Sept-Oct 2012 by Connect Business Magazine

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Call for Nominations

JUDGED BY:

10TH A N N U A L

Business Person of the Year Award Nominate a colleague and see them featured on the cover of Connect Business Magazineâ&#x20AC;&#x2122;s January 2013 issue. All nominations are confidential. PREVIOUS WINNERS

2004: Lorin Krueger

2005: Milt Toratti

2006: Bob Weerts

2007: Roxie Mell-Brandts

2008: Jeff Thom

Winland Electronics

Riverbend Center for Enterprise Development

Blue Valley Sod

Jensen Transport

All American Foods

Nominate at connectbiz.com/bpoy IT’S EASY TO NOMINATE! Go to connectbiz.com/bpoy and fill out the entry form by September 28. Three important rules: You can’t nominate yourself; the nominated person must work and live in either Blue Earth, Le Sueur, Martin, Brown, Watonwan, Waseca, Faribault, Sibley or Nicollet County; and the nominated person must not have appeared in a major Connect Business Magazine feature from 2010-12.

NOMINATIONS OPEN SEPT 1 through SEPT 28 IN ASSOCIATION WITH:

How the winner is chosen: Connect Business Magazine will learn more about the nominees, and forward the information on to our judges, who are Minnesota State University business professors. Each judge will have up to three votes: five points will be awarded for their first choice, three for second, and one for third. The top votegetter will appear on our January 2013 cover, and the two runners-up will appear inside the magazine. Judges will take into consideration the person’s character, leadership abilities, community involvement, and business results. Business persons from any business — large or small, profit or nonprofit, large town or small — are eligible.

NOMINATE A COLLEAGUE TO APPEAR ON THE JANUARY 2013 COVER!

Nominate at connectbiz.com/bpoy

2009: John Finke

2010: Pamela J. Year

2011: John Roise

2012: Dan & Angie Bastian

2013: _____________

HickoryTech

MRCI WorkSource

Lindsay Window & Door

Angie's Kettle Corn

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SEPTEMBER/OCTOBER 2012

Contents

THE MAGAZINE FOR GROWING BUSINESSES IN SOUTHERN MINNESOTA

STAFF & CONTRIBUTORS Publisher: Jeffry Irish

COVER STORY

Rapid Response Team

Editor: Daniel J. Vance

Art Director/Staff Photographer: Kris Kathmann

Entrepreneurs Kevin and Kathy Finstad of New Ulm engage and encapture business opportunity, not unlike the way their River View Sanitation trucks engage and encapture residential New Ulm garbage. They came, they saw, and they conquer—opportunity.

Interim Advertising Manager: Daniel J. Vance Contributing Photographers: Jeff Silker, Art Sidner Contributing Writers: Carlienne Frisch, Daniel Mitchell Production: Becky Wagner Kelly Hanson Josh Swanson

PROFILES

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8,500 for September/October 2012 Published bimonthly

CORRESPONDENCE Send press releases and other correspondence: c/o Editor, Connect Business Magazine P.O. Box 452, Nicollet, MN 56074 E-mail: editor@connectbiz.com (please place press releases in email body) Web: www.connectbiz.com

Phone: 507.232.3463 Fax: 507.232.3373

ADVERTISING Call: (507) 232-3463

Editor’s Letter Off-The-Cuff

6 40

ABOUT CONNECT Locally owned Connect Business Magazine has ‘connected’ southern Minnesota businesses since 1994 through features, interviews, news and advertising.

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EDITOR’S LETTER

Nominations Open Vroom. Vroom. Here we go years without featuring a stock car driver and this issue we have two. It was coincidental and completely fun, if for no other reasons for the latter than being able to experience with the drivers their circular tales of glory and vicariously feeling their bumps and bruises. Our co-cover story, Kevin Finstad of New Ulm, raced stock cars—past tense—as does Damon Haslip of Powder Werks in Lake Crystal—present tense. Besides Kevin and Kathy Finstad, and up and coming Powder Werks, we feature this issue pork producer Compart Family Farms, which has been going hog wild internationally out of Nicollet. Also this issue, we open nominations for our annual Business Person of the Year Awards, which this year becomes the Tenth Annual Connect Business Magazine/KEYC-TV Business Person of the Year Awards. We appreciate KEYC-TV’s partnership. (See our combined ad on pages 2-3.) Last year, Dan and Angie Bastian of Angie’s Kettle Corn popped up to win. Nominations will be accepted through Friday September 28 at 5:00 p.m. You can nominate a friend or colleague by filling in our entry form at connectbiz.com/bpoy. Our judges—Minnesota State University College of Business professors—consider each nominee’s business results, character, leadership abilities, and community involvement. Businesspersons from businesses small or large, profit or nonprofit, always have been eligible. Three basic rules: You can’t nominate yourself; your nominee must work and live in the counties of Nicollet, Sibley, Faribault, Waseca, Watonwan, Brown, Martin, Le Sueur or Blue Earth; and she/he must not have appeared in a Connect Business Magazine feature in 2010-12. Ladies and gentlemen! Start your engines and nominate! Sursum ad summum,

Daniel J. Vance Editor

OUTSTANDING

By Daniel J. Vance

and s r e h e gat een. l p u m co erate gr l U l New es to gen a i r u rene ortuniti p e r t En opp s t c pa com

Photo by Jeff Silker

ntrepreneurs Kevin and Kathy Finstad of New Ulm engage and encapture business opportunity, not unlike the way their River View Sanitation trucks engage and encapture residential New Ulm garbage. They came, they saw, and they conquer—opportunity. Somehow, they compact 30 hours of job, business, and community into a 24-hour day. They co-own and -manage regional onsite shredder RVS Shredding, River View Sanitation, Finstad Realty and Auctioneering, Finstad’s Oak Haven Campground, and the latter’s event center. Remarkably, they built up nearly all their businesses while working full-time for someone else: 54-year-old Kevin from 1979-2006 was head of maintenance of New Ulm manufacturer Firmenich; and 56-year-old Kathy since 1977 has been a registered nurse and now trauma coordinator of New Ulm Medical Center. And they accomplished all this while actively involved in community life, with Kevin currently as a New Ulm volunteer firefighter 33 years and he and Kathy each former emergency medical technicians more than 20 years. Kevin has served as president of New Ulm’s Professional Referral Organization and been a local green advocate, Kathy has been a Putting Green board member, and together they generously offer their event center free to certain nonprofits. Oh, and Kevin has been a private pilot and stock car racer, too. Though not employing many—12 full-timers and a regular MRCI crew—their companies directly affect the quality of life of many thousands of people and the operations of hundreds of businesses each week. RVS Shredding covers every nook and cranny of our reading area and River View Sanitation serves most homes and businesses in eastern Brown County and some beyond. Astonishingly, the Finstads’ only business plan has been to respond rapidly, and their only approach has been to live in the moment. continued > SEPTEMBER/OCTOBER 2012

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The McCleod County Chronicle reported your actions on the night of March 7, 2009, went “above and beyond what is expected of the general public.” What happened? Kathy: We had been at my mom and dad’s near St. Cloud. I usually do the night driving, and as we were heading on US 15 south of Hutchinson near Lake Marion about 9:30 p.m. I saw a car in my lane heading toward us. As the lights drew closer, I swerved off the side of the road onto the shoulder to avoid a collision. The driver continued driving north in the southbound lane. Your heart was beating pretty fast. Kathy: Yes, and Kevin said to me, “Turn around, we need to stop him.” So I wheeled around, not really knowing what we were going to do except somehow head him off before he hurt someone. Kevin called 911. We drove over a knoll after him and saw he had struck someone. The wreckage was smoking in the middle of the road and another car was stopped behind it. We jumped out to check on the person hit—she was young and very shaken up. We took her to the side of the road. Kevin said he was going after the driver and jumped in our Jeep in pursuit. Then I called 911 and heard sirens. Kevin and I both had been in emergency medical services more than 20 years apiece—and I was an emergency room nurse. Even so, it was a little daunting being in the middle of a dark highway with all that wreckage. What did you do then? Kevin: I could see an antifreeze trail down the highway. The driver had hit the girl’s car with a glancing blow and three-quarters of a mile down the highway I saw his empty car steaming. It was a snowy, moonlit night, and on one side of the road was an open field and on the other, cattails. I swung out toward the cattails and could see him way out beyond running and hunched down in a field trying to hide. I hollered to tell him to get back over here or we were going to get him, but at that point, there was no “we’re.” It was only me. Then he started walking back and stumbled down face first. I was a

CONNECT Business Magazine

SEPTEMBER/OCTOBER 2012

Kevin & Kathy Finstad

little less intimidated then, figuring he had been drinking. When he stood again and reached the edge of the ditch, I grabbed him by the arm and told him law enforcement was coming. Shortly after, when the sheriff arrived, the guy wouldn’t get into the squad car, so I stayed to assist the sheriff. Once the sheriff mentioned using a “taser,” the driver went into the police car peacefully.

“We can think on our feet. It’s part of our personalities. While being an EMT, we have worked with patients who think we are being pushy, but with our training you don’t wait to make a decision because often you can’t.”—Kevin Finstad. Kathy, your present position at New Ulm Medical Center is being a registered nurse and the trauma coordinator of the emergency department. And Kevin, you have been a New Ulm firefighter over 30 years. You both were EMTs for more than 20 years. How has your emergency training helped what you do in business? Kevin: We can think on our feet. It’s part of our personalities. While being an EMT, we have worked with patients who think we are being pushy, but with our training you don’t wait to make a decision because often you can’t. Have you had opportunities in business when you have to make quick, major business decisions? Kathy: This is what we’ve done in business. SEPTEMBER/OCTOBER 2012

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Rapid Response Team

I don’t think any business we’ve started has been something we’ve sat on and put a particular plan in motion. Our recycling contract (with River View Sanitation) for the eastern half of Brown County, for example, was awarded September 2010 and we had to start three months later. The building we needed to start in didn’t even exist when we received the contract. So you were putting a bid on a contract for recycling and didn’t have a building for it? Kathy: We didn’t have anything. We didn’t have a recycling building or trucks. We just knew we had to act fast and we could do everything else later. Kevin: We had never done recycling, never visited a facility, had no recycling employees, equipment or trucks, and didn’t know how to do it. After receiving the contract, we had three months to make it work. We did go to a construction company

before the bid saying if we won we had to have the building built by January 1. I was at the State Fair when Brown County telephoned saying we had won the contract. Let’s start back at the beginning. Tell me about your backgrounds. Kathy: I’m originally from Minneapolis. My mother is a registered nurse and my father worked for the City of Minneapolis sanitation department. I graduated from Roosevelt High in 1974 and I always knew I wanted to be a nurse. I applied to St. Cloud Hospital School of Nursing and at age 17 went to nursing school. After graduating I was hired at Loretto Hospital, now New Ulm Medical Center. This June 15 marked my thirty-fifth year. Both my parents are proud I followed in their footsteps becoming a nurse and running a sanitation company. Kevin: There is no part of running the sanitation business she can’t do except she doesn’t have her Class B license. But as for

running the equipment and trucks, she jumps in. She doesn’t back down. What are the commonalities between running a sanitation company and being a nurse? Kathy: At the hospital, I am the clinical/trauma coordinator of the emergency department, which translates to being the assistant head nurse. I have learned how to handle patient and employee issues. Even though I’m a staff nurse, I also have a leadership role. In leadership, you need to see the importance and viewpoints of both management and employees. My knowledge base spills over to our business, where I have to do time sheets, set up offices, and obtain the equipment employees need to do their job. That’s similar to what I do in the hospital emergency room—making sure we have all the right equipment to do our job. Both industries are heavily regulated.

