NOVEMBER 2017 November 13th
November 17th Wisconsin’s Future Workforce The Challenges and Opportunities in Milwaukee K-12 Education
“Using CRMs to Leverage for Maximum Sales & Marketing”
David Steele, PAVE
Inside This Issue: SPECIAL REPORT
WISCONSIN UNION MEMBERSHIP PLUMMETS IN WAKE OF WORKER FREEDOM LAWS
BRANDENBURG: BUDGET ADOPTED BY CONGRESS - LEGISLATIVE PROCESS FOR TAX REFORM BEGINS
KEATING: NEW SURVEY: SMALL BUSINESS POSITIVE ON MOST MATTERS
At AT&T, we know that making connections is critical to success. In Wisconsin and across the nation, we link businesses with their customers and the world through our wireless network with access to the nation’s largest Wi-fi network. It’s just another way we help our customers stay connected. AT&T is proud to support the Independent Business Association of Wisconsin.
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IBAW thanks AT&T for it’s continued sponsorship.
MEDIA LINK Wisconsin Rural Agenda Governor Walker discusses the challenges rural communities is Wisconsin face. Listen by clicking here.
Executive Director Steve Kohlmann President Dan Hansen Secretary Charles Fry Baird Treasurer Tony Palmen Sikich Directors Jim Leef ITU AbsorbTech
$15 Wage Leads to Store Closings A Seattle pizza store has to close due to the mandatory $15 an hour wage increase. Watch by clicking here.
Ann Barry Hanneman Von Briesen Law Oﬃce John Weber Hypneumat Jeﬀ Hoﬀman Boerke Co. Lisa Mauer Rickert Industries Tom Boelkow BSI Design, Build, Furnish Robert Gross Gross Automation Scott Seroka Seroka Brand Development Tom Parks Annex Wealth Management Jake Hansen Jacsten Holding Scott Hirschfeld CTaccess
IBAW Mission: To advance business prosperity through insightful programming, executive networking and member-driven public policy and advocacy.
Friday, Nov. 17th
7:00 a.m - 9:00 a.m
Wisconsin’s Future Workforce: The Challenges and Opportunities in Milwaukee K-12 Education
Presenter: Dave Steele, CEO, PAVE
It's no secret businesses are struggling to recruit a solid, qualified workforce, and the future for employment will be a challenge for businesses. How will that challenge be met by the Milwaukee School System? PAVE believes that Milwaukee has the talent, drive and commitment necessary to create the excellent schools our students deserve. Every day, across the city, teachers, school leaders and parents work incredibly hard to prepare our students for the future they will face.
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THE WISCONSIN CLUB 900 W. WISCONSIN AVE. MILWAUKEE
REGISTRATION & NETWORKING
BREAKFAST & PROGRAM
UPDATE: Year Three Is In The Books Steve Kohlmann, IBAW Executive Director This November is the four year mark for me as your Executive Director. With years three in the rear view mirror I thought it would be a good time to give you an update on where we are with the IBAW. IBAW is well known for its monthly business programming and the last two months have been great examples of that. In September, we once again hosted the Wisconsin Manufacturing Summit with a panel discussion from manufacturing heavyweights Joel Quadracci of Quad Graphics, Chad Severson of InSinkerator and Jim Kass of Allen Edmonds. Additionally, Secretary of Administration Scott Neitzel from the State of Wisconsin gave us a briefing on Foxconn. In October, we featured a political panel discussion with two Democrats and two Republicans taking questions from you, our IBAW members, regarding everything from taxes to the budget and business regulation issues to workforce education. One of the hallmarks of IBAW is to keep our members connected with our elected officials in Madison, Washington, D.C. and this meeting was a great example of that. It was a very lively -but civil - discussion and our allotted time went by quickly. This got me thinking this format would make for an interesting 2-hour round table discussion. Great progress has been made for marketing and outreach to new members. Last month we launched a new promotional video which captures the energy and enthusiasm of IBAW. If you haven’t seen it yet click on this link to view it. If you know of someone interested in IBAW, send them to this link and invite them to our monthly breakfast meetings. Also, this past year we did another brand assessment with the help of Scott Seroka. Our last brand assessment was years ago and it was time to re-engage in that discussion to make sure IBAW’s marketing efforts were on track. We learned a lot from this assessment. It tells us how are members and potential members view our organization and what’s important to them so we might adjust our efforts accordingly. Keeping you updated on all things happening in Madison and Washington, D.C. is also very vital to the IBAW mission. Last year we reached out to the MacIver Institute as well as Wisconsin Institute for Law and Liberty to provide us with news that impacts small business in Wisconsin. Much of that content appears right here in this magazine and I would like to thank those two organizations for the fine job they do in reporting and keeping us informed. Finally, the IBAW membership continues to grow although over the last few months we have hit a bit of a plateau. This isn’t uncommon with member driven organizations. What’s the reason behind that? Well, businesses and people change their situation constantly. Some businesses are acquired or simply go out of business while individuals change careers, retire, or unfortunately, pass away. When I first came on as your director we had about 90 businesses within the IBAW and today that number has grown to about 155. That’s a pretty good growth path but there’s more work to do! If you know someone who may be interested in being part of a great business organization tell them about IBAW. Send him the link to the video, or better yet, invite them to one of our monthly breakfast meetings so they can experience it for themselves. So there’s a quick update on where we are and how we are doing. It’s hard to believe three years are the books and we’re starting year four. Time flies! As always, if you have any questions or concerns or suggestions about IBAW, please contact me. Have a great Thanksgiving!
