By Kelsey Sheehy
“Nobody wakes up in the morning hoping to get a message from you.”
That is the challenge Steve Erickson, president of advertising agency Henry Russell Bruce, said businesses face when trying to connect with consumers.
In light of this stark reality, how do businesses get potential customers to stop and pay attention to what they have to say?
“You have to intercept them at a place they care about with a message they care about and at a screen they care about,” Erickson said.
According to Erickson and his colleague, HRB’s CEO Jim Thebeau, the key to identifying what your customers care about and what their unique needs are is through research. Done right and done often, effective research can build your company’s credibility and earn the trust of your target market.
The most effective way to know what your potential customers are thinking is simple: ask them. Whether its through surveys, message boards or old fashioned conversation, engage your customers, listen to what they are saying and then respond.
“It absolutely, essentially, must be a dialogue,” Erickson said. “Which way the wind is blowing changes so quickly … so unless that is part of your mantra in your marketing, you’re going to get left behind because you won’t know what they’re really thinking.”
Insight into your audience is increasingly important when targeting niche markets, and Erickson and Thebeau are quick to point out that now, unlike 20 years ago, every market is a niche market.
“You have to speak the language of that niche market,” Thebeau said. “You have to learn it and you have to be able to walk the walk and talk the talk because people will know very quickly if you don’t know what you’re talking about.”
Trevor Bollers, president of Letter B LLC in Iowa City, a technology solutions company, has honed an effective process to learn the language of the niche groups his products target.
This process starts by identifying a problem and the target market, then evaluating whether Letter B’s solution is a proper fit. If it is, they use external resources to dive deeper into the market, getting a clearer picture of who are the people and what is the problem.
One of Bollers’ go-to resources is the University of Iowa, his alma mater.
“They have students in classes who need projects to do, and one of the things they like to do is help local businesses,” he said. “If we feel we have something good after we go through our initial process, we’ll engage with the university and hopefully get on one of their project teams to help us with deeper market research.”
But Letter B’s research does not stop there.
Armed with thorough data on their target audience, Bollers and his team fine-tune their product and approach by interviewing potential customers and finding a partner within the niche. These partnerships help Letter B gain credibility, and the insight they provide is a crucial asset to product development.
Bollers cited the company’s Hot Feet Youth Programs product as a prime example. Designed for volunteer coaches in youth sports leagues, Hot Feet provides webinars, coaching tips and practice drills to coaches with little to no expertise in the sport they are volunteering in. The idea for Hot Feet was born out of Bollers own experiences as a youth baseball coach in North Liberty.
A former fullback for the Hawkeyes, who also played a season with the Jacksonville Jaguars before a torn anterior cruciate ligament ended his National Football League career, Bollers would have been a perfect pick to coach youth football. But baseball was where the need was, so baseball was where he went, despite an admitted deficiency of expertise in the sport.
Seeing the need and identifying the niche, Bollers came up with the idea for Hot Feet and then partnered with a potential customer to craft the program.
“The question was, ‘How do we take Hot Feet to market?’” Bollers said. “We already know about the market being former athletes, so we engaged a potential partner and started learning from them about what the true needs are of that industry.”
Based on analysis with their partner, Letter B identified an element of their product that would not serve their market and made the decision to drop it.
According to Erickson, this flexibility is necessary to successful marketing.
“A common mistake businesses make is not having a backup plan, going into something saying, ‘This is going to be it,’” he said. “They need to be nimble.”
Part of being nimble is adapting to new technologies and using them to enhance your message.
Nancy Garberson, CEO of Marketing and Communication Strategies Inc. in Cedar Rapids, said social media should be a part of your action plan if you are selling a product or service, but, she cautions business owners to use it wisely.
“You can’t sell, sell, sell. Nobody wants to read that.”
Instead, businesses can use industry blogs, online knowledge bases and social media sites like Twitter and LinkedIn to connect with their customers, become part of the conversation and share their knowledge and expertise.
The bottom line, Garberson said, is you have to reach customers, contribute to the dialogue and be visible.
Garberson recalled a quote from her college marketing book that sums it up.
“You can wink at a girl, but if you’re standing in the dark, who’s going to know?”

By Dave DeWitte

Many new arrivals in the Corridor wonder the same thing: “Where are all the minority businesses?”

It’s something Betty McArtor wondered when she arrived in Cedar Rapids 14 years ago, and couldn’t find braiding hair, a product popular mainly among black American women at the time.

McArtor found some in the back of a beauty supply chain store, where the lone clerk talked on the telephone and ignored her. The feeling of being shunned led to Ebony Beauty Supply, the business she started in 2001.

“As much money as African Americans spend on hair, they should get good service,” said McArtor, who makes a point of getting to know all her customers at 1901 Mount Vernon Rd. SE.

Statistics bear out Iowa’s remarkably low level of minority businesses, but don’t explain what the shortage costs the state.

Only 0.7 percent of Iowa businesses were owned by African Americans in 2002, the last year for which data was available. That compares to 5.2 percent of U.S. businesses that are owned by African Americans.

Only 0.2 percent of Iowa businesses were owned by people with Hispanic backgrounds, compared to 6.8 percent nationally.

Experts say the shortage of minority businesses is one of the major obstacles to recruiting and keeping new Iowans from minority backgrounds.

