Business Connection May 2012

May 2012

PRESORTED STANDARD US POSTAGE PAID COLUMBUS, IN PERMIT NO 200

A publication of

Family style Loesch Heating and Air Conditioning serves hometown customers

2 The Business Connection May 2012

Contents

Downtown jewelers . . . . . . . . . . . . . . . . 4 On the move . . . . . . . . . . . . . . . . . . . . . 8 Mark McNulty column . . . . . . . . . . . . . 9 Long commutes . . . . . . . . . . . . . . . . . . 10 Building for multiple generations . . . . . 11 Small businesses rebounding . . . . . . . . . 12 Business leads . . . . . . . . . . . . . . . . . . . . 14 Role of small business . . . . . . . . . . . . . 16 Around the watercooler . . . . . . . . . . . . 17 Morton Marcus column . . . . . . . . . . . . 18

Business Indicators for Bartholomew County Percent changes Feb 12/ Feb 12/ Description Feb 12 Jan 12 Feb 11 Jan 12 Feb 11

Labor Force

41,337 41,266 37,081 0.2

11.5

Household Employment

38,544 38,403 34,026 0.4

13.3

Unemployment Rate (pct)

6.8 6.9 8.2 — —

Housing Units Permitted

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On the cover: Loesch Heating and Air Con-

ditioning is a true family business, composed of Mark Loesch, in front from left, Jim Loesch, Mike Loesch, Pam McIver and Tim McIver and in back, Tim Loesch and Ted Loesch. Photo by Angela Jackson. Story page 6.

Comments should be sent to The Business Connection editor, 333 Second St., Columbus, IN 47201 or call 379-5625. Advertising information: 379-5652. ©2012. All Rights Reserved. Editor, Doug Showalter; copy editor, Katharine Smith; writer, Barney Quick; graphic designer, Phillip Spalding.

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— Center for Business and Economic Research, Ball State University

Celebrating

110 years of making color

POP

ISO Certified: 9001-Quality and 14001-Environmental

4 The Business Connection May 2012

Downtown jewels

Competitors Casey and Max’s have been resolute retailers in changing local scene

By Barney Quick

Recent changes to downtown Columbus have occurred at such a rapid pace that it’s increasingly difficult to remember how various blocks and corners looked even fairly recently. If one expands the scope to 40 years, covering several periods of change, the challenge is even greater.

The owners of two jewelry stores who have witnessed it all not only remember, but provide outposts of constancy amidst the changes.

Max’s Jewelry, at the corner of Fourth and Washington streets, and Casey Jewelers, about half a block west facing the second incarnation of The Commons, both date to 1972, when the business-district buzz centered on construction of the original Commons.

The people behind the stores have downtown roots extending even further back.

David Carothers, who co-owns Max’s with his father, Max, and his brother, Steve, was exposed to the jewelry trade in his youth when Max was the manager of Smith’s Jewelers, which was on the opposite side of Washington Street. Max bought the present store from the Fischvogt family on Valentine’s Day 1972.

Jim Casey’s father owned the H.L. Rost jewelry store at Fifth and Washington. Jim worked there from 1966 to 1972.

“The building was torn down,” he says. “I had no choice. I had to do something.” On July 5, 1972, he and his wife, Marjorie, with whom he still coowns the business, bought Hendershot Jewelers, which was on Fourth Street between Franklin and Washington. In February 1977, he moved it to its present location.

“I watched them build the mall they’ve now torn down,” he says.

The two stores have a similar array of merchandise. They both sell necklaces, earrings, rings, bracelets, watches,

photos by Joe Harpring

Jim Casey, left, and David Carothers stand at Fourth and Washington streets near the stores they have run in competition for decades.

accessories, glassware and decorative items for the home, such as figurines and candleholders. At one time, the Caseys sold a Casey brand of watch, although it has since been discontinued.

Different approaches

Repair and sizing work constitutes a major portion of the business at each store. It may be the one area where their approaches are a bit different.

Max’s bought a laser welder 11 years ago and has since added a laser engraver and a computerized conventional engraver.

“We used to have the carbon stick, ground cable and ring, and it would start sparking,” recalls David. He and Steve handle the store’s repairs, a craft they learned by apprenticing, reading trade magazines and talking shop with sales reps for various lines of repair tools.

Casey prefers to use traditional methods. His backroom sports a torch for ring sizing, oilers, special screws, an engraving machine and a lathe. “The lathe is for customizing the fit of watch parts, but now that quartz watches are

so prevalent, I don’t use it as much,” he says.

The two stores coexist in a spirit of cooperation. Of the Carothers family, Casey says, “If they need a battery, they’ll come down here. We help each other out.”

David Carothers says, “We knew Jim’s dad. It’s a friendly relationship.

We send people over there for types of repair that we know he does well.”

The 40 years the stores have been in business have seen the advent of more malls in the outlying sections of the Columbus area, meaning chain jewelry stores entering the market. According to David Carothers, it hasn’t had a major effect on business, though, because their presence is usually short-lived.

“We get people wanting us to repair items they bought at stores that aren’t there anymore,” he observes.

Both Carothers and Casey say that sales reps for merchandise visit them two to three times a year. “With the way the economy’s been, a lot of vendors have become lax regarding the minimum you have to buy to keep their

lines,” says Carothers.

Proprietors of both stores used to attend a fair number of industry events, but have scaled back in recent years.

“I used to go to the trade show in Las Vegas, but it’s been awhile,” says Casey.

“We used to go to the show in Atlanta twice a year, but that kind of fell off,” says Carothers. He still attends the annual show in Columbus, Ohio.

Regarding promotions, Carothers says that “we pretty well come up with our own. The vendors have dropped a lot of what they used to do. I think social media has had an impact on a lot of that.”

In February, Max’s ran a promotion on Facebook. Clues were provided leading to a picture of a ring, scavengerhunt style. The winner’s prize was the actual ring. “We were going to run it through Valentine’s Day, but the winner found it, at the bottom of the steps of the Mill Race Park tower, three days early,” he says.

Downside to downtown

Carothers notes that downtown, after going through a period of main-

May 2012 The Business Connection 5

Carothers places rings back in a display case at Max’s Jewelry.

ly hosting daytime, professional office activity, is becoming a social hub again.

“You used to be able to figure out which days you’d be busy,” he says.

“Fridays used to be so busy we stayed open until 9. Then that fell off, but since The Commons reopened, Fridays are getting busy again.”

Casey speaks candidly about the downside of the downtown renaissance. “Our customers’ biggest issue is parking, and that’s still true even with the new garages,” he says. “A lot of them have to walk a couple of blocks.

It’s really terrible.”

He says that running a small business with his wife and two part-time sales clerks entails a sizable demand on his time. “I don’t think I’ve had more than a week off in 40 years at any one time.

I don’t leave at the end of a day until

everything is put in place.”

He does relish his leisure time, though. He animatedly talks about his 1100 Honda Spirit motorcycle, his 1967 Ford Mustang (“the reason I’ve kept it is the high-performance engine”) and a 1949 Mercury that his wife’s mother bought new.

Carothers likewise enjoys motorcycling, plus remote-control airplanes and hunting for deer, turkey and big game.

He also has a boat he takes to Lake Monroe.

Carothers speaks for his brother and father and Casey as well when he reflects on the most satisfying aspect of his work.

“To start out with something rough and refine it into something that people appreciate for its uniqueness is really gratifying.”

Casey repairs a watch at his workbench at Casey Jewelers.

