Mnvalley 9 14 by Free Press Media

L-R: Erik Leagjeld, Steve McDonald and Andy Berg of Abdo, Eick & Meyers in front of their soon-to-be headquarters. Photo by Pat Christman

Business builders

Locally grown firms backbone of economy

Also in this issue

The Free Press MEDIA

• White Orchid Boutique • Becky’s Floral and Gift Shoppe • Perfection Packaging/ Rock Star Seedz

YOU ARE

Mankato.

We are Mankato’s clinic. You make this region strong. Because you know what matters most— family, friends, community. It’s who you are. And it runs generations deep here. It’s who we are too. We are Mankato’s clinic. Committed to the health of this region. Dedicated to caring for you and your family for generations.

« mankatoclinic.com

Mother Nature

We listen.

is not the only one who can produce great color! Our People have listened carefully to our clients and communities for over 50 years. After all, our Process begins with lending an ear.

Corporate Graphics Your Printing Solutions Company 1750 Northway Drive North Mankato, MN 56003 800-729-7575 www.corpgraph.com

Mike King

Mike Ogaard

Are you looking for ways to streamline your banking? Community Bank’s Small Business Checking is free when you maintain $200 in your account. Online banking services are available for no additional charge - including our payroll processing service. This service provides a great benefit to your employees and reduces expenses for your business. Making the switch is easy. Stop by and get started today. MONEY MATTERS. WORK SMART. LET OUR TEAM HELP YOU BRING THE TWO TOGETHER.

Right Perspective. Successful Results. As Broker and Owner of Coldwell Banker Commercial Fisher Group, David meets the daily challenges of running a successful business, mentoring his team and continually challenging those around him to think critically about situations and their potential outcomes. He is a visionary, a forward thinker and by listening to him speak one will clearly understand the passion he has for community, growth and living life with integrity. David’s intuitive eye makes him the right choice to help take your business to the next level. Call David today at 507-382-2403.

Julie Vetter

Amanda Bohlke

MANKATO - St. Andrews Dr. 507.385.4444 MANKATO - Madison Ave 507.625.1551 AMBOY 507.674.3300 VERNON CENTER 507.549.3679 Eric Boelter

DAVID SCHOOFF

Quentin Beadell

Business is complicated. Banking shouldn’t be.

BROKERAGE – DEVELOPMENT – MANAGEMENT

507-625-4715 cbcfishergroup.com

www.cbfg.net MN Valley Business • september 2014 • 3

HI, I’M JOE TAYLOR. Overton, Texas. What keeps me coming back to the Trail? It’s just absolutely sensational.

I have people tell me what they’ve spent playing one round at Pebble Beach and a night at the hotel, or going to Pinehurst for a couple rounds. We do the entire week, travel, hotel, green fees, good meals and everything for the price of one day at these places. And it’s absolutely a sensational place to come. TO PLAN YOUR VISIT to Alabama’s Robert Trent Jones Golf Trail, visit rtjresorts.com or call 1.800.949.4444 today. facebook.com/rtjgolf twitter.com/rtjgolf

F E A T U R E S September 2014 • Volume 6, Issue 12

Many homegrown businesses have gone on to thrive and expand the local economy. While some have other offices, Mankato remains home.

James Oslund serves a niche at his Perfection Packaging business where he also packages his line of sunflower seeds - Rock Star Seedz.

Brooke Stenzel recently brought her White Orchid boutique to North Mankato after years of operating a similar store in Fairmont.

Judy Jobe and her daughter Robin Guhlke of Becky’s Floral & Gift serve up fragrance and beauty for weddings and other special events.

MN Valley Business • september 2014 • 5

■ september 2014 • VOLUME 6, ISSUE 12 PUBLISHER James P. Santori EXECUTIVE EDITOR Joe Spear ASSOCIATE EDITOR Tim Krohn CONTRIBUTING Tim Krohn WRITERS Nell Musolf Kent Thiesse Heidi Sampson

PHOTOGRAPHERS Pat Christman John Cross COVER PHOTO John Cross PAGE DESIGNER Christina Sankey ADVERTISING Ginny Bergerson MANAGER ADVERTISING sales Jen Wanderscheid Theresa Haefner 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 ■ Construction, real estate trends.. 29 ■ Agriculture Outlook...................... 30 ■ Agribusiness trends..................... 31 ■ Job trends..................................... 32 ■ Retail trends................................. 33 ■ Greater Mankato Growth.............. 34 ■ Greater Mankato Growth Member Activities ....................... 36

From the editor

By Joe Spear

Homegrown businesses inspire

he Mankato region offers a solid base of homegrown businesses that have a considerable impact This month’s Minnesota Valley Business cover story offers us once again a look at some of the intriguing businesses in the Mankato region that may have flown under the radar or escaped the spotlight, but nonetheless have considerable impact Take Abdo, Eick & Meyers, an accounting and consulting firm that started with the dreams and ambitions of just one person. Longtime Mankato businessman Joe Abdo, a Lebanese immigrant to Mankato, started the firm with $15,000 in the 1960s. The firm his sons Jay and Joe work at has 130 employees and does about $16 million in business every year through offices in Mankato and Edina. Then there’s Mankato Answering Service, started in 1970 by Brad Reeves who worked at Kost Ambulance Service before starting the 24 hour a day answering service. The ambulance service needed 24-hour answering, and Reeves thought there must be other businesses that also need the dispatching services. That proved to be true. The firm has 18 employees staffing a call center in downtown Mankato that handles after-hours calls for plumbers, air conditioning companies, rural electric services and funeral homes in a five state area. The company also handles calls for 26 insurance offices in the state. If there is one overarching principle of business you notice for the companies featured in this month’s edition, it is that they seem to enjoy what they are doing and providing top notch service to their customers. For MAS, the answering service, they take pride in being “Minnesota Nice from Coast to Coast,” noting that you don’t always get that kind of person to work at call centers at other places around the country. The Abdo firm seems to take real pride in not just providing a client a tax return that saves them money, but advising and consulting with them to

6 • september 2014 • MN Valley Business

help them grow their business, whether they have $1 million in sales or $100 million. Steve McDonald, managing partner with Abdo, Eick and Meyers, sums it up: “The business community here in Mankato is just fantastic. There are a lot of people doing a lot of interesting things.” Our goal at Minnesota Valley Business is to bring these ideas and business stories to our readers as part information but also part inspiration. Business can be tough. Running your own business in the United States is as tough as it’s ever been. Business people need information on how to run their business and can get great ideas from the stories of others, but it never hurts to see another’s success. Business is often only 10 percent perspiration and 90 percent inspiration. We suspect there are hundreds of businesses in the Mankato area who have stories that are just as compelling as the few that we can tell every month. Homegrown business has always been the heart of an economic development strategy. These businesses often have an extra motivation to make their business thrive so their community and their workers and investors benefit. Mankato has a history of homegrown businesses that thrived for decades and at some point were run so well, they were purchased by larger, multinational companies. That isn’t always a bad thing. Industries that are constantly competing, for example, for volume discounts on high priced steel, benefit by having stronger buying power. There are always some tradeoffs with bigger versus smaller companies. Mankato seems to have a good mix. And as the job numbers seem to tell us every month, the direction for local business and their employees seems to be on the upswing. MV Joe Spear is executive editor of Minnesota Valley Business. Contact him at 344-6382 or jspear@ mankatofreepress.com

Local Business People/Company News

■

Thoen recognized by Ameriprise

Greg Thoen, a private wealth advisor with Ameriprise Financial, qualified for and attended the 2014 national conference, which was held in Boston. While at the conference, advisors shared best practices with peers. To earn this achievement, Thoen established himself as one of the company’s top advisors achieving high levels in production, client service and client satisfaction.

Bach joins United Prairie Bank

■■■

Mountain joins Million Dollar Round Table

Judy Ringler Mountain, an agent for New York Life in Mankato, has earned membership in the Million Dollar Round Table for 2014. MDRT membership represents the top life insurance and financial service professionals worldwide.

Steve Bach

United Prairie Bank hired Steve Bach as the company’s new business development officer. Bach has more than 25 years of experience in all aspects of production agriculture, combined with a background in finance, sales and marketing. Bach will be traveling throughout southern and central Minnesota to meet with clients and work with lending team members. ■■■

V-TEK buys Royce Instruments

Mankato attorney Philip Reitan was named a 2014 Super Lawyer and Benjamin Reitan was named a Rising Star. Super Layers is a rating service which recognizes attorneys who have obtained a high degree of peer recognition and professional achievements.

