Charlotte Biz 2016.03 04 MAR-APR-MAY 2016

march/april/ may 2016

RISE E

H T ON

RESIDENTIAL REAL ESTATE:

AGAIN

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featuring‌ Allen Tate Co. Simonini Homes Berkshire Hathaway HomeServices Killingsworth Environmental Shumaker, Loop & Kendrick

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Discover the Harris Conference Center difference at www.meetatharris.com or call 704.330.4611.

FEARLESS IS TAKING A LEAP NOT KNOWING WHERE YOU’LL LAND Business is all about moving into uncharted territory, taking on new challenges, embracing change. Backed by the name trusted for more than 80 years, you have the power to do more and go further.

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RESIDENTIAL RISE REAL ESTATE: HE ON T

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AGAIN

Keeping Pace with Market Trends

Now that “normalcy” has returned to the Carolinas real estate market after the Great Recession, the region is poised for accelerating growth for years, says CEO Pat Riley of Allen Tate Co., despite issues of new home affordability and a likely brief, cyclical recession in 2019. Construction labor is slowly coming back, materials are off-the-chart expensive, and land is back at pre-recession prices per acre. So new homes are now 15 to 18 percent more expensive.

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Seamless Integration of Expertise Yields Synergies

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A Sign of Good Things to Come

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Turning Dreams into Reality

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Transforming Into a Home Services Bundler

Shumaker, Loop & Kendrick believes effective legal solutions come from fully understanding clients’ goals, visions, challenges, and obstacles, and knowing how to design answers that align with their values and culture. “Our firm’s culture is still deeply grounded in its Midwestern, straight-forward, no-nonsense work ethic,” confirms Charlotte partner Warren P. Kean. “We credit much of our growth and success on the foundation that was begun in Ohio.

One of the most trusted brands in the world focused on building strong client relationships, Berkshire Hathaway HomeServices Carolinas Realty has been helping families in the Charlotte region find their dream home for over 36 years.

According to CEO Thomas Camp, the company’s tag line, “We make great neighbors,” is their vision, striving to have a meaningful impact on the neighborhoods and communities they serve.

Simonini Homes is serving the market with homes and whole neighborhoods designed to blend into traditional communities like Myers Park and Eastover while providing the sought-after livability of modern floor plans. Advisor Alan Simonini describes how people are used to nice things but want to downsize. He says, “I take great pride in making homes that look like the neighborhoods they’re going in. They fit right into the fabric of the neighborhood.”

Killingsworth Environmental has grown from a pest control to a full-fledged home services business that includes wildlife control, heating and air conditioning, indoor air quality, mold remediation, carpet and hardwood cleaning, water restoration, plumbing, electrical, and lawn care. “How we treat and care for our customers is everything to us,” says V.P. of Operations Andrew Rogers. “It’s our culture from management all the way down the line.”

o f i n t e re s t …

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Investment in Small Business 3 Encouraging

Starting Simple; Actionable Steps 7 Taking

Volatility: Keeping the Glass Half Full in the Economy 5 Market

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Leadership: 6 Thought Inspiring with Innovative Ideas march/april/may 2016 | charlottebiz.com

The Target Market Paradox: Narrow Focus Equals Better Leads

LinkedIn Accessibility Soars 37 With New Mobile App

Po ssi Po ssibleweb

OF INTEREST: Insightful Solutions Perfectly Matched to Your Corporate DNA

ENCOURAGING INVESTMENT IN SMALL BUSINESSES TAX LAW ALLOWS AVOIDANCE OF TAX ON THE SALE OF A BUSINESS

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t the end of last year, the president signed into law the ability of some investors to not pay tax on the sale of “qualified small business stock” (QSBS) acquired after September 27, 2010, and held for more than 5 years. Under the new law (which permanently extends this special treatment that had been allowed on a temporary, annual basis since 2010), the gain from such sales (subject to numerous technical qualifications and limitations) is excluded from taxable income and, therefore, is not subject to federal and, for most states, state income taxes, the alternative minimum tax, or the 3.8% tax (sometimes referred to as the Obamacare tax) on capital gains and other net investment income.

The amount of gain that is excluded from tax is capped at the greater of $10 million or 10 times one’s investment. For example, a person who invests $100,000 in a qualified small business after September 27, 2010, holds that investment for over five years, and meets the other eligibility requirements will not be subject to tax on gain of up to $10 million, and a person who invests $1.5 million will not be subject to tax on gain of up to $15 million.

Not all investors are entitled to this tax break. Only individuals (directly or indirectly through flow-through entities, such as limited liability companies (LLCs) classified as partnerships for federal tax purposes), estates and trusts are eligible (i.e., not C corporations), and those eligible investors generally must purchase the QSBS directly from the issuing corporation and not from any other person (except transfers upon death, by gift or distributions from LLCs and other entities classified as partnerships for federal tax purposes).

Only C corporations (including LLCs that elect to be classified as C corporations for federal tax purposes) may issue QSBS. Investments in partnerships, LLCs and other entities classified as partnerships, and S corporations do not qualify, except to the extent those flow-through entities own QSBS in other companies. Moreover, only businesses that are deemed to be both “active” and, at the time of the issuance of the stock, “small” are eligible to issue QSBS. The list of businesses that are not deemed to be “active” and, therefore, do not qualify to issue QSBS include professional service, arts and entertainment businesses; insurance, financing, leasing, banking and investment companies; hospitality (hotels, restaurants, etc.) businesses; farms; and businesses entitled to depletion deductions (such as mining, oil and gas, and other mineral extraction businesses).

Also excluded are those active businesses that immediately after the investment have a gross asset value of more than $50 million and, therefore, are not considered “small” for this purpose.

LLCs and other entities classified as partnerships for federal tax purposes are not completely left out from securing this tax break for their owners. Those entities may convert into C corporations (usually a fairly easy process) to have their future appreciation escape tax (i.e., only the owners’ built-in gain at the time of conversion will be subject to tax when they later sell their QSBS), up to the above-described caps.

Hence, owners of existing companies that are LLCs or other entities classified as partnerships for federal tax purposes may be better suited to realize this tax break than existing C corporations that issued all or substantially all of their stock before September 27, 2010. However, those investors will want to weigh the benefits of maintaining flow-through status (e.g., one level of tax on business earnings that are distributed to its owners, the ability to sell assets or the company itself at lower capital gains rates while allowing the purchaser of This tax break those assets or the company to receive was deliberately a tax basis in those enacted by assets equal to Congress to the amount the purchaser directly encourage investor indirectly pays ment in active, for t hem, a nd small businesses. the ability to use company losses to reduce, subject to several limitations, the owners’ taxable income from other sources) against the benefits of not having the future appreciation in their interest in the company subject to tax.

The ability to sell an asset for cash and not have to pay tax on the gain realized on the sale is extraordinary. This tax break was deliberately enacted by Congress to encourage investment in active, small businesses. Every business owner who either has an investment in a small business (including a business that may otherwise not qualify but has a segment or division that may qualify) or is considering starting or investing in a small business should consider whether that business qualifies (or through restructuring or reorganization could qualify) for this tax break and, if it does, assess whether the ability to avoid tax on the sale of their investment outweighs the numerous, complex and, in some cases, unsettled compliance requirements and limitations and competing considerations of flow-through taxation.

Content contributed Shumaker, Loop & Kendrick, LLP, a full service law firm founded in 1925 with more than 240 attorneys practicing in Charlotte, North Carolina; Columbus, Ohio; Sarasota, Florida; Tampa, Florida; and Toledo, Ohio. Content written by Warren P. Kean, Partner, whose practice focuses on matters relating to limited liability companies, partnerships, and other unincorporated entities and the taxation of those entities. For more information, contact him at 704-945-2906 or wkean@slk-law.com or visit www.slk-law.com

Kean

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Looking for experienced writers who can fetch good stories!

If you have experience in business writing and live in the Charlotte area, we’d like to hear from you!

Writers are required to conduct in-person interviews at the business location and submit comprehensive pieces of 1,800 to 2,000 words in length.

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Requires professional composure, Internet research, effective communication, and good writing skills conforming to the AP Stylebook.

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March/April/May 2016 Volume 17 • Issue 2 Publisher

John Paul Galles x102 jgalles@greatercharlottebiz.com

Associate Publisher/Editor Maryl A. Lane x101 mlane@greatercharlottebiz.com

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Account Executives

ING

How to Be

SEEN Want More Eyeballs? It’s all about that mix—the marketing mix.

From print to email to mobile, top marketers combine channels to provide a consistent customer experience regardless of channel used.

Here’s some data every marketer should know: 25% of marketers say direct mail or print ads are the channels most likely to be combined with email 61% of marketers boosted investment in lead-nurturing mailers in 2015 4% of marketers cite multichannel as

an essential skill for marketers

45% of marketers are increasing mobile spending this year 7.6% response rate for print + email campaigns 6.0% response rate for print-only

campaigns

$1.2 billion increase in spending on U.S. direct mail marketing in 2015

Integrating Multichannel—Percent of marketers integrating multiple channels into their campaigns in 2014: 38% using three channels 29% using four channels Prioritizing Multichannel—Percent of chief marketing officers who prioritize the multichannel experience: 71% at high-growth companies 41% at low-growth companies

Charlotte Biz combines local print, direct mail, email and mobile solutions for your sales campaigns!

46% of consumers use mobile exclusively when researching online

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56% of consumers read the postcards that come in the mail

Call us now!

704-676-5850 x102 or email jgalles@greatercharlottebiz.com.

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• General: info@greatercharlottebiz.com. © Copyright 2015 by Galles Communications Group, Inc. All rights reserved. The information contained herein has been obtained from sources believed to be reliable. However, Galles Communications Group, Inc. makes no warranty to the accuracy or reliability of this information. Products named in these pages are trade names or trademarks of their respective companies. Views expressed herein are not necessarily those of Greater Charlotte Biz or Galles Communications Group, Inc. No part of this publication may be reproduced or transmitted in any form or by any means without written permission from the publisher. For reprints call 704-676-5850 x102.

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OF INTEREST: Focusing on the Needs of Privately Held Middle-Market Companies

MARKET VOLATILITY: KEEPING THE GLASS HALF

FULL IN THE ECONOMY, STOCK MARKET AND LOCALLY

U.S.

stocks just completed an astounding round trip between the worst performing opening days of the year ever, which erased nearly $1.5 trillion of market value in the first 10 trading days, to the largest quarterly comeback since 1933. Catalysts for the initial sell-off were plentiful, but the primary drivers were a continuation of downward price action in commodities and a broad reevaluation by investors of how much risk they were really taking in the financial markets.

Will commodity-dependent emerging markets drag down growth in the global economy? The questions were bountiful, and markets dropped precipitously. Until they didn’t.

As has happened so many times before, just as the pundits on CNBC began yelli n g t h at 2008 was here again, U.S. equities staged one of the best quarterly comebacks in stock market history. One important factor in this recovery has been an increase in the price of oil, as well as global central bankers who seem reluctant or unable to let their collective feet off the economic gas pedal. The stabilization of commodity prices in particular led to greater investor confidence in not only commodity companies, but also the financial institutions that supply them with capital.

For wealth managers engaged primarily to manage risk for their clients, recognizing the risks that sustained lower commodity and oil prices present, the U.S. economy is a huge beneficiary as consumers have more discretionary cash to spend. Look around Charlotte and you will certainly see restaurants full, shopping malls of eager buyers and on many a corner a new apartment building being built.

Corporations are also at an inflection point where they can no longer afford to cut expenses only to plow money into stock buybacks.

Wage gains have been muted, but competition for labor in many sectors is heating up. Companies have the cash to spend and will need to do so if they have any intention of remaining competitive. We are seeing that in our local market as well. In 2015 our Queen City averaged year-over-year employment growth of 3.5 percent, adding an average of 3,000 net new jobs per month with 2016 off to a good start.

So keeping the glass half full and embracing volatility when it comes your way can be a good strategy. Even though it may feel like the worst times to get into the market in many cases they prove to be the best.

Steps To Take During Volatile Markets Have a strategy and stick to it. Work with a wealth management firm that provides a focused investment discipline concentrating on diversification, long-term holding periods, tax sensitivity and riskadjusted returns.

Why to stay invested in stocks during volatile times ...

Subsequent 5-Year Return

Great Depression

367%

May 1932

Contributed by

Severe Recession

267%

July 1982

Most dramatic Fed tightening in past 20 years

251%

December 1994

Great Recession March 2009

178%

U.S. stock market returns represented by total return of S&P 500 Index.

