Retirement plan should start with basics

By David Stoeffel, for SBT

As the first of the baby boom generation enters into their retirement years, many are scratching their heads, wondering if their investment safety blanket will cover them throughout retirement.
This is where sound planning can make the difference between a comfortable retirement and one filled with sleepless nights. A few important issues should be considered as part of any plan to reach retirement goals.

Portfolio structure is key
The key to long-term investment success is asset allocation — or how your portfolio is spread between stocks, bonds, cash and other assets. That is the most important part of the process and will have the most impact on investment results. Each individual has a different set of investment needs, risk tolerances and investment savvy.
The reality is there is no guaranty that every allocation will have the desired results, but staying the coarse is critical. Retirees must determine the allocation that allows them to sleep well at night while still generating the income and growth required for a comfortable retirement.

Save in retirement accounts
To encourage retirement saving, federal and state laws provide an array of investment accounts and programs that offer income earners attractive tax benefits, including 401(k)s and Individual Retirement Accounts (IRAs). Depending on your situation, your contributions to such accounts may be tax-deductible. Even better, you don’t pay taxes on the income and capital gains generated by the investments in the accounts until you retire (in the case of the Roth IRA, none at all).
Taking advantage of those accounts should be a priority to anyone serious about growing his or her retirement nest egg. Industry experts, however, report that a high percentage of workers under-utilize retirement investing opportunities. For example, a recent publication by "Retirement Confidence Survey" reports that three in 10 claim they have not saved at all for retirement.

Investment selection
Investment selection for retirement, like the portfolio construction process, should be made with the help of a financial consultant. While no solution is universal, a few simple guidelines should be considered by anyone investing for retirement:

A new networking group has been started in Milwaukee for owners and managers of start-up companies, with its inaugural meeting tonight.
The group, Emerging Entrepreneurs, is being coordinated by the Marquette University Kohler Center for Entrepreneurship and the Metro Milwaukee Association of Commerce (MMAC).
The group will focus on “results-based programming.”
Owners of companies that have been in business for more than three years are invited to attend Emerging Entrepreneurs meetings to share their knowledge from a “been there, done that” standpoint with owners of businesses that have been operating for fewer than three years.
Business owners are encouraged to attend one meeting as a “guest” to get a feel for the group and its focus. However, to be eligible for group membership and continued meeting attendance, a company must be a member of the MMAC.
The group’s first meeting is Monday, June 9, from 3:30 p.m. to 5:30 p.m. at Eve Restaurant, 718 N. Milwaukee St., second floor. Robert Auer of Auer Marketing will present “Marketing on a Tight Budget.” Attendees are asked to bring a sample of their current marketing materials to share and review at the workshop portion of the event. There is a $10 fee at the door.
Meetings will take place on the second Monday of each month, from 3:30 until 5:30 p.m. at a downtown Milwaukee location. Upcoming meeting dates are July 14 and Aug. 11. At the July 14 meeting, Liz Ferris of Ferris Consulting will present “First Impressions, Lasting Impressions.” On Aug. 11, Mark Zellmer of Northern Oak Capital Management will present “Entrepreneurial Finance – Come ready to share your frustration with getting funding as a brand new business.”
For more information, contact Moss at 414-287-4159 or Kay Bokowy, director of special programs at Marquette’s Kohler Center, at 414-288-6441.

MEDC loan will help manufacturer consolidate

A local manufacturer and distributor of bearings was awarded a $500,000 loan from the Milwaukee Economic Development Corp. (MEDC) to consolidate from its current three facilities into one location.
The company, Krueger Bearings, now operates out of separate facilities in Menomonee Falls that have a total of about 16,000 square feet of space.
Owners Terry and Ann Krueger want to buy a 51,136-square-foot manufacturing building at 8811 W. Dean Rd. in Milwaukee to consolidate the Krueger Bearing operations. The Kruegers also own Krueger Investments.
The company has 55 full-time and four part-time employees.
TCF National Bank is also participating in financing of the $2,150,000 project. MEDC approved financing for the project at its June 2 loan committee meeting.
One of the Krueger buildings, a12,500-square-foot industrial facility at N54 W13667 Woodale Dr., was sold to XL Machines which will expand its operations in the facility, according to NAI MLG Commercial, which handled the transaction.

The MEDC loan committee also approved a $55,700 loan for Café Selah, which will be created in the new Burleigh Street Community Enterprise Center at 5312 W. Burleigh St. in Milwaukee.
The $2.5 million center is being developed by the Burleigh Street Community Development Corp. on the site of the former Zach’s/Petrof’s bowling alley. It has retail and office space.
Venner and Bill Alston of Mequon are planning the coffee shop and deli in the center. They plan to have three full-time employees and one part-timer employee in the café.
Legacy Bank is also financing another $83,600 for the café.

