Tag Archives: small business

Phoenix Mayoral Debate, Real Estate

Phoenix Mayoral Candidates Debate Commercial Real Estate Issues

Filling existing vacant commercial buildings, impact fees and economic development incentives were some of the issues discussed by the six City of Phoenix mayoral candidates Friday at Valley Partnership’s monthly breakfast meeting.

Anna Brennan, Wes Gullett, Claude Mattox, Peggy Neely, Greg Stanton and Jennifer Wright answered questions and made their pitch why they should be Phoenix’s next mayor before a packed audience at the Phoenix Country Club.

The first question: Arizona’s economy has taken its toll on commercial real estate is our state. What is your plan for attracting users to existing vacant commercial buildings and jumpstarting new commercial development in Phoenix?

Gullett said his focus was on helping small businesses, attracting new jobs, and making sure there is also job growth. He also said the challenge he sees is a lack of investment capital. His vision is for a partnership with banks to create an investment pool.

Neely stressed the importance of job creation, and the fact that the Valley needs to become more competitive as a region. Wright pointed out the 30 percent vacancy rate among commercial buildings in Phoenix. She added the city’s development department must be more business friendly.

The second question: Most cities in the Valley assess development impact fees on commercial development. Some subsidize certain categories of impact fees to attract certain kinds of development. Others have very limited categories of fees. What do you think the City of Phoenix’s approach should be to assessing impact fees for commercial development?

Stanton alluded to the ill-fated CityNorth project because it was a public-private partnership in which part of the impact fees helped build the development’s parking garage. He added that impact fees should generate “growth that pays for itself.”

The third question: Are you in favor of providing economic development incentives like infrastructure reimbursements to commercial projects?

Stanton, Brennan, Gullett and Maddox said yes. Gullet said it’s a “good gamble as jobs are created.. It has to be applied across the board.”

The fourth question involved a zoning case. A Fortune 500 company wants to relocate its corporate headquarters on Camelback Road and has a site tied up. They want 10 stories. If they can’t get 10 stories, the building goes to a Tempe Town Lake site. The General Plan dictates the Phoenix site can have a maximum of four stories. A highly organized neighborhood group says it was promised that high rises wouldn’t go this far east and that the city shouldn’t break that promise. How do you vote?

Wright, Brennan, Maddox and Neely voted in favor of rezoning the property. Gullett and Staton voted against.

And finally, when asked to describe their leadership style in one word, their responses:

Gullett – patience; Maddox – committed; Neely – decisive; Stanton – smart; Wright – determined; and Brennan – a facilitator.

The City of Phoenix mayoral election is Aug. 30.

 

 

 

 

Advance And Retain Women’s Role In The Financial Field - AZ Business Magazine Nov/Dec 2010

Two Valley Groups Are Working To Advance And Retain Women’s Role In The Financial Field

It wasn’t so long ago that a typical business meeting at a banking or financial institution was dominated by the good ol’ boys network. Well, not anymore. Today, you are likely to see more women among the dark suits at the table.

“I have watched women evolve,” says Deborah Bateman, executive vice president of specialty banking and marketing at National Bank of Arizona, and a founder of the Women’s Financial Group. Bateman boasts a professional background spanning more than 40 years in the banking industry.

“Early in my career, I think we tried to mirror men,” she says. “Over time, women have recognized the skill sets they can bring to business, such as collaboration, connecting, coaching (and) creating value inside Corporate America.”

Women’s roles in the banking and finance sectors are widening, and the proof is in the numbers. In 2009, according to the U.S. Department of Labor, 54 percent of American women were employed in fields related to financial activities. This includes finance and insurance, banking and related activities, securities, commodities, funds, trusts and other financial investments. In Arizona, the percentage of women working in the finance and insurance industry also is significant. U.S. Census data shows there are actually more women than men working in these industries.

Although women have come a long way from their beginnings in these formerly male-dominated sectors, it is an ongoing struggle. According to the U.S. Census Bureau, the disparity in salaries for men and women is significant.

In the Phoenix Metro area, during the third quarter of 2009, women made up 14.4 percent of the 35-44 age work force in finance and insurance (private sector) versus 10.4 percent for men. However, women in these fields average a monthly salary of $4,350, compared to men’s $6,643. For women aged 45 to 54, the salary gap grows even wider. In this age group, men on average earn 64 percent more.

“Women need to be more assertive about asking for money and tooting their own horn,” says Donna Davis, CEO of the Arizona Small Business Association (ASBA) and a member of the Women’s Financial Group. “It’s OK to promote your organization, it’s OK to ask for money and to ask for more.”

However, Emily Amparan, vice president of development at Factors Southwest, says she thinks the numbers don’t reflect the real gains women are making.

“I always hold those figures suspect, as I rarely encounter hindrances to make money and achieve success in the financial field,” she says. “I think if you believe it to be so, it probably is … however, the most successful women in the finance industry don’t pay any mind to talk of obstacles, as they forge ahead to make their own path.”

Helping women make their own paths in the financial sector is the mission of a number of organizations emerging all over the Valley. For example, Bateman founded an internal mentorship program at National Bank of Arizona in 2009, that quickly expanded to outside industries and individuals. Later renamed the Women’s Financial Group, the organization’s focus is to bring together women of all professional backgrounds to promote financial planning, mentoring, business services and networking.

Bateman says she hopes the Women’s Financial Group can serve as a catalyst for women to succeed and attain higher positions in banking and finance without compromising their identities.

“For years and years, we would dress in tailored blue suits and wear ties,” Bateman recalls. “Women can be women in the business world. It brings enormous value to business, to their organizations and to the community.”

