Business Monthly - May 2012

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MAY 2012

CEDAR VALLEY BUSINESS MONTHLY

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THE COURIER

Business plan of attack

Military man starts business while serving in Afghanistan

By JIM OFFNER jim.offner@wcfcourier.com

INDEPENDENCE — Elliott Henderson was halfway around the world as he planned his new business, Henderson Events Center Inc. in Independence.

Henderson was serving in Afghanistan in 2009, a 1st Lieutenant with Bravo Company in the Iowa Army National Guard’s Waterloo-headquartered 1st Battalion 133rd infantry regiment.

He bought a building the year before — the old Miller’s Event and Auction Center, just down the road from the Heartland Acres Agribition Center. It closed after a fire in February 2008. The blaze burned through the roof and damaged about a third of the 12,000-square-foot facility.

The building sat empty for three years after the fire. But Henderson had plans for its resuscitation.

His original intent for the property was equipment storage for a snow-removal business he already had going and his family’s 2,500-acre corn and soybean operations.

But it didn’t take him long to develop a more ambitious plan.

“I realized it was too nice just to use for storage of equipment and turned it back into an events center,” he said. “I got it fixed up but had to leave for military training in 2009, and so I couldn’t open it up then.”

His unit was deployed to Afghanistan in 2010.

“You can’t depend on some-

Photos by RICK CHASE / Courier Staff Photographer

Elliott and Allison Henderson with their son, Meirek, inside the Henderson Events Center in Independence.

See EVENTS, page A4

CONTENTS

www.cvbusinessmonthly.com

Henderson Events Center is located at 2320 Iowa Ave., down the road from the Heartland Acres Agribition Center in Independence.

body else to get something like that started, so I had to wait,” he said. “I had to do all the legwork and paperwork.”

That included filling out a loan application from the Small Business Administration.

That’s how he spent his offduty time overseas.

Volume 6 ● No. 6

Cedar Valley Business Monthly is a free publication direct-mailed to more than 6,500 area businesses.

Contact us at (319) 291-1527 or P.O. Box 540, Waterloo, IA 50704.

STAFF DIRECTORY

ADVERTISING Jim Offner Small businesses the engine that powers David Braton the Cedar Valley economy............... page 4 david.braton@wcfcourier.com (319) 291-1403 University of Northern Iowa Jackie Nowparvar Listening is a simple but effective way to boost your bottom line .................. page 11 jackie.nowparvar@wcfcourier.com (319) 291-1527 Hawkeye Community College Sheila Kerns Seven habits of highly effective social sheila.kerns@wcfcourier.com media use for business ................ page 12 (319) 291-1448

SPONSORS EDITORIAL CONTENT Nancy Raffensperger Newhoff nancy.newhoff@wcfcourier.com (319) 291-1445 Jim Offner jim.offner@wcfcourier.com (319) 291-1598

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CEDAR VALLEY BUSINESS MONTHLY

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MAY 2012

Small business lending up in Iowa WASHINGTON, D.C. — The U.S. Department of the Treasury in April released a report showing that Iowa banks have increased their small business lending by $72.6 million since receiving capital through Small Business Lending Fund.

The SBLF, which was established as part of the Small Business Jobs Act that President Barack Obama signed into law, encourages community banks to increase their lending to small businesses to help them grow and create new jobs. Treasury

invested more than $4 billion in 332 institutions, located in over 3,000 communities in 48 states, through the SBLF. Nationwide, institutions participating in the SBLF significantly increased small business lending in the last quarter of 2011 by $1.3 billion over the prior quarter — for a total of $4.8 billion over their baseline.

The SBLF provides capital to community banks with under $10 billion in assets. The dividend rate such banks pay on SBLF funding is reduced as it increases its small business lending.

EVENTS

Henderson, who runs the center with his wife, Allison.

“Bookings have been very busy, actually, for all the Saturdays,” he said. “This year, we have 60 percent of all the common busy Saturdays for weddings and in 2013, 20 percent. We book at least a couple of weekends every week.”

Now Independence has two events centers. The Agribition Center has diverted some business Henderson’s way.

“They have been wonderful to work with because they’re a business that’s been established a lot longer,” he said. “We get a lot of overflow from there. Between the two of us, we believe Independence can become kind of an events center capital.”

The rate is $1,000 for the day, with clients supplying their own kitchen help.

Henderson said it is a good investment; Clayberg said it’s also an investment in the community.

“An events center is not going to be more jobs ... but it does bring people in who normally wouldn’t come to Independence that wouldn’t get exposure to our community and stay in our hotels,” Clayberg said. “It’s nice to have another building that can be functional for a chamber of commerce banquet, a prom or even a professional conference that would bring in 50 to 60 people during the week.”

For information about bookings, contact Allison Henderson at allison@hendersoneventscenterinc.com or call (319) 334-6464.

From page 3 “When I had some free time I’d work on it,” he said. “Everybody’s got a personal computer, and instead of playing video games, I’d work on a business plan and business stuff.”

Henderson finalized the deal the day he got home, July 18, 2011.

“I was still in my uniform when I went into the bank and signed all the paperwork,” he said.

Henderson “couldn’t wait one day” to get to work, said Nate Clayberg, director of the Buchanan County Economic Development Commission.

“It’s a unique situation,” Clayberg said. “You got guys coming back (from overseas service) with $60,000 to $100,000 in their pocket. They’ll live on that for a year, and they’ll find they’ve got to find work.”

Not so with Henderson.

There was a ready market for weddings and other events, with Heartland Acres booked three years out, Clayberg noted.

“Around here, from Oelwein to Manchester, there’s not many places to go,” he said. “And even in Cedar Rapids, Waterloo and Cedar Falls, your prices are a little higher for a wedding or show.”

After more than $100,000 in renovations, the center — at 2320 Iowa Ave. — hosted its first wedding in October.

Business has been steady, said

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MAY 2012

CEDAR VALLEY BUSINESS MONTHLY

Small businesses fuel Cedar Valley economy To say small businesses play a critical role in the U.S. and Cedar Valley economies would be to understate to the point of insult.

Small businesses employ roughly one-half of all Americans and account for about 60 percent of gross job creJim Offner is the Courier ation, according business editor. to the latest data Contact him at from the U.S. jim.offner@ Department of wcfcourier.com. the Treasury.

Virtually every company started as a small business. Steve Jobs started Apple Inc. in a garage. Deere & Co. was run by the Deere family for nearly a century-and-a-half, before the last descendant of John Deere left the company in the early 1980s.

But there are other facts about small businesses that may provide a bit of insight on how important even the tiniest firms are to the economy.

From businessinsider.com: ■ Small businesses in Iowa generate about $13.2 billion a year, or nearly 31 percent of the state’s economic activity.

■ It takes an average of six days to start a small business in the U.S., compared to 38 days in China.

■ Seventy percent of small businesses in the U.S. are owned by one person.

■ It costs an average of $32,500 to start a business in the U.S., or one-sixth the startup cost in India.

■ There were fewer business bankruptcies than consumer bankruptcies at this time last year, according to the Equifax credit reporting agency.

■ Fifty-four percent of small businesses are home-based, according to the U.S. Small Business Administration.

■ As many as 80 percent of new jobs come from small businesses, according to SBA.

See OFFNER, page 8

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CEDAR VALLEY BUSINESS MONTHLY

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MAY 2012

ROAST TOWN of the

UNI students look to fill coffee niche on College Hill

By JIM OFFNER jim.offner@wcfcourier.com

CEDAR FALLS — Nathan Wiemers figures there are a lot of coffee cups that need filling in Cedar Falls.

Wiemers, a sophomore public administration major at the University of Northern Iowa, isn’t waiting for somebody else to answer that need.

He and nine other students found a location for The Roast at 909 W. 23rd St. in the College Hill neighborhood adjacent to UNI. They also organized a board of six entrepreneurs to provide guidance.

The building had been vacant about four years. It is the former home of Bought Again Books, which was on the second-floor of the business.

Wiemers said his group’s venture is a bit different from its predecessor.

“It’s more traditional and kind of a student art venue, which is missing on the Hill right now,” he said of the group’s business vision. “It’s mostly just restaurants and bars. It’s an opportunity to help the community, RICK CHASE / Courier Staff Photographer because there’s really no alternaNathan Wiemers draws a cup of coffee in a booth set up along West 23rd Street in Cedar Falls. Wiemers and tive to bars. a group of other students are planning to open The Roast, a coffee shop, in the College Hill neighborhood near See ROAST, page 7 the University of Northern Iowa in August.

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ROAST From page 6 “Students may not be 21, or their values go against drinking, and there’s nothing else to do for the entire UNI community in the surrounding neighborhood,�

Wiemers said.

The organizers aren’t all business majors. Their specialities include marketing, interior design, electronic media and, of course, public administration. “They all bring unique strengths,� he said, adding that interior design is an asset in drawing up a layout and decor.

The board provides needed business expertise, Wiemers said. “That kind of helps the weakness of being students, offering connections, resources and direction,� he said.

Among the board members are Adam O’Leary, a UNI economics graduate last year, Doug Johnson, co-owner of University Book and Supply and Steve Ferguson, owner of Fergie’s Coffee and Tea in Ames.

Plans call for the business to open in August, in time for the return of the students for the fall semester, Wiemers said.

The would-be entrepreneurs have been busy getting their project going. They opened a coffee stand near the entrance of University Book and Supply, getting exposure and even accepting donations.