Witlib Holdings was approved for a $184,000 loan from MEDC for Good Hope Manor Milwaukee.
Linda and Chris Witzlib of Port Washington intend to purchase a residence at 7070 N. 124th St. in Milwaukee and convert it into a community based residential facility that would accommodate seven adults.
Port Washington State Bank is providing another $276,000 in financing for the project.
The business would employ six people full-time and four part-time.

MEDC also approved a $232,000 loan for Joseph A. Santoro Real Estate, Santoro Corp., Green Hills Landscaping, and Commercial Landscape Maintenance.
Joseph Santoro plans to buy approximately one acre of land at 1205 W. Mt. Vernon St. in Milwaukee and construct an 8,000-square-foot building there for his landscaping and snow-removal businesses.
He currently employs 25 people full-time and would hire an additional 10 to 20 people through the development project.
TriCity National Bank is financing another $348,000 for the Santoro development.

June 13, 2003 Small Business Times, Milwaukee

City of Milwaukee may license residential landlords
Property owners say policy would be money and power grab by city

By Charles Rathmann, SBT Reporter

The City of Milwaukee may consider requiring residential landlords to pay licensing fees for their properties, even though a study recently completed for the Department of Neighborhood Services (DNS) advises against the policy.
If the policy is adopted, owners of residential rental properties would have to pay a fee and submit to periodic inspections of properties.
"We are always looking at alternatives," DNS Commissioner Marty Collins said. "Many cities do this. One of the reasons for considering this is that I continually am asked by the common council about alternative methods of funding code enforcement."
Representatives of other departments of the city, including the Department of City Development, refused to comment on the likelihood of the policy.
According to Collins, the city’s current code enforcement system of enforcement, which relies on complaints to drive inspections and fines, is faulty.
"There is a substantial amount of fear on behalf of tenants that if they allow an inspector in, they will be evicted," Collins said. "If people are afraid to use that system, the system won’t work."
However, a prominent Milwaukee landlord claimed that market forces are more likely to ensure quality housing than universal licensing fees and a new city bureaucracy.
"We have seen this come up before," Jim Wiechmann said. "We have had this issue discussed and rediscussed. The last time the city looked at this was the late ’80s … It doesn’t make any sense when 95% of the landlords in the city abide by the law. Among landlords, if they are big, they are professional, and the competition is intense. Everybody is pretty service-oriented."
Wiechmann acknowledged that some bad apples exist in the city, but he claimed they would continue their antics even if licensing were in place.
"A couple of people who flip properties and hide their ownership will still do the same damn thing," Wiechmann said. "All this would do is put more governmental control on the market as a whole. If they want additional funding, that is understandable. Everywhere in the city, officials want to find some additional funding, but with the license goes control."
Wiechmann suggested alternative methods of funding code compliance for DNS.
"We multifamily owners already pa
y special billings on our garbage pick-up, over and above what a single family residence pays," Wiechmann said. "Why don’t they raise the real estate taxes? Not that I want that to happen, but that would be a hell of a lot less onerous."
A study conducted by graduate students at the University of Wisconsin-Madison’s La Follette School of Public Affairs concluded that licensing would not be an effective policy tool, according to Andrew Rechovski, the professor who taught the two workshop courses.
"We conclude that Milwaukee should not implement licensing because the policy would be expensive, meet strong political opposition, and cause more problems for Milwaukee’s rental markets than it would solve," the study stated.
Collins was critical of the methodology used in the study and questioned the fact that politics played a role in the recommended course of action.
"The students focused on the fact that licensing system advocates lack political clout opponents have," Collins said. "But in the end, I think we have no idea what the common council would do."
The study was presented to Mayor John Norquist and other policy officials
May 9.
"There seemed to be interest," Rechovski said. "There were some questions by the mayor. The basic recommendation of the students was not to move forward with this recommendation."
According to Rechovski and Collins, the city’s Office of Management and Budget has frequently tapped the LaFollette Center for policy research for various city departments. Mayor Norquist is a graduate of the program.

June 13, 2003 Small Business Times, Milwaukee

Are you an organizationally savvy salesperson?
Do you ask these two questions?

by Jerry Stapleton, for SBT

Every sales cycle is profoundly influenced by political factors, whether we like it or not. Salespeople must remember that in the real world of corporate life political reasons trump business reasons for any decision, including a buying decision.
That’s why something I call "organizational savvy" is arguably the single most important competency required for successful business-to-business selling.
Want to test your own organizational savvy? Solve this case: After nearly a yearlong sales cycle "Eric," a veteran financial software salesperson, sold a huge deal to the chief financial officer at one of his key accounts. The two had celebrated closure of the sale via dinner with their spouses. And the CFO had made all the appropriate announcements inside the company.
A week into the installation of the software a very embarrassed CFO, tail between his legs, called Eric with some devastating news: the company had decided to cancel the purchase and would de-install the components that had already been installed.
It seems the chief information officer, who hadn’t been very involved in the buying process, killed the deal. According to the apologetic CFO, the CIO had cited some esoteric technical issue for rejecting the software.
Oh, this one’s a no-brainer — Technology Sales 101 says you gotta involve the CIO! You’re right, obviously. But are you right for the right reason? Let’s find out. Start by factoring this into the mix: the chief information officer reports to the CFO.
In the real world of corporate life there is no way that an executive would allow a subordinate to give him such a black eye as occurred in the story above. After making such a public display of his decision to buy the software the CFO would simply tell the CIO — in so many words — "Make it work!"
What makes this case even more unusual is that the purchase in question is financial software. Who should be more influential on such a purchase than a company’s CFO? And then to be upstaged by a subordinate, no less? What’s wrong with this picture?

