MN Valley Business by Free Press Media

The Definitive Business Journal for the Greater Minnesota River Valley Januar y 2020

Stephanie Fischer, director of healthy living at the YMCA. Photo by Pat Christman

New Year’s Resolution

Fitness businesses keep on coming Also in this issue • SWEET ALICE FLORAL SHOP IN ST. PETER • KATO DETAIL BROS. • THE PINBALL PLACE IN NEW ULM

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Parenting Time Modification; What is the Standard? Sam Courtney, Attorney, Gislason & Hunter LLP

innesota has two statutes that seemingly set the standard for courts to decide whether to modify an order for parenting time. Minnesota Statute Section 518.175 governs parenting time, and subdivision 5(b) provides that the court shall modify parenting time if the modification would not change the child’s primary residence and if the modification would serve the best interests of the child. The Minnesota Supreme Court dubbed this the “best interest” standard. Minnesota Statute Section 518.18 governs modifications of a prior custody order, and provides that the petitioning party must make a showing of the following: (1) the circumstances of the children or custodian have changed; (2) modification would serve the children’s best interests; (3) the children’s present environment endangers their physical

health, emotional health, or emotional development; and (4) the benefits of the change outweigh its detriments with respect to the children. The Minnesota Supreme Court dubbed this the “endangerment” standard. Proving that a child’s environment is endangering their health is a tall order, so applying the appropriate standard is crucial. If the proposed parenting time modification would be a substantial change, the court may find it to be a “de facto” custody modification even if the petitioning party is not technically requesting a modification to physical or legal custody. For example, if Mother has sole physical custody and Father is asking for 90% of the parenting time, a court would likely find Father’s request to be a “de facto” custody modification and thus apply the endangerment standard.

Conversely, if two parents have joint physical custody and one parent wants to increase their parenting time from 45% to 52%, a court is less likely to apply the endangerment standard and instead apply the best interest factors. Whether a proposed parenting time modification is substantial depends on the “totality of the circumstances.” The Minnesota Supreme Court highlighted factors such as the child’s age, school schedule, and the distance between the two parties’ homes as contributing factors to whether the proposed change is substantial. If you are considering bringing a motion to modify parenting time, it is important to discuss with a knowledgeable attorney how the court might perceive the significance of the modification, and whether the court will likely apply the best interest or endangerment standard.

MN Valley Business • JANUARY 2020 • 1

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F E A T U R E S Januar y 2020 • Volume 12, Issue 4

Mankato has gone from just a few fitness places several years ago to a growing selection of centers that offer everything from bikes to cross fit and personal training.

Anis Abdullahi, Jake Neumann and Nuradin Yasin were high school friends who started a mobile vehicle detailing business that now has a permanent location.

Sara Nett’s Sweet Alice floral shop on the main drag in St. Peter is all about sustainability, from local flower sourcing to recycling everything she can.

John Vorwerk’s love of pinball machines grew into a collection of 130 machines, leading Vorwerk and his wife Phyllis to open The Pinball Palace in New Ulm.

MN Valley Business • JANUARY 2020 • 3

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JANUARY 2020 • VOLUME 12, ISSUE 4

By Joe Spear

PUBLISHER Steve Jameson EXECUTIVE EDITOR Joe Spear ASSOCIATE EDITOR Tim Krohn CONTRIBUTING Tim Krohn WRITERS Kent Thiesse Dan Greenwood Dean Swanson

PHOTOGRAPHERS Pat Christman Jackson Forderer COVER PHOTO Pat Christman PAGE DESIGNER Christina Sankey ADVERTISING Danny Creel Sales Joan Streit Jordan Greer-Friesz Josh Zimmerman Marianne Carlson Theresa Haefner ADVERTISING Barb Wass ASSISTANT ADVERTISING Sue Hammar DESIGNERS Christina Sankey CIRCULATION Justin Niles DIRECTOR For editorial inquiries, call Tim Krohn at 507-344-6383. For advertising, call 344-6364, or e-mail advertising@mankatofreepress.com. MN Valley Business is published by The Free Press Media monthly at 418 South 2nd Street Mankato MN 56001.

■ Local Business memos/ Company news.....................................5 ■ Business Commentary.........................6 ■ Business and Industry trends..........22 ■ Retail trends.....................................23 ■ Agriculture Outlook..........................24 ■ Agribusiness trends..........................25 ■ Construction, real estate trends.....26 ■ Gas trends........................................27 ■ Stocks...............................................27 ■ Minnesota Business updates............28 ■ Job trends.........................................29 ■ Schmidt Foundation.........................30 ■ Greater Mankato Growth..................32 ■ Greater Mankato Growth Member Activities ............................33

From the editor

Big Ideas. Big Business.

ankato’s third largest employer is aiming to invest $130 million or more in capital improvements to its Mankato “plant” in the next few years. Minnesota State University, of course, with approximately 1,400 full time employees is looking to replace its major classroom building and build a new football stadium. That’s the plan MSU President Richard Davenport recently laid out for members of The Free Press editorial board. We often don’t automatically think of universities as businesses that produce products, but they’re every bit as much of a business as say a major manufacturing plant. But they build more than a product. They build knowledge in students who will become CEOs, technology executives, entrepreneurs and much more. Plans to replace Armstrong Hall with a new classroom building would require about a $97 million investment. Replacing Blakeslee Stadium and creating a new multipurpose stadium will cost about $30 million. The university plans new oncampus housing using 13 acres of land the university foundation owns so it would be privately operated. The plan might include a so-called fraternity row that would include a handful of house-like type residences. The demand for student oncampus housing is growing, according to Davenport, a trend opposite what traditionally has been a need for upper classmen to live off campus. The university currently leases about 350 units of private apartments for student housing. With about 3,500 units of on campus housing, Davenport said the university needs to get up to 4,000. Davenport notes MSU has done much better than other state universities maintaining

4 • JANUARY 2020 • MN Valley Business

enrollment. While places like St. Cloud and Bemidji have lost 6 to 8 percent enrollment, Mankato has been flat, losing only 53 students this year. It also spends a lot of money on marketing. The University of Minnesota is emerging as Mankato’s biggest competitor as the Twin Cities campus aims for more and more transfer students. MSU has a significant marketing budget and has even bought an advertising wrap on a light rail train that goes through the U of M campus. Still, Davenport notes there are challenges for MSU. Retention of students remains a major problem. “Students are slipping through the cracks,” he said. MSU loses most at the sophomore class level. So Davenport has put a strategy in place for retention. He has appointed Lynn Akey to the new vice president for Student Success, Analytics and Integrated Planning position. She and her team will monitor students every step of the way and work with advisers and academic coaches to make sure students stay in school and make it through that critical sophomore year. Davenport is bullish on MSU growth. “Our institution will continue to grow. There’s no question about it.” He estimated if the retention would have been just 10 percent higher in recent past, MSU would be well on its way to growing enrollment to 18,000 or 19,000 students, instead of the 14,000. The university still faces a challenge with getting students through in four years. A mapping program started several years ago to help students get through in four years faltered because the mapping could be set up, but the physical scheduling of classes didn’t work at first. They’re on their way to correcting that

problem. The university is also trying to meet the needs of the market. Some 35 low enrollment programs have been “suspended,” as Davenport notes 80 percent of the students are in 20 percent of the programs. Faculty have not been laid off as they have abilities where they can teach in other disciplines. Davenport notes MSU only “suspends” the programs in case there is an increase in demand for them at some time in the future. That can make it easier to resurrect them. And of course, the racial divide continues to be a challenge. Students of color have a 10 to 15 percent graduation gap compared to white students. It’s a problem, Davenport says is “not easy” to solve, and it will be even a greater challenge in the future. By 2030, there will be a 70 percent increase in students of color graduates while the white graduates will increase just 1 percent. But even as MSU continues to be a “big business with big ideas,” it has been unable to build a new building for a college of business. Davenport has been trying to raise money for 10 years and admits it’s been a failed effort. He’s redoubling his efforts though and resigning from many local boards including Greater Mankato Growth so he can devote more time to fundraising, an increasingly required duty for university presidents. Joe Spear is executive editor of Minnesota Valley Business. Contact him at jspear@mankatofreepress.com or 344-6382. Follow on Twitter @jfspear.

