Just as technology is changing the communications business, making it better, easier and cheaper, so technology will change the transportation business with the same results. Internal combustion is a primitive transportation technology compared to the electric motor, and fortunes will be made by those who figure out how store enough electrical energy to propel a car a significant distance at highway speeds.  

It all comes down to the battery and some Hamilton County businesses are on the cutting edge of that effort. In fact, the only mass production facility for electric car batteries is located in Noblesville. In this edition, Shari Held looks at how local companies are participating in the next transportation revolution.

Looking Back, Looking Ahead

We also offer the first of our focus sections in this issue. In our progress edition, Rosalyn Demaree reviewed each city and town in the county, spoke to community leaders and summarized their progress in this very challenging environment. We did well against some tough odds, and things are looking even better for 2010.

Unless you fly private planes for fun or business, you may not be aware of the Indianapolis Executive Airport. But for those who need a convenient runway, which includes some influential businesspeople, it is the kind of facility that makes Hamilton County very attractive. Having recently won the airport of the year award, Andi and Dan Montgomery continue to improve this unique county amenity.

New Columnists

I am gratified that Hamilton County businesspeople continue to find these pages an outlet to share their expertise. Among our newcomers, Cynthia Waldrop helps clarify your credit card processing options (in theprint version only) and Gloria Enoch contributes this month’s book review. And, yes, those are equations in Emmett Dulaney’s column. Whether you like math or not, break even is a critical business concept and Emmett does a good job of showing us how to figure that number.

We also welcome a few new advertisers in the print edition, who join those stalwarts who stuck with us through one of the worst years ever for marketing budgets. We are grateful that you choose to spend your ad dollars here, in a locally owned publication that celebrates and promotes our business community. Thank you. Readers, please take note of the ads in our print edition and support these businesses and institutions. I fyou onlyread online consider subscribing to the print magazine. Its only $20/year and you can receive your own copy by clicking the subscribe button on our home page.  

Mike Corbett

“We are at one of those very interesting moments in history where we are witnessing the transition from the gasoline or diesel-fueled engine to the next generation,” says Ron Gifford, president and CEO of Indy Partnership. “We have the opportunity in this community to help shape the direction of the entire automotive industry for the next several decades, and we are positioned exactly at the epicenter of that change.”

Hamilton County has been home to automotive-related companies such as Noblesville’s Warner Bodies, Inc. and Westfield’s Porter Engineered Systems, Inc. and Indiana Mills & Manufacturing, Inc. for years. Recently they have been joined by Noblesville’s EnerDel and Indy Power Systems, pioneers in the development of the next generation of green technologies for the automotive industry.

After their debut more than 100 years ago, electric cars lost ground to internal combustion vehicles. Will they once again become mainstream? Or will they go the way of modern-day predecessors such as General Motors’ EV1, the electric car developed in Indiana?

“My premise is the electric vehicle is going to be a viable option very soon,” says Brose McVey, founder of Carmel-based Nexpointe Strategies, LLC and Republican candidate for Congress in Indiana’s 5^th Congressional District, “and central Indiana, including Hamilton County…could replace yesterday’s automobile industry as a sustainable, high-tech, high-wage economic driver of this whole region. And the EnerDels of the world are helping us get there very quickly.”

On the fast track

EnerDel’s headquarters and cell manufacturing plant are located in northern Marion County, but its battery pack assembly and testing center, which employs 40 workers, has been located in Noblesville since 2008. The company drew upon the rich resource pool of experienced engineers in the area to assemble its team. With a recent $118.5 million grant from the U.S. Department of Energy, and a long-term, low-interest loan in the final stages of negotiation, EnerDel is poised to expand.

The company already has the only mass production lithium-ion automotive battery manufacturing facility in North America. EnerDel president Richard L. Stanley, came on-board to help the team scale the business up to become a major global producer, and to carry on central Indiana’s legacy of leadership in innovative automotive electrical products.

”Our goal is to increase capacity to 60,000 EV packs per year by 2012,” says Stanley, former president of both Remy, Inc and the Drivetrain division of ATC Technology Corp.  “We have not finalized the specific growth that will occur at each site, but we are focused on significant growth in central Indiana.”

Rapid growth is essential for EnerDel to continue to stay ahead of the pack and be the first company to mass produce lithium-ion batteries for the automotive industry. The company faces stiff competition at both the domestic and international levels.

Recently EnerDel forged partnerships with Norway-based Think Global, manufacturer of the THINK city electric car—Ener1 Inc., EnerDel’s parent company, owns a 30-percent interest in the company—and is slated to supply batteries for Volvo’s C30 electric vehicle. 