The one most important political question
Eric was at a loss. When he related the story to me, the situation was still warm. So I gave him one question to ask his lower-level contacts about the players involved in this decision: How long have the CFO, the CIO and the president been with the company? A few days later Eric called me back. The bottom line: The CFO had been with Eric’s target company for 20 years. The president had been with the company for about a year, the CIO had been hired six months ago, having come from the same company as the president.
Is it getting a little clearer? Sure, it’s obvious by now. The CIO, while officially reporting to the CFO, actually carried more influence in the company — and not just on IT matters — than his own boss.
That insight was critical to the outcome of the sale, but Eric had not bothered asking the one question that would have yielded such insight. He had relied, like most salespeople would, on the title of the executive buying his financial software. Eric was, after all, talking to the "CFO," and on financial software, for crying out loud. By most measures, Eric was in the catbird seat.
Unfortunately for Eric, he failed to ask the one question that all salespeople should ask but few do: "How long has ‘so-and-so’ been with the company?" While there’s more to a sound political analysis than just this question, knowledge of how long contacts have been with the company, or in their current positions, can reveal a lot about the level of influence of those contacts.

One really bad political question
There’s a good chance Eric had, earlier in the sales cycle, also asked the CFO that classic Vendor question: "Who else should I be talking to?" To which the CFO probably responded with something like, "There’s no need to talk to anyone else, this one’s my baby." Who’s going to argue with that?
Why is, "Who else should I be talking to?" such a bad question? First, what if — as in this case — the contact says, "Nobody!"? You’ve just boxed yourself into a corner. Second, if the contact does give you a name, it’s almost certainly going to be a low-influence contact, and often a gatekeeper at that.
Remember the great quote from Margaret Thatcher: "Being powerful is like being a lady; if you have to tell people you are, you aren’t!" If you keep this quote in mind, avoid the one bad political question, and always find out how long contacts — and those above and around them — have been with the company, you will be well on your way to cultivating your own personal political savvy.

Jerry Stapleton is president of Stapleton Resources LLC, a Waukesha-based sales force effectiveness practice. He can be reached at 262-524-8099 or on the Web at www.stapletonresources.com.

June 13, 2003 Small Business Times, Milwaukee

A piece of the pie
Private companies offering equity to executives as retirement perk

