In a paradox of needing money to make money, some turn to a venture capital company for that financial jump-start.

Located in the Dundee neighborhood in Omaha, Neb., Dundee Venture Capital (Dundee VC) works to invest in e-commerce and web service start-ups across the country. Mark Hasebroock started the company in 2011, and uses capital to help these early-stage companies get off the ground.

“We look for innovative ideas and passionate people that challenge the status quo and solve a problem,” Hasebroock said.

By narrowing the prospective investments to e-commerce and Internet service companies, Hasebroock can stay focused on an area that is familiar to him. He has a wide array of business experience under his belt, most recently in co-founding several online companies.

“I think it is a great time to start these types of businesses and don’t see an end to the creativity and demand for new ideas,” Hasebroock said. “Every day there is a new opportunity to create a unique business. I like niches that get ignored by the market.”

To what niches is Dundee VC paying attention? Hasebroock looks for entrepreneurs who believe strongly in their business and “bet it all that this business is the next big thing.” People who are “communicators that can tell the story over and over” and “visionaries that see a problem, recognize they can solve it and lead the market, quickly” are also good fits with Dundee VC.

“We ask four pretty straightforward questions,” Hasebroock said. “What’s the problem you are solving? What is the market opportunity? Why will you and your team win? Will you quit your job to make it happen?

“The good fits stand out. The poor fits as well.”

Dundee VC invests up to $500,000 in a start-up company, but it provides more than just capital to the entrepreneurs taken under its wing. Business owners can tap into valuable resources and knowledge from Hasebroock’s experiences.

Mark Hasebroock, Dundee Venture Capital

“We can help steer and advise to avoid many of the pitfalls they may face. Some may be obvious and others may not,” Hasebroock said. “Establishing solid reporting and analysis, for example, will help build a meaningful dashboard so the founders can really determine if they are succeeding or failing. Sometimes this is ignored in the early days.”

How hands-on Dundee VC is with a company depends greatly on that start-up’s situation. Though Hasebroock prefers not to “invest and then check in each quarter,” his level of involvement with a start-up varies based on what stage the business is in when Dundee VC steps in to help with financing.

This is true with the companies in which Dundee VC is currently investing. With Graphic.ly, a website devoted to authors and fans of comic books and graphic novels, Hasebroock works on the company’s board, but is mostly in the background for the company’s 12-month plan. The entrepreneurs are more experienced, leaving Hasebroock to be in a “what-if, high-level type role.”

A second company, MindMixer, serves as a tool for community participation and communication. The website is often used by town leaders and elected officials.

Hasebroock explained that Dundee VC started helping MindMixer in the beginning stages of the business. He helped with the company’s direction for the first six months, guiding the business owners so they did not take on too much too soon.

“The founders were very energetic, smart and passionate but had not started a business before,” Hasebroock said. “I provide daily involvement with them as it is a high-growth business that can also grow out of control if we all don’t manage the day-to-day expectations with the six- and 12-month plan.”

Dundee VC also invests in Tripleseat, a resource available to managers and owners of restaurants, banquet halls and other places. The website helps manage sales and event information.

Before Dundee VC, Hasebroock worked in a broad range of jobs. While in college at the University of Nebraska-Lincoln, he sold moccasins for spring break money, and later he had a small business selling popcorn to grocery stores. He also worked in commercial and investment banking. Hasebroock has co-founded several online companies, giftcertificates.com and hayneedle.

These years of experience led Hasebroock to the idea of starting Dundee VC.

“I always thought if I could be in a position to help provide the start-up/seed capital and advice to start-ups then I would love to do that. It seems to be a void in this area for this niche,” Hasebroock said. “I was a commercial banker loaning money, investment banker investing and raising money, (and) founder of start-ups. Bringing it full circle felt right.”

Dundee VC holds a unique stance in its focus on e-commerce and Internet service companies, and in its “lack of red tape and bureaucracy,” Hasebroock said. Over the next five years, he has a goal of helping finance 10 companies.

In recent years, Hasebroock has seen certain trends within the realm of Internet companies. The price of the technology needed to start and maintain a business is about one-third less than what it was three years ago. The time it takes for a business owner to get his or her business going has also decreased.

“An idea can be hatched, tested and live in a matter of days. The mobile trend will only continue to grow and any e-commerce merchant that does not have a shoppable mobile site will be lost,” Hasebroock said.