In addition, Davis says the group can help “women become more savvy financial business people.”

At a recent Women’s Financial Group event, women of diverse backgrounds, both personal and professional, filled the room. Some women were just beginning their careers and some were veterans with decades of experience. But all were there with a mission: to pave the way for future success in their respective financial careers.

Another group aimed at women in the financial sector is Women in Banking, the local chapter of the national Risk Management Association. Founded in 2006, its first meeting took place at a Chevy’s restaurant with 14 business women in attendance. Today, the group includes 50 to 80 bankers, consultants, marketers and business owners from around the Valley. And despite its name, the committee encourages men to join and attend its events.

“There is definitely a need for a professional organization that brings business and banking together for positive networking,” says Amparan, who is a member of the organization’s leadership team.

Along with helping women plot their careers in financing, Women in Banking is a strong supporter of Fresh Start Women’s Foundation, a nonprofit organization dedicated to helping women in areas such as career change, personal growth, family relationships and more. The group collects clothes for donation and works to raise money to sponsor Fresh Start’s annual golf tournament and fashion show.

That type of commitment to all women in the community is just one example of the impact women professionals in finance are making.

“Women in business are tremendous bridge builders and relationship makers,” Amparan says. “Banking and finance has become more of a warm, open environment to the credit of professional women across the state and country. People are starting to take notice of the successful way women are starting to do business and build relationships.”

Arizona Business Magazine Nov/Dec 2010

The idea of starting your own business can be frightening with the recession - AZ Business Magazine Nov/Dec 2010

6 Tips To Launching Your Own Business In A Down Economy

The idea of starting your own business can be frightening, particularly with the recession stubbornly choking the Arizona economy. However, by following a few tips for getting started, launching your own company doesn’t need to be scary.

In fact, there are a few advantages to launching a business during an economic downturn. Commercial space is available at extraordinarily good prices. Talented professionals are looking for work. Goods and services can be found at discounted prices. And, depending on your industry, competition may be scarce.

1. Practice Due Diligence
It’s critical to objectively evaluate your proposed venture. Asking yourself some hard questions may discourage you from pursuing your first venture, but that is not a negative or pessimistic approach. It’s a useful tool for evaluating your business. Start with these questions: Is there a genuine need for the product or service you are offering? Is that need already being met by established companies? If so, what improvement or unique feature are you bringing to the table? Do you have the necessary skills and resources to start your business? If not, are you prepared to bring in the people with the skills and capital that are needed, and possibly give up some ownership?

2. Prepare a Business Plan
Too often, entrepreneurs articulate a great idea and foresee success, but gloss over the hard work. That hard part is thinking through the idea for your business and writing it into a plan, including the steps you’ll need to take to implement your idea. Start with an outline and consult a book or online guide about writing business plans. It’s important that your end result is a completed plan that includes a budget for your business.

3. Determine Capital Requirements
Most small businesses are funded with the business owner’s own money and funds from family and friends. A venture capitalist or angel investor may provide the necessary capital in exchange for part ownership of your business. It’s critical to focus on the amount of money you will need to start and operate your business, including at each stage of the company’s development.

4. Create a Board of Advisers
Creating a network of advisers can be a tremendous asset to a start-up business. It’s helpful if that board consists of advisers with a diverse array of professional backgrounds. That diversity will ensure you receive insights from a wide range of perspectives. Good choices for advisers may include your attorney, accountant, suppliers, customers, bankers and realtors.

5. Tap Into Available Resources
There are myriad advisers, consultants and nonprofit agencies that will assist you in developing your business — marketing it, creating websites and raising capital — who work for free or a nominal fee. The Small Business Administration (SBA), for instance, is a valuable and cost-effective resource. Moreover, SCORE: Counselors to America’s Small Business, provides free advice and mentoring for small business owners. If you pay for a similar service, be sure to get recommendations from a trusted adviser. Then, check that company’s references.

6. Listen
The more you listen — the more you truly hear an adviser’s ideas — the more advice you will be able to translate into actionable plans for your company.

Still, while these recessionary times may present a good opportunity for entrepreneurs, there are several considerations to keep in mind.

Select an industry that is doing well, despite the recession. The health care industry, senior care and information technologies are financially better off than many other industries.

Choose a business sector with a bright future — Businesses that tap into growing consumer demand for green or sustainable products may be an avenue worth pursuing. There was a 41 percent increase in consumer purchases of green products and services from 2004 to 2009, according to the research firm Mintel. Moreover, there may be federal or state subsidies or tax credits available for green companies.

Select a company with low capital requirements. Home-based businesses with low start-up costs may be good choices, notably because the ongoing credit crunch will likely make it tough to get a loan to cover these expenses.

If you are considering starting your own business, you will be in good company. More than half the companies listed on the Fortune 500 in 2009 were launched during a recession, according to the Ewing Marion Kauffman Foundation.

Moreover, in 2009, an average of 558,000 new businesses were launched each month in the United States.

The trick to joining these ranks is to get started. There’s no better time than now, recession or not.

“The critical ingredient is getting off your butt and doing something,” Nolan Bushnell, founder of both Atari and Chuck E. Cheese, once said. “It’s as simple as that. A lot of people have ideas, but there are few who decide to do something about them now. Not tomorrow. Not next week. But today. The true entrepreneur is a doer, not a dreamer.”

Arizona Business Magazine Nov/Dec 2010

Jerry Colangelo discusses Arizona's economic future and more. - AZ Business Magazine Nov/Dec 2010

CEO Series: Jerry Colangelo

Local businessman Jerry Colangelo talks basketball, Arizona Commerce Authority, the recession and more.

