business monthly - may 2012

THE COURIERcvbusinessmonthly.com

By JIM OFFNER

[email protected]

INDEPENDENCE — Elliott Hen-derson was halfway around the world as he planned his new busi-ness, Henderson Events Center Inc. in Independence.

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

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

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

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

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

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

His unit was deployed to Afghanistan in 2010.

“You can’t depend on some-

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

That included fi lling out a loan application from the Small Busi-ness Administration.

That’s how he spent his off -duty time overseas.

Photos by RICK CHASE / Courier Staff Photographer

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

Volume 6 ● No. 6

STAFF DIRECTORY

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

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

www.cvbusinessmonthly.com

EDITORIAL CONTENTNancy Raffensperger [email protected](319) 291-1445

Jim [email protected](319) 291-1598

ADVERTISINGDavid [email protected](319) 291-1403

Jackie [email protected](319) 291-1527

Sheila [email protected](319) 291-1448

SPONSORSCONTENTSJim OffnerSmall businesses the engine that powers the Cedar Valley economy. .............. page 4

University of Northern IowaListening is a simple but effective way to boost your bottom line .................. page 11

Hawkeye Community CollegeSeven habits of highly effective social media use for business ................ page 12

MAY 2012 PAGE 3CEDAR VALLEY BUSINESS MONTHLY

Military man starts business while serving in Afghanistan

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

Business plan of attack

See EVENTS, page A4

THE COURIERPAGE 4 CEDAR VALLEY BUSINESS MONTHLY cvbusinessmonthly.com

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THE

POWER TO LOWER BUSINESS COSTS

MAY 2012

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

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

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

Henderson “couldn’t wait one day” to get to work, said Nate Clayberg, director of the Buchan-an County Economic Develop-ment Commission.

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

Not so with Henderson.There was a ready market for

weddings and other events, with Heartland Acres booked three years out, Clayberg noted.

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

After more than $100,000 in renovations, the center — at 2320 Iowa Ave. — hosted its fi rst wed-ding in October.

Business has been steady, said

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

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

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

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

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

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

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

For information about book-ings, contact Allison Hen-derson at [email protected] or call (319) 334-6464.

EVENTSFrom page 3

Small business lending up in IowaWASHINGTON, D.C. — The U.S.

Department of the Treasury in April released a report showing that Iowa banks have increased their small business lending by $72.6 million since receiving capital through Small Business Lending Fund.

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

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

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

THE COURIER PAGE 5CEDAR VALLEY BUSINESS MONTHLYcvbusinessmonthly.com

319-235-5999 | 1-888-531-3696 1844 Ridgeway Ave. Waterloo, IA

MAY 2012

Small businesses fuel Cedar Valley economy

To say small businesses play a critical role in the U.S. and Cedar Valley economies would be to

understate to the point of insult.

Small busi-nesses employ roughly one-half of all Americans and account for about 60 percent of gross job cre-ation, according to the latest data from the U.S. Department of the Treasury.

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

But there are other facts about small businesses that may pro-vide a bit of insight on how important even the tiniest fi rms are to the economy.

From businessinsider.com:Small businesses in Iowa gen-

erate about $13.2 billion a year, or nearly 31 percent of the state’s economic activity.

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

Seventy percent of small busi-nesses in the U.S. are owned by one person.

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

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

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

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

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Jim Offneris the Courier

business editor. Contact him at jim.offner@

wcfcourier.com.

See OFFNER, page 8


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UNI students look to fi ll coffee niche on College Hill

By JIM OFFNER

[email protected]

CEDAR FALLS — Nathan Wiemers fi gures there are a lot of coff ee cups that need fi lling in Cedar Falls.

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

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

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

Wiemers said his group’s ven-ture is a bit diff erent from its predecessor.

“It’s more traditional and kind of a student art venue, which is missing on the Hill right now,” he said of the group’s business vision. “It’s mostly just restau-rants and bars. It’s an oppor-tunity to help the community, because there’s really no alterna-tive to bars.

RICK CHASE / Courier Staff Photographer

Nathan Wiemers draws a cup of coffee in a booth set up along West 23rd Street in Cedar Falls. Wiemers and a group of other students are planning to open The Roast, a coffee shop, in the College Hill neighborhood near the University of Northern Iowa in August.

ROAST TOWNof the

See ROAST, page 7


“Students may not be 21, or their values go against drinking, and there’s nothing else to do for the entire UNI community in the surrounding neighborhood,” Wiemers said.

The organizers aren’t all busi-ness majors. Their speciali-ties include marketing, interior design, electronic media and, of course, public administration.

“They all bring unique strengths,” he said, adding that interior design is an asset in drawing up a layout and decor.

The board provides needed business expertise, Wiemers said.

“That kind of helps the weak-ness of being students, off er-ing connections, resources and direction,” he said.

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

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

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

The have gotten plenty of guid-ance from the business incubator at UNI’s John Pappajohn Entre-preneurial Center, Wiemers said.

“The professionals, Laurie Watje and Katherine Cota-Uyar, have a lot of legal and accounting experience and have small seed funding,” Wiemers said. “The biggest benefi t is the offi ce space they provide us.”

Watje, manager of the busi-ness incubator, said she has been working closely with the group.

“With our initial startups, it’s mandatory they meet with me at least once a month, but we’re meeting a whole lot more often, working with him as far as basic knowledge of how to start up a

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

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

The rest is up to Wiemers and his group, Watje said.

“They’re doing a pretty good job trying to get their name out,” she said.

Leadership. Service. Faith. Learning.

I helped build and manage

a media company before

entering my teaching career.

I didn’t want to come here

initially, but Waverly’s been a

great place for my family and

I love Wartburg students.

