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Central Arkansas firms succeed in Northwest; Northern migration no guarantee of profitability despite area's growth.

FOR YEARS, CENTRAL ARkansas firms have done business in northwest Arkansas. But success in Little Rock does not guarantee success away from the home base.

"You cannot approach northwest Arkansas firms with a Little Rock mentality," says Keith Hamilton of Little Rock's Hamilton Media Group, which has serviced several northwest Arkansas accounts since 1982. "They have a different cost-conscious mentality than many of the Little Rock companies. They're just a different advertising animal.

"They don't want a Little Rock-thinking advertising agency, they want a northwest Arkansas-thinking advertising agency."

The same philosophy exists for every market segment.

Some of the first businesses to realize the potential of the area's market were financial institutions.

Worthen Banking Corp. moved into the area in 1983 with the acquisition of First State Bank of Springdale. Today, Worthen has assets exceeding $500 million with its recent merger of First Bank of Bentonville, which has offices throughout the region.

"It was a very attractive part of the state even back then," says James Stobaugh, president and chief executive officer of Worthen National Bank of Northwest Arkansas. "It wasn't as big as it is today, but there was still a lot going on, and like any other area that's growing, you want to be there."

More recently, other central Arkansas-based banks have branched out into the area. First Commercial Corp. of Little Rock acquired Farmers and Merchants Bank of Rogers in 1991. Simmons First National Bank of Pine Bluff expanded at the same time with branches in Springdale, Rogers and Bella Vista.

Satellite Offices

Architectural and engineering firms have done considerable business in the region for years, primarily because of the enormous growth in construction. In the first six months of the year, building permits in Washington and Benton counties increased 54 percent over the same period in 1992. More than 1,600 permits were issued through June, representing nearly $145 million in construction.

These companies were content to stay in Little Rock and come to the area on an as-needed basis. Now they are beginning to locate satellite offices in northwest Arkansas, in part to simply better serve their clients.

"We didn't begin with a strategic move to the area," says Richard Alderman, principal in charge of the northwest Arkansas office of Wittenberg Delony & Davidson, a Little Rock-based architectural firm. "We had developed a lot of business up here, and it really just got to the point where to provide the type of service we want to provide them, we needed to have somebody here to give that to our clients."

Wittenberg was one of the first central Arkansas design firms to open an office when it expanded to a Fayetteville office nearly three years ago. Despite the work it had done in the area, WD&D encountered resistance because it was seen as an outsider, Alderman says.

"I think the biggest road block we met in moving to northwest Arkansas was being considered a Little Rock firm," he says. "It's taken us a long time to get over that.

"You have to make a commitment to be here. I think the people in Fayetteville -- and I feel the same way now that I've been here a while -- hate to see somebody come in and try to take advantage of the growth. You've got to come in and let them know you're going to be involved in the community, and they'll know you're committed."

The Cromwell Firm followed a different but similar route when it opened its architectural-engineering Fayetteville office two years ago. Cromwell hired longtime resident and former city engineer Bob Kelly to head the office.

Another way to combat that attitude is the technique used by Conway-based Nabholz Construction Corp. In 1990, it acquired Kan-Ark Industries in Rogers, a construction firm with a good reputation, strong community ties and history in the area. Ron Montgomery, president of the Rogers division and former owner of Kan-Ark, says it was business as usual for clients, who dealt with the same people, just under a different name.

Little Rock-based advertising firm Kirkpatrick Williams & Associates utilized the same strategy, acquiring Gurley Associates of Rogers, making its northwest Arkansas office Kirkpatrick Williams Gurley Associates. The location and even the phone number remained the same.

A Foothold

Central Arkansas advertising firms may be an exception because they've had a foothold in the northwest Arkansas region for years.

Cranford Johnson Robinson Woods, the state's largest advertising firm, has been doing a considerable amount of business in the area for 25 years for companies such as Cooper Communities Inc. Because of those long-standing ties, they are not considered outsiders, even though they have no area office.

Despite the high caliber of local advertising firms, Stone & Ward of Little Rock recently was awarded the National Home Centers Inc. account.

"Because we have quite a bit of presence in the area, we don't feel as though we're seen as outsiders and we don't do anything in particular to combat that," says Millie Ward, president of Stone & Ward. "We see our scope, depth and ability to be responsive more important than proximity."

As Larry Stone, CEO of the firm, says, "One hundred and fifty miles is not nearly as far as it used to be."

Still, Ward says, the company has not ruled out the possibility of opening a northwest Arkansas office.

The influx of Little Rock firms is not limited to banking, architectural, engineering and advertising businesses. Professional firms such as attorneys and accountants are also beginning to recognize the potential of the area.

Sedgwick James of Arkansas, a major insurance company, now has offices in Bentonville. So does the Little Rock-based Mitchell Williams Selig Gates & Woodyard law firm, which now is affiliated with the Ernest Laurence firm.

Stephens Inc., which has had a hand in the region's financial dealings for years, recently opened an office in Fayetteville. Environmental Services Co. of Little Rock also has moved to the area.

But as the migration continues, Alderman offers a word of warning.

"You're not able to count on coming in and taking the gravy off the top and be able to survive," he says. "You can't do business here that way. You have to do the everyday, keep-a-person-happy-type jobs, or you're not going to survive."
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Author:Tobler, Christopher
Publication:Arkansas Business
Date:Nov 8, 1993
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