• WisBusiness

Friday, January 29, 2010

Minimum wage regulations harm job market

By Jim Maas
Numbers released by the Department of Labor show a rise in the unemployment rate for Wisconsin. Bad news is the 8.7% unemployment. The good news is that we don't live in Michigan, Illinois, or even Samoa.

Samoa? Remember the American territory in the South Pacific? It comes to mind because in a recent CBS 60 Minutes program on Samoan football and football players in the NFL, it mentioned that, because of a 2007 U.S. minimum wage law, their tuna industry has been devastated.

Congress insisted that the $3.76 for canning fish would increase to a minimum wage like we have in the United States. Wasn't that generous of them?

Samoans understood economics better than Congress and didn't want the increase since their canneries compete with Thailand, which pays 60¢ an hour. Congress didn't listen and Chicken of the Sea flew the coop soon after. That is a job loss of 2,041 out of a total population of around 65,000 (about the size of Eau Claire). Samoans don't have a lot of other options. And the only other cannery is laying off.

Washington acted, being the thoughtful, caring, Borg Collective that it is, and the Samoa News reports American Samoa received a grant of $925,000 from the U.S. Department of Labor for the Disaster Unemployment Program.

Time Magazine recently reported that, "In a Tough Job Market, Teens Are Suffering Most." According to people who should know, "Proportionally, more kids have lost jobs in the past few years than the entire country lost in the Great Depression."

My dad was a teen during the Depression, working in the kitchen at Camp Tesomas (Boy Scout Camp). He worked for just room and board since he had three siblings back in Wausau and times were tough. That wouldn't be possible now. We have minimum wage laws -- so workers can get a "living wage," if they can get a job at all.

Samoans, American teens, and displaced workers need jobs! Jobs they are willing to work for a rate the employer is willing to pay. Having government mandate that they can't work during a recession unless the employer is able to pay an artificially established "minimum" is insane. It is absurd to argue that unemployment is better than employment at a low wage rate. What workers need to succeed is freedom.

Today, even if a worker wishes to work, he or she is prohibited from doing so in Wisconsin and American Samoa. Potential employers go without another employee willing to work at a mutually satisfactory rate. This is not the way to get the economy restarted.

Neither employees nor employers benefit from minimum wage legislation. A minimum wage law cannot achieve its intended goal because it prevents those who need extra income from working at all. It should be clear to anyone who wants to help the economy and the unemployed that the sensible course of action which must be taken is a rollback of misguided minimum wage laws.

Who would it hurt?

-- Maas is vice chairman of the Libertarian Party of Wisconsin.


Thursday, January 28, 2010

Stumbling down the stimulus trail

By Bill Kraus
I have walked the walk, listened to the talk and concluded that the "jobs" issue leads to a dry hole in Wisconsin and an unpromising trip to the bank in Washington.

No government is in the job creating business, wants to be in the job creating business or knows anything about the job creating business. And even if one went into the job creating business, it would not be able to stay the course given the public criticisms of the inevitable failure rate that attends the job creating business.

Government stimulus money instead goes to going concerns whether public or private. The public money for the most part goes to shovel-ready contributions to infrastructure restoration and creation or provide what are considered vital services, such as education, where revenue streams are shrinking.

The government-funded stimulus programs for the private sector can be classified as geographical or do-good welfare. Some consist of very narrow or very specific grants or loans designed to create jobs in depressed and depopulating areas. The Wisconsin Department of Commerce, for example, will lend money to anyone who will set up a business in a town of less than 3,000 or 1,000. Geographical welfare.

Other Commerce Department grants are available to companies that will invest them in energy efficiency and greening up existing enterprises. Do-good welfare.

All of this is okay. None of it creates jobs in or for a new economy.

There is an initiative being considered in the Wisconsin Legislature which would provide some money, tax and investment incentives, and support for private sector job creating. Funding is going to be the problem since the state is trying to dig out of a multi-billion dollar deficit hole, but it is the only real sign of stimulus life in the state sector.

Until and unless this happens the only organizations trying to create jobs outside the angel and venture investment businesses that I have found in Wisconsin are the quasi-governmental non-profit CAPs [leftovers from the 1960s losing war on poverty] and also non-profit development districts that have been created to bring jobs to depressed areas anywhere.

This doesn't mean there isn't anything the governments can and should do to create jobs. They can provide incentives and inducements to private sector investors to do those things that need to be done which the government can't and shouldn't do.

Incentives can be created that are patterned on the TIF [tax incremental financing] model that local governments have used for years to give tax breaks to developers who will build things with long-term revenue potential for the tax postponing government.

Treating capital gains even more kindly than they are currently being treated is another possibility.

Certainly investors and economists in the private sector have many more ideas about how to get more money flowing to the funds, the funds of funds, and to places where the best and the brightest believe our economic future lies.

What is clear is that the government should not, cannot do this and the private sector investors will not do it until and unless they can see that there is money to be made commensurate with the risks involved.

I wonder if all those candidates talking about how their priority in their stump speeches is jobs know this.

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


Wednesday, January 27, 2010

Protecting yourself from identity theft

By J.B. Van Hollen
Identity theft continues to negatively impact many of our citizens. Chances are you or someone you know may have experienced some form of identity theft. According to the Federal Trade Commission (FTC), as many as 9 million Americans have their identities stolen each year. Statistics released by the FTC for complaints per 100,000 population, revealed that Wisconsin ranked 41st in the nation with 2,450 victims in 2007.