I fi nd Wartburg students

compassionate. They are very

caring, and they’re willing to

open their hearts and roll up

their sleeves to help others.

I have been blessed to have

had students allow me access

to their lives and learning. And,

my being here has allowed

me access to serve all sorts

of people and organizations.

Wartburg opened doors…

I’ve been here 14 years, and the

student experience has been

amazing. What an honor and a

blessing to work with these kids!

The future will be blessed by

them. Trust me.

— Bill Withers,professor of Communication Arts

This is my Wartburg story.

What’s yours?www.wartburg.edu/ourstory

For more information, scan this code using a QR code reader app on your smartphone.

Julie HeidtGroup/Individual Health Insurance Agent

The Sinnott Agency Inc.www.sinnottagency.com

622 West 4th St., Waterloo, IA 50704

319-233-6103

MAY 2012

ROASTFrom page 6


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MAY 2012

Those are encouraging sta-tistics, but most small-busi-ness ventures still end in failure. According to SBA, only half of startups will last fi ve years; about seven in 10 will last two years.

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

Children who do want to carry on often bring their own ideas about how to build the enter-prise. That could bring a mixed-bag of results.

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

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

OFFNERFrom page 5

Small business owners must plan to ensure a sustainable retirement

If you’re a small business owner, protecting yourself and your business goes beyond

securing proper insurance agree-ments and build-ing an emer-gency financial cushion — it also means ensuring that your sav-ings will sustain you throughout retirement.

Most of those a n t i c i p a t i n g retirement have savings plans sponsored by their company, and though you

are likely expecting to retire at some point, the process may be more complex in the absence of such a plan. You must determine how to keep your income fl ow-ing after retirement or how to capitalize by selling your busi-ness and creating a nest egg.

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

Make saving a priority. As other fi nancial goals arise, sav-ing for retirement may get over-

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looked. It’s tempting to re-invest a large portion of your profi t into your business, but you may regret not socking away more savings for your personal fi nancial secu-rity — especially if retirement comes along faster than you expected. If you don’t have an established retirement savings plan, consider contributing to an IRA or other qualifi ed invest-ment plan. It’s less tempting to pull money from accounts that are earmarked for a specifi c goal.

Develop a succession plan. It’s important to think about the future of the business that put so many resources into. Research the legal procedures for transfer-ring ownership (to a family mem-ber or employee) and document in writing who you intend to take over your business after you’ve retired. There may be tax rami-fi cations when you sell or trans-fer your business, so be aware of these so you can prepare for the fi nancial impact.

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

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ing your business may be emo-tional. Having knowledge about the process before you consider off ers may make it less stress-ful and ensure the decisions you make are fi nancially sound.

Retirement can be especially confusing and complicated for small business owners, so con-sider working with a profes-sional fi nancial adviser who can help you balance your business needs with your personal ones. Everyone has diff erent priori-ties and values, but it is up to each individual to prepare for her own retirement. The earlier you begin planning, the easier it will be to fulfi ll your long-term fi nancial goals and avoid diffi -cult trade-off s.

WATERLOO — Officials at the local SCORE location at 212 E. Fourth St. are off ering free advice on how to start a business.

SCORE is a nonprofi t asso-ciation dedicated to helping small businesses get off the ground, grow and achieve their goals through education and mentorship.

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

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

many common problems.SCORE off ers advice to an

array of buisnesses, including retailing, food service/restau-rants, construction, electron-ics, computer, advertising, marketing, fi nancial controls, purchasing and inventory con-trol, among others.

A counselor with expertise in a particular fi eld is assigned and can call on other SCORE counselors, officials said. Meetings are scheduled as fre-quently as needs demand.

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

SCORE has business advice for would-be entrepreneurs

Larry K. Fox is a private

wealth adviser with Ameriprise Financial Inc. in

Waterloo. Contact him at 234-7000.

Want to get posted?For advertising opportunities in future cvbm directories, contact Jackie Nowparvar at 319-291-1527.

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The small business owner is the backbone of the American econ-omy. They work out of garages,

small stores on Main Street and huge corporate campuses, but regardless of location most small business owners have constructed a business plan before ventur-ing out on their own. A busi-ness plan can be your road map to success and should include the products or

services you intend to off er, what market to off er them to, fi nancing sources and your ultimate goal.

The six M’s of owning a busi-ness play a large part on the suc-cess, or failure, of a business:

Mission — What will your ser-vices do for potential customers?

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

Message — Is your mission clear enough that potential cus-tomers understand who you are and what have to off er?

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

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

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Management — Do you operate your business in a way that customers are completely satisfi ed?

Starting your own business is not easy. Statistics show most small businesses will not see a signifi cant profi t for two years (although you do need to show a profi t after the third year, or the IRS might think you are trying to hide something). Owning your own business is not a 9-to-5 job. Self-employed contract workers (writers, consultants) may work long hours under tight deadlines, while store owners spend any-where from 80 to 120 hours or more a week maintaining their business. And then there are the regulations. Federal, state and municipal laws all must be fol-lowed. Small business owners also have to adapt to the ever-changing customer wants.

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

Leaders are typically character-ized as visionary, creative, pas-sionate, risk-takers, proactive,

■ and results-oriented. Leaders do not like repetitive work. They do like to lead people in the direc-tion they envision. Leaders like to encourage diff erent perspec-tives and to open discussion and engagement; they focus more on the future, less on the past. Sometimes it’s challeng-ing to keep leaders focused on the present. Leaders sometimes have diffi culties working with others — they are in their own space, but will fi nd change in the workplace exciting. Leaders may fi nd it challenging to understand people and their motivations because leaders are somewhat self-centered (in the sense that they view the world from their own perspective, not others).

