Mnvalley 9 13 by Free Press Media

Scott Dobie of Nutter Clothing.

Small businesses, big successes Longtime independents share keys to success

Also in this issue Hay by George! River Bend Business Products Jack Linkâ&#x20AC;&#x2122;s of Mankato

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F E A T U R E S September 2013 • Volume 5, Issue 12

Longtime independent businesses focus on service, knowledge

Jack Link’s of Mankato

Mike Sheid, plant manager of the Mankato Jack Link’s plant, has seen a big increases in production and staff in recent years.

‘Hay by George’ – and pumpkins, too

George Denn has become synonymous with selling hay in the region, but has been focusing more on raising and selling pumpkins.

River Bend Business Products

Jim Hansen, who began selling copiers in Mankato, now runs three full service locations along with his sons Ben and Matt Hansen

MN Valley Business • september 2013 • 5

■ september 2013 • VOLUME 5, ISSUE 12 PUBLISHER James P. Santori EXECUTIVE EDITOR Joe Spear ASSOCIATE EDITOR Tim Krohn CONTRIBUTING Tim Krohn WRITERS Pete Steiner David Olson Kent Thiesse Marie Wood PHOTOGRAPHERS Pat Christman John Cross COVER PHOTO John Cross PAGE DESIGNER Christina Sankey ADVERTISING Ginny Bergerson MANAGER ADVERTISING sales Danny Creel ADVERTISING Barb Wass ASSISTANT ADVERTISING Sue Hammar DESIGNERS Christina Sankey CIRCULATION Denise Zernechel DIRECTOR

For editorial inquiries, call Tim Krohn at 507-344-6383. For advertising, call 344-6336, or e-mail mankatomag@mankatofreepress.com. MN Valley Business is published by The Free Press Media monthly at 418 South 2nd Street., Mankato MN 56001.

■ Local Business memos/ Company news................................7 ■ Business and Industry trends.........9 ■ Minnesota Business updates....... 10 ■ Business Commentary................. 12 ■ Agriculture Outlook...................... 32 ■ Agribusiness trends..................... 33 ■ Job trends..................................... 34 ■ Construction, real estate trends.. 35 ■ Retail trends................................. 36 ■ Greater Mankato Growth.............. 38 ■ Greater Mankato Growth Member Activities ....................... 40

From the editor

By Joe Spear

Small business can thrive

mall business once again takes center stage in Minnesota Valley Business this month. It’s always a good bet these kinds of stories offer lessons again and again on going into business and sustaining a business. Our cover piece offers a kind of case study in small business. Owners of a greenhouse, a clothing store and an auto accessory business offer common themes for running a successful small business: be willing to change quickly, offer good, personal customer service, and do something you’re passionate about. Derran Dugger probably stands as one of the youngest area entrepreneurs when he started Rockin Ronny’s auto accessories business 20 years ago. He was just 19, but full of enthusiasm for his products. He notes that when he was a teenager, people could always hear him coming. “I’d drive up and they’d hear my hair metal music blasting and someone said: ‘Here comes Rockin Ronny.’ The name stuck,” says Dugger. Dugger was willing to change his product lineup often to add new products but also to change the amount of each product and service he offered. He started out selling high performance auto parts, but found a big demand for car audio equipment and service. That eventually evolved into audio service for boats and he now has his crew do installations dockside. The service seemed to bloom for other products like remote auto starters for Minnesotans who desired to stay inside in winter until their car is warmed up. At last count, he and his 8 employees have installed some 15,000 remote starters over the years. Like Dugger, Fred Struck had a passion for his business from a young age. His mother tells him he began digging in gardens when he was 2 or 3 years old. Decades later, he finds passion in

6 • september 2013 • MN Valley Business

operating Traverse des Sioux Garden Center in St. Peter with his wife, Joy, and son, Karl. The greenhouse business has experienced tremendous change in the 33 years he has been in business. Technology and plant science changes were huge. Tastes in garden needs changed. But Struck goes back to the core ideas that kept him in business even as big box stores and grocery stores got into the greenhouse business. He focuses on personal customer service, quality in his products and lending that extra element of horticultural experience and expertise. Plants have become a high-tech breeding business with many varieties carrying special breeding licenses one has to purchase in order to reproduce the plants. The “Proven winner” brand is positioned as quality product whose genetics might provide that boost when Mother Nature doesn’t cooperate. Customers now like that security of a plant patent. Struck notes people knowledge base about growing things may have faded a bit as families moved away from gardening as something they grew up with. Scott Dobie bought St. Peter’s Nutter Clothing in 1985 and admits he didn’t really have a magic formula for success. He simply focused on customer service, carrying things that were hard to find like big and tall men’s clothing and of course, servicing the local high school teams with letter jackets and other apparel. It’s a formula that has staying power in an industry getting more and more competitive. Small business appears alive in well in the Minnesota River Valley. The formulas are not rocket science. The lessons are simple. Personal customer service. Quality products and enthusiasm. MV Joe Spear is executive editor of Minnesota Valley Business. Contact him at 344-6382 or jspear@mankatofreepress.com

Local Business People/Company News

■

Depuydt joins Century 21 Landmark Century 21 Landmark Realtors has added Kathy Depuydt to their team. She has a degree in sales & marketing management and a B.A. in organizational management and communications.

Kathy Depuydt

■■■

Komaridis joins AmericInn AmericInn Hotel & Conference Center has hired Kylie Komaridis as sales coordinator. She brings with her over 10 years of sales and leadership experience.

■■■ AgStar earnings up AgStar reported earnings for mid-year ending June 30. The company reported net after-tax earnings of $49.4 million, a $933,000 increase over last year’s first half performance. “Increased earnings are the result of growth in loan volume in our home mortgage, rural capital network, and correspondent banking sectors,” stated Paul DeBryn, president and CEO of AgStar Financial Services. “Additionally, we continue to make improvements in credit quality which has contributed to our strong results this year.” AgStar’s mid-year performance is nearly 15 percent over the projected level. ■■■

■■■ Koerselman to lead Eide Bailly Mankato office Linda Koerselman, CPA and partner, has been appointed by Eide Bailly’s board of directors to serve as the partner-in-charge of its Mankato office. She succeeds Joe Willaert, who plans to retire from the firm within the next few years. With 32 years public accounting Linda Koerselman experience, Koerselman specializes in financial institution taxation and consulting, closely held business and individual taxation, and small business consulting. She consults with banks regarding strategic planning issues, such as mergers and acquisitions, estate tax, holding company formations, stock redemptions and minority stockholder tender offers. Koerselman has received numerous professional recognitions throughout her career, including designation as a “Super CPA” by the Twin Cities Business Monthly and Law and Politics publications. She was also named a “Top Woman in Finance” by Finance and Commerce Magazine. ■■■ Sedey joins I&S Group I&S Group added Aaron Sedey as a community resources planner based out of the Mankato office. Sedey is a graduate of Minnesota State University with a Master of Arts degree in urban planning with a local government management certificate. He spent the past five years as a planner with the Northwest Iowa Planning and Development Commission Aaron Sedey where he served 79 cities and nine counties in Northwest Iowa.

Haff, Golberg join Carlstrom Co. Robert W. Carlstrom Co. has hired Keith Haff and Torey Golberg as project managers. ■■■ Johnson joins AmericInn The AmericInn Hotel & Conference Center has hired Jennifer Johnson as front desk manager. Prior to joining the AmericInn, Johnson had eight years of experience in higher education student services. ■■■ HickoryTech revenues up 7 percent HickoryTech reported total revenue of $47.1 million for the second quarter ending June 30, an increase of 7 percent year over year. Adjusted EBITDA totaled $12.3 million in the second quarter, a 9 percent increase. Net Income totaled $2.3 million, up 34 percent from a year ago. “HickoryTech’s strong momentum continues as we have increased strategic fiber and data revenue 17 percent year to date,” said John Finke, HickoryTech’s president and chief executive officer. ■■■ Abdo celebrates 50th anniversary Abdo, Eick & Meyers accounting firm celebrated the firm’s 50th Anniversary on July 24 with a party for clients, employees and friends of the firm at the Centennial Student Union ballroom on the campus at Minnesota State University, Mankato. The highlight of the evening was program that included comments from the firm’s founder, Joe Abdo, his son Jay, Abdo, Eick & Meyers’ Senior Partner, and the firm’s Managing Partner, Steve McDonald

MN Valley Business • september 2013 • 7

I&S earns industry awards I&S Group has been honored with two significant industry awards. I&S was recognized as one of 54 architectural and engineering firms in the United States in PSMJ Resources “Circle of Excellence.” The award recognizes the top 20 percent of participants in the PSMJ’s annual survey and is based on profitability, overhead, cash flow, productivity, business development, staff growth, and turnover. I&S was also ranked 24th on the Zweig Letter Hot List, and was the highest ranking design firm in Minnesota, Iowa, or Wisconsin. Management consulting and research firm Zweig White Information Services annually identifies the 100 fastest-growing U.S. or Canadian architecture, engineering, and environmental consulting firms for its annual ranking. ■■■ GMG honored for job retention Greater Mankato Growth was recognized for its commitment to retaining jobs as a partner of Grow Minnesota!, the Minnesota Chamber of Commerce’s privatesector economic development program. Greater Mankato Growth is one of 60 local partners in the statewide network. “Grow Minnesota! celebrates 10 years of thanking businesses for investing in their communities and our state,” said Bill Blazar, Minnesota Chamber senior vice president of public affairs and business development. “Key to our visits, we learn what it will take to keep a company in Minnesota, and when necessary, linking the owners and managers to the appropriate private- and/or public-sector resources to help solve its problems.” In the past 10 years, GMG has made nearly 500 visits. Often joining GMG on these visits are local officials from communities that are members of the Regional Economic Development Alliance. ■■■

