May-June 2014 by Connect Business Magazine

IN MEMORIAM

The Story of Dr. Don Meredith Dr. Donald Charles Meredith passed away peacefully on March 25, 2014, at the age of 86, in the comfort of his Arizona home with his beloved wife Marjorie at his side. Meredith was Orthopaedic & Fracture Clinic’s second surgeon, joining Dr. Paul Gislason and the practice in 1959. From a company interview taken in 2005, then-retired Dr. Meredith shared this story of first seeing Mankato and renting a home in lower North Mankato:

Don Meredith 1927 – 2014

“After being in Mankato two years, Dr. Paul Gislason (the founder of Orthopaedic & Fracture Clinic) telephoned in April 1959 to ask me to look over his practice and Mankato. He wanted a partner. My wife and I drove in to Mankato on old US 169, which is North Riverfront today. In those days Mankato didn’t look very vibrant coming into town from that direction. We almost turned around and went home to St. Paul. Mankato was smaller than Fargo, my hometown. But we soon learned it had a huge drawing area of more than a quarter million people that didn’t have any orthopaedic surgeons except for Paul Gislason. So we moved here two months later. In 1959, Mankato didn’t have a lot of available housing. Paul and Marian Gislason were helping us look, even for basement apartments. We finally found this house in North Mankato at 802 Lyndale on the corner with Monroe, owned by the creamery owner in Henderson. It had two stories, the second being an expansion of the attic. I had to duck to get in there. You could still see the level where the 1952 flood had reached, near the windowpanes. The creamery owner charged us $125 plus utilities per month. Marjorie and I had three children, another on the way, a dog named Rags, and a cat named Spats. Our fourth child was born February 1960. When our fifth child was born in 1962, we had to move. So we had Janet, Nancy, Donald, Bruce, and Barbara. It was too crowded. We moved on Thanksgiving Day 1962.” —Dr. Don Meredith (2005). The physicians and staff of The Orthopaedic & Fracture Clinic carry on the tradition of Dr. Don Meredith through our focus on the health and well being of our patients and our commitment to our community.

Mankato, Faribault, Hutchinson, Northfield and 14 outreach clinics. 14 physicians and 110 employees.

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Contents

THE MAGAZINE FOR GROWING BUSINESSES IN SOUTHERN MINNESOTA

STAFF & CONTRIBUTORS Publisher: Jeffry Irish

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Editor: Daniel J. Vance Associate Editor: Carlienne Frisch

There is far more to New Ulm Telecom than meets the naked eye. Far more to 57-yearold President Bill Otis, too. Most Connect Business Magazine readers don’t realize New Ulm Telecom is a publicly traded company (NULM) that formerly owned 10 percent of Mankato-based Midwest Wireless, which sold in 2005-06 for more than $1 billion.

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Art Director/Staff Photographer: Kris Kathmann Advertising Manager: Steve Persons Contributing Photographers: Art Sidner Contributing Writers: Diana Furchtgott-Roth Production: Becky Wagner Josh Swanson

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Business Trends

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Connecting Back

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Diana Furchtgott-Roth, former chief economist of the U.S. Department of Labor, opines about the minimum wage. 4

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ABOUT CONNECT Locally owned Connect Business Magazine has ‘connected’ southern Minnesota businesses since 1994 through features, interviews, news and advertising. Connect Business Magazine is a publication of Concept & Design Incorporated, a graphic design firm offering print design, web design, illustration and photography. conceptanddesign.com

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EDITOR’S LETTER

Call Me Maybe If this May/June issue generates only half the excitement of our March/April 20th anniversary blockbuster featuring Tailwind Group co-owner Kyle Smith, we will be more than pleased as punch. It would seem no other issue in our publishing history grabbed our readers’ attention like that issue. For the sake of providing more and not resting on our laurels, we move on. Bill Otis makes our cover this issue and you can call him—maybe. He has been president of $40 million New Ulm Telecom more than 25 years and the business he leads helps nearly a quarter of our readers send and receive all manner of data. Otis has been a national telecommunications industry leader and was board chair of the former Mankato-based Midwest Wireless. Perhaps you still remember that little outfit. For company profiles, we feature Seaver Company of Le Sueur and Knit & Sew World of St. Peter. The former has more than 100 employees and is a family business selling millions of i-gogs sunglasses into nearly 4,000 retail outlets in 30 states. The latter tweaks and trades sewing, knitting, and embroidery machines for customers all over the world. So we have quite the variety of businesses, ones offering everything from cellular service and sunshades to sergers. Sursum ad summum,

Daniel J. Vance Editor

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HEINTZ TEAM MEMBER PROFILE

Nate Buboltz Service Advisor

Nate Buboltz grew up in Fairfax and graduated from high school in 1995. He worked as a mechanic for 5 years, sold cars for 6 years, three of those years at Heintz Toyota. Five years ago, he transitioned to Assistant Service Manager in order to spend more time at home with his wife and two young children.

“People talk about automobile dealers offering service after the sale. You could say I’m the epitome of that. I sold vehicles at Heintz Toyota for three years before taking my current position as assistant service manager. People I sold cars to back then, I now see in the Service Department – in some cases, entire families. Sometimes, my former customers will buy a vehicle from one of our salespeople yet still come over to ask my advice. So I still offer some input on the sales side.

“From working in sales, I learned the relationship I have with a customer is much more important than the vehicle.”

From working in sales, I learned the relationship I have with a customer is much more important than the vehicle.” Personal: 37-year-old Nate Buboltz lives in Eagle Lake with his wife Tara and two children.

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By Daniel J. Vance

Photo by Kris Kathmann

Long-time President/CEO of $40 million, two-state telecommunications company experiencing exponential growth.

There is far more to New Ulm Telecom than meets the naked eye. Far more to 57-year-old President Bill Otis, too. Most Connect Business Magazine readers don’t realize New Ulm Telecom is a publicly traded company (NULM) that formerly owned 10 percent of Mankatobased Midwest Wireless, which sold in 2005-06 for more than $1 billion. Most don’t realize $40 million (2014 estimated gross revenue) New Ulm Telecom has an ownership footprint in 23 Minnesota and Iowa communities, including Sioux City, Hutchinson, Sleepy Eye, Springfield, and New Ulm. The company has nine wholly owned subsidiaries providing everything from voice, digital television, Internet, managed services, and wireless to computer sales and repair. Most don’t realize.

They haven’t heard the story of Bill Otis becoming New Ulm Telecom controller/chief financial officer at age 23 and president/chief executive officer at age 27. He was board chair of Midwest Wireless during its colossal sale, and of Hector Communications Corporation, and has been a board member of United States Telephone Association, Minnesota Telecom Alliance, and of OPASTCO, an organization recently merging into NTCA—The Rural Broadband Association. Today, most don’t realize he serves on the board of Alliance Bank, BroadBand Visions, Independent Emergency Services, and FiberComm, a young telecommunications company serving Sioux City, Iowa. New Ulm Telecom and Bill Otis have flown under the radar. Most haven’t known—until now. continued >

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How would you like your name to appear on our cover? My actual name is Billy, not William. My name is Billy Don Otis. When my dad was in the military during World War II, his best friend was a man named Billy, who was from the South. My dad’s first name was Donald. I always tease my mom that I don’t have a formal name. On legal documents, everyone always wants to put William down. If anything, my name has become a badge of honor. I’m not William and I won’t sign my name as William. (Laughter.) It’s not my legal name. Your father, the man who named you Billy, what was he like? My parents are from Minnesota’s southeastern hills, near Houston. My dad was very hard working and very black and white. I wouldn’t say he was strict, but fair. He was dedicated and loyal. Obviously he was loyal to name his son after an Army friend. My father worked for a co-op, ACE Telephone Association. He probably got into the business through his brother-in-law, who was managing the company. Eventually, he worked his way up through the company to being personnel and safety director. He passed away in 2006 at age 86. You were introduced to the telephone industry early on. Were you the kind of kid who was

hired at the age of 14 to do odd jobs? I washed company vehicles, and for a summer job I also ran a plow that did install drops to main cables. At 16, in the early ‘70s, I was responsible for delivering ten thousand telephone directories in southeastern Minnesota by hanging them in plastic bags on mailboxes or on doors. In some towns, I hired other kids to work with me. What did you pick up from your parents? I picked up honesty, particularly from my dad. With him, you could make mistakes. He used to say if you aren’t making mistakes, then you aren’t doing a lot. My dad had something about him—I just didn’t want to disappoint him. (Pause. Deep emotion in voice.) Even as a teen, and when I was mad, I still had a deep respect for my dad. I still can hear him saying that trust takes a long, long time to build up, and can be destroyed with just one thing. Whether people like me or not, I would like to be known as honest. You know where I stand. I don’t play games or manipulate. You run a publicly traded company. If you did something dishonest, eventually more than just your immediate staff or family would find out about it. Absolutely. I probably have a tendency with my board towards over-disclosure. Many times I could give a board member a quick

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Bill Otis | New Ulm Telecom

Whether people like me or not, I would like to be known as honest. You know where I stand. I don’t play games or manipulate.

in hired Northwest Telecommunications to manage its operations, and through that company came Dennis Miller. Back then, cellular telephones were the size of boxes. My selling point to my board at the time for entering into the partnerships was that the license was worth something. If nothing else, I said, we ought to be able to get our money back. The company began as Cellular 2000.

answer to a question or problem, but that wouldn’t mean they would really understand it. So I like saying the short answer is yes, and then take time to give the reasons why. For a man who is careful about what he does and says, you sure took a leap of faith 25 years ago investing in the little cellular company that became Midwest Wireless. What you did was a gamble. About 1988, our company had part ownership in four southern Minnesota cellular partnerships. There were other cellular partnerships in northern Minnesota. In 1988, the partnerships we were involved

And in 2005-06, Mankato-based Midwest Wireless sold for more than $1 billion. Technically, we were the second-largest shareholder, owning about 10 percent. How did Dennis Miller and his team do it? Dennis has an ability to sell ideas. He is on our New Ulm Telecom board today. One of his secrets was in hiring some very good people to run the back room. He brought in cellular companies from Iowa and Wisconsin. His personality enabled him to do all this. When some companies that owned Midwest Wireless wanted to sell out their shares in 2002-03, we bought additional interests in the company. Dennis is a great guy. I have gone on fishing trips with him, and he’s the type of guy you don’t have to worry about in terms of increasing the tension in a room. He has the ability to defuse situations. I’ve seen

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But the sale itself was fun and exciting—all new. The dollar amounts thrown around were unbelievable. New Ulm Telecom ended up over time receiving about $82 million.

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him do that on our board. At Midwest Wireless, he had a board made up of top executives from ten companies from Wisconsin, Iowa, and Minnesota. And every proposal Dennis presented was not going to please everyone. He had the ability to step through boardroom divisions. Ultimately, he helped the board become much better at governance and helped see we each had to look beyond our own back yard and toward the long term. For example, one board member wanted to know why billboard advertising wasn’t in his area when his area was just as important. Through being on that board, I could see how you could grow something by looking beyond your footprint today toward what could be tomorrow.