Jerry Colangelo
Title: Principal Partner
Company: JDM Partners

Did you always aspire to be in business or was it circumstances that put you on this path?
I transferred universities for basketball reasons, originally. I went to (University of) Kansas for a semester to play with Wilt Chamberlain. When he transferred — when he quit school — I transferred to (University of) Illinois. I had taken business courses in Kansas and when I transferred I brought those credits with me. But then I went into education. I thought I would teach and coach. But I had some business background and I was always a little bit of an entrepreneur, in terms of trying to make a dollar as a young kid, little businesses, etc. So it all kind of came together and I ended up being in the sports business, which means that I was being prepared all along.

How would describe the Valley’s business environment for entrepreneurs?
I think it is a good place, but it has evolved. I came to the Valley 40-plus years ago, when things were kind of wide open and there were many more opportunities, at least from my perspective. You had the ability to get things done because it was still a small town, to some degree. I’ve seen it quintuple in size, if you will, and we’ve had our ups and our downs in the Valley, but we’re trying to re-identify who we are and what our future holds. But there will always be room for entrepreneurs. There’s no question about that. I still believe in the Valley and the business climate, and it’s going to get better as our economy gets better, so there’s room.

How will the new Arizona Commerce Authority help the state’s economy?
I think the Commerce Authority is coming at exactly the right time. We have the opportunity to re-do how we do business in this state. It’s very important to retain the businesses that we have and it’s very competitive out there. The states are competing for big business and small business. We need to create a climate that is truly conducive for small and big business to come to Arizona. I think that with the people, the manpower that we will have on this authority, we have a chance to make that happen.

I’ve been a little outspoken about the fact that we need the Legislature to help with the funding — there’s no question about that — but at that point they need the business community to conduct the business of commerce. That’s what they know best. And if we can kind of separate that, we have a great opportunity to go out and be competitive. We’re going to need some things from the Legislature. Incentives — that seems to be a dirty word to some people, but it’s reality. That’s what’s happening in other states. That’s why they’ve had so much success. We have the models to look at.

For me, coming from the world of sports and every day you’re competing, it’s another game, it’s going for another win. This is a classic example of taking something that needed to be restructured, a little like my USA Basketball experience of late, when I took over the program and it was back on its heels. Today, we’re the defending gold medalists in every category, men’s and women’s, every age bracket. We have a chance with the Commerce Authority to basically do the same thing. We need to win a gold medal. We need to go out and compete with all the other states, because we have a lot to offer in this state. We just need some incentives. We need to look people eyeball-to-eyeball and sell them on why it’s important to come here, why they will enjoy not just the quality of life. We need to improve our education, we need to make it a better community in which it is conducive to do business here. If you get people jumping on the bandwagon, we have a chance.

How did the recession affect the sports industry in general and in the Valley in particular?

The recession has hit everyone and every segment of the marketplace. It’s interesting; when things are really bad economically, people still want to be entertained. … Vicariously, people follow sports teams because they once played, they have some affiliation, they love the association when their teams are winning. When teams are losing, that’s when they jump off the bandwagon. … We took a hit here in the Valley big time. Because we have so much emphasis on the construction industry, we were hit harder than other parts of the country — in the Southwest. No. 2, we are saturated right now with sports teams — no question about that. Everyone was affected. If we had continued with our growth, because we were on an incredible growth curve, we would have grown into maturity with all of our sports teams. What we have gone through have been some real challenges. But the good news is that the sports franchises have adjusted. They’ve had to adjust their policies, their attitudes toward discounts, etc. And that’s one of the things I’ve noticed in sports in the last two years is that they’ve made adjustments to deal with what’s taken place with the recession.

You are still involved in sports, but you’ve also moved on to real estate development. Some would say that’s a risky move. How do you respond to that?
People say when you make money in real estate is when you buy appropriately. There are a lot of deals out there to buy in — they say cash is king. Well, there are a lot of financial institutions sitting on a lot of cash, but they’re not really willing to let the consumer have that cash. So everyone is very hesitant right now. There is great opportunity in real estate. You have to be more specific about residential, commercial. My partners and I are involved in some iconic properties: the (Arizona Biltmore Golf & Country Club), the (Wigwam Golf Resort & Spa). In taking that step with distressed properties, we were able to take these properties out of bankruptcy. We believe we made a good buy at the time. We are making an investment in those properties, because we believe in the future. We believe things will get better over a period of time and that the real estate marketplace will continue to get better over a period of time. We’re sitting on 37,000 acres of property on the west side of Phoenix that have the ability and the approval to build a city of over 300,000 people. But this isn’t the time to start that project — that’s in Buckeye, Ariz. Do I think someday that will happen? Maybe in some way, shape or form; maybe not the way it was visualized five years ago, but are people going to continue to come here? I believe so. But back to the Commerce Authority; we have to bring jobs to Arizona. So by being creative and being aggressive going out to bring companies here — with high-paying jobs, not just service jobs — then we will continue with the growth pattern, because we have so many wonderful things to offer in terms of quality of life out here in the Southwest.

What advice do you have for entrepreneurs who are ready to take their companies to the next level?
Don’t be afraid to fail. … You have to take calculated risks. You have to be willing to step out on that board knowing you might get pushed, fall off. The worst thing that could happen is you do — you get up and you start over again. One of the things that has probably marked my career is that I started with nothing and I was never afraid to go back to nothing, but I was going to enjoy the ride. And so as it relates to my mix of experiences. Being competitive as an athlete prepared me for the business world, which was another competition. No one has batted 1,000 percent. Hall of Famers hit .300 — that’s only three out of 10. So why is it any different in business? You’re going to make mistakes, you’re going to learn from your mistakes. You can’t be afraid to fail, you have to be willing to take that kind of calculated risk. I’ve seen so many people, again in my lifetime, who have complained and whined about never getting an opportunity. And I would say to them, “Opportunity walked by you three or four times, but you never recognized it, because you’re so busy whining.” Get out there, don’t be afraid to compete and believe in yourself.

