September/October 2013 by St. Cloud Area Chamber of Commerce

EMPLOYEE HEALTH FOR A HEALTHIER BUSINESS

Worksite Health and Wellness Biometric Screening

Healthy employees mean a more productive work place and lower medical costs. By providing this screening for employees, you’ll raise health awareness and identify potential health problems early on. HealthPartners wellness coaches will conduct biometric screenings at your location and provide same day results and consultations. Biometric Screening includes • Complete lipid profile: HDL, LDL, triglycerides, total cholesterol • Blood glucose • Blood pressure • Body composition: height, weight, body mass index This is an important tool to give employees a more complete picture of their overall health.

BENEFITS INCLUDE • • • •

Help reduce overall corporate medical expenditures Build health awareness Give employees the tools for a healthy lifestyle Early detection and treatment for addressing chronic illnesses

FOR MORE INFORMATION, CONTACT Greg Bockrath 320-203-2405 worksitehealth@hpcmc.com | hpcmc.com

This service is available to all companies. HealthPartners insurance is not needed.

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IN EVERY ISSUE 8

6 President’s Letter

Editor’s Note

17 Top Hats

Business Calendar

Network Central

CONTENTS

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PROFIT

R END

•

NETWORK

•

GROW

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SEPTEMBER/OCTOBER 2013

G R OW

Business Tools

24 Entrepreneurism Customers for Life

You’ve pursued them and wooed them. Now the challenge is not to lose them. Eight suggestions for turning one-time customers into customers-for-life.

26 TechStrategies

Crisis Though rare, when they

occur social media crises can escalate quickly. The best plan is to have a plan.

27 Tech News 28 Management Tool Kit

PROFIT

This Issue 44 Feature

High Tech, High Touch!

Customer service in the digital age presents a whole new set of service demands.

48 Special Focus Space Hunters

There’s plenty of retail space available in Central Minnesota. These tips can help you find the perfect fit.

54 Business Spotlight

Gary Bechtold, St. Cloud Overhead Door Co.

Protecting What You’ve Built

PROFIT

36 COVER STORY BUILDING VALUE

Bob Strack, Strack Companies, decided early on that construction would only be part of his business. His focus would be building long-term relationships on a foundation of trust. N E T WO R K

Upfront 10 News Reel

What’s happening and who’s moving. Business news from

around Central Minnesota.

Book Review Contagious: Why Things Catch On by Jonah Berger

If something happened to you or a key employee, how would your business continue to operate?

30 Going Green

Paint Your Parking Lot

Economy Central presented by Falcon Bank Growth Through Diversity

Expanding the variety of industries represented in Central Minnesota can lessen economic downturns for the region.

12 Your Voice In Government

B2B Taxes Minn. Chamber hopes to repeal new business taxes in 2014

13 People to Know 16 Getting Going

Those Darn Financial Statements

20 The Trouble with Business Getting Paid

Special Section 49

Central Minnesota Growth Guide

ONLY ONLINE •• Tech Etiquette •• Employee Accountability

•• Running Effective Meetings •• SEO Myths

www.BusinessCentralMagazine.com

ROCK SOLID FOUNDATION SINCE 1950

GENERAL CONTRACTING CONSTRUCTION MANAGEMENT DESIGN/BUILD

St. Joseph, MN 320.363.7781

wgohman.com

PRESIDENT’S LETTER

NETWORK

Welcome Back Students!

moved to St. Cloud as a college student

a favorite. My college years molded my life

in September 1977. St. Cloud State

and future, forming the person I have become.

University held all my hopes and dreams.

Our community is changing the lives

I planned to get a political science degree,

of young adults at an astonishing rate. We

head to law school, run for office, and

welcome more than 25,000 college students

change the world.

to our area every fall. They fill our restaurants

I moved into a rental house with 12 other

and stores. They spend their money here.

girls and a house manager named Angie.

They are an important sector of our labor

We became “Angie’s Angels.” One of our

force. Many of them will choose to build their

roommates wrote songs and played the guitar.

lives here when their education is complete.

She wrote a house theme that included each

We have seven wonderful post-secondary

Main Phone 320-251-2940 Automated Reservation Line 320-251-2940, ext. 126 Program Hotline 320-251-2940, ext. 125 email: information@StCloudAreaChamber.com www.StCloudAreaChamber.com ST. CLOUD AREA CHAMBER OF COMMERCE STAFF President | Teresa Bohnen, ext. 104 Vice President | Gail Ivers, ext. 109 Director of Administration Judy Zetterlund, ext. 106 Special Events Coordinator Virginia Kroll, ext. 105 Communications & Workforce Development Coordinator Whitney Bina, ext.130 Membership Sales Specialist Jaime Buley, ext. 134 Administrative Assistant Vicki Lenneman, ext. 122 Administrative Assistant Cindy Swarthout , ext. 100 Administrative Assistant Sharon Henry, ext. 124 VISITORS BUREAU STAFF Executive Director Julie Lunning, ext. 111

of us by name. My verse went:

colleges and universities in our area. They

Teresa comes from Shakopee,

include public, private, not-for-profit and

Director of Convention Sales Lori Cates, ext. 113

and Mary’s from the South;

for-profit facilities. There is something for

Director of Sales & Marketing Judy Okerstrom, ext. 112

Mary is the quiet one, and

anyone who is seeking to further their

Teresa has the mouth.

education. Your Chamber is honored to work

Ah yes, the more things change, the more they stay the same. Before my parents left me on my own

with all of them to benefit our membership.

Sales & Marketing Coordinator Nikki Fisher, ext. 110

businesses this year reveal that concerns

Administrative Assistant Melissa Billig, ext. 100

about our workforce are again emerging at an

Coborn’s Fifth Avenue to load up on bread,

alarming rate. Businesses are reporting they

peanut butter, milk, and popcorn. We stopped

need more workers, but most importantly,

at Tempo to pick up a new shower curtain.

they need a 21st Century workforce. They

We ate at Tomlyano’s Pizza.

need people who are trained in the right ways, who know they need to show up for

fall at the downtown AT&T office waiting in

work every day and who have transferrable,

line with all the other students for yet another

adaptable knowledge, skills and experiences.

new phone for my apartment. And looking

When you pass college students on the

for a job to supplement the $50 monthly

street this fall, smile and greet them. Welcome

allowance my parents fronted me.

them back with enthusiasm. Those very same

As my own daughter heads back to college this fall, my own good memories flood back.

students may be your neighbor — or your boss — in just a few years.

DB Searles was brand new and very trendy. If a date took you there, you knew he really liked you. I discovered my favorite Wild Tostada Salad at Mexican Village – and it’s still

Director of Visitor Services Jean Robbins , ext. 129

Our Grow Minnesota! visits to area

for the first time in my life, we took a trip to

I remember spending an afternoon each

Director of Sports & Special Events Kelly Sayre, ext. 128

Teresa Bohnen President

Business Central Magazine •• SEPTEMBER/OCTOBER 2013

2013-14 BOARD MEMBERS Jim Beck Minnesota School of Business Jason Bernick Bernick’s - Beverages & Vending Gary Berg G.L. Berg Entertainment, Performing Artists & Speakers Craig Broman St. Cloud Hospital/CentraCare Health, Past Board Chair Neil Franz Neils-Franz-Chirhart, Attorneys at Law Jayne Greeney Schill St. Cloud Area School District #742 Jim Gruenke Mark J. Traut Wells John Herges Falcon National Bank, Board Chair Diane Mendel Playhouse Child Care Kris Nelson Custom Accents, Inc., Board Vice Chair Dr. Earl Potter, III St. Cloud State University Roger Schleper Premier Real Estate Services Jodi Speicher The Good Shepherd Community Bea Winkler Pine Cone Pet Hospital Chriss Wohlleber Le St. Germain Suite Hotel

Our focus ...

Your Health

Norman T. - Andover

After experiencing chest pain and shortness of breath, Norman required four stents for his heart. He then turned to the wellness experts at the CentraCare Heart & Vascular Center. Norman learned how to improve his diet and exercise habits and is living a healthier life.

CentraCare Health — a sharper focus on your health.

centracare.com

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EDITOR’S NOTE

NETWORK

Career Paths My first day on the job I passed out. I was observing a patient during ultrasound therapy and the next thing I knew I was the one on the gurney.

Editor Gail Ivers with her puppy, Dusty

I did not set out to work for a chamber of commerce. When I was in 7th grade we were given a career skills inventory. I remember telling the school counselor that I wanted to be a veterinarian. At the time I thought I loved animals and wanted to work with them. In reality I was obsessed with owning a dog and talking about becoming a veterinarian was an excuse to discuss the need for a dog. By 10th grade I had my dog and the idea of working with biting, clawing animals had lost its appeal. Instead I was going to be a physical therapist. I started looking at schools. I signed up to be a junior volunteer at the hospital. I specifically requested, and was given, time in the physically therapy department. That didn’t work out so well. My first day on the job I passed out. I was observing a patient during ultrasound therapy and the next thing I knew I was the one on the gurney. I’m not sure who was more upset – the physical therapist or

Business Central Magazine •• SEPTEMBER/OCTOBER 2013

me. Either way, the PT Department decided it didn’t need a junior volunteer and I thought that was a fine decision. It would be safe to say that when I applied for my job at the St. Cloud Area Chamber, I had no idea what a chamber did. All I knew was that they needed a communications director and I was a communications major who needed a job. My dad had been a member of the Willmar Chamber and I remember that he and my mom would attend the annual banquet. But that only meant that I had a night at home with my dog, a pizza, and control of the TV. Fortunately, during my interview, no one ever asked me what I knew about the Chamber. I was asked how I liked working with volunteers. I couldn’t imagine why they wanted to know. I honestly answered that I hadn’t had a lot of experience with volunteers, but overall I thought it was fine. Bob Strack, owner of Strack Companies, (see the story on page 36) did not set out to be a business owner. He was going to be a lawyer and in his mind was well on his way

before family obligations sent him in a different direction. Though neither Bob nor I planned our career paths, I think we’d agree that they’ve turned out well. Bob figured out a way to turn the family construction business into a relationship builder that allows him to develop personal connections with clients. As for me, today I work with about 300 volunteers and it turns out it is better than fine, it’s extraordinary. And probably a better fit than a career in medicine, since I still faint at the sight of blood. Until next issue,

Gail Ivers

Vice President

Editor

Publisher Teresa Bohnen Managing Editor Gail Ivers Associate Editor Dawn Zimmerman CONTRIBUTING WRITERS Whitney Bina St. Cloud Area Chamber of Commerce Mary Edwards professor emeritus, St. Cloud State University Sharon Henry St. Cloud Area Chamber of Commerce Dr. Fred E. Hill St. Cloud State University. Gail Ivers St. Cloud Area Chamber of Commerce Tracy Knofla High Impact Training Joshua Longnecker Northwestern Mutual Mary MacDonell Belisle WordingForYou.com David Olson Minnesota Chamber of Commerce Lawrence Schumacher Wordbender Communications, LLC

Dawn Zimmerman The Write Advantage ADVERTISING Associate Publisher/Sales Wendy Hendricks, Hendricks Marketing Ad Traffic & Circulation Yola Hartmann, Hazel Tree Media

110 Sixth Avenue South P.O. Box 487, St. Cloud, MN 56302-0487 Phone (320) 251-2940 • Fax (320) 251-0081 www.BusinessCentralMagazine.com For advertising information contact

ART Design & Production Yola Hartmann, Hazel Tree Media Sarah Sucansky Cover Photo Joel Butkowski, BDI Photography

Wendy Hendricks, (320) 656-3808, 110 S. 6th Ave.,

ACCOUNTING Accountant Judy Zetterlund

unless accompanied by a stamped, self-addressed

WEBSITE Vicki Lenneman

CORPORATE SPONSOR

P.O. Box 487, St. Cloud, MN 56302-0487. Editorial suggestions can be made in writing to: Editor, Business Central, P.O. Box 487, St. Cloud, MN 56302-0487. Submission of materials does not guarantee publication. Unsolicited materials will not be returned envelope.

Business Central is published six times a year by the St. Cloud Area Chamber of Commerce, 110 Sixth Avenue South; P.O. Box 487, St. Cloud, MN 56302-0487 • Phone (320) 251-2940 • Fax (320) 251-0081 Subscription rate: $18 for 1 year.

When you look at our stats, you’ll see Bremer Bank is a big deal. More than $8 billion in assets. Nearly 100 locations. Over 100 years in business. But when you walk in the door, you’re welcomed by hard-working folks, the same as you. We sit down and work out financial solutions to help you grow your business. So talk with a local Bremer banker. It could be the start of something big.

BRE2017D11BCM-Big-Lender-Small-Pretense-7pt5x4pt875.indd 1

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Your Voice in Government

People to Know

Getting Going

17 Top Hats

Business Calendar

Point of View

The Trouble with Business

UPFRONT

R END

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2013,ISBN978-1-4516-8657-9

What makes things popular? If you said advertising, think again. People don’t listen to advertisements, they listen to their peers. But why do people talk about certain products and ideas more than others? Why are some stories and rumors more infectious? And what makes online content go viral? —From “Contagious: Why Things Catch On”

n his book, Contagious, author Jonah Berger reveals the secret science behind word-of-mouth and social transmission.

By Dr. Fred Hill

Simon & Schuster, New York,

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N E WS R E E L

“STEPPS” These six principles can help design business messages that people will share

Catch On by Jonah Berger,

NEWS & PEOPLE THAT MAKE UP THE CHAMBER NETWORK

BOOK REVIEW

Contagious: Why Things

PROFIT

NETWORK

GROW

Berger’s book is organized around six chapter structures, even though each of the six contains many stories. They are: 1. Social Currency 2. Triggers 3. Emotion 4. Public 5. Practical Value 6. Stories These six chapters are actually the Six Principles of Contagiousness. And, the six principles are compacted into the acronym, STEPPS. Think of the principles as the six STEPPS to crafting contagious content. In the introduction, we learn that Howard Wein wanted to launch a new luxury boutique steakhouse in Philadelphia called Barclay Prime. To create buzz and customers, he came up with the hundred-dollar cheesecake, served with a chilled split of Veuve Clicquot champagne. Wein didn’t create just another cheesecake, he created a conversation piece. This conversation piece worked and Barclay Prime caught on.

Business Central Magazine •• SEPTEMBER/OCTOBER 2013

Of course there are some solid business practices associated with why products and ideas become popular. For instance, they are just plain better or have more attractive pricing. True, advertising can also play a role. However, social influence and word of mouth are critical in today’s global marketplace. Evidence shows that word of mouth is the primary factor behind 20 to 50 percent of all purchasing decisions. Berger reports that “a word of mouth conversation by a new customer leads to an almost $200 increase in restaurant sales. A five-star review on Amazon.com leads to approximately 20 more books sold than a one-star review.” Word of mouth is more effective than traditional advertising because it is more persuasive and more targeted. Typical advertising tries to reach the largest number of interested customers. BC Dr. Fred E. Hill is a professor of Learning Resources Services, at St. Cloud State University.

