Prairie Business June 2011 by Prairie Business Magazine

June 2011 SALES/MARKETING Talk Less, Sell More pg 41

LEADERSHIP

The customer is key to future success pg 19

ECONOMIC DEVELOPMENT

Company Spotlight:

Changing demographics.... and the flood of 1997 pg 40

MFG continues adapting to change pg 16

TECHNOLOGY Cloud computing and your business pg 43

MONEY

Finding your market mojo pg 18

Community Spotlight: Energy impact challenging Dickinson

HEALTH CARE

pg 28

RETAIL pg 20 RURAL DEVELOPMENT pg 26 pg 32 T. Denny Sanford

www.prairiebizmag.com

T. Denny Sanford Leaving a legacy for children pg 24

CONTENTS

Volume 12 No. 6

From the Editor’s Desk

Professional Spotlight

Matthew Mohr

Prairie News

Prairie People

Company Spotlight: MFG continues adapting to change In less than four years, MFG-South Dakota, a subsidiary of Molded Fiber Glass Companies, has been able to start a new plant and then adapt its processes from making a 37-meter (120 feet) wind blade to a 40-meter (130 feet) wind blade.

Money - Finding our marketing mojo

Leadership and Management - The customer is the key to future success

20 24

Cover Story: Maintaining our region’s downtown corridors Communities in the region are doing what they can to make the downtown area a place to check out and to do business in.

Cover Story: Leaving a legacy for children T. Denny Sanford, chairman of the United National Corporation, a banking business in Sioux Falls, SD, continues his giving ways to help find a way to combat disease, and in particular, to help provide children a quality of life.

Cover Story: Infrastructure cultivates business climate

Community Spotlight: Energy impact challenging Dickinson

Highways, water treatment facilities, and telecommunications – you name it - many states are in need of infrastructure improvements to help cultivate a business climate in the region.

Managing and coping with western North Dakota’s energy impact has become a major challenge for Dickinson, ND.

Economic Development Changing demographics…. and the flood of 1997

Sales and Marketing Talk Less, Sell More

Viewpoint

Technology - Cloud computing and your business

By the Numbers

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June 2011

Midwestern potential to harness solar power

Making sure mineral rights are taken care of

One needs only to listen to the corn grow in July or sit in a south-facing window in January to feel the power of the sun on the plains of the Upper Midwest.

How do those who own mineral rights do what is necessary to pass this asset on to the next generation?

Small wind projects still sprouting up

In Moorhead, MN, the community was looking at something special and that would be cutting edge in energy, but also still within the realm of the expertise of the Moorhead Public Service.

Next Month In July, Prairie Business magazine will showcase unique companies that have been around less than five years, as well as discussions on the possibility that times are challenging for architects and engineers and are railroads becoming more important for our transportation needs?

On the air Join Prairie Business magazine Editor Alan Van Ormer and host Merrill Piepkorn on Tuesday, June 14 at 3 p.m. on any Prairie Public radio station to hear more about the June cover stories. To listen to Prairie Public, visit www.prairiepublic.org/radio/hearit-now.

From the editor’s desk

For daily business news visit prairiebizmag.com

vision for the future

As I was finishing the three cover topic stories for June, I realized that there seemed to be a similar theme tied to all of them. What stuck out to me is the vision that communities, states, and individuals have to make sure that each continues to keep pace into the future.

or example, the main cover story on downtown revitalization shows that communities need to continue to keep the downtown areas vibrant in order for that individual community to grow. Then there is T. Denny Sanford and his legacy to donate his fortunes to help develop cures for the health care industry, as well as finding ways to help the children in our world. Finally, infrastructure needs are important for a state to continue to move forward to draw business into the area. I had a dear friend tell me the other day that sometimes businesses think only about today and forget about tomorrow. I do not claim to be an expert on the way leaders and managers conduct their business, but I’m sure that in the business world, forgetting about the future is just not something that can happen. Most of us think only about what we have on our plate at the moment, but fail to realize or maybe just don’t think about what will happen in the future of our respective business. It is always important to plan for 5-10 years even while you are burdened with your everyday work. According to the Small Business Administration, seven out of 10 new employer firms last at least two years, and about half survive five years. More specifically, according to new Census data, 69 percent of new employer establishments born to new firms in 2000 survived at least two years, and 51 percent survived five or more years. And one of the main reasons these businesses failed was because of lack of planning. Those involved in our cover stories know the importance of planning for the future and the way they do their work each day and thinking about the future, is a model that we can all look at as we move on down the road.

An SBA Award Winning Publication 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/GENERAL MANAGER:

Scott Deutsch

SALES:

Brad Boyd

701.232.8893 Grand Forks/Fargo/Moorhead/northwestern MN

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

John Fetsch

701.232.8893 Fargo/Moorhead/eastern ND/western MN

Jeff Hanson

605.212.6852 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; Brekka 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 Clarification: In the May issue, the Company Spotlight mentioned EAPC Engineers Architects. The correct name of the Grand Forks, ND-based architecture company is EAPC Architects Engineers. 6 Prairie Business

June 2011

Professional Spotlight

Starting a business with no retail experience

CONNIE FEIST Mile One Running Shop, Minot, ND

hen Connie Feist opened Mile One Running Shop in Minot, ND, she had no previous retail experience. “The biggest challenge we’ve faced is simply learning the principles of retail management and inventory planning,” Feist states. Feist is an avid runner and has been involved with the sport in the Minot area for several years. The Mile One Running Shop has allowed Feist the opportunity to provide customers with just more than a shopping experience. “All employees at Mile One are runners themselves and are committed to giving knowledgeable guidance and support to our customers,” Feist explains. During a November Independent Running Retailer’s Association conference it was announced that specialty running shops such as Mile One have experienced double digit increase in sales volume over the past couple years, and that is projected to continue. Feist says more people are taking up walking and running and are looking for guidance from shops staffed

with people who know sports. Mile One Running Shop has become known as a runner’s resource center in northwest North Dakota. The staff is comprised of personal trainers, coaches, internationally acclaimed athletes, and season road racers all committed to providing knowledgeable service and support to customers. “One of the lessons I learned in starting a new business is to expect and be willing to make mistakes,” Feist explains. “I think it was much healthier to view mistakes as learning opportunities rather than beat myself up over them. The key is to truly learn from them and try not to make the same mistakes twice.” Another valuable lesson Feist says she learned while opening the shop was to trust her instincts. “While I felt I had no clue what I was doing at times, if I could focus on the future vision I had for the shop it became much easier to make the right decisions,” she adds. PB Alan Van Ormer - avanormer@prairiebizmag.com

Business Advice

Business return on investment As a business owner or investor in a business, a reasonable return on the money you have invested should be expected. imilarly, business decisions involving plant, property, and equipment expenditures should provide enhanced cash flow to compensate for the money expended. Far too often business managers fail to evaluate a specific expenditure’s cash return to the operation. Accounting profits are not the same as cash flow, and only by assessing the cash impact can a true evaluation of return on investments be made. Each business has a unique cost of capital which is used as a minimum return or “hurdle rate” which is used to decide a project’s viability. If you are investing $20,000 in equipment and you expect to save $1,200 per year in operating costs, plus make extra sales generating another $1,000 in cash flow, your return (assuming no tax affects) is $2,200 for a $20,000 investment. This gives an 11 percent ($2,200/$20,000) return on investment, which for a business is a quite low return. Most stable businesses target a 15 to 18 percent return on all investments. For venture capital, a 25% average annual cash return is

MATTHEW D. MOHR CEO, Dacotah Paper Company mmohr@dacotahpaper.com.

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June 2011

considered reasonable, if not the minimum. It is not unusual to have returns on investments exceed 50 percent. I have seen a few simple business equipment expenditures return twice the cost in a year or less. Finding big return on investment expenditures are rare, but the really good ones help make up for the really bad ones (losses). Given today’s low interest rates, these returns may seem rather high, but to perpetuate a business and continue to expand along with compensating for the high risk of investment loss, these rates are what one should expect to generate over time. PB

Most stable businesses target a

15 to 18%

return on all investments.

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

ALDEVRON WINNER OF ‘BEST PLACES TO WORK IN INDUSTRY’

June 6, 1934 ON

The Scientist magazine announced that Aldevron, located in Fargo, ND, a leading provider of plasmid DNA and protein purification services, is a winner of the 9th annual “Best Places to Work in Industry” survey. In addition to employee surveys, The Scientist also commented on Aldevron’s innovation and active collaborations with North Dakota State University to increase both biotech research and jobs in the region.

ABSOLUTE MARKETING GROUP WINS GOLD Absolute Marketing Group, a full-service advertising and marketing firm in Moorhead, MN, garnered two district gold ADDY awards, bringing its 2010 ADDY award total to 21. The latest awards were given at the district level, which featured the best advertising creative from North Dakota, South Dakota, Minnesota, and Wisconsin. The first award was given for a newspaper spread done on behalf of 99 Bottles. The second award was for a sensational, tabloid-style Christmas card done for Huesman, Inc. The ADDYs are the largest creative competition in the country with more than 40,000 local entries competing in 200 markets across the nation.

President Franklin D. Roosevelt signed the Securities Exchange Act that establishes the Securities and Exchange Commission. The Stock Market Crash of 1929 necessitated regulation of the exchanges. The SEC is composed of five members appointed by the President of the U. S.

ARCTIC CAT CELEBRATES 50TH ANNIVERSARY Arctic Cat will celebrate the brand’s 50th anniversary on July 29-30 in Thief River Falls, MN. In 1961, Edgar Hetteen founded Polar Manufacturing in Thief River Falls and started producing snowmobiles. One year later he changed the name to Arctic Cat, and began a series of innovations that transformed hulking snow ‘machines’ into small, playful snowmobiles.

BASIN ELECTRIC CELEBRATING 50 YEARS OF SERVICE Basin Electric Power Cooperative, headquartered in Bismarck, ND, is celebrating 50 years of providing generation and transmission to members. Papers of incorporation were signed 50 years ago at the historic Patterson Hotel in downtown Bismarck. Today, Basin Electric is the largest generation and transmission cooperative in the United States, serving 2.8 million people with electricity, including electric cooperatives in Minnesota, Montana, North Dakota, and South Dakota.

