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INSIDE — MEC disputes DOR’s estimate of $300 million-plus for business tax bills RUN AGROUND?

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February 21, 2014 • Vol. 36, No. 8 • $1 • 24 pages

TRANSPORTATION

A GLITCH

Quapaw Canoe Company, which builds the large canoes used to take people on educational canoeing trips on the river, has been hit with a tax bill now totaling $41,000 while also running up $20,000 in bills for accountants and attorneys to fight what the business believes is improper taxation. {P 4}

» MEMA works out bug in WEA BY WALLY NORTHWAY I STAFF WRITER

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Around town {P 8} » MDEQ not happy with claims about permits Strictly Biz {P 12} » Ready to do your banking at the Post Office? That could become a reality

MBJ Focus {P 14}

» Small Business List {P 17} » Small Business Development Centers

Old roads, old money T1 calls for repayment of funds to MDOT » Page 2

Last week, the Mississippi Emergency Management Agency (MEMA) utilized the Wireless Emergency Alert (WEA) messaging tool for the first time. The intent of the WEA service is to better communicate emergencies and give users clear information about the threats on their cell phones and smartphones. However, there was a problem due to a glitch in Latham the federal system. The message sent Feb. 11 warning of the most-recent winter storm was labeled “Civil Emergency — Prepare for Action.” According to MEMA, this caused confusion and even some fright among users. “This was the first time MEMA used the alerts, and I know there was some confusion in the public,” said MEMA director Robert Latham. “There was no way to test the system before its use, so it was a learning experience for both us and the cell phone companies. We are confident the problems are corrected and in the future we will only use these alerts when the safety of our citizens is threatened. I am convinced this alerting system can save lives, as long as citizens do not disable it on See GLITCH, Page 2

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2 I Mississippi Business Journal I February 21 2014 TRANSPORTATION

GLITCH

Old roads, old money » T1 calls for repayment of funds to MDOT BY WALLY NORTHWAY I STAFF WRITER wally.northway@msbusiness.com

At a press conference last week, Charlie Williams, president of the T1 Coalition, laid out his organization’s proposal for at least a short-term solution to the state’s lack of funding for road and bridge maintenance. T1’s plan does not involve new money. In fact, it’s the opposite —Williams and others who gathered at the Capital are pushing for old money. Since 1990, the Mississippi Legislature has diverted approximately $300 million from monies collected from user fees under the 1987 Road Program — intended for road and bridge work — to the General Fund, the Budget Contingency Fund and other state agencies or localities. Williams and other officials gathered at the State Capitol news conference called for that money to be repaid to the Mississippi Department of Transportation (MDOT). “This idea is not a new tax or user fee. It is simply allocating money for which it was originally intended,” Williams said. “We understand that the Legislature has the authority to fund this program however they choose, and this is one idea.” Williams said the $300 million would serve to “bridge the gap” between now and 2016 when he hopes lawmakers would craft a comprehensive, long-term funding solution. It would also avoid trying to enact a permanent solution during an election cycle. At the heart of the issue is the 18¢per-gallon user fee established in 1987 to maintain the roads and bridges. Due to inflation, cars getting better gas mileage and other factors, the state is not currently collecting enough funding for road and bridge maintenance. A Mississippi Senate task force recently wrapped up months of hearings and work without coming up with even a short-term answer. Whether the Legislature will respond to the call for repayment of funds to MDOT is uncertain, but at least one House member is calling for his peers to act. Rep. Robert Johnson III, a Democrat representing Adams, Claiborne and Jefferson counties and chairman of the House Transportation Committee, said, “This truly a public safety issue, an economic development issue. There are some things we can do shortterm that does not involve taxes.” Both Williams and Johnson were quick to downplay criticism of the MDOT after a recent PEER report found a lack of transparency at the agency concerning appropriations for road and bridge maintenance. Williams said he believes MDOT is working on the issue and that PEER has said it is willing to review the matter in the coming months to ensure that MDOT is rectifying the problem. “This is not a state agency issue,” Johnson said flatly. Blake Wilson, who heads the Mississippi Economic Council, shared results of electronic surveys taken during the MEC’s Pathway to Progress Tour, part of its Mississippi Blueprint. Asked to rate the state’s roads, only 1.2 percent of respondents rated them “excellent” while 15.38 percent responded “good.” Nearly 19 percent rated the roads as “poor,” the lowest ranking. When asked how important transportation infrastructure is to economic development, 88.04 percent responded “very important,” the highest ranking. Wilson emphasized that when the 1987 program was enacted, Mis-

Special to the Mississippi Business Journal

Many of Mississippi’s bridges may look ﬁne from the top, but are in deplorable condition underneath.

FUEL USER FEE DIVERSIONS Since 1990, the Mississippi Legislature has diverted or transferred approximately $300 million in funding from the fuel user fees, intended for road and bridge maintenance, to the General Fund, the Budget Contingency Fund and other agencies and localities. Here is a breakdown of the transfers/diversions: • $185.3 million — revenue diversions, primarily gaming tax revenue, dedicated to the construction and maintenance of highways • $86.8 million — transfers to the General or Budget Contingency Fund. This was done through special legislation enacted in FY1992, FY2004 and FY2010. • $18 million — transfers to other state agencies and localities • $8.6 million — transfers to the Budget Contingency Fund by executive order. This is required when revenues fall below a certain percentage of estimated General Fund revenues in any given ﬁscal year. This has occurred six times since 1990. sissippi was last in the U.S. in four-lane highway accessibility. Today, the state ranks 16th and first in the South. “Why would we give up our competitive advantage? Why would we want to give up ground we have gained?” he asked. Wilson again stated that the MEC was planning on conducting a study of the state’s transportation needs. Similar to the study MEC conducted on health care issues, Wilson promised a study costing “several hundreds of thousands of dollars” and taking months to complete. “Today, we find Mississippi’s economic development future and safety threatened by deteriorating roads and bridges. We look forward to working with the state’s leadership and the Legislature to find a solution that will benefit all of our citizens,” Williams said.

Continued from Page 1

their phones.” MEMA had to work quickly to fix the issue. On Feb. 12, the day after the first WEA message, the Interstate 20 bridge at Vicksburg was closed due to an accident and chemical spill. Spokesperson Greg Flynn said when he learned of the problem on the morning of Feb. 12 with the Feb. 11 alert, he immediately called the provider, GSSNet, and told them MEMA needed the issue resolved promptly so the agency could send the alert concerning the I-20 bridge accident. Flynn explained that the problem was with WEA’s software coding, which threw it into the existing category of “civil emergency” under the federal system. “I have to give credit to GSSNet. They fixed the problem in about 30 minutes,” Flynn said The Feb. 12 WEA alert concerning the bridge accident worked as planned, and was simply titled “Travel Alert.” WEA messages are sent to smart phones in specific areas where a severe incident is occurring. The messages are relayed to all cell phone towers in the incident area. Each phone will only receive the message once. It is a free service so users don’t have to sign-up for anything. The only requirement is having a device capable of receiving the alerts and having the alerts turned on. Participation by cell phone companies is voluntary and customers should check with their provider to see which devices are able to receive WEA messages. WEA messages in Mississippi will come from only four sources: Mississippi Emergency Management Agency for imminent threats; Mississippi Department of Public Safety for Amber Alerts; National Weather Service for extremely severe weather warnings; and the President of the United States. This is an opt-out system where alerts can be turned off on the phones, except for messages from the President, but MEMA highly discourages people from doing this. This is a nationwide system, so users travelling will receive messages for the area in which they are located. Flynn said he learned first-hand just how important this nationwide system can be in emergencies. He and his wife were travelling in the Atlanta area when they were alerted via phone that they were under a tornado warning. “It doesn’t matter where you are. WEA will send an alert if there is an emergency in the area where the user is travelling,” Flynn said. “This system can save lives.” Flynn said MEMA is actively working with wireless providers, recruiting them to join the WEA system. He also said MEMA wants to see more devices that are WEA-enabled and wants more consumers to ask their carriers to offer more of those devices.

February 21, 2014

Mississippi Business Journal

INSIDE BUSINESS

The opportunity and cost of being a movie star

le B Bu ss un si th dl nes an es s $ 75 for /m o.

I returned to the office from the Christmas holidays on Jan. 6 to an email stating the producers of a major motion picture were filming in Jackson and needed extras on Jan. 7 for a concert scene in Paris circa 1971. My brain immediately clicked into “opportunity cost” mode. My desire for stardom and fame had me thinking it would be okay to take another vacation day on Tuesday in order to check this item off my bucket list. The opportunity cost for me was one day of vacation, not getting caught up on emails right away, and not completing a couple of items on my todo list. “You only live once” I told myself and sent my headshot with clothing size and measurements to the booking agent. Within hours I had been booked with a reporting time on Tuesday of 9:30 am. My son had not returned to college yet and I decided to talk him into signing up, as well. It was important

to him that this was a paying gig at $8/hour, which was more than he would be making sitting on the couch at home. The opportunity cost for him was simply not being able to sleep late. In fact, he would be earning money while checking this item off his bucket list. Two people, same experience, totally different costs. While I had a great time dancing to “Get On Up” throughout the day, I couldn’t help but feel like I was losing money. My choice to become a movie star involved costs. The auditorium full of people were responding to incentives in predictable ways. The young people were there to be paid for an honest day’s work while the older people were there for the experience. We were all there voluntarily and were therefore gaining from this trade of our time and talent for money and experience. My consequences in the future included working late for the rest of the week to get caught up in the

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office. Would I make the same choice again given the chance? You bet I would! Seeing the movie-making process in action was enlightening. I received a first-hand experience in how the creative economy works in

the crew, and Selena Swartzfager transportation of extras via tour buses. At the end of the day we were served a “lunch” of pizza at 4:30 pm. Two weeks later a check came in the

While I had a great time dancing to “Get On Up” throughout the day, I couldn’t help but feel like I was losing money. My choice to become a movie star involved costs. Mississippi. This was one of many days the filming took place in Mississippi. Each of those days required the injection of money into the local economy through the hiring of local actors/extras, rental of space, the purchase of food and hotel rooms for

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mail for 7.5 hours of work at $8 an hour, less FICA. Rich in dollars, no. Rich in experience, yes. » Selena Swartzfager is president of the Mississippi Council for Economic Education. She can be reached at swartsc@millsaps.edu.

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4 I Mississippi Business Journal I February 21 2014 OUTDOORS

Quapaw Canoe runs into turbulent waters with bills from state tax department By BECKY GILLETTE I CONTRIBUTOR mbj@msbusiness.com

CLARKSDALE — The only nature tourism business in Mississippi that takes people out in canoes padding the Mississippi River has run into a major logjam that threatens to force it out of business. Quapaw Canoe Company, which builds the large canoes used to take people on educational canoeing trips on the river, has been hit with a tax bill now totaling $41,000 while also running up $20,000 in bills for accountants and attorneys to fight what the business believes is improper taxation. “I’m not sure if we’ll survive the fight,” said John Ruskey, owner of Quapaw Canoe Company in Clarksdale and in Helena, Ark. “The root of the problem is that there is no place in the Mississippi State Tax Code for us. The federal law says no taxes shall be charged on navigable waters. We have always operated under the assumption that we would be covered under that law and have never charged taxes for our services, although we have for sales and rentals. Now the Mississippi Department of Revenue wants to assess us for taxes on all of our income for the past four years, which now amounts to over $41,000 including interest and penalties.” Quapaw is even being charged tax on income sources like schools, non-profits and government agencies that are not normally considered taxable. Ruskey is trying to figure out how to resolve this — not only for them, but anyone else following in their footsteps in nature tourism, here and in the rest of the Deep South. “Whatever we do here is likely to be mimicked in other Southern states,” he said.