Local Business People/Company News ■

Kuiper joins Commerce Dental

Meshke joins MinnStar

Dentist Blake Kuiper has joined Commerce Drive Dental Group in North Mankato. She is originally from Emmetsburg, Iowa. Kuiper completed her dental training at The University of Iowa College of Dentistry and Dental Clinics, where she earned a Distinction in Dental Public Health. Upon graduating dental school, Dr. Kuiper practiced dentistry in Columbus, Ohio, before relocating to be close to family. She has a special interest in esthetic dentistry. ■■■

Geistfeld retires from Citizens

Lou Geistfeld, president and CEO of Citizens Bank Minnesota has retired after 44 years in the banking industry; thirty-eight of those with Citizens. Geistfeld, a native of Vernon Center, began his career in 1975 as an assistant bank examiner for the Federal Deposit Insurance Corporation and later became a commissioned bank examiner. He joined Citizens in 1981 as an assistant vice president and was promoted to president/CEO in 1987. He will remain an active member of the board of directors. When Geistfeld joined Citizens, the bank had one main location in New Ulm, assets of $44 million. They now have three more branches, in Lafayette, LaSalle and Lakeville, with assets of $430 million.

Brent Meshke has joined MinnStar Bank as junior ag lender. In 2016 Meshke graduated from South Dakota State University, with a degree in agriculture business management and animal science. He was a sales agronomist for Crystal Valley Coop. He grew up on a farm in Garden City Township. ■■■

Willaert joins OFC

Suzanne Willaert has joined the Orthopaedic & Fracture Clinic as chief financial officer. She has over 20 years of experience in financial and accounting related industries. Willaert was raised in Mankato and returned in 1999 after attending college and starting her career outside of the area. ■■■

Schugel joins True

Molly Schugel has joined True Real Estate as a real estate agent. Schugel grew up outside of Mankato and earned an associate degree in 2014 from South Central College. She worked in human resources and recruiting for eight years at her family’s trucking business in New Ulm before pursuing real estate. Schugel also currently works part-time as a design assistant in Mankato and just recently finished staging a home for the Fall Tour of Homes which won the People’s Choice Award. ■■■

Fredrikson moves to new office

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Law firm Fredrikson & Byron has moved into a new office space in the Eide Bailly Center building located at 111 South 2nd Street in Mankato, Minn., where it occupies most of the fourth floor. The office is staffed by attorneys Jessica Buchert, Michael Jacobs, David Naples and Randy Zellmer.

MN Valley Business • JANUARY 2020 • 5

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Business Commentary

By Dean Swanson

Select your new business name carefully

hile mentoring a potential new business, a common discussion is “how do I select a good business name”? That is a good topic for discussion because your business name will be forever tied to the identity of your brand. Done right, and you’ll have a company that’s instantly memorable, distinctive and unique. Done wrong, and you’ll be stuck with a name that will be tough to shake. So, how do you come up with a business name that succinctly captures the qualities that makes your business so special and unique? One of SCORE’s content partners, Deluxe Corporation has provided some excellent help on this topic and I will share some suggestions from their contribution. First it should start with you knowing your business’s mission. Before you can come up with a worthy name, you must first have clarity about your business’s purpose, its target market, and the image you want to create for it. A mission statement is the perfect place to start. The right mission statement can describe your philosophy, your culture, and your outlook on the world. Here are five excellent examples that illustrate how your business name can do this: n Uber: “We ignite opportunity by setting the world in motion.” n Kickstarter: “To help bring creative projects to life.” n Life is Good: “Spreading the power of optimism.” n TED: “Spread ideas.” n Wawa: “Fulfilling lives every day.”

Once your mission statement is established, a business concept statement or business plan can help flesh out the details. You may want to start brainstorming. At the brainstorming stage, your goal is to think of as many business names as possible, so don’t rule anything out just yet. Inspiration can come from friends, family, books, websites, magazines, TV shows—you name it. As you brainstorm, keep these questions in mind: 1. What emotion do you want your business name to convey? An old-fashioned business, such as an ice cream parlor or candy store, could benefit from a longer, nostalgic name with terms like “Emporium” or “Vintage.” Consumer-oriented tech companies often try to “warm up” their products or services with short, simple names like Slack or Twitch. Business-to-business products or services tend to have straightforward names, such as Salesforce or QuickBooks.

6 • JANUARY 2020 • MN Valley Business

Also, don’t forget that it is good to get feedback. Once you have a few names you really like, get other people’s opinions. 2. Is shorter better? Customers today are busy and swamped with information, which is one reason that short, simple business names like Uber and Etsy are popular. These names are easy to read at a glance, and they stand out because they’re unusual, which makes them memorable. 3. Do you have a regional or local advantage? Some cities or parts of the country have a certain cachet—for example, artisanal foods from Brooklyn, craft beers from Portland or barbecue sauce from Memphis. If it fits your business, consider incorporating your locale into your business name. For example, consider Boston Market or Nantucket Nectars. 4. Are you thinking ahead? Make sure your business name isn’t too narrowly focused— otherwise, as your company grows and you begin to add new products and services, you might have to change your name entirely. Your business name should be specific enough to convey what you sell now, but also include room for growth. 5. How does it look? How will the business name translate to a logo, and how will that logo (and name) look online? In today’s increasingly visual world, your business logo needs to be readable in all sizes—from a 10-foot-wide store sign to a thumbnail on your Twitter feed.

Then, test it out. Narrow down your list by putting the names through the wringer. Use these tests to ensure name viability: n Is the business name easy to say? n Is the business name easy to spell? n Does the business name mean anything silly, insulting or offensive in another language (or even in English)? n Is the business name confusing when typed in all lowercase, like in the URL of a website, for example? n Is the business name similar enough to any of your competitors’ names that it could legitimately cause confusion, spark accusations of copying or land you in court? n Is the business name trademarked? Do a trademark search at uspto.gov to make sure. n Is a website domain available for the business name? A search for “domain names” will uncover many sites where you can search for registered domains. To see if someone already owns the domain, just type in the business name you’re considering. If it is owned by someone else, the site will suggest alternatives or even offer to broker a purchase. Your domain name doesn’t have to be exactly the same as your business name, but it should be close enough that people can easily identify it. Also, don’t forget that it is good to get feedback. Once you have a few names you really like, get other people’s opinions. Consider holding a focus group of prospective customers in your target market, either in person or via an online or social media poll. Ask them what they think this business does, what kinds of people they think would buy from this business, and what feeling this business name gives them.

Dean Swanson is a volunteer certified SCORE mentor and former SCORE chapter chair, district director, and regional vice president for the north west region.

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Chad Ziemke, general manager of Fitness for $10 in Mankato.

Keeping Fit Growing variety of fitness centers locally By Tim Krohn | Photos by Pat Christman

t’s a busy time of year for fitness clubs as people start the new year with a pledge to get in better shape and lose a little weight. For those in the Mankato area, choices are more abundant than ever. Ben Janike started Kato CrossFit in 2012 and has seen the growth. “When I started, it was basically the Y, us, Anytime Fitness and Snap Fitness in North Mankato. Now there are at least six gyms that do group training or personal training, which is good to see. We all do well. It shows the community is dedicated to fitness.”

While activities such as biking, treadmills and weights always have been at the core of fitness centers, there is always something new. “Sometimes trends don’t last long, but when they’re hot, you want to jump on them. Whatever gets people in and moving,” said Stephanie Fischer, director of healthy living at the YMCA. The latest trend at the Y is Fly Bungee, in which people are in harnesses that are attached to a bungee cord above, allowing them to use the bungee’s

Cover Story

8 • JANUARY 2020 • MN Valley Business

resistance while they jump, do burpees, dance and perform other moves. “It’s about overall movement, heart rate, agility. It’s sort of like yoga but you’re suspended. We’ll be the only gym to have it,” Fischer said. Chad Ziemke, general manager of Fitness for $10 in Mankato, said lots of new offerings come and go in the industry. “The fitness industry is very trendy. We try to stick to the proven methods of what works. We’re always looking for new things, but if you look back, it comes back to the same things.”

Fitness for $10

Fitness for $10, owned by Tom Scheman, who is also president of Rooms and Rest furniture, expanded in 2018 after quickly outgrowing its space on the Madison Avenue hilltop. “It’s 24,000 square feet. It’s a good size,” Ziemke said. “We added a lot of classes when we expanded. Personal training, small-group training, a cycle studio, cross-training classes. We have 60-70 classes a week and three personal trainers. It’s switched from being a club with just equipment to classes also.” He said small groups led by a personal trainer has benefits. “It is more cost-effective. We have up to four people and it’s an hour instead of a half hour. People thrive in a group and they get to know each other and encourage each other,” Ziemke said. The reason people don’t work out is time. And the human mind likes a schedule, so if a class is scheduled, you’re more likely to come. And people aren’t sure what to do if they just go to a gym with a bunch of equipment.” He said cycling classes are by far the most popular. They also offer the Les Mills Body Pump program, a barbell workout using light to moderate weights with numerous repetitions. The club has a $10 monthly membership that allows for access to the equipment in the club but not studio classes. For $29.99 a month people can also choose from about 50 classes a week.