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Tele-Definitions Bill Otis uses a number of acronyms in talking about the telecommunications industry. One is ILEC, which is short for “incumbent local exchange carrier,” and, in essence, refers to the original local telephone company providing service to a particular area. A CLEC, or competitive local exchange carrier, refers to a second or additional company offering telephone service in that same area. For example, in St. Peter, CenturyLink is the ILEC, and HickoryTech, a CLEC. New Ulm Telecom is an 18 percent owner of a CLEC in Sioux City, Iowa, called FiberComm. The Telecommunications Act of 1996 enhanced creation of these entities.

Bill Otis | New Ulm Telecom

When the company eventually sold in 2005-06 for more than $1 billion, obviously, New Ulm Telecom didn’t take home all $1 billion. How much were you able to take home and what did your company do with the money? I became chair of the Midwest Wireless board in 2004-05, which meant I was chair when we sold. During that time, Dennis, myself, and a handful of others were sued personally by one of the owners of Midwest Wireless. I would not go through that ordeal again for anything. The company suing us wanted first right of refusal for any sale and more out of the deal. To this day, I’m not sure what they wanted. That’s public record. Ultimately, we won the lawsuit. Because of the lawsuit and potential for conflict of interest, I had to leave the boardroom during all discussions about any proposed sale. If it had been up to me, I wouldn’t have given them a dime. (Laughter.) I firmly believed we were in the right. So there was some pain associated with the sale. But the sale itself was fun and exciting—all new. The dollar amounts thrown around were unbelievable. New Ulm Telecom ended up over time receiving about $82 million. Unfortunately, we had to pay taxes, so about 40 percent of that money disappeared with the remainder used for acquisitions and shareholder distributions. You could say one of the biggest single beneficiaries was the government. Absolutely. An opportunity came up just as the Midwest Wireless deal was closing. Mary Ellen Domeier was on our board then. She helped tremendously with strategic planning, governance, structure, procedures, and making sure we were doing the right things for the right reasons. We talked about exit strategies, growth opportunities, and organic growth, which we decided wouldn’t offer enough growth. We decided, in part, to grow through acquisition. The first opportunity was for Hector Communications. They were a bigger company,

so going after them was a scary proposition. They had ownership in Midwest Wireless, too. Hector Communications owned Sleepy Eye Telephone. For me to even think about borrowing $80 million was beyond my ability and comprehension. Ultimately, we became in 2006 one-third owners of Hector Communications along with BEVCOMM and Arvig. With our three companies sharing operations, I became board chair and president of Hector Communications and its subsidiaries. We ended up managing telephone companies in Sleepy Eye, Hanska, and Goodhue for seven years until December 31, 2012, when the three owners decided to spin off all the companies. We ended up with about 20 percent of Hector operations. Last year, 2013, was the first year those spin-offs were fully blended into our operations. We also took part of the “Midwest Wireless” money to purchase Hutchinson Telephone, a deal that closed on January 4, 2008. Take me through your career path. After graduating from Winona State in 1980 on a Saturday, I literally started working for 3M in St. Paul as a cost accountant the next Monday. I was married and we had a child on the way. I would have told you then I would never be working for a telephone company because I had watched my dad work long and hard days. While there only a year, I received a telephone call from a CPA firm that audited many telephone companies, including New Ulm Telecom. They asked if I was interested in a controller position there. Before the interview, I wouldn’t have been able to tell you where New Ulm was. I met and had lunch with the full board and received a job offer. I was told there was no reason to believe I couldn’t be running the company down the road. They said that? And you were only 23 at the time? Yes. Ultimately, I decided to take the job. I became the general manager at age 27.

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You were so young—you must have been scared to death. It was a much smaller company then. I had good mentors, especially Richard Rodenberg, who helped me get through a number of events. At first, I didn’t know what I didn’t know, and there was a lot I didn’t know. I probably should have been more afraid, but at least I knew enough about the plant operations because of having worked for ACE Telephone. Did you call your dad for advice? I would call my dad for advice. One time, I was thinking about buying company stock and asked what he thought. He said, “I think you’ve asked yourself the right questions.” Then I pressed him more and again asked what I should do. He said, “It’s not my decision. You have to live with the results, not me. Therefore you get to make the decision.” Another time, I said to him, “While I was growing up, you tried telling me things so I wouldn’t make the same mistakes you made. There were times I didn’t listen and made mistakes. So now I’m ready to take your advice.” He said, “I’m proud to say you don’t need my advice now because you’re asking all the right questions.” As for New Ulm Telecom, in terms of making decisions, you have to have the right people in the right places.

You’re an accountant and not an electrical engineer or a salesman. I trust in a lot of people and they trust me. When I became general manager, I made a vow to the board and they made the same vow to me. The vow was we have no surprises. I do everything I can so that you aren’t surprised when something happens. I asked them for no surprises back. There is a deep level of trust between management and board. You have to have that—I have to have it. When organizations don’t have trust, they break down. Trust issues are huge to me. I get that from my parents. If you don’t have trust, you really don’t have anything. Your mentors? Richard Rodenburg, who was a board chair. He didn’t work in the industry or company, but I respected and sought after his help. He was the one who told me I couldn’t leap every time. What I mean is, when I was younger, I often wanted to go from point A to Z right away. I’m more of a black and white person. If I’m at Point A and if I know I’m going to Z, I thought, why mess around? Why not just get there. Because of thinking like this, I needed people around me, like Richard, who were far more process-oriented than I was. To develop staff, you have to go step by step. I think I do relatively well today with people, such as one-on-one,

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in groups, and at our annual meeting. Am I totally polished? No. There are people who are much better speakers. I have the ability to build rapport with people, but not to pull the wool over anyone’s eyes. At our annual meetings, for example, I don’t try to sugar coat or skirt over tough issues. I try being up front and honest. I believe that comes through in public. That approach has served me well over the years, with shareholders, customers, board members, and industry. Tell the scope of your company. We have networks, such as fiberoptics, from Windom to Hutchinson to Mayer, and connections to Goodhue. We have quite a fiber network to Redwood Falls. We serve 23 different communities, and have voice, broadband Internet, video, Internet protocol, and IT services. We do data storage. We are growing and transitioning to the cloud with IP format, similar to other companies in our industry. What cities are you in? We are in Hutchinson, Litchfield, Redwood Falls, Aurelia (Iowa), Goodhue, Bellechester, and Sleepy Eye, for example. We own 18 percent of a competitive local exchange carrier (CLEC) in Sioux City (Iowa). Hutchinson and New Ulm are our larger communities.

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Getting to know you:

Bill Otis Born: April 27, 1957.

Education: Houston High School ’75; Winona State ’79, B.S. in business administration and accounting.

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Family: Wife Lori; six children ranging in age from 10-34; and three grandchildren. Current business involvement: BroadBand Visions, board chair; Independent Emergency Services, board chair; FiberComm, board member; and Alliance Bank, board member. Former business involvement: Hector Communications, board chair; Midwest Wireless, board chair; and board member for OPASTCO, United States Telephone Association, Minnesota Telecom Alliance, Cellular 2000, and Switch 2000.

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Do you look at Enventis in Mankato as a competitor, an equal, a big brother or a role model—or do you pay much attention to them at all? That’s quite a range. There are times when they are customers, partners, and competitors. There are times when we are putting together a network through a transport and go in with them the last mile, for example. There are times when they may be going after one of our business customers. That happens in many industries. I believe John Finke runs a good company. When you partnered in Hector, you partnered with BEVCOMM and Arvig. Did you have a good relationship with them before? The Eckles family owns BEVCOMM and I already knew and trusted them, but I didn’t know the Arvigs as well. Essentially, we were three companies wanting to do the same thing and none of us could do it on our own. Ironically, if wanting to make a similar acquisition today, all three of us probably could do it independently. We could leverage our way through the deal. We probably couldn’t do anything else but that deal, but we could do the deal. That partnership allowed us to get to know each other intimately, which was important. In board and employee situations, there are times you don’t agree and have to work things out. I would call your stock thinly traded. Are there advantages to having it that way? There can be a delay buying and selling our stock. We trade over the counter. One disadvantage of having thinly traded stock is you aren’t necessarily going to get institutional investors to come into your company, but maybe that can be a benefit because of not having people trying to push you a certain way quite as hard. Have you had people wanting to buy your company? Over the last 30 years we have had perhaps a half dozen inquiries, but no actual

Bill Otis | New Ulm Telecom

offers. Many years ago, before I came on here, a company tried, but its offer was voted down. What are the big trends in your industry? The largest trend is the conversion from a switched network to the cloud or IP, where voice becomes an application. I don’t think our circuit-switch network will totally go away because there are uses and benefits. For example, when your power goes off that network still works. It’s all data now. Voice is data, video streaming is data, your cable TV is data, the Internet is data—it’s all data. It’s just all being reconfigured whether it comes out as a picture or voice or something else. IP (Internet Protocol) is an efficient format. If having known in the past how the Internet would change, and the trends involving it, I would be a billionaire. Right now, less than half our revenues come from our landline business, and over half is from Internet and other sales, such as video. Going back 20 years, the vast majority of our revenue then was landline. What can you do to slow down the decline of your landline business? We bundle together different services. We’ve also been emphasizing that when your power goes off, your landline still works. The traditional voice line is still a great product. It’s just that millennials don’t talk. They text. But if you don’t want a telephone line, we are right there with video, the Internet, and wireless service that can include broadband. With wireless, we serve 12 communities. As we upgrade our services, we don’t keep expanding with copper. If copper needs replacing, we use fiberoptics. In 1999, we had revenues under $12 million. This year we are near $39 million. We have done well and are growing. When starting a competitive local exchange carrier (CLEC), we used to look at the bottom line. Now we focus more on the cash flow and EBITDA, simply because of the way accounting rules are today. In starting new ventures, we look for synergies, a good deal, and the acquisition of cable systems or independent local exchange carriers. We

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We have grown significantly since then. Some people who served on that board were sad to see Midwest Wireless end because they had been included, in terms of scope and size, at a level they will never again see in their lives. bought cable systems in Cologne, Mayer, and New Germany, for example. They are relatively small, but have great growth potential after we rebuilt them. Looking back over the years, as president/ceo, and going back to the mid-80s, what do you see as your biggest accomplishment as a company? I would say growth through purchasing Hutchinson and Hector. Probably one of the best experiences I personally had was with Midwest Wireless. We have grown significantly since then. Some people who served on that board were sad to see Midwest Wireless end because they had been included, in terms of scope and size, at a level they will never again see in their lives. Do you feel the same way? No, because I kind of grew along with Midwest Wireless. All the steps in that

company’s growth were logical. The steps happened when the growth should have happened. The same can be said for our purchase of Hector Communications and Hutchinson. We then bought Glencoe, which was right next to Hutchinson, which was a logical move. We have done some CLECs the same way. When going to Cologne, Mayer, and New Germany, we had fiber almost there already—so going there made sense. A lot of the “ahas” that people talk about in companies were not “ahas” at the time. All this was just like our initial involvement with the company that became Midwest Wireless. Our logical thinking then was that if the company went South, we probably wouldn’t lose a lot of our initial investment because of being able to recoup our money by selling the license. It was logical to think and do that, too. There will be other opportunities in the future that make logical sense. I don’t know if those business ventures will

be successes or not. But it makes sense for us to go down this (logical) path. It’s great when things work out, but sometimes they don’t. And we don’t talk about those. (Laughter.) How many times have you heard people talk about things or businesses that did not work out well? Have you had some? We were part of a CLEC partnership in Owatonna in the early 2000s in which the partners ultimately folded up. We just couldn’t get the traction we thought we could get. We shut it down after a few years. Other partnerships you have been involved in—ones that worked out well? We are one-seventh owners of IES, Independent Emergency Services. Basically, we

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have the database for most of the outstate sheriff departments’ 911 calls. We also sell equipment to sheriff departments. Our Hutchinson company had that contract when we bought them, and New Ulm Telecom is the managing entity for IES. Our company is also a partner and managing entity of BroadBand Visions, located in Hutchinson, which its owners throughout Minnesota use for data services and send out through fiberoptics.

