Jan-Feb 2014 by Connect Business Magazine

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IN THE SPOTLIGHT

The Story of Dr. Kyle Swanson Now 45 years old, Dr. Kyle Swanson lived until age 13 in Winchester, Virginia, a town similar to Mankato in terms of population and distance from a major metro area. In 1980, he moved to Mankato with his family after his father became an Orthopaedic & Fracture Clinic surgeon. Kyle went on to graduate from Mankato West in 1986.

Kyle Swanson, M.D.

Many people today don’t know Kyle needed a two-year “awakening” as motivation to earn the grades necessary for medical school admission. Here is his story: After graduating with a bachelor’s degree from Notre Dame University in 1990, I worked for my uncle for two years running his cattle and hog operation in Iowa. I was there taking my cousin’s place on the farm while he served in Desert Storm. It wasn’t exactly by choice. I had a strong interest in medicine, and my father was an OFC surgeon and my mother a nurse, but I didn’t have the grades then to get into medical school. I realized farming as a hired hand wasn’t a sustainable career. Nonetheless, the experience changed my thinking and made me more appreciative of being able to advance my education. That experience ultimately motivated me to be a better student. So after two years in Iowa, I went on to Georgetown University for graduate school before having the grades to get into Georgetown University School of Medicine. Medicine today is still a good career choice, but it’s very competitive. You have to be persistent. A lot of qualified people apply. I felt like the hardest part of school was just getting in. Today, I’m thankful for those life experiences on the farm in Iowa. Dr. Kyle Swanson volunteers his time every six months as a surgeon in Ghana, West Africa.

Mankato, Faribault, Hutchinson, Northfield and 14 outreach clinics. 15 physicians and 110 employees.

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Contents

THE MAGAZINE FOR GROWING BUSINESSES IN SOUTHERN MINNESOTA

STAFF & CONTRIBUTORS BUSINESS PERSON OF THE YEAR 2014

Mike Pinske

AmeriCare Mobility Van

Publisher: Jeffry Irish Editor: Daniel J. Vance

Associate Editor: Carlienne Frisch Art Director/Staff Photographer: Kris Kathmann

Julie Schmillen

Habitat For Humanity

Advertising Manager: Steve Persons Contributing Photographers: Art Sidner Contributing Writers: Diana Furchtgott-Roth, Michael Tanner Production: Becky Wagner Josh Swanson

MRCI

8,800 for January 2014 Published bimonthly

CORRESPONDENCE Send press releases and other correspondence: c/o Editor, Connect Business Magazine P.O. Box 452, Nicollet, MN 56074 E-mail: editor@connectbiz.com (please place press releases in email body) Web: www.connectbiz.com Phone: (507) 232-3463

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Mailing: Midwest Mailing, Mankato

CIRCULATION

Brian Benshoof, CEO of Mankato Rehabilitation Center, has been employed by the nonprofit organization for half of its 60-year history. His goal is to make MRCI the program of choice for clients and families seeking services and to educate the public about the variety and depth of MRCI’s programs and services.

Printing: Corporate Graphics, N. Mankato Cover Photo: Kris Kathmann

Our second place finisher for Business Person of the Year, Julie Schmillen, executive director of Habitat for Humanity South Central Minnesota, grew up in St. James, Minnesota. Her father and uncle owned Schmidt’s Bakery, a special stop for serious sugarphiles pining for deep-fried doughnuts, delicious desserts, and doughy breads.

Brian Benshoof

Circulation: Becky Wagner

Locally owned Connect Business Magazine has ‘connected’ southern Minnesota businesses since 1994 through features, interviews, news and advertising.

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HEINTZ TEAM MEMBER PROFILE

Jon Weber Assistant Service Manager

Heintz Toyota Assistant Service Manager Jon Weber grew up in Janesville. While he was growing up, his father worked as a North Star Concrete machinist, and his mother, a Johnson Fishing supervisor. While attending South Central College to earn his EMT paramedic license, and working nights and weekends selling furniture, he learned through his friend Clint of a service department opening at Heintz Toyota. He started there in 2001.

Now age 36, Jon Weber has built many great relationships with Heintz Toyota of Mankato customers, but none more so than with long-time, regular customer Walter “Whitey” Whitecotton, who drives his car up from Sioux City, Iowa for servicing.

He could easily get his car serviced in Sioux City, but our relationship draws him back.

Weber said, “The first time I met Whitey was in 2001. He had a two-year-old 1999 Sienna minivan. He currently owns the same minivan and has about 600,000 miles on it. Even though he lives near Sioux City, Iowa, and has been retired about five years, he keeps bringing his vehicle up for servicing about twice a year. He had begun a relationship with Ben Heintz in the 1980s. Whitey was an on-the-road salesman. He’s one of the friendliest and easy-going people you can imagine. I was lucky enough to get to know him back in 2001 and have enjoyed building a relationship with him over the years.” As for his personal life: Jon’s wife Michelle gave birth in February 2012 to a baby girl, Raegan.

387-1148 heintztoyota.com Serving Southern Minnesota drivers for 50 years.

EDITOR’S LETTER

Drum Roll, Please! Our scholarly judges from Minnesota State University College of Business have selected Mike Pinske as our Business Person of the Year. Congratulations, Mike! They worked from a stellar list of nominees emailed in by our readers in September. Nominees were judged according to personal character, business results, leadership, and community involvement. Pinske owns Mankato-based AmeriCare Mobility Van, and has been president of the Minnesota R-80 Medical Transportation Coalition and the R-80 representative on the governor-sponsored Non-Emergency Medical Transportation Advisory Council. His employees transport people to and from medical-related appointments in 14 southern Minnesota counties. Their second-place choice was Julie Schmillen of South Central Minnesota Habitat for Humanity, who has helped about 100 families inside our reading area since the mid-‘90s construct their own homes. Earning third place this year was Brian Benshoof of MRCI WorkSource, which has seen an explosion in growth and income the last few years. Finally—and hold your high hats—this was the second year straight our highest award belonged to an owner of a 53-employee business. In 2013, Wayne Kahler of 53-employee Kahler Automation (Fairmont) earned front-cover bragging rights. This year, it’s Mike Pinske of 53-employee AmeriCare Mobility Van. In case someone asks, “53” also was the uniform number of Los Angeles Dodgers pitcher Don Drysdale and the number on Herbie the Love Bug’s hood. Sursum ad summum,

Daniel J. Vance Editor

Habitat for Humanity’s ReStore Julie Schmillen, Executive Director

MRCI WorkSource Brian Benshoof, CEO

CONGRATULATIONS I&S Group congratulates all of this year’s Business Person of the Year recipients on their commitment to our communities and wishes them continued growth and success.

ARCHITECTS • ENGINEERS • PLANNERS • LAND SURVEYORS • SCIENTISTS

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Congratulations Mike Pinske

On Being Named Business Person of the Year

Weâ&#x20AC;&#x2122;re happy to be a small part of your success!

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By Daniel J. Vance Photo by Kris Kathmann

MIKE PINSKE

Business Person of the Year 2014

N OF TH RSO EY PE 14 R 20 EA

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Owner of Mankato-based non-emergency medical transportation company going and growing by driving a compassionate company culture.

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BUSIN ES S

1 st P L A C E

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Some people probably regard Mike Pinske’s business as being akin to a school child’s silly playground song during recess—as simple and fun. After all, how difficult could transporting adults around southern Minnesota be? For 20 years, Pinske has owned Mankato-based, 53-employee AmeriCare Mobility Van. It’s a rapidly accelerating non-emergency medical transportation business with nearly 50 vans and sedans roaming 14 southern Minnesota counties, including the Connect Business Magazine reading area and the I-35 corridor stretching from Iowa to Faribault. Many clients are elderly or have a disability. Pinske has constructed an exceptional, caring company culture that encourages compassion. He also is our 2014 Connect Business Magazine Business Person of the Year, chosen by judges from the Minnesota State University College of Business and from nominations emailed in from readers in September. Starting with only two vehicles in 1993, Pinske has purchased over the years all or portions of three other transportation companies, including an October 2013 buyout involving part of R&S Transport of Rochester. This last purchase literally doubled company size. Pinske operated his far-flung enterprise until recently out of a Louie DePalma-friendly, 600 sq. ft., downtown Mankato headquarters building that resembled a 1950s Sinclair gas station. Frustrated in 2008 with St. Paul decisions affecting his industry, he co-founded and became president of the Minnesota R-80 Medical Transportation Coalition. Since 2011, he has been the R-80 representative on the Non-Emergency Medical Transportation Advisory Council, a governor-sponsored, legislatively appointed task force. The Coalition has been a rural voice for non-emergency medical transportation concerns. He gives up about one full day each week representing his industry. Is his business simple as a school child’s song? Not by any stretch, but Pinske and his employees make it seem so. continued >

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Business Person of The Year 2014 winners selected by MSU PE Mankato CollegeEofY Business faculty.

JANUARY/FEBRUARY 2014

CONNECT Business Magazine

Mike Pinske | Business Person of the Year 2014: 1st Place

My dad was constantly working and I get my work ethic from him. He taught me that nothing happens by itself. You have to make it happen. It’s a business owner’s perseverance that often makes or breaks a business. He didn’t give up. Who influenced you most growing up? My mom was nurturing, patient, and empowering in terms of building up my confidence. I was an inquisitive young man and remember once asking her about why a particular business wasn’t performing well. Regarding business in general, she said that I should do one thing, do it better than anyone else, and then I would be successful. That’s what I still live by. I do one thing: non-emergency medical transportation. I do it to the best of my ability, which happens to be better than many others. My mother was a huge inspiration. My father was in the construction trade and owned Jim Pinske Construction. He was a self-employed businessman and I saw the dedication and sacrifices he had to make. Being self-employed is a lifestyle. So I was prepared well for the day I would start my own business, which had been

an underlying goal of mine even when I was a kid. The sacrifices he made? Yes, such as the endless hours of work, being at the customer’s beck and call, and making sure the job was done right the first time. My dad was constantly working and I get my work ethic from him. He taught me that nothing happens by itself. You have to make it happen. It’s a business owner’s perseverance that often makes or breaks a business. He didn’t give up. I learned that if you believe in yourself, you just keep going. I learned a great deal from him in that respect. Your first job? Every Saturday morning starting about age 13, I worked for my dad. I pushed a broom, and carried lumber, sheetrock, and shingles. Later on, I drove the dump

truck to the dump. It was constant work. I had to work—I didn’t have a choice, even though I wanted to spend time with my friends and do other things. During the summer, work was all summer long. As a laborer, I did everything from pulling wire to laying concrete block. I liked most seeing a building project come together from the initial hole in the ground to being an actual home people could enjoy. It’s a job with a beginning and an end. You can see the progress you are making throughout. And you went on to major in pre-med in college? I did it because I had a compassion for people in general. The idea of being able to help people appealed to me. I wanted to make a difference in people’s lives. That still drives me. I saw medicine as an avenue to accomplish that goal.

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Business Person of the Year 2014 | AmeriCare Mobility Van

Sometimes people get into medicine because someone in their past became sick. I just wanted to care for people and make a difference. But my father did die in 1996. He was only 48, which is my age now. He was a Vietnam veteran, a Marine, and his past was a struggle for him. It was alcoholism that got the best of him. So perhaps you saw a progression of what was happening with your father and that was one reason you got into your industry? That’s true. Another factor was my uncle, Laverne, who was developmentally disabled. I had a natural affinity for him. He was so genuine. I never looked at him as having a disability, only as my uncle. So

I learned from a young age that all human beings are the same, really. We all sometimes have to lean on others. My uncle just had to lean a bit more. And now you are dealing with your “uncle” again as clients every day. Absolutely. There also was a neighborhood kid who was deaf. I took it upon myself at about age eight to learn sign language in order to communicate with him. Also while growing up in Mankato, there was another neighborhood kid who today works at Hy-Vee. He lived about six houses away. As kids, we would play street hockey or football, and he always was one of the first kids picked because of his athletic ability. I never looked at anyone as being different. Today, I look beyond the physical issues

and more towards the person. Everyone has value. You majored in pre-med at University of Minnesota-Duluth. It didn’t work out. I found out I had more of an affinity for business. My compassion to help people—I still am able to do that in this business setting. I feel I have the best of both worlds. I went to Duluth only one year, and then one year at Austin Community College in Austin, Texas. That was a point in life where I just had to break out of the nest. I had to see how far away I could get and be free and break away from hometown and parental bonds. I chose Texas because it was just on a map. The culture is completely different, everything from the terrain to rattlesnakes

I chose Texas because it was just on a map. The culture is completely different, everything from the terrain to rattlesnakes in the yard, fire ants, and scorpions. People from Texas couldn’t believe you could drive a car out onto a lake in Minnesota during the winter.

