March 2011
BUSINESS LAW
Company Spotlight: TEAM Industries
Intellectual Property pg 38
pg 18
Community Spotlight:
ECONOMIC DEVELOPMENT
Young West Fargo community growing quickly
The Value of Higher-Wage Jobs in the Local Economy pg 24
pg 42
TECHNOLOGY Finding a Company that Best Fits your Needs pg 26
MONEY
What is the Velocity of Money pg 59
LEADERSHIP
Creating and Sustaining Change pg 16
Hebron Brick Company – Bricks across America pg. 16
SALES/MARKETING
5 Rules for Branding in the Digital Age pg 22
pg 48
‘Low stress’ in Aberdeen pg. 28
HIGHER EDUCATION MARKETING
Higher Ed and businesses working together pg 28 CHANGE SERVICE SERVICE REQUESTED REQUESTED CHANGE PRSRT STD STD PRSRT U.S. Postage Paid Paid U.S. Postage Fargo, ND ND Fargo, Permit #684 #684 Permit
www.prairiebizmag.com
PRAIRIE BUSINESS BUSINESS MAGAZINE MAGAZINE PRAIRIE PO BOX BOX 6008 6008 PO GRAND FORKS, FORKS, ND ND 58206-6008 58206-6008 GRAND
What’s Next (in Technology?) pg 34
CONTENTS
Volume 12 No. 3
6
From the Editor’s Desk
8
Women in Business
8
Matthew Mohr
10
Prairie News
14
Prairie People
16
Leadership and Management Creating and Sustaining Change
18 20
Company Spotlight: TEAM Industries Tag line is driving innovation - Innovation has kept TEAM Industries alive when others have folded after the nation’s recession ended.
Question/Answer Stimulating the economy to keep students at home
22
Sales/Marketing 5 Rules for Branding in the Digital Age
24
Economic Development The Value of Higher-Wage Jobs in the Local Economy
26
Technology Finding a Company that Best Fits your Needs
28
Cover Story: Higher Education
34 38
Cover Story: Marketing
40
Higher Ed and businesses working together – Higher Ed institutions are building relationships with different businesses to both improve programs and also provide workforce needs for the businesses in this relationship.
What’s Next (in Technology?) – Marketing groups have to even be more creative in helping businesses handle a hefty appetite for information.
Companies serious about (coal) reclamation Traveling throughout North Dakota, many would never know that certain areas were once coal mining operations. And that is just what state officials are hoping coal reclamation is able to accomplish.
Cover Story: Business Law Intellectual Property: Identifying Business is important decision
Dakota Rising Assisting rural entrepreneurs
42
48
52
More oil could mean less outmigration More oil being pumped out of the Bakken could mean that the state could see the population growth reversing the 70year trend of outmigration.
Community Spotlight: West Fargo, ND Young West Fargo community growing quickly
Next Month
56
Investing in Trade to the North
58
Viewpoint
59
Money
On the air
What is the Velocity of Money and How Does it Impact Home Loan Rates?
Join Prairie Business magazine Editor Alan Van Ormer and host Merrill Piepkorn on
62
By the Numbers
4 Prairie Business
March 2011
In April, Prairie Business magazine will showcase Women in Business, as well as discuss how manufacturing is making a comeback and point out why LEED design might be costly up front, but might be worth the cost down the road.
Tuesday, March 8 at 3 p.m. on any Prairie Public radio station to hear more about the March cover story. To listen to Prairie Public, visit www.prairiepublic.org/radio/hear-it-now.
. y t i l i b a i l re
DISABILITY
In times of low unemployment, business cannot afford to lose key personnel. Should a highly-skilled, productive employee incur a disability, business owners and employers need to know that they have resources at their disposal to help keep that person on the job. What DVR can bring to the table for business can have a positive impact on the bottom line. Our featured services are not just employment driven, they cam help business access a growing market segment. ~ Harley D. Engelman, DVR Business Relations/Marketing Director
RECRUITMENT ! RETENTION ~ RESULTS D I V I S I O N O F V O C AT I O N A L R E H A B I L I TAT I O N Recruitment & Retention
ADA Resources
Assistive Technology
for more information visit
or call us at
nd.gov/dhs/dvr/
1(800)755-2745
Rural Services a partner in
From the editor’s desk
For daily business news visit prairiebizmag.com
An SBA Award Winning Publication
Abundant enthusiasm! As I was sitting at my computer the other day thinking about what I wanted to say at a Fargo Rotary Club meeting in February, the first thing that came to my mind was many of the success stories that I have heard about in my travels around the region. And that was evident once more during our monthly radio program with Prairie Public entitled ‘Hear It Now.’ hat was even more prevalent was the enthusiasm that these business leaders show when talking about their company or business. I know that everything isn’t peaches and cream and there are businesses and people that are just getting by from pay check to pay check. But I do believe that if these people had a chance to just sit down and talk to the people that are enthusiastic about their job and business, it will brighten their outlook just a little bit. And that is a good thing. And hopefully that is what will happen when you read the cover stories in this issue about higher education and marketing. There is excitement in the relationships that these groups have with each other; be it our higher learning institutions and the businesses they collaborate with or marketing and advertising agencies and the companies they do their best to get the word out about. I think, more importantly, both groups enjoy the challenge of developing cutting edge programs that benefit our region. These people just do not quit! And that is what is going to keep Minnesota, North Dakota, and South Dakota moving forward into the future. That is also why we did not feel the pain of the recession as much as most of the remainder of the country did. People in this region do what they do best – keep plugging away trying to make things better for the next crew that takes up the torch!
W
Mike Jacobs, Publisher Alan Van Ormer, Editor Scott Deutsch, Sales Manager Tina Chisholm, Production Manager Beth Bohlman, Circulation Manager Kris Wolff, Layout Design, Ad Design
SALES MANAGER/NATIONAL ACCOUNT SALES:
Scott Deutsch
SALES:
Brad Boyd
701.232.8893 Grand Forks/Fargo/Moorhead/northwestern MN
800.641.0683 Bismarck-Mandan/ west central ND/north central SD
John Fetsch
701.232.8893 Fargo/Moorhead/eastern ND/western MN
Jeff Hanson
605.271.4446 Sioux Falls/southern SD/southern MN
EDITOR: Alan Van Ormer Editorial Advisors:
701.232.8893 avanormer@prairiebizmag.com
Dwaine Chapel, Executive Director, Lake Area Improvement Corporation; Bruce Gjovig, Director, Center for Innovation; Lisa Gulland-Nelson, Communications Coordinator, Greater Fargo Moorhead EDC; Dave Haan, Director of Public Relations and Digital Development at Lawrence & Schiller; Dusty Johnson, Chief of Staff for South Dakota Gov. Dennis Daugaard’s office; Brekka Kramer, General Manager of Odney; Matthew Mohr, President/CEO, Dacotah Paper Company; Nancy Straw, President, West Central Initiative Prairie Business magazine is published monthly by the Grand Forks Herald and Forum Communications Company with offices at 808 3rd Ave. S., Ste. 400, Fargo, ND 58103. Qualifying subscriptions are available free of charge. Back issue quantities are limited and subject to availability ($2/copy prepaid). The opinions of writers featured in Prairie Business are their own. Unsolicited manuscripts, photographs, artwork are encouraged but will not be returned without a self-addressed, stamped envelope.
Subscription requests: Free subscriptions are available online to qualified requestors at www.prairiebizmag.com.
Address corrections: Prairie Business magazine PO Box 6008 Grand Forks, ND 58206-6008 bbohlman@gfherald.com
Online: www.prairiebizmag.com Clarification: The photo on page 32 of the February issue is a facility near the Tesoro Corp. oil refinery, however, it is actually a power plant located just north of the refinery. 6 Prairie Business
March 2011
Women in Business
Patience, listening skills key to success f Nancy J. Libersky didn’t have the patience and good listening skills, her job as the Minnesota District Director for the U. S. Small Business Administration would be just that much tougher. “On a normal day, I receive important information from many different directions whether in person, telephone or email, and while trying to retain this information it is important to learn to categorize,” she says. “Otherwise, you would be completely overwhelmed and not be able to put one foot in front of the other.” Libersky has been the Minnesota District Director for almost one year. She has worked with the United States Small Business Administration for 21 years. She started in Colorado, but for the past 17 years has been working predominately with the international trade programs as Regional Manager for International Trade Programs in Minneapolis, MN. The SBA provides loans, loan guarantees, contract, counseling sessions, and other forms of assistance to small businesses through its four programmatic functions:
I
NANCY LIBERSKY
Minnesota District Director U. S. Small Business Administration
access to capital, entrepreneurial development, government contracting, and advocacy. Because she enjoys management, Libersky feels her current job is a perfect fit. “I have worked hard to obtain management skills and learn from the best,” she says. “I feel very fortunate that I have been able to work with some highly skilled managers who have taught me how to manage.” The major challenge is fulfilling requirements with a smaller staff. “As our office becomes smaller and smaller, it is very hard to cover our outreach, training, organization, and networking,” she states. One of her enjoyments as the Minnesota District Director is working with a struggling small business owner who is ready to quit and to be able to share her expertise and see the business grow. “People put their heart, soul, and money into their efforts, but need that little extra advise and knowledge to get them through,” she explains. PB Alan Van Ormer - avanormer@prairiebizmag.com
Business Advice
Watch your trends nce a business closes its books for the year, management has the opportunity to look at the trends in their financial statistics. Reviewing year end financial ratios over a 10 year span gives a picture of where the business is performing and what areas deserve more attention. Ratios which give a good picture of performance include yearly sales changes, average gross profit margin, inventory turnover, accounts receivable days outstanding, yearly expenses compared to sales, net profit as a percent of sales, sales, and profit per employee. Looking over each of these statistics should give business owners a good idea of their true performance and success. If comparable national or regional numbers are available, use them to help guide business decisions. When evaluating businesses, a close look at the ratios will provide a solid understanding of what has happened recently. Two very key ratios are accounts receivable days outstanding and average inventory. If a business shows a big jump in accounts receivable, it could signal the business has taken on much higher risk or poor pay customers, which will eventually be costly. Should inventory jump up,
O
8 Prairie Business
March 2011
MATTHEW D. MOHR CEO, Dacotah Paper Company mmohr@dacotahpaper.com.
it often indicates the business is holding on to a lot of unwanted/unusable product. Perhaps your sales have declined the last few years. Should this be the case, your average gross profit should be inspected. If you purposely left low profit margin business and your margin is up, you’ve succeeded. If you haven’t changed your approach, lost sales but gained margin, it’s possible you have priced yourself out of the market or have a competitive threat you have missed. Each ratio tells a story similar to sales and gross profit change. Knowing your numbers, especially trends over time, is extremely helpful to a business owner. PB
Prairie News
Press releases and photos about business news and events in North Dakota, South Dakota and western Minnesota can be e-mailed to avanormer@prairiebizmag.com for consideration
NORTHERN TIER NETWORK LINKS STUDENTS TO GLOBAL RESEARCH
‘PATHWAYS TO BUSINESS GROWTH’ LAUNCHES
Participation in the Northern Tier Network is connecting North Dakota researchers with scientific work applicable here in North Dakota and around the world, according to a recent report. High-performance computing provides scientific tools and enables new types of collaborations not possible just a few years ago. Examples include: four-dimensional modeling simulation to better understand tornado formation using supercomputers located several states away, real-time sharing of electron-microscope work with scientists thousands of miles away, and rapid transfer of very large data that would take 10 days at the internet speed available for home use compared to the Northern Tier times of 1 ½ hours.
Enterprise Minnesota is launching ‘Pathways to Business Growth,’ a program to help Minnesota-based manufacturers develop and implement innovative strategies that lead to growth. The program is one of 22 projects nationwide to receive funding from a $9.1 million program through the National Institute of Standards and Technology and Manufacturing Extension Partnership. Enterprise Minnesota received a $515,000 grant award to help make Minnesota a leader in manufacturing. ‘Pathways to Business Growth’ will help 25 Minnesota manufacturing companies implement a series of integrated solutions that ignite innovation and growth. Enterprise Minnesota will work with 10 companies in year one, 10 companies in year two, and five companies in year three. The project goal is to deliver a 20 to 1 return on investment for participating companies.
SOUTH DAKOTA PUBLISHES STATE’S FIRST POLICY GOVERNING SOCIAL MEDIA The State of South Dakota has created and published South Dakota state government’s first Social Media Policy. South Dakota’s Secretary of State Office is adding Facebook, Twitter, and You-tube and other social media tools as part of a comprehensive effort to enhance voter education and to inform people of the mission of the Secretary of State.