Past performance is no guarantee of future results. It is not possible to invest in an index. First three dates determined by best five-year market return subsequent to the month shown.

Sources: Ibbotson, Factset, FMRCo, Asset Allocation Research Team as of March 31, 2015

 Do not try to time the market. Attempting to time the market can be costly. If you invest on a regular basis you can actually benefit from volatile markets through a process of dollar cost averaging.  Avoid media overload. Bad news is always easy to find. With all the noise we get on a daily basis, this can lead to reactionary decisions that can be costly. Stay focused on the longer term, be confident in the plan you have put in place.  Don’t try and manage volatility on your own. Seek a professional advisor that can help you focus on your goals, objectives, financial circumstances and risk-taking capacity.

Rasile

The opinions voiced in this article are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which investment(s) may be appropriate for you, consult a financial advisor prior to investing. All performance referenced is historical and is no guarantee of future results.

Content contributed by GreerWalker Wealth Management LLC, founded in 1997 as the wealth management affiliate of GreerWalker LLP, the largest certified public accounting firm founded in Charlotte. We are a Registered Investment Advisor offering comprehensive financial services and are committed to helping clients achieve their long-term life and financial goals. Content written by Donna L. Rasile, Senior Manager.

For more information, contact Donna at donna.rasile@greerwalker.com or 704-3538281 or visit www.GreerWalker.com

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charlottebiz.com | march/april/may 2016

bits

OF INTEREST: Thought Leadership

THOUGHT LEADERS are the informed opinion leaders and the go-to people in their field of expertise. They are trusted sources who move and inspire people with innovative ideas; turn ideas into reality, and know and show how to replicate their success.

CAN THE U.S. AFFORD TO END ITS GLOBAL LEADERSHIP ROLE?

TURNING AROUND A SUCCESSFUL COMPANY

The economic, political and security strategy that the United States has pursued for more than seven decades, under Democratic and Republican administrations alike, is today widely questioned by large segments of the American public and is under attack by leading political candidates in both parties. The Washington Post opinion argues that the price of ending our engagement would far outweigh its costs.

TRANSFORMATION IS ESSENTIAL Readiness for transformation is essential in today’s highly volatile business environment.

Even an organization at the top of its market must be poised for change if it hopes to stay ahead. BCG offers insights to transform mindsets, reimagine business and meet the competitive challenges of the future.

RETHINKING THE RULES OF REORGANIZATION

TRAPS THAT BLOCK TRANSFORMATION The need for transformation has never before been more keenly felt in the corporate world. Why do companies that lose their relevance find it so tough to recover? In this classic presentation, HBR discusses traps that can block corporate transformation—logic, continuity and leadership.

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There’s something heroic about a CEO who parachutes into a company that’s facing an existential threat. But how can the leader of a successful business reset the direction and re-energize the organization before a crisis hits? Every situation is different, but BCG presents some elements that cut across many of those who succeed. There’s something heroic about a CEO who parachutes into a company that’s facing an existential threat. But how can the leader of a successful business reset the direction and re-energize the organization before a crisis hits?

Every situation is different, but BCG presents some elements that cut across many of those who succeed.

McKinsey offers some unconventional advice on how consumer companies can get the most out of an organizational redesign—how they can capture and sustain the impact of their cost-cutting and restructuring efforts. Part of the answer lies in jettisoning widespread but outdated beliefs about organizational redesign. In fact, in many cases, companies would be better off doing the opposite of what conventional wisdom tells them to do….

URBAN WORLD: THE GLOBAL CONSUMERS TO WATCH

MOORE’S LAW RUNNING OUT OF ROOM

Dramatic demographic shifts are transforming the world’s consumer landscape. The latest report from the McKinsey Global Institute finds that nine groups will generate three-quarters of global urban consumption growth to 2030, and just three of these will generate half of consumption growth and have the power to reshape global consumer markets over the next 15 years.

For decades, the computer industry has been guided by a faith that engineers would always find a way to make the components on computer chips smaller, faster and cheaper. According to The New York Times, chip scientists will soon be manipulating material as small as atoms, so they may bump into the boundaries of how tiny semiconductors can become.

march/april/may 2016 | charlottebiz.com

OF INTEREST: Managing Your Digital Assets

STARTING SIMPLE; GETTING TO THE ROOT OF YOUR GOALS

TAKING ACTIONABLE STEPS FOR REVENUE GENERATION

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F

he consumer’s path through the digital landscape of a growing internet is becoming clearer, but is still a relatively new journey.

One thing is no longer deniable: As the internet has invaded our pockets and engaged our fingertips, suddenly information is available anywhere, anytime.

Furthermore, the consumer is using mobile devices and internet capabilities throughout the buying experience, reading reviews and seeking advice from friends on social networks.

Here is an illustration. When MapQuest and other mapping websites first became popular, consumers would research a business they wanted to visit, map the address, print out the route instructions and venture out into the world, hoping that the information was correct.

Just a few years later, the consumer Googles the business, clicks on the knowledge graph, and the map showing its location and leading us to it travels with us in the form of GPS apps, seamlessly.

And with that initial click comes a wealth of even more information. For example, the business’s closest competitors, the business’s hours or whether an item is in stock, or comparative prices of services/merchandise both online and in local stores. Local search has gone from the desktop to mobile faster than anything else.

The takeaway? Getting found online used to be the key to online success; now it is only part of the process.

There is a lot of noise on the internet right now. It seems everyone with a blog is a digital marketing expert, filling Google search and Twitter feeds with “5 Best Ways to Do This” and “10 Ways Not to Do That.” It is easily overwhelming; very few are actual experts. You might find yourself feeling that there is almost no time in between reading advice articles to implement any information consumed.

There are definitely qualified digital marketing experts that you can read, follow and trust. You will know an expert by the amount of data they have collected and show off in their writings to back up their theories and ideas. Consume as much information as you want from as many sources as possible, but always remember it will apply to your business differently than it did to theirs. Your business is unique and should be treated as such.

Here is the single piece of expert advice to begin with: Start simple.

Forget about technical. Forget about digital. Forget about mobile, desktop and Google.

Think about your customer. Think about your goals.

Example: Is being No. 1 on Google your goal? Or is it getting more customers and growing your business? Probably the latter. The former is just a step in the process.

When you get to the root of your digital marketing goals, the strategy shifts towards a personalized consumer experience from a robotic solution designed and written to please search algorithms.

rom when you build your website for your user to when you write your blog posts for your readers, the paradigm shifts. Suddenly your website changes from an online brochure to a revenue-generating online asset for your business.

So let’s break that down into several actionable steps so that implementing this advice is as easy as reading it.

1. Figure out where you are starting from. Search online for your business name, click through your website on desktop and mobile, see what people are saying about your business online. Do you like what you see? Do you get a sense of a consistent brand message across all of your online assets? Was it easy to use your website on your phone and tablet?

2. Think about your buyer profile and typical website user.

Where are they when using your website? At home? At work?

In the car? In your store? Brainstorm ways you can make this experience better for them (faster, easier, more value).

3. Look at the way your website visually displays “Contact Us” in your main navigation. Does it look the same as the rest of the menu? Or does it stand out? Consider making it stand out with a different color or look. This simple edit has the potential to increase leads and conversions on its own.

4. Pop open your social media pages (hopefully your business has them.) Keep Facebook, Twitter, LinkedIn and several others open in a few tabs and just click between them. Are you seeing a unified brand? A consistent message? It would not take a graphic designer very long to create a set of profile images to give your business a consistent professional visual appeal.

5. Take queues from the world’s biggest brands. They have whole teams of the best marketers in the world working for them. Watch how they present brands in commercials, magazines, online. Listen to the messaging. You will notice them creating more value online than just having a website–with off-site blogs, online tools, high value social media feeds. With consumers as smart as they are, and with an overload of online resources to choose from, how does your business stand out? Think about creating more value with your online assets.

Also note that the longer you can get people to stay on your website, the more pages you can get them to click through, the better.

Google measures both as the amount consumers trust the information they are finding on your site. If they leave right away (“bounce”) your page may be viewed as an inferior resource to one that encourages readers to click on links, watch videos, read the next article in a series, fill out a form, etc.

Content contributed by Possible Web, Inc., a digital consulting group founded in 2012 offering productized digital consulting services to businesses of all sizes.

Content written by Patrick Scully, co-founder and creator of the firm's innovative inbound marketing programs. For consulting contact him directly at 704-5945796 ext. 702 or by email patrick@possibleweb.com or for more information visit possibleweb.com.

Contributed by

Po s

Po ssibleweb

Scully

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charlottebiz.com | march/april/may 2016

GLOBAL LEADERS SEEK CHARLOTTE BUSINESSES Ambassadors, Diplomats and Distinguished Leaders See Charlotte as Entry to U.S. Domestic Market Charlotte is home to over 1,000 foreign-owned companies that have chosen to do business in the United States. Not only do international businesses benefit from the camaraderie of other foreign-owned firms, they also benefit from the support mechanisms this community provides to help them acclimate and thrive.

WACC President and CEO L.J. Stambuk

The World Affairs Council of Charlotte (WACC) is a very integral mechanism in that regard. As a regional center for education and discussion of world affairs, the Council seeks to provide leadership for global thinking, believing that a broad perspective is necessary for effective competition in the global economy and for responsible citizenship in an increasingly interdependent world.

PROGRAM HIGHLIGHTS

ENERGY 2016: Big Data, Big Compute, Big Analytics... and Big Opportunities Thursday, June 2, 2016 Director of Global

Energy Practice SAS Join the World Affairs Council of Charlotte’s Global Energy Series with E4 Carolinas on Thursday, June 2, 2016, as they host Tim Fairchild, Director of Fairchild Global Energy Practice at SAS. Fairchild will share his insights into global and national trends changing the energy sector and analytics.

Fairchild is the Director of the SAS Global Energy Practice. In this role he leads a team responsible for developing global product strategy and defining and delivering marketdriven offerings for the energy industry. His team works closely with global customers, alliance partners, and SAS Research & Development to ensure that SAS Energy solutions meet the needs of the market.

Fairchild represents SAS on the Board of Directors of the Research Triangle Cleantech Cluster which works to expand the Research Triangle region’s potential in smart grid, advanced transportation, water technologies, renewable energy and energy efficiency by bringing together the collective power of industry, government and academia.

Fairchild joined SAS in 2002 and his experience at SAS includes Product Management, Sales and Business Development, and Solutions Architecture. Prior to joining SAS, Fairchild spent over 20 years in the technology industry at IBM, Compaq, Hughes Simulation Systems, and Texas Instruments.

Corporate Membership and Support: Will You Invest in the World Affairs Council of Charlotte?

• Learn about international affairs from foreign government/state officials, renowned authors, and world leaders.

• Build professional networks through Council events.

• Support international education in the Charlotte community.

• Increase corporate publicity through program and education sponsorships.

• Reach out to sophisticated and high level individuals in the Charlotte community.

• Build, maintain and strengthen client relationships.

For more information regarding Corporate Membership with the World Affairs Council of Charlotte, please contact Charlotte Klopp at cklopp@worldaffairscharlotte.org or 704-697-7759.

World Affairs Council of Charlotte Upcoming 2016 Programs April 23 - May 8 ....World Affairs Council of Charlotte “Journey of a Lifetime through Vietnam, Cambodia and Thailand” May 12 ..................WACC and the Charlotte Business Journal Private Reception with the Czech Delegation to the U.S. May 19 ..................TMS Global Social: International Fun Run at Triple C Brewery June 2 ...................WACC Global Energy Series: WACC and E4 Carolinas present Tim Fairchild, Director of Global Energy Practice, SAS June 15 .................WACC Annual Meeting July-August ..........WACC Programming Break

www.worldaffairscharlotte.org

OF INTEREST: Navigating Every Phase of New Business Development

THE TARGET MARKET PARADOX:

NARROW FOCUS FILLS PIPELINE WITH BETTER LEADS

D

id you ever think you might be trying to sell to too many people? I know it sounds odd—as a sales pro, you’re programmed to sell your product to as many people as possible. It’s a fundamental tenet of business growth.

But the fact is, when you try to sell to too many people, you end up with fewer sales and fewer long-term clients.

It’s called the Target Market Paradox—and it’s one of the most common (and most crippling) mistakes in lead generation.

More Prospects Don’t Always Equal More Sales As a business database and prospecting tools provider, we know a thing or two about the importance of a defined target market.