INVESTMENT TRUST ACQUIRES BOISE ASSISTED LIVING FACILITY Edgewood Real Estate Investment Trust, based in Grand Forks, ND, has acquired Plantation Place in Boise, ID. Plantation Place is a 44-bed residential assisted living facility that provides housing, meals, housekeeping, nursing care, and recreational opportunities for seniors. Edgewood REIT acquired the community on May 1, and entered into a long-term agreement to lease the facility to Edgewood Group LLC in Grand Forks.

SANFORD PROMISES TO CONNECT COMMUNITIES TO SCIENCE AND RESEARCH

Molded Fiber Glass in Aberdeen, SD is now accepting applications at its wind turbine blade manufacturing facility for:

Professional Management, Supervisory, Technical, and Production Teammates Launch a career in a growing, green energy industry today!

Come and check us out for yourself! For an application, job descriptions and details please visit the SD Department of Labor local office at 420 S. Roosevelt St. or call 605-626-2340. You may also visit www.moldedfiberglass.com/careers. EOE 10 Prairie Business

June 2011

Sanford Research has launched The Sanford PROMISE, a new and innovative outreach program connecting students, educations, and communities with science and research in meaningful ways, and ultimately preparing and inspiring the next generation of scientists. The Sanford PROMISE was formally introduced at a Biomedical Discovery Day in early May at the Sanford Center in Sioux Falls, SD, where Sioux Falls and Fargo educational and business partners engaged with more than 250 students on biomedical, engineering, and biotechnology careers.

GATE CITY BANK DONATES $500,000 TO RENOVATE NDSU AUDITORIUM Gate City Bank, in Fargo, ND, has donated $500,000 to the North Dakota State University Development Foundation to renovate Stevens Auditorium, the single largest classroom on the NDSU campus. The 42-year-old auditorium will undergo an extensive renovation this summer, and will be renamed the Gate City Bank Auditorium. The renovation will transform the auditorium into a state-of-the-art learning environment that will enhance the educational experiences of students.

At U.S. Bank, we are committed to supporting the Dakotas. It’s where we work and where we live. We’re also dedicated to being your local financial partner with the strength, support and service you deserve. Imagine what you can do when you have the power of US working for you. U.S. Bank is one of America’s strongest banks. Our strengths have never been more aligned with the needs of our communities, and our stability makes us even more qualified to serve you. As our nation recovers, we will use that strength to make our communities stronger too. We are well capitalized, open for business, and poised to do what we’ve been doing since 1863 – making sure the financial dreams of every U.S. Bank customer take flight with a bank that is safe, strong and ready to work for you. Visit or call a U.S. Bank branch today! Delton Steele Regional President Fargo, ND 701-280-3553

Carl Wynja Regional President Sioux Falls, SD 605-339-8619

Cindi Walsh Regional President Aberdeen, SD 605-226-4103

Pat Burchill Regional President Rapid City, SD 605-394-2021

John Snustad Regional President Grand Forks, ND 701-795-6175

Tim Hennessy Regional President Bismarck, ND 701-222-6286

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

UND CENTER OF INNOVATION FOUNDATION OPERATING EB-5 REGIONAL CENTER The University of North Dakota’s Center for Innovation Foundation, in Grand Forks, ND, will be operating North Dakota’s and Minnesota’s only EB-5 Regional Center. This designation is expected to attract tens of millions of dollars of private investment and create hundreds of new jobs in North Dakota. The EB-5 program facilitates permanent residency status and Green Cards for immigrants who invest in U.S. companies inside regional centers to help facilitate job growth in rural areas and areas with high unemployment. The program has attracted more than a billion dollars in foreign investment to the United States, and created tens of thousands of news domestic jobs, according to a news release from North Dakota’s Congressional Delegation.

YOUNG PROFESSIONALS RECEIVE GRANT The Greater Grand Forks Young Professionals in Grand Forks, ND, received a $50,000 grant from the Otto Bremer Foundation. The grant allows the Young Professionals to hire an executive director for the organization as well as move forward with key initiatives to attract and retain young talent to the Grand Forks region. The Young Professionals are also planning for ‘Launch Grand Forks,’ which would include strategic workforce initiatives, professional development initiatives, and community involvement programs. These initiatives will work to create a vibrant community for young adults and develop a strong and growing workforce for ages 25-40.

UND RANKS FIRST FOR PERCENTAGE OF GRADS CHOOSING FAMILY MEDICINE The University of North Dakota School of Medicine and Health Sciences in Grand Forks, ND is the top medical school in the country for producing family medicine physicians with 19 percent. The overall U.S. match rate is from family medicine this year is 8.4 percent, according to the American Academy of Family Physicians. The American Academy of Family Physicians presented its top 10 awards during a recent Society of Teachers of Family Medicine conference in New Orleans. The awards recognized schools that, during a three-year period, graduate the greatest percentage of students who choose first-year family medicine residency positions.

12 Prairie Business

June 2011

UNITED WAY HONORS U.S. BANK United Way has honored U.S. Bank with the 2011 Spirit of America® Award to recognize the company and its employees’ commitment to improving the financial stability of individuals, families, and local communities. U.S. Bank provided $25.8 million to support programs focused on financial education, job training, affordable housing and more – representing 75 percent of the bank’s overall charitable giving. Also, U.S. Bank boosted its fundraising efforts for United Way and 25,000 other qualifying charities by offering triple FlexPoints to customers who used their FlexPerks Visa card to make charitable contributions. Donations made via the card increased overall by 22 percent and donations specifically to United Way increased 45 percent.

Grant Thornton LLP conducted a survey of Midwestern US Chief Financial Officers and senior comptrollers. These two graphs are the results of two portions of the survey.

BUSINESS TRAINING AND CONSULTING FIRM OPENS IN ABERDEEN Jay Rossman, owner of Jay T. Rossman and Associates, has opened a new training center in the Johnson Professional Building in Aberdeen, SD. The company offers customized training, consulting, and coaching based on a customer’s need. The services can be delivered at the firm’s training site or at the customer’s place of business. They also offer ad hoc coaching which will provide assistance to a person or company that needs to communicate a message regarding new, unique, or critical issues.

Prairie People

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.

CHOICE FINANCIAL SELECTS CEO

BRIAN JOHNSON

Brian Johnson is the new chief executive officer for Choice Financial, headquartered in Grafton, ND. Johnson has been with the company since 1999, and most recently was the chief operating officer. He has also been chief credit officer, and served as market president for the bank’s Grand Forks and Walhalla locations. Johnson is also a member of the company’s board of directors, senior credit committee, and executive management team.

ULTEIG HIRES CHIEF BUSINESS OFFICER

DAVID KARELS

David Karels is the new chief business officer for Ulteig, located in Fargo, ND. Karels has more than 20 years of construction and business management expertise at Ulteig. His management experience includes operations, financial management, sales, human resources, public relations, strategic position and planning, and technology implementation. He was the chief operating officer for NorSons, Inc., a role in which he was responsible for driving strategic growth and the daily business.

SDSU PROFESSOR SELECTED AS FIRST WOMAN TO HEAD AMERICAN SOCIETY OF AGRONOMY South Dakota State University, located in Brookings, SD, plant science professor Sharon Clay is the first woman ever chosen as president-elect of the American Society of Agronomy. Her term as president-elect begins in January. She will then serve as president in 2013. The 103-year-old American Society of Agronomy works closely with the Crop Science Society of America and the Soil Science Society of America. All three are based in Madison, WI. Challenges the group face include a growing worldwide population, higher prices for inputs such as nitrogen, depletion of phosphorus supplies used to make fertilizer, soil erosion by wind and water, and loss of farmland to SHARON urban development and depletion of groundwater aquifers. CLAY

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www.trainnd.com 14 Prairie Business

June 2011

REIERSON NAMED 2011 NAMA MARKETER OF THE YEAR

ROGER REIERSON

The most prestigious honor awarded by National AgriMarketing Association has been presented to Roger Reierson, President and Chairman of AdFarm and the Flint Group of agencies, in Fargo, ND. The award recognizes outstanding accomplishments in the agrimarketing field. He became president of Flint Communications in 1986 and under his leadership the company expanded into a network of companies, the Flint Group, that remain dedicated to building brands, businesses, and relationships.

SANFORD ABERDEEN HIRES FIRST CEO Gordon Larson will serve as the new medical center CEO for Sanford Aberdeen in Aberdeen, SD. Larson has served in health care leadership roles for nearly 20 years throughout the Midwest. Most recently, he served as the CEO for Winner Regional Healthcare Center in Winner, SD. Prior to that, he served as hospital CEO at Elbow Lake, MN. Larson has also held notable roles in Spirit Lake, IA, Galesburg, IL, and Cherokee, IA.

GORDON LARSON

prairiebizmag.com

Company Spotlight

MFG-South Dakota

MFG continues adapting to change “Our corporation looks at wind as a strategic issue for the country. Wind is where people aren’t. We have to get the power to where people are.” - David Giovannini, General Manager, MFG-South Dakota

16 Prairie Business

In less than four years, MFG-South Dakota, a subsidiary of Molded Fiber Glass Companies, has been able to start a new plant and then adapt its processes from making a 37-meter (120 feet) wind blade to a 40-meter (130 feet) wind blade. urrently, the Aberdeen, SD-based company has produced almost 1,000 of the larger blades for its primary customer, General Electric. This has meant that more than 350 teammates have had to adapt to the changes in a hurry. “As a new company, we are trying to mold a team,” says David Giovannini, General Manager. “In our environment there are processes that have to be closely controlled. It has to be done correctly and according to the process.” Molded Fiber Glass Companies or MFG, as it is commonly called, broke ground in November of 2007 in Aberdeen. At that time the company was scheduled to build 37-meter blades. The next year, driven by market conditions, GE required the new 40-meter blades and the company had to migrate to a new platform. Production of the larger blades started in August 2009. The company has increased the number of teammates by 30 in the last six months to almost 360 total employees

June 2011

and expects to hire an additional 50 over the balance of this year. The wind blades are constructed in a 316,000 square foot facility with a main bay almost ¼ mile long in northeast Aberdeen. There are nine acres set aside as a blade lot with a site total of 55 acres allowing MFG the ability to expand in the future if needed. The blades weigh more than 13,000 pounds with a length of 130 feet. Molded Fiber Glass Companies is a leader in the field of reinforced plastics and composites, serving diverse markets with a variety of composite material systems. There are 14 operating entities strategically focused to supply high value, high quality products, and manufacturing services for applications such as wind energy, automotive, heavy truck, defense, construction, material handling, and water treatment. The wind blade industry is just one of several markets for MFG around the country. MFG was founded by Robert

