Are your HR policies and practices in order? Now’s the time to check
Traditionally, the start of the new year is the time many of us reflect on and review a variety of personal issues and resolve to take the necessary steps for change and improvement.
For those of us who are also responsible for running all or part of a business, we may carry this over to our professional lives as well. As part of our professional review, it is important not to overlook the human resource issues affecting our businesses.
The good news is that few, if any, new human resource laws are expected from the federal government in 1999. Although several initiatives are under way to overhaul the Occupational Safety and Health Act (OSHA), Congress is not expected to make that a priority.
While businesses may not have to worry about coping with new HR laws, the start of the new year does require businesses to get ready to meet certain imposed deadlines for state and federal regulations already on the books.
Following are some reminders:
W-2 Forms: Employers are required to furnish each employee with 1998 income on a W-2 form by Jan. 31. The W-2 form serves as a wage record for the employee and employer and is required for state and federal income tax purposes.
OSHA 200 Log: Most employers with 11 or more employees are required to maintain an OSHA 200 Log, which is a summary of injuries and illnesses. This information is compiled on OSHA Form 200. Compare the information listed on your OSHA 200 Log to your internal accident reports and Worker’s Compensation WC-12 forms for completeness and accuracy. The portion of the OSHA 200 form to the right of the vertical dotted line is used to summarize injuries and illnesses for the previous calendar year. Your OSHA 200 for 1998 must be completed, signed and posted by Feb. 1. Even if your establishment had no recordable injuries and illnesses, the summary portion, including zeroes across the total line, must still be posted. Post the OSHA 200 Log for the entire month of February in a place where employees are likely to see it.
On March 1, take the form down, and add it to your OSHA 200 file. OSHA 200 Logs must be retained and kept available for the current year and for the previous five calendar years for inspection and copying by current and former employees, their representatives and OSHA.
Family Medical Leave Act: Remember to reset the clock on absences granted under Wisconsin’s Family Medical Leave Act (FMLA). Unlike the separate federal FMLA, the state FMLA requires employers to grant unpaid time off on a calendar-year basis. Therefore, your employees start 1999 with the full amount of protected time off under this act. Wisconsin grants six weeks for the birth or adoption of a child, two weeks for the employee’s own serious health condition, and two weeks to care for a family member (child, spouse, parent, or parent-in-law) with a serious health condition.
Wisconsin employers are covered by the state FMLA if they employ at least 50 individuals anywhere – not just in Wisconsin. To receive protection under the state FMLA, an employee must be employed with you for more than 52 consecutive weeks and have worked at least 1,000 hours during the preceding 52-week period. Note: All hours for which the employee receives pay, i.e. vacation, sick, must be counted in the calculation of the 1,000 hours “worked.”
Administration of the FMLA is cumbersome at best. It is of great help to track time off under the FMLA on a form or spreadsheet. Record the date, type of leave, number of hours or days taken, and whether the leave time was paid through the substitution of vacation, personal days, sick days, etc. If your payroll system is computerized, develop a code which indicates in the payroll history when time off is FMLA time.
W-4 and W-5: The start of a new year is a great time to remind employees to update their “Employee’s Withholding Allowance Certificate” or W-4 form. During the last year, an employee may have had a change in family status which affects his tax withholding. Send a company announcement reminding employees to complete a new form available from payroll.
The “Earned Income Credit,” or W-5 form, is less known but can be of great benefit to certain employees. The W-5 has the potential to reduce the taxes an employee owes. Employees with one or more children may be eligible for this tax credit based on income, marital status, and number of children. Paying less in taxes means more take-home pay – something every employee likes. This is a great benefit to promote, without any direct costs to the employer. For an employee to continue to receive a tax credit, a new W-5 must be completed and filed with payroll each calendar year.
W-4 and W-5 forms are available by calling the IRS form order line at 1-800-829-3676.
The Meaning of 15, 20, 50, or 100: As you complete your business plan or anticipate company growth, be aware of the additional laws which affect employers when their employee head count reaches 15, 20, 50, or 100 employees. For example:

Market strategy, innovation lift Oconomowoc PC firm to the paragon
One call to Craig Schiefelbein’s voice mail – in which the voice is out of breath and somewhat rushed – reveals at least one thing about the president and CEO of Paragon Development Systems:
1) He’s just finished working out in the company’s amply-equipped fitness center; or,
2) He’s been in a constant stream of meetings planning for the continued success of his fast-growing, PC company located in Oconomowoc, just off of Highway 67.
(Give yourself extra points for choosing 2.)
He admits that being busy is both good and bad. The bad is that he’s developing a crop of new gray hair on his 34-year-old pate. The good is that business is good. Really good.
Schiefelbein, his sister Peggy, and two others started the company as a wholesaler of computer components in 1986. Being a wholesaler enabled the fledgling company to cut down on its overhead costs – it started in a basement – and sell to a national market while not worrying about its image. It also wasn’t constrained by being tied to a high-traffic location, as most retail businesses are, which allowed the company to grow rapidly.
That strategy paid off in spades as the company recorded $1.8 million in sales in its first year. “We’ve had record sales ever since,” Schiefelbein says. He estimates the company would reach $30 million in sales for 1998.
PDS has three strong markets, targeting medium to large businesses, government and educational institutions, and the health-care industry – the largest segment of PDS’s business. The company’s emphasis is to provide solutions for its customers, even if it means selling PCs made by Compaq, IBM or Hewlett Packard, for which it is an authorized dealer.
And solutions for customers don’t necessarily come from top officers or the sales staff. One of the company’s recent innovations, the Rack N Roll, was suggested by production manager Kerry Marti. Marti was at a client location when he saw how much time was wasted just by taking PCs out of boxes and setting the systems up.
The Rack N Roll is simply a metal rack with wheels and PC units shock mounted to its multiple shelves. PDS was using the racks for its own use in the warehouse, so why couldn’t customers use them as well? Marti estimates that approximately 30% of all PDS’s 1998 sales, or 4,000 units, have been shipped using the Rack N Roll, with no reports of damage.
The Rack N Roll actually cuts down on damage caused by shipping because the number of people handling the units is significantly reduced. “These [racked systems] get rolled onto one of our trucks, if we’re delivering ourselves, or a third-party company that goes straight to the customer,” Marti says. “So it’s been a significant reduction [in handling] as opposed to the regular [UPS] shipping.”