Chamber’s CVB recognized for service The St. Cloud Area Chamber’s Convention & Visitors Bureau was recognized as one of the Top Sports Destinations by SportsEvents. Sports event professionals were asked to name groups that displayed exemplary creativity and professionalism toward the groups they hosted. The St. Cloud Area Chamber’s CVB was among the top picks selected based on the results from the online voting system.

Colatrella elected board vice president Dr. Nicholas Colatrella Colatrella, owner

and medical director at PineCone Vision Center, was elected vice president of the board of trustees of the Minnesota Optometric Association (MOA). Previously, Colatrella served as treasurer for the MOA Board of Trustees and led the MOA Professional Education Committee.

G.L. Berg receives award G.L. Berg Entertainment, Performing Artists & Speakers, received “Best Entertainment Award” at the Minnesota Meetings & Events Readers Choice Awards. Winners are handpicked by meeting planners, event planners and suppliers who read Minnesota Meetings & Events, a quarterly magazine. G.L. Berg has won this award five times in ten years.

IT HAPPENED WHEN?

September 20-21, 1974 The Chamber’s Annual Board Retreat

Board members participate in a networking activity in 1974

n September 20, 1974, the St. Cloud Area Chamber of Commerce’s Board of Directors headed to Brainerd for their annual planning retreat. Board members participated in team-building activities, sat down for formal meetings and presentations, brainstormed goals and plans for the coming year, and spent time socializing over meals. Although the Chamber’s Board of Directors still meets for an annual retreat, some things have changed. The retreat is now a day-long planning meeting held in the St. Cloud area. The

From left to right: Goal setting at the strategic planning retreat in 1974; 2013 Chamber Board Retreat

event kicks off with a Board of Directors meeting in the morning and a planning session follows. In addition to board members, the meeting includes the Chamber’s committee chairs and vice chairs and Chamber staff. Like the retreat in 1974, these groups spend the

day reviewing the past year and setting goals for the coming year. There are also presentations and time for networking. This year’s planning retreat was June 25 at Blackberry Ridge Golf Course. — Whitney Bina

Immediate care when you need it most.

This is why we’re open late.

StCloudMedical.com

Your body runs on its own clock. Sometimes illnesses or accidents happen when most clinics are closed. That’s why we offer after-hours health care at both of our St. Cloud campuses, evenings and weekends, seven days a week. It’s the same conscientious care we offer during business hours–just at a more sick-friendly time.

Express Care

Mon – Fri: 2:30 P.M. – 9:30 P.M. Sat – Sun: 10:00 A.M. – 5:00 P.M.

South Campus 320-240-2170 Northwest Campus 320-529-4741 BusinessCentral.indd 1

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UPFRONT

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NETWORK

N E WS R E E L Gaslight Creative receives ADDYs Gaslight Creative received three American Advertising Awards (ADDY) at the District 8 ADDY Awards ceremony in Minneapolis. Sponsored by the American Advertising Federation, the district awards are the second of three levels in a national competition. Projects receiving a Gold ADDY at the district level are automatically forwarded to the national ADDY Awards.

YOUR VOICE IN GOVERNMENT

B2B Taxes

Minnesota Chamber hopes to repeal new business taxes in 2014

Jacobs Financial receives recognition Financial advisors at Jacobs Financial in St. Cloud received recognition from the Million Dollar Round Table (MDRT) for ranking among the most successful sales professionals in the life insurance-based financial services business. James and David Jacobs earned the “Court of the Table” distinction, which means they earned three times the base requirements set by MDRT. Andrew Jacobs achieved two times the base requirements.

Stearns Insurance recognized Jim Wensel, Stearns Insurance Services, Inc., was presented a 2013 President’s Club plaque from Grinnell Mutual Reinsurance Company. The plaque recognizes the agency’s achievement in production and profitability over a fiveyear period. Grinnell Mutual provides reinsurance for mutual insurance companies and property and casualty insurance products to independent agents. Wensel

United Way promotes, adds staff Kristin Darnall joined the United Way of Central Minnesota as vice president of resource development. Jessica Houle was promoted to workplace campaign manager.

By David C. Olson

innesotans, prepare to dig deeper into your pocketbooks. Companies are being asked to pay a premium for doing business in Minnesota. The sales tax is being extended to two broad categories of business-to-business (B2B) services, effective July 1, and a third category next April. The pyramid effect of the higher cost is certain to be felt across the state. The Minnesota Chamber of Commerce and our federation of local chamber partners succeeded in defeating the broad-based sales tax on B2B transactions in the legislative session. But the final budget still enacted sales tax on three types of services:

•• Labor service charges for repair and maintenance of business equipment and machines, effective July 1. ––––––––

•• Purchases of telecommunications equipment by telecommunications providers, effective July 1. –––––––– •• Storage and warehousing services of business-related goods, effective April 1, 2014. Minnesota businesses will pay the 6.875% state sales tax, plus any local sales tax, on these services. Do you have farm machinery, capital equipment, computers, industrial equipment, or any other piece of business equipment, in need of repair? Do you pay or provide warehouse and storage services in Minnesota? If you have an employee or own an affiliated company that can provide these services, you’re in luck – the new tax will not apply. But for the majority of companies, especially small and midsize businesses that have to hire the work out, you’ll be paying the tax. Minnesota is among the few states that tax these B2B services. The impact, without a doubt, will be significant as affected companies will be placed at a disadvantage with their peers in other states and nations. Consumers will pay the price through higher costs for goods and services; employees will feel the impact through lower wages and lost jobs. These taxes will harm Minnesota businesses and Minnesota’s economy. The Minnesota Chamber is mounting an aggressive campaign to repeal these taxes. Please join our effort by contacting Jennifer Byers, vice president of grassroots and chamber relations, at 651.292.4673 or jbyers@ mnchamber.com. It’s critical to strengthening the business environment and improving the lives of all Minnesotans.BC

About the writer David C. Olson is president of the Minnesota Chamber of Commerce – www.mnchamber.com

Business Central Magazine •• SEPTEMBER/OCTOBER 2013

PEOPLE TO KNOW

Success Breeds Success

Chamber Board Chair brings significant business experience to new leadership role.

ohn Herges first became involved in the St. Cloud Area Chamber in 1973. “I was a loan officer at First American National Bank, now Bremer. My boss, Al Didier called me into his office and said ‘John, I’d like you to get involved in the Chamber. It would be good for you, and I think it would be good for the bank.’” Today, Herges echoes that advice when talking to his employees at Falcon National Bank. “I’m convinced the

Chamber of Commerce makes a difference for businesses in St. Cloud and the surrounding area,” Herges said. “I tell my employees that I’d really like to see them involved in the Chamber of Commerce – it can help them and help the bank.” After two years on the Board, Herges was asked to step into the chair position. “When you get involved in an organization, I think it’s natural to want to have a leadership position so you can make a difference,” Herges said. “I think I can add value. I have

lots of experience in business and I know lots of business people. Some are Chamber members and some aren’t. I’m hoping to bring some of the ones who aren’t members into the Chamber.” That goal is in keeping with the Chamber’s strategic plan. Board members and committee leadership met in June and developed three WIGS. “I like that,” Herges said. “WIGS – that was new for me, and it struck a

Story continues on page 15

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UPFRONT

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NETWORK

N E WS R E E L Jacques joins Manpower Chris Jacques joined Manpower Jacques of St. Cloud as branch manager. He is responsible for directing and managing local staffing specialists, developing strong relationships with existing and new clients, and providing businesses with staffing and workforce solutions. Jacques has over 20 years of sales and marketing experience.

Quinlivan & Hughes shareholders recognized; firm adds associates

Schwegman

Ebert

Steven R. Schwegman and Dyan J. Ebert, shareholders at Quinlivan & Hughes, were selected as 2013 Minnesota Super Lawyers.

Schley

Holthaus

Jolene Schley and Rachael Holthaus join the firm as associates. Schley practices in the areas of business and corporate law, wills, probate, estate planning, trusts, and real estate. Holthaus practices in the insurance defense and general practice litigation groups. Julie A. Blanchette, RN, joined Quinlivan & Hughes as a Blanchette nurse consultant. Blanchette has over 15 years of experience as a Registered Nurse. James S. McAlpine was recognized as a 2013 Minnesota Rising Star. McAlpine

AT THE TOP

Entrepreneurship Bob Strack receives Entrepreneurial Success Award

ob Strack, owner of Strack Companies, was selected as the 2013 St. Cloud Area Entrepreneurial Success Award recipient. The award is presented annually by the St. Cloud Area Chamber of Commerce. After working in the family construction business for several years, Bob Strack purchased it when his father retired in 1982. That was a tough year, according to Strack. They had three employees and $400,000 in sales. Since Strack wasn’t excited about the way the business was set up, and since the business was at rock bottom anyway, he decided to change things. He stopped bidding on projects, only accepting clients who wanted a long-term business relationship. He restructured his services so that constructing a facility was only one part of the service he provided. He started immersing himself in his clients’ businesses. “I know more about the business aspects of my clients than 90 percent of their employees,” he said. Strack also restructured his company. He started outsourcing portions of the

Craig Broman (R), Cen traCare Health and cha ir of the Chamber’s Boa rd of Directors, presen ts the Entrepreneurial Success Award to Bob Strack, Strack Compan ies, at the Chamber’s Business Awards Lun cheon in May.

construction, such as concrete, masonry, and steel work, keeping only the carpentry in-house. At the same time he expanded his services beyond general contracting, to include things like project management and real estate services. “We have fewer employees now than we had field workers in 1992,” Strack said, “but our volume is ten times what it used to be.” Today the company has 15 employees and about $50 million in revenue.

He barely noticed the great recession. “During the last five years, we had three record years,” Strack said. The Entrepreneurial Success Award recognizes an individual who started or took over a small business and through his or her leadership grew the company into a large enterprise. Small Business Administration size standards are used to determine the award. — Gail Ivers For more on Bob Strack and Strack Companies, see the cover story on page 36.

IN THE NEWS

SAFTEY FIRST

Brenny Specialized, Inc. received a Platinum Fleet Safety Award, which is based on a company’s year-end preventable accident results. These awards are presented at the National Safety Awards Program. This is the sixth safety award Brenny Specialized has received since 2001.

Business Central Magazine •• SEPTEMBER/OCTOBER 2013

(L to R): Todd & Joyce Brenny, Sarah Hanebuth, and Bonnie Supan of Brenny Specialized & Rich Albrecht, a safety representative

PEOPLE TO KNOW Story continued from page 13. chord. It means Wildly Important Goals. We agreed that the WIGS for the Chamber are membership growth, membership retention, and volunteer engagement. My primary goal this year is to help the Chamber staff and Board focus on the WIGS.”

As a Five-Star Chamber, the St. Cloud Area Chamber of Commerce has already been recognized as being in the top one percent of chambers nationwide. But that doesn’t surprise Herges, who lists the Chamber staff, Board, Convention and Visitors Bureau, membership, and volunteers as strengths of

the organization. “I’m always so impressed when I go to meetings and see all the volunteers who are involved,” he said. “Every meeting you go to you see volunteers who are committed, engaged, and enthusiastic. We need to keep connecting new members to our programs so they are able to engage and feel the full benefit

of membership, too. Everybody likes to be part of a successful organization.” — Gail Ivers

JOHN HERGES, CEO Falcon National Bank PO Box 366 • 183 Cedar Drive, Foley, MN 56329-4401 (320) 968-6300 www.falconnational.com

DID YOU KNOW? John Herges, who started a one-year term in September as chair of the Chamber’s Board of Directors, originally volunteered on the membership committee. Over the years he’s participated on other committees and attended many events. Most recently he’s become active in the Chamber’s government affairs programming, making three trips to Washington, D.C., with other Chamber volunteers and Chamber President Teresa Bohnen.

just within

reach When you’re hurt, we’re here.

Why travel for treatment when you’re in pain? Our orthopedic specialists provide the same care you’ll find in the metro–right here in St. Cloud.

StCloudOrthopedics.com 320.259.4100 Knee & Shoulder • Joint Replacement • Sports Medicine • Hand Center Trauma • Spine Center • Foot & Ankle • Physical & Occupational Therapy SCO Business Central-REACH.indd 1

4/25/13 8:50 AM

S E P T E M B E R / O C T O B E R 2 0 1 3 • • w w w. B u s i n e s s C e n t r a l M a g a z i n e . c o m

UPFRONT

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NETWORK

N E WS R E E L

G E T T I N G GOING

Gohman purchases Artistic Stone, Inc.

Those Darn Financial Statements

W. Gohman Construction Co. purchased Artistic Stone, Inc., a specialty contractor, and plans to merge it with Gohman’s existing concrete division to create a new division called Artistic Stone & Concrete. Artistic Stone & Concrete offers custom exterior and interior, natural stone and concrete installations.

Horizon Roofing wins award Horizon Roofing won a Firestone Master Contractor Award for 2012. This is the 24th award the company has won for quality.

SCSU department receives grant St. Cloud State University’s Department of Communication Sciences and Disorders received a $4,250 grant from the St. Cloud Area Sertoma Club. The grant will help fund the purchase of a Maico MI 44 middle ear analyzer, a tool to help students in audiology and speech language pathology training programs.

Cartridge World donates trees

In honor of Earth Day 2013, Cartridge World donated $400 in gift certificates, designated for the purchase of trees to the City of Waite Park. Trees were planted in the public areas of the city.

ProcessPro adds team member Jamie Kivell joins ProcessPro as a client support specialist. Kivell obtained her bachelor’s degree from St. Cloud State University in Communication Studies.

Improve your odds at the lending table by following these simple suggestions

he current lending environment is particularly hard on expanding or startup small businesses. Lending standards have tightened, increasing the necessity to provide accurate and timely financial information. If a bank must choose between two loans with similar risk, the bank will always choose the company that can prove it understands the bank’s concerns, as well as the company’s own financial position. The following guidelines can help you avoid common pitfalls at the lending table.

BE PROACTIVE • Maintain current financial statements that are prepared or reviewed by a professional, including personal financial statements of the owners. • Prepare cash flow projections to support debt service requirements. • Make sure the company’s business plan is supported by the financial statements. • Prepare financial statements on an accrual basis. • Review subsequent transactions for unrecorded transactions. • Review inventory and fixed asset values prior to meeting with the lender. • Assemble all relevant documentation for the loan application ahead of time. • Anticipate questions, prepare responses, and compile a list of selling points. FOCUS ON KEY FINANCIAL DATA IN YOUR FINANCIAL STATEMENTS Banks rely on a variety of factors when determining whether to fund a loan, with an emphasis on: • Debt service coverage • Collateral value • Liquidity • Debt to equity ratios • Cash flow from operations One of the common misconceptions of borrowers is that a bank will lend money

Business Central Magazine •• SEPTEMBER/OCTOBER 2013

solely on the value of the underlying collateral. This cannot be farther from the truth. Although collateral value is important, cash flow and liquidity play a much larger role in a credit decision. A bank needs assurance that sufficient liquid assets are available to repay the borrower’s obligation.

