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Contents August 2013 • Volume 1 • Issue 8

38 48

By Shelly Bradbury and Ellis Smith

Tullahoma, Tennessee and several North Georgia communities expand on Chattanooga’s “Gig City” with high-speed, fiber-optic telecom. Backers see the “Gig region” as key to future growth. By Ellis Smith and Tim Omarzu

Seeds of Change The farm-to-table movement tries to harvest more local grocery dollars by keeping food spending closer to home.

Above photograph by Dan Henry

4

Fast Track

EDG E • AUGUST 2013

56

By Mike Pare

Drive Time Workers in rural communities make longer commutes, but one regional group is pushing for new roads and jobs to shorten commute times.

This magazine and the plastic bag it is mailed in are recyclable.


Contents August 2013 • Volume 1 • Issue 8

Start Up

Skill Sets

10 At the Office

28 Profile

The “great sales disconnect.” We love sales but not the salesperson.

Nick Decosimo leads the region’s biggest CPA firm following his father’s footsteps.

12 Sales Pitch

34 Management Tips

Air conditioning salesman Randy Hixon tells how to stay cool and make the sale.

New consulting firm aQQolade offers help in cultivating leaders and thinking in strategic ways.

14 Hospitality

35 Management Team

Jernard Wells uses culinary and entrepreneurial skills to open Haute Cuisine.

Meet the managers who run four area Abra Auto Body & Glass shops.

16 Tourism

Georgia Winery grows in North Georgia under three generations of managers.

36 Business Acumen

Merri Mai Williamson warns about the dangers of using social media to screen job applicants.

18 On the Block

Riverside Drive building near downtown Chattanooga offers 86,038 square feet for $3.5 million.

20 Finance

Shared Resources

Patrick Seitz outlines the factors that determine the fair market value of your company.

22 Workplace

62 Quotables

Safe and secure: How to keep your work site free of violence with training, policies and proper staffing.

Area businesses tell where and how they get customer feedback.

25 Industry & Manufacturing

63 Briefcase

27 Leaderboard

64 Power Tools

Who is on the move and where are they going?

T.J. Snow and Co., celebrates 50th anniversary this year, bounces back from the Great Recession.

Apartments bolstering the area housing market. What are the biggest new apartment projects?

33 Young Guns Varnell, Georgia Mayor Dan Peeples brings youthful enthusiasm to City Hall.

Protecting and enhancing your brand and reputation on the Internet requires a plan.

66 Closer

Ben Ubamadu brings engineering drive to his job at Chattanooga State.

AUGUST 2013 • EDGE

5


Editor’s Note EDGE MAGAZINE Jason Taylor

President & Publisher

Reshaping geography

Mark Jones

Target Publishing Director

Dave Flessner Editor

Chris Zelk

Design & Production WRITERS

L

ocated within a day’s drive of more than half of the U.S. population, the Chattanooga-Atlanta region has long been a hub for rail, truck and air travel. Railroad lines, interstate highways and the world’s busiest airport in Atlanta helped grow some of America’s biggest trucking, warehouse and distribution companies in Chattanooga and the biggest airline, Delta Air Lines, in Atlanta. But while location is key for travel, shipping and distribution, the Internet is quickly changing the role of geography in exchanging ideas and moving intellectual property and services. The delivery of information is determined largely by the speed of the Internet link, rather than the distance between people. No place in America offers faster speed for web connections than Chattanooga, which in 2010 became the first American city offering gigabit-persecond Internet links. As Ellis Smith and Tim Omarzu report in this month’s Edge, the “gig city” is growing into a “gig region” with the aid of local cities and Uncle Sam. New high-speed links are being built in Tullahoma, Tennessee, and in 11 counties in Northwest Georgia and Northeast Alabama. With such service, digital transmissions move 200 times faster than basic broadband service and workers and consumers can transact business from nearly anywhere.

6

EDGE • AUGUST 2013

But as Shelly Bradbury tells us, location still matters in what we eat. Gaining Ground, a 3-year-old grow-local food movement in Chattanooga, claims consumers gain both a healthier diet and healthier economy when they buy food grown in local farms and gardens. Food can be fresher when it is grown closer to home. Geography and living patterns also still determine how much time we spend in our cars. Mike Pare reports on how roads across our region carry local workers across many city, county and state lines. Most of that travel is alone in a car with the typical worker spending between three to six hours every week driving back and forth to work. The mountains and rivers that create the beauty of our region also have limited the path and speed of many highways. But the new information highway is not so constrained and the Chattanooga region appears to be setting the pace.

Dave Flessner Editor

Ellis Smith Shelly Bradbury Mike Pare Tim Omarzu PHOTOGRAPHERS

Dan Henry Doug Strickland Shawn Paik Angela Lewis John Rawlston C.B. Schmelter Connor Choate Jay Bailey GRAPHICS

Laura W. McNutt CIRCULATION

Casandra Crosby 423-757-6709

SALES EXECUTIVE

Julie Harris

423-757-6615 jharris@targetpubgroup.com

EDGE magazine is published on the first day of each month by the Target Publishing Group, a division of the Chattanooga Publishing Company. Opinions expressed by contributing writers and editors are not necessarily those of the publisher, editor or EDGE magazine. Reproduction of the whole or any part of content herein is prohibited without prior written consent from the publisher. The publisher will not accept responsibility for submitted materials that are lost or stolen. Copyright 2013 by: EDGE Magazine 400 East 11th Street Chattanooga, TN 37403 Phone (423) 757.6505 editor@meetsforbusiness.com


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AT THE OFFICE • SALES PITCH • HOSPITALITY • TOURISM • ON THE BLOCK • FINANCE WORKPLACE • INDUSTRY & MANUFACTURING • LEADERBOARD

Start-Up

“This can be bigger than practically any other economic development opportunity in almost any other industry in this region.” Jeff Pfitzer

“My mom’s recipes are where it’s at.” Tara Taymore

“All communities, if they’re smart at all, are trying to differentiate themselves from other communities.” Lane Curlee

“What sexual harassment was in the 80s and 90s, workplace violence is in this decade.” Randy Spivey

Good Taste

Celebrity chef Jernard Wells opens Haute Cuisine in East Brainerd. ON PAGE 14

Safe and Secure Georgia Winery draws tourist traffic off I-75. ON PAGE 16

8

EDG E • AUGUST 2013

Area companies are developing ever more sophisticated measures to avoid workplace violence. ON PAGE 22


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Start-Up

AT THE OFFICE Lisa Earle McLeod

The Great Sales Disconnect: Why we’re weird about salespeople Houston, we have a problem.

It’s not as dramatic as an out of control space capsule hurtling toward death. But it does cause many people to abort what could have been a successful mission. It’s a business problem. It’s the disconnect between the word sales and the word salesperson.

People love an organization with strong sales. Apple sold millions of iPhones; Build a Bear sells store loads of stuffed toys. Their customers and investors are on fire. When a company is doing well, people say, “Yay, sales are up!” Yet when you add the word person to the word sales, it takes on a completely different connotation. Sales are positive, but a salesperson is often viewed negatively. The sales profession is consistently ranked as one of the least trusted professions. The word salesperson evokes images of a smarmy dishonest huckster, like the Music Man who sold a town non-existent instruments. This perception begs the question: Why is increasing sales in the collective a positive thing, yet salespeople as individuals are often perceived negatively? This disconnect causes big problems for individuals and organizations. Here are two examples:

Philanthropic Failure

I work with several nonprofits to help them increase donor revenue and volunteer engagement. I frequently encounter people who are passionate about their cause, yet they’re uncomfortable “selling” it. It’s as if selling it somehow cheapens their message. They’re emotion-

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EDGE • AUGUST 2013

ally invested and they often believe that the cause should sell itself. Sadly, this perception ignores reality. Potential donors and volunteers are busy people with crowded lives; they have lots of causes competing for their time and money. Failure to put forth an excellent “sales” effort results in worthy causes going unnoticed and underfunded.

Entrepreneur Exhaustion

One of my clients, Cali, articulated the issue many entrepreneurs have with sales, saying, “If I’m honest, I’ll admit that I’ve always believed, as long as people know what I offer, the right people will come to me.” It sounds good in theory, but again, it ignores reality. Cali’s firm provides training and consulting to improve workplace efficiency and personal happiness. Yet no matter how good her programs are, people aren’t going to get interested unless she reaches out to them personally to help them understand how they might benefit. In other words she has to sell it. People devote their time, money, and sometimes their entire lives, to creating a product or service, yet when it comes time to demonstrate the value to others, they hold back. After coaching entrepreneurs, philanthropists


Somewhere along the way people bought into the false belief that being intentionally persuasive cheapens your cause. and business leaders I’ve identified three reasons people are weird about stepping into the role of salesperson: › People are afraid to put themselves out there. › They’ve been turned off by bad salespeople. › People perceive that it’s somehow cheating if you take the time to fine tune your approach. Somewhere along the way people bought into the false belief that being intentionally persuasive

cheapens your cause. But in the word of my colleague Keith Ferrazzi, “just because it’s intentional doesn’t mean it’s insincere.” The act of selling is neither good nor bad. It’s like cooking; it’s something we do to make life work. You can do it poorly, riddled with anxiety, fear and a self-serving spirit. Or you can do it skillfully with grace, finesse and a generous heart. At the most basic level a salesperson is someone who is so passionate about their offering that they do everything they can to skillfully share the good news. And there’s nothing weird about that. Lisa Earle McLeod is a sales leadership consultant who has worked companies such as Apple, Kimberly-Clark and Pfizer. She is the author of several books including Selling with Noble Purpose: How to Drive Revenue and Do Work That Makes You Proud.

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AUGUST 2013 • EDGE

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Start-Up

BY SHELLY BRADBURY

SALES PITCH

Play It Cool When the mercury starts to climb, so does the bustle at Trane’s Chattanooga location. From parts to repairs to new sales, industrial air-conditioning systems are big business and service account manager Randy Hixon has been in the middle of it for 24 years. He’s spent the last 11 years at Trane and now works with customers across East Tennessee. Here’s what he focuses on when pitching to large-scale industrial customers like UTC, the Tennessee Aquarium and Harrah’s Cherokee Casino in North Carolina.

1. Thou Shall Not Sell on Price Alone

A Trane system usually isn’t the cheapest option on the market, so there’s no point in peddling on price alone. Trane uses state-of-the-art equipment and high-quality technicians, which tips prices higher than some competitors. So Hixon takes price out of the picture when he sells and focuses instead on the value and the unique solutions that Trane can provide.

2. Be Like Starsky and Hutch

The key selling point for a Trane system is service. When a customer buys a Trane, they’re entering a long-term partnership with the company, Hixon says. Since Trane’s initial prices are higher, service is where the company shines. Trane account managers will walk a customer through contingency planning, energy reduction and five-year asset planning to help each customer maximize profits and minimize costs. Photography by Doug Strickland

12

EDGE • AUGUST 2013


TRANE AT A GLANCE

› 100 Years: Trane was founded by Norwegian immigrant James A. Trane in 1913

› Employees: 29,000 › Locations: 400 in 100 countries › Parent company: Ingersoll Rand acquired Trane in 2008

› Famous Tranes: Trane systems are installed in the Statue of Liberty, the Washington Monument, The Kremlin in Moscow and The Skydome in Toronto

SOURCE: Trane

3. Don’t Waste Time Appealing to the Masses

Not everyone is a Trane customer. And not everyone should be, Hixon says. He works with a very small slice of all companies and keeps his sales pitches targeted on the type of customer who values service, partnerships and high-quality equipment. He figures out what is most important to his customer, and if it’s price, he doesn’t try to fit a square peg in a round hole.

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AUGUST 2013 • EDGE

13


Start-Up

BY SHELLY BRADBURY

HOSPITALITY

Passion for Food Celebrity chef Jernard Wells launches new retail shop Haute Cuisine in East Brainerd

W

HEN TYLER PERRY took Madea’s Big Happy Family on a 120-city tour in 2010, Chef Jernard Wells went too. He and his team cooked breakfast, lunch, dinner and midnight snacks for the crew, driving separately in a Ford Excursion so they could beat the bus to each city. Once after driving all night while his team slept, Wells finally pulled into one city and told his team he needed to take a quick power nap. He found a flat surface in a dark room and collapsed while the team prepped for the morning meal. His team discovered him when they were ready to serve up breakfast. “They bring in the food and they turn the light on and there is the chef on top of the bar, sleeping like a baby,” he says, laughing. “I was asleep on top of the bar. I didn’t realize — I just thought it was a nice level surface.” How Mississippi-born Wells ended up asleep on a bar in the middle of one of Tyler Perry’s national tours is a twisting tale that travels from Memphis to Paris to Bermuda to Chattanooga. And almost every chapter starts with a phone call. Nationally-recognized celebrity chef Wells took every phone call — whether from a representative of the Premier of Bermuda or the role manager for Tyler Perry — and turned it into an opportunity. He created a personal brand, “The Love Chef,” built and sold several restaurants, wrote three books, was featured on the Food Network and this year launched a retail shop called Haute Cuisine in East Brainerd that he hopes to turn into a worldwide franchise. And it all started with $50 and a teenage boy’s dream of owning a car.

