MN Valley Business

Civic powerhouses Dotson, Lutz selected by peers as most influential civic leaders; Walz, Sheran most politically influential Also in this Issue: • Gag’s Camper Way • Maverick Software • The Lawn Barber

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Table of Contents

May 2012 • Volume 4, Issue 9

■

22

■

Bursting with pride

Organic lawn service

Denny Dotson and Fred Lutz have been selected by their peers as the most influential in the Civic Pride category, while U.S. Rep. Tim Walz and State Sen. Kathy Sheran have been named as most politically influential.

■

40 Maverick Software

maverick Software Consulting began in 1999 and started a partnership with minnesota State University in 2006. Today the business has expanded to campuses across the state and employs students who get hands-on experience.

36 Dan Gross started a neighborhood mowing service when he was 12 years old and today, at age 30, is still in the lawn care business. The Lawn Barber takes an organic approach to lawn care, including using all propane-powered mowers.

■

42 The camper way

Shortly after Dan Gag finished law school, he came to the realization that his true desire was to join the family business. Today he heads up Gag’s Camper Way, started by his parents in 1972.

MN Valley Business • may 2012 • 3

Features

F E A T U R E S

D E P A R T M E N T S ■

From the Editor ................................ 6

■

Joe Spear: mankato civic pride has been a constant ■

Business informer ............................ 8 Vehicle, retail, construction trends in the area

■

Job trends ......................................10 Regional, state unemployment information

Departments

■

Kent myhrman: Structuring growth through ISO registration ■

■

Construction, real estate trends ....11 Retail trends ...................................12

■

Agriculture Outlook ........................14

■

Agribusiness trends. ......................15

■

Business updates ...........................16

■

Winland may be delisted from exchange, amPI has $2 billion in sales, and more

Regional Outlook ............................34 Jack m. Geller: When private investment isn’t private

Up & Coming ..................................36 The Lawn Barber

area commodity prices ■

Greater Mankato Growth CVB ......33 CVB budding with spring projects

Kent Thiesse: Local farm balance sheets strong ■

Greater Mankato Growth Member Activities .........................30 Groundbreakings, new businesses, relocations and expansions

auto sales, retail sales and hotel business ■

Greater Mankato Growth ...............28 Capitalizing on local talent

Building permits, housing starts, home prices, interest rates ■

Business Commentary ...................20

All in the Family .............................42 Gag’s Camper Way

■

Business memos/ Company news ...............................44 Kunard honored for 50 years service

On the Cover: Dennis Dotson (left) and Fred Lutz Photo by John Cross

4 • may 2012 • MN Valley Business

MAY 2012 • VOLUME 4, ISSUE 9 PUBLISHER

James P. Santori

EXECUTIVE EDITOR

Joe Spear

ASSOCIATE EDITOR

Tim Krohn

CONTRIBUTING WRITERS

PHOTOGRAPHERS COVER PHOTO GRAPHIC DESIGNER

From the Editor

PAGE DESIGNER

Jack M. Geller Sara Gilbert-Frederick Tim Krohn Grace Webb Jean Lundquist Kent Myhrman Kent Thiesse Marie Wood Pat Christman John Cross John Cross Jenny Malmanger Christina Sankey

ADVERTISING MANAGER

David Habrat

ADVERTISING SALES

Cheryl Olson

ADVERTISING ASSISTANT

Barb Wass

ADVERTISING DESIGNERS

Seth Glaser Sue Hammar Tony Helget Christina Sankey Aaron Tish

CIRCULATION DIRECTOR

Denise Zernechel

For editorial inquiries, call Tim Krohn at 507-344-6383.

For advertising, call Cheryl Olson at 507-344-6390

MN Valley Business is published 12 times a year at 418 South 2nd Street Mankato, MN 56001.

6 • may 2012 • MN Valley Business

Mankato civic pride has been a constant

W

e’re 12 years past the Riverfront 2000 project, and we’re eight years away from Envision 2020.

The journey for civic improvement in Mankato can be tracked by these kinds of projects and many other smaller visions that came about and are still to come.

That’s the takeaway from this month’s cover story, our second installment of the “Most Influential” people in Mankato. It’s no surprise the longtime business owners Fred Lutz and Denny Dotson were selected by a jury of their peers as most influential in the area of civic pride. Lutz and Dotson make an important point about the various civic successes and growth of the Mankato area for maybe the last 30 or 40 years. They note community growth as a constant theme, whether it be through government, business or nonprofit projects.

“There has never been a good project or idea or vision that didn’t get funded in Mankato. Somebody always steps up,” Dotson says. Lutz agrees. “If you look back, very few fund drives have failed.

Mankato has been very generous.”

We’re leaders in United Way funding for cities our size. Per capita contributions are tops in the country. We have strong civic projects that included Riverfront 2000, a planning project began in the late 1980s and 1990s, that, by many measures, came to fruition. Downtown was revitalized along the riverfront. A civic center was built in 1995. Business development followed. Downtown was “greenscaped” with trees and pedestrianfriendly space. Riverfront Park came to fruition.

North Mankato has had some success as well with recent redevelopments of Belgrade Avenue and the Marigold building. Developers also have proposed a six-story, 100-unit apartment complex.

The latest civic development project, Envision 2020, grew from the grass roots ideas of some 500 community members.

Its annual report details small successes like the expansion of bike trails, and larger developments like the formation of the City Center Partnership that works for coordination of downtown events in the entertainment district.

The list goes on. Smaller projects like Chesley Skateboard Park were a pipe dream to some at one time. And few thought there would be major investments in renovations like the Graif Building and the former HECO building soon to be opened as US Bank Center. Lutz and Dotson suggest why these things happened.

People got together at places like the Jaycees or Rotary or Kiwanis clubs. There

By Joe Spear was enough social capital around that people felt comfortable working together in cooperation and didn’t see projects as business competition.

Those personal relationship are part of what gets projects done, says Dotson.

In the old days, people would just raise their hand to volunteer, now, everyone’s extremely busy, but if people are asked in a personal way to lead a project, they will.

Many business people, because they already run organizations, are natural leaders for civic events. The list of the most influential after Dotson and Lutz include many business leaders as well.

Says Dotson: “Now you see people like Tony Frentz, Todd Snell, the Schwickerts, Tami Paulsen, Dave Wittenberg and all these others - they’re investing into the community with their dollars and the leadership is amazing. There’s a much broader sense of community. “Just look at what’s happening in hospice fundraisers or other major fundraisers, the leadership is significant and they’re always sold out,” Dotson said.

That broader sense of community will more likely than not be even more important as Mankato approaches its Envision 2020 goals.

Government may not be as much of a partner as it once was. The needs of the retiring baby boom may leave little room in government coffers for civic projects like civic center expansions.

Leaders will be more challenged to develop private sector partnerships or partnerships with nonprofits. But if history is any example, it should be doable. MV Joe Spear is executive editor of Minnesota Valley Business. Contact him at 344-6382 or jspear@mankatofreepress.com

Pauline Kruger Vice President, Mankato Location

Nate Zender Loan Officer, Mankato Location

1601 Adams St., Mankato, MN 56001 • PO Box 310, 53 1st St. SW, Wells, MN 56097

800.944.5869 • www.wellsfederal.com

■

Business Informer

Construction Strong home building in Mankato

Mankato had a surge in residential construction permits in March, doubling the pace set a year earlier.

Mankato issued $4.2 million worth of permits for singlefamily homes and apartment complexes.

North Mankato’s residential permits fell to $607,100 in March compared to $809,000 a year earlier.

There were 19 new housing starts in Mankato and one in North Mankato for March.

Commercial construction up

Continuing a fairly strong start to the year, commercial construction and renovations were solid in March.

Mankato issued $1.9 million in commercial permits, up from $888,500 a year earlier.

North Mankato had $650,000 in commercial permits compared to $89,500 a year earlier.

Foreclosures fell last year

Final 2011 county statistics show foreclosures in the ninecounty region fell in all counties but one — Brown County.

Blue Earth County, with 134 foreclosures last year, saw a 5 percent decline from 2010. Most of the other counties saw large declines (19-43 percent). Brown County saw 67 foreclosures, an increase of 46 percent over 2010.

Many analysts expect foreclosure numbers to go up this year. That’s because the foreclosure process was temporarily slowed last year after some banks were found to be foreclosing without doing the proper processing work.

■■■

Energy

Gas prices to peak in May

During the April-through-September summer driving season this year, regular gasoline retail prices are forecast to average about $3.95 per gallon (state taxes vary), peaking in May at a monthly average price of $4.01 per gallon, according to the federal Energy Information Administration. Regular gasoline retail prices should average $3.81 per gallon in 2012 and $3.73 per gallon in 2013, compared with $3.53 per gallon in 2011.

Natural gas inventories high

The warmer-than-normal weather this past winter contributed to high natural gas working inventories that continue to set new record seasonal highs, with March 2012 ending at an estimated 2.48 trillion cubic feet, about 57 percent above the same time last year.

The 2012 Henry Hub natural gas spot price forecast is $2.51 per million British thermal units, a decline of $1.49 from the 2011 average spot price. Henry Hub spot prices will average $3.40 in 2013.

8 • may 2012 • MN Valley Business

Coal-powered electric falls

Electricity generation from coal should decline by about 10 percent in 2012 as generation from natural gas increases by about 17 percent. Electricity generation from coal will increase by about 7 percent and generation from natural gas fall by 3 percent in 2013 as projected coal prices to the power sector fall slightly while natural gas prices increase.x

Global crude oil use up some

Global liquid fuels consumption will increase by 0.89 million barrels per day in 2012, while total liquids supply increases by 1.81 million bbl/d.

Crude oil production will increases by about 720 thousand bbl/d in 2012 and then fall by 150 thousand barrels per day in 2013.

Crude prices down next year

The projected U.S. refiner acquisition cost of crude oil averages $112 per barrel in 2012 and $110 per barrel in 2013. West Texas Intermediate spot prices will average about $106 per barrel in both 2012 and 2013.

Hydropower declines

After growing 14 percent in 2011, the total renewable energy supply is projected to decline by 2.7 percent in 2012.