CONSORTIUM ADDS MINNESOTACROOKSTON The New Century Learning Consortium (NCLC), founded at the University of Illinois Springfield, has added the University of Minnesota Crookston as its 10th member. The Consortium is designed to assist universities in implementing high quality, large-scale online and blended learning programs. The Consortium plans to expand to 14 institutions by May 2011. Activities include developing a clearinghouse of online classes where there are excess capacity, shared research projects, shared IT expertise to support building infrastructure capacity, and peer support at the upper administration, dean, and faculty member levels.
SANFORD HEALTH RECEIVES GRANT FOR MAMMOGRAPHY SERVICES Patients of Sanford Health will benefit from new, stateof-the-art mammography equipment, which is possible through a grant from The Leona M. and Harry B. Helmsley Charitable Trust. The Leona M. and Harry B. Helmsley Charitable Trust have awarded Sanford Health $2,060,151 to upgrade its mammography services. The grant will be used to purchase state-of-the-art digital mammography units, replace radiologist workstations, and upgrade the mammography room and patient waiting area. 10 Prairie Business
March 2011
South Dakota public universities generate approximately
$1.97 billion a year in long-run annual economic impact to South Dakota from a state investment of
$176 million Source: South Dakota Board of Regents Economic Impact Report.
Preliminary estimates indicate North Dakota employment expanded on a year-over-year basis in December. Employers reported an estimated
6,400 more jobs when compared to December 2009,
▲ a
1.7% gain.
Source: Job Service North Dakota
MATERIALS HANDLING MAGAZINES RANK SIOUX FALLS BEST FOR NEW FACILITY Recent articles in three national magazines dedicated to shipping, warehousing, and materials handling illustrate the clear superiority of a location in Sioux Falls for that industry. Using the data collected by the Boyd Company of Princeton, NJ, Modern Materials Handling, Logistics Management and American Shipper have all compared the costs associated with a warehousing and distributing center in Sioux Falls with a similar facility in fifty locations in a wide variety of regions. The study’s three highest cost locations are San Jose/Sunnyvale, CA, Orange County, CA, and Toronto with total operating costs averaging $12.6 million per year. The lowest cost warehouse site is Sioux Falls, with total operating costs averaging some $7.6 million per year. The warehouse operating costs are scaled to a hypothetical 175,000 square foot facility employing 75 non-exempt workers and shipping over-the-road to a national U.S. market.
COOPERATIVE RECEIVES USDA LOAN Northern Plains Electric Cooperative, based in Carrington and Cando, will use a $740,000 United States Department of Agriculture loan to help Edgeley-based Allied Agronomy construct a 30,000 square foot warehouse for its agricultural products. The warehouse will be located near Jamestown and the project is expected to retain an estimated 48 jobs and create six new jobs. Under the conditions of the “revolving loan,” USDA provides the funding at zero-interest. Northern Plains, in turn, will pass the funding through to Allied Agronomy. Northern Plains Electric Cooperative is the largest of the distribution electric cooperatives in North Dakota. Serving approximately 10,935 members from south of Jamestown to the Canadian border, the cooperative works to provide members with electricity and to improve the quality of rural life. Northern Plains distributes electricity supplied by Basin Electric Power Cooperative and the Western Area Power Administration.
Left: Left:Shawn ShawnBrooking, Brooking,CNM; CNM; Ellen EllenLorange, Lorange,DO; DO; David DavidBillings, Billings,MD MD
Center Center Back: Back: Tim Tim Bedell, Bedell, MD; Heather Bedell, Bedell, MD MD Right: Right:Wendy WendyFlansburg, Flansburg,CNM CNM Center Center Front: Front: Margaret Nordell, MD; MD; Gloria GloriaBerg, Berg,CNM; CNM;James JamesBozeman, Bozeman,DO; DO; Carol Carol Schaffner, MD
Lori LoriDockter, Dockter,PA-C PA-C
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Prairie News
Press releases and photos about business news and events in North Dakota, South Dakota and western Minnesota can be e-mailed to avanormer@prairiebizmag.com for consideration
RAPID CITY HOSPITAL RECEIVES ACHIEVEMENT AWARD Rapid City Regional Hospital has received the Get With the Guidelines® Heart Failure Gold Plus Performance Achievement Award from the American Heart Association. The award recognizes the health care providers for their excellence in the treatment of patients with heart failure. The award is given only to hospitals achieving 85 percent or higher adherence to all indicators for two or more consecutive 12-month intervals and achieving 75 percent or higher compliance with four of nine quality measures to improve quality of patient care and outcomes.
$3 MILLION TO UPGRADE BUSING SERVICE
In North Dakota, the following occupations are expected to have very high job growth in the next 10 years: truck drivers nursing aides
SILICON PLAINS RECOGNIZED FOR QUALITY SERVICE Silicon Plains, LLC, a regionally-based company specializing in business computing and software development, has been recognized for its commitment to quality service and professionalism by the leading trade association for the world’s information technology (IT) industry. The Computing Technology Industry Association (CompTIA) has designated Silicon Plains, LLC as a CompTIA A+ Authorized Service Center™. The CompTIA Authorized Service Center™ program recognizes computer, network, server, printer and document imaging support businesses that employ certified technicians. These certifications are recognized around the world and throughout the IT industry as the foundation-level skills standards for technology professionals.
construction laborers licensed practical and licensed vocational nurse tellers landscaping and grounds keeping workers
Houston Engineering, Inc. has been recognized by the American Council of Engineering Companies of Minnesota with an Engineering Excellence Grant award for its role in providing the City of Browns Valley with a solution to the flooding problem that has plagued the community for several years. The Engineering Excellence Awards program recognizes innovative engineering projects in Minnesota that are beneficial to both the community and the engineering profession. Houston Engineering was recognized because it provided innovate applications to create a protection plan for a 100-year flood in Browns Valley. 12 Prairie Business
March 2011
SOUTH DAKOTA CONTRACTOR WINS STATE AWARD Upper Plains Contracting, Inc., of Aberdeen, SD, received the Build South Dakota Award (Category III) by the Associated General Contractors of South Dakota, Highway-Heavy-Utilities Chapter. The award is given to the best highway-heavy-utility construction project in the state over $2 million. The award recognizes state-of-the-art advancement, excellence in project management and client services, innovation in construction techniques or materials, community relations, and sensitivity to the environment. Upper Plains Contracting received the award for a Highway 85 project in Butte County resulting in the replacement of an antiquated span of highway.
Source: Job Service North Dakota
From 2008 to 2018, the total number of workers in South Dakota is projected to increase by 41,365 to a total of 510,000 workers. Source: South Dakota Department of Labor.
HOUSTON ENGINEERING RECOGNIZED
Federal grants totaling more than $3 million have been awarded to Fargo, ND, and Bismarck, ND, to upgrade local bus service. Bismarck will receive a $2 million grant from the Department of Transportation to upgrade the bus terminal in the community, as well as make improvements on the bus fleet. Fargo Parks District is expected to get $1 million to upgrade the bus fleet that services local senior citizens.
YOUNG PROFESSIONALS RECOGNIZE SUNDOG AS BEST PLACE TO WORK The North Dakota Young Professionals has chosen Sundog in Fargo as the 2010 Best Place to Work. About half of Sundog’s staff is comprised of young professionals. The company has developed several programs that help team members share industry expertise, exchange ideas, and inspire creativity. The Best Place to Work Awards, started in 2008, are a reflection of the creativity and innovation that businesses offer Young Professionals.
Prairie People
Please e-mail photos and press release announcements of hirings, promotions, awards and distinctions received by business leaders in North Dakota, South Dakota and western Minnesota to avanormer@prairiebizmag.com for consideration.
MAHAR PROMOTED AT CORELINK
PUC CHAIR NAMED TO LEADERSHIP COMMITTEE
Scott Mahar has been promoted to assistant vice president of Program Management at CoreLink Administrative Solutions in Fargo, ND. He is responsible for CoreLink’s Program Management Office and Service Management. Mahar joined CoreLink in April 2010 as manager of the CoreLink Program Management Office.
South Dakota Public Utilities Commission Chair Steve Kolbeck has been appointed as a Co-Vice Chair of the National Association of Regulatory Commissioners Committee on Telecommunications. The Committee on Telecommunications provides a venue for state commissioners to analyze trends in the telecommunications sector and share best regulatory practices.
STEVE KOLBECK
SCOTT MAHAR
BLADOW BECOMES PROFESSIONAL ENGINEER
GABE BLADOW
Gabe Bladow has become a registered professional engineer in North Dakota. He is a 2006 graduate of North Dakota State University with a Bachelor of Science degree in Civil Engineering. He had five years of experience before joining Houston Engineering, Inc.’s Fargo office in 2009. The registration requires four years of progressive experience in the engineering field, and passing an eight-hour exam relating to the principles and practices of engineering.
PRENDERGAST JOINS CLICK RAIN Chris Prendergast has joined Click Rain, Inc. as an online marketing strategist. He graduated from Purdue University and is Google Analytics certified. He will manage analytics, email, search and social marketing projects for various clients.
CHRIS PRENDERGAST
PIETILA ELECTED CHIEF OF STAFF
STEPHANIE SCHOENROCK
ASHLEE LINK
JENNIFER NELSON
KK BOLD EMPLOYEE CHANGES Stephanie Schoenrock has been promoted to the new position of Account Services Director. In addition, Ashlee Link has joined the company as a new account executive and Jennifer Nelson has been added to the web development and graphic design team. Schoenrock had served as Director of Regional Operations and an account manager. Link recently served as the Public Safety Information Coordinator for the North Dakota Department of Transportation. Nelson previously worked for Tao Interactive. 14 Prairie Business
March 2011
MICHAEL PIETILA, MD
Michael Pietila, MD, Yankton Medical Clinic, P.C., has been elected the 2011 Chief of Staff for the Avera Sacred Heart Hospital Medical Staff. Dr. Pietila takes over for Dr. Charles Cammock, Yankton Anesthesiology, who served as the 2009 and 2010 Chief of Staff. Dr. Pietila, board-certified in pulmonology, internal medicine and critical care, is a graduate of the USD School of Medicine and completed his residency at Mayo School of Graduate Medical Education. He has practiced in Yankton since 2006. The Chief of Staff leads the medical staff organization consisting of 63 active/associate physicians and 58 courtesy/consulting physicians. Dr. Pietila also serves as an ex-officio member on the Avera Sacred Heart Board of Directors.
