2• IN BUSINESS JUNE 2011
• Sons find niche at Northwood Lumber/ Page 2.
• Close-knit family is good fit at pharmacy/Page 4. • A special look at familyowned businesses around North Iowa/An advertorial section on Pages 15-22.
TOOLBOX: • FINANCE: Need a smallbusiness loan? Be wellprepared when applying, experts say/Page 7. • FINANCE: In a bind for money? Look to other institutions/Page 8. • FINANCE: Implementing emerging technologies and the associated risks/Page 9.
COMMENTARY: • All about the North Iowa Corridor Economic Development Corp./ Page 10.
BEHIND THOSE WALLS: FOX RIVER MILLS • Family-owned company has consistently grown over its 40 years in Osage/Page 12.
SPOTLIGHT ON LAKE MILLS • A progressive city government, strong business community ready to help the town move forward/ Pages 23-31.
• TEMP SERVICES: Filling the payroll and human resources void/Page 13. • INSURANCE: Necessary but sometimes complicated/Page 32.
HEALTHBEAT • One-stop health shop for businesses/Page 33.
On the cover: Manager Mark Hommez pins up tomato plants at the Perfect Circle Corp. greenhouse in rural Lake Mills. Perfect Circle is among the small businesses that are the backbone of the community. Story: Page 31.
In Business: Vol. 9, No. 2, June 2011 Publisher: Howard Query 641-421-0500 howard.query@globegazette.com Managing Editor: Tom Thoma 641-421-0566 tom.thoma @globegazette.com Associate Editor: Jane Reynolds 641-421-0564 jane.reynolds@globegazette.com Associate Editor: Bob Steenson 641-421-0530
FOCUS: FAMILY-OWNED BUSINESS
bob.steenson@globegazette.com Advertising and Circulation: Greg Wilderman 641-421-0545 greg.wilderman@globegazette.com
••• In Business is a quarterly publication of the Globe Gazette. Reach us at Box 271, Mason City, IA 50402-0271 or by e-mail at news@globegazette.com.
Sons find their own niche at Northwood Lumber Yard Father/founder died in 2001 and within a year his three sons took over, each with expanded responsibilities By TIM ACKARMAN For In Business NORTHWOOD hree brothers running one company might spell trouble in some families, but it’s working out well for the Seversons at the Northwood Lumber Yard. Lee Severson began working at what was then Great Plains Lumber in 1983. He became a partner in the business in 1986 and sole owner in 1993. In 2001 Severson died at age 59 from complications of heart surgery. Two of his sons, Randy and Scott, were already working full-
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time at the business while youngest brother Mark was helping part-time while taking classes at North Iowa Area Community College. (Another brother, Ryan, is a Northwood schoolteacher.) Within a year the three brothers took over from their mother, Marilyn. Each changed or expanded his responsibilities as needed to keep the business running and preserve a degree of harmony. “We kind of do our own thing and let the others do their things,” Scott said. “Everybody knows their job.” Randy’s job primarily involves bookkeeping, billing and pricing. Scott helps customers with estimates, purchasing and warranty work. Mark works in the yard, where he handles receiving and shipping. Brian Schutz, the only non-rela-
Northwood Lumber: Tips for Success
tive at the business, works as a delivery driver and assists in the yard. “We all have our own little niche, so we don’t step on each others’ toes much,” Mark said. ALTHOUGH SHE relinquished control of the business to her sons, Marilyn soon carved out a niche for herself as well. “After (Lee) passed away I got sort of lonely staying home alone so I started coming up here and bothering them,” she said. The “boys” appreciate her role as the receptionist and cook. “She brings cookies every morning and also makes us lunch every day and brings it here so we don’t have to leave,” Scott said. “That’s what moms are for,” Marilyn responded. In addition to Marilyn’s cookies, See NORTHWOOD LUMBER, Page 3
Why the Mason
• Scott Severson: “One of the most important things my dad taught me was being honest with the customer. Everyone makes mistakes, but if they know you’re honest they’ll keep coming back to you.” • Randy Severson: “You’ll make a business with the work you put into it. If you think owning a business is a 40-hour-perweek job, you’re not going to make it.” — Tim Ackarman
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NORTHWOOD LUMBER: Variety of products much greater than when their father owned the store, sons say From A2
the main things the Seversons believe set their store apart are quality and service. “We basically buy products we ourselves would use,” Randy said. “Once they try us and they’ve seen the quality of our lumber, they always tend to return,” Scott said. Providing quality products helps to minimize the amount of warranty work. When there is a problem, however, Scott is willing to help whether or not Northwood Lumber sold the item. “I probably go out and help people with warranty work or repairs on more products we didn’t sell than products we did,” Scott said. Scott and Randy said the variety of products available today is much greater than when their father owned the business. While they cannot compete with larger stores in terms of inventory, they are willing to order specialty items those stores would rather not handle. “They don’t want to deal with the ordered-in items because they’re a hassle,” Randy said. Scott enjoys working with do-it-yourselfers or beginning contractors to make sure they order adequate material. Northwood Lumber offers free delivery and a liberal return policy. “When we have a project we want enough stuff out there that the carpenter doesn’t have to waste time running back and forth,” Scott said. “In a smaller community, the repeat customer is what you want. “You grow to know and trust them, and they grow to know and trust you.” The family believes in cultivating that trust by serving the customers well and also by giving back to the community. Randy serves as mayor and Northwood Lumber donates to a variety of organizations including 4-H, Pheasants Forever, Relay for Life and the school booster club. “We appreciate those community members spending money here, so we put it back into the community,” Scott said.
TIM ACKARMAN/For In Business
Contractor Zach Wynia (left) talks with Randy Severson (seated) and Scott Severson at Northwood Lumber. “We have a good contractor trade,” Scott said. “They’re the base of our business.” “It would be hard to find a better small community than Northwood,” Randy said. “People do support the businesses here. They know if they don’t support us, we’ll be gone.” Not that the Seversons have intentions of going anywhere. “We’re going to be here year after year,” Scott said. Lee Severson would have wanted it that way, Marilyn believes.
“He would be very proud that they’ve been able to carry on the business,” she said. “That’s what he was working for, to have something to leave to the kids.”
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FOCUS: FAMILY OWNED BUSINESS
Close-knit: Good fit Keeping the pharmacy in the family has worked out well for the Redingers and the community By TIM ACKARMAN For In Business LAKE MILLS Not many people get to take over a business that’s more than 100 years old. But two generations have had the opportunity to do so at Redinger Drug in Lake Mills. Levi Nerby established his pharmacy at 219 W. Main in 1876. A new building was completed in 1898 and is still in use today. (The old building was moved to 110 N. Mill St. and houses Silverado’s tavern and eatery.) Levi passed on the business to his son, Benhart, who in turn handed it down to his son, TIM ACKARMAN/For In Business Benhart Levi “Bud” Nerby. By 1974, Bud was contemplating retirement Randy Redinger (right) sold his remaining interest in Redinger Drug to son Aaron (center) in 2010 after being part or sole but no Nerby family members were interested owner of the Lake Mills business for 35 years. Both Randy and his other son, Graham (left), work at the business part-time. in taking over.
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THAT SAME YEAR Randy Redinger from Coin in southwest Iowa was to graduate from the pharmacy program at Drake. “I wanted to go to a smaller town,” Redinger said, “and I wanted to own a store eventually.” State pharmacy board officials connected Nerby and Redinger. Visiting Lake Mills for the first time in January, he found North Iowa less than hospitable. “It was bitterly cold,” Redinger recalls. But other than the climate, Redinger liked what he found. He started at the pharmacy after graduation and was a partner in the store by 1975. Nerby retired four years later, leaving Redinger in charge of the 103-yearold business. For the next 18 years, Redinger was the sole proprietor. He turned to relief pharmacists for occasional assistance, but most of the See REDINGER, Page 6
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REDINGER: Aaron is the sole owner; brother Graham, a freelance writer, works part-time as a pharmacy technician From Page 4
follow in his father’s footsteps. He want to take a vacation or something that you have people who returned to the family business, are willing to help.” began buying in after a year and gradually assumed sole ownership HAVING A SMALL and closeby 2010. knit staff is a good fit for a small ALTHOUGH RANDY Redinger and close-knit community like has cut back, he hasn’t complete- Lake Mills, Aaron believes. “I think anywhere you go the ly retired. He still works most Saturday mornings and Wednes- pharmacist cares about cusday afternoons as well as on other tomers,” Aaron said. “What we do NEITHER SAW the store as a long-term career option initially. occasions when Aaron needs to be give them is more personal service. It’s such a small town that it does“I had no interest in going into away. n’t take long to get to know peoGraham Redinger, a freelance pharmacy,” Aaron said. “That was writer, works part-time as a phar- ple.” never part of the plan.” While the emphasis on cusIn fact there really was no plan macy technician. Pharmacist Angie tomer service hasn’t changed VanDusseldorp also helps on a initially, Aaron admits. since 1975, many other aspects of After high school he enrolled at part-time basis. the pharmacy business have. “I feel like I need to do someWaldorf College in Forest City Both Randy and Aaron noted without any specific career aspi- thing,” Randy said, “but mostly third-party payers now have it’s just to help him out. I believe rations. He eventually went to considerable influence over drug he still wants me to be here.” Drake University in Des Moines TIM ACKARMAN/For In Business choices. “It works out good for me that and graduated from the pharmacy “Insurance companies have he wants to work Saturdays,” program in 1997. The pharmacy now known as Redinger Drug opened in 1876 From there Aaron continued to Aaron said. “It really helps if you See REDINGER, Page 7 and has been owned by only two families. time if the doors were open Redinger was there. Many times his sons, Aaron and Graham, were with him. From the time they were old enough to work they helped with tasks such as cleaning and stocking shelves. “Those kids grew up in this store,” Redinger said.