S. Morrison in 1948 in Ashtabuloa, OH. The two main watershed events came in 1953 when MFG began production of all Corvette fiber glass parts and then in 1955 when it developed a prototype and built the first fiber glass boat. Since then MFG has developed other markets including architectural, specialty automotive, transportation, seating, electrical, safety equipment, concrete forms, solar energy, rail, heavy truck, residential doors, and material handling. Wind turbine blades are sophisticated, engineered products whose manufacturing process is labor intensive. For example, a set of three blades cannot vary more than five millimeters in length from each other. This means the employees require a strong, mechanical aptitude, be able to communicate well, and be willing to work with change, Giovannini says. “Our teammates have become very good at adjusting to change,” he says. The company has developed a training program including new hire introductory classes, leadership development classes, new products classes, and have worked with the ACMA, (American Composites Manufacturers Association) and New Tec, to implement a nationally recognized Certified Composite Technician (CCT) program to develop the workforce. Finding an adequate workforce is the largest challenge for MFG. The company is working with city and state officials to draw workers to Aberdeen. It is a key focal point for the company and other businesses in the community. It is estimated that Aberdeen employers will need more than 1,000 workers to fill the workforce needs in the near future. Another challenge is keeping up with change. “One of our strategic objectives is to become good at change and being able to work with different molds and different processes,” Giovannini states. “What can we put in place to make it simpler? How do we put in place processes and equipments so we can move to the next level? From a production standpoint, how do we phase in and out of different processes?” A third challenge is the wind industry itself. “Our corporation looks at wind as a strategic issue for the country,” he adds. “Wind is where people aren’t. We have to get the power to where people are.”

Wind blade development

VOLUME: 2009: 210 BLADES HAULED ON 110 TRUCKS 2010: 615 BLADES HAULED ON 615 TRUCKS 2011: 816 BLADES HAULED ON 816 TRUCKS

Giovannini feels it will help if there is a stable federal policy. “Part of the solution to our energy needs is a renewable component,” he states. “We have to have the infrastructure to make it happen.” MFG has a full backlog of wind blade projects that need completing. “We continue to hire,” Giovannini says. “We see good opportunities in wind.” Heading into the future, MFG hopes to maintain its good relationship with its major customer and also develop itself into a top tier supplier of wind products. This means improving its products, as well as being as competitive as possible in the market place. “There are a lot of companies in this market,” Giovannini says. “If you want to be in the game you have to be at the top of the game.” As the Central Plains begins to develop wind generation facilities, General Electric and MFG expect more wind farms to the North and West including North Dakota, South Dakota, Wyoming, Montana, Idaho, and Colorado. PB Alan Van Ormer - avanormer@prairiebizmag.com

prairiebizmag.com

Money

Finding our marketing mojo In early 2009, an investment broker on the floor of the exchange declared the two most prudent positions to be in financial markets were “cash” and “fetal”. e quickly learned how sobering his quip actually was when the S&P 500 Index plummeted to an ominous intra-day low level of 666 on March 6 of that same year. It was just as the number insinuated – one hellish day in the U.S. stock market. Since that time, the S&P 500 Index has recovered quite well. As I write this article, the level of the S&P 500 Index has more than doubled off its lows and recently has narrowed the gap towards its all-time high set on October 9, 2007. Yet, it’s not a market rise that gives you great comfort or warm fuzzy feelings. Instead, it gives us feelings of uneasiness and disbelief. We no longer celebrate market run-ups. Instead, we sit back, scratch our heads and speculate on when the next market implosion will occur. Stock market investing seems to have evolved into a “hold your nose” grind, in which you hope the market works in your favor more often than not. The 12% rate of return assumptions prominently displayed in 1990’s retirement projections have been reduced in half by prudent financial advisors. These projections are now

ROSS ALMLIE Financial Advisor TCI Financial Advisors ralmlie@tciteam.com

delivered to clients with sharp-edged caveats and protective disclaimers. The timing of retirement is now largely induced by the stage of our bubble and burst cycle in which we are living. Clearly, we have lost our market mojo. It’s safe to say that investing, as we know it today, needs an overhaul. It needs a return of conviction of owning companies for years instead of just owning stocks for days or weeks. It needs a return of loyalty shown towards the fundamental investment process and away from algorithmic trading that benefit only those who can afford such an advantage. It needs a return of logical thinking that cuts through the headwinds of bogus financial entertainment programming. It needs more transparency and less dark pools of money. Above all, to avoid catastrophic economic consequences for our children, we need to equip the next generation with the tools that can make up for our generation’s misguidance. Do you think that kind of fundamental paradigm shift can start right here in the upper Midwest? It can. Stay tuned. PB

on the

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June 2011

Leadership

The customer is the key to future success Many indicators suggest the economy continues to improve, with a number of manufacturers supporting that outlook with anecdotes related to increased quoting opportunities, the quest to hire “the right” new employees, overtime schedules, and difficulty in securing necessary materials and components.

hat do business owners and managers regard as imperative for continued growth and success in this new economic environment? Many factors will play a role. Securing a stable workforce with the necessary academic, workplace, leadership, and technical skills is certainly important. Access to affordable benefits will enable employers to retain valued employees. It’s important to ensure that young people (and their primary influencers – parents and teachers) understand the truth about high-tech, high paying career opportunities in manufacturing. Crosstraining the workforce contributes to a manufacturer’s ability to be flexible and responsive to changing market conditions. Competitive tax rates and policies, along with sensible and efficient regulatory and licensing practices, will contribute to the continued success of manufacturers. Manufacturers also need access to capital for systems, equipment, and facility improvements that increase efficiency, enhance productivity, and open the doors to new markets and opportunities. More so than any of the factors mentioned previously, “relationships” are the key to continued success. Contract manufacturers who understand the win-win scenario of helping their customers achieve success adapt a culture and business model that focuses on cultivating ongoing relationships. Likewise, contract manufacturers seek to develop lasting relationships with their supply chain to ensure that materials, components and services arrive in the desired time, in the desired condition, at the agreed upon price. Successful companies develop methods of learning what their customers want and think in terms of providing a value-added experience - versus simply “selling stuff/selling services.” A corporate culture that’s focused on responsive communication with customers will serve as the backbone for continued success. PB Sandy Kashmark is the Executive Director of the Midwest Manufacturers Association. She can be reached at Midwest@runestone.net.

Let’s build a relationship, and your business. Let’s meet. Then let’s get to work. At Bremer Bank, it starts with getting to know you and your business. Finding opportunities that fit. Putting them together into a solid plan. Let’s take action. Your business. Our bank.

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RETAIL

COVER STORY

Maintaining our region’s downtown corridors Communities in the region are doing what they can to make the downtown area a place to check out and to do business in.

he downtown is the heart and soul of a community,” states Mike Hahn, President and CEO of the Fargo-Moorhead Downtown Community Partnership. “To really experience the feel of the community and perspective, you need a downtown. It is also reflective of the personality of the community.” Fargo has developed a Street Scape Project along Broadway Avenue that shaved a four-lane down to two-lane, as well as added different amenities to make the downtown a friendlier area to visit. In Sioux Falls, SD business leaders have broken a 50-acre spot into three different areas to help the public realize that downtown is more than just a few blocks along Phillips Avenue. “The health of downtown is a reflection on your entire community,”

20 Prairie Business

June 2011

says Jennifer Schmidtbauer, Vice President of Downtown Sioux Falls. “Historically, it was where commerce started and your government was located. A community that supports and invests in downtown really shows its importance and is a good yardstick of a community.”

DEVELOPING DOWNTOWN IN FARGO-MOORHEAD The Downtown Community Partnership is a private sector responsible for maintaining and developing a vibrant downtown for Fargo, ND, and Moorhead, MN, two communities that are divided by the Red River. While Fargo started the Street Scape Project on Broadway Avenue, Moorhead has reinvested in urban renewal around the mall by putting

commercial and residential units along the river. “It has become a nucleus for other developers,” Hahn says. The major challenge centers on funding for projects. Many buildings in the communities are close to 100 years old. “We need to make sure that anything we do makes financial sense,” Hahn says. In Fargo, another challenge is the lack of perceived parking. To remedy that, the Downtown Community Partnership is looking into a downtown circulator bus that runs every 15 minutes free of charge. Mass transit numbers now show that ridership has quadrupled the last few years to more than two million riders on the current transit system. The two downtown areas have been recognized as a neat, fun, and trendy place to be, Hahn adds. “There is a tremendous advantage in Fargo of having North Dakota State University downtown and in Moorhead of having Concordia College and Minnesota State University-Moorhead downtown,” he says. “This generation sees downtown as a hip place to be, a place to socialize.” Hahn feels the next generation will be living downtown and liking that type of environment. “The challenge for us is to make sure it is inviting, make sure it is clean, make sure it is safe, and make sure it is appealing so we can maintain that vibrancy.”

SIOUX FALLS DOWNTOWN DIVIDED INTO THREE SECTIONS In the last 10 years, Sioux Falls has invested in a section of downtown from Phillips Avenue to Falls Park. “Historically, in the minds of the public, downtown has been Phillips Avenue,” Schmidtbauer says.

However, downtown is more than just Phillips Avenue. The downtown area is approximately 50 acres running north and south from McClellan Avenue to 14th Street and east and west from Minnesota Avenue to Franklin Avenue. In addition, it is broken into three distinct sections. One section is called Central Downtown which consists of the central business districts and larger employers such as financial and investment. However, over the past few years that area has added restaurants and retail. Then there is the Phillips to the Falls area. The city has cleaned up the area and moved in parks and sculpture walks directing people to Falls Park. It has also spurred interest in developing for commercial and mixed use. There are now restaurants, bakeries, and service-type businesses that have moved in. The final area across the Big Sioux River is called the East Bank. The major development has been between 6th Street and 10th Street. It is more of an artsy, eclectic, fun area for dining, local art and music and other entertainment sites, as well as business development. 8th and Railroad Center calls East Bank its home. There are 78 businesses in the building including at least 30 artists, high tech companies, web design companies, as well as trust fund companies, retailers, and two of the top restaurants in Sioux Falls. Steve Tinklenberg, General Manager for 8th and Railroad Center, believes people are beginning to understand that downtown is a day event and a total experience. “If you lose downtown, it would be a depressive place to be,” he states. “That is not the case here. It has been exciting to watch it all happen. We are right in the heart of downtown.”

prairiebizmag.com

RETAIL

COVER STORY

Fargo Historic Downtown projects: Renaissance Zone:

MANDAN WORKING ON STORE FRONTS

195 Storefront Rehab:

60 Historic Preservation Tax Credits:

New Construction:

Tinklenberg explains that businesses are located in 8th and Railroad Center to draw people to the building. “The reality is you provide good service and make it a one-stop that draws people,” he adds. “The whole point is to make it a destination to spend an entire day.” And it seems to be working. In 1995, property values were $75 million in the downtown area. Ten years later, that number increased to $149 million. There are 11,000 people working downtown, 1,300 living downtown, and 40 restaurants and 60 retailers located downtown. “We are continuing to work on developing and repurposing existing buildings,” Schmidtbauer explains. “Buildings that are not currently being utilized have been made a priority by the city for redevelopment.”