Managers are typically charac-terized as problem-solvers, peo-ple oriented, often more reactive

(working from a historical per-spective — what just happened rather than what’s going to hap-pen), hard working, time sensi-tive and focused on fulfi lling the company’s goals. They like to solve problems, make decisions and have closure. Managers like to minimize or eliminate confl ict in the workplace. Strong manag-ers like working with people and are still able to keep business and personal relationships separate. Managers may fi nd handling and managing change in the work-place challenging.

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

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

Operating eff ectively with both strong leadership and manage-ment skills can be a challenge for most people. Typically, busi-ness personalities tend to either be more of one than the other. However in a small business both the leader and the manager are one and the same: the owner.

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

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Vital components to a successful small-business model

Amy Lang is assistant vice

president for commercial lending

at Community National Bank in

Waterloo. Contact her at 291-2000.

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

Los Angeles Times

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

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

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

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

THE COURIER PAGE 11CEDAR VALLEY BUSINESS MONTHLYcvbusinessmonthly.comMAY 2012

Listening a simple but effective way to help bottom line Listening and hearing are relat-

ed but diff erent. Good listening can be very eff ective for the busi-

ness owner. A simple defi -

nition of hear-ing and listen-ing is, “Hearing is the reception of sound; lis-tening is the attachment of meaning to the sound.” This means hearing is passive and eff ective listen-ing is active.

We spend 40 percent of our time listening, 35 percent talk-ing, 16 percent reading and 9 percent writing.

However, according to Romero, “Most of us aren’t good listeners. We listen at about 25 percent of our potential, which means we forget, ignore, distort or misun-derstand 75 percent of what we hear.” This can be costly person-ally and professionally.

There are clear benefi ts for business owners and employees who engage in eff ective listening. These include improved profi ts,

promotions, increased job satis-faction, improved problem-solv-ing and improved organizational awareness.

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

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

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

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

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

Summarizing involves provid-ing a brief restatement of the core themes raised by the other

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

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

The way we communicate, work and lead is connected to our backgrounds. There are fi lters that aff ect our ability to listen. These include memories, beliefs, attitudes, expectations, assump-tions, prejudices, experiences and the physical environment.

Now that you know the steps to eff ective listening and the fi l-ters that may aff ect the ability to listen, let’s explore the types of listing.

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

reports and speeches.Relational listening is used to

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

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

Critical listening is used in many situations and is important for sales in business. It is used on the job, in the community, with the family, in church. We use critical listening with politi-cians, media, salespeople, fi nan-cial advisers, clergy, etc.

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

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

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

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

Being mindful of listening to our employees, customers, ven-dors, and others in our business relationships can provide great benefi ts professionally.

Katherine Cota-Uyar is associate

director of the John Pappajohn Entrepreneurial Center at the

University of Northern Iowa. Contact her at 273-5732 or katherine.cota@

uni.edu.

Advice on shopping for a mortgageMcClatchy-Tribune News Service

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

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

The Web can serve as a useful tool for answers about mortgage rates and the borrowing process. Here are a few sites:

American Bankers Asso-ciation: Provides general over-view of how to shop for a home mortgage. www.acbankers.org/Press+Room/MortgageTips.htm

Bankrate.com: A good primer

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on how mortgages work and the diff erent types of borrowing. www.bankrate.com/brm/green/mtg/mort1a.asp

Federal Trade Commission: Features insights on how to shop, compare and negotiate a home mortgage. www.ftc.gov/bcp/edu/pubs/consumer/homes/rea09.shtm

Mortgage Calculators: Off ers a wide range of mortgage insights and tips. www.mortgagecalcu-lator.org/helpful-advice/ups-and-downs-with-mortgages.php

Moving.com: Covers mort-gage basics and fi nance tips. www.moving.com/articles/mortgage-101.asp

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My husband and I recently attended a library technology conference. It has grown to 400

p a r t i c i p a n t s over the past few years, using social media to build its base. Participants use a special Twitter hash tag to post about speak-ers, sessions and vendors, so that others in attendance can see those posts. The con-ference has its own Facebook page: People use it to fi nd groups heading to restaurants, comment on sessions, post

pictures, connect people with lost items and create a sense of community. At least half of those attending the conference were using iPads and mobile apps, creating a steady stream of comments—and excitement. How many businesses are using social media sites this eff ectively to promote events and build their base?

The Harvard Business Review surveyed several thousand com-panies about their use of social media and identifi ed seven habits of eff ective users:

1. Eff ective users see social media as a part of their overall marketing strategy.

2. They include social media in their budgets.

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

4. They use social media to connect with customers, moni-tor trends, and get reviews.

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

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

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

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

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

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

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

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

Fifth, use the tools built-in to

Facebook. Called insights, they are available to the page admin-istrator. You must have at least 30 users in order to use them; how-ever, the data is valuable. You will get a series of charts and graphs showing information about visi-tors to your page with demo-graphic information (age, gender, language spoken, etc.) that lets you see patterns in the traffi c on your page.

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

business owners have more of a presence online.

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

Companies and organizations alike are discovering that hav-ing a Facebook page or Twit-ter feed takes time but brings people together. With more options for using mobile tech-nology, more apps and widgets, and more connectivity between social media sites, smart com-panies will continue to explore ways to use them to connect with customers and the com-munity alike.