From Hasebroock’s perspective, it is an ideal time and place for entrepreneurs to start their businesses. Often the biggest obstacle they face is fear.

Hasebroock reminds entrepreneurs that they are not alone.

“Odds are there are a few folks that have experienced and gone through what any other start-up is about to go through,” Hasebroock said. “Don’t let fear keep you from your dream. It can actually be a great motivator.”

“While we may invest, we also want to make sure founders know there is also advice and support,” Hasebroock said of Dundee VC. “We’ve been there and know what you are going through. And we think we can help create a road map for you to succeed.”

Cultivation removes weeds between crop rows but not within the rows. He could hire a crew for hand weeding, but that would be prohibitively expensive for row crops such as corn, soybean and sunflower. The weeds keep coming.

But now, three men may have found a solution.

University of Nebraska-Lincoln professor of mechanical and materials engineering George Gogos; professor of agronomy and weed sciences Stevan Knezevic; and graduate student of mechanical and materials engineering Chris Bruening, are the founders of Agricultural Flaming Innovations (AFI). With research on weed flaming since the summer of 2007, AFI is the leading research company in this field.

AFI’s flaming equipment will be used primarily in organic farming, which according to U.S. data increased by 350 percent from 1995 to 2005. In the United States, only 0.6 percent of the farmland is organic, compared to 5 to 6 percent in Europe. However, Gogos believes the U.S. will experience an increase in organic farming in coming years, thus making his work more important.

AFI testing

“You have to design a piece of equipment that treats the weeds but saves your crop,” Gogos said. “In that design, we get a lot of info from agronomists as far as the lifetime of weeds and crops and the size of weeds and crops. All these things we take into consideration as we design the equipment.”

AFI’s systems attack the weeds in either four or eight rows of crops at once. An even distribution of propane gas must be obtained for consistent weed control. Devices also have shields, so they are energy efficient and windy conditions don’t affect the weed control.

While weed flaming sounds like a dangerous procedure, the weeds actually experience a rather gentle death. When machinery passes over weeds, flaming destroys the cell membranes and water leaks out. Eventually, the weeds lose enough water and die over the next few days. In this process, neither weeds nor crops actually ignite.

“For AFI, the big thing it has going for it is it’s backed by a collaboration between engineers and weed scientists,” Bruening said. “Engineers help with the design and scientists help with how to use it correctly.”

The Propane Education and Research Council (PERC) funded the weed flaming research at UNL at approximately $1 million. A $250,000 grant from the U.S. Department of Agriculture (USDA) has also helped with the research. The University of Nebraska Foundation owns a percentage of AFI. The Nebraska Engineering Research Fund (NERF) has invested $50,000 to help the start-up.

Gogos said only one other company does flaming for row crops. However, this company has primitive equipment, according to Gogos. Several businesses make handheld units to eliminate weeds in gardens and driveways.

AFI’s devices are tested in the Haskell Agricultural Laboratory, a UNL Extension lab in Concord. The company also uses a mechanical engineering lab on UNL’s campus.

“Once we build things, we move them to Concord for the summer,” Gogos said. “At this time of year (January), we decide how many plots of corn, soybean and sunflower we will need. During the summer, students spend most of the time up in the fields.”

In October, crops are harvested. The yield of the crop is the main criterion for adjustments at AFI. Gogos said he wants AFI to continue to be a research and development business. He doesn’t want to turn into a manufacturing company.

Dr. Gogos (right) talking to the team during field testing

While researching and designing this major agricultural implement is part of Gogos’ career and Bruening’s schooling, they also have personal connections to what they do. Gogos said his family consumes organic food and he’s glad to be researching something he truly believes in. Bruening grew up on a Nebraska farm and knows the difficulties that come along with the agricultural industry.

“Working with these organic guys, you see them struggling with their weed control,” Bruening said. “We’re developing technology that will definitely help them out.”

Marvin Jaques, senior technology agent at NUtech Ventures, said he is impressed by the extensive work AFI has already completed.

“We enjoy working with Dr. Gogos and Chris and that we’re pleased to see inventions from the UNL College of Engineering help organic farmers with improved and more energy efficient weed control,” Jaques said.