My wife is a Junior Pioneer here, which means she can trace her ancestors back to the beginnings of the city. I met her in Eau Claire and found out she was originally from Madelia via North Dakota, where she grew up. But her ancestors were from New Ulm. I enjoy the German heritage. Otis is a Welsh name, but my dad said the only thing Welsh about us is our name. I’m part German.

It sounds as if to survive and grow you have chosen to partner with other companies. In many cases you have to because you need scale, which would take a long time to get by yourself. Experts are predicting more consolidation in our industry. The smaller companies will have a tougher and tougher time. What’s a smaller company? It’s someone smaller than you. For example, Comcast is trying to buy Time Warner in order to get scale. They are already the largest company of their type. No matter how large, you’re always trying to get larger. You’re always saying you need scale.

What else do you like about New Ulm? I was born and raised out in the country in southeastern Minnesota, just a mile outside a town of 1,000. New Ulm has shops, activities, and schools, and yet also has a small-town atmosphere. If I don’t know you, I will ask your name, and I can almost always connect you with someone I know. It’s a small and caring community. You find everyone is related to everyone else, or it sure seems that way. When I first came, I started playing softball, made an effort to get to know people, and they took me in. Life is good here and I have a great life. I love to hunt and fish, and this is a good area for this. It has made my life so much better having a great board and community.

What do you like best about your job. I like the people. The people here in New Ulm have been my friends and neighbors.

Tell me about your wife and her work. Her maiden name is Forstner, and her grandfather was one of the brothers starting

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New Ulm Telecom Address: 27 N Minnesota Street New Ulm, MN 56073 Telephone: 507-233-4259

Forstner Fire Apparatus in Madelia. He passed away in 1957. She works for Pinnacle Publishing (of Bemidji) as director of business development. The company publishes print and digital telephone directories for independent telephone companies. Just for the record, I have nothing to do with the agreement with New Ulm Telecom. We’re a small part of their overall business. Brian Tohal of New Ulm Economic Development Corporation says the telephone company does many things for the community under the radar. Why under the radar? That’s a good question. We are modest. If we do something good in the communities we serve, it’s not just to get advertising out of it, but because it’s the right thing to do. Editor Daniel J. Vance writes from Vernon Center.

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Chad Ostermann of M&M Insurance (Mapleton) is Southern Minnesota chapter president of the National Association of Insurance and Financial Advisors (NAIFA). In a Connect Business Magazine telephone interview, Ostermann shared how our state’s version of Obamacare, MNsure, had been affecting his industry and his thoughts on the state program’s long-term economic sustainability. Ostermann said his health insurance customers—after applying for MNsure— were falling into one of three categories: 1) those customers enrolled through a private plan, which they could have done without MNsure; 2) customers with an income qualifying them for a tax credit and enrolled in a private plan with subsidized premiums; 3) or lower-income customers being pushed into Medical Assistance and getting free or virtually free healthcare. Ostermann said he had heard from an industry source that as of April 4 about 175,000 people had signed up for MNsure, with more than 92,000 of that total enrolled in medical assistance. “MNsure was hoping for 75 percent (being enrolled in private health plans), but

so far it is only 27 percent,” he said. “What bothers me most is that some of the people going on Medical Assistance don’t want to go on it, but they don’t have a choice. They have no choice. They have to take Medical Assistance or pay the full amount. Many of these people would like to get a private plan and take a tax credit.” Ostermann questioned the economic sustainability of any insurance program in which nearly 75 percent of its enrollees were getting a free—or nearly free—ride. The federal government over the next two years would pay the premiums of the added people on Medical Assistance, he said, after which the responsibility would fall on Minnesota taxpayers. Said Ostermann, “There are agents in our association that have been put on hold for more than two hours with MNsure trying to get one of their clients enrolled. The only reason these clients went to MNsure instead of a private plan was to qualify for a tax credit or Medical Assistance. Let me give an example: Say a customer comes into an agent’s office and wants to enroll in MNsure for a tax credit, but then MNsure doesn’t think they make enough money based on the federal guideline to qualify for MNsure. So MNsure refers them to Medical Assistance. When this happens, the (insurance) agent doesn’t get paid anything. (NAIFA) agents are about helping people, but we have people to pay, too.” In essence, according to Ostermann, the government has been asking NAIFA (and other) agents in Minnesota to volunteer their services nearly 75 percent of the time, without government compensation. As for the “paying” customers, the

approximately 27 percent, Ostermann said, “And with them there has been a lot of (policy) turnover that has resulted in a lot more work for us—for customers that already had coverage.” In other words, because of MNsure and with these customers, he has had to work much more for the same amount of money. Ostermann added, “The thing is our (Minnesota) system was perfect or nearly perfect before all this. We already had coverage for people without enough income or with preexisting conditions. We had good quality providers in our area. It’s tough to be hard on MNsure because they are only following federal guidelines. But is (this new program) worth the $140 million, which is how much the federal government gave our state to fund it for two years?” Ostermann saved two of his biggest concerns for last: for one, MNsure has been hiring assisters (or navigators) to help Minnesotans enroll. These assisters do not have an insurance license and don’t follow the same industry code of ethics or continuing education requirements. He said, “Basically, I’m paying now through my taxes for these assisters to compete with me. Unlike us, these assisters get paid the same no matter how many people they enroll. Apparently, the State doesn’t value what we agents do. Customers will have to find out the hard way if they use an assister who enrolls them in a plan that isn’t best for them. If customers write the plans themselves using the assisters, and go direct, whom are they going to talk to when they have problems? Are they going to wait on hold for two hours like we have to wait? We fight to get our customers the best coverage.” Lastly, another point of concern was MNsure not being inclusive in terms of having insurance industry agents, insurance representatives or any insurance claims people—anyone with an insurance background at all—on its board. He said, “If you had a law that affected lakes, wouldn’t you want someone on the DNR as an advisor? It would seem they have devalued what we (agents) do.” Ostermann said his local NAIFA chapter had nearly 100 members, while NAIFA nationwide had 40,000.

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Le Sueur-based sunglasses business sells and services nearly 4,000 retail accounts in about 30 states.

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In September 1982, the late Dean C. Seaver, founder of Le Sueur-based Seaver Company, was driving home with a friend from a golf tournament in the Twin Cities. That friend, Frank, was the golf pro at the Le Sueur country club where Seaver was president. They had just won the golf tournament. Only a month before, after starting his own brokerage business selling to the drug, c-store, and grocery trades, Seaver had bought into an unnamed sunglasses line. He said to Frank, “I need to come up with a name for it. I have to call it something.” In seconds, Seaver saw the green Izod logo on his friend’s polo shirt. That gave Seaver an idea. “I think I’ll call it i-gogs,” he said. Today, Seaver Company sells millions of pairs of i-gogs into almost 4,000 retail outlets in 30 U.S. states, including far-off spots like Salisbury, Maryland, and Hattiesburg, Mississippi. Its customer base includes every Menard’s, Gander Mountain, and Hy-Vee location, and more than 1,000 Kwik Trip, Holiday Station Stores, and Freedom c-stores. The company overall has about 100 employees, with nearly all out in the field ordering product and/or stocking shelves for retailers who appreciate the helping hand. The company also owns a display-building business, which serves the i-gogs line and selected retailers. The current i-gogs line has everything from camouflage, goggles, polarized, shooting and power sports, performance, and women’s and children’s sunglasses to reading glasses. Founder Dean C. Seaver lived long enough—he passed away in 2010—to realize how fortuitous the moniker i-gogs would become in an Internet-crazy world that had not only an Izod, but also an iTunes, iMac, iPod, iCloud, iHeartRadio, and iPhone. Today, four close-knit Seaver family members co-own the business, and other family members play large roles. continued >

Back: Larry Seaver, Curt Seaver Front: Allison Seaver, Dean Seaver

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Said 54-year-old Dean Seaver, son of the founder, to Connect Business Magazine, “My dad started the business in August 1982. He had been in the wholesale pharmaceutical business throughout the 1960s and into the 1970s, starting as a salesman with McKesson & retailer area Robbins, who was at the time the world’s largest. He then became a your message here sales manager and an operations manager for the Minneapolis and St. Paul divisions, and helped consolidate the two divisions in 1969.” The elder Seaver was ambitious, but loyal to the upper Midwest. He could have moved up the McKesson ladder to outposts in San Francisco or Houston, for example, but chose to stay closer to home. As a salesman, he had “owned” his territory covering most of the Dakotas, and was one of McKesson’s top 10 salespeople nationally. While covering the Dakotas, the elder Seaver became friends with many drug store owners, who would later grow their businesses into larger entities. Back then, the social activities of many smaller communities revolved around drug store soda fountains. “My dad left McKesson in 1969 to run Northern Drug out of Duluth,” said Seaver. “That was an independent wholesaler involved in the drug store trade, which included pharmacy and over the

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“When we first started out in business, people usually asked me two things. They first asked what I did for a living. Then they asked if I sold to certain accounts,” said 54-year-old Seaver Company President Dean Seaver. He added, “As for the first question, after I told them I sold sunglasses, they would always ask what else I was selling. I would say, ‘No, I just sell sunglasses.’ They were like—good luck with that. And as for the second question— when we were just beginning, SuperAmerica was king of the convenience store industry in Minnesota. People asked if we were selling Super America yet, and I would say we hadn’t because we weren’t big enough. We had seen other companies outsell what they were capable of fulfilling and we didn’t want to do the same. In today’s world, I don’t know how far we are to selling to Target, for instance, but we haven’t tried. Not that selling to them isn’t on our radar, but right now we don’t have that capability.”