This decrease is the result of hydropower resource levels beginning a return to the long-term average, with supply falling by 0.4 quadrillion Btu (12 percent). The decline in hydropower from the 2011 level offsets growth in other renewable energy supplies.

Renewables supply increases slightly in 2013 as hydropower continues to decline (4.3 percent) and non-hydropower renewables grow by 2.8 percent, which is modest compared with recent experience.

Under current law, federal production tax credits for windpowered generation will not be available for turbines that begin operating after the end of 2012.

Wind-powered generation, which grew by 26 percent in 2011, is forecast to grow an additional 14 percent in 2012 and 5 percent in 2013.

Ethanol production down In terms of liquid renewable fuels, ethanol production will fall slightly, from an average of 910 thousand barrels per day in 2011 to an average of 900 barrels in both 2012 and 2013.

This forecast assumes that E15 (gasoline blended with 15 percent ethanol by volume) does not yet reach the market.

Consequently, U.S. ethanol production is projected to exceed the volume that can easily be used in the U.S. liquid fuels pool, so the nation will continue to be a net exporter of ethanol over the next two years.

Biodiesel production in 2011 averaged about 61 thousand barrels per day (939 million gallons of total annual production). Forecast biodiesel production averages 56 thousand bbl/d in 2012, and 65 thousand bbl/d in 2013.

CO2 emissions drop further After declining by 1.9 percent in 2011, fossil fuel emissions are projected to further decline by 1.9 percent in 2012, but increase by 2.1 percent in 2013.

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Initial unemployment claims

Minnesota initial unemployment claims

Business Barometers

Nine-county Mankato region

Major industry

’11

March ’12

Percent change ’11-’12

Construction Manufacturing Retail Services Total*

260 302 65 308 935

194 396 71 253 914

-25.4% +31.2% +9.2% -17.9% -2.2%

2011

2012

(in thousands)

120,000

2,000

110,000

1,000

F

M

A

M

J

J

A

Local number of unemployed

S

O

N

2011

D

2012

Nine-county Mankato region 9,662 8,560 10,000

’12

Percent change ’11-’12

5,031 3,259 2,017 7,717 18,024

4,029 2,519 1657 6,359 14,564

-19.9% -22.7% -17.8% -18% -19.2%

Minnesota non-farm jobs 3,000

J

’11

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.

Nine-county Mankato region 122,571 124,812 130,000

100,000

March

Construction Manufacturing Retail Services Total*

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.

Local non-farm jobs

Major industry

0

J

F

2011

2012

2,736.3 2,766.7

M

A

M

J

J

A

S

O

N

D

Minnesota number of unemployed 2011

214,782 193,355

225,000

2012

8,000 200,000

6,000 4,000

175,000

2,000 0

J

F

M

A

M

J

J

A

S

O

N

March

2011

Unemployment rate

5.7%

5.1%

55,589

56,769

3,339

3,034

2012

Source: Minnesota Department of Employment and Economic Development

10 • may 2012 • MN Valley Business

J

F

M

County/area

(includes all of Blue Earth and Nicollet Counties)

Number of unemployed

150,000

A

Unemployment rates

Mankato/North Mankato Metropolitan statistical area

Number of non-farm jobs

D

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

M

J

J

A

S

O

N

D

Counties, state, nation March 2011 March 2012 5.8% 7.9% 9.7% 11.0% 7.5% 5.5% 7.6% 8.1% 7.9% 6.8% 7.2% 9.2%

5.1% 7.5% 7.5% 9.3% 6.2% 5.1% 6.9% 7.0% 7.5% 6.1% 6.5% 8.4% J. Malmanger

Residential building permits Mankato $2,107.5 $4,198.7

2011

2012

Residential building permits North Mankato $809.9 $607.1

(in thousands)

$3,000

2011

2012

$8,000 $2,000

$6,000 $4,000

$1,000

$2,000 $0

J

F

M

A

M

J

J

A

S

O

N

D

Source: City of Mankato

2011

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

2012 97 75

150

A

2011

M

J

J

A

S

O

N

D

10 M

A

M

J

J

A

S

O

N

D

Commercial building permits Mankato $9,000

11 20

0

J

F

M

A

M

J

J

A

S

O

N

D

Source: Cities of Mankato/North Mankato

Source: Realtors Association of Southern Minnesota

$888.5 $1,879

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

2012

30

50 F

M

40

20

J

F

Housing starts: Mankato/North Mankato

100

0

J

Source: City of North Mankato

Existing home sales: Mankato region 200

$0

(in thousands)

2011

Commercial building permits North Mankato $89.6 $650

(in thousands) $12,000

2012

2011

2012

$9,000

$6,000

$6,000 $3,000 $0

$3,000 J

F

M

A

M

J

J

A

S

O

N

D

2011

County

2012 4.9%

5.0% 4.5%

3.5%

4.0%

J

F

M

Source: Freddie Mac

F

Foreclosures:

Interest rates: 30-year fixed-rate mortgage

4.0%

J

M

A

M

J

J

A

S

O

N

D

Source: City of North Mankato

Source: City of Mankato

5.5%

$0

A

M

J

J

A

S

O

N

D

Blue Earth Brown Faribault Le Sueur Martin Nicollet Sibley Waseca Watonwan

2010-2011 totals 2010 2011 183 46 51 160 53 64 81 81 42

134 67 32 129 43 59 57 50 24

Percent change -5% +46% -37% -19% -19% -8% -30% -38% -43%

Source: Minnesota Foreclosure Partners Council J. Malmanger

MN Valley Business • may 2012 • 11

Business Barometers

$10,000

(in thousands)

Business Barometers

Vehicle sales

753 1,072

1,200

Sales tax collections

Mankato — Number of vehicles sold 2011

2012

1,000

Includes restaurants, bars, telecommunications and general merchandise store sales. Excludes most clothing, grocery store sales.

$400

800

$300

600 400

$200

200

$100

0

Mankato 2011 2012

(In thousands) $464.2 $490.6 $500

J

F

M

A

M

J

J

A

S

O

N

$0

D

Source: Sales tax figures, City of Mankato

Lodging tax collections $26,694 $27,600

$45,000

J

F

M

A

M

J

J

A

S

O

N

D

Source: Sales tax figures, City of Mankato

Mankato food and beverage tax

Mankato/North Mankato 2011 2012

$44,915 $50,096

$60,000

2011

2012

$50,000 $30,000

$40,000 $30,000

$15,000

$20,000 $10,000

$0

J

F

M

A

M

J

J

A

S

O

N

D

Source: City of Mankato

$0

J

F

M

A

M

J

J

A

S

O

N

D

Source: City of Mankato J. Malmanger

Stocks of local interest

Gas prices-Mankato

March 14

April 16

Percent change

Archer Daniels

$31.57

$31.01

-1.8%

Ameriprise

$57.48

$54.92

-4.5%

Best Buy

$24.72

$21.89

-11.4%

Crown Cork & Seal

$37.16

$37.28

+0.3%

Fastenal

$52.37

$48.28

-7.8%

General Growth

$16.80

$17.03

+1.4%

General Mills

$38.51

$38.70

+0.5%

HickoryTech

$10.75

$9.75

-9.3%

Hutchinson Technology

$2.24

$2.14

-4.5%

Itron

$47.00

$44.34

-5.7%

Johnson Outdoors

$16.98

$18.90

-11.3%

3M

$89.52

$87.33

-2.4%

Target

$58.60

$57.53

-1.8%

U.S. Bancorp

$31.34

$31.33

-0.1%

Wells Financial

$17.00

$17.15

+0.9%

$1.00

Winland

$0.85

$0.63

-25.9%

$0

$26.42

$26.43

+0.1%

Xcel

J. Malmanger

12 • may 2012 • MN Valley Business

2012

2011

$3.85

$4.00 $3.00 $2.00

$3.79 (2012)

$1.00 $0

J

F

M

A

M

J

J

A

S

O

N

D

Gas prices-Minnesota 2012

2011

$3.80

$4.00 $3.00 $2.00

$3.76 (2012)

J

F

M

Source: GasBuddy.com

A

M

J

J

A

S

O

N

D

J. Malmanger

Local farm income increases in 2011 Agricultural Outlook

H

ow profitable was farming in 2011? The answer probably depends on who you ask, where they live, whether they raise primarily crops or livestock, and on their farm management decisions. The South Central, Southwest, Southeast Minnesota Farm Business Management Summary was recently released by the Farm Business Management instructors.

It includes an analysis of the farm business records from farm businesses of all types and sizes in southern Minnesota. This annual farm business summary is probably one of the best gauges of the profitability and financial health of farm businesses in the region on an annual basis.

Background • A total of 1,207 farms from throughout south central, southwest, and southeast Minnesota were included.

• The average farm size was 667 acres.

The top 20 percent net income farms averaged 1,363 acres, while the bottom 20 percent Net Income farms averaged only 274 acres.

• 20 percent of the farm operators were over 60 years old, 32 percent were between 51 and 60 years old, 26 percent were between 41 and 50 years old, and 22 percent were 40 years old and under.

• In 2011, the average farm business received just 8.5 percent of the net farm income from government farm payments. This percentage was 54.7 percent as recently as 2005.

• The average non-farm Income in 2011 was $30,867, which was down slightly compared to 2010, and well below the 2008 non-farm income level of just over $34,000.

• The average farm business spent $920,342 in 2011 for farm business operating expenses, capital purchases, and family living expenses. Most of these dollars were spent in local communities across the region.

Farm financial analysis • The average farm business had $842,153 in gross farm income in 2011, which was an increase of 18 percent from 2010, and was the highest ever gross income per farm.

• The average farm operating expenses for 2011 were $665,873, which were up 13.9 percent from 2009 expenses,

•

•

•

•

and again were highest ever operating expenses per farm.

The average net farm income for 2011, after crop and livestock inventory adjustments, capital adjustments, depreciation, etc, was at a record level of $199,794. The strong 2011 income was 8.7 percent above the previous record in 2010, and was well above the average incomes of $61,350.