“Volvo is also a critical partnership, as their track record in terms of safety and performance makes their use of EnerDel batteries a valuable proof point for us,” Stanley says.

Other projects include co-funding a research project with Nissan Motor Co. that will be conducted by the Department of Energy’s Argonne National Laboratory, and producing batteries for California-based Fisker Automotive’s Karma luxury plug-in electric vehicle.

Managing energy for cost savings

Another Hamilton County player is Indy Power Systems, developer of the Multi-Flex^TM energy management system.  Multi-Flex combines the energy of high-performance lithium-ion batteries, needed for acceleration and distance, with lower-cost lead-acid batteries, used to power golf carts and GM’s first EV1 electric car. The difference in price is substantial–$1,000 per kilowatt hour versus $200 per kilowatt hour.

“The concept for Multi-Flex came about because there is no one perfect battery for a battery electric vehicle or a hybrid vehicle,” says Steve Tolen, president and CEO of Indy Power Systems, who originally intended to develop an electric car. The technology can be used for automotive batteries as well as hand-held electric devices.

Tolen started his venture in 2007 and moved it to Noblesville Business Park in 2008. “Hamilton County is in the center of the technology pool left over from the General Motors EV1 development days,” Tolen says. “We decided to locate here because this is where the expertise was.”

One of those experts, Bob Galyen, who was the lead designer of the EV1 battery pack, sits on Indy Power Systems advisory board. Chief engineer Bill Wylam, another former Delco Remy employee who developed the battery for the EV1, serves on a company board, as does green-energy advocate McVey.

Indy Power Systems is assisting Crane Naval Surface Warfare Center in developing an electric hybrid drive system for the Humvee, which will be ready to roll in May. The prototype for the company’s hand-held electrical devices should be ready by year-end, and Indy Power Systems is currently negotiating licensing agreements.

Last year Senator Evan Bayh invited Indy Power Systems, along with four other top alternative energy-related companies in the state—EnerDel, Remy International, Altairnano (an Anderson lithium-ion battery manufacturer) and Anderson-based Bright Automotive (creator of the IDEA hybrid-electric vehicle)—to attend a press conference. “We are truly in a unique position,” Tolen says. “We were the only company there that could work with all the others. We can enable anyone in alternative energy to better manage their energy.”

What’s it all mean?

Green-energy automotive technologies could have a significant economic impact on Hamilton County, which stands to benefit from companies located within the county or in neighboring counties.

Electric and hybrid cars certainly have more traction today than they did in the 1990s, and it’s a technology that keeps coming back. According to Wylam, GM worked on a version of the electric car every decade in modern times. “Those cars didn’t really make sense given the battery technology at the time,” he says.

EnerDel, Indy Power Systems and others hope to solve that dilemma—and soon.

“Right now, a lot is being made about costs and range, but as a charging infrastructure begins to develop, range will be much less of a factor,” EnerDel’s Stanley says. “This means we can make smaller, cheaper batteries that make electric drive more affordable for the masses.”

Rather than singing “Auld Lang Syne,” Hamilton County business and government leaders might’ve been sighing “Whew” — as in “We made it” – as they rang out 2009.

The county’s unemployment rate was 6.5% in November. In comparison, the state’s rate was 9.3%, and the nation’s was 9.4%, according to the Hamilton County Alliance.

Even so, CNNMoney.com ranked Hamilton County the 11^th best place nationwide for job growth over the past eight years.

Carmel

Last year proved that the county “is not immune but certainly resilient” to a depressed economy, said Carmel Mayor Jim Brainard. He cites three reasons:

·        Hamilton County’s economy doesn’t rely on manufacturing as much as other counties in Indiana or other states. “We have more high-tech, more medium-sized businesses and a more diverse economy,” he said.

·        A single large employer doesn’t drive the county’s economy. In Carmel, 10 to 11 companies comprise the largest employers, and many medium-sized companies have regional and national headquarters there.

·        “Local government has been very conservative,” creating a good quality of life for prospective businesses, long-established ones and the still-growing number of residents, said the mayor, who began his 15^th year as the city’s chief executive this month.

Hard-core optimists might wonder if everyone doesn’t need a breather once in a while, including local planners and leaders whose economic development to-do lists had, for several years, been longer than unemployment lines in Detroit.

Perhaps, although Brainard contends that it “would have been nicer to have a softer landing.” He lays blame for last year’s economic trouble squarely on the people hired to oversee the nation’s financial institutions.

“Had the federal government done a better job of regulating lenders, the problems could have been minimized,” Brainard said. “We could have had a mild meltdown instead of a full-blown recession. Unemployed people across the country are paying for the mistakes of seven-figure-salaried regulators.”