The director of Cedar Rapids-based Diversity Focus, Hazel Pegues recalled being harangued by an employee of Rockwell Collins who had arrived from New York City to work in Cedar Rapids.

“He said, “In New York we celebrate all of the Jewish holidays! I can’t even find kosher food here,” she recalled.

James Weatherford, who moved to Cedar Rapids from Chicago, hears about it all the time.

“There are a lot of businesses needed here, like soul food restaurants and entertainment places,” said Weatherford, a Chicago southsider who opened The Chop Shop, a hairstyling business popular with African Americans, in a one-room space in 2006 with virtually no money.

The Chop Shop is now one of the few places to go in Cedar Rapids for popular styles such as dreadlocks, Mohawks and French braids. The multicultural business is popular with Latinos and other minority consumer groups. Its five barbers and one beautician rent their chairs from Weatherford.

Weatherford said minority-owned businesses help recirculate money through the minority community, developing jobs and a work ethic that young people will imitate.

The recession may be creating more minority businesses, simply because minority unemployment nationwide is even higher than the overall unemployment rate.

Dalbir Chand, 49, expanded from one Indian cuisine restaurant and grocery in Cedar Rapids to a second grocery in Coralville last fall. The native of India’s Punjab state moved from Chicago to Cedar Rapids to work at Taj Mahal Cuisine of India as a chef. He wanted a better place to raise his kids, but he soon had the chance to buy the business and didn’t hesitate.

Chand’s business helps Indians and Pakistanis feel at home by offering native food, groceries and popular Bollywood movies. It is also popular with vegetarians who appreciate the many dishes that aren’t prepared with meat.

Minority business owners interviewed for this story said they rarely or never encounter overt discrimination. They said the community is welcoming in many ways, but sometimes it appears that invisible lines have been drawn.

“There’s a lot of opportunity here,” said Weatherford, who performs with a rap group called The Chop Shop Boys and produces songs under the banner Chop Shop Musik.

“It’s a few bad apples in the bunch that makes it bad for us. Don’t judge all of us from a few bad apples.”

Frank Osako of Informatics Inc. is a third-generation member of a Japanese immigrant family. His grandfather came to California to work the railroads. His father and mother were held in an internment camp during W.W. II, but his father went on to coach the first U.S. Judo team in the Olympic Games, and to form the largest Judo school in the United States.

Osako takes dozens of hours away from his business every year for his service on Iowa’s Targeted Small Business Task Force, which reviews state loans and grant applications to minority entrepreneurs. He also serves on the state’s Commission on the Status of Iowans of Asian and Pacific Islander Heritage.

Osako says minority businesses are springing up in large and small towns across Iowa, although the state may view minority businesses in a broader sense than most people.

For the program’s purposes, businesses owned by women and Iowans with disabilities are considered minority businesses. Osako says the program’s board does its homework to make sure that nonminority investors such as spouses aren’t actually controlling the businesses.

Starting up a business is often a logical choice for minorities, Osako said. Many of them have valuable business skills, but their prospects of obtaining employment in a mainstream business might be dimmed by language or cultural barriers, or other factors.

“I have my own schedule and can do things the way I want,” said Chand, who employs five in his businesses. Chand said he’s trying to help some relatives in India come to the United States when the visa program allows, and suspects they may want to start their own businesses.

Minority businesses may have more of a tendency to hire more minority group members, but Pegues with Diversity Focus said that effect is secondary at best.
“The minority business owners I know are in business for one thing, to make money, and they want to hire the qualified people who can help them do that,” Pegues said.

Hass Machlab, owner of Innovative Software Engineering in Coralville, is a native of Spain’s Canary Islands who only hires the most experienced, talented and reliable software developers.

“I don’t even qualify as a minority at the federal level, because I’m from Spain,” Machlab said. “If I were from Latin America, I would qualify.”

Innovative Software Engineering develops software for major names such as Navistar, Deere & Co., and Qualcomm. Machlab said the only stigma he faces is of being a relatively small company from a small Midwestern state.

“One of the good things about this country is that if you show your value, it rewards you,” Machlab said.

The one thing that binds minority businesses most closely may be their commitment to customers. Many of them have arrived on the scene without the financial backing and credentials of their competitors. They want customers to feel they are receiving value and appreciation.

“You have to come early and stay late,” Weatherford said. “You have to stay on the grind. If your customers believe in you, that’s a big boost.”

Acme Graphics owners used to imagine that if they could take everything out of their southwest Cedar Rapids plant and put it back together differently they’d have a much more efficient company. After June 2008 flooding severely damaged the its building at 201 Third Ave. SW, owners Emmett Scherrman and Jeff Scherrman got the opportunity to do just that.

But to their surprise, a new layout and equipment did not increase production the way they had hoped.

Now, the company is being reinvented with input from Van Meter Industrial and ongoing work with business coach K.P. Persaud of ActionCOACH. The goal remains delivering products within tight timelines, but with more outsourcing and limited inventory to realize a greater return on investment and minimize risk.

“Before the flood we were busy. We didn’t have time to think that things were going wrong because things were going great,” said Jeff Scherrman, president of Acme Graphics. “I think the flood exposed every problem.”

About nine years ago, Emmett Scherrman and his son, Jeff, bought the company. Acme Graphics creates and prints highly customized funeral stationery under The Regal Line brand. As the 97-year-old company grew and adapted to changes in technology and client demands, new equipment and offices were cobbled together.

