beginning in 2013, and the health insurance sector beginning in 2014.

The Congressional Budget Ofce, Medicare Actuary and Joint Committee on Taxation each have conrmed the tax on the health insurance sector will be passed along to individuals and small businesses in the form of higher premiums, with the Joint Committee on Taxation estimating an increase of $400 annually. This tax only hits the population that purchases coverage in the fully-insured market where individuals and small businesses purchase their coverage, Kuhlman said. In addition, a 40 percent excise tax will be imposed on employersponsored health premiums that exceed $10,200 for single coverage and $27,500 for family coverage beginning in 2018. Additional tax increases include a 0.9 percent increase in Medicare payroll tax for individuals making over $200,000 and couples making over $250,000. That equals an extra $2,250 per year in taxes for a family earning $500,000. That same demographic also will face a new 3.8 percent tax on investment income, which captures income from interest, dividends, capital gains, and some prots from investments in partnerships and S-corporations. Many small businesses le as individuals so this tax will hit small businesses, Kuhlman said. Possibly most disturbing is that this tax is not adjusted for ination so it will absorb more and more individuals and small businesses like the Alternative Minimum Tax. The most recent numbers I have seen indicate that the tax would hit 53 percent of business income. Neil Trautwein, a vice president for the National Retail Federation, said there also will be a tax on un12 September/October 2012

earned income, such as the appreciation on a house. He said, I think that tax on unearned income is going to surprise a lot of individuals and companies. All of these pay-fors are problematic. It is a very expensive law, and they had to ransack the bin of possible pay-fors in order to make the books balance or try to make the books balance.

It is estimated that nearly 220,000 small businesses employing more than 26 million workers could be subject to the employer mandate.

TAPPING INTO EXCHANGES AND TAX CREDITS

By 2014, states are required to offer insurance exchanges where individuals can purchase coverage from an Individual Exchange and small businesses can purchase coverage from Small Business Health Options Program (SHOP) Exchanges. Individual Exchanges will offer individual tax credits and cost sharing subsidies to defray some of the cost of insurance to consumers who earn between 138 percent and 400 percent of the federal poverty level (in 2012 the federal poverty level for a family of four is $23,050, so 138 percent would be $28,267 while 400 percent would be $92,200). SHOP Exchanges will offer a limited and temporary tax credit and be available to employers with less than 100 employees. Through 2016, SHOP exchanges are restricted to small businesses with no more than 100 employees, but states will have the option of limiting pools to companies with 50 or fewer employees.

Kuhlman said Exchanges have the potential to lower administrative burdens and costs and increase options, but there is much uncertainty about the status of both marketplaces. He said, For example, will states proceed with implementing Exchanges and be set up by 2014? Will the federal government be set up by 2014 in states that do not proceed? What will be the cost of plans offered to individuals and small businesses within the Exchanges? Business owners have been eligible for some relief. Small businesses with fewer than 25 employees who, on average, earn less than $50,000 are eligible for tax credits paying up to 35 percent of their insurance costs from 2010 through 2013. That increases to 50 percent in 2014 but disappears completely in 2016. The Government Accountability Ofce reports that 170,000 businesses have utilized the credit. An NFIB Research Foundation survey and subsequent reports by the non-partisan Government Accountability Ofce conrm that the credit provides a windfall to rms already providing insurance that t into the limited parameters. But it is too complicated and small to incentivize rms to begin offering coverage, Kuhlman said. While businesses continue to gain a better understanding of how the taxes and fees associated with the new law affect then, much uncertainty still remains. Trautwein said, We would hope a future Congress and next administration, whether it is another Obama administration or a Romney administration, will take a serious look to pushing off some of these requirements so businesses can get on with hiring. I

DEF UPDATE DEF Sales on the Rise;

Operators Respond in Numerous Ways
BY MINDY LONG

Demand continues to grow as a direct result of eets replacing their older trucks with the newer engines.
Jon Archard, Loves. Loves is offering bulk DEF at 150 locations in 790 lanes.