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Kevin & Kathy Finstad | River Valley Sanitation/RVS Shredding

What’s your background, Kevin? Kevin: I was raised on a 600-acre crop and livestock farm south of New Ulm and graduated from New Ulm High in 1976. I was in Future Farmers of America, and was president of our local chapter, district president, and state vice president. When I became old enough to farm full-time, my dad was too young—so I had to move on. I worked in a New Ulm hospital as an orderly and for DM&E. I also became an emergency medical technician (EMT) after my dad and I had an experience coming upon a car accident involving a grain truck way out in the country. We didn’t have the knowledge to do anything. Until the ambulance came 20 minutes later, we could do nothing but hear their moans and groans for help. In 1979 at age 21, I began working for Borden Foods, which eventually was purchased by Firmenich, a Swiss-owned company manufacturing flavors and fragrances. I worked there full-

time until 2006 as head of maintenance. What did you take out of that job? Kevin: In part, I did purchasing, set up, and equipment maintenance. Because I was an EMT, I was in charge of plant safety and environmental issues and regarding that had to fly out to Firmenich in New Jersey for meetings. Though everybody else there had a college degree, I didn’t. My street smarts made up for it. Back then, if you could prove yourself, you didn’t need a piece of paper. I have always been more a technical, hands-on person. How did you two meet? Kathy: Through working at the hospital. I had been married and divorced—and so had he. We had known each other many years and married in 1995. I have two daughters and he has two sons. What attracted you to each other? Kevin: Back then, if having a critical

THE ESSENTIALS

River Valley Sanitation/ RVS Shredding Address: 16188 County Rd 29 New Ulm, MN 56073 Web: Riverviewsanitation.com Telephone: 507-354-5355

patient, the hospital would send a nurse along in the ambulance with us to help transfer the patient to Rochester. EMTs are basic life support and nurses are advanced life support and bring drugs and meds. I worked six out of seven days on the 6 p.m. to 6 a.m. ambulance shift for the hospital. So we met by association. What particular traits of hers appealed to you? Kevin: She never backed down from a challenge. On the ambulance, and because

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of her training, she could see things happening with a patient we couldn’t see. And later, she always backed my crazy business ideas. Many of these businesses she didn’t know about until almost the last minute and yet she stood right behind me and helped make them work. What were some of these crazy ideas? Kevin: First, I received my private pilot license in 1981. I still have one, although I haven’t flown for a while because I’m too busy. In 1996, I quit flying as a hobby to start stock car racing at Arlington and Redwood Falls. I later quit racing in 2001 and sold my stock car to buy a garbage truck and start a sanitation company. What did you like about racing? Kevin: There is no video game that can replace the feeling of rocks flying at you, dust and dirt, the noise, and the feeling of hunting down a competitor on the racetrack. It doesn’t matter where you are on the racetrack—in the back of the pack or leading—you have a competitor nearby. It’s a feeling to this day I wish I could have once in a while. We now sponsor two stock cars and once a year they let me have a test run. If having never raced, you can’t understand the feeling. I started in the Bomber class at Redwood Falls—just because it was a cheap class to enter. One night, the little track was rained out and they had us race on the bigger track. Kathy said I would never go back to the little track again. I didn’t. Wait a minute. Kathy, you’re an emergency room nurse and you have this husband who likes to race stock cars. No doubt you’ve seen people

Kevin & Kathy Finstad

coming in banged up from driving. Kathy: I liked watching others, but was nervous when he was out there, especially when he entered the faster classes. I can’t say I was sad to see him quit. Name another crazy idea? Kevin: We started the campground in 1992. We lived outside New Ulm on a former 100-site mobile home village. Kathy’s dad and I were remodeling our house while Kathy was working the 3 to 11 shift. Her dad and I were out for supper one night and I talked about starting a campground. Heritagefest was big then and they always had campers parking on the streets when the state park filled. Our campground started as a two-weekend event tied to Heritagefest, but then we began hosting groups of ten to fifteen campers on weekends and it developed from there. Kathy, is it your job to test his ideas, talk him out of them or patch him up later? Kathy: (Laughter.) I challenge the idea if I’m not a true believer. He knows he’s going to hear me say my piece about whether it’s good or bad. But in the end I always try it and stand behind him—because that’s what you do. Have you been able to talk him out of anything? Kathy: Pretty much not. He didn’t tell me about the campground until four weeks before it began. We had to jump through (regulatory) hoops and get licensed. It started as a way to make extra money to take our children to Florida. Kevin: We’re licensed for 40 sites. We put up a building with seating for 100 and thought it would be used mostly for campers playing cards and having potluck suppers. But the building quickly developed into a place for graduations, family reunions, and wedding receptions. Now the building is busier as an event center than for campground functions. A couple times this year (through June) we’ve hosted events there every day from Thursday through Sunday. (continued next page)

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What came next? Kevin: In July 2002, we started River View Sanitation. Again, I sold my stock car to buy our first garbage truck and we hired two full-time employees. A few years before, my friend Mark Firle, who owned Firle’s Funeral Home, had wanted me to join him in his funeral business. My dad said then I should be in the funeral or garbage businesses because those businesses always have customers. I certainly missed an opportunity joining Mark in the funeral home business—he’s retired in Texas now—but when Brand Sanitation in New Ulm came up for sale, we looked at starting a sanitation company. You sold your stock car, bought a garbage truck, and started with 160 customers, which isn’t a lot. Kevin: Looking back now, it was a foolish—yet gutsy—move. We put our necks way out. We bought one truck and guaranteed two people employment while having only 160 customers in the hope of more customers coming on. If you build it and they come, you’re fine; but if you build it and they don’t, you’re not. Kathy: Back then, we were making money at camping, but had to move around our finances considerably to pay two people full-time. And then a large national company bought out Brand Sanitation—and that saved you? Kevin: We started River View Sanitation in 2002. We both had full-time jobs, and had one truck and 160 customers. We struggled because customers were faithful to Brand Sanitation, who had been here many years. They were trying to sell out but we couldn’t come to an agreement with them. Then a large national company purchased their business. We had been in business six months with 160 customers when it happened and knew we couldn’t financially last

Rapid Response Team

Books For Africa In 2011, River View Sanitation co-owner Kevin Finstad received a telephone call from District 88 (New Ulm Public Schools) Facility Director Scott Hogan asking what to do with several tons of old and discarded Jefferson Elementary books. The books couldn’t be recycled because of having hard covers. Searching online, Finstad found a home for them with Books for Africa, a Minnesota-grown nonprofit, which collects, ships, and distributes books to help Africans in 45 countries gain literacy skills. 16

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BOLD DESIGN

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Then when the large company bought out Brand Sanitation, we gained 900 of their 1,200 residential customers in two weeks. Talk about the telephone ringing off the hook. People decided to stay local after they sold their business.

IT’S IN THE DETAILS

Kevin & Kathy Finstad | River Valley Sanitation/RVS Shredding

SEPTEMBER/OCTOBER 2012

CONNECT Business Magazine

PLANNING INTERIORS | ARCHITECTURE | ENGINEERING |

I have to stop you right here. Let’s just take the year 2005, for example. Kevin, that year, you were an auctioneer, Realtor, full-time head of maintenance at Firmenich, a volunteer firefighter, a campgrounds and event center coowner, and co-owner of a sanitation company. In addition,

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When did your auctioneering and real estate begin? Kevin: In a way, that began in 1981. My first wife’s father was a lapidary (precious and semi-precious stone) auctioneer who ran a Fairmont auction house. I went to auctioneer school in Mason City and eventually hooked up with Ferdie Krenz from Sleepy Eye. His son Larry and I are now partners. I earned my real estate brokers license in 2003 and started Finstad Realty and Auctioneering. Kathy earned her license in 2004. We got into real estate because in auctioneering, when you list someone’s household goods, the first thing they usually tell you is they are moving because they want to sell their home. There was an opportunity to sell a home nearly every time we listed an auction. We have slowed down on realty and auctioneering because of having to take the time to get our recycling center fine-tuned. I’m now diverting most of our realty and auctioneering to my partner Larry, but until a couple years ago, we listed the auction, listed their home, and picked up the customer’s garbage for their old home. A customer could make one telephone call and have everything done.

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past December. Then when the large company bought out Brand Sanitation, we gained 900 of their 1,200 residential customers in two weeks. Talk about the telephone ringing off the hook. People decided to stay local after they sold their business. We started a roll-off division in 2004 because we got so many telephone calls for commercial dumpsters. (Now the company has 450 commercial accounts.)

Rapid Response Team

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Identity theft and fraud is a huge problem. If you throw out confidential information in your trash and you’re an accountant, for instance, and someone finds that information, you can be held liable. No one can take that chance. —Kathy Finstad. Kathy, you were a registered nurse, EMT, Realtor, and co-owner of the campground and sanitation company. Kathy: Pretty much, yes. (Laughter.) Kevin: I was an EMT that year, too. Yeah, we were busy. Everything was a challenge.

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What’s next on your “crazy” idea list? Kevin: The shredding division started in July 2007. Our accountant asked us when we were going to start a shredding business because he was having his done by a Minneapolis company that charged the heck out of him. We had never given shredding any thought. So I educated myself on the shredding business, and bought a stationary shredder and a shredding van. We thought we could pick the paper up at their business site and shred it at ours. Doing it that way lasted exactly 30 days. Everyone wanted onsite shredding. Here we had already spent $5,000 on a stationary shredder and another $15,000 on the shredding truck and suddenly they were both useless. So we searched the Internet and bought a new onsite shredding truck out East for $70,000. I flew out and drove it back. Why wasn’t anyone else in this region doing it? Kathy: There was no one local. Kevin: We now have almost 200 shredding accounts including accountants and banks and attorneys—even law enforcement and 3M. Identity theft and fraud is a huge problem. If you throw out confidential information in your trash and you’re an accountant, for instance, and someone finds that information, you can be held liable. No one can take that chance. We pick up monthly, biweekly, weekly or will call. A customer storing their records in a basement for 20 years can call us to do a purge. One very large business had us purge several semi loads of records dating to the 1950s. Let me guess: You had never done shredding before. Kevin: We had never done shredding before, had to learn it, and

Kevin & Kathy Finstad | River Valley Sanitation/RVS Shredding

learn it quickly. Kathy: This is another example of our thinking on our feet and being able to react to developing situations. It’s what we do best. Shredding and recycling fit hand in glove. We shred, bale, and market the shredded paper—because it’s paper. Kevin: You can recycle paper 14 times before the fibers are too short to use. What was next? Kevin: In mid 2009, we completed our new office building and in late 2009, we built a 9,000 sq. ft. recycling center. Before that, our River View Sanitation offices had been inside our Finstad’s Oak Haven Campground building. Our secretaries were cross-trained to park campers and answer calls for sanitation at the same time. The recycling business started January 2010 when we began the contract for the eastern half of Brown County. Besides being local, what other advantages do you feel you have in competing against such a large national company? Kathy: New Ulm is a free enterprise zone. A resident can hire anyone for residential or commercial garbage pickup. The national company is licensed to do business here and so are we. At first, we had to win some local people over, who doubted us and didn’t believe we could make it through the first two years. So your truck goes down a street of ten homes, let’s say, and picks up at six, and the other company picks

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Getting to know you:

Kevin & Kathy Finstad

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Education: Kathy, Minneapolis Roosevelt High, ’74, and St. Cloud Hospital School of Nursing (became a registered nurse), ‘77; and Kevin, New Ulm High, ’76. Organizational involvement: Kathy (Minnesota Nurses Association); Kevin (Professional Referral Organization and New Ulm Fire Department (33 years)); Both (Farm Bureau and New Ulm Area Chamber of Commerce).