There was large variation in net income in 2011, with top 20 percent profitability farms averaging a Net Farm Income of $567,905, and the low 20 percent profitability farms averaging only $72.

The average farm showed an earned net worth improvement of $160,642 in 2011, which was up 5 percent from 2010.

Total assets and total liabilities (debt) have risen steadily for the average farm business in recent years; however the average debt-to-asset ratio, which measures the solvency of the farm business, has dropped from 56 percent in 2002 to about 41 percent in 2011.

Crop producers analysis • The average corn yield on area farms in 2011 was 171.1 bushels per acre, which was 9.9 percent lower than the 2010 average yield of 190 bushels.

2011 broke a string of nine straight years (2002-2010) that corn yield exceeded 175 bushels per acre. The average soybean yield was 44 bushels per acre, which was down 14.9 percent from the average yield of 51.7 bushels per acre in 2010.

• The average price of the corn sold was $5.68 per bushel, compared to $4.66 in 2010. The average price for soybeans sold was $11.47 per bushel, compared to $10.80 in 2010.

• The average costs for corn production on cash rented land was $4.45 per bushel, compared to approximately $3.50 per bushel in 2010. The average costs for soybean production on cash rented land was $9.88 per bushel, compared to $7.90 in 2010.

• The average net return from corn production on cash rented land was $211.81 per acre, slightly below the $219.23 in 2010. The average return from soybean production on cash rented land in 2011 was $70.07 per

14 • may 2012 • MN Valley Business

By Kent Thiesse acre, which was well below the $149.57 per acre level in 2010.

Livestock producers analysis • There was a very positive average net return from farrow-to-finish hog production in 2011, with an average net return of $7.62 per cwt. of carcass sold, or about $15.75 per market hog sold. The positive returns in 2011 are a significant increase above a positive net return of $2.90 per cwt. in 2010, and a negative profit margin ($10.76) in 2009.

• Producers finishing feeder pigs in 2011 showed a positive net return of $7.57 per cwt. of carcass sold, or about $15.50 per market hog sold, which was down slightly from $8.07 in 2010.

• The average net return in dairy operations in 2011 was $524 per dairy cow, which was up from $177 per cow in 2010, and was a major improvement over the average net loss of ($210) per cow in 2009.

• The average net return from beef cattle finishing in 2011 was $20.90 per cwt., or about $275 per head produced, and was the highest profit margin in the past decade.

Complete farm management results are available: http://www.finbin.umn. edu/ MV Kent Thiesse is a farm management analyst and vice president, MinnStar Bank, Lake Crystal. He can be reached at (507) 381-7960 or kent.thiesse@minnstarbank.com

Corn prices — southern Minnesota 2012

2011

$8.00

$7.00

$13.74

$12.00 $11.00 $10.00

$5.97

$2.00

$12.87

$9.00 J

F

M

A

M

J

J

A

S

O

N

D

Source: USDA

J

F

M

M

J

J

Milk prices

185 pound carcass, negotiated price, weighted average

2012

2011

A

S

O

N

D

$90.00

$22.00

$80.00

$20.00

$70.00

$18.83

$18.00

$80.65

$60.00

$16.00 F

M

A

M

J

Minimum prices, class I milk Dollars per hundredweight

2012

2011

$24.00

$91.73

J

A

Source: USDA

Iowa-Minnesota hog prices $100.00

$8.00

J

A

S

O

N

D

Source: USDA

$14.00

$17.69 J

F

M

A

M

J

J

A

S

O

N

D

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.

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STAFFING AGENCY Express Emplyment Professionals 113 Monroe Avenue North Mankato, MN 56003 507-387-5620 www.expresspros.com For information on including your service to this directory, please contact

Cheryl Olson 507-344-6390

J. Malmanger

Business Barometers

$13.00

$4.00

$50.00

(dollars per bushel)

2012

2011

$14.00

$6.00

$0

Soybean prices — southern Minnesota

(dollars per bushel)

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Updates: Business news, local relevance

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Winland may be delisted from exchange

Mankato-based Winland Electronics announced that it received a notice from NYSE Amex indicating that Winland is not in compliance with certain of the Exchange’s continued listing standards. Winland was cited by the Exchange for noncompliance with the following section: 'stockholder’s equity of less than $6,000,000 and losses from continuing operations and/or net losses in Winland’s five most recent fiscal years.

Winland has been afforded the opportunity to submit a plan of compliance to the Exchange by May 11, 2012. If Winland does not submit a plan or if the plan is not accepted by the Exchange, Winland will be subject to delisting procedures.

Updates

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aMPI reports $2 billion in sales

New Ulm-based Associated Milk Producers Inc. reported sales of $2 billion last year.

Though weak milk volume challenged all dairy manufacturers in the region last year, the cooperative’s diversified manufacturing network increased returns in key areas.

“Our cheese-packaging plant in Portage, Wis., and the New Ulm, Minn., butter plant contributed stellar returns to the bottom line,” AMPI president and CEO Ed Welch told some 400 delegates and guests gathered for the co-op’s annual meeting recently.

The 2011 performance marks the fifth consecutive year of growth in both consumer-packaged butter and cheese. The cooperative’s butter business increased 22 percent and packaged cheese sales climbed 43 percent in five years.

AMPI had a $7.5 million investment to purchase and install 18 technologically advanced cheese vats to improved production efficiency and cheese yield.

■

Xcel earns Energy Star honor

Xcel Energy has earned Energy Star’s highest honor, the Sustained Excellence Award, for continued leadership in delivering energy efficiency to its customers. ”This award honors our long-standing commitment to delivering value to our customers through our energy efficiency programs,” said Jay Herrmann, vice president of Marketing & Customer Energy Programs.

In the Energy Star New Homes program, Xcel helped 16,500 customers in Colorado and Minnesota reduce their annual home energy costs by as much as 40 percent.

This is the third year Xcel Energy has been recognized nationally by the program. In 2009 and 2011, Xcel Energy won Partner of the Year.

■

Foreclosure surge expected

More U.S. homes are entering the foreclosure process, setting the stage for a surge in properties repossessed by lenders this year.

The number of homes that received first-time foreclosure notices rose 7 percent in March from the previous month, foreclosure listing firm RealtyTrac Inc. said.

That marks the third consecutive monthly increase this year and reflects stepped-up efforts by banks to take action against

16 • may 2012 • MN Valley Business

homeowners who fail to keep up with mortgage payments.

“We’re not out of the woods yet with foreclosures,” said Daren Blomquist, a vice president at RealtyTrac. “There are more batches of foreclosures coming through the pipeline.”

■

CHS net falls 60 percent

CHS Inc., the largest farmer-owned cooperative in the U.S., reported second-quarter profit dropped 60 percent as the company saw earnings fall in both of its major segments.

Results for the cooperative have been led by its energy segment in recent quarters, which has helped mask weakness in its agricultural segment. But in the most-recent period, earnings in the energy segment, fell 61 percent to $42.1 million.

Earnings in CHS’s Ag Business segment, which includes a network of grain storage and processing facilities as well as fertilizer distributors, declined 58 percent to $36.2 million.

Within Ag Business, profit margins declined in its fertilizer business and in grain merchandising. Increased costs from acquisitions and expansions also weighed on earnings, the cooperative said.

■

Cargill earnings rebound

Agribusiness giant Cargill reported a rebound in earnings after its worst quarter in a decade, led by record profits in its global food ingredient businesses and stronger results in energy trading.

Minneapolis-based Cargill, one of the world’s largest privately held corporations, reported $766 million in earnings from continuing operations for the fiscal third quarter ended February 29, just ahead of $763 million a year earlier. Revenue rose 5 percent to $31.9 billion.

Third-quarter results represent a bounce back after Cargill’s second quarter profits fell 88 percent to $100 million — the worst quarterly performance since 2001, as earnings were hurt by investments made in equity markets and by distressed assets amid the European debt crisis.

Despite the third-quarter rebound, profits were still below year-ago levels in four of Cargill’s five main business units.

Cargill and rivals such as Archer Daniels Midland and Bunge were hit late last year by volatile prices, with commodity markets often gyrating on news of the European debt crisis rather than the fundamental factors like food supply and demand.

■ U.S. Bank beats expectations U.S. Bancorp reported earnings of 67 cents per share, slightly ahead of analyst expectations. Net income came in at $1.29 billion.

Highlights for the quarter included lending activities amounting to $56 billion; new and renewed commercial real estate commitments of $28.9 billion; $2 billion in new lines of credit and credit card accounts; and $25 billion in mortgages and other retail endeavors

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Special Focus: Human Resources

Practical tips to terminating employment

By Marie Wood

F

iring an employee is never an easy task for a business owner, but following the proper procedure can keep you on the right side of employment law and protect you from lawsuits.

Attorney Beth Serrill, partner at Blethen, Gage & Krause in Mankato, specializes in Beth Serrill employment law and works closely with human resources professionals to create policies and anticipate and manage employee issues. She also teaches employment law seminars. Prior to terminating an employee, Serrill advises that you to be prepared to do the following: Explain the termination. Have copies of relevant performance reviews, performance improvement plans and disciplinary warnings. Be prepared to provide the reason for termination in writing upon the request of the employee.

Have a witness. It is advisable to have another supervisor or human resources professional present during the termination.

Provide the employee with a chance to respond. Allow the employee to respond to the termination if he or she desires to do so, but don’t engage in a debate.

Cut off access to computer systems and emails. This may need to be done while the employee is in the termination meeting.

Collect company property from the employee. Have a list of company property, including keys and passwords, that you need to obtain from the employee.

Allow employee to collect personal property. Schedule the termination meeting to eliminate or minimize the employee’s contact with other employees before he or she leaves the premises. Allow the employee to gather personal property with a supervisor present. If a box or bag will be necessary, have one ready prior to the termination meeting.

18 • may 2012 • MN Valley Business

Deal with the final paycheck. Have the paycheck ready to present to the employee or advise when it will be provided, bearing in mind that the employee will have a right to it within 24 hours of termination.

Address paid time off. Be prepared to explain whether the employee is entitled to any accrued but unused paid time off.

Provide information regarding medical insurance benefits.

Have any necessary COBRA information ready for the employee.

