• WisBusiness

Tuesday, October 27, 2009

Book review: "The E-Myth Enterprise"

By Terri Schlichenmeyer
by Michael E. Gerber (read by John H. Mayer) c.2009, HarperAudio $22.99 4 hours / 4 CDs
Now that the economy is starting to turn around and you think you might be able to breathe easier, there's one thing you can say you've learned in the past three years: you can't always rely on someone else for your paycheck.

Because of that, you've determined that you want to start your own business. But you wonder if there's any way to get a head-start on success? Author Michael E. Gerber says there is, and in his new book "The E-Myth Enterprise" (read by John Mayer), he'll tell you what makes a good business great and a great one, stellar.

Business, says Gerber, is a living thing. Everybody is in business in one form or another and we can't escape it. We're so habituated to business, in fact, that we think we understand it, but we really don't.

To be great in business, he says, there are five essential skills needed. All these skills must be in place "to enter the race": concentration (ability to concentrate and become concentrated); discrimination (ability to choose where and to whom our attention is directed); organization (ability to create order from chaos); innovation (ability to reach for the right action); and communication (ability to touch and be touched through words and meaning). Businesses must have these skills in place from the start.

Gerber says that there are four essential ingredients to use in building your company: visual, emotional, functional, and financial. These make up the E-Myth Enterprise Matrix.

Pay attention to your business' look, and tend to the details. Understand that people need order, connection, and purpose. Try to ascertain exactly what people want by asking what your competitors are not giving them. Remember that you have to take care of your money situation on a daily basis, which means your integrity comes into play constantly. Keep in mind that money builds a business, but can destroy it just as quickly.

In the end, Gerber says, keep things into perspective. Give back to those less fortunate. Stay interested in the dignity of your own life and the lives of the people around you.

I had very mixed feelings about this audiobook, probably because there's too much to absorb while listening to a quick-moving CD. For sure, "The E-Myth Enterprise" is not anything you'd want to listen to in the car; if you get distracted for fifteen seconds, you'll feel as if you've missed something important.

But in this case, the method of delivery might not be at fault.

While author Michael E. Gerber had some great business tips here, I thought "The E-Myth Enterprise" was a bit scattershot. There were four ingredients for this, and four rules for that, and five of something else and I was lost pretty quickly. Several points weren't thoroughly explained enough to satisfy my hunger to learn about them, and others were belabored.

Overall, I can't say I would recommend this latest audiobook in the E-Myth series. While many decent nuggets are buried deep inside "The E-Myth Enterprise", finding them is not so E-asy. -- Schlichenmeyer has been reading since she was three years old and she never goes anywhere without a book. She lives on a hill in Wisconsin with two dogs and 11,000 books.


Monday, October 26, 2009

Desperately seeking stimulus

By Bill Kraus
A man named Sunil Krishman has an idea for a startup company that would create something important for Wisconsin and the economy: instant jobs in rural areas.

Logic would indicate that this is a project that is worth stimulating.

So I recently set off on a quest to find out who I should contact to show me a route to the start- up money the project needs.

I started with a call to the governor's office where my neighbor and acquaintance Susan Goodwin holds sway.

I didn't get her. I got instead the voice mail of her executive assistant, Mike. I told him what I wanted and left my number.

Two days later I called again. This time the person who takes calls at the governor's office told me that neither Mike nor Susan or anyone else in the east wing of the Capitol would have an answer to my question. She gave me the number of a state office with "recovery" in its name.

After two days worth of fruitless calling and leaving voice messages, serendipity struck. I was having coffee with a man who wants to run for lieutenant governor next year. I mentioned my frustration with the recovery office. He said he knew someone there and would make a call.

Sure enough the next day I got a call from a woman who told me that she couldn't help but that I should call the Department of Commerce. I did. I left a message.

A day later a man called me to say his department doesn't have any stimulus money except for "green" projects, but he might be able to help me. He would call back, he said.

In the meantime I had a visit with Democratic state Sen. Julie Lassa of the Stevens Point area and her staff. They liked the idea and wanted to include Sunil's plan in her effort to revive the vetoed "farmshore" provision in the budget. I thought at the time the reason it got vetoed was that the governor or his people couldn't figure out what "farmshore" was or meant. I didn't say so, but I did suggest that Sunil's concrete plan to bring IT functions that had been shipped all over the world back home might get a more favorable reaction from the governor with or without a more descriptive name.

In the course of this discussion, Julie gave me the name of a woman in Congressman Dave Obey's office in Wausau who might be helpful. I called her. She was out of the office. I left a message. She did not call back, but somebody else did. He told me the best routes to stimulus money were through the SBA or at the office of Rural Development in Stevens Point.

He didn't have a name there, but he gave me a phone number.

I called. The telephone tree said if I knew the extension of the person I wanted to talk to, I should dial it; if I didn't, I should hit 8 on my phone and get the agency's phone directory where I could enter the first three letters of the name of the person I wanted to talk to; if I didn't know that, I should stay on the phone and someone would answer.

No one did. Instead I kept getting the original telephone tree message over and over again.

So there I was with a number that went nowhere and no way to get past it.

I decided to call the Rural Development office in Madison and see if anyone there knew the name of anyone in the Stevens Point office. Luckily someone did. So I had three digits to enter when next I called and got -- wonder of wonders -- a human being instead of voice mail. It was, of course, not the human being who could answer my question but a human being who knew who could answer my question.