V-TEK International of Mankato acquired Royce Instruments of Napa, California. Since 1985, V-TEK has been developing and delivering electronic component packaging solutions. “The acquisition supports our strategy to grow by expanding our electronic component market presence while also increasing overall share,” Larry Haberman, president of V-TEK said in a statement. “Royce’s line of bond testers and die sorting equipment compliments V-TEK’s current technology and improves customer access.”

■■■

Reitans named to lawyers list

I+S Group opens in Des Moines

I+S Group opened a new office in Des Moines. This becomes the seventh office location for ISG across Iowa, Minnesota, and Wisconsin “An important part of our strategic plan has been to be in the Des Moines market for obvious business opportunities and to further enhance service to our local and national clients,” Chad Surprenant, president/CEO said in a statement. Leading the Des Moines office will be civil engineer, Derek Johnson. Most recently, Johnson was a civil engineer in the city of Urbandale’s engineering department where he was responsible for designing capital improvement projects, conducting compliance reviews of private and public projects and oversight of the city’s municipal storm sewer systems. ■■■

Hayes new CFO of MinnStar

MinnStar Bank hired Judy Hayes as chief financial officer. She is located in the Lake Crystal office. Hayes has 37 years of banking experience and is a life-long resident of Mankato. MinnStar also hired Scott Nelsen as commercial lender. He is in the Mankato location on Poplar St.

Promotions announced at Eide Bailly

Eide Bailly announced that Katie Stenzel, David Gullixson, and Matt Moline have been promoted to senior associates. Stenzel has been promoted to senior accounting services associate. She has more than five years’ experience processing payroll including multi-state payrolls. Gullixson has been promoted to senior financial institutions compliance associate. He has more than four years of banking experience working as a lead teller and personal banker. Moline, a CPA, has been promoted to senior audit associate. He has more than two years of public accounting experience providing services to governmental and nonprofit organizations. ■■■

Blethen attorneys honored

Six Blethen, Gage and Krause attorneys have been selected to the 2014 Minnesota Super Lawyers and 2014 Minnesota Rising Stars lists. Selected as Super Lawyers: Julia Corbett (Employment & Labor), Christopher Roe (Estate & Probate), Benjamin McAninch (PI General: Defense) and Jim Turk (Alternative Dispute Resolution). Selected as Rising Stars: Beth Serrill (Employment & Labor), Kevin Velasquez (General Litigation).

MN Valley Business • september 2014 • 7

Farrish Johnson lawyers honored

Farrish Johnson Law Office attorneys Scott V. Kelly, William S. Partridge, and Randall G. Knutson have been selected to the 2014 Minnesota Super Lawyers list. No more than five percent of the lawyers in the state are selected by the research team at Super Lawyers to receive this honor. In addition, Farrish Johnson attorneys Aaron J. Glade and Daniel J. Bellig have been selected to the 2014 Rising Stars list. To be eligible for inclusion in Rising Stars, a candidate must be either 40 years old or younger, or in practice for 10 years or less. ■■■

Several earn certifications at CTS

Randy Reimers of Computer Technology Solutions has achieved the Digium Switchvox Support Engineer certification. Digium/Asterisk accounts for 85 percent of the OpenSource IP PBX phone systems in North America. Jeremy Marquardt has earned the Flex Networks Fundamentals Certification from Hewlett Packard. Tim Ray and Todd Tanhoff earned the HP ExpertOne Network Sales Certifiaction. Jaron Roberts earned his Apple Certified MAC Technician certification. Steve Nixt, Ray and Tanhoff earned the Citrix Certified Sales Professional designation. ■■■

Mickelson joins partnership board

Nicole Griensewic Mickelson, Executive Director for Region Nine Development Commission, has joined the Greater Minnesota Partnership Board of Directors. The Greater Minnesota Partnership is a nonprofit corporation devoted to advocating for state economic development policies and resources that benefit Greater Minnesota. The Partnership consists of businesses, chambers of commerce, economic development authorities, cities and nonprofits from throughout Greater Minnesota. The Board determines the Partnership’s priorities and sets its legislative agenda.

8 • september 2014 • MN Valley Business

Benrud joins First National Bank

Dan Benrud has joined First National Bank Minnesota in Mankato as vice president, commercial lender. He has a degree in corporate finance from Minnesota State University and has nine years of banking experience and six years of experience in commercial lending. ■■■

Dan Benrud

Enventis pays dividend

Enventis declared a quarterly dividend of 15 cents per share of Enventis common stock. The dividend is payable in the third quarter on Sept. 5 to shareholders of record on Aug. 15. Enventis has paid a cash dividend to shareholders for more than 65 years and increased its dividend the past four years. ■■■

Hubbard feed partners with P. Allen Smith

Hubbard announced an exclusive feed partnership with P. Allen Smith, award-winning poultry, gardening and lifestyle designing expert, to promote the Homestead poultry feed line. Smith is host of two public television programs: P. Allen Smith’s Garden Home, P. Allen Smith’s Garden to Table and the syndicated 30-minute show P. Allen Smith Garden Style.

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.

■

Business and Industry Trends

Agriculture

Crop prices spiral down

Southern Minnesota crop prices continued to fall as the latest USDA crop report predicted a bin-busting national crop. While crop conditions are good to excellent in much of the country, southern Minnesota crops, corn in particular, have struggled after a wet, cool spring and late planting. Corn prices fell to $3.18 per bushel in August after starting the year well above $4. Corn prices a year ago in August were $5.62. Soybean prices dropped to $11.44 in August after nearing $15 earlier in the year.

Hog prices also slide

After a strong market most of the year, hog prices have begun to slip. A 185 pound carcass sold for $107 in August, down from $132 a month earlier, but above the $100 it was bringing a year ago.

■■■

Energy

Crude prices drop

The market’s perception of reduced risk to Iraqi oil exports and news regarding increasing Libyan oil exports contributed to a drop in the Brent crude oil spot price to an average of $107 per barrel in July, $5 lower than the June average, according to the federal Energy Information Administration. Crude oil prices should average $107 over the second half of 2014 and $105 in 2015. West Texas Intermediate crude oil prices fell from an average of $106 in June to $104 in July.

Gas prices to continue decline

Regular gasoline retail prices fell to an average of $3.61 per gallon in July, 8 cents below the June average. Regular gasoline retail prices are projected to continue to decline to an average of $3.30 in December. Regular gasoline retail prices should average $3.50 in 2014 and $3.46 in 2015, compared with $3.51 in 2013.

Crude production up again

U.S. total crude oil production averaged an estimated 8.5 million barrels per day in July, the highest monthly level of production since April 1987. U.S. total crude oil production, which averaged 7.5 million barrels per day in 2013, is expected to average 8.5 million in 2014 and 9.3 million in 2015. The 2015 forecast represents the highest annual average level of oil production since 1972.

Natural gas imports plummet

Natural gas plant liquids production increases from an average of 2.6 million barrels per day in 2013 to 3.1 million in 2015. The growth in domestic production has contributed to a significant decline in petroleum imports. The share of total U.S. petroleum and other liquids consumption met by net imports fell from 60 percent in 2005 to an average of 33 percent in 2013. EIA expects the net import share to decline to 22 percent in 2015, which would be the lowest level since 1970.

Natural gas prices fall

Natural gas spot prices fell from $4.47/million British thermal units at the beginning of July to $3.78 at the end of the month as natural gas stock builds continued to outpace historical norms.

Coal imports stay low

Steam coal imports at electric power plants have fallen significantly from their peak level of more than 30 million tons in 2007 to less than 7 million in 2013. The number of plants using imported coal similarly fell from a peak of 48 in 2006 to 13 in 2013. Preliminary data for the first five months of 2014 indicate an increase in both imports and the number of plants taking imports, but both are still well below 2007 levels. Coal imports, mainly from Colombia but also from countries including Venezuela, Indonesia, and Canada, remain a small component of overall U.S. coal consumption—only 3 percent during the peak year of 2007 and less than 1 percent in 2013. Although the United States has abundant supplies of domestic coal, some power plants along the East Coast and the Gulf Coast receive imported coal. Imported coal accounted for between 25 percent and 50 percent of total annual coal receipts for the top coal-importing plants from 2002 to 2013. Plants in these areas are subject to relatively higher cost of eastern rail transport and in some cases are limited to delivery by waterway. The domestic coal these plants use is also relatively expensive, because nearby Appalachian coals are priced above the national average. These factors increased the cost of domestic coal high enough to make imported coal economically attractive.

N.D. Adds pipelines, but rail rules

North Dakota added 2,578 miles of crude oil and natural gas pipelines in 2013, a 15 percent increase, but most of the state’s oil is still shipped to market on trains, according to a story in the Star Tribune. The newly built pipelines largely collect oil and gas from well fields, reducing the amount of local truck traffic and wasteful burning, or flaring, of gas at the wellhead. But gathering pipelines don’t take oil to market, and haven’t reduced the need for oil trains. In June, 59 percent of North Dakota’s oil was shipped to market by rail, or about 700,000 barrels per day, a slight increase over May. Meanwhile, North Dakota reported a 5 percent surge in oil production in June to 1.09 million barrels per day, and officials expect similar gains in the months ahead. The latest surge comes just two months after North Dakota surpassed the symbolic milestone of 1 million barrels per day.