PUT YOURSELF IN THE BANK’S SHOES Keep in mind that any loan a bank underwrites is subject to criticism from its regulators and auditors. Insufficient cash flow to service the debt will lead to the loan being downgraded in rating with potential regulatory consequences. KNOW THE BANK • Does the bank lend to small businesses? • What are the bank’s ratio requirements and can they be met? • Will the bank expect additional banking relations (i.e. depository accounts)? Providing accurate and timely financial statements, as well as computing the desired ratios for the bank and carefully preparing for a meeting with the lender will improve a small business’ odds to acquire financing and may make the difference between securing the loan and searching for other sources of funding. BC Source: CliftonLarsonAllen

TOP HATS | New Members DataQuick Title, real estate title insurance and loan closings, 616 Roosevelt Road, St. Cloud. Pictured: Roger Schleper, Diane Kroska, Amber Killmer, Bobbi Olson and Tauna Quimby

Princeton Insurance, an independent provider of both commercial and personal lines of insurance, 210 2nd Ave. SW, Princeton. Pictured: Diane Ohmann and David Haugen.

Dierkes Heating & Air, residential and light commercial heating and air conditioning, sales and service 1312 Pond View Lane, St. Joseph. Pictured: Diane Ohmann, Todd Dierkes, Amy Dierkes and Jason Bernick.

Sartell Pediatrics, helping children maintain optimal health and wellness, 111 2nd St. S, Sartell. Pictured: Jason Bernick, Jennifer Rapatz, Dr. David Smith, Jill Smith and Diane Ohmann.

Marsden Building Maintenance, janitorial services, security solutions, and facilities maintenance, 3900 Roosevelt Road, Suite 102, St. Cloud. Pictured: Tauna Quimby, Diane Lewis and Bob Lien.

Todd Myra Photography, full service photography agency including weddings, babies, and commercial projects, 725 27th Ave. N, St. Cloud. Pictured: Tauna Quimby Todd Myra and Bob Lien.

S E P T E M B E R / O C T O B E R 2 0 1 3 • • w w w. B u s i n e s s C e n t r a l M a g a z i n e . c o m

UPFRONT

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NETWORK

N E WS R E E L

BUSINESS CALENDAR SEPTEMBER - OCTOBER 2013 •• Visit events.StCloudAreaChamber.com for a detailed calendar.

Traut Companies receives recognition Water Right, an international manufacturer of water treatment products, recognized Mark J Traut Wells, Inc. for the company’s growth in the industry. The designation is based on the volume of water treatment products supplied in 2012. Traut Companies is Water Right’s fifth largest water treatment dealer in the nation.

Marco receives awards Marco, Inc. was named one of the Top 100 Workplaces in Minnesota by the Star Tribune and Minnesota Business. Marco also received the 2013 Best Place to Work by the Minneapolis-St. Paul Business Journal. These awards come in the wake of Marco’s largest employee growth in the company’s history; 310 new employees were hired in the past year. Marco also received the 2013 Perfect Image Award for Outstanding IT Services Provider from imageSource Magazine at the ITEX National Conference and Expo in Las Vegas.

The company received the 2013 Break Away Partner of the Year Award from Cisco, which was presented at Cisco’s Annual Partner Summit in Boston. Marco is the only Minnesota headquartered company to win an award at this year’s event. Compiled by Whitney Bina

Can’t-miss opportunities to influence, promote and learn Star Celebration

OCTOBER 3 - 5-8 p.m At Le St-Germain Suite Hotel, 404 W St. Germain St., St. Cloud

This formal celebration honors the many contributions of Chamber volunteers who make the St. Cloud area a better place to live and work. The event is open to all Chamber members and their guests. Cost is $25 and registration is required at www. StCloudAreaChamber.com.

Lunchtime Learning

SEPTEMBER 4: “HR Basics for Small Business” by Mardi Noyes, Catholic Charities, sponsored by Central Minnesota Society for Human Resource Management. OCTOBER 2: “Prospecting/Building your Customer Base” by Brenda Eisenschenk, InteleCONNECT, sponsored by Center for Diagnostic Imaging.

SEPT. 12, 26 & OCT. 24

Business After Hours A complimentary open house for Chamber members and guests. Bring lots of business cards and prepare to grow your network! 4:30 - 6:30 p.m.

Business Central Magazine •• SEPTEMBER/OCTOBER 2013

Waite Park Chamber For businesses interested in Waite Park issues. Lunch is provided by the host when you register at least two days in advance. 11:30 a.m. – 1 p.m. SEPTEMBER 18: Hosted by Emerald Companies at the Waite Park Pavilion, with a presentation by Marty Moran, Clear Path. OCTOBER 16: Hosted by Bremer Bank at Waite Park City Hall, 19 13th Ave. N, with a presentation by Steve Joul, Central Minnesota Community Foundation, on “Social Capital.”

SEPT. 4 & OCT 2 Educational networking events that give busy professionals a chance to stay on the cutting edge. Meets the first Wednesday of the month, noon-1 p.m. at the Chamber office, 110 6th Ave. S. Registration is required: $15 for Chamber members, $22 for the general public.

SEPT. 18 & OCT. 16

SEPTEMBER 12: Hosted by the Waite Park Chamber at St. Cloud Overhead Door, 2150 Frontage Rd. S, Waite Park SEPTEMBER 26: Hosted by Rengel Printing Company, 1922 7th St. N, St. Cloud OCTOBER 24: Hosted by College of St. Scholastica, Resource Training and Solutions, and Strack Companies, 137 23rd St. S, Sartell

SEPT. 13 & OCT. 11

Government Affairs A discussion of local government issues on the second Friday of the month, 7:30 - 9 a.m. at the Chamber office, 110 6th Ave. S.

SEPT. 26

Sauk Rapids Chamber For businesses interested in Sauk Rapids issues. Lunch is provided by the host when you register at least two days in advance. 11:30 a.m. - 1 p.m. SEPTEMBER 26: Hosted by WACOSA at Good Shepherd Fellowship Hall, 325 11th St. N, Sauk Rapids, with a presentation by Michelle Super, Super Consulting Services, on “Preventing Workplace Violence.” OCTOBER 24: Hosted by Nahan Printing with a presentation by Denny Smith, Dennis Smith Training & Development. Location to be determined.

SEPTEMBER 13 OCTOBER 11

For information on these or other business events, call 320-251-2940.

POINT OF VIEW

Business Central asked readers:

“

What advice would you give to someone in a leadership position for the first time?

“

Lean on other leaders. Don’t try to do it all yourself.”

with customized, smart marketing.

Traditional Marketing TRIES TO MAKE YOU a Rockstar.

OUR MARKETING SHOWS THE world you ALREADY ARE one.

Jackie Scholl Johnson Big Brothers Big Sisters of Central Minnesota

“

Don’t let the fear of failure keep you from taking chances.”

GaslightCreative.com ( 320) 257-2242

Becky Reynolds Girl Scouts of MN & WI Lakes & Pines

“

Listen more than you speak.”

Roy Dodds Flying Pig Pizza Co.

“

Keep your ego in check. There is so much more to learn.”

Wendi Clark Express Employment Professionals

“

Be yourself. Don’t try to mimic the person before you.”

Scott Anderson Statewide Property Inspections

Your LOCALLY owned Real Estate/Property Management Firm

would like to welcome Mike Bobick and Steve Feneis as Principals/Owners of

Jim Pflepsen

Leon Heinen

Mike Bobick

Steve Feneis

Granite City Real Estate!

Commercial/Residential Brokerage • Property Management

320-253-0003

www.GraniteCityRealEstate.com

S E P T E M B E R / O C T O B E R 2 0 1 3 • • w w w. B u s i n e s s C e n t r a l M a g a z i n e . c o m

UPFRONT

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NETWORK

THE TROUBLE WITH BUSINESS

Getting Paid

Without cash flow your business will not survive. Here are some tips to help you collect what you are owed.

CHECKLIST

Sufficient Funds

The following may indicate that your client does not have sufficient funds or does not intend to pay you. l If your client continuously

claims an invoice has been lost or questions the details of a delayed payment. l If you don’t receive a payment

after you send a second invoice or make a collection call. l If your client only pays smaller

invoices, but ignores larger invoice amounts.

By Whitney Bina

t is no secret businesses make money by providing services to their clients, but far too often companies are not paid what they’re owed. How can your company differentiate between the clients who will pay you and the clients you may never see a dime from? Here are some ideas to help ensure your clients pay you what you’re owed.

Monitor your accounts receivable “The most important thing you can do is have someone specifically assigned to monitor your accounts receivable,” John

Greer, an attorney with Hughes Mathews, P.A., said. This person should send timely invoices, follow up with payment reminders, and stay on top of delinquent dues so your business doesn’t end up with a large accounts receivable balance.

Communicate with your clients Inform your clients about your company’s policies right away. Providing payment information and expectations upfront saves your business time and money. At High Impact Training, a provider of training and development services, signed contracts are used to ensure payment. “In our contract, we state that

About the writer Whitney Bina is the communications and workforce development coordinator at the St. Cloud Area Chamber of Commerce.

Business Central Magazine •• SEPTEMBER/OCTOBER 2013

payment needs to be handed directly to our consultants as soon as their presentation is over,” Amanda Henry said. “If our clients forget to bring a payment, we follow up with them right away.” “We don’t bill our clients until they have something tangible in their hands,” Rachael Sogge, Eyecon Graphics, said. “Instead, we sit down with our clients before starting a project and, based on their established budget, determine the services we will provide and create a payment plan.”

Document, document, document Keep track of everything! “If you end up taking your client to court, you can lose all or part of a claim if you don’t have clear records,” Hughes Mathews’ Greer said. In addition to invoice copies,

“My favorite warning sign is when potential clients tell me that our competition can provide the same service for a smaller amount.” —RACHAEL SOGGE, EYECON GRAPHICS keep copies of emails sent and received, copies of payments received, and notes about phone conversations.

Watch for warning signs “When our clients take a lot of time to sign our contract for service, it is a yellow flag and we know we may have to do more follow up with them to collect payment,” Henry said.

“My favorite warning sign is when potential clients tell me that our competition can provide the same service for a smaller amount,” Sogge said. “We know the industry and can tell when potential clients are just trying to get a better deal from us.”

Seek help from a lawyer An attorney can help you be proactive

about getting paid. “Lawyers are most efficient on the front end,” Greer said. An attorney can help you keep your invoices clear and detailed, draft reminder letters that vary in tone and emphasis depending on how late the payment is, and advise you in conciliation court. Meeting annually with an attorney regarding your company’s payment process and procedures helps your business save money in the long run, he said. Without cash flow, your business will not survive. Watch for red flags that might keep you from getting paid and keep an eye on your accounts receivable. You deserve to get paid for the services you provide. BC

S E P T E M B E R / O C T O B E R 2 0 1 3 • • w w w. B u s i n e s s C e n t r a l M a g a z i n e . c o m

UPFRONT

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NETWORK CENTRAL

Network!

Stearns Bank was the host for the Chamber’s Business After Hours in June.

Fred Sylvester, Wells Fargo Bank (L) and Greg Simones, Minnwest Bank

Heather Plumski, Stearns Bank (L); Dean Fladmo, Vacuum Center & Sewing Room; Robin Studniski, Stearns Bank; Troy Felton and Greg Wojtowicz, Edina Realty

Owen Peterson (L) and Brian Jarl, Stearns Insurance Services

Steve Reetz, Thrivent Financial (L); Lisa Braun, City of St. Cloud; and Norm Skalicky, Stearns Bank

Jodi Speicher, The Good Shepherd Community (L); Jenifer Odette, Brandl Motors; Addie Turkowski, St. Cloud State University; Roxanne Ryan, WACOSA; Wendi Clark, Express Employment Professionals

Business Central Magazine •• SEPTEMBER/OCTOBER 2013

Tim Hoheisel, Stearns History Museum (L) and Scott Schmitt, Coldwell Banker Commercial-Orion

NETWORK CENTRAL

Network! The day was hot, but the event was hotter when DJ Bitzan Jewelers hosted Business After Hours in July. Photos courtesy of DJ Bitzan Jewelers

Eric Heipel, Fresh Coat Painters

Mike Nies, Nies Electric (L); Colette Carlson, CliftonLarsonAllen; and Cheryl Nies, Nies Electric

Rachael Bonn, Peters Body Shop (L) and Joyce Linn, Primerica - Sauk Rapids

Rob Lindholm, ePromos Promotional Products

Dick Bitzan, DJ Bitzan Jewelers (L) and Steve Joul, Central Minnesota Community Foundation

Sheri Moran, Gabriel Media

Kristin Darnall, United Way of Central Minnesota (L) and Lisa Mauer, Bremer

Ryan Davidson, Central Minnesota Credit Union (L); Aaron Reznechek, Wells Fargo; Jeremy Goltz, Stearns Bank; Jeremy Forsell, Premier Real Estate Services

Jim McAlister, Tell-A-Vision Productions with Jane Vogel

S E P T E M B E R / O C T O B E R 2 0 1 3 • • w w w. B u s i n e s s C e n t r a l M a g a z i n e . c o m

24 Entrepreneurism

Tech Strategies

27 Tech News

Management Toolkit

Going Green

Economy Central presented by Falcon Bank

BUSINESS TOOLS

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NETWORK

PROFIT

RESOURCES THAT HELP YOUR BUSINESS GROW

ENTREPRENEURISM

Customers for Life

STAY FOCUSED By Mary MacDonell Belisle

You’ve pursued them and wooed them. Now the challenge is not to lose them. Here are eight suggestions for turning one-time customers into customers-for-life.

ustomers. You’ve got to love them or lose them, so you might as well try loving them. Here are some ideas to help you keep those hard-won customers. 1 Keep focused on the person, not the sale. “Focus on the right direction–on the customer,” That’s the message from Brian Hart, owner/trainer with Sandler Training, St. Cloud. Customers are people with feelings, emotions, and needs. They want someone to meet those needs and ease their pain. That’s where businesses can be miles ahead of the competition.

“We business owners have too much faith people will tell us what’s wrong. The presumption is that we should know,” Hart said. He recommends businesses and sales people create some sort of personal communication touch and put it on a schedule. “Fuzzy Files” help businesses remember birthdays, anniversaries, hobbies, and even kids’ names. Send items of interest from newspapers, magazines, or the Internet. Make regular calls to your top customers simply to ask, “How are you doing?” “Watching your customer, not your bottom line,” is critical according to Jeff Wuorio, MBA and featured writer for Microsoft Small Business Center and MSN Money. “Of course, profits are crucial. But long-term solvency derives from customers who are also there for the long haul. And that stems from a business that listens in any number of ways.” 2 Keep in touch. Hart cautions businesses to watch out for the “never/never” customer. These are customers who never complain and never come back.

Business Central Magazine •• SEPTEMBER/OCTOBER 2013

3“Partner” with your businessto-business customer. “Joint success is what leads to longterm partnerships,” according to Brian Roelofs, director of sales and service for GNP Company. GNP doesn’t sell products, Roelofs said. Instead, it helps partners drive their businesses by sharing shopper and consumer insights and building joint business plans around their partners’ consumers, not GNP’s customers.