“That was really innovative,” Brian Nowatske of Advanced Healthcare says of the system. Advanced Healthcare receives an average of 18 PCs per order and has purchased a combined total of 1,000 PCs, printers and servers from PDS to date. Nowatske estimates that the Rack N Roll system saves his staff one half hour per new PC being installed. And it saves space as well, which helps in the confined areas of medical clinics.
But the key for Nowatske in choosing PDS over other PC companies was PDS’s commitment to being a business partner with Advanced Healthcare. “They really do try to understand our business,” Nowatske says. “They really step up to the plate in terms of customer service.”
Being a local company also gives customers the satisfaction of knowing that if there are problems, they won’t have to deal with an unsympathetic voice over the phone. That happened too frequently for PDS customer Howard O’Dell of Waukesha Engine. Before PDS, O’Dell was dealing with a manufacturer in Utah and found the customer service to be lax. “I mean, what do you do when a company’s located 900 miles away?” O’Dell says.
Now, O’Dell feels that if he has a problem with one of the 400 PCs he’s purchased from PDS, he can stop on his way home from work if he has to.
The company’s pride in providing solutions for customers extends to life imitating art, marketing manager Carrie Buss says. When flat screen monitors showed up on the television show “ER,” “We had a customer call us and say, ‘I want one of those monitors,'” Buss says. “It took the salesperson a week to find it because, at that time, they were brand-new.”
Old-fashioned teamwork is still abundant at PDS, too, according to Buss. “Everybody really works together and leans on each other,” she says. “We still have that small company mentality where [you say] ‘I’ll just do it.’ Even as we’re growing older and larger, people still do that. They just roll up their sleeves and go down and help out.”
Schiefelbein is predicting that the company’s sales will be $100 million-plus by 2001 and the number of employees will increase from 80 to 250. “If an average company in our industry is growing at 35% a year, that would put us at $70 million [by 2001],” Schiefelbein says. “I think we’re better than average.”
According to the plan, the company will be a nation-wide provider in the health-care market while continuing to grow as a regional provider to medium and large businesses and government and educational markets.
He foresees evolving into the small business market as well. “The largest growth area in our industry will be in small businesses,” he says. “We’re trying to develop real value for small businesses.”
And while marketing to individual consumers is feasible, Schiefelbein believes that the company’s strengths play better to multiple PC buyers. From experience, however, Schiefelbein never rules anything out. If he had, he would be Craig Schiefelbein, MD, instead of Craig Schiefelbein, CEO. “While this is Plan B,” he says of the PC business, “I think Plan B’s turned out pretty well,” noting his original intention of being a medical doctor.

{ By treating your employees right }
Employee turnover is a vicious cycle, says Milwaukee executive search consultant Paul Pagenkopf. It’s a syndrome where the more people a company loses, the more desperate it becomes. And as anyone who has been through the experience knows, replacing workers is time-consuming and costly.
“When you end up losing your people, or can only keep them for a year or two, it’s a spiral in that you are continually behind the 8-ball,” says Bob White, an information technology recruiter on Layton Avenue near the airport. “For companies that are short-staffed and can’t keep people, it puts more pressure on everybody. One of the biggest complaints I hear is: ‘My company doesn’t appreciate me.'”
In the past, employers didn’t need to concern themselves with treating employees right. The scales were tipped in their favor. Now, with workers at every level of the economy in short supply, employers who haven’t already changed their approach need to re-think the way they view their workers, White says.
According to Marlene Haigh, a Racine-based human resource specialist, what it comes down to is: How do you create that environment that induces your employees to stay?
According to a local employment survey conducted last year, the most important thing to employees is company culture. Not perks, not benefits, not even money matters most. That’s the conclusion of BDO Seidman’s Howard Sosoff, whose firm sponsored a local study on finding and retaining workers last year.
The number one thing your employees seek is a sense of engagement with their work, and to feel that what they are doing makes a difference, Sosoff says. Employees also want a comfortable work atmosphere, one in which they have the authority to make decisions, and the flexibility to take time off when they need it.
According to Donald Dailey of PricewaterhouseCoopers, the relationship between the employed and the employer is more flexible and fragile than ever.
Entrepreneurial companies, with their energy and creativity, can take advantage of their smaller size to “cut through the clutter” of larger organizations and reach the next rung of business growth, Dailey says. By virtue of their less rigid structure, entrepreneurial companies have a better chance of creating loyalty and maintaining a sense of closeness than big corporations, Dailey says.
One company that takes this concept seriously is Lakeland Supply, Inc. The 20-employee Waukesha distributor of packaging, paper and janitorial supplies promotes a sense of team through any number of company-sponsored events, from taking employees to dinner theater in rented limousines to riding around the race course at Road America in Elkhart Lake with a professional driver.
“We are like a large family,” says president Larry Schmidt II. “We feel that people are not geared into money. They want a place that is safe, where the surroundings are comfortable and they feel part of the organization. We feel our employees are our most important customers, so we want to treat them as best we can.”
That approach not only helps retain employees, it also helps recruit them. Word has gotten around that Lakeland Supply is a good place to work. In addition to the company-sponsored events, Lakeland Supply has an on-site fitness center, and offers comprehensive benefits, including a 401k plan.
“I have [former employees] who have left us and gone other places,” Schmidt says, “and these people tell me that this is the best place they ever worked for. There is a more holistic approach to the way we conduct business. We try to touch every element.”
Employee turnover is a costly proposition. While estimates vary, Schmidt says it typically costs 150% of an employee’s wage or salary to replace that person.
Employee turnover can become a vicious cycle, says Milwaukee executive search consultant Paul Pagenkopf. In his experience, the more desperate a company becomes, the higher it’s turnover rate.
“You are getting one company raiding another, particularly in skilled trades such as tool-and-die,” Pagenkopf says. “It’s a jungle out there. But if you show me a company where the standards are high, and so is the morale and espirit de corps, then the raiders are going to have a much harder time taking your people. If you have a fun place to work, where your employees feel like they’re really part of the organization, it’s hard to put a price tag on that, but I think it’s really a key factor.”
Pagenkopf says the whole employment picture has come full-circle, from the layoffs of the 1970s, to the mergers/downsizings of the 1980s and corporate re-engineering of the early to mid-1990s. All of those strategies were essentially short-term oriented, with the goal of: How quickly does it flow to the bottom line? During that period, training was cut back, and so was research and development. In many cases, apprenticeship plans were eliminated.
