Jeanette Bennett, BusinessQ: What makes Utah Valley such a great place to start a business?

Neal Maxfield, Entrepreneurship Institute at UVU: It’s a culture that continues year after year. I have students in our entrepreneurship program whose parents have their own businesses. They’ve seen it modeled, and they have an excitement about business. Many start businesses as young college students.

Sonny Olsen, Heideman, McKay, Heugly & Olsen: Before becoming an attorney, I worked for dot-com startups. I would travel around the country, and people would ask why Utah County is another Silicon Valley. It’s a culture thing. People in this area are focused. They have fewer hobbies and fewer social activities in the evenings. They have fewer distractions and more support. Also, the culture is focused on networking, and there are simply some very bright people here.

Lance Black, Eli Kirk: Part of our culture is go to school and get an education. We have good people here, and when we put good people in good businesses, we thrive.

Eddy Hood, Dashboard Accountants: There’s a really strong mentorship mentality here. There are great angels, investors and lenders. These people take pride in saying, “I’ll take you under my wing.” You’ve got guys like Alan Hall, Greg Warnock and Brent Crabtree who will take time to help you grow your business.

Kiley Hix, Strategic Staffing: It’s a tight community with a lot of independent thinkers. In the staffing industry, we deal with businesses that are making decisions quickly. Entrepreneurs graduate from college and are ready to take on the world. Utah County breeds that independent nature, that entrepreneurial spirit.

Brandon Fugal, Coldwell Banker: We live in a very pro-business state. Most of the business owners in California right now feel like they’re penalized for being successful. Utah is fostering development and playing into our young, highly-educated workforce — and that entrepreneurial spirit we have. We have the perfect storm of benefits to foster growth in a difficult market.

David Decker, Complete Merchant Solutions: I agree that the culture and independence factor in, but it’s also out of necessity. I’m from Washington, D.C., and the mindset there is quite different. There are many large companies with established brands that have strongholds on market share, and the barrier to entry is daunting. Comparatively, in Utah there are more small to midsized companies so the opportunities of working up the corporate ladder at a blue chip firm are harder to come by. But that’s the beauty of Utah. There aren’t five large companies in every vertical that have the market cornered, so if you look hard enough, there are soft spots or ways to penetrate market share.

Bennett, BusinessQ: Utah is second in the nation for population growth — second only to Wyoming. How does population factor into our business growth?

Hix, Strategic Staffing: It makes for a great labor market. Even when unemployment was at 2.8 percent two years ago, you could find good employees. You might have had to turn over a few more rocks, but you could find employees.
Lee Livingston, Fibernet: Population growth means you need more businesses to feed the families, and that fosters economic growth and builds the economic cycles in the communities.

Fugal, Coldwell Banker: Having a growing demographic gives you a strategic position to grow your business. Companies succeed if they continue to recruit and retain key employees.

Bennett, BusinessQ: Is now a good time to start a business?

Hix, Strategic Staffing: Yes! Everything is on sale.

Greg Fix, Big-D Construction: It is less expensive to start a business today than it was in 2008. You’re starting at a low point and can build over time. The opportunities in the next two years are going to be great.

Olsen, Heideman, McKay, Heugly & Olsen: People hear the word recession and cringe. But recessions are the best opportunities to find value, not just in real estate, but in buying and selling businesses. It may not be the optimum time to start a business, but it’s a great time to acquire a business that may need some retooling. We’ve seen a dramatic increase in legal work for angel investors and securities. Many people have pulled money out of the market and have cash waiting to be invested — and they are investing in entrepreneurs and in businesses.

Fix, Big-D Construction: There’s a great network of people out there who are interested in investing in good ideas and in startup companies.

Hood, Dashboard Accountants: Any business that starts in this economy is going to start lean and stay lean. As we do the books for businesses, I can tell which ones started in the fat period as opposed to the skinny period. We are teaching the “fat ones” how to budget.
Fugal, Coldwell Banker: Right now, there are deals on commercial space. Businesses can procure free rent, furniture and other concessions they wouldn’t otherwise be able to benefit from. Landlords hate to hear that, but it’s a reality right now. If you’re looking to lease space, it’s a very competitive market. It’s a great time to be a new business.

Hood, Dashboard Accountants: It’s also a great time to hire. Every time we put a “help wanted” ad out, we get 50 resumes within a couple of hours and they’re all college graduates. You can build a great staff and not go broke doing it.