AFI is currently looking for additional investors to commercialize the four-row and eight-row units. In the future, AFI hopes to create 12-row, 16-row and even larger devices. These designs will need additional testing and development to give the many torches uniform flames, Gogos said. The company also hopes to design and manufacture devices to allow weed control on railroad tracks.

Gogos offered valuable advice to new entrepreneurs in any field. He thinks it’s important to have a specialized concept and to avoid striving for perfection.

“Focus to a specific design and move on with commercializing it,” Gogos said. “Don’t wait for the perfect product; you’ll never get it. You have to define a goal, a partial solution.”

Bruening agreed, saying it’s vital to get a product out the door and selling. By adding an extra feature to an already substantial product, many start-ups lose focus, he claimed.

“I grew up in Waverly,” Bartlett said. “I went to UNL and just basically bolted.”

After graduating from the University of Nebraska-Lincoln, she briefly touched down in San Diego before settling in Los Angeles. There, the small-town girl with big-city dreams found a job as an account coordinator at a small but growing advertising agency and began an unlikely love affair — with numbers – that would shape the rest of her life.

“My original background was in advertising and marketing; then I went into direct marketing and through that ended up working on an account that started collecting data,” Bartlett said. “I really fell in love with the data.”

Bartlett would eventually work her way up to vice president of operations before partnering with others to found M/S Database Marketing in 1991. The company would prove to be wildly successful at building databases for major brands like GM, Disney and HP to help them identify their most profitable customers.

M/S Database Marketing won a number of awards before Bartlett and her partners sold the company in 1999 after eight years of success. She stayed on at M/S, which changed its name to SourceLink, first as chief information officer and then as CEO from 2003 to 2005. After that, she moved on, first doing security audits and then eventually database marketing consulting in 2007.

Bartlett hadn’t completely severed her ties with the Cornhusker State during her California career – she still returned two or three times a year to visit family. And it was during one of those visits in 2007 that she ran into her old college flame in the Lincoln airport. Sparks flew, and after a whirlwind eight-month romance which led to marriage, Bartlett was moving back to Nebraska.

So Bartlett settled down for the second time in her life, this time in Lincoln, where she lived a semi-retired life. “Semi-retired” because although she’d closed the books on SourceLink, she didn’t slow down much. Bartlett was still subcontracting out to a large marketing company and ran Bartlett Business Growth Solutions with her new husband.

But living in the city with the nation’s lowest unemployment rate and a booming economy made it tough for Bartlett to stay even semi-retired for long.

“Apps came along and I’ve always liked new technology,” Bartlett said. “Then somebody came to me and knew my background and said, ‘Hey, do you think it’s possible we could put together an app to collect data?””

That somebody was Craig Lutz-Priefert. He had met Bartlett at a Lincoln Chamber of Commerce event and was almost immediately impressed. And just like that, Bartlett was back in the data game.

“We got to talking about database marketing and I mentioned this book that I was reading by this guy named Arthur Hughes,” Priefert said. “And she said, ‘Oh yeah, Arthur used to consult for my company in Los Angeles.’ And that was when I knew she knew was the real deal.”

Evelyn Bartlett testing WasteFinder

That was also the origin of SectorNow, Bartlett’s newest foray into the world of business. For Bartlett, it’s back to square one again as SectorNow makes its way into the market. It’s a rewarding experience but not an easy one, according to Bartlett.

“Investing our own money to develop an app before we make any money off of it is nail biting at best,” she said. “That part of it is very challenging because you’re just nervous about where the money will come from.”

Currently the new company only has one app on the market, the WasteFinder Green App. SectorNow utilized Bartlett’s data collection experience in designing the app to monitor and analyze a company or government’s waste disposal and recycling and then generate a report that suggests best practices that are more environmentally sound and cost-effective.

SectorNow is developing another app called MySocius which has yet to be released. The app, developed in conjunction with University of Nebraska Medical Center professor of psychology and pediatrics Keith Allen, is designed to help children with autism develop their communication skills.

SectorNow’s focus on “functional” apps like MySocius and Wastefinder was a concious decision. According to Bartlett, the company has intentionally steered clear of the gaming and entertainment market. Instead, SectorNow focuses on developing apps that can have a positive impact on the world.

“I love data and being able to use it with new technology to really see something happen,” Bartlett said. “That’s something that’s really worth doing.

Check back over the next month as we will be highlighting the different programs created this year by the Nebraska Legislature through the Talent and Innovation Initiative.