    Vital Stats




  • Became general manager of the new NBA franchise Phoenix Suns in 1968
  • Coached the Suns in the 1969-1970 and 1972-1973 seasons
  • Purchased the Suns for $44.5 million in 1987
  • Founder and owner of the Arena Football League’s Arizona Rattlers from 1992-2005
  • Played a key part in moving the NHL’s Winnipeg Jets to Arizona in 1996
  • Launched the WNBA’s Phoenix Mercury in 1997
  • Launched the MLB Arizona Diamondbacks in 1998
  • Served as chairman and CEO of the 2001 World Champion Diamondbacks
  • Chairman of the NBA’s Board of Governors from 2001-2005
  • Sold the Suns, Mercury and Rattlers to an investment group headed by Robert Sarver in 2004
  • Sold his controlling interest in the Diamondbacks to a group of investors in 2004
  • Elected to the Basketball Hall of Fame in 2004
  • March 26, 2004 proclaimed Jerry Colangelo Day in Phoenix
  • Named director of USA Basketball in 2005
  • Received the Spirit of Caring award in 2005 from the Valley of the Sun United Way
  • Inducted into the Suns’ Ring of Honor in 2007

Arizona Business Magazine Nov/Dec 2010

Photo from Wikimedia Commons.

Newly Formed Arizona Commerce Authority Convenes Its Inaugural Board Meeting

Vowing that “today the rubber hits the road,” Gov. Jan Brewer and Jerry Colangelo assembled and introduced 35 state leaders representing diverse backgrounds for the inaugural board meeting of the Arizona Commerce Authority.

The private-sector board will work to align diverse assets and opportunities within the state to compete economically in both domestic and international markets to create high-quality jobs for the Arizona residents.

“For the first time in our state’s history, we convene the Governor, the Speaker of the House and the Senate President, and more than 35 of our nation’s most acknowledged leaders within both the private sector and academia – all with one express purpose: to advance the global competitiveness of our state the economic prosperity we seek for each person, each family and, perhaps more importantly, each child – it’s about a vision for a strong, vibrant economic future for this great state,” Gov. Brewer said.

“When I became Governor, I promised to get Arizona back on track by creating quality jobs, attracting high-growth industries, and advancing our competitive position in the global economy. We are doing just that. With this board, I have now delivered a model to advance Arizona.”

Presentations to the board outlined the impacts of the global economic crisis on the state, the forecasts if Arizona does not address diversification and growth in base industries, the state’s overall global competitiveness, and a focused approach to four core areas on which the ACA will focus and develop a planned approach to advance the state.

The authority will focus on improving the state’s infrastructure and climate to retain, attract and grow high-tech and innovative companies. That focus will be on aerospace and defense, science and technology, solar and renewable energy, small business and entrepreneurship.

“During one of the most challenging economic conditions in our nation’s history, Arizona is competing for something that is even greater than Olympic Gold; we are fighting for the health and future of our families and this state,” said Colangelo, co-chair of the board. “Today, with the expertise and leadership of each board member, we begin to compete aggressively for what really matters.”

Don Cardon, current director of the Department of Commerce, will serve on a selection committee to recruit a president and CEO of the ACA. Other committee members are Gov. Brewer’s chief of staff Eileen Klein; Mo Stein, senior vice president of HKS; Jerry Fuentes, president, AT&T Arizona/New Mexico; and Michael Kennedy, co-founder and partner, Gallagher & Kennedy.

Other notable board members include Kirk Adams, speaker, Arizona House of Representatives; Benito Almanza, state president, Bank of America; Michael Bidwill, president, Arizona Cardinals; Dr. Michael Crow, president, Arizona State University; Linda Hunt, president, St. Joseph’s Hospital and Medical Center; Anne Mariucci, chairman, Arizona Board of Regents; Doug Pruitt, chairman and CEO, Sundt Construction; and Roy Vallee, chairman of the board and CEO, Avnet.

Arizona Business Magazine's Editor-in-Chief Janet Perez

The Buzz on AZNow.Biz – September 20, 2010

It’s another exciting week at AZNow.Biz. Arizona’s credit unions are asking Congress to allow them to make more loans to more small businesses. This week also marks the debut of our workforce columnist, Marcia Rhodes, from the recruitment firm WorldatWork. Rhodes asks the question, are you a good boss?  Find all this and more at AZNow.Biz.

hr_director_sm_biz

2009 Small Business HR Director Of The Year Finalists


Jerrie MartinezName: Jerrie Martinez-Palombo, M. Ed., SPHR
Title: Human Resource Manager
Company: Jaburg & Wilk P.C.

Years with company: 2
Years in current position: 2
Company established: 1984
Employees in AZ: 70
Employees in HR department: 2
www.jaburgwilk.com

Jaburg & Wilk P.C., has a significant investment in its employees. That’s why the law firm places a strong emphasis on mentoring and other techniques to help employees integrate into the company and remain on the job.

Human Resource Manager Jerrie Martinez is involved in the firm’s mentoring and law clerk programs, which are designed to help attorneys develop specific skills and enhance their work experience. Each new attorney hired at Jaburg & Wilk is placed in mentoring. Each mentoring pair works toward at least three goals, one of which is a balance between work and personal life. Mentors also help younger attorneys attain partnerships.

