OCT. 2014
Gubernatorial Candidates Talk Business: Ducey, DuVal, Hess, Mealer
Financial Health: Planning the Way to Success
Power Lunch By the Numbers Business Calendar This Issue Business Owner's Lending Guide 2014/2015
$4.95 INBUSINESSMAG.COM
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OCTOBER 2014
www.inbusinessmag.com In Business Magazine is a collaboration of many business organizations and entities throughout the metropolitan Phoenix area and Arizona. Our mission is to inform and energize business in this community by communicating content that will build business and enrich the economic picture for all of us vested in commerce. Partner Organizations Rick Murray, CEO Arizona Small Business Association Central Office (602) 306-4000 Southern Arizona (520) 327-0222 www.asba.com
Steven G. Zylstra, President & CEO Arizona Technology Council One Renaissance Square (602) 343-8324 www.aztechcouncil.org
Doug Bruhnke, Founder & President Global Chamber (480) 595-5000 www.globalchamber.org
Dorothy Wolden, President NAWBO Phoenix Metro Chapter (480) 289-5768 www.nawbophx.org
Rick Kidder, President & CEO Scottsdale Area Chamber of Commerce (480) 355-2700 www.scottsdalechamber.com
Mary Ann Miller, President & CEO Tempe Chamber of Commerce (480) 967-7891 www.tempechamber.org Our Partner Organizations are vested business organizations focused on building and improving business in the Valley or throughout Arizona. As Partners, each will receive three insert publications each year to showcase all that they are doing for business and businesspeople within our community. We encourage you to join these and other organizations to better your business opportunities. The members of these and other Associate Partner Organizations receive a subscription to In Business Magazine each month. For more information on becoming an Associate Partner, please contact our publisher at info@inbusinessmag.com.
Associate Partners Ahwatukee Foothills Chamber of Commerce www.ahwatukeechamber.com Arizona Chamber of Commerce & Industry www.azchamber.com
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Arizona Hispanic Chamber of Commerce www.azhcc.com Chandler Chamber of Commerce www.chandlerchamber.com Economic Club of Phoenix www.econclubphx.org Glendale Chamber of Commerce www.glendaleazchamber.org Greater Phoenix Black Chamber of Commerce www.phoenixblackchamber.com Greater Phoenix Chamber of Commerce www.phoenixchamber.com Greater Phoenix Gay & Lesbian Chamber of Commerce www.gpglcc.org Mesa Chamber of Commerce www.mesachamber.org
Applications are now being accepted. For more information please email i n f o @ c onqu e s t t r a i n i ng . c om Untitled-3 1
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North Phoenix Chamber of Commerce www.northphoenixchamber.com Peoria Chamber of Commerce www.peoriachamber.com WESTMARC www.westmarc.org
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OCTOBER 2014
Gubernatorial Candidates Talk Business: Ducey, DuVal, Hess, Mealer IN BUSINESS MAGAZINE
Financial Health: Planning the
FINANCIAL HEALTH
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OCT. 2014
CONTENTS
OCTOBER 2014 • inbusinessmag.com
Financial Health: Planning the Way to Success
Way to Success
Power Lunch By the Numbers Business Calendar This Issue
$4.95 INBUSINESSMAG.COM
Business Owner's Lending Guide 2014/2015
Bankers, accountants, attorneys and other business professionals discuss with RaeAnne Marsh what it takes to keep a company growing. FEATURES
DEPARTMENTS
18 Biotech’s Road to Growth
9 Guest Editor
28 Avoid Desperation Selling
10 Feedback
Ron Butler, managing partner of Ernst & Young LLP, introduces the “Financial” issue.
The industry’s success demonstrates the power of planning. Joe Bardin looks at the impact thus far on the economy and where the momentum is.
Noted business and community leaders Jason Kaplan, Steve Macias and Lynne King Smith respond to IBM’s burning business question of the month.
When times are slow, there are more productive responses. Diana Ennen discusses ways to get clients and customers now.
28
30
12 Briefs
30 Healthcare: Networks and Coverage
In this second of a three-part series, RaeAnne Marsh examines cost, specialty coverage and network availability.
38 Business Built the Glendale CVB
Business-initiated bed tax pays off for West Valley tourism. Don Harris spotlights an unusual municipal tale.
42 Leading through Inspiration
Mitchell Levy shares insights into the value of inspiring a work force over motivating it.
Fight snark. Rich Karlgaard discusses bottom-line reasons building trust is important and strategies to make it part of company culture.
29 Books
New releases give fresh insights on sales, the cornerstone of business.
34 Trickle Up
SPECIAL SECTIONS THE RESO URC
E GUIDE TO BUSI NESS FINA NCING 2014/2015
Guide 2014/2015
PRESENTED
The annual resources and contacts guide
Major Banks Community Banks Credit Unions tions & Resour ces
Lending Institu
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Arizona Fall League complements Spring Training and Major League Baseball’s regular season to make baseball a yearround business in the Valley.
Attorneys discuss legal considerations in commercial leasing transactions.
that Hurts Business
6
16 By the Numbers 20 Legal
44 Employee Cynicism: The ‘In’ Attitude
49 Business Owner’s Lending
“iPhone 6 & 6+ Improved,” “Dropbox Drops Rates, Adds Space,” “Act Now for Free Act! Cloud,” “Chip and PIN Advances Card Reader Technology,” “Eliances Alliance,” “Real Estate Service Expands to Cover Life Events,” “Business Gains Against Commuter Pollution” and “Local Company Debuts Honeywell’s New A/C System for U.S. ”
BY
View from the top looks at the experience Mike Nealy is putting into play as the new head of the Fiesta Bowl.
40 Nonprofit
Executive board members can guide their nonprofit organizations in measuring and evaluating philanthropic return on investment.
46 Assets
2015 Mustang GT Plus: Our picks for the best laptops
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48 Power Lunch
SumoMaya Mexican-Asian Kitchen Plus: Some of the best patio lunch spots in the metropolitan area
64 Roundtable
In Business Magazine invites gubernatorial candidates Doug Ducey, Fred DuVal, Barry Hess and J.L. Mealer to talk business. ON THE AGENDA
35 Spotlight
Chandler 100 – Chandler Chamber of Commerce GPEC Annual Dinner – Greater Phoenix Economic Council
36 Calendar
Business events throughout the Valley
INBUSINE SSMAG.COM
OCTOBER 2014 • VOL. 5, NO. 10
PUBLISHER Rick McCartney
EDITOR RaeAnne Marsh
ART DIRECTOR Benjamin Little
CONTRIBUTING WRITERS
Joe Bardin Diana Ennen Don Harris Mike Hunter Sue Kern-Fleischer Rich Karlgaard Mitchell Levy Alexandra Lyon Curt Miner Alison Stanton
CONTRIBUTING PHOTOGRAPHER Camron McCartney Advertising
OPERATIONS Louise Ferrari
BUSINESS DEVELOPMENT
Louise Ferrari Craig Jeffries Steve Kulick Maria Mabek Sara May Katie Pacioni Kelly Richards Cami Shore
EVENTS Amy Corben More: Visit your one-stop resource for everything business at www.inbusinessmag.com. For a full monthly calendar of business-related events, please visit our website. Inform Us: Send press releases and your editorial ideas to editor@inbusinessmag.com.
Post Your Local Jobs at inbusinessmag.com Read by those vested in business here, In Business Magazine and inbusinessmag.com have become the resource for business owners and executives in the Valley and beyond. Now, business owners can post their open positions in a place where they are guaranteed to be seen by top candidates.
Visit inbusinessmag.com now to post your open positions!
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PRESIDENT & CEO Rick McCartney EDITORIAL DIRECTOR RaeAnne Marsh SENIOR ART DIRECTOR Benjamin Little FINANCIAL MANAGER Donna C. Mitchell, CPA OFFICE MANAGER Savanah Holmgren ACCOUNTING Todd Juhl CORPORATE OFFICES 4455 E. Camelback Road Building C, Suite 135 Phoenix, AZ 85018 T: (480) 588-9505 F: (480) 584-3751 info@inmediacompany.com www.inmediacompany.com Vol. 5, No. 10. In Business Magazine is published 12 times per year by InMedia Company. POSTMASTER: Send address changes to InMedia Company, 4455 E. Camelback Road, Building C, Suite 135, Phoenix, AZ 85018. To subscribe to In Business Magazine, please send check or money order for one-year subscription of $24.95 to InMedia Company, 4455 E. Camelback Road, Building C, Suite 135, Phoenix, AZ 85018 or visit inbusinessmag.com. We appreciate your editorial submissions, news and photos for review by our editorial staff. You may send to editor@inbusinessmag. com or mail to the address above. All letters sent to In Business Magazine will be treated as unconditionally assigned for publication, copyright purposes and use in any publication, website or brochure. InMedia accepts no responsibility for unsolicited manuscripts, photographs or other artwork. Submissions will not be returned unless accompanied by a self-addressed, stamped envelope. InMedia Company, LLC reserves the right to refuse certain advertising and is not liable for advertisers’ claims and/or errors. The opinions expressed herein are exclusively those of the writers and do not necessarily reflect the position of InMedia. InMedia Company considers its sources reliable and verifies as much data as possible, although reporting inaccuracies can occur; consequently, readers using this information do so at their own risk. Each business opportunity and/or investment inherently contains certain risks, and it is suggested that the prospective investors consult their attorney and/or financial professional. © 2014 InMedia Company, LLC. All rights reserved. No part of this magazine may be reproduced or transmitted in any form or by any means without written permission by the publisher.
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RON BUTLER, MANAGING PARTNER, ERNST & YOUNG LLP
GUEST EDITOR
Financial Foundations
RON BUTLER IS the managing partner of the Phoenix office of Ernst & Young LLP. Bringing more than 23 years of accounting and auditing experience, he provides strategic guidance with the operation and management of the Arizona practice. Active in his community, he is a member of the University of Arizona Eller College National Board of Advisors; chairman for Downtown Phoenix Partnership; vice-chairman of Arizona Community Foundation; member of Greater Phoenix Leadership; member of Greater Phoenix Economic Council Executive Committee; and cochairman of the International Leadership Council.
BUSINESS GIANTS HAD to grow into their footprint. Whatever idea or inspiration was the foundation for the business’s inception, successful growth required the same thing: effective management of the business’s assets. Capital — its acquisition and disbursement — is arguably the most significant element of a business’s operations. Striking a balance between risk and reward can be challenging. EY’s latest Capital Confidence Barometer clearly shows the many complex issues on today’s boardroom agenda. Cost reduction is no longer just an operational issue, but rather a strategic imperative. Still, pressure remains for businesses to grow, and a company’s ability to raise capital quickly and effectively is integral to its growth potential. Today’s leading businesses understand that staying ahead of the curve demands reshaping for the future with a focus on effective capital management. Best practices for a company’s financial health is the broad topic explored in this month’s cover story. In Business Magazine editor RaeAnne Marsh spoke with executives, bankers, accountants and attorneys to present insights and tips that go beyond the strictly financial but strongly impact the bottom line. This October issue also features the In Business Magazine Lending Guide, its fourth annual listing of local lenders — a powerful resource for business owners and those starting a business. Elections are coming up next month, and among the important decisions facing voters is the choice for Governor of Arizona. For this October issue’s “Roundtable,” gubernatorial candidates Doug Ducey (Rep.), Fred DuVal (Dem.), Barry Hess (Libert.) and J.L. Mealer (Indep.) were invited to share their agenda on building business and growing Arizona’s economy. Other features in this issue include a look at biotech as an important business sector, an examination of legal considerations in commercial leasing, and advice to help businesses avoid a common misstep in sales. The second installment of a three-part Healthcare series explores the issues of coverage and networks. With its mission to inform and encourage business in our community, In Business Magazine offers important and relevant information for this, its financial issue. I hope you enjoy it. Sincerely,
Connect with us: Ron Butler Managing Partner Ernst & Young LLP
Fit for Success BUSINESS IS THE driver of the economy. As the economy falters (as it did), business is affected greatly. Each of us has heard stories of those who survived and even thrived during the recent recession. That success during tumultuous times, it turns out, is largely based on running a healthy business to begin with. Financial health is something we, as business owners, strive for. How we get there is largely based on passion and determination — and managing our companies well. In this issue, RaeAnne Marsh digs into what it takes to manage a financially healthy company and what can be done to sustain it. Ron Butler works with major firms on a daily basis to ensure those
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Story Ideas/PR: editor@inbusinessmag.com Business Events/Connections: businessevents@inbusinessmag.com Marketing/Exposure: advertise@inbusinessmag.com Visit us online at companies are financially healthy www.inbusinessmag.com and viable entities to secure their success. We want to thank Ron for guiding this issue and providing his and his firm’s expertise in shaping the content for this issue of In Business Magazine. As we pull out of the recession and engage in recovery, many businesses are looking at opportunity to solidify their future success. It is our hope that this month’s cover story is a start to maintaining that dialogue and that it will help our business community become more and more fit. —Rick McCartney, Publisher
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9
FEEDBACK
VALLEY LEADERS SOUND OFF
Executives Answer
Leaders of companies often use a particular mechanism to keep tabs on the financial health of their business. What do you use to keep tabs on your company’s level of financial health?
Jason R. Kaplan
Steve Macias
President and CEO The Driver Provider Sector: Transportation IT TAKES THE watchful eyes of the right team and several measures to accurately see how we have done, where we are at today and what we can expect in the future. Here are a few of the financial and operational metrics we regularly monitor: Solvency — Do we have what we need in the bank to cover our monthly/quarterly/yearly expenses? How many months could we survive if sales abruptly stopped? Overhead per dollar of new revenue — We want to grow revenue but we also keep an eye on what we are spending to support that growth. Revenue diversification — We strive for repeat/recurring business and track and measure revenue from new customers; we are a healthier business with a good mix. Cash is King — This might be the easiest metric to measure. We want to see an improving cash position every month. One also needs to be careful of just relying on the standard financial ratios as many of them are backward-looking. Qualitative measures ultimately flow down to the financial health of your business. Items such as customer suggestions and complaints are closely monitored.
Co-owner, President and CEO Pivot Manufacturing Sector: Manufacturing AS THE OWNER of a small business, I find it is absolutely true that cash flow is king, so every day when I arrive at work and again before leaving for the day, I check our near-term and midterm backlog, accounts receivable and accounts payable. Doing so enables me to get a reasonably clear picture of where we are financially and where we will be for the next several months. My nature is to tend to focus on horizon events and big projects, so I had to force myself to look at the daily, weekly and monthly cash flow trends to avoid any bad financial surprises. By extending the backlog and cash flow view to mid-term in addition to day-to-day, we can make adjustments and refocus our efforts should we need to pick up some additional work or pull in a project to positively affect cash flow. The other side of that coin is that as long as signs are good, it enables us to look at longer-term projects that will positively affect cash flow months or a year or two down the road. Pivot Manufacturing pivotmfg.com
The Driver Provider driverprovider.com
Jason Kaplan is owner and founder of The Driver Provider, among other entrepreneurial pursuits. The Driver Provider, with offices in Phoenix, Tucson and Jackson Hole, Wyo., services private clients worldwide for all occasions up to large conventions for Fortune 100 companies. Kaplan says while The Driver Provider is in the transportation industry, it is in the business of customer service. Brooklyn-born, Kaplan was raised in Arizona and graduated from Arizona State University.
Lynne King Smith CEO TicketForce Sector: Technology THE FINANCIAL HEALTH of our company is my No. 1 responsibility. Keeping tabs means multiple things — internal controls and processes, regular and timely reports, and analyzing business data regularly. My favorite tool is a Financial Dashboard, which is a single Excel document we created and store in the cloud. There are tabs for Financial Statements, Billing Reports, Accounts Receivables and Accounts Payables, and Debt Schedule. It is updated each month and always shows the last 12-month period. This allows us
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Steve Macias is the co-owner of Pivot Manufacturing, a Phoenix machine shop that works with companies in the defense, aerospace, semiconductor and alternative energy fields. Macias also sits on the boards of the Arizona Commerce Authority, Arizona Manufacturers Council, Arizona Chamber and the Arizona Hispanic Chamber of Commerce.
to compare month to month — we can see trends, and make decisions based on facts and good data. The owners then meet quarterly for a full day with our CFO at a location off-site to pore over the numbers, analyze trends and do strategic planning. It’s easy to get caught up in the emotion of your business — and going with the gut is important at times. But having both the data and expert analysis truly helps me sleep at night, keeping our business healthy for our employees and clients. TicketForce ticketforce.com
Lynne King Smith is CEO of East Valley-based TicketForce, one of the leading ticketing companies in the U.S and Canada. She co-founded the firm in 2003 and manages its daily operations, marketing and online presence. She is an enthusiastic small-business leader who enjoys blogging and is passionate about social media, technology and inspiring people.
INBUSINE SSMAG.COM
BRIEFS
QUICK AND TO THE POINT
Local Company Debuts Honeywell’s BYTES New A/C System for U.S.
IT IS OFFICIAL and with recent sales it is another Apple success. The new phones boast larger screens, better battery life and camera quality that is sure to last to the iPhone 7. The Apple Watch is an all-in-one companion for connecting and staying fit. Available in multiple versions, the design is sleek, small and “timely.” apple.com
Dropbox Drops Rates, Adds Space AS COMPETITION HEATS up in the cloud, rates are beginning to drop. The 100 gigabytes that $10 used to buy is now 1 terabyte. That is a dramatic improvement as more and more companies begin to rely on the cloud and much less on “on-property” hardware. Are the days of a business server becoming extinct? dropbox.com
Act Now for Free Act! Cloud ACT! CREATOR SWIFTPAGE has done a from-the-ground-up development of Act! Cloud, a subscriptiononly online contact and customer manager system that allows the business owner to access customer contacts across multiple online services. Offering easy yet powerful emarketing capabilities, Act! Cloud features a new intuitive and touch-friendly interface that is great for mobile devices but easy to use on any platform. Users may sign up for a free trial or start their subscription for $10 per month. cloud.act.com
PRECISION AIR & Heating, a locally owned and operated company, has been selected by Honeywell to introduce a new airconditioning monitoring system in the U.S. “Precision Air and Heating, being a first adopter of the technology, is a great example of technology value and our customers’ business goals coming together,” says Honeywell Senior Product Manager Dave Quam. “Precision Air and Heating focuses on providing great ongoing service to their customers and the Honeywell Contractor Portal enhances that ongoing service. It was less about Honeywell choosing a customer to use the technology than the technology providing a great value-add to the contractor and the customers they serve.” “We are excited here at Precision Air to be partnered with Honeywell,” says owner Eric Bryan, who will be educating contractors and members of the industry on the new technology nationwide. “This is a pretty prestigious selection and it’s a definite honor for us.” The first of its kind, Precision LINK is an HVAC monitoring system that, with the homeowner’s permission, is monitored wirelessly by Precision Air & Heating service managers and technicians to ensure peak performance and spot potential problems before they occur. The new technology, which is scheduled to launch this month, will optimize opportunities for energy efficiency, lower costs of monthly A/C bills and ensure customers peace of mind with its 24 hour monitoring system. “Once the public finds out about this new technology, there are going to be a lot of contractors installing it and it will generate a bit of a lift on our end,” says Bryan. “It will also generate a lot of retail, especially in places like Lowe’s or Home Depot.” Both companies are looking to expand the new technology beyond residential homes and into larger commercial and industrial businesses. Within the next few years, they are planning to expand into other countries as well. —Alexandra Lyon Honeywell honeywell.com Precision Air & Heating precisionairandheating.com
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EMBODYING RESOURCES, INFLUENCE, skills,
contacts and imagination, this group of high-level entrepreneurs meets for a weekly roundtable where individuals present their topic of concern for discussion. There is a charge of $12 for a one-minute presentation, and varying charges for other access to this “meeting of the minds.” Meetings are always sold out. Membership is by invitation only, but those interested in attending may connect by visiting the Eliances website and viewing the video. Key is to ensure members
Visit our “Briefs” link on the “Departments” tab at www.inbusinessmag.com.
