Prairie Business April 2011 by Prairie Business Magazine

April 2011

Community Spotlight: Bemidji , MN Gateway to diversity pg 26

Company Spotlight:

WOMEN IN BUSINESS FRAMING SUCCESS pg 22

Regency Hotel Management pg 16

MONEY

Financial planning helps create ‘good fortune’ pg 43

LEADERSHIP Innovation: A smarter way of doing things pg 30

ECONOMIC DEVELOPMENT

Telework a positive development in Employment pg 41

TECHNOLOGY Customers switching telephone services pg 40

SALES MARKETING

Our mobile lifeline pg 7 Christine Hamilton -

Managing Partner

ARCHITECTURE/ ENGINEERING pg 18 MANUFACTURING pg 20 www.prairiebizmag.com

Kari Newman Ness -

CEO

May 1st May 31st

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Contents

Volume 12 No. 4

From the Editor’s Desk

Sales and Marketing Our Mobile Lifeline

Women in Business

Matthew Mohr

Prairie News

Prairie People

Company Spotlight: Regency Hotel Management Regency Hotel Management has worked its way to being one of the top 100 management companies in the nation. And that is just the start.

Cover Story:Architecture and Engineering - LEED design facility construction increasing Businesses are always looking at the bottom line and when constructing a new building if there is a higher upfront cost for a LEED certified facility, many would balk at that. Now, things are changing.

Cover Story: Manufacturing Manufacturers bouncing back Manufacturing experts will tell you that the depth of recession in the industry depended on two things. One was the industry the manufacturer was serving and how they were prepared for it if something happened.

Cover Story: Advice from top women in Business. Prairie Business magazine is featuring women

who are leaders in the business communities around the three state region of North Dakota, South Dakota, and western Minnesota.

Community Spotlight: Bemidji, MN Gateway to Diversity! Bemidji, MN has more than just a timber industry. It has more than just a tourism industry.

Leadership and Management – Innovation: Smarter ways of doing things

Technology - Customers switching home and business telephone services

Economic Development – Telework a positive development in employment

Viewpoint

Money - Financial planning helps create ‘good fortune’

By the Numbers

4 Prairie Business

April 2011

Energy: Hydrogen has future potential Right now, production of ammonia used for fertilizer and oil refining are the two largest uses of hydrogen. However, many experts in the field believe that hydrogen can be used as a potential replacement for transportation fuels as a direct replacement or as a feed for fuel cells in electric vehicles.

Energy: Determining where oil revenues go is anything but simple While nearly every other state in the nation must determine what to cut from their budgets, North Dakota is faced with deciding how to spend the vast revenues generated from the oil industry. But legislators are finding that allocating money where it is needed most, and assuring substantial revenue for years to come is no small task.

Next Month In May, Prairie Business magazine will focus on local tourism industry, discuss how technology is developing an entrepreneurial spirit, and talk about how corporate events impact our region.

On the air Join Prairie Business magazine editor Alan Van Ormer and host Merrill Piepkorn on Tuesday, April 5 at 3 p.m. on any Prairie Public radio station to hear more about the April cover stories. To listen to Prairie Public, visit www.prairiepublic.org/radio/hearit-now.

On the cover Christine Hamilton, Managing Partner, Christianson Land and Cattle Ltd. Photo by Brian Rupert, 44Interactive. Kari Newman Ness, CEO, Newman Signs. Photo by John M. Steiner Photography, Jamestown, ND.

“The University of North Dakota is a great place for a faculty member to pursue research and scholarship. It allowed me to write Pathophysiology: A Clinical Approach, Second Edition with Carie Braun. The book is a learning tool, providing students with the knowledge necessary to understand complex conditions that they would encounter in their experiences as health professionals. Our intent was to illustrate concepts of disease that don’t just affect one organ or organ system, but that have effects throughout the body. This approach is designed to promote the clinical application of textbook knowledge in the care of people with conditions that are both complex and common, those that afHlict many North Dakotans and are signiHicant problems nationally. Conditions such as diabetes, obesity, Alzheimer’s disease, cardiovascular disease and cancer are but a few of the conditions that are prevalent in North Dakota, as well as in the rest of the United States.”

Cindy M. Anderson Ph.D., R.N., WHNP-BC, FAAN

Associate Professor of Family and Community Nursing Associate Dean for Research and Ph.D. Program Director Robert Wood Johnson Foundation Nurse Faculty Scholar

Creative. Innovative. Entrepreneurial. Spirited. AN EQUAL OPPORTUNITY/AFFIRMATIVE ACTION INSTITUTION

und.edu

From the editor’s desk

For daily business news visit prairiebizmag.com

An SBA Award Winning Publication

Conferences great place to network

Mike Jacobs, Publisher Alan Van Ormer, Editor Scott Deutsch, Sales Manager Tina Chisholm, Production Manager Beth Bohlman, Circulation Manager Kris Wolff, Layout Design, Ad Design

NATIONAL ACCOUNT SALES/SALES MANAGER:

Scott Deutsch

701.232.8893 Grand Forks/Fargo/Moorhead/northwestern MN

SALES:

Reaching out to businesses is done in a variety of different ways. One way that I see that seems to be appealing for the business community is being part of a conference where you are able to display a booth and showcase your business.

y most recent experience was at the Fergus Falls, MN 7th Annual Business and Community Expo. Prairie Business magazine had the privilege of displaying a booth during the Expo and that provided me even more of an experience than just attending. From my spot, I was able to talk to the many people that strolled through the building. Like the other 100 or so businesses that were present, it was an opportunity to tell a story to not only the business community, but also those who were able to find out something they didn’t know about a business. I’m sure that each business had a chance to hear about the relationships that have been developed over the years. From the magazine’s perspective, people were talking about stories they had read over the years, people who they have met that worked for the magazine, and were also able to provide ideas for future use. And I’m sure that happened to each of the other booths in the building. What a great way to find out about a business! The people that are stopping by these booths are the actual ones who read our magazine or deposit money into a bank or even get their backs adjusted in a timely manner. My thought is participating in conferences is about as grassroots as a business can get. Personally, I don’t see how businesses can go wrong being part of these experiences. This is a great way to promote a business. And there are many more of these types of events coming up in the future. Be sure to check out our Conference Connections website at www.prairiebizmag.com to see when the next one is coming. There is always a chance that I or someone from the magazine will see you there. PB

Brad Boyd

800.641.0683 Bismarck-Mandan/ west central ND/north central SD

John Fetsch

701.232.8893 Fargo/Moorhead/eastern ND/western MN

Jeff Hanson

605.271.4446 Sioux Falls/southern SD/southern MN

EDITOR: Alan Van Ormer Editorial Advisors:

701.232.8893 avanormer@prairiebizmag.com

Dwaine Chapel, Executive Director, Lake Area Improvement Corporation; Bruce Gjovig, Director, Center for Innovation; Lisa Gulland-Nelson, Communications Coordinator, Greater Fargo Moorhead EDC; Dave Haan, Director of Public Relations and Digital Development at Lawrence & Schiller; Dusty Johnson, Chief of Staff for South Dakota Gov. Dennis Daugaard’s office; Brecca Kramer, General Manager of Odney; Matthew Mohr, President/CEO, Dacotah Paper Company; Nancy Straw, President, West Central Initiative Prairie Business magazine is published monthly by the Grand Forks Herald and Forum Communications Company with offices at 808 3rd Ave. S., Ste. 400, Fargo, ND 58103. Qualifying subscriptions are available free of charge. Back issue quantities are limited and subject to availability ($2/copy prepaid). The opinions of writers featured in Prairie Business are their own. Unsolicited manuscripts, photographs, artwork are encouraged but will not be returned without a self-addressed, stamped envelope.

Subscription requests: Free subscriptions are available online to qualified requestors at www.prairiebizmag.com.

Address corrections: Prairie Business magazine PO Box 6008 Grand Forks, ND 58206-6008 bbohlman@gfherald.com

Online: www.prairiebizmag.com

6 Prairie Business

April 2011

Sales/Marketing

Mobile Lifeline Our mobile phones are no longer phones – they are powerful, micro-computers that happen to have a phone built into them. n many businesses verticals, the value and importance of a smartphone rivals or surpasses the desktop PC. With Verizon finally offering the iPhone on its network – and with Verizon 4G coming soon – mobile computing in our market is set to explode. Nielsen estimates that 31% of all mobile phone users today have smartphones. Thanks to players like Android, Apple and Facebook (yes, they are rumored to be developing their own smartphone), smartphone adoption shows no signs of slowing down. The recent uprisings in Egypt and the government’s knee-jerk reaction of “shutting off ” Egyptian mobile and Internet connectivity was fascinating to watch play out. While clever workarounds by the Egyptian people allowed Twitter and Facebook to keep us aware of the happenings on the ground, some argue that the revolt of the people was started by social chatter and the desire to unite “in real life”. And much of that chatter happened via mobile devices. Businesses thrive on mobile connectivity. The workplace is no longer just a brick and mortar presence, and this is especially true for those of us in sales and business development roles. Our office is in our cars, at the coffee shop, in the waiting room, and in front of the TV. What would happen should our connectivity be banished indefinitely? The people of Egypt – and most recently the people of Bahrain and Libya - experienced firsthand the chaos caused by an instant loss of cell and Internet connectivity. If you think it couldn’t happen here, you are probably right. But pondering the sudden absence of mobile technology reveals it’s worth to the marketplace. Could your business survive? Could you survive? The future is here, and the future is mobile. PB

PAUL TEN HAKEN

Let’s make our own positive indicators. The economy is made up of millions of businesses – large and small. But we’re here to focus on the most important one. Yours. Let’s seize opportunities and get growing. Together. Building your business. Strengthening our economy. Let’s take action. Your business. Our bank.