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up at the other four homes? Kevin: It keeps us competitive. In many cities, only one hauler has the city contract. Fewer trucks are on the streets there, but those people often pay higher rates. Competition here in New Ulm keeps everyone honest. For sanitation, we have the contract for eastern Brown County, which includes New Ulm, Searles, Essig, St. George, Lafayette, Klossner, Courtland, and Nicollet. Nicollet has a city contract through LJP, but we can do commercial there. In all, we have about 460 commercial accounts. Kathy: With our roll-off services we go as far as Mankato and Fairmont. Kevin: And we have a contract through another company for the New Ulm and Fairmont Walmart stores. PHOTO•GRAPHIC

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What else do you do? Kevin: I was raised on a farm. My neighbor came over one afternoon in 2005 and said he wasn’t going to run his land anymore because he was retiring. I went over later and ended up renting his land and equipment the next year. It’s 63 acres—just enough to get my fingers dirty. Any other businesses you’re involved in? Kevin: In 2009, we helped our daughter remodel a former insurance office into her beauty salon, The Hair Boutique. You two shoot from the hip. I’m guessing you’ve never had a business plan. Kevin: We haven’t. We did it the wrong way, but it was the right way for us. We rarely say no to an opportunity. We don’t like hearing people saying we can’t do something. Because you like proving them wrong? Kathy: It’s not so much that, it’s the challenge. It steps up our desire to a new level when people doubt us. Kevin: And we’ve always made decisions that way. Why host a one-day spay and neuter clinic for free at your campground? Kathy: We like animals and someone has to help them. Kevin’s cousin runs a nonprofit shelter for abused animals. A vet came down here and spayed and neutered 32 cats and

Kevin & Kathy Finstad

7 dogs in one day. We also let the Disabled American Veterans and Comrades of Valor use our campground facility for free.

—Kathy Finstad The New Ulm Chamber Green Initiative is trying to encourage and educate businesses to adopt more environmentally sound practices. Kevin, you were a panel member on its public forum in May. Kathy, you’re a Putting Green board member. Besides this, how have you two helped people locally become more environmentally aware? Kathy: We feel we can make a difference. Kevin is the public speaker, not me. He goes to public meetings and talks about the importance of being green and gives statistics about recycling and how long it takes for landfill items to degrade. He brings Boy Scout groups to our recycling facility. We understand change won’t happen overnight. Every day, our trucks go to the landfill and when you see for yourself what people leave in their garbage, it makes you all that more determined to stop the waste. Kevin: I give tours of our single-sort facility to all the fifth graders. If we teach the kids, they will teach their parents not to throw recyclables into the garbage. If I were younger, and could start another venture, it would be one that sorts the recyclables out of garbage. I bet up to 40 percent of the contents of our garbage trucks could be recycled. (continued next page)

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She teaches English and Speech, believes in the value of education and takes pride knowing many of her students who go off to college will come back to help manage local farms.

That’s because she’s a farmer, too. She and her husband practice responsible, ethical agriculture for life. We call it the R.E.A.L. Story. Learn more at mnsoybean.org. ©2012 Minnesota Soybean Research and Promotion Council

“Every day, our trucks go to the landfill and when you see for yourself what people leave in their garbage, it makes you all that more determined to stop the waste.”

Visit mnsoybean.org Brought to you by Blue Earth, Faribault, Nicollet/Sibley, Scott/Le Sueur, Waseca and Watonwan County Corn and Soybean Growers and their soybean checkoff. SEPTEMBER/OCTOBER 2012

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Kevin & Kathy Finstad | River Valley Sanitation/RVS Shredding

Rapid Response Team

You have been president of Professional Referral Organization in New Ulm. What does your group do? Kevin: I joined four years ago and was president one year. It’s made up of local businesspeople. We have a $55 annual membership fee, meet Wednesdays for an hour, and each member has 60 seconds to promote his or her business. Each member also becomes my “salesman” out in the

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community throughout the week, and I’m theirs. We have 24 members, from electricians and bankers to chiropractors. You build friendships in the group and it’s easier doing business with friends. I’ve missed a couple weeks now, and it’s almost like missing dinner with your own family. I was going to ask you about the future of your company, but

SEPTEMBER/OCTOBER 2012

something tells me you don’t know. My guess is, when another opportunity arises, you’ll take it. Kathy: That’s pretty accurate. Kevin: If another door opens, we’ll go there. Editor Daniel J. Vance writes from Vernon Center.

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By Carlienne A. Frisch Photo by Kris Kathmann

Nicollet pork producer pleasing picky palates from St. Paul to Singapore.

“It’s the Black Angus of pork, well known for superior quality,” said Jim Compart, president of Compart Family Farms in Nicollet, referring to the custom meat his family’s hogs produce. “Tests performed by the National Pork Producers show the Duroc breed excels for meat quality and eating characteristics. Our Compart Duroc branded pork is served at ‘white tablecloth’ restaurants like the Radisson in Minneapolis and Caesar’s Palace and Bellagio in Las Vegas. It’s also served in many Chicago restaurants and in Florida, Washington, D.C., Dallas, San Diego, Alaska, Hawaii, Hong Kong, and Singapore. Our customers buy from distributors in the majority of large cities.” He continued on. “We have some retail sales as well, including Lund’s and Byerly’s, and we sponsor five professional barbecue teams at competitions across the country. These guys have a following that is almost like NASCAR. The team we sponsored in this year’s ‘Memphis in May’ event barbecued our pig in a standing position. It got first place in the Kingsford Challenge, the most prestigious award there. Our newest product, Premium Compart Duroc Dry Aged Pork, has taken the company to the next level—into steak houses with its Dry Aged Pork Porterhouse and Dry Aged Ribeye.” Sitting at the conference table at his in-home office in Nicollet County, Compart explained he’s one of several family members involved in the branded pork production program. He farms with brothers Dean and Chris, growing corn and soybeans on 2,400 acres and continuing a Compart family Duroc breed legacy of more than 60 years. The breed itself has been around a century. continued > SEPTEMBER/OCTOBER 2012

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modity pork is injected and/or marinated with 12-30 percent water and chemicals.” The Compart Family Farms story actually begins in 1952, when Jim’s father, Richard, met his future wife, Bonnie, at the Minnesota State Fair, where he was showing a Duroc gilt. (Her entry The Shed BBQ team took first place with a Compart Duroc whole was a Hampshire gilt.) hog in the Kingsford Tour of Champions in Memphis, Tennessee. He served in the U.S. Army and then married, and returned to “Compart Durocs optimize growth the diversified farm operation after his performance and meat quality,” Compart father fell from a hayrack and broke his hip. said. “We produce pork that tastes like “My father (who passed away in March) pork used to taste. Although pork is was the only son, so he came home to keep known as ‘the other white meat,’ reddishthe farm operating,” Compart said. “In pink pork is more desirable because it’s 1964, they sold the cows and expanded the usually higher in pH, and higher pH pork hog operation with an additional breed, is usually more tender. We have actually Hampshires, as another genetic choice for doubled the amount of marbling in our Compart customers. Mom was instrumenproduct compared to five years ago. This tal to the success of our operation. While was accomplished through intense genetic my father and brothers worked the pigs, selection of Compart Duroc sires. We scan Mom would answer phone calls from every purebred male and female for loin eye customers and sell a lot of the boars. She area, backfat thickness and marbling. Just knew every pig like the back of her hand like a well-marbled ribeye steak, we need and knew what every customer had bought marbling in pork to give it flavor, juiciness the last time. My three brothers, my sister, and taste if it is a natural product. All this and I all worked together on the farm from flavor, and still it’s 96 percent lean, with the time we could walk. We were in 4-H no water or chemicals added. Most com-

Palate Pleasers

Pork Dictionary Boar—male pig, used for breeding Sow—female pig, used for breeding Gilt—young female pig, one that has not yet produced a litter Barrow—castrated male pig, butchered for meat Farrowing—a sow giving birth Terminal line—genetic line used for meat production 26

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Compart Family Farms | Nicollet

In Sioux City, Iowa, where 600 to 900 head per week are slaughtered and the meat is packaged, an employee oversees quality, including special requests from chefs. all our lives.” In 1965, Compart’s parents built an onfarm test station, where they weighed the pigs “on test” and weighed them “off test” after they were grown to measure how much feed it took to produce a pound of gain. They had a technician measure back fat and loin depth. They became involved with progeny testing at the Minnesota Swine Evaluation station in New Ulm. “Now we practice total herd testing,” Compart said, “where virtually all pureline boars and gilts are tested for growth, leanness, loin eye and muscle quality traits. Maternal performance data is collected, including number of pigs born, number weaned, and 21-day litter weights. The data is sent to the National Swine Registry and becomes part of the largest database of its kind in the world. Marc (a brother) and I added Yorkshires in 1977, when I was 15. We did very well, and we worked hard, even delivering pigs to Montana with a pickup and a 16-foot bumper trailer. In 1979, we built a barn, at 18 percent interest—and

then came the farm crisis. Many people my age would not have made it through.” The Compart family remains connected not only by commitment, but also proximity. Jim lives on the southeast corner of his grandmother’s family farm, Dean occupies the original Compart farm, and Chris resides where their father’s uncle lived. Marc, who joined his wife on her family farm in Iowa, has raised hogs for the Compart operation. Their sister, Heidi, doesn’t work with hogs, but as a State Farm Insurance agent in Le Center. The family continues to grow with the farm operation. Although Compart’s 30-year-old son, Rudy (who had the Champion Barrow at the 1997 Minnesota State Fair), works as an Auto Cad designer of trade show booths in Chicago, he has brothers involved in the hog business. Robbie (28) lives on a Princeton, Minn. farm, where he raises breeding stock. Daniel and David, 24-year-old twins, are Compart’s youngest sons, both graduates of the

University of Minnesota. Daniel manages Pinpoint Research, the company’s research farm located at Norseland, while his wife pursues a Ph.D. in beef nutrition. David works at a St. Paul bank and is engaged to a woman working on a Ph.D. in meat science at the University of Minnesota. “My brothers and sons and I all work physically with the pigs, as does Dean’s son Kyle, and the wives are active in the operation, too,” Compart said. “My wife, Diana, works on our accounting, with the help of two other employees. I’m more involved with the business side of things—marketing, hedging, contracting, purchasing grain and inputs, sales and marketing, and tradeshows. I head up the branded meat program. We have a great team that we have put together with Compart Family Farms and work well from many locations. We have another Minnesota sales representative and an employee in Las Vegas selling our meat west of the Mississippi. In Sioux City, Iowa, where 600 to 900 head per week are slaughtered and the meat is packaged,

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“The products of that time were too processed, and we knew that eventually people would look for something more natural. Now there’s a trend toward more natural products. Our goal is to provide the best possible products and not take shortcuts to achieve it.”