Hix, Strategic Staffing: If you’re in a position to hire, you’re going to get the cream of the crop. It’s a great time.

Black, Eli Kirk: Technology also makes it a great time to start a business. Somebody on a bootstrap budget can start a business using social tools and bring awareness to their concept or product or brand. Facebook brings a trusted friend network. If I have 700 friends on Facebook and I’m trusted among those friends, then what I say is gold. And then they’ll re-tweet it or discuss it among friends. So in talking to five friends, I can really talk to 3,000.

Fix, Big-D Construction: Our valley has amazing networking opportunities with the Utah Valley Chamber of Commerce, Corporate Alliance and ConnectShare. Add social networking, and there are relatively inexpensive ways to get to know people. People do business with people they know and trust. I really believe that.

Hood, Dashboard Accountants: When a business starts, sometimes they mistakenly take all their capital and go buy office space and business cards and fancy chairs. We tell them not to do that. Every dollar you have should be spent on marketing and getting customers. Then let your customers pay for all that other stuff once they’re paying you. Capital is a finite resource. Don’t blow your money on things that aren’t bringing in customers.

Bennett, BusinessQ: At what point should a startup develop its brand?

Black, Eli Kirk: Yesterday! Your brand is your customers’ perception of your product or service that they get in aggregate over time. It’s much more than a logo. It’s their experience when they call customer service. It’s the experience when they see a collateral piece from you or talk to one of your sales reps, or have a problem with a product and have to return it. A brand will happen regardless of whether you drive it. Who the boss says you are is not necessarily who you are. Who your customers think you are is who you really are.

Fix, Big-D Construction: Our people are our brand. We are who our employees make us.

Maxfield, Entrepreneurship Institute at UVU: Perception precedes using a service or company. If you can create a strong perception quickly, you’ve created value.

Olsen, Heideman, McKay, Heugly & Olsen: People need to spend money and get good advice on branding and marketing in order to get recognition and build their volume. For some companies, image is so important because they don’t have the relationships yet. They deal more in volume. For us, we focus more on relationships.

Maxfield, Entrepreneurship Institute at UVU: When I owned Maxfield Candy, we first had just a generic business card. Then we went to chocolate colored. Then later we photographed the chocolate and put it on our business card. So immediately people would know we sell boxed chocolate. Your logo and materials need to communicate quickly and clearly.

Bennett, BusinessQ: What are the accounting tasks that need to be addressed from day one?

Hood, Dashboard Accountants: Number one, they need to realize sales is the most important thing. You’ve got to get money in the door. The second most important thing is to track it. If you don’t track it, you’re going to lose it. Startups need to have three to six months of cash to cover operating expenses. Most of their operating expenses should be marketing. As clients come in the door, they should use that revenue to fuel growth of their business. Also, they need a cash flow forecast, not a pie in the sky. Sales is not cash. A sale is a transaction. Cash is what I get four months later when they finally pay me. You also need an accountant. Don’t be cheap on how you track money — and don’t be cheap on marketing.

Livingston, Fibernet: If a company is a service provider or has a complex product line, they need to know exactly what the costs associated with those products are. Reporting is such a key element. Set up the income and expense categories so you know how and what to sell effectively.

Hood, Dashboard Accountants: There’s no way you can grow if you don’t know where you’re sitting at all times.

Hix, Strategic Staffing: You also need to know what kind of corporation is best for you. If you grow too big too fast and you weren’t set up properly, you limit your financial capabilities. Are you going to hire employees? Workers comp? General liability insurance? These factors need to be thought out as you structure your business. When looking for trusted advisers, ask people in your network who they would recommend. If you sell widgets, you should seek out the best widget maker in Utah and see if he or she will share experiences with you.

Decker, Complete Merchant Solutions: As we transition to less of a cash-based society, businesses cannot survive unless they accept credit cards. I’d venture to say less than 25 percent of people under age 44 carry cash. But be cautious when selecting a provider. Taking credit cards pertains to your cash flow, so it’s critical you understand what and who you’re committing to. I cannot imagine trusting the lion share of my revenue to a company 2,000 miles away. Find a local company that will explain electronic payment processing and listen to your needs.

Bennett, BusinessQ: How does an entrepreneur figure out all the complexities when he or she would prefer to simply focus on the great idea?