14

Home Cooking

Wells started his first restaurant when he was 16 years old, not because he wanted to be a chef — he would be an attorney when he grew up, he knew — but because he wanted to buy a car before his senior year of high school. “I had $50,” Wells remembers, sitting by a window in his East Brainerd shop. “My mom said, ‘Where are you going to start a restaurant with $50?’ And I said, ‘Well out of your kitchen, of course.’” She agreed only after taking him to the courthouse to get a business license, then Sam’s Club to get ingredients (that was when she snatched $10 for shipping and receiving). Wells whipped up a menu and passed out flyers. People in his small town would call the house, place an order for breakfast or lunch, and come pick it up. At the end of the first week, Wells had earned $150. “I was like ‘Man, I’m really on to something,’” he says. “I kept doing it and by the end of the summer I was making thousands of dollars just selling food.” Three years later, at 19, he bought his first brick-and-mortar restaurant. He signed up at the college across the street as a political science major and business minor, still on track to be an attorney. Then a man walked into his restaurant and called him a cook. A cook. “It just burned me up to be called a cook,” he says. “I was like, ‘I ain’t no cook, I’m a chef. I have to do something about this cook thing.’” So he left college and attended the Memphis Culinary Academy. At the end of the program, at the urging of an instructor, he left the restaurant in his mom’s care and spent a year traveling the world, from the Caribbean Islands to Paris. Photography by Connor Choate

EDGE • AUGUST 2013


The brightly painted shop is filled with specialty ingredi“I WOULD FIND whoever was the best known chef in ents, sauces, spices and tools. The goal, he said, is to find a those areas and I’d ask them to teach me their style of cookwider audience for his creations. ing,” he says. “I’d work for them for free. I created my own “In a restaurant, the only people who experience your form of internship.” food are the people who come to the restaurant,” he says. “I When he finally made it back to the States, he’d discovered wanted to create something that people could taste all over a passion. the world. I took all the ingredients and recipes that were “I learned about the art of love cooking,” he says. “Food bottled up in me and I started turning them into sauces and and love go hand-in-hand. That’s one of my biggest mottos. seasonings.” And food is first base. When you meet that special someone, A manufacturer in Ooltewah pumps out 2,200 bottles what is one of the first things you ask? Can I take you out to of his sauces every three days. Between Haute Cuisine and dinner. If food doesn’t take place, nothing else takes place.” his sister business, Heritage Health Food, he’s in 220 stores So he wrote a cookbook: “88 Ways to Her Heart: Cooknationwide. Sometimes he even gets his face on the label. ing for Lovers with Chef Jernard Wells.” It was picked up by “My ultimate goal is to see my face and my name all over Barnes and Noble and was an Amazon bestseller. the world,” he says. “That’s what motivates me to do the stuff Before long, the phone calls started coming in. that I do.” From the Premier of Bermuda: Would he want to come With around 10 employees and sous chefs, about 80 percent cater for the Bermuda International Love Festival during the of Haute Cuisine’s revenue comes from retail sales and the rest Valentines week? is brought in by cooking classes. Products range between $6 Sure. (His team was escorted by secret service agents and and $100 and he hosts cooking classes several nights a week. treated like royalty while they catered to 150 diplomats.) In the few weeks the shop has been open, the most popular From a distributor of gourmet products: Would he like to item has been the Personality Sauce — bottle his own sauces? an $18 bottle of sauce created from an Sure. (The distributor took Wells uneight-question survey that judges each der his wing and taught him to bottle his HAUTE CUISINE individual’s personality. ‘Love in a Jar’ sauce.) INGREDIENTS Are you a homebody? A hot head? From the Patrick Clark Honors/ACE › Owner: Jernard Wells A bore? A winter person or a summer Awards: He was nominated for Chef of › Founded: Spring 2013 person? Each customer answers the the Year. Would he fly out to Sacramento? › Startup cost: $25,000 question on a scale of 1 to 5 and each Sure. (He was surprised to win this › Location: 8006 East number equals a half-teaspoon of one one. And he still wears the medal around Brainerd Road, Chattanooga ingredient. Each customer turns their his neck on occasion.) › Hours: 10 a.m. to 7 p.m. survey in and the sauce is created right From Tyler Perry: Would he cater for Monday-Friday, 10 a.m. to 6 in front of them. the Madea tour? p.m. Saturday, closed Sunday So far Wells estimates he’s sold about Sure. (The pictures of him asleep on › Contact: hautecuisine 200 Personality Sauces. Only one guy the bar are still out there somewhere.) chatt.com, 1-888-566-2781 didn’t like his — and, Wells maintains, From Glory Foods: Would he endorse that’s because the customer asked to add and promote their products? extra spices after the sauce was done. Sure. (“I use Glory Food products “When it’s uniquely designed, it really hits on your perwhen I’m shortcutting at home,” he says in a TV spot, “Besonality,” he says. “It hones in on you. You’re not supposed to cause I’ve got nine kids! I don’t have time to spend hours...” go back and add something.” He moved to Chattanooga six years ago just to be in a cenHe invested about $25,000 into the first Haute Cuisine tralized location — close to Savannah, close to Atlanta, close location and hopes to turn the shop into a worldwide franto New York. chise. The goal is to open a second location somewhere in the “I was a traveling chef,” he said. “A lot of rich people or region in the next 18 months. entertainers would call me and say, ‘Hey I have this lady I’m “I saw years ago that there was a niche,” he says. “I saw trying to impress,’ and they’d hire me to fly into wherever they how food and love went hand-in-hand. The quickest way to were, come into their house, create this magnificent meal and the heart is the stomach.” ease out the door. And then they’d take all the credit for it. And He recently filmed the pilot for a possible new reality TV I’m like, ‘This person is going to be expecting it again!’” show centered on his life and is always looking for the next Cooking Up Deals opportunity, the next phone call. But through every iteration, Now 34 years old, Wells is turning his culinary creativity through every restaurant and TV show and character, he’s into retail sales and cooking classes. He’s raising his nine maintained his passion for cooking. kids in a Ringgold subdivision, has sold all his restaurants “With our sauces, I’m still there doing everything hands and this spring opened a small shop in East Brainerd called on,” he says. “I do believe you connect to your food emotionHaute Cuisine. ally. Like I tell people, you have to sing to your food.”

AUGUST 2013 • EDGE

15


Start-Up

BY SHELLY BRADBURY

TOURISM Tara Taymore talks about grape vines at the Georgia Winery in Ringgold, Georgia.

Tourist Attraction Georgia Winery capitalizes on location near Interstate 75

T

ARA TAYMORE grew up on a vineyard. “The winery and I are the same age,” she says, walking through the Ringgold, Georgia, winery, “It’s definitely a passion. I want to bring it to new

heights.” Founded by her grandfather in 1983, Georgia Winery produces more than 30 different varieties of wine and grows its own Muscadine grapes on 50 acres in North Georgia. Tucked just off the interstate in a 16,000-square foot facility, the winery’s customers are split about 50-50 tourists to locals. Some customers wander into the winery on a whim for a free tasting, others are on a mission from a far-away state, searching for that one bottle of wine

16

EDGE • AUGUST 2013

they had years ago. Around 350 people stop by on a typical Saturday. “It’s a perfect location for tourism,” says Jesse Taymore, Tara’s husband. “And the billboards have been great at getting people off the interstate.” The winery includes a retail shop, event room (they also host weddings), and all the company’s production systems — tanks, bottles, labels, inventory. The winery focuses on sweet wines and imports all but Muscadine grapes from other parts of the country. “Our product is a niche in the market,” says Tara, a thirdgeneration manager. “My mom’s recipes are where it’s at.”


GEORGIA WINERY OFF THE VINE

› Founded: 1983 › Employees: 25 › Products: 30 varieties of wine,

Monica Kafka pours a glass of wine for a customer to sample at the Georgia Winery.

Bottles of wine available to sample sit in front of a wall of awards.

THE WINERY’S MUSCADINE GRAPES grow in the vineyard, a 50-acre plot that sits about 25 miles away from the Ringgold location. Originally, the winery was out there too. But Tara’s mom, Patty Prouty, moved the business away from the vineyard and closer to the interstate after she took it over from her father, founder Maurice Rawlings. The move was as much about stopping the flow of customers by her house in the vineyard as it was about exposure and growth. She built a tiny shop in 1986 and expanded into the current location in 2004. “I knew from the amount of wine that was going out of that tiny shop that if I moved back here it would make good business sense,” Prouty says. Now, the company sells about 12,000 cases retail and 4,000 cases wholesale every year. Besides the Ringgold location, Georgia Winery’s products can be tasted and purchased in six tasting centers throughout the region.

mostly sweet wine › Sales: About 12,000 cases retail, 4,000 wholesale per year › Hours: 10 a.m. to 6 p.m. Monday through Saturday › Location: 6469 Battlefield Parkway, Ringgold, Georgia. › Website: Georgiawines.com

The winery has focused almost exclusively on retail sales during its 30-year history, but the next step for the business might be a major push into wholesale distribution. Tara wants to see their wines in stores throughout Georgia, Tennessee, Florida and North Carolina. Currently, they do all the bottling and labeling by hand, but they may invest in a large-scale bottling system in order to capitalize on the 66,000 gallon production capability they now have. “We’re really branching out into distribution,” Prouty says. “For such a long time we were producing everything we could make and not needing to find other areas to sell in. But now, we have a 66,000-gallon capacity. That’s a lot of wine. So we’re just now at the point where we can look into other markets.” In the back of the winery are dozens of tall, white plastic tanks full of wine. Some are half-full, some are threefourths full. Winemaker Glynn Estes is constantly trying out new blends or testing already-full tanks to see if they’re ready to bottle. He keeps the wines between 50 and 55 degrees Fahrenheit while they ferment — which takes between six and nine months — then moves them to another freezer that drops down to 20 degrees for an additional two or three weeks. That cold stabilization process gets rid of the tartaric acid and ensures the wines don’t end up with a cloudy look. Most of Georgia Winery’s products end up between 12 and 13 percent alcohol. The wine-making process has always been at the center of Georgia Winery, Tara says. “We make money because people buy our wine,” she says. “Our wines are so different from other wines, and we have 30 years behind our products.”

Photography by Doug Strickland AUGUST 2013 • EDGE

17


Start-Up

BY MIKE PARE

ON THE BLOCK

By the River

E

asy access to Chattanooga’s downtown, its waterfront and busy Amnicola Highway are among the features of an 86,000-square-foot building up for sale. “One of its real selling points is that it has got traffic light access on Riverside Drive,” says Mike McGauley of Fidelity Trust Co., which is offering the structure located at 1530 Riverside Drive. The building has a tenant, Rock/ Creek, which is leasing about 35,000 square feet for retail, office and warehouse space. The original part of the fully airconditioned, multi-purpose structure was built in 1960 as a regional distribution center for McKesson & Robbins. Later it was leased to the Tennessee Valley Authority. It was expanded to its current size for BlueCross BlueShield of Tennessee, which leased the entire building until February 2011. The site additionally has 72 parking spaces, and is pad-ready for a 10,000-square-foot expansion. ABOUT THE SITE

› Location: 1530 Riverside Drive › Price: $3.5 million › Size: 86,038 square feet › Built: Original portion was raised in 1960

› Tract: Six acres › Broker: Fidelity Trust Co.

18

Photography by John Rawlston EDGE • AUGUST 2013


AUGUST 2013 • EDGE

19


Start-Up

AS TOLD TO SHELLY BRADBURY

FINANCE

The Biggest Sale Patrick Seitz sells businesses. The owner and broker of Sunbelt Business Advisors of Chattanooga has closed dozens of deals during his 18-year career and, as a Certified Business Intermediary, he’s an expert at walking business owners through a sale.

H

ow much a business is worth isn’t a cut-and-dry, easy number to settle on. It’s based on a variety of factors, but earnings are critical. A company’s staff, inventory, customer base and the competitive environment all play into a deal. “We’re selling a living breathing financial product,” Seitz says. Making that sale happen usually takes between nine months and a year. Sometimes businesses are on the market for much longer. But there are steps business owners can take to prepare for a sale and maximize their business’ value. “If this was a utopia world, I would meet with each and every client I engage with three years before we actually do business,” Seitz says, “just to give them a 15-minute conversation to briefly say this is what you need to do to get ready and this is how you need to do it.” What does Seitz recommend for business owners looking to sell?

DO

Understand What “Fair Market Value” is For Your Business

Too often, business owners assign unrealistic, arbitrary values and proceed into the sale process only to be disappointed with the market’s response. On the other hand, sellers also often underestimate the value of their business and leave money on the table. Third party valuations offer an unbiased opinion through a thorough analysis of the business and can be a tool to help the seller determine if it’s time to sell and go, or to stay and grow the business until it achieves a higher value. Ultimately, a business is worth what a buyer is willing to pay for it.

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EDGE • AUGUST 2013

Keep It Secret, Keep It Safe

Maintain confidentiality during a sale. Generally, it’s not desirable for competitors, vendors, creditors or employees to know that the owner is trying to sell. Business owners know how to manage their business on a daily basis, which is vital when working toward a deal with any buyer. But that experience doesn’t prepare owners to know how to sell their business. When an owner sells independently, confidentiality is the first to go.

Organize Your Team of Advisors and Seek Their Counsel

A seller will need the services of an experienced transaction accountant and a transaction attorney to help close the deal. Be proactive and know whose services you will use well before you need to get them involved in a deal. Seek the counsel of a qualified transaction accountant before you begin to market your business in order to discuss the potential taxable events in your particular business sale. This is critical. Be proactive. Different allocations of the selling price will result in different taxable events to the seller. It is not what you get, but what you get to keep — after tax — that counts.