Justin Kirking was his name and he told me that the Rural Development office funds something like 40 programs -- none of which include a job- creating startup like the one I was pushing. He added the depressing information that like the SBA, they respond only to requests from banks.

Fortunately while I was waiting for phone calls to be returned and trying to find ways to get past phone tree dead ends I had sent the executive summary off to former Dane Co. Executive Rick Phelps of the M&I Bank on the long shot chance that someone at his institution might think this was instantly bankable. So that door was open, and I sent an addenda to my original request asking for the M&I's help with the feds and the SBA in particular.

All of this is a work in process at the moment, although given the banking industry's (a) problems and (b) indifference to the problems of companies like Sunil's, I am not sanguine.

In the meantime, Sunil is keeping Julie Lassa in the loop and hoping that she's able to revive her initiative so the state can put an oar in the water. I might even hear from the Department of Commerce.

If I live long enough.

-- Kraus is a longtime politico and campaign finance reform advocate who served in Gov. Lee Sherman Dreyfus' administration.


Sunday, October 25, 2009

Hospital combines with brewery to "energize health care"

By Gregg Hoffmann
LA CROSSE - It might seem like a stretch to combine beer and health care in one idea, but City Brewery and Gundersen Lutheran Health System have accomplished just that with a unique renewable energy partnership.

The two companies have combined efforts to generate 8 to 10 percent of the electricity used on Gundersen Lutheran's campuses in La Crosse and Onalaska by using waste biogas from the brewing process.

The project launched Oct. 7 and has been operating effectively. It is projected to generate about 3 million kilowatt hours per year. As Corey Zarecki, the project engineer and efficiency improvement leader for Gundersen Lutheran, puts it, that's the environmental impact equivalent of planting 490 acres of forest or removing 395 cars from the road. It is enough electricity to power about 300 homes.

"One reason we have done this is to cut energy costs and move toward our goal of being energy independent by 2014," Zarecki said. "But, we also feel it is healthy for the community, the right thing for our patients and fits in with being good stewards of the environment.

"You've seen the emphasis in the country on the economy, health and energy. We feel this project and our overall goal includes all three."

City Brewery has had to pre-treat wastewater from its plant, which brews beer, energy drinks and other beverages, since the mid-1980s at its own treatment facility, before sending it to the La Crosse municipal treatment plant.

In the pre-treatment process, solids are removed and used for fertilizer and other uses. Biogas, including methane, is given off during the process, and the brewery flared the gas to dispose of it for several years. "People around here called it the eternal flame," Zarecki said. With that flame came some air pollution.

The combined project captures the biogas, cleans it and sends it through an engine at the City Brewery site. The engine generates electricity that is then sent to the area power grid. Xcel Energy pays Gundersen Lutheran for the electricity that is produced.

This can allow Gundersen Lutheran to reduce overall costs, savings which could be passed to customers and patients. The company states that it believes "part of the answer (to stemming health care costs) lies in finding solutions to our rapidly rising energy costs."

In addition, heat generated from the engine is captured and recycled back to the City Brewery's waste water treatment center to make it more efficient.

"This type of gas-cleaning system, as well as the partnership, is to our knowledge the first of their kind," Zarecki said.

The statewide efficiency group Focus on Energy also has been a supporter of the project. "They've been very helpful from the start," Zarecki emphasized.

Of course, methane projects have been undertaken around the state, region and country, using manure digesters, landfill emissions and other raw material sources. Using water from a brewery has its own set of challenges, Zarecki said.

"We've had to make adjustments based at times on what they are brewing," Zarecki said. "The volume of water changes on the weekends and at night. So, you are making adjustments daily, hourly at times."

Such adjustments are necessary in all pioneering technology applications, added Zarecki, an engineer by trade. "We've made a lot of adjustments in our overall program on energy as we develop it. All I know is that we will reach our goal of becoming 100 percent independent," he said.

Gundersen Lutheran is in various stages of discussions and development of wind energy projects, in part with Organic Valley cooperative and Western Technical College, and possible environmentally-friendly energy projects in the Mississippi River.

A new parking ramp on the La Crosse campus includes solar panels on the roof. The electricity from the panels could power six to seven homes.

Gundersen Lutheran also has undergone a program of "retrocommissioning." Retrofitting of light fixtures in six buildings on the two campuses led to energy cost savings of $245,000 per year. Air handlers that blow warm or cool air through the buildings were adjusted to run only when needed, at a cost savings of $78,000.

Adjustments to how boiler systems work, to allow for the capturing of some of the heat produced, led to $64,000 savings. A process called chiller/tower optimization programmed into the cooling system on campus buildings realized an estimated $65,000 in annual savings.

"Some of the changes we're making seem obvious, but the way the space is used in buildings over the years has changed," Zarecki said. "That's why retrocommissioning is important. It takes a look at how the building's needs have changed to make sure your systems are being used in the most energy efficient way."

Gundersen Lutheran has issued the following "promise" as part of its "Energizing Healthcare" program: "Gundersen Lutheran is committed to environmental stewardship and energy management programs that promote a healthy environment for our patients, their families, our employees and the communities we serve. We are dedicated to solutions that make environmental and economic sense, creating a healthier environment and lowering health care costs."