For support staff, Martinez established what the firm calls a “guide team” that was patterned after the formal attorney mentoring program. The team helps integrate new staff into the organization, provides a variety of resources and offers informal mentoring. In addition, Martinez was instrumental in establishing a customized, on-demand training program to help support staff with their professional development.

Jaburg & Wilk also believes in offering unusual activities so employees can have fun. Martinez spearheads Speed Chatting, which is much like speed dating. Employees spend five minutes getting to know each other before they move on to the next person. Last January, employees rode the light rail system to Downtown Tempe, where they participated in a scavenger hunt. Employees also pay $5 for the privilege of wearing jeans to work, and the employee of the month selects his or her favorite charity to receive the money. The firm matches the contribution.



Hopi SlaughterName: Hopi Slaughter
Title: Human Resources and Legal Assistant
Company: Rose Law Group pc

Years with company: 3
Years in current position: 3
Company established: 2005
Employees in AZ: 25
Employees in HR department: 1
www.roselawgroup.com

As Rose Law Group pc goes about its business of providing legal services, there is a concerted effort unfolding behind the scenes to make the Scottsdale firm a great place to work.

The company focuses on identifying internal problems before they mushroom into issues that might prompt employees to seek jobs elsewhere. Hopi Slaughter, human resources and legal assistant, is charged with making that happen. She is known for her open-door policy; any employee can talk to her about any topic. Also, partners who notice employee conflicts alert Slaughter and she intervenes.

Rose Law Group is committed to being a true family and Slaughter helps with numerous efforts that are undertaken to make that a reality. Celebrations out of the office are common when an attorney wins a large case or someone fulfills a major company goal. Awards are given for hours billed and bonuses are handed out for positive reviews.

Weekly newsletters and updates recognize employee accomplishments and hard work. Those successes also are discussed at weekly team meetings. Monthly get-togethers are held for team-building exercises and simply to have some down time. At monthly brown-bag lunches, an employee gives a presentation on a topic so that, over time, employees have a better understanding of what the law firm does as a business and the areas in which it specializes.

Employees also receive tuition reimbursement for approved classes, along with a flexible work schedule so they can attend the classes. They are encouraged to attend lectures and seminars on any topic, as well.

hr_director_sm_biz

2009 Small Business HR Director Of The Year Honoree

Camille McCalebName: Camille McCaleb
Title: Vice President of Human Resources and Operations
Company: Creative Business Resources

Years with company: 4
Years in current position: 4
Company established: 1997
Employees in AZ: 25
Employees in HR department: 3
www.cbri.com


Progressive companies know there’s more to filling job openings than simply interviewing people and hiring warm bodies. At Creative Business Resources, Camille McCaleb has taken the lead in ensuring that new hires are a good fit for both the job and this Phoenix-based human resources outsourcing company.

As vice president of human resources and operations, McCaleb brought personality profiling into the hiring process and became certified in personality testing so she can analyze the results. The profiles show the natural tendencies of recruits and how they likely will interact with other employees and clients on a personal and professional level. This insight gives the human resources department an indication of whether a prospective hire will be successful at the company. Taking the process one step further, all Creative Business Resources employees review one another’s profile results to help them relate to each other in times of success and failure.

McCaleb implements additional measures to help new employees succeed. Before they are allowed to interact with clients, new hires go through three months of training that gives them the knowledge they need to start client relationships. In addition, the entire staff participates in extensive customer-service training during which service expectations are communicated. Each department sets goals aimed at helping to achieve overall company objectives. Departmental goals are posted around the office.

Under McCaleb’s steady hand, Creative Business Resources has taken steps to make employees’ lives easier. Two years ago, McCaleb and other executives made the decision to open a second office in west Phoenix. This eased employees’ commutes and increased productivity. New technology helps employees work at home, also increasing productivity.

McCaleb is credited with doing an outstanding job in the areas of employee relations and recognition. Time is set aside at each department and company meeting to recognize employees for personal triumphs, professional successes, company anniversaries and birthdays. McCaleb leads this outreach to employees to make them feel special and to motivate them to do an even better job. The human resources and risk management departments also publish monthly newsletters that keep staff and clients informed about happenings at the company and in its industry.

Employee achievements also are recognized with gift cards and spa days. Bonuses are handed out based on company profit for the year and successful job performance. The company also helps employees with a Christmas savings club. Employees who put $1,000 into the club receive $250 from the company in time for holiday shopping and travel. Thanksgiving and Christmas bonuses are given to all employees, as well.

Diversity is a key pillar of the business model at Creative Business Resources and McCaleb works diligently to blend this concept into the corporate culture and the manner in which the company conducts business with clients. To lead the way, the human resources and risk management departments are bilingual.

McCaleb also encourages employees to be active in the community. Employees volunteer for Project C.U.R.E, the Phoenix Rescue Mission and Special Olympics on a regular basis. In addition, Creative Business Resources gives employees a paid day off to volunteer.

Small Businesses getting help in down economy

Despite Weak Economy, Credit Unions Are Providing Financial Assistance To Small Businesses

When talking about credit unions and business loans, the key word is small. The percentage of business loans to credit union assets nationally is about 2 percent; business loans in Arizona average about $240,000, compared to $180,000 nationally. And because the loans are relatively small, the focus is on small businesses. Federal law caps credit union business loans at 12.25 percent of total assets.

“With business loans hovering at around 2 percent, it tells you that a lot of credit unions are not doing business loans. But they have plenty of room to assist businesses,” says Scott Earl, CEO of the Arizona Credit Union League and Affiliates.

One of the reasons that a majority of credit unions, especially smaller ones, don’t dabble in business lending is because of the level of expertise required.

