OCT. 2013
Roundtable: Be an Innovation-Nurturing Business
How Our Changing
Build Website to Advance the Sales Close Arizona’s Growing Wine Industry
Economy Is Shaping
Money
Dynamics of
Negotiation
Power Lunch By the Numbers Business Calendar This Issue Business Lending Guide 2014
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In Arizona, we kick the future into high gear. So do our talented professionals, turning ideas into innovation, driving corporate expansion. Our state is in the top tier for job growth. We’re a Best State for Business. We have the country’s largest public university graduating the finest minds in high-demand disciplines. Arizona’s undisputed top-line priority is supporting and backing business. Icons Intel, Avnet, Boeing, Mayo Clinic, Banner, General Dynamics – and thousands of others – thrive here. Our aggressive pro-business policies and pro-growth legislation continue to lead the nation. Simply put, our state leads the pack. If you want to expand, we can help. Because when it comes to success, Arizona is all business.
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October 2013
passionate about your profitability
At Holmes Murphy, we think providing you with innovative answers to the ever-increasing challenge of rising healthcare costs is one of the most important things we can do to affect your company.
www.inbusinessmag.com In Business Magazine is a collaboration of many business organizations and entities throughout the metropolitan Phoenix area and Arizona. Our mission is to inform and energize business in this community by communicating content that will build business and enrich the economic picture for all of us vested in commerce. Partner Organizations
That’s why we take the time to get to know your company’s challenges and consult with you to provide the highest-quality, lowest-cost solutions — tailored especially for your business. If you are looking for an advisor who understands the complexities of Employee Benefits and a partner who helps you develop the right financial solutions, call Holmes Murphy — the nation’s 26th-largest* broker.
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A D SE IS M T E- N -B VE TO Y E T- LE NO VAL
Present
LUNCHEON • PANEL • EXPO • PARTY 2013
FRIDAY, NOV. 15, 2013 Join us for lunch and our Economic Symposium with our extraordinary panel of top business executives in the Valley. Confirmed panelists include:
Deborah Bateman
Executive Vice President National Bank of Arizona
Barry Broome President and CEO GPEC
Jerry Colangelo Principal Partner JDM Partners
After the luncheon, attend the Valley’s best Business Expo and Networking event.
• 2,000+ Attendees • • Free Admission • • Networking / Build Business • • 6 Restaurants / Food & Drink • • Seminars Every 20 Minutes • • 100s of Business Services • • Give-Aways & Prizes • Join us for the “Happiest of Hours” Reception 6:00p to 7:00p Full No-Host Bars & Food
John Huppenthal
Superintendent of Public Instruction State of Arizona
Elliott D. Pollack
CEO Elliott D. Pollack and Company
Donald Smith President & CEO SCF Arizona
2013
Moderator
Charles Vermillion
CEO OneNeck IT Services Corp.
Candace D. Wiest
President & CEO West Valley National Bank
Ted Simons
Host, “Arizona Horizon” KAET Eight
Table sponsorships available Individual & Table options $75 to $750 Booths are going fast Premium & Standard 10' x 10' $399 to $899
To register, visit us online at inbusinessmag.com
How Our Changing
LENDING
24
OCT. 2013
IN BuSINESS MAGAZINE
Contents
Roundtable: Be an Innovation-Nurturing Business
October 2013
Build Website to Advance the Sales Close Arizona’s Growing Wine Industry
Money
Dynamics of
Negotiation
OCTOBER 2013 • inbusinessmag.com
How Our Changing Economy Is Shaping Money
Economy Is Shaping
Power Lunch By the Numbers Business Calendar
$4.95 INBUSINESSMAG.COM
This Issue Business Lending Guide 2014
The financial landscape has changed since the start of the recession, affecting both lenders and borrowers. Don Rodriguez shares input from bankers and other professionals in the financial arena to explore the impact of new regulations and available funding options. Departments
11 Guest Editor
Paul Hickman, president and CEO of the Arizona Bankers Association, introduces the “Lending” issue.
Features
With more acres of vineyards and new wineries — and prestigious recognitions from Wine Spectator magazine — Arizona’s wine industry is on the rebound. Alison Stanton catches winery owners during harvest season to get their story.
30 Put Client Interest Over Self-Interest
Joseph Callaway points out ways well-meaning business owners may be selling their customers short — and how to erase those bad habits.
40
Noted business and community leaders Dave Binsfeld, Jerry Rodriguez and Cindy White respond to IBM’s burning business question of the month.
14 Briefs
“SiriusXM to Launch Business Radio Powered by The Wharton School,” “Simplify Your Expenses,” “Get Bumped,” “Core Values Key to DIY Dinner Success,” “Why Sales Tax Fairness Matters for Online,” “Healthcare Business Shows Healthy Growth,” “Local Car Care Seizes Niche Op in Hybrids” and “’Lose Wait’ App Grows Business”
18 By the Numbers 40 The Changing Dynamics of Negotiation Technology adds new wrinkles to the time-honored process, and legal professionals share their insights and experience with RaeAnne Marsh.
42 Leadership Control vs. Business Growth Doug and Polly White discuss the risk of management’s tight control holding back a company’s growth.
Busin ess L Guideending Major Ban 2014 ks • Com mu Lendingnity Banks • Cre Ins dit s & Res Unions ources
titution
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22 Trickle Up
View from the top looks at Dan Harkins’s approach to promoting “the ultimate movie-going experience” throughout the family-owned theater chain.
New releases explore strategies for success in business.
Guide 2014
The annual resources and contacts guide
A breakdown of real GDP by region and sector shows what the leaders are as economic growth is up in the Valley and the nation.
31 Books
Special Section
51 Business Lending
2014 Range Rover Sport Plus: Watches that stand the test of time
46
12 Feedback
20 Arizona’s Growing Wine Industry
30
46 Assets
b e r 2013
34 Nonprofits
Cystic Fibrosis Foundation, Arizona Chapter Arizona Transplant House
48 Power Lunch
The Gladly Plus: The classics, from some of the Valley’s renowned chefs
66 Roundtable
Terry Jones discusses how business owners may profit from borrowing a page from a baseball manager’s playbook. Business Education
44 Base Website Design on
Your Sales Process
Thomas Beyer opens his three-part education series on Internet marketing with an exploration of how a wellplanned website puts a businessperson closer to the close. On The Agenda
35 Spotlight Events
Chandler 100 Grow Globally Phoenix 2013
37 Spotlight Event
Arizona and Canada – Building Business Bridges
36 Calendar
Business events throughout the Valley
51
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O c to b e r 2013
9
October 2013 • Vol. 4, No. 10
Visit our Business Solution Centers to learn more about Business
Need Funding? Learn more by downloading this report on alternative lending at inbusinessmag.com/ business-solution-center
Publisher Rick McCartney
Editor RaeAnne Marsh
Art Director Benjamin Little
Contributing Writers Thomas Beyer Lauren Caggiano Joseph Callaway Mike Hunter Terry Jones Don Rodriguez Alison Stanton Doug White Polly White Photographer-at-large Dan Vermillion
For much more on areas of business, visit our Business Solution Centers on: Finance & Banking • Marketing Safety • Healthcare • Legal Commercial Real Estate • Small Business
Advertising
Operations Louise Ferrari
lferrari@inmediacompany.com
Senior Jeff Craig Account Executives jcraig@inmediacompany.com
Louise Ferrari lferrari@inmediacompany.com Cami Shore
cshore@inmediacompany.com More: Visit your one-stop resource for everything business at www.inbusinessmag.com. For a full monthly calendar of business-related events, please visit our website. Inform Us: Send press releases and your editorial ideas to editor@inbusinessmag.com.
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President & CEO Rick McCartney Editorial Director RaeAnne Marsh Senior Art Director Benjamin Little Financial Manager Donna C. Mitchell, CPA Accounting Diane Meyer Office Manager Matthew D. Whitmire
Corporate Offices 6360 E. Thomas Road, Suite 210 Scottsdale, AZ 85251 T: (480) 588-9505 F: (480) 584-3751 info@inmediacompany.com www.inmediacompany.com Vol. 4, No. 10. In Business Magazine is published 12 times per year by InMedia Company. POSTMASTER: Send address changes to InMedia Company, 6360 E. Thomas Road, Suite 210, Scottsdale, AZ 85251. To subscribe to In Business Magazine, please send check or money order for one-year subscription of $24.95 to InMedia Company, 6360 E. Thomas Road, Suite 210, Scottsdale, AZ 85251 or visit inbusinessmag.com. We appreciate your editorial submissions, news and photos for review by our editorial staff. You may send to editor@inbusinessmag.com or mail to the address above. All letters sent to In Business Magazine will be treated as unconditionally assigned for publication, copyright purposes and use in any publication, website or brochure. InMedia accepts no responsibility for unsolicited manuscripts, photographs or other artwork. Submissions will not be returned unless accompanied by a self-addressed, stamped envelope. InMedia Company, LLC reserves the right to refuse certain advertising and is not liable for advertisers’ claims and/or errors. The opinions expressed herein are exclusively those of the writers and do not necessarily reflect the position of InMedia. InMedia Company considers its sources reliable and verifies as much data as possible, although reporting inaccuracies can occur; consequently, readers using this information do so at their own risk. Each business opportunity and/or investment inherently contains certain risks, and it is suggested that the prospective investors consult their attorney and/or financial professional. © 2013 InMedia Company, LLC. All rights reserved. No part of this magazine may be reproduced or transmitted in any form or by any means without written permission by the publisher.
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Paul Hickman, President and Chief Executive Officer, Arizona Bankers Association
Guest Editor
A Capital Effort
Paul Hickman is the president and CEO of Arizona Bankers Association, the trade association for the banking industry in Arizona. AzBA represents banks of all sizes and business niches in the state, from the largest, global actors to the smallest, one-branch, rural community bank. Hickman oversees the state and federal government relations operations of the Association, and acts as the chief spokesman and advocate for the industry in Arizona. Prior to joining the Arizona Bankers Association, Hickman was State Director to U.S. Senator John McCain.
Capital to start a business, capital to grow a business — capital is the essential element in any business endeavor. The types of sources that businesspeople can turn to are varied, and access to funding has become increasingly complicated. But it’s not just the final borrower who is facing these challenges; issues are impacting lending institutions as well, while they continue to try to support the businesses in their communities. To name but a few of those issues, today’s bankers are being pressured by a prolonged low-interest-rate environment, rising regulatory compliance costs, rising technology costs and relatively weak loan demand. Add to that the uncertain path ahead as the federal banking regulators continue to dribble out the rules necessary to implement the Dodd-Frank Act more than three years since its passage. To date, roughly 60 percent of the rules mandated by the Act have yet to be promulgated in final form. This paralysis is hamstringing our economic recovery as businesses, households and consumers struggle to access the capital they need to fulfill their goals. This issue’s cover story, “How a Changing Economy Is Shaping Money,” is well named. Economic events have changed attitudes and regulations even while spawning new avenues for entrepreneurs. In researching the article, writer Don Rodriguez spoke with professionals from banking to more esoteric financing sources who shared their expertise and insights on the events and actions that are impacting the availability of funding. Securing funding may be an occasion to raise a glass of wine in a toast to success — and there are Arizona wines to do it with. Winery owners took time during their busiest season to speak with Alison Stanton, who presents a look at our state’s wine industry for the “Sector” feature. Tom Beyer opens his three-part “Education” series on Internet marketing with “Base Website Design on Your Sales Process.” Other features explore the changing dynamics of negotiation, and a time and management dilemma that faces founders who want to expand their business. Also in this issue, the annual Business Lending Guide is a resource to help business owners find lending opportunities through its listings of local lenders. In Business Magazine continues to fill each monthly edition with articles on diverse subjects aimed at helping build business, and I am pleased to welcome you to this October issue. Sincerely,
Paul Hickman President and Chief Executive Officer Arizona Bankers Association
Money Matters Now more than ever, business is looking at money as a friend and a foe. The banks are lending, but not without great restriction; investors are scrutinizing concepts; and venture capitalists are focusing heavily on tech. In this issue, we address what money (not cash flow) can bring to business and look to experts to help. Paul Hickman and the Arizona Bankers Association have been working with banks through this economic downturn to improve business lending practices and encourage
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Connect with us: true growth. We thank him for his work and are so pleased to have him lead this issue as Guest Editor. As we prepare for our Annual Guest Editors Economic Symposium on November 15th, we reflect on much that Hickman and other Guest Editors have added to In Business Magazine and ask our readers to join us that day for a look at our economic future. —Rick McCartney, Publisher
Story Ideas/PR: editorial@inbusinessmag.com Business Events/Connections: businessevents@inbusinessmag.com Marketing/Exposure: advertise@inbusinessmag.com Or visit us online at www.inbusinessmag.com
O c to b e r 2013
11
Feedback
Valley Leaders Sound Off
Executives Answer
Economists point out that economic downturns force businesses to innovate and increase efficiency to survive. Now that you’ve gone through the crunch, what are the greatest lessons you’ve learned to better your business?
Dave Binsfeld
Jerry Rodriguez
Vice President General Southwest Insurance Agency Sector: Insurance
Owner R&R Refrigeration Sector: Heating and Air Conditioning
We learned that we need to continually innovate and explore new ways of conducting our business. Our firm is over 40 years old. Prior to the downturn, many of our processes were done with the mindset of “this is the way we’ve always done things.” When the economy forced us to tighten up, our employees offered great ideas on how to increase efficiency and to attract new clients. These ideas turned into new initiatives and created a greater sense of team. We also chose to align ourselves with a group of more than 70 other independent insurance agencies — something we would not have been open to before. This has given us a broader array of insurance companies to quote from and allows us to offer our clients additional products and services. All of these changes have resulted in greater profitability. As painful as it was, the Great Recession helped us become a better business.
Our greatest asset through the economic downturn is our ability as human beings to step back and analyze trends. In these recent years, we have learned that one-on-one conversation with consumers is valuable because consumers want companies to identify their needs and problems. Building your business one customer at a time and identifying with them builds loyalty. Many businesses out there are doing elaborate marketing and may be penetrating the market, but the recurring consumer is not there. Why? Customers are relying more on companies that are willing to simply fill a need in a personal and timely manner. With us, it starts with customers reaching a real person when they call. We’re a family business, and we treat our customers like family. We always have; it’s who we are. And that consistency equates to stability. Holding onto your existing loyal customers is key to surviving an economic downturn.
General Southwest Insurance Agency generalsouthwest.com
Dave Binsfeld is a second-generation owner of General Southwest Insurance Agency along with his brothers John and Joe. He has been providing risk management advice and insurance solutions to clients for 28 years. Binsfeld works with a broad range of business owners and professionals with focuses in the social service/nonprofit, medical and technology sectors. He holds a degree in finance from Arizona State University.
Cindy White Owner Cici Bianca Sector: Clothing Manufacturing Lesson number one: Manage my company with less. The recession forced me to take a close look at how the company was being run and where unnecessary money was being spent. Everything was subject to review, from insurance policies to credit card transaction fees. Contracts were examined and renegotiated, and both raw materials and finished goods inventories were reduced. Lesson number two: Information is power. I paid attention to what my advisors, mentors and peers had to say, and they said “diversify.”
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R&R Refrigeration Heating and Air Conditioning randrrefrigeration.com
Jerry Rodriguez, owner of R&R Refrigeration, had a successful high-performance shop in New Jersey specializing in rotary motors before moving to Arizona in 2002. His mechanical and troubleshooting ability proved a good fit with R&R, the business founded by his father-in-law, Arnold Moreno, a 40-year veteran in HVAC and sheet metal layout here in Phoenix. With Moreno’s coaching on the ins and outs of the business, Rodriguez took over the family business in 2008.
I could not stay where I was, so in order to start some positive momentum, I needed to reach out, take a step and move forward knowing that by doing one thing differently, things will change. That’s when I started my baby line. Lesson number three: Involve the company in social media. Starting with social networks like Facebook and LinkedIn, I expanded with a WordPress blog and micro blogs such as Twitter and Pinterest. Additionally, I do multimedia with YouTube and Instagram. All of this involves time but has resulted in more awareness for my company and, ultimately, sales. Cici Bianca cicibianca.com
Cindy White is owner and designer of Cici Bianca, a Phoenix-based company specializing in the manufacture of hand-loomed ribbon jackets for women. A 30-year resident with a background in art, fashion and design, she purchased the former Estelle Gracer Inc. in 1999. The company branched out in 2010, adding Cici Bianca for Baby, which produces heirloom-quality, soft goods for infants.
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O c to b e r 2013
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Briefs
Quick and to the Point
Bytes SiriusXM to Launch Business Radio Powered by the Wharton School SiriusXM channel 111 is set to deliver invaluable business advice for business owners, entrepreneurs, executives and those who dream of starting their own companies. The live, call-in format offers millions of people unprecedented access to world-renowned Wharton professors, distinguished alumni and expert guests. Coming in early 2014. siriusxm.com wharton.upenn.edu
Simplify Your Expenses With Expensify, employees, executives or house husbands and wives can simply record expenses for daily receipts, card transactions, mileage, travel and more. The mobile app syncs with the program back at the office for full download of expenses to an available accounting package that integrates to most office accounting programs. expensify.com
Get Bumped Sharing documents just
Core Values Key to DIY Dinner Success
Laura Prefling and Sara Hinkel, sisters and partners in the Dream Dinners franchise in Phoenix — a sort-of kitchen away from home where individuals can prepare a large number of dinners all at one time — have come out of the recession with the opening this month of their third location. The success of their survival Prefling attributes partly to their low-budget, DIY approach to operations — doing the painting and everything else that does not require skilled labor — and partly to staying true to the mission that underlies the Dream Dinners concept. The business provides customers recipes, fresh ingredients and the space and equipment to prepare the daily dinners for their family that they can freeze at home to be able to easily and quickly serve. Plus there are “finishing touch” items — vegetable side dishes and desserts — that can be added to the order. There is a minimum order requirement of 36 servings, which the sisters feel is part of keeping the lifestyle they believe their service helps promote. “We saw competitors sell individual dinners, but doing onesies and twosies doesn’t really help people against a tight schedule or budget,” Prefling says. The company tag line is “home-made, made easy,” but what especially attracted Prefling and Hinkel to the enterprise was the idea of the importance of sharing a family dinner. “Staying true to the roots of Dream Dinners encompassed keeping the minimum order requirement.” Each of the sisters’ locations is about 1,200 square feet. They conform to health code regulations, although Prefling admits it posed a learning curve to the health inspectors. “The health department didn’t know what to do with us,” she says, explaining that Dream Dinners is more like a restaurant than a grocery store because of the open food. But the idea is for people to do the actual cooking at home, and cooking is half of the food preparation on which restaurants are inspected. “Now, we don’t have to explain to every health inspector,” Prefling says. “They have become familiar with this concept.” —RaeAnne Marsh Dream Dinners dreamdinners.com
got easier. With the recentfor the iPhone and Android devices, individuals can share contact information, photos, videos and files by simply bumping two phones together. Users can also share contacts, photos and files with others and sync with their own computer. The app will sync to the user’s devices or update others. bu.mp
Visualize This
Seeing Is Believing Why Sales Tax Fairness Matters for Online In conjunction with the release of a new
set of House Judiciary Committee principles, which lay out a legislative roadmap for
Photo courtesy of Dream Dinners (top)
Google-acquired Bump app
addressing the collection of online sale tax, the National Retail Federation released a video on sales tax fairness. The two-minute video features small-business owners and
Go online for more!
retail leaders — from Arizona, Kentucky, Massachusetts, New Jersey and Vermont — who discuss the urgent need for Congress to
Visit our “Briefs” link online.
