Business Pulse Magazine: Winter 2015 by Business Pulse magazine

BELLINGHAM BUSINESS ACADEMY LAUNCHES MARCH 11

Jesse Cantu

‘Great American Success Story’

MAGAZINE Winter 2015

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2020 VISION

Whatcom leaders look into their crystal balls… Busiest border in U.S. not just about milk and gas Are WIDs the answer for local farmers? The Publication of The Whatcom Business Alliance

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Table of Contents

Cover Story: The passenger ferry Sally Fox put in last month. All American Marine built twins – Doc Maynard is the other – and they will go into service this year for King County to serve up to 250 passengers from Vashon Island and West Seattle to downtown Seattle. (Photo courtesy of All American Marine)

BORDER BOON – FROM MAILBOXES TO milk, and much more

Cover Story: ARE THOSE YACHTS? LOOK CLOSER….

2020 VISION: WHO SEES WHAT 5 YEARS OUT ON WHATCOM BUSINESS LANDSCAPE?

Our sharpshooter reporter/writer Cheryl Stritzel McCarthy and sidebar writer Sherri Huleatt covered all the ground from Blaine through Lynden to Sumas, and southward, in creating a revealing MRI of shopping all around us. They discovered some interesting trends, such as the dozens of mailing and shipping businesses saving our northern neighbors on postage, freight, and taxes. You know about gas and milk, but the B.C. cross-border consumerism has even more tentacles.

Aluminum frame. Unique hull design. Speedy hydrofoil propulsion. Outstanding fuel conservation. Ultra-safe in churning waters. Cozy comfort. Sleek lines – such as a fishing vessel that looks like a yacht. These benchmarks of quality have made All American Marine in Fairhaven a global heavyweight in building innovative, hard-working, quick-turnaround, and lighter on the checkbook watercraft. They guide tours in Alaska and Hawaii and the Tennessee Aquarium out of Chattanooga. They support oceanic research. They ferry. They fish. Or, they provide just plain sport fun.

We asked around. Get ready for a stroll into the future of Whatcom County’s business landscape. Literally, in one imaginative foretelling as Port of Bellingham Executive Director Rob Fix walks us 5 minutes to work or play on the future downtown waterfront. How about self-driven cars to look at your prospective new home (Lylene Johnson, Muljat Group)? Or, no dealership, just the Internet and home delivery for your new car (Julius Greening, Wilson Motors)? And, oh my, look where the grass is growing greener (Danielle Rosellison, living up to her business’s name, Trailblazin’.

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Table of Contents HANGING IN THERE –Workers, in front of monitors, place clean, wet medical gowns on hangars, and the tran-line (at right) moves them to the steam tunnel to dry, which then moves them upstairs where – coded by RFID (computerized tracking) chips – they get stacked and called down for delivery by item, size, and color. (BP staff photo)

same amount of LAUNDRY IN A DAY as A FAMILY IN 24 YEARS

48 56

ANATOMY OF SURVIVAL GOING ON 100 YEARS:

‘GREAT AMERICAN SUCCESS STORY’

Technology in recent years has made that possible for the heralded work of Northwest Health Care Linen in Bellingham. Or, as founder/owner Jim Hall put it, “It used to be back-breaking work.” This is a story of one man’s discovery of a niche in the health-care industry where regulations were loose on requirements for laundering linen used by patients. How he jump-charged a start-up by selling customers before he was in business is but part of the ingenuity behind this extraordinary clean-and-green business.

HOW YEAGER’S KEEPS CUSTOMERS COMING BACK

For 93 years, Ira Yeager’s brand and personal service mantra have continued to beat back the intense competition in equipping for outdoor recreation and heavy-duty work. With the big-box proliferation, Yeager’s reaches out by radio, Internet, and person-to-person education and satisfaction for its sustenance. It’s still working.

WHAT’S UP WID THAT? IRRIGATION, THAT’S WHAT. FARMERS ZERO IN ON WATER PROBLEMS Roaming through the outlying agricultural lands of the county, reporter/writer Sue Cole dug into how the farmers went to the polls last November and started whittling away at their irritation with irrigation – Watershed Irrigation Districts (WIDs). The water rights and usage mysteries have lingered for some time now, and a call to action became necessary. What does it signify?

Jesse Cantu, Personally Speaking, tells his story of arriving in Texas from Monterrey, Mexico, as a busboy, and discovering a whole new world of dreams from working in kitchens. Here’s a delightful tale of a trail that took him to Minnesota, Chicago, Nashville, back to Texas, and finally at Semiahmoo in Blaine. From that rich background, including service for presidents and a sheik, he has created Jalapenos (three Mexican restaurants) and Luna’s Bistro (Italian) the same way he’s always known food – from scratch. Managing Editor: Mike McKenzie Graphic Designer/Layout Adam Wilbert

For editorial comments and suggestions, please write editor@businesspulse.com Business Pulse Magazine is the publication of the Whatcom Business Alliance. The magazine is published at 2423 E. Bakerview Rd., Bellingham, WA 98226. (360) 671-3933. Fax (360) 671-3934. The yearly subscription rate is $20 in the USA, $48 in Canada. For a free digital subscription, go to businesspulse.com or whatcombusinessalliance.com. Entire contents copyrighted © 2015 – Business Pulse Magazine. All rights reserved. POSTMASTER: Send address changes to Business Pulse Magazine, 2423 E Bakerview Rd., Bellingham, WA 98226. 6 | BUSINESSPULSE.COM

Feature Writers Pamela Bauthues Susan G. Cole Sherri Huleatt Cheryl Stritzel McCarthy Guest Column Contributors Randall Benson Todd Myers Erin Shannon SBDC/Jennifer Shelton SHRM/Rose Vogel

Cover Photo: Joe Hudspeth, All American Marine Photography: Sherri Huleatt Mike McKenzie Cheryl Stritzel McCarthy Andrew Phay/WhatcomCD Courtesy Photos: All-American Marine Blaine City Council Border Policy Research Institute, WWU Chambers of Commerce (Lynden, Sumas)

Hart Hodges, Center for Economic & Business Research, WWU Whatcom Farm Friends Yeager’s Sporting Goods 2020 Vision Contributors Ad Sales: Micaela Mae Subscriptions: Janel Ernster Administration Danielle Larson

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Troy Muljat Owner, NVNTD Inc. Managing Broker Muljat Group

Jane Carten President / Director Saturna Capital Corp.

Board Chair Jeff Kochman President / CEO Barkley Company

Doug Thomas President / CEO Bellingham Cold Storage

Marv Tjoelker Partner / Chairman of the Board Larson Gross PLLC

Dave Adams, President Emergency Reporting

Randi Axelsson, Sales Manager Silver Reef Hotel Casino Spa

Pam Brady Director, NW Govt. & Public Affairs BP Cherry Point

Janelle Bruland President / CEO Management Services NW

Bruce Clawson Senior VP Commercial Banking Wells Fargo

Scott Corzine Major Accounts Executive Puget Sound Energy

Kevin DeVries CEO Exxel Pacific Inc.

Greg Ebe President / CEO Ebe Farms

Andy Enfield Vice President Enfield Farms

John Huntley President / CEO Mills Electric Inc.

Sandy Keathley Previous Owner K & K Industries

Paul Kenner Executive VP SSK Insurance

Bob Pritchett President & CEO Faithlife Not Pictured: Guy Jansen, Director Lynden Transport Inc. 8 | BUSINESSPULSE.COM

Brad Rader Vice President/General Manager Rader Farms

Becky Raney Owner/COO Print & Copy Factory

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Leading Off Tony Larson | President, Whatcom Business Alliance The Whatcom Business Alliance is a member organization made up of businesses of every size and shape, from every industry. The WBA enhances the quality of life throughout Whatcom County by promoting a healthy business climate that preserves and creates good jobs.

Happy New Year from all of us at the Whatcom Business Alliance I

hope January finds you healthy, happy, and excited about what we all hope for – a promising 2015. What we can surely say about 2015 is that people reflect more optimism about the future. A couple of national polls taken by Gallup and Rasmussen in December showed the Economic Index at its highest in six years, and consumer confidence at its highest since 2007. Probably the most underreported economic impact story of 2014 was the U.S. energy boom. In March of 2009 oil was priced at more than $140 a barrel. By yearend 2014 it dropped under $60. While the negative impacts on our national oil industry and the international geopolitical issues hold significance, the U.S. retail sector is booming as consumer confidence grows and people spend their gas money on other things. In this edition of Business Pulse, we look at how Canadians impact Whatcom County businesses, especially the border cities, beyond just the gas and milk and other retail dollars they pump into our local economy. 10 | BUSINESSPULSE.COM

Also, you’ll learn about the Watershed Improvement Districts (WIDs) that formed as local leaders in the ag and dairy industries proactively addressed water rights. We report on All American Marine, an exceptional local boatbuilding company. They are

Exciting WBA Events: Feb. 5—Tour All American Marine and ride a new 83’, 250-passenger ferry. March 11—The new Bellingham Business Academy starts. completing two large ferries at their manufacturing facility in Fairhaven, contracted by King County. Members of the Whatcom Business Alliance (WBA) can tour AA Marine on Feb. 5, followed by a cruise around Bellingham Bay on one of the ferries. In Personally Speaking, you’ll meet Jesse Cantu, a local entrepreneur and restaurateur with a remarkable American success story.

