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Status Check: Business Meetings

Big Picture: Greenville Drive

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LAYERS OF THOUGHT GUT CHECK RANDOM & RELEVANT 11 QUESTIONS 101 DAYS SPEED PITCH

Q22010 September/October Q1 2010 2009

Measure of Success: Political Representation

the think tank

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Trail Blazers: Garrison & Christensen

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POLITICS CEOs SMALL BIZ GLOBAL HR LAW SALES KID BIZ

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What Matters: Paul Guy


The Measure of OUR Success... ...Is YOUR Trust.

Named one of the “Top 25 Fastest-Growing Companies in South Carolina” in 2009 Oustanding Broker of the Year Award 2002 by Registered Rep Magazine First Allied Advisor of the Year 2008 Award

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• Help individual investors in striving to reach personal financial objectives • Make complicated financial decisions simple • Take only the necessary amount of risk to help clients reach goals • Give our clients access to relationships, opportunities, and products • Implement intelligent strategies that may help you preserve your principal and seek to multiply your assets

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Why Business Black Box? Whether planes crash or crews overcome obstacles to successfully complete flights, airlines go to the black box to discover secrets, answers, and missing information to explain what happened and learn for the future. That’s the mission of our magazine, our connect events, and our interactive platform.Newsofbusinesses succeeding, failing, merging, hiring, firing and more are reported everyday, all over the Upstate. But in business, the real power is not just hearing the news, but about going behind the scenes, discovering, connecting, and learning from those that made it happen.

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At the heart of every event, every blog, every magazine issue, and every documentary Business Black Box produces, you’ll find a relentless passion for connecting, advising and growing Upstate business.

EDITORIAL Editor-in-Chief Managing Editor Contributing Writers

Proofreading Research

Jordana Megonigal Andrew Brandenburg Julie Godshall Brown Jonathan Clark Andy Coburn John DeWorken Todd Korahais Katherine Myers Claire Richards Ravi Sastry Simone Shahdadi Tony Snipes James Thryselius Simone Shahdadi Claire Richards Barry Zabel

DESIGN Creative Director Art Director Graphic Design Traffic Coordinator Photography

Chad McMillan Lisa Worsham Chris Heuvel Conrad LaRosa Lisa Worsham Brad Forth Conrad LaRosa Ernest Rawlins Photography Image to Impact

VIDEO & INTERACTIVE Interactive Video Services Director

Conrad LaRosa Jonathan Shuler

BUSINESS Publisher Director of Client Services Account Executives Accounting

Geoff Wasserman Missy Nowack Mary Wray Conner Danny Shelton Melissa Sample

PRESENTING SPONSORS

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By Chad McMillan, Creative Director

people cluster together, they’re able to share and utilize the resources of the collective group. People need people to grow. On the cover of this issue, we grouped images of spores together in a Petri dish to create the shape of South Carolina. This representation symbolizes how we, as a community, can collectively come together to create something beautiful, powerful and successful. That’s where life begins: It happens when I connect with you, and you connect with someone, and they connect with someone else.

The Upstate business community has the potential right now to connect and help each other succeed like never before. Our own industry is a perfect example of this: Business Black Box and other business publications all over the Upstate, such as GSA Business, Greenville Business Magazine, and Upstate Business Trends, have one goal...sell subscriptions! No, just kidding. Our primary goal is to expand and grow business here in the Upstate. So, we, like businesses in every other industry, have the opportunity to build relationships and grow together.You need to do the same. If not, you’ll die alone.

Business Black Box

Where does life come from? When did it begin? When will it end? How do we sustain it? How do we grow and adapt? Is change necessary? These are the great questions of life on our little planet.Whatever your belief about how life began, there’s one thing that’s certain. In the words of one of my favorite characters (Jack) from the TV series LOST, “You can live together, or you can die alone.” You see, people are naturally built for relationships. We’re wired to build connections. That’s why many people are drawn to towns and big cities. As

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BLACK

B O X GUT CHECK

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Business Black Box

few days ago, as I whined to Andrew, our managing editor, about not knowing what to write, he said “just write about me.” It’s an ongoing joke between us—I constantly push that he include me in blog posts when he couldn’t think of something to write on, and at times like these, he’ll add his two cents to the pot. So as I sit here, facing this computer screen once again, I’ve decided that this time, I’m actually going to write about Andrew. Andrew is underpaid for what he does for Business Black Box. Highly underpaid. But he loves what he does so much that he makes it work. Working a night job, he still makes it in every day to work long hours for a relentless and unwavering boss. Every day he is learning and growing, and I’d bet that in another year or so he’ll be far beyond anywhere that I can take him. In another example, my daughter’s teacher at daycare is amazing. I’d guess that she can’t make a wealthy living on what she makes as a daycare teacher. I know she has a weekend job at a local restaurant, too (mostly because my kids love to go see her on Saturdays). But I’ll tell you—she is remarkable at what she does, and I suspect she only does it because she loves it. In return, I have a very well-educated, bright child who adores her teacher. And I am lucky that she loves her job enough to pass that reward on to me. When I am discouraged by looking at monthly reports or aggravated by long hours, I am quickly silenced by these kinds of energetic spirits. I’m reminded that not too long ago, I was the bright-eyed, gonna-make-it-all-happen-and-the-world-will-bend-to-me person. I was ready to conquer the world. When a magazine came back from the printer, smelling like ink and fresh cut paper, I used to go crazy with excitement. Now, I usually am so far into the next project that I’m lucky if I pick it up at all. I know I’m not alone. How many of us started off optimistic, only to end up in ruts? Like something out of “Groundhog Day,” we just live the same, boring life over and over and over and over again. How do we end up so jaded? Even for those of us lucky enough to work in the fields we absolutely love—at what point does it all change? Is it a matter of experience breeding a realistic view of what we once saw with rose-colored glasses? Or is it a matter of us getting too busy to enjoy what we love to do? In my experience, it’s most likely the latter. I say this because it’s an easy trap to fall into—whether it be a job, a hobby or even quiet time. Heck, even my kids will get the short end of the stick now and then, and it’s only when I stop and see all the cool stuff I missed that I pull back on the reigns and reevaluate where my priorities are. I have to do the same thing with my career, and I’m sure all of us do, every once and a while. In our office, we talk about the difference between Task and Purpose. Tasks are the things on your to-do list. Purpose is the reason you have the to-do list at all. It’s when we lose sight of the purpose— the vision—that the tasks become so overwhelming. After all, you can spend a whole day responding to email and phone calls and not get one single thing accomplished. But spend a day on your purpose, and you’ll feel like you can take on anything or anyone. Purpose helps keep us from losing sight of what we truly love to do. Interestingly enough, there’s far more damage in having the job you love and becoming jaded by it, than having a job that simply pays the bills. With the latter, you can always still find the job you are meant for. With the former, you’ve already found what you love.You’re just ignoring it. Think about it.

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Editor, Business Black Box

Q2 2010

jordana@insideblackbox.com twitter.com/jmegonigal 864/281-1323 x.1010 facebook.com/jordana megonigal linkedin.com/in/jordanam


Grow Your Thinking... People don’t like to be sold, but they love to BUY!” –Jeffrey Gitomer JEFFREY GITOMER – Coming to Greenville! Chief Executive Salesman and author of “The Little Red Book of Selling” May 25, 2010 8:00 – 11:30 a.m. at Carolina First Center

LIMITED SEATING – SIGN UP YOUR SALES TEAM EARLY! Don’t miss this special chance to hear Jeffrey Gitomer in person. His expertise on sales is world renowned. He’s funny, insightful, and in your face! Your sales team will take what they learn out in the street one minute after the seminar is over and turn it into money!

Business Black Box

To register, visit www.gitomer.com and click on “Seminars” tab and then “Public Seminars.” Tickets ONLY $99 – or $79 if you’re a member of an Upstate Chamber of Commerce. Contact your Chamber for special registration code. Sponsored by the Upstate SC Chambers of Commerce

www.GrowExpo.org For more information, contact Andrea Powell at (864) 350-3322 or apowell@greenvillechamber.org

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Random&Rele 140≥ RANDOM & RELEVANT

Between the Pages

B OX

What we read: The Selling Machine by Michael Cannon, Michael Page,and LandyWingard,2006. The Gist: Cannon, Page, and Wingard present their combined 50 years of selling experience in a basic, step-by-step approach to help you close practically every sales call you ever make, unlocking the secrets to becoming a million-dollar closing machine! How it’s Written: The authors boil down the essentials of the sales process into only 100 pages, detailing the basic sales steps of planning, prospecting, qualifying, proving, proposing, and closing. It’s direct, to the point, and gives you the need-to-know information on how to close a deal.

Business Black Box

Great if: You’re new to sales, have been in the game for years, or just need some extra confidence—The Selling Machine can help you be more convincing and efficient in your day to day activity.

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Don’t miss: Page 101, where it discusses the sales consulting firm PWC Group,founded by author Cannon and located in Greenville, South Carolina. Not only is this advice coming from some of the most experienced salespeople in the country,but it’s also just another example of the business acumen of the Upstate. Our Read: This book helped not only our sales team, but our entire staff as well. Everyone can use a little extra confidence boost when entering a sales call, a meeting, a job interview,etc.

Q2 2010

In 140 characters or less, give us your feedback...

The Q:

Follow us on Twitter: http://twitter.com/insideblackbox

BLACK

@InsideBlackBox: Is your business green? Why or why not?

The A: @daniellejewelry: I try my best to be green, but it’s difficult as a jeweler. Read my blog post about this http://tinyurl.com/cglg3v @SE_Install: several of the products we work with are Greenguard certified - others provide enhanced energy efficiency @SE_Install: we recent posted a blog about “3 Ways To Save Energy (and Money)” http://bit.ly/d1lP49 @ppgportergrvlsc: we have several GREEN initiatives & a strong selection of quality LEED approved paint products

what J. Paul said...

100 bank $ e h t e ow you “If you blem. If o r p r u o n, that’s y 0 millio 0 1 $ k n .” e ba owe th problem s ’ k n a he b l Getty that’s t - J. Pau

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evant Grow Your Influence... One Remarkable Night of Networking! Grow Expo Preview Evening–Carolina First Center

CEO Connection Monday, May 24th, 2010 5:30 – 9:00 p.m. Register Early–Seating is Limited! Meet the Candidates for Governor to hear the future plans for South Carolina.

Upstate Business After Hours Monday, May 24, 2010 5:30 – 7:30 p.m. Don’t Miss Out – Bring Your Team! Network with regional businesses and celebrate doing business in the Upstate.

Business Black Box

www.GrowExpo.org For more information, contact Andrea Powell at (864) 350-3322 or apowell@greenvillechamber.org

Q2 Q1 2010

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B O X RANDOM & RELEVANT BLACK

Business Calendar biz

what’s happening?

directory

Here are just a couple of things going on around the Upstate for business owners, networkers, or entrepreneurs.

• WHAT - InnoVenture Southeast 2010 • WHEN - Tuesday, May 11 and Wednesday, May 12, 2010 • WHERE - Carolina First Center, Greenville • DETAILS- A community of people who are among the best in the world seeking customers, capital, talent, and technology in clean energy, transformed automobiles, advanced materials, and smart communities. Each presentation will be from a champion in the industry, academia, government, or small business describing the future they are creating. Keynote speakers include Harris Pastides, President of the University of South Carolina, Ed Sellers, CEO of BlueCrossBlueShield of South Carolina, and Bill Mahoney, CEO of the South Carolina Research Authority.

Popcorn Initiative is a graphic design firm with over 15 years of experience in print and online design. Based in the Upstate as well as Florida, their dynamic portfolio includes work for clients such as the Red Cross, SeaWorld, and Disney. Areas of expertise includes creating unique, high quality designs utilizing untraditional materials such as wood, metal and rubber. Popcorn also specializes in concepting and designing corporate annual reports that tell a story and grabs the attention that annual reports deserve. It’s Design with Direction.

Business Black Box

http://www.popcorninitiative.com popcorninitiative@popcorninitiative. com (864) 834-3147

Get Connected: Connect with other business owners and tons of potential customers. Submit your business to our online directory for free at http://www.insideblackbox.com/directory

Lots more to see at www.insideblackbox.com

Popcorn Initiative

• WHAT - Grow Expo • WHEN - Thursday, May 25, 2010 • WHERE - Carolina First Center, Greenville • DETAILS- Taking place during National Small Business Week, this is the premier event for Chambers to celebrate small business and entrepreneurship in Greater Greenville. Register and enjoy a free, dynamic networking and learning experience as you grow your relationships and learn how to grow your business.

Word...

“Yo u com can ’ p eve etitor. t be ryth you ing. You c pick som You j an’t d r ust o ethi ng gott dam a a n go od a nd be t it.”

- Ge

ne B

erge

read on... pg. 24

Get connected by listing your event for FREE on our Business Black Box master business calendar:

Visit http://insideblackbox.com/Events 16

r

Q22010 Q1 2010

Simply fill out the form and we’ll get your event posted to the calendar.


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B O X RANDOM & RELEVANT BLACK

10 Tips:

GoingGreenin YourBusiness

More and more businesses are going green: Google, Coca-Cola, Dell, and Target to name a few.Your business should too—not to jump on an ideological bandwagon, but out of necessity. Going green not only helps to save the environment, but makes for cost saving opportunities as well.

1.

Reduce, Reuse, Recycle—in that order. Reduce the amount of paper you use by signing contracts electronically, or printing on both sides of the paper. Reuse misprints as scratch paper and shred it to be recycled as packing materials.You’ll be doing your part for the environment while saving on the cost of paper, ink, and toner.

2.

Encourage employees to rent business and leadership books from the local library instead of buying them. Library usage is up; a local library in Ohio reported seeing over 10,000 more people in the first two months of 2009 versus the same time frame in 2008.

3.

Install a water cooler at the office instead of buying bottled water, as well as using a pitcher of water and glasses in the conference room instead of bottled water.This will decrease the amount of plastic to be recycled and save you the expense of paying two dollars per bottle of water.

4.

Use reusable products instead of disposable ones: bring in coffee mugs instead of Styrofoam cups, and have some inexpensive plates and silverware instead of using paper plates and plastic utensils, reducing the amount of supplies you will have to continually buy.

5.

Buy energy-efficient products. As light bulbs burn out, replace them with compact fluorescent bulbs. You can get rebates and tax breaks for installing energy-efficient appliances and fixtures (you could even get paid by the utility company to install a solar panel on your roof!)

6.

Offer more green alternatives for transportation. Encourage carpooling between employees, or have a company bicycle for anyone who needs to run small errands. Look into the Commuter Check, which offers tax breaks for employees who use public transportation and their employers.

7.

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If you do need to buy a company car, get a hybrid or electric car, which eventually pays for itself on gas savings. Not only will it help save the environment, but switching to these vehicles can also qualify for tax breaks anywhere from $400 to $40,000.

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8.

Consider allowing some employees to telecommute from home one or two days a month. Employees have been found to be just as, if not more productive when working from home. This allows employees to save money on gas, as well as preserving air quality and road maintenance.

9.

Empower employees to contribute to the green initiative in your office by implementing new software products like GreenPrint that can eliminate unnecessary pages Q2 2010

before printing from the web or Surveyor, which automatically turns off all company computers at night. Both make it easy for employees to participate and ensure reduced consumption.

10.