Because a database can contain tens of thousands of listings, users are immediately challenged by which prospects to target.

Rather than letting loose to sell to every prospect in the database, it is usually best to work with a narrowly defined target market of only the best prospects.

You might ask: Why encourage such a limited approach? The answer is that, far from limiting the client’s business development efforts, a defined target market creates a direct path to more appointments and sales.

To understand why, consider the consequences of casting too wide a net:  Sales and marketing strategies that lack focus.  Too many “low-value” prospects (prospects unlikely to agree to an appointment, make a purchase, or renew) clogging up the funnel.  Limited referral opportunities due to lack of clarity about who you’re selling to.

Here are a few steps to help you create an ideal target market allowing you to pursue leads that are likely to reward you with years of sales.

Look at Your Existing Client Base To shape your target market, start by looking at the clients you already have.

Are all of your client relationships equally rewarding? What are the demographics and psychographics of your most profitable clients?

Some customers, often the large and unprofitable ones, may be more trouble than they are worth. Others with a respected brand may give you instant credibility.

Use your existing client list as a blueprint—it’s the first step in the process of separating high-value opportunities from lowvalue time-wasters.

Define Your Ideal Client Your current client list provides a road map, but you need to dig a little deeper to find your ideal target market.

After all, you’re not looking to sell to your current clients— you already did that. You’re looking for “hidden” prospects, many of whom may not know about you or what you offer.

Once you’ve analyzed your current client demographics, ask yourself the following questions, then use the answers to define your highest-value prospects.  What common challenges do my clients and prospects face?  What objectives do they share?  What other industries or companies might have these same challenges/objectives?  What’s missing? What industries/companies do I want to sell to that aren’t represented on my client list?  Why do I want to sell to these companies? Do they really represent my ideal prospect?

The Problem with Everyone Even if you think you sell to “everyone,” defining your ideal target market is still important.

Imagine you are asked for a referral and told, “I can work with everyone who needs my product.” Who comes to mind? Chances are you’d struggle to come up with anything promising.

What if instead you were asked for “serial entrepreneurs in the technology arena located in your city.” Your mental picture becomes clearer.

And that’s the fundamental point—your target market isn’t just a list of companies. It’s a living template that you use to generate leads and qualify prospects in real time, and that you continuously refine based on what’s working and what isn’t.

It is important to make sure that your business database and prospecting tools provider assist you in defining your target market appropriately and offer the resources that will enable you to identify your high-value local prospects.

Follow these pointers and you’ll see why a narrowly focused target market increases your potential for better leads, more appointments, and rewarding client relationships.

Content contributed by Business Wise, Inc., helping businesses navigate every phase of the new business development process by combining trustworthy business and local contact databases with powerful prospecting tools for the Atlanta, Charlotte and Dallas-Fort Worth areas. To get a snapshot of how many high-value local prospects you may have, visit www.businesswise.com/resources and start the “Target Market Planner.” For more information, contact Vicky Ray Pace, Area Manager—Charlotte Office, at vicky@businesswise.com or 704-554-4112 or visit www.BusinessWise.com.

Pace

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charlottebiz.com | march/april/may 2016

SLK-LAW.COM

Seamless Integration of Expertise Yields Synergies of Service

involved

evolved by jim froneberger

T

he law firm of Shumaker, Loop & Kendrick believes effective legal solutions come from fully understanding clients’ goals, visions, challenges, and obstacles, and knowing how to design answers that align with their values and culture. These solutions require nimble representation that quickly discerns the important issues from the inconsequential across a wide spectrum of business and legal disciplines.

Originating in Toledo, Ohio, over a century ago, Shumaker is a full-service business law firm and one of the 250 largest in the U.S., with five offices from Ohio to North Carolina to Florida. As its Charlotte office demonstrates, Shumaker’s emphasis on the seamless integration of expertise yields synergies of service for its Shumaker, Loop clients. & Kendrick

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charlottebiz.com | march/april/may 2016

players

team

community

support

invested in

individuals

Shumaker's Firm History

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Then, in the mid-’80s, when one of the firm’s partners became the CEO of a national company based in Tampa, it was a logical evolution to build a presence in the fast-growing Sun Belt, alongside its surge in manufacturing expansion. So, in 1985, Shumaker opened a Tampa office.

Recognizing the population growth in the Southeast region, and rapidly expanding growth of manufacturing along the I-85 corridor in the Carolinas, when one of Shumaker’s Ohio clients opened a plant in North Carolina, the firm decided to open a Charlotte office in 1988.

A decade later, the firm added a Columbus office to its Ohio service area, and the following decade a Sarasota office to its Florida service area.

Today the fi rm has over 245 attorneys, 60 paralegals and 500 employees firm-wide.

march/april/may 2016 | charlottebiz.com

custom

solutions

the complex

simplifying

The Charlotte office, just recently moved from First Citizens Bank Tower to Bank of America Plaza, boasts 35 attorneys and 75 total employees, with deep resources and support from its other offices.

“Our firm’s culture is still deeply grounded in its Midwestern, straight-forward, nononsense work ethic,” confi rms Shumaker Charlotte partner Warren P. Kean. “We credit much of our growth and success on the foundation of high quality service and community involvement that was begun in Ohio, and seek to build on that in our legal practice here in the Carolinas as well as with our community involvement in Charlotte.”

Manufacturing, Construction and Mid-Market “We serve many industries and practice areas,” comments Shumaker Charlotte partner David H. Conaway, “but what we think makes us stand out is our presence in the manufacturing sector, our presence in the construction sector, and our presence in the mid-market sector (companies with revenue ranging from $10 million to more than $500 million). Manufacturing, construction, and mid-market companies are really the heart and soul of Charlotte.”

Conaway specializes his practice in the manufacturing sector, regarding bankruptcy and insolvency, commercial litigation and contracts.

“We started out representing textile companies, and that’s how we began in the manufacturing sector,” Conaway explains. “We did a lot of insolvency work, representing creditors in bankruptcy cases. When I first came to Charlotte, in Chapter 11 proceedings you either represented the banks, or you represented the debtors, or you represented the vendors in the supply chain that provide goods and

We not only get to know your business, we immerse ourselves in your industry. Only then can we provide insightful solutions perfectly matched to your corporate DNA.

Strong client support lies at the foundation of everything we do. It forms the cornerstone for building lasting, mutually-beneficial relationships.

solid

strategies

tightly woven

services to a company. We decided to focus on the vendor community.

“As the textile industry has declined, we have branched out to other industries, and that’s very complementary to what we do in Ohio,” Conaway continues. “Our Ohio office started out representing suppliers to the auto industry, so it was a natural fit. So now we represent manufacturing companies on anything having to do with their customers or anything having to do with their supply chain. It’s very often a crisis situation or a distress situation. It’s problem solving.”

As a rapidly growing Sun Belt city, Charlotte has long been a city driven by development. As a result, Shumaker’s construction law practice has been a key to their success here. They can represent any participant in the construction industry—from the time the land is purchased through negotiation of the contracts, through the construction process, project close out, final payment, and dispute resolution.

Charlotte native Steele B. “Al” Windle III

(clockwise from bottom) Steel B. ("Al") Windle, David H. Conaway, Warren P. Kean, Partners Shumaker, Loop & Kendrick, LLP

foundation

“Our firm’s culture is still deeply grounded in its Midwestern, straightforward, no-nonsense work ethic. We credit much of our growth and success on the foundation of high quality service and community involvement that was begun in Ohio."

“Clear, concise information shared frequently… Engaging interaction between brokers, counselors and clients providing meaningful strategies to best serve client needs.”

Charlotte, NC Office

is a partner in the firm’s Charlotte construction practice and is a graduate of Wake Forest University School of Law. After working for four years at a firm in Atlanta focusing on construction law, he returned home to Charlotte where he practiced solely in construction law for 15 years at another firm before joining Shumaker.

“We have a very strong construction law practice representing owners, architects, engineers, contractors, subcontractors, suppliers, and all aspects of the construction arena,”

touts Windle.

“We represent many different size companies from very large to small on all types of commercial construction projects. However, our target market is the mid-level construction companies that are privately-owned and have anywhere from $10 million to $250 million in annual revenue. These companies are typically headquartered in or near Charlotte, but they do work wherever their clients take them.

If one of our clients has a project

somewhere else in the country, we will go there to handle their legal needs. For example, we have handled cases for our clients in Bangor, Maine, Dugway, Utah, Gulfport, Mississippi, and Key West, Florida. We handle everything from negotiation of the contracts to project close-out and resolution of claims and disputes by negotiation, arbitration or litigation.”

Kean is part of the Charlotte business practice that focuses on middle-market companies

Shumaker Work Life Balance

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Treat guests like family, serve great food, and always exceed expectations.”

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charlottebiz.com | march/april/may 2016

5 LOCATIONS: Charlotte, NC Office

500 240 60

Toledo Columbus Charlotte Tampa Sarasota

EMPLOYEES ATTORNEYS

PARALEGALS

Shumaker is Involved

14

and their owners.

He ca me to Shumaker two years ago after spending his prior career with very large international law firms in New York and Charlotte because his passion is representing growing, mid-size companies for which Shumaker is a perfect fit.

“If the company has in-house counsel, we help service their needs,” he explains, “but more often, we’re dealing with substantial companies who do not have a legal department of their own. These companies rely on us to respond to the wide range of legal issues they encounter in operating and growing or selling their businesses.

“We are very much involved in financing, mergers and acquisitions, and other commercial transactions. We also bring to bear the expertise of our other lawyers as needed, including excellent litigators, to help prevent or resolve claims and disputes involving our clients.

“Then, there are the specialty legal services areas that businesses need,” continues Kean. “Employment law, employee benefits, intellectual property, data protection, franchise law, real estate and environmental law, and tax and exit planning, to name a few, are critical needs that we regularly service. This might be in conjunction with a transaction, in connection with some litigation matter, or arise on their own. For example, our employee benefits practice has been very busy with the Affordable Care Act in getting our clients up to speed as that evolves and impacts companies.”

march/april/may 2016 | charlottebiz.com

Globalization and Other Trends Increasing globalization continues to impact businesses of all sizes, and Shumaker is no exception. In addition to domestic clients who have cross-border business activities, an increasing amount of their legal work, partic-

“A lot of our lawyers have had opportunities over the years to interact and do cross-border work. They now know the lawyers abroad, so we organize all of those relationships. We have excellent overseas relationships including in Canada, Mexico, Central America, Brazil, and throughout Europe.”

ularly in the manufacturing practice, comes from foreign companies that have their U.S. headquarters or other significant operations in the U.S. and Charlotte area.

“It seems like almost every client touches something outside of the country, even if it’s just a supplier,” says Conaway. “We also have clients that are exporting, so globalization is huge.

If, as a lawyer, you don’t have some kind of global capability, I think there are a lot of missed

opportunities to add value for our clients.”

In response to these globalization trends, in lieu of establishing a brick and mortar presence abroad, the firm is developing Shumaker Global, a series of alliances that will allow it to serve its clients’ cross-border needs. “It’s evolving, but we made a conscious decision that we needed to have global capability,” states Conaway.

Many domestic law fi rms establish alliances with an international law group, but Shumaker decided to take a different path.

It elected to slowly develop its own alliances based on the relationships that its lawyers have developed over the years with law firms around the world.

“A lot of our lawyers have had opportunities over the years to interact and do cross-border work,” explains Conaway. “They now know the lawyers abroad, so we organize all of those relationships. We have excellent overseas relationships including in Canada, Mexico, Central America, Brazil, and throughout Europe.”

“These are truly relationships that we have developed,” he continues. “We invest in them. We get to know them. We work with them. We add value for each other’s clients.”

In addition to globalization, Shumaker’s clients are feeling greater and greater pressure from investors to maximize profits. That impacts every aspect of their business.

“It seems like Wall Street and private equity funds are having a much greater say in how companies are run,” admits Conaway.

“We see a lot of companies that sell business units just because some shareholder in New York has told them to. As a lawyer, you have to understand that. You have to understand what is driving them and what

“The middle has more or less been hollowed out, and that’s where Shumaker’s focus is. With 245 lawyers, we’re able to provide full service to businesses and business owners, and that remains our core focus.”

pressures they’re under.”

Somewhat surprisingly, in the wake of the 2008 financial crisis, Chapter 11 bankruptcy cases have declined significantly nationally, principally, Conaway says, because lenders stopped providing debtor-in-possession financing. With near zero interest rates, companies could perform poorly and still get by, and on top of that, lenders kicked the can down the road because they didn’t want to write off bad loans against their capital reserves that were being closely watched by the Fed. Instead of bankruptcies, there have been a lot of work outs. Conaway thinks that is going to change over the next couple of years.

