Cedar Valley Business Monthly - December 2013 by Waterloo-Cedar Falls Courier

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Cedar Valley Business monthly

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FROM THE EDITOR

Businesses pushed forward in 2013 It’s always tough to look back on a year, especially when you don’t know which way to look. The year 2013 is a case in point: It was a year of political wrangling in Washington, D.C., and some agreement in Des Moines. It was a year businesses braced for major changes health care reform would foist on the employer-employee dynamic. It also was another year Jim Offner of relative robust is the Courier business health business statewide. John editor. Contact Deere recorded him at more billion-doljim.offner@ lar quarters, and wcfcourier. the Cedar Valley com. and Iowa solidified their claims on some of the lowest unemployment rates in the nation. Elliott Smith, executive director of the Iowa Business Council,

e to the career t. Shelby did.

described the situation with as much clarity as anyone when he said that Iowa gets it right when the country doesn’t get it at all. Not that Iowa and the Cedar Valley don’t have their challenges. The unemployment rate remained below 5 percent through most of the year — the best yearlong performance since the 2008-09 fiscal crisis gripped the country. But joblessness prior to the Wall Street fiasco of five years ago was closer to 3 percent across Iowa. There is room to improve. Government “shutdowns” or threats thereof dominated the headlines a couple of times during 2013. Entrepreneurs often say the most important aspect of government is stability in setting long-term policy. What the policies are is secondary; businesses just need to be able to set up their long-term business plans. The October political showdown over the federal budget provided a case in point. “There was a long lead-up to it.

A lot of businesses don’t know where it’s coming from, where the federal budget is, what’s the cost and where it’s going to go,” said Steve Brustkern, chief executive officer of Black Hawk Economic Development Inc. in Waterloo. “We could use more leadership out of Washington.” After Congress and the president set up another inevitable showdown a few months down the road, businesses still don’t know how to plan, Brustkern said. “There are just a lot of uncertainties,” he said. “People would look for consensus and stability.” Even the weather played havoc in 2013, with a wetter-than-usual spring setting the stage for an extended dry spell in the summer. Farmers were worried enough, having not gotten all of their crops in the ground in some cases. Prices for corn fell from their sky-high levels of a year earlier. “It’s the weird weather,” Iowa State University Extension agronomist Terry Basol said in sum-

ming up farmers’ dilemma for 2013. “Mother Nature really regulates what the grower’s going to get at the end of the year. And growers are very good to figure out what works best on their farm agronomically and tillage-wise and production-wise.” This month’s Cedar Valley Business Monthly examines some of the issues that had the business sector talking. Much of what they had to report was positive. It’s the sign of a vibrant economy that continues to fire on most, if not all, cylinders. Some of the key challenges that businesses will face in 2014 took root in earnest over the course of 2013. Most, if not all businesses, already are thinking about 2015 and beyond. That they can do so in spite of some of the changes happening around them is a tribute to their skill as entrepreneurs, managers and business leaders. It also says something about the strength and vigor of the Cedar Valley business community at large.

CONTENTS

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FROM THE COVER Ken Pecinovsky harvests and checks the moisture level in a plot of corn at the Iowa State University Northeast Research and Demonstration Farm near Nashua in October. page 4 WARTBURG COLLEGE Wartburg grad spurns glitz of Las Vegas for hometown hospitality of Waverly. TECHNOLOGY Social media are changing the funeral home industry. CEDAR VALLEY BUSINESS MONTHLY

page 7

page 8 DECEMBER 2013

cover story

A look back at 2013 Jim oFFner jim.offner@wcfcourier.com

Waterloo — When Cedar Valley businesses look back on issues that affected their bottom lines in 2013, it might help to use history to gain some context. In many cases, they’d seen it all before. “It’s almost got a ‘back in 1999’ feel, when we were going to hit 2000 and we everyone was warning us we couldn’t handle the change that was coming to computers and everything,” said Elliott Smith, executive director of the Iowa Business Council. “As it turned out, it was little more than a bump in the road.” For Iowa businesses, 2013 began with similar fears — this time over the “fiscal cliff” debates between warring parties in Congress and President Barack Obama. Politicians warned of a government lockup if a combination of expiring tax cuts and acrossthe-board government spending cuts was allowed take effect Dec. 31, 2012.

Government tops concerns “Sequestration,” or automatic spending cuts across federal agencies, kicked in early in 2013 TIFFANY RUSHING / Courier Staff Photographer

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Shaun Bienemann works at wiring a harness at United Equipment Accessories in Waverly. as part of the Budget Control Act of 2011. Further angst over federal spending erupted at the end of the fiscal year in September, as Republicans in the House attempted to defund the controversial health insurance reform law known as “Obamacare.” That effort failed, and Congress ultimately agreed to boost the government’s debt ceiling into 2014. Gauging issues that affected businesses most in 2013, Smith says, “sort of depends on if you’re talking macro national or micro state level. Some might argue we’re in the midst of the macro event right now and that it’s yet to be seen how that plays out, the whole debt ceiling and government shutdown issue. I wish I had a crystal ball and could say how business would or wouldn’t react.” Wrangling over federal government spending remains an unsolved issue that will plague businesses into the new year. “Business really operates on the principle of long-term certainty,” he said. “ ... Out of pure prudence, most long-term business plans these days are focused on the bad, which they have to be, which is a sad commentary on leadership generally and government leadership in particular. You can’t have an economy hitting on all cylinders if you can’t get up to speed.” There were other concerns that concerned Iowa businesses in 2013, as well. “From the agriculture side, the weird weath-

Cedar Valley Business monthly

er patterns have been impactful, with snow in May and an arid drought in July and August and parts of September,” Smith said. Education reform measures that the Iowa Legislature passed were positives, Smith said. “It depends on the implementation of it, but it stands to benefit Iowa in the long term,” he said. Obamacare, known officially as the Affordable Care Act, likely will be the most important issue to most businesses. The president granted businesses that employ 50 or more full-time employees a one-year delay in the requirement to provide medical insurance coverage to those full-timers or pay a per-worker penalty. Smith said the delay hardly made a dent in the potential harm the law could do to businesses. “Right now, a big issue is trying to figure out what the impact is going to be on employees and companies ...” Smith said. “I think there are some unintended consequences with the whole part-time employee thing. ... As we move to 2014, we’ll see numbers related to that providing a clear picture.” For the moment, he said, the law likely is affecting the retail sector more than any other, but ACA is sure to embrace others similarly in due course. Discussions about health care reform have led to some positive changes for businesses, too, Smith said.

