Business Longevity Not Only Rare but Worthy of Celebration
When a business is launched, the entrepreneur is looking to make it to five years, not 55, and take his or her chances from there. The entrepreneurial mindset is not centered on the keys to business longevity, which are different for businesses in different industries. Yet once a business makes it past that all-important mile marker, all it takes is one bad management hire or one recession to put it at risk.
George Whitely, president and CEO of Stephan & Brady, a Madison advertising agency, said staying power is a matter of attitude, especially when things get rocky. "You've got to be flexible and resilient," he stated. "There are going to be bad times in any business, including bad news that can be scary. Even great companies take it on the chin now and then, whether they
deserve it or not. You can't dwell on it and become consumed by it. You have to remember the things that made you successful in the first place and then apply them in a different way, or in different areas, and move forward."
The Bank of Deerfield, which is celebrating its 125th anniversary, has survived at least two major financial crises: the bank runs of the Great Depression era, and the shock waves of the global financial meltdown of 2008-09. In banking, the key to surviving such panics is to maintain a relatively conservative risk posture, even while others are lowering their lending standards and running the risk of higher loan-to-value ratios and increasing their percentage of bad loans (aka toxic debt).
"Ultimately, it's tough not to follow that trend if you are in this business because you're losing business and not getting your share of business," said Sig Bringe, the bank's president and CEO. "So you really must have a sense of what's an acceptable level of risk to the bank on a long-term basis if you are going to avoid falling into those pitfalls.
"It's tough to stay the course, but if you've got a long-term focus, if you understand the risk you're taking and can withstand that risk, those are the keys in terms of whether you follow the herd."
That not only makes sense for banks, it's a wise course for customers, no matter how disappointed they are to hear the word "no." It also helps to have a bank board that serves as a chokepoint to head off trouble.
"We can lend people into trouble, and we can put them in a place where, when things do turn bad, it's difficult," Bringe said. "We are making those decisions because customers come in and, of course, they want what they want. If we're doing our part and making good decisions, those judgments should be beneficial for the customers as well."
Bringe, who has been with the bank since 1992, said the financial crisis of 2008 was harder on customers than on the bank. "We're all touched by this downturn in the economy, regardless of whether you still have a job or not," he observed. "We have felt some of the implications of it, and certainly our customers have, and we've started to work with our customers to help them get through this period of difficulty.
"Really, we're only as good as our customers. In many respects, customers have never needed us more, at least in the time I've been in banking."
Even with federal regulators closely watching bank lending, Bringe said the lending appetite of Bank of Deerfield, which has $75.3 million in Dane County deposits, has not changed. The risk appetite of businesses, however, has changed. "Where we find reasonable credit requests, we continue to support lending in our community and we've done so throughout," he noted, "but we're not seeing as many deals because [business] people are much more conservative than they had been."
Founded in 1887 by H.B. Fargo, and originally known as the H.B. Fargo Co., it was another of the bank's early names – the International Bank of Deerfield – that reflected an ambitious goal. "Looking back, that was interesting because obviously we have not spread our wings internationally in any way, shape, or form," Bringe stated. "Evidently, they had large aspirations when they named it."
There are several industries where businesses come and go in a never-ending roller-coaster environment. Restaurants come to mind, as do advertising, marketing, or branding companies. Stephan & Brady was established in 1952, and Whitely said hanging around in this industry requires the ability to continually predict where the industry is headed, and make the changes required to remain competitive. Stephan & Brady was among the first to establish an in-house public relations department to ensure an integrated communications message (today, PR represents 20% of its business), it has been an early adopter of the Web and related innovations like social media, and it has avoided the "specialist" trap, instead building an agency that could serve clients in several industries in the event one industry encountered hard times.
"It's like the old Wayne Gretzky line that a good hockey player skates where the puck is, but a great one skates where it's going to be," Whitely said.
Yet there was a time when Stephan & Brady was skating on thin ice. In a creative- class business, collaboration and collegiality are a requirement, but in the early 1980s the agency was plagued by competing agendas and dissention. "We had a couple of shake-ups and we had some client turnover and we had some staff turnover," he recalled. "Since then, we have fortunately had great continuity with our management team, and I think that has really helped."
The core group that remained not only agreed to disagree agreeably, it produced work like the "Escape to Wisconsin" tourism campaign, which many would like to bring back because it has been followed by a series of underwhelming tourism brands.