The have gotten plenty of guidance from the business incubator at UNI’s John Pappajohn Entrepreneurial Center, Wiemers said. “The professionals, Laurie Watje and Katherine Cota-Uyar, have a lot of legal and accounting experience and have small seed funding,â€? Wiemers said. “The biggest beneďŹ t is the office space they provide us.â€?

Watje, manager of the business incubator, said she has been working closely with the group. “With our initial startups, it’s mandatory they meet with me at least once a month, but we’re meeting a whole lot more often, working with him as far as basic knowledge of how to start up a

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CEDAR VALLEY BUSINESS MONTHLY

business,� Watje said. “People don’t realize you need to register your company name and how to structure it, as LLC, a corporation, etc.�

Beecher Law Firm in Waterloo provides legal guidance at a reduced rate, as well, Watje said.

The rest is up to Wiemers and his group, Watje said. “They’re doing a pretty good job trying to get their name out,� she said.

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PAGE 7

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I find Wartburg students compassionate. They are very caring, and they’re willing to open their hearts and roll up their sleeves to help others.

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CEDAR VALLEY BUSINESS MONTHLY

Small business owners must plan to ensure a sustainable retirement If you’re a small business owner, protecting yourself and your business goes beyond securing proper insurance agreements and building an emergency financial cushion — it also means ensuring that your savings will sustain Larry K. Fox you throughout is a private retirement. wealth adviser Most of those with Ameriprise a n t i c i p a t i n g Financial Inc. in retirement have Waterloo. Contact plans him at 234-7000. savings sponsored by their company, and though you are likely expecting to retire at some point, the process may be more complex in the absence of such a plan. You must determine how to keep your income flowing after retirement or how to capitalize by selling your business and creating a nest egg.

It’s never too early to begin planning for retirement, and there are several things you can do as a small business owner to prepare.

■ Make saving a priority. As other financial goals arise, saving for retirement may get over-

looked. It’s tempting to re-invest a large portion of your profit into your business, but you may regret not socking away more savings for your personal financial security — especially if retirement comes along faster than you expected. If you don’t have an established retirement savings plan, consider contributing to an IRA or other qualified investment plan. It’s less tempting to pull money from accounts that are earmarked for a specific goal.

■ Develop a succession plan.

It’s important to think about the future of the business that put so many resources into. Research the legal procedures for transferring ownership (to a family member or employee) and document in writing who you intend to take over your business after you’ve retired. There may be tax ramifications when you sell or transfer your business, so be aware of these so you can prepare for the financial impact.

■ Prepare to sell. If you intend to sell your business be realistic about its value. It is difficult to consider accepting less than you believe it is worth, but if you retire in a down market or sooner than you’d planned you may need to compromise on an offer. Keep in mind that sell-

OFFNER

Children who do want to carry on often bring their own ideas about how to build the enterprise. That could bring a mixedbag of results.

The Cedar Valley is rife with small commercial operations in a range of sectors. The John Pappajohn Entrepreneurial Center at the University of Northern Iowa generally has a dozen or more projects going at any one time.

This month the Cedar Valley Business Monthly throws a spotlight on small businesses. A glance through these pages will provide more than a little insight into some of those businesses and what makes them flourish.

From page 5 Those are encouraging statistics, but most small-business ventures still end in failure.

According to SBA, only half of startups will last five years; about seven in 10 will last two years.

Family-owned businesses can be particularly precarious enterprises because they often depend on contributions from entire clans. In some cases, kids don’t want to carry on the family legacy.

ing your business may be emotional. Having knowledge about the process before you consider offers may make it less stressful and ensure the decisions you make are financially sound.

Retirement can be especially confusing and complicated for small business owners, so consider working with a professional financial adviser who can help you balance your business needs with your personal ones.

Everyone has different priorities and values, but it is up to each individual to prepare for her own retirement. The earlier you begin planning, the easier it will be to fulfill your long-term financial goals and avoid difficult trade-offs.

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MAY 2012

SCORE has business advice for would-be entrepreneurs WATERLOO — Officials at the local SCORE location at 212 E. Fourth St. are offering free advice on how to start a business.

SCORE is a nonprofit association dedicated to helping small businesses get off the ground, grow and achieve their goals through education and mentorship.

Because the organization’s work is supported by the U.S. Small Business Administration and has a network of more than 13,000 volunteers, its leaders say, SCORE is able to deliver its services at no charge.

SCORE volunteers offer advice on how to start a business and mentoring from business owners who have faced

many common problems.

SCORE offers advice to an array of buisnesses, including retailing, food service/restaurants, construction, electronics, computer, advertising, marketing, financial controls, purchasing and inventory control, among others.

A counselor with expertise in a particular field is assigned and can call on other SCORE counselors, officials said.

Meetings are scheduled as frequently as needs demand.

To contact the local SCORE office or set up an initial counseling session, call 236-9878 or go to score.org and click on the green block “Get Free Local Mentoring” and enter a request.

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CEDAR VALLEY BUSINESS MONTHLY

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MAY 2012

Vital components to a successful small-business model The small business owner is the backbone of the American economy. They work out of garages, small stores on Main Street and huge corporate campuses, but regardless of location most small business owners have constructed a business plan Amy Lang before venturis assistant vice ing out on their president for commercial lending own. A busiat Community ness plan can be National Bank in your road map Waterloo. Contact her to success and at 291-2000. should include the products or services you intend to offer, what market to offer them to, financing sources and your ultimate goal.

The six M’s of owning a business play a large part on the success, or failure, of a business: ■ Mission — What will your services do for potential customers?

■ Market — Where are your potential customers? How do you reach them?

■ Message — Is your mission clear enough that potential customers understand who you are and what have to offer?

■ Media — What is going to work the best for you (radio, print, television)?

■ Method — Do you know what to do, with whom, with what, when and how to do it?

■ Management — Do you operate your business in a way that customers are completely satisfied?

Starting your own business is not easy. Statistics show most small businesses will not see a significant profit for two years (although you do need to show a profit after the third year, or the IRS might think you are trying to hide something). Owning your own business is not a 9-to-5 job.

Self-employed contract workers (writers, consultants) may work long hours under tight deadlines, while store owners spend anywhere from 80 to 120 hours or more a week maintaining their business. And then there are the regulations. Federal, state and municipal laws all must be followed. Small business owners also have to adapt to the everchanging customer wants.

The small business owner has many hats to wear including human resource director, marketing coordinator and financial analyst. As a small business owner, you will need to be both a leader and a manager even if you don’t have any employees. As an owner you will need to lead your business and be able to envision your business’ future. At the same time, you must engage in the day-to-day activities necessary to running your business.

Leaders are typically characterized as visionary, creative, passionate, risk-takers, proactive,

and results-oriented. Leaders do not like repetitive work. They do like to lead people in the direction they envision. Leaders like to encourage different perspectives and to open discussion and engagement; they focus more on the future, less on the past. Sometimes it’s challenging to keep leaders focused on the present. Leaders sometimes have difficulties working with others — they are in their own space, but will find change in the workplace exciting. Leaders may find it challenging to understand people and their motivations because leaders are somewhat self-centered (in the sense that they view the world from their own perspective, not others).

Managers are typically characterized as problem-solvers, people oriented, often more reactive

(working from a historical perspective — what just happened rather than what’s going to happen), hard working, time sensitive and focused on fulfilling the company’s goals. They like to solve problems, make decisions and have closure. Managers like to minimize or eliminate conflict in the workplace. Strong managers like working with people and are still able to keep business and personal relationships separate.

Managers may find handling and managing change in the workplace challenging.

As a small business owner, there are times you will need to exhibit leadership qualities (for example, when starting up a small business; acquiring or merging with another business; when launching new products or services; entering new markets).

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California employers not liable if employees skip lunch breaks, state Supreme Court says Los Angeles Times

LOS ANGELES — California employers must make it possible for workers to take scheduled breaks but cannot be held liable if employees decide to work instead of rest, the California Supreme Court decided last month.

The state high court ruling came amid a proliferation of lawsuits brought by California workers against a wide range of

employers, particularly in the restaurant industry, that had sparked anxiety among business owners.

Tens of thousands of workers have contended that companies evadestatelaborlawrequirements by making it impossible to take scheduled breaks. Employers have countered that they should not be forced to police their workers as long as breaks are scheduled and made available.

And then there are times where you will need to exhibit management qualities; if not management of people, then management of events.

Operating effectively with both strong leadership and management skills can be a challenge for most people. Typically, business personalities tend to either be more of one than the other.

However in a small business both the leader and the manager are one and the same: the owner.

An ideal small business owner knows how to make plans, solve problems, hire, train, motivate, and lead employees. Being a small business owner is risky; it is probably the most risky legal career you can choose. But, with a lot of hard work, determination and luck, the rewards of starting your own business are excellent.

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MAY 2012

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CEDAR VALLEY BUSINESS MONTHLY

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Listening a simple but effective way to help bottom line Listening and hearing are related but different. Good listening can be very effective for the business owner.

A simple definition of hearing and listening is, “Hearing is the reception of sound; listening is the attachment of meaning to the Katherine sound.” This Cota-Uyar means hearing is associate director of the is passive and John Pappajohn effective listenEntrepreneurial ing is active.

Center at the We spend 40 University of Northern percent of our Iowa. Contact her time listening, at 273-5732 or 35 percent talkkatherine.cota@ ing, 16 percent uni.edu. reading and 9 percent writing.