Complete a written exit interview. Document what you’ve discussed, what you give the employee (e.g. final paycheck, COBRA information), and what the employee gives you (e.g. keys). Ask the employee to sign the exit interview.

Respond to other employees’ questions about the termination. Prepare a response to other employees that addresses any changes in protocol or procedure. . MV

Avoiding mistakes in terminations As an employment law litigator, Beth Serrill also understands the pitfalls in employment termination. Serrill advises managers to avoid these common mistakes: • Not doing what you said you would do.

• Not providing warning or documenting performance or discipline issues.

• Not being consistent.

• Terminating an employee in haste.

• Terminating an employee too soon or too late.

• Failing to consider the employee’s perspective.

• Withholding funds from the employee’s final check without written consent.

• Not considering the risks of termination and, when applicable, considering severance in exchange for a release of claims.

Building a strong team of employees

By Marie Wood Team building has been a buzz word in the human resources field for decades.

That’s because team building leads to a strong staff that can help a business provide the best possible product and customer service.

For instance, Target has succeeded in team building at every level of the corporation. At the store level, cashiers and stockers are called team members and managers are team leaders. Team leaders hold daily team meetings and work along side team members wearing the same uniform of khaki pants and red shirts.

Kristie Campana, who holds a Ph.D. in industrial/organizational psychology, and teaches at Minnesota State University, worked for five years at MDA Leadership Consulting, where she was an internal consultant for Target

and Schwan’s.

At Target’s corporate level, Campana’s team met every Friday for a half hour to take a walk or have a frozen yogurt and talk about weekend plans.

“It’s about getting to know people and understanding where they’re coming from. That helps to build teams,” said Campana.

Team building also relates directly to retention rates. Retention is a bottom line expense, because hiring and training employees is expensive.

“When people enjoy coming to work and have good support, they’re happy.

They stick around,” said Campana.

Plus positive behaviors and attitudes on a team are contagious. ”If you see somebody helping someone else, you’re more likely to help someone,” said Campana. MV

Kristie Campana

Six effective team building tips

1. Everyone needs to have a shared goal.

While individual employees have their own agendas for recognition or resources, there must be a common goal of serving a customer or completing a project, explained Kristie Campana.

For example, in a restaurant, servers need to smile and be friendly toward all customers, not just the customers sitting at their tables, said Campana.

“Leaders and business owners need to remind people what the mission is,” said Campana.

2. Embrace all types of diversity, perspectives and work styles. People don’t always want to work with people who are different than them, but conflict can create good solutions,

explained Campana.

If a team of employees all approach a problem in the same way, then a business may not come up with a creative solution or attain progress.

3. Negotiate and compromise. Conflict is part of being a team, but it can be minimized with assistance from a business leader. “Leaders need to help employees negotiate and find the win-win situations or find ways to resolve issues and compromise,” explained Campana.

4. Translate differences among employees.

Sometimes a manager has the insight that can help c o w o r k e r s understand each other better, which can improve the way coworkers relate to each other.

“Helping to encourage clear and open communication is something a leader can do for a team,” said Campana.

5. Don’t play the blame game.

When there are problems at any level of the business, put the focus on solving the problem instead of allowing

employees to take sides and look at the issue from a winning or losing position, said Campana.

6. Look for small opportunities. Small, routine things that managers and employees can do on a daily basis are the most effective team building practices.

Team building can be as easy as introducing coworkers, establishing mentors or go-to employees, having bag lunch get-togethers, and short team meetings.

“Leaders need to take time all the time to build teams,” said Campana. MV

MN Valley Business • may 2012 • 19

Business Commentary

Structuring for Growth M anufacturers enter into the ISO 9001 certification process for a variety of reasons.

On the revenue side of the equation, lack of certification can impede your ability to pursue new markets that require or desire it. It can also decrease the amount of business you receive from existing customers if they begin to prefer ISO certified suppliers.

On the cost side of the business, having a better quality management system should allow you to deliver the same product at a lower cost. In the companies I have helped to pursue ISO, there is another, unexpected benefit as well, and it is often the one that companies find most valuable. That benefit comes in the form of structure.

Because ISO is not a quality system, it’s a quality management system. Even more than that, it’s a complete business management system. As companies grow and expand, there comes a point where the existing informal management system can no longer accommodate the growth, and so the growth plateaus.

The ISO certification process is a process-based approach that allows you to shed that old system, and develop a more structured, formal one that can sustain continued growth.

A 2008 Harvard Business Review study entitled “Quality Management and Job Quality: How the ISO 9001 Standard for Quality Management Systems Affects Employees and Employers” supports this idea. The study observed 1,100 firms in California, half of which were ISO certified, and half of which were not. It found that ISO registered firms had about 9 percent higher revenues and about 10 percent higher employment than comparable firms without ISO registration.

More ISO registered firms were also still in business fourand-a-half years later by a ratio of 99.5 percent to about 93 percent of firms without ISO registration.

The key to realizing ISO’s value as a business strategy lies in tailoring its requirements to fit your individual company, and not the other way around. Many business leaders share a misunderstanding that they must fit their company into an ISO mold. But the best way to develop ISO is to first ask what your business needs, develop processes to ensure those needs are being met, and then fine-tune those processes to meet ISO requirements. Though it takes time to develop and maintain this new system, it is time well-spent if the system helps the overall business in addition to providing it with ISO certified status.

If you’re considering ISO certification, look at the current frustrations you experience in your business. Then, compare those frustrations with some of the expected benefits from having a formal system. When I was a production manager at an OEM, I knew it was working when I could delegate to the system: not just to an individual person or to myself, but I could delegate the work to the system, and then I could track the system performance. If you’re feeling like you’re spending

20 • may 2012 • MN Valley Business

By Kent Myhrman

■

“ISO registered firms had about 9 percent higher revenues and about 10 percent higher employment than comparable firms without ISO registration.”

all of your time working in the business but not working on the business, ISO is one course of action you could take to develop not only your employees, but also the system that those employees will use to get the work done, and the management of that system. It puts the visibility, the skills and the good processes in place to perform well under a variety of situations.

Kent Myhrman is a Business Growth Advisor for Enterprise Minnesota. He has more than 30 years of experience in manufacturing, engineering, and sales.

Prior to joining Enterprise Minnesota, he served as the vice president of manufacturing for FMH Corp. He can be reached at 651-245-7811. MV (Reprinted with permission from Enterprise Minnesota, a Minnesota consulting organization serving medium size and smaller manufacturing companies.)

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Denny Dotson

Fred Lutz

Cover Story

Bursting with (civic) pride Lutz, Dotson named “Most Influential” for their civic involvement

By Tim Krohn | Photos by John Cross

W

hen Fred Lutz’s family moved to Mankato more than 60 years ago, the first family they quickly became close friends with were the Dotsons, who lived just two doors down in West Mankato’s Oak Knoll neighborhood.

Denny Dotson said it began a lifelong friendship with Fred.

The two boys eventually went on to take over their families’ businesses and both have been active in a wide variety of civic involvement and advocacy.

“For many years our whole family would spend Christmas Eve at their house,” Dotson said. “It was an incredible neighborhood and had an impact on both of our lives.”

Lutz, 72, and Dotson, 66, were selected by local civic and business leaders as the area’s most influential people in the “Civic Pride” category. (See related story about the Free Press/ MN Valley Business Most Influential process.)

Both men’s success in business — Dotson Company and Northland Beverage bottling — and their lifelong commitment to civic involvement grew from their parents’ example.

“It was impossible to grow up with my mother and father and not be involved,” Dotson said. “They were very involved

22 • may 2012 • MN Valley Business

in the community in many different ways.”

His mother grew up in Mankato, moved to Canada with her family and then returned when her father came back to manage the predecessor to Dotson Company — the Little Giant company — in 1923.

Lutz’s father bought Mankato Bottling Co. in 1946, bottling 7Up and other brands.

“My parents were involved in a lot of volunteering. My mother was on the board when they merged Immanuel and St. Joseph’s hospitals, and my dad was involved in a lot of things,” Lutz said.

“I was volunteering in high school. I was in student council and the American Field Service and I volunteered in college.

“When I got back to Mankato, the Mankato Jaycees were a big influence on me. That’s when I met a lot of my mentors like Glen Taylor and Howard Vetter. We all met in the Jaycees,” Lutz said.

a giving community Looking back at nearly six decades of civic involvement, both Lutz and Dotson say they are amazed about one thing in

the Mankato area. “There has never been a good project or idea or vision that didn’t get funded in Mankato. Somebody always steps up,” Dotson said.

Lutz agrees. “If you look back, very few fund drives have failed. Mankato has been very generous.”

As evidence, Dotson recalls a plan pushed years ago by then police chief Glenn Gabriel to build a community skate board park. “For years he had this idea and I thought, Well, it isn’t going to happen.” But then the Chesley family stepped up with a lot of funding. You go there now and watch the kids in that park and say, ‘Wow, what a benefit to the community.””

The two have watched and helped Mankato-North Mankato grow from a small rural city to a regional center and a Metropolitan Statistical Area.

“We used to sell Mankato by saying we’re only 1 1/2 hours from Minneapolis,” Dotson said. “Now we say, we have everything in Mankato.”

Lutz said the diversity of the community remains its strength.

“It’s fun to watch the education and hospital and clinic grow here. People would just die to have all that we have here.”

The new leaders

Successes, regrets While both men have been involved in many dozens of projects and organizations over the years, a few projects stick out.

Lutz, an avid pilot who is co-chair of the upcoming Air Spectacular show, has been a strong supporter of the Mankato Regional Airport. “I spent a lot of time working on the airport when it moved. It’s really a jewel out there. It’s an economic engine for the area, for MSU, for businesses in the community,” Lutz said.

Dotson said his interest has been to help push projects early on.

“A major project I worked on with Starr Kirkland and Malda (Farnham) and Ann Knutson was the civic center. My task was on the PR side, convincing the community that the sales tax was a good idea for Mankato.

“If you look back on what that sales tax has done for the community — the airport, parks, civic center, the city center have all benefited. It’s allowed Mankato to become a regional center. We’re not a little dot on the prairie anymore,” Dotson said.