“In terms of generally trying to generate better, healthier employees and a healthier workforce, that’s always been an issue at the council,” he said. “If we see improvement there because of the law, that’s kind of good thing.” Obamacare was the No. 1 issue at Waterloo-based PDCM Insurance, said Chris Fereday, president. “For us it has to be Obamacare and what it means for individuals and business,” Fereday said. “We were prepared to pull the trigger, only to have ambiguity restored (with the year delay on business compliance). No matter what we do with the crystal ball, you’re looking for leadership.” However, Fereday agreed the increased focus on employee wellness has been a positive. “For us it was eye-opening because we started to have our groups rather than concentrating on health care costs, start concentrating on behaviors that were driving costs,” he said. “... I don’t know if anybody in the industry can change the pricing structure, but if we can affect prices or change the dynamic and have employees understand what that means to to me, in the long run, that may be one of the side benefits to come out of Obamacare.”

et ended up by getting hardly any rain from July to end of August. ... That was another stress factor.”

interest rates low

In financial sectors, persistently low interest rates dominated discussions, said Steve Tscherter, CEO of Lincoln Savings Bank in Reinbeck. “It is difficult to maintain spread — loan and investment return less deposit and repo costs,” he said. “That is the single largest income stream in banking. We have also levered up our non-interest income production from insurance, annuity sales, investment consulting, and real estate sales.” Housing likely got a boost from low interest rates, too, although inventories in the Cedar Valley remained tight, said Bob Reisinger, executive vice president of the Waterloo-Cedar Falls Board of Realtors. “I think about the only negative I can come up with was the availability of inventory,” he said. “Interest rates are still fantastic. Money is available. As far as our economy, unemployment is low. All the factors for a good market are there. We’d sell more if we had more.” The market’s supply of “spec houses,” homes built on speculation that they would sell, remained low, Reisinger said. If clusters of 12-15 spec homes at attractive Charles Dickens might sum up price points went up across the Iowa’s agriculture year thusly: “It area, they would be snapped up, was wettest of times, it was the dri- he said. est of times.” A snowy winter — 61.5 inches fell at Waterloo Regional Airport during the season — and rainy days in the spring pushed back The manufacturing sector continplanting for many farmers. ues to churn out products in spite Corn and soybeans got planted of challenges, said Mark Hanawalt, nearly a month late in some cases, owner of Waverly-based manufacaccording to Iowa State University turer United Equipment AccessoExtension & Outreach. ries. In many northern counties, acres “I think that on the positive side, of corn and soybeans didn’t get 2013 was better than everyone planted because it was too wet, expected,” he said. “To a certain said Terry Basol, field agronomist point, manufacturing has gone on with ISU Extension in Nashua. in spite of other influences going Farmers planted cover crops in a on around it.” lot of cases. Regulations are among those in“I’d say as you look back on the fluences, Hanawalt said. year, that’s going to be one of the “The gorilla in the room is the major talking points for farmers: federal government,” he said. “Our just getting planted,” he said. “We legislators just don’t seem to conhad pockets that were able to get ceive of how their actions impact in, but we had large areas that people’s plans.” struggled just to get the crop in.” Hanawalt said that’s the biggest Then, summer hit and fields that challenge from 2013, and it apdid get planted had to deal with ex- pears set to continue into the new tended hot, dry conditions, Basol year. said. “In central Iowa, that whole pockSee looKinG BaCK, page 6

Weather extremes

manufacturers endure

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Cedar Valley Business monthly

december 2013

LOOKING BACK

“We are taking it one step at a time and doing what we can,” he said.

From page 5

“It’s seen as a flat year. From what I’m anticipating, the bulk in 2013 is tax implications coming in 2014. Depreciation is being drastically cut, so there may be some people making capital purchases in the fourth quarter that they would not have because they’re going to lose it next year,” he said. Manufacturers also are looking to fill anticipated labor needs, and Skilled Iowa, a state program focused on helping them find trained workers for the future, had its first full year in operation. Kevin Harberts, president and CEO of Kryton Engineered Metals Inc. in Cedar Falls, said filling positions in the future is a concern. “Probably the two most difficult challenges for us in 2013 and for the future in 2014 are finding the talented work forces needed to move forward and trying to figure out how to compete in a global economy,” he said. “... We have open positions going unfilled for months because we cannot find the right match.” Times have changed, Harberts

tourism milestone The year also marked a turning point for the tourism business, said Aaron Buzza, director of the Waterloo Convention & Visitors Bureau. “One of the things that we’re finding is competition is growing,” he said. “Competition is developing new products. It’s something we have to consider as we keep up with the Joneses. Cedar Rapids opening their new convention complex downtown is a competitor.” Opening the Cedar Valley SportsPlex in downtown Waterloo late in 2013 and the scheduled opening of the John Deere Tractor and Engine Museum on the Cedar Valley TechWorks campus, scheduled for spring 2014, TIFFANY RUSHING / Courier Staff Photographer will help to keep the metro area in Jeremy Sessler wires a slip ring on a part at United Equipment Accessories step, Buzza said. “We’re a lot stronger competiin Waverly. tor now,” he said. “Over the last have a two-year degree as well,” five years, with the Isle and all said. “Ten years ago, if an applicant he said. the riverfront development since Competing on a global stage also 2008, we’re a destination that a lot was breathing, you hired them; today, they obviously need to be is a sign of changing times, Har- of folks are seeing as doing somebreathing, but its preferred they berts said. Automation is the key. thing right.”

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Cedar Valley Business monthly

wartburg college

From Wartburg to Vegas — and back What happens in Las Vegas may stay there, but Matt Lamos didn’t. Although his career at the Hooters Casino Hotel had a rocket-like trajectory, the 2006 Wartburg College graduate would forsake the incandescent desert city saul shapiro and now has his is director dream job — manof news and aging Waverly’s community relations at East Bremer Diner. Wartburg “That’s a bit of a College in curveball,” he adWaverly. mits. Contact him at The former stusaul.shapiro@ wartburg.edu. dent body president started a yearlong internship at the Hooters Casino Hotel a week after graduation. Waverly restaurateur Susy Johnson, who was involved in the Hooters startup with some of its former Waverly founders, helped provide a connection. During Lamos’ five years in Las Vegas, he would manage a staff

of more than 50 cocktail servers and bartenders, move into sales, and then become sales director for the hotel with its 696 rooms and 3,000-square-feet of banquet space. Lamos, who was raised in Denver, returned to the Cedar Valley, following his wife, a southern Californian who landed a nursing position at Waverly Health Center. He was employed at Mudd Advertising before kismet occurred. “I had worked at the diner for two years while I was in college,” Lamos said. “I actually had been in communication with (owner) Sue Landau ever since I moved out here. I liked the Hooters brand and the food and beverage industry, and it was neat to see everything on a big scale. But I loved the diner.” Lamos has applied lessons learned from Vegas, but with a hometown twist. “I had friends out there in the industry, but our money was based on making sure we were getting the same groups. So you’re friends on the weekends, but not

on the weekdays,” he said. “That’s unlike Waverly, where those of us in business do a really good job of having everyone shop locally. “The next step for Waverly,” he added, “is bringing in the money from out of town. How do we get those customers so that we’re not just sustaining each other? How do we get to be the place for people driving on U.S. 218 and need to cover four miles to get to the diner or the (Fainting) Goat or any business in Waverly?” Social media, Lamos said, is helping him “move the needle on the tourism side.” “The mom-and-pop places are coming back,” he remarked. “Now with all the online sites — the Yelps and the Googles — people are kind of getting excited about these other places they didn’t know about before, and that’s helping us a lot. “We want people to share their stories about the receptions and everything else. I solicit responses and reviews as much as possible. They’re not going to come here because I tell you to do so, but be-

cause somebody else had a good time.” The diner, he said, is largely insulated from economic downturns by the loyal customer base cultivated over the years by Sue and Don Landau. Don runs the companion Highway 63 Diner in Waterloo. “You treat your local people right, and they’re going to be very loyal to you,” he said. “The biggest thing I’ve learned from Sue and Don is how to develop that loyalty. It’s so different from that transient crowd in Vegas.” Lamos credits his Wartburg experience with helping lay the foundation for his career — as student body president and heading various committees. “I was so involved in different things, working with so many different people and mindsets at once that I was able to alter my approach based on the people I was working with,” he said. “That’s a skill a lot of people don’t have. They’re not able to set aside their one mentality.”

This is my Wartburg story.

What’s yours?

