FNBA: Making It (Issue #2)

NEARLY 50 YEARS OF BOOM AND BUST: HOW ONE ANCHORAGE GUN STORE HOLDS STEADY

LETTER

FROM BETSY LAWER

Surviving in a changing economy takes flexibility, innovation and creativity.

Visitors to our state often comment on Alaskans’ friendliness and how willing we are to help our neighbors. In business, these traits translate to excellent customer service.

When coupled with innovation and flexibility, Alaska businesses can be poised to survive and even thrive in the econom ic booms a nd busts of ou r resource-based economy.

Whether we work in commercial fishing, mining or retail, successful Alaska business people know customer service means more than simply meeting our customers’ needs. It requires an understanding and responsiveness to the forces of nature and changing economies, whether they be local, regional or even international. Most importantly, we need to understand the challenges our customers face.

Innovation is what helps Alaska businesses meet the competitive challenge of big box stores from the Lower 48.

Flexibility is what allows expansion to national and even international customers.

Successful Alaska businesses have something else in common—a plan.

Although not every business has a formal, detailed document, every business owner knows what they want to accomplish. They use a plan as a rudder to help steer their course to achieve that goal.

And they’ve learned that a plan that leads to success is always flexible, changing to meet

those outside forces over which they have little or no control. And when their plan focuses on meeting their customers’ needs, their business is best prepared to survive in Alaska’s changing economy.

MAKING IT | ISSUE #2

a solid reputation

4

hitting the mark

6

enterprising alaskan

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rock starS

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Ask a banker

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ALICE ROGOFF | Publisher MAIA NOLAN-PARTNOW | Editorial Director JAMIE GONZALES | Editor VIKI SPIROSKA | Production Coordinator JOSHUA GENUINO | Art Director Copyright © 2015 Alaska Dispatch News P.O. Box 149001 Anchorage, Alaska 99514

This publication was produced by the special content department of Alaska Dispatch News in collaboration with First National Bank Alaska, member FDIC and Equal Housing Lender. The ADN news department was not involved in its production.

BETSY LAWER, CHAIR AND PRESIDENT, FIRST NATIONAL BANK ALASKA

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3

– Betsy Lawer

COURTESY PHOTO

laskans are optimists.

catch of the day

PROFILE

RON BLAKE, COMMERCIAL FISHERMAN

The business:

Ron Blake, commercial fisherman

COMMERCIAL FISHERMAN RON BLAKE GOES AFTER SALMON, CRAB, HERRING, HALIBUT, SABLEFISH AND SEA CUCUMBERS

The lesson:

Being your own boss means you’re in charge of innovation. When salmon aren’t bringing in the dollars, you’ve gotta dive deeper—deep enough to find other undersea treasures, like sea cucumbers.

on Blake was 19 years old when he bought his first fishing boat. It was a wooden-hull vessel named the Neptune— older, but still serviceable. Blake had only recently returned to his hometown of Cordova, where he was born. His family had pulled up stakes when he was 10 and moved to Idaho, but Ron never really took to the Lower 48.

When he finished high school, his path was clear.

“The day after I graduated I was on a plane back to Alaska,” he said. “Because I knew I loved it, even when I was 10.”

Blake comes from a fishing family, and he and his twin brother Hugh spent their first couple of years back in Cordova working various jobs on various boats. Blake worked on his grandpa’s tender for $75 per day and also did some longlining. But it was tough for him and his brother to find work.

They were small for their age, and nobody would take them seriously.

It wasn’t long before the Blake brothers had had enough of trying to convince older fishermen they could do the job. They decided the solution was to become their own bosses, which meant owning their own boat. They pooled their funds at the end of their season; it amounted to $33,000. Asking around, they found the Neptune for sale. The price was $29,200. They paid cash.

They had a boat; now the next big challenge was to learn how to use it. “We were 19-year-old kids with really limited fishing experience,” said Blake. “We had drift fishing experience when we were younger—my dad was raising us to be fishermen from an early age—but not any good recent experience.”

