InBusiness June 2008

IN BUSINESS/NORTH IOWA & SOUTHERN MINNESOTA ■ 1

JUNE 2008

In This Issue:

FOCUS ON FAMILY BUSINESSES • Challenges and rewards of family businesses/Page 2 • The family business basics/Page 3 • Living together, working together — drawing on each other’s strengths/ Ron and Hope Lichtsinn Page 4 • Making succession successful — some pointers/Page 7 • Entrepreneurs need support teams different from themselves/Page 11 • Father-son farming team in ‘priceless partnership’/ Page 13 • The human resources aspect Troy and Ted Watne of running a family business/Page 16 • Business transition: Where generations collide — a look at financial

ETC. • Succession: a matter of respect and communication/Page 19 • Teaming succeeds in uncertain times/Page 22 • Make your meetings more successful/Page 23 • Avoid business pitfalls — advice for the small-business person/Page 24 • In pursuit of — and keeping — disabled workers/Page 25 • Have you ‘hugged’ your employees lately? See what we mean/Page 27

ON THE COVER Standing in their family owned plant, Sukup Manufacturing in Sheffield, are Eugene Sukup (center) and sons Steve (left) and Charles. See the story on Page 21.

Photo courtesy of Sukup Manufacturing

Getting Started:

Family owned businesses face unique challenges

M

My wife, Valerie, and I used to joke that we could never work together. We’d get in too many arguments and drive each other crazy.

Heck, we don’t even like wearing the same color shirt when we go out.

But fortunately there are many other couples and family members who can work well together.

They’ve launched, bought or inherited all manner of businesses, whether farm, shop or online venture, service or manufacturing.

Besides all the issues businesses have to deal with, family owned operations — especially smaller ones — have another set of issues.

Among the biggest, of course, is creating separation between work and home life.

“You just have to make a real effort to keep the business out of family life,” said Brian Campbell, who, with his wife, Merrilee, owns Soup’s Pizzeria in Northwood.

Family based companies are more prevalent than you might think. They employ 80 percent of the work force in the United States and create about 85 percent of all new jobs, according to the Opus College of Business at the University of St. Thomas in Minneapolis.

Given their importance to the economic fabric of our region, we decided to make family owned businesses the focus of this edition of In Business.

We offer several stories on topics of particular interest to family owned businesses, including succession planning, separating home and work life, and running a successful family farm.

Human resources columnist Jim Cronin writes about the importance of dispute reso-

lution procedures, and finance columnist Craig Braget shares tips on successful succession.

Angie Determan, interim executive director of the Mason City Economic Development Corp., shares perspectives from her family’s fourth-generation electrical contracting business, and we have a Q&A with Eugene Sukup of Sukup Manufacturing in Sheffield.

His advice: Love what you’re doing — and pray a lot.

We also put in many other helpful stories on topics such Buttweiler as making your meetings more effective, hiring workers with physical disabilities and “hugging” your employees.

I hope you find the the stories useful to your business.

As for Val and I, while we still don’t think we could run a business together, we have learned an important lesson from the many home-improvement projects we’ve attempted over the years.

It’s to appoint a project captain at the outset. That way there won’t be arguing as the project unfolds about the best way to handle situations that arise.

Whether you’re in business or not, give it a try; it might just save a few headaches.

Before closing, I’d like to publicly thank Mike Morrison, retiring president of North Iowa Area Community College, for his help with and guidance of this publication as a member of our In Business Advisory Board.

Our “family” at In Business will miss him a lot, and we wish him well.

About In Business: Vol. 6, No. 2, June 2008 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

Photo Director: Jeff Heinz 641-421-0543 jeff.heinz@globegazette.com Advertising and Circulation: Greg Wilderman, 641-421-0545 greg.wilderman@globegazette.com

North Iowa & Southern Minnesota In Business is a publication of the Globe Gazette.

Reach us at P.O. Box 271, Mason City, IA 50402-0271 or by e-mail at news@globegazette.com. In Business is mailed to 5,000 business people. A subscription may be arranged by calling 641-421-0545.

2 ■ IN BUSINESS/NORTH IOWA & SOUTHERN MINNESOTA

JUNE 2008

FAMILY BUSINESSES

Meeting the Challenges: Reaping the Rewards Family-based firms make up 64 percent of U.S. GDP

BY JAN HORGEN For In Business

S

Small business plays a huge role in this country‘s economy.

Family-based companies make up about 64 percent of the U.S. gross domestic product, employ about 80 percent of the work force and create about 85 percent of all new jobs, according to statistics from the Center for Family Enterprise at the Minnesota-based St. Thomas Opus College of Business.

Most are privately owned and only about one third survive the transition from the founding generation to the next, according to Brian Monson, Center for Family Enterprise instructor and director.

Working with family businesses to foster healthy operations, communications, marketing and exit strategies is becom-

DECKER HOUSE Bed & Breakfast and

SOUR GRAPES BISTRO 119 2nd St. SE Mason City

ing an increasingly important factor in the education sector.

“One of the biggest challenges with family business is the simple fact that you are in business with family members,” says Mark Olchefske, director of regional business development of the John Pappajohn Entrepreneurial Center at North Iowa Area Community College.

Olchefske “Working with family can add a measure of complexity in solving issues that need to be resolved, especially if there is not general agreement on company direction, expectations or even who should be calling the shots.”

Common stumbling blocks, according to Olchefske, are communication, aspira-

- Takes “Dents” Out Custom Auto Builders

Continued on next page

- Puts “Curves” In Strengthenin g Women 339 S. Delaware Ave. 424-1844

...Nice People You’ll Meet by Accident

641-423-4700 800-363-4700

335 S. Delaware 423-6360

Steve Tass

Since 2001

tions, expertise of the next generations, even use of changing technology.

Although there can be a certain amount of luck in the survival of a company for generations, there is no question that a strong business always begins with a strong foundation, solid goals and deep commitment.

Creating a lasting passion, beyond the founder to succeeding generations, is essential to endurance, according to Lars Peterson, former assistant state director of the Iowa Small Business Development Center.

Start by exposing children to the business, Peterson says.

“Take them to work with you. Mentor them to have a romance with the enterprise,” he said.

Provide for the training and experience necessary for the next generation to fol-

www.curves.com The “Body” Shops Cristy Tass

Side-by-Side on South Delaware

IN BUSINESS/NORTH IOWA & SOUTHERN MINNESOTA ■ 3

JUNE 2008

THE BASICS ... ... to diffuse conflicts, meet challenges in family businesses

By JAN HORGEN For In Business

A

A company benefits from diversity, and disagreement can fuel innovation. But too much discord, especially in a family business, can harm relationships and threaten a business.

Here are some basic concepts to diffuse conflicts and meet challenges in family business: •Depersonalize the problem. Remember that disagreements of ideas and perspectives can generate helpful creativity.

Don’t let a conflict drop to the level of personal accusations and attacks. Take a break, walk away and come back when cooler heads prevail to look at the situation dispassionately.

• Bring disagreements out in the open, giving those involved a chance to

talk about, study and resolve the issue as soon as possible. The biggest problems in family business are often the small things that have been left to boil and fester under the surface. These can blow up if not faced in a clear, calm manner.

• Dig down to the root of the conflict and get involved onboard in curing the problem. This requires each party to take a fair look at themselves and their actions. There will be times when an issue cannot be fully resolved so it is best to find a way to accept or at least tolerate the issue, which will diffuse tension and allow for getting on with business.

• Remember that continuity is often not a clear, straight path. Movement may not always be forward. To reach a goal of success or new business growth

there may be times of lateral change. So planning well in advance for changes in ownership, management or business growth and accepting that these changes may appear jagged at times is vital to understanding the goals and creating continuity.

• Reflect character in all business practices, from marketing and sales to employee management. Character defines a family business. The best road to success is not always the easy path.

Set standards and abide by those standards, even in the hard times. Be willing to sacrifice in the short term if that is what it takes to reach long term goals.

Do the right thing.

— Source: Iowa Small Business Development Center and St. Thomas Opus College of Business Center for Family Enterprise.

FAMILY BUSINESS/From Page 2 low as strong leaders. Encourage formal business education, require them to get appropriate work experience, even with other companies, before returning to work at the family operation as a way to deepen and strengthen their ability to take over the operation when it is time.

BUILDING RELATIONSHIPS with independent experts and advisers can be invaluable. Seek out advisers who are honest and don’t just parrot what company leaders may want to hear. This is a strong step in fostering accountability and strengthening operational leadership.

And hold everyone in the business accountable from the top down or it can put undo strain on the business.

Shore up the necessary legalities from shareholder agreements to management practices, wills to succession plans. Start the legal paperwork early and check it often to be sure it is in keeping with the evolution of the operation.

“In prior generations, there was often the expectation that the oldest child would take over,” Olchefske said. “But that may not be the most appropriate person, so planning for what is best for the future operation is essential.”

The nature of employment has changed drastically during that past 20 years in terms of mobility. This has created a significant impact on most businesses.

“It is extremely important for any business but especially with family-based businesses to focus services on the fundamentals,” Olchefske said. “Focus on core processes. Look at key metrics that transcend generational issues such as accounts payable, sales, inventory.”

Take the emotion out of the business.

“Here at the Entrepreneurial Center, we teach the importance of an objective business footing,” Olchefske said. “We encourage keeping decisions about business and family as separate as possible, although it is never that pure. You do have to let family considerations into the business at times, but the more you can keep those worlds apart the better it is for both.”

TECHNOLOGY AND marketplace changes have a great impact on today’s business operations. Adaptation to these changes and advancements are necessary to survival for most companies.

Mastering new tools and technology, especially Web sites and e-commerce, and fully understanding how these can be helpful may be better done by a

younger generation.

“That is sometimes hard for older business leaders and owners to accept, that the younger generation has a better handle on utilizing these fast-changing technology tools,” Olchefske said.

Communication is the “rebar that runs through the cement in the foundation” of a solid business, according to Peterson.

Convey your passion, guiding rules and accountability expectations in a concise way to family members in the company and key employees.

Then listen carefully to the thoughts, ideas and concerns of those who can help move the business toward the ultimate goals.

ALWAYS STRIVE for clarity. Be simple, be brief and be clear in communicating goals, expectations and needs. Then project those further in action. What you do speaks volumes.

And don’t discount fairness in all business behavior. Business strength and success centers on character.

“We exist in a world of law and no enterprise can skirt the rules for long,” Peterson said, so base business on ethical behavior and it will provide a lasting legacy for the company.

4 ■ IN BUSINESS/NORTH IOWA & SOUTHERN MINNESOTA

JUNE 2008

FAMILY BUSINESSES

BOB FENSKE/Forest City Summit

Ron and Hope Lichtsinn took over the business started by his father, Lichtsinn Motors Inc. of Forest City, in 2005.

Living together, working together and ...

Drawing on each other’s strengths

BY JAN HORGEN For In Business

W

Working side-by-side in a family business and living under the same roof makes for a lot of togetherness.

But keeping shop talk out of home life is tough, say Brian and Merrilee Campbell, owners of Soup’s Pizzeria in Northwood.

“We are busy trying to build the business, so it is a real challenge not to talk shop all the time,” Brian Campbell said.

“You just have to make a real effort to

keep the business out of family life.

Merrilee does it better than I, but we are always working together, sharing ideas.”

Merrilee Campbell is the primary operator of the business, meeting the public, waiting on tables, serving food, taking care of the inventory and ordering.

For Brian, this is a “second job” that eats up much of his free time from teaching and running the intervention center program at Northwood-Kensett High School. At Soup’s, he is the book-

keeper, markets the business and cooks.

“We bought the business as a turnkey in October 2007 and there was lengthy discussion before we decided to buy,” he said.

One of the most important discussions was about duties. The couple made those decisions based upon individual strengths and likes.

When Ron and Hope Lichtsinn took over the family business, Lichtsinn Motors Inc. of Forest City in 2005, they used their individual expertise and Continued on next page

JUNE 2008

IN BUSINESS/NORTH IOWA & SOUTHERN MINNESOTA ■ 5

COUPLES/From Page 4 very important to deal with emotion out skills to divide the business operation’s of the workplace.” work load.

If there are areas in which the “We drew on each other’s talents,” Ron Lichtsinns disagree, they “walk away” Lichtsinn said. “Hope has a psychology and discuss the issue in private. and business management degree and Flexibility also allows for quality time was formerly a buyer for Macy’s. She had for preschool-age children, Lichtsinn said. marketing and human resources expert“If I have to bust out two hours for my ise, so that’s her area.” kids, I will do it,” he said. “When I work Lichtsinn’s experience in accounting, six days a week, it is very important that acquisitions and mergers channeled well I find time to make memorable moments into his responsibilities of general manwith my children.” agement and sales manager on the recreational vehicle side.

THE CAMPBELLS have a blended Since moving back to family of four children, Forest City, the Lichtsinns ages 17 to 24, which also have had two children and We always adds to the business mix they find that business since all work at the pizzeownership allows flexibili- come back to what ria in some capacity. ty that was not an option is important — Their oldest son is an in the world of large corpoliving life full out invaluable resource in the rations.

Right now, Hope and doing the best kitchen with several years experience as a restaurant Lichtsinn does a good we can.” cook. share of her work from — Brian Campbell, owner of “Ben helped get us off home.

Soup’s Pizzeria in Northwood the ground, establish our “That is probably one of along with wife Merrilee. the biggest intangible benmenu,” Brian Campbell efits, we have much more said. “That was a big piece flexibility that we ever had in our other of the puzzle when we looked at buying jobs,” Ron Lichtsinn said. “We struggle a the business.” bit with personnel meetings. Hope might So how do these busy families keep bring out newborn in to the meeting. But their batteries charged and find family in many ways our employees function as time? an assimilated family. Perhaps we infuse Soup’s Pizzeria is closed two days a our young children into work more than week. we should, but it seems to work.”

“We have learned to fit a lot into Sunday and Monday, our days off,” Merrilee AT SOUP’S PIZZERIA, there have Campbell said. “And we make time to do been changes beyond the business name. things we like. Brian golfs, I love to walk The menu, pizza dough and list of suppliand always have projects around the ers have all been altered. Each step was house. The biggest challenge is lack of discussed among the Campbells and they family time so you make more of an called in the help of other friends and effort.” acquaintances that had experience in the food industry.

FRIDAY NIGHT is a standing “date With so many hours spent together, night” for Ron and Hope Lichtsinn. keeping emotions in check is important.

They hire a babysitter and play golf, go “Of course there are going to be disto a show or go out with family and agreements,” Merrilee Campbell said. friends. “And we travel,” he said.

“The most important thing is to learn not “Through the business we have done to take things personally. Sometimes you quite a bit of traveling for training, to take a deep breath, and it’s important to conventions and seminars. That also stay calm.” serves a break for us to spend time Discussion over disagreements is held together away.” in private, out of the public eye, both say.

