In Business - June 2010

2 • IN BUSINESS

JUNE 2010 • GLOBE GAZETTE

In This Issue: FOCUS ON AGRICULTURE:

Getting Started: ADVICE & MORE: • BUSINESS RECRUITING: Marketing micropolitan area can mean big results/Page 16 • FINANCE: New fund may aid small businesses, the Small Business Professor says/Page 26

Tim and Nicole Johnson.

• Ag’s impact: Spreading the money around/Page 3 • Innovation leads to success for Radcliffe firm/Page 6

• FINANCE: Consider the tax ramifications of tenant inducements/Page 31 • HR: It’s a great time for an audit — a communications, human resources audit/Page 32

• Truckers meeting the challenges of keeping up with farming/Page 9 • Ag equipment dealer succeeds by keeping local needs firmly in focus/Page 11 • Expansion is the key to survival for dealer/Page 13

FAMILY BUSINESSES: • Agriculture’s strength is good for The Goodnature Store/ Page 18 • Consistency the key for Britt real estate business/Page 19 • Carpet from corn gets farmers’ attention at Garner store/Page 14

Mark Hewitt, Ray Hewitt and Mark Arneson.

• Q&A: Mark Hewitt talks about the banking business, locally and federally/Page 34 • HEALTH: New bill creates more questions than answers/Page 36

ON THE COVER: Renae Johnson and her daughter, Kally, feed and water the family’s calves at their farm in Carpenter.

— Photo by Tim Ackarman

In Business: Vol. 8, No. 2, June 2010 Publisher: Howard Query 641-421-0500 howard.query@globegazette.com Editor: Joe Buttweiler 641-421-0542 joe.buttweiler@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 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 504020271 or by e-mail at news@globegazette.com.

Ag sector adds to many bottom lines in our area lmost one third of the 5,100 jobs in Butler County are related to agriculture.

Just over 30 percent of the jobs in Worth County are ag-related. In Mitchell and Franklin counties, about 25 percent of the jobs are agrelated.

It’s no secret agriculture is responsible for a big percentage of the economic activity in North Iowa.

When the ag sector does well, it bodes well for the economy as a whole and has softened the impact of the many recessionary factors that have been at play in recent years.

With those thoughts in mind we decided to focus this edition of In Business on agriculture’s impact on our regional economy, seeking to answer the question: How have North Iowa businesses taken advantage of the strong ag economy? How can others?

We asked business owners and managers for tips that will help others with their business.

While specific data on North Iowa was not available, we found that a study by the Coalition to Support Iowa’s Farmers and Iowa State University found that agriculture and ag-related business-

A

es accounted for more than $72 billion, or 27 percent, of Iowa’s total economic output in 2007.

The study, which is Joe Buttweiler cited in our In Business lead story Editor

by Tim Ackarman, found that nearly 332,000 jobs were estimated to have been created by ag, providing nearly 17 percent of the state’s employment.

“There’s a reason why Iowa’s unemployment figures lag national numbers by 3-4 percent,” said Aaron Putze, executive director of the coalition for farmers.

Businesses that have thrived along with the ag sector — whether or not they’re ag-related companies themselves — have done so by paying attention to customer needs and trends, staying up on technology, listening to employees and providing excellent service.

Also in the edition of In Business we focus on family-owned businesses with stories on All-Iowa Interiors, The Goodnature Store and Kelly Real Estate, and advertising pieces on Corporate Farmer, Northwestern

Steakhouse and others.

Finance columnist Randy Davis of RSM McGladrey shares advice for property owners for keeping tenants. Human resources columnist Jim Cronin writes about the value of doing a communications and human resources audit. Technology columnist Mike Munshower writes about erasing sensitive data and proper disposal of computers that are no longer needed.

We also have a Q&A with Mark Hewitt, president and CEO of Clear Lake Bank and Trust, and a member of the Federal Reserve Bank of Chicago.

Anticipating that many of our readers are wondering about impacts of federal health-care reform legislation, we sought to get some answers. Unfortunately, not much is known yet. We plan to focus on the reform’s effects in an upcoming edition. If you have particular questions you’d like us to ask, please send them to me or to In Business Managing Editor Tom Thoma.

Meanwhile, we hope this edition is helpful to you in taking advantage of the success of the ag sector, and in continued success if you’re already in it.

GLOBE GAZETTE • JUNE 2010

IN BUSINESS • 3

FOCUS ON AGRICULTURE

Ag’s impact: Spreading the money around hopes to graduate in December and is applying to pharmacy school.

Kally, 19, also completed her freshman year at NIACC. She’ll be at home this summer helping on the farm and

By TIM ACKARMAN working at the Carpenter Bar and Grill For In Business before moving on to the University of im Johnson said most people Iowa. probably don’t realize how much Eighteen-year-old Nicole, who just money comes to town from rural graduated from St. Ansgar High people.

School, will also work at home and at His family could serve as an example. the local watering hole before joining Between their farm and family her siblings in Iowa City. expenses, they add to the North Iowa Landon, 14, just finished eighth economy in many ways, contributing to grade. Active in football, wrestling, an estimated $72 billion annual impact track and baseball, the youngest Johnon the state’s economy by agriculture son will soon be eligible for a school or ag-related businesses. driving permit, thus the need for that The Johnsons, who live in Carpenter, sixth vehicle. have five personal vehicles. “We’ll The Johnson girls were also active in probably need to add a sixth one come sports during high school, along with fall,” Johnson said.

FFA and 4-H. The younger Johnsons Johnson and his brother Joe farm also raise and show beef heifers and about 500 acres, raise around 4,000 hogs. steer calves annually, do custom baling “There were nights there were kids in and operate a feed dealership. Recently four different towns,” Renae said.

TIM ACKARMAN/For In Business he added a part-time job buying hogs Those five family cars were seldom Tim Johnson of Carpenter and his youngest daughter, Nicole, review the feeding schedule for Lynch livestock. idle. There were numerous meals eaten for the family's show beef heifers.

Johnson’s wife, Renae, has worked at on the road, countless tanks of gas Woodharbor in Northwood for the past burned and several sets of tires seven years. Their eldest daughter, replaced. Maintenance work was hanKayla, 22, spent a year at North Iowa dled by Carpenter Auto Repair.

Area Community College before trans“I like to support our little town,” ferring to the University of Iowa. She Continued on next page

The Johnsons of Carpenter shows how one family can make a big impact on the economy

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4 • IN BUSINESS

JUNE 2010 • GLOBE GAZETTE

FAMILY IMPACT/From Page 3 Johnson said.

Not all of the family’s needs could be met in Carpenter. When not attending various activities, the Johnson kids were frequently at home entertaining friends and “significant others.”

“It’s a good thing there’s beef in the freezer,” Johnson said.

Although Johnson has his own beef butchered (usually at Elma Locker and Grocery) there were still plenty of trips to St. Ansgar Foods, Fallgatter’s and Dollar General in Northwood, or ALDI in Mason City for other supplies.

“You go to the store and it’s always triple what you think,” said Renae.

While at NIACC both older Johnson girls rented apartments in Mason City.

Both purchased laptop computers from Best Buy. Visits to Kohl’s and Southbridge Mall remain common.

“I don’t think people in Mason City have any idea how much money comes into town from rural people,” Johnson said.

The Coalition to Support Iowa Farmers (CSIF), a group committed to helping farmers grow in a responsible and sustainable way, would like to educate Iowans regarding that economic impact.

In cooperation with Iowa State University, the coalition conducted a study examining the direct contribution of agriculture to Iowa’s economy on both a statewide and a county-by-county basis.

The study found that agriculture and ag-related industries accounted for more than $72 billion, or 27 percent, of Iowa’s total economic output in 2007.

TIM ACKARMAN/For In Business

Nicole Johnson cares for her show beef heifers at the family farm in Carpenter.

Nearly 332,000 jobs were estimated to have been created by this activity, providing nearly 17 percent of Iowa’s employment.

Many counties derived an even

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Another ISU study examined ecoContinued on next page

GLOBE GAZETTE • JUNE 2010

IN BUSINESS • 5

FAMILY IMPACT/From Page 4 there is also a significant “ripple effect” nomic activity by congressional discreated when farm income is spent. tricts. In the 5th District, which “My father-in-law owns a lawnincludes North Iowa, ag accounted for more than $7 billion (nearly 36 percent mower business in Iowa Falls,” Putze said. “When the farm economy is doing of total gross domestic product) and well, the little bell above more than 102,000 jobs the door rings more (29 percent of total often.” employment).

Putze sees more than Although Iowa hasn’t There’s a reajust dollars when he looks completely escaped the son why Iowa’s at agriculture in Iowa. recent economic downunemployment fig“The viability of the turn, the state has seen farm family on the land a less-drastic decline ures lag national goes well beyond ecothan many other numbers by 3-4 per- nomic impact,” he said. regions.

“It’s the social fabric of “We haven’t really colcent. A number of the community.” lapsed, and part of that is experts believe ag While the Johnson that steady demand for has a lot to do with family has been part of food,” Otto said. the “social fabric” of “There’s a reason why that. There are North Iowa for some Iowa’s unemployment many things people time, Carpenter will have figures lag national can do without; food to get by without all numbers by 3-4 perthree girls when school cent,” said Aaron Putze, isn’t one of them.” starts this fall. Their parexecutive director of — Aaron Putze ents hope it won’t be for CSIF. “A number of Executive director, Coalilong. experts believe ag has a tion to Support Iowa “The older girls and lot to do with that. There Farmers their boyfriends love to are many things people come back and spend can do without; food time on the farm,” Renae said. isn’t one of them.”

So while the young ladies may be The studies measure only economic away from home soon, “I don’t think activity directly related to agriculture.

Although it’s more difficult to quantify, they’ll go too far,” Johnson predicted.

“

AG’S ECONOMIC CONTRIBUTIONS IN NORTH IOWA County Total Jobs Ag-Related Jobs Total Property Tax Property Tax paid by Ag Cerro Gordo 32,438 1,985 $47,181,890 $5,847,247 Butler 5,100 1,698 $14,781,550 $6,453,309 Floyd 8,289 1,641 $16,703,114 $5,773,823 Franklin 5,063 1,409 $15,322,825 $7,222,589 Hancock 7,401 1,491 $14,595,009 $6,389,475 Kossuth 9,047 2,237 $21,906,415 $10,873,310 Mitchell 5,563 1,400 $11,322,668 $4,906,605 Winnebago 7,198 786 $11,568,675 $4,458,155 Worth 2,739 823 $9,397,210 $4,605,828 Wright 8,022 1,779 $15,907,109 $5,870,980 —Source: Coalition to Support Iowa Farmers (www.supportiowafarmers.org) Iowa Ag Contribution Analysis

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6 • IN BUSINESS

JUNE 2010 • GLOBE GAZETTE

FOCUS ON AGRICULTURE

Innovation leads to success Radcliffe firm’s products make plants grow better

By DANA YOST For In Business RADCLIFFE s a soil scientist for the U.S. Department of Agriculture, Dan Olk can’t endorse commercial products.