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address the online sales tax disparity. National Retail Federation nrf.com
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BUY OR RENEW NOW! FOR MORE INFO
Briefs
Quick and to the Point
Healthcare Business Shows Healthy Growth
Connextions health services’ foray into Arizona, which is bringing about 500 jobs to the Phoenix area, was prompted by the Valley’s “talented and strong work force,” according to John Hernandez, Connextions vice president of operations, who is leading the Phoenix office. The company, part of UnitedHealth Group’s Optum health services business, works with seniors to help them understand their Medicare options. With 10,000 Americans aging into Medicare every day for the next 19 years, Connextions’ business sector is growing rapidly. The company took over a 71,000-square-foot facility in Ahwatukee for its new solution center, and moved in the end of August to the completed 40,000-square-foot first phase of the construction. The second phase will be completed this year. “We like the density of licensed health agents within the region,” Hernandez says, explaining the need is ever growing to have consumer engagement specialists to help people navigate the questions they have about their plan and enrolling in the right plan. Not only are people taking a more active role in their healthcare, he says, but the questions are getting more complex. In addition to the consumer engagement specialists, the facility will offer employment opportunity for management and staff-level positions. —RaeAnne Marsh
‘Lose Wait’ App Grows Business
Customer service lay behind Great Clips’s development of its online check-in app, aiming to get customers to the most convenient location, according to Ken Hand, a franchisee in the Phoenix market. The app provides users with a map of Great Clips stores near a zip code entered by the user or determined automatically near the location of the iPhone, Droid or Internet browser logging in to the app, along with wait times at each. Customers have found additional advantages that include checking in at a favored store in spite of a long wait and using that known wait time to accomplish other tasks or errands, Hand says. Another benefit accrues to both stylists and the customers they’re serving — with customers using the app to learn wait times and to check themselves in to the queue, stylists have fewer calls interrupting their service to customers in their chair. “The primary focus of the company is convenience, so if I have a 40-minute wait at my store and customers can see one with no wait, I would just as soon they go there,” Hand says. But in fact, he’s found the app to be very good for retention. “Customers who use it really like it a lot,” he says. Released in 2011, “it has seen exponential growth once people started using it.” Eight hundred thousand customers per month use the check-in app nationwide, and its ten-millionth customer check-in was recorded in July. Phoenix is among the top of all markets in its use. —RaeAnne Marsh
Connextions connextions.com
Great Clips greatclips.com
With the growing popularity of hybrid cars, Good Works Auto Repair in Tempe has moved into a niche those car owners were not finding at their dealers — battery conditioning. “There’s no incentive for the dealer to do this,” explains Nathan Merrill, co-owner of the car repair business, noting the dealer would see more profit in replacing the battery and that maintenance is generally not covered under a warranty. A low-performing battery can be “conditioned,” which will increase the car’s fuel mileage and pep.
While batteries are the focal point, joining the Hybrid Shop Network and using its proprietary equipment “opened the door to all hybrid service,” says Merrill, adding that previous to this, he didn’t feel he could give hybrids full bumper-to-bumper care. The Hybrid Shop Network is a fractional franchise, and Good Works is currently its only franchisee in the state. After seeing the process presented at the annual conference of the Automotive Training Institute earlier this year by Mark Quarto, who holds a doctorate in mechanical engineering and whose 28 years at General Motors included work on the pilot hybrid and the Volt, Merrill says he and partner Glen Hayward “took the opportunity to be leaders in our area in hybrid repair.” The scientific approach impressed him, he says, sharing that training previously available had centered on “how not to kill myself ” handling hybrids’ electrical current that is five times greater than what is considered “high voltage.” The Hybrid Shop Network equipment enables them to test the battery’s energy and evaluate the condition of its capacity to deliver electricity, rather than just looking at whether individual cells are bad, and, after servicing, compare its condition to a new battery and show its state of health. —RaeAnne Marsh Good Works Auto Repair LLC goodworksautorepair.com
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Photo courtesy of Good Works Auto Repair
Local Car Care Seizes Niche Op in Hybrids
SEDAN SUV EXECUTIVE VAN LIMOUSINE SPRINTER MINI BUS MOTORCOACH
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Julie Stoney
(602) 370-1776 juliestoney@stoneywilson.com
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6501 E. Greenway Parkway Scottsdale, Arizona
www.stoneywilson.com O c to b e r 2013
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By the numbers
Metrics & Measurements
Notable Numbers According to the U.S. Bureau of Economic Analysis, 2012 was a year to celebrate economic success, given the past four years.
Economic Growth Up in Valley and Nation
Current-Dollar Gross Domestic Product (GDP) by Metropolitan Area Metropolitan Phoenix
by Mike Hunter
Dollars (in millions)
Rank
2009
183,523
—
2010
185,691
—
2011
192,321
—
2012
201,653
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Real Gross Domestic Product (GDP) by Metropolitan Area, 2009-2012
Real GDP increased in 305 of the nation’s 381 metropolitan areas in 2012, led by growth in durable-goods manufacturing, trade and financial activities, according to new statistics released by the U.S. Bureau of Economic Analysis. Real GDP in metropolitan areas increased 2.5 percent in 2012 after increasing 1.7 percent in 2011. Greater Phoenix-Scottsdale-Mesa was among the top growth metropolitan areas, with an average real GDP of 3.2 percent and overall ranking of 83rd. Of the ten largest metropolitan areas, the three with the fastest real GDP growth in 2012 were San FranciscoOakland-Hayward, Calif. (7.4 percent), Houston-The Woodlands-Sugar Land, Texas (5.3 percent), and Dallas-Fort WorthArlington, Texas (4.3 percent). The ten largest metropolitan areas, accounting for 34 percent of national GDP, averaged 3.1 percent growth in 2012 after growing 1.9 percent in 2011. Durable-goods manufacturing continued to spur growth in many of the nation’s metropolitan areas in 2012. Strong contributions from this industry fueled growth in many small metropolitan areas where it constitutes a large portion of the area’s economy. Durable-goods manufacturing in Phoenix-Scottsdale-Mesa saw 0.64 percentage points and was among the top growth sectors in 2012 overall for our area. The effect of the growth in trade (wholesale and retail) was widespread — 363 of the nation’s
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381 metropolitan areas experienced positive contributions to growth. Phoenix-ScottsdaleMesa reported a .33-percent increase for 2012. The strongest contributions from this industry occurred in other areas of the Southwest region. One of the largest contributions occurred in Odessa, Texas (3.1 percent). In 2012, the financial activities industry was a strong contributor to growth in many metropolitan areas. Phoenix-Scottsdale-Mesa scored their highest points in this sector, with financial activities accounting for 1.27 percentage points. Notable contributions to growth from this industry occurred in Missoula, Mont. (3.4 percentage points); Eau Claire, Wis. (2.3 percentage points); Bloomington, Ill. (2.3 percentage points); Minneapolis-St. Paul-Bloomington, Mont.Wis. (2.0 percentage points); and Ocean City, N.J. (2.0 percentage points). Although natural resources and mining was not a major contributor to growth for the nation, several metropolitan areas in the Southwest region experienced strong growth spurred by this industry. Phoenix-ScottsdaleMesa was not one of them, experiencing only 0.07 percentage points in this sector. The notable contributions to growth occurred in Laredo, Texas (2.6 percentage points); San Angelo, Texas (2.2 percentage points); Corpus Christi, Texas (2.2 percentage points); and Longview, Texas (2.1 percentage points). U.S. Bureau of Economic Analysis
www.bea.gov
Metropolitan Phoenix
Chained (2005) Dollars (in millions)
Percent Change
Rank
—
—
2009
166,961
2010
167,410
0.3
—
2011
170,863
2.1
—
2012
176,321
3.2
83
Contributions to Percent Change in Real Gross Domestic Product (GDP) by Metropolitan Area, 2012 Percentage points by Sector
Metropolitan Phoenix Natural resources and mining
-0.07
Construction
0.40
Durable-goods manufacturing
0.64
Nondurable-goods manufacturing
0.05
Trade
0.33
Transportation and utilities
-0.01
Information
0.25
Financial activities
1.27
Professional and business services
0.20
Education and health services
0.00
Leisure and hospitality
0.17
Other services
-0.03
Government
0.00
Percent change in real GDP by metropolitan area
3.2
U.S. Bureau of Economic Analysis
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SE C TOR
Industry at Its Best
Arizona’s Growing Wine Industry We’re gaining grapes, wineries and prestigious recognitions by Alison Stanton
Glass Half Empty For the Arizona wine industry to grow and succeed even further, three key things must happen. First, there must be better support in the form of funding. “We grow some of
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the finest wine in the country in Arizona, but every day we hear questions like ‘What? You make wine in Arizona?’” Fiandaca says, adding that to get more economic support, the industry must increase its focus on marketing. Recent news indicates that people are already beginning to take notice of Arizona wines. Two of the state’s wines have earned a rating of 90 points by Wine Spectator, a desired designation. These are the 2010 Page Springs Cellars’s Colibri Syrah Clone 174 and the Burning Tree Colibri Vineyard’s Syrah from 2010, both from Southern Arizona. Next, there must be a greater emphasis on research that centers on preventing diseases and pests that can impact the crops of grapes. Bringing in supply-chain industries to support the state’s wine industry is also key to the success of the industry. Currently, Fiandaca notes, starting a winery means purchasing most of the products — and, in many cases, the grapes — from out of state. “We need to be able to grow our own grapes and produce our own wine. Right now, there are not enough Arizona grapes being grown to meet the demand, and, due to lack of capital or access to funding, many winemakers purchase grapes and contract the winemaking process due the incredible vineyard and winery start-up costs.” To help the state’s wine industry grow, the University of Arizona and Yavapai College have teamed up to work on the Emerging Wine Industry Strategic Plan. Those who participated in the project looked at the wine regions in areas like California and the Pacific Northwest to study how they grew and what steps Arizona can
take to enjoy similar success. Yavapai College is also in the process of building a Southwest Wine Center, which will teach students about growing grapes and producing wine.
Taste of Money Tom Schumacher, president of the Verde Valley Wine Consortium, says the state’s wine industry is having a positive impact on both local and state economies. Referring to “The Economic Contributions of Verde Valley Winemaking,” which was published in April 2011 by the University of Arizona and Yavapai County Cooperative Extension, Schumacher says the estimated direct economic impact of the Verde Valley wineries, vineyards and tasting rooms in 2009-2010 was $5.5 million. In addition, the report concluded that the total of all economic activity in Arizona related to Verde Valley wine is estimated to be almost $25 million. As the wine industry grows, new businesses will open or relocate nearby to take advantage of the expanding market, says Schumacher, who is also involved with the Yavapai College Southwest Wine Center. “The wine industry will support businesses involving packaging, marketing, storing, selling and shipping wine, as well as those that provide the supplies and maintain the equipment for the businesses.”
Successes and Challenges Sam Pillsbury, a winemaker who lives in Phoenix, makes his Pillsbury Wine Company wine under custom crush contract (a common practice of paying a bonded winery other than inbusine ssmag.com
Photo courtesy of Lawrence Dunham Vineyard
From an economic standpoint, Arizona’s wine industry is doing really well, according to Peggy Fiandaca, president of the Arizona Wine Growers Association and owner and marketing director of Lawrence Dunham Vineyards. “It is growing; there are new acres of grapes in the ground and new wineries opening up. Between 2011 and 2012, we doubled the number of gallons of wine that were produced in Arizona, and it is only getting better.” While there were only a handful or so of wineries in Arizona six or seven years ago, there are now around 78. Most of these are scattered throughout the state’s three major wine regions. “The oldest is in the southeastern part of the state in Sonoita and Elgin; this is where the heart of the state’s wine industry began,” Fiandaca says, adding that the area is the only one of the three federally designated as an American Viticultural Area. The majority of the state’s grapes come from two other regions: the greater Willcox area and the Verde Valley. All three regions have the high elevations that grapes require to grow well. The history of Arizona’s wine industry actually began in the pre-Prohibition days, says Fiandaca. Back then, Arizona had more grapes in the ground than California. From Prohibition times until the 1980s, it was illegal to make wine in Arizona. In 1982, Arizona passed a series of laws that enabled and regulated the activities of a new class of liquor license, the Domestic Farm Winery. “Arizona’s law was modeled after other states, but in May 2005, the U.S. Supreme Court ruled against the State of Michigan on a direct-to-consumer shipping case that made many provisions of Arizona’s wine law unconstitutional,” Fiandaca says. The successful passage of SB1276, which was signed by the Governor in June 2006, brought Arizona’s wine laws in compliance with the Supreme Court’s ruling and re-ignited the wine industry.
one’s own to process grapes into wine) in both Camp Verde and Willcox. Pillsbury, who owns tasting rooms in Old Town Cottonwood and Willcox, says he is committed to using only grapes that are grown in the area around Willcox in Sulphur Springs. “We do not import grapes or juice. I began this operation specifically to make a 100-percent regional wine.” Pillsbury released his first wines under his own label in 2007. His first vintage was 500 cases, which grew to 3,000 cases in 2011. Despite his increasing success, Pillsbury says money is always a challenge. “It takes a minimum of seven years to break even when you grow your own grapes, and I plant more each year. I am always scratching for funds.” Robert Carlson, a partner in Carlson Creek Vineyard near Willcox with his parents Bob and Liz and brother and sister John and Katherine, says he and his family farm 125 acres, 40 of which are under vine and the rest of which is in various stages of development. In the past several years, they have been “magnificently busy,” routinely selling out of their wine. The Carlsons purchase about 15 percent of their grapes from neighboring vines in the Willcox area. The lack of Arizona fruit is the main issue Carlson and his family contend with, and vineyard development constrains the rest of their business growth. “In any other major wine region, there is a host of grape growers offering their fruit,” Carlson says. “Since our industry has grown so fast, the growers that existed have fallen behind the demand or have been outright acquired by wineries.” Schumacher and Fiandaca predict the Arizona wine industry will continue to grow. Basing his prediction on what he feels is a conservative growth estimate of 10 percent per year, Schumacher estimates the total economic impact of the Verde Valley Wine Industry in 2015 will be more than $44 million. Fiandaca is equally optimistic. “Over the next 10 years, we are going to have a lot more grapes in the ground and a lot more wineries on board. I predict that over the course of the next decade, Arizona will have over 200 wineries, and will have double the number of acres of grapes we have now.”
WE PUT SOME OF THE VALLEY’S TOP BUSINESS EXPERTS IN ONE PLACE. Business Resource Center. You need timely, relevant information to help you manage your business. But finding it can be a hassle. That’s why SRP has partnered with local business organizations to bring you professional insights on everything from marketing and human resources to financing and forecasting. All in one place. All from experts in their fields. Learn more at srpbizresource.com.
Arizona Wine Growers Association arizonawine.org Lawrence Dunham Vineyards lawrencedunhamvineyards.com Verde Valley Wine Consortium verdevalleywineconsortium.com Carlson Creek Vineyard carlsoncreek.com Pillsbury Wine Company pillsburywine.com
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O c to b e r 2013
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Trickle Up
A View from the Top
Dan Harkins: Getting ‘Reel’
Theater mogul is committed to creating the ultimate movie-going experience by Lauren Caggiano
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come dressed as knights, serfs and kings — all on fake horses. The movie ran for 34 weeks, the longest-running show at the time. Harkins later sold the ad campaign to the studio. This success was a way to maximize ticket sales while setting his theater apart from the competition. One promotion in particular earned national acclaim. In 2009, Twentieth Century Fox held an online voting contest among U.S. cities to host the premiere of X-Men Origins: Wolverine. In order to ensure a win, Harkins organized a campaign that drove people to the website to vote for his theater — focusing on a single location that he encouraged patrons of the other locations to support. He also created auditorium announcements to further engage moviegoers. More than 3,000 cities competed to host the premiere, and toward the end of the voting period, Tempe and Davis, Calif., were virtually tied. To try and beat out Davis, Harkins and Tempe Mayor Hugh Hallman hosted a voting party to rally moviegoers to participate. In the end, Tempe prevailed and held the premiere at Tempe Marketplace on April 27, 2009. In a cordoned-off section of the shopping center’s parking lot, Harkins Tempe Marketplace hosted Hugh Jackman, along with other cast members Ryan Reynolds, Liev Schreiber, Will.i.am, Taylor Kitsch and Lynn Collins and director Gavin Hood, alongside nearly 10,000 fans. It’s that
fun element on top of practical ones that keeps customers going back. Another point of difference today is the theater’s comfort factor, as the seating was strategically designed for optimal relaxation. Harkins’s staff started the process by evaluating all of the seats available from every manufacturer, but nothing seemed to be the right fit. In response, they took an innovative approach and designed their own, to accommodate guests “of all shapes and sizes.” “We call our exclusive seat the ‘Ultimate Rocker Love-Seat’ because it offers lumbar support, rocks back and forth so guests can find the perfect viewing angle and has a lifting armrest so you can get comfortably close to your loved one sitting next to you,” Harkins says. “We hear from our guests that one of the reasons they love Harkins Theatres is because of our Ultimate Rocker Love-Seats!” Harkins Theatres harkinstheatres.com
Behind the Scenes ■■ In September, Harkins Theatres celebrated 80 years as the country’s largest privately owned theater chain. ■■ Harkins Theatres has won more than 150 awards from local and national press, peer groups and organizations for its dedication to exceptional community service and performance. ■■ “We are passionate about independent film and because we are a local Arizona
■■
company, we really support local film festivals,” Harkins says. Case in point: The 12th annual Phoenix Film Festival was held in April 2013 at the Harkins Scottsdale 101, the festival’s site since Harkins opened the theater there. More than 22,000 attendees enjoyed the finest in independent film from around the world, plus celebrities, filmmaking seminars and parties. Philanthropy is also central to its business philosophy. Harkins Theatres supports notfor-profit organizations with donations of movie passes, on-screen advertising and gift baskets. It also works with several charity partners in Arizona as well as in the other states, with a specific focus on child health and welfare. Organizations it supports include the Phoenix Children’s Hospital, Citizen’s Caring for Children and Let it Be Foundation.