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Mike Pinske | Business Person of the Year 2014: 1st Place

I immediately realized I could do the job. That job would meld everything together: my compassion for humanity, my affinity for crunching numbers, and I could be self-employed. FROM RECIPES TO ROADS Minnesota corn and soybean farmers are making the most out of every bushel grown. They are working hard to provide nutritious feed for your livestock and healthy food for your dinner table. Farmers are making efforts to not only feed the world, but utilize different portions of the crops to produce clean, renewable fuel in order to help build a more sustainable future for your family and theirs.

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in the yard, fire ants, and scorpions. People from Texas couldn’t believe you could drive a car out onto a lake in Minnesota during the winter. I came back in 1987 and enrolled at Minnesota State and have been here in Mankato ever since. I took a job at Valley National Bank as a teller for a number of years. As I worked my way through college, I became involved with student activities. They were putting together a credit union for students, and I was able to get on the board of directors. Later, I became the credit union president and operated the credit union about a year and a half, until I had other job opportunities. I had to pay my own way through college. I was taking a full load of credits along with a nearly full-time job—as many hours as I could squeeze in during the week in order to make ends meet. Then you started your own business. Along with Dustin Lee, I started this company in 1993 while still a senior at Minnesota State. I was getting paged out of classes so much to do my job that I accumulated a number of incomplete classes. I left college that year and thought I could go back one day—and here we are. School was fine, but I was so anxious to start doing something. That appealed to me more than sitting in any classroom. Why this industry? My wife was working in a group home setting providing direct care and was an ELM Homes program coordinator. I was out sitting on our porch one afternoon and saw a wheelchair accessible van drive by. I immediately realized I could do the job. That job would meld everything together: my compassion for humanity, my affinity for crunching numbers, and I could be self-employed. My partner and I bought our first van on September 1, 1993. By November, we were up to two vans and two sedans, and by the following September had seven vehicles. The growth since has been constant. We really try to make a difference by providing reliable, good-quality, dependable, and respectful service to people in need that are transportation dependent. And you have purchased three other companies since then? In 1998, Tom Krenik of Red and White Care Van approached

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Business Person of the Year 2014 | AmeriCare Mobility Van

us. He was in his early 60s and asked if we would be interested in buying him out. I bought out my partner, Dustin Lee, in 2000. He had been integrated into the community and was able to communicate well with people needing our service. I learned a lot from him how to interact with our clients and be respectful. He had a natural affinity for doing that, and I believe I had the affinity for putting the business model together. The second company you purchased was in 2009, Espeland Vans of Winnebago, and the third, this October 2013, was the far western territory of R&S Transport of Rochester—an addition that strategically expanded your business into the growing I-35 corridor. The owner of R&S Transport, Steven Elwood, and I have been friends and colleagues 20 years. We have collaborated on business issues and served on boards together. We currently serve on the Minnesota R-80 Medical Transportation Board. The “R” stands for rural, and the “80” stands for our state’s 80 rural counties. I’m president of the organization and Steve is treasurer. Due to Rochester’s growth as a destination medical center, R&S decided to focus exclusively on Olmstead County. He reached out to me in May to ask if I’d be interested in buying his operations in Freeborn, Mower, Scott, Rice, and Steele Counties. We closed the deal on October 24, 2013. That effectively doubled the size of our company. So now you are trying to merge two groups that have never been together. That’s where the challenge lies. We now are taking our culture and methodologies for providing service to new employees not familiar with it. My job is to capitalize on what I can learn from R&S’s model. However, I often find through these purchases that our model is already efficient and effective, and so in the past have

kept it. I’ve made it clear to new staff to be patient and respectful to all the new clients and drivers transitioning over. Bringing the two together is our biggest challenge. It’s one thing if you could drive all the vans, but you can’t. How do you pass your values onto your drivers? It would seem your drivers are also your salespeople. My model for success has been to take care of my employees, and believe by doing that my employees will take care of our customers. That’s what I’ve done to make sure our culture flows from the top all the way through. As for employees, we look for people with healthcare experience, such as nursing assistants or people that have worked in group homes or cared for elderly parents. We look for people who can demonstrate compassion. The most important client we have is the one with our employee. Because your clients can call someone else. That’s right. When our telephone rings, someone is on the other end with a transportation problem. Our job is to provide a solution. If we don’t, they will call someone else and we may not hear back from them. Our goal is to take care of people, from the entry point into our service until we deliver them to where they need to be. How big is your operation? We now have 44 vans, 53 employees, and serve 14 counties. We are busy, busy, busy. Lately, I’ve been meeting with former R&S employees and am trying to make sure I get the name right with the face. How is Obamacare affecting you? Because the President put a one-year delay on the implementation for corporations, that’s something I will be working with my accounting firm on next spring. It isn’t omnipresent on my mind right now, but

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Mike Pinske | Business Person of the Year 2014: 1st Place

will have to be addressed before January 1, 2015. We have about 48 full-time employees, and many of them work overtime hours every week. I’m not going to let (Obamacare mandates) be an obstacle to providing services. I look at it as an opportunity to see what’s available in the marketplace in terms of employee healthcare. Gas prices are too high, the industry has gone through rate cuts, and margins are thin. Our culture is just as important as profits. You can’t really have one without the other. We’re going to keep moving forward to do the best we can for the communities we serve. What happens when someone has a life-threatening situation when riding in one of your vans? I get asked that a lot. We are not emergency medical transportation. We are regulated by the Minnesota Department of Transportation. We are not allowed to provide any medical care in transit. In the event someone has a medical emergency, we follow protocols and procedures. In a medical emergency, the driver puts a call into dispatch telling us the problem. Dispatch will send them to the nearest hospital, telephone the hospital to alert them of the situation, and telephone the State Highway Patrol. We’ve had bleeding and breathing incidents. Unfortunately, in any business like this, you also have people that expire while in route. It has happened to us. It’s infrequent, but it happens.

And when it does, it must tear you up inside, especially if you personally knew the client. To some drivers, those clients are friends. We get “thank you” letters all the time from people saying things like, “Thank you so much. Dad really enjoyed his drivers, but he passed away last Sunday.” We miss those people. We are a point of connection for many people that don’t have any family members nearby, and we befriend them. Unfortunately, one of my staff members has the daily task of going through the obituaries every day to account for our clients. My youngest client was an 18-monthold boy using a pediatric wheelchair and oxygen and had a feeding tube. It breaks my heart. It tears me up he won’t have many of the same opportunities many of us have. My oldest client is a 105-year-old woman from the School Sisters of Notre Dame. We literally have a 100-year span from youngest to oldest client. Disabilities don’t discriminate on the basis of gender or age. Have you ever approached the City of Mankato to ask if you could bid on all or portions of their city transit system? I have. We have had that discussion several times. We have talked about everything from just handling scheduling and dispatching of their Mobility Buses to trying to provide that service for the City of Mankato. With Mankato’s aging population, its Mobility Bus is being over-utilized. Mankato being part of a metropolitan area now will bring about some

Mike Pinske | Business Person of the Year 2014

Getting to know you:

Mike Pinske Born: January 10, 1966. Education: Mankato West High School ’84, and attended University of Minnesota-Duluth, Austin Community College, and Minnesota State. Family: wife, Karen; two children, Jessica, and Andrew. 14

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Business Person of the Year 2014 | AmeriCare Mobility Van

We empower our employees. For example, in bad weather we have what we call a white-knuckle rule. Our drivers are free to pick and choose the days they drive. If they wake up to eight inches of snow, and don’t feel comfortable driving, then I don’t feel comfortable with them driving. changes in the way mass transit is delivered here. I’ll continue to reach out and work with the City to try to partner in providing efficient and cost-effective services. What is your company’s strong point? Our commitment to our communities and clients. I’m not saying other companies aren’t committed, but we empower our employees to be their best. There is no corporate “B.S.” here. We want you to be you. Because when you are you, you will

be the best for our clients. We want your compassion and your personality to flourish, because that’s the connection you have with your client. It’s all about relationships. We empower our employees. For example, in bad weather we have what we call a white-knuckle rule. Our drivers are free to pick and choose the days they drive. If they wake up to eight inches of snow, and don’t feel comfortable driving, then I don’t feel comfortable with them driving. It’s at their discretion. I’m not going to force them to

drive. We value our safety record. We have some drivers who don’t like an inch or two of snow, but others say the more snow the better. That empowers the employee. Give other examples of your company empowering employees. I’m committed to my family, and I expect my employees to be committed to theirs. We are a family-first company. For example, if someone has a family emergency arise, I don’t want them here working. We step

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in and pick up the slack as a team to carry the load for that missing individual so they can be where they’re needed most. My employees know they are going to be respected and treated fairly. They know their job will be waiting if they have to attend to more pressing family issues. That’s what I want. They don’t have a family so they can work here. They work here so they can have a family. Family is first. In one instance, I paid for an airline ticket for an employee to visit her son who was injured in a motorcycle accident. If I had a son sitting in intensive care in a California hospital, where do you think I would want to be? I knew where she needed to be. The rest of the staff agreed. She needed to go. We aren’t manufacturing anything here— we’re providing services to people. The thing for me is that I have to provide those services to the friends of my parents and to the parents of my friends. I also have to provide those services to my old landlords, my neighbors, my old hockey coach—you name it. I take that very seriously.

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Some people argue that you shouldn’t be getting paid so much money by the government to transport people when volunteers or relatives could do that much cheaper. The biggest complaint we get is the cost of our service. A new van costs $40,000. Gas right now is over $3.00 a gallon. We go through 12,000 gallons a month. It’s a terribly expensive service to provide. Given the high cost, I make sure I deliver high-quality drivers using high-quality equipment. And we are respectful. One thing that demonstrates commitment is that if scheduling a pickup for 9:00 a.m., we are going to be plus or minus five minutes. That commitment to promptness has value to a customer. How do you get paid? We bill individuals, counties, the State, and pre-paid medical assistance programs (PMAPs). Every client needs prior authorization, including an assessment for the right mode of transportation. We have to confirm eligibility. It is a medical billing and considered a medical service. Our reimbursement rates are set in state statute. You can only change that statue through an act of the

Business Person of the Year 2014

legislature. When gas or other costs go up, there is no relief. As a matter of fact, the State in September 2011 cut our rates 4.5 percent. You have to have a barebones operation. We’re pretty lean. It concerns me if we have another rate cut or gas spike we may be too lean, and something too lean doesn’t run any longer. It’s always a challenge. Personally, I live a modest lifestyle. I want to have the best equipment on the road. I continually reinvest. This merger will help us do more. I work with Community Bank Financial Group and Steve Carlson. Steve has taken the time to know me, the business, and our industry. Our bank is a partner. Partnerships are two-way streets. I perform, and they perform. It’s been a good relationship so far. Tell me about the start of the Minnesota R-80 Medical Transportation Commission. I had been involved in the Special Transportation Services Association many years, and served as treasurer twice. It had ongoing legislative efforts, but I saw those more as addressing Twin Cities issues. In talking with rural colleagues, we bounced around the idea of starting our own rural association. The issues are so different out here. For example, we only get paid when someone is in the vehicle. For instance, if we give a round trip transport for someone from Le Sueur to Mankato, we would travel 104 miles a day, but can only bill 52. Companies that do what we do in the Twin Cities have their own set of challenges, but out here those challenges are so much more significant. For example, I serve 14 counties. The Metro has seven counties. I serve an area twice the size of the Metro, and yet we have a fraction of the people. In 2008, we started the R-80 association, which includes seven larger providers. We decided it was time to bring rural issues to the forefront and make sure rural legislators understood the importance of this service in their communities. It’s cost-effective to have a service like ours so people can get to a doctor and not have to be in a nursing home. It’s been a challenge, but rural lawmakers represent rural constituents, understand

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We decided it was time to bring rural issues to the forefront and make sure rural legislators understood the importance of this service in their communities. It’s cost-effective to have a service like ours so people can get to a doctor and not have to be in a nursing home. rural perspectives, and can appreciate the differences outside the Metro.

