Thinking Bigger Business—March 2018 by Thinking Bigger Business Magazine

VOL. 27 // ISSUE 3 // MARCH 2018

GETTING IN GEAR Orange EV is driving change through electric vehicles.

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CONTENTS

MAR CH 2018 VOL. 27 // ISSUE 3

IN FOCUS

44 Banking Taking on debt isn’t always a bad idea for a small business— if it’s done the right way, at the right time.

D E PA R T M E N T S

07 The Bigger Picture 08 Legislative Briefs 08 Biz Bits 11 BIG | deals 14 25 Under 25 ® Updates 49 BIG | talk 50 BIG | shots

F E AT U R E

26 Tracking Tinsel Town Trends Changes rippling through the movie theater industry are keeping local companies busy.

S M A R T S T R AT E G I E S

32 BIGGER | profile A Palatable Partnership

34 BIGGER | hr Invest in the Power of Training

35 BIGGER | law 6 Employment Issues Every Small Business Should Address

22 | KC ENTREPRENEURS HE ON T R E V CO

36 BIGGER | growth Develop the Road Map for Your Company’s Future

Orange EV helps businesses and government entities

39 BIGGER | tech

go green with all-electric heavy-duty vehicles.

Productivity Tools for Professionals on the Go

16 4

THINKING BIGGER BUSINESS // March 2018

TRUCKING AHEAD B IG I N F LU E NC E

| 18

B IG S TA R T S

| 18

MADE TO LAST

Chuck Kriha, production lead, builds part of a vehicle control box for OrangeEV’s electric trucks.

C O M PA N Y T O WAT C H

KC M A D E I T

ENTREPRENEURIAL JOURNEY

PlanIT Impact

Convivial Production

FSC Inc.

A modeling platform shows the ROI of sustainable building.

This entrepreneur is passionate about design and job creation.

Her parents provided “on-the-job MBA training” when she joined the family business. SMART COMPANIES THINKING BIGGER®

CONTENTS

MAR CH 2018

ON THE WEB // iTHINKBIGGER.COM Web Columnists

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Visit www.iThinkBigger.com for articles full of insights and strategies from our exclusive Web columnists.

Thinking Bigger Business Media Inc. ADMINISTRATIVE

Kelly Scanlon Publisher Megan Scanlon Operations and Events Manager EDITORIAL

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aspire for more

whitespace revenue zone

Chris Steinlage

Business Growth: Recurring Revenue vs. Referring Revenue

Elizabeth Usovicz

Business Class Leadership: 3 Tips from a Delayed Flight

Dan Videtich Photographer CONTRIBUTING WRITERS

Ruth Baum Bigus, Dawn Bormann, Jim Holland, Jenny Kincaid Julian, Stephanie Landis, Kate Leibsle, David Mitchell, Mike Montague

Business Calendar

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Did you miss an issue? Search our archives for thousands of articles. 25 Under 25 � Awards

Learn more about the 25 Under 25® Awards Program for businesses with fewer than 25 employees. www.25Under25.com

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THINKING BIGGER BUSINESS // March 2018

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THE BIGGER PICTURE

Spring Cleaning Your Way to Growth

pring cleaning was an annual

I’d done a better job of cleaning my room and

ritual when I was growing up. It

throwing things out on a regular schedule,

was painful to spend one of the

spring cleaning wouldn’t have consumed so much of that first sunny spring Saturday.

first sunny Saturdays indoors after a long winter, but scrubbing the house spotless and

So, what should you look at?

purging the winter detritus always left me with a

Well, basically everything: products, processes, profits

feeling of accomplishment.

and people. Where is your business performing in each

And it wasn’t just about having a clean house. Whether

of those areas three months into the year compared

I realized it or not at the time, what I was experiencing

to where you want it to be on December 31? Are you on

was renewal. That Saturday in early spring signaled the

track? Are you ahead of the curve? If you’re not hitting

beginning of a new season, one that not only ushered in

your goals, what adjustments do you need to make, and

warmer weather and beautiful flowers but also delivered

will you need additional resources to do so? Remember,

a sense of freedom: School would be out soon, and

adjustments can range from tweaks to completely

milder temperatures meant liberation from the confines

abandoning an initiative.

of the house.

Importantly, don’t overlook yourself and how you’re

With the first quarter of 2018 nearly behind us, it’s a

impacting your business. From a daily perspective, are

good time to examine our businesses for what needs to

you still doing things that you should let someone else

be “renewed” or, at the very least, freshened up.

handle? Or, taking a broader view, is it time for you to

You probably feel like you just did that as you planned

transition some of your executive duties and name a

for the start of the new year. But it doesn’t hurt to do

president, or even exit the business?

a first-quarter checkup, while the year is still young,

Like spring cleaning, quarterly business check-ups

to assess how your strategies are playing out and make

aren’t something that most people look forward to.

necessary course corrections. Believe me, as a kid, if

But they can renew your business.

Ke lly S can lon

// Publisher // kscanlon@iThinkBigger.com

SMART COMPANIES THINKING BIGGER®

L E G I S L AT I V E B R I E F S

BIZ BITS

Forum Aims to Connect DBEs, Procurement Opportunities

KANSAS CITY City Council Approves MOU for New KCI Terminal Kansas City Council in February approved a memorandum of understanding with Edgemoor Infrastructure & Real Estate to build a new single terminal at Kansas City International Airport. The nonbinding MOU will set the framework for upcoming negotiations on the final development agreement and related documents. The agreement, approved 8-5, ends months of uncertainty. Though voters had approved the single-terminal plan in 2017 and the city had selected Edgemoor’s proposal, the council in December rejected the initial MOU, 9-4. The city said the new MOU addresses 43 of 45 points of concern the council had highlighted.

KANSAS Colyer Outlines Goals to Small Business Owners Kansas Gov. Jeff Colyer, who took over the position Jan. 31, spoke at Small Business Day at the Capital in Topeka in February. He told participants he could relate to them as small business owners—Colyer owns a medical practice in Johnson County that once had 25 employees. The governor said he would work to ease regulations on small businesses. He also acknowledged the tight labor market in the state, where unemployment is at 3.4 percent. He said his aim is to raise the skill level of the workforce so that there would be more workers available for the jobs small businesses need to fill. 8

THINKING BIGGER BUSINESS // March 2018

Metropolitan Community College will host the sixth annual Procurement One-onOne Outreach Business Forum from 8 a.m. to noon March 14 at MCC-Penn Valley, 3201 Southwest Trafficway, Kansas City, Mo. The goal of the event is to bring businesses, municipalities, and state and federal governments together in one venue where they can meet minority-owned, women-owned, LGBT-owned, veteran-owned, service disabled veteran-owned and historically underutilized business zone (HUB Zone) enterprises. Business owners have the opportunity to sign up for 10-minute sessions to speak with representatives about procurement opportunities. The sessions can be scheduled from 7-7:45 a.m. The event is free, but businesses must register and bring a business card for admission. Register at mcckc.edu/procurement-oneon-one. For more information, contact Chris. Kelly@mcckc.edu or (816) 604-1106.

AltCap Offers Grow Your Business Series AltCap is offering continuing education for entrepreneurs. The new Grow Your Business Series is open to aspiring and existing business owners. All courses will take place at Plexpod at Westport Commons, 300 E. 39th St., Kansas City, Mo. The courses include: Quickbooks Desktop Pro, three-part series //

4:30-7 p.m. April 11, 18 and 25 Building your e-commerce business //

5:30-7 p.m. June 6 IRS small business tax planning //

5:30-7 p.m. Aug. 8 Quickbooks Online, three-part series //

4:30-7:30 p.m. Oct. 10, 17 and 24 Developing cash flow projections //

5:30-7 p.m. Dec. 5

For more information and to register, visit Alt-Cap.org. Cost varies by course.

GAME Wins Accolades The Kansas Small Business Development Center at Johnson County Community College was awarded the 2017 Innovation Award for its GAME program by The League for Innovation. GAME (Growth through Action, Measurement and Engagement) is a strategic implementation workshop series designed for businesses that have been in operation for more than three years with annual sales of $250,000 or more. The average annual revenue of those enrolled is $700,000. Each session provides owners of growing businesses the opportunity to work on their business with the assistance of industry experts, business peers and Kansas SBDC advisors. The Innovation Award was established over 30 years ago and recognizes significant community college innovations that improve the ability of institutions to serve their students and communities. GAME participants are poised to gain focus, set a growth agenda and take action to improve the business. For more information on the current GAME series, visit JCCC.edu or contact business adviser Stephanie Landis at (913) 469-4485 or Slandis1@jccc.edu.

4 KC Entrepreneurs Chosen as Pipeline Fellows The Pipeline entrepreneurial fellowship program celebrated its fellows and welcomed a new class on at The Innovators event, a celebration of Midwest entrepreneurship. The 11th annual event took place in January at Arvest Bank Theatre at the Midland in downtown Kansas City. Local entrepreneurs who received awards were: » Pipeline Entrepreneur (Member) Growth: Alfred Botchway, Xenometrics LLC, Kansas City, who tied with Paul Jarrett, Bulu Box, Lincoln, Neb.

» Pipeline Entrepreneur (Member) Inspiration: Kim Gandy, Play-it Health,

Kansas City. The 2018 fellows include 13 entrepreneurs, four of them from Kansas City. Fellows go through an intensive application and interview process. In the Pipeline program, participants gain access to a nationwide network of expert mentors and invest in professional development. The new class includes: » Glen Dakan, Prestio, Kansas City » Ben Schultz, LaborChart, Kansas City » Matt Sellers, Rack Performance, Kansas City » Linda Van Horn, iShare Medical, Kansas City » Andrew Barnell, Geneoscopy, St. Louis » Johnna Beckham, BOOST Apparel Group, St. Louis » Trevor Crotts, Buddy Brands, Wichita » Dennis Doerfl, Fourstarzz Media, Lincoln » Will Edwards, MetKnow, St. Louis

» Colin Nabity, LeverageRx, Omaha » Robin Rath, Pixel Press Technology,

St. Louis » Bryan Sapot, SensrTrx, St. Louis » Ali Schwanke, Simple Strat, Lincoln

Angel Investment Group Taps New Managing Director Mid-America Angels Investment Network has a new managing director. Laura McCoolidge Classen takes over the role from Rick Vaughn, the founding managing director. Vaughn will continue to work part-time with MAA, an angel investment network focused on early-stage companies in Kansas and Missouri. Classen comes to MAA from Nebraska Angels, where she served as director for T:7.5” five years.

MAA was founded in 2006 and has made more than 100 investments totaling more than $26 million. It operates under the umbrella of the Enterprise Center of Johnson County in Fairway.

Applications Open for Companies Seeking Seed Capital Kansas companies seeking seed capital can tap a program facilitated by the Kansas Department of Commerce. Applications are being accepted through Aug. 31 for companies seeking investment through the Kansas Angel Investor Tax Credit (KAITC) program. The program offers Kansas income tax credits to qualified individuals who provide seed capital financing for emerging Kansas businesses engaged in development, implementation and commercialization of innovative technologies, products and services. continued

T:4.625”

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KAITC is designed to bring together accredited angel investors with qualified Kansas companies seeking seed and early stage investment. The program aims to increase availability of early stage capital and help to create and grow Kansas businesses. Applications for certification will be accepted only for Kansas businesses in the seed and early stage rounds of financing. Companies must meet certain criteria to be certified as a qualified Kansas business. For more information, visit KansasAngels.com.