Give your customers the option of contributing to your green efforts. Offer electronic bill statements instead of mailing out invoices or suggest a webinar or teleconference to spare transportation expenses. Show your customers how serious your business is about going green, displaying your integrity and social responsibility.


Grow Your

BUSINESS! Grow Your Business, Save Money, and Make a Difference in Greenville… Do you need to network with your peers and potential clients? Does your business need marketing and exposure? Do you or your employees need training related to running your business or growing revenue? If you answered YES to any of the above, then the Greenville Chamber is for YOU!

5 Reasons Why You Should Join the Chamber: 1) We are a non-profit 501(c)6 organization – this means 97% of your dues are tax deductible!

2) Our web site receives 350,000 hits a month! Your business is listed on our online directory which means exposure you can’t afford to miss!

3) Do you need a place to hold your next meeting?

R JOIN FO E L AS LITT AS $36 ! TH N O M A

All members can reserve our meeting rooms at no charge!

4) Networking, Networking, Networking! Join us for monthly programs like Business Before Hours, Business After Hours, 7 Experts – 7 Tips – 7 Minutes, Sales Roundtable, PULSE, and much more! All provide an excellent opportunity for you to showcase your company and meet potential clients!

5) Full-time Lobbyist on Staff working with all Upstate Chambers of Commerce – have your voice be heard in Columbia! Business Black Box

www.GreenvilleChamber.org • For more information, call (864) 242-1050. Q2 2010

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BLACK

B O X STATUS CHECK

Business Black Box

We all have quirks and failures, but what is the one thing that really gets to you during a business meeting? Don’t hold back—it may be something we can all improve upon!

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Q2 2010


Meetings, period. Standing meetings are the best. Doug Cone Principal, Nullvariable Web Consulting

If you can meet on the fly, that’s great. Or, if you have the

old-fashioned smelly markers and can color on the white board, those are really good meetings. Hopefully the whole concept of meetings can change now that so many collaboration tools are so readily at hand. Skype and DimDim might just revolutionize the way stuff gets done. Trey Pennington Owner, The Pennington Group

Meeting with someone that you know is not focused on you and your time during the meeting. Especially when it is someone that has asked to meet with you. I second the digital noise and I am guilty of checking when a new text message pops in. Patrick Van Every Senior Account Executive, Wastequip

Inappropriate content for attendees. Worst meeting I ever went to was a quarterly. Everyone knew that business was offpace, but I and two or three of the people in attendance were in Customer Service and could not affect whether anything was sold or not. Why management felt the need to depress and de-motivate the staff was beyond me. And though it was not discussed in the meeting, the only thing I and my teammates walked away from that meeting with was speculation on when layoffs were going to start.

Agendas (or, the lack of...) If you plan to have a meeting then you are gathering a group of people together and probably for their expertise—it is disrespectful to waste their time by being late, James Holloway unprepared or, as the leader, allowing the meeting to drift. If it is a Owner, South East Installation Solutions brainstorming session, assign a note taker and any other personnel to make the meeting go smoothly. Last, make certain that attendees get Traditional meetings do still have a purpose, even with all the communication and collaboration tools their notes, actions, responsibilities and available. However, there are a few key follow-up times (subsequent meetings, factors that must be considered to make action item timing etc.) Organization is I once worked for a real nut case these gatherings productive in the sense the key to a successful meeting. who insisted on all-day meetings with no of creating value. I often see meetings real agenda. We’d meander painfully and with an agenda but without a specific Hank Merkle overlay of desired outcomes (which Market Sales Engineer, ITW Shakeproof aimlessly over topics we were not going to actually should define the agenda). That do anything about and then he’d privately Ill-prepared meetings spell doom share his ideas for taking over the company. makes meetings activity-focused instead of result-focused. We allow participants from the get-go. The best meetings I’ve It was like spending a day shadowing an to be late and accept their “important” ever been in were thought out with key unnamed inmate at the Arkham Asylum explanations for being so, and than there heads clearly defined. for the Criminally Insane. is the issue of cell phones, e-mails, tweets, Phil Yanov etc and use of laptops in meetings that Steve Cox completely kill the effectiveness and Founder, GSA Technology Council Creative Director, Shorey And Associates efficiency. Short, focused daily stand-up meetings in an operations environment Digital Noise: People in meetings have proven very valuable, too. who do not silence the phone or PDA. No one wants to hear “Mama Said Knock You Out” when your Manfred Gollent mom calls to complain about how you don’t call enough. Executive Coach, QLI International Michael Murray I agree that technology cannot and should not replace faceOwner, First Place Employer Services to-face meetings. Saying that, face-to-face meetings have their place Meetings in messy, tight quarters. No place to present relevant and should be limited in scope and goal-focused. My pet peeves— papers, portfolios, etc., without having to shuffle around stacks of late starts (very inconsiderate to those who are on time), complainers clutter and cups of beverage. Especially when there’s a meeting table who pull the meeting off track, and lack of focus. down the hall. Julie Brown Owner, Godshall Staffing Services Joel Wilkinson Gallery Manager, Michael McDunn Gallery

should have a clear goal, be short, concise, targeted, and have a list of action items for team members to accomplish. A team member should also be assigned to follow up and make sure all members follow through with any assigned tasks and/or get help if needed. Jim O’Donnell VP of Marketing, Wolff Industries

Join the discussion! Join our group— Business Black Box—on LinkedIn to give us your feedback on this and many other subjects!

Q2 2010

Business Black Box

Lack of focus because there’s no predetermined goal. Meetings

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POLITICS POLITICS BLACK B OX

the people speak!

John DeWorken is partner in SUNNIE harmon & john DeWORKEN, LLC, specializing in government relations and advocacy. He can be reached at deworken@sunnieanddeworken.com.Visit their website at www.sunnieanddeworken.com.

......................................................... In the last edition of our political commentary, I talked about how regular, everyday folks were tired and frustrated at the anti-job growth legislation coming down from D.C. and how those people, who typically refrain from exposing themselves to politics, were getting engaged in what policy makers were doing. This frustration spilled over in Massachusetts. A once apathetic electorate became mobilized in the recent Massachusetts Senate election between Scott Brown and Martha Coakley. Brown, an anti-establishment Republican, was once an underdog who had no chance of contending with Coakley, a Democrat in a Democratic state who was planning to replace one of the most liberal Senators, Ted Kennedy. At the end of the day, as expected, the Democrats voted for Coakley and the Republicans voted for Brown. What did surprise many is the large turnout of independents in the election— independents who historically were absent from such elections. But not this one. Massachusetts independents voted two-to-one for Brown. They came out and collectively said, “we need to go in a different direction.” What they probably didn’t realize is that they not only changed the course of politics in their own state, but they may have changed the direction for the entire country. I also talked about the anti-economic growth policies that had a good chance of passing through Congress—certain provisions in the Healthcare bill, as well as Cap and Trade and the Employee Free Choice Act. With the election of Scott Brown to the Massachusetts Senate (instead of Coakley, who would have certainly stood behind Senate Majority Leader Harry Reid), those anti-economic growth policies have been stopped in their tracks.

Healthcare

Though the majority of Americans believe the nation’s healthcare system needs to be revamped, the majority of Americans did not believe Congress’ healthcare bill was the answer. Before the Massachusetts’ election, the healthcare bill was a certain shoe-in to pass. Now, not so much. Though the healthcare bill could have provided healthcare for more Americans, it would have done so at the cost of jobs. The bill forced employers to provide healthcare for their employees, whether they could afford it or not. This provision alone would have been a tremendous burden on business and, ultimately, a job killer. Additionally, the healthcare bill did not address lawsuit abuse, nor did it address competition, such as allowing consumers to purchase healthcare beyond their state’s borders.

Now that Brown has been sworn in, the Senate may not have the votes to pass healthcare as defined by Congress last year. As seen with Obama’s proposal in early March, Congressional Democrats will be forced to work across party lines to put together a healthcare package on which both Democrats and Republicans agree in order for anything to pass.

Employee Free Choice Act

Before the Scott Brown triumph over Coakley, this bill had an opportunity to pass through the Senate. Now, it will be much more difficult. A bill that unfairly favors unions will be three or four votes short of passing the Senate. The bill would eliminate secret ballot elections, it only would require 51 percent of the employees to participate in the union election, and it would force businesses to negotiate its contracts with DC bureaucrats—even for private businesses in right to work states. Prior to the Brown win, the Senate was two votes short of a filibuster-proof vote to pass this bill. Now, they are three votes short—a huge differential inside the Beltway.

Cap and Trade

Americans overwhelmingly believe that industry has a responsibility to protect the environment. But, Americans aren’t sure that forcing American companies to implement standard carbon emissions that put the country’s companies at a huge competitive disadvantage is the answer. Even here in South Carolina, jobs could be at risk if this bill passes. According to the American Legislative Exchange Council, if Cap and Trade passes, “It will negatively impact South Carolina’s economy by raising energy prices and reducing household income. South Carolina would be the 43rd “Biggest Loser” in the country. According to the Heritage Foundation, between the years 2012 and 2035, South Carolina would lose each year an average of 18,572 jobs, $3.49 billion in gross state product or about $726 per person.” With Brown opposed to Cap and Trade, the Senate Democrats will be forced to horse trade some provisions with the Republicans to have an opportunity to pass this bill. At the end of the day, what the Massachusetts voters did was more than just change their own destiny; they may have changed the direction of the entire United States government.

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by Jordana Megonigal / Photos by Brad Forth

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A business genius. (Minus the suit, of course.)

t ’ n d i Id h s I i t a Iw h w w o n . n w e o h t n k w o n k didn’t

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Not that a suit has anything to do with business acumen; thank goodness it doesn’t, in fact, or the Upstate might be less one more independent retailer today. Because Gene Berger doesn’t wear a suit. Ever. But boy, does he know business. And not just the music business—he’s chock-full of knowledge that even the best of the best suit-wearers would pay for. So instead, you’ll find Berger in his trademark t-shirt and jeans, wire-rimmed glasses that reminisce of John Lennon, spouting business acumen gleaned not only from experience, but also from bloggers, actors, book characters, CEOs and heck, even Coco Chanel (who said, “Strength is not built by successes. It is built by failures.”). He’s an anomaly in the daily business world—a man who felt at home in the culture of the ‘60s and ‘70s; who started up on a shoestring and continues to run on one; one who decided the world needed him and has fought every fight imaginable to keep his dream alive. About 34 years ago, Berger, a dropout from Miami University (Ohio, not Florida) came back to his hometown of Greenville with the idea that he’d start a record store. He had worked for BJ Music, the local standard at that time, while in high school, where he’d spend every $5 or $10 that hit his pocket on another album—but decided that the world needed him to start one of its own. “I was cocky then,” he says, grinning. “I thought I knew everything about a single subject and thought the world needed me

to start the next big record store.” But soon after starting Horizon records in 1975—with a $5,000 loan, a 600 square-foot location and a name in tribute to his favorite college hideout—he realized he knew very little. “I didn’t even know how to fill out a deposit form,” he says. Still, for 25 years, the little storefront on Pleasantburg made its way. It saw Berger’s marriage to Barbara in 1981, as well as the boom of banking loans and cheap real estate in the ‘80s. It was in the ‘80s that Berger made his first location move, with some easy-to-get real estate he was able to acquire during the heights of that decade. But in 2000, as the business turned 25 yearsold, he began to feel that same pull toward something more. “I’ve learned, over the years, to listen to those with more experience than me,” he says, referring to the moment a local banker told him to move off of Pleasantburg and get his own location. Over the next year, Berger cultivated his wish list for a new store—one that included sharing space with another business like a coffee shop or a bookstore. He wanted to be near downtown Greenville, but have available parking. He wanted to be in an area where he could build Horizon with the support of the community. After numerous failed attempts to find the “perfect” space, Berger employed the use of a friend to help him find an area he could grow in. It wasn’t too long after that she returned with a listing of an abandoned gas station off the corner of North Main and Stone Avenue. Renovations began immediately, adding spaces and rooms to make the old station functional as a music store.


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In May 2003, the new location opened. “The fire marshal cleared the building, and I literally asked him to switch on the ‘Open’ sign on his way out,” Berger says. It seemed, however, that as soon as the store opened, the industry began to quickly unravel. The technological shift of the new millennium began moving music consumers through big-box stores like Best Buy, then to e-tailers like Amazon, and finally to filesharing and sites like Napster. “It seemed like the media had nothing to talk about except the death of CDs,” says Berger. Still, he notes that “you can find the same stuff online, but you can’t get the same experience.” It’s this experience that has not only kept Horizon alive during the media shift, but has made the store into a commodity that people now seek out. Horizon, as Berger puts it, is “highly specialized” and “not entirely obsessed with the new release of the week.” In fact, he admits to not even knowing who Hannah Montana (or Miley Cyrus) was when she topped an industry chart and people began to call looking for the album. (He doesn’t seem to ashamed by that fact, either.) Instead, Horizon has become a location for collectors, not as much for what Berger calls the “mass consumer who likes to swallow music whole.” He’s not built for the solely-iTunes crowd or for those who like to copy discs. Rather, he’s built for people who like music; who like culture and trying new things.

Without music to decorate it, time is just a bunch of boring production deadlines or dates by which bills must be paid. -Frank Zappa

Business Black Box

“The coolest day was when I sold a used copy of a book by Dostoyevsky and a Deep Purple album to the same customer,” Berger says. Still, he’s not one to ignore the market shift, either. Speaking of the economy that touts the death of the record store in an obit section that includes textile mills and newspapers, Berger simply says, “We all find our path. We all have to learn to be multichannel.” So, Horizon sells albums on E-bay and Amazon. The website has become very popular, albeit as a window to the store more than the site itself. The store includes all formats of music— from the classic vinyl record to the modern CDs. “Technology will never be rolled back,” Berger says. “People will continue to seek content online, but there’s a smaller field of people who want the object itself. “It’s a smaller industry. I’m not gonna have the sales levels that I had 12 years ago.” And that’s okay with him. He’s not delusional about the state of Horizon or what it will produce. “[Horizon] has never been a cash cow,” he says. “We’ve been a local institution that has always creatively made its way.” The Q2 2010

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sample. “Every time a customer opens their wallet, they are giving us something precious to them,” he says. “In this day and time, I am truly grateful for them.” And even with the “death” of the music industry that Berger grew up in, he’ll still see 30 percent of his sales come from vinyl, and even more come from used pieces. So in the back room of Horizon Records—a room shielded by a beaded curtain and piled high with vinyl albums and CDs waiting to be sorted—sits Gene Berger, with a trademark coffee mug in hand. He daily stares fate in the face, making decisions that could, at any time, make or break him in this economy. And although he’s made some errors over the past 34 years, he’s still going strong, and becoming a community leader in the midst of a time that says he should be out of work. “I’ve had a number of times where I’ve made mistakes that could have completely derailed all this,” he says, with an intent gaze at a poster hanging over his desk. “I understand what it’s like to not be able to live the vision…but we just focus on what is core to us; we can’t worry about the rest of it.” After all, he adds, another bit of wisdom gleaned from years gone by, ”You can’t be your competitor.You can’t do everything.You just gotta pick something and be damn good at it.”