“From 2008 through 2011, the loans kind of stopped,” he observes. “Then they started making more loans, so now is about the time the loan cycle comes back and covenants are being breached. I’ve seen it before. It’s just a matter of when it hits.”

Finding the Sweetspot: Relationships Shumaker, Loop & Kendrick has a very decentralized management and operating structure. The firm is managed by an executive committee made up of managing partners from each office. Most of the administrative and accounting staff is located in Toledo, but some key marketing and IT staff are located in other offices.

Shumaker is really organized by practice area, and with offices in three states, the firm can call on specific legal expertise, regardless of where the attorney is located.

“As an example, we have an excellent lawyer in Toledo who is a whiz on insurance for the construction industry,” explains Windle.

“Whenever we have an issue involving insurance coverage, we get him involved and he comes down here. He’s even tried cases in the federal court here in Charlotte.”

“We’re at a size where we generally know

everyone,” adds Kean. “We know who to call, and it doesn’t make any difference whether that person is in the office next to mine or in Columbus or in Tampa. I know where the expertise is.”

Shumaker fills an important niche between the large mega firms that may have 1,000 or more attorneys and the smaller, more entrepreneurial firms with 10 or fewer attorneys.

“We’ve seen a lot of consolidation and a number of larger firms have grown substantially. As a result, their focus is now on a different client base,” remarks Kean. “On the other hand, the smaller firms simply don’t have the capability to provide that full range of services that our core clientele need and demand.

“The middle has more or less been hollowed out, and that’s where Shumaker’s focus is. With 245 lawyers, we’re able to provide full service to businesses and business owners, and that remains our core focus.”

“The basis of our practice is relationships,” concludes Windle. “I’ve been practicing for over 30 years, and we still represent some of the same people from when I first started.

We try to not only be a lawyer and a businessman—but maybe a little bit more than that, if only just a friend. It’s a relationship.”

te t a ra t h a l l p a e w of n o s ho Tw ces s half ac t o ) . ur an s o re t h ( 5 4 % a d s e s o n m der azi re a m a g

e es are th Magazin t performer n te onsis MOST c rchase funnel. u in the p

Jim Froneberger is a Charlotte Biz freelance writer. Some images provided by the firm.

Shumaker, Loop & Kendrick, LLP d/b/a Shumaker Charlotte Office 101 South Tryon St., Ste. 2200 Charlotte, N.C. 28280 Phone: 704-375-0057 Principals: Scott M. Stevenson, Charlotte Managing Partner; David H. Conaway, Warren P. Kean, Steele B. “Al” Windle III, [Representative] Partners In Business: Since 1925 Offices Established: Toledo, Ohio (1925); Tampa, Fla. (1985); Charlotte, N.C. (1988); Columbus, Ohio (1998); Sarasota, Fla. (2009) Personnel: 35 attorneys and 75 total employees in Charlotte; over 245 attorneys, 60 paralegals, and 500 employees firm-wide Recognition: Am Law 200 and National Law Journal Top 250 law firm; 114 AV Peer Review Rated by Martindale-Hubbell; 28 Board Certified Attorneys, 16 Certified Mediators and Arbitrators, 82 Best Lawyers in America; 53 Super Lawyers and Rising Stars Business: A full-service business law firm with specific expertise in the manufacturing, construction and mid-market sectors. www.slk-law.com

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charlottebiz.com | march/april/may 2016

HELLO, Neighbor

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march/april/may 2016 | charlottebiz.com

BERKSHIRE HATHAWAY HomeServices

Carolinas Realty: A sign of good things to come

O

Berkshire Hathaway HomeServices

f all the events that take place in someone’s life, one of the most important and exciting milestones is buying a home, especially if that home is their first.

For most people, a home is not only their single largest financial asset, but it’s also where they raise their families and where life-long memories are made. Our homes, in so many ways, reflect who we really are.

But, by the same token, buying a new home or selling an existing home can be a daunting and stressful time in a family’s life, especially if it coincides with a job change or relocation to a new city.

by jim froneberger

charlottebiz.com | march/april/may 2016

Buying or selling a home represents a huge investment of time and money, and involves a long list of tasks that most people just don’t do very often. Helping guide a fam-

is a subsidiary of HomeServices of America (HSA), the second largest independent residential real estate brokerage firm in the United States. An affiliate of Warren Buffett’s

with Prudential franchisees in the Triad and Triangle to form a real estate company with a presence spanning North Carolina’s three most dynamic markets. In the spring of 2004, HSA acquired Prudential Carolinas Realty.

Just over seven years ago, Prudential Carolinas Realty acquired York Simpson Underwood, one of the leading real estate

(l to r) Stephanie Rhodes, Charlotte Regional Executive; Cecily Durrett, Director of Relo. and Bus. Dev.; Thomas W. Camp, President and CEO Berkshire Hathaway HomeServices Carolinas Realty

18

ily through the home buying process is the job of a licensed Realtor, a real estate professional with the knowledge and experience needed to navigate the sometimes imposing world of buying or selling a home.

With one of the most trusted brands in the world and a set of values focused on building strong client relationships, Berkshire Hathaway HomeServices Carolinas Realty has been helping families in the Charlotte region find their dream home for over 36 years now.

An Admired and Respected Brand Berkshire Hathaway HomeServices Carolinas Realty (BHHS Carolinas Realty) march/april/may 2016 | charlottebiz.com

Warren Buffett’s operating model has always been to acquire solid companies with strong leadership and significant market share and let them continue to operate as they always have and continue to grow and prosper. That is basically our philosophy as well.”

Berkshire Hathaway, Inc., HSA was founded in 1998 when Berkshire Hathaway acquired two leading real estate brokerage firms in Iowa and Minnesota. After a series of subsequent acquisitions, HSA now owns over 30 subsidiary brokerage firms in 19 states.

BHHS Carolinas Realty traces its roots all the way back to 1979 as Wightman Helms, a Charlotte-based real estate company started

by Muriel Helms, the first woman chairman of the Charlotte Chamber of Commerce.

After signing a franchise agreement with the Prudential Real Estate affiliates network, Wightman Helms became Prudential Carolinas Realty, later merging

firms in the Raleigh-Durham-Chapel Hill market. York Simpson Underwood had been operating in that area since the early 1970s and had an outstanding reputation and brand in the marketplace. In order to leverage the existing brand equity, all of the Triangle area offices of the combined company began operating as York Simpson Underwood.

Then five years ago, Prudential Carolinas Realty acquired Yost and Little Realty, the leader in the upper-tier home market in Greensboro. Yost and Little had operated in the Greensboro area since 1928, so they also retained the Yost and Little name for that market.

“Warren Buffett’s operating model has always been to acquire solid companies with strong leadership and significant market share and let them continue to operate as they always have and continue to grow and prosper,” says Thomas W. Camp, president and CEO of BHHS Carolinas Realty. “That is basically our philosophy as well.”

HSA also acquired several other Prudential franchisees around the country, eventually becoming the largest Prudential franchisee in the United States. So when Prudential Financial decided to exit the real estate brokerage business, HSA acquired the entire Prudential Real Estate affiliates network. All of the old Prudential affiliates—including hundreds of independently-owned Prudential franchisees—became Berkshire Hathaway HomeServices beginning in September 2013.

“I really believe that our Berkshire Hathaway brand gives us a distinct advantage in the market,” says Camp. “Berkshire Hathaway is number three on Barron’s list of the world’s most respected companies, and it is the number three company on Fortune’s list of the world’s most admired companies.

“The reception of our name in the market-

place has exceeded all of our expectations. It is absolutely amazing the impact that it has had on attracting sales associates, who are the life blood of our business. But it has also helped with clients, both at the corporate level for relocation business, as well as the individual home buyer and home seller.”

Today, the company does business as Berkshire Hathaway HomeServices Carolinas Realty in Winston-Salem/Kernersville and Charlotte, as Berkshire Hathaway HomeServices Yost and Little Realty in Greensboro, and as Berkshire Hathaway HomeServices York Simpson Underwood Realty in Raleigh-Durham-Chapel Hill-Cary.

But all three markets are consolidated as a single corporate entity with a consolidated management structure. They were recently recognized as the 11th-ranked Berkshire Hathaway HomeServices company in the country.

The company has 13 offices in North Carolina with over 790 sales associates.

BHHS Carolinas Realty has three offices in Mecklenburg county—SouthPark, Ballantyne, and Lake Norman—with over 160 sales associates serving the Charlotte region.

A Value-Driven Relationship-Based Business According to Camp, the company’s tag line—“We make great neighbors”—is more than just a catchy phrase. It is truly their vision of who they are as an organization. They strive to have a meaningful impact on the neighborhoods and communities they serve.

“We live by four key values,” he explains.

“Number one, we are committed to exceeding expectations for exemplary service and professionalism in everything we do. Number two, we build lasting relationships, based on trust and care with our clients and the communities we serve. Number three, we partner

The reception of our name in the marketplace has exceeded all of our expectations. It is absolutely amazing the impact that it has had on attracting sales associates, who are the life blood of our business. But it has also helped with clients, both at the corporate level for relocation business, as well as the individual home buyer and home seller.” with our associates to create an environment that fosters success and meaningful careers.

Finally, most importantly, we exist to redefine

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home buying, selling, and ownership by integrating all of the elements of the transaction into a seamless real estate experience.”

This seamless experience includes not only traditional real estate brokerage services, but relocation services and a whollyowned mortgage company that is the largest in-house mortgage company of any real estate firm in the country. They also have their own title insurance company and a private-branded home warranty company.

“We believe that the relationship always must come first,” continues Camp. “People do not buy or sell for our reasons, they buy or sell

20

only for their reasons. So it is really important that, in a collaborative fashion, we get to know our clients, we find out what is important to them, and we get to know what their dreams are for a home.”

The last nine years have been difficult in the real estate business, but thanks to an improving economy and the success of BHHS Carolinas Realty’s relationship-based business model, 2015 was the company’s best year since 2007.

Almost $2 billion of residential real estate was sold statewide in over 7,200 transactions, and Camp says 2016 is off to an even better start. He adds that home values have generally recovered well from the recession, with the possible exception of the higher tier above $750,000. Available inventory is still a bit tight, so values should continue to move up.

Over the last year, new construction has made up only about 20 percent of sales because builders have been a bit slow initiating new projects. But Camp says builders are now finally starting to bring new inventory to market in greater numbers, so he thinks new home sales will begin to rebound toward prerecession levels in 2016.

While the company’s average sales price for 2015 was right around $290,000 statewide, Camp says their sweet spot in Charlotte

march/april/may 2016 | charlottebiz.com

is in the $300,000 to $350,000 range. But based on the trends he is seeing in the market, he believes that the greatest growth potential is in the under $250,000 market, because that segment has rebounded more dramatically than others.

Helping Charlotte Grow BHHS Carolinas Realty’s Relocation and Corporate Services Division assists companies and families who are relocating to or from the Charlotte region. In addition to helping someone fi nd a new home or sell their existing home, the relocation team also provides group

“We believe that the relationship always must come first. People do not buy or sell for our reasons, they buy or sell only for their reasons. So it is really important that, in a collaborative fashion, we get to know our clients, we find out what is important to them, and we get to know what their dreams are for a home.”

move management services, assists with temporary housing, offers orientation tours of the area, and many other services that help people cope with the stress that surrounds a workrelated move. The relocation team also works

with local economic development officials to help recruit new companies to the Tarheel state.

“Working with relocation is a special privilege in our business, because you’re working with families who are under incredible stress,” says Cecily Durrett, director of relocation and business development. “I have 13 folks across the state who get up every day to make sure those families can focus on the right things.”

“The trends we see are clearly on the uptick for Charlotte and the rest of the state,” continues Durrett. “It is a very exciting time because companies are figuring out that

North Carolina is an inexpensive place to do business, and that the talent pool which we have in Charlotte and across the state is beyond compare.”

When a major international company was recently considering North Carolina for a headquarters move, Durrett and her team jumped into action.

“We put a team of agents together who knew the market inside and out to work with the advance team from the prospect and then with the firm’s principals who came in to learn more about the community,” recalls Durrett. “While that company ultimately chose Atlanta, in the process, we built some great relationships.”

Even though that relocation prospect went elsewhere, when their CEO learned that an old friend was also considering moving his company to North Carolina, he recommended that his friend talk to Berkshire Hathaway.