Downtown property values in the last 12 years: 1999: $125,785,000 2011: $247,130,500 Source: City of Fargo

Historically important events for Downtown Sioux Falls 1989 Creation of Downtown Sioux Falls

1999 Washington Pavilion

2004 Phillips to the Falls

2005 Zip Feeds Demolition

Mandan, ND started a store front project in 2006 to help businesses add investment to their buildings. The city provides up to $10,000 in matching funds for the project. In addition, the community has participated in the Renaissance Program that allows a property tax and state income tax exemption up to five years at 100 percent for qualifying reinvestment or new construction in a 28 block area. “Investment in buildings is like investing in infrastructure,” states Ellen Huber, Business Development Director for the City of Mandan. “By investing in that building we are improving the business environment in our community.” Sometimes the programs bring in new business like The Harvest Brazilian Barbecue or Bird Dog Brewing Company slated to open in 2011, as well as making an old building available for purchase and reinvestment. The Renaissance program has generated more than $9 million in private investment in new construction and renovation. In the Renaissance program there have been 11 expanded businesses, six new businesses, and five retained businesses. An estimated 50 new jobs have been created. “Our sales tax collections and restaurant and lodging collections are up for 2010 at record levels,” Huber states. “The most important thing is the change in attitude and change in perception of our community. We are making it a welcoming and more inviting atmosphere to do business in and to visit.” The major challenge is working to leverage as much private investment as possible from the private sector.

2008 Reconstruction of Phillips Ave., 10th Street to 12th Street

2010-2012 River Greenway Improvements

2011-2012 Redevelopment of Schoeneman Site (Anticipated)

2014 Relocation of Railroad Tracks Source: Downtown Sioux Falls

22 Prairie Business

MORE THAN 30 YEARS OF WORK IN WATERTOWN The Urban Renewal District has been in place in Watertown, SD since 1978 and encompasses 26 city blocks in the Uptown. The Uptown District also has a state designation of being on a list of “National Historic Districts.” In the past year, several types of businesses have been helped in the Uptown; mostly façade improvements. For example, the Urban Renewal District helped Past Times put new windows, tuck-pointing, and signage, as well as helping a new yoga studio move into the area by financially assisting the building owner in renovating the structure. Also, the Downtown is currently renovating public restrooms; a $91,000 project that is a cooperative effort between the City of Watertown and the Urban Renewal District. June 2011

Urban Renewal District Executive Director Alisa Beving says the impact being made to the district is giving the buying power back to the people. “We offer a 50-50 matching grant program for façade improvements that fall within the Secretary of the Interiors standards for a historic district,” she explains. “This means simply that it does not have an adverse impact on the image and overall look and appearance of the Uptown as a Historic District.” Within the past two years, the Urban Renewal District has granted more than $65,000 to businesses. “We try to focus more on bricks and mortar type issues rather than overlapping what the Convention and Visitors Bureau handles with their efforts to reach visitors,” Beving states. “We concern ourselves with the structure and appearance of the area.” The Urban Renewal District has provided a creative way of handling parking Uptown by placing 30 art deco bicycle racks in the area. “The other major issue is the dilapidating structures, just like any other Urban area, they are some of the oldest buildings and so at this time they need some love and care and attention for the right owners with the right support,” Beving states. In the end, Beving comments that downtown revitalization says a community embraces the fact that the future is made from building blocks of the past. “The more we value where we came from the more clear the future becomes on where we need to go,” she concludes. PB Alan Van Ormer - avanormer@prairiebizmag.com

prairiebizmag.com

HEALTH CARE

COVER STORY

24 Prairie Business

Leaving a legacy for children T. Denny Sanford, chairman of the United National Corporation, a banking business in Sioux Falls, SD, continues his giving ways to help find a way to combat disease, and in particular, to help provide children a quality of life.

June 2011

arlier this year, Sanford was listed as the third most generous American in 2010. According to the Chronicle of Philanthropy, Sanford donated $162.5 million during the year. His biggest beneficiary was the Sanford Health Foundation. Other key beneficiaries were the Sanford-Burnham Medical Research Institute and the Florida Hospital for Children. Nationally, George Soros, chairman of Soros Fund Management in New York, was the most generous American donating $332 million in 2010. Brian Mortenson, President of the Sanford Health Foundation, says he has heard Sanford talk about his most rewarding gift by providing an impact for children. “He gets so enthused,” Mortenson says. “He is touched by the impact of his donations including the recent Sanford Children’s clinic opening in Oceanside, California which will benefit more than 100,000 kids in the region who are underserved in primary health care.” Mortenson says that from his observations Sanford found a lot of success during his career and was grateful for his successes in a way that he has desired to invest in social capital to make a difference in people. Mortenson, who leads the philanthropic wing at Sanford Health, has close involvement with those involved in the development of relationships and opportunity involving philanthropy. “His loyalty relates to the people he has employed in South Dakota who have worked hard and have been committed to his company,” Mortenson says. “All of his charitable giving and philanthropic endeavors he really approaches with same perspective as he has with his business investments.” Sanford, 75, gave $100 million to the Sanford Health Foundation in Sioux Falls in 2010 to establish a national institute focused on research into and treatment of breast cancer. In 2007, he pledged $400 million to the foundation to establish pediatric clinics in the United States and abroad and to support pediatric health care and medical research. Sanford originally planned to fulfill this pledge in eight years, but he completed it in two years because of the impact his gift was already having on health care. The timing of Sanford’s gifts are very interesting, according to Mortenson. “There has been a methodical and intentional coming together with him on a regular basis. We talk through these issues and establish the best strategic approach to get the job done,” he explains. “When he is at a place where he feels comfortable and enthused about the next big thing we are doing together, he commits to it. There is no magical formula other than in his heart

and the conviction that it is time.” Sanford specific focal point is to zero in on diabetes and childhood illness. With Sanford’s generosity, Sanford Health has enhanced its Centers of Excellence and is committed to a high level of growth and accomplishments in people and facilities. Sanford provided a $16 million lead gift to establish the Castle of Care. “That began our relationship with him,” Mortenson states. “We continue to cultivate and steward that relationship.” Sanford’s giving impacts our world in two ways, Mortenson says. The first is actually accomplishing medical and scientific discovery in a way that directly impacts human life and families. The second involves his strong concern for children. “His personal philosophy surrounds the generation of kids in our communities and in our world who are in a vulnerable place,” Mortenson states. “By helping kids to get to the best possible start in life through health and education, that is where we can have an impact on the future of this world.” PB Alan Van Ormer - avanormer@prairiebizmag.com

Denny Sanford’s

Gift of Giving

2004

$16 million for the new Sanford Children’s Hospital 2007

$5 million

to create the Mayo Clinic/Sanford Health pediatric collaboration 2007

$20 million

directed for growth and development of the Sanford School of Medicine at the University of South Dakota

2008

$20 million

to Sanford Health to develop collaboration programming with the Burnham Institute for Medical Research in LaJolla, CA including establishing the Sanford Children’s Health Research Center in California and South Dakota 2010

$100 million

to Sanford Health to establish a national breast cancer center

2007

$400 million

to Sanford Health to establish children’s clinics around the world, cure a specific disease and to expand area health care facilities and broaden medical research prairiebizmag.com

RURAL DEVELOPMENT

COVER STORY

26 Prairie Business

Infrastructure cultivates business climate Highways, water treatment facilities, and telecommunications – you name it many states are in need of infrastructure improvements to help cultivate a business climate in the region. ighways, water treatment facilities, and telecommunications – you name it - many states are in need of infrastructure improvements to help cultivate a business climate in the region. “Infrastructure, by definition, provides the fundamental facilities and systems by which any given area thrives,” states Colleen Landkamer, USDA Rural Development State Director in Minnesota. “We can’t expect to attract businesses to a community without access to clean drinking water or modern wastewater treatment. We can’t expect a business to consider locating in an area without high-speed broadband access or quality healthcare. We can’t expect businesses to remain in an area if there is not enough affordable housing to accommodate the workforce. Everything is tied together, and I think people are starting to realize that. Job creation starts with investing in infrastructure.” In 2011, the Minnesota Department of Transportation has a nearly $900 million construction program statewide. Three years earlier, Mn/DOT received special funds for bridge replacement and repair through 2018. In addition, the ‘Better Roads for a Better Minnesota’ program is taking place between 2012 and 2015. In South Dakota, Gov. Dennis Daugaard’s Chief of Staff Dustin Johnson says the state government sees communities addressing them about water infrastructure and water treatment, as well as electrical infrastructure. South Dakota’s northern neighbor has developed an historic investment package for statewide transportation infrastructure. North Dakota’s Department of Transportation budget of $1.73 billion includes unprecedented funding for major roadway reconstruction projects and repairs to state, county, city, and township roads throughout the state. The state’s infrastructure funding includes: $600 million to rebuild and repair state highways in every region of the state. $228.6 million from the Permanent Oil Tax Trust Fund for state highway projects within the 17 oil and gas producing counties in western North Dakota. $142 million from the Permanent Oil Tax Trust Fund for reconstruction and repair projects on city, county, and township roads within the state’s oil and gas counties. $60 million dedicated to the repair and rebuilding of city, county, and township roads in counties outside the state’s oil and gas region. $5.85 million dedicated from the general fund for state