“So that was pretty satisfying.”

While both men have been involved in projects that never took hold, they say there’s no regret in exploring something even if it ultimately doesn’t succeed.

Lutz said there’s only one failed effort he was involved in that still brings regrets.

“It’s still disappointing not to see the two cities cooperating more, especially North Mankato — and I live in North Mankato.” Lutz and several other prominent civic and business leaders from the two cities made an effort in the mid-90s to get the cities to share more services and reduce duplication and competition.

“I don’t care if someone comes to LeHillier or Eagle Lake or Mankato, we’re all going to benefit. It’s hard for North Mankato people to accept they wouldn’t have what they have if they weren’t next to Mankato.

Lutz said things are better in that there is less obvious fighting, but he said the underlying tensions and competition remain.

“They don’t have to merge the cities, but they can share more public services.” MV

MN Valley Business • may 2012 • 23

Cover Story

Dotson and Lutz say the Mankato area is in good hands with the emerging leaders of today.

“The new leaders, they are night and day from my generation,” Dotson said. “What’s so exciting is they are competing with their dollars to invest in the community and not only for their (business’) bottom line. In the past, I think there was an obligation to do things, but it was more geared toward things that would improve the business community and their own bottom lines,” Dotson said.

“Now you see people like Tony Frentz, Todd Snell, the Schwickerts, Tami Paulsen, Dave Wittenberg and all these others — they’re investing into the community with their dollars and the leadership is amazing. There’s a much broader sense of community.

“Just look at what’s happening in hospice fundraisers or other major fundraisers, the leadership is significant and they’re always sold out,” Dotson said.

The men say the more hectic lifestyles of today do make it harder for people to step up to give their time, talent and resources.

“The huge difference from now and my parents’ era is that back then, whether it was PTA or church or whatever, if you needed volunteers, a half dozen hands would go up. Today we are incredibly busy. People won’t raise their hands, but if you talk to them one on one, they will volunteer. That’s what’s so important about personal relationships,” Dotson said.

Lutz said groups like Greater Mankato Growth are more methodical about identifying and training community leaders.

“I think the leadership trips GMG has taken are good because they get younger people involved and they understand that they have to give back. People get so involved with their family and jobs, you might lose that sense that you do have to give back,” Lutz said. He said that once people do commit to the community, they do it with vigor.

“You put them on something and they’ll get it done. They’re just hard workers.”

Lutz said those who most succeed in civic leadership have the same traits as good business leaders.

“Leading a civic group is like a company. How active the president is rubs off on the company. If the leadership is good, the project is successful. You see that in United Way drives — if they have a good active leader, they do well.”

Dotson, too, said leadership success is similar in any endeavor.

“You have to catch a vision and then engage people. People do want to make a difference. If you give them a chance to be involved, they will be.”

Political clout grows from local coalitions

By Tim Krohn Parents who placed a high value on education and public service helped mold U.S. Rep. Tim Walz and state Sen. Kathy Sheran during their formative years.

“My dad was a teacher and my parents were active in the church and community. It was just something you did and that carried over when I was a teacher,” Walz said.

Sheran’s father, Robert Sheran, was a legislator and a former chief justice of the Minnesota Supreme Court.

“He was a public servant and my mom was a smart, traditional mom. Education was very valued by both of my parents. My mom was a college graduate, which was unusual at that time.”

That background led both to teaching — Walz as a West High School teacher and Sheran as a college nursing teacher — and both to political office.

The two were chosen by a broad section of Mankato area civic, business and government leaders as the two most influential people when it comes to developing a regional political voice for the Mankato area.

Cover Story

Tim Walz

Walz said civic and political leaders in the Mankato region may not realize their political influence is unique.

“When something is too close you don’t recognize how unique it is. Southern Minnesota, Mankato in particular, the collaboration, working together, being on a team is a valued trait,” said Walz, who was first elected in 2006. “It’s not the way

things work everywhere.”

Walz said the biggest threat to local groups accomplishing things politically — be it on the local, state or federal level — is the harsh partisanship that grips much of the political world today.

“We have to think of ways to bridge these partisan issues. It’s mostly on the national level, but you have local groups that have been nonpartisan that are now getting a taste of this partisanship, the bomb-throwing.”

Walz said the ability to work together across party lines is stronger in Minnesota than in many states. Walz, a Democrat, said area GOP state legislative officials are willing and able to work with him.

“Sen. (Julie) Rosen was my guest at the State of the Union.

She’s a leader and a friend. I have a good friendship with Tony Cornish. I honor their election certificates and the people who elected them,” Walz said.

“We need to collectively bridge our differences. It doesn’t mean we’ll agree on everything but we need to work on common goals.” Walz said he has no confidence those in Washington will, on their own, tamp down the growing harshness and partisanship in politics. “I’m still hopeful, not because any genius out here is going to do it, but there is a slow, delayed reaction from the public that’s going to force it. The public is sick of it. People say, “I’m sick of Washington.” I tell them, you should see what it’s like being here.

“It will take a while but at the end of the day you’ll eventually get the government people want,” he said.

“If we did things out here the way they do it in Mankato, we’d get a lot done.”

24 • may 2012 • MN Valley Business

Kathy Sheran

Sheran, also first elected in 2006, said the most satisfying times in her career are not usually tied to the big, flashy issues.

Instead, she points to things like helping to keep the crisis center in Mankato open, helping the Open Door clinic when it was at risk of closing, and working to change legislation to help a North Mankato man with ALS who is facing loss of Medical

Assistance.

“It’s those things, not the Vikings stadium or Constitutional amendments that are fun. If you can give people a little help, that’s what keeps me going.”

Still, Sheran has had her big successes as well. As a freshman, she carried the Freedom to Breath bill that banned smoking in bars. She said her many years on the Mankato City Council prepared her for the Legislature.

“I understand what changes in the tax structure and changes in formulas do to communities.

“When I was on the City Council I realized the state establishes so many policies that affect our community and if there was ever an opportunity I’d like to go up there,” she said.

Sheran said the cities that get attention at the Legislature have either big populations or strong local coalitions.

“Rochester or Minneapolis, they’re much bigger and have many more legislators working for them.”

But south-central Minnesota, she said, makes up for a smaller population with strong coalitions. “Groups are much more effective if they build coalitions, building a support system and growing that support system.”

She points to the Highway 14 Coalition, Mankato civic center supporters and Greater Mankato Growth as groups that have grown in their approach.

“They’ve been coming up here and being much more visible at the Capitol,” she said.

“Communities like Mankato, Marshall, Owatonna — they may be competing with each other, but they also need to find those interests that they all share in common and work together on them.”

Following are the other finalists in the Most Influential survey: Political:

Kathy Brynaert, State Representative

Terry Morrow, State Representative

Pat Hentges, Mankato City Manager

Richard Davenport, MSU President

Mark Dehen, North Mankato Mayor

Jim Santori, Free Press Publisher

Anna Thill, Convention & Visitor’s Bureau President

Civic Pride: Cover Story

Tami Paulsen, Paulsen Architects, Director Business/ Marketing

Johnathan Zierdt, GMG President/CEO

Mark Dehen, North Mankato Mayor

How the Most Influential were chosen MN Valley Business/The Free Press wanted to find those people who are considered the most influential in the greater Mankato area in the three areas of: Growing the Economy of the Area; Civic Pride; Developing a Regional Political Voice.

Those selected in the Growing the Economy category are featured in this month’s magazine, while those in the other two categories will be highlighted in the April issue.

Rather than simply seek nominations or arbitrarily choose among a group of civic leaders, we asked a broad section of area leaders to participate in a process for

determining the most influential.

First, everyone was asked to name people they believed were the most influential in each category. That list was then winnowed down to the top vote-getters in each category. Those finalists were then surveyed again and each asked to list who they believe were the top three most influential people were from among the group of finalists (not including themselves).

That produced our list of the top two most influential people in each category.

MN Valley Business • may 2012 • 25

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Greater Mankato Growth

Capitalizing on our Talent In the February issue of Minnesota Valley Business, we told focus on providing a curriculum that prepares students for you about a comprehensive study being conducted by Greater good jobs.

Mankato Growth, together with the South Central Workforce Greater Mankato is well prepared to take advantage of this Council and our higher education partners. opportunity. “We are so fortunate in Greater Mankato to have This “Greater Mankato Talent Supply and Demand progressive leaders and outstanding higher education Study” compares anticipated employer demand to our talent institutions committed to engaging in this conversation, supply in order to identify opportunities for increased which will enhance the vitality of our regional marketplace,” business and talent development. These opportunities include said Zierdt. matching our talent to current and future business needs, developing and/or attracting talent in areas where we have a shortage and attracting businesses in areas where we have a surplus of talent. The results of this study, released May 2 at a “When the talented explorers of the new special Greater Mankato Talent Symposium, are available millennium choose your city, you attain the holy online at greatermankato.com/business-talent.php. More details on the study and resulting strategies will be featured in Grail of global leadership – brain gain, talent gain, future issues of Minnesota Valley Business.

So why all the focus on Talent? According to GMG and subsequently, job creation.”

President & CEO Jonathan Zierdt, “Increasing evidence suggests that Talent will be the number one asset for successful - Jim Clifton communities and regions moving forward. Simply put, communities that attract and retain talent will be those that Chairman and CEO of Gallop are successful, and those that have a shortage will be left behind.”

In his book, The Coming Jobs War, Gallop Chairman and CEO Jim Clifton indicated the availability of good jobs will be a key differentiator for communities. “Humans used to desire love, money, food, shelter, safety, peace and freedom more than anything else. The last 30 years have changed us. Now people want to have a good job, and they want their children to have a good job,” he wrote. A “good job,” according to Clifton and the results of Gallop polls, “is a job with a paycheck from an employer and steady work that averages 30+ hours per week.”

According to Clifton, “Wherever the most talented choose to migrate is where the next economic empires will rise.”