Leadership/Management
Creating and sustaining change Strong organizations continually evolve. Change is unavoidable. ffective, positive change hinges on three elements: Do your employees trust the company’s leaders? Is there a culture of two-way communication and organizational alignment where decisions are made at the lowest practical level? Can you identify and deploy “change agents” at all levels and departments? Change agents tend to be proud of the company, are overachievers and possess good leadership and followership skills. Change agents make it possible to “tell the change story” more effectively at all levels of the organization. Are there metrics in place? Change oriented goals need to be documented, measurable and mutually agreed upon at all levels. Positive outcomes – even small “wins” – should be communicated and celebrated. Many leaders believe they can drive change through sheer will. While effective change does start from the top, smart leaders leverage their best, brightest, and most motivated employees. These “A” players will drive positive
E JOHN SWEDEEN President, StarMark Cabinetry (Sioux Falls, SD), a division of Norcraft Companies LP (Eagan, MN) john.swedeen@ starmarkcabinetry.com
change throughout the organization. Once goals are met, managers and employees become confident in their abilities to anticipate, react, and manage change. This is the real payoff from implementing sustainable change in the organization: evolving from an environment of tactical change to a culture of continuous improvement. In a continuous improvement culture, cross functional teams identify areas of improvement and utilize proven processes to fix them. Small improvements become lay-ups and while larger initiatives will take longer and require more resources, they don’t disrupt day-to-day activities. Creating and sustaining change can be accomplished in the right environment and by reinforcing these elements: • Leveraging trust and two-way communication • Deploying multi-level, cross-functional change agents • Metrics must be developed and documented • Positive change can truly invigorate an organization. Managing the process properly can result in significant financial and cultural gains. PB
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Company Spotlight
TEAM Industries
Ted Coder, production operator at the TEAM Industries facility in Audubon, MN, works on the first gear counter shaft in a Harley Davidson motorcycle transmission system. TEAM Industries provides innovative solutions for power-train, engine, suspension, and other components. (Photo by Alan Van Ormer)
Tag line is driving innovation Innovation has kept TEAM Industries alive when others have folded after the nation’s recession ended. “
18 Prairie Business
e suffered through the recession like everybody,” explains Tony Passanante, Senior Director, Marketing and Strategic Planning for TEAM Industries. “In 2008 we had to lay off 400 people, but came back like gang busters and 2010 was one of the best years ever.” Passanante adds that the key to business in today’s world is innovation and that is what helped TEAM Industries after the recession. “With all the foreign competition, we have to be ahead of the game with respect to our customers and what our customers’ customers want,” he states. “We try to anticipate what our markets want. We are trying to create demand on things that we see are needed.” TEAM Industries is a design and manufacturing company that designs the driveline systems for small or alternative vehicles like ATV, electric vehicles, and golf carts. There are almost 1,000 employees located in the following Minnesota cities: Cambridge, Audubon, Bagley, Park Rapids, Detroit Lakes, as well as Andrews, NC. Working with several OEMs, the company has contributed innovation solutions for power-train, engine, suspension, and other components. The technology
W
March 2011
includes design engineering, research and development, rapid prototyping, testing, manufacturing, and assembly. Services include ductile iron machining, shaft machining, high pressure aluminum die-casting, right angle and parallel axis gear/spline manufacturing, high speed aluminum machining and full assembly of complete driveline systems. At almost 1,000 employees, Passanante believes the company drives economic development for the smaller communities their companies are located in. “In this part of the region we make an impact,” he says. “The vision of our founder, Donald Ricke, was to grow good, technical paying jobs in northern Minnesota.” Marketing Manager Jason Rasmussen says the company tries to stay on the cutting edge of the market. “We have been with some of the customers for years,” he explains. “The sales cycle takes time. We our building a better reputation for our brand every year. “In some aspects we are still new to the game,” he adds. “We are still building that brand awareness and coming up with more innovative and better products. Customers are seeing that we are innovative leaders.” Passanante adds that the company needs to pursue the
transportation industry; in particular, electric cars. Right now TEAM Industries are marketing EV axle line by redesigning and beefing them up for small electric vehicles.
export trend and sell globally. Heading into 2011, he also has seen what he calls a nice pick up. “There has been steady, sustained growth for the last 14 months. There is confidence coming back,” he explains. “A
“We realize that to beat the competition we need to know our markets and our customers markets better,” says Tony Passanante, Senior Director, Marketing and Strategic Planning for TEAM Industries. certain amount of our competition got knocked out. Those left standing have to pick up the slack.” Another concern is that competition in China is stronger. On the contract manufacturing side, the Asian country has started to take a chunk of TEAM Industries business, Passanante says. “We have to deal with that,” he continues. “For our designed products we are buying some components out of China that we’re using for our product. When we compete with them we know we’re not going to beat them on low price. Our advantage is going to be innovation and service and building more complex materials and getting good customer service.” Now, the company is growing its intellectual property portfolio. To date, they have developed a dozen patents on drive trains. “We offer new products that they can’t get elsewhere,” Passanante explains. “A lot of OEMs we deal with come to us and say we have the plan for this vehicle and we want you guys to figure out how to package your product and develop the driveline system to do that. Opportunities in the future include participating in the electrification of the
11 y 20 Januar
“We have innovative driveline technologies,” Passanante says. “Long term, we are going to be developing a brand new technology to improve range and improve hill climbing in electric cars.” Most importantly, TEAM Industries is working to stay ahead of the game. “We realize that to beat the competition we need to know our markets and our customers markets better,” Passanante concludes. PB Alan Van Ormer - avanormer@prairiebizmag.com
TEAM Industries Facts: as Motek Engineering ✗ Headquarters is located in ✗ Started and Manufacturing in Bagley, MN Cambridge, MN
Industries has more than ✗ TEAM 850,000 square feet of manufacturing space within 6 different locations.
Industries has partnered ✗ TEAM as solution providers to John Deere, Ford, Dana, Eaton, CNH, Polaris, Ingersoll-Rand, Textron, Honda, Kawasaki, and Yamaha.
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Sales Manager Grand Forks/Fargo/Moorhead northwestern MN 701.232.8893 p 701.280.9092 f sdeutsch@prairiebizmag.com
Account Manager Bismarck-Mandan west central ND/north central SD 800.641.0683 p 701.751.3773 f bboyd@prairiebizmag.com
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Account Manager Fargo/Moorhead eastern ND/western MN 701.232.8893 p 701.280.9092 f jfetsch@prairiebizmag.com
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19
Q & A: Gardner
Stimulating the economy to keep students at home The Campus President at Rasmussen College in Mankato, MN, believes that the school will continue to grow as a premier provider of higher education by serving the diverse needs of communities in Minnesota and North Dakota, as well as students and employers nationwide. oug Gardner is the Campus President for Rasmussen College, overseeing the leadership and operations of three of the 21 Rasmussen College campuses in Bismarck, Fargo-Moorhead, and Mankato. Rasmussen College provides an educational opportunity that speaks to real-world needs through high quality academic and student service offerings. “We prepare students to apply practical skills in their field within the community,” Rasmussen explains. “We deliver and assess these outcomes using rigorous standards and the latest innovations in technology.” Rasmussen College was founded 110 years ago in St. Paul, MN and has 21 campuses across the Midwest and Florida. The college offers market-relevant Bachelor’s and
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THE GARDNER FILE Name: Doug Gardner Title: Campus President Company: Rasmussen College Age: 54 Hometown: Mason City, IA Years with the College: 20
Associate’s degrees in the following: School of Allied Health, School of Technology and Design, School of Education, School of Business, School of Justice Studies, and the School of Nursing. Gardner took time to address educational issues and how the college helps deal with those educational issues.
What are 3-5 issues in education in Minnesota/North Dakota that concern you? North Dakota and Minnesota college graduates historically leave the state. Our goal as a contributor to our communities is to help them build and stimulate their economies. We work to identify the most promising careers in our communities and prepare students to be successful contributors to the development and growth of those economies. It is great news that there are an increasing number of technology companies relocating to North Dakota and Minnesota, which has created a demand for more qualified employees. As a private college, Rasmussen College is able to quickly respond to market needs, such as these, and our School of Technology and Design is working hard to keep up with the demand and create successful employees to fill these positions. In addition to rising needs for technology professionals, the healthcare profession is increasing its demand. From the aging population of Baby Boomers to healthcare reform, there is going to be a pressing demand for these professionals. Both the Rasmussen College School of Nursing and the School of Allied Health are responding to these growing demands.
How are you dealing with concerns in education? -Rasmussen College produces college graduates who are more likely to be permanent residents of their communities. -Rasmussen College engages with community employers to proactively offer programs to fit the needs of all industries, including technology. In North Dakota specially, we offer an Associate’s degrees in Information Systems Management and Multimedia Technologies to meet these demands. -Rasmussen College offers a Bachelor of Science degree 20 Prairie Business
March 2011
in Healthcare Management, and has recently added an online “RN to BSN” option (for our Minnesota residents), to our already established offerings in Allied Health, such as Health Information Technician, Medical Office Assisting, Medical Laboratory Technician, Surgical Technologist.
What are 3-5 things people need to know about Rasmussen College? -Rasmussen College…Is regionally accredited by the Higher Learning Commission, which is the same organization that accredits universities such as North Dakota State and the University of Minnesota. -Offers unparalleled support to its students including our 24/7 Edvantage support system, no cost online and oncampus tutoring, and onsite learning centers. -Is an innovator and a leader in online education. For more than a decade, Rasmussen College has been offering online learning in an interactive, market-leading platform. -Provides career placement assistance. In fact, more than 90% of Rasmussen College graduates reported that they are working in a career as a result of their degree or are continuing their education. -Offers employer-driven curriculum through programmatic advisory boards. We design our curriculum based on what the top employers in our communities are telling us.
Let’s turn positive signs into positive results. The economy seems to be getting back on track. Let’s take those positive signs and build on them. Seize new opportunities. Cover new ground. Let’s take action. Your business. Our bank.
Where do you see Rasmussen in 5-10 years? Still doing what we do best, providing a quality education, working with students to help them obtain the careers they desire, listening and responding to our communities and most importantly changing lives in a positive way just as we have done for the past 110 years.
Where do you see Minnesota education going in the future? I foresee that higher education in Minnesota, and across the country, is going to be more value-driven. President Obama has called for more Americans to go to college, and these students, many of who are considered non-traditional, are going to demand value for their education when they make these investments of time and money. I believe we will see fewer people electing to go to college for a social or coming-of-age experience, and more people who recognize the career value in a college degree. These students will expect schools to provide market-relevant curriculum and services that prepare them to be the leaders of tomorrow. They will expect more from their educations than just lectures and tests; they will expect a return on their investments. PB
Call 1-800-908-BANK or visit Bremer.com.
Member FDIC. ©2011 Bremer Financial Corporation. All rights reserved.
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Sales/Marketing
Five rules for branding in the digital age. “You don’t own your brand. Consumers do.” This basic tenet of marketing was true thirty years ago and it’s certainly true today. he digital age has given people a greater voice and more influence in the client-consumer relationship. This unprecedented level of consumer empowerment has forced companies to listen, learn and adapt to a new reality.
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Remember, the fundamental rules of branding still apply. Brands are built through consistent positive experiences with a product, service or company—just as they always have been. But these days, the experiences are openly shared. You can’t control what your customers say, can be a part of the conversation. PB
The reality is this: There are thousands of online communities with millions of people (Facebook, LinkedIn, Twitter, YouTube, blogs, chat rooms, etc.) sharing their thoughts, opinions and experiences on a daily basis. The only way your brand will survive in this socially connected environment is to follow a new set of rules.
MARK SMITHER Vice President, Strategic Director, Paulsen Marketing, Sioux Falls, SD mark.smither@ paulsenmarketing.com
22 Prairie Business
1.
Be transparent: You can’t hide behind your advertising any more. You must invite more social interaction and communicate your intentions openly and honestly.
2.
Be authentic: You need to behave more like a real person and less like a faceless corporation. Make an effort to engage in more real-time dialogue with your customers.
3.
Be relevant: If you’re not providing something of interest that will benefit the consumer, you’re not making a connection or building a relationship. Create content that adds value.
4.
Be consistent: Once you start, you can’t stop. Your digital presence is a living entity that requires constant care and attention. You should be monitoring, responding and generating content on a regular basis.
5.
Be patient: It’s not about reaching 1,000,000 people in order to sell to 100. It’s about reaching one person who reaches 100 people who reach 1,000 and so on. That takes a lot of hard work over a long period of time.
March 2011
Source: Odney
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23
Economic Development
The Value of Higher-Wage Jobs in the Local Economy Are all jobs created equal? tating the question another way, if your community established a goal to create $100,000 in new annual payroll, would you rather have ten workers who are paid $10,000 per year (roughly equivalent to part-time minimum wage jobs at 25-30 hrs per week), four at $25,000 ($12/hr full time), two at $50,000 ($25/hr), or one at $100,000? I conducted an unscientific survey within my own community over the past several months and the majority of respondents voted for the two at $50K scenario, mostly because this equated to a single wage earner beating the regionâ&#x20AC;&#x2122;s household average, thus raising the standard of living in two households, versus just one. Below are some of their other stated reasons, along with a couple of my own, for growing higher-wage year-round jobs in the community: 1. Creation of more disposable income for local retail and recreation spending (all year long). 2. Creation of more wealth, which employees will have
S
BENJAMIN SNOW President, Rapid City Economic Development Partnership bsnow@ rapiddevelopment.com
â&#x20AC;&#x153;
24 Prairie Business
March 2011
available to invest in local services (financial services, insurance, and real estate). 3. Keeping more of the talent produced in our regionâ&#x20AC;&#x2122;s schools/universities closer to home. 4. Increasing tax revenues all year (sales and property) due to higher money flow in the region. 5. More resources are made available to help local charities and non-profits while the needs of public assistance and social services are reduced. 6. Intangible benefits for workers, such as more certain futures, less financial anxiety and ultimately more economic freedom. As we work to improve the condition of our local economies by striking a healthy balance between entrylevel, skilled-trade and professional level jobs, let us remember that some jobs create more community wealth than others and the quality of the jobs being created is usually more important than the number of jobs. PB
Tourism
New Tourism Director wants to develop more relationships Jim Hagen is leading the second largest industry in South Dakota and also one that is very important to newly-elected Gov. Dennis Daugaard. e is passionate about the visitor industry,” states Hagen, who is the newly-appointed Secretary of the South Dakota Department of Tourism. Under Gov. Daugaard’s direction, the Department of Tourism is no longer under the umbrella of both Tourism and State Development. Although Hagen says he understands what Gov. Mike Rounds was trying to accomplish when he created the former agency, the Department of Tourism and State Development, Hagen also says it is hard to focus in any one area. “You couldn’t give fair play to other offices,” he says. Hagen started the job earlier this year and says he will have discussions with Gov. Daugaard on what direction to take the Department of Tourism in the future. “We are going to be very focused with our marketing keeping an eye on our economy and look at the trends of people taking trips closer to home,” Hagen explains. “In addition, we will continue to develop our relationship with our industry with
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different attractions and the tremendous success we have had with cooperating marketing programs.” As for the state of the tourism industry, Hagen has seen statistics pointing out that domestic trips are expected to increase by almost two percent in 2011. Mount Rushmore set a record of 18,000 visitors for a day in mid August and hotel occupancy was up in 2010. In addition, visitor spending was up 10 percent and tourists spent more than $1 billion for the first time ever. Challenges Hagen will have to deal with include the economy and increasing gas prices. “But we also see them as opportunities,” Hagen says. “We are at the point where we know where the bulk of our visitors are coming from. They are staying closer to home and we are adjusting accordingly. We will focus more on regional advertising, as well as developing industry packages that are cognizant of what families are looking for.” PB Alan Van Ormer - avanormer@prairiebizmag.com
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Technology
Finding a company that best fits your needs One of the most talked about topics in IT technology over the last several years has been managed services. The discussion of outsourcing or out-tasking IT responsibilities can be confusing since there isn’t one standard that applies uniformly to all companies. The one thing that technology companies can agree on is that there is no common agreement in the definition of managed services among technology companies or their clients. So how do you tame the “wild west” of IT planning? rudent financial decisions are driving the demand for outsourcing IT services and that demand has heated up dramatically in recent years.