Entrepreneurs can face many challenges as their businesses gain steam. One of those challenges is actually two-fold: how to find and attract talented employees and how to pay them. This article, part of a series on Nebraska’s Talent and Innovation Initiative, will examine InternNE, an incentive program designed to address this two-fold challenge.

InternNE was created by Legislative Bill 386, introduced by Elm Creek Sen. Lavon Heidemann. The law became effective in June and created a program administered by the Department of Economic Development to cover some of the costs of an internship, as well as provide a portal for employers and students to find one another.

Employers and students can register at InternNE.com, a site hosted by careerlink.com, after which they can look for either internship opportunities or potential interns, depending on the perspective.

Also at the site, employers can review eligibility documents and guidelines to find out whether their business qualifies them to receive grant funding to cover a portion of the cost of the internship.

What does all this mean for cash-poor startups? Opportunity.

Consider AgilX, a Lincoln-based software development company. Founded by Jake McElroy and Dustin Clonch, AgilX is in the favorable position of having boot-strapped itself into profitability. While this keeps the company’s corporate equity safe at home, it also leaves much to be desired in terms of paying employees.

McElroy and Clonch learned about InternNE and applied after having incorporated AgilX in March. They were approved to have two internships partially reimbursed under the new program. This perfectly matched their corporate goals and culture.

“We’re not just about selling software, we’re passionate about keeping high-tech jobs in Nebraska,” Clonch said.

The two internship positions have come at an opportune time in the lifespan of AgilX. The company’s goal was to maintain as much internal equity as possible without releasing liability to angel investors.

However, now AgilX is poised to ramp up its productivity, a difficult task without employees – and employees are difficult to bring on without capital. InternNE is making it possible, through subsidies, to bring on those employees below market rates, helping AgilX make its ramp-up easier, and allowing the company to bring on talented interns.

And it isn’t just software companies that are able to take advantage of this new program. “About 22 percent of the positions that have been approved fall within marketing, market research or sales and marketing fields; other highly requested internships are within the finance/accounting, IT/computer technology and engineering and architecture fields,” said Allison Hatch, business development consultant at the Department of Economic Development.

“About 60 percent of the businesses approved for the program are located in the Lincoln and Omaha area, and nearly 45 percent of the filled internship positions are located in Lincoln,” Hatch said.

So what does this mean for you, as an entrepreneur? If you’re looking to expand your staff, and want to utilize this program, there may be grant funding available to your company to reduce the cost of an internship.

Here’s what you do:

• Go to InternNE.com and register yourself as an employer.
• Also available on the InternNE website is the “Employer” section, which contains the necessary documents to be filled out and filed with the state:
• InternNE application form.
• Program guidelines.
• Request for reimbursement form.
• Student verification and evaluation forms.
• Documentation for the Nebraska State Treasurer and the IRS.

After having completed the requisite paperwork and getting approved, companies are then able to post jobs, recruit interns and receive reimbursement for their internships.

For more information on this program, contact Allison Hatch at the Department of Economic Development. Hatch is in charge of bringing employers on board and can be reached at 402-471-3368.

Watch for additional articles over the next month on our new series about franchising.

It’s said that imitation is the sincerest form of flattery. If that’s true, then Jeff Johnson and the rest of the Franchise Research Institution help facilitate the metaphorical fan clubs for dozens of successful businesses. If you’re looking to jump into the business world wants the security of treading a tried and proven trail instead of blazing your own, Johnson is your man.

“If you’re a great innovator, franchising may not be for you — we need great duplicators, folks that want to get into business and duplicate what works,” Johnson said. “You need to be a duplicator of the brand, you answer to the parent company. If you get a McDonald’s franchise, for example, you don’t get to start serving hotdogs and popcorn.”

Founded by Johnson in 2002, the Franchise Research Institute studies the concept of franchising from all angles, assessing weaknesses and making note of strengths. Johnson is uniquely suited to the task. After working as a multi-unit franchisee and area developer for more than 17 years, the franchise Johnson helped grow from 200 to 750 units combusted after going public. Fortunately, some good came from the loss. Johnson discovered he’d acquired a sort of reverse engineering acumen that only comes from seeing a franchise’s structural foundation laid bare – a knowledge of what it takes to keep a franchise anchored and solid.