“creative” part he speaks of could mean anything from keeping the store a family business (his son works in the store, and his wife, Barbara, only recently left the staff to fulfill her career in bookkeeping), to thoroughly examining each and every purchase. In fact, Berger notes, it’s the times that he only had $100 a week to spend on new music that he made the best decisions and deals. He notes that a lack of abundance forces you to make very good, carefully analyzed decisions. In fact, not only does Berger see the changing face of the music industry in a positive light, but he also feels that way about the economic recession. “In some ways, I think the implosion has been positive,” Berger says. “It’s about seeing reality. After all, we only learn when we are in pain.” He adds that the positives for everyone include creating new opportunities for success and getting people—especially business owners—away from the idea of easy money. “We’re all a little wiser now.” Then, with the wisdom of a highly-paid business consultant, he adds, “It’s the ‘New normal.’ And those who don’t make adjustments for the ‘new normal’ will go out of business.” The “new normal” in retail, Berger sees, is one that is personal— or what he likes to call the “Cheers” factor. “People get sick of the impersonal,” he says, noting that although you can get cut-and-paste content anywhere these days, it’s nowhere near the same as sitting in the Bohemian listening to a local artist. For him, Horizon customers are his greatest asset, and he takes them seriously. He packs the store with every kind of music imaginable— much of it hard-to-find, vintage or used. He’s glassed in a separate room for his customers who like to drown out the overhead music to fully appreciate Classical selections. He’s added used books, stereo equipment, and used formats to the store. The staff will help a customer find what they are looking for, or make suggestions based on likes or dislikes. He has a full section for local artists, and will consign anyone—yes, anyone—who walks in with a

Music is nothing separate from me. It is me...You’d have to remove the music surgically. - Ray Charles

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Business Black Box

There is n o such the way o ut’ as long thing as ‘on as doing som ething inte you are still r good; you ’re in the b esting and usiness be you’re bre cause athing. -Louis Ar mstrong


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CEOs & LEA B O X CEOs & LEADERS BLACK

reproducers v. producers

by geoff wasserman

Business Black Box

Geoff Wasserman, CEO and president of Showcase Marketing and Publisher of Business Black Box, spends most of his business time advising and consulting with business and ministry leaders developing growth strategies. Before starting Showcase Marketing in 1999, Geoff spent seven years in sports marketing with the Montreal Expos and the Atlanta Braves, and seven years as managing director in the financial service industry with two Fortune 500 Companies.

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You’ve probably heard it said that seeds produce after their own kind. In other words, apple seeds don’t produce cucumbers, they produce apples. Acorns produce oak trees. A seed produces what’s in it. At the top of most organizations and/or divisions, there’s generally one of two types of leaders: Reproducers or Producers. Reproducers, generally, are reproducers because they reproduce reproducers. It’s what they’re wired to do. Producers, if given a leadership position, typically produce producers. Stick with me, and think about your current team, and who falls in which category: recognizing what kind of leader you are (a reproducer or a producer), and recognizing what kind of leaders you have in your organization, can go a long way in eliminating frustration and setting realistic expectations. It will also help you in determining who should be championing what, and why you should hand off responsibility of cultivating a leader to a reproducer, versus handing off the responsibility of executing a project to a producer. A reproducer is wired to reproduce reproducers, and gifted at spotting them quickly. In other words, inside him/ her is the capacity to identify, develop and release other leaders who can exponentially reproduce other leaders

Q2 2010

so you as an organization can expand capacity, add other services and products, a lot faster. A sign of an organization led by a reproducer is rapid horizontal growth. New division rollouts, more risk taken to penetrate new markets, etc. Producers, however, if put in a leadership position, will typically raise up other producers. A producer in a leadership position can typically build a strong unit of production capacity, and continue to find opportunities for efficiency, savings, and increase output capacity. A sign of an organization with a producer at the helm tends to be laser-beam focused in a single discipline and vertically competitive (multiple layers of experience and depth within a single market space). However, don’t place a false expectation that out of that unit will come your organization’s next reproducers. Every organization needs both. Just make sure the right one is in the right seat on the bus.

ck a b d Fee m, advise andisit

ou v s stor Brain in when y om/CEO c . h x ig we kBo eBlac Insid


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SMALL BIZ SMALLBIZ BLACK B OX

you've got a good business if others want to buy it by tony snipes

Tony Snipes is director of Redemption Marketplace Alliance, a Greenville-based entrepreneurship training program, where he utilizes a unique combination of years of leadership experience in the corporate arena with ministry experience in the community. Tony has spent over a decade as an internet publishing and advertising expert, helping clients for news media companies such as the Greenville News, The St. Petersburg Times, and News Channel 7 WSPA.

..............................................................................

Here’s a secret mindset to have in order to help you grow your business start up and maximize its value: run it like you want to sell it! Where does this concept come from? It’s a concept modeled after homeowners that wish to sell their homes. No matter what problems, blemishes, short cuts or work-arounds the homeowner has grown familiar with or tolerated, when it’s time to put their house up for sale, there’s a concentrated effort to make sure that the home is upgraded and polished so that its value can be easily recognized. But, how does this apply to the entrepreneur? Some homeowners clean up their homes so well for the sale that they decide to keep it for themselves. The goal is not necessarily to put your business up for sale, but to adopt a mindset that allows you to develop your business so well for yourself that others see the value and would want it for themselves. So what would it take to make your business so appealing?

phone, how a message is taken, what language is used, how meetings are conducted—the very culture of your business. What makes this significant in the sale of a business is that structure and methodology that leads to your business’ success are defined, making it easy for a buyer to pick up where you left off on the road to success.The good thing about our scenario here is that you don’t have to trade that success off to someone else.

4. Establish relationships: What, or better yet, “who” would a buyer get in addition to the business itself? A loyal customer base with relationships that your company has established is an obvious answer. You can make sure that you connect and keep your customers through good oldfashioned customer service. You can build upon that concept by using the new tools that social networking on the web has provided such as with FaceBook and Twitter. Affiliations with other companies and organizations in your company’s circle of influence add value to your business as well, and would make your business even more appealing to a buyer.

1. Having a clearly defined value position: You must communicate what your company does best and why what you do best is needed. An easy way to clarify this is to ask yourself, “Why does my business exist?” with the follow up question, “What would happen if my company did not exist?” The answers should lead right to the problems that you solve for people who need you to solve it (your customer base). Clearly defining this would make a potential buyer desire to own your business. It also would help you, as the current owner, to stay focused by keeping the “main thing the main thing”.

2. Be on the right road toward profitability:

3. Establish your brand: This is not limited to having your logo, business cards, etc., although those things are a part of your brand. What your brand truly means is the establishing of your company’s identity and culture. This not only includes the logo and business cards that you immediately think of when the word “brand” is mentioned, but it also includes how you or your employees dress, how you answer the

ck a b d Fee m, advise anvdisit

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Too many businesses fail to use what some have called the “report card” for determining if the business is experiencing a profit or a financial loss. That report card is a Profit and Loss Statement, or a “P&L”. Planning your start up’s progress with this tool will clearly define what actions are required to make your business activity turn a profit. Documenting this potential to make money is what gets the attention of a potential buyer of the business. What’s better in this scenario is that the business is yours to hang on to.

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BLACK

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B O X TRAILBLAZERS

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ometimes being a trailblazer means taking a chance. For Elizabeth Garrison, making a career move in a relatively untested market on her own home equity was worth the benefit it would bring to the Upstate. Today, she’s the president of Ever Green Recycling, but along with all of the paper signing and executive decision-making comes less pleasant responsibilities—namely, a fair share of garbage collecting and transporting. Garrison hasn’t always been a trailblazer, although the influences that caused her to become one have been at work for many years. Initial career ambitions landed her in the field of broadcast journalism. However, after weighing the pros and cons of the industry and analyzing the competiveness of the field, she decided to move in another direction—which led her to the first stepping stone in her path to becoming a trailblazer. Garrison moved into pharmaceutical sales. It was during her seven and a half years in this field that she found the catalyst to her trailblazing work. Part of her job included entertaining clients, and during these times, she began to notice what was being thrown into the trash. “I really noticed what trash was going to the landfill, and it was valuable stuff,” she remembers. The sight of this waste in addition to her background got the ball rolling for Garrison. “I’m from a farm in Anderson, and I think farmers are really great recyclers—composting materials that can be composted, reusing wood, reusing metal because you might be able to use it for welding,” she explains. “We were always being very conservative with our resources.” Soon, Garrison moved on to economic development—all the while taking note of waste and recycling efforts in the Upstate.This new field left a definite impression on her. “I was so encouraged by entrepreneurs,” she says. “They were doing great things: employing people, making dreams come true.” Garrison continued to work in economic development for about a year and a half. After that, her ambition and inspiration took over, and she began a movement—and company—of her own. “I took the jump,” she says. Garrison walked the streets of downtown Greenville, testing the waters, seeing if businesses would recycle, given the opportunity and feasibility. “I started going door-to-door with businesses in downtown Greenville,” she remembers. “I found hotels were interested, as well as a couple restaurants— Coffee Underground and Barley’s.”The desire was there; now, she needed a plan. She had discovered a business in North Charleston, S.C., Fisher Recycling, to build her business plan off of, and a mentor in the business’s founder, Chris Fisher. Having found a working business model to emulate, Garrison started Ever Green Recycling in the fall of 2007, in order to provide recycling capabilities to businesses in the Greenville area who were unable to do so themselves.“I kept my day job, hired somebody, and got a truck and trailer, and officially started picking up (recyclables) in November,” she says. The smell of empty milk jugs in her convertible was worth the good it would bring to the Upstate—and it continues to be, although the company now has garbage trucks. Her initiative encompasses both preserving the planet and developing business in the Upstate, but it starts with each individual and every business. “At the end of the day, I wanted people to think twice before putting something in the trash can,” she says.

1995

Graduated from Clemson University with a degree in speech and communication studies

19961998 19981999

TV News Reporter at Northland Cable News, Seneca, S.C.

19992007

Pharmaceutical Sales Rep for Bristol Myers Squibb

20072008 2008-

Project Manager for the Greenville Area Development Corporation

Marketing Coordinator and Sales Rep for Century BMW in Greenville

TRAIL BLAZERS BLAZERS 12 present

While at BMS, Elizabeth won four Pinnacle awards which are given to the top 5 percent of the sales force. Professional organizations: • Carolina Recycling Association SC Recycling industry Group: Committee chair • Green Building Council; Greenville Branch Greenville City Climate Committee Elizabeth is also a owner/operator of the Denver Downs Corn Maze in Anderson.

Profile by Andrew Brandenburg

The facts:

700 2,000,000

Years before plastic bottles begin to decompose in a landfill Tons of trash imported into S.C. each year

80

Percent of what Americans throw away is recyclable

28

Percent that is actually recycled

Full-time Ecopreneur


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GLOBAL GLOBAL BLACK B OX

the evolution of the expat

by ravi sastry

part 3 of 4

Ravi Sastry is president of International Innovations, a consulting firm specializing in American and Asian business and commerce. He has held senior management positions in international sales, marketing, logistics, and operations. During his 25year career, he has lived and worked in 14 countries on three continents, forging strategic relationships with industry leaders like Bosch, IBM, McKinsey, Samsung and others.

the complex multi-tasking required to be successful. Yet, in many cases, the business declined in revenue, and margin and fundamental operational issues started to wane. As a result, these companies usually decided to send the expat back to “fix the problem.” While this scenario seemed to be a trend, it is important to keep in mind there are very intelligent and capable managers in all parts of Asia. The “Holy Grail” is finding a person that has Western company experience combined with the understanding and appreciation of Asian business culture. In part three, we will further discuss the details of this In the January issue, we discussed how to determine whether sending an expat was best for your internationally-growing company, transition from expat to global executive, and the successes and in comparison to using locals from that region. It’s a complicated failures of each. decision as to who will best represent you on a global field, and one that should not be taken lightly. If the decision has been made to send a key manager to another country, planting someone from the U.S. “in-country” is expensive, especially if a family is being considered. On average, it costs a company approximately $600,000 to $1,000,000 per year for a family of four, depending on the package. Twenty percent of all expats return prematurely and more than 30 percent of those that stay until the end are ineffective. This is due to the fact that the manager was chosen for the assignment based on their technical skills rather than doing a proper assessment of their overall capabilities. The key to any successful expat is 70 percent attitude and 30 percent job skills. In addition, there are three characteristic quality levels that build on each other that must be considered in vetting the right manager for the expat assignment.

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The Right Stuff • Level I – Professional Qualities • Technical and corporate experience • Experienced in managing others (three or more) • Well-respected within key departments • Clear communicators, oral and written • Level II – Personal Global Qualities • Multicultural mindset; affinity for working with foreigners • Commitment to learning • Good work/life balance • Goes the extra mile in areas outside of the job function

Over the years we have seen many companies replace expats with locals. The primary reason for this move is usually cost cutting and the assumption that local management could handle

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• Level III – Personal Asia-Specific Qualities • Strength and humanity • Ability to network and build relationships • Speed and patience • Can serve as a well-balanced spokesperson for the company

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The acquisition is Buffett’s “bet on the country.”

Business Black Box

But a $44 billion gamble based solely on chance assumes a lot. So what has Buffett seen that the rest of the world needs to catch up on? With the federal government feeding tax dollars into the highways, airports and sea ports, how will the privatized rail industry affect the future of this nation?

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By Andrew Brandenburg

Q2 2010


Business Black Box

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The

R D Regaining

AND THEIR

PLAYING FIELDS PUBLIC PRESENCE One of the largest differentiations most people need to make when considering the rail industry is passenger rail versus freight— they’re handled through different companies. While companies like Amtrak and city transit systems, like Chicago’s CTA and Washington, D.C.’s, Metro Rail, transport people from point A to point B, freight rail lines fall into three different classes. “You have to look at the rail industry in two separate ways and the majority of Americans, right now, when they look at the industry think of passenger rail—they think Amtrak, they think ‘moving people,’” Sarah Lynne Howie, director of operations for Rail Training & Consulting, Inc., explains. “But the greatest need for rail really has to do with freight, in my opinion.” As of September 10, 2009, the United States currently has four transcontinental railroads categorized as Class I, according to the Association of American Railroads—these lines consist of rail companies with a 2008 operating revenue of $401.4 million or more (these numbers fluctuate based on inflation).These main Class I rail companies consist of Burlington Northern Santa Fe (BNSF), Union Pacific (UP), Norfolk South (NS) and CSX Transportation Following those, Class II railways operate on revenues below that of Class I’s but exceeding $20.5 million, and Class III’s operate on revenues below $20 million. Class I railroads operate on a national level, while Class II do so on a regional, and Class III on a local.

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We touch almost anything American consumers have purchased in one way or another.

