Connections - Spring 2013 by Dakota Supply Group

Owners Win INNOVATIVE ILLUMINATION! Building With Lighting Retrofits SPRING 2013

CONNECTIONS STRENGTH

IN NUMBERS:

R E M O CUST

E C I V SERRANTEE GUA

0 2 • 0 2 • 0 10

ARE YOU READY FOR THE

BIG SWITCH?

Introducing Our Customer Service Guarantee

DSG

Picks Our Favorite

GOLF COURSES

The Benefits Of BUYING LOCAL: HOW TO TELL YOUR CUSTOMERS

ON THE COVER |

STRENGTH IN NUMBERS

CUSTOMER

TAKING TECHNOLOGY TO THE TRADES

GUA

DSG is giving its partners a head start on success. See how three little numbers can make a big difference in your business.

ICE SERRV ANTEE

Check out this free web-based tool that contractors are using to work faster, smarter and more efficiently.

•2•200 0 0 1

DSG PICKS: 21 OF OUR FAVORITE GOLF COURSES

Fore! Here’s a quick-look guide to some of the best public/playable courses in DSG country.

20 20

LOCAL IMPACT

NO-LEAD AHEAD – ARE YOU READY?

INNOVATIVE ILLUMINATION

“Buying local” benefits us all, and here’s how you can prove it to your customers.

Leaded brass is on its way out. Here’s what you need to know to prepare for the January 4, 2014, deadline.

Find out how new technology is making lighting retrofits a bright example of teamwork that’s paying off for everyone involved.

PROFILES |

SHINING BRIGHT See how Riddle’s Jewelry and DSG are working together to improve energy efficiency and ambience in stores across the Midwest.

CONNECTIONS | SPRING 2013

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WELCOME TO BIG SKY COUNTRY

Learn more about one of DSG’s newest additions – MDM Supply.

HELPING UTILITIES ACHIEVE TOP FORM Read about how American-made ALUMA-FORM products are bringing new utility solutions to the Midwest.

GEOTHERMAL IN THE DAKOTAS See how one contractor is boosting sales with geothermal technology in unexpected places.

FIXTURES | Editorial Numbers You Can Count On – Tom Rosendahl........................................................ 4

Meet The DSG Team Todd Eber – La Crosse, WI.................................................................................... 6 Jack Hendrickson – Fargo, ND............................................................................. 11 Clark Marshall – St. Paul, MN............................................................................ 19 Greg Servais – La Crosse, WI............................................................................... 34 Bob Klar – La Crosse, WI ................................................................................... 37 Tim Jensen – Sioux Falls, SD............................................................................... 45 Paul Hanson – La Crosse, WI............................................................................. 50

Grow Your Business There’s A Point To Looking Sharp........................................................................ 26 Help Wanted..................................................................................................... 46 Budgeting For Profit........................................................................................... 52

DSG Outdoors Outdoor Adventures........................................................................................... 38

News Wire Waterworks Makes Waves.................................................................................... 12 Into The West: DSG Opens New Branch In Dickinson, ND...................................... 18 DSG Power Tools 2013....................................................................................... 33 The DSG Automation Trailer: Coming To A Location Near You................................ 40 Make Plans Now To Attend The 2013 HVAC Expo, April 2-3.................................. 41 DSG/W.A. Roosevelt Takes Customers On A Football Frenzy Adventure...................... 41 Sioux Falls Waterworks Branch Readies New Location For Summer 2013.............. 51

The Power Of We At DSG The Power Of We At DSG . . . In Purchasing...........................................................5

EDITORIAL |

Numbers You Can COUNT ON

Tom Rosendahl DSG PRESIDENT

CONNECTIONS MAGAZINE People talk to me now and then about Connections,

and sometimes they even

mention something they like or wish was included. But we’d like more feedback.

In fact, we’d like everything from story ideas to input

on columns like my editorial. The more we hear from our

readers/customers, the better Connections will become.

Please take a few moments to share your thoughts

with us, whether they are

new ideas or constructive criticisms. Either way, it

➜

I wish there were guarantees in fishing. Wouldn’t it be great if you could head out to the lake on Saturday morning knowing that it wasn’t going to rain, you weren’t going to get a sunburn and you were absolutely, positively going to land a 10-pound walleye? That kind of confidence would make for a pretty good weekend, all things considered. But very few things in our lives come with that kind of certainty – especially when it comes to business. Instead, every decision you make seems to come with an element of chance. We just accept it as part of doing business – until now, that is. Here at DSG, we’re rolling out a new program that is going to put some certainty back into every project you undertake. Our new Customer Service Guarantee is a way for us to ensure that you have confidence any time you work with DSG on a job. It is made up of three promises, each based on a number: 100, 2, 200. First of all, we promise to get your order right 100 percent of the time. That means you never have to worry about surprises when you unbox your materials on a job site or at the shop. Secondly, we promise to credit your account for any returned merchandise in two business days or less. That’s important as you balance your cash and the costs of simultaneous projects. Finally, we promise to have our top 200 products in stock. In other words, the products and parts that our customers use most will be there when they need them – guaranteed. Want proof that we’re taking our Customer Service Guarantee seriously? If we fail to live up to any of our three promises, we’ll credit your account for $25, no questions asked. We’re putting the Customer Service Guarantee into action now at DSG, and we’re planning to employ it at our W.A. Roosevelt and MDM locations soon. Want to know more? Just ask your DSG representative. They won’t be able to guarantee anything about your next weekend fishing trip, but they can definitely put some certainty into your work week.

Tell Us What You Want In Your

helps us to improve this magazine.

You can give us

your feedback at

dakotasupplygroup.com/ connections. I look forward to hearing from you!

THE POWER OF WE AT DSG |

... The Power Of We at DSG is all about making connections. At its core, The Power Of We states that each employee owner at DSG promises to create successful partner encounters in everything we do – and we accomplish that by Brian Tibbals making powerful connections with customers, manufacturers and internally with each other. To help explain the importance of our connection-focused approach and to illustrate how The Power Of We is put into action at DSG, let’s take a closer look at DSG’s purchasing department. Purchasing is often a behind-the-scenes department at DSG. It doesn’t have much direct interaction with customers, but it’s a critical part of the team. In fact, this is where DSG customers are initially connected to respected manufacturers. The purchasing department’s most basic responsibility is to make sure that DSG has the right products at the time that customers need them. Sounds easy enough, but it’s actually quite complex. Numerous variables come into play – the time of year, demand patterns, new products, returns – not to mention that it involves tens of thousands of product SKUs from hundreds of different manufacturers. Thankfully, DSG has

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In Purchasing the right combination of technology and people that makes this look easy. DSG’s purchasing department includes 12 employee owners spearheaded by DSG’s Director of Purchasing Brian Tibbals. In this department, success is measured by what Tibbals calls a “high service level,” which is measured by how often DSG supplies its customers with their full order at the time they need it. In addition to the expertise of its people, the purchasing department relies on software that helps accumulate historical information, keeps track of average demands and identifies seasonal trends for each product. The software is especially critical in helping to forecast when to order and how much. Introducing new products into the system is another way that the purchasing department reinforces The Power Of We. “We work closely with the branches, segment managers and our manufacturer partners to continually add new and innovative products,” Tibbals says. “It helps our customers stay on the edge of the technology curve.” According to Tibbals, DSG’s manufacturer relationships are an important part of The Power Of We. “We value their partnerships, and we understand that our success is shared,” he says. “We want our manufacturers to see us the same way that our customers do – as a reliable, trusted partner.”

SPRING 2013 | CONNECTIONS

MEET THE DSG TEAM |

An Interview With Todd Eber,

VICE PRESIDENT/EAST REGION MANAGER

12 years with DSG / W.A. Roosevelt // Served as: President & Owner of W.A. Roosevelt, Vice President of Sales & Marketing

Q – You’ve been with DSG for more than a year now, what has surprised you most about DSG? A – I’ve been really pleased that – for a fairly large organization – there are very few restrictions in the way business is conducted. These down-to-earth roots are a refreshing match with W.A. Roosevelt. Q – Becoming the Vice President/East Region Manager is a big accomplishment. What are some other highlights from your career? A – I’ve had a few too-good-to-be-true moments in my life, but outside of my wife saying “yes,” the next biggest might be when I was given the opportunity to join W.A. Roosevelt in 2001. It’s changed my life in more ways than I could have ever imagined. Q – Throughout your career, is there someone who has given you great advice? A – My father. I can always count on him to give me an honest and candid perspective when I need it, and even sometimes when I don’t.

Q – Technology continues to affect how we work and play. How do you see technology shaping DSG? A – Now that we’re in what I call the “iPod world,” we continue to see time compression in just about everything. Our challenge is finding a balance between getting information to our customers as quickly as possible, but still keeping our focus on the importance of relationships. I believe we must be both “high tech” and “high touch” at the same time. Q – You’ll be busy with your new role. What’s one thing you’re sure to do when you get some time off? A – Spare time, hmm…I guess if I call it spare time, it’s spent by Linda [wife] and I trekking around with all the activities of our “fearsome foursome,” Luke, Annie, Maddie and Michael. However, I also really like hot sand, hot sun and drinks with little umbrellas!

R E M O T S CU

E C I V R SE RANTEE GUA

0 2 • 0 2 • 0 10

N I H T G N E STR

S R E B M U N DSG’s new Customer Service Guarantee gives our partners a head start on success.

Human beings love certainty. We love it when the future is easy to predict. The idea of the “sure thing” pervades our history, our literature and our culture. But the truth is that very little in this world is guaranteed, especially when it comes to business. To paraphrase the ancient Greeks, it seems that uncertainty is the only thing that is certain. Until now, that is. DSG recently announced a revolutionary new corporate initiative called the Customer Service Guarantee. In a world of small print and loopholes, this innovative program is DSG’s way of “walking the walk” with our customers. It is a guarantee made up of three core promises, and it ensures that you can count on DSG to help you succeed.

CONNECTIONS | SPRING 2013

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100% Order Accuracy The first part of the Customer Service Guarantee is a commitment to perfection. We promise to get your order right the first time – every time. That means you can order with complete confidence from DSG. There’s no need to worry about whether you’ll get the parts you expected for your next job, or whether you’ll be two items short of the quantity you asked for. Your customers don’t settle for less than 100 percent, and neither should you.

In short, there will be no surprises when you open your boxes from DSG, or we’ll give you $25 to be used for future purchases – guaranteed.