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counter products. When I was young, my father would take us to gift shows, where they would be selling everything from Timex, West Bend Clocks, Foster Grant sunglasses, and school supplies to haircare products.” In 1977, the elder Seaver left Northern Drug to start a snowmobile and boat business in Le Sueur, the city where his brother was a hospital administrator. After selling his snowmobile and boat business, called Minnesota Living, and working as an insurance agent a couple years (now the Canopy Group), the elder Seaver started his own brokerage in August 1982 to take advantage of his vast network of hundreds of independent pharmacists in a fivestate region. He began representing five companies, including two vitamin lines, and bought in on an import shipment of sunglasses, which he called i-gogs. The elder Seaver was passionate about everything, said Seaver, including all his friendships, golf, family, faith, and everyday work. “He was one of those guys who would tell it like it is,” he said. “He

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Display Array Seaver Company for years purchased sunglasses racks from the aptly named Sunglass Display Company, based in southern California. When that company’s owner hinted at retiring, Seaver Company saw an excellent opportunity to control the cost, quality, and supply of its sales racks, its primary point-ofpurchase marketing tool. Sunglass Display Company at one time supplied sunglasses displays to Walmart. Seaver Company purchased the business in 1997 and soon brought everything home to Le Sueur, where this 15,000 sq. ft. division now operates under the leadership of Dean’s brother Larry and accounts for up to 10 percent of company sales. Today, the display company division builds 3,500 to 6,000 display units annually, mostly for i-gogs, yet does have one large southeastern distributor buying displays without sunglasses.

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wouldn’t try to sugar coat.” After only six months of selling i-gogs, the elder Seaver saw promise and threw everything into the sunglasses line. He dropped all but one of his other lines. He had an i-gogs logo designed and the name “i-gogs” trademarked. Said Seaver, “My dad had a van, and wrote orders and delivered out of the van. That’s how we did it back in the day. He knew so many people from his drug store connections. We became the secondary supplier to all his buddies, who were committed to their wholesalers.”

Seaver said, “In 199598, and I’m not kidding, 90 percent of all our product was sold through direct store delivery. We were the Frito Lay of the sunglasses industry. We had three-quarter ton vans with product and fifteen salespeople in five states. We were road warriors, covering the Dakotas, Iowa, Minnesota, Wisconsin, Northern Illinois, and Upper Peninsula Michigan. Some of us were staying 130 nights a year in motels.” After graduating from Minnesota State Mankato in May 1983, the younger Seaver joined the fledgling, eight-month-old company. His father offered him an advance on commissions, nothing more, and he had to purchase his own $10,000 van for sunglasses deliveries. Those first eight months were especially brutal.

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He said, “I was a commission-only independent contractor working for my dad, and selling direct, store to store, to grocery stores, c-stores, drug stores. The only way our business could grow was through 100 percent cold calls. You learned really quick.” For one memorable call in 1986, Seaver heard through the grapevine that Food ‘N Fuel was leaning toward carrying a competing sunglasses line. Immediately, Seaver drove more than two hours to the company’s headquarters in Montevideo, asked without an appointment to see the owner, and persuaded him to carry i-gogs instead. The other line, said Seaver, had enticed the owner with wheel barrels of front-end cash while having a history of neglecting service and display quality. The number of independent grocery, drug store, and c-store businesses had dropped dramatically by the mid-’90s and Seaver Company was faced with adapting or dying—or so many people in the industry thought. It used the old-time business model of offering direct store delivery and personalized service. The company solution to these changing times wasn’t to do away with the model, but to enhance it—to do better what they had been doing. Seaver said, “In 1995-98, and I’m not kidding, 90 percent of all our product was sold through direct store delivery. We were the Frito Lay of the sunglasses industry. We had three-quarter ton vans with product and fifteen salespeople in five states. We were road warriors, covering the Dakotas, Iowa, Minnesota, Wisconsin, Northern Illinois, and Upper Peninsula Michigan. Some of us were staying 130 nights a year in motels.” Now the company does less than 10 percent of sales through direct store delivery. The remarkable transformation occurred from the late ‘90s through 2005. Now only three convenience store chains request direct store delivery. Menard’s and Gander Mountain, for example, have individual stores that send in weekly electronic orders off scanner data, which then get shipped via UPS and with Seaver Company employees following up to stock and service. About 150 UPS orders leave daily. The company employs a modified sales system for some

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other accounts—similar to what beverage companies do—in which an i-gogs advance person writes orders and another follows up to stock and service accounts. Seaver Company also works with three wholesalers servicing another 1,000 cstores: Farner-Bocken (Iowa), AMCON (Nebraska), and Chambers & Owens (Wisconsin).

Said Seaver, “The core of our business is our people. It’s all about the people. We have four or five pillars (revenue streams) of our company that support us, but they each begin and end with the people going into the stores. We are doing it and no one else is.” Said Seaver, “The core of our business is our people. It’s all about the people. We have four or five pillars (revenue streams) of our company that support us, but they each begin and end with the people going into the stores. We are doing it and no one else is.” Seaver mentioned one recent program in which the company shipped out new double-tower sunglasses displays direct to every Menard’s retail location. Seaver sent 37 salespeople into thirteen states and had the displays stocked and up in fourteen business days in 300 Menard’s outlets. Not

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one display arrived damaged, and each held about two hundred pair of sunglasses. None of Seaver Company’s sunglasses business with Menard’s (or with any other customer, for that matter, including Byerly’s or Lund’s) is seasonal. It’s all year-around sales, with fresh i-gogs displays released periodically and most restocked with electronic orders taken from scanner data. I-gogs displays, in most accounts, are either the highest gross profit line per square foot or one of the highest, he claimed. A pair of i-gogs sunglasses sells from between $15 to $30. One of the company’s larger accounts, Gander Mountain, has up to ten Seaver racks in each store, including ones containing sunglasses made by Seaver Company especially for Gander Mountain. One such product, “Fish Eyes,” could be Gander Mountain’s highest profit per square foot item. He said, “I use the way we do sales as a selling point. Everybody thinks our service is so innovative, but we have been doing it this way for 32 years. We do what we’ve always done. We do it old school.”

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The company sells “far more than a million sunglasses and less than ten million,” said Seaver, from a wide array of product manufactured in a couple dozen factories in Japan, Taiwan, and China. (Seaver visits overseas about twice a year and attends worldwide industry trade shows twice a year.) Product design usually begins in the U.S., with finishing touches performed overseas. The company deals with hundreds of frame designs at any one time. Being labor intensive has become not only a sales advantage to Seaver, but also a barrier of entry to other sunglasses companies wishing to replicate i-gogs’ success. MAY/JUNE 2014

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Seaver Company | Le Sueur

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The tight-knit family environment has been woven together by a shared Christian faith, which Seaver said played a central role in their business decisions and been a reason for being in business. Sometimes, due to high labor costs, Seaver Company won’t break even on an account for two years. Not many companies are willing to take on such risk. “Most people try to do as much as they can with as few bodies as possible,” he said. “We go against the grain. Our customers don’t leave us. We save them money handling a very labor intensive item.” When asked, Why not expand into other lines besides sunglasses? he said, “Why? When I know how much I make on my item, why would I take on something else and make less?” The four co-owners of Seaver Company are Dean, his sister Allison, brother Larry, and younger brother Curt. Allison oversees the logistics of scheduling more than 80 representatives into all i-gogs retail outlets. Larry oversees the display design and manufacturing division, which has greatly helped company growth the last decade. Curt is the sales manager and key account representative for major Midwest customers. Theirs has been a family business in the purest sense. Dean’s wife has been office manager for 31 years, and daughter, Sandra, serves as the company CPA. Dean’s son Nick covers three states as a sales supervisor and nephew Josh works for Larry and is an MSU engineering student. Seaver joked, “My wife signs my checks after my daughter

approves them.” The tight-knit family environment has been woven together by a shared Christian faith, which Seaver said played a central role in their business decisions and been a reason for being in business. He said, “We just try to work hard every day, and be diligent every day. But we’re never satisfied with the status quo. We have stayed with what we do well. We will continue with our service program as long as we can afford it. We just have to find ways to afford it.” For years, Seaver Company, which has about eighteen Le Sueur employees, has had a reputation for being under-the-radar and going incognito—much like Secret Service agents wearing dark i-gogs. As for the company going incognito, a visitor can’t even find a sign out front that identifies what goes on inside. Said Seaver, “Maybe that’s just our personality. We aren’t big trade show guys either. That’s because our business primarily isn’t done there or here. It’s mostly done face-to-face out in the field. It’s done old-school. That works for us.” Editor Daniel J. Vance writes from Vernon Center.

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Any chamber of commerce, convention and visitors bureau, or economic development organization in our reading area—large or small, from Amboy to Waterville—can post on our free bulletin board. For details, email editor@connectbiz.com.

Blue Earth Cindy Lyon, Blue Earth Chamber

Blue Earth Chamber hosts a “City-Wide Clean Up” at Faribault County Fairgrounds to help our citizens clean green. Bring your electronics, appliances, chemicals, batteries and junk on May 3 from 9 to noon. Also, the Annual Golf-Wine-Beer Tasting event on June 17 at Riverside Country Club, featuring our newest treat in town, Oswald Brewing Company, and food prepared by Riverside Country Club. Finally, join us July 11-13 to celebrate the Giant’s 35th birthday.

Fairmont Bob Wallace, Fairmont Area Chamber

Martin County is Minnesota’s leading pork producing county. To recognize the importance of the pork industry to Martin County and the State of Minnesota, the Martin County Pork Producers and the Fairmont Area Chamber of Commerce have joined together to host the 22nd Annual Minnesota State Pork Masters Golf Outing on Monday July 28 at Interlaken Golf Club. Nearly 100 sponsors and over 250 golfers will participate to raise funds for Ag-Awareness and Scholarships.

Fairmont Mike Humpal, City of Fairmont

Green Plains Renewables purchased and restarted operations at our 100-million gallon ethanol facility. The company is one of the nation’s top four ethanol producers. Fairmont Theater re-opened March 21 its five-screen movie theater, using the latest in digital projection and sound. If you haven’t been to Five Lakes Centre (Mall) for a while, be sure to stop in to visit all the new retail businesses, renovations, and restaurants. It’s great seeing the mall thriving again.

Lake Crystal Julie Reed, Lake Crystal Chamber

Lake Crystal Area Chamber hosts its Semi-Annual City Wide Garage Sale May 9-10. Maps of locations and sales items offered will be available at lakecrystalchamber.com. The Lake Crystal City Celebration will be June 13-14, and kicked off with a Battle of the Bands parade involving twelve high school marching bands. Stay for a carnival, pony rides, bingo, beer garden, state-sanctioned pedalpull, beanbag tournament, turtle races, music and entertainment. and fireworks at 10:00 p.m. Friday.

Madelia Karla Grev, Madelia Chamber

Madelia Park Days Blues Festival & Barbeque Contest runs July 1013. Thursday night family fun. Friday 7 p.m. parade, entertainment with SuFuDu and Six Appeal, fireworks. Saturday tournaments, 5K run/walk, wine/beer wagon, kids carnival, KCBS-sanctioned barbeque contest, Blues Festival with Billy & the Bangers, Lisa Wenger Band, Boom Boom Steve V & the Knockouts, Blue Max, Cole Allen Band, and Sena Ehrhandt Band. Sunday fireman’s breakfast, gospel music/ worship, kids pedal pull. See visitmadelia.com or 888-941-7283.