Story continues on next page.

MAKE YOURSELF THE “GO-TO” PERSON FOR HELP “The way I want people to think about this is that there’s a person in pain, upset, emotional, confused … you need to care about taking care of them,” Mike Schlough said. Schlough is president of Park Industries, the largest manufacturer of stone fabrication systems in North America. He speaks about an “OK chair” and “not OK chair,” and how, during an interaction, the person getting up from the OK chair should always be your customer. Thus, in any conversation, the customer must perceive a company’s representative–in whatever capacity–as a trusted advisor, working honestly to help solve his/her problem.

Online now For the sources used in this story, visit www. BusinessCentralMagazine.com.

Fast & Flexible 4 Actively look for problems. After the sale and installation of new fabricating equipment, the Park Industries’ B2B customer is asked to complete a satisfaction survey and another survey after the client has used the equipment for a time. Clients are also asked for an honest appraisal of the salesperson’s performance. Businesses constantly need to encourage critical feedback.

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5 Maintain a “Goof Kit.” Author and speaker Arnold Sanow, MBA, suggests businesses develop a “Goof Kit.” It’s not enough simply to say, “Sorry.” He gives an example: Sanow’s flight left 20 minutes late. A week later, he received a letter of apology from the company president and 8,000 frequent flier miles were added to his account. 6 Avoid rigidity; give employees autonomy to act. Park Industries’ annual training outlines “The Park Way” of handling customers, whether advocates, apathetic customers, or assassins. “Every interaction is an opportunity to improve or erode the relationship with all customers,” Schlough said. 7 Remember that people leave because of poor service. Google® “customers for life.” Various resources suggest 68 to 73 percent of customers leave their vendor because of the perception of poor service, not quality or price or change in functionality. BC Mary MacDonell Belisle is a freelance copy and content writer with WordingForYou.com. She specializes in business articles and profiles, web content, and book editing.

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BUSINESS TOOLS

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G R OW

TECH STRATEGIES

Crisis

Though rare, when they occur social media crises can escalate quickly. The best plan is to have a plan. By Dawn Zimmerman

Having a supporter stand up for your organization goes a long way toward calming a potential storm. people are aware of the plan and how they will be notified if an issue arises.

lthough they make headlines, in my experience social media crises are rare. Sure, there may be a negative comment posted. But in most cases, they make the person posting look bad – not the company. A social media crisis is commonly defined as an issue that arises in or is amplified by social media, and results in negative mainstream media coverage, a change in business process, or financial loss. While the number of social media crises have increased over the past decade, it has been at a much slower pace than the growth in social media activity and engagement overall. More activity naturally

means the increased potential for a crisis. The challenge is that you never know when a crisis may strike, but how you react will make all the difference – on and off social media – so it’s best to be prepared. HAVE A CLEAR PLAN Every business, no matter its size, should anticipate the potential crises, based on its size, location, products and services and philosophies. Ask yourself: What are the worst case scenarios? Make a list and then identify the steps that would be taken and by whom. You can even create some sample posts of what you would say if a specific crisis happens. It’s important that key

WAIT (FOR A MOMENT) AND WATCH If your organization has built a (loyal) following, your “fans” likely will rise up and defend your organization from backhanded posts by those who they perceive as an “outsider” or “Negative Nelly.” Having a supporter stand up for your organization goes a long way toward calming a potential storm. STOP ALL AUTOMATIC POSTS It’s becoming more common for organizations to schedule posts and use social media management systems to post regular content. It’s best to use these on a limited basis. In times of crisis, automatic or scheduled posts need to be paused. They could appear at just the wrong time and seem out of place.

About the writer Dawn Zimmerman is CEO of The Write Advantage, a St. Cloud-based communications company that specializes in helping organizations shape and share their stories.

Business Central Magazine •• SEPTEMBER/OCTOBER 2013

RESPOND PROMPTLY TO EVERYONE Being prompt in a response is essential, even if a follower has already said something on your behalf. Every comment and question on a social media account for an organization deserves acknowledgement. When a negative comment arises, respond briefly – then call the meeting and follow up with additional posts as appropriate. TAKE THE HIGH ROAD It’s easy to get sucked into negativity or defensive behaviors. Crises demand us to step back and step up. They are opportunities to show your organization’s character. Focus on your messages of reassurance, building confidence and communicating your company’s core. Social media may feel more out of an organization’s control and crises have proven to escalate quickly due to the social and viral nature of social media. But having a solid crisis communication plan is essential for all organizations – actively involved or simple spectators of social media. Crises for an organization are not limited to social media. BC

TECH NEWS

Stopping Traffic

THE FUTURE IS HERE

Fluency in every language. Climate-controlled jackets to protect soldiers from extreme heat and cold. Nanoparticles that make chemotherapy far more effective. Electric cars that can roam the highways. These are just a few of the predictions the editors of Popular Mechanics believe will occur by 2022…and in some cases they’re well underway. See the whole list at www.BusinessCentral Magazine.com.

DID YOU KNOW?

16%

the increase in profit margin for grocery stores that reduce their energy cost by 10 percent

Source: PopularMechanics.com

If you have a smartphone, you probably have an app that helps you avoid traffic congestion. But what about an app that prevents traffic jams? Enter nunav, an innovative navigation system that uses an algorithm to figure out where and when traffic jams are likely to occur. Then, it provides a route to steer cars away from those roads. It’s optimized for traffic, time, and the amount of gas used based on data about where other drivers are headed at the same time. In a computer simulation of 50,000 cars, nunav users show up at their destinations twice as fast as non-users. And they only burn up one fifth of the fuel, significantly reducing CO2 emissions from cars. Source: Graphmasters

Continuing to Make a Difference!

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S E P T E M B E R / O C T O B E R 2 0 1 3 • • w w w. B u s i n e s s C e n t r a l M a g a z i n e . c o m

BUSINESS TOOLS

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G R OW

MANAGEMENT TOOLKIT

Protecting What You’ve Built

BY THE NUMBERS

If something happened to you or a key employee, how would your business continue to operate? By Joshua Longnecker, Northwestern Mutual

for your business, formalize a written buy-sell agreement, and maintain proper levels of life and disability insurance to fund the agreement. With so much of your worth tied up in your company, it’s also important to have a plan that takes into account your personal financial security needs. These might include funding college, saving for retirement, and estate planning so that your family is taken care of no matter what.

f the estimated 27.9 million businesses in the U.S. today, the vast majority – more than 99 percent – are small businesses with fewer than 500 employees, according to the SBA Office of Advocacy. These engines of U.S. economic growth face many challenges, including keeping their operations secure and growing even in the face of everchanging pressures. PROTECTING WHAT YOU’VE BUILT Overhead expense coverage can provide the benefits you need to meet rent, payroll, utilities, taxes and other business expenses in the event

you become disabled. Key person insurance can provide working capital for your business should a key employee become disabled or die. Property and casualty insurance can pay benefits to repair or replace buildings, equipment and data damaged or destroyed in a natural disaster, while liability insurance can provide resources to satisfy personal injury or property claims. PASSING THE TORCH At some point, you’ll leave your business. The creation of a thoughtfully prepared and properly funded business continuation plan can help you set clearly defined goals, establish a fair market value

About the writer

THE VALUE OF A TRUSTED PROFESSIONAL The key to an effective business protection strategy is to work with a financial representative who understands what it takes to run a successful business and has access to specialists with expertise in risk management and business succession planning. This team approach can provide you with a thorough understanding of where you are today and a strategy to help take you where you want to be in the future. BC This article was prepared by Northwestern Mutual with the cooperation of Joshua Longnecker. Northwestern Mutual is the marketing name for The Northwestern Mutual Life Insurance Company, Milwaukee, WI and its subsidiaries. Joshua Longnecker is an insurance agent of Northwestern Mutual. Not all products mentioned in this article are offered through Northwestern Mutual.

Joshua Longnecker is a managing director with Northwestern Mutual, based in St. Cloud, MN. He can be reached at 320.223.6639, or Joshua.longnecker@nmfn.com.

Business Central Magazine •• SEPTEMBER/OCTOBER 2013

CYBERCRIME From the 2012 Internet Crime Complaint Center (IC3) report come the following – discouraging – statistics…

300,000

The number of Americans who reported cybercrimes

115,000

The number of people who reported losing money to an online scam

$500m

The annual amount of money estimated to be lost to Internet crime

8.3%

The increase in cybercrime from 2011 to 2012

$4,573

The average dollar amount per victim lost to cybercrimes Source: Tech News Daily

TECH NEWS

NOT-SO-SMART PHONE SpareOne is a straightforward, no-frills phone that allows you to make and receive calls from this simple, lightweight device. So what’s the draw? It runs on a single AA battery that can last up to 15 years or through 10 hours of talk time. Release from the umbilical charger, but forget checking your email. Source: SpareOne

VIRTUALLY SPEAKING

The Emperor has no clothes!

It won’t be long before customers will be able to try on clothes and products at home with no shipping required. Technology will allow shoppers to virtually wear garments – smelling, hearing and feeling the fabric as if it were real. This new world will be brought to you by augmented reality technology which typically overlays the virtual world on top of the real-world environment though a device, such as a mobile phone or table. Source: Mashable

HARNESSING TECHNOLOGY. UNLEASHING

YOUR POTENTIAL.

Call today for all your IT n e e d s : • Web Site Design and Development • Content Management Systems (CMS) • Search Engine Optimization (SEO) • E-commerce

• Custom Applications Development • Dashboards and Reporting • Project Management • Network Design and Support

Contact Jaime Engel 320.257.7100 www.jdb.com

Featured Project The right recipe for your food business.

1-320-253-9493 www.minnesotafoodphotographer.com •

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BUSINESS TOOLS

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G R OW

GOING GREEN

Paint Your Parking Lot

Light-colored, heat-reflecting asphalt and paint makes a parking lot 40 degrees Fahrenheit cooler on a hot day.

he Lawrence Berkeley National Laboratory in Northern California has painted one of its parking lots with several commercially available heat-reflecting coatings to show what a difference they can make and to test how they’ll fare over time. In general, heatreflecting surfaces keep cities more comfortable, reduce residents’ electricity use for air conditioning, and reduce

the amount of heat that cities reflect back into the atmosphere, contributing to global warming. They can even improve air quality. White-painted roofs usually get the most attention, but paler pavements could make a big difference, too, researchers say. Pavement accounts for 35 to 50 percent of the surfaces in a city, according to the Berkeley Lab. BC Source: TechNewsDaily

tax Planning & Preparation | Accounting | Auditing | Business Consulting

Cold calls shouldn’t make you sweat. Sandler Training® utilizes continual reinforcement through ongoing training and individual coaching sessions not only to help you learn but also to ensure your success. With over 200 training centers worldwide to provide support, you won’t fail…because we won’t let you.

Brian Hart 110 Sixth Avenue South, Suite 100 St. Cloud, MN • 320-224-2121 www.brianhart.sandler.com S Sandler Training Finding Power In Reinforcement (with design) and Sandler Training are registered service marks of Sandler Systems, Inc. © 2013 Sandler Systems, Inc. All rights reserved.

Business Central Magazine •• SEPTEMBER/OCTOBER 2013

Mike Zager CPA Partner

{

Michael Johnson CPA, CVA, ABV Partner

Matt Steidl Certified finAnCiAl PlAnner® Professional Accountant

Top 25 CPA Firm in Minnesota

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Our team includes over 60 experienced staff, including 28 Certified Public Accountants, ranking us as one of the top 25 CPA firms in Minnesota.

GOING GREEN

SAVE ENERGY, SAVE MONEY The U.S. Energy Department awarded $10 million in July

private sector funding. These small commercial buildings

to help small commercial buildings save money by saving

are less than 50,000 square feet in size and include schools,

energy. The award is part of the Climate Action Plan,

churches, strip malls, restaurants, and grocery stores. The

which calls for steady, responsible steps to reduce carbon

six projects are aimed at developing user-friendly tools and

pollution and energy bills for U.S. businesses.

resources that can be easily deployed at any small building.

Source: U.S. Department of Energy

The Energy Department’s $10 million investment across

No projects in Minnesota received funding. The closest

six projects will be matched by at least $14 million in

one is in Wisconsin.

BY THE NUMBERS

90%

Small buildings have tremendous potential to save energy.

45%

The potential decrease in energy use by small fast food restaurants

The size of the commercial building sector that is made up of small buildings

20%

The amount of all U.S. energy consumed by the commercial building sector

You grow the corn, We’ll count the b3ans. Little Falls 320.632.6311

Albany 320.845.2940

Working with people, not just numb3rs. An Independently Owned Member, McGladrey Alliance

www.swcocpas.com Maple Lake 320.963.5414

Monticello 763.295.5070

St. Cloud 320.251.0286

S E P T E M B E R / O C T O B E R 2 0 1 3 • • w w w. B u s i n e s s C e n t r a l M a g a z i n e . c o m

ECONOMY CENTRAL

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PRESENTED BY FALCON BANK

Growth Through Diversity

BY THE NUMBERS

Expanding the variety of industries represented in Central Minnesota can lessen economic downturns for the region. By Mary E. Edwards, PhD

nviting new, but sustainable, industries to an area requires that the area provide sufficient population for a firm to at least break even. A “back-of-the-envelope” attempt at analysis would be to divide the population of an area by the number of establishments in the industry and compare that number to the same calculation using establishment and population data for the state. This calculation includes a number of assumptions: (1) the industry in the state is in equilibrium, i.e., there is little unmet demand and few firms are just barely surviving; (2) the majority of the firms within the industry statewide are at the minimum threshold size, i.e., their rates of return are equivalent to others in that and similar industries—not bad enough to go out of business, but also not high enough to attract more firms; (3) residents of Minnesota purchase only from Minnesota firms, and residents from the St. Cloud MSA will buy only from Stearns and Benton County firms. The latter assumption suggests homogeneity with respect to types of establishment and efficiencies of service provision. In reality, each firm is listed with just one NAICS code even though it may service multiple industries.

These assumptions are what limit this analysis to a “back-of-the-envelope” assessment. A glance at the two-digit NAICS industries suggests that St. Cloud’s threshold sizes are close to those of the state except for firms that manage companies and enterprises, which enjoy nearly twice the population per firm as do firms in that industry statewide. However, opportunities appear in the less aggregated industries. Twenty-nine St. Cloud industries have only one firm enjoying a potential customer base between two and eight times firms in their industry statewide experience. In all, 74 NAICS industries service at least double the population per firm as their counterparts in other parts of the state. These include many wholesale industries, home centers, office supply stores, support activities for air transport, and design services and consulting agencies. However, 36 industries are attempting survival by serving less than half the market as their statewide counterparts. Finally, some industries that this threshold size analysis says are sustainable, are absent from St. Cloud’s economy. These include both scheduled and nonscheduled air transportation as well as various other wholesalers, marketing research firms, executive search services, convention organizers, ambulatory health care services, exam preparation, and tutoring. St. Cloud can develop its economy by diversifying industries and this growth is possible without government subsidies. While these lists do not guarantee a strong market for highlighted industries, they do give a first assessment of potential markets. Diversity supports not only additional solid growth but it can prevent regional economies from falling as fast during economic downturns BC Mary E. Edwards is Professor Emeritus, Economics Department, St. Cloud State University. Establishment data are from the 2011 County Business Patterns, and the 2011 population data are from the Bureau of Economic Analysis.