2 Business Day Stock Credit We understand the concept of “better safe than sorry.” That’s why you make sure to order plenty of the parts and products that you need. However, it also means that it’s not uncommon for you to finish a job with extra parts that need to be returned. Anyone who has ever had a

bank account understands the basics of cash flow. You don’t want your resources tied up in leftover parts that have been returned to DSG. You need access to that money to buy parts for your next job, to pay subcontractors or to help cover payroll. It’s your money, after all. That’s why DSG will now credit your account for returned stock merchandise in two business days or less. You’ll have your money back quickly so you can put it back to work, or we’ll give you $25 to be used for future purchases – guaranteed. Continued on page 10 

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SPRING 2013 | CONNECTIONS

Continued from page 9

Top 200 Products In Stock Nobody likes to wait, especially when it comes to a product that you use all the time. You just can’t afford to hold up a job for a back-ordered part, and you shouldn’t have to. To make sure that your projects get done on time and on budget, DSG has made a commitment to keeping our top 200 best-selling products in stock. This list includes everything from connections, receptacles and lamps to fittings, valves and toilet seats. Of course, this doesn’t mean that these are the only parts that DSG will stock. Just the opposite! DSG has built its reputation on having a massive selection of available products, and the Customer Service Guarantee only reinforces this commitment. It’s our promise to you: Order one of our top 200 best-selling products and it will be in stock, or we will issue you a $25 credit to be used for future purchases.

Three Numbers That Will Make Your Business Better Benjamin Franklin may have invented bifocals, stoves and lightning rods, but he was all wet when he made the somewhat depressing claim that nothing is certain but death and taxes. Happily, DSG is proving that there is absolute certainty in the Customer Service Guarantee – or you get $25 to make up for our shortcoming. Just remember 100, 2, 200, and you’ll have a good handle on this unique new initiative at DSG. These numbers are facts, and their meanings are worth restating: 100 percent order accuracy; 2 business day stock credit; top 200 products in stock. The Customer Service Guarantee is currently in effect at DSG, and plans are in place for W.A. Roosevelt, MDM Supply and Fargo Water Equipment to adopt the program as well. If you’d like to learn more about the specifics of the Customer Service Guarantee, just ask your DSG representative.

Find out more online at www.dakotasupplygroup.com/csg!

MEET THE DSG TEAM |

An Interview With Jack Hendrickson,

DSG’S NEW WATERWORKS SEGMENT MANAGER 37+ years with DSG/Fargo Water Equipment // Served as: President – Fargo Water Equipment

Q – As a new member of the DSG team, what has surprised you most about DSG? A – I knew that DSG shared a similar philosophy with Fargo Water Equipment, but in talking with everyone, I was surprised at how similar it really was. DSG places just as much emphasis on building strong relationships with its customers and business partners as Fargo Water Equipment. Q – What was going through your mind when DSG named you the Waterworks Segment Manager? A – Well, I thought “I’m probably gonna be playing a lot less golf.” I’m joking, of course. On a serious note, at this time in my life, titles are no longer the exciting part. The excitement is in the fact that I get to be in a position to help DSG grow. I feel invigorated with the new challenges ahead of me.

Q – What challenges does becoming the Waterworks Segment Manager put before you? A – The first thing is embracing all of the aspects of being segment manager, from a big-picture standpoint to the smallest of details. Q – How has the Waterworks industry changed over your career? A – The size of jobs has changed drastically in that the scope keeps getting bigger and bigger. Plus, with so many options out there for our customers, it just gets more and more important to build strong partnerships with everyone we work with. Q – You’ll be busy with your new role – what’s one thing you’re sure to do when you get some time off? A – I’m an avid golfer. Once golf season comes, I try to play whenever I can get the time.

WATERWORKS

Makes Waves DSG Adds Fargo Water Equipment And New Waterworks Branch In Bismarck, ND. The last 12 months have been a pretty exciting time for DSG’s Waterworks segment. With new branches, new leadership and new products, things are flooding with change – positive change, that is. It all started with DSG’s new Waterworks branch in Bismarck. To better serve rural water systems and municipalities in western North Dakota, DSG opened this branch in the spring of 2012, stocked with a full-line inventory housed in a 15,000-square-foot warehouse and large yard area. “The Bismarck location allows us to get things completed and to where they need to be

faster,” says Jack Hendrickson, who recently became DSG’s Waterworks segment manager. “In the waterworks business, you can ship a job complete, but the projects are always evolving. You need to be ready for changes all the time, especially out west. The engineers are putting things together so fast, and the Bismarck branch helps us to keep pace.” While the new branch in Bismarck will provide significant benefits for DSG Waterworks customers, the addition of Fargo Water Equipment to the DSG family in late 2012 was equally big news. Founded in 1962,

Fargo Water Equipment (now a division of DSG) serves most of North Dakota and parts of Minnesota and Montana. This acquisition also brought DSG’s new Waterworks Segment Manager, Jack Hendrickson, on board. When asked what customers can expect from this new partnership, Hendrickson focuses on the similarities of what Fargo Water Equipment and DSG share. “We both value building strong, loyal relationships with our customers in order to be much more than a supplier to them,” he says. “Now we’re pooling those relationships together in order to serve the greater good.”

With new partnerships comes new products, and DSG customers can look forward to larger inventories and more product options. Customers can also expect to see some new faces, as Fargo Water Equipment will add 16 new waterworks experts to the DSG team. DSG’s Waterworks business has evolved quite a bit lately, but not everything is changing. “Our Waterworks segment is filled with great people doing great things, and we’re not about to rock the boat when it’s working well for our customers,” says Hendrickson. “Instead, we’re going to focus on bringing

new opportunities and options to everyone involved.” If you have any questions about the collaboration of DSG and Fargo Water Equipment, please feel free to speak with your local representative. You can also send us an email via the DSG web site at www.dakotasupplygroup.com/ contact-us.

GROW YOUR BUSINESS |

Taking Technology To The Trades “I feel like I spend 75 percent of my day trying to decipher handwriting to figure out what parts my guys used, how long they were at a job and then meshing those things together to kick out an invoice.” “After work I’m always headed to my son’s baseball game, daughter’s basketball game or dinner with the in-laws. By the time I sit down to track what I did at work, it’s 11:00 PM.” “I love my technicians, don’t get me wrong. The problem is they’re human, so they make mistakes, and I’m not going to send an invoice to my customer until I know I’m charging them for what I provided them. Sometimes that means they don’t get a bill for a few weeks.” Do any of the above quotes sound like something you would say? If so, DSG might have a way to help. A little more than a year ago, DSG decided that in order to find new ways to

CONNECTIONS | SPRING 2013

help its customers succeed, it would have to do some digging into what issues were keeping customers up at night. After hearing from hundreds of customers via surveys, telephone calls and many face-to-face conversations, the DSG Contractor Portal was born in 2012. Since then, DSG has continued to make improvements based on user feedback. Today, the DSG Contractor Portal allows users to assign work orders to individual technicians, enter and organize employee time, track and replenish inventory, generate and send customer invoices and more – all for free. The key to the popularity of the DSG Contractor Portal is that it’s not a “one-size-fits-all” solution, but instead a suite of powerful online tools that has been helpful to different businesses in different ways.

“I know of an HVAC/R customer who’s using the DSG Contractor Portal to track and replenish inventory, and a plumbing customer who’s using it to send invoices to customers,” says DSG Account Manager Jim Poole. “It’s really helped them both to spend less time sitting at their desks and more time working with their customers.” We’re all familiar with the old adage “time is money,” and there’s no place where that’s more applicable than in service-based industries. That’s why the DSG Contractor Portal was created: to save DSG’s customers money without cutting corners. Talk to your DSG representative about signing up for this powerful free tool today!

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Get The Most Out Of Your Business With The DSG

Contractor Portal

As a contractor, it’s not uncommon for you to feel like the busiest person in the world. That’s why DSG has created a new online tool to help you become more productive with the time you’ve got. We call it the DSG Contractor Portal, and it’s helping companies like yours to work faster, smarter and more efficiently. Best of all, it’s free.

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Create Work Orders The Easy Way Reduce mistakes and markdowns by using simple online work orders to improve inventory control, customer invoicing and job quotes.

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Improve Productivity By Tracking Employee Hours The handy time card system makes it simple for employees to track their time and minimizes the potential for lost hours.

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Keep Your Crew Organized The DSG Contractor Portal includes an easy-to-use calendar that keeps everyone on schedule by tracking job site activity, vacations and more.

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Locate Contact Information Quickly Take advantage of the built-in contact management system, and you’ll never have to worry about forgetting a name or losing an address.

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Show Off Your Work The gallery in the DSG Contractor Portal lets you keep important photos in one conveniently accessible location. It’s a great way to let before-and-after photos do the selling for you.

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Make The Most Out Of Your Resources The DSG Contractor Portal is full of helpful information provided by DSG, including tools, catalogs and more. It can even connect you to DSG’s e-commerce web site.

To learn more or to get started using the DSG Contractor Portal, please contact your DSG representative, Arne Breikjern at (800) 652-9784 or Karen Jorgensen at (800) 633-2211.

ELECTRICAL

DSG Picks: 21 Of Our

Where do we like to golf? Here are some of the best public /

KALISPELL – White Fish Lake Golf Club 36 Holes | Par: North Course 72 | South Course 71 | Jaw-dropping mountain vistas frame two incredible courses.

BISMARCK – Hawktree

MISSOULA – Canyon River Golf Club 18 Holes | Par 72 | Stunning views, tall pines and excellent facilities make for a winning golf experience.

WILLISTON – The Links Of North Dakota

18 Holes | Par 72 With an authentic links layout, this windy course tests players with 82 sand bunkers.

18 Holes | Par 72 This challenging links course is consistently rated as one of the nation’s finest.

MEDORA (DICKINSON) – Bully Pulpit 18 Holes | Par 72 | Located in the scenic Badlands, this is one of the world’s most uniquely recognizable golf courses.

RAPID CITY – Golf Club At Red Rock

18 Holes | Par 72 | Consistently rated South Dakota’s #1 public golf course, this beauty really shows off the Black Hills.

HELENA – Bill Roberts Golf Course

18 Holes | Par 71 | Breathtaking scenery makes this course a “must see.”

Ken Pederson’s

BOZEMAN – Bridger Creek

18 Holes | Par 71 | This course is the home of the Rocky Mountain Golf Academy, a premier short game practice facility.

18 Holes | Par 72 | A prairie links course complete with generous fairways and stunning wetlands.

GUIDE TO GOLFING FAVORI T E

GOLF COURSE –

FAVORI T E

SIOUX FALLS – Prairie Green

Alexandria Golf Club

PLACE TO SHOP –

Dunham’s Sports

Favorite Golf Courses playable courses in DSG country.

BEMIDJI – Bemidji Town & Country Club 18 Holes | Par 72 | Norway Pines surround this wonderful course, built on the shores of Lake Bemidji.

GRAND FORKS – Kings Walk 18 Holes | Par 72 | This impressive links course was designed by Arnold Palmer.

ALEXANDRIA – Alexandria Golf Club 18 Holes | Par 72 | Opened in 1915 – Nestled between Lake Darling and Lake L’Homme Dieu.