Mankato Amy Linde, Greater Mankato Growth

Join us as Greater Mankato Growth hosts the 11th annual Songs on the Lawn presented by Xcel Energy every Thursday in June! Songs on the Lawn is held from 11:00 am - 1:00 pm in front of the Intergovernmental Center in City Center Mankato. Join colleagues, friends and family over lunch for live music, food from regional restaurants and more. Learn more on our website: greatermankato.com/songs-lawn.

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Local Chamber & Economic Development News

Nicollet Alesia Slater, Nicollet Chamber

Nicollet’s annual Friendship Days Celebration is the weekend of June 20-22. Festivities include a carnival, Miss Nicollet competition, craft fair, demo derby, tractor pull, 5k Run/Walk for the Susan Komen Foundation, parade, entertainment in the park and food. For more information, visit nicollet.org.

Mankato Nicole Griensewic, Region Nine

Region Nine Development Commission (RNDC) has contracted with Southeast Region Homeland Security Emergency Management Joint Powers Board to assist with Homeland Security and Emergency Management planning services. Through this contract, RNDC hired a regional planner to serve sixteen counties in southeastern Minnesota. A regional planner helps the emergency managers prepare, from response to recovery, for a disastrous event threatening the lives, property, infrastructure and the economic vitality of a region. To learn more, see rndc.org.

Mankato Julie Nelson, Small Business Development Center

Terry Sveine, New Ulm CVB

For you road-trippers and/ or people enjoying garage sales: drive the Minnesota River Valley Scenic Byway on May 2-4 for the “Byway Long Garage Sale.” See mnrivervalley.com for details. Sample wine at Morgan Creek Vineyards Mai Fest on May 3. Schell’s Brewery hosts the annual Lager Lauf run on May 18. The always fun Auto Fest returns June 29. Also, come on over to learn about the “Hermann Footprint” legend. There’s always fun in New Ulm!

SBDC and U.S. Bank (Mankato) present the Small Business Success Series, four seminars to help you plan, evaluate, manage and find solutions meeting unique needs of your business. Sessions are from 11:30 a.m. to 1:00 p.m. at Minnesota State University and include lunch. Schedule: June 5, The Business Plan; June 11, Small Business Report Card; June 18, Managing Cash; and June 25, Payment Solutions. No cost but pre-registration is required. Details and registration at myminnesotabusiness.com/workshops-clinics.

business present ideas and concepts to a business leader panel that gives instant and constructive feedback. Typically, the pitch is given in ten minutes and receives 30 minutes of feedback. BizPitch isn’t a start-up funding mechanism, but the panel may suggest funding ideas. Anyone interested in participating call 344-7897.

Mankato Laura Dhuyvetter, RCEF

Saint Peter Ed Lee, St. Peter Chamber

Regional Center for Entrepreneurial Facilitation (RCEF) has a new, free entrepreneur resource called BizPitch, which is a monthly forum where established entrepreneurs and those in early-stage

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Joel Brinker of NuStar Realty and the American Lung Association in Minnesota joined the Chamber. Michael Drash, who has lived and worked the last couple decades in the California wine region,

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Local Chamber & Economic Development News

has been named winemaker at Chankaska Creek Ranch and Winery. St. Peter hosts the upcoming free, live music events: Blues Fest; Livestock; July 4; TRAM overnight; and Rock Bend Folk Fest. Business After Hours on May 20 at Mankato Clinic Daniels.

Sleepy Eye Trista Barka, Sleepy Eye Area Chamber

Sleepy Eye Kurk Kramer, Sleepy Eye EDA

The City of Sleepy Eye has its first commercial/retail partner in the “Snow First Addition” property. Iowa-based Casey’s General Stores signed a purchase agreement. Casey’s General Stores, already in Sleepy Eye, will construct a new generation of convenience store there. The new store will be larger and more truck-friendly than the older generation of Casey’s General Stores. Also, Main Street in Sleepy Eye added three businesses: K & J Antiques, Anytime Fitness, and Café Euro.

Bethany Berkner was crowned 2014 Miss Sleepy Eye along with attendants Miranda McMullen and Hayley Neid. They all will serve as goodwill ambassadors for Sleepy Eye in the year 2014. The Chamber hosted a customer service workshop entitled, “At Your Service: Working with Multicultural Customers.” Twenty-four members were in attendance. There will be even more educational and networking workshops throughout the coming year. The Chamber has made this a priority.

Springfield Marlys Vanderwerf, Springfield Chamber

Springfield has warmer weather events to enjoy. May 1-3 spring open house, with drawings for free plants and city-wide garage sale; May 14 Springfield Mayo Clinic Health System health fair; June 23 Chamber golf tournament; June 27-30 Riverside Days, with baseball, bean bag and volleyball tournaments, trap shooting, 5K fun run/walk, kiddie/ grand parade, classic car show, free kids fishing derby, dances, carnival, “pancakes in the park,” pie/ice cream social, pork chop feed and more.

Waseca Kimberly Johnson, City of Waseca

Waseca offers land for economic development opportunities and has revolving loan funds available for new, expanding or relocating businesses. The $625,000 IRP fund provides low-interest loans to $156,250 and is available countywide to all businesses types. The $200,000 RBEG fund provides low-interest loans up to $50,000 to new and emerging businesses within or locating to the City. Other loan funds focus on downtown commercial and rental rehabilitation. Tax Increment Financing and Tax Abatement incentives available.

Waseca Kim Foels, Waseca Area Chamber

Waseca Area Chamber of Commerce and Agri-Business Committee presented the annual Farm and City Luncheon, with over 250 in attendance. The 2014 Waseca County Outstanding Young Farmer award recipient was Justin Below. Recipients of the 2014 Waseca County Farm Family of the Year award were Brent, Lianne, Bayli, and Kyra Possin. Speakers were Commissioner Dave Frederickson of Minnesota Department of Agriculture and Associate Professor Sam Baidoo (animal science-swine nutrition) of University of Minnesota. See discoverwaseca.com/chamber.

Pioneer Bank

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Your business bankers in Greater Mankato are David Krause, Mike Harrington, Duane Olenius, Matt Chmielewski and Denise Nienow

Business Checking Internet Banking On-line Bill Pay On-line Cash Management Remote Deposit Capture Merchant Card Services Business Credit Cards Letters of Credit Operating, Equipment & Real Estate Loans

Exceeding Expectations. www.bankwithpioneer.com

Elmore: 507-943-3131 Lewisville: 507-435-2451 Madelia: 507-642-3251 Mankato: 507-345-7069 Mapleton: 507-524-3630 North Mankato: 507-625-3268 St. James: 507-375-3201 Lake Crystal Loan Production Office: 507-726-6475 MAY/JUNE 2014

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OFF-THE-CUFF

For years, I’ve been a Dayton supporter and couldn’t have been happier following Dayton’s progressive moves over the last couple months. I’m a University Jay Weir

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Weir working today, to protect your tomorrow. 34

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of Dayton alumnus and was tickled pink about their NCAA Cinderella run. Honestly, how many of you thought I was referring to Gov. Mark Dayton? Below, I have different from usual reading fare. I had a stormy dream the other night in neon-crisp colors, a visual extravaganza, like flipping out watching Hulk Hogan sing Pink Floyd’s greatest hits after eating 25 psychedelic mushrooms. The dream started benign: I was eyeing a television news show in which a government spokesperson announced that every American had to buy a Lexus SUV while allowing the option of choosing gold, silver or bronze paint jobs. I was viscerally upset at not being allowed to keep my new 2013 Chevy Spark and having to buy a damn Lexus. The announcer said I had no choice. But I didn’t want a Lexus. I wanted my Spark. My Spark got 40 mpg and was bareboneswhite and may have been more a little boy’s Daniel J. Vance Matchbox car than anything a real grownup in Editor cotton underwear would drive. It had manual transmission, manual crank windows, and manual side mirrors. Yet the Spark had everything I wanted, including low monthly payments and efficiency, thank you very much. The Lexus had features I didn’t need, including a 7,000-pound towing capacity, 4WD, 383 horsepower, and a 19-speaker surroundsound system. I certainly didn’t need those mud flaps and whistles, and certainly couldn’t justify paying through the nose for it. The news announcer said 48 million Americans didn’t have an automobile and that the federal government—by mandating a Lexus purchase—would be trying to insure every American had equal access to employment via transportation. So they were forcing me to scrap my car and purchase a new Lexus because 48 million people didn’t have transportation? Was I somehow missing the logic in their argument? A government spokesperson said my Lexus payments would be about $2,500 less per year than what I was paying for my Spark, which made no sense. I knew how much a Spark cost and how much a Lexus probably would cost. No way a Lexus could be less. Confused, I wandered the streets. Nothing made sense. I drank heavily. I turned on another television set and heard a government spokesperson then say I would have to pay a tax for not buying a Lexus. What? Get taxed for not purchasing a car I couldn’t afford? In my dream, a week later, the announcer said a government

agency had decided on its own, without Congressional approval— and therefore the agency was breaking the law—to make 38 major exceptions about who had to buy a Lexus and when and how much. Many big businesses and labor unions never would have to buy one. Congressional staffers would get subsidies to help make their Lexus payments. Some business owners could delay buying a Lexus up to two years—and so the latter could keep their Sparks for a while. However, no exceptions were made for me, a small business owner without employees. They were making me buy a Lexus even though I had no need for 7,000-pound towing capacity, full-time 4WD, 383 horsepower, and a 19-speaker sound system. It looked like going forward I would have to work extra hours to pay for a Lexus I didn’t need. At one point in this techno-color dream extravaganza I became terribly upset—my wife said she heard me punching my pillows— right after I dreamed of bringing in my Lexus for service and was told by the service manager I couldn’t see my old mechanic. But he and I had been good friends. I had trusted him. The service manager said I had to see their new, government-approved Lexus mechanic. Right away, I telephoned my old mechanic to complain. He said he had retired a month before to avoid all the hassles. He also said the government, through borrowing trillions of dollars, would be heavily subsidizing the costs associated with 75 percent of the people buying a Lexus. He said young people down the road through higher taxes would have to pay off those borrowed trillions. He said my children in future years would not only be responsible for forking over mega-greenbacks for their own expensive Lexuses, but also for the debt mine was creating today. Awaking in a cold sweat, I rubbed my eyes and felt immediate relief. This had been only a dream. Nothing like this could ever occur in the United States of America, the land of the free and home of the brave. I think I’ll go eat some psychedelic mushrooms. Thanks again for reading southern Minnesota’s first and only locally owned business magazine, the only one reaching 8,800 business decision makers in nine southern Minnesota counties. See you next issue for a real blockbuster.

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By Carlienne A. Frisch Photo by Kris Kathmann

Elite St. Peter service and retail business has exacting customers all over the globe.