Business Central Magazine •• SEPTEMBER/OCTOBER 2013

RECOVERY Good News on Minnesota’s Job Front

5.2%

Minnesota’s seasonally adjusted unemployment rate in June

2,500

The number of private-sector jobs added in June

10,300

The number of jobs added in Minnesota in May

2.2%

The increase in number of jobs in Central Minnesota in the last 12 months

0.8%

The increase in number of jobs in the Mankato area in the last 12 months Source: Minnesota Department of Employment and Economic Development (DEED).

Now online

To view this story with the supporting data and tables, visit www.BusinessCentral Magazine.com

Economy Central presented by

$16,000

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RESIDENTIAL BUILDING RESIDENTIAL PERMITS BUILDING PERMITS

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$2M

$2,301,210

$2,071,350 $2,284,500

$1.5M

$2,489,399

$1.5M

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COMMERCIAL BUILDING PERMITS, CONSOLIDATED COMMERCIAL BUILDING PERMITS, CONSOLIDA COMMERCIAL BUILDING PERMITS,RESIDENTIAL CONSOLIDATED COMMERCIAL BUILDING PERMITS, RESIDENTIAL CONSOLIDATED COMMERCIAL BUILDING PERMITS, CONSOLIDATED RESIDENTIAL RESIDENTIAL BUILDING PERMITS RESIDENTIAL RESIDENTIA RESIDENTIAL BUILDING PERMITS BUILDING PERMITS BUILDING PERMITS BUILDING PERMITS BUILDING PERMITS RESIDENTIAL BUILDING PERMIT $778,000

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RESIDENTIAL BUILDING PERMITS BUILDING PERMITS RESIDENTIAL

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$1.5M

Sauk Rapids Sartell St. Augusta Waite Park

$.5M

$30,0

$0 J S FO MN AJD M

$0 SF O MJ N AJ D MA

5No. 120permits 73 1 of 1821

$1M F M

$10,496

$1.5M

$10,496

$1.5M

$2M

$6,178,910

$17,096,137

$3M

$.5M

$6,178,910

$1M F M

$12,449,306

$2,301,210

$.5M

$1M

$4M

$2,071,350 $2,284,500

$2,489,399

$1.5M

$2,622,544

$2,434,500

$1.5M

$5M $1M

$2M

$1M

$5,412,980

$5M $1M

$2M

3 No. 88 of 1 62 11 141 permits 12 12 35 11

$1.5M

St. Joe Waite Park Sauk Rapids

St. Augu

BUILDING PERMITS BUILDING PERMITS BUILDING PERMITS RESIDENTIAL BUILDING PERMITS BUILDING PERMITS RESIDENTIAL BUILDING PERMITS TS,RESIDENTIAL CONSOLIDATED COMMERCIAL BUILDING COMMERCIAL PERMITS, RESIDENTIAL CONSOLIDATED BUILDING PERMITS, CONSOLIDATED COMMERCIAL BUILDING COMMERCIAL PERMITS, BUILDING CONSOLIDATED PERMITS, CONSOLIDATED COMMERCIAL BUILDING COMMERCIAL PERMITS, CONSOLIDATED BUILDING PERMITS, CONSOLID RESIDENTIAL BUILDING PERMITS RESIDENTIAL RESIDENTIAL RESIDENTIAL

$1000000 $0 FO MN AJD MJJ

12 11 3 No. 141 88 of permits 112 35 11 62

733

72 260 11

$2M N O

S A

M $0

No. of permits 1

$2M $0 O

0 J N

O M

N A

No. 3 of 3permits 3 10 4

120

$1.5M

$1M

$2,135,900

$12,457,379

$3M

$1000000 $0 JA JJ AF SJM O

O J

AJJ

FA M

873

2 11 12

M $0

No. of permits 1

$0 O

3 of 3permits 3 410 4 No.

M A $0 N D

No. of permits 8

No. permits 12 of12 7 14

$800k

$0 N

120

$72,162

$200k $90k $10,404

150

No. of 161 No. 12 12 74 8No. 4 18 4 12857 7445 4No. 332120 1 of7$120k permits 337 224 61 12 52.0 17 12 1 12 167 1261 7 permits 8 5712 4 45 11 3 3211 33 of 16of permits 9 22permits

180

1.7% 011

$.5M

$500000

J -0.6J

D J

J A

F S

M O

A N

M D

0 12

11 3

-1.0

M A $0 N D

No. of permits 8

12 of12 7 No. permits 14

7 4

7 3

J F S60 O

J J F J MA A S MO J N $0 $60k J J

J F -0.8 141 8 1

AO 0.5 MN 83

0.0

-0.4

SJ -0.6 OJ M

J -0.8 11 141

$72,162

$.5M

$200k

DS JO FN $0 $150k

J $30k A

2nd Quarter

3rd Quarter

44 31 $800k

$1M SJ OJ M

141

No. of permits 1

$100k

-1.0 J F 4th quarter

0 of permits 1 1 80 No.

M A M 1st Quarter

J $30k A

$120k

3.5

$200k 3.0$90k

$200k 40

F M A M J FN MD AJ $0 $0 J J A S O N JD

No. of permits 1

No. 0 of permits 1 1 80 1

COMMERCIAL BUILDING PERMIT COMMERCIA $1M

$150k

30 No. of permits 3

180

M S

A O

M N

160

0 12

$600k

1.5$30k

$0 J J A S O AN 10 M DJ J F M A 0.5 M J

0.0

N/A

$72,16

$200k

1.0

XXXX $250k

$200k

$53,545

2.5%

$600k

$350k

2.0%

1.7%

$0 AF

COUNTRY WIDE

AF SM OA NM DJ J F M $300k $400k $400k 2.0 4 No.6 11 7 3 4 3 1 4 1 610 116 719 41 1 of permits 1 10

$100k

$800k

ST. CLOUD

10%

$0 S $60k O N

$800k

3.1% Food & Be Unemployment Rates

2.5

20 $50k

$800k

$200k

M A M J $0 S $60k O N JD JJ

Sheriff ’s Foreclosure Gross Domestic Auctions Product

$250k

ST. CLOUD

arm Jobs

Unemployment Rates Unemployment Non Farm JobsRates $50k

$1M

2.5%

$250k

1.0

$300k 2012/13$400k QUARTERLY % CHANGE IN REAL GDP STEARNS $400k COUNTY

$1.5M

XXXX

Lodging Dollars & Beverage Tax Tax Collections

$425,000 $150k $350k 0.4 $1M $0 AM SA60 OM N J JD JJ AF SM OA NM DJ J F M A $300k 0.2 $400k 111 No. 0 5of permits 117 1 1 1 0 0 0 1 0 0 0 10 10 02 0$120k 0 0 0 0.0

$30k 1.5

N M

$800k

3.1% Food

2.0%

J F

Gross Domestic Product Sheriff ’s Foreclosure Auctions

$2M

0.8 $72,162 $200k $2,500 $10,404ST.$1,200 CLOUD$2,500 90 0.6 $600k

$1,200

2.5

$1000000 $0 $0 $60k OF N M D J JJ M J D A J MJ A JF S M O A N

1.0

$.5M $2,500

$1,200

Lodging Dollars Food & Beverage Tax Tax Collections St. Joe St. Augu ST. CLOUD ST. CLOUD

UNITED STATES - MONTHLY % CHANGE 2012/13$400k QUARTERLY % CHANGE $400k IN REAL GDP 3.5

$425,000

$72,162 $200k

$600k COMMERCIAL PERMITS, BUILDING CONSOLIDATED $600k COMMERCIAL PERMITS, CONSOLIDATED $425,000BUILDING $350k $150k

150

Food & Beverage Collections ax Dollars Food Tax & Beverage Tax Collections St. Augusta Unemployment St. Joe CLOUD ST. CLOUD St. Augusta ST.Rates St. Joe 2012-2013 30

$0 $1MA

J J F J MA A S MO J N $0 J J

$1M

$53,545

ST. CLOUD

$0$1M AF SMJ OA J NM A DJ S J

$10,496

-0.4 0

N J

$53,545

$150k

Employment

2 -0.2 -0.2 Building departments $53,545Sartell, Waite Park, St. Augusta,$200k Sources: for the following cities: St. Cloud, Sauk Rapids, and St. Joseph. $24,200 $2,500 90 $90k $1,200 $90k

J 60

ST. CLOUD

$1500000 $.5M

XXXX

= exceeds $1M $24,200 chart scale

$1.5M $.5M

0.4 $0 M JS AO M N 60 JD J JF 0.2 permits 08 1 165 of 9 141 12 No. 2 3 82 0.0

$500000

Sales Closed3.0- Total Lodging TaxHome Dollars

$.5M 8

$0 N DJ F M 10 $2M 0 3 3 21 8141 4permits 3 1 837 12411 No. 1 of12 0permits 35 12 21 120 AM D SJ N

3 141 8 11 $800k

$120k

1.0

$.5M 0.8 90$30,060 0.6

$30,060 BENTON COUNTY $0 $0

150

Gross Domestic United ProductStates Nonfarm Jobs

$2000000 $1M $634,892

$2,224,021

120

CLOUD $0

N $1M D

O A

$150k

$1M$2M $634,892

$1M

Sheriff ’s Foreclosure Auctions ome Sales Closed - Total $24,200

S M

$600k COMMERCIAL BUILDING PERMITS, CONSOLIDATED $425,000 $600k COMMERCIAL BUILDING PERMITS, CONSOLIDATED

United States Nonfarm Jobs UNITED STATES - MONTHLY10% CHANGE

$4M

A F

$600k

St. Joe

$2,224,021 $3,397,262

$1.5M

150

$.5M

$343,111.15

$1.5M

$5M $1M

$1500000 $.5M

$1M J J D M

$0 COMMERCIAL BUILDING PERMITS,BUILDING CONSOLIDATED COMMERCIAL PERMITS, CONSOLIDA

Home Sales Closed Sheriff - Total ’s Foreclosure Auctions Lodging TaxHome Dollars Sales Closed - Total Waite Park Sauk Rapids ST. CLOUD St. Augusta Waite Park ST. CLOUD BENTON COUNTY ST. CLOUD

COMMERCIAL BUILDING PERMITS, CONSOLIDATED COMMERCIAL BUILDING PERMITS, CONSOLIDATED $2000000 $1M

J$2MF

$1.5M $.5M $53,545 $24,200

$30k

St. Joe

$3,397,262

645 343 716

$800k

$0 JM AA S60 M OJ N D

$53,545 $24,200

$3,397,262

348

J F

$2,135,900

40 1

$2,135,900

$1.5M

$2,475,200

No. 7 of8permits 7 326 21 8

$2,475,200

$6,178,910

e Auctions Sauk Rapids Sartell $1.5M

AO MN JD

$2,224,021 $2,475,200

FA MS

$2,135,900

$6,178,910

of permits 10

$0 N DJ

$2,224,021

$2M

$2M J

$0 J

M$60k N DJ

A O

TS, CONSOLIDATED COMMERCIAL BUILDING PERMITS, CONSOLIDATED COMMERCIAL BUILDING PERMITS,BUILDING CONSOLIDATED ESIDENTIAL BUILDING PERMITS RESIDENTIAL BUILDING PERMITS BUILDING PERMITS AL BUILDING PERMITS, CONSOLIDATED COMMERCIAL BUILDING PERMITS, CONSOLIDATED COMMERCIAL PERMITS, CONSOLIDATED RESIDENTIAL BUILDING PERMITS RESIDENTIAL $2M $0

$1M $0 $0 FA MS J AO J MN AJD S J OF N MJ D AJ $400k of permits 1 No.16 333 22121 12 permits 129 of12 14No. 47 37 43 61 83 57 44 45No. 31 32 78 of0permits 14 9 of permits 19 2 8 4 182 167 No. 7 7

M S

$500000

$.5M

St. Augusta St. Augusta

JAF

$.5M

$500000 90

$2M $1M F M

522 1712 112

$1,777,934

No. 51 of 12 0permits 73 121 8

DA M

45No.32 33 2261 1257 1245 1132 1133 of permits 120

$3,745

$1M $24,200

N AJ

$3,745

St. Joe

$1M $0 S OJ F M

A J

$1,777,934

$10,496

$1M

$10,496

Waite Park Waite Park St. Joe

St. Augusta St. Augusta apids

J D

$1M $1M $634,892 J A FS MO AN MD

$90k $6,375 $7,500

COMMERCIA COMMERCIAL BUILDING PERMIT

$.5M

$30,060

$1000000 $0 $0 $0 $0 $0 $0 $0 $0 J J A S O N D J F A M J J F JM AA SM O J N D J J J F A MS AJO MJN JAD SJ OF NM DA MN JD F M A M J J MS AO 60 J J JM J FA J F JM AA SM O J N J J A S M O N D $2M $2M $2M 4 No. permits permits 43 34 122 16 118 7 127 3 105 4 12 16 935 145 239 43 428 236 734No. 916of permits 77 permits 23 of 30 35 45 40 59 39 No. 28 of36 757 of8permits 326 No. 21 8 of 40 1 348 11 645 7343 11 716 26 23 of14 30 40 59 3 16of 3permits 4 permits No. permits 97No. 37of 150 12 1941013 5 18 12 4 No. 65 7 3 1 4 4 12 No. 150 319 10

$1000000 $0 O NJ

$1.5M

$10,404

$1,777,934

CONSOLIDATED 150

$1.5M

$343,111.15

$6,375 $7,500

$1500000 $.5M

$1.5M $.5M

8 $1M $24,200

$16,000

$500000

$6,178,910

$1500000 $.5M

$2,475,200

$2,224,021

$500000

$.5M

$3M

$2,475,200

$1.5M $.5M

$1.5M

$2,135,900

$1.5M

$10,496

$2,135,900

$1M

$2,224,021

$4M $1,222,710 $.5M

$1500000 $.5M

$12,457,379

$4M $1500000 $.5M

$10,496

$1M

$17,172,684

$5,412,980

$3M

$6,476,471

$16,000

$6,362,170

$3M

$.5M

$17,096,137

$.5M

$12,449,306

$4M

$12,457,379

$4M

$16,000

$2M

Sheriff ’s Foreclosure Auctions Sales Closed - Total Home Sales Closed - Total Lodging TaxHome Dollars BENTON COUNTY ST. CLOUD ST. CLOUD Waite Park Sauk Rapids ST. CLOUD St. Augusta Waite P

