// JANUARY 2019
COVER STORY
24 ND Business Guide
There are many public sector programs and organizations in place to help North Dakota businesses grow, expand and succeed in the marketplace. We have highlighted some of these resources available to business owners throughout the five stages of business.
FEATURES 10 Editor's Note 14 Fargo INC! Editorial Board 102 Coffee with Kara Kara Jorvig hits the ice with United States Attorney for the District of North Dakota, Chris Myers to discuss his high profile job and leadership philosophies. 108 The Transformation of Recruitment: How to drive recruitment in a candidate-driven market Trends and tips for recruiting in the current marketplace 110 Fresh Faces, Fresh Start The Avalon shares tips for bouncing back from a bad reputation
24
114 Experts for Rent Why hiring a business consultant may be the best move you make this year 121 North Dakota, Meet the Internet How 14 independent rural broadband telephone companies came together to bring the internet to North Dakota 126 The Gift of Reflection Reflecting on 2018 and the lessons we can draw from it 128 Four Debt-Free Ways To Fund Your Startup 133 My Journey To The White House And Reflections On George H.W. Bush Craig Whitney shares his experience working with President George Herbert Walker Bush
110
136 Ladyboss of the Month: Nancy Kelly 139 Avoid Falling Victim to a Digital Ransom Attack 142 Being an Owner Doesn't Guarantee You a Job
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North Dakota
Is A Great Place To Live And Do Business
W
e are so excited to be sharing this issue across the entire state of North Dakota. Small business is the heart and sole of our economy. From agriculture to technology to restaurants and boutiques, you are the businesses that drive the state forward. Our mission is to provide resources and stories that provide valuable information and inspire the CEOs and founders of all the great local companies. This month, we have put together a North Dakota Business Resource guide. According to U.S. News & World Report, North Dakota ranked the top state for overall quality of life. Therefore, it comes as no surprise that small businesses are thriving all across the state. Many of us are employed by small businesses (thanks, Spotlight!), shop and eat at local small businesses and have children or grandchildren in a local daycare. Researching for this issue was a very educational experience for me. Here are my favorite five facts about North Dakota business that I learned through putting together this issue.
Jennifer Gades Associate Publisher
JenniferGades@SpotlightMediaFargo.com 8
JANUARY 2019
of North Dakota Businesses are small businesses. (72,723)
2
210,948 North Dakota employees - or 57.7 percent of our workforce - are employed by small businesses. *North Dakota Small Business Profile, 2018, SBA Office of Advocacy
Self-employed income earners at incorporated businesses reported a median income of
$55,127 in 2016
In 2015, North Dakota had
3 $3.4B
Likewise, selfemployed income earners at unincorporated businesses reported a median income of $36,377. *North Dakota Small Business Profile, 2018, SBA Office of Advocacy
1,556 companies - or 81.7 percent - of these exports were from small firms. *North Dakota Small Business Profile, 2018, SBA Office of Advocacy
in total exports
In 2012, there were
4 68,270 firms reported in North Dakota.
5
Of these, 37,016 were solely owned by men and 20,316 were solely owned by women. *United States Census Bureau Quick Facts - North Dakota
The average number of employees per businesses that are part of the National Federation of Independent Business in North Dakota is
10
*North Dakota Small Business in Facts and Figures, NFIB
about us
This magazine isn't for corporate America.
A
t Fargo INC!, we're all about small business. We feel our core demographic is businesses with 2-40 employees. These companies are often owned by people who have a real passion, no MBA and rarely have a business background. If that's one of you, we know what you're going through. That's why we created this magazine for you. And that's why we're mailing this magazine to every business in North Dakota with 2-40 employees. In here, we tried to jam pack as much actionable resources and information as possible. When working with the government, it can be hard to cut through all the bureaucratic red tape. That's why we tried to spell it out for you. When reading the cover story, ask yourself: What information can I use to help my business and employees prosper?
If we missed something, let us know. This whole magazine is an experiment to see if a statewide business magazine is sustainable. If you think this content is important and you want more of it, please let us know by emailing us at FargoInc@ SpotlightMediaFargo.com or by hitting us up on social media. Cheers, Andrew Jason Editorial Director
About Fargo INC! Fargo INC! is a monthly business magazine produced by Spotlight Media that covers all things business in the Fargo-Moorhead area. Each month, it covers a variety of topics, ranging from entrepreneurship and startups to business resources and general economic development. All of this coverage is presented in an engaging, fun and positive manner. A significant percentage of the magazines are mailed directly to business leaders across the Fargo metro.
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EDITORIAL BOARD We at Fargo INC! want to make sure our content is unbiased and reflects the FMWF business community. That's why we meet regularly with our five-member editorial board to discuss local business issues and trends and ensure we are living up to our core values.
JOHN MACHACEK
SVP of Finance and Entrepreneurial Development
Greater FM Economic Development Corporation
A fun and tangible way to give cheers to the past 2018 and the future 2019 is to join many of us at Emerging Prairie's 1 Million Thanks event on Jan. 31 at the Fargo Air Museum. This event is always one of my favorites of the entire year. Registration can be found at EventBrite.com.
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CRAIG WHITNEY President and CEO
GREGORY WALD
Communications Manager
TIM BEATON
Executive Director
FMWF Chamber of Commerce
Moore Engineering, Inc.
FM Area Foundation
As this issue of Fargo INC! discusses workforce across the state, we’re working hard at The Chamber to solve the employment gap in our local region. There are a variety of initiatives in the works that we feel confident will slowly begin to connect K-12, higher education and businesses as we invest in strategies to identify and train workers to fill employers’ openings. By the time you’re reading this, we will have just held our State of the Cities event where our local mayors discussed a variety of issues affecting our cities. Each year, we poll the audience to find out what they believe is the most important issue in our metro. Check our blog to find out if workforce once again topped the list. To learn more or get involved with our efforts, please call our office or visit our website.
North Dakotans are lucky for many reasons – one being that our state legislators are so accessible. Three simple steps will help you make a real impact if you want to get involved during the legislative session: 1. Learn as much as you can about the issues that matter to you. 2. Listen to opposing viewpoints. 3. Connect with your legislators. Go to ND.gov and start clicking to find out who your legislators are (if you don’t know) and get their contact information, or find their social media pages. They will appreciate hearing from you. Remember what Theodore Roosevelt said about being in the arena. Keeping our generational promise depends on informed, engaged citizens participating in the process.
At the FM Area Foundation, we want to thank our generous donors and community partners for all their support in 2018. It was a fantastic year as we launched a new online giving tool called the FM Area Caring Catalog to benefit 78 local charities, set up 26 new charitable funds for the benefit of our communities and beyond and created the Cass-Clay Community Land Trust to ensure affordable homes are available in the Fargo-Moorhead area. As a community foundation, we exist to assist donors with their charitable giving and provide grants to nonprofits and scholarships to students. The FM Area Foundation has been connecting people and purpose since 1960, and we will continue to do so in 2019! Please reach out to us if you have questions about your charitable giving.
KRISTI HUBER
STEVE DUSEK
PAT TRAYNOR
United Way of Cass-Clay
Dakota Business Lending
Dakota Medical Foundation
“Great companies don't hire skilled people and motivate them; they hire already motivated people and inspire them.” Simon Sinek, Start with Why
Small business is built by the work of exceptional people, superior products and services and a passion for creating something that is bigger than any single person. There is an abundance of ways in which Dakota Business Lending works to help create stable small businesses across North Dakota and Western Minnesota. As our team inspires local entrepreneurism and enhances the connection between the borrower and the lender, owners and their organizations grow into trusted pillars of their communities and are equipped to make their own impact in the regions they serve. We are honored to work with so many small businesses and join them on their journey to success.
There’s no better time than Giving Hearts Day season to plant the seeds of a giving culture at your workplace! One new way your business can get involved this year is with official Giving Hearts Day gift cards, which can be used on the day of the event to donate to any of the 450-plus participating charities.
President
As we all continue to work toward maximizing our potential as businesses and organizations across the state of North Dakota, we know that focusing on leadership development is key. United Way is your partner when it comes to inspiring and activating the next generation of leaders and strengthening community-minded corporate culture through volunteer opportunities and meaningful ways to give back. Thank you to Mike Dragosavich for being our speaker at our most recent United Way of Cass-Clay Emerging Leaders event and sharing your perspective on the power of being a resilient leader.
President & CEO
Executive Director
With a $10 minimum, you can purchase the cards in any amount your Giving Heart desires and can gift them to your employees or customers. You can also sponsor a local school or classroom and encourage young people to build healthy giving habits. To purchase cards, stop into Dakota Medical Foundation at 4141 28th Ave. S. in Fargo or call us at 701-271-0263. For questions about school or classroom sponsorship, contact Giving Hearts Day Assistant Director Amanda Sayre at ASayre@dakmed. org .
JANUARY 2019 Volume 4 Issue 1
Fargo INC! is published 12 times a year and is available at area businesses and online at FargoInc.com.
Publisher Mike Dragosavich Drago@SpotlightMediaFargo.com
Chief Operations Officer Steve Kruse CREATIVE
Editorial Director Andrew Jason Andrew@SpotlightMediaFargo.com
Associate Publisher Jennifer Gades FargoInc@SpotlightMediaFargo.com
Art Director Sarah Geiger Designer Sarah Stauner Creative Director Simon Andrys Director of Photography Hillary Ehlen Contributors Andrew Jason, Jennifer Gades, Steve Dusek, Craig Whitney, Brenda Johnson, Josh Christy, Jamie Maguire, Laura Caroon Social Media & PR Coordinator Ariel Holbrook Web Editor Jessica Kuehn Digital Marketing Specialist Tommy Uhlir ADVERTISING
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This month, we've gathered photos from our archives to create the end-all-be-all mood board for what we are calling the 2018 Design & Living Magazine Dream Home. Now, this house doesn't really exist, but these meticulously curated mood boards will provide you with home inspiration that will be relevant for years to come. Also in this issue, local experts predict which design trends will be taking over in 2019.
Just in time for Dakota Medical Foundation's Giving Hearts Day on February 14, Fargo Monthly is excited to dedicate a whole issue to the local non-profits and charities in our area. Read about different organizations and learn how they are making a positive impact on our community and those who live in it.
Winter is here, Bison Nation. The most cold and chilling time of year is redeemed thanks to North Dakota State winter athletics. Whether you enjoy football, basketball, track and field or wrestling, these Bison sports are sure to keep you warm this winter. As for the athletes? They are ready to go to war with their nemesis on a daily basis.
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Fargo INC! is proud to bring you the total North Dakota business guide to help your business and the government work better together. How To Use This Guide
O
ur mission is to celebrate the local business community by featuring profiles and advice to help business leaders grow and succeed in their endeavors. In the past, we have focused on the FargoMoorhead region. However, we realize that our "local business community" stretches much further than the Fargo metro area. In this guide, we're reaching out to small businesses across the entire state to offer a resource that we haven't found in one succinct place. The government isn't here to restrict us or just apply regulations on how we do things. There are many public sector programs and organizations in place to help North Dakota businesses grow, expand and succeed in the marketplace.
We want to act as a resource and help you grow as well, so in the following pages, you will find our North Dakota Business Resource Guide. We have outlined information about public sector programs into the main five stages of business: 27 Start-Up 46 Established 61 Growth 73 Expansion 89 Exit
Take a moment to evaluate your current business plan and goals for the future. Identify which stage you are currently in. We challenge you to find at least two resources you're not currently using but could benefit from. Take action. Get to know these public sector programs that are here to help you conquer your goals. When you accomplish your current goals, move to the next stage of business and make new ones. The world is at your fingertips, and the state is here to help you reach it. Disclaimer: Everything presented in here is not legal advice. Always talk to a law professional with questions. FARGOINC.COM
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STARTUP STAGE TABLE OF CONTENTS when 27 Requirements hiring employees
28
Checklist of things you need to do with the government Business counseling
30-33 services
SBA learning center
35 courses
Available working
36 spaces
What you need to
38-39 know about taxes when starting a business Which business
40 entity is best for you? Operational
42-43 regulations
You have long dreamed of running your own company. You have refined what product(s) you want to offer and have a clear vision for what you want to do. It is time to make it a reality and deal with all the legalities of becoming a legitimate business. Twenty-five percent of businesses do not make it past five years, so making sure you set yourself up for success at the beginning is very important.
FARGOINC.COM
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Assembling Your Team 01
Required documentation you'll need when hiring employees. Whenever you hire a new employee, there are certain state and federal forms that must be filled out. If you miss even one of these, you may have fines that build up at the end of the year, and it can be a costly oversight. Here's what you must do for each new employee:
02
Have the employee fill out a Employees Tax Withholding Form W-4. This tells the government how much tax to withhold from their paycheck. You can find these at irs.gov.
You should fill out the Employers Quarterly Federal Tax Return Form 941. This reports what taxes are withheld from your employee's check and also pays your portion of the social security and Medicare taxes. You can find the list of where to file your taxes at irs.gov/ filing/where-to-file-your-taxes-forform-941
04
05
Make sure you are in compliance with both state and federal Labor Laws. Some of these laws include paying minimum wage, prohibiting discrimination and giving breaks. While it's not an extensive list, you can find a list of laws you're required to follow at webapps.dol.gov/elaws/ firststep.
03 The North Dakota Transmittal of Wage and Tax Statement Form 307 is required if you didn't file online and have an open withholding account. If you filed a W-2 electronically, this isn't required. If you're not sure, contact the Office of State Tax Commissioner.
06
Even if you don't offer health benefits, you are required to inform your employees that benefits are available through the Marketplace. There is a lot information at healthcare.gov/smallbusinesses.
The proof of U.S. Citizenship Form I-9 is filled out by your employee and verifies their identity and that they are authorized to work in the U.S. They will be required to show official identification that may include a drivers license, passport or employment authorization document card. Learn more at uscis.gov/i-9.
08
Display required Employer Posters. Federal and State law requires you to hang posters that inform your employees of their rights. These posters are available free of charge at nd.gov/labor/requiredemployer-posters.
As an employer in North Dakota, you are required to obtain worker's compensation insurance through North Dakota’s Workforce Safety & Insurance (WSI). You can file for this insurance, access necessary forms and receive tips on reducing your risk for claims at workforcesafety.com.
09
10
11
12
07
Make sure your company is in compliance with all healthy safety standards as outlined by the U.S. Occupational Safety & Health Administration (OSHA). OSHA enforces training and education, and you can read more about these standards at osha.gov.
Obtain unemployment insurance, which protects employees who meet state requirements and find themselves unemployed through no fault of their own. Learn more at jobsnd.com/ unemployment-business.
Disclaimer: Not legal advice. Always talk to a low professional with questions.
Within the first 20 days of your employee's first day of work, you must report them to the State Directory of New Hires. There are many easy ways of reporting your hire that can be found at childsupport.dhs.nd.gov/employers/ new-hire-reporting.
The wage and Tax Statement Form W-2 is required for each of your employees to ensure the correct amount of income, social security or Medicare tax was withheld. You can obtain this form at socialsecurity.gov/employer. FARGOINC.COM
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have you properly set up your business?
You have long dreamed of opening your own business, being your own boss and contributing to the economy with your fantastic ideas. You're finally making the leap and ready to pick up the phone, start networking and hit the ground running. Before you start changing the world and making millions, here is a checklist of legalities that you should make sure you have completed.
Trade Name Registration Your business plan is in place, and you have a name picked out. It's time to check with the North Dakota Secretary of State's Office to make sure your chosen business name is available.
Tax Permits North Dakota Business License Information Many businesses, depending on your industry, require special state or local licenses in order to legally operate. Learn more at nd.gov/businessreg.
Apply for Permits Whether you will be conducting business inside city limits, outside or both, you will need to contact the city or county auditor to apply for the appropriate permits and zoning ordinances. We recommend looking at city and county's websites for specific required permits.
Register with the U.S. Internal Revenue Service Visit irs.gov/smallbiz to obtain your Employer Identification Number. You can obtain a EIN immediately on IRS.gov at no charge. 28
JANUARY 2019
You can find the applicable required tax permits for your business at nd.gov/tax/user/businesses/ overview/new-businesses. These may include sales and use tax, income tax, alcohol tax, telecommunications tax and more. You'll need your EIN for these forms and tax applications.
Insurance What if a customer falls on the ice outside of your building? It might be obvious but cutting corners with insurance can cost you a lot in the long run.
Protect your unique products and logo It's time to brand and promote! Protect your brand by obtaining the necessary patents, trademarks and copyrights. U.S. Patent and Trademark Office: uspto.gov U.S. Copyright Office: copyright.gov N.D. Secretary of State: nd.gov/sos/businessserv
business counseling
learn about
score
The SBA has helped more than 10 million entrepreneurs through their SCORE program. At SCORE.org, you can access workshops, online courses and webinars and connect with professionals across the state. Course topics vary to cover all your business needs, including creating a business plan, managing cash flow and marketing. SCORE mentors are unique because they are experts in their industry and have realworld experience. They have likely been through the challenges you are facing as well. You can get paired with a mentor at SCORE.org.
success story
kelly dockter
Blink Eyewear Bismarck After 16 years working as an optician, Kelley Dockter thought it was time to open her own eyewear shop. A supportive community in Bismarck helped her get started, but she turned to SCORE for help with her business plan.
The North Dakota branches of SCORE can be found at: Minot 1925 Broadway S. Ste. 2, Minot 701-852-6883 Grand Forks 1501 28th Ave. S, Grand Forks 701-746-5851 Fargo 657 2nd Ave. N. Room 360, Fargo 701-239-5677 Bismarck-Mandan 1200 Memorial Hwy/PO Box 5509, Bismarck 701-328-5861
"I knew a lot about glasses," Dockter said. "I didn't know about the business side of it." After a friend recommended SCORE, Dockter attended a startup workshop and teamed up with mentor Duane Sorby to work on her business plan. "It was the projections and numbers for my business plan I really struggled with," Dockter said. "And Duane, being an accountant, helped me tremendously." After completing her business plan, Dockter impressed a local banker who was able to help her obtain financing through an SBA loan. "I would not be anywhere without them," Dockter says of Sorby and her local SCORE office. "They were absolutely wonderful. I can't tell enough people about their services." * Courtesy of SCORE
business counseling
small business development centers Small Business Development Centers (SBDC) With locations across the state of North Dakota, the SBDC is a great place to head for business counseling services. These services are offered at no-cost to for-profit businesses and offer services for starting, managing and growing your business. They even have resources to help you with cybersecurity and human resource regulations. All services are free and confidential. In 2017, the SBDC helped more than 1,000 clients across the state, and 605 new jobs were attained in North Dakota. With 10 centers serving 53 counties in the state, more than $52 million of client capital formation was earned with the help of the SBDC.
Locations in... • Bismarck • Bowman • Devil's Lake • Dickinson • Fargo • Grand Forks • Jamestown • Minot • Wahpeton • Williston
success story
success story
tim ell
Corey Oberlander
Zorell's Jewelry opened in 2005 and is one of Bismarck's premier jewelry retailers. When they first opened, they found their biggest struggle was recruiting new clientele. Ell turned to the ND SBDC to help him face some of the obstacles new businesses often face. “I knew my weaknesses, and I wanted to work on them. Sales projections, ROI, turnover, COGS, were all things I needed to work on, and I needed someone to teach me. I worked with Nancy and still do from time to time, even now,” Zorell said.
Cory Oberlander saw a need for a full-service fitness center in his community, but he had several obstacles to overcome before he could bring this idea to a reality. "The Fargo SBDC was instrumental in helping complete a detailed cash flow that was then submitted to our bank for financing. Being a start-up business, it was very important for us to give the bank a level of comfort that the information and projections we provided were accurate. The ND SBDC provided that level of comfort," says Oberlander.
Zorell's Jewelry Bismarck
In 2004, after meeting with Nancy Kroggen from the Bismarck SBDC, they were able to get the complete and accurate data needed to present to the bank and secure an approval for the business loans. Without the ND SBDC, Ell wasn't sure if their loan would have been approved. He recommends ND SBDC services because the staff have good insight, and the program educates business owners at no cost. He says it’s especially great for new businesses because “when you first start out, you don’t have a lot of disposable cash, and getting all the help from ND SBDC at no cost was tremendous.”