Nominations Open for Kansas Business Awards

Nominations are due by 5 p.m. March 30. Top nominees will be honored at the Team Kansas awards banquet June 5 at the DoubleTree Hotel in Lawrence. The winner will earn the 2018 Governor’s Award of Excellence, the highest award given to a business by the state.

International Trade Day Conference Set for June Kansas businesses looking to grow through exporting may want to put Kansas International Trade Day on their calendars.

The annual conference, hosted by the Kansas Department of Commerce, will take place June 5 in Lawrence. It will feature sessions and speakers designed to help companies begin exporting or increase exports. The event lasts from 9 a.m.-5 p.m. at DoubleTree by Hilton Hotel, 200 McDonald Drive. The event will feature a panel of 2018 Governor’s Exporter of the Year Award finalists sharing success stories. There will be exhibits from export service providers and sessions. Register at KansasCommerce.gov. Cost is $50 before May 1 and $75 after May 1. The fee includes lunch.

Kansas Department of Commerce will recognize Business Appreciation Month in June, and the state is accepting nominations for awards on its website, KansasCommerce.gov. Nominations are accepted in four categories: » Manufacturing/distribution » Retail » Service » Hospital/nonprofit

ScaleUP! Names Seventh Cohort Eighteen area entrepreneurs are preparing to take their companies to the next level. They’ve been chosen for the seventh cohort of ScaleUP! Kansas City, a program that provides support for growth-oriented businesses. ScaleUP! KC helps qualified companies with revenue of more than $150,000 reach expansion goals. It is funded through a grant from the Ewing Marion Kauffman Foundation and administered by the University of Missouri-Kansas City Innovation Center. The following entrepreneurs were selected for the current cohort: » Vince Barreto, PowerPlus Cleaning Systems, Blue Springs » Richard Brewer, Kornerstone Contracting Specialists LLC, Belton

THINKING BIGGER BUSINESS // March 2018

» Larry Carr, Bradford Interior Group,

Raytown » Pete Casey, KC North Spine and Joint

Center, Kansas City, Mo. » Brett Davis, Command.App,

Overland Park » Shawn Davison, Kansas City Board

Game Co. LLC, Kansas City, Mo. » Don Derry, K.C. Waterproofing Inc., North Kansas City » Joel Gerhardt, Epic Bike and Sport, Kansas City, Mo. » James Hayworth, Beyond Exchange, Lees Summit » Ana Nubia Hernandez, LaMega Radio Station, Overland Park » Tiffany King, SouveNEAR, North Kansas City

» Mike Knopke, KC Shave Co,

Overland Park » Raina Knox, Stratex Solutions, LLC,

Lees Summit » Michelle Macrorie, Autism from the

Start, Lenexa » Angela Turner, Simmons Security

& Protection Services, Inc., Kansas City, Kan. » Roger Wagy, Tick Tock Escape Games, Overland Park » Gabrielle Wallace, Go Natural English, Independence » Christina Williams, Posh Restoration Facilities, Kansas City, Mo.

BIG | deals

A WINNER

WINNERS AWARDS & RECOGNITION

» Megan Garrelts, Rye, Leawood:

Outstanding Pastry Chef Semifinalists will be narrowed down to nominees March 14. On TV: Doughnut Lounge Doughnut Lounge in Westport recently was featured on Food Network’s new show, Grill Dads. The show’s hosts crack dad jokes while featuring “epic bites.” Doughnut Lounge hosted a watch party when the episode aired in February.

Donutology Owner Wins $5,000 at Franchising Competition Andrew Cameron, owner of Donutology in Westport, recently participated in the 2018 NextGen in Franchising Global Competition in Phoenix. His pitch to potentially take his store to a franchise earned second place and a $5,000 prize. An audience of thousands that watched the pitch competition voted for the winners, Cameron said. He earned just one vote less than the first-place winner. Cameron said he plans to use the prize money to further research franchising strategies and build a roadmap for growth. Familiar Names Return to James Beard Award Semifinalist List Several local businesses and chefs were among the 2018 James Beard Award Semifinalists announced in February. They include: » Manifesto, Kansas City, Mo.: Outstanding Bar Program » Bluestem, Kansas City, Mo.: Outstanding Restaurant » Michael Corvino, Corvino Supper Club and Tasting Room, Kansas City, Mo.: Best Chef: Midwest » Taylor Petrehn, 1900 Barker, Lawrence: Outstanding Baker

Northland Small Businesses Honored Northland small business owners received some love on Valentine’s Day when they were honored at the Midwest Small Business

Branding

Design

Digital

Finance annual meeting. MBSF lauded three companies for their efforts to expand and create jobs: The Dry Cleaner of Kansas City Inc., Gladstone and Parkville; Dairy Queen at 8530 N. Oak, Kansas City; and Kountry Kuts, Richmond. Lewis Rice Attorneys Earn Promotions, Recognition The Kansas City office of law firm Lewis Rice has announced promotions and accolades of its attorneys. Two lawyers have moved into positions of leadership: » Lori A. Gregory is now chairwoman of the business, tax and estate planning continued

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department. She has been part of the department for two decades. Her practice focuses on estate planning, elder law, and trust and estate administration and litigation. » John E. Cruz has been named to the newly created role of executive committee member-at-large. The position was created to provide additional perspective to the firm’s executive committee. His real estate practice primarily focuses on retail and office leasing. Another of the firm’s attorneys, Michele McCue, was inducted into the 2017 Midwest Real Estate Magazine Hall of Fame. This annual award goes to the most influential real estate professionals across the Midwest. NKC Eatery Among Best Fried Chicken Restaurants A North Kansas City restaurant was named among Thrillist’s 31 Best Fried Chicken Restaurants in America. Stroud’s Oak Ridge Manor, located in a historic log cabin and farm house, was picked for “that crunchy, salty, juicy, peppery chicken mess” by the restaurant-rating website. CONTRACTS IEC Scores Big Military Contract Infinite Energy Construction was awarded the Simplified Acquisition of Base Engineer (SABER) contract at Eglin Air Force Base, Fla. The five-year contract is valued at $46 million. Eglin is an Air Force Material Command (AFMC) installation—responsible for the development, acquisition, testing, deployment and sustainment of all air-delivered nonnuclear weapons. IEC is a Kansas City, Mo., electrical and general contractor. FINANCING

AI Startup Lands Huge Funding Round Kansas City artificial intelligence startup Mycroft AI recently raised a $1.75 million 12

THINKING BIGGER BUSINESS // March 2018

round of seed funding. That exceeded its goal for the round by more than $1 million, the company said. Mycroft’s platform is open-source, allowing other users to tap into it. The company hopes to hire 40 people this year to build up its software development and business development teams. NEW BUSINESS Duo Launches Tech Investment Fund Carlos Antequera and Keith Harrington have started a new investment fund called Novel Growth Partners.

The company uses a revenue-based finance model, which means Novel Growth gets paid back for its investment at a set monthly percentage of the portfolio company’s revenue. Its target is steadily growing tech companies in the Midwest. Antequera was CEO of Netchemia, which sold to an equity firm in 2015. Harrington is a former managing director at Kansas Bioscience Authority. Another Brewery Opens in Crossroads A new brewery opened in February in the Crossroads Arts District. Casual Animal Brewing Co., 1725 McGee St., has five beers on tap. It doesn’t offer food, but guests are welcome to bring their own to the taproom. New Coworking Space Opens in Overland Park A local couple has brought a coworking franchise to Overland Park. Ryan and Erin Seager are the new coowners of Office Evolution at 8101 College Blvd., Suite 100. The 11,000-square-foot center includes 40 private furnished offices, four conference rooms, a community kitchen, a co-working lounge and free parking. Members can choose from several packages that also include business mailing and telephone-answering services and administrative support.

ON THE MOVE

New CEO Succeeds Founder at Infusion Express Don Peterson, founder of Infusion Express, will step aside as CEO. Filling that role will be Douglas Ghertner. Peterson will remain with the company as president. Ghertner founded Change Healthcare, a health software and analytics company. His health care background will help the company as it continues its nationwide expansion. Infusion Express closed on $13.5 million in funding last year, which will fuel the company’s growth.

Executive AirShare CEO Steps Down Keith Plumb announced Jan. 31 that he would leave Lenexa-based Executive AirShare in 30 to 60 days. He co-founded the company in 2000 and has served as COO, president and CEO. Plumb will remain CEO until he leaves; CFO John Owen will serve as interim president during the transition. The company has begun a search for a new CEO. Executive AirShare serves the central U.S. and Great Lakes region by managing a fleet of planes that each have fractional ownership. It also offers aircraft management and charter services through its subsidiary, Executive Flight Services. Cognios Capital Brings on New Operations Leader Cognios Capital LLC hired Anne Moberg as head of finance and operations. She has more than 25 years of experience in the

industry, including fixed-income portfolio management, trading, pension and 401(k) analysis. Cognios is a Leawood investment management firm advising mutual funds, a private fund, institutional clients and individuals.

Landscaping Firm Hires VP Royal Creations Architectural Landscaping,

based in Independence, is growing. The company has hired a vice president of sales, Aaron Albertson. Albertson’s experience

includes landscape design and project management. Royal Creations is a design/build landscape construction company founded in 2013. WildBlue Staff Grows WildBlue, a Kansas City aircraft sales company, is expanding its sales team with the addition of Todd Milton. Milton is a pilot and recently retired as a colonel from the Missouri Air National Guard. Baldwin Stores Combine Local denim and clothing retailer Baldwin is combining two of its stores at Country Club Plaza into a new concept called Baldwin Market, set to open this month. Standard Style and Baldwin will move to 422 Nichols Road. Standard Style closed its previous location earlier this year. Baldwin Market is scheduled to operate until spring 2019, when a new Baldwin flagship store is set to open.

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SMART COMPANIES THINKING BIGGER®

2 5 U N D E R 2 5 ® U P DAT E S

Indigo Wild Smells Success with New Product Line Alight Analytics Lands Elite Client Digital marketing agency Elite SEM is the latest client to partner with Alight Analytics (Class of 2014), a marketing analytics firm. Elite SEM will use Alight’s ChannelMix solution, the first data aggregation engine built for marketers, to automatically collect, clean and organize all marketing performance data for its clients. Elite SEM is one of Advertising Age’s Top 25 U.S. Search Agencies and a perennial Inc. 5000 honoree. Alight Analytics assists major brands and advertising agencies in a range of industry verticals, such as finance, insurance, sports and entertainment, retail, consumer goods and e-commerce.

Indigo Wild (Class of 2002), which produces natural products for home and body, has unveiled a new line of cologne and perfume called Eau de Zum. Scents include frankincense and myrrh, patchouli, sea salt, and lavender.

J. Rieger & Co. Cocktails Now Available at Area Grocery Stores Grocery shoppers now can stop for a J. Rieger & Co. (Class of 2017) cocktail at v Hy-Vee stores. select A menu of J. Rieger specialty drinks will be available through April at Hy-Vee Market Grille and Hy-Vee Market Grille Express restaurants in Missouri and Kansas. That includes 17 Missouri locations and six in Kansas.