In Hamilton County, though, that cost appears to be lower than elsewhere in the state and country. Brainard and other leaders here say there were business-related bright spots from 96^th to 296^th street.

Cranes lifting steel beams dotted Carmel’s skyline throughout the year. St. Vincent Hospital moved its administrative jobs from 86^th Street to nearly fill an empty Thomson consumer electronics building, and economic development deals continued. Brainard said four deals were being worked on in December, although he could not divulge specifics.

Homegrown businesses have a history of success in Hamilton County. The mayor said ChaCha.com, a free answers service developed by Carmel resident Scott Jones and based at Clay Terrace, was making a worldwide impact. ChaCha moved into the Quantcast Top 100 U.S. Web sites in November after it was the fastest-growing Web site that Quantcast tracked for the six previous months.

Noblesville

Keeping homegrown businesses in the county seat was a goal of the Noblesville economic development staff, which launched an initiative that had nearly immediate success, said Mayor John Ditslear.

In the initiative’s early days of calling on large employers, city staff members visited King Systems, where anesthesia and respiratory care products have been developed and manufactured since 1977. But the story the hosts told during the visit couldn’t have been more alarming, according to Judi Johnson, assistant director of economic development: Executives at Consort Medical, King Systems’ United Kingdom-based parent company since 2005, were contemplating moving the Noblesville facility’s 500-plus jobs to Mexico.

Partnering with the Indiana Economic Development Corporation and the secretary of state staff, city employees opened discussions with King Systems and worked with City Council to offer a 10-year phase-in package that will keep generating tax money from the manufacturer as it stays and grows in Noblesville.

The city also had a number of highlights in 2009 that grew out of businesses from outside – some very far outside – the city’s borders.

Among the bigger gains in 2009, Noblesville welcomed Cambria Suites, Exit 10’s first major hotel, and SMC, a Japan-headquartered manufacturer of pneumatic automation products that has 500 good-paying jobs, said Ditslear, who was part of an Indiana economic development delegation that traveled late in the year to China and Japan to establish or nurture relationships with major businesses in Asia.

Fishers

In neighboring Fishers, major business developments in the healthcare field highlighted 2009 business news, according to Scott Faultless, who completed his ninth year as Town Council president in December and started his 15^th year as a council member this month.

The town presented a plan in October to create the Fishers Medical Technology Corridor, a 900-acre project on the largely undeveloped northeast side. If approved as proposed, the corridor would stretch from I-69’s Exit 10 to the county’s eastern border. Town planners have estimated it would bring about 9,000 more technical, healthcare and retail jobs to the area than the number that could be created under current zoning laws.

The corridor will be anchored by St. Vincent Medical Center Northeast, the state’s first freestanding emergency center which opened in 2008 at Ind. 238 and Olio Road, and Clarian Saxony Medical Center, an office building and hospital that is proposed to bring 250 hospital jobs to Fishers.

Clarian administrators say that each of those jobs will attract 1.2 jobs unrelated to the facility to Fishers, according to hospital spokesman Gene Ford. Ground broke on the project in July 2008 but work stopped early last year due to the economy, then resumed in late fall.

Faultless said you needn’t look any further than the Concourse at Crosspoint office park between 96th and 106th streets near I-69 to confirm that Fishers’ business climate is healthy. The 26-acre, $100 million complex of first class offices opened its first building late in 2009, a good testament, he said, “to how strong the marketplace and economy is in Fishers.”

Westfield

Westfield Mayor Andy Cook keeps his eye on the marketplace as well, although his community “is determined to let the marketplace set the pace” for development, he said.

“We didn’t lose any businesses (in 2009),” Cook continued. “That’s our biggest victory because we don’t have many to begin with.” 

He makes it clear that the best is yet to come on the county’s western border, candidly describing his community as “a city of plans.”

The biggest plan is Grand Junction, a multi-year, multi-million-dollar project that will redevelop downtown Westfield. Proponents hope to attract boutique-type shops, tie the retail district to the area’s increasingly popular trails and build on the historic character of the Quaker-founded community.

Cook, in his first term as the city’s first mayor, calls it a “piece by piece, one-on-one kind of redevelopment” and says “small business, not big-name” retailers are the targets in Westfield’s sights.

The city approved bond sales last year to jump-start the economic development-driving project and completed its portion of the Monon Trail up to 161^st Street, “a huge part of the economic development plan,” Cook said. “It adds a unique amenity to our city” and will be a pathway to the new downtown.

The amenity will continue to grow. In late December, the city received a $1,096,667 federal grant to build the trail from Ind. 32 north to 191^st Street in 2013.