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Are you still president? Yes, and we have full-time Capitol representation. The R-80 pushed for the Legislative Auditor to audit the industry for strengths and weaknesses, and to identify problems in the industry. We wanted legislators to get an objective view of our industry. Released in February 2011, the audit confirmed what we had been saying. As a result, the legislature decided to form the Non-Emergency Medical Transportation Advisory Council, which is a governor-sponsored, legislatively appointed task force. I represent R-80 on the Council. We address the issues outlined in the auditor’s report. That keeps me busy at least one day a week.

answered the telephone, set up rides, confirmed eligibility, and faxed me the rides. It didn’t empower the clients to make their own decisions concerning which provider to use. It was frustrating for providers and that led to the audit. In 2009, State Sen. Kathy Sheran passed a law prohibiting these brokers from handling higher-level services. Some Metro counties still use a broker for lower-level services. The brokering began in 2006 because many people in state and county agencies didn’t understand the complexity and difficulty of scheduling, dispatching, and running a business like ours. County and state government employees struggling with the administrative aspects of this program decided farming it out was an easy solution. The task force is scheduled to present its final recommendations to the legislature this coming session. I expect meaningful and positive reforms to be implemented by July 2014.

Any industry changes come from the audit? The State in 2006 had decided to hire a broker to manage the administrative aspects of the program. That arrangement You’ve just doubled in size. One did not work out well. Many Metro providers person can handle only so much. Have went out of business because the broker you exceeded your span of control? would not give them rides. The broker I believe in delegation. If I trust you, and AgriRealty_7_13-16horiz.pdf 1 5/30/13 9:02 AM

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you have proven yourself, I am going to give you as much as you are willing to take. But I will share the responsibility—I’m not just going to give it away. Delegation frees up my time for other aspects the business. While involved at the state level with R-80, I’ve learned much more about the system and myself. In doing acquisitions, I’ve learned much more about business and myself. With a business, every once in a while you have to turn the ship into the wind. Doing this recent acquisition helps me learn the character of the crew and helps identify our strengths and weaknesses. And it helps me develop a clear set of priorities moving forward. With our most recent acquisition, we turned the ship into the wind. Everybody is digging deep to hold up his or her end of the bargain. What did you learn about yourself doing the three acquisitions? When given the opportunity to acquire another company, my first reaction has been thinking how great the acquisition would be. But there is a lot of hard work involved. Every acquisition of ours has been larger than the one prior. With the latest, there was a lot of due diligence. With the latest acquisition, I often felt like I was reaching my threshold of ability. I learned I’m capable of doing more than I thought I could. I don’t think I will do another acquisition, at least for a while. I believe this industry will see lots of attrition over the next ten years—a lot. Companies will consolidate service territories. There are fewer and fewer companies like ours today than yesterday, and the companies remaining have become bigger and bigger— beyond my scope of acquiring.

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BUSINESS TRENDS

LABOR

The October Fedgazette drilled deep to learn more about trends of Upper Midwest workers and found some surprises. For example, Minnesota alone in 2011 had more than half of all foreign-born workers in the five-state region encompassing Minnesota, Wisconsin, North Dakota,

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South Dakota, and Montana. About 9.3 percent of Minnesota’s labor force was foreign-born, the highest percentage in the Upper Midwest and second in the entire Midwest behind only Illinois (18.2 percent). In comparison, Wisconsin stood at 6.1 percent and Iowa 5.8 percent. According to Fedgazette, “From 200511, the number of foreign-born either employed or looking for work in (Upper Midwest) states increased about 4 percent annually—a growth rate more than four times that of the total workforce….Thanks to this growth, in 2011 the foreign share of the district workforce was higher than at any point in the past 60 years.” Foreign-born workers have always played an important role in developing the American economy, from the Scots-Irish of the 1740s to the Vietnamese of the 1970s. Minnesota may be a magnet because of below-average unemployment rate, generous social service programs, and jobs in industries attracting foreign-born workers.

JANUARY/FEBRUARY 2014

From 2005-11, the percentage of Latino arrivals fell and Asian arrivals grew in the five-state region, and the percentage of European, Asian, African, and Canadian arrivals was higher than the national average. Many people hearing “foreign-born” instantly think of workers in lower-paying jobs, such as food preparation, farming or perhaps, lower-skilled manufacturing. But about one-fourth of the newer immigrants have positions in the sciences, computer programming, and higher education, including in Minnesota alone more than “3,700 newly arrived foreigners (holding) computer and mathematics jobs in 2011; of those, about 80 percent were born in India—part of a wave of migration by highly educated Indians to places like the Twin Cities suburbs and Rochester over the past decade,” said the Fedgazette. The U.S. government has four guestworker visa programs through which Minnesota employers can hire temporary workers: H-1B workers, which are capped

Many of these workers end up starting businesses all over the U.S.—such as Russian-born Sergey Brin, who began Google. According to a 2010 Small Business Administration report, foreign-born have twice the entrepreneurship rate as native-born people. at 65,000 annually for a three-year visa for bachelor’s-level candidates in engineering, finance, information technology, and bioscience; H-2B, capped at 66,000 annually, for nonagricultural seasonal workers; J-1, which has no cap, for cultural exchange; and H-2A, which doesn’t have a cap, for seasonal agricultural jobs. Foreign-born physicians using H-1B visas help dozens of rural hospitals and clinics fill empty slots and serve patients. For example, Sanford Health (Fargo) alone last summer employed over 80 H-1B physicians, which were there, in part, because of a requirement for H-1B workers to work

BUSINESS

in underserved areas at least three years. When hearing “foreign-born,” many people think of illegal immigrants, also called undocumented or uninvited workers. But according to a Pew Hispanic Center study, this category of worker makes up only 18 percent of the foreign-born workforce—so about 82 percent of foreign-born workers are in Minnesota legally. Many of these workers end up starting businesses all over the U.S.—such as Russian-born Sergey Brin, who began Google. According to a 2010 Small Business Administration report, foreign-born have twice the entrepreneurship rate as native-born people.

Sorting through dozens of business trend predictions for 2014 wasn’t easy. Perhaps the simplest and most believable came from the December 9 Fortune. Its list of the next best things had four points. Their first trend was hyperspecializing. For example, 70-employee CJ Advertising

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of Nashville, Tennessee, instead of having a broad client base covering a number of industries, works only with about 30 personal injury law firms around the nation. They primarily serve their clients by zeroing in on Yellow Page advertising, television commercials, and websites. In our Connect Business Magazine reading area such specialization can be seen with homegrown businesses like Batteries Plus and Elite Steaks ‘N’ Chops in Mankato. These types of businesses can focus on doing one thing well and act as “category busters” to mass merchandisers who can’t give sufficient floor or shelf space to certain categories or invest the necessary energy to keep up with industry minutiae or trends. Their second trend was “hiring a robot.” According to Fortune, German manufacturers have employed about double the number of robots as U.S. manufacturers. In our November interview with Dan Terfehr of Dan’s Appliance in Fairmont, he mentioned Whirlpool recently moving its manufacturing of front-loading machines from Germany and Mexico to central Ohio. The enabling reason for the relocation? The plant in Ohio now uses robots. “Asset sharing” was another trend spotted by Fortune. For example, every company has unused assets and space or underemployed workers who could be farmed out to other companies. The key would be sharing those assets with non-competing companies in other industries, of course. Again, referring to a business in our November issue, Mankato Independent Originals, which owns four independent restaurants, shares a marketing person with jeweler Exclusively Diamonds. The fourth and last trend from Fortune was businesses getting expansion funding from their customers instead of banks and venture capitalists. One early and long-time example from our reading area of crowdfunding comes from the Amboy Cottage Café, which received seed money from local residents willing to pay $100 each for an inscribed coffee cup and free fresh coffee upon visiting. Minneapolis/St. Paul Business Journal recently listed the Twin Cities top crowdfunding deals, led by a company called SmartThings that raised $1.2 million to develop a product connecting household objects to the Internet.

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1 YEAR AGO

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JANUARY 2013 Wayne Kahler of Kahler Automation (Fairmont) was Business Person of the Year. His introduction began: “In the main hallway at nononsense Kahler Automation, the 53-employee business 67-year-old Wayne Kahler founded in 1989, employees over the years have thumbed in hundreds of color-coded stickpins to mark customer sites. If the company had an international map, additional stickpins would grace South Africa, Argentina, Ukraine, and Canada.” Other award winners: Paul Wilke of River Hills Mall (Mankato) and Brian Fowler of SPX Sports and Design (Mankato). Memorable quote: “I would say supplying the equipment for sand fracking systems. We’re rapidly expanding into an international marketplace that wasn’t part of my game plan just five years ago.”—Wayne Kahler, describing his company’s next “big thing.” 5 YEARS AGO

JANUARY 2009 John Finke of HickoryTech (Enventis) was our Business Person of the Year. Other award winners: Dale Brenke of Schmidt Siding & Window (Mankato) and Sam Gault of Nicollet County Bank (St. Peter). Memorable quote: “So far we’ve talked mostly about ‘me.’ I prefer talking about ‘we’ in this interview.”—John Finke, with “we” referring to company employees.

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JANUARY 2004 Lorin Krueger of Winland Electronics was our first Business Person of the Year: Instead of having two other award winners that year, we celebrated our ten-year anniversary with updates on our former cover stories. 15 YEARS AGO

JANUARY 1999 Our cover story was Maureen Gustafson of Mankato Area Chamber & Convention Bureau. Also featured: Cuddy Energy Systems (Mankato) and Robert Fitzsimmons & Sons (Good Thunder).

Contact Ryan today to discuss your financial future. 507.387.6031 w w w. e id e b a illy.com Financial Advisor is a Registered Representative of and offers securities through Securities America, Inc. Member FINRA and SIPC Investment Advisory Services offered through Eide Bailly Advisors, LLC, a Registered Investment Advisor. Eide Bailly Financial Services, LLC is the holding company for Eide Bailly Advisors, LLC. Eide Bailly Financial Services and its subsidiaries are not affiliated with Securities America. Securities America and its representatives do not provide tax or legal advice. CONNECT Business Magazine

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JULIE SCHMILLEN

2ND PLACE: BUSINESS PERSON OF THE YEAR 2014

14 R 20 EA

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SON OF THEof ExecutivePERdirector Y Mankato-based nonprofit has successfully helped more than 100 families in 12 area cities construct new homes.

N OF TH RSO EY PE 14 R 20 EA

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1 st P L A C E

N OF TH RSO EY PE 14 R 20 EA

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Our second place finisher for Business Person of the Year, Julie Schmillen, executive director of Habitat for Humanity South Central Minnesota, grew up in St. James, Minnesota, and spent her early years learning to work and serving others. Her father and uncle owned Schmidt’s Bakery, a special stop for serious sugarphiles pining for deep-fried doughnuts, delicious desserts, and doughy breads. She began working for the family small business about age 11. As for her acquired work ethic, 58-year-old Schmillen said in a Connect Business Magazine interview from her Bassett Drive office in Mankato, “The bakery is now in the third generation of family ownership. My brother and cousin own it today. When starting out, I frosted doughnuts, packaged buns and cookies, swept floors, and cleaned counters. As a teenager, I clerked up front and drove the bun wagon.” Her father had a six-day-a-week work regimen that began every morning at 2:00 a.m. As for serving others, she had an early eye for those in need. In her high school physical education class, for example, her teacher asked her one day to come alongside a classmate with a learning disability who was being picked on by other girls. Schmillen told these girls to leave her friend alone. As she embraced and tutored her classmate, the other girls eventually quieted. Schmillen hasn’t changed one bit. Today, she still has what she calls a “German work ethic” and for years has been a trustworthy advocate for good people needing a gentle hand up. Those two qualities have been her calling card. Since 1990, Habitat for Human South Central Minnesota has helped build 107 homes for families in twelve southern Minnesota communities, and of those, Schmillen has been involved in about 100. In 2007, she helped start the Mankato Restore retail outlet, which recycles building materials for public sale. More recently, she obtained 1.9 acres for a planned 15,500 sq. ft. warehouse/headquarters across from the current Bassett Drive location. In April 2013, Habitat for Humanity Minnesota honored her team with a “Best Practices in Restore Management, Highest Sales Growth Award.” Just remember: each new Habitat-built home represents a dramatically changed family. continued >

Business Person of The Year 2014 winners selected by MSU Mankato College of Business faculty.