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Photo courtesy of Harkins Theatres
Dan Harkins is the man behind the curtain — literally and figuratively. As president of Scottsdale-based Harkins Theatres, Harkins is the man behind the scenes of the largest family-owned theater chain in the country, operating more than 400 screens. Most are in Arizona, predominantly the Metro Phoenix area, with a handful in California, Colorado, Oklahoma and Texas. It can be said the movie theater business is in his blood. In 1933 at the height of the Depression, Dan’s father, Dwight “Red” Harkins, opened Tempe Arizona’s first movie house, The State Theatre. By 1973, Red had built a chain of five movie theaters throughout the Valley, which later grew into the Southwest’s largest independent exhibition company. Over the years, Harkins Theatres has opened or acquired more than 400 screens. “When choosing our locations, we look for communities that are underserved in quality or quantity of movie screens,” Dan says. “When we identify these areas, we look for opportunities to create a destination and entertainment experience that has lasting value for the community.” Dan was exposed at a young age to the family business that later became his livelihood. Along the way, he worked every job in the theater, from janitor to doorman to projectionist. In 1974, Red passed away, leaving Dan as head of the family business. He was only 21, but Red had taught him well. “I remember how hard my father worked to bring the most happiness to the most people. I can’t think of another career I would rather being doing,” Dan says. “I am proud to honor his legacy through providing that same happiness he brought to moviegoers, to our avid patrons today.” Part of Red’s legacy was one of entrepreneur and showman — qualities that Dan embraced in his approach to running the family business. Memorable promotions proved to be his secret weapon. “Marketing and ingenuity had a lot to do with the business growing when I took over the reins from my father,” Dan says. “Some of the promotions we developed helped set the company on track for future growth.” For example, in the mid-1970s, he created a Monty Python and the Holy Grail promotion to engage customers. Moviegoers were encouraged to
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How Our Changing
Economy Is Shaping
Money
What is the recession’s legacy on regulations and available funding options? by Don Rodriguez
S
mall business is getting its shot at securing loans once again. But in a new regulatory environment, banks are more cautious about getting left holding the bag with bad loans that could come back to haunt them. Even credit unions are
facing potential changes in laws that could affect their ways of operating as nonprofits. This makes it more challenging for businesses to get the cash they need. So lenders and borrowers need to be willing to try new ways to forge the relationship both want.
Rules of the Game Change in Bank Borrowing As the economy unraveled during the recession, one sector constantly was in the headlines: banking. The traditional lender to business received scrutiny all the way to Capitol Hill where lawmakers passed the Dodd-Frank Wall Street Reform and Consumer Protection Act. “It changed banking in a number of different ways” with new rules and regulations, says T. Anthony Hammond, a commercial banker for Johnson Bank. Besides defining what banks can and can’t do, there is the related expense of technology that allows government agencies to access the data proving banks don’t revert to old habits. “Bigger banks have more to comply with [because of their size], so costs are higher. But they have resources to comply,” Hammond says. The good news he points to is, Dodd-Frank established capital ratios for banks, so there are not a lot that are overleveraged. For smaller banks like Hammond’s, the expense of compliance is felt more. For example, a bank could face the dilemma of paying the salary of a loan officer who generates business for the bank or a compliance officer who ensures mandates are met, says Paul Hickman, president and CEO of the Arizona Bankers Association. The need to comply is, he says, a “reaction — and overreaction — to the economic crisis,” since financial service issues were at the heart of the economic crisis. Hammond says that, while following the new guidelines hasn’t changed the way he does business, they can “affect the overall profitability of the bank.” Because some banks were forced to shut their doors when their liabilities soared as the recession took hold, “what we’ve seen is the industry’s contraction,” Hickman says, noting the number of U.S. banks fell from 12,000 when the recession began to its current level of about 7,000 and the trend could continue until there are only 5,000 in just two years. “Is that good for a large, dynamic economy?” he asks.
While banks don’t typically loan money to start businesses, they indirectly help launch them when homeowners tap into home equity to become entrepreneurs. With lower home values and revised guidelines to determine if mortgage applicants qualify, even equity credit is no longer a sure thing. Traditionally, community bankers could make lending decisions based on qualities observed in applicants, not in paperwork. “Underwriting of a mortgage is an art and a science,” Hickman says. Under stricter guidelines, some “mortgages don’t look like qualified mortgages” to the government, he says. Even Arizona bankers were interested in tightening up statutes affecting their own industry as Dodd-Frank began to take hold. Passing in their respective legislative chambers during the last session were one bill that would have conformed state law to the Act in use of various risk management tools by commercial banks and another that would have modernized the Uniform Commercial Code to better identify debtors in secured transactions, Hickman says. They were stopped cold along with other pending measures, victims of partisanship retaliations after a battle over the 2014 budget and Medicaid expansion broke out in the Legislature. “We are hopeful that we can work with the governor’s office and legislative leadership in the coming session to get these important bills past the finish line,” he says. As the recession continued and politicians acted like, well, politicians, existing businesses held back on seeking loans while banks’ assets climbed. Now, banks are witnessing loan growth and there’s room for more. “We’re not at the pace that we want it to be,” Hickman says. “We are looking for opportunities to lend. But we want to do it in a responsible way.” “Competition for good deals [to lend to] is back to what it was in 2007,” says Ed Zito, president of locally owned and headquartered Alliance Bank of Arizona, noting banks “are back in the business of lending” and are trying to restart their revenue lines. In that
“Competition for good deals [to lend to] is back to what it was in 2007,” says Ed Zito, president of locally owned and headquartered Alliance Bank of Arizona, noting banks “are back in the business of lending” and are trying to restart their revenue lines.
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Gallegos says it’s difficult now to predict whether new taxation by Congress and charging more for business loans could set some members up for defaults, since many factors contribute to such scenarios. “But if the cost of borrowing money increases to offset the tax expense, it may impact the ability to repay a higher rate loan,” she says.
competition, however, he has found that while technological enhancements, products and services are important, responsiveness and even proactive attention to customers’ needs is more so. Hammond observes, “We’re well beyond the point of the ‘sky is falling’ attitude.” He sees customers adding onto buildings and investing in equipment. Banks will be conservative compared to before, but for well-capitalized companies with a good management team, “banks are willing to partner up,” Hammond says. Washington Federal is one of the newer partners. Starting as a savings and loan charter in 1917, it used deposits to make residential loans. But a shift started seven years ago when it acquired an institution involved in business banking, explains John Medina, senior vice president and division manager of business banking for Washington Federal. With 24 branches in Arizona plus locations in other states, Washington Federal is “engaged more in business lending than before,” he says. To match this portfolio realignment, the bank this year was granted a change to a national bank charter by the Office of the Comptroller of the Currency, a move unrelated to Dodd-Frank. With business accounting for 25 percent of its assets, it is “looking to grow significantly” in that sector, Medina says.
New Tax Talk Could Impact Credit Union Deals While not as far reaching as Dodd-Frank, possible congressional action could deal a blow to another business-lending sector: credit unions. As part of consideration for widespread tax reform, Congress is considering having the nonprofit institutions pay new taxes. If so, the Credit Union National Association estimates that for every $1 in new credit union taxes, the government wipes out $10 in financial benefits to credit union members, including those who own businesses. With added expense to credit unions’ business model, it’s inevitable new income would need to be generated through fees or interest rates, says Lori Gallegos, executive vice president and COO of First Credit
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Union. “A tax on credit unions is a tax on our account holders,” she says. Like community banks, credit unions are locally owned and operated. “We’re cooperative, not corporate,” Gallegos says. That means all account decisions, including lending, are made locally. “That’s good for small business,” she says. “Being local benefits us, too, because we know our members and it helps us make better lending decisions.” The average credit union business loan is $258,870 in Arizona, meaning credit unions’ business loans generally go to the smaller businesses. When a credit union lends to business-owning members, the capital can be used to keep them competitive and hire additional employees — up to 2,119 in Arizona. Gallegos says it’s difficult now to predict whether new taxation by Congress and charging more for business loans could set some members up for defaults, since many factors contribute to such scenarios. “But if the cost of borrowing money increases to offset the tax expense, it may impact the ability to repay a higher rate loan,” she says.
Businesses Turn to Support for Loan Help When times get tough, it’s not unusual for businesses to turn to support. Locally, that can be found in such groups as the Arizona Small Business Association and the Spirit of Enterprise Center at Arizona State University’s W. P. Carey School of Business. “We’ve seen how the economy has been challenging for everyone,” says ASBA CEO Rick Murray, observing that credit markets have tightened in the past three to four years due to regulation. As a result, people who have taken the plunge to launch a small business of no more than 10 employees are pursuing private funding options such as 401(k) accounts. However, in the last six months, Murray is seeing more banks stepping up to loan to established businesses. “They’ve taken a harder look at requests for loans,” he says. Most ASBA members are seeking loans that banks are doing with the Small Business Association. Because banks have to keep more capital
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on hand under Dodd-Frank, they have to have partner with SBA to stay competitive. But such loans have become “burdensome” for borrowers because now they’re going through two lending organizations, Murray says. That means more paperwork and more time waiting for approval. Gary Naumann, director of the Spirit of Enterprise Center, finds not everyone is prepared to apply. He encourages potential applicants to ask themselves five questions first: How much do you need? What are you going to do with it? (“General working capital” isn’t the right answer, Naumann offers.) Over what time frame is the loan needed? Who is my funding source? What’s it going to cost me, including rate and terms of the loan? After going through this checklist, applicants also need a reality check. “Small business loans, themselves, tend to be less profitable for banks,” says Chris Myers. Bankers tell him it takes as much effort to process a $200,000 loan as it does a $2 million loan, so, naturally, bankers gravitate toward larger accounts. Myers offers a solution to help a business stand out in the crowd. He is CEO and co-founder of BodeTree Direct, a Web-based solution “designed to bring financial and strategic insight to small business” by providing subscribers with tools that crunch the numbers to provide a better understanding of their companies, he says. Starting in November, ASBA members will have the option to subscribe to BodeTree | FI. The distinction of the newer product is it will “provide deeper insight and, more important, find capital,” Myers says. It will develop the business analysis that bankers require, then help the user complete 90 percent of the underwriting process. Testing of the new product with small businesses has revealed BodeTree | FI has been able compress what is typically a three-month process into a matter of weeks. The result will be a “one-to-one” offer between applicant and lender. “With efficiencies the product offers, it opens up more access to affordable capital,” Myers says. While no subscription price has been set, he says it will be less than the $49.95 per month for BodeTree Direct.
There are alternatives to these traditional loans. One that Naumann cites is factoring, which was used by early entrepreneurs. A lender buys the accounts receivables for a short period and takes a discount as a method of payment. While there are many businesses willing to do this to raise money fast, he cautions that it is for those who thoroughly understand how it works. Don’t like owing anyone anything? Naumann understands. In fact, in the past he has been one of those entrepreneurs who opted to pull equity from his home. “But it’s something to consider carefully,” he warns. “It takes a couple shots of courage.”
Tech Entrepreneurs Have Their Own ‘Angels’ For some technology companies — which is where a lot of available money is focused — the saviors for providing capital to grow are angel investors. They don’t provide “seed” capital to launch, so those budding entrepreneurs need to look to themselves or families to get needed money for their ideas. Instead, members of the Arizona Technology Investor Forum back companies with working prototypes, says Managing Director Jim Goulka. As the economy has improved, the group is seeing fewer candidates than a year ago along with “fewer desperation business plans,” he says, “but we’re seeing better-quality candidates.” A smaller candidate pool does not mean interest in angels has dropped. Goulka estimates he talks with 300 companies annually, with 100 to 150 going through the formal application process. A ninemember screening committee then decides which three will be invited to present to group members quarterly. “What we’re looking for is explosive growth,” he says. The amount of capital granted depends on the members and what they want to commit, since they use their own money, Goulka says. For example, if a company needs $1 million, there may be enough interest among the Arizona Technology Investor Forum members to grant the request. If members want to commit only half, the other half could come from other groups, like the Desert Angels in Tucson.
“We’ve seen how the economy has been challenging for everyone,” says ASBA CEO Rick Murray, observing that credit markets have tightened in the past three to four years due to regulation. As a result, people who have taken the plunge to launch a small business of no more than 10 employees are pursuing private funding options such as 401(k) accounts.
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For some technology companies — which is where a lot of available money is focused — the saviors for providing capital to grow are angel investors. They don’t provide “seed” capital to launch, so those budding entrepreneurs need to look to themselves or families to get needed money for their ideas.
Interest in new ventures is very much alive. In Arizona, there have been several attempts to create some type of funds to invest in companies, Goulka says. One was HB2646, which was introduced in the state legislature to create a $50-million early-stage venture capital fund using tax credits for insurance companies to offset premium taxes paid by insurers. After passing in the House Commerce Committee, the bill was endorsed in the full House on a 44-15 vote. After its approval by the Senate Finance Committee, however the measure’s momentum stopped. There was no floor vote in the Senate as it was sidetracked, one of the casualties of the standoff over the budget and Medicaid. Meanwhile, Arizona Technology Investor Forum continues its work to support new ideas. When Goulka assumed his position two-
and-a-half years ago, there were 18 members. Now, the total is 70 — and growing. “The growth of the economy is going to create more opportunities to invest,” he says. “And if it’s high quality, we will invest.” There’s a growing field of those who can make that commitment. Alliance Bank of Arizona alliancebankofarizona.com Arizona Bankers Association azbankers.org Arizona Small Business Association asba.com Arizona Technology Investor Forum atif-az.org BodeTree Direct bodetree.com First Credit Union firstcu.net Johnson Bank johnsonbank.com Spirit of Enterprise Center wpcarey.asu.edu/spirit Washington Federal washingtonfederal.com
Ranking Arizona Lenders No. 1. Lender: Wells Fargo Bank 127 Loans $56,643,500
No. 2. Lender: JP Morgan Chase 122 Loans $26,385,000
No. 3 Lender: Compass Bank 61 Loans $11,368,100
Rankings, continued, by number of loans among other Arizona lenders Lender Name
No. Loans
Amount
Lender Name
No. Loans
Amount
Lender Name
No. Loans
Amount
Business Dev. Fin. Corp.
48
$24,139,000
Live Oak Bank
11
$9,246,000
Bank 1440
3
$4,470,000
BNC Bank
36
$17,080,700
Capital Source Bank
7
$9,839,000
Comerica Bank
3
$785,000
US Bank
27
$12,727,600
RepublicBankAZ
7
$2,853,500
Bank of America
3
$375,000
Horizon Community Bank 23
$10,336,900
Spirit of Texas Bank
7
$2,259,600
BBCN Bank
2
$6,405,000
National Bank of Arizona 23
$2,343,200
Superior Financial Group
7
$95,000
Western State Bank
2
$3,963,200
Seacoast Commerce
22
$21,166,800
Celtic Bank
6
$3,790,000
Goldwater Bank
2
$2,690,000
Metro Phoenix Bank
17
$6,205,500
Meridian Bank
6
$2,335,000
Alerus Financial
2
$600,000
CDC Sm. Bus. Fin.
16
$8,127,000
Stearns bank
5
$11,447,500
Sunrise Bank
2
$560,000 $550,000
Midfirst Bank
16
$12,007,400
The Biltmore Bank
5
$3,195,000
Community Reinvestment 2
Pinnacle Bank
14
$30,894,400
Mountain America FCU
5
$2,266,800
Great Western Bank
2
$525,000
Western Alliance Bank
14
$4,337,300
CoBiz Bank
4
$1,367,100
All Other Lenders
18
$12,675,500
Southwestern Bus. Fin.