For years now, the railroad industry has keyed in on specific sectors of the shipping industry, primarily raw materials, grains, coal and hazmat materials. “Raw materials and automotive,” Howie says. “With the downturn of the economy, the initial hit was on moving cars, moving steel and probably other building materials like pulp wood, but grain has always stayed relatively constant depending on where you are. Raw materials are primarily what you’re going to see.” While many goods shipped in the U.S. fall along the lines of raw materials, Gary Sease, spokesman for CSX Transportation, headquarted in Jascksonville, Fla., is quick to note that the diversity of products shipped by rail is quite large. One way trains take part in this is through soliciting business with large retail providers. “There are a lot of commodities that are best-suited for railroad move—big bulk products,” Sease says. “To gain business from big box retailers—like Wal-Mart, Target and express shippers like UPS—you have to meet certain performance standards and actively pursue business with them. “We touch almost anything American consumers have purchased in one way or another,” he continues. Q2 2010

Part of the intrigue of the railway industry emanates from the fact that it has historically fallen into a behind-the-scenes role in the goods transportation industry. “Our industry has largely been invisible to Americans in the past, and we do some advertising now to help people see the value we provide, but it’s amazing to see when people understand,” Sease says. “They start to have a new appreciation for what we do and what they have.” But beyond a warm feeling inside, the railway industry promotes local and international shipping through several means. One of the main ways they’re able to do so due to the fact that much of their business is eco-friendly. Railroads are able to move one ton of freight an average of 423 miles on a single gallon of diesel fuel. According to the Association of American Railroads, the average rail rates for U.S. freight—based on revenue per ton-mile—have fallen 49 percent from 1981 to 2008, across geographical regions and for nearly every commodity. In addition to that, “U.S. freight railroads are the most affordable in the world,” according to the AAR. “According to World Bank data, average U.S. freight rail rates are half those in China and Japan, and 50 to 75 percent below those in major European countries.” “We’ve been around since the early 1800s,” Sease says. “We are experiencing a railroad renaissance in the fact that the country is beginning to recognizing the railroads again. We have an industry that’s incredibly fuel-efficient.” And it’s through this renaissance that the logistics of shipping bulk freight in the U.S. will evolve in future. “The way this country is continuing to grow, there’s only so much land; there’s a fight for that land, so it’s either build more roads and put heavy trucks on them and make our travel and logistics very inefficient, or use the rail lines that are already out there,” Howie explains. However, that’s not to imply that rail will be overtaking or boxing out the trucking industry. Rather, transportation logistics are beginning to realign in search of a better-suited balance that complements both industries, as well as the country. “As our population grows, our highways are crowded, and people are seeing the value of rail,” Sease says. “Highway infrastructure is hard for public entities to maintain, and there’s little ability to build more lanes. Capacity will be reached, and we’re going to need a place for freight to move alternatively. A lot of truckers are partnering with railroads to move containers of fright on railroads, and the trucking companies provide the shorter haul at the end of the move.” Intermodal transportation is a big deal for the railroad industry. Instead of it being an “all or nothing” situation for both the trucking and rail industries, this form of transportation offers both the opportunity to work together. Where railroads can go, they can transport fright for cheaper and more quickly, in general. Once reaching a specific area, though, they’re able to pass on that freight to trucks who are, in turn, able to finish transporting those goods to their final destination. In addition to continental transportation, many people don’t consider (or realize) the potential for railroads to play a part in


Determining UPSTATE RELEVANCE

On the grand scale, the railroad industry has the potential to streamline and revolutionize the way the business of shipping is carried out in the U.S. But how does national potential filter down to Upstate relevance? Will it change what professionals here see day to day? “When you look at the short line rails especially, these guys are members of the community,” says Dave Whorton, manager of communications and data for the American Short Line and Regional Railroad Association (ASLRRA). “Some of them are little ‘mom and pop’ railways, and every mile they run is in their area. Big players rely on these railroads to get their goods to the final destinations and pick up outgoing goods, so it’s important for these railroads to have a good relationship with their local area.” That being said, it’s absolutely essential for large and small railways to work in conjunction to ensure the success of each other. “Many short line railroads have interchange service agreements

We are experiencing a railroad renaissance in the fact that the country is beginning to recognizing the railroads again. We have an industry that’s incredibly fuel-efficient.

As our population grows, our highways are crowded, and people are seeing the value of rail.

development,” she continues. “There always have been short lines who are willing to diversify their business locally—they’re working very closely with their economic development representatives, saying that they want to be included.” Whorton referenced a local railway, Greenville and Western Railway, as a prime example of success with good economic development for a short line company. “They have a good track record working with their economic development organizations,” he says. “They have industrial development sites in that area and have a working relationship with the local economic development authorities to make sure they’re getting populated by the right businesses.” “When we purchased the railroad people thought we were nuts,” says Steven Hawkins, president of Western Carolina Railway Service Corporation. “I saw the potential; not to mention that “no” is motivating for me.” Greenville & Western Railway Company, LLC (GRLW), is a wholly-owned subsidiary of Western Carolina Railway Service Corporation, which owns and operates 12.74 miles of rail line in Anderson County, S.C. When the need for ethanol in the fuel industry arose, Hawkins saw an incredible opportunity for the rail industry. “Long story short, from my exposure in consulting I saw potential because Belton is where fuel is being blended,” Hawkins explains. “It only makes sense that if they can unload ethanol on location rather than offsite and trucking it in.” And that’s where the opportunity surfaced. Hawkins made investments in rail and land and set his plan in motion. His initial rail purchase took place more than three years ago now, and in reply to the naysayers, his business has much to show. GRLW has received the “Jake Award With Distinction” for the past three years from the ASLRRA for having no reportable injuries each year. In addition, GRLW was honored with the ASLRRA 2010 Marketing Award. The success of Hawkins and his business bring more to the community than local pride and recognition. Due to Hawkin’s research prior to his purchases, he was able to invest in an area that Q2 2010

Business Black Box

with the Class I’s they connect with,” Whorton says. “These agreements state what each party is responsible for when cars change tracks. Every one of the Class I’s has a short line department that makes sure relations are going well with their short line partners, and since so much of the work involves interchange with smaller railroads, you might say that’s their primary job.” Whorton also explains how expanding rail coverage in an area—even short lines—is beneficial to the economy. “One of the main points we’ve been pushing is that one railroad job translates to 4.5 extra jobs in the community—specifically in industrial development sites as liaisons between the community and the railroad,” he explains. “Basically, their impetus is great because they’re part of the community. If things are going well, they hear about it; if not, they hear about that as well.”

The local benefits of railways exceed creating new jobs and facilitating shipments for local business. Through strategic economic development, properly grown rail systems can actually draw and grow new local business. “When businesses relocate, they look for three things in an industrial park: access to interstate, rail and water,” Howie says. “Forward-thinking railroads have done a good job of bringing in clientele, but it’s not like a railway can just reach out to a business and say, ‘Hey, you, we want to transport your goods.’” The key lies in building a trade hub capable of supporting not only a diversity of transportation, but also a myriad of businesses. “The success and growth of the railroad industry is tied to economic

D

transcontinental shipping. By hauling freight to and from ports, the rail industry is opened up to and able to take part in transporting freight all over the world. BNSF conducts business with China, through L.A. ports, which is then connected with railways overseas.

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Types of Freight

CARRIED FOR THE YEAR 2008 COMMODITY GROUP

Gross Revnue** TOTAL (000)

(%) OF

TOTAL (Million)

(%) OF

Coal 878,569 45.4 % $14,200 23.5 % Chemicals & allied prod. 176,108 9.1 7,717 12.8 Farm products 155,950 8.1 5,403 8.9 Non-metallic minerals 132,352 6.8 1,749 2.9 Misc. mixed shipments* 120,278 6.2 8,184 3.5 Food & kindred products 105,071 5.4 4,610 7.6 Metallic ores 59,986 3.1 637 1.1 Metals & products 54,420 2.8 2,664 4.4 Waste & scrap materials 48,848 2.5 1,415 2.3 Stone, clay & glass prod. 45,275 2.3 1,636 2.7 Petroleum & coke 44,690 2.3 1,867 3.1 Pulp, paper & allied prod. 34,130 1.8 2,228 3.7 Lumber & wood products 30,856 1.6 1,684 2.8 Motor vehicles & equip. 24,791 1.3 3,623 6.0 All other commodities 22,442 1.2 2,895 4.8

Total

1,933,766 100.0 %

$60,513

100.0 %

* Miscellaneous mixed shipments (STCC 46) is almost all intermodal traffic. Some intermodal traffic is also included in commodity-specific categories. STCC 46 accounts for over two thirds of intermodal tonnage ** Gross Revenue is not adjusted for absorption (incentive rebates etc.) or correction

Business Black Box

Statistics provided by the Association of American Railroads.

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Q2 2010


could support his industry and benefit from it. “[The community has seen] the trickle down effect of jobs being created at facilities, and additional truck-driving jobs as ethanol comes here,” he says. “It’s driving job-creation in the local economy rather than supporting other economies.” He continues by explaining how community awareness is all about perspective. “Don’t put your blinders on, and look at what’s in front of you—look at the impact your job is having around you,” he says. “I’m supporting the economy not only through the taxes I pay, but also through the jobs I help create and economic development made.” Looking toward the future, Hawkins, a Taylors native, sees the potential for more local growth not only for his business, but also for the local economy. “I see more growth in the future,” he says. “I believe the Piedmont region is the next industrial growth region. Textiles are gone, so we have available land and work force, lower taxation, and great potential for job growth.” Another example of the rail industry’s involvement in economic development is South Carolina Public Railways (SCPR), which “was created for the purpose of economic development in 1972

When we purchased the railroad people thought we were nuts. I saw the potential.

RAILROADS Carolina Southern Railway Conway, S.C. Miles of Track: 85

Carolina Piedmont Railroad Laurens, S.C. Miles of Track: 34

East Cooper & Berkeley Railroad Huger, S.C. Miles of Track: 17

Greenville & Western Railway Anderson, S.C. Miles of Track: 13

Hampton & Branchville Railroad Company Hampton, S.C. Miles of Track: 40

Lancaster & Chester Railroad Company Lancaster, S.C. Miles of Track: 60

Pee Dee River Railway Bennettsville, S.C. Miles of Track: 20

Pickens Railway Pickens, S.C. Miles of Track: 37

Port Terminal Railroad North Charleston, S.C. Miles of Track: 10

Port Utilities Commission Charleston, S.C. Miles of Track: 10

South Carolina Central Railway Company Hartsville, S.C. Miles of Track: 90

Waccamaw Coast Line Railroad Conway, S.C. Miles of Track: 14

CSX (Class I)

Jacksonville, Fla. Miles in S.C.: 1,700

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as Amoco Chemical was looking to locate a plant in Berkeley County,” says Jeff McWhorter, president and CEO of SCPR. “They had a requirement for rail service and the closest rail line was 15 miles away. The carrier, CSX, was not agreeable to build the 15 mile connection to Amoco, so the South Carolina Public Railways Commission was created by the legislature to build and operate the rail line needed to connect Amoco to the CSX rail line at Cordesville.” Following that first project, SCPR has worked to facilitate economic development in the state. “Since our creation, we have actively participated in economic development projects throughout the state that have a rail component,” McWhorter says. “Such projects have included Amoco Chemicals, Nucor, BMW, Michelin Tire, and Bridgestone to name a few. We also work very closely with the South Carolina State Port Authority to attract interstate commerce and facilitate the movement of that commerce through our port as we handle all rail switching operations within the Port of Charleston.” SCPR’s work in the area of economic development can take on varying levels of involvement, depending on the project. “Whenever a prospect who has a need for rail service comes to South Carolina through the Department of Commerce or the Port, we usually become involved at the very least as consultants regarding rail issues, or to facilitate service design with our Class I partners (Norfolk Southern and CSX), or to build and operate a railroad to provide a connection to NS or CSX,” WcWhorter explains. Encouraging for our state, involvement in economic development is pushing progressive areas in the right direction

South Carolina

Statistics provided by The South Carolina Association of Railroads. Q2 2010

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and building business in regions that can, in turn, support business through comprehensive and cost-efficient transportation options. “Our involvement has been instrumental in getting companies to locate in South Carolina by providing the unique services that we do in facilitating connections to the Class I carriers,” McWhorter says. “The result has been new investment, jobs, and overall economic viability for our state. We have played important roles with projects that have resulted in historical and record-setting investments in South Carolina.” The recent success for the rail industry in not only the country, but the Upstate specifically, while great in its own regard, seems to be only a precursor to where the industry is headed. “There

The challenge is to recruit new people into our industry. Even though we’re an old industrial industry, there’s a lot of technology and a lot of rewarding, fulfilling careers.

has been a dramatic resurgence in rail over the past few years,” McWhorter says. “It began with the high gasoline prices we were experiencing then and it is continuing now because it makes good economic sense, and it is environmentally friendly to utilize rail.”

Evolving

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WITH PURPOSE

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Looking toward the future, the rail industry has massive potential to revolutionize the freight industry in the U.S. and the Upstate but faces some challenges as well. Within the near future, one major change the rail industry will experience is a massive shift in workforce. “There’s an estimate that 60 percent of the railroad industry is set to retire in the next five to 10 years, so you’re seeing a lot of that old-school industry going away,” Howie explains. Sease explains why this is the case. “The reason that so many people are going to be retiring has been that for years, the railroads were struggling a bit financially so we weren’t hiring people at a rate that kept a steady supply of new employees,” he says. “The challenge is to recruit new people into our industry. Even though we’re an old industrial industry, there’s a lot of technology and a lot of rewarding, fulfilling careers.”

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“If the industry doesn’t move forward, it’s not going to be able to handle the mass exodus we’re getting ready to see from a personnel standpoint,” Howie continues. “When 60 percent of your workforce is gone, if you don’t change your way of thinking when hiring Generation X and Y employees, you’re not going to get the same productivity.”

FAST FACT: In 2007, CSX employed approximately 1,100 South Carolinians at an annual payroll of over $60 million. They also handle more than 555,000 carloads of freight in S.C. annually. Along those lines, railway companies are taking an active role in shifting their cultures in order to accommodate this upcoming surge of younger workers. “We have to make allowances for the different needs and different value systems that new people coming the industry have and accommodate that, and we’re excited to do so,” Sease says. “As we need younger people to come into our workforce, we’re becoming more progressive on many fronts: making our company culture one where everyone participates and has equal opportunity, and everything that makes a company a good place to work.” Practical application to the mass exodus of personnel approaching the rail industry: many of the workers about to leave the industry will not have the opportunity to train incoming, replacement staff, so the railways are developing training programs in order to successfully transition new employees into jobs that will soon be vacant. In addition to upcoming personnel shifts, the rail industry is also beginning to advance in the technological realm. “Technology has prevented railroads from advancing,” Howie says. “The railroad industry has done too much on paper for too long.” However, according to both Howie and Sease, rail companies are making technological advances. “We have been sometimes slow to adopt the practices because we want to be absolutely sure that they’re applicable and profitable,” Sease says. Recent initiatives by the government have also played a role in incorporating new technology in the rail industry. New technologies expand farther than just offices and ports. “The railway went away from coal to find a better, more efficient way to operate, and the rest of the world will have to as well,” Howie says. “We’re working to invest in more fuel-efficient automotives,” Sease continues. “We’re also working on consolidating freight on trains and other initiatives that would reduce our carbon footprint.” Overall, rail’s biggest challenge is growing business and revenue in order to not only maintain their current holdings, but also expand. “The biggest long-term challenge is to build capacity on our railroads to meet the increasing demand from North American consumers,” Sease says. “That requires that we not only maintain $1.7 billion on our network and resources, but also invest and build new tracks, new terminals, and bring on new locomotives and rail cars. We have to maintain what we have and build for the future before the demand is here.”


National Impact,

CLASS I RAILROADS Freight railroads generate nearly $265 billion in total annual economic activity and support

1.2 million jobs.

