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Editor’s Note
Happy Dad’s Day S
o, I’m a horrible daughter. I’ve been looking, and apparently the last good photo I’ve taken with my dad was when I got married, almost 17 years ago. I’m sorry Jamie, I love you. I promise I’ll make it up to you next year. That’s the thing about dads, they kind of take a second place when it comes to the whole annual parental celebration thing. Moms get flowers, chocolates, breakfast in bed, brunches — dads tend to be a little simpler. Backyard barbecue? Lunch at Buffalo Wild Wings? That’s what it looks like in my family at least. This month’s cover feature in Biz New Orleans celebrates the bond between one local father and son who happen to share a very special connection to the day that extends past the fact that they are the dynamic tea tasting duo behind Luzianne tea — the No. 2 iced tea bag producer in the nation, with offices right here in New Orleans (“Steeped in Tradition,” p. 40). Plus, it turns out June is national iced tea month! If you want to really treat dear old dad this year, consider a meal at Whoodoo BBQ, a restaurant in Treme serving Chef Demetriek Scott’s signature barbecue sauce, or maybe catch a movie at the new Broad Theater — the stories behind both are featured in this month’s issue. Whatever you do, if you’re lucky enough that your dad is alive and living close by, at least make sure you grab a good picture.
Happy Reading,
Kimberley@BizNewOrleans.com
CLARIFICATIONS A few clarifications in the May issue: The correct photo of contributing writer Greg Rhoades in the Guest Viewpoint article is seen here. The caption in “Leaving Their Mark,” of the YLC staff should read, from left to right: Ellen Durand, Natasha Ott, Stephanie Powell and Candace Weber. We regret the errors. 4
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june 2016 | volume 2 | issue 9
Publisher Todd Matherne Editorial Editor-in-chief Errol Laborde Managing Editor Kimberley Singletary Art Director Antoine Passelac Photographer Cheryl Gerber Web Editor Kelly Massicot Assoc. Multimedia News Editor Leslie T. Snadowsky Contributors Andrew Alexander, Emmett George Dupas III, Robert Edgecombe, Steven Ellis, Suzanne Ferrara, Rebecca Friedman, Carolyn Heneghan, Dylan Hoon, Pamela Marquis, Chris Price, Peter Reichard, Jennifer Gibson Schecter, Keith Twitchell, Melanie Warner Spencer advertising Vice President of Sales Colleen Monaghan Colleen@myneworleans.com (504) 830-7215 Sales Manager Maegan O’Brien Maegan@BizNewOrleans.com (504) 830-7219 Senior Account Executive Caitlin Sistrunk Caitlin@BizNewOrleans.com (504) 830-7252 Account Executive Carly Goldman Carly@BizNewOrleans.com (504) 830-7225 PRODUCTION Production/Web Manager Staci McCarty Senior Production Designer Ali Sullivan Production Designer Monique DiPietro, Traffic Manager Jessica DeBold administration Chief Executive Officer Todd Matherne President Alan Campell Executive Vice President Errol Laborde Vice President of Sales Colleen Monaghan Director of Marketing & Events Cheryl Lemoine Event Coordinator Margaret Strahan Administrative Assistant Denise Dean Distribution Manager John Holzer Subscription Manager Sara Kelemencky Subscription Assistant Mallary Matherne
110 Veterans Blvd., Suite 123, Metairie, LA 70005 (504) 828-1380 Biz New Orleans is published monthly by Renaissance Publishing, LLC, 110 Veterans Blvd., Suite 123, Metairie, LA 70005; (504) 828-1380. Subscription rate: one year $24.95, two year $39.95, three year $49.95 — foreign rates vary call for pricing. Postage paid at Metairie, LA, and additional mailing entry offices. POSTMASTER: Send address changes to Biz New Orleans, 110 Veterans Blvd., Suite 123, Metairie, LA 70005. Copyright 2016 Biz New Orleans. No part of this publication may be reproduced without the consent of the publisher. The trademark Biz New Orleans is registered. Biz New Orleans is not responsible for unsolicited manuscripts, photos and artwork, even if accompanied by a self-addressed stamped envelope. The opinions expressed in Biz New Orleans are those of the authors and do not necessarily reflect the views of the magazine or owner. 6
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Contents
98
76
40
Features
From the Lens
40 Tea for Two
72 Great Offices
48 Buying In
76 Why Didn’t I Think of That?
The father/son tea masters of Luzianne
Looking for a change? A franchise could be the way to go.
WDG | Architects Engineers
The inspring story behind Whoodoo BBQ
88 Behind the Scenes
New Orleans Regional Traffic Management Center
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On the Cover Malcolm Shalers is the tea master and director of commodities at the New Orleans offices of Luzianne, the No. 2 bagged iced tea producer in the U.S. Photo by Jeff Johnston.
Contents
60
22 Columns
20 NOLA By the Numbers
How safe is our city?
22 Dining Biz
24
Vive la France!
24 Tourism Biz
NOTMC spices up Tuesdays
26 Sports Biz
Perspectives
News
28 Film Biz
56 Insurance
18 Calendar
60 Healthcare
36 Biz Bits
64 Accounting
Q&A Brian Knighten, owner of
Some unsolicited advice for Tom Benson
A rundown of the May 16 Senate Committee meeting on motion picture tax credits.
30 Entrepreneur Biz
A look at how one local man claimed space on big box shelves.
32 Biz Etiquette
A tactful way to mentor
34 Tech Biz
10
Disaster data recovery options
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Hurricane season is here: Are you ready?
Depression in the workplace is a multi-billion-dollar problem.
How will the new 1 percent sales tax affect business?
68 Guest Viewpoint
Retirement tips for every age
Upcoming events not to miss
Industry news
82
The Broad Theater
94 Around Town – Events Industry gatherings
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Publisher’s Note
Get Ready.
T
his month starts the long hot summers of New Orleans, along with the so-called official start of hurricane season. I view June and July as the preseason for hurricanes — the time you use to get prepared — and August and September as the real season. Every June, we make sure all the backup systems are in place, the insurance documents are up to date and the emergency contact system we have in place for our employees is up and working. This is just part of the business model in New Orleans and along the Gulf Coast. Since 2006, we have moved 90 percent of our work data to the cloud and enabled the capability to work remotely. It has not only got us prepared for any event, but made us a more efficient company. For more tips on preparing for hurricane season, see “Are You Ready?” on page 56. As we all also gear up for Saints preseason come August, it’s a great time to get a game plan for your company in place. Let’s all hope we don’t have to use it. Todd Matherne
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Meet the Sales Staff
Maegan O’Brien Sales Manager (504) 830-7219 Maegan@BizNewOrleans.com
Caitlin Sistrunk Senior Sales Executive (504) 830-7252 Caitlin@BizNewOrleans.com
Carly Goldman Account Executive (504) 830-7225 Carly@BizNewOrleans.com
Colleen Monaghan Vice President of Sales (504) 830-7215 Colleen@BizNewOrleans.com
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Calendar Thursday, June 16
June 6-9 Cloud Identity Summit
Stay Local’s NOLA Know-How
New Orleans Marriot
(showcase of B2B businesses coupled with TED-style talks
CloudIdentitySummit.com
for local business leaders) 4 – 7 p.m. People’s Health New Orleans Jazz Market
Tuesday, June 7
1436 Oretha Castle Boulevard StayLocal.org
New Orleans Chamber of Commerce 2016 Power Breakfast sponsored by First NBC Bank
Friday, June 17
8 – 9:30 a.m. 1515 Poydras Street 5th Floor Auditorium
EO Learning Day:
NewOrleansChamber.org
Accelerate Your Execution All-day workshop in Baton Rouge Location T.B.D.
Tuesday, June 7
EOLouisiana.org
BRAC Monthly Lunch
Wednesday, June 22
11:30 a.m. – 1 p.m. East Baton Rouge Parish Library 7711 Goodwood Boulevard, Baton Rouge
Hospitality Sales & Marketing Association
BRAC.org
13th Annual Revenue Optimization Conference 7 a.m. – 6:30 p.m. Ernest N. Morial Convention Center
Thursday, June 9
900 Convention Center Boulevard, New Orleans HSMAIROC.org
ABWA Crescent City Connections Luncheon Radio personality Monica Pierre
Thursday, June 23
11 a.m. – 1 p.m. Ralph Brennan’s Heritage Grill
Hispanic Chamber of Commerce of Louisiana
111 Veterans Boulevard, New Orleans
Networking Event
ABWANewOrleans.org
5:30 – 7:30 p.m. Manning’s Sports Bar
Tuesday, June 14
519 Fulton Street HCCL.biz
New Orleans Chamber of Commerce Presents: Legislative Debrief with Representative Walt Leger
Wednesday, June 29
11 a.m. – 1 p.m. Sheraton New Orleans Hotel 500 Canal Street
Jefferson Chamber of Commerce
NewOrleansChamber.org
Prosper Jefferson Seminar Series: Public Speaking 9 – 10:30 a.m.
Thursday, June 16
JEDCO Conference Center
St. Tammany West Chamber of Commerce Expo 2016
700 Churchill Parkway, Avondale JeffersonChamber.org
3 – 7 p.m. Fontainebleau High School 100 Bulldog Drive, Mandeville StTammanyChamber.org
We’d love to include your business-related event in next month’s calendar. Please email details to Editorial@BizNewOrleans.com.
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Columns | NOLA By The Numbers
Number of Crimes Per 100,000 Residents, 2009-2014 2009 2010 2011 2012 2013 2014 Murders/Non-negligent Manslaughter Violent Crimes Property Crimes
51.7 50.9 57.6 53.2 41.4 38.7 777.0 754.2 792.0 815.2 786.4 973.9 3,846.3 3,677.7 4,038.6 3,772.4 3,852.6 4,231.8
Crime Log How Safe is Our City?
T Robert Edgecombe is
an urban planner and consultant at GCR Inc. He advises a wide range of clients on market conditions, recovery strategies, and demographic and economic trends.
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here is no more intractable or pervasive issue in New Orleans than crime. More than any other topic, it dominates our headlines and frustrates broader efforts toward improving quality of life in the city and the region. It shapes and upends the lives of a devastating number of our friends and neighbors, and unsettles our civic consciousness. I remember reading a national news piece a few years ago about a recent New Orleans high school graduate who had, by the time she turned 18, lost over 20 friends to gun violence. Consider this: according to a recent report published by the University of New Orleans, nearly half (47 percent) of New Orleans residents hear gunfire in their neighborhoods at least a few times a year. Almost a third (30 percent) of New Orleanians or their family members have been a victim of a crime in the last three years. About half of our city’s residents (49 percent) believe that it is
the single biggest issue in the city, and 53 percent believe that crime has become more prevalent, not less, despite the many conspicuous and purposeful initiatives to fight it. Our city’s perceptions of and experiences with crime are, I believe, informed and refined by data, which show that, at least from a statistical perspective, New Orleanians are safer from the most heinous crimes but more susceptible to overall crime than we were a few years ago. The most reliable and consistent source of year-over-year crime data is published annually in the FBI’s Unified Crime Reports, which collects and standardizes violent and property crimes reported by law enforcement agencies throughout the country. The FBI rightly cautions users of this data against drawing simple conclusions from what is ultimately nuanced and complicated data, especially in comparing statistics among jurisdictions. Accordingly, I have made every
effort to use the data to primarily make year-to-year observations for New Orleans and to compare our city’s crime figures with other areas sparingly. First, and most obviously, the city’s homicide rate (technically speaking, our murder and non-negligent manslaughter rate) is perennially high. Between 2000 and 2014—the most recent year of complete data available—New Orleans’ murder rate has been the highest in the nation nine out of 15 times. With the exception of 2005 and 2006, our rate has always been among the top three highest nationwide. Throughout this period, more than 40 per 100,000 New Orleans residents have been murdered in all but three years. Over time, however, our murder rate has been declining at an encouraging rate. Between 2009 and 2014, the number of homicides per 100,000 residents dropped from 51.7 to 38.7, a decline of 25 percent. (The overall number of murders did increase in 2015, but the final numbers used to calculate the rate have not been released.) This ref lects, but also far outpaces, a national trend; the number of homicides per 100,000 residents nationwide decreased from 5.0 to 4.5 (10 percent) during this same period. We’re still a far cry from the mid-1990s, when the city’s murder rate exceeded 85 per 100,000 residents. On the other hand, the city’s overall rate of violent crimes and property crimes has not improved in recent years. In 2009, the city reported 777 violent crimes per 100,000 residents; in 2014, this number grew to 974. Likewise, there were 3,846 property crimes per 100,000 residents reported in 2009 and 4,232 in 2014. Nationally, the violent crime rates declined from 432 to 365 per 100,000 residents during the same period, and the property crime rate dropped from 3,041 to 2,596. Unfortunately, good news or bad, there’s little solace in statistics on this issue. We are all aware of crime’s impacts on our own everyday lives—it is both the cause and culmination of many of our city’s most pressing and deep-rooted challenges. n Sources: FBI Uniform Crime Reports, UNO 2016 Quality of Life Survey
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Columns | Dining Biz
Vive La France! Our culinary mother still has so much to teach us. BY Peter Reichard
D
uring the past three centuries, African, Italian and even German cuisine have helped form tastebuds in New Orleans and her environs. And it’s clear that Vietnamese cuisine has arrived in the Crescent City when somebody named Michael Gulotta, rather than, say, Michael Nguyen, is one of its most recognized purveyors. In April, Food and Wine named the MoPho proprietor one of its best new chefs for 2016. But New Orleans cuisine always has been, and God willing always will be, most rooted in French fare. There are many reasons little New Orleans is recognized as an international destination for food, but France is the main one — because France is the food capital of the world. A recent trip to this mother country reminded me of something that few places do: that New Orleans’ culinary life actually has room to improve. In several respects, France continues to, ahem, eat our lunch. To begin with, there’s the culinary entrepreneurship. Free-market types 22
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in the U.S. of A. like to talk up the unmatched American entrepreneurial spirit. France, where life choices tend to be more constrained and the economic environment are reputed to be stif ling, makes for a frequent foil in such comments. I don’t know enough about the matter to verify whether France is lacking in market entrepreneurship, but if it is true, I think it’s at least partly because the French are spending vast amounts of their entrepreneurial spirit on growing and making food. I visited two different sets of family friends, and in one case met extended family of friends. Among the three, one family lived in Paris, another in the Loire valley and another in a small town near Lyons. What did they all have in common? They all grow fruit and vegetable gardens in their yards. They’re all making their own preserves. They’re all happy to spend hours painstakingly preparing a dinner. And, of course, they all have wine cellars. Here’s where we have no hope of matching France. The excellent Bordeaux
that your host casually pulls out to pair with an afternoon snack would never make it overseas, and if it did, would cost three times as much. In fact, the wine consumption might sap some of the French entrepreneurial spirit. There’s only so much you can accomplish with that much wine in your system. The French also devote a large percentage of their lives to the eating process itself. Our Easter supper lasted six or seven hours. I lost count of the number of courses. If there had been a pheasant and a suckling pig, I would have expected to look over and see Louis XIV at the head of the table. The languorous pace was even more apparent a few days later, when, while visiting with other friends at their house in Saumur, we stopped by for what was supposed to be a quick bite to eat before touring the area that afternoon. Our “quick bite” lasted more than four hours and included several courses and multiple trips to the wine cellar. Everybody knows the French are unmatched in the category of haute cuisine. But it’s one thing to know it intellectually, quite another to taste it. Our dinner at a country chateau in the Loire Valley was a classical, unhurried dining experience — perhaps the most exquisite, most gorgeously presented, most lovingly prepared meal I have ever had. The wait staff went about their work with an ancient pride in the grand style of service. In a country not known for attentive waiters, these gentlemen were beyond professional: They were priestly. Finally, there are the public markets. Walking past the brimming mélanges of fish, of poultry, of sausages and, above all, of cheeses with their triumphant aromas, you realize that France is the world’s culinary touchstone for a reason. Standing directly in her shadow is not a bad place for New Orleans to be. n
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Columns | Tourism Biz
Tourism Tuesday A new campaign proves NOLA is the place to be midweek.