“But I can tell you my results,” said Olk. Those results, he said, show products from Innovative Crop Solutions of Radcliffe are having a positive impact on plant growth.

Olk works at the Agricultural Research Service National Laboratory for Agriculture and Environment in Ames. The lab is in a research partnership with Ag Logic Distributors, which markets and distributes products for Innovative Crop Solutions.

“In general, not everywhere but in a majority of cases this product does seem to be having an impact on plant growth,” Olk said. “In general, we don’t know yet (why) it works but there may be several things going

TIPS to success A Advice from Brett Rhodes, sales director for Ag Logic: • Get out and talk to your customers and try to learn and understand how they view things. “It sounds trite, but customers are your business and they’ll tell you what’s going on.”

• When you are interacting with people, don’t be afraid of problems or difficult questions you don’t have the answers to. Face them; people appreciate that level of effort. “We’ve taken calculated risks,” Rhodes said, “and we have a good business team at the investor/resource level.”

• As an entrepreneur, be willing to wear different hats, but also be ware you have to be able to pull back and work on the big picture, on “what’s really important.”

Continued on next page

DANA YOST/The Globe Gazette

Ag Logic Sales Director Brett Rhodes says accepting blunt answers from experts was a key to suc-

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IN BUSINESS • 7

ICS/From Page 6 “When you work with the USDA you don’t really dictate or manage your results. They are what they are.”

That has been an important way to approach the collaboration, Olk said. That’s because the products made by ICS and distributed by Ag Logic are in a relaTHAT DOCUMENTED AFFECT on plant growth is tively new category that has in the past met with unfavorable outcomes: The two products, Yield a leading reason that sales of ICS’ products have jumped by triple-digit percentages the past few years Igniter and Igniter ’98, are humic-acid products in the category of plant health, Rhodes said. They’re and why the company was able in January 2009 to also classified as fertilizer because they contain move from its machine-shed beginnings to a 350,000-gallon-capacity manufacturing facility just nitrogen, phosphorous and potassium (NPK) but they’re intended to work more as a fertilizer suppleoutside of Radcliffe. ment or additive.

There are other factors as well, namely an aggresWhat makes them different from traditional fertilsive marketing effort by Ag Logic that puts company izer is the humic acid, which comes from lignite coal leaders and soil scientists in fields around the state, mined in North Dakota. Humic acid can be found in engaging in direct discussion with growers who are decomposed organic material, such as peat or coal. seeing the product work in their own fields.

The research partnership with the ARS lab in Ames The coal arrives at the Radcliffe plant and is mixed was recently extended to 2014. Since the partnership into liquid form with the NPK. It is sold in 2.5-gallon jugs or 260-gallon containers. began, the number of acres around the state where When it arrives at the plant, the coal is “real fine, the product is applied has increased from more than real fine coal,” Plant Manager Dan Kluesner said. “It 30,000 in 2008 to more than 50,000 last year, creatis actually finer than baby powder.” ing an ever-growing set of data.

That information reinforced what company leadWHILE IT’S NOT known how ICS’s products ers believed about their product and better armed them to try selling directly to growers and to punch into the retail market, selling products at farmers’ cooperatives.

on affecting soil and plant. But we don’t know why it’s causing plants to grow better.

“We do know that it’s affecting plant growth.

That’s what this collaboration is for. We’ll definitely learn something from this.”

PUTTING SCIENCE BEHIND their product claims was a key, said Ag Logic sales director Brett Rhodes.

So they approached the USDA and were willing to accept blunt answers.

“They came to me, took the initiative,” Olk said.

“They wanted to know the truth — does it work or not?”

“We took a view of being unabashed, unafraid of what kind of results there would be in the research,” Rhodes said. “In other words, we wanted to test and understand the effects of our products and where it goes is where it goes.

work, Rhodes said it’s becoming clear where they work: Improving plant health and corn yield through increased plant biomass, lower moisture, increased lateral root mass and increases in nutrient uptake.

The results are what growers should like, Rhodes said: Higher yields and potentially lower costs in the field for both the short and long terms.

Some growers are reporting that after a couple of years of using the products they are able to reduce the amount of fertilizer they apply because it appears the soil is retaining more NPK from year to year — or at least that crops are able to increase their uptake of it.

Rhodes showed a chart with aerial photos and soil tests of the same field taken after the 2007 and 2009 harvests — there was a 29 percent increase in soil phosphorous over the two years.

That’s part of plant health, Rhodes and Olk said.

When it’s learned how the products can improve a single plant and the processes can be standardized and replicated, “The whole field rises,” Rhodes said.

BUT THERE IS still the matter of convincing growers to try a new product. And there’s a bit of stigma attached to humic-acid products, Olk said, because past companies might have misrepresented Continued on next page

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8 • IN BUSINESS

JUNE 2010 • GLOBE GAZETTE

ICS/From Page 7

“

TRUCKIN’ Meeting the challenges of keeping up with farming

By TIM ACKARMAN For In Business an Doughan of Britt has seen a lot of changes in agriculture and in the farm trucking industry.

His father and grandfather shelled corn and hauled it to town in straight trucks. They transported livestock for the same customers, many of whom were also their friends and neighbors.

Dan took over Doughan Trucking from his brother, Dwight, more than 30 years ago. He no longer hauled livestock and modern combines were quickly rendering the corn sheller obsolete.

He was still loading grain using augers and carrying it in straight trucks.

“I’d wear out an auger every other year,” he said.

The 1980s brought further transformation to agriculture. The number of farmers decreased while yields and the size of on-farm storage facilities increased. Doughan needed to offer larger trucks and service a wider area.

“It used to be about a 10-mile radius; now it’s 5060 miles,” he said.

With many producers farming at multiple sites, frequently miles apart, it’s often inconvenient for today’s farmer to be present when the truck arrives.

D

“They don’t want to have to be there,” Doughan said. “That allows them to farm more ground.”

Working in grain bins and around augers alone can be dangerous. To minimize the risk and decrease the manual labor, Doughan began using a grain vacuum.

His current setup, which he and son Levi built from an older Gardner Denver grain vac and a rebuilt International combine engine, can load 950 bushels of grain onto one of his semi trailers in about half an hour.

Having the self-powered vac minimizes the requirement for additional machinery onsite as well as the need for assistance from the customer.

“Some guys I’ve never even met,” Doughan said.

Recent high yields have forced some farmers to become creative in their search for storage. Customers Continued on next page

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their effects or yield-growth results. So it’s important for small companies like Ag Logic and ICS, trying to expand from selling locally to cracking through to a larger regional market, Rhodes said.

Potential customers are likely to have questions, and the companies aren’t shying away from trying to talk about answers.

“That’s one of the best things — you don’t just sell it to ’em and you’re gone,” Kluesner said.

“You’re going to go out That’s one of and relate to them.”

So far, customers the have responded, he best said. Sales grew by things about 225 percent last year and 300 percent — you in 2008. For 2010, they don’t are projected to grow by 150 to 200 percent, just Rhodes said. sell it to ’em and Olk said the collaboration with the Ames you’re gone. You’re lab and Ag Logic has going to go out and been good. His lab gets relate to them.” information that can help it meet its man— Dan Kluesner date to improve the plant manager nation’s ag economy and products, and he gets data that helps him write the required academic peer-reviewed papers. He’s hoping it will lead to a role-model program for such collaborations.

In turn, Ag Logic gets scientific proof of how and why the products it sells work.

“It’s a very nice collaboration,” Olk said. “I have not felt any pressure from them to say this or say that. They want to know, and want to know who would benefit from their product, where it would work best, so they could go to Farmer Jones and say, ‘You would benefit from this for these reasons.’

“I’m an honest person, and I’ve been very pleased with the utter, thorough honesty of everybody I’ve dealt with.”

Rhodes likes the partnership and the future of ICS and Ag Logic, too.

“When you have a small company that has a customer base and continues to research and is not afraid to go out and make every attempt to prove your product’s effectiveness, there’s a market for that attitude, you know?” Rhodes said. “If you can be reasonable about (marketing) your prices or your product and its merits, the marketplace ultimately decides how accurately you portray its benefits.”

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GLOBE GAZETTE • JUNE 2010

IN BUSINESS • 9

TRUCKIN’/From Page 8 have turned to piling grain in old barns or sheds.

“They fill anything they can put grain in,” Doughan said, some of which may have held ear corn shelled by the elder Doughans years ago.

LIKE DOUGHAN, Roger Schmidt has a long family history in agribusiness. His grandfather was a cattle buyer and his father a hog buyer. Schmidt delved into the livestock trade while attending high school at Klemme.

In 1967 Schmidt and his wife, Deb, started Schmidt Livestock (now Schmidt Livestock and Trucking) in Garner. In 1974 they purchased their first Kenworth, paying $20,000 for the semi tractor and another $18,000 for the livestock trailer.

Roger believes his primary motivation for buying the rig was to take advantage of an opportunity to haul cattle from Kansas City to Mason City. Deb also recalls it being a matter of convenience.

“You wanted to have a truck when you wanted a truck,” she told her husband.

The Schmidts eventually expanded to have eight or nine livestock trailers on hand most of the time, with the TIM ACKARMAN/In Business majority of the trucks provided by owner-operators.

Dan Doughan uses his grain vacuum to empty a bin. Although some manual labor is still required, the system is easier and “I never grew like some of them did,” Roger said. safer than using an auger, according to Doughan.

CONSOLIDATION IN both agriculture and the meat-packing industry has had a pronounced effect on their business. Most of the small operations from which what you have to have,” Deb said.

“The day of just going out and getting a CDL (comthe Schmidt’s purchased livestock disappeared by the mercial driver’s license) and hitting the road are late 1990s. “I’m a has-been hog buyer,” Roger said. over,” Roger said.

Although the Schmidts still buy livestock, the The Schmidts have adapted to the changes by commajority of their business is now derived from their puterizing much of their business and hiring fulltrucking. Rather than small family farmers, many of time employee Jean O’Rourke. “We’d have been their customers are larger corporations. divorced” without her assistance, Deb jokes.

“If you didn’t get in with the corporate guys, you Whether or not O’Rourke saved the Schmidts’ were on the outside looking in,” Roger said.

Many of those corporations require meticulous record marriage, her presence will apparently keep them in keeping and daily reports. Regulation by the Department business well past traditional retirement age.

“I’ll work until I’m 79,” Roger said, “because my of Transportation and U.S. Department of Agriculture helper won’t turn 65 until then.” has also increased dramatically, the Schmidts said.

— More photos and tips for success on Page 10.

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JUNE 2010 • GLOBE GAZETTE

TIM ACKARMAN/In Business

Deb Schmidt reviews a binder of trucking regulations. The volume of rules and record-keeping requirements in "unbelievable," Schmidt said. Left: Roger Schmidt helps customer Ed Olson of Joice unload hogs at Schmidt Livestock and Trucking in Garner. Consolidation in agriculture has reduced the volume of livestock sales, causing Schmidt to rely more heavily on the trucking portion of his business.