“You need to be fairly sophisticated,” Earl says. “Traditionally, larger credit unions have the ability and staff support to make business loans.”

Of course, not all business loans require a lot of sophistication. Perhaps a teacher has a summer job doing yard work and needs a trailer to haul things around. In fact, many of the loans go to sole proprietors, and some involve small-business owners who were turned down by a bank.

“We hear stories like that all the time,” Earl says, “and not because of economic conditions.”
Traditionally, a credit union gets involved in business loans because some loans are too small for the average bank — not worthy of their time and effort. That’s probably a bigger issue during an economic boom, Earl says.

“We’re making business loans. You hear about banks pulling out of business lending. But we have not done that,” says Mark Olague, assistant vice president of business lending for Desert Schools Credit Union.

He tells of a business prospect who had a construction loan with a bank and was having difficulty getting timely advances. Not only did the credit union make the construction loan, refinancing was approved for commercial loans on several of the client’s other Phoenix area properties, as well.

“We were able to step up and do the construction loan for that small business, making our member happy,” Olague says. “The key regarding the credit union world is that not only are we here to service business loans, we’re looking for relationships. We are relationship-oriented.”

In addition to providing an attractive interest rate on a business loan, credit unions offer such services as a checking account, credit card options for sales and purchases, and a 401(k).
“We’re like a one-stop shop,”

Olague says. “We can make loans for an overdraft line of credit for as small as $2,000 or for the purchase of a business vehicle for $30,000 to $40,000. Generally our footprint is from $25,000 to $2 million.”
Desert Schools’ business members generally seek loans for purchasing a fixed asset to start a new business.

“We’re not entertaining startups,” Olague says. “Normally, we’re looking at businesses that have been in existence for at least two years.”

All, however, is not rosy among credit union business members. A few have had bankruptcy issues and cash flow difficulties.

“We’re here for them in good times and bad times,” Olague says. “We may modify their loan to make payments easier for the interim.”

At First Credit Union, which has been making business loans for four years, Joe Guyton, senior vice president of credit, says he’s not seeing startups like he did a year earlier.

“The economy is clearly having a big impact on the capital needs of beginning a business,” Guyton says.

“There are not many people out there with the confidence to start a business. Our business members are coming in to maintain their borrowing relationship. They are concerned about losing that relationship. The amount of inquiries regarding new projects has almost dried up — anything with construction dollars on it.”

Although some business members have filed for bankruptcy, because First Credit Union is relatively new to business lending, the impact on it is considerably less than it would be on a major bank, Guyton says. Fewer than 1 percent of the credit union’s 60,000 members are businesses.

“We’re in a good position to continue to help them,” he says.
Michael Hollar, vice president of business financial services for Arizona Central Credit Union, says most of his business members are struggling. Last year, when gas prices skyrocketed, business members making deliveries took a huge hit. They were looking for alternate sources of fuel and were not seeking loans to buy new vehicles. They repaired what they had.

“A few of the savvy ones, when interest rates started dropping on the real estate side, came in to refi a loan with lower rates,” Hollar says. “We accommodated most of them. We charged a fee, but they were OK with that, rather than staying with the same payments.”

The volume of loan requests dropped considerably during the last three-to-four months of 2008. There were a few startups, mainly from people who had been laid off and were trying to go into business for themselves.

“In this environment, there is very little interest in businesses buying a new piece of equipment or looking for a building,” Hollar says. “They’re hunkering down to ride out the storm, hoping that 2009 brings a brighter day.”

Bob McGee Southwestern Business Financing Corporation

Bob McGee – President And CEO, Southwestern Business Financing Corporation

Fourth generation banker Bob McGee, president and CEO of Southwestern Business Financing Corporation, sees a rough year ahead for small businesses in Arizona. When McGee says rough, he means rough compared to Arizona’s customary booming economy.

“We may only have 2 to 3 percent growth in the state, but as long as we have water and electricity to run air conditioners, people are going to keep moving here from Chicago and Minnesota,” he says. “Yes, businesses are going to have a tough time, but I still do not think it will be anywhere near as bad as the past couple of bad times we’ve been through.”

McGee, whose firm is a nonprofit Certified Development Company approved by the Small Business Administration to make low-risk 504 loans for fixed-asset projects, says the downturn has hit home. Southwestern loaned $90 million for projects in 2007, but SBA approvals are down 40 percent, while the actual loans he funded are off by 10 percent.

Surprisingly, McGee sees small businesses becoming more attractive in today’s economy.

“When times get tough, that’s when people start thinking about owning their own business,” McGee says.

Businesses with fewer than 20 employees comprise more than 90 percent of Arizona’s economic landscape, but they provide more than jobs.

“It’s the way people achieve a dream,” McGee says, “because many people are happy in their job, but their real dream is to own their own business and be their own boss.”

During his career with Southwestern, McGee has helped create more than 7,000 jobs through the funding of SBA 504 loans. Since its founding in 1981, the company has funded the purchase or construction of more than $1.4 billion of buildings for businesses. Most of his deals involve construction, which today is funded by a commercial bank.

“I don’t fund until the building is finished,” McGee says.

McGee cites three factors for current market conditions. One is a complete lack of secondary financing, as potential investors poured $4 trillionintomoney markets.

“That puts a crimp in my kind of lending, and more important, the banks I work with,” McGee says.

A second factor is that banks are reluctant to make any loans, and the third reason, he says, is that a large percentage of business owners considering the purchase of a building are “terrified” by what they see on the evening news and are waiting for the market to hit bottom.