Invest in your workers
Instead of discarding workers whose skills are no longer current, today’s employer has to be willing to invest in their employees through training programs, say both Pagenkopf and Julie Peck, a Thiensville executive search consultant.
“Don’t get rid of people just because their skills have become obsolete,” Peck advises. “You need to assess what needs to be done in terms of training and retraining. This requires you to look ahead, to anticipate what your needs are going to be.”
Generac Power Systems Inc. has expanded rapidly. In doing so, the Waukesha manufacturer of generators and industrial engines has received any number of people who lack necessary technical training, says Generac human resources manager Stephanie Borowski.
“It’s an unskilled workforce you’re hiring from, so it becomes a matter of providing in-house basic training for people who have only worked at Burger King before,” Borowski says. We have our own Generac University.”
Generac also provides ongoing training for its existing employees, from the shop floor, to engineering to computer skills, Borowski says.
Another strategy that pays dividends is cross-training your employees, Pagenkopf says. By teaching them additional jobs or skills within your company, you get more flexibility and more productivity from your workforce, he says.
At the Pfister Hotel, executive chef Josef Zimmerman has established an informal training program for the kitchen staff. A kitchen employee begins by learning basic knife skills and working hotel banquets. Eventually, the trainees work on the cooking line for banquets. As they become more comfortable with food preparation, Zimmerman starts them on smaller menus. Once they’ve mastered their technique, those employees become ready to assist Zimmerman, a European-trained master chef, with the meals served in The English Room.
As a result of that in-house training program, many members of the Pfister’s kitchen support staff have climbed the culinary ladder. The internal promotions have resulted in retaining a staff of satisfied employees.
Structuring a creative benefit plan to the employee’s advantage can sometimes mean the difference between keeping or losing a key employee. Lakeland Supply’s Schmidt came up with an employer life insurance program for a 30-year-old employee. By matching the employee’s contribution, he will receive $1 million by the time he reaches age 59, or, $1.5 million by the time he reaches age 75.
“If someone really cares about our company and goes the extra mile, we want to show them that same dedication,” Schmidt says. “This way, if [the employee] stays with us until retirement age, all of the benefits come back to him.”
Offer incentives
A number of Milwaukee area companies are finding that offering employees trips as part of their overall compensation is not only a good way to reward employees for a job well done, but that it promotes team-building and the ability to reach company goals.
“A lot of companies reward their employees with cash and merchandise,” says Louise DeMarco of Incentive Experts, a subsidiary of Salentine Travel in Mequon. “Cash goes out the door to pay a bill, and merchandise is just that. Trips are very motivational. It builds loyalty within your company and gives employees an opportunity to do something they never would have done before.”
Two years ago, DMC Inc., in Pewaukee, made headlines when it took all 97 of its employees to Walt Disney World in celebration of the company’s 10th anniversary. The trip combined pleasure with training at the Disney Institute.
“If we are successful, we are willing to give that back to the company,” says Jeff Nowak, president of the Pewaukee direct-response advertising firm. “I think if more businesses try to look at bringing some fun into the workplace, it makes it easier to create a team atmosphere.”
According to Jackie Salentine, employers who use incentive travel generate a three-to-one return on their investment, with some of her clients achieving a five-to-one return. She arrives at that ratio by taking a company’s expected annual sales increase compared to the additional increment they receive when they reward employees with travel.
“It’s a really good way to institute behavioral changes without being a watchdog,” Salentine says.
According to Bill Troyk of Roadrunner Freight near Mitchell International Airport, offering employees trips is an alternative means to money for rewarding them. Roadrunner limits the trips to its terminal managers and their spouses.
Roadrunner lets employees select the destination. The first year, the company took employees to New Orleans. Last year, 45 people went on a Caribbean cruise. Next month, it’s Cancun for four nights and five days. The trips generally cost Roadrunner about $75,000, and employees are asked to contribute $500 if they bring their spouse.
“People talk about it for two to three months after,” Troyk adds. “You can use this as a tool to sell the job to people who are being promoted, and it’s also not a bad recruiting tool.”
Not all companies can afford to take their employees on vacation. At Value Computer Accessories in Pewaukee, a distributor of computer connection parts, Jenni DeGlopper rewards employees for meeting goals by letting them go to the movies on company time. Another monthly incentive is allowing employees to leave two hours early if goals are met.
DeGlopper decided to implement the incentives in lieu of annual Christmas bonuses, which got handed out regardless of the company’s performance. Now, if the sales goal is reached, everyone at the 18-employee company gets $100.
“We are tying it to performance,” DeGlopper says. “It has helped me achieve some company objectives, and it gets people talking together and working together. It’s amazing. You get warehouse people asking where the sales are at for the month. It gets everyone involved and helps keep people motivated.”

New Berlin bakery in line for some Super exposure
Dolly Mertens has been anxiously awaiting this season’s National Football League playoffs.
But her focus isn’t so much on the Green Bay Packers’ possible return to Super Bowl XXXIII in Miami. That would be icing on the cake, so to speak, for the owner of the New Berlin bakery.
Mertens has a solid team behind her as she is a finalist in a contest to win a commercial on the television broadcast of the Super Bowl.
Thanks to teachers and students in the West Allis-West Milwaukee school system, Mertens’ Wild Flour Bakery could be selected to be showcased as the winner in Mail Boxes Etc.’s “See Your Small Business on the Super Bowl Search II.”
The winner is highlighted in a nationally-televised Mail Boxes Etc. commercial during the Super Bowl, which is expected to have an audience of 130 million people.
As of presstime, the bakery was among the top 10 finalists in the contest which attracted thousands of entries. The top three finalists were to be named the first week of this month.
A 30-second commercial on the Super Bowl this year will cost regular advertisers $1.6 million, notes Karen Gajewske, of Mail Boxes Etc. headquarters in Escondido, Calif. But she called the exposure “priceless.”
In addition to the nationwide exposure from the commercial, the winner will receive $5,000; second- and third-place winners will receive $2,000 each.
“It’s been phenomenal,” Mertens said of the process – especially the part involving the students and educators who’ve come together in the effort. “It’s a wonderful opportunity that we can encourage young people and make something for us at the same time. And it shows the community that our young people have great talents.”
The Super Bowl contest has been another serendipitous event for Mertens, who ran a residential and commercial cleaning business before she found her real calling.