June 2011

road reconstruction and repair projects in the Devils Lake area. In South Dakota, since 1993 the Governor’s Omnibus Water Funding Bill has appropriated $150 million; more than 58 percent of it went toward regional drinking water projects and another 16 percent to sanitary and storm sewer projects. In addition, another 52 percent of funds coming from different sources for South Dakota’s water infrastructure programs have went to major projects on the State Water Resources Management System including Lewis and Clark Regional Water System, Sioux Falls Flood Control Project, Mni Wiconi Rural Water System, and Mid-Dakota Rural Water System. Outside of the water systems, Johnson states that transportation is still important, particularly maintaining the roadways in the state. “Flooding has wreaked havoc on roads throughout eastern South Dakota,” Johnson explains. “Some counties have millions of dollars in transportation needs, and they’re concerned about where that money will come from. At the state level we’re trying to help by swapping restrictive federal dollars given to those local governments for state dollars that provide them with far more flexibility. ” Telecommunications is another major infrastructure need in the state. “We have a good telecommunications infrastructure in the state that helped create development that wouldn’t have happened without it,” Johnson states. “We also have 10s of thousands of South Dakotans who don’t have high speed internet and we want to make sure there is high speed internet throughout all of the communities.” Western Minnesota faces many of the same needs that other communities in rural Minnesota face: Updated infrastructure, access to quality health care, broadband capability, and business development. “Western Minnesota has been particularly hard hit recently with population decline. In my opinion, people are going to go where the jobs are, and if you create more quality jobs in a region, the people will come,” Landkamer states. “However, that statement is not as black and white as it sounds. Jobs don’t get created because we talk about creating them. Jobs happen when communities invest in infrastructure, health care facilities, high-speed Internet, affordable housing, and programs that engage the private sector.” PB Alan Van Ormer - avanormer@prairiebizmag.com

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Community Spotlight

Dickinson, ND

Energy impact challenging Dickinson

Dennis Johnson, Dickinson City Commission President

Managing and coping with western North Dakota’s energy impact has become a major challenge for Dickinson, ND.

Terri Thiel, Executive Director, Dickinson Convention and Visitors Bureau

Suzi Sobolik, Physical Therapist

Mary Massad, Manager/ CEO, Southwest Water Authority

28 Prairie Business

ity leaders are finding ways to deal with housing issues, expanding the community’s infrastructure, and even traffic management, as well as a litany of other issues and needs in the community of almost 18,000 people with a regional population of almost 40,000. “Dickinson is a successful community to start with,” explains Lexi Sebastian, Executive Director of the Dickinson Area Chamber of Commerce. “The influx of people that we have added to our energy boom has even added more.” The energy boom has seen an increase in single family housing and commercial permits. In the future, commercial permits are expected to outpace 2010. In 2010 there were 41 permits for commercial construction. In addition, the city is looking at five priorities related to city infrastructure. These priorities include waste water treatment facility, regional landfill expansion, solid waste service expansion (lift stations,) Public Works building, and City Hall remodeling and parking. The total projects cost for all of these projects is more than $35 million. Terri Thiel, Executive Director of the Dickinson Convention & Visitors Bureau, says on a national level Dickinson has drawn so much more attention than in the past. The main focus of the CVB is helping leisure travelers, however, recently, the CVB has expanded to help energy workers and others looking to settle in the area by providing information. “People being drawn to this area

June 2011

are seeing Dickinson as a place for job stability,” she says. “People are finding that there are jobs here. It has become much busier for us.” In the month of April, the Dickinson CVB averaged 1 to 3 per day individuals coming in asking about housing, lodging, job service, and oil related companies. Steve Glasser, the Executive Director of the Strom Center for Entrepreneurship and Innovation, says the largest change is the new business opportunities. Since Jan. 1, the Strom Center has worked with more than 130 clients in Dickinson. Because of the increase, Glasser has also had to add satellite offices in smaller communities like Beach and Bowman. “This is all because of the changes taking place in the region,” he states. “Things are changing rapidly. The types of clients are very diverse, which is good.” City Administrator Shawn Kessel was born in Dickinson and just returned 30 months ago. “It is amazing to be part of a resiliency that has existed here,” he says. “The community has been dominated by growth in every area.” Even the community’s major mall has seen a change over the last 24 months. “We don’t have to call for tenants,” states Peggy O’Brien, Prairie Hills Mall Manager. “They have been calling us. There was no interest in the past, now we get 16 calls a week. We are working to put together the perfect tenant mix.”

Gaylon Baker, Executive Vice President of the Stark Development Corporation, says there has been a shift to emphasize attraction of employees. “The big focus is to have enough workforce available,” he states. Another major impact is housing. “The population growth is outpacing the pace in which we can build new housing,” Baker states. Dickinson City Commission President Dennis Johnson, who is also the Chairman and Executive Director of TMI Systems Design Corporation, says the North Dakota State Legislature recognizes Dickinson is an oil hub city. “Energy has become a big gorilla in the room. Now, we have more jobs than people.” Dickinson is also seeing a growing and a more active young professional organization. Suzi Sobolik, who is a physical therapist in Dickinson, as well as an active participant in the young professional group, says this helps keep the community growing for the future. “Getting young people out in the community provides them an opportunity to meet with leaders,” she explains. There is also a large demand for the airline services. Matthew Remynse, Manager of the Dickinson Airport, states that there are transient workers who fly home. “Companies bringing workers in has grown our employment,” he says. “We have seen an increase in private aircrafts for the oil industry.” Bakken first started expanding in 2006 and Dickinson was sitting on the bottom edge of the Bakken. Now there has been more exploration in the Three Forks Formation, which expands further south and increases leasing activities between Dickinson and the South Dakota border. “The impact is really accelerating and growing in intensity,” Johnson states.

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Community Spotlight

Dickinson, ND

Kevin Thompson of the Dickinson State University Foundation, says this expansion has also changed the attitude of communities in the region from a can’t do to a will do. “With that attitude, we’re making things happen,” he states. To help that demand, sales tax receipts grew by 20 percent in 2010. Over the last five years, the sales tax receipts averaged more than 10 percent. The sales tax, along with other funding, allows the city to stick dollars into new infrastructure, which includes new housing units. Most of the housing has come from new development and the city of Dickinson funded 50 percent of the costs in special assessment tax. The community needs to construct at least 500 living units each year to keep up with the demand. “Housing continues to be a major issue and will be a major issue for a long time,” says Thompson, adding that Dickinson State University has to also find housing units for an increased enrollment in college students on campus. One area – agriculture – continues to thrive. “The agriculture sector has had a great couple of years,” Thompson adds. “This year should be a very good year.” Finding quality physicians and other associated with the health care field is another challenge. “There is a shortage across the country, especially in the rural areas,” Sobolik states. “Through all the growing and amenities, physicians can see this is a great place to

Heart River Golf Course

Mary Hall

Dickinson Community Center

come to.” With the challenge of business leaders continuing to keep employees with competitive wages, it is also changing the way the community advertises. For example, Sebastian states that the classified section in the newspaper looks like a coloring box. “We’re getting creative and finding competitive benefits to compensate with wages,” she says. The Chamber provides a relocation for those intending to move to Dickinson. The Chamber averages 20 packets each month and that doubled in the past month. Last year, more than 400 relocation packets were sent out. Another challenge is water. The Southwest Water Authority is developing projects to assist not only Dickinson, but also the 12 counties in southwest North Dakota. The Authority is working to meet the increased need for the oil industry and the people throughout the region. The Authority has one water depot in the area, but they are working on other locations and working in harmony with communities that the Authority serves, states Mary Massad, Manager and CEO of the Southwest Water Authority. “Water is so necessary for quality of life and economic development,” she says. “The growth we are seeing is more than we have anticipated. We have to find ways to meet those needs.” Glasser looks at it this way. “There are lots of opportunities, but because of challenges it creates some

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D I C K I N S O N S TAT E U N I V E R S I T Y roadblocks,” he says. The biggest opportunity is population growth, which means people want to see more retail and restaurants. With all the growth, there is the opportunity for Dickinson to become a regional hub city. In addition, there is an opportunity for diversified economy. The city of Dickinson is also developing a comprehensive plan to help with growth. The plan is expected to be developed within the next 18 months. Also, with the influx of people, there is a need for services, which could also occur in the outlying communities. “As these surrounding communities develop and become stronger, it helps Dickinson become stronger,” O’Brien states. Baker feels the additional growth is a wonderful opportunity to design great neighborhoods. “The whole comprehensive planning process gives us an opportunity because people are paying attention,” he explains. “We have the opportunity to engage the population in determining their own future. “ PB Alan Van Ormer avanormer@prairiebizmag.com

4.)%* ./ 5!)#00#/)# DSU is a vibrant institution that is focused on excellence in academics and student success. We make one promise to students:

+" !/*!-/* (") +" ," '/*-+ +&$#'.% While a lot of universities make similar claims, at DSU we carry through by offering rigorous academic programs and numerous leadership opportunities.

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For more information, call 800.279.HAWK or visit us online www.dickinsonstate.edu

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Midwestern potential to harness solar power One needs only to listen to the corn grow in July or sit in a south-facing window in January to feel the power of the sun on the plains of the Upper Midwest. But are its rays direct enough here to allow this region to tap into the power of solar? Business leaders and industry experts respond with one word – absolutely.

oday, solar energy is the fastest growing energy technology in the United States. According to the Solar Energy Industries Association (SEIA), a DC-based non-profit trade group representing 1,000 companies across the supply chain, the deployment of solar technology has exploded since 2005 – in fact, it has achieved more than a 100 percent market growth rate in each of the last two years. Solar electric capacity doubled between 2009 and 2010. Solar photovoltaic (PV) installations are projected to double again in 2011. In 2010 there was enough solar technology installed in the U.S. to power almost 200,000 homes. Overall, the 2,600 megawatts of solar power now in place is enough to power more than a half-million homes nationwide.