What is called the Gundersen Lutheran "Envision Program" includes energy management through efficiency and renewable energy, recycling, waste management and control and sustainable design of new facilities."

Zarecki, while holding a soda can, said the effort begins with developing a "green" mindset. "As one of our company leaders says, I could throw this (the can) 'away', but away is someplace. You have to think of where that place is and what impact it has."

For more on the joint project with City Brewery and the overall Gundersen Lutheran initiative, go to: http://www.gundluth.org/green/

-- Hoffmann has written many columns and features for WisPolitics.com and WisBusiness.com over the years. He will write the GreenBiz column monthly.


Friday, October 23, 2009

Investment fundamentals for today's business executive

By Bernie Van Eperen
Most small business executives know that it makes sense to build a personal investment portfolio apart from the investment in their own companies, but that's often easier said than done. In reality, running a small business can require years of risk and self-sacrifice.

Often, a business owner or executive may be returning most, or all, of his or her earnings back into the business, leaving little or no funds for other personal finance goals. So, what can you, as a business owner or executive, do to help ensure your personal finances receive some much- needed attention?

First, it's important to tighten management and accounting controls in your business. This action can ultimately help make your company financially healthier and allow you more flexibility with your business capital. In addition, if you are like most small business owners and executives, you probably have a large part of your personal wealth tied up in or loaned to your business. Thus, it is important to separate your personal investments from those of your company.

How you manage your personal portfolio will depend on your personal needs and objectives. However, most business owners and executives share two elements of portfolio management in common: liquidity and diversification. A higher level of liquidity can help provide greater flexibility and may more readily enable you to take advantage of new business opportunities. Diversification is equally important to help manage your portfolio's level of risk. By varying your investments, you may be able to minimize the effects a decline in a single holding may have on your overall portfolio. Keep in mind that, although it may help reduce risk, diversification cannot eliminate the risk of investment loss.

Taking Control

Eventually, one of your primary goals (outside of your business efforts) should be to take as much control of your personal finances as possible. The following steps can help you develop a more complete savings and investment strategy:

* Separate your personal finances from your business finances.
* Save a fixed amount every week or month.
* Diversify your portfolio with a wide variety of holdings such as mutual funds, equities, annuities, and bonds.
* Protect your family and your business with proper insurance coverage (life and disability).
* Maintain adequate cash reserves.
* Stay current with regular financial reviews.

Just as long-term business planning and budgeting are important to the ultimate success of your company, the creation of a long-term investment strategy can be of great value to your financial success and your ability to provide for your family.

-- Van Eperen works at Groeschl Strategic Wealth Management Group, an office of MetLife. Van Eperen is a Certified Financial Planner with MetLife Securities, Inc.


Tuesday, October 20, 2009

Small steps to go green

By Ane Ohm
Reduce our carbon footprint. Go green. Save the environment. While there is no shortage of information on this topic, it's primarily focused on facilities -- lighting, heating methods, building construction. But real opportunity doesn't stop there. Changing your business practices themselves can help your customers and your business "go green."

Most companies will not buy a product or service simply because it is green. As noted Harvard professor Michael Porter established, competitive advantage is achieved by price or differentiation. The objective becomes providing eco-friendly offerings that also save costs and deliver superior results.

The first step involves identifying the opportunity. Ask yourself, is it possible to continue providing this good or service using fewer resources? If so, you may have found an eco-friendly or less costly solution -- or both. Remember, you don't have to re-invent the wheel. For small companies, making a difference is most often not a dramatic change, but rather a small step or a series of small steps.

Think about the areas of greatest consumption within your company. Does your product or service require guzzling gas, devouring paper, or creating waste? That should give you a starting point.

Our firm has been a traditional printing company. Most of our clients have a large customer base and do frequent high-volume billing. Clearly, we consume a lot of paper products. We developed a technology that allows our clients to provide electronic notification of statements to their customers and process online transactions. In turn, our clients save money because they reduce postage costs, consume less paper, and receive quicker turnaround of customer payments. The result not only lowers costs, but improves service results, achieving the differentiation described by Porter to achieve competitive advantage.

It sounds obvious, but it isn't always easy. Change is difficult, and selling this solution as simply "green" isn't enough. Even though replacing paper invoices with this electronic approach is a logical green step for companies that generate many bills, we sell it first and foremost as a cost-saver. For our customers, the fact that it's an eco-friendly solution is secondary. But we've found the green aspect is important to an increasing number of clients, and it can be very important to some of our clients' customers (again, differentiation).

So consider what changes your company can make either technologically or environmentally that can help you go green. While it remains secondary in the sales process today, it's becoming increasingly relevant. As companies continue to go green, they will require the same of their business partners and vendors. Take some small steps now to become more eco-friendly and let your clients know about it. Whether you're competing on price or differentiation, green practices and green solutions can only help you create competitive advantage.

-- Ohm is president of Laser-Net, a data management firm with offices in Green Bay and West Allis.


Monday, October 19, 2009

Wisconsin's economy benefits from free trade, so let's guard against protectionism

By Tom Still
Organized labor cheered a month ago when President Obama imposed three years' worth of 30 percent tariffs on low-cost tires imported from China. Unions blamed the loss of more than 5,000 production workers in five years on Chinese imports, so they rolled out the praise when Obama decided to make inexpensive tires cost nearly a third more.