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an employee oversees quality, including special requests from chefs. We also market additional pigs to commercial processors in neighboring states. An Owatonna employee handles orders, logistics and transport. Last year, between Thanksgiving and New Year’s, my brother, Chris, and his wife, Rochelle, put together gift boxes of our branded pork products for individuals and large companies across the United States.” Compart said, “I work 60-plus hours a week. When I have time off, I take the phone and my laptop. It’s hard to ignore the phone when I’ve worked hard to make it ring. When we started, our philosophy was to have the best breeding stock available. In the ‘90s, we had a contract with a packer who said, ‘We’ll have to see what’s

available from our bigger producers before we’ll know if we can take your pigs next week.’ That reinforced the fact we needed to create a product the consumer wants and the packer wants to buy. We considered starting our program in the late ‘90s, but a consultant said the time wasn’t right, so rather than fight it, we waited for consumer push-back. The products of that time were too processed, and we knew that eventually people would look for something more natural. Now there’s a trend toward more natural products. Our goal is to provide the best possible products and not take shortcuts to achieve it.” Compart isn’t concerned about competition. “There’s a Berkshire line that also fits into ‘white tablecloth‘ restaurants, but their cost of production is higher, hence

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Meaty Matters: Jim Compart • Past president, Nicollet County Pork Producers Association • Executive Board member, Minnesota Pork Producers Association (president for two terms)

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Compart Family Farms | Nicollet

their cost to the buyer is higher,” he said. They don’t have the benefits of the genetics and science that we have.” All the pigs butchered for the branded pork are bred, born and raised on family farms, as is the breeding stock sold to other hog producers. Duroc sires are used for their meat quality, growth rate, feed efficiency, and low cost of production. York and Landrace sows are used because they’re maternal. Producers who are part of the Compart Family Farms Premium Compart Duroc program have their facilities and management evaluated by one of the Compart brothers and a veterinarian

for herd health and nutrition, caretaker training, animal observation, facilities, and handling and movement. “In addition to Compart-owned facilities, we contract with other producers to supply high health breeding stock across Minnesota,” Compart said. “Our breeding stock is raised in total confinement facilities similar to modern commercial production. Veterinarians monitor all farms to meet state and federal health regulations. We’re concerned about producing pork in a manner profitable for the producer and that will result in a satisfied consumer. About ten other farms supply pigs for our branded

Palate Pleasers

The Lean Facts: Jim Compart 1. Childhood: The middle one of five children. 2. Favorite school subject: “Math; I like numbers.” 3. Education: Graduate of Nicollet High School, then the College of Auctioneering in Mason City, Iowa (both 1979). No agricultural business degree, but “It would have been fun to go to college and have networked with people.” 4. First jobs: “My dad also had a manufacturing business building hog gates and farrowing crates, so I worked there at night when I was in high school. When little, we walked beans for neighbors.” 5. Childhood dream: “I thought about being a pilot. We were active traveling to shows in the Midwest. My dad, brothers and I took lessons, and I got my pilot’s license when I was 17. I belong to a flying club in Mankato, where I share a Piper Archer with 20 other pilots.” 6. Hobbies: “Fishing, and I like to hunt when I have time. I just bought Sadie, a yellow lab puppy.” 7. Proudest accomplishment: “Building the business with our extended family.” 8. Words that describe you: “Very passionate about excellence.”

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THE ESSENTIALS

Compart Family Farms Location: 45198 400th Street Rural Nicollet, MN 56074 Web: compartduroc.com Telephone: 507-246-5179

meat program. The pigs are fed specific rations that are a result of intense nutritional testing at our Pinpoint Research facility.”

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The Pinpoint Research nursery and finisher facility began in 1997. It is designed to help the Comparts understand the nutritional requirement of their genetic lines. They formed a partnership in swine nutrition research with Hubbard Feeds in 1999. Over time, the partnership began to focus on meat quality as well as growth rate. The facility does research on more than 10,000 pigs per year. “Another component to the business is Compart’s Elite Genes A.I., which is managed by my brother, Dean, and his wife, Kaye,” Compart said. This part of the business offers semen from some of the most elite Duroc, York and Landrace boars available in the world. We use the top 2 percent of sires. Some excel for 21-day growth rate, others for marbling. European and Asian countries have turned to Duroc as their terminal sire of choice. Buyers from Japan and Korea, as well as from Mexico, Canada, and the United States, make genetic selections from our nucleus-level breeding farms. Most breeding companies don’t allow people outside of their organization to access their nucleus sires, selling sons and grandsons instead. But it’s at the nucleus level where the greatest genetic improvement is made, so staying close to the elite sires assures the customer of maximum genetic improvement.” Imperial Swine Genetics, Inc., is the Comparts’ F-1 gilt line breeding stock service. They sell mainly Yorkshire x Landrace F1 females for commercial production. Compart said branded meat sales exceed sales of boars, gilts and artificial insemination product, but declined to quote a dollar amount.

Compart Family Farms | Nicollet

“The end users want our meat, and that helped grow the business,” he said. “We’ve also had recommendations by chefs and various articles in restaurant magazines such as National Barbecue News and in City Pages. I call distributors, and we work hard to develop and maintain the volume with each distributor. There’s a lot of legwork and traveling, especially to trade shows. “I was in Des Moines, Iowa in late June, working with a retailer who wants to put Compart pork in his supermarkets. Then I went on to Dallas to set up at the Texas Restaurant Association show. I displayed our products and gave away samples, along with another sales person who met me there. In checked luggage we flew down the items needed not only to display our products, but also to cook them. From Dallas I flew to New York to meet with brokers, distributors and retailers, and then got home for July 4th. I don’t mind the plane rides and hotels, but I’d rather be getting my hands dirty with the pigs--or fishing. On July 4, I went with family to our cabin on Lake Mille Lacs, where I cooked out and went fishing. When I was a boy, Dad always said, ‘If you get done with your work, you can go fishing.’” With an ever-growing farm operation and family, the Comparts face the usual challenges of a family business. Compart offers this advice: “Give people space when they need it and understand their perspective. There always will be questions, and as the family gets larger, the dynamics will become greater. “We’re going through succession planning now. Although I’d like to go fishing more often, I’ll keep working because I enjoy doing what I’m doing. I enjoy interacting with people and giving them what they enjoy. A larger corporation doesn’t take the time to ‘make it natural.’ It will be interesting to see changes over the next 10 years. Even with the bad economy the last five years, our meat sales have gone from growing 25 percent annually to growing 75 percent. I wish I were 20 years younger. If I knew then what I know now, I could really roll. The last 20 years have gone by so fast, and it has been a fun ride.”

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Carlienne A. Frisch writes from Mankato.

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SEPTEMBER/OCTOBER 2011

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Brad Radichel of Mankato-based Condux International and Condux Tesmec made our cover. His introduction began: “Each workday, Brad Radichel is continually reminded of the family business his great-grandfather D.W. Radichel started in 1888 as North Star Concrete. It jabs like a sharp elbow to the ribs. That’s because down the hall from his office, a boardroom brimming with nearly 125 years of company memorabilia was preserved as a reminder to him and other family members.” Companies profiled: August Schell Brewing Company (New Ulm) and Express Diagnostics International (Blue Earth). Memorable quote: “Our family tradition had always been to hunker down and hold on through good and bad. If the business wasn’t performing, you found ways to get it performing.”—Brad Radichel. 5 YEARS AGO

SEPTEMBER/OCTOBER 2007 Our cover story was Mike Drummer of Drummer Companies (Mankato). Companies profiled: Dr. Linda Nussbaumer (Lake Crystal) and Juba’s Super Valu (Blue Earth). Memorable quote: “I use to have the mindset of wanting to grab every customer and bid every job. Then I realized: 20 percent of my customers did 80 percent of the business. Why not cater more to that 20 percent?”—Mike Drummer. 10 YEARS AGO

SEPTEMBER/OCTOBER 2002 Cover interview: Mark Davis of Davisco Foods International (Le Sueur). Profiled companies: New Ulm Furniture (New Ulm) and Najwa’s Catering (Mankato). 15 YEARS AGO

SEPTEMBER/OCTOBER 1997 Cover interview: Bob Wettergren of St. Peter Area Chamber of Commerce (St. Peter). Profiled companies: Ryter Corporation (Madelia) and Crown Fixtures (Winnebago). 34

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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.

Town,” which includes food, fun, and festivities. Carolers stroll the streets. There’s more on Saturday with the “scarfing” of the Green Giant at Giant Park. See Blueearthchamber.com.

Fairmont Bob Wallace, Fairmont Area Chamber

Martin County launched EasyTransit, a convenient way for employees to ride to and from work between Fairmont and Blue Earth or Jackson. It’s easy as 1-2-3: 1) buy an EasyPass or pay the driver $2; 2) park free at Five Lakes Centre; 3) and ride to industrial parks in Blue Earth or Jackson. EasyTransit departs Fairmont for Jackson 4:30 a.m. and returns 4:00 p.m. EasyTransit leaves for Blue Earth 5:15 a.m. and returns 5:15 p.m.

Blue Earth Cindy Lyon, Blue Earth Chamber On Saturday September 15 come see our City Wide Garage Sales along with the Harvest Farms & Art Festival. As for the latter, email harvestartfestival@yahoo.com to be a vendor. On Friday/Saturday November 9-10, the Business Improvement Committee and Chamber of Commerce host the annual “Holiday Sampler on the

Janesville Matthew Gindele, City of Janesville Janesville’s economy received a shot in the arm with Summers Ridge Vet Clinic relocating to the former Budget Mart property on old Highway 14. This is a great example of how adaptive re-use can benefit business and community. The gas station that was vacant for years created a gap in Janesville’s business district. Summers Ridge decided to use the extra space offered by the new location and filled a missing piece in the local market.

Lake Crystal Julie Reed, Lake Crystal Chamber At Lake Crystal Area Recreation Center, the new operations manager, Ryan Yunkers, comes from a higher education background and has a lifelong personal and professional interest in wellness. Joy Tate, the new group fitness manager, is a self-taught aerobics instructor and certified in group fitness, silver sneakers, kickboxing, and BodyPump. The new personal training manager, Carla Lind, can help you achieve health and fitness goals. She earned an exercise science degree from Bethany Lutheran College.

Mankato Christine Nessler, Greater Mankato CVB Find greatness October 20-21 at the Mankato Marathon. It’s the Midwest’s boldest race—from its dynamic course to its spirited racers. From the start line at Minnesota State University, the course travels countryside and river valley to finish on the City Center’s

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Riverfront Drive. Besides having a race for every runner—the full marathon, half marathon, 10K, 5K and kidsK—the Marathon has on and off racecourse activities for the whole family. Registration at mankatomarathon.com.

Mankato Shelly Megaw, Greater Mankato Growth Greater Mankato Growth’s website, greatermankato.com, has always been more than just a website for the organization; it serves the entire business community. Like the previous site, the new greatermankato.com is rich with content for businesses within and

outside the marketplace—and now it’s easier to find. The new site incorporates advanced features, including a GIS mapping tool to provide information on available buildings and sites in the area, and related community information. See greatermankato.com/ buildings-sites.