"It was a great visibility account," Whitely noted, "and when we got an extension, we had a big event at the agency with all of our clients. That allowed us to show them that we were fine and strong, and it helped to reinforce a lot of relationships. It served as a great springboard for growth."
Other than the Capitol building itself, the Best Western Plus Inn on the Park hotel is the longest continuously operating business on the Capitol Square. The Park Hotel, as it was first called, was built by a group of local businessmen in 1872 in response to the threat of the Capitol being moved to Milwaukee because of the lack of hotel space in Madison designated specifically for government business.
Owned by the Mullins family, it has undergone several remodels (including one to accommodate the motor lodge and car craze of the early 1960s), additions (including 85 new rooms in 1984), and name changes, and not only have its lodgers witnessed some occasional history – Capitol Square protests weren't invented in 2011 – its walls have too. In this age of hyper contentiousness, not many know that the hotel, with its open-door policy, has served as Madison's version of Geneva. "We know sometimes that legislators have difficulty talking across the aisle under the Capitol, but they have no difficulty talking to each other at the [hotel's] Signature Lounge," said George Wiesner, general manager of the hotel. "It's sort of pleasant, and it renews your faith."
"The hotel was originally built to serve the government market," noted Stephanie Hammes, director of marketing for the hotel, "and we've been able to do that throughout the past 140 years. But we've added corporate business, partnered with the university (to accommodate academic travel), and then benefitted from the building of Monona Terrace, which brought in another target market for us."
The Capitol Square has long been vibrant, not just due to political expression, but because of special events like the Crazy Legs run and other attractions. In the mid-1990s, the construction of Monona Terrace changed the calculus for downtown hotels because it added convention business during the week to complement special event demand on the weekends. "That business is now 30% of our annual sales," Wiesner noted. "Government business probably is the same amount, and the university and special events generate the rest.
"Academic travel is a huge engine in this community, and underappreciated and a little invisible," he added. "Academic travelers stay for a few days and spend a lot of money, but they don't come in with a special uniform for identification."
Deb Archer, president and CEO, and Diane Morgenthaler, vice president of marketing and strategic planning for the Greater Madison Convention & Visitors Bureau, will be part of the GMCVB's 40th anniversary this year. The observance will kick off in January with a tourism exchange, and continue with events throughout the year.
They also will celebrate the growing awareness that the Madison brand, and Madison as a destination, have attracted "hidden" dollars to the local economy. It's a realization that gradually has been building since the CVB was established here in 1972, and now is reflected in the events that draw thousands of visitors each year and $1.2 billion in visitor spending in 2010.
"Over time, especially since the advent of Monona Terrace, there has been an awakening and an appreciation for the importance of tourism," Archer said. "In the history of the CVB industry, they all sort of merged in the 1960s and Madison came on board in the early 1970s. That's when cities and destinations were saying, 'Hey, we really have a product to sell, and it's worth selling.'"
Whether it's the construction companies that build hotels, or the furniture companies that furnish them, or the restaurants that accommodate them, Archer called tourism a horizontal business that touches a variety of industries. The latest illustration of growth is the beginning of a discussion centered on expanding the Alliant Energy Center, home to events like the World Dairy Expo.
Morgenthaler noted that millions of tourism dollars enter Dane County, and tourism is the state's third largest industry. Private businesses that don't directly benefit should care about that, she said, because it's a rising tide that lifts all boats. "It really contributes to the quality of life in the community," she said, "and to its vibrancy."
2012 Anniversary List
IB celebrates the continued success of these area employers:
Best Western Plus Inn on the Park
Bank of Deerfield
Cottingham & Butler
Cambridge State Bank
The Daily Cardinal
Stroud Willink & Howard, LLC
Wisconsin Bankers Association
Chase Lumber Co.
McKay Nursery Co.
Ziegler Wealth Management
Eppstein Uhen Architects, Inc.
Dale Carnegie Training
Madison College (MATC)
St. Mary's Hospital
Wisconsin Public Radio
DMB Community Bank
Gunderson Funeral Homes
United Way of Dane County
American Family Insurance
Edgewood College, Inc.
Short Elliott Hendrickson
Ward Brodt Music Co.
Wells Print & Digital Services
Wisconsin Taxpayers Alliance
Cardinal Stritch University
K.F. Sullivan Co.
Schmidt's Auto, Inc.
Kavanaugh Esquire Club
Madison Area Builders Association
Modern Specialty Co., Inc.