TruCore Fitness Casselton
Since opening in April 2018, TruCore has received positive feedback and had a large impact on the revitalization of downtown Casselton. There has recently been a renewed interest in downtown Casselton investments. "You can feel the momentum building and it's bringing with it a renewed vibrancy and energy to downtown," he said.
* Courtesy of SBDC
Learn more at ndsbdc.org FARGOINC.COM
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business counseling
nd women's business center The North Dakota Women's Business Center is partially funded by the SBA and receives matching funds from the North Dakota Department of Commerce to help empower women to start and grow businesses. A second federal grant was recently awarded to the NDWBC to expand these services to women on the eastern side the state.
success story
Nexus Innovations Bismarck
In 2000, Lorie Pope opened the first office of Nexus Innovations in Bismarck. She and co-founder, Bob Pope, had a dream of creating a high level strategic consulting company that provided leadership and delivered success. Lorie first learned of the services at Center for Technology & Business (CTB) through an introduction to their founder, Tara Holt. She says "Looking back, I had no idea of the significance that CTB would play in my life." CTB is the SBA's Women's Business Center (WBC) for North Dakota. WBCs seek to 'level the playing field' for women entrepreneurs who still face unique obstacles in the business world. Lorie registered for a class through CTB and says it was exactly what she needed, "From that class, I didn't just gain confidence to use a computer, but valued making contact with other women in business."
North Dakota's Women Business Center 2720 E. Broadway Ave., Bismarck 701-223-0707 trainingnd.com 32
JANUARY 2019
Soon after the class, Lorie began the process of becoming a North Dakota Certified Woman Owned Business through CTB. "Going through that process, I learned more about what was needed to succeed in running a
company. This encouraged me to seek out mentors in the financial, strategic and HR areas so that our company could grow to a higher level." In 2008, Nexus Innovations opened a second office in Fargo and has emerged as one of the leading strategic IT consulting firms in the region. Lorie is also a certified John Maxwell Team member and certified executive/ leadership coach, helping leaders create the long-term results they want in their business and personal life. She is also passionate about providing organizational consulting on ways to create a strong culture of influence to achieve strategic success. Lorie has also become a mentor and inspiration to other women in CTB's programming and is often invited to speak at their events. She is passionate about coaching and mentoring others because she says she knows the help that can be received through sharing experiences is critical. "I'm grateful to mentors in my life that have poured wisdom and encouragement to me when I needed it. These relationships are invaluable, and I have many great friendships because of it." * Courtesy of ND WBC
business counseling
Veterans business Outreach center Service members, spouses and veterans looking to start, purchase or grow a business have access to this great one-stop-shop. This center is partially funded by the SBA and provides free services, workshops and training for business planning, budgeting and financing and addressing operating challenges.
success story
dawn odhiambo Cozy Cafe Cando, ND
“No business is too small or too big for us to advise! I have a client that turned his craft making hobby into a small business. His hope was to generate enough sales to buy more material to keep producing his craft. He doesn’t want to become a millionaire. He just wants to continue producing his product because it is not only therapeutic for him, but his craft can help other veterans.” - Wendy Klug, Program Manager, VBOC
After serving 23 years in the military, Dawn Odhiambo found herself seeking a new venture in life. Dawn had a dream to open a cafe and has now seen this dream come true. Dawn, along with Paige Sullivan, are operators of a veteran woman owned small business in Cando, N.D. Recently opening the Cozy Cafe, Dawn finds herself very thankful that she was able to utilize all of the SBA Resource Partners while she was in the pre-venture stage of business development. “I highly recommend anyone wanting to start a business connect with the SBA and utilize all their free resources to assist with the process,” Dawn says. “ The SBDC was really helpful with the pre-venture stages of my business plan. I did as much research as I could but needed to fine-tune my business plan. The SBDC did just that!”
und.edu/centers/dakotasvboc dakotas.vboc@und.edu
Dawn has seen her dream of opening a cafe come true. She said, “It didn’t happen overnight. It took a lot of hard work and dedication. I feel that my military training has been a huge part of my success.”
“The training, service, ethics and adaptability have all contributed to me navigating this path. Each step of the process, I’ve been able to rely on my experience and training to help me through.” The Cozy Cafe has been the talk of the town since opening. This family oriented cafe specializes in homemade food that is as good as your grandma’s. There is a “Cozy Corner” where you can sip a cup of coffee while relaxing in rockers and watching the Main Street traffic go by. “The VBOC (Veteran’s Business Outreach Center) has assisted me with marketing - especially social media marketing. These people that are from out of town are hearing about us on social media and finding the business online. I know the basics of social media, but the VBOC has helped me dive in deeper. They are also able to help me with other online marketing outlets, which is very helpful!”
* Courtesy of VBOC FARGOINC.COM
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want a free mini mba?
Knowledge is power. The SBA has a multitude of free classes available to help you start, grow and maintain your business. Here are some that are available through their website.
Social Media Marketing
Introduction to Accounting
Marketing Plan Components Benefits of Social Media Creating a Unified Social Media Presence Design Layout Guidelines Guidelines for managing online reviews
Cash Flow Statements
Finding and Attracting Investors
Income Statements Balance Sheet Accounting Worksheets
Understanding Analytics Determining Rate of Engagement
Outside Financing Equity and Debt Crowd Funding for Equity Timeline Investor Expectations Investment Process
Customer Service
Growing an Established Company
First Impressions
S.W.O.T. Analysis
Ethics
Costs of Expansion
Training Employees Loyalty Programs
Take Market Share from your Competitors
Building Relationships
Developing a Growth Plan
Customer Complaints
Leverage Technology Identify Financing for Growth
did you know?
There are over 60 different courses you can take for free and they even organize them into planning, launching, managing and growing your business.
sba.gov/learning-center FARGOINC.COM
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graduating from your garage or home office?
Across the state, there are working spaces that are dedicated to helping businesses grow, secure an office space and gain access to funding and resources that will help them prosper.
NDSU Research and Technology Park Fargo
Not only does the NDSU Research and Technology Park allow you to take advantage of the beautiful shared spaces, including conference rooms, wet/ dry lab spaces, board rooms and more, but they also have many educational programs and services for businesses of all sizes at the Technology Incubator.
UND Center for Innovation Grand Forks
The UND Center for Innovation houses two buildings, the Ina Mae Rude Entrepreneur Center and the Skalicky Tech Incubator, which both offer office spaces, meeting rooms and a wet lab. Take advantage of the staff that can help assist you in all stages of your business to help you grow. They even have funds available to help you financially with your business plans and investments.
Center for Technology and Business Bismarck
Lease space is available in the Idea Center, a 6,000-square-foot facility designed for collaboration. Access to the copiers, printers and other office equipment in the center allows entrepreneurs to focus on gaining capital and growing revenue.
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Some of the services offered at the Technology Incubator include: • Professional services • Client networking • Coaching and mentoring • University relationships • Financing/venture capital • Student initiatives • Comprehensive business assistance • Educational events and forums • Assistance in identifying sources of capital
Some of those funds include: • Dakota Venture Group Capital Fund • Innovate ND - Grant Money • EB-5 - Investor Immigration • 701 Angel Fund - Capital Fund • SBIR/STTR - Research Fund
The Center for Technology and Business also includes: • A bookkeeping service • Business advising • Financing options • Access to the North Dakota Women's Business Center
top 10
tax tips for businesses It's an ugly five-letter necessary evil. TAXES. You're likely not going to find many other topics that will cause people's eyes to glaze over quicker. However, it's an essential part of being in business. That's why we went right to the head honcho, North Dakota Tax Commissioner Ryan Rauschenberger, to ask him for his best tips to ensure you're following the proper steps when it comes to your business' taxes. BY Ryan Rauschenberger
01
New Businesses
If you are just starting a business, we have a lot of information on our website at ND.gov/Tax/Business. It's your responsibility to know your tax requirements. Please remember that we are here to help.
02
Taxpayer Access Point (TAP)
All businesses should register to use TAP, our online tax filing and account access tool. You can find it at ND.gov/Tax/Tap. This system allows you to take care of a lot of your business’ tax needs online. Here are a few examples of what you can do in TAP: 1. Online Account Access: Edit your information, view returns, view correspondence, etc. 2. Electronic Payments: Make fast, easy and secure payments. 3. Filing: Quickly and easily file your sales tax and/or income tax withholding returns.
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03
Income Tax Withholding Requirements
Employers must withhold North Dakota income tax from wages paid to an employee if the employee performs services within North Dakota and the wages are subject to federal income tax withholding. Please review our income tax withholding guideline for very detailed information, such as what to do if you have employees performing services across state lines, at ND.gov/Tax/ Withholding/Pubs.
04
Sales Tax
If you sell goods and/or certain services, you will also have sales tax requirements. You will need to file sales tax returns, even if you have $0 to report. You will need to collect and remit the state sales tax, as well as any local sales taxes (city and/or county). Details may be found at ND.gov/ Tax/SalesAndUse/Pubs. 1. Remote Seller Sales Tax: You may also be required to register for a sales tax permit, file returns and collect and remit sales taxes to all states that you remotely sell to that have a sales tax requirement. Every state is different, so you will need to know your tax requirements in each state. You can register for a sales tax permit in multiple states through a central registration system at StreamlinedSalesTax.org.
About
Ryan Rauschenberger Rauschenberger was appointed Tax Commissioner by North Dakota Governor Dalrymple in January 2014, elected in November 2014 and re-elected in November 2018. He previously worked as the Deputy Tax commissioner, ND Department of Commerce and at PriceWaterhouseCoopers.
ND.gov/Tax
1 in four Individual income tax returns is a small business tax return
Income taxes have been reduced over
40%
since 2008. Currently, income taxes comprise approx. 17% of total state general fund revenues.
05
08
Get to know what your North Dakota income tax filing requirements are by visiting our website at nd.gov/tax and reading the instruction booklet for your business type. The booklets are updated annually, and the first few pages will highlight what’s new.
Our website has hundreds of FAQs, organized by tax type, to help answer any questions you may have. Find them at ND.gov/Tax/FAQs.
Income Tax
06
Tax Credits and Incentives
There are a variety of tax credits and incentives that North Dakota offers to businesses. Be aware of what is available to you. You can find information in the “For Businesses” section of our website, and check out our Tax Incentives for Businesses booklet.
07
Online Security
Make sure you are taking steps to protect your business and employee data and identity online. The IRS has a lot of helpful tips at IRS.gov/SecuritySummit.
FAQs
09
Contact Us
We answer the phone. If you have any questions about your business and taxes, you can call or email us. Contact information is at ND.gov/Tax/ContactUs. And be sure to sign up for our emails (just click the “Subscribe” button on the lower left of our homepage). We send out useful information and tax law updates.
10
Correspondence
If you receive correspondence from our office, please read it. Often times action is required, and delays can be costly.
Cheri A. Haarstick
CPA Fiebiger, Swanson, West & Co., PLLP "Things that may be overlooked at the initial stages of starting a business are the importance of handling tax filing requirements and selecting the type of tax entity to use, especially with the recent tax law changes. A business owner’s understanding and/or use of tax professionals for their sales tax, income tax and payroll tax filing obligations is key to the continued success of a business. We do meet and consult with startup businesses frequently. We have points and a process we go through during these initial discussions to customize our services and connect them to other resources to best support their business. We do have different rates for different services, all the work we do is hourly, but we always encourage them to think of it as an investment!"
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how should you structure your business? A Sole Proprietorship
General Partnerships
This business is run by a single entrepreneur who takes on the risk of all debts and actions of the company themselves. If you decide to form as a sole proprietorship, your personal assets are at risk if your business is ever sued. This is called unlimited liability, and it's one of the largest downfalls to forming your business this way. Setting yourself up this way is quick and inexpensive. You're not required to file in North Dakota for this entity; however, you will need to pay self-employment taxes on your profits and may end up paying more than if you were formed as one of the other entities.
General partnerships can be formed with two or more people. These businesses also carry unlimited liability and all involved parties' personal assets could be at risk if the business was sued. Self-employment taxes are paid from the business income, but the profits and losses would be claimed through each of the owner's personal tax returns.
A Corporation
Limited Liability Company (LLC)
Although the process is lengthier and more complicated, you can protect your personal assets by forming a corporation. There is also no selfemployment tax assessed with corporations. In North Dakota, you're required to file an Article of Incorporation and pay a $100 filing fee with the North Dakota Department of Financial Institutions.
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There are four main types of business structures. Decide which structure best fits your business by checking out our chart below.
JANUARY 2019
Possibly the most popular business structure, LLCs allow you to protect your personal liability while giving you the luxury of operating as a sole proprietorship. Your business would also have the most tax flexibility when compared to the alternative entities. In order to form an LLC in North Dakota, you need to file the Articles of Organization document with a fee of $135.
regulations You might fall under regulations if...
D
id you know that you're not allowed to have a barber pole outside your business unless you're actually a barber? Or that if you're a music therapist, you're required to have a license? How about that any funeral service operator can dispose of cremations that haven't been claimed within 12 months but not before they send written notice to that person's last known address? The number of regulations that are set can be mind boggling. Regulations are set to protect employees' rights, protect the environment and to hold corporations responsible for the power that they have. However, regulations can also be very confusing and complicated, especially when you're first starting your business.
did you know?
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The North Dakota Century Code lists the effective laws of North Dakota. Many occupations have regulations set up to protect the industry and the customers. So, if you're just getting your business off the ground, you might fall under regulations if... You're an architect or landscape architect You're an accountant You're a barber You're a cosmetologist You're an optometrist You're a plumber You're a massage therapist You're an investigative and security service You're a hearing aid dealer You're a dietitian or nutritionist You're an interpreter You're an acupuncturist
There are numerous different occupations and professions with laws listed under the Century Code. You can view them all by going to legis.nd.gov/ general-information/north-dakotacentury-code. Click on chapter number 43 and read up to your heart's content.
According to the Administrative Code, cosmetologists can't carry combs in their pockets.
The North Dakota Administrative Code embodies and defines regulations according to the ND Century Code. For example, the NDAD, not the NDCC, says where a cosmetologist shall and shall not manage combs and how they are to clean the salon. Google ND Administrative Code for more info.
If you really want to dive into the nitty gritty details of regulations, you would need a specialized lawyer. If your organization has a trade group, they can also be a great resource for navigating the quagmire that is regulations.
growth STAGE TABLE OF CONTENTS 45 Operation Intern 46-47 Labor laws 49
Find the Good Life in North Dakota Hiring people with
50-51 barriers
52-53 Job Service ND 54-55 Funding options of North 56-57 Bank Dakota
You are now official and the government recognizes you as a real company. You have a few good customers, some money coming in and you may even be ready to hire a few more people to your team. During this stage, you may need funding to bring your company out of the garage and into a storefront office.
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Operation Intern was started in 2007 by the North Dakota Department of Commerce in order to expand the opportunities for internships, apprenticeships and work experience with employers across the state. This program allows employers to receive a 50/50 match for up to $3,000 per internship that would provide a valuable learning opportunity. The program helps focus on the state's main industries of energy, advanced manufacturing, value-added agriculture and tourism and technology-based business. They also give special consideration to businesses that are first-time participants or that have started new internship or apprenticeship positions. Learn more at operationintern.com
Jon Simmers
CEO Bismarck Aero Center
did you know?
Since Operation Intern's start in 2007, 2,367 positions have been funded.
fyi
New recommendations for this program will be put forth in the 2019 Legislative session.
"This program has benefited our industry and our company in great ways. Several of the interns through our program have gone on to career advancement opportunities that were linked to their Operation Intern start through Bismarck Aero Center. Many of these interns that are now professionals in our industry walk through our doors daily as customers of Bismarck Aero Center. In other cases, interns have returned to Bismarck Aero Center after the completion of their education to start their full-time careers. For example, Shae Helling, who was a marketing intern in 2011, is now the Director of FBO Operations and Marketing at Bismarck Aero Center and is a key personnel on our executive leadership team."
"We would absolutely be a loud advocate for the program. At Bismarck Aero Center, our internship program has two primary objectives: 1) an opportunity to grow, develop and vet our future workforce and 2) an opportunity to give back to our industry by investing in the careers of the youth. The Operation Intern program has allowed us to meet both of these objectives. Operation Intern has allowed us to expand our program to include more internships for the future workforce of our industry. Operation Intern has opened our eyes to the fact that these young professionals bring many new skills, talents and enthusiasm in to our organization that more than make up for their lack of previous experience."
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10 tips
To Help Protect Yourself and your business If you take one piece of advice from this article, remember that an ounce of prevention is worth a pound of cure. Employment relationships, just like all relationships, tend to be warm and fuzzy in the beginning but can quickly head south if the employer has not taken some basic steps. While meeting with an attorney to discuss your business’s employment goals is always a good idea (and could save you a ton of money long term), below are 10 quick tips all employers should be aware of:
01
Have an employee handbook and follow it.
By
Ross Nilson
Brudvik Law West Fargo
An up-to-date employee handbook lets employees know your expectations right from the start. It is also instrumental in the event that you need to terminate an employee. Every employee should receive a written copy and acknowledge in writing that they have received, read and understood the handbook. If you do not know where to start with an employee handbook or if it is out of date, contact an attorney.
02
Review your employees and BE HONEST.
An employer should conduct and document regular written reviews. Be respectful but honest in the assessment of the employee. “North Dakota Nice” cannot be part of an employee’s review process. This is especially important in the event that an employee needs to be fired. Sugarcoating an employee’s failings can make terminating that employee more difficult and open an employer up to potential legal action.
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03
Keep personnel files.
Each employee should have a personnel file that includes the necessary documents relating to that employee’s employment. This should include all employee reviews. Some employers have an “official” personnel file and keep a separate personnel file of an employee’s shortcomings. There should only be one personnel file for each employee.
04
Document, document, document to support terminating an employee.
Have an honest discussion with struggling employees and document that discussion. Have your employee acknowledge (again, in writing) that they have received, read and understood that documentation. It may be necessary to put an employee on a performance improvement plan that details future performance expectations.
05
Severance agreements are your friend.
Many employers do not want to pay a severance to an employee who was recently terminated. However, paying a terminated employee for a few pay periods in exchange for the signing of a release of potential legal claims can save significant legal costs down the road.
06
Have a zero tolerance policy for harassment or discrimination.
“That’s what she said” is funny on the television show “The Office” but is not appropriate in the real-life office. In the #MeToo Era, it is necessary for employers to have zero tolerance for any forms of harassment or discrimination. Any complaints of harassment or discrimination must be investigated and documented. If the investigation reveals that harassment or discrimination has taken place, disciplinary action must be taken against the offending employee.
07
09
Non-compete agreements limit an employee’s ability to compete against their current employer should that employee leave their employment. North Dakota strictly limits non-compete agreements to situations where an individual is selling the goodwill of a business or in the dissolution of a partnership. Even in those situations, the agreement is limited to either the county or city.
Businesses tend to train managers and supervisors as if it is a sprint. They do it quickly and then it's over. The training mentality should be more like marathon training. It needs to happen on a consistent basis in order for the managers and supervisors to be trained, keep trained and receive necessary updates to employment laws and policies.
Non-compete agreements are rarely enforceable in North Dakota.
08
Paid time off almost always must be paid to a former employee.
In North Dakota, earned paid time off is treated as wages and must be paid with the employee’s final pay check. There are two exceptions to this general rule. The first exception is if the employee leaves voluntarily, the earned paid time off can be withheld if (1) at the time of hiring, the employer provided written notice on the limitation on the payment of the earned paid time off; (2) the employee has been employed for less than a year; and (3) the employee gave the employer less than a five day written or verbal notice. The second exception is if (1) the paid time off was awarded but not yet earned by the employee and (2) if the employer provided notice of the limitation on the payment of the awarded paid time off.
Train your managers and supervisors like it’s a marathon, not a sprint.
10
Do not be afraid to check out the North Dakota Department of Labor and Human Rights website.
The North Dakota Department of Labor and Human Rights website (ND.gov/Labor/ Human-Rights) provides information on different employment laws, including employment discrimination, wage and hour laws and other important information. This website should be a first stop for your employment law questions. While these tips are intended to cover a large swath of employment law, they do not cover all the challenging questions that arise in the workplace. If you are facing a difficult question regarding an employment situation, consult an attorney. A simple 30-minute phone call can prevent thousands of dollars of legal fees if you are sued by a former employee.