J. Rieger co-founder and bartender Ryan Maybee developed seven drinks for the program, including the Horsefeather, KC Ice Water, Beautiful Red Bell and Helpful Smile Punch, a nod to Hy-Vee’s branding. Prices range from $5 to $8 per cocktail, and some drinks will be featured on recipe cards for patrons to try at home.

Schloegel Design Remodel Welcomes New Owners A new chapter has begun at Schloegel Design Remodel (Class of 2004). Charlie Schloegel and Chris Peterson have joined the ownership team. Jake Schloegel founded the company in 1980 and it has grown to more than 50 employees. He will continue to have an active leadership role at the company. Peterson joined the team in 1996; Charlie Schloegel joined in 2006.

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THINKING BIGGER BUSINESS // March 2018

The 25 Under 25 Awards Gala is one of the biggest nights of the year for small business owners. Two earlier events kicked off the celebration. A BIG thanks to Country Club Bank for hosing the Alumni Reunion on Jan. 10. And a BIG shout-out to BASYS Processing for hosting the VIP Reception on Feb. 8 at The Gallery event space in the Power & Light District. 3

4 1

Angela Hurt, center, founder and CEO of Veracity, networks at the 25 Under 25 alumni reception Jan. 10 at Country Club Bank. Veracity is the Star Sponsor of the 2018 25 Under 25 Awards.

Guests mingle at the 25 Under 25 VIP reception Feb. 8 at The Gallery event space in downtown Kansas City, Mo. Pictured from left are event advisory board members Consuella McCain, Turner Construction Co.; Cindy Meyer, CertifyNow.Biz; and Joyce Christanio, Sprint Corp.

5 3

Class of 2018 honorees chat at the VIP reception. Pictured from left are Vicki Clayman, Partners N Promotion, and Hasu and Subhi Doshi, FSC Inc.

Kelly Scanlon, CEO of Thinking Bigger Business Media, center, poses with Josh Wade and Jon Schram of The Purple Guys at the VIP reception.

Matthew and Haley Haar of AlphaGraphics Kansas City, a print sponsor, celebrated with honorees at the VIP reception. SMART COMPANIES THINKING BIGGERÂŽ

AT A G L A N C E K C

E N T R E P R E N E U R S

BIG INFLUENCE | CLAIR DE LUNE

Charitable Focus Fits With Business Mission For Clair de Lune Clair de Lune exists to help women in need of a good bra. Its charitable endeavors fulfill that same mission. The retail store, located in Overland Park’s Hawthorne Plaza, specializes in fitting women of all sizes with the right bra. It makes sense that it would serve women with the same needs in its philanthropic focus. Clair de Lune partners with Hope House, a nonprofit that provides shelter and services to victims of domestic violence. Many of the people Hope House serves are women, and they likely arrived with only the clothes they were wearing.

THINKING BIGGER BUSINESS // March 2018

Each year, Clair de Lune collects gently used bras to donate to Hope House. In 14 years, the business has donated more than 24,000 bras. Another population championed by the retailer is breast cancer survivors. In 2014, the company founded its nonprofit, First Bra Foundation (FirstBra.org). Co-owner Clair Keizer explained the organization’s goal. “Our mission is simple: Celebrate the breast cancer survivor with a gift of a free bra following treatment or surgery. In that time, we’ve touched more than 375 breast cancer survivors with a fitting and her choice of bra.” Keizer said building relationships has been instrumental to building the business, and charitable causes are among those essential relationships. “Clair de Lune would not be here today were it not for the support of our customers,” he said. “It’s important to us that we acknowledge that by supporting their charitable interests and others that are working to better the lives of those in need.”

C O M PA N Y T O WAT C H K C

P L A N I T I M PA C T

E N T R E P R E N E U R S

PlanIT Helps The Planet

(Photo courtesy of Austin Walsh Studios)

BENCHMARKING TOOL SHOWS COMPANIES SMART WAYS TO BUILD GREEN

ENTREPRENEUR

Dominique Davison C O M PA N Y I N F O R M AT I O N

PlanIT Impact 214 W. 21st St., Suite 202 Kansas City, MO 64108 info@planitimpact.com (816) 841-3517 PlanITImpact.com TYPE OF BUSINESS

Smart modeling platform intended to help people understand and improve performance related to energy and water usage, storm water management and other sustainability issues YEAR FOUNDED

2014 E M P L OY E E S

ommercial and residential buildings account for nearly 40 percent of carbon dioxide emissions in the United States. Dominique Davison thinks we can do better. “As professionals in an industry that is one of the predominant contributors to greenhouse gas emissions, it’s incumbent on us to be proactive and find solutions,” she said. Davison, principal of DRAW Architecture + Urban Design, said her firm frequently presents designs to customers and potential clients that incorporate sustainable features, but convincing them to go green isn’t always easy. “They want to know what the pay back is,” she said. “They‘d ask, ‘Is this the right decision for me?’ We didn’t have an answer.” Davison said it can take weeks to complete a comprehensive energy model and determine potential savings of a project. Her firm needed a tool that could quickly allow engineers and architects help clients make good decisions about sustainability early in the design process. In 2014, she started PlanIT Impact. The result is a benchmarking platform that can help improve performance related to energy and water usage, storm water management and other sustainability issues. It took years to develop the tool, which had a slow rollout last year. “We tested it and got feedback about what’s working and what’s not,” said Davison, who is CEO

of the company. “It’s a very complex piece of software.” The company launched an updated version of the tool in January, she said. Davison could have made the platform a proprietary service for DRAW, but she said that would have been “less impactful to the planet” and she would rather “change the way building construction is done.” PlanIT Impact already has earned some valuable attention. It won a $50,000 LaunchKC grant last year during during Techweek and $6,000 during a Pure Pitch Rally. Davison said those experiences helped support product updates and staff expansion, in addition to providing valuable networking opportunities and visibility. Davison said that by the end of the year the company hopes to introduce a new product that helps firms integrate smart building technology. Although her two companies have different business models, Davison said there was one lesson learned from founding DRAW more than a decade ago that helped her the second time around. “The importance of having great people and knowing how to get people excited about your vision to join you on the journey is something I had learned and endeavor to bring across again,” she said. David Mitchell is a freelance writer in the Kansas City area. SMART COMPANIES THINKING BIGGER®

AT A G L A N C E K C

E N T R E P R E N E U R S

BIG STARTS | CARE CENTER GIFTS LLC

MADE TO LAST | MISSOURI SEWING MACHINE COMPANY

Missouri Sewing Co. Follows Pattern Of Past Success Gifts For Good Days And Bad Company offers exclusive care packages for any occasion. COMPANY // Care Center Gifts LLC ENTREPRENEURS // Elisa Trozzolo,

Sarah Brewster and Jill Wuetherich WHAT THEY DO // The company sells gifts and care packages from

three unique lines.

Fourth generation continues emphasis on customer service. Walter Catenhauser started his business during the Great Depression, then guided it through a metal shortage during World War II. Nearly 90 years later, Missouri Sewing Co. is still going.

“Whether it is someone’s best day or worst day, Care Center Gifts helps you send happiness, love and support,” Brewster said.

The family-owned business offers household and commercial sewing machines and repairs at four metro-area locations.

Cancer Gifts offers items for cancer patients and their caregivers, while Upside Down Gifts carries presents for friends or loved ones who are sick, sad or just having a bad day. The third line, Best Day Gifts, celebrates major milestones.

Martin Catenhauser, vice president of household sales and operations, said excellent customer service is critical to the company’s longevity. During a sale, he said, employees find out customers’ goals, demonstrate machines’ features and discuss costs.

The online collections feature exclusive works from local artists and companies.

“Missouri is the Show-Me State, and if you say a machine can do something, you better be able to show it,” said Catenhauser, a fourth-generation employee.

THE INSPIRATION // Sisters Brewster and Wuetherich grew

up in Trozzolo Communications Group, the Kansas City, Mo., advertising and public relations firm founded by their father, Pasquale Trozzolo, nearly 30 years ago. They wanted a similar experience for their own children and founded Care Center Gifts along with their sister-in-law, Elisa Trozzolo. The women, who have a total of nine children ages 2 to 16, bought CancerGifts.com in 2016 and expanded last year with UpsideDownGifts.com and BestDayGifts.com.

After a sale, the company provides lessons and resolves any issues with machines. “We do not send machines to the manufacturer if there is a problem,” Catenhauser said. “We do not give customers a YouTube link for them to learn about their machine. We don’t outsource customer service.” The company also has adapted to meet customers’ needs.

WHAT’S NEXT // The company celebrated two years in business in

“Embroidery, quilting and learning how to alter purchased clothes are very popular these days,” he said.

February and continues to work on local partnerships and unique product development.

Popular craft websites have attracted a younger generation to sewing.

“We are excited to spread our love and prayers to even more people around the country,” Brewster said.

“It is a very evolving time in our industry, and we have adapted by really doing what we have always done: Listening to the needs of our customers and finding the machine that is right for them,” Catenhauser said.

CONTACT // 11 East Gregory, Suite 200B, Kansas City, MO 64114 //

(816) 839-4880 // info@carecentergifts.com // CareCenterGifts.com 18

THINKING BIGGER BUSINESS // March 2018

KC MADE IT K C

CONVIVIAL PRODUCTION

E N T R E P R E N E U R S

Molding a Business CONVIVIAL PRODUCTION GROWS THROUGH PIVOTS or Chentell Shannon’s business, 2017 was a year of big changes. Convivial Production is a design and manufacturing company that makes ceramic home, table and garden wares. Convivial produces about 1,000 pieces a week, sold in 100-plus stores in the United States. In Kansas City, Convivial products are carried in Coveted Home on Country Club Plaza, Urban Provisions in the East Bottoms and Made in Kansas City locations across the metro. It also sells directly to customers through its website, ConvivialProduction.com. With continually growing sales, Shannon was able to make big changes last year with her four-year-old company. Convivial moved its operations to a 2,400-square-foot space in Kansas City’s West Bottoms. Shannon said the relocation to a bigger space was a major investment of both time and money. “We custom fit the space with new work tables and product shelving, as well as invested in a new mixing tank and over 500 production molds,” Shannon said. The move also included retooling all aspects of the company’s production process to accommodate the growth. “By October, everything was in place, and things started function routinely. That was a nice realization,” Shannon said. “This year, we are focusing on refining our processes so that we can continue to grow and create more local jobs for artisans.”

GENESIS OF CONVIVIAL

Shannon’s company was born from a lifelong passion for ceramics. Growing up in Hawaii, it was Shannon’s older sister who was into ceramics. “I looked up to my older sister and wanted to be just like her, so I took the same ceramics class and ended up falling in love with the medium,” Shannon said. “By the time I was a senior, I was set on a career in ceramics. I was drawn to the therapeutic aspects of working with clay and the opportunity functional ceramics provided for hospitality.” After high school, Shannon attended Wheaton College in Illinois for an interdisciplinary degree in community art, urban studies and ceramics. During her senior year, Shannon created her first set of 300 dishes for event rentals. “I hand-made them in the basement of our school with the intention to rent them out,” she said. “We had our first wedding a month after I graduated.” But a funny thing happened, Shannon said. “After the wedding, people were more interested in purchasing the plates rather than renting,” she said. With more interest in buying the pieces, “I quickly pivoted.” CONTINUED EVOLUTION

After moving to Kansas City with her husband Stephen—a Ph.D. candidate at the University of Kansas Medical Center— Shannon focused on designing her first product line. Today, there are more than 30 designs, including dinnerware, garden planters, fruit bowls, vases and candleholders. All products are food, dishwasher and microwave safe.