Call 1-800-908-BANK or visit Bremer.com.

prairiebizmag.com

Women in Business

Connie Ova: Enjoys making things happen and seeing results arious occupations throughout her business career have prepared Connie Ova to be the Chief Executive Officer of the Jamestown/Stutsman Development Corporation. Ova enjoys making things happen and seeing results and growth in the community. “We have so many opportunities that we have to let the world know about,” says Ova, who has been CEO since 2003. “I really enjoy working with sole proprietors and small businesses assisting them to see the possibility of making their dreams become a reality.” The Jamestown/Stutsman Development Corporation was organized to develop employment opportunities to improve business conditions and advance the interests of the City of Jamestown, as well as Stutsman County by implementing and sustaining an organized effort to attract new businesses and industry, support existing businesses and industry, and encourage new business starts. Jamestown/Stutsman Development Corporation’s focus is primary sector job creation. One challenge is that economic development can have such a broad definition that at times we try to be everything to everybody and that is virtually impossible to do so stress levels can get high, Ova explains. “Communication,

CONNIE OVA CEO, Jamestown/Stutsman Development Corporation

although tremendously improved, is always a challenge because it seems that no one knows what it is we do either until they need us or until they perceive we are doing something wrong,” she explains. “JSDC is funded 100 percent by taxpayer dollars and so we have a fiduciary responsibility to do our very best to do what’s right for the community and not everyone agrees with what’s right. On the personal side, taking time to do all that’s needed to do in this job cuts into family time and that’s one thing I don’t like about it versus your 8-5 position.” As economic development evolves, Ova is seeing more focus on the “softer” side of economic development. “Specifically, the need for economic development officials to provide assistance with community development on a larger basis than we have in the past although JSDC tries to stay within the parameters of “jobs” and primary sector business we have leaned somewhat into assistance with retail and service businesses using the Bank of North Dakota Flex PACE program,” she says. Ova states that lessons she has learned are being reinforced in her economic development role. “Nothing that is worth doing is easy. You can’t please all the people all the time,” she says. “Be fair and honest in all that you do.” Alan Van Ormer - avanormer@prairiebizmag.com PB

Business Advice

Employee statistics can help s a business grows or enters new markets, it is very hard to keep employee statistics comparable, and certain measures can make the expansion look bleak. Sales per employee, profit per employee, and average expense per employee are interesting numbers to evaluate and can shed light on prior decisions. In business school it is easy to put numbers together showing dramatic success. If an enterprise has 1,000 employees achieving certain revenue, bump the number to 1,500 employees and derive 50% more revenue and profit. In the real world of business, it is much harder to achieve the same relative performance, especially when you are a small business with few employees, but as a business matures, the ratios can be kept up and should be understood. A small two person business brings in $400,000 in profits. Wanting to expand, the owner faces the challenge

8 Prairie Business

April 2011

of hiring an additional employee which will cost the business salary, benefits, and other overhead. Can the owner assume profit will rise to $600,000 once the new person is hired? In all likelihood, the new person will cost the business initially, not generate immediate profits. This dilemma is faced by nearly every business at one time or another. Of course, the expectation must be once the new third person is fully trained and able to do the job, profits will go up. But how long will it take? A much larger business can better expand hiring and expect profits in return, but regardless of what kind or size of business, MATTHEW D. people statistics are important to watch, understand, and MOHR measure. Just because you have a certain number of CEO, employees doing a certain volume, you cannot assume a Dacotah Paper Company multiple of your employment base will automatically mmohr@dacotahpaper.com. generate a multiple of your revenue. PB

prairiebizmag.com

Prairie News

Press releases and photos about business news and events in North Dakota, South Dakota and western Minnesota can be e-mailed to avanormer@prairiebizmag.com for consideration

SBA ANNOUNCES GRANTS AVAILABLE FOR STATE TRADE, EXPORT PROMOTION

MILLION DOLLAR GRANT AWARDED TO START-UP COMPANY

States can apply for grants from the U. S. Small Business Administration to support efforts to increase exporting by small businesses. The State Trade and Export Promotion (STEP) pilot grant initiative is authorized to provide up to $90 million in grants to states over the next three years. The STEP pilot program is aimed at increasing the number of small businesses that want to export and increasing the value of exports for those small businesses that currently export.

The National Institutes of Health has awarded a twoyear $1.08 million competitive grant to Dr. Brian Slator, North Dakota State University computer science professor for his faculty start-up venture, WoWiWe Instruction Co. The group develops internet-based educational software. The Small Business Innovation Research grant through NIH’s National center for Research Resources will be used to develop a multi-user virtual biology environment for discovery-oriented science education.

MAILWAY PRINTERS USDA CHANGES VALUE-ADDED PRODUCER GRANT PROGRAM USDA Rural Development has announced changes to the Value Added Producer Grant program that will provide additional opportunities to beginning and socially disadvantaged farmers. The change will assist independent producers, farmer and rancher cooperatives, agricultural producer groups, and will support local and regional supply networks. Revisions include providing up to 10 percent funding to beginning farmers and socially disadvantaged farmers and ranchers, providing up to 10 percent funding to local and regional supply networks that link producers with companies marketing their products, giving priority for grants to beginning farmers, socially disadvantaged farmers and ranchers, and operators of small and medium-sized family farms, and extending grant eligibility to producers who market their products within their state or within a 400-mile radius.

BISMARCK STATE COLLEGE NUCLEAR POWER TECH PROGRAM FIRST FOR INDUSTRY CERTIFICATION Bismarck State College’s Nuclear Power Technology program was accepted earlier this year as the first online program approved by the Nuclear Uniform Curriculum Program (NUCP) for the non-licensed operator track. Students completing the associate degree in Nuclear Power will receive a nuclear industry standard certificate and can substitute education for training at a nuclear facility. The NUCP ensures the workforce is trained and in place at the right time by organizing industry partnerships with two-year colleges. NUCP is managed by the Nuclear Energy Institute (NEI), which approved BSC as a Non-Licensed Operator program. As part of the NUCP process, BSC was required to obtain a Primary Utility Partner for the nuclear program. The college affiliated with Exelon Corp., the largest owner/operator of nuclear plants in the United States. Without a Primary Utility Partner, students could not receive a nuclear industry standard certificate. 10 Prairie Business

April 2011

BRINGS

NEW TECHNOLOGY TO REGION

Mailway Printers has taken the lead in digital printing with the acquisition of a Xerox Color 800 Press. The device is the first of its kind in South Dakota, according to Terry Nelson, president of Mailway Printers. What makes the Xerox 800 dry ink press unique is its ability to print a clear, dry ink that creates a spot varnish effect on the final product. It’s the first-ever digital press in the region able to provide that type of high-end production value. The Xerox 800 can print on paper up to 13” x 19,” but unlike other digital devices on the market today, Mailway’s new Xerox 800 press can print on paper as heavy as 130lb – cover something very unusual for digital printing.

NORTH DAKOTA 2010 EXPORTS UP 15 PERCENT North Dakota’s exports increased from $2.2 billion in 2009 to $2.5 billion in 2010, a 15 percent increase, with U.S. exports increasing 21 percent over the same period. The top North Dakota exports in 2010 were front end shovel loaders ($246 million, a 55 percent increase over 2009), crude oil ($232 million, an 8 percent increase over 2009), and canola oil ($204 million, a 124 percent increase over 2009.) Canada continues to be North Dakota’s number one export destination, with a record 62 percent of North Dakota’s exports going to Canada (1.6 billion.)

SBA ANNOUNCES GRANT TO SMALL BUSINESS DEVELOPMENT CENTERS Small business in North Dakota will soon have greater access to critical resources to help them start or grow their businesses and create jobs with the help of a $325,000 grant to SBA’s North Dakota Small Business Development Center. The funding was provided under a key provision of the Small Business Jobs Act of 2010 signed by the President last September, which provided $50 million in grants to SBA’s Small Business Development Centers across the country to support job creation and retention within the small business community by providing indepth business counseling and advice to entrepreneurs and small business owners.

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Prairie News

Press releases and photos about business news and events in North Dakota, South Dakota and western Minnesota can be e-mailed to avanormer@prairiebizmag.com for consideration

NETWORK CENTER ELITE TECH COMPANY

COMPANIES ENTER PARTNERSHIP

Network Center, Inc. has been named to the inaugural CRN Tech Elite 250. The Tech Elite 250 serves as the industry’s definitive list of VARs with both deep technical expertise and premier certifications. Network Center, Inc. has been recognized as a best-of-breed integrator who has invested in technical know-how and earned premier certifications in the area of infrastructure for North American Customers. Network Center, Inc. has been providing products, service, support, and expertise to clients since 1986.

Multiband Corporation has selected InterceptEFT to provide processing services for customer payments nationally. Under the agreement, InterceptEFT will collect and process electronic payments for more than 40,000 Multiband partners and subscribers across the nation. As part of a strategic partnership, Multiband is DIRECTV’s largest master system operator in multiple dwelling units, and also services 20 percent of all DIRECTV’s single-family households.

MADC WEBSITE FOCUSES ON EMPLOYERS, EMPLOYEES

TECHNOLOGY AND EDUCATION CENTER BEING COMPLETED LATER THIS YEAR

The Minot Area Development Corporation launched a new website that focuses on bringing job seekers and employers together. The website is a free service to businesses and provides direct access to skilled job applicants in various job classifications living across the United States. Funding was provided by the Partners in Marketing Grant, available through the North Dakota Department of Commerce. MADC’s workforce development website was developed to streamline the hiring process and provide community information and job opportunities to out of area job seekers. In 2010, workforce development staff collected and posted 960 resumes on the MADC website.

A 100,000 square foot St. Alexius Technology and Education Center has been under construction and is expected to be completed in December. The facility will house non-patient care departments and free up space for more clinical services on the main campus in Bismarck, ND. “We wanted to incorporate innovative state-of-the-art ‘Green’ technology,” states Andrew L. Wilson, CEO and President of St. Alexius. A recent Department of Energy Technical Study estimated energy savings potential and simple payback periods for 15 technology options. St. Alexius Technology and Education Center is incorporating the top four of these technologies the DOE evaluated. The estimated return on investment is four years or less for advanced controls and the ground source geothermal system with a dedicated outside air system and chilled beams having an immediate payback.

USD FOUNDATION MAKES PORTFOLIO GAINS WITH 2010 INVESTMENTS Despite a worldwide downturn in the economy last year, The University of South Dakota Foundation found a way to maximize investments and announced that its pooled endowment portfolio, which totals $140 million, had a one-year return of 16.4 percent at the end of 2010. According to the Independent Consultant Cooperative (ICC), this return ranks The University of South Dakota Foundation’s portfolio in the top one percent of the ICC’s 22,000 client portfolios. The ICC also ranked The Foundation’s 10-year return of 7.2 percent also ranks in the first percentile while the five year return of 6.3 ranks in the ICC’s third percentile.