MAPLE GROVE – Rush Creek

18 Holes | Par 72 | This incredible course has hosted three LPGA events as well as the Amateur Public Links Championship.

FARGO – Edgewood

18 Holes | Par 71 | Beautiful trees line this 87-year-old course as it runs along the Red River.

RICE LAKE – Turtle Back Golf Course 18 Holes | Par 71 | This four-star course is surrounded by lush trees and gently rolling hills – a classic.

WISCONSIN RAPIDS – Lake Arrowhead Golf Resort 36 Holes | Par: Pines Course 72 | Lakes Course 72 | Two of the Midwest’s most spectacular courses.

WISCONSIN DELLS – Trappers Turn

ARKDALE – Northern Bay Resort

18 Holes | Par 72 | The Castle Course is the Midwest’s only replica course, with holes replicating Bay Hill, TPC Sawgrass and even Augusta.

27 Holes | With three beautiful 9-hole courses created by Andy North and his team, there is something for everyone.

MADISON – University Ridge

18 Holes | Par 72 | Often rated as one of the nation’s best public courses, it is the home of the University of Wisconsin Badger golf team.

ALEX ANDRIA, MN FAVORI T E

PLACE TO GRAB A BURGER OR A BEER –

FAVORI T E

WORDS OF ADVICE –

IL IN

Clubhouse Bistro

“Stay out of the trees!”

NEWS WIRE |

Into The West: DSG Opens New Branch In Dickinson, ND Western North Dakota is booming, and builders, contractors and even oil companies are struggling to keep up. To help with this growing need, DSG has opened a new branch in Dickinson, a growing city in southwestern North Dakota near Theodore Roosevelt National Park. This new location will make construction a lot more practical in the western part of the state. “It is incredible to see how fast Dickinson is growing, both commercially and residentially,” says Stacey Olson, operations manager at DSG’s new Dickinson branch. “New schools, new hospital, new housing – we are looking forward to helping the community grow into something special.” DSG’s Dickinson branch focuses primarily on quality electrical, utility, communications and automation products with a brand-new 10,000-square-foot facility. Its staff of seven

includes two veteran DSG employee owners and five new ones who are local residents. “It was important for us to hire people from within the local community,” says Olson. “Not only do they know the area and the challenges facing our customers here, but it’s one more way for us to invest in Dickinson itself.” By adding Dickinson to branches in Williston, Minot and Bismarck, North Dakota, as well as MDM Supply locations throughout Montana, DSG has made a commitment to helping this area overcome the challenges that occur with accelerated growth. It is an undertaking that promises to help good people in their efforts to make their communities great.

Stacey Olson

NORTH DAKOTA

Bismarck

Operations Manager: Stacey Olson Square Footage: 10,000

Services Offered: Electrical, Utility, Communications, Automation City Population: 18,000

Founded: 1881

Dickinson

Nearby Attractions: Theodore Roosevelt National Park, Lake Sakakawea, Medora

Contact Information: 380 29th Street East, Dickinson, ND 58601, (701) 483-6525

Medora

QUICK FACTS

Theodore Roosevelt National Park Memorial Park

Dickinson

Lake Sakakawea

North

MEET THE DSG TEAM |

Clark Marshall | In January 2013, DSG’s St. Paul Branch welcomed a new face. His name is Clark Marshall, and he is the new branch manager. Before joining DSG, Marshall spent more than 30 years in management roles in the electronic distribution industry. This included his work as regional manager for a Fortune 500 company, in which he was responsible for 17 sales offices, approximately 90 people and $50 million in revenue. While his management experience is impressive, his understanding of how to help customers succeed makes him an invaluable asset to the DSG team. “I have to be the champion for superior customer service at all levels of the business,” says Marshall. “Whether it’s a friendly greeting to customers on the phone or a suggestion about an innovative new product – from carefully entering orders to the process of picking, packing and delivering on time. Every step is important.” When Marshall is not working, he takes to the road – but not in a car. He is an avid cyclist. “I ride

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St. Paul Branch Manager bicycle with a group of guys from a local bike shop once a week,” says Marshall. “We call it the Old Man Ride, but it is not for the faint of heart. We have had sprints of 30 plus miles per hour, which is pretty fast on a bicycle.” Marshall’s love of cycling blossomed from a passion for running. He has been a long-distance runner for more than 30 years, competing in his share of marathons and hundreds of 5K and 10K races. He also participates in triathlons, combining his love for running and cycling with swimming. He has participated in more than 30 triathlons and even placed as high as second and third in a few of them. As a runner and a triathlete, you must have a tremendous amount of drive, competitiveness and motivation to succeed – no matter how you measure success. Thankfully, for DSG customers, Marshall puts that same focus on his work for DSG customers every day.

SPRING 2013 | CONNECTIONS

Local

IMPACT

How to show your customers that “buying local” benefits us all. Freedom. In the United States, it’s a concept that we often take for granted, especially when it comes to our purchasing decisions. It’s easy to forget just how powerful our choices can be in shaping our economy – especially our local economy. For those in the construction industry, purchasing decisions are often influenced by convenience, availability and, of course, price. In a world based on budgets and deadlines, nobody has the time or resources to deliberate over each and every product choice. Every contractor or local business person wishes that their customers could recognize the local

impact of their transactions, but that is easier said than done. In truth, the concept of “keeping it local” can be both complicated and subjective. That’s why it pays to simplify the discussion whenever possible. In fact, it’s helpful to boil the topic down to a single question: “How can I spend my dollars so that they do the most good in my local economy, while still making sense for my project?” If local businesses can help their customers answer this question, then everyone benefits – from the involved parties to the community itself.

How does local spending influence our economy? In 2008, an organization called Local First commissioned a widely cited study regarding the destination of dollars spent at a local business versus dollars spent at a nonlocal business. This study found that for every $100 we spend at a local business, $68 stay in the community (via supplies, taxes, donations, wages, etc.). That number drops all the way down to $43

CONNECTIONS | SPRING 2013

when you spend $100 at a nonlocal business. That’s 25 percent more of every dollar spent that stays home in your community when you buy local! So why would anybody spend their dollars with a national business? The answer almost always comes down to price. After all, giant national companies can offer discounted pricing thanks to the volume of business that they do.

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So we’ve successfully helped our customers to answer the first part of our question (“How can I spend my dollars so that they do the most good in my local economy”), but the comparative price of individual items is making the second part (“while still making sense for my project?”) less clear. As with many things that tend to escape our vision, the solution is all a matter of focus.

Encouraging Big-Picture Thinking It may be challenging, but it’s very helpful to show your customers how much they benefit from that extra 25 percent of every dollar that stays at home. These dollars don’t just stay local, they tend to multiply themselves by going back into the local economy. For example, a local business is more likely to hire a local accounting firm. The result is an overall increase in: •

Local Taxes: Instead of financing police departments, schools and road improvements someplace else, these taxes work toward infrastructure that your customers take advantage of every day.

•

Local Wages: The benefits of this are obvious – when money stays local in the form of personal income, it is much more likely to be spent locally. If your customer is building a restaurant, the implications are pretty clear: The more people with money to buy hamburgers, the more hamburgers you will sell.

•

Local Donations: Businesses like to support people they know. It’s no surprise, then, that local businesses tend to donate more money to local causes.

In other words, here are two ways of looking at price as it relates to a project: •

Small Picture: I might save 5 or 10 pecent by hiring a nonlocal contractor.

•

Big Picture: I can share in the benefits of 25 percent more dollars being invested in my community by using a local contractor.

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DSG’s Philosophy:

THINK LOCALLY, ACT LOCALLY With 26 hometown locations, DSG’s philosophy is to put its resources to good use by focusing them on the success of our customers. A big part of that philosophy is a commitment to local decision making. Unlike massive national distributors, DSG’s culture encourages employees to think and act like local entrepreneurs. That means making local decisions about hiring, product selection, services offered, facilities, training, events and charitable donations. This commitment to local communities has a profound impact on the way that DSG does business. Each customer is treated as a unique collaborator, and as such, an important local partner. These partnerships are formed between local DSG representatives and local DSG customers who are often neighbors – and always friends. As a result, DSG makes significant contributions to local organizations and charities on top of the positive impact made by employees who don’t just take part in the local economy, but also volunteer their time to improve the communities we serve. When you choose a supplier for your parts and materials, consider the actions of your distributor. How do they contribute to your local economy? Can you see the difference they make in your community? Do they think and act locally? If you choose DSG, the answer is yes.

Continued from page 21

When you look at it that way, it makes a lot of sense to hire local. So how do you tell that to your customer without sounding defensive?

BUYING LOCAL Impact On Local Economy

Arguing For Local Business Without Starting An Argument

LOCAL ECONOMY

LEAKAGE

LOCAL IMPACT

LEAKAGE

$68

$32

$46.24

$21.76

$31.44

$14.80

POSITIVE IMPACT ON LOCAL ECONOMY

BUYING FROM A Nonlocal Business $100 LOCAL IMPACT

LEAKAGE

LOCAL IMPACT

LEAKAGE

$43

$57

$18.49

$24.51

$7.95

$10.54

LEAKAGE OUT OF LOCAL ECONOMY

Source: http://bealocalist.org/sites/default/files/file/ GR%20Local%20Works%20Summary.pdf

LOCAL IMPACT

LEAKAGE OUT OF LOCAL ECONOMY

Any time you feel strongly about a subject, you run the risk of getting into a heated debate when someone disagrees. We are human, after all. Instead of viewing the local vs. nonlocal debate as a personal issue, it’s helpful to look at the conversation as a way of helping your customer to succeed. In other words, rather than dwelling on the downside of buying from a national company, focus on the benefits of buying local. You can touch on subjects like local service and familiar people. Then share your insights into the positive impact that 25 percent more dollars have on everyone in the community, including your customer: more taxes to improve infrastructure; more potential customers to buy their products and services; more donations to their favorite cause. It’s easier to see the win-win potential of buying local when it is presented as an advantage rather than an argument. Try it out the next time you get caught bidding against a national, nonlocal competitor. You may be surprised to learn that you and your customer agree: Buying local helps us all.

$100

Good Times Build Great Teams Remember your first home-run? Or your team winning the big game? Those are great memories. But more than likely, apart from wins and losses, your fondest recollections are of people, places and fun you had as a group. That’s what made you a team.

The same can be said with your business. Spending time on the water at Ballard’s Resort or Ballard’s Black Island, you create those types of lasting connections. The big boys call it “team-building.” We call it fun!

Like the time John’s group fed an eagle, then thought better of catching it with a landing net! Or when Ray’s group told everyone how “hard” they fished during the rain-storm, when they really sat in the lodge, watched football and drank tap beers! Either way you are winning. You are creating a new list of “firsts,” and you are celebrating your future as a team.