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benefit from each other’s presence, and those who do not meet that criterion may not be invited back. eliances.com
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Photo courtesy of Apple, Dropbox, OneSource (left, top to bottom) Precision Air & Heating, Eliances Alliance (right, top to bottom)
iPhone 6 & 6+ Improved
Named “Best Economic Outlook Event” Three Years in a Row!
Business Owners, Executives & Entrepreneurs: Please join us for this exceptional event. Meet our Guest Editors for an intense discussion on the local economy.
Presenting the 2014 Annual Guest Editor Economic Symposium.
NOVEMBER 7, 2014!
In Business Magazine Guest Editors invited to attend include:
MODERATING EVENT
Linda Hunt
Mark B. Bonsall
Bob Parsons
Janice K. Brewer
Elliott D. Pollack
April 2014 President & CEO Dignity Health Arizona
March 2014 CEO Salt River Project
February 2014 Founder & Executive Chairman GoDaddy
January 2014 Governor The State of Arizona
May 2013 CEO Elliott D. Pollack and Company
Ted Simons
Host, “Arizona Horizon,” KAET Eight PRESENTED BY:
Barry Broome
Deborah Bateman
Robert Sarver
Greg Stanton
January 2013 President & CEO GPEC
December 2012 Vice Chairman National Bank of Arizona
October 2012 Chairman & CEO Western Alliance Bancorporation
July 2012 Mayor City of Phoenix
April 2012 President & CEO Blue Cross Blue Shield of Arizona
Craig R. Barrett
Candace D. Wiest
Jerry Colangelo
Derrick Hall
Don Smith
October 2011 Principal Partner JDM Partners
March 2011 President & CEO Arizona Diamondbacks
November 2010 President & CEO CopperPoint Mutual
March 2012 November 2011 Retired CEO/Chairman of the Board President & CEO West Valley National Bank Intel Corporation
Richard L. Boals
Visit inbusinessmag.com/department/guest-editor to see a list of our Guest Editors.
Join Us November 7, 2014 at The Phoenician Resort — Camelback Ballroom Registration starts at 11a • Lunch is served at 11:45a • Expo is at 11a and 1:30p
Topics include: • Emerging Economic Opportunities • Strengthening our Work Force • Business Funding • Government Policy and much more . . . In Business Magazine brings together its Guest Editors for this annual event that is certain to impact your business.
Register at inbusinessmag.com
BRIEFS
QUICK AND TO THE POINT
Chip and PIN Advances Card Reader Technology
USE OF CHIP and PIN technology is expanding in the United States as an alternative to the familiar credit/debit card “swipe,” allowing customers greater acceptance rates when traveling and security with reliable transactions both locally and internationally. “The EMV/chip in the card uses a dynamically generated string of data with each transaction that makes chip cards difficult to counterfeit,” says Betty Reiss, spokesperson for Bank of America. “These are benefits both to our customers and to the bank.” Though the technology has been around for almost a decade, the number of credit card programs implementing the new technology has recently increased, branching into AAA Members Rewards, Alaska Airlines and MasterCard branded credit cards with Sam’s Club, Target and Walmart. “Walmart is supportive of adopting Chip and PIN in the United States,” says Walmart Director of National Media Relations Randy Hargrove, “and we believe this technology is effective in securing in-person payments.” Gearing up to meet the anticipated demand in this technology is Heckler Design, a local manufacturer that provides the countertop stands for card readers used in point-of-sale transactions. Owner Dean Heckler, who works with companies that provide the software to small businesses to ensure they meet the needs of the industry, is currently working on a new design that will be the frame holder for the new Chip and PIN technology. “The tablet-based point-of-sale companies are aware that they have a responsibility to help migrate their customers to Chip and PIN,” Heckler observes. “The trick is how to transition small businesses without forcing them to buy hardware and software that’s outside of their budget.” Referring to PayPal and similar companies he works with, Heckler notes their increased interest in working with small operators. “These huge companies are really focused on what small business needs and wants and how to deliver it at a very competitive price point. … Now we are working with them to figure out how this transition will impact small business, and what they will need for their point-ofsale systems going forward.” —Alexandra Lyon Bank of America bankofamerica.com Heckler Design hecklerdesign.com Walmart walmart.com
Business Gains Against Commuter Pollution
THE MARICOPA COUNTY Trip Reduction Program’s recently released figures show 12,038 tons of pollution were saved by commuters in fiscal year 2014. “With improved air quality, our region benefits,” says Neil Yockey, environmental program manager, pointing out that not only does air quality factor into quality-of-life attractiveness but not meeting federal standards may result in loss of significant federal highway funds. The Maricopa Association of Governments estimates Maricopa County residents currently drive nearly 80 million miles each day, and projects that number to grow to about 140 million by 2030 — so in spite of advances in cleaner vehicles and fuels, MAG anticipates that vehicles will continue to be a major source of air pollution. Arizona law requires businesses operating in Maricopa County that have 50 or more employees at a single work site to participate in TRP, which consists of making a “good-faith effort” to conduct a survey among the employees as to their method of transportation — although there is not corresponding requirement on the employee to participate in the survey. Nevertheless, the program continues to be successful. Nearly 740,000 employees and students participated in the survey in FY2014, encompassing 1,185 employers at 3,034 work and school sites. The number of miles reduced in daily commuting for that year is not yet available, but similar figures in FY2013 yielded more than 4 million single-occupant-vehicle miles. “We measure and count the number of trips saved and the number of miles saved,” Yockey explains. The focus is on the heavy commute times of day, as the higher the congestion, the higher the levels of pollution being emitted. TRP’s outreach and training services include working with employers to help them develop programs to incentivize employees, such as paying part or all of the cost of a bus pass or encouraging carpooling. “The most successful ones are where the highest-ranking local [company] official embraces the program,” Yockey says. —RaeAnne Marsh Maricopa County Trip Reduction Program maricopa.gov/aq/divisions/trip_reduction
Real Estate Service Expands to Cover Life Events
RECOGNIZING THAT REAL estate transactions are often tied to lifecycle events which involve an additional broad spectrum of decisions, Walt Danley Realty recently launched Private Transition Services to help clients with other professional services their situation may call for, such as legal or financial. Chris Carter-Kent, who initiated the concept, explains PTS helps create a plan of action based on individual need. For instance, a divorce may leave a woman whose insurance policies had been purchased through her husband’s work in the unfamiliar position of needing to take out
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her own policies. And Carter-Kent relates the experience of a divorced CEO who needed help with such household tasks as meal planning and grocery shopping when he was given part-time custody of his children. Divorce, death, having to sell a house to move parents from their home to assisted care — these are tough emotional times, but “there are logical decisions that need to be made,” Danley points out. “Over the years, I saw that people lose sight of that.” Divorce, for instance, also frequently results in the need to sell the marital residence, but
Danley says the point at which he, as a Realtor, came into the process often “seemed too late to help [the couple] make an educated decision.” And Carter-Kent notes, “We’re doing something differently because we’re bringing in attorneys and financial advisors to help clients plan their future.” In divorce and other lifecycle events, says Danley, “Real estate is a sizeable component, but it’s only one of the services we’re offering.” —RaeAnne Marsh Walt Danley Realty waltdanley.com
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METRICS & MEASUREMENTS
Arizona Fall League: Developing Talent for the MLB The Fall League, complement to Spring Training and Major League Baseball’s regular season, makes baseball a year-round business in the Valley by Sue Kern-Fleischer
Arizona Diamondback’s pitcher Archie Bradley
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“What makes this League so unique is that it is the only place in the country where all 30 MLB organizations are in one league under one roof,” says Steve Cobb, Arizona Fall League director. “Scouts love it, fans love it because it’s like the Minor League All Stars … the players wear their respective team uniforms, and, because they’re hungry to get into the Major Leagues, they play hard, they hustle and they make themselves accessible to sign autographs. And the majority of them will make it.” Before the league began, the vast majority of players were employed through the Minor League’s six-month season. The players often would seek employment off-season in Mexico, Venezuela, Puerto Rico and the Dominican Republic, where the private enterprises they worked for placed a heavy emphasis on winning. “Players who were over-used would suffer injuries, so MLB created the Arizona Fall League as a way to govern and monitor players’ development in a safe environment. The League’s creation also provided a way to accelerate players’ careers from the Minors to the Majors,” Cobb says. And what is good for MLB is proving good for fans, who turn out in numbers that average 65,000 at all games for the season. “Because Major League Baseball essentially underwrites the Fall League, we’re able to keep ticket prices low,” Cobb says. While it doesn’t have the economic engine of the Cactus League, the Fall League does contribute to Phoenix’s local economy since the players, managers, coaches and other staff seek temporary housing, rent cars and spend money on other living expenses. In addition, the League pays for rent and utilities at the facilities, hires concessionaires and pays sales tax on merchandise. MLB Network televises three Fall League games after the World Series and MLB.com also streams some games live. Looking to the future, Cobb, who has been the Fall League’s director for 22 years, hopes more fans will
Los Angeles Angel’s centerfielder Mike Trout
attend games. He also hopes to see more games showcased on MLB.com, and eventually, he’d like to introduce international play to the Arizona Fall League. Arizona Fall League mlbfallball.com
Arizona Fall League: The business of making tomorrow’s stars Since its inception, the AFL is responsible for helping develop: 212 MLB All-Stars 34 MLB Managers 46 MLB Umpires 25 MLB Rookies of the Year 12 MLB MVPs 8 MLB All-Star Game MVPs 4 Cy Young Award Winners 3 World Series MVPs And this past July, 36 ex-AFL players and four umpires were selected to participate in MLB’s All-Star Game plus 10 former players in the Futures Game and six of 10 participants in the Home Run Derby. Source: Arizona Fall League
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Photos courtesy of Arizona Fall League
MAJOR LEAGUE BASEBALL’S best kept secret is right here in Metro Phoenix, and, for baseball fans, it provides a chance to see a “Who’s Who” of the best Minor League players in action. Now in its 23rd season, the Arizona Fall League is a pivotal cog in baseball’s player development process. All 30 MLB clubs must participate by sending seven of their top prospects to the league. Managers, coaches, umpires and other baseball staff also participate in the Fall League, which takes place each year from late September through mid-November. There are six Arizona Fall League teams: the Scottsdale Scorpions, Mesa Solar Sox, Salt River Rafters, Glendale Desert Dogs, Peoria Javelinas and Surprise Saguaros. The teams are broken into two divisions, East and West. The games are played in the Spring Training stadiums used by the Giants, Cubs, Royals, Rangers, D-backs and Rockies. And for fans, the price is a steal, with tickets costing $8 for adults, $6 for kids and free parking. A family season pass for $115 includes admission for six people for the entire season. Seating is first come, first serve, so fans can sit as close as they’d like.
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SECTOR
INDUSTRY AT ITS BEST
Biotech’s Road to Growth Success demonstrates the power of planning by Joe Bardin THE BIOSCIENCE INDUSTRY here is no longer merely a good idea awaiting its time. With an annual economic impact of $14 billon statewide, according to the Flinn Foundation — a private nonprofit organization that supports biosciences in Arizona through grants, programs and advocacy and is tasked with tracking the industry — biotech and its Phoenix hub are a legitimate economic success story in which planning, collaboration and innovation play central roles. Or perhaps it’s more accurate to say this is the beginning of a success story. “We’re pleased with the progress so far,” says Brad Halvorsen, Flinn Foundation vice president of communications. “We’ve emerged as one of the fastest-growing states in terms of industry growth, but we recognize there’s more work to do. It’s definitely a marathon, not a sprint.” The significant advancements in biotech in Phoenix have not occurred by happenstance. In 2002, the Flinn Foundation identified the biosciences as a significant potential driver for growth in Arizona. Joined by public and private partners, it commissioned Arizona’s Bioscience Roadmap, a 10-year strategic plan for nurturing biotech into being. Now a new Roadmap is being instituted for the next 10 years. With this new bioscience roadmap, which extends to 2025, Arizona has the “longestrunning, continuously managed roadmap of its kind in the US,” according to Joan Koerber-Walker, president and CEO of the Arizona BioIndustry Association. This
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next phase of the Roadmap is projected to increase the economic impact statewide from $14 billion to $20.4 billion by 2025, based on current trends. Neither figure includes the considerable impact of hospitals, making the numbers potentially even higher. Jobs can be expected to increase significantly as well. During the Roadmap’s first decade, bio jobs in Arizona grew by 45 percent, which was nearly four times faster than the nation as a whole. The industry measures its success not only in terms of economic impact but diversity as well. “In our first 10 years, we’ve established diversity across industrial, medical devices, drug and diagnostics sectors,” says KoerberWalker. These include the world-renowned research organization TGen; industry leaders such as Insys, Medtronix and WL Gore; and emerging high-performers like the device company Ulthera. Ulthera was acquired by Merz in June for $600 million, which is precisely the kind of payoff everyone associated with biotech would like to see more of. “Investors look for deal flow,” says Robert Green, a veteran of the biotech scene and currently president of EndoVantage, a start-up developing a computer simulation solution for surgery based on personalized patient information. “When investors get a sense of things happening, they become more interested, so each success benefits all of us.” EndoVantage is based on technology developed locally at Arizona State University
and Mayo Clinic. It’s one of a number of collaborative innovative start-ups, which advocates point to as further evidence of a maturing product pipeline. Another recently newsworthy example involved Charles Arntzen, a Regents’ professor and researcher at ASU’s Biodesign Institute, who helped contribute to the experimental Ebola vaccine, given to two health workers who contracted the virus. Venture Capital in Short Supply
To reach these lofty goals, the industry’s most urgent need is for more risk capital. “Access to capital is the first thing all growing companies need,” says Koerber-Walker. “These are long event horizons, but a very big payoff for those that succeed.” Halvorsen says emerging firms need access to capital to get across the “valley of death,” which is the period in a company’s development after seed funding has been used but before they are far enough along to generate sufficient revenue. Despite the potential payoff, venture capital to Arizona bioscience firms has declined consistently since the first Roadmap’s inception in 2002. That year, Arizona received $111 million compared to only $22 million generated in 2012. This decline in bioscience venture capital was experienced throughout the country. Investment increased in 2013 to $37 million, but is still well below levels advocates would like to see. “Increasing this figure is one of the Roadmap goals going forward,” Halvorsen says. INBUSINE SSMAG.COM
In the absence of ample venture capital, the industry has been forced to get as innovative about finance as it is about product development. EndoVantage, for example, got initial funding from the ASU Edson Student Entrepreneur Initiative. Then, through the Arizona Commerce Authority, EndoVantage was named one of six winners of the Arizona Innovation Challenge, for which it received of $250,000. “That’s a huge kick-start,” Green says.
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Another factor helping to make up the deficit in venture capital is, according to Green, Arizonans’ innate willingness to collaborate. “Most of us come from somewhere else, so we were all strangers here at one point, so we’re more open to strangers. Everyone works together, and top people are just a phone call away, to answer a question or help in some way.” Also, according the Flinn Foundation, Arizona is increasingly commercializing the research that comes out of its universities. Since the first year of the Bioscience Roadmap (2002), Arizona’s universities have spun out 71 bioscience companies. One example is Heliae, an algae-technology firm in Gilbert, which employs about 100 people and is growing fast. While there is a shortage of venture capital, there is no shortage of human capital, according to Sethuraman Panchanathan, ASU’s senior vice president of Knowledge Enterprise Development, who was recently appointed to the U.S. National Science Board by President Barack Obama. “We have more biotech-oriented people than can be employed in Arizona,” Panchanathan says. “Talent is not a constraining force. But there’s always room to fine tune.” He says ASU is collaborating with companies in the space to ensure “our programs meet their objectives and goals.” This includes integrating actual company projects within coursework, coordinating student internships and inviting company representatives as guest lecturers. While advocates of the biotech industry are proud of their accomplishments thus far, they are most excited about what’s coming down the road. As Koerber-Walker puts it, “Where we’re going is the real opportunity.” Arizona BioIndustry Association azbio.org ASU Knowledge Enterprise Development research.asu.edu EndoVantage endovantage.com Flinn Foundation flinn.org
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103104-14
Creative Approaches to Advancement
D10745 02/14
Can’t Find Qualified Workers?
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A Guide to Arizona’s Career Oppor
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LEGAL
LEGAL MATTERS TO BUSINESS
Maneuvers in Commercial Leasing Negotiating commercial lease language up front minimizes disputes later by Sue Kern-Fleischer ENTERING INTO A commercial lease can signify an exciting time of growth or it could be a time of change, when a company needs to downsize. Either way, it’s important to understand the lease language and what the long-lasting economic and legal implications are before signing on the dotted line. Kevin Judiscak, an attorney with Phoenix-based Engelman Berger, P.C., says many business executives who are outstanding in their chosen fields often make the mistake of thinking they have the training and experience to negotiate an advantageous lease when, in fact, they don’t know what to look for or what to look out for. Judiscak says people often mistakenly think that, other than rent, everything else in the commercial lease is “boilerplate” and is not really negotiable. “Lots of other considerations should go into the lease negotiations, like whether or not the landlord will charge separately for air conditioning on weekends, whether the lease includes reserved parking spaces and what other uses the landlord will allow in the other space at the premises,” Judiscak says. Maintenance and repairs are another consideration, and Steve Goldstein, an attorney with Scottsdale-based Sacks Tierney, warns that if this is not addressed in the lease, tenants could be stuck with big capital expenditures. “From a tenant standpoint, you want to limit your responsibility and negotiate those provisions up front,” he says. Goldstein has been helping clients transact commercial lease agreements since 1986, and he says business executives often have misconceptions about leases. “Even though a letter of intent exchanged between the tenant and landlord is non-binding, it can help to have a lawyer involved even at that early stage. Some businesses also will rely upon the lease forms that their real estate brokers use, but even with those forms, it pays to have a lawyer take a look at it,” Goldstein says, explaining that it is important to pay attention to each provision in the lease. “Commercial lease documents are usually pretty long and tough to slog through, but well worth the time to make sure there are no hidden costs,” he says.
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One common mistake Goldstein sees in leases, particularly in a booming market, relates to the commencement of the lease and how that relates to the build-out of the initial improvements. “Oftentimes, the lease will have rent structured to begin on a fixed date, but the space may not be ready. And when there’s nothing that forces the landlord to get the space done and there are delays, there’s nothing in the lease to protect the tenant. The tenant has no recourse on the lease,” he says. Escalation clauses are also important to review. “There are different ways to handle that. Most scenarios involve fixed increases in rent schedules, but on occasion you’ll see rent increases bases on CPI [consumer price index],” Goldstein says. Getting out of a lease is not easy. “A lease is meant to give certainty to the tenant that it has assured occupancy on specific terms for an agreed term, and it is meant to give certainty to the lessor that it has assured rent for that term,” explains Judiscak. However, he notes, the law also is not punitive, so the tenant may make an informed choice that it is worth the known economic consequences to terminate the lease prematurely. One common mistake that Goldstein sees regarding to the need to get out of a lease relates to small or familyowned businesses. “It’s important to include
a provision to give the tenant the chance to terminate a lease upon the death or disability of the business owner,” he says. Lease disputes can be costly, and Judiscak says that one of the best tips for avoiding litigation is simply communicating clearly and showing sincere efforts to work things out. He says that a major source of later legal issues arises over lease guaranties by the owners of a business. Prior to signing an open-ended guaranty, thought must be given to potential limitations in amount, time and other negotiable issues, including exactly who guaranties the lease in marital or partnership ownership situations. “It’s never too early in the lease negotiation process to consult an attorney,” he says, adding that an attorney can help identify important business considerations and negotiate the lease language to beef up protective provisions and eliminate or tone down harmful ones. “The consultation may be very brief if everything is in order, but it will always be easier to address things on the front end when the parties are agreeable and interested in entering into a deal, rather than later, when a dispute arises,” he says. Engelman Berger, P.C. eblawyers.com Sacks Tierney P.A. sackstierney.com
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Financial Health:
Planning the Way to Success Capital, risk management and outside-the-box connections help ensure a company’s future by RaeAnne Marsh
Making a profit is the common goal for business owners. Determining how best to spend it is also a challenge. According to Bill Owens, principal of accounting firm Owens & Bondell, there are five main categories that business owners struggle with: funding their retirement plan, buying new assets for the business, paying down debt, paying taxes and personal spending. “The people who successfully manage those five areas are the people who are successful in the long-term,� he says.
