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OCT. 2012

E-mail: Is It Casual Conversation or a Binding Contract?

Get Funded! Banks have money to lend. Does business have the will to use it?

power Lunch by the numbers business Calendar This Issue Tempe Chamber of Commerce Arizona Technology Council

$4.95 INBUSINESSMAG.COM


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October 2012

passionate about your profitability

www.inbusinessmag.com

At Holmes Murphy, we think providing you with innovative answers to the ever-increasing challenge of rising healthcare costs is one

In Business Magazine is a collaboration of many business organizations and entities throughout the metropolitan Phoenix area and Arizona. Our mission is to inform and energize business in this community by communicating content that will build business and enrich the economic picture for all of us vested in commerce. Partner Organizations

of the most important things we can do to affect your company. That’s why we take the time to get to know your company’s challenges and consult with you to provide the highest-quality, lowest-cost solutions — tailored especially for your business.

Rick Murray, CEO Arizona Small Business Association Central Office (602) 306-4000 Southern Arizona (520) 327-0222 www.asba.com

If you are looking for an advisor who understands the complexities of Employee Benefits and a partner who helps you develop the right financial solutions, call Holmes Murphy — the nation’s 22nd-

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Steven G. Zylstra, President & CEO Arizona Technology Council One Renaissance Square (602) 343-8324 • www.aztechcouncil.org

Lynda Bishop, President NAWBO Phoenix Metro Chapter (602) 772-4985 • www.nawbophx.org

Learn more about how Holmes Murphy will be a trusted advocate for you — visit holmesmurphy.com. ©2012 Holmes Murphy & Associates

* Business Insurance, July 2011

Rick Kidder, President & CEO Scottsdale Area Chamber of Commerce (480) 355-2700 • www.scottsdalechamber.com

Mary Ann Miller, President & CEO Tempe Chamber of Commerce (480) 967-7891 • www.tempechamber.org Our Partner Organizations are vested business organizations focused on building and improving business in the Valley or throughout Arizona. As Partners, each will receive three insert publications each year to showcase all that they are doing for business and businesspeople within our community. We encourage you to join these and other organizations to better your business opportunities. The members of these and other Associate Partner Organizations receive a subscription to In Business Magazine each month. For more information on becoming an Associate Partner, please contact our publisher at info@inbusinessmag.com.

Associate Partners Ahwatukee Foothills Chamber of Commerce www. ahwatukeechamber.com Arizona Chamber of Commerce & Industry www.azchamber.com Arizona Hispanic Chamber of Commerce www.azhcc.com Chandler Chamber of Commerce www.chandlerchamber.com Economic Club of Phoenix www.econclubphx.org Glendale Chamber of Commerce www.glendaleazchamber.org Greater Phoenix Black Chamber of Commerce www.phoenixblackchamber.com Greater Phoenix Gay & Lesbian Chamber of Commerce www.gpglcc.org Mesa Chamber of Commerce www.mesachamber.org North Phoenix Chamber of Commerce www.northphoenixchamber.com North Scottsdale Chamber of Commerce www.northscottsdalechamber.org Peoria Chamber of Commerce www.peoriachamber.com Westmarc www.westmarc.org

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It’s time to throw a retirement party for your old HVAC equipment. Your cooling costs can easily represent the largest portion of your summer electric bills, so efficiency is key. Cooler weather makes this the perfect time to upgrade to more energy-efficient equipment and avoid the dreaded downtime. With SRP rebates for new air-conditioning units and programmable thermostats, you can pocket some energy savings and say goodbye to costly repairs. To learn more about these and other energy-saving rebates, or to find an SRP Alliance Contractor to get you started, visit savewithsrpbiz.com or call (602) 236-3054.

F in An C i ng no w Av AilA b le ! National Bank of Arizona is offering qualifying SRP business customers financing for energy-saving projects, subject to credit approval.


Contents

IN BUSINESS MAGAZINE

Get Funded!

BANKING

24

OCT. 2012

E-mail: Is It Casual Conversation or a Binding Contract?

October 2012

Banks have money to lend. Does business have the will to use it?

OCTOBER 2012 • inbusinessmag.com

Funding for Business: Banks Have Money to Lend. Does Business Have the Will to Use It? power Lunch by the numbers business Calendar This Issue

Tempe Chamber of Commerce Arizona Technology Council

$4.95 INBUSINESSMAG.COM

Valley bankers and those associated with the banking industry want business owners to know their institutions continue to be ready to talk lending. And they discuss with Gremlyn Bradley-Waddell the reluctance they are finding among business owners to follow through on approved loans and actually take on the debt. Departments Features

20 Golf: A Swing and a Walk Is Good for Business

Glenn Swain explores the benefit across multiple industries this game brings to the Valley of the Sun.

20

32

11 Guest Editor

30 Nonprofit

12 Feedback

39

Robert Sarver, chairman and CEO of Western Alliance Bancorporation, introduces the “Banking” issue.

Noted business and community leaders Jack Eberenz, Tom Halter and Mary Ann Miller respond to IBM’s burning business question of the month.

14 Briefs 30 E-mail: Is It Casual Conversation or a

Binding Contract?

Attorneys Jon Weiss and Dan Waite offer insight to how seemingly innocuous e-mail exchanges could be considered legally binding.

32 Dealing with ‘Difficult’ Colleagues

Leads to Happier Customers

Ron Kaufman discusses the ultimate benefit in customer relationships to a company resolving its internal strife. Special Sections

43 Workplace Safety

SCF Arizona addresses workplace safety concerns.

51 Tempe Chamber of Commerce 59 Arizona Technology Council 67 Business Lending Guide 2013

The annual lending resources and contacts guide.

“iTunes Revisited,” “Be in the Know: World Economic Survey Released,” “BodeTree Business Consult,” “Build Business with PHX,” “An Arizona Credit Union Part of International Partnership,” “WeekendZona,” “Scottsdale Corner Joins Urban Redevelopment Trend,” “Mining Project a 25-year Boon to Jobs and Business” and “On-demand Mobile App Testing”

18 By the Numbers

Competencies of U.S. President vs. corporate execs is subject of global CEO survey.

22 Trickle Up

View from the top looks at how Benito Almanza leveraged an unusual background into a leadership position with one of the nation’s leading financial institutions.

31 Books

New releases inform on operating business in the digital world.

Boys & Girls Clubs of Greater Scottsdale The Wellness Community

39 Assets

2013 Lexus GS 450h Hybrid Plus: “Write-off Business Gadgets”

41 Power Lunch

Stingray Sushi is where taste, sound and the visual come alive. Plus: “South of the Border”

82 Roundtable

“Women Are Changing the Face of Business in the Private Sector” Business Education

38 If Cash Is King, then

Working Capital Is God

Dennis Niven enlightens business owners on working capital management in this first of a three-part “Finance” education series. On The Agenda

35 Spotlight

ASU Spirit of Enterprise Awards MBA Women International Conference

36 Calendar

Business events throughout the Valley

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October 2012 • Vol. 3, No. 10

Publisher Rick McCartney Editor RaeAnne Marsh

Art Director Benjamin Little

Contributing Writers Gremlyn Bradley-Waddell Mike Hunter Ron Kaufman Sue Kern-Fleischer Dennis Niven Michelle Patterson Glenn Swain Dan Waite Jon Weiss

Photographer-at-large Dan Vermillion Advertising

Operations  Louise Ferrari

lferrari@inmediacompany.com

Senior L ouise Ferrari Account Executives lferrari@inmediacompany.com

Cami Shore

cshore@inmediacompany.com

Greg Stiles

gstiles@inmediacompany.com More: Visit your one-stop resource for everything business at www.inbusinessmag.com. For a full monthly calendar of business-related events, please visit our website. Inform Us: Send press releases and your editorial ideas to editor@inbusinessmag.com.

President & CEO Rick McCartney Editorial Director RaeAnne Marsh Senior Art Director Benjamin Little

Corporate Offices 6360 E. Thomas Road, Suite 210 Scottsdale, AZ 85251 T: (480) 588-9505 F: (480) 584-3751 info@inmediacompany.com www.inmediacompany.com

Vol. 3, No. 10. In Business Magazine is published 12 times per year by InMedia Company. POSTMASTER: Send address changes to InMedia Company, 6360 E. Thomas Road, Suite 210, Scottsdale, AZ 85251. To subscribe to In Business Magazine, please send check or money order for one-year subscription of $24.95 to InMedia Company, 6360 E. Thomas Road, Suite 210, Scottsdale, AZ 85251 or visit inbusinessmag.com. We appreciate your editorial submissions, news and photos for review by our editorial staff. You may send to editor@inbusinessmag.com or mail to the address above. All letters sent to In Business Magazine will be treated as unconditionally assigned for publication, copyright purposes and use in any publication, website or brochure. InMedia accepts no responsibility for unsolicited manuscripts, photographs or other artwork. Submissions will not be returned unless accompanied by a self-addressed, stamped envelope. InMedia Company, LLC reserves the right to refuse certain advertising and is not liable for advertisers’ claims and/or errors. The opinions expressed herein are exclusively those of the writers and do not necessarily reflect the position of InMedia. InMedia Company considers its sources reliable and verifies as much data as possible, although reporting inaccuracies can occur; consequently, readers using this information do so at their own risk. Each business opportunity and/or investment inherently contains certain risks, and it is suggested that the prospective investors consult their attorney and/or financial professional. © 2012 InMedia Company, LLC. All rights reserved. No part of this magazine may be reproduced or transmitted in any form or by any means without written permission by the publisher.

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Robert Sarver, Chairman and CEO, Western Alliance Bancorporation

Guest Editor

Banks Are Looking to Lend

Robert Sarver is chairman and CEO of Western Alliance Bancorporation, a $7 billion bank holding company doing business in Arizona, California and Nevada. Sarver has been the managing partner of the Phoenix Suns for the last nine years, and during his tenure the team has produced the third-best winning percentage in the NBA. Sarver also serves on the boards of directors of SkyWest Airlines, Meritage Corporation, the NBA, the Weil Foundation and the Sarver Heart Center at the University of Arizona.

The economy in Arizona is steadily recovering and banks have increased lending to businesses. The past four years have been tough for big and small business alike, and there is no question that financial institutions have been tested through what has been the worst economic cycle since the Great Depression. Banks that have had access to capital and were proactive navigating through these tough times are today prospering. A good banking partner is an important piece for a successful business. Alliance Bank and our holding company, Western Alliance Bancorporation, have deep roots in Arizona. Many of our senior management, myself included, are native Arizonans and have worked with businesses through the highs and lows of past economic cycles. We do our best to offer consistency and predictability to our customers. When we began Alliance Bank in 2003, our mission was to serve Arizona businesses as a trusted and consistent banking resource. We have kept that commitment as an active lender to businesses through the hard years as well as the good ones. Today, we are Arizona’s largest locally headquartered banking company with assets of more than $7 billion. Over the last 12 months, we have generated more than a billion dollars in new loans to businesses while also maintaining strong asset quality metrics. We have worked hard to fill a needed void in credit during these lean years. A healthy banking sector remains a prerequisite to a healthy economic climate because commercial banks are the most reliable source of expansion capital for business growth. The major impact on banking coming out of the financial crisis will be capital requirements higher by as much as one-third. What this means is, for banks to survive and prosper, they will have to be significantly more efficient. In the long run, investors will be unwilling to put up higher capital without the prospect of higher returns. Look for this reality to drive significant consolidation in banks over the next decade. This issue’s cover story explores the changing financial landscape that banks and clients are navigating. Industry leaders discuss how they are addressing the need to encourage commerce and continue banking’s role in supporting it. In another industry focus, writer Glenn Swain looks into the broad economic impact of golf, the Valley’s famous recreational sport. In this issue’s “Legal” feature, attorneys Dan Waite and Jon Weiss of Lewis and Roca, L.L.C. describe how carelessly considered e-mail can put a business in an unexpected contract situation. Tips on how businesses can maintain positive and productive relationships among their employees is the focus of Ron Kaufman’s HR article. And in the first of a three-part “Business Education” series, B2B CFO executive Dennis Niven discusses the crucial whys and hows of managing a company’s working capital. Also in this issue are two special sections: “Business Safety,” which covers many aspects of the crucial topic of workman’s compensation, and the annual In Business Magazine “Business Lending Guide” for 2013. With its informative articles on business and relevant coverage of our Metro Phoenix business community, In Business Magazine is a powerful tool for the entrepreneur and corporate exec alike. Sincerely,

Robert Sarver Chairman and CEO Western Alliance Bancorporation

Connect with us:

What a Relief Slowly but surely, the economy is coming back. Banks are working hard to lend, restructuring their own models to prosper and looking forward to full recovery soon. Business owners are tepid about jumping right into a booming market and are pacing themselves as they grow. It is a great time to be building business in Arizona, and our banking community has become a great friend to business owners statewide.

inbusine ssmag.com

We want to thank Robert Sarver for agreeing to be our Guest Editor for this issue. His insight and love for this community is apparent and he, along with many other banks supporting In Business Magazine, is doing great things to resurge our economic woes. Arizona will be the place to be doing business and our banking community is poised to help. —Rick McCartney, Publisher

Story Ideas/PR: editorial@inbusinessmag.com Business Events/Connections: businessevents@inbusinessmag.com Marketing/Exposure: advertise@inbusinessmag.com Or visit us online at www.inbusinessmag.com

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Feedback

Valley Leaders Sound Off

Executives Answer

Financial institutions are facing issues that range from implementing increased oversight measures to a wariness by businesses of incurring debt to a lack of trust among the general public. Yet a functioning commerce relies on the flow of capital. What do you see as the greatest challenge to business working with traditional funding institutions?

Jack Eberenz

Tom Halter

President Franchise Integration Sector: Franchising My clients are franchisors who have potential franchisees that are seeking funding to start their franchise. Traditionally, the rate of failure for franchisees is much less than for startup businesses, but we still see that local banking relationships are unable to or unwilling to provide loans. This has encouraged a whole new segment of lending — companies that specialize in finding the right lender and assisting in qualifying the franchisee and qualifying the franchise system on their success rate. A development that is now emerging is private equity funds — ones that are not seeking venture capital-type returns — starting to develop lending programs for franchisees. Their rates are slightly higher than normal banking rates but they make up for that in speed, ease of effort and flexibility, since their loans are not subject to banking restrictions. Franchisees are today often funded by one or more avenues, including Patriot Express small business loans, U.S. Small Business Administration, equipment leasing, private equity and some franchisor assistance. It’s a complicated new approach and slows down growth and job creation. Franchise Integration franway.com

Jack Eberenz, president of Franchise Integration, is a nationally recognized consultant to franchisors and has clients from coast to coast. He has more than 30 years’ experience in franchising, at all levels. He serves on several boards of directors; is chairman of the board of one national franchisor; and has clients of all sizes, from start-up franchisors to international companies.

Mary Ann Miller President and CEO Tempe Chamber of Commerce Sector: Business Advocacy Group In many ways, traditional funding institutions and fast-growing companies are looking in different directions. The lenders are looking at assets and history while the entrepreneurs are looking at opportunity and nimbleness. Starting and growing a business is risky at best, and public sentiment toward large institutions has made them even more risk averse. Even when a traditional lender is willing to take a risk, the process is often so lengthy that the peak market opportunity may be lost by the growing business.

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Partner Gust Rosenfeld Sector: Law In my view, the greatest challenge facing businesses is the tightening of underwriting standards by lenders. In regards to trying to obtain a new loan or extend an existing loan, underwriting standards have gotten much more stringent. This means the loan-to-value ratios that the lenders are willing to fund are smaller and equity requirements are larger. In addition, even businesses with a long history of profitable operations likely suffered losses in the past few years and, obviously, it is much more difficult for borrowers suffering a cash burn to obtain new financing or to renew existing financing. Even loans secured by a performing asset may be difficult to refinance in today’s lending environment. For instance, in a loan renewal for a loan secured by commercial real estate, there will almost always be a loan curtailment requirement. The amount of the curtailment will be driven by the decrease in the real estate value and how much more stringent the underwriting criteria have become since the loan was first made. Gust Rosenfeld gustlaw.com

Tom Halter is a member of Gust Rosenfeld P.L.C.’s real estate and commercial practice sections. Halter’s practice focuses on real estate transactions and lending. He represents both lenders and borrowers in asset-based real estate finance and other commercial lending transactions. His real estate practice consists of sophisticated real estate projects for individuals, national retailers, developers and institutional clients throughout the Western United States.

This is compounded by the fact that many businesses are considered risky investments by their very nature. A tech company may have an unknown competitor across the globe working on exactly the same product. Even restaurants are risky because of their small margins. Traditional lenders are really no different from the general public. You have some people who will put their money in hot stocks and others who will put everything into a savings account. Lenders just tend more toward the balanced portfolio. Tempe Chamber of Commerce tempechamber.org

Mary Ann Miller, president and CEO of the Tempe Chamber of Commerce since 1999, was named the Local Chamber Executive of the Year in 2008 by the Arizona Chamber of Commerce and Industry. She has more than 20 years experience in marketing and community relations, working in both the for-profit and not-for-profit sectors. She currently sits on the boards of the Rio Salado Foundation, Tempe Convention and Visitors Bureau, and Arizona Chamber Executives.

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Briefs

Quick and to the Point

Bytes

iTunes Revisited Apple rolls out the new version of iTunes

this month. The Mac- and PC-friendly edition will be a completely redesigned player, a “newly remodeled” store, and will include more iCloud features to make it a more simple-to-use version that promises not to throw the loyal Apple-ist off his or her game. apple.com/itunes

The International Monetary Fund’s Financial Access Survey was released last month and is available for study. The FAS is the one source of global supply-side data on financial inclusion, encompassing internationally comparable basic indicators of financial access and usage. This content is the data source for key indicators for G20 countries. fas.imf.org

BodeTree Business Consult A new software program designed and beta tested in Phoenix is BodeTree. Designed to work with QuickBooks, this software will improve company performance, generate overview reports, compare a company to its competition and even determine its worth. A great small business tool. bodetree.com

Build Business with PHX The City of Phoenix has a Vendor Management System that it uses to procure business through local venders. Businesses will find registering in their category of business may bring new business on a grand scale. phoenix.gov/business/contract/vendor/vms

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An Arizona Credit Union Part of International Partnership Federación de Cajas Populares Alianza, a credit union association located in Guanajuato, Mexico, looking to expand its presence into the United States, has chosen to partner with Mountain West Credit Union Association, which has offices in Phoenix and Denver. “Alianza is eager to share insights as to how to serve the Latino members in the U.S. credit unions better,” says Victor Miguel Corro, vice president of the Worldwide Foundation of Credit Unions’ International Partnership Program, which arranged the partnership agreement. The partnership will focus on strengthening Alianza’s member credit unions through the development of new products and services. Participating credit unions will also provide mutual assistance in training, member service, loan underwriting and marketing. “We are all very excited about the opportunity to have the unique experience to help perpetuate the credit union movement and assist in developing a stronger international credit union system through expanding cooperative networks,” says Mike Williams, chairman of Mountain West Credit Union Association. To Alianza’s strength of 21 member credit unions throughout 11 Mexican states, Mountain West Credit Union Association adds its 154 member credit unions throughout Arizona, Colorado and Wyoming. —RaeAnne Marsh Federación de Cajas Populares Alianza falianza.sytes.net Mountain West Credit Union Association mwcua.com

Visualize This

Seeing is Believing WeekendZona

Get to know Arizona through local businesses

and opportunity as presented by bloggers Dean and Nina. They introduce adventurous types to what is happening in various towns around Arizona, showing off unique local flavor (and providing local businesses great exposure). Local First Arizona is behind this venture and it is paying off for local business throughout Arzona. localfirstaz.com/weekendzona

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Photo courtesy of Architekton

Be in the Know: World Economic Survey Released


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Briefs

Quick and to the Point copper mining over the decades and the in-situ type of extraction the Florence Copper project will use “is another example of perfecting it.” Newly applied to copper but with a history of use with other minerals, the technique is lowimpact and does not create tailings and gaping holes. —RaeAnne Marsh Florence Copper florencecopperproject.com

Part of a trend nationwide, a project currently under construction at Scottsdale Road and Lincoln Drive in Scottsdale is set to bring the economic stimulus of 264 luxury apartments to a developed urban area where amenities and infrastructure are already in place. The anticipated advantage to the city is retail activity — such as shopping and dining out — that will benefit local businesses as well as generate sales tax monies for the city, explains Michael Lieb of Michael A. Lieb, Ltd., who brokered the deal involving Phoenix-based Alliance Residential Company, a top national developer of luxury properties, and is still involved with the site’s retail development. Lieb, with 20 years’ experience in urban development throughout Greater Phoenix, credits the PUD (planned unit development)

Scottsdale passed in 2009 as the driving force in such redevelopment projects by allowing higher density as part of mixed-use at some intersections outside the downtown area. The outdated office complex that had occupied the 5.32 acres was “not the best use of the hightraffic corner,” he observes. “It was an ideal opportunity for economic stimulation.” Construction has already begun on the fourstory apartments with underground parking, which will be offered as rental units. For the project’s 22,000 square feet of retail, Lieb says he is “taking it slow to ensure it has the right mix of high-end and has enough parking.” He anticipates both residential and retail coming online in early 2014. —RaeAnne Marsh Alliance Residential Company allresco.com

Mining Project a 25-year Boon to Jobs and Business

The $40 to $50 million that Florence Copper plans to invest over the next 18 to 24 months on mineral extraction in Central Arizona will bring to nearly $100 million its expenditure on Phase I of the Florence Copper project. Phase II, planned to be $250 million, will begin the latter part of next year and will more than double Phase I’s investment. Noting this investment includes both direct-hire employment and contracting for services, Florence Copper President and CEO Michael McPhie says, “It’s quite exciting to work in a jurisdiction where there’s such a wide variety and depth of experience.” Florence Copper is part of Curis Resources,

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which is based in Vancouver, Canada, and active on four continents. The life of the Florence Copper project — from the permitting process now being completed to construction, slated to begin before the end of this year, to development, mining and, ultimately, closing — is expected to be 25 or more years and will support nearly 700 jobs. “We engage a significant amount of Arizona businesses into our operations,” McPhie says. Calling Arizona one of the top jurisdictions in the world for exploration and mining, with an incredible supply chain of companies and organizations that participate in the industry, McPhie says Arizona has been a pioneer in

Mobile apps have become a hugely popular way for businesses to attract, engage and retain customers, but testing the apps for usability can be an equally huge process and expense. Offering an alternative to the traditional lengthy and costly testing that has been recognized as “best practices” but often prohibitive for any but the major companies, UserTesting recently added mobile testing to its menu of services. The process parallels that of UserTesting’s problem-solving service for websites. Unlike the traditional method — 10 people hired for as many weeks and monitored as they interact with the website, their actions then analyzed — UserTesting creates a video recording, with audio, of the users’ step-by-step interaction. For the basic service, UserTesting provides the recordings to the client, who can then analyze the interaction to learn why the site or app is not delivering satisfactorily — such as the search engine not giving people the results they want or the business using terminology its target audience doesn’t understand. In addition to the self-service product, UserTesting also offers an enterprise product that includes its professional analysis. UserTesting maintains a network of testers whom it screens for ability to speak thoughts out loud as they use the site or app, and uses an algorithm to randomly assign and distribute the work. Testers are rated by the customer, which incentivizes them to be honest, explains company spokesperson Chris Hicken. Customers provide UserTesting the plan for what they want people to do on their site, a list of specific tasks and the intended demographic. Once UserTesting sets up the test, customers get their results in one hour. —RaeAnne Marsh UserTesting.com usertesting.com

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Photo courtesy of Office of Rich Barber Architecture, L.L.C. for Alliance Residential