Freight rail moves goods in and out of 49 states, and its economic impact is felt in all 50 states. Every $1 of investment in rail infrastructure generates another $3 in economic activity, according to U.S. Department of Commerce data. Each $1 billion of investment in rail infrastructure to expand capacity creates an estimated

20,000 jobs nationwide.

In 2008, freight rail capital expenditures generated $33 billion in total economic activity, which in turn supports another 175,000 jobs. Statistics provided by the Association of American Railroads.

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BLACK

B O X BIG PICTURE

Sponsors:

include Spinx, Bi-Lo, Charter Communications

Fieldhouse:

Centennial American Properties; Croft Properties

Stands:

Admission: $8 (box seats) to $5 (berm)

Season Tickets:

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$535 per seat (for full season)

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Flour Field at the West End Q2 2010


BLACK

B OX Flour Field at West End

Stadium Construction:

Home of the Greenville Drive

The EMJ Corporation

945 South Main Street Greenville, SC 29601 www.greenvilledrive.com

Architect:

The DLR Group

Office Phone (864) 240-4500 Ticket Line (864) 240-4528

Videoboard:

Daktronics; Masstar

2010 Season opens: Thurs., April 8 Quick Facts: • The stadium was modeled after Fenway Park, the home to Drive affiliates Boston Red Sox. Fluor Field boasts its own “Green Monster” scoreboard and “Pesky’s Pole” in right field. • Fluor Field attracts more than 400,000 visitors each season. • Popular ballpark fare includes the staples (hamburgers, hot dogs, and french fries) as well as some unique to Fluor Field (Chick-fil-a, Monster Burger, and the Fenway Rice Bowls).

Field:

Roger Bossard, MLB legend groundskeeper

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photo by Ernest Rawlins Photography Q2 2010

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HR

did you make human resources new year's resolutions for 2010?

HR BLACK B OX

by julie godshall brown

Julie Godshall Brown is the owner and President of Godshall Group, a firm specializing in professional recruiting, staffing, and consulting for over 40 years. Julie holds a Masters degree in Human Resources from USC and a marketing degree from Clemson University. She is very involved in the Upstate community, currently serving in leadership roles on several business, civic, and university boards.

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As a difficult 2009 came to a close, I was more excited than ever to turn the calendar to 2010. Understandably, a keen focus on operational issues took second row to survival for many businesses. I will share a few suggestions based on my own HR New Year’s resolutions in the hopes that it will motivate you to continue to make a few of your own throughout 2010!

1. Commit to your own professional development goals! If you are not already a member

of your local SHRM (Society for Human Resource Management) chapter, join now. Local SHRM organizations provide their members with legislative updates, opportunities to benchmark best practices, and benefits of networking with other HR professionals. What skills are you missing to stay on top of your game? A good way to understand your skills gap is to survey the market—read business books, review online HR job postings for skills in demand, sign up for HR newsletters, and attend local legal updates. Your training budget isn’t a factor in taking advantage of most of these opportunities.

2. Get involved!

spending and make sure you are getting an optimal ROI (return on investment).

5. Focus on “topgrading” your talent!

Hiring, developing, and retaining top performers is the key to success in any business environment. Review your recruiting practices including an evaluation of your company’s reputation in the marketplace. What can your organization do to ensure that you will attract top talent? (By the way, talented professionals are not often actively seeking a new position, they are most often methodically recruited). How can you best develop your talent and keep them engaged? Human Resources professionals have the opportunity to affect the future success of their organization by proper planning and execution in this area.

Keep abreast of pending legislation related to your field, and give your legislators your opinions. So often, legislation is passed that doesn’t take into account the practical impact it will have on business operations. SHRM reports that we are “on the brink of the greatest change in labor and employment law in over 20 years.” It is our duty to be aware and to remain an active influence on these matters.

3. Self-audit your HR files more regularly.

4. Review salary structure and total benefits to ensure every dollar is being spent wisely. Many

companies have maintained roughly the same salary plan and benefits for years, though the workforce they hope to attract and keep has changed. Work with an outside expert to review your

acekand b d e Festorm, advis u visit

. Brain en yo in wh m/HR weigh lackBox.co B Inside Q2 2010

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We all dread the possibility of any type of audit or investigation often beacuse audits are time consuming and divert our attention away from other duties. If every HR professional would schedule a monthly or quarterly self-audit of state and federal immigration requirements, benefits records, personnel files, and hiring/promotion/termination processes, we would sleep better at night. If you have deficiencies, wouldn’t you rather find them before an outside agency arrives?

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By Katherine Myers

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Lab 21,

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a UK-based company whose website asks the question: “How are you tomorrow?” focuses on areas on molecular and viral diagnostics as well as patient profiling tests, both of which lead to a strong focus on how clinicians and providers can treat and monitor their patients in the most efficient ways possible. So when Graham Mullis, CEO of Lab 21, decided he wanted to expand into the U.S., he immediately began looking in areas like Boston—an area well known for its endeavors in the biotechnologies industry.

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It was an investor that first sent Mullis to South Carolina— an area with a surplus of biotechnology businesses, but without any organization of any kind, and without much national, or worldwide, awareness. After talking to a few companies in the state—companies like SC Launch, SCRA, and economic development groups—Mullis was connected with Michael Bolick, then-CEO of Selah Technologies. Selah Technologies, along with Bolick, was well-known in the Upstate region for its phenomenal rise among other startups in the past decade, and for being an advanced materials manufacturing company with a focus on “Selah dots,” or carbon-based nanoparticles that, among other things, luminesce when they come in contact with cancer cells. It only took six months for Bolick and Mullis to see synergies between the two companies. After all, with Selah dots came the capability to detect breast cancer cells more efficiently than before; with Lab 21 came the infrastructure to put those carbon dots into the hands of physicians all over the world. The two companies announced the acquisition of Selah by Lab 21 on December 18, 2009. Along with that decision, however, came another one: Lab 21 would build its North American headquarters in Upstate South Carolina. “We were going to be a national company within the U.S.,” Mullis says of the decision to not only build a business in South Carolina, but to build their HQ here, although he adds that S.C. wasn’t the top of the list when it came to relocating the headquarters. He remembers the point where he threw down the gauntlet to economic development groups, and to Bolick. “I said, ‘What can you do to help me build my business here?’ The quick movement and energy convinced me; I felt that I’d be working in a region that could move quickly when they needed to.” It was that reaction that solidified Mullis’ decision. “South Carolina had a receptiveness and energy level unlike other area’s we’d seen,” he adds. “Lab 21 is a young, ambitious and fast-growing business, and the energies matched…the energy and enthusiasm here are infectious.” But for every Lab 21 that decides to build in South Carolina, there are hundreds who won’t even consider the state for a biotech start-up, simply because we aren’t even on the radar on a national level. Compared to states like Georgia and North Carolina (with the Q2 2010

Research Triangle area surrounding Raleigh-Durham-Cary), South Carolina isn’t even close to having the structure needed to sustain and attract high levels of biotechnology businesses. But we do have the potential.And that’s where the story really begins.

What We’re Talkin’ About Here… First, let’s define what we’re actually talking about. Biotechnology is, very literally, “technology based on biology,” according to the Biotechnology Industry Organization (aptly called BIO). It consists of industries from the nano- levels (like Selah) to diagnostic firms and companies that focus on everything from alternative energy sources to healthcare vaccines, food and agricultural improvements and DNA fingerprinting, like that used in forensic sciences. With such a wide span, it’s hard for many outside of the industry to wrap their minds around the subject of biotechnology. In fact, according to Patrick Kelly, vice president of state and government relations for BIO, it’s an “intangible” that most people don’t understand. “Basically, its researching and developing cures, new medical devices, or alternative energy solutions that can potentially change the world,” Kelly says. “This industry is an emerging technology sector—almost every state in the nation is putting a [biotechnology group] in place.” Historically, biotechnology (also called bio sciences or life sciences), has been around forever. As early as 4000 B.C., Egyptians began to use yeast to ferment beer and bread, while Babylonians began to control breeding of date palms for their own purposes. In 1663, Robert Hooke, an English physicist, discovered the existence of the cell. In 1906, the term genetics was introduced, followed by biotechnology in 1919. The history, of course, is as diverse as the field itself, and over time the discoveries, innovations and findings have grown in number exponentially. For what Kelly calls a “high-tech, high-skill, highwage industry”, it’s also no surprise that economic development groups are scrambling to get the best of the best within their state’s borders. Today, the field is moving so fast and growing so large that state organizations—typically affiliates of the nationallyrepresentative BIO—are cropping up to help those companies survive, and thrive.


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photo by Brad Forth

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From One State to Another

South Carolina had a receptiveness and energy level unlike other areas we’d seen...

*information provided by BIO

1902 1906 1930 1938

The Biologics Control Act passes to ensure purity and safety of serums, vaccines and similar products. The Food and Drugs Act is signed into law, prohibiting interstate commerce in misbranded and adulterated food, drinks and drugs. The National Institute of Health is created (later to become the National Institutes of Health as new research institutes in specific disease or research areas are added). Congress passes The Federal Food, Drug, and Cosmetic (FDC) Act of 1938, one of a handful of core laws governing the FDA. Among other provisions, the FDC Act requires new drugs to be shown safe before marketing. Thus begins a new system of drug regulation.

1946

Recognizing the threat posed by loss of genetic diversity, the U.S. Congress provides funds for systematic and extensive plant collection, preservation and introduction.

1962

Thalidomide, a new sleeping pill, is found to have caused birth defects in thousands of babies born in Western Europe. The Kefauver-Harris Drug Amendments are passed to require drug makers to demonstrate efficacy and greater drug safety. The biggest change is that, for the first time, drug manufacturers are required to prove to FDA the effectiveness of their products before marketing them.

1965

President Johnson signs H.R. 6675 to establish Medicare health insurance for the elderly (coverage for the disabled was added in 1972) and Medicaid for the indigent. Although Medicare covers drugs used in clinics and hospitals, it omits outpatient prescriptions—a gap that will grow in significance as pharmaceuticals, including many biotech drugs, become a more important component of care.

1971

President Nixon calls for a War on Cancer and signs the National Cancer Act into law, stimulating new research.

1975

Some 150 scientists, attorneys, government officials and journalists meet at the Asilomar Conference Center near Monterey, Calif., to discuss recombinant DNA research and develop strict safety protocols.

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One such group, GeorgiaBio, boasts a membership of more than 290 companies. Founded in 1989, and now under the leadership of president Charles Craig, GaBio is the one industry association in the state of Georgia whose members have a record of achievement in three areas critical to the state’s future, including improving the health of people, animals and the environment; expanding the number of high paying, advanced technology jobs; and enhancing K-12 student achievement in science education. “The reason it’s important to have a private non-profit representing life sciences is because there are a number of issues that are particular to the biosciences industry,” says Craig. “It’s critically important because we will connect them to their peers and to the whole life sciences community.” Bio organizations like Georgia BIO do a number of things for their members. Among serving as a connector for groups and peers within the industry, bio groups can offer lobbying support, connections to suppliers outside of the industry, and overall, be a proponent for the industry as a whole. Typically, education, advocacy and networking are the biggest focuses of the organizations. But even with a strong, albeit spread-out, biotechnology community, South Carolina has not had a state-level Bio organization. It doesn’t lack a number of biotech companies—in fact, Southeast BIO (SEBIO) lists 227 member companies in S.C., compared to 518 in N.C., 311 in Georgia, 97 in Tennessee and 179 in Florida. Comparatively, South Carolina ranks in the middle of the Southeast. It would seem, then, that the problem facing South Carolina isn’t one of mass—it’s one of organization. That’s one thing that Bolick would like to see remedied. In 2009, Bolick became president of the newlyfounded SC BIO, and was charged with growing it into the state representation that had been lacking. “We need SC Bio to be a validator that life science companies can, and do, succeed here,” Bolick says. He notes that in the biotech industry, South Carolina is currently what could be considered a “fly-over” state. Sandwiched between such strong state organizations as the ones in Georgia and North Carolina, South Carolina sits like a black hole in the Southeast. It’s up to groups like SC Bio, SC Launch, SCRA and economic groups like Upstate Alliance and Chambers of Commerce to jump in and change how South Carolina is perceived by prospective life science companies. After all, Bolick adds, when it comes to national and global representation, “We’re just joining a party that’s already been going on.”

TIMELINE (of Policies related to Biotechnology)

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1980 1983

The U.S.government publishes the Coordinated Framework for Regulation of Biotechnology, establishing more stringent regulations for rDNA organisms used in agriculture than for those produced with traditional genetic modification techniques. The framework clarifies the agricultural biotech responsibilities of the Food & Drug Administration, the U.S. Department of Agriculture and the Environmental Protection Agency.

1988

The United States launches the Human Genome Project when Congress appropriates funds for the Department of Energy and the National Institutes of Health to support research to determine the structure of complex genomes. The project is fully underway by 1990.

1993 1997

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The Orphan Drug Act is signed into law, creating new incentives to conduct R&D on therapies for rare diseases. More than 250 orphan drugs have reached the U.S. market in the years since.

1986

1992

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The Supreme Court decides in Diamond vs. Chakrabarty that “anything under the sun that is made by the hand of man,” including biotechnology-modified organisms, is patentable. The decision helps open the floodgates to a wave of investment that includes the first biotech IPOs.

1999 2000 2001 Q2 2010

The FDA clears the way for agricultural biotechnology products with a safety assessment and guidance to industry. The Biotechnology Industry Organization (BIO) is created out of the merger of two predecessor organizations, the Industrial Biotechnology Association and the Association of Biotechnology Companies. The Food and Drug Administration Modernization Act (FDAMA) is signed into law, codifying administrative changes begun in 1995 and introducing new reforms. Provisions include criteria for fast-track drug development, easier patient access to experimental drugs and medical devices, and an online database of clinical trials. President Clinton signs an executive order to promote development of biobased products and bioenergy. The Biomass Research and Development Act is signed into law to promote conversion of biomass into biobased industrial products. President Bush announces that federal funding will be made available to support research using embryonic stem cell lines created as of Aug. 9, 2001.

The Knowledge Factor Once the state support is in place, there are still other obstacles to be overcome when it comes to supporting a viable, growing biosciences community. Companies who move here, or build here, still must have access to employees—meaning that the knowledge base in the state must also greatly improve. According to a report on Bioscience education in America, only 28 percent of high school students taking the ACT reached a score indicating college readiness for biology. Compared to this national average, only 19 percent of South Carolina’s students are ready for college-level science.What’s more, on a national level, average scores for high school seniors in the sciences have actually declined from 1996 to 2005. This failure to prepare students for biotechnologies in the future can severely limit our capacities to provide quality staff to those companies later. Include, in South Carolina, a poor retention rate of its college graduates, alongside poor education standards when compared to other states, and you have a problem that will affect our future greatly. “We have been able to work with education field in order to get high school students excited about, and working in, biosciences,” says Craig of Georgia’s attempts to increase education in the sciences (23 percent of Georgia’s high school seniors graduate ready for college-level biology). But for Mullis, part of building a sustainable knowledge base to support biotechnologies includes a state organization that can help market the industry itself. “For true startups, this kind of organization is very important,” he says. “You build the infrastructure— the brand—and that attracts different cultures and different ideas. This, in turn, expands the knowledge base.” Fo r t u n a t e l y, there are already organizations in place that can support SC BIO in its early d eve l o p m e n t . While economic development groups like the SC Chamber of Commerce and local development corporations sift through potential moves, other groups like SCRA, who collaborate with research universities to “advance technology, providing technology-based solutions.” In the Upstate, with groups like CURF (the Clemson University Research Foundation), NEXT and Upstate Alliance—a high focus on advanced materials is simply the first step in a long journey into biotechnologies in the state.