When a knitting machine breaks in Oregon, Mexico City, Quebec, Canada, or even Sweden, there’s a good likelihood it will be repaired in St. Peter. A little shop nestled in St. Peter’s historic district, Knit & Sew World, occupies the storefront at 119 South Minnesota Avenue. “Right now, the knitting machine is becoming popular again, after a generation of nearly being ignored,” said owner Shawn Dolan. He and his wife, Sherry, purchased the historic building in 2004, just four years after they bought the business itself. At that time, in 2004, they operated Mary Lue’s Knit & Sew in a space they leased from Mary Lue’s Knitting World. Following the move to Minnesota Avenue, Dolan hired a painter to display the name Knit & Sew World on the storefront windows rather than going through the process of getting permission from a community historic preservation organization to hang out a shingle. Dolan’s career in repairing knitting, sewing, embroidery and quilting machines dates back to his relationship with Chuck and Mary Lue Brinker, who founded Mary Lue’s. (Chuck has since passed away; Mary Lue is now retired and their daughters operate the business.) “I worked for Mary Lue’s Knitting World in 1984, when I graduated from what was then Mankato State University with a degree in elementary education and coaching,” Dolan said. “At the time there was a flood of teaching graduates with nobody retiring, and I didn’t want to move to another part of the country. I first did building maintenance for Chuck and then was asked to help with the knitting machine aspect of the business.” continued > MAY/JUNE 2014

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“With experience in selling and servicing sewing machines, the Brinkers expanded in 1968 by becoming a sales distributor and service center for Brother brand knitting machines,” said Dolan, owner of Knit & Sew World, providing background information about his business. “They were a national service center, servicing 120 dealers in a five-state area, as well as dealers from other regions where their repair people were stymied. Chuck was kind of a genius at repairs. He started showing me how to do repairs, but I was still looking for teaching jobs. In 1985, I interviewed for a position with St. Peter Schools and was supposed to interview again in August.” He continued on. “Our first child was born on that August day, so I decided to stay another year and be mentored by Chuck. Within that year I was well trained in and on the machines and became manager of the wholesale part of the company, selling to about 120 storefront and home business dealers in the five-state area. I was half managing and half repairing by 1987, so I made the decision to stay. We re-formulated how I was paid, including commissions on repairs. I learned a lot from Chuck—advertising, inventory control, focus, finance, and evaluating products, etc.” In addition to an unofficial onsite apprenticeship with Brinker, Dolan accompanied Brinker to national workshops. He also became educated about one of the key products of that time. “I learned about the yarns, called Mary Lue’s Yarns, and the dyeing process,” Dolan said. “I didn’t do the dyeing, but I ordered raw materials and gave specs to factories. We had eight different weights, and (he gestured at a shelf) we still have some cones of that yarn.” Previous employment also helped prepare Dolan for buying the business in 2000. While in high school, he augmented his mechanical skills by working for Central Radiator in St. Paul. As a college

Sew Easy

Knitting Together 1) Locally, the Dolans support Relay for Life, Disabled American Veterans, and Adult & Teen Challenge. 2) Dolan is part of the Brother dealer network and authorized repair network.

of Mankato

507.345.3388 signpromankato.com 38

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3) A member of the Upper Midwest Knitting Machine Dealers Club, Dolan attends annual seminars. The organization has a Minnesota State Fair booth.

| St.| MRCI Knit & Sew World Peter Service Source

student, he was employed by construction contractors and picked up other business knowledge, including planning and management. He also learned about the importance of paperwork, of which he said, “I don’t really like it much.” What Dolan does like are the sciences. “I was kind of into chemistry and biology in college and was going for pre-chiropractic,” he said. “But I wanted to coach, so I became a teacher, with a Bachelor of Science degree in elementary education and minors in coaching, chemistry and biology. I would have taught all subjects in the classroom. When I graduated, I coached at MSU and West High School in Mankato. The main reason I quit coaching is that I had to be at school by 3 p.m. We didn’t close until 5 p.m. and our repair business was really taking off.” Dolan, a jack-of-all-trades when it comes to knitting, sewing, quilting and embroidery machines, describes his sole full-time employee, Amanda, as his right hand. She’s the main instructor for knitting, sewing, and embroidery classes and clubs, as well as the

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Childhood: The 13th of 15 children, Dolan grew up in Little Canada and Wyoming, Minn. He graduated from Forest Lake High School. Favorite class: History. “I like learning about how things were. It’s intriguing.” Least favorite class: English. “I love to read, and I like literature, but not the grammar side.” Family: The Dolans married during their last year in college. They have two adult sons. Hobbies: Fishing, golfing, biking and playing softball during the summer. “I mentor younger fishermen, and in one case turned one of them from doing drugs to fishing.” Biggest accomplishment: “Raising two boys.” Most valuable possession: “My family and our home on three acres near Lake Jefferson. I’m not really materialistic.” Most valued intangible: “My faith.” Three terms that describe you: “Easy going, fair, and respectable. If you weren’t doing this, what would you be doing? “Probably teaching. In this business, we’re teaching every day.” MAY/JUNE 2014

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Sew Easy

company’s webpage developer. Sherry Dolan, a real estate agent, is in the shop one day a week, working with phone inquiries, window displays and bookwork, and cleaning and checking parts of used machines to prepare them for sale. Another part-timer fills in as needed, handling orders. “I oversee the entire business and decide with Amanda what to order and to display,” Dolan said. “I do all the repairs on knitting and sewing machines—not only Brother, but also Singer, Viking, Kenmore, New Home, Baby Lock, Pfaff, Juki, and Janome. I have had Brother elite training, so we’re an elite authorized service center. That’s why I repair machines that come from across the country and from other countries. I still go to Brother classes annually and often help teach them. Brother has 35-40 sewing, quilting, and embroidery machines in their line, with seven or eight dropping off every few years and seven or eight new ones being added. I do a lot of repair on Brother knitting and sewing machines and sell a lot of used Brother machines.” Although Brother no longer makes knitting machines, Dolan sells and services other companies’ knitting machines. As a dealer, Dolan takes orders for new machines, but comes from the old school of “if you can fix it, you probably should.” He explained, “You have to be sensitive to customers wanting to keep their machines instead of wanting to buy a new one even though it may take time to

get parts for older machines, could be six or eight weeks. Then it takes only one to four hours to fix a knitting machine, one to three for a sewing machine. About 75 percent of my work is repairs.” For customers who choose to purchase a new machine, Dolan offers advantages that don’t exist with a purchase on Amazon.com. “Buying from me rather than on Amazon may cost $100 more, but there are additional features I offer and free initial training from me,” he said. “I offer additional help for machines bought here. We’re small enough that we’re willing to help anyone, but you have to draw the line somewhere. Individual lessons on a machine that wasn’t bought here are $25 an hour.” “With profit margins down the past few years, it takes the sale of three or four machines to clear the cost of one,” he said. “I try not to borrow money to run my business. The only business loan is on the building. I bring in new lines of inventory slowly.” Over the past 10 years, retail sales have replaced wholesale deals almost entirely. Dolan continues using local advertising, such as the Yellow Pages within a 50-mile radius, but gets most of his business from the company’s webpage or word-of-mouth. Because of his Brother elite status, he gets all Brother repair calls from throughout the nation. The ailing machines are shipped to St. Peter, where Dolan works on them in the back room or basement. In the front of the shop are displays of knitting magazines, general threads, custom threads, sewing machine feet, memory cards for embroidery, etc.

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Knit & Sew World | St. Peter

“I also repair commercial sewing machines on site,” he said. “I’ve gone as far as a three-hour drive away, but prefer to keep it to one hour. The commercial knitting machines are on the East Coast. Around here, it’s more of a cottage industry.” When Dolan bought the business, his goal was to increase the number of distributorships and add retailers. Now, he said, “I want to be the best machine repair shop, with that leaking over into sales. If I could change one thing, I maybe would have gone to Mankato instead of buying a building here. A couple of times I have thought of moving to Mankato, but at age 52 do I want to go into debt to expand my business? I don’t carry all of the high-end inventory, so when we order a machine for a customer, the customer gets the newest machine available.” He added, “I think the most unusual aspect of the business is that we deal with people all over the country, but we’re just this tiny store. More than half of our business comes from out of the area.” That business outside the area includes a few celebrities. One knitting machine customer is the actress Karen Allen, who has been interviewed by Martha Stewart about Allen’s fiber arts business in Monterey, California. In appreciation for keeping her knitting machines running, Dolan received an autographed DVD of one of Allen’s movies and a cashmere scarf Allen knit for him with yarn

from the cashmere goats she raises. “She called me the guru of her knitting machine,” Dolan said. “I also fix knitting machines for Dr. Laura, the radio advice talk show host. “Our business is a niche business, and you have to be good at certain things in a niche business,” he said. “We do a lot of consultations on the telephone and with photos of the problem on a computer screen. It’s helpful in diagnosing a problem from hundreds of miles away.” Dolan makes 350-400 knitting machine repairs a year and about 150 sewing machine repairs. On the merchandise side, he sells 20-25 new knitting machines a year and 150 used, as well as 90-100 new and gently used sewing machines annually. That doesn’t include the many additional parts and accessories available. Dolan’s used inventory includes refurbished equipment such as four gauges of used knitting machines, from 3.5 (fine) to 9.0 (bulky), and equipment with interesting names like ribbers, color changers, garter carriages, garter bars, and linkers. And that’s just in the knitting category. He carries several brands of sewing machines, accessories, sergers, cover stitch machines, etc. There also are embroidery machines, oils and other lubricants, instructional videos, software, memory cards and various yarns, including alpaca. Sometimes, timing is more important than availability. Dolan recalled a customer in Christchurch, New Zealand, whose knitting machine had been damaged in an earthquake. She emailed an order

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for a used machine, which he shipped, but fortunately it did not arrive in Christchurch until after the second earthquake had occurred. With the rising popularity of knitting machines, there’s a parallel trend toward purchase of Asian-made machines. Dolan has examined them carefully. “Brother quit making knitting machines by 2004 or 2005,” Dolan said. “The Asian manufacturers are finding that in producing durable goods, they have to make them well. I have taken apart the machines of certain Asian companies and found the internal workings are good quality, but the exterior appearance is not as upscale as the old machines. The surface is rougher to the touch.” In his business dealings, Dolan offers the warmth of personal service as he deals with neighbors from the next block or the next town, as well as people from around the world. He said, “We like our customers. I have only ever had two bad checks in 14 years, and the people made good on them. Sewing and knitting people are like that, the kind of people I want to deal with.” Dolan’s knitting machine expertise makes him a rare breed. He explained, “Other repair shops do sewing, embroidery and quilting machines, but not knitting machines. There are a few shops around the country that repair knitting machines, but not to the extent I do. I had my sons do a little bit of it, but they aren’t really interested. A few others have tried, but didn’t pursue it because it’s quite complicated. There are many variables, even the question, ‘Are they using the right yarn?’ It’s not just mechanical. You have to know the knitting as well as the machines.” Carlienne A. Frisch writes from Mankato.