Redingers’ Tips for Success: Randy Redinger encourages young pharmacists interested in owning their own store to explore partnering with an experienced pharmacist. “Partnerships are always difficult, but they are also extremely rewarding.” Both Randy and Aaron Redinger note most pharmacy schools provide only limited preparation for key aspects of running a retail outlet. Developing both business skills and people skills takes time. “Being in a store is what teaches you more about business than anything
else,” Randy said. Other tips from Randy Redinger: • Any kind of new business fails if you don’t have enough venture capital to begin with. You’re going to have to have enough money to cash flow for several months. • There are a lot of people who think retail looks easy, but it’s not easy. • The further ahead you can plan for retirement or a change of ownership the better. You need an exit strategy a long time before you’re ready to exit. — Tim Ackarman
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REDINGER: Passing the torch
TOOLBOX: FINANCE
From Page 6
really taken over what’s going to be covered,” Aaron said. Pharmaceutical companies have in turn become more aggressive with direct-to-consumer marketing. Randy believes this may encourage some patients to seek inappropriate therapies. “That’s the thing that’s changed the most: TV ads for drugs. And it’s a crying shame,” he said. NOT ALL of the changes have been negative. Computerization has made the pharmacy business more efficient and safer, according to the Redinger pharmacists. “When I first came here, the only things that ran on electricity in this store were the lights, the radio and the pop machine,” Randy recalls. “When I computerized in 1983 we had the biggest-memory computer in town — a whopping 10 megabytes.” Now, patient records, financial information and even inventory are computerized. Prescriptions are recorded with image scanners while bar code technology is used to help prevent medication errors. “I’d say there have been some pretty good changes technology-wise,” Aaron said. “It doesn’t always work perfectly but it’s sure a lot better than the old way.” WHILE SOME might assume smaller, independent stores would be slower to adopt such technology, Aaron said the opposite is often true. “If we see new technology we can just go buy it,” he said. “We don’t have to get approval from a chain. If we want it, we figure out a way to pay for it and we do it.” Figuring out how to pay for it is now entirely Aaron’s responsibility. Despite calling most of the shots for over two decades, Randy said passing the torch has been relatively easy. “It wasn’t hard at all. What’s really gratifying is to have a son to be a partner with, and the really great thing is to be able to pass it on to the next generation. He’s going to do a great job with the store.”
Need a small-business loan? Be well-prepared when applying It’s not impossible to get a loan, but the borrower and bank must be a good fit By LAURA BIRD laura.bird@globegazette.com MASON CITY t some point most small businesses will have to apply for a loan, whether it’s to start up, expand, purchase equipment or for some other reason. With today’s economic conditions, it isn’t impossible to get a loan, but businesses need to be well-prepared when applying for one. “We just have to be sure the borrower and bank have a good fit because it has to be win-win,” said Gary Lindgren, president of the Mason City market for Community National Bank. Win-win means the loan will help
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People need to be all in. You have to be able to make a commitment to put everything you own at risk. It helps to measure one’s commitment.”
the business and that the borrower will be able to pay back the bank. “The No. 1 goal from the bank’s side is having the money repaid,” said Chris Deets, assistant vice president of commercial banking at Clear Lake Bank and Trust Co. Businesses need to show they can repay the Lindgren loan and are serious about it by doing a few things. The most important aspect is a business plan, especially for a startup business, said Ted Bair, director of the Small Business Development Center at the North Iowa Area Community College. “Having a viable business plan is critical,” he said. Lindgren agreed and said they’ll send anyone who comes in without one to the Small Business Develop-
ment Center or John Pappajohn Entrepreneurial Center at NIACC before considering a loan. Several things need to be included in the business concept, including its strategic fit. “How will the product or service the business is going to provide solve a problem for Deets those it intends to serve and can it be profitable?” Bair said. Profitability is key, which means businesses need to know what all of their expenses and incoming money will be on a daily basis. “How are they going to run the business every day?” Bair said. Deets and Lindgren agreed that business projections are important information. “We look at projections on a potenSee LOANS, Page 8
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TOOLBOX: FINANCE
In a bind? Look into other institutions for relief By BRUCE FREEMAN
the recent economic downturn, lending has become increasingly ear Professor Bruce: I own a more difficult. In addition to successful small business, banks, there are other institubut at times money can be tions that offer different very tight. I have loans and high avenues of funding. monthly expenses. I am often Alexander Aiello, adviser at forced to run up my credit card. Morgan Stanley Smith Barney, What other resources do I have? suggests other financing methA. Small businesses run into ods for small businesses to conthis problem. Banks have always sider. Investment firms have been a main source of lending programs that allow small busifor small business owners, nesses to access money when whether to start a business or they need it. getting a line of credit to keep • Lines of credit: Convenient the monthly bills in check. After form of financing that allow The Small Business Professor
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businesses to take advantage of immediate opportunities, and most of all unexpected expenses. • Term loans: Offers small businesses the cash they need to operate on a monthly basis. • Standby letters of credit: Used in international trade transactions to purchase goods from other countries. This is also known as a non-performing letter of credit. • Commercial mortgages: A mortgage loan using commercial real estate as collateral to secure repayment.
• Security-based loans: A loan against eligible securitybased collateral. This allows you to use what’s available. This avenue for loans has helped small businesses get the funding they need when they need it at very competitive rates. Running a business and taking care of the required finances requires a great deal of work. Sitting down and analyzing what your cash flow is month-tomonth and planning ahead will allow you to have a smoother running business.
LOANS: Banks will look at business owner’s personal credit history, tax returns and finances From Page A7
tial business or current business,” Deets said. Lindgren said Community National Bank has its own system to determine if projections are accurate or are too optimistic. For a current business they also look at how it has performed, tax returns and its credit history for the past three years, he said. Other things businesses might consider bringing to the table when applying for a loan is their own capital, Bair said. It could be the person’s own savings or investment money from family or friends, he said. “People need to be all in,” Bair said. “You have to be able to make a commitment to put everything you own at risk. It helps to measure one’s commitment.” Businesses also need to have a good credit report.
“That’s terribly important,” Bair said. All banks will look at the business owner’s personal credit history, tax returns and finances. Another thing smallbusiness owners should do is research. Deets said it’s helpful when businesses are aware of different loan programs such as Small Business Administration (SBA) programs. “The more they know about potential opportunities the better,” he said. SBA loans are something banks often use now. “What they do is provide the bank a guaranteed loan,” Deets said. “It helps offset the risk to the bank.” Both he and Lindgren said community banks are still loaning money to businesses like they were prior to the recession. “We continue to make
loans to small businesses,” Deets said. While banks are still loaning money, the process takes a little longer than it did 30 years ago because of regulations, Lindgren said. “There’s steps we go through,” he said.
The process can especially take a while if purchasing real estate is involved, Deets said. An appraisal can sometimes take up to a month. That means that businesses may have to be patient when applying for a loan.
FOR ALL YOUR STEEL NEEDS CONTACT
About the author: Bruce Freeman, The Small Business Professor, is president of ProLine Communications, a marketing and public relations firm in Livingston, N.J. E-mail questions to Bruce@SmallBusinessProf. com.
Emerging technologies and when to implement them from a risk perspective/Page 9
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Implementing emerging technologies merging technologies are new and innovative, or in some cases use relatively recent existing technology in a new or converged manner. In this article we will limit the discussion of emerging technologies to the convergence of existing technologies as they tend to have the largest impact on business due to their process disruptions. Examples of the convergence of technologies include cellphones and personal digital assistants (PDAs), which were previously separate technologies and now are generally packaged as one in the form of a smartphone (iPhone, Android, etc.).
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The implementation Various business factors go into the decision of when to implement emerging technologies. One of the more important considerations is the benefits of the implementation. Some of the most commonly desired are: 1. Cost savings. 2. Customer service. 3. Market leadership. 4. Power savings. A technologist will quickly identify that there are many more benefits possible, but when working with clients in the field these are the most commonly mentioned.