Budget Adopted by Congress - Legislative Process for Tax Reform Begins Jim Brandenburg, Sikich
Following the unveiling of the Tax Reform Framework at the end of September, there are four major legislative hurdles that must be passed for tax reform to be enacted (please click here to view our Tax Reform Framework article). The first step was met today as Congress approved a budget that now leaves Washington in a frenzy over the remaining three steps. The legislative process for tax reform is as follows: 1. BUDGET Congress must first adopt a budget. The budget sets the overall amount of tax cuts that tax reform legislation can include, and this budget is needed before the actual tax legislation is drafted and voted on in Congress. The Senate’s budget plan passed by a narrow 51-49 margin last week (10/19/2017), and the House opted to take up the Senate budget. The House voted on the Senate’s budget today (10/26/2017). This passed by a narrow margin of 216-212, and thus the budget has now passed Congress – it does not need to be signed by the President. This means that tax reform has already completed the first step of the legislative process. The actual drafting of tax legislation can now begin in Congress (step 2). Part of this budget contains “budget reconciliation” instructions which will allow a tax reform bill to pass in the Senate with a simple majority of 50 votes, and not a 60 vote margin. These budget reconciliation rules are very complicated, but the key takeaway is that the same budget must pass both the House and the Senate—this was accomplished today.
2. HOUSE The next step in the process is for the House to hold mark-up hearings to draft the actual tax legislation. Shortly after the House passed the budget today, House Ways and Means Committee Chairman Kevin Brady released his schedule for these tax reform hearings. He will hold mark-up hearings the week of November 6, 2017 to work on the actual tax reform legislation with the entire committee members and vote on the tax bill. Also, Brady announced that on Wednesday, November 1, 2017, he would release a draft of this legislation that the committee will address the following week. The details of the tax bill have not yet been released, but they will be soon. Key committee members and staffers are keeping a tight lid on the bill’s details until they are released to the public on November 1, 2017. As you may recall, one of the major themes in the Tax Reform Framework was to reduce the corporate tax rates to 20%, and to 25% for certain pass-through entities. These lower tax rates have received much attention, but we will soon learn more about the less-publicized offsets (also referred to as the “pay-fors”) included in tax reform. These pay-fors will encompass a wide range of deductions, credits, and other special tax incentives that will be repealed or curtailed as part of the tax reform process in bringing about lower tax rates. These pay-fors will be unveiled next week when the proposed draft of the entire tax reform legislation is released. The lobbying and public pressure will mount once these specific changes are announced. Assuming the tax reform bill passes out of the Ways and Means Committee, it will move to the full House for a vote (a simple majority is needed for passage). PROJECTED TIMELINE AND OUTLOOK: House leaders would like to have the tax reform bill approved in the House in November – prior to the Thanksgiving recess. The prospects for tax reform passing in the House are better than in the Senate, but it will still be a narrow margin.
3. SENATE The third step will be the Senate. Senate Finance Committee Chairman Orrin Hatch and his committee will review the House passed tax reform legislation, but may offer their own version of various provisions that differ from the House plan. As you know from the Affordable Care Act (ACA) repeal bills this year, the Senate has razor thin margins; high stakes political drama on tax reform is likely to play out again in the Senate. The support will likely fall along party lines; there may be some Republicans that oppose the tax reform bill, while some Democratic senators may support it. PROJECTED TIMELINE AND OUTLOOK: The Senate Finance Committee may take action before Thanksgiving, but the full Senate will likely not vote on the bill until after Thanksgiving. The Senate’s passage of the budget last week is a good sign for tax reform, but not a guarantee. The final vote on tax reform in the Senate will likely be decided by one or two senators. As with the legislation to repeal the ACA, the Senate will be key in getting any tax reform legislation passed.
4. HOUSE-SENATE CONFERENCE The House and Senate versions of tax reform will invariably differ. Each of their versions then go to a House-Senate conference where a compromise legislation is needed. The conferees from both the House and Senate address each provision in the bill, distinguish differences, and seek agreement on what they feel will pass in the House and Senate. Once this is done, the same bill (as revised) must pass both the House and the Senate.
PROJECTED TIMELINE AND OUTLOOK: With the Senate margin down to a few votes, the House-Senate conference would likely be geared toward not losing any Senate votes, which could result in some lost votes in the House (but still enough for passage). Again, it will come down to a numbers game. Alternatively, as with the budget bill, a tax bill that survives the Senate (step 3 above) could go directly back to the House for a vote where it cannot be changed and would face an up or down vote. Look for this final legislative activity in mid-December. PRESIDENT Any tax reform bill that survives the above four steps in Congress would go to the President to sign. The president has no ability to change any final legislation. Any input the administration has on various provisions in the tax reform legislation would be communicated at each step of the above process. A signing ceremony on tax reform, assuming each of the above four steps are met, would probably be in mid-to-late December (it could perhaps slip into 2018, but they would like to have it done in 2017). Please keep in mind, while the pace of tax legislation may seem slow up to this point, it will greatly accelerate now that the budget was finally approved by Congress (step 1 above). Things will become more hectic now. The tax reform bill can change quickly, and it will be hard at times to keep up with what is going on. Chairman Brady will introduce his “mark” (a draft of actual tax reform legislation), and this will contain a significant level of details, after which legislative activity will move quickly. There will be specifics on numerous major tax provisions, various effective dates, perhaps some phase-in of provisions, etc. While these items are not enacted into law, you may want to have some understanding of what is in the tax reform bill and what is not in it, and the various effective dates. We will provide updates as each of the above steps play out for tax reform this year. Please contact your Sikich tax advisor with any questions you have, or if you need any assistance evaluating the prospects of tax reform to you, your family, and your business. Stay tuned . . . _______________ Jim Brandenburg, CPA, MST, has extensive experience and knowledge in corporate and partnership tax law, mergers and acquisitions, and tax legislation. His expertise includes working with owners of closely held businesses to identify tax planning opportunities and assist them in implementing these strategies. He can be reached by clicking here.