Jeff Johnson, founder Franchise Research Institute

The FRI’s top priority today is promoting strong franchise relationships by maintaining a line of communication between franchisee and franchisor. Its primary means of doing this is its FranSurvey service, a field-tested Internet survey infrastructure that allows franchisors to hear their franchisees’ concerns and provide the best possible guidance to see them through.

Given his extensive background on the topic, Johnson had plenty to say to those hoping to become part of a franchise. Individuals looking to get into the franchise game should be aware, Johnson noted, of the trend toward smaller franchises cropping up in greater numbers during the current economic duress.

“The most popular (franchise opportunities) right now are the smaller investments, the ones people can run from their homes instead of investing in buying land or finding long-term space,” Johnson said. “That doesn’t mean the more expensive franchises aren’t good deals; that doesn’t mean they’re not being done. It’s just harder overall for people find ways to finance them.”

Regardless of start-up costs, however, Johnson said potential franchisees should first narrow their search by gauging two key factors of each franchise: franchisee satisfaction and franchisee success.

“What to look for in a franchise, that’s a simple question with a complicated answer, (and) part of the reason the institute was founded,” Johnson said. “But look for satisfaction and success. If you see that the existing franchises work well for the people that run them – and that they’re happy running them — there’s a greater chance they’ll work for you.”

But Liz Renner, owner of Only10Pounds.com, stresses the importance of losing small amounts of weight as well.

“’The Biggest Loser’ is so dramatic and it makes great TV,” Renner said. “I thought maybe a website might be a better platform for a smaller weight loss goal — especially a site that concentrated on local resources.”

Renner launched Only10Pounds.com in June 2011, with the help of web designer and developer Eric Downs and communications strategists Emspace Group. Renner said Emspace Group offered a great deal of advice on communications and public relations strategy, while Downs perfected branding and web development.

“Eric brought an innovative sense about where the brand and the concept could go,” Renner said. “He was able to help visualize something that was fairly unique and still a very raw concept.”

The website is based on a revenue model that Renner described as instinctual. Each player pays a small registration fee and a set amount (for the communal pot) before each round of play. Because players provide the prize money, there is an incentive to have friends and family sign up. The more people playing, the bigger the prize.

“I recognized what a powerful motivator money is, especially when it is your own money on the line,” Renner said. “At that point, the idea transformed from a blog into a 21^st-century version of the office pool.”

Businesses with a focus or interest in weight loss, health and wellness host the weigh-ins and weigh-outs. In exchange for a membership fee, these businesses receive advertising on Only10Pounds.com and the Only 10 Pounds Facebook page. They also get foot traffic in their stores or offices on the days of the weigh-ins.

While Renner is currently refining this revenue model, she is also working on enhancements to the website. In the future, Renner plans to expand the blog portion of Only 10 Pounds. It will become the go-to place for weight loss ideas, she said.

She also hopes to offer in-house competitions for organizations, businesses and groups by enhancing the registration functionality on the website.

Because Renner is from Omaha, the website is currently targeted at Omaha residents and people in the surrounding areas. She hopes to eventually expand to cities across the country.

“Long-term, I see Only 10 Pounds as a very scalable concept ­­– like Groupon or Craig’s List,” Renner said. “I plan to take it national.”

With three important points, Renner described the mission of Only 10 Pounds:

1. The best business deal is one where everyone at the table walks away feeling they’ve won.

2. Nothing motivates more than having “skin in the game.”

3. Whenever possible, I want to support local business.

“There are so many ways to enter or become engaged with a website or product,” Renner said. “You really have to think about how to keep that experience seamless and consistent.”

Renner thinks a project like this was overdue for a lot of dieters. Renner herself has tried every diet, crazy workout, boot camp and Zumba. But through Only 10 Pounds, Renner found something that truly worked.

She has a genuine interest for everyone who signs up to succeed. The weight loss is about more than looking good; it’s a benefit to peoples’ health and quality of life, Renner said.

“I am humbled by people who successfully lose weight,” Renner said, “whether it’s 10 or 100 pounds.”

Entrepreneurs with a business idea or business owners who want to grow — especially those struggling to find funding — should circle Jan. 11, 2012 on their calendars. That’s the day Community Development Resources will host a free lending information meeting at Southeast Community College in Lincoln.