Both couples say that their strong, “We have to remember that it will get dedicated relationship makes all the difbetter after the situation or crisis is over ference in working and playing together. and getting frustrated doesn’t help,” “It is very important to try to remember Brian Campbell said. to be supportive or encouraging of one Lichtsinn agreed. another,” Brian Campbell said. “We “To work so closely together, you need always come back to what is important — an unprecedented level of respect for your living life full out and doing the best we spouse’s opinion, especially in front of can.” employees or the public,” he said. “It is — Related photo on next page.

“

See Huber Supply For The Goods • • • •

Good Good Good Good

People Ser vice Products Prices

Welding Outfitters Since 1939 1527 N. Federal, Mason City

641-423-9115 115 Vine Street East, Owatonna

507-444-0533

Our success is building... ...in the upper midwest

Larson Manufacturing, Albert Lea, M N

Wo o d f i r e G r i l l e , D i a m o n d J o C a s i n o , N o r t h w o o d , I A

Albert Lea Medical Center, Albert Lea, M N info@larsoncontracting.com www.larsoncontracting.com Lake Mills, IA 800-765-1426 Albert Lea, MN

6 ■ IN BUSINESS/NORTH IOWA & SOUTHERN MINNESOTA

JUNE 2008

“We have learned to fit a lot into Sunday and Monday, our days off. And we make time to do things we like. Brian golfs, I love to walk and always have projects around the house.

The biggest challenge is lack of family time so you make more of an effort.”

— Merrilee Campbell, who along with husband Brian own Soup’s Pizzeria in Northwood.

Whiskey Creek® Wood Fire Grill Comes to Mason City • Location: Former Country Kitchen, Hwy 122 West • Menu:

Prime Rib, Steak, Chicken, Shrimp, Fish, Soups, Burgers, Sandwiches and Desserts. The restaurant also has a bar.

• What Sets Us Apart From Other Restaurants: Whiskey Creek Wood Fire Grill features wood-fired cooking that is unique to Mason City and North Iowa. We also offer both indoor and outdoor seating and plenty of parking.

• Hours: 11 am to 10 pm Sunday through Thursday 11 am to 11 pm Friday & Saturday

• Owner: Jay Kvigne, former owner of the Country Kitchen and long time restaurant owner.

1519 4th Street SW Mason City

641-423-4000

IN BUSINESS/NORTH IOWA & SOUTHERN MINNESOTA ■ 7

JUNE 2008

FAMILY BUSINESSES

Making succession successful Planning, communication important for a smooth transition from generation to generation

By JAN HORGEN For In Business

There are unique benefits and challenges in passing a family business to the next generation.

Turning a successful company over to the next generation in a smooth transition requires specific thought and communication on all sides.

Lichtsinn Motors Inc. in Forest City, a General Motors and Winnebago recreational vehicle dealership, was founded

by Ron Lichtsinn Sr. in 1971 and now is run by his son and daughter-in-law, Ron and Hope Lichtsinn. The transition from founder to second generation has been a success.

A smooth succession, solid business practices, training and dedication have helped Lichtsinn Motors become the fifth-largest dealership in the Eastern Division of Winnebago Industries.

But deciding to go into the business didn’t come easy.

After researching the opportunities of

T

We Distribute Fire Equipment, We Sell Fire Protection ON SITE PROFESSIONAL INSPECTION SALES - SERVICE - TRAINING -24 HOUR DROP-OFF BOX -RECHARGING WHILE YOU WAIT A COMPLETE LINE OF FIRE PROTECTION & SAFETY EQUIPMENT AUTOMATIC HOOD SYSTEMS • TESTING • TRAINING

SERVING N. IOWA FOR OVER 49 YEARS

641-423-4200 • 1-800-286-4202 902 N. Federal • Mason City

the dealership, the younger Lichtsinns, in 2001, made one of the biggest decision of their lives: They moved back from Minneapolis, preparing to take over the business.

“The light bulb came on one day for Hope and I when we were commuting home from our jobs in Minneapolis,” Lichtsinn said. “God gives us 24 hours in a day and we were giving our employers 12 to 13 hours every day. Add to that the commute and we only had two maybe three hours of time together. At that Ron Sr. point we wondered, ‘What are we doing?’ ” Experience in working with acquisitions and mergers at his former position with Pillsbury in the Twin Cities gave Ron Lichtsinn some inroads on what was needed for a smooth transition.

Succession planning was imperative, according to the younger Lichtsinn.

“We put a plan in place for when Dad would be out of equity in the business,” he said. “It is imperative that there is clear communication and commitment for

when each step will happen.”

Because letting go of an entrepreneurial dream can be tough, even emotional, having outside, impartial advisers involved in the succession plan is a important.

There are people who can help define a transition plan, set down goals and steps to reach those goals, determine legal parameters and even Ron and Hope Lichtsinn assist in following the transitional agreement.

“Communicate and commit to when things will happen,” Lichtsinn said.

“Then follow through with the agreement. Honoring the plan makes all the difference.”

Although his accounting expertise and work with acquisitions and mergers gave Lichtsinn a strong business background, this was a different venture. He worked Continued on Page 9

What’s in this box is your business.

Protecting it is ours.

“Ten Years in Business” Serving all your packaging needs

1647 North Federal • Mason City

641/423-7969

Custom Boxes: ONE to 1000

Boxes Unlimited Inc. 509 N. Georgia Ave., Mason City, IA • 641-421-9563 boxes@jumpgate.net www.boxesunl.com

Family Owned & Operated Meeting All Your Appliance Needs Since 1990

IN BUSINESS/NORTH IOWA & SOUTHERN MINNESOTA ■ 9

JUNE 2008

SUCCESSION/From Page 7 side-by-side with his father for four years, from 2001 to August 2005, before taking control of the company.

“The best thing Dad did was allow me latitude to breath and make my own decisions,” Lichtsinn said. “I feel that is absolutely critical in a succession plan.”

There can be stumbling blocks when passing the company to the next leader.

Financing can be a major challenge.

“If you don’t have seller financing, you have to be backed by someone — a bank or a bigger group — which can have a major impact on business decisions,” Lichtsinn said.

Another important component of successful transition is having realistic expectations when choosing a successor. A business owner may wish all the children could be involved and work together but that may not be practical. Lichtsinn has three sisters and a brother, none of whom have major involvement in the company.

Succession must be put on an object footing, according to Mark Olchefske, director of regional business development for the John Pappajohn Entrepreneurial Center at North Iowa Area Community College in Mason City.

“It is important to keep decisions about biz and family as separate as possible,” he said, “although it is never that pure. There are time when you have to let family considerations into the business, but the more you can keep those worlds apart the better it is for both.

“Selecting the next business leader should be based on ability, experience and

File photo

Ron and Hope Lichtsinn in 2002. sound business judgment.”

It was necessary to remove emotion from the succession equation at Lichtsinn Motors.

“Sometimes there are tough decisions to be made, especially when there are other family members involved,” Lichtsinn said.

“Emotion clouds judgment. And this is business, not a lifestyle decision.”

Partnering with the right people is another key component — from legal to accounting to tax and insurance interests, he says.

➡ O’BRIEN ➡

Accounting and Payroll Services Individual & Business Tax Preparation Software Training

104 10th St., S.W., Mason City, IA 50401

★ LOCAL ★ NATIONWIDE ★ WORLDWIDE

423-7915

Continued on next page

LEERAR & ASSOCIATES

MOVING & STORAGE Call Collect

A transitional agreement makes it important to have an employment agreement, providing a formality in what both parties are agreeing to do.

Lichtsinn also took a long look at the managers and employees, assessing their strengths and weaknesses and determining how each fit into his future plan for the business.

“You need the right leaders in which to entrust responsibility,” he said.

Toll Free 800-397-3052 Free Estimates

“Over 50 Years of Quality Service” US DOT 624310

Jolene K. Leerar Johnson Financial Services, Inc. is not a subsidiary of nor controlled by ING Financial Partners, Inc. Securities and Investment advisory services offered through ING Financial Partners.

Member SIPC

CERTIFIED QUICKBOOKS PROADVISOR® 6 Broadlawn Place • Garner, IA 50438-1048 Phone (641) 923-3100

10 ■ IN BUSINESS/NORTH IOWA & SOUTHERN MINNESOTA

Keys to successful succession planning There are three major aspects to succession: management, ownership and taxes, according to the Iowa Small Business Development Center • Start planning early, as much as a decade or more before retirement, say family business advisers.

• Set down a plan that defines ownership and management and how all will benefit financially. Set clear parameters on how the business is run, and how equity (such as dividends or profit sharing) will be determined between working owners/managers and those who may only have an equity share in the business.

• Tax planning revolves around technicalities and can be structured from trusts to buy-sell agreements to insurance that will help diminish taxes or allow financing to pay necessary taxes.

• Hold a family meeting to discuss succession; it can prevent problems or misunderstanding during the process. Set down a clear plan of succession and communicate this to everyone.

• Talk to non-family employees, major stakeholders and impartial advisers about the transition.

• Select a leader through objective evaluation, looking at candidates’ experience and potential. Advisers outside the business can often help make this an impartial decision.

• Don’t get caught up in emotion. To keep the business successful, it may be necessary to divide assets so the business leader can make major business decisions, even if other stakeholders do not agree.

• Using objective standards, help the successor gain knowledge and experience needed to run the company.

This may mean addition skill-set education and usually includes a period of working in the business beside others with expertise and experience.

• Be willing to seek outside professional help, whether for key business processes or to mediate during the transition. Outside professionals can help diffuse a problematic situation through impartiality. This can save money and helped everyone involved retain their sanity.

— By Jan Horgen

SUCCESSION/From Page 9 Take time to assess the employee talent pool, decide who will align with business goals, who is competent and presenting right image of the business, then make changes if necessary, he said.

One business decision was to have a dedicated sales manager on the General Motors side while Lichtsinn runs the dealership and acts as sales manager on the recreational vehicle side.

Re-creating the company image takes time, Lichtsinn said. “But we’re getting there.

“There is a large amount of risk and pressure of owning your own business,” Lichtsinn said. “There are times when I wake up in the middle of the night and can’t always get back to sleep because I’m thinking about the business. That’s just the way it is. If you can’t put up with that, you should not be in business for yourself.”

JUNE 2008

DreamWeavers Pappajohn Center helps people start own businesses

By JAN HORGEN For In Business

T

Thousands of people dream of going into business for themselves. The dream can be a daunting because success takes a huge measure of focus, preparation and hard work.

The John Pappajohn Entrepreneurial Center at North Iowa Community College can help.

Two 10-week FastTrac Programs, one for startup ventures and another for growth, are offered through JPEC. These are good starting points, giving solid framework for seeking to fulfill an entrepreneurial dream, according to Mark Olchefske, director of regional business develOlchefske opment at JPEC. “A successful business focuses on the fundamentals — managing cash flow, managing employees, along with sales, marketing, operations.”

BUT THE process starts long before the doors open. A business venture must begin with a product or service.

“Even the greatest product needs a profitable market,” Olchefske said.

Before make the leap, there are questions to be asked.

Who will buy? How will they buy? Where will they buy? Why will they buy this product as opposed to another? Do you have a sustainable, competitive advantage? How would you explain your business in less than a minute?

Those are some of the first things entrepreneurs are asked to study in the FastTrac program.

Have a clear business plan, starting with how much money is

need to get a business up and running. Direct costs may include materials, labor and selling expenses. Indirect costs would be overhead including rent, utilities, outside services and insurance.

Only after these things have been carefully thought out are entrepreneurs asked to consider where the finances to start the business may be found.

“The nature of employment has changed immensely during that past 20 years,” Olchefske said.

“There is much more mobility and that will have a significant impact on most businesses.”

Technology has opened the field for many businesses to expand their customer base, some in services, others in product.

“Ask whether a Web site makes sense, whether e-commerce makes sense,” Olchefske said.

“And especially in establishing a new venture, you must have a passion for the business. It is hard work and there is no separating that out.”

New businesses must have solid business plan to survive and thrive. There are three reason for crafting the plan.

THE FIRST reality check is to determine if the business plan is workable. A clear look at this right from the start can save time and money.

After a venture is operational, the plan is sort of map to let you know if you are meeting your original goals and objectives, another reality check.

Last and extremely important, Olchefske said, the business plan will be critical in securing necessary financing for the venture, including state and federal funding that can often be secured at lower interest rates.

A business plan consists of 10 sections including and executive summary, business concept, Continued on next page

IN BUSINESS/NORTH IOWA & SOUTHERN MINNESOTA ■ 11

JUNE 2008

HIRING ADVICE

JPEC/From Page 10 financial plan, sales and marketing, design and development, operations, management, strengths or weaknesses.

JPEC has an impressive success rate for entrepreneurs who have gone through FastTrac with 78 percent of the new businesses still operating, according to Olchefske.

“Not all the students started businesses after completing the program,” he said.

“Sometimes their idea could not get them where they wanted to go. But in many cases these students went on to a different idea and started another business, using the skill set they learned through FastTrac.”

Other services and support are available through JPEC and NIACC including “We have a Small Bus Development Center, for counseling and ongoing work,” Olchefske said. “And Business Incubator for businesses that want to start in an environment with resources close at hand .”

ACCESSING CAPITAL is essential and JPEC offers help in finding those resources and in helping find ways to outsource business processes that one may not want or have the expertise to do.

Some operations may need to create a external circle of experts for outsourcing certain processes which allows greater focus on the critical aspects of what will make business successful.

“Each of us at JPEC came out of business and have a diversity of backgrounds,” Olchefske said. “We have all had those corner office jobs and the scars to show for it.

We are here as a resource to help each person who comes to us walk their own path and make their own choices.”

FOR MORE: More information can be found on the JPEC Web site, www.niacc.cc.ia.us/ pappajohn.

The site offers such resources as: • a business tool kit; • information about financing; • links to JPEC partners including other Iowa-based Pappajohn Entrepreneurial Centers, Iowa Workforce Development Center, Iowa Department of Economic Development, Iowa Capital Investment Corporation and Iowa Entrepreneur Network.

Entrepreneur needs support team different from himself

By RON PRICE For In Business

A

A young entrepreneur was recently reviewing his own natural talent patterns as revealed in a comprehensive psychometric tool.

He had exceptional behavioral and motivational energy as well as having one of the highest empathetic outlook scores ever seen (9.8 out of 10). What most people wouldn’t give for some of his energy.

However, as with many up and coming entrepreneurs, he was great at getting things started and extremely frustrated with trying to get things finished. The young entrepreneur realized that in order to fulfill his potential, he needed to build a much stronger support team to execute more effectively on his ideas.

This entrepreneur currently owns three different businesses and has enough ideas to start several more. What is important at this juncture is building a support team that is different from him — folks who don’t like to initiate new projects but who will enjoy implementing, nurturing and optimizing the ideas that have grown into businesses already.

The question he had (like so many others do) is: “But how do you do that?” In what may seem too simple to be considered anything other than obvious, the response is: “Know the job, know the person, then manage for success.”

Know the job What are the primary activities of this job?

Interaction with lots of people? Versatility?

Working in a competitive environment (whether competing against a goal or winning against competitors)? Frequent change? Maintaining an organized workplace? What are the activities that make up the majority of time spent in this job when it is done right?