States like Utah and Idaho with long traditions of river runners have dedicated whole sections of their tax law in accordance with the federal exemption. States such as Tennessee have honored the federal exRuskey emption. In a state that provides millions in tax incentives to bring new industries and jobs to the state, Ruskey is a bit perplexed at the anti-business attitude of the Mississippi Department of Revenue. Even after he hired accountants and attorneys and went before the department’s Board of Review citing the U.S. Rivers and Harbors Act, the department has remained deaf to arguments about the federal law. Running the turbulent river is enough of a challenge. It can be dangerous and requires a lot of commitment and planning to do it safely. But this may be a bigger challenge than the ever-changing river. “We are faced with a possibly insurmountable challenge from a source that has responded with no goodness, no forgiveness, and no attempt to comprehend the nature of who we are and what our business is,” he said. “Situations like this shouldn’t get in the way of developing businesses, especially developing industries like ours, nature tourism. We have a unique slant to it because we are on a river that no one else paddles on and we operate as an education organization. All of our trips involve history, geology and geography. Then we also do a lot of work with the youth of the Mississippi Delta with apprenticeships. We have actually raised a whole generation

Special to the Mississippi Business Journal

John Ruskey says his company might not survive the tax ﬁght it is in with the Department of Revenue.

of paddlers who are now big river paddlers and guides. I’ve personally trained some of them for almost a decade now in the rigors of the quite dangerous Mississippi River.” The consequences of the battle by this small ecotourism company against the tax department could have impacts far beyond one business. Paddling is the fastest-growing sport in the country. There are currently 24 million paddlers in the U.S., and more people are starting to paddle long distances on the Mississippi River. Mississippi paddler events such as the Bluz Cruz Race in Vicksburg, and Phat Water out of Natchez are increasingly popular. “The Mississippi River is getting more and more recognized as one of the great outdoor adventures available in this country, as it should be,” Ruskey said. Ruskey said the Department of Revenue should get on board with what the Mississippi Development Authority is doing to help businesses survive in a very challenging economy. “From my perspective, it seems unfair,” Ruskey said. “The federal law says you can’t charge taxes on a navigable waterway unless that tax is going back directly into benefiting the business. Personally, my biggest hope is we can get this set right so it paves the way for more businesses like ours to be able to pursue this very healthy endeavor. Everything about paddling is healthy. It is good exercise. People are reconnected to the environment. Study after

“Situations like this shouldn’t get in the way of developing businesses, especially developing industries like ours.” John Ruskey

Quapaw Canoe Company

study shows people who engage in outdoor activities are happier.” Having the huge tax bill hanging over the head of a business that ended up with only $5,000 in the bank at the end of the year is making it hard for Ruskey to concentrate on the business. “It is very distracting,” he said. “It has instilled in me a paranoia about being able to continue to make a living. We are a small company. We don’t have a secretary. I answer the phone. I answer the emails. I empty the wastebaskets. I document and research water, weather and geographic conditions, and create a river manual for each trip. It is a very demanding business. It is actually dangerous for our operations to be too distracted. I have to be out as guides for scouts, church groups, school children and others. Their lives are in our hands. I have to focus 100 percent of our attention on safe travel on the Mississippi River.” The company is currently preparing to appeal the Board of Review denial to the Board of Appeals. If the Board of Appeals also finds against Quapaw, the company can take the next steps afforded taxpayers appealing to the chancery court and, if it doesn’t prevail there, the Mississippi Supreme Court. But each of those steps is very expensive and time consuming. Ruskey said the long process makes him feel like he is locked up in a glacier. But he is hopeful that, in the end, the right thing will be done for his business and any other ecotourism businesses that sprout up in Mississippi. “We are the State of Mississippi,” he said. “Our name comes from the great river. Honoring the federal law in our tax code would be just another way to honor our river and its potential for our state.” The Mississippi Department of Revenue declined comment, and said confidentiality laws prohibit the agency from discussing individual cases.

February 21 2014

Mississippi Business Journal

TAXES

DOR’s estimate of $300 million-plus for pair of business tax bills disputed By TED CARTER I STAFF WRITER ted.carter@msbusiness.com

A price tag of $7.5 million this year and $25 million next year accompany a pair of pro-business tax apportionment bills that have cleared Mississippi’s House and Senate with overwhelming support. The Republican-sponsored measures, HB 799 and SB 2487, force the Department of Revenue to justify basing a multistate company’s taxes on revenue generated in the state. The measure also forces the taxpayer to do the same should it want the revenue standard used. The bills are also aimed at restoring a national trade association for multistate corporations’ high grade for tax fairness Waller after last summer’s state Supreme Court ruling that upheld the DOR’s authority to tax an out-of-state company on money it made in the state. Critics of Mississippi’s current set up say In assessing the cost of HB799 and SB 2487, the Department of Revenue said the $7.5 million this year and $25 million next year are only the down payment the state would have to make to restore the B+ grade the Council on State Taxation, or COST. The nonprofit trade association of more than 600 multistate corporations dropped the state’s grade for “The Best and Worst of State Tax Administration” to C+ after Mississippi’s Supreme Court upheld the DOR’s use of a market-based standard for assessing Atlanta’s Equifax Credit Information Services’ tax liability. Basing the tax on revenue from services sold in the state marked a departure from the state’s statutory “cost of performance” standard. The market-based standard, which calculated tax owed through revenue generated in the state, upped Equifax’s tax bill from zero to $700,000. The DOR projects the bills designed to make it harder for the state to assess taxes on multistate businesses based on revenue earned would ultimately cost the state treasury more than $300 million – a figure the Mississippi Economic Council says is vastly inflated. COST last month cited the Equifax case in a letter to legislative leaders and indicated a grade reassessment would come with adoption of legislation to diminish the effects of the Equifax ruling. Equifax sought to use the cost-performance method in which sales of services are sourced to the state where most of the activity occurs/costs were borne. In Equifax’s case, the sourcing – or bearing of costs – did not occur in Mississippi, thus the zero tax liability. Meanwhile, the bills to undo the per-

HERE IS WHAT THE DOR PROJECTS THE ENTIRE COSTS WILL BE: · $7,500,000 loss to the remainder FY 14 General Fund from Corporate Alternative Apportionment · $9,618,398 loss to remainder of FY 14 GF due to reduction in Interest rate · $9,823,332 loss to the remainder FY14 General Fund due to changes in penalties · $25,000,000 loss to the FY 15 and future General Fund from Corporate Alternative Apportionment · $38,473,594 loss to the FY 15 (and future) GF due to reduction in interest rate · $39,293,170 loss to the FY 15 and future General Fund due to changes in penalties · $2,660,000 additional annual cost to DOR for Certiﬁed Mailings · $500,000 additional cost to notice the taxpayer and his lawyer · $100 million of revenue agent productivity lost to hand-delivering · $150 million lost production (due to lack of savings clause, the effective date and section 19. This will affect both FY 14 and FY 15) · $4,000,000 additional annual cost to hire enough people to refund “customers” sales taxes

costs could come down considerably in the final bill through negotiations between the MEC and DOR. Scott Waller, MEC executive vice president and COO, said the costs have been shaved to a few million dollars, essentially the costs involved in lowering interest assessments from 1 percent to one-half percent. The DOR projects a cost of $38,473,594 in lost interest in fiscal 2015, however. Waller said the DOR’s listing of $100 million as the cost of lost productivity by having revenue agents hand deliver tax dispute notices was moot from the start. Neither of the bills required either a hand delivery or return-receipt-requested mailing. Standard certified mail was all the bills specified, he said. The Smith and Fillingane measures also specify changes to the assessment of interest and penalties for corporate taxpayers that file taxes based on the statutory standard but later are subjected to a different standard by the DOR. Monthly interest would be lowered from 1 percent to onehalf percent and penalties would be assessed only on the amount of tax in dispute rather including tax amounts al-

ready paid. Another provision eliminates the requirement that a business challenging a tax bill post a bond or be forced to “pay under protest.” The MEC’s Waller said the $150 million cost in lost production noted by the DOR has been erased by inserting the “savings clause” into the bills. That way only tax challenges that arise on or after the date specified in the savings clause would be part of the cost incurred, rather any and all disputes now in the pipeline. “Everything going forward would be affected,” he said. Waller also disputes the loss of $9.8 million to the general fund in the remainder of fiscal 2014 through changes in the penalty assessments. “There possibly could be some additional dollars” lost but nothing in the range cited by DOR, he said. Waller said it is important to emphasize that supporters of the tax reform bills don’t seek to limit DOR’s options for apportioning tax liabilities. The bills seek to require either party — the taxpayer or the government — to show why it is necessary to apply a standard outside the statutes, he said.

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ceived damage from the Equifax case are headed for the House-Senate conference committee. HB 799, introduced by Rep. Jeff Smith, won House approval earlier this month by a 113-2 vote. The companion bill from Sen. Joey Fillingane, SB 2487, received Senate approval last Thursday on a 46-1 vote, with five senators either absent or not voting. The bills would force the DOR to present “clear and convincing evidence” that the standard “cost-of-performance-based” apportionment method does not fairly represent the taxpayer’s activity. The measures would also require the DOR to present “clear and convincing evidence” to support requests for out-of-state companies with operations in Mississippi to provide the DOR with combined tax returns. Fillingane, in an interview last week, conceded his legislation would entail “significant” costs to the state’s treasury, but insisted the expense is necessary to protect the state’s reputation as friendly to business. He further noted he expects the

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Website: www.msbusiness.com February 21, 2014 Volume 36, Number 8

ALAN TURNER Publisher alan.turner@msbusiness.com • 364-1021 ROSS REILY Editor ross.reily@msbusiness.com • 364-1018 WALLY NORTHWAY Senior Writer wally.northway@msbusiness.com • 364-1016 FRANK BROWN Staff Writer/Special Projects frank.brown@msbusiness.com • 364-1022 TED CARTER Staff Writer ted.carter@msbusiness.com • 364-1017

MBJPERSPECTIVE February 21, 2014 • www.msbusiness.com • Page 6

OTHER VIEWS

Solving the statue attack at Ole Miss is essential

believe in respect for the dignity of each person I believe in fairness and civility I believe in personal and professional integrity I believe in academic honesty I believe in academic freedom I believe in good stewardship of our resources I pledge to uphold these values and encourage others to follow my example. — from the University of Mississippi creed •••

LISA MONTI Contributing Writer mbj@msbusiness.com • 364-1018 BOBBY HARRISON Contributing Writer mbj@msbusiness.com • 364-1018 TAMI JONES Advertising Director tami.jones@msbusiness.com • 364-1011 MELISSA KILLINGSWORTH Sr. Account Executive

melissa.harrison@msbusiness.com • 364-1030 VIRGINIA HODGES Account Executive virginia.hodges@msbusiness.com • 364-1012 TACY RAYBURN Production Manager tacy.rayburn@msbusiness.com • 364-1019 CHARINA RHODES Circulation Manager charina.rhodes@msbusiness.com • 364-1045

The entry of the Federal Bureau of Investigation into the probe surrounding an attack on a landmark statue of civil rights hero James Meredith on the University of Mississippi campus officially raises the incident to a possible hate crime, a federal offense. The Meredith statue, commemorating the Kosciusko native’s violence-stained admission

as the university’s first black student in 1962, was placed in the heart of the Oxford campus in 2002 to symbolize Ole Miss’ accessibility to all students and its determination to shed vestiges of a segregationist past. That effort has substantially but not fully succeeded. Criminals were identified by an eyewitness to the early morning defiling of the statue as two men yelling racial slurs as they draped a former Georgia state flag bearing a Confederate emblem and hangman’s noose on the statue, then fled the scene. The witness had arrived on the campus to begin contract work when he saw the incident at about 6:30 a.m. He immediately notified university police, who responded and began the investigation. Identifying, arresting, prosecuting and sentencing the perpetrators of the attack on the statue is essential because momentum must be sustained moving forward in race relations on a campus that has dedicated itself to mutual respect and free academic inquiry.

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» BILL CRAWFORD

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A $25,000 reward has been provided by the university’s alumni association to help bring the criminals to justice. Danny Blanton, the university’s official spokesman, said no assumptions have been made that the vandals were university students, and added the search and investigation reach far beyond the campus. Blanton said several important student organizations, including the Panhellenic Council, representing sororities, and the Interfraternity Council, representing fraternities, are cooperating fully in seeking identity and arrests. Slurring iconic images of a university and other institutions is not the work of pranksters. It is criminal. Ole Miss alumni and friends should exert every effort personally to identify and prosecute those guilty of the attack on the statue because it was, in fact, also an attack on the university.

» LETTER Open letter to Southwest Airlines, I have several relatives that fly annually to homecomings, family and class reunions, illness, deaths, church activities, funerals, new births and host of other events from all parts of the native, particularly Chicago, Virginia, Maryland, D.C., Flordia, just to name a few. Your decision to cancel service to JacksonMegar Evers International Airport is devastating to our families and friends, This leaves us in caos try-

ing to figure out how to navigate our way around the country to meet our demands. With so many seniors traveling for these different events, we are really concerned about losing family ties. This is more than just an inconvenience since traveling requires some of our virginians to travel as far as BWI to catch SW fliers to Jackson. Please reconsider your decision. If it takes thousands of signatures to support this request, we are prepared to do it. Help us please! — A concerned customer

uition guarantee programs that pay community college tuition for recent high school graduates have caught on in 20 of Mississippi’s 82 counties. Now the Legislature is looking to make the program available across the state. Tennessee and Oregon are also considering statewide programs. Tuition, of course, is only part of the cost of attendance at community colleges. For example, at East Mississippi Community College the annual tuition of $2,050 is 28 percent of the estimated $7,400 annual cost of attendance. Books and supplies, fees, and room and board make up the remaining $5,350. Started at Meridian Community College, the tuition guarantee program began to spread several years ago when the CREATE Foundation helped fund the program for students in 16 of its 17 counties who attend Itawamba, Northeast, and East Mississippi Community Colleges. Since then East Mississippi expanded its program to all its counties and Jones County Community College started the program in two counties. Legislation to create the Mississippi plan was introduced by Republican state representative Jerry Turner of Baldwyn. It passed the House by a vote of 115 to 4 last week. Republican Governor Bill Haslam is championing Tennessee’s program saying it is a way to increase college graduation rates in his state. Democrat Governor John Kitzhaber favors Oregon’s program saying it’s “an excellent idea.” No statewide official has jumped on board Mississippi’s program. It now faces action by the Mississippi Senate. Bill Crawford (crawfolk@gmail.com) is a columnist from Meridian.

PERSPECTIVE

February 21, 2014 I Mississippi Business Journal

» HOW TO WRITE

» RICKY NOBILE

Letters to the editor are one of the most widely read features of the Mississippi Business Journal, and they give everyone a chance to voice their opinions about current affairs. We’re interested in what you think and we welcome Letters to the Editor for publication. Here are the guidelines: >> Letters should not exceed 300 words in length as a general rule. >> All letters must bear the writer’s address and telephone number. Street addresses and telephone numbers will not be published, but may be used for verification purposes. Letters may not appear without the author’s name. >> Form letters, thank you letters and letters to third parties generally are not acceptable. >> Letters must be typed or e-mailed. >> Letters must conform to good taste, not be libelous and not involve personal attacks on other persons. >> All letters are subject to editing, and become the property of the Mississippi Business Journal. >> Letters can be sent to The Editor, The Mississippi Business Journal, 200 North Congress, Suite 400, Jackson, MS 39201, delivered to the newspaper during regular business hours or e-mailed to editor@msbusiness.com. They may also be faxed to Ross Reily at (601)-364-1007.