12
$10,185,000
Mohave State Bank
4
$1,151,100
Bank of the West
12
$9,765,300
Tucson FCU
4
$400,000
GRAND TOTAL:
709 $353,352,300
504 and 7(A) Loans SBA Fiscal Year 2013, 3rd Quarter 10/1/12 through 6/30/13
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Sales
Business Development
Put Client Interest Over Self-Interest
Even well-meaning business owners may be selling their customers short — and losing them by Joseph Callaway Any entrepreneur willing to endure the proverbial “blood, sweat and tears” it takes to start a business knows how important clients are. They write the checks that pay the bills, so keeping them satisfied is rarely just lip service. In fact, most business owners believe they are putting their clients first — and would be shocked to hear they’re putting clients last. But in reality, they’re putting so many other things first — their own bank accounts, comfort, convenience, even their own pride — that the customer really does come last … or close to it. This is not about business owners who knowingly do shoddy work or try to shortchange customers — odds are, their companies will die a quick and early death. This is about those who do have good intentions
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— who try to be polite and fair and offer a good value — but who allow deceptively small aspects of their day-to-day decisions and habits to take precedence over the customer’s well-being. Closing each customer interaction with “Thank you for your business,” offering discounts for continued loyalty or working the occasional few hours past close-of-business to resolve a client’s problem is nice, even commendable. But these are practices, and don’t necessarily mean the business is putting its clients first. A business may be inadvertently failing its customers by subscribing to the following practices or mind-sets: Believing the No. 1 business goal is to make money. While it is a point, it’s not the point. A too-acute focus on improving the bottom inbusine ssmag.com
Books line takes the business owner’s attention off the people who are going to enable him or her to raise it: the customers. Clients can always tell when they’re not the first priority. (For those who are skeptical, just consider the backlash that often occurs when small businesses are bought out and transformed by larger, more impersonal corporations.) The difference between paying attention to service so that one’s clients will bring business and doing so because serving the customer is one’s first priority may feel slight, but it’s significant. By putting the focus on how best to serve clients, tough decisions resolve themselves: If it serves the client, do it; if it doesn’t, don’t — even if the result is making less money. Letting the little things slide. Business owners encounter a lot of “big” things they should never neglect. For example, one wouldn’t lock up for the night without making sure the restaurant’s kitchen was thoroughly cleaned, and one wouldn’t allow the accountancy office’s college intern to prepare a client’s taxes. However, business owners might not be such a stickler for what seem like “smaller things.” Rushing through paperwork to be able to get home early, failing to spellcheck an email or two, and running late to a meeting probably won’t matter that much six months from now, one might think. But it’s the small details that differentiate “good” from “great.” And make no mistake: If it impacts a customer’s happiness, best interests, comfort level or anything else even the slightest bit, it’s not a “little” thing. By failing to get the small details right, a businessperson is failing to truly put customers first. On the other hand, promises kept, deadlines met, little extra flourishes and small acts of kindness add up to happy clients. In our real estate business, when a client is in escrow, we call or email them every day, even if nothing is happening. This simple message of “nothing happening; wanted you to know” is a huge stress reliever and an even bigger business builder. If it’s not “broke,” don’t fix it. Many business owners subscribe to the theory that if something’s not broken, they don’t need to fix it. If the check-in paperwork a business’s receptionist uses has been in place for years and the company is not getting many complaints, why tinker with it? If one’s knowledge is sufficient to handle most of one’s clients’ problems, why spend valuable time learning more? But the answer is simple: A businessperson who doesn’t consistently strive to improve is not putting his or her clients first. It’s not necessary to spend every minute attending conferences, taking classes and webinars, and reading industry journals, but it should be a priority to stay familiar with the way one’s industry is growing and changing. Always question the status quo, and be alert to ways to make it better. It’s not enough for a business to simply satisfy customers, but should strive to make them be pleasantly surprised at each encounter. Downplaying one’s mistakes. Nobody likes the mishmash of negative feelings that accompanies making a mistake. That’s why many business owners (and their employees) resolve matters with clients as quickly as possible when a ball is dropped, and then try to never speak of the matter again. After all, there’s no sense wallowing in the slip-up — one needs to move forward, right? Wrong. When a company makes a mistake, no matter how big or small, it’s the business owner’s responsibility to stare that mistake in the face and get to the very bottom of what went wrong. That’s
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Personal Best
Perfecting Your Pitch: How to Succeed in Business and in Life by Finding Words That Work Whether making a budget request, interviewing for a job, ending a relationship or talking to children about divorce, the crux of success in those and other crucial situations is planned, effective communication. And yet, it is the tool people most often fail to use. In Perfecting Your Pitch, expert consultant and negotiator Ronald M. Shapiro presents his system of scripting, outlined efficiently as the Three D’s: Draft, Devil’s Advocate, Deliver. Ronald M. Shapiro and Jeff Barker $25.95 Hudson Street Press November 2013
How to Fail at Almost Everything and Still Win Big: Kind of the Story of My Life Dilbert creator Scott Adams offers his most personal book ever — a funny memoir of his many failures and what they eventually taught him about success. How does one go from hapless office worker to world-famous cartoonist and bestselling author in just a few years? No career guide can answer that, and not even Scott Adams (who actually did it) can give a road map that works for everyone. But there’s a lot to learn from his personal story, and a lot of humor along the way. Scott Adams $27.95 Portfolio Hardcover On Shelves & Online
Unlimited Sales Success: 12 Simple Steps for Selling More Than You Ever Thought Possible The art of sales is continually evolving, and for sales professionals worldwide, Unlimited Sales Success is a must-read for staying ahead of the curve. Brian Tracy is unquestionably one of the world’s most revered masters in achieving success, and this book, with its unfailingly smart strategies and techniques, reflects his supreme knowledge and innate understanding of every facet of successful selling. For anyone who is anywhere in the sales industry, reading this book is not an option — it’s a necessity. Brian Tracy $22.95 AMACOM On shelves & Online
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Sales
Business Development
Spending more time trying to get off the phone than really hearing what the customer has to say. Businesspeople generally roll out the red carpet in order to get prospective clients on board. And they’re probably willing to bear with the whims, questions and requests of fairly new customers whose business isn’t yet cemented. But what about older, more established clients? Are they given the same amount of time and care, or is it just assumed they’ll stick with the company out of habit and convenience? Companies that become No. 1 don’t do so because they win customers over once, but because they do it every day. A good experience last month usually won’t keep a customer coming back this month if he or she believes the business’s level of service has slipped. Not knowing a client’s daughter’s name or what the client likes to do on the weekends. A businessperson may see it as being professional when every question in the meeting is about the client’s financial preferences, for example, and not his family, pastimes and interests. But the client sees it as cold and impersonal. Remember, to truly serve, one has to care. When one keeps oneself at arm’s length, one can’t give clients 100 percent — and one gives them an incentive to take their business elsewhere. People can sense if they’re seen as just a client, a source of income, rather than as actual human beings with likes, preferences, quirks and stories. People want to do business with individuals they like — and they like people who like them! One makes a deeper connection with clients by asking about their kids, their pets, their hobbies and their jobs or businesses. That’s where one finds the common ground — that they, too, are filled with worries, hopes and dreams. The businessperson who gets familiar with and invested in these things will work that much And make no mistake: If it impacts a customer’s harder on each client’s behalf, and earn the client’s loyalty in the process. Feeling one’s main obligation to employees happiness, best interests, comfort level or anything is writing their paycheck. While not treating employees like dirt, a business owner may feel else even the slightest bit, it’s not a “little” thing. that he or she doesn’t owe them any special favors, either. After all, they’re getting paid — isn’t that enough? Well, no. The way a company’s employees treat customers reflects the way their employer treats them. We all have “problem” clients. But to avoid them or just go through Is the employer courteous? Kind? Enthusiastic? Attentive? Or short, the motions for them is a mistake. They will notice and remember that perfunctory and even, sometimes, rude? behavior. (And be honest: Would you want to give your business to A businessperson can’t serve others by making distinctions between someone who might write you off when the going got tough?) Also, the people who work for the company and the people to whom the the person who makes the choice to stand by all of his or her frazzled, company provides a good or service. Those at the top set the tone for frustrated customers may become known company-wide or even the company’s “personality,” creating a tribe of people who will beat the industry-wide as the guy or gal who can handle the toughest customers. drum for its message. Employers need to see their employees through Telling little white lies. Telling clients white lies, or exaggerating, a client’s eyes and honestly assess: Would they win first or second place misdirecting or omitting, might make life easier temporarily. But these in a customer service competition? If they don’t like the answer, the first “little” lies are as bad as the whoppers. There is always a chance that thing to adjust could be their own attitude — put the customers first. No customers will see through them and call the liar on the carpet. Even if excuses and no exceptions. they don’t, a willingness to play fast and loose with the truth suggests a broader attitude that relegates clients to second or third priority. Those Callaways thosecallaways.com Honesty can be tough in the moment, but a reputation for Joseph Callaway and JoAnn Callaway are co-authors of Clients First: The Two trustworthiness — or untrustworthiness! — can stick with a person for Word Miracle and founders of the real estate company Those Callaways. Making life. Living by a policy of never holding back or sugarcoating will gain loyalty that money can’t buy. Plus, dealing with only the truth means not the customer’s needs top priority every day and in every situation is how they built a thriving real estate business, and to date, Those Callaways has been the having to worry about getting the story straight or remembering what market leader in their area for years. was and wasn’t shared. not just to be able to fix one particular error; it’s to figure out why it happened and make sure it doesn’t occur again. Look at every mistake as a good learning opportunity. A mistake may underscore the need to improve a quality-control procedure, for example, or perhaps a client’s complaint about mail being sent to her former address will spur action to update the business’s record-keeping systems. Sweeping a mistake under the rug instead of allowing it to make the business better is not putting clients’ future interests first. Subscribing to the idea that the customer is always right. This is not to say a business owner should disregard a client’s preferences and desires — of course the owner should try to get to the bottom of what each customer wants, and then do whatever is in his or her power to deliver that product or service. However, when customers are simply wrong and their best interests are at stake, it’s the business owner’s responsibility to say so. Allowing a customer to be “right” although knowing he isn’t may pacify him temporarily, but in the end, it won’t be good for either the customer or the businessperson. Putting clients first sometimes means politely but honestly disagreeing with or disappointing them. If a financial advisor allows a client to make an overly risky investment he’s determined to make, it doesn’t make the client right; it just makes the advisor irresponsible. Habitually letting certain clients go to voicemail. It’s happened to everyone: Seeing that name flash on the phone’s caller ID and slowly pull the hand back from the receiver and letting the ringing continue. There’s just no energy to deal with the drama, or the whining, or the accusations, or the belligerence just now.
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Subscribe Today and Class Up Your Client Entertaining, Employee Recognition and Business Development 602-495-1999 | phoenixsymphony.org
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NonProfit
by RaeAnne Marsh
Actions to build Community
Arizona Transplant House — Providing Medical Hospitality
Arizona Transplant House serves transplant patients — donors as well as recipients — with a full range of medical needs. Length of stay varies from a few weeks to several months. Someone waiting for a liver transplant, for instance, must live there while waiting for an organ to become available, Executive Director Tom Davie explains, adding that one patient was recently released after an eight-month stay. For heart transplant patients, doctors recommend a minimum three-month stay after the surgery to monitor their progress. November 9, Arizona Transplant House will host one of its two major annual fundraisers — Denim N’ Dreams dinner and silent auction — at the Armenian Cultural Center. The event is informal and relaxed, with food donated by local restaurants offered at stations throughout the facility for attendees to savor while engaged in the silent auction. One or two former patients will share their testimonial about their healthcare journey “and what it meant to them to have the hospitality facility,” Davie says. With 250 to 300 guests plus sponsorships, Arizona Transplant House hopes the event will raise $50,000 to $60,000. Arizona Transplant House aztransplanthouse.org
Snapshot
■■ The Transplant House is an
■■
■■ ■■ ■■
independent 501(C)3 nonprofit organization on the campus of the Mayo Clinic in Arizona, and serves Mayo Clinic patients who live here or travel here. Its annual operating budget is $2.5 million. The Transplant House is comprised of three stand-alone six-bedroom casitas, each of which is able to accommodate a minimum of 12 people (patient and caregiver) with bedroom and private bath and shared kitchen and dining area. Patients are asked to pay $35 per night for their stay, but the organization covers the cost for those who cannot afford the full or even any of that fee. A major fundraiser in the spring is an interactive dinner presented by the medical center staff at the organization’s community center, which has proven so popular that its run has been extended to two nights and, next year, possibly a third. Major sponsorships are provided by Mayo Clinic in Arizona and Gannen Jewelry, and smaller fundraisers throughout the year are enabled by volunteers and donors.
Snapshot
■■ CFF does not provide care directly, but ■■
works with care centers where families get day-to-day support. In Arizona, they are at Phoenix Children’s Hospital and University of Arizona. In addition to its primary focus on funding research, CFF provides drug assistance to help patients find the best cost and, in some cases, to help defray the cost, and has a public policy component to help ensure people get the best care even if their insurance does not authorize them to go to Phoenix Children’s Hospital.
Determination and focus powered cystic fibrosis-stricken families to achieve what “Big Pharma” didn’t: Since the inception of the national Cystic Fibrosis Foundation in 1955, research it has funded has resulted in stretching the average life span of individuals suffering from CF from five years to 37. Some live even into their 70s. “It’s an exciting time to be part of the Cystic Fibrosis Foundation,” says Nicole Newhouse, executive director of the Arizona chapter of CFF. “We’re closing in on really having a solid handle on how to have a functional cure.” In the 1950s, parents whose children were diagnosed with CF — a pulmonary and pancreatic disease — were told to love them but expect to lose them by the time they hit kindergarten, relates Newhouse. A population of approximately 30,000 cases nationally did not draw research interest from the large pharmaceutical companies, she explains. “The parents started raising money to do the research.” Aiming to raise $100,000, the Arizona chapter will hold its third annual Cycle for Life fundraiser on November 2. Offering a 35-mile and a 65-mile course, starting at the Goodyear Sports Complex, the organization expects more than 200 cyclists to participate. The fun will start with a DJ “to get people pumped up,” and end with lunch and a live band. The routes will wind through Verado and scenic areas of the Sonoran Desert, with uniquely themed rest stops along the way: NASCAR (especially appropriate for the 65-mile course, as it passes by Phoenix International Raceway), baseball, and ParrotHead Paradise (playing Jimmy Buffet songs “Cheeseburger in Paradise” and “Margaritaville,” and manned by volunteers decked out in Hawaiian flowers, serving pickle juice in salt-rimmed shot glasses). Cystic Fibrosis Foundation, Arizona Chapter cff.org/chapters/Arizona
In business to do good for the community, nonprofits enrich the lives of those who contribute as well as those who receive. In Business Magazine showcases two nonprofits in each issue, focusing on their business organization and spotlighting an upcoming fundraising event.
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Photos courtesy of Arizona Transplant House (top), Cystic Fibrosis Foundation (bottom)
Cystic Fibrosis Foundation — Funding Life-Saving Research
www.inbusinessmag.com
October 2013
O n t h e Ag e n D a
A listing of Greater Phoenix business organizations and their events. Visit www.inbusinessmag.com for an expanded monthly calendar of educational, networking and special business events.
Chandler Chamber of Commerce
Arizona International Growth Group
Chandler 100
Grow Globally PHX 2013
Tues., Oct. 15 — 6:00p – 9:00p
Photo courtesy of Jay Mark
The Chandler Chamber of Commerce expects another sell-out this year for its annual celebration highlighting local businesses and their accomplishments. The event, which will be held at the Hilton Phoenix Chandler, was expanded last year to recognize not only the companies with 100 and more employees but also up-and-coming companies. Serving as inspiration for others, businesses will be honored for their contributions toward making a difference in Chandler. Intel, for instance, sponsors numerous community events in addition to being a major employer. Chandler Mayor Jay Tibshraeny will be a featured speaker. Running throughout the night will be a video, made by Chandler-based J2 Media, of all the honorees and their accomplishments. And honorees will receive, along with their award, a locally made gift from di Sciacca, a glass gallery in Chandler. Says Terri Kimble, president and CEO of the Chandler Chamber of Commerce, “The Chandler 100 is one of our signature events, where we honor the top 100 companies who have a large presence here in Chandler, as well as stakeholder businesses. Having some of the most impactful businesses in our city all in one room, on one night, will be very special. I can already feel the excitement in the room!” Registration for members is $50; for non-members, $60. —RaeAnne Marsh Chandler Chamber of Commerce chandlerchamber.com
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Mon., Oct. 7 — 3:00p – 5:00p
Calling it the “Who’s Who and What’s What of Global Business in Phoenix and Arizona,” Arizona International Growth Group presents its fifth annual Grow Globally fair on Monday, Oct. 7, at ASU’s SkySong in Scottsdale. Focused on promoting opportunity for Arizona-based companies to expand into international markets, AZIGG brings together a variety of resources to help them connect to the global business community. The event offers attendees the opportunity to talk with companies that are doing business overseas as well as meet with those that provide a service to enhance a global business experience, such as marketing and sales (Growth Nation), legal services (Snell & Wilmer), education (Thunderbird School of Global Management), government services (U.S. Small Business Association, Arizona District Export Council) and logistics (UPS), among others. Refreshments are included, also international fare, among which are big food hits of previous years — Asian spring rolls, Mexican empanadas and Greek meatballs. AZIGG invites attendees to enjoy a “walking dinner,” taking a plate with them as they network and visit the approximately 50 vendor and company exhibitors. Registration is $30. —RaeAnne Marsh Arizona International Growth Group growthnation.com/azigg
VerdeXchange
VerdeXchange Arizona 2013
Mon., Oct. 7 — 6:00p – 8:30p (VIP Reception) Tues., Oct. 8 — 7:00a – 6:00p (Conference) International opportunity is one part of the program at VerdeXchange Arizona. Broad-ranging topics also include cleantech, transportation, education, water, energy, solar, sustainability and life sciences. The conference is focused on projects and ideas for building business in Arizona, bringing together top regional and global business leaders, including executives from 16 cities across Arizona. Among the more than 50 speakers scheduled are Arizona Governor Jan Brewer, Secretary of State Ken Bennett, Mesa Mayor Scott Smith, U.S. Representative Kyrsten Sinema (D, AZ-9) and U.S. Representative Matt Salmon (R, AZ-5). The VerdeXchange Arizona conference will take place Tuesday at ASU’s SkySong in Scottsdale. The evening preceding the conference, there will be a VIP reception at DIRTT Environmental Solutions, located in Phoenix at 836 E. University Drive. Registration for either event by itself is $125; for both, $225. —RaeAnne Marsh VerdeXchange verdexchange.org
Notable Dates This Month Mon., Oct. 14
Columbus Day
Thurs., Oct. 31
Halloween
Agenda events are submitted by the organizations and are subject to change. Please check with the organization to ensure accuracy. See more events online at www.inbusinessmag.com.
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O n t h e Ag e n d a AHWATUKEE FOOTHILLS CHAMBER OF COMMERCE Public Policy Speaker Series Fri., Oct. 4 Noon – 2:00p
Free Dignity Health Urgent Care, Community Room 4545 E. Chandler Blvd., Phoenix ahwatukeechamber.com
Wake Up Ahwatukee Morning Mixer Tues., Oct. 8 8:00a – 9:00a
Enjoy light breakfast treats and networking. Members: $5; guests: $15 Sam’s Club 700 N. 54th St., Chandler ahwatukeechamber.com
Ahwatukee After 5 Evening Mixer Wed., Oct. 16 5:30p – 7:00p
Bring a raffle prize and showcase your business! Members: $5; guests $15 Von Hanson’s Meats & Spirits 2390 N. Alma School Rd., Chandler ahwatukeechamber.com
ARIZONA CHAMBER OF COMMERCE AND INDUSTRY Eggs and Issues Tues., Oct. 15 7:30a – 9:00a
U.S. Senator Flake will be in attendance to provide an update on his ongoing work at the Capitol on behalf of Arizona businesses and to answer your questions. Members: $40; non-members: $55 Hyatt Regency Downtown Phoenix 122 N. 2nd St., Phoenix azchamber.com
ARIZONA HISPANIC CHAMBER OF COMMERCE Latina Business Enterprises Thurs., Oct. 24 3:30p – 5:30p
“E-Marketing, Marketing Strategies in the Digital Age” workshop. Members: $10; non-members: $20; students: $5 J&G Steakhouse 6000 E. Camelback Rd., Scottsdale (602) 279-1800
ARIZONA INTERNATIONAL GROWTH GROUP Grow Globally PHX 2013 Mon., Oct. 7 3:00p – 5:00p
Who’s who and what’s what of global business in PHX and AZ. $30; at the door: $40
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October 2013
SkySong, Convergence Auditorium 1475 N. Scottsdale Rd., Scottsdale growthnation.com/azigg (See article on page 35.)
ASSOCIATION FOR CORPORATE GROWTH – ARIZONA
ARIZONA SMALL BUSINESS ASSOCIATION
Tues., Oct. 8 7:00a – 9:00a
Private Equity Panel Discussion
Tues., Oct. 8 3:00p – 4:00p
Members: free; non–members: $25 ASBA Business Education Center 4600 E. Washington St., Phoenix asba.com
Speakers are Jerry Henley of Sorenson Capital, Christopher Roden of C3 Capital, D. Mark Dorman of Endeavour Capital and David C. Tedesco of True North Companies. Members and sponsors: $49; nonmembers: $69; after Oct. 5, add $10 Arizona Biltmore Resort & Spa 2400 E. Missouri Ave., Phoenix acg.org
Small Business Marketing Boot Camp
CENTRAL PHOENIX WOMEN
Fast & Curious Speed Networking Event
Wed., Oct. 30 8:00a – 5:00p
Members: $99 for full day, $55 for half day; non–members: $149 for full day, $80 for half–day ASBA Business Education Center 4600 E. Washington St., Phoenix asba.com
ARIZONA TECHNOLOGY COUNCIL Lunch and Learn Tues., Oct. 8 11:30a – 1:00p
“Selling in Today’s Market – Is Your Value Proposition Working?” is presented by QBS Research. Your company business strategy helps define the value you bring to the market. In order to reach your chosen market, that strategy is typically distilled down to the company “Value Proposition”: a short, to-the-point statement that attempts to define “why” a prospect/customer should buy from you. Join us to learn how to better understand the value you bring to the market and how best to position that value to cause competitive separation for your company in 2013 and beyond. Members: free; non–members: $15 Eller College of Management (in the Quicken Loans building) 16425 N. Pima Rd., Scottsdale (602) 343-8324
October Meeting Wed., Oct. 9 7:30a – 9:30a
“The Upside of a Down Economy” with speaker Kimber Lanning, an entrepreneur and economic specialist who works to cultivate strong, vibrant, creative communities and inspire a higher quality of life across the State of Arizona. $75 The Ritz-Carlton Phoenix 2401 E Camelback Rd., Phoenix centralphoenixwomen.org
CHANDLER CHAMBER OF COMMERCE Women’s Council Meeting: SelfDefense Tues., Oct. 1 8:00a – 9:00a
Mike Hayashi, M.Ed., will speak about self–defense in a program titled “Take Control Self-Defense: Safety & Security for Women.” The Women’s Council was created by women to promote personal and professional development programs. Free Chandler Chamber of Commerce 25 S. Arizona Pl., Chandler chandlerchamber.com
Lunch and Learn
East Valley Business Expo
“Growing the Bottom Line – Maximizing Government Contracts to Grow Revenue and Absorb Costs” is presented by BDO. Attendees will gain an overall view of how to successfully obtain government contracts as well as how to mitigate existing contract requirements while maximizing cost recovery. The content is geared toward Phoenix executives interested in learning some best practices in expanding the current organization into government contracts as well as those executives currently executing contracts. Members: free; non–members: $15 SkySong 1475 N. Scottsdale Rd., Scottsdale (602) 343-8324
Arizona’s Business Show and Networking Event. Free with a business card Mesa Convention Center 201 N. Center St., Mesa chandlerchamber.com
Thurs., Oct. 24 11:30a – 1:00p
Wed., Oct. 2 2:00p – 6:00p
Ribbon Cutting: State Farm – Tara Poaletti Wed., Oct. 2 4:30p – 5:30p
Free State Farm 300 N. Gila Springs Blvd., Chandler chandlerchamber.com
Networking @ 9 Fri., Oct. 4 8:45a – 10:30a
Topic for October is “Belief Systems.” Free; registration requested Chandler Chamber of Commerce 25 S. Arizona Pl., Chandler chandlerchamber.com
Ribbon Cutting – ClearCall Solutions Fri., Oct. 4 4:00p – 6:30p
Free ClearCall Solutions 2150 E. Germann Rd., Chandler chandlerchamber.com
Wake-Up Chandler Wed., Oct. 9 7:30a – 9:00a
Wake–Up Chandler is a networking event. Businesses should bring brochures and promotional items and be prepared to give a 30-second commercial about their company. Members: $5; guests $15 Amtrust Bank 4979 S. Alma School Rd., Chandler chandlerchamber.com
Chandler 100 Tues., Oct. 15 6:00p – 9:00p
The Chandler Chamber of Commerce recognizes the top 100 businesses at this event. Members: $50; non-members: $60 Hilton Phoenix Chandler 2929 W Frye Rd., Chandler chandlerchamber.com (See article on page 35.)