By Charles Rathmann, of SBT

Federal and state regulations make it difficult for highly paid executives and managers to set aside pretax reserves sufficient to maintain their lifestyles after retirement.
However, gap-planning tools such as nonqualified deferred compensation plans can help companies close the retirement gaps for their key people. Those plans work around federal discrimination laws that might otherwise require all employees to receive identical benefits.
"If a company has a key employee it wants to take care of and wants to do an extra benefit for that person, (deferred plans are) the easiest and most often used," said Terrill Jannsen, managing shareholder and president of Jannsen & Co., Waukesha. The accounting and business consultancy firm works with privately held businesses.
"The big thing with deferred compensation is that you need to pay it out for it to be deductible for taxes," Jannsen said. "It cannot be deducted until it is paid out to the individual. Companies can choose either to fund it or not fund it and just pay it out of current earnings. Some will use a life insurance product to fund it."
In an uncertain economy, some companies are loathe to guarantee income or pay a premium not tied to results, and that is affecting the types of deferred benefits companies are using in the last two years.
"We will see all different types," Jannsen said. "There can be a fixed-payment based on years of service, situations where they base it on production of a person. Specifically in an insurance situation, they will base it on their last 10 years of production. In our firm, it is based on years of service and value of the firm."
According to Executive Search Partners president Nick Curran, risk aversion is having a major effect on gap planning, inducing many owners to ask executives to take a stake in the company instead of a free ticket for the gravy train. Curran represents free-agent executives and also works with companies recruiting talent.
"Businesses in these times are not willing to take all the risk because they have felt the pain of that upside," Curran said. "They are looking for execs that are willing to be tied to the success of the organization. You have to put some skin into the game if you want to play."
This situation might actually work in favor of executives interested in ownership, according to Curran.
"Equity is more likely now than it has ever been … More execs would love to say they would like to have some equity," Curran said. "In good times, if the company is doing well, the company is more likely to tell an executive interested in equity, ‘We don’t need you.’ But with more companies having trouble, there is more opportunity for ownership."
An example of Curran’s assessment is Bob McCormick, chief executive officer of Xymox Technologies, Milwaukee. McCormick was recruited in 2001 from a position as president of Newell-Rubbermaid’s Mirro cookware division. The move from the publicly held sector and attractive supplemental executive retirement program (SERP) benefits to the private sector was a major change.
"That was a very attractive program for key high-level presidents or people working in a corporate executive capacity," McCormick said of the SERP. "If you worked with the company for 10 years and you retired at a normal age, your additional retirement benefit would be 80% of your highest five consecutive years of earning."
The switch to Xymox also involved a move from flying on corporate jets to low-dollar commercial air travel, but McCormick knows he will get his share of each dollar saved. Xymox is owned by Horizon Partners of Milwaukee and Naples, Fla., a private-equity group that is expected to sell the company within a five-year timeline. That means McCormick can expect a taste of the increased value of the company.
According to Curran, an investor with Horizon Partners, executives can do very well managing a company like Xymox – if they are effective.
"They might say, ‘Give me a base of $250,000, plus incentives, plus options,’" Curran said. "And we might say, ‘How about this: $150,000 and 2% equity in the company?’ With a $50 million company that might sell for more than that in a few years, they say, ‘OK; I can make a million dollars.’
"What is interesting about the privately held company, owned by a private-equity group, is it still has the base and the bonus, but the way private equity groups work, they buy, build and sell businesses. Their top-level execs make their money on the sale … There is the big carrot out there called the potential, based on what you could make on the successful sale of the business," Curran said.
To build that potential, McCormick is implementing the strategic and management moves he learned in corporate life to Xymox, a 400-employee company that manufactures switches used in flat-panel displays on items such as dishwashers and microwave ovens.
The company has eschewed some markets for others where it can compete more profitably and has nailed down about 98% of the gas-pump market.
"We have just recently won a major business segment at Whirlpool in the appliance industry," McCormick said. "We were the only new membrane switch supplier brought into the fold at Whirlpool. We were in the process of testing and launching the product."
McCormick is tightening up the strategy even further and is already working on the first revision to the company’s first-ever strategic plan.
"That was part of everyday business at Newell, but there are certainly smaller businesses out there that don’t think that way," McCormick said.
McCormick also has filled Xymox’s executive-level stable with a new chief financial officer, vice president of global operations and vice president of global sales. Strengthening Xymox’s Asian manufacturing presence is also on the company’s agenda, according to McCormick.
As Horizon Partners reaches its five-year liquidity event, McCormick looks forward to taking on another assignment with another company in the area.
"Financially, I think you can come out ahead," McCormick said, comparing working in the private vs. corporate sector. "The normal formula is about a five-year period of time for a private equity firm. If you are 40 years old and you begin doing business in the private equity market, by the time you turn 60, you could have theoretically done four of these."

June 13, 2003 Small Business Times, Milwaukee

Am I settling for less than I want when I’m flexible?
By Christine McMahon, for SBT

Question: When I think about being flexible in a negotiation, the idea seems like I am accepting less than what I wanted. Is this true?

Answer: Some negotiations flow rather smoothly and agreement is reached without too much difficulty. At other times, especially when dealing with complex negotiations, making adjustments is necessary to find common ground. How well you do this is determines how quickly you reach mutual agreement and the overall quality of the outcome.
During your pre-negotiation planning, you need to define your minimum acceptance on all issues such as price, delivery, quality and terms. That will help you assess the acceptability of the other party’s demands and requests.
Your initial offer should represent your ideal outcome — without being too unrealistic.
For example, if you are negotiating to make a purchase and the asking price is $45,000 and you want to pay a bargain basement price, you might begin by offering $32,000. The gap between the two figures, $13,000, represents the amount to be negotiated.
To be successful in a flexible negotiating world means that not only must you establish your negotiation limits before you start, but you must be loyal to them.
Begin by asking yourself: "What is my bottom-line negotiating position?" Your response will be your walk-away position no matter what the negotiating situation is.
Unsatisfactory deals result when people fail to establish limits before negotiating or exceed them by rationalizing that what’s been offered is better than no deal at all. This is a huge mistake that erodes profit margins, confidence and the viability of long-term profitable business relationships.
By establishing your bottom-line position, you are also creating a benchmark for measuring your concession strategies. A good rule of thumb is to make concessions slowly and make concession progressively slower. That will make the other party feel that you are getting close to your walk-away position.
Also remember to ask for concessions in return for those things that are most important to you. That establishes value for what you are giving up, and you don’t come across as someone who succumbs under pressure.
Be mindful, if someone is trying to force an unfair deal on you during negotiations, that person will be just as unscrupulous in any future dealings you have with him or her. How you negotiate upfront sets the tone for future dealings.
Oftentimes during negotiation discussions, issues are raised that require adjustments in a negotiating position. It may be the result of something substantive recommended by the other party, or your own realization that there are factors your original position did not take into account. On other occasions, both parties may adjust their positions in an attempt to find a more appealing solution. Whatever the reason, there are certain safeguards to take when you’re contemplating any extensive changes in your negotiation plan.