Some Wisconsin residents have experienced a very sophisticated phone scam. It began with a phone call and an automated message indicating that your debit card has been deactivated because of questionable charges. Then, the recording asked folks to 'Please enter your 15-digit card number,' tricking people into giving up important credit card and financial information.

In this case, the scam was further complicated through the use of hijacking a legitimate business's phone number that was portrayed on caller I.D.

No one is immune from becoming the victim of identity theft. With stolen identities, identity thieves commit credit card fraud, telephone or utility fraud, employment fraud, Internet fraud, bank fraud and evade traffic citations or arrest. If you take the following steps you can lessen your chances of becoming an identity theft victim:

* Manage your personal information wisely; make sure you know why your personal information is required and how it will be used.

* Shred discarded personal records and documents.

* Don't give out personal information on the telephone, mail or Internet unless you are sure whom you are speaking with.

* Pay attention to billing cycles.

* Guard your mail from theft.

* Do not carry your Social Security card, extra credit cards, birth certificate or passport, except when necessary.

* Order copies of your credit report yearly.

* Keep personal information in a safe place.

If you become the unfortunate victim of identity theft you need to take the following steps immediately to best insure protection:

* Contact your local law enforcement agency and report the crime.

* Contact the fraud department from each of the three credit bureaus:
Experian, 888-397-3742, http://www.experian.com
Equifax, 800-525-6285, http://www.equifax.com
Trans Union, 800-680-7289, http://www.transunion.com

* Document and keep records of all correspondence.

* Contact creditors for any fraudulent accounts opened or tampered.

* Contact the Federal Trade Commission (1-877-ID-THEFT).

As with most crimes, awareness is an effective weapon against many forms of identity theft. Protect your personal identifying information with the same security as you do with your personal property. Be aware of how personal identifying information is stolen and what you can do to protect yours. Armed with the knowledge of how to protect yourself, you can make an identity thief's job much more difficult.

-- Van Hollen, a Republican, is Wisconsin's attorney general.


Book review: "Celebrating Failure"

By Terri Schlichenmeyer
by Ralph Heath c.2009, Career Press $14.99 / $20.50 Canada 191 pages
You almost felt a little sorry for him.

You gave one of your employees a project and he screwed up. Not a little, either. No, this was a colossal mistake and you can see that he's mortified, times ten. He's apologized on several occasions and this is fix-able (eventually), but you don't know whether to laugh, fire him, or send him off to a remote work-post in Northern Siberia.

But hold off ...

He won't make that mistake again, will he? And that means he's learned from it. In the new book "Celebrate Failure" by Ralph Heath, you'll see that you should not only expect mistakes in your company, but that you should actually seek them.

For over 30 years, Ralph Heath was the owner of a high-profile ad agency in a small Wisconsin city, and he counted several world-wide corporations on his client list. But because of a "dumb little kid" lesson he learned as a child, Heath had an unusual way of running his business: his employees were celebrated for their failures. Mistakes were not only allowed, they were encouraged.

Heath emboldened his staff to think big in an "idea-friendly environment". Everyone, from creative to sales to Heath himself, was inspired to come up with ideas that might seem risky. Some of the ideas worked, and some of them failed but the latter was never a cause for termination or reprimanding in Heath's company. Failure was seen as a chance to learn what was missing, where the idea went wrong, and what could be done better or right the next time. Even the most "mistake abused" employees were taught that failure was good.

Heath says that you'll get better results from your staff if you understand that quitting is quitting, not failure; you have to finish to fail. Learn to ask for constructive criticism when something goes wrong. Take responsibility. Be willing to "blow things up" and begin again if the situation warrants. Take the word "wait" from your vocabulary. Above all, says Heath, "successes and failures should both be lauded."

I liked this book. It's easy and quick to read, filled with stories that make their point, and you'll even get a few chuckles now and then.

But ...

Author Ralph Heath fails to stay on-topic a lot of the time. Much of this book is about how to treat employees and customers and how to run your business well, which seemed to me to be instruction in avoiding failure, not celebrating it. Nitpicky, yes. And it doesn't make this book any less useful, but it bears noting.

Secondly, I wondered if brazen risk-taking would be warmly embraced in all companies. Although it's not addressed here, "Celebrating Failure" would probably work best at a company whose employees don't have to answer to profit-minded, ultra-conservative shareholders and boards of directors.

Still, if you're looking for a way to energize employees and you have the leeway to do so, this book will make you want to act tomorrow. "Celebrating Failure" is a book you shouldn't fail to read.

-- 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.


Tuesday, January 26, 2010

Never too early: Steps to getting your estate in order

By Kevin Reardon
When we hear the words "estate planning," it's probably natural to believe that's a task that can be put off until we get older. In fact, the best estate planning begins early and is usually sparked or adjusted by major transitions in life. Such life transitions include marriage, divorce, the birth of a child, death of a loved one, a major health event, a major career change, or even an inheritance.

It's important to coordinate financial planning with estate planning because what you do with your money today will have a direct impact on the estate your heirs will receive years from now. It all starts with basic spending and planning goals.