History and culture fascinated me as a child, but it wasn’t until late in my college career that I took Spanish and studied abroad. From there, I started a bilingual tutoring program for immigrants in Kalamazoo, Mich., and found my calling — language education. At Wartburg College, I’m impressed by students who travel to foreign countries, do service-learning projects alongside immigrant English-language learners in the local community, and work hard every day to delve deeper into Hispanic culture. My students are willing to go the extra mile to get the best out of the opportunities they are given. It makes me feel like what I do is not work. — Dr. Zak Montgomery Assistant Professor of Spanish

Leadership. Service. Faith. Learning. 100 Wartburg Blvd., Waverly, Iowa • www.wartburg.edu

Read more of Zak’s story and others at www.wartburg.edu/ourstory Cedar Valley Business monthly

december 2013

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december 2013

Cedar Valley Business monthly

Facebook status updates and tweets announcing the births and deaths of loved ones have become the norm. However, not only have we begun using the Internet to share family milestones, we are also using social media to plan and manage funerals. The funeral home industry has undergone a dramatic transformation: websites help Cherie dargan us select a funeris associate al home, plan the professor of communications service, post onat Hawkeye line obituaries and Community allow friends and College in relatives to easiWaterloo. ly transmit their Contact her at condolences. I had (800) 670-4769 been vaguely aware ext. 1701 or cherie.dargan@ of the paradigm hawkeyecollege. shift in funerals, but edu. had an inside look when my father died last month. Not long ago, distant relatives heard of a loved one’s passing via a late night phone call or a note in the mail days later. When my father died, the funeral home director posted his obituary on its website, with a space where people could post a memory about him. The posts could be linked to Facebook and Twitter, thereby spreading the news still further. There was a page for photos and videos, where I posted a number of photos. The website posted the details of his visitation and funeral, with a map and driving directions. People could order flowers from this page. It was efficient and comforting: I posted the link on Facebook, and friends were able to find the information they needed. Moreover, his page is still there. While my father never had a Facebook account most of his family members do, as do many of our coworkers and friends. We received a great deal of support via Facebook. With friends and family scattered across the country, it is not always possible to travel to funerals. Social media provide a way to support the family. Our cousins sent messages of sympathy and support. In addition, a number of the cards we received in-

Further reading n www.arlingtoncemetery.mil/MAP/ ANCExplorer.aspx n About the Arlington cemetery virtual tour. n www.huffingtonpost. com/2012/06/04/technology-funeralrituals_n_1567545.html n Petrecca, Laura. ª Technology Shifts The Meaning Of ` Death Us Do Part' In Funeral Rituals.º USA Today. June 4, 2012. n www.rosettastonemicrochip.com/ How.html n The Rosettastone company' s website n http://www.us-funerals.com/funeralarticles/the-online-funeral.html#. UmsjfvlvOSo n Marsden, Sara. ª The Online Funeral: How digital technology can reshape funerals as we know them.º US-funerals. com. November 20, 2012

cluded a reference to following our posts about losing Dad on Facebook. When I spoke with the funeral home director about the way technology has changed his industry, he noted that change seemed to be accelerating. His funeral home expects to stream funerals soon. What a boon to the homebound or those not able to travel to the ceremony. (Can podcasting be far behind?) According to us-funerals.com, 126 funerals were streamed in 2008, and it grew to 1,053 in 2010. Another company, FuneralOne, streamed 17,258 funerals in 2011, up from 768 funerals in 2008. What a great way to help friends and relatives living elsewhere to participate in the mourning process. Several trends have emerged: The most obvious is the use of Internet-based tools to prepare and manage funerals. Most funeral homes offer detailed information online on funeral planning, online obituaries and guest books, with a few offering podcasts or video recordings of funerals, and many starting to offer live streaming. Baby boomers are thinking about how to arrange for their own funerals to spare their children expense and pain, and many are doing things differently. They are tech savvy and using the Internet to research their options.

See Funerals, page 9

volunteerism

Resolve to be involved If you are reviewing the laundry list of possible New Year’s resolutions, the Volunteer Center of Cedar Valley has a suggestion. It has significant benefits and won’t cost any money. This year, resolve to volunteer at least 50 hours to strengthen the Cedar Valley commuanne nass nity. is The Cedar Valcommunications coordinator for ley is known for the Volunteer its giving spirit, Center of Cedar which is why findValley. Contact ing a place to volher at 272-2087 unteer in the New or anne_nass@ Year is not an overvccv.org. whelming task. Local groups, organizations, nonprofits and service clubs can use your skills and resources. The Volunteer Center of Cedar Valley represents 107 nonprofit agencies which welcome volunteers and need them to fulfil their missions. In 2013, the national value of one volunteer hour was $22.14 based on an analysis done by the Independent Sector. In Iowa, the average is $17.22. Your resolution not only benefits the agency or nonprofit — it benefits you. Here are a few benefits: ■ Learn or develop a new skill —

FUNERALS From page 8

Sara Marsden points out that many funeral homes give consumers the chance to make all arrangements for cremations or funerals online. The capacity of social networking to transcend time and space might turn out to be the most enduring trend. A friend and colleague who died more than four years ago still has an active Facebook page where friends converse. Mourners are no longer bound by time and space. Grieving happens everywhere and whenever the inclination arises. What’s next? I found a company called Rosetta stone that uses RFID technology to create chips that are attached to tombstones that allow people with smartphones to read a file about the deceased. Other companies are producing what Sara Marsden calls Living Headstones, using QR codes — those black and

Volunteering is the perfect vehicle to discover something you are really good at. ■ Motivation and sense of achievement — Volunteering is about giving your time, energy and skills freely. ■ Boost your career options — If you are thinking of a career change, volunteering is a perfect way to explore new fields. ■ New interests and hobbies — Finding new interests and hobbies through volunteering can be fun, relaxing and energizing. ■ Meeting a diverse range of people — Volunteering brings together people from all backgrounds and walks of life. Volunteering also offers an incredible networking opportunity. ■ Send a signal to your employer, teachers, friends and family — Volunteering reflects a complete picture of you and gives examples of your commitment, dedication and interests. Show people what you are passionate about, and maybe you will inspire them, too. ■ Health benefits — Studies have established a strong relationship between volunteering and health. Those who volunteer have lower mortality rates, greater functional ability and lower rates of depression later in life than those who do not volunteer. white squares on so many products that allow us to use an app to read the code and be taken to a website or a document. If QR codes were used on a tombstone, users could then use their smartphone apps to access a memorial to the deceased. We are starting to see apps to help people tour cemeteries. Do you have a family member buried at Arlington whose grave you have never visited? Now you can, virtually, using a web browser or app for your smartphone. The app allows you to locate and view gravesites, get front and back photos of the tombstone and print the details. What a boon to genealogists. Would my father want an RFID chip in his tombstone? No, he was old school, writing his articles in long hand. He loved seeing his articles and poems in print and we displayed copies at his services. But he would have loved seeing several of his poems I posted on Facebook, and the response they got.