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how to connect with recruiters across the state
T
he North Dakota Economic Development Foundation started a program called Find the Good Life to help our local workforce thrive. Through this initiative, they have formed the Recruiter Network to help attract employees from out of state. By joining the Recruiter Network, you can collaborate with other professionals in North Dakota on recruitment efforts, post your jobs on their website, and access resources and information that may help you in with your recruitment process. Membership is $500 per business and is not charged per person, so you can have multiple members of your team attend meetings and utilize their resources.
Specific benefits include: • Networking with other human resource professionals/recruiters. • Best practice sharing among major industries in North Dakota. • Resources and information to help with recruitment.
• Collaboration among professionals to help recruiting efforts. • Regular meetings and one annual event at the Governor's Workforce and HR Summit.
North Dakota Ranked
#
4
Best Place to Raise a Family
Wallethub study
North Dakota has Highest Share of
Millennials
(2015) - Brookings Metropolitan Policy Program
North Dakota Ranks
#
2
for its Finances
truthinaccounting.org
North Dakota Ranked
#
1
for Quality of Life
U.S. News & World Report’s Best States Ranking Report
North Dakota Was
# findthegoodlifeinnorthdakota.com facebook.com/ExperienceND
2
Least Stressed State
Wallethub study
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you might not have thought of looking for employees here...
D
espite having the highest labor market participation rate in the nation, North Dakota still has a substantial section of the population that wants and needs to work but is unable to due to some sort of barrier. Some of these barriers include a criminal past, lack of childcare and disabilities. For instance, it takes a substantial period of time to acquire an official identification card after being incarcerated. This identification is required to obtain employment and is a key factor in that individual returning to the workforce and gaining income to cover their basic needs.
Job Service North Dakota works with employers and job seekers to help overcome these challenges to employment. They have a multitude of programs available to help teen parents, veterans, ex-felons (or "returning citizens") and more. "A large part of what we do is assisting the public who have barriers to employment. This is a service that benefits both employers and individuals. Multiple programs at Job Service North Dakota specifically address overcoming these barriers, barriers such as criminal records, lack of childcare, transportation, lack of hard
North Dakota’s Workforce Intelligence Network (NDWIN)
This online tool provides job seekers, employers and professionals with employment resources. Employers can receive labor market information, current trends and labor information for areas in North Dakota you may want to expand or locate your business. ndworkforceintelligence.com
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and soft skills, language barriers, homelessness, mental health, chemical dependency and disability. When a person overcomes barriers to employment, becomes employed and retains that employment, it is a win for the person, the employer and the community." - Carey Fry, Workforce Center Manager, Job Service North Dakota. Check out the Job Service ND website or visit your local office to receive more information on participating in these programs. A couple of the programs and tools available to those presented with an obstacle to gain employment are:
Veteran Support
Minot, Fargo, Bismarck and Grand Forks Job Service ND staff all help veterans connect with area employers who are looking for veteran job seekers. Bismarck: 1601 E. Century Avenue, Bismarck Fargo: 1350 32nd St. S., Fargo Grand Forks: 1501 28th Ave. S, Grand Forks Minot: 3416 N Broadway, Minot
Federal Bonding Program and WOTC (work opportunity tax credit) program
These bonds are given to employers free of charge as an incentive to hire job seekers who qualify for the program. The employer would be reimbursed for any loss of money, property or theft up to $5,000 during their first six months of employment. doleta.gov/wotc
meet tyler tran Tyler Tran was only a freshman in high school when he became a dad. All of a sudden, he was presented with new obstacles to his future. How was he going to finish school and raise a child? How will he come up with the money for the added expenses? Tran's daycare connected him to Job Service ND and the Crossroads Program, offered by the North Dakota Department of Human Services. This program helps with childcare and transportation costs while teen parents continue their education. Tran, now 20, was able to finish high school and is currently in his second year of a two-year program to become an electrician. Tran will be finishing school this June and then be employed full time with Magnum Electric. Through the Crossroads Program, Tran receives financial assistance for gas
and transportation expenses associated with traveling to and from work, school and daycare. Tran and his daughter Ava, now 5, are thankful for the assistance they have received over the last five years. "It would be a lot harder, that's for sure," he says. "A little bit goes a long way." He explained that the process is very easy. He has been with the program since Ava was a baby, and it takes minimal time out of his day. He stops at the Job Service office once a month and provides proof of his school schedule. "They're always nice. Nicole (his caseworker) has always helped me as much as possible. If I need anything, she's willing to help me through it or get what I need if I need something. Even the people at the front desk, they are all nice people over there. It's not hard at all. You meet once a month for five minutes and sign some papers and leave."
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labor shortage? job service is here to help. Job Service North Dakota helps individuals search and apply for jobs and access current labor market information, and they also provide workshops, job fairs and other online and onsite services for those looking for employment. In addition, they help businesses post jobs, search resumes and access training funds and tax incentives to assist in their recruiting efforts.
The Workforce Innovation and Opportunity Act (WIOA) and Trade Adjustment Assistance (TAA)
These two programs are available to business owners who are onboarding employees who have been recently dislocated, have low incomes, are unemployed due to foreign competition and other specific groups of the workforce. Through these programs, you can be reimbursed for up to 50 percent of the employee's hourly wage while they are receiving training for up to 26 weeks. WIOA: doleta.gov/wioa TAA: doleta.gov/tradeact
Veteran Employees
North Dakota's Workforce Intelligence Network
Staff members in Minot, Bismarck, Fargo and Grand Forks work with veterans who are looking for work and match them with local businesses looking to hire veteran employees. Bismarck: 1601 E. Century Avenue, Bismarck Fargo: 1350 32nd St. S., Fargo Grand Forks: 1501 28th Ave. S, Grand Forks Minot: 3416 N Broadway, Minot
This online tool provides employment resources to employers and job seekers. Employers can research area wage information, trends and economic data.
North Dakota New Jobs Training Program
Are you creating new full-time employment opportunities in the state? You could have access to funds through the New Jobs Training Program to help offset the cost of your orientation programs. jobsnd.com/business/businessrelated-resources
The Federal Bonding Program
These bonds are free to the employers who hire eligible job applicants. The employer would be reimbursed with no deductible for any loss due to theft or property damage up to $5,000 tied to the employee within their first six months of employment.
ndworkforceintelligence.com bonds4jobs.com
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JANUARY 2019
job service nd
job fairs 01.22
02.05
02.06
02.19
HIRED Job Fair
Sanford Health Info Session
JR Simplot Hiring Event
Sanford Health Info Session
1-4 p.m. Save the Date for the HIRED Job Fair where employers from all industries will be available. Ramada by Wyndham 3333 13th Ave .S, Fargo
10 a.m. to noon Sanford recruiters will be available to answer questions about their available positions. Fargo Job Service 1350 32nd St. S, Fargo
9 a.m. to noon JR Simplot has a variety of manufacturing and agricultural opportunities available. Grand Forks Job Service 1501 28th Ave. S., Grand Forks
10 a.m. to noon Representatives will be available to answer questions about open positions at Sanford Health in Fargo. Fargo Job Service 1350 32nd Street S, Fargo
job service nd
locations
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it takes money to make money There are a variety of funding options out there for those looking to grow their business. However, which is right for you?
microloans
sba loans
For businesses that are looking to build capital but banks have declined
For most business purposes and guaranteed by the SBA
Loans Available up to
Loans Vary From
$50,000 To Apply
Steve Dusek
$500 to $5.5 million
Lake Agassiz Regional Development Corporation
Lenders List available at
417 Main Ave, Fargo
sba.gov/funding-programs/ loans
President & CEO Dakota Business Lending "While there are numerous financing options available for small business, you really need to find a resource partner who will search out and find the best financing package for your need and who will be willing to guide you through the entire process."
701-235-1197 Long-term Fixed Assets and Capital lakeagassiz.com/businesslending/sba-microloanprogram
Small Businesses and not-forprofit childcare centers Capital, Inventory and Equipment Needs Credit decisions made locally
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Eligibility Requirements and Restrictions Apply Loans for Exporters
SBIC Investment Match
grants
If you manage an investment fund licensed as an SBIC by the SBA
SBA awarded grants for small businesses
SBIC information available at
sba.gov/partners/sbics
Standard and Discounted Debentures
Grant Sizes Vary Eligibility requirements and information at
Equity Financing Long-term Loans Management Services
sba.gov/funding-programs/grants
Low-cost Financing Grants available for Business Funding Exporting Research and Development
need funding for your business?
check out bank of north dakota. Accelerated Growth Loan Program Companies with revenues of $1.5 million to $10 million annually with a proven track record, cash flow and strong management entering a period of dynamic growth are potential beneficiaries of this program. Loans may be used to acquire property, remodel, buy equipment, provide working capital or refinance a current loan. Most often, these are companies with strong revenues but limited hard assets. A technology company is a good example.
PACE Program This program is targeted to primary sector businesses that bring revenue to the state from new products or sales from outside of the state. Applicants must be certified primary sector by the North Dakota Department of Commerce. The program can buy down the interest rate on a loan by 5% (Minimum APR 1%) utilizing state and local funds. The buydown is based on total investment or the number of jobs created. Maximum buydown from BND is 500,000 dollars every two years.
Business Development Loan Program Assists new and existing businesses in obtaining loans when they have a higher degree of risk.
Match Program Match is targeted to financially strong companies with a credit rating seeking to locate or expand in North Dakota. Match provides loans over $15,000,000 at lower-thanmarket interest rate for larger scale economic development projects. 56
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Export Enhance Program This program enables BND to provide alternative financing options for North Dakotan’s exporting products to international markets and entities importing products to North Dakota.
Eric Hardmeyer
President/CEO Bank of North Dakota
Q. Is there a loan option that often surprises businesses owners that they can take advantage of? A. I think the interest buydowns offered through the Bank’s PACE and Flex PACE options can be gamechangers for business owners. We added the Accelerated Growth Loan two years ago, which funds businesses with a rapidgrowth opportunity. Q. What excites you about helping business owners access these programs to help their business? A. We can take on risk the local banker may not be able to do on their own. By doing so, I and my BND colleagues find it rewarding to help our state’s residents achieve their dreams.
When you're starting or growing a business, you need money for nearly everything. How do you build these funds? The Bank of North Dakota works closely with community banks across the state to provide loan programs that assist businesses in all stages of development. BND does not provide business loans directly to consumers, instead, its loan programs are initiated by the local lender who then work with BND to determine program eligibility. Applicants should initiate any conversation on the following loan programs with their local bank.
North Dakota Development Fund The NDDF provides venture capital and alternative investment opportunities for start-up and emerging companies in North Dakota. Companies can receive financing for working capital, equipment or real property needs. Eligible businesses must be innovative, scalable and provide a unique market or customer to the state.
SBA Guaranteed Loan Purchase Program Production, manufacturing, processing and retail trade businesses in North Dakota can receive a lower interest rate by BND purchasing the guaranteed portion of a SBA loan.
USDA Government Guaranteed Loan Purchase Program BND purchases a USDA guarantee, lowering the interest rate for the borrower.
Flex PACE Program Flex Pace provides an interest rate buydown on a loan by 5% (Minimum APR 1%). As opposed to PACE Loans, Flex Pace Loans do not require creation of jobs or a minimum investment. These investments are determined by the community to be important to their local economy. Maximum buydown from BND is $200,000. There is also a buydown of up to $300,000 for child care businesses and $500,000 for affordable housing projects.
Andy Richards
Chief Operating Officer Prairie Products "The Bank of North Dakota is not FDIC owned and can be very creative on helping farmers and entrepreneurs in our state. We are the only state that has these tools available. We have saved millions of dollars by taking advantage of the tools the Bank of North Dakota and the SBDC provide that otherwise would cost hundreds of thousands of dollars."
Beginning Entrepreneur Loan North Dakota residents with a high school diploma or GED and relevant experience in a profession or skill can qualify for a guarantee on a loan up to $500,000 to help finance a start-up or early-stage business expansion. Applicants may have a maximum net worth of $500,000.
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established stage TABLE OF CONTENTS 60-61 ND Gateway for your 62 Lobby industry
63 Cyber security Emergency
64 management 65 BusinessUSA Legislative
66-67 Challenges Workforce
68-69 development
You have a strong customer base and a solid reputation and revenue stream. You are paying yourself a decent paycheck and have moved past the rollercoaster ride of starting a business. Things are starting to move along smoothly, but don't get too comfortable. It's time to advocate for your business and protect your investment and livelihood.
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welcome
Introducing a new website for government and business to work together
To The North Dakota Gateway
N By
James Leiman
Senior Manager for Strategy, Research and Intellectual Property North Dakota Department of Commerce
James will post a monthly update on their Facebook page. facebook.com/ExperienceND
orth Dakota is known throughout the nation as a business-friendly state but will soon become much friendlier! Led by the North Dakota Department of Commerce, agencies will deliver an e-Government platform offering a hassle-free experience for all businesses wishing to interact with the state. The ND Gateway, as it will be known, will provide the business community with an optimum and user-friendly experience with state agencies, as well as creating efficiencies within government. Currently, it is not uncommon for businesses to transact using 15-20 forms involving five or six different agencies that process payments separately via agency specific websites. As this could be burdensome on the business community, North Dakota will introduce a private sector like interface where transactions are seamless and information is collected and automatically populates forms across state agencies with communication flow coming through the Gateway. Upon completion of the business portion of the Gateway, the state will expand the portal to serve all residents wishing to interact with North Dakotan government agencies.
How The ND Gateway Will Work Once operational, the ND Gateway platform will enable any user to establish a business in North Dakota using a single all-in-one transaction. A logic-based approach (think Turbo Tax) will guide customers through the process asking the questions needed to fulfill each organizational requirement within state government. In later releases, bidirectional data flow will enable agencies to communicate to customers via the Gateway. In addition, using a single sign-on identity, businesses will be able to transact and make payments. Changing Culture In State Government One amazing attribute about the project is that agencies across government involving both cabinet leaders and elected officials have agreed to participate in the project. The first nine partner agencies are: The Secretary of State’s Office, Workforce Safety Insurance, Job Services, Office of the Governor, the Bank of North Dakota, Insurance Department, the Office of the Tax Commissioner, the Department of Commerce, Securities Department and the Information Technology Division. Several other regulatory agencies have expressed interest in joining once the Gateway is deployed. On the backend, agencies will realize efficiencies as dashboard metrics will contribute to management decisions on where to position resources. This will save customers time as they interact with the state while enabling government agencies to find process improvements thereby realizing operational efficiencies. Gaining Internal And External Efficiencies From an efficiency perspective, businesses transacting and interacting with the state encounter an antiquated and highly compartmentalized user environment. In some cases, businesses must deal with as many as eight or 10 agencies; having a
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seamless approach would improve state government’s ability to serve its citizens and businesses. In addition, the technology that will be deployed will reduce backlogs in state government, which result in long waits for customers while improving internal operations through the realization of efficiencies. Next Steps For the first iteration of this project, a portal will be established, enabling businesses to transact seamlessly with the Secretary of State’s Office, Workforce Safety Insurance, Jobs Services and the Office of the Tax Commissioner. In addition, as customers answer responses in the portal, forms for all four agencies will be populated; only remaining questions not covered in mapped data collection requirements will be posed. Another feature will be bidirectional data flow that will be shared among agencies, in accordance with existing law. This will enable faster customer service within government agencies. From here, the remaining pilot agencies will be integrated into the platform, as well as agencies who wish to participate in the single portal. Eventually, legacy portals and systems will be retired upon successful deployment of the Gateway. Other personas will eventually be incorporated into the portal creating the ND Gateway, a state-of-the-art application that offers an Amazon-like experience for anyone conducting business with state government. Efficiencies Realized In the end, businesses will be able to transact smoothly and expeditiously with state government. North Dakota will have among the nation’s best customer service portals and will ensure that businesses and residents are provided with top notch and modern experiences.
how to get lawmakers to vote your way
BY Jennifer Gades
Lobbying has an undeserved bad name. There is no need to fear it. In fact, I encourage you to get involved! According to Forbes, small businesses make up 60 to 80 percent of all jobs in the U.S. They also have 13 times more patents than larger firms.
W
ith this kind of contribution to our economy, it only makes sense that the small business owner should be working with their state legislators to make sure their voice is heard. Congress wants to know how prospective bills could affect your small business positively or negatively. I have been fortunate to have gotten the opportunity to go lobbying with my father on behalf of the National Association of Theatre Owners (NATO). Here are eight tips I have learned:
01.
Get To Know Your Decision Maker As a small business owner in North Dakota, you're in a great position as you may already know your state legislators. They are a part of our communities and may go to your church, have kids that attend school with your children or be on your intramural sports team. Get to know them. Build a relationship. Their influence can greatly impact you.
Find your Legislator at legis.nd.gov
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02.
Know Your Importance There are attorneys and national chains that will represent you with your lobbying efforts, but don't be afraid to go alone. The legislator would prefer to talk with their local voters instead of out-of-state “big shot” executives. Legislators trust their constituents’ opinions more about how the legislative action would impact local business.
03.
Have Your Facts Ready You may not get much time. Typically, you can expect only 15-30 minutes to make your case, so make sure you are organized and prepared. Many times, your meeting with a lawmaker or staffer will start late as they have very busy schedules. Don't be discouraged.
04.
Show The Unintentional Consequences Of The Bill You don't get much time, so don't waste it putting them in a place to get defensive. Bills and laws are written with good intentions. Let
You can apply to be a lobbyist for only $25 at sos.nd.gov/lobbyists/howbecome-lobbyist
the lawmaker or staffer know that you understand why the bill was written but that you want to explain how it will unintentionally hurt your business. Typically, legislation is unaware that the bill could have a negative effect on you or your business. Likewise, let them know why you appreciate what they are doing and that it will be of great help to your industry.
05.
The Staffer Is Your Friend In Washington, the congressional staffer may meet with lobbyists instead of your state congressperson. Don't be disappointed or insulted; they may be the person who actually wrote the bill. Despite staffers typically being fresh out of college, these are bright and driven individuals who are well networked and very influential. Treat them with the respect they deserve.
06.
Build Relationships With Local Congressmen And Congresswomen Whether you are meeting him or
Track current Congressional bills, monitor voting records and get email alerts at govtrack.us
her for coffee at a downtown diner or lobbying in Washington, it's very important to stay connected. Exchange your business card, send a thank you card and stay in touch. This will ensure that you have an open dialogue, and it may increase your chances of meeting with them again with future efforts.
protect your business from hackers
The FCC has a free online cybersecurity resource available to help small business create customizable guide called the Small Biz Cyber Planner 2.0. By visiting fcc. gov/cyberplanner, you are able to compile a guide that outlines tips and process policies for the following topics:
07.
Never Mention Contributions Promising to contribute to their campaign and efforts or linking previous contributions or voting history with the legislator's position on any issue is not only frowned upon but actually illegal inside of a federal congressional office. Do not even hint that contributions could have any influence on the legislator's decision.
08.
Stay Focused And Be Active Legislation can be overwhelming, and we don't all have a passion for following politics. It's important to stay up to date on what is going on in legislature, though, because it could directly impact your business. For instance, the state may be looking at increasing minimum wage and have an exemption for small businesses since they might not be able to afford that increase. Although this may sound great and have good intentions, the unintended consequence may result in local workers not wanting to be employed by small businesses since they can get paid more for the same job with a national chain. In the current tight market, this would mean small businesses would have an even tougher time attracting and keeping good help and hurt them in the long run. Lobbying is an effective way to make sure both you and your business are protected and supported by the state.
There are currently over 550 organizations registered to lobby in North Dakota for 2019
Privacy and Data Security
Website Security
Scams and Fraud
Network Security
Mobile Devices
Employees
Payment Cards
Facility Security
Incident Response and Reporting
Operational Security
Policy Development and Management
did you know?
44%
of small businesses reported being the victim of a cyber attack with an average cost of $9,000 per attack.
*2013 Small Business Technology Survey, National Small Business Association
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Plan to prepare
T
he Emergency Management Institute (EMI) is like your insurance policy: you know you need them, but you hope you never have to use them. The EMI offers online courses free of charge to help you protect your employees and customers and prepare your business for high-risk situations. We put together an example curriculum of the independent study courses you may find useful.