The company was known for meeting deadlines and business was so good that the Scherrmans were considering buying smaller competitors in 2008.

Then, unexpectedly, they faced two major challenges record flooding that shut down production and then the economic recession.

The flood wiped out the company’s presses, other equipment and inventory. Van Meter Industrial “adopted” the company post flood, acting as consultants to help the Scherrmans plan for rebuilding its physical site.

Acme Graphics sent out its next order on July 9 — just three weeks after the flood.

Customer orders were produced in house before the flood. After the flood, production had to be decentralized — some work was even sent out of town.
With the help of Van Meter Industrial staff, the Scherrmans realized that Acme Graphic’s strength was as a specialty publisher, not as a printer.

Post-flood, Acme Graphics has a small press, but higher quality work is completed elsewhere at companies that have better, more costly technology. The Scherrmans had to explain to customers that not all work is done in house for safety and security.

They rebuilt the plant knowing regular customers were waiting for them, but the opportunity was short-term. With a new plant and new equipment, they actually had more backlogs, Emmett Scherrman said. Either it was the systems or the people, or both.

“It was Dad that figured we needed help first,” Jeff Scherrman said. “I was too stubborn … I figured we could fix it because we always had in the past.”

Emmett Scherrman, chairman of Acme Graphics, likes to say that he hires people smarter than himself so that he doesn’t have to work as hard, so they hired Persaud as a business coach.

“There is really nothing wrong with asking for help. If you have a weakness, the worst thing is to try to hide it,” he said.

With Persaud, the Scherrmans developed an action plan that includes short-term and long-term plans. To get at the root of the company’s problems and develop the plans, they have evaluated systems, processes and people.

Cash flow, which becomes much more critical in difficult times, was one of the first things Persaud reviewed with the Scherrmans. That led to looking at inventory. It seemed that no one had a clear understanding of how long it took to resupply inventory. Business was good pre-flood and with the focus on on-time delivery, more paper inventory was on hand than was needed. Not only did that create more of a risk for loss through obsolescence and disaster — about $300,000 of paper inventory, stored in large trailers, was destroyed during the 2008 flood — but investment in product was as a significant percentage of the company’s working capital.

Part of the problem was that they didn’t know how to measure what was happening in the plant. Staff didn’t measure because they didn’t feel they had to: pre-flood, sales were up, so they assumed everything was fine.

“When you have that kind of volume, problems tend to be masked,” Persaud said.
So the Scherrmans and employees learned how to measure different aspect of the company’s production and processes.

In the past, measurement and review of four parameters was centered on achieving on-time delivery, and all employees were awarded profit-sharing based on that one goal. Annual employee reviews were done, but there was no weekly measurement.

Now, actual productivity is being measured hourly. Once employees knew they were being measured, production went up 10 percent. Pre-flood they had 22 employees, post-flood it’s 20, but with the changes they’ve made, production is up.

To move the company forward, the owners realized they had to spend more time on the business and less time working in it. They reorganized and in January hired a new Peg Schmitz as general manager to run day-to-day operations. She hires, fires and manages staff – something that used to fall on the Scherrmans.

Under the new structure, employees have become “mini owners of the business,” Schmitz said. Communication has improved and there’s less focus on the details of an issue and more on fixing it and working toward a resolution.

“We tell them we want their input,” she said. “I’m here to teach everybody to function as if I’m not going to be here.”

Jeff Scherrman said he didn’t want to after new markets until he could handle his core business, but with Schmitz in charge, he said he is now ready to expand.
“We’ve built a better team. We’ve got a lot of smart, energetic leaders here,” he said.

If everything goes as planned, they’ll increase volume – despite the flood and the recession. Jeff Scherrman can now focus on connecting with customers and growing into parallel markets, Persaud said. They can recognize other opportunities because they work on the business not in it, he said.

“It’s big for a small company what we did (taking a) 97-year-old company and changing drastically everything we’re doing,” Jeff Scherrman said. “We’ve already seen a marked change.”

And the Scherrmans are not done yet.

“Our goal is to double our business in three to four years,” Jeff Scherrman said.

The business:
Acme Graphics
201 Third Ave. SW
Cedar Rapids, IA 52404
(319) 364-0233

The consultant:
K.P. Persaud
ActionCOACH
www.actioncoach.com/KuldeepPersaud
(319) 846-2067

A sales representative by trade, Tim Guenther, 32, of Urbana started a small Internet retail company four years ago to help give him a competitive edge selling building products. Little did he know that his company, which had $14,000 in sales in the first year, would explode.

The once one-man company, ClickStop, now has 20 employees and continues to add more despite the recession. It made about $5 million in sales last year and expects to hit $10 million in sales this year.

“We’re going to need an economic tail wind to do it. We’ve had so much head wind. If we’re growing 50 to 60 percent while we’re being pushed down, imagine what we could do if the economy improves,” said Shaun Linderbaum, vice president and chief technology officer for ClickStop and Guenther’s right hand man.

Guenther, president and CEO of ClickStop, lured Linderbaum, 32, who had helped him start his Web site to the company from Deere Co. when business picked up.

“It’s a lot more exciting,” Linderbaum said of his new job. “Every day is an interesting challenge. I’m excited to get up and go to work every day.”

While they were able to take the company far, the two knew they needed some skilled help last spring. So they turned to The Entrepreneurial Development Center in Cedar Rapids.