$30,060 $30,060 $0 $0 $6,375 $6,375 $7,500 COMMERCIAL BUILDING PERMITS, CONSOLIDATED$3M COMMERCIAL BUILDING PERMITS, CONSOLIDATED$3M 12 COMMERCIAL BUILDING PERMITS, COMMERCIAL BUILDING PERMITS, CONSOLIDATED COMMERCIAL BUILDING PERMITS, CONSOLIDATED COMMERCIAL BUILDING PERMITS, CONSOLIDATED $7,500 $3M 150 $150k 12 $778,000 $778,000 $5M $5M $2000000 $5M$1M $2M $2000000 $1M $1M $1M $1000000 $1M $1M $1M $0 $0 $0 $0 $0 J J A S O N JD JJ AF SM OA NM DJ J J J A S O N JD JJ AF SM OA NM DJ J J JJ AF SM OA NM DJ J F M A M J F M A M J F M A M J 10 $2M 10 11 7 No. of permits No. 120 of permits 21 8 12 No.8 of permits No. of permits 61 16 16 150 719 3 11 No. 26of permits 14 $2M 9 111 7 2 114 262 147 99 17 2 12$2M5 212 8 3 122 8 0 121 516 29 3 593 434 3612 34 4 12 16 150 19 4 2 7 9 7 2 0 1 16 9 $120k

$16,000

$2M

$2000000 $1M $634,892

$2,475,200

$1.5M

$2,135,900

$1.5M

$2M $1M $634,892

$2M

$6,178,910

$.5M

$12,457,379

$5,412,980

$6,476,471

Sheriff ’s Foreclosure Auctions Sartell BENTON COUNTY Sauk Rapids

St. Cloud

$2M

$5M $1M

$2000000 $1M

$2M

$6,362,170

$4M

$12,449,306

$12,457,379

$1.5M

$2,284,500

$4M $1,222,710 $.5M

$2,434,500

$5,412,980

$17,172,684

$1.5M

Sartell

$778,000 $2M

$5M $1M

$17,096,137

$5M $1M

$2M

$17,172,684

$778,000

$2M

M D

AM $0

O M

D J $150k S

F M $0 N JD J

No. 6% of permits 3

4 No.6 of permits 11 7 1 4 0

$100k

Minnesota Nonfarm Jobs Minnesota Nonfarm Jobs $50k

N2ndDQuarter J F 3rd M Quarter A M

4th J quarter

1st Quarter

N/A

COUNTRY WIDE MINNESOTA - MONTHLY % CHANGE - MONTHLY % CHANGE COUNTRY WIDE MINNESOTA 2012-2013 % CHANGE COMMERCIAL BUILDING PERMITS, CONSOLIDATED COMMERCIAL BUILDING PERMITS, CONSOLIDATED 2.0 10% 2.0 10% 0 0 $0 $0 0$1M $0 $0 4% $1M J F M A M J F M A M J J F M A J F M A M J M J J AJ J J A S O 10% N $1M D J J F J MA A S MO J N D A M J J A $1M SJ OJ NA DS JO FN MD AJ M J J A S O AN MD JJ JF AM SA OM N D 2.0% 1.5 1.5 $300k NGE 2012/13 QUARTERLY % $300k CHANGE UNITED IN STATES REAL GDP - MONTHLY % CHANGE STEARNS COUNTY2012/13 QUARTERLY % CHANGE IN REAL GDP STEARNS COUNTY MINNESOTA 3.5 3.5 1.5% 1.0 50 50 1.0 $200k 1.0 $800k $800k $800k $800k $250k $250k 3.1% 3.1% 8% 8%1.0% 0.8 0.5 0.5 3.0 3.0 . CLOUD COUNTRY WIDE MINNESOTA - MONTHLY % CHANGE ST. CLOUD ST. CLOUD ST. CLOUD COUNTRY WIDE ST. CLOUD $200k $200k 0.6 40 40 $600k $600k $425,000 $600k $600k $425,000 0.5% 2.0 $350k 2.5% $150k 10% $150k 0.0 $350k 2.5% 150 8% $150k 10% 0.0 2.5 2.5 0.4 $150k $150k 0.0% 1.5 -0.5 -0.5 $300k 2.0% 0.2 STEARNS 2.0% $300k COUNTY UNITED STATES - MONTHLY % CHANGE QUARTERLY % CHANGE6% IN STEARNS MINNESOTA /13 QUARTERLY % CHANGE MINNESOTA BENTON AND STEARNS COUNTY 30 REAL GDP 30 $400k $400k COUNTY2012/13$400k $400k IN REAL GDP 6% 2.0 2.0 $120k 120 $120k 1.7% 1.7% $100k $100k 3.5 1.0 50 3.5 50 $200k 1.0 $100k-1.0 -0.5% $200k 0.0 -1.0 $250k $250k 3.1% 3.1% $72,162 1.5 1.5 8% St. Cloud 8% St. Cloud 0.8$72,162 N/A N/A 20 20 $50k $200k $200k $50k -0.2 0.5 $200k $200k -1.0% $2,500 3.0 -1.5 Paul Minneapolis/St. Paul Minneapolis/St. 3.0 -1.5 $2,500 $90k $1,200 90 6% $90k $1,200 0.8 $200k $200k Minnesota Minnesota 0.6 40 40 -0.4 1.0 1.0 $150k $150k 2.5% 4% 2.5% $0 United States United50k States 0.0 -1.5% 4% -2.0 $0 -2.0 2.5 2.5 F M A M J J J F AM SA OM NJ D J A S O N D D JJ AF SM OA N D M J J A S O M N JD JJ AF SM OA NM D J F M A M10 J J J F A M S A O M N J D J J 0.4 F M A J F M A M A S O N -0.6 10 J $0 $150k$0 $150k $0 $0 0.6 St. Cloud $60k J J A S 60 O N DJ JJ FA MS AO M J J A S O N DJ JJ FA MS AO M $60k N N JD J F M A 0.5 M J 0.5 JD J F M A M J -0.5 2.0% 2.0% Minneapolis/St. P -2.0% 0.2 30 30 -0.8 No. of permits 6% 6% 2.0 2.0 permits 1 0 1 No. 0 of 1permits 1 0 0 0 0 0 0 2 3 3 4 6 11 7 4 1 1 10 6 19 1 No. of permits 3 1 1 0 1 1 0 0 0 0 0 0 2 Rochester 1.7% 3 4 6 11 7 4 1 1 10 6 19 1 1.7% $100k $100k $100k $100k 0.0 0.4 -1.0 0% 0.0 -1.0 0 0.0-2.5% 0 A S O N D 30 4% J F M A M J J $30k J J A S O N2ndDQuarter J F 3rd M Quarter A M 4th J quarter S AO M N JD J F M A M 2nd Quarter 3rd Quarter 4th quarter 1st Quarter 1st Quarter J J A S O N DJ JJ FA M $30k 1.5MA S AO N MD 1.5 St. CloudF J J A S O N D J M A M J N/A J J A S O N D $50k J F J N/A -0.2 20 20 $50k -1.5 Minneapolis/St. Paul

XXXX

Source: www.positivelyminnesota.com 0

S J -0.6 OJ NA DS

-0.8

2nd Quarter

NTRY WIDE

3rd Quarter

-1.0 J F 4th quarter

MINNESOTA

$200k

M A M 1st Quarter

$150k

1.0

$200k

$0 O

MINNESOTA

COUNTRY WIDE 10%

Median Housing Prices Median Housing Prices0.5

JO FN MD A J

employment Rates Unemployment Rates Economy Central presented by

$150k

0.0 O

N2ndDQuarter J F 3rd M Quarter A M

2.0

Sheriff ’s Foreclosure Auctions Median Housing Prices

Median Local Nonfarm JobsHo

Local Nonfarm Jobs Local Nonfarm Jobs 4th J quarter

MINNESOTA - MONTHLYMINNESOTA % CHANGE - MONTHLY % CHANGE0.8 2.0

Minnesota Unemploy Nonfarm J

St. Cloud Source: www.positivelyminnesota.com 50k4% $0 Minneapolis/St. Paul J F M A M 10 J M J J A J SA OS NO D N M D JJ M SA O M N D A JF A J F M A N Minnesota BENTON AND STEARNS COUNTY MONTHLY %COUNTY CHANGE - MONTHLY % CHANGE BENTON AND- STEARNS United States

Minnesota Nonfarm JobsNonfarm Jobs Minnesota

1st Quarter

XXXX XXXX X XXX XXX

Unemployment Rates Food & Beverage Tax Collections

$3,745

$343,111.15

-0.4

Sheriff ’s Foreclosure Auctions Median Housing Prices

XXXX XXXX XXXX

Gross Domestic Product Sheriff ’s Foreclosure Auctions

XXXX

uctions oreclosure Auctions 0.5

0.0

$1,777,934

Food & Beverage Tax Tax Collections Lodging Dollars

oss Domestic United ProductStates Nonfarm Jobs

1.0

$1,777,934

odging TaxHome Dollars Sales Closed - Total

$343,111.15

$3,397,262

Gross Domestic United ProductStates Nonfarm Jobs

$343,111.15

OMMERCIAL BUILDING PERMITS, CONSOLIDATED COMMERCIAL BUILDING $350k PERMITS, CONSOLIDATED $350k

0 N

J D

A F

S M

O A

N M

D J

Minnesota United States D

St. Cloud Minneapolis/St. Paul Rochester F

0.2 Benton & Stearns Counties Minnesota -2.0 J F M United States

50k4% A

0.0

-0.2

0% J

S E P T E0.8M B E R / O C T O B E R 2 0 1 3 • • w w w. B u s i n e s s C e n t r a l M a g a z i n e . c o m

M JJ J J A

$100k

No. of permits 8

$53,545

XXXX

$24,200 O N

No. of permits 6% 1

J$0 F

N/A N

141

$200k

$3M

$.5M

$150k

$0 60$30k A S O N J D J J A F SM OA NM D J

of permits No. of permits 122 118 127No. 105 97 37 1112 7 19 11132618 14 4 9 57 1 65 2

30 $0

$100k

0 50k N J D J J A F S MO ANMD J J

’s Foreclosure Auctions Waite Park Sartell Sheriff STEARNS COUNTY J

$2M

1.5 $1M

$600k

0.5 S A

J $0J A S O N D J F M A M J F M A M O N J D J J A F SM OA NM D J J

12 No.7of permits 8 7 8 3 18 8 16 1 123 126

$425,000

$72,162 $200k $24,200

$300k

A $0

O J

0%10

JD $0JJ S O

N A

AF JN

$1,200 $0

S O M A JD AJ

$2,500

N J M DJ SF OM NA

4 No. 3 of permits 3 3 1 4 0 1 1 0 03

F DM

M JJ

A F

M M

011 0141 0

$343,111.15

$250k 90

$200k

-0.2 -0.4

$150k

-0.6

-1.0 N/A

$50k

$200k 6%

ACentral M MN J

$2M

$2000000

$1.5M

$0 M

COUNTRY 1.5 WIDE 10% 1.0

$1M

0.5

2.5%

0.0 8%

2.0% = exceeds chart scale

$.5M

$500000 $10,404

1.7%

0.0

J M

2.0

Unemplo

-0.5 $24,200

1.5

O Minnesota N D

SO O N N D D

-1.0 F

MSt. Cloud J

N/A D

2nd Quarter

J A

J S

4th quarter

-2.0

$150k

$1M

$200k

$800k

0.6

$150k

$600k

0.4

$400k 0.2

Local No

$1M

$120k

XXXX

$.5M

0.0$200k

S$0 O J

N J

$800k

= exceeds chart scale 0.8

$90k

$600k

No. of permits 8

$53,545

No. of12permits 16 12 37

$60k

411

Minnesota received the following grades:

D M

1.7%

C 2.5%

1.5

1.0

$250k Expected Liability Gap:0.5 1.5

O 0.0N D S O N

Unemployment Rat COUNTRY WIDE

10%

-1.0 0.0 Productivity and Innovation: A St. Cloud $50k Paul Minneapolis/St. Minnesota United States

STEARNS COUNTY

8% 20

4th quarter

Sheriff ’s Foreclosure Auc

XXXX

0.0

$150k

3rd Quarter

J $0 J

C-

Sector 0.5 Diversification: -0.5 2nd Quarter

$2,500 $1,2000.2

-0.2

$200k

Global 1.0 Reach:

0.4

$72,162

$200k

19 Rochester 1 No. of permits 1

ST. CLOUD

2.0

$425,0 0.6

$400k

$30k

-0.2 J MF A M M A J M J J A S O N J F$0 F M A S O NJ DJ JA FS MO AN MD JJ

D A

$300k 2.0% Tax Climate: 2.0

BENTON AND

0.8

$1.5M

LodgingSt.Tax Dollars Augusta

Median Housing Prices

$2M

BENTON AND STEARNS COUNTY - MONTHLY % CHANGE ST. CLOUD COMMERCIAL BUILDING PERMITS, CONSOLIDATED COMMERCIAL BUILDING PERMITS, CONSOLIDATED COMMERCIAL BUILDING PE

120

1st Quarter

A S O N O 6%N D J -1.5 12 8 12 5 3 4 1 0

Minneapolis/St. Paul 1 No. of permits 21 8 No. of permits 1 4 3 3 Minnesota United States

3rd Quarter

MINNESOTA

Minneso

3.1%

0.5

MINNESOTA -

$1000000

$0 scale = exceeds chart J A S O NJ DJ J A F S M O A NM1.0DJ J O N D J F M A M J No. of 61 157 245 4 32 2 33 7 229 127 12 7 $100k 11 26permits 14 9 8 7 3 8 1 3 6 3 7

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COMMERCIAL BUILDING PERMITS, S

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N/A

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$150k

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-2.0

3.5

$250k

$350k

$60k

$1M $634,892

8% $300k

$1M

3.0

No. of permits 3

No. of permits 1

3.1% TaxA Minnesota Nonfarm Jobs Food & Beverage Collections Human Capital: MINNESOTA - MONTHLY % CHANGE

$90k

$72,

-1.5

3.5

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J J-1.0 J A

Manufacturing: B Gross Domestic Product 2012/13 QUARTERLY % CHANGE IN REAL GDP B Logistics:

$120k

$30k J F

St. 30 Cloud J F M A Paul M J Minneapolis/St. Minnesota 7 7 4 8 4 3 United States

-1.0

$200k $0

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-0.8

$100k 30

Report Card Local Nonfarm Jobs Home Sales Closed -St. Total Joe Waite Park

COUNTRY WIDE

ST. CLOUD

0.0

.79%

Unemployment Rates Lodging Tax Dollars

0.8

0.2

120

$350k

1.0

0.4

Minnesota’s poor tax climate is hindering growth of the state’s manufacturing sector. That’s the word from a recent report by $100k BallSt.State University. The 2013 Manufacturing and Logistics Cloud Minneapolis/St. Paul Report Card, an in-depth analysis from Ball State’s Center for Rochester 50k Cloud Business and Economic Research, grades all 50St. states. Minneapolis/St. Paul

$400k

No. of permits 1

0.6

$350k

150

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Minnesota Receives “B” for Manufacturing

UNITED STATES - MONTHLY % CHANGE

ST. CLOUD

No. of permits 8

$778,000

0.3%

Commerce/Services United States Nonfarm Jobs ST. CLOUD

Housing/Real Estate sources: St. Cloud Area Association of Realtors, http://stcloudrealtors.com/pages/statistics; 0.0 0 J J A S O N D J 2nd Quarter 3rd Quarter quarter 1st Quarter Benton County Sheriff’s Civil4th Process; Stearn’s County Sheriff’s Office; http://thething.mplsrealtor.com/

& -Beverage Home Sales Food Closed Total Tax Collections

$1M

$1.5M

0.4

$100k

$500000 $53,545

-0.5

Sources: Minnesota Compass led by Wilder Research; Bureau of Economic Analysis - www.BEA .gov.