Bluth samed Super Lawyer Joseph Bluth has been named by Minnesota Super Lawyers magazine as one of the top attorneys in Minnesota for 2013 in family law. Only 5 percent of the lawyers in the state are named by Super Lawyers. Bluth has been on the list since 2003. He is also a family law mediator. Super Lawyers can be found online at superlawyers.com. Joseph Bluth ■■■ Johnson in radio Hall of Fame After 54 years in radio, Robert “Bob” Johnson is being inducted into the Minnesota Broadcasters Hall of Fame. He will be inducted along with WCCO sports journalist Mark Rosen and long-time Twins play-by-play man Dick Bremer at a ceremony in Minneapolis Sept. 29. Johnson purchased KRBI AM in St. Peter in 1960. In his 46 years with KRBI he added an FM and River 105. Over his career he owned five other stations. In 2003, KRBI and River 105 were sold to Three Eagles. ■■■ Gangi joins Farrish Johnson Farrish Johnson Law Office added attorney Joseph A. Gangi. Before joining Farrish Johnson, Gangi worked as a law clerk for Chief Judge Matthew Johnson and Judge Terri Stoneburner at the Minnesota Court of Appeals. He previously worked as a staff attorney at a Federal Court of Appeals. He focuses his practice in the areas of civil litigation, business litigation and appeals. Prior to Joseph Gangi beginning his legal career, Gangi served in the U.S. Army as a signals intelligence analyst and was awarded the Joint Service Commendation Medal. ■■■

To submit your company or employee news. e-mail to tkrohn@mankatofreepress.com Put “Business memo” in the subject line. Call or e-mail Associate Editor Tim Krohn at tkrohn@mankatofreepress.com or 344-6383 for questions.

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■

Business and Industry Trends

Agriculture

Energy

Corn prices have seen a steady slide the past three months as reports of bumper crops continue. A bushel of corn was selling for $5.62 in August, down from around $7 in May and June. The price last year at this time was nearly $8 per bushel. Meanwhile, soybeans are enjoying the highest price of the year at $15.25 per bushel, up from $13.45 a year ago.

Although easing in recent weeks, crude oil prices increased during the first three weeks of July 2013 as world oil markets tightened in the face of seasonal increases in world consumption, unexpected supply disruptions, and heightened uncertainty over the security of supply with the renewed unrest in Egypt. The U.S. Energy Information Administration (EIA) expects that the Brent crude oil spot price, which averaged $108 per barrel over the first half of 2013, will average $104 per barrel over the second half of 2013, and $100 per barrel in 2014.

Corn slides, soybeans up

Hog price strong

After dipping early in the year, hog prices have stayed stronger through the summer. A 185-pound carcass was selling for $99.75, nearly $10 higher than a year ago.

■■■

Employment

Unemployment benefits fall

The number of Americans seeking unemployment benefits dropped 15,000 in mid-August, a seasonally adjusted 320,000, the fewest since October 2007. The drop is seen as a sign of dwindling layoffs and steady if modest job growth. Applications, which reflect layoffs, have fallen 14 percent this year. That’s a sign that companies are cutting fewer workers. But hiring is still sluggish, resulting in only modest net job gains. Employers have added an average of 192,000 jobs a month this year. The unemployment rate has declined to 7.4 percent, a 4-year low. That’s still well above the 5 percent to 6 percent range associated with a normal economy.

Unemployment rate projections

The federal government expects the unemployment rate is expected to averages 7.6 percent over 2013, and gradually falls to 7.1 percent at the end of 2014. This is accompanied by nonfarm employment growth averaging 1.6 percent in 2013 and 1.5 percent in 2014.

■■■

Crude oil costs rise

U.S. oil production up

U.S. crude oil production increased to an average of 7.5million barrels per day (bbl/d) in July 2013, the highest monthly level of production since 1991. EIA forecasts U.S. total crude oil production will average 7.4 million bbl/d in 2013 and 8.2million bbl/d in 2014.

Natural gas inventories up

Natural gas working inventories ended July 2013 at an estimated 2.88 trillion cubic feet (Tcf), about 0.37 Tcf below the level at the same time a year ago and 0.04 Tcf below the five year average (200812). EIA expects the Henry Hub natural gas spot price, which averaged $2.75 per million British thermal units (MMBtu) in 2012, will average $3.71 per MMBtu in 2013 and $3.95 in 2014.

Renewables demand up

Renewable energy consumption for electricity and heat generation should increase by 3.4 percent in 2013. While hydropower declines by 4.2 percent, nonhydropower renewables used for electricity and heat generation grow by an average of 8.1 percent in 2013. In 2014, the growth in renewables consumption for electric power and heat generation is projected to continue at a rate of 4.2percent, as a 3.1-percent increase in hydropower is combined with a 4.9-percent increase in nonhydropower renewables. EIA estimates that wind capacity will increase by 5 percent this year to about 62 gigawatts, and reach over 72 gigawatts in 2014. However, electricity generation from wind is projected to increase by 19 percent in 2013, as capacity that came on line at the end of 2012 is available for the entire year in 2013. Wind-powered generation is projected to grow by 7 percent in 2014. EIA expects continued robust growth in the generation of solar energy, although the amount of utility-scale generation remains a small share of total U.S. generation, about 0.2 percent in 2013. Utility-scale capacity, which until recently experienced little growth compared with customer sited distributed generation capacity, is projected to more than double between 2012 and 2014.

MN Valley Business • september 2013 • 9

Minnesota Business Updates

■

■ HickoryTech revenue up 7 percent

■ Wells Financial down 14 percent

Mankato -based HickoryTech reported total revenue of $47.1 million for the second quarter ending June 30, an increase of 7 percent year over year. Adjusted EBITDA totaled $12.3 million, a 9 percent increase over last year. Net Income totaled $2.3 million, up 34 percent from a year ago. “HickoryTech’s strong momentum continues as we have increased strategic fiber and data revenue 17 percent year to date,” President and CEO John Finke said in a statement. “Our disciplined approach to expanding our fiber access networks is well underway as we make targeted investments to drive future growth.

Wells Financial Corp., the holding company of Wells Federal Bank, announced earnings for the second quarter of 2013 of $386,000, down $64,000 or 14 percent when compared to the second quarter of 2012. When comparing the second quarter of 2013 with the second quarter of 2012, the decrease in net income was due, primarily, to decreases of $166,000, or 8.1 percent, in net interest income and $170,000, or 13.8 percent, in noninterest income. When comparing the six months ended June, 2013 to the same period in 2012, net income decreased by $311,000, or 33.6 percent.

■ ADM closing in on Australian purchase

Xcel Energy announced its intention to take over the proposed 150 megawatt wind park located in the north-central region of North Dakota. The company is currently seeking approval from the state regulators for the Border Winds project. Xcel Energy has not disclosed any estimated costs for the project. The wind program was previously planned by Sequoia Energy in 2005 and was expected to be concluded by 2012. However, Sequoia Energy failed to start any construction work during the period. Xcel Energy will team up with RES America Development Inc., a business wing of Renewable Energy Systems Americas, for the development of the project. RES Americas will supervise the construction phase and will return the ownership to Xcel Energy once it is completed. The wind park located in Roulette County includes 66 turbines spread over 50 square miles of land and shares its border with Manitoba. Construction is expected to start next year with a projected conclusion slated for 2016. In June, Xcel Energy joined forces with RES Americas to develop a 200 MW wind facility close to Austin, Minn. It also applied for approval for two other projects to the Minnesota Public Utilities Commission and the North Dakota Public Service Commission.

Archer Daniels Midland announced that it had received the nod from South Korea for the proposed acquisition of Australia’s leading agribusiness company, GrainCorp Limited. With this, the company now has clearance from seven government agencies for the

acquisition. After gaining The United States Federal Trade Commission’s approval last year, ADM had sealed the deal in late Apr 2013. Since then, the company has been seeking fair trade clearance from the government agencies of different countries. At present, ADM has the acquisition sanction from regulatory agencies in the U.S., Australia, South Africa, Canada, Japan and South Korea, along with the European Commission. The company is in negotiation with the government agencies of China and some other regulators in Australia for the final clearance. ADM is focusing on expanding its agricultural services and oilseeds businesses across the globe.

■ Best Buy hints at staying in China Best Buy CEO Hubert Joly suggested that the company will stay put in China despite speculation on Wall Street that it will eventually sell off its operations in the world’s most populous country. In an internal memo, Joly said the company remained committed to its foreign businesses, which includes China, Mexico and Canada, the Star Tribune reported. The company has focused on stabilizing its core U.S. retail business, which generates most of its $50 billion in annual revenue. Last April, Best Buy agreed to sell its 50 percent stake in Best Buy Europe to a joint venture partner. Still, China holds opportunity as the world’s largest smartphone market.