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MAY 2012

Seven habits of effective users of social media

Cherie Dargan is associate professor of communications at Hawkeye Community College, where she teaches classes in writing, literature and educational

technology. Contact her at 296-2320 or follow her on

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Statistically, 90 percent of all U.S. businesses, including one-third of the Fortune 500 companies, are either family-

owned or family-controlled. Only about 30 percent make it to the second genera-tion and only half of those (15 per-cent) make it to the third genera-tion. One of the leading reasons is the lack of an orderly succes-sion plan, “exit” strategy or busi-ness continua-tion plan.

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

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

In his book “The Seven Hab-its of Highly Eff ective People,” author Steven Covey says that we must “begin with the end in mind.”

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

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

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

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

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

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

It is during this stage that this entrepreneur begins to attract the collective attention of the community’s life under-writers and fi nancial advis-ers. Coincidentally, it is also at this time that the entrepreneur really needs their services, but because of their self-suffi cient management style, owners are distrustful of these advisers. The dilemma could have been avoided had a relationship of trust and service been estab-lished earlier.

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

and for a new business devel-opment cycle to begin. All too often the alternative is liquida-tion of the business.

Of course, the fi nancial suc-cess of a business impacts the bottom line of a business owner’s personal financial health. The business owner needs proper construction and management of their personal investment portfolio, which includes their retirement plans. According to the VIP Forum, nearly 40 percent of business owners do not have a wealth adviser even though they need specialized advisers who work with successful families with small businesses who can help manage their fi nances. This group might include your pri-vate banker, commercial lender, trust, investment and insurance

specialists as well as a CPA and attorney.

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

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

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

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

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

5. How can I help preserve my

assets from the claims of credi-tors during my lifetime and at my death?

6. How can I minimize estate taxes?

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

Hopefully, a plan emerges as you go through alternatives to these questions. Your advisers can provide you with insight that will support your business to a successful ownership tran-sition, whatever and whenever that happens. It is not a one-shot deal that makes your plan a success. It will be the ongoing eff orts of the owner and his or her trusted advisers working as a team to accomplish the own-er’s goals. It will be an ever-evolving plan that ultimately makes your dreams the reality that is your life.

MAY 2012

Starting a business requires a plan for the end

Vicki Angoveis senior vice president and

managing director of U.S. Bank Private Client

Group in Waterloo. Contact her at

235-3282.


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MAY 2012

Locally owned companies offer exciting opportunities

Manufacturing is a matter of scale. There probably isn’t a person in town that couldn’t tell you what the green and

gold colors on the side of your neighbor’s lawn mower represent. John Deere is one example of a global manufac-turing enterprise in our commu-nity. What many people do not realize, though, is that the Cedar Valley is home to the highest concentration of m a n u fa c t u re rs in Iowa, many of those companies locally owned and family-run.

I have worked with over 100 local manufac-turers — big and small. Inge-nuity, creativity and strategic business practices are their keys to success. Many locally-owned companies are run by savvy, creative and confi dent manag-ers who know how to adapt to stay on top, turning profi ts that would turn a lot of heads.

This mixture of fl exibility and traditional values is what has turned some family shops into leaders in their fi elds, produc-ing products our community and our world couldn’t live without.

One successful, family-owned manufacturing facility is Geater

Machining and Manufacturing in Independence. Specializing in machining and sheet metal fabrication for the aerospace and defense industries, Geater employs more than 150 people. As it celebrates its 50th year in business, Geater is known by the Cedar Valley community to be a leader in innovation and effi ciency, setting the standard for other companies in the area.

Another impressive, fam-ily-owned manufacturer is Power Engineering and Manu-facturing in Waterloo. A cus-tom operation specializing in heavy-duty gear boxes, PEM sets high standards for its prod-ucts, and is known for its atten-tion to detail. Locally owned since 1975, current President John Warren, oversees opera-tions of the 110,000-square-foot operation just off Airline Highway. Everyone at PEM is a valued employee, and the team dynamic is what sets this man-ufacturer apart.

So, although family-owned and “small” in comparison to some of the massive, global manufacturing operations based in our state, the Cedar Valley is home to hundreds of locally owned, skilled trade operations that fuel our econ-omy. Take a look when you are driving past some of the build-ings on your way to work, and notice their names when they advertise for employees. These companies may seem small, but their reputations tell tales of huge success.

Brittany Jungck

is advanced manufacturing

coordinator at Hawkeye

Community College in Waterloo.

Contact her at (319) 296-4043 or Brittany.Jungck@HawkeyeCollege.

edu.


One of the more enduring memories of my childhood was the weekly introduction to “The

Beverly Hillbil-lies” TV series.

“Then one day he was shooting for some food

“And up through the ground came some bubbling crude.”

I can still see the puzzled look on Jed Clampett’s face as he begins to comprehend his great fortune.

“Oil that is, black gold, Texas tea.”

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

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

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

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

A reasonable analogy is a police detective trying to solve a crime. Whereas there may be an almost infinite number of suspects, when quantifi able data such as a fi ngerprint is fed into a good database, a culprit can be quickly and accurately identifi ed.

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

What data will we collect? (Amassing unused data is as silly as ignoring valuable data)

How will we consistently and cost-eff ectively capture it?

How will we keep our data current?

How will we keep our data secure?

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Fortunately, an array of soft-ware tools and technology solu-tions is available to fi t any orga-nization’s budget from a simple Excel spreadsheet to massive Enterprise Resource Planning systems.

A perfect database is perfect-ly useless without the skills to effi ciently and correctly analyze the data so that accurate conclu-sions can be drawn. For example, it’s important to understand if an observed “improvement” between last month’s output and this month’s output following a controlled change to a suspect-ed input parameter is truly an improvement because it result-ed in a statistically signifi cant change or is merely the product of random chance.

Here again, there are a range of

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

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

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

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

Today, if your organization isn’t eff ectively harvesting and analyz-ing its data to really understand what it does, you’re the equiva-lent of a corporate Clampett.