6 The Business Connection May 2012

Exceeding the standard

Loesch family takes analytical approach to longtime heating and air-conditioning business

By Barney Quick

“There’s an obligation that transcends the bottom line.” So says Tim McIver, president of Loesch Heating and Air Conditioning, about his and his company’s highest priority in the conducting of business. “It’s a matter of living up to your own standards.”

Doing things right — both in the sense of what is procedurally correct and in terms of what one is morally compelled to do — is of utmost importance to this 96-year-old firm.

That’s why the Loesch team takes on only certain kinds of work.

“We install systems in new homes only when we’re working with the owner,” says McIver, noting that developers tend to be so cost-conscious that they’ll skimp on a system’s capacity. Similarly, the company doesn’t get involved in apartment complexes, which are generally, according to McIver, “cranked up for high volume.

I’m concerned about performance. I want to make sure the units are powerful enough for the space involved and that there is sufficient ductwork.”

That means that the company’s niche is system upgrades in existing homes. As an example of why the company finds that type of work gratifying, McIver cites a thank-you note from a recent customer.

“We corrected a situation with her previous system that had caused her significant problems,” he says. “I go to bat for customers who have oversized or improperly installed systems. I’ve lost jobs because I told the homeowners I wouldn’t install their systems the way they wanted, because I knew it wouldn’t work for them.”

On a similar note, he says that a product line’s failure rate is demonstrably “lower if the guys are well-trained and committed to doing a quality job.

What kind of dealer a manufacturer sells to is a significant factor.”

The business, started in 1916 by

Photos by Angela Jackson

Ted, left, and Mark Loesch use a brake to bend metal for duct work. The World War II-era brake is 8 feet wide.

sell their line because of our reputation,” he says.

Cultivating loyalty

A display of Loesch promotional materials over the years.

C.W. Loesch as a tinsmith shop, has dealt in several brands of heating and cooling systems. It currently sells and installs York and American Standard products. Industry consolidations have resulted in a winnowing to about eight

current major manufacturers. Through the years, McIver has seen several sales representatives change lines, calling the phenomenon “musical distributors.”

“I’ve had reps from just about every brand sitting in this office wanting to

McIver also feels that Loesch being headquartered where its market lives enhances its customer service capability. “A lot of businesses have the model of basing a service truck here, but having a home office in another city,” he explains. “My feeling is that if I sell you a furnace, I may run into you around town. I want to cultivate loyalty. You have roots in the community. People know how you do things.” He says that “there are about three brick-andmortar dealerships in town now.”

McIver married into the Loesch family. His wife, Pam, is C.W. Loesch’s great-granddaughter. Intervening generations were involved in the management through the years.

Pam is the office manager and chief financial officer. Her brothers, Jim and Mike Loesch, are the service technicians. Jim also serves as CEO. Jim’s sons, Mark, Ted and Tim, comprise the shop crew.

Along with installing home-comfort

May 2012 The Business Connection 7

Pam’s father, George Loesch, was the company’s president at the time. He needed particular skills in the financial and organizational areas, so adding his daughter and son-in-law seemed like a ready-made solution. George retired in 1982.

“I wanted to make sure everyone was comfortable with the arrangement whereby I would focus on administrative matters and everyone else would play to their strengths,” McIver says of entering the family-run organization.

“We all wanted it to work, so we found the balance between being family and being business associates.”

Equipment considerations

Tim McIver is president and Pam McIver is office manager and chief financial officer for the 96-year-old company.

systems, the company offers custom fabrication services. It can provide sheet metal fittings, chimney caps, flashing, gutters and even bay windows and flower boxes.

McIver, a 1967 Columbus High School graduate with a bachelor of arts

in economics from Franklin College and a master’s degree in organizational management from the University of Phoenix, was a manufacturer’s representative based in Indianapolis for much of the 1970s. He and his family moved back to Columbus in 1981.

Decisions on what brands and models of systems to install entail several considerations that must be balanced.

The shape of the house, the number of registers in each room and the materials from which various areas of the home are made are among the factors involved.

“Some people have a brand preference,” says McIver. “For instance, we’ve advertised York for so many years, some people associate it with us.”

He says that “it’s good to leave ourselves with a margin. One manufacturer

may offer models with 75,000 and 105,000 BTU output, and another may offer 80,000 and 110,000. If a house’s requirements are at the high end, I go with the one with a little more capacity.”

A furnace’s location is another important factor. “If a furnace is at the end of a house rather than centrally located, it will affect what air blower I decide to go with,” he notes.

Then there is the decision between a heat pump and a furnace. Calculations such as square footage and load come into play in that choice.

“It all gets back to design and technical knowledge,” McIver stresses. “A lot of people don’t look at it from an engineering standpoint.”

Several manufacturers offer training to dealers, and the entire staff at Loesch has availed itself of an array of such courses.

“If you take the time to really analyze a home, you may submit a bid that offers the customer some options,” says McIver. One matter of principle is certain when dealing with McIver and the Loesch staff: “You can’t give me enough money to do what I know is wrong.”

8 The Business Connection May 2012

Burt’s Termite & Pest Control, serving Columbus since 1973, has earned the Quality Pro designation from the National Pest Management Association in recognition of its high level of environmentally sound service to customers.

Columbus area consulting arborist Kris Medic of Groundsmith Consulting received the 2012 Meritorious Service Award from the Indiana Chapter of the International Society of Arboriculture in January. The award recognizes a memKris Medic ber of the Indiana Arborist Association for professionalism in the field of arboriculture.

Bonnie Nolting, chairwoman of the office administration program in the School of Business at Ivy Tech Community College-Columbus/ Franklin, has been honored as the recipient of this year’s President’s

Award for Excellence in Instruction. It is presented annually to a faculty member from each of the 14 regions of the college to recognize faculty who typify excellence in instruction and in Bonnie Nolting representing the mission of Ivy Tech Community College.

Nolting became an Ivy Tech adjunct faculty member in 1983 and a fulltime faculty member in 1990. She was promoted to professor in 2000 and chairwoman of the office administration program in 2005.

Shawn Green, owner of Green Sign Co. in Greensburg, has been elected president of the Midwest Sign Association. He was vice president in 2010 and trustee in 2004 and 2005. Green Sign received a first-place award from the Signs of the Times magaShawn Green zine’s Electric Sign Contest for best free-standing original logo sign.

Gretchen Gatewood has joined Miller’s Merry Manor at Hope as activity director. She is a magna cum laude graduate of Indiana University,

with a degree in recreation and sports management, and is experienced in long-term care.

Vince Moore of the Vince Moore Allstate Insurance Agency has been named an Allstate Premier Service Agent for 2012, an award given in recognition of excellence in customer service and outstanding business results.

Toshikazu Kashida has been appointed vice president of Honda Manufacturing of Indiana in Greensburg. He will share responsibility for the oversight of daily operations with Bob Nelson.

Kashida has been with Honda for 25 years, beginning in Japan, and has served his entire career at Honda Engineering Co., most recently as business division and production division manager.

Roger Bingham, vice chancellor for student affairs at Ivy Tech, and Marsha VanNahmen, assistant director of the Center for Teaching & Learning at IUPUC, gave a joint presentation at the second annual Service Engagement Summit of Indiana Roger Bingham Campus Compact in Indianapolis.

Their presentation focused on a project involving faculty and staff of Ivy Tech, IUPUC and the Purdue College of Technology, and sixth-grade students at Parkside Marsha VanNahmen Elementary School.

The students learned that hard work in school and planning early for college are important and that there are numerous ways to pay for college.

Indiana Campus Compact promotes public and community service by developing students’ citizenship skills, forging community partnerships and training faculty to integrate civic learning into the curriculum.