Convivial still offers rentals, working with local event company Ultrapom, based in the Crossroads Arts District, but the main business is in manufacturing and designing products for wholesale and retail purposes. Convivial makes all products in-house. Shannon designs all the pieces, and her staff works to create them. The process includes clay mixing, mold making, casting, cleaning, carving, glazing, firing, packing and shipping. A five-woman team keeps Convivial humming. Shannon said having an all-female staff was not something she set out to do. “It just happened,” she said. “I would love to have a gentleman on board in the future … (but) all these women are incredible, respectful, endearing and all work well together.” Shannon is always on the lookout for local artisans to join the Convivial team. “I am passionate about job creation,” said Shannon, “so we are figuring out costs and ways to provide more opportunities.” Shannon has been able to carve out additional opportunities for Convivial. Ibis Bakery purchased a full line of wares for its two locations in Lenexa and downtown Kansas City. Convivial also conducts tours once a month as part of the First Friday weekends in the West Bottoms. ‘AWESOME PLACE TO START A BUSINESS’

The woman whose love of ceramics began in the Aloha State has found the middle of the country to be a perfect place for Convivial. “Kansas City is a really awesome place to start a business,” Shannon said. “The cost of living is really affordable, allowing Stephen and I to live off a lower salary than we would be able to in other cities.” Ruth Baum Bigus is a freelance writer in the Kansas City area. SMART COMPANIES THINKING BIGGER®

ENTREPRENEURIAL JOURNEY K C

( by Katie Bean )

E N T R E P R E N E U R S

The Lunch Bunch With a lot on her plate, daily meetings with her parents help Sonia Garapaty’s family business run smoothly.

nce the opportunity to join her father’s firm presented itself to Sonia Garapaty, other pieces fell into place, pointing her in that direction. “It’s almost like fate wanted it to happen because it put everything in line to make this venture successful,” she said. 20 THINKING BIGGER BUSINESS // March 2018

Today, Garapaty is CEO of FSC Inc., an engineering and consulting firm her father founded in 1979. Before 2005, the idea of being in that position wasn’t really on her radar.

Son ia Garapaty

How she got there Garapaty studied engineering, specializing in telecom. In the

early 1990s, when she began her career, mobile technology was in its infancy. “If I was going to do something like engineering, then let me do something that was kind of exciting,” she said, laughing. She started her career in Dallas at Nortel Networks, a huge company and leader in telecom at the time. Garapaty worked her way up to a position in wireless standards— she collaborated with colleagues and clients to help write the standards on how cellphones work with the networks. She also wrote multiple patents. The job was fascinating, she said. By the early 2000s, she was a manager earning a six-figure salary and traveling worldwide one week every month. But after her children were born in 2003 and 2004, she was starting to consider doing things differently. When she traveled, almost every flight would include stopovers in Kansas City—to drop off her son with her mother and pick him up on the way home. “For me, I was feeling like I was missing so much of my kids, my babies growing up,” she said. Around that time, her parents came to visit in 2005. She noticed that her father looked tired. Her dad told her, “I’m ready to sell the company if you don’t come. … What’s the purpose of us continuing in this business, and it’s so stressful, if we’re not doing it for anybody?” That started a series of conversation with her husband and her dad about what it might look like for her to join the family business. In March 2005, Garapaty committed to a one-year trial at FSC. Garapaty planned to commute to Kansas City from Dallas each week. But around that time, her husband’s company was looking for volunteers to move to Kansas City for one year to help start a new office. The family moved in June 2005. “A year later, if we decided we wanted to go back to Dallas, then we could have gone back,” she said. “But we decided to stay.” Learning a new business It took time for Garapaty and her father, Hasu Doshi, to get on the same page about her new role. The first few months were hard, she said.

Her title was vice president, but Doshi wanted her to start as a design engineer and work her way up so she could learn the business like he did. She wasn’t crazy about that plan, she said. She found a mentor, Harold Sallee, in the company who helped Garapaty and Doshi bridge the gap in their expectations. Sallee told Doshi that the firm needed Garapaty to be a leader. “After eight months I knew that this was it, I was not going back to my previous career— this is what I wanted to do,” she said. It wasn’t just the job that sold her. Living in Kansas City meant that her kids would grow up with their grandparents nearby. Garapaty said she didn’t know her grandparents very well, who lived in India. “When I came here, I took a huge pay cut— at the end of the day, it didn’t matter. I was here with my family,” she said. “Family is huge for me.” All in the family Garapaty’s father and mother, Subhi Doshi, the firm’s CFO, who once were ready to sell the business, are refreshed now, Garapaty said. Hasu, the firm’s president, still works as hard as he has always worked, Garapaty said. “He says work is more enjoyable now because he does only what he likes to do, and I am here to take card of everything else.” Garapaty and her parents have lunch together every day in Hasu’s office. They talk about everything from finance to family, she said. “That was my on-the-job MBA training,” she said. “People know when the door is closed and we’re eating lunch together, that’s our time.” With FSC approaching the milestone of its 40th year in business and having earned an estimated $4.3 million in revenue in 2017, it’s clear that Garapaty and her parents have found their groove working together. “I’m not letting them go anywhere, as long as they want to still come to the office and still be involved,” she said.

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GIVE BACK Looking for something to do? Bring your talents to SCORE and volunteer. You will share your skills and expertise helping small businesses achieve success. Come work with other enthusiastic professionals. Join us at KansasCity.Score.org

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Katie Bean is the Executive Vice President at Thinking Bigger Business Media. (913) 432-6690 // kbean@ithinkbigger.com

Jeremy Ellis // (914) 702-5390 // www.reprintpros.com SMART COMPANIES THINKING BIGGER®

Orange EV is driving change for users of heavy-duty trucks by offering an electric alternative.

THINKING BIGGER BUSINESS // March 2018

KC ENTREPRENEURS

Trucking Ahead N

Orange EV drives the market for heavy-duty electric vehicles.

ENTREPRENEURS

Wayne Mathisen, Kurt Neutgens, Mike Saxton C O M PA N Y I N F O R M AT I O N

Orange EV 500 NW Business Park Lane Riverside, MO 64150 (866) 688-5223 ext. 702 OrangeEV.com TYPE OF BUSINESS

Manufacturing and remanufacturing heavy-duty electric vehicles YEAR FOUNDED

2012 E M P L OY E E S

25 KEYS TO SUCCESS

“We lean forward without extending ourselves too much.”

left // Orange EV’s executive team—

from left, Mike Saxton, chief commercial officer; Kurt Neutgens, chief technology officer; and CEO Wayne Mathisen—show off trucks in the production area of the Riverside plant. inset // Production supervisor Michael Berardelli is at the wheel of a T-Series, all electric Class 8 truck.

ot far from the automotive hub surrounding the Ford Motor Co. Kansas City assembly plant in the Northland, a local company is building electric vehicles—and taking its industry by storm. Orange EV, based in Riverside, is the leader in manufacturing and remanufacturing heavy-duty electric vehicles. The company was founded by a former Sprint executive and a Ford engineer. They met as soccer dads when their children played on the same team. Wayne Mathisen, formerly of Sprint, is the company’s chief executive officer; Kurt Neutgens, who worked at Ford, is chief technology officer. Mike Saxton, a local serial entrepreneur, joined the company in 2014 to guide business development and marketing efforts as chief commercial officer. DISCOVERING A MARKET

In 2012, Mathisen and Neutgens were, quite literally, two guys in a garage in Riverside designing and building the prototype truck. The business started by repowering existing diesel yard trucks into electric vehicles. To build the prototype, they bought and repowered an old yard truck that had been sitting unused in a field. While it was a quicker, lower

cost starting point, there are a finite number of machines available for repowering. The company soon added all-new trucks. When Saxton joined the company, he began an aggressive plan of getting to know the rules and regulations of key markets around the country to develop a business plan. California, New York and parts of Illinois (around Chicago) are the locations where Orange EV concentrated its initial efforts—those are the places nationally with the strictest regulations, yet most eco-friendly environments for electric vehicles. Working at first with a shoestring budget, Saxton took advantage of his southern California ties. He’s a graduate of the University of Southern California, so he knew his way around. And, more importantly to the bottom line, he has as a sister living there. “We kept our belts pretty tight initially so we could invest properly in the team and the trucks. I slept on my little sister’s couch for three months while getting to know regulators, taking a prototype around and learning about emissions regulations, fuel costs, incentive funds, etc.,” he said. KEY FIRSTS

All the work and research paid off when Orange EV became the company to commercialize the first

by Kate Liebsle // photography by Dan Videtich SMART COMPANIES THINKING BIGGER®

Class 8 all-electric vehicle. Class 8 trucks like a tractor trailer are rated to carry more than 33,000 pounds. Orange EV’s Class 8 truck is a terminal truck, a utility vehicle that moves cargo trailers around container handling sites like distribution centers, rail intermodel yards, manufacturing sites and more. These trucks have names such as hostler, spotter, yard truck, mule, shifter and more. The first big customer to buy in was DHL Supply Chain in Chicago. That site’s yard trucks are now 100 percent electric with Orange EV. DHL’s order and endorsement accelerated the experience and insights needed to continue improving the truck while raising the firm’s credibility as a truck manufacturer. More orders soon followed. Its current customers include the Anderson-DuBose Co.’s Rochester, N.Y., distribution center—a part of the McDonald’s distribution chain—and Chautauqua County, N.Y. That deployment in December 2017 means Chautauqua is the country’s first county government to introduce 100 percent electric Class 8 trucks to its fleet. Use hours are growing exponentially for Orange EV’s fleet, too. As of January 2018, the trucks “We kept our belts pretty tight initially so we could surpassed 100,000 hours and invest properly in the team and the trucks.” 350,000 miles in commercial operations, the company reported. Mike Saxton // chief commercial officer These are big numbers for trucks that go slower than 25 MPH (and usually less than 15 MPH) in tight, confined yard spaces. Customers are happy, and that vehicles was going to be a tough important),” he said. “We thought customer relationship and the shows in the bottom line. Today, through the market forces affecting sell, Saxton said. integrity it’s building in those is fleet decision-making, then mapped “more than 75 percent of our cusOrange EV is selling more than an important component for the out our target geographies, industry machinery, he said. It’s about the tomers have re-ordered within six company. The heavy machinery segments and approach to each total customer experience. months of getting that first truck,” industry isn’t known for pivoting prospective fleet customer. “Understanding the overall Mathisen said. quickly to new ideas or incorpo“It’s taken more initial time market and customer decisionOrange EV doesn’t just measure rating technology into products. investment, but there’s momentum making environment (was success in numbers, though. The Moving from diesel to electric 24 THINKING BIGGER BUSINESS // March 2018

WHAT’S IN A NAME? So how did the name Orange EV come about? “Green’s been done,” said Mike Saxton, chief commercial officer. “We wanted to own a color as a brand. Orange is seen as healthy, and we are promoting clean transportation.”

Orange EV employees, from left, Juan Jaime, assembly, and Dan Maracic, inventory coordinator, discuss part deliveries.

and ‘compound interest’ in doing things correctly from the very beginning. By the time customers decided to buy, they were ready, and their decision to move forward was buoyed by all the other things we’ve done to help them.” ACCESSING RESOURCES

Obviously, timing has been critical to Orange EV’s success, but the owners also give credit to their location, as well. Being located in Kansas City has been important to the success and growth of the company.