Business after Business Thurs., Oct. 17 5:00p – 7:00p
Evening mixer. Members also have a chance to win the “Chamber Cash Pot!” sponsored by Thorobred Chevrolet. Members: $5; guests $15 Chandler Fashion Center 3111 W. Chandler Blvd., Chandler chandlerchamber.com
Workshop: Loan Clinic Thurs., Oct. 17 3:00p – 5:00p
$25; veterans: free with coupon from vatsfastlaunch.org Chandler Chamber of Commerce 25 S. Arizona Pl., Chandler chandlerchamber.com
Chandler Chamber Lunch Club Mon., Oct. 21 11:30a – 1:00p
Businesses will have a chance to exchange business cards, as well as provide a gift from their business to use as a door prize. Free; $10 for lunch and drink Café Cornucopia 4959 W. Ray Rd., Chandler chandlerchamber.com
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Please confirm, as dates & times are subject to change.
Success Dynamics Leads Group Mondays, Oct. 7, 14, 21, 28 7:30a – 8:30a
Each member is given the opportunity to give the group information on his or her company, talk about upcoming events and sales that he or she is running. First 2 visits are free Brunchies 17 E. Boston St., Chandler chandlerchamber.com
Chandler Business Connection Leads Group
Tuesdays, Oct. 1, 8, 15, 22, 29 7:30a – 8:30a
Each member is given the opportunity to give the group information on his or her company, talk about upcoming events and sales that he or she is running. First 2 visits are free BLD 1920 W. Germann Rd., Chandler chandlerchamber.com
The Sun Lakes Networking Group
Wednesdays, Oct. 2, 9, 16, 23, 30 11:30a – 1:00p
Our mission of this group is to develop trustworthy relationships in the Sun Lakes community while promoting ethical business and returning to the basics of doing business with a handshake. First 2 visits are free Pecan Grove Restaurant 4960 S. Alma School Rd., Chandler chandlerchamber.com
Go-Getters Leads Group
Thursdays, Oct. 3, 10, 17, 24, 31 7:30a – 8:30a
First 2 visits are free Mimi’s Cafe 2800 W. Chandler Blvd., Chandler chandlerchamber.com
The Friday Cafe Leads Group Fridays, Oct. 4, 11, 18, 25 7:30a – 8:30a
Each member is given the opportunity to give the group information on his or her company, talk about upcoming events and sales that he or she is running. First 2 visits are free Chompie’s Delicatessen Restaurant 3481 W. Frye Rd., Chandler chandlerchamber.com
ECONOMIC CLUB OF PHOENIX October 2013 Luncheon Thurs., Oct. 3 11:30a – 1::30p
The Economic Club of Phoenix presents Bruce Broussard, president and chief executive officer of Humana. Networking session available prior to final registration at 11:45 a.m. $75, advance registration required Westin Kierland Resort 6902 E. Greenway Pkwy., Scottsdale econclubphx.org
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Scottsdale Area Chamber of Commerce
GLENDALE CHAMBER OF COMMERCE
Arizona and Canada – Building Business Bridges
S.C.O.R.E. Appointments
Mondays, Oct. 7, 21, 28 9:00a – noon
Meet with a SCORE consultant. Free Glendale Chamber of Commerce 7105 N. 59th Ave., Glendale (602) 745-7250
Wed., Oct. 30 — 11:30a – 1:00p
GREATER PHOENIX CHAMBER OF COMMERCE Professional Women’s Alliance Tues., Oct. 8 11:00a – 1:00p
Speaker is Jessica Hagy, author of How to be Interesting and Indexed. Free presentation. Lunch for members: $15; non-members: $25 National Bank of Arizona Conference Center 6001 N. 24th St., Phoenix phoenixchamber.com
26th Annual ATHENA Awards Luncheon Sun., Oct. 15 10:45a – 1:30p
The ATHENA Awards honors women who demonstrate leadership, excel professionally, give back to their communities and mentor the next generation of outstanding leaders. Members: $75; non-members: $85 Arizona Biltmore, McArthur Ballroom 2400 E. Missouri Ave., Phoenix phoenixchamber.com
MESA CHAMBER OF COMMERCE Downtown Business Roundtable Wed., Oct., 9 7:30a – 9:00a
Join us for a free breakfast and open forum discussion for downtown business owners with Mayor Scott Smith and Councilmember Chris Glover. Space is limited. Free Il Vinaio Restaurant 270 W. Main St., Mesa (480) 969-1307
Taste of Mesa – Eastmark Tues., Oct. 15 5:30p – 7:30p
Join us at Eastmark for a Dia de los Muertos party - a true Mexican celebration with food, drinks, live music and entertainment as well as trolley tours of the Eastmark neighborhoods/ builder models. Members: $15; non-members: $25 Eastmark 10100 E. Ray Rd., Mesa mesachamber.org
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With bilateral trade having evolved to 3.9 annual partnerships — excluding those in the tourism industry — Canada now has a tremendous economic impact on Arizona. The Scottsdale Area Chamber of Commerce presents this discussion of opportunities for commerce with Canada and Glenn Williamson invites all members of the business community to attend and learn how their business can benefit from a Canadian relationship. A luncheon event, it will be held at Maggiano’s Little Italy at the southeast corner of Frank Lloyd Wright Blvd. and Scottsdale Road. Speakers will be Glenn Williamson, founder and CEO of the Eric Nielsen Canada Arizona Business Council, and Eric Nielsen, director of U.S. Commercial Service for Arizona, which is part of the International Trade Administration of the U.S. Department of Commerce. Williamson founded the Canada Arizona Business Council to focus on encouraging bilateral trade and foreign investment between Canada and the State of Arizona. CABC is a private-sector group and is sanctioned by the Canadian Government and the State of Arizona to work toward this goal. Williamson has more than 30 years of executive experience as an entrepreneur in finance and operations of high-level companies, with his strengths extending to advanced capital formation, marketing and positioning. His innate ability has been demonstrated in his record of taking companies from inception to maturity by assembling and managing teams of highly qualified individuals who provide the innovation, experience and expertise needed to build a successful company. Nielsen was appointed director of the Arizona U.S. Export Assistance Center, responsible for operations in Phoenix, Scottsdale and Tucson. In Arizona, Nielsen manages a team of five international trade specialists and coordinates partnerships with a wide variety of economic development organizations. He also serves as the Arizona District Export Council’s executive secretary. In the early 1990s, Nielsen spent four years with the Canadian Consulate General in Los Angeles, counseling companies in Southern California and Arizona about investing in Canada through joint ventures and alliances. Registration is $25 for members of the Scottsdale Area Chamber of Commerce, and $45 for non-members; at the door, the price is an additional $5. —RaeAnne Marsh Scottsdale Area Chamber of Commerce scottsdalechamber.com
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O n t h e Ag e n d a Mountain States Employers Council Legal Issues in Managing Employees Thurs., Oct. 3 8:30a – 4:00p
Mountain States Employers Council presents this seminar for supervisors and managers. Employment law claims comprise approximately 15 percent of all lawsuits filed and are also more likely to go to trial than any other type of claim. Yet human resources, managers and supervisors understandably find that the number of legal issues they need to be aware of can be overwhelming. Courts have weighed in and stated that the failure to train managers and supervisors on basic employment law issues is an “extraordinary mistake.” Members: $235; non-members: $280 Mountain States Employers Council 7975 N. Hayden Rd., Scottsdale msec.org
HR Metrics and Analytics: Focusing on What Is Important Wed., Oct. 9 8:30a – 4:00p
Mountain States Employers Council presents this class for human resources professionals who don’t know what or how to measure, or want to expand their skills. Understanding and using critical HR metrics is an essential competency for the HR professional. To provide support as a true business partner, HR must have the ability to communicate with top management using hard data that impacts the bottom line. Members: $175; non-members: $210 Mountain States Employers Council 7975 N. Hayden Rd., Scottsdale msec.org
PHR/SPHR Certification Study Program Oct. 17 – 21 8:30a – 4:30p
Our experienced employment attorneys and HR professionals have all achieved their PHR or SPHR certification, and will share their knowledge of the HRCI exams. You will work with a variety of professional instructors who are all subject-matter experts and use an assortment of different techniques to enhance your learning experience. Members: $1,395; non-members: $1,595 Mountain States Employers Council 7975 N. Hayden Rd., Scottsdale msec.org
Performance Documentation Skills for Supervisors Wed., Oct. 30 1:00p – 4:30p
The human resources mantra to managers and supervisors is to “document, document, document.” But do your managers and supervisor know how, when and what to document? This session will provide managers and supervisors with the skills to effectively
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October 2013
document employee performance. Participants will learn a simple performance documentation process and understand its importance in preventing legal claims. Using proven techniques, participants will practice writing and maintaining job-related performance documentation. The seminar will focus on how the current legal climate affects supervision, as well as the “how-tos” of documenting employee actions. Members: $125; non-members: $150 Mountain States Employers Council 7975 N. Hayden Rd., Scottsdale msec.org
Performance Management: Setting the Stage for Success Wed., Oct. 30 8:30a – noon
This class gives supervisors and managers the skills to manage employee performance as an ongoing process and ties the supervisory role to employee and organizational success. Participants learn the essential skills needed to set clear expectations, document key performance behaviors and results, as well as provide ongoing coaching and feedback to employees. Members: $125; non-members: $150 Mountain States Employers Council 7975 N. Hayden Rd., Scottsdale msec.org
present it to your server on the day of the fundraiser and 25 percent of your tab will go to support Make-A-Wish Arizona! And please SHARE the flyer or the download link with your friends and colleagues!! Blue Agave Mexican Cantina 7000 E. Mayo Blvd., Phoenix northphoenixchamber.com
Open House
Wed., Oct. 2 5:30p – 7:30p
Free Johnson Bank 1902 W. Parkside Ln., Phoenix, Liz Ariany Tepeyac, (602) 482-3344.
Business Resource and Networking Luncheon Tues., Oct. 8 11:30a – 1:30p
“Customer Loyalty” is presented by Gordon Parkman of Achieve Results Consulting, LLC. Members: $20; guests: $25; after Oct. 4: $30 Stone Creek Golf Club 4435 E. Paradise Village Pkwy S., Phoenix northphoenixchamber.com
Mix & Mingle Networking Event Thurs., Oct. 17 5:30p – 7:30p
NATIONAL ASSOCIATION OF WOMEN BUSINESS OWNERS
NPCC/NetworkingPhoenix Passport members: free; guests: $10 in advance, $15 at door Upper Crust Pizza & Wine Bar 20235 N. Cave Creek Rd., Phoenix northphoenixchamber.com
NAWBO University
Business Networking Luncheon
Wed., Oct. 9 9:30a – 11:00a
Martha Knight presents “30 Days to a Healthier You.” Members: free; non-members: $30 Phoenix Country Club 2901 N. 7th St., Phoenix nawbophx.org
Luncheon
Wed., Oct. 9 10:45a – 1:00p
Former White House Physician Connie Mariano shares her journey to the White House: the triumphs as well as the obstacles, the pitfalls and, most importantly, the lessons along the way. Members: $38; non-members: $48; must RSVP by Oct. 6 Phoenix Country Club 2901 N. 7th St., Phoenix nawbophx.org
NORTH PHOENIX CHAMBER OF COMMERCE Blue Agave Mexican Cantina Fundraiser for Make-A-Wish Arizona Sun. – Sat., Oct. 1 – 7 11:00a – 9:00p (Sun. – Thurs.) 11:00a – 10:00p (Fri. – Sat.)
Help raise funds for Make-A-Wish Arizona by dining at Blue Agave Mexican Cantina! Simply download the flyer at bit.ly/187Vz9f,
Sun., Oct. 22 11:30a – 1:30p
Luncheon sponsor: C & R Tire and Automotive Members: $20; guests: $25; after Oct. 18: $30 Location TBA northphoenixchamber.com
NORTH SCOTTSDALE CHAMBER OF COMMERCE 7th Annual Small Business Trade Show Wed., Oct. 30 4:00p – 7:00p
North Scottsdale Chamber of Commerce annual business trade show, followed by anniversary party at Salt in Scottsdale Quarter. Free to attend North Scottsdale Chamber of Commerce 14301 N. 87th St., Scottsdale Molly Brown, (480) 889-8987
ORGANIZATION OF WOMEN IN INTERNATIONAL TRADE – PHOENIX Monthly Meeting Thurs., Oct. 3 8:30a – 10:30a
“Challenges All Trade Compliance Professionals Face: Minimizing YOUR
Exposure, Liability & Risk” — What are the key qualifications, qualities and skills necessary to do the job and what are the impact & implications of not having the right person in the position? This engaging and interactive program tackles a tough topic that is not often addressed. It lays the essential groundwork and covers critical requirements, responsibilities, challenges and situations that you will likely face (and may have already faced) in the real world. This unique 90-minute case study-based presentation with Q&A will equip you with the strategies and tools you need to help you navigate the often complex (and potentially dangerous) waters of trade compliance. Members: $25; non-members: $35 Maricopa Association of Governments 302 N. 1st St., Phoenix owitphoenix.org
PEORIA CHAMBER OF COMMERCE How to Optimize Your Business Listing for Google Local Thurs., Oct. 3 5:30p – 7:30p
Did you know that more than 113 million people today use their mobile devices to seek out local business information? And that 78 percent of these users make local purchases based upon their searches? Here are some more interesting facts of people searching Google for services in the Peoria area. Free Peoria Chamber of Commerce 16165 N. 83rd Ave., Peoria (623) 979-3601
Did You Know? Sun., Oct. 15 4:30p – 6:30p
All employers of any size, with or without group coverage now, are required to distribute a Model Notice to Employees of Coverage Options to employees by Oct 1, 2013, regarding the availability of the new Arizona Health Insurance Marketplace / Exchange under ACA. Free Peoria Chamber of Commerce 16165 N. 83rd Ave., Peoria peoriachamber.com
SCOTTSDALE AREA CHAMBER OF COMMERCE Friday Forum
Fri., Oct. 4 8:00a – 9:30a
“Leverage LinkedIn for Business: Part 2” is presented by Valerie from eSpark Marketing, who will increase your knowledge and LinkedIn aptitude! This workshop is going to be about real-life practice and the “how-tos” of LinkedIn, so you must bring a laptop or tablet with your profile already loaded. Free Scottsdale Area Chamber 7501 E. McCormick Pkwy., Scottsdale scottsdalechamber.com
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Please confirm, as dates & times are subject to change.
WEST VALLEY WOMEN
Newsmaker Luncheon
Arizona and Canada – Building Business Bridges
Wed., Oct. 11 11:30a – 1:00p
Wed., Oct. 30 11:30a – 1:00p
Glenn Williamson, founder and CEO of Canada Arizona Business Council, and Eric Nielsen, director of U.S. Commercial Service for Arizona, will speak on how local businesses can benefit from a Canadian relationship. Members: $25; non-members: $45; at the door, add $5 Maggiano’s Little Italy 16405 N. Scottsdale Rd., Scottsdale Nikki Hoffman, (480) 355-2712 (See article on page 37.)
Lana Mook, mayor of the City of El Mirage, will address the future direction of the community. $15 Anacapa Restaurant 22135 N. Mission Dr., Sun City West surpriseregionalchamber.com
TEMPE CHAMBER OF COMMERCE
Social Media Workshop Wed., Oct. 4 1:30p – 3:30p
This is a business education seminar for those interested in furthering their social media knowledge. Members: free; non-members: $20 Windmill Inn & Suites 12545 W. Bell Rd., Surprise surpriseregionalchamber.com
Mon., Oct. 16 11:30a – 1:30p
Business Owners Forum Wed., Oct. 24 8:00a – 9:00a
“Woman of the Year” Tues., Oct. 1 11:30a – 1:00p
$35 Arizona Broadway Theatre 7701 W. Paradise Ln., Peoria westvalleywomen.org
Recruit & Retain Valuable Employees – In the Age of Healthcare Reform
WOMEN OF SCOTTSDALE 15th Anniversary Celebration Luncheon
Military Affairs Luncheon Be a part of the Military Affairs Committee milestone celebration! Free Heidi’s Events and Catering 2095 W. 15th St., Tempe courtneymcintyre@tempechamber.org
SURPRISE REGIONAL CHAMBER OF COMMERCE
This conference is focused on building business in Arizona. $125 SkySong 1475 N. Scottsdale Rd., Scottsdale verdexchange.org (See article on page 35.)