Of course, the actual benefits derived depend on the technology being deployed. For example, in recent years many customer service-oriented businesses such as banks and online retailers have implemented some form of “live chat” so their Internet-savvy customers can converse online with customer support representatives or sales staff. A primary benefit of this technology is customer service, while secondary benefits such as accuracy of orders may exist as well. While these benefits are important, a critical factor that often gets overlooked is risk. When risk is not accounted for, the true cost of implementation is underestimated and can also lead to poor implementation. Generally speaking, new or emerging technology implementations should always be treated as riskier than the technology they replace. This should be an important factor in deciding when (or if) to implement the technology. When we consider contemporary emerging technologies, such as smartphones and smartphone applications, there are several examples of security issues being discovered. A short list of some of
the more recent security issues documented includes: 1. Citigroup disclosed that its free mobile banking application accidentally saved account numbers and other sensitive information on devices. (2010) 2. Google recently began remote wiping Android devices infected with malware after discovering more than 50 malicious applications in the official Android market. (2011) 3. Apple released iOS 4.3 for the iPhone 3 and other devices to address critical security issues with its product, according to US-Cert and other information sources. (2011) 4. According to USCert, Research In Motion (RIM), the maker of BlackBerry, issued a security alert warning users that during browsing the BlackBerry is susceptible to a data mining exploit. (2011) As can be seen from this short list, serious security risks have been discovered in what many would consider to be the smartphone market leaders, and we can conservatively assume that all smartphones are likely to have security issues that have been or will be discovered. This does not mean that an organization
should not implement emerging technology, but that the decision should consider the potential risks.
Consideration of risk There are many risk models that attempt to factor the risk of the implementation of emerging technology into the organization, some complicated and others straightforward. A simple approach or framework includes, at a minimum, the following steps (in an actual implementation there will likely be more): • Identify the technology: Identify the technology and the business process, as well as an inventory of the components that enable the solution and features. • Identify risks associated with the technology: Essentially, an attempt is made to identify the risks of using the technology. The list should be as exhaustive as possible and an expert might need to be consulted. • Implement control measure to mitigate the risks: This is where an organization identifies control measures that remove or reduce the risks identified above. In some cases, it may take multiple control measures to mitigate a
risk; often there is not one “silver bullet” for each of the risks identified.
Summary Emerging technologies will continue to be introduced at an everincreasing pace. While they generally bring many improvements, the technologies also bring risks. An important step in the implementation planning phase is to identify the risks and control measures that need to be introduced. Only when the risks have been accounted for and their implementation costs included in the overall plan will an organization have a good understanding of the total costs and the impact of the technology on their risk posture.
About the authors: Aaron Donaldson is a consulting director in the Mason City office of RSM McGladrey. He provides information technology consulting serDonaldson vices to clients in a wide variety of industries. For more information, contact him Even at aaron.donaldson@ mcgladrey.com. Loras Even is a managing director in the Waterloo office of RSM McGladrey. He provides technology risk management consulting services throughout the state. Contact him at loras.even@mcgladrey. com.
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COMMENTARY: ECONOMIC DEVELOPMENT
All about the North Iowa Corridor EDC By BRENT WILLETT Executive Director North Iowa Corridor Economic Development Corp. early everybody has license to claim a stake in “economic development.” The term represents a professional discipline, a policy, a goal, a challenge, an opportunity. It means jobs, capital investment, education, work force development, financial resource allocation. Competition. At the North Iowa Corridor Economic Development Corp., we distill the tremendously complex economic development endeavor into a single guiding mission which forms our work every day: Serving Mason City, Clear Lake and Cerro Gordo County, the Corridor is a professional, regional, non-profit organization whose sole mission is to contribute to job and capital investment creation in the
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North Iowa region. We do this in two ways: • Supporting and assisting local business Brent Willett: and industry. • Recruiting appointed EDC executive direc- new business tor this year and industry. This dual focus — along with our partnership model and the emphasis on regionalism — will dictate our success in the years ahead. Supporting existing business Working mainly with primary, interstate commerce job businesses, we serve as an advocate for the growth and retention of our region’s primary employment sector. In this role we work to help retain jobs through aligning distressed companies with programs and resources to address challenges. In addi-
tion, we work to assist and be a catalyst for existing business and industry expansion by providing problem-solving and resource-connecting solutions. We do not have the power to create jobs and capital investment; our function is to bring our assistance, our relationships and our technical assistance to bear to ensure business retention and expansion opportunities as well as prospective businesses are met with robust local assistance. Working with existing business is tremendously important to effective economic development administration. As much as 80 percent of growth in Upper Midwest regions like North Iowa has come and is projected to come by way of existing business and industry expansion. Currently, we are in the midst of the Corridor’s Exist-
ing Business Retention and Expansion program, a targeted outreach program which engages 75 of our area’s largest employers first through electronic survey and subsequently through an on-site interview by a Corridor staff member. The purpose of the program is to identify challenges, if possible, before they become exacerbated, explore opportunities for growth through our assistance and diagnose the endemic business climate or operating issue challenges which we can work to address, be they utility, transportation, work force or any other matter germane to this area’s ability to grow our own jobs and capital investment. New business attraction The customary definition of economic development is the attraction of new business and industry into an area from the outside. Despite the fact the
much of our growth comes by way of existing business growth, a robust and aggressive attraction effort remains a critical leg of the proverbial stool of Corridor programming. In an exceedingly competitive global environment for new-business attraction, we seek ways to differentiate the Corridor area and deliver innovative ways for business development to happen here. To market our area, we concentrate on four predominant approaches: • Targeted marketing campaigns focusing on industries to which we feel our region delivers the finest and most competitive operating climate. • Trade show participation and networking. • Developing and maintaining robust relationships with state and federal offices, See CORRIDOR, Page 12
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Behind those walls: Fox River Mills Family-owned company has consistently grown over its 40 years in Osage By DAVID NAMANNY For In Business OSAGE Behind the walls of Fox River Mills, thousands of pounds of yarn are turned into thousands of pairs of socks every day. The family-owned Osage manufacturer, which employs more than 200 workers, has been a staple of the community for more than 40 years and has consistently grown and expanded both its facilities and product lines. Today, the company produces high-quality hunting, hiking, skiing and snowboarding socks as well as handwear, including gloves, mittens and glomitts. The company also pioneered the first women’s specific-fit sock and has created the “Socks for Soldiers” program which has provided nearly 9,000 pairs of socks for the miliary. Fox River’s ties to Osage started with the purchase of the Marr Knitting Mill in Osage in 1966. Three
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DAVID NAMANNY/Mitchell County Press-News
Jeff Lessard (left), Becky Lessard and John Lessard sit in front of a portrait of the late Joseph Lessard, who started working at Fox River in the 1940s and bought the company in 1975. years later, the mill burned down. By 1971 a new mill was completed and the company relocated its headquarters from Appleton to Osage. Fox River continued to grow by acquiring Rockford Textiles of McMinnville, Tenn., in 1985 and Portage Mills of Portage, Wis., in 1988. Zwicker Knitting, Zwicker
International and Nelson Knitting (manufacturer of the Original Rockford Red Heel, affectionately known as the “monkey sock”) were acquired in 1992. The company completed its stateof-the art addition in 1995, bringing the total square footage to more than 250,000.
The growth of Fox River Mills can be largely credited to efforts of the Lessard family. In 1940 Joseph Lessard went to work for Fox River as knitting superintendent. He worked his way up through the ranks and bought the company in 1975. The Lessard family owns and operates Fox River Mills. Today, Joseph’s sons, John and Jeff Lessard, manage the operation of the company. “When Jeff, Jim and I were old enough, we joined the family business, learning all we could about socks and manufacturing them,” said John Lessard, president and CEO. “I started running a knitting machine just like my dad once supervised, and worked in every department here preparing me to one day run the mill. I also drove a truck once a week from the mill in Appleton to Marr Knitting, bringing yarn to Osage and returning with finished gloves and mittens which were then shipped to customers from Appleton.” When Joseph Lessard died in February 1978, John took over day-today operations of the mill while Jeff handled a lot of the sales aspects. “My mother, Joyce, who worked at See FOX RIVER, Page 13
CORRIDOR: Regionalism is the wave of the present; Corridor represents the way economic development efforts must be administered From Page 10
including regional councils of government, the Iowa Department of Economic Development, the U.S. Economic Development Administration and state and federal legislative offices in order to develop leads. • Business resource alignment programs like the Community Venture Network To improve the marketability of our area first means discovering the strengths and weaknesses for business develop-
ment in our region. Then we look for ways to capitalize on those strengths and work through appropriate channels to improve the weak spots. Funding The Corridor is a publicprivate partnership, with approximately half of our funding derived from public entities (Mason City, Clear Lake and Cerro Gordo County). The other half is supported through private com-
pany investments with close to 200 investors contributing almost $200,000 annually. This public-private status provides us a strong working relationship opportunity with local government but permits us to work sensitive business projects effectively. Regionalism No matter the area, working together and marketing our area as a region gives us much greater strength than
focusing on one community. Regionalism is the wave of the present and the North Iowa Corridor represents the way economic development efforts must be administered. We serve as a singlesource point of contact for a region of close to 50,000 people. Companies that work with our office have an opportunity to consider a wider, more demographically diverse area (Mason City, Clear Lake and Cerro Gordo
County) than a single city or community. This is important because business does not care about municipal or other parochial boundaries; business cares about making sound business decisions, and a less municipally-bounded strategy provides excellent opportunity for the Corridor to deliver competitive business expansion and attraction services to those who consider doing business in our area.