New Ulm Terry Sveine, New Ulm CVB This year’s Oktoberfest features an expanded family-friendly weekend on October 13 with all kinds of fun stuff downtown, such as magicians, petting zoo, entertainment, and more. See you here!

New Ulm

Mankato

Brian Tohal, New Ulm EDC

Julie Nelson, South Central MN Small Business Dev Center

You are welcome to attend the SBDC and MSU College of Extended Learning-sponsored Disney Institute on September 24 for “Disney’s Approach to Quality Service.” Attention to detail can be the difference between mediocre customer experiences and memorable ones driving repeat business. Disney’s world-class reputation for service isn’t based on “magic,” but on time-tested methods. Spend a day with Disney Institute to benefit from its experience and learn to think differently. For information/registration, see mnsu.edu/continuinged/disney/.

Montevideo-based SpecSys purchased the former Caterpillar Paving facility and will be expanding its manufacturing operations to New Ulm. SpecSys is a full-service provider of project management, engineering, and manufacturing for fast track projects, systems and products. Its 60,000 sq. ft. New Ulm facility will focus on contract manufacturing. The company plans on employing up to 25 people. SpecSys recently held a job fair here and received nearly 100 applications. See newulm.com/economic-development.

Southern Minnesota’s Largest Freightliner Dealer Westman Freightliner is Southern Minnesota’s Largest Freightliner Dealer, with store locations in Fairmont, Faribault, Marshall and two in Mankato. At Westman Freightliner we have knowledgeable parts professionals and with the largest available parts in Southern Minnesota you’ll be sure to find what you need! We are a locally owned and operated company committed to taking care of our customers.

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Local Chamber & Economic Development News

Visit NewUlmOktoberfest.com. The always-popular Parade of Lights on November 23 features all afternoon a new “Christkindlmarkt,” just like in Germany. Vendors in decorated booths, seasonally dressed singers, and other entertainers will make this the place to be for your Holiday shopping!

New Ulm Audra Shaneman, New Ulm Area Chamber New Ulm Area Chamber of Commerce welcomes new members: New Ulm Event Center, Artisans at the Grand, and Window & Door Co./Gutter Cutters. The Heart of New Ulm, a long-term community project to reduce the risk factors for heart disease, was featured in the magazine Diabetes Living. Beacon Promotions has acquired the Imagery Group from Nashville, Tennessee. Oktoberfest celebrations, including the Hermann 5K Run/Walk, will occur the first and second weekends of October.

Sleepy Eye Julie Schmitt, Sleepy Eye Chamber Two businesses recently relocated to downtown Main Street Sleepy Eye; Curves owned by Deb Moldaschel and Angie Gode Agency – American Family Insurance. A highlight each fall season is the Cross Town Football Game between SE Public School and SE St. Mary’s Catholic School where the Retail Association awards prizes at halftime to the fans as a way of saying thanks for supporting the businesses. Miss Sleepy Eye 2011 Anna Surprenant was recently chosen as 2013 Minneapolis Aquatennial Princess.

Waseca Kim Foels, Waseca Area Chamber At Farmamerica Fall Fair September 8-9 enjoy a fun-packed family weekend (farmamerica.org). See old-fashioned tractors, classic tractor pull, draft horse pull, corn maze. Peddlers Grove has pre-1850 trading post and demonstrations. Also, experience Waseca’s 25th Annual Marching Classic Celebration Saturday

September 22. The 100-unit parade begins downtown 12:30 p.m. and includes marching bands, classic car cruise, floats, tractors, and horse units. Marching bands compete at 5 p.m. at the high school. See wasecamarchingclass.com and discoverwaseca.com.

Winnebago Austin Bleess, City of Winnebago If you haven’t checked out downtown Winnebago, you need to stop by the Small Town with a Big Heart! With a new gift shop on Main Street, B&D Country Treasures, and the recent ribbon cutting at Back Woods Designs, downtown Winnebago has something for everyone. Join us for the day in Winnebago!

Region Nine Nicole Griensewic, Region Nine Dev Commission

Region Nine will host two events focusing on projects with potential to spur economic growth. On September 19, a local brownfield training workshop will highlight and expand upon local and statewide projects and success stories. Experts will discuss resources and grants available to fund underutilized property redevelopment. Also, the Region Nine Renewable Energy Task Force, along with key partners, hosts an Energy Summit November 17 connecting the public with local vendors. For more, contact publicrelations@rndc.org.

SEPTEMBER/OCTOBER 2012

CONNECT Business Magazine

BUSINESS TRENDS

HOUSING MARKET

Although southcentral Minnesota home sales have shown some signs of life lately, the vastmajority of America up for sale hasn’t. What does the future bode? Ask a different housing expert and you get a different answer. Community Dividend, a Federal Reserve Bank of Minneapolis publication, focused its July issue on answering the question, What ails the housing market? This isn’t a question people began asking yesterday. For example, loan applications nationwide for single-family homes in 2010 were only half that of 2005 despite lower interest rates for 2010. And interest rates have fallen since. CEO Chris Galler of Minnesota Association of Realtors cited several factors hurting

home buying. For one, potential buyers have limited access to credit. The average FICO Score of loan recipients (a score ranging from 300 to 850 with 850 having the lowest perceived risk) has risen since 2007 by about 50 points. This reflects tighter underwriting standards. “Many lenders seem to want borrowers with credit scores greater than 700,” said Galler. In comparison, the average FICO Score in 2007 of Federal Housing Administration and Department of Veterans Affairs loan applicants was about 650. Another factor has been the number of young couples delaying marriage and having children. Community Dividend reported, “In fact, since 1999, the percentage of 25- to 34-year-olds nationwide having a mortgage has declined, from 18.5 to 17.1, while the percentage of people 35-and-older having a mortgage has increased, from 25.7 to 31.3. While the cause of this divergence between age cohorts could be a function of lifestyle preferences or the result of unstable personal financial conditions (such as a student loan debt increase), the implication

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SEPTEMBER/OCTOBER 2012

is that with fewer young people seeking to purchase homes, demand for homes—typically starter homes—may remain soft.” Other factors holding the market back include potential homebuyers lacking a down payment, millions of homes still in the foreclosure process (which could “fuel fears an avalanche of new supply will come on the market,” said Jim Hines of Wells Fargo Home Mortgage), buyer uncertainty about the housing market, and buyer uncertainty about facing unexpected life issues, such as suddenly losing a job or going into personal bankruptcy. Of the four Community Dividend experts interviewed—Galler, Hines, Julie Gugin of Minnesota Homeownership Center, and Anita Olson of U.S. Department of Housing and Urban Development—the first forecasted a “very slow recovery,” the second a 9 percent rise in 2012 housing starts and 16 percent in 2013 (including multi-family), the third general “improvement,” and the fourth a “slow, steady climb upward” over the next 12-24 months.

HEALTHCARE

Most business owners prefer stable costs and market conditions from which to plan expansion—and right now, no business cost or market condition going forward could be more unpredictable than healthcare. For one, not many businesspeople even vaguely understand the Patient Protection and Affordable Care Act, known as Obamacare. For another, with the Presidential election looming, not one businessperson knows if the Act will even survive. In short, the Act in 2014—if it survives— will give businesses employing more than 50 full-timers one of three options: 1) either offer health insurance coverage to employees and potentially pay a $3,000 annual tax for employees whose self-only premiums exceed

9.5 per cent of their wage; 2) send employees to a state-operated healthcare exchange and pay an annual tax of $2,000 per employee, or; 3) offer a hybrid health insurance plan. An Eide Bailly white paper authored by health care reform specialist Ross Manson also has noted the unpredictable future of businesses considering Obamacare. He wrote, “The dilemma most companies now face is whether or not it makes business sense to extend coverage to all employees, elect not to provide coverage and pay the annual penalty, or develop a hybrid plan. Businesses must consider how their decision will impact their employees, as well as predict how many employees would be eligible for the small and large subsidies offered through an Exchange. This can be complicated.” Under the heading “What Will Others Do? An Unpredictable Future,” Manson listed four factors businesses should consider before ending or keeping insurance coverage: 1) the current and future cost of health insurance coverage versus mandated penalties [i.e. annual additional taxes];

2) the impact dropping health insurance coverage may have on acquisitions and employee retention; 3) The Jones’s Factor, i.e., what other companies do and how that affects competitive advantage; and 4) potential cost savings and how that money could be used in other areas of business. If President Obama wins re-election and his healthcare program survives, it would seem American business owners will be asked to make real decisions on a 2,700-page plan few have the time to read or knowledge to understand. It could take years for some businesses and employees to figure out the best means of handling health insurance—and years to figure out the real costs. If a President Romney emerges with a Republican Congress, Obamacare could be repealed or morphed into something else. Either way, sadly, perhaps hundreds of billions of dollars (or more than a trillion according to some estimates) available now for corporate expansion and job growth must be put on ice until the future becomes clearer.

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SEPTEMBER/OCTOBER 2012

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OFF-THE-CUFF

Major League Baseball peaks, the National Football League season begins, and NCAA basketball beckons.

Gallup began polling it in 1984, a majority of Americans—50 percent—supported marijuana legalization, including 62 percent of Americans age 18-29. A June 2012 Rasmussen poll had it at 56 percent. Now compare that to a 2006 Zogby poll showing more than 50 percent of 18-29 year olds—the same age group desiring legal marijuana—wanting to make tobacco cigarettes illegal. Do you see an inconsistency? A rather convincing argument could be made for marijuana being far more destructive than tobacco to individual users. For example, The Partnership for a Drug Free America publishes a fact sheet on the effects of marijuana and it claims, in part, that using one joint causes the same lung damage and potential cancer risk as smoking five tobacco cigarettes; marijuana use causes an attention, memory, and learning impairment of greater than 24 hours; in one study, 45 percent of reckless drivers without alcohol in their blood streams tested positive for marijuana; heavy use affects male and female hormonal levels; marijuana use can cause intense anxiety, panic attacks, and/or paranoia; it influences the immune system and affects the body’s ability to resist viruses, bacteria, fungi, and protozoa, and decreases the body’s anti-tumor activities; and, a marijuana joint contains 50 percent more of a certain lung cancer-causing

If you’re like me, this is one of your favorite times of year. That said, now I want to make sport of a different kind. Buckle your seat belts, and away we go…. Besides following NCAA basketball, I have another favorite sport: trying to understand all sides of an argument. Our elected officials have tough jobs having to consider all sides of complex, businessrelated issues—at least the ones trying have tough jobs—before casting votes that will affect how you and I do business. Often times, after considering a bill’s many pros and cons and neutrals, they end up voting for the lesser of two evils. It’s not an easy job to have. For illustrative purposes, let’s use marijuana—not literally, of course.... Last October, and for the first time since

chemical than a tobacco cigarette. I could go on—and on. The Partnership for a Drug Free America lists sixteen adverse effects and omits a seventeenth: the effect of second-hand marijuana smoke. In sum, legalization could create a heavy weight for a generation of Americans trying to lower healthcare costs and with more Daniel J. Vance usage from legalizaEditor tion could set the stage for your business having less productive, sicker, and more error-prone employees. This also could make your company more legally vulnerable to an increasing number of pot-induced employee miscues. Imagine what happens to quality control the day your employees begin legally smoking marijuana during work breaks. As a drug, marijuana’s long-term effects are right up there with tobacco, which, according to a Centers for Disease Control website, “harms nearly every organ of the body.”.... Another burning issue involves marijuana’s half-sister, industrial hemp, which looks and smells like the real deal, but doesn’t have nearly enough THC (the active ingredient in marijuana) to get anyone buzzed.