Durrett began conversations with that second company, and they are indeed planning to relocate to our state.

“My job in part is to find those companies and those individuals who are beginning to have some curiosity about what it is like to live here,” explains Durrett. “We want to find them at a time when we can be helpful and be a resource to them as they make those very

important decisions. Of course, we often do that work with terrific partners, such as the Charlotte Chamber and the Charlotte Regional Partnership.”

Making Great Realtors The centerpiece of the real estate business is the individual Realtor, so recruiting and retaining top talent is critical to the success of any real estate business. But it’s also important to be sure that the Realtor is a good fit for the company culture and shares the same values.

“We look for people that share in our values and that share in our ethics, our morals,

we can give our Realtors the support and attention to do well in the industry.”

BHHS Carolinas Realty uses their “Perfect Agent Profile” to aid in selecting the right Realtors to join their firm. They partner with a vendor that has a profile test called the “Core Capacity Index.” Over half of the existing sales associates have taken the test, so each new candidate takes this same five to 10-minute test to measure how they compare to the top performing agents. Rhodes says the test is not fool proof, but is a very good barometer of success.

“For 90 percent of the families we serve,

their home is their largest single financial asset,” concludes Camp. “It’s their home. It’s their nest. It’s their shelter. It is where their deepest relationships exist, and where their most cherished memories are made.

“So we take that very, very seriously here.

We as an organization are committed to the relationship with our sales associates, and every day we encourage our associates to focus on their relationships with their clients first.

When we get that right everything else takes care of itself.”

Jim Froneberger is a Charlotte Biz freelance writer.

Some images provided by the company.

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and our professionalism,” says Stephanie Rhodes, the Charlotte regional executive for BHHS. “I tell them right off, relationships come first and transactions will follow. Our managers are all very hands on—they are coaches—so Berkshire Hathaway HomeServices Carolinas Realty Ballantyne Office 3420 Toringdon Way, Ste. 200 Charlotte, N.C. 28277 Phone: 888-778-2276 Parent Company: HomeServices of America (HSA), a Berkshire Hathaway, Inc. affiliate Principals: Thomas W. Camp, President and CEO; Stephanie Rhodes, Charlotte Regional Executive; Cecily Durrett, Director Relocation and Business Development Employees/Sales Associates: 890 In Business: Since 1979 Offices: 13 offices across North Carolina’s three major markets as Berkshire Hathaway HomeServices (BHHS); BHHS Carolinas Realty in Charlotte and Winston-Salem, BHHS York Simpson Underwood Realty in the Triangle region, and BHHS Yost & Little Realty in Greensboro Business: Full-service residential real estate brokerage firm, also providing mortgage loan originations, title insurance services, home warranty protection, and relocation services. www.BHHSCarolinas.com

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charlottebiz.com | march/april/may 2016

The region is poised for accelerating growth for years, despite issues of new home affordability and a likely brief, cyclical recession in 2019.

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march/april/may 2016 | charlottebiz.com

Allen Tate a+ difference

WITH

ALLEN TATE KEEPS PACE MARKET TRENDS

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ow that “normalcy� has returned to the Carolinas real estate market after the Great Recession, the region is poised for accelerating growth for years, despite issues of new home affordability and a likely brief, cyclical recession in 2019.

According to Pat Riley, president and CEO of the Allen Tate Companies and a former chairman of the Charlotte Chamber, the Interstate 85 corridor between Raleigh and Greenville, S.C., continues to attract a high number of corporate transferees, from young workers to retirees, who are looking for housing.

Allen Tate Culture

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charlottebiz.com | march/april/may 2016

Historic Mortgage Rates by Decade DECADE

AVERAGE RATE

1970s

8.86%

1980s

12.7%

1990s

8.12%

2000s

6.29%

Source: Freddie Mac

Home Ownership Rate from 1990 - 2014

Source: NAR 5/2015

the Triangle doesn’t compete against Charlotte, and we don’t compete against the Upstate. We don’t have what the Triangle has, the Triangle doesn’t have what we have, and we don’t have what the Upstate has, but together, we are a compelling story to the world.”

Raleigh leads the top cities for STEM (Science, Technology, Engineering and Mathematics) graduates. On the I-85 corridor, Chapel Hill-Durham is the only area below the U.S. rate in employment growth. The Charlotte region leads in employment growth, with the arts, theater, sports, food and entertaining and institutes of higher learning, which makes it attractive for young people looking for work and a place to establish themselves.

“Young folks are not buying until they’re sure about employment,” Riley says, adding that delaying marriage is an added factor. “They will come to the Carolinas and tend bar until they find a job. We’re just like Austin, we’re just like Nashville.

“They would rather come to the Charlotte region as a single person than stay in the Triangle. They might go back to Cary when they’re ready to settle down, but the reality is we are beacon for young people right here where you and I sit.”

The region is also second only to Florida in attracting older workers and retirees.

“We know about corporate moves, but there’s another move that nobody is keeping stats on and that’s the number of folks coming here to follow grandkids and kids, and coming here for second careers and to retire. Florida is the golden egg—it still leads the country— but the reality is we are the best alternative because of our cost of living and proximity to the mountains and beaches, quality medical facilities and big city amenities.”

Recession Bigger Than In-migration

Charlotte is a Beacon

24

“Charlanta, the I-85 corridor, right now is the fourth most productive region in the United States and the 11th most productive region in the world,” Riley touts. “The 11th in the world, the fourth in the United States, the same gross output as the entire country of South Korea.”

“We don’t compete against the Triangle,

march/april/may 2016 | charlottebiz.com

Riley remarks that the population increases had made him overly optimistic about Charlotte’s resistance to recession in 2008.

“I had thought that we would not be participating in this recession,” he recalls, “that we were not ready to participate because of in-migration. Folks were coming here, 30,000 a year, right through the recession. But I was so wrong. This was much bigger than in-migration.”

Since World War II, Riley says, such bubbles in the housing market had been limited largely to the West Coast.

“All of a sudden, the roaring 2000s happened and we became part of what happens in California

every 10 years,” Riley observes. “We used to snicker, ‘There they go again.’ San Francisco is up, then the bubble breaks and then it goes back down. And we, especially on the East Coast, said, ‘We’ll never participate in that.’

Well, the whole country participated in that phenomenon this time around.”

Allen Tate Co. had $4.1 billion in sales in 2004, and $5.71 billion with 24,500 closings in 2006. The housing market was on fire.

The rapid rise in housing values, encour-

The rapid rise in housing values, encouraged partly by government efforts to increase home ownership, allowed folks to own a home that should not have.

It also led many people to borrow against their home equity at unprecedented levels. aged partly by government efforts to increase home ownership, allowed folks to own a home that should not have. It also led many people to borrow against their home equity at unprecedented levels.

“What happened is homes went up so fast that our friends in the banking industry said, ‘You know what? What do we care if we lend people’s equity back to them? What do we care? If a home is going up 5, 10, 15, 20 percent a year, what do we care? What’s our risk?’” Riley explains. “So what we had for the first time in history, we borrowed the equity in our homes for this, that and everything.”

“That was solace for our

old age. We gave that away. It was in some cases what we needed for a rainy day; we gave that away. So it was a double-edged sword because for the majority of Americans, their wealth is in their homes. It’s forced savings.

That mortgage payment? So much goes to principal, and we’re not, as Americans, good savers. That’s why the mortgage was our safety net.”

Changes in lending practices, a downturn in the stock market that made real estate a more attractive investment; and record-low interest rates fueled the perfect storm. In those heady days, among other things, Allen Tate sold 331 condominiums in five weeks in a single Charlotte development.

“This was the perfect storm,” Riley comments. “The stock market went from 19,000 down to 8.5, 9, and what did we all do? We ran. We ran from the equities and where did we run? We ran into real estate. If we were wealthy, we were down in Naples, buying two condos instead of one. International money was coming into the four corners of America because they saw appreciation of housing and said, ‘Where can we have safe money in America?’”

The recession dramatically slowed home

sales except in cases of necessity, such as death, divorce, relocation, or foreclosure, who would sell even when their homes were devalued.

“We were dancing for survival,” Riley recalls. “The only people who moved had to move.” Our company once had 51 offices—building wherever Harris-Teeter or Target identified a desirable demographic.”

We’ve consolidated to 37 offices in 2009, but since added four locations, for a total of 41 locations today across the company’s footprint in North and South Carolina.

Post-recession and Pent-up Demand The post-recession economy is dealing with pent-up demands on several fronts, including the older Silent Generation that delayed moves to downsized housing because

their longt i m e , paid-for homes’ values were depressed in recent years.

“They needed to move to assisted living or independent care,” Riley explains. “But they

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charlottebiz.com | march/april/may 2016

Patrick C. Riley President and CEO Allen Tate Co., Inc.

Allen Tate Company Sales History (company-wide) $6B

$

$5B

5.11B

$4B

IN BILLIONS

5.71B

$

$

$

5.46B

$

$ 4.10B

$3B

$

4.50B

2013

2014

5.16B

$

3.64B

$

$2B

$ 4.51B

3.44B

$

$

2.70B

2.72B

2.68B

2009

2010

2011

$1B $ 0 2004

2005

2006

2007

2008

2012

2015

Housing Styles Moving Fast  Open Floor Plans  Outdoor Components a "Must"  Technology Savvy  Neighborhood Friendly Conveniences

Home Purchases

   

Porches Connectivity Open Space Quality of Details

with a Down Payment of 3% or Less

46% 38%

2009

2010

36%

2011

32%

2012

27%

2013

25%

2014

Source: RealtyTrac

26 Market Update: March/April 2016

Market Update: May/June 2016

march/april/may 2016 | charlottebiz.com

“For the first time in history, labor for new homes is at an all-time high. We lost a lot of our construction labor, a lot of it, and it’s slowly coming back, and materials are offthe-chart expensive, and land is back at prerecession prices per acre. So new homes are now 15 to 18 percent more expensive than the same house down the street.” didn’t sell their homes, and we—as their kids— advised them not to because the homes were at the lowest values they’d ever been, so they didn’t make those moves.

“So that generation now is really active, and we as their kids should be pushing them to get to where they need to be. You can see from the facilities being built up and down our roads and highways that we are fertile ground for this type of housing.”

On the other end of the spectrum, the Millennials have delayed marriage and childbearing into their 30s, partly because of a bleak job market, high student loan debt, and the experiences of their parents’ divorces and job losses.

Millennials now make up 36 percent of the buying market, but they have been late to the dance. Historically, this age group would now be in their second or third home, not buying their first. Their delayed buying set up a nineyear gap, including the recession, before the typical pattern of a starter home followed by move-ups even began.

But the younger cohorts of this generation, in their early 20s, are making a different decision—buying a home as soon as possible.

“They’re not waiting,” Riley remarks. “They might not be in a longterm relationship; but as a single person, they’re buying. They want to get on this ownership bandwagon as soon as possible to take advantage of the appreciation that’s out there, as well as low

interest rates.”

Providing affordable housing for that market is especially challenging because of increased expenses within the industry, in addition to tighter lending requirements. Labor, materials and land are all at or near record costs. And the appraisal lag of needed comps has been a drag.

“The headwind for young adults for home ownership is as strong as it’s ever been,” Riley points out. “For the first time in history, labor for new homes is at an all-time high. We lost a lot of our construction labor, a lot of it, and it’s slowly coming back, and materials are off-thechart expensive, and land is back at pre-recession prices per acre. So new homes are now 15 to 18 percent more expensive than the same house down the street.”

Buyers have often paid premium prices because they wanted builders to provide modern features such as open floor plans, hardwood floors, outdoor living space, and connectivity, but many are now experiencing sticker shock at the price gap with older homes.

“When prices went down double-digit, what do you expect when the market gets better?” Riley asks. “They go up double-digit.

The only persons that got hurt in the recession were the people who bought in 2007 or 2008 at the peak and had to sell in 2008 or 2009.

The rest of us are back, and probably ahead unless we haven’t maintained those homes.

“Everybody’s predicting a 5 percent appreciation rate again this year. This is higher than we anticipated because historically since World War II, it’s been about 3.5 percent. So we’re still ahead of history, and that’s caused by lack of supply.

“We’ve got to get back up to that 1.5 million new home starts in America. We’re jogging; we’re not

sprinting. We can’t get the land developed quickly enough. We can’t get through the permit process quick enough, and we can’t get the labor that we need, so it’s going to lag a little bit from demand.