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$2,224,021

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$3M

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0.6

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ST. CLOUD COMMERCIAL BUILDING PERMITS, CONSOLIDATED COMMERCIAL BUILDING PERMITS, CONSOLIDATED

2012/13 QUARTERLY % CHANGE IN REAL GDP

3.0

J D FJ M F

$5M

Minneapolis/St. Paul Rochester -1.0 0.0% J F

0.2

-0.2

Gross Domestic Product 3.5 40

St. Cloud -1.5 Minneapolis/St. Paul Minnesota RESIDENTIAL BUILDING PERMITS RESIDENTIAL PERMITS COMMERCIAL BUILDING BUILDING PERMITS, CONSOLIDATED United States -2.0

$4M

-0.2

A M J $2,500 $1,200 18 4 57 65

UNITED STATES - MONTHLY % CHANGE 2012/13 QUARTERLY % CHANGE$1500000 IN REAL GDP BUSINESSES CREATING NEW LAST YEAR BENTON ANDPRODUCTS STEARNS IN COUNTY - MONTHLY % CHANGE

Median Housing SheriffSauk ’s Foreclosure AuctionsPrices St. Augusta Rapids BENTON COUNTY MINNESOTA

COMMERCIAL PERMITS, CONSOLIDATED COMMERCIAL BUILDING PERMITS,BUILDING CONSOLIDATED 50

$1,222,710

1.0

$16,000

0.8

St. Cloud Minneapolis/St. Paul Rochester

$0 $60k $0 0.6 $0 J J J J A S O JN JD AJ SF OM NA DM JJ F M-0.4 A N/AM J J J A S O $50k N D J F M A M J J0.2 J A S 0.2% 7 2 319 2 0-0.6 1 16 9 No. of permits 45 59 No. No. of permits 11 43of permits 36 34 2116 8 7 12 3 8 4 12 12 516 150 No. of 50k permits 26 21 40 48 45 43 16 23 30 35 40 39 28 No. of permits 10 5 12 7 0.4 0.1% $30k $0 St. Cloud -0.8 0.0 M J J A S O N D J F M A M

1.0

Gross Domestic Product Unemployment Rates

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$.5M

$150k $90k

$100k

$3M

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$100k

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$1M

$120k

$1M

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SartellWaite ParkSt. Joe

Local Nonfarm Jobs

$200k

$.5M 90$60k

$150k

$250k

$2M $150k

$200k

$1.5M

ST. CLOUD $300k

$1M

120$90k

$.5M

$6,362,170

$1.5M

MINNESOTA

$778,000

$17,096,137

$1.5M

$4M

10% United States Nonfarm Jobs Gross Domestic Product Product Creation Local Nonfarm FoodJobs & Beverage Tax Collections

$350k Median Housing PricesTax Dollars Lodging

MINNESOTA

$4M

ST. CLOUD

$1M

$5M

J J A S O N D Food & Beverage Tax Collections

Median Housing Prices

-0.5

$3,397,262

$150k

150 $120k

$1M

$343,111.15

$12,449,306

$2,135,900

$2,284,500

$2,434,500

$1.5M

$5,412,980

TEARNS COUNTY ST. CLOUD

0.0

$17,172,684

heriff ’s Foreclosure Auctions Home Sales Closed - Total

$.5M $0

$6,178,910

$2M M

Lodging Tax Dollars ST. CLOUD

COMMERCIAL BUILDING PERMITS, CONSOLIDATED 4% $2M J $2M F M A M $5M

Housing/Real Estate

$2M

N/A

$6,476,471

ECONOMIC INDICATORS & TRENDS $50k Waite Park St. Augusta Sauk Rapids St. Cloud RESIDENTIAL RESIDENTIAL BUILDING PERMITS RESIDENTIAL BUILDING PERMITSBUILDING PERMITS RESIDENTIAL BUILDING PERMITS A

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91 141 143

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$50k

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$343,111.15

$100k

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ECONOMY CENTRAL $200k

$150k

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-2.0 $0 4% Minnesota’s grades improved from “B” to “A” in productivity D J F M A M J J and innovation, but retained an “F” in tax climate, according to the report. This will continue to weigh down growth prospects for manufacturing in Minnesota. Only very poor tax Median Housing Prices Local Nonfarm Jobs Gross Domestic Product Sheriff ’s Foreclosure Auctions Median Housing Prices LocalofNonfarm Job grades in Minnesota offer any real constraint to a decade 2012/13 QUARTERLYMINNESOTA % CHANGE IN REAL GDP STEARNS COUNTY BENTON AND STEARNS COUNTY - MONTHLY % CHANGE MINNESOTA BENTON AND STEARNS COUN Minnesota exports of agricultural, mining and manufactured 3.5 $200k $200k manufacturing growth that is likely in the region. 3.1% 0

N MD J J

J F AM S A OM N J D

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Sources: Tax Collections – City of St. Cloud Incorporations - MN Secretary of State, Graph courtesy of SCSU

Minnesota Exports Post Record 50

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products reached $4.9 billion in the first quarter of 2013, the state’s 10th quarter of record export growth. Machinery led all $150k consecutive 2.5% export products, reaching $1 billion, down 4 percent from the same 2.0% period one year ago. Other top 10 products were optic, medical $100k ($797 million, up 2 percent), electrical machinery ($612 million, no 50kchange), vehicles ($432 million, up 17 percent), and plastic St. CloudMinnesota DEED. ($240 million, down 14 percent). Source: Minneapolis/St. Paul

2.5

0.6

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0.4

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Business Central Magazine •• SEPTEMBER/OCTOBER 2013

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Economy Central presented by

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The management team at Strack Companies (from left): John Nack, chief operating officer; Bob Strack, CEO; and Matt Strack, vice president.

Business Central Magazine •• SEPTEMBER/OCTOBER 2013

E U L A V

rly on nies, decided ea pa om C ck ra St , his Bob Strack ld only be part of ou w gs in ild bu ng-ter m that putting up ld be building lo ou w s cu fo is H . ust. business a foundation of tr rela tionships on Y RA PH I / BD I PH OT OG EL BU TKOW SK JO BY OS OT PH BY GA IL IV ER S

S E P T E M B E R / O C T O B E R 2 0 1 3 • • w w w. B u s i n e s s C e n t r a l M a g a z i n e . c o m

BUSINESS PROFILE

Strack Companies ADDRESS:

P.O. Box 668, St. Cloud, MN 56302 137 23rd St. South, Sartell, MN 56377 PHONE: 320.251.5933

1.888.678.7225 FAX: 320-251.3123 EMAIL: info@strackcompanies.com WEBSITE: www.strackcompanies.com CEO: Bob Strack COO: John Nack VICE PRESIDENT: Matt Strack CFO: Mike Mages, CPA OWNERSHIP: Bob Strack. Beginning

in 2014 the ownership structure will be Bob Strack; John Nack, and Matt Strack BUSINESS DESCRIPTION:

A multifaceted commercial and industrial construction company providing services in three areas: general construction, project management, and real estate services. RECENT PROJECTS: Spee Dee Delivery

Service; Array Services Group, Custom Caseworks; FED EX Ground; CentraCare; Third Street Brewing Company; Casey’s General Stores ST. CLOUD BASED EMPLOYEES: 25;

Site Superintendent Ken Jochum started with the company in 1968 TOTAL NUMBER OF EMPLOYEES:

Varies - highest was 41

ob Strack never intended to become the owner of Strack Companies. He wanted to go into law. He thought it was intriguing. He even took a few classes. But instead of law, he went to Mankato State and received a degree in construction management. Not necessarily because he wanted to, but because he knew that was what was expected of him. Ninety-two percent of the construction companies in the United States are family owned, according to Strack. As the only son, he knew the family assumed he would one day take over the business. There was good reason for the assumption. Both of Strack’s grandfathers were builders. In 1938 Strack’s father, Don, and his grandfather, Joseph, started the business together after Don came out of the service. They built single family homes, focusing on large tract family housing in what is known today as the Centennial/Pantown area of St. Cloud. In 1952 they transitioned into commercial industrial construction. In 1960 the firm completed two of the larger manufacturing plants in the St. Cloud area – the Waldorf plant, known today as Smurfit-Stone Container, and the original Fingerhut facility, both on 8th Street in St. Cloud. “Those really launched him as a

commercial builder,” Strack said. With such a legacy, Strack knew his path had been determined for him. There was just one problem. “I really didn’t like the business the way my Dad ran it,” he said. For one thing, they spent their time bidding on projects. For another, all they did was build. “I thought it was extremely important to change what I didn’t like so I could enjoy going to work every day,” he said. “That meant that building a facility would only be one part of what we would do.” It also meant bidding on projects would stop. “We don’t do bid work,” Strack said. “Never have, never will.” Instead, Strack immerses himself into his customers’ businesses. “Pick a client,” Strack said. “I probably know more about the business than 90 percent of their employees. For example – Spee-Dee Delivery. I’ve built buildings that Don Weeres [president of Spee-Dee Delivery Service] hasn’t seen until the building is done. To me, that’s the definition of trust and that’s what’s important to me.” Strack and Weeres first met in 1983. Weeres was renting a building and Strack Construction did the remodeling. “We’ve been using them ever since,” Weeres said. “We’ve developed a really good relationship with Bob and his team and that’s made the job of construction easy for us.”

2012 SALES:

Approximately $50 million MOST BUILDINGS CONSTRUCTED FOR ONE CLIENT: 53 for Casey’s

General Stores, Ankeny, Iowa PROJECT COMPLETED FURTHEST FROM ST. CLOUD: Generator

buildings for Brown Boveri in Taiwan and Trinidad Tobago LONGEST LASTING PROJECT:

ME International — a 28-month long expansion and renovation project converting the former Brown Boveri Plant in St. Cloud, into a foundry, today known as Grede Foundries

Strack and Son Construction Co. built single family homes, focusing on large tract family housing.

Business Central Magazine •• SEPTEMBER/OCTOBER 2013

The two met at a critical time for Strack. He had joined his father in the company in 1978 after graduating from college. In 1982, when his father retired, Strack bought the business. “Anyone who is old enough can remember that 1982 wasn’t the best of times,” Strack said. “There wasn’t a lot going on.” Put another way, he said, they were dead in the water. “I can’t emphasize the difficulty when I first took over. In a six-month period, I purchased a company, we had our first child, and bought a home – at 16.25 percent interest. And that was a good deal! Times were tough. I had to let a few people go.” For a short time, Strack was the only employee in the office. He recalls being on the phone with a competitor when his second phone line rang. “I was either too vain or too embarrassed, but I didn’t want the competitor to hear the phone ringing in the background and wonder why nobody was answering it,” he recalled. “So I moved myself into the closet out of ear shot of the other ringing phone.” That year the company had three employees and about $400,000 in sales. “For me that was probably OK – starting at the bottom,” Strack said. There have been other tough years, including the 1991 recession, and 2002, the year following the 9-11 terrorist attacks. “That was a terrible year,” Strack said. “Those external forces that I can’t control are my biggest challenge. The economy. 9-11. Circumstances that are beyond your control. They may be tragic, but they happen and you can’t overcome them on your own because you can’t make business where there is no business.” On the other hand, the most recent economic downturn, popularly known as the Great Recession, went unnoticed at Strack Companies. In the last five years they have had three record years, including 2012-13. Strack uses three benchmarks to determine that success: the number of projects, the type of projects, and company profitability.

TIMELINE

Strack Companies

1938 – Joseph and

1978 – Bob

Don Strack start Strack Construction, doing both commercial and residential construction; the company is located at 515 ½ St. Germain St. in downtown St. Cloud

Strack joins the business fulltime following graduation from college

1947 – Strack Construction

moves to 525 7th Ave. N, St. Cloud, in the lower level of the Embassy Apartments, an apartment building built and owned by Strack 1948 – Don Strack purchases

the company from his father, Joseph 1952 – The company stops

doing residential construction and transitions to strictly commercial work 1960 – The firm completes

two of the larger manufacturing plants in the St. Cloud area – the Waldorf plant, known today as SmurfitStone Container, and the original Fingerhut facility, both on 8th Street in St. Cloud 1963 – Strack builds a new

office at 1139 Franklin Ave., Sauk Rapids 1972 – Bob Strack starts

working for the company part-time and during the summers while in high school and college

1982 – Bob Strack

purchases the company from his father, Don; Bob changes the In 1938 Bob Strack’s father, Don, and business format his grandfather, Joseph, started Strack to the current and Son Construction after Don came out of the service. model of primarily negotiated private contracts, real estate ownership intentionally structuring, and facility choosing to not seek public management. Today Strack bidding projects; the company Companies provides leasing has about $400,000 in and facilities management to revenue and three employees over 38 commercial facilities 1983 – Bob Strack automates in seven Midwest states. the company with the first 2000 – Strack builds a new generation of a multi-user operation’s facility at 1051 server system by Altos 7th St. SE, St. Cloud 1984 – Strack forms 2003 – Fourth generation a separate division for family member Matt Strack, project management joins the company full-time called Construction Cost after working in the business Management Corporation during the summers and secures a large contract with the U-Haul Corporation to provide construction management services Moving Center and Storage Facilities in the Midwest. Today project management services represent one of Strack Companies three service areas, performing projects like the recent $22million expansion to the Rivers Edge Convention Center. 1986 – Strack

Don Strack

begins providing real estate services, including site acquisition, financing,

2004 – John Nack joins the

company 2012 – John Nack is named

chief operating office and Matt Strack is named company vice president SEPTEMBER 2013 – Strack

Companies celebrates its 75th Anniversary in business and moves into a new office headquarters at 137 23rd St. S, Sartell

HONORS Bob Strack was selected as the 2013 St. Cloud Area Entrepreneurial Success Award recipient by the St. Cloud Area Chamber of Commerce

S E P T E M B E R / O C T O B E R 2 0 1 3 • • w w w. B u s i n e s s C e n t r a l M a g a z i n e . c o m

PERSONAL PROFILES

Bob Strack

John Nack

CEO

Chief Operating Officer

AGE: 56

AGE: 39

HOMETOWN: St. Cloud

HOMETOWN: Fairfax, MN

EDUCATION:

Mankato State University

EDUCATION: Alexandria

Technical and Community College, A.A.S. Degree in Mechanical Drafting and Design & Engineering Technology.