Jeremy Donaldson has joined Kessler Investment Group as executive vice president. He earned a B.A. at the University of Chicago and has 15 years of experience. Most recently he was wealth management adviser for Northwestern Mutual Wealth Management Co. in Indianapolis.

Earlier in his career, he was branch managJeremy Donaldson er for the Columbus branch of A.G. Edwards and Sons.

— Staff Reports

Seeking change, Avon names new CEO

By Candice Choi and Michelle Chapman AP Business Writers

associated Press

NEW YORK — Avon is hoping a new CEO can give it a much-needed makeover.

The struggling cosmetics seller tapped longtime Johnson & Johnson executive Sherilyn S. McCoy as its new chief executive. The announcement ended a four-month search to replace embattled CEO Andrea Jung, who had come under fire for failing to stem the company’s declines and wrap up a bribery investigation.

Avon Products Inc. said Jung — the first female CEO of the 126-yearold company — will remain executive chairman.

McCoy’s emergence at Avon comes less than two months after she was passed over for the top spot at Johnson & Johnson, which in February

Sherilyn McCoy

Andrea Jung

announced that Alex Gorsky would take over as CEO. The announcement from Avon comes after the company rejected a $10 billion takeover offer from the smaller beauty products maker Coty Inc. Founded in 1886, Avon became a fixture in households across the country as its legions of “Avon ladies” went door to door selling makeup to family, friends and acquaintances.

The company markets its products in

May 2012 The Business Connection 9

coach’s corner

Do I owe my staff raises?

With the economy starting to gain upward momentum, more employees in small businesses are looking to the owners for raises in pay, which have been frozen or limited for the last few years. Many business owners I talk to feel caught between the feeling that they owe their employees raises Mark McNulty and their resentment toward employees who feel entitled to annual raises simply because they show up for work most days.

I also want to note that every business owner I talked to has a strong desire to help their employees make more money. So how do you determine what is appropriate for your team?

Here are six steps to consider when deciding how to compensate your team for their efforts on your behalf for your customers.  You must have a written compensation policy that describes how pay will be determined, how and when it will be evaluated and your policy for giving raises. This should be in your

employee manual given to all new employees, and it needs to be given to all existing employees any time it is updated. You should explain the policy to new employees, so there are no doubts that they fully understand it and no surprises later on.  Create a pay scale for each position within your business. Each position should have a minimum, a median (middle) and a maximum. It is possible for an employee to get to the point where they cannot make more money in their current role at their current level of responsibilities and performance.

Do some market research to determine appropriate minimums and maximums for your positions. There are websites, industry data, government data and good old word-of-mouth with your colleagues to help you determine appropriate pay ranges.  Define tangible and intangible modifiers for pay. For example, evaluate intangibles like ownership, teamwork, employee engagement, work ethic and customer service.

Tangible modifiers include actual performance data for their work,

education levels, training received and utilized, profit improvements, quality improvements and management responsibilities. These can be used to ensure that an employee is in the correct part of the range for his position.  Whenever possible, give increases in terms of percent, not just dollars.

People will want to know if they are getting ahead of inflation, for example, so you can help them to see that a 3 percent raise in a year with 2 percent inflation is getting ahead, where the incremental 50 cents an hour may sound like an awfully small number.

This also helps you in your budgeting process, as you should be setting a target for how much you are planning to increase wages in your annual budget on a percentage basis. Increases of over 10 percent should be considered very hard, even when trying to get someone “where they should be.” It is better to get an employee to his target pay in a couple of increments rather than one big chunk.  Define a specific time of year for when employees will have their compensation reviewed and stick to it.

Notice I didn’t say when they will get

raises — they are not automatic, but should be earned. Your date can be the start of the year or on employee anniversary dates. It doesn’t really matter; write it in your policy and stick to it.  Budget for employee raises. As part of your annual budgeting process, you should be thinking about how much you believe that the company can set aside for wage increases. Do this in percentage terms (say 5 percent average), which gives you a dollar amount that you have available to spread across your team.

If you don’t do anything else, please implement the first step and document your compensation and raise policy.

The number one reason people are unhappy with their pay is that they don’t know how you intend to make pay decisions — the process, the timing, what they should expect. This is the easiest step of all: Just decide how you plan to do it, write it down and share with your team.

more than 100 countries through about 6.4 million independent sales representatives. Its annual revenue is more than $11 billion.

But North American sales have dropped off over the years and about 80 percent of Avon’s $11 billion in annual revenue now comes from overseas. The company has frequently missed analysts’ earnings expectations and posted weak sales in some of its largest markets.

The Securities and Exchange Commission also is investigating Avon’s contact with financial analysts in 2010 and 2011 as part of a bribery investigation.

Jung, 53, joined Avon in 1994 as president of product marketing. She rose through the ranks to become CEO in 1999 and added the chairman title in 2001. When Avon announced its search for a new CEO this past December, the company said it would separate the CEO and chairman roles.

McCoy has 30 years of experience with Johnson & Johnson, where she served as vice chairman of the executive committee and a member of the office of the chairman, with responsibility for brands including Neutrogena, Aveeno and Lubriderm. Prior to that, she was worldwide chairman of pharmaceuticals.

“Sheri has a unique combination of strategic and finely honed operational skills, a significant turnaround track record, global experience and people leadership,” Fred Hassan, lead director of Avon’s board, said.

1896 — First brochure is issued.

1902 — The California Perfume Co. has 10,000 sales representatives.

1906 — First ads appear in Good Housekeeping magazine 1914 — Operations begin in Montreal, marking the first international expansion 1916 — The California Perfume Co. incorporates in New York.

1928 — The Avon name is used for the first time on products, including a vanity set, talc and toothbrush cleanser. The name is a reference to the river that runs through Stratford-on-Avon, the birthplace of McConnell’s favorite playwright, William Shakespeare.

1929 — The logo, introduced on a cosmetics line, includes a sketch of the cottage of Shakespeare’s wife.

1946 — Avon goes public with overthe-counter stock.

1953 — First TV advertising is launched.

1961 — Avon markets Skin-So-Soft, which will become one of its most recognizable brands.

1964 — Avon Products Inc. is listed on the New York Stock Exchange under the ticker “AVP.” 1971 — The company starts selling jewelry.

1973 — It develops a computer program to store ingredient formulations.

1979 — Purchase of Tiffany & Co. kicks off an acquisition spree that runs through the 1980s. The company expands into medical equipment, home health-care services, specialty chemicals and retirement and nursing homes. Each of those entities is sold off by 1994 as the company focuses on its core business.

1990 — Avon enters China as a direct seller, moving to a retail model in 1998 when the government bans direct selling.

In 2006, Avon resumes direct selling when the Chinese government lifts the ban.

1999 — Andrea Jung named first female CEO. 2012 — Sherilyn McCoy named to succeed Jung.

Source: Avon Products Inc.

Avon through the years

1886 — Traveling book salesman David McConnell starts the California Perfume Co. after realizing women are far more interested in his perfume samples. He recruits his first female sales representative, a 50-year-old wife and mother of two named P.F.E. Albee.

1895 — The company opens a manufacturing headquarters in Suffern, N.Y.

Mark McNulty is a business coach with ActionCoach Business Coaching. He can be reached at 372-7377 or mark@ coachmark.biz.

10 The Business Connection May 2012

Flexibility can mean longer commutes

By Tim Logan St. Louis Post-Dispatch

ST. LOUIS — Every Tuesday Teri Dobbins-Baxter starts her commute at 4 a.m. She leaves home in Chicago and goes to Midway Airport, where she hops a flight to St. Louis. Then she makes her way to St. Louis University, where she is a law professor. She spends two days teaching and flies home Wednesday night.