Deb Payne, manager of Alice’s Integrity Loan Fund at CDR, said the meeting will provide vital information that business owners need to get started right and head toward profitability, including information on how to qualify for loans. The meeting is at 7 p.m. in the SCC Continuing Education Center Auditorium. Representatives from the following organizations will be on hand to answer questions:

• Community Development Resources
• Alice’s Integrity Loan Fund
• SCORE
• Nebraska Business Development Center
• Entrepreneurship Center at the University of Nebraska–Lincoln
• Southeast Community College Entrepreneurship Center

“We are particularly encouraging women and minority business owners to attend,” Payne said. “We are wanting to reach those business owners often turned away by banks.”

Payne said the meeting is a great way to start the new year and will provide valuable information about many funding options business owners might not be aware of. CDR specializes in serving small start-up or emerging businesses in Nebraska with several types of loan programs and technical assistance.

Alice’s Integrity Loan Fund serves women and minorities in Lancaster County who have not been able to obtain traditional financing. The loans do not require collateral, but do require borrowers to participate in a business mentoring program.

To RSVP for the free meeting, please email Deb Payne or Dorris Miller. Questions about the meeting or lending program should be directed to Payne at 402-436-2435.

For starters, customer investors tend to be more engaged, according to Isoft Data Systems CEO and founder Matthew Wegener. Wegener’s company has several customer investors, or “investomers” as they’re sometimes called. According to Wegener, his investomers’ attachment to the company leads to networking and sales opportunities for Isoft.

“It makes it fun for them to talk to other people about your business and your software just because they have a sense of pride in ownership,” Wegener said. “It opened a lot of doors for us.”

In addition to the money and the sales bump that investomers can provide, they offer value to entrepreneurs in other ways as well. For example, the product feedback that investomers give can be one of the most beneficial parts of investomer participation.

“Our investomer brought industry-specific insight to our product that made it extremely effective at serving their business needs,” Lyconic co-founder Aron Filbert said. ”Our combined success eventually brought us relative income stability and huge growth potential through their franchising model.”

Since investomers are actually using the product they’re investing in on a day-to-day basis, their feedback is honest and comes often. Where a dissatisfied customer might just shift products or services, a customer who is invested in the company tends to be more loyal to the brand and would rather see it change to suit their needs. This push toward serving the customer can not only make a business more responsive to its customers’ needs, but can also lead to it being more in touch with its marketplace in general.

But as with any form of investment, using investomers is a thing to be done with care. Because of their stake in the company and their direct relationship with the product, investomers can also be a major headache.

An investomer’s ability to use leverage to influence direction of the company and tailor the product to suit his or her needs as a customer can be a good thing, since what is good for one customer can often be good for another – but only up to a point.  

If an investomer requires exclusivity of a product that is marketable to a broader spectrum of customers, for example, the investomer’s needs can produce a conflict of interest that can poison the investor-entrepreneur relationship and put a company in peril.

One solution to the exclusivity problem is simply to charge for it. If exclusivity is going to load a big opportunity cost onto an entrepreneur, then perhaps the investomer should pay a premium.

“We do not do anything exclusive for customers unless they pay us time and materials, handsomely, for doing something that’s specific to them that we won’t use for the rest of the industry,” Wegener said.

The flip side of this coin is when investomer influence drives a company to find new marketplaces and new applications for its products. This was the case for Isoft when it adapted its data management system for used truck parts to managing truck sales, new parts, re-manufacturing and repair work at the behest of one of its investomers.

“They were a fantastic partner,” Wegener said. “We developed a whole new product with them.”

While exclusivity can be made to pay – and in certain situations, there is no choice but to give up a large stake of the company in order to save or even start the business – these things should generally be avoided unless there is ample justification to the contrary.

Clear right and wrong answers are hard to come by in business, and you won’t find any here as to whether or not you should use investomers. On one hand, the brand loyalty, product feedback and increased customer referrals are attractive benefits to using investomers. But on the other hand, entrepreneurs need to be careful about letting investomers use their leverage to cajole them into putting the needs of the investomer before the needs of the business.

Every entrepreneur’s situation is different, and in the final analysis it comes down to knowing what is right for your business. In the right situation, using investomers can be both rewarding and profitable.

Roundscapes CEO Christopher Kingsley can attest to that. His company’s relationship with its investomer, Landscapes Unlimited, has done everything from improve his company’s workplace culture to providing Roundscapes’ with a much larger and more diverse business pool than it would have ever had without the investomer.