WORK HISTORY: 38 years, Strack Companies FAMILY: Wife, Laurie; three children: Ryan 31,

Matt 28, Katie 24; two grandchildren HOBBIES: Golf, cooking, boating, hunting and

fishing, climbing, and anything to do with water. ADVICE TO A WOULD-BE ENTREPRENEUR:

Always focus on the big picture…don’t get frustrated or distracted from setbacks as they are actually gifts in disguise. BEST ADVICE YOU’VE RECEIVED: My father

said: Once you find what you like and do best, don’t waiver from it.

WORK HISTORY: John grew up in a small town in Minnesota, starting his first paper route in 4th grade. He also worked for the local farmers and Green Giant until graduating from high school. His professional career began at Marcus Construction in 1994, which included traveling across the U.S. where he saw different management approaches from various customers. He accepted a business development position with Strack Companies in 2004. FAMILY: Wife, Abby; they are expecting their

first child in January (hopefully Dec.31) HOBBIES: Fishing, hunting, snowboarding,

Matt Strack Vice President / Project Manager AGE: 28 HOMETOWN: Sartell EDUCATION: Cathedral High School; St. Cloud Technical & Community College WORK HISTORY: Matt worked at Mathew Hall Lumber in high school, along with Strack Companies during the summers as a field laborer. He moved into the office at Strack in 2006 as a project manager and worked his way into his current position in 2012. FAMILY: Fiancé, Annie

(November 2013 wedding) HOBBIES: Golfing, skiing, fishing ADVICE TO A WOULD-BE ENTREPRENEUR:

Be honest with your clients and treat them the way you want to be treated. If you work hard and try your best, you will be successful. BEST ADVICE YOU’VE RECEIVED:

golfing, waterskiing ADVICE TO A WOULD-BE ENTREPRENEUR: Listen to your spouse, listen

to your intuition, and listen to your employees. Your spouse is one of the few people who is not afraid to tell you when you’re off track. In a time when business ethics seem to be on the decline your company’s ethics will determine your customer base. Your employees determine the chemistry of the company. If your chemistry is off, your employees will not effectively communicate which will directly affect your company’s potential. BEST ADVICE YOU’VE RECEIVED: My dad said: Learn how to appreciate the simple things in life. SOMETHING YOU LIKE ABOUT WORKING WITH BOB STRACK: “His confidence. Owning

a small business is like a roller coaster. Some days you wouldn’t want to be doing anything else and other days you question why you put yourself through all of this stress. Bob has that entrepreneur’s confidence and spirit that shines bright when challenges arise. He always reminds me that ‘We can’t change the economy so be aware of it, but don’t worry about it.’”

Hard work pays off. SOMETHING YOU LIKE ABOUT WORKING WITH YOUR DAD: “Having him as a mentor. He

has a lot of knowledge about all aspects of the business and he’s always there to give advice.”

FUN FACT The company’s first phone number was 547

Business Central Magazine •• SEPTEMBER/OCTOBER 2013

“Don’t get me wrong,” Strack said. “I’ve been on the other side when everyone else is busy and I’m asking ‘What are we doing wrong?’ In this case, I don’t think we were doing anything special. Maybe the stars just aligned for us.” Perhaps. But they have aligned in part because of Strack’s key strategies. His adamant position that the company will generate work based on relationships and negotiated pricing, not on bids. The expertise the company has developed in certain niche markets, including food and beverage processing, healthcare, manufacturing, and retail and office buildings. And the expanded services he provides for his clients. The most fundamental of those strategies is relationships. “We don’t build schools. We don’t build jails,” he said. “Those aren’t relationship based, and that’s who we are.” The company’s expansion into the food service industry proves his point. “Everything’s about relationships,” Strack said. “We had a relationship that we were able to leverage, got a job, built on that, and $40 million later people are touring the buildings and we’re getting referrals.” Food service buildings tend to be unique and have to be built to custom specifications, according to Strack. “It’s a complex process.” Because Stack immerses himself in his client’s businesses, he understands their unique needs. Spee-Dee Delivery’s Weeres gives Strack high marks for paying attention to customer needs. “Bob knows what we need in our buildings for our vehicles and for servicing our customers most effectively,” Weeres said. “I depend on Bob to build for our needs and trust his capability to do so.” Strack’s other key strategy has been the company’s diversification. They have three divisions: general contracting, project management and consulting, and real estate services. As general contractor, Strack is responsible for the physical construction of the buildings as a single source contractor. Project management and consulting includes a wide array of services that can

take place before, during and after the physical construction. “It can include all of the activities that precede a project,” Strack said. “Land acquisition, financing, design concepts, location, accessibility, visibility, master planning…looking far into the future, rather than just at the project they wish to build now. These things are extremely important not just to the success of the current project, but how that company grows and moves on.” Through their real estate service division Strack helps structure ownership types, participates in joint venture ownership of development projects, assists with lease structuring, valuing and negotiating, as well as other services. They also provide facility management of their own buildings and for their clients. The company currently manages over 40 facilities in seven

The most recent economic downturn, popularly known as the Great Recession, went unnoticed at Strack Companies. In the last five years the business has had three record years.

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Fourth Generation nlike his father, Strack never set an expectation that any of his children would enter the business. “I told [my wife] Laurie that I was going to make a Bob Strack has been putting up buildings ffor Spee-Dee Delivery owner Don Weeres since 1983. “I’ve built buildings that Don hasn’t seen until conscious decision not the building is done,” Strack said. to encourage them – I wouldn’t discourage them, but I never states, both in leasing services and wanted them to think it was an facilities management. expectation.” Strack’s oldest son, Ryan, “Those three components add value to thought about it, but after taking a few our clients,” Strack said. “We know a lot classes determined that he would not about building, owning, operating, and be the fourth generation owner of maintaining a building.”

Business Central Magazine •• SEPTEMBER/OCTOBER 2013

Strack Companies. Matt Strack, on the other hand, was born to the business. “He just took to the business on his own,” Strack said. “He got a welding degree from the St. Cloud Technical and Community College, he worked on crews in the summer … he really likes it.” “I started working in the business in summers while I was in high school just to see what it was all about,” Matt Strack said. “I really started to take a liking to it and have been with it ever since.” Matt confirms his father’s position that there was never any pressure to join the business. “He never pushed me at all. I had an interest in it and always had a liking for construction.” Matt’s track to ownership will be somewhat different than his father’s.

“When I was Matt’s age and starting out, sometimes I wished I had someone to talk to – a brother or a partner – someone to float things by,” Strack said. “In the trenches it can be very lonely when you’re a sole proprietor.” As a result, he has created a management team that includes himself, Chief Operating Officer John Nack, and Matt as vice president. “I didn’t want Matt to feel like he had to do it all. I remember how I felt and I didn’t want Matt to feel that way,” Strack said. Nack came to Strack Companies in 2004 after working in a larger organization. “I think that was good for him and good for us,” Strack said. “Early on I recognized in John that he had the same set of goals, philosophies and values that we had.”

I’m a quality person, not a quantity person. I’d rather do a little bit of business, minimize the risk, and maximize the quality. — BOB STRACK, STRACK COMPANIES

“We – everyone in the office – have the same goal in mind,” Nack said. “Not to be the biggest, but to take care of our clients, continue to grow at a steady pace based on relationships with all of our customers, and to have fun.” The trio had a candid discussion about the future of the company. Creating a succession plan that included an ownership opportunity for Nack was a logical choice, one which Matt fully supported.

“The Stracks will always be the majority owner of Strack Companies,” Bob Strack said. “But John and Matt have formed a unique relationship. The synergy is obvious and it makes them both better, and it’s really quite exciting to watch. “And it’s also why I get to spend three months in Florida every winter.” BC Gail Ivers is the managing editor of Business Central Magazine and vice president of the St. Cloud Area Chamber of Commerce.

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PROFIT

High Tech, High Touch! Customer service in the digital age presents a whole new set of service demands.

here is no typical customer. Eighteen-year-olds buy auto insurance. Immigrants are looking for familiar grocery items in mainstream stores. Senior citizens are ordering hiking equipment online. The benchmark for good customer service used to be fairly standard: friendly salespeople, personalized service, easy refund or return policies, and attention to detail. In short, a high touch service environment. It was fairly easy for any business to offer a high level of service

because the basic needs and expectations of the consumer were similar. Thus the Golden Rule of “Do unto others as you would have done unto you” was a universal service code easily implemented. Fast forward to 2013. Many service providers serve a widely diverse clientele. Not only culturally diverse, but age, socioeconomically, and technologically diverse. These new descriptors of your customers make following the Golden Rule difficult, if not impossible, and create a whole new set of service demands. Today’s

Business Central Magazine •• SEPTEMBER/OCTOBER 2013

service mantra should not be the Golden Rule, but a universal rule that states “Treat people how they need to be treated.” This new philosophy considers the complexities of today’s consumers and is a better way to provide a true level of service. Let’s focus on delivering outstanding service to two different groups: those who are “Technically Savvy,” and those who are “Technological Novices.” (see chart, pg. 45)

High Tech, High Touch in Action Walk into an Apple Technology Store.

You will see a beautiful co-mingling of the needs of the technologically savvy and novice consumer. They have a greeter, a la Wal-Mart, but instead of offering a cart, they conduct a mini-assessment of your needs to determine how best to serve you. If you are “Apple Savvy,” you are encouraged to try out the devices and let someone know when you are ready to check out. No hovering salesperson follows you. No one asking intrusive questions or being condescending. They acknowledge the buying habits of tech-savvy shoppers and provide them with service at a desirable level. If, on the other hand, you are new to the Apple world, you can be given individual assistance with the devices. Nopressure associates educate you on the finer points of the i-devices and guide you to the choice that makes sense for you. You may not have the resources of an Apple, but you can still provide the same level of service. All you have to do is understand the needs of tech savvy and novice consumers, then apply that knowledge to your current services and marketing techniques. Here are some questions to get you started: YOUR WEBSITE Does your website load easily on a wide variety of computers and devices? If you build a website for only the newest devices

“Treat people how they need to be treated.” This new philosophy considers the complexities of today’s consumers and is a better way to provide a true level of service. you are guaranteed to frustrate your customers. Do you use clear language that helps customers understand that their credit cards are secure? Can consumers request information from the site without being hounded by the provider? If customers make a mistake and double order something, can it be easily fixed? Can they talk to a person if necessary? TELEPHONE SERVICE Is the automated portion of your telephone service truly responsive to customer needs? Do your prompts accurately reflect what the majority of concerns are? Is there an option to receive a call-back if wait times will be long? If people make a mistake, i.e., dial a wrong extension, do they have to start all over again? Can they reach a human being in a timely fashion before the frustration overwhelms them? Is it possible to provide 24/7 service via phone, text, or email? SERVICE ASSOCIATES Are your hiring practices helping you identify service-minded individuals? Are you training and authorizing your staff to meet the needs of your customers? Do you

THE TECHNOLOGICAL NOVICE PREFERS:

praise good service behaviors and correct unacceptable behaviors? Is everyone in the organization aware of their role in your service initiatives? Can they effectively solve problems for customers? Do they make you proud? SOCIAL MEDIA Facebook, Twitter, Tumblr, Blogs, and the like are an ever-growing way to market your services and gather potential customer information. Loyal “friends,” “followers,” and “subscribers” can be influencers for your programs and services. However, they will expect (and probably deserve) some extra consideration for this effort. These folks should be treated to advanced sales or additional discounts. They can be rewarded when they like, share, or re-tweet your information. Your sites need to be lively, interactive, and ever-changing in order to keep the interest of your savvy consumer. Followers only check in with you if there is something new to draw them in. It has been said that a “tweet” has a 17-minute shelf life and I’m sure that was sooooo

THE TECHNICALLY SAVVY CONSUMER PREFERS:

•• Interacting with a real person

•• Self-service

•• Developing a long-term relationship with the service provider

•• Fully researching a product before making a decision

•• Trusting the provider to be truthful in all transactions •• Traditional business hours •• Using cash or check •• Receiving a sincere thank you

•• Feeling confident in the safety and security of a website that accepts credit cards •• Using a wide variety of vendors rather than developing loyalty to one

S E P T E M B E R / O C T O B E R 2 0 1 3 • • w w w. B u s i n e s s C e n t r a l M a g a z i n e . c o m

FEATURE

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PROFIT

Apple Technology Stores are one example where service effectively meets the needs of the technologically savvy and novice consumer.

2012. It will probably be ten minutes in 2014! The bottom line is that social media must be frequently updated to be effective for your organization. By the way, is it possible for technologically novice customers to benefit from some of the online hoopla? A regional department store has been known to offer discount scratch cards at the register for customers without coupons. The discount allows novice customers a chance to join the fun. High tech and high touch is possible.

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Business Central Magazineâ&#x20AC;&#x201A; â&#x20AC;¢â&#x20AC;¢â&#x20AC;&#x201A; SEPTEMBER/OCTOBER 2013

Take the time to assess your companyâ&#x20AC;&#x2122;s customer service initiatives in a nondefensive manner. Look for areas to increase your offerings for both the tech savvy and novice customers. Ask representatives from both groups for suggestions to improve your service. Most of all, commit yourself to providing the best service you can through every avenue available. BC Tracy Knofla is co-owner and featured presenter for High Impact Training.

Courtesy of Apple.com media images

High tech and high touch is possible. Take the time to assess your companyâ&#x20AC;&#x2122;s customer service initiatives in a non-defensive manner. Look for areas to increase your offerings for both the tech savvy and novice customers.

SMART BUSINESS: CenturyLink

Cloud For All How to pick the right cloud for your business MARK YOUR CALENDAR Visit our booth and breakout session at the St. Cloud Chamber Technology and Education Conference November 5. Or visit us online at www.centurylink.com/ business

•• Does the provider’s portfolio extend beyond cloud so that you can streamline integration with your existing infrastructure?

oday’s business leaders often expect their information technology resources to help increase profits by improving flexibility and decreasing time to market. But upgrading or adding technology isn’t always an option as IT budgets are stretched to the limit. So how can a business expand, explore and compete without a solid IT infrastructure standing behind it? More and more IT leaders are turning to outsourced, cloud computing services to fill their growing technology needs

– and do more with less. Cloud is a web-based computing service that hosts data and software on a network rather than on a physical computer. It’s a virtualized infrastructure that aligns business needs with IT capacity to drive more efficient and effective use of client’s resources. Companies turning to cloud today have an array of options. The solution that stands out should not only be flexible, easy- to-use and cost-effective. It must also help you meet your business goals.

Choose a provider that keeps it simple from initial migration through maintenance and management. Ask yourself: •• How easy is ordering and adding new cloud services? •• Does the provider offer straightforward pay-as-you-use pricing? •• What security and reliability SLAs does the provider offer? •• Is there a team available to answer installation, migration and on-going support needs?

CenturyLink is the third largest telecommunications company in the United States and is recognized as a leader in the network services market by technology industry analyst firms. The Company is a global leader in cloud infrastructure and hosted IT solutions for enterprise customers. CenturyLink provides data, voice and managed services in local, national and select international markets through its high-quality advanced fiber optic network and multiple data centers for businesses and consumers.