The Starting Details A critical step is making a budget — and, perhaps surprisingly, it’s a step not all businesses do. “If you don’t have a budget, you don’t have a goal. Also, you don’t have a comparison to know whether you’re doing well or not,” says Chad Kunze, managing principal of the Phoenix office of CliftonLarsonAllen LLP. “A budget is also important to third parties, he points out. “They base their lending or funding on [your company’s] past and what you budget for the future.” It is also vital to understand the cash conversion cycle — how long it takes from beginning a marketing activity to generate leads, convert them to a sale, schedule a service and perform it, invoice for it, and collect. Or, in retail, not having invoices and receivables but needing to have an inventory. “Small-business owners often make decisions optimistically — spend the money this week and expect to get an influx next week or shortly thereafter,” says Steve Meisenheimer, management consultant and founder of business training program The Effective Leader. If cash flow expectations are not met, that impacts cash for operating expenses, including payroll. According to Meisenheimer, the four critical financial statements in every business are the P&L, which shows the business’s past in identifying revenues, expenses and profits; the balance sheet, containing the business’s wealth or equity, including receivables, assets and liabilities against those assets; the cash flow forecast, which requires a clear understanding of how the P&L and balance sheet work together; and the operating budget, which resembles and P&L but indicates what the business owner expects to happen with sales, expenses and profit.
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Says Owens, “If the business owner looks at the P&L every quarter, that’s long enough to take out some of the ebb and flow [of monthly statements], but short enough to respond if they see anything weird in the numbers.” Also, he observes, “The bigger decisions are less daunting.” Without a budget and cash flow forecast, it’s impossible to come up with a good pricevolume mix, because every decision has a ripple effect. And the goal is to optimize the price-volume mix for cash flow success. With an increase in price, the volume will go down; decrease, the volume will go up. A business owner may sacrifice price to get the volume going, but, Meisenheimer points out, “At some point there’s no recovery because he doesn’t take into consideration the cash conversion cycle.” And if a businessperson borrows money against a line of credit to carry the cash cycle, he still has the other expenses — plus the additional cost of interest.
Loans Good financial performance is a cornerstone for having a loan approved, which is why start-ups often find themselves in a “Catch 22” situation, shares Chad Gosar, senior VP and senior relations manager at The Biltmore Bank of Arizona. “We probably can’t do anything for you because we need a couple of years’ history.” But also key, according to Tim Bruckner, BMO Harris Bank’s managing director for commercial banking for Arizona, are the financial projections of the budget, especially tied to tangible items. Nor do receivables necessarily tell the whole story, as a bank will also take into account whether the business has creditworthy customers or is struggling to collect. Underscoring the value of working with a
banker who knows the individual’s business and industry, Gosar notes, “We’re more likely to lend to our customer if their customer’s credit is strong.” There are alternative sources of financing, and Robert A. Stover Jr., tax partner and Southwest regional leader for private client services practice with accounting firm EY, notes that among changes in private equity in recent years is an increased interest in family/ private businesses. “Several boutiques seek out family businesses because they feel they’re well run. They’re willing to give the family the ability to take some money off the table so they feel secure personally, and give those funds for the company to continue to grow, because it’s so well run.” “Take capital when it’s available,” Kunze offers, suggesting businesses take advantage of low interest rates or other banking opportunities that may arise. “You may feel, ‘I may not need capital or a loan or other funding,’ but take advantage if it becomes available or has advantageous rates or terms.” This advice is especially applicable to businesses in emerging growth and technology that are putting a lot of resources into research and development. “Take the money when you can because once you have the product ready to go and it takes off, you’ll need that capital to be able to deploy it, whether from the production standpoint or hiring people to deliver the service.” Business owners, when growing their company, will put personal guaranties on business loans, and, Stover says, this oftentimes is forgotten as the company begins to get bigger. Once a business is beyond the start-up phase, Stover says it’s “important to negotiate not to be tied up and responsible for everything in the business.” In fact, notes Buzzi Shindler, a shareholder with law firm Buchalter
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Nemer, “Signing a personal guarantee instead of signing on the part of the company potentially puts yourself and your family up to personal liability.”
Capitalization and Monetary Efficiencies “The single most important thing smallbusiness owners can do is properly capitalize their business,” Gosar says, pointing out the significant difference between supporting the growth of their business and supporting their lifestyle. “If you’re going to be in business, you need to have the money invested in the business to help it grow, not just peel the money out.” Growth may be internal, accomplished by hiring additional work force and trying to grow the revenue. Or growth may be achieved through acquisition — which will require capital. “Companies that were managed conservatively through the recession and are now sitting on a lot of cash are seeing opportunities with other companies that either weren’t managed well or hit a plateau,” says Travis Leach, partner with legal firm Ballard Spahr LLP. “And companies seeing their market flattening out — which may not be recession-related — are looking for growth.” Financial restructuring may be an option for businesses looking to clean up their balance sheet. Says Leach, “A company can consider what it can give so as to get the other party to agree to restructure its obligation.” The other party may accept equity in exchange for washing away a piece of the debt. For instance, if a company borrowed $5 million from a financial
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institution, it might issue stock, and value the issuance similar to the debt level. “The financial institution might accept that stock in exchange, to wipe out the debt.” Leach cautions, however, that issuing new stock is not always the best alternative. Stover notes that having an efficient tax structure could save a company dollars it could use to grow the company. “What’s often overlooked in a big way are indirect taxes, such as sales tax, excise tax and different jurisdictional taxes,” he says. “These are starting to become a significant increase of the tax burden on companies.” When a company starts to expand into a new jurisdiction, Stover suggests the business owner consider additional aspects of that expansion, such as, if the company will be creating jobs, whether it got all the appropriate incentives, to mitigate the sales or other taxes it will pay, so as to have money to grow the business. “When you’re growing your business, you’re laser-focused on that. A lot of times, you only think about being compliant, without stepping back and considering what benefits or incentives the community might give you to bring jobs or bring expansion.”
Working with Professionals “Most banks see a lot of businesses, so we can give an idea on industry trends,” says Candace Wiest, president and CEO of West Valley National Bank. “We have a lot of data, if they want it.” Explaining, “We really try to understand where a business is and where they’d like to be in a year or three years — the capital they need, what the risk is to their business and their industry,” Wiest says the bank does projections on growth rates and figures out how much capital the business will need based on who their clients are and how fast their receivables are paid. And, she says, “We help them think about different scenarios that could impact their businesses.” For instance, Wiest relates that a few years ago, when they first started hearing about the Patient Protection and Affordable Care Act, they contacted the medical practices they had financed and told them, “We’ve looked at your financials, and if reimbursements get cut any percentage, we can tell you what your income looks like based on your current financials.”
“The single most important thing small-business owners can do is properly capitalize their business.” —Chad Gosar, The Biltmore Bank of Arizona
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Practices which took that “shock test” could look at their current expense structure and determine how they could be more efficient in the new reality. A more positive example Wiest relates is counseling a business that “now is the time to buy your own building.” Pointing out that rental rates may be affordable now but that will change after the economy improves, she notes, “Prices are very affordable and there’s a decent selection of inventory.” Armed with a comparison of the business’s current rent with what, based on current interest rates, the business owner would be paying to own his own building, “they’ve been surprised, whether a small business or a doctor or dentist, at how affordable we can make it to own the building.” Notes Bruckner, “All banks have a lot of different products that can be brought into a relationship. The key is understanding the business and the strategy of the owner well enough that we can bring the right product to the table at the right time, and suitable advice to help the business get to where they’re going.” “We walk a fine line — wanting to do as much as we can, but limiting what we do, to help their business,” Gosar says. “We’re not just transaction, but relationship.” To build that relationship, Bruckner says he encourages business owners to discuss their business in other than pure financial measures.
“As bankers, we’re curious about that — it’s what gives us an understanding of subjective elements of your business.” And, he adds, “It’s surprising how much flexibility can be had by having confidence in those subjective items.” Wiest also speaks to the advantage of working with an accountant, especially through the loan process, noting, “The loan request will go faster; it takes longer when the bank can’t get the answers to the accounting questions.” It also saves time and communication when a business works with an accountant who knows the industry the business is in. Owens, whose firm specializes in dental practices, says, “We can communicate about equipment, supplies, how they deal with team members, the best sort of retirement plans.” Measurements specific to the dental industry, for instance, include how much a hygienist or a doctor produces and how that equates to how much that person earns. With the focus on industry-specific resources, Owens says, “I know the best banks to go to for an industry loan, the best consultant to help with practice management.” And there may be additional tax savings. “The tax code is so big. We’ve focused our practice on those parts of the tax code that dentists can use to save taxes.” Stover raises another issue of financial health. “As the business grows, does the owner feel safe in his own financial security?” Being insecure
“From the legal perspective, the financial health of a company is not simply measured by balance sheets, income and cash flow statements, and assets and liabilities.” —Buzzi L. Shindler, Buchalter Nemer
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in his own financial well-being, a business owner may even stop trying to grow. Noting the importance of balancing the two, Stover says, “It’s easier to take risks if you’re not worried about your own financial well-being.” He recommends a risk check-up as a generally “low-cost way to insure away some of your risk.” But, he says, “Make sure the correct owner is the insured, so, if there’s an event, it pays off correctly.” Using car insurance as an example of a business owner trying to reduce cost but not managing risk, he says a businessperson might insure a car or a truck in his or her personal name because it is cheaper, but use the vehicle in the business — and it’s being used for work when it’s involved in an accident. “When the insurance company finds out it was being used for work and it was not disclosed or the proper riders were not in place, they won’t pay the claim and the owner has to pay it out of pocket.” It’s a good practice to look at the whole portfolio and revise as the business expands. While a business owner likely insures each item individually as he adds it — whether a building or piece of equipment — Stover says to look at it all holistically. “You will have better pricing and better management of the overall risk of the entity — and best use of dollars to manage that risk.” “From the legal perspective, the financial health of a company is not simply measured by balance sheets, income and cash flow statements, and assets and liabilities,” says Buzzi L. Shindler, a shareholder with Buchalter Nemer. The most important considerations are, rather, risk management, asset protection and day-to-day business operations. Explaining that lawyers are not in the business of telling clients how to invest, but to document and memorialize deals and transactions, he says, “The best way businesses can ensure their
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SRP Smart Business Series
NATIONAL BANK OF ARIZONA OPENS AN ENERGY-SAVINGS ACCOUNT My name is Dennis Calik. long-term financial health at the inception is to ensure they maintain their formalities — document and memorialize their intentions, whether with partners or other third parties.” Corporate formalities include keeping bylaws and articles of incorporation up to date. Failing to honor the formalities and to document decisions allows a third party to reach the assets of the individual, Shindler notes, pointing out the reason for forming a corporation or limited liability company is to protect oneself from personal liability. Having good legal counsel can also help businesses avoid issues or disputes further down the road. In addition to working with business owners to plan in advance and anticipate issues that might arise in the business, attorneys can help in overseeing business relationships, discussing and educating business owners on the best means of risk management in day-to-day operations.
That’s Financial? There are a lot of business decisions and practices that may not sound financial, but they really are, Kunze observes. Networking, for instance, can keep a business owner connected with those who are influential to the business’s well-being, such as bankers, attorneys, CPAs, other business leaders, industry organizations and professional associations. “By staying connected with other professionals, you can gain knowledge, leverage ideas and bounce ideas off each other.” And this can often be free. “If you have those connections, you’ll know what might be coming; for instance, if interest rates are rising or the cost of capital is changing, or if you may need to find different vendors.” And hitting the bottom line directly are benefits for the work force. Benefits plans — 401k’s or other types — “may cost a few more
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dollars, but they may help retain or attract talent.” And implementing a wellness program may be less expensive in comparison to the potential increase in premiums. Added benefits may be lower costs of claims and a healthier work environment. Says Kunze, “As a smallbusiness owner, don’t think just of what’s best for you as an employer/owner, but also think of the benefits to your employees. If you tip the benefits to yourself, you may lose good people.” Striving for operational excellence and looking for efficiencies will also impact a business’s financial health. Evaluate the processes at all levels — administrative, front-line production and those providing services — and look for efficiencies in the day-to-day operations. This does not mean to cut employees, Kunze notes. “You may keep the same number of people but do things more efficiently.” The business will be in a better position to grow if it has not slashed its work force. “The commonality among those who do well is, they plan well,” says Bruckner, speaking with the experience of 25 years’ working with businesses, much of it in restructuring. “They translate their financial plan into two or three key items, and they clearly communicate within the company and with their financial partners and advisors.” This includes contingency plans of what to do if the business is not hitting the goals. “Planning is not a onetime item,” Bruckner says, “but an ongoing dialog with all the partners.” Ballard Spahr LLP ballardspahr.com The Biltmore Bank of Arizona biltmorebankaz.com
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SALES
BUSINESS DEVELOPMENT
Avoid Desperation Selling
But when times are slow, there are ways to get clients and customers now by Diana Ennen HAVE YOU EVER done this: Looked at the bank account, looked at the bills, looked at your upcoming schedule and then just went into a major panic? What are you doing to do? The bills are coming in, the clients are heading out, and you are stuck right dab in the middle with what seems like no solution in sight. The last few months might have been great, but now, for some reason times are tough and the clients just don’t seem to be there. What next? Many think they are alone in this scenario, but they aren’t. At one time or another, most businesses face this dilemma — lack of clients, which quickly leads to desperation marketing or desperation selling. They desperately need to get clients. ASAP. Pronto. FAST! But can they? Sales and marketing are so often intertwined and, for many businesses, mean essentially the same thing. Broken down, though, selling is the act of influencing a customer to purchase or buy your product or services and your marketing activities support your sales efforts. What matters most, whether you call it sales or marketing, is to be aggressive in keeping out there and showing potential clients you are the one for them! So what is “desperation selling”? It’s selling through marketing efforts made when you are so desperate for clients that you work at Superman speed and throw everything you have out there, with no general direction. The worst part of desperation selling is, clients and potential clients can feel this and it backfires, often having them lose confidence in your professionalism and services and seeking assistance elsewhere. There is a cure for desperation selling. Plan your marketing. When you are desperate, oftentimes the “fight or flight” scenario comes into play. Or the opposite — you sit in front of your computer screen, frozen. The desperate twinge in your
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stomach tells you that, no matter what you do, you have to do it fast. But instead of going out there and manically tweeting and sending out terribly written content to make your presence known, come up with a plan. Create a simple marketing plan that will help you secure the right clients, at the right pay, for the right reasons. This is not to say you should spend weeks on this plan; after all, you do need that money right away. But take the time to write down exactly who you want to target and what services you want to provide. Then write down the steps to achieve this — and just writing it down will help allay some of that desperation. Keep in mind that, if it’s something you enjoy doing and are good at it, you will do more of it. Get to work — get selling. In your plan, include how you can best get those clients. Review, first, how you got your other clients — and definitely do more of those things. What you will often discover is that you have stopped doing those things and that is what has happened to lead you to where you are today. Get cracking again! Some suggestions to improve your visibility to your ideal client: ■■ Write articles to show your expertise; ■■ Host a teleseminar; ■■ Get active on your social networks with valuable tips, and create a special offer you can promote here; ■■ Review your social media profiles and make sure they are up to date and present the best you; ■■ Consider a paid Facebook ad or promotions or a Google ad (with carefully chosen keywords); ■■ Network online and offline; ■■ Update your website and make it more SEO-friendly and also emphasize more what you can do for your clients; and ■■ Blog. INBUSINE SSMAG.COM
BOOKS What’s important here is, even after you get those clients to get you out of your crunch, you continue these activities so you don’t get back there again. Review your pricing. Don’t lower your rates, but can you offer your product or services to select potential clients at a special rate just to jumpstart your efforts? Review your rate structure and see if there might be ways to do that. Remember, you don’t want to come off as desperate; the impression you want to make is, “Let’s work together, and I have this great special going on now.” Also, review your pricing and see if there are more effective ways to sell your services. Perhaps you can package a few services together and offer them as packages at one fee instead of individually at your hourly rate. Or add a few extra services to your existing list of services that might bring in more income. Get creative. You know your business best, so consider steps you can take today to improve your bottom line. Connect with your current clients, potential clients, associates, and more. Now is a perfect time to connect with them and tell them about a fabulous special you are offering. And yes, it’s OK to mention that you are looking for new clients. What happens here is, many aren’t aware that you are looking for more work, and once they are, they might have the perfect connections. Get your head in the game. It might not seem like it, but your mindset plays a big part in getting and keeping your clients. Clients can feel fear as much as they can feel confidence. You always need to portray that confidence to them. It’s time to get excited about your business again. Forget about this slow spell and remember the good times where business was rocking. That positive energy can do wonders to improve your confidence. And the more confidence you have, the more success you will find. Set realistic goals. It’s important to get down in writing what you hope to accomplish, and be honest here. You probably won’t be able to find 10 clients by noon, but can you find two clients by the end of the week. YES! That’s doable. Write it down and do all you can to make it happen. Hire help. You may think, “What? Didn’t you hear me — I’m desperate.” But while that is true, it also might be time to hire someone to review what you are doing and give you some recommendations. Perhaps your marketing isn’t working because you are doing it wrong, and, with a little tweak or two, you can turn it all around. Perhaps you are doing it right but just not connecting in the right places. An outside professional can often get you on the right track. It’s no fun to have that stress of needing to make money now, but these tips can help you turn it around. And remember the most important element to successful selling is to repeat and repeat. Continually do more of the right things to grow your business and you may not suffer the desperation blues again. Diana Ennen is president of Virtual Word Publishing (www.virtualwordpublishing.com), which offers PR and marketing services, and also hosts PR classes through www.prsuccessseries.com. She has been featured on “Fox Business News,” CBS, CNN Radio, USA Today and Entrepreneur Magazine, among others, and is the author of six books on starting a business, including Virtual Assistant – the Series: Become a Highly Successful, Sought After VA.