10 • september 2013 • MN Valley Business

■ Xcel to take over wind park

■ Buffet buys more U.S. Bank, sells Kraft stock Warren Buffett took a much bigger piece of U.S. Bankcorp in the second quarter. His Berkshire Hathaway increased its holdings of the Minneapolis-based financial institution by more than 27 percent. The buys increased his holdings to nearly 78.3 million shares, according to the Minneapolis-St. Paul Business Journal. Berkshire also bought more of Wells Fargo & Co., adding 1 percent, or 5 million shares. His 463 million shares of the San Francisco-based bank makes it Buffett’s favorite stock. Berkshire Hathaway cut its stakes in food companies Kraft Foods and Mondelez International, and divested entirely of Gannett Co., the owner of KARE 11 and the St. Cloud Times.

■ Edina Realty owner expands The Twin Cities-based owner of Edina Realty has acquired an east coast real estate company that is the fifth largest standalone brokerage in the U.S. The Star Tribune reports it represents the biggest deal yet for HomeServices of America, a Berkshire Hathaway affiliate which has been in an acquisition mode. HomeServices is the nation’s second-largest, full-service residential real estate brokerage firm and one of the nation’s largest brokerage-owned settlement services providers. Terms of the sale were not disclosed.

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MN Valley Business • september 2013 • 11

■

Business Commentary

By David Olson

Business-to-Business taxes need to be repealed

innesotans, prepare to dig deeper into your pocketbooks following actions of the 2013 Legislature. Companies are being asked to pay a very high premium for the privilege of doing business in Minnesota. Many changes in tax law took effect July 1, and many are retroactive to Jan. 1. These new taxes include individual income tax, corporate taxes, sales taxes, estate and gift taxes, and cigarette taxes. The pyramid effect of these higher, and often hidden, costs is certain to be felt across the state and negatively impact Minnesota economy and business competitiveness. The Minnesota Chamber of Commerce seeks to lower all of these costs. We support the call for a special session for immediate repeal of the business-tobusiness taxes:

“These high and punitive taxes are making it harder and harder for our Minnesota businesses to ignore the welcoming invitations from other states. Let’s do the right thing and repeal these B2B taxes before we lose important businesses and jobs.”

• Labor service charges for repair and maintenance of business equipment and machines, including farm equipment, effective July 1. •Purchases of telecommunications equipment by telecommunications providers, effective July 1. • Storage and warehousing services of business-related goods, effective April 1. Minnesota businesses will pay the 6.875 percent state sales tax, plus any local sales tax, on these services if you hire the work out. The cost especially hits small and midsize businesses that don’t have the in-house expertise. The impact will take a toll. Affected companies will be placed at an extreme disadvantage with their peers in other states and nations. Consumers

will pay the price through higher costs for goods and services; employees will feel the impact through lower wages and lost jobs. These “B2B taxes” are not only misguided fiscal policy, they are at cross-purposes with legislative goals to promote economic growth. Consider these actions taken by the 2013 Legislature: • A Job Creation Fund of $24 million was created to encourage industries — including storage and warehouse services and the businesses that use them — to locate in Minnesota. The B2B tax puts this industry at an extreme disadvantage, and without a healthy warehousing industry, Minnesota is less attractive for the businesses that require this service. • Purchases of capital equipment will now be exempt from the sales tax rather than forcing companies

12 • september 2013 • MN Valley Business

to apply for tax refunds. That’s good. But now labor costs for repairing and maintaining the equipment are subject to sales tax. • The governor’s Broadband Task Force recommended keeping the exemption, and the Legislature allocated, $500,000 to create a broadband development office to encourage investment of high-tech equipment and capacity in Minnesota. Yet the B2B tax was extended to telecommunications equipment, making it more expensive for providers to expand the state’s telecommunications infrastructure.

The fact is we did not even need the new tax to solve the budget. The Legislature faced a $627 million short-term problem and solved it by raising $2.3 billion in taxes. There is plenty of opportunity for the governor and lawmakers to correct their misguided actions by focusing on spending reductions. Owners and managers are tired of hearing our leaders promote a “projobs” agenda, then pass “antibusiness” legislation. In contrast, neighboring states are knocking on our doors, saying, “We are open for business” and backing it up with their policy decisions. These high and punitive taxes are making it harder and harder for our Minnesota businesses to ignore the welcoming invitations from other states. Let’s do the right thing and repeal these B2B taxes before we lose important businesses and jobs.

David Olson is president of the Minnesota Chamber of Commerce.

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MN Valley Business • september 2013 • 13

Scott Dobie has been in retail since college and has owned Nutter Clothing since 1985.

Independently Thriving Small businesses share keys to big success By Tim Krohn | Photos by John Cross 14 â&#x20AC;˘ september 2013 â&#x20AC;˘ MN Valley Business

Derran Dugger is celebrating 20 years operating Rockin Ronny’s in Mankato

wning a business is a dream for many, but the failure rate is daunting. Depending on the statistics you use, 50 to 70 percent of all new businesses fail within the first 18 months. Still, many take the plunge and succeed. And some thrive and prosper for decades. On the north end of St. Peter, Fred Struck and his family have been growing business and plants for 33 years at Traverse des Sioux Garden Center. Downtown, Scott Dobie is going nearly as long at Nutter Clothing, which has been in business since the 1920s. And on Mankato’s hilltop, Derran Dugger is just concluding his second decade in a successful vehicle accessory business. They all say there’s no magic formula for business success, but they all know the basic ingredients needed: Customer service, product knowledge, quality and a commitment to stand behind your services.

When Dugger was 19 and opened a hot rod accessories shop on Madison Avenue in Mankato he knew the name of the business had to be Rockin Ronny’s. Twenty years later the store continues to thrive, although the focus on the goods and services offered have evolved to meet new opportunities. “I’ve been around cars and hotrods and custom vehicles since I was 3. Dad was into it and friends and family. “I saw there was a lack of that in town - a one-stop shop for the stuff you’d see on people’s vehicles,” Dugger said. He started selling high-performance, “go-fast” parts for cars, but soon saw a strong market for car audio equipment and installation. It now accounts for about 50 percent of the business for him and his eight employees. While factory-installed audio systems have improved, Dugger said good after-market systems are still superior. “We can add so much more. And you don’t have to change the radio in your dash either, we can integrate right into it and give you iPod control right into your radio.” Dugger’s also been installing audio systems in things he hadn’t expected to. “We’re doing a lot of boats. We’ve been putting some crazy audio systems in boats - big pontoons and pleasure boats. We’ll even come to the dock and install them.” Dugger said he always looks for the next place for

Cover Story

Rockin for 20 years When Derran Dugger was a teen, his parents’ friends always heard him coming. “I’d drive up and they’d hear my hair metal music blasting and someone said, ‘her comes Rockin Ronny.’ The name stuck.”

MN Valley Business • september 2013 • 15

Joy and Fred Struck started Traverse des Sioux Garden Center 33 years ago. demand by customers. everyone who walks through the door. But you learn quick “In the early 2000s the truck accessory market really that some people will do anything to get what they want, grew and we started dabbling in that and now that’s a lot from shoplifting to bad checks.” of what we do.” His main competitor in Mankato – on the audio side of Another mainstay of Dugger’s business has been selling the business – is Sweet Sounds, with the Internet being and installing remote vehicle starters, the other. a sought-after service when “The Internet is the big competitor Minnesota’s winters set in. of ours, but they can’t deliver “We started in 1995 and it’s customer service and the product “The big gardens are become our specialty. We sell the you can touch and see here. Anyone Viper brand with a lifetime warranty can get a box in the mail, but if you coming back because people on parts and labor. That’s most of don’t know how to set it up and use what we do from the end of October it, it’s a problem. We treat each car want fresh tomatoes and to mid-March. We’ve probably done that comes in like it’s our own. peppers and stuff. And 15,000 remote starts.” “The thing is to believe in what The latest focus of Rockin Ronny’s you sell, stand behind what you sell, there’s a lot of interest in is on restoring custom vehicles. give the customer a good warranty “We don’t just sell parts but we’ll and give them reason to come back fruit trees, apples, plums and completely restore and redo your and do business again,” said Dugger vehicle. We take a car and completely of his keys to business success. pears that people want in redo it from the ground up. We’re doing a lot of muscle cars.” Blooming strong for 33 years their yards.” Dugger said the recession hit Fred Struck’s mom told him he business, but said the business has began digging in the garden when he grown every year since he started. was 2 or 3. They just did a major remodel of the Today he still has dirt under his store to mark the 20th anniversary. fingernails, operating Traverse des “Hitting 20 years is a big milestone for us.” Sioux Garden Center in St. Peter along with his wife, Joy, Dugger said he didn’t make any major business mistakes and son, Karl. he deeply regrets, but he did learn one thing fast. During 33 years in business, he’s seen technology “The fraud issue. At first when you start you trust change, plant science improve, and tastes evolve. But the

16 • september 2013 • MN Valley Business

Colorful hanging baskets have become a big part of business at Traverse des Sioux. core business principles that have grown success haven’t changed: personal service, quality products and the sharing of his horticultural expertise that helps customers be successful with their plants. Struck got a horticulture degree from the University of Minnesota in 1968, but greenhouse dreams were put on hold when he was drafted into the Army and sent to Vietnam. After his service, he worked in the Twin Cities as an assistant greenhouse manager for Green Giant, which at the time was diversifying its vegetable processing business by opening restaurants and garden centers. In the early ’70s the local natives - Fred from St. Peter, Joy from Norseland – returned to southern Minnesota and bought a greenhouse in Le Sueur. In 1980 they opened Traverse des Sioux on the north end of St. Peter. Through it all they’ve thrived amidst an onslaught of new competition from big-box retailers, economic ups and downs and changes in the industry. “In 42 years there’s been at least two recessions. And we’ve seen a lot of technology changes, like any business. When we started our suppliers wrote out their receipts on carbon paper, then carbonless, then on computers,” Struck said. Expectations of customers has also shifted. “People want instant gratification. People used to buy seeds to bloom in July or August, now they want them to bloom in May – they want instant color.” That’s led the Strucks to plant more seeds earlier in the greenhouses on their nearby farm to produce hanging baskets that offer spring color.