The solution was to call Dad. He returned to Cordova to finish those interrupted fishing lessons and decided to stay.

Together the brothers did well enough that after three years they were able to upgrade to a 58-foot steel seiner, the F/V Hunter. But this time, after purchasing a new boat, they were flat broke. Once again, Dad stepped in for the rescue. He helped them purchase insurance and some necessary gear.

In return, they traded him the Neptune.

“It was a good deal for him,” Blake said, “But he’d been working for us for a long time...he probably had it coming anyway.”

Nowadays, Ron Blake is 45 years old and the master of a brand-new 49-foot seiner. He seines for salmon, but salmon prices tend to fluctuate, so his strategy for making a good living from the sea has been to diversify. He’s branched out into multiple fisheries over the years: He goes after Tanner crab in Southeast and herring out of Sitka. He longlines for halibut and sablefish in the Gulf of Alaska and the Aleutians. And he also dives for sea cucumbers in Southeast, something he’s done since 1990 on the old Neptune. “That’s the one fishery where I can say I’ve made money every single year I’ve done it,” he said of the cucumber hunt.

Cumulatively, Blake reckons he spends a solid seven months out of the year on the water. The remaining five months, however, aren’t exactly holiday time. There’s maintenance on the vessel, engine repairs, re-rigging the boat every time he and his crew head out for another fishery, the myriad of tasks great and small that go into keeping a boat seaworthy.

Blake feels fortunate to be in a place where he has the means to go after a new fishery if he sees an opportunity.

“It’s hard work,” he said of fishing, “and you don’t do it for free. So if you’re involved with fisheries like that, there’s always going to be money. If you’re willing to work for it.” o

PHOTOS BY BREE MILLS

by Kris Farmen

ISSUE #2 | MAKING IT

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FEATURE

METALWORKS LLC

by Stephanie Prokop

etalworks LLC has never

gone viral. It does not have a website or even a number in the phone book. Yet businesses around the Alaska Panhandle know the owner, Mike Bovitz, and the work keeps coming in.

Based in Juneau and covering communities north to Skagway, clients are referred to Bovitz for diversified services, from patch and repair to new ventilation systems for buildings. Although declining oil revenues have affected governmentrelated jobs locally and across the state, Bovitz sees the private sector going strong.

“I’m afraid to advertise,” he said, noting that companies in the area send him enough business as it is. Metalworks accommodates various industries, and has completed jobs for the Alaskan Brewing Company and Kensington Gold Mine, among others.

Hailing from Minnesota, Bovitz originally migrated to Alaska for the many hunting and fishing options, which

PHOTOS BY META MESDAG

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MAKING IT | ISSUE #2

he considered “way better” than those in the Gopher State. But after spending years working in someone else’s shop, Bovitz decided to start his own company. He was 34 and figured he’d rather take on the challenge while he still had the energy.

“If I knew then what I know now, I wouldn’t have started it,” he joked. The first few years, for example, routinely involved 16-hour workdays and never anything less than 12, but he persisted. “I don’t have any give up. I don’t have any quit.”

For newbies looking to take the same path—leaving a full-time job and branching out on their own in a changing business landscape—Bovitz had a word of caution: “Think the grass is greener? Then you better have that kind of mentality.”

Most importantly, he said, “You have to figure out your niche, what you can do, and make the customers happy. It’s all about making the customers happy.”

For example, Metalworks initially focused on commercial fishing fleets, a substantial contributor to the local

FEATURE

A SOLID REPUTATION

MIKE BOVITZ AT WORK.

economy. The workflow was great in summer but, as Bovitz soon learned, much slower in winter. Unique Southeast Alaska challenges—30 mph winds and the wettest climate in the state—added extra prep work to each job. Before welding could even be started, a barrier needed to be built to deal with the elements.

To fulfill demand, he eventually expanded services to custom heating ventilation but still keeps the overhead low. Affiliated with Alaska Southcentral/ Southeastern Sheet Metal Workers Local 23, he is able to call on short notice and have union members dispatched for jobs as needed. Most recently he has employed residents from Fairbanks and Anchorage.

