Reprinted with Permission Courtesy of New Business Minnesota ©2012 – www.newbizminn.com

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New Entrepreneurs Often Need the Resources of Key Business Professionals to Succeed. New Business Minnesota Brings You Three Stories About Resource Heroes You Should Know and How They Helped Clients Reach Their Goals: Nexus Direct IRA, Lommen Abdo Cole King Stageberg PA and Katalistik LLC.

February 2013

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Special Report

Reprinted with Permission Courtesy of New Business Minnesota ©2013 – www.newbizminn.com

Nobody Succeeds in Business

Alone, Especially Not New Businesses. They Often Rely on

Professionals with Specific Skills or Services They Need to Launch and Grow Their Enterprises. They Turn to Their Resource Heroes: Business Professionals Who Have Made a Significant Difference In

the Success of Their Clients. Here We Present Three Such

Examples.

Resource Heroes

Photos by Paula Keller

New Business Minnesota

Having trusted advisors is important for any business. The best scenario is to develop a good business relationship and an easy rapport over time. Then when/if an issue arises, you

know who to call and they are immediately up to speed. So, when Hollywood started calling the owners of Hell’s Kitchen

and Angel Food Bakery, the restaurateurs called on their attorney, Greg Perleberg, with the Minneapolis-based law firm of Lommen Abdo Cole King Stageberg PA.

Perleberg, along with attorney Jeff O’Brien, are part of Lommen Abdo’s Food, Beverage & Leisure Activities practice group, which addresses a broad range of legal issues including: choice of entity and entity formation; financing and tax matters; real estate, such as the purchase or lease of a facility; labeling and advertising consider-ations; trademark, brand equity and other intellectual property pro-tection; employment contracts, and licensing issues.

Cynthia Gerdes and her husband Mitch Omer started their popu-lar Hell’s Kitchen basement restaurant in downtown Minneapolis in 2002. Last year, they launched Angel Food Bakery in the space just above, along with their daughter Katy Gerdes (perhaps you remem-

ber her as a contestant on the popular TV show Project Runway?). The team is inventive, quirky, clever and creative in all they do.

Cynthia, after all, founded the successful Creative Kidstuff in 1982. Mitch is a classically trained French chef with 30 years experience, worships Ralph Steadman and Hunter S. Thompson. And, Katy, who is a veteran of the fashion industry, has been baking for most of her life.

In the beginning, the owners weren’t thinking about issues be-yond the business of serving “Damn Good Food” and keeping staff and patrons happy.

Part of keeping everyone happy, especially customers, meant maintaining a continuous flow of fun and imaginative ideas. Of course, those led to an ever-growing range of logo-imprinted items such as aprons, t-shirts, mugs, hats, drink ware, and the “Damn Good Food Cookbook.”

“I’m a chef,” says Mitch. “Writing a cookbook to me just meant having great recipes and sharing some of the things we do at Hell’s Kitchen. I never even thought about copyright or trademark issues associated with the book.”

As the Hell’s Kitchen business grew, Perleberg said it was not sim-ply a restaurant in Minneapolis, but a “destination” with global reach.

Lommen Abdo Cole King Stageberg PA

RESOURCE HERO

Providing Comprehensive Trademark and Copyright Protections to the Metro’s Hottest Restaurant/Bakery

Lommen Abdo Attorneys Jeff O’Brien (left) and Greg Perleberg (far right), Hell’s Kitchen chef and co-owner Mitch Omer and Angel Food Bakery co-owner Katy Gerdes

It was becoming a brand that reached all over the world. Among the global destinations for their homemade peanut butter are U.S. mili-tary bases in Afghanistan.

The rest of the world was beginning to notice, too. Shortly after the Angel Food Bakery opened, they had an inquiry

from someone who wanted to partner with them on a bakery cook-book.

Then a couple of reality TV producers were inquiring about doing something around a high-concept bakery involving Mitch, the tall, gregarious, artistically tattooed and quotable chef who thinks out-side the box; and his step daughter Katy Gerdes, a diminutive fashion designer/baker who thinks for herself. Mix thoroughly and watch.

“We weren’t sitting around trying to find new things to do. This was just falling in our lap,” says Cynthia. She didn’t want to explore these opportunities without some trusted legal help. “We contacted Greg Perleberg at Lommen Abdo in the nick of time so we could be proactive and lock it all down.”

Perleberg met with her at the restaurant and immediately started an inventory of all the intellectual property that needed trademark or copyright protection. It was quite a list since they hadn’t visited the trademark issue since they first started, which is typical of many businesses.