Breakfast and discussions about current issues and business-related topics. Free Sunshine’s Motor City Café 7425 S. Harl Ave., Tempe tempechamber.org
Fri., Oct. 18 11:30a – 1:00p
National Bank of Arizona is the sponsor. Scottsdale Airpark News is the publication partner. Rolf ’s Salons & Spas is the favors partner. $35; reservations required Westin Kierland Resort & Spa 6902 E. Greenway Pkwy., Scottsdale www.womenofscottsdale.org
OTHER BUSINESS EVENTS VerdeXchange Arizona 2013
Wed., Oct. 16 9:30a – 11:30a City of Peoria
The City of Peoria offers this interactive workshop to help business owners prepare for new laws in 2014, Healthcare Reform requirements and employee benefits. Speakers are Tracy Morrissey, president and CEO for HR Choice; Jarred Elias, president of Precision Payroll of America – Arizona; Joyce Morningstar, Ph.D., a senior wealth manager at Dynamic Wealth Advisors; and Allan Zee, founder and managing director of Argeus Benefits Group. Free Point of View room 9875 N. 85th Ave., Peoria debbie.pearson@peoriaaz.gov
Tues., Oct. 8 7:00a – 6:00p VerdeXchange
Cross-training for your business
Special Sections
Events Online
Email Magazine
Your company deserves to be fit. Performance Marketing: Print. Online. Email. Social Media. Events. (480) 588-9505
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Focus
Our Subject In-Depth
The Changing Dynamics of Negotiation Technology adds new wrinkles to the time-honored process by RaeAnne Marsh “The advent of greater use of technology and social media has changed the way businesses are going about negotiating,” says attorney John DeWulf, of Roshka DeWulf & Patten. Parties are better able to negotiate thanks to technology that enables them to access more information not just about the subject matter (i.e., market trends) but also about the other side of the negotiation (including company history and the lead negotiator’s practices). The ease the Internet has brought to research is only one factor in this. “Social media has changed the landscape,” DeWulf says, pointing out that people lower their guard on social media. Parties can easily gain information they might not otherwise have at all. “Part of what you’re trying to do is solve a problem or find a compromise. Through social media, you gain a sense of the other side’s objectives, perceptions or values,” he explains. The point is not necessarily to gain the upper hand, although of course businesses enter into a negotiation because each party is looking to gain something. Learning more about the other side’s value system, business goals and culture can facilitate reaching a desired outcome by finding common ground between the parties. While technology has brought advances in research capabilities, advances in electronic technology itself is causing loss in some human aspects of communication — and communication is what negotiation is founded on. Electronic devices reduce the opportunity to observe nuances of body language or inflections in the voice. Skype and teleconferencing overcome some of the deficiencies of email or text communication, but are still less efficient than in-person discussion. Says DeWulf, “You don’t get a feel for the person or the environment. It’s a narrow picture.” Marty Latz, founder of Latz Negotiation Institute and an adjunct professor at the Sandra Day O’Connor College of Law at ASU, points out another consideration: “Someone may have a pleasant phone personality but come across condescending in email.” While noting that remote communication has been with us for a long time — phone,
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fax — Latz observes, “It’s easier to say ‘no’ the more distant you are.” Which is why companies will spend thousands of dollars to send a team around the world for a one-hour meeting. “It’s more difficult to create rapport in an email or on the phone.” He suggests, however, that businesses take into account how they communicate at each step of the negotiation; once rapport has been established early in the process, electronic communication may work fine in later stages. In fact, over-reliance on electronic communication may be what lies behind another trend DeWulf has seen in his three decades of practicing law. “People in business are not as educated or trained in the interpersonal skills that older generations had,” he observes. Into this breach has grown the field of alternative dispute resolution. This involves a third party, who can avoid emotional issues or different perceptions to help the parties get past an impasse. Alternative dispute resolution can be mediation — a non-binding negotiation — or arbitration. The field is so large now that it is far more than one-size-fits-all. The choice of the individual to perform the resolution may be made based on objective factors, such as technical expertise or knowledge of subject, or
subjective factors, such as demeanor. Alternatively, a businessperson can use social media — blogs and tweets in particular — and the Internet to identify and follow people who are experts, and learn from them. “Before, you had to attend a seminar and pay a substantial amount of money,” Latz says. And negotiation software is available that businesses can use to facilitate online meetings and structure their negotiation efforts as a team rather than a silo — however far apart the members are geographically — to create a plan that ensures the team is strategically accomplishing corporate objectives. The level of consistency that creates will enhance businesses’ ability to strategically negotiate. “The most important element in any negotiation,” Latz says, “is the Plan B — what you do if you don’t do this deal. The stronger your Plan B, the stronger your leverage.” But that is relative to the other side’s Plan B. “It’s not only, ‘What are you going to do if you don’t do a deal with the other side?’ but ‘What are they going to do if they don’t do a deal with you?’ The ability to create a better Plan B or to find out the other side’s plan is going to have a huge impact on the negotiation.” Latz Negotiation Institute negotiationinstitute.com Roshka DeWulf & Patten rdp-law.com
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ENTERPRISE
Risks & Rewards
Leadership Control vs. Business Growth Tight control may be holding back growth by Doug and Polly White Most entrepreneurs want to grow their companies. However, the road to success is often a bumpy one. While many businesses start quickly growing revenues and profits, they frequently plateau well short of their potential. This often leaves the owner confounded regarding why his or her once-thriving enterprise has fallen on hard times. It can be a frustrating conundrum. Research shows that the constraint to growth is generally not capital. With a good business plan and a lot of persistence, the businessperson can obtain financing. The problem isn’t usually the lack of good products or services. Successful entrepreneurs know how to deliver value. There is always market opportunity — new geographies, new market segments and new product categories to exploit. No, the thing that most often limits the growth of small businesses is the inability or unwillingness of the owner to let go. To grow beyond the start-up phase, the principal must delegate the primary work of the business to others. Some entrepreneurs just simply don’t want to do that. For example, we know of an outstanding interior house painter, an artist really. He loves to do complex faux finishes in higher-end homes. His work is magnificent. It has won awards. He feels that no one else
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possesses his skills, and, therefore, doesn’t want to delegate the painting to others. That’s fine, but if he insists on spending his days with a paintbrush in his hand, growth will be limited. He’ll soon run out of capacity. If the principal can delegate the primary work of the business to others, the business will continue to thrive. Eventually, sustaining further growth will depend on the principal’s ability to relinquish dayto-day decision-making responsibility and the management of frontline workers. ServPro is a franchise business that cleans up and restores buildings after fire and water damage. Andy Bahen, the owner of one of the ten largest ServPro franchises in the country, confessed, “It took my wife seven years to get me ‘off the truck,’ and it was the hardest thing I ever did — not to personally oversee every job.” When Bahen insisted on managing every job himself, the size of the company was constrained by his capacity. Growth stalled at fewer than ten crews; Bahen couldn’t visit more jobs in a day. Once he let go and allowed his supervisors to manage the jobs, the constraint was removed and the company grew exponentially. inbusine ssmag.com
Successful delegation requires three things: The right managers. Delegating before the right people are in place is a recipe for disaster. Does the business have the right people internally? Will the owner need to go outside of the firm to find the management talent needed? It’s a “make versus buy” decision, and these choices can be excruciatingly difficult. Layering or even dismissing loyal employees who simply do not have the skills to step into management roles can be difficult, but successful entrepreneurs will make the hard choices. We have a bias for promoting from within. It is good for morale. It can help with retention and the new manager understands the company in a way that no outsider could. He or she is already imbued with the company culture. However, while we have a bias for promoting from within, we also have a bias against setting people up to fail. If a business owner is going to promote from within, he or she will have to invest in helping those people years in advance to develop the skills they need to be good managers. Documented processes. It’s not sexy and no one will pay a nickel more because a business has well-documented processes. Even so, good process documentation is the best way to communicate to employees how things are to be done when the owner isn’t there. There are three reasons having well-documented processes is important: ■■ It ensures that things are done consistently across the organization and over time. When the business is small, the principal can ensure that things are done the same way each time because he or she is there to monitor the work. As the business grows, that’s no longer possible. Good process documentation ensures that employees know how to do the work. ■■ It serves as the basis for continuous improvement. If each employee does things differently and one discovers a better way to do the work, it will be difficult or impossible to spread the new knowledge to others. On the other hand, if all employees are following the same documented process, changing the way things are done and capturing the benefit across the organization is straightforward. ■■ It provides consistent training for new employees. Welldocumented processes become training manuals for new employees, ensuring their onboarding is consistent and nothing is inadvertently overlooked. If the owner insists on making every decision, the business will plateau — growth will stop. To break the bottleneck, decision-making must be delegated. For many, this is more difficult than allowing others to do the primary work of the business. The reason: Delegating decision making to managers means giving up a measure of control, and that’s scary for entrepreneurs. It should be. The only thing worse than not delegating when it’s needed is delegating before constructing the proper infrastructure. Doing so can be disastrous. The business can veer off course without the owner knowing it. Stories abound of companies that failed because the owner trusted the wrong people and/or the proper systems were not in place to support delegation. Take the case of a company that almost had to file for bankruptcy after the owner delegated responsibility to an office manager who was not ready to accept it. There were no documented processes to tell the office manager how to perform her duties. No metrics existed to let the owner know if things got off track. After making a number of mistakes, the office manager attempted a cover-up. By the time the owner discovered this, the business was perilously close to the brink. inbusine ssmag.com
Robust metrics. This is how business owners know what is going on in the bowels of the business without being there. It allows them to sleep at night. Financial statements are an important part of these metrics, but they are insufficient by themselves. By the time problems show up in the P&L, the damage is often already done. What’s needed are operational metrics that are reported on a daily, weekly and monthly basis. Consider a business that fulfills orders by shipping product to its customers. Orders start to go out late. Will this problem be reflected in the P&L? Sure, eventually the P&L will show a decline in sales. Unfortunately, by this time, it’s too late. The customers are gone. A daily or even weekly report that shows the percentage of orders shipped on time would allow the principal to correct the issue before customers leave. With this infrastructure in place, the owner can safely let go and the business can grow. Whitestone Partners whitestonepartnersinc.com
Doug and Polly White, syndicated columnists and co-authors of Let Go to GROW: Why Some Businesses Thrive and Others Fail to Reach Their Potential, are principals at Whitestone Partners, a management consulting firm that helps small businesses grow profitably.
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Education
Helping Raise the Bar on ... INTERNET MARKETING
Base Website Design on Your Sales Process A well-planned website puts you closer to the close by Thomas Beyer If you want your website to generate new business opportunities, you need to make sure it is designed to attract leads while it is guiding your prospect through the sales cycle. If you’re an e-commerce company, like Amazon or e-Bay, specifically focused on selling your product or service on the Internet, your site was probably designed to move a prospect through the buying process. If you’re not, however, but you’re spending resources to generate leads, your website should be guiding its visitors toward a sale. Remember, you’re trying to shorten the sales cycle. Help the prospect pick you! This article begins a three-part series about getting your business found and creating sales on the Internet. The first step is making sure your website generates qualified leads that result in sales. This can be achieved easily if you work with the site designer to address the critical aspects. The site designer should be asking for information in three areas. One is an explanation of the sales cycle and the buying process, and what information the prospect requires to make a decision. The second is what is motivating the visit to your site and how the prospects arrive there. The third is what point in the cycle it is better to engage human interaction, and what the impact is of misinterpreted information. And you need to ask the site designer what the website cannot do. By understanding the limitations of a website, you can better discuss with the designer how to achieve the results you are after. Once you are armed with the answers, you can break down your sales cycle.
Abandoned Searches and Low Conversion Rates Marketing experts tell us that many sales stall because we bypass steps in the sales process. When a website doesn’t convert a visit to a sale, chances are the site’s flow has interrupted the sales process. To design your site properly, you’ll want to identify each step in your sales cycle. Below is a generic cycle. Need/Issue , Awareness , Information gathering , Discussion/Meeting , Confirm Issue/Need , Create & Present Solution , Ask for the Sale Visit your site and check off each step in this sales process. At each step, you need to consider how it flows, whether that step moves easily to the next phase, and whether the key buying issues are made clear. To sell a technical product, for example, one step of the sales cycle might address “features & benefits” and be immediately followed by “technical specifications” as the next step. To make the website conform to this flow, you might place an internal link at the end of the “features and benefits” page for “technical specs … click here”; this link will guide the prospect to the next phase of the cycle.
Meet Expectations Next, you want to assess why a prospect is visiting your site. Is it due to a traffic-building campaign, expert SEO, blogging, social media, telemarketing, cold calling, webinars, referral, email marketing, etc? When you know why a prospect is at your site, you’ll have a good idea of where he or she is in the sales cycle. This is a crucial determination because each of those reasons comes with its own set of preconceived
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expectations. If you don’t deliver on those expectations within one to two clicks, you’ll lose that prospect. However, if you identify why the prospect is at your site while directing him or her to pages that complement the logical buying process, you will be much closer to closing a sale.
Closing the Sale In theory, sales-cycle-based website design sounds logical, but it’s also challenging to determine when a prospect requires human interaction. Again, it all depends on where the prospect is in the sales process. The “Contact Us” and “FAQs” pages and “Live Online Chats” are helpful addons that encourage the prospect to communicate where he or she is in the cycle. As my earlier example of the technical product sales shows, you can prompt calls to action within properly designed pages based on the cycle phase. Determining when and where to incorporate human interaction and how to manage it must be carefully considered because, in the end, nothing beats an expert salesperson’s ability to listen to a potential customer and pick up on buying signs. How many deals have been salvaged by a salesperson who acted on the defining comment by the prospect? You might even consider a policy of an outbound telephone call when a visitor performs three or four clicks into the site and then abandons the search.
Know Your Site’s Limitations within the Cycle Perhaps one of the most critical reasons to design your website with your sales cycle in mind is it helps you see what a website cannot do for your prospect. If you’re trying to make the site do more than it truly can, you run the risk of either overselling or convoluting your message and then losing the sale. Knowing when and how to close the sale has an impact on website design and the information dissemination flow. Know your limits. So, now that your website has been designed for lead qualifying and shortening the sales cycle, how do you get your business found on the Internet? We’ll discuss that in November. Gogiro Phoenix Central gogiro.com/phoenixcentral
Thomas Beyer is president of Gogiro Phoenix Central, located in the Deer Valley Airpark. Gogiro specializes in digital marketing strategies via site design, SEO, traffic building, email and social marketing campaigns, and reputation management.
Internet Marketing
The Education Series
q October: Base Website Design on Your Sales Process q November: Visitors Wanted - Get Your Website Found on the Internet q December: Explode Sales with Targeted Online Marketing To reference published segments of this series, please access the archived “How-to” articles on the In Business Magazine website, www.inbuisnessmag.com.
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Make a big career move without leaving Phoenix. Your next big move could be right here in Phoenix. At University of Phoenix, we shape our curriculum around the skills employers are actively seeking, so your studies can prepare you for a brighter future. Get started at our local campus and see how far you can go.
Visit phoenix.edu/phoenix or call us at 602.557.2000
University of Phoenix is accredited by The Higher Learning Commission and is a member of the North Central Association (ncahlc.org). The University’s Central Administration is located at 1625 W. Fountainhead Pkwy., Tempe, AZ 85282. Online Campus: 3157 E. Elwood St., Phoenix, AZ 85034. Š 2013 University of Phoenix, Inc. All rights reserved. | REG-02345
We Value What We Own
Range Rover Sport: All New for 2014 A true weight-loss program makes the allnew Range Rover Sport Supercharged a notable option for the SUV enthusiast who is looking for best in sports accoutrement and performance. Going to an all-aluminum body structure, new this year, results in a loss of 800 pounds, adding to the overall performance and stability of this model. The 5.0-liter LR-V8 supercharged engine does 0-60 in 5.0 seconds with 510 horsepower and 461 lb/ft of torque. Tested everywhere, from the Nürburgring in Germany to the rocky landscape of Moab, Utah, this piece of machinery is proving to be a true model of performance, safety and comfort. The all-new suspension system provides for dynamic handling in all climates. The Terrain Response 2 automatically adapts the settings to the terrain so that performance is never an issue. Technological innovations include a five-camera surround digital camera system that provides for a nearly 360-degree view on the touch screen. From parallel parking to entering intersections, this safety feature is a welcomed tool for drivers. A contemporary sports interior marries comfort with the finest design elements and features that impress all who travel in this vehicle. The performance-enhanced driving position; smaller, thicker steering wheel; and the bolsters on the front seats perfectly position the driver to enjoy the ride. The full-sized sun roof ’s tinted glass bathes the interior with plenty of natural light and even opens to offer panoramic views. The Meridian™ Signature Audio Package is a premium 1700-watt system, with 23 loudspeakers that provide for a “realistic three-dimensional listening experience,” according to the car maker. The Hard Disk 2014 Range Rover Sport Supercharged Drive-based satellite system features enhanced on- and off-road capabilities and a navigation City MPG . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 system that will take passengers of this exciting Hwy MPG. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 SUV anywhere. 0-60 MPH. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.0 sec
®
Transmission. . . . . . . . . . . . . . . 8-speed automatic MSRP. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $79,995
by Mike Hunter
Watch What You Ask For Time is of the essence, so finding the right watch is worth every minute. While the smart phone, the computer, our desk phones and even the car dashboard all tell time, it is a stunning wrist watch that still stands the test of time. Here are a few latest models available locally for the most discerning among us.
Bell & Ross BR 01-94 Carbon 42mm
An aviation watch designed for professionals, the BR 01 is a genuine asset. To create the BR 01 aviation watch, the designers took their inspiration from aeronautical instrumentation, the ultimate reference point for legibility and reliability. $6,700. Hyde Park Jewelers 2502 E. Camelback Rd., Phoenix (602) 667-3541 • hydeparkjewelers.com
OMEGA Seamaster Diver ETNZ Limited Edition
The OMEGA Seamaster Diver ETNZ Limited Edition has a robust 44-mm polished and brushed stainless steel case with a matt black ceramic bezel ring. It is presented on a black rubber strap and is delivered with a stainless steel extendable divers’ bracelet. $6,600. Hamra Jewelers 15435 N. Scottsdale Rd., Scottsdale (480) 946-5110 • hamra.com
TechnoMarine Cruise White Vision II
An ideal companion for lively evenings along the French Riviera, any model in the Cruise White Vision collection is perfectly suitable for energetic beach parties and luxe sporting events alike. This 45-mm chronograph features a stainless steel case with green O-ring on the white ceramic top ring bezel, a white cover and interchangeable silicone strap options. $650. Tourneau 7014 E Camelback Rd., Scottsdale (480) 429-2304 • tourneau.com
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Photos courtesy of Land Rover (left), Bell & Ross, OMEGA, TechnoMarine (right, top to bottom)
ASSETS
Imagine a place that will engage your creativity and enhance your education and sense of cultural community. A place where you can explore a collection of over 17,000 works and experience new exhibitions that are sure to tenlighten your soul. Connect with Phoenix Art Museum—it’s a relationship like no other.
EXPLORE ENGAGE ENJOY The Cape | September 15 – February 19 Rufino Tamayo: Master Printmaker | September 21 – January 12 Xul Solar and Jorge Luis Borges: The Art of Friendship | October 2 – December 29 INFOCUS PhotoBid | October 5 – October 18 The West Select Exhibition and Sale | November 10 – December 31 Read My Pins: The Madeleine Albright Collection | November 23 – April 20 See, Hear, Feel: The Photographs of Debra Bloomfield and Christopher Churchill | December 7 – March 23 Hollywood Costume | March 26 – July 6
© 2013 Phoenix Art Museum. All Rights Reserved. LEFT to RIGHT: Ed Mell, Sweeping Clouds, 1989. Oil on canvas. 53” h x 53” w. Museum purchase with funds from anonymous donors. Krishna and Radha under an Umbrella, Kangra School, 19th century. Ink and color on paper. 8.375” h x 6.375” w. Gift of George P. Bickford. Robert Henri, The Laundress, 1916. Oil on canvas. 36” h x 29” w. Gift of Mr. and Mrs. Norman Hirschl.