T Jennifer Gibson Schecter was
once a tourist in New Orleans herself and is now proud to call NOLA home. Prior to New Orleans, she wrote for publications in the Midwest and New York City.
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uesdays are sort of the worst. You never get to take them off for a three-day weekend. They are far away from payday. And the humble taco is the only thing to look forward to in most cities. Thankfully, things are different in New Orleans. #HappyTuesday is the latest campaign by the New Orleans Tourism Marketing Corp. (NOTMC). It aims to “change the internet’s opinion of the lowest ranked day of the week” and has already made an impact at that arbiter of influence, BuzzFeed. Two of BuzzFeed’s writers, as well as their producer and a photographer, spent 24 hours awake on a Tuesday in New Orleans to experience and document a #HappyTuesday for themselves. Their resulting blog post, “How NOLA Taught Us to Live Our Best Lives on the Worst Day of the Week,” celebrates how special the visitor experience can be in NOLA no
matter what day of the week you are here. Mark Romig, president and CEO of NOTMC, explained, “We’re an economic development corporation, and our main tool is to market the city to leisure travelers. We do that through a number of marketing projects: paid media, social media, advertising and special events. It’s important to continue to message New Orleans as a great place to visit not only on weekends, but at the beginning part of the week.” The campaign is using both social media and traditional marketing tools to spread their message. The new website has been tailored for folks looking for something to do and special offers linked to the campaign. It’s a breeze to navigate on both computers and mobile devices. Simple drop-down menus and clear categories like “Deals” and “Events” make it easy to find something to make your Tuesday more interesting. Their curated
content also offers additional info that can be helpful for visitors and locals alike. A particularly noteworthy aspect of the campaign is that NOTMC has partnered with local businesses to offer special deals to people who use the website. Recent opportunities include discounts on cooking classes, airfares, hotel rooms, deals at retailers and exclusive dining offers. “Our mission as an organization is to support the economy and build a larger economic base for the city,” said Romig. “We want to see increases in hotel occupancy, tickets to museums and events. Time will tell and we won’t be able to check off boxes immediately, but I believe it will be a long-term effect. The message needs to take and people need to understand that we’re great in the early part of the week as well as weekends.” NOTMC has even enlisted the help of local culture bearers and influencers to help visitors understand how happy a Tuesday can be in NOLA. If a person is on Twitter and complaining about Tuesdays, they just might get a response from Dr. John, “Big Chief” David Montana, chef John Besh or Kermit Ruffins, to name a few. Those folks are collaborating with the campaign via social media to encourage people to visit New Orleans during that midweek period. The next layer of the campaign will be aimed at “drive markets,” or those markets surrounding New Orleans that are in driving distance, including Baton Rouge, Lafayette, Shreveport, and Lake Charles, Louisiana; Beaumont and Houston, Texas; Biloxi, Gulfport, Jackson, and Hattiesburg, Mississippi; and Mobile, Alabama. “The most important outcome and return on investment is how we can affect occupancy and spending in the early part of the week — Sunday evening to the Wednesday/ Thursday window,” Romig said. “That is where we believe we have the greatest opportunity to grow spending in the city.” With a recent study released showing visitor spending in 2015 increased to a record $7.05 billion and visitor numbers nearing pre-Katrina levels of 9.78 million, the midweek period is ripe for tourism growth. The numbers are trending for a very happy Tuesday indeed. For more information on #HappyTuesday, visit www.HappyTuesday.com or tweet #HappyTuesday or #VisitNewOrleans. n
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Columns | Sports Biz
Sell the Saints Listen up Tom Benson, I’ve got an idea.
H chris price is an award-winning journalist and public relations principal. When he’s not writing, he’s avid about music, the outdoors, and Saints, Ole Miss and Chelsea football.
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ere we are in June, caught between coming down from the thrill of the draft and waiting for training camp to start in late July. It sure seems like the longest month of the NFL offseason, but it leaves lots of time to read up on the league’s offseason happenings and how teams and players are gearing up for the fall, and, of course, there’s the ever-popular off-field shenanigans. With all of that free time, the mind wanders, ruminations brew and, sometimes, thoughts are connected, and ideas develop. Such has been the case for me. Saints owner Tom Benson has been in the news more often, I suspect, than he would like. For the past year and a half,
Benson has been locked in a family dispute over succession of the Saints and the Pelicans. Upon his death, he wants to give the teams to his wife. His adopted daughter, Renee LeBlanc, and her children, Ryan and Rita, say the teams are already in a trust set up for them and can’t be taken away unless replaced by something of equal value. As if a high-profile family feud wasn’t enough, the Saints are involved in a federal lawsuit with Tom Benson’s former personal assistant, Rodney Henry, who alleges Gayle Benson had him fired after he complained that she made racially discriminatory comments toward him and that he was refused pay for hours of overtime work. On top of running two
professional sports franchises, that’s a lot for anyone to handle. The 88-year-old should be enjoying the fruit of his life’s work, not fighting over it. Another storyline I’ve been following is the metamorphosis of Peyton Manning from Super Bowl-winning quarterback to former player. With his knowledge of the game and competitive fire, there are many who think he would make a great coach or executive. Others have said he’d be a natural in the broadcast booth, adding color commentary to NFL or SEC games in coming years. In April, Manning spoke with John Madden about his future and a job offer from CBS Sports. Madden, known to one generation as a Super Bowlwinning head coach with the Raiders, to another as a legendary announcer, and to a third as the namesake of the most popular football video game franchise in existence, advised him to either run a team or own one. That’s when — at least for me — the clouds parted, a chorus of angels began singing, and the light of heaven shone down: What if Peyton Manning put together a consortium to buy the Saints? With his salary plus money from his investments and numerous endorsements — Gatorade, Papa John’s and Nationwide — he’s sitting on a lot of loot. When you consider the roster of investors he could pull together, it’s entirely feasible. He’s got his father, Archie, a former NFL star, and his brothers, Eli, a two-time Super Bowl-winning quarterback for the New York Giants, and Cooper, a partner in an energy investment firm. Manning is also heavily invested in Papa John’s Pizza, and could bring in company CEO John Schnatter as a partner. And that’s just a start. Many would line up to partner with Manning on a deal like this. It’s hard to imagine him not having the ability to raise the $1.5 billion that Forbes says the team is worth. With the sale of the team and cash on hand, it’s likely Benson would have a quicker and easier time settling the lawsuits, healing his family and enjoying his golden years peacefully. For the Saints and their fans, it would mean the team being owned and operated under the direction of “The First Family of Football,” a hometown team that could return the home team to Super Bowl glory. n Photo Associated Press Jonathan Bachman
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Columns | Film Biz
Senate Committee Report My take on the May 16 committee meeting concerning the motion picture tax credits.
A
Kimberley Singletary is the
managing editor of Biz New Orleans magazine. A 20-year Southern California veteran, she has been surrounded by the film industry for most of her life.
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few weeks ago, I got a call from a representative with the Louisiana Film and Entertainment Association (LFEA). The representative explained to me what I already know; the film industry in this state has been hurting since the $180 million tax credit was enacted last year. In order to fight back by providing the powers that be with a more complete vision of the victims of this drop, the representative was requesting that people affected by the industry in any way submit a written testimonial. When I spoke with the LFEA in mid-May, the organization reported that they had received more than 1,800 written testimonies. The next step was to appear in front of the Senate Committee on Revenue and
Fiscal Affairs on Monday morning, May 16 at 9:30 a.m. — the same day we went to press with this issue. Of course I had to watch via the streaming feed on the State Legislature’s website. There were actually three tax credits on the agenda to be discussed before the committee recessed at noon: the Motion Picture Investor Tax Credit; the Digital Interactive Media and Software Tax Credit; and the Musical and Theatrical Productions Tax Credit. It was a lot to get through, but the purpose of the committee meeting was only to introduce the topics into discussion. There would be no voting. The two main presenters on the side of the film industry were Don Pierson, secretary
of the Louisiana Economic Development (LED) and Chris Stelly, executive director of the Louisiana Office of Entertainment Industry Development. Both, in my opinion, did a strong job of laying out the changes that were made last year, and the fact that there has been a steep dropoff in the industry as a result. “We know only 20 percent of our film capacity is at work today,” Pierson said. A few things were made clear: both organizations are in favor of the sunsets on the bills, saying that they encourage the continuation of the conversation; Canada, Georgia and California are seeing increases in filming; and, finally, there is a marked difference between the ROI the state has seen from the industry vs. the ROI for local economies. It’s a big difference. While the industry typically gives returns of 23 cents on the dollar to the state, the local cities and parishes are seeing a $4.63 return on the dollar. Two members of the Senate Committee were vocal on the subject: Senator Neil Riser of Caldwell, Louisiana and Senator W. Jay Luneau, of Alexandria, Louisiana — both, it should be noted, are not exactly film hubs. Neither sounded supportive. Riser dismissed the local returns, noting that as a State Senator his obligation is to look at the state, not local impact. There was a lot of focus and confusion during the meeting over the methodology used to come up with the ROI, and zero attention paid to what Stelly stressed twice was the real issue at hand: the suspension of the 85 cent buyback, explaining that the buyback is a function of financial security for the lenders on the market and suspension means that no one knows the value of the credits. The time given to motion picture sredits was brief, but it was definitely not overly encouraging, with Senator Luneau expressing multiple times that he would rather see the money go in other directions, like to education. He expressed frustration that large movie companies would come in and make millions filming in the state while we would get nothing — that is, until it was explained that companies are required to pay state income tax on all their earnings while filming in the state. There were multiple times while listening that I wanted to bang my head against the wall. It will definitely be interesting to see how things progress. n Photo Thinkstock
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Columns | Entrepreneur Biz
Big Idea to Big Box How one local entrepreneur made the leap.
F Keith Twitchell
spent 16 years running his own business before becoming president of the Committee for a Better New Orleans. He has observed, supported and participated in entrepreneurial ventures at the street, neighborhood, nonprofit, micro- and macrobusiness levels. 30
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or many product-oriented startup businesses, getting to the mass market is frequently the ultimate goal. And nothing gets a product to the masses like placing it on the shelves of one of the big-box retailers. While it may seem that the big boxes stock primarily mass-produced items from major manufacturers, such is not necessarily the case. As one south Louisiana inventor recently discovered, build a better mousetrap — or in this case, a better HVAC ceiling vent cover — and even a oneman operation can claim some space on Walmart’s shelves. In the course of conducting
his HVAC service business, Cool Works La., Wade Bergeron often found himself changing air filters for aged or infirm customers. While standing three rungs from the top of his ladder one day, it hit Bergeron that there had to be a better way. Thus the Reachable Magnetic Ceiling Filter Vent Cover was conceived. Coming up with the concept and initial design was the easy part. Getting even as far as the prototype stage proved significantly more difficult, as none of the fabricators near his Youngsville home could do the job. Being an independent businessman for many years, Bergeron is blessed with a thick
“do-it-yourself” streak, so he quickly took matters into his own hands. “I checked out YouTube,” Bergeron recalled. “Those how-to videos will show you how to do a lot of things. I also looked into the new production technologies. My local library has a 3-D printer, which really helped move things along. “Doing it myself turned out to be a much better way to go,” he added. “I would advise anyone to be very careful about outsourcing during the prototype stage.” Bergeron allowed himself plenty of time to get the prototype just right, but finally he felt it was ready to bring to market. He brought the vent cover to a well-known HVAC company, and was immediately told by the manager, “That won’t sell.” Looking back, Bergeron realizes he was ahead of himself anyway. “I was as impatient as anyone to make this work, but it’s really important to move slowly. It takes maturity to know when you’re not ready.” A pause to regroup and do a little tinkering brought Bergeron to do-it-yourself, part two. After patenting his invention – something he said he should have done earlier anyway — he began selling the product himself at home-and-garden shows. After building up a record of successful sales, he was ready to try breaking into the regular retail market again. Feeling better prepared, and aided by the support of Product Launchers, a business-consulting firm that assists entrepreneurs in taking that leap to the larger markets, Bergeron was able to get through to the national retailers. Between in-store and online presences, his product is now available through more than half a dozen major hardware and general merchandise chains. Reflecting on the journey from big idea to big box, Bergeron noted that both time and money were major challenges. He invested a significant portion of his life savings in realizing his vision, which, he acknowledged, gave him some scary moments. “Still, time was a greater challenge than money,” he recalled, because he was still operating his service business while trying to launch the product. “That’s really just about being willing to make the time.” Now that he’s succeeded in breaking into the major retail marketplace, Bergeron is far from complacent or satisfied. “I want to blow the tires off of everything,” he said. “That’s my real goal.” n
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Columns | Biz Etiquette
Mentoring the Young How to tactfully promote good business etiquette in young professionals and underlings.
C Melanie Warner Spencer is editor of
New Orleans Bride Magazine. Her writing has appeared in the Austin American-Statesman, the Houston Chronicle, the Chicago Tribune and Reuters. Spencer’s ever-expanding library of etiquette books is rivaled only by her everready stash of blank thank-you notes. Submit business etiquette questions to Melanie@ MyNewOrleans.com.
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onsider this: Many workplaces now have four generations working side by side. From Baby Boomers and Generation X to Millennials and the group after them — which we media types call Generation Z — there is a profound age range. According to the Future Workplace 2015 MultiGenerational Leadership Study, “companies should consider more informal learning and development, mentoring and coaching and access to selfdirected learning.” But with so many age groups and learning and communication styles in every office, offering guidance can be tricky for even the most well-intentioned managers and senior employees. Mentoring new hires may offer a solution. And small stumbles may offer a convenient entrée into such a relationship.