However, according to Romero, “Most of us aren’t good listeners.

We listen at about 25 percent of our potential, which means we forget, ignore, distort or misunderstand 75 percent of what we hear.” This can be costly personally and professionally.

There are clear benefits for business owners and employees who engage in effective listening.

These include improved profits,

promotions, increased job satisfaction, improved problem-solving and improved organizational awareness.

Active listening involves six skills: paying attention, holding judgment, reflecting, clarifying, summarizing and sharing.

Paying attention means be comfortable, be focused on listening, keep silent while the other person is speaking, provide verbal (i.e. uh-huh, yeah) and nonverbal (nodding, smiling) acknowledgements, and allow time for the other person to think and speak.

Holding judgment means keeping an open mind. Your goal is to understand what the person is saying. Don’t rush the conversation. Acknowledge the speaker’s perspective and practice empathy (put yourself in another’s shoes without making judgments).

Reflecting involves paraphrase information and emotions (clues can be in the words used, tone of voice, body language, etc.).

Clarify by asking open-ended questions (not “yes” or “no” questions) and by asking probing questions to get deeper into the matter or for more specifics.

Summarizing involves providing a brief restatement of the core themes raised by the other

Advice on shopping for a mortgage McClatchy-Tribune News Service

While mortgage rates remain very low, borrowing in the current tight credit climate can prove a challenge.

Prospective homeowners need to be as well informed as possible about the mortgage process and qualifying for a loan.

The Web can serve as a useful tool for answers about mortgage rates and the borrowing process.

Here are a few sites: ■ American Bankers Association: Provides general overview of how to shop for a home mortgage. www.acbankers.org/ Press+Room/MortgageTips.htm ■ Bankrate.com: A good primer

on how mortgages work and the different types of borrowing. www.bankrate.com/brm/green/ mtg/mort1a.asp ■ Federal Trade Commission: Features insights on how to shop, compare and negotiate a home mortgage. www.ftc.gov/bcp/ edu/pubs/consumer/homes/ rea09.shtm ■ Mortgage Calculators: Offers a wide range of mortgage insights and tips. www.mortgagecalculator.org/helpful-advice/upsand-downs-with-mortgages. php ■ Moving.com: Covers mortgage basics and finance tips. www.moving.com/articles/ mortgage-101.asp

person. This helps to confirm understanding of the points raised by the other person.

Sharing is when you present your ideas, feelings and opinions.

The way we communicate, work and lead is connected to our backgrounds. There are filters that affect our ability to listen.

These include memories, beliefs, attitudes, expectations, assumptions, prejudices, experiences and the physical environment.

Now that you know the steps to effective listening and the filters that may affect the ability to listen, let’s explore the types of listing.

Informative listening is used when the primary purpose is to simply understand of what is being said. Examples include lectures, receiving instructions, getting directions, briefings,

reports and speeches.

Relational listening is used to help an individual or to improve a relationship. This is frequently used in therapeutic situations like counseling or medicine.

Appreciative listening is used for enjoyment. Examples include: music, theatre, television, radio, film, presentations, etc.

Critical listening is used in many situations and is important for sales in business. It is used on the job, in the community, with the family, in church. We use critical listening with politicians, media, salespeople, financial advisers, clergy, etc.

Discriminative listening is the foundation for all other types of listening. It involves being sensitive to changes in the speaker’s rate, tone, volume, pitch, force, emphasis, etc. It also involves

providing feedback in the form of “uh-huh” and “I see”.

Things to avoid to help become a better listener include: (1) don’t pretend to listen, (2) don’t interrupt, (3) don’t think about what you want to say rather than listening to the speaker, (4) don’t talk when you should be listening, (5) don’t listen for what you expect rather than what is actually said, and (6) don’t tune out “dry” subjects.

Things to do to be a better listener include: (1) do pay attention, (2) do want to listen, (3) do delay judgment, (4) do encourage others to speak, and (5) do accept responsibility for understanding.

Being mindful of listening to our employees, customers, vendors, and others in our business relationships can provide great benefits professionally.

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CEDAR VALLEY BUSINESS MONTHLY

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MAY 2012

Seven habits of effective users of social media My husband and I recently attended a library technology conference. It has grown to 400 participants over the past few years, using social media to build its base.

Participants use a special Twitter hash tag to post about speakCherie Dargan ers, sessions is associate professor and vendors, of communications at so that others Hawkeye Community in attendance College, where she can see those teaches classes in posts. The conwriting, literature ference has its and educational own Facebook technology. Contact page: People her at 296-2320 use it to find or follow her on Twitter at twitter.com/ groups heading to restaurants, professorpost. comment on sessions, post pictures, connect people with lost items and create a sense of community. At least half of those attending the conference were using iPads and mobile apps, creating a steady stream of comments—and excitement.

How many businesses are using social media sites this effectively to promote events and build their base?

The Harvard Business Review surveyed several thousand companies about their use of social media and identified seven habits of effective users: 1. Effective users see social media as a part of their overall marketing strategy.

2. They include social media in their budgets.

3. They have a presence on up to four social media websites.

4. They use social media to connect with customers, monitor trends, and get reviews.

5. They use more multimedia on their Facebook pages and know the blogs and websites where their customers are spending time when not on Facebook or Twitter.

6. They use tools to analyze the impact of social media on their company.

7. They use a widget (or piece of code) to ask for users’ email addresses so that they can send them a newsletter or special discounts.

How can you follow their example? First, invest in some Facebook apps. Apps include add-ons for your Facebook page (some are free, and others are available for a small fee) such as a welcome page, a business profile, contact information, testimonials and more. Apps help your users feel more at home on your Facebook page. They may also include things like polls and blog postings, so they keep your customers on your Facebook page coming back. For more information about finding and using apps, you can search for Facebook apps for business on Google or do a search on Facebook.

Second, look at time spent on social media as an investment. Tech Republic blogger Justin James says you have to engage the audience and make them care about you if you want them to come back. How do you do that? You have to find people who are interested in your products and services and start a dialogue. What do they wish companies would do differently and why? You need to post to your Facebook account or Twitter page on a regular basis, and enlist several people to help you keep your page updated. You also need to look for ways to build relationships with your customers, clients or users in order to engage their attention and keep them coming back.

Third, treat your customers like the star of the show. Researchers mentioned online retailer Zappos as a great example. Zappos provides easy ways to comment on products and features a “fan of the week” with a picture and comment. By putting the focus on its users, the company makes it more likely people will return to its page.

Fourth, select the best social media site for your needs. Many find Twitter is more suited to

finding and following people who share your interests: other professionals in your career field, other small business owners trying to build a business or other people with similar goals or interests. As you take a few minutes to look at your Twitter feed several times a day, you will get a feel for the news, events, trends and buzz words in your community and profession. While LinkedIn is a great tool for job seekers, many do not see it as a site where there is much interaction. Furthermore, although Pinterest is the new kid on the block and many consider it a rival to the more established social media sites, it allows you to log on with either your Facebook or Twitter credentials, which saves you time logging into separate accounts.

Fifth, use the tools built-in to

Facebook. Called insights, they are available to the page administrator. You must have at least 30 users in order to use them; however, the data is valuable. You will get a series of charts and graphs showing information about visitors to your page with demographic information (age, gender, language spoken, etc.) that lets you see patterns in the traffic on your page.

Since not everyone uses Facebook it is easy to understand why many professionals have a presence on several social media sites. As noted, it is possible to configure Twitter or Tumblr (another micro-blogging site) so that a message posted on them can then appear on your Facebook page. One post appearing on several sites, frequented by different people, can help small

business owners have more of a presence online.

Finally, make sure that your company’s regular website plays well with social media. You should put some links to your regular website on your Facebook page, but be sure that they work and that the images and text picked up are ones that you want to be displayed.

Companies and organizations alike are discovering that having a Facebook page or Twitter feed takes time but brings people together. With more options for using mobile technology, more apps and widgets, and more connectivity between social media sites, smart companies will continue to explore ways to use them to connect with customers and the community alike.

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CEDAR VALLEY BUSINESS MONTHLY

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MAY 2012

Starting a business requires a plan for the end Statistically, 90 percent of all U.S. businesses, including one-third of the Fortune 500 companies, are either familyowned or familycontrolled. Only about 30 percent make it to the second generation and only half of those (15 percent) make it to Vicki Angove the third generation. One of the is senior vice leading reasons president and managing director is the lack of an of U.S. Bank orderly succesPrivate Client sion plan, “exit” Group in Waterloo. strategy or busiContact her at ness continua235-3282. tion plan.

Business owners all start with an idea and the dream of creating a successful business and earning a sustainable source of income. It takes all their time, energy and focus to create and hopefully grow the business. It’s no wonder they don’t focus on a succession plan. After all, “What does that have to do with owning and growing a business?”

Like it or not — planned or unplanned — all business owners will leave their business at some point. For many businesses the key to survival will be how well the now departed owner planned and prepared for that day.

In his book “The Seven Habits of Highly Effective People,” author Steven Covey says that we must “begin with the end in mind.”

Leon A. Danco used the following terminology to describe the stages of a business cycle: “Wonder, Blunder, Thunder and Plunder.”

In the “Wonder stage” entrepreneurs ask themselves — if they have time — “How did I get myself into this!”