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Cedar Valley Business monthly

december 2013

human resources

Answers to corporate conundrums Running a business — or managing one unit, department or team within a business — is not easy. Questions that have legal or regulatory implications pop up on a regular basis. Answers to those questions aren’t always straightforward and can ed Zalewski insight is an editor at require into various statJ. J. Keller & Associates Inc., utes and case law. a WisconsinThis article shares based a few fairly comHR-focused mon scenarios and compliance some interpretive resource company. More guidance. Q: An employinformation is at www.jjkeller. ee who put in his com and www. two-week notice prospera.com. later decided not to resign. However, our company already has taken steps to replace him. Can we move forward with letting him go? A: In all states except Montana, employment is at will, which

means that an employment relationship can be terminated at any time for any reason, as long as the reason is not illegal. The fact an employee rescinds his or her resignation does not give him or her guaranteed employment. Upon notification of an employee’s intent to resign, employers often start making plans to replace the individual. Employers may even question the loyalty of an employee who tendered a resignation. These are all reasons that might compel an employer to consider terminating the employment relationship. However, companies should be aware that, depending on state law, this change of circumstances could make an employee eligible for unemployment benefits. Q: We do not allow tobacco products anywhere in or around our facilities, but now an employee is asking about e-cigarettes, saying they don’t contain tobacco. Must we allow these? A: Some states have laws forbidding smoking in certain places of

employment, and these laws may or may not address electronic cigarettes. However, where state law does not forbid the use of electronic cigarettes (or where the use of tobacco products is not regulated), it is up to your company to define the limits of your company policy. Employers may dictate what behaviors are allowed on work time and/or on company property, and they can certainly adopt policies that are more stringent than state or federal law. If you choose, you may prohibit the use of electronic cigarettes. Q: Our company gives gift cards to employees every now and then. Is there a certain amount after which these gift cards must be included and taxed as income to the employee? A: Such gift cards would likely be considered a taxable benefit and should be treated as income and subject to payroll taxes and withholding. There is no minimum amount before a gift card is considered income. According to the Internal Rev-

enue Service Publication 15-B, Employer’s Tax Guide to Fringe Benefits, “[C]ash and cash equivalent fringe benefits (for example, use of gift card, charge card or credit card), no matter how little, are never excludable as a de minimis benefit, except for occasional meal money or transportation fare.” Q. One of our employees seems to be accident prone and keeps suffering work-related injuries. He has been out quite a bit on workers’ compensation leave. We are considering terminating him because of his unsafe work habits. Can we do this? A. It can be risky to terminate an employee for being “accident prone,” but if there is evidence the employee was properly trained and still failed to follow safety guidelines, you could terminate for violation of policies and procedures. An employee on workers’ compensation leave does not have greater rights to continued

See ansWers, page 11

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december 2013

Cedar Valley Business monthly

Workplaces stifled by fear of failure diane staFFord The Kansas City Star A

responsibility-averse because they felt the problems were ingrained in the organization, that there were no incentives to try, and that senior management was indifferent. “This may be a trend stemming from the sluggish economy or the weakened job market, but management also plays a significant role in supporting the ability to take risks,” said Sandi Edwards, a senior vice president at AMA Enterprise. Someone needs to be accountable for outcomes, Edwards acknowledged, but it behooves organizations and managers to tolerate disappointing results. Intolerance causes workers to crawl into their holes, to not try new things, to duck responsibility. The same survey asked how to encourage responsibility (and thus innovation). The answers were what we heard 10 years ago: Encourage it. Measure it. Reward it. Make it a corporate value. Ideas bloom with — remember the buzzword — empowerment.

decade ago, motivational speakers trumpeted to ballroom-sized crowds, “Don’t be afraid to fail!” CEOs told their employees to take risks: Be brave! That’s how progress happens. We don’t hear that as much anymore. Mistakes are expensive. Failure kills careers. A recent survey confirms the kibosh on risk-taking. According to AMA Enterprise, a division of American Management Association International, there is a strong fear of failure and risk aversion in the workplace. And because people are afraid of being held accountable for mistakes, they’re also avoiding taking responsibility for their work. No one wants to be the scapegoat. An AMA survey, which this year reached managers and employees in about 500 U.S. companies, found that fear of being held responsible for mistakes or failures was the single biggest obstacle to encouraging people to take greater responsibility. To reach Diane Stafford, call To a lesser extent, the survey (816) 234-4359 or send email to found that people were risk- and stafford@kcstar.com.

ANSWERS From page 10

employment than any other employee (unless the injury leave runs concurrently with job-protected leave under the Family and Medical Leave Act). However, you may not terminate an employee solely because he or she files a workers’ compensation claim. If the safety violations would justify termination, then the injury claim does not prevent you from firing that individual. Q: A former employee contacted us to let us know that she felt she was sexually harassed by her male manager while on a business trip. This event allegedly occurred right before her manager terminated her for performance issues. We trusted the manager’s judgment with regard to the termination, but now we’re concerned. What can we do? Must we reinstate the employee? A: Even though the individual

is no longer your employee, you should investigate her claim thoroughly. Interview anyone who might have information about the situation. If your investigation finds the manager behaved inappropriately, you should promptly implement discipline proportional to the offense. Be sure to record the date you became aware of the situation and the dates on which you took action. If you relied only on the manager’s word to terminate the employee, look into the termination as well and make sure it was for a legal reason. If the manager lied or exaggerated the motives for termination, it might appear that he was simply looking for a way to terminate the individual to protect himself from a sexual harassment claim. If the employee was terminated unfairly, you could consider reinstating her, but you are not required to if the employee was terminated for legitimate, well-documented reasons.

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year-end checklist

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Plan for 2014, and for taxes For businesses, the end of the your business’s total debt ratio year is the perfect time to do and profit margin. It won’t take long with your your business planning next year. balance sheet in You’re already dealing with the front of you. books, so why not do some analb) Goals from ysis and make some decisions to last year. ensure that your business prosOnce you know pers in 2014? where your busiThis year-end checklist will ness is, take a help you get your income taxes look at how it in order and get your business Patrick smith got here. Pull out planning off to a good start. is vice your business president of and any retail banking plan for First other planning Whether you’re one of those solo entrepreneurs with a National Bank documents. Did business shoebox full of receipts or a in Cedar Falls. your Contact him small business person who has at 268-7012 or accomplish what a bookkeeper on your payroll, Patrick.Smith@ you set out to do? Make some you have to get this step done myfnbbank. notes about the before you can do anything com. accomplishment else. Get the help you need — hire a of your goals. These will be bookkeeper or accountant if you handy when you do your business planning for the current need one. year. c) Current tax strategies. Investigate different tax strateNext, figure out where your business is now. Examine these gies to maximize your business’s deductions. Talk to a professional three areas: a) Financial documents and an- accountant and/or tax lawyer to get advice about which tax stratalyze ratios. Prepare the standard three egies would be best for your perbusiness financial documents sonal and business circumstancthat will be the basis of your de- es. cisions. The balance sheet is a financial summary of the business. You’ve done all the groundThe income statement is a work and you’re ready to do glance at whether or not your some business planning. business is profitable at a partic- ■ Set next year’s goals. ular time. ■ Prepare an action plan or The cash flow statement rec- plans. onciles your opening cash with ■ Start implementing your acyour closing cash for a particular tion plans. period. List and summarize your business’s cash flow for each of these three areas: You can turn over the required ■ Cash flow from operating ac- documents to an accountant or tivities — such as revenues and prepare them yourself. Check expenses. with your tax accountant for a ■ Cash flow from investing ac- list of the key records they will tivities — such as assets pur- need to prepare your income tax. chased and assets sold. That’s it. ■ Cash flow from financial acYou know the cliche: Businesstivities — such as loans and loan es that fail to plan plan to fail. repayments. Hopefully, this year-end checklist Once you’ve examined your has inspired you to get to it and balance sheet, income statement make your business planning and cash flow statement, check easier.