And they tapped into the market for decorative baskets used to adorn weddings and parties all through the summer and fall. “People will come in and ask what we’re going to do with all these baskets. But a lot of them are already sold for later in the year, for weddings or parties.” While they start from seed about 85 percent of the plants they sell, trees, shrubs and other perennials come from major nursery suppliers in Minnesota, California and elsewhere. Many of those plants carry the “Prove Winner” label, a name that’s become ubiquitous at greenhouses around the state and country in recent years. “Proven Winner is a branding effort. The crops are protected by patents where we can’t take a cutting off of it and do our own plants unless we have a license. We pay a royalty as part of the cost to get baby plants and then grow them on,” Struck said. The advantage is getting plants that have been thoroughly tested in various growing conditions before being put on the market. While Struck saw a decline in people growing big vegetable gardens in favor of container gardens, the trend has reversed some in recent years. “The big gardens are coming back because people want fresh tomatoes and peppers and stuff. And there’s a lot of interest in fruit trees, apples, plums and pears that people want in their yards.” While big-box chain stores beefed up their garden centers, Struck said sticking with quality plants and high customer service has served them well.

MN Valley Business • september 2013 • 17

Photo circa 1905-1910 of buildings that still stand in St. Peter. The present-day location of Nutter Clothing is the third and fourth doorways from left. “When the big boxes came in, the pie didn’t get bigger, the slices got smaller. Like anyone who’s independent, whether you’re selling plants or clothing, you have to give all the customer service they can’t - calling them by name, knowing our products and giving advice. “We’re in the business of educating people, too. There’s non-farm kids and a whole generation of people who didn’t garden a lot. Now there are people in their ’20s who want to do it but they didn’t see their parent’s garden. “A lot of those big-box places just don’t have the expertise. People come in all the time and they’ve gotten misinformation from them,” Struck said. Above all, he said, quality shows through. “Some of the cheaper stuff is low quality. If you got a 100 feet of (garden) edging for $4.99, it isn’t going to last.

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I wouldn’t waste my time putting it in.” Nutter’s a St. Peter mainstay When Scott Dobie bought Nutter Clothing in downtown St. Peter in 1985 he admits he wasn’t confident he had a winning plan for success. “I hoped to survive a year, then five, then 10. I had my ideas, but I didn’t know if they’d work. I’m still not sure, but we show up at 8 and work ’til 5:30 and it seems to work out.” Dobie has spent his life in retail, working for Burch’s shoes in St. Peter during college and then working for shoe stores in Fairmont, before coming to work at Nutter’s in 1978.

Nutter Clothing focuses on men’s wear, weddings, and high school sports and prom clothing. The store dates back to 1922 when it was run by the Haesecke brothers. Jim Nutter owned it from 1922 to 1965 and Harry Kramer and Greg Mead ran it until Dobie purchased it. With three full-time and four part-time employees, Dobie sells mostly men’s clothing, with a small women’s boutique. Stocking some unique items and catering to customers has kept the business strong, he said. “I’ve often said you can buy a shirt anywhere, but you can’t always get the service.” The store does well with St. Peter sports clothing – Saints wear – including letterman jackets, caps, shirts and jackets. The young Dobie waits on Todd Benson of Washington, D.C., whose parents reside in St. Peter. clientele often become long-time customers of the store. Nutter’s has also long focused on Well, they wear them, but they’re baseball caps big and tall sizes, something men often have trouble Above all, Dobie makes it easy for men to do their finding. clothes shopping Serving wedding parties, with tuxedoes and, now, often “Guys don’t like to shop. They’ll get in the car with their suits, has also been a mainstay at Nutter’s. buddies and go to Scheels or Cabela’s but they don’t get in “I had a wedding party in and a guy said ‘I haven’t been a car with their buddies and go clothes shopping,” Dobie in here for 15 years.’ He said ‘you did my wedding and said. now I’m doing my daughter’s wedding.’ He looked around “People can pull up to the back door of the store and in and saw a lot of talls (clothing) and he bought a bunch of 40 minutes they can get what they want and be gone. It’s it.” not an all-day affair.” MV While formal wear still exists for weddings, there’s less in stock overall. “It’s more casual now. We still sell suits and things, but not as much. Men used to wear hats and now they don’t.

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Mike Sheid is plant manager of the Jack Link’s production facility in Mankato

Jack Link’s grows in Mankato Workforce, production tripled since 2010 By Marie Wood | Photos by John Cross

he next time you pick up an Original Jack Pack with a beef stick, Wisconsin cheese and pretzel rods, your snack may have been made in Mankato. In 2010, Jack Link’s began production here after purchasing the First Avenue facility from JBS, which made packaged meats under the Pioneer Snack brand. Mike Sheid, plant manager, has led the Mankato plant since March 2012. Originally from Oklahoma, this “Southern gent” has 26 years of experience in the manufacturing industry, with the majority in meat production. For Sheid, the manufacturing cycle is rewarding. He enjoys working with the people who make the product – starting from scratch to the end result of consumer satisfaction. “I love my job. I’m passionate about my job. I work as long as it takes to get the job done. I have a tremendous team in Mankato,” said Sheid. “When I’m not here I know it’s in good hands. I’m just a phone call away.”

Headquartered in Minong, Wisc., Jack Link still operates the company in his hometown. He has grown Jack Link’s Beef Jerky into the leading meat snack brand and the fastest growing meat snack producer worldwide. The company has production facilities in Wisconsin, South Dakota, Nebraska and Minnesota. To serve its international market of more than 40 countries, the company operates plants in New Zealand and Brazil. “Jack Link’s decided Mankato was a great place for a production facility because of the existing meat snack business that was housed here. The workforce at the facility was already trained in making meat snacks which was a very positive deciding factor,” said Terry Smith, executive vice president of operations for Jack Link’s Beef Jerky.

Profile

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In 2010, the Mankato plant employed 85 people. Since then, the Mankato plant has tripled the workforce and

The Mankato plant was purchased by Jack Link’s in 2010 from another snack-food maker. Since then, production and the workforce have tripled. production, noted Sheid. “This facility was required to increase production to meet consumer demand for Jack Link’s,” said Sheid. “There are a lot of hungry Jack Link’s customers. We’re here to make sure they’re satisfied.” “Today’s consumers are seeking snacks that taste great, are better for you, high in protein, low in fat, carbs and calories. Jack Link’s is the perfect grab-n-go snack,” Sheid added.

begins until the product reaches the customer. In the Mankato facility, taste tests are done every single day of every shift to ensure the standard of taste, texture and quality. “One of my favorites is the Jack Link’s Smokehouse beef stick. I love everything from the flavor to the texture,” said Sheid.

Company culture

Making meat sticks

Sheid, along with many local employees, have met Jack Link. When he visits the Mankato facility, he puts on a At the Mankato plant, Jack Link’s produces a variety of white frock and checks in with the employees on the floor meat sticks, including the Smokehouse line, which are to see how they’re doing. presented in store racks in containers and trays. “I have never met an owner as passionate about a The Mankato plant runs 24/7 with three shifts a day: business as Jack Link. He’s down to earth,” said Sheid. two production shifts and one sanitation shift. The first “He is so passionate about employees and the quality of ingredient is a clean facility. In fact, when Sheid gets to the product.” work in the morning, the first thing he does is tour the Every summer, Jack Link’s holds an employee facility inspecting for cleanliness and safety. appreciation week with daily activities and gifts. The week “We take great pride in safety and cleanliness of the ends with a cookout, in which Jack Link comes and talks facility,” said Sheid. “The foundation of my day, every day to all the employees. When asked if the food at the cookout is safety, cleanliness, quality, period.” is good, Sheid answers, “You bet it is!” The second ingredient is USDA certified meat which is “This is about our people. We make sure they are blended with Jack Link’s unique spice mixes. Next the appreciated in every way,” said Sheid. “We work hard. We meat is smoked in the plant’s smokehouse. play hard. We’re a high energy bunch.” “When I do my tour, one of my favorite places to be is Jack Link’s has become a well-known employer in the smokehouse when you Mankato and takes pride in smell the quality of the being a good corporate product,” said Sheid. citizen. The company makes After packaging, the donations to the Mankato finished product is shipped School District, the main to the distribution center in educator of the local Plant manager, Jack Link’s Beef Jerky Iowa, where it is stored and workforce of tomorrow. distributed to grocery and “We believe in a better 26 years experience in manufacturing convenience stores and other education for our youth retail outlets. today,” said Sheid. MV Graduated from University of Oklahoma Taste tests are conducted from the moment the process

Mike Sheid

MN Valley Business • september 2013 • 21

■

Special Focus: Team Building

Choice of team building techniques is key By Marie Wood

pending some time building a high-performing team is an investment that pays off in increased business results. “People underestimate the time and attention that teams need to be successful. You can increase the pace of results if you focus on building a new team at the beginning,” said Bonnie Bennett, principal at TurningPoint Management in Bonnie Bennett Mankato. With 25 years of expertise in human resources and law, Bennett specializes in building high-performing cultures. As a human resources leader for a Fortune 1,000 company, Bennett devised practices that found the balance between company goals and employee needs. “Teams need maintenance just like your car does,” said Bennett.