In order to register, you will need to obtain a FEMA Student Identification number. You can register at cdp.dhs.gov/femasid and receive the number by email after filling out the provided form.
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is-907 is-42 is-111.a
Active Shooter
Social Media in Emergency Management
Livestock in Disasters
is-235.c
Emergency Planning
is-240.b
Leadership and Influence
is-366.a
Planning for the Needs of Children in Disasters
is-394.a
Protecting your home or small business from disaster
is-906
Workplace Security
is-912
Retail Security Awareness: Understanding the Hidden Hazards
is-242.b
Effective Communication
is-241.b
Decision Marking and Problem Solving
your government's guide to business Find your missing piece. Within the USA.gov site, you can access all things related to the government. Check out the small business section that can help answer some of the questions you may have while starting and growing your business. Business Keyword Search Search government websites that are useful for small businesses
Business Tax Information
Finance
U.S. Department of Agriculture (USDA) GovLoans Small Business Innovation Research Program (SBIR) More
Self-employment tax Property tax Excise tax More
Importing and Exporting
Obtain licenses and permits Tips for new importers Basic information
Federal Government Contracting
Federal contracting terms Contracting opportunity finder Step-by-step guides and support
Starting A Nonprofit Organization
Types of nonprofits Process information and forms Grants and loans
Start Your Own Business
Insurance Consumer protection law Self-employment and working from home Commercial licenses More
State Business Resources Opening a business in North Dakota Access financing Contracting opportunities
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will you still have employees in 10 years?
O
ur entire economy is driven by our workforce. We need people to work in our offices, expand our minds and fuel our business. This important component will ring true throughout time. The Workforce Development Council has put a large concentration on identifying our workforce challenges so that North Dakota can continue to grow and prosper for years to come. Through a data-driven study, they have found that there are five areas that we should concentrate on as a state. We have outlined those five initiatives and what you can do to help.
Technical Skills Gap
It has often been ingrained in us from a young age that in order to have a successful future, you must obtain a four-year degree. However, the Council found that technical careers that do not require a four-year degree make up the largest part of our labor market, accounting for 60 percent of jobs. Employers are unable to find enough trained individuals to fill these positions. "IT jobs are growing at an exponential rate, faster than the average for all occupations. Between 2014 and 2024, it is estimated more than 2,250 new and replacement IT positions will be needed in North Dakota," the North Dakota Workforce Development Council Summary Report states. At goodjobsdata.org, you can access a list of 30 million good jobs that do not require a bachelor's degree. Changing our dialogue and gaining awareness that there are great paying technical jobs available that do not require a degree, but instead a shorter term technical training can help fill this gap. The Council also has made recommendations on establishing partnerships with education and industry leaders, connecting secondary and post-secondary education, promoting earlier diverse career exposure and incentivizing engagement with students to enroll in technical career paths.
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JANUARY 2019
Between 2014 and 2024, it's estimated more than 2,250 new and replacement IT positions will be needed in North Dakota.
Need for Youth Engagement and Earlier And More Diverse Career Exploration Work-based learning opportunities are far more accessible in other states than here in North Dakota. The Council is taking a look at opportunities to not only educate students at a younger age that there are options outside of the four-year degree, but to also expose them to the diverse and high demand jobs that are available in our state.
The Council has made recommendations for working with the schools systems to begin career exploration courses as early as middle school. They also want to increase the availability of work-based learning opportunities such as internships, job shadowing programs and other learning experiences that would benefit both the student and the employers. They note that youth who are exposed and included in the community at an early age are more likely to become leaders within that community later in life. Current employers vocalized an absence of work ethic, dependability and problemsolving skills, which can all be improved by earlier exposure to the workforce. "In North Dakota, a focus on education is instrumental in building tomorrow's workers, today," Arnie Strebe, President of Starion Bank and Council member stated in the report.
Support for Populations with Barriers to Employment Nursing and Healthcare Technician Shortage
The nursing shortage has been an issue for quite some time. It is becoming more prominent, however, with the retirement of baby boomers. Not only are these individuals leaving the workplace, but they are reaching an age where they require more healthcare needs. Governor Doug Burgum recognizes this issue and started a taskforce to identify causes and find solutions to the shortage soon after he was sworn into office. This taskforce has found that nursing faculty require holding a Master's or doctorate degree. However, there is no incentive for nursing staff to obtain the additional degrees as they are not paid significantly more than a entry-level registered nurse. On top of that, they are often working longer hours than the nurse who only provides patient care. They also identified the lack of rural or online programs to obtain a nursing degree. There is not even a national program that allows you to obtain an Associates Degree in Nursing. With other states offering loan repayment and higher wages, recent studies have found that the average retention rate of a North Dakota nurse after working for five to seven years after graduation is less than 50 percent. The hope is with more rural and online programs and a streamlined approach to apply (one application would allow you to apply to multiple programs) will lead to more qualified nurses in the North Dakota workforce.
There are people in North Dakota who are willing and looking for work but experience some sort of barrier preventing them from joining the workforce. The Council found that these barriers can be grouped into three main categories: ex-offenders or "returning citizens," users of the state's workforce system and citizens without a high school diploma. Every month, roughly 130 people are incarcerated in North Dakota. After someone is released from prison, they are less likely to return to the judicial system if they are able to quickly find a job that will pay for them to cover basic necessities. In cities that have implemented quality prison-to-work programs, ex-offenders are much more likely to become responsible, contributing citizens. State agencies that are funded through the Workforce Innovation and Opportunity Act of 2014 (WIOA) are considered the "state workforce system." These programs have a unified goal of removing barriers to employment, however they have no formal leadership or resources available to them. The Council is looking to co-locate the Job Service and Vocational Rehabilitation services as well as realigning the workforce system to create a more cohesive model for job seekers. Those individuals who lack a high school degree have access to fewer and fewer jobs each year. Although there is always the option of getting your Graduate Equivalency Degree (GED), the lack of funding has resulted in a waiting list for those who are looking to obtain this degree. The Council recommends increased funding to allow more potential workers to obtain their GED. They would also like to create a referral program to help those who have recently obtained their GED gain additional training and certifications to prepare them for the workplace.
Need for Net In-Migration of North Dakotans
To put it simply, there are not enough job seekers in North Dakota to fill all of the available jobs in the state. This rings especially true for the technical and healthcare industries. "With there being more open jobs in North Dakota than people to fill them, retaining youth in North Dakota does not only become imperative - it becomes a mathematical certainty," states Kurtis Karn of Discovery Benefits and the ND Workforce Development Council. In the report he adds, "The youth in North Dakota will play an integral part in becoming the next workforce and making an impact on retaining this youth within North Dakota is as high a priority as I have seen in years." Despite receiving high praise from ranking reports, preserving the presence of military bases and easing the ability to obtain occupational licenses would help increase the amount of professionals who could enter our workforce from out-of-state. The North Dakota Workforce Development Council Summary Report states that, "According to a 2017 Economic Impact Analysis, in 2017, military organizations employed nearly 14,000 people in North Dakota and created another 3,800 jobs indirectly." The skillsets of our military are very beneficial to our workforce. We must also highlight the advantages of living in North Dakota in order to help attract new workers to the state and maintain our youth currently living here. North Dakota is unfortunately playing a game of "catchup." If we all work together, we can invest in our communities and show the country what a empowering and wonderful place our state is to live and work. FARGOINC.COM
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things to watch in the legislature this year Efforts in legislation can have a large impact on your business. Legislative efforts resume in 2019 and according to the National Federation of Independent Business and Forum News, here are some of the top issues influencing North Dakota small businesses during the upcoming session:
Property Taxes The National Federation of Independent Business will continue to fight for lower property taxes. Lawmakers are consistently looking for permanent property tax reform by pushing state money into state districts. Minimum Wage The minimum wage fight has also been an ongoing issue in legislature. According to the U.S. Bureau of Labor Statistics, only 2.7 percent of the nation's workers make minimum wage, with a majority of them being 25 years old or younger. Increases to the minimum wage are typically argued in an effort to reduce poverty, however, there is little proof to support that. These minimum wage increases have been shown to eliminate entry-level jobs. The NFIB will maintain their effort in fighting minimum wage increases. Paid Leave Although FMLA provides protection for 12 weeks of unpaid leave per year when an employee is caring for a family member, is sick, has parental duties, etc., further paid leave mandates are often a topic in legislation. For small business owners, this could cause expenses they may not be able to afford. These policies are often heavily mandated and don't work for all businesses that are affected by them. Small businesses already pay 30 percent more than large corporations to comply with regulations. Additional mandates would cause both an extra expense and a shortage in their workforce team (without a budget to fill it). Sunday Shopping One of the more polarized topics is whether or not business should be allowed to be open to consumers on Sunday mornings. Opinions are widely varied on the issue and efforts to repeal the law was also pushed in 2017. The effort failed to go through legislation two years ago but efforts to repeal the law will be made again in the 2019 session. This would have a large effect on retailers in North Dakota. Regardless of the side you are on, you will want to be voicing your opinion to state leaders and be staying up to date on this bill movement.
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Should businesses be required to give their employees 56 hours of paid leave?
In 2016, the National Federation of Independent Business released a report showing the impact a similar effort in legislation, the Healthy Families Act or H.R. 932, would have on businesses. H.R. 932 would have mandated that businesses with 15 or more employees gave their employees 56 hours of paid leave each year. These mandated leaves would cost small businesses a substantial amount of money, not only for paying the leave, but covering the work with lost sales and production and the possible leave to hire additional employees to cover the missed hours. This chart takes that information the NFIB Business Size Insight Module forecasts that the cumulative U.S. real output lost during a ten year window due to the H.R. 932 proposed plan with five days of paid sick leave taken. They approximate that about half of the lost output would occur at small businesses.
Firm Size Cumulative Real Output Lost by 2025 1-4
$39.6B
5-9
$34.9B
10-19
$44.2B
20-99
$120.3B
100-499
number of employees
$86.1B
500+
$326.7B
< 20
$118.7B
< 100 < 500
All Firms $651.7B
$238.9B
$325.0B
expansion stage TABLE OF CONTENTS 72-73 Government contractors 75-78 Going international 81 Franchising sales 82 Expanding outside of North Dakota and 83 Acquisitions mergers Requirements based
84-85 on employee size
Congratulations! You are now a leader in your market. Your dreams have gotten larger, and new opportunities are presenting themselves every day. It's time to think of expanding out of your current market and customer base.
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get the government
on your client list
T
he North Dakota Procurement Technical Assistance Center (ND PTAC) assists with identifying and obtaining potential contract opportunities. This free service provides one-onone assistance and training across the state and helps match your business with contracting opportunities. As of October 2018, System for Award Management registration is required before any federal bid submission. To learn the basics of federal contracting, you can participate in a monthly webinar that can be accessed through the SBA.
Registration requirements • Check how your company has its
legal name listed with the N.D. Secretary of State • Obtain your Employer
Identification Number (EIN) at IRS. gov • Get your Dun & Bradstreet Data
Universal Number System (DUNS) at FedGov.DNB.com/Webform • Identify your industry code with
the North American Industry Classification System (NAICS) at Census.gov/eos/www/NAICS • Register in the System for Award
Management (SAM) at SAM.gov • Develop your capability
statement, which would contain a brief description of your business and references of your past work. The PTAC can provide you with samples of capability statements.
Sherri Komrosky with the North Dakota Small Business Administration helps businesses navigate working with government. She can be reached at sherri.komrosky@sba.gov
How It Works
Mondak Portables, LLC MondakPortables.com Epping, N.D.
"We had contacted Keith Olson from Williston SBDC about certifying as a 100 percent woman owned company last fall. He referred us to Dave Kleppe from Bismarck PTAC to help us. At that time we were also interested in getting into federal contracting. We scheduled an appointment with Dave to meet. We also received an invitation from Sherri Komrosky to a proposal writing and cost strategies workshop in Fargo that was put on by SBA. We decided to go to the workshop the same week as meeting with Dave Kleppe. We had registered with SAM online but didn't know where to go from there. The workshop was very informative and started leading us in the right direction. "Dave Kleppe helped us self-certify with SBA as
*Courtesy of ND Procurement Technical Assistance Center
a small business and 100 percent woman owned. He gave us many suggestions to improve our data on SAM and SBA. Dave set our BidMatch program up for us. Dave helped us navigate through FBO.gov online and understand the terminology. We have called Dave to help us place a bid and show us what is required. He did online training over the phone with us. We placed three bids for 150 handicapped portable toilets for three Air Force Bases. We lost the bids in North Dakota and Montana but won the bid in Wyoming. The bid is for two years for 150 toilets. I called Dave while processing my first invoice through Wide Area Work Flow. He was very helpful. We are thankful for all the help we have received. We are proceeding to look for more opportunities every day through BidMatch."
are you looking to go global? The North Dakota Trade Office Makes International Trade Attainable
D
o you have dreams of making a global impact? Through programs at the North Dakota Trade Office (NDTO) such as the State Trade and Export Promotion Grant Program (STEP), exporting your goods and services can be easier than you think.
State Trade And Export Promotion Grant Program (STEP)
Eligible small businesses can receive matching funds through STEP. This SBAfunded grant program helps you enter the international market place. The program has $247,614 of federal funding available for use over a two-year period in North Dakota. These matched funds may also be used to help pay for a portion of the RAISE program fee. STEP funds can also be applied to expenses such as your airfare, hotel, trade show booth costs, shipping of sample materials, currency exchange fees and foreign language marketing materials.
Specialty Crop Export Program
This funding through the NDTO is a reimbursement program available to eligible businesses to increase the global presence of our local peas, beans, lentils and confectionery sunflowers. Outbound trade missions are led by the NDTO in Italy-Croatia, Columbia and Israel to help companies establish international expansion plans.
NDTO.com 811 2nd Ave. N. Ste. 284, Fargo 701-231-1150 FARGOINC.COM
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nd exports
around the world North Dakota exports merchandise to over 180 countries annually with the help of the North Dakota Trade Office. In 2017, over $5.8 billion of merchandise were exported around the world and over $20.6 billion were exported from 2014 to 2017.
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E
xport.gov is managed by the International Trade Administration and provides advice, insight and tools to help companies expand into markets across the globe. Some of their international guidance programs are listed below.
Rural America's Intelligence Service For Exporters (RAISE) More than 50 companies in North Dakota and Northwest Minnesota have moved into global markets with the assistance of the RAISE program. Through this program at the U.S. Commercial Service/ND Office, you pick your top three countries you are interested in exporting to. Researchers then help you navigate the marketplace by identifying buyers and industry trends, developing strategies and more. Local businesses have reported to have valued the research they received from the program between $20,000 and $80,000 when compared to the expense of hiring private consultants to collect similar information.
Terri Zimmerman CEO, Botlink Fargo â&#x20AC;&#x153;When doing business in Brazil, we partnered with the U.S. Commercial Service in North Dakota and Brazil. With the research from the U.S. Commercial Service, we were able to connect with prospective partners in advance of our travel and accelerate our business discussions during our visit. What could have been a month long wild goose chase was instead a productive week-long road show. None of this would have been possible without the quality information and connections that were done by the U.S. Commercial Service in North Dakota and Brazil.â&#x20AC;?
Exportech Program
The Exportech Program pairs eight noncompetitive companies together for three full-day sessions over a three-month period. During the sessions, you'll work on your international growth plans and strategies, as well as identify hurdles. A panel of experts is also available to allow for accelerated growth and assistance.
Gold Key Service
With multiple levels of service, this program allows companies to be matched with up to five interested companies in a foreign market. Depending on the package you choose, you can have contacts identified for you, have meetings arranged and even have a member of the Gold Key team attend meetings with you.
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John Diem Regional Sales Manager, Steffes Dickinson, ND "The ICP report was very informative and thorough, and we continue to move forward with our new Polish customer. The in-depth research, coaching and in-market connections were game changers for our company. After ten years of skepticism, we now have the tools, resources and confidence to pursue international markets.â&#x20AC;?
Kevin Christensen Palmer Bit Co. Williston, ND "We have gained new go-tomarket strategies, procedures and a mindset for global sales. Our in-depth research report led to Germany, which led to direct contact with relevant contacts. Priceless"
Steve Johnson President, Talc USA Page, ND "It took our company from 'eyes wide shut' to 'eyes wide open.' It really lit a fire knowing the potential for sales outside our border. The RAISE program took a broad thought to a narrow focus. It took our company from wondering if our product was a fit in other countries to international customer inquiring about our products. When a program like RAISE can find a group of international customers within a foreign country who have interest in your product and these companies are willing to sit down across a table and listen and take interest in your product, it is invaluable! We have just dipped our toe into Canada for our first year and have increased our sales by 10 percent. The STEP program allows a small business like ours to utilize funds to grow. Without this program, small and rural businesses are at a huge disadvantage to connect with international business."
become a
franchisee
Interested in owning a large chain with an established following? Want to begin franchising your business? Did you know that North Dakota is one of only 15 states that require you to register with the Securities Department? The prospective franchisee must receive a copy of the Franchise Disclosure document a minimum of 14 days before the agreement date. Still exploring the option of investing in a franchise or opening your own local business? The Federal Trade Commission has a guide to help future franchisee operators - and franchisors - navigate the many questions they may have at FTC.gov/Tips-Advice/Business-Center/Guidance.
Franchise Disclosure Document (FDD) Checklist Cover letter Application page Franchisor's costs and sources of funds form Auditor's consent form Uniform consent to service of process Certification page Salesman disclosure forms Proposed unbound FDD, CD-ROM or USB flash drive Advertising proposed for use in North Dakota Filing fee of $250 One form of financial assurances
did you know? Franchise fees are non-refundable and can be upwards of
several hundred thousand dollars Some agreements may run for as many as
20 years You may pay
royalties
based on a percentage of your weekly or monthly gross income.
Registration is typically valid for one year from your registration date unless otherwise noted FARGOINC.COM
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expanding
beyond nd Streamlined Sales & Use Tax Project The Streamlined Sales Tax Registration System allows people to register for sales tax purposes with all of the states that are members of the Streamlined Sales Tax Governing Board in a single registration. Once the form is completed, participants will have a sales tax account and be required to collect, report and remit the applicable sales and use tax in all the following Streamlined member states: Arkansas, Georgia, Indiana, Iowa, Kansas, Kentucky, Michigan, Minnesota, Nebraska, Nevada, New Jersey, North Carolina, North Dakota, Ohio, Oklahoma, Rhode Island, South Dakota, Utah, Vermont, Washington, West Virginia, Wisconsin and Wyoming. More information can be found at ND.gov/Tax
pro Tax Breaks
You may save money if taxes are lower in your incorporated state.
Business Laws
Many (typically large) businesses look to Delaware to be their business's home base as it is known for its business law efficiency and litigation.
Privacy
Laws on what information must be public varies from state to state. Some information, including ownership names and addresses, are not required to be public in certain states.
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Do you sell products on your website to consumers in other states? Due to a ruling from the U.S. Supreme Court, internet-based companies are now required to charge sales tax. However, there is a way to simplify this process for companies to collect taxes on sales in other states when they do not hold a physical presence in the state with the Streamlined Sales & Use Tax Project.
Foreign Qualification If you organize your business in one state but operate in another, you may need to submit for foreign qualification. Foreign qualifying your company in states where you conduct business does require some added paperwork and annual fees; however, it's your legal obligation to do so. Failing to register in these other states could result in paying fines and back taxes. Here are some pros and cons of out-of-state incorporation. You will see that most businesses that benefit from foreign qualification are larger corporations or those that are at high risk for litigation and would benefit from operating in a state like Delaware.
con Double Taxation
You may be required to pay taxes in both your home state and your state of incorporation.
More Compliance
You will have to register your business in both your home state and the one you conduct business in. This means that you will need to follow the compliance laws in both states.
a quick look at Kirk Anton
Heat Transfer Warehouse Fargo | Las Vegas Cincinnati | Jacksonville "If you think you can do business just like you do in North Dakota, you need to be prepared to adapt and learn the culture around you. This will help with your work force recruitment and retention. The saying, "You're not in Kansas anymore, Toto," goes a long ways. Study and research any out of state locations before you decide to go there and look up local and state rules that may hinder what you want to do."
acquisition and mergers merg•er
ac•qui•si•tion
The absorption of two or more businesses into a single entity.