It's hard to see what will be gained by the tire tariffs. They represent the folly of imposing nation-to-nation trade sanctions in a world where production, distribution and sales channels cross many borders.

No new jobs are likely because U.S. tire producers, who didn't support the tariffs, won't rush to compete with the Chinese imports. American tire-makers decided years ago to focus on high-end tires. And just because the Chinese tires will suddenly cost more, don't expect low-cost imports will stop showing up in American stores. Another supplier, also from outside the United States, will fill the orders. The next round of low-cost tires may come from Vietnam, Indonesia or India. What about American consumers? Well, they'll pay a bit more for new tread for their vehicles.

In the meantime, the Chinese will look for ways to slap tariffs on American goods, a retaliatory act that could lead to other tit-for-tat actions.

If a trade war breaks out, Wisconsin should be among the first states to duck for cover. Wisconsin is a state dependent on trade, in large part because so much of what the state produces -- farm goods, manufactured goods and even technology -- is consumed elsewhere.

"Trade is vitally important to the Wisconsin economy," said James Haney, president of Wisconsin Manufacturers & Commerce, in an interview with "WisBusiness: The Show." Haney noted each $1 billion in exports produces about 20,000 jobs in Wisconsin, which means more than 410,000 Wisconsin jobs are tied to trade based on the state's 2008 export total of $20.55 billion. That total is up nearly $8 billion since 2004.

When the 2009 figures come in, however, it will likely show that Wisconsin's recent exports surge has slowed or even receded. That wouldn't be surprising, given estimates that global trade will decline by 9 percent overall this year. The economy is the main culprit, of course, but protectionism remains a dangerous sidekick.

Earlier this year, the Global Monitoring Report by the World Bank noted "a pattern is beginning to emerge of increases in import licensing, import tariffs and surcharges, and trade remedies to support industries facing difficulties" brought on by the recession. The tire tariffs are but one example.

Wisconsin members of Congress can oppose protectionist legislation, of course, but state policymakers have no real jurisdiction over the issue -- other than to support free trade when they get the chance.

That means resisting the urge to score political points by criticizing state trade missions, such as the recent China-Japan trip. A $61,000 mission to churn up business with two leading trade partners (more than $1.8 billion in 2008) is an investment, not a junket.

It also means reaching fostering relations when there's a chance. A memorandum of understanding was signed last week by the premier of Manitoba and Wisconsin Gov. Jim Doyle to foster cooperation in agri-business, alternative fuels, renewable energy, biotechnology and more. Canada is easily Wisconsin's largest trade partner at nearly $6.5 billion in 2008, and Manitoba's relative proximity to Wisconsin means it imports more than its share. A similar agreement already exists between Minnesota and Manitoba.

Trade is a powerful force for good in the world, for political as well as economic reasons. In Wisconsin, it's also a matter of survival for many state businesses and workers.

-- Still is president of the Wisconsin Technology Council. He is the former associate editor of the Wisconsin State Journal in Madison.


Wednesday, October 14, 2009

Just do it! Time to implement your financial plan

By Kevin Reardon
Nike made the slogan 'Just Do It' famous in motivating athletes and couch potatoes around the globe to get out and exercise. The message was clear: we all offer excuses and rationales for not exercising, even though we understand the positive health benefits that come with an active lifestyle. Regardless of one's situation, constraints, or experiences, Nike encouraged us to just start exercising.

Many times we see well-intentioned people, even those who have had an extensive financial plan developed, sitting on the sidelines with plans that have not been implemented. There's a long list of planning areas to consider along with their corresponding benefits. Let's take a look at some of the key areas where we all need to 'Just Do It!'

Financial Plan

So often we deal with people who have never created a financial plan. The old adage that 'Failing to Plan' is equivalent to 'Planning to Fail' holds true. A financial plan doesn't need to be complex; it can be handwritten on a single sheet of paper. It simply needs to communicate the key areas of your financial life that need to be addressed. So, for those who haven't already, 'Just Do It' and schedule a meeting with a financial planner who can derive a plan that achieves your goals.

Savings Plan

We all know that we should be saving money for a rainy day and for retirement, but few of us do it in a regimented way. So often we 'buy first' and hope there is money left over at the end of the month to add to savings. This is no way to build wealth. Michael Jordan didn't shoot some baskets on occasion and then hope he was good enough when the game was on the line. He had a consistent and rigorous practice schedule. He visualized and practiced for situations that would enable him to make the big play to win the game.

We all should have a regimented savings plan, one in which money comes out of our paychecks or savings accounts before we have a chance to spend it. This quickly reigns in our spending habits so they are in line with our reduced budget. So, for those who don't save money on a regular basis and haven't accumulated a significant nest egg, 'Just Do It' and start saving money today. Even for those with unpaid bills, the time to save is now so you develop the discipline needed to succeed.


Ah yes, the dirty word! We have all had the uncomfortable conversation with the insurance agent telling us of the benefits and necessities of owning insurance. The thought of paying for the 'What If' situations just isn't appealing because we would much rather spend those dollars on something enjoyable.