Hix, Strategic Staffing: Bring in a team of advisers. You need an accountant. You need an adviser to tell you how much to pay yourself if you’re an S-corp. You need a marketing team.

Olsen, Heideman, McKay, Heugly & Olsen: You need the right representation. If you’re starting a sophisticated enterprise and you’re projecting millions in revenue, it’s extremely important that you get the right advice, and it’s relatively inexpensive compared to the other startup costs.

Hix, Strategic Staffing: There are companies like Omniture in Utah County that started with five employees and are now publicly traded. You need to take those possibilities into consideration.

Olsen, Heideman, McKay, Heugly & Olsen: The last thing you want to do is have the ability to go public and have somebody say, “You’re an S-corp? You need to be a C-corp for two years. Sorry you missed your opportunity.” That gives your competitors time to get into the market. You need a relationship with an attorney.

Livingston, Fibernet: To Sonny’s point, the setting up of a C-corporation or S-corporation has a big impact on the exit strategy. All of those factors have to be taken into consideration.

Maxfield, Entrepreneurship Institute at UVU: This brings to mind a UVU student who started a business a couple of years ago who wants to grow and sell it. If that’s your vision from the beginning, it makes a difference as to how you set it up. You have to have that vision all the way through. You have to decide are you going to be local? Are you going to grow nationally? What are you going to be doing with the life of your business?

Bennett, BusinessQ: When a business is starting out, how do they anticipate what kind of office space they need? How do they plan for growth?

Fugal, Coldwell Banker: Business owners can never be too proactive when it comes to space requirements. All too often business owners leave that decision to the end and then compromise their ability to negotiate from a position of strength. The earlier in the process you identify the right type of facility for your company, the more thoughtful you can be as you navigate the entire process. A lot of companies don’t look toward a three-to-five-year plan for growth. But the decisions they make upfront relative to their commercial space can have a huge impact on whether their operations can be effective or end up being displaced in multiple locations, which presents a major difficulty.

Fix, Big-D Construction: Knowledge is power. We like to begin with the end in mind and help the owner understand what the costs are going to be before they even get into the design process. Establish what the budget is and then go through that design process and design to what the budget needs to be.

Fugal, Coldwell Banker: People grapple with do I own or do I lease. Right now in the market where global finance is challenged, people don’t recognize there are tremendous opportunities with SBA financing. There are small business loans available. The key is you have to still be profitable. You still have to show profitability, and a lot of early-stage businesses can’t show that. If you can show a track record for profitability, in many cases it makes more sense to own your space. On the flipside, most of the Fortune 500 lease their space. Why? Because they need to be quick and nimble. Any business looking toward growth needs to afford themselves the ability to expand, contract, and to be quick and nimble — which leasing provides. On the flip side, if you are a doctor or an established company and your space needs aren’t going to change in the foreseeable future, it’s wise to create a profit center for yourself by building equity in your space as opposed to giving that equity to a third party. Each type of business has its own needs, and I’ve seen businesses end up building a building that is a monument to themselves that reflects the culture. But the exit strategy isn’t there, the ability to multi-tenant that building doesn’t effectively exist and it ends up being more of a handicap. There are a lot of considerations that go into a facilities planning strategy.

Livingston, Fibernet: If you are going to own your own property, it’s another business. You have to carefully consider where you want to spend not only your time resources, but your capital resources. It’s a huge expense. Are you going to spend your money on real estate or on building your business? What is your core business?

Olsen, Heideman, McKay, Heugly & Olsen: If you’re going to own something, you need to be smart about how you set up the shell to own it. In a lot of cases, you want to set up a separate entity. There can be serious liability implications from owning property that you don’t want to affect your core business.

Fix, Big-D Construction: Many times an owner will setup a separate entity and then lease it back to the company.

Bennett, BusinessQ: It’s not a guarantee that when you start your business, it will succeed. What do you see as commonalities among businesses that do succeed?

Black, Eli Kirk: It’s drive. It’s vision. It’s somebody who does not get too worried about the shortfalls and has the big picture vision and passion. Success in business is also based on having a culture and process in place to ensure customers are raving fans of your company — not just satisfied customers. Also, strengthening relationships with others — whether or not they are potential clients — is imperative to long-term business growth. We can’t see people as objects or as a means to a future business relationship, but instead we must look at ways we can help them.