One company purchases the ownership of another company.
To obtain forms required for your merger, you can access the North Dakota Century Code at Legis.ND.gov/General-Information/North-Dakota-Century-Code A $50 filing fee to the Secretary of State would also be required.
If you acquire a business in North Dakota, you will want to obtain a tax clearance letter from the state to ensure you are not going to be held responsible for any of the seller's unpaid taxes. The Certificate of Good Standing can be requested from the Office of State Tax Commissioner. You should also check with the UCC records on the Secretary of State's website to see if there are any unpaid liens associated with the business. Other local tax obligations and private contracts that remain unpaid may also exist. Your time researching the current finances of the company you are potentially acquiring would be well spent. Please contact your trusted legal advisor for other forms and requirements that may be required for your business transition.
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so i have 22 employees,
what laws am I required to follow? As with most things when dealing with the government, there are a number of exceptions to these. We are presenting this only as a way to make sure you are covered when it comes to some of these. We encourage you to talk to an expert if you think your business must meet one of these.
number of employees
As your business grows, so too does the way you have to run it. Depending on the number of employees you have, there are certain requirements you may fall under. To help you out, Kevin and Charlie Wilson of CBI Business Services, an HR firm in Fargo, helped us compile a short list of some of the most common laws businesses are required to do based on the number of employees they have.
Affordable Care Act Family and Medical Leave Act
50+
COBRA
20+
North Dakota Mini Cobra New Hire Reporting
Consumer Credit Protection Act (wage garnishments) Employee Polygraph Protection Act (EPPA) Fair Labor Standards Act (FLSA) Fair Labor Standards Act (FLSA)/Child Labor Occupational Safety and Health Act (OSH Act) Uniformed Services Employment and Reemployment Rights Act (USERRA) Whistleblower Protection Provisions
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under 20
1-10
FirstStep Employment Law Advisor Unless you’re a lawyer or in a major corporation, it’s almost impossible to know all the different laws your business is required to follow. The FirstStep Employment Law Advisor helps employers determine which federal employment laws your business must meet. It will ask you a series of questions about your business and, at the end, provide you with a list of the major laws you are required to follow. Note: This is meant as a guide of major Department of Labor laws and doesn’t cover all the laws administered by the DOL or state laws.
webapps.dol.gov/elaws/firststep
COBRA (Consolidated Omnibus Budget Reconciliation Act) COBRA basically requires that coverage continues for employees, spouses, former spouses and dependent children when group health coverage is lost due to certain specific events. The law generally applies to all group health plans maintained by private-sector employers with 20 or more employees. The law does not apply to plans sponsored by the Federal Government or by churches and certain church-related organizations. In addition, many states have laws similar to COBRA, including those that apply to health insurers of employers with less than 20 employees (sometimes called miniCOBRA). dol.gov/general/topic/health-plans/cobra
Family and Medical Leave Act The FMLA entitles eligible employees of covered employers to take unpaid, jobprotected leave for specified family and medical reasons with continuation of group health insurance coverage under the same terms and conditions as if the employee had not taken leave. The FMLA applies to all: • public agencies, including local, state and federal employers, and local education agencies (schools); and • private sector employers who employ 50 or more employees for at least 20 workweeks in the current or preceding calendar year – including joint employers and successors of covered employers. dol.gov/whd/fmla
North Dakota Mini Cobra If your employer has less than 20 employees, you will fall under North Dakota's law that identifies the specific rules and regulations to continue your group health coverage. Like COBRA, coverage is only temporary – 39 weeks. Employees must also pay the entire premium to your employer.
Minimum Wage In North Dakota, minimum wage is $7.25 as of January 1.
Affordable Care Act The Affordable Care Act, or health care law, contains benefits and responsibilities for employers. The size and structure of your workforce determines what applies to you. Some of the provisions of the Affordable Care Act, or health care law, apply only to applicable large employers, generally those with 50 or more full-time employees. For example, applicable large employers have annual reporting responsibilities concerning whether and what health insurance they offered to their full-time employees (and their dependents). There are many provisions to this law that will touch every business no matter the size. For example, you must withhold and report an additional 0.9 percent on employee wages or compensation that exceeds $200,000. The type of insurance plan you provide employees can also change what you are required to comply with. You may only employ 30 people but if you offer a selfinsured plan, you must file an annual return reporting certain information for each employee you cover. irs.gov/affordable-care-act/employers
New Hire Reporting Federal and state laws require all employers to report all newly hired employees to the State Directory of New Hires within 20 days of the employee’s first day of work. This includes full time, part time and temporary employees. Search new hire reporting North Dakota to find the forms.
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exit stage TABLE OF CONTENTS health 88 Financial check stock 90-91 Employee option plans sale 92-93 Business options happens to 94-95 What your company when you sell or retire?
You have been your own boss for years now. You have made a good living and dominated the goals you have set for your company along the way. Employees have come and gone, and now it's time for you to do the same. But what does that mean? Are you set up financially? Do you sell, pass your business on or simply close the doors? It's time to slow down and decide how your business will live on or if it will simply remain a legend as you close up shop.
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keep it in the family
or sell?
As a business owner, you have worked every day to make sure the "end" never comes. But someday, it will. You've held your nose to the grindstone and deserve a retirement. How will your legacy carry on? What is the best route for your business succession? Consider these questions to navigate your way across the finish line.
PERFORM A FINANCIAL HEALTH CHECK WITH THE SBA OR SBDC
Is the next generation interested and capable or running your business?
YES
NO
Does the business have a strong foreseeable future?
NO
YES
Hybrid Approach
Do you have a strong retirement set up?
Partial/Gradual Sale Management buyout with family succession Hire a potential future buyer
YES NO
Pass on to the next generation
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Sell to buyer outside of the family
keep your team
strong and loyal E
mployee Stock Ownership Plans provide an option for a company to make tax-deductible contributions to a trust fund. Shares in the trust are then allocated amongst the company's employees. Loyalty with a company is rewarded as the employee acquires more shares the longer they are with a company. Employees must be fully vested within three to six years of their involvement with the ESOP.
Gary Tharaldson, owner of Tharaldson Hospitality Management, credits his ESOP with shifting the operation of his company. "We went from being a small operator to being one of the best in the industry. We still maintain that today. You can't do that if you don't take care of your employees. The ESOP helped me take care of my employees," he stated in an interview with us in October. The Minnesota/Dakotas Chapter of The ESOP Association is made up of approximately 135 companies and is an active voice before Congress. Almost 99 percent of these members are privately held companies. The association states on its website that in the Dakotas and Minnesota, the average size of a company that has an ESOP in place in the region has less than 250 employees and half of them are 100 percent employee owned businesses.
plans
total participants
total plan assets (millions)
all stand-alone esops
5,505
1,745,603
$133,413
private companies
5,375
1,330,339
$107,481
large private companies
2,031
1,190,685
$95,356
small private companies
3,344
139,655
$12,124
129
415,264
$25,932
public companies
*Stats according to the National Center for Employee Ownership 90
JANUARY 2019
Patrick J. McCloskey described in Tharaldson's biography "Open Secrets of Success" four important benefits an ESOP offers.
There are no upfront costs for the employees. Although setting up an ESOP might cost as much as $250,000 in legal fees, the owner pays these. Whatever percentage of the company the employees buy, the purchase amount comes totally out of profits going forward.
Kendra Goette
Industrial Staffing Consultant Preference Employment Solutions (10 years as ESOP company) "Being an ESOP makes you care more about your company and it's not just going to work. It's not just a job. This is your company. You have a hand in this company and I think that is one of the biggest and coolest things about being in an ESOP."
The owner pays no tax on the transfer of ownership since the employees won't begin to pay for the company until after acquiring their share of ownership.
As long as the employees are buying more than 30 percent of the company, capital gains taxes are deferred completely, with the provision that any investments from profits are made in American companies.
An ESOP supplies a succession plan. The central idea here is that people who know the company and the industry best are the ones who end up running the company. They also have an acutely vested interest in long-term sustainability and growth.
Thinking of selling your business? Capital Gains vs. Ordinary Income
Stock Sale vs. Asset Sale
The amount of tax you pay is based on the profit you make from selling your business. There are two ways that profit is calculated: ordinary income and capital gains. Capital gains are taxed at a much lower rate (a maximum of 15 or 20 percent) than ordinary income, which can be as high as 37 percent.
Your income can be classified as either ordinary income or capital gain income and it can vary significantly depending upon whether you're selling stock versus selling assets. The Buyers Will generally want to buy assets (versus stock), which will generally provide better tax benefits to the buyer. Sellers Will generally want to sell stock, which will generally generate capital gain income versus ordinary income to the seller.
Buyers And Sellers Must Use The Same Allocation in an asset sale Buyers Want as much money allocated to deductible items to improve cash flow and reduce taxes in first years of operation
Sellers Want as much money allocated to assets that can be treated as capital gains instead of ordinary income, which would be taxed at a higher rate. This allocation should be negotiated and outlined in the sales contract.
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When you sell your business, you hope to be lining your pockets like the Monopoly man passing go. Did you know you may pay as much as half the purchase price in taxes if you're not careful? Here's a brief overview of the federal taxes you may pay when you sell your business and some tips to help you maximize your profits. Please be sure to consult a tax expert with any major business purchase or sale.
Installment Sale If you are able to take a note or finance the sale of your business, you may be able to report some of your capital gains on the installment method, which allows you to defer some of the tax until you get paid in subsequent years. If you receive at least one payment after the first year proceeding the year of sale, you may qualify to use this method. It is important to note that, generally, only "capital gain income" qualifies for an installment sale.
Plan Ahead: Switch To An S Corporation Michael J. Sundquist
CPA Fiebiger, Swanson, West & Co., Fargo, N.D.
"Do not delay a discussion regarding a potential sale of your business; it is never too early to begin these discussions. These early discussions could provide planning opportunities that might not otherwise exist and could save you a significant amount of taxes."
If you are thinking about selling your business in a few years and you are currently operating as a C corporation, you may want to consider switching to an S corporation structure now. You would need to have an appraisal done at the time of the switch but this could reduce or eliminate the potential double taxation as a C corporation.
Tax-Free Deferment If you are an incorporated business and you sell to a larger corporation, you may be able to defer any tax by accepting the purchaser's stock in exchange for your own business stock.
Summary
Selling your business can be a very complicated transaction with significantly different income taxes depending on how the sale is structured. You should involve your tax expert, attorney and any other advisors before the sale occurs. It is recommended that you start discussing a potential sale with these advisors today to be able to plan for a potential sale, sooner rather than later.
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5 INTELLECTUAL PROPERTY ISSUES THAT CAN KILL YOUR EXIT STRATEGY
E
very business owner looks forward to a fruitful transition out of their business. Whether because of retirement, a strategic move or a desire to do something else, lining up your intellectual property can avoid some major heartburn when the time comes. Below are issues we at Danielson Legal commonly see creating problems for companies selling their businesses. For any of these issues, the best course of action is to consult with an experienced IP attorney. If you don't know one, asking your business attorney for a referral is often a good way to find one.
By
Miguel Danielson
Founder & Managing Member Danielson Legal
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TM
R
C
P
Bad Trademarks
Failing to clear trademarks before using them, and failing to register them after you adopt them, creates major risks. Someone buying a company does not want to buy these risks. If you havenâ&#x20AC;&#x2122;t done your homework on the trademarks you use, you will face a lowered price for your business and could be on the hook for issues that develop after the sale.
Not Owning What You Need
Getting clear ownership of your companyâ&#x20AC;&#x2122;s IP, for everything from software your employees develop to graphic design that an independent contractor provides, is critically important. In most cases, you want clear, written agreements from everyone who has created anything for you, which gives you ownership of that work. Failing to have these agreements by time of sale means you could be forced into getting a large round of last-minute signatures on documents that people are hesitant to sign, or face the risks of failing to do so.
Poor Patent Coverage
If your company is in the business of innovation, buyers will expect to see that youâ&#x20AC;&#x2122;ve covered your patent bases. This means having some kind of patent strategy, if not patent applications or issued patents. Often times, having at least provisional patent rights will be a strong selling point in the event of an exit, so getting your patent game in order can really help the bottom line.
Failing to Protect Confidentiality
Securing your confidential information is critical for just about any business. Anyone who discusses sensitive financial, strategic or technical issues without a proper Non-Disclosure Agreement (NDA) is begging for trouble. Anyone who buys another company will want to make sure that company has consistently and faithfully used a strong NDA whenever dealing with vendors, prospective partners and anyone else outside the company. Employees should also always be required to sign a NDA, particularly if they work on any sensitive information in their job.
Weak Privacy Protection
Does your business involve keeping information about customers, whether that be email addresses, social security numbers or (gasp) financial or health-related information? If so, you need to have strong and effective measures in place to protect that information and convey to customers what is being done with their information in a way that they understand and agree to. If you are an international business and have data from EU residents in your systems, even if those systems are controlled by a third party, you have additional requirements under the General Data Protection Regulation of the EU. Suffice it to say that this can be a real can of worms if youâ&#x20AC;&#x2122;ve never taken care of your privacy obligations prior to sale of your company.
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index
Gold Key Service 78 Grants 55 sba.gov/funding-programs/grants
a
e
Affordable Care Act 84, 85 IRS.gov/affordable-care-act/employers
Employee Posters 27 nd.gov/labor/required-employerposters
Accelerated Growth Loan Program 56 bnd.nd.gov/business/acceleratedgrowth-loan-program
Asset Sale 92
B
Bank of North Dakota 56 bnd.nd.gov Bismarck Aero Center 45 bismarckaero.com Blink Eyewear 30 blinkeyewearnd.com Botlink 78 botlink.com Brudvik Law 46
C
Capital Gains 92 CBI Business Services 84 Center for Technology and Business 36 trainingnd.com Certificate of Good Standing 83 sos.nd.gov/business/business-services Child Labor Occupational Safety & Health Act 84 COBRA 84, 85 dol.gov/general/topic/health-plans/ cobra Consumer Credit Protection Act 84 Cozy Cafe 33 facebook.com/cozycafecando Crossroads Program 51 nd.gov/dhs/services/financialhelp/ crossroads.html
d
Dakota Business Lending 54 Danielson Legal 94 Dun & Bradstreet Data Universal Number System 72 fedgov.dnb.com/webform
Emergency Management Institute 64 training.fema.gov
Employee Stock Ownership Plan 90, 91 Employer Identification Number 28,72 irs.gov/smallbiz Employer's Quarterly Federal Tax Return Form 941 27 irs.gov/pub/irs-pdf/f941.pdf Employer's Tax Withholding Form W-4 27 irs.gov/pub/irs-pdf/fw4.pdf ESOP Association 90, 91 mndak-esop.org Export Enhancement Program 56 bnd.nd.gov/business/exportenhancement-program/ Exportech Program 78
f
Fair Labor Standards Act 84 Family and Medical Leave Act 68, 84, 85 dol.gov/whl/fmla Federal Bonding Program 50, 52 jobsnd.com/federal-and-stateresources/federal-bonding-program Federal Trade Commission 81 FTC.gov FEMA Student Identification Number 64 cdp.dhs.gov/femasid Fiebiger, Swanson, West & Co 39, 93 fsw-co.com
i
Information Technology Division 60 nd.gov/itd Installment Sale 92 Insurance Department 60 nd.gov/ndins Internal Revenue Service 39 irs.gov Internal Trade Administration 78
j
Job Service ND 50, 51, 52, 53, 60, 61 jobsnd.com
l
North Dakota Economic Development Foundation 49 business.nd.gov North Dakota Gateway 60, 61 North Dakota Legislative Branch 62 legis.nd.gov North Dakota Mini Cobra 84, 85 North Dakota New Jobs Training Program 52 North Dakota Procurement Technical Assistance Center 72, 73 ndptac.org North Dakota Secretary of State Office 28, 60, 62 sos.nd.gov North Dakota Small Business Development Center 31, 33, 73 ndsbdc.org
Lake Agassiz Regional Development Corporation 54 lakeagassiz.com
North Dakota State Trade And Export Promotion Grant Program (STEP) 75 ndto.com/step-nd
Limited Liability Company (LLC) 40
North Dakota Trade Office 75, 76 NDTO.com
M
Match Program 56 bnd.nd.gov/business/match-program
North Dakota Women's Business Center 32 wbdc.org/about-us/locations/northdakota
Microloans 54 lakeagassiz.com/business-lending/sbamicroloan-program
North Dakota Workforce Intelligence 50 ndworkforceintelligence.com
Mondak Portables 73 mondakportables.com
o
n National Federation of Independent Business and Forum News 68, 69 nfib.com
Office of the Governor 60 governor.nd.gov Office of the Tax Commissioner 60, 61 nd.gov/tax/ Online Security 39 IRS.gov/securitysummit
NDSU Research and Technology Park 36 ndsuresearchpark.com
Operation Intern 45 operationintern.com
Forum News 68
New Hire Reporting 84, 85
Ordinary Income 92
FirstStep Employment Law Advisor 85 webapps.dol.gov/firststep
Nexus Innovations 32 nexusinnovations.com
p
Franchise Disclosure Document 81 nd.gov/securities/franchise-registration/ franchise-registration-renewal
General Partnerships 40 JANUARY 2019
Heat Transfer Warehouse 83
North Dakota Department of Labor 47
Find the Good Life 49 findthegoodlifeinnorthdakota.com
G 96
H
North Dakota Department of Commerce 38, 45, 60 commerce.nd.gov
North American Industry Classification System 72 census.gov/eas/www/NAICS North Dakota Century Code 42, 83 legis.nd.gov/general-information/northdakota-century-code
PACE Program 56 bnd.nd.gov/business/pace-program Palmer Bit Co. 78 palmerbit.com Preference Employment Solutions 91
r
Remote Seller Sales Tax 38 streamlinedsalestax.org Rural America's Intelligence Service for Exporters (RAISE) 75, 78
s
S Corporation 93 nd.gov/tax/user/businesses/ formspublications/s-corp--partnershiptax SBA 35, 54, 55, 72, 73 sba.gov/funding-programs/loans SBIC Investment Match 55 sba.gov/partners/sbics SCORE 30 score.org Secretary of State 61, 83 sos.nd.gov Securities Department 60 nd.gov/securities/ Small Biz Cyber Planner 63 fcc.gov/cyberplanner Small Business Association Learning Courses 35 sba.gov/learningcenter
Tharaldson Hospitality Management 90, 91 tharaldsonhm.com Trade Adjustment Assistance 52 jobsnd.com/business/fundingworkforce-training TruCore Fitness 31 trucorefitness.com
u
Uniformed Services Employment & Reemployment Rights Act 84 U.S. Citizenship Form I-9 27 uscis.gov/i-9-central U.S. Copyright Office 28 copyright.gov U.S. Occupational Safety & Health Administration (OSHA) 27 osha.gov U.S. Patent and Trademark Office 28 uspto.gov UND Center for Innovation 36 innovators.net United States Congress Tracker 62 govtrack.us US Government online guide 65 usa.gov
Sole Proprietorship 40 Specialty Crop Export Program 75 ndto.com/specialty-crop-grant/ specialty-crop-export-programguidelines State Directory of New Hires 27 childsupport.dhs.nd.gov/employers/ new-hire-reporting Steffes 78 steffes.com Stock Sale 92 Streamlined Sales & Use Tax Project 82 nd.gov/tax/user/businesses/ formspublications/sales-use-tax/ streamlined-sales--use System for Award Management 72, 73 SAM.gov
t
v Veterans Business Outreach Center 33 ndsbdc.org/vboc-advising-1.cfm
w
Wage & Tax Statement Form 27 socialsecurity.gov/employer Whistleblower Protection Provisions 84 Work Opportunity Tax Credit Program 50 jobsnd.com/wotc Worker's Compensation Insurance 27 workforcesafety.com Workforce Development Council 66 workforce.nd.gov
TALC USA 78 talcusa.com
Workforce Innovation and Opportunity Act 52 nd.gov/dhs/dvr/wioa/wioa.html
Taxpayer Access Point 38 apps.nd.gov/tax/tap
Workforce Safety Insurance 27, 60, 61 workforcesafety.com
Tax Permits 28 nd.gov/tax/user/businesses/overview/ new-businesses
z
Zorell's Jewelry 31 zorells.com
Living A Life Of Respect And Justice Allegro Group Founder and CEO, Kara Jorvig, has a passion for local business. She enjoys sitting with business leaders throughout the region to discuss leadership, business strategy and their personal journeys. This month, United States Attorney for the District of North Dakota, Chris Myers, had some iced coffee with Jorvig to discuss the realities of his high profile job, lessons he's learned along the way and how hockey has influenced his leadership philosophies. US Attorney for North Dakota Chris Myers is an avid hockey fan, Jorvig talked with him on the ice at Scheels Arena. 100
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J. ALAN PAUL AND PATRICK THOMPSON
THE CONVERSATION Kara Jorvig: Do you think people know or understand what it means to be the US Attorney? Chris Myers: I think some people know but some people may not understand exactly what we do in the U.S. Attorney's office. We prosecute federal criminal cases from child exploitation cases to drug trafficking cases to firearms, kidnappings, lots of cases from the four major reservations in North Dakota. You name it, we handle it on the prosecution side. And then we have a civil unit that handles defensive civil cases where somebody sues the federal government but we also have affirmative civil cases where, for example, somebody trespasses on mineral rights, the United States might file suits to recover monetary damages. Our practice in the U.S. Attorney's office is broad and diverse but we're most known for prosecuting high profile criminal cases. Jorvig: What do you think some of the traits or characteristics are of your mentors that you most admire or that you try to develop within yourself to be a good leader? Myers: I think from my dad, the one thing I learned early on is he always preached, 'Do the right thing.' And that is particularly well suited for what we do on a day to day basis in law enforcement. Our job as prosecutors isn't just about getting the conviction but to get justice. In its very essence, that's doing
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"Don't try to do everything yourself. Rely on folks within your organization to help you make decisions, help you lead the office and, with that, trust the folks that you work with to do their part and delegate what you can to them to help you run the organization." - U.S. Attorney for the District of North Dakota Chris Myers
the right thing. That has served me very well and I know the rest of the folks in law enforcement would feel that way and it's good to wear the white hat so to speak. Jorvig: What are some of the hard lessons that you've learned in managing an office on top of the case load that you carry? Myers: It is an isolating role being at the top of an organization and you have to make tough decisions and you have to make decisions that a lot of people may be unhappy with, or at least some of the people are. Of course you can't make everybody happy. Along the lines of resilience, I think you learn that you shouldn't strive to make everybody happy, you should strive to make the best decisions for the organization and then
move on and not worry about it. Learn from your mistakes as you move on from your decisions. Jorvig: Another thing I hear from leaders that talk about the struggles of being liked, or what do people think of me, have you ever struggled with likability versus leadership? Myers: As people, everybody wants to be liked. As you move along in the leadership career, you have to just realize that the goal of a leader is not to be liked but to be an effective leader. You can have both at times, but not all the time. I think if everybody likes you all the time, you're probably not doing what you need to do to move an organization forward but I think it would be disingenuous to say that I didn't hope
that everybody liked me. But, at the end of the day, it kind of parallels with hockey, it's about respect. I hope that folks respect the work that I have put in and the decisions that I've made, even though they might not agree with them.