Let's take a closer look. Here's a general road map to that process:

Start with a trained financial planner

Whether you plan to stay single, re-marry or move in with a new partner, it's good to get a baseline look at your finances as early as possible before estate planning can begin. A CERTIFIED FINANCIAL PLANNER™ professional can help you review your new current spending and savings needs, compare strategies to achieve long-term goals, such as college and retirement and give you critical tools to protect your assets and loved ones if you should happen to die suddenly.

Talk with a trained estate attorney about wills and other critical documents

True, there are software programs and other kit solutions available for writing basic wills, powers of attorney and certain simple trust agreements. The good news is that these packages offer short-term savings. However, the bad news is they have the potential for greater costs in the long run if you choose the wrong package or if you fail to follow all instructions to the letter. It makes more sense to coordinate your financial planner's activities with an estate attorney who can tailor an overall estate plan that is specific to your needs. Even if you are very young with few assets, get some solid advice in this area so you'll be able to manage and adapt such planning as you age and your finances get more complex. It's usually a good idea to revisit your estate plan every five years or whenever you have a major life change.

Make a guardianship game plan for your kids

It's not enough to plan how money and assets will go to your children if you or your spouse die suddenly or are incapacitated. If your children are minors, it's particularly important to make sure you and your spouse have a guardianship plan for their upbringing as well as any assets they may inherit. You should give your chosen guardians a road map on how to handle the assets you leave behind. You should also ask your proposed guardians before you name them. This way, you still have the chance to name someone else if your first choice is unable or unwilling to carry out that responsibility. If there are any trust or wealth issues that will become effective for your children once they reach adulthood, it's important to establish an efficient legal structure, such as a trust created under your will for distributing those assets. A trust under your will would name a trustee who can train and guide your kids through that financial transition.

Plan for kids who have special needs

If one of your children is disabled and is expected to need lifetime assistance of some type, you should consult a qualified attorney to help you create a special needs trust. It will help protect your child from having to give up any public or social financial assistance. It will also preserve access to special doctors, medical help, specific prescriptions or treatments that could be taken away if they were to personally inherit assets that would disqualify them for these programs. When such assets are held in a properly designed special needs trust, they are not counted as the child's assets. The advantage is that those trust assets may still be used to support their housing or other personal living needs.

Get solid insurance protection in place

If you are married or are single with a child to care for, you really should consider purchasing insurance that will cover any eventuality. Not only will adequate life insurance benefit your family, but you and your family will also benefit from adequate health, property/casualty and disability insurance. If you're newly single, you certainly need the best health coverage you can afford for yourself and your kids. However, life, property, liability and disability insurance become doubly important, particularly if you failed to address those needs during the divorce. Even if your ex-spouse is cooperative with financial support, it's wise to insure yourself as if they weren't. A qualified financial planner should be able to review those options in detail.

Review all your investments for primary ownership and beneficiary information

While you are married, appropriate designation of property as separate, joint, or (if applicable) community property can provide legal, tax and asset protection advantages. In a divorce situation, even if you were advised correctly to change the names on assets you and your spouse were dividing between yourselves, you should perform a post-divorce to review that the ownership names and beneficiary designations are indeed correct on those assets. And most importantly, to make sure all beneficiary information is correct.

Plan for multigenerational issues

For individuals and couples with elderly parents and/or young kids starting out on their own, it might be smart to do a multi-generational estate checkup at the same time. Why? Because, in families with significant assets or other pressing financial issues involving businesses or dependents, each generation's wishes for the dispersal of shared or personal assets should be documented legally and shared with all the relevant parties. In some families, this may mean the future of a multigenerational family business, perhaps one of the most complex estate issues any family will face. For other families, the assets may consist mainly of cash, property and other investments but similar problems can occur when all the parties aren't on the same page about who will get what, how and when they will get it, and who is in charge during the process.

Activate trusts and other estate transfer mechanisms

It is surprising how often estate attorneys and other people in the advisory process fail to get their clients to actually title assets in the name of living trusts and other mechanisms to transfer wealth. It's not enough to set these mechanisms up. Get step-by-step instructions on what needs to be done to make them effective.

Make sure your health and financial representatives know your wishes

Oftentimes, people tell a close friend or relative that they have been given power of attorney over health and financial decisions of a loved one, but there's no further effort to share those wishes or show them what their legal documents specifically instruct them to do. Both sides should go over this information as soon as the person agrees to be the other's representative.

Remember: it's never too early to get the estate planning wheels into motion.

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


Monday, January 25, 2010

Technology has made it easier to donate after a disaster -- and more efficient

By Tom Still
Record-breaking numbers of people have text-messaged $10 pledges to the American Red Cross to help the relief effort in Haiti. Companies and other large groups have coordinated sophisticated deliveries of cash, goods, equipment and even volunteers through the Internet, also to help that earthquake-ravaged nation.

In ways large and small, technology is taking some of the disaster out of disaster relief.

Anyone who has watched a National Football League playoff game since a series of Jan. 12 earthquakes devastated Haiti has seen the "Text 'Haiti' to 90999" program of the Red Cross, which has worked with mGive.com and a dozen mobile carriers to raise tens of millions of dollars.