TIPS for trucking success: Although the strong ag economy has created opportunities in the trucking industry, both Dan Doughan and the Schmidts said overhead is high and profit margins thin.

“Fuel and insurance will eat your lunch,” Roger Schmidt said.

“I see a lot of young individuals getting into trucking,” said Doughan. “Regular grain haulers make maybe 50 cents a mile.

If you don’t get the miles it won’t pay.”

Doughan encourages newcomers to hire on with an established company before going it alone.

“I don’t know if I’d buy a truck right away,” he said. “Hook up with someone first, see if you like it.”

Emptying grain bins can require more labor than just driving a truck, especially if any of the grain is wet or spoiled, Doughan said. Yet for those willing to do the work, the rewards can be greater as well. “I’m often getting paid more for grain-vaccing than hauling.”

For those already in business, the Schmidts emphasize the importance of communication and customer service.“One thing in this business,” Deb said,“it’s 24 hours seven days a week.”

“Don’t turn down a good customer,” Roger advises. “Never slap the hand that feeds you. You can’t let your customer shop around. They might find a trucker they like better than you and they won’t be back.”

Operating a multi-faceted business can be stressful, particularly for a husband-and-wife-team. Schmidt encourages business owners to be positive with customers regardless of the circumstances.

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12 • IN BUSINESS

JUNE 2010 • GLOBE GAZETTE

FOCUS ON AGRICULTURE Ag equipment dealer succeeds by keeping local ag needs ...

Firmly in Focus

By DEB NICKLAY deb.nicklay@globegazette.com OSAGE

orth Country Equipment President Randy Norby does more than oversee the sales and repair of farm machinery.

He uses the equipment himself. He is a crop farmer and president of North Country Equipment LLC, with offices in Osage and Northwood.

“I’ve always felt that (farming ourselves) helps us,” Norby said, referring to his own operation. “It also gives us some ‘hands-on’ on the equipment.”

Dana Norby That’s just one small way Norby and crew have kept what’s important to the North Iowa ag sector firmly in focus.

The bigger keys are this: Expanding when needed, keeping abreast of technology, working and listening to a solid employee core, and service, service, service.

“I would say our numbers have been up substantially over the past five years,” Norby said.

N

DEB NICKLAY/In Business

Lead service technician Mark Brown chats with North Country President Randy Norby. Service and repair are significant parts of the company’s business.

The business offers a complete line of John Northwood. Norby’s brother, Dana, is the company’s sales manager while Jay Behne of NorthDeere equipment — from the largest of implements right down to lawn mowers — and also sells Continued on next page used equipment. A full service and repair shop hums all year.

The current company was born in 2007 from two long-standing local John Deere Implements dealerships — Norby Green Country of Osage and Northwood Equipment Inc. of

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GLOBE GAZETTE • JUNE 2010

IN BUSINESS • 13

EQUIPMENT/From Page 12 wood serves as equipment and advertising manager. There are 35 employees, he said.

That merger, he said, created “a larger footprint” because of its expanded customer base. Customers extend into southern Minnesota and stretch across Mitchell and Worth Jay Behne counties as well as portions of Floyd and Winnebago counties.

Norby said the largest impacts on North Country business are the same as those faced by the ag community.

“Commodity prices, interest rates, energy and oil prices,” Norby counted. “And Mother Nature. Just like farmers, weather has a huge impact on our business.”

FOCUS ON AGRICULTURE Birth of a company North Country Equipment LLC was formed in 2007 by a merger of two neighboring John Deere dealerships: Norby Green Country was founded in 1979 in Osage. John Norby, father to Randy and Dana Norby, had been a partner and key employee in Richard Sales and Service Inc., located in the original building used today. A new service building was built and attached to the original building in the late 1980s.

Northwood Equipment Inc. was formed in 1973 when Les and Chris Behne purchased Boyd Implement.

Along with the purchase came a move from the downtown location to its current location in the east side of Northwood. Two major additions have been made to the building and the site expanded. In 2000 the Behnes’ son, Jay, partnered with this parents in the dealership.

— North Country Equipment

‘Expansion key to survival’

but it won’t be this way forever,” he said. “The world itself spins on a vicious cycle. We’ve just got to be smart enough to

By DICK HAGEN recognize the cycles.”

For In Business He talks about the difficult earlier times of the ever try to beat a 1980s when hanging on man at his own was the challenge. game was the Tenneco, which advice of Jim Hinton, already owned Case, father of Randy Hinton, bought the International general manager of the Red Power Case/IH Team Harvester business in 1985. The new Case/IH of northern Iowa. That company also struggled was back in 1971 when for awhile. The tag line Randy and his dad were DICK HAGEN/For In Business on his business card just trying to get a toeDESPITE THE FLOODS and Wall Randy Hinton has Case-IH reads: “We’re here to hold in the farm equipStreet crisis of 2008, ag business stores around North Iowa ment business with their serve; yesterday, today, survived on good crop prices and and is eyeing Minnesota.

Continued on Page 39 start-up store in Banultimately weather. croft.

Norby pointed to his own laptop “The fact is, we’ve had great crop Today that Red-Power and said, “That doesn’t leave me. If I years,” he said. had to, I could do most things I need Team has expanded to But running a business in the black to do from my truck if I have this.” five more Case/IH stores takes more than timely rains and Keeping on top of technology is, he in Corwith, Manson, sun; a strong partner — John Deere said, one of the biggest challenges to Humboldt, New Hamp— has helped position North Counthe industry. ton and Mason City, a try for success.

The business’s repair and service, 370-mile round-trip Deere’s front-running commitwhat Norby calls the “after sale” journey. Randy Hinton ment to integrating the latest in portion of the operation, has grown now takes a slightly difAnd, so do we. Sukup Manufacturing Company - a technology into equipment is just markedly and makes up some 20 ferent twist to his dad’s one reason why, Norby said. family-owned company with our roots firmly percent of the company’s business. advice. His business “We have stood in the forefront of New sales and sales of used equipplanted in the rich Iowa soil. mantra today: If you’re GPS; today, it’s a whole lot more ment roughly split the balance, he going to survive in than just guiding tractors down a said. today’s world, you’d betfield,” Norby said. “It’s used in ter be ready to expand. planters that prevents planting THE COMPANY has a strong Because he likes chalthrough waterways; systems that emphasis on service and building lenges, he talks about automatically turn sprayers on and strong relationships not only with further expansion. off. It’s incredible. It opened a whole customers but with its employees, Though only 20-25 miles new door” for farmers, he said. too.

That technology has reshaped his The ranks include a mix of experi- away, he’s not yet into Minnesota but his team repair staff, who have a skill level in ence and youth, providing a good is selling equipment into diagnostics and repair not envilevel of energy. He holds monthly the Gopher State. sioned even 15 years ago. “needs and wants” meetings with From experience Hinmanagers to throw around new ideas. ton knows the farm “THESE AREN’T guys ‘with grease “It’s not just about reports, and we Sukup Manufacturing Co on their hands,’ ” Norby said. have ideas coming from our employ- equipment business is www.sukup.com “They’re out hooking laptops up to ees all the time,” Norby said. “That’s cyclical.

Sheffield, Iowa • 641-892-4222 tractors and planters and doing diag- why we thrive. These are the people “We’ve been on a good email: info@sukup.com nostics right there.” ride for some time now who make this place go.”

That’s the mantra of implement dealer Randy Hinton

N

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14 • IN BUSINESS

JUNE 2010 • GLOBE GAZETTE

FAMILY OWNED BUSINESS

Carpet from corn — yes, corn — gets farmers’ attention

By LAURA BIRD laura.bird@globegazette.com GARNER

ll Iowa Interiors has been drawing the attention of North Iowa farmers recently.

They’ve been stopping in the Garner store to check out a new product called smart strand. It’s a carpet made out of corn.

“Some have come in just to see it,” owner Tami Eastman said.

“There have been some around here that come in and ask for it specifically.

They’re very intrigued by it.”

When they come in they’re greeted with a banner that explains how the carpet is made from corn. Handouts are avail-

A

A Garner fixture All Iowa Interiors was opened by Pete Sharar in 1970 and was originally called All Iowa Sales.

The business started with a roll of carpet and expanded into other things, said Sharar’s daughter and current owner, Tami Eastman.

In the 1980s it started focusing on flooring and interior decorating.

Eastman took over the business in 2000 when Sharar retired.

Shortly after that she changed the name to All Iowa Interiors to better describe what it sells.

The business still focuses on flooring and interior decorating.

For more information visit www. alliowasales.com.

LAURA BIRD/In Business

Tami Eastman, owner of All Iowa Interiors in Garner, shows samples of smart strand carpet. The carpet has attracted farmers to the store because it is made out of corn.

455 Hwy 18 West Garner, More than just another pretty latte Owner: Gracka Gruis • Open since August of 2005

Continued on Page 16

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AND PROUD OF IT! IN GARNER Small town hospitality, a dedicated, caring staff and quality results using state of the art technology is what you’ll find at the dental practice of Drs. Tesene, Maurer and Maurer. Dr. Roy Tesene founded the professional dental practice in 1979. He chose Garner due to its growing population, thriving manufacturing, stable farm economy and solid school system. Since then, he has provided the residents of Garner and surrounding communities comprehensive dental care with a gentle touch.

Drs. Matt and Amy Maurer joined the dental practice in 2004.

Their desire to practice together in a warm and inviting community made Garner an easy choice.

Together, the three dentists work with their patients to achieve and maintain good oral health for life.

The doctors have extensive training in all areas of general, restorative and cosmetic dentistry.

Other specialty services include orthodontics, implants, oral surgery and endodontics. The doctors strive to stay current MS-20138286

with new technologies. For example, they have just added an oral cancer-screening device that uses different wavelengths of light to identify suspicious tissue. The warm atmosphere and gentle approach makes dentistry comfortable for ages one through adulthood.

The doctors and staff are quite actively involved within the Garner community. They are involved in Garner Rotary, Garner Betterment

Committee, Garner Chamber of Commerce and YIELD Mentorship Program. They also participate as a team in the Hancock County Relay for Life.

16 • IN BUSINESS

JUNE 2010 • GLOBE GAZETTE

By GREGG GILLMAN

Commentary:

Marketing micropolitan area can mean big results

new locations, generally id you know that most micropare not familiar with our olitan areas don’t market themarea, we try to present a selves to national site selectors?

Micropolitan: As opposed to a metbroader picture to start, We are a micropolitan area. But not ropolitan area, a micropolitan area con- market ourselves to national site encompassing Cerro tains an urban core of at least 10,000 Gordo County and the selectors? Forget that. (but less than 50,000) population. Metseven to nine counties Here at the North Iowa Corridor Ecoropolitan and micropolitan statistical that surround us. That is nomic Development Corp. we think we Gillman areas (metro and micro areas) are geo- have a great product to sell and we’re largely because of our graphic entities for use by federal stagoing to do it nationally and even inter- laborshed population. tistical agencies in collecting, tabulatnationally.

A laborshed refers to where workers ing, and publishing Federal statistics.