“They’ve really pushed us to think about things we’re not thinking about,” Linderbaum said.

ClickStop’s “ability to build Internet sales engines is really good,” said Curt Nelson, president and CEO of The EDC. “They’ve really got their business scaling at a really fast rate.”

Nelson said The EDC tries to help ClickStop and other companies manage their growth.

“A business can easily grow right into bankruptcy,” he said.

They’ve really helped hold us accountable during that growth, Guenther said of The EDC.

Guenther attributes ClickStop’s success to simply capitalizing on a change in shopping habits that many companies have been slow to grasp — e-commerce. With Web optimization and Web advertising, ClickStop’s e-commerce sites have become the top search results in the products it sells, Guenther said.

“That’s our way of sneaking up on industries,” he said.

The company is getting used to being in transition as it expands its warehouse and office space, but it hopes to start building a new $2 million, 35,000-square-foot building in Urbana’s new economic development park along Interstate 380 this spring.

The four-year-old company sells six e-commerce brands with products ranging from building materials to vitamins to cat furniture.

“We don’t manufacture it. We do private label it,” Guenther said.

That alone has allowed the company to expand rapidly.

The EDC has also helped ClickStop organize its inventory.

“We were carrying too much,” Linderbaum admits.

That’s a problem for a lot of companies, especially when credit is tight, said The EDC’s Nelson.

Too much inventory ties up too much cash that’s not available to reinvest. Companies need to make sure they have a good manufacturing resource planning system to track that, he said.

Most recently, the EDC has been helping the company with its organizational structure.

“When we were just six people we all just did everything,” Guenther said.

When they needed another employee they’d just post a job and told the person to come see that they did to see if it was what they’d like to do, he said.

“We didn’t want to put people into boxes. We wanted them to be able to contribute where they could,” Linderbaum said.

That’s all changed.

“We’re already seeing a value,” Linderbaum said.

“We know now that roles have to be defined,” Guenther said.

Jane Burroughs, vice president of operations at The EDC, said that clearly defined roles leads to reduced duplication, decreased errors and increased production.

“If you focus people in silos, they do the same work over time. That’s what makes them faster,” Burroughs said.

ClickStop also needed the right people in the right positions to keep growing and the recession has helped in that respect.

“We’ve been able to get a lot of good, really talented, loyal hardworking people. We’re scooping them up as fast as we can,” Linderbaum said.

Nelson said that convincing small start-ups that want to grow that they might need to get rid of or move a person who has been with the company since the start of the company is often a difficult thing for people to do.

“Sometimes you just don’t have all the right people.” Nelson said.

ClickStop hopes to keep their employees by providing a fun environment and competitive benefits.

“We’ve (Guenther and Linderbaum) both worked in larger companies. We’ve never done this before, but it feels good — satisfying — to make a profit and be able to do something nice for your employees,” Guenther said.

Working with the EDC has also given them even more confidence to grow.

Guenther admitted he was tentative about growing by acquiring companies, but consulting with the EDC showed him it was a good strategy, especially since companies can be purchased at a good value right now because of the economy.

“You can spot opportunities in this economy,” Guenther said.

The business:

(319) 369-4955

By Dave DeWitte

When it comes to interviewing job candidates, a little management training can go a long, long way.

That’s the view of established experts, who say managers often lack training in such areas as what to ask, how to ask it, and how to gather different perspectives of a job candidate’s abilities. They offer tips to help beef up those interviewing skills so that when it’s time for companies to start hiring again, they’re ready.

Bill Humbert of TheRecruiterGuy.com said businesses often underestimate the financial costs of a bad hire. As a result, they often underinvest in backgrounding and interviewing job candidates.

“Many companies will glance at their ‘hard costs’ of letting someone go, but never even consider their potentially catastrophic ’soft costs,’ Humbert writes in his blog. He said soft costs could include such things as the lost productivity of other team members who must step in to perform work a new hire fails to perform adequately, and customers who take away their business because of a new hire’s incompetence.

If businesses took hiring seriously, Humbert said they would have managers in each department trained and “certified” in their hiring skills, rather than assuming any manager knows how to hire.

Think one interview is enough?

Think again, said Morris Pounds, a professor and career counselor at Kirkwood Community College for 30 years.

“The more times you interview, the more you have a better idea what type of candidate you have,” Pounds said.

Pounds recommends that a candidate be interviewed in several different types of situations. A one-on-one interview is only a starting point, Pounds said. He also recommends interviews with a peer panel, other employees that could help establish how others react to the candidate, and an interview over a meal that might reveal more about the candidate’s social skills.

Too often, Pounds said, interviewers get caught up in asking general questions such as the candidate’s strengths and weaknesses, or why they want the job. Such questions can be easily anticipated beforehand, or coached, he said.

“Ask questions that are really related to the jobs they’re applying for,” Pounds said.

Pounds also recommends interviewers drill down on specific hard skills needed for a job. If their proficiency isn’t clear, they should be tested.

“You need to tell me not only what you’re familiar with, but what you’re proficient in. If you say you’re proficient in Excel, you should be able to create spreadsheets and databases in your sleep.” he said.

Pounds is a big fan of “situational behavior questions,” which essentially ask the candidate how they would respond in a given situation. Even if the candidate’s answer is unexpected, it often reveals something important about the logic of the candidate’s reasoning, or lack thereof.