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Read the entire articles at connectbiz.com

5 YEAR AGO

MAY 2009 Lori Wightman, president of New Ulm Medical Center, made our spring cover. Profiled companies included Great Plains Transport (Fairmont) and Inspired Technologies (Le Sueur). Great quote from Wightman about New Ulm Medical Center’s unique business model: “Many physicians have visited here to kick the tires on our (business) model, but for one reason or another our model hasn’t been replicated. For the model to work, the physicians have to let go of the idea of owning bricks and mortar—and of having their own employees—in order to feel they will be loyal to their practice. Our physicians have learned since 1996 that any fears they had then were unfounded.”

AWARD WINNING ROOFERS Commercial and Industrial Roofs

10 YEARS AGO

MAY 2004 Our cover story was banker Mary Ellen Domeier, New Ulm. Profiled companies included El Serape Restaurant of St. James and Sealed Bid Marketing of Fairmont. Great quote from Mary Ellen Domeier about being named a bank president years before: “I never feared failure. It never occurred to me. I really felt I was up to the challenge. The extra yoke a woman in management often carries though, particularly when she is rare in her industry, is that she feels she must work twice as hard as anyone to prove herself.”

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15 YEARS AGO

MAY 1999 Our shared cover story featured administrators Jerry Crest and Dr. Doug Wood of Immanuel St. Joseph’s—Mayo Health System. Profiled companies were Wells Concrete (Wells) and The Dam Store (Rapidan). 20 YEARS AGO

MAY 1994 Our second issue published had only 24 pages—we began only the issue before—and featured Jones Metal Products (Mankato) and Mankato Carton (North Mankato).

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HOT STARTZ!

Very New or Re-formed Businesses or Professionals New To Our Reading Area

Old World Meats Mark Peterson of rural Lake Crystal opened Old World Meats within the last year. The start of this boutique pork and beef business had as much to do with Peterson’s varied life experiences as his personal tastes in meat. After finishing Lake Crystal High in 1999, Peterson earned bachelor’s and master’s degrees from Minnesota State Mankato in natural resource management and experiential education, respectively. He worked in the state park system at Minneopa and Flandrau State Parks about four years before deciding that line of work wasn’t for him. “Then I spent a year overseas,” 33-year-old Peterson was saying over the telephone, “working for a Swiss company and doing academic tours in Sub-Saharan Africa, covering every country from Malawi to South Africa. Every single day I was put in unforeseen, unusual situations where I had to think on my feet.” Upon arriving home, for six years, he helped outfit and guide Boundary Water trips. By then, he was eating only locally produced meat from producers using a sustainable agriculture model. Within the last year, he started his boutique pork and beef business in order to produce something unique. His beef and pork are pastured. He wanted more flavor. Today, he raises Angus and Scottish Highlands beef, and Tamworth, Large Black, and Old Spot pork, but his specialty has been Mangalitsa pork, which he markets to such fine-

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dining restaurants as Lucia’s (Minneapolis) and Heartland Restaurant (St. Paul). Said Peterson, “The Mangalitsa is often called the ‘Kobe beef’ of pork. Its meat is dark red and highly marbled, and the fat has a rich buttery flavor. I call it ‘dessert meat’ because you just can’t eat a whole plate.” Old World Meats direct markets its pork and beef to households and restaurants, with pricing from $2.50-$6.50 per pound hanging weight depending on feed, breed, and customer processing preferences. Hilltop Meat Market (beef) and Vernon Center Market (pork) process the meat. OLD WORLD MEATS Telephone: (507) 995-2436 Email: oldworldmeatsllc@gmail.com

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LAKE CRYSTAL

Comment on Hot Startz! at connectbiz.com

MANKATO

Ignition Fitness & Sports

ART SIDNER

“I was always involved in sports and physical fitness,” said 31-year-old Jason Tompkins of Ignition Fitness & Sports, which opened this year. “I started playing soccer at age five and began strength training and fitness in seventh grade. I’ve always liked competition, physically challenging activities, and being on a team.” In high school, he kicked a 57-yard field goal, and, after being named a Junior College All-American, earned a Minnesota State football scholarship. His best memory of playing for the Mavericks was kicking a game-winning field goal against Central Missouri. “After graduating in 2008, I spent three years as varsity soccer coach at St. Peter High,” he said, “and three years coaching Gustavus men’s soccer, where we won two NCAA berths.” As for his current occupation, he had been doing personal training with clients since age 18 and had continued through college. He said, “At Ignition Fitness & Sports, we cater to anyone from eight to 80. Our sports performance program geared toward athletes helps with strengthening, mobility, speed, and agility. We also have a basic membership for adults using the facility.” The business has individualized training programs for adults based on tests performed every six weeks, and has summer children’s programs. The facility has two weight rooms, Olympic lifting, kettle bells, battling ropes, TRX suspension and rip trainers, sand bags, and sleds.

He said, “What makes us unique is our 2,000 sq. ft. of artificial turf, for sprints. The turf also acts as an indoor golf driving range and an indoor soccer facility, the only one in Mankato. The soccer is quick-paced and you don’t have much time to think. You just react and play.” Membership costs range from $60 to $189 monthly. He said, “I’ve seen it firsthand with some clients—we literally have changed lives. We aren’t a gym, but a lifestyle. We help you move well, eat well, and take better care of yourself.” IGNITION FITNESS & SPORTS Telephone: (507) 479-1414 Address: 100 Sibley Parkway Web: Ignitionmankato.com

MAY/JUNE 2014

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HOT STARTZ!

Very New or Re-formed Businesses or Professionals New To Our Reading Area

Shoe-In Pro Finish Andrew Wherley of Shoe-In Pro Finish enjoyed motocross racing while growing up in Chaska. “It controlled most of my youth,” said 33-year-old Wherley in a telephone interview. “I would work in the concrete industry to pay to race on the weekends. I started racing soon as I had my driver’s licence.” Simultaneously, he grew up around concrete work. A general contractor lived down the street, and at age 14 Wherley began working for that contractor. He was friends with the contractor’s son, who also worked at the business. He graduated from Chaska High School in 1998. When starting his own concrete company in 2000, he suddenly quit “A” class racing because he “no longer could afford getting hurt,“ he said. To differentiate his business from dozens of others, he chose to specialize in decorative concrete work, which was a relatively new industry in Minnesota at the time. It involved restoration and stamped concrete work. Within the last year, he launched a line of shoes used for concrete work, from products he had licensed out from a Wisconsin company. He said, “We went to the World of Concrete Trade Show. The first product I had was a concrete finishing shoe with a flat-bottom sole for finishing and keeping dirt from your shoes inside the overshoe. Also, I brought along one pair of spiked (concrete) shoes (for epoxy work), and another pair with a tex-

tured bottom sole for doing textured concrete. We had such a big response that we decided to go to market with all three products.” Wherley said he underestimated the size of the market. Business has been going extremely well. He said the concrete finishing shoes retail for about $40, the spiked shoes for $80 (which he called the most user-friendly product on the market), and the textured-bottom shoes $90. He said his new company was on track to sell about 20,000 pair of shoes combined in 2014. SHOE-IN PRO FINISH Address: 1005 N. Commerce Web: shoeinprofinish.com

To be considered for one of three spots in the July Hot Startz!, email the editor at editor@connectbiz.com. Businesses considered must have started—or changed greatly in form—within one year of our publishing date. Professionals chosen must be new to our reading area.

EXPERIENCE ISN’T GIVEN IT’S EARNED CONGRATS TO OUR NEWEST PARTNER!

Congratulations to Heather Thielges on her promotion to partner. Her experience and knowledge with business valuation, litigation support and tax services are a great asset to Eide Bailly and our clients. Call or visit our website to learn more.

EXPERIENCE THE EIDE BAILLY DIFFERENCE 46

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507.387.6031 | www.eidebailly.com

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LE SUEUR

PRESS RELEASES

To submit a press release for publication:

Email: editor@connectbiz.com Fax: 507-232-3373

Blue Earth From the Chamber: Eunoia Family Resource Center opened an office with Heidi Schiltz, M.S., a Licensed Professional Clinical Counselor.

Fairmont Wayne Kahler was elected to the Profinium board of directors. From the Chamber: New members include Fairmont Chiropractic & Acupuncture Health Care, Dr. Timothy Hamp and Serenade’s By The Lake Steakhouse & Grill, Sarah and Nate Brown; Krahmer & Shaffer, Ltd. hired Brandon J. Edmundson as associate attorney; Wesley Pruett, ACC, of HR Advisors, was recertified as an

FAIRMONT

City of Fairmont Minnesota American Council of Engineering Companies gave the City of Fairmont an award on Lair Road Bridge Improvements, designed by Bolton & Menk.

Serving Southern Minnesota For Over 50 years

Associate Certified Coach by the International Coach Federation; New York Life Insurance agent Doug Forstrom is 2013 Minnesota Associate of the Year.

Your Premier Business Law Resource Mankato Office: 507.625.2525 | Madelia Office: 507.642.3141

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Lake Crystal Sandy Elkins is customer service manager at Crysteel Truck Bodies & Equipment International. From the Chamber: New members include Preferred Printing of Madelia and The Bank Bar & Grill, Josh Voges and Jessica Brown, owners.

Madelia New members include: Bergeman Construction, Bill’s Electric, Edward JonesGary Walters, Formal Wear Unlimited, Gappa Electric, Mankato Area Classical Performing Artists, Pietsch Construction, Quick Shine Car Wash, The 609 Barn Boutique, St. Mary’s School/ Noah’s Ark Daycare, Watkins Products, Wildtree and Veteran Enterprises; Patrick Casey is partner at Farrish Johnson Law Office; new businesses Casey’s General Store and Furniture Clinic were welcomed with a ribbon-cutting ceremony; Jane Piepgras is the new city administrator; the

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Commercial Industrial Agricultural Properties

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www.greenerworldsolutions.com MAY/JUNE 2014

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PRESS RELEASES

Think differently about work. Think Manpower.

Chamber received a grant for Park Days Blues Festival from the Prairie Lakes Regional Arts Council.

Mankato

Mankato 507.345.4201 us.manpower.com

Laurie Danberry, Heintz Toyota, received the 2013 Silver Level Sales Society award and the Toyota S.T.A.R.S. award from Toyota Motor Sales USA. Swanson Hinsch & Company senior accountant Alexander Swanson achieved CPA designation. Habib Sadaka, American Mortgage & Equity Consultants, was named a Minnesota Housing Top Producing Loan Officer at the Platinum Level for 2013. Doug Easterday is AmericInn Hotel and Conference Center front desk manager. CENTURY 21 received the Gold Medallion Award and the Quality Service Pinnacle Award from the CENTURY 21 Real Estate Corporation; Deb Atwood and her home selling team received the Centurion Team Award and Quality Service Team

MANKATO

Enventis 507.380.6033

107 EAST CHERRY ST., MANKATO, MN 56001 LANGEMEIERARCHITECTS.COM Q Architecture Q Planning Q Adaptive Reuse

Enventis Foundation awarded $131,000 in 40 grants to nonprofit organizations across the company’s service area.