INBUSINE SSMAG.COM
MILLENNIALS & BUILDING BILLIONS
You Only Have to Be Right Once: The Unprecedented Rise of the Instant Tech Billionaires SILICON VALLEY’S NEW billionaires are an unconventional breed, turning ideas into money at a rate never before seen in human history. Among these golden boys are: Elon Musk, billionaire bachelor and founder of PayPal, electric carmaker Tesla, and private space company SpaceX; Evan Spiegel, 23-year old founder of Snapchat, who recently turned down a $3 billion offer from Facebook; and Alex Karp, the eccentric philosopher with almost no tech background who turned Palantir into a data-mining champion. Over the last three years, Forbes has published in-depth profiles of this new batch of billionaires. Now, fans and critics alike will get a comprehensive look at who these super-entrepreneurs are and what they say about their own success and their plans for the future. Randall Lane $27.95 • Portfolio Hardcover • On shelves and online
Millennial Money: How Young Investors Can Build a Fortune THE MILLENNIAL GENERATION will not be able to rely on pensions and social security in retirement. Instead, they will have to save and invest in the global stock market to meet their goals. To build wealth, young people must start investing early and buck conventional market wisdom. Millennial Money will explain the most common mistakes that hurt investors’ long-term returns and show why their investments in popular stocks or the hottest industry of the day have resulted in such underwhelming results. More importantly, the book will introduce a strategy that can help us overcome our shortcomings as investors. Armed with this strategy, Millennials can become the most successful investing generation in history. Patrick O’Shaughnessy $25 • St. Martin’s Press • On shelves and online
Millennials & Management: The Essential Guide to Making It Work at Work AS MANAGEMENT AGES and prepares to work longer than previous generations and Millennials join companies at steady rate, companies are suffering through tension and dissonance between Millennials and Boomers, and realizing that they can’t just wait for management to age out to fix it. This book addresses a very real concern of large and small businesses nationwide: how to motivate, collaborate with, and manage the Millennial Generation, who now make up almost 50 percent of the American work force. The key is to change Boomer attitudes from disbelief and derision to acceptance and respect without giving up work standards. Lee Caraher $24.95 • Bibliomotion Inc. • On shelves and online
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H E A LT H C A R E
YOUR BENEFIT TO BUSINESS
Healthcare: Networks and Coverage
Look out for cost, specialty coverage and network availability by RaeAnne Marsh
Essential Health Benefits
The minimum 10 essential categories are: • Ambulatory patient services • Emergency services • Hospitalization • Maternity and newborn care • Mental health and substance use disorder services, including behavioral health treatment • Prescription drugs • Rehabilitative and habilitative services and devices • Laboratory services • Preventive and wellness services and chronic disease management • Pediatric services, including oral and vision care
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THE ALPHABET SOUP of healthcare today includes MEC (minimum essential coverage) and EHB (essential health benefits). What is required under one does not neatly mesh with what is required under the other, which contributes to the confusion as employers and employees attempt to meet the requirements of the Patient Protection and Affordable Care Act. MEC refers to the individual’s responsibility to have healthcare coverage, EHBs are the elements all employersponsored health plans must include, and there is some disparity between the two as far as specific benefits. However, notes Quarles & Brady attorney Sarah L. Fowles, while employers are not required to buy health insurance that is MEC, as a practical matter most employersponsored health insurance policies will qualify as such. The issue of EHBs is a little more complicated. “A ‘group health plan’ may or may not cover all essential health benefits, depending on whether it is a self-insured plan … or a fully-insured health plan,” she says, explaining there is no requirement that a self-insured plan cover EHBs, and a fully insured plan is only required to cover EHBs if it is offered in the “small group market.” What matters from the employee’s standpoint is, an individual covered by an employer’s group health plan (which is MEC, regardless of whether it covers EHBs) should not be subject to a penalty
under the individual shared responsibility mandate. Fowles points out, however, there are some special rules. “Some group health plans that only offer ‘excepted benefits’ — such as dental-only or vision-only expenses [which PPACA excepts from its list of EHBs] — typically would not be treated as MEC even if for some legal purposes they might be treated as group health plans.” For employees who opt to purchase coverage through the individual marketplace, Fowles says those individual health insurance policies will be MEC and will cover EHBs. “This is due to the requirements placed on qualified health plans sold in the exchange and the definition of MEC, which includes qualified health plans,” she explains. Different Plans for Different Needs
Choosing a policy means settling on a network of providers that will be available. Jeff Stelnik, senior vice president of strategy, sales and marketing with Blue Cross Blue Shield of Arizona, suggests employers consider the following questions when choosing what coverage to purchase: Does the carrier have a national presence (an aspect especially important for employers with multiple locations)? What is the reputation of the carrier, and how is it rated on such elements as customer service and satisfaction? Will the plans meet the needs INBUSINE SSMAG.COM
Different types of benefit plans include health savings accounts, traditional co-insurance, all-copayment and catastrophic. Pointing out additional considerations, Stelnik says a PPO may be a good choice for an individual who travels a lot and wants the freedom to go out of network, while an HMO would suit someone who does not travel a lot and is in good health. “There are a lot of cost and quality tools available online,” he says, adding, “Individuals need to have a better line of sight regarding cost of care.” Networks: Size Matters
of a diverse work force? What is the ease of implementing the plan? And John Shufeldt, M.D., who serves on the board of managers of Arizona Care Network, suggests checking out the plan’s website to see what providers are on the policy’s panel. “You can have the greatest plan in the world, but if no doctors take that plan, you’re out of luck,” Shufeldt says. David Berg, M.D., chairman of Redirect Health, raises another point with his suggestion that employers “demand of brokers and hospitals to see the negotiated prices for the different hospitals.” He maintains that quality is a marketing and branding issue. “It’s my belief that, from one hospital system to another, there’s not much difference.” The bigger hospital systems that can market themselves better negotiate higher rates, which means the consumer then pays his percentage at a higher rate. Interestingly, among the 10 essential health benefits that PPACA mandates for individuals and small employers is pediatric dental. Other dental, as mentioned above, is “excepted” and would be covered under a separate policy. Says Craig Livesay, Delta Dental’s vice president of underwriting and professional relations, “Narrow networks [for medical] are a trend, but dental is seen as a respite from the chaos and confusion of medical coverage.” When choosing a dental plan, it’s important to look at the coverage it offers across all the employees in the organization and for all members of the individual’s family through the different stages of life. “For children, the big focus is prevention; as the mouth matures, the focus is on minor and major restorative work.” INBUSINE SSMAG.COM
The concept of “narrow network” was developed to provide consumers a cost trade-off. While narrow networks come in a variety of iterations, all must meet rules regarding network adequacy: They need to have broad enough coverage across various aspects to be able to create a network, and that includes primary care, specialists and hospital. “A qualified health plan must maintain a network that is sufficient in number and types of providers … to ensure that services will be accessible without unreasonable delay,” Stelnik says, adding that for a “reasonable access” standard, “plans must contract with at least 30 percent of the ‘essential community providers’ in their service area.” Other important elements of coverage that Shufeldt points out are emergency, hospice and “all the ancillaries, such as durable medical equipment and prescription benefits.” “Insurance companies are experimenting with what’s marketable to employers,” says Bob Campbell, senior vice president of business development and chief strategy officer of Phoenix Children’s Hospital, cautioning, “That’s where employers need to be careful they’re not buying something that will not meet the needs of their employees.” PCH, for instance, offers the broadest range of pediatric specialties and service-line programs in Arizona, which might be an important consideration to a work force with young families. But Campbell says he has found a lack of price transparency by insurers as he has studied available policies. “What is the cost of adding PCH? We have not been able to get insurance companies to give us numbers, which has led us to believe it seems to not cost much more, if anything, to include us.” Network size becomes an issue. Stelnik suggests it would be helpful to compare network sizes when choosing a plan, observing, “Maybe [a network] has just one hospital system and therefore not all the specialties.” When BCBSAZ creates a product, Stelnik says, it looks at coverage gaps and tries to fill in. According to Stelnik, BCBSAZ’s Alliance product works with Banner or Scottsdale Health, “who both have a very wide range and can cover virtually all the specialties,” and its Select product combines Dignity Health, Phoenix Children’s Hospital, Abrazo and Iasis “because we’re looking for the right balance.” Similarly, Mark Hillard, who is CEO of Arizona Care Network and Dignity Health Medical Group, explains Arizona Care Network built a robust network with Dignity Health, Phoenix Children’s Hospital — “The only children’s hospital in the state and one of the largest in the country” — and Abrazo, whose hospitals “cover geography where Dignity does not.” Shufeldt, observing that “if you have great specialists, you don’t have to go out of network,” says the point is for ACN to have “enough geographic dispersion to take care of the majority of patients who present, including out in the boonies.”
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H E A LT H C A R E
YOUR BENEFIT TO BUSINESS
“Insurance companies are experimenting with what’s marketable to employers, … That’s where employers Fast Facts
need to be careful they’re not buying something that
Individual Marketplace Open Enrollment Nov. 15, 2014 – Feb. 15, 2015
will not meet the needs of their employees.”
SHOP Open Enrollment perpetual for 2014 Below are the penalties to individual for noncompliance with the individual mandate of the PPACA Year Assesed to be the greater of: 2014 $95/adult, $47.50/child, maximum of $285/family Or 1% of family income 2015 $ 325/adult, $162.50/child, maximum of $975/family Or 2% of family income 2016 $ 695/adult, $347.50/child, maximum of $2,085/family Or 2.5% of family income Information for Businesses healthcare.gov/ small-businesses ObamaCare Individual Mandate obamacarefacts.com/ obamacare-individualmandate.php The SHOP Marketplace healthcare.gov/ what-is-the-shopmarketplace
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—Bob Campbell Understanding the geographic availability of the network is important, but Stelnik says BCBSAZ has discovered the information may not be clear to purchasers using the federal exchange. Seeing that it was signing up individuals who resided in a county other than where a network’s providers were located, BCBSAZ made outreach calls to make sure they understood that fact — and indeed, Stelnik relates, some purchasers had not, and thanked BCBSAZ for straightening them out. The Big Picture
Shared information and coordinated care was a significant aspect of accountable care organizations (ACOs), a healthcare network concept that was touted as a breakthrough idea only a few years ago. Since the passage of PPACA, networks are becoming more the standard than the exception. Shufeldt believes collaboration and shared information will help reduce the cost of care, and illustrates this from his own experience. “I work in ER at St. Joseph’s and I had a patient who had had an MRI at another MRI center — who said they could fax the report to me but couldn’t send the MRI. No doctor will perform surgery on someone’s head based on a report, so I had to redo the MRI.” Another issue arises in needing to suggest a medication but not having access to complete health records and therefore not knowing about a previous bad reaction or interaction with other medications. Noting, “Everybody’s working on transparency and outcomes,” Hillard says, “I believe communication among providers will aid in the process of delivering high quality and improving the value of the healthcare that’s being delivered.” This is where the technology of electronic health records is making a difference, granting access to critical information when a patient is receiving care. This may be an emergency room physician having access to images performed at a partner facility, a primary care physician having access to specialists’ reports, or a specialist having information on the reason for a patient’s visit. “The genesis of all ACOs forming is [an effort] to reduce cost, improve efficiency and make the patient experience better,” Hillard says. In determining what treatments and procedures are covered, insurance companies follow “best practices,”
which Shufeldt explains is evidence-based, scientifically proven and authenticated information that helps physicians direct clinical care. Noting, “Insurance plans have panels of physicians as advisors. They don’t just jump to the ‘next best thing’ — the cutting-edge has risk,” Shufeldt says, “Generally speaking, treatments and medications that are evidence-based are generally covered, to some extent if not completely.” But healthcare coverage is changing, and Campbell emphasizes the need to educate employers on the importance of thinking about those changes. “You no longer have everything in these policies, so you really do need to look at them in more detail.” For instance, if a policy seems attractive from a price standpoint, consider “how does that match up with the needs of your employee population? What are the potential gaps, and what is the cost of filling the gaps by having a more comprehensive network?” He believes part of the employer’s role is truly understanding the healthcare needs of the employees, and “thinking through with an advisor regarding the kind of policy they want and need, and what kind of policy the employer is willing to purchase or provide.” And according to Stelnik, the results of focus-group research by BCBSAZ show that what’s important to people is a choice of options. Arizona Care Network azcarenetwork.org Blue Cross Blue Shield of Arizona azblue.com Delta Dental of Arizona deltadentalaz.com Quarles & Brady LLP quarles.com Phoenix Children’s Hospital phoenixchildrens.org Redirect Health redirecthealth.com
Healthcare
the Education Series
q Healthcare: The Employer’s Role in Employee Choices (Sept. 2014) q Healthcare: Networks and Coverage q Healthcare: A Tool to Strengthen Productivity To reference published segments, please access the archived “Healthcare” articles on the In Business Magazine website, www.inbusinessmag.com.
INBUSINE SSMAG.COM
Provide Innovative Benefit Solutions, Industry Relevant Analytics, Superior Customer Service for midsize to large employer programs. Experience Experts Risk Management, Health Care Reform, Compliance, and Employee Engagement Strategies. We are committed to designing programs that assured to meet corporate goals, expectations and budget. Ancillary Programs Voluntary Benefits, Executive Benefits, Financial Planning and Wealth Management
2012 | 2013
Stephanie Waldrop, Principal
602.800.5070
www.employeebenefitsint.com
EMPLOYEE BENEFITS INTERNATIONAL, INC. 2525 E. Arizona Biltmore Circle, Ste. D144, Phoenix, AZ 85016
TRICKLE UP
A VIEW FROM THE TOP
Mike Nealy: Leading by Example Successful leadership is more than the title by Alison Stanton that people don’t want to get bossed around, and so it’s important for me to have a ‘do as a say, not as I do’ way of thinking.” He also believes in the importance of constantly communicating with his employees. “You cannot over-communicate,” he says, adding that, from sending out emails on a regular basis and having a standing weekly all-staff meeting to just sending out an inspirational quote about leadership, being in constant touch with his employees is vital. And during those weekly meetings, Nealy keeps the emphasis on the entire staff rather than himself and asks people to contribute and share ideas and goals. “It’s not just about me giving a speech,” he says. “I facilitate an open-door policy and focus on communication, and we all work together as a team.” As part of his commitment to communication, Nealy says it’s important to let his staff know where they are going as an organization, and to spell out goals for the organization. “This lets everyone know where we are heading, and then we can track, report and celebrate our goals along the way. I also want people to have personal goals that they are working towards, because I learned early on that having happy and healthy employees is as critical to success as the actual tasks they are doing.”
Mike Nealy and the Fiesta Bowl
■■ Nealy oversees the community-based Fiesta Bowl organization, which operates the Fiesta ■■ ■■ ■■ 34
Bowl, Cactus Bowl and other ancillary events. The 44th Annual Fiesta Bowl will take place on December 31, 2014, at the University of Phoenix Stadium in Glendale. In 2012, Nealy was named Sports Business Leader of the Year by Minnesota State University for demonstrating outstanding business, academic and visionary leadership through effective management of his organization. It is estimated that the Fiesta Bowl and its surrounding events have generated more than $1,000,000,000 for the Arizona economy over the past five years. The Fiesta Bowl was founded in 1971 as a nonprofit organization.
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“It’s very important for me to not be the leader based on my title as boss, or to try to be popular and be everyone’s friend. A leader has to be motivating and inspiring, and not just tell people what to do.” Communicating openly with employees when there is a problem is also crucial; wishing a problem would disappear is not an effective approach. “It’s not always easy to address issues with personnel and it can lead to anxiety or discomfort, but things won’t just go away on their own. Also, by not addressing it, I’m bound to have to deal with it later on, and I might also find out that it’s just a perceived problem or one that I can help with.” For example, Nealy says, if an employee is late to work three days in a row, it is better to talk to him or her right away to see what is wrong. “Maybe something is happening to make them be late, and maybe I can help in some way.” At the end of the day, whether he’s working with a hockey team or for an organization that operates major bowl games, Nealy says he likes to remember the words of advice of retired football player and coach Lou Holtz: “Do right. Do your best. Treat others as you want to be treated.” Fiesta Bowl fiestabowl.org
INBUSINE SSMAG.COM
Photo courtesy of Fiesta Bowl
IN MAY, MIKE Nealy was named executive director of the Fiesta Bowl. Prior to accepting this position, Nealy had spent eight years with the Phoenix Coyotes NHL franchise and Gila River Arena. As president and chief operating officer for the Phoenix Coyotes, Nealy helped the organization achieve recordbreaking sales. No matter what job he is doing, Nealy — who worked for the Minnesota Wild for four years before coming to Arizona, and also has 14 years of experience in operating and financial business leadership roles — says that leading by example has been a major key to his success. “It’s very important for me to not be the leader based on my title as boss, or to try to be popular and be everyone’s friend,” he says. “A leader has to be motivating and inspiring, and not just tell people what to do.” For example, Nealy says, if he expects his employees to come to work on time and work hard all day, he will do the same thing. If there is an upcoming fundraiser that the Fiesta Bowl organization is going to be a part of, he will be available to help set up and do tasks like placing gifts on the various tables, along with his employees. “I’m fortunate enough to be in a position of leadership, so I cannot expect others to do things I won’t do myself,” he says. “To be successful and a good leader I’ve found
WWW.INBUSINESSMAG.COM
October 2014
ON THE AGENDA
A listing of Greater Phoenix business organizations and their events. Visit www.inbusinessmag.com for an expanded monthly calendar of educational, networking and special business events.
Greater Phoenix Economic Council
Chandler Chamber of Commerce
GPEC Annual Dinner
Chandler 100
Thurs., Oct. 9 — Cocktails: 5:30p; Dinner: 6:30p
Thurs., Oct. 14 — 5:30p – 8:30p
CELEBRATING 25 YEARS as Arizona’s premier economic development organization, the Greater Phoenix Economic Council will host its Annual Dinner October 9 at the Sheraton Phoenix Downtown Hotel. Program is aimed at members and friends of GPEC — to thank them for their work over the years — as well as those who would like to learn more about the organization. The event will commemorate three individuals who have supported and furthered the GPEC mission to promote economic development projects within the community. Award recipients include City of Phoenix Mayor Greg Stanton, who will receive the Outstanding Regional Contribution award; CEO and President of The Plaza Companies Sharon Harper, who will receive the Distinguished Service award; and Rebecca Timmer, who will receive GPEC’s first-ever Ambassador of the Year award. “The Ambassador’s Award is a particularly exciting thing for me,” says GPEC President and CEO Barry Broome, “and also something I am very proud of because it celebrates those who have taken a pivotal role in changing the community.” The Ambassador’s Award, which will be presented by City of Maricopa Mayor Christian Price, will mark a new series of recognized accomplishments within the GPEC community. “Our ambassadors are an incredibly sophisticated, external group when it comes to GPEC … Since they are such a prominent part of our organization, the investors decided it would now be appropriate to name an Ambassador of the Year,” says Broome of the inspiration for the new award. Comedian Frank Caliendo (“MadTV” and feature film The Comebacks) will kick-off the evening’s festivities. Tickets are $175 for GPEC investors; for non-GPEC investors, $200. —Alexandra Lyon
CHANDLER 100, one of the largest events hosted by the Chandler Chamber of Commerce, will celebrate the top 100 businesses in the community. A handful of businesses will be selected to be spotlighted in a video premiered at the event. “Each year we pick seven to eight different companies of various sizes that we like to showcase and celebrate in front of the general public,” says Chamber President and CEO Terri Kimble. Of those, Garmin and Insys Therapeutics were among the businesses featured last year and received special recognition for their achievements. “What is exciting is some of our smaller companies have moved up on the list,” says Kimble, noting that the top 100 list looks different each year and attendees are able to track the progress they, themselves, and others have made. “It is great because we are seeing businesses grow and this is something we want to celebrate and share with people.” Having continually sold out of the 250 seats the previous venue would hold, Chandler 100 will be held in the Chandler Center for the Arts this year. “We have sold out every year,” says Kimble of the event, “and we want to accommodate all the businesses and their colleagues, so we had no choice but to pick a larger venue!” The event is free for chamber members; non-members, $50. —Alexandra Lyon
Greater Phoenix Economic Council gpec.org
Notable Dates This Month Mon., Oct. 13 Fri., Oct. 31
Columbus Day Halloween
Agenda events are submitted by the organizations and are subject to change. Please check with the organization to ensure accuracy. See more events online at www.inbusinessmag.com.
Chandler Chamber of Commerce chandlerchamber.com
WANT TO CUT ENERGY COSTS? THINK SRP REBATES. savewithsrpbiz.com INBUSINE SSMAG.COM
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ON THE AGENDA ARIZONA ASSOCIATION FOR ECONOMIC DEVELOPMENT Luncheon
Tues., Oct. 14 11:30a – 1:15p
AAED members and guests: $40; nonmembers: $50; late registrants: $55 Phoenix Country Club 2901 N. 7th St., Phoenix aaed.com
ARIZONA CHAMBER OF COMMERCE AND INDUSTRY Cyber Essentials to Protect Your Business Wed., Oct. 8 8:00a – 1:00p
Exploration of the new cybersecurity framework. Members: $25; non-members: $45 Montelucia Resort & Spa 4949 E. Lincoln Dr., Paradise Valley Taylor McArthur, tmcarthur@azchamber.com
ARIZONA SMALL BUSINESS ASSOCIATION Lunch and Learn Thurs., Oct. 2 11:30a – 1:00p
Free ASBA’s Business Education Center 4600 E. Washington St., Phoenix Gabe Salcido, gsalcido@asba.com
Women’s Biz Connection Wed., Oct. 8 3:00p – 4:30p
Free ASBA’s Business Education Center 4600 E. Washington St., Phoenix Gabe Salcido, gsalcido@asba.com
ARIZONA TECHNOLOGY COUNCIL Lunch and Learn Tues., Oct. 7 11:30a – 1:00p
“How to Build Your Inbound Marketing Strategy,” presented by Pyxl, covers how to build a strategy that will allow your organization to experience dramatic growth. Members: free; non-members: $15. Lunch is provided. ASU SkySong 1475 N. Scottsdale Rd., Scottsdale aztechcouncil.org
Lunch and Learn Tues., Oct. 14 11:30a – 1:00p
“Growing the Bottom Line – Maximizing Government Contracts to Grow Revenue and Absorb Costs,” presented by BDO USA, covers how to successfully obtain government contracts and mitigate existing contract requirements while maximizing cost recovery. Members: free; non-members: $15. Lunch is provided.