Because these national consultants, who are employed in a certain area ••• who represent companies looking for Continued on Page 30 Executive Director, North Iowa Corridor Economic Development Corp.

D

ALL IOWA INTERIORS/From Page 14 able, too.

Initially Eastman started carrying the product because it is soft, easy to clean and less expensive than regular carpet.

The product’s popularity with the North Iowa agriculture community ended up being a bonus. “It’s a great

product,” Eastman said.

The strong ag economy, which hasn’t been hit as hard as the overall economy, has helped keep business steady at All Iowa Interiors.

“When everything was a little bit weak we did notice it in sales,” Eastman said. “Overall

we’ve stayed steady, though.”

Some farmers who have done well in recent years have bought new flooring or completed other remodeling projects.

“We have noticed farmers doing more in their home,” Eastman said.

However, Eastman admits

that it’s hard to tell if farmers are replacing flooring because they have been doing well or if it was just time to replace it.

Either way it’s more business.

Some have also built new sheds, which they have added flooring to for an office or whatever need they might

have, she said.

“We’ve noticed that the last couple of years,” she said.

Eastman said she’ll try to continue to tap into the agriculture economy by looking for more products that might appeal to people in agriculture-related jobs.

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LOCAL & FAMILY OWNED • LOCAL & FAMILY OWNED • LOCAL & FAMILY OWNED

Let’s Get Acquainted with the Hueneman Farms

Hueneman farms have been around for many years and most people in the north Iowa area have heard about their farming operations through the years.

In 1977 KJ Hueneman graduated from Iowa State University in Ames, Iowa and moved back to Garner, Iowa to start farming on the family Century Farm that was established in 1875.

KJ expanded the farming operations. Rented crop acres expanded also along with custom farming. Currently approximately 3,000 acres are harvested each year. As the operation has grown the commitment to timeliness and a quality job done has not changed. Long term relationships with land owners and custom customers has been achieved as shown ongoing working relationships that began over 20 years with the same people.

Late model machinery is utilized to take care of client needs along with the latest in technology. Maintenance and service is done by our own techs in our shop to keep equipment ready for work.

We treat each acre the same whether it’s owned, rented, or custom farmed.

MS-20138521

Hueneman Farms LC was established In 1996 KJ & Karen as a trucking company. Hueneman Farms LC had 2 tractors, 1 van trailer, and 1 livestock trailer. In 2002 a 7,000 sq. ft. shop was built and in 2005 an office was built adjoining the shop. Currently Hueneman Farms has fifty three 53’ dry van trailers, 24 company owned trucks and 16 leased operators.

We still have our 1st customer from 1996 and our 1st driver, Dale Finger is still with us today.

We are fortunate to have some of the finest drivers, dispatchers, and shop personnel in the business. We utilize late model, exceptionally well maintained equipment; this along with our drivers allows us to maintain a great “on-time” record.

Our customers soon learn to expect complete satisfaction whenever a load is tendered to Hueneman Farms. Our customers also know that in the event of an unpreventable delay, weather, break-down, or sickness, they will be the first to know, so that they can contact their customer before the load is late.

We are neither the oldest trucking firm nor the largest but we have established quite a reputation for being very dependable and we have extremely loyal employees. The trucking operations have been recognized as one of the best fleets to drive for by trucking industry peers. In March 2009 Hueneman Farms was listed in the 2009 Best Fleets to Drive for.

Many people don’t realize that their trucking operations run from coast to coast to serve clients across the country.

Hueneman Tire opened in October 2008 to address all of your tire and service needs.

The newest Hueneman Tire opened in October 2008.

They established a tire business to better serve Garner with Goodyear, Cooper. Firestone, Toyo and Nitto tires.

The knowledge and experience we’ve gained from our Trucking,

Logistics, and Farming operations has made Hueneman Tire a natural fit that nicely complements our other divisions.

The newest member of the Hueneman Family of businesses delivers the same commitment to quality service and complete customer satisfaction that people have come to expect from a Hueneman company.

Hueneman Tire can order virtually every brand of tire that is made so don’t hesitate to ask us about your favorite brand of tire for your farm, construction, or any other tire needs.

Hueneman Logistics rounds out our trucking business. Asset based logistics allows us to take care of all our customers transportation needs.

Formed in 2003, Hueneman Logistics allows us to provide extra freight hauling capacity to our customers and also allows us to provide a diversity of equipment available.

Hueneman Logistics has developed alliances with our partner carriers throughout the United States. This partnership allows us to provide some very specialized services. All of our partner carriers must meet Hueneman Farms same quality standards, including insurance requirements, Safe-stat scores, and excellent service.

Our companies have grown considerably. The trucking, tires, logistics and farming operations have been expanded several times through the years and they now have a total of 50 employees. The entire operations are guided by president KJ Hueneman, vice president Karen Hueneman, Heather Billing and Mollie Safety.

The company and our employees are very community minded and have continually demonstrated their support and commitment to the Avery Theatre, Rotary, the schools and the swimming pool in Garner

18 • IN BUSINESS

JUNE 2010 • GLOBE GAZETTE

FAMILY OWNED BUSINESS

Ag’s strength is good for Goodnature LAURA BIRD laura.bird@globegazette.com GARNER

he retail business has been a little shaky at The Goodnature Store in Garner the past couple of years.

However, one aspect of sales has remained relatively steady — men’s work clothes.

“It’s still been doing really good,” said owner Marie Frederick.

Men’s work clothes such as boots, pants and jackets have remained steady partly because of the strong agriculture economy in the area.

The ag economy hasn’t been hit as Frederick hard as other sectors of the economy.

“Work boots and Carhartt is our No. 1 vendor, which definitely appeals to the ag economy,” Freder-

T

LAURA BIRD/The Globe Gazette

Kelly Arnold, a sales associate in the shoe department at The Goodnature Store in Garner, arranges work boots. Sales of work boots, Carhartt and other work clothing have remained steady throughout the recession. The strong agriculture sector has supported those products.

Continued on next page

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GLOBE GAZETTE • JUNE 2010

IN BUSINESS • 19

FAMILY OWNED BUSINESS

50 & Counting Kelly Real Estate still strives to serve its customers the same way it did in 1960.

“Once I get started I don’t like to keep changing things around,” Kelly said. “Consistency has always been

By MEGAN VERHELST important in how we do business and For In Business how we treat our customers.”

BRITT Kelly Real Estate opened Aug. 15, or Paul Kelly, it’s all about offering 1960. Just after their wedding, the Kellys — who were living in Des his customers consistency — a Moines — returned d to Britt to start belief that has led him and his family to a half-century of helping area their life together. Although Kelly said residents find their homes. getting into real estate was something This year marks 50 years since Kelly he had wanted to do since his high and his wife, Marlys, returned to the Britt school days, his return to his homearea and began their married lives with town is what prompted him to start the MEGAN VERHELST/For In Business the creation of a small real estate busibusiness.

Kelly Real Estate in Britt is celebrating 50 years in business. Those behind the success of ness. Although five decades have passed, Continued on Page 22 the business include (from left) Bonnie Pals, DeAnna Kelly, Marlys Kelly and Paul Kelly.

Paul Kelly says consistency has been the key to his real estate business over half a century

F

GOODNATURE/From Page 18 ick said.

The ag sector has been a long time supporter of The Goodnature Store.

Fewer people are working in it now but it’s still a big part of Goodnature’s business.

That’s why Frederick tries to keep the store in stock with things such as rubber boots, work boots, jackets and work pants.

She expects sales to be especially good this year with the nice spring farmers had.

“We’re going to have a good crop,” Frederick said. “I think things look good for ag.”

If things continue to go well for work-related items, Frederick said, she might expand what they carry.

It would be expanding on what the business does best, which

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Frederick recommends other businesses do if they want to take advantage of the strong ag economy.

“Just keep with it,” she said.

“Just keep doing what you’re good at.”

Things are looking up for the rest of the department store, too.

Frederick said sales have been up this year compared to last year.

Pete Goodnature opened store in 1950 The roots of the Goodnature Storm were planted in 1950 when Pete Goodnature opened a Federated store in Garner.

In 1953, he followed a friend’s advice and changed it to Goodnatures.

Married to wife Phyllis in 1948, the Goodnatures had five children and over the years all worked in the store.

Maria, the youngest, is the manager now.

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22 • IN BUSINESS

JUNE 2010 • GLOBE GAZETTE

KELLY/From Page 19 When the business opened, Marlys helped her husband in the office by answering phones. Occasionally, Kelly’s father, Frank, would help as well.

Kelly said when the business was first up and running, the cost of farmland was $345 per acre.

Today, farmland costs almost $6,000 per acre.

“One of the biggest things that has changed is the price of property,” Kelly said.

Getting a business off the ground was not an easy task at first, he said.

“It takes awhile to get that confidence in yourself and for people to have confidence in you,” he said.

It also wasn’t easy trying to start a family, either, Kelly said.

“We didn’t really have any money saved up, so it was challenging trying to start a business and a family at the same time,” Kelly said.

But as the Kelly family grew, so did its business.

Being involved in real estate was a good fit for family life, Kelly said. The flexibility of owning their own business allowed Kelly to play an active role in

his children’s lives and their activities.

“If you don’t keep up with your family, you’re not going to keep up with your business,” Kelly said.

As the years passed, Kelly said, staff was required to take on many changes. One of the biggest was the advancement of technology.

In 1979, Bonnie Pals came on board as a receptionist. In 2002, the Kellys’ daughter-in-law, DeAnna, joined the business as a full-time real estate agent.

In order to better serve customers, Kelly said agents are required to take continuing education classes. “I took extra classes if I thought it would help or if it was something I wanted more information on,” he said.

One of the best parts about owning a business in Britt, Kelly said, is the people.

“They are honest people to work with,” Kelly said. “They are trustworthy and friendly people.”

But customers are not the only ones who are trustworthy. Along with consistency, Kelly said he

feels trust plays a key role in why Kelly Real Estate has been around for 50 years.

“I’ve always stood behind what I said I was going to do,” Kelly said. “It’s important that people trust you to stand behind what you say.”

Kelly said he hopes the business will stick around Britt for another 50 years.

“Probably not with me, though,” he said with a laugh, “but we’ll stay on an even keel and go forward as we have been.”

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Family-owned business tips: If a family member gets experience somewhere else and then joins the family business later, that’s a good thing. They will bring new ideas and fresh thinking — avoiding the insular thinking that often plagues family businesses and ultimately leads to their downfall.

• Nip family business problems in the bud: When issues arise between family members, address them quickly. Be on the lookout for hostility or jealousy between family members, and deal with such issues directly as they arise.

• Don’t take your work home and vice versa: Distinguish between family discussions and business discussions and

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keep those conversations separate.

Don’t have business meetings at the house, and don’t have family meetings at the business. Mixing the two together all the time is a recipe for disaster. The business, the family or both may fail as a result.

• Hold family members accountable for results: A family business must lay down clear guidelines: in the business, we are going to hold you accountable for your actions, just as we hold all of our employees accountable for their actions.