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MAY 2012

Planning and organizing keys to business success

Small business owners wear many if not all hats in a business: fi nance, marketing, IT, staff , etc.

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

In order to orga-nize finances, plan marketing, and manage tech-nology, a small business can turn to local resources to help grow the business. Both fi nancial software packages and local

consultants can help with every-thing from organization to man-agement of business fi nances. In the Cedar Valley, we have many resources to create and imple-ment a marketing plan: writing for local papers and blogs, uni-versity business services, social media, vendor fairs. Writing this article on my computer reminds me of our dependence on tech-nology. In addition to a back-up system, a small business can cre-ate a custom package with local

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

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

When we build our team around our weaknesses, we improve our chances for success. Would you like ideas for organizing some part of your business or incor-porating health and wellness into your business or your schedule? Reaching a goal with help is bet-ter than not reaching it at all.

Jessica Crouch

is a wellness consultant in

Waterloo. Contact her at (319) 504-6689 or Jessica@OrganizeAnywhere.

com.

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MAY 2012

Every work team needs a synergist

By DIANE STAFFORD

McClatchy Newspapers

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

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

If he’s lucky — because his con-sulting work will be easier — he also fi nds synergists.

You may not get his labels at fi rst read, but I’ll bet you know the types. You’ve probably seen how they work (or don’t work) together.

The visionary comes up with big ideas but isn’t good on the follow-through.

The processor creates a sys-tem or steps to go through in order to carry out the ideas.

The operator just wants to stop talking, stop planning and get busy.

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

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

Curious about your type? McKeown shares his online quiz at www.predictablesuccess.com/synergist-quiz.

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McKeown says he struggled with the synergy cliche before deciding that “synergist” simply was the right label for his man-agement theory.

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

McKeown says there are some natural synergists, but most people have to work at develop-ing the collaborative techniques. Some of the world’s top business leaders have done it.

“It’s really advanced common sense,” he said in an interview. “We all default to certain styles, but synergists transcend a single style, even if they’re naturally one type.”

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

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

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


Most people who have started a business from scratch know what it is like to generate creative ways

to attract new customers. Most entrepreneurs got their start doing just that. Others focused almost exclusively on creating a master brand that pro-motes the ultimate in consumer con-fi dence, attracting even the toughest critics or doubt-ing consumers. Few have consis-tently leveraged that secret and most effective way to impact margins and sell-through rates

from advertising that is found in a repeat purchase from an exist-ing customer.

Creatures of habit uniteAsk yourself: Are you a creature

of habit? Do you drink the same drink, eat the same food, shop the same stores or buy the same brand of products consistently? Of course. It is human nature to repeat what is familiar, comfort-able and convenient. As a busi-ness owner or operator you’ve spent countless hours building your business, but have you con-sidered how to best leverage your

No. 1 asset, your relationship with your past customers?

Do you have the data? In your business, is there data

on your customers? Do you have a customer list or just familiar faces? In some businesses trans-actions are fast and frequent but light on customer data. These businesses must consider a way to start collecting data. Do you off er an incentive or rewards program? If not, start one. You can start a monthly drawing that gives you a start at a database. Put out a fi shbowl to drop busi-ness cards in, or a nicely pre-sented box with a professional form to fi ll out for a chance to win a monthly prize. Automatically enter each customer once and determine what repeat custom-ers can get as an ongoing reward. Keep in mind, repeat customers don’t need it cheap. Just express value, and don’t advertise the same off er publicly.

You can start with a spread-sheet if you don’t have a con-tact management tool or other way to aggregate your customer data. Pick a valuable premium

as a giveaway, and get permis-sion from the winners to share a display photo of them when they pick up their prize. When other customers see the excit-ing showcasing of winners, they are encouraged to join, or if they have already joined it reinforces their decision to be loyal to your business.

Email is keySome businesses don’t consis-

tently use email. That may not be wise if you want to connect with your consumers, because over 90 percent of people online use email, 65 percent of them on a daily basis. How many opportu-nities are you missing?

Cost factorsThe customer retention vs.

acquisition cost is generally ref-erenced as “it takes eight to 10 times the amount of money to acquire a new customer than it does to retain a past customer” This is observed in most adver-tising budgets as the focus of spending has traditionally been going to acquisition opportuni-ties. It varies heavily on the prod-

uct you sell and for retail busi-nesses. It is greatly infl uenced by location. The most important thing you can consider in your marketing and advertising pro-

gram is a strategy that leverages the data you have. while helping you collect more data so you can deliver a world class experience for everyone.

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MAY 2012

Building data: Is your business focused on loyalty?

Curtis DeGroote is director of research and

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Advertising in the Cedar Valley Business Monthly is an effi cient way to spend adver-tising dollars. If you want to place a display ad, call an account executive at 291-1497 from 8 a.m. to 5 p.m. Monday through Friday. Our account executives will help you establish a campaign.


Most large corporations have programs for corporate philan-

thropy and com-munity involve-ment, and it is a great idea for small businesses, too. In fact, small business own-ers have some advantages for establishing a successful corpo-rate philanthropy program. Small businesses have the benefi t of a local presence in their communi-ties and work hard to build stead-fast relationships with local cus-tomers. As a small business owner,

you can ask for your custom-ers’ input about your philan-thropic eff orts and get involved with causes that are important to the customers you serve and the community.

In addition, when you involve your customers in philanthropy and support local causes they care about, you gain important visibility for your business. Your customers can see your chari-table eff orts — and the people you are helping — fi rsthand.