he demand for diesel exhaust uid is on the rise and truckstop and travel plaza operators are responding by stocking jugs and offering bulk DEF at the pumps. The acceptance from the public has come. People are willing to use it and buy it, said Matt Middleburger with Mitten Travel Plaza, Oakley, Kan. Monica Baker, a research manager with Integer Research, said North American DEF consumption will increase to 140 million gallons in 2012double 2011s consumption rates. Class 8 truck sales have been steadily increasing, so the growing demand for DEF is expected. All new trucks other than those produced by Navistar Inc. utilize selective catalytic reduction technology to meet 2010 federal engine emission standards and require DEF. Demand continues to grow as a direct result of eets replacing their older trucks with the newer engines, said Jon Archard of Loves Travel Stops & Country Stores. Loves is offering bulk DEF at 150 locations in 790 lanes. From our customers perspective, we must have DEF

available at the pump and at every lane, Archard said. How truckstops offer DEF varies widely across the industry. Chain locations, such as Loves, have committed to having bulk product available at nearly all of their sites while some independent operators are in the process of building a successful jug program. No matter how a location offers DEF, there are several key factors that can make it a success. The Choctaw Nation has 13 cstores, ve of which are truckstops, and offers DEF in a variety of formats. All the locations offer onegallon jugs, the truckstops also have 2.5-gallon containers and one of the truckstops also has an above-ground bulk DEF dispenser that holds 2,000 gallons at one diesel lane. Chuck Tillman, environmental specialist with Choctaw Nation, said, It is cheaper than utilizing an underground tank and setup only took one week. Because DEF is temperature sensitive, the dispenser is enclosed in berglass housing that has a fan for summer use and a heater for winter use.

18

September/October 2012

sue. Their bookkeeper, assistant manager and even several fuel desk employees have been with them since day one. He told Stop Watch he likes to think they enjoy this low turnover because they are doing something right. A recent change was to follow the teachings of Ann Rhoades, JetBlue cofounder and keynote speaker at The NATSO Show 2012. She was spot on. It really changed our focus from that point on, said Bird. When Bird returned from Las Vegas, he bought her book, Built on Values: Creating an Enviable Culture that Outperforms the Competition and has implemented many of her employee retention strategies. For example, they are now proactively recruiting to employees that t their culture, learning from her lesson of if they dont t, they never will. You cant change them.

KEVIN BIRD

MEET

BIG PLANS
Dads 113 Travel Center believes in spending money on renovations. They are continually spending money to renovate and expand, even though they have been open for just over a decade. They originally built the Peterbuilt shop with ve bays and theyve already added three more bays on. Recently theyve added four more fuel islands on the car side and plan to expand their canopies with help from Sinclair. I

evin Bird and his wife have six children of their own and have raised eight kids. All of their children have worked at the location either in Idaho Falls or by looking at locations while on vacation with dad. I drive my family crazy with my constant stops to check out other truckstops and retail businesses, Bird said. Hes very active in the community. In addition to serving with his church in a number of capacities, he has coached baseball and basketball for eight years and served as the local high schools booster club president. He is also on the board of directors on a new truckstop being built in Utah and will be on the Sinclair Gold Truckstop board. He told Stop Watch his favorite part of his job is the freedom it allows him to travel the country. I have a hands-off owner who doesnt work in the industry, which gives me freedom to travel when I want. I love that freedom. Contradictory to that freedom is the one downside of the industry Bird shared. We are always open, which of course means there is never a time that are closed. Sometimes it can be hard to ne time to catch your breath. Bird said his success as a manager is directly related to the quality of his employees. Bird said, I have great people. I have a great staff and I really believe they would do anything for me. They are not only employees, they are my best friends. Bird is a friend back in you guessed it, a big way. He promised one of his employees that if she quit smoking, he said he would take her to Las Vegas. She did and off to Las Vegas they went. And it seems that no story on Bird would be complete without talking sports. He made sure to share with Stop Watch that he is a huge sports nut. Hes a season ticket holder for the Utah Jazz and he regularly drives 217 miles to Salt Lake City to see the Utah Jazz and then drives the 217 back home. Is anyone surprised that Bird has gone big in even his love of sports? We didnt think so. His last words for those in the industryReally have a passion for what youre doing. It is a difcult retail industry. If you dont enjoy the industry, get out. You have to be hands on and be involved to be successful. We are a small sh in a big sea. If you are not up to that challenge, you will get swallowed up quickly.