Get books in order

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december 2013

Cedar Valley Business monthly

hiring

The link between a leader’s attitude, company culture Being a leader could be seen as glamorous, but those who have actually been in a leadership position know it’s less about glamour and more about hard work. You have responsibilities that come with your role as deborah a leader in your Beighley company. Leadis owner/ ers often juggle manager multiple projof Express Employment ects while trying Professionals to look ahead to in Cedar Falls. changes and opContact her at portunities in (319) 277-6603 your industry or Deborah. to help you stay beighley@ expresspros. competitive for com. years to come. There are several things you should be keeping on your radar.

attitude check When you’re running to the next meeting, closing that big deal or handling the latest crisis, what kind of attitude are you projecting to employees? Actions may speak louder than words, but attitude trumps them both. Amanda Gore, a professional speaker, author and workplace communication and performance expert, has made it her goal in life to educate people on the power of their attitude. “The spirit in which we do anything determines the outcome, whether positive or negative,” Gore says. This especially applies to the relationship between employer and employee where “the mood of the leader will determine the mood of the organization.” And the mood of your company is essentially your culture.

Company culture Company culture has become the buzzword during the past few years as employees search for the perfect fit and compa-

nies try to define their culture on paper. The 2012 Deloitte Culture in the Workplace study found that “94 percent of executives and 88 percent of employees believe a distinct workplace culture is important to business success.” In addition, the study also uncovered that there was a “correlation between employers who say their organization has a clearly articulated culture and those that say they are ‘happy at work’ and feel ‘valued by the company’.” Research shows that company culture has a strong impact on numerous aspects of the business world, including success and employee passion. That, in turn, impacts hiring.

impact on hiring Hiring right is the goal of every leader. A bad hire can cost a company thousands of dollars, according to a 2012 CareerBuilder survey of those in hiring positions. More than 41 percent said a bad hire cost them $25,000 or more, and 24 percent said it cost them more than $50,000. But sometimes a bad hire was actually a misalignment of culture. A recent study highlighted on Inc.com reported that many companies are misrepresenting their culture in the hiring process, “leaving many recruits eventually disappointed with their new job.” The link between a leader’s attitude toward company culture and hiring decisions ultimately begins and ends with you. David Roth, technology entrepreneur and Forbes magazine contributor, says “A company’s culture begins with its founders — what they believe in, what they value, and how they work.” Are all of those pieces articulated through your attitude? Make it a point to do regular attitude checks throughout your day. Your organization’s culture and hiring decisions are too important not to. Cedar Valley Business monthly

december 2013

management

Re-recruiting your top performers We’ve all heard stories of couples who stopped courting soon after they were married. Often, this is later identified as the first step in a gradual decline that ends in a failed relationship. Unfortunately, the same thing can happen in an employment relarick Brimeyer is president of tionship. Re-recruiting Brimeyer LLC, an Ames-based mid- and top-level independent performers is critmanagement ical, especially as consulting firm. the economy conContact him tinues to improve at (515) 450and jobs become 8855 or rick@ more plentiful. brimeyerllc. So, how does com. one go about re-recruiting? Again, our analogy of a successful marriage provides some clues. Re-recruiting your best employees involves maintaining that same level of mutual excitement and commitment that existed pri-

or to and during their early employment. Dating couples build each other up via compliments. The on-thejob equivalent is consistently recognizing a job well done. Effective recognition possesses the following elements: ■ Genuine — The recipient knows it is heartfelt. ■ Timely — It occurs immediately after the effort. ■ Personal — It fits the unique traits and interests of the individual (e.g., a strong introvert will likely be much more comfortable with a one-on-one conversation than an announcement at an all-employee meeting). How powerful is recognition? In 1974 Bill Bergan was beginning his fourth season as the men’s cross country coach at Iowa State University. Over the previous 25 years, ISU had placed last 21 times and second-to-last four times in the Big Eight Conference Meet. In Bill’s words: “That fall we won Iowa State’s first title since 1931. Johnny Ma-

jors was the most admired and most popular personality on campus, and he was in the middle of an exciting football season. Yet, he took time to come by State Gym and offer congratulations. It’s been 40 years, but I still recall his gesture.” Genuine, timely and personal. That simple act of recognition has stuck with Bergan throughout a career that went on to include 25 conference titles in track and cross country, a pair of NCAA cross country championships and induction into multiple halls of fame. Investing in developing employees by providing honest feedback, access to pertinent training, challenging new job assignments and opportunities sends an unmistakable message that they are valued. Top performers get much more done than their peers because they’re always finding a better way — they work smarter. Make sure that they’re compensated accordingly. Don’t let rigid job classifications and pay scales confine you if an employee is regularly ex-

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ceeding expectations. Get creative. Make sure you maintain a positive culture within your workplace. Ensure that low performers don’t eat up an inordinate amount of your time. Make expectations clear, provide the resources required for them to succeed, but hold them accountable. Low performers will leave (or be dismissed) because they aren’t willing to meet your expectations, or top performers will leave because they’re tired of carrying the low performers. It’s vital to understand employees’ personal goals and to share how the organization is performing and where it is going. This provides confidence that continuing the relationship is in the best interests of both parties. I recently heard the story of a woman who was retire early because the joy was gone from her work. Basically she just didn’t feel valued. During her retirement ceremony, she was shocked to see her boss sobbing. It was the first time in years that she felt appreciated. Don’t be that supervisor.

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december 2013

Alliance & Chamber

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Upcoming EVENTS

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Nominations are open for a variety of business awards to be presented during the 2014 Annual Celebration on Thursday, March 27th at the Park Place Event Center. Do you know of an individual who should be recognized for their contributions in creating a strong business climate and enhancing the quality of life in the Cedar Valley by continued service and leadership? Has a business or organization made an outstanding contribution to the Cedar Valley and its citizens on a continued basis or with a speciﬁc project? You are encouraged to nominate them for recognition of their contributions.

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Nominations are being accepted through January 31st for the following awards:

• Business of the Year Award • Harold Brock Innovation Award • Treating Capital Well Award • Fulﬁlling the Vision of One Award • Cedar Valley Partner Award Descriptions of the awards and nomination forms are available at the Alliance & Chamber ofﬁces or online at www.cedarvalleyalliance.com/ programsandevents. For additional information, please contact Bette Wubbena at bwubbena@ cedarvalleyalliance.com or 232-1156.

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December 2013

Small business sales pick up neW yorK (AP) — Sales of small businesses are finally making big gains. Fred Barkman, who last year bought Spectra Laboratories, a company that tests land and water for toxins, is in the process of purchasing a second environmental lab. Both companies were owned by retirees who wanted to sell but had to wait Fred Barkman Jr. for the economy to improve after the recession devastated the small business market. “I wasn’t expecting this second acquisition. It probably came sooner than I expected,” says Barkman, whose company is located in Tacoma, Wash. “But I’m more able to find things worth buying.” The economic recovery has created a surge in sales of small businesses. The number of deals tracked by online marketplace BizBuySell.com rose more than 40 percent in the third quarter.