Public Hearing on Proposed Mining Bill AB 499 October 13, 2017 AB 499 Committee Hearing Members Wisconsin State Capitol Hearing Rom 412 Madison, WI 53707
A public hearing was held on Friday, October 13th at the State Capitol in Madison in hearing room 412. IBAW Executive Director Steve Kohlmann testified in favor of the bill. This is his testimony of record.
RE: IBAW Supports Assembly Bill 499 Dear Committee Hearing Members, Good afternoon, I’m Steve Kohlmann, Executive Director for the Independent Business Assoc. of Wisconsin (IBAW). The IBAW represents over 155 small, independent businesses throughout the state of Wisconsin. The businesses within IBAW employ thousands of workers throughout our state. I am here today on behalf of the IBAW board of directors and our statewide membership to support Assembly Bill 499 which we believe will foster mining in Wisconsin and not exclude it. While Foxconn has recently lead the headlines for job creation, we must not forget there are other parts of the state that depend on employment. Particularly for northern Wisconsin, not all employment can, or should, be related to tourism. Mining - and all the ancillary jobs that support that industry - play an important role in Wisconsin’s supply chain economy. We need to afford the rural communities of upper Wisconsin the economic opportunities needed to retain its young people in order for those communities to remain vibrant and eliminate the talent drain. Mining jobs just don’t happen directly at the mine location but ripple throughout our state. Companies such as Caterpillar, Falk, Metso, Maynard Steel, Rexnord, Terex, Generac, Johnson Controls, Wacker Neuson and Gross Automation all have hundreds, if not thousands of workers impacted economically by the mining industry. Mining has always been part of Wisconsin’s history. So much so that a minor is represented on our state flag. Mining continues to play an important role not just economically but in today’s technologies nonferrous metals such as copper, silver and zinc play a vital role in today’s modern society and impact us even if we aren’t involved directly with the mining industry. For example; - The copper pipes inside in your homes and businesses deliver water to your faucets, dishwashers, toilets and refrigerators. - Hybrid cars such as the Toyota Prius use a minimum of 64 lbs of copper in every car. While the hybrid’s batteries are nickel based, a Prius utilizes a lot of copper wiring and computer chips to keep it on the road and cutting carbon emissions. Future generations of hybrid and electric cars plan on using even more copper as they strive to lower our dependence on fossil fuels.
- Your mobile phone utilizes half ounce of copper. While that may seem insignificant, thatâ€™s more than all the other metals in your phone and more than 12% of your phoneâ€™s total weight. As more sophistication is added to our phones, the amount of copper in them will continue to grow as well. - Copper cables deliver energy so millions of Americans can commute and travel in a energy efficient manner. Alternative forms of transportation, from buses to electric trolleys and subways cars use an average of 2,300 pounds of copper each. Additionally, the wire that delivers that power is often copper. Milwaukee is presently constructing a downtown trolley. That trolley runs on energy delivered by an overhead power cable - most likely made of copper - According to the U.S. Bureau of Mines, the U.S. consumes more than one million metric tons of Zinc annually. The average person will use 730 pounds of zinc in his or her lifetime. These metals must come from somewhere. More often than not, they can come from locations outside the reach of U.S. EPA Regulations such as India or China where pollutions standards are non existent. If America needs these metal - and we do - they should be supplied from within the U.S. thatâ€™s is properly regulated - like Wisconsin. Since mining involves our natural resources, there should be oversight, so there should be a plan to restore a mine to its original state. But that oversight should be used to oversee the mining operation and certainly not prevent it from taking place. In conclusion, I would like to leave you with this. Our neighboring state to the west, Minnesota, has had a vibrant mining industry for years. Northeastern MN, U.S. Senator Al Franken commented about mining in his state during an interview at Northland's NewsCenter in Duluth. He said, "I believe we can accomplish these projects in a responsible manner and in an environmentally safe manner, too." He concluded, "The role of the government is to create an environment where the marketplace works." The IBAW agrees. Thank you for your attention. Regards,
Steve Kohlmann IBAW Executive Director
Wisconsin Union Membership Plummets In Wake Of Worker Freedom Laws Jake Lubenow, The MacIver Institute
There have been many lessons learned in Wisconsin's collective-bargaining reform era. Perhaps the most important takeaway is what has ever been true: When people are allowed the power to choose, they exercise that power. The laws that have lifted the yoke of compulsory union membership off the backs of Wisconsin workers have empowered employees in the public and private sectors to walk away from big labor. And they have done so in droves - even in the metropolitan area of the People's Republic of Madison, where the union membership rate has sunk to 5.4 percent. Union membership has plummeted in the Badger State in the wake of the Act 10 and the right-to-work reforms led by Gov. Scott Walker and the Republicancontrolled Legislature. Act 10, passed and signed in 2011, broadly limited the power of public sector unions, returning control to the taxpayer. It also gave public sector unions the right to decide whether they wanted to continue to pay the union dues that they had so long been forced to contribute, or whether they wanted to remain in the union at all.
The legislation has saved the state over $5 billion since its implementation. More than $3 billion was saved thanks to modest contributions to benefits from public employees, and the reform saved the struggling Milwaukee Public Schools over $1 billion. The right-to-work law followed four years later, giving private sector unionized workers the ability to opt-out of union membership. Wisconsin was the 25th state to implement the worker liberty reform, joining a wave of six other states in the past 10 years that have passed similar freedoms.