www.natso.com

25

FOUNDATION UPDATE

NATSO Foundation Establishes Industry Award Program

BY AMY TONER

NOMINATIONS PROCESS:
ELIGIBILITY: Any employee of a truckstop or travel plaza is eligible regardless of their NATSO membership status. NOMINATIONS: Nominations will be collected through a form on NATSOs website at www.natso.com/ TruckstopSuperhero. NATSO will distribute stickers to the industry to promote the program at their location. Nominations will be reviewed and awarded monthly. TRUCKSTOP SUPERHEROS OF THE YEAR AWARDEES: New Truckstop Superheroes are announced monthly on NATSOs website and through NATSOs social media outlets. The recipients are sent a lapel pin and personalized certificate of appreciation. They also receive a small poster to display in their location.

he travel plaza and truckstop industry serves as the concierge of the highway, providing safe, thoughtful and courteous hospitality to both truck drivers and four-wheel trafc. This hospitality frequently results in truckstop and travel plaza employees performing exceptional acts of kindness or courtesy. However, their heroic acts are seldom shared outside of their location. The NATSO Foundation is changing this by creating a new industry awardTruckstop Superheroes. The Truckstop Superhero recognition is awarded to truckstop and travel plaza employees who go above and beyond the call of duty.

Examples include pulling someone from a burning vehicle, visiting a driver taken to the hospital and taking stranded customers home for the night. Superheros may also simply offer customer service that has a profound effect on the customers day. The goals of the Truckstop Superhero award program are to: Publically recognize industry employees for these acts; Help individual employees take pride in their professions; and Improve the publics image of the truckstop and travel plaza industry. Additional information and the Truckstop Superhero nomination form are available on NATSOs website at www.natso.com/truck stopsuperhero. I

TRUCKSTOP SUPERHEROES OF THE YEAR

Each year up to ten Truckstop Superheroes will be also named the Truckstop Superheroes of the Year. These special Truckstop Superheros will be chosen on NATSOs website through a public contest. These special winners will receive:

All I can say is thank you. The employees of your location went above and beyond all expectations.

A press release for distribution to their local media; Recognition in a press release sent to industry trade press;

Complimentary registration to the following years The NATSO Show; Recognition in Stop Watch magazine; and Recognition on NATSOs website and through NATSOs social media outlets.

www.natso.com

27

THOUGHT LEADER

Five Ways to Stop Wasting Cash in Inventory

W
BY BETSI BIXBY

livery window. Take ten days times 1.5 and your maximum inventory should be 15 days on hand. Here are the top ve actions to reduce your inventory and increase the market value of your company:

hen we do business valuations for owners who want to know what their business or someone elses is worth, one of the criteria we measure is inventory efciency. Why? Because inefcient inventory will actually reduce the company or sites value using any asset-based income model. But more than just reducing the market value, it is also a huge waste of cash and most times, easily xable. We nd most operators think their inventory is just ne. Its at a level that theyre used to seeing and that number becomes pretty comfortable. Unfortunately, comfortable isnt always the right number. So what is the right number? To get to that number, we begin by calculating days of inventory on hand. This is simply the inventory dollars on your last balance sheet divided by the average cost of goods sold for one day over the last month. That is the number of days of inventory you have on hand. Next we compare that to what your inventory should be, which is 1.5 times your supplier frequency plus any lead time. For example, if you own a travel plaza and your grocery supplier comes weekly, take seven days times 1.5 and you get 11 days worth of inventory. What about a repair or service shop? The same principle holds true just adding in any lead time you need. So for example, you need three days lead time and a seven-day de-