“You can’t out-time the market,” McGee says. “The way I know when it bottoms is I look back a year later and say, ‘Oh, that’s where it was.’ ”

www.swbfc.com

ethics scale

Making Ethics An Essential Part Of Doing Business

The challenge of building an ethical climate in businesses is not new. However, in the last decade, the importance of such a climate, and the heavy costs of ethical transgressions, have been prominent in the daily headlines. They reveal the impact of decades of ethical mismanagement that goes beyond explicitly breaking laws. Rather, the issue is the systematic failures of businesses in developing, executing and maintaining an infrastructure that fosters ethical decision-making.

By ethical decision-making, we mean the ability of employees to recognize and detect decision situations that risk damaging operations or investments, negatively impacting shareholders and other stakeholders, or harming the business’ reputation.

Business ethics are complex; we cannot trivialize the work of developing a culture of integrity. Nevertheless, here is a list of key guidelines that managers in companies of any size can use to build an ethical system of “doing what is right.”

The prerequisites
Start at the top — You are the ethical leaders of the business. Chief executive officers must formally commit to incorporating ethical behaviors as a guiding principle within their business’ mission statement and goals. Ethical core values should be consistently communicated, embraced and reinforced to stakeholders.

Know key laws and regulatory issues — Employees must know relevant laws such as Sarbanes-Oxley, Occupational Health and Safety, intellectual property, etc., that impact their responsibility areas. Many employees should know labor laws to avoid discriminatory behaviors. And, they should know that violating laws or trying to “get around them” will not be tolerated.

Standardize policies and procedures — This is where ethical lapses frequently occur, especially in small businesses. There is a tendency to ignore or resist putting in place formal codes of behavior because they can make the members of an entrepreneurial enterprise feel constrained, or worst of all, bureaucratic. But without written common rules and procedures for such areas as itemizing expenses, accepting gifts, incentive programs, days off, or handling customer communications, businesses lend themselves to problems of cheating, fairness and misrepresentations. This is not to suggest developing detailed manuals, but rather identifying key areas of inconsistencies that can cause financial, reputation or stakeholder harm, and then developing proactive communication to avoid potential ethical misconduct.

Implement a formal system to handle potential ethical problems — Employees should know where they can go within the company if they have or notice an ethical dilemma, particularly if they believe they cannot go directly to their manager. If a business has a human resources department, that is a logical place to go if employees are concerned about the risks of “whistle blowing.” Some businesses have designated an ethics officer, a hot line, or a suggestion box to foster an environment of integrity. Whatever approach is taken, employees must be assured that they will not suffer negative consequences for consulting with appropriate parties to discuss their concerns.

Conduct behavioral interviewing with potential employees — How do you hire employees who are ethical? Unfortunately, there are no valid and reliable “ethical behavioral” tests. Some businesses have job prospects take written exams that include questions addressing fictional ethical dilemmas; others ask those questions in interviews. These approaches may provide insights into a potential hire’s ethical reasoning and decision-making. While no one can guarantee a recruit’s future ethical behavior, the processes described above will help integrate him or her into the ethical climate of the business.

Building a foundation
Incorporate ethical behavior into performance expectations — This is a very new area. To ensure that the values of the organization are aligned with an employee’s conduct, ethics could be included as part of the performance appraisal process. Employees then become accountable not just for achieving business results, but also for how they went about accomplishing them.

Provide employees with mentors — One way to help employees in ethical decision-making is to provide them with colleagues who can offer advice and support. This can be done by establishing a formal system of mentors, or by actively encouraging employees to seek out others within the organization.

Hold periodic employee training sessions — Learning about ethics within a business context is an ongoing process. Holding periodic employee meetings where they can learn from one another about ethical dilemmas they faced and how they were resolved, situations where they should not push boundaries, and how to talk about ethical issues with others, can be invaluable in developing a collective ethical identity.

Identify and develop ethical leaders — As your business identifies employees who “do the right things,” the company should highlight their performance, reward them and promote them as role models to others.

Commitment to an ethical climate
Respond quickly to reports of unethical behavior — Investigate, and if confirmed, work to resolve them. You will want to do this, not only to reinforce a climate of ethics, but to prevent any possible escalation of an unaddressed ethical problem.

Establish and follow through with consequences for both positive ethical behaviors and misconduct — Reward employees who demonstrate sound ethical behavior, and be clear on the consequences if employees violate a law or policy, are deceptive in their dealings with others, do creative but dangerous manipulation of data or information, etc. Rewards and punishments can be tangible or intangible, but they must be consistent and appropriate to the potential or actual harm that results from the situation at hand.

Monitor ethical activity — If possible, do ethical audits. Like any business-result area, measurement is fundamental. One can accomplish this through looking at the number of ethical instances reported, doing a survey, compliance reports, etc.

Keep up to date on laws and compliance issues — Ensure that managers are current on any revisions.

CEOs have to be the ethical leaders. They need to stand for and drive the values they want their business to be known for as it succeeds in its performance. To do this, they must be clear on what their values are, communicate them regularly, establish checks and balances to ensure value commitment, and reinforce a culture of integrity. This is not an easy process, but it is a necessary condition toward building an ethical climate. And this is the ultimate leadership challenge.

Dale Kalika is a lecturer and Barbara Keats is an associate professor in the department of management in the W. P. Carey School of Business at Arizona State University. They are conducting research on Generation Y, their entrance into the work force, and ethical decision-making.

Big money tight times 2008

Big Money, Tight Times-SBA Loans Can Help

By Don Weiner

It may be true that numbers don’t lie, but they don’t always tell the whole story. When the 2008 fiscal third quarter ended June 30, statewide Small Business Administration-guaranteed lending showed a 25 percent decline from 2007 in both total loans and dollars lent, according to the Arizona District Office.

big money 2008

In fact, District Director Robert Blaney says numbers have been dropping throughout the fiscal year, which is indicative of a slowing economy and business owners holding back.