» CORRECTIONS The Mississippi Business Journal takes seriously its responsibility to provide accurate information, and will correct or clarify articles produced by the editorial department if we have made an error or published misleading information. The correction will be placed in the perspective section. If you see inaccuracies in Mississippi Business Journal news stories, please report the mistake via e-mail at editor@msbusiness.com.

»FROM THE GROUND UP

So you want to be a residential real estate investor? Part 2

n part one we discussed how to determine whether a person had the right characteristics to be a residential real estate investor and how to find the right neighborhood. We now move to finding and managing the right property. There are two really important axioms to keep in mind when investing in residential real estate. First, successful investors make money when they buy real estate, not when they sell it. That means buying from what is known as a distressed seller. This is an owner that is willing to sell for less than market value because of various reasons. When you buy at less than market value you have already increased your equity in the property. Read any real estate invest book by Robert Allen for more on this concept. Secondly, the most important influence on the value of a property is the property next door. Property values in a neighborhood tend to seek the middle range of values as they appreciate or depreciate. What that means is that the house that is overbuilt for the neighborhood will rise slower in value from a percentage standpoint that the under-built house. One of the more common ways that real estate investors increase the value of their properties is to make repairs that cost less than the value that they bring. For example, painting a house can increase its value at relatively little cost. Properly marketing the property is critical to finding that perfect tenant. Should you put up a sign in the yard, list it on Craigslist, run an ad in the local newspaper or put up signs on bulletin boards in local colleges and office buildings? It all depends on the where prospective tenants get their information. Put yourself in their shoes. One piece of advice I always give is that you should announce that you are “taking applications” during the marketing period. That way you do not get caught in the trap of someone undesirable coming in and renting the house.

Once upon a time my wife and I had a house for rent. We ran an ad in the local newspaper and placed a sign in the yard. During the marketing period I would work at my day job while she showed the property. Being the savvy real estate investor that I thought I was (sarcasm intended), I gave my wife certain instructions. “Do not rent to Phil Hardwick the first person that comes along. Tell them that you’re taking applications.” I arrived home after work the first day the property was on the market and asked if there were any applications. “I rented it out to the first prospect that came along,” she said. I prepared to chastise her for doing exactly the opposite of what she was supposed to do. Then she said, “Our new tenants are two medical students, and they are really nice. Plus, they gave me the damage deposit and the first six months rent.” Needless to say, I was floored. But it does illustrate that sometimes flexibility and common sense override hard and fast rules. It is also recommended that you prepare a three-year pro forma, which is really nothing more than a profit and loss statement. This statement will contain expected income minus expenses. Certain expenses are occur regardless of whether there is a tenant in the property or not. A mortgage loan on the property is a good example. When estimating income do not forget to assume that the property will be vacant sometimes. Estimating expenses can be tricky if you do not have a good past history of the property. In general, the owner/investor pays the property taxes and hazard insurance while the tenant pays the utilities and renters insurance on the personal contents. Nevertheless, it should be remembered that everything is negotiable.

One big mistake that residential real estate investors make is failing to set aside some of the revenue for repairs and maintenance and replacement of such things as roofs and central air conditioning units. This is known as replacement reserves on the income statement. Finally, a bit of a sermon. Cities all across this country are suffering from neighborhoods that have declined and are littered with abandoned properties that are still owned by residential real estate investors. From the community’s point of view these owners are looked at as slum lords. From the owners’ point of view city officials do not appreciate the fact that when neighborhoods decline there will be tenants who tear up property and city services that are not provided. The owner/investor simply gets to the point where the cash outflows are greater than the cash inflows and the time and trouble to manage the property is untenable or even unsafe. As a residential real estate investor it is a good idea to remember that it is not just the house that was invested in, but also the neighborhood. What that means is getting involved in the neighborhood to extend its life as long as possible and even be a part of its revitalization. To sum up the subject of residential real estate investing, these points are offered: » buy the neighborhood first; » never pay market value; » take applications and screen prospective tenants; » visit the property often; » watch the financials, making certain to have a reserve account; and » become involved in the neighborhood. Happy investing. Phil Hardwick is coordinator of capacity development at the John C. Stennis Institute of Government. Pease contact Hardwick at phil@philhardwick.com.

8 I Mississippi Business Journal I February 21 2014 ENVIRONMENT

MDEQ: Claim of incomplete permit review for silicon plant a ‘guise’ by competitor By TED CARTER I STAFF WRITER ted.carter@msbusiness.com

The head of the Mississippi Department of Environmental Quality says an Alabama silicon manufacturer’s claim that the state agency erred in granting an operating permit to competitor Mississippi Silicon Metals lacks merit. Selma-based Alabama Globe Metallurgical Inc. has asked for a formal evidentiary hearing before the MDEQ’s Permit Board. Trudy Fisher, MDEQ executive director, is not inclined to grant the hearing request and accused Globe Metallurgical of trying to stifle a market competitor by making false claims. “This is an unfortunate use of the administrative process by an out-of-state competitor under the guise of raising environmental concerns,” Fisher said. The agency “stands behind” the review and decisionmaking of its staff, she added in a press statement. “The permit meets the requirements of our laws and regulations and protects the public and the environment,” Fisher said. Globe Metallurgical’s hearing request charges that the DEQ acted too hastily in the permitting of Mississippi Silicon’s $200-million “greenfield” plant in Tishomingo County’s Burnsville. Globe Metallurgical, or GMI, employs about 100 people at its silicon metal plant in Selma. GMI is one of North America’s largest producers of silicon metal. GMI claims the permit issued to Mississippi Silicon would allow the site to emit air pollutants without certain control devices that are standard in the industry and, for

SPECIAL TO THE MBJ

RENDERING: Mississippi Silicon Metals’ Burnsville plant will employ advanced technology to convert Mississippi hardwood chips and other natural resources to silicon.

some processes, without any air pollution controls at all. GMI said it believes Mississippi Silicon’s application did not provide complete and accurate information to enable the DEQ to fully evaluate air-quality considerations. The company further claims MDEQ seems to have been under pressure to process the permit more quickly than a thorough process would allow. In this case, the review process took only three months, GMA notes. State economic development officials were eager to see

the plant built in the economically depressed tri-state border region of Northeast Mississippi. Their support included $20 million in state incentives. The new plant is the first to go up in the United States since the mid 1970s. Mississippi Silicon says more efficient manufacturing methods and new trade protection measures have made construction of the plant economically viable. In filing the appeal, GMI formally requests that the permit be sent back to DEQ. The company says it wants the agency to further evaluate whether Mississippi Silicon will be installing the latest emission-control equipment, the equipment meets current air-quality standards, and provides complete and accurate information. Silicon is an alloy used to strengthen such industrial products as aluminum automobile wheels and to make a host of household products, among other uses. Mississippi Silicon responded to the competitor’s claim with a one-sentence statement. “Mississippi Silicon has its permit, and continues to move forward with the project.” David Tuten, president and CEO of Mississippi Silicon, noted in an interview before the January ground breaking for the plant that by-products from the manufacture of silicon include slag that is sold to steel makers and smoke from the silicon plant’s furnace that is sold to the concrete industry. The silicon fumes are used to strengthen concrete in structures such as high-rise buildings and highway overpasses. The manufacturing process does not create waste products and “has basically zero water discharge,” Tuten said, and added the Burnsville plant has all required environmental permits, including state and federal air permits.

Bill’s demise ends state sales tax rebates for retail development By TED CARTER I STAFF WRITER ted.carter@msbusiness.com Mississippi’s tourism tax development incentives failed to gain enough legislative support for renewal last week and will expire July 1, ending the state’s practice of awarding tens of millions of dollars as incentives for development of shopping malls and retail plazas. The Mississippi Development Authority so far has awarded up to $155 million in potential subsidies for three shopping malls since legislators widened the sales tax rebate program last year to include “cultural retail attractions,” or what are more commonly known as retail centers and shopping malls. Under the terms of the law, the state returns 80 percent of sales taxes collected at a development over 10 years, until the total collected reaches 30 percent of the construction price. Lawmakers this week declined to extend the tax credits, thus letting them run out on July 1. House Bill 1233, sponsored by Rep. Rita Martinson, R-Madison, would have extended the program by three more

years. After a lawmaker questioned the bill last week, it was moved to the bottom of the House calendar, where it remained without a call up. Martinson said in an interview with The Associated Press she thinks incentives have been helpful, but conceded there was some sentiment to let the lures run out. “We might even think about letting it go,” she told AP. “It might be at the point to sit back and see what we’ve done.” State Sen. David Blount, who does commercial leasing for retail space, said he is glad to see the state cease creating an unlevel playing ﬁeld for retail businesses. “It’s favoritism of one business over another,” the Jackson Democrat said. Many economists also voice doubts about subsidizing retail development as well. Good Jobs First, a nonproﬁt group that is skeptical of business subsidies, is particularly critical of giving money to retailers, saying they don’t pay well or create spinoff jobs, the AP reported. “Building new retail space doesn’t grow the economy, it just moves sales and lousy jobs around,” the group writes.

The first retail development to qualify for the widened incentives was Pearl’s Outlets of Mississippi, where Spectrum Capital could get up to $24 million of its $80 million investment back. That mall opened in November. Since then, Memphis developers have won certification for the proposed Outlet Shops of the Mid-South in Southaven, which could get $34 million of its $113 million construction cost. Now, the third and largest development has been certified. CBL & Associates has been approved for up to $96.3 million of a projected $321 million investment for the Gulf Coast Galleria, which it hopes to build in D’Iberville, according to the AP. MDA has also certified developers of a proposed Westin hotel in downtown Jackson to collect up to $15.7 million from their proposed $52.3 million investment. Hotels, museums and other tourist

attractions were already eligible for the rebates before last year, but may not reach the 30 percent ceiling. Jackson’s King Edward Hotel had only collected $1 million of up to $19.5 million by the middle of 2013. Through mid-2013, the program had paid out only $20.8 million. Of that, almost 75 percent went to another stage of the Pearl development including a Bass Pro Shops store and the Trustmark Park baseball stadium, AP reported.

February 21 2014

Mississippi Business Journal

TOURISM

Photo courtesy of Holly Powell for FL Crane/ Special to the MBJ

Infinity working to attract more visitors By LISA MONTI I CONTRIBUTOR mbj@msbusiness.com

Infinity Science Center is coming up on its second anniversary in April and the emphasis now is on attracting more people by adding exhibits and making the science center more visible, literally. NASA has cleared some trees between the state Welcome Center and Infinity so that I-10 travelers get a better view of the center. Infinity, the official NASA visitor center for the nearby Stennis Space Center, drew around 60,000 people in its first year. That’s up from the 35,000 to 40,000 visitors to the old visitor center on the Stennis site but nowhere near the 260,000 to 360,000 visitors predicted by consultants before Infinity opened. John Wilson, Infinity’s executive director, said the original estimate of visitor attendance was “greatly exaggerated and it threw off the business model.” But new attractions take time to get noticed, he said, and lately Infinity is getting more word-of-mouth buzz. “It does take a while,” he said. His goal is 80,000 visitors this calendar year. Paul Foerman of NASA public affairs at Stennis, said, “We are seeing considerably more visitors than we did when it was located on site. We’d like more, of course.” Foerman said the economy is “a big driver” in visitor counts. “All visitor attractions across the country are down.” At two years old, he said, “We are still fairly new, but just getting the word out that we exist is a big challenge.” Business and community leaders put the idea for Infinity into motion more than 10 years ago and formed a non-profit foundation to raise money to build it in Hancock County. The targeted amount was $30 million and so far more than $20 million has been raised. The 72,000-square-foot center has 30,000 square feet of gallery space and is staffed by 10 employees. NASA supplies

Photo courtesy of Inﬁnity Science Center

The Infinity Space Center drew 60,000 visitors its ﬁrst year, well below the predicted trafﬁc at the Coast educational and tourism facility.

eight or nine tour guides and has provided the bulk of exhibits. The non-profit 501(c)(3) center is located on NASA land and is funded partly by donations, grants and ticket sales. The center also receives $44 of the $50 fee from the sale of New Orleans Saints car tags. “It’s an incredible deal,” said Wilson. Infinity has received as much as $18,000 a month from the Saints tags. It also receives a portion of money from the cafe and gift shop. This year it has a budget of around $850,000. Wilson said Infinity has the same worries as any small business. “The good news is for an operation this size we have very little debt,” he said. The goal is to retire the debt soon and build up rainy day funds. Wilson said he has two goals for the center including “being part of raising several generations of people who know enough about science to care about it, and maybe a

slight percent of those will become scientists. The second is raising science literacy among the general public.” A third goal is to pull more visitors off busy Interstate 10. NASA recently lent a helping hand with landscaping. Foerman said, “We have thinned some trees between the welcome center and Infinity so we’re seeing a lot more people saying they just drove by and saw it and decided to stop. So we’re starting to get more of that I-10 traffic stopping.” He is hopeful that travelers who don’t stop the first time will visit on their return trip. Part of Wilson’s strategy to draw more visitors involves “finding the right groups to focus our precious ad dollars on,” he said. He also is working to enhance the visitor experience, starting with how visitors are greeted at the door. “Infinity is closely associated with Stennis

because it is our official visitors center and so NASA has a keen interest in the success of the science center,” Foerman said. “And we have a mission to inspire the next generation of explorers, so we want nothing but the best for Infinity.” Wilson said about 2,000 students are scheduled to visit Infinity during February, and emails are being sent to schools in the surrounding area to get more students in for spring field trips. Infinity generally gets good reviews from visitors but there have been some negative comments on social media sites about a shortage of interactive exhibits. Wilson said the complaint is well founded. “In some ways we overpromised and underdelivered,” he said. “The good news is, we are working to put in more interactive exhibits.”