“We needed to ensure that the logo, the name – everything – was protected. And not just in Minnesota, but throughout the U.S. and beyond,” says Perleberg. “If others started to encroach on their con-cepts and ideas, it would dilute the Minneapolis-based brand.”

O’Brien, who along with Perleberg, team-up to represent other brand-conscious clients, including several retired Minnesota Vi-kings players and a number of the new craft breweries, says the social media age can both build but also put your brand in jeopardy faster than ever.

That’s why when he meets with a business owner for the first time, often for formation-related issues, he brings Perleberg along to con-sult on intellectual property. “It’s never too soon to think about pro-tecting your brand,” says O’Brien.

Every new and emerging business should seriously look at intel-lectual property issues, Perleberg says. If they don’t, they may later find themselves in an expensive legal battle to defend their rights and in today’s modern economy, a company’s IP portfolio can account for the majority of a company’s value.

“If we get involved in the planning stages, we can get their brand equity in place and protected before they start up,” he says. “Part of the process is also to make sure you’re not infringing upon someone else’s brand. If that happens, you may have to pull down your expen-sive neon sign, change your business name, menus…all your market-ing pieces and pay damages on top of it.”

Things that business owners need to protect include company name, logo, website content, photos, marketing copy and unique phrases used to describe a product or service.

“If you develop rich content, you need a clear chain of title to go with it. Many businesses overlook that,” says Perleberg. “When they are seeking investors or looking to sell the business, a clear chain of title to your intellectual property is critical.”

For a new business owner, it can be especially tempting to Do-It-Yourself and use online law-related internet services for, as an ex-ample, trademarks.

Perleberg warns that Do-It-Yourselfers often need more help than they originally expected.

“Navigating the trademark system to ensure that filings are done correctly and cost-effectively is something that we do for a living – we are better equipped to handle the legal minutia, leaving the busi-

ness owners to focus on what they do best – as in this case, make delicious food,” says Perleberg. “When we got involved with Cynthia, we updated everything. Now they have an active portfolio that will be easy to keep up-to-date and protect.”

Another common misstep by business owners is simply failing to recognize they have something worthy of a protection.

“It isn’t just clever or catchy names and phrases that need protect-ing,” says O’Brien. “You should include things you rely on: signage, your web page, descriptions of what you do, etc. – even customer e-mail lists constitute valuable trade secrets. If a competitor shows up across the street, you don’t want them imitating you and taking advantage of your hard earned goodwill.

The ultimate mistake, however, is not watching for infringements of your trademarks. You have to be prepared to protect them and challenge those who infringe on them,” says Perleberg.

“The words ‘aspirin,’ ‘thermos,’ ‘pilates’ and ‘escalator’ were never defended and the owners lost control. They all became nouns in the public domain – what’s referred to as “genericide.” Policing trade-marks is essential. If you don’t do that, you’ll lose them. It’s that sim-ple.”

Because of the relationship that has grown between Lommen Abdo and Hell’s Kitchen and Angel Food Bakery, it’s likely their trademarks will always be current if for no other reason than the attorneys are regular patrons of the restaurant and bakery. If there is something new that needs protecting, they have probably eaten it or seen it during a visit.

When asked, Perleberg will say he focuses on intellectual prop-erty, but quickly adds that he works for a full-service firm and brings in the necessary talent to solve any client issue that may arise, creat-ing a team between his law firm colleagues and the client.

“We also value the relationship side of the business,” adds Perle-berg. “We hand out gift cards for our clients, attend the golf tourna-ments, enter their drawings and tell everyone how wonderful they are. We participate. It is part of us being a solid resource for them and a trusted advisor, they can’t be afraid that the meter is always running.”

Cynthia says that Perleberg and O’Brien bring clients to the res-taurants and introduce them to her all the time. And, when the firm has a birthday party, they order from the bakery.

“It’s such a pleasure when vendors, whether a restaurant designer, accountant or law firm, also become your customers and help you at a personal level,” says Cynthia. “Relationships make business fun. They have your back because they care. You’re not just a transaction.”

NBM

Greg Perleberg and Jeff O’Brien are part of the Food, Beverage and Leisure Activities practice group at Lommen Abdo Cole King Stageberg PA, a full-service law firm with 44 attorneys in Min-neapolis; Hudson, Wisconsin; and New York City. The firm’s areas of practice also include general practice from cradle to grave, se-curities, financing, entertainment and sports law. Perleberg and O’Brien can be reached at (612) 339-8131 or greg@lommen.com or jobrien@lommen.com, www.lommen.com.