What are the primary intrinsic rewards of this job? Of course, everyone wants a paycheck, but what else does this job reward? Helping other people? Learning new things? Creating and maintaining order? Or is the greatest reward creating lots of money or some other measurable result? Every job rewards something, so what does this job reward most?

What common sense or good “business judgment” does this job enlist? Does it depend on someone who focuses on practical results, organizing things, seeing how things fit together or compare with each other? Is it asking for someone who thinks deeply and spends most of his or

her time managing concepts, ideas, or strategies? Or, is this job asking for someone who is an exceptional judge of other people and who can influence, lead, understand, and develop others?

Know the person Using the same road map for understanding the job, owners/managers should be able to develop a deeper and more beneficial understanding of the ideal person for the job.

What activities does the ideal candidate enjoy most? Interaction with others or space and time to work with a singular focus? Completing routine tasks or lots of irons in the fire? Troubleshooting or predictable project management?

Organizing files and systems or always moving forward in the midst of chaos? How does this relate to what the job is asking for?

What motivates the candidate? Creating wealth? Helping others? Learning new things?

Working according to a set of principles? Being in charge and controlling the destiny of others?

What common sense, or business judgment, does this person bring to the job? Is he or she more effective as a thinker? Is he or she quick at comparing several practical alternatives, understanding how things work, and adjusting to create the desired results? Or does the candidate most effectively understand the needs of others?

How does this relate to what the job is asking for? Is someone being put in the position that is a natural fit, or are we asking him or her to come to work and check his natural talent and Continued on next page

123 2nd St. SE, Mason City

641-423-8676 120 3rd St. S., Rockwell

641-822-3191 302 W. Main Ave., Rockford

641-756-3311 401 Blunt, Charles City

641-228-4211 www.fullertonfh.com

12 ■ IN BUSINESS/NORTH IOWA & SOUTHERN MINNESOTA

JUNE 2008

HIRING/From Page 11 motivational inclinations at the door because that is what the job requires?

Manage for success Once an owner/manager has a crystal clear picture of the activities, rewards, and evaluative judgment of the job and understands how the candidate About the fits or doesn’t fit author with that picture, it Ron Price is the is possible to develfounder and CEO of op a unique new Price Associates, a approach to managcompany dedicated to ing for success. helping business leadBy leveraging ers and entrepreneurs those parts of the solve problems, identify job that will come solutions and implenaturally and ment change in stratelearning how to gy and performance. navigate the rough As the former presispots that don’t line dent of the AIM Comup, there is a better panies, he directed the chance of supervisstrategic, marketing, ing the work and compensation and the person for incentive planning, as greater performwell as field training ance and fulfilland operations. ment.

For more informaWho wouldn’t tion, visit www.Pricewant a relationship Associates.com or call with an employee 866-442-0556. where all you have to say is, “go do your thing,” and high performance is the result?

In order to achieve optimal effectiveness in hiring and management, entrepreneurs have to accept that not all jobs or all people are the same. Jobs ask for specific activities, motiva-

tions, and judgment. And people bring unique behavioral preferences, motivational biases, and evaluative judgment patterns to their jobs.

By having a clear picture of the job and what constitutes superior results, then having a clear picture of where a person fits with what the job is asking for, business leaders can begin to “manage to win” instead of doing what most supervisors end up doing with their employees, “managing not to lose“.

It is said that diagnosis is often “90 percent of the cure.” As the entrepreneur realized, he often made hiring decisions feeling like he was playing roulette.

He put an ad in the paper, starting looking at resumes and hoped the resumes gave him some clue about whether a person was capable of doing what he wanted.

Some companies will take the extra effort to call references, do some background checks — all of this to set the stage for an interview where the research indicates most interviewers decide in the first 30 seconds whether or not they like the candidate.

In better companies, hiring managers may do a reasonable job of vetting the resume and validating what the candidate can actually do. However, great hiring is about developing a deep understanding of what the candidate is most likely to succeed wildly in doing.

Most entrepreneurs view hiring, supervising and managing as something other than primary work — it is a means to an end, almost a necessary evil, rather than a critical part of fulfilling their entrepreneurial dreams.

They rarely recognize that how they understand the job and the candidate may be one of the most important factors in their future success.

Lukes Central Machine Complete Machine Shop Service 34 Years Experience

Ron Lukes Master Auto Technician ASE Certified

360 N. Delaware Ave Mason City, IA 50401 Bus. (641) 422-0021 Res. (641) 357-8966 Fax (641) 494-2355 www.lukescentralmachine.com

In Service Since 1921

H.C. DETERMAN ELECTRIC COMPANY MASON CITY

Serving North Iowa’s Commercial & Industrial Needs for 87 Years!

Top hiring tips for small-business owners • Don’t expect to hire a replica of you.

• Know exactly what you expect from your new hire. Write a job description. List your goals for the employee. If you can clearly articulate the job to all applicants, they will have the opportunity to determine if this is a mutually agreeable fit. Be sure to concentrate on specific job-related descriptions, and not subjective information.

• Determine what type of manager you are. It’s imperative that you’re honest about your work style.

• Set aside time.Plan to advertise, interview and train until you find the right person.

• Ask your insurance carrier about your responsibility for insuring your team members.

• Determine your time-off policy. Team members will need time off — whether to recover from the flu or just to recharge.

• Create a disciplinary and review process.

Have a policy in place before you bring on a team member.

• Find a reputable company for conducting background checks.

• Create a fact sheet for applicants that you can provide along with an application to interested candidates. This sheet should cover your basic job description, expectations and hiring process.

• Create your training program and make sure you have a written outline. Many misunderstandings and frustrations occur simply because a new hire didn’t understand the expectations of the boss.

— By Peggie Arvidson-Dailey, businessknowhow.com

JUNE 2008

IN BUSINESS/NORTH IOWA & SOUTHERN MINNESOTA ■ 13

PRICELESS PARTNERSHIP As longtime North Iowa farmers, Ted Watne (right) and his son, Troy, can tell you just about to the dime what they spent on fuel this year. And you can bet as costs rise, the two are keeping a close eye on the price of fertilizer. But the thing they value the most — their partnership — is priceless.

• Their story begins on the next page.

MARIETTA NELSON-BITTLE/For In Business

14 ■ IN BUSINESS

JUNE 2008

Father-son partners say family farming worth the work

By MARIETTA NELSON-BITTLE For In Business

As longtime North Iowa farmers, Ted Watne and his son, Troy, can tell you just about to the dime what they spent on fuel this year. And you can bet as costs rise, the two are keeping a close eye on the price of fertilizer.

But the thing they value the most — their partnership — is priceless.

“There’s plenty of free advice,” said Ted, who at 63 has been farming for more than 40 years.

“And it really gives you that opportunity to bounce ideas off someone else,” added Troy, 38.

The Watnes, of Belmond, have been farming together full-time since 2001. They share machinery, fuel costs and labor.

“Just about everything we do takes two people,” Ted said.

But they farm their land (1,600 acres for Ted, 1,100 for Troy) separately and keep other costs like seed and fertilizer separate. They also currently raise about 70 head of feeder cattle.

A

TED FARMED with his brother and father until 1981, when his dad retired and they dissolved the partnership. Although Ted and Troy count their years farming together since 2001, it really all began back about when Troy was 5. He helped around the farm with chores and mowed the lawn.

“I’ve always enjoyed farming, being outside in the field watching the crops and see the benefits of my efforts,” Troy said.

AFTER GRADUATION from Belmond High School in 1988, Troy worked in soybean production and thought about other ways to make a living.

“At one point, they (Ted and wife Barb) though I should do something else with my life,” Troy said.

But by 2001, the farm economy was looking better.

Continued on next page

IN BUSINESS/NORTH IOWA & SOUTHERN MINNESOTA ■ 15

JUNE 2008

PARTNERSHIP/From Page 14

ISU center helps with financial plans

When they went into farming together, Ted and Troy decided to keep most of their operations separate. That way, explained Troy, if one of them decided to get out of farming, the other wouldn’t be burdened with finding enough money to buy all the assets of the operation.

However, added Troy, he would never have been able to begin farming without the help of Ted. His dad had the equipment and the know-how to give his son a hand.

When a multi-generational family decides to farm together, finances often top of the list of concerns.

How will costs be shared? How much land or livestock is needed to support our families? How will land payments or rent be made? Should we form a corporation? And what about the complicated farm taxes?

The answers will differ from family to family. Communicating and being informed are critical to success, said Dave Baker of Iowa State Extension’s Beginning Farmer Center.

The center helps farmers negotiate complex issues. It hosts periodic retreats for farmers planning to transition to a multiple-generation operation. The center’s staff attorney helps with legal issues.

One of first questions farming families must answer is how much longer the older generation plans to farm.

“The timeline is very important,” Baker said. “The husband and wife have to be in sync and the son or daughter who wants to join has to be prepared.”

Then there’s matter of land and livestock. The family must decide whether the next generation will rent the assets from the older generation or be in a crop share situation. In today’s fluctuating market, Baker said, some older farmers are going

TODAY, IN ADDITION to full-time farming, Troy is a seed dealer for Golden Harvest and president of the Wright County chapter of the Farm Bureau. And father and son farm compatibly.

“We’ve never had a situation we couldn’t handle together,” Ted said.

They do differ a little on their outlook about farming, as a business and a way of life.

“It’s still about family farms to a certain point,” said Ted. Century farms and farm life are still important parts of the fabric of rural Iowa, he added.

But Troy compares farming to “owning any business on Main Street.” People aren’t as sentimental today about the “home place” and farms as they once were, he added.

LOOKING TOWARD the future, Troy said he would be willing to help his two young children if they were interested in farming some day.

In the short term, the Watnes are excited about the new markets opening up for corn and soybeans and the competition for their crops that’s driving prices to record highs.

Ted will farm “until I drop,” he said with conviction.

And Troy?

“As long as the banker says I can,” he said with a grin.

Added Ted: “And right now the bankers are real friendly.”

HERB & GEORGE TV & SATELLITE SYSTEMS CENTER Discount Prices Expert Installation Local Channels Available Free Equipment & Install SALES • SERVICE • INSTALLATION 641-423-4835 • 800-310-4835 1310 N. Federal Ave. Mason City, IA Since 1938

to an adjustable rate lease to realize profit from increasing prices, especially in the grain market.

There are theories about how many acres it takes to support a farm family. Baker said some estimate between 800 and 1,000, although that’s only for an operation focused on corn and beans.

Through sustainable agriculture and organic production, some families can subsist on 80 acres. For example, Baker said, some families operate a profitable meat goat or cattle herd or an apple orchard.

To purchase large assets like tractors or groups of animals, some farming families form corporations and the members of the family buy into the corporation equally. Or they simply borrow the money together and put their names on the loan.

There must inevitably be a discussion about what happens when the older generation passes away. If a non-farming sibling is given an equal amount of farm assets, the farming sibling must prepare to rent or buy the asset. Farming siblings sometimes take out a life insurance policy on the older generation which will then allow them to buy the assets.

“That’s why planning ahead is so crucial,” Baker said.

— By Marietta Nelson-Bittle

For more, visit www.extension.iastate.edu/bfc

Mason City Lumber Company 1501 N. Federal Ave. Mason City

(641) 423-6643 Randy Hoel & Elton Butler

Family Owned Since 1914

Grill Hours: Mon.-Thurs. 5 a.m.-9 p.m.

Fri. & Sat. 5 a.m.-10 p.m.

Sun. 5 a.m.-8 p.m.

620 12th NE • Mason City 641-494-2313

16 ■ IN BUSINESS/NORTH IOWA & SOUTHERN MINNESOTA

JUNE 2008

FAMILY BUSINESS: HR

Unique ‘challenges’ of family firms

By JIM CRONIN For In Business

O

On page 14 of my workplace resource book, “No Fluff, No Puff: Just Management/Communication Principles that Work,” I acknowledge that I am not a “certified expert regarding family businesses.” But I have had considerable experience in representing familyowned businesses in a wide variety of employee relations issues.

My personal experiences in representing family-owned businesses have included one in Wisconsin which was facing a union organizational attempt — not because the company was paying low wages and benefits — but rather because the president’s son was spoiled and abusive toward everyone, including experienced managers and productive employees.

Fortunately, the father was very candid in his final appraisal of his adult son’s lack of needed “personal” skills and followed the “out of sight, out of mind” principle by “promoting” his son to director of special projects at a plant the family owned and operated in Oregon. I was told the cheers of the Wisconsin employees could be heard for miles.

Another case arose in a large family business operation which involved two brothers and their families and was somewhat reminiscent of the Mandovi family squabbles described below — minus the fistfight.

Here, one brother was diagnosed with terminal cancer at a time when both brothers needed to cooperate with each other by signing certain covenants and agreements which would have been mutually beneficial to the children of both fathers.

The cancer-stricken brother continued to be so angry and spiteful toward his older brother and his sons that he refused to sign the agreements, with the result that after his death all of the relatives (and the business) experienced very negative financial consequences.

IT WASN’T THE WINE: IT WAS THE PEOPLE — AND THE LACK OF EFFECTIVE DISPUTE RESOLUTION PROCEDURES. One of the more publicized family-owned businesses in recent years has been the winery operated by Robert Mandovi. The latest publicity appeared after Robert’s recent death at age 94.

According to various press reports, Robert Mandovi was a native of Virginia, Minn. He and his family moved to California where his parents first purchased a small Napa Valley winery. Some years later, the parents pur-

chased the Charles Krug Winery (after it had fallen on hard times) on the recommendation of their two sons.

Robert received a bachelor’s degree in economics from Stanford University and then for more than 20 years he and his younger brother, Peter, operated the Krug Winery with Robert selling, mostly on the road, and Peter staying at home and making the wine.

The brothers had very difCronin ferent personalities. Robert was described as being “a master of the grand gesture” and dedicated to “living like royalty.” He took winery employees on grand tours of Europe to see how other fine wines were made.

Peter was much more conservative and reserved and saw steadier profits in the status quo.

Tension between the two brothers came to a head at a family council in 1965. Robert and his wife were scheduled to go to a dinner at the White House and Robert bought his wife a fur coat to wear to the event. After Peter accused Robert of using winery money to pay for the fur coat and overspending on travel and promotion, Robert reacted by punching Peter.

Specifically, Robert stated in his memoir, “I smacked him hard. Twice.” And “there were no apologies and no handshake.”

Robert was subsequently placed on a six month leave, hired a lawyer and the “ensuing legal tangle lasted for years.”

Robert eventually opened his own winery and had two sons and a daughter on the management staff.

ABOUT THE AUTHOR: Jim Cronin has been an employee relations (management) counsel with the Minneapolis-St. Paul law firm of Felhabor, Larson, Fenlon & Vogt for more than 30 years. The content of his 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 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 workplacerelated questions of general interest in future issues. Send your questions or comments to Jim at jjcanddrb@earthlink.com.

BUILDING??

WE ARE!!