She advises clients to clearly identify the objective and the needs of the team. You may be starting with a new team, reinvigorating a team, or dealing with a team in conflict. “When addressing the needs of your team, choosing the right activity is very important, because it depends on the objective. Choice of activities will also depend on the people on the team and their learning styles,” explained Bennett. “Some people are more task oriented, others more people oriented.” Some people learn best by doing while others learn best from discussing issues with others, so Bennett advises a mix of tasks and discussion. Team building also can be coupled with industry trainings and seminars. For example, LEAN manufacturing principles or customer service tools can be imparted while also building teams at the same time. The content can be job related, but there can be creative ways of sharing the information, explained Bennett. MV

What works for Mankato Clinic?

ankato Clinic, one of the 15 top employers in the region, has more than 725 employees in multiple locations. “One of Mankato Clinic’s core values is teamwork. Teamwork is an area that is important to Mankato Clinic as we feel it is needed at the department level, but across the organization as well, in order to best serve our patients and the community,” said Sara Will, human resources administrator. Mankato Clinic approaches team building from many angles:

• Community involvement - United Way Day of Action, Backpack Food Program, local walks for M.S., March of Dimes, Making Strides Against Breast Cancer and others • Social events - buses to Twins games, Moondogs games, holiday party, picnic

• Customer service trainings - continuously learning and working together on ways to provide exceptional customer service • iTeam meetings - revisit organization’s pillars of people, service, quality care measures, organizational workflows, and more • Morning huddles - quick meetings to share information and discuss the upcoming day • Cross functional teams - involving a cross section of staff is the most effective way to complete projects that improve processes and workflows that impact many departments. Every 12 months, Mankato Clinic also conducts a confidential employee engagement survey. “If teamwork is an area that shows up, we will work on that,” said Will.

Building new teams “For a new team, it’s important to choose activities where they are sharing information and learning about each other,” said Bennett. One effective activity is to partner people together to interview each other. Bennett will choose an ice breaker question: Who would you most like to meet, dead or alive, and why? or Tell me about someone you admire and respect and why?

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Then the partners introduce each other to the larger group. “It’s much easier for people to talk about other folks than for us to talk about ourselves,” said Bennett. A shared experience can also bring a new team together, create bonds and give them a common experience to talk about. Bennett once coordinated a geo-caching event for a client. “Shared experience builds community,” said Bennett.

Reinvigorating a team

eam building activities can remind people how important it is to work together to reach a common goal. One simple activity is to place a rope or line on the floor, divide employees into a group of four people or more, and tell them the goal is to cross the finish line at the exact same time. Often one person will step over the line too soon. Successful groups develop strategies to accomplish the goal. Some groups have held hands, put their hands on teammate’s shoulders or tied their legs together. “It takes more coordination than you think it does,” said Bennett. Another insightful activity is to split coworkers into three to four small groups. Give them a 20-50 piece puzzle to put together, but switch a few pieces between each of

the puzzles. Give them five minutes and tell them go. This activity demonstrates: • People assume it’s a competition because it’s a timed activity; • People assume they have all the pieces to the puzzle; • People have tunnel vision. During the activity, people realize that others teams have some of their puzzle pieces. Some teams will share pieces, others might withhold them to “win” the game. At the end of the activity, we discuss how people handled the puzzle problems. Often, people aren’t aware of their assumptions and that if they worked as a whole team they could have solved all of the puzzles.

Rebuilding teams

hen teams are in conflict, Bennett employs the model of the “Five Dysfunctions of a Team,” outlined by Patrick Lencioni in his 2002 book, which has become a definitive resource for practical information in team building. “The foundation of a high-performing team is trust,” explained Bennett. Based on the model, Bennett chooses activities that create trust, help people understand productive conflict which leads to better decisions, build confidence among team members and solidify commitment and accountability. To build trust, Bennett might try this activity. She will hand out complicated drawings with different shapes and lines and place partners back to back. One partner looks at the drawing and describes it so the other person can draw it. It can be hard and frustrating, because the partners have to rely on each other to accomplish the goal. Next, the whole group looks at the pictures and compares the pictures and discusses which partners did a better replication of the drawing, what the experience was like, and what methods worked best. Then Bennett has the partners switch roles so the drawer now gets to describe the picture. This time the drawer can ask questions. “Usually, this is a much better experience. The product is better, the partners work more effectively together, and it helps each party understand perspective,” said Bennett. This activity can show the team the importance of trust, communication, and perspective. Bennett cautions that it’s not always best to try to resolve a conflict through a team experience. Sometimes the team’s dysfunction is rooted in a conflict between two individuals. In these cases, it’s often more effective to bring in an outside resource to address the conflict.

Measuring results

High performing teams have high levels of employee engagement. The Gallup organization has long established the correlation between employee engagement and productivity, profitability, and customer ratings. Spending

This model illustrates the five dysfunctions of a team outlined by Patrick Lencioni in his book “Five Dysfunctions of a Team” published in 2002.

According to Lencioni, high-performing teams must master these behaviors. time building trust within a team can increase engagement and ultimately organizational results. Leaders don’t have to wait to study organizational results to see the benefits. When facilitating a team building session, Bennett observes simple clues – the differences in interactions between team members during breaks and the energy in the room. Supervisors can also observe these clues in the workplace: who is interacting with each other and levels of interaction. “There’s a lot of power in the observation of people,” said Bennett. The end result can be seen in increased productivity, faster problem solving and other efficiencies.

MN Valley Business • september 2013 • 23

George Denn has had a little less hay in storage recently due to the severe drought last summer.

Gold in them thar pumpkins New strategies for the man behind Hay by George By Pete Steiner Photos by Pat Christman

ou know the old saying: make hay when the sun shines. But here it is, a bright summer morning, and the most renowned hay grower in southern Minnesota is focused on – PUMPKINS! George Denn -- the man who came up with the slogan “Hay by George!” – is considering phasing out of hay! “I’m tired of hay,” he says introspectively. “I may just go into all pumpkins. With pumpkins your costs are so

much lower, and the income’s higher – $1,500 an acre last year.” Heck, that figure competes with $7 corn! And this wouldn’t be the first time Denn has dramatically altered his farming strategy.

Spotlight

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•••• You can’t blame a hay farmer for being discouraged this year. What last summer’s drought didn’t kill, the late winter ice storms

George Denn, whose Hay By George business has been around for years is moving more into pumpkin farming. likely did. Denn lost about 90 percent of his hay acres from last year. One field that did yield only brought in 1.2 tons, or $240, an acre. That’s barely above production costs. Not that last year was a financial disaster. George offers a number – “Don’t repeat this,” he asks, but we can just say, between his hay and his pumpkins, that number was into six figures, certainly enough to pay the bills and to live on. Thanks in large part to pumpkins, George confesses, “the last two years, I finally started making money.” •••• Corn. Soybeans. Hogs. That’s the standard menu for production agriculture in this part of Minnesota. But Denn, a strapping, jovial man of 51, never found that the standard menu worked for him. Sitting under a shade tree at a sturdy wooden picnic table overlooking Wita Lake, he tells how an epiphany emerged from a crisis. Looking across the field toward the lake, he says two dairy barns used to stand just east of the house he has lived in his entire life. At one point, there were 150 cows, plus some hogs. But in the fall of 1992, after a big rain, the DNR took a close look at the dairy feedlot so close to the lake, and said it needed changes. Then Denn’s farming partner, his father, suffered a stroke. Soon they would exit the dairy business. Denn remembers the day “I surrendered,” – November 11, 1994. “I called the auctioneer, then went inside and bawled my head off. A way of life was passing.” ••••

A pickup pulls up in the driveway – “probably to get a couple bales.” The bales are stacked on a flat bed truck. The sign says, “Pay here,” five-dollars per rectangular bale. Denn glances at the driver and yells, “Just help yourself!” The pickup guy loads four bales and drops a bill in an iron cash box. “It’s self-service,” George grins. The self-serve buyers may use it for bedding for their dogs, or to throw over their strawberries, mulch for the garden, feed for a few horses, even to back up a target for bow and arrow practice. “You can’t just go anywhere and buy hay!” Denn continues his story. He is a devoutly religious man who believes “the Lord always has an answer. Let’s get it straight: I’m a Christian. Everything I do, I try to glorify the Lord.” And he believes the Lord showed him the way to stay in farming after he lost the dairy operation. “I’d been milking cows and had all this hay. I looked out the window and said, ‘Lord, what do I do with all this hay?’ ” And that’s when the slogan many have seen posted on signs in the Lake Washington and Elysian areas popped into his mind: “Hay, by George!” After all, livestock need hay. With plenty of animals around, he began to specialize. •••• By southern Minnesota standards, Hay by George is a modest operation – under 400 acres. Besides hay, Denn grows some small grains – including 50 acres of oats that are pre-sold to an organic dairy farmer. And of course, there are those beloved pumpkins, up to 80 acres this year. He sells the plump orange fruit from roadside stands, and he cut a deal to supply local grocers. To be sure, one could never stay in farming without a lot of belief – belief that the rains will come, the seeds will

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Denn fashions some of his own machinery including a homemade pumpkin planter that has a pickup seat attached. emerge, the sun will shine. About seven years ago, Denn began expressing his personal beliefs by writing and self-publishing his first book. He often puts his thoughts together during the down-time that crop farmers can have in the winter months. His first book has been followed by two more, and a fourth is on the way. The books are journal-style, mixing farming vignettes with Bible verses and Denn’s meditations on what it all means. They’re available on Amazon, but mostly he gives them away, often at his pumpkin stands in the fall. In one of the vignettes, Denn refers to his “farming

He says he’s always “felt free being a farmer, with no one to answer to but the Almighty.”