That's an example of how technology has made it easier for small donors to give -- and people have responded. Another avenue with strong Wisconsin ties is a prime example of how technology has also made it more efficient for larger companies and groups to give, and for recipients to effectively make use of a wide range of donations.

The Aidmatrix Foundation (http://aidmatrix.org) has become something of an eBay for the charitable and disaster-relief worlds. It uses the power of the Internet to get the right aid to the right people at the right time -- mainly by connecting willing donors with recipients and, sometimes more important, the right transportation channels.

Led by former Wisconsin Gov. Scott McCallum and powered in part by servers managed by Madison-based Supranet, Aidmatrix works with more than 35,000 partners each year to mobilize $1.5 billion in donations. Its supply-chain management system offers a virtual one-stop shop for donors and end users, whether those groups are involved in disasters such as the Haiti earthquake or the everyday crisis of feeding hungry people through America's food pantries.

McCallum, who joined Aidmatrix as its chief executive officer five years ago, said the system has been busily connecting donated resources to Haiti, ranging from large supplies of water to food, fuel and medical supplies. It is working directly with the U.S. military's Southern Command, which is providing military support capabilities to civil authorities to help stabilize and improve the situation in Haiti.

Last week, the U.S. Agency for International Development announced it will use Aidmatrix's network. Aidmatrix is also working with Project HOPE, the International Society of Transport Aircraft Trading, the American Logistics Aid Network and others to post needs, accept donation offers and to help match those offers to needs. As McCallum explained, that's done without Aidmatrix physically handling goods or equipment.

"We never take control of any product, nor do we make the decision where things go," he said. "We don't control the system. We help it function more efficiently through technology and the marketplace itself."

For example, Aidmatrix can pinpoint supplies that may be located in a warehouse in Spain, which can be directed to Haiti through volunteer transport services that may come from one of 8,000 providers. Emergency care workers and government or non-profit "allocators" at a disaster site decide what donations they need most.

"It might be a case of, 'Please send more water; hold the clothing and Teddy Bears for now,' and that message can be relayed throughout our system," McCallum said. "It helps others fill their most urgent priorities. If nobody needs a certain product, it never moves."

But even hard-to-move donations sometimes find a home. McCallum noted that a donation of carpet remnants from California eventually found its way to Iowa following flooding there in 2008.

Aidmatrix is the network for virtually handling most donated food in the United States, all without owning a single warehouse or truck. America's Second Harvest, the United Nations Food Programme, the National Association of Free Clinics and First Book are among major partners.

It also works with 46 states and the U.S. Federal Emergency Management Administration, and the 50-person organization is competing to become the technology hub for food pantries in one of Europe's largest nations.

"My goal is pretty straightforward," McCallum said. "We want donated goods from across the world to move through our network to find a home. If we can do it better and faster through our partners, donors and recipients alike are winners."

It's a goal that could make a life-or-death difference in Haiti, or the next inevitable place where disaster might strike.

-- Still is president of the Wisconsin Technology Council. He is a member of the Aidmatrix Foundation advisory board for the Americas.


Thursday, January 21, 2010

More work, fewer people -- IT staffing in a jobless recovery

By Tom Burzinski
A December 2009 report from the research firm Gartner, Inc., suggests that the budgets of Information Technology (IT) departments will "sustain a worldwide average growth rate of 0% into 2012." Despite optimism that the world economy is recovering from the worst recession in 80 years, CIOs report a bleak outlook for IT employment growth, compelling many to consider a "jobless recovery" as the new normal.

Unfortunately, for most IT leaders, a flat budget and staff will likely not translate into a willingness on the part of the business to slow its ever-increasing demand for IT services. As companies struggle to recover from the Great Recession, Gartner predicts that "IT leaders will be expected to meet significantly expanded business goals without meaningful increases in IT staff." This new reality is causing IT leaders to look for ways to maximize the productivity of their staffs without burning them out. In its report, Gartner suggests, "Make smarter decisions about what people will work on, not just how they will work, and then design workgroups and teams for versatility and agility."

Doing more with the same, or fewer, people means that IT leaders must build teams that are self-directed, composed of people willing to play many roles, and function in a manner capable of smoothly adjusting to changing business needs in support of an uncertain business environment. These agile IT teams must also have a proactive sense as to the value IT can provide as a key component of improved business performance. One way of building such teams is to adopt an agile project management methodology such as Scrum.

Scrum offers an alternative to traditional project management methodologies. It stresses an empirical vs. a rigidly defined method of running a project. Scrum is also a flexible framework adaptable to any industry, company size, or project need. By using Scrum, teams learn as they proceed, plan for and embrace change, and deliver working solutions frequently and iteratively within a framework that fosters close collaboration between IT and the business. Scrum has been shown to enhance project innovation and ingenuity while providing an opportunity for improved job satisfaction for those people engaged on a Scrum project. With proper prioritization by the business, Scrum teams deliver only those projects possessing the highest business value, while avoiding wasted time building features of limited business value, thus allowing an IT staff to maximize its value to the business.

A key tenet of Scrum is transparency. Scrum allows IT leadership to open the door to IT so the business can clearly see the value it is getting from its IT staff. At any moment, the business can easily determine which business features have been completed and which features will be worked on next by IT. Moreover, Scrum's requirement that any feature denoted as finished be business deployable, means that IT teams can no longer provide inflated progress reports or take credit for intermediate deliverables (e.g. design documents) that really have no direct business value.