“I always thought of bakeries in terms of just donuts. And that wasn’t my cup of tea,” Mertens says. “But one day when I was back East I saw a loaf of bread and instantly knew my mission in life.”
With her youngest son Josh as the master baker, Wild Flour quickly became established in its New Berlin neighborhood and beyond. The bakery currently employs 26 people, eight of them full-time. Its breads and pies have won reader polls in Milwaukee Magazine and The Milwaukee Journal Sentinel.
Mertens [whose husband Greg Mertens works for the U.S. Small Business Administration] attributes the two-year-old bakery’s success to one miracle after another. She’s always been a supporter of young people and has been involved in employment training programs with several area school districts.
Now she’s getting something back for that involvement. A group at the West Allis-West Milwaukee schools approached Mertens about entering the Mail Boxes Etc. contest, offering to create a video commercial of the bakery.
“I had no trouble getting people to help me on this one,” said Dennis “Bart” Bartel, a West Allis-West Milwaukee instructor who’s been instrumental in the project. Bartel saw the project as an educational opportunity for the WA-WM students, and as a way to maybe earn some income for school programs. He asked Mertens if she would be willing to donate half of any winnings to the schools. “We don’t like begging for things,” Bartel says. Mertens’ response? She’d donate the full amount.
Bartel estimates the video production took at least 100 man-hours. “I doubt too many small businesses could afford to put together a commercial like the one we did,” he says.
While the bakery positions itself as a re-creation of the neighborhood bakeries that once flourished in urban neighborhoods, Wild Flour products are distributed throughout the metro area. It ships its made-from-scratch breads and pastries far beyond its Moorland Road and Howard Avenue neighborhood – via the nearby Mail Boxes Etc. franchise owned by sisters Patty Risch and Beth Riemer at 15417 W. National Ave., of course.
Wild Flour Bakery and the local Mail Boxes Etc. franchise could be a whole lot busier if the bakery garners the Super Bowl spotlight. And both are gearing up for that prospect.
The bakery – through the West Allis-West Milwaukee students – is working on a Website that could process orders that Mertens expects would pour in from the national exposure. [While the Super Bowl commercial focuses on the first place winner and its relationship with Mail Boxes Etc., the second- and third-place winners are also mentioned.]

With qualified workers in short supply, employers are getting creative in their attempts to mine the pool of available talent. United Wisconsin Services in Milwaukee has come up with a unique way to tap the skills of parents who would like to work, but whose first commitment is to their children. The newly created Parents Program allows working mothers and fathers to spend 19 hours a week at work, and still have the ability to be with their children at all times, says United Wisconsin employment supervisor Shannon O’Brien.
The 13 working parents in the program work from 10 a.m. to noon, Monday through Friday, processing Compcare claims in an office at 3rd and Cherry Streets. The working parents are allowed to take time off when their children are not in school, and they have summers off.
“Because the market is so tight right now, this was a way of tapping into a population that others haven’t gotten to yet,” O’Brien says. “We wanted to try and cater to a different population, to people who may only have the need to work on a part-time basis, but still want to be there for their children.”
According to Paula Acker, a supervisor with Compcare Blue Cross National Government, who works part-time herself, the employees who began the program in November like the job because there is no “latch-key” anxiety that they are at work while their children are left home unattended.
Carol Aberg of Mequon previously worked for a large telephone company, but when her job was eliminated, she decided to stay at home with her two children.
“The only job that met my needs was on the third shift,” Aberg says. “That’s what most mothers end up working if they want to work.”
Aberg says processing claims for Compcare is perfect in that it allows her to still be with her children at all times. She learned about the job through a flyer that was distributed through schools and area churches.
“My sister brought this [flyer] home, and I couldn’t believe it,” Aberg recalls. “I had so many exceptions. I remember my family saying that I would never find a job like this. This is an actual day job where I can come in and feel like a normal human being. And, nobody knows that I’m even gone.”

Without a clear vision, sales team can’t know the goals
It’s often been said that there is no way you can successfully build something unless you have a plan. That’s true in part. Yes, you must have a plan, but it’s the execution of the plan that determines its ultimate success or failure.
For the sales leader, the blueprint for creating a high-performance sales organization is the sales vision.
As the leader it is your responsibility both to your company and your people to create a plan of action – a plan that can be executed by all, that will garner an excitement and willingness to achieve high standards, that will reap financial rewards for all involved and that enables you to maintain order, provide clear direction and, most important, clearly establishes you as the leader.
Your sales vision requires a great deal of time and thought. It is a message that you will want to deliver directly to your sales team in a one-way format – not in a conversational, give-and-take manner. It should not be open for discussion; remember, you are the leader. Your people expect you to share your experiences and expertise in leading them. Your people should trust you as a leader who understands them and who will design plans with their best interests in mind.
There may be one other key component to creating a strong sales vision. You may have to humble yourself and realize that in the past you did not do all you could have done to ensure the overall success of the team. For example, maybe you didn’t get out in the field as often as you told your team you would. Perhaps you haven’t done any sales training designed to enhance the skills of your people. Maybe you’ve fallen short in meeting one-on-one with your people, truly understanding their challenges and trying to assist them in overcoming those challenges.
As leaders, we all get swept away in the fast pace of the day. Sometimes we lose focus on where we should be best spending our time. So remember, be honest in your own self-assessment. That may lead to your humbling yourself in front of your team.
If you set higher expectations of your people going forward, and if you want to change some of their past behaviors, you must make them aware that you are willing to do the same. That involves a heart-to-heart talk with your staff – a talk which might start out like the following:
“This morning I am going to share with you my sales vision. In my opinion what I am about to share with all of you is a blueprint for success. Just like I have, we all came here to be a part of a winning team. We came here to make a nice living and to build a career path for ourselves. We all believe that this is the company, the industry and the products through which we can achieve our goals. However, as the leader of this team, at this time I don’t feel we are playing at a championship level. This in part is my own fault. I have fallen short in providing the field time, one-on-one time and sales training that you should expect from a great leader. That is going to change today. On the other hand, I also feel that you have fallen short in some areas also that are crucial to your individual success as well as the success of the overall team – areas such as promptness, activity and professional appearance. This vision I am about to share will enable all of us to exceed our objectives. I will share this with you now. If there are any questions or concerns, I will address those individually off-line.”
You are probably saying, Wow! Wow is right. You have just laid the foundation for the execution of your sales vision. Now you must share what you believe the team needs to carry out. You are in control and whatever is put forth now could determine the entire outcome of the success or failure of your team.
Following are some suggestions on what to include in the sales vision.

SBT Editor
A few weeks ago, SBT co-publisher Dan Meyer and I had the pleasure of sitting before a group of UW-Whitewater students who presented the findings of an in-depth survey they undertook for Small Business Times.
The presentation struck us on two fronts. First, we were pleased by the professionalism and maturity shown by the students. Second, we were strongly encouraged by the survey results which show an overwhelming support for SBT and its small business focus.
We learned that you love sales and marketing advice and profiles of successful business people and their operations.
The information, coupled with a “branding” project we’re going through, will be instrumental in setting SBT’s direction this year and beyond.
Thanks to all who took the time to respond to the survey.

When 100 mph winds roared through southeastern Wisconsin May 31, approximately 175,000 customers of the Wisconsin Electric Power Co. woke up to no power that Sunday.
Without electrical service, everyday commerce ground to a halt. Images of retailers sitting outside their darkened stores were a stark reminder of how critical a reliable supply of electricity is to business and residential consumers alike.
Even though the storm was an isolated event, the issue of a reliable supply of energy has blown into Wisconsin like an ill wind that portends disaster – one which is slower in coming but every bit as potentially devastating from an economic standpoint.
Historically, Wisconsin has enjoyed some of the lowest electric rates in the country. And, just as important, a consistent, reliable flow of energy.
The state’s preferred energy status has helped to lure a substantial number of Illinois companies across the border to Kenosha, Walworth and Racine counties in search of lower electric rates.
Low rates and reliable power also serve to keep existing Wisconsin businesses from moving elsewhere.
However, an archaic regulatory model based on a century-old monopoly system currently threatens to put our low-cost energy supply in jeopardy.
Caught at the center of this tangled web is industry, which can no longer rely on a consistent flow of energy on hot summer days. On four occasions last July and August, WEPCO asked customers to conserve electricity as supplies grew tight. A total of 25,000 residential customers and 2,300 major industrial and other large customers were asked to cut back on their power use during peak periods of demand.
While businesses on both coasts are used to brownouts or rolling blackouts, the prospect here is almost unthinkable. Only twice before in its history had WEPCO been forced to ask its customers to restrict power consumption.
A survey last year by the Metropolitan Milwaukee Association of Commerce (MMAC) showed that energy reliability was one of the top business concerns.
At a crossroads
Wisconsin finds itself at an energy crossroads, says Eric Schenker, a retired University of Wisconsin-Milwaukee Business School dean. In effect, it boils down to a “pay me now or pay me later” scenario, says Schenker, who has taken up the free market cause on behalf of the MMAC. Wisconsin can pay higher energy rates now or pay later, Schenker says, with the cost being lost economic development opportunities if the decision to build new power generation and transmission is continually put on hold while the debate over what to do wears on.
Decisions that are made now and in the coming years will have a lot to say about the future of our reliable energy supply, which has been the backbone of our economy. But greater reliability will cost more in the short run, Schenker says.
While business owners want energy reliability, they are among the first to cry foul when their energy rates go up as they did when WEPCO was recently granted a 12.3% increase by the PSC to upgrade its generation and transmission to provide better electric power reliability. [Most of the rate increase can be traced to the operating troubles of the Point Beach plant.] But even with the increase, Wisconsin will still have lower rates than most metropolitan areas across the US, Schenker points out.
The fact is, Wisconsin currently imports 15% of its energy. There is not enough generating capacity in the state, and not enough transmission lines to import power from outside the state.
Last summer’s brownouts came about as the result of a not-so-unique set of problems which are afflicting utilities around the country.
For starters, the temporary shutdown of the Point Beach nuclear reactor along Lake Michigan created a power shortage. To the south, the available energy Wisconsin typically depended on dried up, as Illinois goliath Commonwealth Edison shut down some of its own problematic nuclear plants. Meanwhile, to the west, there were not enough existing transmission lines to import power when Wisconsin’s power grid maxed out.
That scenario could repeat itself again this summer, as power shortages caused by nuclear plant shutdowns in Illinois, Michigan and Ontario could put a strain on Wisconsin’s transmission system.
What has become clear in recent years is Wisconsin has too few power plants for its overall energy needs, an uncertain future tied to its two existing nuclear plants, and not enough power lines to carry needed power into the state.
The politics of dancing around the issue
While the solution seems simple – to build more generation and transmission – there are plenty of obstacles standing in the way. The question over how to best manage electric utilities is a seemingly endless political debate which tends to bog down in the minutae that are like tiles in the complex mosaic that make up the big picture of energy reliability.
Then there is the cumbersome environmental permitting process which makes it hard to get anything done – four years for a new transmission line and seven years or more to build a power plant.
Also, there is a myopic tendency on the part of some to look at the issue only within the confines of the state’s borders, says Bill Harvey, president of Madison-based Alliant Corp./Wisconsin Power & Light Co., which became the first Wisconsin utility allowed to merge with two out-of-state utilities in Iowa earlier this year. Rather, those involved in restructuring the utility industry here must view the North Central US as an interconnected regional whole, Harvey says.
A principle obstacle, to date, has been the regulatory stance of the Wisconsin Public Service Commission, which regulates utilities and requires an exhaustive advance planning process when a utility decides it wants to build a power plant or site a transmission line.
By the time utilities complete their advance plans, the market shifts and the plans are no longer valid, points out State Rep. Tim Hoven (R-Port Washington), chairman of the Utility Oversight Committee, which passed a bill this year that could go a long way to streamline the planning and approval process.
Frustrated with the PSC’s apparent unwillingness to take on the brave new world of energy deregulation, Gov. Tommy Thompson appointed Green Bay attorney Joe Mettner as head of the PSC earlier this year. Insiders say Mettner has a fundamental understanding of the complexities, and is more likely to embrace a market-based solution than his predecessor, Cheryl Parrino, who was steeped in the old-line, government-first stance of the PSC.
“Given the healthy state of this economy, there is no reason why anyone ought to have their lives disrupted by a shortage of electricity.”
– Bill Harvey,
Alliant Corp./Wisconsin Power & Light
While Wisconsin still enjoys low rates, it would be short-sighted to credit the watchdog role of the PSC and the Citizen’s Utility Board, points out Alliant’s Harvey. One of the reasons the rates are low, he says, is that ratepayers are not funding new or expanded plants.
So, while Wisconsin still has low rates, it is stuck with a growing reliability problem with no real consensus about how to address the issue.
“We’ve spent the last few years just trying to decide if life was changing,” observes Dave Parker, a utility industry analayst for Robert W. Baird & Co. in Milwaukee. “The PSC postponed a decision [on deregulation in 1997], and decided to study it for another couple of years. Life has been so darn good here for so long that people hesitate to change.”
A deregulated, free-market approach would have addressed the state’s current energy reliability woes much more quickly than the old command and control government regulatory model, Alliant’s Harvey says.
“Given the healthy state of this economy, there is no reason why anyone, anywhere ought to have their business or personal lives disrupted because of a potential shortage of electricity,” Harvey says.
The free-market solution
In the last two years, the effects of hanging on to an outdated regulatory structure are apparent. Wisconsin utilities have earned an average of 7.6% per share compared to the national industry average of 23.9% per share, and a Midwest utility average of 30%.
Over the previous 50 years, Wisconsin was as a national leader in regulation of its public utilities and in the performance of those utilities. But now, Wisconsin has fallen behind the rest of the nation in addressing its energy future and the effects are apparent. Investors are moving their money to other Midwestern utilities which do not operate under the same constraints.
Even though a new energy reliability bill (AB-940) that passed the legislature is a step in the right direction, current laws do not go far enough to allow Wisconsin utilities to compete in a more open market environment, UWM’s Schenker says. Current rules set up extreme measures that make it impossible for Wisconsin utilities to build needed power plants. The laws, in effect, handcuff Wisconsin utilities, allowing out-of-state companies the opportunity to come here and profit by building power plants and by selling the electricity to Wisconsin utilities, Schenker says. That, he says, will not keep electric rates low. But it will serve to hold down the returns of Wisconsin utilities, making them unattractive to investors.
To restore the financial strength of Wisconsin utilities, the state needs to implement a free-market environment in which utilties can fairly compete, Schenker says. That will allow the utilities to use their own vast experience to maximize profitability.
Out of the ongoing debate, a mandate emerged late last year to streamline the planning and approval process with the ultimate goal of energy reliability. The outcome of that effort is Assembly Bill 940, which replaces the lengthy advance plan process with a strategic energy assessment, which would enable power companies to move faster on building new infrastructure, especially on smaller generation facilities.
AB-940 could also pave the way for a so-called Independent System Operator (ISO). The ISO would serve as a traffic cop to regulate the flow of energy outside of the self-serving interests of the utility companies. In an ideal deregulated world, with an ISO in place, cheap power could be “wheeled” on the network from a far-away plant in a place like Idaho to a business here requesting the service.
But the prospect of a deregulated marketplace is at least five years away, Harvey believes.
In the meantime, don’t expect the state’s big utilities to build additional generating capacaity until the free-market debate is resolved, Harvey believes. Building new plants now will only complicate the sticky matter of stranded costs, and who gets stuck paying for them.
Instead, look for wholesale merchant plants to fill the energy gap, Harvey says. Those plants built by independent ventures from outside the state will be gas-fired, and range from 85 to 175 megawatts per unit. Simple cycle combustion turbine plants can be constructed for $200 to $250 per installed kilowatt. Those plants are designed for peak periods when more power is required.
One of those quasi-independent power producers, LS Power Co., built a smaller 236 megawatt plant in Whitewater. LS Power turns around and sells the energy it produces to WEPCO. Another small-scale plant operates in the Green Bay area, and sells the power to Wisconsin Public Service Co.
Those gas-fired plants can be added in smaller increments, and can be constructed faster with less difficulty in siting. They are environmentally palatable, as they do not produce noxious materials the way coal-fired plants do, nor do they present the safety and operating problems of a nuclear reactor. They also use less water, do not require a railroad line, and are smaller in scale than traditional power plants.
What needs to happen now is for opposing factions to get on the same page, Baird’s Parker and Alliant’s Harvey both agree. Parker says politicians, regulators and businesses need to start operating from the same playbook.
What will bring those opposing factions together is customers, who could care less about the finer points of the electric power debate, Harvey says.
“Customers are interested in having the electic system meet their needs as they see them, and not as some monopoly, government regulator or special interest group sees them,” Harvey says. “Customers are going to say ‘Enough is enough, give us the energy we need at a price we are willing to pay.'”
That’s why customers will embrace a free-market approach as the ultimate solution to the state’s energy reliability problem.
July 1998 Small Business Times, Milwaukee

Whitewater’s location, amenities favored by employers
Location, location, location.
Businesses and home owners are looking for it. The City of Whitewater – straddling the Walworth-Jefferson county border – has it.
While it doesn’t lie along an interstate highway, the city’s location halfway between Madison and Milwaukee, and relatively close to the Chicago-area, has made it attractive to businesses. The favorable location is complemented by a University of Wisconsin system campus with a highly regarded business school.
All of those factors helped lead the city along U.S. Highway 12 and State Highway 59/89 to record economic development in 1997. More than 850 jobs and 500,000 square feet were developed within the city’s business park. Not bad for a city of just over 13,000 people.
But development like that doesn’t just happen overnight. In Whitewater’s case, the struggle to grow began in the 1970s when the city’s wastewater treatment facility reached its maximum capacity. Once a new, larger facility was completed in 1979-1980, a group of business leaders got together and proposed that the city buy land and develop a business park.
But fear of overdevelopment led to a referendum on expansion and voters banned further development until it could be studied. The two sides eventually met to iron out their differences and formed the Whitewater Community Development Authority, a quasi-private, quasi-governmental organization. It became WCDA’s job to develop and run the business park, with the city council holding ultimate governing authority.
WCDA pioneered the development of commercial, industrial and residential areas, according to James Caldwell, president of First Citizens State Bank of Whitewater and a founding director and chairman of WCDA.
From the start, WCDA was dedicated to developing a quality park which includes having landscaping, curbs and strong covenants to keep the park upscale.
“Corporate customers are even more fussy than private homeowners in making the financial commitment to a development,” Caldwell notes.