GLOBE GAZETTE
IN BUSINESS JUNE 2011 • 13
TOOLBOX: TEMP SERVICES
Filling the payroll, human resources void “They (businesses) typically use us for temp positions, evaluate to hire and direct hire,” Eichmann said. Businesses are especially using temp agencies for hiring because of By LAURA BIRD the economy. laura.bird@globegazette.com “What’s happened now within the MASON CITY last five to 10 years is dvertising, recruiting, hiring, companies are under payroll, background checks and pressure to be cost-effiproviding full benefits are just a cient in terms of retenfew of the services temporary staffing tion of employees and agencies offer businesses these days. staff,” Lafrenz said. “In “Anything that’s related to human most cases companies resources,” said Holly Eichmann, are less likely to bring on manager of Express Employment Proadditional full-time help Eichmann fessionals, Mason City. “We have payand staff, even when roll services and HR services that our they could use those people, without customers can utilize through us. We knowing for sure if those people will can help fill those voids without hav- be long-term.” ing to bring in a whole other person.” “In many cases they’ll run them as a While agencies offer a variety of temp or try it just to make sure the services, the most common thing they employee does fit the bill,” she added. provide is hiring. Eichmann has noticed businesses “We handle temporary-to-hire or using Express Employment for the direct hire,” said Lana Lafrenz, district same reasons. manager of Kelly Services, Mason “They want to make sure the econoCity. my is stable,” she said. “They may not Express Employment offers the justify hiring people permanently, but same. say, ‘When things even out we’ll roll
Temporary staffing agencies offer variety of services, but most common is hiring
A
them in permanently.’ “We’ve had more companies use us that way and keep us until things are looking better.” Businesses, especially small businesses, also may not hire employees full-time because of cost compared to part-time workers. “There’s a lot of cost in incurring full-time people with taxes, workers compensation and health benefits,” Lafrenz said. “All of those costs are big to a company.” Lafrenz Both Kelly Services and Express Employment offer full benefits for temporary workers. “Temporary people that come in, they may last anywhere from six months to a year,” Eichmann said. “We understand people need some kind of vacation or have holidays, so we need to give them benefits.” Companies also seek out agencies like Kelly Services and Express Employment because they don’t have the time or resources to hire people.
“We’re finding there are a lot of people that are looking for work,” Lafrenz said. “Companies don’t have the ability to get through those resumes and candidates.” Both agencies will advertise, recruit and evaluate potential employees. “Once we identify good candidates, normally they’ll do their own interviews,” Lafrenz said. Then its up to the company to hire the person temporarily, part-time or full-time. Both Lafrenz and Eichmann said they try to stay on top of companies’ needs. “A lot of our customers have different busy seasons,” Eichmann said. “We work very closely with the customers forecasting so we can forecast correctly for them.” Lafrenz said Kelly Services also works with customers and networks within Kelly Services, which is a global company. Other services temporary agencies offer businesses is payroll and help in establishing job descriptions, procedures, updating company handbooks and translating documents.
FOX RIVER: More than 400 knitting machines on knitting room floor kellyservices.com
From Page 12
Fox River and was the long-time treasurer of the company, became the chairman of the board upon dad’s passing,” John said. “Our brother Jim worked in the manufacturing area and retired in 1999.” Over the years, the Lessards were able to implement unique ideas and products, such as making patented “Wick Dry” moisture-managed socks, even socks certified by NASA that went to the moon. In the 2000s, Fox River pioneered the first women’s specific-fit sock. “Before that, women were just buying smaller versions of men’s or unisex socks,” Jeff Lessard said. A portion of the profits from every
pair of Fox River women’s socks goes to support breast cancer research, awareness and prevention. Knit into every woman’s style is a small pink ribbon “to remind women of their unique health issues and symbolize our commitment to them,” Jeff Lessard said. In 2005 and 2006, the Lessards and Fox River focused on the environment, with several mill improvements and the development of the company’s own organic shrink treatment. Fox River was also one of the first sock manufacturers to use Ingeo, a sustainable fiber made from corn, that was the core of the “Good Earth CollecSee FOX RIVER, Page 14
temporary :: temporary to hire :: :: direct hire
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FOX RIVER: Many products are cold-weather items From Page 13
tion.” “We still have a strong commitment to the environment and recycle more than 450,000 pounds per year and reuse water three times during the manufacturing process before it leaves the building,” John said.
The Lessard family says much more goes into making socks that most people think of. For example, Fox River Mills has more than 400 knitting machines on the knitting room floor. Each series of machine allows the company to produce different styles, such as thermal, sport or diabetic socks — even handwear.
The manufacturing process
DAVID NAMANNY/ Mitchell County Press-News
The Lessards agree the future is filled for future orders. Once packaged, socks move to the shipping department with opportunities. where they are sent to retailers around “While we do have to compete with the world. lower cost international labor, we also don’t incur large shipping costs to Challenges and opportunities bring our product to our customers. While Fox River has been a extremely Plus, there is a return to ‘Made in successful, the Lessards admit the America’ values,” John said. “Part of company has challenges just like many that is based on quality and part of it is other businesses today — the economy, based on understanding that we’re all rising prices, labor availability and even connected. People have seen, especially the weather. But Jeff Lessard said it also in recent years, that jobs lost domestihas great opportunities. cally means friends, neighbors and “As with everyone today, the state of family members have lost their the economy impacts us — whether incomes. Sure, you could spend less on consumers feel confident to spend money in the marketplace,” Jeff said. “They need to feel secure in their own job and financial stability to continue to spend. So with high unemployment it becomes harder for people to spend money on more than the necessities.” Fox River is also often challenged by the cost of goods and materials. “Volatile prices in the textile market impact us greatly,” John said. “When the cost of cotton, wool or polyester fluctuate, so do the costs for us to make socks from those fibers.” Many of Fox River’s products are cold-weather items — hunting, hiking, skiing and snowboarding socks as well as handwear. “So when there’s unseasonably warm weather, people don’t tend to buy cold-weather socks and handwear. Suffice it to say, we like snow,” said Jeff.
Need
According to the Lessard family, a lot goes into the manufacturing of socks that most people don’t even think about. There are generally six steps to making socks — knitting, seaming, wet finishing, board-pairing, packaging and shipping. “Yarn is fed to needles row after row until the body of the sock is formed,” John said. “Each horizontal row is called a course; each vertical row is called a wale.” More than 400 knitting machines are on the knitting room floor. “The unique features of each series of machine allow us to produce different styles such as thermal, sport or diabetic socks, and even handwear,” he said. Once the socks have been knit, the toe seams must be closed by machines designed specifically for this purpose. Once the sock is knitted and the toe seam is closed, all socks are wet-finished to remove any knitting oils or residue from yarns. Softeners and conditioners are then added to enhance the feel. Based on the style, additional things can be done in the wet-finishing area such as dyeing, scouring and bleaching. The next step of the process, according to John Lessard, is called “boardpairing.” This is the process of taking the recently washed-and-dried socks and pulling them over a metal foot to form the desired shape. Socks on the forms are steam-pressed to give them the finished look customers see in the store. Once they are boarded, socks are paired together and quality-checked for missed stitches, holes in seams or any flaws in the fabric. They are also measured to ensure the proper sizing is maintained. Finally, pairs are sent to packaging for immediate assembly or warehoused
something to have it made overseas, but when you buy U.S.-made products you’re supporting local economies around the country.” Jeff and Becky Lessard agreed. “In our case, buying a pair of Fox River socks means you’re supporting a lot of U.S. employees, like those of fiber manufacturers, yarn spinners, our great employees, printers, shipping companies who deliver our products and finally the retail stores who sell our socks in your town,” Jeff said. “It’s all one big circle that consumers are showing they believe in again.”
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Succession plans are essential for small businesses By TIM GRANT
many proprietors "know having a succession plan is a good idea. They just don't have time to get around to it Many small-business owners are so busy running while putting out day-to-day fires. When we work with their businesses that they don't take time to consider companies, we identify this as an issue and recommend who would take over if they became disabled or died. they dedicate the necessary time to create one." "It's the goose and golden egg syndrome," said Mark Luttner is familiar with a family that once owned a Luttner, managing partner of Iron Bridge Financial in thriving manufacturing firm in Eighty Four, Pa. It was Pittsburgh. "The business owner is the goose, and all too shut down when the owner died without a succession often we insure the egg. plan, leaving his surviving family members with no "The buildings, equipment and hard assets are income stream and workers with no jobs. insured and protected," he said. "But the owner is The owner, who was in his 60s, had recently driving everything like morale and day-to-day remarried, and his stock passed to his young wife. The operation. If something happens to the owner, owner had signed personally for his lines of credit. everything is at risk." When he died, creditors called most lines of credit and For business owners who envision their companies as accounts payable. Without operating capital and the an ongoing enterprise after they are gone, a succession ability to buy materials on credit, doing business plan cannot be postponed. became difficult. The widow liquidated the equipment It's estimated that more than half of all public and and inventory, and sold the real estate. private companies have not named a successor. Several employees, including one of the owner's sons, Raymond Vargo, director of the University of showed up for work one day only to discover they were Pittsburgh's Small Business Development Center, said suddenly unemployed. Pittsburgh Post-Gazette
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"All of this could have been prevented had there been a couple of things in place," Luttner said. "The owner should have had a will or a buy/sell agreement so that the stock would have been transferred to the son. "There should have been a life insurance policy in place insuring the dad, that would have given the son the capital he needed to purchase the stock from his stepmom at fair value and provide additional operating capital." Picking a successor is no easy task, said Fred Rock, managing director at Focus Investment Banking LLC, a national firm with a Pittsburgh office. It advises clients on buying and selling businesses. He said business owners must determine if the company would be better off in a relative's hands or a key, unrelated employee. "Most parents don't take an honest look at their child. The child runs the business into the ground, and there is no income from the business. We see that happen a lot. "Another option is to sell the business to a key employee. ... They could buy the business out of its See SUCCESSION, Page 17
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SUCCESSION Continued from Page 15 profits over three or four years and it could be a win-win. But sometimes good employees are not good owners." Rock said selling a business to employees who do not have the capital to purchase it could be risky. The employees may be good at following, but not developing, a plan. If an employee purchases the business from the owner over a period of time and ruins the business, the owner and his family could be left with nothing. "The decision you must make is one that is ultimately best for the business," Rock said. "That could mean choosing one sibling over another to run the business or choosing an employee. "But in either case, you have got to be careful to evaluate whether they have the skill sets to continue to operate the business successfully." (Contact Tim Grant at tgrant@post-gazette.com.) (Distributed by Scripps Howard News Service, www.scrippsnews.com.)