“Let’s be really candid. Part of the inventory shortage is because the Baby Boomers are downsizing much, much later than earlier generations.

While this will boost the condo market in the future, it’s a huge cause of lack of inventory.

Changes in lending practices, a downturn in the stock market that made real estate a more attractive investment; and record-low interest rates fueled the perfect storm. In those heady days, among other things, Allen Tate sold 331 condominiums in five weeks in a single Charlotte development.

“ We’re starting our sixyear, eight-year, 10-year trek,” Riley says. “We Boomers are much later than generations before us in downsizing, because we’re healthier and we’re living longer. We’re still out there playing and exercising and thinking that we’re in our 30s.

We’re not ready to downsize yet. We are just starting our downsize trek. That’s why the inventory gap will diminish over time. We are just slow to the draw.”

Recovery With Reservation However, many Boomers are remodeling to enjoy the upgrades now that will be necessary when it becomes time to sell, comments Riley.

“The condo market is typically the first one into a recession and the last one out.

Lenders don’t like to lend on a condo project unless 40 percent of a building is owner-occupied. A lot of these towers that are built for conversion will convert in the next couple of

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Millennials now make up 36 percent of the buying market, but they have been late to the dance. Historically, this age group would now be in their second or third home, not buying their first. Their delayed buying set up a nine-year gap, including the recession, before the typical pattern of a starter home followed by move-ups even began.

But the younger cohorts of this generation, in their early 20s, are making a different decision—buying a home as soon as possible. They might not be in a long-term relationship; but as a single person, they’re buying. They want to get on this ownership bandwagon as soon as possible to take advantage of the appreciation that’s out there, as well as low interest rates.

Number of Annual Single Family Starts 1.7M 1.3M

1.2M

years because there is a thirst for a home in the mountains or at the beach and a home here that I can lock and go visit my grandkids in whatever city they are, or to my getaway home. The future of condos is strong if they get built.”

With more than 80 percent of homeowners holding mortgages at very low interest rates, the decision to buy another house might become complicated if interests rates rise as expected.

“Never before in history have so many Americans been sitting in a home with mortgage rates of less than 4 percent. We have never had that. I don’t even know how it’s going to play out,” Riley muses.

“I hear the back-and-forth, ’Honey, we have a mortgage at 3-5/8 percent. Should we really buy this house at 7 percent?’

‘Seven is a point lower than the historic average since 1950 of 8 percent. Seven is great and we can still deduct the interest.’

‘But do we really need this extra bedroom? How big do we need this extra fireplace outside?’

“There’s going to be some discussions when you’re leaving rates under 4 percent.

It’s going to be interesting how this plays out,” Riley says, more than a little curious.

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Riley says that experts expect a cyclical recession in 2019 (similar to 1990 and 2000) as the government may have to raise interest rates to curb another inflation cycle. But it will last only about 18 months and not be in any way similar to the 4.5-year recession that started in 2008.

“What they’re figuring now is that by 2019, we are going to be in an inflation cycle again, and the only way America knows how to slow it down is to raise interest rates, slow down housing,” he explains. “Housing always goes in first. We always go in first—we’re the first one out, but we’re the first one in when it comes to a recession, and everything else follows.”

Last year, the firm had $5.16 billion in sales on 21,595 closings, the third best in its history.

Riley expects another increase of 5 to 6 percent this year.

The improvement in real estate sales is occurring even though new housing starts are still far behind pre-recession levels.

“We used to do a million and a half new homes a year in America,” Riley says. “This year, we’re probably going to do 750,000. We’re millions of new homes behind in America. We are thousands short in our region.”

Riley summarizes the company’s performance: Allen Tate achieved near-record sales in 2015 with far fewer new home purchase opportunities and in a tightened lending environment. In the past two years, only onefourth of buyers were putting down 3 percent or less—nearly twice that many were making such small down payments in 2009.

“This is doing it the right way, but this is also showing you how healthy the market is where you and I choose to live, work, and play,” Riley comments. “It’s a beautiful thing.”

Charts and some images provided by the company.

Allen Tate Co., Inc. 6700 Fairview Road Charlotte, N.C. 28210 Phone: 704-365-6910; 800-210-0321 Principal: Patrick C. Riley, President and CEO Founded: 1957 Recognition: Largest real estate company in the Carolinas; ranked #6 among the country’s largest independently owned, non-franchised brokers, and #13 among all brokers, based on closed transactions sides for 2015 (REAL Trends 500) Business: Residential real estate and real estate-related services. www.allentate.com different.allentate.com

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SIMONINI HOMES TURNS INTO REALITY

Dreams by gene stowe

A

s Charlotte’s economy diversifies and recovers from the Great Recession, Simonini Homes is serving the market with homes and whole neighborhoods designed to blend into traditional communities like Myers Park and Eastover while providing the sought-after livability of modern floor plans.

The Enclave at Chrishall

Alan Simonini, who started building topquality homes in Charlotte in 1994 and now is an advisor in the firm, achieved his excellence goals years ago—the National Housing Quality Gold Award (2002 and 2010), America’s Best Builder (2003), Builder of the Year (2006), and induction into the William S. Marvin Hall of Fame for Design Excellence (2010).

31

charlottebiz.com | march/april/may 2016

ANYBODY CAN BUILD YOU A HOUSE. LET US BUILD YOU A

Home.

“We’re at a higher price point,” Simonini continues, “ranging from $500,000 to $1.5 million or more for homes from 2,700 to 5,000 square feet, with lot sizes from one-fourth to one-half acre. That’s why we typically do neighborhoods that are infill or gated or lakefront or golf course, because that’s where the more expensive homes are.”

Design and sales expertise give Simonini Homes an edge, he says. The firm has a complete design studio on Morehead Street where customers can choose their design preferences.

“That’s how we are different than most other custom builders in Charlotte,” Simonini says. “We have the designers and the salespeople. When somebody buys a home from us or does a renovation job with us, we’ll get the house designed for them, we’ll get the plans drawn and priced, we’ll do all the interior design they want. We can do a neighborhood because we have salespeople in the model who sell that neighborhood.”

(top to bottom) Alan Simonini Advisor John Andrew Tammaro II President and CEO Simonini Homes LLC

Simonini Design Center

Contemporary Inside, Classic Outside

32

He’s still building on that experience, from new single-family homes and upscale renovations to high-end multifamily housing, luxury town homes in some of the city’s most prestigious zip codes. His accomplishments include City Homes on Kings Drive, Dilworth Crescent, and Stephens Square (named for the founder of Myers Park). Current projects include Lombardy City Homes, SouthPark City Homes, and the most recently announced 19 townhomes on 1.5 acres at Sharon Amity Road and Woodlark Lane.

“We’re known for our custom homes and renovations,” Simonini says. “But we also work for other developers to start developments from scratch that are in our area and price point. We’ve also been hired by some developers to fix and finish some stalled neighborhoods. Instead of building just one custom home, we’re building a whole neighborhood of homes. We’ve got a track record of that.

march/april/may 2016 | charlottebiz.com

These days, the typical desired interior design is a significant departure from the old days of formal living and dining rooms with L- or U-shaped kitchens. A common floor plan involves a big kitchen with a big island that includes seating, a family room, a family dining room, and an outdoor covered living space, all connected and flowing together.

Chen Development is building a townhome communit y w it h i n wa l k i ng d i s t a nc e of Cotswold Village on nearly 1.5 acres at South Sha ron A m it y R o a d a n d Wo o d l a r k L a n e ; Si m o n i n i Ho m e s w i l l b u i ld a nd sel l t he 19 tow n homes, with a price per u nit ra nging f rom $575,000 to $675,000 and including a t wo-car garage.

“All of our houses have this module today,” Simonini says, adding that the style has arisen since 2006. “It’s a space that is comprised

of where you live. It is a big kitchen with an island, so you’re not trapped by an L-shaped kitchen or a U-shaped kitchen, which is typical of years past. The kitchen becomes part of your living room.

“The kitchen looks right into the family room and the family dining room, which is the same size as a traditional dining room but it’s attached to the main part of the house.

That creates one big rectangle, and they’re all interconnected. That’s where you spend 90 percent of your waking hours in the home.”

Depending on the floor plan, the family room might be 20 by 20 feet, the kitchen 18 by 15, the dining room 12 by 14, and the outdoor space 12 by 20. The outdoor space, accessed through sliding glass doors, can be used comfortably for about eight months of the year; some owners add heat sources for extended use.

While the floor plan is a break from the past, Simonini is committed to harmonizing with the traditional look and feel of the established communities where he builds infill housing on cleared tracts.

Years ago, he noticed that a Californiainspired community of stucco homes in Charleston was not selling well; when Hurricane Hugo destroyed the subdivision, the traditional Charleston look replaced it and flourished.

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into the fabric of the neighborhood.”

“It was a lesson to me,” Simonini explains.

“I said I’m never going to build something that doesn’t look like Charlotte. I take great pride in getting homes that look like Charlotte and look like the neighborhoods they’re going in.

Those duplexes and townhomes look like they’ve been there a hundred years. They fit into the fabric of the neighborhood.”

When he started the Heydon Hall subdivision near Quail Hollow Country Club, before the recession, Simonini took pictures of his favorite homes in Myers Park, Eastover, and Dilworth and told the designer to make the new homes look like that, with modern floor plans. More contemporary designs can fit downtown or near SouthPark, he says.

Pursuit of Quality Simonini, who grew up in Chicago, attended Culver Military Academy in Indiana, and earned a degree in biology at Arizona State University, got into the building business after his father, Alfred, who had retired from a family business, moved to River Hills Plantation

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Eastover City Homes

and started building a few homes for sale.

“Back then, the builders didn’t finish the house and do what they said they were going to do, not on budget or on schedule,” he recalls. “I saw an opportunity to do something different. I went in business for myself and brought in a business partner who kind of ran the business, Simonini Builders.

“We decided to go for being a National Housing Quality award winner and America’s Best Builder, so we set about the process of doing that.”

When their first few applications were turned down, the pair of entrepreneurs studied the detailed comments and learned from them. Simonini says simply, “We improved those things.

“We got to be known in our industry around the country as having really high customer service ratings,” he touts.

However, the recession that devastated the housing industry nationally hit Simonini Builders hard. The company built 122 milliondollar homes in 2007, two in 2011. Fortunately, renovation work held steady.

“That business never really slowed down much during the recession,” Simonini says.

“It was a bridge—we had the renovation work going all the way through there, so we didn’t go completely out of business.”

In response to the downturn, the owners divided Simonini Builders—Simonini remained with Simonini Homes in 2011, another part of the business became Classica Homes, and his business partner became a developerbroker for another builder.

John Tammaro, who earned a degree in

34

march/april/may 2016 | charlottebiz.com

“That’s how we are different than most other custom builders in Charlotte. We have the designers and the salespeople. When somebody buys a home from us or does a renovation job with us, we’ll get the house designed for them, we’ll get the plans drawn and priced, we’ll do all the interior design they want.”

building construction management from Purdue University in 1998, is president of the company. Gus Pappas, who has a degree in mechanical engineering and Spanish from N.C. State University and an MBA from UNCCharlotte, is chief operating officer.

Last year, Simonini Homes did about 20 new homes and 20 renovations; Simonini says they expect to do 30 new homes this year, including townhouses. About half the firm’s 30 employees work in new construction, half in renovations.

“I wouldn’t say it’s coming back,” Simonini says. “I’d say it’s improved from the bottom. It’s not back, but we’re doing fine. We’re happy.”

Among other things, the firm has several homes under construction in Foxcroft and at Lake Norman, and plans are taking shape for a new townhome community in Cotswold.

Demand is rising as a recession-triggered oversupply dwindles to undersupply because so little was built for years.

“It’s been a while of no building, so that’s kind of been absorbed,” Simonini says. “The market of available homes for sale has really shrunk a lot in Charlotte. The existing homes, there’s not very many on the market relative to the past. Not many, if any, are built on speculation, so there’s a limited number of new homes for sale.”

Choosing New Construction Simonini Homes’ market is typically mature families with high school or older children, empty-nesters, divorcees, retirees, or young professionals with two incomes and no children.

“Our buyers are typically older because of the price point,” Simonini says, adding that among other things, they don’t care about the house’s school district. “The buyers used to be three-fourths from out of town—people moving here with the banks and businesses moving to Charlotte. Now it’s half the people.

We’ve replaced some of the banking with the energy sector here in Charlotte. We have doctors moving here; the hospitals hire a lot of people. We’ve built a lot of doctors’ homes.”