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on a small scale.” Until recently, the lifelong bachelor often struggled to get by. Like many farmers, he’s reliant on a friendly, understanding banker. He’s also benefitted from the support of his extended church family. He has at times bartered for food and fuel. He has sold wood and fieldstones for a sweat lodge ritual to Native American inmates at the St. Peter Regional Treatment Center. A big blow came two and-a-half years ago, when he lost the rental rights to the land adjacent to his home. Then pumpkins came to the rescue. ••••

Most of the hay crop George will get this year will be “slough hay” – wild hay harvested from an adjacent 10-acre parcel west of his farmstead. “I sell organic hay.” Certified organic dairy and beef farmers – relatively small operations that don’t use chemicals – are still reliable clients. Often he’ll sell a crop right off the field: “My most important machine is my cell phone.” Once he sold a load of hay while he was in the airport in Tulsa. “I just told him to go out and pick it up. Most people are honest.” He has sold to three Amish farmers in Southeastern Minnesota, has a regular dairy client near St. Cloud, and has added a newer client – an organic dairy farmer near Belle Plaine – who wanted $20,000 worth of hay in square bales. Since Denn usually does the more common round bales (it’s cheaper), he had to hire out the baling.

One is a pumpkin planter he has fabricated. “Materials cost me just seven dollars!” he gloats. The contraption has ancient iron wheels and a seat pulled from an old pickup. It allows two operators to carefully space individual pumpkin seeds across many acres. Then there’s a newer piece of equipment, a small tiller with two manually adjustable roto-tillers that allow the operator to clear weeds around the pumpkin vines. At harvest, he’ll hire workers to help pick all the pumpkins by hand.

••••

Will he really get out of hay? George Denn laughs heartily. “I don’t know. There’s less and less dairy farms. And if somebody smokes you [on a $20,000 order], that really hurts … We leave [the final decision] up to the Lord.” At the end of the driveway off of County 2, several flatbed wagons stand ready for fall displays of pumpkins and squash and sheaves of wheat. Similar displays will be placed in some area church parking lots. Despite his growing passion for pumpkins, George did plant those new acres of hay for next year. After all, the hay market is still strong. Whatever the future, Denn is ecstatic just being able to make a living off the land. He says he’s always “felt free being a farmer, with no one to answer to but the Almighty.”

Certified organic dairy and beef farmers – relatively small operations that don’t use chemicals – are still reliable clients.

••••

As the early morning interview was concluding, George had plans to finish cultivating four acres of pumpkins. And there was paperwork to be done. And 90 acres of alfalfa to plant for next year. “The seed alone will cost me $9,400.” But first he wants to show off two pieces of equipment.

MN Valley Business • september 2013 • 27

(From left) Ben, Jim and Matt Hansen have kept the family owned River Bend Business Products successful for 30 years.

Copy that

River Bend grows from copiers to full service center By Marie Wood Photos by John Cross

n 1982, Jim Hansen began selling Canon copiers in Mankato. Today, Jim and sons, Ben and Matt Hansen, have grown River Bend Business Products into three locations in Mankato, Fairmont and New Ulm, with 30 employees and more than 2,500 regular customers in southern Minnesota, northern

Iowa and the south metro. In the Madison East Center in Mankato, River Bend combines a retail business center of office supplies, furniture, computer work stations, a copier showroom and instore print shop with business-to-business sales, IT services and a corporate office. Sales consultants sell office

All In The Family

28 â&#x20AC;˘ september 2013 â&#x20AC;˘ MN Valley Business

supplies direct to businesses with next-day delivery. Known for prompt customer service, River Bend keeps other businesses going. More than once, they have answered the call from pastors on Saturdays for toner to print the Sunday bulletin. When the Minnesota Vikings and Minnesota State University couldn’t find a magnetic white board on wheels that Coach Frazier needed for training camp this summer, River Bend got the call. Matt delivered the board the next day. “To try to provide that level of service, you have to be somewhat large, but still pretty small,” said Jim. “I don’t care if we’re the biggest, but we will be the best.” Staff technicians service copiers and printers with a guaranteed four-hour response time. The average response times are actually less with the Mankato area at slightly less than an hour. Since multifunction copiers are used for copying, printing, scanning and faxing, River Bend staff integrates the equipment with the existing software and network. “The IT services and document management software we’ve evolved into because of the convergence of technology,” said Jim. “When we opened, copiers just made copies!” For IT managed services, River Bend employs two IT professionals who go on-site to businesses. Recently, they helped a client within the hour to set up a laptop. River Bend has also partnered with a company in Cedar Rapids, Iowa, so there are 15 technicians ready to help people over the phone and dial in remotely to their computers. “When the system goes down, you need it up and going right now. We take care of all of that for you. Our monthly fee is a fraction of having IT on staff,” said Matt.

Good-natured teasing and laughing among the family is the norm and employees join in too. Matt and Ben started doing deliveries when they got their driver’s licenses so there are stories of running out of gas before cell phones and using the MSU vendor permit to go to class. “They did start learning the responsibility of having the company name on the truck,” said Jim. They still laugh about the “Office Future” theme based on the movie “Back to the Future.” On the showroom floor, Jim had a DeLorean, the model used as a time machine in the film. Matt even drove the DeLorean in the North Mankato Fun Days Parade. “We have fun. Is there an adjective for fun-intense. Funtense,” said Jim with a laugh. MVB: How are the duties divided? Jim: Ben is the operations man. He takes care of store and corporate operations. He’s our software specialist, manages in-store employees. Matt is in sales and marketing. Ben: I also oversee purchasing, accounting and general day-to-day operations. Matt: In business-to-business sales, I’m making calls trying to gain new businesses and keep the customers we have. I’m making customers aware that we are in IT services. Jim: I am the finance guy. I work with the CPA firm, attorney and banks. We do a lot of leasing so I control the leasing area of the business. I’m the general sales manager. I meet with every salesperson once a week. I miss sales, going to the accounts....Now I’m more in administration. MVB: Matt and Ben, did you grow up working for your Dad?

MN Valley Business • september 2013 • 29

Matt: I started when I was 2, cleaning the office. Ben: Now that tradition has transferred to our kids. We’ve done every aspect of this place, deliveries, the retail store. I set up the retail stores in both places. Matt: I did deliveries when I was 16 – warehouse manager, retail manager, sales manager. MVB: What is your approach to customer service? Jim: We get approached all the time to sell. We’ve seen the big guys and we’ve seen how they service. The first thing they do is cut customer service. Two weeks to get an IT technician to a customer? I couldn’t sleep at night if that was the service we’ve provided. Everybody likes to have good customer service performed for them. I try to put myself on the other side of the equation. The big boys can’t do that. There’s not enough personalization. MVB: What’s your business philosophy? Jim: Thirty years ago, we were doing what they now call businessto-business sales and being a consultative adviser. That’s what we’ve always been. We’re their trusted adviser. We ask a lot of questions, learn about the business and see how we can help them, and come up with a plan. We’ve always selected quality products. We don’t sell price, we sell value. You have to save money over a period of time. James Mackey works on a printing job for a customer.

30 • september 2013 • MN Valley Business

MVB: Matt and Ben, what have you learned from your Dad? Matt: I’ve learned where I get my personality traits and mannerisms from. Being a family business, I call on a lot of businesses and accounts that my Dad opened. They ask “Are you Jim’s son?” Being a sales manager, he tells me how things happen, what I should be doing, it’s everevolving. Ben: Work ethic and customer service. Growing up with him starting a business, we’d be here cleaning, He’d be in the office. So we saw the amount of work it took to get the business where it’s at. He would bend over backwards to treat customers well and that relates to how he treats friends and family. MVB: How do you compete with the big box stores and online retailers? Jim: The people’s perception is we can’t be competitive. That couldn’t be farther from the truth. We’ve been very competitive. My mother-in-law purchased for her office and ordered supplies from some mail-order business. She said “You guys are cheaper on most everything.” We’re a better value from top to bottom. MVB: What’s the benefit to purchasing locally? Jim: Most business prefer to buy local if you’re competitive and if they have the local authority to purchase. Matt: Nearly three times more money gets circulated locally when you buy local.