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Julie Schmillen | Business Person of The Year 2014: 2nd Place

Schmillen left her parents and siblings for Minnesota State in 1974 to major in social work. She said, “But then I had a sociology professor named Helen Duncan. She was my advisor and favorite professor and I eventually changed my major to sociology, in part because of her influence. Even today, we have been in a book group together since 1992 in Mankato called the Wolf Gang, a name derived from the book, Women Who Run With the Wolves. Helen has always

Julie Schmillen | Home Improvement

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According to Julie Schmillen, Habitat for Humanity South Central Minnesota unofficially began at a First Presbyterian Church (PCUSA) weekend retreat in 1989. The minister asked members to break up into small groups to discuss ideas about using their Christian faith to meet community needs. Dean Otto had the idea of starting a habit in Mankato after hearing Ogden Confer tell stories of driving up to Twin Cities Habitat for Humanity and volunteering. Otto was excited about possibilities in Mankato and through a newspaper ad promoted an informational meeting. To soften the blow, his parents showed up because they thought no one else would. About eight people showed at the downtown library for the first meeting, and by 1990 the organization was a 501 3(c) and had successful fundraising efforts netting needed dollars. Older men nicknamed “The Old Fuds” carried out volunteer home building projects in Mankato. From 1989-1996, the board literally did everything to keep the local Habitat going—all without the benefit of an executive director. Board members paid bills, did construction work, organized fundraisers, and answered telephone calls and inquiries. Said Schmillen, “It had become way too much for them. After I was hired, we moved the office to 512 Mulberry at the St. Peter’s and Paul’s nunnery, and stayed there until the current building on Bassett Drive was built in 2007.”

Home Improvement | Habitat For Humanity

Habitat for Humanity’s Restore facility accepts home improvement products by donation and sells those products to the community to help fund its mission.

been a close friend and been a wonderful mentor. We just bonded, she’s easy to talk to, and she is brilliant.” A sociology degree was appealing because it could be used later to land a position with a nonprofit organization, she said, rather than a government desk job from a social work degree. To finish her degree, she transferred to University of Minnesota-Duluth and

Julie Schmillen | Home Improvement

Getting to know you:

Julie Schmillen Born: November 28, 1955. Education: St. James High School ‘74; and University of Minnesota-Duluth ‘79, sociology major. Family: husband, Robert; children, Benjamin and Ashley.

after graduation in 1979 returned with her husband to the Mankato area, where he had a sales position with Firestone. “I found a job as an outreach worker with Minnesota Valley Action Council,” said Schmillen, “and did home visits in Nicollet and Brown Counties. I educated families on the availability of energy assistance, Head Start, and weatherization help. One woman’s biggest complaint was that her toddler was falling through the floor of their mobile home. That experience struck me on how critical housing was for families.” In 1980, she began working for the City of New Ulm housing department to administer Section 8 housing vouchers and a block grant program to fix up homes in certain areas. It was a valuable experience that continued until the birth of her first child in 1982, after which she stayed home a couple years to raise her children. Over time, she started working again part-time with people with developmental disabilities. All her experience prepared her for her next challenge. From 1990-96, she was director of Overcoming Poverty Together (OPT), a nonprofit advocacy group providing vouchers to Mankato-area homeless people seeking to get out of poverty. She said, “We had so many homeless coming to us because the homeless shelters in Mankato were full. Theresa House wasn’t open yet. We were getting State vouchers for overnight stays at hotels. OPT evolved into the housing mission and from 1993-96 was partially funded by Minnesota Housing Partnership. I was contracted as the network coordinator to provide advocacy and technical assistance, and increase housing capacity for south-central Minnesota. Then in JANUARY/FEBRUARY 2014

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Julie Schmillen | Business Person of The Year 2014: 2nd Place

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She started as the first staff person with a challenge of having to raise enough funds to pay off a $40,000 bank note, complete two homes, and cover her own salary. By 2013, Habitat South Central Minnesota would end up building 107 homes in twelve cities and have a Restore in Mankato. 1996, I saw an ad in the paper for Habitat for Humanity, which was trying to hire its first staff person. I interviewed and started in August in Mankato.” Schmillen has held the same position since. When she began, the local organization was building only its sixth and seventh homes in St. Peter/Mankato. She started as the first staff person with a challenge of

having to raise enough funds to pay off a $40,000 bank note, complete two homes, and cover her own salary. By 2013, Habitat South Central Minnesota would end up building 107 homes in twelve cities and have a Restore in Mankato. Schmillen said, “Habitat for Humanity (mainly) is for people earning minimum

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In 1997, Julie Schmillen and 2,000 other Habitat volunteers arrived in six Kentucky and Tennessee counties to help Habitat families build 50 homes. Her particular assignment was a group of homes in Beattyville, Kentucky, where Schmillen was assigned to media duties and acted as a buffer between former President Jimmy Carter and newspaper reporters. She also did construction work. She said, “Jimmy was personable, hardworking, and went to all 50 homes. Along with his wife, he came to our site for a week. Habitat for Humanity International founder Millard Fuller was there, too. Jimmy spoke several times talking about the importance of giving, community, work ethic, and volunteerism. He was an interesting man who, for the most part, wanted to pick up his hammer and be left alone.”

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wage up to $11 or so an hour. Habitat is not a free program. We like to say it’s a hand up, not a handout. A person buying a Habitat home has to work for it—they have to put in their own sweat equity. Our zero percent interest with no cash down makes buying the home affordable. They sign a 30-year mortgage like anyone else and it’s recorded at the courthouse. Families are required to make monthly house payments for 30 years.” Habitat for Human South Central Minnesota, which covers Blue Earth, Nicollet, Sibley, Le Sueur, and Watonwan Counties, is one of 32 Habitat-affiliated organizations in Minnesota, including nearby ones in Martin/Faribault Counties, Waseca/Steele Counties, and Minnesota Valley (New Ulm). It doesn’t accept any government money. The local group’s mission statement reads: “Habitat for Humanity of South Central Minnesota is a nonprofit Christian housing ministry dedicated to building simple, decent, and affordable housing with and for families in need.” The international organization has offices in Americus and Atlanta, Georgia.

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Each year, Habitat for Humanity South Central Minnesota selects up to eight families for homes from among nearly 200 applicants. The organization has a 10-page application and does credit checks. Only families with good credit scores receive consideration. Habitat for Humanity South Central Minnesota carries the mortgages. Said Schmillen, “In order for families to qualify, we don’t want more than 30 percent of their income going to their house payment. Our payments are $500-$600 a month. We set up an escrow account to pay their taxes and insurance. We pick families that have a good chance to succeed because we can’t afford to have delinquencies.” After choosing a family, the local Habitat hires out excavating, electrical, HVAC, and plumbing work, and seeks discounts from lumber companies. Local Habitat volunteers provide an average of 10,000 hours of free labor building each home. If the family receiving the new home has only one adult, that adult must spend 200 volunteer hours volunteering to build their JANUARY/FEBRUARY 2014

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Julie Schmillen | 2nd Place

own home. If it has two adults, then 400 hours are required. The new owners must take out a second mortgage—also carried by the local Habitat—that prevents the owners from making a windfall profit off a premature sale.

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Just remember: each new Habitat-built home represents a dramatically changed family. Schmillen said one family living in a Mankato mobile home in 2012 had four children, including a set of twins. The twins were being hospitalized for respiratory problems, such as asthma and allergies, due to mold in the mobile home. Schmillen asked the construction manager to place that particular family at the top of the list for construction because of the health risk. (In 2004, Schmillen’s son Ben was hired by the board of directors as the construction manager and has built more

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Habitat On Oprah Said Julie Schmillen, Habitat for Humanity South Central Minnesota executive director: “Oprah sent a video crew to Mankato in 1997 to interview one of our Habitat homeowners. On her show, she showed the interview and the family’s home dedication. My face was on Oprah. Though having been on KEYC-TV Channel 12 many times, I guess my claim to fame really has been being on Oprah.” 30

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Habitat for Humanity South Central Minnesota Phone: 507-388-2081 Address: 1751 Bassett Drive Mankato, MN 56001 Web: hfhsouthcentral.net

than 70 Habitat homes.) She said, “Normally, we build the homes for people in the order of selection. There were a couple families ahead of them, but I told the construction manager to build theirs first after the twins were hospitalized again. When the home was finished, we had a dedication. It was a joyous event. We invited the neighbors and everyone that had helped build the home. The kids looked really happy.” Another Habitat family in Mankato had a single mother and a toddler boy. Their apartment building had obvious drug transactions going on in the parking lot, no place to play, and neighbor kids were shooting pellet guns when her boy was playing outside. Also, drug odors were wafting through the vents from adjoining apartments. Said Schmillen, “That woman wanted something better for her boy. She was going to school and wanted a good future. She knew she didn’t want to raise her son there.” Yet another family helped included a Sudanese woman whose husband had died in an automobile accident. She was trying to raise seven children in a cramped apartment. While the Sudanese woman worked to earn a living, her mother was helping with daycare. Now those children have their own home and yard to play in.

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“In 1996, when I started,” said Schmillen, “I would get telephone calls from various people in the community, from do-it-yourselfers to contractors to lumber yards, wanting to donate leftover building products. They would say something like, ‘We have one window that just doesn’t fit and the store won’t take it back.’ Or we would have a half bundle of shingles left over after a build. I started throwing all these odds and ends into a warehouse. I JANUARY/FEBRUARY 2014

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Julie Schmillen | Business Person of The Year 2014: 2nd Place

Restore is a win-win for everyone. We have prevented more than 700 tons of stuff from going into landfills. Donors get a tax writeoff. We earn money and use that to build more homes for families. Our Restore customers get discounted product are sprucing up their homes to increase the tax base. also would get all these hodgepodge donations. I kept taking the donations because I thought we might be able to use them some day at the jobsite.” In 2004, Schmillen visited Habitat Restores in Winona and Austin that were reselling home building materials to the general public as a means to raise funds, giving local homeowners low-cost buying options, and keeping home building materials out of landfills. A year later, she attended Restore training, met Restore managers from across the U.S., and learned best practices to open and run a store. In May 2007, Habitat for Humanity South Central Minnesota opened its own 7,700 sq. ft. Restore at 1751 Bassett Drive. By 2013, the local Restore was doing more than $250,000 in sales and desperately needing more room. The solution involved Schmillen and her board purchasing 1.9 acres across the street and planning a 15,500 sq. ft. expansion plan that involved using I&S Group. The new building will be financed, in part, with about $550k in equity from the first building, $150k from an Anne Chesley Herlihy trust fund, and $430k from a fundraising campaign. She said, “Restore is a win-win for everyone. We have prevented more than 700 tons of stuff from going into landfills. Donors get a tax write-off. We earn money and use that to build more homes for families. Our Restore customers get discounted product are sprucing up their homes to increase the tax base.” In April 2013, Habitat for Humanity Minnesota honored its Mankato-based affiliate with a “Best Practices in Restore Management, Highest Sales Growth Award.” Recent growth in Habitat home building was helped along by the purchase of three acres in Sibley Park on Rogers Street. Schmillen had been after the vacant property eleven years. Each year, she would send a letter and telephone the owner, politely asking him to sell. One year, he agreed. Twelve of the thirteen lots to date on that property have Habitat-built homes. Just remember: each new Habitat-built home represents a dramatically changed family. Editor Daniel J. Vance writes from Vernon Center.