“There is a history of niche market automotive start-ups in this area of the country,” Neutgens said. Plus, Mathisen said, KC offers a large base of talented professionals. “We’re fortunate to have a very strong team,” he said. “Also, our governmental reps are accessible. There are training assistance programs here, and when it comes to cash flow, you need a place that is accommodating to startups, and Kansas City does that in spades.”

Kansas City’s central location and its status as the “freight hub of the country” don’t hurt, either, Mathisen added. PUTTING IT IN DRIVE

That’s not to say that being a startup has always been easy. But the owners have worked hard and made some key decisions they think have helped build Orange EV. First, they hired people who believed in the company and its mission as much as the leadership team, Neutgens said.

They also worked at staying focused, Mathisen said. That was hard in the beginning. “We had to develop the market,” Saxton said. “We had to manufacture the product, develop the education for customers and continually evolve the business plan for moving the company forward.” Forward is the plan for Orange EV in 2018 and beyond. With more and more potential customers looking to make a switch from diesel-based to electric, the industry is only going to grow. And with consumers continuing to demand “clean” practices from products in all facets of the manufacturing process, it figures to continue its upward curve. “We are careful about being forward-leaning without extending ourselves too much,” Saxton said. “We are creative with our resources.” With just 25 employees today, the company is ready to hire and expand its factory output, too. “We think our growth over the next few years will be very exciting,” Neutgens said. “We expect to expand into many more markets and make a significant impact as we reduce the cost of terminal trucks for our customers, providing the highest-quality truck in the market while improving the air quality for everyone.” Kate Liebsle is a freelancer based in Kansas City. SMART COMPANIES THINKING BIGGER®

Tracking

Tinsel Town Trends CHANGES IN THE MOVIE INDUSTRY HELP LOCAL COMPANIES GROW.

( by David Mitchell )

THERE WAS A TIME NOT SO LONG AGO WHEN MOVIEGOERS, LIKE CRITICS, MIGHT HAVE OFFERED A SIMPLE THUMBS UP—OR DOWN— BASED SOLELY ON THEIR OPINION OF A FILM. No more. Today, the movie theater experience and customer satisfaction are about more than just the product on the screen. A few local companies are intimately familiar with the demands of movie-goers. Halfway across the country from Hollywood, Kansas City’s movie-industry businesses are keeping tabs on cinematic trends. 26 THINKING BIGGER BUSINESS // March 2018

SETTING THE STAGE

For movie-goers, size matters—when it comes to the screen, that is. There’s also the quality of a movie’s picture and sound, the comfort of the chairs, the variety of food and drink choices, where the refreshments are served and the amenities that one might enjoy before a movie even starts. “Movie theaters must create the setting for social experience in the same way that the best restaurants and bars do,” said Mike Cummings, senior principal for TK Architects International, a Kansas City, Mo., firm.

“Superior technology and presentation are a must. The movie-going experience has to remain an event of shared social experience, built around the art of storytelling that has been part of the human experience since our ancestors gathered around the campfire.” Take, for example, TK’s Malco Theatres Inc. project in Memphis, Tenn. A historic building on the grounds of an old train station was transformed into a restaurant, bar and lobby. New construction added seven theaters. The project is part of a larger 17-acre, $53 million redevelopment that will add apartments and a hotel to the Memphis downtown. Meanwhile, in Lexington, Ky., TK is working with Krikorian Premiere Theatres on a 90,000-square-foot facility near the University of Kentucky’s Rupp Arena that will include 12 theaters with in-seat dining, a sports bar, restaurant, food court, a 16-lane bowling alley and laser tag arenas. “Movie-going has always been a shared social experience,” Cummings said. “I think in many ways that millennials consider the experience part, shared with their friends, the most important reason for going to the theater. I believe the key is to create spaces where people want to hang out while they are not watching a movie.” Cummings’ firm has been designing theaters since 1981, but the business has changed drastically in the past two decades. Renovation picked up around the start of the new century as theaters converted from film to digital cinemas. Investment in the industry continued as operators began installing bigger screens and better sound systems, he said. Those investments have been big for TK’s business. Its cinema work has grown at least 50 percent since 2012, Cummings said.

with recliners, reserved seating and enhanced menu options. Paul Farnsworth, director of public relations for B&B, said that upgrading a typical auditorium-style theater with recliners reduces seating capacity by up to 60 percent. However, he said the improved sightlines and enhanced experience have proven to be a huge draw. “Without sharing proprietary data, we can safely say that remodeled locations not only bring guests to the movies more often but bring people back to the movies that may not have been for quite a long time,” he said.

continued

‘THE CONSUMER HAS VOTED’

The current theater concept—reclining leather chairs and enhanced dining options— took off locally in 2012 when AMC upgraded its Ward Parkway location, Cummings said. “It seems like the consumer has voted, and they strongly prefer this model,” he said. Gladstone-based B&B Theatres has 11 locations in the metro area. The company, which is building a theater complex and new corporate office in Liberty, has updated theaters locally in Shawnee and Lee’s Summit

1 & 2 The Grand Screen at the Lee’s Summit 16 theatre by B&B Theatres. (Photo courtesy of Nick Frizell) 3 B&B Theatres offer a play place within the theatre for families. (Photo courtesy of Nick Frizell) INSE T B&B Theatres offer reclining seats. (Photo courtesy of Nick Frizell) 4 & 5 Krikorian Entertainment Center in Lexington, Ky., features a

cinema, a 16-lane bowling center, entertainment zone with laser tag, bumper cars in themed birthday party rooms and a sports bar with widescreen. (Renderings courtesy of TK Architects) SMART COMPANIES THINKING BIGGER®

Cummings said it might seem counterintuitive to reduce capacity while attempting to increase attendance. However, he said that on average, a traditional cinema only sells 20 percent to 25 percent of available seats per week. “Usage is much heavier on weekends, but much of their capacity was sitting idle,” he said. “The first locations to convert were seeing a net increase in revenue of 30 to 40 percent. “Part of the increase is food and beverage sales, particularly where enhanced choices are available. Ticket prices are not generally increased, or if they are, the increase is nominal.” Farnsworth said many movie theaters

have responded to the increased attendance in smaller-capacity theaters by moving to reserved seat ticketing. B&B is drawing customers by selling more than just tickets. The familyowned chain’s Shawnee location features a theater for live events, and the Shawnee and Lee’s Summit locations both feature theaters with playgrounds for children to enjoy prior to showtimes. Like TK Architects’ Kentucky project, B&B is building a theater with a bowling alley and arcade in Ankeny, Iowa, that is expected to be completed this fall.

1 & 2 Central Station in Memphis, Tenn., featuring a cinema with restaurant and bar behind the lobby area of the historic Powerhouse Building. (Renderings courtesy of TK Architects) INSE T Brian Rose on location for Wide Awake Films. (Photo courtesy of Wide Awake Films)

28 THINKING BIGGER BUSINESS // March 2018

Farnsworth said theaters have to offer more than just movies and popcorn to compete with new technology. “The entertainment landscape has evolved drastically over the last decade with the advent of ondemand streaming services, high-end audio and video capabilities in the home, a world of information and gaming at our fingertips, and so much more,” he said. THE NEXT GENERATION

In what seems to be an ever-changing environment, the next evolution in cinema could be fourdimensional films. Cummings said 4D, which adds things like scent, motion and wind to the theater experience, is popular in Latin America and Asia and is growing in popularity in the United States. He said equipment costs are at least $500,000 more per theater than a traditional cinema auditorium. “I don’t believe that it will become the new norm but expect that it will be part of the offering,” he said. B&B’s Shawnee and Lee’s Summit both offer 4D theaters. Farnsworth said consumer reaction has been “uniformly positive.” “It is really a blast,” said Farnsworth, who noted that thriller and horror films are especially popular in 4D. The 4D format creates interesting challenges for local filmmakers. Wide Awake Films, a Kansas City, Mo., company, recently collaborated on Revolutionary War 4-D

Experience for Mount Vernon, the Virginia tourist attraction and historical site that was home to George and Martha Washington. The film is one of two projects involving Wide Awake that is shown daily at Mount Vernon. “It was a lot of fun,” said Wide Awake founder Shane Seley, who also is a producer and director. “There is a scene where Washington is crossing the Delaware, and we built up to that moment. But we had to take a different approach knowing that it’s going to snow on patrons in the theater. They’re going to look up and not be looking at the screen, so in the pacing and timing of the scene, we have to make sure we don’t leave them behind.” Wide Awake produced the on-screen content for the film while working with other vendors who helped create other sensory effects. The company has been making documentaries, as well as web content and videos for conferences and conventions for clients like John Deere, Sprint and the Kauffman Foundation since 1999, but this was the company’s first foray into 4D. One challenge the filmmakers didn’t tackle for the Mount Vernon project was scent. Seley said the film offered plenty of opportunities—smoke, gunpowder and horse manure—to incorporate the technology, but there were considerations related to how to clear those smells within a 200-seat arena between each of the scenes in the movie. Seley, a self-described history nerd, said he would love to do more 4D films. “The sky is the limit,” he said. Davie Mitchell is a freelance writer in the Kansas City area.

3 The Grand Screen at the Lee’s Summit 16 theatre

by B&B Theatres. (Photo courtesy of Nick Frizell) 4 & 5 Battle scenes from the Revolutionary War 4-D Experience for Mount Vernon, Virginia. (Photos courtesy of Wide Awake Films) 6 Will Weinstein on location for Wide Awake Films. (Photo courtesy of Wide Awake Films)

6 SMART COMPANIES THINKING BIGGER®

Q & A

( by Ruth Baum Bigus )

New SBA Regional Administrator Sets Course ‘WE ARE TRULY INTERESTED IN PEOPLE BEING SUCCESSFUL’

ccording to the U.S. Small Business Administration, the four-state area encompassing Kansas, Missouri, Nebraska and Iowa has about 1.2 million small businesses employing 2.7 million people. That area, the SBA’s Region VII, has a new leader to make sure Midwestern small businesses have knowledge of and access to resources the SBA provides. Tom Salisbury has been appointed regional administrator of Region VII, with headquarters in Kansas City. He leads a team of 37 employees working to help strengthen and grow small businesses. Additionally, the SBA oversees more than 85 grantee resource partner sites within the region, which provide free or low-cost small business counseling, training and mentoring services. Salisbury’s background has primed him for his new position. For seven years, Salisbury worked in Kansas City as the small business liaison for U.S. Sen. Roy Blunt (R-Mo.). He has spent much of the rest of his career in the lending industry, most recently as a vice president with UMB Bank. Traveling the region, Salisbury already is busy promoting the SBA, which in 2017 backed more than 2,500 loans to small businesses, adding up to over $1 billion in funding. “This is something where you can say government does good stuff,” he said. The following is an interview with Salisbury, edited for length.

30 THINKING BIGGER BUSINESS // March 2018

As the new regional administrator, what are your responsibilities?

SALISBURY: We are charged with the deliv-

ery of programs, services and resources that emanate from Washington, D.C. Our job is to carry out those initiatives and mandates. Our offices provide program training and support to hundreds of SBA participating program lender institutions and SBA-financed microlenders, who loan federally guaranteed capital to small businesses.

What are some of the programs and services for which you are responsible?