The owner is working seven days a week, and the words freedom and power hardly enter their vocabulary. They are undercapitalized and overextended. They expend maxi-

mum energy just to keep creditors at bay. A large number of businesses do not survive this stage.

During the “Blunder stage”, the owner works 18-hour days and uses the knowledge derived from his/her work experience to hopefully build a successful business. This is the stage when the last of the “failures” drop out and the rest become profitable and begin to grow.

By the time he or she reaches the “Thunder stage” the owner has gained respect and usually has become a substantial member of the community. He or she enjoys success. Secrecy and a total lack of review of decisions are hallmarks of his or her management style. The creation of myths in the owners mind is commonplace at this stage in the cycle. These include the notion that the business is too unique for anyone else to run, the owner’s experience is all that counts, business practices need to stay the same and the owner can do whatever he/she wants with the business. He or she feels immortal.

It is during this stage that this entrepreneur begins to attract the collective attention of the community’s life underwriters and financial advisers. Coincidentally, it is also at this time that the entrepreneur really needs their services, but because of their self-sufficient management style, owners are distrustful of these advisers.

The dilemma could have been avoided had a relationship of trust and service been established earlier.

During the “Plunder stage” the owner tends to lose his/her appetite for risk, preferring instead just to keep what he/she has. If the business is to survive, the owner must learn to teach and share knowledge so as not to destroy what they’ve built. Such teaching and sharing often leads to and allows for a renaissance of wonder, the opportunity for a successor’s hard work to begin to bear fruit

and for a new business development cycle to begin. All too often the alternative is liquidation of the business.

Of course, the financial success of a business impacts the bottom line of a business owner’s personal financial health. The business owner needs proper construction and management of their personal investment portfolio, which includes their retirement plans.

According to the VIP Forum, nearly 40 percent of business owners do not have a wealth adviser even though they need specialized advisers who work with successful families with small businesses who can help manage their finances. This group might include your private banker, commercial lender, trust, investment and insurance

specialists as well as a CPA and attorney.

According to the Business Enterprise Institute Inc., here are some important questions every entrepreneur should ask — and then find trusted advisers to seek answers.

1. Who should control and eventually own the family business?

2. How do I provide for my family’s income needs, especially those of my spouse and dependent children, after my death or at disability?

3. How can I use my business to fuel the growth of my estate outside of my business interest?

4. How can I provide for an equitable distribution of my estate among my children?

5. How can I help preserve my

assets from the claims of creditors during my lifetime and at my death?

6. How can I minimize estate taxes?

7. What are my cash flow needs/desires in retirement?

Hopefully, a plan emerges as you go through alternatives to these questions. Your advisers can provide you with insight that will support your business to a successful ownership transition, whatever and whenever that happens. It is not a oneshot deal that makes your plan a success. It will be the ongoing efforts of the owner and his or her trusted advisers working as a team to accomplish the owner’s goals. It will be an everevolving plan that ultimately makes your dreams the reality that is your life.

MAY 2012

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PAGE 15

Locally owned companies offer exciting opportunities Manufacturing is a matter of scale. There probably isn’t a person in town that couldn’t tell you what the green and gold colors on the side of your neighbor’s lawn mower represent.

John Deere is one example of a global manufacturing enterprise in our commuBrittany nity. What many Jungck people do not is advanced realize, though, manufacturing is that the Cedar coordinator Valley is home at Hawkeye Community College to the highest concentration of in Waterloo. m a n u fa c t u re rs Contact her at (319) 296-4043 or in Iowa, many of Brittany.Jungck@ those companies HawkeyeCollege. locally owned edu. and family-run.

I have worked with over 100 local manufacturers — big and small. Ingenuity, creativity and strategic business practices are their keys to success. Many locally-owned companies are run by savvy, creative and conďŹ dent managers who know how to adapt to stay on top, turning proďŹ ts that would turn a lot of heads.

This mixture of exibility and traditional values is what has turned some family shops into leaders in their ďŹ elds, producing products our community and our world couldn’t live without.

One successful, family-owned manufacturing facility is Geater

Machining and Manufacturing in Independence. Specializing in machining and sheet metal fabrication for the aerospace and defense industries, Geater employs more than 150 people.

As it celebrates its 50th year in business, Geater is known by the Cedar Valley community to be a leader in innovation and efficiency, setting the standard for other companies in the area.

Another impressive, family-owned manufacturer is Power Engineering and Manufacturing in Waterloo. A custom operation specializing in heavy-duty gear boxes, PEM sets high standards for its products, and is known for its attention to detail. Locally owned since 1975, current President John Warren, oversees operations of the 110,000-squarefoot operation just off Airline Highway. Everyone at PEM is a valued employee, and the team dynamic is what sets this manufacturer apart.

So, although family-owned and “small� in comparison to some of the massive, global manufacturing operations based in our state, the Cedar Valley is home to hundreds of locally owned, skilled trade operations that fuel our economy. Take a look when you are driving past some of the buildings on your way to work, and notice their names when they advertise for employees. These companies may seem small, but their reputations tell tales of huge success. /UR 3ERVICES Commercial Printing Digital Printing Mailing Services Variable Data Printing Custom Publishing Flyers/Brochures Magazines/Catalogs Envelopes Trading Cards Posters Postcards Business Cards

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CEDAR VALLEY BUSINESS MONTHLY

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MAY 2012

Mining your organization’s hidden gold One of the more enduring memories of my childhood was the weekly introduction to “The Beverly Hillbillies” TV series.

“Then one day he was shooting for some food “And up through the ground came some bubbling crude. ” Rick Brimeyer I can still see is president of the puzzled look Brimeyer LLC, an independent on Jed Clampett’s management face as he begins consulting firm to comprehend his in Ames. Contact great fortune. him at “Oil that is, black (515) 450-8855. gold, Texas tea.”

Many organizations likewise are unknowingly sitting on a treasure trove — the data they generate each and every business day. Properly mining and analyzing this information can result in dramatic improvements in almost every area of your business. That includes dramatic increases in sales, better utilized advertising dollars, lower employee turnover or remarkable improvements in quality.

Online retailers such as Amazon are especially skilled at this, immediately suggesting other potential products to shoppers that have been appealing to others with similar purchasing hab-

its. The suggested products are not a wild guess on Amazon’s part, but are based on carefully studied sales data.

On the production side, a seemingly endless array of input factors may appear to impact the output quality of a complex process. When data on a finite number of key factors is captured and properly analyzed, however, the “magic” of the process can often be converted to science.

A reasonable analogy is a police detective trying to solve a crime.

Whereas there may be an almost infinite number of suspects, when quantifiable data such as a fingerprint is fed into a good database, a culprit can be quickly and accurately identified.

Unfortunately, mining business data isn’t as easy as Jed Clampett simply missing a critter with his rifle. Rather, utilizing data to improve your business is a strategic decision with expense and resource implications. Success requires a well-thought-out plan and careful execution.

■ What data will we collect?

(Amassing unused data is as silly as ignoring valuable data) ■ How will we consistently and cost-effectively capture it?

■ How will we keep our data current?

■ How will we keep our data secure?

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Fortunately, an array of software tools and technology solutions is available to fit any organization’s budget from a simple Excel spreadsheet to massive Enterprise Resource Planning systems.

A perfect database is perfectly useless without the skills to efficiently and correctly analyze the data so that accurate conclusions can be drawn. For example, it’s important to understand if an observed “improvement” between last month’s output and this month’s output following a controlled change to a suspected input parameter is truly an improvement because it resulted in a statistically significant change or is merely the product of random chance.

Here again, there are a range of

options available to match the size and needs of any organization. Smaller businesses may be fine with someone who knows Excel inside and out (including pivot tables), a good understanding of basic statistics provided with a software package like Minitab and a proven problemsolving process such as A3 or 8D. A large organization would do well to dedicate a small portion of its workforce — say 1 percent — as full-time, high-powered problem-solvers taking on the company’s toughest issues and using a more sophisticated tool such as Six Sigma.

While it is not necessary for senior managers to be experts in using the above tools, it is vital that they understand the theory behind their use and insist on

data-based decisions and statistically analyzed results from their troops. I once visited a boardroom with a plaque which stated, “In God we trust, everyone else better bring data.”

The evolution of technology to mine data to provide order and understanding to previously complex portions of business is as dramatic as the advancement of automation. Whereas the latter is more apt to elicit “oohs” and “aahs” during tours, the former is much more likely to offer a competitive advantage because it’s much more difficult to duplicate.

Today, if your organization isn’t effectively harvesting and analyzing its data to really understand what it does, you’re the equivalent of a corporate Clampett.

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CEDAR VALLEY BUSINESS MONTHLY

Planning and organizing keys to business success Small business owners wear many if not all hats in a business: ďŹ nance, marketing, IT, staff, etc.

This requires that we take care of the business (organizing and planning) and ourselves (health and wellness).

In order to organize finances, Jessica plan marketing, Crouch and manage techis a wellness nology, a small consultant in Waterloo. Contact business can turn her at (319) 504- to local resources 6689 or Jessica@ to help grow the OrganizeAnywhere. business. Both com. ďŹ nancial software packages and local consultants can help with everything from organization to management of business ďŹ nances. In the Cedar Valley, we have many resources to create and implement a marketing plan: writing for local papers and blogs, university business services, social media, vendor fairs. Writing this article on my computer reminds me of our dependence on technology. In addition to a back-up system, a small business can create a custom package with local

consultants to ďŹ ll knowledge gaps or just save time. Upfront time organizing and planning a business leaves more time to work on business instead of in business.