He encourages leaders to look at Members of the Cities/Colleges/University Advisory Council (made up of leadership Greater the impact of all their decisions on Mankato Growth, Mankato and North Mankato, Mankato Area Public Schools and the five jobs and education institutions to area higher education institutions) review a preliminary copy of the Greater Mankato Talent Supply and Demand Study Report

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NEW BuSINESS - Snell Powersports & Equipment 1920 Madison Avenue, Mankato

NEW OWNEr - Geeks2You 830 North Riverfront Drive, Mankato

Thanks for another successful Career Expo Members of our region’s future talented workforce, got ideas for career options at the 2012 Greater Mankato Career Expo on April 4. Thanks to the participation of more than 200 businesses and individuals, more than 1,100 high school 10th graders from throughout the region were able to learn about a variety of career options available here. Businesses created interactive exhibits with equipment and items used in their industry, visual aids and hands on activities. The annual event is put on by Mankato Area Public Schools and supported by various public and private organizations.

* Photos By Sport Pix

MN Valley Business • march 2012 • 29

Greater Mankato Growth

EXPANSION - Target Mankato River Hills Mall, Mankato

Member Activities upcoming Member Events

5:00 - 7:00 p.m.

May 1 June 5 July 10

JBeal Real Estate Group in the Historic Graif Building North Star Aviation Mankato MoonDogs

Greater Mankato Growth

2012 Business After Hours Sponsored by

7:30 - 9:00 a.m.

May 16 June 20 July 18

Mayo Clinic Health System United Prairie Bank - Hilltop Abdo, Eick & Meyers, LLP

2012 Business Before Hours Sponsored by

February Business After Hours at Bolton & Menk

February Business Before Hours at Minnesota Valley Granite

March Business After Hours at Gustavus Adolphus College

March Business Before Hours at MRCI WorkSource

For information on these and other member events visit greatermankato.com/gmg-events.php

30 • maY 2012 • MN Valley Business

cavalier calls on the newest greater Mankato growth members

Each year the business community looks forward to Greater Mankato Songs on the Lawn presented by Xcel Energy. This annual summer tradition gives co-workers, friends and families from all around the region the opportunity to gather in the City Center over their lunch hour every Thursday in June from 11 a.m. – 1 p.m. The annual series features live music by area bands, food sold by 12 vendors and fun activities led by the Mankato Family YMCA. Each week’s event takes place in the Civic Center Plaza in front of Mankato’s Intergovernmental Center, with free admission and parking in the civic center and cherry street ramps. This year’s musical entertainment will be provided by The Divers on June 7, The Lost Walleye Orchestra on June 14, The Rain Kings on June 21 and DW3 on June 28. Greater Mankato Songs on the Lawn presented

by Xcel Energy is an event of Greater Mankato Growth and sponsored by Charter Communications, Hot 96.7 and Minnesota 93. For more information, visit greatermankato. com/gmg-songsonthelawn.php.

AffordAble Towing of MAnkATo inc.

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MN Valley Business • MAY 2012 • 31

Greater Mankato Growth

The 2012 Greater Mankato on the Green Golf Tournament presented by Spherion Staffing & Recruiting will be held Monday, July 9 at the Mankato Golf Club. The event gives members of Greater Mankato Growth an opportunity to promote their business and build relationships, all while having a great time on the golf course. The event begins with lunch and registration at 11 a.m., with a shotgun start kicking off the tournament at Noon, followed by a dinner, awards and silent auction beginning at 6:30 p.m. Last year this popular event filled up, so visit greatermankato.com/gmg-golf.php and register today for Greater Mankato on the Green presented by Spherion Staffing & Recruiting.

Leadership Education with a Community Focus

Greater Mankato Growth

The 2011 – 12 Greater Mankato Leadership Institute class is set to graduate this month. Over the past year, they have participated in a variety of activities designed for learning and putting into practice leadership skills that will help them throughout their lives and careers.

For 27 years, the Greater Mankato Leadership Institute has provided comprehensive leadership training with a community focus. In that time, the program has graduated more than 700 community leaders.

The nine month program consists of eleven day long sessions between September and May. Each year the curriculum is updated to ensure graduates are well prepared to serve as leaders in their workplace and community.

The program not only benefits participants, but their employers as well.

Employees who participate in the program develop their leadership skills and insight, with exposure to the latest leadership development tools and information that they can then bring back to their workplace.

For more information about the Greater Mankato Leadership Institute, visit greater greatermankato.com/gmgleadershipinstitute.php.

Congratulations to the 2011 – 12 Graduates Josh Anderson, Greater Mankato Convention & Visitors Bureau Laura Bealey, MRCI WorkSource Nick Burger, James R. Weir Insurance Agency Christopher Cavett, Short Elliott Hendrickson, Inc. (SEH) Mark Eskro, MTU Onsite Energy Jessica Frein, Blethen, Gage & Krause, PLLP Christina Froehlich, U.S. Bank – City Center Gary Gavin, United Prairie Bank – City Center Cory Genelin, Gislason & Hunter LLP Beth Ingalls, HickoryTech Douglas Johnson, Mankato Area Public Schools Brenda Leibfried, Eide Bailly Amy Linde, Greater Mankato Growth Rob Martin, V-TEK, Inc. Melissa McGraw, Snell Motors Mike McGowan, McGowan Water Conditioning Naomi Mortensen, Gustavus Adolphus College Carolyn Nelson, Minnesota State University, Mankato Christopher Nelson, V-TEK, Inc. Brent Pattison, Northwestern Mutual Financial Network Dalaine Remes, Minnesota Disability Law Center Stephanie Stack, AmericInn Hotel & Conference Center Jeff Stagg, Viking Electric Sam Steiger, Minnestoa State University, Mankato Laura Templin, Pathstone Living Scott Walter, HickoryTech Elizabeth Whitcomb, Minnesota State University, Mankato Sara Wilfahrt, South Central College Kate Wilson, TechniPac Scott Wojcik, HickoryTech Eric Woller, Bethany Lutheran College

Thank you 2011 -12 Sponsors:

Diana Gabriel Professional Certified Coach

Apply to be a part of the next Greater Mankato Leadership Institute!

Applications for the next session running September 2012 – May 2013 are due on June 1.

Qualified applicants will be interviewed by a selection committee in early July, with candidates notified of their acceptance in early August. greatermankato.com/gmg-leadershipinstitute.php 2012-13 Leadership Institute Sponsored by:

32 • maY 2012 • MN Valley Business

Greater Mankato CVB Budding with Spring Projects

By Christine Nessler Marketing & leisure Sales director

The Greater Mankato Convention & Visitors Bureau (CVB) is an affiliate of Greater Mankato Growth (GMG), operated as an LLC under GMC.The CVB is dedicated to the important work of attracting and servicing visitors to Greater Mankato.

MN Valley Business • maY 2012 • 33

Greater Mankato Growth

For the month of May, the Greater Mankato Convention and Visitors Bureau has many blossoming projects. National Tourism Week gives us an opportunity to grow the community’s understanding of the impact of travel and tourism.

We are just planting the seeds of an extensive rebranding process. We are also busy as bees planning another exciting year of the Minnesota Senior Games.

National Travel and Tourism Week is May 6 – 12. We celebrate NTT Week because travel and tourism are a vital part of our city, state, national and world economy. It is one of America’s largest industries. In fact, in 2011 travel and tourism generated $124 billion in tax revenue for local, state and federal governments. Without that revenue, each U.S. household would pay $1000 Cycling in the Minnesota Senior Games more in taxes each year. Thank you travelers! Not in the rebrand, because it’s important for us to understand the only are we benefiting from the $25,700 that travelers spend values and visions of our residents and community leaders. To every second, but the travel and tourism industry is also one of achieve this, we launched an online survey for residents America’s largest employers. One out of every nine jobs in the (destinationbranding.com/mankatosurvey). Then we will U.S. depends on travel and tourism. conduct one-on-one interviews and workshops for community NTT Week allows us to show our appreciation to the leaders with a destination branding expert. The process will people who are working hard in the travel and tourism enable us to determine our strengths and advantages in regard industry. During NTT Week we honor these people by to our main competitors and identify areas where our tourism presenting the Travel and Hospitality Awards in recognition of performance can be improved. their above and beyond service. Employers, guests and We are continuing to host great events in Greater Mankato, colleagues nominate the hospitality star of their choice in the including the 2012 Minnesota Senior Games. The Senior areas of Attraction, Hotel and Restaurant or Retail/Shopping Games, which includes a series of competitive events specifically and Friend of Tourism. On May 9 we will hold our Travel and aimed at participants ages 50 or better, is May 31 to June 3.

Hospitality Award event at the Mankato Brewery, where we The competitive events range from archery to track and field to will present the 2012 Travel and Hospitality Awards. pickleball to tennis. There is something for every interest. Each In the world of travel and tourism a community is a registration includes participation in up to five events, a wine product that needs to be marketed. We must have a brand to tasting at Indian Island Winery and an Athletes Picnic. Find stand out from other destinations in order to sell ourselves to out more at mnseniorgames.com or by contacting Paige potential visitors. This new brand has to be so much more than Schuette at the CVB at (507) 385.6660. a logo and tagline. It has to be a clear promise that we as a The CVB is embracing spring with our many budding community can deliver to our visitors - a summary of our projects. Stay tuned at visitgreatermankato.com as we continue personality and character as a community. to blossom.

The CVB hired a destination marketing agency to facilitate our rebranding. They have assisted dozens of communities like ours for three decades with their proven seven step destination branding process. This will enable us to engage the community

When private investment isn’t private Regional Outlook

T

here no question that the life blood of any business is capital and cash flow; and this is especially true for emerging small businesses. When starting up a new venture there are myriad expenses with little or no revenue coming in, making access to adequate capital essential to getting a venture off the ground. In fact many good ideas never get off the launch pad due to a lack of access to capital. And once the business is launched, cash flow becomes “king”, as expenses inevitably outpace revenues throughout the initial survival stage of the business. It is during this survival stage in the business development cycle where managing the rate in which funds are being expended vs. sales revenue coming in is key to the business’ viability.

When it comes to capitalizing a business there are two types of capital that entrepreneurs rely on: debt capital and equity capital. We are all familiar with debt capital as it is the strategy that most of us use to finance our homes and cars.