Having good employees has allowed him to dramatically cut back on his hours.

No more weekend work for example, and only selective office tasks in the evening after putting the kids to bed (he has three children, ages 11, 8 and 6). In fact, his business plan going in was to create a family/work balance. Bovitz and his wife, Jessica, set an annual goal to generate a

specific business income that will free up Jessica to spend the bulk of her time as a stay-at-home mom. She also keeps Metalworks on course by managing accounts receivable and accounts payable.

With 10 busy years at Metalworks to his credit, new Alaska entrepreneurs may want to heed Bovitz’s parting advice: “If you tell your customers that you’re going to do something, make sure you do it. In a small community, your word means everything. If you go back on your word, you won’t be in business for very long.” o

The business:

Metalworks LLC

The lesson:

People talk. If you do consistently great work for them, that’s what they’ll talk about. Maintaining a good reputation can ensure you’ll be as busy as you want to be whether the economy is up or down.

If you tell your customers that you’re going to do something, make sure you do it. In a small community, your word means everything. If you go back on your word, you won’t be in business for very long.

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SPOTLIGHT

by Matt Nevala

s they approach a half century

in business, the proprietors of Great Northern Guns Inc.—and the shop itself—haven’t changed nearly as much as Alaska has since they first opened the doors to the shop in 1968.

“Except, of course, I’ve gotten to be an old man,” co-founder and co-owner Joe Andreis said jokingly.

The economic booms and busts since the trans-Alaska pipeline came online have obviously played a pivotal role in nearly every aspect of the state’s existence. Population growth, demographic changes, the arrival of “big box” stores and fluid firearm sales rules and regulations are just some of the other factors that have specifically affected Great Northern’s business climate.

“The Alaska back in the late 1960s is not the Alaska of today,” Andreis said. “But we’ve adapted to all the changes and we’re still going strong with the same owners in the same location.”

Don’t chalk it up to luck, though. “We’ve been able to build a good reputation,” he added.

The “we” behind that success includes his fellow co-founder/ owner Anita Dalton and their knowledgeable employees.

Dalton and Andreis currently employ seven associates who make themselves available to visit with customers and answer questions.

Located off Anchorage’s Tudor Road not far from t he Tu d or-L a k e O t i s

intersection, Great Northern specializes in sporting goods, guns and products for collectors. Once part of a trailer court on an old dirt road, the shop today stands alone.

It’s not only a retail business, but also something of a community meeting room.

“We’re very much an old-fashioned gun shop,” Dalton said. “At any time of day, people will be sitting out in the shop catching up with one another, enjoying a cup of coffee together.

Great Northern hasn’t changed its hours, it laid anybody off,” he said. “All the ups and d shop has coped with them all for some 47 ye

L TO R: JOE ANDREIS (CO-OWNER), REID HULL, RICHARD DAVIDSON, ANITA DALTON (CO-OWNER), WILLIAM ALLMAN, JEFFREY NOWAK, FRANK CAIAZZA (MANAGER)

SAME LOCATION (OFF TUDOR) SINCE 1968

Maybe someone will bring in donuts to share with everyone.”

That drop-in informality, “It lends a special ambience,” she added.

The customer base ranges from newcomers to Alaska to seasoned sportsmen and women and even celebrities.

“Hank Williams Jr. once came in the shop when The Pines Club was still open across Tudor,” Andreis said. “We went across the street and closed down the place with a jam session.”

“So I can never say that running this place hasn’t been entertaining.”

While filled with modern

DIVERSE INVENTORY AT GREAT NORTHERN GUNS

products and services, Great Northern wants visitors to enjoy “stepping back in time” when they walk inside.

Andreis, Dalton and Great Northern believe the key to nearly 50 years of success begins and ends with customer service, both out front and in the backroom.

“We’re always going to respect and appreciate our customers and assist them with what they want and need,” Dalton said. But their successful interactions with customers depend on backroom planning: Do they have the inventory they’ll need for daily sales? Are they maintaining relationships with local and speciality suppliers?