First, take the time to evaluate the substantive changes. Be sure you have looked at all angles so you can be certain if the offer meets your criteria. It is not unusual, when going back and forth, particularly in complex negotiations, to overlook a small item that may have significant implications down the road.
For example, if you are buying $500,000 in new computer equipment for your company, you learn after the fact that the software that "comes" with the new equipment is not what you wanted. It costs an additional $63,000 to get what you need. Or maybe you overlooked the service agreement. Two years later when you have a problem with a piece of equipment, you find out that the other party reduced the original offer from five years down to one to reduce the price. Now, two years later, you are forced to pay the full labor and repair price.

Second, it’s always in your best interest to have another person within you company or who is "on your side" review the details. It’s not uncommon to miss critical elements when you have been going back and forth over a considerable amount of time.
A business owner I am close to was in the process of buying a company. Contention between the two parties over the wording of a specific paragraph in the contract stalled the transition. Ten months later, they finally reached consensus. Both parties, with their attorneys present, signed the new and final copy of the contract. The next day, the person purchasing the company noticed that the entire paragraph they had been arguing about was completely missing from the document.
After a great laugh, and much embarrassment on both attorneys’ behalf, an addendum was added. Interestingly, everyone in the room recalled "seeing the paragraph." Time and talk can play tricks on you.

For your own benefit, it’s a good rule of thumb to always assume that the other party has invested considerable time and deliberate forethought in determining their offers. Take time to get the information you need so you make an informed decision. Map out options. Determine which one(s) offers the greatest building relationship quotient while protecting your interest.
Having clarity about the outcomes you want to achieve will help you determine the best strategy to achieving a mutually beneficial agreement.

Christine McMahon is the owner of Christine McMahon & Associates, a training and coaching firm in Milwaukee. She can be reached at 414-290-3344. Small Business Times readers who would like a negotiating situation addressed in this column can send a fax to 414-290-3330, or e-mail her at: ccm@christinemcmahon.com. Her column appears in every other issue of SBT.

June 13, 2003 Small Business Times, Milwaukee

The sandwich generation
How baby boomers can cope with unprecedented multigenerational responsibilities

By Susan Paprcka, for SBT

sandwich generation
n. People who must care for both their children and their parents; people who have finished raising their children and now must take care of their aging parents.
Also: sandwiched generation.

club-sandwich generation
n. People who provide care for their parents, children, and grandchildren.
(trademark, Carol Abaya, M.A.)