A pair of men exercise with a personal trainer at Fitness for $10. The monitor on the wall displays heart rate information for people working out that wear a device on their chest.

The club has a $10 monthly membership that allows for access to the equipment in the club but not studio classes. For $29.99 a month people can also choose from about 50 classes a week.

Ziemer said technology also has advanced exercise. Myzone is a wearable heart rate system that uses wireless and cloud technology to monitor physical activity. “It’s 99.7% accurate to an EKG. Your reading pops up on big TV screens. It gives you percentage of heart rate and effort level. And with our app you can see how many calories you burned.” People earn badges for attaining different levels, with the top badge taking five years to earn. “That’s really blown up.”

MN Valley Business • JANUARY 2020 • 9

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Left: Ben Janike of Kato Crossfit. Right: The weight lifting area is a popular spot at Kato CrossFit.

Kato CrossFit

Janike, who has a degree in human performance from Minnesota State University, worked for eight years as a trainer and gym manager for another fitness center before deciding to open his own center. He describes Kato CrossFit, on North Riverfront Drive, as “a house of wellness under one roof.” With seven coaches and 300 members, the business offers nine classes a day with 10-15 people in a class. “I like group stuff. It brings back the community aspect of fitness. It helps people excel more quickly.” Janike said January, late spring and early fall are big times for getting new members and a large majority of people are looking at weight loss as a priority. They work with people at all levels of fitness. “The big thing for us is it doesn’t matter if you’re in shape or not. People think they need to be in shape before they come here, but that’s not true. Most come in and probably can’t do a pushup,” he said. “Our mission is to not get hurt. We do varied function units at high intensity. The newer ones are doing fewer technical moves and they progress from there with a coach watching them. We also do personal training.” They also now have a physical therapist and operate a nutrition and supplement shop out of CrossFit. He said that many may be surprised that the most popular type of workout is weight lifting once members are introduced to it.

“People like lifting weights. About 70 percent of our clients are ladies and lifting weights is almost always their favorite thing to do. Whether they’re starting out or veterans,” he said. “I think people are intimidated by weights, and once they learn about them, it’s not so intimidating. We do a lot of burpees and things, too, so in most people’s eyes weights are better than doing burpees. Plus we emphasize strength training and using weights. “But we use all methods of fitness.”

“The big thing for us is it doesn’t matter if you’re in shape or not. People think they need to be in shape before they come here, but that’s not true. Most come in and probably can’t do a pushup,” he said. MN Valley Business • JANUARY 2020 • 11

Top: A popular aerobics class at the Mankato YMCA. Right: Treadmills at the YMCA.

YMCA

Fischer said the most popular fitness regimens at the Y in recent years are cycling and cross training. “We’re always working on getting new bikes and spiffing up our cycling.” Beyond the free weight gym, the Y has a Y Fit Gym aimed at functional fitness. “Functional training is people moving the way they do in their everyday life. Mostly using your body weight for resistance. Your body is your machine.” While treadmills and elliptical bikes are always popular, she said many people like cycling as part of a group class. “It’s especially popular in Minnesota where we have six months indoors. It’s always been popular but there’s been an uptick.” The Y offers 125 different types of classes a week that are included in the membership. “Child care is free. We’ve changed that to bring more value.”

12 • JANUARY 2020 • MN Valley Business

Memberships are $30 for individuals or $60 for family. “Unlike other gyms, we offer financial assistance so anyone can sign up.” The Y also has a lap and a recreational pool where water aerobics are done. The gyms increasingly are used by pickleball players. “It’s very popular. We still have guys who do racquetball, but it’s not as popular as it was. The racquetball courts are getting conver ted to pickleball,” she said. “We really do have something for everyone.” MV

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From left, Ahmed Abdulkadir, Nuradin Yasin, Anis Abdullahi and Hassan Adam.

In the details

Friends start Kato Detail Bros. By Dan Greenwood Photos by Pat Christman

hile the game of soccer brought Neumann, who had experience detailing Anis Abdullahi, Jake Neumann vehicles with his father at a young age, and Nuradin Yasin together as knew he wanted to start his own business, kids, it was a mutual and said it was natural to strong work ethic that start out with detailing inspired the three because it’s a business friends to start their he says is popular and in own business while two demand. KATO DETAIL BROS of them were still in Neumann and 1002 Belle Ave, Mankato high school. Abdullahi were still 507-351-1034 That work ethic has seniors at Mankato West paid off. After two years High School in early Katodetailbros.com of detailing vehicles on 2018 when they formed site, the three friends the mobile detailing now have a permanent business with Yasin, location at 1002 Belle Avenue in Mankato who graduated the previous year. Operating called Kato Detail Bros., which they coout of a van, they brought their supplies to own together. deep clean customers’ vehicles parked at

Cover Spotlight

16 • DECEMBER 2019 • MN Valley Business

their workplaces or homes. “That was an easy way of getting around having to pay rent right up front,” he said. “It gave us a little time to build the business and get more experience.” A b d u l l a h i remembers their first customer – an elderly woman who lived by the North Mankato Public Librar y and found their company Facebook page – a platform he said was instr umental in connecting with new customers. “I have a bit of experience with Facebook marketing,” Abdullahi said. “With that we were able to Ahmed Abdulkadir works on a car in Kato Detailing’s shop. push out ads and deals. That’s how we “I went to school for a couple got our first clients and after that months and decided it wasn’t for it was word of mouth.” me, the same with Nuradin,” From the very beginning, the Abdullahi said. “Jake was a pilot three have made it a priority to go for a little bit,” Abdullahi said. above and beyond their But to be a full-time business, customers’ expectations. they would need to find a “We consider ourselves the permanent home so they could best in the area for the money work on vehicles year-round. that you’re paying,” Neumann “Weather is actually the main said. “We try to get the vehicle reason we moved in here because looking as close to stock, as close it doesn’t work to detail in the as when it left the factory as middle of winter,” Neumann said. possible and we take pride in that; Neumann said when they first anything that’s going to get your set foot in the building – a former car clean, we can do it.” T-shirt printing company and a Word of the mobile detailing Department of Motor Vehicles business spread fast from office before that – they customers who recommended immediately knew the building Kato Detail Bros. to others. The would need a lot of work. The first summer proved to be walls were covered in pink and successful, and the friends had to tan paint, the trim was falling off, book appointments weeks in and the ceiling and carpets were advance to keep up with demand. stained; but the setup itself was It wasn’t until the three friends nearly ideal. enrolled in college that they “Having the garage space and realized they wanted their the interior space here was a detailing business to be more good combo,” Neumann said. “So than a part-time, seasonal job. even though it was in rough shape, it felt like the perfect A permanent home place.” After graduating from Mankato Kato Detail Bros. has been up West High School, Neumann and running at its new location enrolled in Minnesota State for over three months, and the University Mankato’s aviation space allows the three co-owners program, and the other two also to work on multiple vehicles at a enrolled in college.

time. They provide exterior and interior detailing for a variety of vehicles, although they’ve detailed a growing number of electric cars. “It makes sense since Teslas have soft paint,” Yasin said. “They can go through an automatic car wash but it gets scratched up, so it’s better they come here.” Since opening the new shop, they’ve hired support staff to help them with the 30 vehicles they detail each week. The co-owners proudly display testimonials from customers on their website detailing the quality of work they provide. Abdullahi said forming close relationships with customers and being meticulous has helped their business thrive in a crowded field of competitors. “Locally, I think our work speaks for itself, especially when our clientele come back and tell us what a good job we do compared to other businesses,” Abdullahi said. “It’s not the equipment or anything, but it’s the way we do it. We want to be known as Mankato’s premium detail shop.” MV

MN Valley Business • DECEMBER 2019 • 17

Sara Nett, owner of Sweet Alice’s Floral and Art, waters plants in the shop in St. Peter. The shop is a full service floral and also sells plants such as succulents and cactus.

Friendly flowers Sweet Alice floral follows Earth-friendly model By Tim Krohn | Photos by Jackson Forderer

ara Nett has woven a varied background in two clashed on Nett’s insistence that her floral shop theatrical scenery and costume design, freelance would focus heavily on being sustainable. art and running an arts collective to launch her “We had some intense arguments. He took the new floral shop in St. Peter last traditional approach to the year. business,” Nett said. Her flair for artistic design, she Emily Schoper, of Frey Salon & says, melded with her love of Spa in St. Peter, said they’re a flowers and her past experience SWEET ALICE FLORAL frequent customer of Sweet Alice. working in a floral shop. “We’re on the sustainability 214 South Minnesota Ave., She’d run an artist collective in spectrum ourselves, so it fits right St. Peter Minot where she sold local artists’ in. Our whole hair and skin care 507-508-1095 work on commission for a few years lines are all sustainable. We have Sweetalicefloral.com but said the business model simply the highest rating of product safety couldn’t cover her rent and other a business can get.” costs. Nett did the winter pots outside the salon and they So when she and her husband moved to this area, use her to provide flowers at any of their special they purchased a building on Minnesota Avenue in events. downtown St. Peter to open Sweet Alice floral. While “She does a fabulous job and the arrangements preparing the building and her business plan, she really last a long time. And her price points are exactly worked with a close friend who is a third-generation the same as everyone else.” florist and garden center owner in Minot. Schoper said the floral shop fits in well in St. Peter While he instilled his knowledge of the industry, the where businesses such as the salon and the St. Peter

Profile

18 • JANUARY 20209 • MN Valley Business

Food Co-op strive for sustainability.