The reality is that we don't buy insurance for ourselves. Rather, we buy insurance for our loved ones who would be impacted when we die. Imagine your spouse or children trying to pay bills and get by financially for the rest of their lives if you were to get hit by the proverbial bus and die today. Insurance is one of the greatest financial instruments ever created. By pooling risk across a large segment of people, we can purchase an incredibly large amount of insurance
for a relatively small expense. For those who have been avoiding the discussion regarding insurance, 'Just Do It' and call your financial planner today to schedule a needs assessment. Buy the protection your family needs.


The last 10 years have been historically volatile and challenging in the equity markets. In addition, the financial news is magnified and dramatized by the emergence of financial columnists, the Internet, and TV programs like CNBC. The constant news barrage of our latest financial challenges has kept many new investors on the sidelines and forced many established investors out of the markets. This has thrown well-contrived investment programs into the garbage. So there investors sit, earning meager money market or CD rates, with no strategic plan for their savings. Recognizing that a portfolio 'invested' in 100% cash is not a viable long term strategy, it is time to deploy your capital into assets that can provide the investment returns you need to meet your financial goals. There are always opportunities for profit, so 'Just Do It' and get back to a long term plan of investing. You will profit when the markets do rise.

Estate Planning

A well-seasoned estate attorney recently commented that 'anyone who has a pulse needs an estate plan.' At first I chuckled, but looking at his gray hairs and wrinkles, I realized that he had seen many scenarios gone awry because people didn't take the time to spell out their intentions should they be rendered incapacitated or incompetent, and for the distribution of their assets upon death. Every person should have a will, a power of attorney for health care, and a power of attorney for financial assets. So often we see young parents unwilling to draft a will because of the financial outlay in working with an attorney or because they struggle in picking a guardian for their children.

The flip side of not having an estate plan is that the state in which you live will make decisions for you if you die without a will or don't have the proper power of attorney documents. The thought of some bureaucrat making decisions for you or your family should be enough to 'Just Do It' and go meet with an estate planning attorney right away.

Nike inspired us to 'Just Do It' in referencing the need to exercise, even if we didn't know exactly how to do 'It.' The same holds true with finances. Even if you don't know exactly what you are supposed to do, chances are that you know you should be doing something. At Shakespeare, we suggest you 'Just Do It', and implement a well crafted financial plan right away!

-- Reardon is owner & president of Brookfield-based Shakespeare Wealth Management Inc.


Monday, October 12, 2009

You've landed the new job -- now what?

By Pamela Atwood
The first ninety days in a new position are critical to success. The President gets one hundred. Leadership transitions can be challenging and require different strategies depending upon the current situation of your new employer.

Is your company a turnaround, start-up, and re-alignment or successfully stable? Each situation requires different strategies, assessment tools and negotiations. Are you prepared? The stakes are high.

Failure in a new assignment can spell the end of a promising career. Transitions are periods of opportunity and chances to make change. They are also filled with intense vulnerability, lack of relationships and knowledge of systems. If you fail to build momentum during your first 90 days, it will be an uphill battle after that.

To help you avoid the potential uphill battle, I personally recommend reading the book, "The First 90 Days," by Michael Watkins. This book will assist you in developing your own transition acceleration plan. Watkins gives you tools to:
* assess your strengths and weaknesses while identifying vulnerabilities
* help you to identify challenges and opportunities
* negotiate a positive working relationship with your boss
* help you secure early wins
* build your team and connect with influential support coalitions

You can not afford to have the wrong people on your team. The most important decisions you make in your first 90 days will probably be about people on your team. If you succeed in creating a high performance team, you can create added value. If not, you will face difficulties, for no leader goes it alone. You will need to access team members, devise a plan to get new people moving, get some people off your bus; and moving others into the right positions -- without damaging performance. You will need to put in place goals, performance measures and incentives while promoting team work.

-- Atwood is president of Atwood Associates LLC, a Madison-based executive search, recruiting and consulting services firm.


Thursday, October 8, 2009

State's business climate needs to change

By Jim Haney
If Wisconsin's economy was compared to a hospital patient, the patient would be on life support and the family would be gathering to consider end of life treatment issues. We have serious problems facing our economy, and policymakers continue to promote legislation that makes many of those problems worse. It's time to call a halt.

Objective measurements of Wisconsin's economy indicate a continuing trend toward deterioration of our economic base. Forbes Magazine's annual report, The Best States for Business, recently ranked Wisconsin's business climate 48th among the 50 states. Only Michigan and Rhode Island trailed our performance.

Wisconsin's ranking was down five slots from last year's 43rd ranking. This year even the business climates of Vermont and West Virginia ranked ahead of Wisconsin. That is not the kind of company we can afford to keep.

Ironically, our best ranking in the Forbes report is quality of life, which measures issues such as quality of schools and health care, crime, cost of living, and poverty rates. However, the lowest ranking came in the category of growth prospects, the very means to pay for quality of life: projected job growth, income and gross state product growth, as well as business openings and closings, and capital investment. Wisconsin is in an economic race to the bottom, and it will impact the quality of life for all of our citizens when we can no longer afford to provide adequate government services.

The Wisconsin State Legislature is at a midpoint in its biennial schedule of deliberations. What they have produced, so far, is higher business taxes when businesses are facing unprecedented economic challenges, and an array of higher taxes and fees on individuals. Using the cover of the recession, the Legislature and Governor imposed $2.1 billion in new taxes, with over a billion of that amount coming from businesses and investors, and increased state spending by 6.2 percent. More modest spending would have negated any need for higher taxes.