It’s a fact – people are living longer, healthier lives in the 21st century. And most people would agree that’s good news. But the situation carries with it burdens that no other generation in years past has had to shoulder – multi-generational care responsibilities.
Due to increased longevity, middle-aged children today are the first to be living in an age where a three-, four- or even five-generation family is becoming the norm.
Many of those "boomers" who have spent their careers working hard and envisioning a restful retirement are finding themselves caught in a "sandwich" or "club-sandwich generation," with responsibility for their children, step-children, parents, step-parents, aunts, uncles, grandparents and so on.
Add to the mix the stress of the recent unstable stock market, rising health care costs and rising educational costs, and you have the recipe for a very anxious generation – not only regarding those they must care for, but concerning their own futures, as well.
"This generation is extremely time-stressed," says Will Ruch, managing partner and CEO of Versant Solutions, Milwaukee. "They’re searching for anything that will give them a feeling of relief and a sense of efficiency."
According to Ruch, who also feels the squeeze of the "sandwich generation" with four children under age 15 and an aging parent to care for, baby boomers seek strong relationships and long-lasting value.
"They often think of themselves as ‘too young to be old,’" he says. "And they spend a huge amount of resources on denying that they’re aging."
Old talk, new resources
According to estimates, there are approximately 78 million baby boomers in the US, described as born between 1946 and 1964. Studies reveal that women, especially daughters and daughters-in-law, comprise 85% of people who are taking care of an elderly relative. American women average 17 years caring for children and can expect to devote 18 years to taking care of an elderly parent. And nearly 40% of such women do so while maintaining a full-time job.
"One of the challenges is that people are living longer with more chronic illness," according to Phyllis Mensh Brostoff, co-founder of Stowell Associates/SelectStaff in Shorewood.
Brostoff’s company provides a combination of professional care management and paraprofessional caregiving services to the elderly and their families.
Founded in 1983 with partner Valerie Stefanich, Stowell Associates was the first private professional geriatric care management company in Wisconsin and one of the first in the country. In 1996, SelectStaff (www.elderselectstaff.com) was incorporated to provide paraprofessional caregivers to elderly and disabled adult clients and their families.
"We saw a need for people who could afford quality personalized care-giving services," says Brostoff. "And our care managers help families with difficult decisions when they might not no where to turn."
Stowell Associates assists families with how to appropriately care for an aging loved one, addressing such questions as: Should they be driving? Can they cook for themselves? And, are they safe living alone? The company conducts assessments of individual situations using both formal tools and informal observations.
Both Brostoff and Stefanich were co-founders of the National Association of Professional Geriatric Care Managers and are currently board members. Brostoff also co-authored a book, Old Talk New Conversations: A Planning Guide for Seniors and Their Families (Elton-Wolf Publishing), which was a collaboration of five local experts in the field that included Brostoff, Matt Furno, John Herbers, Paula Hogan and Steven Koppel.
The book is an attempt to help readers think about and prepare for the day-to-day realities of aging, and is designed to facilitate conversations between older people and their families so that comprehensive planning and informed decisions will ensure the best quality of life possible.
"The keys to enjoying later life are understanding and planning for what lies ahead," says Hannah Rosenthal, regional director, U.S. Department of Health and Human Services, who wrote the forward for the book. "It is never too late – or too soon – to begin. Being prepared and talking frankly can help ensure that as you age you are enjoying the best quality of life possible."
Old Talk New Conversations focuses on five key areas related to getting older. Hogan, a financial planner, addresses the financial implications of retirement and post-retirement living.
Herbers, an attorney, covers legal issues related to estate planning and asset transfer.
Koppel, an insurance agent, looks at long-term care insurance and other alternatives to address the costs of long-term health care.
Brostoff, a geriatric social worker, examines home care options and alternatives.
Furno, a licensed nursing home administrator, explores the purposes and functions of senior living.
Brostoff also believes in continuous learning for aging loved ones, and highly recommends the University of Wisconsin-Milwaukee’s Guild for Learning in Retirement.
"This is an excellent program where elderly people can both continue learning and socialize," she says.
The Guild for Learning is a combination of lectures and short courses based on broad-ranging topics. There are also Peer-Directed Special Interest Groups (SIGs) that meet regularly for study and spirited exchanges. Founded in 1982, the Guild is described as a growing association of older adults interested in lifelong learning and cultural enrichment.
Succession planning
From the baby boomers’ personal and professional perspective, Brostoff adds that small-business owners in this generation, in particular, need to consider the many facets of succession planning; figure out who is going to take over the business and how much money they will need to continue to draw from the company.
"The challenge is deciding at what point they can see themselves as separate from the business," she says. "Which is very difficult for business owners who have many times spent so much time with the business that they’ve had time for little else."
Aside from dealing with the financial aspects of succession planning, there are many personal considerations as well that need to be realized.
"Small-business owners planning their retirement need to do more than just plan financially, they need to discover something outside of the business that can give them the same level of satisfaction. This in itself could be a challenge."

June 13, 2003, Small Business Times, Milwaukee

Local architect has inside track to land City Hall project
$40 million restoration will begin next spring

By Steve Jagler, of SBT

The City of Milwaukee expects to select an architect this month to lead the $40 million historical restoration of City Hall.
The Milwaukee Department of Public Works solicited a request for proposals in February and received seven responses, according to Venu Gupta, director of buildings and fleet services for the department.
The department is final negotiations with Engberg Anderson Design Partnership, which recently completed renovation of the nearby Pabst Theatre.
The architect and the department will then select a general contractor, Gupta said.
"We were looking for people who had experience in historic buildings and buildings of this scope and significance," Gupta said. "We’re hoping in the next couple of weeks that we have this worked out."
City Hall, located at the corner of Wells and Water streets, is perhaps the most recognizable structure on Milwaukee’s skyline, with the possible exception of the US Bank Center.
"We have been selected, and we are now in the process of negotiating with the city on the terms," said Charles Engberg, founding partner with Engberg Anderson. "We’re pretty excited about this project. We feel blessed to have been given the opportunity to work with the city on this project."
Original construction of the Flemish renaissance building was completed in 1895. The building received substantial renovations in 1919, the 1930s, the 1950s and the 1970s.
The structure, Gupta said, is due for significant rehabilitation. The work will include:

Employers opting for voluntary dental plans
Humana launches low-cost option to block growth of Delta Dental