This summer make the connection, join us on Lake of the Woods, and set the hook!

Ballard’s Resort

www.BallardsResort.com | (218) 634-1849

Ballard’s Black Island

www.BlackIsland.com | (218) 634-1996

Shining

Bright

Riddle’s Jewelry and DSG team up to improve energy efficiency and store ambience in Riddle’s Jewelry stores across the Midwest. When it comes to diamonds, it’s all about the clarity and sparkle. Of course, that means when it comes to selling diamonds, proper lighting is crucial. This is not a revelation to jewelers, especially not the experienced team at Riddle’s Jewelry. They have been selling breathtaking jewelry since 1959, and they recently commenced a project with DSG and GE to show off their diamonds in a whole new light – literally. Riddle’s Jewelry had been

CONNECTIONS | SPRING 2013

considering a transition to LED lamps for several years, and after some success with the new technology in a newly constructed store, the plan came to fruition in February of 2012. Riddle’s Jewelry looked to longtime business partner DSG to kick-start the project and facilitate new GE LED lamp installations in all 50 of its stores. Riddle’s Jewelry had two main reasons for upgrading the lighting in its stores – improving

energy efficiency and improving the quality of light. “We want to be as efficient as possible, but we also need our lighting to resemble natural light as closely as possible,” says Dan Casanova, Vice President of Riddle’s Jewelry. “The first thing our customers are drawn to is how our products look in our showcases, so we need lighting that ensures that when the jewelry comes out of the case, it sparkles just like it would in natural daylight.”

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Top: Freestanding Riddle’s Jewelry store in Grand Forks, ND. Middle (left to right): Jeff Stone and Dan Casanova. Bottom: Riddle’s Jewelry replaced 75-watt halogen lights with 20-watt GE LED lamps.

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Government and power utility rebate opportunities played a big factor in the decision to move forward with the project. “The rebates we received really helped out,” says Casanova. “When you consider them along with the money we will save on our energy bills, this project will practically pay for itself in a year or two.” In order to confirm that the upgrade would produce the results they wanted, Riddle’s Jewelry took things slow – at first. “It’s easy to get discouraged by the initial cost of the lamps,” says Jeff Stone, DSG’s account manager for Riddle’s Jewelry. “But it helps to look at the whole picture when it comes to lighting upgrades.” After seeing a 20 percent drop in energy costs at the stores initially completed, Riddle’s Jewelry is starting to ramp things up. So far, approximately 20 of the stores have been completed and more than 2,000 75-watt halogen lights have been swapped out with 20-watt GE LED lamps. The project is expected to be fully complete by the fall of 2014. While rebates made this project a little easier from a financial standpoint, applying for the rebates was a significant

amount of work. Requirements and paperwork vary from state to state and utility to utility. “Just organizing the volume of information that had to be compiled was a big hill to climb,” says Casanova, “but when it came to the rebates, DSG and GE practically did all the work. Their contribution in taking care of the rebate side of things was a huge part of why this project has been such a success for us.” According to Casanova, the in-store results have been equally successful. “Our employees are really liking the new lamps,” he says. “They produce more of a true light with a more natural color. The stores look modern, and our product looks great.” Overall, this project has been a big success for everyone involved. It just goes to show that when good people work together, positive results are easy to see.

SPRING 2013 | CONNECTIONS

GROW YOUR BUSINESS |

There’s A Point To

LOOKING SHARP There’s a school of thought that goes something like this: “My work speaks for itself.” People who believe this will tell you that if you do a great job, then your business doesn’t need to promote itself because customer word of mouth will do the job for you. They might even tell you that it’s your work that counts, not how you look or sound. Let’s apply this concept to restaurants. If we have two eateries that both have great food and great service, what happens if one does a great job with its décor, signage and advertising, while the other ignores these things? The first establishment becomes a fourstar restaurant, and the second becomes your favorite local dive. Both have their place in the world. You take your in-laws out to eat at the nice restaurant, and you meet your friends at the

CONNECTIONS | SPRING 2013

greasy spoon after a night on the town. Which kind of business do you want to be? The clean, well-kept restaurant or the cafe that’s “charming” but doesn’t really care what it looks like? Both places bring in a lot of business, so it doesn’t really matter, right? Wrong. There’s one major difference between these two restaurants: price. The fourstar restaurant gets $40 for the shrimp scampi, while your neighborhood dive gets $8 for the shrimp basket. They both taste great, but the meal at the nice restaurant is worth more because of the “touchpoints” that impress the patrons, from the servers’ uniforms to the linen tablecloths to the unique copper sign on the door. Amazing fact: Both restaurants did a similar amount of work, but one was able to charge five times more!

If you want your business to earn more and grow more, you need to pay more attention to your own touchpoints.

Touchpoints such as estimates, invoices, contracts and business cards all make an impression. What does your correspondence say about your business?” For contractors, that means taking a close look at your service vehicles, uniforms, correspondence and phone policies. How do your trucks look? For most contractors, vehicles are the face that the company shows the world. They drive

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all around town. They sit in front of houses and buildings where potential customers are passing by. They show off your phone number and web address and act as billboards for your company. Are they clean? Are they attractive? Vinyl wraps are great equalizers when it comes to contractors. They’re inexpensive, durable and can make you look like the most successful contractor in town. Does your team wear uniforms? A simple, clean polo shirt with your logo makes a great uniform when worn with jeans. Team members suddenly look more professional, which inspires confidence in your customers. Best of all, everyone can agree that work from a professional is worth more, right? Touchpoints such as estimates, invoices, contracts and business cards all make an impression.

What does your correspondence say about your business? Is it neat and easy to read? Does it look generic, or does it look unique? Your document shouldn’t undermine the great work you do by looking cheap. Similarly, you should make sure that anyone answering the phone at your company is professional, polite and consistent. A phone call is often the first – and last – impression you get to make with a customer.

Don’t waste it. Improving your touchpoints is an easy and inexpensive way to improve your overall business. Make each of them count, and your services will actually be worth more to your customers. In other words, your work will still speak for itself. It will just be more convincing when it does.

WELCOME TO BIG SKY A closer look at MDM Supply, a division of DSG in Montana. In August of 2012, MDM Supply became part of the DSG family, a fact that has been widely reported. Outside of its home state of Montana, though, folks may not know very much about MDM’s rich history in the distribution business. This article provides some background on one of the West’s most innovative companies. MDM Supply was founded in July of 1990 by Lou Dumas and Craig Skinn, who acquired two branches of Iron Oak Supply Co. (formerly known as Amfac Supply) in Helena and Kalispell,

CONNECTIONS | SPRING 2013

Montana. It was a big step in their shared dream of owning a business (Dumas and Skinn had worked together for Iron Oak Supply). Their motivation to venture out on their own stemmed from a belief that, by owning their own business, they could make more local decisions and consequently have a greater impact on the local industry. MDM Supply was named by combining the names of the two men’s children at the time: Megan, Danielle and Matthew (Skinn would later welcome another daughter, Mallory). It was a name that helped

them feel like the company was their own. In its beginning, MDM Supply served residential and commercial plumbing contractors, excavation contractors and well drillers, as well as those in the timber industry, and it employed 15 team members. In the following two decades, MDM Supply would become a thriving distributor of plumbing, heating and industrial PVF (pipe, valves and fittings) supplies, opening two more locations in Bozeman and Missoula, MT, and employing

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Their motivation to venture out on their own stemmed from a belief that, by owning their own business, they could make more local decisions and consequently have a greater impact on the local industry.

COUNTRY more than 70 employees. Their four branches served a market spanning approximately 85,000 square miles with a population of more than 650,000 people. In addition to business and geographical growth, MDM Supply’s reputation as the goto company for system design, products and technical support blossomed as well. While it has now become a division of DSG, the company has retained its name and staff, and virtually everything is “business as usual” for both

customers and manufacturers. “We see this as a seamless transition,” says Craig Skinn, now regional vice president of MDM Supply. “To our customers, there have been few differences. They may notice improvements in a few areas, but we’re mostly a stronger version of the same company they’ve trusted for so long.” Beyond the two companies’ compatibilities in product selection, both MDM Supply and DSG share many traits,

including a company-wide commitment to treating both customers and manufacturers as partners. “When we considered what was best for our customers, working with DSG was the next logical step,” says Skinn. “Our goal has always been to improve – and this partnership has certainly accomplished that.”

Special thanks to John E. Martin and The Wholesaler, January 2012. Lou Dumas Craig Skinn

No-Lead Ahead – Are You Ready? Effective January 4, 2014, leaded brass products for potable water will become obsolete. “No” and “lead” might be the two most popular words spoken right now in the waterworks and plumbing industries. Plumbers, contractors, waterworks professionals, municipalities, rural water associations, distributors, manufacturers and many others are gearing up for the change to no-lead brass going into effect at the beginning of next year. Despite this, 20 percent of professionals in the field are unaware or only have basic knowledge of what’s in store for the future. Some of the concern over leaded brass may stem from the sensationalization of lead poisoning. While it is an

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accepted fact that ingesting heavy metals can be unhealthy, most cases of lead poisoning don’t come from a water source. According to the Centers for Disease Control and Prevention, the number one cause of lead poisoning comes from lead-based paint or dust. Nonetheless, the concern about lead poisoning is growing with the public, and the government has taken note. In January 2011, President Obama signed into law the Reduction of Lead in Drinking Water Act, which will take full effect on January 4, 2014. This act reduces the allowable lead content of wetted surfaces in

drinking water pipes, pipe fittings and plumbing fixtures. The current Safe Drinking Water Act (SDWA) defines no-lead brass as containing not more than 8 percent lead by weight (common plumbingrelated products contain between 2 and 7 percent of lead). Per the new law, that percentage will be reduced to a weighted average lead content of equal to or less than .25 percent. So, what exactly does this new act mean for the trade industries? Effective January 4, 2014, manufacturers won’t be able to sell standard leaded brass products for potable water

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use. Consequently, contractors, municipalities and others won’t be able to install leaded brass products, even if they have them in their inventory. Current projects that are using leaded brass will need to be completed by midnight on January 3, 2014, or the leaded brass will need to be replaced with no-lead brass. Jobs performed after January 4, 2014, that involve replacing parts or equipment that contain any leaded brass – even if the leaded brass piece is not under repair – will have to be rebuilt with lead-free parts. Take water meters, for example. It’s common for a city to pull a water meter out of a home for testing purposes. According to the No-Lead Act, the city must put a no-lead meter back in (metering companies are trying to get further clarification on this). The same goes for water heaters. Whatever gets taken out, whether it’s being worked on or not, needs to go back in as lead-free. This act will involve the replacement of thousands of products, including valves, fittings and fixtures that come in contact with potable water. This also includes curb stops, service fittings and couplings, meter valves and couplings, check valves and more. There

is no doubt that contractors, municipalities, rural water associations and many others will be greatly impacted by this change. Four states have already adopted this policy and are officially lead-free. California and Vermont were the first to go in January 2010, then Maryland in 2011 and Louisiana in 2012. These measures have resulted in varying degrees of success. There are a few products that are exempt from this No-Lead Act, including those that are not used for potable water. Underground service saddles are also exempt (except in Maryland and