Wisconsin Union Membership, the Latest Data Since Act 10 and right to work, there have been some interesting developments across Wisconsin. UnionStats.com compiles Census Bureau data and provides a great look at some of the Wisconsin metro areas' union data. In the metro area of Madison, a hive of organized labor, union membership has decreased significantly since its peak of 21.1 percent of the workforce in 2010. When the law really started to effect change in contracts in 2012, the rate dropped to 10 percent. The state's capital city employs many of the state employees affected by the legislation, - many of whom joined the massive, big labor-led protests against Act 10 at the Capitol in late winter 2011. Despite liberal Madison's seeming love of unions, only 5.4 percent of Madison area workers were union members in 2016. While there were well over 56,000 members in the Madison metropolitan area in 2010, there were just over 20,000 as of the most recent data. The Fox Cities area, including Appleton, Oshkosh, and Neenah, also has seen declines, although not as pronounced as Madison. A peak of 16.5 percent in 2010 followed a drop in 2011 to 11.6 percent. Similar results followed the introduction of right-to-work freedoms, with a drop from 11.2 percent to 9.6 percent from 2014 to 2015. Union membership continues to decrease. The Milwaukee metropolitan area saw a sharp decline in union participation following implementation of the right-towork law. In 2014, the rate was 10.2 percent before dropping to 7.4 percent in 2015. The rate has since risen to 9.1 percent. Overall, the state of Wisconsin has seen recent decreases across the board, including declines following both reform measures. The worker exodus from union was more dramatic early on. A 29.1 percent drop in union membership rates in 2015 was succeeded by a modest decline from 8.3 to 8.1 percent in 2016. Close to 355,000 employees were union members in 2010. More than 125,000 Wisconsinites have left their unions since 2010, with only 218,000 members today. Big labor painted the departures as the result of "relentless attacks from right-wing politicians and corporate special interests." "Today, it's much harder for working people to join together in a union and fight for fair wages and safer workplaces," Rick Badger, executive director of state employee union AFSCME Council 32 told the Wisconsin State Journal earlier this year. In fact, it's easier for workers once forced into paying union dues to free themselves from the clutches of powerful labor organizations with a liberal political agenda.
Neither reform measure in Wisconsin forced workers out of their unions, but rather provided employees with the opportunity to chose whether their union dues were providing enough benefit to justify participation. It's like any other product or service in consumerism. Customers go - and stay - where they find value. Public and Private Union Membership With the two reforms coming four years apart, Wisconsin has had a unique opportunity to see the differences public and private sector union changes have on each sector separately. The public sector has seen a steep decline from 2011 through last year, with only a short year of relief for unions in 2013 when the rate decrease wasn't as drastic. The rate has continued to fall as more public-sector employees see less value in union membership. The Wisconsin Education Association Council (WEAC), the state's largest teachers union, has seen its membership rolls plummet. WEAC boasted approximately 100,000 members before Act 10. In 2016, the union counted 36,000 members, as reported by the MacIver Institute. WEAC was a long-time supporter of Wisconsin progressives, holding taxpayers hostage with expensive public-sector employee contracts. It used, and continues to use, its members' money to support Democrats and union-friendly candidates. WEAC was once Wisconsin's mightiest lobbying force, spending $1 million lobbying the state Legislature in the first half of 2009 alone. WEAC's political action committee has spent next to nothing since the recall elections in 2012. Private sector unions have fared a bit better. Right to work does not place limits on collective bargaining like Act 10 does, nor can it under labor laws. Rather, the law simply prohibits compelling workers to participate. Private-sector membership dropped significantly after right to work passed but stabilized (even increased slightly) in the year since. Public-sector unions will have to continue to fight hard to prove their worth to newly empowered members if they do not want to experience the same retention problem the public-sector has. In 2015, Wisconsin's three AFSCME councils merged. Badger told the State Journal that the union "is getting back to organizing basics" and rebuilding grassroots efforts. What that means in terms of customer value isn't clear. Wage Premiums One of unionists' favorite talking points is the wage premium, or the amount a union worker makes over a nonunion counterpart. Given the top-ranking states in wage premium are right-to-work states, there is further evidence that liberating workers from compulsory union membership is a benefit for labor. A 2016 report by the Midwest Policy Institute calculated the states with the highest wage premium. Wisconsin had the 12th highest (10.99 percent). Of the eleven states that ranked higher, eight are right-to-work states as well, including all of the top five. Union leaders have conveniently ignored the reason right-to-work states rank higher. When union members have the choice to participate or not, employees receiving a lower wage benefit often leave their unions, and those benefitting remain. Free-market principles dictate that an effective union that provides substantial benefit, or at least perceived value, need not worry about members leaving in a right-to-work state.
The accuracy and relevance of the wage premium statistic, however, have been hotly contested in recent years and it's difficult to measure whether union members see a benefit in wages at all. Public Sector Employment In the fight over Act 10, union officials declared that state employees would leave the public sector in record numbers. It turns out that's not true. While there was a substantial decrease in public-sector employees following the economic downturn of 2009, there has been an uptick in state workers since 2012. The public sector still pays well and the minimal contributions that state employees have to pay into their benefits have not caused a government worker exodus. In fact, the 12 percent minimum health insurance contribution stipulated in Act 10 to help reduce costs, is still far below the Midwest private sector average contribution of 22 percent.