By Charles Rathmann, of SBT

While many employers in southeastern Wisconsin continue to pay part of their employees’ dental insurance premiums, some employers are making dental benefits optional, while others are switching to arrangements similar to vision insurance discount plans.
Small business is becoming a fertile marketing ground for discount plans, according to industry figures and dental executives in Wisconsin.
Larger employers still tend to pay part of their employees’ dental premiums, according to figures from Limra International, a Windsor, Conn.-based international association providing research, consulting and other services to nearly 850 insurance and financial services companies.
According to Limra, among companies with 10 and 99 employees nationwide, 51% offer dental benefits. However, that percentage expands to 69% in companies that employ between 20 and 99 and to 88% in companies that employ between 100 and 499.
While dental benefits vary by company size, however, they have not changed much over time, according to Lynn Steinle, a partner and broker for Strategic Employee Benefits Services in southeastern Wisconsin. The company, which has 95 offices nationwide and insures more than 10,000 people in 300 groups in southeastern Wisconsin, is part of the Northwestern Mutual Financial Network.
"The benefits have not changed in 20 years," Steinle said. "The maximum benefit has been at $1,000 and has been there for more than 15 years. Employers are not upping that amount with health care inflation. There is typically a $25 or $50 deductible, but preventive is paid at 100% and simple fillings at 80%.
"Major oral surgery is paid at 50%. There is typically a separate $1,000 benefit for braces or orthodontics."
Other benefits, including flexible spending accounts (FSAs), preferred provider organizations and other delivery methods, have failed to penetrate the dental market, according to Steinle, because dentists have historically been up front communicating about prices and the rate of inflation has been in the single digits.
FSAs, like dental insurance, provide a pre-tax way to pay for dental costs, but employees risk putting too much in the account and losing it at the end of the year.
While Steinle and other professionals are seeing many firms shave costs off their benefit package by making dental benefits voluntary, many employers are still contributing to make sure their package remains attractive.
"You do see plans where the employer is still contributing to the premium," Delta Dental field service representative Jackie Bloomer said. Bloomer handles southeastern Wisconsin for Delta, the market leader for dental insurance in the state. "We still see a lot of the voluntary plans too."
According to Bloomer, Delta has been gaining ground in southeastern Wisconsin at a rapid pace, adding 150 small groups here in 2002.
"The most popular products are managed fee for service plans with 50% or greater employer contribution," Bloomer said. "The second-most popular is a voluntary plan."
While Delta Dental owns the largest piece of the dental insurance pie in the state – with a market share hovering at about 30% — Humana Insurance’s wholly owned dental insurance subsidiary is gunning for some of that market with some new products.
"We have introduced a new product," said Humana Dental president Gerry Ganoni. "What we are seeing employers doing is dual-choicing, and we want to accommodate that. They are saying, "We will pick up the cost of a low-cost plan, but if you choose to buy a better plan, the employee can pick up the difference. There are dual options."
Ganoni said the dual-choice product was gradually rolled out last summer, because of the drubbing Humana has been taking at the hands of competitors such as Delta Dental.
"That is the reason we are doing it," Ganoni said. "We would like to see our penetration numbers close to the numbers you see from Limra. It is important to consider that when an employer buys medical from us, it makes sense to buy dental, too. You have one plan administrator – one contact. It makes life very easy for them."
Bloomer and Ganoni agree that rapid increases in health care coverage costs are commanding the attention of business owners and benefits managers, while dental insurance coverages are increasing at a snail’s pace.
However, Bloomer is seeing health coverage cost increases inducing employers to keep their rich dental packages as a way to make sure their benefits package remains attractive.
By contrast, Ganoni believes employers feel the pinch and want to cut their contribution to dental benefits to compensate.
"The employers are being faced with large increases on the medical side," Ganoni said, stressing that the number of Humana health insurance customers opting into the company’s dental insurance has been slipping. "That is resulting in a large deficit of discretionary dollars. The percentage of the dental of that medical market has been dropping for us. In the small group market, two to 99 employees, what we saw in 2000 was that 24.3% were also buying dental. The most current data through April, we are seeing that number down to 20.3%.
"That tells me most of the time that employers are unbundling the dental and medical," Ganoni said. "We are not buying as much dental as in the year 2000. We are seeing the same thing in the 100-plus group size, with a drop from 21.5 to 19.8."