DON’T

Sell On a Whim

Have a valid reason for selling. For most business owners, the decision to sell is a very emotional one. Don’t decide to sell because you had a bad week. Don’t attempt to “test the waters” to see what sort of buyer activity, if any, your business would command. Contrary to what many may believe, retirement is not the most common reason why businesses sell. Instead, business owners sell most often because of burn out, health concerns, death, divorce, partner disputes, a decline in revenues, difficulty managing growth, or children not interested in the business.

Rush the Process

Not being prepared to work with buyers will cause delays, result in lower perception of value and can be the kiss of death on a deal. There are seemingly an endless number of items that will need to be addressed during a business sale. Business owners need time to gather and analyze info to prepare for a sale. Here are some basic first steps: 1. Gather, organize and maintain records up to date and going


Selling SellingYour a Business business Factors that impact fair market value

EARNINGS

● Is the location critical?

What are the historical earnings of the business?

● Is the business in a growth or declining industry? ● What is the condition, book and approximate fair market value of the equipment, vehicles, etc.? ● What is the inventory, and is it all sellable? ● Who are the customers? ❍ What is the sales breakdown per customer? ❍ Are there any customers that have a significant percent of revenues? ● What is the breakdown of revenues, products and services? ❍ How diversified are revenues? ❍ Are there any recurring revenues in your business model?

COMPETITION Who are the competitors, and what differentiates the business from its competitors?

GROWTH Is the business in a growth or declining trend?

● Who are the 'key employees' and their roles in the business? ❍ Will they stay on with new owners? Source: Patrick Seitz, Sunbelt Business Advisors of Chattanooga Graphic by: Laura W. McNutt

back at least three years. 2. Record all sales. 3. Eliminate co-mingling of business and non-business assets and expenses. 4. Recast or normalize business tax returns to determine historical discretionary cash flow and earnings. Cash flow is king. 5. Draft the disclosure document (offering memorandum or a business review document) upfront. This is a critical aspect of selling the company for maximum value.

Shy Away From the Experts

Do not underestimate the value of competent business intermediary to assist in your business sale. Business intermediaries can provide immeasurable value during a sale, which most business owners discover as they dive into the selling process. At worst, it helps sellers focus on what they do best — operating and managing their businesses — and allows the business intermediary to handle the nitty-gritty of the sale.

Graphic by Laura W. McNutt AUGUST 2013 • EDGE

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Start-Up

BY SHELLY BRADBURY

WORKPLACE

Safe and secure: Avoiding workplace violence On four 70-inch screens in a windowless room in BlueCross BlueShield of Tennessee’s Chattanooga headquarters, a small security team keeps tabs on the entire state.

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IVE SECURITY VIDEO feeds from BlueCross offices in Memphis, Knoxville, Jackson, Nashville and Johnson City show up in the company’s central security hub. The team can stage an evacuation in Memphis or Nashville from the room, which is staffed by at least two people 24/7. When a water main breaks or a tornado threatens, the central security hub organizes the initial response and can communicate with employees through text, email or phone alerts. TV screens throughout the campus can be used to broadcast emergency instructions if a violent incident occurs. It’s the center of BlueCross’s security system — a system that is carefully designed to prevent workplace violence and keep employees safe. “We are like an onion,” says David LaFontaine, manager of safety and security. “You’ve got the first layer, through the main gate. And then there are more layers, depending on your access level and authority. Your access is based on your role.” He swiped his employee badge once at a main checkpoint, again at a hallway door and one more time at the door to the center — where he also scanned his fingerprint — in order to get inside the security operations center. The system might seem like overkill, especially since high-profile workplace shootings — like the one where Army psychiatrist Nidal Hasan killed 13 people and wounded 30 at an army base in Fort Hood, Texas, — are fairly rare events. But workplace violence itself isn’t rare. About 2 million incidents of workplace violence are reported every year and most never escalate to a bullets-flying level. But even a nonfatal, low-profile incident of workplace violence can cost an

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Numerous security cameras are monitored at the Cameron Hill campus of BlueCross BlueShield in downtown Chattanooga.

employer millions in liability lawsuits, lost production or lost sales. “What sexual harassment was in the 80s and 90s, workplace violence is in this decade,” says Randy Spivey, CEO and founder of Center for Personal Protection and Safety, an organization that provides training to about 60 percent of Fortune 500 companies. “It’s really becoming a compliance issue for companies. OSHA investigates these incidents now, and there is liability exposure for these companies if they do not have an appropriate program in place.” Of the 4,693 people who died while at work in 2011, 791 of those died because of workplace violence, the U.S. Bureau of Labor Statistics reports. That’s about 17 percent. And whether an employer is liable in workplace violence incidents or deaths centers on two major factors: forseeability and reasonable care. “The most dangerous risk employers might face is a claim based on negligence,” says Bob Lype, a Chattanooga attorney who’s been practicing business and employment law for 23 years. “An employer could be liable to a customer, a vendor, even its own employees if a workplace violence incident happens.” Photography by Dan Henry

EDGE • AUGUST 2013


David LaFontaine, manager of security and safety for BlueCross BlueShield of Tennessee, left, listens as Daniel Jacobson, vice president of Properties and Corporate Services for BCBST, speaks about the company’s corporate security strategies and infrastructure.

Steps of Caution

35621486

The first step an employer can take to help close that liability is to conduct background checks, Lype says. “If an employee had a violent criminal history which could have been determined before hiring, but if the employer failed to do background checks (especially for a reason such as the expense), and if that employee then injured a worker or customer in an act of workplace violence, then the employer certainly could be liable for those injuries,” he says. But background checks alone won’t protect a company, Spivey says. A robust workplace violence training program should do much more. It should define workplace violence, identify warning signs of workplace violence and domestic violence, provide a structure for employees to report those warning signs, and train employees on how to respond to a violent incident. Employers should also have a risk assessment done and make any feasible changes to make a workplace safer, Lype says. Sometimes using office doors that open into a room instead of out can make the difference for employees hiding inside — doors that open out are much harder to barricade from inside. Rearranging the furniture to make sure employees won’t be trapped is also a good idea, Lype says. Physical systems, like badges, guards and security cameras reduce an employer’s legal risk. But, Spivey says, an oftenoverlooked aspect of workplace security that is just as important as the physical security system is personnel training. “It’s a myth and it’s untrue that people just snap,” he says. “Almost always before someone snaps there are warning signs.”


Start-Up WORKPLACE TRAINING EMPLOYEES to recognize and report those warning signs can be key in preventing violent incidents. Employees should keep an eye out for frequent outbursts of anger, verbal abuse or a dramatic change in someone’s personality. If an employee goes from acting consistently outgoing to consistently withdrawn, that’s a red flag, Spivey says. Ideally, a company would create a multi-disciplined threat assessment team — including human resource professionals, security managers and legal advisors — to evaluate red flags and decide how to respond and minimize the threat. “A lot of times just giving the person the chance to air out what’s bothering them can diffuse built up anxiety and anger,” Spivey says. But there’s no one-size-fits-all answer to workplace security, Lype cautions. It wouldn’t make sense for a mom-andpop shop to install badges and metal detectors. And typically, liability is based at least in part on the business’ size. At The Chattanoogan hotel, security is centered around the fact that the hotel is constantly inviting strangers into the building, says general manager Tom Cupo. “We market to the entire world to come to our property and we keep all our doors open 24 hours a day,” he says. “We believe all of our team members are part of security.” The company trains employees to politely challenge an unfamiliar face in the back of the house. And everyone receives basic first aid and life safety training. The Chattanoogan also relies heavily on local law enforcement to deal with more complex situations, Cupo says. At BlueCross, security centers on three prongs: people, process and technology, says Dan Jacobson, vice president of properties and corporate services. They have about 75 employees and contractors in the security department and around 200 security cameras throughout the Chattanooga campus.

Costs of Prevention

Many companies like BlueCross spend a significant portion of the budget on security, despite the fact that it is often not connected to their core business model. But the Chattanooga health insurer found out the hard way that companies can pay a price for not having adequate security when some of its computer hard drives with patient information disappeared in 2009. Blue Cross spent $17 million in investigation, notification and protection efforts and paid a $1.5 million federal penalty for the theft 57 unencrypted computer hard drives that contained protected health information from BlueCross’s former leased offices at the Eastgate Towne Center where it was moving out of four years ago. The computer files were taken from a data storage closet. To date, neither the police nor BlueCross have caught any suspects in the crime and there is no indication of any misuse of personal data from the stolen hard drives.

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EDGE • AUGUST 2013

Training Employees

One way to minimize such security costs while maximizing results is to focus on training, Spivey says. “It’s fair to say a best practices program won’t just rely on physical security, but equally important and more cost effective is training the employee population,” he says. “A robust security system won’t do much good if the employee is inside.” But, he adds, money spent on prevention is money wellspent. “It’s hard to measure prevention,” he admits. “Because you don’t know what you prevented. It’s like Driver’s Ed. How many car wrecks did we not have because we put people through Driver’s Ed?” At BlueCross, about 90 percent of security efforts are focused on prevention. But that security goes beyond the usual, Jacobson says. For example, the emergency notification system can be used to send employees home early before bad weather hits. “There are real, everyday, tangible values created by security,” he says. And as an insurance provider, security is a part of BlueCross’s core business — keeping customers’ medical and personal data secure is a top priority for the company. LaFontaine says his department — and the industry as a whole — is moving away from the traditional quasi-military approach where security is seen as a separate, disconnected add-on to a company and toward an approach that focuses on ways the security team can add value to the business. “We look at ourselves as a contributing department to the company,” he says. “We’re a business. We have internal customers, we have external customers. We’re not a law enforcement agency, we’re not a military agency. We’re a corporate security department that is driven by the mission of the company.”

HOW TO RESPOND TO AN ACTIVE SHOOTER Once a shooter gets inside a building, employees often need to survive on their own until law enforcement arrives. Employees have three options. Run, hide or fight.

› RUN — The best option for employees facing an active shooter is to get out. Employees should move quickly and quietly away from the shooter. Getting out doesn’t necessarily mean heading down the fire escape and into the street. Moving from one floor to another or from one room to another may be enough. › HIDE — If there is nowhere to run, the next option is to hide. Shooters tend to bounce from one place to another every three or four minutes, so employees can sometimes avoid the violence by barricading themselves in a room or hiding under a desk.

› FIGHT — As a last resort, employees should do anything and everything possible to stop a shooter and control the shooter’s hands. This could include tackling the shooter or using whatever is available as a weapon. SOURCE: Center for Personal Protection and Safety


Start-Up

BY MIKE PARE

INDUSTRY & MANUFACTURING Tom Snow shows a heat shield at the T. J. Snow Co., Inc., facility near the Chattanooga Airport.

Fifty, and Counting T. J. Snow Co. marks five decades in business

T.J. Snow Co. chief Tom Snow calls his company “the Walmart of resistance welders” in that clients can get about whatever they want from equipment to tooling to training.

T

HE CHATTANOOGA-BASED COMPANY, started by Snow’s father, Jim, is marking 50 years in business this year. While it’s in a growth mode today, things were different when the Great Recession hit in 2008. With much of its equipment sold to the auto industry, T.J. Snow sales slumped when the auto industry hit the brakes in

2009 and subsequent years. But a big order from a Nashville-area plant, hit by another kind of disaster, helped pull the business out of the recession. Severe flooding in Nashville in 2010 had hurt A.O. Smith Corp.’s water heater production plant in Ashland City, Tennessee. T.J. Snow Co. help the business get back up to speed by replacing and rebuilding resistance welders that were water damaged. “We needed the business. It was an answer to prayer,” says Snow, who has about 40 years with the company. David Hetzler, T.J. Snow’s president, says the water heater business was the start of the recovery for the company. With the return of the auto sector, the T.J. Snow Co. has more than bounced back, he said.

Photography by John Rawlston AUGUST 2013 • EDGE

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Start-Up

INDUSTRY & MANUFACTURING

HETZLER SAYS that sales volume is 60 percent above the level before the recession, though he didn’t want to provide any numbers. Employment is 40 percent above, he says. “We’re looking to hire,” Snow says. The company has grown from one man to more than 75 people today. About two years ago, it moved near Chattanooga Airport to a David Hetzler newly renovated facility on Nowlin Lane, where it made a $2.5 million investment. Also, it added 12,000 square feet to give it 64,000 square feet in all. T.J. Snow has benefited from the growth in the auto industry since the 1980s and helped accelerate the company’s expansion into manufacturing special design resistance welders, or multi-gun spot welders. Paul Bush repairs a circuit board in the service department at the T. J. Snow Co., facility. Officials say the company has found success selling its welders to tier one and tier two The company has also grown the stocking and distribusuppliers, which typically surround automotion of repair parts for resistance welders. Officials say tive assembly plants. that about half of its sales volume is in parts and acces“We do some work for Volkswagen and we’d like to do a sories, including electrodes, cables, monitors and retrofit whole lot more,” Snow says. controls. The company also sells to VW suppliers such as Gestamp. Snow houses resistance welders that have been used or Recently, T.J. Snow furnished a special design spot welder traded in, including 300 used welders in its warehouse, to a supplier that makes mufflers for the 2014 Corvette. which has a 15-ton crane. In addition to the auto sector, the business builds maT.J. Snow sells internationally, including Mexico, South chines used by companies which use resistance weld prodAmerica, India and China. ucts for fabricated steel wire, including store fixtures, oven “We have two people fluent in Spanish,” Snow says. “That racks, filter frames and tomato cages. makes it much easier to do business.” According to the company, T.J.Snow is the only one in its industry with a full-time dedicated service department ofABOUT T.J. SNOW CO. fering on-call and quick-response welder and control service › Chief Executive: Tom Snow inside customer’s own plants. › Founded: T.J. (Jim) Snow Sr. on April Fool’s Day, Two of T.J. Snow’s service personnel are private pilots, and 1963 they often fly themselves to airstrips near customer plants in › Location: Nowlin Lane near Chattanooga Airport; the company’s two airplanes. for many years it operated on Jim Snow Way off Lee In the future, Hetzler says that more and more industry is Highway returning to the United States from China and Mexico and › Products: Resistance welders for auto industhat’s a positive. try; also builds machines used by companies that “There’s more demand for our stuff, and we’ll continue to resistance weld products from fabricated steel wire, grow that,” he says. including store fixtures, oven racks, filter frames and Snow’s son, Sam, joined the company about six years ago tomato cages following a stint with Kimberly-Clark Corp. after graduation › Cost: Welders range from $10,000 to $300,000 from Auburn University. › Employees: 75 “I grew up around the business,” he says.