Green from the start

The dedication to sustainability started with renovating the building. “The building is highly energy efficient, super insulated. It uses as much energy and water as a small home.” They searched until locating the most energy efficient floral cooler available and it doesn’t use Freon. Water barrels outside collect water used to water plants in the summer. But it’s the day-to-day operations where sustainability rules. “We don’t use that disgusting floral foam,” she said of the green foam used on the bottom of floral arrangements, foam she said that has harmful ingredients and is bad for the environment when thrown out. Instead she uses reusable parts that eventually can be recycled after their useful life. And for weddings and other events she handles the setup and take down so she can reuse the pieces and compost other parts of the arrangements. While other shops she worked at ran flower stems under water while preparing them, she conserves water. “We watch how we use water. The sink is never running. We wash flowers in a pan.” She gets many of her flowers from Len Busch Roses, a grower in Plymouth with 15 acres of greenhouses. “We’re fortunate to have that here in Minnesota. I get several kinds of my flowers there. He grows the best poinsettias I’ve ever seen,” Nett said. She’s also a member of the Twin Cities Floral Exchange, where independent flower growers, including Gullywash Gardens, Blue Sky Flower Farms, Flower Child Farms and Beezie’s Blooms, sell during the summer months. “There are 22 local growers who bring flowers.It supports Minnesota growers.” Nett also grows some of her own flowers. For those she can’t source locally, Nett buys from environmentally friendly, fair trade growers from California, Oregon, Florida and imports some blooms from Ecuador and Columbia.

Top left: A wide array of products are sold at Sweet Alice’s Floral and Art shop in St. Peter, from flowers and plants to stuffed animals and pottery. Top right: Sara Nett, owner of Sweet Alice’s Floral and Art cuts a stem of a flower while working in the store in St. Peter. The shop is a full service flower shop and also sells the work of 20 local artists. Bottom right: Joy Boertje, manager at Sweet Alice’s Floral and Art, writes a note on a giant employee chalkboard in the store in St. Peter. The South American growers are rainforest certified, sustainable and fair trade. She said it’s actually cheaper for florists to import flowers than to buy them in the United States. “It’s cheaper to import from Holland or South America. Labor is cheap. But you fly them in, truck them, put them on trains. I look at the total carbon costs.” Nett said she eats the added costs of getting sustainable flowers. “I made that decision. It cuts 5% to 10% from my profits, but it’s worth it to me.” She said she has customers who seek her out because of her sustainable model. “But some customers find us and they just like the designs and that’s fine with me.” MV

MN Valley Business • JANUARY 2020 • 19

Phyllis and John Vorwerk.

Pinball Wizard Pinball Place offers 24 pinball machines By Dan Greenwood Photos by Pat Christman

hen John Vorwerk bought his first It’s an arcade devoted entirely to pinball; pinball machine in the late ‘90s, the the only exception being a classic Asteroids industry was hanging by a thread. game from 1979. “Pinball was dead,” On a chilly Saturday Vorwerk said. “We had evening, the warm glow of one manufacturer left lights of all colors at this and that was Stern Pinball New Ulm storefront in Chicago. Arcade beckon passersby to come PINBALL PLACE games were taking over 827 N Broadway St, New Ulm in from the cold. At their and there was just less fingertips are 24 pinball 507-276-7771 interest.” machines – a mix of retro Facebook: The Pinball Place Fast forward to 2019, games from the 1970s all and pinball games are the way up to newer experiencing a revival of sorts; and editions. Players pay a flat fee in exchange manufacturers are jumping back into the for unlimited games on any of the machines. game. To meet that growing demand, “Instead of pumping quarters into a Vorwerk and his wife Phyllis opened the machine over and over again, you throw Pinball Place in New Ulm. down $20 and you can play any machine you

Feature

20 • JANUARY 2020 • MN Valley Business

want for as long as you want,” said Paul Neyers, who met the Vorwerks while working at Mona Lena, a restaurant and bar in New Ulm owned by his wife. “It’s nice to have the variety, and it’s a way to kill a little bit of time and have a lot of fun.” On Sundays, the Vorwerks offer discounts for families. The business, open on weekends, began as a venue for private parties, but then some of those customers suggested it would be nice to come in and play on their own. In response, the couple held a grand opening for about 50 people in January 2019. Along with locals from New Ulm and Mankato, pinball enthusiasts came down from the Twin Cities to experience the only pinball arcade in south-central Minnesota. Sometimes players will make the drive to play specific hard-tofind and rare pinball games. “We had a couple come down from Edina just to play the Octoberfest machine,” Phyllis Vorwerk said. “They found out we had one here; the next closest machine is in Fargo.” John Vor werk became fascinated with pinball machines during their heyday in the 1970’s when he bartended to support himself while in college. His first pinball machine purchase was somewhat of a fluke – Vorwerk was actually looking for Corvette parts on eBay when he came across a Corvette-themed pinball game. Once he bought that one, he found more at C & N Sales in Mankato. Later on a trip to a pinball convention in Texas, he loaded 60 into a box truck and brought them home. Today he has 130 pinball games, some which are fully operational, and others that need some repairs. Along with the 24 games at the Pinball Place, he has another 20 at home, 60 in the basement/repair shop of the Pinball Place, and about 20 more at another location. “The idea is to rotate them,” John Vor werk said. “If it’s something I can‘t fix on the floor, we’ll take it down to the shop in the basement to repair and replace it.”

Self-taught repairman

The machines John Vorwerk has acquired come in various levels of disrepair. He’s mostly self-taught through online tutorials and said many of the machines are similar, which makes it easier to repair the plungers, ramps, bumpers and circuits that make the game playable. The older machines are electro-mechanical –meaning the switches, relays and contact points are magnetic – while the John Vorwerk bought his first pinball machine in newer versions are digital. A look inside of a pinball the late ‘90s. Today he has more than 130. machine reveals a complex web of wires and circuit boards. “It’s a little overwhelming when you look at all of it, but when you break it down to one little task at a time, that’s the way to fix it,” John Vorwerk said. Some of the older pinball machines John Vor werk has acquired go back nearly a century. At one point he had one from the 1930’s that came from a bar in New Ulm. The game itself has a history going back to the 17th century. Back then, it was a bring in their children. While gravity based game. By the 1920’s, some kids may be skeptical at the games had lights fueled by first, it doesn’t take long for their batteries, but it wasn’t until 1947 enthusiasm for the game to take when flippers were introduced over. that the game began to closely “We’ll have kids that will come resemble their current format. in here and say, ‘I don’t want to be “Some of these you open up and here. I want to go home,’” Phyllis literally there’s a mouse nest in Vorwerk said. “And then they’re there and all kinds of other stuff,” dragging them out of here Vorwerk said. “You vacuum it all screaming, ‘I want to stay!’ Once out and then see what parts are they get exposed to it and figure it laying out. We completely out, it’s really surprising how fast disassemble them all the way the little kids catch on to the down to the sheet of plywood. flippers and keeping the ball up. We’ll put them in a polish tumbler, It’s just fun to watch.” or through the dishwasher.” John Vorwerk said they are Vorwerk said they generally looking to increase the number of have two kinds of players who games offered by expanding next visit the Pinball Place. Some door, and they’ve established a players just want to shoot at some pinball league for regular targets and block the ball with customers. Neyers, who flippers, while more experienced competed on the league last fall, gamers want something they said it forces him to try some of refer to as “deep rules.” He said the games he’s unfamiliar with. the 1990’s game, the Twilight Overall though, he said visiting Zone, is a perfect example of that. the Pinball Place is a great way to Players have to complete certain unwind and socialize. tasks to move on to new phases of “I’ll come in frequently for a the game, where different parts half-hour or an hour,” Neyers of the board light up based on said. “We’ll sit and chat and I’ll go completing a set of goals. play the machines.” MV While there is a subculture of adult pinball game enthusiasts, Phyllis Vorwerk said parents also

MN Valley Business • JANUARY 2020 • 21

■

Business and Industry Trends

Energy High cost coal powered plants closing

Since peaking at nearly 318 gigawatts in 2011, U.S. coal-fired electric generating capacity declined to 257 GW in 2017 after several coal power plants retired.