P
FIRST, There needs to be a mutual alignment of expectations and defined outcomes. Because there is no standard definition for services covered in a managed services agreement, it is imperative both parties are clear on what services are being provided. It should state clearly how those services match with a client’s expectations and capabilities of the provider to perform those services, with a reporting component; a straightforward method to measure performance and outcomes that are agreed upon.
SECOND,
WES HENRY President, Insight Technologies whenry@greatinsight.com
An evaluation of managed service will need to establish the value proposition. How do managed services compare to hiring internal personnel to perform the same tasks? As business owners, our first inclination is to look to inside resources for answers. Today, in the increasingly complex world of technology, a strong cost rationale can be developed for outsourcing to a trusted partner. A good managed services company can help construct a pro forma with the justification for that decision. Put them to the test.
FINALLY,
RICK DAVIS Chief Marketing Officer, Insight Technologies rdavis@greatinsight.com
26 Prairie Business
There should be a written agreement defining mutual responsibilities. Both parties need to have “skin” in the relationship. When a business hires a full time employee and expects that person to fulfill on their job description. A strong, trust-based relationship with a managed services company should have the same underpinnings. A March 2011
written agreement detailing the responsibilities of each party serves as that foundation. It should have enough detail so that both companies can be assured they are managing toward a common goal. Trust, but verify! In the end, engaging a managed services provider is like most other business relationships. You want to find a company that you feel best meets your needs and is compatible with your business philosophy. The range and depth of technology a business needs to stay competitive will only continue to grow. Hiring a “team” of savvy experts may serve your company well. Managed Services is certainly an option worth considering. PB
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COVER STORY
HIGHER ED
Relationship Building 101:
Higher Ed and businesses working together he higher education system not only educates students for careers in various fields after graduation, but also builds relationships with different businesses to both improve programs and also provide workforce needs for the businesses in this relationship.
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“Relationships are valuable,” states Wayne Baumberger, facility manager for Caterpillar Black Hills Engineering Design Center in Rapid City, SD. Caterpillar has forged a relationship with, not only South Dakota School of Mines and Technology and Western Dakota Technical School, but also various other business in the region. Dr. Frank Moseley, Associate Professor of Energy Economics and Finance at Minot State University in Minot, ND, believes that lining up good corporate citizens is important to higher education. “We are providing them future employees,” he explains. “They are interested in supporting programs because our people is an input to their future. They have a high invested interest in having a quality program.”
MEETING
MEETING ENERGY NEEDS
28 Prairie Business
Before the Bakken hit western North Dakota, young people were leaving the state because there were not all that many opportunities. Now, Minot State University, with the help of many energy companies, has designed a program that prepares students to meet the financial analysis needs of the energy industry on the Great Plains. “North Dakota students are going to have great opportunities,” Moseley says. The program started in 2010 and allows students to earn a Bachelor of Science degree in Energy Economics and Finance. In its first year, 25 students are taking classes. The hope, with support from the energy industry, that number could reach 100 students. Moseley says there are only two or three programs in the entire nation of this nature. “We’re emphasizing financial spreadsheets, economics, and financial analysis. The students will have a good knowledge of energy economics.” Moseley says it is important to remember that the energy industry is supporting the program by helping fund scholarships and money for an energy library, as well as travel so students can present student papers. Intervention Energy, LLC, is a non-operated exploration and production company, based in Minot, ND, that works side-by-side with many companies who are working in the Bakken and John Zimmerman, Managing Member for the
Minot State University students studying energy economics and finance pay close attention to their textbooks, while MSU Associate Professor of Finance Frank Moseley leads the discussion. (Photo courtesy of Minot State University)
company, sees the program having direct relevancy to our business model. “Many companies in the Basin will find this program useful,” he states. “We’re primarily focused on financial analysis and sound economic decisions, which fit very well with the program.” Not only is Zimmerman a member of the Advisory Board that is helping craft the program, he and others involved in the Bakken are participating by providing students information in the classroom setting. Roger Nash, who is the Engineering Manager for Pumpco Energy, says the impact of the program is that it is the initial foundation that the university is building in the industry. “We’re going to be able to train students that want (continued on page 30)
March 2011
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FOR PROGRAM INFORMATION, become an MSU VIP by creating a personalized “My Main Street” page at www.minotstateu.edu/graduate. Or contact the MSU Graduate School: Dr. Linda Cresap, Dean, Graduate School 701-858-3250 or 1-800-777-0750, ext 3250 e-mail: graduate@minotstateu.edu
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29
COVER STORY to get involved in the industry,” says Nash, adding that this program will also provide opportunities for North Dakotans to stay working in the state. Pumpco Energy is a company that fractures the formation and props it open. And Pumpco Energy, like many other companies in the industry, believes relationships are important. “Part of the oil fields responsibility is to be good member of community,” Nash states. “We support programs and we are devoted and loyal
too community. It is being a neighbor. This is just what good neighbors do.” Zimmerman agrees that relationships are important. “It keeps what is happening in the classroom more practical,” Zimmerman adds. “Any time you marry what students are learning in the classroom and what is happening in the actual business world, that is going to make a program relevant for students and allow them to be impactful players to the companies they go to work for.”
FORGING AHEAD WITH DIESEL TECHNOLOGY
FORGING
Not too long ago, farm kids who liked working with hands and getting dirty were most likely to get involved in diesel equipment. Today, that has changed because of the shortage of technicians. M State’s diesel equipment technology program has allowed employers to find the quality individuals to handle the highly technical aspects of heavy construction, trucks, and tractors, as well as railroad and oil field work. This program would not have survived without the donation of a four-wheel drive tractor in the early 2000s and the forging of a relationship with industry leaders like Case New Holland. M State was the first technical college to form a partnership with Case New Holland in the nation. Sam Miller is based out of Georgia and is Case New Holland’s service instructor, as well as the leader of the North American College Partnership Program. He says the relationship has been great because of the quality of instruction and the backing they have had through the college administration. “They have provided the industry with technicians who go to work and hit the ground with a good basic knowledge with electrical, hydraulic, and computer systems,” he explains. “They can begin to be profitable right off the bat.” The partnership started in 2005. Today, there are 30 students in first and second-year programs at the Moorhead, MN campus. Typically between 40 and 50 percent of the students involved with Case New Holland are in the program. Case New Holland dealership purchases tools, provides paid internships, uniforms for school and work, as well as tuition assistance. In all, Case New Holland picks up 75 percent of the tab. Not all students involved with the diesel equipment
technology program are part of Case New Holland. The goal of the program is to educate and have employees ready for entry level positions at dealerships in the region. Dave Eliason, Jacob Gibbs, Ashland, WI, and Joshua an instructor in Summer, Chokio, MN, troubleshoot a the program, starting system on a Case JX109OU says the program tractor. Both students are involved in the Diesel Equipment Technician program at provides the M State – Moorhead. (Photo by Alan employer with a Van Ormer) well-trained workforce. “The systems are so complicated they need somebody to have this specialized training,” he says. As for Miller, he says Case New Holland is in a support role and does not get into the day-to-day teaching activities. “We provide the faculty with any training they need, the tools and resources and equipment to train with,” he explains. “In return, they help us in any partnership with dealerships in Moorhead. The dealership base drives this thing.” The relationship is important because of the economic crunch involving all technical schools. “In addition, we are keeping hometown people in hometown jobs,” he says. “We make sure students coming from this area go back to work in that community.”
BUILDING
BUILDING AN ENGINEERING DESIGN CENTER
30 Prairie Business
Like Minot State University, Caterpillar has developed several relationships in the Rapid City area in order to make the engineering design center work. Baumberger states that those relationships are valuable and are win-win situations for everyone involved. For example, Caterpillar is aligning itself with Western Dakota Tech to develop future employees with the mechanical design and drafting experience needed to advance the design center. Also, Caterpillar has a long history of March 2011
recruiting talented employees from the South Dakota School of Mines and Technology and that continues today. “The School of Mines has helped facilitate discussions and open doors for us to make the design center happen,” Baumberger says. South Dakota School of Mines and Technology President Dr. Robert Wharton states the university has a relationship with Caterpillar that has provided them quality individuals that go into the workforce. “As a
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prairiebizmag.com
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COVER STORY
Wayne Baumberger, facility manager for Caterpillar Black Hills Engineering Design Center in Rapid City, SD, and other members of the design center are forging relationships throughout the Black Hills region. (Photo courtesy of South Dakota School of Mines & Technology)
company, they are very active in promoting professional development,” he says. “We have embraced that and make it part of our culture. We’re educating and preparing leaders in engineering and science.” The engineering design center provides design, modeling, and detailed drafting for other entities inside of Caterpillar. They are a part of the larger service organization of Caterpillar that handles research and development. Wharton agrees that the relationship benefits Rapid City in economic development and quality of life issues. “We are all partners,” Wharton explains. “It is a huge benefit in a lot of ways for us to be part of Caterpillar who has singled us (Rapid City) out to locate one of their major design centers. It says a lot about the quality of the School of Mines.”
CAPTURING
CAPTURING FIELD IMAGERY The Center of Excellence based at Lake Region State College in Devils Lake, ND, has developed a partnership with several businesses in the region to design and develop higher technology products that growers can use when aiming for accurate placement of nutrients for crops. One of those partners is Agri Imagis Technologies, who provides the Internet-based software platform to capture all field imagery that the Dakota Center for Technology Optimized Agriculture programs uses for research. Being a Center of Excellence, the program is focused on rural entities and business development. “We take risks with firms that might not otherwise have access in an academic environment to test their ideas,” states Paul Gunderson, Director of the Dakota Center for Technology Optimized Agriculture. Agri Imagis Technologies is a remote sensing and GIS company that provides mapping analysis for crop vegetation via satellites. Working in precision agriculture, Agri Imagis provides data to the farm industry, producers, dealers, consultants, and corporate companies. Lanny Faleide, President of Agri Imagis Technologies, says having a partnership with the Center of Excellence has helped to develop tools to educate the farm public in the use of new technologies. “Being we are into new technologies we have to prove to industries
and users that it works,” he explains. “Universities act as a creditable buffer in proving technology works. We need to partner with a university to get the word out and change techniques to the ag community.” The funding the company received through the partnership has helped the company move to another level and expand its employment base from five people (when the company started 17 years ago) to 14 people today. “It has helped us to become a catalyst to develop new tools for the ag community,” Faleide says. The Center of Excellence finds the partnership important because it needs to work with the private sector to generate high value jobs. “Our hope is that whatever we do will lead to useful employment in rural areas,” Gunderson states. “A partnership helps bring ideas to campus so that students and faculty can develop initiatives. With our partnerships, the Center of Excellence is ready to launch an array of web based training modules that growers can use.” PB Alan Van Ormer - avanormer@prairiebizmag.com
Dr. Paul Gunderson, director of the Dakota Center for Technology Optimized Agriculture rides along in one of the Center’s answer farm fields collecting and monitoring the information received from a yield monitor enhance with GPS tracking. (Photo courtesy of Lake Region Community College)
32 Prairie Business
March 2011
MARKETING
COVER STORY
What’s Next (in technology?) arketing and advertising agencies have had to change the way they do business. “Three years ago they were thinking we have to do something,” says Pat Finken, Owner of Odney. “Now it is a mandate.”