Livingston, Fibernet: There was a time in history when the Internet was not a significant factor in the success of a business. Today it is one of just a few keys to perpetuating and having a successful business. One of the key factors to succeed is having an effective Web site. If you don’t have that, you are going to be outcompeted. But putting up a Web site does not guarantee anything. Marketing and driving traffic to a site is an essential key.

Fix, Big-D Construction: That’s the first place people start looking, so it’s essential to success. Also, an entrepreneur needs a strong will to succeed. One of the most important things is stay focused on why you started your business. What was it that brought the idea about? Focus on what you are an expert in and then hire people around you for what weaknesses you might have. Sometimes we try to do so much that we don’t focus on what we’re best at. We try to do all the things that bog us down in a business.

Hood, Dashboard Accountants: Number one, a successful entrepreneur is not afraid to ask. In a sales appointment, he’s not afraid to ask for the close. Entrepreneurs who are timid will fail. Two, you need a healthy respect for cash. Once cash is gone, you’re gone. Three, you have to delegate everything you aren’t good at. Get it off your plate. You don’t have enough time to do everything. If you are wearing so many hats that you have a kink in your neck, you’re going to fail. Four, the CEO has to be the best sales person in that business. The CEO should be out knocking doors with the sales manager every day.

Fugal, Coldwell Banker: Success in business comes down to identifying a need and filling that need in the marketplace and being able to execute on that. That’s the core of your business strategy. Identify it and then outline a strategy where you’re filling that need and doing it better than anyone else. The older I get, I’m less impressed by people who have money than I am with people who are excellent at what they do. People who have an eye toward excellence impress me, and it doesn’t matter whether they are a schoolteacher, an engineer, an artist or a CEO of a multinational organization. Whatever your business is, be excellent.

Decker, Complete Merchant Solutions:
You are not going to evolve without making mistakes — it’s part of the process. We were recently taken by a professional scam ring out of Los Angeles for more than $100,000. They used stolen identities and forged documents to open a merchant account. This was an expensive lesson. From this we’ve become much more aware of risk exposure. So be patient with yourself because you won’t always be perfect in your execution. And in conjunction with that, align yourself with capital outlets. Establish credit lines or keep angel investors in the wings just in case you have a Los Angeles-type experience of your own. Also maintain an abundance mentality rather than a scarcity mentality. Karma is so important. When you treat customers and partners well, they’ll spread the word.

Hix, Strategic Staffing: Some of the training seminars that I’ve been to talk about how businesses should keep it simple. Focus on one, two or three core things you do as a business. Those are your goals, dreams and passions. Be quick and nimble and able to change what you do. Last year we had to rapidly change what we did. As a business owner, be able to wear different hats and adapt to the circumstances.

Maxfield, Entrepreneurship Institute at UVU: It comes down to finding something you love. Passion comes from within. Even with passion, it takes experience to understand the marketplace and needs of the customer. The owner of a business is the one who really drives it. You’ll be first one there, the last one out and last one to get paid. You have to love what you do.

Olsen, Heideman, McKay, Heugly & Olsen: Our law firm has been known as a litigation firm, but now we are focusing on relationships and our business clients. Business people need sound short-term and long-term legal advice. Companies that are successful value relationships as well. Whether it’s Brandon with real estate or David with merchant services, you can’t do everything and you need to form relationships with others who can help you. It doesn’t matter how brilliant you are, if you aren’t getting good advice and setting up your business properly, you’ll run out of cash, you’ll lose focus and your customers will recognize it. Build a network of people who will live and die with you.

Bennett, BusinessQ: Thank you for your advice on starting a business.

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And boy did they get on their feet.

These three winning companies, chosen by our guest judge TAMSolutions of Lindon, are paving the way toward greener pastures.

Here they are — in all of their green glory.

UTAH Wood and Iron/
UTAH Powder Coatings, Orem
(www.utahwoodandiron.com)

The How
Utah Wood and Iron uses recycled and recyclable materials to create long-lasting furniture and items for the home. Utah Powder Coatings puts a durable finish on the metal products without the evaporation of volatile organic compounds into the atmosphere — like many painting processes do.

The Why
“It made sense from two points of view,” owner Marshall Haglund says. “Reusing materials that have come to the end of their intended use is the most environmentally friendly way to recycle. Plus, the low cost of these ‘used’ materials is an important economic factor in our business model.”
The Beginnings
Owner Jeff Owens’ father gave him lumber cut-offs from the Panguitch Sawmill to cut, carve and play with — and he’s enjoyed woodwork ever since. Haglund was given a welder as a Christmas present when he was 14 and has loved welding and fabricating ever since. UTAH Wood and Iron came to be after Haglund and Owens wanted to combine their talents and drive to create a unique business.