“These are much needed funds and another step toward getting complete Monon connectivity in Westfield,” said parks director Melody Jones in a press release.

The private sector took initial steps toward making Grand Junction a reality, too. The process of razing buildings to make way for retail and residential spaces began, and developer J.C. Hart, drawn to Westfield because of the redevelopment project, Cook said, announced plans for an upscale apartment complex on South Union Street.

 “We need business here,” Cook said. “There has not been an active economic development program in Westfield for a long time.”

Northern Towns

A business boost also is long overdue in northern Hamilton County, say leaders in Arcadia, Atlanta, Cicero and Sheridan. But they add that significant strides toward that goal were made in 2009.

The Arcadia Arts Initiative was created in May 2008 to develop a learning community for artisans as a way to attract businesses and visitors to town, said initiative director Ron Adamson. There were three such artisans operating in the town that month, but by the end of 2009, that population had grown to 13.

The initiative’s celebration of art, called Autumnfest, began modestly but grew rapidly; the second festival, held in October, doubled the number of artisans involved in 2008. They lined four blocks of Main Street with 40 booths that featured candlemakers, woodcrafters, fine-art painters and sculptors, fiber artisans, and photographers, among others. A number of workshops were held in 2009, and the initiative plans to offer many more, including some two-day ones, this year.

“It’s quite an aggressive plan,” said Adamson, adding that the initiative’s effect on business includes looking to bring overnight lodging and at least one restaurant to the town for workshop guests, other visitors and residents.

Having a mercantile may be reminiscent of “Little House on the Prairie,” but ones located in Atlanta and Sheridan played a role in business highlights last year in those towns.

The nearly 2-year-old Atlanta Mercantile moved a door down on Main Street and expanded its hours to include winter weekends. The store, where locally made crafts, gifts and arts are stocked, is a main attraction when riders deboard Indiana Transportation Museum trains, said Andy Emmert, the 2009 town council president. Those trains bring as many as 125 visitors to the town on any given excursion, he estimated.

The Sheridan Mercantile was one of four businesses that opened in 2009, “a really good year,” said Robert Young, director of the Sheridan Chamber of Commerce for five years. “We have a lot of mom-and-pop-type businesses so the (down) economy has really hurt (them). But none went out of business.”

Sheridan native Erin Merrill returned to her hometown to open a chiropractic office, and her parents opened the Mercantile right across the street.

 “Sheridan has always been a proud community, and it still is,” Young added. It is “a town that could easily become a ghost town but the people here won’t let it.”

Steve Wallen may be one of a very few business leaders that would characterize 2009 as a year of opportunity.

Even though several of the town’s businesses closed last year, Wallen, president of the 20-month-old Cicero Economic Development Committee, said the down economy made it an ideal time for his group to be proactive and determine what is the best use for the community’s future crown jewel – its waterfront. If the waterfront is developed correctly, it could attract visitors and businesses to Cicero, Wallen said.

Three moves last year have already made the area more visible: the town built an access on the reservoir that allows boaters to go ashore and wander through town and two popular eateries, Jackson Street Café and Pizza House, moved to the western edge of the business district.

 A summer evening spent on Wolfies’ lakeside deck enjoying a few drinks and a meal with family and friends is undoubtedly one of Hamilton County’s best dining experiences.  Wolfie’s flagship restaurant opened in 2004 and overlooks Morse Reservoir. It has since grown to include a second location in Fishers.  A true family enterprise, Wolfies is owned and operated by Scott and Nyla Wolf, daughter Ansley and son Alec.  Ansley currently runs the Fishers location and Alec will come on board full time when he graduates from Indiana University this summer. 

The Wolfs renovated their Fishers location in 2007.  Scott handled the general contracting and much of the carpentry work in addition to his responsibilities at the Noblesville location.  While it was a busy time for the Wolf family, the hard work paid off in lower construction costs and improved communication between ownership and the subcontractors. Nestled among hotels and fast food chains at 96^th and Hague, the Fishers location offers a popular lunch spot and cozy neighborhood pub.   

The Back Story

Scott and Nyla Wolf have a nearly 35 years combined experience in the restaurant business.  Many Noblesville residents will remember their first store, Nyla’s, in downtown Noblesville.  When Nyla’s lease was up the Wolfs decided to search for a new location and a change of focus.  When the building on Morse Lake became available they could not pass it up.  Inspired by their trips to the north woods of Michigan’s Upper Peninsula, both locations offer a relaxed, forest lodge atmosphere. 

 The atmosphere and view may draw local residents and boaters in, but a diverse menu of scratch-made American fare and a few surprises keep people coming back.   A local focus helps add value and flavor to the diverse menu.  Scott and Nyla can be spotted selecting produce at one of Hamilton County’s farmers markets throughout the summer. In addition to local produce, fresh meats and fish are incorporated whenever possible.  Locally-raised catfish is fried up in homemade batter every Friday night and all of the pork and beef is raised in the Midwest. 

The Food

The prime rib sandwich highlights the sandwich portion of the menu.  The prime rib is slow roasted for five hours, sliced thin, topped with onions and pepper jack cheese and served on a hoagie bun.  The Blue Burger is made with the Wolf’s homemade blue cheese and stands out in a crowded field of great Hamilton County burgers. 

Headlining the House Specialty section of the menu is the Baby Back Ribs.  Thanks to a homemade dry rub and a slow smoker on site, the ribs offer a flavor that sets them apart from the average steak house.  The Horseradish Crusted Sirloin is a Scott Wolf original recipe and a great combination of complementary flavors.  

Whether you’re looking for a cozy lodge to enjoy a warm winter’s meal or a sun-soaked deck to gather with friends this summer, Wolfie’s has both the atmosphere and food to make it a great dining experience.

Review by Gloria Enoch

Whew!  What a couple of years it’s been in the world of business.  Jim Collins wrote the book Good to Great in 2001, having researched 15 companies who weathered the 1990’s.  I wonder, considering the economic climate we’re experiencing in 2010, what Collins would say now if he were to re-write this book.  In his earlier bestseller, Built to Last, Collins explored what made some companies great and how they sustained that greatness over time.  During his research, one thing about good companies, of which there are plenty, vexed him.  How do you make a good company a great company? Hence, this book, Good to Great!

In the field of education where I’m employed, we recently heard Governor Mitch Daniels proclaim he had to make a sweeping budget cut of $300 million from education in order to balance the state’s budget.  If this does not force the state government and institutions of education to become entities which go from good to great, I’m not sure what would.  To have a meltdown of our education systems like what happened with business would be our country’s demise.  Should we practice the principles Collins has outlined in Good to Great, I think everyone would win.

Collins, in his second chapter, suggests the concept of Level 5 Leadership.  It’s an inverted pyramid of management.  Instead of the top managers having all the ideas, making all of the money and taking most of the company profits, empowering those who are actually working with the product or meeting with the customer would be a major step towards becoming a great company.  These are the people who will have the best suggestions and will assist in the marketing of the company’s product.  Is it not the same with governmental institutions like the state and education?  Collins writes it is not possible to accomplish great things without great people.  He says many companies create a strategy then try to rally people around it.  Great companies start with great people and build great results from their efforts.

Indiana is one of few states in the country with an operating budget in the black.  Recently, I read how Governor Daniels requested that his top educators submit ideas that would not involve cutting teachers in the classrooms or increasing classroom sizes.  A monumental task if you were to ask me, but it showed a leadership style that involved and empowered the people whom the changes would affect the most. Governor Daniels is not leaving much room for mediocrity.  (I also give credit to those in our state government who passed the law making it illegal for the state to operate in the red.)

Collins explores several other management concepts employed by those 15 companies. Of the 15 he studied, only one, Circuit City, did not survive the great recession of the 21st century. 

This is a “must read” book for managers of private and public companies or government agencies who hope to survive these rough economic times.  American companies will rise again from the ashes, it’s a matter of who will be left in the rubble.  My suggestion is to listen to those who are working for you and have a vested interest in keeping their job and your business alive. The global economy demands American companies to be better than good; we are to be great!

Gloria Enoch is an admissions representative for Indiana Tech – Fishers. She has journalism and business administration degrees from the University of New Mexico and Oakland City University and holds Masters in Science Management.

As an example, let’s look at a recently purchased house on 15^th Street in Noblesville.  According to records at the county courthouse, the property was transferred to William Vaught in September of 1902.  By 1907, the value of the structures on the land had increased from $600 to $1,880.  One source for information on this increase is the Sanborn map collection. 

Sanborn Maps

The Sanborn Company began making maps of cities in 1867 for insurance companies to determine fire risk. Amazingly detailed, the maps were updated on a regular basis until the company stopped producing them in the 1970s. Since these were created for built-up areas and Hamilton County was largely rural, there are not many maps that cover our cities.  Arcadia, Atlanta, Noblesville and Sheridan are the only communities that have them and those maps were only made between the 1880s and the late 1940s. 