SALISBURY: We oversee the services of

small business development centers, women’s business centers, a veterans business resource center and SCORE Mentor chapters. These help people begin to navigate starting small businesses or growing their business. They are extremely essential to us because they are places we can’t be every day. There are 85 of these around the state. Most of these SBDCs have a connection with an educational campus nearby. Any individual can walk in, call on the phone or go online and say, “I have an idea, and I want to start a winery.” At that point, they can engage, and we can counsel them on how to develop a business plan, how to find resources on how to create that business and get training on the subject. In addition, SBA district offices teach small businesses how to participate in federal contracting opportunities and administer the federal contracting program. In the last year, there were over 54,000 people who availed themselves of one or more of our services. These are the kinds of things the SBA is seeking to achieve.

What are your priorities for Region VII?

How has your background in the lending sector prepared you for your current position?

SALISBURY: We want to get the word out, even in metropolitan areas, about the SBA and the programs and resources available to small businesses and entrepreneurs. We want to make sure that the rural marketplaces are aware of what the SBA can bring to the table, as well. We’ve had a hiring freeze and a buyout, but we are embarking on an initiative to add to our offices.

SALISBURY: It has prepared me very well. I

have been in and around small business my entire life. I watched my dad and mom sit at the dining room table doing all the things involved in running a small business. My degree is in education, but I turned to the small business sector. The lending aspect is something I picked up while at UMB. Small businesses provide 54.8 percent of the jobs in region. While big businesses are great … the stability in job creation is small businesses.

What is the greatest challenge you face on the job?

SALISBURY: To marshal our resources and

put them to the best possible use and let the population know that there is a government agency that is available to them as a resource partner to assist them in achieving their dream. We are truly interested in people being successful, having steady income and growing.

Ruth Baum Bigus is a freeland writer in the Kansas City area.

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BIGGER | profile S M A R T

( by Kate Liebsle)

S T R AT E G I E S

A Palatable Partnership Collaboration provides bakeries mutual benefits.

ou can hear it in Robin Knight’s voice. This is not a woman who gives up easily— particularly when it comes to her daughters. So, when both girls were diagnosed as gluten-intolerant several years ago, Knight set out to make sure that sweet treats were still a part of their lives. The diagnosis came first for Knight’s eldest, Emily, whose biggest sadness about the 32 THINKING BIGGER BUSINESS // March 2018

diagnosis was the idea that she’d never again enjoy the raspberry cream cupcakes she’d come to love as a high schooler working parttime at Dolce Bakery. Knight took to the kitchen, and before long, Emily had a gluten-free raspberry cream cupcake. But from her experience in a career in marketing and advertising, Knight was able to quickly recognize the marketplace gap for delicious, gluten-free desserts. Her products were quickly accepted and sold in bakeries throughout the metropolitan area, but she wanted to reach more people.

Pie Partners After meeting restaurateur Jasper Mirabile, he encouraged her to get her products to David Ball, owner of Hen House Markets. One Saturday morning, a little more than two years ago, Knight joined Mirabile at an event and passed some samples to Ball. By Monday morning, she had two voicemails from Balls Food Stores and one from Tippin’s Gourmet Pies LLC (sister companies both owned by Four B Corp.). A partnership soon was born. Tippin’s hadn’t necessarily been in the market for a gluten-free partner, but the opportunity was too good to pass up, said

STRATEGY Partnering with a larger operation to grow EMILY KATE’S BAKERY

Gluten-free bakery Prairie Village, Kan. (913) 645-7674 EmilyKatesBakery.com Founded: 2014 Employees: 3 full-time, 5 part-time

1 Tippin’s President Mark Boyer, former Kansas City Star food editor Jill Silva and Emily Kate’s Bakery founder Robin Knight took part in a Facebook Live broadcast in November 2017. (Photo courtesy of Tippin’s Pies) 2 Emily Kate’s Bakery

works on its gluten-free crust for a collaboration with Tippin’s Gourmet Pies. (Photo courtesy of Robin Knight and Amber Abram, Emily Kate’s Bakery) 3 Emily Kate’s bakers double-fill pumpkin pies, just like Tippin’s does, to make the fillings generous and prevent the custard from separating from the crust. (Photo courtesy of Robin Knight and Amber Abram, Emily Kate’s Bakery) 4 The gluten-free pies make by Emily Kate’s for Tippin’s were sold in Kansas City; St. Louis; Tulsa, Okla; and several cities in Wisconsin. (Photo courtesy of Tippin’s Pies)

Mark Boyer, Tippin’s president. “For us to do (gluten-free) would mean building another production facility,” he said. “We talked with Robin and were impressed with what we saw. She runs a really good operation.” ‘One of the Hardest Things I’ve Ever Done’ But the road from a Saturday morning meeting to grocery store shelves wasn’t always smooth. The first—and biggest—challenge was taste. The treats that Knight brought Ball were delicious. But could she mass-produce a gluten-free pie crust that would be up to Tippin’s standards? Knight’s first efforts at a crust were, well, crunchy, Boyer said. But the taste was delicious, so Knight and the Tippin’s team went back to the drawing board. “One of the hard things about gluten-free flour that it has no personality, no strength,” Knight said. “I had to modify the recipe.” On the production side lay another significant challenge: being a small bakery operation in a big production world, Knight said. The rules and regulations Tippin’s is subject to are expansive—and Knight had to adhere to them as well. “We were really punching above our weight class, and they were punching below theirs,” she said. “It was easily one of the hardest things I’ve ever done. But Mark gave us so many resources, such patience and time.”

TIPPIN’S GOURMET PIES LLC Artisan pies, baked goods and soups Kansas City, Kan. (800) 435-3382 Tippins.net Founded: 1980 Employees: 80+

She wasn’t about to give up, Knight admits. “The stakes were so high,” she said. “I am real competitive.” It took until the ninth iteration of crust, but, finally, the taste, texture, smell—everything— came together, and the team at Tippin’s was ready to move forward. A Delicious Collaboration For the holiday season of 2016, Tippin’s debuted gluten-free pumpkin pies at its KC-area Hen House locations. In 2017, it offered them in Kansas City, St. Louis, Oklahoma and Wisconsin. Plans are in the works to collaborate this year, as well. Small-scale manufacturing has always been Knight’s goal. “Limited quantity, custom production just doesn’t make sense,” she said.

Still, the next move—to different flavored pies and year-round distribution—is a big one. It’s not imminent, but it’s definitely the goal. “I really want to do fruit pies and, eventually, French silk,” Knight said. As for Tippin’s, Boyer is looking forward to more pies from Knight and continuing their partnership. “It’s fun to see them be successful,” he said. Kate Liebsle is a freelance writer in the Kansas City area.

SMART STRATEGIES Want to do more with your business? Get smart. Our Smart Strategies articles offer advice from experts and experiences from other companies about what works—and what doesn’t. Whether it’s a learning opportunity or just a refresher, these guides offer a resource for owners to think bigger and do business better. Want to share your expertise with our audience? Contact editor@ithinkbigger.com with a topic and description of a proposed article.

Read on for more Smart Strategies SMART COMPANIES THINKING BIGGER®

BIGGER | hr S M A R T

( by Mike Montague )

S T R AT E G I E S

because it is where the participants must reach outside of their comfort zones to try something differentâ&#x20AC;&#x201D;and then keep trying until it becomes a new habit. This step also usually requires some coaching from a leader because participants will have lots of questions and challenges as they implement new habits or processes for the first time. Reinforcement is the key to any training taking hold. It is never-ending because lasting results require lifelong learning, but a solid reinforcement plan will have curriculums lasting 18 months to three years.

Invest in The Power of Training 4 steps to effectively developing your employees.

lot of small businesses struggle with employee development. If you train people and they leave, it hurts. If you donâ&#x20AC;&#x2122;t train them and they stay, it hurts even more! When thinking about employee development, ask yourself this one question: Does my organization consistently contribute to the growth of its people in a manner that leads to positive results for them and the company? Developing Employees An effective employee development program has four key steps. 1 Evaluation // First, you are going to need to know three things: where your team is now, where you want them to be, and where are the gaps. Start with an accurate assessment of your current reality. The evaluation phase should include self-assessment by the participants; a 360-degree assessment by peers, managers, subordinates and clients; and an objective assessment by a third-party consultant or online evaluation tool. 34 THINKING BIGGER BUSINESS // March 2018

Once you have an accurate picture of your team, you can begin to benchmark them against top performers and identify the training needs. 2 Impact Training // The next phase is quickhitting training for the immediate impact of baseline knowledge. Typically, this is a bootcamp-style training where you can get everyone on the same page very quickly. It can be virtual, live instructor-led or even a recorded online course, but the goals are the same. You will want your team to become aware of your new expectations and build the foundations of knowledge that will help them to learn and execute the desired behavior. Impact training is great for short-term motivation, building consensus, and communicating best practices and processes. This step is normally the first 60-90 days of the training program. 3 Reinforcement // Impact training rarely creates lasting success. For that, you are going to need to practice what you preached in kicking off the training. It is time for your participants to apply the strategy and tactics, and challenge the current status quo. This phase is the most crucial

4 Accountability // The final step involves coaching and accountability. For participants to move from application of new concepts to ownership and mastery of them, they are going to need help. Managers, trainers and peer accountability partners play a crucial role in helping participants stay on track. Usually, two or more accountability partners yield the best results, like a manager and a peer. These partners can meet in person, by phone or via web conference; the important part is maintaining good communication and the new habits you have worked so hard to instill. The accountability phase should begin right after the impact trainingâ&#x20AC;&#x201D;and it should never end.

Repeating the Cycle The path to mastery never ends, and neither should employee development. Once you have completed all four steps, it will be time to start back over at evaluation. Look at your progress, set new benchmarks, and critique what is working and what is not. Invest the time, money and resources to design an effective training process with evaluation, impact, reinforcement and accountability for your team. It is the only way to create long-term change and improve the performance of your organization. Mike Montague is VP of Online Learning at Sandler Training, where he teaches the behaviors, attitudes, and techniques of interpersonal communication needed to be more successful in business. He is a collector of best practices for management, sales and marketing. (410) 753-8162 // mike.montague@sandler.com // Twitter: @mikedmontague

BIGGER | law S M A R T

( by Jim Holland )