One of the biggest issues Humbert sees in interviewing is the manager’s insistence on rigidly adhering to a list of prepared questions.

When a manager is given a list of questions without training them to listen to the candidate’s response, they tend to focus on the next question instead of understanding and evaluating the response to their last question. By actively listening, Humbert said managers gather more material to probe. Further questioning the candidate about their responses may be more on-target than any list of questions the managers used to begin the interview.

When companies train managers in hiring, it’s often training focused on legal issues. Pounds said most hiring managers by now know they aren’t allowed to ask candidates discriminatory questions such as age, how many children they have, or their religious views.

But some candidates remain intently interested in those matters, and use other “fishing” questions to seek the answers.

“I hear horror stories,” Pounds said, relating one about an older woman who was told the employer needed to see her driver’s license before an interview even began.

Pounds encourages employers to let candidates ask questions and to answer them honestly. He said the questions a candidate asks often reveals as much about their knowledge and interest in a position than the answers they provide.

Even if an employer conducts a good interview, Pounds said many find other ways to screw up the hiring opportunity. Many employers now require applicants to fill out extensive online questionnaires with questions so detailed that many candidates don’t honestly know the answers. They might not know their starting and finishing wages at their last three jobs, but some online forms cannot be submitted unless the candidate has filled out every line.

After the interview, many employers fail to keep candidates informed about the status of their hiring process, even if they have promised to do so. As a result, Pounds said, employers stand to lose interest of the best candidates. Since these candidates often have more options to choose from, they will pursue other opportunities that seem more real to them.

Humbert advises employers hiring for key positions to do a pre-interview telephone screen with the candidate. By asking a shortlist of essential questions, it’s often possible to screen out the candidates who wouldn’t meet the job expectations, and save the time and cost associated with the in-person interview, he said.

By George C. Ford

As companies look for efficiencies to prepare for a recovering economy, the Corridor will face renewed competition this year to retain existing industry and jobs.

Mark Seckman, president of Priority One in Cedar Rapids, said corporations are looking at their “footprint” with an eye toward consolidation.

“They’re deciding where can they make cost-saving maneuvers,” Seckman said. “We’re going to be competing for existing business consolidation projects. Companies will either consolidate in their Corridor location or another location.”

Seckman noted that Cedar Rapids experienced corporate consolidation in 2009 when Cryovac/Sealed Air, Midland Forge and Terex transferred production to other states and GE Financial Services and Iowa Precision Industries consolidated operations in Cedar Rapids.

Seckman said Europe will continue to be a strong market for Cedar Rapids and the Corridor in food ingredients, bioprocessing and food processing.

“Our focus in Europe is on companies that have sales in the United States, but have not established production or distribution outlets to support those sales,” Seckman said. “With the current exchange rate between the dollar and euro, now is a very favorable time for European companies to expand into the United States.”

At the southern end of the Corridor, Joe Raso, president of the Iowa City Area Development Group, says there is strong activity among companies that provide software and information technology integration services to larger firms.

“We’ve been working recently with three separate projects across a number of industries,” Raso said. “All three will be in the 25-to-50-person staff, which is really excellent for our market. Those types of operations have customer service and technical components to them.”

Seckman said the “jury is still out” with regard to attracting wind turbine component manufacturers.

“I think it’s an area where we still have opportunities, but the financial crisis has really hit that industry,” he said. “Some wind farm developers have not been able to get the financing that they need to keep projects moving forward. That has had a ripple effect on wind turbine manufacturers and their component suppliers.”

Seckman believes the wind energy business will start to move forward in the second half of this year.

“There are companies that we’re working with right now that plan to move forward because they have contracts in place,” Seckman said. “Those companies do repair and servicing of existing wind farms.”

Raso also hopes that 2010 will be a strong year for wind energy suppliers, particularly those involved in servicing existing wind farms.

“I hope that will lead to some opportunities for the wind energy campus that we have in Iowa City,” he said. “We will have our first ’shovel ready’ sites certified within the next 30 to 60 days and that should help us with marketing as we come out of this funk.”

Raso said lack of financing in the wind industry has held up projects that were expected to commit to Iowa City eight or nine months ago.

“The hope is that 2010 will bring some kind of announcements on these projects,” he said. “Many of these companies feel they have to be up and running to provide products and services to their customers in 2011. They have to get busy constructing new facilities or building out existing structures to be ready for business next year.

“The comment that we’ve heard from two companies is they’re going to go from zero to 60 miles per hour.”

The sluggish economy and other factors also have put some projects announced in recent years for Cedar Rapids and Amana on hold.

Seckman said Hamlet Protein A/S of Horsens, Denmark, expects to break ground this year for its plant in southwest Cedar Rapids. The company, which originally expected to start construction in the spring of 2009, produces a variety of enhanced soy proteins for pet foods, fish farms and young animals that it exports to 50 countries.

Seckman said Bionade and Alb-Gold Teigwaren of Germany will likely push back construction of their beverage and pasta plants in Amana until 2011 due to Bionade being acquired by a large German brewery and the costs of significant expansion in Europe.

“We met with Alb-Gold and Bionade executives in November and they renewed their commitment to Amana and the United States market,” Seckman said. “The acquisition of Bionade provided a much needed cash infusion after their aggressive expansion in Europe.”

Alb-Gold Teigwaren and Bionade in 2007 signed a letter of intent with the Amana Society to build a 121,500-square-foot production facility on 65 acres near the corner of Highways 151 and 220.

The plants will produce organic egg-based pastas and the organically-fermented Bionade beverage, a new soft drink for the North American market.

Seckman said there may be “niche” corporate projects in the Corridor this year, but no major expansions or construction of new facilities. He said the Corridor is facing strong competition when it competes for projects requiring office space.

“Fortunately, this area did not get out ahead of itself in the last decade in terms of building speculative office space,” he said. “Unfortunately, there are communities like Atlanta where a client we’re talking with can get office space for $8 a square foot with a long-term lease.

“We will continue to work with projects like this because we think there is more to offer than just cheap office space.”

Raso expects the glut of office space in larger markets to continue for several years until demand catches up with supply and rents start to rise.

A recent survey of ICAD members found concern among businesses dependent on state and federal contracts due to projected budget cuts, Raso said. Those dependent on private sector contracts felt more confident about the economy improving.

Raso and Seckman said the sluggish national economy will continue to be a major factor in business decisions. They plan to continue calling on headquarters executives of existing employers, offering assistance and information to those making decisions about potential consolidations or expansions.

By Steve Gravelle

Just when the African American Museum of Iowa is trying to extend its reach, Executive Director Tom Moore is cutting its staffer in charge of statewide programs. Moore said it’s a case of making the best of a bad economic climate.

“We’re trying to do it with the staff here at the museum, rather than have that person in Des Moines,” he said. “That way we get more from the person — when they’re not on the road, they’re here at the museum.”

The economic recession grinds on, taking its toll on charitable donations, endowment earnings, and operating costs even as many social service agencies see increased demand on their services.

“Almost all of our agencies are reporting increases or significant increases in requests for assistance,” said Christine Scheetz, president and CEO of the United Way of Johnson County. “That has been across the board, all age levels that are served by partner agencies, every demographic. The biggest challenges they’re having are trying to do even more with less.”

The downturn has also taken a toll on endowments, and a tight state budget means cuts in fees the government pays for services performed by non-profits,

“It was common in 2008 for people to see anywhere from 25 to 35 percent negative investment return,” wiping out years of endowment revenue, said Dan Baldwin, CEO and president of the Greater Cedar Rapids Community Foundation.

Endowment revenues have recovered with the stock market — the GCRCF’s was up 18 percent for the year through October — but the uncertainty persists, as it does for agencies that administer government programs at the local level.

Dan Strellner, executive director for Abbe Inc., said its affiliate Aging Services saw cuts in Medicaid reimbursements of 2.5 percent to 5 percent effective Dec. 1. Similar reductions are likely, and Abbe has frozen pay and put off major capital expenditures.

“We haven’t reduced the work force yet, and we hope not to,” he said.

“With the needs as great as they are, I think they are looking for services as the last area they want to see cut,” said Scheetz.

Cultural and arts groups like the African American Museum are doing what they can to seek larger audiences and wider donor bases.

“If they’re cultural organizations they’re going to work harder at marketing, and most organizations are going to burn through reserve funds for the next year, if they have that,” said Bob Untiedt, executive director of the Linn County Nonprofit Resource Center.

There are hopeful signs — only 9 percent of the nation’s non-profits expect to cut staff next year, compared to more than 50 percent between 2008 and 2009, according to a survey by the Chronicle of Philanthropy. But it may be difficult to apply national trends to a community still recovering from natural disaster.

“In Cedar Rapids it’s the same thing as Katrina in terms of impact per square inch,” said Willard “Sandy” Boyd, board chairman of the Larned A. Waterman Iowa Nonprofit Resource Center at the University of Iowa.

“It’s kind of hard to split what is flood-related” from the overall economy, observed Orchestra Iowa Executive Director Robert Massey.

The orchestra’s timing, at least, worked in its favor. “Recovery” planning began even before the flood, putting it in a better position to weather the recession.

“Our strategic plan the board developed in 2007 really saw the need for the orchestra to develop itself as a regional orchestra,” said Massey. “We’re trying to say, ‘We’re your orchestra’” to the entire state.

Formerly the Cedar Rapids Symphony, Orchestra Iowa adopted its current name in September 2008, to reflect an extended reach. The move was at least partly in response to “a tapped-out line of credit” Massey inherited when he took on his job the week before the flood hit.

“We didn’t have any reserves,” he said.

The orchestra subsequently lost three corporate sponsors, at $20,000 to $25,000 each, adding urgency to its re-branding. Revenue has been diversified with the help of a two-year Department of Education grant to fund performances, most often with smaller ensembles, across the state.

“This grant has helped to make up some of what we lost,” Massey said.

That’s especially important for arts and cultural organizations.

“Religion’s at the top of the donor’s totem pole and unfortunately cultural organizations are at the bottom,” said Boyd, noting a predicted 9-percent drop in overall charitable giving,

That’s why the African American Museum is also seeking to expand its reach. Moore said his staff is designing exhibits for easy travel to host organizations across the state.

“We’ve built relationships with people across the state before now, and that’s been very helpful,” he said. “We’re looking at the services we can possibly provide.”

In a few cases, agencies are consolidating “back office” services, most notably in the $15 million, 65,000-square-foot Human Services Campus in downtown Cedar Rapids. Announced in October, the project by the United Way of East Central Iowa will house the offices of the Girl Scouts of Eastern Iowa and Western Illinois, Four Oaks, Aging Services, Neighborhood Transit Services and Iowa Legal Aid.

The state I-JOBS-funded project provides new homes for agencies displaced by the flood, but further cost-saving benefits are likely, said Lois Buntz, executive director of the United Way.

“Co-locating them in one facility seemed to make a lot of sense,” said Buntz. “The development of a shared administrative services was kind of the second purpose.”

Buntz hopes to develop a program to offer administrative services to agencies that aren’t at the campus.

“We want to protect the services to people at all costs, because that’s the most important,” she said. “We hope there could be some cost savings also.”

Abbe Inc. already meets that need for its eight affiliates, providing payroll, human resources and financial services.

“I don’t know if more agencies will be looking at that kind of thing in the future,” said Strellner. “I think there’s some potential there — it takes the right agencies, the right size, and the right missions to make it work.”

Getting endowments healthy again will be a key to long-term stability. Baldwin noted the recession also took a toll on gifts through Endow Iowa, the six-year-old state program that encourages endowment development in estate planning.

“There was a period of time starting with the flood through about Labor Day of 2009 where we saw an enormous decrease in those gifts,” said Baldwin. “In order for people to make gifts they have to have confidence.”

Fortunately, “since Labor Day we’ve started to see a lot more confidence,” Baldwin said. “The last quarter of ‘09 should actually be very strong in terms of endowment giving.”

That’s a good omen for everyone, as skeptics dismiss non-profits’ role in their community at their peril, warns Boyd.

“The non-profit sector has to be there,” he said. “When a business is interested in coming into a community there’s concerns about the work force, but most of the questions are about, ‘What’s life like in the community?’ The non-profit sector is critical to that.”

By Dave DeWitte

With many economists believing the worst is over, one of the worst mistakes business leaders can make now is to wait until the recovery is in full bloom to react.

Matt Miller of Mobile Demand in Hiawatha has thought long and hard about what the recovery means for his company. Mobile Demand designs and sells rugged mobile tablet computers used in business.

Miller expects more sales opportunities, so he’s beefed up his sales team. He’s also expecting more inflation, so he’s preparing to review his pricing more frequently as suppliers adjust their prices.

“We’re going to have to be nimble and quick,” Miller said.

Experts say it’s too early to tell if a recovery has arrived, but when the recovery arrives in full steam, it will be too late to gain a competitive advantage.

One thing for certain — it won’t be the same market as it was before the recession began.

Monica Vernon of Vernon Research, Cedar Rapids, said customers are surveying their customers to find out how their needs have changed, and their market expectations for the months ahead. She said they’re also performing competitive analysis, to find out what customers think of their rivals’ products and services.

Retreating from the development of new products and services is one of the worst things a business can do in a recession, according to Vernon.

“You know, life is long,” Vernon said. “What do the customers need and want so that when the economy does come back, you have the product they’re looking for when they have a few dollars in their pocket.”

Mobile Demand kept right on developing its next-generation tablet, the xTablet T7000, even as the recession cut into sales and pricing of current products. When the recovery comes, Mobile Demand will have a more capable product, Miller said, that will be ahead of the competition instead of behind it.

Vernon said larger companies are also researching morale and attitudes within their current employees. Deep employee dissatisfaction now could be bad news when the economy recovers, Vernon said. Top talent might be easily lured away when they are most needed if they feel they are overburdened or disagree with their current employer’s direction.

Curt Nelson of the Entrepreneurial Development Center of Iowa said even small startup businesses should be doing their market research.

“You have to go back on your marketing database and know what customers you have going forward,” he said. “Call them and find out their situation. Are they still your customer. When do they see the upturn coming?”

Nelson said it’s common during a recession to lose some customers, because many businesses are forced to rethink their business models or product needs.

“They may have gone out of business,” Nelson said.

That brings Nelson to one of his key points about recovery preparation. He advised businesses to “revalidate” their business model.

The needs of customers during an industry downturn often change dramatically, Nelson said. Technology companies discovered that in 2001 when the so-called tech bubble burst. Demand for many hardware-centric products had evaporated in the telecommunications market by the time the industry recovered, replaced by software-based products that offered the same functionality.

Nelson urged companies to carefully begin to build back their marketing and advertising campaigns. He said marketing has a delayed effect, with a six-month cycle being quite common. As a result, companies that have let their marketing and advertising lapse might not notice immediately.

Nelson said companies shouldn’t retreat to a marketing campaign that relies too heavily on social media despite the widespread fascination with the potential of Web applications such as Facebook. Use of the social media doesn’t cut across all demographics, Nelson said, and could be ineffective with some older customer groups.

“Go after your competitor’s customers,” Nelson said, but don’t abandon common sense. Because the recession was so deep, Nelson said some customers may be tottering on the brink of failure, or slow to pay. Making a big sale to them today could be a big mistake if they file bankruptcy tomorrow, and get out of paying.

Before taking big orders from a new customer, Nelson said it’s a good idea at such times to research their credit history.

The problems competitors face can make this a good time for small companies to recruit talent. Top managers may even be bailing out of larger competitors that are struggling with the economy.

The challenge, Nelson said, is to keep the great talent once the economy improves and the job market tightens. Employers may have to offer incentives such as stock options to keep them onboard if they can’t pay them a high enough base salary or bonus, he said.