MN Valley Business • september 2014 • 9

Minnesota Business Updates

■

■ Enventis revenues up Enventis reported total revenue of $49.7 million for the second quarter ending June 30, an increase of 5 percent year over year, while net revenue was down due to costs tied to their pending merger. Revenue was driven by strong fiber and data and equipment segment results, which were up 5 percent and 15 percent respectively. EBITDA, per the company’s credit agreement, totaled $12.6 million in the second quarter, up 3 percent year over year. Net income totaled $1.9 million for the second quarter, a decrease of 18 percent year over year, and was impacted by $911,000 of pre-tax costs related to the proposed merger agreement with Consolidated Communications Holdings. Excluding these costs, net income would have been $542,000 higher and would have been up $132,000 or 6 percent year over year.

■ ADM pays clean water penalty Archer Daniels Midland has agreed to settle allegations that it violated the Clean Water Act at five different large oil storage facilities located in Cedar Rapids, Columbus, Neb., Des Moines, Mexico, Mo. and Deerfield, Mo. Through the settlement with the EPA ADM will also pay a civil penalty of $430,000 to the United States. The Clean Water Act requires facilities that store large quantities of oil to develop response plans that outline procedures for addressing “worst-case” discharges of oil. EPA identified the lack of a response plan during an inspection in 2008.

■ Best Buy: Tablet sales ‘crashing’ Best Buy’s chief executive Hubert Joly said tablets sales were “crashing” and the PC business was seeing a revival in sales, according to the website, Re/code. The U.S. smartphone market has also grown more mature, Joly said. Best Buy had earlier warned that same-store sales could fall this quarter and the next on lower demand for many consumer electronics. Joly attributed the PC revival during the first quarter partly to Microsoft stopping support for the older Windows XP operating system. “The tablets boomed and now are crashing. The volume has really gone down in the last several months,” Joly said. “I think the laptop has something of a revival because it’s becoming more versatile.”

10 • september 2014 • MN Valley Business

■ Medical sector moves to ‘master leases’ The medical-office sector is undergoing a broad transformation with the rise of master leases, according to The Wall Street Journal. In those deals, a large company or organization leases several floors or an entire building, then typically sublets the space to smaller users. Until recently, the sector had relied on myriad small leases backed only by the guarantees of individual physicians and small practices. The deal is an example of a side effect of health-care reform some might not have expected. Across the nation, the value of medical office space is skyrocketing as the size and credit quality of tenants increase.

■ 3M beats expectations 3M announced earnings per share of $1.91 and revenues of $8.13 billion. Earnings per share were in line with what analysts had expected, while revenues beat analysts’ expectations by $40 million. Revenues increased 4.8 percent year over year and earnings per share rose 11.7 percent. Operating margins for the company expanded 0.8 percentage points over the year to 22.8 percent for the second quarter. 3M returned $2 billion to shareholders in the form of dividends and cash repurchases of stock. $556 million were given out as dividends and $1.4 billion were spent on share repurchases. 3M had net income of $1.3 billion during the quarter.

■ Johnson Outdoors net falls 66%

Johnson Outdoors reported higher quarterly sales as the business recovers from the harsh winter but said its fiscal third quarter net income fell 66 percent to $4.7 million, or 40 cents a share, from $13.7 million, or $1.37, a year earlier. The recent results included noncash impairment charges, including a charge of $8.5 million. Excluding those charges, earnings would have been about break-even with a year-ago. Sales for the three months ended June 27 rose 6 percent to $137.1 million from $129.8 million. “This year’s unusually long, hard winter significantly delayed the start of the warm-weather outdoor recreation retail season, negatively impacting every market,” Helen Johnson-Leipold, chairman and chief executive officer, said in a statement. “Consistent strong demand for new products drove top line growth across our brand portfolio during the third quarter.”

Gislason & Hunter LLP Attorney Christopher Sandquist

INTRODUCES YOUR

In addition to the MSP Airport, Land to Air Express now offers multiple daily trips from Mankato to Rochester and Southern MN destinations in between. Convenient Mankato shuttles are still available every day to and from the Minneapolis International Airport.

Visit landtoairexpress.com or call 507-625-3977

Christopher Sandquist csandquist@gislason.com 507-387-1115 Mankato 507-354-3111 New Ulm

PROVIDING LEGAL EXPERTISE IN: n Complex Civil Litigation n Employment Law n Shareholder Disputes

MN Valley Business • september 2014 • 11

Discover Something New

“Dedicated to creating bold transformations

trusted relationships” Mankato Ford - Fall 2014 w w w. o h a r c h i t e c t s . c o m architecture

interiors

507.385.1158

planning

sustainability

Everything you need…

including the kitchen sink!

Contact St. James EDA for more information. Phone: 507-375-3241 | Fax: 507-375-4376 E-mail: molly.westman@ci.stjames.mn.us

1235-082764561401

Because aspiring food entrepreneurs may be required to prepare their product in a commercially licensed kitchen, this facility is available for rent on a daily, weekly, or monthly basis.

Soil-Max Gold Digger Tile Plow

Intellislope Plow Control System

NO LASERS. NO SURVEYS. NO GRADE CALCULATIONS

If you can drive your tractor, you can tile your field with INTELLISLOPE. Now a feature of the Ag Leader INTEGRA display, INTELLISLOPE offers unmatched tiling productivity by eliminating grade calculations, laser tripod setup and repositioning hassles. Survey the installation path by simply driving over it. INTELLISLOPE’s exclusive AutoTile™ feature plans the installation profile at your choice of depth and grade. Then you can record, archive and map installed lines using Ag Leader’s SMS software for analysis and future tile installation planning. And, because Intellislope is part of the industry-leading Ag Leader INTEGRA display, planning, installing and recording tile is even more intuitive and easier to setup.

• Golddigger Tile Plows • Laser Systems • Tile Stringer Trailers • Intellislope Plow Control Systems • Maverick Tile Finders

1235-082769276001

Professional resources to help grow your business

RDT – Design Build, Mankato, MN

Audio, Video, Automation Systems

Jerry’s Body Shop, Inc. 1671 Madison Avenue Mankato, MN 56001 507-388-4895 www.asashop.org/member/jerrys

MEDIA The Free Press Media 418 S 2nd Street Mankato, MN 56001 507-625-4451 www.mankatofreepress.com

Control your: • Tvs • Music • Movies • Lighting • HVAC • Security • Locks • Garage Doors • Shades • More by smartphone or tablet Call us and let us show you how it works.

AUTOMOTIVE

www.ecsmankato.com

For information on including your service to this directory, please contact

507-344-6390

MN Valley Business • september 2014 • 13

Joe Abdo started his accounting firm in 1963, a firm that has grown to one of the largest in the state.

Home grown success Local firms grow to fuel economy By Tim Krohn | Photos by John Cross and Pat Christman

ocally grown businesses fuel the economy with growing workforces, expanding payrolls and involvement in the community. The staggering success stories are well known: Glen Taylor turning a small printing business into a national leader; the Andreas brothers buying a soybean plant that grew into Honeymead and now CHS.