How quickly an IT staff can identify project issues and take corrective action is critical given today's constantly changing business landscape. By employing Scrum, IT organizations view change as a normal part of any IT project and are able to quickly react to change, thus increasing their value to the business while giving the business the IT solutions it truly needs.

Scrum also supports effective business and IT communication throughout the company. Effective communication between IT and the business is critical to driving maximum business performance from an IT staff. With traditional project methodologies, walls are often artificially introduced between IT and the business preventing the free flow of information critical to successful project outcomes. Scrum breaks down these barriers because it requires the business and IT to participate regularly in every aspect of a project's execution. The Scrum framework provides daily opportunities (Scrum calls these "inspect and adapt" points) for the business and IT to jointly review and adjust: project deliverables, how the team is functioning, project impediments, and lessons learned.

Introducing Scrum into any organization can be challenging for both IT and the business. While implementing the Scrum framework is fairly straightforward, not making related organizational and behavioral changes at the same time will prevent a company from reaping the ultimate benefits offered by Scrum. Instilling the "agile heart" across a company fosters a new paradigm of continuous improvement that helps establish IT as a key business partner while helping a limited IT staff to deliver greater business value per available IT headcount.

Dealing with a jobless recovery requires that IT leadership think and behave differently from the past where economic expansion always triggered recruitment and talent competition. Assuming Garter is correct, IT leaders must not "assume that demand can be met by turning the people pipeline on and off, [IT leaders] must assume that the pipeline is indefinitely constrained, and investigate or invent new ways to satisfy demand." By using Scrum, IT leadership can build teams that are versatile, can swarm rapidly and effectively to address dynamic market opportunities, raise productivity, and improve job satisfaction while reducing disruptions caused by the loss of key IT staff due to increased business demands.

-- Burzinski is a Certified ScrumMaster and the Director of the IT Business Consulting practice at Skyline Technologies. If you are looking for more information on Scrum and agile methodologies, Tom can be reached at 920-593-3651 or tburzinski@skylinetechnologies.com.


Tuesday, January 19, 2010

Attracting more venture capital is a priority for Wisconsin

By Tom Still
Wisconsin entrepreneurs and researchers do a world-class job of coming up with ideas that will transform health care, energy, manufacturing and other industries. Finding the investors who can move those ideas forward is too often the problem.

While Wisconsin's angel capital investments have climbed steadily, the state continues to lag in the next stage of private equity investments -- venture capital. These rounds of investment, which begin around $2 million and build upon smaller investments by individual "angels" or networks of such investors, can help turn a start-up into a thriving company.

Look for 2010 to be a year in which there will be more private and public efforts to build Wisconsin's venture capital supply.

At least three private funds that intend to invest in Wisconsin and the Upper Midwest are busily raising funds now. Two are funds with roots in Wisconsin; the third is a Midwest fund that targets health care and biotech investments. At the same time, large companies with strategic investment arms as well as foundations with investment funds are looking to invest in the Midwest.

An effort to build a 'fund of funds' similar to what is working in Indiana, Ohio and elsewhere is gaining momentum, thanks to public and private cooperation. Ohio established the $150 million Ohio Capital Fund several years ago to co-invest with private venture capital firms. The state requires that 75 percent of the Ohio Capital Fund's investments be in Ohio-based venture funds and that half of all money invested must be pumped into young Ohio companies.

That is unlikely to be the Wisconsin approach, in part because state leaders have been hesitant to invest any serious money in a venture fund -- beyond investments already made by the State of Wisconsin Investment Board. Over time, SWIB has allocated $200 million for venture investments out of a total portfolio exceeding $78 billion. All but $15 million of that $200 million has been invested over 10 years, largely through funds with Wisconsin ties, but with no requirements that investments take place in Wisconsin.

During last year's budget debate, a modest proposal to create and fund a Wisconsin Venture Network using money from higher securities fees was hollowed out when all but a fraction of the money was earmarked for the general budget.

In the long run, maybe the state's reluctance to get involved in venture investments is the right course. Privately run funds aren't subject to geographic investment requirements or unrealistic expectations that returns will somehow match the next election cycle.

One state program that has stimulated early stage investments is the Accelerate Wisconsin investor tax credits program. Since 2005, Wisconsin investors in "qualified" state companies have been able to receive a 25 percent state tax credit spread over two years. The program will essentially triple in size in 2011. But a number of companies need investors now, so the Legislature is looking to speed up the expansion by making at least $3 million in additional credits available this year.

Because of how the credits work -- it takes $4 in private investment to recoup every $1 in credits -- that could attract $12 million in venture and angel investment this year.

And groups such as the Wisconsin Technology Council, the Wisconsin Innovation Network and the Wisconsin Angel Network are providing formats for investors from Wisconsin, the Midwest and well beyond to learn what innovations the state's entrepreneurs can offer. More than 150 Wisconsin companies have posted executive summaries, which give potential investors a glimpse of start-up firms, online through the Wisconsin Angel Network. They represent a "farm team" of investable companies.

This is mainly a private sector issue, of course, and enlightened self-interest is a powerful tool. But more policymakers are coming to understand that without adequate angel and venture capital, Wisconsin's innovation economy won't grow fast enough to replace jobs lost to the recession and global competition.