Every family member should have a detailed job description.

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• Communicate early and often: Good communication avoids unpleasant surprises and can minimize the damage on potential family business crises by addressing problems sooner rather than later.

Take the time to ensure that good communication channels between family members are in place. It’s a smart idea to conduct family-only business meetings at least twice a month.

• Don’t make working at the family business mandatory: It’s wise not to force a family member to join the family business. Let them know that it’s an option but encourage them to consider other options.

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LOCAL & FAMILY OWNED • LOCAL & FAMILY OWNED • LOCAL & FAMILY OWNED Advertising Supplement

Let’s Get Acquainted with Cell-U-Byte Location: 1531 4th St SW Mason City Phone number: 422-1466 Fax Number: 422-1465 Business Hours: Monday-Friday 9-6 Sat 9-1 Our Products: Exclusive authorized agent for US Cellular Owner: Mike & Sonni Bergan Year Established: 1996 Did you know? We do phone repairs for other wireless carriers besides US Cellular and have used phones for other Carriers Number of Employees: 8 Email: mike.b@cellubyte.com

Cell phones provide so much convenience today plus they also provide a real sense of security too.

However there are so many options, so many different cell phones that it can become quite confusing.

That’s one of the reasons why so many people choose Cell-U-Byte in Mason City for their cellular service and cell phones. Whether it’s a personal cell phone, a family plan or cellular service for a business they can count on Cell-U-Byte. The local family owned business is an authorized US Cellular retail store and carries a complete selection of phones.

Owners, Mike and Sonni Bergan started their family owned business back in 1996. Their first location was on South Monroe. A few years ago they moved into their new location just to the east of Willowbrook Mall. Local people often refer to their store as the old Earl May garden store when they tell people how to get there.

Cell-U-Byte is truly an all in the family business. Daughter Misti Keeney is the manager and accountant. Sarah Reckner, another daughter, is a sales associate. Granddaughter Alexis King is a customer sales associate. Niece Keri Webster is also a customer sales associate. Son in law, Phil Biermann is the phone technician.

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Service is a major emphasis at Cell-U-Byte. They take pride in their slogan” The Home of Exceptional Cell-U-Byte Service”.

At Cell-U-Byte they specialize in helping customers with their cellular needs. It doesn’t matter whether it’s in sitting down to determine the best cell phone plan or in helping someone understands how all the features on their cell phone works. This is definitely not a big box store. They even do their own phone repairs and you can purchase repaired used phones that will work with other cellular carriers systems.

Many people will buy a replacement phone at Cell-U-Byte if they have lost a phone or they can bring one in that has been damaged and get it fixed locally. That saves time and money.

As a local family owned business Mike and Sonni and all the families have been strong supporters of community fund raisers, local school fund raisers and local events. Mason City and North Iowa have a special meaning to each of them and they try to assist in as many worthwhile projects as possible.

If you stop in or call Cell-U-Byte you will find that this is a business that has good people, wonderful products and exceptional service.

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Travel anywhere in the country and be connected.

This US Cellular service will come with an open platform and numerous download Applications will now be easier than ever.

3G ROAMING WILL BE EXPANDING This US Cellular service will give you 3G data roaming to include much of the United State

LOCAL & FAMILY OWNED • LOCAL & FAMILY OWNED • LOCAL & FAMILY OWNED • LOCAL &

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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 LOTTERIES become more successful and prosperous.

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26 • IN BUSINESS

JUNE 2010 • GLOBE GAZETTE

TOOLBOX: FINANCE

New fund may aid small businesses

By BRUCE FREEMAN Scripps Howard News Service ear Professor Bruce: President Barack Obama has proposed transferring $30 billion of TARP money into a new program to support small-business lending.

This fund will be targeted to community and smaller banks that provide the bulk of smallbusiness lending and will offer incentives for banks to support small-business lending. As a small business, will this really increase the availability of desperately needed lending activity?

D

Answer: The Small Business Lending Fund is a much-needed step by the government to kick-start lending to small businesses that have suffered the brunt of the slowdown in lending activity.

Bill Bartmann, small-business expert and CEO of Bartmann Enterprises, notes: “In the big picture, yes, it will make a difference. Thirty billion dollars, even by Washington terms, is still a lot of money. Since no rules have been established for the Small Business Lending Fund, we have no idea of the require-

ments that will be placed on banks that wish to participate in the program or how the individual banks will structure their programs.”

Bruce Freeman Keep in mind The Business that the primary Professor reason banks have slowed down small-business lending (and lending of all types) is fear.

The problem is not a shortage of money to lend, but the fear in the heart of the banker

that he will need money for other problems.

There is a high probability that the banker will want to hold onto cash in case his/her existing portfolio of loans continues to sour.

Most small and community banks are the backbone for lending to smaller commercial real-estate projects — apartments, smaller office projects, smaller retail projects — and the commercial real-estate market is suffering in almost every part of the country.

If banks are allowed to take money from the Small Busi-

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ness Lending Fund without any requirement that they deploy the funds — the same way as the large banks were allowed to take TARP with no requirement that it be used for lending — then there will likely not be a great deal of new lending activity.

The temptation for many smaller banks to just hold onto the cash will be hard to resist.

If the rules for acceptance of the funds require that the funds be used for small-business lending then the chances will look much better for get-

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GLOBE GAZETTE • JUNE 2010

IN BUSINESS • 27

BUSINESS PROFESSOR/From Page 26 ting money into small businesses on Main Street.

try to find the money, you have to do some homework.

According to Todd Foulks, co-founder of the New Angel investors York/Tri-State Chapter of D e a r P r o f e s s o r B r u c e : I’m The Keiretsu Forum, “Before an entrepreneur and have setting out in search of angel been really cash-strapped investors you first need to lately. I hear that there are understand the type of busisigns of recovery in the ness you have and if it’s economy and that contact- angel-appropriate.” ing angel investors might be Lifestyle businesses reprethe route for me to take. sent 90 percent of all busiHow do I go about connesses. These are our restautacting angel investors? How rants, dry cleaners, hair do I know if my business salons, fruit markets, dress would even be something shops, day-care centers, etc. they’d be interested in?

Although we need these Answer: It is more difficult businesses, and many are than ever for entrepreneurs highly profitable, angels are to find funding these days, not typically looking to but there is money out there invest the family fortune for the right businesses. here.

Before you even begin to On the other hand, an

About the Small Business Professor: Bruce Freeman is president of ProLine Communications, a marketing and public relations firm in Livingston, N.J., and author of “Birthing the Elephant” (Ten Speed Press). E-mail questions to Bruce@SmallBusinessProf.com. innovative company in a high-growth sector will always capture the attention of an angel.

Next, examine your company and its investment merits.

What are your personal accomplishments and what are those of your management team?

What is unique about your product or service?

Do you have patents pending?

What is the unmet need

that you are satisfying?

What is your current valuation?

Do you have proven success in other ventures or business?

How much seed money have you raised from friends and family?

How much money do you think you will need, and what would be the use of funds?

Now, develop an elevator pitch. That’s a very brief (i.e., the time it takes to go

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from the lobby to the 10th floor) synopsis of your business. You will also need a formal business plan that outlines operations and financials.

Finally, research angel investors. The wider your personal network, the easier this will be.

Talk to accountants, lawyers and consultants. Use college professors and alumni associations as angel investors are lurking about.

Search social networks like Linkedin and Twitter.

After you have gained some investment traction or have some revenue, consider applying to an angel group.

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Let’s Get Acquainted with the Northwestern Steakhouse Location: 304 16th Street NW Mason City Owners: Bill & Ann Papouchis Did You know? The Northwestern Steakhouse was established in 1920 but moved to its current location in 1954 Website: NorthwesternSteakhouse.com Mention the word steak and people immediately say Northwestern Steakhouse. That’s where people go when they need a “Steak Fix” . And it’s been that way since 1920. Bill Papouchis, general manager and chief chef; Ann, bookkeeper, hostess, wait staff manager; Cindy, waitress and Alexis the dIshwasher and all 20 employees strive to be the best there is anywhere. Their efforts have hardly gone unnoticed. For the last eight years the Northwestern Steakhouse has been honored as the Best of the Best and Readers Choice pick for the best steak in north Iowa. The Iowa liquor Quarterly magazine also recognized their reputation in north Iowa and featured the Northwestern Steakhouse in a recent issue.

Steak lovers have long known that their steaks are worth the wait. It’s somewhat of a tradition to stand in line and enjoy conversation with friends and strangers as you are tantalized by the wonderful aroma of their delicious steaks. It’s not just steaks though, if you like pasta then you have to have their special Greek pasta.

Ann commented “We are constantly amazed when fifth generation family members come in and start talking about their

memories of the Northwestern Steakhouse.”

Former Mason City residents and area natives return home and make it a special point of coming to the Northwestern Steakhouse. The atmosphere, the friendly staff and the food bring back so many wonderful memories. Sometimes the conversation will drift back to the days when Tony and Pete first began on Lehigh Row and then moved over to North Federal. Occasional someone will laugh and talk about how Tony and Pete bootlegged whiskey from the basement back during Prohibition. There are so many memories that are part of a wonderful tradition.

Since they are a family owned business and have lived in Mason City for years, they are very community minded. They believe in giving back to Mason City and have helped Vision Iowa,

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Relay for Life and countless family benefits as well as numerous church functions. Ann said “Unlike chain restaurants, this is our home. It’s more than a business with us. It’s our life and we appreciate our wonderful friends and customers and we do try hard to help out in any way we can.”

The Northwestern Steakhouse has gone through a lot of changes through the years just as Mason City has, but there are many things that will always stay the same; that wonderful steak, laughing waitresses, a warm and inviting atmosphere and a meal that is prepared with more than 80 years of experience. Just the way that Tony would have wanted it.

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30 • IN BUSINESS

JUNE 2010 • GLOBE GAZETTE

GILLMAN/From Page 16 iarize themselves with our area.

Unless they are located in the Midwest, these consultants are generally not aware of our location and assets. They know that generally we feature renewable energy and agriculture business, but that’s about the extent of their knowledge. They are more familiar with metropolitan areas.

In addition to the information we shared with them, we were able to get an insight about what MICROPOLITAN AREAS these consultants — and the don’t market themselves to site businesses they represent — are selection consultants for many looking for: reasons, such as cost, not • Business-ready industrial enough time and/or staff or lack parks with full infrastructure. of appropriate marketing mateThere is so much competition rials. They may also feel they will between sites that are ready to get little attention or it’s simply BUT THESE MEETINGS don’t build that you cannot afford to out of their comfort zone. be only partially prepared. just happen. We did our homeOur attitude is different.

• High-quality existing buildwork, marketing to them ahead Recently we made a visit to three of time and helping them famil- ings. live. For instance, where do the people who work in Mason City/Clear Lake live?

It gives us information about the complete labor pool available for a certain market and how far people are willing to commute, as well as underemployment, availability and willingness of current and prospective workers to change employment, current and desired occupations, wages and hours worked.

national site selection consultants and had a great experience.