MICO, Kato Engineering, Ridley (Hubbard), MTU Onsite Energy (Katolight) and others grew to be the largest employers in the area, some still locally owned, others now part of larger corporations. But it is the small and mid-size home-grown firms that represent the majority of businesses. Firms of less than 500 represent nearly 98 percent of all employers in

Cover Story

14 â&#x20AC;˘ september 2014 â&#x20AC;˘ MN Valley Business

Left to right: Steve McDonald, Andy Berg and Erik Leagjeld in their downtown Mankato offices. the state and employ more than 50 percent of all the private-sector labor force. Some of those, such as Abdo, Eick & Meyers are familiar to many, but have grown to a stature that would surprise most. Others, such as MAS Communications, are, as owner Mary Reeves says, “the best kept secret in Mankato.” And others such as ECS (Electronic & Communication Specialists) are well known to the home builders and owners who use them, but far from a household name. Abdo growing in Mankato and beyond In the early 1960s, Joe Abdo accomplished what was believed to be a first in the nation: he passed the CPA exam before graduating from college. Abdo, 84, says he wasn’t the typical college student. “I was 33 years old. It took me eight years to graduate because I was working full time and I had five kids.” In 1963, Abdo graduated from Mankato State College. Abdo was the youngest of 13 children born to Lebanese immigrants who ran a neighborhood grocery on James Avenue. His mother loaned him her life savings — $15,000 — to start his accounting business. Today, Abdo, Eick & Meyers has grown into the largest Mankato based accounting firm and a top 15 firm in the state. Joe retired in the late 1990s. His sons, Jay and Joe, work in the firm. From 2000 to today, the business has gone from a $2

million firm to a $16 million firm and has doubled its staff in the past five years to 130 employees split equally between offices in Mankato and Edina. “We’re proud of being a great place to work and we have a great employee base,” said Steve McDonald, managing partner. “Half of our employees come from Minnesota State (University). So we value that relationship.” McDonald said the growth of the firm is attributed to focusing on a few core sectors. “When we’ve been most successful we’re doing more work for fewer people. When we’re more involved in helping them grow their business that’s when our business has been the most fun.” He said the firm’s plan for future growth is to specialize in services aimed at those in manufacturing, real estate, professional services like attorneys, engineers and doctors, and non-profits and government. “Municipal government is our largest share of business right now,” McDonald said. The firm audits 100 municipalities, including Mankato, and works with them on a variety of budget and planning issue. “With cities we’re doing more consulting work, budgeting and long-term planning and assessing the decisions they have in front of them. We see a lot of opportunity there.” With manufacturing clients, the firm often helps them analyze whether to and how to gain research and development tax credits.

MN Valley Business • september 2014 • 15

McDonald, Berg and Leagjeld on the upper floors of the Profinium office tower going up in downtown Mankato. The accounting firm will soon move into one-and-a-half floors of the building. “Tax and audit services are still our bread and butter, but business owners are looking for more than a completed tax return, they want to know what it means and plan for the most advantageous business decisions.” He said their average private-sector clients are successful, closely held businesses. “They’re often owner-operated with $1 million to $100 million in revenue. That’s the majority of our clients.” McDonald said the partners of the firm have discussed possibly adding another office, but for now see plenty of growth potential in their two locations. “Business has been very good in Mankato and we see opportunity to grow here. And the Twin Cities has a lot of untapped potential, too,” he said. “The business community here in Mankato is just fantastic. There are a lot of people doing a lot of interesting things.” The firm is soon to get a much higher profile in Mankato. It will be moving from its offices in Mankato Place to the new Profinium office tower being built by Tailwind Group on the corner of Riverfront Drive and Warren Street. Abdo, Eick & Meyers will use one-and-ahalf floors, with the option for more space. Some of the Abdo partners are also investors in the office tower project. The lead tenant will be Profinium Financial. Ready to answer 24/7/365 In 1969, Brad Reeves moved his family from Minnetonka to Mankato to work for Art Kost and Kost Ambulance. Needing to have a fulltime dispatcher for the ambulance service, Reeves knew that there had to be other industries that could benefit from 24-hour phone coverage. Mankato Answering Service was born in 1970 “We do anything 24/7/365. Medical clinics, roofing, dental, rural cooperatives, city utilities, plumbers, heating

16 • september 2014 • MN Valley Business

and air conditioning, funeral homes,” said owner Mary Reeves, daughter of Brad and Holley. In 1997 Reeves bought an existing answering service in Faribault. As the business grew, with a customer base across the Upper Midwest, the business changed its name to an abbreviation of its former name - MAS Communications. Reeves has 18 employees who staff the call center, located in downtown Mankato. “The customer tells us what they want us to do. After we take the message, should we send it to them via text? Do they prefer an email? If we don’t hear back do we call them at home? We’re really an appendage of their office, we take the job very seriously,” Reeves said. One of the industries closest to Reeves’ heart was one of the first to sign up with the answering service – funeral homes. “We were answering for all of the local funeral homes and by word of mouth it expanded and now we’re in the five state area,” she said. “We answer for them 24/7. If you’re a smaller funeral home and you need to go out someone needs to answer the call. The calls could be from people who want to set up prearrangements, need to order flowers for a service or need directions to the funeral home,” Reeves said. “Or someone calls that there’s been a death and they need a removal.” For plumbing, heating and air conditioning businesses, MAS is the one that takes the weekend or late night calls that a furnace stopped working on a cold winter night or a pipe burst in the basement of someone’s home and they need help quick. The firm also picked up a large niche when the Insurance Brokers of Minnesota hired them to answer calls for 26 insurance offices in the state. “People are calling to get insurance because they bought

Top: Mary Reeves said her answering service business acts as an appendage of other businesses’ offices. Right: Alexis Woods fields calls at MAS Communications in downtown Mankato a new car, or they were in an accident, or the very scary caller that says ‘I’m watching my house burn.’ I’ve actually taken one of those calls.” “There are limitations on what we can tell them about coverage, but we’ll take lots of information – the new car’s make, model and VIN number, is there a lien holder. We pass that information on and the insurance company calls them back to bind coverage,” Reeves said. She said that calls ebb and flow at different times of the week or year and she knows the routine enough to have the right amount of staff on hand to handle calls. “During busy periods there’s always at least two management on staff to answer calls as well.” Reeves said she seeks employees who “have common sense, the ability to hold a conversation, are able to think outside the box, have a good personality and typing speed. “Our motto is ‘Minnesota Nice from Coast to Coast’ and we truly embody that. People look for Minnesota nice because you just don’t find it everywhere.” ECS automating homes Years ago, Erik Magelee, an electrician, and Scott Peterson, an audio and low voltage specialist had occasionally worked together running sound for rock bands such as Dazy Head Mazy and Uncle Fester.

While Magelee was working for area contractors, Peterson focused on audio work, until deciding he didn’t want to be on the road so often. “We decided to take a leap and start our own thing in 2005,” Magelee said of their firm ECS (Electrical & Communication Specialists). “We thought it would be a good mix with our different backgrounds.” The premise was a business that could come into a residential or commercial setting and provide all the

MN Valley Business • september 2014 • 17

Scott Peterson (left) and Erik Magelee, started ECS in 2005. traditional electrical wiring as well as whole house or office audio and install TVs and other automated systems. When the recession soon hit, the budding business had just a few employees and weathered the housing downturn. “It was probably fortunate it happened when we were starting out. We actually kept growing through the recession,” Magelee said. The business, located on Sibley Street near Neighbor’s restaurant, now has a staff of 13. Growth in the business has been fueled by the smartphone – specifically the ability to remotely operate virtually everything in a home or office building via smartphone. “It’s really grown on that side where you can control your entire home from your phone or tablet. “The beauty of it right now is the cost has gotten significantly better and it just works a lot better. The systems out there have brought together an easier platform to work on. Everything is Internet connected and they work together easily,” Magelee said. The systems can close curtains, control audio and TV, adjust the thermostat for heating or cooling, alert someone to a smoke alarm going off, monitor water problems in a basement and more. Geo service systems in which certain actions are automatically triggered when a person – and their phone – are a certain distance from home is also growing. “If you leave your home and you get three or four blocks away it can automatically turn off your lights and music if

18 • september 2014 • MN Valley Business

you forgot to. And you can program events when you get close to home, like setting the temperature at a certain spot,” Magelee said. He said it’s important, though, to help customers decide what they really want to program to automatically happen. “It sounds cool to have your shades close automatically every time you turn on your TV, but sometimes you don’t want your shades closed when you turn on your TV. So maybe you have that as a separate button.” He said they are also beginning to use more voice command systems. “It wasn’t as reliable as it should have been in the past. If it’s not reliable and works smoothly it just frustrates people and they stop using it.” Magelee predicts the biggest business in home automation will come next in security and surveillance systems. “They’ve become a bigger deal and have gotten much better with high definition video that provides clarity. And the cost has gotten much better. “With IP network connected devices it’s really opening up what’s available for cameras and high definition images. I think that’s really going to grow into a much bigger market.” MV

Member FDIC

We always put you FIRST!

Experienced Lenders p r o v i d i n g

customized service for your business!

Equal Housing LENDER

Commercial Lenders: Mike Favre, Ken Kuehner, Dan Benrud, Bruce Gratz, Craig Bode & Cory Abels

Visit us online at www.fnbmn.com

Mankato 507.625.1121

St. Peter 507.931.4000

Gaylord 507.237.5521

Helping individual investors and families manage their money and make smart financial decisions.

Adam K. Mans, CFA, CFP® AKM Advisory, LLC www.akmadvisory.com 612-360-4463 adam@akmadvisory.com

MN Valley Business • september 2014 • 19

James Oslund found a niche packaging products for smaller accounts along with larger customers.