NORTHLAND RECEIVES GRANT Northland Community and Technical College has received a $150,000 grant from the Otto Bremer Foundation for health care simulation training. Northland will use the money to purchase a high quality anatomical manikin and associated equipment. Paramedic, nursing and respiratory therapy students will use the manikin initially, with expansion to other disciplines to follow. Northland has over 2,000 students enrolled in nursing and allied health programs. St. Paul-based Otto Bremer Foundation awards grants for community improvement in Minnesota, Wisconsin, and North Dakota. 12 Prairie Business

April 2011

NORTH DAKOTA REPORTED AN

INCREASE OF

8,900 JOBS (PLUS 2.4 PERCENT) IN 2010. IN THE COMPARISON, THE U. S. PERCENT CHANGES IN 2009 AND 2010 WERE MINUS 4.4 PERCENT AND MINUS 0.8 PERCENT, RESPECTIVELY. SOURCE: LABOR MARKET INFORMATION CENTER

Prairie People

DAVE SAUER

Please e-mail photos and press release announcements of hirings, promotions, awards and distinctions received by business leaders in North Dakota, South Dakota and western Minnesota to avanormer@prairiebizmag.com for consideration.

SAUER DIRECTING NEW ADMINISTRATION DEPARTMENT

SCHILL BECOMES VICE PRESIDENT OF PRAXIS STRATEGY GROUP

Dave Sauer, formerly manager of process operations at the Great Plains Synfuels Plant, will direct Basin Electric’s new Administration department, including both parent and subsidiary human resources, information systems and telecommunications (IS&T), corporate services, internal auditing, and procurement divisions. Basin Electric CEO and General Manager Ron Harper’s appointment of Sauer follows a realignment of duties and responsibilities in several areas of the cooperative completed earlier this year.

Mark Schill has been promoted to vice president of the Praxis Strategy Group. Schill will expand PSG’s economic and demographic analysis services for communities across the nation. Through his 11 years of service at PSG, Schill has provided expertise in strategic and business planning, marketing strategy and demographic research, as well as developing web sites and managing an online community.

MARK SCHILL

NORTHERN HILLS HOSPITAL CEO RECEIVES AWARD

ALTRU APPOINTS CHIEF OPERATING OFFICER

BRAD WEHE

Brad Wehe is the Chief Operating Officer for Altru Health System. As COO, Wehe is responsible for the coordination and oversight of daily operations of the health system. He participates with the President, Chief Executive Officer, and Board of Directors in charging the course of the health system in meeting community needs.

SHERRY BEA SMITH

SIOUX FALLS ECONOMIC DEVELOPMENT GROUP NAMES LEADER

JACK HOPKINS

Jack Hopkins, President and CEO of CorTrust Bank, N.A., a $440 million familyowned, South Dakota based, independent community bank, has been selected as the new board chair of the South Dakota Development Foundation. Other leaders on the executive committee are Fred Slunecka, Avera Health, vice chair; Mark Mickelson, Mickelson & Company, LLC, secretary; Tom Simmons, Midcontinent Communications, treasurer; and Cathy Clark, Wells Fargo, serving as past Chair.

Sherry Bea Smith, Chief Executive Officer at Lead-Deadwood Regional Hospital, was named the American Hospital Association’s South Dakota 2010 Grassroots Champion. The Grassroots Champion award singles out one hospital leader from each state who, over the previous year, effectively delivered the hospital message to elected officials, helped broaden the base of community support for hospitals, and advocated tirelessly on behalf of patients, hospitals, and the community served by those hospitals

NDSCS PRESIDENT APPOINTED NATIONAL COALITION OF CERTIFICATION CENTERS BOARD MEMBER

DR. JOHN RICHMAN

North Dakota State College of Science President Dr. John Richman has been named Trustee of the Board of National Coalition of Certification Centers (NC3), a coalition of education and business partners working to develop standardized, industry-driven certifications across the transportation, energy, and aviation industries. The College has worked in conjunction with NC3 since its establishment in 2009 and serves as one of the 11 Leadership Schools.

AVERA SACRED HEART HOSPITAL NAMES TWO DIRECTORS Avera Sacred Heart Hospital, located in Yankton, SD, has named two directors to manage departments within the health care network. Renee Tereshinski, RN, was named Director of Women’s and Children’s Services at Avera Sacred Heart Hospital, while Kelly Schott, Pharm.D. was added as the Director of Pharmacy at Avera Sacred Heart Hospital. Tereshinski has been working as a nurse for the hospital for 17 years, while Schott worked at Carson Regional Medical Center in Carson City, NV, before accepting the position at Avera Sacred Heart Hospital.

RENEE TERESHINSKI, RN 14 Prairie Business

April 2011

KELLY SCHOTT, PHARM. D.

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Company Spotlight

Regency Hotel Management

Plymouth Crowne Plaza (photo courtesy of Regency Hotel Management)

Success in hotel management Regency Hotel Management has worked its way to being one of the top 100 management companies in the nation. And that is just the start. Many in the company see opportunities that can be taken advantage of in the future. loriann Kueter, Corporate Director of Sales and Marketing for Regency Hotel Management in the headquarters in Sioux Falls, SD, says that there are a couple of exciting opportunities for the future; one being the development of a new product hotel brand. “In addition, because of the effect of the economic slowdown, we are looking at emerging in the high barrier slower markets,” she states. Formed in 1965, Regency Hotel Management, LLC and its affiliates currently own and/or manage more than 50 hotel and 15 restaurant properties in 11 states. With more than 70 years combined hospitality experience within the management team, their expertise includes hotels, resorts, indoor water parks, convention centers, full-service restaurants, and concessionaire management of state parks, which include cabin rentals and a variety of outdoor recreational activities. Although Regency Hotel Management operates under various franchises including Intercontinental Hotel Group-Crowne Plaza, Radisson, Hilton, Marriott, ClubHouse and Best Western, and several independent hotels and resorts, they have a company loyalty program that is offered at the majority of their hotels and resorts. Their STAR Business Program is an easy and money-

16 Prairie Business

April 2011

saving hotel program that is available to companies and individual travelers. STAR members receive automatic hotel discounts plus a list of extra benefits, such as last room availability at the discounted room rate, VIP guest check-in and complimentary bottled water in their room. Management services include full-service operations, sales and marketing, accounting, financial management, feasibility consulting, asset management, and acquisition management. The company’s hotels and resorts are primarily full-service that include guestrooms and suites, conference centers, restaurants and bars, health and fitness centers, as well as a variety of outdoor recreational facilities; tennis courts, swimming pools, horseback riding, golf courses. “We’d be remiss not to mention that at Custer State Park Resort, Regency excels in management of entertaining family fun also, such as buffalo jeep safari rides and chuck wagon cookouts at Custer State Park.” Kueter explains. “Through the years, Regency Hotel Management has learned how to manage a variety of facilities, large and small, and activities. There are more than a dozen properties located in South Dakota and a half dozen combined in North Dakota and Minnesota. The remainder of the properties is spread out throughout the mid-section area of the United States.”

Company Spotlight

LOCATIONS

Late in 2010, Regency Hotel Management purchased the Historic Grand Lake Lodge in Grand County, CO. All 56 renovated cabins, restaurant, bar, gift shop, and recreational activities will be open for tourism in 2011 and reservations are being taken now. In addition, Regency Hotel Management just opened the Best Western Plus Bloomington Hotel at the Mall of America and partners with the Mall of America in attracting visitors to Bloomington through coop marketing. Also, the Pierre ClubHouse Hotel & Suites is slated to open in Pierre, SD in December next to the Best Western Ramkota Hotel. Much of the success of the company revolves around the employees and the fact that Regency Hotel Management is able to retain many of its key employees. There are more than 5,000 employees in the company, with more than 4,900 located in the hotel and resort properties. In addition, it also helps that Regency Hotel Management owns its own properties and also manages properties for third party owners. Our philosophy for success in third party management is “We manage all properties as our own in order to generate the cash flow

necessary to make them financially viable,” Kueter states. One of the things that make Regency Hotel Management unique is that it operates with little debt. “The economic slowdown did not affect us as much as it did so many other hotel companies,” Kueter explains. Prior to the economic slowdown, Regency Hotel Management was able to sell 15 older properties. In addition, Kueter says the hotel industry closely follows the economy. “The hospitality industry has been the most erratic since our inception 45 years ago,” she says. Possibly the most significant change is that the company has started working with more concessions and management of state and national parks. For instance, Regency Hotel Management manages Sylvan Lake Lodge, State Game Lodge, Legion Lake Lodge and Blue Bell Lodge; all located in Custer State Park in the Black Hills of South Dakota. Also, Kueter states that Regency Hotel Management has implemented a multifaceted green program on the properties to minimize the footprint that the company leaves behind. Alan Van Ormer - avanormer@prairiebizmag.com PB

South Dakota properties: The Lodge at Deadwood, Deadwood, SD Sylvan Lake, Custer State Park State Game Lodge, Custer State Park Legion Lake Lodge, Custer State Park Blue Bell Lodge, Custer State Park Rock Crest Lodge in Custer, SD Best Western Ramkota Hotel, Aberdeen, SD Best Western Ramkota Hotel, Rapid City, SD Best Western Ramkota Hotel, Pierre, SD Best Western Ramkota Hotel, Sioux Falls, SD ClubHouse Hotel and Suites, Sioux Falls, SD Best Western Ramkota Hotel, Watertown, SD North Dakota properties: Best Western Ramkota Hotel, Bismarck, ND Radisson Hotel, Bismarck, ND Minnesota properties: Best Western Plus Bloomington Hotel at Mall of America The Hotel Ivy, Minneapolis, MN Arrowwood Resort and Conference Center, Alexandria, MN Hilton Garden Inn, Mankato, MN Crowne Plaza Minneapolis West, Plymouth, MN Other Regency operated properties include: Best Western Ramkota Hotel, Casper, WY Arrowwood Resort and Conference Center, Okoboji, IA Bridges Bay Resort, Arnolds Park, IA Marina Inn and Conference Center, Sioux City, IA Park Place Hotel, Traverse City, MI ClubHouse Inn & Suites, Albuquerque, NM ClubHouse Inn & Suites, Topeka, KS ClubHouse Inn & Suites, Chicago (Westmont), IL Grand Lake Lodge, Grand Lake, CO