"The reason people should care about venture capital is that there is a direct correlation between the amount of venture capital and a state's per capita personal income," said Lorrie Keating Heinemann, secretary of the state Department of Financial Institutions. Heinemann has been a champion for angel and venture investing in Wisconsin, including the "fund of funds" idea, which can better link the state into major investor syndicates.

As the election year unfolds, look for leading candidates for public office to weigh in with their ideas on how to make Wisconsin a more venture-friendly state. Wisconsin has a strong foundation of ideas, innovators and angel investors. The stage is set to attract and incent the venture industry. -- Still is president of the Wisconsin Technology Council. He is the former associate editor of the Wisconsin State Journal in Madison.


Thursday, January 14, 2010

GreenBiz: Pilot program helps grocers become "green"

Kent Burnstad is the third generation of his family to be in the grocery store business and knows you have to make adjustments to survive and thrive.

The Green Grocer pilot program of the Wisconsin Grocers Association has helped Burnstad's European Market in Tomah save energy, do the right thing for the environment and help the business's bottom line.

"We are pleased to be one of the first grocery stores in Wisconsin to be Green Grocer certified," said Burnstad, chair of Burnstad's Markets, which also has stores in Black River Falls and Richland Center. "It's all about serving your customers and earning their loyalty in this business. By reducing our energy consumption, we can pass the savings onto those customers. We're also doing the right thing for the environment."

Burnstad's underwent a major remodeling and expansion to include a restaurant, gift stores and other facilities. It made changes to refrigeration compressors, lighting, recycling of plastic bags and other materials, and other areas and practices. It had some upfront costs, but the payback will be worth it .

"Normally you remodel a store every seven years," said store director Alex Zamarripa. "It's been about 10 years since the last remodel. We think a lot of these returns will be in a couple years or three years."

Burnstad's will save enough energy to power 21 homes and the equivalent of taking 31 cars off the road. CO2 greenhouse gas emissions will be reduced by 408,795 pounds.

The store is one of seven in the state currently in the WGA Green Grocer program. Other participating stores are in places like Delavan, Cambridge, McFarland, Janesville. The participating stores will collectively reduce CO2 emissions by more than 3.9 million pounds and save more than 2.3 million kilowatt hours of electricity.

Better Environmental Solutions, a Madison-based environmental consulting group, administers the program for WGA.

Wisconsin Power and Light, an Alliant Energy company, has helped fund the pilot program. Participating stores can receive assistance in paying for their upgrading through WPL's Shared Savings business energy-efficiency improvement financing program and its network of strategic account managers. The stores have to meet standards in a check list provided by WGA and developed by Better Environmental Solutions.

The first phase of the program includes an audit of a store, with points assigned for up to 70 different energy areas. The second phase for certification includes the actual updating and changes to the store.

"We are excited to be working with Burnstad's and several other member grocery stores in Wisconsin," said Brandon Scholz, WGA president and CEO. "This program started with some concerns about recycling plastic bags at stores. I contacted Brett (Hulsey, president of Better Environmental Solutions), and as we talked we realized it was a lot bigger than just plastic bags.

"Grocery stores are energy hogs. For some grocers, their utility bills could be the third or fourth highest line on their monthly expense. So, this program can be a win for the grocer, a win for the environment and a win for the customer."

Scholz said in an industry that has a profit margin of around 1 percent, any cost savings in energy can be very important.

When Burnstad's launched its Tomah program in December, Gov. Jim Doyle said the program showed that businesses can reduce their costs, emissions and improve service with energy efficiency.

"This shows one concrete way for Wisconsin to be a leader to create green jobs and a green economy," added Doyle, who recently awarded a Governor's Award for Excellence in Energy Efficiency to the Green Grocer Program.

Hulsey has served as coordinator of the WGA program through Better Environmental Solutions. "The grocers have been very open to the audit and to making the changes," he said. "We can get the most bang for the buck by reducing their energy bills and carbon emissions.

"A supermarket (45,000 square feet store) pays about $18,000 a month for energy. One grocery store can use as much energy as 50 to 100 homes."

According to the Environmental Protection Agency, grocery stores are the most intensive major energy consumer in the commercial sector and an excellent opportunity for energy-efficiency efforts. Every dollar a grocery store saves on energy is equivalent to $59 in added grocery sales.

The first store to participate in the Green Grocer Program was Stinebrink's Piggly Wiggly in Delavan.

"We took many steps like more efficient refrigerators, lights and motors to save energy and reduce carbon emissions," said Mark Stinebrink, co-owner of the store. "We save money that we can pass onto our customers and pass a better community to our children."

Mike Day, owner of the Cambridge Piggly Wiggly, said, "We upgraded our refrigeration, incorporating energy efficiency features to reduce our carbon emissions and will save $50,844 per year."

Scholz and Hulsey hope to find additional funds to take the program beyond the pilot stage, and perhaps expand it to other areas of the state.

"We've talked with Roundy's and other groups, as well as governmental agencies, about ways to keep this going and expand," Hulsey said.

"It's a great program," Scholz said. "It could become a model for the industry. There's interest in it from those in other parts of the state and other states. I think this shows an industry can make changes like this on its own without governmental mandates. We hope to build on it."