Rock Star of packaging Mankato firm builds a packaging niche

By Heidi Sampson| Photos by Pat Christman

y definition, Perfection Packaging specializes in custom packaging. Their niche is to take a project, big or small, whether that is a personalized bag, novelty container, or some other item used for packaging, and fill it with a specified product for distribution. “A lot of companies won’t do this type of work unless the customer hits a 250,000 unit mark,” said owner James Oslund. “I had a guy who brought me 300 pounds of peanuts. He wanted his name printed on the package to sell his product at bars. The entire project turned out to be a couple of thousand bags maybe, but that’s OK. That’s what we do. We help out the small guys that can’t get help from the big guys.” Perfection Packaging is also the home of Rock Star Seedz, a gourmet flavored sunflower seed company.

Fritzie Fresh of Newport, which has specialized in candies and nuts since the 1940s. Once the Fritzie Fresh account was established, Oslund started to receive calls from other companies, asking if he’d consider packaging their items as well. A unique aspect of Perfection Packaging is that they are not like a lot of their competitors who will buy the boxes, the film, and the bags but upcharge the account for the packaging. If customers come to Oslund, he’ll order the boxes, the bags and the film. All they would have to pay him for is the labor to put it together. Oslund credits his ability to charge a better price for packaging to the fact that Perfection Packaging doesn’t have a lot of overhead. “Instead of somebody else making that margin, my customers make it. They are the distributor to the stores and they make the margin that the distributor makes. So a distributor can actually make a manufacture’s margin by

Profile

Built on word of mouth In 2007, Perfection Packaging got its start assisting

20 • september 2014 • MN Valley Business

Left: Caramel candies are divided before being packaged. Right: Employees prepare bagged products for shipping. coming to me because I don’t upcharge the packaging price. I make money off of helping them design the package, putting it in a bag and getting a program going because if their program gets big enough, I get big enough,” Oslund said. “We don’t go out and try to make a living off of one person or company. We make a little bit along the way and it all adds up. We all can survive when the little guys survive too.” Rock Star Seedz born in a kitchen In 1994, Tim Regel, founder and owner of Rock Star Gourmet, fell in love with what was considered a relatively new idea, flavoring sunflower seeds. In the confines of his parents’ kitchen, he created a gourmet flavored sunflower seed. By 1995 he developed a proprietary process for flavoring the sunflower seed. From 1996 until 1999, Regel marketed the Spicy Original (spicy garlic) flavor, in hopes of getting feedback for his product. Although he received a lot of positive feedback about the Spicy Original flavor, he also received suggestions of other flavors consumers would enjoy. Ultimately this led him to develop flavors such as Ranch, Dill, Bloody Mary and Blazing Buffalo, to suit the pallets of the seed consumer. In 2005, the gourmet flavored seed was given its official name, Rock Star Seedz. Rock Star Seedz production Rock Star Seedz, became one of Perfection Packaging’s many customers, in 2007. For the next five years, Oslund packaged Regel’s Rock Star Seedz product. When Regel’s life changed due to a baby, he contemplated shutting down Rock Star Seedz, as he no longer had the time to devote to his beloved project. “I told Tim that it was too good of a product to stop it altogether,” Oslund said. “Let me buy it. What’s the worst case scenario? Four or five years from now if I don’t want to do it anymore he buys it back. Now he’s picked up all those years where it’s been running, as well as picking up all the new customers I’ve created along the way.” The first thing Oslund did after purchasing Rock Star Seedz in 2012 was to get the product at training camp for the Minnesota Twins at Fort Myers, Florida. His training camp experience went so well that the Pittsburgh Pirates called wanting their own special bag for spring training. “There are two signs of spring,” said James. “Baseball starts and the seeds go out.”

Rock Star Seedz flavor Since Rock Star Seedz is a small operation, they are more than willing to do trial runs of new flavors to see what happens. “We don’t create what everyone else has,” Oslund said. “However, it’s really hard to find something where the salt and flavor go together.” Although Rock Star Seedz is packaged in Mankato, the seasoning comes from a company in Wisconsin, which ships Oslund’s request to a roasting company. The roasting company, roasts, salts and seasons the sunflower seeds to his specification. “I get the seeds in 50 pound bags and I package them,” Oslund said. “My packaging requirements and documentations are exactly the same as Nestlé’s. I too have a Safe Quality Foods certification. It’s the exact same documentation used at Walmart, Target, with Nestlé and Hershey’s. It’s nice because you know what’s expected of you and what’s required. I can play on the same field with all of the big guys but I don’t have to fight with all of the big guys.” Nationwide Seedz Rock Star Seedz can be found in a variety of locations, at both Mankato Hy-Vee locations, as well as online at rockstarseedz.com. In fact, the majority of Rock Star Seedz’s business comes from online sales to places like, Beverly Hills, Idaho, Wyoming, Montana and New Jersey. “We are coast to coast with online ordering,” he said. “There are a lot of repeat orders. It has to be good if a customer is willing to buy 12 bags and wait for them to be shipped across the country.” Baseball - Rock Star Seedz style This year, Rock Star Seedz sponsored a team of 10 year olds with the Mankato Area Youth Baseball Association. Oslund purchased shirts and caps for the entire team, with the Rock Star Seedz logo on them. As an added perk, he also donated enough seeds at the start of the season so that at every game, every player and coach would be able to have their own bag of seeds. “If you sponsor a team don’t just write a check,” Oslund said. “Be active in that sponsorship process. I played baseball through the 10th grade. I don’t think I played in a single game but it didn’t matter. I sat on the bench, watched the game and I still had my sunflower seeds. It was a great experience. I still love baseball to this day, which is why MAYBA is such a good fit for us.” MV

MN Valley Business • september 2014 • 21

Brooke Stenzel opened White Orchid on Belgrade Avenue in North Mankato this spring.

A Blooming Boutique By Nell Musolf Photos by Pat Christman

hile the words ‘white orchid’ might conjure up images of an old black and white movie starring Humphrey Bogart and Lauren Bacall on the late show for some people, Brooke Stenzel chose to call her women’s boutique by the elegant moniker White Orchid because of a gift that she once gave to her mother. “I bought my mother a white orchid and it didn’t bloom for nine months,” Stenzel said. “Then on the day I got engaged, it bloomed.” Taking that as an omen of good luck, Stenzel used white orchids as her wedding

flower as well as for name of her new store in Fairmont. The Fairmont store opened in 2013 and this past May Stenzel opened a second White Orchid at 237 Belgrade Avenue in North Mankato. “People sometimes think we’re a flower shop,” she said. The inside of White Orchid doesn’t resemble a flower shop. The boutique has an eclectic feel to it that is both chic and comfortable. Overlooking busy Belgrade Avenue, White Orchid is in Stenzel’s dream location. She chose the spot for many reasons. “I once lived in lower north with my son

Spotlight

22 • september 2014 • MN Valley Business

and my parents own Key Insurance which is located just down the street from my store,” Stenzel said. “I love this location. It has a nice feel to it.” Stenzel is happy to be a part of the growth in the area too. “It’s exciting to see all of the new and different businesses moving into lower north,” Stenzel said. “The whole area on Belgrade is beginning to thrive and I’m very happy that my store is a part of it.” A strong proponent of supporting small businesses, Stenzel believes in buying locally. Stenzel said that if every person spent an extra $100 a year at a local business instead of at a chain store, the end result would put an extra $3 million back into the economy annually. “Instead of giving our dollars to chain stores, I think it’s important to support local businesses,” Stenzel said. “That way everyone benefits.” Stenzel, who studied philosophy at Purdue University, said that she always wanted to open a boutique. As one of four girls, clothes have been a constant passion throughout her life. She is especially fond of dresses and tries to carry as many as she can in her store with maxi dresses particularly popular at the moment. But in addition to dresses White Orchid also sells all kinds of women’s clothing as well as accessories such as jewelry, shoes and purses. “Our mantra is that we appeal to women of all ages,” Stenzel said. “We don’t have a specific customer in mind. We have clothing that will be appreciated by mothers, daughters and grandmothers. I want my store to be a place where any woman can walk in and find something that

she’ll love and that will look good on her.” Some of the name brands that are sold at White Orchid include Frank Lyman, Lynn Ritchie, Karen Kane, Tribal, Parsley and Sage and Papillon. Customers can also find Lysse, Grace in LA, Tru Luxe and Umgee fashions in the store. Sizes range from XS to XL and prices begin around $12 and go up to around $200. “Clothes that are extra small run out very quickly,” Stenzel observed. “We sell out of everything in that size pretty quickly.” White Orchid’s selection ranges from pants and casual tops to more dressy items. “I’d say that we really do cover everything,” Stenzel said. “A customer can find casual clothing at White Orchid as well as something to wear to a more formal event such as a party or a wedding.” Stenzel believes that one of the biggest pluses of buying clothing at a boutique is knowing that what a shopper finds at her store is one-of-a-kind as opposed to shopping at a large department or discount store. “If you shop at a chain store, you’ll see the same thing over and over again,” Stenzel said. “Every store offers pretty much the same look only in different colors. Our big thing is that our clothes are not mass produced. The clothes at White Orchid are cut after we order them. They are all originals. That to me is the appeal of shopping at a boutique instead of at a mall. At the White Orchid we offer unique clothing that you’re not going to see on everyone else and when you buy a dress or a shirt from us, you won’t see it on half a dozen other people.” Stenzel added that the quality of the clothes she sells are