While the number of state employees has not decreased significantly, the number of public-sector union members certainly has. When given a choice, workers are choosing workplace freedom over compulsory union dues. M.D. Kittle contributed
Sales Roundtable Monday, November 13th, 2017 | Time: 7:30 a.m. - 9:00 a.m. Location: CTaccess, 740 Pilgrim Parkway, Elm Grove
Leveraging CRM’s for Maximum Sales & Marketing CRMs are a vital tool in your sales arsenal, but how can you use it to maximize your sales? Fred Varin of TopLine Results will be our featured presenter to give you an overview on what to look for when choosing a CRM and how to utilize it for driving your sales and marketing efforts.
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New Survey: Small Business Positive on Most Matters Raymond Keating, SBE Council, Washington D.C. There’s good news to be heard from small businesses in a survey from Dun & Bradstreet and Pepperdine Graziadio School of Business and Management. Indeed, the news is good largely across the board compared to a year earlier, except for demand for financing.
Positive About Growth, Profitability, Hiring A few of the positives include: • “In Q3 2017, 87 percent said they are extremely or somewhat confident their business will grow this year compared to 80 percent in Q3 2016.” • “In Q3 2017, 63 percent of all businesses said they were profitable, up from 56 percent in Q3 2016, a 12 percent increase year over year. Seventy five percent of small businesses (with revenues of $500K – $5 million) reported positive operating profits in Q3 2017, up from 65 percent in Q2 2017.” • “In Q3 2017, 66 percent of businesses said they plan to hire in the next six months (consistent with Q2 2017 at 65 percent) and up 10 percent compared to a year ago (60 percent Q3 2016).” As for those not looking to hire, it was noted, “Among companies that said they would not hire in the next six months, 21 percent named ‘economic uncertainty,’ 16 percent said ‘ability to find employees’ and 14 percent said ‘government regulations and taxes’ as the reason.”
Perennial Concern: Financing and Access to Capital However, there are some concerns on the financing front. Consider two points reported from the survey: • “While more small businesses are reporting profits, they are also indicating that the current financing environment is restricting growth opportunity – 43 percent said the current business environment is restricting growth in Q3 2017 compared to 32 percent of mid-sized businesses.” • “Demand for financing is down across the board among all size businesses. Financing for planned growth or expansion, including acquisitions not yet realized was down from 66 percent in Q2 2017 to 62 percent in Q3 2017.” This D&B/Pepperdine business survey lines up with others over the past near-year in terms of showing more confidence among businesses. As for some concerns on the financing front, part of that can be alleviated by rolling back the regulatory monstrosity known as the Dodd-Frank financial regulation law and make some overdue improvements regarding Security and Exchange Commission (SEC) rules, including some crowdfunding fixes. (See recent SBE Council analysis on DoddFrank here, here, here, here, and here.) As always, small business owners are a resilient and optimistic bunch. All government needs to do is provide pro-growth relief from taxes and regulations, remove barriers that hurt capital access and formation, and the entrepreneurial sector will drive our economy forward. -------------------------------------Raymond J. Keating is chief economist for the Small Business & Entrepreneurship Council. Keating’s latest book published by SBE Council is titled Unleashing Small Business Through IP: The Role of Intellectual Property in Driving Entrepreneurship, Innovation and Investment and it is available free on SBE Council’s website here.
5 W’s to Consider When Replacing Desktop Equipment Scott Hirschfeld, CTaccess
It’s 2017, and all of us who have oversight for IT expenditures understand that technology needs to be replaced. The issue is that many of us still wing it and really don’t have a solid strategy for replacing equipment. This creates some serious issues, and ultimately creates a higher volume of IT issues and team frustration. What do we mean by desktop equipment? Desktop equipment is the stuff that our team works on every day. It is our main device and the peripherals attached to it. For many this is a Windows PC, for some, it is Mac or Apple device. And, then we have the keyboard, mouse, monitors, keypad, and maybe some other attached devices. 1. To understand Equipment Refresh, we first need to understand the WHY. In some ways, it is contrary to logic. Why would I replace perfectly good equipment just because of its age? Much of the reason hinges on the productivity of our workers. Computers are basically productivity tools. It is expensive for one of our team members to be unable to work. It becomes very expensive very quickly, if their technology costs them 15 minutes per day because it is slow, or they must work around a frequent glitch, or their computer completely fails and kills productivity for a day or more while it is replaced. If these types of things are happening, it creates a great deal of frustration for the team member who is experiencing it. In addition, leaving computers in play for extended periods of time can create serious security vulnerabilities. Old operating systems and old technology have a much higher risk of compromise by spyware, viruses, and other hacking tools. Finally old systems are just harder to support. They cost more to prop up, they have a higher volume of issues, and the skills necessary to work on them are often left behind as new technology comes out. One of the ways we quiet a network down and make it stable is by paying attention to replacement.
2. For these reasons, equipment should be replaced on a cycle, but WHEN? The answer is pretty straight forward. Most equipment should be replaced at the outside, before it reaches the 5-year mark. This is statistically and experientially when risk of failure goes up. Those hard drives and fans turn continuously and those electronic parts heat up and cool off, and eventually they fail. And after 5-years, it is likely your OS (operating system) is out of date, and the PC registry has grown and expanded and gotten bulky with updates and software loads. Keyboards and mice fit this same 5-year outside mold. They have been in the hands of someone for a very long time and are typically included with a new machine anyway. Monitors can often go beyond the 5-year mark, but it is important to keep in mind that reducing eye strain with newer, bigger screens, and newer digital connections (less flicker) like HDMI can be valuable to the well-being of your team. If you have not replaced monitors in more than 6 years, you may want to evaluate newer, bigger units or dual monitors. There are many studies that prove it increases productivity to have more screen real estate.