S T R AT E G I E S

6 Employment Issues Every Small Business Should Address Avoid major headaches down the road. Adopt these policies now.

ntrepreneurs have only so much time and energy. Most of it is dedicated to doing whatever it takes to get their nascent ventures off the ground, including developing their products or services, pursuing capital and developing sales channels. Even when the company begins hiring its first few employees, entrepreneurs often remain focused on those foundational activities and don’t pay attention to another essential aspect of the business: employment issues. Ultimately, though, these matters are critical because the actions of employees who come and go over time will have enormous impact on the company’s ability to succeed. The Value of Employment Policies Entrepreneurs often believe they don’t need employment policies because employees have embraced the owner’s vision and will always have the company’s best interests at heart. Sadly, many of these entrepreneurs experience negative employee situations they never thought would happen. With very few exceptions, the law doesn’t require small businesses to implement any particular policies. From a legal standpoint, however, certain policies are essential. Every startup founder—and every small business, for that matter—needs written employee policies and procedures that protect the company. Developing the policies also compels the company owner to think through the culture he or she wants to create. That clarity, coupled with policies that support the cultural vision, makes the company a better employer and ensures compliance with relevant laws. Employment Policies and Compliance The following are basic policies and compliance issues for entrepreneurial businesses: 1 Worker classification // Small businesses often hire “independent contractors” to

supplement employee expertise or manage increased seasonal demands. Similarly, many small businesses believe every “salaried” worker is exempt from overtime pay. However, the Department of Labor has strict regulations about who qualifies as an employee vs. an independent contractor or as an exempt vs. nonexempt employee. Businesses that misclassify workers are at risk for expensive fines and potential litigation that can cost thousands. 2 Noncompete agreements // These agreements can forbid departing employees from competing in certain geographic areas for certain periods of time, soliciting fellow employees or customers or disclosing confidential information. Small businesses often use internet resources to draft their own agreements, but many courts have declined to honor such “blanket” noncompetes. Entrepreneurs should consider seeking legal counsel in drafting or reviewing noncompetes to make sure the document can be enforced in the state in which the company operates. 3 Trade secret protections // A young firm’s employees often have full access to customer lists, formulas, methods, processes, techniques, programs and product secrets. Employee mobility is increasing, and confidential work and proprietary models can be prone to covert theft when employees change jobs. Small businesses should ask employees to sign confidentiality or nondisclosure agreements that forbid the employee from disclosing trade secrets or using proprietary information against the company if the employee leaves. 4 Anti-discrimination and anti-harassment //

Small businesses should have a policy against discrimination or harassment in any form. The policy should not only prohibit unlawful discrimination and harassment, but should also state that the company expects employees to treat each other in a professional and

respectful manner at all times. The policy should outline a process by which an employee can make a discrimination or harassment complaint and prohibit retaliation against any who do complain. 5 Technology // The National Labor Relations Board has not looked favorably on policies that attempt to limit employees from making negative social media or blog posts about the company. However, it’s a good idea to have a policy about the company’s expectations regarding social media posts. The policy also should reference when cellphones can be used at work and how employees are expected to use devices the company provides. 6 Arbitration agreement // No entrepreneur wants to experience an employee lawsuit, but they do happen. If employees have signed arbitration agreements, the outcome of an employee lawsuit will be decided by an arbitrator instead of in a public courtroom with a jury. With these agreements, the company avoids the risk of a jury decision that awards exorbitant monetary damages to the employee. Small business owners are good at running their businesses but aren’t necessarily skilled at addressing employment policies that may be critical to their success. Multiple policies need to be discussed and tailored for each company in order to help it succeed. Seeking legal advice on the front end to make sure policies and compliance issues are correctly addressed can save hundreds of thousands of dollars on the back end. Jim Holland is managing partner in the Kansas City office of labor and employment firm Fisher Phillips. (816) 842-8770 / jholland@fisherphillips.com

SMART COMPANIES THINKING BIGGER®

BIGGER | growth S M A R T

( by Stephanie Landis )

S T R AT E G I E S

Common Barriers to Strategy Execution (Only 10% of organizations execute their strategy)

Develop The Road Map for Your Company’s Future Why and how to ensure your strategic plan is a success.

trategic planning is an organization’s process of defining its strategy or direction, and making decisions on allocating its resources to pursue this strategy. Benefits of strategic planning include: » Improving employee, customer and supplier relations » Reducing overall risk » Preparing for profitable growth » Maximizing long-term value » Enhancing access to capital » Increasing transferrable value In a recent Small Business Pulse survey, 75 percent of the owners surveyed believe that a written strategic plan causes their business to perform at a higher level in sales and profits. 36 THINKING BIGGER BUSINESS // March 2018

In addition, if your business is one of the 250,000 businesses that baby boomers will transition by 2030, the transferrable value of your business will be greatly enhanced by having a strategic plan in place. So one might ask: » Why doesn’t our company have a strategic plan? » Why can’t we execute the strategic plan we have developed? Well, many companies think the planning process in general is superfluous; as long as the business is generating revenue and has money in the bank, it is doing fine. However, “the biggest issue in strategic planning is not the formulation, but rather the implementation,” according to the Association of Strategic Planning, the leading global nonprofit professional association dedicated to advancing thought and practice in strategy development and deployment for business, nonprofit and government organizations.

How do you ensure the development and execution of your company’s strategic plan? Follow the steps below. DISCOVER Where is the business today?

» Assess all areas of the company that impact every business regardless of size or industry: financial, planning, leadership, people, sales, marketing, operations and legal. » Complete a SWOT analysis (strengths, weaknesses, and opportunities and threats) to define the internal and external factors that may impact the company’s future performance. DEFINE This is the big picture; typically three to five years in the future. Mission // An external statement as to why

the company exists: business, customers and competitive advantage.

Vision // An internal, inspirational statement

defining what the company will look like in the future: beliefs, values and behavior. Objectives // Identify three top-level objectives

for the company, of which one should be EBITDA (i.e. sales—expenses before interest, taxes, depreciation or amortization) Strategies // Identify three to five strategies

that are based on the company’s strengths and are focused on achieving the company’s mission. FOCUS Develop the company’s strategic plan utilizing the discovery information to identify gaps and opportunities needed to achieve its defined mission, vision, top-level objectives and strategies.

» Identify solutions in each of the key areas (financial, planning, leadership, people, sales, marketing, operations and legal) and ensure alignment of the departmental

IMPLEMENT Communicate, monitor and review

» Formalize future projections, including the costs associated with achieving the objectives. » Develop and monitor key performance indicators that align with and support the strategic plan. » Communicate frequently with all levels of the company, ensuring they understand their part in the company’s success. » Review progress each quarter. » Annually reset based on actual performance.

The biggest issue in strategic planning is not the formulation, but rather the implementation.

Taking the time to clearly articulate the purpose and direction of your business will, quite simply, help your business achieve success at a much more rapid pace. It will allow you to take the focus off of the dayto-day and project a picture of the future, including the steps needed to get there. Stephanie Landis is a certified value growth adviser with the Kansas Small Business Development Center at Johnson County Community College. The Kansas SBDC helps business owners set goals, identify resources and achieve success through 1:1 advising and training. (913) 469-4485 // slandis1@jccc.edu

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He’s convinced other construction entrepreneurs would benefit, too. PRINCIPLES FIRST

(Photo courtesy of Zach Bauman Photography)

scaling the restoration side. The results were immediate. Profits increased virtually overnight. ScaleUP! experts pointed out that Thonen would have discovered the problem himself if he clearly understood and reviewed his finances. Until recently, Thonen outsourced his books. “So every quarter, I got this packet in my email that explained how I was doing. It never made any sense to me,” he says. His wife, who has a background in analytics, has since taken over the role. The two sit down and discuss expenses and revenues every week. On any given week, Thonen knows what was his biggest expense is and why. It allows him to clearly see the big picture. Many ScaleUP! graduates rave about the program’s lectures. Thonen agrees but says the one-on-one business coaching sessions changed the trajectory of his company. “I’m just not super book-smart. I’ve always been more hands-on than anything else. The coaching helped me more than just the lecture,” he says.

Thonen got into electrical and construction work to help others. His family suffered a devastating house fire when he was a child. A crooked contractor all but stole their insurance check, too. That trauma prompted Thonen to build his brand around compassion. He’s working with families who often have suffered devastating blows. “I couldn’t be any happier than when I read this letter from a 70-year-old customer that had the best experience they’ve ever had with what really is probably the most traumatic experience of their life,” he says. “That’s my drive. I just feel so much better about myself when customers are happy after something like that.” ScaleUP! experts pointed out that Thonen’s values were the company’s best marketing tool. Instead of spending time in the office and investing hefty sums in advertising, Thonen needed to be the face of the business. He used to send employees to meet customers, but now that’s his role. It helps his business stand out from a sea of companies looking to make a buck on insurance payouts. The face-to-face meetings have worked. “I was overwhelmed by how people responded,” he says. Gregory McGraw was one of those customers. McGraw and his husband, Paul Nagorski, were heartbroken when a water leak caused significant damage to their home. The damage included a one-of-a-kind painting that wrapped around their wall and ceiling. It was commissioned when the home was featured years ago in the Kansas City Symphony Designers’ Showhouse. Thonen’s team tracked down the stealthy leak origin and repaired the stately home’s distinct details, including barrel ceilings, crown molding and more. Thonen selected an artist to repair the ceiling. It turned out even better than the original, McGraw says. “The people they had working were professional and experts at what they were doing,” McGraw says. But another aspect stood out. The team faced a tight deadline because McGraw was

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fighting cancer and needed a healthy living space. The team finished the work, but Thonen continues to check on McGraw’s health. It was something McGraw never expected from a construction company. “That’s how much he cares about his customers,” McGraw says. NEW MARKETS

As part of ScaleUP!, Thonen also greatly expanded his market. ScaleUP! coaches urged him to seek out partners. Thonen formed partnerships with mitigation services that help customers with flooded basements and other emergency work. The businesses send him customers daily. Several other ScaleUP! speakers offered significant advice including how to retain employees in the construction industry, where turnover is steady. It prompted Thonen to start regular staff meetings to share news about the company’s growth. He already offers bonuses to employees but plans to explore more rewards for employees who help the business grow. He knows that he can continue to grow if he can fill all eight positions in his company. “I think that’s a huge, huge part of growth,” he says. “You can’t do it by yourself.” Dawn Bormann is a freelance writer in the Kansas City area. SMART COMPANIES THINKING BIGGER®

SCALEUP! KC

S O U V E N E A R ( by Kate Liebsle)

Growing Near And Far SOUVENEAR AIMS TO ARRIVE IN AIRPORTS NATIONWIDE.

t’s a story we can all relate to in some way: Either you have been the traveler at the airport frantically searching for a lastminute souvenir while dashing to your gate, or you have received a less-than-ideal souvenir, bought at the last minute at the airport. In both cases, the gifter ends up feeling like he or she missed the mark and the recipients as though they were an after-thought. Nobody is happy. There’s a nearly four-year-old Kansas City company that’s working to change all that, however. Meet SouveNEAR. 42 THINKING BIGGER BUSINESS // March 2018

SouveNEAR curates locally made, artistic souvenirs and sells them through vending machines. The company was founded in 2014 by two local women, Tiffany King and Suzanne Southard. Now, SouveNEAR is ready for rapid, nationwide expansion. To help with that process, King and Southard are working with ScaleUP! Kansas City at the University of Missouri-Kansas City’s Innovation Center. ScaleUP! Kansas City is a free program with support from the Ewing Marion Kauffman Foundation that offers classes,

peer mentoring, professional guidance and more. It’s open to small business owners who operate in a market capable of supporting more than $1 million in annual sales and who want to grow rapidly. FORMING THE IDEA

SouveNEAR began over coffee at Aixois when two friends who shared an entrepreneurial spirit began discussing whether they should start a business together. “After throwing out a number of ideas, we found one particularly inspiring,” King said. Recognizing the challenge many travelers face trying to find a last-minute souvenir, they envisioned a national brand known for