years and years and I enjoy that part of the game as well. I am just an overall fan of the game and so this is a perfect venue for this interview. I feel at home in a hockey rink. I have spent a lot of time in hockey rinks and I love the sport.
Jorvig: When I have an opportunity like this to meet somebody that has a higher profile position or that has a certain level of leadership, responsibility to the community, business or team, you're often perceived as being serious and that's part of the job. But there's a lighter side to you as well. You're also a hockey player and coach. This (hockey rink) is your comfort zone outside of the court room, right?
Jorvig: When you think about your experience playing hockey, or even coaching it, are there things about that you take to the court room?
Myers: I grew up playing hockey and I have three kids that I have coached for
Myers: Hockey, like any other sport, is great to teach the reality of life. One thing that you can take away from hockey, and why I like hockey in particular, is that the culture of the game is about respect. You can battle on the ice, and even drop the gloves and fight on the ice, but, at the end of the game, everybody shakes hands and you move on.
Quick Facts About the U.S. Attorney in North Dakota
• One of 93 U.S. Attorneys in the United States • Top Federal law enforcement official in the state of North Dakota • Over 50 employees with offices in Fargo and Bismarck • Works for the Executive Branch reporting directly to the Attorney General and Deputy Attorney General of the United States • Since March of 2015 and pursuant to the Vacancies Reform Act, Chris Myers has served as Acting U.S. Attorney, Interim U.S. Attorney and was appointed by Judge Ralph Erickson as U.S. Attorney in February 2016. Myers was preceded by Tim Purdon.
High-profile cases 'Operation Denial' Fentanyl trafficking conspiracy involving numerous overdoses with over 30 defendants charged, including Canadian and Chinese nationals (2015 to present)
U.S. v. Modesto Torrez A methamphetamine trafficking case involving the murder of Austin Forsman at the Flyin' J travel plaza in Grand Forks in 2016. Torrez is serving a life sentence.
U.S. v. Valentino Bagola Murder of 9 year old Destiny Shaw and 6 year old Travis Dubois, Jr. on the Spirit Lake Reservation in 2011. Bagola is serving a life sentence.
"I am proud to play a small part in the history of an office that has a strong tradition of handling legendary prosecutions such as Leonard Peltier, involving the murder of FBI Agents Jack Coler and Ron Williams in 1975; Yori Kahl and Scott Faul involving murders of U.S. Marshal Kenneth Muir and Deputy U.S. Marshal Bob Cheshire in Medina, ND in 1983; Alfonso Rodriguez involving the kidnapping and murder of Dru Sjodin in Grand Forks in 2003." - Chris Myers
That's why I enjoy coaching. You can teach kids a lot about life through the game. Chris Myers with former United States Attorney General Jeff Sessions.
Jorvig: Transitions are inevitable especially in the role of U.S. Attorney. How do you ensure your office is ready for a change in leadership, when that time comes? Myers: I've worked with great people over the years; Lisa Borgen was one of my earliest bosses, at the Clay County Attorney's office, and former U.S. Attorneys Drew Wrigley and Tim Purdon. I've learned a ton from them and try to take what I really like about their leadership abilities and incorporate it the best I can into what I do on a day-to-day basis. Even with the uncertainty of how long my tenure as U.S. Attorney would last, our focus has always been on making sure the office functions the best that it can and is always ready for the next leader. I think it's important for leaders to realize that transitions are inevitable, no matter what type of organization you lead and you always should want to leave it in better shape than you found it. We've had a great office for as long as I've known about the office and that tradition will continue. Jorvig: What does success mean to you in life? Myers: Success to me really is about
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having peace of mind. Knowing that when I look in the mirror, I reflect upon what I've done, whether it's in my personal life or professional life, I want to be able to say I did what I could to make a difference. I think at the end of the day if I can finish my career with that feeling and that reflection, I feel it has been a success. Similarly, as my kids grow up and they transition into adulthood, I hope that they transition into good people. If I accomplish that, I feel that it's been a really good life. Jorvig: I am passionate about work as well and we have talked a little bit offline about just having fun and really enjoying your craft. Why do you love what you do? Myers: I enjoy the work because of working with law enforcement to solve the crime, so to speak. Whether it is a criminal organization or somebody that committed a murder, we work with law enforcement to try to identify the folks involved and to target them and to dismantle, for example, a criminal organization. There is a lot of work that is involved, there is a lot of strategy that is involved and, to a certain extent, it is a chess game of trying to catch folks that are trying not to be caught. And some of them are very smart. That part, most days, doesn't seem like work. It seems like a calling. The folks that work around here, not only in our office but local law enforcement, absolutely love where we live and want to keep this place as safe and
'Operation Speed Racer' Over 60 defendants convicted involved in drug trafficking from Mexico with ties to the ArellanoFelix cartel; case involved the 2005 murder of Lee Avila in East Grand Forks, MN (2004 to present). Gabriel Martinez is serving a life sentence for his role in the murder.
U.S. v. Michael Gianakos Kidnapping and murder of Ann Marie Camp in 1997; Federal trial commenced in Bismarck in 2003. Gianakos is serving a life sentence.
secure as we can and we work really hard to do that. This community is growing and so is the state, and with that, you get a little bit more of the criminal element but we do the best we can to make sure that they know we're here and we are going to address what they do and their bad decisions accordingly. Most days I kind of wonder to myself, I can't believe they pay us to do this. That is how fun it can be but with that there is stress and I just try to balance that the best that I can.
like the Sherlock Holmes of North Dakota. What's your superpower?
Jorvig: It is such a unique career. I think that is what is most fascinating. Do you think you can train yourself to be really good at this or does your mind work a certain way? Myers: In any job or career, you can learn better or more efficient ways to do the job. But I think people that are really good at what they do, there is something in them that just naturally clicks and they can't explain why they are really good at that particular aspect, whether it's a professional athlete or somebody that does interviews or us when we investigate cases. I can't explain why our team is so very good at what we do. A lot of it is just hard work to be honest with you. I think that is 90 percent of the game. Jorvig: I was at a leadership training and they explained that everybody should be able to identify their superpower. You are
Myers: No, I don't have any superpowers but I think I do a good job of relating with agents and working with agents directing the investigations but I am also able to communicate what the case is about and advocate for the United States, or the state for that matter, in court effectively with juries. And that has come from just doing it. Practice. Preparation. There is nothing magical about it other than putting the work in to be ready and do the best you can and hope things work out.
Watch this Interview
Go to FargoInc.com and visit Fargo INC! on LinkedIn and Facebook to see video of the full interview, including behindthe-scenes outtakes and Kara driving a Zamboni.
Jorvig: So what advice would you have for leaders? Myers: Don't try to do everything yourself. Rely on folks within your organization to help you make decisions, help you lead the office and, with that, trust the folks that you work with to do their part and delegate what you can to them to help you run the organization. I think that is really important to rely on a team, rather than an individual. It doesn't matter what kind of organization you're running, whether you're coaching a hockey team or running a Fortune 500 company, relying on those that have the same issue and ethical values as you to run that organization, you will be more successful than if you were to try to do it alone.
allegro-group.com justice.gov/usao-nd
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THE TRANSFORMATION OF
Recruitment
How to drive recruitment in a candidate-driven market By Brenda Johnson, SPHR, SHRM-SPC
I
t’s no secret that businesses are facing talent shortages, making recruiting and retaining top talent highly competitive. “At most companies, people spend two percent of their time recruiting and 75 percent managing their recruiting mistakes,” said Richard Fairbank, CEO of Capital One. Recruiting efforts become the next fire drill rather than a pillar of a strategic initiative. According to various sources, 72 percent of employers struggle to source qualified candidates for open positions. As everyone reading this article knows, the regional labor market is candidate-driven, with 73 percent passive candidates (candidates not planning on making a near-term career change) and few options for top candidates, especially when you have specific cultural needs. Organizations are seeing an increase in candidates “ghosting” interviews and emails partly due to the interview process spanning weeks to months with little or no engagement from the hiring and recruitment teams. Candidates are expecting competitive salaries and benefit packages. To drive success in a candidate-driven market, it helps to focus on candidate experience, decrease the time to hire and understand your organization’s place in the market – leading, meeting or lagging in competitive salaries and benefits – adapting your selection process accordingly. Finding ways to select the right people and retain them has never been more important. Reinvesting in your existing workforce through professional development remains a strong strategy, and one that is often overlooked. At the end of the day, as John Maxwell says in Chris Cebollero’s article
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“It’s Not About Hiring Great Employees, It’s About Engaging Your Current Workforce,” “I would rather have a high-performing employee leave than have a mediocre employee stay.” This mindset will naturally help your best employees develop, creating a strong internal pipeline of talent. This strategy also benefits your employees, supports loyalty, builds your brand and naturally attracts even more good talent. I can think of many times I have personally attempted to recruit an individual, and they won’t budge. Each time this has happened, I am impressed. I see those organizations as being first class, and in my mind, leading the market in recruitment and retention, mostly because their trained, engaged and invested employees stay put. Most organizations have a blended approach of recruiting, professional development and training opportunities. Think of it this way: Software and capital investments require routine maintenance and updates, and human capital is no different. The interview process has also evolved. Traditional interviews pose challenges such as assessing soft skills, understanding skill gaps, interview bias, the investment of time and the length of the process. Organizations are transforming their interview process by incorporating assessments that focus on soft skills and reveal strengths that help with role matching, but also culture, team work and a better understanding of team members. Organizations are also investing more time and effort into the process and candidate experience to assess fit. One way they are doing that is with “job auditions” that use gamification and virtual reality to provide an immersive experience for the candidate and assess the candidate’s skills, behaviors, culture and values and give the candidate
better insight into the company. Predicting data insights, such as the The Predictive Index, help make good hiring decisions and provide analysis about your existing workforce. Having various data points about your talent pool provide those predictive insights such as a candidate’s personality, needs, skill gaps and even culture fit can help drive better decision making and lower the overall cost of on-boarding employees. Josh Bersin from Deloitte says people analytic tools will become a “must-have” for HR teams and recruiters. Organizations have identified the need for a talent intelligence strategy that focuses on collecting data, analyzing insights, predicting outcomes and developing programs and strategies to improve the process, experience and efficiency of the recruitment process. Another growing trend worth mentioning is artificial intelligence and machine learning. According to Talent Now Recruitment Statistics 2018: Trends & Insights in Hiring Talented Candidates, “58 percent find artificial intelligence most useful for sourcing, 56 percent for screening candidates, 55 percent for nurturing candidates, 42 percent for scheduling interviews, 24 percent engaging with candidates and six percent interviewing candidates.” The report says AI will be a “superpower,” providing “patternrecognition, algorithm refinement, machine learning and natural language processing.” Overall, the landscape for recruitment is shifting – most importantly, aligning talent acquisition strategies to the overall strategic goals of the organization and spending more time engaging with potential candidates.
INSIGHTS FOR COMPETITIVE RECRUITMENT Never stop recruiting. Recruitment has a continuous life cycle, so invest in building a strong pipeline of internal and external talent.
Keep candidates engaged and focus on the candidate experience. TalentLyft defines the candidate experience as “current, past and potential future candidates’ overall perception of your company’s recruiting process. It is based on candidates’ feelings, behaviors and attitudes they experience during the whole recruiting process, from sourcing and screening to interviewing, hiring and finally onboarding.”
Employer brand matters. Fiftyfive percent of job seekers abandon applications after reading negative reviews online, and only 45 percent of employers monitor or address those reviews. A white paper published by CV Library titled “What does 2018 have in store for recruitment?” says 40.2 percent of employers are focused on establishing a strong employer brand. That’s not enough!
Allow for candidates to easily engage with your organization, its managers, employees and recruiters.
Video assessments of candidates can be more efficient and effective than phone interviews. Have a digital and social media strategy. “80 percent of employers say social recruiting helps them find passive candidates” (Glassdoor).
Put AI and machine learning to use. Improved HR software platforms and tools, algorithmic sourcing and text analysis algorithms help recruiters identify skills and experience and get them in front of top talent faster.
Embrace the pace. Be equipped to make hiring decisions quickly, as top talent has a short shelf life.
Collaborative hiring that supports team work between human resources, recruitment and hiring teams.
Don’t be afraid to be different, especially if it helps you put your organizations culture on display.
Share your story. Interviewing for the right fit goes both ways. Candidates are analyzing your process, people and organization as much as you are. Highlight what separates you from other employers.
Brenda Johnson Offer candidates a mobile option to apply and engage. According to Glassdoor, “89 percent of job seekers say their mobile device is an important tool for job searching, and 45 percent use it to search for jobs at least once a day.”
Build and nurture relationships with top talent, and whenever possible, hire them when they are available.
For questions or conversation, please contact me at b.johnsonconnect@gmail.com.
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Fresh Faces
BY Jennifer Gades PHOTOS BY J. Alan Paul Photography
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CHANGING PERCEPTION WITH NEW, YOUTHFUL MANAGEMENT The Avalon Events Center serves as a beautiful setting for weddings, business meetings, corporate events and private parties. They are quickly gaining popularity in the competitive Fargo event scene. The road hasn't been easy, however. After struggling through a few years of growing pains that even gained some media attention, they are starting over with some new faces. "Honestly, it came from the top down. Lee Swanson was a huge part of it, he and some of his business partners realized that things weren't going as they should be with such a beautiful place," said Brett Colliton, COO of Avalon Events Center. "It hadn't seen the kind of growth it should have. So they really focused on finding and isolating what the issues were, and they really found the issues of bad reputation and slow growth were due to poor management." It was time for Swanson to take a hard look at his staff and make some changes. Colliton says since doing so, things have really changed. We talked with Colliton and CMO Andy Richards for tips on how to bounce back from a bad reputation.
1.
Get the Right People in the Right Places Sometimes, even just one person can poison the well. Making necessary changes to your personnel can make a large impact on the entire staff.
another shot is not always easy, regardless of a management change. Colliton and Richards stressed the importance of not running from your past or trying to cover up what happened but approaching it head on.
"Morale has really gone up, and the staff is a lot of fun to be around," Colliton said. "They're great; they're having a good time. Everyone is smiling. People are actually excited to be at work. That alone makes such a big difference in how our customers perceive us."
"What I've been doing for the past few months is sitting down with people who have had less than pleasant experiences with previous management and apologizing for that," explains Colliton.
2.
Acknowledge Your Mistakes We've all seen the "Under New Management" signs slapped across a restaurant or business. Simply placing a sign outside won't make all the difference. You have to show that you've changed and be ready to apologize and take responsibility as well. For the consumer, giving a business
3.
Find What Drives You What sets your business apart? What drives your employees each day? Identify these differentiating factors, and build upon them. As a team at the Avalon, they are working on creating their core values and really focusing on them. "The biggest thing is that we're all-inclusive," Colliton said. "We don't have hidden fees or hidden charges. When we tell
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you a price on something, that's really what it's going to cost. It's not going to be extra. Being upfront and honest about our pricing is very important to us, and I think our customers appreciate it as well."
4.
Work Where And How You Do It Best Everyone works differently, and adapting to how they work best can be beneficial for everyone. "We have a very youthful approach on things, and that makes it fun," Colliton said. "We understand that as long as you're doing your work, it doesn't matter where you're doing it from." Colliton mentioned that before our interview, he had 200 emails to answer and knew there would be too many distractions at the office. Instead, he stayed home to answer them so he could focus and get them done.
5.
Give Back Focusing on networking, helping others out and making connections in the community all can have a strong impact on the public's perception of your organization. "We try to give back and we want to be seen that way," Colliton said. "Growth is our ultimate goal, but really, in my mind, my real goal is just being a positive force in the community."
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6.
Focus On Efficiency Take a look at your processes. Are there things that are slowing down your productivity? Is there a CRM system that could help you get better organized? Are you spending money on unnecessary expenses? Saving time and money can make a large difference in your bottom line, as well as help your team be more efficient.
Brett Colliton COO Avalon Events Center
"We're making sure we're saving money where we need to so that money can go back into events, salaries and ultimately more employees," Colliton said.
7.
Be Customer Focused Get your customers involved. Ask them what they need, and be there to help them when they need it. Do you make it easy rather than difficult for your customers to give you the information you need? "The event planning software that we're using allows the customer to be much more engaged in what they're doing," Richards said. "Before you had to sit down with us and do it (plan your event); now a copy can be emailed to you and you can work on it." "Someone, if they're really excited, can plan their entire event [by themselves]," Colliton added. "We can send them the
Andy Richards CMO Avalon Events Center
software, they can log in and they can do the whole design of their event. But we're also here to guide them and help them through it at the same time."
8.
Work As A Team Teamwork can make many things run more smoothly in an organization. Regardless of your role, Richards and Colliton both discussed the importance of depending on each other to do whatever needed to be done when necessary. When people work together, they can feel more appreciated and valuable. Sometimes this requires doing things outside of your job description that will help your team reach the end goal. "I think one of the biggest things is knowing that you can rely on each other," Richards said. "Because we are such a tight knit group, nobody is going to drop the ball and we all equally distribute work loads so that nobody is overworked." "Everyone is helping out," Colliton added. "There isn't set boundaries on whose task is what. Everyone is just here to help."
9.