Vermont). However, there exists some gray area of what products qualify as being used for potable water. The four states that have already gone lead-free wrote their legislation around the intended use, while

the remaining 46 states must follow federal legislation, which centers around the anticipated use of such products. Take, for instance, a water hose. It’s not intended for drinking water, but it can be anticipated that a child might take a drink from it on a hot summer day. According to federal legislation, a water hose needs to be lead-free. “DSG will assume that all of our brass products are for potable water,” says Ryan Tracy, DSG’s plumbing segment manager. “There seems to be a lot of uncertainty on what constitutes anticipated use, and we feel that we can eliminate some of the uncertainty and make it

easier for our customers by going entirely lead-free.” The final decision on interpretation ultimately rests with the local authorities, which may leave room for inconsistencies from state to state, county to county and

Continued on page 32 

Continued from page 31

even city to city. So, what will replace lead? Many of the nation’s leading manufacturers, such as A.Y. McDonald, are utilizing bismuth. “This metallic element acts very much like lead in many respects,” says Rich Pawlicki, territory manager at A.Y. McDonald, “But unlike lead, bismuth is not known to be toxic in humans.” In fact, bismuth is found in products such as Pepto-Bismol, some medicines and cosmetics. “And even though it’s not found in abundance in the United States, bismuth is also readily available worldwide,” adds Pawlicki. “There isn’t expected to be a shortage anytime soon.” Price increases are to be expected. No-lead brass is currently 25 to 40 percent more expensive than leaded brass. However, not everything will change when it comes to no-lead brass versus leaded brass. Installation instructions will remain fairly consistent, for example. Also, no-lead and leaded brass products will look and weigh practically the same. There won’t be a recognizable difference other than a manufacturer’s mark. For instance, A.Y. McDonald casts the letters “NL” on all of its no-lead products. Unfortunately,

there is no standard yet determined for manufacturers on designating their no-lead products, so this will vary from one manufacturer to the next. Many businesses affected aren’t waiting around for the January 4 deadline. Manufacturers such as A.Y. McDonald, Ford Meter Box and Mueller are all ratcheting up their production of no-lead brass products. DSG will be officially lead-free by June 1, 2013. As of that time, DSG will no longer accept returns on leaded brass products, and quotes will be conducted with no-lead materials. “We’ve already begun replacing our inventory,” says Tracy. “One of the most important things we can do is get ahead of this change and help our customers get ahead of it as well.” DSG’s approach to helping its customers will focus on education and communication. “Everyone is in the same boat with no-lead,” says Tracy. “It’s important for us to work together with our customers and our manufacturer-partners to understand the law, and to communicate early and often, so that no one gets bit by this.” For more information on the No-Lead Act and how it will impact you, visit www.noleadbrass.com.

NEWS WIRE |

DSG Power Tools 2013 2012 was a year of growth for Dakota Supply Group. With an increase in the number of employee owners, customers, locations and transactions, it shouldn’t come as a surprise that DSG’s Power Tools workshops also saw significant growth in participation. This year, more than 150 DSG customers and employee owners shrugged off subzero temperatures in La Crosse, WI, Sioux Falls, SD, Fargo, ND, and Eagan, MN, to make an investment in the future of their business! This year’s presenter, Michael Stone, provided valuable insight into the many lessons he has come across in his 50+ years in the contracting industry. Participants gave high marks to the knowledge Stone shared on topics ranging from best practices to blunders, pickup trucks to payment schedules, and much more.

“When I’m working 60 hours a week, it’s easy to forget about focusing on improving my business,” says one DSG customer. “The things I was reminded of in six hours will be helping me make money for the next six years!” Attendees at this year’s Power Tools workshops were also introduced to two web-based applications that DSG offers its customers to help them succeed. The DSG Contractor Portal and DSG Budget App drew rave reviews from attendees, and are available by contacting your DSG representative. To learn more about how you can attend a Power Tools workshop next winter, go to www.dakotasupplygroup.com/university-of-dsg.

DSG Power Tools, Fargo, ND. DSG Power Tools, La Crosse, WI.

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SPRING 2013 | CONNECTIONS

MEET THE DSG TEAM |

An Interview With Greg Servais, DSG’S NEW HVAC/R SEGMENT MANAGER 22+ years with DSG/W.A. Roosevelt // Served as: Product Manager – W.A. Roosevelt HVAC/R & Plumbing Segments

Q – What was going through your mind when DSG named you the HVAC/R Segment Manager? A – That’s an interesting question. It was something that I really wanted, and at the same time, I was thinking that there was so much to learn. I’m getting into a whole different realm of things – new markets, new customers, etc., and it’s very exciting. Q – Who was the first person you told about your new position? A – Well, the first person was Todd Eber. He sits right across the hall from me. Then I called my wife, of course. Q – Becoming the HVAC/R Segment Manager is a big accomplishment. What is another significant achievement that you are proud of? A – It’s probably being able to coach my two sons in youth sports. I’ve coached them in both youth baseball and basketball. Q – As the new HVAC/R Segment Manager, you probably have a lot of goals in mind. What is the one that you want to tackle first? A – One of my first priorities is to analyze where we are and make sure that we have the right personnel

and the right vendor partners who can make our customers, and ultimately ourselves, successful. From what I’ve seen so far, we are well on our way.

Q – Who will you count on most to help you to achieve your goals? A – First and foremost, Mike Tupa (DSG Chief Segment Officer) and Ryan Tracy (DSG Plumbing Segment Manager and former HVAC/R Segment Manager) have been helping me through this transition. In fact, Ryan has got to be getting tired of me. He’s one guy I’ve really been leaning on. Q – How is technology impacting the HVAC/R industry? A – The demand for higher efficiency with HVAC equipment is growing. We, as a distributor, need to stay on the cutting edge of technology and offer our contractors the training to be successful. Q – Why is HVAC/R so important for construction? A – The first thing that comes to mind when starting a project is often, “How can we make this more efficient?” Heating and cooling are oftentimes at the top of the list for factors that can affect efficiency.

Helping Utilities Achieve TOP FORM DSG partners with ALUMA-FORM to bring new utility solutions to the Midwest. In early 2012, DSG began a new relationship with ALUMA-FORM, an industry leader in innovative, custom-engineered overhead utility solutions. It is a partnership that has already become a valuable resource for DSG’s utility customers. ALUMA-FORM boasts a reputation for performance and durability that stems from a 50-year history of manufacturing high-quality, American-made products. Established in 1961, ALUMAFORM was the first manufacturer of aluminum transfer platforms. Since that time, the company has expanded to offer cluster mounts, arms and braces, metering mounts, aluminum equipment mounts, fiberglass equipment mounts, fiberglass guy strain insulators, antenna mounts and its popular Bolt-A-Band™ mounting band system. ALUMA-FORM products are known for their long life cycles (40 years or more, in most cases)

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and failure rates of .0001 or less. What is arguably more impressive is the company’s dedication to keeping its products American-made, an attribute that immediately appealed to DSG. “All of our products are engineered and built in Memphis, Tennessee,” says Ross Phillips, marketing manager at ALUMA-FORM. “We have a lot of respect for the fact that ALUMA-FORM makes such high-quality products right here in the United States,” adds Chad Veitenheimer, Utility segment manager at DSG, “and I know that our customers appreciate it as well.” To boost its business in the Midwest, ALUMA-FORM looked for a supplier that mirrored its customer-focused values. What it found in DSG was just the right fit. “DSG’s enthusiasm about our products and how they could help their customers was refreshing,” says Phillips. “We immediately recognized

that its commitment to customer success reflects our own. We knew that we could count on DSG to represent us well.” DSG is serving as a catalyst for the introduction of some of ALUMA-FORM’s more recently developed products, specifically its innovative fiberglass items. ALUMA-FORM’s fiberglass products are known for their proprietary veiled design, which makes them five times smoother than other fiberglass products – a key factor in improving resistance to UV light, tracking and abrasion. “Our fiberglass products will be one of the main focal points for DSG,” says Phillips. “We are looking forward to helping DSG customers and doing what we can to bring them quality products that can improve their operations.”

SPRING 2013 | CONNECTIONS

Smoother Is Better, And ALUMA-FORM Fiberglass Products Are Second To None! ALUMA-FORM’s proprietary veiled fiberglass design is five times smoother than our competitors, which provides superior UV, tracking and abrasion resistance. Add strength and durability every time you incorporate these ALUMA-FORM products into your operation: Fiberglass Equipment Mounts • Mounts to any pole – steel, concrete, wood or fiberglass – using ALUMA-FORM’s Bolt-A-Band™ system. • Available versions include 0° and 15° mounts. • Several different end fittings are available.

Fiberglass Guy Strain Insulators • Available versions include 16,000 lb., 21,000 lb., 30,000 lb. and 36,000 lb. minimum ultimate strength ratings. • Several different end fittings are available.

Fiberglass Dead-end & Tangent Arms • Available in a variety of pole gains, with and without guy attachments.

Contact your DSG representative today to put the performance of ALUMA-FORM to the test!

MEET THE DSG TEAM |

Bob Klar |

Quotations, Plumbing

To say that Bob Klar is always willing to lend a hand would be an understatement. Klar is an avid volunteer and, along with his wife, Cindy, puts in a significant amount of time helping others in the La Crosse, Wisconsin, area each year. The list seems endless, from Cub Scout leader to president of a booster club to coach of the Aquinas High School varsity girls softball team. In fact, he and Cindy’s community stewardship is so prevalent that they recently earned the Aquinas Award for Volunteering. While Klar spends his free time in his volunteer activities, his main focus is on his work at DSG/ W.A. Roosevelt. It’s in Klar’s nature to help others, and that has made him invaluable to his customers over the past 37 years. He joined DSG/W.A. Roosevelt in 1976 working nights stocking trucks, while he went to college during the day. “My father was a truck driver here and encouraged me to join the team,” says Klar. “I’ve been here ever since.” Klar has worked in a number of areas at DSG/ W.A. Roosevelt, including the warehouse, the city desk, the inside and outside sales departments, and currently as part of the quotations team. “My experience in the various facets of the job is probably my biggest asset to customers,” says Klar. “I’ve seen successes and I’ve seen failures, so I know what works and what doesn’t. I can give my customers peace of mind every time I

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make a recommendation on a bid.” Teamwork is a big part of volunteering, so it’s no surprise that Klar welcomed the partnership between DSG and W.A. Roosevelt. “By partnering with DSG, we’ve been able to offer customers products that we’ve never offered before,” he says. “Take water meters, for instance. Before, I would have had to turn a customer away, but now I just call the team in Burnsville, and I’m able to get what they need. There’s nothing better than helping someone else out.”