The strategies for creating a superior corporate philanthropy plan for a small business aren’t largely diff erent than those for a large corporation. Here are sev-eral ways small businesses can get involved in corporate giving:

Be selective and realistic. As a small business, you can’t com-mit to every opportunity, spon-sorship, event and campaign drive that comes your way. It’s a good idea to be selective and realistic. Focusing on too many diff erent causes can spread you too thin. Consider your loca-tion, mission and what you have to off er the community. And don’t forget to think about your customers and supporting the causes they care about most.

Stay local. There are a vast

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amount of causes your business can support — globally, nation-ally and locally. However, as a small business, staying with community-based issues and eff orts is important to ensure the community in which you have invested your time, ener-gy and money is healthy, safe and vibrant. It gives you a better opportunity to raise your profi le and make a positive impression in the community as well.

Involve your employees. Many companies create com-mittees to make decisions about contributions or company vol-unteer activities. Everyone in your business is your ambassa-dor, and owners should encour-age employees to get involved on some level with the cause or phil-anthropic eff orts. Giving back starts at the top, but everyone in the company should be involved.

Consider volunteerism. Allowing employees to volun-teer in the community can be a win-win-win for your business. The nonprofi t organizations win by getting the extra hands they need. The employees win by being able to spend time volun-

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

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

Tell your stories. Let your customers and the communi-ty know about your charitable eff orts. Not only does it help your business, it also spreads the word about the causes of your selected charities.

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

Have a plan. Once you have

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determined the type and struc-ture for your corporate philan-thropy put your plan in writing and make it accessible to every-one in the company to see and

review on a regular basis.Large or small, it’s a great idea

for all businesses to give back to their local community and sup-port causes that need help.

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MAY 2012

Pets at work can reduce stress Los Angeles Times

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

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

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

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

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

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

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

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

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

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

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


The Associated Press

Finding investors is probably the biggest challenge business startups and small companies face. But small businesses are looking forward to a new way of attracting investors now that President Barack Obama has signed a law known as the JOBS Act.

The law, Jumpstart Our Busi-ness Startups, eases require-ments small companies must meet to raise money. One of the most intriguing parts for many businesses is crowdfunding. The new rules make it legal for companies to solicit money from millions of investors without having to go through the lengthy process of fi ling registration documents with the Securities and Exchange Commission. The law streamlines the paperwork that companies must complete. Obama signed the bill into law last week.

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

the U.S. Chamber of Commerce.Small businesses probably

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

What is crowdfunding?Crowdfunding is a method of

raising money from a large num-ber of people, and it’s generally done online. Charities have been using it for years — the Internet and social networking sites such as Facebook have made it pos-sible for them to reach millions of donors.

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

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

Under the JOBS ActThe JOBS Act allows compa-

nies to raise up to $1 million a year from individual investors. It aims to protect investors by lim-iting how much they can kick in. For example, people who have an annual income or net worth under $100,000 can invest no more than $2,000 in a company that’s using crowdfunding.

Under the law, investors and companies will be brought together by a middleman, either a broker or an Internet website. The brokers and websites will have to register with the SEC. Companies seeking funding must provide fi nancial records, business plans and other infor-mation to potential investors .

Some small business lending experts expect fi nancial compa-nies, such as banks, will act as brokers. While many are reluc-tant to lend to startups, they may

be interested in making money matching companies with investors.

The law is specifi c about the need to protect investors. Law-makers were well aware people who have never before invest-ed in a startup will want to try their luck under crowdfunding. So brokers and websites will be required to ensure that investors understand that they’re risking the loss of their entire invest-ment should a business fail.

DrawbacksGetting investors means com-

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

“All of a sudden, you have 500 people who you don’t know who you now have to answer to,” Sci-leppi said. So an entrepreneur may need to hire someone to be a liaison for investors

Tom Murphy, an attorney in Chicago with McDermott Will & Emery, another business law fi rm, said companies might fi nd they don’t have as much free-dom as they did before taking on investors.

Having shareholders means businesses will need to comply with state laws that govern com-panies with shareholders, Mur-phy noted. That means prepar-ing regular reports on how the company is doing that include information such as revenue, expenses and profi t or losses.

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

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MAY 2012

New law lets small businesses use crowdfunding


The Philadelphia Inquirer

PHILADELPHIA — Harold’s fork truck is rated for 4,000 pounds. He has to move and stack 10 skids (pallets) of paper, each weighing 1,500 pounds. What is the maxi-mum number of skids he can lift at one time?

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

“You’d be amazed at how many people can’t read a ruler to one-sixteenth of an inch,” said Lee Cohn of Case Paper. Case con-verts huge paper rolls into card-board boxes, pharmaceutical packaging, even lottery tickets.

Gather a bunch of manufac-turers like Cohn in a room, and it won’t take them long to start complaining about their inabil-ity to fi nd workers adequately skilled in “shop math,” which can include trigonometry and calculus among other types of mathematics.

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

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

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

Decades of job loss mean that the surviving workers, who are also the most skilled, are nearing retirement age. The pipeline to replace those workers — machin-ists, tool makers, and others — is woefully inadequate, especially when fi nding novice workers capable of the simplest calcula-tions is a problem.

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

These days, manufacturing is

complex — and so is the math-ematics involved.

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

“It used to be if you worked fi ne with your hands, you could make it. You could have a job,” said Michael A. Lucas, direc-tor of a vocational high school not far from the K’nex plant. “Now, if you cannot do a B aver-age in math, you cannot obtain that job, because the academ-ic and technical skills must go hand-in-hand.”

Meanwhile, students most able to handle higher techni-

cal demands are choosing col-lege over technical training for manufacturing.