Continued on next page

Forest City www.hollandcontracting.com 641-585-2231 800-594-9452

IN BUSINESS/NORTH IOWA & SOUTHERN MINNESOTA ■ 17

JUNE 2008

Cronin/From Page 16 In 1990, Robert stepped down as president of his winery and made the two sons co-executive officers, but a new Mandovi power struggle between the two sons led Robert to place the oldest son in charge with the younger son taking over the winemaking.

After the company went public three years later, both sons left the company after being criticized publicly by their father for a number of things, including emphasizing low-priced wines at the expense of the company’s signature fine wines.

EXAMPLES OF POTENTIAL PROBLEMS Companies of all sizes and types, including family-owned businesses, need specific written procedures so that all employees know their rights and obligations: • What are the specific workplace responsibilities of various participating relatives?

• What job training requirements will all participating members be required to fulfill?

• What conflict resolution procedures will be followed when there are disagreements about the future of the company, like: — Should we expand our evening and weekend hours of operation?

— Should we add new product lines in (hopeful) anticipation of future customer demands?

— What disciplinary/termination procedures will exist for those family members

NORTH IOWA MILLWORK CO. 641-423-2822 2599 S. Federal Mason City, Iowa

who decide to enter “early retirement” at age 32 — while still reporting for “work” every day and collecting a full paycheck?

— What can/will be done when Mom, Dad, Older Brother or Older Sister decide relevant “company rules” won’t be enforced in certain cases — in order to “keep the (family) peace”?

This last one is critical because it really is better not to have rules if they are not going to be enforced and applied uniformly.

POTENTIAL SOLUTIONS FOR REAL PROBLEMS Fortunately, family members who own/operate businesses have a variety of outside sources available to them.

On the personal level, we may know of family businesses that have a reputation for cordial employee-relations, including family members.

If I own a bakery and you own a greeting card shop, we are not business competitors. So, hopefully, we could learn from each other about what has “worked” in dealing with our respective family members. The businesses might be different but the family dynamics would probably have many of the same (positive and negative) characteristics.

On the local level, it would be worthwhile to check out the reputations of local law and accounting firms which have solid reputations for being able to share what other family business clients of theirs have found to be helpful in having both the business and the family thrive.

Many times the local advisers keep cur-

Complete Collision Repair!

Full Service Detail Center FAMILY OWNED...SINCE 1976

rent on the content of various business journals and are able to tell you about what family business trends are occurring in other parts of the country.

Business schools in nearby universities and local community colleges can also serve as helpful resources since many of their staff members are available for counseling on a wide variety of businessrelated issues, including those which may be unique to family-owned businesses.

There are also consulting operations which are more national in scope.

One is the Graduate School of Business at Stanford which has a Leading Family Firms Program which, according to its Web site home page “ ... teaches the leaders of family-owned businesses how to manage future growth while overcoming the challenges and conflicts that threaten the legacy of their firms.”

A second national consulting source is the Family Business Institute headquartered in Raleigh, N.C. According to its web site, the mix of the institute’s clients includes 70 percent family businesses.

Many companies prefer, understandably, to rely on local advisers before going on the national scene and I support that approach.

•••

On the Internet: • Graduate School of Business at Stanford www.gsb.stanford.edu • Family Business Institute www.familybusinessinstitute.com

Northern Cedar Service Co., Inc. “IT’S THE SERVICE AFTER THE SALE THAT COUNTS”

RESIDENTIAL COMMERCIAL & INDUSTRIAL

641-423-0341 Toll Free 1-800-358-8009 125 N. Jackson Ave. Mason City, IA

2111 S. Federal, Mason City

641-424-4973

hawkeyeautobody.com

18 ■ IN BUSINESS/NORTH IOWA & SOUTHERN MINNESOTA

JUNE 2008

BUSINESS TRANSITION

When generations collide

By CRAIG BRAGET Tax Director, RSM McGladrey, Mason City

F

Family owned businesses make up approximately 90 percent of the 20 million-plus companies in the United States and employ more than half of all private-sector workers, according to the Family Firm Institute.

Yet the chances of such a business surviving past the founding generation are only about 30 percent.

Why the low odds? Some businesses fail due to poor management or competitive pressures. But many disappear because owners neglect to plan for a feasible transition from one group of owners to the next.

And still others sell to outsiders as a way to resolve unique and complex business and ownership issues.

While selling may be an attractive alternative, a comprehensive transition analysis covering all available options may identify other much more appealing solutions.

A thorough transition analysis encompasses wide-ranging issues including business planning, estate planning, risk management, succession planning, tax planning and wealth management.

COMMON GOALS AND ALTERNATIVES Baby boomers developed a large number of successful entrepreneurial businesses.

Members of that generation are turning 60 now and contemplating the next phase of their lives, which typically includes business-transition planning. Those who own businesses face key decisions about their enterprises that will dramatically affect themselves, their businesses and their employees.

The owners generally have three strategic choices to achieve their goals of protecting the wealth their businesses generate and enabling the business to continue and succeed: • Family, co-owner or employee succession. Business owners can transition ownership, management or both to these potential owners.

• Sale to outsiders. Business owners may choose an outright sale to independent third parties for a variety of reasons. Perhaps they have not identified anyone from their family or management to lead the business. Or perhaps the likely candidates from within cannot afford to buy the business.

• Professional management. Business owners may retain ownership for them-

selves, other family members or inactive members of the current ownership group but retain others to manage the business.

Sometimes these outside managers serve as a bridge until other potential managers who are also owners gain needed education and experience.

• Key elements of a transition plan. When it comes to managing transition planning, no two solutions are alike. Each business, ownership group and successor group has its own distinct requirements, commitments and strategies to Braget consider. These often-competing factors demand a plan specifically designed to achieve a successful transition to the next stage of ownership and management.

Key elements to an effective transition plan include: • A management strategy. This includes a clear structure, role descriptions and a system for accountability. It addresses the selection of future leadership, provides for appropriate training and development based on the needs of the business and individuals, and creates an orderly succession plan.

• An ownership plan. Such plans typically must accommodate the owners’ and their families’ tax and financial goals and ensure those goals are met to the fullest extent possible. They address the income needs of the senior generation and treat all stakeholders fairly while also promoting business continuity.

• Business direction. The success of both the management and ownership plans depends in part on a sound business strategy, including the mission and goals of the organization.

QUESTIONS AND MORE QUESTIONS The development of a feasible transition plan requires serious dialogue among owners and key managers of the business. They must openly discuss important issues that will put their individual needs and goals, and those of the business, on the table for discussion.

Key questions include: • Management succession. What are the senior generation’s career goals? Do they intend to work indefinitely? How do senior

ABOUT THE AUTHOR Craig Braget has more than 14 years of public accounting experience, including helping clients with tax compliance, audits, regulatory issues, mergers and acquisitions, S Corp conversions and marketing consultation. For more information, contact him at craig.braget@rsmi.com.

leaders see their role changing as they move toward retirement? Who among the younger generation aspires to work in the business and lead it? What training and mentoring would benefit other identified owners?

• Ownership transition. Do all current owners understand the present ownership structure of the business? Does the group want to share the economic benefits of the business with key non-family personnel who are involved in management? What are the senior generation’s ownership goals for the business? Is there an ownership transition plan in place or in progress?

• Business direction. What is the current ownership’s long-term vision for the company? What is the next generation’s vision? Has the company done formal strategic planning? Under what circumstances would the owners consider selling the company? Is the attitude about selling the same or different among generations?

Asking and answering these and other questions can be challenging, time consuming and emotionally draining. Some group members may have stronger opinions, hidden goals or different emotionally attachments to the business than others. Dynamics among the ownership group may foster open communication — or obscure it.

Successfully achieving diverse goals and objectives demands a strong quarterback, an outside consultant who can build an effective transition plan that addresses issues from business strategy to estate planning to tax management — as well as family relations.

This consultant can bring all the players together, draw out their objectives, walk them through their alternatives and engineer a successful drive down the field of life and business.

Starting these discussions early and implementing aspects of transition gradually can support and strengthen both business and family relationships.

IN BUSINESS/NORTH IOWA & SOUTHERN MINNESOTA ■ 19

JUNE 2008

BUSINESS SUCCESSION

Respect and Communication They can ease any problems in handing down a business

By ANGIE DETERMAN Mason City

M

My family is entrenched in a multi-generation electrical business started by my husband’s grandfather. Our oldest son is the fourth generation to work for it.

Through the North Central Iowa Growth Partnership, I’ve completed existing-business visits with companies in our area that are also family owned and family run businesses.

Our area also has businesses that aren’t family owned but adhere to the age-old advice, “Take care of your employees as if they are family.”

Some businesses do not allow multiple family members to work for them, and other local longtime businesses employ second- and third-generation family members Successfully running any business is challenging but to do it with family members can add another layer of complexity to the challenge.

Even television has written a family business into a story line with the show “Brothers and Sisters” in which siblings, an uncle and a past mistress of the deceased founder continue the family winery business.

A RECENT edition of Family Business

FOR ALL YOUR STEEL NEEDS CONTACT

2911 4th St. SE, Mason City, IA 50401

1-641-424-3639

Albert Lea

STEEL, INC. SERVICE CENTER 1126 S. Broadway, Albert Lea, MN 56007

1-507-373-5315 Fax 1-507-373-5315

Magazine focused on the Ping golf club company. The article highlighted the rocky course of succession at Ping as John Solheim turned around his family’s legendary golf club company. But according to the author, Dave Donelson, Solheim’s biggest challenge was getting his father to loosen his grip.

Succession planning and its timing are difficult in any business. In a family run business, career path pro-gression becomes more difficult and can draw the emotion card into the scenario. The “mom always liked you best” aphorism certainly has the opportunity to surface. If non-family members are employed, this can further complicate the process.

Who should be the business’s CEO — chief emotional officer? Advisers say that the emotional health of a company is as important as the financial health.

INTERPERSONAL COMPLEXITIES arise over pecking order in a family and certainly can trickle into the work place.

Inlaws, outlaws, brothers, sisters, parents and children — how can you not let business affect the family in some aspect or another?

The very things that are important in having the right person in a position in any business do not change in a family

ABOUT THE AUTHOR Angie Determan is interim executive director of the Mason City Economic Development Corp. and North Central Iowa Growth Partnership. business.

But what happens if the right person is not a family member? I have seen families develop advisory boards of non-family members to bring another perspective to the decision process.

Made at the kitchen table or the board room table, the decisions, the trials and the successes of a business can be inherently more fun with family.

Members of a local family used to have coffee together every morning before going to work. Maybe this daily ritual forced them to adopt the adage of married couples not going to bed at night mad to their business relationship. How do you stay mad at someone that you have to sit across from each morning?

Perhaps the keys to success in a family business are respect and communicating.

MECHANICAL AIR SYSTEMS COMPANY 2417 South Federal Ave, Mason City, IA 50401 641/423-7032 Mechanical Contractors and Engineers, Engineering and Design Services, Chillers, Boilers, Hydronic Piping, Plumbing, Maintenance Contracts, Process Piping and Custom Steel Fabrication, Heating, Ventilation and Air Conditioning.

Huber Supply Co. Inc. Location: 1527 N Federal Mason City 641-423-9115 115 E Vine Owatonna, MN 507-444-0533

How long have we been in Business?

Huber Supply Company has its beginnings way back in 1939. We are now in our 4th generation of serving you.

Our Early Beginnings

What we do: We provide welding equipment, oxygen and industrial supplies to businesses, manufacturers, governmental agencies and farmers in northern Iowa and southern Minnesota.

Customer Service - Sales Doug, Sam, Mike, Jeff, Brad

How do we do this?

Our business is built through great customer service and extremely high quality products.

Customers know they can depend upon us for dependable and on time deliveries, a well stocked inventory and very knowledgeable and dependable people.

What sets us apart?

Customer Service - Office Back Row: Noreen, Loren, Kristie, Cal Front Row: Diane, Ashley, Nicole

We are a family owned business with a commitment to customer service. Many of our customers have come to depend upon our team because of our capabilities in problem solving and good advice. That is another reason we have so many loyal customers. Huber Supply phones are answered by friendly people, normally on the first ring. We are “old school” as far as service, quality, and no added charges, but cutting edge with our new E-Commerce site.

Our most important asset A very experienced and knowledgeable staff

Why do people do business with us?

High quality products such as Lincoln, Miller, Milwaukee, Esab, Smith Walter & Sait. We aren’t happy unless our customers are 100% satisfied with us.

Customer Service - Delivery James, Brian, Dave Customer Service and Production Rod, Jamie, Brian

IN BUSINESS/NORTH IOWA & SOUTHERN MINNESOTA ■ 21

JUNE 2008

Q&A

EUGENE SUKUP Patriarch of Sheffield grain equipment company talks about its history, his family and a potential threat to the firm

By JOHN SKIPPER Of In Business

Sukup Manufacturing is located in Sheffield and has more than 400 employees.

S

SHEFFIELD — Sukup Manufacturing Co. is a family owned and operated company that manufactures a full line of grain storage, drying and handling equipment, as well as a line of implements.

Sukup products include grain bins for both on-farm and commercial storage; grain dryers for on-farm and commercial operations; axial and centrifugal fans and heaters; stirring machines; unloading equipment; bin floors and supports; drive-over hoppers; grain spreaders Airway Tubes; cultivators; flail shredders, a wild game food plot planter; and grain drills.

Eugene Sukup, 79, Sukup founded the company and is chairman of the board.

A son, Charles, is company president and another son, Steve, is a vice president.

Recently, Eugene Sukup reflected on how his business has succeeded in North Iowa and why he never considered moving to a larger area.

Q. When you started in business 45 years ago, how many employees did you have and how big an area did you cover?

A. We started with three employees — and two of them are still with me. The third one died about six years ago of Lou Gehrig’s disease but he was still with me when he died. Our coverage area was all over the country.

Q. How many employees do you have today, and what is your coverage area?

A. Today, we have more than 400 employees and we are all over the world.

Q. In addition to providing a product, you are providing a living to

Photo courtesy Sukup Manufacturing

more than 400 people. That’s quite a responsibility, isn’t it?

A. It’s a tremendous responsibility. We are feeding them and their families. You get to know your employees. It becomes a family. We go to their weddings. We go to their funerals. We’ve got third generation of families working here. The easiest thing to do is to hire somebody and the hardest thing is have to let somebody go.

Q. As the company grew, did you ever think of leaving Sheffield?

A. Not really. We have farm land here and we have a good banker. That sounds funny but it is very important. Bankers can make a tremendous difference in how your business goes. Also, Sheffield has always had manufacturing businesses.

It’s been a good area for manufacturing.

Q. How do the national and local economies affect your business — and what can you do about it?

A. It’s a funny thing, how it can change.

Like this ethanol thing. It encourages grain production. It used to be that everyone was talking about conservation. Now they’re trying to plant on every acre they can.

It’s the kind of thing you can’t predict.

You get together and try to figure out what the economy’s going to do. Half of you guess right and half of you guess

wrong. And you move on and do the best you can.

