Volume 4, No. 3
May 2008


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Mel Muskovitz
"Fair Labor Standards Act - Failure to Comply Can Be Costly"

Ann Arbor Area BUSINESS MONTHLY magazine brings the reader the latest business news and information important to the businesspeople in Washtenaw County. Each month articles cover real estate, legal, Internet, employee concerns and the climate of business in the greater Ann Arbor area. There is news about company employees and feature articles on local businesses. We cover business news from Ann Arbor, Chelsea, Dexter, Manchester, Milan, Saline, Whitmore Lake, and Ypsilanti.

Small Businesses Leading The Way To Economic Success

Alex Harrison

Ben Pryor, General Manager, Bella Vino
Ben Pryor, General Manager, Bella Vino

According to the U.S. Small Business Administration, small businesses represent approximately 99% of all the nation's employer businesses. Furthermore, data from the Small Business Administration shows that they employ 50% of the non-farm private sector workforce.

In Michigan, employment in small firms is 52%, slightly higher than the national average. Small businesses are vital to our local economy, and while in years past state investment has focused heavily on specific industries such as Life Sciences and Advanced Manufacturing, groups like the Small Business Association of Michigan (SBAM) are advocating for a shift in focus and investment towards small companies that show commercial potential regardless of industry.

In celebration of National Small Business Month, the Ann Arbor Area Business Monthly sought to profile three local businesses - each within different industries, facing both unique challenges and opportunities for growth.

Local Market Champions Michigan Products
Since its opening four years ago, Bello Vino Marketplace has been earning a regional and national reputation for their selection of over 5000 varieties of wine and 840 kinds of beer. But the real story is the local mission of this market, located on Plymouth Road on the north side of Ann Arbor.

From its inception, Bello Vino's priority has been to provide high-end products, hard to find specialty items, and to support the local and regional food community. General Manager Ben Pryor explains that over seventy percent of their inventory comes from Michigan, Ohio, or Ontario over the course of the year. Looking around the store, familiar local brands are quick to be found on nearly every shelf.

Taking the idea of "locally sourced" even further, Bello Vino owns and operates a farm just a few miles east of the store, where they grow a variety of fruits and vegetables year-round, including heirloom and organic varieties. They also raise grass-fed lamb and goat which is sold in their meat department. Filling a niche in a town that welcomes both good food and social consciousness has put Bello Vino-which currently staffs 43 full and part-time employees-in a position to thrive over the long term. In the last year, however, success has been met with significant challenge.

"We took a huge hit when Phizer left," says Pryor. "That meant two thousand loyal customers-lost." Bello Vino is positioned directly across from the Phizer campus, which announced its plans to pull out of Ann Arbor in January of last year. "We used to have a huge daily lunch rush to our deli, and now that's gone," says Pryor. Many Phizer employees also did their after-work grocery shopping at the market, and the company hired Bello Vino frequently for their catered events.

While Pryor says the loss is by no means insurmountable, more than anything it has been a catalyst for more aggressive marketing in the direction of supporting local purveyors and vendors. Bello Vino takes pride in their ability to source excellent local products, and they have also earned a reputation among food entrepreneurs as a welcoming forum for testing and marketing new products. "People know they can come to us with their product and get a chance to demo it in the store with our customers," says Pryor. If the response is positive, it's very likely that you'll find that new item in stock and on shelves before long. By celebrating the bounty of our local foods, whether that means carrying established brands like Zingerman's, or fledgling gems like San Rafael Coffee Company, Bello Vino hopes to ensure its future success through relationship, community, and good taste.

NuStep Keeps Pace, Focus
A little more than twenty years ago when Richard Sarns founded NuStep, Inc. in Ann Arbor, he had a mission to help the hundreds of thousands of Americans who were experiencing open heart surgery and other cardiac-related health issues. Today his NuStep TRS 4000 Recumbent Cross Trainer has claimed a valuable stake in the physical therapy, wellness, and cardiac rehab industries.