10 I Mississippi Business Journal I February 21 2014 MANUFACTURING

RESEARCH & DEVELOPMENT

Rolls-Royce testing jet engines nonstop at Stennis

By LISA MONTI I CONTRIBUTOR mbj@msbusiness.com

Jet engine testing at the Rolls-Royce Outdoor Jet Engine Testing Facility at Stennis Space Center has been going almost nonstop for months. The company cut the ceremonial ribbon last October on the second of its outdoor test stands, which represents a $50 million investment, and is filling the last of the 35 jobs that the new test stand created. “Ever since the grand opening we’ve had one or two engines running pretty much nonstop,” said Anthony Woodard, the facility’s general manager. Engine tests run 24 hours, five or up to seven days a week, Woodard so Rolls-Royce maintains a sizable fuel farm to keep the engines running. “We keep the fuel trucks coming,” Woodard said. The tests provide engineers with performance information by simulating every step of a flight, from the aircraft pulling out of the hangar to takeoff, cruising and landing. “The whole idea is to keep the engines running as long as we can so we can improve our product,” he said. Jet engines are key to the Rolls-Royce business portfolio and the Stennis facility is its only outdoor jet engine test site. “It gives us a unique testing capability,” said Woodard. The Stennis site also is unique because it can perform noise testing and crosswind testing. The noise testing can detect minute changes in the sound the engine makes and the precise measurements help Rolls-Royce produce engines that are quieter and more fuel efficient. “We are constantly trying to reduce noise, make the engines more efficient and with less impact to the environment,” he said. For crosswind testing, he said, “We have a very large piece of equipment that effectively simulates a high velocity of wind across the engine. You can't do that with an indoor engine test.” The Stennis site opened in 2007 as one of three RollsRoyce test sites in the world and the first in the U.S. to conduct specialized development engine testing including thrust reverse and endurance testing on all current RollsRoyce engine types. “There are a lot of reasons that we are here,” Woodard said, Including the protective buffer zone that surrounds Stennis and the weather, notwithstanding hurricanes. “On

Special to the Mississippi Business Journal

Research at the Rolls-Royce Outdoor Jet Engine Testing Facility, which represents a $50-million investment by the company, has been going nearly nonstop since the company cut the ribbon on the complex last October.

the Gulf Coast we have temperate climate throughout the year and better opportunities to do outdoor tests.” Most of the engines are produced in the United Kingdom and also in Germany and at other Rolls Royce sites across the globe. When their Stennis testings is complete, “we send them back where they came from for deeper inspections or they are repurposed to do more tests at some other location.” Current testing is being done on the company’s newest Trent XWB engines, which will go into production later this year. Rolls-Royce names its engines after rivers nearby where they are manufactured. The River Trent is near its Derby, England, facility. The Trent 1000 powers the Boeing 787 Dreamliner and the Trent XWB powers the Airbus A350 XWB. “The Trent is very important for our business. Fifty percent of our global production is in civil large engines so it’s a key part of Rolls-Royce’s business,” he said. Civil engines are the largest segment of the market, followed by defense, energy and marine. Airbus, Boeing and other customers dispatch their officials and engineers to observe the testing at Stennis. “We do have a lot of customer involvement at the site,” he said. Engines are delivered to Rolls-Royce at Stennis by land, sea or air. “It depends on the engine type, where it’s coming from and how critical the test is,” he said. “Getting the engine here quickly for our customers is very critical.” Some larger lines including the Trent WXB will not fit on conventional aircraft, so they tend to be transported by the Antonov, the largest cargo plane in the world, which lands at the nearby Stennis International Airport. Others can fit inside 747 freighters. Woodard said the test schedule at Stennis is full for the next two to three years. “We have a lot of testing to do,” he said.

Automotive industry driving manufacturing activity in Mississippi By LISA MONTI I CONTRIBUTOR mbj@msbusiness.com

Mississippi’s thriving automotive industry gave the state a boost in employment during January, according to a monthly survey of manufacturing activity in the southeastern states. The Southeast Purchasing Managers Index released by Kennesaw State University reported increased employment and finished inventory in the state. The survey also found that commodity prices increased in January. Overall, the survey ﬁndings represent “very good news” for the state, said Jay Moon, president of the Mississippi Manufacturers Association. “One of the sectors of manufacturing the Kennesaw State report would be reﬂecting on is the automotive industry and its increased presence in the Southeast,” Moon said. “If you look at the Southeast as a region, it is one of the fastest-growing regions not only in population but also business development.” Moon called the burgeoning auto industry across the Southeast “the biggest concentration of international auto and truck manufacturing facilities” in the country. In Mississippi, Nissan is increasing production at its Canton plant and hiring additional workers, Moon said. The automaker also is in the process of adding a new supplier park adjacent to its facility. Toyota has been in production in Blue Springs for about a year and is seeing increased demand for its vehicles. “They are doing very well in the northern part of the state,” Moon said. Auto suppliers also are locating in the area to supply the big manufacturers, and that adds to the employment base. Moon said the Yokohama Tire facility in West Point will have 2,000 employees when it is fully operational. The new commercial truck tire manufacturing plant is expected to open in October 2015 and produce one million tires a year. “It is part of the overall growing automotive and automotive-related industry we see here in the Southeast,” he said. “Yokohama is locating right in the heart of the Southeast auto corridor so they can spoke out and hit all the major manufacturers.” Besides automotive, Moon said there are other areas of business expansion in the state. “We have seen continued expansion in the specialty metal fabrication

Workers trained in automotive manufacturing can use their skills in other industries.

See

AUTOMOTIVE, Page 11

February 21 2014

Navy supercomputing power to grow Photo courtesy of NAVY DSRC

Fred Haise was honored with the computer being named for him: From left: Dr. Richard Gilbrech, NASA SSC director; Dr. Bill Burnett, deputy commander/technical director, commander, Naval Meteorology and Oceanography Command; Fred Haise; John West, director, DoD High Performance Computing Modernization Program Ofﬁce, Vicksburg.

The U.S. Navy DoD Supercomputing Resource Center at Stennis Space Center, one of the top 20 supercomputing sites in the world, is adding even more computer power. Starting in August, the new $21.8-million computers from Cray Inc. will be put to work performing large-scale scientific calculations for Department of Defense researchers around the county. “We have a customer base of 1,100 users. Our customers utilize high-performance computing in support of over 200 Defense projects,” Tom Dunn, director of the Navy DSRC, said. The Navy DSRC is one of five supercomputing centers established by the DoD and has 55 employees. A portion of its workload is running mathematical models of the world’s oceans each day to keep the Navy’s fleet operating safely. The U.S. Navy needs real time information on the ocean environment and what conditions are predicted to look like in the next 10 days, said Dr. William Burnett, deputy commander and technical director of the Commander Naval Meteorology and Oceanography Command at Stennis. The ocean model uses observations collected by sensors measuring ocean currents, temperature and salinity to produce forecasts of waves and ice, among other conditions. The information gives the Navy’s submarines and surface fleet operating around the world what Burnett calls “the home field advantage at away games.”

AUTOMOTIVE

Mississippi Business Journal

ECONOMIC DEVELOPMENT

TECHNOLOGY

By LISA MONTI I CONTRIBUTOR mbj@msbusiness.com

“Our customers utilize high-performance computing in support of over 200 Defense projects.” Tom Dunn Director, Navy DSRC

One brand new tool the Navy is using to collect data is a torpedo-like underwater glider that uses buoyancy-based propulsion to travel around the ocean. "We deploy them, they move around for around 30 days down to 1,000 feet and then surface," Burnett said. The Navy runs its newest global ocean prediction system, the groundbreaking Hybrid Coordinate Ocean Model, which gathers information from all areas of the ocean on the Navy DSRC computers. Any discussion of supercomputing involves the use of superlatives and includes highly technical references such as the teraflops. The Navy DSRC’s current supercomputing capacity is 954 trillion floating point operations (teraflops) a second. The Navy provided this more down-toearth equivalent: 100 high school students with handheld calculators would take nearly 317 years to perform the number of calculations a one teraflop-rated computer can accomplish in one second, and almost

Continued from Page 10

area, some improvement in aerospace production and in shipbuilding,” he said. Such variety in manufacturing prevents dependency on one sector. “We have broad based manufacturing that is not too top heavy” in one area, he said. Advanced manufacturing requires a well trained workforce with special skill sets to meet demand. “All across the region we are

275,000 years to do what the new Navy DSRC supercomputers can do every second. By August 2014, the Navy DSRC's capacity will increase to over 2,400 teraflops. Burnett said the Navy is making “a concerted effort” to name its new supercomputing systems after NASA astronauts who served in the Navy, including Biloxi native Fred Haise, a naval aviator who flew on the Apollo 13 mission. The two other systems are named for retired Navy Cmdr. Susan Still Kilrain, a naval aviator and space shuttle pilot, and retired Navy Capt. Eugene Cernan, a naval aviator and the last man to step foot on the moon. Burnett said the next two systems will honor Alan Shepard, the first American in space and one of NASA’s first seven astronauts, and Neil Armstrong, the first person to walk on the moon. “It’s another way to show our close relationship with NASA,” Burnett said.

putting a lot of emphasis on workforce development,” Moon said. Industrial technicians, welders and other workers in the advanced manufacturing ﬁeld have to have a higher skill level than ever before. Workers trained in auto manufacturing can use their skills in other industries. “Once you get a skill set, that can attract other kinds of businesses in the area,” he said. The unprecedented winter storms this year

Moon

MDA tabs nine industrial sites for development grants The Mississippi Development Authority has awarded nine site development grants to economic development entities throughout the state. The matching grant program assists nonprofit economic development organizations or local governments in preparing available greenfield sites for industrial development. The program is open to all economic development organizations and units of local government. The MDA’s Grants Review Committee reviews applications and selects grant recipients. The committee examines each application’s proposed site development and its potential for improving industrial recruitment efforts. Applicants can only apply for one project and must match state grant dollars 1:1. Individual county projects are eligible for a maximum of $25,000 in matching funds from MDA, and multi-county proposals are eligible for up to $35,000 in matching funds. Recipients of Site Development Grant Program funds for 2013 are: • Panola Partnership • Washington County • Booneville-Prentiss County • Madison County Economic Development Authority • Winston County Economic Development Partnership • Brookhaven-Lincoln County Chamber and Industrial Development Foundation • Economic Development Authority of Jones County • Area Development Partnership • Hancock County Port and Harbor MDA Executive Director Brent Christensen said the MDA’s site development grants are a resource for economic development organizations to access in order to increase their competitiveness in attracting new industry to their regions. “Companies often seek locations that are shovel-ready so they can begin construction immediately, and this grant program assists in creating more shovel-ready sites throughout the state,” he said. Economic development organizations and local governments interested in learning more about the site development grant program are encouraged to contact their MDA regional office. A map of MDA’s regional offices and their contact information can be found at http://www.mississippi.org/existingbusiness/regional-offices/.

might also get manufacturers to consider moving South, where conditions haven’t been as bad. “This winter has really hammered the Midwest and other parts of the U.S. and had an impact on production,” Moon said. The Southeast is attractive to manufacturers for several reasons, Moon said. “Workforce, location and infrastructure are creating very good opportunities for either domestic business to expand or relocate and international business to expand or come to the U.S. market, and Mississippi is a strong part of that attraction.”

12 I Mississippi Business Journal I February 21, 2014 ECONOMIC DEVELOPMENT

MEC promotes Waller to COO, Powell to VP The Mississippi Economic Council has promoted Scott Waller to executive vice president and chief operating officer, and Vickie Powell to senior vice president for foundations. Waller previously was senior vice president for public affairs. He is a Shubuta native and joined the MEC in 2006, where he oversaw public affairs, Waller policy and communications. He is a graduate of Mississippi State University, and graduated from the Institute of Organizational Management in 2011. Prior to MEC, Waller enjoyed a 20-year career as a newspaper journalist, including serving as business editor of the Clarion-Ledger in Jackson and sports editor for the Powell Commercial Dispatch in Columbus. Powell joined MEC in 2006 as program manager, later serving as vice president for Foundation programs, where she had primary responsibility for the Public Education Forum of Mississippi and M.B. Swayze Educational Foundation — Student Achievement Recognition (STAR) programs. The STAR program has saluted the academic achievements of the state’s outstanding high school students and teachers from more than 300 public, private, and parochial schools for over 45 years. Additionally, she oversees Mississippi Scholars in more than 80 school districts and over 160 high schools both public and private across the state and the recently announced Mississippi Scholars Tech Master Program, launched in seven pilot counties in 2014. Her work experience includes more than 15 years in human resources, business development and corporate affairs. Powell is a 1980 graduate of Jackson State University with a degree in mass communication. She is a native of Jasper County.