Scottsdale Corner Joins Urban Redevelopment Trend

On-demand Mobile App Testing


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By the numbers

Metrics & Measurements

Leadership: Business Trumps Politics A global leadership management group, The Korn/Ferry Institute, polled business executives and found 65 percent felt a business professional would do a better job leading this country than a politician. The survey noted that 43 percent agreed with the statement that “a corporate CEO is better skilled to serve as U.S. President,” while 34 percent disagreed. Of those surveyed, 22 percent believed a CEO and a “traditional political candidate” would be equally skilled to hold that job. Although the executives strongly suggest that a CEO would make a better president, an overwhelming 74 percent said they would not take the job, leaving 26 percent who would seek the challenge. Executives believe that negotiating and compromise are critical competencies for the position, yet they also said that understanding others and conflict management are necessary and among the hardest for most people to development. When asked about whether a presidential candidate, regardless of party, possesses the competencies to create a bipartisan spirit in Washington, 33 percent of executives felt that “someone with superb negotiating ability would be able to accomplish such a goal.” Recognizing another reality, a majority 56

Executives Speak Out

percent of executives believe that the task of maintaining voter confidence is more difficult for a U.S. president than maintaining support of shareholders and directors is for a CEO. Making these “mission-critical” skills is a necessity in both posts, but perhaps more critical in a political climate. “Whether you’re the CEO of a multinational company or the president of the Unites States, the foundational competencies of effective leadership are typically calibrated around the ability to deal with ambiguity, build effective teams and motivate others toward a common vision,” says Ann Dutra, CEO of Korn/ Ferry Leadership and Talent Consulting. “The proven ability to master these missioncritical leadership competencies is often what separates executives who rise to the top of the organization or the political official who gains prominence and stature in our nation’s capital.” The Korn/Ferry Institute is the research arm of Korn/Ferry International (NYSE: KFY). Results are based on surveys of executives globally registered with the firm’s online Executive Center. The survey was conducted with more than 100 executives from July 24 to August 8, 2012. —Mike Hunter

Key Indicators Key indicators for the for our state economy economy are provided in each issue to identify those key numbers that give readers a sense of the health of our local economy. Economic Indicators (Arizona) Unemployment (Aug. 2012)

YOY % Change

8.3

-0.61

2,444.1

0.02

No. of Housing Permits (July 2012)

1,996

25.35

Consumer Confidence* (Q2 2012) (Arizona)

68.6

24.34

$22.49

n/a

Job Growth (in thousands) (Aug. 2012)

Average Hourly Earnings (Aug. 2012)

Eller Business Research

Retail Sales (Arizona) Retail Sales (in thousands)

May 2012

June 2012

Total Sales

$6,348,013

$6,753,385

6.99%

6.63%

Retail

$3,722,557

$4,044,640

Food

$1,042,109

$1,045,934

Restaurants & Bars

$839,613

$904,544

Gasoline

$743,734

$758,267

Contracting

$709,002

$700,947

Change Y0Y

Korn/Ferry International kornferry.com

Eller Business Research

How Executives Voted

Real Estate Commercial: Office***

Do you believe a corporate CEO is better skilled to be President of the United States than a candidate with a traditional political background (or current presidential candidate)? Yes 43% No 34% Equally skilled 22%

Q2 2011

Vacancy Rate

Do you believe any presidential candidate, regardless of party affiliation, possesses the essential skills, such as negotiating and composure, to create a bipartisan spirit again in D.C.? No one man or woman has such ability 10% Only someone with superb negotiating ability 33% Only someone who’s charismatic and charming 12% Only someone who has political leverage 16% Congress moves only according to political party interests 30%

Q2 2012

28.0%

27.8%

Net Absorption (in SF)

260,444

178,331

Rental Rates (Class A)

$24.43

$23.41

Commercial: Indust.*** Vacancy Rate Net Absorption (in SF) Rental Rates (General Industrial)

Would you want to be president of the United States? Yes 26% No 74%

Residential:

Q2 2011

Q2 2012

13.7%

11.8%

772,613

483,974

$0.51†

$0.43†

Aug. 2011

Aug. 2012

Out of the following, which is harder to achieve? A U.S. president maintaining the confidence of voters 56% A CEO maintaining the confidence of shareholders and directors 44%

Total Sales Volume

New Build Sales Volume

553

871

Negotiating and compromise are prized CEO skills. Given the current political climate, how valuable are these skills to a U.S. president? Critical 78% Important 17% Semi-important 5% Unimportant 0%

New Median Sale Price

$217,458

$235,217

Total Median Sale Price

Which of the following skills is the hardest for professionals to develop? Conflict management 46% Understanding others 20% Composure 7% Priority-setting 4% Learning on the fly 5% Motivating others 18% Source: The Korn/Ferry Institute

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Number

O c to b e r 2012

Resale Sales Volume Resale Median Sale Price

8,446

8,280

$118,500

$155,000

7,893

7,409

$112,000

$146,000

* Rocky Mountain Poll ** Consumer Price Index refers to the increase or decrease of certain consumer goods priced month over month. *** Cassidy Turley BRE Commercial †

Industrial rents are expressed as triple net Latest data at time of press

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SE C TOR

Industry at Its Best

A Swing and a Walk Is Good for Business

Golf impacts diverse sectors of the economy, and Arizona is one of the game’s top destinations by Glenn Swain

Big and Little With both large manufacturers and numerous smaller side businesses, the game writer Mark Twain called “a good walk spoiled” is, for Arizona, a perfect and needed driver for its economic vitality.

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Hybrid Golf Outing at the Arizona Biltmore Golf Club

Phoenix-based Karsten Manufacturing, the maker of PING drivers, putters and clubs, is one of the most recognized in the industry. Founded by Karsten Solheim, the only golf club manufacturer to be inducted into the World Golf Hall of Fame, the company employs 850 workers and exports golf clubs to more than 70 countries worldwide. While the private company does not release sales figures, in the U.S., Karsten is in the top three market share-wise in all the key equipment categories, which is comprised of drivers, fairway woods, hybrids, irons and putters. Karsten also enjoys a similar position in golf bags. While the large companies have a definite effect on the state’s golf industry, money also flows from smaller companies and the services they provide. “Golfers improve by my services and play more golf, which helps the economy,” says Robbie Camacho, a Phoenix-based PGA teaching professional and golf coach who has worked with more than 4,000 golfers since 1996. “Green fees increase, food and beverage purchases increase, golf product purchases increase, and, of course, state taxes benefit.” One often-overlooked economic factor is real estate on golf courses. According to Arizona Golf Industry’s last Economic & Environmental Report in 2004, the overall

economic impact also included additional residential housing premiums for those homes built in 2004 and located in a golf course community of $60,857,988. The premium attributable to all homes ever built in all golf course communities in Arizona was, at this pre-recession date, estimated to be more than $2,057 million. “The value of a home located on a golf course lot is typically higher. However, many variances come into play when valuing a property,” says Kerri Callidora, director of relocation for Scottsdale-based Ventana Fine Properties. “Statistics show that [today] the average sales price of a golf course lot in Scottsdale is $1,390,135 versus an average of $1,319,579 for homes not on a golf course.” Jane Blacker, a realtor for Russ Lyon Sotheby’s International Realty, says approximately 23 percent of active home listings are golf course communities. Another great indicator of the positive influence of golf appears in the steady rise in golf memberships for a number of courses over the past two years, Callidora points out. In July, Scottsdale, which in 2010 had nearly 30 percent of its 8.6 million visitors playing on the city’s more than 50 courses, hired Golf Channel personality Brandel Chamblee as the city’s “golf ambassador.” Chamblee, who inbusine ssmag.com

Photo courtesy of JDM Partners

Every morning grounds crews on more than 420 Arizona golf courses activate sprinkler systems, meticulously manicure greens and rake sand traps in anticipation of the nearly 12 million rounds of 18-hole golf games played in the state each year. While the game of golf has a way of teaching humility, it equally has a way of pumping life into Arizona’s economy. According to Arizona Golf Industry’s Economic & Environmental Report released in 2006 — the last broad comprehensive report conducted on the golf industry in Arizona — the state’s golf industry has an economic impact in excess of $3.4 billion annually. This included revenue directly collected by Arizona golf courses, which amounted to more than $806 million. Of than amount, $396 million came from green and cart fees and $143 million from food and beverages sold. An additional $122 million was collected from membership fees, $17.8 million from driving range fees, and $252 million for businesses that supply the golf course industry. Revenue from additional tourism activities from out-of-state golfers was nearly $2 billion. The annual Waste Management Phoenix Open draws around 500,000 people for the four-day event. According to economic impact studies by the Arizona Department of Commerce and the City of Scottsdale, the Waste Management Phoenix Open makes an annual contribution to the Valley economy of around $50 million. Statewide, host organization Phoenix Thunderbirds reports, this past winter’s tourney brought an estimated $222 million — compared to 2007, the last time a study was conducted, this is a 23-percent increase in revenue on a 2-percent increase in attendance. In golf, the goal is to land on the green. For the state’s golf industry, the goal is to land in the black.


played on the PGA TOUR for 18 years before joining the Golf Channel, will serve as a spokesperson for Scottsdale golf and represent the destination in a new advertising campaign targeted to avid golf travelers. Chamblee will blog posts for the new ILoveScottsdaleGolf. com website, make special appearances and communicate through social media. “Scottsdale is my home and that’s where I’m really focusing my efforts,” Chamblee says. “There are great golf courses and great things to do and see all over Arizona, but for golfers it really begins and ends with Scottsdale.”

Economic Mulligan The recent severe economic downturn has, however, put the industry into a rough of its own. According to the National Golf Foundation, between 2008 and 2011 the industry lost nearly three million golfers. More than 300 courses nationwide have closed since 2005, with nearly half of that number going belly up last year. Locally, the recession’s impact can be seen in the 52-year-old Moon Valley Country Club in Phoenix. Faced with mounting bills and withering membership numbers, Moon Valley’s owner filed for Chapter 11 protection in late July, claiming a debt of $6 million. The company planned to file a reorganization plan.

“We’ve been in business for 25 years, but it’s been brutal for the last few years,” says Brice Browning, owner of AZ Golf Works, a Tempe golf shop that specializes in golf equipment repairs and used clubs. “I know of golf shops that have closed and some gone bankrupt. We’ve survived by my reputation. We’re popular for our pre-owned clubs and the quality of our repairs.” “Absolutely, the recession hurt our business,” says Brett Trenter, general manager of We-Ko-Pa Golf Club on the Fort McDowell Yavapai Nation. “I don’t know of a business that it didn’t hurt. We have been fortunate, however, and have been able to continue to make profits for the ownership in the poor times. We’re not where we were at prior to the recession, but we’ve had three years of continued growth and are cautiously optimistic about this upcoming season.” Course GMs have had to get creative to attract more business. The Arizona Biltmore Golf and Wigwam Golf clubs date back to when Bobby Jones was winning Grand Slams and Gene Sarazen was inventing the sand wedge in his Florida garage (1930s). Over the last year the clubs began offering Hybrid Golf Outings, referred to as HgO. The alternative golf events condense the game for business teambuilding days and on-the-course business

networking events for groups from 10 to nearly 300 people. Customized games include closest to the target and accurate drive contests. Before the sluggish economy, We-Ko-Pa’s Cardholder program, which offered a number of course amenities, was only a summer pass. Now, the program is annual. “We made the pass a tremendous value to those who had flexible schedules and who could wait to book their times,” Trenter says. “We also started incentivizing our guests to play 36 holes. We’ve seen increases in revenues and rounds.”

Recovery Shot Golfers are familiar with the term “recovery shot.” After an errant swing puts them in a hazard, the recovery shot is an attempt to place the ball back in a favorable position. In many ways, the golf industry is doing the same after some very lean years. According to Bloomberg.com, golf in the U.S. is growing for the first time in five years, bolstering the sport’s $25 billion market. That revival of the game is being felt in Arizona. “In my opinion we will still be going through a readjustment in the next couple of years,” Trenter says. “I believe that you’ll still see private courses struggle, many of which will need to adjust their thinking and let outside play in to provide cash flow, and a lot of the courses that have been barely getting by will go by the wayside. The courses that are healthy, however, will continue to try and give the existing golfing community value-driven experiences and will also try to drive new golfers through various programs.” “Golf as a whole is showing a come-back, especially in tourism,” Camacho says. “Arizona is still major hub for a golf destination. Arizona ranks in the top 10 for best golf states in the U.S., according to Golf Digest magazine. I see golf growing strong in 2013.” Arizona Biltmore Golf arizonabiltmore.com/golf Arizona Golf Industry Association azgia.com AZ Golf Works arizonagolfworks.com Karsten Manufacturing ping.com Moon Valley Country Club moonvalleycc.com

Photo courtesy of We-Ko-Pa

Robbie Camacho azgolfinstructor.com Russ Lyon Sotheby’s International Realty russlyon.com Scottsdale Convention and Visitor’s Bureau experiencescottsdale.com Ventana Fine Properties ventanafineproperties.com We-Ko-Pa Golf Club

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We-Ko-Pa Golf Club wekopa.com Wigwam Resort wigwamresort.com

O c to b e r 2012

21


Trickle Up

A View from the Top

Benito Almanza: Leveraging Life Lessons to become BofA State President Advancement founded on taking jobs for skills development rather than pay rate Benito Almanza’s office may be far from the farm fields he grew up on, but the lessons he learned as a child of farm laborers and the obstacles he overcame help guide him every day as the Arizona State President for Bank of America, in which position he coordinates all lines of business for the bank, including directing the work of 12,000 employees in Arizona. He also oversees operations in New Mexico, Colorado and El Paso, Texas. Obtaining an education did not come easy for Almanza — his diocese supported him and his brothers through Catholic school, and in high school, his mother had to fight for him to be assigned a college prep counselor. “I felt embarrassed that I wasn’t good enough for college. My parents told me that I was just as good as the others, but I would need to work

extra hard to prove them wrong,” Almanza recalls. Education was critical to his success. He is a graduate of Stanford University, earned his law degree from the University of Santa Clara and is a member of the California State Bar Association and the U.S. District Court Northern District Association. But Almanza is quick to point out that “education itself is important; however, what you do with it is paramount.” Throughout his career, he has worked very hard to prove he could compete against the best. “I’ve seen individuals with great educations come to work with a sense of entitlement. This is not a good formula for success,” he says. Almanza landed his first job with Bank of America 34 years ago as an Agricultural Commercial Client Manager at San Jose Main. It was a career direction he took reluctantly, based on advice from his college professor and mentor, Jerry Porras, co-author of the bestseller Built to Last. “He suggested something

The Balance Sheet

■■ Benito Almanza was honored with the Hall of

Fame Award at Valle Del Sol’s 2012 Profiles of Success Hispanic Leadership Awards in September. As State President for Bank of America in Arizona, Almanza oversees business banking activities in the Desert Mountain States, which include New Mexico, Colorado and El Paso, Texas. Almanza is responsible for coordinating all lines of business efforts in Arizona, community and civic activities and volunteer efforts for 12,000 Arizona associates. Almanza started his career 34 years ago as an Agricultural Commercial Client Manager at San Jose Main and attributes his career success in part to the guidance he received from mentors. His diocese supported Almanza and his brothers through Catholic education. He is a graduate of Stanford University, earned his law degree from the University of Santa Clara and is a member of the California State Bar Association and the U.S. District Court Northern District Association. Almanza devotes time to chair the Charity and Development Appeal of the Roman Catholic Diocese of Phoenix. His board service includes Phoenix Aviation, Teach for America and the Arizona Bankers Association. He is also a member of Greater Phoenix Leadership.

■■ ■■

■■ ■■ ■■ 22

O c to b e r 2012

that I didn’t want to hear: leverage my experience in agriculture. One of the reasons for focusing on school was to get out of the fields,” he says. Mentorship continued to play an important role in his career. Another mentor, Jim Miscoll, told him to have a continual 10-year career goal with short-term objectives to measure his progress and never take a job for money, but for skill development. “The thought was that at the end of 10 years, I’d have the skill set for a stretch-job I had targeted. So I took lateral and turnaround jobs to build my skills — a strategy that certainly has worked,” he says. Another important lesson was to surround himself with top talent and develop them to take his job. “Today, my mentors are my teammates whose perspectives are a source of knowledge for me,” he says. While some business executives find success by taking big risks, Almanza’s approach to risk-taking is conservative. “Good bankers thoroughly understand risk by knowing their clients’ cash flows; especially how sales are made and recognized. They then are in a position to know the risks and look at ways to mitigate them. Bankers can’t be true risk takers, as the margin for error is small. You need to make 99 loans out of 100 right so that you’re able to cover the loss of that one loan,” he says. The toughest time in his career came when he put his job before his family. He worked up to 13 hours a day, including weekends, and hardly saw his wife and family. He felt tremendous feelings of guilt and finally readjusted his 10-year plan to rebalance his priorities to put the appropriate focus on his family while continuing to build his skills. “Fortunately, not everyone at the bank shared that bank-first mindset and I was able to thrive at the bank with a better family-first focus. I’ve never looked back or regretted the decision,” he says. Bank of America bankofamerica.com

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Photo courtesy Bank of America

by Sue Kern-Fleischer


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O c to b e r 2012

23


Funding for Business: Banks Have Money to Lend. Does Business Have the Will to Use It?

by Gremlyn Bradley-Waddell


Banks stand ready to work with businesses that know how to work with them No doubt about it, there’s plenty of economic uncertainty in the world, let alone Arizona, today. But Valley bankers and those associated with the banking industry want entrepreneurs and owners of small and mid-sized businesses to know their institutions have been, and continue to be, ready to talk lending. “We’re all dying for loans,” asserts Candace Wiest, president and CEO of the locally owned West Valley National Bank.


If nothing else, bankers say, low prices, low interest rates and plenty of inventory make this an ideal time to expand a business or buy property, buildings, even company vehicles. Yet bankers have noticed hesitancy among customers. Some won’t spend the monies they’ve been approved for, and others simply walk away before that point — they get approved, and then decline to take the next step. Whether such reluctance is tied to concern for the economic future, the upcoming presidential election or another issue, the fact remains that banks have money and are ready to lend. Of course, the new economic reality means more stringent rules are in place, but a prepared, knowledgeable business owner should be able to walk away from a lender with the extra necessary capital he or she was seeking. “You have to get your numbers straight and know them well enough to talk about them intelligently,” says Bob Wilson of StoneyWilson Business Consulting in Scottsdale.

Myth: Banks Aren’t Lending Let’s first address what bankers say is the biggest myth going these days about their industry: Banks aren’t lending or don’t have

money to lend. That’s simply not true, says Ed Zito, president of Alliance Bank of Arizona, who says banks are, indeed, responding gradually to the economic environment. For Alliance, which he calls one of the leading small-business lending banks in Arizona, the proof is in its numbers. “We never stopped lending to small and mid-sized businesses,” Zito says. “We had a $65-million net loan growth in 2009. Our net loans, after paydowns and pay-offs, grew $65 million in Arizona. In 2010, we had a net loan growth of $180 million and, in 2011, $339 million.” Doing business as usual only makes sense, say Zito and Kevin Sellers, Arizona market president for First Fidelity Bank, because banks don’t make money unless they lend money. “Your profits are determined by the growth and quality of your loan portfolio,” Sellers says, adding that it is interest income from loans, primarily business loans, that keeps a community bank afloat. Another way of putting it? “[Banks] love it when people buy things,” Sellers says. Over at Desert Schools Federal Credit Union, Gary Sneed also says the myth that banks aren’t lending isn’t necessarily true. He points to the credit union’s new sales force as evidence that finding businesses in need of

loans is a top priority. “We’ve asked them to get involved in the community,” says Sneed, vice president and chief lending officer, “and we’re also being proactive, contacting our business members to introduce lending.” Nevertheless, Zito acknowledges that the lower end of the small-business segment may have a different take on banks’ willingness to lend. While he says the industry as a whole is supportive of entrepreneurs, who are viewed as job creation engines, bankers must do their part to endure this long, slow, rocky recovery. That means entrepreneurs may not be getting what they want from every bank, he says. Says Sneed, “We still really need to be careful and prudent about whom we’re lending to.”

Banks Say, ‘Yes’; Business Owners Say, ‘Wait’ Whether they’ve heard the myth or not, business owners have not been shy when it comes to inquiring about loans. The operative word here, however, is inquiring. Wiest says the number of loans her community bank staff has reviewed — but not necessarily closed — has more or less doubled in recent times. Unfortunately, about 30 percent of loans that West Valley National Bank approves never

Gary Sneed also says the myth that banks aren’t lending isn’t necessarily true. He points to the credit union’s new sales force as evidence that finding businesses in need of loans is a top priority. 26

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go anywhere. She says applicants don’t follow through either because they’re unsure they can afford to go forward with the loan because of economic uncertainty or because, they say, they were just testing the waters, so to speak. “With a certain percentage of loans that we approve, people say, ‘I need to wait,’ ” Wiest says, adding that the very same conservative comment is heard in regard to businesses that are essentially sitting on available lines of credit. “We also hear, ‘The company’s doing better than I thought it would’ or ‘I don’t want to go into debt.’” Sellers has had similar experiences. Although traffic is picking up, and early September found Alliance funding a $2 million loan, demand is still pretty weak. “What we’re seeing is business owners are still pretty cautious,” he says. Wiest says her customers’ uncertainty is linked to many factors, not least of which are the economy, the tenuous job market, potential tax issues on the horizon — the estate tax, for one — and the upcoming presidential election in November. Sneed also says he’s heard people comment that they want to see who will be in the White House and what the subsequent tax policies will be come 2013. He’s also heard folks say that if one candidate is elected, they’re going to invest a certain amount of dollars and if the other candidate wins, they’ll invest onethird of that amount. Although Wiest would like to see those approved loans acted upon, she understands where her clients are coming from. She’s seen that same careful approach used by her own family with its painting business, she says. In these economic times, they are happy to pay overtime rather than add a position. That said, she believes December will be a turning point for a lot of businesses. “I think you’ll see some changes in the psyche,” she says. “Some say [the actual outcome of November’s election] doesn’t matter, but people will know what they can do.”

It’s about Relationships If a business owner has determined it’s time for a business loan — perhaps it’s time to expand, and whoever is the next leader of the free world isn’t going to influence that decision — it’s time to do some homework. Don’t just barrel into a bank and talk to the first person inbusine ssmag.com

Likewise, entrepreneurs and owners of small to mid-sized businesses should do research and know what kind of bank they are looking for in a relationship, Zito says. to be encountered. “If I were a business owner, I’d ask for a referral for the business lender,” says Steve Jarosh, credit manager and assistant vice president for Desert Schools. It’s important to do the due diligence, and it may very well pay off. It’s a good idea to ask colleagues and friends if they’ve worked with a particular bank or banker whom they’d recommend, because a friendly introduction can go a long way. On this point, Zito notes that Alliance views working with clients as building business relationships, not conducting business transactions. Likewise, entrepreneurs and owners of small to mid-sized businesses should

do research and know what kind of bank they are looking for in a relationship, he says. Sellers says that one of the advantages to working with a community bank like First Fidelity is that they are able to tailor an offer to a client’s needs. For example, although the bank never lowers its standards, Sellers says First Fidelity staff can make exceptions to certain policies when it’s deemed appropriate. And, he says, even when his bank’s offer isn’t the best one pitched, business owners often choose First Fidelity over a competitor because they realize they’re partnering with a bank they can work with and from which they can “really derive a lot of value.” O c to b e r 2012

27


Wilson notes that one of the worst things business owners can do is to come straight out and ask a banker, without providing any background information, how much they can borrow. A banker won’t have any idea. Preparation Is Key Once a business owner has selected a bank to work with, she’ll get a list from the lender that includes all the documents that will be needed for the loan request package. These will include financial reports such as a balance sheet; a profit and loss statement; and information about agings, which relate to accounts receivables. Some of this may sound familiar; if it doesn’t, it’s time to learn about it. Says Wiest, “We expect you to know your business better than anyone.” Business owners must know their numbers

28

O c to b e r 2012

and have a realistic notion of what amount of money they’re going to need, says Wilson, who, along with business partner Julie Stoney, recently helped facilitate the “Access to Capital Academy” sponsored by the Phoenix Community Development and Investment Corporation. “When you know the answers, there are fewer questions,” says Wilson. Securing a loan, after all, depends on the ability to show a potential lender how the loan in question will be repaid. Wilson notes that one of the worst things business owners can do is to come straight out and ask a banker, without providing any background information, how much they can

borrow. A banker won’t have any idea. “You need to know what it is that you want and how you are going to pay it back.” So, along with having a clear purpose for the loan, perhaps the most important factor is cash flow, or the money a business is currently taking in. Back in the day, banks wanted only to see one dollar in income for every dollar of debt, but that’s another thing that’s changed in this new economy, Wiest adds. “For every dollar in debt, you have to have $1.25 to $1.30 in income,” she says, and, on top of that, a banker is going to want to hear about a “Plan B if your source of repayment isn’t there.” In the past, Wilson says, bankers would take a look at a business’s financial statements and approve a loan on the basis of the company in question having historically done fine. Now, he says, the banks might want to look at the business’s projections for the next two years. And the extra quarter that’s required these days? It acts as a cushion, Wilson explains, “because life happens.” Speaking of life happening, although most entrepreneurs and firms — and banks, for that matter — have taken some hits over the past few years, credit scores are still very important when it comes to getting a loan. If a business owner’s personal credit score is below 675, Wiest says, “it’s going to be tough unless there’s a compelling story behind it.” As for those financial reports, it’s imperative that the numbers add up the way they should, that any deadlines have been met and that documents have been filed with the appropriate agencies. This may also be a good time, says Julie Stoney of the Stoney-Wilson team, to confer with a CPA or bookkeeper, the company attorney and, possibly, a business consultant, all of whom she refers to as “the legs on your stool, your advisory board.” These professionals all need to be on the same page as the business owner; they need to have an understanding of what the business has done and is doing as well as how the loan is going to be used. And they can also bring any inaccuracies or problems to light before those issues are noted by a banker, Stoney says. Simply put, Sneed says, a business owner must make sure his financial house is in order and the balance sheets balance. Wilson makes the same point, noting that making sure the numbers are correct is “a responsibility you inbusine ssmag.com


have to yourself ” as a business owner. Stoney also urges business owners to note percentages of revenue in QuickBooks or whatever accounting software is being used; having those percentages on hand will come in handy when completing loan paperwork. “Mainly,” Sellers says, “what we like to see is that you are currently operating at a profit, you’re a business owner with longevity, you’re maintaining a good amount of liquidity and you’re a business owner who’s responsible with your personal finances.”