The Sanborn maps show that the buildings on the 15^th St. property were substantially altered between 1898 and 1904 – in fact, they were probably replaced with new buildings.  The footprints (as they are called) of the structures completely changed.  The structure relevant to this study is one constructed as a stable for the owner’s carriage horses. A large “X” can be seen on the roof of the building, which was the designation of a livery stable or barn.  These were specially marked because of the high risk of fire from the storage of hay.   It was also placed at the very edge of the property to give access to the alley.

A second substantial change was made in 1916 when, according to the transfer records, 40 feet of the lot was divided off.  It appears from the Sanborn maps that the barn was reconstructed into a house.  This accounts for the very plain architectural style of the building.  A garage for the automobile that replaced the horses was built between the two houses.  Interestingly, the first tenant of the rehabilitated barn was a car salesman.  The city telephone books show the tenant occupying the house by May of 1918, but he may have not had a phone before then.  The city directory shows them in the house in 1920.  The house probably started as rental, but was sold to the tenants upon the death of the owner in 1922.  Legally, the property was in the name of Frances Vaught, wife of William Vaught, and is mentioned in her newspaper obituary.  The house went through other owners, and information about the occupants of the building can be found in the city directories, including occupations, businesses they owned, and family members.

Links to today

Checking the old records can have an impact on the property today.  The transfer books say that the property was 40 feet wide, but a modern survey says that it’s 35 feet wide.  Sometime between 1922 and today, five feet went missing.  Another problem might be that if a property was a rental when it was first built, it might have utilities such as the sewer system tied into the original landlord’s system - which would make for an interesting legal discussion concerning plumbing and city codes today.  This all adds up to an interesting and provable story – after all, not every house was originally built to hold horses. 

Other types of records can be of value.  If a person were researching covered bridges, it’s helpful to know that the ledger of Josiah Durfee, the main bridge builder in the county, still exists.  There are some unusual documents as well.  Fraternal lodges would keep certain kinds of information about their members for insurance purposes.  Because of that, it’s possible to learn the waistline sizes of most of the leading citizens of Noblesville in 1900.   The records are not always complete - original property abstracts are rare and sources can be flawed, but it’s better than no information at all.  It’s worthwhile to remember that records for business today, (that people are perhaps grumbling about taking up space in the office storage room), may be incredibly valuable to historians someday.  It’s another way of getting a glimpse into the lives of the people of the past.

Starting Point

The first rule of business is:

Sales – Costs = Profits

Since it is break-even we want to find, we know that the value of Profits is equal to zero. The same equation can be modified if you want to find where Profits are equal to $100,000, $250,000, or any other number, but for now the equation is equal to:

Sales – Costs = 0

The next thing we know is that Costs can be divided into two components: Total Fixed Costs (TFC) and Total Variable Costs (TVC). Further, TVC is equal to a portion of Sales. If, for example, TFC was $100,000 and TVC was .25 of sales, then the equation could be worked out as follows:

Sales – $100,000 -.25Sales = 0

therefore, .75Sales – $100,000 = 0

 and, .75Sales = $100,000

so, Sales = $133,333

What we do not often know, however, are the values for TFC and TVC and this is where the High-Low Point Method becomes important.

High-Low Point

To use this method, look at two income statements and take the change in the expense of each item divided by the change in sales and that will tell you want portion of each is variable. Next, take that portion times sales and subtract from the incurred expense of each time to determine the fixed portion amount. The easiest way to understand this is with an example, so assume the following is from the income statements for KES Trinkets:

To compute the variable portion of Cost of Goods Sold, take the difference between the two years (320,000 – 100,000 = 220,000) and divide it by the difference in sales (800,000 – 250,000 = 550,000) to get .4. To compute the fixed portion of Cost of Goods Sold (of which there should be none), simply take the variable portion times Sales and subtract this from the actual cost. In this case, .4 * 800,000 = 320,000 and 320,000 – 320,000 = 0 so this is purely a variable cost with no fixed component. There are also such entries as Rent, which are only fixed and do not contain a variable component in this example.

Such is not the case, however, when it comes to Wages – it is a mixed cost (also known as semi-variable) with both a variable and fixed component as the following illustrates:

255,000 – 90,000 = 165,000   (changes in Wages)

800,000 – 250,000 = 550,000 (changes in Sales)

165,000 / 550,000 = .3 (the variable cost portion)

255,000 – (.3 * 800,000) = 15,000 (the fixed cost component)

Work out the math for each of the expenses and the results will be those shown in the following table:

These numbers can now be plugged into the basic equation to find the true break-even sales point:

Sales – $153,500 -.83Sales = 0

.17Sales – $153,500 = 0

.17Sales = $153,500

Sales = $902,941

To verify the break-even sales number is correct, it is possible to multiply this by the variable portion of each item and add in the fixed amount for each to derive the break-even income statement:

Break-Even Sales             $902,941

Cost of Goods Sold          361,176

Wages                              285,882

Rent                                  100,000

Utilities                               55,588

Repair/Supplies                  90,294

Depreciation                       10,000

                Total Expenses 902,941

Net Income                                   0

According to this analysis, as soon as the firm reaches sales of $902,941 it will break-even. While using the high-low point method makes it possible to compute this, it should be pointed out that there is a drawback in that it is only using two sets of numbers and one could have occurred during an unusual activity period (expenses higher or lower than normal). The more data sets used, the more accurate the results will be and with enough data sets, regression becomes possible to offer an even better estimation.