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clients. “We are always bringing new ideas to the table to capture audiences where they live,” states Robin Temple, Director of Message Delivery. “Think about the day in the life of an audience member – that’s where we need to reach them.”
In today’s society, businesses are hungry for as much information as they can find to stay ahead of the curve. This means that marketing groups have to even be more creative in helping businesses handle this hefty appetite for information. Odney has at least two dozen clients in some state of social media development or execution of social media. “The online and social media element has really permeated the need for what we do in every aspect,” Finken states. “In every age group it has to be part of the mix. We haven’t replaced traditional media but it has certainly become an important and powerful tool in the list of channels that we can use to communicate with people.” Robert Sharp, CEO of Robert Sharp and Associates in Rapid City, adds that this is the new brick and mortar. “It is not going to be a brochure,” he states. “It is an active part of the people’s decision making process. This trend in marketing is going to be around to stay.” Libby Hall, a specialist in social media strategy and planning for the Flint Group, headquartered at Flint Communications in Fargo, ND, explains that new technology helps to make sure businesses are talking to the right people. “There is a huge shift to opt-in marketing and building relationships with customers, through social media and online technology,” she says. LaRoy Kingsley, President of KK Bold, says social media is the topic on everybody’s agenda. Three years ago five percent of the businesses in the United States were involved in social media. Today 66% of the businesses using social media as an integral part of their marketing program started doing so within the past 20 months. “It is such a big deal because of the explosion of information and people’s demands for instant gratification,” he explains. “The most important thing we try to express to our clients you need to have a plan and social media needs to be a component within your complete marketing plan. It needs a lot of attention and a lot of caring.” Lawrence & Schiller, based in Sioux Falls, SD, keeps a constant pulse on new technology opportunities for its 34 Prairie Business
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From Anchor Marketing’s standpoint, this shift is less about technology and more about what the technology does. “It is more about transitioning from being one-way communication to being two-way communication,” states Jay Mindeman, who is the Creative Director for Anchor Marketing, headquartered in Grand Forks, ND. “The consumer, the viewer, gets to vote on how they want to be communicated with. We look at that first and what technologies can accomplish that.” Anchor Marketing is evolving into the new marketing world by listening to what target group they are trying to reach. “How is this target audience learning about our product? We need to find out what media is getting their attention. That is the direction we need to go,” he explains. “We need to find out what the audience wants first and then tailor the message to them.” At Flint Communications, part of the attitude of the organization is to engage employees in the growth. “That means having a staff that is always passionate,” says Chris Hagen, Public Relations Director. “Not only do we hire specialists in all disciplines and areas of communications but we invest in continuous education across the Flint Group to stay on top or even ahead of what’s next.” As social media becomes part of a new marketing agenda, Mindeman is concerned about the advertising content. “It is relevant because the more content the internet needs, unfortunately the more the quality of the content seems to be compromised,” he says. “That mean good content – and marketing – will stand out. Before I thought the Internet was going to take over Cable TV. Today, I think the Internet is going to become Cable TV.” Clearly the world is changing rapidly, Finken says. “There is no question that the way to stay on top is to find the most successful way to use new and traditional media to achieve our clients’ goals,” he explains. “With the rapid
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COVER STORY
LAROY KINGSLEY President KK Bold
evolution of these media, one of the challenges is to make sure we have a high degree in competency in all these areas. The impact of online on the traditional also forces us to continually re-educate ourselves on how we can best use these tools for our clients.” Finken is a proponent of first understanding human nature and effective behavior. “Once we’ve done that, then we need to find out how we can best reach out and communicate with the target audience in the most efficient, effective manner with the budget available,” he explains. “That is where you blend different media.” Like many marketing and advertising groups, KK Bold gives its staff freedom and flexibility, as well as mixing in with ongoing training. “We have great clients who want to push the boundaries,” Kingsley says. “Content can influence a large group of people and can do it very quickly.” KK Bold continues to hire people with a lot of desire. “They push us,” Kingsley explains, adding that in 2000 the company had one server that was half full. Today, there are six servers. “We have to make
that investment in new technology to be competitive.” Sharp says Robert Sharp and Associates saw this coming because of his involvement with an alliance of marketing and communication agencies. The alliance was formed with 10 agencies that went to seminars to learn about new media and marketplaces. The companies stay in touch throughout the year. “It makes us stronger and it makes us wiser,” he explains. “It gives us a network.” Part of it is about building a website that is optimizing information for people when they do a search. “Database development is where we are going,” he says. “The purpose of all that is lost if we don’t gather some data about that customer.” Temple adds it is all really pretty simple. “Don’t be overwhelmed by all the technology options,” she says. “Focus on those that are most applicable to your target audience. Yet, always keep an eye on the future and what happens after what happens next.”
PB Alan Van Ormer - avanormer@prairiebizmag.com
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BUSINESS LAW
COVER STORY
Identifying business is important decision n today’s world, people are very brand conscious. Strolling down the aisles of your local grocery you are confronted with a multitude of choices for the same type of product. Yet, your decision as to what type of pop, soap, chips, etc. is largely made before you even arrive at that section of the store. Why? Because you already know, based on your previous experiences, what brand of pop
I
good trademark. But, you may be wondering how you go about doing it. The internet has made the searching of trademarks much easier. It is also for this reason that greater scrutiny is being paid by and to the competition. Consequently, it is critical that you conduct a search or ‘due diligence’ before you adopt and promote your new mark. You must exercise reasonable care to make sure that
Much like selecting the name of your children, how you identify your new business is one of the most important decisions you will make. Ideally, your “trademark” will serve to distinguish your goods or services from those of your competitors. This distinction, over time, will result in “goodwill” and cause your clients or customers to associate the quality of your goods or services with your name.
TROY LEONARD Trademark Attorney/Shareholder, Woods Fuller Schultz & Smith Sioux Falls, SD troy.leonard@woodsfuller.com
38 Prairie Business
(e.g. diet Coke®), soap (e.g. Dial®), chips (e.g. Ruffles®) you prefer. It is this customer preference and loyalty that constitutes the goodwill represented by a trademark, and most importantly, it’s what keeps customers coming back for more of the same. For your trademark to distinguish your goods or services from those of your competitors, it should be unique and non-descriptive. The strongest types of trademarks are those that are “fanciful”, that is those for which no dictionary definition exists. Examples would include Xerox®, Exxon®, Google®, and Verizon®. Even the use of one’s own name may not be permitted if a senior user of the same name with similar goods or services already exists. On a related note, far too often, businesses select names which are descriptive of their goods or services because they tell potential customers about that business. This practice is discouraged and unnecessary. The proper way to use and advertise your trademark is as an adjective followed by a generic term for your goods: Folgers® coffee, Doritos® corn chips, Kleenex® tissues, Papa Murphy’s® pizza, Skippy® peanut butter, or Rolex® watches. Over time, customers will associate your brand with your goods or services without reference to the latter. Best of all, they may even be willing to pay a premium because of their perception of a higher quality or value. By now, you can see the importance of selecting a
March 2011
your new mark (or one slightly different but confusingly similar) has not already been used by someone in a similar field. Once you are satisfied that your mark is not confusingly similar to another mark, you should then consider registering it with the United States Patent & Trademark Office (USPTO) or your Secretary of State. Given that most commerce today is interstate (if not international), registration at the federal level with the USPTO is recommended in most cases. PB
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Entrepreneurial Spirit
Dakota Rising:
Assisting rural entrepreneurs Through a new program called Dakota Rising, South Dakota Rural Enterprise is providing grant monies and business development activities for rural entrepreneurs. Program Coordinator Kristi Wagner says the program is modeled on a “garden concept.” ne objective is to encourage communities to look within themselves to identify entrepreneurs and support them,” Wagner says. “Typically, economic development focuses on going outside a community to bring business in. South Dakota’s rural communities aren’t likely to see new businesses come in.” Applicants accepted to Dakota Rising receive monetary support and human resources to help advance their business. They’re required to utilize $2,000 of the grant money for professional self development. Peg Austin, who purchased a full-service bakery in Spearfish in 2009, is a Dakota Rising Fellow. She used a portion of the $10,000 Dakota Rising grant to purchase a walk-in freezer and refrigerated pastry case and develop a website and advertising plans. The program is helping her transition to 100% gluten-free products. “When I heard about Dakota Rising it sounded like a wonderful educational opportunity,” Austin says. “All the Fellows meet with their cohort throughout the year. We learn through interacting and sharing our experiences.” In addition to Spearfish and Edgemont, Dakota Rising is available to entrepreneurs in Walworth, Campbell, Corson, Ziebach, Dewey, Marshall, Day and Roberts counties. “When the program was initiated in 2008, we had 19 applications from communities,” Wagner says. “From those, four communities were selected.” Each community site developed a local resource team, produced resource fair, assisted entrepreneurs with the Fellows application and developed local resources for entrepreneur support. A $5,000 grant helped cover costs. Upon recertification, each community was eligible to receive $5,000 from Dakota Rising for two additional years. Businesses applying for a Fellowship are required to share their community site’s zip code. Accepted businesses must also be past the start-up phase of operation and be willing to learn and grow. “Every community
O “
LORETTA SORENSEN Owner, Prairie Hearth Publishing, LLC sorensenlms@gmail.com
40 Prairie Business
March 2011
and Fellow is required to make a three-year commitment to the program,” Wagner says. “Once that pilot period is over, we hope those communities will continue with the program on their own.” Mark Stein, at Watertown’s ESCO Wholesale Sign Manufacturing was able to establish a new online presence through Dakota Rising. “We make mostly electric signs and sell them in several ways,” Stein says. “We install and service local signs from cradle to grave. Signs sold wholesale throughout the United States are installed and serviced by companies in other communities.” Stein’s move to offer church and school signs through the Internet brought him to Dakota Rising. Before the program, he established a website for his sales. However, results were less than satisfactory. “I worked with a program mentor very experienced in web-based business,” Stein says. “He helped us scrap the original website and for a fully redesigned site.” Austin appreciates access to some of South Dakota’s “best business world entrepreneurial minds.” “Benefiting from their advice and listening to how they handled their challenges has already been an excellent teaching tool and source of motivation,” she says. PB
At U.S. Bank, we are committed to supporting the Dakotas. It’s where we work and where we live. We’re also dedicated to being your local financial partner with the strength, support and service you deserve. Imagine what you can do when you have the power of US working for you. U.S. Bank is one of America’s strongest banks. Our strengths have never been more aligned with the needs of our communities, and our stability makes us even more qualified to serve you. As our nation recovers, we will use that strength to make our communities stronger too. We are well capitalized, open for business, and poised to do what we’ve been doing since 1863 – making sure the financial dreams of every U.S. Bank customer take flight with a bank that is safe, strong and ready to work for you. Visit or call a U.S. Bank branch today! Delton Steele Regional President Fargo, ND 701-280-3553
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John Snustad Regional President Grand Forks, ND 701-795-6175
Tim Hennessy Regional President Bismarck, ND 701-222-6286
Community Spotlight
West Fargo
Young community growing quickly A relatively young community happens to also be one of the fast growing communities in North Dakota. est Fargo, ND, had just under 15,000 residents in 2000 and in 2010 that number has jumped to 26,000. If trends continue, as many as 45,000 people could be living in the community. To keep up with the growth, community leaders have developed a comprehensive plan, as well as preparing for economic growth. “The metro area and state is certainly doing better than the national economy,” states Mayor Richard Mattern. The city has seen new single and multi-family homes being built in the last two years, new businesses entering the market, and activity on West Fargo’s Main Street. “It is a business-friendly environment,” states Brad Jacobson, President of Western State Bank in West Fargo. Jacobson grew up in the community. “We’re always looking to help businesses grow and expand existing businesses. We have a well-known education system that makes it easy to attract employers and employees to the community.” Such big hitters as DMI Industries, who is becoming North America’s leader in wind tower manufacturing; Bobcat Company, a leading provider of compact equipment for construction, landscaping, agriculture and grounds maintenance; as well as Titan Machinery, the leading Upper Midwest dealer of a diversified mix of agricultural, construction, and consumer products, is part of that mix.