Honesty about Bad Times Is Good Of course, a business needs to do more than just have numbers that look good on paper. Wilson says a banker is going to expect a business owner to thoroughly know his business’s history and industry, the market he’s in and the competition. The bank also wants to see a business plan that states where the company is going and how it’s going to get there. Accordingly, Sellers says management’s experience will also be scrutinized, and bankers

Any decline in performance should be discussed in its entirety, Sellers says … “We’ve seen and heard everything and nothing’s going to shock us. Companies have issues from time to time. What we want to hear is how they dealt with it.”

want to know that a businessperson who’s seeking a loan has an “ability to manage the company during difficult times and [an] ability to grow the company during the good times.” And since most businesses have encountered rough times, for whatever reason, owners need to fully disclose those as well. Any decline in performance should be discussed in its entirety, Sellers says, and as early in the process as possible. “Go ahead and put it out there,” he says, adding that such admittance won’t necessarily kill a credit request. “We’ve seen and heard everything and nothing’s going to shock us. Companies have issues from time to time. What we want to hear is how they dealt with it. And, a lot of times when [companies fully disclose a potential problem], it’s not an issue anymore.” Wilson notes that, although “surprises” cannot always be avoided, it’s never a good idea to avoid an issue, because it likely will surface later and no one, especially bankers, likes surprises. “If you surprise them, you might as well kiss that [loan] goodbye, because honesty and integrity is everything,” Wilson says. “Disclose, disclose, disclose.” While most banks do all they can to provide a quick turnaround in processing a request for a loan, the truth is it’s not always an easy task. Banks have been instructed by regulators to tighten up the rules, Stoney and Wilson say, so there are more questions and getting a loan is a more probing kind of venture these days. Just be patient, say those in the know. “They’re not trying to turn down the loan,” Jarosh says of staffers, who, to anxious business owners in desperate need of capital, no doubt seem like they’re taking their own sweet time. “They’re trying to make it work.” Even in the event of rejection, all is not lost. Stoney says it’s an opportunity for business owners to learn how to do things better, so she says to ask a would-be lender what could have been done differently. “Incorporate their suggestions,” she says, “and then, when you go to the next place, you have that information.” Alliance Bank of Arizona alliancebankofarizona.com Desert Schools Federal Credit Union desertschools.org First Fidelity Bank ffb.com Stoney-Wilson Business Consulting stoneywilson.com West Valley National Bank wvnb.net

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Law

Legal Matters to Business

E-mail: Is It Casual Conversation or a Binding Contract?

A five-word remark cost one company $1,000,000 by Jon Weiss and Dan Waite In the good ol’ days of e-mail, the biggest downside was the occasional virus or an obscure spam invitation to support an even more obscure Nigerian military commander. Oh, how times have changed. Now, seemingly innocuous e-mail exchanges between business and client (or employee and a vendor) regarding a potential contract could be considered legally binding …

“We Got a Deal Then” In 1999, the Uniform Electronic Transactions Act was created. Simply put, the Act deems that e-mail can be used to make business transactions easier. Previously, a handwritten signature might have been required to create a contract. The UETA, however, allows for a binding contract to be created through e-mail (and other electronic) exchanges without a physical signature. More specifically, the act of sending the e-mail can serve as the signature.

The Five “R’s”

To avoid unintentionally creating a contract through e-mail, follow these critical guidelines when crafting messages.

Refrain from finality. Unless the intent is to create a contract, avoid wording that sounds final, such as “Deal” or “Done” and especially “Agreed” or “I accept.” Respond to finality expressions. If the second party makes statements that give the impression they may think a contract exists (e.g., “Glad we could reach agreement”) and the first party does not believe a contract exists, it needs to correct the misperception in writing at the first opportunity. Require permission. It may be obvious that the owner of a business has final say in determining if he or she wants to make a deal

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It sounds pretty good, but like all laws, it wasn’t long before blackand-white was replaced with gray. The problem? The nature of e-mail messaging is that it’s fast-paced and often informal. So, what seems like official contract language by one person is sometimes not perceived in the same way by the other. The following real-life scenario illustrates how a business could end up in legal trouble. Company ABC owned a high-value Web domain name it was looking to sell and contacted Company XYZ to see if it wanted to purchase the name. Company XYZ indicated it might be interested in acquiring the domain name but did not want to spend a lot of time on the effort unless the name could be acquired for a great price; in short, Company XYZ did not want to get its lawyers and other highlevel employees involved unless and until it knew an agreement on price could be reached. After many e-mail conversations, both firms

with a client or vendor, but if someone else (a corporate executive, the board of directors, etc.) has to OK the agreement, it’s critical to be clear in any e-mail exchange that such approval must be secured before any deal is struck. Relax. Never be in a rush to send an e-mail that involves any discussion of a contract or hints at finalizing payment and other terms. Avoid sending important e-mails when hurrying out the door for lunch or a meeting as that may distract from giving the e-mail the amount of time and attention it really needs. And don’t just type and send; always read the e-mail from beginning to end before sending

it. For particularly important e-mails, it may be advisable to print out a draft and read it on paper. The bottom line is to treat each e-mail as though it’s a printed contract and the pen is poised over the signature line. Representation. If there is even a fleeting thought that an e-mail message might bind the company to a contract, talk to a lawyer. A competent attorney can help the business owner understand if there is anything to worry about as well as help to create a corrective e-mail that could keep the company out of legal hot water.

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Books agreed on a seven-figure price. At that point, a representative from Company XYZ ended the e-mail exchange with five simple words: “We got a deal then.” What the representative should have said was, “We have a deal on price then; now, let’s move on to negotiating the remaining contract terms — like how and when the transfer will occur, performing due diligence on the domain name to make sure the quantity and quality of the traffic to the domain name was as Company ABC represented, whether the price would be paid over time or in a lump sum and, if over time, at what interest rate, etc. — to see if we can get to the point of a contract.” The representative for Company XYZ believed all the unstated thoughts were understood by the representative for Company ABC and did not need to be expressed. Communications, however, eventually died off and the parties went their separate ways. Company ABC, who believed the value of the domain name was rapidly increasing, continued efforts to sell the name to others. Cut to three years later. Company ABC was unsuccessful in finding a buyer for its domain name and the global market changes caused the value of the domain name to drastically drop. Company ABC sued Company XYZ for not purchasing the domain. It cited breach of contract based on the “We got a deal then” e-mail. Company XYZ argued that while it had agreed to one term — the price of the domain — it had not agreed to all terms needed to form a contract of purchase. In other words, Company XYZ argued there was a difference between agreeing to a fair price and agreeing to purchase at that price. Company ABC claimed that, in accordance with the UETA, a contract had been created because the language Company XYZ used implied a signature and e-mail constitutes the equivalent of a signature. And the result? With only e-mail exchanges and no formal written contract, Company XYZ settled to avoid a lengthy and expensive trial. In the end, it paid several hundreds of thousands of dollars to Company ABC (who also retained the domain name to sell another day) and paid its own lawyers significantly more in legal fees and costs. In all, Company ABC paid nearly $1,200,000 for five words … in an e-mail. E-mail is, obviously, here to stay. With more and more business communications taking place by e-mail, a greater number of contracts will likely be alleged to have been created through an e-mail exchange. And it’s not just e-mail that’s at risk. The UETA stands for Uniform Electronic Transactions Act — covering all electronic messaging — which means faxes, texting and social media sites like Facebook could potentially instigate a binding contract. Hyper-awareness is the best approach. Lewis and Roca, L.L.P. lrlaw.com

Jon Weiss is a partner in Lewis and Roca’s Phoenix office. He represents businesses in disputes relating to contracts, noncompetition agreements, and a wide variety of other issues facing businesses on a day-to-day basis. Dan Waite is a litigator and managing partner of the Las Vegas office of Lewis and Roca, L.L.P. He focuses primarily on business litigation with an emphasis on contracts, real estate, mechanics’ liens and fiduciary disputes.

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Digitized Business

Google+ for Business: How Google’s Social Network Changes Everything This conversational, business-savvy guide helps businesspeople identify where Google+ is most likely to offer them value, avoid missteps and wasted energy, and get results fast. This is a business book, not a technology book. Business decision-makers will learn how Google+ is different and why the difference matters, how to define effective Google+ strategy and tactics, how to integrate Google+ into current online/digital strategies and how customers are using Google+ — and what they’re looking for. Chris Brogan $24.99 • Que Publishing • November 2012

Social Media Marketing All-in-One For Dummies This book shows businesspeople how to apply the marketing savvy they already have to the social media their prospects are using, helping to get and keep more customers, make more sales and boost the company’s bottom line. Find the business side and explore the variety of social media options and research where the target audience hangs out. Discover ways to simplify posting in multiple locations and how to monitor activity and showcase the company with a customized Facebook business page. Jan Zimmermann and Deborah Ng $29.99 • John Wiley & Sons • Second Edition • October 2012

Blogging to Drive Business: Create and Maintain Valuable Customer Connections Plenty of businesses are already blogging and millions more are considering creating blogs. But how does a business build a blog that really works — really builds business and profits? How do companies identify and craft the blogging content and communities that will be most effective for them? This how-to guide shows how to go beyond “one size fits all” business blogging, covering how to define clear goals, create the right formats and content, and choose the right tools. Eric Butow and Rebecca Bollwitt $24.99 • Que Publishing • Second Edition • On shelves and online

We First: How Brands and Consumers Use Social Media to Build a Better World Simon Mainwaring offers a visionary new practice in which brands leverage social media to earn consumer goodwill, loyalty and profit, while creating a third pillar of sustainable social change through conscious contributions from customer purchases, with case studies from companies such as Walmart, Starbucks and Patagonia. These innovative private-sector partnerships answer perhaps the most pressing issue facing business and thought leaders today: how to practice capitalism in a way that satisfies the need for both profit and a healthy, sustainable planet. Simon Mainwaring $17.00 • Palgrave Macmillan • On shelves and Online.

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HR

People Are Key

Dealing with ‘Difficult’ Colleagues Leads to Happier Customers

Resolve internal strife and build positive energy to provide uplifting customer service by Ron Kaufman Too often, organizations promise satisfaction to external customers and then allow internal politics to frustrate their employees’ good intentions to deliver. It’s important to remember that customers aren’t the only ones who come through an organization’s door every day seeking quality service. Employees and company leaders also need to be served. If they’re not happy, it’s not likely they’ll deliver stellar service, and this is true for people at all levels of an organization. Inevitably, “difficult people” will creep into the work life, disturbing everyone’s workflow and negatively affecting the service provided to customers. At some point, we are all viewed by our colleagues as the organization’s “difficult person.” That’s why it’s important that we find a way to provide uplifting service internally all the time — even (and especially) when difficult situations arise — so internal tiffs don’t lead to rifts with customers. Characterizing someone as a “difficult person” creates a lose/lose situation. Just as customer relations can view interactions as “there are no difficult customers; there are only difficult customer situations,” relations among co-workers can be viewed as “there are no difficult co-workers; there are only difficult co-worker situations.” And once the company

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leaders start to think differently about how to manage those difficult situations, everyone can be more satisfied and better served, including employees, management and, most importantly, the customers. This takes an uplifting service culture change — taking action to create value for someone else. And that “someone else” can be outside or inside the organization. When the entire organization agrees to define the way everyone works together using this definition of service, everyone will be able to focus on creating value and serving each other better, which leads to better external service. When a co-worker is angry, the response “I don’t want to have anything to do with him” will be replaced by the considerations of “What does this person value? What is he not getting that he needs? What can I do now to serve him better?” When this culture of service takes hold in the organization, everyone feels better and works better together. Difficult situations can be used to start building an uplifting service culture in the organization — from the inside out. Assess the situation carefully. Is a colleague deeply upset or simply having a bad day? Is she angry about an ongoing internal issue that must be addressed and solved, or a one-off situation like a presentation gone wrong? Is this

a process problem that persistently provokes, or a one-time irritation that will naturally fade away? Once the situation has been assessed, it can be determined whether the person just requires a little personal attention or whether a larger plan must be created. Shift perspective. Stop thinking of the colleague as “difficult” and start thinking about the difficulty he is experiencing and how you can serve him in his current situation. The reality is that one never really knows all that is going on with another person or what triggered this emotionally upset moment. Once one realizes what a difficult situation means to another person, one can approach the issue with more compassion, generosity, empathy and patience. This is far more effective for both parties than concluding that another person is difficult all the time or is always overreacting. Lean in and work on the problem together. A “difficult” person often behaves that way because she is trying to get something she needs or is trying to make something happen. She probably thinks the only way she can get her colleagues’ attention is by outwardly showing her anger. But we know from experience that the way to get better service is to be a better customer. And the same goes for getting the help we all want from our colleagues. One can inbusine ssmag.com


let a colleague know — as subtly as possible — that being upset, angry, or “difficult” is not the best way to get what she needs by, for instance, starting a conversation with “I care. Help me understand what you are concerned about.” Saying this and then listening is often all that is needed for her anger to fade away. Once the colleague has calmed down, the other person can say, “Thank you for explaining this to me. Let’s solve this problem together. It’s not ‘us or them.’ It’s just ‘us.’” And then both get to work solving the problem. Plan how to work together. One way to defuse a difficult situation is to pull out a piece of paper and decide what actions each person will take next. The sooner someone says to an upset colleague, “Let’s figure this thing out. What action can I take that will create value for you? Let’s agree on next steps. Let’s make some promises to each other,” the better. Working this way creates a culture of colleagues taking action to create value for each other. It takes emotion out of the equation and creates a platform where people can work more effectively with each other. Role model the right behavior. One of the best ways to make this behavior a part of one’s company culture is to role model it oneself. And one can do this from any position in the organization: from the top, the middle or the frontline. Eventually, one’s colleagues will see how he or she handles these situations and how well that approach leads to positive action. Think about it like this: The “difficult” co-workers anyone encounters on a given workday are simply people seeking service. Being able to recognize and reconcile those situations internally is just as important as being able to recognize when a customer interaction has gone south. With surprising service coming from the inside, it’s easier to step up the company’s service on the outside. And when that happens, everyone at the organization wins.

Small firms have created nearly 2 out of 3 net new jobs since 1995.* There’s nothing small about small business. It might be called a small business, but it’s a big deal to you. BMO Harris Bank shares that mindset. And our full range of small business services can help your business succeed. Working together, we’ll help keep your small business right where you want it. To learn more, call 1-866-276-5116, stop in, or visit mibank.com/smallbusiness.

BMO Harris BankSM and M&I® are trade names used by BMO Harris Bank N.A. Member FDIC *Headd, B. Office of Advocacy, SBA. “An analysis of small business and jobs.” (2010). http://archive.sba.gov/advo/research/rs359.pdf.

Uplifting Service UpliftingService.com

Ron Kaufman, author of the New York Times bestseller Uplifting Service: The Proven Path to Delighting Your Customers, Colleagues, and Everyone Else You Meet and 14 other books on service, business and inspiration, is the founder of UP! Your Service (www.upyourservice.com), a global service education and management consultancy firm with offices in the United States and Singapore. He is rated one of the world’s “Top 25 Who’s Hot” speakers by Speaker magazine, and has worked with many of the world’s largest and most respected organizations.

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NonProfit

by RaeAnne Marsh

Actions to build Community

Boys & Girls Clubs of Greater Scottsdale: Fostering Enrichment and Character-building Boys & Girls Clubs of Greater Scottsdale, thanks to a partnership with AXA Advisors, launches a new event that it hopes will bolster its revenue by $60,000 toward its array of programs and services for kids ages 6 to 18. The organization’s first-ever Weekend Jetaway takes off at 6:30 p.m. on Friday, Nov. 9, for a three-and-a-half-hour flight of fancy with fine dining, gambling and, for one lucky winner, private jet transportation. Live music for dancing, culinary creations from several leading Valley chefs, and cocktails will keep the action humming as guests try their luck on the roll of a pair of big, fuzzy dice to keep them progressing toward the evening’s five big prizes, one of which will be a round-trip flight to a vacation destination. Guests will be called to their turn at the gaming tables in randomly coordinated groups “to encourage camaraderie,” says Steve Davidson, president and CEO of Boys & Girls Clubs of Greater Scottsdale. Setting the event, appropriately, in a private

jet hangar in the Scottsdale Airpark, the organization hopes to welcome 500 people to its fundraiser this year. Boys & Girls Clubs of Greater Scottsdale bgcs.org

Snapshot

■■ Boys & Girls Clubs of Greater Scottsdale ■■ ■■

■■

maintains nine club sites that serve 16,000 kids ages 6 to 18. Clubs are open after school and evenings on weekdays, plus Saturdays for sports. Programs are offered in five core areas designed to develop character and lifeenhancing skills: the arts; character and leadership development; education and career development; health and life skills; and sports, fitness and recreation. Transportation from the schools is provided in the organization’s service areas, and kids may also come on their own for specific classes.

■■ For the teenagers, Boys & Girls Clubs of ■■

Greater Scottsdale offers drop-in teen centers at five of its club sites. Funding comes from several special events the organization holds throughout the year, grants, corporate sponsorships, and support from its women’s auxiliary.

A fall evening under the stars for a backyard dinner party at an historic 1906 home — The Wellness Community’s annual Porch Party fundraiser (held this year on Oct. 20) welcomes guests to “feel like you’re in your own home, in the backyard, having dinner with your friends,” says Executive Director Vikki Scarafiotti. Snapshot

■■ The Wellness Community’s services encompass ■■ In addition to 35 part-time staff — licensed ■■ ■■ ■■

150 programs that reach nearly 2,300 cancer patients each year. All programs and services are provided free of charge. Programs are designed to provide support, therapy and services to improve quality of life for cancer victims and their caretakers. Among the programs is Kid to Kid, for children whose parents have been diagnosed with cancer.

■■ ■■

clinicians and social workers and certified Yoga instructors — who provide most of the services, the organization employs 10 full-time staff. The Wellness Community also maintains partnerships with major hospitals that serve cancer patients. Founded in 1997, the organization receives no federal or government money but is funded by individual donations and corporate sponsorships.

The financial goal for the event is to raise $300,000, approximately 15 percent of the year’s revenue. Its other purpose is equally significant, says Scarafiotti. “People can see where our services are delivered.” The Wellness Community exists to help people be supported through their journey with cancer. “Home is one of the elements of that journey, and our services are designed to be given in a home-like setting.” The highlight of the evening’s program describing the work of The Wellness Community will be honoring Derrick and Amy Hall. Derrick Hall, president and CEO of the Arizona Diamondbacks, became an honorary co-chairman spokesperson after his bout with prostate cancer. A special “experience with the Diamondbacks” is one of the items expected to generate lively bidding during the live auction with which the evening will culminate. The Wellness Community twccaz.org

In business to do good for the community, nonprofits enrich the lives of those who contribute as well as those who receive. In Business Magazine showcases two nonprofits in each issue, focusing on their business organization and spotlighting an upcoming fundraising event.

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Photo courtesy of The Wellness Community (bottom); courtesy of NBA Photos.(top)

The Wellness Community: Quality-of-life Programs for Families Battling Cancer


www.inbusinessmag.com

October 2012

O n t h e Ag e n D a

A listing of Greater Phoenix business organizations and their events. Visit www.inbusinessmag.com for an expanded monthly calendar of educational, networking and special business events.

MBA Women International

Spirit of Enterprise Center, W. P. Carey School of Business

MBA Women International Conference

Spirit of Enterprise Awards

Fri. & Sat., Oct. 19 & 20 — All day

A year of critical examination and evaluation of businesses nominated for the Spirit of Enterprise Award culminates on Thurs., Nov. 1, when the five winners for 2012 are announced at the Spirit of Enterprise Awards luncheon at JW Marriott Desert Ridge Resort & Spa. “These entrepreneurs take incredibly difficult industries, some with a less-than-sterling image, and put a shine on them,” says Gary Naumann, director of the Spirit of Enterprise Center at ASU’s W. P. Carey School of Business of the 10 finalists, who will be in attendance. The awards, now in their 16th year, honor firms for ethics, energy and excellence in entrepreneurship. A grueling nomination process includes answering 13 in-depth essay questions, then approximately 20 nominees are invited as semi-finalists to make a presentation and 10 finalists are chosen, Naumann explains. Judges look at how well a business fulfills the individual requirements “combined with a great entrepreneurial story,” says Naumann, noting it’s not a matter of just assigning valuation in terms of size or pre-set categories. It’s harder to define but “we know it when we see it.” These awards are just one focus of the Spirit of Enterprise Center, which helps hundreds of businesses each year. Part of W. P. Carey’s management department, the center has its own curriculum geared toward an entrepreneurial mindset that looks at it as the pursuit of opportunity without regard for resources currently controlled for the idea, Naumann explains, adding it’s an overall process that also fosters intrapreneurship, such as “people from Fortune 500 companies thinking entrepreneurially how to improve their division.” The center offers companies the chance to recruit and meet with top student talent, while also allowing students to get hands-on business experience. One key program, Student Teams for Entrepreneurship Projects, matches teams of W. P. Carey School of Business students with Valley companies to help tackle real-world challenges and opportunities. Companies can also use the center to access other ASU business resources. The center is self-funded and utilizes community sponsorships and volunteers to sustain its activities. This year’s 10 finalists are 180 Degrees Automotive, CyberMark International, Daphne’s Headcovers, GlobalMed, Hard Dollar, LawLogix Group, NJOY Electronic Cigarettes, Optimal Performance Training, Real Property Management East Valley and Total Transit. Hundreds of Valley entrepreneurs, community leaders, Arizona State University students and others are expected to attend the annual awards luncheon. Registration for the luncheon is $120 per person until Oct. 15, after which it will be $150. —RaeAnne Marsh

Two full days of panels, workshops and keynote speakers will fill the Phoenix Convention Center halls on Oct. 19 and 20 as MBA Women International hosts its annual conference this year in Phoenix, to follow a one-day retreat for the organization’s leadership on Oct. 18. The conference will focus on topics relevant for all women MBAs. Panels include “Women Who Made It to the C-Suite,” “How to Work with the Media Effectively,” “International Experience in Career Development” and “How to be a Successful Leader at any Stage in Your Career.” Keynote speakers for Friday’s breakfast and lunch will be Lee Rhodes, founder of glassbaby.com and Entrepreneur Magazine’s 2011 Entrepreneur of the Year, and Ann Daly, Ph.D., founder of WomenAdvance.com, respectively. Rhodes created her blown-glass glassbaby candle vases when she was battling cancer, and now donates proceeds from their sales to healthcare-assistance charities. Daly is an executive coach who specializes in women’s success and advancement through her online career accelerator. Saturday’s keynote speakers will be Sara Canaday, president of Sara Canaday & Associates, and Leo Hindery, managing partner of InterMedia Partners private equity fund. Canaday, an executive coach, is the author of You According to Them: Uncovering the Blind Spots That Impact Your Reputation and Your Career, among other titles. Hindery’s career spans leadership positions at a variety of businesses as well as industry organizations that include the Council on Foreign Relations and the U.S. Economy/Smart Globalization Initiative at the New America Foundation. MBA Women International is a not-for-profit organization dedicated to the advancement of business women as corporate leaders, executives and entrepreneurs. Registration for the conference is $350 for MBAWI members and $450 for non-members. —RaeAnne Marsh MBA Women International mbawomen.org

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Thurs., Nov. 1 — 11:15a – 1:30p

Spirit of Enterprise Center

spiritofenterprise.org

Notable Dates This Month Mon., Oct. 8 Columbus Day observed Fri., Oct. 12 Columbus Day (traditional) Wed., Oct. 31 Halloween Agenda events are submitted by the organizations and are subject to change. Please check with the organization to ensure accuracy. See more events online at www.inbusinessmag.com.