Behind the trend: baby boomers want to retire, businesses are healthier following the recession and buyers are finding it’s easier to finance deals. At the low point of the recession — the second quarter of 2009 — BizBuySell logged just 1,040 closings. In the third quarter of this year 1,685 sales closed. Expect sales to continue at their current hectic pace, says Curtis Kroeker, a general manager at BizBuySell.com. “Next year could be a year of extreme growth, given the trend we’ve seen this year,” Kroeker says. Many owners had hoped to get pre-recession prices, but lowered them after finding few takers. But don’t worry about sellers. They’re still doing fine, according to Kroeker. The average selling price for a small business is up 3.4 percent from a year ago, and more people have the financial ability to buy a company since the recession. Richard Lyon bought Bend Commercial Glass in July after looking for a company for three years. “Everyone’s sales were 60 per-

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cent of what they had been two years before. No one wanted to sell at a low price,” says Lyon, whose company is in Bend, Ore. Lyon’s purchase was a classic scenario in today’s market. He bought from a retiring baby boomer. Lyons put down 60 percent of the $840,000 selling price and the owner lent him the rest. The easing of the credit crunch is spurring sales. Banks are more willing to lend to small businesses, says Paul Merski, chief economist with the Independent Community Bankers of America, a trade group. Still, some caution remains because of increased government regulation following the financial crisis of 2008. Many sellers are financing sales — letting buyers pay on an installment plan — to get deals done. Before Michael Epstein and his business partner could sell their 13-year-old video game manufacturer, eDimensional, they had to agree to finance part of the sale price. Only then did the buyer’s lender approve the deal. The deal closed in July. They had hoped to

sell five years ago. “We were aggressively trying to sell before the credit crunch, and took it off the market when we weren’t feeling good about the buyers and types of financing available,” says Epstein, whose company was located in Jupiter, Fla. Retail businesses and restaurants are especially hot. Restaurant sales more than doubled in the third quarter, BizBuySell.com says. Jeremy Bragg and Regi Ott had their eye on River City Coffee, a cafe in Little Rock, Ark., for several years. Bragg managed the cafe, and when the owner decided it was time to sell, he and Ott borrowed from their families for a down payment of about 14 percent of the $70,000 purchase price. The owner financed the rest. The deal was sealed last month. They believe that the high profit margins they’ll make selling espresso and gourmet tea drinks will help pay off the loan. “Though the economy may not be that great, a lot of times, people consider that their little luxury,” Bragg says.

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Beef industry markets new cuts Los Angeles Times For generations, beef shoulder was a blue-collar cut of cow, fit for the meat grinder or crockpot but not much else. But where others saw pot roast, Tony Mata saw potential. Mata is a Dallas meat scientist whose mission is to find hidden gems in rough parts of the steer. He and a team of researchers came up with the industry’s newest steak by mining the muscle under the shoulder blade for a tender pad of flesh. Unveiled last year at a trade show, the meat is starting to land on restaurant menus. At about $6 a pound, it sells for twice the price of hamburger and has a catchy name to boot: the Vegas Strip Steak. “People think I’m crazy trying to look for new steaks in an animal we’ve domesticated for thousands of years,” Mata said. “But as an industry, we’ve ignored all these other muscles. I truly believe there’s still two or three more steaks out there.” Mata’s persistence is a testament to changing fortunes in the beef

LOS ANGELES TIMES

Flatiron/Backyard, from left, Teres Major, Boneless Chuck Flat and Top Sirloin Culotte cuts are readied at Tender Greens in Pasadena, Calif. industry. U.S. per capita beef consumption has been falling for decades as consumers have shifted to lighter fare. Pricey prime rib and filet mignon have vanished from many American tables in a sluggish economy. That has the beef industry scouring the animal for affordable delicacies — cuts that will fetch higher

prices than burger without breaking the bank for shoppers. Now steaks with names like ranch, petite tender, Denver and Sierra are popping up in meat cases alongside familiar names like sirloin and porterhouse. “Any time you can make something steak-able, you’re bringing more dollars back to the carcass,”

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said Jake Nelson, a meat processing specialist at Oklahoma State University who worked with Mata on the Vegas Strip Steak. Such efforts began in earnest more than a decade ago. That’s when the U.S. industry’s promotional arm, known as the Beef Checkoff, funded research to find cuts tasty and tender enough to turn into inexpensive steaks. Researchers at the University of Nebraska and the University of Florida studied more than three dozen muscles, focusing mainly on the shoulder or chuck, as well as the round, which is the back leg. They measured tenderness, trimmed the gristle and spent hours in test kitchens cooking up the results. Top-quality steaks have traditionally come from the steer’s midsection, which is supple and easy to butcher. Chris Calkins, a University of Nebraska professor who worked on the project, said skepticism abounded among meatpackers that anything valuable would be found in the animal’s ropy front

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BEEF CUTS From page 19

and behind. But in a portion of the chuck known, unappetizingly, as the shoulder clod, they found a large pocket of marbled meat. All it required was some nimble knife skills, and suddenly there were the makings of an elegant steak. They dubbed it the flatiron because it resembled an antique steel clothing iron. Retailing for about $6 a pound, the flatiron is now America’s sixth most popular steak, overtaking the porterhouse last year. And it has changed the economics of beef. Experts estimate that it has helped add $50 to $70 to the value of the average steer — impressive, considering that an entire animal goes for about $1,600. The flatiron has enabled restaurants to serve a hearty steak at relatively affordable prices. The Tender Greens restaurant chain offers a sliced flatiron plate with side dishes for $11. Although the flatiron is the runaway sales leader among the newer cuts, nothing can beat the recently introduced country-style ribs for sheer imagination. These “ribs” are

LOS ANGELES TIMES

Johanna Tchon, left, and friend Jane Moro, 28, enjoy a meal of flatiron/ backyard steak at Tender Greens in Pasadena, Calif. boneless — and they aren’t found near the animal’s rib cage. Instead, this meat is sliced from the chuck. Erik Oberholtzer, co-founder of Tender Greens, said he slow-cooks these faux ribs for hours over hickory wood, then tops them with a homemade chipotle barbecue sauce. “They come out soft, juicy and fall apart without the mess of bones,” he said. Other industry innovations amount to little more than smaller portions. Take the New York strip fillet. It’s essentially a typical 1-pound New York strip steak split in half. That might seem like cheating, but beef marketers defend it

as good value for consumers on a budget. “They’re still enjoying a high-quality steak but at a lower cost,” said Trevor Amen of the National Cattlemen’s Beef Association. Economic conditions have long spurred reinvention when it comes to America’s favorite red meat. The Great Depression gave rise to the lowly cube steak, a slice of top round or top sirloin so tough that it needs to be pulverized with a mallet to make the meat fit to chew. Still, getting consumers to embrace new cuts like the petite tender has been anything but a slamdunk.

“I’ve never heard of them,” Justin Nathaniel, 25, who was grocery shopping recently at a Hollywood Vons, said about the new cuts. “I prefer the porterhouse. I want lots of marbling.” Some meat experts are dubious too. They say the beef industry is trying to dress up second-tier cuts with fancy names. “We already know about all the good stuff,” said Lou DeRosa, a third-generation butcher at Marconda’s Meats in Los Angeles. “Those new cuts are pretty rough.” But other industry veterans say the value steaks are a nice addition to their lineups. Food scientist Mata promotes his Vegas Strip Steak as a flavorful alternative to the New York strip, but at half to one-third the price. He has trademarked its name and launched a quixotic attempt to patent the butchering process needed to extract the steak from the shoulder blade. At 63, the native of San Miguel de Allende, Mexico, says he’s not done yet. Mata is still exploring the beef shoulder and back in search of the next big thing. “Get back to me in two years,” Mata said. “I’ll have another steak by then.”