1 / REDUCE THE VARIETY OF PRODUCTS. Customers dont need ten choices of everything. Figure out what your customers want and buy and get rid of the rest. Major research on retail purchases has shown that by giving customers less choice and reducing decision time, velocity increased resulting in more sales! Think about your snack offerings for example. How many different brands of salty snacks do you really need? Likely far less than you are offering. 2 / REDUCE MULTIPLE SIZES OF SAME PRODUCTS. This isnt just about potato chips. Its about anything that you carry in multiple sizes. And dont always delete the midsize product. Study velocities in all sizes and reduce what makes sense. 3 / ADD NON-MOVING, SLOW-MOVING AUTOMATED FLAGS. The reason why inventory often grows and grows is that customers buying habits change, but the inventory stocking method often does not. With todays software systems there is no reason you should not get a big red alert when any inventory item is not moving. 4 / ASSIGN A SINGLE PERSON ACCOUNTABILITY WITH PERFORMANCE PAY. Weve noticed a simple trendthose companies with the best inventory levels have someone assigned and accountable to inventory while companies with the worst (highest) inventory have no one held ac-

28

September/October 2012

NEW MEMBERS
countable for inventory levels. Most people in charge of inventory are worried about run outs more than they are about your cash. You can change this. Do it rst through education and then with improvement bonuses, which are self-funded through cash savings.

NEW TRAVEL PLAZA MEMBERS AMERICAN TRUCK ROAD RANGER, LLC PLAZA, LLC LOCATIONS
Pilot Dealer #555 1460 North Ridge Rd. Milton, PA 17847 PHONE: 570-742-2663 CONTACT: David Grewal PHONE: 815-387-1700 CONTACT: Jason Brinks

RUSSELLS ENDEE TRUCK & TRAVEL CENTER

1583 Frontage Rd. Glen Rio, NM 88434 PHONE: 575-376-2262 CONTACT: Mark Russell

FLYING J DEALER #551

Vandalia, IL

5 / REDUCE THEFT. Video surveillance has become extremely inexpensive. The other day I learned of cardlock fuel theft that eventually added up to over $12,000. That loss could have been prevented with a simple $250 camera. Theft also occurs in backrooms and front areas, both deliberately and inadvertently. Measuring, educating, internal reporting and bonusing can cure the majority of internal theft and get employees watching vendors and customers on your behalf. These ve actions are not hard to do and they bring wonderful results. So just do your math on what your inventory level is currently, then what it should be to know how much cash you have sitting in inventory that ought to be in your bank account. My guess is that number will get you motivated. I

PILOT DEALER #326

Minonk, IL

FROG CITY TRAVEL PLAZA & CASINO

1418 N. Polk St. Rayne, LA 70578 PHONE: 337-334-3764 CONTACT: Ron Hicks

PILOT DEALER #378

Chicago, IL

NEW ALLIED MEMBERS

STRATEGIC PARTNERS

New Allied Members as of July 12, 2012

AIRCELL INTAKE SPACERS

2126 West Beebe Capps Expy. Searcy, AZ 72143 PHONE: 888-674-3835 FAX: 501-279-3046 CONTACT: Larry Harrington EMAIL: save@aircelleet.com WEBSITE: www.aircelleet.com

HUDDLE HOUSE INC.

5901-B Peachtree Dunwoody Road Suite 450 Atlanta, GA 30328 PHONE: 770-325-1332 FAX: 770-325-1332 CONTACT: Mark Whittle EMAIL: mwhittle@ huddlehouse.com WEBSITE: huddlehousefranchising. com

MIZCO INTERNATIONAL INC.

80 Essex Ave. East Avenel, NJ 07001 PHONE: 781-968-5786 FAX: 781-968-5787 CONTACT: Tom Buske EMAIL: tom.buske@ mizco.com WEBSITE: www.mizco.com

ABOUT

KEM TECH INDUSTRIES INC.

N8076 Maple St. Ixonia, WI 53036 PHONE: 262-567-8020 FAX: 262-567-6114 CONTACT: Matthew Leis EMAIL: mleis@kem-tech.com WEBSITE: www.kem-tech.com

JR PRODUCTS
9680 County Road Clarence Center, NY 14032 PHONE: 800-269-7622 ext. 414 FAX: 716-633-7576 CONTACT: Susan Carpenter EMAIL: scarpenter@ robacompany.com WEBSITE: www.robacompany.com

VALOR COMMUNICATION INC.