U.S. Solar Electric Installations: 2000-2010 1,000 900 800 700 600 500 400 300 200 100 2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

Source: SEIA

“Solar works everywhere in the U.S.,” says Monique Hanis, spokesperson for the SEIA. “In your region there’s an opportunity for home owners, business owners and utilities to put solar in place.” The solar industry’s growth was kick-started at the federal level in 2005 with the passage of a 30 percent tax credit, a credit available to anyone – home owners, commercial properties and utilities. The credit was extended in 2008 for eight more years, through 2016. This was the first incentive for solar at the federal level, and it had a significant impact. “It gave a signal to the market that there was going to be some consistent support,” Hanis explains. At the same time, she notes, states were also looking at policies to promote solar as a way to encourage the establishment of manufacturing. Today, 29 states plus the District of Columbia and Puerto Rico have Renewable Portfolio Standards (RPS), a requirement for electric utilities to supply a specified minimum amount of customer load with electricity from eligible renewable energy sources. Seven states have Renewable Portfolio Goals (RPG), including North and South Dakota, which call for 10 percent of electricity coming from 32 Prairie Business Energy

June 2011

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Not surprisingly, California and Hawaii are strong solar markets. But New Jersey is actually the second largest solar market in the country, which the SEIA says has been accomplished by a policy environment that makes solar technology an attractive investment for entrepreneurs. “Temperature is one thing, but we operate on radiation,” explains Randy Hagen, President of Solar Skies Mfg., LLC in Alexandria, MN. He says the U.S. as a whole is a good solar resource, but it’s common for people in this region to be skeptical that solar can work here, too. “We have as much annual radiation as Houston, Texas and the panhandle of Florida,” Hagen notes. The Dakotas and Minnesota certainly aren’t as sunny as the desert Southwest, but even during the coldest part of winter, skies are often clear and sunny. Hagen founded Solar Skies in 2005 with an invention for aircraft, a ventilating fan powered by solar electricity. Though that particular States with RPS that potentially include biogas from anaerobic digestion component is now being manufactured by a firm in Oklahoma, he kept States with RPG (i.e., non-mandated) that potentially include biogas from anaerobic digestion the company name and has moved into a new area of opportunity – renewable sources by 2015. Minnesota has an RPS requiring 25 percent solar thermal. by 2025. Solar Skies today manufactures durable, commercial-grade solar collectors that produce hot water. Though it’s a small company, With cold and often long winters, Midwesterners may wonder if this employing about a dozen people, it is one of the leading manufacturers region even has the potential to explore solar power. The answer is yes. in the nation. Photovoltaic solar works pretty well in most places, according to the “Hot water really caught my eye,” Hagen explains. “I really found SEIA. A striking example is Germany – Germany is the largest solar this to be more practical, more affordable. Everyone uses hot water.” market in the world, and it has the solar resources equivalent to And in a rural setting there are many applications: dairy, poultry or hog Anchorage, AL. That should speak volumes that this region, too, can barns, radiant floor heat for buildings, and more. Hagen notes that the participate fully in solar technologies and what they can mean to the state of Hawaii has actually mandated the use of solar thermal on new economy. buildings, which he believes speaks volumes to how efficient solar Germany is the world leader in solar electric installations, followed thermal is. by Italy, the U.S. and Japan. The Solar Energy Industries Association has observed an uptick in the number of companies involved in solar, Photovoltaic Solar Resource: United States and Germany now numbering about 4,500 across the U.S. More than 100,000 people nationwide are currently working in the solar industry. In addition to manufacturing, jobs can be found all across the supply chain – roofers, electricians, plumbers, support staff in marketing, legal, finance and more. Many of these jobs are, or could be, located in this region. Paul Batcheller, partner in Sioux Falls, SD-based venture capital firm PrairieGold Venture Partners, also sees a future in solar. PrairieGold’s portfolio includes tenKsolar, a Bloomington, MN company that manufactures and markets solar photovoltaic solutions. Batcheller notes that solar technology costs have really come down in the last 12 to 18 months. “It’s a trend we see continuing going forward,” he says. Hanis agrees, explaining that as more companies enter the solar industry, competition increases and costs come down. Annual average solar resource data are for a solar collector oriented toward the south at a tilt = local latitude. The data for Hawaii and the 48 contiguous states are In fact, solar costs declined more than 20 derived from a model developed at SUNY/Albany using geostationary weather satellite data for the period 1998-2005. The data for Alaska are derived from a 40km satellite and surface cloud cover database for the period 1995-1991 (NREL, 2003). The data for Germany were acquired from the Joint Research Center of the percent in 2010 alone. European Commission and is the yearly sum of global irradiation on an optimally-inclined surface for the period 1981-1990. Batcheller sees solar as a “tale of two This map was produced by the National Renewable Energy Laboratory for the U.S. Department of Energy May 30,2008

34 Prairie Business Energy

June 2011

markets” today in the U.S. – those that have incentives in place, and those that do not. He notes the strong renewable mandate in Minnesota, plus incentive packages specifically for solar, which has helped spur activity there. North and South Dakota do not yet have incentives to help solar power gain a foothold, and with relatively low energy costs, it hasn’t taken off there to a great degree. “It’s very much driven by state policy today,” Batcheller says. Minnesota state incentives for solar include property and sales tax exemptions, a rebate program for solar hot water, and rebate programs through various utility companies. A comprehensive list of renewable energy incentives, including solar, can be found at www.dsireusa.org. The CEO of another South Dakota-based firm agrees that incentives can drive growth. Brian Gramm’s company, Peppermint Clean Energy, is also seeing more activity in Minnesota than in the Dakotas due to the state policy environment. Gramm encourages legislators to look at policies such as net metering, small changes that can have a big impact. “I would strongly encourage our leaders to take a look at what we need to do to be in the mix, to be an important part of the conversation moving forward,” Gramm says. Peppermint Clean Energy began operations in Sioux Falls last year as a retailer and installer of residential and commercial renewable energy products, including solar technologies. Gramm says their approach is unique because it offers these systems in a zero-down setting; the homeowner or business can effectively lease the system, allowing the return on investment – the lower utility bills – to happen on the very first day. A quicker ROI makes the decision to opt for renewable energy much easier, he believes. Gramm is also focused on creating a more efficient market, one that’s not so fragmented. He sees Peppermint as a portal through which renewable energy products can be presented to the mass market and “voted on” by the consumer, much the same as how a retailer like Best Buy brings brands together in one location and gives the consumer a single point to see many products. “I’m fully convinced that we will most likely see a day in the not so distant future where there will be solar or a solar-wind combination on every home,” Gramm says. He compares solar’s potential to the revolution already seen with personal computers and cell phones – everyone will have one. Randy Hagen believes it’s a level playing field that will make the difference, and incentives are a great way to achieve that. Also, if a financing mechanism could be found that allows home or business owners to see a payback immediately, instead of over a long period of time, he believes installing solar technology is a much easier decision. But, as time goes on and more people become familiar with solar, it will no longer be considered a “new technology.” “We need to build trust in the product,” Hagen says, “and I think we’re gaining that all along.” With expansion going strong and costs coming down, solar power is a strong opportunity for the U.S. “There has never been a better time to go solar,” Hanis concludes. “It’s easier and much more affordable than most people think.” Kristin Brekke Vandersnick is a Willow Lake, SD-based freelance writer. She can be reached at brekkefarm@gmail.com.

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Making sure mineral rights are taken care of The state of North Dakota and many oil companies are reaping benefits from the oil play in the Bakken in western North Dakota.

U? Did

know

The University of South Dakota in Vermillion is one of the nations “greenest” academic institutions according to the Princeton Review.

ut, how do those who own mineral rights do what is necessary to pass this asset on to the next generation? “We’re impacted by this in so many different ways. Land owners are impacted one way. Mineral owners are impacted in other ways,” says Carleen Shilling, Partner at Eide Bailly in Bismarck, ND. “We’re in a global economy. We need to understand all of that comes together and how it impacts us personally.” Shilling is one of several CPAs in the state working with land owners discussing planning for mineral rights. “The energy industry is accustomed to dealing with mineral interests that are owned by a number of people or any number of entities,” she says. “The planning we’re doing does not negatively impact the oil industry. In fact, it makes it more manageable for certain aspects of the energy industry. For example negotiating leases with a representative of a group of owners organized as an LLC or partnership is more efficient than negotiating with several individual owners with undivided interests in mineral acres.” Thomas Reichert, CPA for Brady, Martz & Associates in Dickinson, ND, says his company frequently works with clients who have direct or indirect ownership of mineral rights. “In the last several years, it has been a more significant part of our practice,” he states. This type of work is starting to evolve because the development of the Bakken and Three Forks Formation has become so widespread, impacting most mineral owners in the western quarter of the state. “So many taxpayers have received or will be receiving mineral income. At Brady Martz we deal with mineral related questions almost daily,” Reichert states. “That never used to be the case.” Reichert adds that it is important to discuss planning because in many cases income from mineral rights, lease bonus payments, or royalty income is a large part of the taxpayers annual income so planning for tax consequences, mitigating taxes, investing the proceeds, as well as transferring producing minerals rights to the next generation are all important issues that our clients need

36 Prairie Business Energy

June 2011

help with. “In so many cases the new wealth comes so fast and is so significant some mineral owners and family have trouble adjusting,” Reichert explains. “Education related to options and opportunities is a real challenge.” Shilling believes it is important to discuss planning for family ownership and transfer of mineral rights for both economic and personal reasons. The economic reason includes the ability to minimize income tax paid on the royalty and lease bonus income generated from mineral production. “Capturing all of the depletion and operating expenses associated with that revenue helps to minimize the income tax,” she explains. “Then there is the need for family planning and estate tax planning to make sure the property is passed on to those who you want to end up with the property.” Shilling adds that if a mineral rights owner doesn’t choose to designate the beneficiaries of his/her estate during their lifetime through a will or proper titling, the property transfers according to provisions of state law. “If you fail to say who you want to have those assets, the state gets to take care of that for you,” she says. There may be an estate tax liability, depending on the extent of wealth that a mineral rights owner accumulates during lifetime. Proper planning will result in the least amount of estate tax paid, with the greatest amount of the assets being passed to the next generations. “Wealth can cause damage to family relationships, as well as the good that can come from the money,” she says. “We have helped to provide solutions in many of these situations.” Eide Bailly has been operating in North Dakota for approximately 80 years; at least 30 years in the Bismarck area. They have served agriculture and business clients in western North Dakota during that time. Being a fullservice CPA firm, the company has the ability to offer services needed for tax and estate planning, as well as wealth management. As for the mineral rights owner, Shilling states Eide Bailly acts somewhat as a ‘gatekeeper’ because many of