One man’s junk is another man’s treasure
Haglund found an old John Deere hay baler, used by a good friend of the family who had recently passed away, and noticed it was the perfect size for a love seat or a two-person swing. Every time Haglund looks at the love seat, he remembers his friend’s hard work and legacy.

The Environment
“We’re outdoors-y people,” Haglund says. “We know we are nurtured by our environment, and we take seriously the duty and stewardship to try to leave things better than we found them. We’ve all had our consciousness raised — which is an ongoing process — and we’ve learned to treat nature with a little more empathy and with a little less of an impact from our lifestyle.”

The Philosophy
“There are some zealots who would like to lock up the scenery of Utah,” Haglund says. “There are also some yahoos who want to leave as much trash behind as they can. But in between the extremes are most of us who try to follow the general principle of John Muir’s dictum to ‘take only pictures and leave only footprints.’”

INSULATION
SPECIALISTS, Orem
(www.insulationspecialists.net)

The How
Insulation Specialists helps consumers and the environment by providing an upgraded, non-compressing insulation to homes that are currently under-insulated. By upgrading to the Insulation Specialists’ product, consumers save money every month by requiring less gas to heat their home in the winter and less power to keep it cool in the summer. The insulation product doesn’t decompress, so once Insulation Specialists installs its product, the home’s insulation won’t need to be upgraded again.

The Why
“Anytime someone comes to my house and tries to throw something away, my wife will pull it out of the garbage and sort it into our three recycling bins — I’m just trying to keep up,” founder Tim Oyler says. “As owners, we wanted to be involved in a business we could feel good about and make a living at the same time. Conserving energy use by adding insulation means we use less energy and homeowners save money — it’s perfect!”

The Beginnings
“As high school classmates competing in business classes, Dallas Jackman and I always had a desire to own our own company and make a difference. Randomly, we ran into each other and began the process of what we are today. Currently, there are five individual owners — all young, all friends and all extremely ambitious!” Oyler says.

The Difference
Insulation Specialists is entirely focused on conserving energy. In 2009, the upgraded insulation helped more than 5,000 homes save 15 to 30 percent on annual gas and electric bills. Insulation Specialists literally stops money and energy from going out the roof.

The Growth
The company started in January 2009 with 40 homes, and now it is upgrading more than 700 homes a month, with the hope of upping that number to more than 1,000 in January 2010. Insulation Specialists began with two employees; now it employs more than 100 workers.

INNOVATIVE WASTE
SOLUTIONS, Orem
(www.iwswasteconsulting.com)

The How
Innovative Waste Solutions meets with clients, discusses their current disposal system and creates an alternative system that will be more cost efficient and environmentally friendly. Once the new system is approved by the client, Innovative Waste Solutions implements the changes and oversees that it works as designed.
Plus, they don’t get paid unless they figure out how to save their clients money.
“The ‘greenest’ aspect of our company is the money we put in our customers’ pockets,” founder Craig Castle says. “If we can reduce costs and do something good for the environment — let’s do both! Diverting items from the landfill and recycling them reduces disposal costs and can save money in the process.”

The Beginnings
Innovative Waste Solutions started in January 2007. It is an affiliate of Environmental Waste Solutions — the largest waste and recycling cost reduction company in the U.S. Because of this affiliation, Innovative Waste Solutions has access to more than 500 affiliates in the U.S. and Canada. Any company can implement changes nationwide through Innovative Waste Solutions.

The Environment
“There has to be a balance between using, enjoying and protecting the space around us,” Castle says. “We should utilize the opportunities by enjoying the creations that abound; but we need to ensure we are not destroying the environment so no one else has the opportunity to see what we saw or do what we did.”

The Growth
Trash exists in every industry, so any company that generates trash is a potential client of Innovative Waste Solutions. Whether by choice or potential government regulations, companies will turn to greener solutions. Innovative Waste Solutions is ahead of the curve by implementing cost-effective recycling programs.

The Success
“A few weeks ago, I presented to a client the impact made by changing a few items in their organization,” Castle says. “Their response? ‘It’s rewarding to save money and trees.’”

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