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


Tuesday, January 12, 2010

Swap cap-and-trade for a workable energy policy

By Dan Danner
Most policymakers agree that we need an energy policy that creates sustainable economic growth, benefits all Americans and protects the environment. If that's truly the case, they should go back to the drawing board to find alternatives to the burdensome, big-government energy policies currently popular in Washington.

Proposals known as "cap-and-trade," intended to combat global warming and revamp America's energy policy, are deeply unpopular with both the voting public and the entrepreneurs who create most of the nation's new jobs.

Recent polls that my organization released are clear: An overwhelming majority of small business owners oppose cap-and-trade legislation that has passed the House of Representatives. More than 70 percent of the business owners we surveyed think that the legislation will raise energy costs, and similarly large majorities don't buy supporters' claim that it will create new jobs or improve economic growth. And virtually none said that regulating greenhouse gas emissions should rank as a top national priority.

And American voters, who we surveyed separately, agree with them: Most oppose cap and trade, would be more likely to vote against politicians who supported it, and don't believe that control of greenhouse gas emissions is a top national priority. More than 60 percent don't believe job creation claims, and just about as many believe that energy costs would rise. Quite simply, small business owners--who create between 60 and 80 percent of all new jobs--don't want cap and trade and neither do voters.

Given these realities, we hope that the cap-and-trade bill that passed the House will never fly in the Senate or land on the president's desk in anything like its current form. Aside from a few European nations that have adopted such a system (and where it hasn't worked), the system isn't going to catch on elsewhere. It's too expensive, too burdensome and too risky. And do our elected officials have the stomach to impose massive new taxes on an economy that's only beginning to emerge from a major recession?

The public opposition to doing so is evident. Given that many small businesses likely will have to pay more for healthcare and higher taxes in the coming years, the new energy taxes would come at a particularly bad time. As such, no tears should be shed for the death of cap and trade.

All that said, small business owners agree that our nation still needs better policies to address both its energy needs and the possibility of climate change. They also agree that ideas intended to increase the use of renewable energy and the aggressive promotion of nuclear energy deserve further consideration. Other proposals to encourage conservation and increase domestic production of proven energy sources like oil, gas and coal should also have a place in a comprehensive national energy policy.

America needs better energy policies. But a cap-and-trade system would only make our current problems worse. It's time to start over.

-- Danner is president and CEO of the National Federation of Independent Business in Washington, D.C.


Monday, January 11, 2010

How a non-profit firm's investment is keeping a for-profit company in Wisconsin

By Tom Still
Logistics Health Inc. needed to cash out a major early investor. Gundersen Lutheran wanted to diversify its portfolio and open doors to new markets, preferably by investing close to home.

The resulting match will strengthen the La Crosse area economy and provide an innovative example for other investment-minded health-care systems in Wisconsin. At a time when many emerging companies are scouring for investors, homegrown sources of capital are welcome news.

Gundersen Lutheran announced Dec. 30 it has become a minority owner of Logistics Health, a La Crosse-based contractor of health services that has grown from a dozen employees to 750 workers in less than a decade. It reportedly marked the first time Gundersen Lutheran has invested in something other than a traditional portfolio of stocks, bonds and other securities.

Dr. Jeff Thompson, chief executive officer of Gundersen Lutheran, said the deal will help the health-care system by providing above-market returns and creating pathways to provide services nationwide. It will also help La Crosse, he said, by keeping Logistics Health in town.

"So rather than making investments in other parts of the country ... we're taking some of our funds to invest in a local company," Thompson told the La Crosse Tribune.

Former Gov. Tommy Thompson (no relation to Gundersen Lutheran's Thompson) is president of Logistics Health and a former federal Health and Human Services secretary. He said the deal kept Logistics Health off the "auction block" by cashing out long-time investors who might have moved the company if not for a local buyout of their shares.

"The great thing about this deal is it keeps the company growing and it keeps it in La Crosse, where it's a big part of the economic and civic fabric," Thompson said in a recent interview. "If you lose a corporate headquarters, you wind up losing the management talent, the top salaries, the charitable and volunteer contributions and much more. We didn't want that to happen."

About 85 percent of the business at Logistics Health Inc. is built around working with federal agencies. It deals with the Department of Defense to ensure that soldiers receive necessary physical examinations, vaccinations, health profiling and other services. It also works with other federal agencies on homeland security issues, such as preparing for bioterrorism attacks. Logistics Health provides inoculation services, clinical studies and focus groups to help national, state and local authorities prepare for attacks they all hope will never come.

Gundersen Lutheran is a physician-led, non-profit health system with patients in Wisconsin, Iowa and Minnesota. In addition to its national reputation for quality care, Gundersen Lutheran is known in health-care circles as an "integrated delivery system." That means it offers a full range of medical specialties, regional clinics, a teaching hospital, home care, behavioral health services, pharmacies, vision centers, air and ground ambulances and more.

In the brave and uncertain new world of health care reform, integrated delivery systems are the model because they tend to provide coordinated medical services in an efficient setting that often eliminates costly intermediaries.