The ranks of people like DobbinsBaxter — who live in one metropolitan area but work in another — are growing fast. Technology continues to untether employees from their workplaces, while the weak job market and a lousy housing market have many families reluctant to relocate.

A study by New York University found that the jobs with this sort of arrangement climbed sharply in eight of 10 metro areas from 2002 to 2009.

Some of these people work from home for companies in a different region. Some are traditional road warriors who travel all over. Some, like Dobbins-Baxter, have a regular com-

mute — just one that spans states instead of a county line.

Regardless, said Mitchell Moss, the NYU professor who authored the study, the trend speaks to both the increased flexibility of modern-day workers — “the office” can be almost anyplace — and the challenges facing two-income families in a weak job market: Why uproot your family when your spouse can’t get a job in the new city?

The trend illustrates how the economies of places like St. Louis are increasingly hitched to their neighbors.

“It tells you that there is an interregional economic relationship, which is growing between places like St. Louis and Chicago,” Moss said. “A region’s workforce is not defined by its immediate suburbs.”

It also has implications for the people who live and work this way. Take Dara Taylor. She works for a Boston health care policy nonprofit from her apartment in St. Louis, where she’s from and where her boyfriend and family live.

About a year and a half ago, she became

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the nonprofit’s first remote employee.

“Everything I do is by phone or email or by travel,” said Taylor, who has worked for the organization for two years. “Because that’s the case, I can work from another city.”

So she spends a lot of time on Skype and conference calls with colleagues from the home office. She travels two or three times a month to other states and occasionally back to Boston. In some ways, this arrangement is more flexible, but Taylor said she finds it forces her to be more efficient.

“You’d think you can just roll out of bed and log in,” she said. “But it requires a great deal of discipline. I actually work more (here) than I did in the office. It probably has to do with making up for not being there in person.”

Then there are those for whom the road is the office. Jason Stokes lives in St. Louis but works in quality improvement for a Dallas-based company that makes pumps and seals for oil wells and power plants. He visits projects all over

the world.

“Last year I spent 190 nights in hotel rooms,” he said by phone from Los Angeles, where he’s wrapping up a three-week stint before heading to Virginia and then India. “That was actually less than some years.”

All the travel’s not so glamorous, Stokes said, and it’s exhausting. While he spends most weekends and off days at home, he misses his wife — who is in graduate school at Washington University, which is why they live in St. Louis — and their 9-month-old son.

But he tried office life for a while and found the 9-to-5 routine just wasn’t for him.

“It requires a real mind-set change,” Stokes said. “I wasn’t ready for it.”

All these things — family, housing, the complexity of managing two careers in a weak job market — are big reasons why this sort of two-city existence is growing. Add in employers who are willing to be more flexible and technology that enables it, and Moss said he expects that growth will continue.

chamberconnection May 2012 Growing BUSINESS. Growing people.

Monthly publication of the Columbus Area Chamber of Commerce • 500 Franklin Street • Columbus, IN 47201 • 812-379-4457

Chamber offers health challenge for small businesses

BY BORIS LADWIG bladwig@therepublic.com The Columbus Area Chamber of Commerce in June will launch a small business health challenge that will involve games, prizes and, it hopes, healthier employees.

The Kenko Challenge (kenko is the Japanese word for health) is billed as a “Biggest Loser” meets “Amazing Race” event that aims to encourage businesses and their employees to eat better foods and live a more active lifestyle.

The Chamber is working with Reach Healthy Communities to convince about 20 small businesses (with 20 or fewer employees) that small changes and investments can result in big rewards.

Big businesses have financial incentives, such as lower health insurance costs, to take steps to improve their employees’ health, but

small businesses, many of which don’t offer health insurance, often don’t understand the savings they can realize, said Kristin Munn, the workplace initiatives lead at Healthy Communities.

Studies show that healthy employees are more productive employees, Munn said, and small businesses lose a lot of their productivity when just one employee has to miss work because of health reasons.

Amber Fischvogt, director of Enterprise Columbus, said many small businesses simply lack the time and money to redefine healthy be-

havior.

The Kenko Challenge, which is expected to run for three months, aims to make work and health so much fun that participants do not realize that they are doing either, Fischvogt said.

Businesses will get points for activities, such as offering healthy snacks in vending machines at a lower price, making water available and offering a small refrigerator so employees can bring lunches.

Businesses also will get points for changing procedures that will make employees more active, such as having meetings while walking —

rather than sitting in a conference room. Employees will get points for being active, keeping track of their physical activities and nutrition and sharing photos and videos of their activities through social media.

Prizes still are being collected but will include gift certificates.

Munn said she hopes that changes at work will prompt employees to make changes at home, benefiting their families and creating a healthier community.

“We want them to see wellness as something that’s being done for them — rather than to them,” Munn said.

Organizers also hope that businesses copy one another’s best ideas to broaden the initiative’s impact.

Businesses interested in participating can contact the Chamber at 379-4457.

Calendar: Register to attend events at www.columbusareachamber.com/events Check the Web site calendar for all upcoming events.

May 1 — Ribbon cutting, New Start Health Center, 11:30 a.m.

May 10 — Ribbon cutting, The Savory Swine, 4:30 p.m.

May 3 — High Tech Happy Hour, 4-6 p.m., IU Center of Art and Design. Your chance to see the newest, greatest and coolest tech gadgets. We’ll be offering many ways to see how technology can improve your productivity and efficiency.

May 11 — Ribbon cutting, MainSource Bank, 3:45 p.m.

May 11 — TEN Networking Roundtables, 8 a.m., Visitors Center. Structured networking designed to expand your network and grow your business.

May 15 — Women’s Professional Development Conference, 8 a.m., Clarion Hotel and Conference Center. Educate, motivate and inspire. We’re happy to be bringing back this popular event for women to learn, grow and network.

May 17 — Ribbon cutting, Zen Fitness, 11:30 a.m.

May 23 — Open Board Meeting, 11:30 a.m. BCSC administration building. Open board meeting featuring education segment and the members’ chance to see how the Chamber board conducts business.

2012 Chamber Board of Directors Tim Millwood Cummins Inc. John Burnett Community Education Coalition ike declue Tre Bicchieri Brad Davis, Past-Chair Centra Credit Union Linda DeClue Bartholomew Consolidated School Corp.

Paula Hartwell, Chair Administrative Resources charlie farber, Chair-Elect MainSource Bank UMAR FAROOQ SIHO John Hogan Ivy Tech Community College Amy Kaiser First Financial Bank Michael Oakes IUPUC Tom harmon Taylor Bros. Construction Mike Rossetti The Republic Ron Sewell CEDC Marlene Weatherwax Columbus Regional Hospital Evan Werling, Treasurer Werling Management Group LuAnne Whewell Indiana Bank and Trust

Ex-Officio Members kristen Brown Mayor of Columbus chip orben Duke Energy/Economic Development Board Dave Galle Community Education Coalition Carl Lienhoop County Commissioner Lynn Lucas Visitors Center donna robertson Hope Chamber of Commerce

Hackers’ Holiday tournament returns Wikipedia defines golf as a precision club and ball sport, in which competing players (or golfers) use many types of clubs to hit balls into a series of holes on a golf course using the fewest number of strokes.

The Chamber defines golf as a way to get out of the office, entertain clients, reward employees and have fun. It’s also a great way to support the programs and events of your local Chamber.

We call our tournament Hackers’ Holiday because all skill levels are welcome. We would love for you to join us for a day spent at the beautiful Otter Creek Golf Course on June 13. Tee time will be 12:30 p.m., with lunch being served at 11:30 a.m.