With so many jobs for a small number of people, a small business can beneďŹ t from a focus on health and wellness. According to the Blue Zones Power 9, people who live longer, healthier lives have these things in common: move naturally (exercise your way), know your purpose, down shift (unwind), 80 percent rule (stop eating when you feel 80 percent full), plant slant (eat more veggies), wine at 5 (fellowship), family ďŹ rst, belong and right tribe (choose your friends wisely). When you combine Power 9 with creating a healthier home, office and planet you have a formula for optimal health for you and therefore your business.

When we build our team around our weaknesses, we improve our chances for success. Would you like ideas for organizing some part of your business or incorporating health and wellness into your business or your schedule?

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CEDAR VALLEY BUSINESS MONTHLY

Every work team needs a synergist

By DIANE STAFFORD McClatchy Newspapers

Les McKeown has been providing management consulting services for about three decades, and no matter why he’s called in or what kind of problem he encounters, he’s seen some commonalities.

In most organizations, he ďŹ nds visionaries, processors and operators.

If he’s lucky — because his consulting work will be easier — he also ďŹ nds synergists.

You may not get his labels at ďŹ rst read, but I’ll bet you know the types. You’ve probably seen how they work (or don’t work) together. â– The visionary comes up with big ideas but isn’t good on the follow-through. â– The processor creates a system or steps to go through in order to carry out the ideas. â– The operator just wants to stop talking, stop planning and get busy.

The three types may have trouble working together because they simply don’t think or act alike.

But if there’s a synergist on the work team, there’s someone who can pull the team together.

Curious about your type?

McKeown shares his online quiz at www.predictablesuccess. com/synergist-quiz.

McKeown says he struggled with the synergy cliche before deciding that “synergist� simply was the right label for his management theory.

His deďŹ nition of a synergist is one who can put the good of the organization ahead of self and help disparate team members gel.

McKeown says there are some natural synergists, but most people have to work at developing the collaborative techniques.

Some of the world’s top business leaders have done it. “It’s really advanced common sense,� he said in an interview. “We all default to certain styles, but synergists transcend a single style, even if they’re naturally one type.�

The keys to building a strong team are to keep members “from hitting their extremes� and clashing and to help them use their strengths for the good of the organization.

A synergist, he says, “takes the greatness of everyone and puts them together.�

Diane Stafford is the workplace and careers columnist at The Kansas City Star. Her “Your Job� blog at economy. kansascity.com includes daily posts about job-related issues of wide interest. Readers may write to her at: Kansas City Star, 1729 Grand Blvd., Kansas City, Mo. 64108-1413, or by email at dstafford@kcstar.com.

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Building data: Is your business focused on loyalty?

No. 1 asset, your relationship as a giveaway, and get permission from the winners to share with your past customers? a display photo of them when Do you have the data? they pick up their prize. When In your business, is there data other customers see the exciton your customers? Do you have ing showcasing of winners, they a customer list or just familiar are encouraged to join, or if they faces? In some businesses trans- have already joined it reinforces actions are fast and frequent but their decision to be loyal to your light on customer data. These business. businesses must consider a way to start collecting data. Do you Email is key offer an incentive or rewards Some businesses don’t consisprogram? If not, start one. You tently use email. That may not be can start a monthly drawing that wise if you want to connect with gives you a start at a database. your consumers, because over Put out a fishbowl to drop busi- 90 percent of people online use ness cards in, or a nicely pre- email, 65 percent of them on a sented box with a professional daily basis. How many opportuform to fill out for a chance to win nities are you missing? a monthly prize. Automatically enter each customer once and Cost factors determine what repeat customThe customer retention vs. ers can get as an ongoing reward. acquisition cost is generally refKeep in mind, repeat customers erenced as “it takes eight to 10 don’t need it cheap. Just express times the amount of money to value, and don’t advertise the acquire a new customer than it same offer publicly. does to retain a past customer” You can start with a spread- This is observed in most adverCreatures of habit unite sheet if you don’t have a con- tising budgets as the focus of Ask yourself: Are you a creature tact management tool or other spending has traditionally been of habit? Do you drink the same way to aggregate your customer going to acquisition opportunidrink, eat the same food, shop data. Pick a valuable premium ties. It varies heavily on the prodthe same stores or buy the same brand of products consistently?

Of course. It is human nature to repeat what is familiar, comfortable and convenient. As a business owner or operator you’ve Electrical spent countless hours building Lighting your business, but have you considered how to best leverage your Most people who have started a business from scratch know what it is like to generate creative ways to attract new customers. Most entrepreneurs got their start doing just that. Others focused almost exclusively on creating a master brand that proCurtis motes the ultimate DeGroote in consumer conis director of fidence, attracting research and development and even the toughest marketing with critics or doubtDriving Loyalty, a ing consumers. consulting firm Few have consisin Cedar Falls. tently leveraged Contact him at that secret and 553-1111 effective or cdegroote@ most drivingloyalty.com. way to impact margins and sellthrough rates from advertising that is found in a repeat purchase from an existing customer.

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MAY 2012

Philanthropy a great idea for small businesses, too Most large corporations have programs for corporate philanthropy and community involvement, and it is a great idea for small businesses, too. In fact, small business owners have some advantages for Ali Parrish establishing a is director of successful corpodevelopment at the Community rate philanthropy program. Small Foundation of Northeast Iowa. businesses have The foundation the benefit of a manages over $58 local presence in million in assets their communiand administers ties and work hard more than 850 charitable funds. to build steadContact hear at fast relationships aparrish@cfneia. with local cusorg or 287-9106. tomers. As a small business owner, you can ask for your customers’ input about your philanthropic efforts and get involved with causes that are important to the customers you serve and the community.

In addition, when you involve your customers in philanthropy and support local causes they care about, you gain important visibility for your business. Your customers can see your charitable efforts — and the people you are helping — firsthand.

The strategies for creating a superior corporate philanthropy plan for a small business aren’t largely different than those for a large corporation. Here are several ways small businesses can get involved in corporate giving: ■ Be selective and realistic. As a small business, you can’t commit to every opportunity, sponsorship, event and campaign drive that comes your way. It’s a good idea to be selective and realistic. Focusing on too many different causes can spread you too thin. Consider your location, mission and what you have to offer the community. And don’t forget to think about your customers and supporting the causes they care about most.

■ Stay local. There are a vast

amount of causes your business can support — globally, nationally and locally. However, as a small business, staying with community-based issues and efforts is important to ensure the community in which you have invested your time, energy and money is healthy, safe and vibrant. It gives you a better opportunity to raise your profile and make a positive impression in the community as well.

■ Involve your employees.

Many companies create committees to make decisions about contributions or company volunteer activities. Everyone in your business is your ambassador, and owners should encourage employees to get involved on some level with the cause or philanthropic efforts. Giving back starts at the top, but everyone in the company should be involved.

■ Consider volunteerism.

Allowing employees to volunteer in the community can be a win-win-win for your business.

The nonprofit organizations win by getting the extra hands they need. The employees win by being able to spend time volun-

teering and giving back to their community without needing to take time away from their families or squeeze it into their busy schedules. Finally, the small business wins with increased employee morale and higher retention rates.

■ Build for the future. One way to ensure the permanence of your corporate philanthropic presence in the community is by establishing an endowed corporate advised fund or scholarship fund at the Community Foundation of Northeast Iowa. Through these funds, you can be assured that the community will be supported by your business forever.

■ Tell your stories. Let your customers and the community know about your charitable efforts. Not only does it help your business, it also spreads the word about the causes of your selected charities.

■ Celebrate with your team.

Take time to celebrate your charitable efforts with your staff as everyone has worked hard to make a difference in the community.

■ Have a plan. Once you have

determined the type and structure for your corporate philanthropy put your plan in writing and make it accessible to everyone in the company to see and

review on a regular basis.

Large or small, it’s a great idea for all businesses to give back to their local community and support causes that need help.

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MAY 2012

CEDAR VALLEY BUSINESS MONTHLY

PAGE 21

THE COURIER

Pets at work can reduce stress Los Angeles Times

LOS ANGELES — If your office seems like it’s going to the dogs, try bringing your dogs to the office.

Researchers reported in April that bringing Rover to work seems to reduce stress on the job.

“Pet presence potentially can be a low-cost wellness intervention,” said Randolph Barker, a professor of management at Virginia Commonwealth University’s business school in Richmond, Va., who led the study in the International Journal of Workplace Health Management.

Barker and his team conducted their study at Replacements Ltd., which sells china, stoneware, crystal and other dinnerware. The company’s 550 or so employees bring about 20 to 30 dogs with them to the Greensboro, N.C., office each day. Replacements has allowed pets in the office for more than 15 years.

The VCU researchers divided 76 employees into three groups: those who brought dogs to work, those who owned dogs but left them home and those who didn’t have pets. For one week, the scientists measured levels of the

stress hormone cortisol in the workers’ saliva and used surveys to gauge their stress levels four times during a workday.

There was no significant difference in cortisol levels among the study participants. But by the end of the day, the average stress level scores fell about 11 percent among people who had brought their dogs to work, while they rose as much as 70 percent for members of the other groups.

The researchers also observed “unique dog-related communication” in the workplace, Barker said. During the day, people who hadn’t brought pets walked over to colleagues who had and asked whether they could take the fourlegged visitors for walks.