Cynthia Gerdes and Mitch Omer own and manage Hell’s Kitchen and Angel Food Bakery in downtown Minneapolis at 80 S 9th St. (Reservations are advised). They can be reached at (612) 867-1919 or cyn@hellskitcheninc.com. www.hellskitcheninc.com,

www.angelfoodmn.com

Lommen Abdo Cole King Stageberg PA Continued from Previous Page

New Business Minnesota

After 20 years as a money manager at a major bank, Carl Call-erstrom wanted a new life as a business owner. After months of searching and researching, he found the perfect business

to buy: a downtown Minneapolis liquor store. The only problem was finding a way to finance it. And it was threatening his dream.

Just about every new and small business owner knows that banks aren’t lending like they used to. Blame it on the recession, the hous-ing bubble, Lehman Brothers, etc. The reality is the same. Money is scarce.

In Carl’s case he was faced with a tough decision. If he used his 401k money, he could finance a down payment on a business, which would make it easier for a bank to agree to an SBA loan for the rest.

Dipping into his 401k, however, meant incurring $100,000 in penalties and tax payments. His choices were take the huge hit or

not do the deal. Then he recalled meeting Todd Grill, president of Nexus Direct

IRA a few years earlier at a networking event. He remembered talk-ing to him about alternative business financing using involving 401ks and decided to call.

For the past 10 years, Todd has helped clients harness their indi-vidual 401k accounts as an alternative way to finance starting, buy-ing or expanding their business. His company, Nexus Direct IRA, is one of the few companies administrating 401ks this way.

As Todd reviewed the situation with Carl, he confirmed that tak-ing a direct disbursement (withdrawal) from the $300,000 in his 401k would have been disastrous with the 10 percent penalty and a tax hit of 35 percent to 40 percent. It would have been a loss of $100,000.

What Nexus Direct IRA does is set up individual 401k plans and administers them. Todd, a certified IRA and 401k retirement plan

Nexus Direct IRAHelping an Entrepreneur Finance a New Business with His

Individual 401k When All Else Had Failed.

The Bottle Shop owner Carl Callestrom and Nexus Direct IRA president Todd Grill.

RESOURCE HERO

Reprinted with Permission Courtesy of New Business Minnesota ©2013 – www.newbizminn.com

administrator, is affiliated with a custodial bank that nominates him as their IRA 401k administrator for these types of plans.

The whole process is highly technical and crosses several disci-plines. First off, Carl set up an individual 401k with Nexus Direct IRA, which invests the funds at Carl’s direction. Then Carl’s attorney set up his business as a C-corporation with him as a shareholder.

The next step was to invest the money from the 401k in the C-corp. Carl’s retirement fund was now an investor and a shareholder in the business. With that invested cash in a bank account as a down payment, Carl’s bank was ready to provide the SBA loan to buy the business.

There are a lot of moving parts to this, says Todd. Your 401k owns the business. Any profit from the company after expenses, including paying himself, goes back into the 401k plan to pay back the invest-ment. Any profits after the 401k investment is paid off will accrue as pre-tax dollars, just like any 401k. Taxes will be paid when funds are withdrawn for non-business purposes.

At sometime in the future when Carl sells his business, the pro-ceeds go to the 401k and won’t be taxed until it is withdrawn down the road.

“Whenever I tell people about this, they can’t believe it’s possible. I hear it all the time,” says Todd.

To make this all happen, takes a lot of education and coordina-tion with all his clients’ trusted business advisors. The accountant has to be on board and understand the process. Doing the business formation properly requires the client’s attorney being brought in.

“We don’t act as business advisors,” says Todd. “We are just the administrators. We sponsor the plan and facilitate the investment.”

As intriguing as the concept is, Todd is always quick to remind entrepreneurs that they are putting their retirement funds at risk. It is not for everybody, especially the faint of heart or the unprepared. He advises them to put every penny of the 401k into the business to help ensure they can survive for the first two or three years. If they don’t, going to the bank for additional money isn’t an option.

Here is the downside of funding your business with a 401k: You put your retirement at risk. Todd says that anyone considering this option needs to be deadly serious about what they are doing and have a rock-solid business plan. In his estimation, Carl was ready.

Not everyone shared that opinion, Carl said. Some thought he was nuts: A former money manager running a liquor store? Some of his business advisors urged him to drop the idea. He took their concerns to heart, but treated them as challenges that needed to be overcome.

“A lot of eyebrows were raised when I told people what I was go-ing to do with my 401k,” says Carl. “But, hey, you could wake up tomorrow and your 401k could be cut in half. This way, I control it. I see the big picture and this is going to work. This will be my retirement.”

With his retirement fund at risk, Carl was especially thorough in his due diligence. The Bottle Shop liquor store at 150 Second Ave.