“Without Landscapes Unlimited as both an investor and a client we would have failed years ago,” Kingsley said. “Probably our three biggest clients that we have now ultimately came out of work that we were doing for our investor’s company.”

Check back over the next month as we will be highlighting the different programs created this year by the Nebraska Legislature through the Talent and Innovation Initiative.

Being an entrepreneur – or being involved in any capacity with a start-up — can be quite the challenge, yet successful entrepreneurs provide reward not only for themselves, but state economies are also spurred to new heights by these entrepreneurial successes.

With this in mind, the Nebraska state government has created and is now implementing a new set of government incentives for investment in businesses (start-ups and others) in the form of the Talent and Innovation Initiative, or TI2.  The goal is to spur investment in start-up businesses and to also grow existing businesses.

Historically, incentives for business growth in Nebraska were dominated by the Nebraska Advantage Act, a comprehensive set of incentives for new and existing businesses, as well as the Employment and Investment Growth Act. These endeavors, according to the state’s Department of Economic Development website, have provided businesses with partial refunds of sales tax paid on capital investments as well as a tax credit given to businesses based upon their hiring and wage metrics.

But, recognizing that these incentives could be structured in other ways, Nebraska Gov. Dave Heineman and leaders in the Legislature worked to pass a new round of government incentives in the last legislative session.

“Our vision for Nebraska’s economic future is for our graduates and young professionals to have access to high-quality, high-skill careers with dynamic companies doing business in Nebraska,” Heineman said in an Oct. 3 press release. “The Talent and Innovation Initiative provides tools that will help build Nebraska’s innovation economy.”

In January, Heineman, together with the Department of Economic Development and the Legislature, crafted economic development gold in the form of legislative bills that, in part, would later become known as the Talent and Innovation Initiative – thus named for the section of an economic study released the previous fall. Other significant legislation related to economic development included:

• LB 345: The Economic Gardening Technical Assistance Act. This bill laid the groundwork for technical assistance and a portion of funding to grow the companies already in Nebraska.

“The Nebraska economic gardening program is designed to ramp up small businesses across the state,” said Kevin Andersen, program director at the DED. “We (DED) intend to fund a diverse set of business mixes and technical assistance providers to award qualifying businesses the opportunity to explore their respective marketplaces and increase sales.”

This funding closely mirrors that of another program suited to providing loans to qualifying businesses from across the state.

• LB 386: The Nebraska internship bill. This bill provides funding for Nebraska companies to bring on interns currently enrolled at a two- or four-year institution. A portion of the cost of the internship is incurred by the state.

“InternNE, which began June 1, 2011, has more than 100 businesses that are currently participating who are creating more than 300 new internship opportunities across the state. Participating businesses fall within a wide range of industries, from distribution to software development to financial services; though a majority is manufacturing,” said Allison Hatch, development consultant at DED.

• LB 387: Business and Innovation Act. This bill provided for a variety of levels of technical assistance and financial assistance for the transfer of technology into the marketplace for commercialization in different stages. With funding and assistance at multiple levels, this act packs quite a punch.
• LB 388: Sites and Building Development Act. This program allocated resources to the Department of Economic Development for the refurbishing of industrial sites and building across the state, to make them all the more welcoming to potential new companies.
• LB 389: Angel investment tax credit. This measure provided generous tax credits for those making substantial investments in start-up companies.

Another component of LB 389 is a “sidecar fund” geared toward matching and accelerating private investment, administered by Invest Nebraska.

Given that these incentives are packed with different opportunities, there are many details to cover in soon-to-come articles detailing how entrepreneurs can help government incentives become functioning and contributing members of their successful entrepreneurial family. As always, check back at Nebraska Entrepreneur to read more about these helpful new resources.

Watch for additional articles over the next month on our new series about franchising.

When Don and Linda Eckles opened the first Scooter’s Coffeehouse in 1998 in Bellevue, Neb., they weren’t just offering specialty coffee and warm service to their drive-thru customers. They were establishing a brand that the company would later build upon to create a franchise.

Over the next several years, the Eckleses opened additional locations in the Omaha area. In 2001, the company made the move to franchise the business. Scooter’s, owned by Omaha-based Boundless Enterprises, currently has more than 90 stores in seven states and continues to grow.