1625 North Central Avenue Phoenix, AZ 85004 phxart.org
Power Lunch
by Mike Hunter
Meals that matter
Celebrity Chefs Do Lunch, Too The Valley is known for many celebrity chefs — too many, in fact, to mention. Here are a few of their lunch hot spots that will tempt your palate and likely allow you to engage with the on-property celeb chef himself. (They are also all longtime community supporters who work with hundreds of local nonprofits to help raise money.)
Christopher’s Crush
Self-proclaimed the new Camelback Corridor hot spot, The Gladly is a creation by the people behind the very successful Citizen Public House. This new concept is housed in the space once occupied by Ruth’s Chris Steak House in the newly renovated Anchor Center. The proclamations seem to be accurate. The powerful lunchers are spending their noon hour at The Gladly, and not surprisingly. The décor is impressive, the servers are experienced and the food is fantastic. Chef Bernie Kantak has created an overall culinary concept that appeals to the business set. From starters to dessert, the lunch menu is a delicious array of options. The Crab Cakes, made with avocado butter and a tomatillo vinaigrette atop a fennel salad, is light and truly flavorful. The crab flavor comes out and the combination of the vinaigrette and the salad makes this a great choice as a light meal. Guests are raving about the Yellowtail Tacos. These delicate pieces of fish come with avocado tzatziki, chimichurri, pickled red onion and a mixed green salad. Show up for this and all is well. For the chopped salad fan, the restaurant’s “Original” will thrill. The menu advises a quick link to their Facebook page to see what it entails, but with corn, couscous, smoked salmon, asiago cheese, pepitas, tomatoes, arugula and currants in a buttermilk pesto dressing, this is a famed version that is not to be missed. In fact, it’ll keep guests coming back. For dessert (we know it is lunch), the Buttermilk Bread Pudding simply must hit the table. The blueberry compote marries with the rich and sweet bread pudding and is complimented by a scoop of vanilla ice cream. Share if you must, but order this dish. The look is contemporary American casual and the atmosphere is fun, packed with suited executives and shorts-wearing locals. They are there for the food and drink (even at lunch). Designed to appeal to those looking to be comfortable, the restaurant’s urban sophistication and bistro-style setting gives guests the feeling they are somewhere special.
Elements
Making our list two issues in a row, Food Network Star Beau MacMillan’s restaurant at Sanctuary resort and spa boasts more than just incredible views and service. His food is award-winning and his lunch offerings are clever culinary combinations that thrill guests. The Orecchiette Pasta is made with Moroccan chorizo broth, pulled chicken, rock shrimp and manchego cheese. It is light and incredibly flavorful. 5700 E. McDonald Dr., Scottsdale (480) 607 2300 • sanctuaryoncamelback.com
Vincent Market Bistro
Casual and comfortable is how to describe Vincent Guerithault’s daytime bistro. Open for lunch, this authentically French spot is inspired by the years of culinary success Vincent brings to the Valley. From thincrust pizzas to homemade pastas, his dishes are not to be missed. The paninis are known throughout the region and may, very well, be what began the panini craze. 3930 E. Camelback Rd., Phoenix (602) 224-0225 • vincentsoncamelback.com
The Gladly 2201 E. Camelback Rd., Phoenix (602) 759-8132 thegladly.com
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Photos courtesy of The Gladly (left, top and bottom), Christopher’s Crush (right)
The Gladly: The New Camelback Corridor Hot Spot
Gourmet lunchtime fare is what Christopher Gross touts. His culinary experience comes across at lunch with delicate and flavorful pizzas, his Truffle fries and creative salads. Try the Mac n’ Cheese au Gratin with Ham. Contemporary and open atmosphere in the Biltmore Fashion Park make lunch here an event for all of the right reasons. 2502 E. Camelback Rd., Phoenix (602) 522-2344 • christophersaz.com
At Waste Management, giving back is a responsibility we take to heart. Learn more at www.wmofarizona.com
A community partner. Waste Management is a valued and trusted community partner. Every year, we give back tens of thousands of dollars to community organizations in need. Waste Management is proud to support Big Brothers Big Sisters of Central AZ, the Special Olympics, Keep Phoenix Beautiful and Habitat for Humanity. 1-800-796-9696
Š201 Waste Management, Inc.
Business Lending Guide 2014
Major Banks • Community Banks • Credit Unions Lending Institutions & Resources
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Business Lending Guide 2014
The Economy Is Growing Again The Business Lending Guide is a great tool and resource for businesses and individuals to know where to start or how to better develop banking relationships within our communities. The key to any great banking relationship is preparation and ongoing communication. Banks want to get to know companies both strategically and financially. Clients want banks to know their businesses and provide financing to assist in meeting their short- and long-term goals. With our economy growing again, banks are seeing increased requests from clients for working capital, equipment and real estate purpose. This is welcome news for banks and has created competition, which is good for businesses. Whether currently in a banking relationship or looking to start a new relationship, companies need to demonstrate a well-thoughtout business plan and have open dialogue with their bankers about creative ways that banks can assist. Further, banking relationships are not just about loans. Efficient and effective cash management can contribute
As Phoenix city president for BBVA Compass since 2008, Lynne Herndon oversees the business development activities in Phoenix for commercial and commercial real estate lending. She manages a team of 20 relationship managers and support staff with a loan portfolio of $1 billion in outstandings. She is also the chairman of the Arizona Bankers Association and serves as a board member for Greater Phoenix Leadership, Greater Phoenix Economic Council, Banner Foundation and the YMCA.
to a company’s bottom line. Banks can offer clients cash management products, merchant and spending cards. Banks also offer online banking and products that assist with record keeping and fraud control, which can be important parts of a total banking relationship. I invite you to read through all of the valuable information offered in this edition of In Business Magazine’s Business Lending Guide.
Lynne B. Herndon Chairman • Arizona Bankers Association Phoenix City President • BBVA Compass Bank
About our Guide: Funding is consistently among the top concerns shared by our readers. As part of our “Lending” issue of In Business Magazine, our editorial staff has compiled this annual Business Lending Guide. This guide is a listing of local lenders, contacts and resources that will assist business owners in finding lending opportunities. We contacted federally and state-chartered banks, credit unions and selected other lenders and resources to provide information about the variety of loans or assistance programs they offer locally. This guide will be available online and through our partner organizations through December 2013.
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Our list is compiled of institutions based here locally who responded to our questionnaire by press time. Please check the information, as contacts and phone numbers may change throughout the year. Many of the institutions have multiple locations throughout Arizona; this guide lists their main office in the Greater Phoenix area. To participate or advertise in our 2015 guide, please contact us at info@inbusinessmag.com or visit our website at www.inbusinessmag.com. © 2013 InMedia Company, LLC.
Business Len Guide 2d0ing Major Bank 14 s• Community Lending Ins Banks • Credit Union titutions & s Resources
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Business Lending Guide 2014
Banks Alerus Bank 17045 N. Scottsdale Rd., Scottsdale, AZ 85255 Contact: Rob Schwister Phone: (480) 905-2407 Website: www.alerusfinancial.com Types of Loans/Services: SBA loans, term loans, lines of credit
Alliance Bank of Arizona 1 E. Washington St., Phoenix, AZ 85004 Contact: Dee Burton Phone: (602) 386-5500 Website: www.alliancebankofarizona.com Types of Loans/Services: corporate banking, commercial real estate lending, public finance, business and professional banking, SBA lending, treasury management services
Arizona Bank & Trust 2036 E. Camelback Rd., Phoenix, AZ 85016 Contact: Troy Norris Phone: (480) 844-4558 Website: www.arizbank.com Types of Loans/Services: commercial loans, including lines of credit, equipment, real estate, construction
Arizona Business Bank 2600 N. Central Ave., Ste. 2000, Phoenix, AZ 85004 Contact: Toby Day Phone: (602) 240-2700 Website: www.azbizbank.com Types of Loans/Services: revolving lines of credit, term loans, letters of credit, real estate, SBA loans
Banks
Bank 1440
Bankers Trust Co.
7010 E. Chauncey Ln., Ste. 120, Phoenix, AZ 85054 Contact: Darcie Storms Phone: (623) 334-6200 Website: www.bank1440.com Types of Loans/Services: commercial term mortgages, business loans, SBA loans
4742 N. 24th St., Ste. 165, Phoenix, AZ 85016 Contact: Patrick M. Joyce Phone: (602) 224-2025 Website: phx.bankerstrust.com Types of Loans/Services: commercial lending, commercial real estate financing
Bank of America, NA
4010 E. Thomas Rd., Phoenix, AZ 85018 Contact: Romeo Zavala Phone: (602) 522-2580 Website: www.bbvacompass.com Types of Loans/Services: SBA loans, lines of credit, commercial real estate lending, working capital financing, residential construction, energy lending, business leasing, business credit cards
201 E. Washington St., Phoenix, AZ 85004 Contact: Small Business Banking Phone: (888) 287-4637 Website: www.bankofamerica.com Types of Loans/Services: lines of credit, term loans, SBA lending
Bank of Arizona, NA 16767 N. Perimeter Dr., Scottsdale, AZ 85260 Contact: Business Banking Department Phone: (602) 808-5331 Website: www.bankofarizona.com Types of Loans/Services: revolving lines of credit, real estate lines of credit, equipment or vehicle term loans, real estate term loans, construction financing, equipment leasing, SBA loans
Bank of the West 9502 W. Van Buren St., Tolleson, AZ 85353 Contact: SBA Lending Department Phone: (866) 306-7254 Website: www.bankofthewest.com Types of Loans/Services: commercial lending, equipment financing, SBA loans, commercial real estate, lines of credit, construction, agricultural
The Five C’s of Credit to get a loan approved: Capacity, Collateral, Capital, Conditions, Character Capacity — Banks look for a history of positive cash flows. The best predictor of a business’s likelihood of repaying a loan as planned is a proven history of positive cash flows. This cash flow history needs to be adequate to make loan payments on the new loan request, plus a little. Banks desire a debt service coverage ratio of something in the 1.30 times debt service. Note that the emphasis here is history of positive cash flows. Since start-up businesses don’t have a “history” of operations, it is very difficult, on their own merits, for them to obtain almost any type of bank financing. —Jeffrey P. Gaia, CEO of Biltmore Bank of Arizona
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BBVA Compass Bank
BNC National Bank 20175 N. 67 Ave., Glendale, AZ 85308 Contact: Scott Spillman Phone: (602) 508-3760 Website: www.bncbank.com Types of Loans/Services: revolving lines of credit for short-term operating needs, working capital loans, term loans for business equipment, commercial real estate loans, SBA loans, 504 commercial real estate loans, business agricultural loans, letters of credit
Central Arizona Bank 7001 N. Scottsdale Rd., Ste. 1000, Scottsdale, AZ 85258 Contact: Dan Klenske Phone: (480) 596-0883 Website: www.centralarizonabank.com Types of Loans/Services: commercial term loans, commercial lines of credit, construction lines of credit, lease financing, corporate credit cards, agricultural loans
Center for Entrepreneurial Innovation 275 N. GateWay Dr., Phoenix, AZ 85034 Phone: (602) 286-8950 Website: www.ceigateway.com Types of Services: incubator startup and early-stage companies; access to facilities space; mentorship opportunities; business development resources; weekly educational seminars open to the public; and more
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Business Lending Guide 2014
Banks (con’t)
Comerica Bank
First International Bank & Trust
Gold Canyon Bank
425 S. Mill Ave., Tempe, AZ 85282 Contact: Bob Willcoxson Phone: (480) 966-0849 Website: www.comerica.com Types of Loans/Services: commercial property loans, business lines of credit, business loans, credit cards
2231 E. Camelback Rd., Phoenix, AZ 85016 Contact: Craig Ealy Phone: (480) 946-2967 Website: www.firstintlbank.com Types of Loans/Services: agriculture, business, SBA
6641 S. Kings Ranch Rd., Ste. 2, Gold Canyon, AZ 85118 Contact: J. Chris Webster Phone: (480) 474-2005 Website: www.goldcanyonbank.com Types of Loans/Services: business, personal, SBA
Commerce Bank of Arizona
First Scottsdale Bank
Goldwater Bank
4110 N. Scottsdale Rd., Ste. 120, Scottsdale, AZ 85251 Contact: Larry O’Malley Phone: (480) 253-4504 Website: www.commercebankaz.com Types of Loans/Services: business-related loans of all types
15190 N. Hayden Rd., Scottsdale, AZ 85260 Contact: Ben Danner Phone: (480) 998-8408 Website: www.fnbscottsdale.com Types of Loans/Services: commercial lending, SBA
7135 E. Camelback Rd., Ste. 201, Scottsdale, AZ 85251 Contact: Lori Abreu Phone: (480) 281-8190 Website: www.goldwaterbank.com Types of Loans/Services: business lending
Enterprise Bank
FirstBank
3900 E. Camelback Rd., Ste. 180, Phoenix, AZ 85018 Contact: Zach Morrison Phone: (602) 824-5700 Website: www.enterprisebank.com Types of Loans/Services: commercial loans, equipment, real estate, construction, SBA loans, lines of credit
2525 E. Camelback Rd., Ste. 115, Phoenix, AZ 85016 Contact: Humphrey Shin Phone: (602) 667-6900 Website: www.efirstbank.com Types of Loans/Services: commercial real estate, construction, SBA loans, lines of credit, residential real estate
1721 N. Arizona Ave., Ste. 1, Chandler, AZ 85225 Contact: David Telya Phone: (480) 917-0139 Website: www.greatwesternbank.com Types of Loans/Services: commercial and consumer loans
First Fidelity Bank
Gateway Bank
6232 N. 32nd St., Phoenix, AZ 85018 Phone: (602) 912-5555 Website: www.ffb.com Types of Loans/Services: revolving lines of credit, commercial real estate, residential real estate, equipment, SBA, oil and gas production loans, commercial leasing
6860 E. Warner Rd., Mesa, AZ 85212 Contact: James L. Christensen Phone: (480) 358-1000 Website: www.gcbaz.com Types of Loans/Services: commercial lending
The Five C’s of Credit to get a loan approved: Capacity, Collateral, Capital, Conditions, Character Collateral — Banks look for adequate collateral support. In the event that future cash flows are not sufficient to make scheduled loan payments, banks want some other business asset or assets to serve as a back-up source to satisfy loan payment obligations. Collateral can take many forms, but often will include accounts receivable, inventory, real estate and equipment as well as other assets. When calculating acceptable collateral, banks will want the value of the collateral to be greater than the principal amount of a loan. Whenever a bank attempts to liquidate collateral, they rarely are able to realize fair market values for the asset being sold. Therefore, the collateral value needs to be one-third to one-and-a-half times greater than the loan amount. —Rich Endicott, president of Biltmore Bank of Arizona’s Scottsdale Airpark Office
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Great Western Bank
JPMorgan Chase 201 N. Central Ave., Phoenix, AZ 85004 Contact: SBA Lending Department Phone: (888) 536-3722 Website: www.chase.com Types of Loans/Services: commercial lending, SBA lending
Johnson Bank 3131 E. Camelback Rd., Ste. 100, Phoenix, AZ 85016 Phone: (602) 381-2100 Website: www.johnsonbank.com Types of Loans/Services: lines of credit, commercial mortgages, equipment leasing, SBA loans
Meridian Bank, NA 2700 N. Central Ave., Ste. 110, Phoenix, AZ 85004 Contact: Erik Frandsen Phone: (602) 274-7500 Website: www.meridianbank.com Types of Loans/Services: term/ installment loans, business line of credit, SBA loans, commercial loans
Metro Phoenix Bank 4686 E. Van Buren St., Ste. 150, Phoenix, AZ 85008 Contact: Michael Morano
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in No G wo oo p dy en ea r!
Practicing medicine is complicated, but WVNB makes SBA lending simple
dr. Jonathan Wiggenhorn of estrella ear Nose and throat
Arizona’s Local SBA Lender sCottsdaLe 5635 N. scottsdale road, suite 150 scottsdale, aZ 85250 phone: 480-429-6750
Corporate Headquarters 2440 N. Litchfield rd., ste.100 Goodyear, aZ 85395 phone: 623-536-9862
wvnb.net
BuCkeye 111 e. Monroe avenue, suite 100 Buckeye, aZ 85326 phone: 623-535-2460
www.
“ They
truly
understand
small business.”