All three were professionals with 25 or more years in the business, and all three met with us personally instead of pushing us off to less-experienced colleagues.

These were professional presentations, not just discussions over a cup of coffee. We found that they were happy to learn more about our area, as long as we have a positive story to tell and differentiating assets to market.

Obviously the personal touch is important, and we captured that as well, proving that business is still best done face-toface.

Summer Suggestions It seems as we get more mature the seasons come and go faster.

Already Summer is upon us again.

As most of you know the Governor signed a bill to allow high point beer to be distributed by wine and beer distributors instead of the State of Iowa. This will allow our stores to offer you a huge selection of different beers.

Last summer we talked about some white wines including Torrontes and Albarino. More wineries are releasing them and they are great choices.

Sauvignon Blanc have been increasingly popular with wine enthusiasts and in price too. These are still my favorite summer wines paired with food.

For more ideas and help in choosing summer wines and pairing with summer foods or just to check out all the new beer selections be sure to stop into one of our shops and talk to one of us or one of our staff. As always Thanks for shopping HyVee. MS-20139487

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Ryan Evers Hy-Vee East Wine Dept.

Bruce Long, Mgr. Hy-Vee Wine & Spirits

• New incentives.

• New deals happening in the region. This shows which areas are progressive, something of interest to companies.

• Specific training programs for industry and flexible grants to accommodate training.

• Workforce laborshed information — the more details, the better.

For More: • For more on the North Iowa Corridor EDC, visit www.northiowacorridor.com.

• E-mail Gregg Gillman at ggillman@northiowacorridor. com.

THROUGH OUR efforts we connected with them personally as well as educating them about the detailed assets of our area. By doing this we increased our opportunities from these three consultants to see future prospects that are considering the north central U.S. Bring on the next round of site selection consultants who are about to be sold on Cerro Gordo County and North Iowa.

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GLOBE GAZETTE • JUNE 2010

IN BUSINESS • 31

ADVICE: FINANCE

Consider tax ramifications of tenant inducements

By RANDY DAVIS RSM McGladrey enant inducements play an increasingly vital role in today’s competitive real estate market.

In the scramble to maintain occupancy rates, property managers offer prospective and current tenants a wide variety of perks. Rent holidays, stepped rent, lump-sum payments and leasehold improvements top the list of popular tenant incentives at the higher end of the cost scale.

When structured properly, these inducement packages do more than just attract and retain tenants; they yield the best possible tax results for both the lessor and the tenant.

To develop the most advantageous inducement packages, property managers must understand the tax angles of various tenant incentives.

Those who ignore these tax angles risk incurring hidden

T

annually during each year of the lease.

Randy Davis is a director When the lessor makes a Rent holidays and the locacash payment directly to the A “rent holiday” or free rent tion leader of tenant, the tenant will have period is one of the most popthe Mason City taxable income for the tax ular tenant inducements. office of RSM period during which the payWhile the tenant experiences a McGladrey. He ment is received (except when cash flow boost, the lessor’s has more than the payment is characterized as cash flow is negatively affect28 years of a reimbursement for leasehold ed. experience in improvements owned by the The lessor does, however, providing landlord). receive a tax benefit for grantiaccounting, assurance, tax and If the tenant then uses the ng the rent holiday; namely, a consulting services to clients. money to pay moving or other reduction in income during the For more information, contact expenses, the tenant will also time rent is not received him at randy.davis@rsmi.com. have an offsetting deduction. because lessor recognizes no Lump-sum payments If the allowance the tenant rental income during the rent Lump-sum payments made receives exceeds the amount are characterized by deeply holiday. discounted rates, which gener- to the tenant (to the extent not actually spent, the excess In terms of timing, the tax attributable to leasehold amount would be income. ally continue during the first benefit associated with a rent improvements) must be capiA lump-sum payment to buy year of the lease. holiday is more beneficial than talized by the lessor and amorout an existing lease is not After the initial low-rate those associated with other tized over the term of the lease. always a practical tenant period, the lease agreement inducements as the reduction inducement. Sometimes it For example, if a lessor in income is reflected immedi- calls for a rent increase for the makes more sense for the new makes a lump-sum cash payremaining term.

Under a ately during the period in lessor to sublease the tenant’s ment of $50,000 to a tenant for stepped-rent agreement, a which it occurs. former space. signing a new 10-year lease, reduced- rent period is Stepped rents Subletting, however, can allowed. By receiving reduced the lessor would capitalize the Stepped-rent agreements rental payments, the lessor payment and deduct $5,000 Continued on next page costs as well as unpleasant tax results.

About the author:

avoids the cash flow strain that accompanies rent holidays.

The lessor also receives the tax benefit of a reduction of income during the initial phase of a stepped rent agreement, except possibly where Internal Revenue Code Section 467 applies.

Stepped-rent agreements offer the same timing benefit as rent holidays — the tax benefit is received during rather than after the inducement period.

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32 • IN BUSINESS

JUNE 2010 • GLOBE GAZETTE

ADVICE: HR

By JIM CRONIN For In Business eriodic news stories in The Wall Street Journal and USA Today establish that one of the most common workplace frustrations involves poorly conducted meetings.

• Do your company and departmental meetings begin and finish on time?

Doing so sends the message that every attendee’s time is important.

• Are your meeting agendas prepared and delivered to all attendees ahead of time? Doing so gives every attendee ample notice of what issues will be discussed and time to organize their thoughts. Copies of any related documents should be attached to the agenda.

To be avoided is the “dropping off” of documents in front of meeting attendees while they’re trying to listen to/participate in the discussion of a topic already under discussion.

• Are your meeting’s written materials reviewed carefully before being distributed? Doing so reinforces the message that you are considerate of other

It’s a P great time for an audit A communications, human resources audit, that is

About the author: Jim Cronin has been an employee relations (management) counsel with the MinneapolisSt. Paul law firm of Felhabor, Larson, Fenlon & Vogt for more than 30 years.

This column is presented as general information, not as legal advice. Specific situations must be assessed individually by counsel of your choice.

Cronin is the author of “No Fluff, No Puff: Just Management/Communication Principles

peoples’ schedules.

I am a volunteer tutor and teaching assistant in an English as a Second Language (ESL) class and I recently attended a related college-level workshop involving the use of a large number of handouts. Even though they had long lead times, a few of the instructors’ handouts were out of chronological order and certain text and page enumerations were inaccurate. The result was that the instructors spent valuable meeting time apologizing for the snafus and valuable discussion time was lost while the other

That Work.” Readers may preview chapters of this resource manual at www.nofluffnopuff.com. It is also available for purchase at www.Barnes&Noble.com.

Cronin would like to respond to readers’ needs by addressing workplace-related questions of general interest in future issues.

Send your questions or comments to him at jjcanddrb@earthlink.com.

attendees and I took apart and then reconstructed the handouts.

Such non-productive and time-wasting developments are easily prevented by requiring the leaders of a meeting to double-check their materials well in advance of the meeting.

• Side discussions during meetings should not be tolerated. Every attendee should be expected to be courteous and to give the meeting leader his or her full attention. I have been at meetings where rude, self-important types who couldn’t Continued on next page

FINANCE/From Page 31 create tax problems for some tenants if it results in undesirable passive income or a loss.

In such cases, one option would be to quantify the value of the lease buyout and convert that value into another type of inducement, such as a rent holiday.

Lump-sum payments for furniture and equipment purchased by tenants must be depreciated over the life of the furniture or equipment.

In many ways, the tax treatment of lump-sum payments for furniture and equipment would be the same as for leasehold improvements. For tax purposes, a rent holiday is generally more advantageous for the tenant and the lessor

than a lump-sum payment.

Leasehold Improvement allowances

Rent-leveling provisions

In the past, postponement of rental income and expense through stepped rent and rent Lessors frequently offer holidays offered an ideal allowances for leasehold opportunity for deferring improvements as another form taxes. A cash-basis lessor of tenant inducement. could defer recognizing Tax treatment of leasehold income until rent was actually improvements hinges on which received while an accrualparty retains ownership of the basis tenant could take a curleasehold improvement. rent tax deduction for accrued In most cases, the lessor rent, even though that rent receives tax benefits of the cost would not be paid until a later of leasehold improvements year. more quickly by making a To do away with the perlump-sum payment to the ten- ceived abuse of this provision, ant for the improvement costs the Internal Revenue Code rather than paying for and Section 467 attempts to smooth out the recognition of retaining ownership of the rental income that otherwise improvements and receiving tax benefits through deprecia- would have been deferred through rent holidays or tion.

stepped rent. Through its “rent-leveling” provisions, Section 467 requires rent charged in certain deferred arrangements to be leveled over the length of the agreement.

If a lease agreement does come under the rent leveling provisions of Section 467, both the lessor and the tenant must allocate an equal amount of rent to each period under the lease.

The rent amount is determined by taking the present value of all payments that are to be made under the lease terms.

This rent accrual is treated the same as any other debt owed by an accrual-basis taxpayer.

Thus, both lessors and tenants will be subject to the rules governing bad debt deductions, discharge of indebtedness and the tax benefit rule.

Interest must be imputed on any of the leveled rent amount that is not paid currently, and the total amount of rent and interest recognized for the entire lease term should equal the total amount of payments under the lease.

When possible, lessors should structure lease agreements to address the provisions of Section 467. All proposed lease agreements should be reviewed with tax advantages and disadvantages in mind before granting any significant rent holidays or stepped-rent concessions.

GLOBE GAZETTE • JUNE 2010

IN BUSINESS • 33

ADVICE: HR How to keep your best employees on board Communication, new projects, recognition among important factors

By TALI ARBEL AP Business Writer oney is nice. But attention, recognition and the chance to learn new skills are the key to keeping top performers on board as the job market improves, experts say.

More people are quitting their jobs voluntarily than getting laid off now. Human resources experts say employers can take several steps to keep employees from leaving, even when a competitor offers a higher salary.

M

Americans remain nervous about job stability, while the still-recovering economy means companies are largely not doling out lavish salary increases, said Harry Osle, a principal in consultancy Hackett Group Inc.’s human resources practice.

So what’ll do the trick? Go personal and communicate.

Employees “will be more hesitant to make a jump if they feel like they’re part of a family, an organization that’s investing in them,” Osle said.

• Make sure employees know what company goals are during the recovery from the recession, said Sayed Sadjady, who works on talent management for PricewaterhouseCoopers.

New projects, a quest to regain lost market share — these “bring excitement.”

• Mentoring and coaching relationships are also crucial, especially if mentors traveled a similar career path, Sadjady said. Isolated employees can feel they have no prospects with the company.

• Employees need to learn new skills. Even if a promotion is not available, challenge highpotential workers with projects that will enable them to learn new skills and take on a new role, said Tim Schoonover, the chairman of career consulting firm OI Partners. Otherwise, top performers will leave, he said.

• Recognition. “People want to be appreciated. Give them attention,” Schoonover said.

• Flexible work schedules are also important, said Sadjady.

HR/From Page 32 refrain from talking to a person sitting next to them had to be escorted out of the meeting.