Once the infrastructure of the park was in place, WCDA had to find its first tenant. It turned out to be Perlman-Rocque, the sole distributor of McDonald’s restaurant products in Wisconsin, northern Illinois and Michigan. Once Perlman-Rocque moved in 1986, that got the ball rolling and it hasn’t stopped since.
The attention to the details in the park has paid off. The park has grown from the initial 40 acres to 540 acres with potential to expand if necessary, according to Michael Stumpf, WCDA’s director.
Husco International, which manufactures hydraulic systems for the automotive and construction industries, is in the process of completing a 42,000-square-foot facility in the Whitewater business park.
Jim Gannon, CFO of Husco, noted several factors involved in choosing Whitewater. Whitewater is within a reasonable driving distance from Husco’s plant in Waukesha, management liked the park, and Gannon likes the fact that the city has a university located there.
“The university can provide us with temporary and part-time employees,” Gannon says. “Second, it can provide our employees with continuing education.”
The quality of life is also enhanced by cultural programs presented by the university, Gannon notes. Other businesses that are expanding or relocating to Whitewater also mentioned Whitewater’s student-workers. But many companies, including Husco and Generac, which began operations in its new 135,000-square-foot facility in January, also had workers commuting from Whitewater to their facilities in Waukesha.
The exportation of Whitewater workers was due, in part, to the lack of jobs within the city. The increase in job opportunities is keeping more Whitewater residents in town. That’s one reason it’s easier to find workers in Whitewater than in some other Wisconsin communities, according to Stumpf.
The one problem Whitewater is experiencing, and other communities wish they had, is the lack of residential developments within the city to house the new workers. Three developers, whom Stumpf declined to identify, are actively pursuing sites in the city. Stumpf anticipates that one or possibly two of the contenders will be announcing their plans for residential developments within the next two months.
Another key draw for businesses considering expansion or relocation is WCDA’s willingness to put together financial packages for business owners.
Eco-Tech, Inc., a plastics recycler based in McHenry, Ill., is relocating its operations to Whitewater primarily because of the $450,000 in state and local funding WCDA helped put together for the company’s move and expansion, according to Eco-Tech’s president and CEO, Joe Sadlier.
Eco-Tech will be moving 35 jobs into a 50,000-square-foot facility in August. A total of 20-25 jobs will be available once the company moves. Sadlier expects to increase the total number of employees to 90 by the year 2000.
Too much development stalled the city’s growth in the early ’80s. That scenario repeating itself 15 years later appears unlikely.
“We’ve got more than enough capacity in our municipal water systems to accommodate a city twice the size of Whitewater without having to do any major upgrades to our utilities,” WCDA’s Stumpf says.
Caldwell anticipates that once additional housing becomes available, the city will see an increase in retail outlets as well.
“The job creates a stream of revenue to the individual,” he says. “Then they (employees) look to move here, then retail grows. It’s an economic circle.”
July 1998 Small Business Times, Milwaukee

Position: President, Tushaus Computer Services; President, Advance Cabling Solutions
Location: 10437 Innovation Dr., Suite 247, Wauwatosa (Technology Innovation Center, Milwaukee County Research Park)
URL: www.tushaus.com
First job: Golf caddy, Bluemound Country Club
Most satisfying career-related accomplishments: Leading the growth of two companies with nearly 90 people for the past five years; meeting Bill Gates
Most admired persons: father; Bill Gates
Family: wife, Laura and 3-year-old daughter Miranda
Education: Brookfield East High School; University of Wisconsin-Milwaukee
Hometown: Milwaukee
Currently reading: Inside the Tornado, Geoffrey Moore
Interests/hobbies: computers, movies
Supported organizations: YMCA, United Way, Young Entrepreneurs’ Organization
Words of Wisdom: “Whether you think you can or you think you can’t, you’re right!” – Henry Ford

The following loan guarantees have been approved by the U.S. Small Business Administration during May:
Aquatic Emporium/The Fish Store, 374 W. Main St., Waukesha 53186, $87,000, Waukesha State Bank;
Classic Tool and Machine Co., 2201 W. Bender Rd., #3, Glendale 53209, $75,000, Port Washington State Bank;
Dominos Pizza, 5100 Washington Ave., Racine, $119,000, Firstar Bank Milwaukee;
Elburg, Inc., 910 West Blvd., Racine 53405, $550,000, The Money Store Investment Corp.;
Fast Foot, N80 W14962 Appleton Ave., Menomonee Falls 53051, $42,250, First National Bank of Hartford;
Fort Handy Pantry, 1012 Whitewater Ave., Fort Atkinson 53538, $465,000, Citizens State Bank & Trust;
Grisby’s Child Development Center, 2856 N. 41st St., Milwaukee 53210, $45,000, Norwest Bank Wisconsin;
Koenig Custom Concrete Corp., 410 McKee Ct., Fort Atkinson 53538, $80,000, Citizens State Bank & Trust;
Lares Fashions, 261 W. Main St., Waukesha 53186, $50,400, Waukesha State Bank;
Mahuta Tool Corp., N182 W19137 Bunsen Dr., Germantown 53022, $299,000, Wisconsin Business Development Finance Corp.;
The Original Gallery Co., 609 Milwaukee St., Delafield 53018, $27,000, Waukesha State Bank;
Pistol Pete’s Pub II, 16755 W. Lisbon Rd., Brookfield 53005, $223,000, Wisconsin Business Development Finance Corp.;
Priya Corp., N96 W17500 County Line Rd., Germantown 53022, $255,000, AT&T Small Business Lending Corp.;
Pull Together Publications, Inc., 5150 N. 32nd St., Milwaukee 53209, $125,000, First National Bank;
Roth Chiropractic, LLC, 64 N. Main St., Fond du Lac 54935, $45,000, National Exchange Bank & Trust;
SGLA, LLC, 105 Industrial Dr., Lake Mills 53551, $700,000, The Greenwoods State Bank;
Sheboygan Family Restaurant, 2704 S. Business Dr., Sheboygan 53081, $550,000, Community Bank;
SPS Productions, LLC, 10437 Innovation Dr., Wauwatosa 53226, $73,000, Southern Commerce Bank;
The Cat Doctor, 236 N. Water St., Milwaukee 53202, $241,500, The Money Store Investment Corp.;
Unimex, LLC, 13095 W. Foxwood Dr., New Berlin 53151, $150,000, Ridgestone Bank;
Wisconsin Tool & Abrasives, Inc., 2107 N. 18th St., Sheboygan 53081, $89,500, Community Bank.