You can participate in several ways:  Get a team together or sign up individually and we’ll team you up.  Buy a tee sign. This gives your company vis-

ibility without having to swing a club.  Sponsor a hole. This gives you the opportunity to be on the course, interacting with golfers (aka potential clients) and enjoying the sunshine.  Sponsor lunch. Why not go all out and sponsor the golfers lunch? Signs and recognition throughout the day.  Sponsor the carts. Put your logo on all the carts used the day of the outing. Gives your company great exposure on the green for not a lot of green.

To sign up golfers, go to www.columbusareachamber.com/events. To sponsor, please email or call Kami at 379-4457/kadams@columbusareachamber.com You do not have to be a member to play golf, but we ask that sponsors be limited to Chamber members.

Sign up now as space is limited.

The ribbon-cuttings also appear in The Republic. For addresses and phone numbers of Chamber members, visit our online directory at www.columbusareachamber.com or call 379-4457.

Women’s Professional Development Conference May 15 Clarion Hotel & Conference Center Register at www.columbusareachamber.com/events Sponsored by:

Also sponsored by Pentzer Printing, Faurecia, Custer Foundation, Sharpnack Bigley Stroh & Washburn LLP, PNC Bank

New members

First Financial Bank 125 Third St. 372-0111 Mayor Kristen Brown performed the ribbon-cutting ceremony for the new First Financial Bank banking center and office complex. President and CEO Claude Davis was joined by employees, customers and business associates. Members of the Chamber Action Team were also present. At the new banking center, clients will find a full complement of retail, commercial and wealth management services to help them take another step on their path to success.

Expert Eyecare Edinburgh Marshall Zamora 812-526-2020 drzamora@experteyecare.net 210 W. Main Cross, Edinburgh IN 46124

Miller’s Power Wash Inc. Phillip Miller 812-934-4694 phil62457@frontier.com 359 S. Indiana 129, Batesville IN 47006

WTIU Public Television Scott Witzke 812-855-5068 scwitzke@indiana.edu 1229 E. Seventh St., Bloomington IN 47405

Pilgrim Communications LLC Randall H. Tipmore II 317-937-2378 randy@freedom959.com 645 Industrial Drive, Franklin IN 46131

Leadership Potential Consulting Elise Foster 317-660-1164 foster.elise@gmail.com 1929 Franklin St., Columbus IN 47201

New-Start Health Center Trent Mozingo 812-799-0658 tdmozingo@gmail.com 3780 W. Jonathan Moore Pike, Suite 160, Columbus IN 47201

Special invitation for Chamber members Each year, the Board of Directors of the Columbus Chamber hosts a luncheon board meeting open to all members that delivers a special report from the leadership of Bartholomew Consolidated School Corp.

At this meeting, BCSC will provide important updates about the progress of the high school renovation project and present changes that are under way with K-12 education as it relates to the business community. School officials will also listen to your feedback and address questions you may have.

Few things are more important to the future of our business community than the quality of our K-12

High Tech Happy Hour The Columbus Chamber is launching High Tech Happy Hour as the premier networking event in our community. Come network with local business professionals, enjoy free appetizers, a cash bar and meet new people.

We invite you to the High Tech Happy Hour networking event.

WHEN: 4 to 6 p.m. May 3 LOCATION: IU Center for Art and Design, next to Yes Cinema High Tech Happy Hour and its sponsors are excited to be bringing you an evening of entertainment, free appetizers and drinks, as well as the opportunity to meet your local business professionals while learning about the newest applications and technology to make you more efficient at work and in your personal life.

educational system. For this reason, the presence of your leadership is requested.

What: Open Chamber board meeting with BCSC. When: 11:30 a.m. May 23 Where: BCSC Administration Building, Terrace Garden Lower Level, 1200 Central Ave. This open board meeting is also a great way to keep up with the important work of your Chamber.

As we have limited seating and lunch is provided, please register online at www.columbusareachamber.com/events. Email Kami Adams (kadams@columbusareachamber.com) with any questions. Cost of lunch is $16.

TEN meeting will facilitate connections TEN presents: TEN Connections Networking Roundtables 8 to 9:30 a.m. May 11 Columbus Area Visitors Center, Barbara Stewart Room This month’s TEN meeting will be focused on helping you make new connections with fellow Chamber members and other attendees.

Join us for a fun, structured event where you will participate in an interactive roundtable discussion designed to help you make the best connections for your business and others, and to start building new strategic business relationships.

Due to the uniqueness of this event, we need to know the attendees’ names ahead of time, so registrations are required.

Sponsored by NW Mutual, Centra Credit Union, Prestige Printing and Blue & Co.

May 2012 The Business Connection 11

Builders offering two homes in one

By Amy Taxin Associated Press

LOS ANGELES — It’s a home within a home — and it could be coming soon to a home near you.

Builders across the country are revamping home designs to meet the needs of a growing number of Americans who are now living with extended family.

The number of so-called multi-generational households — where adults are living with their elderly parents or grown children — has jumped since the Great Recession forced Americans to rethink living on their own.

Demographic experts say it’s poised to rise further as baby boomers age, socalled “boomerang kids” walloped by the weak job market stay home longer and ethnic groups such as Asians and Hispanics, who are more likely to live with extended family, continue to grow.

The housing industry is trying to keep up with the changes by adding self-contained suites to single-family homes from North Carolina to California to enable families to stay close while retaining a greater degree of independence.

“It’s not the nuclear family, the American dream family that we see all the time,” said Jerry Messman, a partner in national design firm BSB Design.

“The builders are starting to respond to it.”

After World War II, Americans were encouraged to move out of their parents’ house when they reached adulthood and achieve independence at an earlier age. Over the next few decades, young families ventured out to live on their own, separately from their parents, in traditional single-family homes.

Since 1980, however, the number of families living in multi-generational households has steadily climbed, buoyed by a wave of immigration and delayed marriages. After the onset of the Great Recession, the number jumped even higher — rising 10.5 percent in a twoyear period so that nearly 17 percent of Americans lived in multi-generational households by 2009, according to a report by the Pew Research Center.

During the last year, builders and home designers have started to respond to the trend by rolling out layouts for single-family houses that include a semi-independent suite with a separate entry, bathroom and kitchenette. Some

associated press

Lennar Homes sales manager Joy Broddle, left, talks with Kelly and Bill Noorish in a model home in Las Vegas. The Noorishes have a multigenerational home under construction.

suites even include their own laundry areas and outdoor patios for additional privacy, though they maintain a connection to the main house through an inside door.

Reanna Cox, 33, bought a new home earlier this year in San Bernardino with a suite that connects to her kitchen through a hallway. Initially, Cox and her husband planned to have his aging parents live there. But when her sister lost her job, Cox invited her to move into the suite with her young daughter.

“It’s somewhere they can live to get themselves back on their feet,” said Cox, who moved to the tan, five bedroom house with caramel-colored shutters to shorten her daily commute.

Lennar Corp., based in Miami, is offering 3,400-square-foot homes that include a roughly 700-square-foot suite in Las Vegas. Standard Pacific Homes of Irvine is offering a self-contained “casita” attached to the main house as an option on its new designs.

Both companies say the plans have been popular since they were rolled out last year.

But it isn’t clear what share of homebuyers will buy these homes — especially since immigrant families from Asia and Latin America who have traditionally lived together have long found ways to do so without this option, said Gary Painter, research director at the University of Southern California’s Lusk Center for Real Estate.

“There certainly is a demand to be

close,” Painter said. “We just don’t have enough in the market to make a definitive statement about whether this sort of kitchenette living or guest house nearby will become a next wave.”