On the regulatory side, things coming out of the Legislature aren't any better for the business climate. To date, the Legislature and Governor have dramatically expanded penalties for employment discrimination claims, and the Governor is recommending a package of state environmental regulations directed at global warming that will prove costly for both businesses and consumers.

Legislative committees are currently moving bills to regulate employers' ability to monitor office computers they own and are only provided to their workers for business purposes, create new protected classes of workers under state discrimination laws, and a host of other bills that will negatively impact manufacturers and retailers. Legislation to index the state minimum wage passed the State Senate early on, and it is rumored legislation is circulating to resurrect the ill-conceived liability expansion provisions that were removed from the Governor's budget bill very late in those deliberations. Not one of these bills will create or retain a job in Wisconsin.

In the midst of all of this, Wisconsin's Unemployment Insurance (UI) Trust Fund is running a deficit, which is likely to continue for several years as the economy recovers. It will be difficult to resolve the UI system's solvency problem internally through tax and benefit adjustments alone. What is really needed to return the UI system to solvency is solid economic growth coming out of the recession, with more Wisconsin workers receiving higher wages. Currently, we do not have state tax and regulatory policies that will achieve that. To the contrary, the Forbes business climate study says we are among the poorest positioned states for economic recovery.

It is bewildering when listening to the Legislature deliberate bills that evidence so little concern for the impact of higher taxes and expansive regulations on the business climate. Ironically, there appears to be no focus among the majority party leadership on job creation initiatives -- the party that often presents itself as representing the interests of workers. The recent Forbes release looking at a broad range of economic factors that impeded job creating in Wisconsin is a wake up call like no other.

Fortunately, it is not too late for business climate change in Wisconsin, but the Governor and Legislative leaders must call a halt to expanding regulations on business, and reconsider the increased tax burden on business and capital formation imposed earlier this year. Draft legislation is circulating to roll back some of the more onerous tax provisions adopted earlier this year, and to create hiring incentives for Wisconsin employers. These measures deserve bipartisan support, and prompt legislative consideration.

Next year's election is shaping up to be a referendum on Wisconsin's business climate, and specifically on the willingness for Wisconsin's businesses and industry to create and retain jobs. Every legislative vote cast this session on a tax increase or additional business regulations will be the fodder of political debate across the state, both for the open gubernatorial office, and for all of the State Assembly seats, and the half of the State Senate who will stand for election in 2010.

Unless the actions of lawmakers change in the remaining days of the legislative session, a year from now Wisconsin could be at the bottom of the Forbes business climate ranking. Business climate change must begin now.

-- Haney is president of Wisconsin Manufacturers and Commerce, which represents 3,500 businesses in Wisconsin.


Wednesday, October 7, 2009

The wrong 'public option' health-care plan could punish Wisconsin

By Tom Still
For reasons that would require an actuary and a congressional historian to explain, Wisconsin gets the short end of the stick when it comes to Medicare. It always has, since the dawn of Medicare in the 1960s, and perhaps always will.

Wisconsin's "donor state" status in Medicare has traditionally been two parts annoyance and one part point of pride. Wisconsin health-care providers grit their teeth over the state's low Medicare reimbursement rates, which pay them less than providers performing the same service in New York, Texas or Florida, but they draw some solace from federal studies that rank Wisconsin and Minnesota as the top "quality of care" states.

Now that some version of ObamaCare is edging closer to a vote, any satisfaction that came from doing more with less is giving way to a realization that Wisconsin's health-care "stick" is about to get even shorter.

Health-care reform without Medicare reform is likely to cost Wisconsin taxpayers billions of dollars over time. That's because the "public option" plan preferred by President Obama and many members of Congress would force Wisconsin to subsidize the health-care sins of other states. Here's why:

Under Medicare, the federal health-care system for the elderly, Wisconsin providers receive about 15 percent less than providers doing the same things in other states. If some form of Medicare becomes the "public option" alternative to private insurance plans, as favored by some in Washington, Wisconsin providers would again be underpaid -- and not just for the elderly.

Why do the rest of us care if hospitals, nursing homes and doctors in Wisconsin aren't fully reimbursed for Medicare services? Those costs don't go away, and are mostly passed on to individual consumers and companies that provide health coverage for their employees.

Wisconsin could be penalized in another way by the wrong "public option" plan. Wisconsin has one of the highest health care insured rates in the nation, or, put another way; it has one of the smallest percentages of uninsured citizens. If everyone nationally is taxed equally to pay for the uninsured, Wisconsin residents and businesses will be taxed to pay for the uninsured in California, Texas and elsewhere.

However, if the tax applies mainly to businesses that do not provide insurance, each state's economy will bear the cost roughly equivalent to what they will get back in federal dollars from the new program. In other words, Wisconsin businesses and health-care institutions wouldn't be penalized -- again -- for trying to do the right things.

Obama appears attuned to the regional disparities in Medicare reform, and many members of Congress have pushed to end the inequity. U.S. Rep. David Obey, D-Wis., the chair of the House Appropriations Committee, has called the regional disparities "outrageous."