these individuals have already been coming to Eide Bailly for income tax purposes. Now they also come to discuss what to do with their mineral rights. In the past, land was sold and the minerals transferred under state law if the mineral rights were not excluded from the sale. “You seldom see that anymore,” Shilling explains. “The minerals themselves were there, but their value wasn’t always recognized until recently. Their value creates a new asset to the broader population.” Possibly the biggest challenge is to solve the transfer issue. “It has become a precious asset,” Shilling states. “Mineral rights are relatively easy to share among multiple owners. They just don’t know the many options they have to accomplish their wishes , so managing the asset becomes a challenge to the mineral owners. Then, what do you do with the money earned when the minerals produce income?” There are more people with mineral rights than there are actual land owners, Shilling adds. “Land has a value, but more than that there is value to minerals and the untapped production. All these factors add value quickly for an individual who may not have previously had an estate tax problem.” Recent strong commodity prices have also impacted land values. “The combination of all of these factors has resulted in much greater value to the family assets. That happened rather quickly, but many of our clients are now recognizing they need to do something and are seeking help from their advisors,” she says. Then there is a question of how long will the oil play go on? “The land is always there,” Shilling states. “This one is predicted to last longer than earlier plays, but no one really knows what the long-term value is. The current estate tax laws may not apply in the future, either. But neither of those are reasons to avoid the discussing your situation with your financial advisors. ” Brady Martz is working to educate clients on the tax impact of mineral income, considerations related to leasing minerals, including determining fair lease terms and planning for future production in income. “Some clients are prepared for this new wealth and some are not,” Reichert explains. “We advise and encourage our clients to seek legal, investment, and tax help to properly manage this new income source for their benefit as well as the future generations.” Alan Van Ormer - avanormer@prairiebizmag.com

Global Clean-Energy Market Size 2000-2010 Year 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Solar PV

Global Market Size

(In $Billions)

$2.5 $3.0 $3.5 $4.7 $7.2 $11.2 $15.6 $20.3 $29.6 $36.1 $72.1

Wind Power Global Market Size

(In $Billions)

$4.0 $4.6 $5.5 $7.5 $8.0 $11.8 $17.9 $30.1 $51.4 $63.5 $60.5

Biofuels

Global Market Size

(In $Billions)

N/A N/A N/A N/A N/A $15.7 $20.5 $25.4 $34.8 $44.9 $56.4

Source: Clean Edge, Inc., 2011

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Small wind projects still sprouting up In Moorhead, MN, the community was looking at something special and that would be cutting edge in energy, but also still within the realm of the expertise of the Moorhead Public Service. They designed two wind turbines that provide a small source of energy for the community. ut maybe more importantly, the wind turbines were built to encourage people in Moorhead to engage energy projects in homes and businesses. “It does reduce the power we buy,” states Dennis Eisenbraun, Energy Services Manager for Moorhead Public Service. “At the time we built the two turbines (in 1998) we had more green power per capita than any other community in the country.” Small community wind turbine projects can be difficult to develop In Willmar, MN, business leaders found out that wind energy without subsidies per kilowatt is higher than electricity that can be bought off line. “It has created a situation that many producers of renewable energy must address,” says Steve Renquist, Executive Director of the Kandiyohi County and City of Willmar Economic Development Commission. “We need to do a better job of reducing our energy production cost to compete with more traditional forms of energy. We remain convinced our project and many forms of renewable energy are very viable. We do understand the market is competitive but, we believe it is in all of our interest to not wait until traditional energy is no longer plentiful and inexpensive prior to developing viable renewable energy projects.” Renquist says that in Willmar, wind seems to be a natural fit, adding that the community is vested with selfreliance and a make do with what you have type of attitude. “In western Minnesota, we have an abundant ambient wind,” he states. “We want to use this resource to create businesses, create job opportunities, and create wealth. Like all business this will be done by creating a positive cash flow. Right now, proponents of wind energy are continually working to improve efficiency and the bottom line.” An example of utilizing the wind generated renewable

38 Prairie Business Energy

June 2011

resource to cause business creation is a local effort to produce anhydrous ammonia by using wind created electricity and water. Renquist states the technology is in place and they hope to evolve the business model and start the plant in one year.

OTHERS HAVE FOUND A WAY TO DEVELOP SMALL PROJECTS South Dakota has developed several small or community wind projects. They include the PrairieWinds Chamberlain Project, two 1.3 megawatt wind turbines near Chamberlain, owned by Basin Electric Power Cooperative; Miner County Community Revitalization, four 108 kilowatt wind turbines in Howard, SD; Alex Little Soldier Wind Turbine, one 750 kilowatt wind turbine owned by the Rosebud Sioux Tribe at the Rosebud Casino; and Wind for Schools, 11 1.8 kilowatt turbines set up at various schools around the state. South Dakota Wind Partners, LLC developed another wind project consisting of seven 1.5 megawatt wind turbines as part of the Basin Crow Lake Project. The South Dakota Wind Partners is a limited liability company formed to provide opportunities for residents to invest in wind. The four partners include East River Electric Power Cooperative, South Dakota Corn Utilization Council, South Dakota Farmers Union, and South Dakota Farm Bureau. Steve Wegman of the South Dakota Wind Energy Association sates that all of the projects are based on local decisions. “Most wind farms are built in rural areas away from people,” he adds. “This gives them a chance to see wind energy up close and personal.” The South Dakota Wind Energy Associations is partnering with National Energy Education Development Project and National Renewable Energy Lab to develop wind projects and wind education in South Dakota. The

group is trying to build a wind energy industry in the state. Zoning and planning are the biggest challenges, however, Wegman says they have worked to address these challenges through education workshops and face-to-face meetings. Moorhead developed a ‘Capture the Wind’ program allowing community members to purchase electricity to the home from a renewable energy source. “If you are a Capture the Wind customer you have bragging rights that say your power comes to your home from a renewable energy source,” Eisenbraun says. “It was never meant to reduce energy costs. The idea was to want people to be encouraged and proud to do this.” The estimated payback time was 15 years. Because of the individual production, Moorhead was able to pay it back in 11 years. Eisenbraun states that the trend now is for larger utilities to do wind farms and using smaller communities as part of that mix. “I believe it won’t be common for communities in the future to develop wind turbines,” he says. “Less than one percent of the power in Moorhead comes from these two wind turbines. We do it for environmental purposes. We do it for future generation.” Alan Van Ormer avanormer@prairiebizmag.com

South Dakota

uick Facts

South Dakota is among the Nation’s leading producers of ethanol. South Dakota consumes more electricity generated from hydroelectric power than from any other source. South Dakota has high geothermal and wind power potential. South Dakota is one of the few States that allow the statewide use of conventional motor gasoline.

North Dakota

uick Facts

North Dakota accounts for about 2 percent of total U.S. crude oil production. Due partly to high heating demand in winter, North Dakota’s per capita energy consumption is among the highest in the Nation. Nearly all of the electricity generated in North Dakota is produced by coal-fired power plants. North Dakota is one of the few States that allow the statewide use of conventional motor gasoline. North Dakota is a substantial producer of wind energy and leads the Nation in potential wind power capacity.

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Economic Development

Changing demographics… and the flood of 1997 Everyone is aware of the aging population in this country. This is mostly a result of the significant increase in the number of births in the USA from a low point in the early 1930’s to a peak in the early 1960’s.

ombine this with the fact that people are living longer and and it is easy to see why the US Census bureau is projecting the country’s 65+ population to increase 95 percent in the next 25 years, with the overall population projected to increase only about 23 percent over the same time span. The youngest of the “baby boomer” generation are just turning 50, and the oldest are in their mid-sixties. The spending habits of this huge group are changing, as they focus more on saving for retirement and less on consumption. Much has been written about the economics of this aging population. The world has seen other major economies deal with this, such as Japan did in the 1990’s. Over the next 25 years, there will naturally be a transfer of wealth from the large baby-boomer generation to the next. This transfer of wealth will come in many forms, such as retirement-related costs like travel and retirement living, health care services, philanthropy and, of course, inheritances. Because of this, maintaining strong services in the community to keep and attract retirees is critical for the local economy. What does the Grand Forks Flood of 1997 have to do with all of this? In the senior housing industry, we concentrate much of our planning efforts on the changing demographics in the communities we serve. Over the years we noticed that the Grand Forks community was experiencing demographic changes that were extremely abnormal for this part of the country. The census data for 2010 is in, and combined with the 1990 and 2000 census, we have a better indication of what happened. To illustrate we compared the changes in population, by age group, between the cities of Grand Forks, Fargo and Bismarck. Between the years 1990 and 2000, the age 65+ population in Fargo and Bismarck increased an average of 20.4 percent. In comparison, the Grand Forks age 65+population decreased 5.4 percent in that 10 year period. In real numbers, the data shows that the 65+ population in the Grand Forks area decreased by 569 people, compared to an increase of about 2,100 people in that age group if it would have experienced a more typical 20 percent increase. During this period, the largest decrease for Grand Forks happened in the 65 – 69 age group, which dropped 16.8 percent.

PHILIP GISI President/CEO Edgewood Group LLC philg@edgewoodmail.com

40 Prairie Business

June 2011

This disparity was seen again in the next decade, between 2000 and 2010, particularly in the age group of those between 70 and 79 years old. In Grand Forks, the population of that age group decreased 10.5 percent, while Fargo and Bismarck realized an increase of about 6 percent (this increase is expected to be lower due to the low birth rates in the 1930’s). The flood of 1997 had a large impact on the future demographics of Grand Forks. The data suggests that more than a few of those in or near retirement at the time of the flood moved to higher ground…and possibly to a different community. The emotional and economic cost of the flood of 1997 was significant when it happened. If the data is right, and I believe it is, the ongoing economic loss from that important age group is still being felt today, and will continue to be felt for years to come. PB Philip Gisi is the President and CEO of Edgewood Group LLC. He can be reached at philg@edgewoodmail.com.