If you haven’t met Jesse, you’ll have to drop in to one of his Jalapenos restaurants or the new Luna’s Bistro in Barkley, next to Woods Coffee, and say hi. We’ve also asked a number of business and community leaders from various sectors to provide you with their forecast for the next 5 years in a feature called 2020 Vision. I hope you find their prognostications as interesting as I did. I’ve got a few prognostications myself for the next 5 years: • If Gov. Jay Inslee’s carbonreduction plan is implemented, we will all discover by 2020 that his wildlyoptimistic predictions about the low number of jobs lost and the increase in price-pergallon for gas will be proven wrong. He says gas pricing will increase by just two cents, and that the cost on jobs will not be significant. The National Federation of Independent Business Research Foundation (NFIBR), using sophisticated economic modeling to draw its conclusions, predicted job losses up to 11,000 over the next 5 years. • The Whatcom County

Charter Review Commission will add a Charter Amendment to the ballot next November. Voters will then decide if they want to elect Whatcom County Council members only from their own districts, or if they’d rather continue to allow all voters in all districts to cast votes for all representatives. • Obamacare, which is more unpopular in polling now than it was when it was passed on a partisan basis on Christmas Eve of 2009, will continue to be amended and modified. As a result, the innovative market-based WBA employer insurance plan will grow more popular for employers and by 2020 will become a model for employers outside of Whatcom County as well. • The WBA will grow its leadership network and keep adding benefits that local businesses find valuable, along with our current calendar full of industry tours, symposiums, the WBA employer healthcare plan, special events, networking opportunities, and interesting business profiles and education through Business Pulse, and our newletters. Here’s one of example of a WBA member benefit we’ll launch in March: • In collaboration with Bob Pritchett, CEO of Faithlife Corporation, and a few other WBA board member companies, you’ll experience the new Bellingham Business Academy (BBA). The BBA will provide an opportunity for local business leaders and aspiring leaders to get valuable information and training from top national speakers, right here in Bellingham. These will be the topdrawer type of speakers you would

normally have to pay a lot of money for and send your employees to hear them at great expense. Bob will bring this extraordinary group of distinguished presentations to Bellingham for his own company, and for the benefit of WBA members. Space will be limited, but WBA members will get first shot at attending for FREE. We’ll announce the speakers soon, so circle the first four dates of March 11, April 15, May 13, and June 10,

2015. The events will take place at the Mount Baker Theatre in Bellingham. Thanks to all of you who have made 2014 a successful year for the WBA. We look forward to working with you this year and, as always, we appreciate you introducing other business leaders to the WBA. Wishing you a healthy, happy, and prosperous 2015, Tony Larson WHATCOMBUSINESSALLIANCE.COM | 11

analysis: Cross-border business Canadian commerce flows freely past the Peace Arch on the border between B.C. and the City of Blaine. Photos by Sherri Huleatt

Do the busiest northern border crossings in the country translate to good business for Whatcom County? Canadian consumers a key driver for local retail and government coffers By Cheryl Stritzel McCarthy

12 | BUSINESSPULSE.COM

order crossings at Blaine, Sumas, and Lynden have become the busiest ports of entry for Canadian passengers across the entire United States. That wasn’t the case a decade ago.

During 2002, Washington State’s crossings were just third-busiest for Canadian passengers in the nation, according to the Bureau of Transportation. Laurie Trautman, associate director of the Border Policy Research Institute at Western Washington University, has studied this growth. “Look at the entire U.S. Canadian border,” she said. “In 2013, Washington had the highest volume of passenger crossings. That’s mainly due to Blaine, Sumas, and Lynden.” What does that mean for Whatcom County businesses looking to grow sales to Canadians? Consider NEXUS, the United States/Canada joint program that expedites border crossings. One-third of all NEXUS members live in our region of western Washington/western British Columbia. And most of those NEXUS holders are in B.C., traveling this way. “Of a million NEXUS members, 338,000 are in B.C., and 59,000 are in Washington,” Trautman said. “That’s significant.” In 2013, overall passenger crossings reached approximately 1.2 million at Sumas, 1.4 million at Lynden, and 5 million at Blaine, counting Peace Arch and Pacific Highway – 7.6 million total. “We see a lot of crossings undertaken by a small number of people,” Trautman said, citing her organization’s data collected over a period of years. “Based on our studies, 55 percent of non-NEXUS trips at Blaine are undertaken by the same 100,000 people. It’s a revolving door between Whatcom County and lower mainland B.C.” The 3 million Canadians living just across our border are counted from Vancouver, with its 603,502 people, east to Chilliwack with 80,000 citizens, and all areas south of them. Three-quarters of all Canadian trips into Whatcom County and back take place the same day. That speaks to gas, milk, groceries, clothing, incidentals, and mail. In 2013, about 31 percent of Canadians coming into Whatcom County cited shopping as the main reason, compared to 15 percent for automobile gas, and 19 percent for recreation. That said, nearly all Canadians crossing the border fill up on gas here, whether it’s the main purchase or a side purchase, Trautman said. Considering just those Canadian shoppers who’ve been traveling to Whatcom County for six years or more, 47 percent say they’re crossing more often now. Only 13 percent of those longtime travellers say they’re WHATCOMBUSINESSALLIANCE.COM | 13

analysis: Cross-border business crossing less. “A lot of the growth in passenger crossings is fairly new,” Trautman said. “It’s easy to come to Bellingham and shop and get back on the freeway to go home. Go anywhere near Vancouver (B.C.) and you have to deal with traffic. We might think Bellis Fair mall is crowded, but you can find a parking spot. Our (comparatively) small congestion is not a major deterrent.” From 2007-2013, the number of Canadians crossing the border for shopping and gas increased by 25 percent. Trips made by Canadians to pick up mail in Whatcom County increased 5 percent, during a period when all other reasons for crossing dropped slightly. The growth in mail reflects the growth in online shopping, especially Amazon. Goods mailed into Canada require higher international shipping costs as well as duty, a tariff payable on imported goods.

Got milk? Milk costs twice as much in Canada as it does here, where the U.S. government subsidizes its production. “Why would anyone pay twice as much?” asked Bruce Cran,

president of Consumers Association of Canada, in a recent CTV News Vancouver story. Apparently, a lot of Canadians wouldn’t. About 56 percent of Canadians in greater Vancouver said they’d buy milk in the United States (source: Angus Reid Public Opinion). Anybody in Whatcom County can cite personal observation of gallon upon gallon of milk loaded into cars bearing B.C. plates at any number of stores south of the

“The more people in your customer base, the smoother the economy can be.” – Mitch Moorlag, general manager, Edaleen Dairy

border, from Edaleen Dairy in all three border towns to Costco, and elsewhere. A Seattle TV station once aired footage of a woman packing 19 gallons of milk into her Canadianplated SUV at Bellingham Costco. Groceries in general, according to

Laurie Trautman, associate director Border Policy Research Institute at Western Washington University, said of Canadian commerce in the county, “It’s a revolving door…undertaken by a small number of people.” (Photo courtesy of BPRI/WWU)

14 | BUSINESSPULSE.COM

Clark Cotner, Blaine City Councilman

Bill Mann on marketwatch.com, cost more north of the border. “Things are much less expensive in Whatcom County than B.C.,” Trautman said. “What’s the price differential? Enough that it’s driving folks. My opinion, it’s less about the exchange rate and more about massive growth in lower mainland B.C.” Lynden-based Edaleen Dairy opened a Blaine store this year, their third since 2011. It was a natural fit, said general manager Mitch Moorlag, to make their retail operations convenient at all border crossings. Edaleen Dairy opened the original store on the Guide Meridian in 1975, a Sumas store in 2011, and a Lynden store in 2012. “Sumas and Blaine city officials are pleasant to work with,” Moorlag said. “They do what they can to facilitate business.” A single shopper can take up to 20 kilograms of dairy products worth $20 Canadian or less into Canada per trip (source: Canada Border Services Agency). That translates to one individual picking up six 1-gallon plastic jugs of milk and getting back home in B.C. without paying duty at the border. Often, as presumably with the woman and her 19 gallons, the Canadian shoppers travel in family groups of two up to as many as their vehicle will hold. A 2012 Vancouver Sun story quoted an Edaleen clerk saying the Sumas store opened to accommo-

date increasing numbers of crossborder buyers. That store, less than five minutes from the crossing, did “unbelievably well” in the first year, she said. Moorlag said that word has spread widely. “The more people in your customer base,” he said, “the smoother the economy can be. We do limited advertising in B.C., preferring to rely on word of mouth.”