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JEFF VOLK President/CEO Moore Engineering
LARRY WEIL Planning Director, West Fargo
Jeff Volk, President and CEO of Moore Engineering, says his company continues to grow slowly and with that it allows the company to average 100 employees on staff, which also provides an impact for the community. Moore Engineering also handles the engineering services for the city of West Fargo. New construction has also been a focal point in West Fargo. In 2009, more than 240 housing units were constructed. Also, the city adopted an incentive that would allow first-time homebuyers to take advantage of an exemption up to $150,000 of the building value of a new home for two taxable years after construction is completed. This coincides with the school district, which is the most rapidly increasing district in the state. The West Fargo Public Schools boast a 95 percent district-wide graduation rate, which is one of the highest in North Dakota. Also, overall district enrollment grew by 22 percent between 1996 and 2006. Planning Director Larry Weil believes community leaders have been visionary. “We struggled for many decades with flood issues,” Weil states. “In the early 1990s a diversion facility became a reality. Prior to that 60 percent of our community was in the flood plain.” And the growth that West Fargo is experiencing could not have happened without the Sheyenne Diversion. For example, building permits increased one percent between (continued on page 44)
42 Prairie Business
March 2011
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Community Spotlight
West Fargo
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WEST FARGO BUSINESS INCENTIVES
(continued from page 42)
2009 and 2010. In 2009, there were 523 building permits issued for a $57.8 million of valuation, while in 2010, both increased to 645 building permits issued and $58.4 million in valuation. Over a 10 year period, West Fargo has seen an average annual growth in population of 8 percent. The FargoMoorhead Metropolitan Council of Governments estimates the 2010 population at 24,430. In five years, it is expected to reach 27, 840, and in 10 years 29,680 people. In that same 10 year period, housing projections are expected to increase from 9,254 in 2010, to 10,667 five years later, and 11,549, 10 years later. In addition, annexations of land over the last several years provide West Fargo with opportunities and challenges. Industrial use grew 40 percent between 1999 and 2006, with much of that growth occurring north of Main Avenue. Business Development Director Dorinda Anderson
Renaissance Zone incentives Within specific identified area, this includes a property tax exemption and state income tax exemption/credit Property tax exemption This is used on a project specific application and can be granted up to five years. PILOT A payment in lieu of property taxes is granted on a project specific application Tax Increment Financing District Three open districts exist in the area and have been used strictly for infrastructure development.
DORINDA ANDERSON West Fargo Business Development Director
Photos courtesy of Officer Eric Wiinanen, West Fargo Police Department
44 Prairie Business
March 2011
us to get caught up with retail.” Mattern adds that the future is bright and sees growth opportunities in technology and downtown development. “West Fargo is a growing community,” he says. “It is a city that has a positive attitude. It is a proud city.” Jacobson, who was born and raised in West Fargo, says the community has always been known for its sense of community and pride of the community. “That is also true on the business side,” he adds. “I think of West Fargo as that hometown feel even though it has grown substantially.” PB Alan Van Ormer - avanormer@prairiebizmag.com
has worked to diversify the economy in West Fargo, which includes adding technology-based office building with six new technology businesses. In addition, community leaders feel that the opening for Veterans Boulevard will have an impact on the community. Volk says that proper planning of that whole corridor will bring good things to the community; but it is also important to manage the growth. “We are still considered retail poor,” Mattern says. “For so many years, West Fargo was considered a bedroom community, so retail didn’t keep up with population growth. We have added a lot of retail through the years, but have also added houses. It is important for
WEST FARGO LARGEST EMPLOYERS ▼
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West Fargo School District
Bobcat Company
Industrial Builders
Quality Boneless Beef
TerraMarc/Crary
Trail King/Red River Manufacturing
DMI
Cargill Oil Processing
Northwest Professional Color
Davon Press/Midweek/Pioneer
Strata Corporation
Midland Garage Door
Gremada Industries
Manufacturing Fargo Truss
Engineering. Consulting. C onsulting. Solutions.
Environmental % En vironmental % -53#4!"5232("# -53#4!"5232("# % .(2, .(2, ),*,&"!$,#2 ),*,&"!$,#2 Surveying % Surv eying % '32,5 '32,5 0,4"+5/,4 0,4"+5/,4 % 6+#(/(!3& % ',1 ',1 ),*,&"!$,#2 ),*,&"!$,#2 % GIS
Fargo Bismarck Grove Thief River Falls F argo | Bismar ck | Minot | Maple Gr ove | T hief Riv er F alls
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PROVIDING SOLUTIONS
Building a Bridge for Business In an effort to help Minnesota businesses reach their true potential, the Minnesota State Chamber of Commerce has started a 24-hour Web site entitled Business Connection. ithout services like ours, businesses don’t have time in the middle of the day to get answers to questions,” states Bill Blazar, Senior Vice President, Public Affairs and Business Development for ‘Grow Minnesota’, which is part of the Minnesota State Chamber of Commerce. “BusinessConnection cuts through all of that and gives them current responses to the questions they might have.” Lisa Workman, Executive Director, Fergus Falls Area Chamber of Commerce, says BusinessConnection is a good tool for business to use. “It is a valuable resource and tool even beyond our scope of experience here in the office,” she adds. “We now have a whole other resource to get them answers to their questions. I think the more people know about it the more they will use it. This is much more specific and direct.” The Web site was running statewide in February. BusinessConnection can handle inquires in three ways. First, companies can do a keyword search to get the information they are looking for. Second, a business can
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type in a specific question. Finally, companies can see what types of inquires the system has been asked. Darlene Macklin, Executive Director of the Worthington Area Chamber of Commerce, says that businesses have been contacting the Chamber. “We visit with local businesses on a constant basis and identify a certain percentage that we go out and make calls to,” she explains. “As a smaller chamber, we are able to work with our businesses. If there is some question we couldn’t answer, we would refer to our economic development director or BusinessConnection. It’s possible that those who contact Business Connection would not be aware they could contact local chamber or economic development.” BusinessConnection is a direct outgrowth of the state’s business retention program through Grow Minnesota! The state was visiting more than 800 businesses a year since 2003, but discovered in 2006 that only one out of eight of those visited were requesting assistance. PB Alan Van Ormer - avanormer@prairiebizmag.com
According to the Federal Reserve System’s most recent Summary of Economic Projections, the United States
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with gross domestic product rising between 3.0 and 3.6 percent and the unemployment rate falling to 8.9 to 9.1 percent. Source: Federal Reserve Bank of Kansas City.
46 Prairie Business
March 2011
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Companies serious about reclamation Traveling throughout North Dakota, many would never know that certain areas were once coal mining operations. nd that is just what state officials are hoping coal reclamation is able to accomplish. “People traveling will not notice land has been mined when fully reclaimed,” says Steve Van Dyke, Director of Communications for the Lignite Energy Council, a coalition that supports coal-based electricity. “The feeling I get from mining companies is that long after its gone, reclaimed land is going to stand as a testament as to how well they did. I think they take that job very seriously.” Jim Deutsch, Director of Reclamation and Abandoned Mine Lands divisions for the State of North Dakota Public Service Commission, agrees that the mining companies
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1970. Today, BNI Coal mines between 4 and 4.5 million tons of coal each year, which consists of slightly more than 200 acres per year. BNI Coal reclaims the same amount each year. Currently, there are four active mines in North Dakota. The largest surface mine in north Dakota, as well as the United States is the Freedom Mine, which produces 15 million tons per year, followed by the Falkirk Mine, 8 million tons per year, BNI Mine at Center, ND, 4 to 4.5 million tons per year, and the Beulah Mine, 3 million tons per year. Eighty percent of the coal produced is used to make electricity, while 20 percent of coal produced at the
“People traveling will not notice land has been mined when fully reclaimed,” says Steve Van Dyke, Director of Communications for the Lignite Energy Council. “The feeling I get from mining companies is that long after it is gone, reclaimed land is going to stand as a testament as to how well they did. I think they take that job very seriously.”
Farm equipment is disking reclaimed land at the Falkirk Mine with a dragline in the background. (Photo courtesy of Jim Deutsch)
take reclamation seriously. “This speaks highly of the mining industry and the work that they do,” he explains. David Straley, Manager of Government and Public Affairs for North American Coal, says his company is serious about reclaiming lands that have been disturbed. “We reclaim in a manner that is safest and maximizes our return to the state,” he explains. “There is a financial interest for us to reclaim more. We treat it with the highest priority.” Straley estimates his companies in North Dakota disturb 2,000 acres a year and they touch with equipment approximately 1,500-2,000 acres per year. It is estimated that more than three full-time employees do nothing but reclaim land that has been disturbed. BNI Coal does not view reclamation as simply a regulatory requirement, but more importantly a commitment to the environment, landowners, neighbors, county, and our customers, explains Jay Volk, Environmental Manager for the company. “BNI strives to reclaim land that is functional, stable, diverse, and productive,” he says. “BNI values the wildlife (game and non game species) and does many enhancements to promote a diversified habitat for a large range of species. Additionally, BNI is constantly looking for a way of better reclaiming land.” BNI Coal started mining southeast of Center, ND in
Freedom Mine is used for a synfuels plant. Deutsch says that North Dakota’s coal mining reclamation program has aspects that go beyond federal standards. The program has two main components. The first involves mine permitting including the approval of detailed mining and reclamation plans. The second is inspection enforcement, which requires the state to monitor the mining and reclamation operations. “When it first went into effect, we had to adjust to the change,” Deutsch says. “Companies have incorporated reclamation into their overall planning. It’s understood that is part of doing business.” The key is that the land must be restored back to productivity to pre-mine levels. An estimated 95 percent of the reclamation has been returned to agriculture. In addition, land has been reclaimed for other purposes. For example, the city of Underwood turned 150 acres into a golf course east of town. Others have been turned into industrial uses, as well as recreation areas. Since 1986, mining companies have received 15 national reclamation awards. Van Dyke states that before there were reclamation laws, mining companies were doing reclamation even though it was not required. “Reclamation is almost something now that is very mature,” he explains. Straley sees reclamation having a positive light on the (continued on page 50)
48 Prairie Business Energy
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(continued from page 48)
land in the state. “We have been able to correct Mother Nature’s harsher moments,” he says. “With equipment, we can design topography to curtail erosion. We mine and have kept in natural tree features, as well as habitat for wildlife. We believe we have a very positive impact on the land.” Volk adds that one of the largest impacts reclamation has on the land is the reduction of steep contours. “Post mine topography usually has gentler slopes than the pre-mine land,” he says. “The reason for this is the post mine topography is directly related to the landowner’s preference statements which dictate how land should be reclaimed after mining. For example, the landowners may request cropland or hay land be returned, which could require a gentler slope then was there pre-mine. Likewise, state regulation does not promote slopes greater than nine percent.” In addition, Volk explains that if the soil resources are available a landowner can change the land use from the pre-mine use to a different post mine land use. One example, he uses is if a landowner has a rocky, steep sloped, shallow soiled pasture, they could, resource dependent, change the land use to a more productive land use. “In return reclamation could provide a gentler slope, uniform soil re-spread, and minimal rocks, which would support a variety of different land uses including cropland and hay land, pastureland, or native grassland,” he says. “This could add value to the land and make it more profitable to the producer.” Alan Van Ormer - avanormer@prairiebizmag.com
50 Prairie Business Energy
March 2011
Importance of Mine Land Reclamation Successful mine land reclamation is important in North Dakota since the surface mining process drastically disturbs land that is currently being used for a variety of purposes. he mining process requires the removal of all vegetation and earthen materials to uncover the coal seams that are mined. As the mining process begins, care must be taken to remove, segregate and save the suitable topsoil and subsoil materials, since the soil resource is essential in reclaiming mined lands to beneficial uses after mining. Since the mid-1970s, North Dakota reclamation laws have required the restoration of premine productivity levels on lands that have an agricultural use after mining. About 90% of North Dakota land that has been permitted for mining has pre- and postmining agricultural uses, including cropland, hayland and grazing land. Considering that 125,000 acres have been permitted for mining, the successful reclamation of mined lands to agricultural and other beneficial uses is important to the local and State economy. These uses will continue on the reclaimed lands long after mining is completed. In addition, reclamation eliminates safety hazards that would otherwise be JIM DEUTSCH left on the land after mining. Successful Director of Reclamation reclamation and revegetation of mined and Abandoned Mine lands is also necessary to re-establish or Lands, State of North enhance wildlife habitat, minimize Dakota Public Service hydrologic changes, and to restore other Commission jdeutsch@nd.gov capabilities that existed on the land before mining.
T
Current Acres under permit: Beulah, 7,572 Center, 8,856 Falkirk, 34,828 Freedom, 47,927 Gascoyne, 1,685 Glenharold, 3,720 A mine pit at the Center Mine with reclaimed lands on the right side of the pit and undisturbed lands to the left. (Photo courtesy of Jim Deutsch)
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More oil could mean less outmigration With the reports that more oil can be pumped out of the Bakken in western North Dakota, there is the expectation that the state will see the population growth reversing the 70-year trend of outmigration, according to Lynn Helms, Director, North Dakota Department of Mineral Resources. e have seen a paradigm shift to push the market to take North Dakota oil to a paradigm of the domestic market having competing projects to move North Dakota oil,” he explains. “Our communities and state can not only create a vision for the future, but we will have the public revenue and private capital to make it happen.” Ron Ness, President, North Dakota Petroleum Council, says the issue is recognizing the sustainability of this oil play and attracting investment. “The most important part of any of these types of studies or outcomes is that more and more investment is being made in the
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52 Prairie Business Energy
March 2011
infrastructure and getting the state to recognize it has to invest in the Bakken,” he states. The Bakken, a formation of dense, oil-rich rocks that stretches into Montana and Saskatchewan, was discovered in the 1950s. Prior to the discovery of oil in 1951, 64 wells had been drilled in the state dating back to 1910. Since 1951, another 16,228 wells have been drilled in North Dakota. According to the 2010 edition of the North Dakota Oil and Gas Industry Facts and Figures developed by the North Dakota Petroleum Council, North Dakota is the fourth largest oil producing state. The state’s average production was more than 218,455 barrels of oil per day in 2009, totaling nearly 80 million barrels for the year, up more than 17 million from 2008. In addition, the information states that during 2009, 92.5 billion cubic feet of natural gas was produced and 56.4 billion cubic feet of natural gas was processed in the state. The drilling rig count, which is a prime barometer for measuring new oil and gas activity, averaged 52 rigs a day in 2008. The peak year for drilling rigs was 1981, with an average monthly rig count of 119. The all-time high was in October of 1981 with 146 rigs operating. Horizontal, or directional, drilling accounted for 95 percent of the new wells drilled in 2009 and accounted for 84.7 percent of the state’s oil production. The deepest vertical well drilled last year in North Dakota was 13,805 feet. The average depth for a North Dakota well in 2009 was 17,035 feet. The longest horizontal well drilled last year in North Dakota was 22,174 feet. There were 17 counties in North Dakota in 2009 with commercial oil production. Oil and gas exploration has occurred, at some point, in every county in the state except Traill County. Production tax revenues for 2009 were more than $392.9 million, representing a 25 percent decrease from 2008. All-time oil tax revenues to the state are approximately $3 billion. Nationally, the biggest source of energy in the United States in 2009 was petroleum supplying, 37 percent of the nation’s energy. Natural gas provided 25 percent, coal, 22 percent, nuclear, 9 percent, and renewable, 8 percent, according to the Facts and Figures. In addition, the average drilling rig count in the nation for 2009 was 1,089, down 42 percent from the year before. The alltime high was 4,530 in 1981. The nation’s average crude oil production in 2009 was 5.3 million barrels per day, up 7.3 percent from the 2008 average of nearly 5 million barrels per day. Finally, total petroleum imports averaged 11.7 million barrels per day for 2009, down 9.2 percent from 2008. It is estimated that by the middle of 2011, production in the Bakken will reach 400,000 barrels per day and continue upward to 450,000 or more barrels of oil per day. The change is the result
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of the rig count holding at 165 and operator plans to bring up to 70 more rigs into North Dakota in 2011, Helms says. In addition, he says it is now known that every spacing unit can support three to seven horizontal wells. Drilling has become more efficient with new bit and mud technology,” Helms states. “Frac technology has improved with use of more and more high strength manmade proppant.”
growth can’t happen without roads, bridges, water, and housing.” Helms does not feel there is a need for a new oil refinery. “Full refineries must be built near the market to be profitable and North Dakota will continue to be oversupplied with gasoline, especially as ethanol percentage is increased,” he explains. “Energy and ag are heavy diesel users, so a diesel topping refinery may work.”
“Our communities and state can not only create a vision for the future, but we will have the public revenue and private capital to make it happen,” states Lynn Helms, Director, North Dakota Industrial commission for the Department of Mineral Resources.
There are also projections of 2,000 wells per year with a final total of 21,000 to 49,000 wells. This means there are at least two things North Dakota needs to do to make it work. First, in the near term, is to double the frac pump and crew capacity, Helms says. “The number one need for the state and counties is to rebuild and maintain infrastructure,” he explains. “Oil production
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March 2011
In addition, job opportunities and changing educational requirements and opportunities are being created because of what is happening in the Bakken. Bismarck State College is one secondary institution that is developing programs to meet the needs of the Bakken. Two new associate degree programs are planned to begin this Fall, a two-year petroleum engineering program and a two-year petroleum production technology program that will teach students how to become operators in the field. The college is currently developing the curriculum. Bismarck State College already has a process plant technology program that trains students to operate natural gas processing plants. “We are providing workforce to operate gas processing facilities, now we will be supporting field operations of the petroleum industry,” states Kari Knudson, Vice President of the National Energy Center of Excellence at Bismarck State College. “There are many jobs that will be available with the drilling plans being proposed by oil and gas companies. With the anticipation of adding new wells, the industry will need more operators and technicians to take care of those wells.” Alan Van Ormer - avanormer@prairiebizmag.com
What Does Every New Oil Well Mean to North Dakota? A Typical North Dakota Oil Well Produces for an Average of 37 Years. • If economical, additional secondary recovery efforts can be made to extend the life of the well. In Those 37 Years, an Average Oil Well: • Produces over 838,000 barrels of oil (60 barrels of oil per day) • Generates $57 million in gross profit • Pays $5,775,000 in taxes: o Gross production tax - $2,665,000 o Extraction tax - $2,813000 o Sales tax - $297,000 • Pays royalties to mineral owners of $9,520,000 • Pays salaries of $1,552,000 • Has operating expenses of $1,666,000 The average cost of completing a well in North Dakota in 2010 was $6.1 million.
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BUILDING RELATIONSHIPS
Investing in trade to the North Canada and states in the Northern Plains, including Minnesota, South Dakota, and North Dakota, continue to work together in business ventures. Now, the Consulate General of Canada in Minneapolis is looking at more trade opportunities in this region. here is enormous potential to develop profitable business between Canadian and Northern Plains companies, beyond the very large flow of goods and services already moving in both directions,” says Consul General Martin Loken. The Consulate General of Canada located in Minneapolis represents Canada in North and South Dakota, Minnesota, Iowa and Nebraska. “Our markets are close by and share many similarities, so our ongoing effort to identify and grow profitable business links takes place in several sectors and industries.” One potential area for more business cooperation between Canada and the Northern Plains states involves technology partnering and commercialization. It is important that companies and research and development organizations in Canada and the Northern Plains ensure that technologies associated with their products or services remain current and competitive in the face of global competition, states Loken. Canada is also excited about what can be done in agrifood, clean technologies, life sciences, advanced manufacturing and building projects, Loken says. “Each of these sectors has its own particular dynamics and opportunities for greater trade and investment with Canada, so we employ a range of tools and techniques to bring companies and other relevant organizations together to explore opportunities,” he explains. The Consulate General of Canada is part of a network of
T
Canada’s Relationship within the region NORTH DAKOTA 40 Canadian owned companies in 124 locations employing 1,425 people 21,400 jobs depend on Canadian Trade
MINNESOTA 102 Canadian owned companies in
376 locations
SOUTH DAKOTA 21 Canadian owned companies in 49 locations employing 2,502 people 24,600 jobs depend on Canadian Trade 56
Prairie Business
March 2011
employing
24,902 people 157,200
jobs depend on Canadian Trade
Canadian offices across the United States working to promote trade and investment links, to engage citizens and decision-makers on matters of shared interest, and to assist Canadians living and traveling in the United States. Canada is the largest export customer for all five states. In 2009, two-way trade between this region and Canada totaled $21.1 billion and supported 345,000 jobs. In addition, nationwide, Canada buys nearly three times more from the United States then China does. The United States exports more to Canada than to China, Japan, and the United Kingdom combined, according to Loken. Across the country more than 8 million United States jobs depend on trade with Canada. Canada is not only the nation’s largest trade partner, it is also South Dakota’s largest trade partner, which is good for Rock Nelson, International Marketing Director for the Sioux Falls Development Foundation, Chamber of Commerce, and Airport Authority. Nelson’s job is to encourage more economic development for businesses in the region that conduct international trade within Sioux Falls and the surrounding region. He works with companies that import and export products and services and helps them with compliance issuances involving both the United States and foreign governments. “Being in such close proximity, a lot of trade goes on between South Dakota and Canada,” Nelson says. “Laws are very compatible to make companies on both sides of the
LARGEST CANADIAN-OWNED BUSINESSES: In Minnesota • Thomson Reuters, Legal • RBC Wealth Management (formerly Dain Rauscher) • Canadian Pacific Railway, LTD. • New Flyer Industries Inc. • SunOpta Inc.
In North Dakota • Crop Production Services, Inc. • Canadian Pacific Railway, LTD. • United Pulse Trading • Cavendish Farms, Inc. • Alliance Pipeline Inc.
In South Dakota • Canadian Pacific Railway Ltd. • TransCanada Corp. • Saputo Cheese USA Inc. • Crop Production Services, Inc. • PPD, Inc.
businesses consider how they might enhance their business model via trade with Canada,” he adds. In Minnesota, a significant share of the growth and development of Minnesota’s economy can be traced directly to goods and services moving between Canada and the state, says Bill Blazar, Senior Vice President, Business Development & Public Affairs for the Minnesota Chamber of Commerce. “The Consul General’s office is a great resource in maintaining and building the two way relationship,” Blazar states. “They work with individual companies to help them do more business with Canadian customers and business partners. And, we’ve worked successfully on several public policy issues of consequence to both economies.” Business partners and customers are the two major reasons it is important for the state to do business with Canada. Blazar uses the example of electricity. In the summer months, Minnesota’s economy depends on Manitoba Hydro for a significant portion of electricity. Then in the winter, companies like Xcel Energy provide electricity to Manitoba consumers. “The petroleum refineries in the Upper Midwest rely almost exclusively on crude oil from Alberta,” Blazar states. “And, it is hard to walk through a Minnesota shopping center without seeing at least a few Canadian license plates. It is clearly a two-way street and this traffic is building both economies.” PB Alan Van Ormer - avanormer@prairiebizmag.com
MINNESOTA NORTH DAKOTA SOUTH DAKOTA
TRADE
border want to work with each other.” Canada is the largest purchaser of ag and manufactured products in South Dakota. “Exports have kept a big share of the business sustainable in our area,” Nelson explains. “For some companies, 30 to 40 percent of gross revenue is dependent on exports. If wasn’t for the exports for some of these companies, they would be really hard hit.” Canada is also North Dakota’s largest trading partner. The Bismarck-Mandan Chamber of Commerce is one group that has established a strong working relationship with the Canadian Consulate General. The Chamber invites the Consulate to take part in its annual meeting and provides time for addressing the audience. The Consulate General also is an active member of the Chamber. Bismarck-Mandan Chamber of Commerce President Kelvin Hullet says North Dakota and Canada have strong working relationships in agriculture, energy, as well as sharing common resources and utilizing those resources to benefit our countries and our economies in each of our national interests. “On any given weekend you are likely to see a number of Canadian visitors at our shopping malls and hotels,” he states. Hullet does not specify one project that stands out, but did say that what happens is that we have businesses trading back and forth and we are able to directly address any issues that arise. “There is also a benefit in that we are able to highlight and build on the relationship and make other
CANADA
Global Business Connections is a two-day conference that connects North Dakota businesses with international trade professionals from around the world. The conference will include panel discussions with leading exporters and international business professionals, break-out seminars, networking events and an industry trade show. The conference also will include the presentation of North Dakota’s most prestigious international business awards. Panelists and presenters include:
Keynote speakers: Wednesday, March 30, 2011 at 11:30am Greg Page, Chairman and CEO of Cargill Page joined Cargill in 1974. Over the years, he held a number of positions in the United States and Singapore. He became CEO on June 1, 2007 and was elected chairman of the board on Sept. 11, 2007. Thursday, March 31, 2011 at 11:00am Michael Hick, Director of Global Business Initiatives and author of Global Deals: Marketing and Managing across Cultural Frontiers Hick runs 21 successful companies throughout Europe, Asia and North America, does day-to-day business in 35 countries, and is author of numerous best-selling business books. Having given over 2000 presentations worldwide, Hick brings a lifetime of practical, road-level business experience to his audience.