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In other words, you would get only a headache smoking hemp and yet the growing of industrial hemp in the U.S. is illegal. Though growing is illegal, other aspects aren’t. For example, U.S. soap makers can legally import hemp seed oil, retailers can import hemp clothing, and consumers can import Omega-3 fatty acids-rich hemp seed cooking oil. In another legal U.S. application, imported hemp is being employed to build homes using a construction material called “hempcrete.” If hemp were legal again—it was legal not that long ago—southern Minnesota farmers could grow it as a cash crop like many did during World War II. A July Salon.com article reported that Dr. David Bronner, who owns U.S.-based Dr. Bronner’s Magic Soaps and each year has to import more than 20 tons of Canadian hemp seed oil, was arrested for trying to manufacture his own hemp seed oil from industrial hemp and spreading that oil on a slice of bread outside the White House. He was trying to raise awareness. Technically speaking, off the top of my head, I can think of a half dozen margarine brands more dangerous to your health than hemp seed oil..... Lastly, the U.S. government in 1919, through the 18th Amendment and Volstead Act, made illegal the manufacture, sale and transportation of intoxicating liquors. The

Amendment and Act had noble intent— like many federal laws—and failed miserably. Organized crime over time ruled the liquor trade and prohibition made gangster Al Capone into a national hero. Eventually, public opinion turned against prohibition, which led to its repeal in 1933 with the 21st Amendment. In comparison, the United States has a 150-year history of making illegal the use and possession of marijuana. There has never been a “21st Amendment” for pot, even though present-day gangsters like Capone rule our southern border with Mexico, many inner-city neighborhoods, and small parts of Minnesota. It’s your business taxes that must pay for an army of local, state, and federal law enforcement personnel to monitor, prosecute, and imprison these gangsters. Marijuana is illegal and alcohol isn’t, and yet the latter has done far more to tear apart our social fabric. Consider the millions of Americans permanently disabled by and/ or imprisoned due to actions caused by fetal alcohol syndrome, the untold thousands killed or maimed by drunk drivers, and perhaps trillions of dollars permanently lost in business productivity…. For the record, I don’t have a pat answer for what Minnesotans ought to do with marijuana legalization or most other complex issues that affect your business.

Rather, through my vote, I do my best to hire competent state and federal legislators who weigh all sides before voting their conscience. They deserve our special thanks. And thanks to you for reading southern Minnesota’s first and only locally owned business magazine, the one founded in 1994 that reaches 8,500 business decision makers in nine southern Minnesota counties. Again, if so inclined, be sure to nominate a friend or colleague for our Connect Business Magazine/KEYC-TV Business Person of the Year (see page 2). See you next issue. Editor Daniel J. Vance self-syndicates the newspaper column “Disabilities.” Email press releases and letters to the Editor by October 1 for the November/December issue. We may edit for space and clarity.

SEPTEMBER/OCTOBER 2012

CONNECT Business Magazine

By Daniel J. Vance Photo by Kris Kathmann

Former juvenile delinquent kicks his way through life to build a Lake Crystal powder coating business.

You could make a classic movie about his life. In it, he could be like tough-and-rough Riff of the Jets in West Side Story or maybe combative Billy riding a chopper to New Orleans in Easy Rider. He definitely would be a juvenile delinquent, a broken-home misfit, an angry malcontent, always swinging at the world but never able to land a punch. Then a judge would offer him the choice of 90 days in jail or four years in the military. In this movie, he would reform his ways with the latter and chin his way up to being in a top military unit. In time, he would become a wildly successful stock car racer, start powder coating in his garage as a hobby, and in 2003 begin Lake Crystal-based Powder Werks, now a five-employee provider of environmentally friendly powder coating services to more than 100 manufacturers in the Upper Midwest. Powder coating involves the electrostatic application of dry paint to create a hard and colorful surface on metal. The plot line to this cult classic would have an inspiring ending, of course, with 47-year-old, Madison Lake native Damon Haslip seen riding his Harley Davidson toward a prairie sunset while credits roll. As for this Connect Business Magazine story, you canâ&#x20AC;&#x2122;t truly appreciate Powder Werks and Damon Haslip without first hearing his gripping life storyâ&#x20AC;&#x201D;one that coats every square inch of his business and work ethic. Listen in. continued > SEPTEMBER/OCTOBER 2012

CONNECT Business Magazine

Powder Tuff

Said Damon Haslip in a Connect Business Magazine interview, “I grew up in Madison Lake, and as kids we didn’t have much to do. There were more than 15 of us all the same age in a town of 300 and we ran around as a gang. Fighting was just part of life there. It was what you would call a ‘rough neighborhood’ during my whole childhood from the mid-‘70s to early ‘80s.” Back then, Haslip and his buddies fought most every summer weekend at the drive-in theater off Third Avenue in Mankato, with teens from opposing towns—Elysian, Waterville, Janesville—often pairing up against them for fisticuffs on the theater playground area. “It was just like in the gang movies,” said Haslip. Similar to some of his friends, Haslip didn’t have many positive role models. He was only eight years old when his parents divorced and his father and his seven siblings went one way—Mankato—and he and his mother went another—east to Madison Lake. He had been the youngest child and for some reason was paired up alone with his mother, who had some challenging personal issues to conquer. All his siblings attended Mankato West, while he went to Mankato East.

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SEPTEMBER/OCTOBER 2012

“I got my car looking nice and by the time I was 16 it was a fast, show quality ’72 Nova SS. I got a lot of speeding tickets and into many driving-related problems. I once got caught doing more than 100 mph in a 30.” He said, “I resent the fact I didn’t get to go to school with my siblings. I lost touch with them. I think things would have been different if I hadn’t grown up in Madison Lake.” He and his gang friends became emotionally hardened, he said, and were rarely disciplined by non-law enforcement adults. They played unchallenged on and around Madison Lake’s water tower as if it were their own personal monkey bars. From age 11, he was like a nocturnal animal running the streets undisciplined, often arriving home three or four in the morning on school nights. “At age 15, I began working part-time at a body shop and driving a car without a license,” he said. “I got my car looking nice and by the time I was 16 it was a fast, show quality ’72 Nova SS. I got a lot of speeding tickets and into many driving-related problems. I once got caught doing more than 100 mph in a 30.” Throughout most of high school, he trapped muskrat, beaver, and fox, and he and a friend worked for a Madison Lake fur trader skinning animals until early morning on many school nights. In today’s parlance, Haslip was a bully, and Mankato East kids were terrified of “The Lakers.” At night, they made “hydrogen bombs” out of various gases fed into trash bags that ignited into mushroom clouds on Main Street. The small town didn’t have policemen. They

Powder Werks | Lake Crystal

“We got off the bus at basic training. I had long blond hair, zero respect for authority, and the training instructor was screaming and swearing at me right away. He was a rather large man and trying to intimidate. He said something to the effect he had so and so’d my mother. I said, ‘Well, I finally found my dad then.’ Right then they made me a flight leader for nearly 150 recruits.” ran unfettered. Two positive role models in his teen years were the parents of his best friend Donny Neirman, who today owns Foundry Services in Mankato. They allowed him to live with them a while after he was forced out of his own home. They disciplined him and gave him boundaries, which he appreciated. His senior year, for the most part, he slept nights in his car in the school parking lot. Then at 18, after yet another brush with law enforcement, he had

to face a local judge, who gave him a choice of spending 90 days in jail or entering the military. He joined the Air Force. He said, “We got off the bus at basic training. I had long blond hair, zero respect for authority, and the training instructor was screaming and swearing at me right away. He was a rather large man and trying to intimidate. He said something to the effect he had so and so’d my

SEPTEMBER/OCTOBER 2012

CONNECT Business Magazine

Powder Tuff

mother. I said, ‘Well, I finally found my dad then.’ Right then they made me a flight leader for nearly 150 recruits.” Immediately, his life began changing for the better. Suddenly, he was responsible for almost 150 others. In tip-top physical condition, he eventually was selected to join a crack Air Force division and ended up working in more than 15 countries, mostly in Central and South America. All throughout, he never shied away from telling people exactly what he thought or felt. Even though they had separated, he did learn a great deal from his father, who sometimes asked Haslip for help working on weekend home projects. His work ethic emerged from working alongside his father, who Haslip claimed was the hardest worker he had ever known. He also gained a work ethic from being in the Air Force, which had asked him to do physical and mental tasks he never thought possible. After a circuitous career path, his father became a City of Mankato official and eventually a building inspector for Minnesota Valley Action Council. Out of the military, he found immediate night employment in 1987 cleaning parts at Mankato-based Associated Finishing, a powder coating company. A quick year later, he began a stint with Petersen Construction in Waseca before landing a job at Lager’s in Mankato,

Powder Tuff

Associated Finishing Haslip has a good relationship with and lots of respect for his first employer, Associated Finishing of Mankato, another powder coating business. He said, “They are geared more toward powder coating smaller parts and we are geared more toward the larger, heavier parts. When they have a customer with a product that doesn’t efficiently work for them, they have had the customer call me directly or they ask me to call the customer. And it works the other way. For example, they are set up for powder coating 5,000 bolts. We’re not efficient doing that and would send that job to Associated Finishing. That’s how you keep a good relationship. As for people to deal with, you won’t find better.” 46

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Powder Werks | Lake Crystal

where he started in the car wash and worked his way up in the early ‘90s to shop foreman in charge of 18 mechanics. “While at Lager’s, I came to the conclusion that to get somewhere in life, I needed to make sure I listened and paid attention to people who were already on their way somewhere. At Lager’s, I met Randy Hoffman, a service writer. He taught me how to talk with people, communicate with respect, and not be overbearing. I had been pretty rough-cut. Randy is still a big part of my life—probably the biggest part right now. He’s the manager of First Line in the Cities, a distributor of food and beverage equipment.” In 1995, after his dad suggested joining his brothers in a familyowned construction company, Haslip Contracting, Haslip earned his contractor’s license. The business had plenty of work building and remodeling just about anything from barns needing fixing to buildings at the Minnesota Zoo. He liked working with three of his older brothers, yet at the same time wanted to run his own show. In 1998, he took what he remembered from Associated Finishing and began doing powder coating as a hobby in his garage using a kitchen oven. He had begun stock car racing a few years before and seen how the wealthier racers used powder coating to spray paint racecar exteriors and chassis. Soon, his six-car garage was inundated with powder coating work for friends and others. Finally, in 2003, after doing years of research, he brought along an employee from Haslip Contracting to start Powder Werks after the City of Lake Crystal offered industrial park land for just $1. He built the building himself. His older brother Darin was building inspector for the City of Lake Crystal.