prairiebizmag.com

ARCHITECTURE

COVER STORY

LEED design facility construction Businesses are always looking at the bottom line and when constructing a new building if there is a higher upfront cost for a LEED certified facility, many would balk at that. Now, things are changing. anapathy Mahalingam, Associate Professor in the Department of Architecture and Landscape Architecture at North Dakota State University, says the construction of LEED certified buildings is definitely increasing. “They are convinced there will be savings,” he says. Leap Chear, LEED Architect for EAPC Architects Engineers, adds that it is estimated that one in 10 clients when they come in to talk to architects bring up LEED certification or LEED criteria. Chear, who is also the current treasurer of the North Dakota Chapter of the United States Green Building Council, states that on a global scale, green buildings are gaining ground. “In North Dakota, we are starting to see more projects that are going this route,” he explains. “A lot come from the owners who are being more educated and more aware of different building methods and materials. The main savings for owners who are operating facilities are reduced energy consumption, water efficient fixtures, energy efficient light fixtures, low VOC materials, and that feelgood feeling that comes from being good stewards of our planet.” A LEED certified building is better designed to be responsive to the environment by using natural materials and natural resources pertaining to different criteria that includes Sustainable Sites, Water Usage Efficiency, Energy and Atmosphere, Material Resources, Indoor Environmental Quality, Innovation and Design Process, and Regional Priority Credits. There are also four different certifications – LEED certified, LEED Silver, LEED Gold, and LEED Platinum. Credit points are attributed to the different levels: Certified (40-49), Silver (50-59), Gold (6079), and Platinum (80+). The average increase in cost for LEED certified buildings is $2.50 per square foot. However, Mahalingam adds that the savings will wind up at $6.50 per square foot. Mahalingam says the owners will see immediate savings, but those savings also depend on size of building, type of building, and the systems incorporated in the building. He also states that it is important to remember that LEED certification is saying that the architects have used sound design practices when designing the building. “What has changed is the accountability for performance for the buildings beyond cost, construction, and safety,” he explains. April 2011

18 Prairie Business

In North Dakota, Renaissance Hall, the facility in which Mahalingam is located, is the first LEED certified facility designed by Michael J. Burns, an architect in Moorhead, MN. There are at least three LEED certified projects in North Dakota with at least four or more projects to be newly certified next year. Henry Carlson Company is a general contractor based out of Sioux Falls, SD that does work in the following market segments: health care, commercial, education, cultural, retail, and industrial. There is also an office in Aberdeen, SD, and on April 1, the company opened an office in Fargo, ND. Meredith Larson, who is LEED accredited, has seen an increase in LEED facilities being constructed in South Dakota. “The projects we have been involved with so far are projects where the owners think this is a wise investment,” he says. These projects include Heartland Consumers Power District in Madison, SD and the Rural Learning Center in Howard, SD. “Private owners want to do LEED buildings. They have done their homework and they have determined this is a good route for them to go,” Larson explains. “In the case of Heartland, they wanted to provide an example to their customers.” In addition, the state of South Dakota passed legislation a couple of years ago requiring all new state developments to be LEED Silver. One project that Henry Carlson worked on is the Wellness Center at the University of South Dakota in Vermillion, SD. “On the public side, there is a consciousness at the state – particularly in the Office of State Engineer – want to improve the quality of their buildings in terms of energy consumption and design,” Larson states. Sean Irvin has been a Principal and an architect with TSP in Sioux Falls for 24 years. In the company’s eight locations across the upper Midwest, Irvin states that the company has had a long tradition of sustainable design that started before the latest trends. TSP has worked on the Honey Creek Resort in Iowa, which is one of the first hotels in the region to attain LEED rating, as well as a school in Minneapolis and multiuse office in Rochester, MN. Both attained LEED Silver. “More clients than ever have an active interest in (continued on page 20)

prairiebizmag.com

ARCHITECTURE

COVER STORY (continued from page 18)

sustainability and want to at least take sensible advantage of the long-term cost savings it can provide,” Ervin states. “When people see the cost of the LEED documentation process, it may seem daunting, but it is a proven process that most people have heard of and shows a commitment to the concepts that LEED promotes.” Ervin adds that the costs for the facility are worth it down the road when they save significant energy dollars over the life expectancy of the building, improve user comfort of the occupants of the building, and the sense that an owner has taken a step beyond just recycling in order to minimize their carbon footprint. “The most measurable savings will be in energy savings over the years of owning the building,” Ervin explains. “This is coupled with an extra level of operationalizing the mechanical and other systems of the building, “he says. “This commissioning process verifies that the goals of the facility are being met and works to make all of the systems work in concert to achieve those goals. Of course, there are a number of less measurable goals, but businesses still notice the difference in their employees and other users of their facility as well.” Besides generating a payback, there are several reasons why LEED experts feel the higher upfront costs are worth it in the long haul. These include stewardship issues, as well as water and energy conservation. A lot of the credits are related to heating, lighting, cooling, and air quality. In addition, companies are finding and reusing materials. For example, Heartland Consumers Power District found old bleacher seatings and recycled them into a wood

ceiling. Another example, in Howard, materials from the former American Legion building and gymnasium were salvaged for reuse in the project. Also, the upfront costs depend on the type of projects, as well as the certification level that businesses are looking at. “There have been studies that as little as three to five percent upfront costs may just be looking at the certification level,” Chear says. Chear believes that a big issue is that energy consumption is huge. “Owners are making more of a demand upfront in the design stage,” he explains. “More prominent projects across the United States extensive studies seeing that operating costs is substantial savings. Upfront costs pay for that in 3-4 years depending on the size of the project and implemented systems.” Alan Van Ormer - avanormer@prairiebizmag.com PB

MANUFACTURING

COVER STORY

Manufacturers bouncing back Manufacturing experts will tell you that the depth of recession in the industry depended on two things. One was the industry the manufacturer was serving and how they were prepared for it if something happened. “

ot all companies were prepared,” says Bob Kill, President and CEO of Enterprise Minnesota. “Agricultural products and food processing and packaging did well. The building trade suffered and hasn’t come back yet.” Dycast Specialties Corporation, based in Starbuck, MN, is one manufacturing company that was rocked by the downturn but has quickly made a recovery. The company that produces die castings for Ordinance, Telecom, Datacom, Hand tools, Electronics, and Electric Motors industries. They saw recession impact at least six months before others. And on the other side, started moving

forward six months before other companies started to come out of the recession. “The depth of the recession was astonishing,” says Jon Haavig, President of DyCast Specialties. “In August 2008, we had to take some serious actions for cutting back staff. That was the initial shock for people. When we were reacting to the initial downturn, most other area manufacturers were still doing pretty good business.” CFO Ed Bolas adds that they were seeing signs of a recession because orders were slowing down and customers were lowering their inventories to the bare minimum. “February 2009 was so slow we shipped a week’s worth (continued on page 22)

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April 2011

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COVER STORY (continued from page 20)

MANUFACTURING

of product for the whole month,” Bolas states. Then in July 2009, they saw an 80 percent increase in sales, but Haavig’s belief is that was the final burn of customer inventories. July and August 2009 were both good months, and then there was a 10 percent pullback in September. There was steady growth throughout the rest of the year and 2010 continued strong. In 2010 there were $6.4 million in sales and the employee base bumped up to 43 FTEs.

BAKER BOY NOT AS IMPACTED Baker Boy in Dickinson, ND, is one manufacturer that was not as impacted by the recession. “We are blessed to be in the food business,” says Guy Moos, President of Baker Boy. “Even during a recession, many food manufacturers including Baker Boy continued to grow.” Moos adds that because the company makes basic everyday bakery products that bakeries, schools, restaurants, and C-stores use each day, it did not see a significant impact. Baker Boy markets frozen bakery products across most of the northern part of the country to foodservice, bakeries, convenience stores, and other food manufacturers. The company has been in business for 56 years, has revenues of $35 million, and continues to experience steady growth in sales. “Our two greatest challenges are availability of labor in southwest North Dakota and the dramatic increase in commodities,” Moos states. “To help meet increased product demand while working in an environment of tight labor, we are investing in a $13 million expansion focusing on greater automation.”

RECESSION STRIKES BOTH SIDES OF TRUCKING BUSINESS

Brandon, SD on both sides of its business. The company, which manufactures quality truck accessories, is tied to both the automotive and heavy duty truck business. Luverne’s response to the economic conditions over the past three years has been to expand manufacturing capability by adding new equipment to increase productivity. Luverne has actually increased its margins each year since 2008. “Starting in 2008, when our business was slowing down due to the declining economic conditions facing the automotive industry, Luverne began a program of focusing on increasing its market share,” says John Schulzetenberg. “As the market improved in 2010, the increased market share helped increase business significantly.”

INDUSTRY HELPS MANUFACTURERS BECOME PRODUCTIVE Industry groups like Dakota MEP, based in Bismarck, ND, spend much of their time working with manufacturing companies to be productive. Eureka ‘Jump Start’ is a program that helps companies taking action on innovation to grow and become more profitable. MEP has partnered with Eureka Ranch, the leaders in growth and innovation with clients quantified over $2.5 billion in new ideas and improved existing ideas, to bring the program to companies in the United States. MEP has also partnered with RTI International, one of the world’s leading research institutes, to help with ‘Technology Scouting.’ ‘Technology Scouting’ is a service to search outside a company’s normal channels to find solutions for a specific unmet technology-based need. Alan Van Ormer - avanormer@prairiebizmag.com PB

The recession did hit Luverne Truck Equipment, Inc. in

WOMEN IN BUSINESS

Eric Praus, Baker Boy

COVER STORY

Framing Success: Advice from top women in business Prairie Business magazine is featuring women who are leaders in the business communities around the three state regions of North Dakota, South Dakota, and western Minnesota.

CHRISTINE HAMILTON is a managing partner for Christianson Land and Cattle Ltd, located near Kimball, SD. Hamilton credits her mother as being a far-sighted, practical woman who instilled qualities that helped her in her career, as well as encouraged her to broaden her horizons. “Attitude is everything. My advice would be to always try to be willing to learn new things, willing to go the extra mile, and be friendly along the way,” she adds. “Develop leadership skills whenever you can, as we are never done with becoming better. And finally, give back, or pay it forward. It’s the most fulfilling way to live, I’ve discovered.”

(continued on page 24)

22 Prairie Business

April 2011

SANFORD ADDITION TO UNION HOSPITAL MAYVILLE, ND

“Getting LEED Certified makes us environmentally friendly and good citizens to the environment. It is also a huge savings in energy costs. It’s nice to set an example.” Phillip Siek, Sanford Health With JLG, one of the Nation’s Top Performing Hospitals* performs even better. *According to a 1996 HICA Study.

HEALTHIER

HEALTHCARE W

prairiebizmag.com

WOMEN IN BUSINESS

COVER STORY (continued from page 22)

KARI NEWMAN NESS is the CEO of Newman Signs in Jamestown, ND. Her family and life’s experiences have shaped who Ness has become. “I’ve witnessed the necessary work ethic, the courage and risk-taking, and the interaction with employees, customers, landowners, bankers, lawyers, politicians and all the other people who help run a successful business,” she says. “My mom raised her five children by example. Confidence, kindness, and sharing whatever gifts you have are important to her.” Ness states that it is important to be a solid employee. “By that I mean finish what you start, say what you mean and work hard. Be that person who can be counted on,” she explains. “The early years of your careers will go by quickly, be patient. If you are good at what you do you will be rewarded.”

LISA CARLSON is the CFO of Sanford Health in Fargo, ND. In her career in the health care industry, Carlson has had a variety of different people throughout the years including her mother, father, and sister, as well as other significant women and men that she have worked with during the career. “They have all made impressions on me,” she says. One thing she recommends is to do a job that is enjoyable and enjoy the people that you work with. “You are going to spend so much time with the people you work with,” she states. In addition, eventually young women will have families. “It is important to figure out how she (and her spouse) is going to do that together,” she adds. “Also, take advantage of opportunities that are presented to you, advance your skills and experience, and learn to recognize good leadership when you see it.”

MELISSA LAGE is the Chief Marketing Officer for SJE-Rhombus in Detroit Lakes, MN. Lage says her parents valued hard work, honesty, and integrity. “SJE-Rhombus’ employee-ownership plan honors these values since each employee has a personal stake to work together to provide excellent products and service to our customers,” she says. Her advice to young women coming into the business profession would be to believe strongly in providing solutions for your customers. “When you solve a customer’s pain you build long-lasting relationships!” she exclaims.

MICHELLE LINTZ is the Executive Director and Senior Vice President of the Rapid City Convention and Visitors Bureau in Rapid City, SD. Lintz credits Julie Jensen who was the Executive Director of the Convention and Visitors Bureau when she started in the business. “She encouraged me to apply for her position when she retired to raise her children. I will always acknowledge her as one that taught and demonstrated to me the basics and value of this industry.” Lintz gives three pieces of advice, which she also hopes has been conveyed clearly to her daughters: communicate, be kind, and give 100 percent. “Customer service is an extremely significant component in this business. People need attention and information about your services.” MARY JO VAN HORN launched BluHorn, LLC in March 2009 out of Bismarck, ND. Van Horn credits Wayne Kranzler, one of the owners of KK Bold, as someone that has hugely influenced her career. “I learned a lot from Wayne, especially the importance of media/agency relationships. He introduced me to the media business and for that, I will be forever grateful.”She’s also influenced by Tami Rust, Senior Vice President of Marketing & Communications for Starion Financial. Her best advice for women entering today’s profession is researching and networking. “Reach out to business owners, especially women owners and listen to their challenges and success stories. Most businesses take longer and cost more, so plan for the best but be prepared for the worst. And never give up.”

Nationally,

34% of all businesses are at least

CATHY CLARK is the President of Wells Fargo Bank in Sioux Falls, SD. Clark states her parents believed in a strong work ethic and education,” she says, adding that throughout her 30-year career in banking, she had a couple of mentors that she observed and countless others throughout that community that she admired. Her advice to those women entering the business profession is that you cannot have it all and that is OK. “Your priorities may change as your own dynamics change with family and work-life balance,” she adds. “Knowledge is power when it is shared, so regardless of where you are, constantly challenge yourself to grow and learn. Ask someone to mentor you or ask for their advice. Women have a wonderful perspective and willingness to share.” PB

51% owned by women. 24 Prairie Business

April 2011

prairiebizmag.com

Community Spotlight

Bemidji, MN

Gateway to Diversity! Bemidji, MN has more than just a timber industry. It has more than just a tourism industry. Leaders of the community, with a population of more than 13,000 people and more than 100,000 in a 50-mile radius in north central Minnesota, see it as more of a diverse community and a strong regional hub.

117

emidji has been successful in forming collaborations and partnerships to further develop our status as a successful regional hub,” says Lori Paris, President of the Bemidji Chamber. Bemidji has been defying state and national trends. During a time that most sales tax revenues are decreasing, Bemidji’s is increasing. The sales tax revenue was up 5.2 percent in 2009 and is up 5.4 percent for 2010. More than a regional center, Bemidji offers a venue few can match with the Mississippi River, Lake Bemidji, and the natural beauty of the area. March 1, North Country Health Services and Sanford Health announced final approval of bringing the two organizations together. Paul Hanson, President of Sanford Health of Northern Minnesota, says the diverse workforce provides approximately 1,300 jobs, as well as a mix of job opportunities for individuals with all levels of experience and training. “Health care enterprises generally offer a good wage and benefit package that supports families and economic strength throughout the region,” he says, adding that the vision for Sanford Bemidji’s future is to become the region’s premier innovative rural health care delivery organization. “This will mean significant investment in new programs and services, technology and buildings. It will also mean expanding our physical facilities and our workforce in order to support a growing scope of services reaching more patients throughout the region,” he explains. “Sanford Health has committed $70 million investment to the health care system in Bemidji in the next

26 Prairie Business

April 2011

“

MAJOR EMPLOYERS: SANFORD HEALTH

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800 BEMIDJI STATE UNIVERSITY

550 BETRAMI COUNTY

360 JOHANNESON’S INC.

251 KNIFE RIVER MATERIALS

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ten years. In addition, Sanford has committed an initial $5 million gift to our local Hospital Foundation. This investment will have a major impact on the local economy and the community’s health and wellbeing.” In 2009, Bemidji established the ‘Central City Plan’ to develop a realistic vision for the downtown area and the “Village at South Shore.” It is a 140-acre redevelopment with more than a mile and a half of lakeshore and includes amenities such as boat launch, public beach, and Paul Bunyan all season trail along the lakeshore. “Village at South Shore” also includes the Sanford Center, as well as several hotels and more to come in the future. The 185,000 square foot facility features a 4,700 seat hockey arena, as well as a 10,000 square foot ballroom and two 2,000 square foot meeting rooms. Bob LeBarron, Executive Director of the Sanford Center, says the hope is that by 2014 they will not need the budgeted subsidies from the city of Bemidji to operate the facility. “It has already had an impact,” he adds. There have been special events nights, hockey matches, concerts and during that time LeBarron says the restaurants and other facilities in the community are full. “I only see that continuing to happen more so in convention side as south side development continues,” he says. There are plans for a privately-owned hotel attached to the Sanford Center that is expected to break ground early summer and be completed within a year. “The arena portion of Sanford Center is the quality of life portion of building,” LeBarron states. “When the conventions start coming in two to four years down the road that will bring new people into town. It will also mean that businesses will need to hire more people and

need to expand services to accommodate the incoming people from out of town.” Sanford Center is the home of Men’s & Women’s Div I WCHA hockey program. More than 5,000 students attend Bemidji State University, a campus that offers more than 65 majors and pre-professional programs. Northwest Technical College provides more than 40 different programs including new ones in environmental technology, wind energy, and occupational safety. “Bemidji State University’s economic impact on the community is estimated at more than $150 million a year,” reports William Maki, vice president for finance and administration at the university. “That’s a direct result of spending in the community by the university, its students, and campus visitors.” Maki notes that over 2,000 jobs, both on campus and in the community, are a result of Bemidji State’s presence in the community. Bemidji State successfully partners with the city as well as with area business and industry to help spur growth. “The city of Bemidji and the university have successfully partnered to stretch resources and provide the region with facilities and services it might not otherwise have,” Maki says. The 250-acre Bemidji Industrial Park, owned by the Bemidji Development prairiebizmag.com

Community Spotlight

Bemidji, MN

airport runways, navigational aides, lighting, and aprons. There is also an $8.9 million passenger terminal expansion underway. “The timber industry plays a significant part of our economy in the Bemidji area,” states Marcus Wiechmann, Executive Director of the Joint Economic Development Marcus Wiechmann Paul Hanson Denelle Hilliard Lori Paris Commission. Executive Director President Executive Director President Pete Aube, Lumber Mill Joint Economic Sanford Health of VisitBemidji Bemidji Chamber Manager for Potlatch, says that Development Commission Northern Minnesota Bemidji is still the lumber capital of Minnesota. The industry has a Corporation, is very well developed. Now, the city and the Bemidji direct expense of more than $100 million a year and local company’s Development Corporation, has expanded the industrial park and added purchases woods from 100s of independent contractors. Half of the a Second Addition providing more than 40 new parcels of shovel-ready wood that provides raw material comes from public forests. lots with lots varying in size from one acre to 50 acres. “For every one dollar spent to purchase public stumpage, 40 dollars The Bemidji Technology Park is a 60-acre research and technology of economic activity is generated,” Aube explains. “Another Minnesota park for tech-oriented businesses. Currently, there are five tenants in the Department of Natural Resources statistics shows that for every cord of park that offers advanced computer services, fiber optic networks and wood harvested generates $66 in tax income to the state. The income communications services, high-capacity backbone to the internet, and from wood sold from the 2.5 million acres of public school trust lands developed infrastructure with underground utilities including threein Minnesota generates returns for Minnesota’s 340 school districts.” phase electrical service and city water and sewer lines. Aube adds that it is easy to see how the timber industry spurs growth Paul Freude is the CEO and General Manager of Paul Bunyan in the region and will continue that into the future because of its forest Communications and Chief Manager of COOP Development. Paul management. “In Minnesota, we only cut a third of the growth,” he Bunyan Communications, in partnership with Beltrami Electric, states. “There is opportunity in the state with forest management that constructed the Technology Park starting in 1997. we can increase our harvest toward the growth rate and capture the “The Technology Park was started during a time when high band connectivity was not available in our area and in Bemidji,” Freude says. At least 250 jobs reside within the Technology Park. “We were trying to build good jobs in the community and we did it,” Freude states. Pinnacle Publishing is a telephone directory publishing company that publishes 243 publications in 34 states. Recently, the company increased its workforce by 45 persons by adding 109 directories across the nation. Rosie Berg, Marketing Manager for Pinnacle Publishing, says the company is helping spur growth by continuing to work with telephone companies across the nation. “There are many telephone companies looking for a publisher to provide advertising solutions to their customers,” she says. “The more we grow the more the community can grow. We can help Bemidji grow because we are providing more opportunities for our employees.” The Bemidji Regional Airport is the fourth busiest in the state behind Duluth, Rochester, and Minneapolis. The airport has three departures daily to Minneapolis and serves more than 21,000 commercial passengers each year. The airport has a current $12 million project to upgrade

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April 2011

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mortality and turn it into economic activity. There is real tremendous opportunity.” Health care and the retail industry will continue to expand the economy of the Bemidji community. “When Bemidji hit that critical population level, we saw major retail come to town,” Wiechmann says. “There has been a major expansion in retail as we are now considered a regional retail center. Our retail service area has greatly expanded in the last decade.” Bemidji is unique in that the various government entities have provided a buffered economy, according to Paris. “We don’t experience the peaks and valleys,” she says. “It is not like we’ve been completely immune to tough times. But we seem to be a fairly stable economy and a lot of it has to do with our diversity.” Much of the diversity is attributed to four seasons of tourism. There is always the summer season focusing on the water sports and then the winter season focusing on snowmobiling and other outdoor winter activities. Then there is also what Denelle Hilliard, Executive Director of VisitBemidji, calls spring and fall the ‘shoulder seasons’ of the year. “Summer and winter really operates itself,” she says. Not only is the Mississippi River Headwaters a draw, Paul Bunyan and Babe are usually in the top 10 list of sites that people stop to see. The community is rich in fine and performing arts and culture. The region also boasts over 500 miles of trails and 400 crystal clear fishing lakes in a 25 mile radius adding to our and wide variety of tourism opportunities. Alan Van Ormer - avanormer@prairiebizmag.com PB

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Leadership/Management

Innovation means a smarter way of doing things

As president of Enterprise Minnesota, I am fortunate to visit with manufacturing companies to hear about their business, products, markets, and key customers. It is all fascinating, but the most striking part is when conversation turns to innovation, as it always does.

any people think of innovation as the “next big idea,” but it means so much more to the best business leaders. And to manufacturing leaders, innovation is a mindset about the most practical ways to improve a company. It is about finding a smarter and faster way of growing productively and profitably. Innovation is many things. It is leadership and supervisory development, process improvement, a different marketing strategy, modification to a product, and the list could go on. Oftentimes the small steps of innovation will lead to the “next big idea.” This type of innovation is something that anyone can do by adopting a mindset of continuous improvement, which all manufacturers must do to stay competitive. One great example of innovation is at RIE Coatings in Eden Valley, MN. Their business is applying coatings for protection and performance to a variety of surfaces, such as ATVs and John Deere tractors, and other carbon steel,

M BOB KILL President Enterprise Minnesota bkill@enterprise minnesota.org

stainless steel, zinc plating, aluminum, composites, plastics, rubber, copper, brass, and other ferrous and nonferrous metals. Their innovation derives from their environmentally sustainable process, which complies with all major environmental regulations on the books today. They’ve outmaneuvered competitors, many of whom still use only metal plating that generally creates hazardous waste streams. These many innovations have helped RIE secure new business from a number of major accounts and increase sales by more than 30 percent over the past two years. If business leaders spend time thinking about this type of innovation, they will be ahead of the competition, improve the bottom line, and grow their businesses. Ultimately, our success is decided by where our value is with customers. It is innovation that helps us find that value and turn it into real business results. PB

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April 2011

New SBA legislation is

‘big deal’

One important point Region VIII Small Business Administration Regional Administrator Daniel Hannaher takes from the new Small Business Job Acts is a temporary program which allows businesses to use 504 lending program to refinance commercial real estate. e have people with balloon payments coming up, the value on their property has dropped and the banks therefore won’t be as welcoming to refinancing,” Hannaher says. “By the government providing a 75 percent guarantee on a loan will make it much more attractive to the lender to help those businesses refinance their property.” Hannaher recently attended an SBA-sponsored procurement conference in Jamestown, ND. The conference provided an opportunity for small businesses to meet with government agencies for training, as well as explaining products and services with the hope of contracts down the road. In an interview in Fargo, ND, Hannaher talked about the latest legislation, which he terms as a ‘big deal’ for the SBA. “This legislation was the largest legislative action in over a decade,” he says. “There are a multi-faceted number of issues that benefit small businesses.” Under the leadership of the new administration the SBA is aggressively focused on capital access, counseling, and government contracting. A major effort is being made to reach the goal of 23 percent of government contracting going to small businesses. “That is going to be achieved and surpassed,” Hannaher states. “This means more jobs, more stability, and more economic growth in the small business

community. I think in everyone’s eyes the only way this country is going to get out of the economic strife that we have been confronted with. It is small business that creates new jobs. It is small business that leads innovation, competitiveness.” An important part of Hannaher’s job is being the eyes and ears, and at times the voice of the Administration regionally. Region VIII consists of North Dakota, South Dakota, Colorado, Montana, Utah, and Wyoming. “If we can gather good ideas from small businesses out here and bring those good ideas back to Washington, we can formulate better policies for the nation,” Hannaher explains. “I am also the voice expressing the goals of the administration and how we would like to see the country move forward.” The most challenging aspect is finding opportunities for small businesses that are on the cusp of success or failure, Hannaher adds. “Trying to fix those everyday small problems can be a grind,” he states. One thing Hannaher would like to tell the business community is not to be afraid of talking with the SBA. “We have so many creative options,” he says. Alan Van Ormer - avanormer@prairiebizmag.com PB

prairiebizmag.com

Hydrogen has future potential Right now, production of ammonia used for fertilizer and oil refining are the two largest uses of hydrogen. However, many experts in the field believe that hydrogen can be used as a potential replacement for transportation fuels as a direct replacement or as a feed for fuel cells in electric vehicles. lectrical vehicles are a logical step,” states Michael Reese, Renewable Energy Director, University of Minnesota Renewable Energy Center in Morris, MN. “It will help the hydrogen economy. Because of the storage issues with hydrogen there is a national group looking at promoting and using hydrogen anhydrous ammonia (NH3) as a storage medium for hydrogen. Anhydrous ammonia is the second most transported available chemical in the world and is hydrogen-rich.”

“

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32 Prairie Business Energy

April 2011

Michael Holmes, Deputy Associate Director for Research at the Energy & Environmental Research Center in Grand Forks, ND, says experts are looking at how to use hydrogen in wider applications. “Technology improvements are moving us toward the targets for economics and performances in the areas of production, infrastructure and end uses. There are a lot of successes being accomplished,” explains Holmes, who also manages the National Center for Hydrogen Technology. “Each time improvements are made that reduce costs and improve reliability, you increase the number of hydrogen uses that make sense commercially.” Holmes states there are growing numbers of markets that use hydrogen including stationary power, back-up power, and materials handling such as forklifts in warehouses because of noise and air quality issues. “Fuel cells are making great strides in these applications,” he states. “Instead of being completely powered by battery, it can be powered by a hydrogen fuel with or without a small battery system.” At the South Dakota School of Mines and Technology in Rapid City, SD, members of the Center for Bioprocessing Research & Development (CBFD) are focusing on dark fermentation for biohydrogen production. “Dark fermentation appears to be an ideal method of choice to produce hydrogen at a high rate from renewable sources, including wastes,” says Dr. Lew Christopher, Director of CBRD. South Dakota School of Mines and Technology was recently awarded a grant to investigate the development of scalable and mobile technologies for biohydrogen, biodiesel, and hydrocarbons production from lignocellulosic waste biomass. “The overall objective of this program is to develop novel technologies for production of biomass-derived biofuels suitable for deployed ground power to help the Air Force achieve their target of 18 percent biofuel production of current fuel consumption,” Christopher states. “The biofuels technology would be utilized in the self sustaining, zero-host nation and environmentally friendly supply of fuels produced with increased use of renewable lignocellulosic biomass in a cost efficient and environmentally-friendly way.”

National Center for Hydrogen Technology

Mike Holmes, Deputy Associate Director for Research, EERC

Hydrogen pump

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Hydrogen has been part of the energy mix in the United States since the 1800s as a component in the gases used for heating and lighting. Hydrogen was picked by the Department of Energy as one of the potential replacement energy carriers for transportation fuels. Holmes states that there is 50 million tons of hydrogen produced each year, with 9 million tons of that being produced in the United States. There are three goals for hydrogen use as an energy carrier: energy security, environmental benefits, and economic benefits. Christopher states that about 95 percent of the current hydrogen supply is produced via steam reformation of methane, but this process has many disadvantages including its major contribution to global warming. “A restriction on greenhouse gas emissions is expected to increase the demands for hydrogen due to its non-polluting nature and high energy content,” Christopher explains. Christopher adds that ethanol, biodiesel, and hydrogen are considered to be potential alternative fuels for the future. He reiterates the important point about hydrogen is that as a fuel it does not release green house gases while burning. “It has been used for a wide range of industrial applications, including electricity generation and automotive, thus offering a great potential with unique characteristics to be a leading alternative energy carrier for the future than any other fuels,” he says. The focus at the Morris, MN research center is using hydrogen to produce anhydrous ammonia for nitrogen fertilizer. In addition, the researchers are increasing efforts to look for storage medium for in particular, wind energy. “Hydrogen is difficult to store. There is no market for transportation fuel,” Reese explains, adding that most of the hydrogen produced in is produced and used at oil refineries. “We are looking for products that would have some salability here in the Midwest and hydrogen anhydrous ammonia came to top very quickly,” he continues. “We live in the Corn Belt and have largest consumption of hydrogen anhydrous ammonia in the world. It was a good fit.” In addition to fertilizer, Reese says there are early market niches

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April 2011

Current Modeled Cost of an 80-kW System Based on Projection to High-Volume Manufacturing (500,000 units/year)2 Source: Department of Energy

for hydrogen-powered utility vehicles and forklifts. For example, turf maintenance equipment used on golf courses at all hours of the day will run quiet not disturbing the area residences and does not require large volumes of engine or hydraulic oil, which can leak out damaging the turf. In addition, hydrogen-powered forklifts can run longer, be fueled faster than traditional battery packs, and hydrogen fuel cells do not produce carbon monoxide in enclosed spaces as do gasoline-powered counterparts, Reese explains. Companies are looking at 60 kilowatt hydrogen engine in utility vehicles that are used to mow grass along golf courses because of the quiet nature of the vehicle. Holmes says that hydrogen can compete because by opening up the market for more applications, technology and manufacturing improvements are reducing costs and improving reliability. “These costs are further reduced every time market expands,” Holmes explains. “There are currently hundreds of hydrogen fuel cell vehicles on the road and they have undergone millions of miles of testing over the past decade. Most of the major auto manufacturers have targeted the 2015 timeframe for release of mass-produced models.” Reese believes that hydrogen anhydrous ammonia is the best use of hydrogen in the short term because it has an established market and demand. “Hydrogen is one of those fuels that is always 10 years away,” he adds. “We need to continue working with hydrogen in electric powered vehicles because we have an extremely volatile energy supply. We need to have a hedge, a backup plan, to provide energy. Then when needed, hydrogen will provide us with a reasonable transportation fuel replacement.” Alan Van Ormer - avanormer@prairiebizmag.com

Hydrogen Time Line 1766 - Henry Cavendish indentified hydrogen as an element and produced it in demonstrations.