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OCTOBER 2014
ASU SkySong 1475 N. Scottsdale Rd., Scottsdale aztechcouncil.org
ASSOCIATION FOR CORPORATE GROWTH – ARIZONA Panel Discussion and Wine Tasting Tues., Oct. 14 5:00p – 7:30p
“A Taste of Private Equity” featuring some of the finest Arizona wines presented by some of the most active members of the deal-making community, followed by a panel discussion on the state of private equity in Arizona and across the country. Members: $59; non-members: $69; after Oct. 7: add $10 Arizona Biltmore Resort 2400 E. Missouri Ave., Phoenix acg.org/arizona
CENTRAL PHOENIX WOMEN Luncheon
Thurs., Oct. 30 11:30a – 1:00p
$75; reservations required Ritz Carlton Phoenix 2401 E. Camelback Rd., Phoenix centralphoenixwomen.org
CHANDLER CHAMBER OF COMMERCE Technology Brown Bag Lunch Seminar Series Thurs., Oct. 9 11:30a – 1:00p
This month’s technology topic: Twitter/ Facebook/LinkedIn Overview How to utilize social media for your business, presented by Robert Reed, with Expose Your Biz Online, and Ryan McCaigue. Free Chandler Chamber of Commerce 25 S. Arizona Pl., Chandler info@chandlerchamber.com
Chandler 100
Tues., Oct. 14 5:30p – 8:30p
One of the Chandler Chamber’s biggest events of the year, Chandler 100 will showcase the top 100 business in the city. Chandler Mayor Jay Tibshraeny will be on hand to recognize this year’s honorees. Members: $50; non-members: $60 Location TBA info@chandlerchamber.com (See article on page 35.)
EAST VALLEY WOMEN Breakfast
Tues., Oct. 21 7:30a – 9:00a
$25; reservations required Hilton Phoenix East Mesa 1011 W. Holmes Ave., Mesa eastvalleywomen.org
ECONOMIC CLUB OF PHOENIX
LOCAL FIRST ARIZONA
Luncheon
Get to Know Local First Arizona
Thurs., Oct. 9 11:30a – 1:30p
Wed., Oct. 15 6:00p – 8:00p
Speaker: Ray Anderson, athletic director and university vice president for Arizona State University, and former executive vice president of football operations for the National Football League. Non-members: $75 JW Marriott Desert Ridge Resort & Spa 5350 Marriott Dr., Phoenix Johanna Urrutia, wpcarey.ecp@asu.edu
Local First Arizona will discuss the work it is doing to promote and support Arizona’s independent businesses. Enjoy refreshments and door prizes. Free; open to owners and representatives of Arizona-owned businesses as well as current LFA members. RSVP required. The MonOrchid 214 E. Roosevelt St., Phoenix chrisal@localfirstaz.com
GLENDALE CHAMBER OF COMMERCE
NAWBO PHOENIX
Candidate Forum Glendale City Council – Membership Luncheon
Wed., Oct. 8 9:30a – 10:45a
Tues., Oct. 7 11:30a – 1:30p
This is an important election for the City of Glendale. Candidates for Barrel District: Randy Miller, Bart Turner. Candidates for Cholla District: Gary Deardorff, Lauren Tolmachoff. Candidates for Ocotillo District: Jamie Aldama, Norma Alvarez. Members: $35, after Oct. 3: $40; future members: $50 Renaissance Glendale Hotel & Spa 9495 W. Coyotes Blvd., Glendale glendaleazchamber.org
21st Annual Auction Fri., Nov. 7 6:00p – end
Support the Chamber’s programs and enjoy a great night of networking. $55, includes dinner Glendale Civic Center 5750 W. Glenn Dr., Glendale glendaleazchamber.org
GREATER PHOENIX ECONOMIC COUNCIL Annual Dinner/25th Anniversary Thurs., Oct. 9 Cocktails: 5:30p; Dinner: 6:30p
GPEC Annual Dinner Celebrating 25 Years Sheraton Phoenix Downtown Hotel 340 N. 3rd St., Phoenix GPEC.org (See article on page 35.)
GREATER PHOENIX BLACK CHAMBER OF COMMERCE How to do Business with APS Wed., Oct. 15 2:00p – 5:00p
Presented by Supplier Diversity & Development in cooperation with the Greater Phoenix Black Chamber of Commerce. Free APS – Conference Room 2 South 400 N. 5th St.., Phoenix phoenixblackchamber.com
NAWBO University “Exhibit Like an Expert – Turn your booth into a powerful profit center.” Susan Ratliff, president of Susan Ratliff Presents Inc, will explore the five key strategies every exhibitor must master to sell more, look great and make money at trade shows, consumer shows and events. Members free; non-members: $30 Phoenix Country Club 2901 N. 7th St., Phoenix nawbophx.org
Luncheon
Wed., Oct. 8 11:00a – 1:00p
“Let’s Get Down to Business – Image is Everything: Learn how to make your personal image match your business value,” presented by Debra Davenport, president of Davenport Public Relations. Watch three NAWBO members be transformed through a custom image consultation. Members: $38; non-members; $48; RSVP by Oct. 3 Phoenix Country Club 2901 N. 7th St., Phoenix nawbophx.org
NORTH PHOENIX CHAMBER OF COMMERCE Business Resource & Networking Luncheon Tues., Oct. 14 11:30a – 1:30p
Members: $20; non-members: $25; after Oct. 10: add $10 Stonecreek Golf Club 4435 E. Paradise Village Pkwy. S., Phoenix northphoenixchamber.com
Mix & Mingle Networking Event Thurs., Oct. 16 5:30p – 7:30p
Members: free; non-members: $10; at the door, everyone: $15 Embassy Suites Phoenix 4415 E. Paradise Village Pkwy. S., Phoenix northphoenixchamber.com
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Please confirm, as dates & times are subject to change.
SCOTTSDALE AREA CHAMBER OF COMMERCE
Business After Hours
Expert Human Resource Series
Joint mixer with the ASU Alumni Association. $10; free with RSVP in advance Residence Inn Downtown Tempe by Marriott 510 S. Forest Ave., Tempe tempechamber.org
Thurs., Oct. 23 7:30a – 9:00a
The second of an informal series designed to be a discussion between HR representatives. Seminars are facilitated by an HR professional. This session: “Top 3 Documents.” $20 per seminar, $100 for all 7 seminars Mountain States Employers Council 7975 N. Hayden Road, Scottsdale Nikki Hoffman, nhoffman@scottsdalechamber.com
TEMPE CHAMBER OF COMMERCE Hot Topics and Lunch Thurs., Oct. 16 11:30a – 1:00p
Special guest ASU Women’s Basketball Head Coach Charli Turner Thorne will speak on the importance of effective communications as she shares stories of her experiences with success on and off the courts. Members: $25; public: $35 Location tbd tempechamber.org
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Wed., Oct. 22 5:30p – 7:00p
OTHER BUSINESS EVENTS East Valley Business Expo Wed., Oct. 1 2:00p – 6:00p
WEST VALLEY WOMEN
This is the Southeast Valley’s largest business expo of the year, where 1,000 attendees are expected and more than 140 exhibitors will be on site. Admission free with business card Mesa Convention Center 201 N. Center St., Mesa eastvalleybusinessexpo.com
Luncheon
Distinguished Speakers Series
Tues., Oct. 7 11:30a – 1:00p
“Woman of the Year” Members: $30; non-members: $35 Arizona Broadway Theatre 7701 W. Paradise Ln., Peoria westvalleywomen.org
WOMEN OF SCOTTSDALE Luncheon
Fri., Oct. 17 11:30a – 1:00p
“16th Anniversary Celebration” $35; reservations required Westin Kierland Resort & Spa 6902 E. Greenway Pkwy., Scottsdale womenofscottsdale.org
Tues., Oct. 14 11:00a – 1:30p
“Defense of Liberty, Equality and Social Justice” presented by speaker Dr. Vaira Vike-Freiberga, former President of Latvia. $75 Arizona Biltmore Resort 2400 E. Missouri Ave., Phoenix bitly.com/distinguished-speakers
ABA/AGC Economic Forecast Wed., Oct. 15 4:30p – 6:00p
“Will Arizona (Construction) Get Hot Again?” presented by Arizona Builders’ Alliance and Associated General Contractors. Please join Ken Simonson, AGC’s National Economist, to learn his predictions and research for the future.
Members: $20; non-members: $40 ABA/AGC offices 1825 W. Adams St., Phoenix azbuilders.org
2nd Annual Global Business Conference Thurs. & Fri., Oct. 23 & 24 All day
Information and resources on global business opportunities, presented by the Thunderbird School of Global Management and the Phoenix MBDA Business Center. $250 Sheraton Phoenix Downtown Hotel 340 N. 3rd St., Phoenix phoenixMBDAcenter.com
10th Annual International State of the State Mon., Oct. 27 11:00a – 1:30p
The Phoenix Committee on Foreign Relations presents “Arizona’s Place in International Trade” with keynote speaker Larry E. Penley, Ph.D., president and chief economic officer of Thunderbird School of Global Management. This is the only program in the PCFR season that is open to the public. Members: $65; general public: $75; registration deadline: Oct. 22 Ritz Carlton Phoenix 2401 E. Camelback Rd., Phoenix pcfraz.org
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FOCUS
OUR SUBJECT IN-DEPTH
Business Built the Glendale CVB Business-initiated bed tax pays off for West Valley tourism by Don Harris GLENDALE HOTEL EXECUTIVES, looking for a way to boost business, took the unusual step of asking for a tax increase, and it turned out to be a win-win-win. Revenue from a 1.6-percent increase in Glendale’s bed tax is earmarked for the Glendale Convention & Visitors Bureau, which has increased its promotional and marketing activities; hotel occupancy rates are growing by double digits; and it doesn’t cost Glendale residents and local taxpayers a dime. A trifecta. The unusual arrangement of the private sector offering to provide funding for a government agency stems from Glendale hotel operators seeing an opportunity to tap into the lucrative convention and group market. The prospect of attracting major events was enhanced after Glendale became home to the University of Phoenix Stadium and the Arizona Cardinals, Gila River Arena and the Arizona Coyotes, and host to such mega attractions as the Super Bowl, including the upcoming 2015 game, and Pro Bowl and the Fiesta Bowl, plus the Westgate Entertainment District. In fact, the 2008 Super Bowl held in Glendale was the trigger. Lorraine Pino, manager of the Glendale CVB, tells how members of the former West Valley Events Coalition recognized the benefit of working together to showcase the region. “The coalition saw that when we bring in large-scale events like the Super Bowl, Spring Training baseball and even Wrestlemania, we need to build partnerships to make sure that we’re receiving our piece of tourism pie. So, we formalized our partnerships and formed the Glendale Convention and Visitors Bureau in 2010,” she says. The 1.6-percent increase in the bed tax, approved by the Glendale City Council in 2012, boosted the tax to 5 percent, which is comparable to most other Valley cities. The increase generates about $400,000 a year, and brings the CVB budget to $700,000, Pino says. The CVB is entirely funded by the bed tax, which for the most part is paid by visitors, with no impact on the city’s general fund and local taxpayers. Although the CVB is based in Glendale, it serves 14 West Valley cities. In the past few years, the number of Glendale hotel rooms has increased to nearly 1,500 from just 400, and the West Valley now boasts 8,000 rooms.
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The move to fully fund the CVB with the bed tax was recommended by the hotel operators. “It was a natural transition that the hoteliers saw even before the CVB saw it,” Pino says. “When the business community speaks, you want to listen. They really carried the water for us.” Pino credits Lynnie Green, general manager of the Renaissance Glendale Hotel & Spa, the largest in the city with 320 guest rooms that include 46 suites, as being the leading “proponent and cheerleader for the hotel business.” Green notes the business community knows the CVB has the wherewithal to help land a major meeting or event. Now in her eighth year in Glendale, Green praises the CVB and says, “Overall, there has been tremendous improvement in getting the City of Glendale’s name out there.” The push from the hotels came about even though the CVB was already doing a good job, especially in the leisure market. The hotels were targeting the group market, which was new to Glendale. As a result of the additional support, Glendale receives more money to promote the region, increasing outreach to Southern California and the Midwest, especially the Chicago area. Being the spring training home of the Los Angeles Dodgers and the Chicago White Sox figures into that strategy. In addition, an advisory committee consisting of representatives from each of the Glendale hotels helps drive tourism programs and comes up with new opportunities. One of the key recommendations was the formation of a CVB sales division specifically for conventions and groups. The new division, led by a sales manager, is expected to debut this month. “We listened and we heard,” Pino says. “Since we have this new funding, we have experienced double-digit increases in hotel occupancy year over year. We have added staff; we have increased member benefits, including a new mobile app, a blog and the latest social media tools; plus we’re increasing our outreach to media familiarization tours.” A Glendale resident for 42 years, Pino, bursting with pride, says, “I have seen our city change in such an amazing way. Seeing the growth and being part of it is the best job. We have changed from maybe a one-day destination with a wonderful historic downtown to now the premiere sports entertainment district in the region.” Glendale Convention & Visitors Bureau visitglendale.com
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NONPROFIT
THE BUSINESS OF MAKING A DIFFERENCE
Measuring Nonprofit Impact and Performance
Executive board members can guide their nonprofit organizations in measuring and evaluating philanthropic return on investment by Curt Miner
To see what Valley businesses are doing to support nonprofits in our community, visit “Philanthropy” at inbusinessmag.com.
AS CORPORATE SOCIAL responsibility initiatives and social entrepreneurship have continued to grow in popularity — along with high-impact giving (giving aimed at making a social change in the world) — philanthropy has seen a worldwide upswing. With this increase in billions of dollars of philanthropic support has also come pressure on the nonprofit to measure the impact of its work. Donors, granting institutions and federal agencies want assurance that their gifts will, indeed, yield tangible results. They want to know what, exactly, their money is contributing to. Measuring Impact
Despite this demand, the nonprofit struggles with how to measure its impact with the constituents it serves. It is, after all, a very different animal from the for-profit with its cut-and-dried measurement system focused on profit and shareholder wealth. “Did we make money?” isn’t the only consideration for the nonprofit, which must contemplate various questions in assessing its performance and its return on investment to shareholders. “If your nonprofit can answer the question, ‘How will things be different for those we serve if we are successful?’ that, then, naturally
leads to a discussion of, ‘How can we measure our impact using this definition of success?’” says Wayne Parker, Ph.D., an outcome evaluation specialist. This type of evaluation is known as a philanthropic return on investment. Consider, for example, a nonprofit focused on afterschool programming with the goal of increasing school success. How does the nonprofit hope to change the lives of students? That depends largely on how the organization defines school success. Is it based on better grades, fewer drop-outs, more graduates or positive feedback from teachers? The organization’s answers to those questions will dictate the measurement tools needed to track success. Parker believes executives sitting on nonprofit boards bring specific knowledge and insight to these types of evaluation and performance discussions. “Corporate folks have a background in looking at numbers that monitor performance,” says Parker. “They can bring to the nonprofit a culture of data, where decisions are made based on fact rather than impressions, hopes and wishes.” That’s not to say, warns Parker, that data analysis must be complex. He believes nonprofits should focus on as few measures as possible — those that are most closely associated
In Business Magazine has partnered with The Phoenix Philanthropy Group to bring readers and online users a column in each issue dedicated to informing and inspiring nonprofit leaders and local businesspeople on leadership and best practices for the nonprofit sector.
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“If your nonprofit can answer the question, ‘How will things be different for those we serve if we are successful?’ that, then, naturally leads to a discussion of, ‘How can we measure our impact using this definition of success?’” —Wayne Parker, Ph.D.
with the organization’s definition of success. “You don’t have to conduct elaborate research studies. In fact, the nonprofit can gather far too much data. What is needed is something easy to collect, easy to maintain, and something that doesn’t interfere with the nonprofit’s main job.” Sometimes that data is already being gathered by others and readily available. In the case of afterschool programs, the nonprofit could compare disciplinary reports (required by all schools), looking at the frequency of disciplinary problems for program participants the year before the nonprofit’s afterschool program started and for the first year of enrollment. In other instances, comparison impact numbers exist by which nonprofits can gauge their own performance against other, similarly focused organizations. For example, federal studies often highlight performance in fields such as health and human services, homeless endeavors and domestic issues. It’s important to note that measurement tools need not be expensive. The federal Substance Abuse and Mental Health Services Administration, for example, provides tools for measuring drug abuse and delinquency. Other government agencies have similar and reliable public domain/free measurement tools accessible to the nonprofit. And for organizations unfamiliar with data collection and evaluation, a well-trained evaluator can also identify relatively simple tools and measurements that have proven reliability and validity. What’s key during any evaluation of impact and performance, stresses Parker, is focusing on solving the community problem. “If board members, when drawing up grant or donor proposals, can answer certain questions, they increase their likelihood of being funded.” The most critical questions to understand are: ■■ What is the problem we’re trying to solve? ■■ What are we trying to do to address the problem? ■■ Will our intervention produce the change we seek? ■■ Why should our organization be funded rather than another? ■■ How will we know when we’re successful?
“The theory of change is based on finding the most effective way to produce the desired change.” Part of what the board can do, says Parker, is question the logic of the theory of change within the nonprofit.
According to Parker, responses to these questions lead to a theory of change, an explanation of how the activities of the nonprofit will change the lives of constituents in a particular way. In the case of a nonprofit concerned with severe unemployment in 19- to 21-year-olds, for example, the nonprofit may look at the problem as, “These kids are beaten down” and conclude, “We must focus on programs related to self-image and self-esteem.” But there may be other solutions possible, says Parker. The organization might also consider addressing the problem with vocational skills training or interpersonal skills development.
The Phoenix Philanthropy Group phoenixphilanthropy.com
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Measuring Performance
Executive board members can also guide nonprofits in choosing the appropriate Key Performance Indicators (KPIs) to evaluate performance success. KPIs, while not always driven by dollars-and-cents measurements, should be selected based on the nonprofit’s goals and priorities. Key KPIs for nonprofit consideration include an understanding of the organization’s: Constituents — Know the people whom the organization serves and also understand how it is performing in support of their needs. True market — Understand the organization’s performance in the market it serves and how it compares with organizations providing similar services. Employees and their performance — Understand, at the employee level, in what ways they are impacting the organization’s constituents. Nonprofit KPIs should also measure: Operational performance — Know what the organization is set up to do so that it is effectively providing services with the greatest impact to its constituents. Social sustainability performance — Be able to triple focus: on optimizing financial return, social impact, and social and environmental sustainability. The “triple bottom line” is the best measure of an organization’s success. In the end, the importance of evaluating the performance of the nonprofit comes down to one thing: sustainability. Organizations that can measure their success and prove a need for continued support will increase their social impact because they will be successful in securing more funding.
Curt Miner is a senior consultant with The Phoenix Philanthropy Group, an Arizona-based international consulting firm serving nonprofit organizations as well as institutional and individual philanthropists. Phoenix Philanthropy often partners with Wayne Parker, Ph.D., on performance evaluation and impact matters for its nonprofit clients. A trained psychologist, Dr. Parker spent 14 years as the director of research and evaluation at the Virginia G. Piper Charitable Trust.