3. Is the no-more-than-5-year rule hard and fast? It really depends on WHO. Who will be using the equipment? How much of a power-user are they? Many people allocate equipment by seniority or by job title. However, the right way to look at replacing equipment is based on how a team member uses their system. Are they a power user? It is often true that an administrative person is working on their computer all day with many windows open, and really pounding out work based on their computing power, while an executive spends time in meetings and reading emails and is not consuming as much of their computer resources. Or, the engineer using AutoCAD pushes their machine to its limits while the walk-up station in the warehouse may only be used a few times a day. Users who rely on their machines all day long to produce their product often need replacement sooner than the 5-year mark. And, new upgrades to products like Photoshop, Solidworks, and Revit may make new equipment at the 3-year or 4-year mark a good idea.
4. So, WHERE should we implement this replacement strategy? Across our whole business. We use a tool here at CTaccess that allows us to dynamically track inventory across our whole organization and use this same tool for our customers. It makes it easy to look at an active inventory of desktop equipment and create an aged report. We can then create a replacement plan so that nothing is a surprise. Often, we create a schedule based on dividing the number of units by 4 or 5 and plan to replace that number each year. With some careful planning, IT expenditures should no longer be a surprise, support issues should go down, and user productivity should go up.
5. The question then comes down to WHAT kind of new equipment should we be installing. This obviously varies somewhat based on the use or the user. Autocad, Photoshop, Solidworks and other heavy-duty applications require special stuff. The best philosophy for replacement is to purchase a robust machine. Again, we are protecting the productivity of our team members, and we also want to buy high enough that we don’t need to replace more frequently than we should. Right now, for a standard business machine, I would recommend the following: i5 or i7 4th generation processor, at least 8GB of RAM (12GB or 16GB is even better and only a little more), an SSD hard drive (this will cost more, but is worth it for speed), Windows 10 Pro, at least a 22” monitor (more is always better on the eyes and two is better than one) and a new keyboard/mouse.
One other recommendation, and this is for free! The temptation is to do what our tech team refers to as a Round Robin. I’ll get Bob, the power user a new unit. I’ll move his to Teresa, and Teresa’s to the warehouse. This is almost never worth it. That used PC will need to be cajoled into its new function and it will still be old, you will have interrupted the user, given them something that may be perceived as a retread, and you will still need to replace it soon. The Round Robin has hidden cost that we don’t usually see. I recommend a new machine for a new user and using the old as an emergency spare, or donating it or recycling it. It will save you money in the long run. 6.
President’s Circle IBAW / DALE CARNEGIE PRESIDENTS CIRCLE A LEADERSHIP PROGRAM FOR CEOs, PRESIDENTS, AND BUSINESS OWNERS
As the CEO, President, or Owner you are asked to produce more results with fewer resources, meet and exceed competition, innovate and motivate. This creates very difficult teams and leadership challenges. Leaders must encourage teamwork, bottom-up idea generation, alignment, loyalty and above all commitment. Rather than direct and dictate, leaders must inspire and motivate!
The Presidents Circle: The IBAW and Dale Carnegie Training have developed an exclusive Leadership program for IBAW members only. The Presidents Circle combines peer group engagement and highly targeted executive Dale Carnegie Training among peers to help you achieve significant results. These results will be achieved by providing insights, peer challenges, and developing leadership skills which are aligned with your organization and which will help drive agendas. By combining corporate mission, vision and values with our unique methodology employees will begin supporting a world they helped create.Ultimately, the only sustainable competitive advantage is the innovation, motivation, and creativity of the employees of an organization. Establishing a strong leadership culture provides the environment where innovation and creativity can flourish.
Program Specifics: • • • •
Meetings with other IBAW CEOs/Presidents/Business Owners 10 monthly meetings Dale Carnegie Executive Leadership Training workshop each session. Round Table Issues Discussed and Resolved
• • •
Guided Yearly planning Accountability among peers. Business Results
The President’s Circle will help you achieve results by: • • •
Providing training among peers Creating and sustaining change initiatives Ensure continuous improvement and bottom-line impact
• • • • •
Align the organization behind a common vision Develop a habit of fact-based decision making at every level. Strengthen and implement strategic planning Create a value based culture to ensure loyalty Build energy and trust up and down the organization to insure customer loyalty.
Program Leader: Steve Bobowski
“Knowledge isn’t power until it is applied.” -Dale Carnegie
Commitments: • Attend meetings • No cost for meetings, a benefit of IBAW membership •
Referrals or 3 enrollments
This program is now forming and is limited in the number which can attend. For more information, contact Program Leader Steve Bobowski by clicking here.