MVB: What type of jobs does your print shop handle? Ben: We pride ourselves on retooling to adapt and do anything to come up with a solution for our customer. We have all the technology here. We will find a way to get it done. MVB: What have you learned from your sons? Jim: They make me stay young, keep me up on technology and where we should be moving. They’re letting me see the light at the end of the tunnel, that I don’t have to be here every day. That’s most fun to see them grow, mature and getting better at what they do. MVB: What is your greatest accomplishment? Jim: Longevity. We’ve survived for 30 years. Most small businesses don’t survive into the next generation. Being naïve gets you through and hard work overcomes that. MVB: How do you support the community? Jim: We like kids. We love the United Way. That’s our Number 1 project. That’s our favorite because it represents the local and regional community best. Matt: It’s the best way to reach the most amount of people in our community. We increase our giving every year. In 2011, we were the United Way Small Business of the Year. Jim: It’s in the culture of our business. We have good people, longtime employees who buy into the philosophy of helping people. We’re pretty proud of that. MV

■

Agricultural Outlook

By Kent Thiesse

Farmfest is the Town Hall for ag ideas, issues

nother Farmfest has come and gone, and after it’s over it is kind of interesting to look back and see what nuggets are the take-home messages from the various forums and events. The biggest news regarding the future of Farmfest probably came the day before Faremfest started, when it was announced that American Farm Bureau had purchased the agricultural events and publications previously owned by Cygnus Business Media. This purchase involved five IDEAg farm shows, including Farmfest in Redwood County, Minnesota, and Dakotafest, held annually near Mitchell, South Dakota. Next year’s Farmfest is Aug. 5-7. The 2013 Farmfest forums featured considerable concern and emphasis regarding the future of ag policy issues and farming practices, both at the national and state level. Following are some of the highlights from the 2013 Farmfest forums:

• Governor Mark Dayton drew statewide media attention at Farmfest when he called for repeal of the new state sales tax on the labor costs of farm machinery and equipment repairs, which went into effect on July 1. The farm machinery repair expenditures have previously been exempt from state sales tax. The new sales tax was passed as a part of state budget enhancement efforts. Dayton also stressed the need to provide necessary disaster assistance to farm operators, especially livestock producers, in the areas of Minnesota that were severely impacted by the late and prevented planting this past Spring, along with other significant weather issues during the 2013 growing season. • The Farmfest forum titled: “Reaching an Endpoint on a New Farm Bill” drew national media attention, and featured Congressmen Collin Peterson and Tim Walz, along with several

national farm leaders. Several members of the audience indicated frustration with the lack of movement toward compromise to resolve differences in the proposed Farm Bill. All panel members agreed that the current status, with the versions of the new Farm Bill that have been passed by the U.S. Senate and U.S House being so different, will make it very difficult to pass a final Farm Bill.

• Renewable energy policy was another forum topic that garnered considerable discussion, which included interactions on ethanol, biodiesel, wind, solar, biomass, etc. Sen. Al Franken and Doug O’Brien, USDA Under Secretary, both stressed the importance of a strong commitment to renewable energy policy and development in the United States. Dave Frederickson and Mike Rothman, state commissioners of Agriculture and Commerce, pointed out the impact that renewable energy has had on Minnesota’s economy, as well as the positive aspects on the environment, and lowering the U.S. dependence on foreign energy. However, several panel members also pointed out that it will be difficult to advance the development of renewable energy nationally, or in Minnesota, without the help of supportive federal and state policies. • A panel of media representatives that are not directly associated with agriculture discussed how the agriculture industry is viewed by the media and general public. They indicated that overall perception of agriculture and of farm operators is still quite positive; however, some members admitted that more questions continue to be raised, especially with the very large farm operations. It was pointed out that many large farm operations are composed of one or more farm families that have joined forces to make better utilization of their resources. The

32 • september 2013 • MN Valley Business

panel stressed the importance that farmers tell their story, whether it be through the traditional media, the Internet, or in conversations with their non-farm friends and relatives. This will become more important in the future, as fewer consumers have any ties to a farm family.

• In recent years, sow gestation crates, chicken cages, use of antibiotics, and many more items related to livestock husbandry have become front-page news stories, as well as topics for potential legislation. A panel of livestock industry experts discussed these issues and more during a Farmfest forum. Most agreed that a producer is in the best position to determine what is best for the health or welfare of farm livestock, and pointed out that producers need to be in the forefront of developing new guidelines or policies. In recent years, many well-funded activist groups have used the social media and other communication forms to target how farmers and ranchers produce their livestock. These groups have pressured retail food outlets to also get involved, in order to dictate how livestock is raised for the production of meat, milk, and eggs. Just as with the previous forum, this panel encouraged producers to be proactive in sharing the “how and why” relative to their husbandry practices in raising livestock. • Another feature forum at Farmfest was titled: “Future Opportunities in the Agriculture Industry.” Dave Frederickson, state commissioner of Agriculture, highlighted the significance of the agriculture industry to Minnesota, and the need to have strong agricultural education programs. A forum panel, representing a wide range of young ag leaders in various segments of the agriculture industry in Minnesota, shared many facts and figures relative to

Agriculture/Agribusiness Corn prices — southern Minnesota — 2012 — 2013

(dollars per bushel)

$16.61

$5.62

$13.82

Source: USDA

185 pound carcass, negotiated price, weighted average

— 2012 — 2013

$99.75

100

Milk prices

— 2012 — 2013

$20.71

$90.12

Minimum prices, class 1 milk Dollars per hundredweight

Source: USDA

Iowa-Minnesota hog prices 110

(dollars per bushel)

Soybean prices — southern Minnesota — 2012 — 2013

$7.98

Source: USDA

$17.31 J

Source: USDA. Based on federal milk orders.

Corn and soybean prices are for rail delivery points in Southern Minnesota. Milk prices are for Upper Midwest points.

C. Sankey

the jobs that are currently available, as well as what the needs will be in the future. They also highlighted some areas of agriculture that are currently without adequate numbers to meet employment needs. The panel pointed out that there are opportunities for persons currently in the workforce to get re-trained in agricultural subject matter in order to pursue career opportunities. • Farmfest concluded by recognizing 76 County “Farm Families of the Year.” It is always interesting to hear the wideranging and interesting backgrounds of these farm families and their farming businesses, to see the multi-generational aspect of these family farms, and to realize the tremendous amount of agricultural and community leadership that exists throughout the state. The backgrounds and accomplishments of these farm families demonstrate the diversity and dynamics of Minnesota’s agriculture industry. MV Kent Thiesse is farm management analyst and vice president, MinnStar Bank, Lake Crystal. 507- 381-7960; kent.thiesse@ minnstarbank.com

Oil Change to Overhaul… We

do it all.

Best of Mankato Best Auto Repair

Best Auto Mechanic Lynn Austin

507-387-1315 AUSTIN’S AUTO REPAIR CENTER INC.

1620 Commerce Drive, North Mankato | www.AustinsAutoRepairCenter.com

MN Valley Business • september 2013 • 33

Employment/Unemployment Initial unemployment claims

Minnesota initial unemployment claims

Nine-county Mankato region Major July Industry ‘12 ‘13 Construction Manufacturing Retail Services Total*

134 220 48 238 640

Percent change ‘12-’13

99 240 38 212 589

-26.1% +8.1% -20.8% -10.9% -8%

Major Industry

July

Construction Manufacturing Retail Services Total*

‘12

‘13

Percent change ‘12-’13

2,988 3,482 1,443 6,308 14,221

2,374 3,294 1,280 5,833 12,781

-20.5% -5.4% -11.3% -7.5% -10.1%

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

Minnesota Local non-farm jobs

- 2012 - 2013

Nine-county Mankato region

127,618 126,757

30000

(in thousands) 3000

20000

2000

10000

1000

00000

Local number of unemployed

- 2012 - 2013

Nine-county Mankato region 7,634 6,473

0000

Minnesota number of unemployed

- 2012 - 2013 178,408 152,775

200000

8000

150000

6000

100000

4000

50000

2000 0

- 2012 - 2013 2,836.2 2,859.7

Mankato/North Mankato Metropolitan statistical area

Unemployment rate Number of non-farm jobs Number of unemployed

Unemployment rates Counties, state, nation

(includes all of Blue Earth and Nicollet Counties) June

2012

2013

5.4% 54,622 3,120

4.5% 54,786 2,565

Source: Minnesota Department of Employment and Economic Development

34 • september 2013 • MN Valley Business

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

July 2012 5.5% 5.4% 6.1% 6.6% 5.6% 5.3% 4.6% 5.7% 7.1% 5.8% 5.8% 8.6%

July 2013 4.7% 4.6% 5.0% 5.8% 4.9% 4.0% 4.3% 5.3% 6.5% 4.9% 5.1% 7.7% C. Sankey

Construction/Real Estate Residential building permits Mankato 8000

(in thousands)

- 2012 - 2013

$1,898.1 $2,243.9

3000

$2,401.1 $4,331.3

6000

Residential building permits North Mankato

- 2012 - 2013 (in thousands)

2000

4000

1000

2000 0

Source: City of Mankato

- 2012 - 2013

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

175 208

250

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

Housing starts: Mankato/North Mankato - 2012 - 2013 15 29

150

100

50 J

Source: Realtors Association of Southern Minnesota (in thousands)

- 2012 - 2013

$11,842.3

12000

- 2012 - 2013 (in thousands)