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O n t h e Ag e n d a ARIZONA SMALL BUSINESS ASSOCIATION Creating Your Effective Networking Commercial Tues., Oct. 9 2:00p – 3:00p

Get tips to develop an effective 30-second networking commercial in this hand-on workshop. Members: free; non-members: $10 ASBA’s Business Education Center 4600 E. Washington St., Phoenix asba.com/events

Workshop Series: Healthy Arizona Worksite Program Thurs., Oct. 16 7:00a – 11:30a

One of a 5-part workshop series on implementing or enhancing a worksite wellness program. Free; limited seating ASBA’s Business Education Center 4600 E. Washington St., Phoenix jsealy@asba.com.

The ABC’s of Cash Flow Tues., Oct. 23 9:00a – 10:30a

Join the ASBA Business Mentoring Team for a discussion on how to manage and grow your business’ cash flow. Members: $15; non-members: $30 ASBA’s Business Education Center 4600 E. Washington St., Phoenix asba.com/events

ARIZONA TECHNOLOGY COUNCIL Growing Technology in Arizona Thur., Oct. 4 10:00a – 6:00p

Presented by the Arizona Commerce Authority: Explore the dynamics of sustaining and expanding technology competitiveness through discussions about the opportunities and challenges. Members, $75; non-members: $100. Lunch and evening networking receptions are provided. Hilton Scottsdale Resort & Villas 6333 N. Scottsdale Rd., Scottsdale aztechcouncil.org

Lunch and Learn: Keys to a Successful Unified Communications Deployment Tues., Oct. 9 11:30a – 1:00p

Presented by Level 3 Communications: Learn how unified communications can bring collaborative applications together, lower costs, and boost productivity. Members, free; non-members: $15. Lunch is provided. Seasons 52 2502 E. Camelback Rd., Phoenix aztechcouncil.org

October 2012

Lunch and Learn: Seven Steps to Marketing Success Tues., Oct. 16 11:30a – 1:00p

Presented by Leap Innovation: Learn how to develop strategy before tactics, create a total Web presence and other steps to success. Members, free; non-members: $15. Lunch is provided. ASU SkySong 1475 N. Scottsdale Rd., Scottsdale aztechcouncil.org

ECONOMIC CLUB OF PHOENIX Luncheon

Thurs., Oct. 11 11:30a – 1:30p

Speaker: Dan Harkins, owner and CEO of Harkins Theatres Members: fee varies with membership; non-members: $75; advance registration required JW Marriott Desert Ridge Resort & Spa 5350 E. Marriott Dr., Phoenix econclubphx.org econclubphx.org

Lunch and Learn: Cross-cultural Communication and Negotiations

Workshop: Harvesting Knowledge from Frontline Employees

Presented by Thunderbird Online, Thunderbird School of Global Management: Topics include preparing for cultural competence, analyzing cultural gaps and practicing cultural due diligence. Members, free; non-members: $15. Lunch is provided. The Venue Scottsdale 7117 E. 3rd Ave., Scottsdale aztechcouncil.org

$550; discounts available for some groups ASU Research Park 8750 S. Science Dr., Tempe (480) 965-7579

Tues., Oct. 30 11:30a – 1:00p

CENTRAL PHOENIX WOMEN Luncheon

Mon., Oct. 8 11:30a – 1:30p

Lynda Shely, Esq. of the Shely Firm, PC, will discuss “Ethics in Today’s Business World.” $75 The Ritz-Carlton, Phoenix 2401 E. Camelback Rd., Phoenix centralphoenixwomen.org

CHANDLER CHAMBER OF COMMERCE 2012 East Valley Business Expo Wed., Oct. 3 2:00p – 6:00p

Between 1,500 and 2,000 attendees are expected and more than 160 exhibitors will be on site. Free Mesa Convention Center 201 N. Center St., Mesa Brad Ness, (480) 963-4571 x205

When Work Works Awards Breakfast Thurs., Oct. 4 7:30a – 9:00a

This prestigious award celebrates workplace flexibility. $20 Crowne Plaza San Marcos Golf Resort One San Marcos Place, Chandler Karen Hall, karen@chandlerchamber.com

Fri., Oct. 26 8:00a – noon

GREATER PHOENIX BLACK CHAMBER OF COMMERCE 2012 Economic & Career Summit Thurs. & Fri., Oct. 11 – 12 All day

“Making Coast to Coast Connections” Members, full registration: $75; nonmembers, full registration: $100; summit only: $60; Friday night concert only: $50; Friday expo and career fair: free Marriot at McDowell Mountains 16770 N. Perimeter Dr., Scottsdale (602) 307-5200

GREATER PHOENIX CHAMBER OF COMMERCE 25th ATHENA Awards Luncheon Thurs., Oct. 25 11:30a – 1:30p

Members and nominees: $65; nonmembers: $75 Arizona Biltmore Resort & Spa 2400 E. Missouri Ave. Phoenix, AZ 85016 (602) 495-2182

NATIONAL ASSOCIATION OF WOMEN BUSINESS OWNERS Meet the Mayors Luncheon Wed., Oct. 10 11:00a – 1:00p

Join us for a moderated panel discussion with the mayors of Phoenix, Mesa, Scottsdale, Chandler and Tempe. Learn what you need to know about city government to help your business. Members: $38; non-members: $48; additional $15 after Oct. 5 Phoenix Country Club 2901 N. 7th St., Phoenix nawbophx.org

October NAWBO University Wed., Oct. 10 9:30a – 11:00a

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“Social Media Demystified” (Part 1). Featured speakers: Lisa Bhella, owner of INBOX2OUTBOX, LLC, and Kristin Slice, co-owner of Three Dog Marketing LLC. Members: free; non-members: $30 Phoenix Country Club 2901 N. 7th St., Phoenix nawbophx.org

Coffee with the President Wed., Oct. 17 8:00a – 9:00a

Share ideas, suggestions and new information and connect with NAWBO Phoenix president Lynda Bishop and other board members. Free Paradise Bakery 14884 N. Pima Rd., Scottsdale nawbophx.org

PEORIA CHAMBER OF COMMERCE Business Seminar Wed., Oct. 24 8:30a – 11:30a

“Operating Your Small Biz in the Black” Free Peoria Chamber of Commerce 8631 W. Union Hills Dr, Peori (623) 979-3601

SCOTTSDALE AREA CHAMBER OF COMMERCE Breakfast with a Side of Politics Fri., Oct. 5 7:15a – 9:00a

Meet the Candidates for the Scottsdale City Council November run-off election. Members: $20; non-members: $30; day of event: add $5 Doubletree Paradise Valley Resort 5401 N. Scottsdale Rd., Scottsdale scottsdalechamber.com

27th Annual Sterling Awards Luncheon Tues., Nov. 13 11:30a – 1:30p

The Sterling Awards embody the spirit of our organization by celebrating the people and companies that make our community a great place to live, work and play. $75 Chaparral Suites Resort Scottsdale 5001 N. Scottsdale Rd., Scottsdale scottsdalechamber.com

SURPRISE REGIONAL CHAMBER OF COMMERCE Annual Golf Tournament Fri., Oct. 5 8:00a – 2:00p

Join us for a morning of fun golf with competitive opportunities for golfers and non-golfers alike. $125 Wigwam Resort & Spa 300 Wigwam Blvd., Litchfield Park surpriseregionalchamber.com

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Please confirm, as dates & times are subject to change.

Business Education Seminar Fri., Oct. 26 8:30a – 10:00a

“Developing, Understanding, and Managing your Sales Process” presented by Allan Himmelstein. Free; prior registration required Communiversity @ Surprise 15950 N. Civic Center Plaza, Surprise surprisregionalchamber.com

TEMPE CHAMBER OF COMMERCE Hot Topics and Lunch Thurs., Oct. 18 11:30a – 1:00p

Three of the Tempe Chamber’s recent Business Woman of the Year recipients will have a conversation about what it takes to succeed in life and business. Sponsored by SRP. Members: $25; non-members: $35 Hotel Tempe InnSuites Airport at the Mall 1651 W. Baseline Rd., Tempe Sachiyo Ragsdale, sachiyo@tempechamber.org

State of the City Address Fri., Nov. 9 7:30a – 9:00a

Hear from new Tempe Mayor Mark Mitchell. Members: $50; non-members: $70; advance RSVP required.

Tempe Mission Palms Hotel 60 E. 5th St., Tempe Sachiyo Ragsdale, sachiyo@tempechamber.org

ASU SkySong 1475 N. Scottsdale Rd., Scottsdale growthnation.com/azigg/upcoming-events

WEST VALLEY WOMEN

Thurs., Oct. 11 8:30a – 10:00a

Woman of the Year Luncheon Tues., Oct. 2 11:30a – 1:00p

$35 Arizona Broadway Theatre 7701 W. Paradise Lane, Peoria westvalleywomen.org

WOMEN OF SCOTTSDALE 14th Anniversary Celebration Luncheon Fri., Oct. 19 11:30a – 1:30p

Business Professionals Breakfast Come prepared with your questions, as this will be an open format for you to get the answers pertaining to your business or industry. Starbucks coffee and a continental breakfast will be served. The Microsoft Store 7014 E. Camelback Rd., Scottsdale scottsdaleevents@microsoft.com

MBA Women International Conference Thurs. – Sat., Oct. 18 – 20 All day

OTHER BUSINESS EVENTS

Speakers, panels, workshops and presentations will cover topics relevant for all women MBAs. Members: $350; non-members: $450 Phoenix Convention Center 100 N. 3rd St., Phoenix mbawomen.org (See article on page 35.)

Grow Globally 2012

Women in Business Breakfast Social

AZIGG’s once-a-year event presenting all of Arizona’s global business resources. $30

Mingle and connect with local female business professionals. Starbucks Coffee and continental breakfast treats will be served.

$35 The Westin Kierland Resort and Spa 6902 E. Greenway Pkwy., Scottsdale womenofscottsdale.org

Mon., Oct. 8 4:00p – 6:00p

Tues., Oct. 30 8:30a – 10:00a

Free The Microsoft Store 7014 E. Camelback Rd., Scottsdale scottsdaleevents@microsoft.com

Spirit of Enterprise Awards Thurs., Nov. 1 11:15a – 1:30p

The awards, now in their 16th year, honor firms for ethics, energy and excellence I entrepreneurship. $120 until Oct. 15, then $150 JW Marriott Desert Ridge Resort & Spa 5220 E. Marriott Dr., Phoenix spiritofenterprise.org (See article on page 35.)

Governor’s Celebration of Innovation Thurs., Nov. 8 3:30p – 9:00p

Technology showcase and awards gala. Arizona Technology Council members: $150; non-members: $200 Phoenix Convention Center 100 N. 3rd St., Phoenix aztechcouncil.org/gcoi2012 If your event is directed to helping build business in Metro Phoenix, please send us information to include it in the In Business Magazine events calendar. Email the information to: events@inbusinessmag.com.

In Business Magazine is read by those vested in business Valleywide

To get your Marketshare . . . Advertise with www.inbusinessmag.com • info@inbusinessmag.com • (480) 588-9505 inbusine ssmag.com

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Education

Helping Raise the Bar on ... Finance

If Cash Is King, then Working Capital Is God

Management of a company’s working capital is crucial for day-to-day functioning and long-term survival by Dennis Niven Working capital management is the most important management activity in emerging and mid-sized companies because of the significant financial impact that it has on the company’s well-being. While most CEOs and business owners have heard and accept that “Cash is King,” working capital is often the least understood and most poorly managed area of their companies. When working capital is not adequately managed, the deterioration of cash flow critically affects a company’s ability to fund operations, reinvest in the business and, ultimately, to survive. With adequate working capital management, cash flow supports a company that thrives in the marketplace.

‘Working Capital’ Defined Working capital for business is often referred to as simply the excess of short-term assets over short-term liabilities. Short-term assets include cash and other assets expected to be turned into cash within one year: marketable securities, accounts receivable, short-term notes receivable, inventory and prepaid expenses. Short-term liabilities include those expected to be paid with cash within one year: accounts payable, shortterm debt such as credit lines, the short-term portion of long-term debt and accrued expenses.

What is Adequate Working Capital? Adequate working capital for business varies, often extremely, from one business to another, and it varies from one day to the next. What might be adequate is quite different between times when excess cash needs to be invested and times when the business owner has no idea how to fund the next day’s payroll. Some industries (e.g., manufacturing) require a high level of working capital. They incur a long period of time from the time cash is first paid for what is eventually sold to the time cash from the sale is finally collected. Other industries (e.g., large retailers) require little working capital because they sell products for cash before it is required to pay for the product, and profits are readily available for reinvestment in the business.

Working Capital Financing Ideally, companies finance working capital for business through adequate capitalization by owners and profits reinvested in the business. Business funding of various types is often needed, however, especially in the day-to-day operations of growing businesses. Common types of working capital financing include owner contributions and loans, extended vendor terms, bank financing secured by receivables and inventory, revolving business credit card debt, merchant credit card advances, and factoring of accounts receivable. Note that this does not include loans for long-term assets, such as buildings and equipment, which do not revolve and should be financed

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with term-debt secured by the long-term assets. A company might turn to venture capital in extreme, established growth situations.

Cash Conversion Cycle The biggest single use of the cash provided by a growing company’s profits is growth itself, because goods sold on open accounts require an outlay of cash well before cash is received from the sale of the goods. This is especially true in businesses that sell out of an inventory of goods, but applies in the sales of services as well. Simply explained with an example, if a business holds inventory for an average of 82 days, takes an average of 36 days to collect accounts receivable and pays its accounts payable in an average of 28 days, the business will have a cash conversion cycle of 90 days (82 + 36 - 28). Ideally the carrying cost of the cash conversion cycle is included in the sales price of products, but what does this mean to this company that is going to grow from $10 million in sales to $14 million in sales this year (with a 35-percent gross profit and 10-percent selling, general and administrative expenses while increasing inventory by only 20 percent)? The company will require a cash injection of more than $779,000 to finance the cash conversion cycle, while the CEO or business owner may be naively expecting to have $400,000 more in cash from profits. The swing between perception and reality can be quite shocking, especially when the available credit line going into the year is, for instance, $200,000. This does not mean growth is bad. It does mean it must be carefully forecasted and managed. The biggest step is finally recognizing that growth requires a lot of cash. B2B CFO b2bcfo.com

Dennis Niven, CPA, CGMA, CM&AA, is a Scottsdale, Arizona, partner in B2B CFO®, The World’s Largest CFO Consulting Firm™. Niven specializes in Finding The Exit® and The Exit Strategy™ consulting, and provides articles on the subject on his website (www.dennisnivencfo.com).

Finance

the Education Series

q If Cash Is King, then Working Capital Is God q Best Practices for Accounts Receivable Collection q The Crucial Monthly Close To reference published segments, please access the archived “How To” articles on the In Business Magazine website, www.inbusinessmag.com.

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by Mike Hunter

We Value What We Own

Fuel Efficient: 2013 Lexus GS 450h Technology meets performance in this sports sedan by Lexus. The “gold standard” in the new automobile industry is combining speed and performance with fuel efficiency and eco-performance. Lexus is engineering such a vehicle with the GS 450h hybrid sports sedan. The Atkinson Cycle 60° V6, aluminum block and heads, direct and port fuel injection engine boasts an acceleration of 0-60 mph in 5.6 seconds and claims a 31-mpg in combined city and highway driving. These are impressive numbers that, through the technology of this certified Super Ultra-Low Emission Vehicle (SULEV II) due to the re-design of the gasoline engine and the electric motor, garner attention. Stiffer suspension and improved steering and a tighter structure make handling a notable improvement for 2013 as well, making this sedan a sporty option for those seeking both performance and environmental consciousness. The system is driver-adjustable to include Eco, Normal, Sport and Sport Plus settings, and, besides the suspension, it also controls steering effort, throttle response and stability control intervention. No longer a sluggish, eco-friendly sedan, the Lexus GS 450h excited with its new styling for the second-generation GS models that give curb appeal and make heads turn. A more contemporary interior design with sport seats, fewer controls and simplified,

2013 GS 450h Hybrid City MPG . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29 Hwy MPG. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34 0-60 MPH. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.6 sec Transmission. . . . . . . . . . . Electronically Controlled Continuously Variable

Assets

Write-Off: Business Gadgets Here are some great, new, innovative gadgets that can be written off.

iTwin Multi

user-friendly technologies equip this model. Bamboo accents and the usual Lexus highquality materials bring a new level of luxury to this line. Navigation, one-touch remote entertainment, Bluetooth technologies and a larger central display are notable upgrades that move this hybrid to meet the Mercedes E Class and the Infiniti in luxury. While the fuel economy is an impressive technological difference this year (the 2012 was 23 mpg combined), this hybrid is priced about $11,000 more than the gasoline engine GS 350 with comparable features. Like most hybrids, this vehicle, while fuel-efficient, will not realize a cost savings unless the owner keeps the vehicle for more than 19 years. Improvements are evident, however, since the 2012 model had an estimated 57-year span to equate cost savings. Most would agree the Lexus is not the brand to look to for economic relief, so engineers have succeeded from an environmental standpoint and designers have surpassed expectations to make the GS 450h a competitor in its class.

iTwin allows users to access files remotely and collaborate with other people without trusting data to cloud services like Dropbox. This splittable USB device lets a computer access another system’s files once the two halves are plugged into two Webconnected machines. iTwin uses two-factor authentication, military-grade 256-bit AES encryption and a remote disable feature in case one of the halves is lost or stolen. $99 itwin.com

AudiOffice

Users can call from their mobile line or phone apps on the AudiOffice and enjoy a rich, enveloping sound in a conference call and a clear sound with the comfortable handset. And away from work, its optimum acoustic qualities enable users to get more out of their music listening. $299 invoxia.com

Photo courtesy of Toyota Motor Sales (left); courtesy of iTwin, AudiOffice, Blue Microphones (right, top to bottom)

MSRP. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $58,950

Tiki Microphone

With its ability to focus on the desired sounds, minimize any background noise and recognize when to mute altogether, this new Tiki is the world’s first USB microphone to mimic the intelligence of human hearing. It offers two modes, which allows Skype users and podcasters the versatility to quickly choose the best option for a given situation. $59.99 bluemic.com/tiki

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“We must view education as an investment, not an expense.” SHELLEY ESQUE Vice President, Intel

The education we provide for Arizona’s children will determine the kind of future we all enjoy. Arizona employers need a highly skilled, talented workforce to diversify our economy, increase job opportunities and stay competitive.That requires a stronger education system that begins at birth and continues through career. By investing time, talent and money to improve education today, we better position Arizona for long-term success. In the end, we all benefit. Education is everyone’s business. Make it your priority. Visit ExpectMoreArizona.org.


by Mike Hunter

Meals that matter

Power Lunch

South of the Border Home to some of the best Mexican food “north” of the border, the Valley is a hot spot for new Mexican cuisine. Here are a few:

America’s Taco Shop — Phoenix & Tempe

There is one place in the Valley to get Carne Asada that is tender and crispy in all of the right ways. That’s America’s Tacos. A quaint “taco shop” with three locations to serve. Unique, Baja flare and atmosphere where authentic modern Mexican taste is unforgettable. 2041 N. 7th Street, Phoenix • (602) 682-5627 4447 N. 7th Avenue, Phoenix • (602) 515-0856 735 E. University Drive, Tempe • (480) 751-6250 americastacoshop.net

Carolina’s Mexican Food — Phoenix & Peoria

Photo courtesy of Old Town Group (left); courtesy of Milagro Grill (right)

In the Raw: Stingray Sushi

Set in an ultra-contemporary surrounding, Stingray Sushi is a unique take on the typical sushi restaurant in that it is taking its concept to a new level, fusing creative cuisine with Japanese-American classics. Holding true to its mission of tempting the senses, Stingray Sushi is where taste, sound and the visual come alive. For taste, Stingray can be that midday getaway for colleagues, clients and/or friends. This concept is attracting a larger business crowd because, sushi lover or not, there is something there that will excite all. From scrumptious Gyoza to a lunch Bento Box, flavor and the finest ingredients are apparent. The Poached Chicken salad, made with mixed Asian greens and a sesame mustard dressing, is a light, protein-heavy choice. For a main dish, try a beef filet grilled with a teriyaki demi glaze over garlic mash potatoes and asparagus. Sushi is a specialty and the Crispy Spicy Tuna is fresh and delicious, crispy to the crunch — and an all-time favorite. The Cucumber Wrap Maki is a light version of some of the specialty Maki items from the menu. The Original Lollipop and the Pepino made with King Crab, salmon, avocado and spicy tuna are among the favorites. The interior of the three Valley locations is all about sight and sound as well. Hip music that is appropriate for the lunchtime meal and a custom-designed décor of deep reds with rich woods and contemporary style present the distinctive atmosphere that the business crowd can appreciate. A great bar at each location, bold fixtures and delicate comfort mean this is a dining experience for all to enjoy anytime. Good food, eclectic culinary options and quality service will make a success out of the lunch hour at Stingray Sushi.

Authentic Mexican in a “quick to the point” concept. Order by the number and be more than amazed at the flavors. Order in bulk or just for a quick bite. Tortillas made fresh, Machaca to remember and combo plates to experience a bit of it all. 2126 E. Cactus Road, Phoenix • (602) 275-8231 9030 W. Peoria Avenue, Peoria • (623) 487-1400 1202 E. Mohave Road, Phoenix • (602) 252-1503 carolinasmexicanfood.com

Milagro Grill — Phoenix

New, contemporary Mexican, infused with American and European influences, Milagro Grill is the brainchild of the Macayo founder’s grandchildren. Mexican flatbreads, pinchos, soups, salads and tacos ripe with flavor mean this new spot is one to watch. 4280 E. Indian School Road, Phoenix (602) 773-5844 milagrogrillaz.com Milagro Grill

Stingray Sushi 4302 N. Scottsdale Road, Scottsdale • (480) 941-4460 2502 E. Camelback Road, Phoenix • (602) 955-2008 15027 N. Scottsdale Road, Scottsdale • (480) 427-2011 stingraysushi.com

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At Waste Management, giving back is a responsibility we take to heart. Learn more at www.wmofarizona.com

A community partner. Waste Management is a valued and trusted community partner. Every year, we give back tens of thousands of dollars to community organizations in need. Waste Management is proud to support Big Brothers Big Sisters of Central AZ, the Special Olympics, Keep Phoenix Beautiful and Habitat for Humanity. 1-800-796-9696

Š2010 Waste Management, Inc.