Speedway Sand & Gravel, Inc.
Temperature Systems, Inc.
Bruce Company of Wisconsin, Inc.
Olbrich Botanical Gardens
Park Printing Solutions
Stephan & Brady, Inc.
Stevens Construction Corp.
Wis. Council/Blind & Visually Impaired
Godfrey & Kahn
Benjamin Plumbing, Inc.
Chocolate Shoppe Ice Cream Co, Inc.
Perkins Oil Co., Inc.
Polk Diesel & Machine, Inc.
Design Concepts, Inc.
Great Lakes Higher Education Corp.
Thermo Fisher Scientific
World Dairy Expo
Yahara Hills Golf Course
Berntsen International, Inc.
Clasen Quality Coatings, Inc.
Environment Control of Wisconsin, Inc.
Greater Madison Conv. and Vis. Bureau
Plastic Ingenuity Corp.
RZ & Company Hair Etc.
Terra Engineering & Construction
Dave Jones Plumbing & Heating
Fristam Pumps, Inc. (Madison)
Full Compass Systems, Ltd.
In Business magazine
K&M Concrete, Inc.
Monona Plumbing and Fire Protection
Awards Mall/Total Awards & Promotions
Access Community Health Centers
Adams Design Construction, Ltd.
Austad & Son, Inc.
Creative Marketing Specialists
Fabco Equipment, Inc.
Linville Architects, LLC
Madison Computer Works
MEMBERS Capital Advisors, Inc. (CUNA)
Midwest Trailer Sales
Phoenix Consulting, Inc.
Sport Products Mfg., Ltd.
Systems Seminar Consultants, Inc.
Tiziani Golf Car Corp.
Venture Investors, LLC
Agri Nutrition Consulting, Inc.
Badger Graphic Systems
Cat Care Clinic
Cubic Wall Systems, Inc.
Epicentre Biotechnologies Corp.
Harbour Investments, Inc.
Hees Petroleum Corp.
Integrated Security Solutions
J&K Security Solutions
NAI MLG Commercial
Princeton Club, Inc.
Ryan Signs, Inc.
ServiceMaster Building Maintenance
Slack Attack Communications
Sprint Print, Inc.
Garvey, McNeil & Associates
K Johnson Engineers, Inc.
Kahler Slater, Inc. (Madison)
The Pink Poodle, Inc.
Supreme Structures, Inc.
Thermal Spray Technologies, Inc.
TJK Design Build, Inc.
Transcend Architects & Engineers
Vivid Media, Inc.
American Sports Analysts
Bruker AXS, Inc.
Duren Law Office, LLC
Enetrix, Divison of Gallup
Fearings Audio Video Security
Fiskars Brands, Inc. (Madison)
Floor 360, LLC
Holiday Inn Express of Madison
Kneaded Relief, LLC
Landscape Architecture, LLC
Madison Country Day School
Monona Catering, LLC
Monona Terrace Convention Center
Porter & Sack CPAs
Roto Sports, Inc., dba RotoWire
Thomas & Betts, dba JT Packard
Victor Allen's Coffee & Tea
ABC Supply Co., Inc. (Fitchburg)
Arch-Aide, LLC Architects
Badger Contractors Rental & Supply
BellBrook Labs, LLC
BioSystem Development, LLC
Bodilly CPAs & Consultants, LLP
Capital City Harley Davidson
Dimension IV-Madison, LLC
Energy Performance Specialists, LLC
First Business Trust & Investments
Ideal Builders, Inc.
Johnson Insurance Services, LLC
Law Center for Children & Families
MEGA Rentals, Inc.
NanoMedex Pharmaceuticals, Inc.
Specialty Services of Wisconsin, Inc.
Strang Construction, LLC
ActionCOACH Business Coaching
American Family Children's Hospital
Body Connection, LLC
Brenda Brady Design
Cha Cha Tea, LLC
Greenstone Real Estate, LLC
Hardin Design & Development, Inc.
Holiday Inn Madison at the American Ctr.
Jenssen Design, LLC
Johnson Bank Wealth Management
On the Spot Detailing, Inc.
Paws & Claws Mobile Veterinary Service
Preferred Realty Group
Radial Web Solutions, LLC
Sandbox International, LLC
Smart Dental, LLC
Streetsmart Center for Family Safety
Sustainable Energy Earth
TEC Mailing Solutions, LLC
TheoryThree Interactive, LLC
Wisconsin Fertility Institute
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