1,800,000

1.2 Price of a Canadian Dollar

1,600,000

1,400,000 0.8 1,200,000 0.6 1,000,000

You’ve got mail

Crossings into Whatcom County Jul-14

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Though summer and winter border crossings into Whatcom County show a rise over the last dozen years, they are still fewer than in the early 1990s. (Graph courtesy of Hart Hodges, director of the Center for Economic and Business Research at WWU)

– Hart Hodges, director of the Center for Economic and Business Research, Western Washington University

Simply put, the mailbox business on the border is booming. Cotner guesses the number of shipping and receiving stores in Blaine stands at 25 now, with the number changing so fast “we can hardly keep up.” Stores such as Hagen’s of Blaine, 24/7 Parcel, TransMailBox, and UPS make it possible for Canadian online shoppers to get their packages shipped to an address in Whatcom County, avoiding Canadian duty on imported goods. “They drive over and pick it up,” Cotner said. “Or they have courier services pick up their stuff.” An on-line shopper orders an item and pays Washington state tax on it. One percent of that tax goes into the coffers of the city where the package is received. “How much money, I can’t tell,” Cotner said. “But we’re winning.”

Jan-08

Jul-06

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0 Jul-02

400,000 Jan-03

Without Canadians, Whatcom County residents would have fewer, less-nice shopping options.

0.2

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Jan-02

The population of Blaine is 4,910. Yet, the Blaine U.S. Post Office has 7,000 active P.O. boxes, according to city councilman Clark Cotner. And most Blaine residents have home delivery, not a P.O. box.

0.4 800,000

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analysis: Cross-border business Cotner said the Blaine post office also is crowded with people. “Every day, it happens. It’s an incredible thing. They have carts full of packages to mail. I live in Blaine, but when I want to mail something at the post office, I go to Custer.” Mailboxes are good, but bigger development is on the horizon to accommodate the shipping phenomenon. Blaine Connected, a Canadian-based developer, is seeking to purchase commercial property, including the former Blaine airport. The city will expedite the process and help control the direction of the developments, Cotner said.

Hagen’s of Blaine Increases Customers by over 1,000% By Sherri Huleatt More than 40 shipping and receiving facilities are scattered across the Canadian border in Whatcom County. Hagen’s of Blaine, located on Peace Portal Drive, was the first. Founded about three decades ago, Hagen’s of Blaine has seen its greatest growth spike in just the last few years. During 2007, Hagen’s of Blaine served about 3,800 customers a year. Now, they serve about 44,000 customers a year. That’s a 1,057% increase in customer traffic, and just two of those regular customers are American. The company has 23 employees, mostly part-time. Owner Steve Hagen said that without Canadian customers his business wouldn’t exist. “We should all feel very blessed and appreciative of Canadian traffic,” he said. “Back in 2007, Whatcom County was pretty bleak. Even Bellis Fair was talking about closing its doors. Now, with the spike in Canadian shoppers, we should all count our blessings.” Hagen’s of Blaine, founded by Gloria Hagen, got its start as a bookstore in 1977. In 1982, she was approached by a UPS representative, and she decided to transform her bookstore into a shipping and receiving facility. Ten years later Steve Hagen, Gloria’s son, bought the business and has since watched it grow dramatically. Above: Kelle Hagen, who is co-owner with husband Steve at Hagen’s of Blaine mail and shipping company (Photo by Sherri Huleatt) 16 | BUSINESSPULSE.COM

“We’re the Amalfi Coast of Washington state. We have so much to offer.” – Louise Mugar, co-publisher, The Northern Light

About those crowds Many mainstream stores in Whatcom County would not be here if not for the Canadian shopper – a viewpoint expressed by Hart Hodges, director of the Center for Economic and Business Research at Western Washington University. “The Whatcom County profile, looking at population and earnings, would not support a number of the businesses that are here now, or that are considering coming,” Hodges said. “Those businesses understand that the customer base just across the border changes the picture of Whatcom County entirely.” For example, Chipotle and Forever 21, both new tenants of Bellis Fair Mall, would not be there based solely on Whatcom County. “So, yes, Costco can get crowded, but there’s a silver lining to that crowd,” Hodges said, concluding that without Canadians, Whatcom

County residents would have fewer, less-nice shopping options. Hodges expects the trend in online purchases by Canadians to keep growing, resulting in increased sales tax for Whatcom County’s border towns, and increasing numbers of people crossing the border. Research on border crossings suggest two things: • Some people will cross no matter the exchange rate, and • Crossings today are up, yet still not as high as before Sept. 11, 2001. Border security organizations cap the number of crossings. “We won’t see the volumes we had in the early 1990s unless we can greatly reduce wait times,” Hodges said.

Let’s grow it How can Whatcom County businesses promote sales to increasing numbers of Canadians?

Jim Pettinger, president, with operations manager Terry Dickey in their warehouse at International Market Access Inc. in Ferndale. (Photo by Cheryl Stritzel McCarthy)

Facilitate crossings, Trautman said. “How do we decrease wait times so there’s predictability? We have a lot of engaged stakeholders: U.S. Customs and Border Protection, local governments, businesses in Whatcom County. There’s collaboration and momentum, to make the

border work.” The Border Policy Research Institute, started in 2005 by political science professor Don Alper and housed at Western Washington University, undertakes research to inform policy-makers. The Institute is funded by Washington State

WHATCOMBUSINESSALLIANCE.COM | 17

analysis: Cross-border business

Canadians rent most of the 200 mailboxes at Hagen’s of Blaine, which handles the influx of business from B.C. out of two storefronts and a warehouse. (Photo by Sherri Huleatt)

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through the university, as well as grants. “Nationally, we in Whatcom County and B.C. are recognized as the leader in testing what does or doesn’t work,” Trautman said. “We’re seen as an innovative and unique environment.” Jim Pettinger, president of International Market Access, Inc., has owned his business in Whatcom County since 1984. With 18 employees and 20,000 square feet of warehouse space in Ferndale, IMA helps 130 Canadian companies market and distribute within the United States.

“It’s a revolving door between Whatcom County and lower mainland B.C.” – Laurie Trautman, associate director Border Policy Research Institute, Western Washington University

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Continuing collaboration to improve the perception of crossing would help Whatcom businesses, Pettinger said. “I’ve met many who had one bad experience getting through the border and say they’re never coming back.” Many Whatcom businesses are already marketing successfully to Canadians, but more could if they knew how, Pettinger said. “Do something to make your business known,” Pettinger said, who finds it surprising that local business folks who’d like to sell to Canadians rarely cross the border themselves. Discover potential clients in Canada, drive up, and get to know them. “Typically, Americans don’t want to cross the border to do marketing. They don’t know how. They’re waiting ‘til that automobile emerges from the border, then they

hope that somehow the Canadians will come and buy a product or service.” Nearly 25,000 cars head south over the border daily, Pettinger said. A lot of those Canadian passengers don’t know what exists in Whatcom County. “Advertise. Get involved in events up there. Attend trade shows; Vancouver’s a hotbed for trade shows. Chambers of Commerce, associations, and industries all have trade shows.” Silver Reef Casino does a good job marketing to Canadians, Pettinger said, with billboards, radio, magazines, newspaper ads, and community events. According to Border Policy Research Institute, over one threeday weekend in September 2014, 49 percent of the traffic at Silver Reef was Canadian. “They’re expanding, adding rooms, due to Canadian business. That’s a clear business impact,” Trautman said. Big brands are helped in Canada by accidental marketing, Pettinger said. That’s when American television, with its ads, is cabled into Canada. Canadians also see American magazine ads. “Little guys are just hoping to get a spinoff from that.” Hodges concurred that Canadians know the big-box stores. “Most probably don’t know about Fairhaven or other retail areas. Better advertising and marketing could help. That effort is really just getting going.” Don’t overlook another Whatcom County asset, our temperate climate, said Louise Mugar, co-publisher of The Northern Light, a weekly newspaper for Blaine and Birch Bay. “We’re the Amalfi Coast of Washington state. We have so much to offer, hiking, biking, skiing, boating, fishing, crabbing.” The state parks of Birch Bay and Peace Arch, Blaine Marine Park, and Semiahmoo Spit are spectacular, Mugar said. “Those are appealing to people, once they know it’s here.”

Border Towns Carry the Mail Reporter Sherri Huleatt sought out officials in border towns Sumas and Lynden to find out two things: What is the impact of Canadian customers on their economies, and how much shipping and mailing business do they have. Results:

Briana Kelley, President Sumas Chamber of Commerce 1. Without Canadian shoppers, what would your economy look like? "Without Canadian shoppers, our economy would be struggling. While we all get frustrated with long lines at the grocery store, Costco, etc., we need to remember that Canadians are pumping their money into the economy, and that benefits us all. “As a border town, Sumas is very dependent on border traffic. In years where the Canadian dollar has been down significantly, we’ve seen Sumas become a ghost town. Now we’re finding that the dollar isn’t a huge factor in Canadians coming down here to shop. Studies show that they come for the experience." 2. How many shipping facilities operate in Sumas? “I believe Sumas now has nine shipping and receiving facilities.”