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Businesses outsource health insurance The Atlanta Journal-Constitution Allison Martiny really didn’t have many options when choosing health insurance for her family at annual open enrollment. Only one of the two plans her employer offered made any sense, and even that didn’t include the dental coverage her kids need. Then her company, a small IT recruiting and staffing firm in Atlanta called eCommQuest, did something you’ll see a lot more companies do in the next few years: Instead of sponsoring an insurance program that offered only a few choices, it is giving employees some money and sending them to shop for their coverage online in a marketplace operated by an outside firm. Martiny and her colleagues can pick and choose, buffet-style, from a dozen or more plans offering insurance at different prices, with low to high deductibles and big or small co-payments, for medical, dental and vision coverage. “I like it so far,” Martiny said. “It will take a little time to make sure we’re choosing the best option for us financially, but I prefer having the ability to make my own decisions regarding my family’s coverage.” The outsourcing of employer-provided insurance to what are known as “private exchanges” stands to radically transform the way health insurance is provided in the American workplace, experts say. They have been described as similar to a 401(k) plan, and they could someday become as common as the retirement program. For employers and employees alike, health insurance problem forces tough decisions. But while they offer both employer and employee something desirable in the bargain, the private exchanges also shift responsibility and possibly additional cost to workers, some of whom may not be prepared to handle it all. “This is part of a fast-evolving strategy in which employers transition from the “defined benefit” strategy they have employed for decades, in which the employer was responsible for providing for a set percentage of the coverage expense, to a “defined contribution” strategy, in which the employer provides a set-dollar amount, said David Bottoms, vice president of The Bottoms Group, an Atlanta employee benefits consulting firm.

“This closely mirrors the evolution in the retirement plan space from defined benefit plans — pensions — to defined contribution plans — 401(k)s,” he said. The very idea makes some people nervous. “You’ve got to do all the legwork,” said Steve Rossey, 42, of Moreland, Ga., who gets employer-provided coverage now through his job working for a home restoration company. “I wouldn’t be a big fan of it. The common employee doesn’t know anything about picking the right insurance, and what they don’t know can cost them thousands of dollars.” Private exchanges, unlike the public exchanges, which were created under the Affordable Care Act and which opened on Oct. 1, are little-known to most consumers. A survey by consulting firm Accenture found 83 percent had never heard of them, and only a million people are signed up for them now. But health insurance consultants say they could be the next big thing, and employers in surveys admit looking at them seriously. Accenture estimates 9 million people will use them by 2015, and 40 million by 2018. About 170 million Americans currently get health insurance through an employer. A few major companies, including Sears and Walgreens, have already announced they are making the move away from traditional insurance programs that are selected and administered by employers and their human resources staffs. Others, including IBM and Time Warner, are moving their retirees to private exchanges. Just last month, consulting firm Mercer announced it has signed up 33 employers, including Petco, to take part in its private exchange next year. Under the exchange structure, workers will be able to customize the kind of insurance they want, but will take on the new responsibility of making sure they buy what is appropriate for them. Previously, their employer, for better or worse, presented them with just a couple or a few basic insurance choices. Often, analysts say, they were offered more coverage than they needed — a “better safe than sorry” approach.

Employees using private exchanges typically spend less, and their purchases are more suited to their needs, said Alan Cohen, co-founder of Liazon, a private benefits exchange company that serves about 100,000 employees. One risk for employees is that they might, for example, choose a higher-deductible, lower-premium plan that would save them money in the short term but could leave them under-covered. Another risk to employees is that employers might gradually reduce the amount of money they contribute toward their insurance. Experts point out that employers can cut back on the insurance subsidies they provide their workers at any time, however, and many already have done so. It is too early to tell what employers will do in terms of funding their employees’ insurance purchases on private exchanges in the future, said Richard Birhanzel, health managing director for Accenture. But, “Clearly, one key driver is to reduce the cost of providing health care. That doesn’t mean inferior benefits for employees,” he added. At eCommQuest, a rapidly growing private company, the shift to an exchange was formally announced to workers last month. Company President Mark Phillips wanted to give his roughly two dozen employees more — and more customized — choices to help attract and retain top workers. He also wanted to control his costs. “They liked the variety this offers,” said Phillips. “Before, it was one-size-fits-all. And we have a little more control of our costs. It’s a good balance between managing our costs and offering a nice perk to our employees.” Looking ahead, Phillips said, he expects the company’s spending on health care per employee will be about the same next year under the new system as it was under the old. Some workers might pay slightly more and some slightly less, he anticipates, depending on whether they expand their coverage. If premiums go up the next year, he said, the company likely will share the increased cost with employees. The new national health care law that created the public exchanges is not the sole reason employers

are considering outsourcing benefits. But it is helping clear the way for them to implement the changes, experts said, by bringing the idea and the name “exchanges” into the public mind. “Health care reform has made the word ‘exchange’ kind of sexy,” said Rob Peters, vice president and principal in the employee benefits practice at Pritchard & Jerden, an Atlanta risk management and insurance services firm that put together the program for eCommQuest. Private exchanges are emerging because of a confluence of factors. Improved technology allows for better online shopping. Consumers also are more comfortable shopping online for products such as insurance, and in some cases are demanding more opportunities to do so because they want more choices. And employers are increasingly concerned with managing their health insurance expenditures and see the marketplaces as a way to contain their costs. The number of plans employees will have to choose from can vary, but a dozen or more is conceivable. While employers can be involved in picking the exchange and providing a subsidy, employees would have to make their own choices based on their research and any guidance offered by operators of the exchanges. Large firms such as Aon Hewitt, Mercer and Towers Watson are among those running them. Ann Murray, partner with McKenna Long and head of the law firm’s employee benefits practice, said the operators of the online marketplaces “have really made a push in (the) wake of the Affordable Care Act to create private exchanges,” and noted that they are being “marketed hard.” Some marketing to a skeptical public might be needed. “In the (human resources) world, there’s such an entitlement mentality,” Murray said. “It’s hard to make drastic changes in benefits. It’s met with a lot of resistance in employee populations, especially in large companies.” Still, Murray said, “People like choice.” Accenture found 85 percent of consumers surveyed were neutral or positive about private exchanges once they were explained.

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december 2013

PCs get kidnapped by ransomware San Jose Mercury News Thousands of consumers are getting a nasty shock when they turn on their computers these days. They find their screen frozen with an alarming note from what appears to be a government agency claiming they’ve accessed child pornography or committed other crimes and demanding money to unlock their machines. If they fail to pay, the note warns, the authorities will lock them up. “It’s probably the No. 1, end-user cybercrime now,” said Kevin Haley, director of security response at Mountain View, Calif.-based Symantec. “It’s pretty serious.” Experts say the risk of getting infected with “ransomware” can be minimized by making sure all of your software — including your antivirus programs — are updated regularly, not opening spam or email attachments from people you don’t know and avoiding suspicious-looking websites. If that doesn’t work, you may have to wipe the computer completely clean and reinstall your files afterward. That assumes you

have previously “backed up” or stored those files on a USB device, website service or some other way. If you haven’t, your photos, financial records and other documents could be lost. Windows-based computers often come with a recovery CD for restoring the operating system and other pre-loaded software. But restoring files can be complicated, and people who aren’t tech-savvy may need to get help from a computer-repair store or other experts. “It’s a nasty type of malware,” concluded Andreas Baumhof, chief technology officer at San Jose, Calif., security company ThreatMetrix. Although the money-extorting scheme has been around for years, it has evolved to become one of the world’s most pervasive and aggravating cyber schemes. Symantec, one of several companies offering a free ransomware removal service, recently reported seeing an “explosion of ransomware” spread by criminal gangs. In one case alone, it noted, 500,000 computers were infected over a

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Cedar Valley Business monthly

period of just 18 days. A typical version freezes of the scam the victim’s computer with a message bearing an official-looking FBI logo, accusing the person of having visited child porn websites and of sending “messages with terrorist motives.” It demands $200 or more to unlock the machine, adding, “you have 72 hours to pay the fine, otherwise you will be arrested.” In earlier versions, victims were told to pay the ransom by sending a premium-rate text message, which was charged to their phone bill. More recently, crooks have demanded payment via prepaid electronic systems such as MoneyPak. Those are sold for cash in stores and provide coded numbers used to pay bills online. “A conservative estimate is that over $5 million a year is being extorted from victims,” Symantec’s report said, though it added that the actual total is “likely much higher.” Experts generally advise against paying the ransom, because there’s no guarantee the crooks will ever unfreeze the computer.

how to remove Here' s how to use a free Symantec service that often removes the virus: 1. If the computer is Internetconnected, shut it off by holding down the power button for about 10 seconds. 2. Turn it back on while repeatedly tapping the F8 key. 3. When it brings up the ª advanced boot options,º use the down arrow to select ª safe mode with networkingº and hit ª enter.º You should see a screen that says ª safe mode.º 4. Open a browser and go to http:/// www.norton.com/npe 5. Click the button to download the Norton Power Eraser, save it to your desktop and double-click the icon to run the file. 6. After reading the user license and clicking ª agree,º click ª scan for risks.º 7. As Power Eraser restarts the computer, repeatedly hit the F8 button and again select safe mode with networking. 8. Click ª runº so Power Eraser can scan for the virus. 9. Once it finishes, you' ll see ª scan completeº in a window with the results. Then click the ª fixº button. 10. Click ª restartº to reboot the computer again. You should see a confirmation that threat has been removed. SOURCE: Symantec

Battle lines being drawn over ethanol Milwaukee Journal Sentinel The debate over ethanol has taken another turn, with both sides launching campaigns focused on higher blends of the fuel additive that are coming to the marketplace. In October, the Outdoor Power Equipment Institute, whose membership includes Briggs & Stratton Co., Ariens Co. and Kohler Co., began a consumer education program called “Look Before You Pump,” aimed at preventing people from using the new 15 percent ethanol blend of gasoline in small engines. Meanwhile, a Wisconsin grain farmer donated $50,000 to start a campaign aimed at promoting corn-based ethanol as a way to reduce fuel prices, lower the nation’s dependence on foreign oil and improve air quality. Advocates say raising the amount of ethanol in gasoline from the current 10 percent blend to 15 percent and higher amounts is gaining traction in the marketplace. “Ethanol is about 60 cents per gallon cheaper than gasoline, so those marketers with the ability to blend higher levels of it in their fuel

are taking a strong look at it,” said Bob Dinneen, president and CEO of the Renewable Fuels Association, based in Washington, D.C. Critics say the higher blends could cause engine failures and void warranties of air-cooled engines used in outdoor power equipment, boats and motorcycles. Under federal law, consumers are not supposed to use gasoline with more than 10 percent ethanol in older vehicles or small engines. But given the higher blends are cheaper, fueling mistakes are going to happen, said Laura Timm, a Briggs & Stratton spokeswoman who helped create the Look Before You Pump campaign. Price is the first thing Americans notice when buying gasoline, according to a Harris Interactive poll done for the Outdoor Power Equipment Institute. Two-thirds of the poll respondents also said they assumed that any gasoline sold at a gas station is safe for all of their cars as well as boats, lawn mowers, chain saws, snowmobiles, generators and other engine products. More than 70 percent said they

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weren’t sure if it was legal or illegal to put gasoline containing high amounts of ethanol into small engines. “Most consumers don’t realize there’s ethanol in gasoline today anyway, much less a higher percentage of it that could ruin their engine products,” Timm said. Look Before You Pump will include public service announcements and printed materials to remind people they shouldn’t use gasoline containing more than 10 percent ethanol in small engines and vehicles manufactured before 2001. “We know the problems it’s going to cause for everything from power washers and snow throwers to utility vehicles and boat motors,” said Dan Ariens, president of Ariens Co., a Brillion, Wis., manufacturer of lawn-and-garden equipment and snow throwers. The problems could include engine overheating, fuel line ruptures, a breakdown of plastic and rubber pieces in engines, expensive repairs and engine failure not covered by warranty. Engine manufacturers and auto-

makers fought introduction of the 15 percent ethanol blend known as E15 and say they’re going to try to force the U.S. Environmental Protection Agency to require a better label at the fuel pump to prevent misfueling. The current 3- by-6-inch orange and black label is inadequate, according to Kiser. “Someone has to start telling consumers about this,” he said. The risks of using E15 in vehicles have been exaggerated, according to the ethanol industry. It says the fuel blend underwent three years and millions of miles of testing by the EPA before it was introduced in the marketplace. There haven’t been engine problems or misfueling incidents, according to the Renewable Fuels Association, which questions the need for the Look Before You Pump campaign. “Honestly, I don’t think people are that stupid in Wisconsin” to use the wrong fuel, said Josh Morby, executive director of the Wisconsin Bio Industry Alliance, which represents ethanol producers and farmers who grow corn to make the fuel additive.

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Honda mini-motorcycles flying off lots Los Angeles Times In 1964, the Beach Boys had a hit record that started with the lyrics, “It’s not a big motorcycle, just a groovy little motorbike.” A half-century later, Honda has reinvented the groovy little motorbike for a new generation. And it can’t make them fast enough to satisfy a swarm of buyers. Dealers are sold out of the tiny Grom — a name derived from “grommet,” for newbie surfer — and report waiting lists of about 40 buyers. Many are offering more than the asking price for the street-legal mini-motorcycle, which starts at $2,999, less than many scooters. For Honda, the Grom represents a play to bring new customers to the company and to motorcycling. As with the launch earlier this year of its CB500 series, Honda is aggressively courting new riders, young riders, female riders and minority riders — anyone outside the cohort of white male baby boomers who have been the core buyers of motorcycles for decades. “We need this market to grow,” said Bill Savino, manager of Amer-

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The 2014 Honda Grom has proven popular, with many dealers sold out. ican Honda MC Press. “The boomers are going out. We need new riders coming in.” At Huntington Beach (Calif.) Honda, the strategy seems to be working. But owner Greg Guthrie sees even broader appeal. “Every day we have three or four people asking about it,” he said. “I’ve been in the business 25 years,

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and I can’t remember a unit that has had a wider cross-section of buyers. There is no demographic for this bike. It’s everyone. That’s the demographic.” The Grom sits and rides like a pit bike or a minibike — like the Honda CT90, Trail 90 or MiniTrail, models that Honda sold by the tens of thousands in the 1970s.

But it has the look of a shrunken street bike and comes equipped with disc brakes and a four-speed manual transmission. Power comes from a 125cc motor. For a street-legal machine, it’s a spare nubbin of a thing that, fully fueled, weighs only 225 pounds. At that weight, there’s enough power to zip through city traffic but not enough to keep up with “big” motorcycles, like the ones the Beach Boys were singing about in “Little Honda.” The Grom is easy to ride, easy to park and, at a projected 100 miles per gallon, cheap to operate. The base price is about half what the company gets for its bigger 300cc Forza scooter, and just $400 more than the cost of the company’s stripped-down 50cc Ruckus. While celebrating the success of their little motorcycle, Honda executives admit they did not anticipate the Grom’s popularity. “We thought it would do well, but we’ve been taken aback by the response,” said Jon Seidel, assistant manager of American Honda MC Press. “We have dealers with waiting lists of 30 and 40 people.”

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