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LEADERSHIP
A PATH TO FOLLOW
Leading through Inspiration Inspiring Employees into Action by Mitchell Levy INSPIRATION AND MOTIVATION are two completely different concepts, but a majority of managers still make the mistake of interchanging the two. It’s easy to get lost in the semantics, but the difference can be boiled down to one simple observation: motivation can be manufactured, inspiration needs to be instilled. Money, job security and career advancement are all effective means of motivation, but they’re also solutions that can be delivered on a piece of paper. Salaries can be increased, contracts can be lengthened and staff can be promoted. Inspiration, however, is a much more organic concept. Inspired employees are not only more engaged, but are more empowered and more productive than their uninspired counterparts. They are more inclined to strive for excellence, most notably because they equate the triumphs of their organization to their own personal success. In other words, employees can be motivated because they are inspired. Leadership expert and author Simon Sinek has long been known for his theories on how inspiration correlates to proper leadership. His mantra is simple: “People don’t buy what we do, but why we do it.” It’s a strange, if not counterintuitive, assertion, but it’s also an assertion grounded in truth. A customer will buy a product not simply because of what it does but because he believes in what it does. The most recognizable brands in the world aren’t successful simply because of their products but because of our belief in those products. Sinek meant his words in the context of customers, but it’s easy to see how his insight can be translated in the context of leadership. When a leader nurtures a working environment that is motivated by inspiration, he fosters a team that isn’t afraid to act. Inspired employees take the
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initiative to make great work not because their jobs depend on it but because they believe in the importance of what they do. This, in turn, is a far more effective tool than any raise or job promotion. Inspiring through Purpose and Power
Inspiration is the direct result of instilling power and purpose into one’s employees. One can’t be done without the other. Purpose is the rationale behind one’s work, but it goes far beyond salary and formal job titles. It is the whats and whys of an organization. Why is what one does so important? Why is it important that one excel at one’s job? Power, on the other hand, is not a characteristic of authority but a characteristic of ability. For individuals to be inspired, they need to know they have the power to act on their purpose. They need to feel their decisions and their actions have impact on the organization. It’s through the combination of both purpose and power that an employee becomes truly inspired. It is leadership without micromanagement; an organization fueled by initiative. When purpose and power come together, employees realize they have the reason and the ability to excel at their job. They are motivated to decide, act and take initiative, not because they have to but because they want to. THiNKaha thinkaha.com
Mitchell Levy, CEO and Thought Leader Architect at THiNKaha, works with companies who are active in social media to leverage their IP and unlock the expertise of the employee base to drive more business. He has created and operated 15 firms and partnerships since 1997 and is the author of 18 business books, including the recently released #Creating Thought Leaders tweet (mitchelllevy.com).
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MANAGEMENT
DECISIONS THAT MATTER
Employee Cynicism: The ‘In’ Attitude that Hurts Business Fight snark; building trust is strategically important by Rich Karlgaard IN AN AGE of cynicism and irony, Northwestern Mutual is a throwback to a more innocent time. The company is the antithesis of “cool.” It has the kind of culture in which people embrace plain suits and sincere handshakes, take pride in wearing achievement ribbons, kick off conferences with patriotic music. It’s the very portrait of wholesomeness and earnestness — the Boy Scout of the insurance and financial services industry. There’s no place for hipster lingo, inside jokes about customers, snarky tweets. Oh, and Northwestern Mutual has been in business for more than 157 years and is worth $25 billion in sales. It might not be hip to be square, but it’s very good for business. Mocking irony, snark and cynicism are very much in vogue, but they are also toxic to your company’s culture. The defense mechanism of people who feel unsafe and powerless, cynicism is an expression of the uncertainty that comes from working in an environment where ethics are lax, employees don’t feel valued, and information is withheld. When it thrives in an organization, it signals a lack of employee trust. Once cynicism gets a foothold in your culture, it spreads — just like an ill-advised tweet or blog post. You need to proactively fight it. The example of Northwestern Mutual makes it clear: Building trust is not just a nice thing to do; it’s a strategic thing to do. Trust underlies effective working relationships. It improves group effectiveness and performance. It underpins organizational credibility and resilience. All of these factors contribute to creating a sustainable competitive advantage, because trust attracts talent, strengthens partnerships and retains customers. The good news is, you can tap into the strategic power of trust by consciously shifting your company’s culture.
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Know that trust has two dimensions: external and internal. First, there’s the external trust between an organization and its customers: Will a company stand behind its products? If something goes wrong, will the company do the right thing? The second dimension is the internal trust between employees, managers and top-level management. Do leaders keep their promises? Can employees speak up without censure? Do people have each other’s back (or stab them in it)? Generally, what’s true externally is also true internally. When employees can trust leaders and each other, customers can trust employees. And vice versa, of course. Cynicism cannot be eradicated if trust doesn’t extend in all directions. But know that you need to start internally, with the employees on whose commitment and engagement your success depends. If they don’t feel they can trust your company with their careers, you’re in trouble. Get clear on what a culture of trust and earnestness looks like. No doubt your employees have (probably very strong) opinions on trust within your company and where they’d like to see improvements. Hold a company-wide summit where everyone can share those opinions and include an
anonymous component like a suggestion box or survey. Get everyone’s input, from the C-suite to the custodian. Your goal should be to pin down exactly how a culture of trust translates to leader and employee behaviors. Ask, “Who do we want to be?” Identify the ways cynicism manifests — for instance, through snarky comments, manipulating customers, talking behind co-workers’ backs and so forth. Then, together, establish some ground rules aimed at dissolving cynicism and promoting old-fashioned values. Then, get the “rules” in writing. Put the results of your trust summit in writing and ask all employees to sign this document. It should spell out actions like, “I will not badmouth customers” or “If I have something to say to an employee, I’ll say it to their face.” Some companies have even gone so far as to prohibit blind cc’ing in order to promote a culture of trust. Of course, you can’t simply outlaw cynicism and snark or talking behind someone’s back. Trust can thrive only when employees are treated like the self-respecting adults they are. However, you can “formalize” values and ask people to abide by them. That’s the need these contracts serve. INBUSINE SSMAG.COM
Plus, people are just more likely to abide by an agreement if they’ve signed their name to it. Let only “Boy Scouts” lead. (And Girl Scouts too, of course!) People will emulate leader behavior, whether it’s good or bad. It’s just human nature. Leaders who roll their eyes when a certain customer calls are giving permission for employees to be similarly disrespectful. Complain about your boss in the break room and you can expect to overhear your own team making fun of you as you approach the water cooler. The key is to hire and promote leaders who truly do live the values your company espouses. It doesn’t matter how intelligent, charming or technically capable leaders are if they don’t uphold the agreed-upon values. The negative impact they have on your culture will more than offset any talents and skills they bring to the table. Never lie or hide the truth. There are many things you’re thrilled to share with your employees. “Our customer satisfaction scores are 15 percent higher this year!” Or, “Our first quarter profits exceeded our goal!” Yet there are other things you might not be so eager to share, like, “We’re going to have to downsize,” or, “There aren’t going to be any raises this year…and by the way, we may have to reduce your benefits.” Tell them anyway. Even when the news is bad, people should never feel they’re being kept in the dark. Transparency and trust must coexist. Show employees that you care. When people don’t believe their leaders care about them, not just as workers but as human beings, of course trust can’t thrive. And while it’s true that fake or contrived caring only increases cynicism, genuine caring dissolves it. This means leaders must be “people persons” who stand up for their employees’ best interests and don’t mind showing (appropriate) affection. NetApp is a company that truly gets this. Consider the following quote from its vice chairman, excerpted from my book The Soft Edge: “I believe in leadership rather than management,” Tom Mendoza of NetApp explained. “You can be loud, you can be quiet; but leadership is what you are, not what you say. So my overriding principle of leadership is people don’t care what you know unless they know that you care. All industries have one thing in common, which is people come through for their leaders not because they’re afraid, not because they’re intimidated, but because they just don’t want to let them down.” INBUSINE SSMAG.COM
Aspire to predictability. It sounds a little dull, doesn’t it? Most of us want to be known as creative, outside-the-box thinkers. We don’t want to be bound by routine or limited by “the way everyone else does it.” And that’s fine — embrace innovation to your heart’s content in areas like product development and marketing campaigns. Just don’t be unpredictable in your behavior, priorities and values. As a leader, your team should have total confidence that you’ll do what you say you will. They should have no doubt that you’ll keep your promises, act with integrity and look out for their best interests. By the way, predictability in the matter of trust is different from predictability in tactics. Good leaders and coaches will shake things up.
innovating, taking calculated risks — reward them. A simple thank-you can go a long way. So can public recognition at a meeting or through a company-wide email. And, of course, perks like “free” vacation time or bonuses are always welcome. The point is, notice and celebrate the behaviors you want more of. When people are truly engaged, they can’t be cynical. Engagement and cynicism can’t coexist in the same moment. Constantly drive home the “meaning” of the work people do. One of the best methods to increase trust is to identify your greater purpose, your “true north.” Why do you exist? What meaningful value do you offer to employees, customers or society? A great purpose should be aspirational, not merely
One of the best methods to increase trust is to identify your greater purpose, your “true north.”
Legendary basketball coach Phil Jackson once held a Chicago Bulls practice in the dark. He wanted to see how well his players really knew the plays he was teaching! Make it safe to speak up. When your employees make an honest mistake, can they admit it without being scolded and belittled? What about input and ideas? Can they share those things and expect to be taken seriously? Either trust rules your organization, or fear rules it — you have to choose. A fear-based culture kills employee curiosity. It quells exploration, dulls creativity and stunts growth. In a climate of fear, people are afraid to make mistakes. Fear saps performance, synergy, teamwork and morale. It makes people feel powerless — and if you have no power over your own work life, of course you’ll be cynical. Celebrate grit and gumption. If you want employees to be worker bees — performing the tasks you designate, on a timeline you set — compensate them with paychecks only. But if you want your employees to be partners, you’ve got to reinforce them when they act like partners. In other words, take notice when they display passion and motivation (grit) and initiative and guts (gumption). When employees do the things you want them to do — persevering through tough tasks,
financial. It should create a common cause and promote a collective effort. It should answer all the tough questions of why: Why commit? Why persist? And, most important, why trust? Figure out what meaningful things your company provides customers, whether that’s peace of mind, easier lives, reliable support or something else, and look for ways to convey that purpose at your company. It’s hard to be cynical about your work and your customers when you actually do believe in what you’re doing. While employees will certainly appreciate “fun” perks like an in-house masseuse and free fresh-baked cookies, they don’t mean anything if your culture isn’t grounded in trust. Trust is, and always will be, the foundation of creating an award-winning environment and culture that leads to high performance and success. Rich Karlgaard (www.richkarlgaard.com) is author of The Soft Edge: Where Great Companies Find Lasting Success. He is also the publisher of Forbes magazine, where he writes a column, “Innovation Rules”, known for its witty assessment of business and leadership issues. Karlgaard is also a serial entrepreneur, having co-founded Upside magazine; Garage Technology Partners; and Silicon Valley’s premier public business forum, the 7,500-member Churchill Club. He is a past winner of Ernst & Young’s “Entrepreneur of the Year” award.
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WE VALUE WHAT WE OWN
by Mike Hunter
2015 Mustang GT AFTER 50 YEARS of Ford developing and redeveloping the Mustang, Ford announces the 2015 Mustang GT. Tradition and technology come together in this latest edition and body style. Boasting the power and performance that is expected after five decades of research, wear and tear makes this a truly special edition. The GT engine is a 5.0-liter Ti-VCT V8 engine. Known for its low roar and incredibly noticeable acceleration, this newest model is more powerful, with 435 horsepower and 400 lb.-ft. of torque. The more technologically engineered, with larger intake and exhaust valves, new cylinder heads with revised highflow ports and new intake and exhaust camshafts with increased lift, means this vehicle is all about power. A larger radiator, heavy-duty front springs, upsized rear sway bar and an interior gauge pack that includes oil pressure and vacuum are just the beginning. The Brembo® 6-piston front brake calipers come with larger rotors for enhanced reliability. The unique 19-inch by 9-inch front wheels are set off by the rear ones of 19-inch by 9.5-inch for stability and enhanced control. It seems everything on the GT is super-sized to manage the power. The all-new design is more sleek and concise while identifying all of the original lines. The “hippy” rear denotes a strong stance and firm overall street appeal, yet is slimmer and more refined. The lowered decklid, bold grille and light casings are reminiscent of the original design. The rear looks smooth and less complex than reiterations in years past, using tri-bar LED tail lamps with the sequential blink that has become very “Mustang.” The cockpit has been redesigned for ultimate performance alongside the latest technologies. Repositioning the cup holders away from the shifting console, a smaller steering wheel and a lower set seat are all meant to improve the experience of driving a Mustang. Impressive technology updates this machine as well. Intelligent access to the vehicle, a pushbutton start and SYNC® with MyFord Touch® make useful the newest of expectations among drivers. The all-new edition of the Mustang is (again) turning heads and taking this icon into the next half century with accolades and acclaim 2015 Mustang GT Fastback unlike what the brand has seen for years. City MPG . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 Hwy MPG. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26 Transmission. . . . . . . . . . . . . . . 6-speed automatic MSRP. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $36,100
Ford ford.com/cars/mustang
The Lap of Technology TRAVEL, TO AND from home or simply staying connected on the go is why the laptop has quickly become a staple for executives. Convenience and an all-in-one functionality beyond the tablet is on the rise. Here are our picks for the best laptops.
Apple MacBook Pro 15-inch
With an updated Intel processor and speedier Flash Storage, the MacBook Pro 15-inch (2013) makes other “workstation-class performance laptops” pale in comparison. With incredible display, functionality and compatibility with PC applications, along with a nine-hour battery life, this is the must-have laptop. $1999 apple.com/macbook-pro
Dell Latitude E7440 Touch
The rugged Dell Latitude E7440 Touch business ultrabook offers extensive premium features that include good performance, excellent battery life and compatibility with other E-series Latitude Dell laptops. $1949 dell.com
Toshiba Kirabook 13 i7s Touch With a brilliant, bright WQHD screen and premium components, all housed in a chassis that weighs less than three pounds, the Toshiba Kirabook 13 i7s Touch is a top pick ultrabook for business and beyond. $1699 toshibadirect.com
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Photos courtesy of Ford (left), Apple, Dell, Toshiba (right, top to bottom)
ASSETS
INBUSINE SSMAG.COM
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POWER LUNCH
MEALS THAT MATTER
by Mike Hunter
Get Out! NOW IS OUR time. Getting out from between walls and onto patios is what this season is all about. Here are our picks for some of the best patio lunch spots in the metropolitan area.
Chelsea’s Kitchen
Still a staple for anyone interested in dining al fresco, Chelsea’s Kitchen offers tree-covered comfort with delectable American gourmet classics. Selections range from hamburgers and salads to hearty fried chicken and tuna tartare. A true urban get-away. 5040 N. 40th St., Phoenix (602) 957-2555 • chelseaskitchenaz.com
THE LATEST TO hit the scene by German Osio, creator of Central Bistro and Local Bistro, is SumoMaya Mexican-Asian Kitchen located at Scottsdale and Lincoln roads. This spectacular new hot spot is nestled in a contemporary sanctuary where Asian concepts and Latin flare come together to tempt even the most discriminating palate. The lunch menu is an array of dishes that seem to span the world, from guacamoles and ceviches to sushi and wok-inspired favorites. The Thai Steak Salad is made with mixed greens, bean sprouts and mint in a sesame-soy lime dressing that is light and hearty all at once. The Rock Shrimp Tempura is “Golden & Crispy” (a section of the menu), made with spicy mayo, snow peas and summer peas in a black truffle vinaigrette that is reminiscent of an ancient Asian kitchen dish with its fresh flavors and crispy crunch. Trying the Sesame Ginger Chicken Taco will hook any foodie to come back for more. This taco is made with fresh seasoned chicken, guacamole, aji Amarillo and chili coleslaw. Light, fresh and bold flavors are making this a taco-lovers paradise with several other taco combinations that truly demonstrate the success of infusing Asian and Latin flavors. The décor is something to see. The bright, Mexican-inspired colors come together with Asian open and calming attitude, making this a unique and pleasant spot to eat and relax in; it is the culmination of imagination by local star designer Jeff Low. Open atmosphere, grass-lined walls and a patio that create almost a Zen garden appeal bring contemporary Asian/Latin American hip to this dining destination. With many drinks and a robust dinner menu as well, SumoMaya is a place to enjoy at any hour. The lunch service is fast and as comforting as an afternoon visit. Well-prepped waiters and an extremely experienced and talented cooking staff directed by Executive Chef Matt Zdeb — it is no wonder all of these factors can come together from the far reaches of the world right here in Scottsdale.
The House Old Town Brasserie
Set in an original home on tree-lined Main Street in Old Town Scottsdale is a cottage terrace enveloping guests in the feel of an East Coast hide-away hot spot. Light, toned-down menu at lunch is Frenchinspired and includes some creative and very flavorful dishes that will only add to the outdoor atmosphere. 6936 E. Main St., Scottsdale (480) 634-1600 • thehousebrasserie.com
El Chorro
This Valley classic has been revamped in the past few years with a focus on the outdoors. An indigenous garden setting with mountain views that are reminiscent of the Old West when this establishment was originally created is captured over lunchtime. At this true landmark with great American and Southwestern foods, being on one of the many patios here will be a true adventure. 5550 E. Lincoln Dr., Paradise Valley (480) 948-5170 • elchorro.com Chelsea’s Kitchen
SumoMaya Mexican-Asian Kitchen 6560 N. Scottsdale Rd., Scottsdale (480) 397-9520 sumomaya.com
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Photos courtesy of Osio Culinary Group (left), LGO Hospitality (right)
SumoMaya Fuses Latin and Far East Flavors
THE RESOURCE GUIDE TO BUSINESS FINANCING 2014/2015
PRESENTED BY
Major Banks Community Banks Credit Unions Lending Institutions & Resources
s e Y “ ”
FINANCING
“Stearns Bank worked quickly to turn a very complicated, multifaceted subdivision loan into a straightforward - ‘yes’!” - Hudd Hassell & Karl Huish, Bella Victoria, LLC in Mesa with Michael Whalen, Stearns Bank
Stearns Bank has built long-lasting relationships with business owners and developers by getting projects completed in a competitive, creative and responsive way. Fast & flexible loans up to $10 million or more...
A Preferred SBA Lender - We get the job done!
Call 480.314.4200
Business Lending Guide
The Renewed Value of a Banking Relationship The In Business Magazine Lending Guide continues to be a critical tool to assist business with developing strategic relationships between themselves and their banks. Banks have always valued long-term, profitable business banking relationships. So businesses should seek a bank that rewards a relationship approach to doing business with them, and a banker who is able to give them the financial service and advice their business needs to survive and thrive in today’s ever changing economy. In return, they can reward that bank with their business and loyalty. Recently, we have seen a significant evolution in the way that business and banks work together. The economic stress, constrained liquidity and market volatility, along with a regulatory environment that is constantly changing, has forced businesses and banks to return to focusing on what is important to each of them. This is quite different from the recent banking relationship in which the primary focus was on just selling products and services. Today, banks and business owners are focused on developing deeper insights into industry trends and their priorities and understanding their corporate strategies, which then enables them to find solutions to meet each of their needs. Bankers try to reward businesses with strong relationships by extending credit with the most favorable interest rates and terms. These businesses and their bankers understand that developing a meaningful relationship is a two-way process — your banker has a role to play and so does the business. I’m sure that this year’s issue of the Lending Guide will bring important information to assist businesses with finding the value of having such a relationship.
Mike Thorell has been the president and CEO of Pinnacle Bank since 2008. He oversees all functions and strategic initiatives for the bank. Thorell has more than 25 years of community banking experience and currently serves as the chairman of the Arizona Bankers Association. He has also served as chairman of the Boys & Girls Clubs of Greater Scottsdale and the Fiesta Bowl Committee.