“I think that we’re feeling the effects like everybody else,” he says. Even active SBA lenders have noticed a slowdown.

“The customers are not expanding as much,” says Dee Burton, an Alliance Bank of Arizona senior vice president dealing with SBA and commercial lending. “The customers are, you know, a little bit leery and they’re not expanding their business. So, yes, that has impacted the number of requests that we get to look at, simply because most of the customers are not in high-growth mode.”

Yet a closer look at the SBA’s third-quarter numbers shows some positive trends. Veteran lending jumped almost 70 percent. Rural lending dollar totals were up 93 percent. And loans for start-ups increased 147 percent.

“When the angels cry, sometimes they also sing,” Blaney says.

The upshot for small-business owners is that if they need money and can meet certain requirements, financial help is available.

“Here at Alliance Bank, we look at these type of slowdowns, if you will, as an opportunity to help people get a loan to expand and grow with them,” Burton says. “We’re definitely still in the lending process.”

Thankfully, business owners have no better friend than the SBA. It provides resources for those starting new businesses or expanding existing ones. And it has programs for businesses in need of capital.

When it comes to the financial side, it’s important to be clear: The SBA is not a lender. Instead, it works with banks, credit unions or other entities that make and administer loans. The SBA backs up loans with guarantees, which can run as high as 75 percent to 85 percent depending on the amount borrowed and the type of loan.

“For us, it’s a critical program,” says Lori Stelling, vice president and SBA lending manager for National Bank of Arizona. “We can serve so many more customers by givingthem a loan with an SBA guarantee, because the loans that we do under SBA we would not be able to do conventionally. And there’s a number of reasons for that. If somebody doesn’t quite meet our conventional cash-flow requirements, under SBA we can give them a longer term than we can conventionally.”

“For lenders, I would say SBA is a critical part of what we do.”

The SBA has several different loan programs.

The most common is the 7(a) loan, which serves a range of business financing needs with a maximum amount of $2 million. Another is the SBAExpress program. It makes smaller loans available, but the SBA only offers a 50 percent guarantee. One of the newest is the Patriot Express Initiative, a program that helps veterans and others in the military community with funding and training. Established businesses in need of long-term financing for major fixed assets can turn to the 504 program.

Not all active SBA lenders participate in all programs. Some specialize in 7(a) loans; others offer SBAExpress loans as their primary product. They also have varying restrictions and minimum loan amounts. Many lenders refuse to offer loans for start-ups. Also, only certain active lenders are approved for certain programs, such as Patriot Express. And some are given special status. Especially active and expert lenders qualify for the Preferred Lenders Program, which equates to a quicker turnaround on SBA loan applications.

Visit the SBA’s Arizona District Web site at www.sba.gov/az to find a completelisting of statewide lenders.

The SBA loan process is not that complicated. Take your proposal to a lender and, according to Blaney, if the lender is unwilling to do a loan without an SBA guarantee, they will deal with the agency’s loan processing center.

“It’s as simple as that,” Blaney says. “You have to fill out a couple of more forms for us. I mean, it is the government, we do have a form or two. But it’s not an arduous process. And it has been severely streamlined over time.”

cover october 2008

Before taking that step, however, Arizona small-business owners may want to take advantage of two other SBA programs: SCORE and the Arizona Small Business Development Network. Their experts can assist with business plans and help you understand lender requirements.

John Alig, branch manager and a counselor for the East Valley SCORE chapter in Mesa, says this may mean passing out what a fellow counselor calls “reality cookies.”

“Sometimes that includes telling people things that they don’t want to hear,” Alig says.

He warns that business owners who lack a proper credit rating, collateral and capital do have one thing: a big problem.

www.sba.gov/az
www.alliancebankofarizona.com
www.nbarizona.com

small business open sign - AZ Business Magazine April 2008

Small Business Is Big Business In Arizona

There’s really no need for small business owners to feel like they have to go it alone in Arizona, not with the variety of programs, organizations and resources available to provide help.

There are obvious places to start. The Arizona Department of Commerce has an online resource center that is filled with links and information. Be sure to download the free resource guide. Also, go to the U.S. Small Business Administration’s Arizona District Office Web site to find out about the many resources, services and tools available there.

The Arizona Small Business Association is an organization that serves as an advocate for small businesses and is dedicated to helping them grow. There is a modest $125 annual membership fee that provides access to various services, networking opportunities and value-added programs such as a group health care plan. A worker’s compensation program, in association with SCF Arizona, may lead to bonus dividends based on the safety success of association members.

“Small business is big business in Arizona and small businesses need to understand how to partner, how to connect, how to access resources in a cooperative mode,” says Joan Koerber-Walker, ASBA’s chief executive officer. “And that’s what ASBA gives them.”

The SCORE Association is well-represented in Arizona with chapters across the state. Successful retired executives and business owners provide free one-on-one counseling and stage low-cost seminars that deal with virtually all issues, including raising capital. In fact, according to Chet Ross, chairman of SCORE’s Phoenix chapter, a team of counselors will actually visit a client’s place of business.

Another place to turn for answers is the Arizona Small Business Development Center Network, a partnership between community college districts and the SBA. The AZSBDC offers free business counseling, workshops, programs, and help with technology development and commercialization.

These resources are in place to help businesses of all types, so take advantage of their offerings throughout the start-up process and beyond.

For more information visit the following websites:

sba.gov/localresources/district/az
asba.com
azsbdc.net