Cover Story

The Survivors

Adjustment to economic reality has come in three stages for Jeff Sweet, president and CEO of Identifix in St. Paul.

?When the economy first turned down, we said, We?re optimists. We should be focused on taking advantage of the opportunities,? says Sweet, who sold the automotive information service to a publicly held parent corporation in 1999.

Then came the second phase. ?It doesn?t look like the turnaround?s coming. We had to cut expenses and cut staff,? Sweet continues.

When his company was to the bone, like most others he?s studied, it was time for phase three: Focus on improving employee performance. ?We?re saying everybody has to be productive,? Sweet says.

He?s also chairman of the board of CEO Roundtable, a local peer-led group of growth-oriented CEOs who meet to discuss and overcome business problems. Upsize was invited to interview the board earlier this year, and gleaned their advice for surviving the many months of bad economic news.
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Letter From the Editor

Spatula II

The first Upsize B.Y.O.S. party was a success. That stands for bring your own spatula.

Readers may recall the editor?s note in our first issue, October 2002, in which I cited an escape from silly meetings as one benefit to starting a small business. My whipping boy was the spatula meeting at my old job, where department heads talked about who would bring utensils to the company picnic, and other heady topics.
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Back Page

A year’s worth of owners, on what it’s really like to be in business

The results are in after a year of publishing Back Page interviews: Ideas are far more important than money, and talent is slightly more important than experience, at least to the nine entrepreneurs who appeared in this space since October 2002. Continue reading →


Rough Waters

It?s been rough for all kinds of businesses. Still, as one almost-cheerful business owner said, ?It could be worse we could be in the travel industry.?

Christy Sazama, spokesperson for MLT Vacations in Edina, ticks off the blows to that hard-hit sector, beginning with soaring fuel prices even before the attacks on the World Trade Center.

?This year,? Sazama notes, ?we?ve had the war in Iraq, SARS and the Northeast blackout. We?re still not back to where we were before 9/11, although it?s more the economy than fear now.?

For leisure travel companies, there?s yet another wrinkle. ?We?re seeing a major change in the way travel is distributed. The airlines no longer pay commissions to travel agents, and consumers are using the Net to shop around much more.?

Two Twin Cities custom tour firms, Crossing Borders Inc. in Bloomington and Preferred Adventures Ltd. in St. Paul, have faced it all. They offer solid insights about what business owners can do when faced with upheavals they can?t control and can?t always predict.
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Foot in the door

Spend time with Tom Heerman and you get the impression of someone who is an analytical genius who can break down any problem and solve it in no time.

Spend time with Chuck Lodge and you can?t help but be energized by his intelligence, his knowledge of the business world, and his passion for success ? and that?s without even knowing the product he is selling.

Together, they are part of Long Lake-based Baltix Furniture, a company that designs and develops environmentally sustainable workstations made from materials such as wheat byproduct, sunflower hulls, soy, recycled plastic milk containers and recycled newsprint.

Heerman, 44, is the president of the company. Lodge is the national vice president of sales. Baltix employs five people at its Long Lake office, but through its virtual sales representatives throughout the United States ? outsourced engineers, manufacturers and distributors ? has a team of about 200 people. The company produced revenue of $2 million in 2002 and expects that to jump to $4 million in 2003.

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Begin again

Sometimes you have to start over.

Four years ago, the founders of HDD Inc., the Henderson-based designer and developer of health-care training and educational materials, realized they couldn?t grow as a custom shop if they limited the company to paper. The company, which serves hospitals, long-term care facilities and medical device companies, was in search of a new direction.

Co-founder and CEO Judy Hoff wanted something that was interactive, convenient and fun for health-care workers needing training or continuing education, but also cost-effective for health-care providers. Printed materials, she says, are expensive and become obsolete, and classroom time is costly and time-consuming.

It didn?t take her long to figure out that e-learning was the way to go.

?We knew the Internet was the wave of the future,? says Hoff, a registered nurse and educator, who was a sales training manager for Pfizer Inc. before launching HDD, also known as Healthcare Documentation & Development. Her business partners are her husband, Ron Hoff, a computer scientist, and Peter Anthony, also previously with Pfizer. ?We took a step back and decided to leverage our core competencies: medical education and IT.? Continue reading →

Business Builders


It isn?t often that a business looks for a new accounting firm. Probably the biggest reason for a change is a disappointment with the firm?s service, high turnover of staff accountants, or the feeling that you are being bumped down the food chain from your original accountant. Another perception is that they just don?t get it. Continue reading →

Beware good times:

Since the economy started to falter, most business owners have struggled to manage their businesses differently. Many didn?t react quickly enough, and have ended up out of business or taken over. Those who have managed to stay afloat have had to walk the fine line of trimming the fat from their operations without cutting into the muscle.
As a result, many managers find that they are now overseeing a fundamentally stronger organization. Cyclical downturns can be good for the business survivors, since competitors are weeded out and only the strong survive.
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If your jaw dropped at the sight of costlier medical insurance this year without a corresponding increase in revenue, it?s time to take a different view of employee benefits.
Despite limited resources, many smaller organizations are not only successfully managing benefits costs, but also finding new ways to save money while offering employees more options. All it took in the following examples was time to evaluate options with an eye to the future and a touch of creativity. Continue reading →