Keep Open Communication We have heard it time and time again, but communication is still an issue that's often overlooked. Please listen to
each other and communicate. "We just want to make sure that people feel like they're being heard," Richards said. "If they have issues, they're being talked to and just make sure that there's constant contact all the way through. When people are telling you something, there is probably more than one person who is thinking it, so make sure to listen."
10.
Build Partnerships Competition is healthy, but building partnerships within your industry can get you a lot further than knocking your competition. Find ways that you can work together and help each other so that in the end, everyone wins. "That's really what we would like to drive home is that we want to hold hands with everybody and make everyone successful," explained Richards. "We are even creating partnerships with local hotels and event spaces because there may be a day that we are booked but they may not be, and we would much rather have a positive relationship and know that we can pass somebody off and they can do the same and have a great experience. That is what we want to synergistically create in the community."
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EXPERTS Patrick Kirby
Andy Richards
Kirsten Jenson
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RENT Bringing on a business consultant may be the smartest move you make
Paul Hankel
Amanda McKinnon
Business consulting is a broad term. How do you know when you need to bring a consultant in for your business? What do they even do? This misunderstood industry is often overlooked because so many have these same questions. We sat down with five business consultants in the FargoMoorhead area to learn more about their unique career path and how they work, sometimes together, with industry leaders across the region to find solutions and create new ideas for you and your growing business. By JENNIFER GADES Photos by HILLARY EHLEN FARGOINC.COM
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YOU MIGHT NEED A BUSINESS CONSULTANT WHEN...
& What is the process when you start with a new client? Amanda: I come in and I get to know you to see if we're even going to be a fit. It's really a casual conversation where I can ask questions and they can ask questions. It's not me with my powerpoint and my portfolio sitting out there. It comes from a place of trust and no BS because that's not who I am. So if that's what a client is wanting, I know right away that we're not going to be a fit. Kirsten: My process is pretty similar in that I love to have that first meeting be a lot of questions and get-to-know-you. I will even tell people, milk me for as many ideas as you can get in that first meeting because there's just more. So let's just keep talking because once they get to know how I think and how I connect the dots between the things that they're talking about, it creates a comfort level that makes readiness for that next step. Andy: I have a list of questions that I go through right when I meet them so I can get my information from them and then I listen to what they want and if it's something that we're going to work well together on, then it continues. A lot of people who are starting businesses, they are more scared about the basic things to get ready and having people like this makes it very easy to move forward. Patrick: Most of the time when people approach me with questions, it is usually all about fundraising. And they're usually the same questions. And they're usually the same frustrations. It's 20 minutes of "Okay, what is the issue?" and 20 minutes of therapy while they just kind of unload everything. They will probably take a deep breath and go, "So that's kind of where we are," and we kind of reverse engineer the 114
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Amanda
thing. I'll give out every solution possible. I will tell you, here is what you need to do, here is how you need to do it, here is when you need to do it, I will give you every single piece of information that you need to be successful just because I believe that a rising tide helps all ships. You talk about renting the professional or the expert so that you don't have to bring them on full time. How long does that process, or the "renting period," typically last? Amanda: I have been in business for six and a half years now and some of my current clients have been with me from the beginning. So it really depends. I have clients where they have one person internally and then they tap into my knowledge and talents in a way that supports that person. Some have two, and some have zero, so I'm doing everything: the graphic design, the writing, the PR, the media buying, all of it. So I think you say it's rental, like an hourly rate or project based, but my goal is to always have it be a long term relationship. Paul: The first four clients that I started with, I'm still with and it's now been five years that I have been a full-time consultant. So, these are relationships that I don't want to end! Other clients, for example; if someone hires me to manage their event, I'm there for the duration of that and then out. So, for certain clients it's project/contract based and others, it's very much a relationship where Iâ&#x20AC;&#x2122;m lucky enough to grow with the company and brand. Andy: You tend to get tossed things that weren't originally on your ballot when you were running and all of a sudden you are now working 40 hours a week when you
If you get to a point where most of your meetings are ending in frustration and you go back to your computer not knowing what you're supposed to be doing or working on or what the goals are, that's when you need to be looking at bringing in a fresh perspective.
Patrick
If you're in a meeting, or you're in an office where you say something and you know it's going to help your organization but nobody seems to be listening to your great suggestion. It might be OK to get somebody else outside of your organization to tell your leadership the exact same thing.
Kirsten
When you're not sure what to do or if everything is a priority, having someone to come in and help you with asking a few deeper questions about what's really important can help put things in perspective.
Andy
If you have your husband, wife, your brother's kid who knows how to use Facebook and you say that it doesn't work for you, you probably need to hire a professional to come in and help you with your marketing.
Paul
If you believe that having a quality and effective event/ marketing plan or business strategy shouldn’t be a luxury, but rather a standard part of your business.
told them 20 and you're getting paid the same. In the end, you need to be able to review it and be able to show them that you completed this while doing this and you can usually up-sell yourself to do more things. But, it all comes down to that relationship basis. If you can create a friendship with those people and they trust you, by the round of those first go of projects that they give you, you normally can keep those people for life. Paul: It's sometimes challenging because we're essentially going in and trying to fit into an office ecosystem and be a part of a team, while often being a temporary team member. When we're only there sometimes less than five hours a week, or completely digitally, it can really be challenging. Sometimes I do have to get a little firm and say, "Hey, I want to work with you, not against you. I’m here to lend my expertise in this specific area. So, let's collaborate and let's communicate.” That's why I like doing things like coffee, discovery periods and meetings initially before signing on with a client. There are certain cases where I know I won’t be a good fit. When I do sign on with a client, I have to fulfill their goals while becoming part of a team. Patrick: We're so obsessed with making them successful. The best thing is knowing we can come in and help, and it makes them feel good having somebody with our experience in their corner. Clients know they can lean on us and ask us some pretty serious and pointed questions and that they are going to get some really comprehensive answers. The advantage of hiring a consultant is that honesty. Paul: We are not "yes people" or your typical employee. Patrick: We are, "Yes, we want you to be successful people."
FIND YOUR EXPERT
So you're consultants. How do you find the line of how much you do for them and how much you train them to do? Kirsten: My goal 100 percent is to train people to do their own thing. So from a social media perspective, I believe that our best social media voice comes from people in the organization who authentically care about the people that they're serving. It's always going to be better if you can see the faces of people you're going to meet when you go to apply for a job there or if you're working with that group. I believe that it is 100 percent better if we just teach people to see the moments that are content in their world and how to use the tools of social media to engage with the people that they care about. Amanda: I am working with a client right now where they need somebody internally. This could potentially mean no work for me next year, but I am OK with that because it is equating to the success of their organization. I am referring them people, being a part of creating the job description and so on. So, to me, that is saying that I did my job well while I was with that client, even if it doesn't mean forever. It is super important for me to take care of them long term. Kirsten: There's always more. There's always the next thing. So I try not to worry and be so concerned about sticking with the thing that we're doing right now because there's always the next idea or the next thing they want to accomplish. As long as that last interaction was good then the next thing will come. Andy: We are also all creatives. We have thousands and thousands of ideas. The reason that we are good consultants is we don't just fix problems, we create additional revenue streams. We come up with ideas that while we're fixing what we're supposed to be doing, we generally have other ideas that are being pitched so as we're finishing a project, the next step is laid out so the train tracks just continue as we move forward. 116
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Patrick: I personally like to get into the dirt a little bit with them and kind of help them navigate these really small baby steps to get them going. Get clients used to the grind of picking up a phone and starting to cultivate donors or schedule meetings to make asks. Doing it with them and kind of helping them craft some of that stuff really helps motivate them. It becomes tactical more than it is wishful thinking. What do you think would surprise people most about your job? Paul: I love the pressure, the constantly changing environments, flexibility and the opportunities. You can have a very successful, rewarding career doing this, if you know how to manage your time, have a good work/life balance and know when to say no. As long as you're organized and a follow-through type person, it can be a fun, rewarding journey. Amanda: I am friends with almost all of my clients on Facebook but I still get to be my true, authentic self. I've had people who are like, "Oh, I can't believe you posted that. (For example, me with a scary looking beauty mask on). What is your client going to think?" I guess if someone doesn't like me for being me then we probably shouldn't be working together because I'm not out to judge my clients. In fact, I encourage them to have more fun, while staying true to themselves and their brand. Andy: So many people are brought up in the square box of you have to be employed, you have to have a W2 and you don't. You can be a very successful person who may not work 9-5 sitting at a desk. You may work 20 hours a day, but you're working on your terms and you get to do what you want to do and work with who you want to work with and the most rewarding thing is that you pick your circle and it's so much fun to do it every day.
Paul Hankel BeSpoke, Marketing/Business Development/Event/Political Consulting bespokefm@gmail.com
Andy Richards Pledge Promo, Business Consulting pledgepromo.co
Patrick Kirby Do Good Better Consulting, Nonprofit / Fundraising Consulting dogoodbetterconsulting.com
Amanda McKinnon MSpire, Branding + Marketing Consulting mspire.com
Kirsten Jenson Next Action Digital, Social Media Consulting Kirsten@nextactiondigital.com
NORTH DAKOTA,
MEET THE INTERNET How 14 Independent Rural Broadband Telephone Companies Came Together To Bring The Internet To North Dakota
Dakota Carrier Network CEO Seth Arndorfer in their data center in their Bismarck office.
You use the internet every day, but have you ever given much thought about how it works? Our guess is no. Fun fact: Netflix, online banking, tele-med and really anything you do on the internet is brought to you through fiber-optics. What’s most amazing is that one strand of fiber is less than a tenth as thick as a strand of human hair and can carry around 25,000 telephone calls. Thanks to over 40,000 miles of fiber-optics that have been put in place across North Dakota by DCN (Dakota Carrier Network) and its 14 owner companies, you can make phone calls, play Fortnite and stream Netflix seamlessly. This also means your business can effortlessly expand from one location to multiple locations while your data remains securely stored and your network never goes down. North Dakota, it’s time for you to meet the internet. A North Dakota Success Company There’s something uniquely North Dakotan about 14 independent companies coming together to form a company they can all use to enhance communication services for their customers. That’s how DCN was formed. “The idea formed when the internet was being introduced in the late ‘90s,” said DCN CEO Seth Arndorfer. “North Dakota’s then-telephone companies had a subset of their customers that needed to get connected to this thing called the
internet so they all got together and decided it would be more beneficial to customers if they created a company that would tie all of their fiber networks together and form a single connection to hubs in Chicago rather than investing in individual fiber connections.” Now, DCN connects every school in the state and provides internet access to all K-12 schools and higher education, most branches of state government, county courthouses and much more. In partnership with their 14 owner companies, DCN provides internet to nearly every community in the state. And while there are 28 states across the country that have companies similar to DCN, what makes DCN truly unique is that every independent rural broadband company, formerly known as telephone companies, in the state participated in forming DCN.
How Your Business Can Utilize DCN Business owners need to focus on their business, so their IT needs are often overlooked. However, in 2019, every company needs to look at themselves as a technology company. No matter what industry you are in, you are probably reliant on data. Companies like DCN can help you navigate the complexity of making sure your data is properly stored and you’re always connected. “We have the experts here at DCN. This is what we do day in and day out,” Arndorfer said. “We sit down with businesses and consult with them on the different solutions that we have and find the best product that fits their needs and their budget.” Let’s look at a couple of different scenarios for your business and what you need to know to make sure you’re properly prepared for them.
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Scenario
Scenario
You are opening a
I own a family farm and need
second location
better internet connectivity
DCN’s bread and butter is working with companies that are expanding into multiple locations. One of their customers is First International Bank & Trust, which has 27 locations across North Dakota, Minnesota and Arizona. Because of the fiber optics network across the state, First International Bank’s service is never down. DCN also partners with other companies across the country to ensure that the branches are connected with all the other offices.
Agriculture is a booming industry for technology, which means that reliable internet is more important than ever for rural areas. Today, grain bins, grain elevators, tractors and much more are all connected by the Internet of Things. If there isn’t reliable internet, then the equipment doesn’t work. DCN’s 14 owner companies serve all of rural North Dakota, so DCN is able to reach remote locations which other carriers might simply pass by.
Arndorfer walked us through the steps of what happens if you’re expanding into multiple locations.
This connectivity isn’t just helping farms run a business; it’s helping people’s lives.
“If you’re going to build a new building, and many of our customers are growing, the first thing we want to do is identify if we have fiber close by. The real driver of our data center is that people want to be on our fiber network. In Fargo, we have over 200 miles of fiber traversing through the city. We have roughly the same amount in Bismarck.”
“I’m from Hettinger, which is a very small town,” Arndorfer said. “My grandparents live 30 miles south of Hettinger. They actually have fiber to the farm. My grandma is 94 years old and because of that broadband connection, she’s able to communicate with the hospital and have check-ins. It’s enabled her to live who knows how many more years on the farm.”
Scenario
Scenario
I’m starting my own web
You’re migrating your
development firm
data to the cloud
Most businesses underestimate the impact of their network going offline. Let’s say you’re a web developer and you land a large e-commerce company as a client. If you’re hosting that website and you go offline, you are costing that client a large amount of money. With DCN’s secure network and focus on redundancy, they have an impressive 99.999 percent uptime, which means that, in a calendar year, they’re only down about 23 minutes.
Ah, the ever-talked-about but hard-to-explain cloud. In a perfect world where budgets are limitless, every business would buy a super computer and store their data on-site. However, within a couple years, that computer would be out of date. Or, what happens if your building burns down? All your data would be lost. Well, if you move your data to the cloud with DCN, that info is always backed up and stored on the latest technology. (In fact, DCN replaces the cards that the data is stored on every seven years.) This means that you can rest easy knowing that your data is always secure.
“It doesn’t matter what business you’re in, if you don’t have access to your data, how productive are you?” Arndorfer said. “If you’re a marketing firm? Architectural? Engineering? All branches of government? Any business in North Dakota is reliant on their data.”
“If you wonder where the cloud is, this is actually the cloud,” said Arndorfer, pointing to the servers. “In the space that we’re in now, customers can actually bring their own storage in. They bring in however much storage capacity they need. It’s typically in petabytes at this point.”
DCN’s owner companies have invested, on average, $100 million per year for the last 10-12 years to install fiber optic cable across the state of North Dakota.
DCN’s goal of having a packet delivered anywhere within the state is 50 milliseconds. This means that if you’re playing an online game and you hit the button to move left, for it to go from your controller to the game’s server back to your screen is as fast as you can blink an eye.
Every 12 to 18 months, the amount of internet consumption doubles.
This is a photo of DCN’s Great Plains Data Center in Fargo. Probably the easiest way of explaining how a company can take advantage of their data center co-location is by comparing it to renting an apartment. You can either rent a full, half or a third of a cabinet. You can then either provide your own servers or rent DCN’s servers.
How It Works (as explained by DCN CEO Seth Arndorfer) Since DCN was formed by telephone companies, Arndorfer explained the process of how you’re able to make a call no matter where you are in the world. 1. “If I’m going to call Andrew from my cell phone, I dial the cell phone number, and it finds the nearest cellphone tower no matter where I’m driving.” 2. “It hits that cell tower and hits a DCN fiber. It comes back to this building to this device here.” 3. “Then, it’s going to run on a fiber from this router to your wireless carrier’s office and say, ‘Where’s Seth? He’s on that tower.’ It routes it back to this piece of equipment and out to that cell tower.” 4.“If I fly to Augusta, Georgia, and you make that call, it takes the same path from your phone to the cell tower, hits this router and goes to your wireless carrier and says, ‘Where’s Seth?’ It doesn’t go wirelessly from user to user. It goes wirelessly from the user to the nearest tower and then it jumps on to fiber.”
Security In 2019, one of a business’s most valuable assets is its data. However, few businesses properly protect this data. That’s where DCN comes in. Their data centers in Bismarck and Fargo are built to withstand an F4 tornado and are 100 percent hardened. Everything is also built with redundancy, which means if there is any equipment failure, your data will remain intact. This extra protection is absolutely necessary, particularly for customers like banks and hospitals for which secure data is a critical need for people’s safety. “We have customers, like banks, that when you do an online banking transaction, you might wonder, ‘Where is that actually happening?’” Arndorfer said. “In a lot of cases in North Dakota, it’s happening in one of our data centers. And our focus on redundancy means there is always two of everything
for added safety. Even our customers with online banking servers will install one version of their server at our Fargo data center and then, thanks in part to our extensive fiber network, they can mirror it to our data center in Bismarck. If anything were to happen to data in Fargo, whether it’s a corrupt disk or a failed server, the customer’s data remains safe and accessible because it is automatically replicated in our Bismarck data center, and vice versa.” Services ∙ Data center ∙ Data storage and recovery ∙ Cloud services ∙ Cybersecurity Services ∙ Carrier Ethernet ∙ Dedicated Internet
Dakota Carrier Network DakotaCarrier.com 3901 Great Plains Dr. S, Fargo 4202 Coleman St., Bismarck
Everything in DCN is built with redundancy so that if they need to do maintenance or repairs, the customer will never experience an outage.
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THE GIFT OF
Reflection
H
BY STEVE DUSEK
DakotaBusinessLending.com
appy New Year! As we ring in the excitement of this new year, I can’t help but revel in the joys of the holiday season. There were families, friends and feasts. Laughter, memories and traditions. But we would be remiss if we didn’t acknowledge that our society has spent the past couple months in serious gift giving-mode and even gift givingoverload. When used in a meaningful way, gifts show our love and appreciation for others. I hope that you also found time to give yourself and your business a meaningful gift.
During all that hustle and bustle, the end of the year also brings time for reflection. Thinking about the past year – the ups and downs, goods and bads, pondering of how things could have been different and acknowledging the things that were good. There is no better gift to your business than taking time to reflect on the past year. It doesn’t require
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the exchange of money, pretty gift wrap or a fancy bow. But what it offers are lessons and wisdom – of which both are priceless. As you take time to reflect on the past year, take time to look back at your plans and financials, your results and the things that remain undone. Then do a deep dive into the
INSIGHT + JUDGEMENT + KNOWLEDGE = WISDOM At A Day's End! By John Hall Is anybody happier because you passed their way? Does anyone remember that you spoke to them today? The day is almost over, and its toiling time is through, Is there anyone that will utter a kind word about you? Can you say tonight in parting, with the day that's slipping fast, that you helped a single person of the many that you passed? Is a single heart rejoicing over what you did or said? Does the one whose hopes were fading now with courage look ahead? Did you win the day or lose it? Was it well or sorely spent? Did you leave a trail of kindness, or a scar of discontent? As you close your eyes in slumber, do you think that God will say, "you have earned one more tomorrow by the good you did today?"
key things and small things that made the year what it was. Here’s a few questions to kick off your thinking: 1. What went well in 2018? What was the impact of those things? Do you want to do them again in 2019? Is there a way to make them even better? 2. What did not go well last year? Why didn’t it work? Was it implemented the way that you had planned? Is it still something that is important to your business this year? How can you modify or correct the situations for the better this year? 3. Did you achieve your plan and goals for the year? If so, what key things allowed you to do that? If not, why? Are those plans and goals the same for this year? Or do they need to be adjusted? 4. What changed during the year in your industry, community, market, etc. that was unexpected? How did you handle it? What will the impact be for this year? 5. What did you accomplish that you did not expect would happen during the year? 6. If you could re-do all of
2018, what would you do differently? Why? 7. What are the most important lessons that you learned last year? Why are they important? How will they impact the business going forward? What you will get as you sit with these thoughts and answers is wisdom. According to MerriamWebster.com, the definition of wisdom includes: “1a) ability to discern inner qualities and relationships: INSIGHT, 1b) good sense: JUDGEMENT, 1c) generally accepted belief, 1d) accumulated philosophical or scientific learning: KNOWLEDGE, and 2) a wise attitude, belief or course of action.” So, by the action of reflecting, you will find INSIGHT + JUDGEMENT + KNOWLEDGE which = wisdom. Then when you use what you have learned, your decisions and actions should become more calculated and solid based on your experiences. What would be incredibly interesting would be if you were to document your reflections every year. Imagine the power of going back and re-reading these thoughts
and observations years down the road. There will be things that you forgot about, but then there will be those lessons that live with you forever and are constantly coming up in new ways. Capturing these thoughts for future reference will be a valuable tool in understanding how far you have come, serve as a reminder of challenges and rewards of years gone by and likely provide new motivations or ideas as well. The final question that I will leave you with, is one to consider reflecting on daily, not just at the end of each year. There is a poem called “At Days End” originally attributed to John Hall that is a series of thoughtful questions and reflections. If you have never heard of it, I encourage you to read the entire thing. It is quite thought provoking. The very last sentence of this poem reads as follows: “As you close your eyes in slumber, do you think that you will say, you have earned one more tomorrow by the work you did today?” Did you? If this isn’t a huge gift to your business and ultimately yourself, then I’m not sure what is.