How to be more persuasive and influential at work You know who they are, they're the people who can walk into a meeting and charm the socks off everyone in the room. They inevitably wind up with bigger budgets, more support for their ideas and more promotions than their less persuasive peers. Knowledge is not enough, being the boss is not enough, if you want to succeed you have to be able to persuade and influence. Three significant changes in the workplace have made the ability to influence and persuade absolutely critical: 1. Ambivalent Workforce - Employees still show up for work with their bodies, but many of them are leaving their brains at home. Gallup research confirms that only 29% of employees are actively engaged. If you want to
get anything done, you have to win the hearts and minds of your employees, peers, and boss. 2. More Complexity and Change - Companies are reorganizing at a furious pace. With cross-functional teams and blurred reporting lines, the days of command and deploy leadership are over. Getting results depends on garnering support from outside your department and being able to persuade others to buy into your ideas. 3. ADD Culture - Facebook, Twitter, iPhone. Lots of bright shiny objects are competing for your customers' and coworkers' time and attention. Your topic might be important to you, and your company, but if it's less interesting than what's on the Facebook feed, no one is going to give it any incremental effort.
See PERSUASIVE/INFLUENTIAL, Page 20
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services and solutions to their clients. Services such as… * They help Family Farm Incorporation if needed. (97% of their customers are Location: 1307 6th St SW Mason City incorporated) Phone number: 800-472-6931 * Income tax planning Fax Number: 424-5613 * Tax bookkeeping with monthly detailed Business Hours: Monday-Friday 8-5 reports showing current tax position Our Services: Agricultural Tax Planning * Tax preparation, W2's and 1099's Owner: Dennis Van Gorkom * Annual reports for their corporation Year Established: 1975 * Financial statements for their creditors Did you know? * Financial planning for profit * IRS correspondence They only work with family owned farms * Monthly newsletter and ranches * Accountants on staff to answer any Number of Employees: 10 and all questions at no additional cost Email: dennis@corporatefarmer.com helped plan for steady growth through unsteady interest rates. They’ve * Many of their clients have received Website: www.corporatefarmer.com saved farms and fortunes in liability suits. on-farm visits from them for better understanding of complicated They’ve navigated through many uncharted waters. They now know operations Since 1975, Corporate Farmer has helped families that farm the course. Their business philosophy is simple: They are here to serve their become more successful and prosperous. May they help you map your journey? clients. And their proven track record of over 30 years of success They specialize in serving farmers and ranchers only. They’ve been speaks for itself. They have over a 97% retention rate of clients every the pioneers in developing innovative tax planning techniques that First of all, they listen. year. The most common reason they lose clients is very simple…they have been proven to save our clients money. Their time-test proven Then they partner with you to develop a solid strategic plan. retire. And they retire VERY comfortably. system allows for better planning, better management decisions and They let you explain your farming goals and objectives. They study Plus, they serve their clients' needs year around, not just at tax more profitable results. your current and past financial and tax positions. Only then do they time. They receive over 1,000 calls a month on their toll free 800 They are here to serve you. They are customer driven, but don't help you plan a strategy of success. number answering clients' questions pertaining to their business expect them to play fast or lose with your money or the tax laws. You know where you want to go and they help you get there operation. They are here to serve you on a daily basis. That's what That's why you'll like it there. They are no different from you. through financial and tax planning. they do. They save you money. And they do it well. This is who they are With their unique and easy to use bookkeeping system, every day That's because they specialize only in agriculture. They only serve of the year you will know your tax position. That allows you to best What makes them unique their full-time farm and rancher clients. They don't do any tax or manage your business on a daily basis for the benefit of your The services provided and their commitment to their clients in consulting work outside of agriculture or do any walk-in business at business. They eliminate the year-end chaos of scrambling with pre- fulfilling their duties won't be found anywhere else. Nor can the tax time. They only serve their full-time clients and view them as pay, deferred income and non-essential purchases to offset taxes. specialized experience or expertise. Their uniqueness includes. . . partners. They work with them every step of the way through planning Their average new client can reduce taxes by 20% - 30%. * They specialize in agricultural taxes to successful year-end results. Sometimes less, sometimes more. But they all enjoy the peaceful * They only serve farmers and ranchers. They do not seek or They are small enough to be personal but big enough to make an holidays a lot more. accept neither non-agricultural business nor any walk-in business at impact. They can help you reduce tax and liability exposure. tax time. They work fulltime for their fulltime clients. They developed their own unique software program years ago. It is Farming is a business: A big business. And like any business there * Their proprietary system is time-tested and proven to be tried not available to any one else in the world. This one-of-a-kind program are perils. So they encourage their clients to take advantage of the and true. No one else in the world has or can duplicate their system. allows for one accountant to do the job of four. And the system is tax and liability laws that the big Fortune 500 companies take * Any corporation for a family farm is better than not incorporating unique in the fact that it allows all of the accountants on staff to see advantage of by becoming a C Corporation. A C-Corp reduces both and they are the experts at setting-up and working with your account and shows your tax position every day of the year. So tax and personal liabilities. You can not only save more money on C Corporations. A C-Corp allows even the smallest of ranchers or when you call with a time sensitive question, you can get it answered taxes, but you can save the farms and all you've worked for under the farmers the same tax and liability benefits as the largest in minutes, not days, even if your personal representative is not protection of a C Corporation. Fortune 500 Company. available. This has major impact and benefit for you when you need Corporations are easy to establish and easy to dissolve. * They literally wrote the book on family farm incorporations. to know how a buy or sale action that day will effect your year-end Any corporation is better than none for family farms. * They are customer driven. They serve you. They will do whatever tax position. C-Corporations are the best. So why not deal with the firm that wrote it takes, whenever it is needed to help you and your farming Experience and expertise are abundant at Corporate Farmer. the book on farm family corporations…Corporate Farmer. operation. There aren't many problems they haven't faced and solved for their * They are incredibly efficient and effective. They deliver results. customers over the years. They helped clients get through the This is How they do it They deliver value. turbulent 80's with many of them still with them today. 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IN BUSINESS JUNE 2011 •19
FAMILY OWNED • FAMILY OWNED • FAMILY OWNED • FAMILY OWNED • FAMILY OWNED Advertising Supplement
Let’s Get Acquainted with Mason City Roofing Location: 609 South Adams Avenue, Mason City Phone Number: 641.423.6023 Business Hours: 8-5, Monday-Saturday Owners: Ernie L Martinez, Minon Martinez and Derrick Martinez Our Products: GAF/ELK, Duro-Last, Neogard, Vista & Hayfield Windows, Taylor Doors, Mastic & Variform Siding, Quality Edge soffit & fascia, and Gutter Filter America Number of Employees: 8 to 25 Website: www.masoncityroofing.com Email: masoncityroofinginc@hotmail.com
Mason City Roofing is a full service contractor, specializing in residential, commercial and industrial roofing. “We also offer siding, windows and gutters, as well as expert installation of all our products,” said Ernie. Mason City Roofing is a Master Elite Contractor for GAF shingles, which come with a 50-year warranty on both labor and materials. “We’re proud to be a Duro-Last Contractor,” explained Ernie. “Duro-Last roofing system is leak-proof, resistant to high winds, and virtually maintenance-free and it’s made right here in Iowa.” Neogard Coating Systems and Urethane Foam Application are used to provide a protective coating on flat to low slope roofs and come with a 10-Year Renewable System Warranty. Richlin, Hayfield and Midway (Alliance) windows can help homeowners save money by making their homes more energy efficient. Mason City Roofing also offers Gutter Filter America, a
gutter filtration system which protects gutters from clogging and works to prevent ice-build up in the winter months and comes with a Lifetime Warranty. “We also specialize in ventilation which is key in preventing ice dams,” explained Ernie. Mason City Roofing was founded by the Fox Family in 1933. Ernie L. Martinez purchased the business in the early 2000’s from Elmer Moss, the company’s second owner. Today, the company is still family owned and operated by Ernie L. Martinez, owner and project manager; Minon Martinez, office manager; Derrick Martinez, Superintendent; and Wendy Balles, advertising manager. David W. Griffith is the company’s salesman. The Martinez family continues to promise security, protection, durability, quality, integrity, efficiency, reliability and affordability. “Our customers are our focus,” said Ernie.