Glenn Artman, a professor of science, engineering and tech-nology at Delaware County Community College near Phila-delphia, has spent 28 years teach-ing shop math, computer-aided drawing, blueprint reading, and other manufacturing skills.

To him, “shop math” is a mis-nomer. It’s simply the applied mathematics needed on a job, whatever the job is: A cook needs ratios to convert a recipe that feeds four to one that feeds 40. An auto mechanic needs to cal-culate cubic-inch displacement to check engine performance. A building-trades worker hanging drywall needs to be able to mea-sure the distance between studs.

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

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

Relevance is an issue, he said. With the speed of technologi-cal change, even instructors with industrial backgrounds have to struggle to stay current.

At the North Montco Techni-cal Career Center, curriculum developer Bob Lacivita has cre-ated guides that translate regu-lar high-school mathematics concepts to “shop math.” There are diff erent guides for auto mechanics, cooks and welders.

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

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MAY 2012

Manufacturers struggle to preserve ‘shop math’ skills


The Dallas Morning News

DALLAS — In January, 252 work-ers employed through a Dallas-based temporary service won $244,000 in overtime back wages owed because they had been mis-classifi ed as exempt from U.S. wage and hour laws.

Temp Team Inc. workers had been placed at Nieman Print-ing and elsewhere, and some had worked as much as 79 hours a week without overtime pay, according to the U.S. Depart-ment of Labor. Who was respon-sible for the misclassifi cations is a matter of an ongoing legal dispute between Temp Team and Nieman Printing.

That back pay award came only a few weeks after 280 juve-nile detention workers in Gran-bury and Rockdale, Texas, got $159,000 for unpaid overtime. Their employer, 4M Youth Ser-vices, had required attendance at pre-shift safety meetings but did not pay the offi cers for that time.

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

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

It’s not just the federal agency, either. More workers are suing their current or former employ-ers for back wages, too. In U.S. federal courts in Texas, the num-ber of cases fi led for unpaid over-time went from 291 in 2007 to 617 in 2011, according to an anal-ysis by Androvett Legal Media & Marketing and the law fi rm of

Lee and Braziel.Several theories have been put

forth for the increases: a bad economy pushing companies to cut corners on their labor costs; signifi cantly increased funding and enforcement at the Labor Department; changes in state tort laws that have made medi-cal malpractice less lucrative for plaintiff s’ attorneys while over-

time cases have ballooned; and a complicated set of laws and workplace circumstances that may make it diffi cult for employ-ers to understand the rules.

The various explanations have a common touch point, many involved in the cases say.

“Technically, somewhere between 60 to 80 percent of all employers in the United States

are not in compliance with the Fair Labor Standards Act,” said Mike Royal, a lawyer who rep-resents employers in such cases at the Dallas law fi rm of Fisher & Phillips. “The law is convo-luted and complicated, and they [employers] are just busy and don’t understand it.

“If you are doing what you should be doing to avoid these problems, to understand the law and train your managers, you don’t have the problem. Most of this is a training issue.”

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

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

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

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

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MAY 2012

Department of Labor steps up enforcement of overtime rulesGenerally, nonexempt workers who

work more than 40 hours during a workweek are entitled to time and a half of their regular hourly wages for the overtime.

There are two general types of overtime abuse:

MISCLASSIFICATIONS: This happens when employers incorrectly classify employees as exempt. These are the general rules governing clas-sifi cation:

Generally supervisory, manage-ment and some administrative jobs are not considered hourly and are exempt from wage and hour laws. Designating workers who don’t supervise other employees and don’t have authority over work schedules as managers is probably a violation.

There are exceptions to the wage

■

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

Contract workers are not neces-sarily exempt.

CLOCK ISSUES: These occur when employers have workers perform job duties off the clock, such as:

Docking an hour for lunch when workers take less time or work while they eat at their desk or workstation.

Requiring workers to don extra equipment, such as clean suits for workers at a microchip factory, with-out paying for that time.

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

Not compensating properly for travel time.

■

Overtime abuse issues at a glance

See OVERTIME, page 29

MAY 2012 PAGE 25

WWW.CEDARVALLEYALLIANCE.COM

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Annual Celebration2012

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

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

Kim Fettkether, ChairGreater Cedar Valley Cham-ber Council, Veridian Credit Union

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

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

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

Courier Communications was the receipientof the John Deere Treating Capital Well Award

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

Kris Hansen of Western Home Communities accepts the Business of the Year Award spon-sored by Community National Bank

MAY 2012 PAGE 26



Business After HoursThursday, May 10, 2012

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Thank you for your investment in The Cedar Valley!

Good Morning Cedar Valley

Thursday, June 14, 20127:30 -9:00 am

National Cattle Congress PavilionWaterloo

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

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

Breakfast is served. There is no cost to attend. RSVP by June 7 by calling (319)232-1156 or emailing [email protected]

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

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

RSVP by May 3 by calling (319)232-1156 or emailing [email protected]

MAY 2012 PAGE 27



Thursday, May 10, 20127:30-9:00 am

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

Greater graphics, greater functions and greater e ibility are what you will nd on the new reater Cedar Valley lliance Chamber website launching this month. This site brings all the e isting sites to one uni ed site. Viewers can uickly nd member investor infor-mation, RSVP for events, and Cedar Valley business statistics with the new user friendly design. The content management system allows our sta greater access and e ibility to make timely up-dates as well as upload photos, graphics and videos.

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

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MAY 2012



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PAGE 28


“There’s no doubt that people still need to be paid the time they have been working,” said Steve Fox, a workplace lawyer who represents employers at the Dal-las fi rm of Fish and Richardson.