Michael J. Thorell Chairman Arizona Bankers Association President and Chief Executive Officer Pinnacle Bank
About our Guide: ANCING SINESS FIN 15 IDE TO BU 2014/20 URCE GU THE RESO PRESENTED
BY
Major Banks ks Community Ban Credit Unions & Resources g Institutions
Lendin
INBUSINE SSMAG.COM
Funding is consistently among the top concerns shared by our readers. As part of our “Financial” issue of In Business Magazine, our editorial staff has compiled this annual Business Lending Guide. This guide is a listing of local lenders, contacts and resources that will assist business owners in finding lending opportunities. We contacted federally and state-chartered banks, credit unions and selected other lenders and resources to provide information about the variety of loans or assistance programs they offer locally. This guide will be available online and through our partner organizations until October 2015. Our list is compiled of institutions based here locally who responded to our questionnaire by press time. Please check the information, as contacts and phone numbers may change throughout the year. Many of the institutions have multiple locations throughout Arizona; this guide lists their main office in the Greater Phoenix area. To participate or advertise in our 2015/2016 guide, please contact us at info@inbusinessmag.com or visit our website at www.inbusinessmag.com. © 2014 InMedia Company, LLC.
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Business Lending Guide
Banks Alerus Bank 17045 N. Scottsdale Rd., Scottsdale, AZ 85255 Contact: Rob Schwister Phone: (480) 905-2407 Website: www.alerusfinancial.com Types of Loans/Services: SBA loans, term loans, lines of credit
Alliance Bank of Arizona 1 E. Washington St., Phoenix, AZ 85004 Contact: Ruza Radulovic Phone: (602) 386-5500 Website: www.alliancebankofarizona.com Types of Loans/Services: corporate banking, commercial real estate lending, public finance, business and professional banking, SBA lending, treasury management services
Arizona Bank & Trust 2036 E. Camelback Rd., Phoenix, AZ 85016 Contact: Troy Norris Phone: (480) 844-4558 Website: www.arizbank.com
Types of Loans/Services: commercial loans, including lines of credit, equipment, real estate, construction
Website: www.bankofamerica.com Types of Loans/Services: lines of credit, term loans, SBA lending
Arizona Business Bank
Bank of Arizona, NA
2600 N. Central Ave., Ste. 2000, Phoenix, AZ 85004 Contact: Toby Day Phone: (602) 240-2700 Website: www.azbizbank.com Types of Loans/Services: revolving lines of credit, term loans, letters of credit, real estate, SBA loans
16767 N. Perimeter Dr., Scottsdale, AZ 85260 Contact: Business Banking Department Phone: (602) 808-5331 Website: www.bankofarizona.com Types of Loans/Services: revolving lines of credit, real estate lines of credit, equipment or vehicle term loans, real estate term loans, construction financing, equipment leasing, SBA loans
Bank 1440 7010 E. Chauncey Ln., Ste. 120, Phoenix, AZ 85054 Contact: Darcie Storms Phone: (623) 334-6200 Website: www.bank1440.com Types of Loans/Services: commercial term mortgages, business loans, SBA loans
Bank of America, NA 201 E. Washington St., Phoenix, AZ 85004 Contact: Small Business Banking Phone: (888) 287-4637
BBVA Compass Bank 4010 E. Thomas Rd., Phoenix, AZ 85018 Contact: Romeo Zavala Phone: (602) 522-2580 Website: www.bbvacompass.com Types of Loans/Services: SBA loans, lines of credit, commercial real estate lending, working capital financing, residential construction, energy lending, business leasing, business credit cards
»
Are You Financially Prepared to Start a Business? It’s well known that the risks of entrepreneurism can be significant. We’re familiar with the stories of individuals who put everything they had into starting a business, only to see it fail a short time after. However, with this risk comes a potentially outsized reward. If you are thinking about venturing out on your own, how do you know if you’re truly prepared? To start, ask yourself these questions: How do I plan to fund start-up costs? Examine your current sources of liquidity. Do you have sufficient liquid assets outside of retirement accounts? Do you have access to business credit? Are you planning on using home equity to fund the start-up costs? Are you considering withdrawing funds from retirement accounts — and are you aware of the tax implications of doing so? Be realistic and make sure you have the necessary funding sources finalized prior to launch.
What am I prepared to sacrifice in a worst-case scenario? You should have a firm understanding of what will happen to your personal assets in a worst-case scenario. Have you personally guaranteed loans to the business? Did you use your home equity? Have you taken appropriate measures to separate your personal assets from business assets? The hard reality is, most small businesses fail. If you are uncomfortable with that risk, entrepreneurism may not be for you.
How long do I anticipate before the business replaces my current income? Be as realistic as possible when forecasting the time it takes for the business to generate sufficient income. Ideally, you should have sufficient liquidity to operate the business and replace your lost income for longer than you anticipate.
Which of my assets may be protected in the event of a business failure? Depending on the state, certain assets — such as IRAs, cash values in life insurance and annuities, and a certain amount of home equity — may be protected from creditors. If possible, it’s best to avoid using these assets to fund the business.
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While there is no magic wand to ensure success, there are financial steps you can take to give yourself the best chance of profitability and to protect your assets in the event of a failure. As with all financial matters, preparation and forethought are key. —Jason Miller, director of financial planning at BMO Private Bank. BMO Private Bank is a brand name used in the United States by BMO Harris Bank N.A. Member FDIC. Not all products and services are available in every state and/or location.
INBUSINE SSMAG.COM
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Put your business on the road to sweet success
4C
Apply for a Wells Fargo Equipment Express® loan today Growing your business is how you’ll achieve the dreams you have for yourself and your family. Wells Fargo is here to help. Our Equipment Express loan is a flexible way to purchase the new or used vehicles or equipment you need to move your business forward. Stop by or call and speak to your banker today. Finance cars, trucks, trailers, commercial vehicles, or other business equipment
© 2014 Wells Fargo Bank, N.A. All rights reserved. Member FDIC. (1211586_13013)
Scottsdale Branch 5635 N. Scottsdale Rd., Suite 150 Scottsdale, AZ 85250 480.429.6750 HEADQUARTERS
2440 North Litchfield Rd.
Goodyear, AZ 85352
623.536.WVNB (9862)
Some things are just better locally; for example: Seafood at a beach restaurant. A visit with yout in-laws. A loan from West Valley National Bank. Just ask Eric Orsborn, President of OCM.
No one can help your business grow faster! INBUSINE SSMAG.COM
Buckeye Branch 111 E. Monroe, Ave. Buckeye, AZ 85326 623.535.2460
www.westvalleynationalbank.com WVNB® is a Member of FDIC and an Equal Housing Lender.
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Business Lending Guide
BANKS (CON’T.)
Biltmore Bank of Arizona
First Fidelity Bank
JPMorgan Chase
5055 N. 32nd St., Phoenix, AZ 85018 Contact: Richard Endicott Phone: (602) 992-5055 Website: www.biltmorebankaz.com Types of Loans/Services: commercial lines, SBA, USDA, solar, SFR pools, Arizona Commerce Authority, industrial, treasury management products
6232 N. 32nd St., Phoenix, AZ 85018 Phone: (602) 912-5555 Website: www.ffb.com Types of Loans/Services: revolving lines of credit, commercial real estate, residential real estate, equipment, SBA, oil and gas production loans, commercial leasing
201 N. Central Ave., Phoenix, AZ 85004 Contact: SBA Lending Department Phone: (888) 536-3722 Website: www.chase.com Types of Loans/Services: commercial lending, SBA lending
BMO Harris Bank
First International Bank & Trust
One E. Camelback Rd., Phoenix AZ 85012 Contact: Don Satiroff Phone: (602) 650-3850 Website: bmoharris.com Types of Loans/Services: business and corporate lending, lines of credit, equipment leasing, asset-based lending, commercial real estate, SBA & community development loans, treasury management services
2231 E. Camelback Rd., Phoenix, AZ 85016 Contact: Craig Ealy Phone: (480) 946-2967 Website: www.firstintlbank.com Types of Loans/Services: agriculture, business, SBA
3131 E. Camelback Rd., Ste. 100, Phoenix, AZ 85016 Phone: (602) 381-2100 Website: www.johnsonbank.com Types of Loans/Services: lines of credit, commercial mortgages, equipment leasing, SBA loans
First Scottsdale Bank
KS StateBank
15190 N. Hayden Rd., Scottsdale, AZ 85260 Contact: Ben Danner Phone: (480) 998-8408 Website: www.fnbscottsdale.com Types of Loans/Services: commercial lending, SBA
3877 N. 7th St., Ste. 150, Phoenix, AZ 85014 Contact: Frank Coumides Phone: (602) 332-7828 Website: www.ksstatebank.com Types of Loans/Services: commercial loans to small and mid-size businesses for equipment, real estate and expansion
BNC National Bank 20175 N. 67 Ave., Glendale, AZ 85308 Contact: Scott Spillman Phone: (602) 508-3760 Website: www.bncbank.com Types of Loans/Services: revolving lines of credit for short-term operating needs, working capital loans, term loans for business equipment, commercial real estate loans, SBA loans, 504 commercial real estate loans, business agricultural loans, letters of credit
Comerica Bank
FirstBank 2525 E. Camelback Rd., Ste. 115, Phoenix, AZ 85016 Contact: Humphrey Shin Phone: (602) 667-6900 Website: www.efirstbank.com Types of Loans/Services: commercial real estate, construction, SBA loans, lines of credit, residential real estate
425 S. Mill Ave., Tempe, AZ 85282 Contact: Bob Willcoxson Phone: (480) 966-0846 Website: www.comerica.com Types of Loans/Services: commercial property loans, business lines of credit, business loans, credit cards
Gateway Bank
Commerce Bank of Arizona
Goldwater Bank
4110 N. Scottsdale Rd., Ste. 120, Scottsdale, AZ 85251 Contact: Larry O’Malley Phone: (480) 253-4504 Website: www.commercebankaz.com Types of Loans/Services: business-related loans of all types
Enterprise Bank 3900 E. Camelback Rd., Ste. 180, Phoenix, AZ 85018 Contact: Zach Morrison Phone: (602) 824-5700 Website: www.enterprisebank.com Types of Loans/Services: commercial loans, equipment, real estate, construction, SBA loans, lines of credit
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6860 E. Warner Rd., Mesa, AZ 85212 Contact: James L. Christensen Phone: (480) 358-1000 Website: www.gcbaz.com Types of Loans/Services: commercial lending
7135 E. Camelback Rd., Ste. 201, Scottsdale, AZ 85251 Contact: Robert Simpson Phone: (480) 281-8232 Website: www.goldwaterbank.com Types of Loans/Services: business lending, mortgage lending, consumer lending
Great Western Bank 1721 N. Arizona Ave., Ste. 1, Chandler, AZ 85225 Contact: David Telya Phone: (480) 917-0139 Website: www.greatwesternbank.com Types of Loans/Services: commercial and consumer loans
Johnson Bank
Meridian Bank, NA 2700 N. Central Ave., Ste. 110, Phoenix, AZ 85004 Contact: Erik Frandsen Phone: (602) 274-7500 Website: www.meridianbank.com Types of Loans/Services: term/installment loans, business line of credit, SBA loans, commercial loans
Metro Phoenix Bank 4686 E. Van Buren St., Ste. 150, Phoenix, AZ 85008 Contact: Michael Morano Phone: (602) 346-1800 Website: www.metrophoenixbank.com Types of Loans/Services: commercial lending
MidFirst Bank 3030 E. Camelback Rd., Phoenix, AZ 85016 Contact: Barb Bandura Phone: (602) 801-5000 Website: www.midfirst.com Types of Loans/Services: SBA loans, business express loans, business lines of credit, business term loans, commercial real estate lending, business equipment lease financing The 2014/2015 edition of the In Business Magazine Business Owner’s Lending Guide will be available on our website until October 2015.
INBUSINE SSMAG.COM
»
Business Lending Guide
BANKS (CON’T.)
Mutual of Omaha Bank
Pinnacle Bank
TCF Bank
9200 E. Pima Center Pkwy., Scottsdale, AZ 85258 Contact: Kevin Halloran Phone: (480) 458-2249 Website: www.mutualofomahabank.com Types of Loans/Services: commercial and industrial, commercial real estate, SBA, mortgage, personal and association lending
14287 N. 87th St., Ste. 123, Scottsdale, AZ 85260 Contact: Tim Romano and Scott Willits Phone: (480) 609-0055 Website: www.pinnaclebankaz.com Types of Loans/Services: lines of credit, equipment loans, term loans, real estate construction loans, standby letters of credit, SBA loans
11 S. McClintock Dr., Tempe, AZ 85281 Contact: Consumer Loans Department Phone: (800) 823-5363 Website: www.tcfbank.com Types of Loans/Services: working capital lines of credit, term loans, commercial real estate loans, leasing, business credit cards
National Bank of Arizona
RepublicBankAz
6001 N. 24th St., Phoenix, AZ 85016 Contact: Mike Casa Phone: (602) 235-6000 Website: www.nbarizona.com Types of Loans/Services: consumer, residential real estate, commercial, corporate, treasury management, commercial real estate, wealth management, nonprofit, energy lending
909 E. Missouri Ave., Phoenix, AZ 85014 Contact: Jeff Crabb Phone: (602) 277-2500 Website: www.republicbankaz.com Types of Loans/Services: commercial loans and lines of credit, commercial real estate loans, commercial construction loans, SBA loans
2222 E. Camelback Rd., Phoenix, AZ 85016 Contact: SBA Division Administrative Office Phone: (800) 431-7101 Website: www.usbank.com Types of Loans/Services: SBA loans, lines of credit, equipment leasing, term loans, agricultural loans, quick credit, commercial real estate
Parkway Bank 11011 N. Tatum Blvd., Phoenix, AZ 85028 Contact: Frank Sutter Phone: (602) 765-8501 Website: www.parkwaybank.com Types of Loans/Services: an array of conventional business loans as well as SBA financing
Stearns Bank N.A., Arizona 9225 E. Shea Blvd., Scottsdale, AZ 85260 Contact: John Mistler Phone: (480) 314-4200 Website: www.stearnsbank.com Types of Loans/Services: SBA loans, commercial and construction lending, equipment finance and leasing, USDA rural development loans
U.S. Bank SBA Division Regional Office
Washington Federal 2196 E. Camelback Rd., Ste. 100, Phoenix, AZ 85016 Contact: Scott Stemm Phone: (602) 553-7434 Website: www.washingtonfederal.com Types of Loans/Services: commercial lending, commercial real estate financing, lines of credit, term loans, business credit cards, SBA loans
»
What it Takes to Get a Bank Loan Approved In the banker’s world, among the most important considerations reviewed when determining whether or not to approve a loan are the “Five C’s of Credit.”
Capacity
Capital
The best predictor of a business’s likelihood of repaying a loan as planned is a proven history of positive cash flows. This cash flow history needs to be adequate to make loan payments on the new loan request, plus a little more. Banks typically desire a debt service coverage ratio of at least 1.25 times the debt service.
Although a business starts with a vision in a person’s mind, businesses rarely make it to the next stage without sufficient capital to help make this vision a reality. Capital is defined as the amount of dollars invested combined with prior earnings retained by a business. The most common reason loans are turned down by banks is, a business does not have sufficient capital to support either existing or future business operations.
Collateral In the event that future cash flows are not sufficient to make scheduled loan payments, banks normally want some other business asset or assets to serve as a back-up repayment source to satisfy loan payment obligations. Collateral can take many forms, but often will include accounts receivable, inventory, real estate and equipment, as well as other tangible assets.
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Conditions Many internal as well as external conditions have an impact on a business. Although a business owner may have little or no control over these conditions, it is critical that the business owner be aware of them. Internal conditions include staffing, management, operational issues and more, while external conditions may include governmental regulations, business climate and competition.
Character A good reputation as a business and as a person is one of a businessperson’s most important assets. For banks, a key indicator is how the person handled previous business and personal extensions of credit. Bankers care about how business is conducted and how individuals conduct themselves. —Bill Aust, senior vice president of The Biltmore Bank of Arizona, a division of Grandpoint Bank. Aust, a commercial lender and CPA with more than 35 years of experience, specializes in client management for Arizona’s small and middle market businesses.
INBUSINE SSMAG.COM
Helping Small Business Grow • Projects from $200,000 to $15,000,000 Owner Occupied Real Estate Purchase, Expansion, or Ground Up Construction Large Capital Equipment Purchase and Installation • As Little As 10% Down • Low, Fixed Interest Rate for 20 Years • Work with Local Decision Makers • Expand your business with the SBA Real Estate Advantage 504 Loan (REAL 504) Program Southwestern Business Financing Corporation is an Arizona Certified Development Company providing SBA 504 financing to Arizona’s Small Business Community since 1988.
For more information, contact the SBA Loan Professionals™
Celebrating our
1000th SBA Commercial Real Estate Loan
Where to go when the banks say ‘NO!’ 3 Angel/Venture Capital 3 Merchant Funding 3 Factoring
3 Private Equity
3 Equipment Leasing
3 Contract Financing
To Discuss Your Financial Needs, Call Today 1820 East Ray Road Chandler, AZ 85225 602.773.1488 520.762.7535 Altima@AltimaBusinessSolutions.com INBUSINE SSMAG.COM
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Business Lending Guide
BANKS (CON’T.)