SPRING 2013 | CONNECTIONS

Outdoor

Adventures

True stories from

THE

BABY SITTER To say that Jesse Palmer of Kennebec Telephone was excited when he heard that he was chosen for one of the 350 paddlefish licenses at Lake Francis Case on the Missouri River (near Chamberlain, South Dakota) in 2012, would be 38

DSG employee owners

an understatement. He remembered seeing photos of his father and grandfather with these huge fish, but there hadn’t been a paddlefish season on the lake for 30 years. Palmer knew that the odds were against him; more than 2,000 anglers applied for licenses. But Palmer was picked, and he didn’t waste the opportunity. He spent 22 days in the month of May on the lake. It was a once-in-a-lifetime experience, with friends and family joining him on his adventure. Everyone had a good time, but each of them quickly learned how unique an undertaking it is to go after the massive – and somewhat reclusive – paddlefish. Because they ingest nutrients through their gills, the only way to catch them is to snag them with a treble hook. Palmer’s knowledge of the river and lake paid off. He was able to hook a good number of

fish, but it wasn’t until a special evening on the water that he made the catch of a lifetime. As the season was winding down, Palmer went out on a dreary, overcast day with his brother. He was catching paddlefish left and right, but none were of note. Palmer’s brother couldn’t resist a playful jab. “You’re catching all the little ones, now you have to find the babysitter,” he said. Undeterred, Palmer took the boat back down the same stretch of water that had proven fruitful earlier in the day. That’s when he snagged the babysitter. What turned out to be a 62-pound paddlefish wasn’t the largest catch Palmer made throughout the season, but it was definitely his favorite. The two men marveled at the huge fish in one of those special moments that fishermen grow to cherish. “It might not have been the largest paddlefish I caught that May, but it certainly

was the prettiest. Being able to catch that fish with my brother on board meant so much to me, I couldn’t have asked for a better feeling.”

MONTANA

MONSTER On the opening day of elk bow-hunting season in 2012, Todd Sisson of MDM Supply in Bozeman, Montana, drove through the Gallatin Canyon toward Yellowstone National Park. It was a perfect morning, with a clear blue sky and the temperature around 50 degrees. Sisson’s expectations were realistic for the first day out – his goal was simply to get a feel for his hunting grounds. As he got out of his truck, Sisson immediately heard elk bugles in the distance. His heart began to race. The elk were just 400 yards away in a draw, so

Sisson decided to take a look. As the sun came up, he found himself in a perfect position – down wind and directly in the path of the elk. It wasn’t long before the first cow appeared, then a rag horn (a less-thantrophy-worthy elk). He found himself feeling thankful for the beauty of it all. Fifteen to 20 more elk passed by, including both cows and bulls, but nothing worthy of Sisson’s arrows, especially since it was still opening day and there would be more chances to come (or so every hunter hopes). He waited an hour or so until it got quiet, then he decided to move. He moved to another area of the property with the intention of getting some exercise, while taking in the sounds and smells of the woods. Nothing stirred during his hike, but the perfect weather made the walk worthwhile. A half mile later, he heard a small bugle and decided to check it out. As he moved into position, a bull came around a tree and headed straight toward Sisson. It was a small six-point elk that wasn’t worth shooting, so he crawled back 30 yards or so to simply watch the animal in its environment. Suddenly, the morning calm was shattered by a loud, aggressive bugle from a second

elk somewhere nearby. Sisson was startled, especially when he realized that the sound was moving quickly in his direction. Sisson changed position to get a better look. The elk bugled again, and the hunter was stunned at how fast the animal was moving, though it still remained out of sight. Sisson quickly settled on a spot to wait, then hurriedly began to prepare his bow. A bull burst into view and stopped just 40 yards or so from Sisson’s hiding spot. The hunter caught his breath at the sight of the massive beast. Opening day or not, this was a trophy elk. The animal paused behind a thin tree – a sapling just large enough to prevent Sisson from getting a clear shot. Cursing, he drew his bow and waited for the enormous animal to move. Time seemed to stop, and the sounds of the forest seemed to go quiet, but the beast finally stepped forward and paused. Sisson’s arrow was true, and the bull fell just 50 yards from where it was struck. Sisson’s trophy turned out to be a huge 331 bull elk. It was the hunt of a lifetime, and one that he shared by posting a photo on the DSG Outdoors page of www.dakotasupplygroup.com.

Share your own outdoor adventure at

www.dakotasupplygroup.com/what-we-do/dsg-outdoors/!

The DSG Automation Trailer:

COMING TO A LOCATION NEAR YOU Get a hands-on demo before you buy! DSG’s automation trailer lets you get a firsthand look at how DSG can improve your operation. This mobile showroom lets you get “hands on” with a variety of the latest automation products, including: • Push buttons • Limit switches • Timers • Drives • Relays • Soft starts To find out how to see the automation trailer for yourself, contact DSG at (800) 540-8215. 40

NEWS WIRE |

Make Plans Now To Attend The

2013 HVAC E XPO, APRIL 2-3 DSG/W.A. Roosevelt is hosting its third HVAC Expo, and this year is sure to be its best. In addition to seminars on everything from business strategies to technical training, the 2013 HVAC Expo will feature keynote speaker Adams Hudson, a well-known independent marketing consultant and guru in the HVAC industry. “If you are in the HVAC industry, this is a great chance to get important information that can help you to improve how you do your job and even how you run your business,” says Greg Servais, DSG HVAC/R segment manager.

The 2013 HVAC Expo will also bring together more than 40 of the world’s top HVAC manufacturers, including Honeywell, Goodman, Fujitsu, Taco and Grundfos. “The HVAC Expo conveniently offers contractors everything in one place, from our HVAC team to our vendors to the very latest products and solutions we supply,” says Servais. “It’s a great opportunity to learn, and talk shop in a relaxed and fun atmosphere.” To sign up for the 2013 HVAC Expo, visit www.hvacexpo2013.eventbrite.com today!

DSG/ W.A. Roosevelt Takes Customers On A

FOOT BAL L FRENZY ADVENTURE In October 2012, DSG/W.A. Roosevelt took 25 customers/Green Bay Packers fans on a trip they will never forget. In collaboration with Goodman (one of the nation’s largest manufacturers of residential and light commercial HVAC systems), DSG/W.A. Roosevelt launched its first-ever Football Frenzy Promotion, in which it offered customers a chance to take in a Packers road game with virtually all expenses paid. Qualifying customers were treated to a trip to Houston, Texas, including hotel, flight, tickets to the Packers/Texans game and even a tailgating party. “Our focus is on building relationships, and this trip couldn’t have done that any better,” says Greg Servais, HVAC/R segment manager. “Plus, the Packers won the game!”

Customers were also treated to a full tour of the Goodman headquarters. “It was an extremely educational experience,” says Servais. “Many of our customers have never been to a manufacturing plant of this size, and we were able to see things like the engineering lab and the logistics center. It was fascinating to see how some of the products we use every day are made.”

Reliant Stadium in Houston, TX.

Jason Teveldal — who co-owns CDJ Electric, Plumbing & Heating with his dad, Craig Teveldal — handles the company’s geothermal business.

Geothermal Installations in farm shops and homes boost contractor’s sales. While farm shops may be a common sight in the Midwest, particularly the rural upper Midwest, they are less wellknown in other parts of the country. A farm shop serves a multitude of roles; the building can be a central location for equipment maintenance, fabrication and service, parts and tool storage, and often has an adjoining office. The shop provides a place where farmers can service, assemble, repair, adjust and modify equipment, and keep tools in one location for field and farmstead operations. For CDJ Electric, Plumbing & Heating in Britton, S.D., farm shops are one of the most popular applications for geothermal heating-andcooling systems.

“Farmers can’t get the tax credits for geothermal projects, but they can get some federal grant money,” CDJ co-owner Jason Teveldal explains. Energy efficiency has become a central focus of the contracting company, which does business in northeast South Dakota and southeast North Dakota. The company started in 2000 by doing traditional plumbing, heating and electrical work, and CDJ eventually expanded into the geothermal market. “We had been doing heating for quite awhile and decided we wanted to get into geothermal because of the efficiency benefits it could bring to customers,” Teveldal says.

Photo credit: CDJ Electric, Plumbing & Heating

From the ground up The energy savings offered by geothermal systems can be impressive. CDJ customers usually save 50% or more on their utility bills, Teveldal notes. The contractor in late 2009 did a geothermal project that involved an 8,000-sq.-ft. farm shop with 20-ft.-high side walls. “In January 2010, their heating bill was $140,” he says. At about the same time, CDJ did another geothermal project for a customer whose farm shop is about 9,000 sq. ft. “He ended up having to spend only $1,000 for the year to heat and cool his shop,” Teveldal says. “His neighbor, whose farm shop I did not do, installed an electric boiler. He was spending up to $900 a month just for

Farm shops are a common sight in the rural upper Midwest, where they serve various roles. For CDJ, these shops are perfect applications for geothermal heating-and-cooling systems.

in the Dakotas BY WILLIAM ATKINSON

heat, and he doesn’t have the air-conditioning option in the summer.” More recently, CDJ installed a geothermal project for a 16,600-sq.-ft. farm shop with a 720-sq.-ft. office on the side. The system powers radiant floors and air conditioning in both the shop and the office. The system’s equipment includes two 12-ton water-towater heat pumps manufactured by Northern Heat Pump. The farm shop’s radiant floor has a separate 15-ton hydronic fan coil for air conditioning. The ductwork has a 28-in.-round and 120-in.-long duct sock on it going from one end of the shop to the other. The office’s radiant floor is equipped with a separate 2-ton hydronic fan coil for air conditioning.

First Co. manufactured the air handler for the shop. The nonpressurized buffer tank comes from B&D Manufacturing, which also manufactured the loop field pump, a multizone variablespeed smart pump. The nonpressurized ground loop is equipped with a 3-hp Grundfos pump. “There are controls on the heat pumps, so, depending on how many are running, the ground loop pump will adjust accordingly,” Teveldal explains. CDJ installed ventilation equipment in the shop to provide safety for welding hoods and cleaning activities. The contractor purchased all the products for the project from Aberdeen, S.D.-based Dakota Supply Group.