Banks and other lenders are more than willing to provide us with loans as long as we have sufficient collateral or other demonstrated means to pay back the loan with interest. But obtaining sufficient debt capital is often difficult when a small business is starting out with little equipment, real estate or other forms of tangible collateral that a lender can count on. On the other hand, equity capital is a form of investment where a financier provides outside funding in exchange for a partial ownership stake in the emerging business. Many call this type of investment “patient capital,” as the business owner does not have to begin paying back the funds, but rather as the business grows and prospers, so does that equity stake in the business.

Unfortunately, most of the financiers that make such equity investments are not typically interested in very small start-up firms as the risks are often disproportionately high in relation to the reward. Accordingly, those individuals and equity firms that choose to make investments in such start-up or

By Jack M. Geller, Ph.D early-stage companies are often called “angel investors.”

In an effort to encourage more angel investments in Minnesota the state Legislature passed a bill in 2010 establishing an Angel Investment Tax Credit program. The program, which began in the latter half of 2010, requires qualified investors seeking to make such investments, as well as qualified businesses wishing to receive these investments to register with the Minnesota Department of Employment and Economic Development. The reward for such compliance with the program is a refundable tax credit to the investor equal to 25 percent of the investment.

According to a recent legislative report it seems that the program is performing as intended. In 2011 there were 623 individual angel investors certified by DEED, of which 563 made an investment in a certified business, along with 21 certified investment funds, all of which made an investment as well. As a result in 2011, 113 qualified businesses received investments totaling $63.1 million through the program and $15.8 million in refundable tax credits were issued.

While most would consider the program a success, others have concerns.

As expected, the overwhelming majority of investments were made to businesses located in the seven-county Twin Cities region. In fact of the 113 firms receiving investments in 2011, only 11 were located outside the Twin Cities; 10 in

34 • maY 2012 • MN Valley Business

southern Minnesota and one in Duluth.

As a result of this apparent geographic inequity, a bill was drafted this session increasing the size of the refundable tax credit to 40 percent for investments made to businesses located in greater Minnesota. But is this really a good idea?

While few are more sympathetic to the concerns of rural Minnesota communities and businesses than I, at the same time I have always believed that smart equity investors make their investments in good companies regardless of their location. And while the opportunity to learn about such good companies is certainly easier if they are located in the Twin Cities area, maybe the appropriate response is for DEED to simply work harder at showcasing these investment opportunities in greater Minnesota. But is increasing the tax credit to 40 percent the answer?

Personally, I can’t help but think of a 40 percent refundable tax credit as the taxpayers of Minnesota subsidizing almost half of a private investor’s total investment without receiving any direct return on our investment. Can we even call that a private investment anymore?

Further, the program does not limit qualified investors to be Minnesotans.

So hypothetically, an out-of-state investor who has no tax liability in Minnesota, and who makes a $100,000 equity investment in a rural Minnesota company will simply get a refund check for $40,000. Really?

I can’t help but think of the recent remarks of Mankato’s city manager Pat Hentges in The Free Press, as he was reflecting on the strong employment growth and business development his city has experienced. Hentges noted, “The days of wielding all these financial incentives for getting companies (to locate here) is past.”

Well ... maybe not everywhere. MV Geller is professor & head of the Arts, Humanities & Social Sciences at the University of Minnesota Crookston.

He also serves as director of the federally funded EDA University Center at UMC. He can be reached at gelle045@umn.edu

Up and Coming

Dan Gross last year went to all propane-powered mowers for his organic lawn care service.

A little off the top Lawn Barber provides all organic lawn services

By Jean Lundquist Photos By John Cross

I

n 1993, Dan Gross was growing up in Le Sueur. He was 12 years old, and with his brother, Brian, founded D & B Lawn Services. He canvassed his neighborhood distributing fliers reading, “We do a really good job, and we don’t charge a lot.”

36 • maY 2012 • MN Valley Business

Dan Gross is now 30 and still in the lawn care business, today known as The Lawn Barber.

Today his fliers read, “Just a Little Off the Top.” For many years after his brother dropped away, Gross was a one man, one mower part-time shop.

But in the late 2000s, when he had the chance to

as they live on or near the water.

“It’s important for me to offer organic lawn care because I want to give people a different option. I want to give them a beautiful lawn without risking the health of their family, pets or the environment.” Gross reads reports of exposures to pesticides and herbicides linked to developmental disorders in children and calls them “troubling.”

From his work as The Lawn Barber, he also believes the chemicals are unnecessary.

Organic methods do require patience, however. Mowing

Up and Coming

purchase another lawn care business, he left jobs with the parks departments in the cities of Mankato and Le Sueur, and as a member of the grounds crew at a golf course, to focus on his own business.

None of this is all that unusual, until Gross starts talking about the chemicals he uses to keep lawns of his customers healthy and green. He uses none.

He didn’t have to look for alternatives to chemicals, or green wash his business; he never used any chemicals, even in the early days. “You have to get out of the chemical-kill mentality,” he says. “Weeds and diseases are symptoms of week plants and soil deficiencies. Repeated past use of toxic chemicals may have destroyed the necessary microbiotic life that exists in healthy soil.

Sometimes it can take several seasons for the soil to recover.”

Gross uses only organic products on lawns, and relies on natural methods of producing a lush, green turf.

For both fertilizer and weed control, Gross uses only corn gluten.

Corn gluten is a vegetable material that is a preemergent. That is, it affects seeds by drying them out before they can sprout.

Because timing is so critical for the application of corn gluten, Gross found himself scrambling in March this year to get the material broadcast, a month before he was expecting to be so busy.

“Most of my seasonal employees weren’t available yet, so I was running sun up to sundown applying corn gluten,” he says.

Gross has his office in Le Sueur and his shop in Elysian.

The core of his business is in the lakes region of Waseca, Waterville, Eagle Lake, Madison Lake, Le Sueur and Mankato. Perhaps that’s why his organic methods are so important to his customers, Gross said his propane mowers don’t pollute air or water and propane is not harmful if inhaled.

MN Valley Business • maY 2012 • 37

O PN E W E N LY ED

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Up and Coming

Dan Gross started a neighborhood lawn-cutting service when he was 12 and now, at age 30, operates The Lawn Barbers lawn care service. grass to a taller height so the grass can shade out weed seeds takes some getting used to. Aeration is another important component of a healthy lawn to allow water, nutrients and oxygen to get to the roots of grass. Gross believes in corn gluten as an effective herbicide, but with the caveat that timing is everything, and the unexpected early arrival of spring like weather this year has shown, it may not be the most efficient.

In a test plot in Le Sueur, he’s experimenting with an organic post emergent herbicide this year that he may offer his customers in the future. Its base is blackstrap molasses.

If this organic process to lawn care was the extent of how seriously Gross takes his responsibility to the health of his customers and the environment, most would consider it pretty good. But Gross goes further.

In 2011, Gross became not just the first, but the only professional lawn care service known in Minnesota to switch to all propane-powered lawn mowers. Gross calls it a considerable investment but says it was the right and the responsible thing to do.

“Gasoline is one of the dirtiest fuels, especially for emissions,” Gross says.

“Gas mowers emit hydrocarbons, a principle ingredient of smog, particulate matter, damaging to the respiratory

38 • May 2012 • MN Valley Business

system, carbon monoxide, a poisonous gas, and carbon dioxide, contributing to global warming.”

Gross cites statistics that show a walkbehind lawn mower releases as much pollution as a car being driven 340 miles.

That lawn mower, he says, is 3.5 horsepower. The mowers he uses are 27 horsepower.

Propane, he says, “is not harmful if inhaled, does not cause air pollution and is not harmful in water.”

Gross says he’s still looking for propanepowered blowers and trimmers, but for now, he’s doing the best he can to provide lush green lawns and environmentally safe turf for all.

As for his brother Brian, he’s still involved, as is the rest of the family. Brian and two sisters are musicians, and together they wrote a jingle for The Lawn Barber.

They ride in a trailer pulled by The Lawn Barber truck in parades in the summer, and play music, interspersing the jingle with the tag line, “Just a Little Off the Top.” Mother Lynne Gross serves as the office manager for The Lawn Barber.

And Dan continues to take Just a Little Off the Top. MV

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Profile

Chuck Sherwood became co-owner of Maverick Software Consulting in 2006, after buying part of the business from Martin Hebig who started the venture in 1999.

Maverick Software offers students real-world experiences

By Grace Webb Photos By Pat Christman

B

en Jongbloedt sits at his office computer, staring at the screen with ferocious intensity. He’s testing a software program to see if it runs smoothly. He’s worked on it for months and has already debugged it several times. The trick is to make sure his debugging program doesn’t create new problems for his client, Thomson Reuters — one of the top information and productivity solution providers in the U.S. legal system.

It’s a great job for Jongbloedt. He’s able to put his Internet technology skills to use and make high-level networking connections. The pay is definitely not too shabby. He gets plenty of hours, yet still has time to take off for finals. That’s right — Jongbloedt is still a student, finishing up his senior year at Minnesota State University. He’s working at Maverick

40 • maY 2012 • MN Valley Business

Software, a company that offers college students real-world experience working on software for businesses across the Midwest. “(When I heard about it), It seemed like a really great opportunity,” Jongbloedt said. “Now that I’m in it, I realize it’s a really, really great opportunity.”

Taking a risk In 1999, MSU alum Martin Hebig took out a home equity loan to start his own company, Maverick Software Consulting.

For a few years, he worked as an independent consultant, but then he sold part of the company to his friend and fellow MSU graduate, Chuck Sherwood, in 2006.

That year, the two co-owners formed a partnership with MSU. They were inspired by a 1990s IBM-MSU partnership that allowed MSU students to work for IBM by testing its operating systems. Hebig and Sherwood also wanted to offer students the chance to work in the “real world” while pursuing

Ever growing Up until 2011, Maverick Software stayed steady with one client. However, last year, the company experienced a period of record growth, expanding to two more offices and connecting with three more partners. Now, Maverick Software has six clients with six offices and 12 university partnerships, including the University of St. Thomas, Metropolitan State University, St. Cloud State University, Macalester College and Bethel University. More partners mean more job positions for students, and Maverick Software now has about 115 student employees.