Customers often choose to build when they see the total cost of purchasing and renovating an existing house.

“People look at a house that’s an older home,” Simonini says.

“They almost always need some renovation. People are paying the market price for their home and then having to renovate it.

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Only a portion of what they spend renovating it goes to adding value to the house.

“Price is on a per-square-foot analysis. If you just redo the kitchen, you don’t get 100 percent of your money back; if you replace the roof, you get nothing back. There are a lot of things you do in a renovation, like replace alansimoninihomes.com the pink bathroom tile with white, where you don’t get your money back.

“People look at that versus building a new house. A new house becomes a little more attractive when you look at the old house plus the renovations, then the new house makes more sense a lot of times.”

While Simonini is building houses 5,000 to 8,000 square feet, in places like Foxcroft and Lake Norman, some buyers are downsizing but determined to maintain quality even when they reduce quantity of space.

“They live in a nice home in a nice neighborhood; they’re used to nice things,” Simonini describes. “They’re not willing to give up the nice things, but they may be willing to have a home half the size of the one they’re in.

“Perhaps giving up formal areas and a bedroom to go from 6,000 square feet to 3,000 or 4,000,” he points out. “They’re not willing to give up any of the finishes they had in their old house—hardwood floors, moldings, granite or marble countertops, nice hardware, solid doors.”

Newly-constructed homes are also energy efficient, environmentally friendly, low-maintenance, and more comfortable because they filter outside air into the space to compensate for the tight defense against outside weather, and because builders use water-based paints and other materials that do not emit the toxic gases of past construction.

“We’re not putting anything that can rot on the outside of the home anymore,” Simonini says. “The wood has been replaced with wood substitutes. The houses are all Energy Star, so they’re very energy efficient.

They’re healthier to live in.”

Conversion Rate 19.0% Response Rate 8.7%

more channels = more results !

PRINT | EMAIL | SOCIAL MEDIA | MOBILE PRINT, EMAIL and PURLs Conversion Rate 16.5% Response Rate 8.2%

MULTIPLE CHANNELS produce the best results; not only do response rates go up, but conversion rates do, too.

Customers and prospects spend 30 seconds or less absorbing digital content. Deploying multiple channels is necessary to stay in front of them. It’s also why print is critical to the mix. Print channels tend to hold attention longer.

PRINT and EMAIL Conversion Rate 18.3% Response Rate 7.6%

Customers and prospects want and expect the same McDonald’s-like consistency in messaging, offers and brand experience across all channels. Don’t leave print out of the mix!

PRINT and PURLs Conversion Rate 15.3% Response Rate 7.6%

PRINT ONLY Conversion Rate 16.2% Response Rate 6.0%

We can help your business reach customers and prospects across all of these channels. Call us now!

704-676-5850 x102 or email jgalles@greatercharlottebiz.com.

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charlottebiz.com | march/april/may 2016

Last year, Simonini Homes did about 20 new homes and 20 renovations; Simonini says they expect to do 30 new homes this year, including

your responsibility.

“Everything looks uniform. Everybody’s yard is mowed at the same time. The neighborhood looks really good. This is another advantage of developing neighborhoods. It’s rewarding. People love living in them.”

Gene Stowe is a Charlotte Biz freelance writer.

Some images provided by the company.

townhouses.

In whole neighborhoods that Simonini develops, the yard maintenance is usually provided by the community—a practice that started before the recession that yields pleasant, uniform landscaping.

“In almost all our neighborhoods, your lawn is taken care of by the same person for the whole neighborhood,” he says. “You can augment that if you want, but your basic lawn care is taken care of by the community. If you want to have our own English garden or a vegetable garden in the back, that would be

36

march/april/may 2016 | charlottebiz.com

Simonini Homes LLC 501 E. Morehead St., Suite 4 Charlotte, N.C. 28202 Phone: 704-333-8999 Principal: John Andrew Tammaro II, President and CEO; Gus Pappas, COO; Alan Simonini, Advisor (founded predecessor company in 1994) Employees: 30 Established: 2011 Business: Construction and renovation of high-end homes, neighborhoods, and multifamily communities www.simonini.com

OF INTEREST: Get LinkedIn or Be LeftOut

LINKEDIN ACCESSIBILITY SOARS

WITH NEW MOBILE APP

W

e live in a world where total access to information is at our fingertips via our smartphones. Smartphone sales have gone from 62.6 million units in 2010 to a projected 236.8 million in 2019 (Source: Statista 2016). As a result, social media communication has been transformed by our desire to share our experiences in real time, in the moment.

Most think of Facebook, Twitter, Instagram and Pinterest when social media mobile use is discussed and statistics support this.

LinkedIn is different than other social media. It has typically been accessed via a desktop or laptop computer. Where the other social media options are hybrid in nature, appealing to consumers and businesses, LinkedIn is dedicated to business-to-business.

Fact: Currently more than 50 percent of LinkedIn users access the platform with their mobile app. The result is a brand new, totally redesigned master LinkedIn app. We love the new mobile app because it is similar to the desktop version, which has superior navigation and enhanced capabilities.

The new app is organized into five distinct sections: Home, Me, Messaging, My Network and Search.

Home From Home, you can now see a stream of news sent your way. This section includes content that has been shared or published by your network. You are given the opportunity to respond to the postings by liking, commenting and sharing what you see. By simply scrolling through the posts you are able to see information based on your interests, connections and groups.

Me Me includes two areas. First you’ll see the number of people who have viewed your profile as well as who’s viewed the content you have shared. This is similar to the notifications tab of the desktop version of LinkedIn. When you share content, you’ll see who has liked, commented or shared it along with an update of who’s following you.

This is a great method to stay on top of individuals who are interested in your posted content for the purpose of furthering your business relationship. You can follow up with those who have responded to your post and further the discussion about the content.

The second area of Me now allows for editing your profile instead of having to wait until you get back to your desktop. It exhibits how your profile is seen by mobile users and provides insight into how to structure it based on how it is rendered within the mobile environment.

My Network Within My Network are the updates to your connections profiles that reflect their position or job change, work anniversary, and birthdays. This is similar to what is found on your desktop Home page.

You may congratulate your connections with a personal note (and if local, suggest a celebratory lunch or coffee break). It’s a great way to stay on top of the changes being made by your network.

In addition, LinkedIn will suggest People You May Know based on your current connections and profile keywords. A word of warning— by clicking on the icon to the right that allows you to request a connection, you are not permitted to customize your message. We always recommend customizing connection request messages.

Search You’re now able to “search for people, jobs and more…” as written on the tool bar. For those of you who have used the search tool bar at the top of your desktop version, this will be very familiar. Prior to going into a business meeting with someone, check them out on LinkedIn to find out more about them. This makes it simple to access their profile.

You can do the same type of research when meeting with a company. Searching for the company name results in seeing their company page, including the latest news and possible jobs available.

Finally, when connecting with a person using the new app, you are now able to customize your connection request by clicking on the three horizontal dots at the top right of their mobile profile. There you will be able to personalize your invite, send them a private message and share the person’s profile with another individual.

Messaging

Why do we love the new LinkedIn mobile app? Finally, there is integration between the desktop and mobile versions. Both now allow for simpler communication and research. LinkedIn recognizes the importance of mobile for communication purposes and now it is possible.

Don’t be fooled into thinking this section is just glorified texting between you and your connections. This has been transformed into your total communication center on LinkedIn. It mirrors the new message center on the desktop version and is where all past and present communication is housed.

Content contributed by Ira and Linda Bass of Connect To Success, specializing in LinkedIn individual and group training for corporations, associations and networking groups along with communication coaching. For more information, please contact Ira Bass at IraBass@ConnectToSuccess.biz or 704-989-3790. Learn more at www.

ConnectToSuccess.biz.

Basses

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charlottebiz.com | march/april/may 2016

e h T

HOME SERVICES

s o r e h r e p u S

march/april/may 2016 | charlottebiz.com

Killingsworth Environmental Has Transformed Beyond Mere Pest Control by zenda douglas

L

ike most businesses, Killingsworth Environmental of the Carolinas can attribute its success to wise decisions, smart financing, appropriate locations, technological advances, and good luck, but ask its owners and they’ll attribute it to a well-comprised staff and a customer service standard based on kindness and grace.

“How we treat and care for our customers is everything to us,” says Andrew Rogers, vice president of operations. “It’s our culture from management all the way down the line.”

“If you go to McDonald’s and you go to Chick-fil-A, you’re getting fast food at both locations; but if you go to Chick-fil-A, they put fresh flowers on your table, refill your drink, take your trash, and say, ‘Yes, ma’am,’ ‘No, ma’am,’ ‘Yes, sir,’ ‘No, sir.’ ‘Is there anything else I can help you with?’” says brother, Mat Rogers, director of marketing.

“I liken Killingsworth to the Chick-fil-A of the fast-food industry.”

39

Hey Pawpaw: Superhero charlottebiz.com | march/april/may 2016

“Often in the business world, customer service is seen as something that doesn’t have a return on investment; something that you can’t track and attribute the continued success of a company to,” continues Andrew. “I completely disagree with that sentiment.”

Indeed, owners Mike and Debbie Rogers, CEO and V.P. respectively, have grown Killingsworth Environmental into an $18 million business. In addition, they have groomed a second generation for the leadership of their company in sons Andrew and Mat, under the steadfast direction of Frank McKee, the company’s president. While much has changed over the years, the standard of care has remained the same and will continue into the future.

Home Services Close to Home T he o r i g i n s of K i l l i n g s wo r t h Environmental go back to 1993, when Mike Rogers went to work for Killingsworth Pest Control of Florida, the largest advertiser for Rogers when he sold yellow pages ads for Bellsouth in Pensacola.

“

It’s been a real fascinating ride

for all of us, Frank, and Dad and Debbie. Mat and I are really enjoying the fruits of trusting one another as well as the camaraderie that comes with family operating well together"

40

(l to r, top to bottom) Debbra E. Rogers V.P. Michael A. Rogers CEO Frank McKee President Mat Rogers Director of Marketing Andrew Rogers V.P. Operations Company Personnel Killingsworth Environmental of the Carolinas, LLC

march/april/may 2016 | charlottebiz.com

In 2007, he and Debbie bought out the North and South Carolina branches of Killingsworth Pest Control and renamed it Killingsworth Environmental of the Carolinas. Now Killingsworth their company boasts 9 branch offic- Termite Control es, 182 employees, 146 vehicles, and a listing among Pest Control Technology magazine’s Top 100 companies based on gross revenue.

Recently, the company has taken up spacious, new headquarters in Monroe.

Over the last decade, the company has grown from a primarily pest control concern to a full-fledged home services business that bundles pest control, wildlife control, heating and air conditioning, indoor air quality, mold remediation, carpet and hardwood cleaning, water restoration, plumbing, electrical, and lawn care.

Each of the company’s business sectors are separate profit centers and each has its own staff, resident experts, and sales brand.

Customers can access one telephone number for a wide range of services needed. In fact, the company makes it easy for customers to benefit from multiple services.

Killingsworth Environmental offers preferred treatment for service “bundlers” and renewable services through the Killingsworth Bundling Plan, a star system providing a range of discounts and front-of-line appointments for seasonal services such as HVAC. This plan has resulted in a 30 percent increase in multiple-service contracts for the company.

Another area to which the Rogers attribute their success is technology. “We’ve gone completely paperless,” explains Mat. “Everything we do is done off of our iPads. It’s been that way for about five years now, saving us a lot of money in paper, and saving the trees.”

Andrew entered the family business right out of high school but was around long before that. “We used to pick up cigarette butts from the parking lot, and later, I did telemarketing while I was in school. I started as a technician in our pest control division. There’s not a lot about bugs I couldn’t bore you with,” he says with a smile. At 30, he now oversees all of the various divisions of the company. “It continues to be a huge learning curve,” he says.

Mat fought hard for many years to avoid the family enterprise, preferring to find and follow his own path. He went to UNC at Charlotte for his undergraduate and graduate work in graphic design. But the economy dealt blows to the field and jobs and clients were hard to come by. During lean times, he turned to substitute teaching and found that he loved it but that, too, was limited by the downturn in the economy.

Termite Control

Pest Control

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We can help your business reach customers and prospects across multiple channels. Call us now at 704-676-5850 x102 or email jgalles@greatercharlottebiz.com.

41 Wildlife Removal

*Millward Brown meta-analysis on print advertising effectiveness (October 2015)

charlottebiz.com | march/april/may 2016

Bed Bug Treatment

Throughout, Mat had turned down offers from his father to join the business because there didn’t seem to be a job with the right fit.