HEALTHCARE

McComb hospital forced to part with 5 doctors’ Faced with the reality of shrinking reimbursements from the federal government for health care and rising costs as a result of the new Affordable Care Act, Southwest Mississippi Regional Medical Center has ended its employment with five physicians and is re-evaluating all hospital employee doctors’ contracts. Southwest Health System CEO Norman Price explained that when insurance companies were leaving Mississippi because of increased rates of lawsuits, the hospital offered to step in.

— from staff and MBJ wire services

BANKING AND FINANCE

Banking at post office… Payday lenders more accepting of idea than bankers » The Postal Service calls simple financial services the single best new opportunity for the posts to earn additional revenue.’ By TED CARTER I STAFF WRITER ted.carter@msbusiness.com The U.S. Postal Service may soon take financial services where traditional banks are no longer eager to be — low- and moderateincome neighborhoods in Mississippi and elsewhere around the country. Savings accounts, debit cards and small loans would become as common place at some post offices as Forever Stamps and parcel packages. Advocates for people who lack such financial services hail the prospect of Postal Service banking as a sorely needed lifeline. “It seems to be a really interesting and natural fit for the clients that would be served,” said Paheadra Robinson, the Mississippi Center for Justice's director of consumer protection. On the other hand, the banking industry is hardly doing cartwheels over the prospect of a new player in financial services, even if the entry is into markets banks have departed and left to alternative providers such as payday lenders, pawn shops and check cashing stores. The post office doing loans, the American Bankers Association said, is the “the worst idea since the Edsel,” referring to the 1959 Ford car model long considered the automotive industry's biggest sales disaster. “Dangerous” and “foolhardy” were among other descriptions with which the ABA greeted a U.S. Postal Service inspector general proposal that post offices add financial services in zip codes lacking adequate financial services. “This would be like the banking industry moving into running the airlines,” said Richard Hunt, president of the Consumer Bankers Association, an organization that bills itself as the voice of the retail banking industry. Advocates for expanding the role of post offices in distressed neighborhoods say the objections of bankers have more to do with their wanting to retain the option of reclaiming the under-served markets at some point. That’s understanble considering that at stake is a population the inspector general put at a quarter of all households, or about 68 million adults. With its brick-and-mortar infrastructure already in place, the Postal Service calls simple financial services “the single best new opportunity for the posts to earn additional revenue.”

Languishing market Branch closings have been the go-to remedy for traditional banks struggling with low loan rates, low loan demand and higher regulatory and technology expenses. Mississippi lost a net of 41 branches from June 30, 2011, through June 30, 2012, figures from the FDIC compiled by SNL Financial show. Mississippi is also the headquarters home of two banks among the nation’s top branch closers in that period — Gulfport's Hancock Holdings with 30 closings and an 8th-place ranking and Tupelo's BancorpSouth with 21 closings and a 12th-place ranking. Birmingham, Ala.'s Regions Financial, which is among the market leaders in Mississippi, had 107 fewer branches serving low-and-moderate income neighborhoods in 2010 than it did in 2008, according to SNL Financial. Regions disputed the closing numbers presented by SNL, saying the business data research firm overstated the figures. The ABA insisted the branch closings across the county must be considered in the context of the crisis the financial services sector endured toward the end of the last decade. Considering the industry had more than 95,000 branches and the collapse of several hundred banks, it’s not surprising that branch closings would occur, the ABA says. Mac Deaver, president of the Mississippi Banking Association, did not return several telephone calls seeking comment. Charles Elliot, president and CEO of the Mississippi Credit Union Association, declined to comment.

Regulatory concerns Mississippi Banking Commissioner Jerry Wilson does not expect the state will regulatory authority over the Postal Service financial services operations, though the short term, low-dollar nature of the lending may create a need for some oversight. “If they are going to compete with payday lenders, they would probably have to have an application through us.” Wilson said he expects the lending part will pose the most challenges, especially in having trained personnel. “You’ve got to have skilled people” who are as adept at collecting as they are in making loans, said Wilson, who retired as president and CEO of Macon’s BankFirst before becoming banking commissioner in spring 2012. The Postal Service will also need to have Saturday morning and afternoon hours, a time in which most working people are free to make transactions, he noted. Wilson said it is too early to judge the IG’s proposal. It has too many “unanswered question to say it would be a good plan,” he said. Payday lending executive Jamie Fulmer of Spartanburg, S.C., sees merit in the Postal Service proposal, especially in its potential to bring services to neglected communities. The regulatory end is a concern, however, said Fulmer, public affairs senior vice president for Advance America, Cash Advance Centers. “I think it is yet another independent voice articulating the need for consumers to have access to short-term credit,” he said. “We think that if the post office or anyone else can offer a competitive product into the market that consumers can afford, that is a good thing.” Payday lenders in Mississippi fall under state laws that restrict loan amounts, See

BANK, Page 13

February 21, 2014

BANK

Continued from Page 12

interest and prohibit rollovers of loans. Fulmer said he would expect any other issuer of short term loans to follow the same rules. â&#x20AC;&#x153;If they start having inconsistent application of rules and regulations, then it becomes a problem,â&#x20AC;? he added. Payday lenders also will soon be subject to regulation by the federal Consumer Financial Protection Bureau. Those rules set by the CFPB should also apply to the Postal Serviceâ&#x20AC;&#x2122;s short term, low-dollar lending, Fulmer said. Fulmer said he sees no way for the Postal Service to make money on short term loans at 10 percent of the cost of payday loans. â&#x20AC;&#x153;If they think they are going to raise $9 billion (annually) that math doesnâ&#x20AC;&#x2122;t add up.â&#x20AC;? A more realistic yearly earnings estimate, he said, is about $900 million. Just what fees the Postal Service would charge on short-term loans is a concern for the Mississippi Center for Justice, said Paheadra Robinson, the organizationâ&#x20AC;&#x2122;s director of consumer protection. â&#x20AC;&#x153;Thatâ&#x20AC;&#x2122;s one of the things weâ&#x20AC;&#x2122;d like to know more about,â&#x20AC;? she said. â&#x20AC;&#x153;In order to provide these services to the community, would they be charging a lot of the fees that alternative providers are charging?â&#x20AC;? In its report, the Inspector Generalâ&#x20AC;&#x2122;s Office said the shorter-term, small-dollar loans would be made to people who have their paychecks directly loaded onto a Postal Service pre-paid card and have received at least two straight payments. â&#x20AC;&#x153;People could borrow up to 50 percent of the gross paycheck,â&#x20AC;? the report said. â&#x20AC;&#x153;Every borrower would be required to pay a minimum of 5 percent of their gross paycheck until the loan is paid offâ&#x20AC;Ś. The Postal Service would automatically withhold loan payments from borrowersâ&#x20AC;&#x2122; paychecks before putting the difference on their Postal Card.â&#x20AC;? Using a loan of $375 as an example (based on 50 percent of a bi-

weekly paycheck for a person earning $18,000 a year) the borrower would pay $38 from each paycheck. â&#x20AC;&#x153;If the Postal Service charged a $25 upfront loan fee and a 25 percent interest rate, the borrower would pay off the loan in 5 Â˝ months, paying a total of $48 in interest and fees across the life of the loan,â&#x20AC;? the IG report said. The $48 is â&#x20AC;&#x153;less than a tenth of the fees charged for a typical payday loan of the same size,â&#x20AC;? the report added. Loan defaulters could potentially be subject to Treasury withholding of IRS refunds, according to the report. As part of establishing the service, the Postal Service would seek partnerships with the financial sector to provide the backend for some of the services, including Postal Cards, setting up and managing Web and mobile access, servicing the accounts and loans, and possibly funding and holding the loans on their balance sheets,â&#x20AC;? the IG said.

Will it happen? The Postal Service itself has not committed to any course that would lead it into the financial services sector. The agency did not take part in the development of the IGâ&#x20AC;&#x2122;s white paper. â&#x20AC;&#x153;We appreciate all innovative ideas to generate revenue and enhance our customerâ&#x20AC;&#x2122;s experience and we are reviewing the recommendations of the OIG paper,â&#x20AC;? Postal Service spokesman Dave Partenheimer said in an email. The Washington Post reports that Congress would have to authorize the Postal Service expansion into financial services. That would face long odds, according to The Post, noting the contentious wrangling in Congress over the future of the Postal Service. The IG report points out, however, that â&#x20AC;&#x153;given that the Postal Service is already providing money orders and other types of non-bank financial services, it could explore options within its existing authority.â&#x20AC;?

Mississippi Business Journal

AVIATION

Tupelo plant receives three Airbus planes for disassembly TUPELO â&#x20AC;&#x201D; Three aircraft destined for disassembly and sale have arrived at the Universal Asset Management facility in Tupelo, according to a release from the Memphis-based firm. An Airbus A300 previously operated by Monarch Airlines, an Airbus A330 previously operated by Malaysia Airlines and an Airbus A340 previously operated by Lufthansa will be inducted into UAMâ&#x20AC;&#x2122;s End-of-Life Recycling Process and the components that are removed from the aircraft will be added to UAMâ&#x20AC;&#x2122;s Airbus aftermarket component inventory. â&#x20AC;&#x153;This is an exciting time for UAM as we continue to increase the number of aircraft arriving for disassembly,â&#x20AC;? said Keri Wright, chief operating officer at UAM. â&#x20AC;&#x153;These three wide-body aircraft arrived at our disassembly facility within a few days of each other, and we have already initiated the disassembly process.â&#x20AC;?

TECHNOLOGY

Three Miss. cities first to get C Spire fiber RIDGELAND â&#x20AC;&#x201D; Neighborhoods in Horn Lake and Starkville and the entire town of Quitman are the first three Mississippi cities to exceed requirements and qualify for C Spireâ&#x20AC;&#x2122;s high-speed fiber network to the home. A Ridgeland neighborhood is expected to qualify later this week. A specified percentage of homeowner pre-registrations was needed to qualify for the 1 Gigabit per second Internet service. The three area met their targets over the weekend, paving the way for C Spire to launch the engineering and construction phases of its fiber optics technology initiative. The 1 gig Internet speed will be up to 100 times faster than national average broadband speeds.

â&#x20AC;&#x201D; MBJ staff

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February 21, 2014 • MISSISSIPPI BUSINESS JOURNAL • www.msbusiness.com

AN MBJ FOCUS:

SMALL BUSINESS

They MIND the store

Courtesy of Think Webstore

Think Webstore members include, from left, Matthew Jackson, Erica Robinson, Josh Edmiston, Sweta Desai, John Wade, president and CEO Bryan Carter, John Dietrich, Aaron Atkins

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ferent premise — combining creative, technology and the business side for clients, and has already won Addy and Telly awards. President/CEO Bryan Carter says Think Webstore is a full-service marketing and media company, offering marketing strategy, website design and

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Having multiple disciplines creates a stronger team, he feels, and is the direction things are going in the marketing world. “The right disciplines give you insightful advantages and nimbleness in any market space. You have to be able to plan your move and execute before the competition knows what happened.” Carter sees the traditional way of doing things changing as the trend moves toward what works. “Like water seeking down. In our model we combine the benefits of a marketing and advertising agency, a technology company, and a business consulting firm,” he said. “Our equation is direct and delivers. It just makes sense, but most importantly, it is resonating with clients.” However, in this new environment there is still a need for personal relationships. “At Think Webstore we foster an environment of creative encouragement. We build relationships naturally through team problem solving,” Carter said. “Having the right people in an enabling environment is the only way to make this work.” Think Webstore’s recent project for M&F Bank is an example of how this multi-discipline team works with a traditional business. “We were the marketing and advertising arm of the equation that took them from a precarious position to that of being highly acquirable in about 16 See

THINK, Page 16

SMALL BUSINESS

February 21, 2014

Mississippi Business Journal

Innovate provides startup support By BECKY GILLETTE I CONTRIBUTOR mbj@msbusiness.com

â&#x20AC;&#x153;Mississippi is becoming an advanced manufacturing juggernaut in the transportation sector.â&#x20AC;? â&#x20AC;&#x201D; Jay Tice, Vice president, Innovate Mississippi and Oxford economic developer Jon Maynard to bring Startup Weekend to Oxford for the first time,â&#x20AC;? said Tasha R. Bibb, entrepreneurial development manager, Innovate Mississippi. â&#x20AC;&#x153;The motto of Startup Weekend is, â&#x20AC;&#x2DC;No talk, all action.â&#x20AC;&#x2122; â&#x20AC;&#x153;The first night, 20 entrepreneurs pitched their business ideas, and of those, 10 were chosen to develop into companies. They included a dating app that would pair users based on similar tastes in music; an app that would compare auto deals so users could make better informed decisions; and a website that would connect users to upand-coming music artists. Groups were formed and those 10 ideas were then further developed.â&#x20AC;? Business experts from the community served as speakers, mentors and judges, and provided professional advice to the teams and helped fine tune the final pitches made

to the judges Sunday evening. The two runners-up were Safety Check, a software package that finds gaps in security systems, and ScooterSquad, a business that would deploy scooter rental stations within a community. The grand prize winner was Social Sherlock, a game that reconnects Facebook friends via a guessing game to spark conversation. Winners receive free legal, accounting and marketing assistance and office space. â&#x20AC;&#x153;We were very happy with the turnout for the event,â&#x20AC;? Bibb said. â&#x20AC;&#x153;We had 50 entrepreneurs participate in the competition, plus members of the community who attended and showed their support.â&#x20AC;? Mississippi has had an economic development focus geared towards advanced manufacturing for many years in an effort to draw industries to the state that create higher-paying jobs that could improve the