Dr. Frank Byrne, president of St. Mary's Hospital in Madison and a health-care executive who has championed integrated delivery, said the Logistics Health deal is consistent with Gundersen Lutheran's "forward-looking" approach. At the same time, Byrne noted, the deal isn't unprecedented: Major health-care systems in Missouri, Ohio and Minnesota have made similar investments. So long as health-care systems don't stray too far from their core expertise and stay aware of potential conflicts of interest, Byrne said, it makes sense to invest in companies that stand to help their own bottom lines while also aiding the broader community.

In fact, Byrne said, a community's physical health can be influenced by its economic health -- which is why many major hospitals and health-care systems are engaged in civic and economic development efforts.

"Economic development is a community health status issue," said Byrne, who noted that health-care organizations are already "important economic engines in their communities."

Former Gov. Thompson said he hopes other health-care systems and major non-profit organizations in Wisconsin think about investing in the state if the right opportunity arises.

"This is a strategy that other companies and non-profits should look at, whether they're in health care or some other field," Thompson said. "With the right deal, it's a win-win for Wisconsin and the companies themselves."

Finding private equity is a tough chore for many emerging companies these days. The Gundersen-Logistics deal presents a model that could work for others.

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


Thursday, January 7, 2010

Opportunity knocks: 5 ways to reach financial goals in 2010

By Kevin Reardon
Some opportunities come along only once in a lifetime. If you hesitate, they're gone forever. Other opportunities, however, come along more frequently and we get plenty of chances to take advantage of them.

Take New Year's Resolutions, for example. They afford us an opportunity every year to set goals and to realize the potential that lies within each of us. You know the story. January rolls around and we make promises to ourselves to do things differently, to do things better, to be smarter.

But how often have you reached December only to realize, much to your chagrin, that last year's resolutions have become nothing more than a series of broken promises? That's where setting firm and realistic goals becomes so important, especially when it comes to financial planning.

If you're serious about achieving financial independence for your family and meeting all of your objectives, setting goals is a MUST. Over the last 15 years, we have assembled a list of the Top 5 most important goals that people need to address regarding their finances. If you can achieve these five goals, you are ahead of the curve in managing your wealth and reaching financial independence.

Here, then, is our Top 5 list, along with suggestions for achieving these goals:

5. Pay Yourself First: If you wait until the end of the month, after all of your monthly bills are paid, to save for your retirement or other goals, you are limiting your potential for success. By paying yourself first, you will keep your savings plan on track and your consumption habits will change to reflect available cash flow. Once people begin saving consistently, it becomes an addictively positive habit that creates additional financial opportunities. To increase your probability for success, utilize payroll deductions into 401k or 403b accounts, or simply authorize automatic deductions from your bank account towards your savings account. This savings plan must be set-up to occur automatically, on a consistent and frequent basis.

4. Get Organized: How often do you receive financial statements in the mail, and simply set them in the ever-growing pile on your desk? Financially successful individuals organize their information, throwing away the material that is easily retrievable electronically or that is not important. Get a simple filing system to save important statements, and other financial documents. In the event of your incapacity or death, your loved ones should be able to easily find and understand your records. With good organization, you will be able to review what is important and make better decisions.

3 Damage Control: Accidents happen, and the loss of your income, coupled with high health expenses, is a major cause of bankruptcy. Having proper insurance coverage is critical to ensuring your financial independence. We have seen way too many families suffer financially because of inadequate insurance. Anticipate the unexpected, and take immediate steps to protect your family from a financially devastating accident or situation. Review all of your insurance policies, including: life, health, automobile, disability, and home owners' policies. Going through financially challenging times is difficult. However, knowing that you put your family into that situation when you could have avoided it is devastating.

2. Investment Check-up: Take an inventory of your investments to find out how your money is allocated. Be certain that the mixture between stocks, bonds, real estate, international, and cash investments suits your situation. Frequently, people take on too much risk, or too little risk, and reduce their probability for growing their assets at an optimal rate. If a security has grown to become a large component of your portfolio, consider reducing or hedging the position. If a significant amount of your assets are sitting in money market or CD instruments, consider equity investments that historically outpace inflation. Be certain you know what you own and why. Review it when those statements come in every month.

1. Cut the Fat: We live in the wealthiest country in the world and the media is constantly telling us to consume, consume, consume. The sizes of our houses have increased as the sizes of our families have decreased. Certain necessities of today such as cell phones, cable television, computers, Game Boys, heated car seats, GPS, iPods, etc. weren't even luxuries 20 years ago because they didn't exist or weren't prevalent.

When thinking about retirement, many people are quick to realize that it isn't how much money one makes or the size of their assets that is most important. What really matters is the amount they spend relative to their income or assets. Identify what is truly important to you, and leave everything else behind.

Now that you have the Top 5 list, let's get serious about accomplishing your goals! Sit down and write out your goals. Share those goals with your family, friends, and advisors. By writing down our goals, and sharing them with others, we are creating a support network that will help us accomplish those goals.

Plan on reviewing these goals every month at home, and meet with your advisor every quarter to receive feedback. Circle July 4, Independence Day, on your calendar. This marks the halfway point of the year. If you aren't on track to accomplish your goals, re-double your efforts to get back on course.

Remember, the more difficult the journey, the more rewarding is the finish line. We want you to sit back in December 2010 with a feeling of accomplishment and pride, knowing that you have taken the steps towards financial independence. It sure beats looking back at a string of broken promises!

For help in setting and tracking your financial goals, talk to your Financial Advisor.

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


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