Finally, four years ago, he got a call from father asking for his help with marketing and social media. Now at 34, he is in charge of all marketing activities and says he can’t imagine doing anything else. All of the company’s marketing efforts are handled in-house.

One Big Family

Karpet Kare

42

McKee is the director of the group. He came on board in 2000; his wife was already employed by Killingsworth. He started out mowing grass, doing inspections in crawlspaces, and conducting pre-treats—in other words, at the bottom. Over the years, he has made his way up through every part of the business and management. Part of his work now, as president, is to guide Andrew and Mat as their Mike and Debbie step further away from the day-today business operations.

McKee is an excellent example of the company’s commitment to upward mobility.

“Most people think of the service industry as a job that you’re stuck in,” says Andrew. “We actually have a path that people can take if they work hard and do the right thing where they can become upper level management.”

“We never bring an outside source in as management to our company,” agrees Mat. “One of the things we look for in new hires is the ability to grow.”

“We’re the second generation,” Andrew points out, “but nothing was ever handed to us. I never wanted to have someone answer to me that I didn’t already know how to do the job they were doing. I wanted it to be because I’ve earned it and that’s the way it is. Even with my 16-year-old brother, it’s not going to be “Come on in, here’s your management role.”

He’s going to be working this summer pulling hoses and digging trenches.”

In addition to the 182 humans on staff at Killingsworth Environmental, there are six

march/april/may 2016 | charlottebiz.com

Hardscapes

HVAC Service

“

We have dogs that can differentiate between live and dead bedbugs, so after we do a treatment these dogs can actually go through and determine that there’s nothing left alive. It’s amazing how beneficial these dogs have been for our business. It’s a big investment."

canine employees who carry their weight every day. With proper training, dogs can sniff out the chemical pheromones insects use to communicate. They are especially effective with termites and bed bugs, two pervasive problems.

Killingsworth Environmental obtains their dogs from the Florida Canine Academy which rescues dogs from pounds and humane societies. Once fully trained, each detection dog sells for about $10,000 and must be matched with a dedicated, full-time handler who flies to Florida to train with the dog.

“We have dogs that can differentiate between live and dead bedbugs, so after we do a treatment these dogs can actually go through and determine that there’s nothing left alive,” says Andrew. “It’s amazing how beneficial these dogs have been for our business. It’s a big investment. We have two new Labrador puppies being trained now.”

The company also utilizes heat systems that raise the heat to 140 degrees to kill the bugs. “Our guys are constantly going in the rooms, moving things around. It’s not a fun job, but it’s effective,” says Andrew.

Plumbing/Electrical

Mold Remediation

Carpet/Hardwood Care

Fortunately, Killingsworth Environmental was nearly unscathed during the recession. At the time it began, the company was doing a great deal of pre-treat work How to Clean Your Condenser in the construction industry. That Coil was the first industry to fall, but the Rogers adjusted quickly, increasing their marketing and sales expenditures and building up their sales staff.

Rather than pull back, they added new lines of service such as lawn care and mold remediation. For the first time, they assigned technicians and sales people to branch offices and required them to work leads and jobs only inside their own area, a significant change that led to savings in fuel, time, and fleet maintenance. It also increased sales. The company posted growth in every year of the recession and since. This past year saw an enviable 32 percent in growth.

Transformation Challenges The business hasn’t grown without challenges, though. “We spend a lot of time and money educating customers that each service

Fire/Water Restoration

has its own management team and staff. We need for them to understand that our pest control technician is not going to come and service your HVAC unit and the wildlife worker is not going to be fertilizing your lawn,” says Mat.

Killingsworth Environmental offers preferred treatment for service “bundlers” and renewable services through the Killingsworth Bundling Plan, a star system providing a range of discounts and front-of-line appointments for seasonal services such as HVAC. This plan has resulted in a 30 percent increase in multipleservice contracts for Bundling the company.

Services Another challenge is the rapidly changing regulations. “Most of our business falls under the North Carolina Department of Agriculture, and, of course, there’s OSHA,” says Andrew. “Rules can change quickly.

There’s a lot of legislation going on as far as what types of pesticides we’re going to be able to use down the road. We try to do our very best to make sure we’re not spraying any flowering plants to try to help the bee population.”

The Rogers don’t worry too much about the competition. Not only because they are far ahead of any competitors in the number of services they provide, but also because of the industry’s statistics.

“In pest control alone, they say that only 20 percent of the population has professional pest control on their home,” explains Andrew.

“Everybody else either doesn’t worry about it or they go to Lowe’s and buy something to use themselves. That leaves 80 percent out there that nobody has; that’s enough for everybody.”

A major goal for the next few years is to

completely rebrand the company away from pest control to be perceived as a complete umbrella for home services. “Our goal eventually is to be lot line to lot line. We want to do everything within home services,” says Andrew.

Killingsworth Environmental also sets itself apart by how they handle maintenance service visits. While most companies do quarterly check-ups where the technician comes to the site, does his work, and leaves a note on the customer’s door, Killingsworth Environmental conducts scheduled checkups occur only once a year.

But at each check-up, the technician meets with the customer and spends a full hour and a half on-site, answering questions, performing inspections, caulking gaps where insects might enter, performing maintenance treatments, and assuring the customer that they can call Killingsworth Environmental any time for follow-up or to address specific concerns.

“I feel that Andrew and I have been given a good bit of autonomy and a lot of trust from Dad to take some things by the reins and reshape things as we take on more and more responsibility,” says Mat. “It’s been a real privilege. I’ve always had respect for what they had done before. I still have that respect.”

“It’s been a real fascinating ride for all of us, Frank, and Dad and Debbie. Mat and I are really enjoying the fruits of trusting one another as well as the camaraderie that comes with family operating well together,” says Andrew.

Zenda Douglas is a Charlotte Biz freelance writer.

Some images provided by the company..

Killingsworth Environmental of the Carolinas, LLC 1407 Airport Road Monroe, N. C. 28110 Phone: 704-323-7782 Principals: Michael Rogers, CEO; Frank McKee, President; Debbra Rogers, V.P; Andrew Rogers, V.P. Operations; Mat Rogers, Director of Marketing Established: 1993 Offices: 9 offices in Monroe, Charlotte, Concord, Denver, Mint Hill, Mooresville, Pineville, Rock Hill and Gastonia Revenue: $23 million Employees: 182 Customers: 73,000+ recurring Business: Provides a full suite of home services including termite treatment, bed bug treatment, carpet & hardwood cleaning, mold remediation, lawn care, fire & water restoration, HVAC service, plumbing, electrical, and insect and pest control in the greater Charlotte area. www.killingssworthenvironmental.com www.thebiggreenk.com

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[publisher’spost]

OF INTEREST: Promoting Thought Leadership Across the Carolinas

THE INDUSTRY 4.0 “WORKFORCE”:

MAKING US REEVALUATE HUMAN ENDEAVOR

S

ome presidential candidates have suggested restraining international trade as a means to restoring and retaining jobs in the U.S.; however, simple observation of the ever-expanding and increasingly interactive flows of goods, services, finance, people and digital communications confirms our global economy does not easily afford artificial barriers.

Equalizing the field of international trade is laudable, however, we need to also— or moreso—recognize that the nature of Industry 4.0 itself is catapulting advanced John P. Galles manufacturing in the direction of substantially fewer workers and more automation.

Publisher Industry 4.0 facilitates the vision and execution of a Smart Factory. Within the modular structured Smart Factory, cyberphysical systems monitor Please feel free to contact me at physical processes, create 704-676-5850 x102 or jgalles@ a virtual copy of the physigreatercharlottebiz.com. cal world and make decentralized decisions.

Over the Internet of Things, cyber-physical systems communicate and cooperate with each other and with humans in real time, and via the Internet of Services, both internal and cross-organizational services are offered and utilized by participants of the value chain.

However, workers’ pay, training, benefits and taxes are more expensive relative to robotic counterparts.

As a result, the vision of Industry 4.0 suggests that the adoption of big data, autonomous robots, simulations, additive manufacturing, system integration and augmented reality will further reduce the number of jobs.

While we all would like to think that we are not replaceable—from publishers to financial advisors, to 44 bus drivers, firefighters, doctors and s u r g e o n s —ne w technology and march/april/may 2016 | charlottebiz.com

We need to look forward, not be lulled into the thinking of the past century and applying arcane solutions. We need to reevaluate the human endeavor and what makes us fundamentally individually valuable. artificial intelligence are replacing more tasks and supplanting more jobs.

Even the big consulting groups like McKinsey and Company and the Boston Consulting Group have suggested that it is likely that 45 percent of current jobs will be provided by robots. As a result, increasing unemployment may reach 50 percent in 30 years.

There will be jobs for those that build and service these new machines; however, programs are also being written so that these machines will repair themselves.

Combining the impact of all these new technologies, it is probable to conclude that we will be facing potentially devastating economic upheaval. With the future of human labor in doubt, we will need to reconsider the next generation of “jobs” that will enable our livelihood.

Over the past 50 years, the impact of technological change has moved people from the farms to the factories and then to a nation substantially built on services. As technology continues to replace and supplant human labor and thought, we might envision further evolution to a reduced work week allowing time for more creative work that will end up as ever-newer innovations and entrepreneurial opportunities supported by technology.

More time invites more creativity, especially with the access and application of

technology to support such thought work. Art, culture, travel, education and adventure will be pursued in a multitude of ways including virtual reality and high-speed travel.

Our old manufacturing revolution and its applications will pale in comparison to future production. We won’t need to produce 5,000 widgets in a factory to reduce the price of an individual widget; we can simply scan one and 3D-manufacture it from anywhere. We may be able to diagnose our own ailments and identify treatments that have been designed for our individual DNA. We may even learn to eat certain foods that will cure our ailments and prevent future health problems.

We need to embrace a broader dialogue on these challenges to rethink and reassess how these changes will affect our values and purpose. Our “world” is being radically disrupted, but maybe that disruption will give way to even more innovation and creativity than we know today.

We need to look forward, not be lulled into the thinking of the past century and applying arcane solutions. We need to reevaluate the human endeavor and what makes us fundamentally individually valuable.

It’s WHO You Know

SPEAKERS:

Networking is Vital to Your Business’ Success Face-to-face communication is critical for your company’s success in today’s economic environment. In a world where relationships open doors and sustain business operations, networking with your peers can make all the difference. And, no matter what your business is, it is increasingly important to do everything you can to forge new relationships and reinforce existing relationships with clients and customers.

Jenn Snyder Executive Director

The rise of social media and online networking sites—LinkedIn, Facebook and Twitter—have provided excellent opportunities for businesses to communicate with their clients and customers. People are connecting in ways not possible before, and they are experiencing growth in new areas. However, social media is only part of the equation for a successful business. And for most businesses, the main goal of a social media connection should be to establish a face-to-face meeting.

For business leaders to set themselves apart from the competition, networking efforts must move beyond their desktops and into the real world. Eye contact, a conversation and an oldfashioned handshake will get you considerably farther than an online connection. It is easier to connect with others and earn new business in person than it is in cyberspace or on the telephone, which is why business networking organizations must be part of any marketing strategy. Put simply: Get out there and meet people.

Success in business is all about getting your message in front of the right people. Seek out organizations that provide opportunities to network with Charlotte’s decision makers—the elite businessmen and women of the community. Countless business owners have established longlasting professional and personal relationships because they were able to talk to other business owners in the appropriate environment.

The right networking environment goes a long way in helping to create new business contacts, but it is also important to know that successful and prosperous relationships take time to develop. The key is to not be selfish. Start by asking what you can do to help someone else, and take the time to get to know people. People want to do business with people they know. Save the elevator pitch for the appropriate time.

Times are tough. When new business is harder and harder to earn, and you find yourself competing more and more for existing clients, your visibility becomes a valuable asset. Enhance your reputation among the local business community by frequenting events attended by business leaders. Get out there and talk to people face-to-face. You will be amazed at how far eye contact, a good conversation and a handshake will take you.

Jenn Snyder is executive director of Hood Hargett Breakfast Club, a “category exclusive” organization that develops and hosts some 36 events throughout the year for its members and guests. Members include men and women from more than 40 local and regional businesses who have built their own companies to become leaders within their respective industries.

Contact Jenn at 704-602-9529 or visit www.hoodhargettbreakfastclub.com.

William Espey

Branding Visionary Chipotle Mexican Grill APRIL 8, 2016

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