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EDGE • AUGUST 2013


Leaderboard

Apartmentadditions Additions Apartment

Developers add rental units across region The apartment market in the Chattanooga region was rated by Rock Apartment Advisors last year as one of the strongest in the Southeast. Among 53 local properties surveyed, the average occupancy was 96.9 percent. While home ownership declined from the drop in sales and rise in foreclosures during the recession, more people are moving into rental units. That demand is producing the biggest building boom in apartment buildings in more than 25 years with nearly 2,000 apartment units opened or under development this year.

● Brookes Edge

400 units, 3925 Adkisson Drive, Cleveland

● McCutcheon Road

250 units, $20 million, 6839 McCutcheon Road

● Highway 58

242 to 264 units, $20 million, Highway 58 and North Hickory Valley Road

● The Hamilton Lofts 42 units, $4 million, 600 N. Market St.

Staff Photo by: Tim Barber / Graphic by: Laura W. McNutt

The Walnut Commons apartment complex nears completion at the corner of Lookout Street and Riverfront Parkway.

● Retreat at Spring Creek

112-unit addition completed in April, bringing complex to 311 apartments at 25th Street NW in Cleveland, Tenn.

● Madison Street Apartments

102 units, East Main and Madison streets

● Walnut Commons 100 units, $11 million, Walnut Street and Aquarium Way

● Tremont Street

36 units, $3.5 million, 110 Tremont St.

● Forest on Frazier

30 units, about $5 million, 120 Forest Ave.

● The Constance

27 units, $5 million, 125 Cherokee Blvd.

● Continental Properties Co.

plans to build a 260-unit apartment complex in East Brainerd near Hamilton Place mall

Graphic by Laura W. McNutt

AUGUST 2013 • EDGE

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Skill Sets

PROFILE • YOUNG GUNS • MANAGEMENT TIPS • MANAGEMENT TEAM • BUSINESS ACUMEN

“Just because you have to be compliant with all of these rules as accountants, it’s imperative that you don’t let that turn into unnecessary self-imposed rules.”

Profile

By the Numbers Nick Decosimo leads Tennessee’s second biggest CPA firm

A

BY DAVE FLESSNER

s the oldest of nine children born in only 10 years, Nick Decosimo learned early about taking the lead in family enterprises. For the past decade, the son of Joseph and Rachel Decosimo of Signal Mountain has headed the accounting firm that bears his father’s name. Three of his siblings — Tom, Fred and Rose — have followed him into the CPA firm as partners and have helped build the firm into the region’s biggest accounting firm by doubling the number of office locations and employees in the past decade. With more than 300 employees and over $36 million in revenues last year, Decosimo is the second largest CPA firm in Tennessee and one of only eight CPA firms n Tennessee, Georgia, Alabama or North Carolina that are among Accounting Today’s top 100 accounting firms in the country. PHOTOGRAPHY BY DOUG STRICKLAND

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EDG E • AUGUST 2013


Company History

› 1971: Firm founded in Chattanooga

by Joe Decosimo, Marion Fryar and Jerry Adams › 1980: Dalton office opened › 1985: Cincinnati office opened › 1988: Decosimo merges Dalton office with local practitioner Charles Hendry, operating as Hendry & Decosimo for several years. › 1990: Atlanta office opens › 1997: Healthcare practice added › 2003: Chattanooga office merged with Costello, Strain and Co. to expand Decosimo Advisory Services division in Chattanooga. Cayman Islands office opens in Georgetown, Grand Cayman as Moore Stephens Decosimo Cayman Limited. › 2004: Firm merges in the practice of Bean & Ison in Memphis and operates as Ison & Decosimo for several years. › 2005: Decosimo joins Moore Stephens International Limited, an association of more than 300 independent member firms, to expand its access to resources and professionals on an international scale. › 2006: Merger with FIS Associates adds Knoxville office    › 2006: Decosimo Recruiting, LLC started to offer the specialized recruitment and placement of financial and accounting professionals on a permanent, temp or temp-to-hire basis. › 2007: Nashville office opens › 2008: Decosimo Corporate Finance, LLC is formed as a member of FINRA/SIPC to provide sell-side and buy-side advisory services, debt and equity capital sourcing. › 2008: Merger with The Vaden Group creates entertainment practice in Nashville. › 2010: Huntsville office opens


Profile

Nick Decosimo

Skill Sets

THE SOFT-SPOKEN, 62-year-old head of Decosimo is eager to sustain the firm’s growth pace. “We want to grow organically and through strategic acquisitions,” Nick says confidently during an interview in the Tallan Building headquarters of the 42-yearold company. At the current growth pace, Decosimo should top $50 million in revenues within five years and top $100 million in revenues before 2025. But Decosimo says he and the other 30 partners in the Decosimo firm aren’t trying to grow simply for growth sake. They have little interest in being like the nation’s biggest accounting firms that focus on just large publicly traded companies. A key to Decosimo’s growth in the past — and its future — is working with startup and family firms, Decosimo says. “We can handle small firms all the way up to the point that they go public,” he says. “We have worked with what are many of our biggest clients today since they got started in business.” Through its work with Chattanooga native Mercer Reynolds and his business partner Bill DeWitt in Cincinnati, among others, Decosimo has worked on the sale of five major league baseball teams over the years, including George Bush’s purchase of the Texas Rangers. Although Decosimo is the accountant of record for only one publicly traded company — the Ooltewah-based Miller Industries Inc. — the firm does audit, tax and valuation work for several privately-held billion-dollara-year businesses, and hundreds of multi-million-dollar investment funds, foundations and businesses. But many of the company’s clients are small businesses and hedge funds that Decosimo hopes will grow into bigger firms.

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THE HALLMARK OF THE COMPANY’S PHILOSOPHY was epitomized by its founder, Joe Decosimo, long before the firm was founded in 1971. As a young MBA graduate and CPA in Chattanooga, Joe Decosimo originally worked for J. Homer Hardy, a former tax accountant. The elder Decosimo would often spend hours with clients talking about what they were trying to do and see if there were ways they could improve their operations and finances. Homer Hardy finally called Joe Decosimo in his office and told the young accountant that he was not cut

EDG E • AUGUST 2013

Joseph Decosimo & Co. › Headquarters: Chattanooga › Managing partner: Nick Decosimo › Staff: 261 employees, including 170

professionals › Partners: 31 › 2012 revenues: $36.2 million, up 8.1 percent from the previous year › CPA rank: 86th biggest U.S. firm, second biggest in Tennessee behind only Brentwood-based Lattimore, Black, Morgan & Cain › Locations: Nine offices › Major clients: Life Care Centers of America, McKee Foods Corp., St. Louis Cardinals, Olan Mills, Beaulieu of America, and Miller Industries. Source: Accounting Today ranking of top 100 CPA firms

out to be CPA because he spent too much time talking with the clients about their business rather than just getting out their monthly statements. He promptly fired Decosimo. “Just because you have to be compliant with all of these rules as accountants, it’s imperative that you don’t let that turn into unnecessary self-imposed rules,” the younger Decosimo says. “It’s hard because the mindset of an accountant or an auditor is a certain way and you’ve got to make sure that you don’t let clients see that as the way you are interacting with them.” Nick Decosimo says the Big 4 accounting firms don’t want to focus upon small startups while small CPA firms often can’t handle companies that get too big. Decosimo works with some clients with annual sales of up to $3 billion, but most clients are much smaller. In his own business, Nick says he regularly gets calls about selling the firm to a larger regional CPA company as the accounting profession continues to consolidate. “I recently got three such calls in a week,” Decosimo says. “The merger thing is always swirling out there and you never say never, but it’s not something that is in our current plan in any way. It’s highly unlikely.”

BUT NICK DECOSIMO’S OWN PATH to heading Chattanooga’s biggest accounting firm was an unlikely one. He was on his way toward becoming an English professor when he had a change of heart and decided to follow his father’s footsteps into the world of accounting where jobs seemed more plentiful and secure.


Personal Profile

Name: Joseph Dominic “Nick” Decosimo Job: Managing partner of Joseph Decosimo & Co. Age: 62 Education: Bachelor’s degree in English as an Echols scholar at University of Virginia and MBA from University of North Carolina at Chapel Hill. He earned his CPA in 1977 became a partner in 1981 and was elected managing partner in 2003. Personal: He and his wife, Karen, have two grown children and reside on Signal Mountain


Profile

Nick Decosimo

Skill Sets

NICK WAS AN ECHOLS SCHOLAR at the University of Virginia, where he earned his bachelor’s degree in English in only three years, and completed his work toward a master’s degree in English in only two semesters. “I always loved to read and I took about every English class I could so my plan was to get a doctorate in English and become a professor,” Decosimo recalls. “But all these people were coming back from Vietnam and I saw all these Ph.D.’s driving cabs.” So Decosimo shifted careers and took his first real college business and accounting courses when he pursued a business degree from University of North Carolina at Chapel Hill. “At Virginia, I’d walk past the commerce school and wonder what they did,” he recalls. “But as I started thinking about my career, I remembered how much my father enjoyed what he did and I figured, “I’d like to try that.” He never put any pressure on any of us to follow his career and he supported us in our different interests. But he just enjoyed himself doing what he did and allowed us to see that he did.” The elder Decosimo still regularly comes to the firm’s office and offers help and advice to clients and colleagues. “Anybody who has had more than 66 years of accounting experience is a great resource,” Nick says of his 88-year-old father. Like his father, once Nick decided to become an accountant, he vigorously pursued his business career. He earned his MBA at Chapel Hill, passed his CPA exam, took a vacation his father gave him to Europe and headed out west with his wife, Karen, to Denver to work for Haskins & Sells, which is now Deloitte, the nation’s largest CPA firm. “I’d never been to Denver but Karen and I thought it would be a great town to try out,” he recalls.

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BUT WHILE NICK AND MOST OF HIS SIBLINGS ventured elsewhere to study and begin their careers, they soon heard the siren call of Signal Mountain, where he grew up and still lives. Nick’s wife, Karen, who he has known since the 3rd grade, was also a Chattanooga native eager to return to Tennessee when their first child was born seven years after Nick and Karen were married. On his mother’s side, Nick’s ancestors go back before the Civil War in Chattanooga.

EDGE • AUGUST 2013

But Nick’s paternal grandfather — and the father of the namesake of the accounting firm he heads — was born in Italy, immigrated to the United States, fought in World War I and worked as a coal miner. Nick’s father, Joe, fought in the second World War II and quickly learned the world of accounting and finance at the University of Georgia and Northwestern University on the GI bill. Even though three of his siblings work in the CPA firm named for his father, Nick’s children aren’t likely to follow the accounting path. Nick’s oldest son, Joseph, earned a master’s degree in folklore and is a champion old-time fiddler and banjo player and his other son, David, has a Ph.D. from Princeton in religion and ethics and teaches at Loyola. “Clearly, what I didn’t do, they did,” he says.

WHEN NICK JOINED THE DECOSIMO FIRM in 1979, it had only 35 accountants and only operated in Chattanooga. Within a few years, Nick became head of the audit department and in 2003 when Jerry Adams stepped down as the firm’s managing partner, Nick was elected as head of the accounting partnership. Since then, the company has more than doubled its geographic footprint and staff. Decosimo added a broker dealer division, Decosimo Corporate Finance, LLC, five years ago as a member of FINRA/SIPC to operate a licensed merger and acquisitions business. Decosimo doesn’t sell mutual funds or operate a wealth management division like some CPA firms, primarily because so many of the firm’s clients are investment partnerships and hedge funds “and we don’t want to compete for investment dollars with those we serve.” Decosimo has specialized in valuation, audit, tax and other financial assessments and avoided building major information technology or wealth management businesses like some other CPA firms. Nick was elected for the last time as managing partner and in five years will give up running the firm. “I’d like to keep working, to the extent I can,” he says. “I don’t have a lot of hobbies, and there are always lots of civic opportunities to help out in our community.”