Gary Vis, Executive Director Lynden Chamber of Commerce: 1. Without Canadian shoppers, what would your economy look like? "Canadian shoppers have a significant impact on certain county retail establishments, and by default, the Whatcom County economy in general. It has been stated by larger format stores that over 50 percent of their customer revenue is derived from Canadian consumers....A glance at license plates in a parking lot is a very unscientific but informal way to gauge where a consumer calls home. “Whatcom County shoppers pay a higher price than other Washington consumers due to the Canadian consumers’ level of comfort with pricing that is still below what they would pay in British Columbia....It has been said that even B.C.-based consumers are willing to drive farther south than Whatcom County to seek lower prices and a less-crowded shopping experience. “Lynden does not currently see the impact of the Canadian consumer to the same extent as other areas of Whatcom County. 2. Whatcom County border towns host quite a few shipping and receiving facilities that cater to Canadian customers—about how many of these are in Lynden? "I believe Lynden has three receiving facilities and five shipping facilities geared toward consumers." (Timekeepers, one of the packaging, mailing, and shipping facilities in Fairway Center on Front Street for 18 years, reported that it has about 200 rental mailboxes, mostly leased to Canadians, and that about 80 percent of its total business comes from lower B.C.) WHATCOMBUSINESSALLIANCE.COM | 19

BUSINESS PROFILE: NW HEALTH CARE LINEN

NWHCLâ&#x20AC;&#x2122;s state-of-the-art facility runs from morning to night, showcasing a meticulously coordinated dance between attentive workers and advanced German machinery. Photos by Mike McKenzie 20 | BUSINESSPULSE.COM

How innovation and attention to detail led continuous growth for Northwest Healthcare Linen Northwest Health Care Linen sets sights on growing from 15 million to 24 million pounds of laundry a year.

By Sherri Huleatt

n every doctor’s office, birthing room and intensive care unit is something most people take for granted: clean sheets, starched towels, and bleached gowns.

Even though clean linens seem like a given as a staple, medical facilities are not required to use accredited launderers for their linens, and according to the Joint Commission, the nation’s leading hospital accreditation organization, there are no specific standards for hospital linen laundering and care. Residents in western Washington not only get to take advantage of some of the best health-care facilities in the nation, they also benefit from some of the cleanest

and greenest linens on the market. Northwest Health Care Linen (NWHCL), founded by CEO Jim Hall about two decades ago, is a leader in its specialized laundry service. The company stands as one of the three largest medical laundry facilities in the state. NWHCL processes millions of pounds of laundry every year, enforces continually-improving green initiatives, and became one of the first facilities in the nation to receive the Hygienically Clean Healthcare Certification from the Textile Rental Services Association. When they first opened their doors, NWHCL, a family-owned company, processed about 2 million pounds of textiles a year for four hospitals (all of which now are PeaceHealth facilities) – St. Joseph Health Center, United General WHATCOMBUSINESSALLIANCE.COM | 21

BUSINESS PROFILE: NW HEALTH CARE LINEN of our time helping our customers lower their cost of laundry,” Hall said. “We help them buy less of our products, which sounds odd, but helping them reach their financial goals solidifies a long-term relationship. This company was built with that long-term vision, and we have continued that philosophy for the 22 years we’ve been in business.”

Massive Expansion In 2002, NWHCL tripled the size of its Bellingham facility, located off E. Bakerview Road, so they could process more laundry with greater efficiency.

“The focus in health care right now is cost reduction, so we spend a lot of our time helping our customers lower their cost of laundry.” —Jim Hall, CEO

Hospital, Island Hospital, and Whidbey General Hospital. Now, 22 years later, the company processes about 15 million textiles a year—a 650 percent increase—and serves 13 in-patient hospitals and more than 200 out-patient locations across western Washington. NWHCL has also grown from about 25 employees to 105, with all but three living in Whatcom County. The passion and dedication Hall and the rest of his team show is an obvious reason for their success. Every step of the process — from washing to folding to delivery — is meticulously performed. In fact, each piece of linen undergoes 22 | BUSINESSPULSE.COM

inspection before being sent out the door. “We live and breathe our customer needs on a daily basis and do whatever it takes to make sure their patients’ needs are met,” Hall said. “We focus on the patient need and if we do that, everything else is good.” It’s with this same passion that Hall initially funded his business: before opening, he pitched his vision for NWHCL to several hospitals, and by the time he went to the bank for a loan, he already had four contracts ready to go. Several decades later, NWHCL still puts the customer first. “The focus in health care right now is cost reduction, so we spend a lot

NWHCL processes about 50,000 pounds of linen every day. To put that in perspective, that’s over 24 years’ worth of a typical family’s laundry – in just one day. During a tour he said, “When all this started 22 years ago it was manual labor, back-breaking hard work loading the washers and dryers by hand. Now, with all the automation, hardly anything requires heavy lifting. Now, almost all of the water they use is recycled. Their machines use about one-third less water than conventional washing machines. And, they recycle all soiled plastic linen bags, reducing the solid waste stream by 85 percent. The state-ofthe-art facility also was built with barrier walls and air filtration systems to significantly reduce the risk of contamination. Hall even went so far as to tour German facilities — the leaders in laundry innovation — so he could model his facility after the best in the world. These green advancements aren’t

Joel McCollum, the supervisor of the Soil Processing department, confers with Kelsey Van Miert, who handles marketing and textile management and is the daughter of owner Jim Hall. She’s learning the family business, front to back.

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BUSINESS PROFILE: NW HEALTH CARE LINEN just integral to preserving the environment, they’re also integral to NWHCL’s bottom line. “Being green saves resources for everyone, and our customers have to assure that their service providers are green and don’t contribute (negatively) to their overall (environmental) impact,” said Hall. “Our trade association is very much committed to encouraging members to be ‘green’.”

“Our products are a part of almost every medical procedure performed, which makes medical linen an essential service,” —Jim Hall, CEO

Unlike most laundry facilities, NWHCL only focuses on medical laundry, ensuring they have the cleanest product possible.

Business Box Score: Location: Bellingham Start-up date: 1992 Founder/CEO: Jim Hall No. of employees: 105 (102 in Whatcom County) Startup funding: Before opening, contracts with four local hospitals

24 | BUSINESSPULSE.COM

This advanced technology has brought the company to an incredible production level: NWHCL processes about 50,000 pounds of linen every day. To put that in perspective, that’s over 24 years’ worth of a typical family’s laundry – in just one day. Much of this continued change in Hall’s business is a reflection of national health care policies changing. As U.S. health care policy evolves, all of its service providers must, too. “Our products are a part of almost every medical procedure performed, which makes medical linen an essential service,” Hall said. And as health care services continue to grow, so will the demand for NWHCL’s services, giving them a bright future. In fact, their facility has the capacity to reach 24 million pounds of laundry a year, a number that Hall and his team eagerly look forward to.

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Dustin Wilder of WECU® with Jerry McGarity of The Neighborhood Playhouse

“Thanks to WECU® TNP has been able to continue its Pay-What-You-Can program for our audiences who wouldn’t be able to afford a night out with the family to see live theater. Whenever we need help with promoting our shows or even with painting sets, they have volunteers ready, willing and able! Because we keep our tickets prices so low, we often have to borrow to pay for royalties, actors, musicians, etc., and Dustin is there for us -a partner in every sense of the word!”

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Cover story: All American Marine and ceo matt mullett A MOVING SCENE â&#x20AC;&#x201C; AA Marine workers supervise the moving of the first of two new ferries built for King County.

All American Marine

Precision teamwork puts world-class craftsmanship into safe, environmentally friendly, fuel efficient working boats 26 | BUSINESSPULSE.COM

TEAM BUILDERS – Talk of teamwork pervades the work culture at AA Marine, led by this management group pictured on the bow of a new ferry: (l. to r.) , Production Manager Denis Dupas, VP for Business Development Joe Hudspeth, VP for Finance Del McAlpine, President/CEO Matt Mullett, Project Manager Jeff Sokolik, and Purchasing Manager Casey Ohms. Technical Manager Gene Quanz, missing from the photo, was ill the day of the shoot. By Mike McKenzie, Managing Editor

ally Fox is, indeed, foxy. She’s 83 feet long, way tall, and it’s even polite to mention her weight (170,000 lbs). She’s a Cat. As in Catamaran–a boat.