When your real business is graphics services and communications, and your business prospects assume you're either in IT or chrome plating, you know it's time for a name change and brand upgrade. Continue reading →

Data Centers

Most business owners have heard people talk about having their server in a data center. You may have heard the terms co-location facility or Web hosting center but you don?t exactly know what they mean.
Simply put, a data center is a facility designed to house computer servers with high-speed access to the Internet. Computer Internet servers have special requirements such as climate control, consistent electricity, security and high-speed network connections. But why should you care about this? Continue reading →


The federal government and the Federal Reserve have made some big gambles in the past year by betting that low interest rates and tax incentives will push the economy - and the small-business mindset - back into a pro-growth mode. Continue reading →

Info Technology

While encouraging signs are starting to glimmer on the economic horizon, it?s still important to reduce and manage financial risks during these relatively uncertain times.
Many companies are doing this by breaking new initiatives into smaller projects and funding them one at a time, versus committing to a major project up front. This prudent approach increases managerial flexibility and limits upfront financial commitments.
Technology investments are rightfully coming under this type of scrutiny. Savvy managers are devising new ways to keep technology investments from putting a cash-crunched company at financial risk. The following examples of strategic thinking and careful use of staffing resources, creative approaches to managing costs, and strong management and communications, all offer lessons on how to keep IT projects on track without breaking the bank. Continue reading →


No business owner likes to pay for business insurance, but even more so, no business owner wants to be caught without it.
This year, whether you are building a new business or growing an existing one, you probably have had quite a shock when renewing your business insurance coverage. Continue reading →


Internet law is evolving and what is true today may not be true tomorrow. As a small-business owner, you can have a full-time job trying to keep on top of it.
And what may seem like a small detail or be an innocent mistake can easily turn into a big-time expense. We?ve summarized some of the newest and most wide-reaching changes here. Continue reading →

Mergers & Acquisitions

Every business owner who is thinking about selling wants 100 percent cash for the business. Why should you take the risk with a new owner who may not be successful taking over and running your business? If the buyer defaults on payments, you get the business back, probably in much worse shape than when you sold it!
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Managing Cash

Customers can be the Dr. Jekyll and Mr. Hyde for any small business. You rely on them to create the revenue you need for your business to succeed, but they don?t always pay.
Providing a product or service should translate into cash for the business, which pays for all the expenses. In a perfect world, both Dr. Jekyll and Mr. Hyde would remit cash immediately upon delivery of the product or service rendered. However, that?s not reality.
Customers often look for flexibility when it comes to payment. As a result, businesses accept a variety of payment methods in order to make it more convenient for both consumer and commercial customers. Your flexibility is often good for customers and good for business, but it can also translate into issues for your pocketbook.
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Every company has something unique to offer to someone. The challenge is to figure out what and to whom. In the marketing world, that?s called positioning.
What is positioning? Essentially, it?s taking a stand. Whether you?re developing a position for your overall company or a specific product, the process forces you to define exactly whom you want to talk to and exactly what you want to tell them. Done right, a strong position will strengthen both your brand image and your competitive advantage.
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Does your business resemble a fire drill most days? You know this hair-raising scene: People running around in a frenzy trying to find, expedite or deliver your company?s product or service.
It?s a common occurrence in rapidly growing companies because employees tend to wear multiple hats, procedures are often outgrown and there?s little time to re-organize.
Companies can stop the chaos by developing controls that improve the flow of work, material and information so that everyone focuses on a common goal. When owners and top managers take a holistic view of the organization they can identify improvements to enhance operations and, ultimately, do more with less. The only investments needed are time and patience .
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You?re in good company if your sales are flat and your customers are taking twice as long to make decisions. Organizations throughout the country and across all industries are experiencing little or no growth in sales revenue and little to no profit.
More than merely a discouraging turn of events after a decade of unprecedented growth, small-business owners are facing a sales crisis for which they are ill equipped. Larger, well capitalized firms can wait out a poor economy, fierce competition, a war, and even discontinuity in business leadership. But smaller firms don?t have that option.
What can smaller, entrepreneurial companies do to help optimize the sales revenue that is essential for survival?
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As your enterprise has grown you?ve had to deal with an important issue: space. You?ve outgrown your incubation office. You?ve discovered specialized space needs. Or, you?ve found it necessary to upgrade an aging facility.
These things were necessary to accommodate your growth: to make room for new people, to increase your competitive advantage through better use of space, or to realign that old building with your new presence.
Just like your building, parking lot, HVAC and helipad, your computing systems are an integral part of your base infrastructure. As you grow, these systems must grow with you.
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Starting a business can be intimidating. Choosing a location, hiring staff and building a customer base are among many pieces of a puzzle that must be assembled in order to build a strong business.
In the midst of all that activity, important elements of legal planning can be overlooked, sometimes with consequences that aren?t easily remedied. The following are 10 common legal mistakes made by new business owners and advice on how to approach each situation. Continue reading →

How to reap maximum
dollars from new tax act

Earlier this spring, President Bush signed into law the third-largest tax cut in United States history. The 2003 Tax Act promised to save tax dollars for nearly every individual and business this year and over the next several years. But how exactly will this new tax cut put dollars back into your pocket?
Instead of taking you through a lengthy analysis of this new tax law, this article will use three sample taxpayers to walk through the new tax implications. Moreover, this article will show each taxpayer how to receive the maximum benefits from this tax cut.
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