So have leaders from major health-care organizations such as the Mayo Clinic, based in Rochester, Minn., and Wisconsin's Marshfield Clinic. They say Medicare's current funding formula (which reimburses providers nationally according to 89 local rates) pays the most to health-care providers and geographic areas that provide the lowest quality care at the highest costs.

Congress can accomplish health-care reform in a way which covers everyone and pays everyone more equally. The feds know how to do it. The Federal Employee Health Benefits plan, already in place, pays roughly equal amounts for care across the United States. Adopting that approach would avoid cost-shifting to private businesses in Wisconsin. By taxing only those businesses that don't provide health care, the cost of reform levels the playing field among states in competing for businesses.

Wisconsin's congressional delegation should demand that any "public option" plan under health-care reform doesn't perpetuate Medicare inequities or penalize the state for its historically higher quality of care and coverage rates. Health-care reform that taxes Wisconsin more to pay for care and coverage gaps elsewhere isn't reform at all.

-- Still is president of the Wisconsin Technology Council. He is the former associate editor of the Wisconsin State Journal in Madison.


Thursday, October 1, 2009

GreenBiz: Alliance works to expand state biofuel industry

By Gregg Hoffmann
The ethanol and overall biofuel industry has been started and built primarily by independent entrepreneurs to date in the nation and Wisconsin.

That independent spirit remains alive today, amidst a recession and attacks by the petroleum industry and others. It can be both an asset and a liability as the industry moves into a more mature phase.

"I once had a farmer tell me he'd rather go broke on his own than make money by sharing," said Josh Morby, who serves as a representative for the Wisconsin Bio Industry Alliance. "That independent, competitive spirit is still very much alive. At times, there has been some dissension in the industry, but the alliance was formed to see what members can agree on, and perhaps collaborate on."

The alliance is a non-profit corporation "that supports the development of bio-based renewable energy, power and products in Wisconsin." On its web site, it contends that "by bringing the appropriate players to the table, the organization will grow the bio-economy in Wisconsin, concentrating on a specific series of campaigns targeted at the most fertile opportunities in Wisconsin."

The bio-fuels industry has already grown to more than a $1 billion industry in the state. The alliance is conducting an economic impact study that should illustrate in more detail just what the past, present and future impact of bio-fuels could be.

Wisconsin now ranks seventh in bio-fuels production in the nation. It has created jobs in agriculture, construction, actual production of the fuels and in other areas, Morby said.

The alliance is working with a bipartisan group of legislators on bills and proposals that could make biofuels a bigger part of the state economy. One proposal will come up for a hearing on Oct. 7. It includes several recommendations that will build on the existing infrastructure of the industry and help expand it to include exploring the use of switch grass and other feed stocks for production.

Biofuels started first primarily as ethanol. In fact, the alliance grew out of the Wisconsin Ethanol Coalition, a movement to require 10 percent ethanol in all fuels in the state. That movement failed, but the coalition remained at least partially together and in the past 3-plus years has grown.

Members of the organization include ACE Ethanol, Didion, Renew Energy, Sanimax. Western Wisconsin Energy, Best Energies, UWGP, Utica Energy, Michael Best & Friedrich, Miron Construction, Plum Creek, U.S. Energy, Oscar J. Boldt Construction, Whyte Hirschboeck Dudek law firm, Alliant Energy, WIPFLI, Agra Industries and J.F Ahern Co. There also are several associate members.

The alliance works with members and its associates on marketing, education, lobbying and other endeavors. Part of its mission in recent years is to counter what bio-fuel producers think is propaganda, created in part by the petroleum industry.

"Petroleum producers are our main competitors and our biggest customers," Morby said. "Ethanol is blended into most of the gas sold in Wisconsin, so they are buying our product."

That makes for an interesting relationship at times. Some of the claims against ethanol -- that mileage will be reduced by using bio-fuels, that energy is used to grow the corn and other feedstock, that ethanol takes corn out of the food supply, etc. -- Morby does not completely deny.

"DDT does a great job of killing bugs. Gasoline does a good job of fueling automobiles. If you want to use them, fine, but it's really about choices," Morby said. "We're talking about a cleaner-running fuel, from renewable sources, right here and not from foreign countries."

Morby said he keeps many of the claims, and the alliance's counter arguments, in a binder, but has them memorized so seldom has to refer to it anymore.

The alliance emphasizes that bio-fuels now go beyond corn-based ethanol, to bio-diesel made from restaurant wastes and many other sources. Many bio-fuel plants also produce byproducts that are used as food for livestock and people.

For example, Didion, based in Columbia Country, has developed a way of separating the protein from the starch in making ethanol. The protein is used for a corn-soy food product that provides agricultural food relief to people around the world.

"That counters the 'food vs. fuel' concept you hear at times," Morby said.

CO2 from bio-fuels plants also is captured and used in the packaging industry and by beverage makers. "Leinenkugel's buys CO2 from an ethanol plant in Monroe, for example," Morby said.

In addition to playing coordinating and advocacy roles, the alliance is building databases for educational purposes. For example, media can access a list of industry experts via the web site at www.wisconsinbioindustry.com. There's also a list of cars that run on the various blends of ethanol and gasoline where consumers can find out whether their auto can use it.