Specifically, she’s a ferry. More specifically, she’s the latest creation launched by All American Marine (AAM). Sally Fox launched during mid-December to bring 2014 to a good close for the boatbuilding team that works at the dead-end of Harris Avenue in Fairhaven, right on past the Bellingham Cruise Terminal, bumping up against the water. I toured her, and the facility. Whatcom Business Alliance members and guests will have their chance (Thursday, Feb. 5). Spoiler alert: Brace for a ‘Wow’ factor. The Sally Fox is gorgeous. I’d say she looks like a million dollars, but that would be slighting her about 5 mil. Shiny aluminum, bow-to-stern, and shaped all yacht-like atop those

famous parallel twin hulls that make cats look like they’re flying on puffed-up water skis. Her twin, Doc Maynard, still in the making, will be launched this summer. Thereafter, they’ll go into service for King County Ferry District to serve Vashon Island and West Seattle as water taxis to downtown Seattle. Together, they cost about $12 million. The cats will replace the 25-year-old leased ferries used the last five years. They’ll carry up to a U.S. Coast Guard certified 250 passengers at a time inside (no cars; All American Marine builds only passenger ferries –increasing capacity by 78 over the old ferries—and an additional 30 seats provide an outside seating option. Plus, they run faster (even without the hydrofoil assisted hull that All American Marine specializes in, which King County didn’t opt for) and smoother and cheaper. And prettier. Impressions from my tour started with walking onto and through the skeleton in halves – bottom and WHATCOMBUSINESSALLIANCE.COM | 27

Cover story: All American Marine and ceo matt mullett top decks – with the owner of All American Marine, the president and CEO Matt Mullett. He, by the by, became the second half of the tour, also very engaging. More on him in a few…. For the science of the construction of Sally Fox, I refer you to the company’s website, www.allamericanmarine.com. It explains all manner of water-flow dynamics, and speed, and lower fuel usage, and balance, and comfort even in windy, heavy seas, as oxymoronic as that may sound. “What sets us apart,” Mullett said, “is the unique hull shape and hydrofoil system (under water wing) that displaced 1/3 of the weight of the vessel. As a result, these boats require one-third the engine horsepower to achieve the same performance as standard catamarans, which produces a vessel that burns 1/3 less fuel.” Take a few minutes and look at the pictures. All-American Marine’s builds boats, as Mullett stated it, “Economic, environmentallyconscious, and high-performing to last 25-30 years.” But they also look great, whether they’re large ferrying passengers in New York City, con-

ducting wildlife and glacier tours in Alaska’s Kenai Fjord National Park, or providing a research platform for scientists in NOAA’s Flower Garden Banks National Marine Sanctuary 100 overshore from Galveston, Texas.

These boats require one-third the engine horsepower to achieve the same performance as standard catamarans... (and) burn 1/3 less fuel. To that yacht-look, yacht-feel point: An all-important Teknicraft Design, Ltd connection sets All American Marine apart within the crowded boatbuilding market. Nic de Waal, working out of New Zealand, is a rare kind of engineering wizard on catamarans, worldrenowned, and in 2000 he granted All American Marine exclusive North American rights to his unique design. Mullett explained as we walked

CHARTING PLANS — Joe Hudspeth, left, and Matt Mullett look over a blueprint in the offices of All American Marine in Fairhaven. Mullett concentrates on recruitment and management of the team, and Hudspeth is responsible for business development and marketing. (Business Pulse photo by Mike McKenzie)

how the rest of his on-site building team has but one formally-educated engineer, “…but in our own way they’re all engineers.” Most noticeable and most impressionistic during the walkthrough was AAM’s attention to detail, and all the moving parts and added touches for comfort and safety and convenience, such as the spaces for luggage and bicycles and strollers and – airlines, are you listening? – roomy restrooms. Big machinery dominated a section of the fabrication building that the boats don’t occupy. One in particular is revolutionary. It allows precise cutting of aluminum, a 30x8-foot, computer numericallycontrolled (CNC) router cutter. That’s the not-so-secret ingredient. The ability to bend and shape aluminum alloys makes them ideal for what All American Marine shoots for – highly-efficient, environmentfriendly watercraft. Another distinctive impression, before we head over to Matt Mullett’s office: imported components. The company goes for the best-there-is, globally. Seats from Australia. Specialty window wipers from Sweden. Vinyl covering (instead of paint) for the superstructure from Germany. Ceiling panels from Denmark. Engineer from New Zealand…. Point being, no compromising. Yet, Mullett said emphatically, “Built in America.”

*** We settled in his office building in front of the massive 20,000-foot fabrication building that hides the water view. Conversation ran the gamut from church to family to Myers Briggs personality type testing, and through the trail of Greek immigrant grandfather, Oregon farming roots, and a kaleidoscope of work experiences that brought Mullett to this seat, and this mission of team-building around boatbuilding. Two things were striking about 28 | BUSINESSPULSE.COM

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Cover story: All American Marine and ceo matt mullett Matt as we toured and then talked: his genteel manner, and his passion for the team of 46 on-site employees. He readily displayed pride in their skills, their achievements, and their synergy around getting boats not just built, but built with “World Class” craftsmanship stamped on every inch of their performance and eye appeal. People are riding AAM boats to see the wonderlands of Alaska and Hawaii, and the “Grand Canyon of Tennessee” running outward from Chattanooga’s state aquarium. AAM boats are supporting divers in deep-sea exploration and scientific study, and underwater survey work of all manner. And, of course, ferry water-taxi commuters. For starters on touring Matt’s life and times, and the collegial, teamcentered manner by which he runs the business, I simply can’t resist saying that this boatbuilding enterprise isn’t brain surgery. Because it’s no joke

30 | BUSINESSPULSE.COM

– that’s where he was headed when he was a young man: Dr. Mullett, neurosurgeon. He was inspired by a family friend, a surgeon, and for a time even shadowed an off-duty surgeon at a hospital. And, that’s why he studied chemistry and biology at Eastern Oregon University. That all faded, he said, because, “I spent more time focusing on basketball and girls and not quite enough time on academics to make it into medical school.” He also spent considerable time in a campus leadership role. Matt said that serving as EOU’s student body president started a discovery process about his leadership gifts, and he made a sharp turn into the world of business. He enrolled in Willamette University’s Graduate School of Management in Salem, Oregon. He secured a summer internship in Bellingham that proved fortuitous; he liked it so well

that he stayed a full year before returning to complete the two-year MBA program. Over the years his career path was grounded in “…finding that I had a knack for helping entrepreneurs take their business to the next level.” At first, stemming from the enjoyable internship experience, he stayed on with the Jas. F. Bolster Agency/G.T.M. Inc. and helped open and run a restaurant group for 2 additional years. Then came a decade of consulting with organizations involving in-house management and business plans, such as Hempler’s B.B. Meat Company, a stint as interim director for Cascade College of Commerce, and testifying in legal cases as a forensic economist. SLEEK SALLY FOX — On launch day Dec. 15, AA Marine displayed the company’s signature distinctive look with this new King County ferry, one of two, that will serve Vashon Island and West Seattle later this year. She is 83 feet long, and is USCGcertified to carry up to 250 passengers.

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Cover story: All American Marine and ceo matt mullett NEW OWNERS gathered with the builders when Sally Fox, a ferry built for King County Ferry District, launched in mid-December at the Fairhaven waterfront. (l. to r.) Jeff Sokolik, project manager, and CEO Matt Mullett of All American Marine observed alongside KC Operations and Maintence Manager Ron Panzero and Dave Watson, a King County Engineer in the Marine Division.

In 1989 Mullett was asked by pharmacist Mike Roberts, who was thinking about diversifying his business focus, to evaluate an opportunity to open a restaurant in the new Bellis Fair Mall food court. After Mullett developed a comprehensive business plan on the potential of a leading-edge franchise and showed the plan to Roberts, Mullett took the time to inform him about the downside of restaurant ownership. He challenged Roberts to focus on a “gold mine” of an opportunity by developing his current business into a comprehensive home health care company. Roberts asked Mullett to come on board and assist him in that endeavor. The business grew to more than 125 employees (Matt was the 9th employee) and five offices in 8 ½ years. The company cornerstone division was homeinfusion therapy, and is now owned and operated by Walgreens. Next came leading the charge on a turnaround of a leading kayak manufacturer, Ocean Kayaks, as CEO and positioning it for sale to a publicly-held corporation. Then along came Pat Pitsch, and All American Marine (AAM) in 1999, again as a consultant to develop a business plan. Wayne Schwandt, then at Fourth Corner Development Company, 32 | BUSINESSPULSE.COM

who had attended the same grad school program at Willamette as Matt, referred him to Pitsch, who was building commercial fishing boats for the Bristol Bay fishery in Alaska . AAM had just completed their first aluminum catamaran, and Pitsch recognized this oppor-

His career path was grounded in “…finding that I had a knack for helping entrepreneurs take their business to the next level.” tunity to keep his business growing when the commercial fishing boat market was in a serious decline. Mullett liked the potential and agreed to join the firm as the CEO and execute the business plan.. During 2003 he and Pitsch formed a partnership – a 10-year plan with Matt running the company, and he became sole proprietor in 2013. As the discussion shifted the spotlight onto the endeavors of All American Marine, Matt lit up. “Our team drives the business,” he said, deflecting from his own involvement and achievements. “My

role is focusing on strategic business development, and to fill critical spots with key people. A major area I’m focusing on right now is putting together a group of talented people who can emerge as AAM’s next generation management team.” Here, in his own words, is how he describes the style of management he purposefully developed over the years, and the credo he applies to All-American Marine: “It’s not me, it’s our group. I surround myself with highly capable people. That’s the key to any success I enjoy. I look for people with aptitude – the ability to learn the job – and great attitude, who have a desire to work together as a team to build the best boats in the industry.” [This is a good place to illustrate: Instead of just the project manager, we lined up six of the AAM managers for a photo on the bow of Sally Fox, representative of the company’s all-as-one work culture.] Regarding his work ethic, Mullett related tales of growing up on a farm in Corvallis, Oregon, and of working at his grandfather’s business, Sunshine Dairy in Portland – a dairy processing and distribution facility. His grandfather, John Karamanos, had immigrated from Greece when he was 15 years old. Mullett recalled asking his grandfather why he chose to leave the

Matt Mullett of All-American Marine

PROFILE: PRESIDENT/CEO MATT MULLETT FAMILY Wife: Nina, 34 years Daughters (2): Aleya, 30, completing Doctor of Nursing Practice at UW Spring ’15, lives in Seattle with husband Josh Gebhardt and son Josiah. Lindsay, 27, in 2nd year at Harvard Law School in Cambridge, Mass. Sons (2): Riley, 24, oversees operations team at a Seattle-based data and technology firm. Garrett, 21, Junior at Seattle Pacific University in International Business and Economics CHURCH Member of Hillcrest Chapel in Fairhaven since 1978; serve on the Board and as an Elder; served on staff 4 years during an interim period during 1980s. EDUCATION Eastern Oregon University, La Grande, ’74 (Chemistry) Willamette University, Salem, Ore.,’78 (Masters in Management) CAREER HIGHLIGHTS Summer 1976-Fall ’77: Jas. F. Bolster Agency (Bellingham) summer internship that became 1-year project

1978-’79: Jas. F. Bolster Agency / G.T.M. Inc. (Bellingham) – Restaurants (Cliff House, Dirty Dan’s, High Country, Bull Shed in Kaui, Hawaii). 1979-’89: Variety of business consulting projects and in-house management, e.g., Hempler’s B.B. Meat company, Cascade College of Commerce interim director, and more. 1989-’96: Roberts Medical – Comprehensive Home Care, including OPTION Care Home Infusion franchise, VP of Ops, eventual President / GM after owner Mike Roberts sold. Mullett, 9th employee hired, helped grow business to 125 in five offices. 1997-’98: Ocean Kayaks – CEO, develop and executed a business plan that led to 26,000 kayaks sold in a 12-month period worldwide and helped owners, Tim & Rebecca Niemier to position the company to sell to a publicly-held company. 1999-Present: All American Marine – Started as consultant developing a comprehensive business plan, . Became CEO in 2000, managing partner in 2003, and sole proprietor in 2013. Build sales to $10MM-$12MM range and place on Business Pulse Top 100 Privately-Owned Companies list, with 47 employees (year-end 2014). WHATCOMBUSINESSALLIANCE.COM | 33

Cover story: All American Marine and ceo matt mullett “old country” and his family and come to America at such a young age. His grandfather told him, “If you sat on a hillside day after day, watching the sheep and goats graze, you’d have wanted to leave and do something more enterprising, too.” From family role models Mullett said he learned to value hard work and exhibit philanthropy, in life and in business.” To that end, in part, he has served in various lay and staff leadership capacities at his church Hillcrest Chapel in Fairhaven. Conversation drew to a close with a look at the future of All American Marine. Matt expressed gratitude on being able to stay the course during the economic “malaise since ’08…we’ve kept people busy. Not always full-time. We’ve held the team together with a shared-work program, and some cross-training and retraining.” He proudly pointed to more than 1100 days without a “time-loss injury” on the job record, as 2014 drew

to an end. And, expressed gratefulness for the consistent flow of government and private sector boat building projects that AAM has been blessed with over the years. “It takes faith to be in this type of business,” Mullett said. “We routinely have a number of proposals out for evaluation by prospective customers, and can build three to four boats a year, but we’re only as good as our signed contracts. God has been good to us.” The passion meter rose even higher when I asked him about his favorite project – the Tennessee Aquarium River Gorge Explorer—a 70-passenger, quad-engine, jet boat. “It’s a go-fast boat,” Matt said. “It’s like a 737 without the wings.” The finished product provides a rush. “What I really enjoy about boat building,” he said, “is seeing all those materials come in the side door, and then seven to nine months later our team has made a beautiful and functional vessel out of it that anybody would be

proud of.” All the result of precision teamwork. Therein appears to lie Matt Mullett’s deepest satisfaction at work. “We’re really proud of what we do, pulling together as a team. It’s great when we take a staff cruise on one of our new boats,. It puts smiles on all of our faces, when we watch the employees show their family and friends the parts of the boat that they personally were responsible for. We care about each one of them – and I think that they know it and appreciate it.” “One of the most pleasurable parts of the job is watching people on our boats in places like Niagara Falls or Chattanooga or Long Beach thoroughly enjoying being out on the water, the surrounding nature and our state-of-the-art boats. “My strategic planning goal is to keep building the best team in the industry and turn them loose.”

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Visions for the future

2020 Vision What’s our economic outlook for 5 years down the road? We asked around…. Interviews by Mike McKenzie, Managing Editor

ach year in January we look ahead. Usually, at the year lying before us. This time around, we thought it would be interesting to see what some business leaders in various sectors envision happening by the year 2020.

That’s a tough assignment. Five years ago, who foresaw today’s stock market climbing into the clouds? Or living not only in Dropbox, but day-to-day – both at work with our files and at home with our music and photos – everywhere in the Cloud? Who predicted the rather unbe36 | BUSINESSPULSE.COM

lievable advancements in 3D printing? (We ran a story last year that talked about 3D creation of food for astronauts. And, read the article in this edition about the phenomenal, inexpensive 3D artificial hand that sprang from puppetry and theater props, and a global connection between a man in Bellingham and a man in Africa, and now has spread globally and philanthropically to change lives as early as prenatal.) You could drone on and on about the revolutionary use of drones since 2010. Were you talking, or even thinking about them then? We’ve printed in our pages the last couple of years about evolutionary techniques that have propelled berry farming and dairy into new realms of productivity.

Five years ago the recession still had a chokehold that had so very many businesses practicing caution in hiring, growing, and struggling in survival mode. Did you think we’d have gas for our vehicles moving faster toward $2 than $5? How about the economy’s telltale new-car industry? Would it rally? Nobody knew. Housing, another staple? Nobody knew. Wall Street? Nobody knew. Where will those two go in the next five years? Mrs. Johnson and Mr. Greening will suggest some things. Read on. And what better place to start in talking about five-year developments than in world of real-estate and commercial development, from, no less, the Chairman of the Board.

CEO Jeff Kochman was giving this tour during 2012 construction on the new Barkley Regal 16 Cinema that opened a few months later. Five years before that, who would have predicted that this grand, colorful IMAX/RPX showcase would have put all three other Bellingham Regal movie theaters out of business? Does Kochman have 2020 vision for what changes lie ahead next on the Barkley Village landscape? Surely….

Barkley—Your center for having fun. “We intend to be top of mind for entertainment or date nights out.”

Jeff Kochman, President/Ceo, Barkley Company

In terms of specifics and activities, we don’t operate literally on a fiveyear plan. A lot of the time we are opportunistic and respond to each business in an effort to make things work. We do have advance planning in the works for some of our remaining undeveloped property – a little over half of the approximate 200 total acres of Barkley Village. We foresee having more growing businesses moving into Barkley Village, and some new businesses starting up. And, we’ll continue to build on our residential presence in a big way. In 2020 we’ll be bustling with entertainment options, especially around the west side where the theater and some restaurants are now. We have regional and national restaurant brands interested that fit into our next phases of development. We intend to be top of mind for entertainment or date nights out. As we grow, we’ll react and provide a variety of choices in providing places for various activities or filling time. We’ve already begun to adopt leading edge, sophisticated, enhanced technology, such as our camera and communications security systems throughout the businesses and parking lots throughout Barkley. We are reviewing all of our buildings and property in an effort to refresh, update and enhance what we offer. Also, tenants will continue to look to us for efficient energy and cost management. In the big world, the national picture, we are viewing those that are in the forefront of technology and are looking ahead to that in a big way. Regionally, in our community, we’ll lead and be ahead of the game. Jeff Kochman serves as chair of the Board of Directors for the Whatcom Business Alliance. With extensive career experience in finance he has worked 24 years, and since 1996 as the top executive, for Barkley Company, developers of Barkley Village in Bellingham. Jeff was our Business Person of the Year in 2012. WHATCOMBUSINESSALLIANCE.COM | 37

Visions for the future

“Large provider networks and freedom of choice (will) disappear…small companies will discontinue benefits.”

Trish Hecht-Glad, President, The Hecht Group

Health insurance will continue to change significantly over the next five years and will be dependent upon pending court rulings and political changes. That being said we will see the large provider networks and freedom of choice disappear. Most medical insurance policies will require individuals to choose one primary care office that will provide preventive care, disease management, primary care, urgent care, diagnostic services, and maintenance medications. Specialty care will require referrals. Large employers will continue to provide comprehensive policies that include on-site medical clinics, large healthy-lifestyle incentives, and funding creativity that will bring rewards. However, as the prices continue to rise, small companies will discontinue benefits and allow individuals to choose programs through private and public exchanges. Dan Hecht and his father Ben started The Hecht Group in Portland, Ore., during 1968, specializing in estate planning and employee benefits. Tricia joins Joe Hecht (VP of Employee Benefits) as third-generation leaders of the company. The company helped create the Whatcom Business Alliance’s innovative and unique employee health-care solution offered to members.

Strolls through futuristic downtown waterfront for brews, breakfasts, 5-minute commutes by foot, and booming business…has he gone bonkers? •

•

Rob Fix, Executive Director, Port of Bellingham

•

In 2020, Whatcom County residents will gather on the outdoor deck of Bellingham’s newest brew pub, located in the adaptivelyreused Granary Building, with spectacular views over the Whatcom Waterway and the San Juan Islands. Down below, local elected officials will christen “Citizen’s Dock,” a new public gateway to the waterfront where you will purchase fresh, locally-caught crab and salmon. Mr. and Mrs. Baby Boomer will walk a couple of blocks from their brand-new residence on the waterfront to their favorite breakfast location to meet other retirees for their weekly coffee klatch. On the way they will say hi to Mr. and Mrs. Gen Y. Mrs. Gen Y will be on her way to her corner office with spectacular views, located within a five-minute walk from her home. Mr. Gen Y will be on his way to the brew pub where he serves as the head brewer, also less than a five-minute walking commute. In 2020 the Port will announce its newest tenant for the Waterfront District – NewInc Vehicle Manufacturer’s clean-energy fuel cell research center. Powered by waste heat from the Encogen Plant, NewInc’s center will support manufacturing of the next generation electric car and create 150 family-wage jobs. NewInc will have selected Bellingham’s waterfront because of the network of clean-energy resources and the City’s environmentally-friendly reputation. I will watch all of this on CCTV from a padded room somewhere, having lost it 5 years earlier while trying to assemble all of the above!

A Bellingham resident of 15 years, Rob Fix was a chief financial officer at two large companies – MTM Luxury Lodging & FST Asset Management and Trillium – before assuming that role with the Port of Bellingham in 2008. After serving in two other management capacities, the Port commissioners selected him as executive director in 2012. 38 | BUSINESSPULSE.COM

“A time capsule buried in 1920 will be found, containing a pot of gold to pay for your 2020 property taxes! Using 20/20 vision in looking at the year 2020, I predict 20 positives for Whatcom County Government: 1. 2016 Comp Plan will be adopted. 2. County will be in compliance with GMA, with no pending lawsuits. 3. Water rights will be close to resolution. 4. New jail and sheriff ’s headquarters will be open. 5. Alternatives to incarceration for low-level offenders will be augmented. 6. Decision on Gateway Pacific will have been rendered. 7. Courthouse exterior will be fixed. 8. Bellingham waterfront property will have some development completed. 9. Lake Whatcom water quality will show signs of improvement. 10. Emergency Medical Services will be a county-wide taxing district. 11. Bellingham/Whatcom County will be a designated railroad quiet zone. 12. Bellingham/Ferndale traffic corridor will be substantially improved. 13. Mental Health Court will be a community success. 14. Swift Creek asbestos issue will be actively resolved. 15. Farming will remain the dominant industry. 16. South End Trail Connector on Lake Whatcom will be obtained. 17. LEAN principles will be applied throughout county government. 18. Your County Government will work toward achieving all of our defined goals. 19. A time capsule buried in 1920 will be found, containing a pot of gold to pay for your 2020 property taxes! 20. Business Pulse will be thriving, and won’t publish a scorecard of my predictions! We have serious work to do in the next few years to accomplish many of the identified items listed above. I am privileged to serve as your Executive, working with a great team of elected leaders and staff to make it a reality. I’m confident that Whatcom County will remain the great place it is today, providing economic opportunity and a place to live and recreate that we all appreciate. Jack Louws a long-time business owner in Lynden in manufacturing of trusses for the construction industry, took office in January 2012 as the top executive in the county.

Jack Louws, Whatcom County Executive

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Visions for the future Guest Column: Lean heretic Randall Benson | Lean Consultant Randall Benson is a management consultant, author, and Lean master working out of Whatcom County. You can visit his blog “The Lean Heretic” at www.leanheretic.com, and his website at www.bensonconsulting.com.

A Lean prophecy for 2020

notice cracks in the Lean orthodoxy — places where the traditional dogma breaks down, thus opening opportunities for innovation. An example presented in this column earlier this year was putting flow ahead of waste to effect change faster, and thereby cutting more waste more quickly. Looking ahead, I’ve concluded that traditional Lean will remain solidly ensconced as the best practice in manufacturing, and will continue to expand into other industries and business functions – especially service, and customer experience. But some interesting areas of disturbance show up where people continue pushing Lean boundaries and challenging long-held assumptions. So, I’m going to have some fun and go way out on a limb with Lean trends that I foresee in place five years from now:

Trend No. 1: Lean production will retain its crown Lean remains king. Long live the king. 40 | BUSINESSPULSE.COM

This is a continuing trend. Lean production, based on the Toyota Production System, will remain the unchallenged paradigm for managing the operations of manufacturing organizations. It’s been the prevailing manufacturing paradigm since 1980, and will have no serious challengers through 2020. The last gaps in Lean manufacturing will be filled. For example, I recently met with the Lean leaders of China’s largest corporation to discuss Lean innovation. Those leaders wanted Lean to improve quality, responsiveness, customer experience, and innovation. It was no longer about just lowering product costs. This is in sharp contrast to the prevailing view that Lean was not necessary in low labor-costs countries. Now it is clear that Lean will become king even in those regions.

Trend No. 2: A paradox unfolds – less Lean, more Lean Ironically, even while factory Lean prevails, people have lost interest. A trend, observable in Google searches since 2005, shows that searches for traditional Lean terms have dropped by almost two-thirds. I’m not surprised, because Lean Manufacturing is mature and there-

fore no longer a hotbed of innovation or news releases. Lean is so ubiquitous it has simply become the water that factory people swim in. It no longer requires a conversation. But look closer. Lean interest really is growing, not fading. Google trends reveal a steadilygrowing interest in non-manufacturing approaches to Lean, such as Lean office, Lean healthcare, and Lean/Agile software development. So I’m betting that interest in non-manufacturing applications of Lean will continue to grow as Lean rapidly expands into those sectors. This is the new conversation.

Trend No. 3: Lean will go social (big time) (Tweet) Hey, check out my latest Lean improvement. Very cool…. Lean improvement projects have exploded onto YouTube and other social media. You have to wonder why it took so long. This national trend actually started with FastCap, a Whatcom County company, when employees began routinely posting their process improvement stories on YouTube. FastCap’s employees have posted hundreds of improvement videos in the last five years. Now other companies have picked up the idea and during 2014 thousands more

improvement videos appeared. Posting these videos is fun, and provides valuable information to other Lean organizations. It also shows deep respect for the people who created the improvements. This idea will go viral. You’ll see. And see, and see, and…. Trend No. 4: Kaizen blitz – not so much The Kaizen blitz (or rapidimprovement event) is a popular Lean tool that compresses an improvement project into 4-5 days. Lean experts have questioned this approach, and rightly so. Curiously, the five-day format originated more as a convenience for visiting consultants, not as the unintended consequence of making continuous improvement more effective. You might need more than five days. I’ve seen many important Lean innovations take several months. Continuous improvement is supposed to be based on the scientific method, so it often needs time for exploration, discovery, and application. Or you might need just five hours, or five minutes. During his 2013 keynote address at the Washington State Lean Transformation Conference, the president of FastCap, Paul Akers, told attendees not to waste time on structured Kaizen blitzes. Paul showed many improvement examples that took just a few minutes or hours to complete.

Sorry Six Sigma, but the Lean paradigm will subsume you by 2020. Don’t be fooled when you hear about Lean Six Sigma. It’s fiction – a well-intentioned, yet unsuccessful effort by Six Sigma professionals to create the reverse outcome: subsuming Lean into Six Sigma.

Trend No. 6: Old folks declare “Lean,” while young people shout “Agile!” Many younger employees receive their first introduction to Lean principles through Agile software development or Agile project management. Both are based on a subset of Lean principles. Employees often use Agile tools long before they are fully aware of the Lean body of knowledge. When these employees see new problems, they naturally consider extending Agile into new territory rather than applying Lean. I run into young

professionals who believe that people devised Lean generations ago, and that Agile is Lean’s modern successor. That viewpoint, in fact, will spread widely by 2020. This isn’t all good news. As a CEO of a large Lean consulting firm said to me, “The problem I see with Agile promoters is that it is one subset, or tool kit, but practitioners are trying to position it as an entire sustainable management system.” While Agile isn’t full Lean, it also can’t be disregarded. Lean experts will take serious notice of Agile and begin to incorporate Agile language and tools into other Lean applications. So while the prevailing Lean paradigm will survive, even thrive, through 2020, I’ll be searching for emerging novelty and innovation in Lean.