F OR OR S LE AL AS E E

Mississippiâ&#x20AC;&#x2122;s efforts to create a positive climate for new startup companies and in advanced manufacturing earned it two top five in the nation rankings this past year. Mississippi was ranked fifth in the nation for the most business startup activity in 2012, according to the Ewing Marion Kauffman Foundation Index of Entrepreneurial Activity. And in November 2013, Expansion Solutions magazine gave the state a â&#x20AC;&#x153;Top Five Award of Excellenceâ&#x20AC;? in advanced manufacturing. Innovate Mississippi, formerly the Mississippi Technology Alliance, has been working for years to help entrepreneurs hone their business plans, obtain financing and launch successfully into the marketplace. The most recent effort along those lines was the Oxford Startup Weekend held Feb. 7-9 on the campus of the University of Mississippi at the Innovation Hub at Insight Park. The Oxford Startup Weekend was the fifth Startup Weekend event Innovate Mississippi has coordinated since 2012. â&#x20AC;&#x153;We worked closely with university staff

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stateâ&#x20AC;&#x2122;s low rankings in per capita income. It is clear those efforts are paying off, said John J. "Jay" Tice IV, Ph.D., vice-president, Innovate Mississippi and director of InnovateMEP Mississippi (formerly the Manufacturing Extension Partnership of Mississippi). â&#x20AC;&#x153;Mississippi is becoming an advanced manufacturing juggernaut in the transportation sector: Automotive â&#x20AC;&#x201D; Nissan, and Toyota and their respective advanced manufacturing Mississippi suppliers; shipbuilding â&#x20AC;&#x201D; Huntington Ingalls and its advanced manufacturing Mississippi suppliers; and aviation â&#x20AC;&#x201D; G.E. Aviation and Aurora Flight Sciences Corporation,â&#x20AC;? Tice said. The top five award in advanced manufacturing says Mississippi is doing a lot of the right things, said Jay Moon, president and CEO OF Mississippi Manufacturers Association. â&#x20AC;&#x153;We have to keep doing the right things,â&#x20AC;? Moon said. â&#x20AC;&#x153;You canâ&#x20AC;&#x2122;t get an award like this and sit back and say, â&#x20AC;&#x2DC;We are there.â&#x20AC;&#x2122; It is a continuously evolving process to stay competitive in a global marketplace. Advanced manufacturing is our future, not just in See

INNOVATE, Page 16

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SMALL BUSINESS

16 I Mississippi Business Journal I February 21, 2014

INNOVATE

Continued from Page 15

Mississippi, but the country as a whole.” Advanced manufacturing requires higher skills from employees including the ability to work with computers, and quickly develop new prototype products. The key to that is workforce training. Moon gives a lot of credit to the governor and legislative leaders who several years ago authorized special funding for workforce enhancement training. About $15 to $20 million per year is allocated to community colleges to do workforce training. “State leaders all recognize how important workforce development training is, and support continued resources for the programs,” Moon said. Moon, who is chair of the Mississippi Workforce Investment Board responsible for coordinating all workforce development programs in the state, said the state’s 15 community colleges do an outstanding job providing training, working with the business community to make sure the training is exactly what the community needs. “That is a strong point we have in our favor in the continuous development of our skills not only for kids just out of high school, but returning veterans, people who are changing jobs, and graduates with college degrees who haven’t

been able to get a job and want to go back to community college to get some skills-based training,” Moon said. “The need for workforce training is every day, every week and every month. We are fortunate to have the resources and the great service providers like the community colleges that are doing that.” Moon said another positive is that as of July 1, a 1.5 percent sales tax on energy used in the manufacturing process is being eliminated. The legislature passed a law dropping the tax after learning that Mississippi was one of the few states in the country to charge such a tax. The future looks bright for advanced manufacturing and other types of manufacturing in the U.S. because more domestic oil and gas reserves are being developed with fracking and horizontal drilling technologies. Moon said reducing the costs of energy has made the U.S. an increasingly attractive market for both domestic and international investment. “That is why we are seeing companies coming back to the U.S. from China,” Moon said. “About a third of the energy consumed in this country is consumed by manufacturers. Low energy prices are very important to manufacturing and are good not just for existing manufacturing, but for the ability to attract new manufacturing into the U.S.”

THINK

Continued from Page 14

months. Our (M&F Bank’s) percentage stock growth outperformed everyone in the market, growing from $3.06 to $8.45 (just over 175 percent) the day before an intent to merge was announced,” Carter said. “At that point, they entered into a highly lucrative acquisition by Renasant Bank involving a stock transaction estimated at more than $140 Million.” Think Webstore is also working for new companies. They had the opportunity to write an article for Mississippi’s first ABC Shark Tank candidate in February 2013, Muddy Water Camo, who ultimately did not make a deal with the Sharks, but benefited from the exposure. Less than a year later, Think Webstore had the rewarding experience of having an existing client, FMD Organizers, take LockerBones (www.lockerbones.com) on Shark Tank and make a deal. “Think had already built an e-commerce site for the LockerBones locker shelving system. To prepare for the airing we had to make significant server preparations in anticipation of the ‘Shark Tank Effect’ where millions viewers flood the site both during the show and after the show airs,” Carter said. Press releases were sent announcing the airing and stories were written. A Shark Tank airing party was prepared, and a crew from

the local ABC affiliate showed up. “During the LockerBones premiere, web traffic immediately spiked with tens of thousands of visitors drawing nearly a million hits in just minutes,” Carter said. “And, LockerBones is still benefiting from strong numbers with between 700 and 1,000-plus unique visitors on the website daily.” While Think Webstore has experienced 100 percent-plus annual growth in multiple years, Carter says the growth plan remains flexible. “We want to maintain the culture that has been a driver for Think’s success and take on clients that are seeking our brand of expertise in a marketing partnership,” he said. “With the right kinds of challenges our team is doing more than just going to work every day. Think is constantly nurturing a culture in business life that naturally inspires creativity, productivity, and the ability to quickly execute ideas.” Carter has degrees in computer science and instructional technology. Early in his career, he earned recognition as an interactive media designer and usability engineer. Prior to founding Think Webstore, he served as a director for two internet companies and as vice president for a nationally recognized advertising agency. He has worked for IBM, AT&T and NCR in multimedia, interactive learning and organization development, and has consulted with multiple Fortune 500 companies, including Home Depot, ETS and Citigroup in the areas of e-commerce, e-learning and e-business transformation.

SMALL BUSINESS DEVELOPMENT CENTERS Center

February 21, 2014

Mississippi Business Journal

Address

Gulf Coast Small Business Development Center

Phone

1636 Popps Ferry Rd., Ste. 227, Biloxi, MS 39532-2779

(228) 396-8661

206 Hwy. 51 N., Batesville, MS 38606

(662) 915-1291

Jackson State University Small Business Development Center

152 Watford Pkwy. Dr., Canton, MS 39046

(601) 979-2795

Jones County Junior College Small Business Development Center

412 Courthouse Sq., Columbia, MS 39429

(601) 477-4235

52 9th St., Decatur, MS 39327

(601) 635-3297

Jones County Junior College Small Business Development Center

72 Technology Blvd., Ellisville, MS 39437

(601) 477-4235

University of Mississippi Small Business Development Center-Grenada County

1050 Fairﬁeld Ave., Grenada, MS 38902

(662) 915-1291

Jones County Junior College Small Business Development Center

118 College Dr., Hattiesburg, MS 39406

(601) 477-4235

University of Mississippi Small Business Development Center-DeSoto County

370 W. Commerce St., Hernando, MS 38632

(662) 915-1291

University of Mississippi Small Business Development Center-Holly Springs

305 E. Van Dorn, Holly Springs, MS 38635

(662) 915-1291

University of Mississippi Small Business Development Center-Panola County

East Central Community College Small Business Development Center

Jackson State University Small Business Development Center Mississippi State University Small Business Development Center

1230 Raymond Rd., Jackson, MS (601) 979-2795 1901 Front St., Meridian, MS 39301

(601) 693-1306

6619 S. Cockrum, Olive Branch, MS 38654

(662) 915-1291

Hinds Community College Small Business Development Center

3805 Hwy. 80 E., Pearl, MS 39208

(601) 936-1817

Hinds Community College Small Business Development Center

1500 Raymond Lake Rd., Raymond, MS 39154-1100

(601) 857-3536

222 Ward St., Senatobia, MS 38668

(662) 915-1291

100 Research Blvd., Starkville, MS 39759

(662) 325-8684

398 E. Main St., Tupelo, MS 38801

(662) 680-6988

122 Jeannette Phillips Dr., University, MS 38677

(662) 915-1291

7181 Delta Bluff Pkwy., Walls, MS 38680

(662) 915-1291

610 Azalea Dr., Waynesboro, MS 39367-2604

(601) 477-4235

University of Mississippi Small Business Development Center-DeSoto County

University of Mississippi Small Business Development Center-Tate County Mississippi State University Small Business Development Center University of Mississippi Small Business Development Center/Business Assistance Center University of Mississippi Small Business Development Center-Lafayette County University of Mississippi Small Business Development Center-DeSoto County Jones County Junior College Small Business Development Center

Information for this list was gathered from the Mississippi Small Business Center Network and other reliable sources. SBDCs are arranged in alphabetical order by location. For questions and comments, contact Wally Northway at research@msbusiness.com.

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NEWSMAKERS

February 21, 2014

Mississippi Business Journal

Clinic welcomes Martin

Turner selects Hill

Purvis merits promotion

Walton to lead school

Tandy L. Martin, CNP, recently joined Hattiesburg Clinic urology as a nurse practitioner. Martin received her bachelor of science in nursing and her master of science in nursing from the University of Southern Mississippi. She is a board-certified nurse practitioner and registered nurse.

Jaime M. Hill, director of postdoctoral development for the William Carey University College of Osteopathic Medicine (WCUCOM), has been appointed by dean of the WCUCOM Dr. Jim Turner to serve as the dean’s designee to the Office of Mississippi Physician Workforce (OMPW). Hill began working at the WCUCOM in 2010, and has served in her current role since March 2013. During the OMPW’s December Hill advisory board meeting, Hill was elected by the advisory board to serve as a member of the board’s executive committee.

Keith Purvis, PE, has been promoted to vice president of transportation of Neel-Schaffer. Purvis joined Neel-Schaffer in 2011 after retiring from the Mississippi Department of Transportation as an assistant chief engineer. Purvis leads NeelSchaffer’s transportation department, working out of the firm’s headquarters office in Jackson. His work includes designbuild bridge widening projects on I-55 in Pike County and I-20 Purvis in Newton County, the U.S. 45 Columbus Bypass, the Mississippi State Port at Gulfport and the statewide Ports Study. Purvis is a graduate of Mississippi State University. He is a licensed professional engineer in Mississippi and South Carolina.

Jason Walton, Ph.D., has been named the sixth head of school at Jackson Preparatory School. Walton succeeds Susan Lindsay, head of school since 2004, who will retire in June after serving the school for 40 years in a variety of positions. Walton is a fourthgeneration educator in Mississippi. After receiving his undergraduate and master’s degrees from the University of Mississippi, he began his career in Walton education by teaching high school for four years in north Mississippi. He was accepted in Vanderbilt University’s nationally-ranked Ph.D. program, focusing on K-12 school administration. There he was selected by the chair of the Department of Leadership, Policy, and Organizations to serve as associate editor of the Peabody Journal of Education. Subsequent to full-time doctoral work in Nashville, Walton served as assistant director of Tennessee’s Office of Education Accountability. While serving in Tennessee, he was recruited to serve as director of strategic initiatives at Lynn University in Boca Raton, Fla. In 2006, he was named chief of staff and staff liaison to the board of trustees at Lynn. Walton’s wife, Laurie, has taught for many years at an independent K4-12 Christian school in West Palm Beach, Fla., as a high school geography and advanced placement world history teacher. They have two children, Caroline, 10, and John, five.

Martin

Schloegel receives gavel During the Partners for Stennis recent annual meeting, outgoing chairman Al Watkins of A2R at Stennis passed the gavel to the newly elected chairman Mark Schloegel. Schloegel is an account executive at Stewart Sneed Hewes Insurance in Gulfport. This year’s board of directors will include Jason Brady with AB Computer Solutions; Mike Haas with Haas and Haas Attorneys; Dave Hartley with Lockheed Martin; Jim Conner with SAIC; Keith Beck with Jacobs; Dave Treutel Jr. with Treutel Insurance Agency; Billy Walley with Billy Walley Attorneys; Guy Johnson with Coast Electric Power Association; Ernie Lovell with the PRCC Development Foundation; Michael McDaniel with Aerojet Rocketdyne; Debbie Benefield with Mississippi Power Company; Ned Peak with Edward Peak and Associates; Lee Reid with Adams and Reese; and Clay Wagner with Hancock Bank. Also, Myron Webb, NASA legislative affairs officer, recently retired from NASA after 29 years. The board unanimously named her as a lifetime honorary member of Partners for Stennis to thank her for her work over the years.