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OFF-THE-CUFF

Our January 2014 issue means another Business Person of the Year award winner. The professors at the Minnesota State College of Business have done yeoman’s work the last ten years objectively judging our awards from nominees sent in by readers in September. The nominees were judged according to personal character, business results, leadership, and community involvement. Our first Business Person of the Year award went to Lorin Krueger of Winland Electronics in 2004. In early November, I was listening to an AM radio station and

caught a verbose host referring to Obamacare as “The Unaffordable Careless Act.” I’m not treading there. But I will offer my humble take on what has become the most problematic product launch in American history, surpassing failed corporate launches of the Edsel, Olestra, and New Coke. Here’s my angle. From 1990-93, I was a sales representative for a health and beauty aids brokerage selling everything from Tylenol to Centrum Vitamins direct to 64 drug and grocery accounts. I enjoyed the job. It and other jobs like it were my real-world preparation for being a business magazine editor. Somewhere in that three-year span, I helped launch Tylenol PM into a Drug Emporium division. Blue-bottled Tylenol PM contained acetaminophen and a generous nighttime sleep aid. It has been so long, but here’s how my Tylenol PM sales presentation probably went: After greeting a Drug Emporium buyer, I pulled out a deal sheet for his review and went into my sales presentation. Like all Tylenol products I sold, the product was available with the same deals and pricing to all Mid-Atlantic drug accounts. The product had a specific ship date. Daniel J. Vance With Tylenol PM, I might have shown a regular Editor 72-piece case price of about $275, and maybe

JANUARY/FEBRUARY 2014

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OFF-THE-CUFF

an allowance (off-invoice deal) of $72 per case for an introductory buy. (This is for illustrative purposes.) After I flashed some colorful television storyboards and touted a $10 million or so introductory advertising campaign, and showed off some floor display deals, the buyer signed on the dotted line. This was Tylenol, after all. It was an easy sell. Now fast forward to October 1, 2013, the date in American history the IRS and federal government had promised to roll out The Affordable Healthcare Act, also known as Obamacare. Here’s how the launch went for Obamacare. Despite the President’s promise, only a handful of Americans—literally—were able to buy the much-touted insurance product on the national roll out date. The IRS blamed website problems. And even though the IRS knew of the website problems weeks in advance, not one person there in advance alerted buyers of any

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potential delays and after the failed launch no one there could tell buyers when the product would be available. To make matters worse, the IRS then promised another national rollout at the end of November and promptly broke that promise, too. To make matters much worse, the product that did arrive wasn’t anything like the product promised. Suddenly and unexpectedly, millions of good people all over America were getting nasty notices about losing their individual insurance policies, all while unable to buy any replacement product. We had been promised at least 29 times this wouldn’t happen. To make matters much, much worse, the invoice didn’t reflect the promised price. We had been told repeatedly the insurance product would save the average family of four up to $2,500 per year. In fact, its primary salesman had made this promise more than 15 times—without any caveats. I sit here now at my desk trying to

JANUARY/FEBRUARY 2014

imagine what my Drug Emporium buyers would have done if 1) Tylenol PM hadn’t shipped on the promised date; 2) I hadn’t notified them in advance of the delayed ship date, which was important because they had budgeted, and cleared shelf and floor display space for it; 3) the promised deal price was reneged upon; 4) the regular invoice price was higher than the purchase order price, and; 5) a promise for a second ship date also was broken. I can tell you for a fact: After being treated like this and having no way to remedy the situation, these Drug Emporium buyers wouldn’t have purchased anything ever again from me and in the least, going forward, would have drastically reduced shelf space on all Tylenol (McNeil Pharmaceutical) products as retribution, probably relegating the entire line to a single four-foot shelf at knee-level with one facing per SKU. They would have raised hell. Regarding Obamacare, I have had a very hard time believing a product launch so

big, so important, so well financed, so hyped, and with so much lead-time and the manufacturer’s name on the line, could have been so problematic in so many critical areas. It didn’t happen to Tylenol PM and has not happened with any other consumer product launch I’m aware of in American history, including the Edsel, Olestra, and New Coke. It has happened only with the IRS. Apparently, the same federal government that placed Neil Armstrong on the moon can’t build a website. Personally, I spent early 2013 preparing for the launch of Obamacare. Over my lifetime, I’ve given and heard many thousands of sales presentations and usually can spot when salesmen over-sell, over-promise, and will under-deliver. The chief Obamacare spokesman over-sold, over-promised, and now we know he under-delivered. Seeing the inevitable, i.e., the federal

government eventually under-delivering, my wife and I voluntarily dropped our individual health insurance policy last March to join a faith-based, medical cost-sharing organization that received an Affordable Healthcare Act exemption. It’s not well known, but these cost-sharing organizations exist, have been growing rapidly, and have been completely legal more than 20 years. Our cost-sharing organization has about 110,000 people enrolled and it’s not even the largest. We pay each other’s monthly medical bills—there are no premiums. My family has catastrophic “coverage” up to $2 million and should save at least $5,000 annually. Ironically, if not for the Affordable Healthcare Act passage and our anxiety over what we saw as an approaching train wreck, we never would have searched for truly affordable healthcare that fits our budget and healthcare needs. I hope you find your way around the crash site, too.

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BULLETIN BOARD

Any chamber of commerce, convention and visitors bureau, or economic development organization in our reading area—large or small, from Amboy to Waterville—can post on our free bulletin board. For details, email editor@connectbiz.com.

Blue Earth Cindy Lyon, Blue Earth Chamber The 73nd Annual Chamber Banquet on January 17 will honor the Giant’s 35th birthday and Chamber award winners, including 2013 Business of the Year BEVCOMM/CEO Bill Eckles, and Community Service award winner Charles Frundt. Entertainment will be Paul and Kristin Johnson, BEAS musical directors. The evening will have induction of new board members Pamela Anderson (Wells Fargo Bank), Sarah Fering (Fering Financial) and Wyatt Rollenhagen (Rollenhagen & Associates). The Chamber thanks 16 newly joined members.

Fairmont Bob Wallace, Fairmont Area Chamber Graduating seniors of Martin County high schools pursuing a bachelor’s degree in agriculture or an area of study that services agriculture are encouraged to apply for one of two $4,200 scholarships. Sponsors include Agriculture Future of America, Agri-Business Committee of the Fairmont Area Chamber and area businesses. Applications are available from high school Guidance Counselors, Agriculture Instructors, the Fairmont Chamber, or online at www. fairmontchamber.org under News and Events link. Applications are due April 1, 2014.

Lake Crystal Julie Reed, Lake Crystal Chamber Attention fishing enthusiasts: The Lake Crystal Ice Fishing Extravaganza is on January 25. The Crystal Waters Project/Loon Recreation Association invites anglers to Robinson Park Boat Landing from 12-3 p.m. Door prizes, raffles, and concessions will be onsite. $500 in cash and prizes goes to the top fish caught. Cost

only $20 per hole. ($5 for additional hole.) Proceeds from the event go to water quality improvements in the Lake Crystal Watershed.

Mankato Julie Nelson, Small Business Development Center

Thinking of starting a business? Join us for Entrepreneurial Essentials, a free seminar that takes a realistic look at whether you are ready to be an entrepreneur and the basic steps to get started. Topics include: myths about entrepreneurship, the importance of a business plan, basic legal requirements, understanding business financing, and resources available in the region. It is offered monthly at the Mankato WorkForce Center. Register at myminnesotabusiness. com. Click on Workshops & Events.

Mankato Jonathan Zierdt, Greater Mankato Growth Greater Mankato Growth is coordinating the largest citizen advocacy event from our region at the State Capitol on March 18. This is the fifth consecutive year a delegation of business and community leaders from Greater Mankato travels to St. Paul to let lawmakers know about the Greater Mankato region’s importance to the state’s economic vitality. For details on how your business can get involved in this important event, contact Patrick Baker at 507-385-6657 or pbaker@greatermankato.com.

New Ulm Audra Shaneman, New Ulm Chamber New Ulm Area Chamber of Commerce welcomes new members: Semblance (ladies boutique), R&S Cleaning and Maintenance, Farm Bureau Financial Services/Sleepy Eye, Stone Soup, Brunton Architects, and First Choice Pregnancy Services. Also, think spring,

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Local Chamber & Economic Development News

and think shows! The New Ulm Civic Center hosts these upcoming shows in 2014: Farm Show on March 7-8, RV Camping Show March 12-16, and Home & Health Show March 21-23. For show information, please contact us at chamber@newulm.com or 233-4300.

New Ulm Terry Sveine, New Ulm CVB We have two big events on March 1. Bock Fest is a winter celebration on the August Schell Brewery grounds. Enjoy food, Bock Fest Boys music, friendship with new and old “festers” and plenty of fresh Schell’s beer. Afterwards, head on over to Turner Hall for the Concord Singers Fasching (“fah’-shing”), which is a German Mardi Gras featuring two stages with music, food, drink, and dancing. Watch the crazy “Parade of Costumes’ at 7:00 p.m.

North Mankato Mike Fischer, City of North Mankato An October 11, 2013, ribbon-cutting ceremony opened a major new interchange in North Mankato at the intersection of Highway 14 and Nicollet County Road 41. The $19 million project was a partnership between North Mankato, Nicollet County, and MnDOT. The project adds highway capacity by extending the four-lane section of Highway 14 further west, improves access management, improves safety by removing the Nicollet County Road 6 crossing, and provides additional access to Northport Industrial Park.

Sleepy Eye Kurk Kramer, Sleepy Eye EDA Sleepy Eye EDA applied for residential rehabilitation work through SWMHP. An informational meeting was held and interested residents submitted surveys and program pre-applications. Also, there continues to be planning and business discussions regarding the Snow property east edge of town. Plans are being discussed for

additional concrete walkways for easier access to the KIA Monument and Memorial Wall in Veteran’s Park. Over 125 bronze plates so far have been ordered for the Memorial Wall.

Sleepy Eye Trista Barka, Sleepy Eye Chamber Sleepy Eye Chamber of Commerce and Retail Association sponsored several holiday related community events. One was a Ladies Night Out, which brought people to Sleepy Eye to shop our unique shops and stores, and added economic impact to our already busy holiday shopping season. The Chamber of Commerce annual meeting will be held January 22 in which the Big Chief, Shining Star, and Extraordinary Volunteer awards will be presented.

Waseca Kim Foels, Waseca Area Chamber Waseca Area Chamber hosts the annual community awards event on January 25 at Starfire Event Center. In part, the Chamber is honoring Drs. Rodney Kolpin and Rebecca Thompson as 2013 Bosses of the Year, and Waseca Boy Scouts for the James J. Donahue Community Development award. The chamber completed its move to 112 North State. See the new conference room, available for business use, and the Chamber resource and visitor center. See wasecachamber.com for more.

Region Nine Nicole Griensewic, Development Commission It’s a new calendar year, which means new projects and ideas. Let Region Nine Area, Inc. (RNAI) help you! RNAI is a 501(c)(3) nonprofit that can act as a fiscal sponsor for local communities and other philanthropic groups. Working with community and business leaders in the region helps to develop strategies to better retain, sustain, develop, and improve the quality of life in rural communities in the region. Learn more at rndc.org/RNAI.

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By Carlienne A. Frisch Photo by Kris Kathmann

3RD PLACE: BUSINESS PERSON OF THE YEAR 2014

N OF TH RSO EY PE 14 R 20 EA

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BRIAN BENSHOOF

1 st P L A C E

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BUSIN ES S

14 R 20 EA

CEO of $60 million Mankato-based MRCI WorkSource oversees a regional footprint that includes healthy subcontracting and candy businesses.

N OF TH RSO EY PE 14 R 20 EA

BUSIN ES S

2 nd P L A C E

3 rd P L AC E

Brian Benshoof, CEO of Mankato Rehabilitation Center, Inc., has been employed by the nonprofit organization for half of its 60-year history. His goal is to make MRCI the program of choice for clients and families seeking services and to educate the public about the variety and depth of MRCI’s programs and services. Maybe you’ve shopped at the MRCI thrift store in Mankato or New Ulm, and felt satisfied about helping a good cause. Maybe you’ve noticed developmentally disabled adults washing dishes in a restaurant, or you’ve purchased products they packaged in the low-stress environment of a sheltered workshop. What you probably haven’t realized are the multiple roles MRCI plays in providing services to 3,500 clients in 14 locations in six southern Minnesota communities. Benshoof, who has been involved in all of the major changes in program development and delivery, said, “We like to see ourselves as trendsetters in the community, giving people choices. When you try to find people a job, the more choices you give them, the better. I don’t think there are many nonprofits or businesses that have as clear of a mission as ours. A non-profit has a guiding principle, which doesn’t lend itself to ambiguity, but ours is complex.” continued >

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JANUARY/FEBRUARY 2014

Business Person of The Year 2014 winners selected by MSU Mankato College of Business faculty.