Morby regularly writes a blog on the alliance web site. Recent topics included job growth from ethanol (147,000 jobs in the country and 400 at nine plants in Wisconsin), South Dakota research that converts dried distiller's grains into flour, and a proposed biomass power plant in Rothschild that will use wood and paper waste from a local paper mill as an alternative to coal.

Morby said the bio industry in the state has come a long way, in part through support from the Doyle administration and recently the federal government. The U.S Department of Energy started reviewing an application in September for $1 million for the state through BRAIN (Biofuels Retail Availability Improvement Network) for installation of 27 E85 and biodiesel retail locations.

The state also will get $15 million in stimulus money for clean transportation projects through the federal Clean Cities program. The funds will pay for the deployment of 502 alternative and advanced technology vehicles through 119 public and private entities in the state. That grant was the biggest given to any state in the country.

More than 40 state companies also have filed applications for stimulus funding for energy efficiency and renewable energy, including bio-fuel projects. Wisconsin has been allocated $55 million in funds from the American Reinvestment and Recovery Act. The initial round of $28 million has already been allocated.

Projects include biomass densification, waste-to-energy initiatives, development of second generation bio-fuels and the manufacturing of components for renewable energy.

-- Hoffmann is a veteran journalist who has written on a variety of topics for Wispolitics.com and WisBusiness.com. He writes the WisBiz GreenBiz column monthly.


Coveting greener grass: Wisconsin's start-up economy is tied to a larger region

By Tom Still
Forget Saturday's football showdown between the Wisconsin Badgers and the Minnesota Golden Gophers. Ignore the Monday night football game between the Green Bay Packers and Brett Favre's Minnesota Vikings. The real cross-border game these days is all about biotechnology.

At least, that's the view from the newsroom of the Minneapolis Star-Tribune, which recently published a two-part series headlined "A bio border battle" and "Badger state tech boom." The stories call attention to Wisconsin's emerging technology sector -- and even declare Minnesota an "underdog" in terms of catching up.

While it's human nature to perceive grass on the other side of the fence as greener, the Star-Tribune series (and a related blog item headlined, provocatively, "Wisconsin kicks out butt") is emblematic of a growing awareness about Wisconsin's ability to transfer research into start-up companies. After years of building a more entrepreneur-friendly economy, Wisconsin is finally moving beyond Rodney Dangerfield status and gaining respect. Other examples in recent weeks:

* Nineteen Wisconsin companies were selected by the MidAmerica Healthcare Venture Forum to make on-stage pitches to investors who will attend the group's annual conference, which will be held Nov. 11-12 in Madison. The next largest contingent of companies from any one state is eight from Ohio.

* Springboard Enterprises, a national group dedicated to connecting women-led businesses with private equity capital, held its "All Things Life Sciences" conference this week in Madison, attracting investors from across the United States.

* A recent gathering of tech-based organizations in Chicago examined Wisconsin's experience with a five-year-old investor tax credit law in hopes of persuading the Illinois Legislature to follow a similar approach.

* The Wisconsin Early Stage Symposium, which annually gives start-up companies a chance to pitch their companies to investors, received more than 50 applications this year -- including 10 from Minnesota, Iowa and Illinois. This tech-based matchmaking event will be held in tandem with the MidAmerica Healthcare Venture Forum in November.

* The premier of Manitoba, who will soon become the next Canadian ambassador to the United States, will visit Wisconsin in Oct. 15 to sign a protocol agreement with the state that highlights opportunities for growing tech-based businesses.

The Star-Tribune series was sparked by the move of several Minnesota tech companies to Wisconsin, which, while hardly an exodus, highlighted the lure of Wisconsin's investor tax credits and a generally healthy system of launching homegrown early stage companies. Some members of the Minnesota Legislature are now hoping to emulate Wisconsin's tax credits law.

There's some irony in Minnesota looking to Wisconsin as an example -- because for years, Wisconsin's tech community looked with envy upon Minnesota. It is a state that built a medical device industry around companies such as Medtronic, Guidant and St. Jude, and which continues to attract far more venture capital in any given year than Wisconsin. Most important, per capita incomes in Minnesota and Illinois still outpace Wisconsin by at least $4,000 per year.

But outsiders sense momentum in Wisconsin, and perceive the process of creating and nurturing start-up companies here is more cohesive. The Star-Tribune quoted Pete Bianco of Halleland Consulting, a Twin Cities firm with corporate experience in Wisconsin, as saying: "You just get this sense of forward motion. Wisconsin is doing something right. I would like to see Minnesota do the same."

It's reassuring that people in Minnesota, Illinois and beyond are taking note of Wisconsin's tech-based economy, which has always boasted some of the world's best academic research and now has some impressive companies to match. But the end game in Wisconsin should not be about gaining a leg up on Minnesota, Illinois or any other neighbor. The real imperative is competing on a global stage.

The region that includes Chicago to the south and the Twin Cities to the west is the "I-Q Corridor," a place where ideas, innovation, intellectual property and investment combine to create interstate quality. It's a region that can compare itself with many others nationally -- and which must compete with emerging economies in China, India and beyond.

It's productive and even flattering that some people in Minnesota and Illinois see Wisconsin's grass as being greener. But let's remember the real goal is a lawn big enough and green enough for everyone to play, work and prosper.

-- Still is president of the Wisconsin Technology Council. He is the former associate editor of the Wisconsin State Journal in Madison.


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