“Basically, [biotechnology is] researching and developing cures, new medical devices, or alternative energy solutions that can potentially change the world.”


Jennifer Noel’s job is becoming more and more intertwined with biosciences. As the vice president of marketing for Upstate Alliance, her task is to take what South Carolina can offer to companies all over the world, and put it in front of them. “Obviously its impossible to put a number on it, but what is happening is that we are starting to build a critical mass of bioscience companies,” Noel says. “I think the interesting thing is that right now, without an active chapter, SC, if you put all the BIOS on a map, would be a gaping hole. So getting [SC BIO] up and running and doing something is vital to keep the area viable and growing.”

2002

2004

The FDA publishes a white paper outlining the Critical Path Initiative, which seeks to expedite drug development by promoting the use of technologies such as computer-based predictive models, biomarkers, imaging technologies and improved clinical trial design. The Project BioShield Act is signed into law, providing $5.6 billion over 10 years for the federal government to procure diagnostics, therapies and vaccines to protect Americans from chemical,nuclear and biological warfare agents. California voters pass Proposition 71, which supports embryonic stem cell research with $3 billion in funding over 10 years.

2005 2006

The Energy Policy Act of 2005 passes, authorizing $3.6 billion in funding for bioenergy and biobased products.

2007

Congress passes The Food and Drug Administration Amendments Act (FDAAA), which provides FDA with substantial resources for enhancing and modernizing the FDA Drug Safety System. Among its many provisions, FDAAA requires greater collaboration between the FDA and drug manufacturers to develop risk-evaluation and mitigation strategies prior to approval, gives the FDA new labeling authority, and calls for an enhanced clinical trials registry and a results databank. The U.S. Department of Energy (DOE) invests more than $1 billion in biorefinery projects and bioenergy research centers in 2007.

It Isn’t All About the Little Stuff... But there’s one more thing to keep in mind—not all of us are built for these ““high-tech, high-skill” jobs, dealing with nanoparticles or alternative energy sources, or new vaccines. Some of us are better built for support. Manufacturing has been a great stronghold for South Carolina. Even with the decline of the textile industries, manufacturers like Boeing, BMW, and all their suppliers still find a stable home within the state. In fact, the South Carolina Manufacturing Extension Partnership boasts an overall economic impact (in 2008, the last year data is available) of $254.8 million dollars through its partner companies. Further research done by SCMEP also shows capital investment dollars of $36.3 million and 1,360 jobs created and retained. And that’s interesting, considering that a solid state infrastructure for biotechnology—not only for our state, but for those surrounding us—needs a solid support system of manufacturing. According to Kelly, though, this may be just the key to start South Carolina in the right direction. “Maybe the type of industries you attract aren’t necessarily the biotech companies, but they are the suppliers or manufacturers who support those companies,” he says. “The best thing for SC to do is look for opportunities with in the state,” Kelly says of South Carolina’s potential in the industry. “Its not an option to compare South Carolina to Atlanta—you cant benchmark against Atlanta or Raleigh and think yourself a failure. Maybe [South Carolina] should be a tool provider.” And if we as a state can begin to stabilize a biotechnology hub, the possibilities grow exponentially from there. Kelly estimates that biotechnologies hold a multiplier effect of six to one—meaning, that for every one person employed in biotechnology, six others will be employed to support them, in one fashion or another. For a state that hovers at or around 12.5 percent unemployment, that’s a big deal.

“We need SC Bio to be a validator that life science companies can, and do, succeed here.”

The Farm Security and Rural Investment Act includes biotech measures such as significantly increased funding for research and risk assessment and new programs for promoting biotechnology in developing countries. The legislation also supports industrial biotechnology with a new requirement for federal agencies to buy biobased products, such as plant-made plastics and biofuels, whenever feasible.

2008

The World Trade Organization issues a confidential final ruling on the U.S./Canada/Argentine challenge against the European Union (EU) on approval of new biotech crops. According to news reports, the ruling concludes that the EU breached its trade commitments with respect to 21 agricultural biotechnology products—including types of oilseed, rape, maize and cotton.

The FDA publishes a favorable risk assessment for food derived from cloned animals and their offspring. The assessment reflects FDA’s review of more than 700 scientific research studies, conducted over the past 30 years.The agency concludes that foods from animal clones and their offspring are equivalent to foods from other livestock. The House and Senate both passed the Genetic Information Nondiscrimination Act, and President Bush was expected to sign it into law. The law will protect against job or health insurance discrimination based on genetic testing results.


For every single job, you are paying, on average, two times what the private sector would pay.

Creating the Future In addition, careers in biotechnology are “high wage” jobs. “For every single job, you are paying, on average, two times what the private sector would pay,” Kelly adds. With many jobs being for lab technicians, a state like S.C., who is already building up medical students and their expertise, as well as research areas in manufacturing, engineering and other sciences, the possibilities are endless. In any instance, there is definitely a chance for South Carolina to make a big bang in the biosciences in upcoming years. Until then, companies like Lab 21 will forge the way for others, while SC BIO and other S.C. –based groups try to figure out how to get and retain them. But there’s no doubt that the future of S.C. will be made—at least in part—by biotechnology.

“We already have the products and services—it’s a matter of replicating what we’ve already done,” Mullis says of Lab 21’s past and future. But beyond the walls of his North American headquarters, biotechnology is growing stronger and stronger every day. “Life sciences have been a qualifiable success,” he adds. “They have been proven.”

Consumer Goods Made with Industrial Biotech Product

Old Process

Biotech Process

Technology

Bread

Potassium bromate, a suspected cancercausing agent at certain levels, added as a preservative and a dough strengthening agent

Addition of biotechnology enzymes to: • enhance rising • strengthen dough • prolong freshness

Microorganisms genetically enhanced to produce baking enzymes (directed evolution and recombinant DNA)

Toxic chemicals, such as aniline, used in a ninestep chemical synthesis process

One-step fermentation Genetically enhanced process uses vegetable oil microbe developed to as a feedstock produce vitamin B2 (directed evolution)

• Biologically produced without chemicals • Greatly reduces hazardous waste generation and disposal

Food and feed grain fermented into ethanol (a technology that is thousands of years old)

Cellulase enzyme technology allows conversion of crop residues (stem, leaves, straw and hulls) to sugars that are then converted to ethanol

Genetically enhanced organism developed to produce enzymes that covert agricultural wastes into fermentable sugars (directed evolution, gene shuffling)

• Renewable feedstock • Reduces greenhouse gas emissions • Increases domestic energy production • Is more energy efficient to produce than old processes

Chlorinated solvents and hazardous chemicals used to produce antibiotics though chemical synthesis

One-step biological process uses direct fermentation to produce antibiotic intermediate

Genetically enhanced organism developed to produce the key intermediate of certain antibiotics (recombinant DNA)

• 65% reduction in energy consumption • Overall cost savings

Genetically enhanced microbes engineered to make protease enzymes (directed evolution)

• More effective contact lens cleaning • Less eye irritation

Vitamin B2

Ethanol Fuel

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Antibiotics

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Contact Lens Solution

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Surfactants and/or saline Protease enzymes solutions (do not remove remove protein deposits protein deposits) used to from the contact lens clean lenses

Benefit • High-quality bread • Longer shelf life • No potassium bromate

Information provided by BIO


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LAW do i need a stock option plan? As an attorney with Wyche, Burgess, Freeman & Parham, Andy Coburn regularly represents clients in mergers and acquisitions, corporate reorganizations, structuring of joint ventures, securities offerings and other financing transactions. Andy also advises and assists public and private company clients in the design and implementation of executive compensation arrangements, equity compensation plans and broad-based employee benefits.

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The basic underlying issue when you discuss stock options with a client is incentive compensation—what can the client do with compensation to get employees to give their best for the business? Often, the client is also dealing with a related issue—employees want, or the client wants to give them, a “stake in the business” so they will act and feel like owners, not hired hands who punch the clock for a paycheck. Stock options should not be used without careful consideration, however. Some key issues include the following: 1. Options as compensation for lower pay. Stock options can make sense for companies that use them to make up for lower cash compensation. Most commonly, this is done by new and growing companies that simply do not have the cash to pay the kind of salaries that their employees could obtain elsewhere. 2. Options to provide competitive compensation. For certain positions and in certain industries, stock options are seen as a basic component of compensation, and you simply cannot attract good talent unless you offer stock options. Historically, this has been particularly true with various types of technology companies such as software companies. Stock options or other stock compensation are also a necessary part of the compensation package for executives at public companies. 3. Options for key employees. The incentive value of stock options is greatest for key executives whose actions can directly affect the value of the company, and therefore the value of the options. Lower

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by andy coburn

level employees in most companies generally are not going to think that they personally can increase the value of the company. 4. Option plan and administration requirements. Stock options are complex and need to comply with multiple areas of law, most notably tax, securities and corporate law. So unless you have an unhealthy appetite for risk, you need experienced legal counsel to draft stock option plan documents and advise you on the specific actions necessary to properly establish the plan. Once the plan is established, there are numerous administrative tasks that require careful attention to ensure that stock option awards are properly granted and the vesting, forfeiture and exercise of options are correctly handled. Failure to properly establish and administer the plan leads to employee lawsuits and/or legal violations. 5. Securities law liability. Speaking of legal violations, stock options are securities. If you don’t handle stock options properly, you can expose the company to civil and criminal liability under state and federal securities laws. In the worst cases, company officers and directors can also face personal civil and criminal liability. 6. Minority shareholder rights. An employee who exercises a stock option is no longer just an employee. They are now also a shareholder. As a shareholder, they have all of the legal rights of a shareholder as well as an employee, which can add to your headaches if the company and the employee part on bad terms.This risk is primarily an issue for private companies, and there are ways to reduce this risk significantly, but again the company must be careful and get experienced legal advice to use stock options. 7. Alternatives to stock options. Given the complexity and legal issues associated with stock options, a company should always consider whether another type of compensation structure could better accomplish the company’s goals. Alternatives such as restricted stock and cash bonus programs have their own complexities and risks, of course, but after reviewing the pros and cons of options, there are many cases where a client will find that an alternative better fits their objectives.

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oth selflessness and a desire to give people a place they can call their own fuel Pernille Christensen. As a landscape architect, it’s her job to provide people with a place they can take pride in, but most recently she’s made it her mission to do so for people in third-world countries who are in need and have little means to provide for themselves. “I always wanted to be an architect,” Christensen remembers. “I really looked up to my aunt who was an industrial architect.” She dabbled in architecture for the first time in the ninth grade and continued her education through college, earning both undergraduate and graduate degrees. She’s currently pursuing her PhD. But Christensen’s love transcends the nuts and bolts of her two professional focuses—landscape architecture and city planning. She labors with purpose, aiming to “work in a manner that improves physical environments for people,” she says. “I want to give people a sense of place.” She works to create places for people that can both meet their needs and meet their culture or personality. In the fall of 2008, Christensen discovered an opportunity to change people’s lives through her work in a dramatic way.While talking with her friend John Stangel, president of CONTAINER-IT in Atlanta, Ga., they discussed the then-recent tragedy surrounding Hurricane Katrina and possible solutions to the lack of relief housing. In their discussions they landed on the topic of the surplus of ISO shipping containers littering American ports.“We knew there had to be a better use for them,” she says. “We came up with the idea of creating hurricane-proof housing.” Thus, the SEED project was born. The discussion set the gears in motion. Many people would consider it a nice idea—a great big “what if ”—and move on without a second thought. She pursued the idea, though, by opening up a discussion with her architecture colleagues at Clemson in order to determine if this idea could take true shape and if they would be the right people to pursue the idea. Following that, research began to determine how to best accommodate the lifestyles of the people the housing would be created for. To aid the project, CONTAINER-IT donated one of its old containers, paid for its relocation to Clemson’s grounds and donated $5,000 to the cause. Local businesses and groups around Clemson joined in the project to make it a reality. “It became a real collaborative effort in the Upstate,” Christensen says. Since then, the efforts of Christensen and her team, along with two other teams under Clemson architecture professors Doug Hecker and Martha Skinner, have worked toward creating a functional space for hurricane victims. But the project encompasses more than just creating suitable space. The teams began by using the Republic of Dominica as their hypothetical test site for the project, since it fell into the mid-range on a myriad of variables. They asked themselves, “How can we understand and incorporate the lifestyles and rituals (of locals) into their daily lives?” Christensen explains.“We’re trying to re-establish ‘place’ and make that place special.” More recently, everyone involved with the project has increased their efforts to complete research and make the project a reality, making it possible to send aid to Haiti as earthquake housing relief. The housing would not only meet temporary living needs, but also aid the work in rebuilding communities. “It’s the seed that then grows and becomes a starting point,” Christensen explains. “It becomes something that evolves and flourishes, and that’s what’s really exciting to me.”

1996

Graduated with a Bachelor in Architecture from Mississippi State University

2000

Graduated with a Master of Architecture and Master of City & Regional Planning from Clemson University; began working at Niles Bolton Associates in Atlanta

2001

First visit to China as part of the Niles Bolton Associates design team competing to design new towns in China

2002

Visited South Africa as part of the African AIDSTrek to raise awareness about the SubSaharan AIDS pandemic

2007

Returned to Clemson as a Visiting Assistant Professor in the Planning and Landscape Architecture Department

2008

Met with John Stangel from Container-It in Atlanta and the idea for the SEED project was born

2009

Architecture and Landscape Architecture studio students develop ideas for SEED container modifications, emergency garden/ water filtration system, and PODS

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Profile by Andrew Brandenburg

$32.9 billion 700,000

Estimated damaged by Caribean Hurricanes in 2008 Estimated surplus container in the Caribbean

996

People killed by Hurricanes in the Caribbean in 2008

155

The wind speed of a Category 5 Hurricane

8

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Caribbean Hurricanes in 2008 Q2 2010

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The goal of microbreweries is simple and pretty standard for most businesses: “Pretty much to supply the local area with quality craft beer,” Tom Davis, brewer and co-owner of Thomas Creek Brewery in Greenville, says. “That was the initial goal.” And while that goal hasn’t changed since Thomas Creek’s beginning in 1998, like any business, as the company expands, so do products and services. “We still live by the same principles, we just have expanded the market base to other states and areas, and other styles of beer as well,” Davis explains. “We’re growing our profiles (types of beer) and footprints (markets we reach).” The mission to supply others with quality beer, while philanthropic in nature, stems from personal passion and the need to share great brews with those who have limited means of obtaining quality beer themselves or may simply not know what they’re missing.

that point in time, this area was not saturated with other beers, so that’s what made me start making my own,” he says. Similar to that, the work of Mark Johnsen, founder and coowner of Spartanburg microbrewery RJ Rockers, grew out of personal passion as well. After spending time in Germany and seeing others brew beer firsthand, Johnsen became intrigued with the process. “I became fascinated with the process, although I didn’t learn how to brew over there,” Johnsen says. While pursuing his MBA at Idaho State University, though, Johnsen took every opportunity to get involved in projects about microbreweries. And from there his passion grew. “It started out as a hobby that grew out of control,” Johnsen continues. Entrepreneurs at heart often take their craft to the public through whatever means are feasible.“The initial start (when I started brewing craft beer for sale) was when the brewpub laws changed here,” Davis explains. While working at a local restaurant called Henni’s in downtown Greenville, Davis was approached about turning Henni’s into a brewpub, using his home-brewing experience. “Long story short, my father and I bought the equipment and leased it to them, and I used it myself,” Davis continues. “That was my professional debut.”