Brian Benshoof | Business Person of The Year 2014: 3rd Place

Operating with an annual budget of more than $60 million, MRCI offers transitional vocational programs, extended employment programs, and day training and habilitation programs in several communities. Jay Weir

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The MRCI story began in 1953, when a group of Mankato citizens established a “Voluntary Health Organization” to provide people with disabilities the opportunity for physical therapy under the guidance of a medical consultant. Twelve years later, MRCI moved from its 700-square foot building in downtown Mankato to a new 17,000-square foot location. The move ushered in a wave of new vocational services, including work adjustment training, work evaluation and the establishment of the Sheltered Workshop and Developmental Achievement Center. Rapid growth of the facility-based work program resulted in construction in the late ’70s of MRCI’s current 62,000-square foot headquarters at 15 Map Drive, Mankato. The following decade brought establishment of MRCI’s programs in New Ulm, Fairmont, Carver County, and Scott County. In the mid-‘80s, MRCI began placing clients in integrated working situations, where they worked alongside people who were not disabled. Today, about two thirds of MRCI’s 3,500 clients work in the community, and about one third work in the facility-based work programs, performing sub-contracted work. MRCI has a $20 million payroll, making it one of the larger employers in Mankato, according to Benshoof. Operating with an annual budget of more than $60 million, MRCI offers transitional vocational programs, extended employment programs, and day training and habilitation programs in several communities. (See sidebar.) Vocational welfare-to-work employment training comes through a contract with Blue Earth County Employment Services and with Steele County Employment Services. Funds come from a myriad of sources, some from employers for whom MRCI clients work, much from various government programs. For example, Medicaid provides $30-$100 per diem for day training and habilitation programs, which are licensed day programs for people who have severe disabilities. Benshoof said, “As they work, they require a higher ratio of staff to clients, between one to eight and one to three. Some clients need assistance with using the restroom or eating.” In fee-for-service transitional programs, the State of Minnesota contracts for MRCI staff members to evaluate people’s needs, abilities, and vocational abilities. Sub-contract work with companies such as Tony Downs (where MRCI clients package canned chicken), Pioneer Catering (which provides employees for Bethany Lutheran College’s food service) and River Hills Mall (where MRCI clients have cleaned the food court since

Service Source | MRCI

its opening), account for $12 million income annually. Quality Products, an MRCI-based limited liability corporation, boasts Menards as a customer. Through the program, MRCI clients annually label about six million bags of candy packaged in MRCI’s candy plant in St. Peter. “Starting the candy business was a really good choice because we had lost a great deal of hand work to automation and overseas outsourcing,” Benshoof said. “We package a wide variety of candy that sells in Menards stores across the country. Breaking into this industry was challenging and required working with candy brokers. We have to compete on quality and price. We don’t look for charity in our business transactions. There has to be a ‘win’ for an employer or customer.” United Way funds, about $85,000 annually, round out the MRCI budget. The multiplicity of programs and funding sources may

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MRCI Overview • MRCI is a private, non-profit 501(c)(3) tax-exempt organization, governed by an 18-member board of directors. • MRCI WorkSource seeks to create innovative and genuine opportunities for people with disabilities or disadvantages to support their community participation. • The MRCI Foundation’s goal is to build an endowment to perpetuate the MRCI WorkSource mission. • The MRCI Auxiliary, governed by an 18-member Board of Directors, operates two thrift stores and provides funding to several MRCI programs, as well as sponsoring social activities for WorkSource participants. • Transitional vocational program provides short-term vocational services for a fee.

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Brian Benshoof | Business Person of The Year 2014: 3rd Place

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sound overwhelming, but Benshoof takes it in stride. “There’s a joke that if you’re not good at math you go into social services. But I’ve made the transition to the world of finance,” he said. “We have the business aspects, but our profits go back into MRCI; they don’t go to shareholders. When I moved into management, I didn’t know much about business and had to catch up. I took some business courses, including a week at the Carlson School of Business at the University of Minnesota. When I was MRCI chief operating officer, our chief financial officer, who had been an auditor, taught me a perspective on cash flow, on planning capital expenses, and the idea that financial management is critical.” Growing up in Bloomington, Minn., the oldest child of parents who were educators, Benshoof learned personal financial skills and a work ethic. “At 15, I was a busboy at the Richfield American Legion Club,” he said. “My dad had to drive me to work. I learned to work for others, and I worked hard to save money for my first car. Working at a steak house as a grill cook, I learned teamwork and organizational skills. While attending college in Bemidji, I worked nights in a grocery store. I’m proud I paid my way through six years of college (with a grant for graduate school) and had only $4,000 in student loans. I’ve always been good at writing and have used that ability to write successful grants, not only for graduate school, but also for MRCI,” he said. “It’s not hard for me to formulate a thought. I’m comfortable talking to a group, and speaking is an intrinsic aspect of my job. Promotion of what we do is important.” Although no one in his family has a disability, Benshoof felt drawn to vocational rehabilitation counseling. After earning a BS degree in psychology from Bemidji State University in 1980, he enrolled at Minnesota State in Mankato to pursue a graduate degree in rehabilitation counseling, a program he completed in a little more than a year. “My wife, Nancy, whom I married in 1981, had just finished a four-year degree in medical technology, so we picked MSU because Mankato offered job opportunities for her,” Benshoof said. “My first day in the graduate program I was singled out by Dr. Don Clark to do volunteer work because he quickly saw I knew little about disabilities. I took a tour of MRCI and became a volunteer for six months. Eventually I had an internship here as a vocational rehabilitation counselor working alongside a great group of mentors. MRCI hired me in 1983 as a vocational rehabilitation counselor, first in Fairmont, then Mankato. Our budget then was $10-15 million. The closing of state institutions, which was a good thing, had a large impact on our growth. We began day-training habilitation programs, and the state provided waivered service dollars. ” Benshoof moved up the MRCI career ladder over time. He once turned down a job offer in another city because “something didn’t feel right,” only to learn six months later the facility had shut down. After working two years as a vocational rehabilitation counselor, he became a job placement specialist, also for two years, developing job opportunities for people with disabilities in Carver and Scott Counties.

Service Source | MRCI

He then spent 12 years as MRCI WorkSource transitional services manager while continuing working with Carver and Scott Counties, where he established MRCI’s first community employment services. “The biggest change for me was developing community-based services,” he said. “That evolved into providing a complex array of services very intertwined with communities and employers.” Benshoof became director of consumer employment for MRCI WorkSource in 1998, a position he held nine years. He directed

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Brian Benshoof | Service Source

Benshoof Basics 1) Family: “Nancy and I have two grown children, Ann, a teacher in Kasson, Minn., and John, a professional motor sports mechanic and crew member on a racing team in Indianapolis. Nancy still works at the Mankato Clinic, and we enjoy this stage of our lives, but I’m looking forward to the next stage with grandchildren.”

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2) Hobbies: “I like to putz around with old things in my workshop, antique motors that I like to use when fishing. Nancy and I enjoy outdoor activities together. 3) Accomplishment: “I’m most proud of raising two good kids who became good, successful adults.” 4) Most valued possession: “I really don’t value the things I have the privilege of owning. I like my boat, but if it had to go, it wouldn’t be the end.” 5) Most valued intangibles: “My faith in God, my family, my job.” 6) Words that describe you: “Calm, caring at my core, trusted, and reliable. I’ve been showing up here for 30 years. I try to live what I believe, but in no way am I perfect.” 7) If not in this job: “I could have been a teacher. I have taught as an adjunct and maybe will do some of that in retirement. I might retire 10 years from now, and I can’t see myself sitting around.” JANUARY/FEBRUARY 2014

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Brian Benshoof | Business Person of The Year 2014: 3rd Place

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the operations of vocational employment programs in Mankato and Shakopee, developed multi-county, community-based services for people with mental illness, and handled the establishment and growth of employment services for the welfare-towork program (MFIP) in three counties. The transition from manager to visionary was completed in 2007, when Benshoof became MRCI WorkSource’s chief operating officer, responsible for establishing new program direction and development. It was no surprise he procured grant funding to develop new programs to broaden and diversify MRCI’s service offerings. From a more mundane perspective, he prepared MRCI for accreditation by the Council on

Accreditation of Rehabilitation Facilities, a process that requires compliance with more than 1,000 standards and a survey by a team of people. Helping communities understand MRCI’s mission and impact is a priority for Benshoof and his staff. He said, “We have a communications director and a plan. We’re deliberate in talking about who we are and what we do. We’re a nonprofit, but a business, too. We compete with other nonprofits for employers for our clients. Last October, we rented a big room at Country Inn & Suites in Mankato and hosted about 100 employers with a dinner and program to thank them for what they

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Community Connections • Administrative and Program Surveyor, CARF • President, Minnesota Association of Community Rehabilitation Organizations (lobbying, political action), legislative committee co-chair, past secretary. • President, Greater Mankato Rotary Club • Mankato Children’s Museum board member • Minnesota Rehabilitation Association, past president • Mankato Area Council for Quality, past board member • Theresa House, past president • Mankato YMCA past board member and building/grounds committee chair • Mankato Y’s Club, past president • Crossview Covenant Church, past diaconate council chair, past building/grounds committee chair, past church council member

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Service Source | MRCI

do for our clients. “We promote ourselves in the community. It’s important for us to be seen as contributing to the community. The goal of being the program of choice has been drilled down to the direct staff level, our most important people, to meet the expectations of clients and their families. I’m really proud of our staff. I recognize I’ll never be the expert on everything, that I need to be surrounded by experts. As a leader, you need to have people who know more about certain things that you don’t know about. We’re building a culture here that it’s okay to try things, to explore, and to make mistakes. We went from a narrower approach of serving people at work to giving them many more options. Now we work with school districts, the graduates enter our programs, and the parents and grandparents are involved in planning the future for these young people.”

Benshoof ’s workday begins around 6:30 a.m. and ends about 4 p.m. He said, “I seldom take work home. I like to keep my family and work time separate. Nancy and I have always worked hard to sit down at the dinner table together. The better the people you have working around you, the less you have to work 15-hour days. I rely on a lot of people who, with my direction and vision, do the right thing.” Much of Benshoof ’s day is spent in meetings—four or five a day, some in the community. His activities include taking part in Greater Mankato Growth activities and having a leadership role in Greater Mankato Rotary Club and serving on the Mankato Children’s Museum board. Community leadership is not new to him. Two decades ago, he served as president of the Minnesota Rehabilitation Association and has since held numerous leadership positions with many organizations. (See sidebar on p. 44.) He values the connections

THE ESSENTIALS

MRCI Address: 15 Map Drive Mankato, MN 56001 Phone: 507-386-5600 Web: mrciworksource.org

he’s made over the past three decades. “When you’ve been here 30 years, you see people’s lives as they grow,” Benshoof said. “When I visit in Fairmont, I see some of my original caseload from 1983 and we joke how we’re all getting old and fat. I have no regrets in life. I believe it has been planned out for me. I’m a person of faith, and I think God has a plan for everyone’s life. It’s up to us if we follow it.” Carlienne A. Frisch writes from Mankato.

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Congratulations Jon Rippke Thank you for your 40 years of dedicated service to the firm. We wish you well in your retirement!

Engineering in Civil, Water, Wastewater, Transportation, Water Resources, Landscape Architecture and Surveying Services. 1960 Premier Drive, Mankato, MN 56001 | 507-625-4171 | www.bolton-menk.com DESIGNING FOR A BETTER TOMORROW JANUARY/FEBRUARY 2014

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Very New or Re-formed Businesses or Professionals New To Our Reading Area

WASECA

Four Seasons Athletics Jeremiah and Jaala Miller met through working in Waseca at ELM Homes, married, and in August together purchased Four Seasons Athletics at 124 North State. Jaala today manages the business while husband Jeremiah will likely join her years from now after ending his full-time Minnesota National Guard career as a human resource warrant officer. “I grew up in Waseca and graduated from high school in 1996, and my wife went to Owatonna, and we met through an old employer of ours, ELM Homes,” said 36-year-old Jeremiah in a telephone interview. Jeremiah had always wanted to own a business: Uncle Eugene Miller owns ELM Homes and Uncle Andy Miller owns American Family Insurance (Waseca). Said Jeremiah, “Jaala was involved in sports growing up. She played hockey and some track. We also had four children who were into just about every sports activity. I told my wife one day that I’d like to buy a business. Four Seasons Athletics had been in Waseca 36 years. We knew the owners were getting toward retirement age and I had graduated from high school with one of their daughters.” Jeremiah has been in the Minnesota National Guard 19 years and has had tours of duty in Iraq and Afghanistan. The intensity of a war zone likely prepared him for owning a small business. His wife worked at ELM Homes 15 years. Jeremiah has a twoyear business administration degree from Rasmussen College,

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JANUARY/FEBRUARY 2014

and Jaala a two-year community social services degree. Jeremiah said, “My wife likes interacting with people and being involved in the community. She has taken on the role of running the business. Every day is different. We custom order hats and shirts, and people are always asking her for tee-shirt design ideas.” The business sells sporting apparel and equipment, and promotional items to local businesses—everything from water bottles to shirts. The Millers also enjoy running half-marathons. Jaala is a fitness coach. FOUR SEASONS ATHLETICS Open: Monday–Saturday Address: 124 North State Street Web: fourseasonsathletics.com

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HOT STARTZ!