“We take great pride in the quality products we offer and customers know they can count on us for superior workmanship. We pride ourselves on attention to detail and our ability to provide our customers with a variety of options based on their needs and the products we offer.” Mason City Roofing and the Martinez family are also very community-focused. They share their time and talents with United Way Survivors of Suicide Loss Support Group, Habitat for Humanity, Long Term Recovery Coalition for Cerro Gordo County, North Iowa Youth Center, Marine Corp League Toys for Tots and many other worthy causes. With over 40 years experience, Mason City Roofing is ready to work with you on your next home improvement project. Contact them today for an inspection or free estimate.
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PERSUASIVE/INFLUENTIAL Continued from Page 17
Money alone can't buy employees' happiness By PATRICIA SABATINI
It doesn't matter how smart and skilled you are, if you don't know how to persuade and influence others, you won't get results, and you will eventually become irrelevant. Scared yet? Don't be. I've spent over 10,000 hours studying the interactions of top performers to identify what makes them more persuasive than everyone else.
Pittsburgh Post-Gazette
It's probably no surprise that a fat raise is a good way to help keep employees happy. But companies won't hang on to their best people with money alone. "What we have seen for years is pay is not the No. 1 reason" that top performers stay put, said Antoinette Petrucci of Buck Consultants, a leading global human resource consulting firm. "It's not just about retaining them, but keeping them See PERSUASIVE/INFLUENTIAL, Page 22 fired up and engaged." With the economy on the mend, it's a critical time for companies to review their pay and workplace policies or risk having their top talent picked off, she said. A Buck survey in January found nearly 90 percent of We Recommend the companies that had frozen workers' pay during the Heil Brand previous 18 months had already lifted the freeze or Serving Mechanical Contractors planned to do so this year. Northern Iowa Data show "employees are becoming frustrated and For Over dissatisfied with their jobs. Some are feeling like their 65 Years employers exploited the recession to make them work www.kinsethplumbing.com Air Conditioning Appliances harder," Petrucci said. Companies that expect to keep their top people should make sure salaries are fully competitive, although proper pay is just a starting point, she said. Employers that set themselves apart have senior 148 E. MAIN ST. • BELMOND leaders who spend a lot of time talking about their high
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performers and analyzing why they are high performers, she said. "They talk a lot and do a lot for their talent." One of the most important things to do for employees is to help them meet lifelong goals of staying healthy and being financially secure in retirement, Petrucci said. Benefits may include health risk assessments, preventative health care and financial education to help employees understand what they need to do to retire comfortably. At work, as in any relationship, trust is key to keeping people connected, Petrucci said. Bosses who speak openly and honestly with employees are more likely to keep their best people, she said. According to Buck focus groups, one of the top reasons employees look for another job is a lack of trust in senior management. "People know if business is good, but budgets are still getting cut. Those are things companies should try to avoid."
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GLOBE GAZETTE -
IN BUSINESS JUNE 2011 • 21
22• IN BUSINESS JUNE 2011
GLOBE GAZETTE
PERSUASIVE/INFLUENTIAL
that you're open to changing circumstances and hearing their perspectives. Continued from Page 20 2. Ask questions about other people's goals - When you ignore the other people's agendas, the result is resistance and lack of engagement. One of the things You don't have to be a master manipulator to be that differentiates top performing influencers is that more persuasive. they always make a point to understand where the other Here are three techniques of top performers that you person is coming from. They ask about the person's can use in your own workplace interactions to be more goals early in the conversation and they do it often. persuasive and influential by Monday morning: 3. Validate their goals out loud - It's not enough to 1. Lose your attachments - We tend to think of great hear people, they need to know that you understood persuaders as silver-tongued devils who manipulate others. But my research revealed that the most effective them. When you repeat their point of view out loud, they know that you "get it." They're then more likely to influencers are actually quite flexible in their interactions. They have goals and plans, but they're not listen to what you have to say. The guy who rambles on about his great new system overly-attached to everything playing out in a certain isn't nearly as persuasive as the person who connects way. You'll increase your influence if people perceive
their ideas to the goals of every person and department in the room. Persuasive and influential people don't focus on their own goals; they understand everyone's goals. The fastest way to get people excited about YOU is to start being excited about THEM. Business strategist Lisa Earle McLeod is the President of McLeod & More inc. a consulting firm that specializes in Sales Force and Leadership Development. She is a keynote speaker and the author of The Triangle of Truth, a Washington Post Top 5 Business Book for Leaders. www.TriangleofTruth.com
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GLOBE GAZETTE
IN BUSINESS JUNE 2011 • 23
SPOTLIGHT: LAKE MILLS
Meeting the challenges head-on “It’s a real blow,” said Mayor David E. Steffens Sr. “Everything in town just slowed down a bit.” Everything that is, except for efforts to bounce back. By TIM ACKARMAN Steffens said Lake Mills has a progresFor In Business sive city council, a strong business comLAKE MILLS munity and a growing core of volunteers ake Mills has faced plenty of chal- all ready to help the town move on from lenges the past few years, and the the Cummins layoffs. “It’s not going to Winnebago County community of be the doom of the town, for sure.” just over 2,000 has met them head-on. Helping those leaders to organize Slowdowns at Winnebago Industries while identifying and marketing the and CDS in nearby Forest City affected community’s assets is Marilyn Hoffmany of the town’s residents. More man, executive director of the Lake recently Cummins Filtration, which Mills Chamber Development Corp. She once provided 25 percent of the comsees many positive assets to market. munity’s jobs, completed the elimina“Some businesses are hiring,” Hofftion of more than 400 positions. See LAKE MILLS, Page 24
Progressive city government, strong business community ready to help town move forward
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24 • IN BUSINESS JUNE 2011
GLOBE GAZETTE
Nicholson tries to keep the loss of jobs in perspective. “As bad as it is and as tough as it is for the (former) employees who are living day-to-day being unemployed, nobody died,” she said. “There’s always a new opportunity where something bad has happened.” THE MOST OBVIOUS opportunity is the chance to market a 100,000- square-foot manufacturing building with ample parking located on Highway 69 and not far from Interstates 35 and 90. “It’s a double-edged sword,” Nicholson said. “You don’t want an available building because you’ve probably lost some jobs somewhere. But if you don’t have an available building, you don’t have anything to market.” While a sale is not pending, both Hoffman and Nicholson note there have been several inquiries regarding the site. Steffens, Hoffman and Nicholson all mentioned the municipal power plant as another major asset. While not the primary source of electricity in Lake Mills, the plant can be used during regional shortages See LAKE MILLS, Page 25
TIM ACKARMAN/For In Business
Rice Lake State Park features this stone shelter built by the Civilian Conservation Corps in 1934. The lake itself covers 1,200 acres and is used for water skiing and fishing. The species of fish in Rice Lake include bass, bluegill, walleye, perch, northern, crappie and bullheads.
LAKE MILLS: $1,000 finder’s fee offered to anyone who recruits business to city From Page 23 man said. “Almost every one of our storefront businesses in downtown is filled.”
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age volunteerism and to seek input regarding the future of the town. A consultant was hired to identify community strengths, needs and opportunities. ASSISTING DISPLACED WORKERS is essential to LMCDC has marketed the community using direct keeping those businesses vibrant. Soon after the lay- mailings to Lake Mills High School alumni, flyers at offs were announced, a Community Cares Coalition trade shows, phone calls to select businesses and was formed to provide information about resources responses to requests for proposals from businesses available from area service agencies, schools and looking to expand. The group is offering a $1,000 findchurches. er’s fee to anyone who recruits a business to the city. Job openings in the region were posted on the The Winnebago and Worth County Betterment Chamber’s website. Council (Winn-Worth Betco) works closely with the “Hopefully, employees can stay living here and city and the Chamber on many such initiatives. In commute to a new job,” Hoffman said. light of the floods and tornadoes that have devastatThe Lake Mills Vision Team was organized to encour- ed other communities, Executive Director Teresa
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PO box 182, Lake Mills, IA 50450 • Phone: 641-592-5253 E-mail: lmcdc@wctatel.net • Website: www.lakemillsIowa.com Equal Opportunity Employer
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GLOBE GAZETTE
IN BUSINESS JUNE 2011 • 25
LAKE MILLS: Mayor says he’ll never leave the community From Page 24
or outages. impact of a downturn in any one sector.” “Our municipal utilities would be up and running withPROSPECTIVE EMPLOY in 20 minutes,” Hoffman said. ERS look at more than just the business climate when DISPLACED WORKERS evaluating a town. with manufacturing skills are Steffens said Lake Mills is a also a marketable asset. The Lake Mills Chamber Develop- safe, clean community with good schools and churches, ment Corp. has encouraged reasonable taxes, affordable many of the unemployed to housing and sound infratake the National Career structure. Readiness Test, an examinaThe Lake Mills Community tion used to objectively meaSchool District, which also sure workplace skills. While Nicholson would serves Joice and Scarville, love to see a major new man- has an enrollment of nearly ufacturer come to Lake Mills, 700. she said the heart of the area Superintendent Daryl economic development strat- Sherman said the communiegy is cultivating and recruit- ties have continued to invest ing a variety of small busiin the system even during nesses. tough times. “The majority of business “The school’s new and rengrowth in our state comes ovated facilities are reflective from our own businesses and of support from taxpayers in industries, and most of it the district,” he says. comes from our small busiThus far enrollment has nesses and industries,” not suffered due to the CumNicholson said. mins layoffs, Sherman noted. “If you have a local economy “Kindergarten is actually with lots of businesses up by two (pupils). LMCS is employing five to 25 people, optimistic about the future you probably have a more sta- and continues to offer a ble economy. It blunts the strong school system.”