The threat of inflation during a recovery is worth taking seriously, according to Nelson. He urged businesses to evaluate their debt in order to determine how much is tied to indicators such as the prime rate that could rise dramatically. If it’s too much, Nelson said, businesses should see if they can get their loans restructured with interest rate caps, or a fixed interest rate.

With sales off about 40 percent over the previous year, Doug Grunder could have chosen to stay focused on the issues involved in designing industrial mixers and generating more revenue for his company Marion Mixers.

“In business it’s so easy to get sucked into what’s making you money today and not what’s going to make you money 10 years from now or five years from now or next year,” he said.

If he hadn’t been working with a business coach before the recession, his reaction probably would have been to immediately downsize the company. Instead, the president of Marion Mixers has worked one-on-one with business coach David Drewelow of ActionCOACH for the past year to turn the slowdown due to the economic recession into an advantage.

“I already identified what I needed to do. The recession allowed me the time to do it,” Grunder said. “We worked pretty hard in the down time.”

Marion Mixers manufactures horizontal mixing and blending equipment, supplying equipment in the food, plastic, chemicals, minerals and recycling industries.

Grunder bought into Marion Mixers in 1995 with several other investors. About a year ago, those investor/owners agreed the best long-term strategy in the down economy was to take a hard look at strategies, methods and staff as well as make changes and reinvest any revenue back into the company.

The planning began about 2 1/2 years ago when Grunder began meeting with a group of local business owners, called ProfitCLUB. Those peer group members discussed issues of running a business. Members could ask each other for referrals and how each overcame a particular issue such as hiring or firing, for example.

What Grunder learned in ProfitCLUB helped him realize he didn?t want to immediately downsize when the economy slowed down. Because his company was bigger than those in his peer group and it worked with national and international accounts, not just on a local level, Grunder decided to work one-on-one with a business coach to get the information he needed specific to his business.

Drewelow facilitates ProfitCLUB and Grunder had known Drewelow for years through church. Grunder said he had been negative about consulting, but stressed that Drewelow is not a consultant. There is a big difference between working with a coach versus hiring a consultant, he said. A consultant is hired to complete a specific task. A business coach helps the business owner or manager become as good as he can be, just as a sporting coach helps an athlete, Grunder said.

Coaching is an accountability process, Drewelow said, and the coaching relationship is not about what a coach does for his client, but what they do together. For example, it wasn’t Drewelow’s job to develop a 2010 plan for Marion Mixers. That was Grunder’s job.

Drewelow works with Grunder to break that one-year plan into 90-day increments. When they meet twice a month, typically at 7 a.m. for breakfast, it’s the coach’s job to ask the business owner if he’s meeting his short-term and long-term goals and not just dealing with day-to-day issues. Together they work out what needs to be done on the plan over the next two weeks and what tools Grunder may need to assist him.

One of the first things Grunder did to achieve his goal of having a company that can run without him, was to add another layer of management. Previously, all 35 employees reported directly to him. Over the past year, he’s changed that to three who directly report to him, each of whom is responsible for a group of employees.

“That’s a big change,” Grunder said.

Over the past year, he has reorganized his entire business to make it stronger and position the company to grow as the economy turns around. For example, he laid-off employees in some areas, but hired in other areas. Training manuals and documentation were upgraded. And, there’s even been an expansion of physical space to house the additional employees Grunder expects to hire as the market turns around.

In the manufacturing area, major changes have been made. A bright spot in the company’s key industries is the huge growth potential in the area of recycling and the equipment needed. That has been reflected in the company’s long-term plan. The engineering group was restructured to better handle project work flow.

Grunder also delegated key accounts to sales staff so he could go after new accounts. Sales representatives were measured and evaluated and about half were replaced. A slower manufacturing schedule meant he could take the time to identify and recruit the best people available for jobs. Grunder hired a national sales manager who is restructuring the sales organization. More recently, the company hired an international sales manager.

The leadership team of three attends training and is taught what Grunder learns from Drewelow. To continue working on improving his business, Grunder continues to meet with Drewelow and his peer group.

“He’s always looking for ideas to make himself and his business better,” Drewelow said. “I really commend him for taking a proactive position to work on his business ? because his business is better today.”

A big piece of coaching was not about Grunder’s work, but what he does in the rest of his life. Drewelow asked him to evaluate leisure activities, physical health and more. People should know why they are doing what they are doing, Drewelow said. For most people, it’s just about the money but Grunder has a passion for mission work and wants to use his business to support that and other non-business goals.

Grunder’s plan is to essentially retire in 12 years. His exit strategy is not to sell his portion of the company, but, rather, use his dividends from a successful Marion Mixers to fund mission activities in Haiti, on American Indian lands and elsewhere.

For the time being, though, he’ll stay focused on work.

“There are a lot of things that have changed in the last year – and probably more that are going to change,” Grunder said. “I think we’ve positioned ourselves real well for when the market turns around.”

The business:

Marion Mixers

3575 Third Ave.

Marion, Iowa 52302

(319) 377-6371

www.marionmixers.com

The consultant:

S. David Drewelow

Head Coach, USA Iowa/Nebraska Team

ActionCOACH

415 First Ave. SE Suite 215

Cedar Rapids, Iowa 52401

(319) 743-0642

www.daviddrewelow.ActionCOACH.com

This feature shows how business experts have helped entrepreneurs address specific issues that face small businesses.