1800 - William Nicholson and Sir Anthony Carlisle discovered electrolysis for producing hydrogen and oxygen from water. 1800 - Hydrogen-rich town gas used in Europe for heating, cooking, and lights as a replacement for whale oil. 1839 - Swiss chemist Christian Friedrich Schoenbein discovered that water and electricity are formed when hydrogen and oxygen are combined (fuel cell effect). 1959 - Harry Karl Ihrig developed the first fuel cell vehicle, a 20 horsepower Allis-Chalmers tractor. 1970S - The OPEC oil embargo caused strains on the petroleum supply, and fuel cell development for commercial applications ramped up.

2002 - The DOE FreedomCAR program began. Source:EERC

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Determining where oil revenues go is anything but simple While nearly every other state in the nation must determine what to cut from their budgets, North Dakota is faced with deciding how to spend the vast revenues generated from the oil industry. But legislators are finding that allocating money where it is needed most, and assuring substantial revenue for years to come is no small task. here are so many dollars in so many places, it really is challenging to keep our thumbs in everything,â&#x20AC;? says State Treasurer Kelly Schmidt.

36 Prairie Business Energy

April 2011

The state treasurerâ&#x20AC;&#x2122;s website allows easy access to information about tax distributions via a searchable database. Anyone can quickly find how much money went to cities, counties, schools and tribes for any given time period. For instance, a quick search shows McKenzie County collected over $8.7 million in oil and gas gross production taxes in 2010, and the greatest income was in September. Quite simply, the oil boom has brought significant dollars to the state. Current projections for 2009-2011 are at $1.4 billion. Conservative estimates for the upcoming biennium are at $2.1 billion. But determining where the money goes is anything but simple. Oil and gas revenue is distributed in a variety of ways. North Dakota has two types of oil tax â&#x20AC;&#x201C; an oil and gas production tax (GPT) of 5 percent and an oil extraction tax (OET) of 6.5 percent. The 5 percent tax is divided with one percent going to the state general fund and four percent to the 17 oil-producing counties. The breakdown of the four percent is based on an escalating formula where at the start of each fiscal year, counties receive 100 percent of the revenue, and eventually drop to 10 percent when revenue exceeds $18 million. So far, five of the 17 counties are at the 10 percent status. Tax commissioner Cory Fong states the counties will see $168 million in the current biennium, and forecasts even more in the next. That money is then distributed to needs within the counties, cities and schools. The remaining percentages in this formula go to the state

general fund, but once that hits $71 million, it spills into the permanent oil tax trust fund – a supply of money for special projects and priorities. The 6.5 percent tax is split between the general fund (unless it has hit the $71 million cap), the water resources trust fund and education purposes. The governor’s budget includes a large chunk of oil revenue slated for infrastructure improvements in western North Dakota. He’s proposing the full one percent of the GPT that is currently sent to the general fund be put into an oil impact fund for infrastructure needs. He also wants to pay for it with the permanent oil tax trust fund – forecasted at $886 million by the end of 2011. “Most people think we need to take care of the infrastructure and the roads. The discussion is, how do you do it? Do you do it through the governor’s method or another method?” explains tax commissioner Cory Fong. Fong believes it is important to keep oil impact projects out of the general fund because given the ups and downs of the oil industry, it is difficult to manage those fluctuations within the budget. “There is also a greater identity of those one-time funding projects when it is off from the general fund,” he said. While a majority of the state’s oil production is subject to the combined 11.5 percent, the current rate averaged for all production is 10.25 percent, due to incentives built into the OET which lower the rate. Most of those incentives are triggered by price. If the price of oil drops below $47.67 per barrel, the tax rate drops in an attempt to keep drilling economical. But some legislators believe the incentives are too complicated. Rep. Shirley Meyer (DND) introduced legislation to simplify the extraction tax and give it a flat, predictable tax rate of 9.5 percent.

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“The thought process right now is a gold rush mentality, and companies only drill to hold leases,” Meyer says. “After the lease holds are done, we need them to stay, but they’ll look for the cheapest place to find oil.” When oil companies obtain a lease, they need to keep drilling in order to keep it. In January, Meyer said many leases were expiring, so drilling was kept at a frantic pace. But when the price of oil falls, she says North Dakota’s weather and high tax rates won’t encourage continued drilling. “When the oil price drops, that’s the trigger for lower taxes, but that’s also when we’ll need the money most, and it’s when we’ll lose the most revenue,” Meyer explains. Another bill is circulating to modify the taxes for stripper wells, those wells that are down to minimal production – often less than 25 barrels of

“Most people think we need to take care of the infrastructure and the roads. The discussion is, how do you do it? Do you do it through the governor’s method or another method?”

Office of State Tax Commissioner

- Tax Commissioner Cory Fong

oil per day. As it stands now, oil companies do not pay any extraction tax for stripper wells. Once it is declared a stripper site, all the wells on that site are OET exempt. The bill states that in the past year, over six million barrels of oil were exempt from OET, even though they were highproducing wells. The North Dakota Chamber of Commerce opposes the bill because they believe it is an unnecessary tax increase at a time when the state coffers are substantial and taxes could be cut. Because revenues could taper off one day, the state is preparing for that too. Voters decided in November to create a Legacy Fund that sets aside 30 percent of oil revenues that can’t be touched until 2017. “It is a big savings piece seen as a way to lock up dollars for the future,” Fong says. With each oil rig generating 40 direct jobs and 80 indirect jobs, and projections by the Department of Mineral Resources of 10,000 to 20,000 wells drilled within the next two decades, it may be awhile before the Legacy Fund has to be touched. Perhaps the best summation of the oil boom was stated by the one who writes the checks. Treasurer Schmidt says all this revenue means one thing: opportunity. “We’ve been given an opportunity and now we need to see what we do with it,” she states. Maxine Herr is a Bismarck, ND-based freelance writer. She can be reached at maxine606@msn.com.

Office of State Tax Commissioner

38 Prairie Business Energy

April 2011

CURRENT OIL DOLLAR PROJECTIONS FOR THE STATE IN 2009-2011 ARE AT

$1.4 BILLION CONSERVATIVE ESTIMATES FOR THE UPCOMING BIENNIUM ARE AT

$2.1 BILLION

prairiebizmag.com

Technology

Customers switching home and business telephone services Over the past few years, the telephone industry has undergone a degree of change that was unthinkable just 10 years before. Millions of customers are switching their home and business telephone service from the Public Switched Telephone Network (PSTN) to Voice over Internet Protocol, or VoIP. oIP offers a compelling alternative to traditional PSTN telephone lines, especially for businesses with a large number of phone lines or multiple business locations. But VoIP also works well for smaller businesses with just a few lines. There are many reasons to switch to VoIP, but a few key reasons are:

SAVINGS: VoIP lines typically cost about half as much as a conventional phone line. The savings in monthly line charges can often pay for a VoIP system in a year or two – even less for organizations with many phone lines.

SHARING: VoIP lines are virtual, not physical. If a business has dozens, hundreds, or even thousands of locations, they can buy a pool of VoIP lines for all locations to share. This is especially effective for retail outlets, restaurant chains, and other businesses with hundreds or thousands of business locations. Any user at any location in the organization can place a call using one of the pooled VoIP lines.

INTEGRATION: VoIP makes it easy to unite satellite offices, mobile users, and work-at-home employees into a single system with a single dialing plan. This improves communications within the organization and improves service for their customers.

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40 Prairie Business

April 2011

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Consultant Information Management Systems aardayfio@imsnetworking.com

Economic Development

Telework A Positive Development in Employment “Teleworking” is the new buzzword that seems to be replacing the term telecommuting—what most people have called working from home or from remote locations.

he concept of teleworking or telecommuting is also gaining a wider acceptance from employers and employees alike, according to a recent study released by the International Telework Association and Council (ITAC). The study concluded that telework can save employers money, provide workers more flexibility and improve productivity. The concept is catching on here in our region as well. More and more employers are recognizing the benefits financially and in retaining talent by allowing certain positions to telework fully or at least part of the week. Some advantages to the employers and employees have been; Savings in premises costs, office overhead and labor. Flexible working strategy also has the potential to reduce relocation costs. According to the Management Technology Associates, productivity increases of up to 40% have been reported, though a range of 10-40% is typical across large scale programs. Teleworkers avoid travel time and interruptions of a normal office environment. With gas prices on the rise teleworking will be a sought after feature by employees. Skills retention, organizational flexibility, resilience, flexible staffing, and enhanced customer service can all be benefits of teleworking. Improved employee motivation by being trusted and having

confidence by the employer is another positive outcome. Improved work opportunities because employees are not confined to reasonable commuting distance.