Meredith Wells-Lepley, a research associate at the Institute for Workplace Innovation at the University of Kentucky in Lexington, said the study helps quantify the stress-reducing value of pets to the office.

Her own work showed that cats also had a stress-relieving effect — and that, for the most part, people responded positively to all breeds of either animal.

“Short-haired black cats were the exception,” she said.

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CEDAR VALLEY BUSINESS MONTHLY

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MAY 2012

New law lets small businesses use crowdfunding The Associated Press

Finding investors is probably the biggest challenge business startups and small companies face. But small businesses are looking forward to a new way of attracting investors now that President Barack Obama has signed a law known as the JOBS Act. The law, Jumpstart Our Business Startups, eases requirements small companies must meet to raise money. One of the most intriguing parts for many businesses is crowdfunding.

The new rules make it legal for companies to solicit money from millions of investors without having to go through the lengthy process of filing registration documents with the Securities and Exchange Commission. The law streamlines the paperwork that companies must complete.

Obama signed the bill into law last week.

“It will make it easier for small businesses to attract investors, to gain access to capital, to become the next big thing,” said Tom Quaadman, a vice president of

the U.S. Chamber of Commerce.

Small businesses probably won’t be able to start seeking investors until at least the end of this year, said David Scileppi, an attorney with the Gunster Law Firm in Fort Lauderdale, Fla., which specializes in business law. That’s because the SEC must put together rules to govern how crowdfunding will work within nine months of its becoming law.

What is crowdfunding?

Crowdfunding is a method of raising money from a large number of people, and it’s generally done online. Charities have been using it for years — the Internet and social networking sites such as Facebook have made it possible for them to reach millions of donors.

Using crowdfunding to find investors has been illegal in the U.S. under laws to protect the public from scams.

Profounder, a website that did aim to bring together entrepreneurs and investors, shut down earlier this year before the JOBS Act was passed. It cited “the current regulatory environment.”

Under the JOBS Act The JOBS Act allows companies to raise up to $1 million a year from individual investors. It aims to protect investors by limiting how much they can kick in.

For example, people who have an annual income or net worth under $100,000 can invest no more than $2,000 in a company that’s using crowdfunding.

Under the law, investors and companies will be brought together by a middleman, either a broker or an Internet website.

The brokers and websites will have to register with the SEC. Companies seeking funding must provide financial records, business plans and other information to potential investors .

Some small business lending experts expect financial companies, such as banks, will act as brokers. While many are reluctant to lend to startups, they may

be interested in making money matching companies with investors.

The law is specific about the need to protect investors. Lawmakers were well aware people who have never before invested in a startup will want to try their luck under crowdfunding.

So brokers and websites will be required to ensure that investors understand that they’re risking the loss of their entire investment should a business fail.

Drawbacks Getting investors means companies will have to take on new responsibilities that may be time-consuming. Shareholders may have questions, concerns, complaints — especially those who aren’t sophisticated about buying stock in a young company that may not be able to show a profit or pay dividends.

“All of a sudden, you have 500 people who you don’t know who you now have to answer to,” Scileppi said. So an entrepreneur may need to hire someone to be a liaison for investors Tom Murphy, an attorney in Chicago with McDermott Will & Emery, another business law firm, said companies might find they don’t have as much freedom as they did before taking on investors.

Having shareholders means businesses will need to comply with state laws that govern companies with shareholders, Murphy noted. That means preparing regular reports on how the company is doing that include information such as revenue, expenses and profit or losses.

Companies also are revealing plans and finances to potentially millions of people. They could risk having their ideas stolen.

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MAY 2012

CEDAR VALLEY BUSINESS MONTHLY

THE COURIER

PAGE 23

Manufacturers struggle to preserve ‘shop math’ skills The Philadelphia Inquirer

PHILADELPHIA — Harold’s fork truck is rated for 4,000 pounds.

He has to move and stack 10 skids (pallets) of paper, each weighing 1,500 pounds. What is the maximum number of skids he can lift at one time?

If someone wants a job at Case Paper Co., that person had better know how to calculate the answer. Even more basic: Can the person use a tape measure?

“You’d be amazed at how many people can’t read a ruler to onesixteenth of an inch,” said Lee Cohn of Case Paper. Case converts huge paper rolls into cardboard boxes, pharmaceutical packaging, even lottery tickets.

Gather a bunch of manufacturers like Cohn in a room, and it won’t take them long to start complaining about their inability to find workers adequately skilled in “shop math,” which can include trigonometry and calculus among other types of mathematics.

For years, shop-math skills weren’t really an issue because manufacturing, as a sector of the

economy, was a perennial jobshedder. But since early 2010, manufacturers have been hiring — not enough to replace the nearly 8 million jobs lost since the late 1970s, but enough to get policymakers worried about workforce capability.

“We want to get people back to work, and there’s a supply of bodies,” said Anthony Girifalco, a vice president of Delaware Valley Industrial Resource Center, a quasi-public group that assists manufacturers. “There’s demand in the manufacturing sector. But how do you close the skills gap?”

Decades of job loss mean that the surviving workers, who are also the most skilled, are nearing retirement age. The pipeline to replace those workers — machinists, tool makers, and others — is woefully inadequate, especially when finding novice workers capable of the simplest calculations is a problem.

Experts in manufacturing and workforce development say it’s easy to blame schools, but that they’re only part of the problem.

The work itself has changed.

These days, manufacturing is

complex — and so is the mathematics involved.

At K’nex Industries Inc., for example — the Hatfield, Pa., manufacturer of the popular construction toy — robotics is increasingly being used on the factory floor, Chief Financial Officer Robert Haines said. That means there are fewer low-level jobs, but there is a demand for highly skilled workers who can program and repair the robots.

“It used to be if you worked fine with your hands, you could make it. You could have a job,” said Michael A. Lucas, director of a vocational high school not far from the K’nex plant.

“Now, if you cannot do a B average in math, you cannot obtain that job, because the academic and technical skills must go hand-in-hand.”

Meanwhile, students most able to handle higher techni-

cal demands are choosing college over technical training for manufacturing.

Glenn Artman, a professor of science, engineering and technology at Delaware County Community College near Philadelphia, has spent 28 years teaching shop math, computer-aided drawing, blueprint reading, and other manufacturing skills.

To him, “shop math” is a misnomer. It’s simply the applied mathematics needed on a job, whatever the job is: A cook needs ratios to convert a recipe that feeds four to one that feeds 40.

An auto mechanic needs to calculate cubic-inch displacement to check engine performance. A building-trades worker hanging drywall needs to be able to measure the distance between studs.

Old-timers on the job take their math skills for granted. “It’s so mundane to the people that do it

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every day,” Artman said. But it’s easy to get rusty, he added: “If you don’t use it, you lose it.”

Relevance is an issue, he said.

With the speed of technological change, even instructors with industrial backgrounds have to struggle to stay current.

At the North Montco Technical Career Center, curriculum developer Bob Lacivita has created guides that translate regular high-school mathematics concepts to “shop math.” There are different guides for auto mechanics, cooks and welders.

“The technical program serves as the catalyst for kids to understand math. It’s the motivator,” Lucas said. “We’ve had kids who have had difficult times with algebra and math in the high school setting, but as soon as they make the connection here, they start to do the mathematics, because it is relevant.”

PAGE 24

THE COURIER

CEDAR VALLEY BUSINESS MONTHLY

cvbusinessmonthly.com

MAY 2012

Department of Labor steps up enforcement of overtime rules The Dallas Morning News

DALLAS — In January, 252 workers employed through a Dallasbased temporary service won $244,000 in overtime back wages owed because they had been misclassiďŹ ed as exempt from U.S. wage and hour laws.

Temp Team Inc. workers had been placed at Nieman Printing and elsewhere, and some had worked as much as 79 hours a week without overtime pay, according to the U.S. Department of Labor. Who was responsible for the misclassiďŹ cations is a matter of an ongoing legal dispute between Temp Team and Nieman Printing.

That back pay award came only a few weeks after 280 juvenile detention workers in Granbury and Rockdale, Texas, got $159,000 for unpaid overtime.

Their employer, 4M Youth Services, had required attendance at pre-shift safety meetings but did not pay the officers for that time.

In the years since high-proďŹ le lawsuits against Wal-Mart , Target and other retailers, a wave of unpaid overtime enforcement actions and lawsuits has cut a wide swath across a variety of industries, including technology and banking companies. Less than a year ago, AT&T paid $12.5 million to settle a lawsuit brought by a group of information technology workers; in recent years, IBM settled a case involving 32,000 employees for $65 million and game maker Electronic Arts settled a suit for $14.9 million.

As the economy tumbled, the number of Fair Wage cases investigated by the Labor Department has boomed. Labor investigated a record number of wage and hour cases in 2011, most of which are for unpaid overtime.

It’s not just the federal agency, either. More workers are suing their current or former employers for back wages, too. In U.S. federal courts in Texas, the number of cases ďŹ led for unpaid overtime went from 291 in 2007 to 617 in 2011, according to an analysis by Androvett Legal Media & Marketing and the law ďŹ rm of

Overtime abuse issues at a glance Generally, nonexempt workers who work more than 40 hours during a workweek are entitled to time and a half of their regular hourly wages for the overtime.

There are two general types of overtime abuse: â– MISCLASSIFICATIONS: This happens when employers incorrectly classify employees as exempt. These are the general rules governing classiďŹ cation: Generally supervisory, management and some administrative jobs are not considered hourly and are exempt from wage and hour laws.