LAKE MILLS offers a variety of recreational amenities. Rice Lake features good fishing, boating and public hunting as well as a small state park. The Winnebago River Water Trail begins at Dahle Park west of town. Pilot Knob State Park, Silver Lake and Clear Lake are all within 30 miles. Rice Lake Golf and Country Club offers one of North Iowa’s more attractive and challenging 18-hole courses. There is a modern aquatic center with a zero-depth entry pool and a waterslide. Diamond Jo Worth Casino is 10 miles away. Despite these attractions, Nicholson said the greatest asset in Lake Mills is the community spirit of its residents. “When times get tough, they just dig a little deeper, make things happen, and take care of (their) own.” “Lake Mills is a great community (in which) to live and raise children,” Sherman said. “It’s just a really nice town,” Steffens said. “I’m never going to leave here.”
TIM ACKARMAN/For In Business
The Promise of America Monument on the east side of Lake Mills pays tribute to the Norwegian heritage of many area residents.
Lake Mills has wealth of small businesses: Page 27
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GLOBE GAZETTE
IN BUSINESS JUNE 2011 • 27
Tracy Willert of Lake Mills programs a vertical machining center that makes blocks used in manufacturing dies at Wilkinson Tool & Die in Lake Mills. TIM ACKARMAN/For In Business
Small business: backbone of Lake Mills’ economy By TIM ACKARMAN For In Business LAKE MILLS
“Our focus has always been to grow the small businesses in our own communities. Small businesses that are doing well will form the new backbone of our local economy.” — Win-Worth Betco Executive
Tips for success from the Lake Mills experts: MARK WILKINSON, founder of Wilkinson Tool & Die, said current or prospective small-business owners need a good business plan, good financial backing, strong marketing skills, excellent knowledge of their product and a high determination to succeed. JUSTIN PETERSON, Larson Contracting owner, recommends the following for those taking over an existing business: • Know the financial stability of the company and be prepared to present that to the bank and whoever else is interested. • Select a good surety Continued on Page 28
Director Teresa Nicholson. Lake Mills has a wealth of such small businesses described by Nicholson.
and do some marketing, which wasn’t easy for a start-up company,” Wilkinson recalls. The relationships he built with customers paved the way for MARK WILKINSON founded growth. Wilkinson Tool & Die about 18 “As you work with project engiyears ago, primarily serving indus- neers, they move on to other comtries within a 100-mile radius. panies and bring that business to “In the beginning I had to go out See SMALL BUSINESSES, Page 28
MS-35955
Albert Lea Public Warehouse Lake Mills, IA Food Grade and Non-Food Grade Warehouse space available. Rent by square foot or pallet. Forklift operators on duty M-F. Clean, dry and secure. Multiple loading docks. Sprinkler systems & pest monitoring. Licensed and bonded. Close to 1-35. Staff is trained in wireless scanning. Inventory Control MS-35140
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28 • IN BUSINESS JUNE 2011
GLOBE GAZETTE
SMALL BUSINESSES: ‘Word-of-mouth advertising always hits the target market’ From Page 27
Dave’s Auto Service
LAKE MILLS TIPS:
Wilkinson Tool & Die, Inc. & Midwest Metal Stamping, Inc.
6 41- 59 2 -10 3 6 MS-35247
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North lowa Therapeutic Massage Sarah Womack, LMT Licensed Massage Therapist
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From Page 27 bonding company. • You never know who may be a customer one day, so treat everyone with respect. • Be visible in the public (by taking part in community organizations and activities). Win-Worth-Betco’s Teresa Nicholson said there are revolving loan funds and other programs to assist with small-business ownership transitions. She encourages owners or potential owners who are struggling with a transfer to contact local economic development officials. — By Tim Ackarman
201 North Mill St. Lake Mills, IA 50450
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See SMALL BUSINESSES, Page 29
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Andrew Kingland (left) and Cory Rahn use a 2,000-ton mechanical press to stamp race wheels at Wilkinson Tool & Die and Midwest Metal Stamping.
ANOTHER INNOVATIVE area business poised for growth is the Perfect Circle Corp. Waste Management uses methane gas released by its
101 West Main St. Lake Mills, IA 50450
HELGESON
TIM ACKARMAN/For In Business
landfill in rural Lake Mills to power an electrical plant with the capacity to supply 4,800 homes. Heat created by the generators was formerly a wasted byproduct. Perfect Circle, a bioresearch company with 12 employees, developed a system to capture that heat and use it to warm a nearby greenhouse. The 46,000square-foot facility can operate year-round. It houses 14,000 organically grown tomato plants and can produce one million pounds annually. Few facilities in North America are producing organic tomatoes on a commercial scale, according to Perfect Circle CEO Michael O’Brien. The company is still working to fine-tune its process. “We’ve learned a lot over the last 18 months,” O’Brien said, “but we still have a long way to go.”
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you,” Wilkinson said. “Word-of-mouth is the best advertising I can have: it always hits the target market.” As his customer base broadened, Wilkinson learned some of his clients needed assistance using the tools and dies he produced to manufacture finished parts. Five years ago he formed a second business, Midwest Metal Stamping. His parts are now used extensively in professional racing cars and in ATVs. “I’m trying to be as diversified as possible, one step at a time,” Wilkinson said. Between the two divisions Wilkinson now has seven fulltime employees, two parttimers and an engineering intern. “It seems like it’s been a steady, slow growth,” Wilkinson said. “We’ve been really busy the past year.”
641-592-3500 MS-35255
GLOBE GAZETTE
IN BUSINESS JUNE 2011 • 29
SMALL BUSINESSES: Seeing a local business remain in local hands is ‘a big plus for the community’ From Page 28
O’Brien hopes to expand as soon as the tomatogrowing process is perfected. “This is probably the only business I’ve ever been involved in where demand is substantially greater than our ability to produce,” he said. “We actually have a waiting list.” Hundreds of similar methane-powered generators are operating across the country. O’Brien eventually wants to offer fresh, locally grown produce at facilities throughout the snowbelt. O’Brien credits officials at Waste Management as well as Perfect Circle’s local private investors for making his initial efforts possible. “Without them this wouldn’t have happened.”
Vandrea Miller of Clear Lake and Alyson Linquist of Lake Mills prune tomato plants. The Perfect Circle Corp. greenhouse near Lake Mills can operate yearround and produce up to one million pounds of tomatoes annually.
NORTH IOWA has many aging business owners. Often when such owners retire their firms are either sold to outside corporations or liquidated. Al Larson founded Larson Contracting in 1977. A leading full-service contractor primarily serving the area between Minneapolis and Des Moines, the company has a year-round staff of about 75. Employment can exceed 100 during the summer. As Larson prepared to retire, longtime employee Justin Peterson stepped up to assume ownership. Although some might have been reluctant to take the risk in a down economy, Peterson saw it as an opportunity. “Now is the time to buy,” Peterson said. “The market probably allowed it to happen.” The duo spent more than a year assessing the business, coming to a fair agreement and planning for the transfer of ownership. “He’s helping to make it a soft transition,” Peterson said. He has continued the trend toward diversification begun under Larson.
TIM ACKARMAN/ For In Business
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TIM ACKARMAN/For In Business
Al Larson founded Larson Contracting in 1977. As Larson prepared to retire, longtime employee Justin Peterson stepped up to assume ownership.
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30 • IN BUSINESS JUNE 2011
GLOBE GAZETTE
SMALL BUSINESSES: Theater a testament to community pride
Up in Smoke BBQ Bash
From Page 29
Fri. July 22 & Sat. July 23
“We started out (doing) more grain and concrete; now we’re building hospitals and schools.” Seeing a major local employer remain under local ownership is exciting to Lake Mills Chamber Development Corp. Executive Director Marilyn Hoffman. “That’s huge for us knowing that a business is going to stay in town. It’s a big plus for our community.”
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TIM ACKARMAN/For In Business
seating for 200. The theater reopened in 2008 and has averaged 18,000-19,000 paid visits annually. Volunteers serve on a five-member management board and also assist with the theater’s daily operations. “We’re paying our bills
and paying back the city,” isn’t finished with its Helgeson said. “It’s been efforts downtown. well-supported by the Immediately adjacent community, and the See BUSINESSES, 31 foundations have been really good to us.”