Wells Fargo Bank 100 W. Washington St., Phoenix, AZ 85003 Contact: Jennifer Anderson Phone: (602) 378- 5133 Website: www.wellsfargo.com/biz Types of Loans/Services: business loans of all types, including real estate, lines of credit, equipment and SBA
West Valley National Bank 5635 N. Scottsdale Rd., Suite 150, Scottsdale, AZ 85250 Contact: Debra Ingle Phone: (480) 429-6750 Website: www.wvnb.net Types of Loans/Services: SBA 7(A), SBA 504, working capital, owner-occupied real estate, A/R lines of credit
Western State Bank 7001 N. Scottsdale Rd., Ste. 1000, Scottsdale, AZ 85253 Contact: Shane Randall Phone: (480) 596-0883 Website: www.westernbanks.com Types of Loans/Services: commercial term loans, commercial lines of credit, construction lines of credit, lease financing, corporate credit cards, agricultural loans
Credit Unions Arizona Central Credit Union
Desert Schools Federal Credit Union
Southwestern Business Financing Corporation
148 N. 48th St., Phoenix, AZ 85034 Contact: Herb Ramirez Phone: (602) 663-8674 Website: www.desertschools.org Types of Loans/Services: working capital financing, equipment loans, owneroccupied real estate, commercial real estate
3200 N. Central Ave., Ste. 1550, Phoenix, AZ 85012 Contact: Teresa Maldelin Phone: (602) 495-2185 Website: www.swbfc.com Types of Loans/Services: SBA 504 financing
TruWest Credit Union
ACCIÓN
1345 W. Warner Rd., Tempe, AZ 85284 Contact: Daniel Desmond Phone: (480) 441-5900 Website: www.truwest.org Types of Loans/Services: business loans, secured and unsecured lines of credit, business credit cards, commercial real estate lending, equipment financing
Alternative Lending Altima Business Solutions 1820 E. Ray Rd., Chandler, AZ 85225 Contact: Andre Wilson Phone: (602) 773-1488 Website: www.altimabusinesssolutions.com Types of Loans/Services: angel/venture capital, private equity, merchant funding, equipment leasing, factoring, contract financing
FSW Funding
2020 N. Central Ave., Ste. 800, Phoenix, AZ 85004 Contact: Jeffrey Frank Phone: (602) 523-8342 Website: www.azcentralcu.org Types of Loans/Services: SBA loans, commercial real estate loans, lines of credit, term loans
4530 E. Shea Blvd., Ste. 142, Phoenix, AZ 85028 Contact: Robyn Barrett Phone: (602) 535-5984 ext. 1 Website: www.fswfunding.com Types of Loans/Services: choose or add lines of credit, letters of credit, factoring, asset-based lending
Arizona State Credit Union
Liquid Capital
2355 W. Pinnacle Peak Rd., Phoenix, AZ 85027 Contact: Pat Blaine Phone: (602) 467-4262 Website: www.azstcu.org Types of Loans/Services: term loans, unsecured lines of credit, commercial real estate mortgages, business vehicle loans, business credit cards, business overdrafts
8679 E. San Alberto Dr., Ste. 201, Scottsdale, AZ 85262 Contact: Joel Gottesman Phone: (480) 473-2105 Website: www.az.liquidcapitalcorp.com Types of Loans/Services: factoring, purchase order and inventory finance, exports and Quick Pay programs
Credit Union West
4040 E. Camelback Rd., Ste. 210, Phoenix, AZ 85018 Contact: Greg Sir Phone: (602) 954-6677 Website: www.sirmortgage.com Types of Loans/Services: residential, commercial and construction loans
2402 W. Grant St., Phoenix, AZ 85009 Contact: Business Service Center Phone: (602) 631-3200 Website: www.cuwest.org Types of Loans/Services: business loans
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Sir Mortgage & Finance
Lending Resources P.O. Box 41237, Tucson, AZ 85717 Phone: (520) 682-3648 Website: www.accionaz.org Types of Services: loans, lines of credit, management services, investment, governance
Arizona Commerce Authority 333 N. Central Ave., Ste. 1900, Phoenix, AZ 85004 Phone: (602) 845-1200 Email: smallbiz@azcommerce.com Website: www.azcommerce.com Types of Services: business-growing strategies, market research, licensing information, statewide resource information, workforce assistance
Arizona Loans for Assistive Technology Institute for Human Development University Affiliated Program Northern Arizona University 2400 N. Central Ave., Ste. 300, Phoenix, AZ 85004 Phone: (602) 776-4670 Website: www.azlat.org Types of Services: loans for persons with disabilities to purchase assistive technology, training and technical assistance; equipment reutilization; Self Employment for Entrepreneurs with Disabilities program
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INDEX Index by Name
DuVal, Fred, 64
Karlgaard, Rich, 44
Owens, Bill, 22
Arntzen, Charles, 18
Ennen, Diana, 29
Kimble, Terri, 35
Panchanathan, Sethuraman, 18
Aust, Bill, 56
Fowles, Sarah L., 30
Koerber-Walker, Joan, 18
Parker, Wayne, Ph.D., 40
Berg, David, M.D., 30
Goldstein, Steve, 20
Kunze, Chad, 22
Pino, Lorraine, 38
Broome, Barry, 35
Gosar, Chad, 22
Lane, Randall, 29
Quam, Dave, 12
Bruckner, Tim, 22
Green, Lynnie, 38
Leach, Travis, 22
Reiss, Betty, 14
Bryan, Eric, 12
Green, Robert, 18
Levy, Mitchell, 42
Shindler, Buzzi L, 22
Butler, Ron, 9
Halvorsen, Brad, 18
Livesay, Craig, 30
Shufeldt, John, M.D., 30
Campbell, Bob, 30
Hargrove, Randy, 14
Macias, Steve, 10
Smith, Lynne King, 10
Caraher, Lee, 29
Heckler, Dean, 14
Mealer, J.L., 64
Stelnik, Jeff, 30
Carter-Kent, Chris, 14
Hess, Barry, 64
Meisenheimer, Steve, 22
Stover, Robert A. Jr., 22
Cobb, Steve, 16
Hillard, Mark, 30
Miller, Jason, 52
Thorell, Michael J., 51
Danley, Walt, 14
Judiscat, Kevin, 20
Nealy, Mike, 34
Wiest, Candace, 22
Ducey, Doug, 64
Kaplan, Jason R., 10
O’Shaughnessy, Patrick, 29
Yockey, Neil, 14
Dignity Health, 30
NAWBO Phoenix, 36
Sir Mortgage & Financing, 61
Abrazo, 30
Driver Provider, The, 10, 17
North Phoenix Chamber of Commerce, 36
Snell & Wilmer, 7
Alerus Financial, 5
Dropbox, 12
Northwestern Mutual, 44
Southwestern Business
Alliance Bank of Arizona, 49, 62
East Valley Women, 36
OneSource Virtual, 12
Altima Business Solutions, 57
Economic Club of Phoenix, 36
Owens & Bondell PLLC, 22
SRP, 27, 35
Apple, 12, 46
Effective Leader, The, 22
Phoenix Children’s Hospital, 3, 30
Stearns Bank, 50
Arizona Association for Economic
El Chorro, 48
Phoenix Children’s
SumoMaya Mexican-Asian Kitchen, 48
Index by Company
Development, 36 Arizona Bankers Association, 51 Arizona BioIndustry Association, 18 Arizona Care Network, 30
Eliances, 12
Financing Corporation, 57
Hospital Foundation, 39
Tempe Chamber of Commerce, 37
EndoVantage, 18
Phoenix Convention Center, 21
THINKaha, 42
Engelman Berger, P.C., 20
Phoenix Philanthropy
TicketForce, 10
Employee Benefits
Group, The, 17, 40
Toshiba, 46
Pinnacle Bank, 51
Virtual Word Publishing, 29
Enterprise Technology Services, 43
Pivot Manufacturing, 10
Walmart, 14
Ernst & Young LLP, 9
Precision Air & Heating, 12
Walt Danley Realty, 14
Arizona Fall League, 16
EY, 22
Quarles & Brady LLP, 30
Wells Fargo, 53
Arizona Small Business Association, 36
Fiesta Bowl, 34
Redirect Health, 30
West Valley National Bank, 22, 53
Arizona State University, 18
Flinn Foundation, 18
Renaissance Glendale Hotel & Spa, 38
West Valley Women, 37
Association for Corporate Growth –
Forbes, 44
Sacks Tierney P.A., 20
Women of Scottsdale, 37
Ford, 46
Scottsdale Area
Arizona Chamber of Commerce and Industry, 36 Arizona Diamondbacks, 11
Arizona, 36 Ballard Spahr LLP, 22 Bank of America, 14 Banner Health, 68 Biltmore Bank of Arizona, The, 22, 56 Blue Cross Blue Shield of Arizona, 19, 30
International, Inc., 33
FSW Funding, 60 Glendale Convention & Visitors Bureau, 21, 38 Greater Phoenix Black Chamber of
BNC National Bank, 61
Heckler Design, 14
Buchalter Nemer, 22
Honeywell, 12
Central Phoenix Women, 36
House Old Town Brasserie, The, 48
Chandler Chamber of Commerce, 35, 36
JLL, 67
Chelsea’s Kitchen, 48
KTAR News Talk 92.3, 47
CliftonLarsonAllen LLP, 22
Liquid Capital, 59
Conquest Training Systems, Inc., 4
Local First Arizona, 36
CopperPoint, 2
LocalWork.com, 37
Cox Business, 15
Maricopa County Trip
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Check Out
Commerce, 36 Greater Phoenix Economic Council, 35, 36
Delta Dental of Arizona, 30
this issue of In Business Magazine.
Glendale Chamber of Commerce, 36
BMO Harris Bank, 22, 52
Dell, 46
Bold listings are advertisers supporting
Chamber of Commerce, 37
/inbusinessmagphx
@inbusinessmag
Reduction Program, 14 Meridian Bank, 55
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A CANDID FORUM
Arizona Gubernatorial Candidates Talk Business
ON TUESDAY, NOV. 4, Arizona voters will elect the next Governor of Arizona. In Business Magazine invited candidates Doug Ducey, Fred DuVal, Barry Hess and J.L. Mealer to share their views and plans for business and economic growth.
Doug Ducey (Rep.)
dougducey.com facebook.com/dougducey twitter.com/dougducey youtube.com/user/ducey2014
What are three things you would do in your capacity as governor to spur economic growth and employment, especially in the Greater Phoenix metropolitan area? If we want to build a healthier economy and greater opportunities for Arizonans, we need to make sure our tax code protects hardworking taxpayers. Arizonans deserve a tax code that is simpler, flatter, fairer and a lot easier. After all, it’s your money — you should get to keep more of it and I’ll work tirelessly to make it so. It’s not always about creating new policies — sometimes it’s about eliminating overly burdensome regulations that strangle small-business growth. Let me be very clear: I will go through the state’s budget and statute line by line, dollar by dollar, and I will cut the waste, end the special interest and lobbyist loopholes, and stop adding regulatory costs to Arizona employers. Finally, I want to reform K-12 education in Arizona because our kids deserve an excellent education that
creates real opportunities. When it comes to educating our students, there shouldn’t be winners and losers. Our responsibility is to prepare our children with the skills they need for life. It’s not about how much we spend; it’s whether we deliver real results. Where do you see the economic growth coming from? Imagine a future where local businesses can expand and where companies outside of Arizona look to us as the perfect place to do business. Politicians talk about new jobs and I believe leaders go get them. That’s the kind of governor I intend to be. It’s time to improve schools, streamline regulations, lower taxes and create a friendly business environment for Arizona businesses to thrive. How would you have the state agencies responsible for economic growth — notably the Arizona Commerce Authority — work with regional and local entities to further economic growth? Our objective is simple and clear: a more efficient, effective and accountable government that will Doug Ducey (continued on pg. 66)
Fred DuVal (Dem.) What are three things you would do in your capacity as governor to spur economic growth and employment, especially in the Greater Phoenix metropolitan area? There is a lot more we can do to attract highquality, good-paying jobs and spur economic growth. We can create jobs and secure sustainable growth for our communities by giving tax relief to small businesses that hire new employees, connecting our universities and community colleges to local companies so our graduates can find jobs and start careers, and investing in 21st-century industries like solar and renewable energy. fred2014.com facebook.com/fredduval2014 twitter.com/fredduval youtube.com/user/fredduvalaz
Where do you see the economic growth coming from? Our economy can grow significantly if we find new markets for Arizona products by expanding our trade with Mexico and attracting new, innovative industries such as solar and renewable energy. In
order to expand our trade with Mexico, we’re going to have to stop passing legislation that demonizes Mexican-Americans and doesn’t reflect who we are as Arizonans; and push the federal government to invest in infrastructure, such as ports of entry, the Interstate-11 corridor from Phoenix to Las Vegas, improved rail networks, a new international cargo airport, and major highways that connect Arizona to key markets in Mexico and the western United States. How would you have the state agencies responsible for economic growth — notably the Arizona Commerce Authority — work with regional and local entities to further economic growth? There’s no question that the Arizona Commerce Authority is an important leader in this arena, and I believe it will continue to be a leader in increasing competitiveness and attracting new and exciting industries to Arizona. There is still some work to be done to increase transparency, but overall the Fred DuVal (continued on pg. 66)
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Barry Hess (Libert.)
hessforgovernor.com facebook.com/hess4governor twitter.com/hess4governor youtube.com/user/hess2014
What are three things you would do in your capacity as governor to spur economic growth and employment, especially in the Greater Phoenix metropolitan area? 1) Work to immediately eliminate the personal income and property taxes, and put that money into the hands of the people who earn it — to stimulate the economy in areas where the market demands, not some politician picking “winners and losers” for political favor — and replace the revenue with a sole, flat, 9.9-percent retail sales tax (which could result in many times the current revenue from income/property taxes). 2) Go to a sole, flat 4-percent tax on the gross of all businesses without deductions or offsets. 3) Remove excess bureaucratic regulatory hindrances that now stifle growth. These simple actions would regain confidence in government; force businesses to expand (to keep up with increased customer spending); and “invite” new businesses to start up in or relocate to Arizona, to take advantage of the tax and regulatory stability. Where do you see the economic growth coming from? Real economic growth will come from where it always has — the private sector. The greatest
hindrance to economic growth has always been government interference in its attempts to regulate or direct markets. Recently, California repealed a law that made it illegal to sell homegrown goods from vending carts, and instantly more than 1,000 new businesses sprang up. Imagine what exciting innovations will spring up when Arizona lifts the ban on the industrial hemp industry. With more than 30,000 manufacturing uses, hemp could well become Arizona’s economic savior and lift us from this worsening economic depression. Inevitably, when we decriminalize marijuana for all purposes, we will also see economic growth, just as we will in turning our attentions to energy production and storage. How would you have the state agencies responsible for economic growth — notably the Arizona Commerce Authority — work with regional and local entities to further economic growth? It’s a pleasant fallacy to think that government agency can be “responsible” for or influence economic growth in any positive way. As we continue to see, all these entities do is inhibit the free market, the only true generator of jobs — and the sole basis of economic growth and stability. Barry Hess (continued on pg. 66)
J.L. Mealer (Indep.)
jlmealer.com facebook.com/mealer2014 twitter.com/johnlewismealer youtube.com/user/mealer2014
INBUSINE SSMAG.COM
What are three things you would do in your capacity as governor to spur economic growth and employment, especially in the Greater Phoenix metropolitan area? Three? You’ve got to be kidding. The issues that created our “last in line” economic position cannot be cured by three defined “things.” I will be forced to generalize like a politician — which I am not. These programs are all researched, water-wise and implemented simultaneously: First: Enforce the law on elected officials and globally traded corporations to even the playing field. No more bribes to pass laws that hurt the little guy. Second: Bring in the Seven Pillars of industry that have been waiting for Arizona to allow them into the state. The following industries are water-wise and ready to go; this is not pipe dreaming: These seven pillars are turn-key: I. Omnibus Program (See: Mealer Initiative 2014). II. Major manufacturing from a variety of Omnibuscreated businesses as well as those listed below. III. Industrial hemp (untouched industry; scope of $3 trillion over five years, including new construction, new farm towns, new related and unrelated businesses, thousands of products, biofuel replacement for corn ethanol and more, plus exports). IV. Biomedical industry, including cannabinoids
(untouched; scope of $2 trillion over five years), easily cornering “non-opiate-based” medication R&D, medication manufacturing. Decriminalize, regulate and tax cannabis sales and private growth. V. New “Arizona Meat and Agriculture Department” promoting/exporting all exclusive AZMAD-endorsed, high-grade, in-state grown/raised products. This is one program that Arizona must be involved with. Water-wise under the right parameters. VI. Aerospace/Motorsports. Freebie to the state if we end corrupt politicians pay-to-play. VII. Entertainment industry ($3 trillion worldwide; Arizona can make $30 billion of this total over five years). We must revive and revamp the State Film Office into the State Entertainment Industry Office. Third: Prove to new industry that we have a positive, non-corrupted education system that will churn out educated young adults. Plus the end of pay-to-play. Industry and new business do not like Arizona’s current climate of corruption and backroom deals to open shop. Right now, I have connections to a billiondollar return of the Phoenix Gran Prix slated for February 2015. All the world’s major automakers and many smaller companies will put their investment into this soon-to-be annual race in Phoenix streets. The surrounding area will turn more than a billion dollars in this one race. J.L. Mealer (continued on pg. 66)
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ROUNDTABLE
A CANDID FORUM
Doug Ducey (con’t.)
Fred DuVal (Con’t.)
deliver Arizona the healthy, growing economy hardworking taxpayers deserve. My step-by-step plan of action will attract and grow businesses, create good-paying jobs and long-term careers, and achieve consistent and measurable growth. I will work with any and all state, regional and local entities to drive results to that end.
Arizona Commerce Authority has been a step in the right direction. Additionally, I will call on the director of each state agency to identify the 10 most effective actions that can be taken to contribute to job creation, including the extension of the moratorium on new regulations and a line-by-line review of all existing regulations.
What resources or programs do you believe we need to create, revamp or remove to ensure Arizona has the educated and highly skilled work force necessary to support the state’s economic growth plans? My focus will remain on opportunity — for some, that will mean a four-year degree; for others, it might mean certification in a technical trade. The end result is that our education system would afford opportunities that allow Arizonans to work hard and have a chance to get ahead, in whatever path is best for them. To that end, higher education must be affordable and attainable so that hardworking Arizona families can take advantage of these opportunities.
What resources or programs do you believe we need to create, revamp or remove to ensure Arizona has the educated and highly skilled work force necessary to support the state’s economic growth plans? For years we have made it known that education is not our top priority. That has got to change. When times got tough and the economy took a hit, education bore the brunt of damaging cuts. As governor, I will stop the cuts to our children’s schools — cutting not another dollar, not another dime. My opponent supported those cuts and wants to continue delaying reinvestment in our children’s schools with endless delays and appeals. I want to talk about education in the schoolhouse, but my opponent is dead-set on talking about it in the courthouse.
Doug Ducey was born and raised in Toledo, Ohio, and came to Arizona in 1982 to attend ASU, where he earned a degree in finance. After working at Procter & Gamble, Ducey helped launch Cold Stone Creamery on its path to success. Alarmed by the state of the economy, and the massive spending and debt that government was incurring, Ducey decided to make a positive difference by seeking public office and, in 2010, was elected as Arizona’s 32nd state treasurer.
Fred DuVal is a business and education leader from Phoenix, Arizona. He has held leadership positions in the Arizona Governor’s Office; the White House; Arizona’s public university system; and in the private sector, where he was credited with solving big problems for middle-class families. DuVal graduated from Tucson High School. He received a B.A. from Occidental College and a degree in law from Arizona State University.
Barry Hess (Con’t.)
Government infusions of valueless currency are just temporary and short-lived solutions. We need to re-establish a fundamental economic foundation to provide more jobs than we have labor to fill them. The hard truth is that there is no such thing as a “jobless” recovery. Jobs provide the ongoing ability to sustain economic activity indefinitely. If government commerce authorities were able to influence economic or industrial growth, obviously we wouldn’t have lost the vast bulk of our manufacturing base, and we would not be buried in economic depression. What resources or programs do you believe we need to create, revamp or remove to ensure Arizona has the educated and highly skilled work force necessary to support the state’s economic growth plans? Though it may make some squeamish, we need to face the facts that 1) college isn’t good for all students, and 2) government schools have failed Arizona miserably (we’re ranked last, or next to it, of all 50 states). So, we need to curtail the curriculum to the very basics: science, math, reading, history, economics and, most importantly, critical thinking skills. To prepare students to learn whatever they desire. “Education” only begins with a diploma or a degree. We should encourage the private sector to provide additional training that is specific to their chosen employment or vocation, at their own expense. Libertarian Barry Hess graduated from Fordham University in New York City and moved to Arizona in 1980. Since then, he has been a powerful force in Arizona politics, and has earned the respect of people from across the political spectrum. In 2012, he spearheaded the largest, most diverse coalition in Arizona’s history — the first successful Citizen’s Referendum in more than 30 years. He is an author, and has founded and owned several small businesses.
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J.L. Mealer (Con’t.)
Where do you see the economic growth coming from? This is covered at length in the above answer. How would you have the state agencies responsible for economic growth — notably the Arizona Commerce Authority — work with regional and local entities to further economic growth? The agency, such as the Arizona Commerce Authority, would need to be a useful agency in the first place. Without that, they cannot assist in anything with regional and local entities in the furtherance of economic growth. What resources or programs do you believe we need to create, revamp or remove to ensure Arizona has the educated and highly skilled work force necessary to support the state’s economic growth plans? Apprenticeship programs will help with new industry, but we must have a state land lease program to ensure room for the new businesses and industries while we pay for K-12 education. I have that program. The Mealer Initiative 2014 offers a detailed plan for Arizona’s own commodity exchange that will create an entirely new tier of an economy and yet another basis for Arizonans to train to work toward. I would like to open a State Bank to help individuals pay interest-free loans for specific educations and even for the 10-year student-to-nowhere programs we see around us. The paid apprenticeship program will help students with in-state school payments. J.L. Mealer was born and raised in Arizona. He is a mechanical engineer and developer with 25 years’ experience. Mealer opted to run for Governor to revive and reinvigorate Arizona, solving construction industry budget shortfalls and living viability by implementing alternative building materials. His passion is to “engineer a better mousetrap”; his involvement in auto racing influenced Mealer Automobile with multiple patents that include a multi-fuel engine/non-fossil fuel-powered regenerative energy system.
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