Sales/Marketing

Talk Less, Sell More I recently had a client refer to me as his “sales-person”. It left me profoundly disturbed. Sales people are stereotypically slick talkers who take advantage of unsuspecting customers with products they neither need, nor can afford. nake oil salesmen, grifters, pyramid scheme architects and dare I say… advertising execs carry the stigma of pushing superfluous offerings upon unsuspecting buyers. Is that who I have become? I don’t think so. At least, that is not what I aspire to be. In my experience, the best sales people are listeners and are interested in problem solving, not selling. This is the paradox of effective selling, when listening usurps speaking. I once heard that the person who speaks the most in a meeting leaves the room feeling the most positive about the conversation. There is a lot of truth to that. We like to be heard. Ironically, this desire to have others hear us forces many sales people to fail. Less is more in most every case. Make a cogent point, and state it once. And in all cases listen first, problem solve second, speak third. As an avid football fan, l find value in applying sports

MICAH ABERSON Vice President Client Services & Business Development Lawrence & Schiller Sioux Falls, SD Micah.Aberson@l-s.com

metaphors to business situations. Consider the parallels between NFL quarterbacks and effective sales people. The most effective sales people are much like two-time Super Bowl champion Ben Roethlisberger of the Pittsburgh Steelers. “Big Ben” is known for his ability to win games when the play breaks down and he is flushed from the pocket. Scrambling for his life, Ben reads the situation and adjusts on the fly to put points on the board. Great sales people, like “Big Ben,” make things happen when they are flushed from their PowerPoint, forced to read the client’s reaction, listen to what they need and present solutions instead of sales promises. Let’s all commit to listening more, speaking less and enjoying life outside the pocket as we elevate the perception of sales people from those who sell, to those who solve problems. PB

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ViewPoint

nderstanding Branding It’s true, it’s a bit of a

o current and potential clients, branding is everything they see and hear from you; from the way your website looks and performs, to the way your shop is decorated, to the way your employees dress. How do you create a brand for your organization? Ask yourself, who do you serve and what they value? If your core competencies are relevant to your target audience, they will naturally view you as one who can solve their problems. Think of the artisan bakery where the staff wear quirky or vintage clothes to work. This says: we’re organic, young, cool. They also wear bistro aprons with their embroidered logo. This says: we’re serious about our products and our role serving you. It isn’t an accident, it’s engineered. Your brand can also serve as compass within your organization by connecting the people that work for a company with its brand values. A pet resort imprints products and supplies the employees use in their daily work routine with catch phrases like “you had me at woof ” and

word right now.

TROY NELSON CAS Trojan Promotions troy@trojanpromotions.com

“talk to the paw.” It strengthens the value that the animals in their care are just like people. How is your logo? It’s an important part of your branding strategy. Customers will always enjoy useful, attractive items with an appealing logo. How many times have you grabbed a box of matches (and you don’t smoke) because you had a wonderful experience at a restaurant or bar and wanted to remember it? It’s debatable that you made that conscious choice. Maybe you just liked the logo. And without knowing it, you’ve extended a positive experience and reinforced their brand. The development of a brand should include many types of media, traditional to “new” ( such as blogging, twitter and facebook). But consistent, clear branding will help deliver the message and connect the dots across all those various channels. Examine every point of contact with your potential and current customers. Are you portraying or betraying your brand? PB

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June 2011

Technology

Cloud computing and your business Cloud computing describes a new delivery model for IT services and applications based on the Internet. s a consultant I am questioned regularly by clients and colleagues with the questions “what is cloud computing?” and “how do I know if it’s right for me or my clients’ business?”

long term strategy) ➜ Time constraints (ie. major upgrade or upcoming procurement) ➜ Security requirements (ie. regulatory requirements)

CLOUD COMPUTING IS:

VENDOR OPTIONS

➜ Computing in which services and storage are provided over the Internet ➜ On-demand self-service Internet infrastructure where you pay-as-you-go and use only what you need, all managed by a browser, application or API ➜ Broken up into multiple segments including: Cloud Infrastructure, Cloud Platforms and Cloud Applications ➜ Accessing computing resources that are typically owned and operated by a third-party provider on a consolidated basis in data center locations ➜ As with any new technology or service, before purchasing or implementing its is important to understand how it will increase your revenue, decrease your expenses, or mitigate risk throughout your organization. There is an abundance of information on the web related to the advantages and disadvantage of moving to the cloud. In some instances it depends on your industry, business model, and culture. A few of the pros and cons that you would typically see when exploring a cloud model include:

➜ Industry options for cloud computing ➜ Required performance levels ➜ Reliability and disaster recovery requirements

PROS ➜ Low cost of entry (i.e. No need to increase IT staff or skills) ➜ Fast Implementation (i.e. Great for startups!) ➜ Low Maintenance (i.e. Maintenance is performed by cloud vendor) ➜ Round the clock availability (i.e. web based)

It is important that you develop the right strategy and understand how cloud computing can benefit your organization. Avoid the pitfalls and make sure that your organization maintains the right blend between staffing, security, control, pricing, and business continuity planning. Additionally, successfully adding cloud computing resources to the company’s existing IT infrastructure will mean that IT will have found a way to apply IT to enable the rest of the company to grow quicker, move faster, and do more. PB

Pro, novice or anywhere in between

CONS ➜ Performance (i.e. You never really know how much performance is available to you) ➜ Security (i.e. Data security is at the hands of the cloud vendor) ➜ Loss of Control (i.e. Customers rely on the cloud vendors disaster recovery model) ➜ Limited features (i.e. Features in cloud technologies are not as robust as on-premise)

AMBER VOGEL Business Technology Consultant Eide Bailly Technology avogel@eidebailly.com

When evaluating if cloud computing is right for your organization, you should take into consideration the following:

COST

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By the Numbers EMPLOYMENT

(NOT SEASONALLY ADJUSTED) UNEMPLOYMENT RATE Mar 2010 North Dakota 4.2% Fargo MSA 4.5 Bismarck MSA 4.2 Grand Forks MSA 5.3 Minot MiSA 4.2 Dickinson MiSA 2.5 Williston MiSA 1.3 Jamestown MiSA 4.5 Wahpeton MiSA 4.3 South Dakota 5.5 Sioux Falls MSA 5.5 Rapid City MSA 5.7 Aberdeen MiSA 4.2 Brookings MiSA 4.4 Watertown MiSA 5.5 Spearfish MiSA 5.2 Mitchell MiSA 4.8 Pierre MiSA 4.3 Yankton MiSA 5.2 Huron MiSA 4.2 Vermillion MiSA 4.2 Minnesota 7.3 Minneapolis-St. Paul MSA 6.8 Brainerd MiSA 11.2 Winona MiSA 6.7 Fergus Falls MiSA 8.3 Red Wing MiSA 7.5 Willmar MiSA 7.2 Bemidji MiSA 9.5 Alexandria MiSA 7.4 Hutchinson MiSA 10.0 Marshall MiSA 6.4 Worthington MiSA 6.2 Fairmont MiSA 7.5

Mar 2011 5.0% 5.1 5.2 5.4 5.2 3.6 2.3 5.2 5.6 5.8 6.0 6.1 4.2 4.7 6.2 5.1 5.4 4.1 5.7 4.7 4.4 8.6 7.8 11.8 7.5 9.2 8.9 7.7 9.7 7.7 10.2 6.2 5.6 7.8

EMPLOYMENT Mar 2010 Mar 2011 352,926 347,566 112,820 113,822 58,383 58,296 51,652 52,057 31,142 31, 530 15,841 14,259 20,108 15,662 10,817 11,422 13,281 11,519 420,260 413,845 121,970 120,585 61,620 61,385 22,650 22,175 18,360 17,995 17,650 17,400 12,910 12,785 12,440 12,165 11,995 11,860 11,205 11,075 9,420 9,130 7,500 7,300 2,736,336 2,701,010 1,715,389 1,709,098 40,431 40,807 25,921 27,322 27,766 27,235 23.896 23,135 21,918 22,643 20.204 19,509 18,388 19,142 16,962 18,643 13,797 14,093 11,245 11,544 10,442 11,004

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 NOTES: Employment data is based on formulas. Each February formulas are “benchmarked” to correct any economic or cultural changes that may make current formulas inaccurate. At that time figures for previous months may change. North Dakota oil data is also preliminary data and changes may be made at later dates.

NORTH DAKOTA OIL ACTIVITY

FEB 2011 JAN 2011 DEC 2010 NOV 2010 FEB 2010

Sweet Crude Price/BBL

Production Oil-BBL/day

$78.19 $78.59 $79.10 $73.56 $67.58

348,400 342,100 344,100 356,500 261,000

Drilling Permits 155 142 134 245 94

FEB 2011 JAN 2011 DEC 2010 NOV 2010 FEB 2010

Producing Wells 5,324 5,315 5,331 5,331 4,655

Current Rig Count:

One Yr Ago:

174

108

Source: NDOMB

MARCH AIRLINE BOARDINGS BOARDINGS

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

04/28/10

03/28/11

U.S. to Canadian Dollar-

$1.0128 or $0.9874

$0.9758 or $1.0248

$0.9511 or $1.0514

U.S. to Euro

$0.7616 or $1.3130

$0.7090 or $1.4104

$0.6764 or $1.4784

U.S. to Chinese Yuan

$6.8248 or $0.1465

$6.5622 or $0.1524

$6.5010 or $0.1538

U.S. to Japanese Yen

$94.126 or $0.0106

$81.657 or $0.0122

$81.570 or $0.0123

U.S. to Mexican Peso

$12.418 or $0.0805

$11.957 or $0.0836

$11.550 or $0.0866

Source: Bank of Canada

Data provided by Kingsbury Applied Economics

CANADIAN BORDER CROSSINGS

Intl Falls-Rainer Grand Portage Baudette Warroad Roseau

MAR 2011

% CHANGE /MAR 2010

June 2011

TRUCKS MAR 2011

34559 22496 12210 10926 3475

10.98% 24.02 - 6.17 35.58 19.17

1864 1468 810 1187 625

24783 6293 4456 3915 3684 2614

13.77 3.61 16.59 5.73 29.67 1.95

18605 7919 836 2202 878 161

% CHANGE /MAR 2010

- 19.48% 18.96 13.45 31.60 16.82

NORTH DAKOTA

Pembina Portal Neche Dunseith Walhalla Noonan

Source: US Customs and Border Protection

46 Prairie Business

- 2.1% -1.4 25.4 -8.8 -8.4 3.6 8.4 114.7 12.9 96.2 121.8

Source: US Customs and Border Protection

MINNESOTA 04/28/11

% CHANGE/2010-2011

1,408,777 36,075 37,120 14,621 16,204 13,011 10,825 11,075 1,083 1,964 1,222

AUTOMOBILES

CANADIAN EXCHANGE RATE

Rig Count 167 163 163 158 93

- 0.19 11.21 6.91 - 17.87 - 23.39 - 58.07

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