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BLUE EARTH

Blue Earth Drug

ART SIDNER

Co-owners Gina Zierke and Ryan Milbrandt doubled floor space at Blue Earth Drug when opening up a new retail building on US 169 about a year ago. Zierke had co-owned the business since 2000 with another pharmacist. Milbrandt bought in more recently. Said 28-year-old Milbrandt in a Connect Business Magazine telephone interview, “I grew up in Elmore and graduated from Blue Earth Area High School in 2003. I became interested in my profession when a young woman in pharmacy school spoke to my high school science class. She talked about the demand in the field and said if anyone there was interested in science, they should consider pursuing pharmacy as a career. I would remember what she said.” Mildbrandt began working at Blue Earth Drug his senior year in high school, which included making deliveries and mopping floors, and continued at the business during summers while studying pharmacy at South Dakota State. After graduating from college in 2010, he went to work full-time for Blue Earth Drug. Literally, on the day he received his license, he became a staff pharmacist. He began buying into the company, and eventually replaced Zierke’s former business partner. He said, “With retail I like the connections you make with your customers. To me, it’s a whole lot more rewarding working for myself and being able to make some decisions on how we

help our customers versus working for a major chain.” The new building on US 169 has a separate pharmacy for long-term care patients and has expanded space for overthe-counter medication and durable medical equipment, for example. Including Zierke and Milbrandt, the business has four pharmacists. About the owner he bought out, Milbrandt said, “I can’t say enough nice things about Rich. He’s been a tremendous mentor. He had the dedication to make sure he did everything he possibly could to help anyone coming through the door.” BLUE EARTH DRUG Address: 125 South Grove Street (US 169) Web: blueearthdrug.com

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HOT STARTZ!

Very New or Re-formed Businesses or Professionals New To Our Reading Area

Kitchenmaster, Klooster & Begalka, CPAs Jill Klooster and Kelly Begalka in October 2013 bought in as majority owners with what had been called Kitchenmaster & Co. Klooster joked in a telephone interview, “We’ve saved the Kitchenmaster name because of Bob’s (Kitchenmaster) longevity in this area, and have added our own names to let people know we don’t have anything to do with kitchen remodeling or appliances.” Klooster and Begalka have nearly identical career paths. Klooster grew up in Rockford, Minnesota, and Begalka in New Ulm. They both followed nontraditional routes to being CPAs. Klooster worked with Minnegasco eight years as a customer service representative/forecast analyst and TCF Bank five years as a personal banker. Begalka worked at various bookkeeping and office jobs before going to college. Both graduated from Minnesota State University, became CPAs, and both started working for Bob Kitchenmaster before buying in. Said 47-year-old Klooster, “Bob has always been somewhat of a pioneer in accounting. He was one of the first CPA firms to bring financial services into the business. He also was vocal in his opposition of having licensed accountants being grand-

fathered in as CPAs. He also began billing a client based on the value of a meeting versus the time.” Klooster stressed her firm wasn’t “your typical accounting firm,” and would be continuing Bob Kitchenmaster’s innovations and adding others, including leveraging technology with clients that might prefer communicating via texting or video conferencing. She said they also worked with clients interested in using the firm for preparing only a portion of a tax return or only helping with planning. Klooster said, “Bob has been an awesome mentor. I couldn’t ask for anyone better to work with or for. He is passionate about what he does, cares for our clients, and is a great teacher. He is patient and has a great sense of humor.” Klooster and 45-year-old Begalka both are married and both have children at Mankato West and Dakota Meadows. KITCHENMASTER, KLOOSTER & BEGALKA, CPAS Telephone: 507-625-4910 Web: kitchenmaster.com

Jill Klooster

Kelly Begalka

To be considered for one of three spots in the March Hot Startz!, email the editor at editor@connectbiz.com. Businesses considered must have started—or changed greatly in form—within one year of our publishing date. Professionals chosen must be new to our reading area.

Shared Values Firm reSultS Agricultural • Banking • Commercial • Construction Corporate & Business • Employment • Environmental Estate Planning & Probate • Family • Insurance • Litigation • Personal Injury & Wrongful Death Real Estate • Workers Compensation

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PRESS RELEASES

To submit a press release for publication:

Email: editor@connectbiz.com Fax: 507-232-3373

Blue Earth

Madelia

Dave Klabunde is the new controller of Express Diagnostics International. The US 169 opening ceremony December 5 celebrated reconstruction and resurfacing of US 169 and installation of three roundabouts in a $13.6 million partnership project with MnDOT, Faribault County and the City of Blue Earth.

From the Chamber: Bridget Hayes is the new Chamber office associate.

Fairmont The National Alliance on Mental Health named State Sen. Julie Rosen Legislator of the Year. From the Chamber: new members include Randy Nelson, ISA certified arborist, brewkaz Coffee House & Café owned by Dan and Dawn Kastner, and Sylvan Learning Center/ executive director Brent Burns; Tim and Tammie Hestad are new owners of enliven; and Brett Hestad is a personal wellness coach.

Lake Crystal From MinnStar Bank: CEO Steve Olson was appointed to the Independent Community Bankers of America Federal Delegate Board; and the bank hired CPA Ryan McCabe as credit analyst.

Mankato New businesses include Howe-to Fitness, owned by Stephanie Howe, and Massad’s Mediterranean Grill, at 1633 Monks Avenue. State Sen, Kathy Sheran received the American Heart Association Legislator of the Year award for establishing the Minnesota Acute Stroke System of Care and Southern Minnesota Recovery Connection award for being an advocate for people recovering from addictions. Hy-Vee and Minnesota 93 radio kicked off an in-store donation program to benefit the BackPack Food Program. From Enventis: the company awarded a $3,000 grant to Merely Players for “Little Shop of Horrors” production; Enventis Foundation gave $5,000 to Feeding our Communities Partners for the BackPack Food Program; and Todd Holland joined Enventis as senior director and controller. Pioneer Bank reached an agreement to acquire Farmers State Bank of Madelia and all branches. Primrose Retirement Community of Mankato received a National Research

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Corporation Excellence in Action award. Davis Comfort Systems received the TCS Platinum Dealer Award and the Connected Home Solutions Award for outstanding performance in 2012. I&S Group acquired Paulsen Architects; Bryan Paulsen directs the new service line; and Jeff Schoenecker, PE, is senior systems engineer. Jeff Kaul is a Century 21 Atwood Realty broker. Marco purchased the hosted/cloud services business of Twin Cities-based InCompass IT and the Bemidji area’s Trust Technology Services.

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Bolton & Menk Former President Jon Rippke retired after 40 years with Bolton & Menk. He was involved with these boards: American Council of Engineering Companies/ Minnesota, American Public Works Association/Minnesota, MSU Civil Engineering Advisory Board, and Greater Mankato Growth. He helped in 2000 establish the Minnesota State Civil Engineering program. He was North Mankato City Engineer more than 25 years and 2002 Minnesota Society of Professional Engineers “Engineer of the Year.”

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Habitat for Humanity received a $150,000 donation from the Anne Chesley Herlihy trust. Gislason & Hunter partner Michael Dove received the Honorary American FFA Degree for advancing agricultural education and FFA. Reed Glawe is a licensed agent and Gina Ludewig is a paralegal and real estate specialist at Title Resources. Paul R. Schneider is an associate attorney at Blethen, Gage & Krause. BidKato online auctions opened a 6,000-square-foot facility at 777 S. Victory Drive. CPA Carlie Stevens and Alexander Swanson were promoted to manager and senior accountant respectively at Swanson Hinsch & Co. Michael Schulenberg, CP-American Board Certified Prosthesis, has joined Prosthetic Laboratories. Southern Minnesota Initiative Foundation awarded $51,543 to six area home visitation programs. The sculpture “Saturday Distractions” received the People’s Choice award as one of the 2013 CityArt Walking Tour winners and will be purchased by the City Center Partnership for permanent installation in the City Center. Cosmetology Training Center added two programs: esthetics and massage therapy. Greg Thoen is an Ameriprise financial private wealth advisor, one of about six percent of nearly 10,000 Ameriprise financial advisors to achieve that status. From Greater Mankato Growth: new members include BidKato, Sports

MANKATO

Minnesota State University College of Business The Princeton Review named Minnesota State University College of Business one of the nation’s most outstanding business schools.

Warehouse, Doherty Staffing Solutions and Citizens Community Federal; and October job numbers reached a six-year high for the Mankato-North Mankato MSA, with 55,029 jobs, only seven jobs shy of the highest ever October in 2007. Farrish Johnson Law Office, the 10th oldest law firm in Minnesota, is now in its 120th year. Businesses and professionals receiving Greater Mankato Growth awards include Drummer Companies, Lidstrom Commercial Realtors, Jones & Magnus, Attorneys at Law, Oleson & Hobbie Architects, Mankato Area Public Schools, Bolton & Menk, Ecumen Pathstone Living, and The Thro Company; Kate Loging received the Hap Halligan Leadership Award, and Matt Norland, the Young Professional of the Year Award. Visit Mankato Awards went to Kiwanis Holiday Lights and Vetter Stone Amphitheater; Chopps Bar received the City Center Partnership Award.

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New Ulm From the Chamber: New members include R & S Cleaning and Maintenance and Farm Bureau Financial Services; Dr. Natalia Kramarevsky, ophthamologist, joined New Ulm Medical Center; Ryan Domeier is Rooms and Rest manager. New Ulm Medical Center is one of 1,099 U.S. hospitals named Top Performer on Key Quality Measures by The Joint Commission, the leading accreditor of healthcare organizations in America. Jensen Motors celebrated its 50th anniversary. Ag commercial lender Peter Guggisberg of Bank Midwest completed first-year coursework at the Graduate School of Banking. Aaron Lambrecht is an associate director of the Northwest Lumber Association board of directors. Brant Drill of Citizens Bank Minnesota graduated from the Graduate School of Banking at the University of Wisconsin,

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Madison. The bank promoted the following employees: Kathy Drexler, Assistant Vice President of Operations, Lori Kollmann, Assistant Vice President of Office Management and Cindy Lewis, Assistant Vice President of Client Services. NEW ULM

August Schell Brewing August Schell Brewing, which released Framboise Du Nord in November, received a bronze medal for its Oktoberfest beer from the Great American Beer Festival and silver awards for Oktoberfest, Chimney Sweep and Pils at the Beverage Testing Institute’s World Beer Championship.

North Mankato Shelley Megaw is South Central College director of college relations. Cole Nelson joined Frandsen Bank & Trust business banking department as assistant vice president; and bank vice

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president Nick Hinz graduated from the Graduate School of Banking at the University of Wisconsin, Madison. Timothy Rapoport, P.E., joined Brunton Architects & Engineers.

St. James New businesses are Solheid Painting and Lastine Chiropractic. Sarahi Showalter now owns Lord’s & Lady’s Hairstyling. Anytime Fitness completed a $50k renovation. Ryan Anderson is a new staff writer at The Plaindealer.

St. Peter Cory Abels, named Vice President of Commercial/Ag Lending at First National Bank Minnesota, also serves customers in Mankato and Gaylord.