22 • JANUARY 2020 • MN Valley Business

The U.S. Energy Information Administration undertook a study showing the relationship between plant retirements and a plant’s operating and maintenance costs. According to the report, a larger share of plants with higher operating and maintenance costs retired by 2018 than those with relatively low operating and maintenance costs. Sustained relatively low natural gas prices has allowed natural gas-fired generators to become more competitive with coal-fired units, leading to a general decline in using coal-fired capacity. A decline in use leads to a decline in revenues at a plant, which generally translates to lower operating margins, less ability to cover costs, and in many cases, retiring that capacity. Because of more competitive natural gas prices, more advanced natural gas combined-cycle generators, and the increasing efficiency of the natural gas

generator fleet, EIA expects more coal-fired generators to retire, especially within the next decade. According to AEO Reference case projections, almost 90 GW of coal-fired capacity will retire between 2019 and 2030.

Retail/Consumer Spending

Jet fuel use to keep rising

Global demand for jet fuel is expected to continue increase through 2050, with consumption growing at a faster rate in countries that are not members of the Organization for Economic Cooperation and Development. Jet fuel consumption is to increase the most in China and other Asian non-OECD countries, driven by greater demand for freight air transport and passenger air travel, according to a report by the U.S. Energy Information Administration. During this time, global commercial jet fuel use more than doubles. Globally, air freight transport grows at an annual rate of 2.6% through 2050, while passenger air travel triples.

Economy State’s mixed business climate

Minnesota’s business climate continues to be a mixed bag for economic growth, according to the 2020 Minnesota Business Benchmarks repor t, commissioned by the Minnesota Chamber of Commerce. “This report helps deepen our understanding of Minnesota’s economic competitiveness,” Minnesota Chamber President Doug Loon told the Star Tribune. Several indicators of overall performance, including job creation and GDP, have lagged behind the national average for most of the past five years. The report is at: minnesotachamber.com Loon said the state is strong in innovation but health care costs, taxes and operation osts are a concern for employers. The chamber supports immigration reform that will create more citizens and employees to replace retiring baby boomers.

State economic outlook

Minnesota boasts the strongest in-migration rate of the entire region, as folks are drawn to the Minneapolis metro area. As a result, labor-force growth is one of the healthiest, according to an analysis by Kiplinger on the state’s 2020 outlook. The unemployment rate, however, has bumped up slightly and job and job growth in 2019 was expected to be modest. The need for housing and other expansion should keep construction strong, but other sectors show signs of weakening, such as the food manufacturing sector and nondurable manufacturing. Transportation and warehousing is no longer a growth sector. Hiring has slowed some in health care, a major industry.

Vehicle Sales Mankato — Number of vehicles sold - 2018 - 2019 929 1,065

1500 1200 900 600 300 0

Source: Sales tax figures, City of Mankato Includes restaurants, bars, telecommunications and general merchandise store sales. Excludes most clothing, grocery store sales.

Sales tax collections Mankato (In thousands)

- 2018 - 2019

600

$505,100

500

$475,675

400 300 200 100 0

Source: Sales tax figures, City of Mankato

Lodging tax collections Mankato/North Mankato $67,134

70000

- 2018 - 2019

$42,911

52500 35000 17500 0

Source: City of Mankato

Mankato food and beverage tax - 2018 - 2019 175000 140000

$65,100 $68,804

105000 70000 35000 0

Source: City of Mankato

C. Sankey

MN Valley Business • JANUARY 2020 • 23

■

Agricultural Outlook

By Kent Thiesse

2019 crop farm profits were highly variable

sk a farmer what their profit levels from crop farming was in 2019, and the answers can range from “fairly good” to “reduced” to “right down terrible”. Any of those answers could be correct, even in the same area, depending where the farms are located and how the erratic 2019 weather conditions affected crop production for that producer. There will also be a wide variation in grain marketing decisions and crop insurance coverage for the year that potentially affected farm profit levels. Following is a brief overview of how some major factors that likely affected farm profitability in 2019: • 2019 crop yields --- “Mother nature” was not kind to many producers in 2019 in portions of Minnesota, Iowa, North and South Dakota, as well as in some other areas of the Upper Midwest. Several locations received 150-200 percent of the normal rainfall amount during the 2019 growing season, including localized heavy rainfall events in both the early and late portions of the growing season. This resulted in very late planting and significant prevent plant acres in some areas, as well as delayed harvest in many areas, both of which negatively affected crop yields. Some locations in Southern Minnesota and Eastern South Dakota also experienced significant “green snap” on corn, due to severe storms in July. Overall, corn yields in affected areas were about 10-20 percent below long-term averages, and probably 15-30 percent lower than 2015-2017 average yields. In general, soybean yields were 5-20 percent below long-term average yields. By comparison, growers in some areas of Minnesota and the Upper Midwest had much better crop yields in 2019. At a farm-level price of $3.50 per bushel, a farm operator with a corn yield of 210 bushels per acre had a gross of $735 per acre, while a producer with 175 bushels per acre grossed $612.50 per acre, and a producer with 140 bushels per acre only grossed $490 per acre. • Grain marketing decisions --- As in most years, the grain marketing decisions that were made by farm operators had a big impact on the profit levels for their crop enterprise in 2019. The biggest difference likely came with corn, where producers in many areas had the opportunity to “lock-in” cash prices near or above $4.00 per bushel on a portion of their anticipated 2019 production in June and July this past summer. Current corn cash price levels are near $3.50 per bushel in Southern Minnesota, and even lower in

24 • JANUARY 20209 • MN Valley Business

other areas. For example, farmer A and B both targeted a yield of 200 bushels per acre for corn at the beginning of 2019; however, due to the weather conditions they only had a final yield of 170 bushels per acre. Farmer A “locked-in” 75 percent of the anticipated production (150 bu./acre) at $4.00 per bushel and sold the balance at $3.50 per bushel. Farmer B sold the entire production at harvest for $3.50 per bushel. Farmer A would have a gross income of $670 per acre, while farmer B would have a gross income of only $595 per acre, a difference of $75 per acre. There have been very few opportunities to “lockin” a favorable local cash soybean price during 2019. One positive for local soybean prices late in 2019 was a tighter “basis” level. “Basis” is the difference between the Chicago Board of Trade (CBOT) soybean price and local soybean market price offered to farmers. The soybean basis level at processing plants in Southern Minnesota tightened from $.50$.60 per bushel in mid-September to $.15-$.20 per bushel by late November. Taking advantage of a $.30$.40 per bushel soybean basis improvement can easily add $15-$25 in gross income per acre. Grain marketing opportunities are often short-lived and need to be acted on promptly to get the full advantage. Grain marketing decisions are often overlooked as a major factor that impacts farm profitability. • 2019 MFP payments --- The 2019 “market facilitation program” (MFP) payments, which were paid to farm operators to offset market price reductions resulting from tariffs and trade issues, are being allocated on a per acre basis. As a result, the MFP payments were not affected by the 2019 crop yields, as they were in 2018. Even though the MFP payments were not intended to help cover losses from low yields in 2019, these payments did help stabilize final farm income levels for many farm operators. Each county had an established MFP payment rate for 2019, which was near $70 per eligible planted crop acre in most South Central Minnesota counties. Producers received 75 percent of the allocated MFP payment amount by the end of 2019, with the possibility to receive remaining 25 percent of the 2019 MFP payment in January or February of 2020 (The final MFP payment was not guaranteed as of this writing.) Some critics of the MFP payments have stated that these payments only helped the large

grain farms; however; in reality, many small to medium sized farm operations in the region would have faced severe financial difficulty at the end of 2019 without the financial assistance from the MFP program. • 2019 crop insurance coverage --- The level and type of crop insurance coverage that a producer carried for the 2019 crop year also impacted farm profitability in the areas that had greatly reduced crop yields for the year. Corn and soybean producers had the option of selecting revenue protection (RP) crop insurance policies ranging from 60% to 85% coverage levels. The level of insurance coverage resulted in some producers receiving crop insurance indemnity payments, while other producers received no indemnity payments, even though both producers had the same adjusted APH yield and the same final yield. For example, at an adjusted APH corn yield of 190 bushels per acre and a final 2019 corn yield of 150 bushels per acre, a producer with 85% RP coverage would receive a gross indemnity payment of $61 per acre, while a producer with 75% coverage would receive no indemnity payment. 8