Young Guns

Dan Peeples The mortician mayor brings new civic life to Varnell, Georgia BY Dave Flessner

About Peeples Elected Position: Mayor of Varnell since 2009 Job: Vice president of Julian Peeples Funeral Home and president of Peeples Monument Service Age: 35 Education: Graduate of University of West Georgia and Gupton Jones College Personal: He and his wife, Katie, are parents of a son, Nathan, and are active in the Grove Level Baptist Church Photography by Dan Henry

AUGUST 2013 • EDGE

Skill Sets

D

an Peeples’ day job may be focused on the recently deceased, but as mayor of Varnell, Georgia, he spends much of his time working to bring new life into his hometown. Peeples, who serves as vice president of Julian Peeples Funeral Home and president of Peeples Monument Services, was elected to head Varnell’s city government in 2008. At the time, he was one of the youngest mayors of any Georgia municipality. In the five years since, Peeples has worked to build a new city hall, track, pavilion, sidewalks and community center near the historic Varnell House erected in the 1800s. As mayor, he also has helped upgrade the city’s playground. “I see us becoming a really great place to live for those who work in Dalton, Cleveland or Chattanooga,” the 35-year-old mayor says. The 2010 census counted 1,744 residents of Varnell, Whitfield County’s second biggest city serving primarily as a bedroom community with only a few businesses. Peeples’ familyowned funeral home, which was started in 1981 by his parents — Julian and Jane Peeples — is one of those businesses. Dan Peeples decided to join his parents in the local funeral home after graduating from Northwest Whitfield High School and the University of West Georgia, where he earned a business degree while helping lead the local Chi Phi Fraternity. He earned his degree in Mortuary Science from Gupton Jones College and is married to Katie Kinnamon Peeples. “I decided to run for mayor because there seemed to be a lot of quarreling and arguments in the community,” he recalls. “I think the morale of our community is 100 percent better now. There is no other place I would rather be.”

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Management Tips

Leadership Skills 1. Define.

Define your mission and overall goals in a few sentences. Businesses need a vision and goal that can be captured quickly and understood by all employees. Managers need to communicate such goals by words and example to ensure employees buy into the company’s mission. “You need your team to understand where you are going and motivate them to help achieve that goal,” Dragone says. “Inspiring by example is the best way.”

The Pros:

Robert and Devie Dragone Developing leaders earns aQQolades AS TOLD TO DAVE FLESSNER

Skill Sets

R

obert Dragone spent more than three decades in the U.S. Air Force and Central Intelligence Agency as an intelligence specialist studying places around the globe. When he decided to start a consulting business with his wife last year, Dragone’s intelligence brought him to Chattanooga. The former CIA specialist and his wife Devie, a senior computer program manager, picked Chattanooga both because they like the city as a place to live and because they see Chattanooga positioned at the center of what they call “the midSouthern resurging growth corridor.” Their new consulting venture, aQQolade Inc., provides customized coaching and development in marketing, social media and communication skills for company leaders. The Dragones set up shop in the Chattanooga/Hamilton County Business Development Center and will initially employ instructors with experience in management, communications and social networking from Washington D.C., Charlotte, North Carolina, Greenville, South Carolina and Chattanooga. Their interactive coaching and development work is customized for each business, but the Dragones offer some general advice to address what they see as common problems in organizations:

2. Strategize.

Most managers are promoted because of their job proficiency and knowledge. But leaders must think more broadly about the direction of the market, technology and the consumer. To do that requires executives to communicate their vision effectively and get their employees to think creatively and strategically to meet changing conditions, not just meet today’s market. “You need to see things in a longer range, look out over the entire market, figure out the opportunities and communicate that to your employees,” Dragone says. “Unfortunately, I think a lot of companies lack the development of these people and that is where a business like ours can come in and help.”

3. Prioritize.

Prioritize time and focus toward most important goals and tasks. Too many leaders are being managed by incoming email, phone calls and other messages, rather than managing their own time. “When people are drawn to spending the entire day working on email, they are no longer fully functioning as a leader,” Devie Dragone says.

4. Inspire.

Devie Dragone said some managers have a “hardscape” of certifications and can personally get a job done, but they may lack the ability to communicate or delegate to others what needs to be done or consider alternative ways of accomplishing a task. “They definitely can execute, but it feels like an execution when they are through and the next time they come around people already have their defenses up and they will not be so quick to fully participate,” she says. As managers rise in the ranks, their jobs increasingly become primarily about motivating and managing people, not producing the product per se. Dragone says improving communications need to start at the top. Photography by John Rawlston

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out ne

Keith Clingan, and Kevin Mullins in front of the Abra logo in their office at 6009 International Drive. Clingan serves as general manager of Abra in greater Chattanooga, including Cleveland and Hixson, Tennessee, locations, while Mullins serves as general manager of Abra in Chattanooga.

Clear Direction Abra Auto Body & Glass franchisee sees steady growth in Scenic City

C

BY MIKE PARE

hattanooga business owner Keith Clingan started his Abra Auto Body & Glass venture nearly 20 years ago. Now, he has four stores — two in Chattanooga and one each in Hixson and Cleveland, Tennessee.

“We built them out of the ground,” Clingan says. He employs nearly 80 people today, and he describes business as “good.” “We’re holding our own pretty good,” Clingan says. “We hope it will stay that way.” Abra’s first location was Fridley, Minnesota, in 1984 and the company has over 170 centers in 17 states nationwide. Abra likes to say that its facilities repair damaged vehicles “right the first time...on time.”

Skill Sets

nd can delomwhen e their

Management Team

Photography by Shawn Paik

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Business Acumen

Merri Mai Williamson

Should social media be a factor when hiring?

G

o ahead, admit it. You’ve done it. You want to learn more about a person you just met, so you Google their name to see what pops up; and then you scour social media sites to see what they’ve posted. (If you haven’t, then congratulations, you are in the minority.) With so much information right at our fingertips, it would seem like such a waste not to use it when making a hiring decision. But consider these five social studies:

Accuracy

Skill Sets

There are questions about authenticity and whether a site really refers to or belongs to an applicant. Fake accounts are sometimes created by someone other than the applicant and often contain inaccurate or disparaging information. According to the Society for Human Resource Management (SHRM), 30 percent of everything you see on an application is false; and most of those inaccuracies were consciously provided. Recently, we gained a new client who had been conducting its own background checks, using Internet searches. The business had denied positions to two prospective employees in May because of information found in databases and on social media sites. Unfortunately for this employer, the Internet information was not accurate, costing the business additional recruitment time and the loss of two potentially great employees; and the employer had to justify the decision to rescind offers of employment, which is a current legal battle the business is fighting.

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Discrimination Lawsuits

Applicants can bring a “failure to hire” lawsuit if the employer utilized information from a social networking site about their race, ethnicity, nationality, marital status, religious preference, age, or any other of the “protected classes,” Recruiters also are not immune from potential liability just because they are searching for passive candidates who may not know they are the victims of discrimination. In 2007, the Equal Employment Opportunity Com-

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mission began focusing on unconscious bias, which occurs when an individual is influenced at an unconscious level to make disparately impactful decisions. A much-publicized example of this occurred in 2011, when the Supreme Court began hearing oral arguments in the world’s largest class action lawsuit, Dukes v. WalMart Stores, Inc. The case involved seven women who claimed that they did not receive promotions and salary increases while their male counterparts experienced just the opposite. In essence, the women argued that their supervisors were well aware of their personal lifestyles and family decisions, as the supervisors were “liking” Facebook photos and congratulating them on postings, like a pregnancy. The fact that the employer unconsciously took social media information into consideration when choosing who to promote does not excuse the bias against a pregnant woman or any other “protected class.”

Off-duty Conduct

Employers also need to be careful about the use of legal off-duty conduct. A prime example would be seeing pictures of a potential employee raising a beer bottle and deciding not to hire the “hard partier.” At least 30 states have enacted “lifestyle discrimination statutes.” The most broad-reaching statutes exist in California, Colorado, New York and North Dakota, which protect any lawful activity from discrimination. Statutes in Illinois, Minnesota, Montana, Nevada, North Carolina and Wisconsin are close in scope, as they prohibit discrimination on the basis of the use of lawful products (consumable and otherwise). However, you would still have to figure out how you could look at someone’s social media page and not take note of their ethnicity or age, not to mention all of the other “protected class” information. Some states have passed laws to prevent employers from taking action because they disapprove of the individual’s behavior, if the behavior is legal. Although most employers are not impacted by these laws yet, you certainly do not want to be the example the courts use to set a precedent.


Go on. Finish online. Sure, you’ve got a decent job and doing okay, but where is it going? You could have so many more career opportunities—if you could just finish your college degree.

Policy

Contrary to popular belief, just because it is online does not mean that it’s a good idea to utilize it without developing policies and procedures. Consulting with an employment attorney is highly recommended to ensure that you are not at risk for breaking a law or establishing a risky practice. By seeking counsel, you can standardize your process for using social media and reduce your exposure to lawsuits. To strengthen your company’s ability to craft and enforce a policy, further assistance may come from becoming a member of the Society for Human Resource Management (SHRM) and networking with other human resource professionals by joining the local chapter of SHRM.

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Privacy

Even though the information is on the Internet, strong arguments can be made that consumers have a reasonable expectation of privacy on websites where only friends are supposed to visit and the terms of use prohibit commercial exploitation. A false sense of security often promotes postings which are better kept secret; and you cannot un-see something once you have laid eyes on it. You may have seen the State Farm commercial “State of Disbelief,” which is more commonly known as the “French Model” — the one where the young lady introduces her date whom she met on the Internet (the French model) to her friend and confidently claims that they can’t put anything on the Internet that isn’t true. Well, I don’t mean to be the bearer of bad news, but the Internet should not be your primary source of information when making hiring decisions. And in actuality, taking the five social studies into consideration, you might be wise to leave social media out of your hiring process.

UTC.edu/Achieve-Degree UTC is an EEO/AA/Titles VI & IX/Section 504/ADA/ADEA institution.

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Merri Mai Williamson, SPHR is the founder & chairperson of Application Researchers, a private investigative agency specializing in pre-employment background checks.


Regional Communities Follow Chattanooga’s Lead With High Speed Internet Story // Ellis Smith and Tim Omarzu Photography // Dan Henry


Installing gigabit fiber is a lot like buying the world’s first telephone. You’ve got the best technology available, but it’s useless until everybody else gets it too. That’s the challenge faced by municipalities and Internet providers across the Chattanooga region. OR CITY-OWNED UTILITIES TODAY, it’s in vogue to issue bonds and build a fiber-optic system to compete with private providers like Comcast, Charter and AT&T. Almost a dozen cities in the region are enjoying the economic benefits of rolling out fiber-optic cable to each home in their service area, and most of them are publicly proud of the job potential they’ve created. In Tennessee alone, no other state comes close to the level of fiber penetration, officials say. At least 10 percent of the state has access to some type of high-speed fiber, Tullahoma officials estimate, or more than half a million consumers and businesses.

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But despite all the bluster, it’s too early to talk about a big return on the hundreds of millions of dollars it took to build all that fiber. Few mayors or utility executives can name a company that has relocated to their area or expanded due exclusively to the fiber-optic network. Yet a state-of-the-art communications system still plays a large part in the economic health of their community, they say, and should be a part of any economic development plan. The fact is, many such local governments are taking a risk and diving into an unknown technology — one that today has few real-world uses beyond those imagined on paper or demonstrated at tech conferences. Attempts to find applications that take advantage of gigabit technology have yielded few viable results over the last two years, though some ventures, like the Chattanooga Gig Tank challenge, are still ongoing. The problem is one of symmetry. If a user in Tennessee is jacked into gigabit fiber, but a server connection in Ontario is only 10 megabits per second, then the connection will be limited to 10 megabits. Until most of the country is inundated with gigabit fiber, the high-speed technology will require


Rich Carpenter, manager of Network Operations for EPB, uses a FiTV video monitoring station while at the “Head End” room which houses the heart of EPB’s fiber network.

Regional Communities with Fiber Optic › Chattanooga › Tullahoma, Tennessee › Morristown, Tennessee

› Bristol, Tennessee › Bristol, Virginia › Clarksville, Tennessee › Jackson, Tennessee

workarounds and special setups to run between cities. But by then, having gigabit fiber will no longer be special or unique. A recent attempt by a Chattanooga group to demonstrate the live 3D streaming potential of the gigabit is a case in point. The demonstration required the direct participation of two universities, Chattanooga’s cityowned utility, and a number of entities in Chicago, where the audience watched the broadcast as it streamed in from Chattanooga’s Tennessee Aquarium. Even with all that digital firepower in place to ensure a

› Pulaski, Tennessee › Rome, Georgia › U.S. 27 corridor

smooth connection, reporters still observed technical glitches with the presentation, which had to be restarted. A visit in 2012 from Craig Settles, host of Gigabit Nation broadband talk radio, went similarly awry. Settles set up shop at EPB’s downtown Chattanooga headquarters in August as part of an attempt to broadcast his show — which is all about the benefits of ultra-fast broadband — at gigabit speeds for the first time ever. But even a trio of EPB’s own support personnel inside the utility’s headquarters couldn’t get the company’s finicky gigabit fiber to work. Settles had to settle for regular old WiFi.

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Randy Brewer works on a machine in the heart of Tullahoma’s fiber network.

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Be that as it may, a demand for immediate results misses the point, utility executives argue. Ultra-fast broadband speeds are becoming more like water, electricity or sewer service: more of a need than a want. By taking the leap now, they’re future-proofing communities and sending a signal to businesses that their town is forward-thinking and supportive of innovation. “FIFTY YEARS AGO, there were many water companies serving the Tullahoma market,” says Tullahoma Mayor Lane Curlee. “Then, the city fathers at the time decided that there’s a better way to do this, and they got into the business of providing water. Sewer service came later. At some point in the future, fiber, or some version of that, will simply be the fourth utility that communities offer. Tullahoma and communities like Tullahoma are something like 10 years ahead of the curve. We’re there.” Companies are listening to what people like Curlee are saying, and they like what they hear, says Katie Espeseth, vice president for EPB Fiber Optics. “We think we’ve seen about $4 billion in investment, or about 6,700 new jobs in Chattanooga,” Espeseth says. “We’re not going to stand up and say it’s all because of this fiber-optic network, but we think between our communications capability and benefits of smart grid, it did play a part.”