Q. What’s been the biggest plus for you in your business?

A. I’m 79 years old. I have two sons in the business and four grandchildren in the business — and they all love it. And my wife has an office right next door to mine. You can’t knock that. That’s the greatest satisfaction.

Q. What’s the biggest threat to family-owned businesses?

A. The biggest threat is the inheritance tax. Look, we’re feeding 400 families here.

When the time comes, are the boys willing to borrow the money to pay the inheritance taxes? Because unless something changes that’s what it’s going to take.

In 2011, the top tax rate goes up to 55 percent and in our case, our estate liability would be between $15 and $20 million.

The only way for the boys to pay it would be to sell the business.

A lot of politicians don’t realize the impact of the inheritance tax but it’s there.

Q. What advice would you give to someone thinking about starting their own business?

A. Love what you’re doing — and pray a lot.

22 ■ IN BUSINESS/NORTH IOWA & SOUTHERN MINNESOTA

JUNE 2008

COMMENTARY

Teaming succeeds in uncertain times

By SCOTT SHELLER Director of Business Development, Henkel Construction Co., Mason City

T

Today’s news is filled with gloom and doom.

Cries about falling home prices, rising fuel prices and rising food costs have created an atmosphere where people feel anxious, tentative and even apprehensive.

Building projects in this environment obviously involve risk, but those risks are just as evident when the economy is rosy.

Ironically, uncertain times often offer the greatest opportunities. The trick, as in every other environment, is to manage your risks and costs effectively.

The secret is great planning which is best accomplished by teaming — assembling a group with experience in all aspects of your project and incorporating their input from early concepts right up to moving in.

Traditionally, design and construction happened in sequence. After a design period involving only the owner and designer, the project would move toward competitive bidding.

With a low bidder established (assuming the project was within budget), construction could begin, but when costs were over budget the process had to be repeated.

WHEN BUILDINGS and systems were fairly basic, energy was cheap and change was slow, this process was acceptable.

Even today when projects are small or simple and straightforward, traditional methods, although slower, will get a project built.

The problem is there are very few instances these days where needs are basic, buildings are simple and time doesn’t affect cost.

Technology is changing businesses and building systems simultaneously at a rate that no individual can possibly keep up with.

In fact, communications, life safety and environmental management systems are changing so rapidly that only the firms developing them can truly keep up.

That’s where teaming comes in; including experts in every critical area ensures thorough evaluation from many view points.

The outcomes inevitably are more creative, less expensive, higher quality and more efficient to construct.

Each participant advises the team about options, associated first costs, maintenance costs and risks inherent in their particular

field, granting clients in-depth analysis at every step in the process.

During the concept phase, broad systems such as the building structure, exterior components and mechanical systems can be analyzed thoroughly and quickly to determine the most efficient and cost-effective options to incorporate.

As designs progress, material options are evaluated to ensure best value and minimize long-term maintenance Sheller costs.

Finally, as individual construction details are developed, team members offer ideas on how to ensure the physical construction can be accomplished easily without negatively impacting design.

Clients still have to assume risk, but they are allowed to make extremely wellinformed decisions and manage their costs from the beginning instead of reacting to them at the end.

sionals into one seamless team has been a huge success.

THERE ARE numerous advantages to teaming, but the top five are as follows: 1. Faster project delivery saves finance costs and allows the facility to begin generating a positive return much faster. a. Construction can begin as soon as the structure and exterior have been designed instead of waiting until the final wallpaper has been chosen. b. Special components with long delivery times can be ordered early to avoid potential delays during construction.

2. Existing operations are protected as special phasing is planned before construction starts, minimizing interruptions.

3. Projects are less expensive because they are delivered faster, and because they have been designed to be attractive, exciting, and functional while at the same time efficient to build.

4. Higher quality and lower maintenance costs are achieved because experts who maintain the systems daily have helped ensure the best choices have been made for the client’s needs.

5. Risks are drastically reduced for all parties due to a much better understanding of expectations and the work expected.

Iowa is one of only seven states that have not allowed design-build to be used in publicly financed projects, but for private owners and business people, combining the expertise of design and construction profes-

Everyone knows us for our new home projects now everyone is finding out about our commercial & industrial projects!

Let us show you our expertise in assisting you with your next project.

Additions, renovations, remodeling, we can meet all your project needs.

EVERYONE KNOWS there is no perfect project but teamwork has been a successful concept in every endeavor known to man and construction is no different.

At the end of the day, just as it’s been for the last 100 years, successful businesses can’t afford to be afraid when there are clouds on the horizon.

They must be careful but continue moving forward to be prepared for opportunities that surface when skies clear.

Design-build creates a team atmosphere where design, construction, purchasing, and risk management share equal responsibility for project success and delivers the real time multi-dimensional analysis needed to maintain momentum safely in uncertain times.

— Scott Sheller is the Director of Business Development at Henkel Construction Co. For more information, go to www. henkelconstruction.com.

If you want to build it, we will come!

LARRY ELWOOD CONSTRUCTION 641.423.3261

IN BUSINESS/NORTH IOWA & SOUTHERN MINNESOTA ■ 23

JUNE 2008

TOOLBOX

Make your meetings more effective

By JOYCE GANNON Pittsburgh Post-Gazette

Y

You walk out of the staff meeting your boss holds every Thursday morning, head to the company cafeteria for coffee, and once again find yourself discussing with co-workers how little the 45-minute gathering accomplished.

That scene plays out daily in organizations large and small as workers, many of them juggling more duties on tighter deadlines because of economic cutbacks, wonder why so much time is wasted in meetings.

“We find meetings typically are set up for failure at the outset,” said Channing Rollo, director of business identification at Proudfoot Consulting Co., an Atlanta management consulting practice. “Nearly half (of meetings) don’t have sufficient preparation, clear agendas or objectives.

People sort of walk in unprepared, so everyone’s time is wasted. We all know this from our day-to-day lives. We walk in and say, ‘There goes an hour.’”

IN A STUDY of meetings at 235 companies worldwide, Proudfoot found fewer than half, or 41 percent, had an appropriate agenda set before the meeting took

place; 38 percent clearly followed and focused on the agenda; and only 13 percent had a follow-up action plan that was reviewed before the meeting concluded.

Part of the reason meetings frequently fizzle is that managers or team leaders who organize them forget the fundamentals, said Ruth Parkinson, marketing manager in Proudfoot’s London office who authored the study.

“There is no agenda set, no time limit set, people don’t read the action points when they come out, people arrive late, and some are taking phone calls during the meeting.”

Glenn Parker, a Skillman, N.J., team building consultant and co-author of the book, “Meeting Excellence: 33 Tools to Lead Meetings That Get Results,” said meetings have become less effective because there are more being held.

“There are many more organizations using teams to get the work done. So one of the ways teams get work done is to have meetings. And with more meetings, there’s more likelihood of bad meetings.”

Among the most critical component to achieve better meetings, Parker said, is planning for goals the group needs to accomplish, “instead of just a list of things we want to talk about.”

M i k e ’s Custom Sound

Continued on next page

Area Rugs ~ Oreck Vacuums Ceramic ~ Laminates ~ Wood

SALES ~ INSTALLATION

We carry ALL VARIETIES OF FLOORING

Mike Arens

Serving Northern Iowa Since 1965

OVER 30 YEARS EXPERIENCE Email: mikescustomsound@netconx.net

ANOTHER RECURRING problem, he said, is keeping the meeting on track.

“One of the biggest complaints we found at Novartis was that people go off on tangents and as a result, time doesn’t get managed well and some things don’t get considered because people have to leave and go to the next meeting. ... So people walk out saying, ‘I wasted my time.’”

To prevent that, he advises the person conducting the meeting to open it by stating the key outcome the group needs to address, sticking to the agenda, and summarizing the action plan before the meeting wraps up.

And what about some of the most annoying elements of meetings — the persistent late arrivals and cell phone interruptions?

“My rule of thumb is that you turn everything off during a meeting,” Parker said. “Or you turn the phone to vibrate,

Bring New Life to your Home or Office!

LCD, Plasma, Surround Sound Systems

641-425-4465

“Every meeting should have a purpose or what we call a ‘key meeting outcome.’

What is the one thing we need to get done to walk away and say that was a successful meeting? That should be on your agenda.”

Mason City Tile & Marble M a s o n C i t y, I A 6 4 1 - 4 2 3 - 6 3 9 5 w w w. s p a t i a l d e s i g n s . c o m

1416 18th St. S.W. • 423-3852 Hours: Monday 8 - 8; Tuesday - Friday 8 - 5

24 ■ IN BUSINESS/NORTH IOWA & SOUTHERN MINNESOTA

JUNE 2008

TOOLBOX

Avoid business pitfalls

By BRUCE FREEMAN Scripps Howard News Service

D

Dear Professor Bruce: I am really serious about starting my own business but I am nervous about making some big mistakes early on and paying dearly for them.

What advice can you give on some of the biggest pitfalls I should avoid?

Answer: Sometimes the road not taken is as important in achieving your goals as making the right choices on the path to success.

When we (co-author Karin Abarbanel and I) talked to seasoned entrepreneurs for our new book, “Birthing Bruce the Elephant,” they Freeman: The Business were eager to share their advice.

Professor Since knowing what not to do can push you up the startup curve faster, I’d like to share what we learned about three big pitfalls that the women we interviewed pinpointed. Avoiding even one of them during your launch will save you time, money and stress — and definitely increase your chances of success.

Pitfall 1 — Romanticizing being your own boss. As you launch your venture, it’s tempting to fantasize about how liberating it will be to be your own boss. If you’ve been a corporate employee for much of your career, then the idea of having the freedom to call all the shots can seem

especially appealing. But it’s very important to have a clear-eyed view of the time, energy and commitment that working for yourself will take. If your vision of being an entrepreneur is drastically out of sync with the actual day-to-day demands of your startup, you can quickly lose your drive and enthusiasm.

Pitfall 2 — Overspending due to image anxiety: Of all the traps you can fall into during your startup, being overly self conscious about your image is probably the biggest. It can lead you to overspend, over promise and overextend yourself. You become vulnerable to this trap when you confuse image with professionalism.

Doing this can be extremely costly, not only in dollars and overhead but in the anxiety and stress it creates.

Pitfall 3 — Underpricing your products or services: Women actually have a higher success rate at running businesses because they are very service oriented. At the same time, research shows that women tend to undervalue their time, talent and expertise when it comes to pricing.

Fall into this trap and you can find it hard to dig your way out.

Pricing properly so you can operate profitably is critical to launch success. So talk to industry experts or SCORE advisors, compare pricing strategies with other business owners, test price points, find a mentor — do whatever it takes to get it right.

For further information, visit www.birthingtheelephant.com.

When it comes to TRUE

REPRODUCTION, we like to consider ours some of the very best.

PRINTING, that is.

714 S. Delaware | Mason City | 424-2623

• General Contractors • Design-Build • Construction Management

Meetings/From Page 23 because when you’re here we want you to be here unless your wife is expecting a baby. Part of etiquette also is to set the cultural tone. Meetings should start and end on time. It’s disrespectful to others if you wait 15 minutes for others to show up, and those who normally show up on time say, ‘What am I doing here?’ ” While many workers — and some managers — might dream of a world without meetings, those who have studied meetings don’t expect that to happen anytime soon.

“I see more of a proliferation because that’s how work is getting done,” Parker said. “Most companies have business interests all over the world. How else are you going to work with people if you can’t communicate with them?”

Said Parkinson: “We’re not anti-meeting per se. Companies just need to be clear about people’s roles and expectations. As humans, I think we need to meet and talk.”

• Joyce Gannon can be reached at jgannon@post-gazette.com.

Celebrating Fifty years of building excellence!

Clear Lake, IA 641-357-2283

Ankeny, IA 515-289-0720

www.deansnyderconst.com

IN BUSINESS/NORTH IOWA & SOUTHERN MINNESOTA ■ 25

JUNE 2008

TOOLBOX

In pursuit of disabled workers Good for the worker, good for the company

By ANN BELSER Pittsburgh Post-Gazette

P

Physical disabilities, which can make working an extra challenge, make looking for work especially discouraging.

The statistics don’t provide much reason to be optimistic.

In 2004, the number of adults who were 18 to 64 with a work limitation who were employed was 19.3 percent.

And the number of people in the same category with incomes below the poverty line was 28.2 percent, according to statistics compiled by Cornell University researchers working with government figures.

Getting people with disabilities to work is both good for them and the companies that employ them, said Dana Egreczky, the vice president of work-force development for the New Jersey Chamber of Commerce and the president of a new job-search Web site for people with disabilities.

Accessibleemployment. org is a Web site that, though started in New Jersey, has gone national to link companies to potential employees who happen to have disabilities.

Egreczky said the Chamber started the site because so many of its members were national companies that were

seeking diversity among their employees and found they were lacking in employees with disabilities.

“A diverse work force helps

you work and sell to a diverse customer base,” Egreczky said.

“There are many, many disabled folks who have highContinued on next page

Business Insurance and Employee Benefits Protection & Security Since 1921 641.421.8000 or 800.247.0713

25 West State Street - Upper Level Mason City, IA 50401

www.1stinsurance.com

Roger Bang, C.L.U. Casey Callanan Kelly Draheim Kendall Lundberg John Moran Tel Pappajohn Dick Price, C.P.C.U.

26 ■ IN BUSINESS/NORTH IOWA & SOUTHERN MINNESOTA

JUNE 2008

Disabled/From Page 25 level skills.”

The Web site is still focused on employment in New Jersey and has listings for 326 jobs, many of which are in medical fields, but the site is designed to be able to handle the entire country with searches that can find any key word in a listing.

“There is not a single company on the board that isn’t doing something nationally or internationally,” she said.

Egreczky said her research has shown there is a need for the site because there are currently 1.25 million Americans with disabilities who are looking for work.

Rick McWilliams, a program manager at the Pittsburgh-based Three Rivers Center for Independent Living, said the inability to get a job is not the barrier that keeps many people from working.

McWilliams, 47, of Penn Hills, Pa., said many are afraid to give up federal health benefits and Social Security insurance.

After 20 years of working at the center, he is earning a college degree at Carlow University in Pittsburgh and his senior thesis is examining the question of why,

2008 NORTH IOWA

UP IN SMOKE BBQ

JULY

25-26

2008

if there are so many supports to help people with disabilities get jobs, more aren’t working.

He said there are attitudes in society that people with disabilities can’t work, but that is the lesser of the problems.

The bigger problem, he said, is getting past the fears of trying.

“Sometimes they’re afraid to work, they don’t think they can do it,” McWilliams said.

McWilliams, who has been unable to walk since he was 16 because of a spinalcord injury, said he has been without the traditional government safety nets for years and wonders what would happen if he lost his job.

“Most employers don’t look past the disability to see the person’s skills and qualifications because they are afraid of the cost it will take to accommodate those disabilities,” Eric Smith, the associate director of the Center for Accessible Technology in Berkeley, Calif., said. “But really two-thirds of those accommodations cost less than $500 and nearly a quarter cost nothing.”