• In this era of multi-tasking, some attendees bring their laptops along to a meeting. It is good for meeting coordinators to insist that attendees fold down their screens once the meeting starts. Too often, laptop users become engrossed in some topic on their screens and then later claim they missed an important meeting point because they were “busy” on their laptops during the meeting.

Job-related news One of the realities of this recession era is that employees everywhere treasure their jobs more than ever. You can help ensure maintenance and improvement of your company’s employee morale by being sure to inform employees when your organization receives new-customer orders, letters of appreciation from existing customers for exemplary job quality and delivery service, and details of recent decisions to expand in new markets (which have the prospects of giving your operation better opportunities for profitability and additional marketplace success).

Employers should not hesitate to keep employees informed of negative marketplace developments as well. As circumstances permit, employees

should be told the reasons why a particular customer chose another vendor.

Such an approach enables everyone in your operation to avoid making mistakes similar to those which led to the recent loss of a customer.

Sometimes the loss of your customer is attributable to your customer’s loss of one of its major customers, and that should be noted.

Finally, any planned initiatives by your marketing and sales departments to regain the lost customer’s confidence should be shared with employees.

We know that sometimes lost customers can be recaptured if certain operational or delivery roadblocks are eliminated.

External communications It is important to let other employers in the community know when you’re doing well. It’s not a matter of bragging about yourself. It is a matter of letting other members of the local business community know of your major successes on a timely basis.

The truth is that most individuals and companies like doing business and placing orders with organizations that are known for high product quality and timely deliveries.

This approach also extends to periodically reminding others of the entire range of your products and services. I

have been at a number of formal meetings and informal lunches where a manager of one company will say, “I didn’t know you (a second manager’s company) did that.”

You may also earn positive mileage when you notify your employees and other members of your business community when you win back a lost customer. By issuing a “state of the business” bulletin that details the rehab steps your business took to recapture a previously lost customer, you serve your business well.

First, you can send the message to your employees that by improving operational procedures (with their cooperation and support) it is sometimes possible to earn a second chance with a former customer.

And second, by publicizing your company’s rebound in customer service with other members of your local business community, you send the message that your organization is not afraid to identify mistakes and is open to suggestions and new ideas to improve your operations.

The fact is individuals (e.g., your employees) and your management counterparts in other local businesses admire those business people who are able to identify what they could do better and succeed in making the necessary changes. Additionally, such an approach can help you earn the reputation of

operating a very positive workplace.

Monitoring HR developments No one likes negative surprises. That is why it is so important to have regular weekly or bi-weekly meetings with your human resource representatives to determine: • What are the most important pending human resources issues and what, if any, are anticipated in the very near future?

• What specific steps have been taken or are being planned to address such issues?

• Are all employees, including management representatives, committed to devoting whatever time and resources are necessary to resolve such issues on a timely basis?

This is an important question because too often some managers feel that human resources issues can be placed on a back burner. And too often issues which could have been addressed effectively and economically are ignored until they turn into very expensive workplace nightmares.

Another important question is whether your human resources staff is large enough to address whatever comes through the door. If not, you may consider using an outside human resources agency to help get through a current overload.

34 • IN BUSINESS

JUNE 2010 • GLOBE GAZETTE

Q&A MARK HEWITT: Bank president, Federal Reserve Bank official

By JOHN SKIPPER john.skipper@globegazette.com

ark Hewitt, president and chief executive officer of Clear Lake Bank & Trust, comes from a banking family.

Marc Arneson was the longtime owner and president of the bank. He turned over the reins to his son-inlaw, Ray Hewitt, in 1974. Mark Hewitt, Ray’s son, became president and chief executive officer in 1998.

Mark Hewitt also serves with the Federal Reserve Bank, which helps set the monetary compass for the country.

He discusses his background, the role of the Federal Reserve Bank and the state of the economy in this interview for In Business.

M

Q. You grew up in a banking fami ly. Did you always know you were going to be a banker?

A. Not really. I did grow up in a banking family but I was encouraged to do whatever I wanted to do. I went to Drake University and then got my MBA at Northwestern.

When I got out of Northwestern, that was the big decision time for me. I could have gone to work for a corporation but instead I took a job with Northern Trust in Chicago. I worked in banking for 15 years before From left: Mark Hewitt, Ray Hewitt and Mark Arneson. Arneson was longtime president coming back to the bank in Clear of Clear Lake Bank & Trust before turning over the reins to his son-in-law, Ray Hewitt, Lake. in 1974. Mark, Ray’s son, became president and CEO in 1998.

Q. The so-called big banks have A. Actually, it’s been just the same is probably true with other taken quite a public relations hit in opposite. It’s been a wonderful thing small banks. the past year with the federal Q. Tell me what the Federal for us because people are looking to bailouts and foreclosures and Reserve Bank does and why there’s a go to people they can trust. So even things like that. Has all of that had though the economy has been down, need for it. any bad effects on banks like A. The Federal Reserve Bank is the our deposits have been way up the yours? nation’s central bank. It is a governlast couple of years, and I think the

ment agency but it is apolitical.

There is no Republican or Democratic thing to it.

The Federal Reserve Bank has two main functions — it works to control inflation and to promote growth.

One of the ways it does this is by controlling long-term interest rates.

I’m part of the Chicago Federal Reserve Bank with a focus on the Midwest. I see my role as promoting small, rural communities and Iowa banks.

There are 12 district Federal Reserve Banks working in concert with the Federal Reserve Board. The idea is to have geographic diversity in order to have a broad perspective in developing policies.

Q. What do you see ahead for the national economy?

A. I think we’re having a jobless recovery, which means the economy is coming back but people are not hiring back. Companies have scaled back and have learned to do it with less people.

The unemployment factor is going to drive a lot of things in the economy and unfortunately, it’s not a really rosy picture.

Q. How does the agriculture econ omy track with the national econo my?

A. The agriculture economy is quite separate and distinct. For example, 2007 and 2008 were boom years for the ag economy and 2009 was good but not great. All of this was going on while the national economy was not so good.

In other words, things are not as bad in Clear Lake as they are in Detroit.

GLOBE GAZETTE • JUNE 2010

IN BUSINESS • 35

TOOLBOX: MANAGEMENT

Everything is energy in the workplace

By SHARI BENCH For In Business verything is energy. Energy is powerful enough to create your success or promote your demise. Everything you involve yourself in is a result of the energy you contribute. How you contribute to your professional environment is as important as what you contribute.

You may have the experience, knowledge, skill and a long history of success; however, if you approach a new project, a meeting, a new job, an employee or a customer with infected/negative energy, you should also be prepared to take responsibility for the consequences.

Some experts will claim energy is neither positive nor negative, rather all energy was neutral and only has the ability to take on the form in which you give it.

This couldn’t be further from the truth. The reality is you do have the power to choose how you exert your own energy, but you do not always have the ability to prevent encountering others’ negative energy.

Sometimes it is easy to see how others affect you, but many times you may not even realize the effect others are having on you. Creating an awareness of how situations or people make you feel can help correct or deflect this negative energy.

As a leader, your energy can determine the success of a meeting, a workday or even your overall company. If you have an employee or coworker who is struggling, have you considered how much responsibility you have in their performance?

If you have chosen the privilege and responsibility to supervise others, how are you dealing with your negative employees? Negativity is

E

contagious. It may seem as if dealing with negative people is easier to simply ignore them.

However, it’s important to remember that many people are not aware of how negative energy is affecting them. Therefore, your negative employees may be consciously or subconsciously Do not expanding their wait for othnegativity and ers to create influencing the behavior of the positive, others. rewarding, Wake up, leaders. Look in motivating the mirror. environment What are you that you have contributing to had the power your personal and professionto create all al life? How do you protect along.” those you are — Shari Bench responsible for, as well as your overall company, to ensure they have the positive, working environment they deserve?

“

2. OBSERVE ENERGY Awareness is a great advocate for improvement. As leader, you should care about creating a positive environment. As an employee concerned with your current work environment, consider you are as responsible for creating a positive environment as your boss and your co-workers.

Therefore, by simply taking time over the next week to observe others, you may create a new awareness of the type of energy that is most common in your department or company.

3. DEALING WITH NEGATIVITY How a leader deals with energy can directly determine how well an employee performs. The majority of employees spend most of their waking day at work.

Most employees want to feel good about their workplace. Identifying a negative person does not have to result in turnover. The reality is if you begin with yourself, many others will naturally follow your lead and contribute toward a positive environment.

However, if you identify a negative employee who is not supporting the environment you are expecting to create, it is critical to deal with this behavior.

If after giving the employee an opportunity to improve they do not respond favorably, as a leader you cannot ignore this behavior. Allowing this employee to continue contributing negative energy will quickly infect the energy of other employees and yourself.

About the Author: Shari Bench is a certified trainer and author of the book, “Five Essentials of Transformation; Change your life one thought at a time.” Her programs on leadership, career enhancement, relationships, and health and wealth break down the barriers to create results. For more information, visit www.effectivetransformation.com. and mentor the employees who are not exceeding expectations. Positive reinforcement can quickly shift energy and build momentum toward your desired results.

5. ENERGIZE YOUR TEAM A typical workday can drain the energy out of your employees. Look for ways to create energy boosts throughout the day, in meetings and throughout projects. This can be as simple as frequent short breaks, laughter, or creating a very open environment where fresh ideas and creativity is rewarded.

The relationships you align in life reflect who you are. You are defined 1. BEGIN WITH YOURSELF. by your relationships in your personThere are very common questions al life and most certainly within your to help evaluate the energy you may professional career. If you find the be contributing. Are you generally a majority of your employees are tired positive or negative person? Do you or your team is having difficulty with have a high or low energy level? How exceeding expectations and creating do others respond to you; relaxed or momentum, seriously consider evaltense? uating the energy flowing within Do you find yourself being judgyour company. mental of others or open and acceptDo not wait for others to create the ing of diversity and new ideas? Do positive, rewarding, motivating 4. SETTING EXPECTATIONS you harbor anger rather than letting environment that you have had the Evaluate your management style these feeling go? Do you feel mostly and look for ways to create a positive, power to create all along. A positive happy or sad and frustrated? Are you supportive and rewarding process. environment is a healthy environa nice person?

Reward the positive improvements ment.

36 • IN BUSINESS

JUNE 2010 • GLOBE GAZETTE

HEALTH MATTERS

New health-care bill: More questions than answers Short-term impact may be lower in Iowa than other states, official says

Unless you’re in the indoor tanning business. Those offering indoor ultraviolet tanning will see a 10 perBy TIM ACKARMAN cent tax added to For In Business the cost of their ongress passed sweeping sessions starting health care reform legisJuly 1. It is lation earlier this year, apparently the Harty and many small-business only service sinowners remain uncertain gled out for a new tax. regarding its potential impact.

Salon 220 in Mason City “At this point in time there spent around $15,000 for its are more questions than Sundash 252 Radius stand-up answers,” said Ann Harty, tanning booth. The new tax employee benefits specialist will almost certainly impact with 1st Insurance in Mason return on that expenditure, said Colleen Devine, director City.