Many farm operators in portions of the Upper 6 had some prevented plant crop acres in Midwest 2019 and depending on their crop insurance coverage 4 an indemnity payment on those acres. received Producers with crop insurance coverage received 55 2 of their crop insurance guarantee for prevent percent plant corn acres and 60 percent of the insurance guarantee on soybean acres. Producers with higher 0 J F M A M J J A S O N D insurance coverage levels (80% or 85%) received higher prevent plant payments. There was an additional 10 percent prevent plant “top-up” payment as part of the Federal Disaster (WHIP) program, which 8was increased to 15 percent for producers that had a “harvest-price” option on their 2019 insurance 100 policy. 6 A large 85 majority of Midwest corn and soybean producers chose “enterprise units” for their 2019 crop 4 70 insurance coverage, in order to reduce premium costs. This combines all acres of a crop in a given 552into one crop insurance unit. By comparison, county the use 400 of “optional units” allows producers to J F Mseparately A M Jfor Jcrops A inSeach O N D provide insurance township 25 section, which can be a big advantage in a J F M A M J J A S O N D year such as 2019. For example, assume that producers A and B both have 5 separate farms in the same county with an APH corn yield of 190 bushels per acre, and with an overall average 2019 corn yield of 171100 bushels per acre. However, three of the farms average 185 bushels per acre and two of the farms 85 average 150 bushels per acre. Producer A has an 85% RP policy 70 with optional units and producer B has an 85% RP policy with enterprise units. Producer A would55 receive no insurance indemnity payment on three farms; however, would receive a gross 40 payment of $61 per acre on two farms. insurance Producer 25 B would likely receive no insurance F farms. M A M J J A S O N D payments Jon any

Agriculture/ Agribusiness Corn prices — southern Minnesota

(dollars per bushel)

— 2018 — 2019

8 6

$3.58

2 0

$3.33

Source: USDA

Soybean prices — southern Minnesota

(dollars per bushel)

— 2018 — 2019 8 20 100 16 6 85 $8.22 12 470 8 255 $7.98 4 40 0 0 J F M A M J J A S O N D 25 J F M A M J J A S O N D J F M A M J J A S O N D Source: USDA

Iowa-Minnesota hog prices

185 pound carcass, negotiated price, weighted average

— 2018 — 2019

20 100 25 16 85 22 12 70 19 8 55 16 4 40 13 0 J F 25 10 J F J F Source: USDA

25 22

$55.67

19 16

M M M

A M J A M J A M J

Milk prices

J J J

A S $45.75 O N D A S O N D A S O N D

Minimum prices, class 1 milk Dollars per hundredweight

— 2018 — 2019 25 22

$16.85

19 16 13 10

$15.54 J

20 25 16 22 12 19 8 16 4 13 0 J 10

Source: USDA. Based on federal milk orders. Corn and soybean prices are for rail delivery points in Southern Minnesota. Milk prices are for Upper Midwest points.

C. Sankey

MN Valley Business • JANUARY 2020 • 25

13 10

Construction/Real Estate Residential building permits Mankato

Commercial building permits Mankato

- 2018 - 2019 (in thousands)

$8,645

5000000

$2,576,264

4000000

12000000

3000000

9000000

2000000

6000000

1000000

3000000

Information based on Multiple Listing Service and may not reflect all sales

- 2018 - 2019 (in thousands)

198

186

300

Median home sale price: Mankato region - 2018 - 2019 (in thousands)

250

$179,500 $183,044

200

240

150

180

100

120

0 J

Source: Realtors Association of Southern Minnesota

Source: Realtor Association of Southern Minnesota

Interest Rates: 30-year fixed-rate mortgage

Includes single family homes attached and detached, and town homes and condos

Housing starts: Mankato/North Mankato

— 2018 — 2019

- 2018 - 2019

5.5

4.8%

5.0

4.5

4.0

3.5 3.0

$14,934,971

Source: City of Mankato

Existing home sales: Mankato region

Source: City of Mankato

$2,354

15000000

3.8% J

Source: Freddie Mac

10 D

We Know Commercial Real Estate.

150 Kingswood Drive

Read us online!

Source: Cities of Mankato/North Mankato

99,906 SQ. FT. FOR SALE OR LEASE Quality facility with loading docks, drive-in door & finished office space. Close to US Hwy 14/3rd Ave Interchange.

Tim Lidstrom CCIM, Broker

Karla Jo Olson Broker

NEW!

WAREHOUSE/PRODUCTION FACILITY

www.lidcomm.com • 507-625-4606 100 Warren Street, Suite 708, Mankato, MN

26 • JANUARY 20209 • MN Valley Business

Bottom Line

Corn and soybean producers with average or above average yields will likely have an average to fairly good profit year in 2019, depending on their grain marketing decisions. Farm operators that had average to slightly below average yields for the year will probably have reduced to poor profit levels in 2019, depending on grain marketing decisions. Finally, producers with below average to very low crop yields in 2019 will likely have reduced to disastrous profit levels for the year, depending on their crop insurance coverage and grain marketing decisions. Farm operators that had serious year-end cash flow shortages are encouraged to consult their farm management advisors and ag lenders sooner than later to look at ways to address the situation.

Heating & Cooling

BUILDING CONTROL SOLUTIONS

Exceeding expectations & gaining trust through exceptional value and performance!

Partners of SCHNEIDER ELECTRIC®

Mankato: 507-345-4828 | Rochester: 507-289-4874

www.paape.com

Gas Prices Gas prices-Mankato

— 2018 — 2019

54 43 $2.41

32 21 10 0

Gas prices-Minnesota

$2.39

$43.51

$42.84

-1.5%

Ameriprise

$158.15

$161.93

+2.4%

Best Buy

$75.47

$80.01

+6.0%

Brookfield Property

$18.99

$19.35

+1.9%

Crown Cork & Seal

$75.97

$76.19

+0.3% -7.3%

Fastenal

$37.44

$35.37

-5.5%

General Mills

$51.43

$53.48

+4.0%

Itron

$78.39

$80.71

+3.0%

Johnson Outdoors

$61.83

$64.96

+5.0%

$174.37

$163.81

-6.0%

Target

$109.95

$124.28

+13.0%

U.S. Bancorp

$58.64

$59.34

+1.2%

Winland

$1.16

0.0%

Xcel

$61.07

$61.78

+1.6%

$2.35

Archer Daniels

$3.80

21 F

Percent change

$4.10

$2.48

Dec. 5

Consolidated Comm.

Nov. 5

— 2018 — 2019

Stocks of local interest

Security

TOTAL

Kent Thiesse is farm management analyst and senior vice president, MinnStar Bank, Lake Crystal. 507-381-7960); kent.thiesse@ minnstarbank.com

Building Automation

0Source: GasBuddy.com J F M A

C. Sankey

MN Valley Business • JANUARY 2020 • 27

Minnesota Business Updates

■

to sales including its Black Friday deals. Unlike the RedCard, Target Circle doesn’t require customers to sign up for a credit or debit card, all they need to do is provide a few personal details, before having their Target app scanned at the till or provide a phone number. Those shoppers who have a Target.com, Cartwheel or Target RedCard account were automatically enrolled in Target Circle. Target said it now has 35 million Target Circle members following its launch.

■ Best Buy speeds up online orders Best Buy is utilizing new technology to use less waste and speed up the processing time for online orders. Using this new technology, WCCO reports that “when an order is processed, a scanner takes a 3D image, then cuts cardboard to the exact size it needs to get a perfect fit.” They also make sure that there’s some extra room around the item and “a cardboard lip to protect corners from falls.” Chief Supply Chain Officer Rob Bass said that because of this new way of packaging they’re able to fit more packages into trucks. This puts fewer trucks on the road and fewer planes in the air, which is better for the environment. All of that on top of the fact that there will be less cardboard waste.

■ Tent market to help Johnson Outdoors New market research from Stats & Reports, the Global Outdoor Camping Tents Market 2019-25, is expected to show tremendous growth in the coming years. Analysts also analyzed the ongoing trends in outdoor camping tents and the opportunities for growth in the industries. The growth should help manufacturers like Johnson Outdoors, Big Agnes, Coleman Company, North Face, Cabanon, Easy Camp and Force Ten.