MN Valley Business • september 2014 • 23

Stenzel says her boutique offers unique women’s clothing not found in chain stores. higher than most of what consumers will find at chain stores. The majority of items sold at White Orchid are made in either the United States or Canada. Stenzel noted that Canadian manufacturers have a good idea of what the typical Midwestern female figure is like and that helps Canadian manufacturers create flattering clothing. Stenzel places her orders six months ahead of when she receives them and typically orders three to eight pieces of each item. “So you can see that what we sell is really unique,” Stenzel said. In addition to the lines she is currently selling, Stenzel is planning to branch into original designs at White Orchid as well. Along with associate Tricia Frederick, Stenzel is creating a line of women’s clothing with an eye toward the 25 and up crowd that will cover fashion needs from casual business to slightly more formal. “Back in the 90s, there was such a thing as ‘mom’ clothes,” Stenzel said. “You could tell by looking at certain styles that they had been designed with moms in mind and they weren’t especially attractive or flattering like ‘mom jeans.’ That mindset no longer exists. Now moms — and women of all ages — can look chic and trendy all of the time.” Stenzel currently has four employees at both her Fairmont and Mankato locations and as the owner she splits her time between the two sites. Traveling between the two stores and juggling her home life keeps Stenzel busy with the continual challenge of balancing everything

24 • september 2014 • MN Valley Business

from day to day. But the rewards of owning her own business outweigh any stress that might crop up. “I love making women feel good about themselves,” Stenzel said. “It is so rewarding to me to help someone find an outfit that makes her look good. A lot of women are unsure of what to wear. When a woman comes in and we find an outfit for her that makes her look great — it’s a wonderful feeling to see her face light up and to know that we’ve helped boost her confidence.” MV

White Orchid is open

Mondays, Tuesdays, Wednesdays and, Fridays 10-6, Thursdays 10-7, Saturdays 10-5. Closed Sundays.

Oil Change to Overhaul…We do it all. kato Man epair f o t Bes Auto R t Bes

han Mec n o t t Au usti Bes Lynn A

507-387-1315

AUSTIN’S AUTO REPAIR CENTER INC. 1620 Commerce Drive, North Mankato

TH 169 Reconstruction, Blue Earth, MN

(507) 625-4171 | www.bolton-menk.com

www.AustinsAutoRepairCenter.com

VICTORY VIEW OFFICE SUITES NORTH VICTORY DRIVE MANKATO, MN

South Central Minnesota Toll Free 800-450-6625 www.Wilcon-Construction.com MN#8761

EEO/AA

there for

you

Tom Evensvold

Steve Olson

Mark David Thompson Monson

Many have trusted MinnStar Bank’s personal service to help them build and grow their businesses—and we can do the same for you.

Downtown Mankato 507-625-6816 Lake Crystal 507-726-2137

BUSINESS BANKING www.minnstarbank.com Member FDIC

MN Valley Business • september 2014 • 25

Judy Jobe and her daughter Robin Guhlke, along with help from other family members, operate Becky’s Floral in downtown Mankato.

Fresh and fragrant

Decades of experience at Becky’s Floral By Heidi Sampson Photos by John Cross

udy Jobe, co-owner of Becky’s Floral & Gift Shoppe, grew up actively participating in Wandersee Florist, a floral shop owned by her father and uncle. Although the experience developed her passion for flowers, as a member of a family of eight, there were simply too many children for everyone to be in one business together. As a result, three of her brothers bought Wayside Nursery, which was located in North of Mankato. The nursery’s name changed to Wandersee’s Greenhouse. Judy went to work for her brothers in the late ‘70s, working in the greenhouse for 25 years. There was also a floral shop located on site for five of

those years. Wandersee Greenhouse closed in the late 1990s. By 2002 Judy and her brother, Jim, were looking for a way back to their floral roots. When Becky’s Floral & Gift Shoppe became available for purchase, it was the perfect fit for their objectives. “My daughter Robin (Guhlke) worked with us,” said Judy. “Now Robin and I have taken over and purchased the shop from my brother. However, my brothers still help deliver flowers on the big days, as well as my grandsons. I have a granddaughter that likes to make floral arrangements. We have one person who works

All In The Family

26 • september 2014 • MN Valley Business

Hours of Operation: (719 South Front Street) Monday - Friday 8 a.m. - 5:30 p.m. Saturday 9 a.m. - 1 p.m. Open Sunday’s by appointment.

Robin Guhlke runs the office and serves as delivery driver at Becky’s Floral. for us who is not family, Dar Madigan. But, we’ve know her for so long she is family. She even goes back to the original Wandersee Florist building.” MVB: What is the busiest time of the year for a florist? Judy: July is probably the slowest month of the year. The kids are out of school and nothing much is going on at the college. Robin: The gardens are also full of people cutting their own flowers. Judy: Business usually picks up around the middle of August when the kids go back to school and stays consistent until Mother’s Day. Normally, weddings keep us fairly busy during June, July and August. MVB: How many weddings will Becky’s Floral handle on any given weekend? Judy: I will not do more than three. That’s about all we can handle. Hopefully, they aren’t all real big weddings either. MVB: How do you divide up your time and duties? Judy: We kind of do whatever it is we feel like doing for that day. Dar and I do most of the arranging. Robin mainly takes care of the office, as well as working as our driver. When she doesn’t have a lot of stuff to do, she will help out with floral arrangements. She is also the wedding consultant. MVB: What’s the best part of owning and running your own business? Robin: Being able to do what we like to do. Judy: And having the freedom to do it together. I don’t know what I’d do without them. MVB: What do you think draws people to Becky’s Floral? Judy: We try to be accommodating. Customer service is a big part of our business. We have a slogan, ‘Always Fresh, Always Friendly, Always Becky’s Floral.’ MVB: How do you handle the competition of this market? Judy: I’m friends with both of the other larger flower shops in town. I guess I don’t look at it as competition. I like to think we are friends. I don’t feel I have to compete.

They have their markets and I have mine. Sometimes we have to rely on each other for a product. I don’t always have what I need and they don’t always have what they need. When out of town funerals happen, one of the shops will call the others to say, ‘Do you have anything that has to (be delivered)? We are going.’ I like to think that it is good for their business and our business, if we work together. MVB: What’s the biggest challenge of owning a flower shop? Robin: The economy hasn’t been the greatest and the construction hasn’t been helping us at all this summer either. It’s pretty hard to get around town. Minnesota’s also a difficult state for floral delivery and that’s mostly due to the climate. On hot days, you have to keep flowers cool and in the winter, you have to keep them warm. Judy: Then there’s delivering in a snow storm or in a downpour. Robin: Yeah, there’s that too. I’ve sat in my truck from time to time waiting for a break in the rain. MVB: How has the Internet advanced floral sales? Robin: The bigger problem with the Internet is the people who order from the dot coms. The order ends up coming to a local florist anyway but the customer usually ends up paying more because there’s an upcharge. We’ve had customers that have paid $75 for an order. Of that $75, we might get $50 to fill it and that has to include our delivery charge. Judy: The dot coms are all over the phone book too. They advertise as a local florist but they aren’t. They don’t have a single flower. Most of them are just a call center, which makes it difficult. They don’t know how to sell the product because they don’t know how to deal with the product. Robin: Also, what they are selling most of the time, is a one-sided bouquet and yet, it’s presented to look like it’s all the way around. They can be very deceiving, especially with sizes. It may look like a big bouquet but it’s really just a few flowers in a bubble bowl. Judy: I end up putting in extra flower or two, because I don’t want my flowers to not look nice. I want my customer’s to be happy on my end too. MV

MN Valley Business • september 2014 • 27

t 201 Star Stree Suite 100

(One Block Nor

th Of Grizzly’s)

Mankato, MN

56001

65 (507) 345-69 -5:00 Mon-Fri 8:30

YOUR FUll SeRvice

Your leading company in delivery of: fuels, gasolines and lubricants for all your agricultural and construction needs.

PRinting centeR!