Boon to business CDJ receives two to three calls a day from people who want to know more about geothermal installations. Many calls are from people asking about residential applications. Over the last four years, the company has installed an average of 15 systems annually. “We do several geothermal replacement jobs in existing homes,” Teveldal states. “In addition, we do geothermal systems on about 99% of all of the new houses we work on.” Federal tax credits of 30% are available to residential customers for geothermal projects. These credits are set to expire Dec. 31, 2016. They are available for closed loop and open loop water-to-air Continued on page 44 

Continued from page 43

systems, closed loop and open loop water-to-water systems and direct expansion systems. CDJ does very little advertising to promote its expertise with geothermal systems. In fact, Teveldal says, it gets 90% of its geothermal project business from word-of-mouth referrals from satisfied customers. “We have a large client base and when they find out we offer geothermal, they call us,” he adds. Another appeal to customers is that CDJ provides a virtual turnkey project, making it convenient for its customers. “Customers like the idea of only having to deal with one person,” Teveldal says. “They don’t have to worry about finding other contractors. When we do a project, we do almost everything. We have a sheet metal shop, and we do our own custom ductwork. We also do our own insulating, controls and wiring.” The only part the company subcontracts is vertical loop drilling because the process can get very tricky. CDJ contracts with T.W. Construction in Bath, S.D., which has specialized in geothermal vertical drilling for five years. One of the challenges is that the driller never knows completely what he’s going to hit until he starts drilling. “We can figure out ahead of time where the wires and pipes are,” T.W.’s owner Tony Wollman says. “However, it’s the

rocks that you can’t plan for. There is no way to know what’s 200 ft. down.” Along with residential projects, T.W. works on school projects, which involve digging a large number of holes, Wollman says. About 99% of the geothermal systems that CDJ installs are vertical. “We don’t do many horizontals because of space. If a customer does want a horizontal system, though, we do it ourselves,” Teveldal explains. “We don’t contract with T.W. Construction.” Geothermal has made a big impact on CDJ’s business. “Our sales have skyrocketed,” says Teveldal, adding that between 2006 and 2010 overall business tripled. “Sometimes, we are too busy. I would like to add someone, but it’s tough to find someone who is qualified.”

Learning geothermal Another reason for the amount of business the contractor gets is that not many competitors in the region do geothermal work. Learning the technology associated with geothermal projects wasn’t too difficult, Teveldal says. “Part of it was self-taught,” he says. “It just seemed to come naturally to me.” Another part came from the certification acquired through a class offered by the International Ground Source

Heat Pump Association. Working with Oklahoma State University, IGSHPA has provided training on groundsource heat pump installation for about 15 years.

CDJ receives two to three geothermal inquiries a day. The three-day installation workshops are designed for developers, architects, manufacturers, distributors, dealers, installers, HVAC contractors and trenching/ drilling contractors. Topics covered include: design and material options, system layout, pipe-joining techniques, trenching/drilling processes, air and debris purging, pressure drop calculations, pump and fluid selection and thermal conductivity. For contractors considering getting into the geothermal business, Teveldal has some advice. “Make sure you know what you’re doing before you get too far into it,” he suggests. “There are some other contractors around here who do geothermal, and there have been cases where I have had to go around and fix some of their work.”

MEET THE DSG TEAM |

Tim Jensen |

Sioux Falls Branch Manager

Tim Jensen is DSG’s new Sioux Falls Branch Manager. Before taking the lead of the Sioux Falls team in 2012, Jensen worked as part of the outside sales team at DSG. He also worked for a full-line plumbing and HVAC distributor since 1988, serving in a variety of roles, including shipping/ receiving, purchasing and finally in sales. While Jensen’s past work experience made him a natural fit for DSG, his work ethic made him stand out. Jensen grew up on a farm in Wentworth, South Dakota, so the value of hard work was ingrained in him at an early age. “I’ve always carried the attitude that any job is worth doing right, even when it’s hard,” says Jensen. “Without our customers, we wouldn’t be here, so I’m willing to do whatever it takes to help them succeed.” One way Jensen helps his customers is by making sure his team in Sioux Falls stays on top of the recent trends and changes in the industry, and according to Jensen, energy efficiency is on everybody’s mind. “We try to find products that not only meet the efficiency requirements of the end user, but are also easy to install,” he says. During his free time, Jensen can be found on the soccer field. He coaches a local youth girls team and has been doing so for more than 10 years. He’s always enjoyed soccer, but his passion for the game grew while coaching his two sons and watching his daughter play. Today, he still

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gets to cheer on his daughter as she plays for Northwestern College in Iowa. It seems as though leadership comes naturally to Jensen, and whether he’s coaching or managing, he understands that every part of the team is important. “I tell my players that all we can do is our best and hopefully it’s enough to win,” says Jensen. “The same is true for the office. If we work hard and contribute our best effort, then we are giving our customers the best chance to succeed.”

SPRING 2013 | CONNECTIONS

GROW YOUR BUSINESS |

HELP WANTED A shortage of contractors is threatening the trade industries. Speculation about an impeding shortage of trade professionals has been rumbling for a decade, like the first subtle tremors of an earthquake. However, as the economy floundered and electricians, plumbers and HVAC/R technicians looked for work, it became something of a taboo subject. Prevailing logic seemed to go something like this: Let’s worry about the tradespeople we have now and deal with the future later. As the economy starts to rebound, the construction industry has started to rebound as well. That’s good news, but it has made the rumblings of a labor shortage even more acute. According to the U.S. Bureau of Labor Statistics, projections

CONNECTIONS | SPRING 2013

show that by the year 2014, the national need for electrical workers will rise to more than 734,000 – a figure that is 78,000 beyond the number currently employed in the field. In fact, this shortage is already impacting projects in the United States. According to an article from www.builderonline.com, the average time taken to start building a new home is creeping up. The article cites a recent survey that discovered that the average time to start a home has already risen from five weeks to eight. Part of the problem, according to www.builderonline.com, is that builders are being forced to line up multiple subcontractors because their first choices

simply can’t make it on time. Oftentimes, builders wait as long as they can, then give up and hire someone unfamiliar, an uncomfortable and timeconsuming situation for everyone involved. Builders soon become frustrated, and an economy that is trying to find its legs loses some of its balance. As this shortage begins influencing the Midwest, an important question presents itself: What can we do about it? DSG created its Education Connection Fund to answer that very question. The DSG Education Connection Fund provides scholarships for those who wish to join the trade industries. It also provides

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young people with information about the trade industries themselves, encouraging them to consider a career as an electrician, plumber, HVAC/R or communications technician or lineman.

Aside from encouraging the young people in your life to consider the trade industries, a donation to the DSG Education Connection Fund is a great way to ensure that the trades remain an attractive career choice. That

What is causing this shortage?

are slow to come back.

A 2012 study by McGrawHill Construction blames the problem on three factors: Retiring Workers – The massive bubble of retiring baby boomers is becoming a reality. The Recession – Many workers left the trade industries and

Not Enough New Workers – 62% of surveyed contractors believed that their trade does not appeal to the younger generation.

In the same study, researchers found that decision makers within the industry are bracing for the worst:

benefits everyone. After all, selling your contracting business is easier if there is someone interested in buying it. To learn more about the DSG Education Connection Fund, visit www.dsgfund.com. •

32% of A/E firms and general contractors are concerned about a shortage of specialty trade contractors by 2014.

•

49% of general contractors are concerned about finding experienced craftworkers by 2014.

•

37% of A/E firms are concerned about finding workers with 10 years of experience or more.

Sources: Construction Industry Workforce Shortages SmartMarket Report: Role of Certification, Training and Green Jobs in Filling the Gaps, McGraw-Hill Construction, 2012, http://analyticsstore.construction.com/index.php/ 2012-business-value-of-bim-in-north-americasmartmarket-report.html Massive Shortage of Electricians Predicted for U.S., PRNewswire, http://www.prnewswire.com/newsreleases/ massive-shortage-of-electricians-predicted-for-us-59318327.html Where Demand Is Sprouting, Labor Shortages Are Close Behind, by Teresa Burney, http://www.builderonline. com/workforce/where-demand-is-sprouting-labor-shortages-are-closebehind.aspx

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SPRING 2013 2012 | CONNECTIONS

Innovative ILLUMINATION New lighting solutions are energizing the business of retrofits. Business owners in the Bemidji, Minnesota, area know a commonsense decision when they see it. That’s one of the biggest reasons that so many of them are retiring their old lighting systems for new solutions. Thanks to DSG’s Jay Tupa, these lighting retrofits are resulting in projects that are win-win situations for both contractors

CONNECTIONS | SPRING 2013

and building owners. Tupa, an account manager at DSG’s Bemidji branch, learned about rebates that were available from two local electrical cooperatives a few years back and began to explore opportunities to put them to work for his customers. He started by approaching local businesses with a proposition. “I asked them to let me

perform a simple audit on their lighting Jay Tupa with the understanding that there are four possible outcomes,” Tupa says. “First, they can simply say no. Second, they can see the value in new lighting and budget for the changes in the future. Third, they can make

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the changes as their old system burns out. Finally, they can move ahead with a retrofit now. There’s no pressure or sales pitch. I just show them a factual comparison of their current system versus a new one.” That comparison is almost always eye-opening. For example, adopting new LED technology for exterior lighting results in a 70 percent to 90 percent reduction in energy costs. Those same LED lights typically reduce maintenance costs by 100 percent – as in, there is no maintenance to speak of. That fact is even more surprising when you consider that these LEDs are projected to last 27 years! For interior lights, Tupa often recommends new fluorescent fixtures that save up to 50 percent on energy costs over old T12 models. As a result, DSG is able to offer improved lighting efficiency throughout an entire facility. “I break down projected payback time for retrofits,” says Tupa. “People are excited when they see that the average is just two to two-and-a-half years for a

system to pay for itself. I actually had one project pay for itself in six months!” Tupa uses a free iPad app called ecoInsight (a program supported by the National Association of Electrical Distributors) that doesn’t just make his retrofit proposals easy, but provides information that shows the environmental benefits of a project as well. For example, building owners are often surprised by the fact that LED lighting produces 79 percent less greenhouse gases than older systems. “Once the building owner is on board, I just ask them who does their electrical work,” Tupa says. “Then we call that contractor and get them involved. There aren’t a lot of times in life when everyone wins, but this partnership is one of them. The building owner saves money, the contractor makes money and the earth gets a little bit greener after it is all said and done.” So far, Tupa has helped to retrofit gas stations, restaurants, retailers and many other businesses. “Schools are also

becoming interested,” he says, “as are the owners of almost any building with old-fashioned T12 fixtures.” According to Tupa, most of his projects so far have utilized products from RAB Lighting or Cooper Lighting. “We choose the solution that is the best fit for the job,” he says, “and so far the results have been incredible. Our relationships with RAB and Cooper have paid off for everyone involved.” Unwilling to take all of the credit for the success of his projects, Tupa points to his team instead. “Our inside sales crew has been a huge part of this. They work with me, they work with the contractors – they help to put it all together.” If you’re interested in learning how to approach building owners about retrofits, or if you’d like DSG’s help – contact your DSG representative today. New technology is making lighting retrofits a bright example of teamwork that pays off for everyone involved.