Early on, explains Vice President of Marketing Steve Sarns, there was an established focus on cardiac rehab. "We sought to own that market," he says. "And now we're in 95% of cardiac rehab centers across the country." While competitors within the industry market extensive lines of exercise equipment, NuStep has chosen to keep their energies and innovation focused on a single product-the Recumbent Cross Trainer-equipping it with design elements that make it accommodating for people with a wide range of physical limitations, even those with extremely impaired ambulation. "We're very focused on one product done right, and we've been able to create a brand based on a single product," says Sarns.

While still a small company with sixty-five full time employees, NuStep is poised for growth over the next few years, says Sarns. "Since we sell nationally and internationally, we have a bit of a mixed portfolio. We've also expanded beyond cardiac rehab facilities. Healthcare, senior living, and physical therapy and rehabilitation are rapidly expanding markets, and there's no seasonality to what we sell. And of course our target demographic is increasing in number, so our focus is growth."

True, NuStep is exactly the kind of company that will benefit from the aging "Boomer Plus" demographic. "This generation is focused on prolonging health, staying mobile and strong," says Sarns. But Sarns also recognizes that it's not enough to sit back and assume that merely being a player in a ripe market will maintain steady growth for NuStep. So over the last two years, the company has been strategic about their marketing and public relations initiatives. They hired Q LTD, a branding and marketing firm, to rethink their branding-the result was a more polished logo, slogan, and website.

They also sought out a unique marketing opportunity with Hollywood actress Teri Garr. Garr, who was diagnosed several years ago with multiple sclerosis (MS), also suffered a brain aneurism in December of 2006 which left her wheelchair bound. NuStep provided Garr with their Recumbent Cross Trainer and a personal trainer, and she made a dramatic recovery. Having a famous face tied to their brand has coincided well with new research that has been showing the bilateral reciprocal motion of their machine can greatly benefit people recovering from stroke and incomplete spinal cord injuries.

Overall, NuStep, Inc. has been experiencing a steady 12% yearly growth over the last seven years. Sarns mentioned a "push in 2009 to expand our global reach," which includes goals to increase sales in Japan and Canada. Ultimately, this push will require increasing sales staff, and although Sarns is conservative in announcing the creation of new jobs, he is hopeful that their push for expanded sales will have a positive impact on their manufacturing sector as well.

Small Business is Their Business
Tonua Brown and Paul Stacy of Frog Island Creative Services both realized that their skills and passions within the marketing world were a perfect match for small businesses. "Our strength is taking a small company and making it look bigger than it is, and we see that as a critical need within the marketplace," says Brown, who is Vice President of Design.

For smaller communications and marketing firms like Frog Island, the current economic downturn has actually been an opportunity for growth. "When budgets get tight, marketing is one of those things that almost immediately gets outsourced," says Brown. But when small or medium-sized businesses approach the bigger marketing firms, she explains, the prices for their services exceed that limited budget; and that's when a firm like Frog Island really stands out. Brown and Stacy fill a much needed niche in the Southeastern Michigan area-closing the gap in quality between the typical "mom and pop" marketing look of small businesses and the polished face of larger companies, and creating materials that give companies credibility and visibility at a price point that fits a small business budget.

Frog Island's plan for growth is simply getting the message out to small businesses that strategic marketing is absolutely crucial to survive and thrive in this economy. "There are lots of small companies who just aren't leveraging their websites like they should be," says Stacy, Vice President of Marketing. "We're trying to help our clients understand that people are meeting their websites before they meet them." He also points out that making the most of a website allows a smaller business to reach outside this economy, an often crucial element necessary for long term growth.

What Brown and Stacy want local small businesses to understand is that marketing is not a risk; it's a strategy. "Too often small businesses view marketing as an "extra"; something to spend on once they can afford it," says Brown. "There are some businesses that can succeed strictly through word of mouth, but very few. Marketing is what tells your potential customers that you're here."

The Ann Arbor area is rich with successful small firms, many of whom are being recognized as stand-outs within the Michigan economy for their innovation and productivity. Last month, Michigan Celebrates Small Businesses held their annual awards ceremony, unveiling the "50 Michigan Companies to Watch." Of those companies recognized, nine were from the Ann Arbor area. Find out more at: www.michigancelebrates.biz