Relationship Marketing

Yeah, this didn’t really go away, I hear you, but I think this buzz word will start to come back with a vengeance. The rise in social media has allowed us to build relationships at a pace comparable to the growth of a blue whale calf. There is no other platform that allows us to connect, relate, understand and repeat, all in a matter of minutes. People come up to me regularly and say they know me because of Twitter. I’m thinking, well, you don’t KNOW me, but they are thinking they DO know me. They may become a fan of mine or even buy from my company or accept my recommendations a lot quicker than had we no relationship at all. We can develop messaging much more specific to peoples’ wants, needs and mindsets to drive business and sales. Use it wisely.

Direct Mail

Stop laughing. I realize this goes somewhat against my number one trend, but let me explain. With the decline in newspaper circulation, brands will find new tactics to get into your home. There will still be a large set of marketers (let’s say retailers) who have a high need to reach a targeted number of individuals (let’s say Moms) in a geographic location and they want to use every method available to them. You can do this on Facebook, but an integrated approach will mean an increase in direct mail. I recently read a report about a new product called Intelligent Mail, which is a barcode service that’s much easier to track. Marketers will have more data at their fingertips, a key element that was missing and led to the rise in online use.

Branding

Those who understand design as an asset know that an emotional trigger can do marvelous things to move a product. In 2010, I think we’ll see a bigger demand for functional design, fantastic creative and a brand that helps build on that relationship I mentioned above. Consumers and businesses alike need to be amazed at each corner. Don’t spend time on something to just get it out the door or check it off your list so you can  tell your boss that marketing tactic is done. You won’t see one iota of sales or profit from the activity if your actions lack an experience and a strong design.

Targeting

Niche targeting is going to become a deeper part of marketing in 2010. Look at all the temporary but very important life moments you may want to target:  pregnancy, motherhood, college savings, vacations, home purchases. That short window of opportunity to grab a new loyalist will become more important. Once you engage your consumer in a lifestyle moment, and do a good job of catering to them after the fact, you may very well have a client for life. Or take the business-to-business world where, for some horrible reason, it’s been OK to reach out to the masses. The “let’s add everyone to the mailing list” mentality is going to end. Some companies have already figured this out, but you would be amazed how many still send thousands of bits of information to people who just don’t care. Target your list for better results and improved ROI.

So dive in to your marketing with an integrated approach, and consider some of the above trends as options. Make sure you spend the time and effort to really think through the experience, the emotion, your list and the flow of your relationship. Track and measure at every step and you’ll be able to set your own trends the next time.

Raquel Richardson is the owner of Silver Square, a Fishers-based marketing firm, and answers marketing questions at www.ask.silversquareinc.com.

If a recent New Year’s resolution to “get organized” has begun slipping by again this year, here is good news: you have the right intention, but you may be missing the cause of the chaos.  This is not simply a desk issue. Many effective business people sit behind messy desks; however, they have learned to manage their workload. The goal is not an empty task list, but a manageable one!  Presuming your issues are not so bad that you can still be found behind your piles of paper, let’s start with seven of the most common issues.

1. Efficiency is in the empty space

You are ONLY as efficient as the usable space on your desk (your actual desk and your computer desktop).  You naturally work best when you have adequate space.  Remove all optional desk items for a few days and test the theory.

1. Beware of overly complicated filing methods

Most people have huge file piles.  For many, those detailed plastic tabbed hanging folders are only functional their first week and begin to work against you from there. Group paper by month or even quarter of activity, and put things away. This offers a manageable pile; no more over-stacked corners.

1. Saving too much or printing too much

Save ONLY paper that is unavailable in an electronic copy, like unique, hard-to-recall, hand written notes.  If you know how to run a search on your computer, saving electronic documents recalls them faster than desk digging.  If you print because you have trouble reading many electronic documents, PDFs are a better solution. Try converting them. And remember primary desk space is for active tasks, not storage. 