When Should You Update Your Logo? Scott Seroka, Seroka Brand Development Let’s begin by getting the obvious out of the way – for any logo designed in WordPerfect or purchased online at a bargain, it should probably be updated. Contrary to what some believe, the many components of a logo, such as color(s), font, shape and design/ image play a vital role in evoking emotions buried deep in the subconscious of consumers. If a considerable amount of thought did not go into the development and design of your logo, you may wish to reconsider its significance. I’ve seen a fair share of logos that were poorly or sloppily designed, with little or no consideration given to its core purpose or to the many applications where logos must be used. It’s akin to hiring a iPhoneographer instead of a professional photographer for a wedding, because a picture is just a picture. Right? Um, no. For the most part, people don’t know why they like or don’t like a logo, because unless you’re a logo designer or an artist, you’ve probably never thought about it. Again, there are many subliminal components that go into the development of a good logo, such as the use of color(s), font, shape and image. When all critical components are strategically blended together, a well-designed logo will serve as a good visual representation of the brand consistent with its purpose and values. For example, you would never see a funeral home using red in its logo, at least I hope not. And yellow, a color representing warmth, would not bode well for a manufacturer boasting about its toughness and the durability of its products. Also, logos with intricate designs can be a nightmare to work with in many applications. Some designers are so talented that they find ways to create hidden meanings in some of their logo designs. FedEx serves as a perfect example with its arrow pointing to the right between the “E” and “x,” and amazon.com has the smile underscoring its name. Validation In the brand development and logo design process, it’s typically a very wise idea to validate the brand and logo with others inside and outside of the industry. Logo validation is nothing more than putting a logo in front of different sets of eyes (ideally from different cultures) to ensure it can’t be misinterpreted, misunderstood, or, most importantly potentially, offensive. Logo validation also provides insight into the quality and effectiveness of design. When Tropicana abandoned its colorful and charismatic packaging for something more muted and subtle, the reaction wasn’t favorable. In fact, it was so unfavorable that Tropicana destroyed tens of thousands of pre-made cartons and reverted to its original packaging. Also, here in Wisconsin, Wisconsin Electric and Wisconsin Gas merged to create the new name, We Energies. The only problem was that the “e” in we and the “e” in energies were graphically placed too close together and it read, “weenergies.” As soon as the logo was rolled out, everyone referred to We Energies as “weenergies, ” and the logo was quickly modified to simply “We”. If my insights have made you pause and think about your logo, at the very least, validate your logo. Afterward, you'll know what to do.
: S E L A S
2nd Monday of the Month SALES ROUNDTABLE 7:30 am - 9:00 am Free & open to IBAW members only Register at IBAW.com
Sales can be a tough road of ups, downs, potholes and a few bumps. But it can also be fast paced, exhilarating and rewarding. If you’re in sales, you know there are things only other sales people understand; the thrill of scoring the big account, the uncertainty of “let me think about that.”, the frustration of phone calls or emails that don’t get returned. IBAW’s Sales Roundtable is a support and knowledge resource for sales professionals, business owners, marketing and branding experts who are charged with driving sales. Join us to discuss the strategy, tactics, inspiration, and motivation to increase sales. It’s a FREE benefit of your membership! Who should attend: • Sales professionals of any level. • Business owners • Sales Managers • Marketing & P.R. Professionals
“For many years I ran sales meetings for as few as 3 and as many as 22 sales rep’s now I can go as a participant once a month to IBAW’s Sales Roundtable.
BONUS! Join the IBAW Sales Roundtable and get a compact disc with the BEST in Sales Survival Music. Play it to pump you up before that big meeting or to console you if you hit a sales slump. Guaranteed to make life better.
It’s a focused meeting and everyone wants the same thing – to be more effective at selling.” - Jerry Wick, CEO, Custom Data Too Mail
IBAW is on an upward trend of growth and we are actively recruiting businesses just like yours to join! When you join IBAW your entire company is a member - anyone from your team can attend our fine educational and networking events. Help yourself, your business AND your Team Members. Come on in...weâ€™re open for business!
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2017 Membership Committee
Jake Hansen Jacsten Holdings
Charles Fry Robert W. Baird
Mike Poludniak Merrill Lynch
Tom Parks Annex Wealth Mgt.
Legislative Fix Moving Ahead for Wisconsin’s New Manufacturing & Agricultural Credit Jim Brandenburg, CPA, MST - Sikich LLP
In IBAW meetings and publications in recent years we have introduced you to Wisconsin’s new tax incentive - the Wisconsin Manufacturing and Agriculture Credit (referred to as the “MAC”). The MAC came about in 2011 to provide an incentive for Wisconsin manufacturers and agricultural companies to remain and grow here, and also perhaps to have out-of-state companies move here. It was scheduled to begin in 2013, and when fully phased-in by 2016 it would essentially exempt any Wisconsin manufacturing and agricultural income from Wisconsin income tax. The MAC was championed by Representative Dale Kooyenga and Senator Glenn Grothman in the legislature.
Magazine Content Needed Consider Submitting an Article!
The MAC, however, had some problems for individual taxpayers when it was drafted and this glitch was recently identified. Here is the issue in a nutshell: the MAC would reduce a taxpayer’s Wisconsin individual income tax, but then would trigger a Wisconsin minimum tax for nearly the same amount. Thus, there may be little, if any, net savings for the MAC in 2013 (a “MAC Attack?”). The legislature is trying to remedy this situation now so that taxpayers can realize the proper tax savings with the MAC on their 2013 Wisconsin individual tax returns.
The IBAW magazine is in need of content, we rely on our members and sponsors to supply us informative articles. The digital magazine is sent out to over 650 contacts statewide and the magazine is parked on the web where, on average, it gets over 1100 views.
Legislative Update: It seems that all key legislative leaders are now on board to correct this issue. It was approved by the legislature’s Joint Finance Committee last week. The Senate and Assembly will be in session in March and voting on final passage for several bills, one of which is this tax bill with the MAC correction. It looks like the legislative timetable will have the bill passed near the middle of the March, before going to the Governor. Thus, a best guess now is that the bill would be enacted into law somewhere in the latter half of March, 2014. MAC Attack Options: For any of our individual taxpayers taking advantage of the MAC, this may present some filings logistics. Here are the possibilities:
1. Best case scenario - in some cases the taxpayer’s share of the MAC for 2013 will be used and not result in a Wisconsin Minimum Tax. A taxpayer in this situation could go ahead and claim the MAC and file their 2013 Wisconsin individual return. There would be no need to wait for the legislation to pass.