Special Safety Insert


6. Put a comeback plan together; when a worker is injured, use a return-to-work plan that offers transitional duty, light or modified duty. A return-to-work program boosts employee morale, increases productivity, minimizes retraining of additional employees and lowers the risk of potential litigation 7. Partner up; apply to become a member of an Association Safety Program with one of SCF Arizona’s partnering associations to benefit your safety rating. Safety association members may also qualify for a bonus safety dividend when the SCF Arizona Board of Directors declares one. 8. Be proactive about seasonal illnesses; plan for the impact such sickness, such as influenza, might have on worker productivity. 9. Report an injury promptly and document the event by investigating the causes. Promptness is essential, as those involved may forget important facts. Filing is the first step in determining compensability and ensures your employee receives the medical treatment to which he or she is entitled. 10. In the event of a worker injury, trim medical costs by taking advantage of SCF’s Preferred Connection Network of medical professionals and facilities that are trained in work comp injuries. Under Arizona law, employers may direct an injured worker to a designated medical provider on a onetime basis. Smart employers choose a PCN provider before an injury ever occurs and make sure their employees know where that provider is located. 11. Partner with your claims adjuster to report changes or facts related to a claim. The adjuster can point out ways to keep your costs down. 12. Report possible subrogation (third-party) actions. Subrogation is the right of an insurer to pursue a third party that may have been responsible for an insurance loss to a policyholder. 13. Be alert; report suspected fraud. Workers’ comp fraud comes in various ways: from claimant, policyholder or provider. All forms have an impact on premium, because the billions of dollars lost each year due to fraud are spread among all policyholders to cover the losses. Workers’ compensation fraud is a felony. If you suspect fraud, call the SCF Arizona Fraud Hotline at 800.526.5226. Callers may remain anonymous.

Safe servicing lockout, tag out dangerous energy sources Workers who service machinery can be exposed to dangerous, live energy sources. To protect workers from being shocked, burned, crushed, cut or killed, be sure to:  Use and enforce an energy-control program

and procedures, including annual inspections.  Provide effective training to all employees

working in or around live equipment or machinery. Implement proper lockout/tag out strategies and train employees in them.  Visit scfaz.com to take advantage of free,

online work safety resources.

602.631.2600 | Get a Quote 1.888.706.4070 En español 602.631.2302 | scfaz.com


Who is SCF Arizona?

Strong, stable workers’ comp company ‘at work for you’ When one of your workers is injured on the job, who are you going to call? For most Arizona businesses, the answer is SCF Arizona, which provides workers’ compensation insurance coverage for more than 25,000 businesses statewide, ensuring workers the care they need if they are injured on the job. SCF has been providing workers’ compensation insurance longer than anyone else in the state. That’s because in 1925, the Arizona Legislature founded the state compensation fund (SCF Arizona) as part of the Industrial Commission. Lawmakers allocated $100,000 as startup capital. But the statute mandated that SCF’s operational and administrative costs be paid solely by premiums. The state was paid back in 1938, two years early. Since that original allocation, SCF has not received any money from the state nor from residents’ taxes. Today, SCF holds total assets of more than $3.4 billion to protect policyholders and their workers. SCF’s and Arizona’s past, present and future are tightly intertwined, and the workers’ comp insurer has been recognized as an economic engine in the state throughout the myriad ups and downs of the economy.

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Workers’ Compensation News

Workers’ Compensation Creation of workers’ compensation insurance generally dates back to the 1880s in Germany, although the concept was evolving as for centuries going as far back to the Sumerians more than 5,000 years ago in Mesopotamia. Wisconsin, in 1911, became the first state in the nation to mandate workers’ compensation insurance. The noble concept spread quickly, as business owners sought tort relief from workers whose only avenue of redress from suffering workplace injuries and loss of earning power was through the courts, which could result in costly legal expenses driving some companies out of business. Workers’ compensation insurance is a backstop that protects employer and employee. The insurance coverage provides a business owner peace of mind that, should an employee be injured on the job, that worker will receive the medical treatment needed in exchange for an agreement not to file a lawsuit against the employer. This is especially important because, unlike other lines of insurance where a claim can be settled quickly, a workers’ compensation claim can remain in effect for many years. For example, a worker who suffered a disabling injury in 1940 may still be receiving benefits today.


Piecemeal exclusions In 1968, the Arizona Legislature removed SCF from the Industrial Commission, so, beginning in 1969, the company began operating as a separate entity. The statutory mandate, however, remained the same: to provide a ready market of workers’ compensation insurance for Arizona’s employers at the lowest possible cost. Arizona’s governor also has continued to appoint the SCF Board of Directors. not-for-profit agency, SCF’s income As a not-for-profit comes from customers’ premiums and from the investments it makes and property it owns. Income not used for benefits to injured workers or for operating benefits the company is returned to qualified qualified policyholders in the form of safety dividends, when the board approves them. The board’s decision is based each year on the financial performance. company’s financial While the company says dividends are never guaranteed, it has returned money qualified policyholders for 41 straight to qualified years, totaling more than $1.5 billion to eligible customers. In 1989, the state exempted SCF from public financing financing for state agencies, including purchasing, telecommunications and state motor pools. And in the next year, SCF was removed from the state’s personnel and the state risk management systems, which means Arizona does not insure SCF’s financial assets. properties or financial That same year, the legislature made it clear that SCF’s operations were “without liability of the state.” This modification modification made it clear the state’s general fund would not be liable in the event that SCF was unable to pay claims. But be assured, SCF is in no danger. The company is well reserved for the future. Once SCF was separated from the Industrial Commission, legislators began to recognize SCF’s substantial assets — which are held in reserve to ensure injured workers’ care — and during tough economic times, some state officials officials have attempted to use the money to help alleviate state debt. SCF has always fought these attempts and, in 2004, Maricopa County Superior Court

Judge Rebecca A. Albrecht settled the matter when she ruled, “The monies and assets held by SCF are not public funds, but are funds held in trust by SCF for the employer and, ultimately, for injured employees and their families.” She added, “The assets must be used solely to pay workers’ compensation benefits benefits and administrative expenses of the Fund,” adding that the relationship between customer and SCF is a contractual one, which requires that all SCF Board’s decisions be made “in the best interest” of the policyholders. Perhaps that court ruling was the impetus some lawmakers needed to seek a complete break for SCF from state. In 2010, the legislature passed and Gov. Brewer signed a bill that directs SCF to become a private mutual insurance company beginning Jan. 1, 2013.

Making it easier to do business The company’s journey toward becoming a mutual insurance company is proceeding. In the meantime, however, SCF continues, as it has for 87 years, to provide state businesses unsurpassed excellence in worker’s compensation. Living up to its motto — “SCF is at work for you” — the company provides innovative workers’ compensation insurance solutions to businesses that seek the best in workplace safety protection. SCF also strives to make it easy for its customers to do business with it, building trust and loyalty. During the past decade, SCF has earned recognition as the state’s leading advocate for workplace safety. By sponsoring Safety Works Expos each year throughout the state, the company brings together safety experts and professionals to share the latest information on workplace safety. But its commitment to provide businesses with valuable information has grown, and SCF now is considered an important ally

and advocate to the business community. It partners with nearly 40 industry associations and business organizations, and provides valuable information to companies regarding hot issues of the day, such as what impact Arizona’s medical marijuana law may have on their workplaces, or how to implement a wellness program to help control obesity in the workplace — one of the leading drivers of workers’ compensation costs. During the past few years, SCF has concentrated on improving the resources Arizona businesses need to manage their workers’ compensation insurance effectively and to create safer workplaces. The company’s website, for example, allows policyholders to easily and conveniently file file a claim or view already reported claims, enter payroll, print certificates certificates of insurance and pay premiums. The site also gives customers access to free safety training materials, a video library with safety videos, interactive quizzes and even a quick quote in three easy steps. SCF’s evolution as a company includes the addition of seven subsidiaries that allows the company to price its workers’ compensation insurance coverage based on a customer’s size, loss history and safety record. The subsidiaries are SCF Premier, SCF American, SCF Western, SCF General, SCF National, SCF Indemnity and SCF Casualty. The launch in 2010 of Mountain West Agency Services, subsidiary of SCF Premier, also signaled a major change in SCF’s sales methods, as, through the agency, SCF began permitting insurance brokers to sell its workers’ compensation insurance. Because of SCF’s strength and stability, it has been able to leverage its influence influence on the workers’ compensation market and keep Arizona’s rates among the lowest in the nation. In turn, this makes Arizona a prime state for job and economic growth, because it costs less to do business here.

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Learning the difference one can make, by giving time A child-size backpack filled with supplies may seem ordinary, but among SCF Arizona employees it represents a perennial opportunity to have a positive impact on children’s education. Since 2004 SCF employees have filled more than 10,000 backpacks statewide and distributed them to elementary students who otherwise wouldn’t be prepared to begin school each fall. The Pack-to-School program is one of many programs SCF supports. An ongoing effort to give back to the community begins at the company’s highest level, where company executives serve on boards, advisory committees and lend their expertise to developmental organizations, down through the ranks of its employees. “By being a volunteer, by being involved with nonprofits, on boards or in the arts, you know what’s going on in the community,” says Jill Maruca, SCF corporate giving and event planning specialist. “You gain an awareness of what your community needs and ultimately how you can better serve customers.” Maruca says SCF nurtures its culture of giving by engaging volunteers in hands-on opportunities and giving them meaningful support. “It is part of our social responsibility piece. It’s not just the money. When

you engage the employees, they’re happier and more productive; they appreciate the opportunity to volunteer, and the support the company gives them as volunteers,” Maruca says. In personalizing charitable giving, she adds, it makes a difference not only to the place where employees are volunteering, but in their own lives. In 2011, half of SCF’s workforce volunteered more than 5,200 hours. The company allows each employee 12 hours of paid time to volunteer. Add those hours to the personal time SCF workers give, and the impact translates to more than 31,000 hours spent with more than 100 Arizona charities since 2005. SCF has been well-recognized for its community involvement, nonprofit sponsorship and support of arts and culture, an indication that its “culture of giving” is a standout effort. “You have to engage employees to do volunteer work, because you gain an experience that’s different from pulling out your wallet. Other businesses that don’t encourage volunteerism are missing a way to give back, of increasing awareness of their company in the community and a way to build up their community,” Maruca says. For more on SCF’s role in the community, visit scfaz.com and click on “Corporate Responsibility.”

“Big” on partnerships SCF volunteers may be best known for a partnership with Big Brothers Big Sisters of Central Arizona. Company employees comprise the largest site-based program in the state at Heard Elementary School. This year, 24 SCF employees are participating in the program. Jo Ann Slick, an SCF administrative assistant, began her journey as a “Big” in 1994 when she was matched with Andrea Sanchez, then a 10-year-old Longview Elementary student. Though both are now out of the program, they continue to be part of each others’ lives.

Investing in Arizona Since 2006 SCF Arizona has invested more than $8 million to improve the lives of Arizonans. The company focuses its charitable giving and community involvement in two areas, education and quality of life. Areas SCF supports are: ƒ Educational initiatives targeting students and teachers ƒ Efforts to improve the health of Arizona’s children ƒ Safety efforts for corporations and the public ƒ Policy efforts to ensure equal treatment for all citizens ƒ Development efforts to expand and improve quality jobs and workplace safety ƒ Arts and cultural activities that enhance the quality of life in Arizona.

A place for small business to find HR, employment law answers Small business owners try to stay focused on running their businesses, but sometimes other concerns can prove to be big distractions. SCF Arizona has gathered experts to provide resources online at SafeAtWorkAZ.com, a blog covering workplace safety issues, HR and workers’ comp questions. Tucked within the blog is the Safe & Sound page, with articles about small business and workers’ compensation insurance. You can also follow SCF on Twitter (@SCFArizona), like them on Facebook or connect with them on LinkedIn. Or, visit SCF at scfaz.com, the company’s official website. 6

Workers’ Compensation News

“Whether it is education, health, safety or arts and culture, those are all pieces that make this a well-rounded place to live. You’re educating children who will grow up to be a good workforce, you’re promoting safety, arts and culture and that brings in new ideas and an improved economy,” said SCF Corporate Giving Specialist Jill Maruca.


Going solo

SCF Arizona eager to become mutual company For 87 years, SCF Arizona officially was considered a public entity, although it received no state funding or taxpayer money. Beginning Jan. 1, the organization no longer will have any ties to state government, as SCF transforms into a private, mutual insurance company. Arizona Gov. Jan Brewer signed into law a bill in July 2010 that directed SCF Arizona to become a mutual Don Smith insurance company. SCF Arizona Since that time, President & CEO the company has been preparing to make the transformation as seamless as possible for its business customers. Beginning in July, renewing customers began receiving word their policies will be transferred to the new company, which will continue to do business as SCF Arizona, on Jan. 1. The state’s largest provider of workers’ compensation insurance is based in Phoenix; it has offices in Tucson and Prescott, with staff also working in Flagstaff and Lake Havasu City. The shift from public to private will have little or no impact on policyholders, the company says. “We’ve essentially been working as a private company for decades,” said SCF President & CEO Don Smith. “We look forward to fully competing in the private marketplace and continuing to

be Arizona’s workers’ compensation insurer of choice. We have a long commitment to this state and this only will strengthen our ability to perform on behalf of our customers.” Executive Vice President of Sales and Business Development Rick Jones added that becoming a mutual insurance company enables SCF to broaden services, previously prohibited by state statute. He confirmed that, as the transformation takes place, the company plans to explore providing new lines of business insurance as well as whether to expand into other states. But he emphasized that SCF Arizona is a state-based company, founded in Arizona and committed to the state. “SCF is proud to keep our dollars at work supporting the state’s economy,” he said. Jones added that becoming a mutual company allows SCF to be more responsive to its policyholders. Under Arizona insurance laws, a mutual insurance company is owned by its policyholders. Like a credit union, the policyholders are “members” and they govern the company through a board of directors they elect. SCF Arizona’s customers will be asked to vote for board of director memberships sometime during spring 2013. “SCF Arizona policyholders will not notice anything different in their day-to-day dealings with us,” Jones said. “But over time, what they will experience is a more diversified company that can better serve their needs in Arizona and elsewhere.”

Financially, SCF Arizona is well capitalized for the change, holding more than $3.4 billion in assets. The payment of claims and other operational expenses comes entirely from the premiums SCF Arizona’s policyholders pay and revenues earned by its investments. According to Vice President, Marketing & Communications Phyllis Senseman, the change also allows SCF Arizona to expand its role as an advocate of business beyond workplace safety. “Until now, state law has limited our company to providing only workers’ compensation insurance, but as we move forward, we will have the ability to offer other lines of business insurance,” Senseman said. “This means that, as a company, we can advocate on behalf of our business community in more exciting and more varied ways, such as helping businesses better manage their employees and staying clear of legal issues that can help them avoid civil suits.” This new direction SCF Arizona will be able to take is one reason the company launched the blog SafeAtWorkAZ.com earlier this year. Employers can find expert information on HR best practices and workers’ compensation insurance issues. “This is an exciting time for SCF Arizona and, while our company is changing, we remain dedicated and committed to providing the best service we can to Arizona, its communities, businesses and residents,” Smith said.

Employers’ resource: loss control experts Loss control experts, such as those on staff at SCF Arizona, offer employers assistance in developing safety plans tailored to their specific needs. A safety plan, when implemented, can cut costs, decrease injuries, increase production and boost employee morale. SCF loss control experts show customers how to conduct a workplace safety audit to assess your entire safety system and

employees’ roles in it. You can begin building a companywide safety plan by downloading a free safety plan template from scfaz.com. Loss control experts offer professional guidance and workplace safety materials, as well as serve as a liaison between employers and your workers’ comp insurance carrier. To learn more about SCF Arizona and what we offer to customers, visit scfaz.com.

scfaz.com

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TEMPE CHAMBER

Advantage Sept. 2012 – Jan. 2O13 • tempechamber.org

Mayor Mark Mitchell to Address Community at Inaugural State of the City Address The Nov. 9 State of the City Address provides a unique opportunity for the public to hear from new Tempe Mayor Mark Mitchell during what will be his first appearance at the annual event. “The annual State of the City is an opportunity for us to let residents and business leaders know what the city is doing to maintain our quality of life and build Tempe into the strong regional partner that we know a prosperous future requires,” said Mitchell. “This is an excellent opportunity for us to evaluate where we’ve been and get the community involved in where we’re going.” Members of the community have always been treated to an informative and compelling

presentation by the mayor at this event. This year, Mitchell will be sharing his thoughts on the local social and economic climate along with his vision for the growth and future of Tempe and Arizona. This event provides a valuable opportunity to enjoy a breakfast with civic, business and political leaders of the Valley. The event takes place Friday, Nov. 9, from 7:30 a.m. to 9 a.m. at the Tempe Mission Palms, 60 E. 5th St. in Tempe. The public is invited to attend. Registration begins at 7:30 a.m., and Mayor Mitchell will begin his speech and presentation at 8 a.m.

Mark Mitchell, Tempe Mayor

Advance RSVP is required. Tickets are $50 for members, $70 for the public and $500 for a table of 10. RSVP online at www.tempechamber.org or by calling (480) 967-7891.

Meeting the needs of our membership By Renee Lopata, Senior Vice President, Tempe Chamber of Commerce The Tempe Chamber is always looking for programs, events and opportunities that provide value to its membership. After a comprehensive survey of our members, a need was apparent to connect business owners with each other; the outcome was the monthly Business Owners Forum. This meeting/committee provides a confidential, open dialog that allows business owners to share ideas, solve problems and gather opinions from other decision makers. Meeting the fourth Thursday of each month at local businesses, this is free for our members and all participants must be the business owner. The success of the Business Owners Forum is in part due to the leadership of Committee Chair Kelly Lorenzen of Morrison Vein Institute, who facilitates the discussion and makes sure all participants have an opportunity to share their ideas, questions and business challenges. Lorenzen also attributes its success to “business owners being able to discuss successes, hardships and ideas with other owners without feeling like they are going to be judged or sold something.” She continued, “It’s

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a great peer-to-peer group.” Coffee Connection is the Chamber’s leads group. Now filling its second group in south Tempe, Coffee Connection was specially designed by the Tempe Chamber and its Business Resource Advantage Committee to develop groups that will advocate and promote the businesses of members by passing qualified business leads to other members. Coffee Connection is open to any member of the Tempe Chamber, and membership in each group is limited to one person or business in any category. Networking is still the most requested benefit of membership. With free Business Before Hours and Business After Hours mixers each month, the Chamber continues to provide a forum that best suits our members. Morning mixers are fast, effective and allow each participant to give a 30-second commercial of their business while still having time to connect after the introductions. Business After Hours is less structured and provides a fun atmosphere while showcasing local member restaurants, hotels and entertainment venues. This is a great

Renee Lopata, Senior Vice President, Tempe Chamber of Commerce

opportunity to bring your staff and team build while promoting your company. The Networking @ Noon Luncheon is speed networking at its best! Meet 40 to 50 Chamber members in one afternoon while learning something interesting about them and their business. Members are also given tips on connecting with new leads and contacts after the luncheon. To learn more about the Tempe Chamber, visit www.tempechamber.org. For a special message from Tempe Mayor Mark Mitchell, please see page 5.

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Participants of last year’s inaugural Mentoring Program. Top row, from left: Julie Jakubek, Allstate Insurance Company-Julie Jakubek, MBA; Marla Hampton, Expert Tax & Accounting Services, LLC; Lorraine Bergman, Caliente Construction; Stasy Click, Law Office of Stasy Click, P.C.; Bobbie Cassano, Tempe Community Council; Kristy Lockhart, Veolia Transportation; Jackie Thompson, Southwest Airlines; Melody Johnson, Association for Supportive Child Care; Jan Whalen, Personal JAZ; and Linda Kalaf, immediate past chair of the Women in Business Council, Veolia Transportation. Seated, from left: Magdalena Johnson, SRP, and Bill Goodman, Morgan Stanley Smith Barney. Photo by Jay Mark

Mentor Program Offered to Promising Candidates The Tempe Chamber of Commerce and its Women in Business Council are proud to present the 2012-2013 Mentoring Program. Through the program, selected participants will gain an understanding of their true self through assessments and workshops. They will learn how to assess their values, create a vision for their life and live with purpose and passion. They will benefit from the program by developing into stronger, more capable leaders

while increasing their business acumen and learning how to grow into positions of greater importance and value. The Mentoring Program will take place from December 2012 through May 2013 and culminate with a graduation ceremony at the 2013 Women in Business Conference and Trade Show. Monthly organized events are complemented by one-on-one meetings and outings between the mentor and their protégé.

Various workshops and activities will be scheduled to contribute to the protégés’ individual development plans and to create an atmosphere that enhances the relationships and communication techniques between the program participants.  Applications are being accepted now through Oct. 12. For more information or to apply, visit http://bit.ly/MentorWIB or e-mail Linda Kalaf at linda.kalaf@veoliatransdev.com.

Here’s what some of last year’s participants had to say about the program:

“How wonderful to meet ambitious, positive, successful women in the professional community – such a refreshing experience. This process was worthwhile because it was the first time that I have had a community of women interested and invested in my professional growth and development for no other reason than to support and encourage.” — Melody Johnson, Protégé, Association for Supportive Child Care

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“My mentor took very seriously his mentoring responsibilities. He was always ready to meet with me outside of the program hours. He was very professional and personal…I knew that I could tell him everything and [that] anything that I tell him would stay between [the] two of us.” – Magdalena Johnson, Protégé, SRP

“The Mentorship Program was for me a great opportunity to connect on a different level with men and women who have and are making a significant impact on our community. My protégé, Jennifer, was an inspiration to me. She’s an ambitious and driven young woman who has a fresh outlook on her future. She marries drive and compassion with creativity that will continue to shape her career and ongoing success. She was by far the highlight of the program for me.” — Vicki Kringen, Mentor, TCH


Recently, the Tempe Chamber teamed up with Chamber Explorations to offer a once-in-a-lifetime journey to Cuba. Chamber Explorations had been issued a license by the Department of the Treasury authorizing registered guests of the program to visit Cuba legally. The nine-day trip began in Havana and included visits to such attractions as the beautiful Museo de la Revolucion, that displays documents and artifacts telling the country’s history; La Marketa de Havana in Old Havana; Pinar Del Rio Vinales; Trinidad; Playa Giron/Bay of Pigs Museum; Hemingway’s Farm; and much more. Chamber President/CEO Mary Ann Miller was fortunate enough to make the journey, and her musings are below.

My Travels to Cuba By Mary Ann Miller, President/CEO, Tempe Chamber of Commerce Cell phones and pay phones. Old Chevys and new Kias. Ration cards and nice restaurants. Pesos and convertible pesos. And music, everywhere music. I can’t adequately describe the sights and sounds of Cuba, nor the feelings I brought back with me. The People-to-People license under which we traveled gave us contact with dancing young children and an elderly orchestra conductor; a tour guide with a mechanical engineering degree and a boy with a runaway horse; a tobacco farmer and a restaurateur. All of them welcoming and friendly and warm. The trip was amazing, and we’ve managed to arrange for a very unusual souvenir – a special performance by the Orquesta de Cámara Concierto Sur at Tempe Center for the Arts on Oct. 15. We heard these amazing musicians in Cienfuegos, and the stars quickly aligned for their visit. I hope you will come to the performance and hear just a little bit of the magic we found on the trip.

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Tempe Chamber of Commerce As members of the Tempe Chamber of Commerce, you and your employees have access to exclusive discounts and programs. Through a variety of partnerships and affiliations, we are able to provide our members with discounts on legal services, identity theft protection, e-mail marketing and more, as well as provide access to educational programs and services. Visit www.tempechamber.org to take advantage of these great benefits.