Anderson made Fellow The 2014 Jury of Fellows from the American Institute of Architects (AIA) has elevated Allison Hoadley Anderson, FAIA, to its prestigious College of Fellows, an honor awarded to members who have made significant contributions to the profession. She is the only architect recognized from Mississippi this year, and one of a class of 139 new Fellows. Anderson is recognized for Anderson civic projects. After Hurricane Katrina devastated her community, designs for recovery focused attention on sustainability, adaptation and resilience. The firm she founded in Mississippi in 1995, unabridged Architecture, has been recognized for excellence in the design of community shelters, commercial and mixed-use structures, historic preservation, and civic buildings. The firm was selected by the U.S. Department of Housing and Urban Development for the Rebuild by Design competition to improve community resilience in the Hurricane Sandy-affected region. Anderson will be honored at an investiture ceremony at the 2014 National AIA Convention and Design Exposition in Chicago.

Foundation holds elections The Mississippi State University Foundation has named five new members to its 46-seat board of directors. The MSU alumni include: David B. Hall of Meridian, CEO of Hall Timberlands; Malcolm B. Lightsey Sr. of Ridgeland, retired president and CEO of SunTech Inc.; John R. Lundy of Jackson, partner for Capitol Resources LLC; Cynthia M. Stevens of Alexandria, Va., management principal for government relations with Deloitte LLP; and Anthony L. Wilson of Atlanta, Ga., executive vice president of customer service and operations for Georgia Power Co. Returning members for 2014 include: James W. Bagley of Trophy Club, Texas, retired executive chairman of the board of Lam Research Corp. in Freemont, Calif.; D. Hines Brannan Jr. of Atlanta, Ga., retired managing director of Accenture; George W. Bryan of West Point, owner of Old Waverly Golf Club; James E. Newsome of Washington, D.C., partner at Delta Strategy Group; and J.F. "Bud" Thompson Jr. of Meridian, partner with Thompson Limited Partnership of Meridian. In addition to board members, the MSU Foundation re-elected last year's officers to another one-year term. They include: president Bobby S. Shackouls of Houston, Texas, retired chairman, president and CEO of Burlington Resources Inc.; vice president Earnest W. "Earnie" Deavenport Jr. of Kiawah Island, S.C., and Banner Elk, N.C., retired chairman and CEO of Kingsport, Tenn.-based Eastman Chemical Co.; and treasurer Mary M. Childs of Ripley, president, CEO, COO and vice chairman of the Peoples Bank. John P. Rush, MSU vice president for development and alumni, is the foundation board's CEO. David Easley, executive director of finance, is its chief financial officer, and Jack McCarty, executive director of development, is board secretary.

Hurst, Lott recognized Olivia Ann Hurst and Catherine Lott, staff members at the University of Southern Mississippi, were recognized at the Pine Belt chapter of Public Relations Association of Mississippi (PRAM) annual awards banquet. Hurst received the Burlian O’Neal Walker Professional Promise Award, which recognizes potential in the field of public relations. She serves as the social media specialist in the Office of University Communications at Southern Miss. Lott, communications coordinator at the DuBard School for Language Disorders at Southern Miss, received the Spark Award of Excellence for a Public Relations Campaign Over $5,000 for the DuBard School Speakeasy.

Sellers makes donation Mississippi State University forest products professor emeritus Terry Sellers Jr. recently donated his professional archives to the Forest History Society Library in Durham, N.C. A Sharp Professor of Forest Products, Sellers worked at MSU as a researcher and educator for 24 years before retiring in 2004. He studied natural and synthetic adhesives and engineered wood products, such as particleboard, plywood and laminated beams and arches. Sellers’ book, “Plywood and Adhesive Technology,” has received worldwide praise. Many of his publications have been translated into Japanese and Spanish. He has worked as a private consultant for academic, governmental and industry clients in 16 countries. During his tenure at MSU, he received a patent on his work with kenaf, a fibrous plant similar to bamboo. Sellers is the past president of the International Forest Products Society and has been honored by the U.S. Department of Commerce for international standards work. He has also received accolades from Shell Oil Co. for adhesive research and the Forest Products Society for outstanding service to the profession. In 2006, Sellers was named Outstanding Alumnus in Auburn University’s College of Forestry and Wildlife Sciences.

Anderson goes to Baptist Chris Anderson, CEO of Singing River Health System (SRHS) since 1998, has left to take a similar position at Baptist Health Systems in Jackson. Anderson originally came to SRHS in 1994 as controller. He steadily moved through the administrative ranks until being appointed CEO on June 1, 1998. Kevin Holland, currently COO/operations, has been named by the board of trustees as interim CEO. Holland is a native of Jackson County and has been with SRHS since 1998.

Gearity serves as editor Dr. Brian Gearity, assistant professor of sport coaching education at the University of Southern Mississippi’s School of Human Performance and Recreation, served as guest editor for the just released edition of the Strength and Conditioning Journal. Gearity opens the special issue with an editorial on coaching education and its growing importance as an area of study.

McCarty made VP Trustmark recently named Cole McCarty as assistant vice president in Tupelo. He is a relationship manager associate with responsibilities in commercial development. A native of Tupelo, McCarty earned a bachelor of science in managerial finance from the University of Mississippi. He is a member of the Lee County Ole Miss Alumni Board and Tupelo Rotary Club. McCarty and his wife, McCarty Megan, have one child.

Sullivan participates in conference Patrick Sullivan, president of the Mississippi Energy Institute, recently participated in the Energy Session at the Mississippi Economic Development Council’s 2014 Winter Conference. Sullivan briefly shared findings from a recent MEI-funded study conducted by Dr. David Dismukes, an economist with the Acadian Consulting Group of Baton Rouge, La., that identified and highlighted specific industrial and workforce opportunities based on the recent boom in U.S. natural gas production and manufacturing — especially energy-intensive manufacturing.

For announcements in Newsmakers; Contact: Wally Northway (601) 364-1016 • wally.northway@msbusiness.com

20 I Mississippi Business Journal I February 21 2014 THE SPIN CYCLE

Media Tips, Crisis Communications & Negative Press, Oh My! s a former journalist, avid writer and lover of well-crafted turns of phrase, I spend a lot of time at our shop coaching, advising and strategizing with companies and organizations on how to come out on top while navigating the pitfalls of tough interviews, simmering crises and negative news. At Deane, Smith & Partners, we have a team of creative communicators who advance these principles each day. In our fastpaced, interactive world, it is critical that you — and your brand — are prepared well in advance of lurking crisis that can sink your reputation, or at the very least put a serious dent in your identity. So, now, the Spin Cycle’s media training 101 is in session. When you or someone from you company is preparing for a media interview, here are the top 10 things to consider as you talk to a reporter: 1. Take control of the interview! While reporters may have a great deal of general knowledge it’s highly unlikely they know as much about your subject as you do. Always go into an interview with the goal of emerging as a subject or industry expert — and leaving as a thought leader. Always give the reporter some background, snapshot or anecdote of the issue, trend, service or product. 2. Be alert and friendly. Maintain a friendly, helpful attitude, regardless of the reporter’s approach, bias or slant. If you provide useful and interesting information, everyone’s needs will be met — and you will solidify your relationship with the reporter. 3. Flag your messaging. Enter the interview with two or three strong messages you want to see in print, broadcast, online or posted socially. Hone them to 12 words or less. Mention your key points at the beginning of the interview, and make sure to refer to them at least twice — or more if possible. When a negative line of questioning hits, you’ll always have these in your back pocket. Call attention to your messaging by using signal phrases such as “What’s important here …”, or “we see a trend developing toward …” or “what I like …” 4. Pause before answering. Give yourself a moment to think before responding to a question. Make sure you know what you want to say and give a solid answer, always. 5. Stay on track. Avoid rambling. If you drift, pause, then refocus the reporter. Use comments like “what is really important here …” or “the point I want to make is …” and then bridge back to one of your key messages. 6. Don’t go off the record. This is a common mistake, and quite frankly, old school. Remember, anything you say — especially evidenced in social media missteps — can, and will, be used against you in the court of public opinion. 7. Don’t repeat a negative — ever! Take the

high road, and travel across the bridge to you key message points. If a reporter badgers you on a point, continue restating the messages, and eventually they will move on. Remember, it may sound awkward during an interview, but when it’s distilled into a sound bite for the evening news or story snippet for the daily paper, the message rings through loud and clear. 8. Always look for the bridge. It’s your lifeline in stormy waters. See No. 7. Remember, the bridge takes you across canyons of negativity, around baseless bias and prickly pejoratives and over rigid, rocky reputation obstacles. 9. The interview is not over until you stop talking. Often, the toughest questions come near the end of the session or a time after the potentially hazardous subject was discussed. Always be prepared — like the good Boy Scout — for these traps, a casual question lobbed after the interview is presumably over. Anything you say is fair game. 10. Know your interviewer | know your audience. In life, it always serves you well to know the background of the person you are meeting. Media imitates life. It’s never impolite to ask their affiliation. In impromptu interviews, especially, it will decipher between activists with an attitude and truly balanced, objective journalists. Now that you have a dose of media training, it’s time to shift into crisis communications mode. Is your organization prepared for a communications crisis? Does the plan include social media? When was the last time the plan was reviewed or updated? Have staff been trained and drilled on the crisis communications plan? If you answered “no,” then it’s time to pull out the crisis communications plan, review it and live it. If you don’t have a plan, you must build one. Now. The likelihood of an organization experiencing some sort of public relations crisis, such as an attack on reputation or an event that disrupts business operations always looms. Add social media and the risk rises drastically. A crisis communications plan is part of an organization’s risk management plan. During a crisis, a company will not have time to figure out how to communicate with staff and the public while conveying important information.

The Building Blocks of a Crisis Communications Plan So what are the essential bricks in the foundation of a strong crisis communications plan? People: You need a well-trained crisis response team made up of business-critical people. The team shouldn’t be just made-up of executives. You need staff that understands the situation at hand. They must be media trained, and able to speak fluently — and intelligently — on behalf of the company.

even those who are not 100 percent objective, are your allies. Remember the golden rule of reputation preservation — an unsolicited third party endorseTodd Smith ment is better than any advertising. Don’t overreact. It’s natural to feel emotional or even use defensive language when attacked, particularly if things get personal. If you can’t be objective (and it’s hard when it’s your business), seek objective advice. Ask for equal time. Most legitimate news sources will give you the opportunity to refute a questionable story. Where facts or details are wrong, your smartest approach is to calmly — and methodically — insist on setting the record straight. Don’t threaten or bully; rather appeal to the journalist’s desire for accuracy. No one wants to get it wrong. Use objective facts and figures. A convincing response is usually one that uses statistics or objective facts and cites sources. Where possible, quote third parties. Corporate recognition, ratings, and recommendations can be useful in making your case. If at fault, apologize. If your organization has made a mistake, admit it and offer a prompt and sincere apology. Avoid weaselly or legalistic language. Take responsibility. Then, take steps to fix the situation or make amends. Look for the opportunities. Public criticism can be a gift in disguise. Think about whether it could be an opportunity to remedy a probNavigating Negative News (N3) The way you handle a negative story can lem or improve your business offering. If apmake a world of difference when a crisis propriate, thank your critics and take arises. Here’s how to respond without fan- advantage of the opening to tout the fix. ning the flames. Always respond. Don’t run. Don’t hide. In Vodka Stained Mic | Vladimir Putin It was Spin Cycle’s worst highlight of the many cases, a lack of response will be seen as a validation of the criticisms, or at best, an Winter Olympics thus far. In a sloppy atinformation vacuum. The sooner the re- tempt at international sports détente, Russsponse, the easier it is to control the situa- ian President Vladimir Putin dropped in on tion. Yet, a speedy reaction is often difficult. U.S. Olympic headquarters to chat about In a high-stakes situation where the facts are the Winter Games and the upcoming Rusunclear, say so, but refute any untruths, and sia-U.S. hockey showdown. He even wore a pledge to march out the supporting infor- red "Happy Valentine's Day from Team USA" pin on his lapel. Talk about internamation quickly. Don’t dignify baseless rumors. One exceptional groveling! Perhaps Putin was aiming tion is the case of an unsubstantiated rumor, to be a hospitable host, but unfortunately he where you risk calling more attention to it came across as a curler who had one too by responding. The same is true of an In- many shots of potato juice. ternet troll. In that case, let the community handle blatant misbehavior, foul language, Todd Smith is president and chief communior abusive comments. Remember, if you cations officer of Deane, Smith & Partners, a fullmust respond, a well-crafted statement such service branding, PR, marketing and advertising firm as “these accusations are meritless” goes a with offices in Jackson. The firm — based in Nashville, long way toward establishing credibility and Tenn. — is also affiliated with Mad Genius. Contact him paving the road to a better reputation. at todd@deanesmithpartners.com, and follow him Let your advocates defend you. If you @spinsurgeon. have trusted clients or customers willing to comment in your defense, let them. The essence of reputation is what others say about you in public, so third parties,

Monitoring: An organization has to be listening at all times. Because of the speed of social media and how quickly a crisis could evolve, it’s mandatory that monitoring systems be in place. Fortunately, there are valuable platforms available for monitoring social channels. Scenarios: To be fully prepared for a crisis, you must to be vigilant with all possible scenarios facing your brand. Anticipate scenarios using a SWOT analysis. You need to understand your organization’s strengths and weaknesses, as well as the threats to it. No scenario should be discredited. Any crisis moments are within the realm of possibility, regardless of how far-fetched they may seem. This is a time to be really honest as an organization. Statements: Having holding statements and solid developed around scenarios will buy you the time you need when a crisis is breaking. Holding statements bridge the gap from the initial crisis breaks to when you can deliver more concrete information and situational analysis. Statements should be prepared for all channels, including social media platforms, and be pre-approved by executives and legal before a crisis strikes. Notification: Getting information out during a crisis is important, and notification systems are critical to getting information out quickly. Websites, phone calls, text messages, e-mails, Twitter, Facebook, LinkedIn and traditional media are all important channels — and a multichannel effort works best. Preparation is key.