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However, due to South Carolina law, distribution of beer is only legal for microbreweries, not brewpubs. Based on this fact, Thomas, like many others, looked toward the idea of starting a microbrewery as a potential business, rather than a brewpub.

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“It just goes back to supplying the local market with good craft beer,” Davis says. Davis’s brewing began, not for others, but for himself. “It was home-grown, if you will,” he continues. “I started home-brewing close to 25 years ago. Shortly before that, my father did traveling and would bring back beer from all over country and the world. Between that and being in the restaurant and bar business, my passion for beer grew.” And that’s where Davis saw the need—and ultimately, a potential niche worthy of starting a business in the Upstate. “At

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“In layman’s terms, there was more space outside the doors than in, so we started a microbrewery,” Davis says. Dealing with similar issues, Johnsen’s work actually began in the brewpub industry, rather than microbrewery in April 1997.“We knew the microbrewery business was very new when we got started with it, especially in the Southeast,” he explains. “We thought the best way to get our name out was to start out as a brewpub. People could visit our facility, drink our beer and eat our food.”


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But as time passed, Johnsen realized his passion was in the brewery industry, not that of restaurants, and decided to take the company in a different direction in order to fuel growth. Since brewpubs in South Carolina are legally prohibited from distributing beer, the restaurant was closed, and RJ Rockers opened as a microbrewery in March of 2003.

the more you have to make sure that you’re doing the right things. It’s what my marketing director would call ‘keeping your finger on the pulse of the market.’” “The South is the fastest growing region in the microbrewing business,” Johnsen explains. “The reason for that is that it’s the last region to be penetrated.”

While offering a diversity of craft beers remains key to drawing an assortment of customers, most microbreweries start from humble beginnings, like any startup. One thing that sets many microbreweries apart from their mass-production counterparts is marketing tactics. Microbreweries, due to budget restrictions and local appeal, trend toward grassroots marketing and local involvement to get their names out. “Our primary means is guerilla marketing,” Johnsen says. “We don’t have any print ads, commercial, radio or television. Our advertisements are taps in the bar and packages on the shelf, as well as donating to any charitable event in the community.” Davis shares similar experiences from his own endeavors. “The largest challenge is getting our product in front of the public,” he explains. “Not having a very large marketing budget, most of it is grassroots: word-of-mouth, beer festivals, sponsoring local events.” Yet more fundamental—and most significant, actually—to microbreweries in any area is public perception and education. After all, if people aren’t buying, the breweries aren’t selling. For the Upstate, and the country, the process of infiltrating (and educating) the market has been a work in progress. For craft brewers in the Upstate, the challenge was large since there aren’t many craft brewers in the areas until recent years. “The microbrewing industry is an education—you have to educate people and their taste buds,” Johnsen says. “There are people that think they don’t like beer, but then they taste yours and realize otherwise.”

Yet, many microbrewers don’t see their macro¬-brew counterparts as competition due to the difference in the industries. “It’s like apples and watermelons,” Johnsen says. “Mass-produced domestics are in one category, and microbrews are in another— they’re really not our competition. “We hope one day to collectively have 4 percent of the beer market in the U.S. Right now we have about 2 or 3.” Considering all aspects of the industry, though, it’s the passion behind each craft beverage that keeps these brewing entrepreneurs working in this field. “If you want to become rich, this may not be the work for you,” Johnsen says. “We just really love what we’re doing.”

But according to local industry, the Upstate has been eager to embrace craft brew beer. “It’s become more of an educated market,” Davis says. “The people in this area have grown to embrace craft breweries, whether they be from here or Colorado. “Further, one of the alcohol laws changed, making the content larger,” he continues. “Imports from other areas would come into this area looking for them.” And as the market’s taste develops and its consumers become more educated, the microbrewery industry is afforded the opportunity to expand and diversify.

“Most microbreweries and brewers are typically very passionate about what they do,” Davis says. “That does tend to roll to the public.We really really enjoy watching people enjoy what we do—I can’t say that every sector is like that.”

“The market in the last 12 years has changed,” Davis says. “You have to grow your business to fit the market: changing, adding styles, that sort of thing. The more educated the market becomes, Q2 2010

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SALES mission, vision, and stewardship:

Todd Korahais currently serves as Operating Partner for Keller Williams Realty. He has successfully built three different businesses and at age 31 sold his first business to a publicly-traded company. His community involvement includes several board positions and leadership roles in civic, business, and philanthropic organizations— most specifically, the Greenville Chamber of Commerce and Clemson University.

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the second step in the art of goal-setting

by todd korahais

what their life will be like if they hit those goals.The step before that should be, “What do I need to work on in myself, so I can become the person to achieve those goals?” With me, I struggle with living in the moment and being patient. More times than not, I can be impatient and forget to stop and enjoy life’s little pleasures. What do you need to change in yourself? You don’t have to write us back. But being honest with yourself is a must. We started with the question “what do you want?” That led us to “why do you want it?” What we’re discussing now is “Why don’t you have it?” This begs two questions: your vision (who do you need to become?) and your mission (what do you need to do to get what you want?). More often than not, effective goal-setting lies in identifying our character flaws and what inside us needs to change, as well as being honest with ourselves so that what our heart truly yearns for is crystal clear. So, your homework assignment is to make at least five categories (some of which were referenced earlier) of what you want your life to look like, what it would mean to you if your life actually looked that way, and what about you needs to change in order to not only get it, but also be a good steward of it. This will get us ready for the last column in this series, which will include the final step of putting pen to paper with actual goals and an action plan to get us there.

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In our last column, we discussed that goal-setting begins with the art of understanding paradox. The question is the answer, and the answer is the question. Now uncross your eyes for a second and ask yourself, “What do I want?” And hopefully you’ll begin to realize that why you want it (whatever “it” may be) is the answer. Goal-setting is not just putting numbers on a page to make more money or satisfy your boss. It is about deciding who you want to be and what the vision for your life is. So let’s start by dividing your life into categories. What do you want for your physical health? Most people realize that the answer to this question has more to do about providing and taking care of others than just taking care of themselves. That would be an example of why you want to be healthy. Along with health, other categories can include relational health, emotional health, spiritual growth, and, since this is a business publication, your business goals and finances, as well. There’s a timeless wisdom found in the scriptures where God says, “To whom much is given, much is expected.” In other words, before we can begin to receive all that our goals would produce, we need to make sure that we’re good stewards of what we already have. Setting a goal of 10 gallons of water with a five-gallon container is an example of stewardship that needs tweaking. All too often, people rush to put numbers on a page and dream of

SALES

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We hear a lot about how some regions of the state are better represented in our state legislature than others—so we decided to take a look at how true that really is. In this issue, we’ll look at our actual representation, split by region (some representatives cross regional borders), as well as committees of both our Senate and House of Representatives, and how they are built. All information taken from www.scstatehouse.gov

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We souldn’t find consistency in what counties “belong” to which region, so we made up our own. Here’s how we analyzed the state.

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1.

What was your first job? I was a chemist for a multinational company in Boston. We did projects with the military in the community. It was fun because it was everything I was hoping it would be like when I went to school, majoring in chemistry. How did you get involved in your line of work? I wound up getting involved in some community projects in Lowell, Mass., and during a couple of those projects we worked with the local Chamber of Commerce. One day the guy that ran the Chamber called me and said, “Can we get together for lunch?” We had lunch, and he asked if I would like to come to work for him? I wound up hanging up the white smock and a buying a blue blazer and have been in chamber work ever since. What are some of the skills you developed early that you’ve found to be beneficial or essential to your practices now? Well, it’s kind of like the scientific method. You analyze, and you calculate, and you implement. That discipline you get from working in the science field plays out very well when working in communities. You have to be careful not to do things just off intuition or because of who has the loudest voice. It really is a cause of listening to the voice; taking a measured look at what the issues are in the community, what the issues are in the business community, in particular, and saying lets develop a logical, sequential plan to start addressing those things. How do you strike a balance between your personal and professional lives? Scheduling. Look at personal and family life as high priority and then make sure you are scheduling enough of that into your life. It sometimes means you don’t get to go to a meeting that you’d like go to. Encourage your spouse or your children to spend some time with the things you get to do that are somewhat social. It captures them both, at the same time. What are some strategies you use to keep yourself in check? I play with cars, and rebuilding a car is very humbling. Mechanical things don’t do what you want them to just by you convincing them—you need correct logic. You can’t be persuasive with mechanical things and that is a very humbling thing. You are working on these things and you have to take the time to understand and analyze.You realize things don’t go together because you’re smart and just because you know it’s supposed to fit doesn’t make it fit. What’s your vision for business in Spartanburg and the Upstate during your presidency? Well, I think the realization that we’ve been content in the Upstate with an average economy, less than average educational outcomes, and maybe a lack of large goals that allow us to become as progressive as our competition. So the vision begins with education. Education equals economic growth, which equals prosperity and eventually brings enlightenment.

2.

3.

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When we reach enlightenment, we are able to operate in the same fashion that great communities are right now. You wind up with a community that operates at a different level that is constantly looking toward the future. If you could choose one principle or piece of knowledge you know now that you wish you had known early on in your career, what would that be? Influence trumps power. Power tends to be resented, power can be taken, and power can be ill-used. Influence is more effective, because influence has to be earned and influence doesn’t come from you. It comes from the people you know that allow you to have influence. So it’s a product of respect, and you have to earn it. Communities work better if influence is there rather than power. If you retired tomorrow and could change to any field except the one you are in now, what would you pick? One of the things that was obvious a few years ago was we did not have a strategic plan.We were doing economic development, but it was sort of ad hoc. So we sat down, and we said in order to be a complete community, we have to a have a comprehensive economic development strategy that encompasses the four E’s of economic development: Education—the fundamental building block; Enticement—recruiting new companies to the community; Enhancement—working with all companies to help them grow and prosper the ones that are already here; and Engendering—the start up and creation of new enterprise. What was your biggest failure as a professional? The economy—the national economy—is impacting so many of our companies in the Upstate. And in most cases, it’s nothing that they have any control over. There’s nothing that they can do to influence that, and there’s precious little a Chamber can do to influence the economy on a national level. So at this point we are limited to trying to get at a minimum share of the economic growth that’s out there. At the same time, we’re trying to provide assistance to the companies in the Upstate to see if there are barriers to success locally. What did you do to recover from that failure? I try to understand and not take things personally, even if it’s a failure in a relationship. I think recovering from failure to achieve a goal means going back and understanding what went wrong. How do you avoid similar failures today? Make sure you have a deep bench and a good succession plan. It also means that you have to have volunteer leadership that has courage. If everything is going great, then you don’t need that courage part, but if you are trying to accomplish a transition in your community to step out of the comfort zone and start doing some things that require the next level thinking, you have got to have people that have courage.

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101 101 DAYS

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Dissatisfied with limited investment options and business restrictions, financial planners Robert DeHollander and Roy Janse knew it was time to sink or swim on their own. So they resigned from their long-time positions in the middle of a global economic downtown to start their own investment and advisory firm. Here are their first 101 days.

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Hurdling towards disaster OR conquering the mighty competition.

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THE PEOPLE

THE PLAN

THE PURPOSE

Rob DeHollander was a former environmental engineer with a strong interest in finance. Roy Janse had been a business technology consultant before entering the world of investment planning. In 2008, the two businessmen met to discuss something they had been thinking about for some time: launching their own financial planning firm. At the time, both were advisors with Ameriprise Financial, Inc.— DeHollander since 1999; Janse, since 2002. But they had the single-minded belief that true financial planning should focus solely on helping clients build and protect their personal wealth over a long period of time. And the only way to make this happen in accordance with that belief was to be their own bosses. They knew it would take a lot of time and sacrifice. But a handshake and a nod later, both were committed to making their business dream happen. And, they had the same vision of what their financial business should look like.

Initially, the partners had four major considerations: 1) make sure they had enough cash reserves to meet start-up costs; 2) become sponsored by a nationally independent, financial services broker/dealer that shared their belief and had the technology to back them; 3) decide on a name and transform the look of their operation; and 4) find a way to bring over their most important clients. Paperwork and planning would take the better part of 18 months. The three members of their inplace staff—office manager Peggy Simmons and paraplanners Shannon Burgess and Adam Kleinfelter— were approached about making the transition and all said yes. Another member, asked to be included as a third partner, also agrees to come. There was one other consideration: technically, DeHollander and Janse wouldn’t be the only firm of its kind. So instead of gimmicks, products, or comparing their abilities and experience to their competitors, the partners decided they would stand out by having a personal relationship with every single client—as if each client were the only client on board.

DeHollander and Janse have one bottom line: to help clients achieve their financial goals by providing objective, comprehensive financial advice. Their advice includes six components: investment management; retirement planning; risk management; business planning; tax Strategy; and estate planning. There are no sideline company products. There are no restrictions on firm investment or client income. Whether you have accumulated a mint, or have just started saving, DJ Financial tackles the complexities of financial investment information, narrows it down to graspable form, and helps clients grow their wealth. “All the information we have is out there—anyone can access it on their own,” Roy Janse says. “Our expertise allows us to take that enormous amount of data, narrow it down so that it becomes actionable, and tailor it to a specific client and their needs so they can understand it easily and make a wise decision for themselves.”

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Article By: Jonathan Clark


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“ huge moment That was a

for us because at that point it was our crossing the Rubicon, from then on we knew there was no going back. - Rob DeHollander

Day 1: The company name, logo, and colors are selected after five months of consideration. This was a lot harder than expected. Probably the most difficult aspect was choosing the name and dealing with the ‘ego’ factor of whose names to include. Also difficult was trying to keep the move under the radar to avoid potential legal action. But word has leaked out, leaving Roy and Rob legally vulnerable for a couple of months, which could potentially give the firm problems before its official launch. “Thankfully, that didn’t happen,” Rob says. “But it did put us in tough position for a while. We had to hire an attorney out of New York to help us through the process.” Now, after several months, the third partner backs out and decides not to make the transition. “This really surprised me,” Rob remembers. “He would have been a great addition but he decided to go another direction. Roy and I had to re-work the firm’s cash flow numbers all over again without him.” But the partners forge ahead as initial website construction begins.

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Day 2: D&J meet with three vendors to review the cost and proposals for new signs. “It is very cool seeing YOUR name for the first time on the company sign,” Robs says.

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Day 3: Rob and Roy stand over the fax machine watching their resignations go out to Ameriprise. Only afterward do they realize that their resignation dates do not agree. Rob has to fax his a second time. “That was a huge moment for us because at that point it was our crossing the Rubicon,” Rob explains. “From then on we knew there was no going back.”

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Day 4: The partners box up all client files (36 standard file boxes) for delivery to Ameriprise. This task takes the better part of an entire day and includes a personal handdelivery of all boxes to the Ameriprise compliance officer in Charlotte. “He went through it box by box and client by client and then signed off on each one to verify that we returned all client files to the company,” Roy says.