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Your Success Is Our Business For more than a century, the Tempe Chamber of Commerce has built an environment that enhances the economic vitality of our membership and the business community. The business climate of Tempe, typical of the majestic desert surrounding it, is a hot one. New projects, renovations and continual improvements add to the hustle and bustle of a strong and thriving community. The 171,000 residents that call the 40-square-mile city home (and the more than 100,000 people who come to the city each day to work, learn and play) enjoy Tempe’s unique personality. The city is an exciting mixture of Southwestern hospitality, prosperity and success located in the hub of the metropolitan Phoenix area. Its strategic location is a boon to both businesses and residents who have convenient access to all areas of the Valley of the Sun, as well as major cities throughout the Southwest. This prime location contributes to its success in attracting and keeping dynamic companies within its borders. While enjoying dynamic growth, the city has maintained its unique personality and style through a careful and masterful blending of the new with the old. Respecting its heritage and energetically planning for the future, Tempe is a wonderful mix of history and modern urban amenities. Tempe has a distinct identity as an emerging destination city, replete with all the offerings of a city rich in economics, technology, culture, tourism and educational resources. We offer a blend of new developments, prestigious institutions and celebrated traditions. Tempe brings it all together – bright Arizona sun, rewarding places to work, diverse cultures, a myriad of recreational opportunities, the best in entertainment and an unparalleled Southwestern lifestyle. Tempe is the ideal place to live, learn, work and play! At the Tempe Chamber of Commerce, we ensure that the business community has everything it needs to thrive. We provide our members with the tools needed to achieve success at every level. We work with local, state and federal governments and civic organizations to create a positive business atmosphere. Weekly committee meetings, monthly programs and a host of special events, educational seminars, trade shows and conferences all serve to further strengthen the local economy by strengthening businesses. Tempe has the greatest concentration of high technology firms in all of Arizona. In addition, it

has the densest industrial area in Arizona, and two zip codes (85282 and 85281) represent the highest concentration of businesses in the state. Its favorable tax structure and proactive approach to business development, combined with its prime location, create the ideal climate for businesses to grow and prosper. Whether it’s an established venture or one seeking a new home, Tempe ensures that all businesses are welcomed. Homebuilders, multifamily developers and commercial ventures all thrive in Tempe’s business mix. Tempe understands and values the contributions of our business community. It has created an environment that nourishes its growth. The worldwide competition for business, industry, high-paying jobs and knowledgeable workers is intense. But Tempe has a strategy that will keep it competitive by fashioning a sense of place that appeals to those who value creativity, individuality, diversity and an appreciation of the eclectic. Whether belonging to a traditional, extended or alternative family, everyone can feel at home in Tempe. The city’s prosperity lies in the strength of those attracted to the community, a strength that will keep Tempe competitive for a long time to come.


Tempe’s Economic Recovery Is Here and Happening By Tempe Mayor Mark Mitchell Photo by Jay Mark

One of my top priorities as mayor is to ensure that Tempe has aggressive economic development goals to move our city forward. We are already seeing promising signs of recovery and, to those of us who live and work in Tempe, it’s not hard to see why. We are a high-tech haven, with 20 percent of all Tempe businesses focusing on technology. Names like Microsoft, Sitewire, Amazon and Silicon Valley Bank – among many others – have distinguished Tempe as a home for tech. Companies like First Solar and Medtronic are at the cutting edge of their industries. We are one of the most highly educated communities in Arizona. We are home to the largest public university in the country, Arizona State University, and more than a dozen colleges, trade schools and universities. About 40 percent of our residents over the age of 25 have bachelor’s degrees, while an impressive 18 percent have doctorate degrees. Our educated workforce creates an atmosphere of innovation, where anything is possible and business can flourish.

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We are a great place to locate or expand a business. Tempe’s advanced transportation network and central location in the Valley are among the attributes that make it a natural choice. Last year, with the help of Tempe’s economic development division, 18 major businesses expanded or found a new home in Tempe. This helped the city realize a 38 percent increase in business growth from the previous year. These businesses alone employ 2,400 people. What’s more, our industrial, office and retail vacancy rates are decreasing markedly. Tempe Town Lake and the Mill Avenue District are more connected than ever, thanks to the restoration of the Hayden Flour Mill as a unique event venue. The entire area, from the north bank of the lake to University Drive, is alive with activity. There have never before been more people living on and around Mill Avenue than there are today – including more than 500 new residents in the West 6th towers. These new residents contribute significantly to the vitality of area businesses.

Several new construction projects have begun this year across Tempe, including the Hub, a 269-unit student housing project on ASU’s main campus, and San Marquis, a large multifamily project at Baseline and Rural roads. The 11-story Marriot Residence Inn, with 173 rooms and a 3,500-square-foot conference center, is underway near the Tempe Transportation Center and is expected to open in early 2014. We also look forward to the grand opening of Discovery Business Campus, a 136acre office park along the Loop 101 Freeway and Warner Road. All of these current and future successes are built on Tempe’s decades-long track record as the place to be for business. We are at our best when we’re growing and redeveloping. Our City Council understands the importance of our decisions and priorities. We will always put our residents and businesses first, and you can count on me to be Tempe’s strongest advocate for business and progress.

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The Business of Elections By Mary Ann Miller, President/CEO, Tempe Chamber of Commerce The race to the presidency continues down the home stretch, and the candidates are going all out. No matter what side of the issues you support, it’s nearly impossible to ignore the range and volume of the discussion. But if you look past the surface to the underlying strategies and tactics, you’ll find a lot of great lessons to put to use in your business: • Know your product. Figure out just what it is you’re selling, and be ready to answer questions about the tiniest of details. • Differentiate your product. People need to know why they should spend their money with you. Let everyone know what you offer that your competitor doesn’t. • Keep your staff on task. Get the right people on board. Make sure everyone’s familiar with your product and on message, no matter to whom they’re talking. • Don’t give up. Along the way you’ll have successes and failures and some people will count you out. Realize you’re in it for the long haul. • Look for communal interests. Both politics and business can make for strange bedfellows. Where can you create synergies with other companies that will enhance your product? • Don’t be afraid to self promote. Forget what your mom taught you about boasting. If you’re not saying great things about your product, other folks won’t either.

• L  isten to criticism, but take it with a grain of salt. Pundits and critics will be happy to give you lots of advice. Some of it will be good. • Network, network, network. Learn to work the crowd at meetings, trade shows and community events. People do business with people they know; don’t expect to garner interest immediately. • Think of creative ways to get publicity. A product roll-out at a press conference is okay. A product roll-out at a press conference held at a filled stadium is attention-getting. • Know your end goal. Define your success, and focus your tactics and those of your team. Celebrate milestones, but never lose sight of your target. • Be gracious in victory and defeat. It’s a very small world. You never know when your competitor will become your partner. When all is said and done, running a business is like running for office. It requires intense dedication, long days and sleepless nights and a sometimes Sisyphean will. It can be challenging, frustrating and overwhelming. But when done correctly, well and fairly, it is a fulfilling and rewarding experience. As we watch the course of the election season play out, let’s pay attention to the lessons the candidates learn and employ them to ensure our own successes.

Ken Blanchard College of Business | College of Education | College of Nursing | College of Arts & Sciences | College of Fine Arts & Production

Campus • Evening • Online

A R I Z O N A’ S P R I VAT E U N I V E R S I T Y S I N C E 1 9 4 9 Get started today! 855.287.0174 | www.gcu.edu/inbusiness Grand Canyon University is regionally accredited by the Higher Learning Commission of the North Central Association of Colleges and Schools. (800-621-7440; http://www.ncahlc.org/ ).

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ASU Alumni Association Now Sells Sparky License Plates at Old Main On Aug. 24, the ASU Alumni Association hosted a ribbon-cutting event celebrating the opening of Old Main, the organization’s headquarters, as an authorized third-party plate provider by the state’s Motor Vehicle Division. Now the Old Main location sells personalized and non-personalized ASU collegiate license plates, also known as Sparky plates.  The event included remarks from Jenny Holsman Tetreault, executive director of operations at the Alumni Association; Christine K. Wilkinson, president of the Alumni Association; Marcos Gold, a recipient of the Alumni Association’s Medallion Scholarship, which is the primary beneficiary of income generated by the Sparky plate program; and Stacy Stanton, from the Motor Vehicle Division. Also on hand were approximately 30 of the more than 100 students currently receiving a Medallion Scholarship, the Alumni Association’s board of directors and other invited guests. More than 14,000 Arizona vehicles have Sparky plates. The Sparky plates cost $25,

$17 of which goes directly to fund the Alumni Association’s Medallion Scholarship Program, a comprehensive initiative that incorporates components of leadership, scholarship and service. Vehicle owners who own an ASU plate featuring the white background can replace it with the current all-gold Sparky plate for a $5

replacement fee. License plate transactions at Old Main include a $5 convenience fee. For more information on purchasing a Sparky Plate, visit alumni.asu.edu/services/sparky-plates. To learn more about the Medallion Scholarship Program, visit alumni.asu.edu/services/studentscholarships/medallion-scholarship.

Connect with the Tempe Chamber! Join us on Facebook

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Board of Directors Chairman of the Board: Jack Pisano Chair-Elect: Jeff Mirasola Mary Ann Miller, President and CEO, maryann@tempechamber.org

Treasurer: Phil Howard

Sean Donovan, Vice President, Media and Program Development, sean@tempechamber.org Donna Dzatko, Operations Manager, donna@tempechamber.org

Vice-Chairs: Margaret Hunnicutt, Kristine Kassel, Tim Ronan Immediate Past Chair: Dave Long Directors: Steve Eberhart, Joe Hughes, Kelly Lorenzen, Mark Masten, Mary Palomino, Laura Robertson, Aqeel Shahid, Jackie Thompson, Brian Wood, Liz White

Allison Goodman, Membership Development, allison@tempechamber.org

Ex-Officios: Tanya Chavez, Charlie Meyer, Stephanie Nowack, Virgil Renzulli

Shari Hodziewich, Membership Retention, shari@tempechamber.org

Committee Chairs: Neil Chitel, Harvey Gibson, Jim Hall, Vicki Kringen, Dave Long, Kelly Lorenzen, Al Shipley, Jan Whalen

Renee Lopata, CAE, Senior Vice President, renee@tempechamber.org

Tempe Chamber of Commerce 909 E. Apache Blvd. Tempe, AZ 85281 (480) 967-7891

Sachiyo Ragsdale, Communications Director, sachiyo@tempechamber.org Heidi Santos, Bookkeeper, heidi@tempechamber.org

“Turning Obstacles Into Opportunities Together” Banking and Credit Relationships Establishing complete banking and loan relationships for small to mid-size business clients. Financial Statement Quality Review Assist businesses to properly produce accurate financial information for their company and to understand what the financials tell them.

Expense Reduction Review and recommendations to reduce operating expenses. Accounting/Bookkeeping Services Our accounting service provides businesses with accurate and timely financial accounting and bookkeeping services tailored to the individual client’s needs.

Stoney-Wilson Business Consulting, LLC www.stoneywilson.com Julie Stoney

6501 E. Greenway Pkwy #103-583 Scottsdale, AZ 85254

(602) 370-1776 juliestoney@stoneywilson.com

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Robert S. Wilson

(602) 696-1060 robertwilson@stoneywilson.com


Arizona Technology Report Arizona Technology Council: The Voice of the Technology Industry

In This Issue Governor’s Celebration…Page 2 Vote TechSmart…Page 4 Salary Survey…Page 7

Who We Are The Arizona Technology Council is Arizona’s premier trade association for science and technology companies.

Phoenix Office

One Renaissance Square 2 N. Central Ave., Suite 750 Phoenix, Arizona 85004 Phone: 602-343-8324 Fax: 602-343-8330 info@aztechcouncil.org

Tucson Office

The University of Arizona Science and Technology Park 9040 S. Rita Road, Suite 1150 (near I-10 and Rita Road) Tucson, Arizona 85747 Phone: 520-829-3440 Fax: 520-829-3441 tucson@aztechcouncil.org

President’s Message As head of an organization with nearly 650 member companies, I can tell you deciding what’s best for Arizona Technology Council members sometimes takes more than the input of our staff and me. That’s why I’m thankful to have a board of directors to be rivaled by any organization – for profit or not. With 40 board members, there is a cross section of strategic expertise from which to draw. A number of them come from companies that are or soon will be household names in technology. They represent a wide range of organizations – large and small – that include aerospace, aviation and defense; semiconductors and electronics; telecommunications; information technology; health and bioscience; optics; energy; education; financial services; and law firms. Steven G. Zylstra, Before I tell you more President and CEO, Arizona Technology Council about the board members, let me tell about their responsibilities. The board has three primary roles: • Oversight of the chief executive’s performance • Direction of the organization, which will be updated this month when the board embarks on a new strategic planning initiative • Oversight of the organization’s financial health

Management and Staff Steven G. Zylstra 

Leigh Goldstein

Don Ruedy

President and CEO

Managing Director, Programs and Events 

Executive Emeritus, Tucson Office 

Don Rodriguez 

Doug Reid

Editor

Director, Arizona Innovation Institute 

Deborah Zack  Director, Membership Services 

Merry Lake Merrell

Ron Schott 

Director, Marketing and Communication 

Executive Emeritus

Phillip Huebner 

Anne Rody

Alex Rodriguez

Director, Arizona Science and Engineering Fair

Director, Tucson Office 

Director, Finance and Administration 

Justin Williams Executive Emeritus, Tucson Office 

aztechcouncil.org

Sept. 2012 – Jan. 2O13 aztechcouncil.org

Jeremy Babendure, Ph.D. Director, Arizona SciTech Festival

That last point underscores that this is a fiduciary board, with the buck stopping with its members. I’m proud to report that with their assistance, the Council is in its best financial shape since it was launched 10 years ago. So who are they? All are in top leadership roles within their organizations. This is a volunteer board, which means they all serve because they are committed to enhancing the tech sector’s presence in Arizona. These are the people with the expertise to make the tough calls when asked. Consider these statistics: • Two carry the double title of president and chief executive officer. • Six are CEOs at their companies. • Three serve their firms as presidents. • Two are chief information officers. • Five are senior vice presidents while four are VPs. The rest are partners, directors and top managers. And it’s not just a good ol’ boys board, as 15 percent of the board members are women. By comparison, the boards of Fortune 500 companies were comprised of 16.1 percent women in 2011. As a reflection of the nature of technology, some of our leaders are serial entrepreneurs who launched a number of companies. This is a good fit since part of Council’s agenda is to support the efforts of entrepreneurs. As you can see, we try to have a balance in terms of economic sectors as well as the diversity that comes with it. Add to that a geographic factor. Many of these leaders carry a global intellect that stems from working for multinational companies. Just as important, we make sure the board represents Arizona interests beyond Phoenix, with five members from Tucson in addition to our office there. If you truly are only as good as your last success, our board guarantees the best is yet to come. To learn more about the board members, go to aztechcouncil.org/board.

Arizona Technology Report

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Jennifer Ayres, coordinator of business development of PADT, provides information at last year’s expo at the Governor’s Celebration of Innovation.

Governor’s Celebration of Innovation Annual awards ceremony marks Arizona’s centennial The founding fathers would be proud of how far Arizona has come. Nov. 8 is the date to celebrate when 100 Years of Innovation is the theme for the 2012 Governor’s Celebration of Innovation, an awards gala that showcases the top talent in the state’s science and technology community.

The celebration will be held at the Phoenix Convention Center, North Building, 100 Level, 100 N. Third St. The evening will be hosted by the Arizona Technology Council, Avnet and the Arizona Commerce Authority. The schedule is: Winners to be announced during a ceremony. The awards and their finalists are:

• Pioneering Award (outstanding company that has gone above and beyond the call of duty in contributing to Arizona’s technology industry through sustained business presence, corporate citizenship, community involvement and business success) Finalists: IO Data Centers, Northrop Grumman Technical Services:

Early Winners

Some award winners were revealed in advance of the Governor’s Celebration of Innovation. They will receive their awards during the same ceremonies where other winners will be announced. IT Services People’s Choice Lifetime Achievement Award Gary Tooker Former CEO of Motorola Tooker became an independent consultant after retiring from Motorola in 1999. He became Motorola’s president in 1990, vice chairman and chief executive officer in 1993 and chairman in 1997. He and his wife head the Gary and Diane Tooker Family Foundation.

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Ed Denison Business Leader of the Year Individual who contributes to Arizona’s technology industry through sustained growth of their business or company Bob La Loggia CEO of Appointment-Plus La Loggia is CEO of Appointment-Plus, the Scottsdale-based developer of the leading cloud-based scheduling software application used to book over 3.5 million appointments each month and over 85 million appointments since its inception.

William F. McWhortor Community Service Leader of the Year Individual or organization (including not-forprofit) that contributes to Arizona’s technology industry through relentless community involvement, leadership, visibility and excellence in economic development activity Northern Arizona Center for Entrepreneurship and Technology Flagstaff


Chuck Vermillion, the Council’s board chairman and CEO of OneNeck IT Services, speaks at last year’s awards ceremony.

Schedule 3:30 to 5:30 p.m. technology showcase/networking 5:30 to 7 p.m. award presentations 7:00 to 9 p.m. dinner/networking/technology showcase

STEM Innovation Campus Project and Signature Technology Group • Green Innovator of the Year (company or business unit in a technology industry that has demonstrated extraordinary performance related to sustainable environmental practices) Finalists: Electric Transportation Engineering Corp. dba ECOtality, Solar Zone at the UA Tech Park and Tucson Embedded Systems • Innovator of the Year - Start-Up Company (company or business unit in a technology industry that has achieved significant business success, and technical

innovation or scientific achievement) Finalists: Cold Plasma Medical Technologies dba Harmonic Cold Plasma, EquiSight and HealthTell • Innovator of the Year – Small Company (company or business unit in a technology industry that has achieved significant business success (including profitability), and technical innovation or scientific achievement) Finalists:: CellTrust Corp., Rim Tec Inc dba FiREapps and StormWind • Innovator of the Year – Large Company (company or business unit in a technology industry (no limit on the duration of the project) that has achieved

Also to be recognized at the Celebration will be the state’s Teacher of the Year along with Future Innovators of the Year who are students honored for their achievements in science and technology projects. The teacher plus her school and field is: Sandra Trevino Buena High School (Sierra Vista) Mathematics The students, their schools and winning projects are: Sirtaj Bir Singh and Sumedha Ravishankar Empire High School (Tucson) The effects of growing Chlamydomonas reinhardtii in municipal secondary effluent wastewater on biomass yield for biofuel production

aztechcouncil.org

significant business success (including profitability), and technical innovation or scientific achievement) Finalists: American Express, Enghouse Interactive and IBM (Tucson) • Innovator of the Year – Academia (department or office within an accredited higher education institution that has achieved success through innovation) Finalists: Department of Electrical and Computer Engineering, The University of Arizona; McGuire Center for Entrepreneurship, The University of Arizona; and the School of Life Sciences, Arizona State University For ticket details and other information about the Governor’s Celebration of Innovation, go to www.aztechcouncil.org.

Sarah Sakha — Xavier College Prep High School (Phoenix) A comparative study of the antimicrobial activity of different spices on the shelf life of an alternative emergency food product Ostin Zarse — Tucson High Magnet School Holographic light filtering with photovoltaic concentrator systems Kapil Kanagal Brophy College Prep High School (Phoenix) Synthesis of cross-linked PEI polymers in order to aid in the efficacy of gene transport to cancerous PC3 cells

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Vote TechSmart Guide offers Council’s endorsements for Arizona Legislature If you’re trying to decide which candidates to support in the Arizona Legislature elections on Nov. 6, the Arizona Technology Council offers its 2012 Vote TechSmart guide to help. The guide, which is prepared by the Council’s Public Policy Committee, includes the endorsements of state House and Senate candidates based on incumbents’ track records and/or responses in written surveys and candidate interviews. Support was based on candidates’ positions on and understanding of issues important to the technology industry, including how to expand access to investment capital, tax code support of research and development investments, technology-based economic development, support for technology infrastructure and a strong commitment to a technology-based education system. For the general election, the Council supports:

2012

GROW CT AND

NNE TO CO

Arizona State Senate District 1: Steve Pierce (R) District 2: Linda Lopez (D) District 4: Lynne Pancrazi (D) District 6: Chester Crandell (R) District 7: Jack Jackson Jr. (D) District 10: Frank Antenori (R) District 11: Al Melvin (R) District 13: Don Shooter (R) District 14: Gail Griffin (R) District 15: Nancy Barto (R) District 16: Rich Crandall (R) District 17: Steve Yarbrough (R) District 18: John McComish (R) District 20: Kimberley Yee (R) District 22: Judy Burges (R) District 23: Michele Reagan (R) District 24: Katie Hobbs (D) District 26: Jerry Lewis (R) District 28: Adam Driggs (R) District 30: Robert Meza (D)

E T O V CHSMART

E A PLAC

TE

Arizona House of Representatives: District 1: Karen Fann (R), Andy Tobin (R) District 3: Sally Ann Gonzales (D), Macario Saldate (D) District 5: Doris Goodale (R) District 6: Brenda Barton (R) District 8: Frank Pratt (R), TJ Shope (R) District 9: Ethan Orr (R), Victoria Steele (D) District 10: Ted Vogt (R), Bruce Wheeler (D) District 11: Steve Smith (R) District 13: Steve Montenegro (R) District 14: David Gowan (R), David Stevens (R) District 15: Heather Carter (R) District 17: Tom Forese (R), J.D. Mesnard (R) District 18: Jeff Dial (R), Bob Robson (R) District 20: Paul Boyer (R) District 21: Rick Gray (R), Debbie Lesko (R) District 22: Phil Lovas (R) District 23: John Kavanagh (R), Michele Ugenti (R) District 24: Lela Alston (D), Chad Campbell (D), Brian Kaufman (R) District 25: Justin Olson (R), Justin Pierce (R) District 27: Ruben Gallego (D), Catherine Miranda (D) District 28: Kate Brophy McGee (R), Eric Meyer (D), Amanda Reeve (R) District 30: Debbie McCune Davis (D) In addition to reasons for each candidate’s endorsement, the guide also includes a report card based on incumbents’ past support of and voting records on technology-industry issues. For details, download a copy of Vote TechSmart at www.aztechcouncil.org/advocacy/ votetechsmart.

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Arizona Technology Report


But, Wait … There’s More Feb. 9 set as start date for next Arizona SciTech Festival Arizona’s salute to science and technology returns Feb. 9 when the second annual Arizona SciTech Festival launches with a calendar of events designed to get the entire family involved. Over the course of five weeks, the principles of science, technology, education and math (STEM) will be taught in a less traditional but fun manner. That was the case at the first festival last year when 230,000 people attended activities around the state. By taking the lessons of STEM out of the classroom and to locations across Arizona, the festival helps cultivate the scientific talents of Arizona’s students and supports the efforts of educators and community leaders to prepare the next generation of

qualified innovators. Planning is already underway for the new round of events that end March 17. Sponsors are coming forward to plan community events. Organizers expect participation by companies that will present topics in discussion settings at festival hubs, schools and science cafes; offer tours or open houses, or host educational events at their facilities; or set up booths at the various events. The Arizona Technology Council will continue in its role as a founding partner. The track record for an exceptional festival already is established. According to a recently issued survey of last year, there were more than 350 collaborators supporting the outreach and activities.

Survey Says…

Other results from the festival survey revealed: • 40 percent of festival participants had follow-up calls or e-mails from attendees • 95 percent of attendees indicated the event they attended met their expectations • 38 percent of attendees attended multiple events • 32 percent of attendees used the information they learned in work or personal life • 50 percent of Arizonans in rural areas as well as Maricopa and Pima Counties were aware of the festival or a related signature event. There also was plenty of praise. “The Arizona SciTech Festival convenes diverse groups with a shared commitment to STEM educa-

aztechcouncil.org

There were hundreds of professionals and volunteers who came together to produce nearly 250 STEM-related events.