“It’s important for a new hire to know their supervisor might find it radically offensive to text that you are taking a sick day [or] an older person might have expectations about greetings and salutations in emails,” said Daniel Post Senning in a recent phone interview. Senning is co-author of the 18th edition of “Emily Post’s Etiquette,” and co-host of the “Awesome Etiquette” podcast. “Having a mentor or having someone who has experience in the field can go a long way.” Why should we care so much about the success of underlings and our daily communication methods? After all, we are all adults with a lot of work to do and only so many hours in the day. While it’s tempting to adopt a Darwinian philosophy, taking the time and effort to mentor young coworkers benefits both
the company and everyone involved. “This is not only about you, your success, your organizational success, but also your quality of life every day,” said Senning. “A big picture concept that I love to share is that etiquette is ultimately about relationships.” It’s important to enter into mentoring with a spirit of altruism. Senning points out that anyone can be rudely honest, so ask yourself: Can I be benevolently honest? “I call it the ‘broccoli on the teeth’ rule,” said Senning. “Most people would prefer to hear something awkward or embarrassing if it helps them avoid something awkward or embarrassing down the line… Do it in the spirit of and with the intention that it’s for the other person’s benefit.” He suggested first asking for permission, in order to get their buy-in and also to prepare them for the conversation. Begin with something to the effect of, “There’s something that I’ve noticed and I’m wondering if you are aware of it. Is now a good time?” Next, create a sense of equality with a statement such as, “If the shoe were on the other foot, I really hope that you would also feel comfortable talking to me about it.” Finally, Senning said it’s helpful to be explicit about your good intentions. Consider phrases such as, “I’m mentioning this because I care about your success. I wouldn’t want something like this to stand in your way or become a problem for you in the office.” Be sure to have the conversation in private and if at all possible, in person. It’s so hard to discern tone in an email. Consider a mentor or helpful older colleague from your past and how they approached advising you, especially when offering unsolicited advice. Senning recalled a time when a colleague helped him buy his first suit. “I couldn’t have done it without her,” he said. “What’s important is how communication serves our relationships. These are techniques that work well for supporting growing relationships. I caution new hires that it is important to pay attention to tradition. These are things that have worked.” At the same time, it’s also important for the more experienced and seasoned pros to operate with a two-way street mentality, because our younger counterparts have a lot to offer us in return for our mentorship. “When that new hire introduces a new document platform for example, listen,” said Senning. “You don’t have to embrace every trend, but being open to change is important.” n Photo Thinkstock
BizNewOrleans.com JUNE 2016
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Columns | Tech Biz
Disaster Recovery: Now’s the time to review your plan.
M Steven Ellis
has spent the last 16 years working at the intersection of business and technology for Bellwether Technology in New Orleans, where he serves as the company’s vice president.
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uch has changed with disaster recovery in the 10-plus years since we got a firsthand lesson from Hurricane Katrina. Server virtualization now makes recovery of many systems much easier and faster than it was, and the rise of the cloud puts more options at our disposal than we could have previously imagined. Hurricane season is officially here, making it a good time to review the current state of disaster recovery solutions. First, a bit of terminology; This article is about disaster recovery, which for our purposes deals with the continuation or recovery of technology systems important to a business following a disaster — as opposed to business continuity, which covers all aspects of
keeping a business running. Any disaster recovery discussion involves the terms Recovery Time Objective (RTO), which is how long it takes to get things up and running, and Recovery Point Objective (RPO), which refers to the time period of lost data. Disaster recovery typically measures RTO and RPO in terms of hours. High availability is yet another topic that deals with RTO and RPO measured in seconds or minutes. Finally, keep in mind that disaster recovery is not the same as backup. While disaster recovery focuses on restoring whole systems, backup focuses on restoring data. If I need to find a deleted email from last month, I need backup. If I need to get my whole email system up and running after a fire in my
building, I need disaster recovery. With that said, there are some products that are designed and able to perform both functions well. My favorite approach to accomplishing disaster recovery is to offload the problem by using applications that are completely managed and hosted by cloud Software as a Service (SAAS) providers. When the right cloud-based application exists for your needs at the right price (and with its own documented disaster recovery plan), I say use it. This approach works very well for email, documents, certain line of business apps, and soon, if not today, phone systems. Of course, there is not yet a SA AS application for every need, and the next best option is to move self-managed legacy applications from servers in your office to resilient data centers or cloud Infrastructure as a Service (IA AS) providers. As before, it’s still important to ensure that your provider and design meet your disaster recovery expectations. The problem here is that many applications just don’t perform very well when hosted remotely. Sometimes using Remote Desktop or Citrix is a fix, but when it’s not, the next approach is to keep applications local and replicate them to the cloud or a branch office. There are many ways to accomplish this, ranging from low-cost solutions that handle one application or server at a time to enterprise solutions that can synch hundreds of servers with automated failover. Assuming your Internet connection is sized appropriately, replication can work well, but it definitely requires good documentation and regular testing to ensure that everything goes as smoothly as possible. Other approaches might include using a completely different application for a particular need during outages, resorting to a single user on a laptop rather than a fully networked application, or forgoing disaster recovery and relying on backup specifically for those applications whose acceptable RTO is high. The good news is that it has never been easier to keep your business going no matter what happens, and if you haven’t reviewed your plan in the last year or two, now is the time. n Photo Thinkstock
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Biz Bits - Industry News Around town
The $7 million, 18,750-square-foot building replaces temporary structures that were set up before and after Hurricane Katrina and was developed with input from the marine industry. It provides Delgado Community College with the ability to be responsive to current marine and industrial training needs. Stanton F. McNeely III, Ed.D, vice chancellor for institutional advancement at Delgado Community College, speaking about the new Delgado Maritime and Industrial Training Center, which opened April 1 at 13200 Old Gentilly Road in New Orleans.
NASA Awards Xavier $5 Million A research project devoted to improving the performance and safety of lithium batteries underway at Xavier University of Louisiana has just been awarded a five-year, $5 million grant from the National Aeronautics and Space Administration (NASA). The project also aims to improve diversity in the STEM (Science, Technology, Engineering and Math) workforce. Xavier is currently the premier institution in graduating African American undergraduates in biology, chemistry and physics. Xavier hosted representatives from all five collaborating partners its National Aeronautics and Space Administration (NASA)-funded lithium battery project. Among the participating principals/mentors and student scholars were: (sitting L-R) Concha Reid (NASA Glenn Research Center), Natalie Hughes, Bethany Tate, Melissia Porter, Jere Williams, and Joshua Hunter; (standing L-R) Dr. Candace Lawrence, Ke’La Kimble, Dr. Jeffrey Fergus (Auburn University), Corey Arnold, Dr. Lamartine Meda, David Phan, Joshua Adkins, Kayla Strong, Joshua Hunter, Dr.Oleg Borodin (US Army Research Laboratory), and Dr. Mehnaaz Ali.
Easiest places to sell a home (According to a recent SmartAsset study)
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Average Years Living in Home
Average Homes with Negative Equity
Homes Decreasing in Value
COMING SOON
Average Days on Market
Home Costs as % of Income
Ease of Sale Index
38.2
23.3%
94.50
Rank
City
1
New Orleans, LA
12.0
13.6%
2
Westwego, LA
17.8
24.5%
n/a
84.2
20.6%
85.03
3
Harvey, LA
14.8
18.8%
38.7%
89.3
23.6%
83.99
2.0%
4
Marrero, LA
17.7
18.3%
43.2%
104.7
21.8%
80.82
5
Luling, LA
17.6
13.4%
n/a
107.3
19.4%
80.30
6
Destrehan, LA
15.6
9.9%
n/a
128.4
20.5%
75.96
7
Gretna, LA
14.5
19.2%
37.1%
176.6
21.7%
66.06
8
Kenner, LA
14.5
10.9%
21.9%
228.1
21.8%
55.49
9
Lacombe, LA
13.7
12.1%
72.8%
255.4
23.2%
49.88
10
Metairie, LA
15.6
7.8%
15.7%
287.5
20.5%
43.28
JUNE 2016 BizNewOrleans.com
Pontchartrain Hotel Originally opened in the 1920s, the Pontchartrain Hotel on 2031 St. Charles Avenue — owned by the city of New Orleans — will receive new life this month thanks to AJ Capital Partners and Besh Restaurant Group. BRG will spearhead the hotel’s food and beverage concepts within its historic Caribbean Room, Bayou Bar, Silver Whistle and new rooftop bar. Sephora National beauty-retail chain Sephora will open its fifth location in Louisiana June 17 at River Chase in Covington. The store will stretch over 2,100 square feet inside the current JCPenney Department Store.
Recent Openings Next Generation Marine Next Generation Marine — one of only two African-American-owned marine transportation companies in the country to own and operate its fleet of vessels — opened its global headquarters at 4728 Utica Street in Metairie. The company expects to hire an additional 60 employees by May 2017, bringing the total employees from 40 to nearly 100. Salaries range from $60,000 for deckhands to six figure salaries for captains.
Whole Foods Market — Mandeville
Hotel and Lodging Industry Feeds the Hungry
On May 18, Whole Foods Market opened its newest Southeast Louisiana store at 3450 Highway 190 in Mandeville. The opening of the 40,000-square-foot store kicked off five community giving days held over five weeks. One percent of net sales will go to the Lake Pontchartrain Basin Foundation on June 8 and WWNO on June 15.
The Greater New Orleans Hotel & Lodging Association (GNOHLA) has launched a new program to feed the city’s hungry. Feed the Need NOLA aims to have industry personnel join in serving approximately 200 meals per week through partnerships with The New Orleans Mission and St. Jude Community Center. The kickoff meal on May 10 at the New Orleans Mission saved the mission and St. Jude $1,000. Annual savings are estimated to reach over $50,000. For more information, visit GNOHLA.com/feedtheneednola.
Moxy New Orleans Marriott International’s new millennial-focused brand of boutique hotels, Moxy Hotels — first launched in Milan in 2014 — opened its newest location at 210 O’Keefe Avenue. Moxy New Orleans features 108 techenabled rooms that feature internet TV, abundant power and USB outlets, motion sensor lighting and mobile check in and check out, along with a host of amenities — including a public space loaded with games — all designed to appeal to younger customers.
Trinity Restaurant SOFAB Honors Tujague’s Honoring the 160th anniversary of the second oldest restaurant in New Orleans, and third oldest continuously operating restaurant in the U.S., the Southern Food and Beverage Museum (SOFAB) unveiled its new exhibit, “Tujague’s: 160 Years of Tradition,” May 21. The exhibit features photos, awards and memorabilia from the restaurant, which is being added to the National Culinary Heritage Register.
The newest restaurant from Kingfish Development owner Hugh Uhalt, Trinity, opened May 11 at 1117 Decatur Street (formerly the home of Maximo’s). The 6,000-squarefoot multi-level indoor/outdoor space includes an open-air Photo Joshua Brasted kitchen, intimate upstairs dining room and balcony seating overlooking the French Quarter. The restaurant will serve New Orleans cuisine by rising chef, Michael Isolani.
We’d love to include your business-related news in next month’s Biz Bits. Please email details to Editorial@BizNewOrleans.com. BizNewOrleans.com JUNE 2016
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A store front restaurant located in the heart of the New Orleans CBD in the InterContinental Hotel, Trenasse’s collaborating chefs focus on Gulf Coast cuisine with a South Louisiana flair. Valet parking, comfortable outdoor seating and a fresh oyster bar surely creates a masterful dining experience.
BizNewOrleans.com JUNE 2016
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Steeped in
Tradition
Luzianne’s father/son tea masters give Biz a peek behind the curtains of a more than $11 billion industry where family ties run deep. By Rebecca Friedman | Photography Jeff Johnston
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I
f you’re pouring yourself a cup of something to quench your thirst today, there’s a good chance it’s tea. Not only is it the second most popular beverage in the world (after water), but consumption of tea here in the U.S. continues to rise. Americans drank more than 80 billion servings in 2015, and we are now the world’s third largest importer of tea (behind Russia and Pakistan) — bringing in 285 million pounds last year alone, according to the Tea Association of the U.S.A. (USTA). There’s no sign of that trend stopping, either, as millennials are increasingly taken with tea — 87 percent of them are tea drinkers, says the USTA. All that tea translates into big money — more than $11.5 billion, or 6 percent of all foodservice beverage spend in 2015. That’s good news for tea producers like Lipton (America’s number-one seller), R.C. Bigelow, Hein Celestial, and Twinings, which lead the U.S. tea market in sales, according to MarketRealist.com. However, there is one particular corner of the market that, though cold, continues to heat up: iced tea, which accounted for 85 percent of all tea consumed in the U.S. last year. At the heart of that sweet spot is Luzianne, America’s No. 2 bag iced tea brand. Owned by New Orleans-based Reily Foods Company (which also counts Blue Plate, CDM and French Market coffees among its many prod-
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1- Left to right: Scott and Malcolm Shalders, tea masters at Luzianne. 2- Luzianne’s production facilities at 5601 Chef Menteur Highway in New Orleans.
uct lines), Luzianne’s history dates back to 1902, when William B. Reily relocated his wholesale grocery business from Monroe to New Orleans and shifted his focus to coffee and tea. Over the next several decades, iced tea skyrocketed in popularity as more consumers had refrigerators in their homes and turned to iced tea to beat the Southern summer heat. Today, Luzianne employs more than 200 people at their offices and production facilities in New Orleans and Knoxville, Tennessee, and their products are available in 51 percent of grocery markets and nationally at Walmart and Dollar General. In addition to tea bags, Luzianne has expanded its product line to include pour and stir concentrate, readyto-drink bottles, and even iced tea K-Cups through a partnership with Keurig Green Mountain. But it takes hard work to ensure that the quality of Luzianne tea remains consistent. That’s where the highly specialized role of tea master comes in. Given that June celebrates National Iced Tea Month, as well as Father’s Day, it seems fitting to profile Luzianne’s father/son duo whose highly trained palates continue a family legacy spanning four generations — and thousands of cups of tea.
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The family tea tree Malcolm Shalders, the director of commodities at Luzianne, remembers making tea even as a six-year-old — and he came by that talent honestly. Shalders came with his family to the U.S. from England at the age of five. His grandfather was a senior buyer for Lipton in Hoboken, New Jersey, and his father spent four years buying tea for Lipton in India before continuing his career in importing and packing tea in the U.S. There was no question in his mind that he would one day follow in the family footsteps. “It’s really a nice business. When you’re a kid, and you’re thinking about what you want to do, that’s pretty much it,” he says. “It’s an artistic kind of business, similar to painting. I’ve always loved when you’re developing a blend — it’s very much like that.” He even has the silver tasting spoon that belonged to his grandfather and father before him. Shalders spent the first 10 years of his career as an importer and a tea buying manager across three companies. He came to Luzianne from upstate New York 21 years ago, where he blended his expertise in hot tea with a new set of skills needed for iced tea. “It’s a totally different industry within an industry,” he says.