But in higher-end markets, Painter said it’s more likely such plans could prosper, including among well-to-do immigrant families.

New home sales have struggled as builders face competition from foreclosures and short sales. While sales of previously occupied homes have risen more than 13 percent since July, sales of U.S. new homes fell in February for the second straight month and remain well below levels that economists consider healthy.

Lennar is offering its “Next Gen” designs in states ranging from California to Texas to Florida. Sales of these multigenerational homes account for a small percentage of the company’s sales but are growing quickly, said Jeff Roos, Lennar’s western regional president.

Builders say the tendency to live together longer comes down to a matter of economics as families of varied ethnic backgrounds cope with the wake of the recession and the needs of aging parents, who may have seen their retirement savings depleted in the downturn.

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12 The Business Connection May 2012

Small businesses see improvements

By Joyce M. Rosenberg AP Business Writer

Some diners at Hurricane Grill & Wings had been limiting themselves to a small order of the chain’s saucy chicken wings and a glass of tap water.

These days, many of those people are upgrading to a bigger order of as many as 15 wings and a soda.

For Hurricane Grill, which sells its wings in more than 30 varieties of sauces, the larger plates and the sodas are a sign that customers are OK about spending more when they go out to eat.

The evidence may not be a big economic report like gross domestic product or factory orders in a region, but small businesses have their own indicators that the economy is improving.

People who held onto their jobs during the recession are familiar with the scenarios. The company-sponsored doughnuts disappeared from the morning meeting. Training classes that previously included a catered lunch were traded in for brown-bag sessions.

“Bring your own bagel into the meeting, we’re not going to serve you breakfast,” was the message companies gave employees, says Tom Walter. His company Tasty Catering, based in Elk Grove Village, Ill., provides catering to corporate clients.

When companies did serve food at staff meetings, they found ways to cut costs, Walter says. Strip sandwiches like 6-foot heroes were served instead of individual sandwiches. Turkey and brie on artisan breads were replaced by turkey and Swiss on whole wheat.

During the worst of the economic downturn, Tasty Catering was forced to let one full-time employee go.

Fortunately, Walter found another job for that staffer elsewhere. He avoided other layoffs of full-timers in late 2008 because his staff offered to cut their hours to 25 per week, from 40, for three months.

On the upswing

Last fall, things began to change.

Clients who had stopped feeding employees started ordering again.

Companies that had gone downscale began ordering more expensive food.

Four months ago, many clients had whittled down their catering bills to about $10 person. More recently that’s crept up to as much as $13 per person. The most popular dish these days is champagne chicken. In the leaner times, brisket of beef was a hot item.

It’s cheaper because it takes less labor to prepare.

“We had the busiest November we’ve ever had,” Walter says. “March looks like it’s going to be the busiest ever.”

The increased spending isn’t just fueled by an improvement in his clients’ businesses, Walter says. Companies are worried about losing their best staffers, “so they’re giving their employees more rewards.”

Sprucing up

When the financial crisis hit in September 2008, many companies stopped worrying about decor. Sluggish sales and the threat of layoffs pushed lush lobby plants and holiday displays

Martin O’Dowd’s customers at the Hurricane Grill and Wings in Lake Worth, Fla., are spending more freely now when they go out to eat.

Employees of Tasty Catering and CEO Tom Walter, second from right, share lunch every day in the company kitchen in Elk Grove Village, Ill., as they work toward financial success.

Business is rebounding at Reema Khan’s chain of s.h.a.p.e.s Brow Bars, eyebrow threading salons in six states.

Associated press photos

May 2012 The Business Connection 13

off the priority list. Sales fell 30 percent at Parker Cos., a Scotch Plains, N.J., company that does interior landscaping and displays in the Northeast.

Parker’s sales remained down through 2011. Hotels and office buildings that never used to think twice about spending $30,000 for a holiday display were now spending $8,000 says William Note, Parker’s creative director. On top of that, law firms and other clients stopped paying to have indoor foliage maintained and replaced, even in high-profile places like reception areas. Planters were empty or had leafless stalks. Or the plants were barely alive “with dead leaves hanging down from them,” he says.

In the last quarter of 2011, Note noticed that many companies decided to start sprucing up. The number of proposals that Parker has written for customers this year is up 60 percent from a year ago.

But companies aren’t spending freely.

Note says some clients want to replace their plants, but they’re no longer buying flowers for reception desks and other public areas. They’re choosier, asking companies like Parker to bid on projects — something that wasn’t the

O’Dowd says business started dropping off in 2008 and began to pick up in the fourth quarter of last year.

Threading again

Creative director William Note stands with trays of flowers at Parker Gardens in Scotch Plains, N.J., where business proposals are up 60 percent from last year.

practice five years ago.

Note is trying to make impressive displays for less money. “I’m trying to be as creative with nothing as I possibly can,” he says.

15 wings and a Coke Customers at Hurricane Grill & Wings are eating and spending more.

People who limited themselves to orders of five chicken wings during the reces-

sion and its aftermath are now chowing down on 10 or 15. They’re also ordering more appetizers and entrees.

Another big change: People who had asked for a glass of water are now ordering sodas. That’s $2.50 on the check instead of nothing.

President Martin O’Dowd says the average check per person at his company’s 45 restaurants in six states has risen 7 percent from a year ago.

FOR

For many women — and some men — keeping their eyebrows in perfectly arched shape is a weekly affair.

At least that was the way it was until 2008’s financial crash.

Around that time, Reema Khan, who started her Cerritos, Calif.-based s.h.a.p.e.s Brow Bar salons in 2003, noticed that women who had come in weekly started visiting less often. She estimates about 30 percent of her male customers continued to come in.

Lower traffic made it harder to sell additional services, like facials and henna tattoos. Before the recession, the average bill at s.h.a.p.e.s was $15 to $20. It dropped to $10.

Khan says some customers didn’t want to pay tips, which made for unhappy employees.

Business has picked up this year at the company, which has more than 65 locations in six states. Customers are coming in more often. Valentine’s Day was a particularly good day.

“We didn’t expect it, but we were crazily busy,” Kahn says.

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14 The Business Connection May 2012

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1921 CREEK BANK DR $152000 NEW 3590 SF RES/GAR BEAZER HOMES OWNER/ CONTRACTOR

2098 PAWNEE TR $320000 NEW 4907 SF RES/BMT/GAR THOMPSON CONSTRUCTION OWNER/CONTRACTOR

10431 W BELLSVILLE PK NEW COMMERCIAL BUILDING $50,000 GRANDVIEW LOT OWNERS MITCHELL & STARK CONSTRUCTION NEW ELEC ACCESSORY BLDG 400 SF

2063 CREEKSTONE DR $117000 NEW 2570 SF RES/GAR BEAZER HOMES OWNER/ CONTRACTOR

6114 PELICAN LN $300000 RES/NEW 5234 SF M/I HOMES OF INDIANA OWNER/ CONTRACTOR

2028 CREEKSTONE DR $86000 RES/NEW 1709 SF BEAZER HOMES OWNER/ CONTRACTOR

6115 PELICAN LN $259220 NEW RES 3228 SF M/I HOMES OF INDIANA OWNER/ CONTRACTOR

2033 CREEKSTONE DR $82000 NEW 1709 SF RES/GAR BEAZER HOMES OWNER/ CONTRACTOR

8733 PINE LAKE COURT WEST $200000 3093 SF 2ST/GAR HARRIS, DAVID L OWNER DONICA CONSTRUCTION CONTRACTOR

304 WASHINGTON ST COMMERCIAL REMODEL $89,400 CITY OF COLUMBUS DESIGN & BUILD OF COLUMBUS COM REMODEL 1750 SF/SUBWAY & SNAPPY 2425 NORTHPARK DEMOLITION FREYERMUTH, STEPHANIE OWNER BRINKMANN CONSTRUCTORS CONTRACTOR DEMO INTERIOR COM BLDG 2425 NORTHPARK COMMERCIAL REMODEL $1,000,000 FREYERMUTH, STEPHANIE OWNER BRINKMANN CONSTRUCTORS CONTRACTOR COL SURGERY CENTER REMODEL 5361 SF 8111 E 450 N COMMERCIAL REMODEL $20,000 SIMMONS, DAVID W OWNER/ CONTRACTOR SIMMONS WINERY/RESTAURANT

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May 2012 The Business Connection 15

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16 The Business Connection May 2012

Big talk about small business is wrong

By Bernard Condon and Matthew Craft AP Business Writers

NEW YORK — Mitt Romney says they’re “job creators” and vows to come to their aid as president. Newt Gingrich visited them on his “jobs and growth” bus tour. President Barack Obama calls them “the engine of our economy.”

If there’s one thing Republicans and Democrats agree on, it’s that small business is the answer to what ails the economy. On these tiny bundles of entrepreneurial energy, they say, rides the nation’s hope for lower unemployment and faster economic growth.

But the work of several economists suggests that most small businesses are not particularly adept at creating jobs, at least not the best jobs. The work also suggests their role in generating national wealth has been exaggerated.

The problem is that not all small businesses are created equal. Businesses just getting off the ground contribute most of the country’s job growth, but older small businesses cut as many as they add.

Think Bill Gates and Paul Allen huddled together late nights developing Microsoft, not the corner liquor store.

“I don’t want to pick on dry cleaners and restaurants and small manufacturing firms, but they’re not a big source of job creation,” says John Haltiwanger, an economist at the University of Maryland.

Politicians like to say that small companies create two of every three jobs in a given year. That’s less impressive when you consider that almost all the

of companies over 30 years, that small businesses no more than five years old — that’s about 40 percent of them — are the only ones that create more jobs each year than they cut.

In 2005, for instance, more than 99 percent of the 2.5 million net new private-sector jobs in the United States came from these startups, according to the U.S. Census Bureau.

But the 60 percent of small businesses that have been around more than five years act as a slight drag on the number of jobs available in the United States. They have cut about 0.5 percent more staff than they have added in a typical year, according to Haltiwanger.

By contrast, big businesses, the ones that get all the headlines for layoffs, have hired more than they have cut — about 0.1 percent in a typical year.

Wrong approach associated Press

Eddie Atchouke, co-owner of the Dough bakery, frosts doughnuts in Brooklyn, N.Y. He started his business in 2010 and has 15 employees making up to 2,000 doughnuts daily.

6 million companies in the U.S. — 99.9 percent of them — are small businesses, with fewer than 500 workers.

What’s more, two-out-of-three masks the fact that most small businesses eliminate more jobs than they create in a given year, either through layoffs, closings or bankruptcy.

And many of the rest, the ones that don’t shrink or shut down, don’t offer much hope for the millions of Americans looking for jobs.

Little help for economy

Many small companies — outfits

like florists, hardware stores and barbershops — tend to grow with the U.S. population, not faster. So they don’t speed the economic recovery the way an exploding new industry might.

According to an August study by two University of Chicago economists, most small business owners just want to be their own boss and never expect to hire more than a few employees.

In fact, the more you study the numbers, the more you wonder what the politicians are getting so excited about.

Haltiwanger and two other economists showed, in a study of millions

Economist Charles Kenny of the New America Foundation, a nonpartisan research group, goes as far as suggesting that Washington should stop offering certain incentives to small business owners, such as loan guarantees and write-offs on taxes for home offices. He says the money would be better spent subsidizing research and development.

“If you want jobs, you have to focus on the innovative firms trying to provide something new and different,” he says.

The country’s unemployment rate is 8.3 percent, the lowest in three years. But the U.S. still has 5.6 million see small biz on page 18

County regroups after factories fizzle Associated Press

MUNCIE — Delaware County has pulled back on its financial support for a pair of companies whose promised factories and hundreds of jobs haven’t panned out.

The Delaware County commissioners approved withdrawing $5 million of property tax support for Italian company Brevini Wind, which in 2009 announced plans for a 450-worker factory in Muncie that would build gearboxes for wind turbines.

Brevini now has 70 workers in Muncie and will still receive $1.7 mil-

lion in tax increment financing revenue.

County officials are allowing the other company, VAT Energies, to sell some unused wind-and-solar-powered streetlights that it expected to build in Muncie. The county hopes to recoup $250,000 it paid for a wind vane that was to have been erected along Interstate 69 meant to brand Delaware County as a green manufacturing hub.

“It’s a hard lesson learned,” county Commissioner Larry Bledsoe said about the agreements. “This is the best that it gets, unfortunately.”

Commissioners President Todd

Donati acknowledged that the agreement with VAT meant that the 100 jobs promised by German businessman Oliver Viehweider would never materialize.

Donati said the county would “get what we can, up to $300,000” from the sale of the unused VAT streetlights and save thousands of dollars from a potential legal battle.

“At least we get the $300,000, and we can move on,” he said.

Brevini Wind has struggled to land projects in the troubled wind-energy industry. Company officials hope to

win contracts in other businesses in an effort to employ 250 people by the end of 2013 under an extension of the company’s job-creation incentives with the county.

Bledsoe said that VAT’s failure was an unfortunate outcome of the pressure on communities to add jobs, especially in the wake of the recession.

“It’s the result of very aggressive competition among local communities trying to get economic development,” he said. “You offer the best incentive you can. Unfortunately, some things don’t work out.”

May 2012 The Business Connection 17

New distribution center JEFFERSONVILLE — Amazon.com Inc. plans to open a warehouse and distribution center in southern Indiana for what will be its fifth large facility in the state. Amazon announced it would spend about $150 million on the center in Jeffersonville and that it could have some 1,000 employees there by 2015.

Amazon’s announcement follows a deal it made with Gov. Mitch Daniels in January to begin collecting Indiana’s 7 percent sales tax from customers in the state in 2014. Many Indiana retailers objected to the deal, saying it put them at a price disadvantage.

Amazon has similar facilities in Indianapolis and the suburban communities of Whitestown and Plainfield.

Around the watercooler

Greeting card company closing BLOOMINGTON — A greeting card company is eliminating 90 jobs in southern Indiana as it moves business operations of a subsidiary to Missouri.

The decision by Kansas City-based Hallmark Cards to shift the Sunrise Greetings jobs from Bloomington comes about two years after Hallmark stopped manufacturing work in the city.

Sunrise Greetings was founded in Bloomington in 1974. At its peak in the late 1990s, it employed about 700 people. Hallmark bought Sunrise in 1998.

Staffing company growing BLOOMINGTON — An employee staffing and recruiting company plans to expand its southern Indiana headquarters and add workers there and at other branches around the state.

Employment Plus Inc. announced it would spend nearly $1.2 million on leasing and equipping a new main office in Bloomington that it moved into this month. The company says it recently opened offices in Elkhart, Fort Wayne, Goshen and Lafayette.

It provides staffing, recruiting and human resources services to more than 1,000 customers in the light manufacturing, transportation, construction, health care and call center businesses.

The company has about 170 fulltime employees at 20 Indiana locations.

It anticipates adding up to 300 positions in Bloomington and elsewhere in the state by 2015.

Manufacturer expanding ALBION — A manufacturer plans to expand its operations in northeastern Indiana, possibly adding up to 120 workers over the next few years.

Busche Enterprise Division Inc. says it will spend about $17 million to buy, expand and equip a 36,000-square-foot factory near its headquarters in the Noble county town of Albion.

The company now has about 550 workers making castings and forgings that are used by companies that include John Deere and General Motors.

Busche plans to start expansion work on the new plant this fall and start production there next year.

Distribution center adds jobs GREENCASTLE — A renovated clothing distribution center could bring more than 100 jobs to Greencastle.

Executives from Charming Shoppes, Inc. said they’d make a multi-million dollar investment to expand their Greencastle center. Gov. Mitch Daniels joined the owners of women’s plussized apparel stores Lane Bryant and Cacique for the announcement.

The clothing center will be able to serve up to 2,300 stores when upgrades are complete and could add up to 135 new jobs by 2014.

Charming Shoppes has had a center in Greencastle since 1987. It currently supplies more than 800 stores and has close to 200 employees.

No loan for police car factory CONNERSVILLE — Gov. Mitch Daniels and an eastern Indiana company that planned to build high-tech police cars slammed the U.S. Department of Energy after the agency rejected the

company’s bid for a $310 million loan.

Carbon Motors Corp. in Connersville said it was studying its alternatives after being turned down for the loan under the Advanced Technology Vehicle Manufacturing program. It had planned

to hire 1,500 people to build its police cars in a former auto parts factory.

Anderson-based Bright Automotive announced it was folding after failing to receive a similar loan for $450 million. Executives sent a letter to Energy Secretary Steven Chu expressing the frustrations they experienced as they sought funding under the program.

Rolls-Royce to open plant INDIANAPOLIS — Rolls-Royce Corp. will spend $42 million to turn a vacant building near Indianapolis International Airport into a new manufacturing plant the British engine maker said will create 100 new jobs by 2014.

The new plant will produce compressed banded stators, which are stationary sets of blades mounted around a jet engine to handle air flow off the rotors. Those components will go into the Trent XWB, a civil aircraft engine that powers the Airbus A350 XWB, which is scheduled to fly for the first time in 2013.

Rolls-Royce said the plant will also produce components for the Trent 1000, AE engine series and T56 turboprop engines.

— Wire Reports

18 The Business Connection May 2012

It’s not over till it’s over Whenever I tell an audience that the recession is over and that the recovery is over, they look at me in disbelief.

When I say further that we are now in an economic expansion, they laugh.

My statements are correct. They are statistically valid, but not consistent with everyone’s experiences and Morton Marcus expectations. Imagine the economy as an auto race. Not all cars move at the same speed. Many cars may lag well behind the leaders, and some may have been forced out of the race by defect or accident.

The race course itself is not the same for each participant. Some go down a steep hill and then must climb back up a twisting road. Others are able to stay on relatively flat, straight ground.

While the winners may have the fastest average speed, those in the back may actually be traveling faster when the

checkered flag is waved.

If this seems confusing, it is, nonetheless, a simplified view of economic realities. In the economy, the race is never over, and relative positions may change rapidly.

Yes, the national recession and recovery are over. We are in an expansion phase of the business cycle, if, as usual, we measure economic activity by Gross Domestic Product (GDP). But if we look at components of Personal Income (PI), the story is less clear.

For 2011, the income of people from all sources, including wages, rent, interest, dividends, Social Security, unemployment compensation, etc., grew in Indiana just a tad slower than in the nation (5.04 percent compared to 5.08 percent). That’s not bad, although we could hope for better results.

What is disturbing, and not to be forgotten in our euphoria over being just less than average, is Indiana’s performance over longer periods of time.

From 2008 to 2011, the recession and

recovery phases of the business cycle, PI in Indiana grew by 3.3 percent and the United States advanced by 4.3 percent.

That small difference left Hoosiers shy $2 billion in income in 2011 alone compared with just keeping up with the nation’s PI growth.

The case deteriorates further when considered in a longer time span.

From 2001 to 2011, over two recessions, two recoveries and one mighty expansion, PI in Indiana grew by 35 percent while the nation grew by 46 percent.

Those who wish to make the point Indiana is improving, that our marginal or more recent experience is better than in years past, they have data to do so.

From 2010 to 2011, Indiana’s PI growth ranked 20th in the U.S. among the 50 states. We ranked 39th from 2008 to 2011 and a sad 48th from 2001 to 2011. This pattern qualifies as continuous improvement.

This bucket of good cheer, however, has a hole in it.

All of the data cited to this point have been without adjustment for inflation. When we do make that adjustment, the water turns darker.

Indiana’s per capita PI in 2011 was below its 2001 level. (This is not true for the nation.) Most of that deficit can be blamed on the recession. It would have been worse except that Indiana’s population did not grow as rapidly as did the nation’s. Our failure to attract and retain population makes our numbers look better than if we offered a more promising future.

In the perpetual economic race, Indiana has advanced its relative position recently, but it has to overcome much of its sluggish performance for the decade past. Our accumulated income deficit partially explains our diminished public services and deteriorating human and physical capital.

small biz continued from page 16

human resource departments, legal staff and vast resources like big businesses.

To comply with federal regulations on the environment, for instance, companies with fewer than 20 workers spent $4,101 per worker in 2008, or four times more than companies employing 500 or more, according to the Small Business Administration.

The same study showed these businesses spent three times more per worker on tax preparation than did their larger counterparts.

“As regulatory complexity increases, it’s hard on small firms,” says William Dunkelberg, chief economist at the

National Federation of Independent Business, a group closely allied with Republicans. “We need to get government out of the way.”

But many economists think the root of the job problem is deeper.

Again, it’s the difference between old small businesses and new small ones, and the U.S. is not creating enough of the new ones.

It was true even before the Great Recession: The number of startups less than a year old was no higher in the boom year of 2006 than it was 30 years ago, when the economy was much smaller, according to the Census Bureau. And the ones that are launching are hiring fewer people, too.

The grim takeaway is that the U.S. could struggle with high unemployment long after a pickup in economic growth.

Even the idea that small businesses play an outsized role in the economy has come under attack lately.

A study from the left-leaning Center for Economic and Policy Research shows that the self-employed worker, that rugged exemplar of the small businessperson, accounted for less of the working population in the U.S. than in the other 20 rich countries tracked, except for Luxembourg.

Another study by economists at Harvard and Dartmouth suggests that might not be such a bad thing because poorer countries are more likely to have a higher share of their workers self-employed.

Adding fuel to the argument, Kelly Edmiston, an economist at the Federal Reserve Bank of Kansas City, showed that workers at small businesses are more likely to lose their jobs and less likely to have vacation days, retirement plans and a range of other benefits, including health care. Some 41 percent of companies employing less than 100 people offered no medical insurance at all.

So, myths about job creation aside, why isn’t the U.S. launching more startups? The risky economy, regulations or health care costs — a bigger burden for small companies — could be scaring them off.

Haltiwanger thinks demographics may be at work. He says businesses are often started by people in their 30s and 40s. So as the population ages and more baby boomers retire, the number of startups falls.

“We’re a roll-the-dice economy. It has a lot of spillover effects,” he says.

“But we’re not experimenting enough.”

fewer jobs than before the recession.

Assuming the pace of hiring from last year continues, it will take three years to recover all the lost jobs.

Small businesses aren’t helping much.

They cut more workers than they hired in all but three months last year and contributed zero to job gains again in January, according to a survey by the National Federation of Independent Business.

To change that record, Republicans say Obama needs to cut federal rules and paperwork that are burdensome for small businesses that don’t have

Morton Marcus is an independent economist, writer and speaker formerly with the IU Kelley School of Business.

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