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Day 5: New staff photographs are taken for media and website use.

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Day 6: All Ameriprise signs are removed—Roy and Rob patch and paint the walls themselves, which is par tly symbolic of their new hands-on venture and par tly because “we’re broke.”

Day 7: It is the partners’ last day with Ameriprise. A final office inspection is performed by an Ameriprise compliance officer. All files have been removed, all computers erased. At the close of the business day, D&J officially have no clients, no assets, and no revenue.“It felt like five minutes before the start of a sailing race,” Roy remembers. “You feel ready, but there’s the gnawing feeling that you’ve forgotten something because it’s such a big moment.”

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Day 8: The new broker dealer is announced. After 15 months of due diligence, narrowing a short list of 30 firms to three and visits to corporate headquarters, D&J chooses Commonwealth Financial Network in Boston. New signs are delivered and installed—they look great!

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Day 9: The partners begin receiving calls from concerned clients. Unfortunately, the new phone number was not working all weekend. Rob calls the phone consultant and reaches him Saturday night partying downtown, which was not well received by Rob. Q2 2010

Day 10: Clients continue calling the partners at their homes, and, in some cases, contacting them at their personal emails. “We were pretty focused on the task that needed to be accomplished,” Roy says. “Some of it was unsettling but not something we had a lot of time to dwell on.”

Day 11: The phone consultant programs the office phones correctly. The phones start ringing… “We’re amazed and delighted by the clients desire to move with us,” Rob says.

Roy begins the first of 25 client meetings throughout the Carolinas and Georgia to explain the transition. “I wanted to meet with all the clients—about 80-100—to address any concerns they had about the move,” he explains. That same week, he sends his wife, two kids and the dog to the beach “to give me time to get the initial process done.”

Day 12: Roy and Rob begin receiving signed client paperwork. Over the next eight weeks, the D&J team processes a stack of paperwork that reaches nearly seven feet high.

Day 19: Roy finishes the first week of client meetings. His family returns not only rested, but to the good news that most of his clients are retaining him as their financial advisor.

Day 22: New website www.djfinancial.com is complianceapproved and live (in time for Rob’s birthday). The partners breathe their first real sigh of relief in several weeks; they now feel like all burners are firing at last.


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It was such a huge emotion going through all of that… but you get somewhat mechanical on all of this while you’re doing it because so much is happening at once. - Roy Janse

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Day 25: After two weeks of meetings and explanations, client retention continues to be favorable. All the staff members are still in place. No firings. No voluntary resignations. No pet peeves. Everyone is a bit overworked, everyone is thinking about how much the new venture has been—and will be— worth all the effort and energy.

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Day 29: Rob & Roy send staff to MG Grand spa for facials and massages to recharge because the avalanche of paperwork is peaking.

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Day 43: First transfer review meeting for the firm: 36 percent of Roy’s and Rob’s clients have transferred their investments.

You feel ready, but there’s the gnawing feeling that you’ve forgotten something because it’s such a big moment.

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Day 62: Second transfer review meeting: 77 percent of clients are now on board. “When we had the first review everything was still sort of mechanical,” Roy says. “But by this point, we started getting some really good feelings of affirmation with what we were doing.”

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Day 71: By the end of second month, Rob and Roy have met with nearly every client—one year’s worth of appointments in eight weeks—and have submitted the blizzard of paperwork for processing. “At that point, we could say that we were finally starting to come up for air,” Roy says.

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When we had the first review everything was still sort of mechanical, but by this point, we started getting some really good feelings of affirmation with what we were doing.”

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Day 101: After another intense month of meetings, the final client tallies are in: Together, Rob and Roy have retained an average of 88 percent of all their clients. “It was an amazing vote of confidence,” Roy says. “Of the all the clients I wanted to come over, there were only two that didn’t.” “Every client’s suppor t and feedback was so encouraging— it reinforced that we made the right move,” Rob adds.

{


101 DAYS

{

Winter 2010: Referrals for new business point the firm in its own direction. The storm has been weathered. The brains and the elbow grease have established DeHollander & Janse as a bona fide investment firm. A spot for an intern or two now looks possible for the coming summer. And because Rob owns the building, the firm plans to stay put for the long haul.

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The move has actually strengthened our client relationships. It means a lot to me that they were willing to follow us. And we’re now able to help our clients so much more. Even with all the work involved, my only regret is that we didn’t do it sooner.

October 2009: Looking back, the start-up costs for the new venture have amounted to approximately $180,000— which included transfer fees, branding logo signage, web development, attorney fees, and interruption in income for about 90 days. The partners hold a client appreciation dinner at the Poinsett Club ballroom in Greenville. Both give a summary of the move, present market conditions, and an outlook for the future. The trust and confidence expressed is humbling and deeply appreciated.

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Roy: “When it comes to financial wealth and how to grow it, there are a lot of rights and wrongs—it’s the massive gray area that we handle that allows our clients to sleep well at night.”

Rob: “The move has actually strengthened our client relationships. It means a lot to me that they were willing to follow us. And we’re now able to help our clients so much more. Even with all the work involved, my only regret is that we didn’t do it sooner. ”

d shoul e w pany ail us @ m o c a ys, em om. now a k D u o c If y r 101 blackbox. o f w follo @inside info 89


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B O X SPEED PITCH With a growing population of people with food allergies, a start-up takes shape to help guide and inform. Does Charissa Johnson have what it takes to break new ground in a market that is becoming more and more necessary?

Gluten-free, dairy-free, sugar-free—every grocery store carries products that fit into these categories. But even with these products, living a “-free” lifestyle still isn’t easy. I’m Charissa Johnson, and my concept is simple: offer a place where people can come to acquire information, direction and the products necessary to live an allergenfree lifestyle with relative ease. The occurrence of food allergies is on the rise. More than 12 million Americans have them—one in every 25 people. Even worse, eight foods account for 90 percent of all food-allergic reactions in the U.S. Sadly, there are currently no cures for food allergies. Early recognition, avoidance of allergens, and management of allergic reactions are the only measures available. Once diagnosed, individuals with food allergies are told what to stay away from allergens, but rarely is someone is available to offer assistance with this massive life transition. The allergen-free sections in most grocery stores do not feature enough products to build an allergen-free diet or lifestyle.The job of avoiding problem foods becomes so difficult that many people give up trying and deal with the health problems and risks. Food allergies require constant vigilance—I know this first-hand because I was diagnosed with celiac disease four years ago and have been learning how to live well with it since. I want to offer a personal environment where people who suffer from food allergies aren’t just a dollar sign in a long checkout line. I plan to do so through several means: products offered in a store featuring sections “-free” sections accommodating five different allergens: wheat, casein, dairy, sugar and soy; readilyavailable information from a qualified, caring staff; and education through cooking classes and “-free” recipes that will facilitate an allergen-free lifestyle that is attainable and enjoyable.

Charissa Johnson Entrepreneur

Brainstorm, advise, weigh in.

Wanna offer your advice? Log on to www.insideblackbox.com/SpeedPitch

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What They Say...

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“Charissa does a great job in clarifying what the “problem” is in the market that her product or service exists to solve. Usually I see entrepreneurs barely communicate the market need or problem, then they jump to describing their business, product or service. I see almost the reverse of that here, however. As mentioned, Charissa spends most of her pitch (too much, almost) describing the problem, but I’m not 100 percent clear on her solution. Is her business a store (and if so, what’s the name?) Q2 2010

or products within exitsting stores (and if so, what’s the brand?) or both? What seems to be an intro to more details about how her briefly-mentioned solutions fill the market need end with that last sentence. I now know a lot about the problem, but the specifics of her business model are still sketchy.” Tony Snipes Director, Redemption Marketplace Academy

“This pitch includes the essential information that makes it both informational and interesting enough to be actionable from an investor’s perspective. Lifestyles dependent on dietary restrictions are indeed on the rise, and the small-butgrowing population of those affected and living with food allergies would likely not only welcome but flock to a place like this. A haven for a niche population, Charissa’s business pitch is one that capitalizes on a timely problem with a variety

of integrated solutions that have merit, at least from the front end. Her pitch is supported by research and statistics that educate, and she gives specific examples of how she hopes to execute to reach her customers. Most of all, she IS the customer she hopes to reach, which gives her a big leg up on the competition, all things being equal.” Jamie Prince Founder, FLOURISH Communications


This program helps implement strategies to cut costs “not personnel” while allowing you to remain competitive in the marketplace.

Q2 2010

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Did you know a wellness program can reduce your business’ insurance expenses and encourage employee buy-in to corportate exercise programs? Or that your role as CEO can play a vital part in their success? We offer all the tools and knowledge you need to assure sustainability for your business.

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OPENING DAY IS APRIL 8TH

Come celebrate an All-Star Season at Fluor Field all season long. Opening week presented by

Call 864-240-4528 or visit GreenvilleDrive.com for tickets.

Q2 2010


KIDBIZ

KIDBIZ BLACK B OX

kid ideas for the spring season Tony Snipes is director of Redemption Marketplace Alliance, a Greenville-based entrepreneurship training program, where he utilizes a unique combination of years of leadership experience in the corporate arena with ministry experience in the community. Tony has spent over a decade as an internet publishing and advertising expert, helping clients for news media companies such as the Greenville News, The St. Petersburg Times, and News Channel 7 WSPA.Tony’s three daughters offer him a unique perspective that he brings to KidBiz.

.............................................................................. The coming of spring provides unique opportunities for your young entrepreneur. I’m sure that during this time of year your son or daughter will repeatedly come to you for money here and there, for an outdoor event or even money for the latest fashion trend that the spring season has introduced. The good news is that the same warmer months that have created new opportunities for your kids to spend your money have also created unique opportunities for your kids to launch their own business endeavors and make money of their own.

by tony snipes

access, running water, soap and sponges, and you’ve got a car washing business. Coordinating a week ahead with fliers and signs the day of can add to the number of customers.

For kids that are good with other kids: Creative kids and those that love the spotlight can do anything from face painting to puppet shows with a little planning. Day cares, churches, local summer camps and even baby sitters are all looking for ways to keep the kids in their care entertained. Your young entrepreneur could be their entertainment while at the same time doing something they also have fun at. The best way to do this would be to approach the group early enough to get on their schedule since many of these services plan their activities in advance. This spring could be a great way for your kids to learn responsibility and how to manage their own money by launching their own business project suited for the season.

Here are a few ideas that can provide your kids an opportunity to make their own spring break income:

For the young entrepreneur that’s good with animals: Pet sitting opportunities boom in the warmer months with pet owners going on vacation. Many prefer not to leave their pet in a kennel. Depending on how well your child is with animals, it can entail walking, feeding and grooming dogs to something as simple as feeding fish. Older kids that may be familiar with caring for horses won’t find it odd to find homeowners in our area with stables that need their services.

For the young entrepreneur that’s good with yard work:

For the kids with a lot of energy and a couple of friends: Take two or three friends or siblings, a parking lot with easy

ck a b d Fee m, advise andisit

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Simple pulling of weeds and tilling a garden make good starters for kids providing a service to neighbors. Mowing lawns have always been favorites for the young entrepreneur mature enough to handle the task safely. Other jobs that have always been on a homeowner’s spring To Do list have been cleaning windows, trimming hedges and other “curb appeal” tasks.

ou v stor iz. Brain in when y om/KidB c . h x ig we kBo eBlac Q2 2010 93 Insid


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Business Black Box (Vol.2, Issue 2) is published four times per year by ShowCase Publishing, 1200 Woodruff Rd. Suite A8, Greenville, SC 29607; phone (864) 281-1323; fax (864) 281-1310. Business Black Box is a registered trademark of ShowCase Publishing © 2010. Content may not be reproduced without written permission of Business Black Box. Excerpts may be reprinted, provided that credit is given to the author and to Business Black Box magazine., Q2 2010


WHO’S WHO

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BMW Performance Center • bmwusa.com/performancecenter• 65 Capitol Impact • insideblackbox.com • 22 Devereaux’s • devereauxsdining.com • 83 Greenville Drive • greenvilledrive.com • 92 All Occasion Celebrations • alloccasioncelebrations.com • 40 Evergreen Recycling • ever-greenrecycling.com • 95 GROW Conference • growexpo.org • 13 Hilton Garden Inn • greenville.hgi.com • BC Innoventure Southeast • innoventuresoutheast.com • 78 Jean’s Uniforms • facebook.com/jeansuniforms • 56 Launch Greenville • launchgreenville.com • 36 Max Motivation • maxmotivation.net • 91 McAngus Goudelock & Courie • mgclaw.com • 66 Pinnacle • pinnaclebanksc.com • 33 Recover, Inc. • recoverusa.com • IBC RTC • poweredbyrtc.com • 10 SCBT • scbtonline.com • 2 SC Launch • sclaunch.org • 1 SCORE • scoresportsradio.com • 94 Spartanburg Community College • sccsc.edu • IFC Table 301 • table301.com • 5 Upstate WIB • upstatecareersource.com/greenpoint • 91 Business Black Box

Weir Capital • weircapital.com • 7 WLFJ His Radio • hisradio.com • 68 Wolf Technology • wolftg.com • 40 WORD • newsradioword.com • 52

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eople are what matter to Paul Guy—so much so, that he has dedicated his career to them. Every day, Guy strives to help people understand, respect, and appreciate those who differ from them, whether that be through race, ethnicity or religion. “We want them to respect people’s values,” he says. This focus has taken shape through different jobs and efforts in Guy’s life. Most recently, he served as the president of the Greenville branch of the NAACP but decided to take his career in a different direction when his term came to a close. “I decided not to run for the presidency of the NAACP (again) because I thought I could do a better job of bridging cultural differences through a non-profit organization,” Guy explains. Guy’s desire to bring people together stems from his childhood. “It’s all about my upbringing,” he explains. “I was brought up in a cross-cultural home.” Clichéd as it is, Guy doesn’t see color when he looks around, just people. “I see people as people,” he says. It’s through this sight that Guy guides his career path. Following studies on the local community, Guy and his associates discovered some startling social trends in the Upstate.Trust—especially across cultures—was incredibly low. Tension between people of differing religions was significant. And most disheartening was the discovery that many people didn’t even realize these tensions, especially in the workplace. “In a company, there was less interaction cross-culturally than there was perceived to be,” Guy says. In December of 2005, Guy and his associates started Beyond Differences, a non-profit aimed at helping people, both young and old, connect with each other in order to better understand and appreciate their differences. The organization gives individuals the opportunity to come together and open up dialogue aimed at defusing differences or misunderstandings that cripple cross-cultural relationships in the community. Guy’s vision exceeds the here and now. Many of the investments the organization is making are aimed toward creating a better future for the Upstate. This focus has led Beyond Differences to invest heavily in young people. “If we don’t put good things in them, how can we expect good things out of them?” Guy says. Through its Access program, Beyond Differences has created multiple platforms for young people to connect and develop positive, cross-cultural relationships. And beyond that, the organization gives the young people a venue to help solve problems in the community, like how to reduce gang activity. They’re not only recipients; they’re participants. “You have to give them ownership,” Guy explains. “You make them buy into the projects.” Beyond Differences truly strives for understanding and appreciation of cultures and traditions. “It’s not about me changing you,” Guy explains. “It’s about me changing me.” Q2 2010


Businesss Black Box - Q2 - 2010  

Q2 2010 issue of Business Black Box

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