According to the federal Department of Labor’s Job Accommodation Network, more than half of the employers surveyed said the returns on each of the accommodations made was an average of $5,000.

And, while the Americans with Disabilities Act mandates that employers cannot discriminate against people because they have disabilities that can be reasonably accommodated, the job Web site makes it possible for companies to reach into a community that traditional recruiting might not reach.

“There’s a pent-up demand for this we’ve only begun to tap,” Egreczky said.

• E-mail Ann Belser at abelser@postgazette.com.

•••

On the Internet: Iowa Workforce Development: http://www.iowajobs.org/ Minnesota Workforce Centers http://www.mnwfc.org/ Accessible Employment: http://www.accessibleemployment.org/

THEY MAY BE CUTE THEY MAY BE SMALL BUT THEY ARE A HAZARDOUS MATERIAL

[ save the date ] The 5th Annual

UP IN SMOKE BBQ JULY 25-26, 2008 East Par k, Mason City Properly dispose of your Compact Fluorescent Light Bulbs at the Landfill of North Iowa’s Household Hazardous Materials Regional Collection Center (RCC). Small fee charged for businesses and appointments are required.

Call 877-LANDFIL

www.globegazette.com/bbq MORE REPORTERS .. MORE NEWS

15942 Killdeer Ave. • Clear Lake, IA 1-877-LANDFIL • www.landfillnorthiowa.org

IN BUSINESS/NORTH IOWA & SOUTHERN MINNESOTA ■ 27

JUNE 2008

TOOLBOX: Book Review

Have you hugged your employees today?

By ELWIN GREEN Pittsburgh Post-Gazette

T

The title of Jack Mitchell’s new book for business owners and managers is nothing if not provocative. “Hug Your People” sounds like a recipe for being regarded as eccentric at best — and at worst being slapped with a lawsuit for sexual harassment.

But in fact, Mitchell is counseling more (or less) than just throwing your arms around people. As his Web site, www.hugyourpeople.com, puts it: “A hug is not just a physical embrace. It can be different things for different people at different times.”

Some examples of a “hug”: giving a firm handshake or a warm hello, swapping the latest joke, opening early or staying late with someone to help him finish a project.

Mitchell’s philosophy could be summed up by saying, “Play nice.” And in fact, Mitchell talks about building a “Niceness Culture” within an organization and offers five principles for doing so, which he boils down to one word each: nice, trust, pride, include and recognize.

• “Nice” starts with hiring nice people, and looking for that quality before looking at skills: “It’s very rare that someone with great skills can transform himself from a nasty to a nice person,” he said.

• He calls trust the most important principle: “Without it, you don’t really

Now In Our 3rd Generation Of Serving North Iowa

have anything.”

• Pride is the sense of being an integral part of the business, or as he says of his employees, “They feel they are the store.”

• “Include” means involving employees in company strategy and decision making. “Involve everyone and everyone will feel invested in the outcome.”

• “Recognize” means acknowledging employees in ways beyond showing them the money.

The book is largely based on Mitchell’s experiences as chairman and CEO of Mitchells/Richards/Marshs, a three-generation family business that operates men’s and women’s specialty stores in Connecticut and New York. It’s also a follow-up to his first book, the 2003 best seller “Hug Your Customers.”

Mitchell concedes that much of what he has to say could be considered common courtesy and common sense. The problem, he said, is that they are not so commonly practiced.

“I think it’s perhaps that a lot of people think it’s about being tough and rough,” he said. “I think there are businesses that are doing this, but there’s not a lot taught in business schools about this type of caring environment.”

Jim Dittmar, a professor in the department of leadership studies at Geneva College in Beaver Falls, Pa., welcomes

Giving Your Printing The Personal Touch Of A Family Owned Business

26 6th St. SE • Mason City, Iowa • 423-2473

Where Quality Service & Fair Price Meet Since 1968

714 S. Delaware | Mason City | 424-2623

Mitchell’s message.

“We still have a very deep legacy of a command-and-control form of management and leadership that began in the early 20th century with Frederick Taylor’s view of scientific management,” he said. “A very strong legacy that we are trying to displace with a view of people as individuals who bring very particular strengths to the workplace.”

Jay Liebowitz, an associate professor in the John F. Donahue Graduate School of Business at Duquesne University in Pittsburgh, said that while he was not familiar with the book, “I like the idea,” and noted that no fewer than five other books with similar themes have been published since 2002.

“All of these books convey the importance of talent management — that in our global knowledge economy, company executives need to realize how important their people are to the success of the business.

“In general, business people have one of three philosophies: shareholders come first, customers come first or employees come first. I firmly believe that companies that carefully hire good people and then put them first by training them, developing them, appreciating them and rewarding them ... those employees will do a fabulous job for the customer.”

28 ■ IN BUSINESS/NORTH IOWA & SOUTHERN MINNESOTA

JUNE 2008

TOOLBOX: Trends

‘CHECK IN THE MAIL’ SYNDROME How some small businesses are handling late payers in these tough times Many small business owners are contending with some painful fallout from the economic slowdown: customers and clients who are taking longer to pay.

Often, slow payers are also struggling with receivables that aren’t coming in, and so they can’t pay because their own cash flow is suffering.

Diana Ennen, owner of Virtual Word Publishing, a publicity firm based in Margate, Fla., said she first started seeing a slowdown in payments about six months ago.

“In the last four months, it’s gotten really bad, and almost at a critical point,” she said.

When clients are behind, Ennen said she’s careful about how much new work she’ll do for them.

“I try not to get too far in advance, and I have to see some payment,” she said. “You can’t do a lot of work now and hope the payment will be there.”

She has other ways of protecting her receivables — asking for a retainer or a credit card number, so she can be sure she’ll be paid. Ennen said that because most of her work is done via the Internet, and she never actually sees her clients, “There is more of a tendency for the ‘check is in the mail’ syndrome.”

But Ennen also tries to help her clients, telling them, “Because I do publicity, let’s do something that would generate some money.”

ing and public relations agency.

Gibbs said she’s found that her approach depends on the client.

“Most of my clients are pretty longstanding clients ... I can understand their position,” Gibbs said. “With some clients, we’ve worked out a payment plan. We allowed them to get behind, now we need to get back on track.”

One client was paying quarterly, so ignoring two invoices put the customer six months in arrears. She’s had to tell the client to start paying, “or we’re going to continue to get more and more behind.”

This experience has taught Gibbs to change her payment policy. She’s now asking for a deposit up front, before the work even starts.

ENNEN’S LATE PAYERS tend to be people who work as independent contractors for companies which, because of the uncertain economy, suddenly decide to end the relationship. The independent contractor isn’t getting paid anymore, and in turn is having a hard time paying Ennen.

DANIELLE GIBBS estimates that about 40 percent of her clients are paying late.

“They’re having problems getting their customers to pay them, making them a little slow to pay me,” said Gibbs, who owns Minneapolis-based DVA Brand Communications, a market-

ROBERTA BERNHARDT, a partner with the accounting firm Citrin Cooperman in White Plains, N.Y., said small businesses need to have a systematic method of billing and a timeline for following up if an invoice hasn’t been paid. Running your billing in a haphaz-

By JOYCE M. ROSENBERG AP Business Writer

M

Ermer Insurance & Financial Services Bob Ermer

Rick Ermer

Call us today for all your financial and insurance needs...

Auto, Home, Business, MPCI, Hail & Farm, Life & Health

423-1805 113 N. Federal, Mason City, IA

Continued on next page

Federal Upholstering • Specializing in Home Cooking • Reasonable Prices • Breakfast & Lunch Monday - Saturday 7am - 2 pm Gene & Ruth Simon - owners Willowbrook Mall, Hwy 18 West Mason City, Iowa

641-424-2166

“Quality Workmanship Since 1930” COMPLETE UPHOLSTERING SERVICE

• Home • Auto/Trucks • Marine • Business • Antiques • Motorcycles • Custom work Mon.-Fri. 8:30-Noon & 1-5 PM After hours by appointment

423-8772 520 N. Federal, Mason City

BUSINESS/NORTH IOWA & SOUTHERN MINNESOTA ■ 29

JUNE 2008

TOOLBOX: Advice

New tactics to retain workers

By ANN BELSER Pittsburgh Post-Gazette

W

While employers are slashing benefits to save money, they are using other tactics to try to retain workers, according to a recent study.

In its “2008 National Study of Employers” the Families and Work Institute found that employees are more likely to stay with on the job if employers provide flexibility.

The study also found that while employers are dealing with the faltering economy by cutting benefits that directly take away from the bottom line, programs that cost money but improve the quality of life at the workplace, such as on-site child care, are not being reduced.

While 94 percent of companies still provide health insurance coverage for family members of employees, just 4 percent now cover the entire bill, down from 13 percent 10 years ago. Nineteen percent will not pay any of the bill to cover family members, which is up from 12 percent in 1998. For employees who receive health insurance, 34 percent have seen their costs toward that insurance rise in the past year.

Although health benefits have taken a direct hit, 31 percent of employers now offer health benefits for unmarried partners of employees, which is up from 14 percent 10 years ago. More employers, 65 percent, now offer Employees Assistance Programs to help workers

deal with psychological problems, which is up 9 percent over 10 years.

And while life has gotten better for new mothers at work, with 53 percent of companies now providing a private space for breast-feeding women to express their milk (up 16 percentage points in the past decade), fewer received their full pay for maternity leave. The study found that the percentage of companies that provided women with their full paychecks during their maternity-related disability dropped to 16 percent from 27 percent 10 years ago.

Another employer-paid benefit, the defined benefit pension plan, took a huge hit in the past decade.

The study found that 48 percent of employers provided that traditional pension plan in 1998, but that has dropped to 29 percent now.

In the past decade, employers have become more flexible in regards to when people get to and leave work with 79 percent of employers allowing at least some of their workers to alter their start times, which is up from 68 percent in the same study 10 years ago.

Yet employers are more reluctant to let workers shift from full-time to part-time and back while retaining the same position or level of employment. The current study said that in 2008, 47 percent of employers said they allowed employees to shift easily between full- and part-time, which is down from 57 percent in 1998.

Late payers/From Page 28 ard manner is a good way not to get paid on time — or, in some cases, not to get paid at all.

Bernhardt also said an owner should set a limit on how much credit or leeway a client can have.

And “when it gets up there, you need to let them know you won’t do any more work for them,” she said.

Like Ennen, Bernhardt recommended using credit cards as a way to get payment. She said customers are likely to agree because “they feel they have extra time to pay.”

Some owners might not want to pay the credit card processing fee, but Bernhardt

calls that “a small thing to pay to get your money right away.”

If the customer still isn’t paying, Bernhardt’s advice is to keep contacting him or her until you get that check.

“The squeaky wheel is the one that gets paid first,” she said. “If you’re the one that’s going to be firm about your collections, you’re going to be the one that gets your collection.”

And if they’re just not paying, and show no signs that they will? There’s always legal action, or collection agencies. You’ll need to balance how much you’ll get with how much you have to pay to get it.

The Economical Alternative to the larger delivery vans

2008 Chevy HHR Panel Van

5 Door 30 Miles Per Gallon Roomy Interior For All Your Deliveries

The Difference is Lake Chevrolet!

3005 Willow Creek CT, Clear Lake, IA 641-357-2612 or 1-800-469-3325 www.LakeChev.com

30 ■ IN BUSINESS/NORTH IOWA & SOUTHERN MINNESOTA

JUNE 2008

TOOLBOX: Hiring

Millennials have potential to reshape your workplace You may not like what they have to say all the time but these hip young workers can make positive lasting results within your company

By ROBERT RODRIGUEZ Fresno Bee

C

Cathy Frost didn’t know what to make of the new administrative assistant when she began suggesting ways to improve her staffing company.

“I thought, who is this person trying to tell me how to run my business?” said Frost, president of BennettFrost Personnel Services in Fresno, Calif. “I was offended.”

But Frost’s icy attitude soon melted as she realized her employee, Eloisa Valdez, 28, was just being herself: confident, articulate and technologically savvy.

And Valdez’s ideas were good, including creating an online job application to tap a larger number of potential recruits.

“Sometimes it isn’t just about having lots of experience,” Valdez said. “It is about having good ideas and having someone listen to you.”

VALDEZ IS A MILLENNIAL, a new generation of young workers.

Ranging in age from 21 to 29, they have the potential to create lasting change in the workplace because of the way they live, communicate and view their jobs.

And managing millennials, as Frost learned, can be challenging.

“I had to be open to change and accept criticism of the system we had created,” she said. “I also had to look at technology a bit different; it really forced me to see it through her eyes.”

A recent study by JWT, a New Yorkbased advertising agency, found that millennials, compared with other gen-

erations, place a higher value on work-life balance, expect their employers to adapt to them and are more likely to rank fun and stimulation as one of their top five ideal job requirements.

Ann Mack, director of trend-spotting for JWT, said millennials aren’t the type to

run out of the office when the clock strikes 5 p.m.

“They are equipped through technology to be on all the time,” Mack said. “They can be checking their e-mail and responding to someone in Shanghai as soon as Continued on next page

IN BUSINESS/NORTH IOWA & SOUTHERN MINNESOTA ■ 31

JUNE 2008

Millennials/From Page 30 they get up in the morning.”

AS A RESULT, millennials demand work schedules that provide flexibility.

Trish Moratto, 23, a public-relations professional in Fresno, says she doesn’t mind giving her clients access to her personal cell phone and having them call her during her off hours.

At the same time, she appreciates that her boss doesn’t ask her where she is every minute of the day.

“The work is always done and the clients are always happy,” said Moratto, of Catalano Fenske and Associates. “And that is what is important.”

Millennials also like lots of positive strokes, are chronic multitaskers and can be outspoken to a fault, experts say.

FRESNO STATE business management professor Julie Olson-Buchanan said much of millennials’ behavior has been shaped by their upbringing.

Many have had computers in their homes while growing up and are highly

skilled at using technology.

It’s also given them an added dose of confidence and contributed to their eagerness to share their opinions in the workplace.

Tate Hill, 29, said millennials enjoy sharing their thoughts on personal Web sites, listservs or blogs.

“Sometimes you don’t know if you are communicating with one person or 1,000 people,” said Hill, vice president of Central Valley Youth Leadership Institute in Fresno.

“And it doesn’t always matter. Some people are looking for the opportunity for self-expression.”

BUT MILLENNIALS don’t always know when to keep their opinions to themselves. Openly complaining and over-sharing can create conflict, experts say.

“They have a Wikipedia-like knowledge and can easily put forth their ideas, even debate their superiors,” Mack said. “But they also don’t know when to step back a

AT B-K LIGHTING in Madera, Calif., Angel de la Torre, director of human resources, says she occasionally reminds some of the younger production workers what is appropriate work behavior and what isn’t.

“It seems like whatever is in their heads comes out of their mouths,” De la Torre said. “And that isn’t always a good thing.”

As children, millennials grew up during fairly robust economic times, rode in cars with “Baby on Board” signs and believed they were always winners.