So. in Minneapolis met his key requirements. “I always wanted to keep it simple,” Carl says. “A liquor store isn’t

rocket science. You get your inventory in and then you get it out. It’s virtually recession proof. And I wanted an existing business.”

He reviewed the tax returns of the previous owner and looked at the trends, from sales volume to the number of customers coming into the store.

“The store had been run by absentee owners who never did any marketing, inventory control. Nothing proactive,” says Carl. “The place looked run down. Anything I did would be a positive. I feel I bought the ugliest house on an upscale block.”

The location was wonderful. It is attached to the Churchill Apart-ments, near the Carlyle luxury condos and the Depot Renaissance Minneapolis Hotel. The nearest competitor is further downtown or across the river.

On paper it all looked great, he says. The biggest worry was that he was missing something. Once he overcame the financing hurdle, the business was ready to go. He bought The Bottle Shop in October 2012.

So far, it’s everything he dreamed. The business is profitable. He’s having fun interacting with customers, planning new marketing ef-forts, reaching out to clients in the neighborhood, even doing some remodeling to freshen the place up.

“Todd is phenomenal,” says Carl. “I couldn’t have bought the store without his help.” He says that Todd was more than just a fund manager. He was a sounding board and an ally who went above the call of duty to spend the time needed to explain the process to Carl’s business advisors. Carl’s accountant and attorney were not familiar with the details and needed to be brought up to speed. His banker had never even heard of using a 401k this way.

“This has been the most efficient and best use of my retirement income,” says Carl. “My 401k is now performing better than before.”

NBM

Todd Grill is president of Nexus Direct IRA, an independent self directed administrator and record keeper for IRA’s and Individual 401k plans. They facilitate and administrate all of the legal investments inside retirement plans and provide the record keeping and reporting required by the IRS. He has more than 10 years experience helping entrepreneurs finance their businesses with individual, self-directed IRA/401k plans. He can be reached at (763) 559-5363 or tgrill@nexusdirectira.com. www.nexusdirectira.com.

Carl Callerstrom is the proud owner of The Bottle House of Minneapolis at 150 Second Ave. So., which features 400 kinds of wine, 30 different craft beers, good selection of spirits. He can be reached at (952) 240-5979.

Nexus Direct IRA Continued from Previous Page

New Business Minnesota

Dr. Robert Casper, DDS, knew his practice needed market-ing help. Competition was tougher than ever, the recession layoffs, along with insurance changes, had cut into his client

base and his online presence was the digital equivalent of shag car-peting: nice but dated.

He had been highly successful using traditional marketing strate-gies, but with the arrival of social media and internet search strate-gies, it was challenging to keep up with changing marketing tech-niques.

Fortunately, he says, he knew Brian Karoff, co-founder of Katalis-tik, a digital marketing agency. They met through a family member and hit it off. Because of that relationship, Bob knew he would have someone who could translate all the technical jargon for him and help him understand SEO, MMS, SMS, geofencing, Twitter, Linke-din, Facebook and all the rest.

“I like to deal with people I know, where there is some connec-tion,” says Bob. “Character and reputation are important to me in business. And I knew Brian was the one I wanted to work with on this.

“He would bend over backwards explaining things to me to make sure I understood. Fortunately, he’s very personable and easy to be around,” says Bob.

Bob’s associate, Dr. Brandon Helgeson, is from the digital gen-eration and actually is a user of social media and smartphones. He served as the point-man with Katalistik so things could go smoothly.

For 37 years, Bob has been practicing dentistry in Eagan. For much of that time he had enough business that marketing wasn’t that important. Eagan was a growing suburb with some major cor-porations that always seemed to be bringing in new employees. The apartments then being built provided a rotating supply of new fac-es that needed dental care. And there weren’t many other dentists around.

Katalistik LLCUsing the Power of Digital Marketing to Dramatically Raise the Profile of an

Eagan Dental Practice.Growing Small Business

Denmark Dental dentists Drs. Brandon Helgeson (left), Bob Casper (far right) and Katalistik LLC co-founder Brian Karoff.

RESOURCE HEROES

Back then his marketing consisted of Yellow Pages, local phone books and some print advertising in the local newspapers. That was about it.

In the last five, however, things changed. Eagan’s growth has lev-eled off. Delta Airlines has closed buildings and laid off employees since the merger with Northwest Airlines. Lockheed Martin, which once had 10,000 employees there, recently closed its operations. Even Blue Cross Blue Shield is laying off.

“We’ve lost hundreds of patients who have moved out or are un-employed,” says Bob.

To make it more challenging to find new patients, there has been a steady influx of new dentists. “We have more dentists than we really need in Eagan and we’re all aiming at the same population,” says Bob. “We have to really compete now.”