1. All work spaces count

When you begin to organize, don’t forget all the spaces where work is stored.  Our workloads hide in briefcases, on seats of cars, and on kitchen tables. Get it all in view at once to get a full assessment.

1. Use your doorway

If something does not belong in your office, give it to whomever it belongs to immediately.  Both physical things and responsibilities we should not own often stay on our desks.  If you fear you are the only one who can do something adequately, reconsider.  If no one ever gave you a chance to fail, you would not know how to do some tasks now.

1. Get out of “project mode”

Breaking projects you should own into smaller activities is a huge factor in managing chaos. Don’t get caught in the details. Create only four piles:

1.      Calls

2.      Meetings to be set

3.      To-dos (separate yours from others)

4.      Research Needed

When it is time to work, embrace the mood. Feeling verbal?  If so, place your calls.  If you focus best in the early hours, do your research then.   This “mood of operation” will make you more effective.

1. Avoid meeting oversaturation

If you end up with a huge pile of meeting items, it may be time for some meeting effectiveness training.  Start by verifying that you have made all calls, to-dos and research prior to the meeting to be most effective.  Often these piles grow smaller when revisited.

To keep yourself manageable year round, remember to be fair about the required time expectation.  Schedule an office regroup day once per quarter.  The good news is if you are doing well weekly, you often don’t end up needing the whole day.  When complete, you can use the extra time for those other activities.  

J. Michelle Sybesma is a business consultant specializing in solving professional challenges.  Find her on the web at www.SkillsConsulting.com.

A history of success

Originally called Terry Airport, the facility was built in the mid-1950’s on the Campbell farm, just west of the Hamilton County line on State Route 32, and used as a training facility. Ray VanSickles purchased the airport in the mid-1960’s, expanded onto adjacent land, extended the runway and started selling jet fuel. Under VanSickles leadership, Terry Airport became an Indianapolis International Airport reliever facility, handling corporate jets during peak times of air traffic congestion.

Andi and Dan Montgomery took over the fixed base operations in 2000 when VanSickles retired.

“Being responsible for fixed base operations, we take care of anyone who comes through the airport,” said Andi Montgomery. “From jet fuel to maintenance, to arranging hotel reservations or booking car rentals, we provide all of the services our customers need.”  

A vision for the future

Hamilton County leaders saw the airport’s potential, purchased it in 2003 for $4.6 million and renamed it Indianapolis Executive Airport.

The Airport Authority launched a long term strategic planning process in 2005 to steward the facility, identify long-term improvements and meet FAA requirements for a master plan. Forecasting enabled the Authority to envision future demands on the facility in order to protect and safeguard airspace.

Recently the IEA rebuilt its runway with $3.4 million in federal stimulus funds, putting 75 people to work for two months, the first such airport development project in Indiana. Future plans include enhancing all-weather utility, increasing potential revenues and improving services for business users. The 10 to 20 year strategic plan focuses on capital improvements such as terminal development, taxiway lighting and an eventual extension of the existing runway to 7,000 feet. Moving the plan to implementation will include an extensive 2 year environmental analysis, securing FAA grant funding, and seeking funds from local and state resources.

Immediate Business Impacts

Since its purchase by the county, the facility has exceeded expectations under the care of Dan and Andi Montgomery. Dan launched Eagle Flyers, a flight school where more than 500 people have earned their licenses. Many have gone on to become plane owners, using hangar space and facility services such as maintenance and fuel sales.

In the beginning, Montgomery Aviation was managing services for 43 based airplanes and selling about 50,000 gallons of jet fuel. By the time a second hangar was constructed 3 years later, the facility housed 100 airplanes and sold 700,000 gallons of fuel.

“By then we really understood how important it was for people coming to our community,” Andi said. “People come here who are looking for corporate office sites or seeking relocation.  Site selectors arrive with a checklist of items including the location of general aviation facilities as well as international airports.”

Dan had a vision for furthering executive level of services with the installation of an aircraft canopy. “The new canopy, the only one in the state and in the Midwest, allows us to keep the weather off people coming in, provides security and adds to the value we have as a business airport,” Andi said. 

With more than 45,000 arrivals and departures each year, IEA supports most of the area’s major events. Seven of the top competitive golfers at last Summer’s Senior Open Golf Tournament at Carmel’s Crooked Stick, flew through the airport. Thirty-two percent of arriving traffic goes to the Meridian business corridor in Hamilton County and 19 percent goes to destinations in northern Marion County. Businesses such as Medco, Modular Devices, Inc., Beck’s Hybrids, The Dobbs Group at Graystone Construction, Andretti Green, Zotec Partners and Estridge are among the Hamilton, Boone and Marion County businesses that use Indy Executive Airport.