E-mail: gdylla@minutemanpress.com www.mankato.minutemanpress.com

Legendary Customer Service

Four Generations of Experience

COMMERCIAL ROOFING Flat Roofing • Standing Seam Roofing Roof Coatings (Flat & Metal Roofs)

Three time award winner 2011 - 2012 - 2013

Mankato and Surrounding Areas Mark: 507.779.6639

55177 210th Lane Suite 200 Mankato

507-386-0404 Mon.-Fri. 8am-5pm www.freybergpetroleum.com

(south on Hwy 169, just past the Hwy 68 Junction, next to Gag’s Camper Way)

FREE TIME

IS A LUXURY.

Clie Job Pub Size Act Due

Managing a business is a big job. Whether you’re a start-up looking to grow or you’ve been around for decades, we’ll provide the personalized tools and financial support you need to help you achieve your business goals. Come see us today.

WORK HARD. BANK EASY.

28 • september 2014 • MN Valley Business

14-BRE-007_Print_MNVB_Free_75x495_0807.indd 1

6/3/14 2:36 PM

Construction/Real Estate Residential building permits Mankato

(in thousands)

- 2013 - 2014

11000

Residential building permits North Mankato

- 2013 - 2014 (in thousands)

3000

$1,989

$4,331

8250

$3,297

$1,797

2000

5500

1000

2750 0

Source: City of Mankato

- 2013 - 2014

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

208 253

275

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

Housing starts: Mankato/North Mankato - 2013 - 2014 29 13

165

110

55 J

Source: Realtors Association of Southern Minnesota

Source: Cities of Mankato/North Mankato

Commercial building permits Mankato

(in thousands)

- 2013 - 2014

Commercial building permits North Mankato

- 2013 - 2014 (in thousands)

2000 1500

Interest Rates:

500 O

fixed-rate mortgage — 2013 — 2014

5.0

4.4%

4.5 4.0

4.1%

3.5 F

Source: Freddie Mac

Source: City of North Mankato

5.5

$263 $273

1000

$11,842 $10,939

ent: Bremer b Number: 14-BRE-007 Source: City of Mankato blication: MN Valley Business e: 7.5” x 4.95” 30-year tive Date: Sept 2014 e Date: 08/07/2014

3.0

220

80000 70000 60000 50000 40000 30000 20000 10000 0

Source: City of North Mankato

Existing home sales: Mankato region

Foreclosures: 2013 Year End County

2012

2013

Percent change

Blue Earth Brown Faribault Le Sueur Martin Nicollet Sibley Waseca Watonwan

126 37 46 98 42 49 58 57 17

101 19 27 70 25 43 39 36 24

-20% -49% -41% -29% -40% -12% -33% -37% +41%

Source: Minnesota Foreclosure Partners Council C. Sankey

MN Valley Business • september 2014 • 29

■

Agricultural Outlook

By Kent Thiesse

Important decision time for new farm program

arm operators and land owners will have several one-time choices to make in the coming months regarding their farm program participation for the 20142018 crop years. The new farm program options are part of the commodity title of the New Farm Bill. Most commodity programs will be in effect for the 2014 crop year. Since the commodity farm program choices are for five years, land owner approval and signatures will be required on all cash and share rented farm land. Farm program sign-up will take place at local Farm Service Agency offices, and will likely be separated into two parts. The first sign-up period will likely start in early fall and will be for the purpose of reallocating crop base acres, and potentially updating farm program payment yields. The second sign-up period at local FSA offices will be to make the actual farm program choice on each FSA farm unit, for each eligible commodity. This sign-up period will likely start in late fall of 2014, and continue into early 2015. Land owners that do not farm their land are not typically involved in farm program decisions at FSA offices, as those decisions are usually made by farm operators. About twothirds of the crop land in south central Minnesota is under some type of cash rental agreement. Once a land owner has made their choices for base acre reallocation, updating program yields, and the farm program choice, those decisions will continue on through 2018, regardless if the land is rented to another farm operator in future years. The farm program decisions will also be in place through 2018, if the land is sold in the next few years, which makes these decisions extremely important to land owners. Following are some of the choices that producers and land owners will need to consider at the farm program sign-up times:

Crop base acres All farm program payments for both the new ARC and the PLC programs will be calculated on crop base acres, rather than on year-toyear planted crop acres. Land owners will be given a one-time opportunity to update crop base acres on a FSA farm unit, based on the average planted acres from 2009-2012, or they can choose to continue with the crop base acres that existed under the last Farm Bill. The total reallocated crop base acres for 201418 cannot exceed the total crop base acres that existed in 2013 farm program. Many farm operators planted more corn from 2009-2012, so there may be an opportunity to increase corn base acres on some FSA farm units.

Farm program payment yields Producers that chose the new PLC program will have a choice of keeping their existing counter-cyclical payment yields on a farm unit from the previous farm program, or updating the payment yields. Updated yields will be 90 percent of the 5-year (2008-2012) average crop yields for eligible each crop on a farm unit. The most recent county 5-year average yield for a crop, dropping the highest and lowest yields, will be used for the County ARC program yields. ARC or PLC program Producers and land owners will have a one-time choice between the Agriculture Risk Coverage (ARC) program, and the Price Loss coverage (PLC) program, for each eligible crop, on each individual FSA farm unit. If no choice is made, the FSA farm unit will be placed in the PLC program for 2015-2018, and that farm unit will have no farm program coverage for the 2014 crop year. The ARC program is based on actual crop revenue (yield and price), as compared to average benchmark crop revenues. The PLC program is based on only crop reference prices. PLC program payments will be

30 • september 2014 • MN Valley Business

made if the 12-month market year average price falls below the established reference price (target price) for a given crop. The marketing period for the 12-month price for corn and soybeans is Sept. 1 in the year that the crop was produced until Aug. 31 of the following year. PLC payments would be made in October of the following year, and will be made on 85 percent of eligible crop base acres for a given crop. County or individual ARC program Producers and land owners that choose the ARC program option will have another choice to make, whether to have benchmark revenues and potential ARC payments determined by county-level yields or individual farm-level yields. There are several aspects to consider regarding this decision. County program payments will occur for a given crop when the actual county-level calculated revenue is below 86 percent of the county benchmark revenue for that year. The maximum county coverage is 10 percent, from 76 to 86 percent, of the county benchmark revenue for a crop, with potential payments made on 85 percent of crop base acres. The farm level yields program combines the “weighted” revenue for all crops on a farm unit to calculate payments, rather than the cropspecific approach used in the county program. Payments in individual field program are also limited to 10 percent of the “weighted” benchmark revenue for the farm, with potential payments made on 65 percent of crop base acres. Bottom line Producers and land owners that opt for ARC-county program have the opportunity to choose between the ARC-county program and the PLC program for each eligible crop on a FSA farm unit. Those choosing the ARC-individual field program will need to have all crops on the

Agriculture/Agribusiness Corn prices — southern Minnesota

(dollars per bushel)

— 2013 — 2014 8

— 2013 — 2014 20

$5.62

$13.82

12 8

Iowa-Minnesota hog prices

Minimum prices, class 1 milk Dollars per hundredweight

— 2013 — 2014

25.2

$107.46

112

23.4

21.6

$20.71

19.8

$99.75 M

$24.82

126

Source: USDA

Milk prices

185 pound carcass, negotiated price, weighted average

— 2013 — 2014 140

$11.44

$3.18

Source: USDA

(dollars per bushel)

Soybean prices — southern Minnesota

Source: USDA

18.0

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

farm unit in that program. Any potential PLC or ARC payments for the 2014 crop year will not occur until October, 2015. Landlords on cash rental farms will be a big part of the decision making process. A “no decision” on reallocating crop base acres and FSA payment yields, will result in continuation of the existing base acres and payment yields. A “no decision” on the farm program choice on a FSA farm unit will result in that farm unit being in the PLC program for 2015-2018, with no farm program coverage for 2014. This error could result in the farm operator missing an ARC payment of as much as $75$85 per corn base acre for the 2014 crop year. Not making the correct base acre, payment yield, or farm program choice could potentially result in loss of more ARC or PLC payments in future years. MV

Source: USDA. Based on federal milk orders. C. Sankey

Now your area land specialists are closer than ever. We’re expanding to serve you better. • Appraisals • Agricultural Property Management • Agricultural Real Estate Sales • Commercial Property Management

www.ummc.co

• Commercial Leasing New Ulm, MN 507.359.2004

Olivia, MN 800.545.6227

New Hope, MN 877.535.4914

Faribault, MN 866.332.8211

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

MN Valley Business • september 2014 • 31

Employment/Unemployment Initial unemployment claims

Minnesota initial unemployment claims

Nine-county Mankato region Major July Industry ‘13 ‘14 Construction Manufacturing Retail Services Total*