Before expanding Scooter’s Coffeehouse into a franchise, the Eckleses worked to develop a successful system. They focused on establishing coffeehouses in good locations, creating quality beverages, maintaining fast service and clean facilities and hiring friendly employees.

Scooter’s can attribute much of its success to the company’s structure. Besides striving to make “better drinks than anyone else,” said Todd Graeve, CFO and director of business development for Scooter’s Coffeehouse and Boundless Enterprises, great customer service and speed of service also play key roles.

By first establishing what Scooter’s Coffeehouse stood for and what the company wanted to achieve, the company had set the groundwork for future stores to build upon. The Scooter’s slogan, “Amazing people, serving amazing drinks, amazingly fast,” serves as a reminder of the company’s values for all franchised stores. When it made the move to franchise, various other parameters also had to be in place to ensure consistency between stores.

One such factor is a Franchise Disclosure Document (FDD). The franchisor is required to furnish this to the prospective franchisee. The FDD contains information on the company’s history, past ownership and costs for opening a franchise. It also includes the franchise agreement and other contracts between the franchisor and franchisee. The franchisor should seek legal guidance when preparing a FDD and presenting it to prospective franchisees.

According to Graeve, before moving to franchise, business owners need to ask themselves if they “have something to offer that is proven and offers potential future franchisees opportunity for success.” For Scooter’s, drive-thru specialty coffee was a successful concept in the Omaha area, he explained.

Franchising is one option for businesses looking to expand and develop a company’s brand quickly. A company can also seek out investors and open several corporately owned stores with the capital.

Graeve said that of the 90 Scooter’s locations, Boundless Enterprises corporately owns 30 stores. Although the majority of its stores are run by franchisees, Scooter’s is not “exclusively franchising,” Graeve explained.

“In addition to offering franchise opportunities regionally and nationally, Scooter’s future expansion plans include the development of more corporately owned stores,” Graeve said.

Some positive aspects that Graeve sees in moving Scooter’s to a franchise model were the development of brand equity and establishment of economies of scale. For company owners, expanding the brand concept to other stores makes the company’s core values and product available to a wider audience. Franchising also offers economies of scale, allowing the franchisor to buy products in larger quantities at a better rate.

Though companies like Scooter’s can have a strong structure in place for the business and its brand, some business owners can still make a mistake when moving to franchising.

“Business people seeking to franchise their concept may not completely understand the responsibility (the company) must absorb when supporting future franchisees,” Graeve said.

168th & Dodge in Omaha - Scooter's Drive-Thru Kiosk

“A company may have a quality concept that is intriguing to prospective franchisees, but if the franchisor does not take the time to develop a support model or clearly understand how it will couple its business concept with excellent support systems, he or she reduces greatly the chance of success and sustainability as a franchised company.”

Franchisors are not only responsible for quality control of service and the product, but also for helping the franchisees be successful business people, Graeve explained. In the same way that a company needs strong presence, quality of product and excellence in service to create a successful business, a support system is critical for the success of a franchisee.

Establishing this may involve hiring support staff within the company to assist the franchisees. For Scooter’s, it included figuring out where franchisees would buy coffee and other supplies. The cost of building this support network, in addition to legal fees associated with drafting the FDD, are some costs a business owner may face when looking to franchise his or her business.

Business owners need to take into consideration how to protect their brand when franchising their company. Scooter’s takes this concept seriously when looking to offer someone a franchise store.

“You must carefully consider who you want to represent your brand,” Graeve said. “You need to set parameters and be selective when awarding a franchise.”

Without considering this, a company could run the risk of having poorly run stores. For Scooter’s, a franchisee needs to have business experience or applicable past career experience, financial strength and business compatibility.

“When making a decision to move forward on franchising your business, know that the people who are awarded a future franchise will have great impact on a company’s long-term chances of success,” Graeve said.

The success of an individual franchise store doesn’t just affect the company. For a franchisee, a well-known brand with an established presence in the market may offer a greater chance of success in running a business. Franchisees working under the brand name expect quality franchisees at other store locations who positively influence the brand name.

Scooter’s works to maintain its business concept and franchisor support system while opening stores with five-star franchisees behind the counters. The combination of these efforts increases the possibility that each store is run well, and in a way that positively reflects the brand under which the franchisees are working.