February 21 2014

Mississippi Business Journal

» MISSISSIPPI LEADERS by Martin Willoughby

Customer focused A Up Close With ... Frank Fair

Fair grows business

friend of mine shared a quote that has stuck with me, “Salespeople and bartenders make the world go round; the rest of us are just bystanders.” I share this quote in jest to emphasize the point that the ability to sell your product or service is CRITICAL. While this may seem obvious, I have seen far too many entrepreneurs and businesses crash and burn because of an inability to sell. I learned this lesson early in my career. I worked for a venture-backed web services firm in the late 1990’s that had plush offices, cutting-edge technology, and talented people. The one thing we lacked was customers! Unfortunately, a company with great promise simply disappeared and over 100 people lost their jobs. My interviewee this week understands that the secret to success as an entrepreneur is the ability to sell and create great customer relationships. Frank Fair, president of Background Reporters, LLC, knows first-hand the importance of selling as he has worked to build two successful service businesses after working for years in the banking business. Fair is a native of Louisville, Miss., and he went on to earn his undergraduate degree and master’s degree in business from Ole Miss. Out of college, Fair began his banking career like many others in Deposit Guaranty’s management training program. He went on to work for several banks in his 23-year banking career

Title: President, Background Reporters, LLC Leadership philosophy: ”Treat other people with dignity and respect. Be honest and trustworthy in all your business dealings, and apply your faith to your workplace. I try to listen, and learn from others around me.” First Job: “I worked for my grandfather at his men's clothing store, Thornton's Men's Wear, in Kosciusko and also worked for my family's clothing store, The Fair Company, in Louisville.” Proudest Moment as a Leader: ”For two consecutive years after Hurricane Katrina, we took our church youth group, including our three children, to work on rebuilding homes in Bay St. Louis, and Waveland. We also worked as a family for 17 years with Samaritan's Purse Operation Christmas Child growing the project in the middle Mississippi area.” Hobbies/Interests: Fishing, Ole Miss sports and the New Orleans Saints

before taking the leap to become an entrepreneur. Along with a partner, he was part owner and operator of a shipping company called Unishippers. He and his partner built a very successful enterprise by working hard to build a loyal customer base in the very competitive shipping market. Fair later sold his interest in Unishippers to his partner. As he considered what his next venture was going to be, Fair knew that he wanted to find something that he could be passionate about if he was going to sell effectively and compete in the marketplace. In October 2012, after studying a number of businesses, he found his next niche in background screening. He shared,

“Statistics show that 40 percent of all job applicants misrepresent the facts on their applications, and 30 percent contain outright lies. One in three business failures is the result of employee theft.” Fair acquired a franchise from Background Screeners of America, one of the nation's largest background screening companies. His company, which offers 22 different background checks, helps business employers, property managers, schools, and health care workers make better decisions about their potential hires. Being a successful serial entrepreneur is no easy task, so I probed Fair on the secrets of his success. He noted, “I am a very hard

“One in three business failures is the result of employee theft.”

worker, and I’m persistent. I believe in the quality of the background checks our company provides, and I try to deliver exceptional customer service to all our customers no matter how Martin Willoughby big or small.” Fair’s observations reminded me of the old Vince Lombardi quote, “The dictionary is the only place that success comes before work. Hard work is the price we must pay for success.” Fair is not afraid of the hard work it takes to build a business from scratch.Fair noted that his grandfather, Frank L. Fair Sr., had a great influence on him. Fair shared, “He was an individual who had great vision and faith, and invested in people and causes that bettered his community. He actively supported many young people to pursue their education. He provided jobs for numerous people in the community, supported worthy philanthropic causes and had a keen sense of humor and humility when dealing with people.” Like Fair, an entrepreneur either needs to have the ability to personally develop customers or have a partner or team member who can excel at acquiring customers. I see too many organizations where no one “owns” the revenue number. In today’s competitive marketplace, we all would be well served to make sure we don’t take our eye off the ball of driving the revenue number through hard work and creating satisfied customers! Martin Willoughby is a business consultant and regular contributing columnist for the Mississippi Business Journal. He serves as Chief Operating Ofﬁcer of Butler Snow Advisory Services, LLC and can be reached at martin.willoughby@ butlersnow.com.

Rethinking what deﬁnes an underdog and how they manage to win

» David and Goliath: Underdogs, Misﬁts, and the Art of Battling Giants By Malcolm Gladwell Published by Little, Brown and Co. $29.00 hardback

uthor Malcolm Gladwell has made a career out of taking conventional wisdom and turning it on its head. Whether he’s explaining how seemingly small events transform themselves into trends (The Tipping Point), or how protégés and experts are made and not born (Outliers), or how what we perceive as instinct may not be (Blink), his books challenge us to reassess our assumptions about how the world works. His newest book, David and Goliath, tackles, broadly, how we view advantages and disadvantages. How do underdogs win against those with everything stacked in their favor? What can we learn from them? In classic Gladwell style, he introduces us to everyday people who have overcome what, at ﬁrst glance, seem to be impossible odds. And he demonstrates that “giants” can be toppled and, in fact, may not be giants at all. A mix of popular science, sociology and cultural study, David and Goliath is easy to read and covers a fascinating

array of topics. Gladwell moves, for instance, from whether or not a high school graduate should always choose the best college he or she is accepted to, to examples of successful people who flourished despite (or maybe because of) their dyslexia, to questioning whether small class sizes really are beneficial to students, to examining whether losing a parent at a young age can actually motivate someone to succeed later in life. That’s just a small sampling. Along the way, I suspect anyone reading this book will find at least one of Gladwell’s conclusions completely counterin-

tuitive. Yet his writing and storytelling and the evidence he produces will make you think long and hard about your own preconceptions and the way you view the world. That’s what I think his particular gift as a writer is, and that’s what makes his books so enjoyable to read. You’re going to learn something, in an interesting way, and there’s a strong chance you’ll look at things differently after. (Including, here, the story we’ve all grown up hearing about how David defeated Goliath.) Maybe you consider yourself (or your business) to be an underdog. Or perhaps you’re actually a giant, with a dominant position in your industry and among your competitors. Regardless, there are smart take-aways to be found throughout this book. There’s no guarantee, after all, that every Goliath will be brought to his knees and every David will prevail. Retuning your thinking about each side of this equation could be helpful and would undoubtedly be interesting.

— LouAnn Lofton, mbj@msbusiness.com

SALES MOVES

22 I Mississippi Business Journal I February 21, 2014 » JEFFREY GITOMER

Online subscriptions offer amazing perks and value.

nline publications are the rage and the future. They offer amazing value for the publisher, for the advertiser, and for the reader. They also offer more than significant cost reduction for all three players.

BACKGROUND: I moved to Charlotte in 1988. I brought as much of the Northeast with me as I possibly could. That included my subscription to The New Yorker magazine. The magazine doesn’t just have the best articles in the world; it also has the best cartoons in the universe. The magazine comes out 47 times a year. As you can imagine, oftentimes, for one reason or another (as with your subscriptions), the magazine did not get read. Sometimes there would be an unread pile of five or six. Guilt would set in. Finally after about eight or nine years, I stopped my subscription. Occasionally I would pick up one in the airport gift shop and read it on the plane and I continued to subscribe to the cartoon newsletter. It came to my email inbox with all the cartoons once a week. Then they changed it, and made you click onto their website in order to see the cartoons, so I quit reading it. TODAY: This morning I got a random email listing the contents of this week's The New Yorker

magazine. I guess they had my address and decided to quasi-spam me. I bit. I clicked on the link and found out that for $59.95 a year, I could get a digital subscription that included the current issue, a one-year subscription and access to EVERY back issue since 1925. Plus they throw in The New Yorker cartoon calendar. I couldn't resist. I bought the online version, and from now on I will only buy the online version of anything I want to subscribe to or read. Here's why: I go on the airplane, I click The New Yorker magazine icon on my iPad. Then I read this week's issue, I look at this week's cartoons, and I can go back and look at nearly 5,000 other back issues that are searchable by content. Holy magazine, Batman!

REALITY QUESTIONS: Are they trying to discourage me from buying their printed issues? If you have an e-reader, why would you buy any printed magazine? REALITY FACTS: Newsweek, which had more than 100 years of printed issues, STOPPED PRINTING their magazine. Now you can only get the magazine online. TODAY: I used to subscribe to Selling Power magazine. It's the voice of salespeople, sales tips,

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THE FUTURE IS TODAY: They stopped printing the magazine a few months ago, and only offer an online version. Brilliant. Gerhard Gschwandtner, the Jeffrey Gitomer founder, publisher and visionary saw that print versions were declining in revenue, and it was time to decide on the future rather than lament the present. REALITY: Online cuts costs. DRASTICALLY. Online makes advertising more affordable. Online offers more options for the reader to connect with the advertiser. With print ads, the reader has to make a call or go online and search. With online ads, the reader is already online and only has to click the ad to find out more, subscribe to a blog, get a video, go to the advertisers website, or buy something. I’M ALL IN: Am I missing something here? Value, versatility and instant access. Look for my ad in Selling Power magazine in April. It’s an ad I would have NEVER placed in the print version; an ad that is 50 percent less expensive than it was in their printed version; an ad that gives their reader (my prospective customer) instant access to my offer to buy. FOOLS GOLD: Five years ago I had a talk with some Yellow Pages executives. I asked them how much longer the Yellow Pages would be printed, and when they would be switching to an online version. They smiled and proclaimed, “We’re not going to stop printing. The book is our cash cow.” And they changed the subject. In the last five years, the book has gone from a cash cow, to a cash calf, to a cash rump roast. And YP.com is more than 10 years late to the dance.

Please don’t read this the wrong way. Print is not dead. In fact, it will always be alive. Many people still don’t have the ability to get online publications. But the market is making a HUGE shift. There are “only” a few hundred million e-readers and tablets, and a few hundred million more smart phones. The print impact felt by online availability is undeniable.

THINK ABOUT YOU: How much of an impact has your e-reader or tablet made on your reading habits? What are you subscribing to? Has online reading brought you greater convenience and availability? Easier access and more incentive to stay current? And finally, what are your plans to make your products and services “online available”? THINK ABOUT THIS: Every time you see someone reading on a tablet, they could be reading about you! Jeffrey Gitomer is the author of “The Sales Bible”, “Customer Satisfaction is Worthless” “Customer Loyalty is Priceless”, “The Little Red Book of Selling”, “The Little Red Book of Sales Answers”, “The Little Black Book of Connections”, “The Little Gold Book of YES! Attitude”, “The Little Green Book of Getting Your Way”, “The Little Platinum Book of ChaChing”, “The Little Teal Book of Trust”, “The Little Book of Leadership”, and “Social BOOM!” His website, www.gitomer.com, will lead you to more information about training and seminars, or email him personally at salesman@gitomer.com.

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Call McGehee Cruise & Vacation, Inc. Call 601.981.7070 SAVE $1,000 PER COUPLE ON THE SELECT 2014 AVALON EUROPE BOOK NOW SAILINGS.* With Avalon Waterway's Book Now Sailings, you can easily and affordably take a cruise that includes everything. Our cruises give you sweeping views of awe-inspiring landscapes every moment of the day and bring you to the heart of small towns and big cities to experience unique destinations like a local. We want to welcome you to the world of Avalon river cruising. Where no matter how long you're aboard, you'll be spoiled with a cruise unlike any other.

Book Now Sailings are offered for a limited time only and sell out quickly. Offer also valid for the cruise-only itineraries.

Call McGehee Cruise & Vacation, Inc. for details

Call 601.981.7070

Essential EUROPE 11 days from Rome to London (Ask about air credit) This is one of the most popular Europe trips. Start - two nights in Rome, enjoy a special welcome dinner with wine at a lively Roman restaurant, and ends with two nights in London. You’ll stop in major cities like Florence, Venice, Lucerne, and Paris. See features such as St. Peter’s, the Sistine Chapel, and the Colosseum in Rome; Michelangelo’s David in Florence, St. Mark’s in Venice, the second floor of the Eiffel Tower in Paris, and St. Paul’s in London are included, with a Local Guide in each city. Dining highlights include a pizza party with wine in Florence, and a pasta party in Venice. From Italy cross the border to Lugano in Switzerland, drive straight through the Alps via the St. Gotthard and William Tell country to Lucerne, where you have a relaxing twonight stay. See the Lion Monument during your walking tour and receive a Swiss chocolate surprise. Enjoy a two-night stay in Paris, and visit the second floor of the Eiffel Tower, then, board the Eurostar train for a ride to London. A great vcation to see the most popular cities of Europe.

Incentives - Meetings - Conventions - Full Ship Charters - Friends & Family Groups

The Group Event Division of McGehee Cruise & Vacation, Inc. FREE Quote No Booking Fees

Group Event Managers

specializes in incentives, meetings, conventions, full ship charters, and family & friends groups. Meetings can be enhanced with special audio and visual effects and can be valuable forums for presentation and exchange of information among the company's top performers. From small CEO roundtables to sales meetings to sales Jo Beth Avdoyan incentives to full ship charters, call McGehee Cruise & Vacation, Inc. a leader in the market for 40 years.

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