18071 Arenth Ave. City of Industry, CA 91748 CONTACT: Fiona Hsiao PHONE: 626-581-8085 FAX: 626-581-3775 EMAIL: ona@2valor.com WEBSITE: www.2valor.com

Betsi Bixby and her company Meridian Associates, Inc. currently assist over 3,400 petroleum marketers increase cash ow and prots through education, strategic planning facilitation, merger mediation, business valuation and brokerage services. Meridian provides executable steps and core competencies for marketers. Meridian also teaches additional state-of-theart inventory methods and has seen travel center owners make six-gure reductions in inventory that catapulted their company market value. Learn more at www.askmeridian.com.

PING HD
2111 Overstreet Court Naperville, IL 60565 CONTACT: Bob Sabo PHONE: 630-416-9591 EMAIL: bsabo@pinghd.com WEBSITE: www.pinghd.com

www.natso.com

29

OPERATOR 2 OPERATOR

How do you keep your management interested in the business?

JIM GOETZ, JR., PETRO TRAVEL PLAZA, PORTAGE 201 #53

First and foremost you have to hire the right manager. That person should by nature be selfmotivated, disciplined and competitive. We allow each of our department managers the exibility to be fully responsible for their department (hiring, ring, ordering, etc.). We measure each of our managers effectiveness with daily sales/labor and productivity reports. Monthly we review with each of our managers prot and loss statements vs. prior year. Quarterly our managers receive a written appraisal on 10 key components and receive a bonus based on how well they did on the 10 components. My brother and I are on site every day and offer encouragement, support and leadership. Good communication, proper tools and clear expectations are essential for the professional manager to succeed. Our vision is to be the best, and we have hired manager who share that vision.

RON HICKS, SILVERS TRAVEL CENTER AND CASINO, FROG CITY TRAVEL PLAZA AND HENDERSON TRAVEL PLAZA
I support the managers. If you support them on their weaker issues and demonstrate that youre interested in what theyre doing, you get a stronger manager than even they thought theyd be. We also hold regular manager meetings. They get feedback and they can voice their issues and complaints and concerns. You get all of that out and you get a list of issues and you try to address those going forward. If the managers feel like their issues are being addressed, they are better managers and they do a better job.

MANISH STHANKI, CCIM, LUCKY DEUCES CASINO LLC

This is something that I face day in day out. I used to think managers were uninterested in the business because of an age- or maturity-related problem. So when hiring a manager, whom everything within our business revolves around, I have tried to hire a higher salaried individual, one with stability. However, this doesnt always work as sometimes the individual is only stable because they are just satised with status quo. Often times, as human beings, our motivations and individual goals change. Owners need to be savvy and alert enough to make sure that the managers individual goals and property goals are always aligned. Also, managers, in some cases, do lose motivation. When this happens, as owners, we need to decide to sh or cut bait. Unfortunately when owners sense that management has lost interest in the operations of the business, the best remedy is often replacement. For me, a manager who has lost interest in the operation is a liability and beyond motivation.

WANT TO BE FEATURED IN THE NEXT OPERATOR 2 OPERATOR? Our next question to discuss is Truckstop and travel plaza employees are always going above and beyond the call of duty for their customers. Share a story of when one of your employees performed an exceptional act of kindness or courtesy. Submit your answers to editor@natso.com by October 31.
30 September/October 2012

STOP. GO. STOP. GO. HARD ON YOU. HARDER ON YOUR ENGINE.

Sometimes your engine works hardest when youre hardly moving. Make sure your engine is protected with Shell Rotella heavy duty diesel engine oil. Enjoy the wear, deposits and emissions protection of Shell Rotella T Triple Protection, and rest assured your engine can stand up to the most demanding conditions even while standing still. www.ROTELLA.com

THE ENGINE OIL THAT WORKS AS HARD AS YOU.

Supplying the tires you need at travel plazas from coast to coast.
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