Consider writing an article on a timely business related topic to your particular field of business. This is an outstanding opportunity for you and your company to gain exposure and increase your brand awareness to a statewide audience. There is no cost to submitting an article.
2. Next, a taxpayer has generated a MAC for 2013, but it will trigger a Wisconsin Minimum Tax. The taxpayer in this case could wait until the law is changed (and then wait a little for the WDR to update its computer processing systems) and then file their Wisconsin tax return and claim the MAC, and not incur the Wisconsin Minimum Tax. This could present a tight timeline for the April 15 deadline, and you may need to file for an extension.
3. Similar case as #2, but this taxpayer could file their Wisconsin individual return with the MAC, but also incur and pay a Wisconsin Minimum Tax for 2013. Then, once the corrective law is enacted go back and file an amended 2013 Wisconsin tax return to obtain the proper tax benefit of the MAC. You would not need extend, but you would need to amend. We’ll keep you posted as this legislation moves forward. If you have any questions, please contact Jim Brandenburg or Brian Kelley at Sikich, LLP in Brookfield (262)754-9400.
Contact Steve Kohlmann for details.
Articles submitted by our members & sponsors.
Welcome New IBAW Members!
Meeting Recaps 2014 Wisconsin Manufacturing Knowledge Summit
On June 20, 2014 the IBAW partnered with the Tool, Die & Machining Association of Wisconsin (TDMAW) to offer Wisconsin manufacturers and their suppliers a unique look at trends within the industry and to also report on some of the challenges the industry faces in the next 5 years.
Power Test, Inc. is an industry leader in the design, manufacture and implementation of dynamometers and control systems.
Special thanks to the event sponsor, First Business Bank for their efforts in helping organize this event.
For more than 37 years, Power Test has provided specialized test equipment to manufacturers, rebuilding facilities and distributors globally. Our products can be found in use at these facilities in nearly 100 countries on six continents.
Our headquarters and manufacturing operations are located in Sussex, WI with sales representatives worldwide. Our unparalleled customer service is well known throughout the industry. Power Test employs a dedicated staff of talented machinists, fabricators, electronic technicians, assemblers, designers, engineers, software developers, and administrative and customer service personnel. Our exceptional product life and excellent customer service is well known throughout the industry and has made us one of the industryleading dynamometer manufacturers. Our dedication to the customer and to the advances in powertrain component testing keep us there.
Power Test N60 W22700 Silver Spring Drive Sussex, WI 53089 Phone: 262-252-4301
4 Advanced Waste Services Advanced Waste Services is an environmental services company that provides wastewater recycling and other waste and risk elimination services to manufacturers in all industries. Each day, AWS helps hundreds of businesses, both large and small, meet their community and environmental obligations. Annually, we collect, treat and recycle more than 50 million gallons of contaminated wastewater into clean, reusable water and other valuable resources like fuel, steam and electricity. AWS is constantly helping our clients manage, reinvent and improve their sustainability successes. For example, we recently partnered with Forest County Advanced Waste Services Potawatomi Community to help Wisconsin food and beverage manufacturers convert 1126 South 76th Street food waste into clean, green renewable energy. Suite N408B West Allis, WI 53214 Founded in 1993, AWS employs 55 people in the Milwaukee area and a total of 150 people companywide in 5 states. 414-847-7100
Photo Key 1: A full house in the main ballroom of the Wisconsin Club as IBAW & TDMAW members prepare to hear about the state of manufacturing and the challenges the industry faces in the workforce.
2: David Vetta of First Business Bank delivers opening remarks and highlights the importance of a strong relationship between banking and manufacturing working together for success. 3: New IBAW President, John Weber of Hypneumat addresses the change in IBAW Bylaws and calls for voting in new board officers. 4: Kent Lorenz of Acieta gives the main presentation on “Manufacturing Matters” pointing out the trends on manufacturing now and what to expect in the future. 5: Outgoing IBAW President, Steve Van Lieshout receives his award for his efforts as 2013 - 2014.
6 Photos courtesy of Tim Townsend.
6: IBAW Executive Director, Steve Kohlmann (Left) presents David Drumel with an award for his service on the IBAW board.
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As an advocate for small business, the IBAW offers intimate meetings on relevant topics such as Leadership, HR, Sales, and Political Issues. Business Leaders...Leading Business
Join us. “...the sales round table was very informative, Judson will be renewing our membership in the IBAW. Thank you and I look forward to more roundtables!” Dominic Misasi, Judson and Associates s.c.
“ I almost always come away from an IBAW meeting with useable material that helps me with my business. Many times, a speaker will give me something that applies to ITU AbsorbTech. Other times, it is a conversation over breakfast that gives me value.” Jim Leef, President & CEO, ITU AbsorbTech
“Being involved with a business organization like the IBAW is critical for small business owners in Wisconsin for growth and to have a voice with government.” Rich Meeusen, CEO, Badger Meter.
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IBAW membership is based on the number of full time employees in your company.
Number of employee in your company
1 - 15 Employees ...............$300.00 16 - 25 Employees ...............$400.00 26 - 49 Employees.................$500.00 50 or more Employees...........$600.00 SPECIAL OPTION: Prepay breakfasts meetings. Get 12 for the price of 10!
MEMBERSHIP BENEFITS apply to your entire team. • Monthly Sales Roundtable - free with membership • Monthly 5 Star Breakfast Program • C Level Peer to Peer Networking • Monthly Digital Statewide Magazine - free with membership • Informative workshops • Business Behind the Scenes Tour • Legislative Updates & Representation from Madison & Washington, D.C. ...AND MORE!
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