MEET THE DSG TEAM |

Paul Hanson |

Inside Sales, HVAC/R & Plumbing

For those who don’t know Paul Hanson, he’s a hands-on guy. When he was a young man, he enjoyed motorizing bicycles and building go-karts. Today, his hobby has evolved into restoring cars (mostly Fords) and chopping up motorcycles. He does it all right in his garage, from the metal fabrication to the paint, and he’s quite good at it. In fact, he’s sold one of his customized metric choppers to a collector all the way in Japan. Like many of us, Hanson’s hobby sometimes carries over to his professional life, in which he puts his hands-on approach to good use for DSG/ W.A. Roosevelt plumbing and HVAC/R customers. “I think it’s one of the biggest ways that I add value for our customers,” says Hanson. “They see that I share their love for construction and that I’m mechanically inclined. I use those instincts – along with my experience – to ensure that customers get the right parts for the job. It builds trust – and that means they value my suggestions about their product choices and even project decisions.” Hanson joined DSG/W.A. Roosevelt officially in 1990, working in the receiving department while he attended Western Technical College in La Crosse, Wisconsin. After he graduated, he worked at the city desk until joining the inside sales team in 1999. He has remained there ever since. Even though Hanson has spent his entire professional career at DSG/W.A. Roosevelt, that isn’t where his HVAC experience began. Instead, Hanson credits his grandfather, Frank Hanson (a long-time member of the W.A. Roosevelt team),

CONNECTIONS | SPRING 2013

for introducing him to the industry. “A lot of what I learned and how I approach a project came from spending time with my grandfather,” says Hanson. “When I was younger, around 12 or so, I would go with him on service checks once in awhile and he would explain to me what he was doing. The amount of knowledge he had about HVAC and plumbing was amazing, and the customers loved him.” Though Frank Hanson retired in 1994, Paul still gets calls from customers asking how he is doing. “My goal is to make an impact just like he did,” says Paul Hanson. “I want my customers to know that I did everything I could to help them succeed.”

WWW.DAKOTASUPPLYGROUP.COM

SIOUX FALLS WATERWORKS BRANCH Readies New Location For Summer 2013 DSG’s main location in Sioux Falls, South Dakota, will soon be getting a new neighbor: the Sioux Falls Waterworks branch. Once separated by more than four miles, the two branch locations will now share adjoining land as the Sioux Falls Waterworks team moves into a new facility next to the main branch. In addition to the benefits offered by close proximity, the new Waterworks location will be significantly larger. “We’re increasing our office space from 1,600 to 5,000 square feet, and our warehouse will be approximately 11,500 square feet,” says Malcolm Macdonald, DSG Sioux Falls Waterworks branch manager. “Plus, we’re creating a new yard area that will be about three acres.”

The new Waterworks building will also include some familiar features from the old location, including a showroom, city desk area and its certified Grundfos sub factory, in which it builds and tests Grundfos ground water pumps. For questions regarding DSG’s new Waterworks branch in Sioux Falls, contact Malcolm Macdonald at (800) 660-5531.

Contact Information: 2219 East Benson Road, Sioux Falls, SD 57104, (800) 660-5531 Branch Manager: Malcolm Macdonald

GROW YOUR BUSINESS |

Budgeting For

PROFIT

Do you develop a sales revenue and expense budget? If you answered “no,” then there is a good chance you can improve your profits by investing the time to develop one.

To get started, let’s define some terms: Sales Revenue

The total amount of money billed to customers

Cost Of Materials Sold

The amount you paid for materials purchased for projects

Adjusted Gross Income (AGI)

FIGURE 1

The amount left when you take sales revenue and subtract the cost of materials sold. Adjusted gross income is the money available to spend on expenses.

Revenue from labor billed

717,080

Sales from materials purchased

607,500

Total sales revenue

$ 1,324,580

Cost of materials sold

450,000

Adjusted gross income

874,580

Figure #1 shows how this might look on an annual income statement. 52

Budgeting For The Next 12 Months To get started with a budget estimate for the coming year, we need to estimate our sales revenue.

There are two revenue areas we need to look at to estimate our income for the upcoming year:

1. Income from markup on materials purchased

2. Billable labor revenue

Markup On Materials Purchased One source of income is revenue from the markup on materials you purchased for installation on projects. They are above and beyond the actual cost of the products (cost of materials sold). One way to estimate the income from materials purchased is to look at your previous year’s income statement. You can calculate the revenue from markup on materials purchased by subtracting cost of materials sold from total material sales revenue. In figure #1, sales revenue is $607,500. When you subtract the cost of materials sold, which equals $450,000, the balance equals $157,500, which is the revenue from markup on materials. This will be the estimate we use for our 12-month budget.

Labor Estimating A larger portion of a company’s gross profit comes from labor revenue. To estimate potential revenue from labor, you will need to input some data. In Figure #2 (page 54), we show the process. Start by taking an inventory of all the employees who receive a paycheck. You can use a computer spreadsheet to do this, or you can accomplish it using paper and pencil with a number of columns.

Here is what you need to know: • How many hours a year they work (40 hours a week x 52 weeks a year = 2,080 available hours)

• Their billable rate

• The percentage of the hours they work that will be billable

Steps one and two are simple. Step three is more difficult. Continued on page 54 

Continued from page 53

Ideally, a company should track the number of billable hours (the amount of time billed for revenue) that every employee puts in, including the owner. By doing this, you have a clear picture of what each person’s billable percentage is.

FIGURE 2

An industry average that is tossed around is 65 percent. In other words, 65 percent of the time a technician works is time that the company can bill and receive revenue from. In Figure #2, we put this data together. We’ll use 65 percent for our estimate for techs and 50 percent for an owner (they tend to be less billable due to their office duties).

Name / Position

Hours Week

Ted – owner John – technician Jay – technician Liz – technician Mike – technician Brent – technician George – technician Sam – technician Alex – bookkeeping / dispatch Anne – secretary / receptionist

40 40 40 40 40 40 40 40 40 32

Hours Year

2080 2080 2080 2080 2080 2080 2080 2080 2080 1664

Hourly Pay Rate

$ $ $ $ $ $ $ $ $ $

40 25 25 22 22 20 20 15 25 15

$ 229 $ 22.90

Averages

Annual Pay

Percent Billable

Billable Hours

1040 1352 1352 1352 1352 1352 1352 1352 0 0

$ 85 $ 75 $ 75 $ 75 $ 65 $ 65 $ 55 $ 55 $ -----$ ------

$ 88,400 $ 101,400 $ 101,400 $ 101,400 $ 87,880 $ 87,880 $ 74,360 $ 74,360 $ --------$ ---------

$ 476,320 $ 47,632

505 % 51 %

10,504 1050.4

$ 68.27

$ 717,080 $ 71,708

$ $ $ $ $ $ $ $ $ $

83,200 52,000 52,000 45,760 45,760 41,600 41,600 31,200 52,000 31,200

50 % 65 % 65 % 65 % 65 % 65 % 65 % 65 % 0% 0%

Billable Rate

Estimated Revenue

Figure #2 shows that (using current data) the company can generate $717,080 from labor revenue, provided that there is enough work to allow everyone to reach their billable hours goal.

Annual Revenue Estimate

FIGURE 3

Now that we have estimated revenue from markup on materials purchased and from labor billed, you can estimate your potential adjusted gross income and net hourly rate.

Billable hours revenue Revenue from markup on material sales Adjusted gross income Net hourly rate

Billable Hours

10,504

Average Rate

$ 68.27

$ 83.26

Total

$ 717,080 $ 157,500 $ 874,580

Figure #3 shows that with the addition of the revenue earned from markup on materials purchased, the new net hourly rate available is $83.26 ($874,580 divided by available billable hours of 10,504).

CONNECTIONS | SPRING 2013

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What Should My Billable Hourly Rate Be? Now that we know the estimated potential sales revenue of $874,580 (average rate x available hours), you can find out if it is enough to pay expenses. Add up all of the estimated operating expenses the company has for the next 12 months.

• The largest portion will be salary expense. In Figure #2, we recorded the total salary expense at $476,320. • Next, add all the other operating expenses that you can estimate by looking at your profit and loss statement. When figuring expenses, don’t forget to add in how much profit you want and some money for replacement equipment. Once the total expenses are tallied, including cash for equipment and profit, divide that number by the number of available hours (10,504 is the number of billable hours available from Figure #3). This is the hourly rate needed to pay all of the operating expenses. If the hourly rate you need to cover expenses is lower than your actual net hourly rate ($83.26 in our example, as you recall), congratulations, you should be profitable. If the hourly rate you need to cover expenses is higher than your actual net hourly rate ($83.26 in our example), you need to make some adjustments.

You have the following options:

1. Raise the rate you charge

2. Cut expenses

3. Increase the markup income from materials sold by increasing the markup

4. Improve the productivity of the technicians

By understanding the actual hourly rate needed for your company to turn a profit (before taxes), you’ll be able to better manage your expenses. Now you can bid projects and line up work with a profitable billable rate in mind. DSG has a web-based computer application that can help you do this online. It’s free for DSG customers to use. To learn more, email DSG at inbox@dsgmarketingteam.com, and you will be contacted with everything you need to get started.

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SPRING 2013 | CONNECTIONS

North Dakota:

Bismarck (800) 363-7112 Bismarck Waterworks (855) 337-9258 Dickinson (855) 245-2098 Fargo (800) 437-4702 Fargo Water Equipment (800) 342-4676 Grand Forks (800) 633-2211 Minot (800) 472-2145 Williston (800) 637-0170

South Dakota:

Aberdeen (800) 660-5532 Mitchell (800) 660-5534 Pierre (800) 660-5537 Rapid City (800) 660-5538 Sioux Falls (800) 540-8215 Sioux Falls Waterworks (800) 660-5531

Minnesota:

Alexandria (800) 345-0094 Bemidji (866) 506-0280 Burnsville (800) 325-0514 St. Paul (800) 652-9784

Wisconsin

La Crosse (800) 279-2726 Madison (877) 252-8739 New Berlin (800) 783-5835 Plover (800) 472-1661 Rice Lake (800) 962-2759

Montana

Bozeman (800) 416-0005 Helena (800) 697-0005 Kalispell (800) 949-0005 Missoula (888) 865-0005

Kalispell Missoula

Helena

Minot Williston Grand Forks Dickinson FARGO Bismarck Aberdeen

Bozeman

Rapid City

Pierre Mitchell Sioux Falls

Bemidji Alexandria St. Paul Burnsville

Rice Lake Plover La Crosse New Berlin Madison

www.dakotasupplygroup.com UT CO

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