Award; Dan Thielges earned the Master Ruby Award and the Quality Service Pinnacle Producer Award; Peg Ganey, Ellen Gruhot, and Trent VanOrt received the Multi-Million Dollar Producer Award and the 2013 CENTURY 21 Quality Service Pinnacle Producer Award; and Jeff Kaul earned the Quality Service Producer Award. Vanderberg Clean owners Joshua and Becca Vanderberg were named Minnesota Young Entrepreneur of the Year by the U.S. Small Business Administration. Linda Koerselman was elected Eide Bailly board chair. Sander Ludeman is one of 1,003 out of nearly 12,000 Edward Jones financial advisors to qualify for the firm’s 2014 Financial Advisors Leaders Conference. Enventis achieved the Cisco Master Cloud Builder Specialization, with capabilities to build and deploy cloud-ready integrated infrastructure. The non-profit Feeding Our Communities Partners will receive a $1,000 grant from the Darden Restaurants Foundation. Habitat for Humanity’s ReStore expansion capital campaign is a beneficiary of the Grand Old Opry Mankato show. HickoryTech Corporation declared a quarterly dividend of 15 cents per share of HickoryTech common stock, payable on June 5 to shareholders of record May 15. For the sixth year, Jerry’s Body Shop took part in Recycled Rides, a nationwide vehicle donation program. Jordan Sands Community Fund created a new scholarship program with South

Incentives for Job Creation SHOVEL VEL READY DY LOTS S

New Ulm Economic Development Corporation

507-233-4305 • www.nuedc.com nuedc@newulmtel.net

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MAY/JUNE 2014

MANKATO

Pathstone Living Pinnacle Quality Insight, a national customer satisfaction firm, awarded Ecumen Pathstone Living a Pinnacle Customer Experience Award based on service in ten areas. Central College-North Mankato Campus Foundation for the Mechatronics Engineering Technology program. Lime Valley Advertising received five Service Industry Advertising Awards for communication excellence. Marco received the 2014 Pro-Tech Service Excellence Award from Konica Minolta Business Solutions U.S.A.; and Ann McCann, Marco’s IT/Voice Sales Manager, received ImageSource Magazine’s 2014 Outstanding Trailblazer In The Channel Award. Mayo Clinic Health System will be the presenting sponsor of the Mankato Marathon for the next five years. Brent Pattison, Northwestern MutualMankato, received his Chartered Financial Consultant designation. Michael Nolan, director of the Small Business Development Center, Minnesota State Mankato, is a Finance & Commerce Progress Minnesota 2014 honoree. Minnesota State Mankato College of Business alumna Brittany Kruse was a

2013 Elijah Watt Sells award recipient, placing her in the top 0.0006 percent of people who sat for the 2013 CPA exam. David T. Knopick joined ProGrowth Bank as senior vice president-commercial lending. Stinson Leonard Street elected as partners Castor Armesto, Emmanuel Ayuk, Edwin Caldie, James Cronin, Andrew Davis, Thomas Dowling, Katherine Moerke, Craig Morgan, Scott Smalley and Cate Heaven Young. United Prairie Bank mortgage lender Jessica Wheelock is a “Top Producing Mortgage Loan Officer, Silver Level,” with the Minnesota Housing Finance Agency. From Greater Mankato Growth: New members include Ground Works Backhoe Service and Performance Excellence Network; job numbers in the Mankato-North Mankato Metropolitan Statistical Area were at an all-time high in January with 54,504 jobs; Visit Mankato launched the Mankato Sports Commission to boost sports tourism in the community; Trudie Gustafson is GMG vice president; Leadercast, a live broadcast of nine world-renowned leaders will be at the South Central College Conference Center on May 9; GMG Director of Government & Institutional Affairs Patrick Baker was appointed to the 2014 U.S. Highway Partnership Board of Directors; GMG’s new video, “Greater Mankato: The Way to Grow,” was released; and Volunteer of the Year recipients include Jesse Schott (GMG), Joe DeLory (Visit Mankato), and Malda Farnham (City Center Partnership).

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Supporting the businesses who make us a special place to visit for a weekend, or a lifetime. See our historical downtown, do some shopping – open your own business! We’ll help you make it your home.

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newulm.com

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PRESS RELEASES

North Mankato

Sleepy Eye

St. Peter

The Greeting Card Association named Carlson Craft a finalist from among 900 entries for the LOUIE Awards. The Minnesota Association of SkillsUSA named South Central College instructor Todd Huxford its Post-Secondary Advisor of the Year.

From the Chamber: New members include Mages Land Co. & Auction Service (Deb Fischer, Realtor), Goetting Ruddy (Gwyn Goettig Ruddy, CPA), City Limit Lounge (Dale and Robin Schottle, owners,) and S&J Construction and Masonry (Steve and Josh Krebs).

St. Peter Community Education and Capstone Literacy Center will offer literacy remediation classes to parents and teachers starting in May.

New Ulm

St. James

AMPI reported sales of $1.8 billion and earnings of $7.5 million in 2013. From the Chamber: New members include American Lung Association (Mankato) and Visiting Angels Home Care (Mankato); and the Chamber of Commerce will host a Leadercast event May 9 on the Martin Luther College Campus.

From the Chamber: Nic Ciale is a new reporter for the St. James Plaindealer; Dianelle Wilmes is the new ambulatory/ inpatient nurse manager at Mayo Clinic Health System; Tabitha Johnson and Jennifer Kathman are new owners of Fairy Tale Endings; and the Thrivent Financial House of Representatives opened recently.

From the Chamber: New members include South Central Minnesota SCORE Chapter 710; the Chamber made the following presentations: a First Dollar Award to Good News Magazine’s new owners, Antonio and Sheri Wegner and to Studio 28 Floral Design owner Mandi Flitsch, a Progress Award to Eide Bailly, and a Roots Award to The S.H.O.P.’s Keith Johnson and Brian Harguth; Justin Below as named Outstanding Young Farmer, and the Brent Possin family was named Farm Family of the Year.

Waseca

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NATIONAL OPINION

Visit a high school, any high school in America, and ask students about their summer plans. Few of them will be looking for a job. With the teen unemployment rate over 20 percent, even fewer of them will be able to find one. Back in 1974 and 1984, and even recently as 1994, about 55 percent of high school students sought employment. In 2004, the percentage declined to 44 percent. Now, it is about 33 percent. Times have changed, and the higher minimum wage does not help. We are condemning these teenagers to unemployed summers with the current $7.25 hourly minimum wage, and raising the minimum wage to $10.10 will make it even harder. In a global economy, where competitive countries battle for business with well-trained, disciplined, experienced employees, America is putting itself at a disadvantage by keeping young Americans off the first rung of the career ladder. Make no mistake-few workers stay at the minimum wage level very long. Only three percent of American workers earn the minimum wage. The other 97 percent make more, not because of government regulation, but because that is the only way that employers can persuade them to stay. In a March edition of the New York Times, University of California (Berkeley) professors Michael Reich and Ken Jacobs praised cities and local governments for enacting their own higher minimum wage laws. Reich and Jacobs have concluded that the effects of the $13 per hour minimum compensation package in San Francisco are “strong and positive.” There is nothing wrong with different localities adding to their own fiscal problems by raising their minimum wages above the federal level as long as they are prepared to live with the consequences. If the wages cause residents and businesses to move out of state, reducing tax revenue and increasing unemployment rates and pension liabilities,

cities have only themselves to blame. Of the five states with the lowest unemployment rates in January (North Dakota, Nebraska, South Dakota, Utah, and Vermont), ranging from 2.6 percent in North Dakota to 4 percent in Vermont, only one, Vermont, has a minimum wage higher than the federal minimum wage. In January the national unemployment rate was 6.7 percent. Of the five states with the highest unemployment rates (Rhode Island, Nevada, Illinois, California, and Michigan), ranging from 9.2 percent in Rhode Island to 7.8 percent in Michigan, all have state minimum wage laws higher than the federal Diana wage law. California’s Furchtgott-Roth unemployment was 8.1 percent in January, the fourth highest unemployment rate in America. Internal Revenue Service data compiled by the non-partisan Tax Foundation reveal that from 2000-10 California lost a net $29.4 billion in adjusted gross income and 1.2 million residents to other states. Despite Reich’s and Jacobs’s assurance that “none of the dire predictions of employment loss have come to pass” in San Francisco, the state of California is in poor fiscal shape. Although research published by Reich, together with University of Massachusetts (Amherst) economist Arindrajit Dube and University of North Carolina economist T. William Lester, concludes raising the minimum wage has no employment effect, other economists disagree. University of California (Irvine) professor David Neumark, in a paper in the Industrial and Labor Relations Review, writes that the strongest evidence linking unemployment to increases in the minimum wage comes from teenagers and other low-skill groups, without regard to industry. A February Congressional Budget Office study shows 500,000 low-skilled people could lose their jobs by 2016 due to an increase in the minimum wage to $10.10 from $7.25. Earlier this month 500 economists, including Nobel laureates Vernon Smith, Eugene Fama, Robert Lucas, and Edward Prescott, signed a letter opposing increases

in the federal minimum wage. “Although increasing wages through legislative action may sound like a great idea, poverty is a serious, complex issue that demands a comprehensive and thoughtful solution that targets those Americans actually in need,” they wrote. If you were running a business, and the minimum wage rose from $7.25 to $10.10, your first step would be to lay off your least-skilled workers. Future workers would have to produce more. You might do less on-the-job training and hire workers who already have experience. One reason academics find little overall change in employment when the minimum wage is raised is that only three percent of employed workers make minimum wage. That is small change in a pool of 138 million non-farm payroll workers. Further, even if total employment shows little change when minimum wages rise, the skill mix of employees can change. That is, employers can hire a similar number of workers, but substitute high-skill for low-skill employees. Employment levels may remain the same, but evidence shows more highskill workers and fewer low-skill workers are hired. This leaves low-skill workers and teens with no options except unemployment. This is not where America wants to be. Young people are dropping out of the workforce, discouraged by lack of job opportunities. In 2013, 55 percent of workers aged 16-24 were participating in the labor force, compared to 62 percent in 2003, a 10-year decline of 7 percentage points. If young people were spending more time in school, lower labor force participation would equal an investment in skills for future high-paying jobs. That would be good for young people, and good for the economy. But the percentage of 16- to 24-year-olds enrolled in high school, college, or university has barely changed over the past decade, rising from 56 percent to 56.3 percent. The record is clear. States that choose not to raise their wages above the federal minimum have lower unemployment rates and healthier economies. Yes, Professors Reich and Jacobs, state and local governments are free to increase their minimum wages. But who wants to be like California? Diana Furchtgott-Roth, former chief economist of the U.S. Department of Labor, is a senior fellow at the Manhattan Institute for Policy Research. This column first appeared in RealClearMarkets.com.

MAY/JUNE 2014

CONNECT Business Magazine

inspiration strikes.

where land and sea collide,

NEW Galloway™ Coastal Collection™

Introducing Galloway™ Galloway seems to churn and move as the changing tide. Visit the Floor to Ceiling showroom to catch a glimpse of it and more than 100 natural stone surface designs.

224 Saint andrews Drive, Mankato I ftcmankato.com