Autumn Elmore monitors Tullahoma’s fiber optic network.

Consumers, for their part, are mostly happy about the new opportunity. Rankled by customer service problems and repeated price increases from the cable giants that often rank among the worst in consumer surveys, residents typically cheer the arrival of a locally operated underdog in the TV, phone and Internet marketplace. Tech support often speaks English with the same accent shared by everyone in town. Decision-makers aren’t hidden away in another city, and can be voted out of office if they don’t make their customers happy. All the dollars paid for TV or Internet service stay in the community, and — best of all for tech enthusiasts — the big investment made by municipalities means faster speeds and better high-definition content than the competition. “I know our board and city council have asked Charter previously to consider building fiber in our community, and they chose not to,” says Brian Skelton, general manager of the Tullahoma Utilities Board. “It was the perception of our city that Tullahoma would not be upgraded to latest technology anytime soon, if ever.” Tullahoma is one of almost a dozen municipalities that have followed in the footsteps of Chattanooga and built its own fiber-optic network. After just a few years, the city’s LightTUBe Internet service has captured 34 percent of the marketplace from Charter. The city is already on its way to paying down the $16.9 million cost of the system, and has had positive net income for the last six months, Skelton says. Chattanooga has a similar story, with almost 50,000 of its 174,000 residents connected in some way to EPB’s fiber.

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When in Rome

Racks of IPTV encoders are stacked in the “Head End” room which houses the heart of EPB’s fiber network.

Gig Country

Chattanooga, nicknamed “gig city” because the city-owned utility was the first in the nation to offer super-high-speed Internet access, is inspiring some new naming conventions among its neighbors. Today, “gig country” is sprouting to the south and the west, as others attempt to replicate Chattanooga’s municipal miracle. In 2010, the U.S. Department of Commerce awarded $21 million to expand broadband access to the “underserved area,” south of Chattanooga, which required construction of at least 187 miles of new fiber-optic cable to be routed through nine counties in northwestern Georgia, and two in eastern Alabama. Parker FiberNet, a business with offices in Summerville and Rome, Georgia, secured the grant and is contributing a local match of $6 million to build onto the Appalachian Valley Fiber Network, which it owns. Appalachian Valley Fiber Network initially started as a “middle mile” network targeted for “community anchor” institutions such as medical, government and educational facilities and to boost economic development by helping to attract large businesses. When complete, the new network will connect roughly 185 community institutions, including 16 K-12 schools, 46 public safety facilities, 40 medical facilities and 48 other government facilities. Large businesses also have the option to connect to it, which is a selling point for firms considering the region, says Larry Brooks, executive director of the Walker County, Georgia, Development Authority. “It makes it a lot easier to tell them the fiber is already there,” Brooks says, explaining that businesses now expect fiber-optic cable to be available just as they would expect traditional utilities, such as sewer and water. Brooks and other Walker County officials have been wooing a large manufacturer for months and think the fiber could help. “That’s one of the things they have to have,” Brooks says of the manufacturer’s need for fiber-optic Internet service.

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In January, Parker Fibernet started a new chapter when it launched GigNet, a pilot project gigabit-speed Internet service for a smattering of small businesses in downtown Rome. “This area has a remarkable industrial, cultural and creative potential that distinguishes it from the country and the world,” says David Parker, founder and CEO of Parker FiberNet. “GigNet will remove any remaining barriers that prevent this potential from being openly shared with the world. It’s time to remove the speed limit on growth and innovation in Northwest Georgia.” One of the pilot project’s customers is Makervillage, an incubator for high-tech businesses that’s housed in Startup Hill — five former homes in Rome’s Between the Rivers Historic District. Tenants work together in the communal workshop, which is equipped with advanced tools and technologies for designing prototypes. Best of all, each of the Startup Hill sites is connected to GigNet. “Digital communication is assumed, abundant, limitless,” Makervillage’s website states. Other downtown Rome businesses with GigNet’s pilot service are the historic DeSoto Theatre and SAI Digital, a company that does web design, development and data-driven marketing. An effort is afoot to get more small businesses in a section of downtown Rome on GigNet’s gigabit service, which costs $700 a month. Crowdfiber, a Rome-based firm, has started a campaign to get 20 Rome businesses to pledge $700 each to show their commitment to sign up for GigNet. Crowdfiber co-founder Greg Richardson says one of Makervillage’s businesses that uses GigNet is Brand Red Studios, a video production company. “You can imagine the amount of data that they deal with,” Richardson says. He says that the $700 per month for GigNet’s gigabit service is a bargain compared to the $5,000 to $7,000 a month it would cost to get a gigabit of bandwidth through a traditional Internet service provider. However, it’s more than double than the $300 charged by EPB or LightTUBe, and more than 10 times the $70 that Google plans to charge its users in Kansas City for the same service. Crowdfiber’s Rome campaign has an Aug. 31 deadline. As of mid-July, it was at 40 percent of its goal, with eight businesses pledged to join. Richardson thinks crowdfiber’s Rome campaign will ultimately be successful. “I think we’ll get there,” he says. Parker FiberNet may expand its GigNet service to other areas of the Appalachian Valley Fiber Network if there’s demand for it, company official Ken Carlton says.


Charting Region’s Course Fiber optics Northwest Georgia and Alabama fiber optics lines:

Chattanooga

WH

SA

ITF

IEL D

O TO CA

DADE

Tenn.

WALKER

Ga.

GA O O

GORDON

TT A H

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Rome BARTOW

FLOYD

Ala.

POLK HARALSON

COBB PAULDING

CALHOUN

Atlanta

DOUGLAS CLEBURNE

CARROLL

FULTON Source: Appalachian Valley Fiber Network Graphic by: Laura W. McNutt

Graphic by Laura W. McNutt AUGUST 2013 • EDGE

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Shane Sexton, corporate technical consultant for EPB, stands next to a fiber termination unit in the “Head End” room which houses the heart of EPB’s fiber network.

Business Development

Spring Cleaning?

3500 Dodds Ave. • Chattanooga • 423-629-2501

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35623080

Donate gently used or new goods. The sales of your donations support programs that help people in your community. Visit www.goodwillchatt.org for location information.

But demand for such services is often difficult to predict. “If economic development and jobs were easy and there was a quick and easy way to do it, everybody would have figured it out,” says Curlee, Tullahoma’s mayor. “But it’s not easy. We’ve got hundreds of communities competing over one manufacturer relocation sometimes. So you simply put forward the best that you can, and to some extent it’s a numbers game.” Mayor Curlee accepts that not every business is going to relocate to Tullahoma simply because of its ultra-fast broadband. But that fiber broadband is part of a package that, combined with the community’s airport, manufacturing space, work force and quality of life, makes the city attractive to both existing and new companies, he says. “We’ve got 600 people without jobs in Tullahoma, and our community will never reach our potential until all those people have jobs,” Curlee says. Part of the desired attraction isn’t technical, nor is it easy to explain it in a bullet point. It goes beyond numbers. It’s about being different than other communities, setting a city apart. That intangible, special something could be the spark which brings the next big employer, or causes an existing business to expand. And in practical terms, a perk like fiber-optic cable also means that cities don’t have to offer as many incentives to companies willing to relocate. “All communities, if they’re smart at all, are trying to differentiate themselves from other communities,” Curlee says.


THERE ARE ALSO EXISTING BUSINESSES to consider. Every community wants to attract the next Amazon, the next Wacker or the next Volkswagen. But existing businesses make decisions all the time about whether to expand, contract, or relocate to another community. Business retention is almost as important, if not more so, than business development. One way that EPB keeps its Chattanooga customers happy is by saving them huge amounts of money, says EPB’s Espeseth. “We set a goal to cut outage duration by 40 percent, but since we have had 100 percent operational, it has really been more like 55 percent,” she says. What that means is that EPB’s Smart Grid fiber network has saved companies about $55 million in lost production, wages and other problems suffered due to outages. EPB is also saving itself money, drastically slashing the number of human meter readers in favor of so-called smart readers that routinely phone home with power usage information. “You see when companies are looking to relocate or build facilities or expand, access to reliable and cost-effective electricity is one of their concerns, and another is next to high speed Internet or big bandwidth facilities,” Espeseth says. “If you could look at other cities, you may have to look at a specific industrial park, but you don’t have that limiting factor in Chattanooga. That’s an incentive for businesses to move here, and to expand what we already have.”

Fiber termination unit in the EPB “Head End” room.

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SEEDS OF CHANGE

GROW LOCAL MOVEMENT HAS PROMISE, BUT MOST SMALL FARMS LOSE MONEY

A

n extra dose of jolly fills the air in the produce section at the Chattanooga Market. Happy customers browse through locally-grown produce — cabbage, blackberries, peppers, peaches, tomatoes — pull out their selections and hand the money across tables to happy farmers. Customers get healthier, tastier food. Farmers get a larger share of profits. Money stays local. Happy customers, happy farmers: that’s the picture painted by champions of the grow local movement, a movement that has the potential to pump $100 million into Chattanooga’s regional economy — and that’s just if consumers were to buy only 5 percent of their food locally, the Ochs Center for Metropolitan Studies found in 2008.

Story // Shelly Bradbury and Ellis Smith Photography // Dan Henry and C.B. Schmelter

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Heather Thacker, a first-year volunteer at Crabtree Farms, harvests cherry tomatoes at the urban farm in South Chattanooga. Crabtree Farms is a local nonprofit where volunteers harvest produce daily during the peak summer months, tapering off as the fall approaches. AUGUST 2013 • EDGE

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D

URING THE LAST 10 YEARS, the number of consumers willing to pony up for local produce has steadily increased and farmers have worked quickly to meet the demand. Between 2002 and 2007, 639 new farms with less than 50 acres popped up in 17 counties around Chattanooga, a 2010 report by the Appalachian Sustainable Agriculture Project says. But small-scale farming is no simple task. More than 35,000 regional farms reported net losses in 2002 while only about 5,900 reported net gains. And today, even as demand grows, local farmers face a daunting list of challenges and barriers that could cripple the grow local movement just as consumers have started to get on board.

Growing Local Dollars

“The challenge right now is that the local farms don’t have access to the same kind of infrastructure that the national agricultural community has. When we talk about the ability to aggregate produce, process it, store it, sell it and distribute it, most of our small farms don’t have access to that kind of infrastructure.”

The potential of local produce is stunning. In Greater Chattanooga, the 17-county region around Chattanooga that spans Tennessee, Alabama and Georgia, more than 12,000 farms produced $1.1 billion in agricultural products in 2007. The average person spends about $6,500 on food each year, the U.S. Census Bureau reports. And if Greater Chat— Jeff Pfitzer, Gaining Ground tanooga residents bought all their produce and meat locally, that’d translate into about $358 million in retail spending. $4 billion on food from outside the region. That’s about $5 If Greater Chattanooga’s schools, grocers, hospitals, billion flowing away from the Tennessee Valley. And that’s restaurants and major businesses got on board, they could why even a slight change in consumer spending habits — just spend as much as $26.7 million for wholesale local food, a a slight increase in local spending — 2011 study by the Appalachian Sustainwould have a significant effect, the Ochs able Agriculture Project found. Center reports. “At the end of the day, this, as an That habit change is closer today economic development tool, can be bigthan it was 15 years ago. Demand for loger than practically any other economic cally grown produce and meat is on the development opportunity in almost any rise, says Tammy Algood, marketing other industry in this region,” says Jeff specialist with the Tennessee DepartPfitzer, program director at Gaining ment of Agriculture. “About a decade Ground, an initiative by the Benwood ago is when it really kicked in and the Foundation to promote the local food big local push got some legs under it movement. and really started helping our local “When you spend money with a farmers,” she explains. “We’re not seefamily-owned, local farm that is deeply ing any indication of that slowing down connected to the community, these in the least. We’re seeing lots of people business people are typically purchasfrom the small farm perspective who ing their labor and farming equipment are really stepping up to the plate.” in the community as well,” he says. Some consumers are switching “That money is invested locally. It’s to local food to find fresher, more very different from investing in a huge nutrient-rich fruits and vegetables. manufacturing company that sends Chris Irons handles money at the Southland Farms produce stand at the ChattaOthers prefer organic products that profits overseas or to another state.” nooga Market. aren’t genetically modified. Some Yet an almost-negligible portion of prefer to eat beef and chicken that was Tennessee Valley shoppers spend their raised in open fields. Still others say money on local food. Just one tenth of 1 local food just tastes better. percent of Chattanooga’s food budget is spent locally, Pfitzer But, ironically, that increase in demand is one of several says. challenges local farmers will have to overcome to grow the Regional farmers buy about $1 billion in farm inputs that local food movement to the next level. come from outside the region and consumers spend almost

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Market Share Above: Tom O’Neal, left, and Dottie Chapin, right, look over their produce at the Signal Mountain Farm produce stand at the Chattanooga Market, which opens on Sunday. Lower left: Produce for sale at Durham Farms’ stand at the Chattanooga Market. Lower Right: Mike Hazelrig sets out more peaches for display at the Hazelrig Orchards stand at the Chattanooga Market.