MEDC loans
A $106,000 loan from the Milwaukee Economic Development Commission will help a Milwaukee-based fund-raising firm finance the purchase of a new facility in the city for expanded operations.
Professionally Speaking, Inc., (PSI) will use the MEDC loan to purchase a 10,000-square-foot building at 3942 N. 76th St., just south of the Capitol Drive intersection, and move its telemarketing operation from its current site at 10012 W. Capitol Dr. It owns that Capitol Drive building.
PSI is a professional fund-raising company that handles direct mail and telemarketing campaigns for a variety of non-profit organizations.
The new location will provide benefits to both the company and residents as it minimizes traffic issues and provide PSI workers an easier commute by bus, city officials say.
The company, which will continue its administrative functions on Capitol Drive, employs 210 full-time people and expects to add 75 more full-time.
Participating in the $425,000 project is Investors Bank.
MEDC’s loan committee also approved financing for four other business projects at its June meeting.
Vincent G. Lubsey, M.D., located at 5231 W. Villard Ave., received a $149,000 Target Loan to help expand his family patient practice. Lubsey, whose practice has expanded substantially, has been a practicing physician in the city for 20 years.
When a 12,000 square-foot property with an attached house and three-car garage across the street from Lubsey’s practice became available, Lubsey decided to purchase and remodel it to accommodate his growing practice.
The new building will accommodate 10 examination rooms, a breakroom for employees, chart room and storage, an administration office, and a larger waiting area. Lubsey has four other doctors interested in practicing full- or part-time to assist with clients. Their fields include OB/GYN, internal medicine, general practice, and surgery.
Firstar Bank is also participating in the $406,000 project.
Lubsey’s practice also obtained a $48,100 state Minority Business Development Fund loan, a $3,400 state Minority Business Development Fund grant and a $12,500 state Job Creation Program grant. That financing was approved at the May 19 meeting of the MBDF board.
Lubsey’s practice expects to add up to 16 jobs with the expansion project. Two of those positions will be filled with state Division of Vocational Rehabilitation clients with disabilities.
Urban Foot Care Center, located at 3915 W. Capitol Dr., received an $85,000 Target Loan to assist in expansion and improvements at its current site. Funds will be used for the purchase of equipment and continued use as a medical facility and office for Urban Foot Care Clinic.
Urban Foot Care Center, a foot-care medical operation that provides general podiatry care, currently employs three full-time and expects to add two full-time workers.
Firstar Bank is also participating in the $212,000 project.
Environmental Innovations, Inc., a technical rebuilder that recycles laser printer and fax toner cartridges, would like to expand its operation with a $62,500 MEDC loan. It would use the funds to help it purchase a 12,000-square-foot building at 9600 W. Flagg Ave. The business currently leases 4,000 square feet of space at 111 W. Olive St.
Environmental Innovations, the third largest toner cartridge remanufacturer in the state, expects to increase employment by adding five full-time positions.
The firm currently has more than 350 accounts. Some of its major accounts include Miller Brewing, Marquette Medical Systems, Allen-Bradley and Wisconsin Electric Power Co.
Park Bank is also participating in the $250,000 venture.
Precision Restoration Co., Inc., received a $46,250 loan to purchase a 4,600-square-foot building on a .74-acre site at 5315 N. Lovers Lane Rd. to meet expansion needs of its growing business.
Jeff Wesolaski, president of Precision Restoration and a third generation mason, handles masonry repairs and cleaning, tuckpointing, special coatings for concrete surfaces, caulking, waterproofing, and chimneys, and concrete removal and replacement for the company.
Precision Restoration expects to add two full-time employees.
M&I Marshall & Ilsley Bank participated in the $185,000 project.
State Financing
Two southeastern Wisconsin firms are among six companies which will share more than $1 million in Wisconsin Development Fund awards and $238,000 in Minority Business Development Fund loans and grants.
General Converters and Assemblers, of Racine, was awarded a Customized Labor Training grant of up to $125,000.
The company, founded in 1974, is a minority-owned firm that has procured a major contract to be a tier supplier for General Motors. The company will die-cast foam insulation for mufflers and catalytic converters.
Over the next two years, General Converters and Assemblers will spend $2.35 million to acquire the space and equipment to service the contract. It will train 50 new and 185 existing workers in order to obtain ISO 9000 and QSO 9000 certification.
The CLT grant will leverage $159,000 in additional investment.
General Converters and Assemblers also received a $100,000 loan from the state’s Minority Business Development Fund. Those funds will help the firm finance the purchase of new equipment, which will be housed in a 53,000-square-foot building the firm is buying. An additional $2.25 million in other investments was noted in the MBDF package.
Simplicity Manufacturing, of Port Washington, won a $225,000 Customized Labor Training grant. The firm produces lawn and garden equipment, including mowers, chipper/shredders, tillers and snow throwers.
The company is in the process of investing $16.7 million to upgrade its equipment and production process to take better advantages of technological advances. Over the next two years, it will train 439 current employees.
The grant will leverage $815,168 in private investment.
Armando’s Landscape Co., of Big Bend in Waukesha County, obtained a $35,000 Minority Business Development Fund loan. The firm intends to expand its operation by growing some of its nursery stock and purchasing additional stock in bulk from wholesalers. It will use the loan to finance inventory and equipment. The project is expected to create 10 jobs and leverage $15,000 in additional investment.
July 1998 Small Business Times, Milwaukee

You can capitalize on your unique market strengths through niche market development. In order to do that, you must define what you do in such a way that it creates a niche that did not exist.
It’s not easy, but try to answer the following questions with as many perspectives as you can:
1) From our customers’ viewpoint, what are they actually buying from us?
If you make labels, your customers may be buying an identification benefit. Can you think of other places where identification is needed but is not currently being provided?
2) What is the outcome of using our product or service?
Instead of objectively looking at your service or product, try to identify what it does. If you are a printer, are you really in the communications business? If you are a boat builder, are you really in the vanity business?
3) What is gained by using our product or service by our customers?
Are you really in the convenience business by making kitchen appliances? If you sell insurance, are you really in the family protection business?
The above process has been called “reinventing your organization.” Use the information gained to search for ways to create market niches that only you can service. Small to medium-size businesses can thrive because they are – or should be – flexible enough to identify and serve niche markets.
– William Kraemer