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Tiffany King

offering what they always wished they could find in busy places—artistic, maker goods actually designed and made in the cities they represented. King and Southard both loved the idea of helping artists and makers get in front of a wider audience, they said. They immediately enrolled in the Kaufmann FastTrac program, which introduced them to many Kansas City professionals who continue to guide, advise and partner with them to this day. “We knew getting into high-traffic locations would also mean high rents,” King said. “A vending machine struck us as the perfect solution. We pictured an indie craft fair in a box, open 24 hours a day. It seemed like a fun way to offer transportable, affordable, locally made souvenirs to travelers.” The company’s first vending machine was installed at KCI in November 2014. Today,

there are eight machines at KCI. They can be our ambitious goals for growing our business,” found inside Southwest, Delta, United and King said. “We want to be ready to take on American Airlines gates, as well as outside outside investment. ScaleUP! not only security in Terminals B and C. lets us learn from entrepreneurial The vending machines offer a thought leaders but also from range of gifts such as jewelry, other business owners with T-shirts, art prints and similar big goals.” gourmet foods—each with a Southard previously distinctive artistic take. The worked in retail, managing company owners are always two Ten Thousand Villages scouting for new artists and stores in Baltimore. King makers to include in the mix. had been in real estate, In 2016, the company armed with a degree in Su zan rd expanded to the Bay Area and economics. They both had ne Southa now has four machines within transferrable skills, but starting Oakland International Airport. and running a business is different, Why was the Bay Area the second location King said, and she and Southard always for SouveNEAR? That’s a good, old-fashioned appreciate opportunities to learn alongside story of making the most of an opportunity. other business owners. “After getting some early national press about King is excited to be a part of ScaleUP! and our business, we received a very passionate has found it valuable, even just a few sessions email from a woman in the Bay Area who into the 16-week program. Subject-matter loved the concept of SouveNEAR. She experts offer their experiences, input and expressed her interest in helping us expand share insights with the cohort members. SouveNEAR to the West Coast.” One of the benefits she especially appreciates Betsy Wolf, a lifelong traveler, felt the idea is meeting and learning from the other 17 of SouveNEAR was long overdue. With a members of this cohort. There’s a wide range background in project management and softof businesses represented. “There’s a great ware development, she made a great addition openness to helping each other,” King said. to the team. Soon she was a partner in the Kate Liebsle is a freelance writer in the Kansas business, managing Bay Area operations as City area. well as working with King and Southard to grow the company nationally. Now, it’s time to take on the East Coast and the rest of the country. ENTREPRENEURS NATIONAL EXPANSION

Tiffany King and Suzanne Southard

But to really gear up across the country, King and Southard once again turned to Kansas City’s powerful entrepreneurial community, applying for and being accepted into the seventh cohort of the ScaleUP! program, which began in January. It was an ideal match: ScaleUP! helps qualified companies with revenue of more than $150,000 reach their expansion goals. Through ScaleUP!, King and Southard hope to develop a very detailed, clear plan for SouveNEAR’s growth. ScaleUP! is the perfect place for SouveNEAR to learn what it will take to go to the next level, King said. “ScaleUP! gives us a chance to evaluate which path makes the most sense in achieving

COMPANY

SouveNEAR www.souvenear.com SouveNEAR sells artful, locally made and designed souvenirs in vending machines. The machines are located in a number of areas at Kansas City International Airport and Oakland (Calif.) International Airport. ARE YOU READY TO SCALE UP?

ScaleUP! Kansas City—a free program for KC small businesses—is looking for companies that want to supercharge their growth. Learn more at www.scaleupkc.com

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Banking/Finance ( by Katie Bean )

2018

WHAT BUSINESS OWNERS NEED TO KNOW ABOUT GETTING A LOAN OR LINE OF CREDIT

The Right Time, Right Way To Take On Debt E

very business is different, but there’s a point in the life cycle

common to most: the need for capital. It’s common to hear entrepreneurs talk about bootstrapping. Sometimes it’s a matter of pride; other times, it’s a matter of necessity— at least until the business is ready for outside capital. 44 THINKING BIGGER BUSINESS // March 2018

But many businesses reach a point where they are ready to work with a bank. Jason Moxness, market president of Core Bank, recommends developing a relationship with a banker early on to get advice about the best way to finance the business. “Proper structure out of the gate really does dictate the success of the business,” he says. “Even if it feels like it’s too early, it’s good to have a

conversation with a banker to determine when would be the appropriate time to take on debt. And that really depends on how you’re going to use it.” There are two common ways to borrow from a bank: a line of credit and a term loan. “Think of (a line of credit) a little like a credit card, and think of a term loan like a car loan,” said Julie Nelson Meers, a commercial lender at Mobank.

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The bankers and two small business owners helped to break down when each type of loan might be right for a business. LINE OF CREDIT

“Access to capital is very important,” Moxness said. “On a line of credit, knowing that you have it, even though you’re not drawing on it, is beneficial. “Building business credit, similar to your personal credit, is important. It builds your balance sheet as a small business to have business debt—the ability to grow your business quicker than you could otherwise.” Small businesses that bootstrap with the owner’s cash “sometimes decline quicker because they get to the end of their cash flow supply and run out (of money) before their ideas run out,” he said. Laura Schmidt started her business with personal funds. She founded Notes to Self LLC in 2011, a company that sells American-made socks with words of encouragement like “I am confident” knitted in during manufacturing.

She tried to get a bank loan in 2012 but was turned down. She was surprised that even though she had good personal credit, she wasn’t considered a candidate for a business loan. So she bootstrapped. She refinanced her house and used money from that to buy inventory. At first, she used personal credit cards with low interest rates for business purchases. After meeting with a banker, Schmidt was able to secure a business credit card with a $15,000 limit. Using that card, she was able to further grow her business to the point where she was eligible for an initial $50,000 line of credit with the bank. “The line of credit got me out of that credit card game, and it just leveled things out for me,” Schmidt said. “I knew that I was just paying one place and I just had one thing to keep track of instead of all these different due dates.” Nelson Meers said businesses like Notes to Self that have inventory are likely to need a line of credit. continued

Laura Schmidt, owner of notes to self, with a selection of her inventory. (Photo courtesy of Earl Richardson)

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FASTTRACK BUSINESS LOAN PROGRAM

Several years ago, Blue Ridge Bank started the FASTtrack Business Loan

program to assist business customers with smaller loan needs. Often these businesses are just getting started, and this program was tailored to fit their needs. Vice president and business lender Adam Hubbard, who has been with Blue Ridge Bank for almost 12 years, leads the FASTtrack program. “Programs like this allow us to partner with our business customers and provide education and guidance along the way,” he said. Loan amounts range from $25,000 to $100,000, and a streamlined approval process allows customers to hear back usually within 48 hours. Some of the more common purposes for a FASTtrack loan are to purchase business equipment, working capital, and for a line of credit.

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Building relationships with customers is what has led to Blue Ridge Bank’s success after nearly six decades in the financial services industry. “As businesses grow, they will have more loan needs, and we hope to be their bank of choice along their journey,” Hubbard said. Blue Ridge Bank is truly providing the financial resources to help businesses realize their dreams. Give Adam a call or drop in to talk with him.

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Banking/Finance

2018

“A line of credit is ideal for “I think that if I didn’t have the a business that has accounts line of credit, it would be very receivable and also inventory. limiting,” she said. “The line You don’t have to have has been freeing—it’s been both,” she said. “If you almost comforting just to have accounts receivable know it’s there.” and inventory, you’ll Still, Schmidt said, definitely want a line of it’s been important for her credit as soon as you can to have the line of credit qualify for one.” paid down to zero once a Ju l ie rs The line of credit helps year to reassure herself she’s Nelson Mee to smooth out cash flow issues not living beyond her means. that arise from buying inventory, TERM LOAN waiting for items to sell and then someA term loan is for a big purchase — for times waiting up to 60 days for payment, example, a piece of equipment. Unlike the line she said. of credit, the balance doesn’t revolve. Rather, “A line of credit is the release valve to your the business makes regular monthly payments cash being tied up,” she said. to reduce the balance over time. Banks will set the credit limit by looking at Often a company that’s growing and has the cost of inventory and a report of accounts a strong history of profitability is the best receivable, Nelson Meers said. The bank also candidate for a commercial loan, both will take into account the company’s net worth Moxness and Nelson Meers said. and historic profitability, she said. But there’s another term loan option Like on a credit card, businesses only pay interest on the amount borrowed from the line available to some startups—SBA loans. These are backed by the U.S. Small Business of credit. The limit typically increases once a Administration and give banks more flexibility year, Nelson Meers said. to work with companies that don’t have a For Schmidt, whose products now are in financial track record yet. 1,900 stores, having a line of credit took a weight off her shoulders.

SBA loans often are used to lend money for working capital, Moxness said. It can be used for purposes such as hiring employees or buying inventory to get the business off the ground. Cindy Farrow was able to secure an SBA loan for her new retail store in Parkville, The Fabric Chic. Farrow’s shop, set to open March 1, caters to quilters and sewing enthusiasts with a selection of high-quality fabric in a variety of contemporary prints. It also has a classroom with sewing machines for beginner lessons, workshops and “sip and sew” sessions. Farrow was able to secure an SBA loan for $150,000, which she said has a good interest rate and 10-year payback period. She is using the money to create a sleek-looking store with custom shelving, fabric inventory and a good point of sale system that will allow her to track sales and customer data. “I wanted everything to be as electronic as possible,” Farrow said. “Having that money allowed me to really set this up the way I think it needed to be right from the beginning.” Though she said she has a “decent base” of fabric selection to begin, Farrow said she spaced out her orders throughout the year to take advantage of the new patterns released every four to five weeks.

1 notes to self team leaders Sandra Scheuler and Becky Swanson, fulfill order requests from the inventory. (Photo courtesy of Don Delphia) 2 Laura Schmidt, owner of notes to self. (Photo courtesy of Earl Richardson) 3 & 4 The Fabric Chic owner, Cindy Farrow, stitches some quilt pieces together in her new shop. (Photos courtesy of Cindy Farrow) 46 THINKING BIGGER BUSINESS // March 2018

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Farrow said she did a lot of research before choosing an SBA loan. Still, there were some surprises. There are so many requirements, she joked, that she was ready to be asked to sign over her first-born child. “When you get the loan, you don’t just get money. You have to ask for it—you have to show them I’m using this for inventory purchase. You don’t just get the $150,000 and go spend it. It’s really controlled,” Farrow said. “I didn’t like that at first. I really kind of like it now because it holds you accountable. Everything I’m spending, I’m asking myself, ‘Is this purchase really going to benefit bottom line?’ It’s got to have a true purpose.” Her advice to other business owners was to thoroughly research the options and discuss with a banker the fees, the process and how long it will take. Moxness agreed with Farrow—a good place to start researching loan options is at the local SBA office in downtown Kansas City, he said. He also recommended that borrowers find

an SBA preferred lender if they decide to go that route. “That means they’re able to make all the loan decisions locally—they don’t have to go to SBA for approval,” he said. “When you work with a preferred lender, the SBA has given them the ability to make all the loan decisions. So from a timing perspective and red tape, if you will, you’ll have an easier, more streamlined process working with one of the preferred lenders in town.” He also advised that the process to get an SBA loan looks more like a job interview, where startups will be peppered with questions and need to bring a strong business plan. Whether a business is seeking a traditional term loan or an SBA loan, “It comes down to the why—what do you need it for and how are you going to use it?” Moxness said.

2 Katie Bean is the Executive Vice President at Thinking Bigger Business Media. (913) 432-6690 // kbean@ithinkbigger.com

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1 & 2 Cindy Farrow, The Fabric Chic owner works on

some quilt pieces and shows off the fabric choices at the new shop. (Photos courtesy of Cindy Farrow)

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