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The Startup Journey By Josh Christy
A BLOG
4 Josh Christy is the founder of "The Startup Journey" blog, which he started to help fellow founders step around some of the holes he's fallen into.
DEBT-FREE
WAYS TO FUND
YOUR START UP
Anyone that has been in business for a while has hit that point where they need funding to keep the wheels moving. Typically, we can turn to credit cards, a bank loan or even friends and family. I think TV shows like "The Profit" and "Shark Tank" paint a drastically different experience from most Venture Capital (VC) or investment deals, so we’re steering clear of those for this article. Now, these aren’t quick fixes and will take a little leg work, but I think they are four great ways to not put yourself in personal debt. Plus, Thanksgiving dinner tastes 100 percent better when friends or relatives don’t owe each other money.
1.
Competing in Business Plan Competitions
There are all sorts of business plan competitions. The problem is that the general competitions are crowded, and the focused ones are really specific: ∙ Are you 22 years old or younger and want to drop out of college for $100k? Check out the Thiel Fellowship at thielfellowship.org ∙ Are you a green startup looking to
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reduce greenhouse-gas emissions and willing to travel to Amsterdam? Check out the Postcode Lottery Green Challenge at greenchallenge.info Check in your local market for smaller business plan competitions. Here in the FM area, I’d take a look at the Business Pitch Contest in Barnesville, Minn., this fall. The benefit of the business plan competition is that it helps you really refine your pitch and is a validation point for your message and market position.
2.
Government Grants And Programs
We’re fortunate here in N.D. for having a business-friendly state that has worked hard to develop some beneficial programs. For example, Innovate ND operates at several entrepreneurial centers offering bootcamp-type classes with expense reimbursement grants. We also have the only state-owned bank in the U.S. that has been startup-friendly and works with area banks to partner on financing. If that wasn’t enough, we have our state department of commerce has established a development fund that has assisted many growth stage businesses as well as a handful of other grant-based programs and incentives such as the APUC and investment tax credits. What I really like about Innovate ND is that you get to work with other entrepreneurs who are going through the same struggle to get customers and validate their product. Plus, there are funds available to help you with needed paid resources such as sales and marketing.
3. 4.
Customer Funded
I saved my personal favorite for last. If you have caught onto the theme of customer validation from my last three recommendations, this is the ultimate validation. What better way to find out if your customers want your product or service than to get them to pre-purchase it. There are a number of ways to do this. If you have a physical consumer product, I’d recommend that you take a look at some of the crowdfunding platforms such as Kickstarter or Indiegogo. Browse through well-funded Kickstarter projects at Kickstarter.com, and you’ll see a strong product with a great team behind them that really has a clear message. I’ve funded projects that have been wildly delightful (Search Exploding Kittens) and some that have handled communication just terribly (Just read the comments on Sesame Key by CandyHouse). Just as Mark Cuban is taking a chance on Shark Tank, you are playing micro VC by investing in someone’s product. If you have a digital service or product, you can do the same thing but without the need for a platform. You can go directly to your customers and ask if you created this service or solution for
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Bootstrapping
These days, the costs to start a business are at an all-time low, and over 80 percent of startups are selffunded. It may take a bit longer to save some money before you start and grow organically, but the advantage is that you don’t have to give up any equity or control. Plus, if it is your money, it’s more painful to let go of, so you might think twice about an expense that you think you might need. I personally like the combination of working on your startup while you have a full-time job; it allows for you to get in front of customers to start learning while still having the stability of a normal income.
them, would they buy it? If they say yes, then give them a sweet deal to make sure they aren’t just saying yes but really believe in it. Let’s say that you have a software product that you’d sell for $500 per month. Could you find a handful of clients that would give you $6,000 (a one-year fee) for lifetime access to the product? What’s great about this direction is that you have taken assumptions out of the process and validated that there is a market for it. Sure, you might be leaving a little money on the table by doing this, but trust me, it’s far better than putting 20k on a credit card with the assumption that your product will sell.
So there you have it, those are my four debt-free ways to fund your startup. If you are on the fence on how to best start, please reach out to us here at Codelation. We’d be happy to get a cup of coffee and chat.
My Journey To The White House
And Reflections On George H.W. Bush By Craig Whitney | Craig Whitney is the president and CEO of the Fargo Moorhead West Fargo Chamber of Commerce.
A
s I reflect on the events of the last two weeks surrounding the death of our 41st President, George Herbert Walker Bush, I can’t help but think of the sequence of events that launched my career to where I am now. It started with me working for then-Vice President George Bush in several capacities and roles in the mid-‘80s, transitioning to work for his 1988 campaign for President, and ultimately in his administration in the White House with Vice President Quayle. Who would think that I, along with my wife, would then be invited as a guest to his funeral? (I did have the distinct privilege of attending the funerals of two former presidents, but in a staff role.)
In 1968, at nine years old, I became interested in politics and campaigns due to my father’s influence. I remember going door to door in an intense and tedious polling effort for Richard Nixon. Over the next 17 years, my interest in politics continued to grow as I became involved in a wide array of campaigns at all levels, as well as holding leadership roles within my local political party. Then in the fall of 1984, Vice President Bush came to my community in a small town in southwest Iowa. Because of my party leadership, I became the main contact for his visit. Quickly, my interest in doing advance work for 41 peaked. I now had an avenue to work my way into the White House in a journey that took me across the country. Now it’s the day after George Herbert Walker Bush was elected President, and the
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question was, now what? Next stop: The Inaugural Committee, and on Jan. 20, 1989, came my official entry to the White House with the privilege of serving in the administration for Vice President Dan Quayle— another man who is one of the finest people I have known. Fast forward to Nov. 30, 2018, when President Bush passed away – he was 94. While his death was not a surprise, the lasting impression he left on me and the nation will never leave my mind. The personal privilege of sharing special moments and stories with and about him are embedded in my mind.
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As you can imagine, the impact that he had on the lives of both me and my wife, Lori, are forever etched in our hearts. The ultimate honor was at his passing, we were invited to his funeral in Houston. Words can’t describe how honored we were to have been a part of the celebration of life of this American hero. A Navy pilot, diplomat, world leader, President, husband, father, grandfather and friend of many. Mr. President – thank you for the privilege to serve with you and most of all for your patriotism to this great nation. As I worked on this piece and as I reflected on the life of this
great president, I couldn’t help but be reminded of another great man with great influence on my life—my father, Craig Whitney. I know my dad would have been proud of me and all my accomplishments. I wish every day he could have shared this journey with me. I’m grateful for such a supportive family and a great Bush-Quayle team that impacted the man I’ve become.
FMWF Chamber of Commerce Learn more and register for any FMWF Chamber of Commerce events at FMWFChamber.com.
President of Labor Masters
Nancy Kelly
Q&A Q What services does Labor Masters provide? A Labor Masters provides daily staffing needs to a wide variety of employers. We do all the non-glamorous jobs: construction, shoveling, moving, painting, cleaning, etc. If you’ve got a job that you really don’t want to do, call us. We open at 5 a.m., and each day we release 100-150 people to jobs. They go out to their work site and come back at the end of the day to turn in their time card and get their check.
hort-term labor isn’t often glamorous work, but Labor Masters president Nancy Kelly provides a welcoming environment that brings pride to both employees and employers. BY LAURA CAROON AND DANYEL MOE
Q Who might need a temporary job? A We’ve got people in-between jobs, and some people that just don’t know what they want to do. I’ve got college professors that work a day here and there and school teachers that work with us in the summers. Some people come to us with a felony on their record. That doesn’t matter. What matters is if you do good work that day. We provide a really pretty lobby and a nice atmosphere and hope that it helps people feel good, even if they don’t find a job with us that day. At least they have a nice place to be where they’re respected (and we have coffee and cookies!) Q What’s your favorite part about what you do? A When I help someone: when they come
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"My parents taught me to rely on myself. When I was about 10 years old, my dad told me, 'There’s no prince on a white horse. Make your own goddamn money.'" - Nancy Kelly in and have zero money in their pocket and can go home at the end of the day with $100. They are so appreciative that they had a job that day and feel good about going home with the money they earned. Helping people and making sure that they know they’re appreciated is what keeps me going. Q What do you wish people knew about your business? A That’s twofold, because we have two distinct customers. We have clients, businesses or homeowners who use us, and those that use us for work. I want people to know there’s a company in Fargo where you can get daily labor that’s guaranteed. We guarantee our work. If you let me know in the first two hours that you’re unsatisfied with the work being done, you don’t get charged. Sometimes people just can’t handle the job, and they get replaced. It’s not a longterm commitment; it’s daily. It’s a very easy service to use. I also want everyone to know that they can work for us for just a day at a time. It’s not slummy. It’s a nice place to be, work, make good money and there’s no commitment. Q How has the workforce shortage in North Dakota affected your business? A When companies are shorthanded,
they’re more flexible and willing to use a daily service rather than a staffing company. But even though there are more openings for daily labor, we still have to be sure that we have the people to staff them before we sell those services to our clients. Q What skills are you finding missing from the job market? A Anybody that wants to get their hands dirty. Any blue collar, construction, technical and people with commercial drivers licenses or who can drive a forklift. Q What is the best career advice you’ve ever received or you have to offer? A My parents taught me to rely on myself. When I was about 10 years old, my dad told me, “There’s no prince on a white horse. Make your own goddamn money.” Q What are you most proud of? A What makes me proud is having a business that helps people on a daily basis and supports four people and their families plus 1,500 temporary employees. I can’t imagine doing anything else. Labor Masters 1404 33rd St. SW #C, Fargo info@labormasters.net 701-566-8755 labormasters.net
PRESENTED BY
SECURITYONPOINT
AVOID FALLING VICTIM TO A
DIGITAL RANSOM ATTACK In August, a customer contacted High Point Networks and was looking for assistance to recover from a ransomware attack. I wanted to share the experience and highlight a few tips that companies can take to prevent themselves from falling victim to the same type of attack. Unfortunately, in this case, the business did not have any backups. With no backups, the business had little choice but to pay the $3,000 ransom to recover their 450 gigabytes of encrypted data. After assisting them with the ransom process, restoring their data and getting them back online, I spent some time analyzing the infected servers to try to determine how this attack occurred and what could have been done to prevent it.
By Jamie Maguire
High Point Networks is a value-added reseller (VAR) of information technology providing solutions to both the SMB and enterprise level markets in the upper Great Plains. They offer organizations best-in-class voice and data networking solutions, supported by the best professional services team in the region. Their solutions solve real challenges and provide measurable return on investment.
highpointnetworks.com â&#x20AC;˘ 728 E Beaton Dr, West Fargo FARGOINC.COM
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INTERNET
WHAT HAPPENED? 1. I found a firewall rule that allowed the Remote Desktop Service through the firewall to one of their servers. In short, anyone on the internet could directly access the login prompt to one of the businessâ&#x20AC;&#x2122;s servers.
FIREWALL 1. PORT 3389 (RDP) ALLOWED THROUGH FIREWALL TO SERVER
2. ATTACKERS BRUTE FORCE PASSWORDS FOR ADMIN ACCOUNT, LOG IN
2. The scammers launched a brute-force login attack and guessed thousands of username and password combinations over a period of months.
3. ATTACKERS PLANT MALWARE, SCAN NETWORK
4. ATTACKERS PIVOT TO SMALL BUSINESS SERVER AND PLAN RANSOMWARE
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PRESENTED BY
LESSONS LEARNED Check external facing services: Check any externally facing services and avoid allowing services like RDP through your firewall. If remote access is required, consider using an SSL VPN or a Citrix appliance. For even more security, consider adding Multi-Factor Authentication (MFA) to remote access. According to the website shodan.io, there are just over 100 servers with RDP exposed to the internet across the state of North Dakota. Plug your external IP address into shodan.io to see which services your systems have exposed.
3. Eventually the scammers guessed the correct password and logged into the server. They then placed the following pieces of malware in the “My Music” folder of the server: • Mimikatz – A password stealing tool
• x86.exe – This executable appears
popular in the pentesting community • shinchakun5main.exe – This appears to be a network scanning tool designed to identify other servers and shares on the network. Generally, scammers are very careful to ensure they infect as many machines as possible to increase their chances of getting paid. • exploit.exe – This appears to be a malicious executable that exploits a vulnerability to launch a command prompt running as an administrator. In other words, even if the scammers got access to an unprivileged, userlevel account, if the server is missing security patches, they can gain full administrative access by running this exploit.
to serve the same function as exploit. exe, but for 32-bit systems rather than 64-bit. • shadow.bat – This is a batch file that deletes all shadow copies on the system. Shadow copies are automatic backups of the system taken by Windows. By deleting them, this increases the likelihood that the victim will be forced to pay the ransom because they no longer have any local system backups to restore. • shaofao.exe – This is a malicious executable that encrypts all files on the server and demands the ransom.
4. With their malware placed on the first server, the scammers scanned the network and found the second server that contained all the business’s data. They logged in to the second server using the same administrative password, deleted all shadow copy backups from both systems and launched the “shaofao.exe” to encrypt all files on both servers.
Check the passphrase policy: If you've read my previous article, then you know how I feel about passwords. In this case, the attackers demonstrated that the administrative password on the server could be guessed, given enough time. Businesses should consider reviewing their passphrase policies and ensuring that accounts with administrative access have strong passphrases. In addition, consider locking out accounts after excessive invalid login attempts. This is an effective safeguard against brute force login attacks. Check antivirus: Unfortunately, the business was not running any antivirus on their servers, making it easy for the attackers to plant their malware. However, remember that antivirus is just one layer of security. In this scenario, it’s hard to say if antivirus would have completely stopped the attackers. After all, the attackers already had an administrative account on the server and could have uninstalled any anti-virus if they knew what they were doing. Check your backups: The only safeguard that could have prevented the business from paying the ransom would have been an offline backup. Even something as simple as manually backing up files to an external USB drive and storing it in a cabinet would have been enough. While backups are not the most exciting safeguard when compared to firewalls or antivirus, their importance should not be overlooked.
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BEING AN OWNER
DOESN’T GUARANTEE YOU A JOB Not true: ‘I’m a shareholder – you can’t fire me!’ BY Michael Raum and Kristy L. Albrecht
I
Can a shareholder be fired?
n closely-held businesses, shareholders often work for the company. It can be tricky when a group of shareholders/employees decide they want to terminate one of the other shareholders as an employee. As explained below, there is nothing inherent in being a shareholder that entitles you to a job, but firing a shareholder can still have corporate-level implications.
Fredrikson & Byron Attorney Michael Raum focuses his practice on commercial law, with a specific emphasis on tax matters. He works with public and privately-held companies on business transactions, including structuring, financing and advising on general corporate matters. He can be reached at mraum@ fredlaw.com.
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Kristy Albrecht is a Fredrikson & Byron shareholder in Fargo, and a member of the Employment & Labor, Litigation, Transportation and Appellate Groups. She advises employers on a variety of employment law issues, including hiring, firing, discipline, employee leave and accommodation laws, employee handbooks, drug and alcohol policies, wage and hour compliance and separation agreements. She also defends employers in litigation on these issues. She can be reached at kalbrecht@fredlaw.com.
Yes. Being a shareholder does not inherently guarantee a job with the company, and being a shareholder does not by itself change the status of “at will” employment, which means that either party can terminate the employment relationship at will. Of course, a shareholder could have an employment contract with the company, or there could be a shareholder agreement regarding employment, and that may alter the “at will” relationship. In addition, firing any particular shareholder might be problematic because of generally applicable employment law (like prohibitions on sex discrimination). Everything else being equal, however, a shareholder does not have a right to a job just because he or she is a shareholder. Who can decide to fire a shareholder?
In the absence of an agreement, a shareholderemployee is like any other employee. He or she can be terminated according to the company’s usual system. As a general matter, a company should have clear expectations for employees
and a system for evaluating and communicating with them. In such situations, however, it is usually a good idea for the board to vote, since the termination is likely to trigger litigation as discussed below, and the board should know what to expect. In addition, shareholder-employees tend to be high ranking within the company, and thus, high-level action is usually required or recommended. Does a shareholder who was on the board stop being a director when he or she is fired?
No, a shareholder-employee who was on the board and is terminated as an employee does not stop being a director, unless he or she resigns or is voted off the board. If there is an ongoing dispute, this can make for awkward board meetings. Despite this, unless and until he or she is removed as a director, which commonly happens, he or she has the right to receive notice of, attend, and vote at board meetings. This even includes notice of meetings where the topic of discussion is his or her termination, so care should be taken to plan those meetings to avoid as much difficulty as possible. Does a shareholder stop being a shareholder when he or she is fired?
No, a shareholder-employee who is terminated as an employee does not stop being a shareholder. Assuming there is no buy-sell agreement that deals with the situation, he or she continues to own his or her shares. The shareholder has the same rights as he or she had before the termination, including the right to have notice of and attend
shareholder meetings; vote the shares; obtain basic corporate information; and receive any dividends paid on the stock. Does a fired shareholder have any rights different from other employees?
Yes, a fired shareholder does have a set of rights different from other employees. Both North Dakota and Minnesota law provides that in a closely-held company, the shareholders owe the company and each other a fiduciary duty of care. This has generally been interpreted to mean that while they owe their primary loyalty to the company and not to each other, they still cannot take any actions which are “unfairly prejudicial” to a shareholderemployee’s reasonable expectations. Courts are generally (although not always) sympathetic to a terminated shareholderemployee’s claim that he or she had a reasonable expectation of employment so long as he or she was an investor. This makes sense in many circumstances, because an investor into a closely-held company may well expect to use that investment to ensure her own employment, particularly when the company is in her field. However, the court’s decision will be based on the facts of each case, and a company could potentially show that the shareholder did not reasonably expect to be employed. Each case will differ, but the inquiry will be the same: what were the reasonable expectations of the terminated shareholder employee with respect to employment?
What is the remedy a court would award for such a claim?
Both North Dakota and Minnesota law give courts wide leeway to fashion equitable remedies to address this sort of case. The most common remedy, however, is to order the company or other shareholders to buy out the terminated shareholder employee at the fair market value of the shares, determined following evidence at trial if the parties cannot agree on it. This makes sense, because there is no real way to force an exit from a closely-held company without court intervention; the shares cannot reasonably be sold on the open market. Therefore, when a court finds that a terminated shareholder employee had reasonable expectations of continued employment, it makes the most sense to provide a mechanism to allow him or her to exit the investment. Isn’t that the same as being able to sue for wrongful termination?
No, the remedy is fundamentally different. Wrongful termination damages would usually include the claimant’s lost wages. On the other hand, a buyout claim centers around the value of the investment, which is fundamentally different. Is there a way to avoid this kind of dispute?
Yes, this issue can be anticipated and addressed in a buy-sell agreement. We addressed this in a June 2018 article on buy-sell agreements written for this publication, but it is worth repeating
that a well-drafted buy-sell agreement will deal with what happens to shares in the event of termination and, if the result is a buyout, will also set forth a price (or formula for determining the price) that applies to the buyout. Courts will generally enforce such agreements in these circumstances, which will spare the parties the cost and burden of litigation. What should a board consider when terminating a shareholder employee?
When deciding whether to terminate a shareholder employee, the board should ask the following questions: First, does the shareholder have an employment contract? If so, that contract will govern the situation, and a wellwritten employment contract will include terms describing the circumstances supporting termination, as well what remedies, if any, exist for termination. If the basis for the termination is not well documented and/or will be disputed under the contract, the board should seek advice from employment counsel. Second, are there risks associated with this potential termination under various employment laws, such as discrimination, retaliation, or whistleblower laws? If so, the board should seek advice from employment counsel. Assuming the answer to both questions is “no,” then the board can fire the shareholder but should be prepared for a lawsuit demanding relief, likely in the form of a buyout at the fair market value of the shares.
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