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Business Lending Guide 2014 Phone: (602) 346-1800 Website: www.metrophoenixbank.com Types of Loans/Services: commercial lending
MidFirst Bank 3030 E. Camelback Rd., Phoenix, AZ 85016 Contact: Barb Bandura Phone: (602) 801-5000 Website: www.midfirst.com Types of Loans/Services: SBA loans, business express loans, business lines of credit, business term loans, commercial real estate lending, business equipment lease financing
Mutual of Omaha Bank 9200 E. Pima Center Pkwy., Scottsdale, AZ 85258 Contact: Kevin Halloran Phone: (480) 458-2249 Website: www.mutualofomahabank.com Types of Loans/Services: commercial and industrial, commercial real estate, SBA, mortgage, personal and association lending
National Bank of Arizona 6001 N. 24th St., Phoenix, AZ 85016 Contact: Mike Casa Phone: (602) 235-6000 Website: www.nbarizona.com Types of Loans/Services: consumer, residential real estate, commercial, corporate, treasury management, commercial real estate, wealth management, nonprofit, energy lending
Banks (con’t) • Credit Unions
Parkway Bank
Stearns Bank NA, Arizona
11011 N. Tatum Blvd., Phoenix, AZ 85028 Contact: Frank Sutter Phone: (602) 765-8501 Website: www.parkwaybank.com Types of Loans/Services: an array of conventional business loans as well as SBA financing
9225 E. Shea Blvd., Scottsdale, AZ 85260 Contact: John Mistler Phone: (480) 314-4200 Website: www.stearnsbank.com Types of Loans/Services: SBA loans, commercial and construction lending, equipment finance and leasing, USDA rural development loans
Pinnacle Bank 14287 N. 87th St., Ste. 123, Scottsdale, AZ 85260 Contact: Greg Thorell Phone: (480) 609-0055 Website: www.pinnaclebankaz.com Types of Loans/Services: lines of credit, equipment loans, term loans, real estate construction loans, standby letters of credit, SBA loans
RepublicBankAz 909 E. Missouri Ave., Phoenix, AZ 85014 Contact: Stuart Olson Phone: (602) 277-2500 Website: www.republicbankaz.com Types of Loans/Services: commercial loans and lines of credit, commercial real estate loans, commercial construction loans, SBA loans
Sonoran Bank, N.A. 3877 N. 7th St., Ste. 150, Phoenix, AZ 85014 Contact: Frank Coumides Phone: (602) 332-7828 Website: www.sonorabank.com Types of Loans/Services: commercial loans to small and mid-size businesses for equipment, real estate and expansion
The Five C’s of Credit to get a loan approved: Capacity, Collateral, Capital, Conditions, Character Capital — Banks look for businesses to have adequate capital to support normal business operations. Although businesses start out with a vision in a person’s mind, they rarely make it to the next stage without capital to help make this vision a reality. Capital in this sense is the amount of personal source funds and prior earnings retained by a business. The far and away No. 1 reason loans are turned down by banks is insufficient capital on the part of the business. It’s not unusual for business commentators and, occasionally, politicians to suggest that a business obtain capital from its bank. This is poor advice. Banks provide loans to business long after the business owners find or earn capital to support formation and operation of the business. Typically, banks will require a business to show something in the range of 30 percent capital/equity as a percentage of total assets. —Jeffrey P. Gaia, CEO of Biltmore Bank of Arizona
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Sunwest Bank 60 E. Rio Salado Pkwy., Tempe, AZ 85281 Contact: Andy Fellows Phone: (480) 366-6021 Website: www.sunwestbank.com Types of Loans/Services: commercial real estate, commercial and industrial
TCF Bank 11 S. McClintock Dr., Tempe, AZ 85281 Contact: Consumer Loans Department Phone: (800) 823-5363 Website: www.tcfbank.com Types of Loans/Services: working capital lines of credit, term loans, commercial real estate loans, leasing, business credit cards
UMB Bank, NA 8800 E. Raintree Dr., Ste. 100, Scottsdale, AZ 85260 Contact: Robert Faver Phone: (480) 459-2153 Website: www.umb.com Types of Loans/Services: business real estate loans, term loans, lines of credit, letters of credit, SBA loans, agriculture loans, capital purchase loans, leasing
U.S. Bank SBA Division Regional Office 2222 E. Camelback Rd., Phoenix, AZ 85016 Contact: SBA Division Administrative Office Phone: (800) 431-7101 Website: www.usbank.com Types of Loans/Services: SBA loans, lines of credit, equipment leasing, term loans, agricultural loans, quick credit, commercial real estate
Wells Fargo Bank 100 W. Washington St., Phoenix, AZ 85003 Contact: Jennifer Anderson Phone: (602) 378- 5133 Website: www.wellsfargo.com/biz Types of Loans/Services: business loans of all types, including real estate, lines of credit, equipment and SBA inbusine ssmag.com
West Valley National Bank 5635 N. Scottsdale Rd., Suite 150, Scottsdale, AZ 85250 Contact: Malia Oliver Phone: (623) 535-2462 Website: www.wvnb.net Types of Loans/Services: SBA 7(A), SBA 504, working capital, owner-occupied real estate, A/R lines of credit
Washington Federal 2196 E. Camelback Rd., Ste. 100, Phoenix, AZ 85016 Contact: Scott Stemm Phone: (602) 553-7434 Website: www.wnbank.com Types of Loans/Services: commercial lending, commercial real-estate financing, lines of credit, term loans, business credit cards, SBA loans
Credit Unions Arizona Central Credit Union 2020 N. Central Ave., Ste. 800, Phoenix, AZ 85004 Contact: Jeffrey Frank Phone: (602) 523-8342 Website: www.azcentralcu.org Types of Loans/Services: SBA loans, commercial real estate loans, lines of credit, term loans
Arizona State Credit Union 2355 W. Pinnacle Peak Rd., Phoenix, AZ 85027 Contact: Laurie Quinsler Phone: (602) 467-4262 Website: www.azstcu.org Types of Loans/Services: term loans, unsecured lines of credit, commercial real estate mortgages, business vehicle loans, business credit cards, business overdrafts
Credit Union West 2402 W. Grant St., Phoenix, AZ 85009 Contact: Business Service Center Phone: (602) 631-3200 Website: www.cuwest.org Types of Loans/Services: business loans
Desert Schools Federal Credit Union 148 N. 48th St., Phoenix, AZ 85034 Contact: Herb Ramirez Phone: (602) 663-8674 inbusine ssmag.com
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Business Lending Guide 2014 Website: www.desertschools.org Types of Loans/Services: working capital financing, equipment loans, owneroccupied real estate, commercial real estate
TruWest Credit Union 1345 W. Warner Rd., Tempe, AZ 85284 Contact: Daniel Desmond Phone: (480) 441-5900 Website: www.truwest.org Types of Loans/Services: business loans, secured and unsecured lines of credit, business credit cards, commercial real estate lending, equipment financing
Alternative Lending Altima Business Solutions 1820 E. Ray Rd., Chandler, AZ 85225 Contact: Andre Wilson Phone: (602) 773-1488 Website: www.altimabusinesssolutions.com Types of Loans/Services: angel/venture capital, private equity, merchant funding, equipment leasing, factoring, contract financing
Business Development Finance Corporation 3300 N. Central Ave., Ste. 600, Phoenix, AZ 85012 Contact: Gary Molenda Phone: (602) 381-6292 ext. 210 Website: www.BDFC.com Types of Loans/Services: SBA 504 commercial loans
Credit Unions (con’t) • Alternative Lending • Lending Resources
FSW Funding
Arizona Commerce Authority
4530 E. Shea Blvd., Ste. 142, Phoenix, AZ 85028 Contact: Robyn Barrett Phone: (602) 535-5984 ext. 1 Website: www.fswfunding.com Types of Loans/Services: choose or add lines of credit, letters of credit, factoring, asset-based lending
333 N. Central Ave., Ste. 1900, Phoenix, AZ 85004 Phone: (602) 845-1200 Email: smallbiz@azcommerce.com Website: www.azcommerce.com Types of Services: business-growing strategies, market research, licensing information, statewide resource information, workforce assistance
Performance Funding Group, LLC 11022 N. 28th Drive, Ste. 160, Phoenix, AZ 85029 Contact: Lou Wallace Phone: (602) 912-0200 Website: www.performancefunding.com Types of Loans/Services: asset-based loans, inventory purchase order financing, term loans, lines of credit, DIP financing.
Sir Mortgage & Finance 4040 E. Camelback Rd., Ste. 210, Phoenix, AZ 85018 Contact: Greg Sir Phone: (602) 954-6677 Website: www.sirmortgage.com Types of Loans/Services: residential, commercial and construction loans
Lending Resources ACCIÓN P.O. Box 41237, Tucson, AZ 85717 Phone: (520) 682-3648 Website: www.accionaz.org Types of Services: loans, lines of credit, management services, investment, governance
The Five C’s of Credit to get a loan approved: Capacity, Collateral, Capital, Conditions, Character Conditions — Banks look at the conditions affecting the business. Many internal as well as external conditions have an impact on a business. Although a business owner may have little or no control over these conditions, it is critical that the business owner be aware of them. Additionally, the business owner needs to have a strategy and plan for managing the impact of these conditions on business operations. External conditions include governmental regulations, business climate and competition. Internal conditions include, among many others, staffing, management and operational issues. The business owner’s grip on understanding conditions and demonstrating the ability to deal with them is critical to the bank. —Rich Endicott, president of Biltmore Bank of Arizona’s Scottsdale Airpark Office
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Arizona Loans for Assistive Technology Institute for Human Development University Affiliated Program Northern Arizona University 2400 N. Central Ave., Ste. 300, Phoenix, AZ 85004 Phone: (602) 776-4670 Website: www.azlat.net Types of Services: loans for persons with disabilities to purchase assistive technology, training and technical assistance; equipment reutilization; Self Employment for Entrepreneurs with Disabilities program
City of Phoenix Expand Program 200 W. Washington St., Phoenix, AZ 85003 Phone: (602) 262-6005 Website: phoenix.gov/econdev Types of Services: assistance in finding loans for businesses, collateral reserve deposits
Industrial Development Authority (IDA) of Maricopa County c/o Maricopa County Administration Office 301 W. Jefferson St., 10th Floor, Phoenix, AZ 85003 Phone: (602) 506-1888 Website: www.mcida.com Types of Services: conduit financing, project financing, manufacturing facility bonds
Neighborhood Economic Development Corporation (NEDCO) 635 E. Broadway Rd., Mesa, AZ 85204 Phone: (480) 833-9200 ext. 117 Website: www.nedco-mesa.org Types of Services: alternative financing programs for new and start-up businesses, entrepreneur education, loan readiness assessment, business credit repair, loan application assistance inbusine ssmag.com
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Where to go when the banks say ‘NO!’ 3 Angel/Venture Capital 3 Merchant Funding 3 Factoring
3 Private Equity
3 Equipment Leasing
3 Contract Financing
To Discuss Your Financial Needs, Call Today 1820 East Ray Road Chandler, AZ 85225 602.773.1488 520.762.7535 Altima@AltimaBusinessSolutions.com inbusine ssmag.com
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Business Lending Guide 2014
Resources (con’t)
Service Corps of Retired Executives (SCORE)
Looking for a way to fund business growth? Fortunately for you, not all lenders are the same.
“We consider FSW Funding a partner in our business.” —Cliff, founder of software development company, Arizona & Mexico
2828 N. Central Ave., Ste. 800, Phoenix, AZ 85004-1093 Phone: (602) 745-7200 Website: www.score.org Types of Services: resources, templates and tools to assist entrepreneurs in developing tools and plans
SBA – Small Business Administration (SBA) 2828 N. Central Ave., Ste. 800, Phoenix, AZ 85004-1093 Phone: (602) 745-7200 Website: www.sba.gov Types of Services: loans, loan guarantees, contracts, counseling sessions and other forms of assistance to small businesses
Small Business Development Center (SBDC) 2411 W. 14th St., Tempe, AZ 85281 Phone: (480) 731-8720 Website: www.azsbdc.net Types of Services: assistance for small businesses in every stage of development, SBA loan assistance, free one-on-one business counseling, workshops and training programs
FSW Funding promises: • Fast funding for working capital • Flexible and innovative lines of credit • NO termination fees, contracts, or minimum volume requirements
Contact us today to learn more about our factor financing services
602-535-5984 4530 E. Shea Blvd, Ste. 142, Phoenix, AZ 85028
www.fswfunding.com robyn@fswfunding.com
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The Five C’s of Credit to get a loan approved: Capacity, Collateral, Capital, Conditions, Character Character— Borrowers, owners and management need to conduct themselves in good character in both business and personally. A good reputation as a business and as a person is one of our most important assets. Bankers care about how business is conducted and how individuals conduct themselves. Indications of good character are an important component in the loan approval process. In addition to community and personal opinions, credit history is an important indicator of whether or not a bank can rely on a party to honor his or her obligations to the bank. —Jeffrey P. Gaia, CEO of Biltmore Bank of Arizona inbusine ssmag.com
535
375 4c
Grow your business with an SBA loan
Work with the #1 SBA lender in the nation* At Wells Fargo we’re committed to helping small businesses succeed. Our SBA loans can help you: • Acquire a new business • Expand your existing business • Finance the purchase of real estate and equipment • Meet capital needs Plus, customized terms and payment options provide flexible financing options.
Make the most out of your business — contact us today
• Stop by a Wells Fargo location to talk with a banker • Call 1-800-545-0670 (Monday through Friday, 7:00 a.m. to 7:00 p.m., Central Time) • Visit wellsfargo.com/biz
* Wells Fargo is the #1 SBA lender by dollars according to the U.S. Small Business Administration as of September 30, 2010. All loans are subject to credit approval. For discussion purposes only. © 2011 Wells Fargo Bank, N.A. All rights reserved. NMLSR ID 399801. (668702_03535) 668702_03535 7.875x10.375 4c.indd 1
10/25/11 3:29 PM
Index Index by Name
Gross, Christopher, 48
Jones, Terry, 66
Pillsbury, Sam, 20
Beyer, Thomas, 44
Guerithault, Vincent, 48
Latz, Marty, 40
Prefling, Laura, 14
Binsfeld, Dave, 12
Hammond, T. Anthony, 24
MacMillan, Beau, 48
Quarto, Mark, 16
Callaway, Joseph, 30
Hand, Ken, 16
Medina, John, 24
Rodriguez, Jerry, 12
Carlson, Robert, 20
Harkins, Dan, 22
Merrill, Nathan, 16
Schumacher, Tom, 20
Davie, Tom, 34
Hayward, Glen, 16
Murray, Rick, 24
White, Cindy, 12
DeWulf, John, 40
Hernandez, John, 16
Myers, Chris, 24
White, Doug, 42
Fiandaca, Peggy, 20
Herndon, Lynne B., 53
Naumann, Gary, 24
White, Polly, 42
Gallegos, Lori, 24
Hickman, Paul, 11, 24
Newhouse, Nicole, 34
Williamson, Glenn, 37
Goulka, Jim, 24
Hinkel, Sara, 14
Nielsen, Eric, 37
Zito, Ed, 24
di Sciacca, 35
Organization of Women in
Tempe Chamber of Commerce, 38
Index by Company Ahwatukee Foothills
Dream Dinners, 14
International Trade – Phoenix, 38
Those Callaways, 30
Driver Provider, The, 17
Peoria Chamber of Commerce, 38
Tourneau, 46
Economic Club of Phoenix, 37
Phoenix Art Museum, 47
U.S. Bureau of Economic Analysis, 18
Alliance Bank of Arizona, 2, 24, 64
Elements, 48
Phoenix Symphony, The, 33
United Healthcare, 23
Altima Business Solutions, 61
Essential Ideas, 66
Pillsbury Wine Company, 20
University of Arizona, 20
Arizona Bankers Association, 11, 24, 53
First Credit Union, 24
R&R Refrigeration
University of Phoenix, 45
Arizona Chamber of
FSW Funding, 62
Chamber of Commerce, 36 Alerus Bank & Trust, 57
Commerce and Industry, 36 Arizona Commerce Authority, 4, 5 Arizona Diamondbacks, 15 Arizona Hispanic Chamber of Commerce, 36 Arizona International Growth Group, 13, 35, 36 Arizona Small Business Association, 24, 36 Arizona State University, 24 Arizona Technology Council, 36 Arizona Technology Investor Forum, 24 Arizona Theatre Company, 41 Arizona Transplant House, 34 Arizona Wine Growers Association, 20 Association for Corporate Growth – Arizona, 36 BBVA Compass, 53 Bibby Financial Services, 59 Biltmore Bank of Arizona, The, 55 BodeTree Direct, 24 Business Development Finance Corporation, 59 Carlson Creek Vineyard, 20 Cassidy Turley, 50 Central Phoenix Women, 36 Chandler Chamber of Commerce, 35, 36 Children’s Museum of Phoenix, 9 Christopher’s Crush, 48 Cici Bianca, 12 Connextions, 16 Cox Business, 67 Cystic Fibrosis Foundation, 34
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General Southwest Insurance Agency, 12 Gladly, The, 48 Glendale Chamber of Commerce, 37 Gogiro Phoenix Central, 44 Good Works Auto Repair, 16 Great Clips, 16 Greater Phoenix Chamber of Commerce, 37 Hamra Jewelers, 46 Harkins Theatres, 22 Holmes Murphy, 6 Hybrid Shop Network, 16 Hyde Park Jewelers, 46 Infusionsoft, 41 J2 Media, 35 Johnson Bank, 24 K1 Speed Phoenix, 6
Heating and Air Conditioning, 12 Regus, 9 Roshka DeWulf & Patten, 40 SCF Arizona, 3
Verde Valley Wine Consortium, 20 Vincent Market Bistro, 48 W. P. Carey School of Business, 24 Washington Federal, 24
Scottsdale Area Chamber of Commerce, 37, 38 Sir Mortgage & Financial of Arizona, 61 Spirit of Enterprise Center, 24 SRP, 21
Waste Management, 49 Wells Fargo, 63 West Valley National Bank, 57 West Valley Women, 38 Wharton School, 14 Whitestone Partners, 42
Stearns Bank, 54
Women of Scottsdale,10, 38
Stoney-Wilson Business Consulting, 17 Surprise Regional Chamber of Commerce, 38
Yavapai College, 20 Yavapai County Cooperative Extension, 20 Bold listings are advertisers supporting this issue of In Business Magazine.
Check Out
KFNX, 33 Land Rover, 46 Latz Negotiation Institute, 40 Lawrence Dunham Vineyards, 20 Mesa Chamber of Commerce, 37 National Association of
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Women Business Owners, 38 National Bank of Arizona, 68 National Retail Federation, 14 North Phoenix Chamber of Commerce, 38 North Scottsdale Chamber of Commerce, 38 Northcentral University, 19 Octane Raceway, 13
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Roundtable
A Candid Forum
Go to Bat for Innovation-Nurturing Approach to Business
Business owners may profit from borrowing a page from a baseball manager’s playbook by Terry Jones In baseball, you can fail 70 percent of the time and still be considered a strong player. Why is it that businesses give an employee with a new idea just one chance? Pitchers lose games, batters strike out, fielders make errors. Instead of firing them or sending them back to the minor leagues, managers study what went wrong. CEOs need to do the same thing. Kill the project, not the person. Instead of telling Bob, “You’re done,” they should tell Bob, “The project’s dead. What do you want to do next?” To succeed today, businesses absolutely must be innovative, and they can’t be if they’re unwilling to have some failures. Too many companies punish failure and fail to adequately reward success. How does that motivate the employees with great new ideas? In this World Series season, here are a few other baseball analogies that will help any business score on innovation: ■■ Most games are won with singles and doubles. Home runs are great. They are that 10 percent of innovation that is transformational, exciting and extremely rewarding. But the 70 percent of innovation that involves improving core products, and the 20 percent that represents adjacent changes — pulling together existing innovations in a new way, like the iPhone — are the singles and doubles that can win games. ■■ Know that your home-run hitters will strike out a few times. The people coming up with the radical new ideas that account for big, transformative innovation aren’t going to hit a home run every time — and neither did Babe Ruth. In fact, Babe Ruth had more strike-outs than home runs. While radical successes, like Dyson using its vacuum technology to create restroom hand-dryers, account for only 10 percent of innovation, they produce about 70 percent of a company’s future revenue. So allow your home-run hitters their swings and misses. ■■ Watch the game tapes. Sports teams fanatically analyze every aspect of losing
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games with the same process and vigor they use for winning ones. The Federal Aviation Authority has a painstaking process for analyzing every airline incident and crash. As a result, its safety record gets better every year. Look for solutions when something goes wrong — not where to lay the blame. Inspect the process, find the defect and strategize how to make it better. (Note: If the same people keep making the same mistakes, arrange for training, counseling or, if that fails, a bus ticket out of town.) Innovation is about responding to needs instead of trying to dictate them. Companies
need to listen to their customer service complaints — what are customers saying that can help them improve their product or process? And they need to talk about the crazy ideas — including those that seem too simple to succeed. Proctor & Gamble made diapers and cleaning products; someone suggested putting a diaper on a mop handle, and voila! The Swiffer! Essential Ideas essentialideas.com
Terry Jones, author of On Innovation, founded Travelocity.com in 1996 and led the company as president and CEO until May 2002. He is managing principal of Essential Ideas, a consultancy he co-founded to help companies in their transition to the digital economy, and serves as chairman of the board at Kayak.com, which he also founded.
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ELEVATING ARIZONA What do great leaders do? They practice disciplined thought. They have the discipline to face the “brutal facts” and the faith that they can prevail. Jim Collins Leadership Expert, Author and Keynote Speaker
The 2013 Arizona Leadership Forum could not have come at a better time. Following the difficult years of the economic slump and the often confusing portrayal of Arizona in the media, there are promising signs that growing numbers of Arizonans have a clear and positive view of the Arizona they want for the future. Lattie Coor Chairman and CEO, The Center for the Future of Arizona
Arizona today is experiencing the outcomes of the choices made by state leaders over many decades to systematically reduce support and investment that has marginalized residents, social service agencies that support them, and education at every level. Decisions by present and new leadership ultimately will shape Arizona’s future, as well as impact any change in status or direction today. Steve Seleznow President and CEO, Arizona Community Foundation