Sleepy Eye From the Chamber: New members include Farm Bureau Financial Services (agents Randi Wise and Michael Wise),

JANUARY/FEBRUARY 2014

and Todd Kuehn Farms, Wabasso; Julie Schmitt received the 2013 Bridge Builder award at Bridging Brown County’s annual meeting; and Sleepy Eye Servicemen’s Club celebrated its 50th anniversary by issuing a commemorative Christmas ornament.

Springfield Prairie Plans celebrated 25 years in business.

Waseca From the Chamber: new members include Century 21- Amy Borneke and Rose Oil LLC; Brad Dushaw is the recreation director at Community Ed & Recreation; Curtis Smith owns Quality Print; Four Season Athletics new owners are Jeremiah and Jaala Miller; E.F. Johnson celebrated 90 years in business; Schmidt Hoehn Law was recognized as 2013-14 Business of the Year; Pat Heydon is director of Steele-Waseca Habitat for Humanity; new Waseca Public Library director is Stacy Lienemann; and Jesse Starkson is McRaith Funerals Homes and Crematory director.

NATIONAL OPINION

With fourthquarter GDP growth estimated at less than 2 percent, an unemployment rate above 7 percent for almost five years, and the lowest percentage of Americans employed or looking for work since 1978, America needs lessons from President John F. Kennedy. Here are six lessons from Kennedy, who was assassinated 50 years ago in November. #1: Economic growth creates jobs Kennedy, dissatisfied with economic growth rates of 2 percent, wanted four or five percent growth. Speaking on the Indianapolis radio station WTTV on Oct. 4, 1960, he said “In order to maintain full employment in the 1960s, which, after all, must be the object for all of us, we are going to have to have an economic growth twice

what we had last year, about 4.5 percent per year instead of 2.4 percent.” Kennedy continued, “We have to secure 25,000 new jobs a week for the next 10 years in order to provide jobs for all of the people coming into the labor market. That is a terribly difficult task at a time when automation and new machinery has taken the jobs of men. And at the present rate of economic growth or productivity increase, we are not going to have those jobs for people.” The labor force in 1960 was 70 million, now it is 156 million. Kenne dy ne e de d 25,000 jobs a week in the early 1960s. In 2013, America needs about 50,000 jobs a week, or 200,000 a month, to generate Diana employment in an Furchtgott-Roth expanding economy with a growing population. That does not even count replacing the 1.5 million jobs that disappeared during the 2007-2009 recession. #2: Lower taxes stimulate economic growth Kennedy eloquently described the potential effects on economic growth of reducing taxes. When people have more money, they spend it, generating additional tax receipts.

On Sept. 18, 1963, he said, “A tax cut means higher family income and higher business profits and a balanced federal budget. Every taxpayer and his family will have more money left over after taxes for a new car, a new home, new conveniences, education and investment. Every businessman can keep a higher percentage of his profits in his cash register or put it to work expanding or improving his business, and as the national income grows, the federal government will ultimately end up with more revenues.” n 1963, he suggested cutting individual income taxes from a range of 20 percent to 91 percent to a range of 14 percent to 65 percent. Kennedy wanted to lower the top corporate tax rate from 52 percent to 47 percent. #3: Tax havens attract multinationals Kennedy understood the role of corporate tax rates in attracting foreign investment. In a message to Congress on taxation on April 20, 1961, he said, “In those countries where income taxes are lower than in the United States, the ability to defer the payment of U.S. tax by retaining income in the subsidiary companies provides a tax advantage for companies operating through overseas subsidiaries that is not available to companies operating solely in the United States. Many American investors properly made use of this deferral in the conduct of their foreign investment.”

JANUARY/FEBRUARY 2014

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NATIONAL OPINION

Note that Kennedy said “investors properly made use of this deferral.” These days, investors are often attacked for seeking low-tax locations. Today the top American corporate federal tax rate is 35 percent, compared to the 24 percent average of the countries in the Organisation of Economic Cooperation and Development. Although President Obama and the leaders of the congressional tax-writing committees agree that U.S. corporate tax rates are well above average and discourage U.S. investment, they have not succeeded in reducing them. #4: High taxes slow capital formation The disincentive effects of high taxes for investment in plant and equipment were a constant theme in Kennedy’s presidency. Kennedy advocated an investment tax credit to encourage capital formation. Although it would have been more efficient to allow capital to simply be expensed, an investment tax credit is better than nothing. On Feb. 13, 1961, in a speech to the National Industrial Conference Board, Kennedy said, “We must start now to provide additional stimulus to the modernization of American industrial plants…I shall propose to the Congress a new tax incentive for businesses to expand their normal investment in plant and equipment.” And on Jan. 23, 1963, he said, “The present tax codes…inhibit the mobility and formation of capital, add complexities and inequities which undermine the morale of the taxpayer, and make tax avoidance rather than market factors a prime consideration in too many economic decisions.” #5: High taxes reduce risk-taking Well before economics professors William Gentry of Williams College and Glenn Hubbard of Columbia University documented the negative effects of high taxes on risk-taking and entrepreneurship, Kennedy wrote in a Jan. 24, 1963, message to Congress, “Our tax system still siphons out of the private economy too large a share of personal and business purchasing power and reduces the incentive for risk, investment and effort—thereby aborting our recoveries and stifling our national growth rate.” When taxes are higher, risk-taking is reduced, because government takes a larger 54

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portion of the payoff from risk. Rather than risk capital, people prefer the safer stream of income that comes from wages and salaries. Yet entrepreneurs add to the growth of the economy by using their ideas to create new firms, and often, new jobs. The success of Apple, Twitter, and Google offers just a few examples of the payoff to new ideas. If Apple co-founder Steve Jobs had simply taken a job with IBM, the development of the computer industry would have been far slower. #6: Lower taxes generate more revenue for Uncle Sam Kennedy was one of the first presidents to articulate a supply-side theory. On Nov. 20, 1962, at a news conference, he said, “It is a paradoxical truth that tax rates are too high and tax revenues are too low and the soundest way to raise the revenues in the long run is to cut the rates now…Cutting taxes now is not to incur a budget deficit, but to achieve the more prosperous, expanding economy which can bring a budget surplus.” Congress did not pass Kennedy’s tax cuts until after his death on Feb. 26, 1964, in the Revenue Act of 1964. The bill reduced the top marginal rate from over 90 percent to 70 percent. Tax revenues increased from $94 billion in 1961 to $153 billion in 1968, and the new rates led to a greater percentage of tax revenue coming from those making over $50,000 a year. Tax receipts from those making over $50,000 rose 57 percent, whereas receipts from those making under $50,000 rose 11 percent. Ira Stoll, author of JFK, Conservative, Kennedy’s tax cuts were the model for Reagan’s, and they did exactly what Kennedy predicted they would—lead to economic growth so vigorous that federal revenues ended up rising even at the lower tax rates. Kennedy wanted to cut not just the 91 percent income tax rate to 65 percent, but also the 25 percent capital gains rate to 19.5 percent—lower than the 23.8 percent top rate now under President Obama.” After the tax cuts, real GDP grew at 5.8 percent in 1964, 6.5 percent in 1965, and 6.6 percent in 1966. The unemployment rate declined from 5.2 percent in 1964 to 3.8 percent in 1966, falling all the way to 3.5 percent in 1969. Although Kennedy did not live to see it, the rest of us did. Diana Furchtgott-Roth, former U.S. Department of Labor chief economist, directs Economics21 at the Manhattan Institute.

JANUARY/FEBRUARY 2014

Writing for Salon, Brian Beutler speculated that if President Obama was lying about whether people could keep their current insurance plans under Obamacare, it was a “noble lie.” Several other commentators have made similar observations. Obamacare may be a mess; it may be built on a framework of legal, political, and economic distortions; and it may have been pushed through by playing the hardest of political hardball. But the president’s heart was in the right place. So many defenses of big government in the face of repeated failure seem to boil down to this: Don’t judge us by results, judge us by our good intentions. Michael D. Tanner In this case, there clearly was a problem before Obamacare. Healthcare in America cost more than in any other country, and that cost did not always correlate with results. At the same time, too many Americans lacked health insurance, making it difficult for them to get the care they needed. The president’s inclination was to ignore possible market-based fixes and turn to a government solution—despite the fact that many of the problems in the healthcare system could be traced to earlier government interventions, and despite the government’s long track record of failure in addressing other social and economic problems. That he was trying to do something was good enough. The president continues to make this case, arguing that he won’t reconsider the healthcare law because “I’m not going to walk away from 40 million people who have the chance to get health insurance for the first time.”

It is said the road to hell is paved with good intentions. Big Government apparently uses the same road crew. Yet even by this standard, Obamacare fails. According to the Congressional Budget Office, by 2023, long after the Affordable Care Act is fully implemented (and the website is presumably working), 31 million Americans will remain uninsured. Sometimes good intentions are not enough. Of course, Obamacare is hardly the only government program that’s failed to live up to its good intentions. Take government’s efforts to lift Americans out of poverty. No one can deny trying to reduce poverty and help those in need is a worthy goal. But the federal government spends $680 billion per year on 126 anti-poverty programs. State and local governments spend an additional $280 billion. That’s close to $1 trillion. In fact, since Lyndon Johnson declared the War on Poverty half a century ago, we’ve spent more than $15 trillion on the effort, but poverty rates have barely budged. Looking at specific programs, consider food stamps, officially known as the Supplemental Nutrition Assistance Program (SNAP). Any effort to cut spending on food stamps inevitably brings charges of heartlessness. Yet the Government Accountability Office found that, “the literature is inconclusive regarding whether SNAP alleviates hunger and malnutrition for low-income households.” Similarly, a study for the Department of Agriculture found that for nearly all vitamins, minerals, and macronutrients assessed, the dietary intake among SNAP participants was comparable to that of non-participants. Well, then, let’s try to help poor people get better jobs. Unfortunately, government job-training programs have an almost unblemished record of failure, with some programs actually leaving participants less prepared for future jobs than those never enrolled. Overall, the GAO concludes, “little is known about the effectiveness of most programs.” No doubt that’s in part because “only five programs have had an impact study completed since 2004.” And who could oppose a program to help

low-income Americans receive healthcare? Indeed, there has been a barrage of criticism in the media of governors who have refused to go along with Obamacare’s expansion of Medicaid. John Kasich of Ohio, who bucked his fellow Republican governors by pushing through a Medicaid expansion, framed the issue as his Christian duty to help the poor, saying “my personal faith in the lessons I learned from the Good Book, run my life. . . I can’t look at the disabled, I can’t look at the poor, I can’t look at the mentally ill, I can’t look at the addicted and think we ought to ignore them.” Yet, the first randomized, controlled study of the program’s effectiveness, the Oregon Health Insurance Exchange Study, found that “Medicaid coverage generated no significant improvements in measured physical health outcomes in the first two years.” In fact, the evidence suggests many of government’s efforts to fight poverty may not just fail, but actually be counterproductive. To the degree welfare programs increase the rate of out-of-wedlock births and family disintegration, or discourage entry into the labor force, for example, they can trap people deeper in poverty for longer. At the same time, government antipoverty programs tend to crowd out private charitable efforts that may be more effective. The perennial debate over raising the minimum wage is another example of good intentions trumping actual results. The idea a person working hard for 40 hours a week should earn enough to live on is one the vast majority of Americans immediately respond to. But the actual result of raising the minimum wage is primarily to eliminate jobs available to unskilled workers, the very people the policy is supposed to help. A comprehensive review of more than 100 studies on the minimum wage by David Neumark and William Wascher for the National Bureau of Economic Research found 85 percent of the studies they reviewed found increasing the minimum wage had a negative effect on employment. This should be no surprise: The U.S. Department of

Labor concluded the first minimum wage, set at 25 cents an hour in 1938, resulted in 30,000-50,000 lost jobs, or 10-13 percent of the 300,000 workers affected by the increase. It is often said the definition of insanity is “doing the same thing over and over again and expecting different results.” To which many of today’s politicians would seem to respond, “But at least it’s doing something.” But “doing something” is foolish if that something doesn’t work. It is time to recognize that asking whether liberal solutions actually work is not hard-hearted or callous. To suggest a government-run health-care program will not provide better health care is not the same as telling the poor to “die quickly.” To argue against throwing still more money at yet another anti-poverty program is not evidence of a “war on the poor.” It is said the road to hell is paved with good intentions. Big Government apparently uses the same road crew. Michael Tanner is with Cato Institute. This article appeared on National Review Online on November 20, 2013.

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