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3- In the tasting room all four generations of Shalders tasting spoons are laid out. 4- Scott Shalders inspects tea leaves.
“I knew the teas already, that wasn’t the hard part… You just have to understand what types of tea to use for that blend. The teas we use here are perfect for iced tea.” Shalders’ son, Scott, had a slightly different path to the tea business. Though he recalls drinking tea from a Flintstones baby bottle and pretending to drive forklifts of tea chests around with his brother at their grandfather’s warehouse, Scott did entertain the idea of pursuing a career in computer networking. Eventually, however, what was supposed to be just a summer job at Luzianne became a profession once he discovered the lure of the cupping room where tea is tasted and evaluated. That was 13 years ago, and he hasn’t looked back. Today, Scott is a commodity specialist, and not only a tea master but also Q-certified in Arabica coffee — a designation earned through 22 grueling tests of the palate. Malcolm jokes, “He’s got a very good palate, but he can be a pain in the neck! He’s too strict!” continues page 44
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“I think any buyer should be an importer first. You learn because you’re shipping from other countries. You’re learning the problems. A lot of buyers don’t know the quirks of different countries until it’s too late.” - Malcolm Shalders
An ex acting process The journey of a tea leaf from its country of origin to the Luzianne teabag in your pitcher is a long one, and the Shalders have a hand in nearly every step. The father/son duo constantly monitor global agricultural reports to keep a close eye on anything that might affect their imports, which hail from South America, Africa and Asia. “You have to have that information to know what’s going on in the country, because draughts or too much rain — both affect tea,” says Malcolm. “It’s like a hedge. If you have too much rain, it just f lushes but there’s not a whole lot of quality in it... You have to watch that, and you may have to boost another origin to make up for it.” 44
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Both father and son have spent time working in all aspects of the business, which they think is critical to their success. “I think any buyer should be an importer first,” says Malcolm. “You learn because you’re shipping from other countries. You’re learning the problems. A lot of buyers don’t know the quirks of different countries until it’s too late.” For Malcolm, that might mean always buying three times the inventory he needs from Africa because of inevitable delays in shipping. “You’ve got to watch things like that,” he says. Once Malcolm has bought and contracted a certain tea, Luzianne begins receiving samples for approval. He and Scott analyze those samples for dust, density, clarity and taste. When the full shipment arrives, they will draw six random samples from the containers — each container is a 20-bag pallet, or more than 40,000 pounds of tea. If they aren’t satisfied with what they have received, “it goes right back,” says Malcolm. “We’ve been doing business for a long time. They may not see what we see, but they won’t argue.” The Shalders taste their randomly drawn samples for consistency then put the tea into inventory. Next, Malcolm creates blends based on what has been tasted. A sample is taken after the blend is created, and then it is tasted again in teabag form. “What we are checking at each step is to make sure nothing happened in between those steps,” explains Scott, who tastes five tables of tea and coffee a day. With 32 cups per table, that’s approximately 160 cups a day.
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The goal of the tea blend is consistency and clarity. “The end cup has to be consistent,” says Malcolm. “When it leaves here, it’s really good.”
Tea trends One of the most significant developments that the Shalders are currently observing in the industry is the growing demand for ‘traceability.’ “Everybody wants to know where it came from,” says Malcolm. “It’s not a hard thing in the industry because we can trace it back to the garden without a problem. But that seems to be the big thing.” Another issue tea producers are grappling with is the cost of ‘plucking’ the tea, as laborers move away from the tea industry to find better jobs in cities. “They are having a hard time holding people there to do this labor,” says Malcolm. While automation will solve the problem in some tea producing countries, others are restricted by factors such as geography. “Probably 20 percent of the world won’t be able to automate,” says Malcolm. “India is too hilly to do anything like that by machine. That will be one thing on the growing side that is a challenge.” On a positive note, consumers, particularly millennials, are increasingly attracted to the health benefits of tea, something
3- The Luzianne warehouse stores approximately 11,000 bags of tea. 4- Tea bagging and boxing machines produce 107 tea bags per minute.
the Shalders are keen to promote. Though many people associate green tea with health, Malcolm asserts that both green and black are very healthy. “It has always been that green tea is the one people look at as far as health because it’s easier to measure antioxidants in green tea,” says Malcolm. “But black has a lot too, it is just harder to measure. All tea is good for you!” The Shalders also note that millennial consumers are more interested in specialty teas. “They like the different tastes, because there are so many different teas,” says Malcolm. “There are probably 1,200 different teas you can get from all over the world.” He and Scott do lament the change in certain aspects of tea culture. “It’s an art,” says Scott. “In China and Japan, they took time in preparing tea. It was a ritual, a ceremony. Now we put it in a pod and into a machine.” “A lot of people just don’t want to take the time,” adds Malcolm. “I remember my uncle couldn’t believe it when he had to drink tea with a teabag!” BizNewOrleans.com JUNE 2016
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A tightly knit community Both father and son value the close camaraderie among fellow tea professionals. “I’ve grown up with all my suppliers,” says Malcolm. “We’ve known each other for 40 years, and they really don’t change. They may change companies, but they don’t leave the business. At my first convention, when I was 25 or 26, I ran into the secretary at Lipton who got the Telex when I was born. So that’s how old the industry is. It’s very small.” “I look at it as a family because we know all the tea suppliers,” adds Scott. “I’ve known them since I was eight.” And while Malcolm admits that it may have been “hard to get used to at first,” he thoroughly enjoys working alongside his son every day. “He really knows what he is doing.” Scott couldn’t agree more. “I think it’s easier working with him. We discuss everything and we can get the job done better.” Malcolm doesn’t see retirement anywhere on the horizon — he even appears in Luzianne’s latest television commercial. “Tea is both my hobby and my job,” he says. Scott feels the same, whether he’s meticulously tasting a table of tea in the office or brewing special Ceylon with friends at home.
A Luzianne employee checks the weight of larger tea bags sold to restaurants.
For the Shalders, Father’s Day has a special and unique significance. When Scott was three years old, he was diagnosed with leukemia. At the age of six, he relapsed and needed a bone marrow transplant. He spent a month in an isolation unit at Memorial Sloan Kettering Cancer Center in New York, and the family was thrilled when Scott’s younger brother, Nick, was found to be a donor match. As Malcolm recalls, “Scott had chemotherapy, radiation – they broke all the cells down to nothing. We kept - Scott Shalders watching them every day, testing to see if they were coming back. They were hoping the cells would start growing and reproducing. His counts started coming on Father’s Day. That was 26 years ago. I am so very proud of him because he went through an awful lot back then, and to get to where he is today is fantastic. That’s my Father’s Day. I think of it every year.” n
“I look at it as a family because we know all the tea suppliers. I’ve known them since I was eight.”
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Entrepreneurship With a Safety Net
Photo Jeff Strout 48
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franchise consultant Ted Fireman is seeing local demand for business opportunities grow — Could a franchise be your ticket to a new start? By Chris Price
A
midst economic uncertainty people look for ways to increase their financial security. From oil field workers let go due to Louisiana’s declining oil and gas industry, to former stay-at-home parents looking to enter the workforce, to those looking to escape the malaise of the corporate world, to retirees and investors, a New Orleans-based franchisee headhunter is seeing an increase in the number of people interested in owning a franchise business. There are more than 3,100 franchise concepts available today in almost 300 industries. They employ more than 21 million people and generate more than $2.3 trillion dollars in revenue per year. Opportunities include hotels, automotive and repair, business services, cleaning services, restaurants, educational services, health and fitness, senior care and pet care among others. Ted Fireman is the New Orleans area consultant for FranNet, a national consulting company paid by franchisors to find prospective franchisees. After more than 20 years in the corporate world, Fireman purchased FranNet Louisiana five years ago and has since provided free guidance and coaching to more than 200 individuals interested in exploring franchise business ownership in the Greater New Orleans area. Fireman recently spoke with Biz New Orleans about franchises, why they are an attractive option and the steps he takes to successfully match a potential investor with the right franchise.
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newsletters, a toll free phone number for technical assistance, and periodic workshops or seminars and advice on management, marketing or personnel.
Biz New Orleans: Why franchise? Ted Fireman: I think a quick answer is that people who want to increase their chance to succeed want to go with a proven system. Somebody else has already made mistakes, probably wasted time, probably lost money. They have the chance to avoid that and get off to a faster start with a good system that’s already been developed. Plus, any good franchisor knows its market and looks very carefully before they’re going to award a franchise. A franchise company is successful only if the franchise owner is successful. So they’re not looking to sell a franchise unless they have really looked at the demographics and feel strongly that it matches what they need to be successful. If it’s the right franchise matched with the right person, that’s a real recipe for success. Biz: What types of franchises are available? TF: There really are franchises in every sector, pretty much any type of business. People are very familiar, of course, with fast food and restaurants because that’s what they see when they’re driving to work every day. But there really is a wide range of franchises. Biz: How much does it cost to franchise? TF: It really depends on the business. There will be a franchise fee, which may cost several thousand dollars, to operate a business plus business operating costs. The franchise fee gives the investor the right to use the company name and trademarks, a uniform operating system developed by the company, and training in the system. Some franchisors offer ongoing support such as monthly 50
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Biz: What types do you recommend? TF: I focus on franchises that are need-based, things that people need to use over and over again every day. Usually this kind of thing is safer, and it’s going to create recurring income. It’s not a one time product or service. I also tend to focus on the demographic megatrends. I don’t want to show concepts to my clients that are going to be popular today but don’t have staying power. When I talk about major demographic megatrends, I’m talking about things like health care, aging and time saving in the home or business. We know that healthcare is always going to be needed, and it’s only going to increase. We know that the Baby Boomer generation includes 70 million people, and they’re going to need more healthcare and more services related to their aging process. There are also time saving services; With as busy as we all are today, in most households everybody works. Things that people used to do themselves, they don’t want to do anymore. That might be anything from painting, to cleaning to repairs. In an office, that might be outsourcing the IT functions because somebody doesn’t want to spend the money to have an IT director, or it might be sales training. It can be a variety of things that save the individual or the company time and let them focus on the core business. Staffing companies have now moved into niches. It used to be when you thought about staffing you would only think about factory workers and administrative folks, but today there are companies that specialize in in the healthcare industry, in education and all the professions. Another major area that is doing very well is fitness. These are not big-box gyms, but smaller niches based on martial arts, boxing or yoga that might be in a storefront, a 1,500-square-foot space. There’ve been a lot of places that have opened, but I think there’s still room for more. The pet industry is another sector that has seen continued growth. People love their pets, and the spending that goes on is just unbelievable. Not surprisingly, car care is another industry that does well in New Orleans. They say that the average car in the country today is 11 years old. I don’t know if our cars are older or it’s making us deal with all the bumps in the roads, but one of the franchise companies that I’ve worked for has told me that a number of their top-performing franchises in the whole country are in Louisiana. Biz: Are there any that you shy away from? TF: Restaurants and fast food. The restaurant sector is very hard in parts of New Orleans because it is such an amazing and unique place for restaurants. So I think some of the franchise restaurants that might be successful in the Midwest or someplace else are just not going to be too exciting here. With restaurants, the investment and the risk are higher, so the failure rate is higher, and the growth potential just isn’t as great. There is generally a bigger capital investment with a restaurant because you’re dealing with real estate and equipment and a lot of employees.
Shortcut to success
The importance of the Franchise Disclosure Document For anyone interested in franchise ownership, one of the most important elements in getting off to a successful start is obtaining and understanding the chain’s Franchise Disclosure Document (FDD). Franchising is overseen and regulated by the government, and an FDD is a requirement of the Federal Trade Commission. It has a wealth of information, which is updated annually, and must be furnished to a potential franchisee at least 14 days before any purchase “It includes everything – the history of the company, the background of the owners,” says Ted Fireman, the New Orleans area consultant for FranNet, a consulting company paid by franchisors to find prospective franchisees. “It tells you if there has ever been any legal action against the company, exactly how much money it will cost to get the business started – not just the franchise fee, but the total investment. Are there any continuing royalty payments? If so, how much? It’s outlined in there. It tells you the obligations that you will have to the franchise company and the obligations that they will have to you.” Fireman suggests potential investors thoroughly review the company’s background information with a franchise attorney to help them understand the subtleties of the business model. One of the most valuable aspects of the FDD is the contact information of franchisees in the business who can discuss their experiences with potential investors. This gives a potential partner the opportunity to ask: n
What is the annual return on investment?
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How long did it take before the franchise broke even?
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Did the franchisor provide proper training?
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What management, tech and other assistance does the franchisor offer?
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What are the day-to-day duties and responsibilities of the business?
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What controls does the franchisor impose?
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If you had it to do over, would you do it again?
“Where the rubber meets the road is when franchise candidates talk to individual franchise owners and people that can tell them what they do everyday to be successful,” Fireman said. “They can tell a potential franchisee whether the franchise company has kept up its promises and helped them with marketing and training and support and IT and everything else. The franchisor is going to talk to the potential client about all they can do, but then it’s the individual franchise owners who can validate that the company will keep their promises.”
I don’t want to characterize the whole industry and say nobody can bring a franchise to New Orleans in that sector, but we feel there are better opportunities with less risk and a higher rate of return. Biz: Is there such a thing as a typical franchisee? TF: There used to be a time that I mainly worked with men in their mid-40s to late 50s who had been downsized from a corporate environment. That was kind of the way it was for long time, kind of the national profile. It has always been a lot more diverse in New Orleans. Over half of my clients have been women — many times women that are returning to the workforce after maybe having stayed home with kids for a while and they don’t want to go back into the corporate thing. They want a little more f lexibility and a little more control. Right now, not surprisingly, I’m starting to see more people from the oil and gas sector who have been downsized. continues page 52
Investing for Retirement Native New Orleanian Dede Redfearn turned to franchising to supplement her golden years. Dede Redfearn has always loved helping people. “I was a special education teacher for 10 years, spent time as an administrator for nonprofits and worked as a licensed clinical social worker,” she says. Redfearn and her husband became interested in franchising as a retirement investment. “I associated franchises mostly with fast food, but that is so far from the truth,” she says. “I went to this presentation by Ted [Fireman] and he showed us about 10 or 15 different opportunities that showed a really incredible range of businesses. “Zounds Hearing was actually the first company I looked at and I immediately like it,” she says. “I loved that it would allow me to keep doing what I love to do — help people improve their quality of life.” Redfearn decided to bring the fastest-growing hearing aid company in the U.S. to 801 Veterans Memorial Blvd. in Metairie. “We provide thorough hearing assessments that help us determine the best hearing solution,” she says. “You can actually come in and be tested and fitted for a hearing aid in the same day.” Redfearn says she was attracted to franchising because of the support it would give her as a business owner. She says she hasn’t been disappointed. “There was a lot of support in the beginning,” she says. “When I went looking for a storefront the corporate office provided me with a list of guidelines and things to consider and then when I had found some possibilities, someone from corporate actually came down and looked at them with us.” Redfearn says she and her husband attended a week-long training prior to the opening of their 1,000 square-foot store and still receive support as needed. “I’ve really been happy with the whole experience,” she says. “And I love the fact that we have a business so focused on relationships. We encourage our clients to stay in communication with us, to come in for cleanings and to make adjustments as needed.”