· Ed Schafer, Former Secretary for the U.S. Department of Agriculture and former North Dakota Governor · Michael Laden, Principal of Trade Innovations, Inc. · Roy Becker, a leading expert in International Trade and Banking · Bill Retterath, CFO of Daktronics · Ms. Britt Hestenes, Commercial Specialist, U.S. Embassy, U.S. Commercial Service, Oslo Norway · Danielle Walker, Director of the Africa Business Initiative, U.S. Chamber of Commerce
For more information about Global Business Connections and to register, please visit www.ndto.com or call (701) 231.1150 prairiebizmag.com
57
ViewPoint
Customer Success In the service industry, it is important to remember… “It is not about you”, “The customer is #1”, and “The customer pays the bills”. he better we understand our customer the better we can provide solutions for them. When you think in terms of the customer and what they need to be successful, you tend to look at things in a different light. Your customer typically relies on your goods and/or services to work and make them money. You, as a provider of those services, help them to be successful. When they are successful, you have a better chance of forging a solid and continued relationship. Your customer does not need nor want to hear your problems. They have their own. That is why they are at your door. You are there to provide solutions. If it is quick service…great, do that. If it is a recurring problem…ASK QUESTIONS. Why? What? How? Your job is to be the expert and make recommendations to increase their
T RICK LINDEMANN President, Dakota Fluid Power rlindemann@ dakotafluidpower.com
efficiency, eliminate their recurring problems and make the products you sell to them last longer. In doing this, the customer has a better chance of being successful. I can almost assure you that they will remember this and reward you with continued business. Consider yourself an employee of your customer. Your job is to look out for their best interest. Spend their dollars as if they were your own. We believe strongly in these key points to building a relationship, and those ideals are not easily compromised by a cheaper price or “a better deal”. The sweetest sound to any company is to hear your customer tell your competitor…”no thanks, my current supplier takes good care of me. I’ll stick with them.” PB
Time for a “Business Makeover?’ Every business deserves an annual tune-up to help keep it running smoothly. Here are seven actions every business owner should annually undertake for the New Year.
e-validate Your Business Model. Look at the basic premise for offering a product or service to the marketplace: A) How does this company (and product/service) create value? B) How does the company deliver the value it creates? And, C) How well does the company monetize the value it delivers? efresh Your Value Proposition. The Value Proposition answers three questions every consumer has when they are ‘in the market’ for goods or services: Why should I buy this? Why should I buy it from you? Why should I buy it now? Re-examine features, benefits and attributes the business promoted during the past year. Did it work well? pdate Your Marketing Plan. The art and science of marketing is being able to communicate a business has the right product, at the right price, for the right consumer, at the right time (now!). Good marketing plans get the value proposition message out on a timely and consistent basis. pdate Your Operating Plan. An effective operating plan should enable the company to be efficient, effective and profitable. Use Written policies, procedures and protocols for everything
R R DANIEL HANNAHER Regional Administrator, Region VIII Small Business Adminstration. Daniel.hannaher@sba.gov.
58
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Prairie Business
March 2011
including the employee handbook, inventory level changes, and how cash is handled. Use revisions to address new issues that cropped up during the year. e-Energize the Customer Experience. Look for new ways to delight, surprise, reward and communicate with customers. Find out what turns them on and turns them off…and then capitalize on those things. You want three things to happen: 1) Continuous consumer goodwill, 2) Consumers turning into committed customers, and 3) Passionate customers who tell others. e-Engage Your Employees. Do something unexpected and unusual to shake up the routine. Have an off-site team building experience. Unexpectedly hand out free gift cards. The rewards of hard work should go beyond merely more hard work and a paycheck. Variety, spontaneity and unpredictability will encourage the staff to come back every day for more! echarge Your Life Away From the Business. Find a reasonable balance between personal and business demands. Taking time to smell the roses away from the company on a regular basis fosters a better mental outlook, improves creativity and problem solving, renews optimism, and increases productivity. PB
R R R
Money
What is the Velocity of Money and How Does it Impact Home Loan Rates? If you’ve been watching the economic news, you’ve probably noticed that market experts and traders have been keeping a close eye on the Commerce Department’s Personal Spending and Personal Income reports. bviously, those reports provide insight into the health of our economy, but did you know they also influence home loan rates? That’s right, personal spending can actually influence the interest rates available when you purchase or refinance a home. Here’s why. It has to do with something called the velocity of money. Even though the government keeps pumping money into the system, nothing happens until that money is spent or lent – and passes from one hand to another or one business to another. The speed at which this money passes between parties is called the velocity of money. With the national job market still very sluggish, consumers aren’t spending much money these days, and businesses are still reluctant to spend money to make investments in their business. With the present velocity at low levels, inflation remains subdued which is good for home loan rates because they are tied to Mortgage Bonds. Inflation is the archenemy of Bonds, so low inflation is good for Bonds and rates. However, once velocity increases, the excess money in the system will cause inflation – which is bad for rates, since even the slightest scent of inflation can cause home loan rates to worsen. While we certainly want to see better economic recovery news in the near future, we have to remember that there’s an inverse relationship between good economic news and Bonds and home loan rates. Weak economic news normally causes money to flow out of Stocks and into Bonds, which helps Bonds and home loan rates improve. Strong economic news, on the other hand, normally has the opposite result. Currently, home loan rates are at a historically low level, but that situation won’t last forever. That means now is an ideal time to purchase a home or refinance before the velocity of money – and rates – change. PB
O
DAN DOEDEN President Alerus Mortgage Solutions ddoeden@alerusmail.com
G M O Y F F
Tax & Estate Planning Tax Return Preparation Financial Planning Management Consultation Financial Statement Services No one has a crystal ball, but we all look to the future with optimism. We are accountants who start by really listening to your business concerns, frustrations and dreams for success. We then provide personalized service in every phase of accounting, tax, financial service and management advice. Our services and guidance stay focused on helping you map out your goals and objectives for today and the future. We want to be your accountants. Call us today.
F, S, W C., 2537 University Dr. S., Suite 200 Fargo, ND 58103 701-280-2100 115 8th St. S. Moorhead, MN 56560 218-236-8100 www.fsw-co.com
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Prairie Business to Business
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By the numbers
EMPLOYMENT (NOT SEASONALLY ADJUSTED) UNEMPLOYMENT RATE Dec. 2010 North Dakota 3.9% Fargo MSA 4.0 Bismarck MSA 3.9 Grand Forks MSA 4.3 Minot MiSA 3.7 Dickinson MiSA 2.7 Williston MiSA 2.1 Jamestown MiSA 3.6 Wahpeton MiSA 4.7 South Dakota 4.9 Sioux Falls MSA 4.9 Rapid City MSA 5.2 Aberdeen MiSA 3.9 Brookings MiSA 4.0 Watertown MiSA 4.7 Spearfish MiSA 4.6 Mitchell MiSA 4.0 Pierre MiSA 3.4 Yankton MiSA 5.1 Huron MiSA 4.8 Vermillion MiSA 3.7 Minnesota 6.8 Minneapolis-St. Paul MSA 6.5 Duluth-Superior MSA 7.4 St. Cloud MSA 6.8 Rochester MSA 5.5 Mankato-N. Mankato MSA 5.4 Brainerd MiSA 10.5 Fairbault-Northfield MiSA 7.5 Winona MiSA 6.4 Fergus Falls MiSA 7.6 Red Wing MiSA 6.9 Willmar MiSA 6.2 Austin MiSA 5.6 Bemidji MiSA 7.9 Alexandria MiSA 6.7 Hutchinson MiSA 8.8 Owatonna MiSA 7.0 Albert Lea MiSA 7.7 Marshall MiSA 5.5 New Ulm MiSA 6.1 Worthington MiSA 4.9 Fairmont MiSA 6.5
Dec. 2009 4.3% 4.1 4.3 4.3 4.4 3.5 2.3 3.8 5.2 4.8 4.9 5.2 3.6 4.0 5.4 4.7 4.9 3.3 4.8 3.8 3.7 7.4 7.2 8.2 7.3 6.1 6.0 10.4 8.3 6.8 8.0 7.3 6.6 5.6 8.1 6.4 9.7 8.1 8.0 5.4 6.5 4.6 7.2
EMPLOYMENT Dec. 2010 Dec. 2009 349,865 341,938 114,745 113,976 59,614 58,509 53,291 52,526 32,831 31,508 14,228 3,837 13,696 14,002 12,356 11,463 11,380 11,028 418,055 425,080 122,660 122,690 61,895 62,260 22,345 22,375 18,375 18,280 17,800 17,730 12,795 12,755 12,420 12,160 11,855 11,685 11,075 10,990 9,315 9,280 7,555 7,490 2,739,560 2,729,009 1,723,793 1,711,918 135,444 133,813 101,520 101,069 100,716 99,545 54,758 54,244 40,540 41,773 30,891 30,548 25,261 26,855 27,516 26,933 23,841 23,721 21,979 22,108 19,620 20,155 21,285 19,972 18,978 19,411 17,082 17,409 19,094 9,282 14,733 15,107 13,787 13,962 13,648 13,745 11,181 11,365 10,466 10,502
MSA — Metropolitan Statistical Area MiSA — Micropolitan Statistical Area Sources: U.S. Bureau of Labor Statistics, Minnesota Department of Employment and Economic Development, Job Service North Dakota, South Dakota Department of Labor
NORTH DAKOTA OIL ACTIVITY Sweet Crude Price/BBL
Production Oil-BBL/day
Nov 2010 Sept 2010 Jun 2010 Apr 2010 Feb 2010
$75.74 $67.95 $71.26 $67.58 $63.96
355.038 341,384* 284,300 261,000 241,500
Gas-MCF/ day
352,559
340,384*
Nov 2010 Sept 2010 Jun 2010 Apr 2010 Apr 2010
Source: NDIC
AIRLINE BOARDINGS
MINNESOTA
U.S. to Euro
$0.721 or $1.387
$0.747 or $1.339
$0.729 or $1.372
NORTH DAKOTA
U.S. to Chinese Yuan
$6.83 or $0.1465
$6.59 or $0.1517
$6.61 or $0.1514
U.S. to Japanese Yen
$90.41 or $0.0111
$81.13 or $0.0123
$81.95 or $0.0122
U.S. to Mexican Peso
$13.03 or $0.0768
$12.34 or $0.0810
$12.15 or $0.0823
62
Prairie Business
Data provided by Kingsbury Applied Economics
March 2011
16.62 - 0.25 16.50 - 0.50 6.67 9.29 11.24 100.14
AUTOMOBILES
$1.00 or $0.9978
Source: Bank of Canada
% CHANGE/DECEMBER 2009
1,199,742 30,274 31,594 19,952 17,086 1,270 10,452 10,177
CANADIAN BORDER CROSSINGS
$0.99 or $1.0054
01 /31/11
DECEMBER 2010
Minneapolis-St. Paul Fargo Sioux Falls Rapid City Bismarck Pierre Grand Forks Minot
$1.07 or $0.9390
12/31/10
Rig Count 158 143 107 93 74
*Record for Gas. Rig record was 158 on 11/11/2010. September oil is record production.
U.S. to Canadian Dollar-
01/31/10
Producing Wells 5.331 5.197* 4,810 4,655 4,623
11/12 Rig Count 156*
Intl Falls-Rainer Grand Portage Baudette Warroad Roseau
CANADIAN EXCHANGE RATE
Drilling Permits 245 167 106 94 99
Pembina Portal Neche Dunseith Walhalla Noonan
NOV 2010
% CHANGE /NOV 2009
35787 20652 14181 10079 3197
12.13% 42.33 8.19 44.52 23.82
30335 8548 4250 5226 3868 2830
19.12 13.79 7.19 30.88 49.75 7.93
Source: US Customs and Border Protection
TRUCKS NOV 2010
% CHANGE /NOV 2009
1569 1297 621 919 471
-18.83% 61.12 -23.43 -11.55 11.88
17187 6067 1119 2038 1332 309
8.02 - 3.73 50.61 26.58 0.68 -55.15