■ Target loyalty program a success Target has revealed the initial success of the new loyalty program it launched last fall. Target Circle went live in October, giving all members 1 percent cashback at the till and early access

Employment/Unemployment Initial unemployment claims Nine-county Mankato region Major September Industry 2018 2019 Construction Manufacturing Retail Services Total*

147 52 36 96 331

Local non-farm jobs Percent change ‘18-’19

73 132 20 80 305

Construction 126000 126000 Manufacturing Retail 113000 Services 113000 Total*

2,712 987 832 2,578 7,109

2,583 1,702 782 2,806 7,873

126000

2100 1400

113000

700 100000

Minnesota Local non-farm jobs

3,018 3,046

8000 3500 3500 6000 2800 2800 4000 2100 2100

-4.8% +72.4% -6.0% +8.8% +10.7%

28 • JANUARY 20209 • MN Valley Business

200000

100000 50000

700 0 0

150000

2000 1400 1400

700

- 2018 - 2019

(in thousands)

Percent change ‘18-’19

Services consist of administration, educational, health care and social 100000 assistance, food andJ otherF miscellaneous services. M A M J J A S O 100000 J don’t F equal M total A because M Jsome Jcategories A not S listed. O N *Categories

3500 2800

-50.3% +153.8% +44.4% -16.6% -7.9%

Minnesota initial unemployment claims September 2018 2019

133,604 132,602

139000

Services consist of administration, educational, health care and social assistance, food and other miscellaneous services. *Categories don’t equal total because some categories not listed.

Major Industry 139000 139000

- 2018 - 2019

Nine-county Mankato region

F M

M A A M

M J

J J

J A

A S

S O

O N

N D

company increased its five-year forecast for capital spending — such as investments in generation, transmission and the like — by about 10% to $22 billion. Xcel is the largest electric utility and second-largest natural gas provider in Minnesota, one of the company’s two largest markets along with Colorado. Xcel also operates in Wisconsin, the Dakotas, Texas, New Mexico and Michigan’s Upper Peninsula.

■ General Mills boosts analytics General Mills has expanded its ongoing analytic partnership with Nielsen. The agreement gives the Minneapolis-based company more information about consumer trends and the competitive landscape in the U.S. and global markets through Nielsen’s new Connect platform. Nielsen has provided data to General Mills for more than a decade. The relationship deepened in 2009 to include retail tracking, insights on purchasing behavior, advanced analytical tools and technology services in the U.S. The expanded partnership comes during a time of increasing competition, fragmentation and digitization within the global consumer packaged goods and retail landscape, Nielsen said. The data firm’s analysis and insights will be used to formulate General Mills’ growth strategy, including new product and categories.

■ Xcel likely to expand infrastructure 139000 139000

Xcel said it would likely invest 126000 more in its 126000 infrastructure as it announced its profits rose 5% during the third quarter but fell short of analysts’ forecasts. 113000 The Star Tribune reports the Minneapolis-based 113000

2800 126000

100000 J F

J M

M J

J A

J S

700 100000

1400 2000

A O

S N

O D

2800 2100 1400

6000

2,796

2000 J F M A M M A M J J M A M J J

J A A

J S S

A S O N O N D O N D

66,585 77,052

100000 50000 J

150000

4000 1400

100000

700 2000

50000

0 0 J F JM

F M A M AJ FA M

M MJ

J JA

J JS

A AO

S N S

O D O

N N

D D

(includes all of Blue Earth and Nicollet Counties) 200000 150000

October

100000

0 F

200000

J M

F M A A M J

M J

J A

2018

2019

1.9% 61,160 1,214

2.2% 61,474 1,388

J S

A O

S N

O D

Unemployment rates Counties, state, nation County/area

- 2018 - 2019

150000

Unemployment rate Number of non-farm jobs 50000 50000 Number of unemployed

100000

200000

Mankato/North Mankato Metropolitan statistical area

150000

3,221

4000

0 F F

D 0

200000

Minnesota number of unemployed

8000

700 0 J 0 J

3500 8000 2800 6000 2100

3500

- 2018 - 2019

Nine-county Mankato region

4000 2100

1400

Employment/Unemployment

F M A A M J

Local number of unemployed 8000 3500 6000 2800

2100

113000

700

100000

3500

139000

Blue Earth Brown Faribault Le Sueur Martin Nicollet Sibley Waseca Watonwan Minneapolis/St. Paul Minnesota U.S.

October 2018

October 2019

1.9% 2.3% 2.3% 2.2% 2.6% 1.8% 2.1% 2.6% 2.4% 2.2% 2.3% 3.6%

2.3% 2.4% 2.8% 2.4% 2.7% 2.1% 2.5% 2.7% 2.5% 2.4% 2.5% 3.3%

Source: Minnesota Department of Employment and Economic Development C. Sankey

MN Valley Business • JANUARY 2020 • 29

Sponsored by the Carl & Verna Schmidt Foundation

How to pick a good financial advisor

By NerdWallet

inancial advisors help people manage their money and reach their financial goals. They can provide a range of financial-planning services, from investment management to budgeting guidance to estate planning. There are several types of financial advisors. Here’s more about what they do, and how to choose the right financial advisor for you.

What does a financial advisor do for you?

The services provided by a financial advisor will vary based on the type of advisor, but generally speaking, a financial advisor will assess your current financial situation — including your assets, debts and expenses — and identify areas for improvement. Financial advisors can work with you to help reduce spending, ensure your insurance needs are covered, help you save and manage your investment accounts. A good financial advisor will also ask you about your goals and create a plan to help you reach them. That may mean calculating how much you should save for retirement, making sure you have an adequate emergency fund, offering tax-planning suggestions or helping you refinance or pay off debt. Financial advisors also help invest your money.

Types of financial advisors to choose from

There are several types of financial advisors, from online digital services to local, in-person traditional advisors. Here’s a rundown of each: Robo-advisors: A digital service offering simplified, low-cost investment management. You answer questions online, then computer algorithms build an investment portfolio according to your goals and risk tolerance. Robo-advisors monitor and regularly rebalance your investment mix, offering portfolio management at a lower cost. (Sound right for your needs? See our top picks for best robo-advisors.) Online financial planning ser vices: This is the next step up from a robo-advisor: An online financial planning service that offers virtual access to human advisors. A basic online service might offer the same automated investment management you’d get from a robo-advisor, plus the ability to consult with a team of financial advisors when you have questions. More comprehensive services roughly mirror traditional financial planners — you’ll be matched with a dedicated human financial advisor who will manage your investments and work with you to create a holistic financial plan.

30 • JANUARY 20209 • MN Valley Business

Traditional financial planners, financial consultants and financial advisors: Broad

terms for professionals in the financial services industry, covering a variety of specialists, including: • CFP: Provides financial planning advice. To use the CFP designation from the Certified Financial Planner Board of Standards, an advisor must complete a lengthy education requirement, pass a stringent test and demonstrate work experience. • Broker or stockbroker: Buys and sells financial products on behalf of clients in exchange for a fee, commission or both. Must pass exams and register with the U.S. Securities and Exchange Commission. • Registered investment advisor: Provides advice and makes recommendations in exchange for a fee. RIAs are registered with the U.S. Securities and Exchange Commission or a state regulator, depending on the size of their company. Some focus on investment portfolios, others take a more holistic, financial planning approach. • Wealth managers: Wealth management services typically concentrate on high net worth clients and provide holistic financial management. In addition, the same person can have more than one of these titles. For instance, a CFP may also be a registered investment advisor.

How to choose a financial advisor

If you simply want help choosing and managing investments, a robo-advisor is a streamlined, costefficient choice. It’s also good for those just starting out, because robo-advisors typically have low or no account minimums. If you have a complicated financial situation or want holistic advice on topics like estate planning, insurance needs, etc., you might want to choose an online financial planning service or a human financial advisor in your area. If you don’t mind meeting with your advisor virtually, you may save money with an online service. These services also typically have lower account minimum requirements than a human advisor might. Keep in mind that you can start with a robo-advisor or online service, then reassess your planning needs as your financial situation changes or grows more complex. MV

Sponsored by the Carl & Verna Schmidt Foundation

How to calculate what you need in retirement savings

By NerdWallet

t’s the million-dollar question — literally: How much should I save for retirement? As a rule of thumb, most experts recommend an annual retirement savings goal of 10% to 15% of your pretax income. High earners generally want to hit the top of that range; low earners can typically hover closer to the bottom since Social Security will usually replace more of their income. But rules of thumb are just that, and how much you should save for retirement will depend a lot on your future, both the known and unknown parts, such as: • Your life expectancy • Your current spending and saving levels • Your lifestyle preferences in retirement

Estimate future income needs

Fair warning: This step involves the most work — but power through, because the others are a breeze. And if you keep even a loose budget, you already have a leg up. Projecting future income requirements begins by taking a look at current spending. To do that, enter your typical monthly expenses in the first column of a spreadsheet or jot them on a piece of paper. Then do a little thinking about whether each expense will stay the same, go down, go up or — best of all — disappear in retirement. (In a perfect world, we’re looking at you, mortgage.) In a second column, write your best guess of what each expense will be in retirement. Add those up, tack on other things you may not budget for now but want to spend money on later — travel, golf, mahjong supplies, ballroom dance lessons — and you will have a rough idea of your monthly spending needs in the future. Multiply by 12 to get the income you’ll need each year to meet those expenses in retirement. Compare that to your current income to arrive at what’s called a replacement ratio, or how much of your income you should aim to replace in retirement.