“It didn’t seem to matter if your Little League team came in ninth place, you still got a trophy,” Mack said.

“And as adults, millennials are wanting that same type of recognition in the workplace.”

Reach Robert Rodriguez at brodriguez@fresnobee.com.

Clear Lake Bank and Trust has been family-owned since 1941, when M.A. Arneson purchased controlling interest in the Bank. At that time, Bank assets were $1 million and the Bank employed 10 people.

Clear Lake Bank & Trust, “my” home owned bank.

Throughout the years, we have experienced extraordinary growth, but with all of the bank mergers and acquisitions in the recent years, Clear Lake Bank and Trust Company continues to be a strong, stable, and independent, locallyowned bank.

-Pete Hjelmsted

Clear Lake 322 Main Avenue (641) 357-7121

little bit and listen and learn from the experience of their elders. They know when to speak up; they just don’t always know when to shut up.”

Today, our three offices, in Clear Lake, Garner and Mason City, employ over 65 people and bank assets are well over $200 million but the Bank’s commitment to our customers and the communities we serve has remained unchanged.

Mason City 425 Tiffany Drive (641) 423-7121

www.clearlakebank.com “Voted Best Bank in North Iowa by Globe Gazette readers’ poll”

Garner Office 325 State Street (641) 923-3621

At Clear Lake Bank and Trust, you’re treated like family. We’re dedicated to providing customers the service they expect and deserve. We strive to be the best and are pleased to offer a great variety of convenient, as well as efficient, financial services.

We’re proud to say we have been here for you through three generations and we look forward to being part of your family for many years to come. We have the right people in the right places and we’re the right bank for you!

32 ■ IN BUSINESS/NORTH IOWA & SOUTHERN MINNESOTA

JUNE 2008

AND FINALLY ...

Are amenities and growth connected?

By MICHAEL C. MORRISON President, North Iowa Area Community College

C

Common sense would appear to support the notion that a region’s amenities should be associated with its ability to attract and keep businesses as well as a work force to sustain and grow the business community.

It seems obvious to most of us that people like to live in places that are fun, exciting, culturally rich and entertaining.

Fortunately, we can rely not only on our commonsense to answer such questions but a growing body of research continues to support the connection between a region’s amenities and economic growth.

Terry Clark’s study of 3,111 U.S. counties looked at the relationship between population growth and amenities.

Controlling up to 20 variables in a multiple regression analysis, Clark found that total county population is directly related to the county’s amenities.

College graduates are more numerous where there are fewer natural but more “constructed amenities.”

The elderly are the opposite: senior citizen population growth more highly correlates with natural amenities but less with constructed amenities.

Residents filing highly technology based patents live in locations with more of both natural and constructed amenities.

In a similar study David McGranahan found that rural population changes — as well as development of rural recre-

Suddenly the same old sales meeting seems different.

Whatever kind of get-together you’re having, you’d do well to get it together at our hotel. We have the facilities to handle small to very large groups. All banquet rooms ground level for easy accessibility.

For information call.

3041 4th St., Mason City

641-424-9494

File photo

Michael Morrison, a regular contributor to In Business, is shown upon being named president of North Iowa Area Community College. He has retired after spending 19 years at the school, the past seven as president.

Morrison said he and his wife, Pat, will eventually move to their lake home in Wisconsin. ation and retirement destination areasare all highly correlated to natural amenities.

North Iowa has wonderful natural amenities, but it’s also true that there is not much that a community can do to

change its natural amenities.

However, if we have the willpower we can progressively and strategically impact economic and population growth through the development and promotion of “constructed amenities.”

Clark’s study points us in the right direction — college graduates are more numerous where there are more constructed amenities.

The growth of the college graduate subpopulation base proves critical for the future of North Iowa.

In addition to promoting and supporting well-conceived plans to promote the uniqueness of North Iowa (i.e., Mason City’s Vision Iowa Plan), the needs of college graduates must be addressed.

In order to attract and keep this demographic group in our region we need to develop and implement progressive regional economic development initiatives that: 1) provide good-paying jobs that can compete with larger metropolitan areas and 2) construct the amenities that college graduates desire.

Yes, this will require investment as well as levels of collaboration and partnerships that heretofore have not existed; but such efforts are in the incubation stage.

The policy implications are clear. We must aggressively fund state, regional and local initiatives that promote and develop amenities and economic growth to attract and retain Iowa’s creative talent throughout all demographic groups.

Video Security Systems Access Control Wireless Computer Networks Business Telephone Systems Two-way radio sales and ser vice

Electronic Specialties, Inc. 2103 Highway 169 Nor th Algona 800-392-6659 www.electronicspecialtiesinc.com

Serving North Central Iowa Since 1961

NORTHERN IOWA and SOUTHERN MINNESOTA

QUARTERLY BUSINESS TO BUSINESS NEWS

Bruce Long

Sethanne DeGabriele

Chad Nyhus

Dean Portner

Barry Wangsness

Renee Bartling

Peggy Stephens

Jeff Sellner

Scott Sheller

Mary Ellen Andolino

34 • IN BUSINESS

Advertising Supplement

JUNE 2008

HOW TO

Making wine choices

By BRUCE LONG and CHAD NYHUS Hy-Vee Wine & Spirts One of the most asked questions is, “What wine should I buy?”

This question is asked almost daily whether for a gift or a suggestion for a wine to Bruce Long, pair with food.

Mgr. The standard answer today Hy-Vee West is, whatever you like to drink.

Wine & Spirits I tell people this, but then explain that food and wine are meant to go together, and the right wine with the right food makes each taste even better.

Simply put, red wine with red meats and red sauces; white wine with fish, chicken shellfish and white sauces. I also like to match wines to sauces moreso. Just because you have chicken doesn’t mean you always choose white wine.

If you were grilling chicken and finished at the end with a spicy barbecue sauce, a red wine like a spicy Shiraz or a zinfandel would go nicely with the sauce.

Sauvignon Blanc is a great choice with shrimp,

Effective January 1, 2007

Disposal Costs at the Landfill of

North Iowa will be: The Landfill of North Iowa’s service area includes the following counties and communities: Mason City, Clear Lake, Ventura, Garner, Klemme, Forest City, Joice, Rockwell, Thornton, Plymouth, Dougherty, Nora Springs, Sheffield, Kensett, Grafton, Manly, Hanlontown, Northwood, Rock Falls, Coulter, Hampton, Hansell, Geneva, Latimer, Popejoy, Swaledale, Meservey, rural Cerro Gordo and Franklin counties.

Our prices and tipping fees are among the lowest in the state!

CARS . . . . . . . . . . . . . . . . . . . .$13.00 PICKUPS, VANS, SUVS, MINI VANS . . . . . . . . . . . . . . . .$13.00 1st 1000 Lbs.($1.30 cwt over 1000 Lbs.) VEHICLES WITH TRAILERS . . . . . . . . . . . . . .$26.00/ton($26 min.)

DUMP & STRAIGHT TRUCKS . . . . . . . . . . . . . .$26.00/ton($26 min.)

PACKERS, ROLL-OFFS & SEMI TRAILERS . . . . . . . . . . . . .$26.00/ton TREES & BRUSH . . . . . . . . . . . . . .$13.00/ton($13 min.)

APPLIANCES . . . . . . . . .$13.00/each TVS/MONITORS/CRTS . . . . . . . . . . . . . . . . . . . . . .$13.00/each STAND-ALONE COPIERS . . . . . . . . . . . . . . . . . . . . . .$13.00/each PRINTERS/DESKTOP COPIERS . . . . . . . . . . . . . . . . . . . . . . .$4.00/each ANIMALS . . . . . . . . . . . .$10.00/each RUBBLE (clean,<12” pieces) - No charge GRASS & LEAVES . . . . . .No charge TIRES Passenger . . . . . . . . .$2.00 per tire Truck . . . . . . . . . . . . .$4.00 per tire Tractor . . . . . . . . . . .$10.00 per tire

but if you use a creamy white sauce like an Alfredo, I would probably choose a Chardonnay or Oregon Pinot Gris to match the heavier sauce.

Here are some wines and possible matches that you might enjoy, but remember, whatever sauce you use might change your Chad Nyhus choice.

Mgr. Red Zinfandel is great with Hy-Vee Drug barbecue and pizza with a red Store Wine & sauce. If the pizza has white Spirtis garlic sauce, try Sauvignon Blanc. I also like Sauvignon Blanc with garlic chicken, Mediterranean chicken and fish.

For richer seafood, try Pinot Gris or even a nice Viognier. Cabernet is a good choice with a big steak or other hearty dish. Try a merlot for meat loaf or a roast turkey.

As you can see there are many different choices.

Pinot Noir is probably the one wine that is the most food friendly overall. So if you are looking for that best choice, Pinot Noir might just be it.

Questions about wine choices? Please don’t hesitate to stop in and see us.

Wine Talk 2006 Columbie Crest Grand Estate Chardonnay Always a solid chardonnay and a great value for the price.A few years ago it was a top 100 wine voted by Wine Spectator magazine. Recently it was just awarded a 90 pt. score and a Best Value. Aromas of pear and apple with just a hint of melon.There is creamy butter on the palate and the finish is a balance of oak and caramelized sugar.

Try this Chardonnay with oysters, shellfish or a white creamy pasta dish. Come see us at Hy-Vee if you have a wine question. Enjoy your summer and don’t forget a nice refreshing white wine for your host when going to a party.

Bruce Long, Mgr. Hy-Vee West Wine & Spirits

Chad Nyhus, Mgr. Hy-Vee Drug Store Wine & Spirits

HOW TO

Manage your business waste materials product that says “Caution”,

By RENEE BARTLING, “Warning” or “Poison” on the label EDUCATION COORDINATOR, qualifies. Using the RCC also LANDFILL OF NORTH IOWA provides a record confirming how Businesses inevitably produce hazardous materials were disposed of. waste materials other than paper.

Contractors/businesses that Many of these wastes can also be separate their woodwaste from other managed and recycled in economical waste receive a discounted disposal and environmentally safe ways, for rate for the woodwaste.

The example: woodwaste is diverted and made into Electronics other products.

TVs, Computer Monitors, Tires/Appliances Printers and copiers can be “e-cycled” Tires may be disposed of for a for a small fee. fee.

Tires are reused for other Scanners, computers, keyboards, Renee Bartling products or as fuel. Appliances may input devices, video/surveillance be dropped off for a fee, for future cameras, fax machines, stereos, VCRs, salvage. cordless phones, DVD and CD players can be Educational Opportunities “e-cycled” at no cost.

The Landfill of North Iowa provides free Hazardous Waste Materials Businesses/contractors that meet the EPA educational services to businesses/contractors. requirements of a Conditionally Exempt Small Landfill field trips, Education Center tours, and Quantity Generator (CESQG) may dispose of presentations are provided at no cost. Offsite hazardous materials at Regional Collection Centers presentations are also available covering a variety of (RCC) for Household Hazardous Waste for a small waste management and recycling topics. Call 877disposal fee. The RCC collects fluorescent bulbs, LANDFIL for more information.

By managing wastes properly, businesses can ballasts, oil based paints, wood preservatives and strippers, aerosol cans, fuels, oil, antifreeze, batteries, help protect the environment, conserve natural and cleaning products just to name a few. Any resources, and save money.

JUNE 2008

Advertising Supplement

IN-BUSINESS/NORTH IOWA & SOUTHERN MINNESOTA • 35

HOW TO

Business Succession Planning

By DEAN PORTNER, CPA & SENIOR MANAGER Succession planning is a process taken to change control or ownership of a business in a planned manner. A successful succession plan is one that goes relatively unnoticed. There are two sides to a succession plan; the older generation letting go and the younger generation taking control. In order for the business owner to let go they need something to go to and to feel confident in their decision.

An interest outside of the business, such as traveling or a hobby will help them be more open to begin succession planning.

Additionally the successor must possess competent leadership skills and be willing and financially able to take control before succession takes place. Below are some tips and things to consider in succession planning.

Transferring a business is a personal matter and can be an emotional process for those involved.

Emotions are generally why succession plans are avoided. The owner is forced to confront their mortality and possibly unpleasant management issues in their successors leadership style and ability. The owner may not feel their children/successor are capable of continuing the business and doubt their success without supervision. Another issue is that the owner is too busy with day-today operations which delays planning until next week or next month and suddenly several years have passed. The owner may also fear their own lack of knowledge in planning for succession.

Identifying the stage of life you are in is the first step. Have you thought about retirement?

Is it in 5 years, 10 years, or 20 years? What do you plan to do once you retire?

The next step would be to identify your personal goals. What do you want for yourself and your family? Do you want to sell the business and use the proceeds to support your retirement? Is the business worth enough to support your retirement? Do you have children who are involved in the business? Are they interested in and possess the necessary skills to run the business?

Additionally, you need to make an analysis of your business. What stage is your business in? Is it growing? Is it providing enough income to support you and an additional business owner? If the business currently would not support an additional owner, what

can be done to increase the value? Time is a great ally. The earlier succession is considered and planned for, the likelihood of meeting your goals increases.

The business will need expertise in management, negotiation, sales and customer relations. Does your current staff have this expertise or the ability to learn the skills? Does this leadership come from your family, or will you need to hire non-family leaders? If the leadership is not with the family, do any key employees possess the leadership potential necessary to take control?

Succession planning with family members requires additional planning. How will the succession take place? The owner may consider gifting or selling or a combination of both.

There are estate and tax consequences to consider when gifting or selling. What will the family members role be during succession?

What do the children not involved in the business receive? These difficult types of conversations need to occur so that the siblings are fully aware of the intent and wishes of the parents.

A successful succession plan will acknowledge and deal with the changes and emotions involved.

The interest of the business must be first.

Difficult decisions must be made and communicated. The Portner, CPA & owners and others Dean Senior Manager involved must believe in and commit to the succession process while allowing sufficient time for the succession process to evolve. Choose the person with the best potential to succeed.

Working with a team consisting of your accountant, attorney, and financial advisor is very important.

To learn more about how Eide Bailly can help with succession planning please visit www.eidebailly.com or call 507.387.6031.

Experience a Successful Transition You’ve worked hard to bring your business to where it is today and now it’s time to start thinking about where it will go in the future. Planning for succession and understanding its complications will greatly increase the chances for a smooth transition of your business. The professionals at Eide Bailly can help you work through the process of establishing where you are now, where you would like to be, and how you are going to get there.

Many possibilities await you.

Call or visit our website to learn more.

Madelia | 507.642.8882 Mankato | 507.387.6031 w w w. e i d e b a i l l y. c o m

PEOPLE. PRINCIPLES. POSSIBILITIES.

36 • IN BUSINESS/NORTH IOWA & SOUTHERN MINNESOTA

What’s holding you back?

NIACC works to meet the needs of adult students.

Use NIACC to open the doors to the future you want.

1-888-GO NIACC www.niacc.edu

Advertising Supplement

JUNE 2008

HOW TO

Explore your options at school nationwide are 25 years old or better. At

By SETHANNE DEGABRIELE NIACC and in our area, adults are the NIACC fastest-growing population group.