“We’re growing,” Sherwood said. “It’s good for the company, it’s good for the clients and it’s terrific for the students.” To top off a great year, Maverick Software won the prestigious 2011 Innovative Collaboration of the Year Tekne Award from the Minnesota High Tech Association. The company had applied for the award for the past three years before finally winning it.

Now, Maverick Software is still expanding — but carefully.

“We can only grow so much every year,” Hebig said. “We look around and find good partners (and) good solid companies. We could take project work from any client that approaches us, but that wouldn’t be the (best fit) for the students.”

Hebig said the company’s five-year plan is to double in size, with 12 or 13 offices and 20 university partnerships. Maverick Software is planning to add a new client this summer, which would mean opening another office as well and expanding to three more universities, so it’s off to a good start towards its goal.

Hebig added that at Maverick Software, education is still the No. 1 priority, so he wants clients that will also value the students’ class time and enable them to balance school and work. In addition, Maverick Software works to build relationships between clients and student employees that will continue on after the students graduate. Many MSU students who worked at Maverick Software go on to work at Thomson Reuters. They also come back and share with Maverick Software about new technologies they’ve discovered.

It’s that tight-knit relationship that is at the heart of Maverick Software Consulting.

“I still love working with the kids,” Sherwood said. “They love learning the stuff and they’re very eager. It’s so much fun coming to work every day.”

Learning outside the classroom Jongbloedt started working for Maverick Software about a year ago, after he heard a recruitment pitch in one of his IT classes. He’ll still be here for a little while, but then it’s off to the real-world — for good. He isn’t worried, though; with all the experience he’s gained working at the software company, he’ll definitely be ready for the transition.

“Compared to school, we get to see a whole lot more realworld applications,” Jongbloedt explained.

He said his job has helped him know what to expect as a software tester if he made a career out of it. He said before he started working at Maverick Software, he wasn’t sure he wanted to continue in the field, but, after working with Thomson Reuters, he plans to stick with it. Now he sits back, rubbing his eyes. He’s run through the entire program and it’s flawless. No bugs. Success. MV

Elizabeth Garden is one of 115 student employees on several campuses that gets real-life experience at Maverick Software.

MN Valley Business • maY 2012 • 41

Profil;e

their university studies. It would be a win-win situation: companies could save money instead of outsourcing overseas to China or India, and students pursuing computer science, information technology and computer engineer majors could put what they learned in the classroom to use.

As luck would have it, while Maverick Software formed its partnership with MSU, the university was also making a deal with Thomson Reuters. Thomson Reuters had voiced an interest in increasing its visibility on university campuses so that it could hire promising students when they graduated.

However, the company did not want to have to deal with managing student employees at campus sites. Maverick Software Consulting solved this problem for them. It trained student employees in new technologies and offered them the chance to gain valuable real-world experience testing and developing new software, in addition to debugging current programs.

Thomson Reuters was Maverick Software’s first and biggest client. It provided enough work for the company to hire 80 students (20 of which work at the Mankato office) and expand to four offices: MSU, the University of Minnesota — Twin Cities, the University of Wisconsin — Madison and Iowa State University in Ames, Iowa.

All in the Family

Dan Gag (left) Joined his parents Larry and Irene Gag in the camper business rather than pursuing a career in law.

Doing it Gag’s way Dan Gag trades in law career for family business

By Sara Gilbert Frederick Photos By John Cross

S

hortly after Dan Gag finished law school, he was at a networking event mingling with other attorneys —including some who were nearing retirement. In the course of conversation, more than one of those longtime lawyers admitted that if they had the chance to go back and do it all over again, they would have chosen different careers.

Those comments were on Gag’s mind a few weeks later, when he had the opportunity to attend an event with a group of people working

42 • maY 2012 • MN Valley Business

in the camper and recreational vehicle business.

“To a person, they all said that they wouldn’t change a thing,” he remembers.

That’s when Gag made the decision to abandon his plans to pursue a career in law and to join the business his parents — Larry and Irene Gag — had started in 1972: Gag’s Camper Way. He officially joined the team as a sales person in 1999. Today he is the general manager and is buying the business from his parents. He handles most of the day-to-day operations — with a little

input from his mom and dad, who still come to the shop just outside of Mankato on Highway 169 regularly.

“Mom and Dad are a great wealth of information to fall back on,” he says. “We don’t make many decisions here without consulting them first.”

MN Valley Business: Were you involved in the business when you were growing up?

Dan Gag: My first summer working here was in 1983; I was about 12 years old. I did a lot of washing and cleaning campers. It’s how I earned my allowance back then. But I’ve had other jobs throughout the years, too. I was a high school debate coach, I worked in construction, I went to law school.

MVB: So it wasn’t always assumed that you would take over the business? There was no pressure from your parents?

DG: Not at all. In fact, it was almost the opposite — I would say that they put more pressure on me to try other things. Even when I came back after getting my law degree, I think they both felt that I should give that more time.

MVB: When did you decide to buy into the business?

DG: I started that in 2002. It had always been Dad’s goal to get to 30 years and then sell it. I’m still in the process of buying them out; it probably would be happening faster if not for the recession.

Chad Lachmiller makes sure everything is in good working order in a camper.

MVB: How did the economy affect the business?

DG: To be honest, IÕm surprised by how much business we still did — there were always people coming in the door. I think the fear of the recession was much worse than the recession itself. I would say that we bottomed out in 2009; 2011 showed improvement for sure, and so far in 2012, we’re about a third ahead of where we were a year ago.

MVB: Did anything about the business change because of the recession?

DG: There’s an old adage that says that hard times make for good business decisions. We gave every step of what we do more thought and really refined our process. Now we really try to focus on what the customer needs, what they want and what their budget is, then we try to fit what we show them into that.

We sit down and talk about that before we even go out and look.

MVB: How has the camper business changed in the 40 years since Gag’s was started?

DG: Campers keep evolving, so a lot changes. Right now, technology is driving the changes that we are seeing. We’ve got electronic awnings, electronic leveling systems, flat-screen TVs, iPod adapters. But another thing that’s changed is that 15 years ago, people would come here to shop around. Now, they bring in a print out from our website and say, “I want this.”

That has made the conversations we have with them even more important. We start with the interview in which we ask about wants, needs and budget. Then we show them a couple of campers, we focus on one, and then we go into what we call the demonstration stage. That’s what we do. I don’t think that a website can sell a camper like that.

MVB: How has it gone for your Mom and Dad backing away from the business? Has it been hard for them?

DG: No, I don’t think so. They don’t come in every day because they don’t need to. There’s a level of trust there that helps. And I think that because of the recession, we’ve become more of a team on things. And because of that, we’ve come out as a stronger, closer family business. MV

MN Valley Business • maY 2012 • 43

All in the Family

MVB: Was it hard to switch gears from planning to be a lawyer to coming back here?

DG: No. I wasn’t going into it blindly — I had already been exposed to every aspect of this dealership, from washing the campers to service work and sales. I knew what this was, I knew the nature of the business. When I went off to pursue my dream of going to law school, I think it was kind of the bright lights, big city thing; the idea of it was better than what it actually was. But I knew what this business was, and I knew that I liked it. When an attorney does business, as a general rule, it means that something has gone wrong. But in this business, it means that families are going on vacation.

Gag’s Camper Way, started in 1972, carries a full line of campers, from pop-ups to bus-size travel trailers.

Business Memos/Company News

Greg Swanson joins Brunton Brunton Architects in North Mankato has hired Greg Swanson as a project manager. He has more than 25 years experience in the architectural and construction sector in Minnesota.

■■■

Marlin Kunard

Key City Insurance honored Key City Insurance Agency of North Mankato was named to the Grinnell Mutual Reinsurance Company President¹s Club for 2012.

Key City Insurance ranks among the company¹s top 50 agencies and 15 farm mutual companies for outstanding production and profitability over a five-year period.

Kunard honored for 50 years of service Gislason & Hunter Attorney Marlin Kunard was honored by the Minnesota State Bar Association for 50 years of legal service at a dinner led by Supreme Court Justice Lorie Gildea.

Kunard was selected as a Minnesota Super Lawyer by Law & Politics in 1999 and 2000, and was appointed a Special Municipal Judge for North Mankato.

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■■■ Williams gets real estate award Farmers National Company has presented Lee Williams with the Farmers National Company Silver Eagle Award, the company¹s top award for real estate sales. Lee Williams and Jeanne Williams, sales associate, serve southcentral Minnesota and northern Iowa.

Lee & Jeanee Williams

Schmidt¹s wins top awards Schmidt¹s Meat Market in Nicollet took home five awards at the Minnesota Association of Meat Processors Convention. Schmidt¹s received two Grand Champion awards for their Raspberry Chipotle bacon and Polish sausage and two Reserve Grand Champion awards for their Jalapeno and Cheese snack sticks and Flat Iron Philly Steak.

They also received the Best of Show award for the Raspberry Chipotle bacon.

■■■ Office Moxie honored Madison Lake-based Office Moxie has been recognized by Constant Contact Inc.as an “All Star” for obtaining superior email marketing results for several clients. Office Moxie¹s results ranked among the top 10 percent of Constant Contact¹s customer base.

■■■ To submit your company or employee news. e-mail to tkrohn@mankatofreepress.com Put “Business memo” in the subject line.

■■■ Edina Realty opens in Waseca Edina Realty has opened an office in the Waseca Chamber of Commerce building at 111 N. State Street. It is operated by broker/manager Rachel VanDenBoom.

Call or e-mail Associate Editor Tim Krohn at tkrohn@mankatofreepress.com or 344-6383 for questions.

Rachel VanDenBoom

507-387-9271

507-387-9260

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Giving Back At I&S Group we place a strong emphasis on giving back to our communities, both as an organization and as individuals. We are proud that six of our employees serve on volunteer fire departments for their communities. This is just one example of the hundreds of civic and religious organizations that our firm and employees donate their time, talents, and money to.

I&S Group —a proud partner in our communities. Learn more at www.is-grp.com.

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