BETTER BALANCE OF WORK AND FAMILY. We have seen recently in our region that more and more employers are looking at this option because technology and broadband have been enhanced dramatically. This is good news for all employees both seasoned and new graduates. The Midwest work ethic is well known, and now through telework, more of our regions citizens can continue to live here but perhaps work for employers in another part of the country or world. The opportunity for our educational institutions is to ensure we have a trained workforce in occupations most suitable to telework is paramount. Some of these occupations are in information technology, medical coding and transcription, insurance claims processing, accountants and auditors, software engineers, writers and editors, graphic designers and many more. From an economic development standpoint telework is another fundamental shift in how jobs can be created and community talent enhanced. While not all jobs may be conducive to telework, many can be. With telework we have just added more opportunity for our workforce and our employers. PB

HAROLD STANISLAWSKI Harold Stanislawski, Executive Director, Fergus Falls Economic Improvement Commission

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ViewPoint

Economic Impact of Water and Water Infrastructure Everyone is taught that water is the building block of life. We simply cannot live without it. This statement is as true for humans as it is for a City or State. Safe, reliable water and water infrastructure are critical building blocks of growth and economic development. nvestments in water infrastructure create opportunities to support population, business, and industry growth, contributing to the overall economic health of communities. There is also a multiplier effect from water infrastructure investment. According to the U.S. Conference of Mayors, every job created in rebuilding our water systems creates nearly 3.7 jobs elsewhere, and every dollar invested in water infrastructure adds $6.35 to the national economy. The importance of water and water infrastructure development can be seen first-hand in the communities affected by the rapidly growing oil industry in western North Dakota, where the need for water and water infrastructure is magnified immensely. Communities in the region are faced with trying to find adequate water supplies, improve water quality issues, distribute the water where it is needed most, convey the wastewater to the treatment works, and provide adequate wastewater treatment. Without strategically developed drinking water and wastewater infrastructure systems, communities in

STEVE BURIAN CEO AE2S Steve.Burian@ae2s.com

this region will struggle to serve growing populations and attract and retain businesses. From the standpoint of helping communities entice businesses and industries to the region, Keith Lund, Vice President of the Grand Forks Region Economic Development Corporation, noted that, “it is critical that strategic infrastructure be planned in advance of development activities. Since it can take years to design and construct infrastructure projects, it is unlikely that communities will be able to successfully respond quickly to development opportunities if no prior infrastructure planning has occurred.” Both planning and implementing infrastructure development is equally important. Whether it be sustaining your community, attracting citizens and businesses, or responding to unique situations such as the oil play, water and water system infrastructure are critical building blocks to success. Water is an essential resource for life and for the life of a community. PB

Opportunities for women-owned businesses help communities grow Women-owned businesses have a special and powerful impact on the success of their communities. This is certainly the case in Sioux Falls, where there is an impressive number of women both starting and growing a business.

Sioux Falls Workforce Development Director Sioux Falls Development Foundation and Forward Sioux Falls MaryM@siouxfalls.com

he trend toward women-owned businesses is part of the changing nature of the workforce as individuals seek to bring their own ideas to life and experience the benefits of business ownership. The U.S. Census Survey of Business Owners (SBO) 2007 found that 7.8 million non-farm US businesses were owned by women, a 20.1% increase in just five years. These companies accounted for 28.7 percent of all nonfarm businesses in the U.S. and employed 7.6 million persons. Our region has registered smaller percentages of growth than the U.S. average; however, the trend, even here in the upper plains states, shows ever-increasing numbers and a growing variety of products and services offered. In this era of the entrepreneur, both men and women can readily find encouragement and support in their quest to launch a business. Women who are determined to start or grow their businesses will currently find some attractive incentives to do so. For example:

42 Prairie Business

April 2011

T MARY MEDEMA

*The Small Business Administration sets goals to apply lending to women-owned and what they refer to as “disadvantaged women-owned businesses.” *The SBA and other organizations offer special assistance for women who would like to do business with the government and government contractors. *Women-owned business organizations offer resources, mentoring and a path to certification to ensure they can take advantage of business opportunities. The recent recession has been difficult for businesses, but as the economy improves, there will be even more opportunities for the brave and creative spirit of the entrepreneur to emerge. It is the perfect time for those involved in economic and business development to celebrate the women who own and operate small businesses and to pay special attention to the unique needs of the women business owners in their quest to expand their operations and help their communities prosper. PB

Money

Financial planning helps create ‘good fortune’ Thomas Edison said, “Good fortune is what happens when opportunity meets planning.” That’s what financial planning is all about: helping create “good fortune” through a plan that makes sense instead of relying on luck to afford future luxuries. To alleviate economic worries, plan for your future, including bumps in the road.

short-, medium- and long-term goals, then use your new irst, plan for the unknown: unexpected bills, natural “savings buckets” as the foundation that will provide safe disasters, illness, job loss, salary cuts, nursing home cash for your living expenses and growth in your longexpenses. Put at least three to six months of expenses term investments. Financial planning will bring you in a money market or short-term savings (such as a financial peace of mind. PB certificate of deposit) for emergencies. If your family has a single or variable income, you should save more. Once you have established your emergency fund, set “wants and needs” priorities into short-, medium- and longterm savings buckets. If you plan to take a vacation or buy a car soon, having a short-term bucket of money will help you achieve that goal. If you’re saving for a bigger item such as a house down payment, college education or wedding, set up mediumterm savings. Consider money market funds, certificates of deposit, or shortterm bonds. If you are saving toward your child’s or grandchild’s college Coldset Web Printing is one education, consider investing those of the most economical ways dollars in a 529 plan. to print, which can save you For most, a comfortable retirement is money and increase your the most important long-term savings bottom line. goal. Unlike your emergency, short- and Our Web Presses can print medium-term buckets, your retirement your newsletters, catalogs, account is the one bucket where you have publications and directories on time to ride out market ups and downs. uncoated stocks – including It’s easiest to save for retirement through newsprint. your employer’s retirement plan and IRAs. You then may have the option, If you’re looking for ways based on your risk tolerance and time to cut costs, we can help! until retirement, to invest in mutual funds consisting of stocks, bonds and cash. When you start to distribute money to provide retirement income, you will need to find an appropriate balance between preserving the principal and maintaining growth to keep pace with inflation. Start with the basics: think in terms of

PAUL JARVIS Portfolio Manager/ Certified Financial Planner TM State Bank and Trust pjarvis@statebanks.com

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By the Numbers EMPLOYMENT

(NOT SEASONALLY ADJUSTED) UNEMPLOYMENT RATE Jan. 2010 North Dakota 4.5% Fargo MSA 4.6 Bismarck MSA 4.8 Grand Forks MSA 5.0 Minot MiSA 4.7 Dickinson MiSA 2.6 Williston MiSA 1.5 Jamestown MiSA 4.8 Wahpeton MiSA 4.6 South Dakota 5.4% Sioux Falls MSA 5.3 Rapid City MSA 5.6 Aberdeen MiSA 4.2 Brookings MiSA 4.4 Watertown MiSA 5.3 Spearfish MiSA 5.0 Mitchell MiSA 4.6 Pierre MiSA 4.0 Yankton MiSA 5.2 Huron MiSA 4.1 Vermillion MiSA 3.9 Minnesota 7.5 Minneapolis-St. Paul MSA 7.0 Brainerd MiSA 11.8 Winona MiSA 6.8 Fergus Falls MiSA 8.8 Willmar MiSA 7.3 Bemidji MiSA 9.0 Alexandria MiSA 7.7 Hutchinson MiSA 9.9 Marshall MiSA 6.7 Worthington MiSA 5.6 Fairmont MiSA 7.3

Jan 2009 5.0% 4.8 4.9 5.2 5.0 3.7 2.5 4.2 5.9 6.0% 5.5 5.6 4.0 4.2 6.1 4.8 5.5 3.5 5.3 4.4 3.9 8.7 7.7 11.9 7.3 9.3 7.7 9.2 7.7 10.3 6.4 5.8 8.0

EMPLOYMENT Jan. 2010 Jan. 2009 347,380 343,094 111,936 113,487 58,080 58,496 51,468 52,005 30,906 31,670 15,758 13,853 19,042 13,854 10,768 11,432 12,959 11,023 413,890 406,732 121,280 121,445 61,175 61,735 22,065 21,890 17,865 18,125 17,480 17,555 12,710 12,700 12,275 11,945 12,050 11,885 10,950 11,070 9,300 9,270 7,300 7,375 2,711,377 2,671,629 1,696,772 1,699,698 40,026 40,797 25,703 27,381 27,351 26,844 22,013 22,682 21,083 19,549 18,403 19,157 16,906 18,676 13,589 14,003 11,069 11,488 10,459 10,876

MSA — Metropolitan Statistical Area MiSA — Micropolitan Statistical Area Sources: U.S. Bureau of Labor Statistics, Minnesota Department of Employment and Economic Development, Job Service North Dakota, South Dakota Department of Labor

NORTH DAKOTA OIL ACTIVITY Sweet Crude Price/BBL

Production Oil-BBL/day

DEC 2010 NOV 2010 OCT 2010 SEPT 2010

$81.03 $75.74 $74.41 $67.95

343,867 355,038 343,170 342,094

DEC 2010 NOV 2010 OCT 2010 SEPT 2010

Permitting Wells 134 245 232 167

DEC 2010 341,990

Producing Wells 5,331 5,331 5,300 5,197

Rig Count 163 158 151 143

Gas Production-MCF/Day NOV 2010 OCT 2010 SEPT 2010 352,559 344,038 340,187

Source: NDIC

JANUARY AIRLINE BOARDINGS BOARDINGS

Minneapolis-St. Paul Fargo Sioux Falls Rapid City Bismarck Grand Forks Minot Pierre

% CHANGE/2009-2010

2,238,076 29,008 28,549 17,078 14,551 9,908 9,353 1,110

0.59% 1.30 16.60 2.70 - 2.51 16.24 107.89 30.74

Source: US Customs and Border Protection

CANADIAN BORDER CROSSINGS AUTOMOBILES

CANADIAN EXCHANGE RATE

MINNESOTA

02/26/10

01/28/11

$ 1.05 or $0.95

$0.999 or $1.001

$0.974 or $1.027

$ 0.732 or 1.366

$0.735 or $1.361

$0.725 or $1.379

U.S. to Chinese Yuan

$ 6.826 or $0.147

$6.581 or $0.152

$6.572 or $0.152

U.S. to Japanese Yen

$88.83 or $0.011

$82.02 or $0.012

$81.91 or $0.012

U.S. to Mexican Peso

$12.76 or $0.078

$12.14 or $0.082

$12.11 or $0.083

U.S. to Canadian DollarU.S. to Euro

Source: Bank of Canada

02/28/11

Data provided by Kingsbury Applied Economics

Intl. Falls-Rainer Grand Portage Baudette Warroad Roseau

% CHANGE /JAN 2009

JAN 2010

% CHANGE /JAN 2009

31,491 18,620 11,525 9,492 3,172

9.48% 36.71 - 7.56 32.15 19.16

1717 1172 770 1118 545

- 3.43 48.54 -27.43 3.14 20.84

18,345 5,311 3,642 3,550 3,114 2,238

11.10 14.86 7.53 15.41 21.78 5.72

16,876 6,736 946 2,101 1,063 175

3.88 14.85 -13.37 10.75 12.49 -11.62

NORTH DAKOTA

Pembina Portal Neche Dunseith Walhalla Noonan

Source: US Customs and Border Protection

46 Prairie Business

April 2011

TRUCKS

JAN 2010