Designating workers who don’t supervise other employees and don’t have authority over work schedules as managers is probably a violation.

There are exceptions to the wage

Lee and Braziel.

Several theories have been put forth for the increases: a bad economy pushing companies to cut corners on their labor costs; signiďŹ cantly increased funding and enforcement at the Labor Department; changes in state tort laws that have made medical malpractice less lucrative for plaintiffs’ attorneys while over-

and hour laws for workers such as outside salespeople who can set their own hours.

Contract workers are not necessarily exempt. â– CLOCK ISSUES: These occur when employers have workers perform job duties off the clock, such as: Docking an hour for lunch when workers take less time or work while they eat at their desk or workstation.

Requiring workers to don extra equipment, such as clean suits for workers at a microchip factory, without paying for that time.

Asking workers to work or run errands when they are not on the clock.

Not compensating properly for travel time.

time cases have ballooned; and a complicated set of laws and workplace circumstances that may make it difficult for employers to understand the rules.

The various explanations have a common touch point, many involved in the cases say. “Technically, somewhere between 60 to 80 percent of all employers in the United States

are not in compliance with the Fair Labor Standards Act,â€? said Mike Royal, a lawyer who represents employers in such cases at the Dallas law ďŹ rm of Fisher & Phillips. “The law is convoluted and complicated, and they [employers] are just busy and don’t understand it. “If you are doing what you should be doing to avoid these problems, to understand the law and train your managers, you don’t have the problem. Most of this is a training issue.â€?

Another perspective is that the Fair Labor Standards Act, passed in 1938, was built for a workplace that no longer exists. Gone

are clear lines between manager, hourly employee, administrative worker and the outside salesperson, designations that help deďŹ ne whether a worker is exempt from the wage and hour protections.

Instead, today’s workers are more likely to work exible hours, to telecommute, to be attached by electronic device to their office responsibilities wherever they happen to be — and at whatever time they may be needed.

In today’s economy, they are also more likely to be placed by a temp agency or working as an independent contractor.

See OVERTIME, page 29

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WWW.CEDARVALLEYALLIANCE.COM

MAY 2012

WWW.GREATERCEDARVALLEYCHAMBER.COM

Annual Celebration 2012

Co-hosts Ron Steel of KWWL TV 7 and Jim Waterbury of Allen Heath Systems with Bette Wubbena

Jean M. Trainor receives the FulƤlling the Vision of One Award from Dave Braton of Courier Communications award sponsor.

Courier Communications was the receipient of the John Deere Treating Capital Well Award

Hugh Field, Chair Greater Cedar Valley Alliance & Chamber Board of Directors Beecher Law FIrm

Cedar Valley Partner Award winner Mark Witmer of Northstar Community Services with Saul Shapiro of Wartburg College award sponsor.

Harold Brock Innovation award was presented to T8 Webwar. Pictured is Wade Arnold with Bryan Burton of ACES award sponsor.

Kris Hansen of Western Home Communities accepts the Business of the Year Award sponsored by Community National Bank

Accepting the Legacy Award on behalf of his father Louis Beecher and his family is Micheal Beecher. Award sponsored by Pedersen, Dowie, Clabby & McCausland (PDCM) Insurance.

Kim Fettkether, Chair Greater Cedar Valley Chamber Council, Veridian Credit Union

PAGE 25

WWW.CEDARVALLEYALLIANCE.COM

WWW.GREATERCEDARVALLEYCHAMBER.COM

MAY 2012

Business After Hours Thursday, May 10, 2012 4:30-6:30 pm Grout Museum of History & Science/ Sullivan Brothers Iowa Veterans Museum, Waterloo

Premier Sponsor:

Directions: Enter at the Park Avenue entrance, Parking is at the corner of Park & Washington Streets.

Business After Hours oơers networking in a fun and rela ed atmosphere. Join other Cedar Valley businesses for this after-work social.

RSVP by May 3 by calling (319)232-1156 or emailing bwubbena@cedarvalleyalliance.com Gold Sponsors:

PAGE 26

MARK YOUR CALENDAR for the Golf Classic!

August 21, 2012 Gates Park Golf Course, Waterloo

2 Shotgun Starts 7:30 a.m. / 1:00 p.m.

4 Person Best Shot Continental Breakfast Networking Lunch 19th Hole Social To make your reservation, please call the Alliance & Chamber office at 232-1156 or contact Bette or Kim at: bwubbena@cedarvalleyalliance.com kschleisman@cedarvalleyalliance.com

Good Morning Cedar Valley Thursday, June 14, 2012 7:30 -9:00 am National Cattle Congress Pavilion Waterloo

Premier Sponsor:

Good Morning Cedar Valley is a quarterly networking breakfast, educating Alliance and Chamber investors on current events. The brief program includes the Cedar Valley Mayors and a Black Hawk County Board of Supervisors representative. Updates are also given by other community business leaders.

Thank you for your investment in The Cedar Valley!

Allstate Insurance-Scott Parsons Eagle View Printers LC Elite Chiropractic & Wellness Hospice Compassus

Each breakfast attracts more than 125 member investors from across the Cedar Valley.

Lee Miller

Breakfast is served. There is no cost to attend.

RSVP by June 7 by calling (319)232-1156 or emailing bwubbena@cedarvalleyalliance.com

Oakridge Realtors

Nelson Properties Parkview Nursing & Rehab Center Taco John’s Restaurant

WWW.CEDARVALLEYALLIANCE.COM

MAY 2012

WWW.GREATERCEDARVALLEYCHAMBER.COM

PAGE 27

Business Education Series Thursday, May 10, 2012 7:30-9:00 am Western Home Communities, Windridge Retirement Center 5311 Hyacinth Drive, Cedar Falls Cost: $20/person RSVP by May 3 to (319) 232-1156 or email bwubbena@cedarvalleyalliance.com Tony DiCecco of the Tony D Connection, and former UNI women’s basketball coach, will teach you how to improve yourself and your business through a positive attitude, work ethic and passion. *Possible road construction on South Main at time of event.

To learn more about Tony, check out his website at: www.thetonydconnection.com Gold Sponsor: Premier Sponsor:

Greater Website to Launch Greater graphics, greater functions and greater ƪe ibility are what you will Ƥnd on the new reater Cedar Valley lliance Ƭ Chamber website launching this month. This site brings all the e isting sites to one uniƤed site. Viewers can uickly Ƥnd member investor information, RSVP for events, and Cedar Valley business statistics with the new user friendly design. The content management system allows our staơ greater access and ƪe ibility to make timely updates as well as upload photos, graphics and videos.

The new site also takes advantage of analytic tools to track performance of content and advertising helping sponsors measure the return on their investment.

Current URLs will automatically redirect when the new site launches this month, May 2012. This website upgrade demonstrates our commitment to continually improve our services and communications with member investors.

The Greater Cedar Valley Alliance & Chamber is an association of businesses, institutions and local governments working to increase wealth and economic vitality through collaborative economic and community development. The work of the Alliance & Chamber is focused on developing and strengthening a technology and innovation based regional economy through Regional Economic Growth, Increasing Competitiveness, Effective Advocacy, and Strengthening the Cedar Valley Brand. Watch this space for routine updates on initiatives and results of the Alliance & Chamber.

WWW.CEDARVALLEYALLIANCE.COM

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Interactive Flow Studies Corporation Contact: Murat Okcay 3704 Pheasant Ln. Waterloo, 50701 Phone: (612) 810-2727 Website: .interacti eƪo s.co Category: Printer/Publisher/Graphics

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Mediacom Business Contact: John Houston, Aggie Lammers 4010 Ale ander r. Waterloo, 50702 Phone: (319) 232-8800 Website: www.mediacomcc.com Category: Media Communications

͕Ǧ͔͜​͔ƪ Ȁ 1st & Franklin, Cedar Falls, 50613 Contact: Brenda Crawford Phone: (319) 277-5800 Website: www.ƪoweramacedarvalley.com Category: Florists-Retail

Sernett & Associates Contact: Scott Sernett 1025 Technology Pkwy. Suite B Cedar Falls, 50613 Phone: (319) 235-3356 Website: www.scottsernett.com Category: Insurance Agencies

CenturyLink Contact: James Chambers 925 High Street, Des Moines 50309 Phone: (800) 244-111 Website: www.centurylink.com Category: Telecommunications

Waterloo Schools Foundation Contact: Carrie Rankin P.O. Bo 1896 Phone: (319) 939-9550 Website: www.wcsfoundation.org Category: Associations/Organizations

SAVE THE DATES

PAGE 28

WWW.GREATERCEDARVALLEYCHAMBER.COM

MAY 2012

SAVE THE DATES

Ribbon Cuttings

American Airlines Inaugural Flight, Waterloo Airport

Family & Children’s Council 500 E. 4th St., Waterloo

SAVE THE DATES

Tuesday, August 21 Golf Classic All Day Gates Golf Course

Thursday, September 6 Wing Ding & Things Overman Park 5:00 - 8:00pm

Thursday, September 20 Good Morning Cedar Valley 7:30 - 9:00 am Clarion Inn University Plaza

Thursday, October 25 Power Networking 4:00 - 5:30 pm Kaplan University

Thursday, November 29 Business After Hours 4:30 - 6:30 pm Petersen & Tietz Florists

Thursday, December 6 Good Morning Cedar Valley 7:30 - 9:00 am NewAldaya Lifescapes

Simply I Do 3205 Hudson Rd., Cedar Falls

If you would like to join the Greater Cedar Valley Alliance & Chamber please call Bette at 319-232-1156

MAY 2012

cvbusinessmonthly.com

CEDAR VALLEY BUSINESS MONTHLY

THE COURIER

PAGE 29

Small business contracting leads House committee agenda Graves talked with The Associated Press recently about small business issues including contracting, and about his experiences as a small business owner.