Learn More

To find out how you can get involved or immerse your company in this powerful economic development initiative, contact Jeremy Babendure, executive director of Arizona SciTech Festival, at jbabendure@aztechcouncil.org, or log onto azscitechfest.org and complete the participation form under the Get Involved tab.

tion and provides the public with a unique, month-long learning celebration of science, technology and innovation,” says Michael M. Crow, president of Arizona State University. “Its inaugural success is a testament to the importance of STEM education and the continued need for collective, statewide engagement in support of these vital knowledge areas.” Pearl Chang Esau, president and CEO of Expect More Arizona, adds, “The Arizona SciTech Festival has really elevated Arizona’s commitment to world-class education for all Arizona students as well as provided opportunities for families to explore how science, technology, engineering and math connect to the real world.” With the bar set high the first time, the 2013 festival promises to be worth the wait.

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Technology Tour Technology evangelist Ramon Ray brings his Small Business Technology Tour to the Valley when it stops at Arizona State University – Polytechnic’s College of Technology and Innovation on Oct. 12. Ray is editor of the New York-based Smallbiztechnology.com and New York regional development manager for Gilbert-based Infusionsoft. In its third year, the event will be produced with the help of the Arizona Technology Council and the Polytechnic college. The program will target small business owners; their employees in marketing, sales, finance, human resources and IT; and representatives of companies looking to sell to small businesses. The event will be held at the Cooley Ballrooms/Student Union of the campus, 7001 E. Williams Field Road, Mesa. The day starts registration and networking at 7:30 a.m. followed by a program of speakers and workshops until 3:30 p.m. when tours of the college’s facilities begin. Topics will include how small companies can do big things with technology, using technology to cut costs and boost profits, and

Ottosen Air Traffic Control Simulation Laboratory

being productive out of the office using mobile technology. Stops on the tour will include the Ottosen Air Traffic Control Simulation Laboratory, one of the most advanced air traffic simulation centers in a U.S. university, and the Laboratory for Algae Research and Biotechnology, a site of renewable energy research. Cost of the event is $55 for Arizona Technology Council members and $79 for non-members. The price includes light breakfast and lunch. To register, go to aztechcouncil.org.

Mobile Money Event to explore opportunities available through smartphones Going mobile. If this isn’t part of a company’s business plan, time is running out. As the world makes the smartphone a necessity, business strategies need to be dialed in. To help, the session “Be Mobile or Be Immobilized: Why the Mobile Web Matters” is being offered Oct. 17 from 11:30 to 1:30 p.m. The Council Connect event will be sponsored by I-ology, a Scottsdale-based firm that creates Web-based business tools to streamline operations for companies. The discussion will focus on mobile growth, mobile trends and opportunities to align the power of mobile to meet companies’ business objectives. The session will be held at the restaurant Seasons 52, 2502 E. Camelback Road, Phoenix. Emerging technologies and the expanding mobile adoption among consumers have pushed mobile marketing to the forefront of business strategy initiatives. Mobile optimization is quickly becoming a necessary strategic measure for any business, as these staggering mobile growth statistics indicate: • Half the U.S population owns a smartphone • Nearly 28 percent of Americans use their smartphones as the primary method to access the Web

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Arizona Technology Report

• A  bout 57 percent of consumers say they will not recommend a business with a poor mobile Website • Most mobile browsers spend 34 percent more time on a mobile optimized Website • Smartphone and tablet e-commerce spending tripled from the fourth quarter of 2010 to the same period 2011 Cost of the event, including lunch, will be $35 for Arizona Technology Council members and $55 for non-members. To register, go the aztechcouncil.org.

Photo: Thomas Story

A chance for small businesses to plug into the latest trends


Paying the Price Survey is first to gauge wages of Arizona tech community As more companies can finally see the recession in the rear view mirror, their workers may be wondering whether it’s time for a change. The first comprehensive wage and benefits survey of Arizona’s technology community can help firms determine whether they have the right level of wages and salaries to keep their institutional knowledge from heading for the exits. The survey conducted by Mountain States Employers Council (MSEC) was done in partnership with the Arizona Technology Council. The nonprofit MSEC is a membership organization that provides surveys, training and human resource management to firms in various industries. Key findings in the survey indicate: • Technology firms had substantially lower turnover rates in 2011: 14 percent for tech vs. 29 percent for all industries • Companies with more than 100 employees typically pay higher • Of all reported employees in the technology industry, 85 percent are eligible for bonuses • Manufacturers on average typically pay more than nonmanufacturing companies • Average projected pay hikes for 2012: 3.1 percent for tech vs. 2.1 percent for all industries “This survey was designed by the Council for technology companies and fills the need for collecting highly specific wage information needed by Arizona businesses to make good decisions,” said Steven Zylstra, president and CEO of the Arizona Technology Council. “Knowing where your wage and salary

practices stand is critical to attracting and retaining key talent.” The need for the study came from Council members through its annual listening survey. It follows the release of the Arizona’s Technology Workforce: Issues, Opportunities and Competitive Pressures study provided to Council members in December and available at www.aztechcouncil.org/CWT/External/WCPages/ WCWebContent/WebContentPage.aspx?ContentID=1132. “This (new) survey provides an opportunity for Arizona technology businesses to dig a bit deeper while reviewing their current pay and benefits practices and benchmark them with their industry in their local community,” said Karen Stafford, Arizona vice president of membership development in the Arizona regional office of Mountain States Employers Council. “Working together will help everyone create new solutions that produce a more sophisticated workforce and drive economic growth to ensure Arizona is recognized as a technology leader on a national stage.”

To Get A Copy of the Survey The survey can be purchased by sending your name, organization name, e-mail and physical address, preference of PDF or hard copy, and Arizona Technology Council member status via e-mail to surveys@msec.org. Surveys then will be sent with an invoice based on the following pricing structure: • Arizona Tech Council member and survey participant: $199 • Arizona Tech Council Member but not survey participant: $299 • Non-Member and not survey participant: $499

New director for Tucson office Alex Rodriguez has been appointed director of the Tucson regional office of the Arizona Technology Council. In his role, he will be responsible for member services and organizing events in southern Arizona. Rodriguez is founder and managing director of the consulting firm Client Attraction Strategy Group. He previously worked for W.W. Grainger and Raytheon. Earlier in his career he was an international policy advisor for the U.S. Department of Defense and special assistant at the Pentagon. The Arizona native is a past member of the Tucson Unified School District

aztechcouncil.org

board. In 2006 he ran for office to serve as representative of Arizona’s 8th Congressional District, a position won by former Rep. Gabrielle Giffords. Rodriguez was awarded a master’s degree in public policy from Harvard University’s John F. Kennedy School of Government with concentrations in international trade and finance, and international security. He also graduated from The University of Arizona with a bachelor’s degree in political science. He and his wife, Claudia, are parents of daughter Emi Sofia. Rodriguez can be reached at arodriguez@aztechcouncil.org.

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TICKETS NOW ON SALE AGENDA

Thursday, November 8th 3:30 - 5:30 PM Technology Showcase/Networking 5:30 - 7:00 PM Award Presentations 7:00 - 9:00 PM Dinner/ Networking/Technology Showcase

About GCOI The Governor’s Celebration of Innovation (GCOI) is the Arizona Technology Council’s annual awards gala, in partnership with the Arizona Commerce Authority, that honors technology leaders and innovators from across the state. The event attracts more than 1,000 attendees each year for a night of networking, food and entertainment. For 2012, the awards portion of the event will be a theater-style presentation, followed by a sit down and plated dinner. GCOI will take place at the Phoenix Convention Center’s North Building on Thursday, November 8th.

Tickets are on sale now!

Tickets for GCOI

To purchase tickets or learn about sponsorship packages, please visit

aztechcouncil.org/gcoi2012 (602) 343-8324

• • •

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Arizona Technology Report

AZTC Member: $150 Non-AZTC Member: $200 Table of Ten, AZTC Member: $1,250 Table of Ten, Non-AZTC Member: $1,750


Business

Lending Guide 2013

Major Banks Community Banks Credit Unions Alternative Lending & Lending Resources


535

375 4c

Grow your business with an SBA loan

Work with the #1 SBA lender in the nation* At Wells Fargo we’re committed to helping small businesses succeed. Our SBA loans can help you: • Acquire a new business • Expand your existing business • Finance the purchase of real estate and equipment • Meet capital needs Plus, customized terms and payment options provide flexible financing options.

Make the most out of your business — contact us today

• Stop by a Wells Fargo location to talk with a banker • Call 1-800-545-0670 (Monday through Friday, 7:00 a.m. to 7:00 p.m., Central Time) • Visit wellsfargo.com/biz

* Wells Fargo is the #1 SBA lender by dollars according to the U.S. Small Business Administration as of September 30, 2010. All loans are subject to credit approval. For discussion purposes only. © 2011 Wells Fargo Bank, N.A. All rights reserved. NMLSR ID 399801. (668702_03535) 668702_03535 7.875x10.375 4c.indd 1

10/25/11 3:29 PM


Business Lending Guide 2013

Banks Keep the Lifeblood Flowing Since 2010, Arizona businesses and communities have experienced an improving economy; maybe slower than desired, but definitely improving. Businesses are considering new and replacement equipment options as well as taking advantage of the current real estate market and exploring building options. Revenues are growing again and, with expense controls, companies are growing the bottom line. This success translates into increased economic activity for our communities and Arizona. Throughout these past two years, banks have been seeking opportunities for lending. After all, commercial lending is the lifeblood of the banking industry, for community, regional and national banks. With $84 billion in deposits, banks have capital to deploy and are looking for those companies that need working capital lines of credit, equipment loans and real estate loans. Banks want to partner with companies and assist them with growth and expansion needs. In 2010, Arizona banks made $5.9 billion in new and renewed loans to commercial borrowers, and 2011 was even stronger. As Phoenix city president for BBVA Compass since 2008, Lynne Herndon oversees the business development activities in Phoenix for commercial and commercial real estate lending. She manages a team of 20 relationship managers and support staff with a loan portfolio of $925 million in outstandings. She is also the chairman of the Arizona Bankers Association and serves as a board member for Greater Phoenix Leadership, Greater Phoenix Economic Council, Banner Foundation and the YMCA.

In addition to lending, banks provide critical deposit and treasury management services to businesses. Banks are able to provide ease of banking with online banking, fraud protection through services such as positive pay, and investment options for companies with excess cash balances. More importantly, though, banks are the conduit between depositors and borrowers. Thanks to In Business Magazine for its thoughtful, insightful and critical information found throughout this magazine. It is important for clients and potential clients of banks to understand what the financial industry can do for companies and where to go to find the desired services. This second edition of Business Lending Guide 2013 offered by In Business Magazine is truly a valuable resource for commercial businesses.

Lynne B. Herndon President • Arizona Bankers Association Phoenix City President • BBVA Compass Bank

About our Guide: Funding is consistently among the top concerns shared by our readers. As part of our “Banking” issue of In Business Magazine, our editorial staff has compiled this annual Business Lending Guide. This guide is a listing of local lenders, contacts and resources that will assist business owners in finding lending opportunities. We contacted federally and statechartered banks, credit unions and selected other lenders and resources to provide information about the variety of loans or assistance programs they offer locally. This guide will be available online and through our partner organizations through December 2013.

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Our list is compiled of institutions based here locally who responded to our questionnaire by press time. Please check the information, as contacts and phone numbers may change throughout the year. Many of the institutions have multiple locations throughout Arizona; this guide lists their main office in the Greater Phoenix area. To participate or advertise in our 2014 guide, please contact us at info@inbusinessmag.com or visit our website at www.inbusinessmag.com. © 2012 InMedia Company, LLC.

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Lendingss Guid e 2013

Major Banks Community Banks Credit Unions Alternative Lending & Lending Resources

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Business Lending Guide 2013

Banks Alerus Bank 17045 N. Scottsdale Rd., Scottsdale, AZ 85255 Contact: Rob Schwister Phone: (480) 905-2407 Website: www.alerusfinancial.com Types of Loans/Services: SBA loans, term loans, lines of credit

Alliance Bank of Arizona 1 East Washington St., Phoenix, AZ 85004 Contact: Dee Burton Phone: 602.386.5500 Website: www.alliancebankofarizona.com Types of Loans/Services: corporate banking, commercial real estate lending, public finance, business and professional banking, SBA lending, treasury management services.

Arizona Bank & Trust 2036 E. Camelback Rd., Phoenix, AZ 85016 Contact: Troy Norris Phone: (480) 844-4558 Website: www.arizbank.com Types of Loans/Services: commercial loans, including lines of credit, equipment, real estate, construction

Arizona Business Bank 2600 N. Central Ave., Ste. 2000, Phoenix, AZ 85004 Contact: Toby Day Phone: (602) 240-2700 Website: www.azbizbank.com Types of Loans/Services: revolving lines of credit, term loans, letters of credit, real estate, SBA loans

Bank 1440 7010 E. Chauncey Ln., Ste. 120, Phoenix, AZ 85054 Contact: Darcie Storms Phone: (623) 334-6200 Website: www.bank1440.com Types of Loans/Services: commercial term mortgages, business loans, SBA loans

Bank of America, NA

BNC National Bank

201 E. Washington St., Phoenix, AZ 85004 Contact: Small Business Banking Phone: (888) 287-4637 Website: www.bankofamerica.com Types of Loans/Services: lines of credit, term loans, SBA lending

20175 N 67 Ave.,Glendale, AZ 85308 Contact: Scott Spillman Phone: (602)508-3760 Website: www.bncbank.com Types of Loans/Services: revolving lines of credit for short-term operating needs, working capital loans, term loans for business equipment, commercial real estate loans, SBA loans, 504 commercial real-estate loans, business agricultural loans, letters of credit

Bank of Arizona, NA 16767 N. Perimeter Dr., Scottsdale, AZ 85260 Contact: Business Banking Department Phone: (602) 808-5331 Website: www.bankofarizona.com Types of Loans/Services: revolving lines of credit, real-estate lines of credit, equipment or vehicle term loans, real-estate term loans, construction financing, equipment leasing, SBA loans

Bank of the West 9502 W. Van Buren St., Tolleson, AZ 85353 Contact: SBA Lending Department Phone: (866) 306-7254 Website: www.bankofthewest.com Types of Loans/Services: commercial lending, equipment financing, SBA loans, commercial real estate, lines of credit, construction, agricultural

Bankers Trust Co. 4742 N. 24th St., Ste. 165, Phoenix, AZ 85016 Contact: Patrick M. Joyce Phone: (602) 224-2025 Website: phx.bankerstrust.com Types of Loans/Services: commercial lending, commercial real-estate financing

BBVA Compass Bank 4010 E. Thomas Rd., Phoenix, AZ 85018 Contact: Romeo Zavala Phone:  (602) 522-2580 Website: www.bbvacompass.com Types of Loans/Services: SBA loans, lines of credit, commercial real-estate lending, working capital financing, residential construction, energy lending, business leasing, business credit cards

Future plans are a plus for securing financing. Besides having financial information in good order, a borrower who has future plans is more likely to get financing. This means having projections or a budget for the next 12-24 months and support for where the revenue growth is coming from. Is growth expected in more business from the same customers? New customers? New products? Geographic expansion? —Dean Rennell, Business Banking Division Manager • Wells Fargo

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Central Arizona Bank 7001 N. Scottsdale Rd., Ste. 1000, Scottsdale, AZ 85258 Contact: Dan Klenske Phone: (480) 596-0883 Website: www.centralarizonabank.com Types of Loans/Services: commercial term loans, commercial lines of credit, construction lines of credit, lease financing, corporate credit cards, agricultural loans

Center for Entrepreneurial Innovation 275 N. GateWay Dr., Phoenix, AZ 85034 Phone: (602) 286-8950 Website: www.ceigateway.com Types of Services: incubator startup and early-stage companies; access to facilities space; mentorship opportunities; business development resources; weekly educational seminars open to the public; and more

Comerica Bank 425 S. Mill Ave., Tempe, AZ 85282 Contact: Bob Willcoxson Phone: (480) 966-0849 Website: www.comerica.com Types of Loans/Services: commercial property loans, business lines of credit, business loans, credit cards

Commerce Bank of Arizona 4110 N. Scottsdale Rd., Ste. 120, Scottsdale, AZ 85251 Contact: Larry O’Malley Phone: (480) 253-4504 Website: www.commercebankaz.com Types of Loans/Services: business-related loans of all types

Enterprise Bank 3900 E. Camelback Rd., Ste. 180, Phoenix, AZ 85018 Contact: Mike Theile Phone: (602) 824-5700 Website: www.enterprisebank.com Types of Loans/Services: commercial loans, equipment, real estate, construction, SBA loans, lines of credit

>>

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Where to go when the banks say ‘NO!’ 3 Angel/Venture Capital 3 Merchant Funding 3 Factoring

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Business Lending Guide 2013

Banks (con’t)

First Fidelity Bank

Gateway Bank

Heritage Bank, N.A.

6232 N. 32nd St., Phoenix, AZ 85018 Phone: (602) 912-5555 Website: www.ffb.com Types of Loans/Services: revolving lines of credit, commercial real estate, residential real estate, equipment, SBA, oil and gas production loans, commercial leasing

6860 E. Warner Rd., Mesa, AZ 85212 Contact: James L. Christensen Phone: (480) 358-1000 Website: www.gcbaz.com Types of Loans/Services: commercial lending

4222 E. Camelback Rd., Ste. J200, Phoenix, AZ 85018 Contact: Troy Hutton Phone: (602) 852-3475 Website: www.heritagebankaz.com Types of Loans/Services: SBA and conventional for commercial real estate, business acquisition, equipment and credit lines

First International Bank & Trust 6840 E. Indian School Rd., Scottsdale, AZ 85251 Contact: Craig Ealy Phone: (480) 946-2967 Website: www.firstintlbank.com Types of Loans/Services: agriculture, business, SBA

First Scottsdale Bank 15190 N. Hayden Rd., Scottsdale, AZ 85260 Contact: Ben Danner Phone: (480) 998-8408 Website: www.fnbscottsdale.com Types of Loans/Services: commercial lending, SBA

FirstBank 2525 E. Camelback Rd., Ste. 115, Phoenix, AZ 85016 Contact: Humphrey Shin Phone: (602) 667-6900 Website: www.efirstbank.com Types of Loans/Services: commercial real estate, construction, SBA loans, lines of credit, residential real estate

Gold Canyon Bank 6641 S. Kings Ranch Rd., Ste. 2, Gold Canyon, AZ 85118 Contact: Dan Govinsky Phone: (480) 474-2005 Website: www.goldcanyonbank.com Types of Loans/Services: business, personal, SBA

Goldwater Bank 7135 E. Camelback Rd., Ste. 201, Scottsdale, AZ 85251 Contact: Lori Abreu Phone: (480) 281-8190 Website: www.goldwaterbank.com Types of Loans/Services: business lending

Great Western Bank 1721 N Arizona Ave., Ste. 1, Chandler, AZ 85225 Contact: David Telya Phone: (480) 917-0139 Website: www.greatwesternbank.com Types of Loans/Services: commercial and consumer loans

Business customers can improve their chances of getting a loan by planning ahead. Don’t wait until you are in desperate need of financing to apply for a loan. Plan ahead. If there is a hiccup in the process, then you have time to correct it. Do your research. Find out what a bank is going to ask for and obtain that information prior to talking with a loan officer. Typical information that banks ask for on a commercial loan: Three years tax returns (business & personal), updated business financials, personal financial statement, business plan, etc. When a borrower is prepared, it gives the impression that the borrower has a grasp of the process. Understand and be prepared to discuss the weaknesses of the business. If the company had a down year, be prepared to explain why. Be thorough. Fill out all the documentation required. When forms are not filled out or inadvertently missing information, it tends to slow the process down significantly. I have closed loans in seven days and I have closed loans in three months. It all comes down to if the borrower provided the proper information and how detailed the information provided is. Be patient. Banks are under significant regulatory pressures to document and verify all the information provided. This tends to slow down the process, and oftentimes the borrower can get irritated. —Destin Simmons Chief Credit Officer • West Valley National Bank

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JPMorgan Chase 201 N. Central Ave., Phoenix, AZ 85004 Contact: SBA Lending Department Phone: (888) 536-3722 Website: www.chase.com Types of Loans/Services: commercial lending, SBA lending

Johnson Bank 3131 E. Camelback Rd., Ste. 100, Phoenix, AZ 85016 Phone: (602) 381-2100 Website: www.johnsonbank.com Types of Loans/Services: lines of credit, commercial mortgages, equipment leasing, SBA loans

M&I Bank 1 E. Camelback Rd., Phoenix, AZ 85012 Contact: Greg Recker Phone: (602) 241-6529 Website: www.mibank.com Types of Loans/Services: SBA loans, commercial loans, lines of credit

Meridian Bank, NA 3550 N. Central Ave., Ste. 110, Phoenix, AZ 85012 Contact: Erik Frandsen Phone: (602) 274-7500 Website: www.meridianbank.com Types of Loans/Services: term/installment loans, business line of credit, SBA loans, commercial loans

Metro Phoenix Bank 4686 E. Van Buren St., Ste. 150, Phoenix, AZ 85008 Contact: Kevin O’Regan Phone: (602) 346-1800 Website: www.metrophoenixbank.com Types of Loans/Services: commercial lending

MidFirst Bank 3030 E. Camelback Rd., Phoenix, AZ 85016 Contact: Barb Bandura Phone: (602) 801-5000 Website: www.midfirst.com Types of Loans/Services: SBA loans, business express loans, business lines of credit, business term loans, commercial real-estate lending, business equipment lease financing

>>

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We Have the Authority to Make Decisions Quickly for Local Businesses We are experts in SBA 504 loans and SBA 7A loans

Lee Stanford farr

Senior Lending officer West Valley national Bank 5635 n. Scottsdale rd., Suite 150 Scottsdale, aZ 85250 t 623-535-2463 f 480-429-6741

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Business Lending Guide 2013

Banks (con’t)

Mutual of Omaha Bank

Pinnacle Bank

Stearns Bank NA, Arizona

9200 E. Pima Center Pkwy., Scottsdale, AZ 85258 Contact: Kevin Halloran Phone: (480) 458-2249 Website: www.mutualofomahabank.com Types of Loans/Services: commercial & Industrial, Commercial Real Estate, SBA, Mortgage, Personal and Association Lending

14287 N. 87th St., Ste. 123, Scottsdale, AZ 85260 Contact: Greg Thorell Phone: (480) 609-0055 Website: www.pinnaclebankaz.com Types of Loans/Services: lines of credit, equipment loans, term loans, real-estate construction loans, standby letters of credit, SBA loans

9225 E. Shea Blvd., Scottsdale, AZ 85260 Contact: John Mistler Phone: (480) 314-4200 Website: www.stearnsbank.com Types of Loans/Services: SBA loans, commercial and construction lending, equipment finance and leasing, USDA rural development loans

National Bank of Arizona

RepublicBankAz

Sunrise Bank of Arizona

6001 N. 24th St., Phoenix, AZ 85016 Contact: Mike Casa Phone: (602) 235-6000 Website: www.nbarizona.com Types of Loans/Services: consumer, residential real estate , commercial, corporate, treasury management, commercial real estate, wealth management, nonprofit, energy lending

909 E. Missouri Ave., Phoenix, AZ 85014 Contact: Stuart Olson Phone: (602) 277-2500 Website: www.republicbankaz.com Types of Loans/Services: commercial loans and lines of credit, commercial real-estate loans, commercial construction loans, SBA loans

3033 N. Central Ave., Phoenix, AZ 85012 Contact: Katherine Brandon Phone: (602) 522-3756 Website: www.sunrisebankofarizona.com Types of Loans/Services: commercial real-estate loans, lines of credit, equipment and term loans, SBA loans

Sonoran Bank, N.A.