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THE MILLS THEATER is a small business, a recreational amenity and a testament to community pride. Built in 1937, the theater fell into disrepair and closed in 2001. Not wanting to lose the landmark business, community leaders formed the non-profit group Lake Mills Entertainment Inc. (LMEI) to take ownership of the building. “It was in pretty bad shape,” said Scott Helgeson, president of LMEI. “Part of it actually fell in on the east side.” The organization solicited donations from area foundations as well as current and former Lake Mills residents. The city agreed to provide a substantial loan. Those funds, along with significant volunteer work by Helgeson and others, allowed Lake Mills Entertainment to restore the original theater facade and marquee while rebuilding the back of the structure. The result is a vintage exterior and a modern, comfortable interior with
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GLOBE GAZETTE
IN BUSINESS JUNE 2011 • 31
SMALL BUSINESSES: Believe From Page 30
Ornate work is a feature of the 1900 Building in downtown Lake Mills. TIM ACKARMAN/ For In Business
For all your banking needs... call us! TIM ACKARMAN/For In Business
The Odd Fellows Building is part of a four-building complex with a shared roof known collectively as The 1900 Building. It is now owned by Lake Mills Entertainment.
DR. D. R. THOMPSON
MS-35904
to the theater is the Iowa Odd Fellows Building, the size of which greatly exceeds the group’s needs. Plans are taking shape to add a second screen in the building with seating for 90, using the existing theater lobby and restrooms. “We feel we can offer more variety with the same labor,” Helgeson said. The Odd Fellows Building is part of a four-building complex with a shared roof known collectively as The 1900 Building. Lake Mills Entertainment took ownership of the building and is revitalizing two other vacant and dilapidated buildings within the complex. A new roof and floors were added initially to stabilize the structure. The electrical, heating/air conditioning and plumbing systems are being updated. Original stained glass windows are also being restored. Lake Mills Entertainment has been able to raise funds and obtain volunteer assistance despite not having a tenant committed to the building. “We didn’t have a set plan of what to do with it, but we didn’t want to see them torn down,” Helgeson said. Negotiations are ongoing with a chain restaurant. Whether or not that works out, Helgeson is optimistic regarding the future of the building and the town. “We believe in the community,” he said. “We wouldn’t be doing it if we didn’t.”
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32 • IN BUSINESS JUNE 2011
GLOBE GAZETTE
TOOLBOX: INSURANCE
Insurance necessary but can be complicated By LAURA BIRD laura.bird@globegazette.com ust like people need insurance in their everyday lives, businesses need insurance, too. “Insurance is very important,” said Ted Bair, director of the Small Business Development Center at the North Iowa Area Community College, Mason City. The type of insurance a business needs depends on what the business does. “If they own property, we’d need information about their building,” said Steve Soma, vice present of First Gabrielson Agency and office manager of the Belmond branch. “We would need values to insure the building.” Insurance companies also need values on business items or equipment. “We’d have to look at general liability coverage if they have special needs like business auto employees,” Soma said.“They’d need workers compensation or possibly an umbrella liability policy.” Some business owners may also get into health insurance for themselves and employees, Bair said.
J
“
I would say to look for a reputable agent who’s been in business for a long time.” — Steve Soma Vice president of First Gabrielson Agency
“Health insurance is a very big challenge,” he said. “It’s a big challenge to people starting a business.” It challenging because it can be very expensive, Bair said. Life insurance may also be required, he said. That way if something happens to the owner there is a way to help pay off any loans on the business. Soma said for most main street businesses, insurance Bair companies can put together a package of property and liability coverage. However, with businesses that involve more risk, such as a construction company, it can be more complicated and will involve a commercial package, he said. “A lot of times if they have drivers we would need employee names and dates of birth to get motor vehicle records,” Soma said. Also, if it’s a business already in existence, insurance companies need to know about past claims, he said. Soma suggests business owners do their
research before meeting with an agent. “Some people don’t really know or understand insurance policies,” he said. “A good agent will be able to help walk them through it, but it helps to research it.” Researching will also help the business owner understand what type of information is necessary to get insurance, which will speed up the process. If people aren’t prepared it can take a few weeks to get everything put together; if someone is prepared, insurance companies can get a quote pretty quickly, Soma said. Other advice for small businesses is to meet face to face with an agent — if possible the agent they already have for coverage such as car insurance, Bair said. Small businesses should also make sure they’re doing business with a good company, Soma said. “I would say to look for a reputable agent who’s been in business for a long time,” he said. “They might ask other people they come across to give them a reference as to who they might use and to make sure the company is a reputable company.”
GLOBE GAZETTE
IN BUSINESS JUNE 2011 • 33
HEALTHBEAT
Mercy Rehab: One-stop health shop for business Services help proactive companies train and retrain their employees By JOY DRENNEN For In Business MASON CITY ercy Rehab at the Cheslea Creek location offers a wide array of services to help companies train and retain their employees. “Industries here in North Iowa are proactive,” said Steve Crane, Rehab services manager. Under one roof, HealthWorks, the Home Therapy Shoppe, Wound Clinic and Rehab services are virtually a one-stop shop for companies, said Kris Kaiser, Mercy market-
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JOY DRENNEN/For the Globe Gazette
Steve Crane, Health Works Rehab manager, works with Mary Pederson in the Mason City facility.
423-2851 or 1-800-747-9296 4700 4th St. SW, Mason City
34 • IN BUSINESS JUNE 2011
GLOBE GAZETTE
REHAB: Four distinct rehab areas are offered to companies
Up in Smoke BBQ Bash
From Page 33
FOR NEW EMPLOYEE physical screens, the Cost Reduction Technologies system tests the applicant’s strength and range of motion to meet specific work demands, said Crane, and helps eliminate most high-risk injuries in the workplace. Results from the CRT computerized system are used for physical abilities testing, post-injury eval-
JOY DRENNEN/For In Business
Health Works Medical Assistant Robin Prehn administers tests to Kris Kaiser. uations for return to work and fitness for duty evaluations. They also are used for wellness programs and pre-plant closings. In this way, CRT promotes a safer
work environment, said Crane. Lori Nelson, with human relations at Woodharbor in Mason City, said the company heard of Rehab services
through a physical therapist at Cheslea Creek. Now, the company uses CRT evaluations rather than pre-employment physicals. Testing strengths “helps find a better fit to avoid injuries,” she said. The company has used CRT evaluations for a little over a year to match employees to jobs. In Rehab, a functional capacity evaluation gives an assessment of an injured worker’s physical abilities to determine if that worker is ready to return to work, said Crane. On-site services stress injury prevention, ergonomic evaluations and stretching programs, including job-specific exercises. WITH A PHYSICIAN on staff, HealthWorks clinic offers care and follow-up for injuries as well as pre-employment See REHAB, Page 35
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ing director. Crane said four distinct rehab areas are offered to companies: physical therapy and occupational therapy, new employee physical screens, functional capacity evaluations and on-site services. Physical therapy involves evaluation and treatment of musculoskeletal injuries and includes work re-conditioning and preparation for re-entry to the work force. Exercises help prevent re-injury.
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REHAB: 40 industries use work-related services offered by Cheslea Creek From Page 34
physicals and drug and alcohol screens. Audio and vision testing plus injections, blood pressure checks and blood draws are some other services. These are also offered as on-site services HealthWorks assesses restrictions on an employee to return to work. Companies are good about restrictions, said Robin Prehn, medical assistant. Rehab and HealthWorks work closely to facilitate employees going back to work. HealthWorks achieves this through restrictions while employees heal. Rehab diagnoses an employee’s strengths against job demands, then prescribes stretching and exercises to increase strengths. SOME 40 INDUSTRIES use workrelated services offered by Cheslea Creek, said Crane. For employers, this
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means insurance costs go down when employees are engaged in wellness programs. For employees, Rehab evaluates job demands and current limitations. The question is “Where do we need to go?” said Crane. With employees being matched to job demands, “Some employers are really creative,” he said. To match job demands self-care is part of the process along with an evaluation of what employees can do in terms of the job. Recommendations go to a physician, although, “We work with them (employees) a lot more,” Crane said. With CRT, functional cost reduction is one of the results, which means return-to-work evaluations and fitness-for-duty evaluations. Cheslea Creek services in North Iowa also are a boost for companies wanting to retain trained employees,
an employee doing a job.” That way, Crane can visually observe the LEANNE VANOORT, human strengths needed to meet the demands of the job, she said. resources manager for Engaging with people who do the job Stellar Industries in Garner, said the company is one of the most fun parts of his job, first went to Healthsaid Crane, noting, “It’s just problemWorks for physicals and solving.” drug screens as well as He can offer an outside view for accidents. Staff at safety offices, offering ideas that work HealthWorks then told somewhere else to reduce injuries. VanOort Stellar about Rehab serProblems are always unique, he said. vices. In today’s economy, employees are CRT evaluations are really important working longer hours and may rotate to Stellar, said VanOort, because they between two and three jobs. This help avoid putting employees in wrong makes evaluations a much-needed positions. tool, business representatives noted. One bonus is that it helped reduce Neither division uses contracts. workers comp as the Rehab program Rather, they depend on developing prevents more sprains and strains, relationships with employers. VanOort said. More and more companies want the Another benefit of Rehab, she said, services, said Prehn, and want is the extra service from Crane, who “comes right out on-site and observes employees to know about their health.
according to officials.
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