WASHINGTON (AP) — It sounds like a gold mine for small businesses: The more than half a trillion dollars that the federal government pays companies each year for all kinds of equipment and services. But winning a contract with the government can be hard, if not impossible, for a small business.

Contracting has been a priority for the House Small Business Committee this year. The committee, led by chairman Sam Graves, R-Mo., has recently approved eight bills that are aimed at making it easier for small businesses to win contracts with the agencies throughout the federal government. Several of the bills address what’s known as bundling, the process in which a number of small contracts are combined into one that is awarded to a large company. That company is supposed to subcontract to smaller companies. But critics say small businesses don’t get as

many contracts as they should due to burdensome paperwork, favoritism and fraud.

Another bill would raise the percentage of government contracts that small businesses must get to 25 percent from 23 percent. The Office of Management and Budget says the government spent approximately $535 billion on contracts in the fiscal year that ended last Sept. 30.

Graves is a six-term congressman who grew up on a family farm in northwest Missouri. He got small business experience operating the farm before running for the Missouri Legislature in 1992.

Graves says small businesses are holding back on expanding and adding jobs because they’re uncertain about what their taxes will be in the next few years. Also, it’s unclear what regulations are likely to come out of government agencies like the Environmental Protection Agency and the Department of Labor.

which is conducive to small business. And that is, those things small businesses are worried about, the uncertainty of some of these things, so they’re not expanding, they’re not moving forward (because of) Q. If a small business owner were to ask you, what can you do things like tax reform, regulatory to help me, what would you say? reform, the health care debate and the costs associated with it, energy and the costs associA. Directly, what we’re trying ated with it. And they’re holding to do is to help small businesses back. And so indirectly, we’re be able to access those government contracts. Right now, it can looking into a lot of those things and trying to have an impact be tough, particularly when it comes to contract bundling. The there also. federal government is notorious for wanting to do as little as Q. How can you help with issues work as possible. So they bundle your committee doesn’t control, up a lot of these contracts into like health care? as big a contract as they can get.

And a lot of small businesses just A. We can still hold hearings simply can’t compete and can’t on it. We want to know how it’s pursue that and it just really affecting small business, what becomes a large business thing. impact it’s having on small busiIndirectly, on the other hand, ness because we are advocating we’re doing everything we can for small business. And we take do to create an environment the information and pass it on to

OVERTIME

The Fair Labor Standards Act was a child of its time. Enacted in 1938 as the country struggled to emerge from the Great Depression, it was a seminal act of workplace rules. It established the eight-hour workday and the 40-hour workweek.

Congress also said that hourly workers who toiled beyond the 40-hour workweek should be paid time and a half.

But it made exceptions to that rule. Managers who supervised workers were declared exempt.

Their work was less physical, and they were better compensated and usually paid for time off as well. Administrative workers were exempt as well. And outside salespeople, who set their own hours and were paid largely on commission, were not covered either.

Employers were required to keep records. Hence the birth of the time clock.

In the past decade, as more cases emerged, it became clear that there were two kinds of overtime violations typically committed.

One is the “off the clock” violation. This one has hit manufacturing companies, poultry processors and the juvenile justice workers mentioned above. It happens when workers are asked to perform duties before clocking in or after clocking out. Or if they are asked to work through their lunch hour.

Another typical mistake occurs when workers are required to don special clothing to perform their jobs and the company doesn’t account for that time. Pilgrim’s Pride was hit because workers had to put on protective clothing before clocking in. Similarly, the juvenile justice officers had to attend a safety meeting before clocking in.

That is fairly straightforward, and employers should know the rules, said Derek Braziel of Lee and Braziel. The firm specializes in overtime cases.

“If someone is on the employer’s premises, under the employer’s control, using the employer’s tools, they are working for that employer and should be paid,” Braziel said.

From page 24 “There’s no doubt that people still need to be paid the time they have been working,” said Steve Fox, a workplace lawyer who represents employers at the Dallas firm of Fish and Richardson.

“What has become more challenging is keeping up with the number of hours that people work because they so often work remotely, and the exemptions that were adopted by Congress and the Department of Labor have not kept up with the realities of the workplace,” Fox said.

The reality is that the most vulnerable workers are often the ones affected, said Barry Hersh, a Dallas lawyer who represents both employers and workers.

“The people who are being hurt are the ones that can least afford it,” Hersh said. “They are often low-skilled, don’t know their rights, likely to be an immigrant or don’t have the language skills to complain.”

The other type of case is more complicated. That is the classification infraction.

Many banks have been hit for classifying loan officers as exempt, using the administrative exception. Compass Bank was sued by loan officers in Texas just last month. The Department of Labor has determined that the workers spend the preponderance of their time selling loan products, not on administrative duties.

“If there is not a black-andwhite rule, then the employer is very hard-pressed to know what the outcome is going to be when it’s all said and done,” Fox said.

AT&T is facing lawsuits by former Bell South field managers who say they were paid overtime for more than 40 hours in previous years, but that AT&T ended the practice when it bought the company. The workers say they are managers in name only, that they don’t supervise the work of others or have control of prioritizing their workload. The size of the

the committee with jurisdiction.

We act in many cases as a blocker or flanker for a committee — we can look into more detail, and a larger committee with jurisdiction may not be able to.

Q. Of the eight contracting bills the committee has approved, which do you think are the most important?

A. The biggest one would be the no-bundling provisions, or putting teeth in the rules against the federal government bundling contracts. The next one would probably be increasing the percentage of small business contracts out there from 23 to 25 percent. The federal government literally purchases hundreds of billions of dollars’ worth of goods and services every year.

And so it’s massive, that’s direct help right there.

See HOUSE, page 30 case could approach $1 billion, lawyers for the plaintiffs say.

Like most companies, AT&T wouldn’t talk about its case or its practices.

“AT&T is committed to full compliance with all federal and state laws, including the wage and hour laws, and has received numerous awards for being an employer of choice,” AT&T spokesman Marty Richter said last month. He also cited a recent case that went to a jury and for which the company received a favorable verdict.

AT&T last year settled another case for about $12.5 million in its classification of information technology workers.

The Department of Labor has increased its number of investigators to audit companies in industries that are historically prone to problems: restaurants, hotels, janitorial services and home health services.

Nationally, the number of investigators has grown to almost 1,000, up from 600 just a few years ago, according to Labor officials.

PAGE 30

HOUSE From page 29 Q. When do you think the full House will consider the bills?

A. I’m hoping in the next couple of months.

Q. What else is on your agenda for this year?

A. We’re going to be looking at regulatory reform and some of the completely off-the-wall regulations this administration is putting out there when it comes to EPA (Environmental Protection Agency), the Department of Labor, the Department of Energy.

Q. Can you give an example?

A. The Department of Labor is proposing a change in child labor laws when it comes to children working on their family farms.

They’re trying to throw out decades-old laws. The secretary of labor says we’re robbing our children of their youth. I would argue that many kids need to be working on the farm. It teaches them responsibility. It teaches them work ethic and everything

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else. That’s just one perfect my own. That was the biggest example. Another is the EPA idea satisfaction. that they’re going to regulate dust as a particulant. In the rural Q. And your biggest frustration? areas, dust is just a fact of life.

If you regulate it as a pollutant, A. We do a wonderful job of that’s ridiculous. producing food for the world.

cvbusinessmonthly.com

But we do a poor job of explaining why it’s so important and why every person out there should be interested in food policy. That’s always been a huge frustration. Uncertainty and taxes have always been a frus-

MAY 2012 tration, and it is for every small business owner. They don’t know what the tax code’s going to look like at the end of this year.

And with these extensions (of the payroll tax cut), we’re not giving any certainty to folks.

Q. What made you interested in serving on the Small Business Committee?

A. The Small Business Committee touches everyone’s life.

There are so many small businesses out there, everything from the restaurant to the mom and pop store downtown to the self-employed truck driver to the farmer. You name, it, it’s all small business.

Q. You grew up on a a family farm. What was your biggest satisfaction in doing that work?

A. The biggest satisfaction in running a small business was being able to accomplish it.

Before I could be part of the family operation, my dad wanted me to go out and be on my own. So I had to borrow money to purchase equipment, borrow money to get my operating costs, borrow money eventually to buy land.

And to successfully do that on

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“We are hoping that technical and business partners will come and take a look at the great potential Iowa State research innovations have to offer in creating new Iowa companies or growing existing businesses,” Lisa Lorenzen, executive director of the ISU Research Foundation, said in a news release.

“We’re focused on increasing and speeding the commercial development of university discoveries and technologies to benefit Iowa’s economy and create jobs.”

More information about the event and the technologies, as well as registration, are available at iowainnovationcorporation. com/events.cfm.

PAGE 31

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The two groups are promoting and developing Iowa State’s green innovations with commercial potential as part of a federal i6 Green project to expand innovation in the areas of renewable energy, energy efficiency or green technology in the state. A federal i6 Green award in 2011 launched the effort.

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