Parkway Bank 11011 N. Tatum Blvd., Phoenix, AZ 85028 Contact: Spencer Campbell Phone: (602) 765-8501 Website: www.parkwaybank.com Types of Loans/Services: an array of conventional business loans as well as SBA financing

3877 N. 7th St., Ste. 150, Phoenix, AZ 85014 Contact: Frank Coumides Phone: (602) 332-7828 Website: www.sonorabank.com Types of Loans/Services: commercial loans to small and mid-size businesses for equipment, real estate and expansion

There are several things business owners can do to improve their chances of obtaining a loan. First, develop a strong relationship with your commercial banker. When the bank officer knows you personally and understands your business, you have created a working partnership that is conducive to the bank extending business credit. If you are approaching a new bank for business credit, research potential lenders to determine which banks might be a good match for your company. Consider which attributes of different banks are most important to you, such as response time, flexibility, convenience or specialized services. Solicit referrals from other business owners, your accountant or your attorney. Prepare a complete and accurate financial package, including the last three years of tax returns and financial statements for the business, three years of personal tax returns and a recent personal financial statement. If you are starting a business or planning a significant expansion, prepare a thorough business plan with a market study and two to five years of financial projections. Include a description and valuation of the collateral you are offering. If your business or personal history contains any “bumps in the road,” disclose the facts and offer an explanation of what happened, why and what actions you took to address the issues. Be prepared to invest equity in the project alongside the bank debt and show proof of the source of that equity. Bankers will expect the owners to personally guarantee the bank loan. Don’t request a “non-recourse” loan structure. That creates doubt in the banker’s mind and bankers rarely provide non-recourse loans when lending to small and mid-sized businesses.

Sunwest Bank 60 E. Rio Salado Pkwy., Tempe, AZ 85281 Contact: David Matthews Phone: (480) 366-6021 Website: www.sunwestbank.com Types of Loans/Services: commercial real estate, commercial and industrial

TCF Bank 11 S. McClintock Dr., Tempe, AZ 85281 Contact: Consumer Loans Department Phone: (800) 823-5363 Website: www.tcfbank.com Types of Loans/Services: working capital lines of credit, term loans, commercial real-estate loans, leasing, business credit cards

UMB Bank, NA 8800 E. Raintree Dr., Ste. 100, Scottsdale, AZ 85260 Contact: Robert Faver Phone: (480) 459-2153 Website: www.umb.com Types of Loans/Services: business real-estate loans, term loans, lines of credit, letters of credit, SBA loans, agriculture loans, capital purchase loans, leasing

U.S. Bank SBA Division Regional Office 2222 E. Camelback Road Phoenix, AZ 85016 Contact: SBA Division Administrative Office Phone: (800) 431-7101 Website: www.usbank.com Types of Loans/Services: SBA loans, lines of credit, equipment leasing, term loans, agricultural loans, quick credit, commercial real estate

—Kevin Sellers Arizona Market President • First Fidelity Bank

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Wells Fargo Bank 100 W. Washington St., Phoenix, AZ 85003 Contact: Jennifer Anderson Phone: (480) 348-5030 Website: www.wellsfargo.com/biz Types of Loans/Services: business loans of all types, including real estate, lines of credit, equipment and SBA

RELATIONSHIP

BANKING IS OUR HERITAGE

Offering

West Valley National Bank 5635 N. Scottsdale Rd., Suite 150, Scottsdale, AZ 85250 Contact: Lee Farr Phone: (623) 536-9862 Website: www.wvnb.net Types of Loans/Services: SBA 7(A), SBA 504, working capital, owner-occupied real estate, A/R lines of credit

SBA & Conventional Loans at competitive rates. Contact us 602.840.3400

Western National Bank 2525 E. Camelback Rd., Ste. 100, Phoenix, AZ 85016 Contact: Scott Stemm Phone: (602) 553-7444 Website: www.wnbank.com Types of Loans/Services: commercial lending, commercial real-estate financing, lines of credit, term loans, business credit cards, SBA loans

The way relationship banking should be ™

www.HeritageBankAZ.com Phoenix • Tempe

Credit Unions Arizona Central Credit Union 2020 N. Central Ave., Ste. 800, Phoenix, AZ 85004 Contact: Jeffrey Frank Phone: (602) 523-8342 Website: www.azcentralcu.org Types of Loans/Services: SBA loans, commercial real estate loans, lines of credit, term loans

Arizona State Credit Union 2355 W. Pinnacle Peak Rd., Phoenix, AZ 85027 Contact: Laurie Quinsler Phone: (602) 467-4262 Website: www.azstcu.org Types of Loans/Services: term loans, unsecured lines of credit, commercial real-estate mortgages, business vehicle loans, business credit cards, business overdrafts

Credit Union West 2402 W. Grant St., Phoenix, AZ 85009 Contact: Business Service Center Phone: (602) 631-3200 Website: www.cuwest.org Types of Loans/Services: business loans

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Business Lending Guide 2013

Credit Unions (con’t)

Desert Schools Federal Credit Union 148 N. 48th St., Phoenix, AZ 85034 Contact: Herb Ramirez Phone: (602) 663-8674 Website: www.desertschools.org Types of Loans/Services: working capital financing, equipment loans, owner-occupied real estate, commercial real estate

TruWest Credit Union 1345 W. Warner Rd., Tempe, AZ 85284 Contact: Daniel Desmond Phone: (480) 441-5900 Website: www.truwest.org Types of Loans/Services: business loans, secured and unsecured lines of credit, business credit cards, commercial real-estate lending, equipment financing

Alternative Lending Altima Business Solutions 1820 E. Ray Rd., Chandler, AZ 85225 Contact: Andre Wilson Phone: 602-773-1488 520-762-7535 (Tucson) Website: www.altimabusinesssolutions.com

Types of Loans/Services: angel/venture capital, private equity. merchant funding, equipment leasing, factoring, contract financing

Business Development Finance Corporation 3300 N. Central Ave., Suite 600, Phoenix, AZ 85012 Contact: Gary Molenda Phone: 602-381-6292 x.210 Website: www.BDFC.com Types of Loans/Services: SBA 504 commercial loans

FSW Funding 4530 E. Shea Blvd., Ste. 142, Phoenix, AZ 85028 Contact: Robyn Barrett Phone: 602-535-5984, ext 1 Website: www.fswfunding.com Types of Loans/Services: (choose or add) lines of credit, letters of credit, factoring, asset based lending

Performance Funding Group, LLC 11022 N. 28Th Drive, Suite #160, Phoenix, AZ 85029 Contact: Lou Wallace Phone: (602)912-0200 Website: www.performancefunding.com Types of Loans/Services: asset based loans, inventory purchase order financing, term loans, lines of credit, DIP financing.

Financials, projections and repayment are the key considerations impacting a business customer’s likelihood of securing a loan. Financials Have up-to-date, timely financial statements. Your financials should include the last three years’ fiscal year-end and most recent interim period. It is imperative that the business owner and senior management have a thorough understanding of financial results, trends, significant events that have impacted performance and ratios such debt service coverage, leverage, working capital and receivable turndays, among others. The financial institution will expect management to be the expert and help them analyze the business from a financial perspective. If there is a loss, be prepared to explain why. Projections While financials tell the story of where a business has been and where it is now, a set of well-thought-out projections with assumptions will tell the story of where management believes the company will go in the future. The more detail the better. Stress-testing the projections is a plus.   Repayment When analyzing a loan, financial institutions are all about the repayment sources. Collateral alone will not earn approval for a business. Cash flow is king because most lenders are cash-flow driven in their repayment analysis. That is the typical primary repayment source, with collateral being the second. Generally with collateral, the more liquid and stable, the better. —Herb Ramirez Director of Business Relationships • Desert Schools Federal Credit Union

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Sir Mortgage & Finance 3333 E. Camelback Rd., Phoenix, AZ 85018 Contact: Greg Sir Phone: 602-954-6677 Website: www.sirmortgage.com Types of Loans/Services: residential, commercial and construction loans

Lending Resources ACCIÓN P.O. Box 41237, Tucson, AZ 85717 Phone: (520) 682-3648 Website: www.accionaz.org Types of Services: loans, lines of credit, management services, investment, governance

Arizona Commerce Authority 333 N. Central Ave., Ste. 1900, Phoenix, AZ 85004 Phone: (602) 845-1200 E-mail: smallbiz@azcommerce.com Website: www.azcommerce.com Types of Services: business-growing strategies, market research, licensing information, statewide resource information, workforce assistance

Arizona Loans for Assistive Technology  Institute for Human Development University Affiliated Program Northern Arizona University 2400 N. Central, Ste. 300, Phoenix, AZ 85004 Phone: (602) 776-4670 Website: www.azlat.net Types of Services: loans for persons with disabilities to purchase assistive technology, training and technical assistance; equipment reutilization; Self Employment for Entrepreneurs with Disabilities program

City of Phoenix Expand Program 200 W. Washington St., Phoenix, AZ  85003 Phone: (602) 262-6005 Website: phoenix.gov/econdev Types of Services: assistance in finding loans for businesses, collateral reserve deposits

Community Development Financial Institution (CDFI) Fund 601 13th St., N.W., Ste. 200, S., Washington, DC  20005 Phone: (202) 622-8662 Website: www.cdfifund.gov Types of Services: credit, capital and financial services to underserved populations and communities in the United States

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Business Lending Guide 2013

Stearns Bank NA, Arizona As a top-ranked bank with more than $1.5 billion in assets and a strong capital ratio, Stearns Bank stands ready to meet the full range of a business’s financial needs. We’ve established a reputation as a strong and stable business bank with a dedicated staff that gets the job done! Stearns Bank specializes in flexible and fast commercial and SBA financing. As a nationwide Preferred Small Business Lender, we are able to approve and process loans in-house, resulting in a quick and efficient loan closing. We know what it takes to grow a business through tough times and we’re committed to businesses and their banking needs. We’re serious about extending our reach across the Valley. Stearns Bank is an independent, employee-owned financial institution

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established in 1912. In 1964, Norm Skalicky purchased majority ownership and is the current owner and CEO. In 1997, Stearns Bank opened a bank in Scottsdale, Ariz., at its current location of 92nd Street and Shea Blvd. Besides Arizona,

Stearns Bank has branches in Minnesota, Florida and Georgia. We thank all of our past and present customers, whose dedication has been a primary factor in our continued growth and success over the past 100 years!

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Resources (con’t)

Industrial Development Authority (IDA) of Maricopa County

Looking for a way to fund business growth? Fortunately for you, not all lenders are the same.

“We consider FSW Funding a partner in our business.” —Cliff, founder of software development company, Arizona & Mexico

c/o Maricopa County Administration Office 301 W. Jefferson St., 10th Floor, Phoenix, AZ 85003 Phone: (602) 506-1888 Website: www.mcida.com Types of Services: conduit financing, project financing, manufacturing facility bonds

Neighborhood Economic Development Corporation (NEDCO) 635 E. Broadway Rd., Mesa, AZ  85204 Phone: (480) 833-9200 Ext. 117 Website: www.nedco-mesa.org Types of Services: alternative financing programs for new and start-up businesses, entrepreneur education, loan readiness assessment, business credit repair, loan application assistance

Service Corps of Retired Executives (SCORE)    2828 N. Central Ave., Ste. 800, Phoenix, AZ 85004-1093 Phone: (602) 745-7200 Website: www.score.org Types of Services: resources, templates and tools to assist entrepreneurs in developing tools and plans

SBA — Small Business Administration (SBA)   

FSW Funding promises: • Fast funding for working capital • Flexible and innovative lines of credit • NO termination fees, contracts, or minimum volume requirements

Contact us today to learn more about our factor financing services

602-535-5984 4530 E. Shea Blvd, Ste. 142, Phoenix, AZ 85028

www.fswfunding.com robyn@fswfunding.com

2828 N. Central Ave., Ste. 800, Phoenix, AZ  85004-1093 Phone: (602) 745-7200 Website: www.sba.gov Types of Services: loans, loan guarantees, contracts, counseling sessions and other forms of assistance to small businesses

Small Business Development Center (SBDC)    2411 W. 14th St., Tempe, AZ 85281 Phone: (480) 731-8720 Website: www.azsbdc.net Types of Services: assistance for small businesses in every stage of development, SBA loan assistance, free one-on-one business counseling, workshops and training programs

Let us know if we missed your lending institution this year. Contact us to be a part of our 2014 edition. info@inbusinessmag.com

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COMMERCIAL REAL ESTATE LOANS

Your passion is what builds communities. Now’s an excellent time to purchase or refinance commercial property. With a Commercial Real Estate Loan from BBVA Compass, you’ll enjoy: • Low fixed rates for the entire term • No balloon payments • 80% LTV for owner-occupied property; up to 95% LTV with SBA financing Act now and save with these limited-time offers: • Up to $5,000 off closing costs on loans $1 million and up • Up to $1,000 off closing costs on loans under $1 million Plus, you can trust the commercial lending experts at BBVA Compass to make your loan experience simple and easy. Offer expires December 31, 2012. For more information, or to apply, visit any of our 46 branches in Phoenix. 1-800-COMPASS • bbvacompass.com

Application must be received between 09/20/2012 and 12/31/2012 and loan must be booked by 03/31/2013 to be eligible for this special offer. All loans subject to eligibility, collateral and underwriting requirements, and approval, including credit approval. Special closing costs offer available for a limited time only on qualifying commercial real estate loan applications received and booked within the specified offer dates. Up to $5,000 off closing costs on loans $1 million to $5 million; up to $1,000 off closing costs on loans under $1 million. Your actual closing costs discount may vary based on several factors. Offer applies to qualified types of owner-occupied commercial real estate and qualified borrowers. Offer not valid in conjunction with any other discount or offer. Customer is responsible for any closing costs and fees outside of any special promotions and reimbursement of any third party costs if loan is paid off within 36 months of loan closing. All promotions and offers subject to change without notice. Please contact a BBVA Compass banker for details. BBVA Compass is a trade name of Compass Bank, a member of the BBVA Group. Compass Bank, Member FDIC. #1027


Index Index by Name

Eberenz, Jack, 12

McPhie, Michael, 16

Singh, Sirtaj Bir, 61

Albrecht, Rebecca A., 47

Esau, Pearl Chang, 63

McWhortor, William F., 60

Slick, Jo Ann, 48

Almanza, Benito, 22

Halter, Tom, 12

Miller, Mary Ann, 12

Smith, Don, 49

Blacker, Jane, 20

Herndon, Lynne B., 69

Mitchell, Mark, Mayor, 51, 55

Sneed, Gary, 24

Bollwitt, Rebecca, 31

Hicken, Chris, 16

Naumann, Gary, 35

Solheim, Karsten, 20

Brogan, Chris, 31

Hindery, Leo, 35

Ng, Deborah, 31

Stafford, Karen, 65

Browning, Brice, 20

Jarosh, Steve, 24

Ramirez, Herb, 76

Stoney, Julie, 24

Butow, Eric, 31

Johnson, Magdalena, 52

Ravishankar, Sumedha, 61

Tooker, Gary, 60

Callidora, Kerri, 20

Johnson, Melody, 52

Ray, Ramon, 64

Trenter, Brett, 20

Camacho, Robbie, 20

Jones, Rick, 43, 49

Rennell, Dean, 70

Trevino, Sandra, 61

Canaday, Sara, 35

Kanagal, Kapil, 61

Rhodes, Lee Rhodes, 35

Wiest, Candace, 24

Chamblee, Brandel, 20

Kringen, Vicki, 52

Rodriguez, Alex, 65

Williams, Mike, 14

Corro, Victor Miguel, 14

La Loggia, Bob, 60

Sakha, Sarah, 61

Wilson, Bob, 24

Crow, Michael M., 63

Lieb, Michael, 16

Sarver, Robert, 11

Zarse, Ostin, 61

Daly, Ann, Ph.D., 35

Lopata, Renee, 51

Scarafiotti, Vikki, 34

Zimmermann, Jan, 31

Davidson, Steve, 34

Mainwaring, Simon, 31

Sellers, Kevin, 24, 74

Zito, Ed, 24

Denison, Ed, 60

Mark, Jay, 55

Senseman, Phyllis, 49

Zylstra, Steven, 59, 65

Dutra, Ann, 18

Maruca, Jill, 48

Simmons, Destin, 72

Central Phoenix Women, 36

Invoxia, 39

Chandler Chamber of Commerce, 36

IO Data Centers, 60

Client Attraction Strategy Group, 65

iTwin, 39

Solar Zone, 61

Cold Plasma Medical Technologies, 61

Karsten Manufacturing, 20

Spirit of Enterprise Center, 35

Cox Business, 3

Korn/Ferry Institute, The, 18

SRP, 7

Curis Resources, 16

LawLogix Group, 35

Stearns Bank, 77

CyberMark International, 35

Lewis and Roca, L.L.P., 30

STEM Innovation Campus Project, 61

America’s Taco Shop, 41

Daphne’s Headcovers, 35

Lexus, 39

Stingray Sushi, 41

American Express, 61

Desert Schools Federal Credit Union,

Linda Land, 10

Stoney-Wilson Business

Index by Company 180 Degrees Automotive, 35 5 Arts Circle, 6 Alerus Bank & Trust, 15 Alliance Bank of Arizona, 24, 80 Alliance Residential Company, 16 Altima Business Solutions, 71

Arizona Bank & Trust, 71

24, 76

Maricopa County Attorney’s Office, 10

Sir Mortgage & Finance of Arizona, Inc., 73

Consulting, 24, 58

Arizona Bankers Association, 69

Driver Provider, The, 23

Maricopa Workforce Connections, 13

StormWind, 61

Arizona Biltmore Golf Club, 20

Double L Ranch, 17

MBA Women International, 35

Surprise Regional Chamber of Commerce, 36

Arizona Commerce Authority, 60

Economic Club of Phoenix, 36

Michael A. Lieb, Ltd., 16

Tempe Chamber of Commerce, 12, 37, 51

Arizona Department of Commerce, 20

ECOtality, 61

Milagro Grill, 41

Total Transit, 35

Electric Transportation Engineering

Moon Valley Country Club, 20

Tucson Embedded Systems, 61

Mountain States Employers Council, 65

Tucson High Magnet School, 61 University of Arizona Department of

Arizona Foundation for Medical Care, 19

Corp., 61

Arizona Golf Industry Association, 20

Empire High School, 61

Mountain West Credit Union Association, 14

Arizona Small Business Association, 36

Enghouse Interactive, 61

National Association of

Arizona State University

EquiSight,61

School of Life Sciences, 61

Women Business Owners, 36

Electrical and Computer Engineering, 61 University of Arizona McGuire Center for

EventComplete, 82

National Bank of Arizona, 84

Arizona Technology Council, 36, 59

Expect More Arizona, 40, 63

National Council on

ASU Alumni Association, 57

Federación de Cajas Populares Alianza, 14

AT&T, 4

FIREapps, 61

National Golf Foundation, 20

UserTesting, 16

Avnet, 60

First Fidelity Bank, 24, 74

NJOY Electronic Cigarettes, 35

Ventana Fine Properties, 20

AZ Golf Works, 20

Florence Copper, 16

Northrop Grumman Technical Services, 60

W. P. Carey School of Business, 35

Bank of America, 22

Franchise Integration, 12

Omni Hotels & Resorts, 83

Waste Management, 42

BBVA Compass Bank, 69, 79

FSW Funding, 78

Optimal Performance Training, 35

We-Ko-Pa Golf Club, 20

Big Brothers Big Sisters of

GlobalMed, 35

Organization for Economic Cooperation

Wellness Community, The, 34

Central Arizona, 48

GPE Companies, 33

Compensation Insurance, 43

and Development, 82

Entrepreneurship, 61 UP! Your Service, 33 US Airways Center, 9

Wells Fargo, 23, 68, 70

Bloomberg.com, 20

Grand Canyon University, 56

Peoria Chamber of Commerce, 36

West Valley National Bank, 24, 72, 73

Blue Cross Blue Shield of Arizona, 2

Greater Phoenix Black Chamber of

PGA Golf, 5

West Valley Women, 37

Double L Ranch, 17

Western Alliance Bancorporation, 11

Greater Phoenix Chamber of Commerce, 36

Phoenix Thunderbirds, 20

Wigwam Golf Club, 20

Gust Rosenfeld, 12

Real Property Management East Valley, 35

Women of Scottsdale, 37

Hard Dollar, 35

Rim Tec Inc., 61

Worldwide Foundation of Credit Unions, 14

Harmonic Cold Plasma, 61

Russ Lyon Sotheby’s International Realty, 20

Xavier College Prep High School, 61

Health Tell, 61

SCF Arizona, 43, 50

Blue Microphones, 39 BMO Harris Bank, 33 Boys & Girls Clubs of Greater Scottsdale, 34 Brophy College Prep High School, 61 Buena High School, 61 Business Development Finance Corporation, 75

Commerce, 36

Heritage Bank, 75

Scottsdale Area Chamber of Commerce, 36

Carolina’s Mexican Food, 41

Holmes Murphy, 6

Scottsdale Convention and

Catalyst, 82

IBM, 61

CellTrust Corp., 61

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Infusionsoft, 15

Visitors Bureau, 20

Bold listings are advertisers supporting this issue of In Business Magazine.

Signature Technology Group, 61

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Roundtable

A Candid Forum

Women Are Changing the Face of Business in the Private Sector by Michelle Patterson

Women are making a powerful difference in business, in today’s economy and in family life. The adage that there is power in numbers definitely applies. The United States Census Bureau states that women currently outnumber men in the U.S. by six million. Their impact in the marketplace, therefore, must not be underestimated, and, with that incredible power in their hands, women have a number of ways within their reach where they can help turn the economy around. Charles D. Vollmer, the founder of Jobenomics, a national grassroots movement dedicated to creating 20 million new U.S. private-sector jobs by year 2020, notes the potential women have as entrepreneurs to help the economy: “This is the decade of women-owned businesses. They have greater financial needs and incentives. There are more qualified women, with some even serving as heads of households. These women have more opportunities, are highly educated and have fewer cultural barriers.” From women creating businesses through crafts and their artistry, using sites like Etsy and Pinterest to generate interest and build a following, to women starting up all types of businesses, including high-tech companies, consumer goods and children’s wares, the female entrepreneur is generating innovative ideas and creating companies that are putting people to work and stimulating the economy through revenues. Statistics show nearly 8 million jobs have been lost by men and, for the first time in this nation’s history, women now hold a majority of the nation’s jobs. In 2006, the Organization for Economic Cooperation and Development devised the Gender, Institutions and Development Database, which measured the economic and political power of women in 162 countries. The conclusion was the greater the power of women, the greater the country’s economic success. Women’s talent in the workplace is beginning to be accepted by more companies that are looking for specific first-hand knowledge about today’s top consumer — women — and are recognizing the value of specific feminine traits that bode well in the corporate culture, including a nurturing attitude, open and ongoing communication, and a collaborative spirit, which are driving motivation and higher productivity. Women are also now being targeted by boards to join and offer their insights about how women think and make decisions about purchases. Those that have added women as board members are also realizing greater financial success. Catalyst’s 2010 statistics conclude that companies with a significant percentage of women on their boards performed better than those with no women on their boards — by 84 percent return on sales, 60 percent return on invested capital and 46 percent return on equity. As Monique Nadeau, president and CEO of the Hope Street Group, explains, “[B]ecause women overwhelmingly hold the consumer purchasing power in our country, whether we’re talking about individuals or households, their understanding of the market allows them to start businesses with a high degree of insight about both their potential customers and competitors.” Women are the most influential consumers. Contributing to the total $7 trillion in consumer and business spending in America, women

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influence 85 percent of all purchasing decisions, including half of products that would seem more oriented to men, such as automobiles, home improvement items and consumer electronics. The impact that women have on our nation’s market alone is substantial. For products related to home life, it’s been reported that moms represent a $2.4-trillion market. With so much buying power, it makes sense to target them and listen to what they want for themselves and their families. Serving as mentors to younger women and offering guidance to help them on the road to success at an early age is breeding new generations of women who will sustain the economy once it recovers. Whether it is offering internships at their companies, speaking to young people in school and university settings, establishing scholarships to help female students or encouraging female employees to bring their daughters to work for a day, women can mentor those women who will lead the economic success in future decades and encourage a powerful proactive mindset in generations to come. Catalyst catalyst.org Organization for Economic Cooperation and Development oecd.org

Michelle Patterson, CEO of EventComplete (www.eventcomplete.com) — a fullservice event management company — is regularly called upon by government agencies, corporations and nonprofits to help them create memorable and highimpact events. She has even hosted the President of the United States. Labeled an “acceleration executive,” Patterson also helps businesses grow faster, serving in a consultative role with Groupon and Living Social, among others.

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In Business Magazine - October 2012