“It’s easy to identify the challenges and opportunities for growth from the past five decades,” said Clair Dalton, Anita’s husband, who helps out at the shop. “But it’s not always easy to correlate the best responses.”

Besides day-to-day sales, Great Northern works with most of the state’s correctional institutions and assists military personnel with the safe transfer of their personal firearm collections when moving in and out of state.

Andreis said the company is taking a wait-and-see approach to proposed troop reductions at Joint Base Elmendorf-Richardson.

“Personally, I think it’s a foolish thing to do given where we’re situated on the globe,” Andreis said. “Who knows what’s going to happen?”

The same goes for the state’s economic future.

Oil currently hovers around $50 per barrel and the general sense is the economy has softened.

“But I think we can handle it because we own everything connected to the business,” Andreis said. He and Dalton own the Great Northern building and the inventory, and have for quite some time.

Clair Dalton agrees.

“Great Northern hasn’t changed its hours, it hasn’t laid anybody off,” he said. “All the ups and downs, the shop has coped with them all for some 47 years.” o

The business:

Great Northern Guns

The lesson:

PHOTOS BY KERR Y TASKER

t hasn’t downs, the ears.

GREAT NORTHERN GUNS

Don’t depend on luck. Respect your customers, do your best to anticipate their needs with your backroom planning/stocking and have a knowledgeable staff on hand to answer questions.

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Q&A

HAINES PACKING COMPANY

Q&A WITH HARRY RIETZE, OWNER/MANAGER OF HAINES PACKING COMPANY ON HOW HE CAME TO ‘FEED ’EM FISH!’

by Michaela Goertzen

Responses have been edited for clarity and length.

Q: In addition to the cannery business, Haines Packing Company is a tourist attraction, gift shop, restaurant and international exporter. When did you realize you needed to diversify? Were you just ambitious or were you facing economic challenges?

HARRY RIETZE AT THE CONTROLS.

A: We decided as a company that we needed to

diversify with retail and wholesale because fishing is cyclical and you cannot always depend on large volumes of fish required for wholesale business. Ambition was a big part of our diversification as there were fairly large financial risks associated with growing in different directions.

Q: How did you adjust your business plan to reflect your diversification strategy?

A: We did not necessarily have a set business

plan; we adapted it as we grew. We have been working on goal setting and targets instead of shooting from the hip. It pays dividends to take the time and put systems in place for success.

PHOTOS BY EMILY STEPHENS

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MAKING IT | ISSUE #2

Q&A

ENTERPRISING ALASKAN

Q: You operate a store in Whitehorse. What

made you see setting up shop in Canada as an opportunity? What are the obstacles?

A: We pursued the market in Whitehorse

because they are only four hours away and connected by the Alaska Highway, but they lack good seafood. Haines has the nearest ocean and seafood plant, so it made a lot of sense. After six months of working through the permitting process, we are legal to import fish into Canada.

Whitehorse is a great market and we are happy to be there, but our biggest challenge right now is the Canadian dollar. It is challenging when you go across the border with a $10 per pound (U.S.) product, but have to sell it for $13 per pound (Canadian) because of the 30 percent exchange rate.

Q: I like the simplicity of your slogan: “Feed ‘em fish.” Does it still define your bottom line, diversification and all?

A: Haines Packing Company was established in

1917 and is the oldest continually operating business in Haines. “Feed ’em fish” is a perfect slogan because, of course, we want to feed as many people fish as possible, and we think it’s catchy.

Q: You guarantee fresh seafood from dock to doorstep. What is the role of shipping logistics in the company’s success?

Q: What is your distribution strategy?

A: We have clients ranging in size from small

farmers market vendors to large distributors such as Pacific Seafoods and retailers like Whole Foods. It is tremendous to have large companies like these wanting our product and being able to send a large shipment to one location and get paid promptly by a reputable company. Our goal as a company is to keep wholesale accounts like those and also market our own label and retail as much of our product as we can.

Q: What is your favorite product?

A: My favorite product of ours would have to be

the sockeye fillets, simply because they are a beautiful product. Everyone wants sockeye, so it is an easy product to sell.