June 13, 2003 Small Business Times, Milwaukee

National franchise heats up Milwaukee’s ice cream market

By Mark Kass, for SBT

The Milwaukee ice cream market, already crowded with shops dishing out their favorite flavors, is getting a new national competitor that hopes to grab a large scoop of local business.
Cold Stone Creamery, based in Scottsdale, Ariz., recently opened its first two stores in the Milwaukee area, at the Ruby Isle Shopping Center in Brookfield and the RiverPointe Shopping Center in Fox Point.
Other new Cold Stone Creamery stores are slated to open in the next several weeks at Mayfair Mall in Wauwatosa and as part of new shopping center near Highway 83 and Interstate 94 in the City of Delafield.
Additional stores are planned for Kenosha, Janesville, Appleton and Madison. In all, the company wants to have 30 stores in the Dairy State within the next five years.
The company is ready to take on Kopp’s Frozen Custard and Leon’s, the two most well known ice cream retailers in the Milwaukee ice cream market.
"We want to have a major impact on Milwaukee and Wisconsin," said Dale Johnson, a real estate representative for the company. "So far, our numbers are good in the Milwaukee area, and as people get to know our name and try our product, we believe our numbers are only going to get better."
Cold Stone Creamery, an independently owned franchise system, was developed in 1988 to offer combinations of customized ice cream creations. Matt and Lisa Gangl operate the franchise at RiverPointe, and Jay Miller operates the franchise in Brookfield.
With more than 390 stores operating in 36 states and the Caribbean, Cold Stone Creamery plans to establish 1,000 stores by 2004. Its real estate team has already fully executed 169 leases in 2003, with another 70 leases currently in various stages of negotiation.
The company’s goal is to be "the second best thing in Milwaukee, next to beer," Cold Stone Creamery spokesman Kevin Donnellan said.
"We have a very unique product that attracts people who really like ice cream," he said. "We are a lot like a micro-brewery and aim for a more sophisticated palate. It is much different than the hard pack ice cream you find at other stores."
The uniqueness of the product is that the ice cream is homemade and mixed up right in the store on a frozen granite stone. Donnellan said the process allows Cold Stone Creamery to offer flavors that other ice cream retailers can’t.
The company’s stores average 1,600 square feet and have as many as 30 employees, many of them high school students looking for extra income. The stores average about $358,000 in annual sales.
"We do very well in high traffic areas, such as malls, or in residential areas where we are more of a destination retailer," he said.
At the recent International Council of Shopping Centers Convention in Las Vegas, the company’s booth, where free samples were being handed out, was one of the busiest in the convention hall that was filled with some of its competitors. Employees sang popular songs as they mixed flavors for customers.
"We try to have fun in our stores and engage our customers," Donnellan said.
Donnellan said Cold Stone Creamery is one of the fastest-growing franchises in the nation. In fact, the company’s prospective franchise applications were up 257 so far in 2003, with 1,621 applications received in April 2003 alone.
"There is a tremendous amount of interest right now in what we have to offer," he said.
The only place that prepares a similar ice cream in the Milwaukee area is Ferch’s Malt Shoppe in downtown Greendale, where workers have been preparing combinations of ice cream on a granite stone since 1999, said Betty Ferchoff, the owner of the store.
"It has been very popular because people can make up any flavor they want," said Ferchoff, who started the store in 1987. "We are not fast food. We interact with the customer and put on a show for them. Coming to our store is a unique experience."
The operator of the popular Kopp’s Frozen Custard restaurants here said there already are enough ice cream outlets in the Milwaukee area, with the growing Culver’s Restaurant chain and smaller ice cream shops that have opened throughout the area.
"I don’t know how much more room there is in this market," said Bud Reinhart, general manager of the Kopp’s in Glendale and Greenfield. "It is getting to be a tougher market. There is no doubt that people in Milwaukee like their ice cream and custard, but there is always a limit."
Ferchoff said she is not worried about the increasing competition from Cold Stone Creamery. "I am not very impressed by them," she said. "I tried their product when I was out West, and it wasn’t that good, and it was very pricey for the amount they gave you."
Plus, her store has more offerings than just ice cream, with a full menu, a soda jerk and a 1950s look. The same goes for Kopp’s, which offers hamburgers and other food at its three Milwaukee-area restaurants.
"There is no place like us in Milwaukee," Ferchoff said. "We’ve had national competitors come in here before like TCBY (Yogurt), and what happened to them? How many of their stores are left here nowadays?"
Added Reinhart, "These national people go in and out of the market all of the time. I really don’t think they are going to have too much of an impact because people in Milwaukee like to stay with what they are used to."
Ferchoff and Reinhart predicted that Cold Stone Creamery would struggle during the cold Wisconsin winters. Ferchoff said her ice cream sales drop by as much as 50% during the winter months.
"It always surprises me how someone can stand outside when it is 10 degrees below zero, licking an ice cream cone," Reinhart said. "But I love them because they are helping my business."
But Donnellan said the company has stores in many cold weather locations, including Eagle River; Alaska; Maple Grove, Minn.; and Bismarck, N.D.
"Ice cream is really built into our social conscience, and it is, for the most part, recession proof and weather proof," he said. "We believe that we can be successful in any market because people will like our product."

June 13, 2003 Small Business Times, Milwaukee

More baby boomers plan to postpone retirement
Stock market woes clip optimism from 1990s

Americans’ overall confidence in their ability to retire comfortably has decreased only slightly from last year, yet there are strong indications of growing anxiety because of stock market losses and continuing economic turmoil.
Those are some of the key conclusions of the 13th annual Retirement Confidence Survey (RCS) recently released by the Employee Benefit Research Institute, American Savings Education Council (ASEC) and Mathew Greenwald & Associates.
Specifically, the 2003 RCS shows that 21% of workers feel very confident about having enough money to live comfortably in retirement and 45% feel somewhat confident.
However, nearly a quarter (24%) of workers age 45 or older this year say that they plan to postpone their retirement age, up nine percentage points from 2002 (15%), mainly due to financial or economic concerns.
In addition, the survey found a six-percentage-point increase in the share of workers not at all confident that they will have enough money saved for retirement, up from 10% in 2002 to 16% in 2003.
Through most of the 1990s, the rise in the stock market was offered as the explanation why many workers were confident that they would be able to afford a comfortable lifestyle after they stopped working.
According to the authors of the survey, here are three factors that may help to explain why baby boomers remain confident today: