —Sorting out the “best few” prospects— those who want and need exactly what you sell
Proposal—A specific selling proposition to which a prospect can say “yes”
Closing—Getting a prospect to say “yes”, “no” or “not now”
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How does your own selling system compare? What part of your system is the bottleneck in your growth? In most businesses, it starts right at the beginning—with an inadequate or non-functional lead generation mechanism. How can you improve your lead generation machine? Recognize that lead generation strategies are not universal. For some companies, advertising really works. For others, it’s useless. For high-touch and service businesses, networking is the name of the game. For others, such as products distributed globally, it’s simply impractical. Here are six lead-generation strategies you might consider adding to what’s already working for you: 1. Advertising —Tried and true, and effective if you have a product or service with broad appeal. Best combined with a trackable special offer, coupon, 800 number or web landing page. Plan in advance to measure each ad’s effectiveness. The narrower your niche—either product or customers—the harder it is to find an effective advertising venue. You’re paying to reach a lot of Q1 2011
“eyeballs” that can’t help you. 2. Direct Mail—Costly, but effective if you know exactly to whom you want your message delivered, such as a specific job description in a specific vertical market. Or homeowners in a certain age of neighborhood. Low yield, because available mailing lists are lousy, no matter what the vendors say. 3. Email—Cheap and easy. The tricky part is acquiring the email list—you’ll need a strategy for that, and it can be combined with a campaign for farming existing prospects. Your message should be more informational than promotional. 4. Networking—Labor-intensive but hugely effective. If you’re selling in limited geography and your lead-generation strategy doesn’t include multiple networking events per week, you’re missing the boat. Impractical if your footprint is large. 5. Web Marketing—Essential in 2011. Search Engine Optimization is key if you’re selling something lots of people are looking for. Regardless, your website content is an early differentiator in determining whether leads inquire for more information. 6. Social Media—Still evolving, and generally most effective in reaching a broad base of consumers. Some are finding ways to leverage Social Media in Business-toBusiness marketing. It takes a lot of maintenance and almost daily attention from someone. Your lead generation mechanism is the cornerstone of your selling system. Make sure you know it’s working and that it’s generating enough opportunities to meet your growth plans.
acknd b d e Fe orm, advise ua visit
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Farming—Maintaining and renewing your company’s visibility with the “not now’s”
by terry weaver
th o st Brain in when y om/Grow c . h weig lackBox eB Insid Q1 2011 22
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After 15 years in public office, André Bauer is now making some changes. But how do you take a very public career—with all its ups and downs — and reinvent who you are and who you will be?
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by Jordana Megonigal photos by Chris Isham
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“ a glass of water placed in front of his folded hands. He has come here to talk, frankly, about the ups and downs he has experienced, and about what the future is looking like. A quick warning from me: “Some of the stuff I’m going to ask might be touchy,” is quickly responded to with “I don’t care.” He’s open. He’s willing to talk, and no subject is off the table. Close by, his assistant taps away at a phone, setting schedules and keeping close watch at the time. After all, Bauer is a busy man—after today’s talk he has to make a stop in Columbia, then head onto Myrtle Beach for a charity gala. Plans for Thanksgiving are wrapped around a trip to Phoenix (for state leaders from around the nation), Christmas tree lightings, and of course, the Clemson-USC game. It’s not all that unusual for him to keep such a schedule — take one look at any of his five Facebook pages and you’ll be able to keep track of just how much is on his plate.
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But for Bauer, it’s simple. Being elected to the position of Lieutenant Governor came with expectations and responsibilities—things he isn’t willing to shirk simply because he knows he’s not staying past January. “When I leave here, I want people to say, ‘That guy worked ‘til the very last day and continued to do the job that he was elected to do.’”
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“
our surroundings help you decide how you feel about politics, what you feel the role of government is—that’s all due to your surroundings. And that can mean where you were brought up, who your teachers were—all that has an affect on you. So, I don’t expect everyone to agree with me, because we all have different perspectives. But we’ve got to get creative, and that’s part of what government, too often, doesn’t want to do.”
– André Bauer
An
Entrepreneur is born
Getting
creative But while his creativity on the campaign trail may have gotten him the vote, that same innovation was often frowned upon by the established politicos in Columbia. Bauer himself recalls a time when he suggested that a new revenue source be to sell naming rights to state buildings and roads. Within hours, political cartoonists had renamed the Statehouse “Pepto Bismol Capital,” (according to Bauer) and commentators were poking holes in the idea left and right. “No one else would talk about it after that because they didn’t want to be made fun of,” Bauer says. “There are so many things to Q1 2011
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To examine the man now, one must always go back to where he began. For Bauer, it all began in Charleston, when he was born to William and Saundrea in March of 1969. Facing a less-than-ideal childhood, André took to each situation like an entrepreneur to make it a workable, liveable situation. He worked to pay for school lunches, because his sister was mortified to qualify for the free lunch program. He bought day-old bread and discounted lunch meat to make and sell sandwiches to local construction crews. He sold candy for five cents apiece to the rich kids in his class. He mowed lawns well into the night, just to make another dollar. Growing up in South Carolina, he graduated from Irmo High School. When it came time to go to college, there was no question as to whether or not he could afford it (because he couldn’t). Instead, he took a scholarship to USC—with the stipulation that he major in hotel management—just so he could go. But college didn’t slow him down—along with classes and cheerleading, he also started a T-shirt business, and bought a house and renovated it room by room until he could sell it. After graduation, the entrepreneur spread his wings a bit, selling sporting goods to national stores like Wal-Mart. As a small businessman, he became frustrated with government and its treatment of South Carolina businesses. Not long after, at the age of 27, he was elected to the S.C. House of Representatives. Two years later he was elected—by a special election—to the S.C. Senate.
Three years later, he was elected Lieutenant Governor of South Carolina—the youngest one in the entire United States. Still, these years in service don’t seem to have changed him much, if at all. In fact, according to stories told by his Deputy Chief of Staff, Frank Adams, one could rank Bauer’s campaign stories with the most legendary. One July, while campaigning in a neighborhood, Bauer noticed a man fixing his roof. Rather than walk by, Bauer climbed the ladder to talk, face-to-face, with the man who would soon give him his vote. Another time, he noticed that each person was frustrated because no one would fill the potholes in the neighborhood. From door to door, that was the complaint and criticism of local-level government. Not long after, Bauer himself arrived, shovel in hand, to personally fill each and every pothole. He carried the neighborhood vote unanimously.
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talk about to save money and to get creative, but immediately when you do, people will poke fun at you.” It didn’t seem to stop him, though. From selling ads on the sides of school buses or the backs of library cards, Bauer always seems to have an idea. “I don’t expect everyone to agree with me, because we all have different perspectives,” he says. “But we’ve got to get creative, and that’s part of what government, too often, doesn’t want to do.” And while disagreement and dialogue are well-received by Bauer, one thing that isn’t is an unwillingness to change. “If you talk about school choice, immediately you are antieducation,” he adds, referring to a school system that contains 85 school districts in 46 counties. “We’ve been at the bottom of the pack for so long, we’ve seen states around us catapult [their scores], but we’re just gonna keep doing what we’ve been doing because we don’t want to become “anti-education.” And we’ll continue to spend more per pupil, but we wouldn’t dare try some of these new ideas that could work.” After all, the passion for change and the intolerance for the word “no” is one that has been bred in him since childhood. “He knows how to get things done,” says Adams of his boss. “Maybe unconventionally, but he knows how to get them done.” Still, the fight for new ideas has not come without its wounds. The list of items that Bauer is known for is not short, and not without controversy.
know me personally and those who read about me in the paper. So who knows? You don’t surround yourself with people who say negative things about you, so I don’t submerse myself in a bunch of people beating on me every day,” Bauer adds, then with a slight smile: “If I’m looking for love, I certainly wouldn’t go looking for it on a blog. “Do I wish that everybody loved André Bauer? Of course I do. Do I wish people were more thankful of the time I put in? I think everybody wants that. But again, there’s a practical side that says ‘I’m not out to make everybody happy.’”
Moving
forward
The story of Bauer’s future really began in June of 2010, when he lost in the gubernatorial primaries. It was at that point that his “backup plan” came into play. “You always have a back up plan, and my plan was—whether I served four or eight years as governor, or whether I didn’t—that I was going to go back and get more involved in my businesses,” he says. “My goal was never to be a lifelong elected official. So because I didn’t get the ultimate result I wanted out of the election, it put me on
Business Black Box
“When you’re the only person willing to stand up and talk about something, you’re gonna get pounded on. You’re gonna take some shots. That’s part of being a leader.”
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There’s the speeding tickets.The plane crash.The “feeding strays” comment. Finally, a loss at the 2010 primaries. And that’s outside of the day-to-day political commentary. But for Bauer, the criticism is something that comes with the territory. “When you’re the only person willing to stand up and talk about something, you’re gonna get pounded on,” he says. “You’re gonna take some shots. That’s part of being a leader.” Then again, he admits, sometimes things can get blown out of proportion. “You know, the media gets to decide what news is, and not only do they decide what news is, but they get to decide how someone looks at it,” he says.“So, you could say ‘I’m against teacher pay raises,’ and immediately you’re against education. If you say ‘I’m for teacher pay raises,’ then you’re immediately in favor of raising taxes to pay for those raises. “Sure I had a plane crash. I got beat in [the 2003] primary too, and most people said I was “toast” in politics. But I went on to win in the runoff. No matter what’s happened in my life, when people counted me out, my drive and determination never waivered.” In the end, he says, it’s the perspective, of the people of South Carolina that matters. “I think that most people realize that I’m an extremely hard worker—there’s a vastly different perception from people who Q1 2011
a quicker route to get back on track to spend more time in business.” Still, it didn’t change who he was— for six more months, he would be Lieutenant Governor of South Carolina. And that was a position he still took seriously. The day after his loss, he popped up in cities across the state with sign that read “Thank you for 8 years as Lt. Governor.” Rather than being a “lame duck,” Bauer took it upon himself to make every day count. “Everyday, I’m doing this [temporary] job as hard as I can. Every day.”
“No matter what’s happened in my life, when people counted me out, my drive and determination never waivered.”
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Adams agrees.“He wears out two or three sets of staff daily,” he says. Still, Bauer calls the last six months “the greatest six months of my life.” Why, you might ask? “Because he pressure’s off,” he says, with a smile as wide as his face. That may be why, when he talks about what he’ll do once out of office, his first answers are direct and simple. His first response: “…Spend time with my friends and family, whom I have neglected for the past 14 years because I have tried to be everywhere that I was invited.” Secondly, he expresses the desire to travel, for leisure instead of business.
In the past, that passion has materialized in his plans to help keep many seniors at home, establishing programs that would help care for them. He also established the Task Force on Senior Fraud—a program that would protect S.C. senior citizens from predators who would take them for everything they had. In the future, it doesn’t look that different. Bauer plans to continue to help the senior population wherever and however he can—continuing his foundation in their honor and holding events (like the blanket and heaters donation drive he recently promoted) to benefit that population.
Do I wish that everybody loved André Bauer? Of course I do. Do I wish people were more thankful of the time I put in? I think everybody wants that. But again, there’s a practical side that says “I’m not out to make everybody happy.” “I recently took a trip that started in Portland, Maine, and drove all the way down the coast—went through Baltimore (Jasper County) and D.C. It was an amazing trip, but usually I haven’t had time to do anything like that.” Still, to talk of reinvention—of re-examining who you are and who you will be going forward—isn’t something that quite fits, in Bauer’s case. Although he is beginning a new chapter in his life, his plans for this new stage are not unlike those of past years. According to his back-up plan, he will go back into business— and likely, for at least part of the time, will focus on investing in the real estate market, even as he looks for his own new home in the Upstate.
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“André is a man who never went out ‘looking for a job.’ He went out and created one.”
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He also wants to keep in touch with the state’s senior population—something he has been passionate about since before he took office, and before the Department on Aging was entrusted to the Lieutenant Governor (at his request) back in 2004. Much of that passion he attributes to his own grandparents, who were some of the most influential forces upon his life, ever. Q1 2011
“With seniors, the biggest reward is seeing their appreciation,” Bauer says. “They are so glad to have someone advocating for them…to hear the stories, to see what they are going through… that has been the greatest reward of my public service.” But regardless of where he ends up in five or ten years, one thing
There’s still a lot of opportunity, and I wouldn’t say the final chapter’s written. is certain: he won’t be sitting still for long. After all, according to Adams, “André is a man who never went out ‘looking for a job.’ He went out and created one.” In the end, the reinvention of André Bauer isn’t a reinvention at all—it’s simply a readjustment to a new era. Although he’ll hold different titles and homesteads, the one thing that never changed was the man himself. “I’m still gonna be vocal,” he says. “I’m still gonna be pushing my elected leaders for the type of government I think they should be pushing for. “I think that, at 41 years old, there’s still a lot of opportunity, and I wouldn’t say the final chapter’s written.”
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SALES bracing for the upcoming storm
Todd Korahais currently serves as Operating Partner for Keller Williams Realty. He has successfully built three different businesses and at age 31 sold his first business to a publicly-traded company. His community involvement includes several board positions and leadership roles in civic, business, and philanthropic organizations— most specifically, the Greenville Chamber of Commerce and Clemson University.
Sales Black b ox
by todd korahais
if an economic downturn turns into a double-dip recession? A Thought:You may want to calculate what that means for the dayto-day operations of your business, as well as the cash flow to your personal income.
Step 2: Do you have a prospect list to replace any market share
that might be lost, if, regrettably, my pessimistic forecast is accurate? If you do have this prospect list, which ones are ready to become clients— and in what time frame? A Thought: A great way to prepare your business for a lull in cash flow or a reduction in market share is to begin cost-cutting and expense In my last column, I went out on a limb for all of you by putting control today. You don’t have to already be in the storm before you my cards on the table about the impending double-dip recession. batten down the hatches. We discussed how to make sure your clients view your products and services as indispensable investments with a positive return, rather than Step 3: Marketing today through the use of social media, viral websites and blogging is a great way to communicate to just another vendor they spend money on. thousands of people for little to no cost. However, Oftentimes while at sea, a ship captain will tell the crew while others are solely using these tools, to batten down the hatches and brace for the impending they can “innovate” themselves right out storm. Well, we are at that time. Sales people are naturally of business. If your clients don’t see your gregarious and optimistic, so as a reflex, they will often smiling face in person, you have a problem. dismiss what they deem as a pessimistic outlook. And when you do see them, don’t tell However, storms, whether geological or economical, are them your problems; smile and then cry on an inevitable fact of life and business. the car ride home. Warren Buffet once said that more millionaires are A Thought: If you truly love what you made during recessions than in boom markets. Right do, external pressures, though stressful, will now, if you are in sales, you have an opportunity to grow not prevent you from caring about your your market share by simply outlasting the competition. clients, and they will know they are doing business with the right person. In 2006, I went to a real estate conference where the speaker said, “When you go home, make The coming storm is truly scary. We are facing sure you cut your budgets by 70 uncertain economic times, and if you’re truly percent.” He then clarified: “I not concerned, then I would seriously did not say seven percent—but question your judgment.Still, the key 70 percent.” The speaker said to weathering this storm is to face this because he had been what’s coming with courage and there before, and he knew confidence by working smarter that your sales volume will and harder, radically reducing go down from time to time expenses and outlasting the and a great defense against competition because they these dips is reducing your simply don’t want it as budget. bad as you do. In that same light, here are a few things to consider while looking into the future of your business.
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Step 1: The first thing you need is to anticipate where your vulnerabilities in your clientele currently exist. In other words, which accounts or customers might you lose,
y s. Brain when .com/Sale in h ig x we Bo Black Q1 2011 35 Inside
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Photo by Wayne Culpepper/FishEye Studios Q1 2011
F
ollowing a diverse career in sports marketing and committee work in planning for the Bi-Lo Center, Reggie Williams found herself in need of a change. Having lived in Charlotte for 17 years and more recently returning to Greenville to be near family, she began her search for what to pursue next. 1975 Reggie graduates from Clemson “I found myself 50 years old; things were changing in the University with a B.A. in English. economy and the world, and I felt like I had to reinvent myself,” she says. A significant life decision, Williams began to consider both what was trending Williams becomes the first Director in the market, as well as her own interests and talents. After much deliberation, she 1988 of Sales and Broadcasting for the struck what she thought had the potential to be proverbial gold. Charlotte’s first NBA team, the “I studied a lot—looked at different things—and felt that the Internet had a better Charlotte Hornets. than 50 percent chance of having success,” she says. The result: MyCityHD.com and GreenvilleHD.com—the first market-centric website of the MyCityHD.com family. forms partnership with 1993 Williams “I’ve always been very much a person who likes to get involved in the community, Carl Scheer(ScheerSports). and I came up with this concept,” Williams explains. From a content standpoint, local companies and other organizations can engage GreenvilleHD.com to develop a professional company video for them that will be hosted on the site under one of 1994 SheerSports is chosen to develop and build a new sports and its 20 categories. entertainment arena in downtown These videos offer a unique service to both the content provider, as well as the Greenville that soon becomes the content viewer. For the companies having videos of their work produced, they’re BiLo Center. able to share their message or services with the local community in a non-advertising context. Rather than materializing as simple ads to push goods and services, each video offers the local community an intimate look at the heart of each organization, 1999 Williams sells out of BiLo Center project and starts effort to bring giving them a better feel for the business and the individuals involved. baseball downtown. For viewers of GreenvilleHD.com, as well as other market-centric sites set to launch across the country in 2011, each of these websites provides a single stop 2008 Williams begins research on new where people can access information about local business from nearly every genre— Internet endeavor. whether you’re interested in fine dining or education, technology and more. Underneath this concept to create local information hubs for communities across the country through HD video is an underlying knowledge of the Internet 2009 MyCityHD formed with 300+ cities to launch. GreenvilleHD.com that makes the idea that much more compelling. “I chose video is because it’s very launches as the model. important to the Internet—to search engines,” Williams explains. “When a video comes up in a search, the search engine then indexes that video, and it becomes popular, so search engines then keep going back to that video.” Both through the use of video content, as well as creating individual sites for each community, Williams works to achieve her mission first for Greenville, as well as more cities across the country in the future: “The purpose of the site is to bring into focus the local community,” she says. “I believe that if a business is planning to locate somewhere, or if you’re already Profile by Andrew Brandenburg in that market or want to move your family somewhere, you want to know what’s going on in your local market,” Williams continues. “If you’re looking for a place to eat or a doctor or a charity to give to, you want to know what’s in your area.”
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The facts:
20 3 to 5
Number of videos consisting of business topics presented by the Greenville Chamber of Commerce that are found on GreenvilleHD.com Number of “channels” found on GreenvilleHD.com How long, in minutes, the average video on GreenvilleHD.com is.
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what to expect from governer haley John DeWorken is partner in The Sunnie Harmon and John DeWorken Group, a government relations and advocacy firm. He can be reached at deworken@ sunnieanddeworken.com.
......................................................... Weeks before the South Carolina gubernatorial election, my friends, most of whom are ardent pro-business folks, came to me with concerns that though they usually vote Republican, they were considering voting for Senator Vincent Sheheen, a Democrat, because, as they put it, they didn’t want another four years of the governor fighting with the South Carolina Legislature. Now that two months have gone by since the state elected its first female (and Indian-American) to the office, some individuals continue to voice their concern to me about whether the state’s new governor, Nikki Haley, will play nice with the legislature in order to move crucial job-creating initiatives forward. My response to them is simple: I don’t think that Governor Haley missed the day in school where the teachers taught how to effectively communicate and where they taught the importance of team building. In other words, I think she understands and will practice both to get things done. That being said, here is what we can expect from Governor Haley while she is in office.
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Reform
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Beyond her communications and team building skills, Haley is first and foremost a reformer. By her nature, she is not a “go-alongto-get-along gal.” Much like Governor Mark Sanford did during his administration, Haley will likely look for opportunities to change the way in which government operates for the better. But, unlike Sanford, Haley has the skills to better communicate with the legislature about those ideals and will be able to build coalitions among legislators to pass government-changing initiatives. Haley says that she wants to reduce the size of government; that government was not intended to be all things to all people. She also says that she wants elected officials, including the governor, to be more accountable to the citizens who elected them. Among her priorities to reform government, Gov. Haley said she will use her bully pulpit to push on-the-record-voting, meaning citizens will be better able to see the votes taken by state Senators and House members (Speaker Harrell and the House passed this measure in 2010); and, she will work to streamline government by eliminating waste. She uses the changes seen at the Department of Motor Vehicles and the Employment Security Commission (under Mr. Sanford’s watch) as examples. Haley also supports continuing Governor Carroll Campbell’s vision to increase the number of Constitutional Officers that are appointed by the governor—something the legislature, mainly the Senate, has been unable to pass.
Q1 2011
by john deworken
Jobs
There is no doubt that Haley will take this opportunity as governor to push for more tort reform, American Medical Association (AMA) guidelines in workers’ compensation reform, and the enactment of loser pays provisions.With the election of more conservatives to the House and Senate in recent years, these “judicial” reform measures will be easier to get through the legislature than in years past. Haley has gone on record saying that one of her primary roles as governor is to be the state’s leading economic developer.“Economic development and job creation is the most important issue facing our next governor,” she said. She has also said that she will significantly strengthen the Department of Commerce, and that she will be “on call” all day every day to help the state’s Secretary of Commerce recruit industry and create jobs. According to her, Haley learned at an early age the challenges faced by this state’s small businesses while growing up working for her parents’ fine ladies apparel retail store in Lexington (Exotica International). As a result, she says that she will dedicate much of her term as governor to cut government-created red tape that hurts small businesses, and drive bills that will support small business job creation. As a validation of sorts, Haley was endorsed during her candidacy by the National Federation of Independent Businesses (NFIB) – the voice of small business.
What else can you expect?
Knowing that Haley will try to work better with the legislature and work hard to be a team builder, she will be served well to recruit business and legislative leaders to accomplish the other issues important to her. Named “Friend of the Taxpayer” by the S.C. Association of Taxpayers, Haley, simply put, supports smaller government and fewer taxes. Like Sanford, expect her to question the return on investment and validity of publicly-funded projects. Often a thorn in the side of those who depend on public funds for projects and initiatives, Governor Sanford was popular among the state’s citizenry because of his efforts to call into question taxpayer investments. Expect Haley to do the same. As a Republican governor, Haley is also against the recently passed federal healthcare bill, and supports more state illegal immigration reform, Second Amendment rights, and term limits.
acknd b d e Fe torm, adviseoua visit
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Bottle Labeler:
In Line Labeling - North Charleston, SC
Bottles:
Owings-Illinois - Toano, VA
Labels for Bottles: MPI - Charlotte, NC
Signage:
Signs By Tomorrow - Spartanburg, SC
Cooler:
Pete’s Handyman Services - Woodruff, SC
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Photo by Brad Forth
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RJ Rockers Brewing Company Q1 2011
Construction/Renovation: Roebuck Buildings - Roebuck, SC
Brewhouse/Fermenters: ABT - Chicago, IL
RJ Rockers Brewing Company
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226-A West Main Street Spartanburg, SC 29306 Phone: (864) 585-BEER Open Mon - Fri 9 am - 5 pm Tours & Tastings - Thurs from 5 - 7 pm www.RJRockers.com
Electric Service:
Duke Energy - Spartanburg, SC
# employees: 6 Brew time: 5 hours (+ 3 weeks fermentation) Different beers produced: 15
Bottle Filling Machine:
Pete’s Handyman Services - Woodruff, SC
Fact: RJ Rockers produces 4,000 barrels each year (that’s 124,000 gallons!)
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the tale of the bad apple by julie godshall brown
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Julie Godshall Brown is President of Godshall Professional Recruiting and Staffing, a firm specializing in direct hire and contract staffing solutions in professional, healthcare, manufacturing, legal, financial, accounting, and technical markets. Julie has been in the human resources field for 17 years and is very involved in the Upstate community, currently serving in leadership roles on several business, civic, and university boards.
Consideration #3: Does the employee have a poor attitude
Does every business, large or small, have them? Do we hire them or create them? What should we do when we recognize them? I’m talking about the “bad apple.” You know the one—the proverbial one that rots the entire barrel! You recognize them by the rolling eyes during meetings, the argument at every turn, the negative attitude toward company policies or management in general, the barrier thrown into any new initiative, the drive that extends beyond competitiveness to step over those in his or her path, the complainer, the….you get the picture. As I head into this discussion, I can’t give you the answer, because I have not found it myself. But let me provide a few considerations that might lead us in the right direction. First and foremost, we all know the direct supervisor must confront the issue with specific examples and ask for commitment for improvement. Once that happens, it is the employee’s turn to give you the opportunity to evaluate the situation on its merits.
productive, profitable member of the team? Resist the temptation to ignore the situation or convince yourself that performance or production make up for negative behavior. I have occasionally found that some high-performing employees are characterized by the bad apple syndrome. I can only draw the conclusion that the competitiveness and driven nature that allows them to succeed also can be dangerous to coworkers. The decision to discipline or terminate a nonproductive employee with a negative attitude is much easier than for someone who is profitable for your company. Time and again, we see companies who feel that they should not terminate or discipline a productive employee who is creating negativity within the team.
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Consideration #1: Once confronted, did the employee respond in a defensive or constructive manner? If the supervisor can get to the “core” of the issue, it may be possible to improve the situation. After all, someone cannot fix an issue if they are not aware of it. On the other hand, we have all seen employees who are not willing to take criticism or who seem to make it their priority to be divisive for no apparent reason. The nature of the employee’s response will tell you whether you have a foundation on which to build a future relationship.
the employee make an immediate effort to improve the negative behavior? We don’t expect a 180-degree turn in 24 hours, but can you tell that your discussion was taken seriously?
Consideration #4: Does it matter if the bad apple is a
Consideration
#5: Remember that negative behavior affects coworkers, managers, and customers. If a negative employee is creating havoc inside the confines of your office, can you imagine the potential harm they might create in the community? Is this someone that you want to represent your firm? It is critical that other employees know that you will not tolerate negative behavior. Go over expectations and review policies during meetings where everyone is present. Remember the last “bad apple” who left your firm in the past. Did you have regrets? NO! Did you wish you had made the decision sooner? YES! Use past situations in which you made the tough but right calls to give you the courage you need to do what is right for the entire team.
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Consideration #2: Did
in general or is the issue surrounding one coworker or situation? Has the situation escalated recently? In other words, is the employee characterized by a poor attitude at work or is the behavior the result of a recent change at work or at home? We are not always aware of the issues outside of the office that might contribute to an overall negative attitude; however, an employer cannot tolerate negativity on a long-term basis.
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VC Intro
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Today, all over the world, companies are searching for funding—the life blood that can mean the difference between worldwide success and complete failure. For many, it simply means getting to that “next step” or becoming the next “big thing.” But the funding arena isn’t always as black-and-white as applying for a bank loan. From venture capitalists and private equity firms to angel investors, there are many options. What’s more: the recent changes in economy have created a world where innovation is growing, but the financial arena is choosier about how they fund it.
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For states like South Carolina, who flies under the radar for most investments, it’s even harder for companies to gain funding. It takes specialized efforts and specific intent to help those who are ready for the “next step” in our state succeed, as well as putting the right money in the right people’s hands.
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Funding, especially for high-growth companies, is a hard road to travel. Called the “Valley of Death” because of its high rate of failure—75 percent, by most measures—it shows a dismal picture of the risk involved in starting a company. (See illustration on the following page). From the beginning, where entrepreneurs may raise money through their personal savings or by borrowing from “friends, family and fools,” capital is typically provided at different stages by different groups. Once in a prototype stage, an entrepreneur may apply to an angel investor or angel group for higher funding. Seed capital follows, and finally, venture capital. While it used to be that venture capital was attained before a company had hit a break-even point, recent economic issues have deterred many from making investments that early in the process— many venture capitalists, instead, opt to wait until a company has stabilized, and are producing a revenue stream, to invest. What that has done, in essence, has created a larger-than-usual gap between seed capital and venture capital that isn’t being filled—a gap that many companies are faltering in, making the “Valley of Death” even more treacherous than in years past. “Typically, venture comes in after product development, but when you are still losing money,” says Ron Young, CFO of CreatiVasc, a young medical devices company based in Greenville. But now, he adds, “because of economy, VCs have moved investment time further out toward the breakeven point, leaving a large gap in funding.” And in South Carolina, where seed capital stages of $500,000 to Q1 2011
$3 million are virtually untouched, the gap is even more dangerous. The other problem facing entrepreneurs in all stages is that investors and private equity firms aren’t as quick to invest as they used to be. After all, the business isn’t philanthropic—the whole point is to make a return on the money being putting in. Where decades ago the pattern was to invest in a “spread” and hope that a few pulled good returns, the environment—and the new economy—has created a far different world in funding in the new millennium. For Young, who has been in the S.C. private equity sector for more than 20 years, funding young start-up companies is like “playing Russian roulette with a ten-shot gun and taking out two bullets.” The high risk and high rate of failure are enough to make anyone be quite careful with each dollar, but if these growing companies don’t have access to that funding, they can, quite simply, die.
Origins
There are many ways to get money, but the two most prominent in the process are through angel investments and venture capital. Although they may seem alike on the surface, there are actually a couple of very big distinctions to help differentiate the two. First, in timing—angel investments are typically made very early in the funding process, while venture capital is placed much later. Secondly, angels will usually invest their own funds in markets that interest them, while venture capitalists, using a system of funds and
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partners, “team up” to create larger funds with potentially larger returns. Both have been around for a while, even though the investment industry in the U.S. is still relatively young. While private individuals such as the Rockefellers and Vanderbilts invested in companies as early as the late 19th century, the first true venture capital firms were not founded until after World War II, when the American Research and Development Corporation and J.H. Whitney & Company began making deals in 1946. In 1958, as yet another step toward a federal realization of the importance of small business and entrepreneurship in the nation, the passage of the Small Business Investment Act allowed the Small Business Administration to help finance small business across the U.S. by introducing licensed groups called Small Business Investment Companies (or SBICs). In the ‘60s, venture capital became increasingly important as “up and coming” businesses were given funding—many in the medical or technical fields—and the emergence of what is today’s private equity fund began around the same time. Much of the activity focused in a small region of California, where companies like Fairchild Semiconductor flourished under the financing of Rockefeller family members and the funds they had built. Today known as Silicon Valley, it was the hotbed of venture capital activity long before the likes of Google and Apple came along. Not long after, areas like Route 128 in Boston, Mass., began focusing on entrepreneurs in their area, with additions like Greylock Partners, which started in 1965. Over the years, other metropolitan areas followed suit, learning to infuse their growing companies with the funding necessary for survival.
South Carolina Joins the Game
Our Partners in Funding
Of the four, Nexus Group, with firms in Massachusetts and a recent office placement in Charleston, S.C., typically is the earlieststage investor. Claiming to be “stage agnostic,” the group is more concerned with their other criteria: strong management team; strong proprietary position; and how much cash is required to get to full commercialization. Nexus is also the most South Carolinaactive of the four, by far, with 10 state-based investments, including Zipit Wireless and Sabal Medical. Nexus is also responsible for bringing about the Selah Techonologies acquisition by Lab 21, which resulted in a wellestablished European company building a North American headquarters in the Upstate. “We learned of Lab 21 and their interest to expand in the U.S.,” says Ed Snape, principal with Nexus. “We simply held their hand and guided them to Selah and the benefits of locating to South Carolina.” It’s a model which has been largely celebrated—the concept of using the investments as leverage to bring in existing businesses. “The whole $20 million investment with Nexus will be investments in companies that will either be in South Carolina or they are working to bring companies to South Carolina,” Harry Huntley, the executive director of JEDA (the Jobs/Economic Development Authority), says. “That’s really a good model. You have a proven product that they are bringing to the states and are setting up headquarters here…and they bring over investors with them. They don’t have the sole investment. So, there $20 million Q1 2011
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But in states like South Carolina, venture capital took a little longer to come into its own. Although private equity flourished in areas, and small funds cropped up over time, few efforts were concentrated on building a region of self-sustaining funding opportunities, and even fewer became truly successful. “Massachusetts and Silicon Valley recognized, in the ‘40s, that companies wouldn’t grow without venture capital,”Young says. But he noticed the void in funding opportunities in South Carolina, and in 1987, spearheaded the drafting of a piece of legislature that would take those first steps within the state. In 1988, the S.C. statehouse passed that legislation—called the Palmetto Seed fund. The goal was to provide a level of seed funding for South Carolina companies that hadn’t existed prior—at least, not backed by the state government in such a way. With some large losses (some reports claim $4.4 million was lost on an Upstate company), and some grand successes (a $750,000 investment in Corporate Telemanagement resulted in a $10 million return), the final verdict on the Palmetto Seed Capital Fund changes with the source. Some argue that it was a difficult run because of its management, which changed part of the way through due to some politicallybased infighting. Others suggest that its fatal flaw was in the initial requirement that the money must be used to invest in South Carolina alone. (The rules of syndication, where a lead investor in an area brings in other investors to piggyback, didn’t work in this case; investors typically don’t want to invest in an outside area unless there is a degree of reciprocity—“you scratch my back, and I’ll scratch yours.”) The following year, an amendment changed the law
to allow co-investment opportunities, as long as they could prove that for every dollar leaving the state, two were coming in. With political infighting and management changes throughout its history, the Palmetto Seed Capital Fund was either a great success, or a great failure, depending on who you talk to. Regardless, the fund broke even, and did not raise a second. The ‘90s saw a few other funds come and go—though some brought returns, few, if any, generated second funds. The new millennium brought more of the same—with a few like Trelys, which was founded in 2002 and still remains today. It was in 2003 that Senator Jim Richie and other state legislators helped draft the initial legislation of the Venture Capital Investment Act (or VCIA) that would create a program to infuse South Carolina companies with seed funding and help strengthen the state’s entrepreneurial base. Like the Palmetto Seed Capital Fund, the goal was to infuse the entrepreneurial community with the seed funding vital to their success. By taking a bank loan in the amount of $50 million, and investing it with a select few private equity firms who would then turn around and invest in S.C. companies, these legislators hoped that an economic boom would be right around the corner. So, in 2007, the South Carolina statehouse passed the VCIA, giving money to four firms after a somewhat rigorous bid process. Invest SC, the organization created by the state’s Venture Capital Authority to oversee these private investments, chose the firms based on a number of factors, including location, specialty and investment stage that each firm represented. In the end, Nexus Medical, of Boston, received $20 million, while Noro-Moseley, of Atlanta, Frontier Capital, of Charlotte, and Azalea Captial, of Greenville, each received $10 million. But in none of the agreements was there a requirement to invest in South Carolina.
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Azalea Capital Greenville, S.C.
Investment Focus: Primarily focusing on Management Buyouts, Acquisitions, and Corporate Carve-outs, Azalea invests in companies in the sectors of niche manufacturing, business services, consumer products and healthcare. S.C. Investments: SAGE Automotive – Spartanburg, S.C. Spartan Foods – Fairforest, S.C. (realized)
Frontier Capital Charlotte, N.C.
Investment Focus: Frontier focuses on investments in technology enabled business services companies, including Information Technology and Managed Services, Internet and Information Services, Healthcare Information Technology Services, High Value Business Process Outsourcing, Communications Services. As they typically invest in laterstage companies, they look for those who have $10 million in revenue and are somewhat profitable. S.C. Investments: LURHQ – Myrtle Beach (realized)
Nexus Medical Partners Boston, Mass., and Charleston, S.C.
Investment Focus: Nexus invests in medical technology companies and in life science companies in various stages of development, including medical devices, diagnostics, biotechnology, specialty pharmaceutical and drug discovery tools. They also will consider investments in the US, Europe, the Middle East and Asia, especially in companies seeking either to expand outside their region or to attract companies into their region. S.C. Investments: Sabal Medical – Charleston Selah Technologies/Lab 21 – Greenville Zipit Wireless – Greenville
Atlanta, Ga.
Investment Focus: Noro-Moseley invests primarily in Southeastern-based early and early-growth-stage companies in the following domains: technology, healthcare, and financial or tech-enabled services. On average, they seek to invest $3 – $5 million initially in early-stage companies and up to $10 million in emerging-growth companies. S.C. Investments: None at this time Q1 2011
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Noro-Moseley Partners
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really gets multiplied.” Frontier Capital, based out of Charlotte, has a very different focus from Nexus, but the model used to serve South Carolina is very much alike. Focused on service companies and B-to-B companies in the later stages, Frontier looks to invest from $5 to $25 million in companies with proven profitabiltiy. While this doesn’t help the “seed” stages in their funding needs, it doesn’t mean that it doesn’t make a big impact. In fact, recently announced was the opening of a new facilty for Perceptis, a customer service and call center for higher education. The facility and it’s location—which are expected to invest an additional $1.125 million and create 200 new jobs in the region—could be attributed to Frontier, who invested $6 million in the deal and initiated the discussion on relocation to the company. Azalea Capital, the only firm local to the Upstate, isn’t your standard venture capital firm. In fact, they don’t consider themselves venture capitalists, at all. “We are not venture capitalists,” says Pat Duncan, Managing Partner of the firm. “I guess the world views anyone who invests in small business as venture capitalists, but that’s not how the professionals in this business view it. They view venture as early stage start-up, either with no revenues, or up to $3 to $4 million in revenues. “We do not do that at all. We’re a private equity firm and we are
commit to coming to South Carolina, they build their plant and employ 600 people—how long would that have taken to replace what was going to be lost if this had closed?” So while South Carolina maintains its identity as one of many limited partners in Azalea’s third fund, there is no question as to where the heart of the company lies. Since 2000, Azalea has made 17 transactions over the course of three funds. Out of those, almost half are in South Carolina. The fourth VCIA partner, Noro-Moseley Partners, focuses primarily on start-up companies and early-growth companies needing anywhere between $3 and $10 million. While money from the fund has been put into a few companies (as part of the general fund’s investments), there have been no exits yet to determine a rate of return. And although Noro-Moseley has been “actively calling on companies in S.C. since 2002,” according to General Partner Kathy Harris, they have not yet made an investment in a South Carolina company—yet. With a partner in Charleston to help identify companies along the way, and as sponsor of Innoventure since 2002, Harris says that Noro-Moseley has “looked at dozens of companies in S.C.” since receiving the investment funds, but are primarily looking for companies where the funds can be used to quickly grow, and then sell, the business. “We’ve seen a lot of companies in South Carolina that are earlier stage than we are comfortable with,” Harris says. “Or, we have companies that don’t need as much as we want to invest.” But while the four venture capital partners seem to be progressing along with some already getting returns on investments, there is still a question as to whether or not more could be done for our local businesses.
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“The ramifications of losing 600 more jobs in the Upstate a year ago would have been awful. Those The Ultimate Goal people wouldn’t have found The Legislative Intent that summarizes the VCIA bill states: other jobs comparable.” The General Assembly desires to increase
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a small mid-market buyout shop. We are looking to take a business that is already running, and take controlling interest, and make it run a lot better.” Which is exactly what they did with Sage Automotive, a designer and manufacturer of automotive body cloth that Azalea purchased from Milliken & Co. in September 2009. Although that investment is only about a year old, the investment itself is worth “multiples” of what was originally invested. But money isn’t the only return that is interesting about this investment. Without the buyout, Sage (then known simply as the Automotive Body Cloth Division of Milliken), faced being shut down. “Sage had about 1,000 employees,” Duncan says. “Had we not bought that division, there was no guarantee that they’d have remained in business. And since we bought that company, we’ve added about 150 jobs.” Another investment—Spartan Foods—grew from 75 jobs to 200 over the course of four years. “The ramifications of losing 600 more jobs in the Upstate a year ago would have been awful. Those people wouldn’t have found other jobs comparable,” says Huntley of the SAGE buyout. “Congress does a great job of recruiting companies, but from the time that you start recruiting a company to win you get them to Q1 2011
the availability of equity, near-equity, or seed capital for emerging, expanding, relocating, and restructuring enterprises in the State, so as to help strengthen the state’s economic base, and to support the economic development goals of this State in accordance with the strategy established by the Department of Commerce. The General Assembly also desires to address the long-term capital needs of small-sized and medium-sized firms, to address the needs of micro enterprises, to expand availability of venture capital, and to increase international trade and export finance opportunities for South Carolina based companies.
Venture Capital: capital (as retained corporate earnings or INDIVIDUAL SAVINGS) invested or available for investment in the ownership element of new or fresh enterprise—also called risk capital.
1023 794 $151 million
Number of VC firms in the U.S. in the mid 2000s Number of VC firms in the U.S. in 2009 Size of the average VC fund in 2009
39th
Where S.C. ranks for VC investments in 2010
$4.8 billion < 5%
Total amount of dollars invested in Q3 2010
$93 million 13
VC dollars invested in S.C. in 1996
12.1 million
Number of jobs at U.S. venture-backed companies
The amount of those dollars invested in the Southeast in the same time period ($240 million)
Number of VC deals made in S.C. in 1996
11%
Venture backed jobs as a percentage of private-sector employment
$6.36
How much each dollar of a VC investment (nationally) generated, from 1970-2008
7-10
Years it takes for an average return to be realized
In an article in the Greenville News on February 8, 2007, the goal of the project was made clear to a public audience: The Venture Capital Authority’s board, along with the governor, would allocate the money to private equity firms, which would then “invest it in young, promising South Carolina companies needing capital. If things work out as intended, the investments make money and the fund becomes self-sustaining.” It soon became clear, however, that both of those goals—investing in South Carolina companies and at the same time guaranteeing returns—were somewhat mutually exclusive.
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For a program of this magnitude to fail means many things—less opportunity for other funds to follow; the potential of destroying progress already made in South Carolina’s venture capital community; and, certainly not least, a certain flogging from taxpayers who would be responsible for helping cover that loss.
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While the legislative intent clearly stated that the main goal was to invest in South Carolina companies, for the benefit of statewide economic development, the originally-state-financed package, over time, ended up as a $50 million bank loan under Deutsche Bank. Huntley became the executive director of InvestSC in July 2007, just after the loan was finalized. “I think the Venture Capital Authority quickly realized, ‘Wait a minute, guys. This is not a $50 million investment that is being made by the state of South Carolina.’ We borrowed this $50 million,” he says. “All of a sudden, the financial model has changed. “When you borrow $50 million, you have to pay it back. I think your responsibility has suddenly changed. Yes, we want to make investments in South Carolina companies—that is definitely a huge part of what we are doing. But at the same time, we have to generate returns to pay the money back.” Out of this shift arose some very poignant questions. First, how will this loan be paid? With an average return taking seven to 10 years through VC funding, and annual interest payments beginning almost immediately, how does the cash flow work out? Huntley explains. “We have to make some annual interest payments. There may be the need to use some tax credits in the early stage, just for the interest portion until we have fully funded all of our commitments.” Still, the good news is that returns are already Q1 2011
coming in. “We have already gotten several million back in returns for the funds over the past two years.” But the second question is possibly more paradoxical: what is the true goal of the VCIA? Is it still to invest in South Carolina, or has the entire focus changed to solely getting a good return? It would seem, at this point, that the getting a return is of vital importance. After all, for a program of this magnitude to fail means many things—less opportunity for other funds to follow; the potential of destroying progress already made in South Carolina’s venture capital community; and, certainly not least, a certain flogging from taxpayers who would be responsible for helping cover that loss. “I appreciate the fiscal conservatism of the VCA board in wanting to repay the debt and keep the state out of debt,” says Bill Mahoney, CEO of SCRA (South Carolina Research Authority), which, through SC Launch, has invested in 149 companies in five years. “But in my opinion, there’s about 50 different ways they could have struck the deal with Deutsche Bank, and there definitely should have been requirements about the investments in South Carolina.” The problem, he adds, isn’t in the leadership or the investments themselves—it lies in the balance that was never achieved. “If you weigh economic development too heavily, you’re giving the money away, and not getting a return,” Young adds. “If you weigh the return too heavily, you don’t get any of the economic development benefits you need. So that balance is something that, in my opinion, the VCIA, in its early stages, swung too far over into the return side of things.” Frank Greer agrees. As CEO of Zipit Wireless, who has gone through the gamut of financing since its beginnings, Greer has received funding from SC Launch, numerous angels, and a few venture capital funds. “I don’t want to fault the [VCA board]. I think the intent was very good. The reality is that if the funds that were invested in didn’t want to do it the way they think it should have been done, they should have found another VC,” he says. “To me, that is obviously the goal—to invest in South Carolina companies. Now, if the goal was to just invest and not lose money then everything is off the table and you could go put it CD right now—take the one percent and be happy. But I don’t think that was the intent.” Still, Greer refuses to call any part of the VCIA a failure. “The money is in the hands of good companies. It’s just not in the hands of South Carolina companies that could be using it to fuel growth. Hopefully it is the kind of thing where the state doesn’t look at it as a failure. The state should look at it like ‘Here’s what happened. Here’s the way we improve it the next time we go down this path.’” So, with no requirement to invest in the state, and $50 million on the line, many wonder what the end result of the VCIA will be. And in the end, it all lies in the hands of the four private equity firms that now hold the money. Many have touted Nexus as being “the leading participant” in the program. It is important to note, however, that Nexus’ agreement was structured much differently than the other three. While the agreements with Azalea, Frontier and Noro-Moseley list South Carolina as one of many limited partners in the fund (and the state has no special treatments above any other limited partner within the fund), Nexus created a special fund, that is to specifically be used within the state of South Carolina.
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*graphic provided by the National Association of Seed and Venture Funds (2008)
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“We were very insistent that for [the program] to work for us, we had to have an exclusive focus on South Carolina,” says Snape. “The other funds had limited partners, which is fairly standard, but from our standpoint, we felt it was easier to focus on South Carolina without those restrictions.” For that reason, Nexus put an office in Charleston to help service the investments locally. Of Nexus, Mahoney says they “have, more than any of the four other companies, fulfilled both the letter and the spirit of that program.”
The Future of Funding
assuming that the quality of the companies remains high and the progress remains steady —we represent a pretty attractive place for knowledgeable private equity firms to put their money.”
An Answer to the Capital Gap?
Still, facing entrepreneurs in South Carolina are the same problems facing others across the world — making it through “Death Valley” to a point of growth and profitability. The gap where the need for seed capital lies is one that will not be easily remedied, and more investors want to put larger dollar amounts into their investments—something that many companies don’t need. It may sound odd, for someone to need less money rather than more, but keep in mind that it takes the same amount of time to make a $10 million investment as it does to make one of $3 million. Because the firms spend so much time and energy with those companies, it is vital for many with larger funds to make larger placements. “A two- or three-million dollar investment in a $120 million dollar fund—that doesn’t even move the needle,” explains Huntley. “They are going to spend a certain amount of time with every company they invest in, so they are really more interested in making five- to ten-million dollar investments, not one- or two-million dollar investments.” Therein lies the problem. Nationally, the gap is found in that $500,000 to $3 million range, and it is no different in South Carolina. The VCIA, then, is simply not the answer to that problem. “This is not the vehicle to make those investments in that size,” Huntley adds. “I think if the state wants that then they are going to have to come up with a different vehicle to do it.” Fortunately, another group is doing just that. The Upstate Carolina Angel Network (UCAN), along with the Charlestion Angel Partnership (CHAP) have recently partnered with some state legislators to help fill the gap, from the other side. “In order to fill that critical funding gap between friends and family and venture capital, we need to cultivate a healthy community of angel investors to support these entrepreneurs,” says Matt Dunbar, Managing Director of UCAN. Like many other areas in the world, the advent of “superangels,” or angels who are taking a larger monetary step, has created a bridge that helps companies get over the seed funding gaps. Q1 2011
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So where do we go from here? It would seem that all the pieces are in place—now it’s just a matter of following the plan through. And, of course, of remaining patient. It’s far too early to judge the successes of the VCIA—whether you think the focus should be on the returns or on the state’s economic growth—because neither will happen instantly. “The foundation is there,” Harris says of South Carolina entrepreneurs.“People have been working very hard to get the right foundation in place. Trying to build an entrepreneurial community is not something you do overnight. Look at RTP (the Raleigh/ Durham area, also known as Research Triangle Park). It took 30 years to really evolve into the powerhouse it is now.” McLean agrees, saying there’s no fundamental flaw, and that it’s simply an issue of “maturity.” “Historically, there’s been a dearth of Venture Capital in the state,” Mahoney says. “There wasn’t enough deal flow, and that’s been a historic problem. That sort of desert landscape has changed over the last five years. “ So, to compare the failures (or lesser successes) of years past with the current activity is apples to oranges, considering the growth of the region in recent years. Young agrees. “It’s only in the past five to 10 years have you seen these knowledge-based jobs that South Carolina and the Upstate is becoming well-versed in.” It’s an explanation that counters the only other possibility—that South Carolina simply doesn’t have the quality of companies worth investment. Fortunately, that concept doesn’t hold much with the investing community, either. Young adamantly argues that there are viable companies in the state today. “Are there 500 of them? No. But there are enough to warrant the formation of a VC company,” he says. For those VCs placing large bets on those companies, the opportunities outweigh the capital available in the area. “I think there is huge opportunity in South Carolina,” says Snape, who adds that they sometimes feel “lonely.” “It’s not a lack of opportunity. It’s a lack of capital and others who are doing what we are doing. We’d like to have more people available with capital to help leverage our capital…there are more opportunities than we have capital to do,” he adds. And as more and more investors look at South Carolina and the opportunities it affords, more money will follow. “There is very definitely a ‘lemming’ mentality when it comes to investments. It’s like a magnet, and there is a certain myopia in the industry,” Snape says. “It’s easier to stick to Route 128 and Silicon Valley. But, I think that other firms are beginning to wake up to the fact that they are missing this.” “Down here, it’s a greener market,” Mahoney adds, illustrating the opportunities that lie in newer regions. “We represent,
“Historically, there’s been a dearth of Venture Capital in the state,” Mahoney says. “There wasn’t enough deal flow, and that’s been a historic problem. That sort of desert landscape has changed over the last five years.”
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“I wouldn’t have thought that after we started that we would be going back down the chain to angels and individual investors,” says Greer, whose pattern of funding is unusual, but becoming more common. “I think most people would expect that, with a VC-backed company, your progression forward is through additional VCs, but the VCs that were investing before weren’t investing in this climate.” It is for this very reason that the SC Angel Investment Act of 2011 will be proposed as part of the Republican legislative agenda in the S.C. Statehouse. Drafted by Representative Dwight Loftis and the late Bill Wylie, the legislation is modeled after that of 25 other states, including Georgia and North Carolina, and would help increase angel investing activity in qualified, high-growth start-up companies in South Carolina by offering a 35 percent tax credit to investors, taken over two years.
“We represent—assuming that the quality of the companies remains high and the progress remains steady—a pretty attractive place for knowledgeable private equity firms to put their money.”
While South Carolina will never be the next Silicon Valley or Route 128, there is a lot to be said for the focus now being put on entrepreneurial funding. From angels to VCs and everything in between, it would seem that the state is finally putting an emphasis on growth—hopefully something that will continue to find support as it progresses.
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*graphic provided by John Warner | Swamp Fox
“We know that startups create jobs, and we know that access to capital is the key limiting factor for most startups in this economy, so using an angel incentive to bring more private investors into the marketplace should be very beneficial for both the near and long-term health of South Carolina’s economy,” Dunbar says. “The more startups we can fund through the “valley of death” to successful growth, the more jobs we can create, the more venture capital we can attract, and ultimately, the more revenue we can generate for the state.” Representative Dan Hamilton, who co-sponsors the bill, is searching support for the bill. “Access to capital is the lifeblood of a growing business and the Angel Investment Act provides an incentive for investors to get capital off the sidelines and into the economy by providing the needed resources for entrepreneurs to grow businesses and provide jobs to South Carolinians,” Hamilton says. “It will help our state be more competitive with our neighboring states in attracting and retaining high growth small businesses.This is a very focused strategy for growing the types of businesses we need in South Carolina.”
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CEOs & LEA b o x CEOs & LEADERS Black
different can be deadly
Geoff Wasserman, CEO and president of Showcase Marketing and Publisher of Business Black Box, spends most of his business time advising and consulting with business and ministry leaders developing growth strategies. Before starting Showcase Marketing in 1999, Geoff spent seven years in sports marketing with the Montreal Expos and the Atlanta Braves, and seven years as managing director in the financial service industry with two Fortune 500 Companies. Every brand needs to identify and communicate its point of differentiation and its value proposition—however, many times the pursuit of “different” bleeds over into decisions about what services to offer, how to offer them, and what sacred cows to sustain. Consumers will tell you what they want and how they want it packaged, shipped and serviced. Too many organizations take the wrong stand on the wrong issue and the result is inevitable: the consumer wins, the competition wins, and you lose, even if your flag is the last thing everyone sees going under as the boat sinks.
Go where the marlins are.
At a conference for financial advisors 15 years ago, a million-dollar round table top performer explained to me his method for always attracting high net-worth clients. Paraphrased he said,“I only go marlin fishing where marlins swim.Why fish for marlins in minnow ponds?”
Learn MY traffic pattern.
On a vacation visiting family in Toronto, I was on my way to the mall with my mom when she said, “Oh hang on, let me grab my old license plate.” What an odd statement—until she explained that they had kiosks there at the mall (where people went as a destination) where old plates could be turned in and property taxes paid, all in a kiosk the city’s DMV had set up. She laughed when I explained to her about my city’s process: “Where I live, they still make us go to them.” Her reply: “Really? You’re the customer. Isn’t your government supposed to serve you?”
by geoff wasserman
So the product, designed in essence to “cut the time a woman spends in the kitchen,” failed miserably because it was perceived by society at that time to erode the very same woman’s self-worth. Pushing the product on a customer base that wasn’t ready to change mindsets yet, or habit patterns, failed. They re-released it a few years later after the woman’s movement, and it was accepted. Interestingly, they also found that minor changes—like removing powdered eggs from the mix—allowed the preparer to participate more on a creative level than just adding water or milk, and so a great compromise was struck, and the brand was pulled through distribution channels by the same customers who had once rejected it.
Change or play catch-up forever.
The government focused too much on the post office, and they missed out on the postal revolution. They kept insisting we go to their building. Private enterprise stepped in, heard the customer, and set up shops—Mail Boxes etc., Fed Ex, etc., and now the post office is playing defense and catch-up in a business plan that’s failing. My point is this: Find your point of differentiation, your competitive edge, and drive it home in your marketing messages and in everything you do. But don’t get passionate about “different”, stay passionate about delivering your product to the consumer in a way they need it, want it, and receive it. Challenge your organization’s internal struggle to want to keep things the way you’re comfortable doing them to the point you become irrelevant to the very people you were once passionate about reaching. After all, he who honors sacred cows goes hungry at night.
Find the pull, stop pushing.
ck a b d Fee advise and
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In the 1950s, when brands like Duncan Hines, Pillsbury and Betty Crocker tried to introduce easy-bake cake mix products, the initial product launches failed. To summarize: there were challenges pushing the product through the distribution channels. Early mixes weren’t reliable and produced inconsistent results. Even more significant is that launching the product post-World War II initally backfired because home cooks felt compelled to return to the way things were, “Like mom used to make.” What made it even tougher was public perception of both the target consumer and what the product boasted (a shorter cooking time). Home cooks, primarily women living in a pre-woman’s movement era, had a difficult time reconciling modern convenience with traditional expectations. After all, at that time, part of a woman’s self-worth was judged by whether she “spent all day slaving over a hot stove,” so feeding families out of a box diminished the perceived value of the housewife and of the product experience.
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Photo by Wayne Culpepper/FishEye Studios Q1 2011
I
n 2006, Michelin employee John Tully was approached by his superiors regarding a unique opportunity within the company. In light of recent events, two of the North American Michelin plants were scheduled to close, and so, the company had decided to open a Michelin Development program in each of the communities to offset the job loss impact from each closure—much like similar programs already put in place by 1990 Michelin begins offering a formal program to provide economic Michelin’s European divisions. development assistance in France. The following months for Tully included relocating to Canada for a time, as well as intense research and planning for the two programs, which as of late 2009 are both 2001 Michelin Development launches in place. What makes this story more pertinent to the Upstate, though, is the start of across Europe to stimulate economic the third Michelin Development program here. growth in targeted communities. The difference with the Upstate program resides in the fact that there were no plant closures here to spur the program’s start. “We consider the programs in Canada and East Alabama to be reactive programs, because they’re both a result of having 2006 Michelin Development arrives in to make very difficult business decisions,” Tully, director of Michelin Development, the Waterloo region of Ontario explains. “The program in Upstate South Carolina is proactive in that this program where more than 850 potential jobs is not a result of anything we’ve had to business-wise. It’s something we feel strongly are created and nearly $3 million in about—something we want to do for the community.” loans are extended through the life Designed as a tool for job creation and economic growth, each Michelin Develof the program. opment program has two facets. “Obviously, low interest loans are probably the most significant part of the program, because that gives financing to start-up companies as 2009 Michelin Development Upstate well as small- and medium-sized companies,” Tully explains. “The business expertise opens its doors to provide loans part of the program is meant to help companies grow.” to socially and economically The program, even in how it’s set up, is truly built to benefit the local community. disadvantaged businesses in a “Michelin and our banking partner do not make the decisions on whom to fund,” 10-county region of South Carolina. Tully says. “We have put together a steering committee made up of community leaders, business leaders, and entrepreneurs throughout upstate South Carolina. They meet monthly, review the applications and make the decisions on who we’re going 2010 Michelin doubles its investment to to lend money to.” the Upstate of South Carolina; first While making these decisions on start-ups, the committee analyzes the business set of Michelin Development loans expertise of each applicant, as well as logic in what they’re trying to do. They work are extended in East Alabama. to ensure that recipients understand what it takes to start a business and whether or not they have the expertise to make that happen. The program is also available to small- and medium-sized companies in need of additional funding. “For a business that’s trying to grow, they want to make sure that they have the management expertise to actually grow the business to where they’re trying to get to or that they have a plan in place of how they’re going to do it—hire a CEO or CFO to do it,” Tully says. The program, which started with a $1 million infusion, has just recently been Profile by Andrew Brandenburg given an additional $1 million to continue. The loans, which range from $10,000 to $100,000, are available to businesses in Abbeville, Anderson, Cherokee, Greenville, Greenwood , Laurens, Oconee, Pickens, Spartanburg and Union counties, and loans will have up to five-year payment terms. By investing in these small- and medium-sized businesses in the Upstate, and helping them not only survive, but thrive, it is clear that Michelin—and John Tully—are important forces in South Carolina.
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The facts: Business Black Box
$1.47 million 25 356 600
Total amount of capital invested into local businesses (to date) Number of small businesses who have received loans at this point Number of applications submitted since beginning of the program Number of jobs created through the Michelin program (estimated)
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SMALL BIZ Black
b ox
SMALLBIZ
three people every start-up should know (but probably doesn’t) by tony snipes
Tony Snipes is past director of Redemption Marketplace Alliance, a Greenville-based entrepreneurship training program, where he utilizes a unique combination of years of leadership experience in the corporate arena with ministry experience in the community. Tony has spent over a decade as an Internet publishing and advertising expert, helping clients for news media companies such as the Greenville News, The St. Petersburg Times, and News Channel 7 WSPA. Almost every business has access to the following three important people as a part of their business life. But the difference between the successful business owner and one struggling for success could lay with how they leverage the relationship with these people:
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1. Do You Know Your REAL Customers? I cringe when I ask a business owner to tell me who their target audience is and they respond with “everybody.” Wrong answer! You want to clearly identify the people that are most likely to buy from you, then build all your strategies on reaching those people.Yes, you may have sold occasionally to a 23-year-old woman, but seven of the last 10 of your customers last week were women between 35 and 55-years-old.
2. Do You Know Your INDIRECT Competition? One of the first steps of effectively managing your business success is identifying your direct competitors. But it does not stop there. You must also identify your indirect competition. These are places other than your direct competitors where your potential customers are spending their money or time instead of with you. A restaurant’s direct competitor is obviously another restaurant, but the option of a customer staying in and eating at home is indirect competition. A fitness center’s direct competition is another local fitness center in town, while their indirect competition could be a popular online weight loss program or even a health food store.
3. Have You Identified an INDUSTRY Mentor? Choose a business or business owner that is where you want to be when you “grow up.” This is a person that has the same or similar type of business you have and is at a level of success where you are striving to grow to. This is really great if you’ve identified someone outside of your own state or area but in a similar-sized market. This gives the mentoring business owner the comfort of advising a noncompetitor while still sharing insight and advice that is relevant to your business needs.
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It may seem overly simplified, but knowing these three types of people is the difference between working on your business rather than working in it.
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branching from the fact that it hosts the highest investment of internationals per capita in the nation. In addition to other economic and social factors drawing such a significant diversity to the population are a few iconic ones nearly anyone associated with business—Upstate or otherwise— can identify at a split second’s notice. With Michelin’s North American headquarters located in Greenville, there is a large draw for French citizens. Similarly, BMW’s headquarters in Spartanburg, as well as its suppliers, account for a large draw of the local German population.
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“When I joined Mermet in 2005, one of the owners informed me that the family had sold the business,” Duquay explains. “Let me take time to re-access my decision, and once I did a little research, we decided to make the move.” So Duquay and his family moved from Winnipeg to Upstate South Carolina—anticipating, in addition to this new job, the warmer climate, he notes. Since the move in 2005, Duquay has retained the role of general manager with Mermet. “I have complete responsibility for everything that Mermet does here in South Carolina,” he says. “Our key market is in the U.S., but we sell a significant amount of our products in Canada, Mexico, Latin America, Brazil, Australia and in Europe, as well.” The company has enjoyed a growth of 30 to 35 percent over the past five years. “We’ve worked hard to size ourselves appropriate over the past five years and it has helped us continue to grow,” he says. Needless to say, the Upstate’s—and all of South Carolina’s—Canadian investment, both on a holistic, as well as a personal level is a significant part of the local economy. And while they’ve synthesized into the community, they do retain their own personal culture and outlooks. “The international culture here affects this community in a good way,” Williams says. “It will push us to be a little more out of the box, globally and not have an at-odds relationship with international communities, by introducing them to the idea of differences, not just morally or socially, but also economically. I think it’s an opportunity for us to discover how to best leverage all of these opportunities.” And while each transplant is careful to stress the point that Canada is an amazing place to live with its own unique pros and cons, the Upstate has been an experience worth having as well. “One of the reasons we really fell in love with Greenville is everyone is friendly and kind,” Petrie says. “People here really count on a handshake as your word, and coming from smaller-town Canada, that’s the way Canadians are.” Yet, almost in contrast to the Upstate’s sometimes small-town feel, it also boasts its more diverse qualities as well. “It’s this very cosmopolitan place, and it has a very real sense of community,” she continues. “I think there is going to be an influx of Canadians,” she muses. “We love to tell each other about what we love, and so we share our love of Greenville.” Williams concludes, “There are a lot of shared commonalities people can discover if they can get over what’s different.” And that’s where the strength in the Upstate’s international community lies. Q1 2011
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joint ventures: Co-Development Agreements, Channel Partners and Other Forms of Entanglement by andy coburn As an attorney with Wyche, Burgess, Freeman & Parham, Andy Coburn regularly represents clients in mergers and acquisitions, corporate reorganizations, structuring of joint ventures, securities offerings and other financing transactions. Andy also advises and assists public and private company clients in the design and implementation of executive compensation arrangements, equity compensation plans and broad-based employee benefits.
service into a new industry market. The party with the product or service needs to ensure that its partner cannot make commitments to customers regarding pricing, product specifications, etc. that will bind the product or service provider without its consent.
What type of investment is required? As with any business undertaking, you need to consider what type of investment in time, money or personnel will be required to make the arrangement work. The greater the investment required, the more important the other issues become. If you enter into a channel partner arrangement for a new but small market that you want to enter and you will just be Your company is on the path to greatness, but how can you get providing your standard products to a new set of customers, you there sooner, rather than later? Organic growth will take too long. don’t have much at risk if the arrangement does not work out. If you Raising money to accelerate growth is hard and costly in terms of enter into a technology co-development arrangement and failure diluted ownership and loss of control.You don’t have the money to could mean loss of millions of dollars, several years of work by key personnel and disputes over ownership of some key technology, you grow by acquisition. Eureka! You decide to partner with another business that already had better do your homework before the arrangement gets started. has the technology, manufacturing expertise, customer base or How do we break up? You always have to consider the whatever it is that you lack to make your business the next giant of possibility of failure and the consequences. Because joint ventures industry. tend to involve more significant entanglements between business The generic term for this is a joint venture. The concept can partners, it is important for the parties to agree in advance on how apply to an almost infinite variety of arrangements—from informal to dissolve the relationship if it does not work out.You will not be business relationships to complex legal structures where the business able to foresee and address every possible failure situation, but prior partners form a separate company with hundreds of pages of agreement on at least some key terms increases the likelihood that documents governing everything from operations and technology the parties can disengage amicably and quickly if necessary. development to financing and dispute resolution. While the details Make sure that two-plus-two really equals 10 and that you will be different for each deal, certain key considerations always have a good business partner. Lawyers can draft voluminous need to be addressed: documents for joint ventures covering every conceivable issue in Control and Authority. Control can be an important issue excruciating detail, but the success of a joint venture is usually between the business partners. In a co-development arrangement to determined by (a) whether the proposed business arrangement create new technology applications, for example, how will decisions really is win-win for both parties and (b) whether you have a good be made about which applications to pursue? Control can also business partner to work with. If the business deal primarily benefits be important with respect to third parties. In a “channel partner” one side, it will probably fail sooner or later. If your business partner arrangement, for instance, one party has the product or service and is unscrupulous, unfair, unreasonable, etc., then you are likely to the other has the customer contacts to introduce the product or have a bad experience regardless of how good the legal documents are or how good the business deal should be for both parties.
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ack d b d e Fe orm, advise anvisit Q1 2011
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quiet beauty and graceful hospitality highlands, north carolina
800.946.6822 | 828.526.8170 | stay@halfmilefarm.com www.halfmilefarm.com
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1. What was your first job? In regards to city government,I worked on a committee for several years that was responsible for divvying up the 7. What vision do you promote for your employees, and money that the city received annually for tourism-related events. That how do you get your employees to buy into or tap into was really my first thing I did with the city in regards to municipalities. that vision? We have about 450 full-time employees, and through my management and division heads, we try to communicate to everybody 2. How did you get involved in your line of work? My main about how they each contribute to the team—from the guy on the focus on getting involved in non-profit work was the opportunity to get street everyday working with public work and sanitation to the folks in involved in the community—one of the first things they teach you in accounting. Everybody has a role in making our city a better city, and I small business is getting involved. I served on several different non-profit think communication is the key to letting everyone in an organization boards and was also chairman at the Chamber of Commerce and the know that they have a role in making the city the best it can be. YMCA. I had never been in government until I had ran for mayor, but my work in non-profits helped prepare me to be the mayor of Anderson. 8. If you retired tomorrow and could change to any field except the one you are in now, what would you 3. What are some of the skills you pick? I’d want to teach history and coach basketball. I grew up developed early that you’ve found to be with teachers and the coach, and I played college basketball. History beneficial or essential to your practices does tend to repeat itself, and we learn from history and we need now? I grew up with the high school coach here to teach the students about their history—local and national. in Anderson, so from early on it was all about teambuilding and understanding that it’s not about the 9. What was your biggest failure as a professional? individual, but making the team better. I saw early on During a council member greeting while we were through athletics and sports that winning teams in executive session, we had a situation where we have a lot in common: strong leadership thought we were in a private setting but that and support from other team members. conversation was being publicly broadcasted. It was a situation where I did not 4. How do you strike a balance say some of the things that were between your personal and damaging in that conversation, so professional lives? I do try to take I distanced myself from it, which time to do the so-called “sharpening of leads into the next question. the saw.” I take time to exercise regularly and be with my family. I try to eat right 10. How do you avoid and get enough sleep every night to keep similar ones today? I’ve up with the professional part of my life, but found out that—especially over the years I’ve also made sure to attend being mayor—by the nature of my kids’ events and try to support them. my position, I get too much credit for the good and too much credit for 5. What are some strategies you the bad things. I eventually apologized use to keep yourself in check? for the actions that were taken by the I don’t sweat the small stuff. I’m a glass half council. We go to great lengths now to full type of guy, and I try not to worry only have executive sessions as they about the small and negative things apply to the laws that govern that. I think that tend to creep into people’s minds. transparency in government is important, and things need to be discussed in public. 6. If you could choose one piece of knowledge you know now that you 11. What’s your vision for wish you had known early on in Anderson as mayor of the city? your career, what would that be? One of the things that I think is important Probably that local governments have for us is to have an identity that sets us very little control over different regulatory apart from our neighboring cities, and to things—we have to deal with unfunded make coming to this city, as the center of mandates, which can be frustrating. Early our county, a place where individuals and on I didn’t realize that we don’t have a families can come for retail and restaurants lot of control over the things we have to and events. My vision is for the city to create do through state and federal regulations. its own identity that makes us unique within the Upstate landscape.
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Photo by Wayne Culpepper/FishEye Studios
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by ravi sastry
Ravi Sastry is president of International Innovations, a consulting firm specializing in American and Asian business and commerce. He has held senior management positions in international sales, marketing, logistics, and operations. During his 25year career, he has lived and worked in 14 countries on three continents, forging strategic relationships with industry leaders like Bosch, IBM, McKinsey, Samsung and others.
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It is difficult to hide from the news these days regarding the threats posed by Asia’s growing economies, specifically China, India and Vietnam (the CIV factor). The reactions of many Americans lie in a range of emotions from fear to panic, or even down right loathing. Regardless of where you are on this spectrum, it will not change the course of economic development. The market value of the top 25 global companies —as seen from 1998 to 2007—went from $4.3 trillion to $5.9 trillion. The U.S. based companies reduced from 21 to 10. The non-U.S. based companies increased from four to 15. At the same time, U.S. based companies decreased in value from $3.6 trillion to $2.4 trillion, where the non-U.S. based companies increased from $0.63 trillion to $3.5 trillion. In addition, revenue generated by the U.S. based companies outside of North America has increased by over 40 percent within that time span. What does all this mean? Economic shifts happen. The number one and two economic powers in the 1600s were China and India, respectively. By the 1800s that shift moved to Great Britain. Since the “Industrial Revolution,” the economic powers moved to America. The difference now is the advancement of technology, the increase in the middle class, and the speed at which people can travel that has allowed the world and the way we behave to be more “global.” The statistics from Business Weekly on the list of the most competitive countries shows the US in the number one position. Although the U.S. has enjoyed this position for the past 14 years, the “little brothers” in Asia and Europe are growing up. In fact, Singapore is in second place with a differential of 0.7 points. It is not an issue of America losing jobs, manufacturing capabilities, sales/marketing channels or innovation—rather, it is an issue of American companies learning to stay competitive on the global rather than domestic scale. As we all know, many of the MNCs (Multi-National Companies) have gone to Asia in the past 20 years to stay competitive, gain access to key markets, and form strategic alliances with Asian companies.As the MNCs invest in Asia manufacturing, supply chain management, and sales/market access, so too have many of their suppliers. One of the most recognized metrics used to measure movement of companies to other countries is FDI (Foreign Direct Investments) or how much money are companies investing in other countries to take advantage of their labor and/or markets. The global flow of FDI in 2006 was $1.2 trillion. FDI flows to Asia maintained their upward trend, reaching a new high of $230 billion, up 15 percent Q1 2011
from 2005. Thus, the share of this region in total FDI to developing countries rose from 59 percent to 63 percent. China and Hong Kong (China) remain the leading destinations, followed closely by Singapore with $32 billion of inflows. The following table shows the outflows and inflows of FDI over a 10-year period from 1996 to 2006. Clearly, America is the place to invest and America is a country that is investing outside its own borders.
Outflows
Region
Korea India China Japan Vietnam United States
1996 4,670 239 2,114 23,419 N/A 91,885
2006 7,129 11,005 17,634 50,244 N/A 248,856
Inflows Growth Rate 153% 4605% 834% 215% 271%
1996 2,426 2,325 41,726 228 2,200 86,502
2006 36,456 19,442 69,468 -6,503 6,500 183,571
Growth Rate 1503% 836% 166% -2852% 295% 212%
Source: OECD/UNDP
As you review this data and think about how your customers have invested in the Asian market, you must ask yourself the following questions. How successful have the FDI companies been in transitioning the sales revenue from the U.S. to Asia? • What strategy did they implement to seamlessly keep the revenue as it moved? • What have they done to increase their market share and account base within the Asian countries? • What have they done to gain new business from Asian based companies as they invest in America? • What sales and marketing channels have they developed to take care of the clients, direct employees, representative agents, and strategic alliances with similar companies? A specific way in addressing these questions is to segment your business with respect to suppliers and customers. From there a strategy needs to be developed that answers the following to support current clients, expand the account base in both Asia and back home. The energy required to gain new customers is exponentially greater than trying to keep the ones you have, regardless of where they move.You should run to where your money has gone.
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One door closed sometimes leads to another door being opened. For restaurateur Carl Sobocinski, closing the doors of Restaurant O almost two years ago led to the opportunity to open a new restaurant in that same space.
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Hurdling towards disaster OR conquering the mighty competition.
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the PERSON
the PLAN
Carl Sobocinski owns Table 301, the restaurant group that houses local restaurants Soby’s, Soby’s on the Side, Devereaux’s and The Lazy Goat. He originally moved to South Carolina in 1986 from New Hampshire to attend Clemson University, but after receiving a degree in design, Carl decided to become an entrepreneur in the local restaurant community. Alongside his work with Table 301, Carl also gets involved in the local community, serving on the boards of the Convention and Visitors Bureau, Greenville Events, the South Carolina Restaurant Association and the “Monday After the Masters” Golf Tournament. He is also theVP of Governmental Affairs of the S.C. Restaurant Association, was Chairman of the 2005 March of Dimes Signature Chef ’s Auction and the Red Cross Fine Wine Auction, and was elected to serve on the board of the National Restaurant Association.
Carl and his team at Table 301 plan to transform the old space, which used to house Restaurant O into a new, completely rebranded venue: a gastro pub. Plans on the shortlist for this endeavor include renovating the space, branding the new restaurant and developing new beverage and food menus for this new. Preparations have already begun. Carl has contracted with Alice Finkelstein of Fink Studios to begin working to develop the aesthetics of this new restaurant, After discussing Carl’s vision for the space, Alice develops and revises her budget. In less than three weeks the budget is approved and Alice begins working. For Carl, though, this is just the beginning.
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the PURPOSE Carl’s purpose with this new venture is to offer something completely new and different.With the space previously housing Restaurant O sitting vacant, the opportunity for a new venture seems relatively intuitive. Additionally, the idea of a gastro pub will offer to the Table 301 lineup, as well as Greenville’s restaurant offering, an interesting and new option, offering a higher quality perspective on a community favorite: beer and bar food. The change doesn’t come without some nostalgia, though. While the idea of a completely new venture is exciting, the prospect of dismantling what used to be Restaurant O brings finality to the closing of one venture in order to enter the next. “Had it not been nearly two years, I’m sure the feelings would have been different, but after 20 months—it’s time for something new,” Carl says.
Day 1: Alice presents her plans to Carl for the restaurant design and receives approval! “I had 100 percent confidence that Alice knew what I was thinking and what I liked,” Carl says. “I was right. The plan was a warm and welcoming one, and I knew it was just what the space should be.”
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Day 8: Over the next five days, develop of a business plan for potential investors begins. Development of gastro pub concept is further refined and first menu concepts are fleshed out by Rodney Freidank, Corporate Chef of Table 301, and Justin Garner, Table 301 Director of Operations.
a lot remaining to do, but we can see the finish line.
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Day 2: Beginning today, Alice spends the next month making material selections, subcontractor connections, space planning/CAD work and meets on-site with sub contractors.
Day 10: This month, Alice spends time making material Selections, vendor bids, developing the project timeline, as well as the program and punch list.
Day 21: Richard Peck of Table 301 attends “an extraordinarily crowded beer and wine exposition” at a local event facility. “I was happy for the
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Day 13: Planning continues, based on gastro pub concept of the new restaurant – “gastro,” denoting a higher order of food and wine, and “pub” suggesting that a representative range of beers will be available, including beer on tap—a first for Table 301. “The concerns for beer on tap have always been lack of space for a keg cooler,” Carl explains. “We were able to overcome this obstacle and ended up with six beers on tap—perfect for this concept.”
Photo by Wayne Culpepper/FishEye Studios Q1 2011
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distributor, but the venue was too time-inefficient and too crowded to be much help planning the new restaurant,” he explains. “The job of a sommelier or ‘Wine & Beverage Director’ sounds so pleasant in theory,” Richard continues. “But today was a scrum with the alcohol being the ball and too many players on the field.”
Day 43:Today Richard attends a Peruvian wine tasting. “They’re like the Belgian beers, except this is a bit further out,” he says. “How far does “gastro” allow us to push the “pub” concept?”
Day 46: Over the next week,Table 301 volunteers (staff members from other restaurants, friends, and family) help clean up bars and remove miscellaneous garbage in preparation for painting and sub-contractor repairs. Several trips to the dump are required to make room for construction.
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Day 28: Richard spends part of his day tasting Belgian beers. “Some lovely stuff!” he says.
Day 29: Rodney meets with Ballentine Equipment in Greenville to plan out the kitchen for the revamped menu for the new concept. The change in concept will not require a major renovation to the kitchen but will require the addition and subtraction of key cooking equipment and reevaluation of the ‘flow’ in order to provide efficient service of the new menu: a 48-inch-wide flat top griddle and a couple of fryers, one of which we intend to fill with duck fat for a hand cut French fry dish, are added, as well as a double stack of Vulcan Convection ovens. “The cuisine of the restaurant is quite casual but intentionally eclectic as well, so equipment that will allow great versatility is required,” Rodney says. On the design front, Alice finalizes chair and table selections with the design team.
Day 31: Joey Pearson is named Chef de Cuisine of the restaurant and will work with Rodney on the menu and culinary aspects of the project.
Day 32: During the next two and a half weeks, the vinyl floor covering from Restaurant O is removed, revealing the original terrazzo marble floors.
Day 51: Rodney and Justin deep clean prep kitchen. Justin working on the beer list. His enthusiasm for and knowledge of beer is a wonderful asset for the Table 301 team working on the restaurant. “His initial version of a beer list is really wellconceived: balanced, logical, and most of all, rewarding and pleasurable for our guests,” Richard says.
Day 53: Richard conducts a consumer wine tasting for 25 people in Tennessee: “Something I do as often as possible to hear directly from wine enthusiasts, as well as those who are just becoming interested in wine,” he explains.
Day 54: Richard Peck and Justin Garner work to develop a wine and beer lists that will allow the restaurant to offer unique, handcrafted, value-driven selections that compliment the concept’s cuisine.
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Day 35: Alice attends a meeting in New York City with wall covering designers to explore options for the new restaurant.
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Day 41: Today starts the next phase of material selections, painting, project coordination and the like, which all continue through the opening of the restaurant. The Table 301 team meets with Brains on Fire to spitball ideas and concepts for the name and branding of the new restaurant.
Day 55: Over the next few days, the stainless steel fronts on both bars are covered in a white subway tile, further softening the contemporary feel of the former O space. Also, Justin and Rodney work with Ballentine to pick China and glassware.
Day 57: Richard meets with a colleague from Charleston who runs the “Wine & Beverage” program for a major group of Q1 2011
101 DAYS restaurants to talk. “The collegial nature of the hospitality industry is one of its pleasures,” he says.
Day 60: Carl books the Shawn James Band for the New Years Eve launch.
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but so is our ‘preview party’ for the restaurant’s opening: December 31, 2010,” Richard says. The Brains on Fire team tours the restaurant space and is briefed on design concepts by Alice Finkelstein, helping to coordinate marketing and branding more closely with the look and feel of the space. Chefs Rodney and Joey get together to work on a second draft of the menu.
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“It was awesome to see the old equipment cranked up again,” Rodney says. “The kitchen is designed to be very fun to work in and as easy as possible to keep clean and organized. I didn’t realize how much I missed working in that kitchen until we fired up that broiler.”
Day 63: At the restaurant space, the HVAC system is reworked, including changes to the return air system to improve customer comfort. Richard spends today meeting with one of their most important potential suppliers for the beverage program. “Industry partners play an important part in any new restaurant launch,” he explains.
Day 71: Every inch of wall space is painted by teams of Table 301 volunteers, transforming the space from a clean, modern space to a warm, hip pub-like environment.
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The sight nearly brings tears to my eyes,” Carl says. “I’ve always loved that space and the contemporary design was my desire, but I now realize the new look is exactly what the space always wanted to be.
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Day 62: Kitchen equip is fired up for the first time in 23 months—Restaurant O’s famous infrared broiler, which cooks steaks at over 1600 degrees, roars back to life. Seeing everything fired back up gave this whole process a feeling of reality, Carl says. “It was like seeing light at the end of the tunnel,” he continues. “We have a lot remaining to do, but we can see the finish line.”
Day 64: Carl, Rodney, Justin, Alice, Richard and Gina meet with Brains on Fire to review the restaurant concept with them, engaging them to develop name recommendation, a logo, teaser campaign, tagline, and other marketing collaterals.
Day 72: Two story chalkboards are installed—a pub staple.
Day 69:The team hosts a “test event” of sorts, for the Greenville wine community, a tasting of 90 wines, 55 of which were very aggressively priced to be great values. More than 100 people attend, purchasing 56 cases of wine. “We’ll be offering similar values in the new restaurant beginning in January 2011,” Richard confirms.
Day 73: Over the next few days, new upholstery installed— Restaurant O’s blacks and grays are replaced with browns, reds, and greens in plaids and tweeds. Electricians run cabling for new AV equipment, including 9 TVs, new audio speakers for live music, and changes to the Point of Sale system. Alice completes signature hounds tooth wall in upstairs bar/lounge area.
Day 70: The pace is accelerated as the open date looms. Final RFPs are sent to key wine suppliers, asking for their recommendations by Monday, Dec. 6. “That deadline is tight,
Day 76:Telephone and Internet connections are made. On the beverage front, responses from our wine suppliers was superb, with the exception of one company that did not make the 87
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deadline, Richard says. “Now it’s a matter of sifting through the proposals to create a wine list that offers the ‘best of the best’ in terms of value and taste, for the restaurant’s opening.” Brains on Fire makes its “Identity” presentation. “Great stuff!” Carl says. “We love it and are moving forward
with their name recommendation – NOSE DIVE.” One of the recommendations is to carry the name even further and to develop a “loyalty group” with the suggested name “The Sniffer Society”. The group loved it and, as there were already plans for a monthly retail wine club at the restaurant , this name was a perfect fit. Brains on Fire continues working on revisions to logo, while the Table 301 team takes time to discuss and decide on a tagline.
beef, potatoes, and house-made buns in order to select the highest quality of ingredients. A follow-up meeting with one of the key suppliers of beer, wine, and spirits is held. Negotiations continue with top choice among California wineries competing for The Sniffer Society’s first offering. “We’re getting down to the wire now,” Richard says. “The final product lists will be completed this week.”
Day 85:Volunteers construct half walls at the hostess stand and other millwork, putting the final touches on the construction phase. Final work on the beer and wine list is completed, and ideas about the spirits list to a supplier who is making available a professional “mixologist” to review the team’s ideas and contribute her own.
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Day 77: In the morning, the launch team has their weekly meeting where they report to each other on the progress in their respective areas. “It’s nice to be able to give a positive report on the progress of the beverage program,” Richard says.
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Day 78: The VP of Sales for a well-known Napa Valley and a key local wine rep visit Nose Dive to show wines as potential candidates for The Sniffer Society’s first selection!
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Day 79: Photography for the restaurant’s teaser posters is taken with the Brains on Fire team.
Day 83: The culinary team experiments with various
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“We’re planning a public session with her, for the guests of our restaurant, in February,” Richard says. “She makes fabulous drinks and is a real ‘personality.’”
Day 86: Local artist Sheldon Lynn paints murals on chalkboards, kitchen equipment is delivered and installed and teaser posters are completed and posted on front windows of restaurant today.
Day 88: Today draft beer towers are installed at both upstairs and downstairs bars, a first for a Table 301. Rodney and Justin begin hiring staff for both the service and culinary teams. Over the next week, a media plan is developed for pre- and postlaunch marketing activities. In addition, t-shirts, and other materials for the launch activities are ordered. At the restaurant, the new POS system is installed, tables and chairs are delivered, including a custom-made 12-person bar table designed for communal dining and drinking.Today and tomorrow, the stage for live music is constructed, and final cleaning
and touch-ups take place, wrapping up most of the work at the restaurant’s location. It’s an exciting moment for Carl and everyone else involved. “The most memorable moment of my life was the birth of my daughters,” he says. “This feeling is very similar, it’s the birth of a new business, and a new opportunity.”
Day 91: Club prices set (and announced) for The Sniffer Society’s first offering: $39.95 for three bottles that retail for $71 normally. How’s that for value?
Day 98: Over the next week and a half, menu items are tasted and tweaked, and recipes are developed—those that don’t make the cut are eliminated.
Day 99: Today and tomorrow, beer and wine is delivered in preparation for New Year’s Eve event.
Day 101: The preview party for New Year’s Eve is held. Guests are allowed their first look at new space for guests and the name of the new restaurant is announced: Nose Dive. Some guests love it; some want to know why it was chosen. It’s definitely a conversation starter and will give ample opportunity for discussion.
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During the next following days, Staff participates in intensive food, wine, beer, and spirits training to ensure they are knowledgeable about all the products in-house. Carl presents an orientation to introduce the new team to the intense customer service culture of Table 301. Pre-launch marketing activities begin—teaser ads, social media postings, website complete—PR activities take place, and media kitchen tours are help, all in anticipation of the February 7, 2011 open date.
Do you have a business you’d like us to follow for 101 Days? Mergers, start-ups, new events and big changes always make for a great story, and we want to hear yours. Email us at editor@insideblackbox.com and give us a look into what you and your company is about to do. We’d love to spend the next 101 Days with you.
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Right now, I’m on Cloud Nine,” Carl says. “The space has people in it, life has been breathed into this great location, and everyone—and I mean everyone—is smiling and enjoying themselves. It feels like we have weathered the storm and come out on the other side.
Do you have a business venture that you would like us to track? Drop us a note and let us know more: www.insideblackbox.com
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The Pitch:
Pedal Chic is the only women-specific cycling and athletic boutique in the Southeast, offering an unparalleled selection of apparel for the female athlete, cyclist, urban commuter, and yogi, as well as lifestyle/ comfort wear in an upscale, boutique environment.The shop, which is both a brick and mortar store and an ecommerce retailer, is ramping up to afull-service bicycle/athletic boutique. Pedal Chic is THE destination for active women shopping for contemporary, stylish, and high-performance cycling, fitness, and lifestyleapparel. From “city bikes” and commuter accessories (think bike baskets, designer helmets, shoes, and cycling-friendly handbags) to athletic intimate apparel which accommodates all sizes, Pedal Chic outfits every woman from head to toe (XS - 4X). We carry a wide selection of designer lines. Among them are Skirt Sports, the original running skirt created by Nicole Deboom (an accomplished triathlete), along with their full line of cycling and runningapparel and accessories; Luna Sport Wear, performance cycling wear exclusively for women; Sheila Moon, fashionable cycling and urban/ commuter apparel and accessories; Ibex, beautiful merino wool clothing for casual/commuter wear; as well as various high-performance cycling gear and apparel by Primal Wear, Hincapie, Castelli and Zoic. As a full-service bike shop, we have a mechanic on duty for all service needs. Our high-end carbon bikes are made by Serenity Bikes and we will carry a variety of the Bianchibrand. Other top-name brands carried by exclusively by Pedal Chic include city Cruiser bikes by Pashley Bicycles, Linus and Nirve; Terry Bicycles, She Beest, Dude Girl, Loeka, Nantucket Bike Baskets, Po Campo, and Rickshaw bags.
An avid cyclist, she saw the need for a female-friendly bike shop that would cater to a different demographic. With a focus on a fashionforward market, Pedal Chic moved into a new location in December 2010. But does Robin Bylenga’s pitch have what it takes to put her on the map? Robin Bylenga Pedal Chic
Photo by Wayne Culpepper/FishEye Studios
Brainstorm, advise, weigh in.
Wanna offer your advice? Log on to www.insideblackbox.com/SpeedPitch
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This is overall extremely well written and leaves very little question as to exactly what Pedal Chic is. I would actually lead with the second paragraph—I think this is the best overall explanation of the boutique and could stand alone if necessary. Very smart to mention the sizes that you carry in-store. I’m not sure that the level of detail in the third graph is necessary—it might be enough to just list the brands like you do in the last paragraph—or better yet, just remove the paragraph entirely and list those designers in the last paragraph with the others. Q1 2011
I would like to hear more about how Pedal Chic is a fullservice bike shop and the other offerings that might entail. The focus of this pitch is so strong on the apparel, but if you are going to offer other things aside from women’s fashions, I think that’s important to mention here as well. Taryn Scher President TKPR The business owner here does a great job at describing the product lines that they
carry. What’s missing here is describing the problem that Pedal Chic fixes—the void that they fill. Saying something like “Women in this market are becoming more active, but their selection for fitness apparel has not grown in a decade. That’s where we come in” or something similar telling a true need for what they do. Not telling us more about the void Pedal Chic supposedly fills has me wondering why they are “the only women-specific cycling and athletic boutique in the Southeast.” Is it because there isn’t a true need for it? If
there is, describe THAT as well as the product line. I found one of the most interesting aspects of the pitch was the idea that her approach is “best described as crafted, simple and honest.”This idea is something that could help build the foundation of her holistic approach—and its resulting full spectrum of services—and really set her apart from the stiff competition in architectural services. Tony Snipes Small Business Advisor Business Black Box
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the mind map approach to young entrepreneurship Tony Snipes is director of Redemption Marketplace Alliance, a Greenville-based entrepreneurship training program, where he utilizes a unique combination of years of leadership experience in the corporate arena with ministry experience in the community. Tony has spent over a decade as an internet publishing and advertising expert, helping clients for news media companies such as the Greenville News, The St. Petersburg Times, and News Channel 7 WSPA. Tony’s three daughters offer him a unique perspective that he brings to KidBiz.
.............................................................................. Sometimes, for young entrepreneurs, it can be a challenge to organize all the thoughts they may have about their new venture. They might even have trouble determining what a new product might be, or what the current market need is. But here is a cool way to help your young entrepreneur “get the wheels turning” as they think of ways to expand upon moneymaking ideas that they may have already in mind. It’s an exercise commonly known as “Mind Mapping” or “Concept Mapping,” and you and your young business owner can literally map out the potential of a project or idea together. (Or, you can use it in your own adult life, as well!)
Here’s how it works:
1. Start with anything to write on—from a sheet of paper (turned in the landscape position) to a dry erase board. 2. Get yourselves something to write with. Multiple colors work best, but aren’t necessary. 3. In the center of the sheet or board, write a word representing the main idea or project that you and your young entrepreneur wish to expand upon. Let’s use “Hand Made Jewelry” as an example. 4. Circle the phrase “Hand Made Jewelry” in one color.
by tony snipes
5. Now, ask yourselves “What can we do with this idea?”The answer may be to do jewelry in local college colors (my kids did that at it was a big success!) 6. Write the phrase “College colors” in a different color. 7. Circle that phrase and draw a line from “Hand Made Jewelry” to this new idea. 8. On the other side of the paper or board, write and circle another idea using the word “Necklaces” in a different color. Draw a line from “Hand Made Jewelry” to this word showing its relevance. Although adults use this process for better brainstorming and strategic planning, it’s great for young people because: It’s Visual: You and your son or daughter can not only talk about the ideas in mind but you create a visual representation which helps many kids (and adults) retain what they learn more effectively. It’s Interactive: Mind Mapping allows your child to join in with you as you together explore fun business concepts and opportunities. It’s Viral: Once your child gets the hang of Mind Mapping with you, they can easily do it on their own for other ideas, anytime, anyplace. By asking yourselves the question “What else can we do with this,” you can create a nice little map with additional thoughts you write out such as “Sell Do-It-Yourself Necklace Kits” and “Sell How-To Instruction Sheets online” and maybe more. So give it a try! You’ll find that Mind Mapping not only allows you and your young entrepreneur to flow with a stream of related ideas that can lead to new business opportunities, it also makes for a little interactive fun for you both.
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Business Black Box (Vol.3, Issue 1) is published four times per year by ShowCase Publishing, 1200 Woodruff Rd. Suite A8, Greenville, SC 29607; phone (864) 281-1323; fax (864) 281-1310. Business Black Box is a registered trademark of ShowCase Publishing © 2011. Content may not be reproduced without written permission of Business Black Box. Excerpts may be reprinted, provided that credit is given to the author and to Business Black Box magazine., Q1 2011
WHO’S WHO
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Courtyard Marriott • marriottcourtyardgreenville.com • IFC Enkindle • enkindleit.com • 39 fête Greenville • fetegreenville.com • 95 Greenville Road Warriors • greenvilleroadwarriors.com • 5 Greer State Bank • greerstatebank.com • 1 Harry & Jeans • harryandjeans.com • 69 Hilton Garden Inn • greenville.hgi.com • BC Holiday Inn Express • holidayinnexpress.com • 42 Larry J.Carlton Roofing • ljcarltonroofing.com • 81 Max Motivation • gobootcamp.com • 39 Palmetto Pride • palmettopride.com • 2 Pinnacle Bank • pinnaclebanksc.com • 23 Professional Healthcare Solutions • phsonline.com • 13 Sequoyah National Golf • sequoyahnational.com • 19 SC Launch • sclaunch.org • 83 Solace SkinCare • solaceskin.net • 44 St. Francis Mud Run • greenvillemudrun.org • 17 Summit Janitorial Services • summitjanitorial.com • 64 Table 301 • table301.com • 7 TEDx Greenville• tedxgreenville.com • 10 The Inn at Half Mile Farm • halfmilefarm.com • 79
A Multimedia Celebration of Downtown Greenville
The Lodge at Buckberry Creek • buckberrylodge.com • 14
Trade Bank • 864business.com • 91
Look for us online
www.fetegreenville.com
Water Of Life • givefreshwater.org • 33 Wolf Technology • wolftg.com • IBC
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The Red Horse Inn • theredhorseinn.com • 92
WORD • newsradioword.com • 62 Q1 2011
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ay Hewitt thought his first year of law school was taking its toll on his body: inordinate amounts of studying and lack of sleep, resulting in feelings of nausea. In reality, though, Hewitt’s body was letting him know that something more serious was going on. At 24, Hewitt was diagnosed with Type1 diabetes. It rocked his world. At first Hewitt decided to let his diabetes remain a personal matter—he didn’t want people to look at him like he had some health “issue.” In the following years, though, his perspective changed. Being a goal- or achievement-oriented person, Hewitt decided to push himself and his body, to see what he could accomplish. “I decided to run a marathon,” Hewitt recounts. “I had never run one before, but I did it through a fundraiser for The American Diabetes Association.” He saw it as an opportunity to help others, challenge himself, and the race was taking place in Hawaii—the combination of elements was too perfect. But one marathon was only the beginning. Following the race, a man at the finish line told Hewitt that the same area of Hawaii also hosted Ironman triathlons—one of the most wellknown of the Ultra Distance triathlons. Prior to running a marathon, Ironman competitors swim two-and-a-half miles and bike 112 miles. And while Hewitt recounts that first marathon as one of the best and most grueling experiences in his life (thus far), he now had new motivation. “I was obsessed with competing in one of these Ironman triathlons,” Hewitt says. Today, Hewitt continues on to earn multiple awards and distinctions including qualifying for the U.S. National Team and racing with them for three years. Following all of his accomplishments, though, Hewitt’s perspective shifted. “I saw the effect it was having on people,” he says. Media engagements started lining up and sponsorship opportunities began to follow.Then, speaking engagements.As Hewitt began to appear more in the public eye, he began to see the effect his story was having on others, particularly in the Type-1 or Juvenile Diabetes community. He gave others with diabetes, some of them children, hope that they could lead a normal life—that they were going to be okay. Nowadays you’re more likely to catch Hewitt sporting a suit, rather than running, swimming or biking gear, but his journey still very much encompasses his life—only now in a new way. Hewitt continues speaking for engagements across the country, in additional to time spent on his career as a partner at Pfeiffer Gleaton Wyatt Hewitt, PA, in Greenville and with his wife and two children. Hewitt speaks to both those with diabetes, as well as companies and other large groups. His message is gleaned from his life’s journey: dealing with setbacks; setting goals, achieving them and dealing with failure; and discipline and hard work. It’s through these opportunities to impact the lives of others that Hewitt now derives self-satisfaction and motivation. “Now I get that from speaking to people and giving the message of overcoming, recovering and staying disciplined to people,” he says. Q1 2011