Q: Is there anything else readers should know about your company, success or strategy?

A: The biggest part of our success has been the

partnerships within the company. Haines Packing would not be where it is today without my two partners, Song Nash and David Lorentz, and my wife Genny. I am so fortunate to have partners that are so dedicated and willing to do whatever it takes to succeed. We hope to continue to grow and provide the best product and service possible. Feed ’em fish! o

A: Shipping seafood is always complicated

because the product needs to be kept frozen or cool all the way to its final destination.

When you are shipping in the middle of the summer to Arizona, where it’s 95 degrees, things can thaw quickly if the proper steps aren’t taken. We use styrofoam boxes with gel packs and ship FedEx Next-Day Air which is very effective. I would like to say we have a perfect record in our shipping department, but we always make it right with our customers if something does not make it in proper fashion.

The business:

Haines Packing Company

The lesson:

Wholesale + retail = sustainability when the volume of fish arriving at the docks fluctuates. Diversify, create some guidelines for growth and you’ll be able to “Feed ’em Fish” for years to come.

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PROFILE

DIBBLE CREEK ROCK LTD. / ALASKA MARINE EXCAVATION LLC

DIBBLE CREEK ROCK AND ALASKA MARINE EXCAVATION ARE HELPING ALASKA BUILD ROADS AND HARBORS

by Amy M. Armstrong

hen the economy crashes, as it did in 2008, it’s time to go crush more rocks.

That’s what Cap Shafer and the crew at Dibble Creek Rock Ltd., based in Anchor Point, did to not only survive the economic downturn but to thrive. In the process, the Shafer family diversified their first family-owned business by establishing another. The newer entity, Alaska Marine Excavation LLC, performs work essential to water transportation in Alaska.

“We went across the state with our portable equipment crushing rocks for contractors,” Cap said. To keep Dibble Creek Rock’s employees and machines active during a time when work and paychecks weren’t a sure thing, he continued, “We went to where the work was. It is something we know how to do very well and we have all of the necessary equipment.”

This mobile effort brought in the revenue necessary to get Alaska Marine Excavation “on its feet,” he said.

Cap, the youngest of the three Shafer brothers, works beside Brok and Cam to run Dibble Creek Rock and Alaska Marine Excavation. Their parents, Clif and Cheryl Shafer, started Dibble Creek in 1984 and remain active in its operations, with Clif still driving dump trucks and Cheryl manning the office.

Theirs is another self-made success story: Clif and Cheryl moved north to Alaska from California in 1974, where Clif previously worked in the gravel

industry. Road construction and its need for quality aggregate fueled the establishment of Dibble Creek Rock.

“We moved up here and bought a piece of ground that had gravel on it and a crusher and a screening plant and began supplying contractors,” Cheryl said with a simplicity that reveals how uncomplicated the process of opening a gravel pit was back then. Today, she said, costly environmental testing regulations make the process more complex. “It is much more difficult and much more expensive for young people to start today. You have to have a great deal more money to begin today than Clif and I did then.”

Today Dibble Creek Rock employs 25 people year-round on the southern Kenai Peninsula, a place where seasonal jobs typically dominate the economy.

Providing stable employment was one of their goals when they established Alaska Marine Excavation, a firm specializing in harbor dredging, Cap said. Alaska Marine Excavation won a contract with the U.S. Army Corps of Engineers and thus far has dredged

harbors at Dillingham, Homer and Ninilchik with operations currently ongoing in Nome.

On paper the two firms are separate business entities, but they do assist each other by sharing equipment and employees as well as keeping income streams flowing. As Dibble Creek Rock weathers declining state construction contracts, Alaska Marine Excavation’s federal contract for harbor dredging keeps the Shafer family, and their employees, financially secure.

Cap and his brothers continue to seek out new ventures, too. But they’re not going to share details at the moment.

“I don’t think the competition needs to know that just yet,” Cap said.