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Another category that’s surprised me is investors. I’m seeing a lot more people who used to invest in the stock market, and because the stock market has been so erratic in the last year or two, I’ve had more people come to me to look at owning a franchise as an investment strategy, a diversification strategy really. They’re not going to take all of their money out of the stock market, but they will take some percentage of it and look for the kind of business that they can be what we call a semi-absentee owner, meaning that they can manage the manager. They’re not going to work day to day in the business, but they’re going to hire a good manager. They’re going to have them trained by the franchise company. And the owner is going to oversee them, meet with them once a week, handle the marketing and make sure the systems are implemented. But they are not going to be the day-today operator. I’ve seen a bunch of people go that route. I’ve also seen people, in kind of a related trend, who want to keep their job, but start a semi-absentee franchise on the side. So if they’ve got a good job and benefits, they don’t want to walk away from it. But they know that they’re not building a sellable asset in their job. They like the idea of a part-time business that they can build up and maybe transition into fulltime later. For some, they look at it as an insurance policy in case they get laid off. They’ve also got the option to keep it into their retirement years as an extra source of income. Biz: What traits, if any, do franchisees share? TF: I think the number one trait is that they want to feel more in control of their career and finances. So many people, particularly once they get into their 40s or older, face the possibility of being laid off and they realize that there’s no security in their job anymore. So people like the idea of being their own boss and feeling a little bit more in control of their career and their finances. These are people who are entrepreneurial, but they don’t necessarily have that one great idea. They’re not Bill Gates or Steve Jobs or Mark Zuckerburg, whose ideas change the world. They know they would like to own a business, but they’re a little more conservative. They want to do it as safely as they can. So they’re not going for the moon shot. They’re looking for a stable business that will do well whether the economy is good or bad. They’re not looking to be the next billionaire, they just want to create a good strong business that’s going to grow. They’re entrepreneurs. They just want a safety net. I think the franchise provides that safety net. Biz: Can anyone succeed as a franchisee? TF: Not all franchises have that proven record of success and it’s important for somebody to do their homework carefully and make sure that it’s not only a great franchise but that it really is a match for that individual. One of the most important steps an interested investor can take in evaluating a franchise opportunity is examining their own skills, abilities and experience. They need to determine their goals and their ability and willingness to meet those goals. What are the qualifications? Am I qualified? What are the sacrifices and risks associated? How will this affect my time? My family? If you are not prepared for the total commitment of time, energy and financial resources that any business requires, you should stop and reconsider your decision to enter the franchise business. n
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The Smith Success Story After becoming a franchisor with commercial cleaning giant Jan-Pro, Charles and Melissa Smith are cleaning up. After more than 20 years in the business community of Southeast Louisiana, Charles W. Smith Jr. was ready for a change. “I was a six-figure guy who was really talented and successful at growing businesses for other people, but I was at a point where I was capped as far as where I could go as an employee,” he says. “I had been coaching and mentoring for the better part of 15 years and I knew I could have a much more tremendous impact. Smith says he paired up with Fireman and FRANNET and looked at approximately eight to 10 different franchise opportunities over a two-year period. “Finally, we found Jan-Pro,” he says. “And I knew this was the one. Smith and his wife, Melissa G. Smith, are actually franchisors who run all of Jan-Pros in Southeast Louisiana. “We have rights to all of Louisiana and are actively growing,” Charles says. Named the No. 1 fastest growing franchise company in the U.S. by Entrepreneur Magazine in 2013, the commercial cleaning company just awarded the Smiths with its International Rising Star Award this year. “We had one of the fastest first year starts in the company’s 25 year history,” Charles explains. “We opened 25 franchises in our first year and currently have 55. In September we’ll hit our company’s two-year anniversary and we just hit $2 million in revenue.” Charles says that 70 percent of his franchises clients are medical companies, while the remaining 30 percent run the gamut — from car dealerships to law offices, to industrial. “We are a very process-driven cleaning company is very focused on disinfection, which makes us a popular choice for medical establishments,” he says. Charles says he’s very happy with the move to franchise life. “I love being able to help people succeed,” he says. “No matter the investment, I can help you. I’ve helped eight people so far with approximately an $850 investment create six figure businesses.
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Perspectives A closer look at hot topics in three southeast Louisiana industries
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Perspectives | Insurance
Are You Ready? Hurricane Season is here — is your business prepared? By Pamelas Marquis
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Photo Thinkstock
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n June 1, it begins again — the anticipation, the anxiety, the wondering if this year a hurricane will once again at best disrupt, or at worst destroy our lives. The Atlantic hurricane season runs from June 1 to November 30 and the Tropical Meteorology Project from Colorado State University (CSU) predicts that this season we will have a total of 13 named storms, including five hurricanes, two of which are expected to be major. When discussing past hurricanes, many Gulf Coast residents look to Betsy, Camille and Katrina as benchmarks. Together, these three storms changed the lives of millions and effected devastating losses. A 2015 Federal Emergency Management Agency mitigation assessment team report places damages for these storms (adjusted to 2015) as follows: 1965’s Betsy — $10 to $12 billion; 1969’s Camille — $7 billion; and 2005’s Katrina — $125 billion in economic loss. “Across six states there was $41 billion in insured losses due to Hurricane Katrina,” says Thomas McMahon Jr., president and CEO of Eustis Insurance & Benefits. “Combined, Hurricanes Katrina and Rita accounted for $29 billion in insured losses in Louisiana alone, and these figures exclude flood losses.” A study conducted by James Richardson, an economics professor at Louisiana State University, found that in the wake of Hurricane Katrina, 11 percent of homes in the New Orleans area alone were destroyed or deemed uninhabitable. Throughout Louisiana, nearly 18 percent of businesses were in a similar state. Businesses large and small felt the economic impact of Katrina’s wrath, and with another hurricane season upon us, now is the time to plan for the worst. Since Katrina, new maps have replaced those from 1995 and now account for improvements and upgrades in drainage canals, pump stations and levees. In new ‘X’ zones, flood insurance will now be optional instead of required for most mortgages. Property owners can quickly determine if their rates have changed by going to maps.riskmap6.com/LA/Orleans/ for Orleans Parish or maps. riskmap6.com/LA/Jefferson/ for Jefferson Parish. Business owners should be aware, however, of the limits of their property insurance. “It is always important to keep in mind that property insurance does not cover f lood damages,” says McMahon. Businesses should also have their building(s) inspected by a licensed professional, such as a structural engineer, to find out if their workplace is vulnerable to hurricane-force winds and what may be recommended in retrofits.
Review Insurance Policies “In springtime, check everything,” says McMahon. “Review all your policies: f lood, property and interrupted business. And make sure you’ve updated all of your equipment. For example, what do you currently have on your yard? Have you covered that new forklift?” Mark Dufour, a certified insurance counselor with Clockwork Insurance Services, agrees that it is important for businesses to have a complete inventory list and that they need to document and photograph all of their equipment, supplies and even their workplace.
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“It is important to be on the lookout and be prepared. Make sure you are fiscally protected and have the proper coverage with a deductible you can afford.” Rev. Tony Talavera, owner of the French Quarter Wedding Chapel, says his business was hit hard by Katrina. “We were canceling weddings on the way out the door,” he says. “We usually don’t offer refunds, but we returned $20,000 in deposits alone for Katrina.” “The other equally important part,” says Doug Mills, with Gillis Ellis & Baker, “is making sure you have coverage for the expenses needed to restart your business. If you’re evacuated or closed for a time, you may have to rent temporary office space, relocate employees or advertise to reach clients. The right policy anticipates and covers these costs.”
“It’s important to keep accurate inventory records,” he says. “Take into account things such as your business’s furnishings, your stock on the shelves and your computers. Also, have a redundant list that you keep on a jump drive or in a safe deposit box. I always preach that if you have all of this available, it’s much easier and faster for us to pay your claim.” “At the time of Katrina we only had two businesses,” says Jennifer Weishaupt, owner of Ruby Slipper Café. “We had a real estate rental business, State Street Management Group LLC, and Mid-City Restorations, LLC. We had three properties that sustained wind and flood damage, and all were adequately insured. We learned from that experience the value of adequate insurance coverage and routine reviews of coverage.” Weishaupt works with Dufour, who recommends businesses at the very least review all of their policies annually. “Bigger businesses should review quarterly or twice a year,” says Dufour. “You need to sit down with your agent and make sure you have adequate coverage for your exposure. Things change, business owners get caught up in the business of running their businesses. We want to make sure everything is correct and updated and that you are protected.”
Protect Business Data
When disaster strikes, it’s important to know who to call and what information you’ll need to provide. “Make sure to have your policy number, if not memorized, close at hand,” says McMahon. “And have your insurance agent’s number so you can reach him immediately. You want to make sure to be on the top of the claim stack.”
Businesses should protect their data with backup files. It’s also important to prioritize servers and mission-critical apps because not all servers in a computer room are of equal importance to a business. “We weren’t prepared,” says Talavera. “I loaded up cats, dogs and even my mother-in-law into the car and hit the road. At the time, we had three computer towers and we had to pack them into the car too. Now we back up all of our info and use laptops. It’s so much easier.”
Interruption of business
Have Cash On Hand
Business interruption and contingent business interruption are also insurance options to consider. Business interruption insurance covers businesses for losses stemming from unavoidable interruptions in their daily operations as a result of physical damage. “Business interruption insurance was an ‘overlooked’ coverage prior to Katrina,” says Trey Maddox with Morrison Insurance Agency. “Many business owners could have been paid for the time they were displaced if they had had business interruption included in their property policy.” McMahon agrees that after property loss, the loss of income is an important factor to consider when reviewing insurance policies. “You could lose your income stream up to six months,” he says
Another suggestion to prepare for a hurricane is to make sure your business obtains sufficient cash for business operations. Keep in mind that banks and ATMs won’t be in operation without electricity and few stores will be able to accept credit cards or personal checks. “Our bank was underwater,” says Talavera. “It was very challenging.”
Insurance Contact Info
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Recovery Plan It is critical for businesses to have a disaster recovery plan in place and for all departments to be able to communicate and coordinate. Photos Thinkstock
A Few Helpful Resources Check out the full JEDCO Hurricane Preparation for Businesses Checklist at Jedco.org/2016/06/hurricane-prep-for-businesses/ for more on what to do before, during, and after a storm. A good resource for personal and business hurricane preparation is “A Season of Resilience,” by the Episcopal Relief and Development — a new resource designed to encourage developing disaster preparedness in small steps. Each week for five weeks, individuals are asked to take on small tasks or small purchases to build up their emergency kits. Edola.org/preparing-for-hurricane-season-2016-things-to-do-the-firstweek-of-may/ “Living With Hurricanes,” a guide developed by the LSU AgCenter, includes information on planning for wind and water damage, preparing emergency supplies and items needed for evacuation, and developing a family emergency plan. The guide, which is available online in the Publications section of www.lsuagcenter.com or the special hurricane section of that site at www.lsuagcenter.com/hurricanes, provides details on the extent of damage wind and storm surges can inflict on property.
Katrina helped kick-start Mullin Landscape Associates. The company was started in February 2007, during the peak of the rebuilding effort. “I’d suggest that businesses have a hurricane preparation plan,” says owner Chase Mullin. “Within that, they should have all team members’ contacts, as well as a plan for clients to be able to contact them. Primarily, we encourage all employees to evacuate or seek safe shelter, and we developed a plan to get people back in place post-hurricane.” Jennifer Weishaupt agrees. “We currently have more than 200 employees, so in the case of a storm, we have a call/text hierarchy so employees can report their whereabouts and status.” It is also important for businesses to contact their customers and suppliers and share your communications and recovery plan in advance with them. “We opened just three months after Katrina hit, but our biggest challenge was to keep serving our clients who were located all over the country,” says Kathleen Turpel, owner of Imaginal Marketing Group.
Be Adaptable Talavera says the most important thing is to be adaptable. “We couldn’t do weddings for a long time after Katrina and that’s our business, so we moved things out and began renting cots,” he says. “We also added washers and dryers and a vending machine.” He says he’s learned from the past and is much better prepared for another bad storm. “We now have a motor home, a generator and laptops. We still may not have the best insurance, but it’s what we can afford.” McMahon cautions that businesses not look to past hurricanes for guidance. “You know humans tend to look back,” he says. “They prepare for the future based on the past. So before Katrina, people looked at Betsy or Camille and said we didn’t flood then, so we won’t flood this time. But that may not be true because storms are unpredictable. No two storms are the same, so you have to hope for the best and prepare for the worst.” n BizNewOrleans.com JUNE 2016
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Perspectives | Healthcare
More Than Just a Bad Day Depression costs business hundreds of billions every year. By Carolyn Heneghan
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he intangibility of depression often eludes those who suffer from it, especially when they are afraid to discuss their illness with others. But depression has very real and measurable costs when left untreated—especially in the workplace. According to a study published in The Journal of Clinical Psychiatry last year, the economic costs of major depressive disorder was $210.5 billion in 2010, a 21.5 percent increase over 2005. About half of those costs were workplace-related, such as absenteeism and lost productivity. And that doesn’t include the costs derived from 60
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other related diseases on the mental illness spectrum. To operate more effectively and improve their bottom lines, businesses need to recognize the economic impact of depression and alleviate the stigma that surrounds it in the workplace.
Direct vs. Indirect Costs Depression can have both direct and indirect costs on a business. Direct costs primarily entail expenses for physical and mental healthcare services, medications, short- and long-term
Illustration Jrcasas
Depression in the Workplace: By the Numbers Depression has tangible economic costs in the workplace. These statistics illustrate the impact mental health has on business: n $210.5 billion - Economic burden of major depressive disorder (MDD) in the U.S. as of 2010 n
21.5% - How much the economic burden of MDD rose from 2005 to 2010
n 50% - How much of the economic burden was related to workplace costs, such as absenteeism and lost productivity, in 2010
38% - How much of the total costs were due to MDD itself as opposed to comorbid conditions
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n $4.70 - How much is spent on direct and indirect costs of related illnesses per each $1 spent treating depression
Over 80% - How much of lost productivity costs were due to reduced performance while at work rather than being absent n
Less than one-third - How many adults with a diagnosable mental illness receive treatment in a given year n
3 - How many more times people with untreated mental illness use non-psychiatric inpatient and outpatient services than those who receive treatment n
2.2 - How many hours of productivity people suffering from depression or anxiety lose per workday due to mental illness n
86% - Percentage of employees who took antidepressant medications to treat their depression and reported that their performance at work improved n
disability, and other expenses related to the care of the employee. When someone has a diagnosable mental illness but does not undergo treatment, that employee can end up costing the business more for non-mental healthcare needs. People with untreated mental health issues use inpatient and outpatient services three times as much as those receiving treatment, according to a report published in Drug Benefit Trends. Businesses can mitigate or avoid many of these direct costs of depression through preventive measures, early intervention and quality treatment. As much as direct healthcare costs can impact a business’s bottom line, however, the indirect costs of depression, anxiety and other diseases on the mental illness spectrum can have an even more powerful negative impact. The most common indirect costs to a business associated with depression and mental illness are absenteeism, lost productivity, employee turnover, lack of employee satisfaction, disability, increased workers’ compensation claims and safety issues. The economic burden of depression study found that about 50 percent of depression-related costs were workplace-related. “You start putting these numbers together here, and it really has a dramatic impact on one’s bottom line,” said Dennis Miller, motivational speaker, leadership coach and author of “Moppin’ Floors to CEO,” his personal story about overcoming depression as a high-powered CEO.
The Culture of Fear Despite the very real costs of depression, many businesses grapple with what Arwen Podesta, MD, a psychiatrist and owner of Podesta BizNewOrleans.com JUNE 2016
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Wellness, defines as “the culture of fear.” In these businesses, employees and management are unable to communicate any concerns with their superiors because they fear being punished, written up or subject to other negative consequences. Statements like “snap out of it” or “get over it” fuel the stigma, while statements that people with a mental illness are crazy or incapable of doing their jobs prevent employees and management from being open about their struggles with mental illness.
Dispelling the Stigma Depression and anxiety may be labeled as mental illnesses, but they are just as much medical illnesses as heart disease or cancer. If someone shares news of his cancer diagnosis with his coworkers or boss, he may not fear the same stigma as if he were to share news of his bipolar disorder diagnosis. Promoting the idea that mental illnesses are ailments of the brain, just as a disease might affect any other part of the body, can help alleviate the stigma in the workplace. Depression, anxiety disorders and substance abuse are actually among the most common medical illnesses, according to the American Psychiatric Foundation, and may be much more common than many people realize. It is only the stigma that surrounds mental illness that keeps it from seeming less common than it really is. Understanding that depression and mental illness impact most people—if not directly, then through the experiences of a family member, friend or coworker—can also relieve the stigma. “We need to realize that it’s a common part of our lives today, but we can make it better,” said Miller. “We can cope better; we can function better. We can have better employees and employers and be better spouses and parents. It needs a national effort to destigmatize it.” 62
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On the Lookout: Warning Signs for Depression When it comes to alleviating depression in the workplace, early identification and intervention are key. Workers should learn to recognize the warning signs of depression, but management and coworkers can also encourage individuals to seek treatment or other assistance. n
Increased absenteeism
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Frequent lateness to work and meetings
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Decreased level of output
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Decreased quality of work, such as less accuracy,
less creativity or messy presentation n
Less engagement with coworkers, management and work itself
(more withdrawn) n
Talk or complaints about needing to take time off work without
an external motivator n
Looking unkempt, such as dirty clothes or poor hygiene
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Fatigue or napping, such as falling asleep in meetings
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Persistent sad, anxious or “empty” mood
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Significant appetite or weight changes (loss or gain)
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Increased irritability or hotheadedness
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Persistent physical symptoms, such as headaches, chronic pain
or digestive disorders, that don’t respond to medical treatment
Illustration Jrcasas
Tips for Businesses to Alleviate Costs of Depression The costs of depression in the workplace are as tangible as faulty IT systems or poorly targeted marketing campaigns. But what can businesses do to alleviate those costs and create a more mentally-healthy workplace? n
Dispel the culture of fear when it comes to mental health issues in the
workplace. n
Alleviate the stigma surrounding mental health by encouraging open
communication about depression, anxiety and workplace concerns. n
Encourage transparency about mental illness from the top, such
as having upper management share any experience they’ve had with depression, whether personally or with a family member, friend or coworker. n
Include mental health programs in company health events, such as
mental health presentations and depression screenings. n
Host seminars with mental health experts about improving work-life
balance and other workplace-related triggers of depression. n
Clearly define each employee’s responsibilities and expectations
for his or her performance. Without a clear job description and set of expectations to aspire to, confusion can lead to depression. n
Handle any instances of harassment (physical, verbal or sexual) or
bullying quickly and firmly, and make company policy on the issues wellknown. n
Host wellness challenges, such as a FitBit or healthy eating challenge, to
engage employees in activities that improve physical and mental health. n
When catering lunch or a work meeting, skip the fast food and sugary
snacks in lieu of healthier choices, such as lean proteins, vegetables, fruits and nuts.
Miller and Podesta agree that one crucial way to destigmatize mental illness is by upper management being more open about their own experiences. They can serve as an example of how to directly or indirectly cope with mental illness and/or demonstrate that mental illness can impact anyone at all levels of a business. “What we need to do to end the stigma is not just tell people facts,” said Miller. “People need to begin to speak up, even chief executives. […] We can destigmatize it by the more we talk about our own story.” “A huge piece that we need to transform, because the stigma is so high, is to be able to have some transparency from the top levels,” said Podesta. “If someone does that, it’s amazing how the culture changes, and people are more apt to get help instead of hide.” The worst way to deal with costs of depression and mental illness in the workplace is to ignore the damage it’s causing or pretend that it doesn’t exist. Depression, if treated like any other cost in the workplace, can be handled in a smart and professional way that benefits both employees and the business’ bottom line. “If our IT problems or our communication vehicles or websites were causing our companies to not have the ROI they wanted, they would be fixed,” said Miller. “You have to look at the economics of depression and treat it as an economic issue, just as you would with anything else.” n
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Perspectives | Accounting
Another One Percent A look at how the recent sales tax change will affect business. By Suzanne Ferrara
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he business community is crying foul about the new 1-cent sales tax that went into effect April 1. Gov. John Bel Edwards reluctantly supported the additional tax, which increases the 4-cent sales tax to 5 cents, describing it as a last resort to avoid major program cuts.
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Photo Thinkstock
In addition to the tax hike, several exemptions are no longer valid, which in turn is causing a huge headache for business operators scrambling to figure out what they need to do in order to be compliant. Louisiana now has one of the highest combined sales tax rates in the country because of the abrupt changes. While the increase is expected to immediately fill budget holes with an anticipated $300 million collected over its lifespan (the sales-tax increase has a sunset date of June 30, 2018), business owners are leery the temporary tax won’t really be temporary. Gary Dressler, CPA, associate director of Postlethwaite and Netterville, and one of the leading experts on Louisiana state and local tax, says he has seen this happen before. “Our state suspended many sales-tax exemptions for one year in 1988 and that suspension was not fully lifted until 2009,” he says. “We don’t need this to happen again.”
“In the end, the businesses here will not see a change in the consumer’s spending habits based upon the one-percent increase in the sales tax rate.” - Matthew Person, Person Huff CPA Group That fear is ringing loudly in the ears of accountants who service business owners. “The comment I hear is, ‘Hopefully this will last only 18 months and no more,’ ” says Miriam Brown with Brown Tax Service. Business’s concerns, coupled with frustrated retailers who feel they are unfairly taking the fall for a short-term fix to a long-term problem, has resulted in some anger. “There has been quite an uproar and a lot of unfavorable response,” says Debbie Brockley, with LaPorte CPAs and Business Advisors. The combination of a sluggish economy, topped off by fierce competition and now the hasty tax increase, has business owners feeling the choke hold is tightening. “My personal opinion is that [the tax increase] is not wise at this time; however, it was the only realistic way for the state to raise immediate funds for balancing the budget,” says Dressler. “It is not wise because it represents an increase in the price of a significant amount of purchases for both businesses and individuals.” Business operators will also now have to pay taxes on utilities and manufacturing machinery and equipment — increases which will naturally affect their bottom line. But this may be a small fraction of the adverse economic impact. “The increased tax liability and additional cost of compliance could curb spending and slow economic growth, prompting businesses to shelve plans for hiring and making new capital investment,” says Kristian Gerrets, tax manager of Bourgeois Bennett. Brockley feels that everyone will be affected. “It is creating higher fees for customers, additional administrative expenses for BizNewOrleans.com JUNE 2016
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companies, and additional legal and accounting fees for counsel.” Some economists believe consumers may hold off on purchasing big ticket items for a while, but there are those who predict there won’t be a significant change in spending habits.
“Our tax system is considered dysfunctional by many, and there is now significant discussion, study and motivation to fix it.” - Gary Dressler, CPA, associate director Postlethwaite and Netterville
Staying Ahead of the Tax Game Local business advisers and CPAs offer the following advice to companies looking for clarity and direction with the new tax laws: 1- Seek advice from a professional, such as an accredited CPA or business adviser to prevent sales tax liabilities and keep overhead expenses in check.
“In the end, the businesses here will not see a change in the consumer’s spending habits based upon the one-percent increase in the sales tax rate,” says Matthew Person, with Person Huff CPA Group. Brown adds the same sentiment. “Personally, I do not think the 1 percent tax increase will affect businesses.” There’s also what many call an unfair trade advantage by internet entities looming over retailers’ heads due to the fact that, despite consumers being subject to both a sales and use tax in the virtual world, the actual collection of those taxes has been an ongoing challenge. “Most taxpayers ignore that tax line on their personal income tax return for Louisiana where you are to self-report all those purchases from those online retailers,” says Person. “So until the state can find a way to get better compliance from consumers or require those online retailers to collect the sales tax at the point of sale, you will continue to see more people shopping online to save that local sales tax that the local retailer has to charge.” The effects of the sales-tax increase run the gamut from the guy selling pipes in the oilfield to nonprofits, the latter of which will need to be well-versed on tax preparation due to these changes. Dressler says the changes for nonprofits are significant in the fundraising arena. “Generally, admissions to events and sales during the event will become taxable. The nonprofits are having to decide whether to raise prices to cover the sales tax or to pay the sales tax out of the proceeds, which would reduce the amount of money the event may generally realize.” Above all, it’s the exemption suspensions and their scheduled timetables that have triggered mass confusion and headaches for business operators. “Many of our clients are definitely whirling from the increased compliance and reporting duties associated with the recent sales tax changes,” says Gerrets. Greg Beyer, a director of tax services with LaPorte CPAs and Business Advisors, concurs, and says the new policies have led to a high level of frustration. “For a lot of our clients, there has been confusion on what is subject to the additional taxes,” Beyer says. “Also, these changes create an additional administrative burden as companies must determine 66
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2- If you sell exempt items or sell products to exempt consumers, make sure the exemptions are still applicable and distributed at the proper rate. 3- Stay in constant contact with your tax adviser and tax attorney. 4- Monitor both the Department of Revenue’s website and the state list of timelines, including sunset and exemption reinstatement dates. 5- Use industry associations like the Louisiana Association of Business and Industry (LABI) and your local chamber of commerce to stay informed about state and federal activity that will affect your business.
what is taxable at the 4-percent rate, at the 5-percent rate, and what is taxable at either of those rates that was not taxable prior to April 1.” Out of the chaos, Person makes a prediction. “I bet that in the next couple of years, as the Louisiana Department of Revenue goes out to audit various retailers, the state will experience another windfall of revenue as they assess penalties and interest on those retailers so confused about which rate to charge on the items they sell.” To say Louisiana business owners and consumers want a better tax system is an understatement. “Our tax system is considered dysfunctional by many, and there is now significant discussion, study and motivation to fix it,” says Dressler. Gerrets says that, at the very least, the tax dysfunction is raising awareness. “Perhaps a positive might be that this recent legislative activity will make people more aware of the impact that the state’s economy and sales tax laws can have on their day-to-day lives.” Is there a silver lining to all of these abrupt and chaotic changes? Person says it’s possible. “Hopefully when the state legislators have had enough of the phone calls from their constituents about the mess our state is in, the legislators will make meaningful cuts to state spending and stop trying to fix the problem with more tax increases to you and me,” he says. n
Photo Thinkstock
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Guest Viewpoint
Retirement Tips The key to success is balancing the scales of salary and time.
F Emmett George Dupas III has been with Northwestern Mutual Financial Network of Louisiana since February 2003. He has focused his practice as a wealth management advisor, as well as a retirement plan specialist. Dupas has been recognized as a Top Retirement Plan Advisor by the Financial Times and PLANADVISER Magazine. 68
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Dylan Hoon has been working with Dupas for five years as an investment assistant.
or most workers, it can be tempting to push off thinking about retirement, saying, “I’ll worry about that when I’m older.” The reality, however, is that there are steps you can, and should, be taking at every age. You have two primary resources to take advantage of in order to achieve your retirement goals. The first is your salary; if you are going to retire, you are going to need to save a portion of your salary. Your second resource, and the one more often overlooked, is time. It’s very easy to understand how salary impacts retirement. For most of us, our salaries rise as we get older, and we tend to save larger amounts later in life. Unfortunately, this leads to the thinking that saving for retirement is a chore for later in life, but this ignores HALF of your resources: time! Think of the tradeoff between your two resources — time and salary —
being balanced on a “retirement scale.” On the left arm of your scale you have time, and on the right, your salary. Your goal needs to be to balance the scales, relying not only on your ability to save larger amounts as you get older, but also for time to work to your advantage. You have the option to wait until later on in life, but the longer you wait the lower and lower the salary side of the scale dips, meaning you will need to use more and more of your salary to meet your retirement goals. Now, we are not recommending that you go bankrupt early in life to fund your retirement, but by committing to saving early and consistently you can balance your scales. You want both of your resources working for you. Balancing your retirement scales decreases the burden on both ends, which eases the pressure on saving for retirement throughout your life.
Ages 20-30 At this point, retirement scales lean heavily to the left, with timing being your best resource to utilize. During this time, people are commonly finishing school and beginning their careers. Salaries are likely low, leading many to believe that this is not the time to save for retirement. This thinking ignores the use of time. As an example, if you had invested $1 in March of 1970 in the S&P 500, a benchmark for U.S. equities, and reinvested your dividends, that $1 investment would be worth more than $85 today! While past market performance of course doesn’t guarantee future returns, even small retirement savings at this age can have a very big impact. You can save small amounts of salary now or save much more substantial amounts later. Let the left of the scale time work for you.
Considerations for Investing: In this stage, time is on your side for one to absorb any market gains or losses. Most young investors will likely have a heavy allocation toward equities. Working with a financial advisor will help you determine your tolerance for risk and identify your goals. With such a long time horizon, market movements that drastically affect our account balances will become sections in history textbooks once you are actually in retirement. Ages 30-40 During this time, careers are likely maturing and families may be beginning. In short, more responsibilities are being heaped onto our lives. Retirement scales are beginning to tip, moving away from time and toward salaries. This is a crucial time in your life to begin planning and making decisions that will make your later stages of life easier to navigate. You should be increasing your retirement contributions with any salary increases you get and consolidating any retirement accounts you have had from past jobs to make them easier to manage. Time is still your critical resource in this stage of life.
Considerations for Investing: At this point in your life, and certainly as you move into your late 30s, your account balances may begin to show real growth and you may start feeling the effects of market movements on your overall balance. It’s important to be diversified according to your specific needs and risk tolerance. Most investors likely still have high allocations to equities as retirement is still 20-plus years away.
Ages 50-60 Hopefully you are paying off you mortgage, your kids are finishing school and you can begin to look forward to your well-planned retirement. Your retirement scales have now dipped firmly to the right, leaning heavily on salary. It’s still very important to invest in this stage of your life. While you are less than 10 years away from retirement, you are going to be invested through retirement and a portion of your savings still has 20-plus years to be invested, taking advantage of the market’s potential to give returns over cash over long periods of time.
Considerations for Investing: By your 50s, you are an investment veteran. You have seen market movements in your 20s and 30s, and you were able to navigate your 40s with balances large enough for market movements to truly affect you. You understand that markets do not go up in straight lines. Here, you need to be properly diversified between equities and bonds for your own individual risk tolerances, as well as taking into account your investment time horizon. You aren’t at retirement yet, but you can see the light at the end of the tunnel. Ages 60+ Here you’re at, or very close, to retirement. You can still save for retirement as you are working, using tax-advantaged accounts and especially getting any company match offered through retirement plans. Your retirement scale is now leaning all the way to the right. While you still have some time on your side to be invested, it’s time to enjoy retirement.
Considerations for Investing: As always, your investment allocations should reflect your personal situation at this stage of your life. Your needs and how much you have saved for retirement will determine your diversification. It is extremely important to work with a professional to understand best strategies for distribution or drawing down your retirement accounts to fund the later stages of your life.
Ages 40-50 At this point, careers are mature, families are progressing, and we likely have much more stable financial situations. Here, your retirement scales are balanced between time and salary. You still have 15-plus years for time to play a factor and are likely entering some of your highest potential income earning years. These can be prime years to save for retirement while still taking advantage of the time you have left until retirement.
Considerations for Investing: Market movements are likely to cause many people in their 40-50s much discomfort. Our contributions have been increasing throughout our lives, and at this point it’s likely that investment gains or losses, not contributions, will dictate the direction of our account balances. It is important to be diversified in your investments and have an investment plan that you can stick with and follow through market cycles. A poor investment timing decision can have a serious negative impact. You should avoid trying to time the market and stick with a diversified investment plan.
NOTE: No investment strategy can guarantee a profit or protect against a loss. All investments carry some level of risk including the potential loss of principal invested. Although stocks have historically outperformed bonds, they also have historically been more volatile. Investors should carefully consider their ability to invest during volatile periods in the market. BizNewOrleans.com JUNE 2016
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PUBLISHER’S NOTICE: All real estate advertised herein is subject to the Federal Fair Housing Ace and the Louisiana Open Housing Act, which make it illegal to advertise any preference, limitation, or discrimination because of race, color, religion, sex, handicap, familial status, or national origin, or intention to make any such preference, limitation, or discrimination. We will not knowingly accept any advertising for real estate which is in violation of the law. For more information, call the Louisiana Attorney General’s Office at 1-800-273-5718.
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L U X U R Y
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Great Offices
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By melanie warner Spencer Photography by Cheryl Gerber
A former Packard car showroom in the South Market District transforms to meet the needs of an architecture and engineering firm.
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ince 2012, the inviting offices of WDG | Architects Engineers have been housed in a circa-1901 brick building on Baronne Street. Partners in life and business, Ronn Babin and Peter Jolet own the South Market District-based firm. Beer-loving New Orleanians who have visited Urban South Brewery and Second Line Brewing may already be familiar with some of the firm’s modern-industrial commercial work. The interior of the 9,000-square-foot, two-story space — originally a retail space for the Packard Motor Car Co., in what was then “auto alley” — features exposed ductwork and electrical conduits, as well as concrete floors and exposed brick walls, elements that are a nod to the WDG’s focus on industrial architecture and engineering. “Peter and I purchased the building from the bank,” says Babin. “We were previously in the Entergy Corporation Building, paying a fortune. We wanted a space that better reflected our style, and a big draw for us to this building was the historic tax credits.” Babin and Jolet stationed a staffer at the site full-time, took the building down to the bare walls and completed the project in three months to coincide with the end of their lease. “We had a vision when we walked in,” says Babin. “The overall structural integrity was in tact. There were things here that historically, we couldn’t alter. Some of the paint we couldn’t take off the walls. We had an issue with a tile floor downstairs they wanted us to maintain.” Despite these rules and restrictions typical with historical renovations and restorations, Babin says they didn’t feel constrained. “It was kind of like a blank canvas,” he says. “It was more about deciding, where are you going to put the plumbing? Where are you going to put the A/C units?” The use of a DIRTT wall system helped ease the transition from swanky high-rise to low-slung, industrial space. These moveable walls are considered furniture and can be relocated from building to building, or area to area within an office space, then reconfigured over time to suit the needs and growth of the company. In its recent history, the building housed the offices of a group of lawyers. The space was awash in the seafoam green and mauve
LEFT PAGE- WDG | Architects Engineers moved its offices into a circa-1901 brick building on Baronne Street in 2012. The building was originally a retail space for Packard Motor Car Co. The company’s “welcome committee,” Oscar and Rex, greets visitors to the offices. Above- A gear from the automotive elevator turned conference room is used as a sculptural work in the room.
ubiquitous in the ’80s, as well as carpet and ugly skylights. A seafoam green square above the stairwell, which will at some point be home to a yet-to-be-determined piece of artwork, is all that remains of the paint job, as required by the historical commission. Traces of the glue from the old carpet were left in place to create an amber pattern in the concrete floors. The pattern plays off the maple trim in the front conference room and upstairs offices, which also serve to warm the colder, more industrial design elements. Knoll furniture is used throughout the space, which was furnished by AOS. The lower level houses a reception area, as well as the company’s archives, an additional meeting room and an office space they lease out. “I really love the way the elevator turned out,” says Babin. “That’s kind of our showpiece to clients.”
AT A GLANCE Company Name: WDG | Architects Engineers Address: 821 Baronne Street Office completed: 2012 Architect: WDG | Architects Engineers Interior Designer: WDG | Architects Engineers Furnishings: AOS Square footage: Approximately 9,000 Budget: $1.1 million Main goal: Create a space that fit the company culture and personality while focusing on industrial architecture and engineering. Biggest Challenge: Purchasing, demolition, renovation and moving in within six months. Standout Feature: The automotive elevator turned conference room.
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The building’s old car elevator now serves as a boardroom. With exposed beams and one of the elevator’s massive gears above, brick on all sides, and another of the gears serving as a sculpture in the corner of the room, the design of the boardroom is at once a skillful reminder of the building’s past and an intriguing, attractive and functional space. “We love our space,” says Babin. “I haven’t had anyone come into this space and not comment on how great it looks.” In fact, it seems many people don’t even have to enter the space to love the look of it. The building has been used in TV shows, such as CBS’ “Zoo” and “NCIS: New Orleans,” 74
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as well as ABC Family’s “Ravenswood.” In addition to the more casual atmosphere — which Jolet and Babin agree is a better fit for their respective personalities and the personality of the company — the office serves as an example of the firm’s architecture and engineering. “The one thing that resonates with me is we’re able to show our clients a space they can easily identify with,” says Jolet. Most importantly however, is the impact the environment has on the people who spend 40 or more hours a week using it. “It’s fun to come to work,” says Babin. “It’s a very inviting, fun and warm space.” n
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3- The exposed ductwork, electrical conduits, concrete floors and exposed brick walls are a nod to WDG’s focus on industrial architecture and engineering.
5- The open floor plan allows the architects, engineers and administrative staff to easily collaborate. Knoll furniture is used throughout the space, which was furnished by AOS.
4- Two of the walls in the large, front conference room are made of cork. The front windows were stripped and preserved, adding warmth to the interior.
6- With exposed beams and one of the elevator’s massive gears above and brick on all sides, the design of the elevator-turnedboardroom is at once a skillful reminder of the building’s past and an intriguing, attractive and functional space.
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Why Didn’t I Think of That? Creative Businesses Taking Hold in Southeast Louisiana
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? o o d o o Wh H e Do! Chef Demietriek Scott’s rocky journey has taken him from felon to successful food entrepreneur determined to boost New Orleans’ barbecue scene.
By Andrew Alexander | Photography by Cheryl Gerber
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ew Orleans’ culinary scene draws on many inf luences, but barbecue isn’t one of them. Just a handful of local restaurants satisfy locals’ cravings for smoked and grilled meat. But now an unlikely chef, Demietriek Scott, is raising barbecue’s profile in the Crescent City with a restaurant and his own line of products. Whoodoo BBQ, located at 2660 St. Philip Street in Treme, represents Scott’s latest culinary endeavor, blending his stable of signature dishes and unique style of Creole Barbeque. The restaurant industry has been a labor of love for Scott, who has overcome a lifetime of obstacles to achieve success as a restaurateur in New Orleans. “I have always understood being an entrepreneur,” Scott said. “I knew that from my days of being in the streets. I always knew that I had a knack to push a product, to sell a product.”
“Street Pharmacist” “The first thing I learned how to cook to make money was drugs,” Scott said. As a young man, Scott “grew up all over” New Orleans. He began selling drugs as a 14-year-old while in high school.
Scott displayed business savvy at a young age, applying the lessons he learned in civics class to his illegal street enterprises. “I was simultaneously at John F. Kennedy [High School] taking my civics classes, which were teaching me about bartering, teaching me about supply and demand,” Scott said. “Well, I’ve got supply; it’s in demand.” Eventually Scott’s criminal activity caught up with him, and he was arrested during his senior year of high school selling drugs on the corner of Bayou Road and Claiborne Avenue. He was incarcerated for a year and a half. While serving his time at Dixon Correctional Institute, Scott completed his General Education Diploma, picked up boxing and served as prison cook. “I took my lick, sat down, did what I had to do,” he said. “Then i thought about what I wanted to do with my life.” When Scott was released from prison on January 16, 1996, he vowed to change his ways and never return to life behind bars. “I looked at the front doors of Dixon Correctional Institute, and I said, ‘I ain’t never coming back,’ and I ain’t never been back.”
Chef Demetriek Scott cooks up some Whoodoo BBQ sauce at his restaurant at 2660 St. Philip Street in Treme. BizNewOrleans.com JUNE 2016
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“I realized that I was able to push a product, make it taste good and make people realize that I could deliver something great.” worked as a line cook at Commander’s Palace and later at the Windsor Court Hotel. His culinary journey relocated him to Atlanta in 2004, where he worked in several kitchens before opening his own restaurant on two separate occasions. His first restaurant attempt was New Orleans’ The People’s Restaurant, which served Cajun and Creole cuisine, but ultimately a poor choice of location would doom the restaurant. “When I started to fully understand that I was sinking in my first restaurant, I decided, ‘Let me get out of this thing,’” Scott said. “Let me go back to work, try to understand what I’m supposed to doing as a cook and a chef and an entrepreneur all over again.” Two years later, Scott opened his second restaurant in Roswell, Georgia, Da Cajun Kitchen. “I understood the business a lot better within that two-year span,” Scott said. “I made a profit my first year, which is unheard of.” In fact, Da Cajun Kitchen made a $20,000 profit off a $1,500 investment in its first year, but ultimately could not sustain its early success. Most importantly for Scott, his early success with Da Cajun Kitchen gave him the confidence that he could succeed in the restaurant business. “I realized that I was able to push a product, make it taste good and make people realize that I could deliver something great.”
A New Direction
Serious BBQ
As a teenager, Scott envisioned working with food during his life, even if he was unaware of what a chef actually did. “I decided that I wanted everybody in the world to eat whatever it was I had,” Scott said. “The idea just kind of stuck right there.” Scott began his culinary journey in the summer of 1996 when he enrolled in the Culinary Arts program at Delgado Community College. “After I signed up for Delgado, I knew I was on a pathway,” Scott said. While studying at Delgado, Scott began his apprenticeship at the Hotel Monteleone in the French Quarter, gaining valuable experience in one of New Orleans’ premier kitchens. Following his graduation from Delgado in 2001, the aspiring chef
When Da Cajun Kitchen closed its doors, Scott began working offshore in 2011. Taking the skills he had acquired during his time in Georgia, he began to experiment with smoking meat aboard rigs in the Gulf of Mexico, feeding his co-workers and drawing rave reviews. By the end of 2011, Scott decided to get serious about barbecue; Armed with a truck and grill, he began NOLA Foods in September 2011, and subsequently opened the NOLA Foods Café in Treme. Scott also became a street food fixture on Frenchmen Street, serving burgers, smoked sausage, ribeye steaks and more every night. During the Voodoo Music Festival in October 2011, he faced his busiest weekend ever, making over $5,000 while using a grill no bigger than a legal pad.
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“I worked that little-bitty $10 grill that I got from Walmart,” Scott said. “The crowd was thick as peanut butter, and I was onto something.” Scott faced another setback late in the summer of 2012 when Hurricane Isaac collapsed the ceiling in the kitchen of the NOLA Foods Café. “At the time, business was just starting to pick up, but not enough to where I could maintain my business insurance,” Scott said. “I was forced out of the building because of the storm and the damages.” Ever the optimist, Scott vowed to open another restaurant. “I had proven to myself that I could actually build a business, make it profitable and make it go on.”
The Birth of the Ghetto Burger As Mardi Gras 2013 approached, Scott knew he needed to capitalize on the city’s premier event. Suffering from a severe case of tonsillitis, he set up shop under the bridge at St. Charles Avenue and Calliope Street and unleashed the newest weapon in his street food arsenal: the Original Ghetto Burger, a 12-ounce handmade patty oozing with flavor. The Ghetto Burger was inspired by the homemade hamburgers Scott enjoyed as a kid, when his family could not afford to purchase burgers at local fast food chains. “We used to make a burger in the ghetto, which was the projects, at the beginning of the month,” Scott said. “My mom would get her food stamps, and make her own burgers.” The catchy name conjured up memories for many parade-goers and caused passers-by to stop and inquire about it. The Ghetto Burger was an instant hit. “That was actually something that was familiar to everybody,”
Scott said. “Everybody’s mom made a hamburger by hand, out of fresh ground beef at home.”
The Genesis of Whoodoo BBQ Scott began experimenting with creating barbecue sauce as a young cook in the late 1990s. Initially he purchased sauces from local grocery stores and added his own blend of spices to create a homemade sauce for the street food he sold. Over the years, many customers asked where to buy the delicious concoction that smothered his meats, and finally Scott decided to craft his own signature sauce. Scott’s original sauce was initially called Chef Scott’s BBQ Sauce, but he realized he needed to refresh his brand to stand out. Scott was inspired by the name of a mystical power his mother often referenced in regards to relationships. “She had always used a saying that women would date men and either put a spell them or use some type of hoodoo or voodoo to make them always come back and see them,” Scott said. Scott’s Whoodoo BBQ sauce, a spicy tomato-based product, was the first of his three signature sauces. Fiya Water, a Caribbeanbased f lavor with pineapple and mango infusions and Beer Bee-Q, a sauce made with NOLA Brewing beer, followed shortly thereafter. The barbecue sauce trifecta has helped form the basis of the product line featured at his latest restaurant, Whoodoo BBQ. “It was going to be a certain style of barbecue,” Scott said. “It needed to be something synonymous with what this side of Louisiana was familiar with, and that was Creole, tomatoes and things of that nature.” Located seven blocks from the site of NOLA Foods Cafe, BizNewOrleans.com JUNE 2016
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Where to find Chef Scott’s BBQ Sauces & Desserts:
Whoodoo BBQ is Scott’s ode to Creole heritage, specifically his great-great-great grandmother, who was a Creole slave.
A Tasty Future Scott’s BBQ sauces and desserts, which include “ooey gooey” cakes, pies and pralines, already line the shelves of area Whole Foods Markets and Rouses, but to Scott that’s only the beginning. His vision for Whoodoo BBQ includes turning the current location into an exciting restaurant experience that combines his delicious food, a full bar and live music. In the future, Scott plans on expanding the NOLA Foods brand
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(which includes Whoodoo BBQ) into a national, and hopefully international, New Orleans brand that will “stand the test of time.” “This brand is going to be built right here in New Orleans,” Scott said. “Same as Zatarain’s, same as Tony Chachere’s, CC’s Coffee, PJ’s. We want to appeal to that local New Orleans brand, with nothing but hard work, dedication and the love that’s in my heart from being able to grow up here in New Orleans.” Eventually, Scott also expects to move beyond barbecue, and open up other types of restaurants. “I want to be able to show and share what I’ve learned in all these culinary kitchens from Atlanta to New Orleans,” Scott said. He also eventually wants to return to where his culinary journey began and open up a restaurant in the French Quarter. “I want to be the black guy that worked his ass off and made his own money, whether somebody wanted to invest in me or not.” n
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Q&A
'We want to be that neighborhood theater that creates fond memories and encourages customers to come back and spread the word.�
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Photo Cheryl Gerber
Local developer Brian Knighten talks about opening Mid-City’s first movie theater since 2000. By Kim Singletary
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n July 26, 1896, an old storefront on Canal Street was transformed into the first for-profit movie theater in the country — Vitascope Hall. One hundred and twenty years later, a 90-year-old building, vacant for a decade, received new life on March 4 with the opening of MidCity’s first neighborhood movie theater since Movie Pitchers went dark in 2000. The new 12,000-square-foot Broad Theater (636 North Broad) features four screens dedicated to showing a mix of independent, local and Hollywood films. Just two months into business, local developer Brian Knighten talked to Biz about his two-year-long labor of love. BIZ: First, can you share a little bit about your background?
Brian Knighten: I have a master’s in education from UNO and taught middle and high school for a few years. Following that, I worked at Tulane’s Stone Center for Latin American Studies, where I ran a small film library. That’s where my interest in film really began. BIZ: Why a movie theatre?
BK: I don’t have any formal training in film, nor do I have that much knowledge of film, I just love the idea of film and what it can do for people. Watching a movie with a good story line and actors allows viewers to transcend their own reality for two hours and immerse themselves in another world. Aside from reading, there isn’t another medium that allows that to happen. Plus, I have always felt it would be a good business opportunity. BIZ: When did the idea for the theater come about?
BK: It came in 1999 when I was sitting in a Mid-City restaurant and
overheard a couple talking about a theater, Movie Pitchers, closing and I thought to myself what a tragedy it would be if that happened. The next day I went to the owner and came up a plan to keep the place open. The plan didn’t work, obviously, but the idea stuck. BIZ: Why Broad Street?
BK: If Mid-City is the heart of New Orleans, then Broad is its main artery. Broad is a tremendous commercial corridor that is finally being rediscovered by developers. It all really started with Broad Community Connections and their ReFresh (Whole Foods) project. That was the anchor and a vote of confidence for Broad and it showed my lenders that if Whole Foods believed in the street, so should they. Plus, the building is gorgeous. BIZ: The building is a brick and stucco Spanish-style structure built in 1923, which is unique for the area. What appealed to you about it?
BK: For one, there aren’t many examples of Spanish Colonial architecture in New Orleans. I could have found a warehouse somewhere in the city many years ago, but I waited until I found a location and building that would allow us to be viewed as a real theater by our customers. The building is beautiful and is widely recognized by people who travel Broad — everyone knows the old boxing gym across from Auto Zone! BIZ: Were there construction challenges?
BK: There weren’t many challenges, other than the slow pace at which funds and crew were available for construction. My crew did most of the work, so they had to shuffle between the houses we were building and the theater. In the beginning, the priority was selling houses to fund the theater; the closer we got to finishing, I pushed all the resources to the theater.
Real estate developer, and now movie theater owner, Brian Knighten, stands in the lobby of the recently-opened Broad Theater. BizNewOrleans.com JUNE 2016
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BIZ: What were your goals when creating the theater? What features did you specifically want and why?
BK: The main thing I wanted to create was a place people felt comfortable in. As a general rule, that guides everything we do. We have good prices, because we want people to come back often. We have real theater seats because we want people to enjoy the experience. Our staff never says no because we want to make all of our customers happy. We want to be that neighborhood theater that creates fond memories and encourages customers to come back and spread the word. BIZ: What did you absolutely not want for/ in your theater?
BK: We didn’t want table service in the auditoriums. While some people love it, some people hate it. Canal Place Theaters does an excellent job at providing this service. We wanted to give people another option when going to the movies. These dine-in theaters tend to be more expensive than your traditional theater, and we didn’t want to be known as an expensive place to enjoy a night out. We want to have our customers come to the theater once a month, not every three months, and we feel that by having good prices and a comfortable atmosphere, they will come more often. 84
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BIZ: What was the financing process like?
BK: The bulk of my financing came from South Central Planning in Houma — a development corporation that works in New Orleans through US EDA and some state loans to fund projects that may be not otherwise be funded by traditional banks. I worked with the Louisiana SBDC to secure the loan, and I cannot recommend them enough (both of these organizations, actually). The rest of the funding came from my own injection. BIZ: The theater was two years in the making. Why so long?
BK: The project changed mid-way through to include two more screens (from two to four). This nearly doubled the cost, which unfortunately doubled the time. Always know what you want to build before you start building it! BIZ: What was the biggest challenge in seeing it come to life?
BK: Surprisingly, getting the building permit. Because of the Lafitte Greenway overlay, the city required a variety of permitting that would not have been required in another location. These overlays generally have the best intentions, but sometimes they can hamper a good project, which I believed this to be. Although the process was a bit onerous, the City Planning Commission staff was super helpful in
getting me to where we needed to be. At the end of the day, we were able to open and the city is able to collect some taxes on a onceabandoned building. BIZ: How do you view the theater scene in New Orleans? Past vs. now?
BK: Getting better every day. Prior to Katrina, I’m not sure an independent theater like ours would have survived. With the influx of out-of-towners, we are getting people who come from cities with these sorts of theaters. They want to frequent local, independent venues, and prior to us opening, didn’t have that opportunity. I think the future looks great for film in the city. Each week since we have opened we have hosted a private screening of either a locally shot film by a local filmmaker or an out-of-town director who shot the film in New Orleans. The film community is growing and finally getting the recognition it deserves. BIZ: How is The Broad different from Zeitgeist or Prytania?
BK: I think we all serve different markets and customers. I would throw Canal Place into that mix as well. All of our theaters offer something different. Prytania is a muchloved theater Uptown that offers some of the same films as we do, but without restaurant food and cocktails. Zeitgeist offers an incredible variety of films and other events, but functions more as a microcinema. Canal Photo Crystal Shelton
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Place offers a good mix of programming but does so in a more upscale environment. It will take time, being the new kid on the block, but we will carve out our audience and develop our own following the same way these other theaters have. BIZ: You’re doing something a little different, you’re also hosting live performances.
BK: Yes, about one or two times a week we’re hosting comedy shows, both sketch and improv. They’ve been really well received. In the future I’d love to start doing some talks and panel discussions, both about film and not. BIZ: Both your ticket and concession prices are really competitive, even low for a typical theater. What was the thought behind that?
BK: We have this beautiful lobby and bar so we want to encourage people to come in for a drink, whether they’re seeing a movie or not. Our bartender makes some really incredible cocktails and we have different pop-up restaurants all the time. Our thinking was always, ‘how do we get people to order that second drink?’ I think we do that by keeping our prices low so they can afford to do it. For the ticket prices, we looked at prices regionally, not just in New Orleans. We’re at $10 for a general admission seat and I think that’s good. You get up to $12 or $13 and, maybe it’s just a mental thing, but I think it runs the risk of being too expensive. We want a single person to be able to come in and have a great evening for under $20. BIZ: How are you marketing the theater?
BK: Social media, of course. Advertising for movie theaters isn’t the same as it was Photos Cheryl Gerber
even 10 years ago. Most people don’t go in the paper and check movie times, they search for the movie on their phone, so we have to make sure we pop up. We’re also working on some creative marketing ideas and partnerships right now that aren’t quite ready yet. BIZ: Are there plans for a marquee?
BK: Yes. In the next one to two months we’ll have something up. We have a design for it. BIZ: How has the theater been received so far?
2 LEFT PAGE- Built in 1923, the Spanish-style building that serves as home to The Broad Theater lay vacant for 10 years. 1- The Broad’s four theaters range from 65 to 125 seats. 2- The theater is quickly becoming known for its cocktails.
BIZ: What are your biggest operational costs? Your biggest sources of revenue?
BK: Everything we’ve been hearing is great. We actually haven’t received anything negative online, which is great. Mid-City loves us, they’re happy we’re here, but we’re still trying to reach the Lakeview, Gentilly, Uptown market. It’s hard because New Orleans is so neighborhood driven, but we’re fighting the good fight to get the word out.
BK: We don’t own the building, we’re on a long-term lease, but definitely that loan payment. Then labor costs are the second biggest chunk. As far as revenue, it’s definitely concessions. The medium popcorn and medium drink — those are the No. 1 sellers and the No. 1 profit makers. Our cocktails are also selling really well.
BIZ: How hands-on are you? How much time do you spend at the theater?
BIZ: You hear that movies make their money on concessions, not ticket sales. Is that true?
BK: Typically I spend the morning on construction sites and I’m in the theater in the afternoon. I’m fortunate that we have a really great staff. I also do a lot of the film selection. Outside of the films we’ve also been really busy with events. We’ve had a special event here almost every single week since we opened — a range of things like all-day conferences, individual talks and a lot of local cast and crew screenings. We also just worked with a middle school nearby to host an event for them. We were able to make it affordable enough for them that it would work. We want to be known in the neighborhood as affordable and approachable.
BK: A lot of people think that but we do actually make money on ticket sales. About 35 to 60 percent of ticket sales go to the distributor. BIZ: What are your goals for the theater — short-term and long-term?
BK: I’d say financially, for year one it’s definitely just to break even. Of course the goal is for the theater to be self-sustaining — right now I’m still pumping a lot of money into it. I really want to get a steady restaurateur in there too, someone who will take over and make it their own, working with us, of course. There’s so much potential here. I feel it. I feel it’s coming; we’re just not there yet. n BizNewOrleans.com JUNE 2016
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Events Greater Mid-City Business Association Luncheon
New Orleans Regional Black Chamber of Commerce 2016 Annual Meeting
Tuesday, April 19, 2016
Thursday, April 21, 2016
The Cannery
Hyatt Regency
The Mid-City Biz Luncheon, held quarterly, brought together more than 50 area businesses. Speakers included Councilmembers Latoya Cantrell and Susan Guidry.
The annual meeting of the New Orleans Regional Black Chamber of Commerce focused on the effects the city’s 2016 budget will have on black businesses. Speakers included Senator Karen Carter Peterson and State Representative Walt Leger.
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1. Andrew Sander, Tyree Worthy, Jennifer Fletcher and Eric Von Hoven 2. Councilwoman Latoya Cantrell 3. Roux Merlot, Cole Newton, Tim Levy and Henry Kothmann 86
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1. Eric Blue, Theo Sanders and Octave Francis 2. Senator Karen Carter Peterson 3. Maria Newman, Terrel Broussard, Donesia Turner and Joanne Smith Photos by Cheryl Gerber
Collision Tech Coference
5th Annual Green Games Awards Gala
April 26-28th
Tuesday, May 12
Ernest N Morial Convention Center
Eiffel Society
“America’s fastest growing tech conference” descended upon New Orleans in between Jazz Fest weekends. The conference is set to return to the Crescent City May 2-4, 2017.
More than 150 businesses competed for awards in sustainability leadership and achievement in Greater New Orleans at this year’s 5th annual Green Games Awards Gala.
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1. Adele Tiblier, Beau Perschall and Valerie Corradetti 2. Michael Buckwald 3. Matt Wisdom, Charles Carriere and Peter Bodenheimer Photos by Cheryl Gerber
1. Pearl Ricks, Liz Shepard, Ella Delio and Jim Cook 2. Mary Jacobs 3. Ralph Melian, Terry Melian and Darren Labarthe BizNewOrleans.com JUNE 2016
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Behind the Scenes
Eagle Eye Accidents, traffic congestion, stranded motorists — the New Orleans Regional Traffic Management Center sees it all. Since 2009, the TMC —located at 10 Veterans Boulevard — has been continuously monitoring over 1,000 miles of interstate, state and federal highways in and around the city. In New Orleans alone, the TMC operates 129 different cameras. In addition to a 12-screened video wall, each operator sits at a station with four screens, capable of monitoring 28 camera feeds at a time. Once an incident has been detected and verified by one of the center’s eight staff members, the TMC notifies the appropriate response agencies.
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Photo by Jeff Johnston