“Efficiency in every aspect of business is key. For instance, I won’t go buy a sticky note pad if I have scratch paper to cut up. People don’t believe I run my business that way, but I do.” Since debuting in 2003, the plant size of Powder Werks has been growing at a manageable pace, initially with a basic 50x60 building, then 40x70 and later 30x40 additions, and now Powder Werks is in the process of adding on another 45x60 to occupy three adjacent buildings in the same industrial park. “Manageable growth” to Haslip equates to having a firm grip on

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Powder Tuff

overhead costs, which “is the first thing to take a business down when the economy struggles,” he said. “Many powder coaters fell to the wayside the last couple years mainly because of their overhead while our business flourished. Efficiency in every aspect of business is key. For instance, I won’t go buy a sticky note pad if I have scratch paper to cut up. People don’t believe I run my business that way, but I do. I turn the lights off when I’m not in a room. And I teach my employees—five really good employees—exactly the way I was taught. From the first day I opened until now, I have refused to be wasteful. And I won’t build and add on space until I absolutely must.” In this arena, he attributed much to his father, who grew up with conservative values during the Great Depression and to his long-time friend from his Lager’s days, Randy Hoffman, who still consults with him nearly every week. Hoffman has been not just a business mentor, but also one for life. The powder coating process is a form of electrostatic coating in which a metal part able to conduct electricity is grounded and placed

Powder Tuff

VROOM. VROOM. Damon Haslip began stock car racing after leaving the military in the late 1980s. His father, who quit racing himself in the late ‘70s after 28 years and 300 victories, bought his first stock car for him. Said Haslip, “My dad sent me to the track by myself and I didn’t know anything other than I had to go in circles and chase people. I have been racing 22 years and have had a good career. I’ve always said I’ll quit the day I think I can’t win anymore and I’m not at that point yet at age 47.” He has driven IMCA dirt-modified stock cars to 70 victories. His best racing experience occurred last year during a three-day period when he won an “all-star” race in Owatonna at the Steele County Free Fair, a race he had been trying to win for 15 years, and a major race at Arlington Raceway, which came with a six-foot trophy. Besides racing, he has been involved in helping manage Chateau Speedway in Lansing, Minnesota. Of managing a racetrack, he said, “I guess it would take $3 million to put up a basic 48

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SEPTEMBER/OCTOBER 2012

Powder Werks | Lake Crystal

in contact with the powder—a colored plastic polyester mix—that shoots through a paint gun at 100 kilovolts. The process is similar to two magnets of opposite poles bonding. The powder shoots from the gun and bonds to the metal before being cured through heating. “Powder coating is more environmentally friendly (than wet painting), which is one main reason I chose it,” he said. “I worked in a body shop and knew the chemicals and sprays were all hazardous. The plastic polyester blend I use isn’t. It’s something you can sweep up and place in a dumpster. We don’t have vapors and fumes. All chemicals used within the building are organic and can go down a drain without hurting the environment. That’s important to me.” Currently, agriculture-related manufacturers account for 85 percent of revenue, automotive and motorcycle customers about five percent, and industrial/commercial equipment manufacturers the last 10 percent. Powder Werks has 130 regular customers ranging in size from a smaller customer bringing in perhaps one item for painting a couple times a year to a larger manufacturer hauling in three semi loads in a day. Their market niche has been

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racetrack from scratch these days—and I mean basic, including a non-covered grandstand and no asphalt. There is so much dirt involved and that dirt is so expensive—it’s not the kind of dirt you find in a field. It’s formulated out of clay, and you have to haul it in to form the track, and most tracks in southern Minnesota are one-half mile. At Chateau Speedway, it took 65 loads of this dirt just to resurface the track. Of course, if you’re going to start a speedway, this doesn’t include the cost of land, and utilities and lights, and you aren’t guaranteed a profit.” Several years ago, some investors tried starting a racetrack adjacent to the ethanol plant west of Lake Crystal, which would have been the only racetrack within 50 miles of Mankato. Haslip said he had been “neutral” on the proposal, seeing both the positive and negative aspects. But then again, he would have loved having a racetrack so close to work—and much closer than Arlington or Fairmont. SEPTEMBER/OCTOBER 2012

CONNECT Business Magazine

Powder Werks | Lake Crystal

Powder Tuff

their painting of 7,000-pound, fifth-wheel, seed cart frames. Though living in Waseca, Haslip has no plans on moving his business anywhere. Lake Crystal and his employees have been very good to him. He has exceeded his original business plan sales projections by 70 percent and would like to own at least

two more powder coating facilities in other regions of Minnesota, but nowhere else. “I don’t plan on leaving Minnesota for any reason,” he said. Carlienne A. Frisch writes from Mankato.

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Powder Werks Location: 486 Scott Street Lake Crystal, MN 56055 Telephone: 507-726-6513

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HOT STARTZ!

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

MANKATO

Good Times Manufacturing

ART SIDNER

Though technically beginning in 2004, this business didn’t move out of Angela and Terry Beenken’s home to a facility at 1420 North Riverfront until about a year ago. “We had to move the business (out) because it had consumed every room of our home,” said 34-year-old Angela in a telephone interview. “Every single room was converted to business use. Then while looking for a building, we learned we were pregnant with our first child and really needed the space.” The business kind of lucked into its current specialty of screen printing. Terry started his work career while attending MSU in 1995. His mother was Filipino and had learned sewing in a Filipino factory. Terry learned sewing too, and with college buddies started a business manufacturing clothing accessories for major brands, such as DKY and BMX, before dissolving in 1998 due to growth and financial strain. Terry and Angela met in 2003, and in 2004 Terry went looking for sewing equipment in Iowa with the itch for starting another business. While there, he saw a screen printing press and purchased it for $200. The couple started Good Times Manufacturing in their home, with the two working as teachers and screen printing at night. In 2009, they couldn’t keep up with demand and quit their day jobs. It was then they purchased an automatic press allowing them to produce more at a quicker pace and higher quality. Today, the company has ten employees (including a

full-time artist) and screen prints for clients nationwide. Ninety percent of revenue comes from screen printing, which includes a growing line, GT Resort Wear. Remaining revenue comes from embroidery services and printing promotional products with business logos. Angela emphasized quality, saying, “Nothing leaves this shop without our stamp of approval.” The business receives goal and financial planning assistance from MSU Small Business Development Center. GOOD TIMES MANUFACTURING Location: 1420 North Riverfront Telephone: 507-388-2522 Web: goodtimesmfg.com

SEPTEMBER/OCTOBER 2012

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HOT STARTZ!

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

Tandem Bagels Co-owners Tony and Anne Frentz went back into the bagel business earlier this year, opening Tandem Bagels at Walnut and Second. Tony had helped build Bagel Brothers into five successful locations before selling out to a relative. The Mankato location eventually closed in 2002 at the height of the low-carb craze. The impetus for starting the new Tandem Bagels came in part from co-owner Anne. In a telephone interview, she said, “I was a stay-at-home mom for 11 years and eventually wanted to do something in business. Tony kept saying we should start a bagel store because people had been asking him to do one. So we decided on that.” While Tony renovated a former bar into a bagel shop, bought equipment, and has been the bookkeeper, Anne has added an international flair to her daily counter work at Tandem Bagels. Born and raised in Germany, she met Tony in Mankato after arriving here in 1994 to work as an au pair (a nanny) for Kent and Jane Schwickert. To get Tandem Bagels off the ground, Anne worked with Lisa Friend, now the manager, on the interior design and logo. Said 37-year-old Anne in a telephone interview, “Our bagels are made from scratch in our own bakery. We boil the bagels before baking, which is key. That makes them fluffy, but chewy. Our recipe is what we used with Bagel Brothers.” The shop sells a dozen flavors of bagels, bagel sandwiches, soups, salads, and baked goods. It tries using only local,

organic, and natural ingredients, and making everything fresh from scratch—even the cream cheese. Its best-selling sandwich has been the “Nicollet Bike Shop” that combines sliced turkey, avocado, cilantro, provolone cheese, lettuce, tomato, and onion. Sandwiches are named after local businesses. Said Anne, “I love all the people that come in. We try to have a happy, positive atmosphere. We have really good employees.” TANDEM BAGELS Location: 200 East Walnut Facebook: Tandem Bagels Website: tandembagels.com

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FAIRMONT

Sommer Outdoors Justin and Mary Sommer began Sommer Outdoors in Fairmont this March. Their business likely wouldn’t exist today without Justin’s love for art, a job offer for Mary, and their desire to return home. “We were both born in Fairmont,” said 31-year-old Justin Sommer in a Connect Business Magazine interview. “But I moved to St. Peter in fourth grade.” At St. Peter High, Justin used to draw and doodle and “was very artistic, perhaps too much in class,” he said. He started his work career washing dishes, and at St. Peter Hardee’s over the next couple years became a supervisor. In time, he was named assistant deli/ kitchen manager of Mankato Hilltop Hy-Vee. In 2000, Justin and Mary married, and two years later she graduated from college and accepted an occupational therapist job in Fairmont. Now Justin had to decide what he wanted for a career. Since taxidermy combined his love for art and the outdoors, he attended taxidermy school and would begin Wild Wings Studio part-time at home. In 2009, he took a job managing Hall Lake Cabins Bait and Tackle. In March 2012 and with the help of Fairmont EDA, he purchased and renamed the business Sommer Outdoors and combined it with Wild Wings Studio. “The new business has taxidermy, and we sell a lot of fishing goods such as poles,

lures, nets, bobbers, and live bait,” he said. “We sell ice and firewood. Most of my taxidermy work is done at home at night, (and the seasonality) will offset the slower fall and winter fishing season.” Sommer has earned fish and bird “master” status with the Minnesota Taxidermy Guild and Iowa Taxidermy Association. He said, “I like working with people and doing what I love to do. It doesn’t feel like work when you do what you like.” SOMMER OUTDOORS Location: 1547 Albion Avenue Phone: 507-235-5225 Hours: Open 7-7 every day

JEFF SILKER

To be considered for one of three spots in the November 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.

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PRESS RELEASES

To submit a press release for publication:

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

Blue Earth From Express Diagnostics Int’l: The DrugCheck SalivaScan Oral Fluid Drug Test has the industry’s first sponge saturation indicator that helps administrators avoid discarding tests; the company named Rich Strasser as chief operation officer.

FAIRMONT

Fairmont Area Foundation Fairmont Area Foundation granted $34,800 to area community organizations.

Fairmont From the Chamber: New members include Shoe Sensation and Fairmont Eagles Club 3394; and new businesses include Lakeview Funeral Home Crematorium and Precision Carpet & Upholstery Care. Mayo Clinic Health System (Fairmont) awarded three $750 college scholarships to students intending on entering healthrelated fields.

Call Karla VanEman today! (507) 345-4040

Eunoia Family Resource Center moved to 1420 N. State Street and added Dr. Brandon Scott Dugan, licensed psychologist.

Lake Crystal From the Chamber: Dylan Tate of New York Life Insurance is a new board member; Deal Family Chiropractic and Wellness Center celebrated 25 years in business; and the 12th Annual Knights Night occurs September 22 at LCWM Secondary School to support student athletes.

Le Sueur At the Food Safety Summit in Washington, D.C., Russell Associates introduced its new mobile device-delivered, “inspectiTRAC” automated inspection and observation software.

Mankato Taco John’s celebrated 40 years of business in Mankato. Paulsen Architects hired project architect Jeremy Wiesen, AIA, LEED AP. Marco acquired TelServ Communications, a voice communications, data networking, and managed IT services provider in Aberdeen, South Dakota.