When Katalistik was finally brought in, they had to start from scratch. Their online presence consisted of a simple brochure website built by a former employee. It wasn’t generating the new patient flow they were looking for and they were spending money on old strate-gies that weren’t working any more.

“Our strategy is to sit down with the client and conduct discovery and strategy sessions during one or two meetings to create a plan and to identify a client’s keywords,” says Brian.

That’s when Katalistik begins its research. The keywords are pro-cessed through their proprietary software to identify what the traffic patterns are if someone searches on, for example, “dentist Eagan.”

Brian says Katalistik’s goal isn’t to just drive traffic to the business, but to get a higher conversion rate that turns clicks into clients.

They look at the entire keyword market, which could include thou-sands of keywords and combinations, to establish a digital footprint. That information can be used to refine messages or to manage pay-per click advertising. For example, by changing the keyword configu-ration, a bank can put more of an emphasis on its auto loans.

The keyword process is the foundation on which Katalistik adds its “Accelerated Digital Marketing” product, which employs SEO, social media, mobile technology, content management and reputation man-agement strategies.

“You have to go beyond the standard SEO approach,” Brian says, “because social media platforms like Facebook, Linkedin Twitter and Youtube all have their own internal search capabilities and we want to be able to harness that as well.”

Beyond describing you and your business, keywords need to be strategic and zero in on the most competitive word, the ones most likely to be used by your prospects and the once most sought after by your competition.

“We tend to be extremely aggressive, says Brian.”We come in with the attitude that we want the client to win.”

To strengthen the business marketing, Katalistik did a brand make-over to provide better clarity in their messaging, says Brian. They had been “Denmark Family Dental Center,” which was shortened to just “Denmark Dental.” That made for a more memorable URL for the website and email.

From there, Katalistik redesigned the web site, built a digital mar-keting infrastructure that can harness all the social media options, and they worked closely with Denmark Dental in managing their content in a way that helps them become influencers.

Brian says that business owners he meets with often have trouble

with digital marketing. They might do Twitter and ignore the rest. To address that, Katalistik created a 247-step process called “Local Checkmate,” which helps boost results for local searches on both desktop and mobile devices. The end result is a lot more visibility, and being “found” more across all channels like Google and Google + Yelp, Bing, etc.

Denmark Dental is still a work in progress. But the success to date has been impressive, says Bob. In the first 90 days, metrics used to track marketing showed a 390 percent improvement. The actual number of new patients from digital marketing sources have been up more than 100 percent on a monthly basis since they started last fall.

It was thrilling to see the results so clearly in the data, says Bob. The data also revealed an internal problem. The staff wasn’t doing much with the calls beyond answering questions about services and fees.

“I could see we were missing opportunities to convert them into clients,” says Bob. “We should have been leading them to make an appointment for a free consultation or something.”

Brian set them up with practice calls to help train the staff on han-dle the new prospects and improve the conversion rate.

“Having metrics, to be able to really measure things like calls, con-versions, to have something you can really hang your hat on has been fantastic,” says Bob. “That was one benefit I didn’t expect.”

Up next for Denmark Dental is more active blogging, adding vid-eos, mobile marketing and working with Katalistik on a Reputation Management strategy to make sure patient feedback was being prop-erly addressed.

The digital world keeps changing and being current is critical. Many businesses are just waking up to the mobile technology reality, says Brian.

“There are now more people on the planet using mobile devises than using PCs right now,” says Brian. Things change and old assump-tions may no longer be true. Email isn’t what it used to be with only 14 percent of an email blast actually being opened. By contrast, texting via SMS or MSM will be read by 90-plus percent of the recipients.

“You need to take advantage of all these technologies and under-stand that they can be used in conjunction with each other,” says Brian.

As for Bob, he is forging ahead with his comprehensive digital plan. “You can’t just be a dentist anymore, but that’s what I am,” he says. “I’m glad to have Brandon and Katalistik handle the digital mar-keting side of things.”

NBM

Brian Karoff is co-founder of Katalistik, a digital marketing com-pany that provides solutions that strategically develops campaigns that employ Social Media Optimization, Mobile Marketing, Local Digital Marketing, Search Engine Marketing (Paid), SEO (Search En-gine Optimization) or other forms of interactive media. He can be reached at (612) 208-6234 or bkaroff@katalistik.com or www.katal-istik.com.

Drs. Robert Casper and Brandon Helgeson own Denmark Dental, which provides family dentistry services in and around Eagan. They can be reached at (651) 485-0881. www.denmarkdental.com

Katalistik LLC Continued from Previous Page