99 240 38 212 589

Percent change ‘13-’14

56 139 44 169 408

-43% -42% +16% -20% -31%

Major Industry

July

Construction Manufacturing Retail Services Total*

‘13

‘14

Percent change ‘13-’14

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

1,969 2,312 1,278 5,011 10,570

-17% -30% -0.2% -14% -17%

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

- 2013 - 2014

Nine-county Mankato region

126,757 126,871

30000

2000

10000

1000

Local number of unemployed

- 2013 - 2014

Nine-county Mankato region 10000

Minnesota number of unemployed

- 2013 - 2014

152,775 130,497

150000

5,600

6000

100000

4000

50000

2000 0

200000

6,473

8000

2,860 2,892

3000

20000

00000

- 2013 - 2014

(in thousands)

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) July

2013

2014

4.4% 55,200 2,515

3.8% 56,128 2,189

Source: Minnesota Department of Employment and Economic Development

32 • september 2014 • MN Valley Business

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

July 2013 4.6% 4.4% 5.1% 5.6% 5.1% 4.0% 4.5% 5.5% 6.3% 5.0% 5.0% 7.7%

July 2014 3.9% 3.9% 4.8% 4.8% 5.2% 3.4% 3.6% 4.9% 5.2% 4.2% 4.3% 6.5% C. Sankey

Retail/Consumer Spending Vehicle Sales Mankato — Number of vehicles sold - 2013 - 2014

987 1200

(In thousands)

- 2013 - 2014

500

1,111

1000

400

800

300

600

$413

$425

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

40000

$32,184

51000 34000

20000

17000

10000 J

— 2013 — 2014 $3.56

4 3 $3.35

2 1 J

Gas prices-Minnesota — 2013 — 2014

$3.48

4 3 $3.35

2 1 0

Source: City of Mankato

Gas prices-Mankato

Source: City of Mankato

$58,043 $60,700

68000

30000

- 2013 - 2014

85000

60000

$37,728

Mankato food and beverage tax

- 2013 - 2014 50000

Source: Sales tax figures, City of Mankato

Stocks of local interest

July 15

Aug. 13

Percent change

Archer Daniels

$47.54

$50.04

+5.3

Ameriprise

$122.30

$119.95

-2

Best Buy

$28.71

$29.57

Crown Cork & Seal

$51.10

$45.96

-10

Fastenal

$16.09

$17.19

+6.8

General Growth

$44.99

$44.38

-1.4

General Mills

$24.08

$24.10

+0.1

Eventis

$52.93

$52.55

-0.7

Hutchinson Technology

$2.09

$3.61

+73

Itron

$40.52

$39.58

-2.3

Johnson Outdoors

$24.32

$26.49

$145.06

$141.80

-2.2

Target

$60.71

$58.26

-4

U.S. Bancorp

$43.30

$41.36

-4.5

Wells Financial

$26.00

$24.30

-6.5

Winland

$0.75

$0.70

-6.6

Xcel

$31.54

$30.66

-2.8

Source: GasBuddy.com C. Sankey

MN Valley Business • september 2014 • 33

Advancing Business for a Stronger Community

AGRICULTURAL PRODUCTION & THE ECONOMY By John Considine, Business Development Resource Manager at Greater Mankato Growth

Greater Mankato Growth

Departing from any community in southern Minnesota, you are greeted by acres and acres of crop fields. This sight may seem commonplace to a native of the area, however the scale of our agricultural production may surprise visitors. In a 13+ county region surrounding the Mankato-North Mankato Metropolitan Statistical Area (MSA), coined the Greater Mankato Agricultural Region, we have eight of the top 10 soybean producing counties in the state, seven out of the top 10 hog producing counties in the state (including the top four) and six of the top 10 corn producing counties in the state (including the top four). Not to mention the 11 ethanol plants that produce 933 million gallons per year. What many residents may not know is the impact this agricultural production has on our local economy. As the only MSA (Blue Earth and Nicollet Counties) within this 13+ county area, we see nearly $1.5 billion in economic activity resulting from crops and livestock. This $1.5 billion in economic activity is generated from the agricultural income of area farms. The Mankato-North Mankato MSA has 33% more agricultural income than the next closest MSA (Saint Cloud). Examples of this economic activity include the purchase of equipment, supplies and services that filter through our community. Engineers are hired for addressing field drainage, contractors are hired for the construction of facilities and many financial institutions have a notable portion of their portfolio tied to agricultural clients. No other greater Minnesota MSA has this size of activity.

34 september • MN Valley Business 1 •• JANUARY 20132014 • MN Valley Business

So what are we producing that is generating this income? Corn and soybeans of course but what really jumps out when comparing MSAs is livestock production. The Mankato-North Mankato MSA nudges ahead of Omaha, Nebraska by nearly $19 million. We have hogs and they have steers; but what really matters is that $19 million in production. Mankato-North Mankato is the metropolitan hub for agriculture, an agricultural-business epicenter. With an annual production of 4.7 million hogs, 107 million bushels of soybeans and 511 million bushels of corn, it only makes sense that food processors and others in the supply chain locate here. Names such as Birds Eye, ConAgra, Davisco, Del Monte, Fairmont Foods, Jack Links, Kraft, Hormel, Seneca, Schwan’s, Tony Downs and Tyson all have facilities within the Greater Mankato Agricultural Region. Soybean processors CHS and ADM jointly make the MSA the largest soybean processing community in North America. The region even has manufacturers that assembe equipment such as Fantini in Le Center and AGCO in Jackson. Greater Mankato education also recognizes the importance of ag and the continued growth potential. South Central College (SCC) hosts the Southern Minnesota Center of Agriculture and an Agricultural Symposium in which more than 450 people attended in 2013. SCC also hosted a National Professional Development event for educators to learn how to effectively teach Ag, Food & Natural Resources, training 65 educators from 15 states in Curriculum for Agricultural Science Education (CASE) Institute. There are several ag-based programs in the area. The Southern Minnesota Children’s Museum features an agfocused educational and learning resource for families, including their future 2,000 square foot indoor Grow It Gallery, Farmyard and Seed to Table Café as well as outdoor courtyard that will bring families face to face with the real story of agriculture. These factors point to our region being a national leader in agriculture – an agricultural epicenter. Many farm or ag festivals celebrate agriculture, but it needs to be recognized in more “mainstream” channels. A brand needs to be developed in conjunction with a physical investment. Agricultural campuses or parks, with investments from stakeholders with a vested interest in the area’s economy has been mentioned. This could include multiple sectors including producers, education, festivals and research and development. By having the right partners at the table, our area’s agricultural prowess can be recognized worldwide.

Greater Mankato Ranks

on FORBES

Best Small Places for Business & Careers

Forbes recently released its list of “Best Small Places for Business and Careers,” ranking Mankato 3rd best in the United States. Forbes considers a “small place” to be a Metropolitan Statistical Area (MSA) with a population less than 250,000. This ranking is up seven spots from the 2013 ranking of 10th in the nation; in 2012 the MSA ranked 11th in the nation; and in 2011 it landed at 25th on the same list. Congratulations to the business community of Greater Mankato on this accomplishment and honor. For more rankings and ratings visit greatermankato.com/rankings-ratings.

Greater Mankato Growth MN Valley Business • september 2014 • 35

Cavaliers Growth in Greater Mankato NEW LOCATION

NEW BUSINESS

Mankato Mattress Man 801 South Riverfront Drive, Mankato

Friesen’s Bakery and Soup Bar 515 North Riverfront Drive, Mankato

Greater Mankato Growth

NEW BUSINESS

Cavalier Calls on the Newest Greater Mankato Growth Members

ShoGun Sushi and Hibachi 1901 Madison Avenue, Suite 315, Mankato shogunn.com

NEW BUSINESS

Southern Minn Digital 514 Central Avenue, Faribault southernminndigital.com

Profile by Sanford 511 Holly Lane, Suite 120, Mankato

Proventus CrossFit 201 North Victory Drive, Suite 271, Mankato

True Facade Pictures truefacadepictures.com

36 september • MN Valley Business 1 •• JANUARY 20132014 • MN Valley Business

Mankato ers

CELEBRATE MINNESOTA MANUFACTURERS WEEK Each year, the Economic Growth Collaborative of South Central Minnesota is proud to host the Tour of Manufacturing as part of Minnesota Manufacturers Week (October 23 - 25). The event is similar to a “Parade of Homes” with community members able to stop by any participating manufacturer throughout the day to take a tour, learn about the business and what is manufactured, as well as the career opportunities available now and in the future. The 2014 event is sponsored by Eide Bailly and South Central College and will take place on October 23, from 12 - 6 pm. More information can be found on our website tourofmanufacturing.com.

5:00 - 7:00 p.m. September 2 October 7 November 4

Chankaska Creek Ranch & Winery Schwickert’s Tecta America Mankato Clinic

2014 Business After Hours Sponsored by:

July Business After Hours hosted by Pioneer Bank