Consider common rules of thumb

Less than half of workers have tried to calculate how much money they need for retirement, according to the Employee Benefit Research Institute’s retirement confidence survey. That means at least 50% of you are not going to do the exercise outlined in step 1.

If you’re among the 50% who won’t do the exercise, this is the point to fall back on income-replacement rules of thumb. They’re not as accurate because they’re a one-size-fits-all solution to a problem that comes in many shapes and sizes. But they’re far better than nothing. The one used most often is the 80% rule, which says you should aim to replace 80% of your preretirement income. This is a loose rule: Some people suggest skewing toward 70%; some think it’s better to aim for a more conservative 90%. To figure out where you land, consider what percentage of your income you’re saving for retirement. You’ll no longer have to do that once you cross the hypothetical finish line, which means if you’re saving 15% now, you could easily live on 85% of your income without adjusting expenses. Add in Social Security, cut payroll taxes — which eat 7.65% of your income while you’re working — and you can probably adjust that income down even further. The best way to use a rule of thumb like this is as a gut check against the more tailored approach of taking a deep dive into your expenses. Are you way off the standard advice or pretty close? But it can also be used as a starting point of its own, from where you can wiggle the numbers.

Use a retirement calculator

If your estimates are correct, a good retirement calculator will give you an assessment of where you stand in your savings progress, by combining those annual spending estimates with projections. Most thorough calculators bake in assumptions that are based on research: There will be defaults for inflation projections, life expectancy and market returns. To get the most accurate result, you should consider whether those assumptions are correct given your situation: Is your investment strategy poised to hit the default return used by a calculator, which will probably hover around 6% or 7%? If you’re skewing toward bonds, you’re going to want to adjust that down. Did your grandmother and your grandmother’s grandmother live to 110? You’ve got good — but expensive — genes. Take those extra years you may live into account in your projections. MV

MN Valley Business • JANUARY 2020 • 31

REMODEL & RE-BRANDING

NEW LOCATION

AmericInn Hotel & Event Center 240 Stadium Road, Mankato

Gislason & Hunter, LLP 111 South 2nd Street, Suite 500, Mankato

EXPANSION

RE-BRANDING

NEW LOCATION

Jack Link’s 1829 1st Avenue, North Mankato

Livea Weight Control Center 1351 Madison Avenue, Suite 113, Mankato

Title Resources, LLC 111 South 2nd Street, Suite 100, Mankato

NEW LEADERSHIP

NEW OWNERSHIP

RE-BRANDING & GRAND OPENING

YWCA - Mankato 127 South 2nd Street, Suite 200, Mankato

Hilltop Florist & Greenhouse 885 East Madison Avenue, Mankato

A R Fitness for Women 2124 Hoffman Road, Mankato

NEW PROGRAM

NEW LEADERSHIP

NEW BUSINESS

Connections Ministry 501 South 2nd Street, Suite 100, Mankato

Children’s Museum of Southern Minnesota 224 Lamm Street, Mankato

Kato Detail Bros. 1002 Belle Avenue, Mankato

GROUND BREAKING

50TH ANNIVERSARY

Ecumen Pathstone Living 718 Mound Avenue, Mankato

Cherry Creek, Inc. 1650 Tullamore Street, Mankato

Scheels All Sports 1850 Adams Street, Suite 6, Mankato

Check out our blog! greatermankatoblog.com 32 • JANUARY 2020 • MN Valley Business

2020

2020 SPONSOR:

4 - 6 PM

JAN 7

Eide Bailly

111 South Second Street, Suite 300, Mankato

Loyola Catholic School

JUL 7

WHY JOIN FEB 4

MAR 3 APR 7

MAY 5 JUN 2

CENTURY 21 Atwood

209 South Second Street, Suite 200, Mankato

APX Construction Group

1020 Innovation Lane, Mankato

EXPOSURE

Chankaska Creek Ranch & Winery 1179 East Pearl Street, Kasota Build your Brand; Landline, Mankato Regional Airport grow your business. 3030 North Airport Road, Mankato Stand out and get noticed!

2019 November Business After Hours

151 St. Andrews Court, Suite 400, Mankato

Terrace View Golf Course

GREATER MANKATO GROWTH?

AUG 4

145 Good Counsel Drive, Mankato

Connect Real Estate Group

19304 State Highway 22, Mankato

SEPT 1

Mayo Clinic Health System

OCT 6

United Prairie Bank

NOV 3

Mankato Ford

1025 Marsh Street, Mankato

10 Firestone Drive, Suite 100, Mankato 1935 Madison Avenue, Mankato

NETWORKING TW WORKING ORKING Store It MN DEC 1

2015 Basset Drive, Mankato

It’s not just st WHO WHO you ou know, it’s who knows k YOU. Networking IS hosted Powerful. by Mayo

BE IN THE KNOW

LEARNING

Gain access cces to Member Exclusive Content to help grow your business.

TALENT RETENTION

Clinic Health System:

Receive our member only emails making you the first to know the latest news.

MEMBER EXCLUSIVE BENEFITS

REFERRALS

We only refer member Word of mouthat our office Keep your employees NOTE: Calendar magnets are available at the check in table at each Business After Hoursbusinesses. event and they are available and direct referrals come at 3 Civic Center Plaza, Suite 100. Also, a downloadable version is available at greatermankato.com/business-after-hours. engaged and retained with from being a valued access to our member only Business Afterevents Hours gives EngagedofLevel or higher an opportunity to member GMG. andrepresentatives programs. from Greater Mankato Growth member businesses at the get together with one another to exchange ideas and learn about each other’s businesses. greatermankato.com/events

SHAPE YOUR CREDIBILITY Raise your reputation by COMMUNITY belonging. Research shows

Your investment helps us continue to build the best environment for your business and its employees.

that businesses who belong to a chamber of commerce are more successful.

Bellissimo Paint & Coatings bellissimopaint.com

Welcome, New Members

Homestead Media homesteadmedia.net

greatermankato.com/join April 2018

Southwest Minnesota Housing Partnership swmhp.org

Pulp Comics and Games (formerly Double Play) doubleplaystore.com

MN Valley Business • JANUARY 2020 • 33 greatermankato.com/join

What’s New to Know The Mankato Sports Commission will be featuring a brand new event this January called the Jack Frost Frolic, a two-person team challenge filled with Snowy Shenanigans, Tremendous Trickery and Mischievous Fun! This event will take place on January 18, 2020 on the North Side of Sibley Park where teams will complete four unique outdoor challenges involving sleds, snowshoes, kayaks and hot cocoa. The Jack Frost Frolic is just one of the many events going on during SnowKato Days being held January 17-26.

To learn more about Jack Frost Frolic, including sponsorships and volunteer opportunities, visit jackfrostfolic.com.

SnowKato Days Button Program January 17 - 26, 2020 The inaugural SnowKato Days Button Program will feature several area participating businesses that will provide special offers or discounts. Festival enthusiasts who purchase the buttons can visit area businesses including: Bumbelou, Children’s Museum of Southern Minnesota, Dairy Queen and more! A comprehensive list of the button program discounts as well as all the community events featured for SnowKato Days can be found online at SnowKatoDays.com.

Getting Involved with the Mankato Marathon

The 2020 Mankato Marathon presented by Mayo Clinic Health System will take place on October 16-17, 2020. Planning is well underway but there are still plenty of opportunities for area businesses to get involved. See the list below and find out more at mankatomarathon.com or by emailing jleafblad@visitmankatomn.com. • • •

Sponsorships Volunteer Donating To Charity Runners

34 • JANUARY 2020 • MN Valley Business

• • •

Water Stops Cheer Zones Weekend Specials

Shop Small in the City Center 2019

rizzly weather didn’t put a damper on Shop Small in the City Center on Saturday, November 30. Hundreds of shoppers visited locally owned businesses with Shop Small passports in hand looking for great deals to kick off the holiday season. With 50 businesses participating in the Passport Program (a record-breaking year), patrons found something for everyone on their list.

WHY JOIN Those who filled their passport EXPOSURE with your Brand; stamps from 10 businesses wereBuild entered grow your business. into a drawing for prize packages Stand out and get consisting of gift cards from participating businesses valued at over $100.noticed! Small Business Saturday might be over, but you can shop local all year long! Visit citycentermankato.com for a list of businesses in the City Center.

GREATER MANKATO GROWTH? NETWORKING TW WORKING ORKING It’s not just st WHO WHO you ou know, it’s who knows k YOU. Networking IS Powerful.

BE IN THE KNOW

LEARNING