Down on the Farm

Retired military veteran Dave Waters has been farming cattle, pigs, chickens and eggs on his land at River Ridge Farm for nine years. And he still hasn’t made a profit. “My goal has always been to turn this into where we can survive on the farm, but I don’t know,” the 61-year-old says. “I’ve been struggling at it for years and I’m not sure it can be done.” About 60 miles north of Chattanooga, Waters has dabbled in broilers, egg-laying hens, hogs and grass-fed cattle during the last decade. For a while he tried to raise about 20 hogs and 20 cattle a year, driving to the Main Street Farmer’s Market in Chattanooga every Wednesday and a market in Knoxville every Saturday to sell the meat, but found he couldn’t pull it off. “There is not enough business for us, so we’re backing out of the direct marketing,” he says, adding that he now makes the trek to Chattanooga once a month. “If they want to preorder and buy, fine, but otherwise we’re shifting our focus to larger quantities.” He pays about $250 per cow at the slaughterhouse, while the industrial-sized farms that provide traditional beef can drop that cost to Value — Number of Farms less than $100 because of sheer volume. He’s found consumers aren’t ready to pay $6 for a › Less than $1,000 — 15,748 pound of ground beef when they can spend $3 › $1,000 to $2,499 — 6,809 at a major supplier like Walmart. “My goal is › $2,500 to $4,999 — 6,020 to get my price down to where I’m competitive › $5,000 to $9,999 — 6,767 with the grocery stores,” he says. “But I have to › $10,000 to 19,999 — 5,047 get much bigger.” › $20,000 to $24,999 — 1,274 Three years ago he doubled his acreage from 150 to 300 and is aiming to eventually raise › $25,000 to $39,999 — 2,054 between 125 and 150 head each season in order › $40,000 to $49,000 — 770 to be profitable. He’s currently working the › $50,000 to $99,000 — 1,262 farm with just the help of his wife, but figures › $100,000 to $249,999 — 960 he’ll need to hire some help as he grows. “It’s › $250,000 to $499,999 — 842 a big challenge doing meat and eggs,” he says. › $500,000 or more — 1,888 “People doing vegetables are doing better, but SOURCE: Appalachian Sustainable Agriculture Project, 2011 we have long way to go to make it work.” While a lack of demand is a problem for Waters, too much demand is holding back some produce farmers in the region. To meet the region’s demand for fruits and vegetables locally, the number of farm acres within 100 miles of Chattanooga would need to increase by 17 percent, reports the Appalachian Sustainable Agriculture Project. “The economies of scale do not favor a small farm,” says Joel Houser, executive director at Crabtree Farms. He farms about 12 acres and grows about 120 different varieties of fruits and vegetables. Nearly all of Crabtree Farm’s sales are retail, not wholesale. A small farm like Crabtree can’t consistently produce the large quantities needed for wholesale business. “The challenge right now is that the local farms don’t have access to the same kind of infrastructure that the national agricultural community has,” Pfitzer says. “When we talk about the ability to aggregate produce, process it, store it, sell it and distribute it, most of our small farms don’t have access to that kind of infrastructure.”

100-mile Region Farms by Value of Sales in 2007

Cindy Gregg sorts produce at Crabtree Farms in South Chattanooga.

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IN ORDER TO REACH that $26.7 million in potential wholesale spending, the region would need to see significant improvements in infrastructure, distribution and growing systems, according to the Appalachian Sustainable Agriculture Project. “If a small local farm wanted to sell to, say, the school system, that’s a great opportunity to put fresher, healthy nutritional food in our schools, except there are very few farms in the area that alone could meet the kind of demand that a major food services kitchen requires,” Pfitzer says. “And there is not a good mechanism to network these small farms to work together and fill a single order from a variety of sources.” A Chattanooga restaurant that wants to serve only local food may need to call 20 different farms to order enough food, Pfitzer says. But events like July’s Harvested Here Restaurant Week — a week where local restaurants serve special all-local dishes — show that the demand is there. “I think we’ve reached a point where we have more demand than we have supply,” Pfitzer says. “And if we had more organization in the farming community, I think it could represent a huge growth opportunity for our farms.”

Chattanooga 50-mile Foodshed Consumer Spending (Both local and non-local) › $3.7 billion on total food › $500 million on meats and eggs › $335 million on fruits and vegetables › $267 million on cereal and bakery products › $215 on dairy products SOURCE: The Ochs Center for Metropolitan Studies, 2008

* Greater Chattanooga includes 17 counties across Tennessee, Georgia and Alabama. The counties are: Bledsoe, Bradley, Franklin, Grundy, Hamilton, Marion, McMinn, Meigs, Polk, Rhea and Sequatchie in Tennessee; Catoosa, Dade, Walker and Whitfield in Georgia; Jackson and DeKalb in Alabama.

normally buy for yourself, you’ve already paid for that, it’s in your box in your CSA,” she says. “So you say, ‘Hey I’m going to figure out how to use this because I’ve already bought it.’ Then you find out you like kale and tell your farmer to grow more kale. This local cycle is really working.” Community For Houser, the key to local agriculFarming ture’s future will be a mix of mid-sized Local farmers have already and small farms. “Agriculture needs to figured out some fixes to the chalsplit both ways,” he says. “We need to lenges inherent with small-scale have more successful mid-sized farms, agriculture. Community Supported say between 150 and 300 acres. So it’s Agriculture — CSAs — is one model a farm where they can produce a lot of that many farms are relying on. In food to feed some of our institutions. a CSA program, consumers buy a We need to get them into Bi-Lo, we need share of the farm at the start of a to take advantage of the efficiencies of season, then receive a delivery of scale. But we also need to have more produce every week during the seasmall gardens and farms.” son. At Crabtree Farms, a full share Those small, under 10-acre farms costs $850 and entitles the buyer to can innovate and be nimble, responding a once-a-week delivery from May to to local markets quickly. They also tend Thanksgiving. to attract younger farmers in an indusThe farm sold about 75 full try dominated by older people — but shares this season, which will go most aren’t profitable, a 2011 study by out to about 100 families. “That the Appalachian Sustainable Agriculreally dictates how we grow and ture Project found. what we grow,” Houser says. “We And while mid-sized farms can wouldn’t grow as much if we didn’t reach wholesale markets, they’re also have the CSA — we want to have a Fresh-picked produce from Crabtree Farms. the most rapidly declining segment nice variety.” of the local agriculture market. The The farm has an agreement with number of regional farms between 50 one local company that allows and 179 acres declined by about 3 percent between 2002 and employees to pay for a share through payroll deduction, and 2007. that agreement generated 21 of the farm’s 75 shares. Crabtree Mike Hazelrig, who runs Hazelrig Orchards in Clevedelivers the produce to the employees at work. land, Alabama, used to grow 250 acres of peaches but cut The pre-pay system is great for farmers but also pushes back to 15 acres because of labor costs and the long-term consumers to experiment with out-of-the-ordinary vegetarisks that accompany a fruit crop. He’s traded wholesale for bles, Algood says. “If you’re getting a box with kale and beets retail. and local radishes and purple carrots and things you don’t

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“I WOULDN’T SAY THAT WE’RE MAKING MONEY, but the percentages are better,” he says. “If you hit a good crop and there’s a good price, and you grow hundreds of acres, you stand to make a substantial profit, as opposed to doing just a few acres, but I think the law of averages suits us better with what we’re doing right now.” Back when his family grew 25,000 trees, the risk kept him awake at night, he says. “There have been a lot of nights that we laid awake not knowing if the trees were going to live through the next morning,” he says. “I couldn’t imagine having as many acres as we had when I was a little boy. The stress level is just not worth it. I prefer to be a little dog.” Thomas O’Neal, owner of Signal Mountain Farm, is growing 60 acres this year. The work that accompanies a midsized farm is incredible, he says, especially when the weather dumps too much rain, or too little. “It costs a lot of money to run this business, and when you have bad weather you lose a lot of money,” he says. “You’re farming every 10 years really. When you get big like this, you have one bad year and it will cancel the other 10 out.” Sometimes he thinks he’d like to downsize, but he’s not sure he can make it work at a smaller scale. For O’Neal, farmers and consumers need to grow the local food market together. “There are farmer’s markets everywhere, and there always have been,” he says. “The main thing is that

people stay in this bubble between their house, their car and Walmart and they miss it. But it’s all out there. Most are small, because if you have a ton of produce and you don’t sell it, that’s disappointing for the farmer. Then if customers come and there’s not produce, that’s disappointing for them. They’ve got to grow together.” Local food is on the rise, but to continue to grow the local food market, farmers will need to build relationships with businesses and restaurants to grow sales, the Appalachian study found. Farmers will also need to make buying local food easier for busy shoppers by consistently selling at the same locations and ensuring those spots are well-known and advertised. The study also suggests local farmers capitalize on Chattanooga’s robust tourism economy through agritourism and push policy makers to create legislation aimed at boosting local production. For Houser, the growth and profitability of local farming is just a matter of time. “I think what it needs to do to survive is survive,” Houser says. “What I mean is that grocery store prices go up every single year. People have more of a sticker shock at the grocery store now, and we have not raised our prices at Crabtree since 2007. As long as these farms can hang on, then the value of the products will be seen one day.”

Cultural, Financial & Strategic fit! Mauldin & Jenkins is proud to announce the addition of Hazlett, Lewis & Bieter, PLLC in Chattanooga, Tennessee as of June 1, 2013.

AUDIT | ACCOUNTING | TECHNOLOGY | TAX SERVICES 423-756-6133 | mjcpa.com 537 Market Street | Suite 300 | Chattanooga, TN 37402 AUGUST 2013 • EDGE

55


Drive Time /

Report Details Area’s Lengthy Commutes


/

By Mike Pare Photography by Angela Lewis and Jay Bailey


Blake Poole drives about 45 minutes — one-way — each day from his Calhoun, Georgia, home to his job in Chattanooga, and he feels pretty good about it.

T

HE FORMER DELTA AIR LINES EMPLOYEE used to motor into Atlanta each day. “I commuted 70 miles each way for seven years,” Poole says. “[Chattanooga] is an easy commute. Maybe I was hardened by the drive to Atlanta.” Poole is among thousands of people who live in rural areas around Chattanooga and must commute to the Scenic City or other employment centers in the region to work. According to a report by the Southeast Tennessee Development District, there are few real employment centers in the rural counties. Therefore, Gordon County, Georgia, residents spend about an hour and a half on the roads for work, while people who live in Polk County or Bledsoe County in Tennessee often drive more than an hour.

Denny Mobbs talks about Jordan Fabricating, Inc., inside the plant in Cleveland.

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EDGE • AUGUST 2013

Blake Poole works in his Economic and Community Development office in downtown Chattanooga.

The long travel distances result in more money spent for gas, maintenance and vehicle repair. “The benefits of higher-paying jobs located farther away may be off-set by increased transportation costs,” the report says. There are other costs, too. People without automobiles may become socially isolated and have a hard time finding a way to get to work or school. They also face “significant hurdles...buying groceries, accessing medical care, attending workforce training workshops, and fulfilling basic civic responsibilities such as voting,” the study says. Denny Mobbs is a Cleveland, Tennessee, attorney and business owner who lives in Polk County. He spends nearly 45 minutes per day on the road, but considers himself fortunate because he lives in western Polk County. People who live on the eastern side of that county, such as in Copperhill, probably have to double that amount of time if they work in Cleveland, Mobbs says. What’s worse, because they have to travel through the Ocoee River gorge on U.S. Highway 64, they face hours of delay if there’s an auto accident on the twolane winding road. “It’s a barrier to them,” Mobbs says. “The issue is reliability. People don’t have a quick route.”


Going the Distance Travel time Average number of minutes it takes motorists in these counties to commute to work one way:

Meigs - 29 minutes

Georgia

Bradley - 20 minutes

Catoosa - 22 minutes

Grundy - 25 minutes

Dade - 27 minutes

Hamilton - 21 minutes

Walker - 25 minutes

McMinn - 22 minutes

Murray - 23 minutes

Marion - 27 minutes

Fannin - 27 minutes

Rhea - 25 minutes

Union - 25 minutes

Sequatchie - 28 minutes

Gilmer - 28 minutes North Carolina

Source: Southeast Tennessee Development District

Cherokee - 23 minutes

Tenn.

Grundy

Hamilton

Marion

Franklin

McMinn

Bradley

Polk

Cherokee

N.C.

Chattanooga

sa

Dade

o to Ca

Jackson

Murray

DeKalb - 26 minutes

ie ch at qu Se

Polk - 30 minutes

Rhea

Bledsoe

Me igs

Jackson - 26 minutes

Whitfield

Bledsoe - 33 minutes

Walker Ala.

ga

Alabama

DeKalb

Ch at to o

Tennessee

Gordon

Fannin

Union

Gilmer Ga.

Graphic by: Laura W. McNutt

Getting There

› Three-fourths of all workers in the region drive alone to work. › Less than 10 percent of workers carpool, a figure that includes roommates and spouses who drive together. › Only about one-half of 1 percent of workers use public transportation to get to work. › About 2.9 percent of people in the region work from home. Source: Southeast Tennessee Development District

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The study says that traffic, employment, and commuting patterns reinforce what is already known about the area’s economy: access to businesses and jobs is extremely limited across large extents of the region, forcing workers and consumers to travel long distances along a small subset of roads in order to reach their destinations. “While this arrangement is not necessarily unique to the...region, it does reinforce the importance of improvements and maintenance to transportation infrastructure,” it says. Poole, who works for the Tennessee Department of Economic and Community Development, says it’s important to help rural counties recruit new business and spur existing companies create jobs so people who live in those communities don’t have to commute so far. “It gives an opportunity for those folks,” he says. Poole says he continues to commute to Chattanooga from Calhoun because he wants to raise his children there. “We may [move] at some point, but we’ve got a son in middle school and we don’t want to disrupt him,” he says.