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

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

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

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

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

But it made exceptions to that rule. Managers who supervised workers were declared exempt. Their work was less physical, and they were better compensated and usually paid for time off as well. Administrative workers were exempt as well. And outside salespeople, who set their own hours and were paid largely on commission, were not covered either.

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

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

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

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

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

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

The other type of case is more complicated. That is the clas-sifi cation infraction.

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

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

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

case could approach $1 billion, lawyers for the plaintiff s say.

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

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

AT&T last year settled anoth-er case for about $12.5 million in its classifi cation of information technology workers.

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

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

OVERTIMEFrom page 24

Small business contracting leads House committee agendaWASHINGTON (AP) — It sounds

like a gold mine for small busi-nesses: The more than half a tril-lion dollars that the federal gov-ernment pays companies each year for all kinds of equipment and services. But winning a con-tract with the government can be hard, if not impossible, for a small business.

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

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

Another bill would raise the percentage of government con-tracts that small businesses must get to 25 percent from 23 per-cent. The Offi ce of Management and Budget says the government spent approximately $535 bil-lion on contracts in the fi scal year that ended last Sept. 30.

Graves is a six-term congress-man who grew up on a family farm in northwest Missouri. He got small business experience oper-ating the farm before running for the Missouri Legislature in 1992. Graves says small businesses are holding back on expanding and adding jobs because they’re uncertain about what their taxes will be in the next few years. Also, it’s unclear what regulations are likely to come out of government agencies like the Environmen-tal Protection Agency and the Department of Labor.

Graves talked with The Associ-ated Press recently about small business issues including con-tracting, and about his experi-ences as a small business owner.

Q. If a small business owner were to ask you, what can you do to help me, what would you say?

A. Directly, what we’re trying to do is to help small businesses be able to access those govern-ment contracts. Right now, it can be tough, particularly when it comes to contract bundling. The federal government is notori-ous for wanting to do as little as work as possible. So they bundle up a lot of these contracts into as big a contract as they can get. And a lot of small businesses just simply can’t compete and can’t pursue that and it just really becomes a large business thing.

Indirectly, on the other hand, we’re doing everything we can do to create an environment

which is conducive to small business. And that is, those things small businesses are wor-ried about, the uncertainty of some of these things, so they’re not expanding, they’re not moving forward (because of) things like tax reform, regulatory reform, the health care debate and the costs associated with it, energy and the costs associ-ated with it. And they’re holding back. And so indirectly, we’re looking into a lot of those things and trying to have an impact there also.

Q. How can you help with issues your committee doesn’t control, like health care?

A. We can still hold hearings on it. We want to know how it’s aff ecting small business, what impact it’s having on small busi-ness because we are advocating for small business. And we take the information and pass it on to

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

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

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

MAY 2012

See HOUSE, page 30


Q. When do you think the full House will consider the bills?

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

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

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

Q. Can you give an example?

A. The Department of Labor is proposing a change in child labor laws when it comes to children working on their family farms. They’re trying to throw out decades-old laws. The secretary of labor says we’re robbing our children of their youth. I would argue that many kids need to be working on the farm. It teaches them responsibility. It teaches them work ethic and everything

else. That’s just one perfect example. Another is the EPA idea that they’re going to regulate dust as a particulant. In the rural areas, dust is just a fact of life. If you regulate it as a pollutant, that’s ridiculous.

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

A. The Small Business Com-mittee touches everyone’s life. There are so many small busi-nesses out there, everything from the restaurant to the mom and pop store downtown to the self-employed truck driver to the farmer. You name, it, it’s all small business.

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

A. The biggest satisfaction in running a small business was being able to accomplish it. Before I could be part of the fam-ily operation, my dad wanted me to go out and be on my own. So I had to borrow money to purchase equipment, borrow money to get my operating costs, borrow money eventually to buy land. And to successfully do that on

my own. That was the biggest satisfaction.

Q. And your biggest frustration?

A. We do a wonderful job of producing food for the world.

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

tration, and it is for every small business owner. They don’t know what the tax code’s going to look like at the end of this year. And with these extensions (of the payroll tax cut), we’re not giving any certainty to folks.

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MAY 2012

HOUSEFrom page 29


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Event matches industry partners with ISU green technology ideas

AMES — The Iowa State Uni-versity Research Foundation and the Iowa Innovation Corp. hope to play matchmakers at a May 16 webinar by putting together industry representatives and Iowa State innovators.

Making these connections could boost Iowa’s economy and is a key objective of the new not-for-profi t Iowa Innovation Corp.

The two groups are promot-ing and developing Iowa State’s green innovations with commer-cial potential as part of a federal i6 Green project to expand inno-vation in the areas of renewable energy, energy effi ciency or green technology in the state. A federal i6 Green award in 2011 launched the eff ort.

The May event is part of the next chapter in the multi-agency initiative to expand the state’s Proof of Concept Initiate and improve connections between Iowa businesses, entrepreneurs, and universities.

Sixteen green technolo-gies invented by ISU research-ers, some with patents or pat-ents pending, will be presented

to industry representatives to help spark interest in devel-oping the technologies for the marketplace. Similar events are being designed to connect exist-ing Iowa SMEs to technologies generating from the University of Northern Iowa, University of Iowa College of Engineering and from ISU’s Virtual Reality Applications Center.

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

“We’re focused on increas-ing and speeding the commer-cial development of university discoveries and technologies to benefi t Iowa’s economy and cre-ate jobs.”

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

Brady A. Gruhn, CCIM

Dustin W. Whitehead, CCIM

Jack Jennings, CCIM

Brady A. Gruhn, CCIM

Dustin W. Whitehead, CCIM

Jack Jennings,CCIM

business monthly - may 2012

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