$263.4 $100

1500

$1,086.3

6000

Commercial building permits North Mankato 2000

10000 8000

Source: Cities of Mankato/North Mankato

Commercial building permits Mankato

1000

4000

500

2000 J

Source: City of Mankato

— 2012 — 2013

5.5 5.0

4.4%

4.5 4.0

3.5%

3.5 J

Source: Freddie Mac

Source: City of North Mankato

Interest Rates: 30-year fixed-rate mortgage

3.0

200

Source: City of North Mankato

Existing home sales: Mankato region

Foreclosures: First Quarter of 2013 County Blue Earth Brown Faribault Le Sueur Martin Nicollet Sibley Waseca Watonwan

2012

2013

Percent change

47 2 6 23 7 6 11 14 6

38 9 12 29 10 15 12 15 6

+24% -78% -50% -21% -30% -60% -8% -7% 0%

Source: Minnesota Foreclosure Partners Council C. Sankey

MN Valley Business • september 2013 • 35

Retail/Consumer Spending Vehicle Sales Mankato — Number of vehicles sold 958 836

1200

- 2012 - 2013

(In thousands)

- 2012 - 2013

500

1000

400

800

300

600

$379.4 $364.0

200

400

100

200 0

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

Sales tax collections Mankato

Source: Sales tax figures, City of Mankato

Lodging tax collections Mankato/North Mankato

Source: Sales tax figures, City of Mankato

Mankato food and beverage tax

$53,493 $56,816

- 2012 - 2013

$37,519 $32,184

50000

75000

- 2012 - 2013

40000 50000

30000 20000

25000

10000 0

Source: City of Mankato

Stocks of local interest

July 15

Aug. 14

Percent change

Archer Daniels

$35.81

$38.54

+7.6

Ameriprise

$85.59

$89.70

+4.8

Best Buy

$29.14

$31.67

+8.7

Crown Cork & Seal

$42.26

$45.22

Fastenal

$47.01

$46.43

-1.2

General Growth

$21.28

$20.38

-4.2

General Mills

$51.21

$52.05

+1.6

HickoryTech

$10.65

$11.09

+4.1

Hutchinson Technology

$5.40

$3.43

-36.5

Itron

$42.60

$40.29

-5.4

Johnson Outdoors

$25.30

$25.91

+2.4

$114.40

$117.62

+2.8

Target

$72.18

$70.04

-3

U.S. Bancorp

$37.26

$36.97

-0.8

Wells Financial

$20.97

$22.45

+7.1

Winland

$0.70

Xcel

$29.69

$28.20

-3

Gas prices-Mankato — 2012 — 2013 5

$3.75

2 $3.56

1 0

Gas prices-Minnesota — 2012 — 2013

$3.75

4 3

$3.48

2 1 0

Source: GasBuddy.com C. Sankey

36 • september 2013 • MN Valley Business

occupational medicine on-site services

Mankato Clinic Urgent Care @ Adams Street is your provider of on-site and in-clinic Occupational Medicine Services. Our staff is committed to keeping your workers healthy and getting them back to work quickly and safely after an injury or illness. Services provided by our Occupational Health Nurse at your site: • Designated contact person for companies • Ergonomic worksite evaluations • Vaccines • Health and Wellness fairs • Educational seminars • Company site visits To schedule an on-site appointment, call 507-625-7684. For more information on additional occupational medicine services visit, www.mankatoclinic.com.

Advancing Business for a Stronger Community

Greater Mankato Recognized! From the nationally recognized “Forbes” to the lesser known “NerdWallet,” the Greater Mankato region has recently shown up positively on a variety of lists. In addition to making us feel good about our community, these rankings also help put Greater Mankato on the map as a destination for business success. Many of the recent nods to our region, come as a result of our status as a Metropolitan Statistical Area (MSA), which includes all of Blue Earth and Nicollet counties. Often times lists are comprised only of MSAs. The recent Forbes “Best Small Places for Business and Careers” list, for example, considered “Small Places” MSAs with populations of 250,000 or less and did not even consider non-MSA communities. “While our MSA status does help us get on the radar, it is our outstanding performance as a marketplace that gives us high rankings on these lists,” says Greater Mankato Growth President & CEO Jonathan Zierdt. Community awards such as those at the right, are not the only ways Greater Mankato garners attention. When a business receives an award, it not only honors their success, but also reflects positively on the marketplace. Whether it’s an awards from an industry group, publication or another source, any time a business in Greater Mankato receives recognition, so does the community as the “home” to this successful business. While many in our region tend to be modest about their accomplishments, by proactively putting your or another’s business into the running for these awards, you are actually helping promote the community. A list of award opportunities, including the awards presented at our community’s own “Business Awards & Hall of Fame” (see next page), is available on the Greater Mankato website at greatermankato.com/award-opportunities. If you know of any awards you think our business community should know about, please email us at info@greatermankato.com. We will continue to update the website as new opportunities arise.

Greater Mankato’s Business-friendly Rankings 10th in the nation on Forbes 2013 list of Best Small Places for Business and Careers among places having populations less than 250,000 (up from 11th in 2012 and 25th in 2011) 8th in the nation on NerdWallet’s 2013 list of Best Places for WorkLife Balance based on hours worked per week, daily commuting time and median earnings Top 25% in the nation for Job Growth by NewGeography.com for the area’s creation of short and longterm jobs On America’s Promise top 100 communities for young people list four consecutive times for nurturing youth from a young age by investing in them to be productive and successful future leaders

Greater Mankato Growth

15th in the nation on the 2010 Forbes.com list of best places to raise a family among communities with a population of 100,000 or less for having solid average incomes, good educational prospects, low costs, short commute times and a high rate of home ownership 7th in the nation on the 2008 Bizjournals.com list of Dreamtowns for being a well-rounded community, with light traffic, a healthy economy, moderate cost of living, impressive housing stocks, strong educational system and easy access to big-city amenities For a complete list of rankings and rating, visit greatermankato.com/ rankings-ratings

Chamber of Commerce and Economic Development

507.385.6640 • greatermankato.com 38 • september January 2013 2013• •MN MN Valley ValleyBusiness Business

growth

in Greater Mankato

Call for Nominations! Greater Mankato Growth, Visit Mankato and the City Center Partnership invite you to submit nominations for the many awards that will be presented at the 2013 Greater Mankato Business Awards & Hall of Fame on the evening of November 19.

Remember to submit your nominations by September 23

Groundbreaking Imperial Plastics 101 Power Drive, Mankato

Groundbreaking for New Location Pawn America 1565 Tullamore, Mankato

For a complete list of awards and nomination forms visit greatermankato.com/ business-awards-hall-fame

New Location A&E Construction Supply 54090 Loren Drive, Mankato

MN Valley Business â&#x20AC;˘ september 2013 â&#x20AC;˘ 39

Greater Mankato Growth

New Business La Terraza Mexican Grill and Bar 1404 Madison Avenue, Mankato

Member Events Business After & Before Hours

5:00 - 7:00 p.m.

Greater Mankato Growth

September 3 October 1 November 5

Courtyard by Marriott Hotel & Event Center Spherion Staffing & Recruiting Bethany Lutheran College

7:30 - 9:00 a.m. September 18 South Central College October 16 First National Bank Minnesota November 20 J. Longs for Men

2013 Business After Hours Sponsored by

2013 Business Before Hours Sponsored by

July Business After Hours at Abdo, Eick & Meyers, LLP

July Business Before Hours at Mankato Family YMCA

Business After and Business Before Hours gives representatives from GMG member businesses at the Engaged Level or higher an opportunity to get together with one another to exchange ideas and learn about each otherâ&#x20AC;&#x2122;s businesses. For more information on these and other member events visit greatermankato.com/events.

40 â&#x20AC;˘ september 2013 â&#x20AC;˘ MN Valley Business

Cavalier Calls on our

Newest Members

Vikings Business Reception Thank you to everyone who came out on July 30 to help us welcome the Vikings to Greater Mankato!

Artisan Exteriors 1351 Madison Avenue, Mankato artisanexteriorsmn.com

POET Biorefining Lake Crystal 19200 499th Avenue, Lake Crystal poet.com/lakecrystal

Greater Mankato Growth

Russell Associates 229 South Main Street, Le Sueur intratrain.com

MN Valley Business â&#x20AC;˘ september 2013 â&#x20AC;˘ 41

Back to School with Greater Mankato Growth Learning is lifelong in Greater Mankato. In addition to the many ongoing educational opportunities available at our five higher education institutions, many area organizations also provide professional development opportunities. Here’s what Greater Mankato Growth has to offer.

This month the 30th Greater Mankato Leadership Institute class will begin their journey in furthering their leadership skills. The nine-month comprehensive leadership training program with a community focus consists of 11 day-long sessions between September and May. The program not only benefits participants, but their employers as well. Employees who participate in the Leadership Institute develop new leadership skills and insight, with exposure to the latest leadership development tools and information they can then bring back to their workplace. congratulations to the members of the 2013-14 class for their acceptance into the program! To see who they are and learn more about the benefits of participating in or sponsoring the program, visit greatermankato. com/leadership-institute. Presented by:

Diana Gabriel Professional Certified Coach

The Greater Mankato Young Professionals program has grown to more than 160 participants. The popular program gives young professionals age 21 – 39 an opportunity to get together with one another at one social and one professional development event each month. They can also take part in mentoring sessions led by Greater Mankato business leaders and participate in community service projects. Participants enjoy engaging with one another and the forming connections with each other and the community. For more information, visit greatermankato.com/young-professionals.

Greater Mankato Growth