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A PROPOSED CORRIDOR K roadway from Cleveland to near Dillsboro, North Carolina, could help, but it faces an uncertain future. Corridor K could correct the deficiencies of the existing Highway 64. According to the Tennessee Department of Transportation, Corridor K could provide a safe, reliable and efficient east-west route from just west of the Ocoee River to state Highway 68 near Ducktown, Tennessee. Mobbs says that when he looks at Polk County, people need to travel to work. “There needs to be a good transportation system so people can get from Polk County to the work centers and home in a reasonable amount of time,” he says. Mobbs says the Thrive 2055 regional, 40-year planning effort that’s underway can help. The vice chairman of the Thrive 2055 oversight panel says the 16-county, three-state area is geographically congruent as well as economically. According to the SETDD report, the greatest concentration of businesses in both size and number are around Cleveland and Chattanooga, followed by Athens and Dayton, Tennessee, and LaFayette and Ringgold, Georgia.

AUGUST 2013 • EDGE

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Shared Resources QUOTABLE • BRIEFCASE • POWER TOOLS • CLOSER

QUOTABLE

Bobby Harper

Blake McPhyerson

Director of sales, Wingate by Wyndham in Cleveland, Tennessee

River operations manager, Cherokee Rafting in Ocoee, Tennessee

“We send out emails after people have rafted “The most vital method to us is that anyone who with us, thanking them for their business books with us who has a rewards membership and asking them what we could do betor booked through a third party receives ter. We’re always looking to change an email survey after every stay. We things if we need to, and I perview that feedback on a daily sonally try to be as friendly basis and we also have a report and helpful as I can be that shows what is trending to put each group with positive or negative on a the right guide for the variable scale from 0 to QUESTION Ocoee River. We’ve 5 so we can see what learned to expedite we’re improving month OF THE MONTH the check-in to month or year to process and cater year. We have over our services for 200 reviews on Trip each group.” Advisor right now.”

Where and how do you seek customer feedback?

“We have a comment log in our historical exhibit. Also, we speak with our guests personally and through phone calls and emails. Our customer feedback often gives us ideas for new rides and attractions. Some of our food choices are inspired by our guests’ needs and wishes such as healthier options. We really listen to our customers in every aspect of the park.”

Talley Green

Spokeswoman, Lake Winnepesaukah near Rossville, Georgia

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EDG E • AUGUST 2013

“We do online surveys which we send out to people who are already on our email list for coupons and stuff like that, and we have surveys that get sent out after you chat with somebody on our website. We have a third party that rates us as well. They call the store and ask for something, and then rate how the customer service was.”

Todd Clark

Store manager, Rock/Creek in Chattanooga, Tennessee


Who is on the move?

Shared Resources BRIEFCASE

Jack Bowen

Kasie Plekkenpol

Tom Eddy

Sarah Yarnell

Marty Mauldin

EMJ Construction has promoted Jack Bowen to director of operations.

BlueCross BlueShield of Tennessee has named Kasie Plekkenpol director of new product strategy.

Tom Eddy of UBS Financial Services in Chattanooga has been added by the NFL Players Association to its Registered Financial Advisor Program.

The Chattanoogan hotel has hired Chattanooga native Sarah Yarnell as the hotel’s new catering sales manager. She will specialize in weddings and social events.

The Chattanooga affiliate of Habitat for Humanity recently hired Marty Kollmansperger Mauldin as its ReStore operation manager.

Helen Hixon

Chris Upchurch

Casey Knox

Anthony Bussey

Dennis Culver

Realtor Helen Scott Hixon has joined Upward Realty.com where she will work with a team of real estate specialists.

Georgia Labor Commissioner Mark Butler recently presented an EXCEL certificate of leadership development to Chris Upchurch, manager of the Georgia Department of Labor’s Dalton Career Center.

The American Advertising Federation of Chattanooga has installed Casey Knox as president of its 2013-14 board of directors. She is director of communications and public relations for AREA203 Digital.

Anthony Bussey, a Northwestern Mutual financial advisor based in Chattanooga, is receiving the Northwestern Mutual Financial Security Co.’s Emerald Award for helping clients achieve financial security.

BlueCross BlueShield of Tennessee has promoted Dennis Culver to the position of vice president and chief audit executive.

AUGUST 2013 • EDGE

63


Shared Resources POWER TOOLS

Social Media + P BY ELLIS SMITH

An employee at one of your stores said something nasty to a customer. The customer’s buddy caught it all on his cell phone and instantly uploaded the video to YouTube, where it’s been spending the last 15 minutes going viral. Now the company Facebook page is blowing up with hundreds of angry comments, and Twitter users are planning a protest at the company’s headquarters tomorrow. It’s 11 p.m. on Friday. What do you do?

T

HAT’S A TOUGH QUESTION, but social media guru Jon Moss says it’s important to have a plan. “Tell the truth and be contrite,” Moss says. “If you made a mistake, you screwed something up, go fix it and then be transparent.” This can be a difficult pill to swallow for many companies, many of whom panic when a spotlight shines on an unkempt part of their house. The old methodology was to deny, deny, deny. But today’s online consumers, in many ways, are more sophisticated than those of yesteryear, and have access to far more information, Moss says. “I think a lot of these cases that come into the national spotlight, those that address it quickly and don’t try to dismiss it and admit they erred and apologize sincerely, to me that seems to be one of the most effective ways to diffuse the situation, versus denying it ever happened and then being confronted by the proof coming out through pictures and video,” he says. The key is not to be surprised. Have a disaster plan in place. Pick out who’s in charge. What if it’s 4 a.m. on a Sunday? Should somebody wake the company CEO?

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EDG E • AUGUST 2013


Shared Resources POWER TOOLS

+ Plan = Success Censored “SOME ROGUE TWEET that doesn’t gain any traction is probably not something where you need the CEO to come on YouTube and start gushing and crying, but if it’s someone that has a strong sphere of influence and their followers start retweeting, that’s something where it’s part art and part science to figure out who’s handling the PR and reputation management at that point,” Moss says. “Oftentimes you’ll see the company wait to react until Monday morning if something happened Friday night, and it will blow up in your face. If you’re serious about this, you may have to be on a conference call with C-level executives at 3 in the morning.” Good planning starts well before a disaster ever occurs, and hopefully catches it ahead of time. Companies like Reputation.com or a local social media company can monitor a businesses’ online reputation and alert managers when there’s an incident brewing. Horrible customer experiences often begin as an interaction where the company has a chance to make the situation right, but blows it.

“If someone walks into your place of business and said, ‘I have a complaint,’ would you ignore them? No, you need to address it and respond,” Moss says. “And not in a condescending or cold way, you need to insert the proper amount of emotion, so that they perceive that there’s a person responding and not a faceless bureaucrat.” For some interactions, it may be worth taking a discussion out of the spotlight. Calling a customer on the phone or sending a personal email is often a more personable way to solve a problem, and it takes away the motive or need for public attention grabbing. Some commenters, however, are inevitably going to be so mad that they won’t be satisfied by traditional outreach. The typical reaction by most social media managers is to delete these comments. But that may not always be the best move, Moss cautions. “The knee-jerk reaction is ‘We’ve got to delete that, someone said something bad about us,’ but often what you’ll find is you’ll see other customers or fans of a page, they’ll jump in and they’ll start defending the company and product,” Moss says. “Often times, I think companies’ reaction to a bad post or derogatory comment, what they do after that can be a bigger indication of them as a company than the initial problem that started it.”

Moss’ Three Rules for Social Media Success

1. 2.

Start monitoring online mentions of your brand, either with a paid social media manager or with software.

Create a social media PR disaster plan, so you have quick, actionable steps you can take, and show you can access the company hierarchy so that the chain of command is reduced to the point where quick decisions are possible. Don’t wait until Monday morning to fix a problem that happened Friday night.

3.

Be transparent. The public is not as easily fooled as it used to be and it’s harder to pull the wool over the eyes in this day of modern communications.

AUGUST 2013 • EDGE

65


Shared Resources CLOSER

Engineering Drive Ben Ubamadu, Chattanooga State’s vice president of economic and community development

PH O T O G R A PHY BY DOUG ST RIC KL A ND

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EDG E • AUGUST 2013

When Ben Ubamadu was considering his next career move in the automotive industry in 2005, he was recruited by companies in both Tennessee and New York. He first took his preg-

nant wife and daughter to the Poconos in New York, only an hour’s drive away from where the sister of Ubamadu’s wife, Chinyere, lives in Brooklyn. But they were greeted in New York with a November rain, snow and sleet storm. The next week, Ubamadu and his family visited Chattanooga for the first time on a near perfect November day that included a trip to the Creative Discovery Museum. “I knew we were going this direction when we joined the museum that very day,” Ubamadu recalls. Eight years and two jobs later, Ubamadu is still in Chattanooga. After serving as engineering director for the Heil Co., for four years and starting his own consulting firm, the automotive engineer was hired last September as vice president of economic and community development for Chattanooga State Community College. Ubamadu, a Nigerian-born son of a college professor, brings more than two decades of business experience to his new academic job. “This is where the ‘ready to work’ effort really hits the road,” Ubamadu explains about Chattanooga State’s customized training for more than 100 area companies a year, including the college’s academies established for Volkswagen in Tyner and Wacker at its main campus. “We will customize our training to fit any employer needs. There is no one size that fits all.”


Editor’s Note EDGE MAGAZINE Jason Taylor

President & Publisher

Reshaping geography

Mark Jones

Target Publishing Director

Dave Flessner Editor

Chris Zelk

Design & Production WRITERS

L

ocated within a day’s drive of more than half of the U.S. population, the Chattanooga-Atlanta region has long been a hub for rail, truck and air travel. Railroad lines, interstate highways and the world’s busiest airport in Atlanta helped grow some of America’s biggest trucking, warehouse and distribution companies in Chattanooga and the biggest airline, Delta Air Lines, in Atlanta. But while location is key for travel, shipping and distribution, the Internet is quickly changing the role of geography in exchanging ideas and moving intellectual property and services. The delivery of information is determined largely by the speed of the Internet link, rather than the distance between people. No place in America offers faster speed for web connections than Chattanooga, which in 2010 became the first American city offering gigabit-persecond Internet links. As Ellis Smith and Tim Omarzu report in this month’s Edge, the “gig city” is growing into a “gig region” with the aid of local cities and Uncle Sam. New high-speed links are being built in Tullahoma, Tennessee, and in 11 counties in Northwest Georgia and Northeast Alabama. With such service, digital transmissions move 200 times faster than basic broadband service and workers and consumers can transact business from nearly anywhere.

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EDGE • AUGUST 2013

But as Shelly Bradbury tells us, location still matters in what we eat. Gaining Ground, a 3-year-old grow-local food movement in Chattanooga, claims consumers gain both a healthier diet and healthier economy when they buy food grown in local farms and gardens. Food can be fresher when it is grown closer to home. Geography and living patterns also still determine how much time we spend in our cars. Mike Pare reports on how roads across our region carry local workers across many city, county and state lines. Most of that travel is alone in a car with the typical worker spending between three to six hours every week driving back and forth to work. The mountains and rivers that create the beauty of our region also have limited the path and speed of many highways. But the new information highway is not so constrained and the Chattanooga region appears to be setting the pace.

Dave Flessner Editor

Ellis Smith Shelly Bradbury Mike Pare Tim Omarzu PHOTOGRAPHERS

Dan Henry Doug Strickland Shawn Paik Angela Lewis John Rawlston C.B. Schmelter Connor Choate Jay Bailey GRAPHICS

Laura W. McNutt CIRCULATION

Casandra Crosby 423-757-6709

SALES EXECUTIVE

Julie Harris

423-757-6615 jharris@targetpubgroup.com

EDGE magazine is published on the first day of each month by the Target Publishing Group, a division of the Chattanooga Publishing Company. Opinions expressed by contributing writers and editors are not necessarily those of the publisher, editor or EDGE magazine. Reproduction of the whole or any part of content herein is prohibited without prior written consent from the publisher. The publisher will not accept responsibility for submitted materials that are lost or stolen. Copyright 2013 by: EDGE Magazine 400 East 11th Street Chattanooga, TN 37403 Phone (423) 757.6505 editor@meetsforbusiness.com


AT THE OFFICE • SALES PITCH • HOSPITALITY • TOURISM • ON THE BLOCK • FINANCE WORKPLACE • INDUSTRY & MANUFACTURING • LEADERBOARD

Start-Up

“This can be bigger than practically any other economic development opportunity in almost any other industry in this region.” Jeff Pfitzer

“My mom’s recipes are where it’s at.” Tara Taymore

“All communities, if they’re smart at all, are trying to differentiate themselves from other communities.” Lane Curlee

“What sexual harassment was in the 80s and 90s, workplace violence is in this decade.” Randy Spivey

Good Taste

Celebrity chef Jernard Wells opens Haute Cuisine in East Brainerd. ON PAGE 14

Safe and Secure Georgia Winery draws tourist traffic off I-75. ON PAGE 16

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EDG E • AUGUST 2013

Area companies are developing ever more sophisticated measures to avoid workplace violence. ON PAGE 22


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August 2013 Edge  

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