Would you like to … * “You can’t teach an old dog like me * Improve your skills? new tricks.” * Return to work?

Studies have shown that learning can * Change careers? occur at any age. NIACC faculty have * Develop a new interest or skill? even observed that adult students who * Experience personal growth? bring life experiences and emotional * Expand your social opportunities? security to the classroom make excellent If so, you may want explore your students and are vital parts of a successful options! classroom environment.

Learning is a lifelong process, and Sethanne * “With work and everything else, I North Iowa Area Community College DeGabriele don’t have time for school.” works to meet the needs of adult Evening courses, online courses, students.

A combination of services is available for you to eight-week courses and more are available at NIACC. explore career, academic and success issues as you The college also has Community Education Centers continue your education. NIACC can meet the in Charles City, Garner, Hampton, Lake Mills and unique needs of students returning to seek new Osage.

Continuing Education @ NIACC options for the future.

The NIACC Continuing Education Division What’s Holding You Back? offers an array of non-credit opportunities from * “It’s too late to change careers.”

In the United States, most people make between customized business and industry training to three and five career changes and more than 10 job professional development and relicensure to personal enrichment classes for people of all ages. NIACC’s changes in their lifetime.

Continuing Education Division will open doors to * “I’m too old to go to college.”

More than 40 percent of college students the future you want.

HOW TO

How to Select a Janitorial Service janitorial services. Always

By MARY ELLEN ANDOLINO request references and visit PRESIDENT facilities that are currently being MIDWEST NORTH IOWA serviced. Make sure you know JANITORIAL SERVICES, INC. how long the janitorial service Today more businesses are has been in business. Does the contracting janitorial services. A company have sufficient clean facility greatly impacts the insurance coverage? Also, check workplace environment by increasing to see if the company screens employee morale and providing a thier employees through safer workplace environment. A clean background checks and drug facility is a productive facility.

Mary Ellen testing.

Before pursuing a janitorial Andolino Lastly, schedule an interview service make a list of your specific with the operations manager or cleaning needs. For example, does your business need everyday or bi-weekly supervisor who will actually be involved in the service? Do you need special services like cleaning of your facility. Do not just meet carpet cleaning or floor maintenance? These with the salesperson whose only goal might be are some things to consider before contacting to sell the service, and may not be available once the contract is signed. Does the company a janitorial service.

Secondly, prepare a budget and remember guarantee satisfaction?

One last bit of advice, don’t fall into the you get what you pay for. The cheapest bid is not always the best. If the bid is too good to trap of automatically accepting the lowest bid be true - it is probably not the best janitorial as stated before. Janitorial services that pay their employees decent wages have less service.

Thirdly, get bids from at least three employee turnover. This benefits everyone!

Industrial Commercial

Professional Cleaning Services With Local Expertise Serving customers of all sizes...

Call 423-8796 for estimates

Midwest N. Iowa Janitorial Services, Inc. Owned and Operated by Mary Ellen Andolino Targeted Approved Business with State of Iowa

I have been in Business for 40 years!

JUNE 2008

Advertising Supplement

IN-BUSINESS/NORTH IOWA & SOUTHERN MINNESOTA • 37

HOW TO

Information you need to make a sound buying decision

By PEGGY STEPHENS Of course, your patients will love the way Zon looks. But Zon is so much more.Extensive research went into making Zon the most comfortable receiverin-canal device on the market. Even more important, Zon is the best in its class, offering better feedback cancellation, greater headroom,more d i r e c t i o n a l i t y, improved high-frequency audibility, seamless environmental adaptation, and a more accurate fit.

At the heart of each Zon hearing instrument is our Proprietary BluWave Signal Processing designed to maximize performance in even the most challenging listening environments our patients deal with today.

Only Zon offers Active Feedback Intercept (AFI), the industry’s benchmark in feedback elimination with up to 20 dB of added stable gain. This means Zon delivers more audible speech to more wearers, more often. In the open ear, Zon can provide listeners with up to 13 dB more gain in the high frequencies than the two-closest performing competitors in this class.

Every Zon comes loaded with Directional Speech Detector (DSD), an automatic system optimized by

BluWave Signal Processing to give patients the best performing directional system on the market today. The result: clear, audible speech in the almost any situation.

Fitting Zon is a great experience, thanks to Integrated Real Ear Measurement (IREM).

This easy-to-use feature increases both fitting accuracy and patient satisfaction. Zon is the only device in is class to offer real ear measurement built-in.

Peggy Stephens Starkey is proud to bring you 24 Years Experience Zon™, our best-in-class hearing solution developed with the evidence-based design approach you’ve come to expect from us. A triumph of art and science, Zon is the perfect marriage of industry-leading technology and patient-centric design.

Thanks to Starkey’s new proprietary BluWave™ Signal Processing, Zon features best-in-class feedback cancellation, superior directionality, seamless environmental adaptation and built-in real ear measurement, all wrapped up in small, beautifully designed exterior. And to prove it, we’ve included benchmarking data that explains why Zon is the best receiverin-canal device ever created.

In addition to its ergonomic shape, Zon is designed with our new HydraShield system which make the device 100% water resistant, regardless of the environment.

Make the decision to improve your hearing today and start living life to the fullest.

STEPHENS NORTH IOWA HEARING AID CENTERS 2428 4TH ST SW, MASON CITY, IA 50401 641-424-1111 OR 800-640-1111

Stephens North Iowa Hearing Aid Center Plaza West Mall by Hy-Vee 2428 4th St. SW, Mason City Monday-Friday 9AM-5PM Osage ~ 2nd & 4th Wednesday Britt ~ Every Thursday 9-11AM Lake Mills ~ Every Tuesday 9-11AM PEGGY STEPHENS BC-HIS 23 Years of Experience

Licensed by State of Iowa Board of Health

W e ’ r e H e r e To H e l p Yo u H e a r B e t t e r !

NORTH IOWA HEARING AID CENTER 800-640-1111 641-424-1111

www.stephenshearingaidcenters.com

JUNE 2008

Advertising Supplement

IN BUSINESS/NORTH IOWA & SOUTHERN MINNESOTA • 38

HOW TO

Staying Connected While You’re Out With six manufacturing facilities and over 80 service center outlets, Diamond Vogel Paints understands the need for instant communication from remote locations, without the hassle of wires. They turned to Electronic Engineering for the solution. “Motorola’s Canopy has provided a reliable means of connecting our staff to our internal network. This has been very beneficial for responding to e-mail and accessing files while out of the office,” said Mike De Jong, Information Technology Director. Diamond Vogel Paints has been working with Electronic Engineering for almost one year and said they are very satisfied with the quick installation and responsiveness to their needs. “Canopy has run very well,” said De Jong, “and nothing seems to interfere with it’s operation.”

“Electronic Engineering really stood out because they were willing to stand behind their product 100 percent,” said De Jong.

Canopy provides a cost-effective expansion Farmers & Merchants Mutual Telephone Company was founded in 1938 to provide affordable service to their customers. And according to General Manager Rex McGuire, Motorola’s Canopy has allowed them to do just that- provide better service. “Canopy allowed us to expand our high-speed Internet and service territories in a cost-effective manner,” said McGuire. “Plus, we are no longer dependent on the other phone company’s cable plant.” Farmers & Merchants Mutual purchased Canopy last year, and have been working with Electronic Engineering for several years. McGuire said they use Electronic Engineering because “they have always gone out of their way to provide great service at a fair price.”

“Electronic Engineering made sure we

future,” said David Quisley, Feed Department Manager.

“We knew Electronic Engineering could take care of us for service and it has been the perfect match.” Quisley says Canopy has changed the way they do business. It has allowed them to network The perfect match, speed printers, print e-mail anywhere and reliability Barry Wangsness Northwood Coop Elevator Branch Manager, in the company, increase the Electronic quality of the printed materials was looking for a high-speed Engineering Co. and speed up the transfer data wireless product to connect three offices. Their current phone line from their outer offices.

“We would do businesses with technology was too slow and causing multiple problems. “When the Motorola Electronic Engineering again because the Canopy system came out, it was exactly product has performed exactly as what we were looking for. It exceeded in promised,” said Quisley. They offer good speed, had the benefits of doing what we products, knowledgeable personnel and wanted and had expendability for the excellent service.” were comfortable with the installation and operation of the equipment.” said McGuire.

“And, they’re just a phone call away if we need them because their service does not end after the sale.”

608 S. Delaware - Mason City 641-423-6818 or 800-343-2688

39 • BUSINESS/NORTH IOWA & SOUTHERN MINNESOTA

Advertising Supplement

JUNE 2008

HOW TO

Teaming Succeeds in Uncertain Times

By SCOTT SHELLER, DIRECTOR OF BUSINESS DEVELOPMENT Today’s news is filled with gloom and doom. Cries about falling home prices, rising fuel prices, and rising food costs have created an atmosphere where people feel anxious, tentative, and even apprehensive. Building projects in this environment obviously involve risk but those risks are just as evident when the economy is rosy.

Ironically, uncertain times often offer the greatest opportunities. The trick, as in every other environment, is to manage your risks and costs effectively. The secret is great planning which is best accomplished by teaming; assembling a group with experience in all aspects of your project and incorporating their input from early concepts right up to moving in.

Traditionally, design and construction happened in sequence. After a design period involving only the Owner and designer, the project would move toward competitive bidding. With a low bidder established (assuming the project was within budget) construction could begin, but when costs were over budget, the process had to be repeated.

When buildings and systems were fairly basic, energy was cheap, and change was slow, this process was acceptable. Even today when projects are small or simple and straight forward, traditional methods, although slower, will get a project built. The problem is there are very few instances these days where needs are basic, buildings are simple, and time doesn’t affect cost.

Technology is changing businesses and building systems simultaneously at a rate that no individual can possibly keep up with. In fact, communications, life safety, and environmental management systems are changing so rapidly that only the firms developing them can truly keep up. That’s where teaming comes in; including experts in every critical area ensures thorough evaluation from many view points. The outcomes

inevitably are more creative, less phasing is planned before construction expensive, higher quality, and more starts, minimizing interruptions. efficient to construct.

3. Projects are less expensive because they Each participant advises the team are delivered faster, and because they about options, associated first costs, have been designed to be attractive, maintenance costs, and risks inherent in exciting, and functional while at the their particular field, granting clients in same time efficient to build. depth analysis at every step in the 4. Higher quality and lower maintenance process. During the concept phase, broad costs are achieved because experts who systems such as the building structure, maintain the systems daily have helped exterior components, and mechanical ensure the best choices have been made systems can be analyzed thoroughly and for the client’s needs. quickly to determine the most efficient 5. Risks are drastically reduced for all and cost effective options to incorporate. parties due to a much better Scott Sheller As designs progress, material options are understanding of expectations and the work expected. evaluated to ensure best value and minimize long term Iowa is one of only seven states who have not allowed maintenance costs. Finally, as individual construction details are developed, team members offer ideas on how design-build to be utilized in publicly financed projects, to ensure the physical construction can be accomplished but for private owners and business people, combining easily without negatively impacting design. Clients still the expertise of design and construction professionals have to assume risk, but they are allowed to make into one seamless team has been a huge success.

Everyone knows there is no perfect project, but extremely well informed decisions and manage their costs from the beginning instead of reacting to them at the teamwork has been a successful concept in every end. endeavor known to man and construction is no different.

There are numerous advantages to teaming but the At the end of the day, just as it’s been for the last 100 top five are as follows: years, successful businesses can’t afford to be afraid when 1. Faster project delivery saves finance costs and there are clouds on the horizon. They must be careful but allows the facility to begin generating a positive continue moving forward to be prepared for opportunities that surface when skies clear. Design-build return much faster. a. Construction can begin as soon as the structure creates a team atmosphere where design, construction, and exterior have been designed instead of purchasing, and risk management share equal waiting until the final wall paper has been responsibility for project success and delivers the real time multi-dimensional analysis needed to maintain chosen. b. Special components with long delivery times can momentum safely in uncertain times.

Scott Sheller is the Director of Business Development at be ordered early to avoid potential delays during Henkel Construction Company. For more information, go construction.

2. Existing operations are protected as special to www.henkelconstruction.com.

JUNE 2008

Advertising Supplement

IN BUSINESS/NORTH IOWA & SOUTHERN MINNESOTA • 40

HOW TO

Business Plans - What’s the Big Idea?

By JEFF SELLNER As recently as the late 1990s, many entrepreneurs believed a colorful business plan and a catchy “.com” name were the recipe for success. Though plenty of the new ideas were ingenious, often they lacked a well-thought-out business plan to get their ideas off the ground.

In hindsight, we can appreciate the imagination and creativity of these individuals, and also learn from the valuable lessons they so painfully learned. New ideas and technologies will come and go, but there is one grand idea that will never fade: prudent business planning and solid implementation improve your chances of success.

Today, a significant amount of capital held by individual and corporate investors, venture capital firms, and private equity groups is waiting on the sidelines to finance companies with creative ideas. The competition for those funds is fierce, so distinguishing yourself is essential. In addition to thoroughly researching and developing their intellectual property, entrepreneurs are expected to research and develop a solid business plan. Below are some basic elements to consider when creating a business plan.

Business summary and description Provide a clearly written overview of the company and your idea, highlighting your goals and mission statement. If you are unable to capture the interest of the reader at the outset, he or she won’t continue to read.

Analysis of the market Summarize the target market along with how your idea will serve this group.

Demographics, pricing, and competition should be researched, analyzed, and addressed. Include your sales strategy and how you will position your company. For instance, are you going to license the technology to others? Will you be an original equipment manufacturer? Will you use an internal sales force or independent representatives?

Management team Highlight the management team’s background and qualifications. Investors are interested in past track records of success, industry knowledge, and unique skills.

Request for funding If the purpose of the business plan is to raise

capital, include the specific amount of funding you are requesting. Discuss the possibilities of debt versus equity, the timing of cash infusion(s), and ideas for an exit strategy such as a public offering or positioning the company as an acquisition candidate.

Financial information Jeff Sellner Historical financial statements are important; however, the most significant information will be the forecasted balance sheet, income statement, and cash flow projections for the next three to five years. Investors will turn your financial forecasts into your future operating budgets, so be realistic.

intellectual property, competition, obtaining required regulatory approvals, etc. Consider sharing your business plan with trusted friends and advisors for objective feedback. The U.S. Small Business Administration (www.sba.gov) provides an online resource that could be used as a starting point for your business planning process.

You may spend months creating and fine-tuning your plan, but potential investors may spend only a few minutes scanning it. To make those few minutes as persuasive as possible, update your business plan on a regular basis so that you are prepared when the right investors and potential new business partners request a copy. This article was originally published in the Winter 2007/2008 issue of Larsonallen’s EFFECT Magazine.

Your business plan should include wellJeff Sellner is a principal specializing in researched information and reliable statistics. In manufacturing, technology companies, and addition, it should address how you plan to emerging businesses at LarsonAllen. Contact Jeff at overcome issues such as ownership of any jsellner@larsonallen.com or 612-376-4670.