C

Experts: ‘Don’t do anything rash’ ith the first round of health care reform provisions set to take effect July 1, many business owners are concerned at the relative scarcity of information.

“I’ve had some questions from some of my clients: ‘What do I need to be doing?’ ” said Ann Harty, employee benefits specialist with 1st Insurance in Mason City.

With administrative rules for key facets of the legislation still being developed, Moran recommends watchful waiting at this time.

“I suggest that (business owners) read and absorb as much as they can,” Harty said. “Get some good advice.”

Moran encourages business owners to work with an established, reputable company for their insurance needs.

“Find someone you’re comfortable with who has worked in the business for a significant time and knows what to look for,” Moran said.

Mason City Chamber of Commerce Executive

W

Continued on Page 38

MS-20138548

of marketing for Growth Properties, which owns the salon.

“Every new tax impacts small business and requires additional juggling to compensate,” Devine said. “It will probably cost more to pass on than absorb, so it just means we make less. It will take longer to recoup that investment.”

Although exposure to natural or artificially created UV rays increases the risk of skin cancer, tanning machines may be beneficial for treating certain skin conditions and mitigating depression from seasonal affective disorder.

“It (tanning) does seem a strange thing to single out, especially when it does have legitimate therapeutic uses,” Devine said.

While ultraviolet tanning was the only product or service “singled out” for a new tax, the legislation incorporates changes in insurance regulations, tax laws, health education and government oversight with the potential to impact every U.S. business. Those changes will be phased in gradually over the next eight years, with the most significant aspects scheduled to begin by 2014.

Key provisions taking effect this year include restricting insurance exclusions for preexisting conditions, eliminating annual and lifetime benefit limits, mandating the availability of coverage for children up to age 26 on their parents’ insurance and placing restrictions on rescissions, a process some claim is intended to eliminate coverage after a person gets sick to avoid costs associated with that illness.

Officials with 1st Insurance in Mason City believe the short-term impact of these changes may be lower in Iowa Continued on next page

GLOBE GAZETTE • JUNE 2010

IN BUSINESS • 37

Ciar Carnall, coordinator for Salon 220 in Mason City, sets up the salon's tanning booth. A 10 percent tax on indoor ultraviolet tanning effective July 1 is among provisions in the health care reform legislation passed earlier this year.

HEALTH-CARE BILL/ From Page 36

ALSO THIS YEAR, certain small businesses with 25 or fewer fulltime employees will be eligible for tax credits to help offset the cost of offering insurance.

Moran noted most small businesses have likely been expensing those costs on a pre-tax basis so he is uncertain how they would benefit from this change.

“I don’t fully understand that,” Moran said, “and I’ve been to a couple of meetings on the subject.”

Other aspects of the plan remain poorly understood as well.

Harty noted the rules by which the legislation will be administered are still being written by the U.S. Department of Health and Human Services. Until that process is complete, Harty said, “there are many things in this 2,700-page bill that are just words.”

BOTH HARTY AND MORAN believe if all provisions of the legislation are eventually enacted (it is currently being challenged in 30-plus states, Moran noted) the long-term result will be higher insurance costs.

“It’s going to increase premiums,” Moran said.

“How much, I don’t know.”

Moran noted insurance exchanges intended to provide lower-cost options for individual health coverage, a key provision of the legislation, have been tried in Iowa before without sucContinued on next page

TIM ACKARMAN/For In Business

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“We might not get the full dose of it here. Iowa’s a pretty good insurance state,” said company President John Moran. “I think we’re Moran: “It’s ahead of going to things here increase in Iowa.”

He noted premiums.

How much I coverage for dependon’t dents was know.” already mandated in the state for children up to age 25 unless they were married. As to people losing health coverage when they became sick, “I’ve been in this business for 25 years and I’ve never seen that happen,” Moran said. “Maybe it was happening in another part of the country, but it wasn’t happening here.”

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38 • IN BUSINESS

JUNE 2010 • GLOBE GAZETTE

ADVICE: TECHNOLOGY

Computer’s shot, so what do you do with it?

Deleting data doesn’t mean it’s gone for good

By MICHAEL MUNSHOWER Globe Gazette Systems Technician

hen a computer is too old and outdated and no longer practical to repair or upgrade, what do you do with it? How do you clear any private data? How do you dispose of it in an environmentally friendly manner?

Deleting a file or folder doesn’t mean that the data is gone for good. Neither does the common practice of reformatting the hard drive.

W

Both of these methods can leave behind data that is easily recoverable by someone using data recovery utilities.

Prior to disposing of a computer, a sure method of destroying data is to literally destroy the hard drive. Remove the hard drive from the Munshower computer case. Open up the hard drive enclosure and remove the platters. Severely scratch the platters.

One caution here though: Some hard drive platters are made of Continued on next page

HEALTH CARE BILL/ From Page 37 cess.

He questions whether the exchanges will be able to offer a better value to customers.

“Whether they’re in the exchange or out of the exchange, I just don’t see how the fundamentals (of the insurance business) will change.”

Moran and Harty expressed disappointment regarding what they perceive as a lack of cost-containing measures within the legislation.

“The one thing I’m not hearing (addressed) is that we as a society need

to take better care of ourselves,” Harty said.

Despite increasing costs and uncertainty regarding the current legislation, Moran expects top employers

will continue to provide health benefits.

“Historically it was offered to attract and retain good employees,” Moran said. “That part may not change.”

EXPERTS/From Page 36 Director Robin Anderson said she is gathering information on the legislation and hopes to serve as a resource for members as more facts are available.

“It will be a priority for us,” she said. “We’ll use all the contacts we have to provide good, solid information.”

For preliminary research, Anderson sugAnderson gests the website www.irs.gov. She noted an IRS planning workshop for small business will be held at the federal building in Des Moines on June 26.

Anderson said U.S. Sen. Tom Harkin, D-Iowa, is chairman of the committee responsible for the legislation and suggests his staff as another possible resource.

“That’s an advantage (for Iowans) right now that his office is running this thing.” Anderson said.

The Chamber will likely be hosting a seminar on the topic.

The John Pappajohn Entrepreneurial Center (JPEC) also intends to provide informational seminars and other resources for small business, said Vice President Jamie Zanios.

Staff members are currently in the early stages of gathering information and planning how to present it, he said.

As with other organizations, Zanios noted, JPEC can provide only limited assistance until administrative rules for the legislation have been finalized.

“Nevertheless, the sooner we can offer this information to the businesses in our area the better,” Zanios said.

“This is of extreme Zanios interest.”

Until more information becomes available, most experts encourage business owners to take a measured approach.

“We know this is a big change but we don’t know all of the ramifications,” Anderson said. “Right now the best advice for people is, ‘Don’t make dramatic change.’ ” “Hang tight and make sure you’re working with someone who’s giving good advice,” Harty suggested. “At this point there’s not much you can do to prepare.”

Moran said any decision to add, drop or change insurance coverage based on the current legislation would be premature.

“To do anything rash at this time,” she said, “would not be to anyone’s benefit.”

— By Tim Ackarman

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GLOBE GAZETTE • JUNE 2010

IN BUSINESS • 39

TECH/From Page 38

HINTON/From Page 13

glass. I found this out the hard way trying to bend one once. I had glass glitter all over the place.

If you don’t want to open the computer case or desire to leave the computer intact, there is software that does a thorough job of erasing a hard drive by writing “garbage” data to the drive in several passes. I personally like DBAN (Darik’s Boot and Nuke). It works very well and the price fits everyone’s budget — free. It can be downloaded at www.dban.org.

Most area landfills have computer collection facilities. Depending on the landfill that services your county, certain fees may or may not apply.

A computer that is disposed of at a landfill is typically picked up by an electronics recycler whose business is to disassemble the computer into its basic circuit components and recycle those components.

If your old computer is still functional and you don’t consider it scrap, donate it to someone or some organization in need of a computer.

Erase the hard drive with DBAN, don’t destroy it.

Send with the computer any operating system, recovery or driver discs as these will be of no use to you on a new system.

tomorrow.”

“But today we’re doing good. We’ve got an excellent line of products. You name it, our new planters are super, our tillage tools work great, our tractors can’t be beat and our combines are phenomenal,” he said. “We introduced the rotary combine way back in 1977. Sure, I’m prejudiced but a lot of farmers are telling much the same story about the Big Red lineup these days.”

And GPS technology is now pretty much factory-equipped on Case/IH tractors, combines, even their bigger self-propelled row crop sprayers.

driving agriculture these days.”

He acknowledges his customer base continues to decline because farmers get older and replacements aren’t always coming along. Farm numbers keep decreasing.

“Our customer average age is very likely 55-plus today. We have some father-son operations also, so there’s a good age mix out there,” he said.

“Just a few years back 2,000 acres was a big farmer. Today we’re talking 5,000 to 6,000 acres, and a few even larger.

Lots of 24-row planters sold the last years and now the 36-row is getting hot.”

ment. Yes, it will change again. But I don’t know when.”

Hinton has about 100 employees, the oldest dating back to that very first year back in 1971. Darryl Vaske, employed since 1974, became his business partner and service manager in 1980.

“My employees are really important to me. They have made me what I am today,” acknowledges Hinton. “I believe they know how much I really appreciate them.”

WITH GROWTH comes building expansions. A 100-by-140-foot shop addition was added last year.

FINANCIAL PEOPLE in the ag world AUTO STEERING, too, is now a given How does he assess his future, and the future of farm iron? speak of 2007 and 2008 as the golden in Hinton’s trade territory.

“When we were broke during that years of agriculture with two successive “I’d say at least 70 percent of the early 1980s crises we certainly didn’t years of record net farm income. farmers around here don’t drive their know our future. And with certainty I So a 2009 slowdown was almost tractors. The tractors drive themselves. couldn’t predict it today,” he said.

Even older tractors have been hitched to inevitable, because of crashing com“This farm economy can turn real fast. modity prices and a livestock industry various auto steer mechanisms. Varistill in the doldrums, especially the pork Twenty years ago the value of the iron able rate planters will be coming on in our store lot dropped in half in just and dairy producers. strong too,” predicts Hinton. one year. I can only hope that we have Yet 2009 was a record year for Hin“Five years from now, even sooner, the vision to see troubles before they ton’s team. most guys will be 100 percent into “And I really don’t know why. I didn’t hit. Get rid of the iron before it takes these technologies because it makes you down is how we have to position think we could beat 2008 but we did. every field operation easier and also ourselves.”

I’ve talked with several other dealers more cost-effective. There’ll be no So what drives Hinton? “Challenges.” wasting of seed or pesticides or fertiliz- who had the same good things happen,” And when it’s time to hang it up, can Hinton said. “And so far things haven’t ers. And they’ll get more done in less he go quietly to the sidelines? slowed for 2010. It’s incredible and I time using less fuel. These guys will be His eyes moistened just a bit as he really take my hat off to our good farmefficiently farming every square inch quietly said, “I hope I can.” out there. That’s the kind of excitement ers who want to upgrade their equip-

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