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Mankato Area March of Dimes holds its 2012 Signature Chefs Auction on Thursday October 11. For more information and to reserve a table, contact Barb Dorn at 507388-6342 or bdorn@marchofdimes.com. Educare Foundation approved five “Ed Waltman Mini Grants” ranging from $200 to $500 each to help Mankato Area Public Schools offer enhanced educational opportunities. MTU Onsite Energy celebration of 60 years in business featured Mayor Eric Anderson as a speaker. Eide Bailly promoted Chris Austin to senior manager; and Brian Haley and Eric Plath as managers. From Blethen, Gage & Krause: the law firm added attorney Amy Lipetzky, who practices in family and employment law, personal injury, insurance, and general litigation; and attorney Jim Turk was named a Minnesota Super Lawyer in alternative dispute resolution. Modern Woodmen of America Mankato chapter, through sponsoring a golf MANKATO

Manahan and Bluth Law Office Joseph Bluth of Manahan and Bluth Law Office was selected for inclusion in the 2012 edition of The Best Lawyers in America in family law.

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Marco Star Tribune named Marco to its Top 100 Workplaces in Minnesota list for the third consecutive year.

tournament, raised more than $8,000 for One Bright Star, which included $2,500 matched by Modern Woodmen. Star Tribune named Ecumen and 60 other companies a “National Standard Setter.” From HickoryTech: winner of the 201213 phone book cover contest was Loren Pietsch; subsidiary Enventis achieved Cisco Cloud Builder Designation within the Cisco Cloud Partner Program; Dimas Lopez joined the company as vice president of product marketing; and The HickoryTech Foundation is sponsoring the Mankato Symphony Orchestra 2012-2013 Family Concert Series “Mozart in Me.” From Region Nine Development Commission: the organization hired Isaac Kerry as resource development specialist, which includes grant writing; board appointments include Brad Ahrenstorff (Lake Crystal), Gary Sturm (St. James), and Bob Roesler (Sherburn); and Abdi Sabrie, executive director of African Family & Education Center, was named to the Commission’s minority population position. From Schwickert’s: Associated Builders

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PRESS RELEASES

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and Contractors named Schwickert’s Tecta America as a “STEP—Platinum level” award winner for safety achievement; CertainTeed Corporation at a Roofers Advisory Council named the company a “Keys to Success” award winner; and the company opened a Metro location in New Hope. Bolton & Menk opened an office July 1 in Rochester that is managed by Brian Malm. Anna Thill of Greater Mankato Convention & Visitors Bureau earned Certified Destination Management Executive (CDME) designation through Destination Marketing Association International. Inspired Aging was featured in YogaFit magazine. Paulsen Architects employee Greg Prunty earned his professional engineering license by passing the National Council of Examiners for Engineering and Surveying exam. Mitt Norland of Investors Financial Group opened a new office in the Midwest Plaza building at 1203 Caledonia. From Greater Mankato Growth: Forbes ranked Mankato No. 11 on its “Best Small Places for Business and Careers” listing; the board renewed President Jonathan Zierdt’s contract through 2017; the organization re-launched its greatermankato.com website; Greater Mankato Growth and GIS Planning launched greatermankatoproperties.com to provide data to businesses interested in starting up, expanding or locating; and new members include Natural Pathways, Rivendell Café, The Buzz, Rabo AgriFinance, Blue Cross & Blue

SEPTEMBER/OCTOBER 2012

Shield of MN, Southern Minnesota Surgical, Investors Financial Group, Werner Electric Supply, Custom Craft Cabinets, and PresenceMaker. Country Inn & Suites by Carlson earned TripAdvisor’s 2012 Certificate of Excellence award. Star Tribune named Lloyd Management to its Top 100 Workplaces in Minnesota listing. Shelly Bartlett and Jasmine Bartlett of IndiGO Organic attended the Intelligent Nutrients, INmotion advanced education series in Minneapolis.

Madelia From the Chamber: June and July Businesses of the Month were Sorenson Farms and TLC Total Lawn Care and Snow Removal, respectively.

New Ulm From New Ulm Area Chamber: new Chamber members include New Ulm Event Center, Artisans at the Grand, River Valley Window & Door Co./Gutter Cutters, and Lime Valley Advertising; Cindy Winters joined Hearts Beat Back as community programs and public policy

NEW ULM

New Ulm Medical Center From Ne w Ulm Me dic al Center: the Center hired family medicine physician Dr. Annette Schmit-Cline; and the Center earned the Avatar International “Exceeding Patient Expectations” award for the second straight year.

specialist; Michael Siewert became the new owner of Valley View Electric; Brittney Kral joined Jensen Motors as a salesperson; Ground Zero had an open house for its new Courtland facility; Citizens Bank had an open house for its new conference Center; Eric Bode of New Ulm Real Estate earned his Graduate Realtor Institute (GRI) designation; The floral, gift, and coffee shop A2Zinnia opened at Broadway and 1st Street South; and Chamber board nominees include Shari Fischer (Somsen, Mueller, Lowther & Franta), Betsy Pieser (New Ulm Furniture), Sarah Weidman (Beacon Promotions), and Mike Wise (Connecting Point Technology). Allina Health through its Neighborhood Health Connection awarded free health screenings and cash grants that benefit through New Ulm Medical Center about 2,500 area people. Beacon Promotions acquired The Imagery Group. Attorney David Hoelmer, who practices agriculture and business law, joined law firm Gislason & Hunter.

North Mankato Southern Minnesota Surgical held an open house at its new 223 Belgrade Avenue location.

St. James President David Krause of Pioneer Bank promoted Brenda Beltz to chief technology officer and Kate Monnens to vice president operations. From Mayo Clinic Health System (St. James): the Clinic hired Dr. Majestic Tam to provide ENT services, Becky Bailey as a urologist, and Jen Nelson as lead lab tech.

St. Peter Digital illustrator Matt J. Borowy opened Bright Pixel Design.

From the Chamber: New members includes Zender Insurance Agency—State Farm Insurance; the Chamber held a ribbon cutting for Sew Boutique at 213 South Minnesota.

ST. PETER

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Sherburn MVTV Wireless expanded its broadband service footprint to include Comfrey and Sherburn.

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From the Chamber: Pantheon Computer Systems hired senior network engineer Jim Panos; First National Bank Waseca promoted Julie Kelly to compliance officer; Rhino Marking & Protection Systems hired new supply chain manager Deb Gregor; Waseca Community Education and Recreation hired director Cori Sendle; Service Master/ Waseca has a new building location at 515 South State; Ag Power Enterprises opened a new 65,000 sq. ft. building; Associated Lumber Marts celebrated 50 years of being a family owned business; Brad Connors of Investment Centers of America was recognized as one of the company’s top ten representatives; and new Chamber members include R & T Farms, Britton Plumbing and Heating, Pearl Button Primitives, and Abraham Consulting Technologies.

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NATIONAL OPINION

Thirty years ago, Chile was a basket case. A socialist government in the 1970s had crippled the economy and destabilized society, leading to civil unrest and a military coup. Given the dismal situation, it’s no surprise Chile’s economy was moribund and other Latin American countries, such as Mexico, Venezuela, and Argentina, had about twice as much per-capita economic output. Today, by contrast, Chile has passed Argentina to become the richest nation in all Latin America. For three decades, it has been the fastest-growing economy in the region. Poverty has fallen dramatically, and living standards have soared. Let’s look at how Chile became the Latin Tiger. Pension reform is the best-known economic reform in Chile. Ever since the early 1980s, workers have been allowed to put 10 percent of their income into a personal retirement account. This system, implemented by José Piñera, has been remarkably successful, reducing the burden of taxes and spending and increasing saving and investment, while also producing a 50-100 percent increase in retirement benefits. Chile is now a nation of capitalists. But it takes

a lot more than entitlement reform, however impressive, to turn a nation into an economic success story. What made Chile special was across-the-board economic liberalization. Regarding business taxation, retained profits used to be taxed at almost 50 percent, but the tax rate was dropped to 10 percent in 1984. It hasn’t stayed at that low level, but the rate has remained below 20 percent, so the tax system isn’t a big barrier to production and businesses have freedom to invest more. Chile’s score for size of government shows significant improvement since 1975. The pension reform presumably helped, as did reforms that lowered the top income tax rate from 58 percent in 1980 to 40 percent in 2005. But even that 40 percent rate doesn’t capture the full benefits of reform. Personal income tax brackets were widened, helping many people protect more Daniel Mitchell of their income from the government, and investors and entrepreneurs can benefit from lower tax rates by setting up businesses. Not surprisingly, lower tax rates generated many benefits. Chile cut out many of the loopholes that favored certain interest groups and encouraged inefficient economic choices. Tax evasion dropped significantly because businesses didn’t have to pay as much and their taxes became less complicated. Indeed, the government collected more total revenue because of the lower tax evasion. According

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to Friedrich Schneider’s data on shadow economies (measuring “market-based legal production of goods and services that are deliberately concealed from public authorities”), Chile has the smallest underground economy in the region, with a country average score of 20.3. In comparison, Colombia scores a 41, Mexico a 30.2, El Salvador a 47.4, Ecuador a 36.6, and Brazil a 40.5. Chile’s former finance minister, Hernán Büchi, wrote a book about Chile’s transformation, and he outlines the massive privatization plan that generated substantial benefits. Some of the major sales included the fuel distributor Copec, the main electric company Endesa, telephone and steel companies, and some of the banks, which took on private investors. The newly privatized companies had much more opportunity for development and expansion, exports increased, and new enterprises began to grow. Helped by the privatization of these companies, Chile maintains a fairly good score for property rights. This has been especially evident in the mining sector. Büchi mentions how private investors entered the scene and production costs fell while production went up. This was seen around the country as markets were deregulated and private property rights were protected. The access to sound money score improved dramatically between 1980 and 2010 as inflation decreased to less than five percent and freedom to have foreign bank accounts increased. Along with expanding foreign currency freedom, Chile also improved its score in freedom to trade internationally. Export taxes, previously a crippling barrier, were almost eliminated, allowing foreign competition into the market. According to Büchi, domestic saving has risen to 18 percent and the average tariff dropped from 105 to 57 percent. In 1979, a 10 percent uniform tariff was put in place. Büchi notes that as a result of these reforms, Chile’s exports went from $3.8 billion to $8.1 billion from 1985 to 1989. The regulatory burden also was decreased. The World Bank reports that it used to take up to 27 days to begin a new business in Chile; it now takes seven. Büchi mentions that investment rose from 11.3 percent of the GDP in 1982 to 20.3 percent in 1989. Domestic saving also rose during that time, from 2.1 percent of the GDP to 17.2 percent. As businesses experienced greater freedom to expand and develop, Chile saw more innovation with higher profits and savings. So what does all this mean? Looking at per-capita economic output in the major Latin American nations in 1980-2008, Chile was near the bottom in 1980 and now leads the pack. This has meant good things for all segments of the population. The number of people below the poverty line dropped from 40 percent to 20 percent between 1985 and 1997 and then to 15.1 percent in 2009. Public debt is now under 10 percent of GDP and after 1983 GDP grew an average of 4.6 percent per year. But growth isn’t a random event. Chile has prospered because the burden of government has declined. Chile is now ranked number one for freedom in its region and number seven in the world, even ahead of the United States. The lesson from Chile is that free markets and small government are a recipe for prosperity. The key for other developing nations is to figure out how to achieve these benefits without first suffering through a period of socialist tyranny and military dictatorship. Daniel Mitchell is a senior fellow at the Cato Institute. Julia Morriss is studying Law and Society at American University in Washington, D.C. This article appeared in Daily Caller on July 18, 2012.

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