What will remain the same is the family-oriented philosophy his parents established. Just as he and his brothers grew up working in the family business, the same opportunity will be presented to Clif and Cheryl’s grandchildren. Brok’s 12-year-old son, Tison, spent some time this summer working with his father. Cap hopes that his three children—currently ages 2, 4 and 6—will someday follow in his footsteps.

“Right now, they obviously are too young,” he said.

“But they do like to ride in the trucks.” o PHOTO BY JOSHUA VELDSTRA

The business:

Dibble Creek Rock Ltd. and Alaska Marine Excavation LLC

The lesson:

Learn to adapt. When times get tough, pick your head up, take a good look at what your customers need and figure out how to deliver it in a way that’s better, smarter, faster.

L TO R: BROK, CLIF, CHERYL, TISON, CAP AND CAM SHAFER

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MAKING IT | ISSUE #2

ADVI C E

ASK A BANKER

BUSINESS PLANS Q: What is a business plan?

A: A business plan is a map to help guide a

Q: When should you revise your business plan?

A: It should be reviewed annually and if

Q: Why is it important for a business to

Q: Who should have access to your

A: Most people wouldn’t set sail without a

A: Your key employees, potential partners,

business to where they want to go. What it doesn’t need to be is a 300-page document with every action planned out. It just needs to have goals and timelines and expectations. And it isn’t set in stone forever; it’s a living document.

create one?

destination in mind. Having a business plan is similar—it outlines your destination. You may realize halfway across the ocean that your destination has changed, but if you don’t have a map, you don’t know where you’re going or where you’ve been.

Q: What are some key elements in every business plan?

A: There should be some one-year goals, some

three-year goals and some five-year goals.

You really need to know what resources you are going to need to accomplish your goals—both monetary resources and human resources. What is it going to take to accomplish what you want to do? Know how you’re going to obtain those resources.

If those resources include borrowed money, you need to factor in how you’re going to pay that money back.

Q: How flexible should a business plan be?

A: They should be flexible enough that they

keep you on track, but when you need to make an adjustment, it’s realistic to do so.

major items have changed within the business, it should be revised. Now, if you’re doing everything you planned and you’re not making enough money, that’s a business operations change, not a business plan change.

business plan?

investors and anyone planning to finance your business, though it’s not always a requirement.

Most businesses aren’t that proprietary where they need to keep their business plans a secret. Key employees should be made aware of goals and expectations. What is the potential reward if those expectations are met and what are the consequences if those aren’t met? Those goals may be a small piece of the business plan, but if you share that information, it gives those employees some ownership and it lets you receive some feedback from them. As a company grows, those key employees become more and more of an asset. Not having their buy-in is going to adversely affect the company.

Here’s what you need for a successful plan:

Summary

This is the 30-second version of your business plan. Hit the highlights and write it last.

Who you are

Your company’s mission and structure

What you sell

Your products and services

How you sell it

Why you? Why now? Why here?

ProJections

Goals for year 1. Your 3-year outlook. Your 5-year outlook.

Q: Is it ever too late to create a business plan?

A: No, it’s never too late to create one. In some

ways, it’s more challenging to write one before your business launches, when you don’t know what your income is going to be. If you have a business that’s been in operation for five years, you have a lot of very strong historical data that would help you write a business plan moving forward. o

Karl Heinz, vice president and regional branch manager of First National Bank Alaska’s Kenai Branch, helped answer your business plan questions.

For more information, visit FNBAlaska.com or call 907-777-4560.

ISSUE #2 | MAKING IT

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First National is local.

They understand our business and our economy.

Richard Schok, President & Owner, Flowline Alaska

For more than 90 years, our focus has been on offering strong, business financial solutions. But we never forget that it’s our expertise, experience and responsive, local service that set us apart.

From lines of credit to ACH, from cash management to expansion financing, First National helps leading edge businesses like Flowline Alaska to innovate, grow and succeed.

“First National saves us time and money.

We’ve worked with other banks in the past, so we know the difference.”

Richard Schok

Discover how First National can work for your business.

Call 907-777-4362 or 1-800-856-4362 FNBAlaska.com

NMLS# 640297

We Believe in Alaska