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Trend No. 5 Lean will finally unseat Six Sigma At its peak Six Sigma appeared to offer a viable alternative to Lean, particularly in non-manufacturing organizations. But Lean approaches are proving more effective than Six Sigma. Recently the Avery Point Group, an executive search firm, found that the demand for Lean talent outpaces Six Sigma demand by a substantial margin. They determined that Lean is now the prevailing force in corporate continuous improvement.

Take The “Emergency” Out Of Emergency Power. WHATCOMBUSINESSALLIANCE.COM | 41

Visions for the future

“Pending energy code requirements will deliver diminishing returns and make housing even less affordable.”

Brian Evans, Executive Director, Building Industry Association of Whatcom County

The homebuilding and residential construction business will be alive and morphing in 2020. The shelter business will be just as necessary tomorrow as it is today. Regulatory and legislative action locally, regionally, and nationally will continue to shape the marketplace. While consumers are seeking smaller, detached homes close to work and play, the market is hard pressed to deliver as land costs skyrocket. Pending energy code requirements will deliver diminishing returns and make housing even less affordable. Communities will debate the need to embrace much smaller lots – read, higher density – and may or may not ignite the legislative willpower to enact the necessary changes. Single-family detached homes will continue to be the American Dream, and homeownership will continue to be the cornerstone of community. Keeping it within affordable reach will be the challenge. After 30 years in the building industry, Brian has been chief executive since August 2011 at the BIAWC (estab. 1978), a private nonprofit with membership among builders, remodelers, and other construction and home-building related businesses.

“Prospects can make a home tour in a self-driving car….”

Lylene Johnson, Managing Broker, Muljat Group

Real Estate in 2020 – what will it look like? More use of advanced technology will be in play, from an expanded website experience, to virtual-narrated home tours. That includes wider use of videos and access to all of our work on the cell phone or wristwatch. From our office we’ll generate virtual-reality home tours. We’ll program the prospective buyer’s car. Yes, the prospects can make a home tour in a self-driving car…the agent just programs it, and meets the buyers when the car brings them back to the office. I’ll even have audio, taped highlights on the tour. Whenever the car stops, the buyers hit the play button and listen to a narration of what they’re seeing. The tours will be personalized to the party’s interests. For example, for hiking or mountain biking, the car would go to the Oyster Dome or Galbraith Mountain trailhead. If the party is hot about tennis, Fairhaven Tennis Club. Loves to swim? Check out the Arne Hanna Aquatic Center. We will arrange any tour, totally personalized for buyers to do all on their own with our established guidance and verbal assistance. Also, we’ll see more copyright suits (I have to pay what for using that photo?!?). Pirating of photography and other materials from agents’ websites will end as we become more and more protective of our published property. Make you curious? Give me a call. Lylene Johnson has dealt in real estate 25 years, specializing mostly in residential after previously owning and operating a small, island grocery store. She has partnered with her husband Rich at the Muljat Group since 2004.

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“Machines, including robotic milking machines, will take the place of human hired hands.” Dairy farming in Whatcom County five years from now will continue to be challenging, as well as rewarding. Many governmental regulations affecting the daily operations and successfulness of the business will continue to take more of the farmer’s time. The farmer will have less time to spend directly with the animals and land. Available labor will continue to be difficult to secure, causing even more technology and machines taking the place of human hired hands, including robotic milking machines. Cattle feed will produce specific levels of manure nutrients optimal for the soil. The consumer will become further removed from the understanding of farming, prompting resources to be spent providing consumers access to farms to learn first-hand about agriculture. Next generation farmers will bring new energy and technical savvy to dairy farm operations. We already have cows wearing ankle bracelets and connected to computers, giving us much detailed information; even more precision will be available to make better and faster business decisions. Now, tractors can drive themselves utilizing GPS. We expect new technology to grow high production crops, and to diversify with experimental crops such as hemp for making rope and other useful products. Genomics will lead to new levels of cattle evaluations. The future is great, with strong potential. The challenge will be teaching the other 99% of the population the “truths of agriculture." Besides helping her husband Jason and family operate a huge, fifth-generation dairy and crop farm, Debbie also serves as president of the Whatcom County Farm Bureau, and on the county’s Ag Advisory Committee as she promotes dairy and general farming education.

Another dairy voice…. Jackie Blok, who also joins her husband Roger and family in business – RJ Blok & Sons Dairy in Lynden – contributed a cogent comment to the conversation about 2020 in their industry:

“There will be opportunities, along with challenges resulting from those who think they know what is best for your animals, land, and business."

DEBBIE VANDER VEEN, Co-Owner, Veen Huizen Farms in Sumas

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Visions for the future Health care on the go: on the Web, at school, at work, at the Farmer’s Market, or at Blood Tests-R-Us

Nancy Steiger, Top Executive, PeaceHealth Washington and Alaska

We are on the forefront of some of the greatest changes in health care delivery that we have seen in some time. (Penicillin was pretty big.) For the majority of my career hospitals have been the center of the health care system. While I believe that hospitals will still play an essential role in the future of health care, the ambulatory settings – including digital and retail – will radically change how health care is delivered. Specifically, we’ll work more closely with physicians and other health care providers in different ways, through strategic relationships, or through employment. It’s facilitating physicians and other health-care providers to work more closely together. We all know how to stay healthier – eat right, exercise, get sleep, don’t drink too much or drink and drive, wear seat belts. But knowledge alone doesn’t change behavior. Care settings will be set up to help people take better care of themselves and to not be in the hospital. Anything we can do to keep people out of the hospital is going to make an enormous difference on people’s lives and the total cost of health care. Hospitals are expensive. If people don’t take care of themselves they have greater chance of getting sick and increasing the utilization of the most expensive part of the health care system. So we’ll see a lot more emphasis on helping people so they don’t need expensive diagnostics medications, or to fill the emergency departments and beds in hospitals. In the U.S. health care costs are some of the highest in the world, and we don’t necessarily have the highest results. What we do or do not do to take care of ourselves is a major driver of health care utilization. That’s where we get to the ambulatory methods. How do we get in front of people getting sick, and help them take better care of themselves? I don’t think it’s going to be just being surrounded by doctors in offices. By 2020, you may see PeaceHealth at work sites, in schools, in the community, at the farmer's market, and much more on the Internet doing digital kinds of health care. Which isn’t to say we won’t have PeaceHealth St. Joseph Medical Center. There will always be a need for in-patient care, but less of what we’re doing in the hospital setting and more in the ambulatory setting. We’ll invest wholeheartedly in those, because we have to make changes economically. The business model is going to switch. And we will be measured by how well our population is taking care of themselves, and the best places to do that are in ambulatory settings – the schools, the work places, in doctor’s offices, in retail settings. The root cause is that we simply cannot afford the costs of health care. Businesses aren’t sustainable because the cost of health care for their employees is so high. The better we do – measured on how well we can keep our population from getting sick in the first place—then ultimately the cost of health care should go down. Nancy Steiger has worked in health care for more than 30 years. She recently added to her many duties in leading the vast Peace Health system (see WBA News). She has been a cover story for Business Pulse, and a finalist for our Business Person of the Year Award. In 1985 she wrote a textbook; the central visionary theme was “the role that nurses play in giving people the knowledge and skills to take care of themselves” – the very core of futuristic ambulatory health care delivery.

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Delivery at home, mobile servicing. “I don’t think they’ll be coming to dealerships anymore.” Car business is changing dramatically. The consumer will no longer stand for waiting; everything is speed, speed, speed. Our service department has express lanes with the capacity to do 100 oil changes a day. We have two service people working on one rack and knocking out one piece of work in half the time. With $1.2 million worth of parts on our shelves we’re turning 2200 customers a month through our service drives. That’s up 1,000 from five years ago. So, what happens next? More growth – simply put people on the ground. Right now we have 107 employees in the store; 10 years ago we had 80. I foresee us in five years having 140 on the floor. The total amount of new car sales nationally last year was not quite 17 million – rapidly approaching the 2007 numbers that reached the highest point in 100 years. Average age of a used car on the road is 11 ½ years – older than prior to WWII. People who hunkered down, they’re back in the marketplace. We’re still very captive to what gas prices do. Four dollars a gallon, can’t sell a truck, can’t keep a Prius on the ground. Three dollars a gallon, can’t sell a Prius, can’t keep a truck on the ground. Gasoline fluctuations dictate what sells and the market price. We are still very much at the mercy and whims of the gas folks who run the country, and the world. Toyota is putting all their eggs in one basket with hydrogen. Nissan is all into electric. Both manufacturers are nervous because gas is so cheap, no one’s buying hydrogen. About 80 percent of customers today find their car on line and negotiate the deal prior to coming in. They drive the vehicle, present what they want to pay, and we’ll figure out quickly if we’re going to do the deal or not. The deal will be done in the next 10-15 minutes instead of 6-7 hours. Delivery occurs 30-40 minutes later. What I think we’ll have in five years – no more inventory on the ground. We’ll all order vehicles direct from strategic warehouses. I think there’ll be deliveries to people’s houses. I don’t think they’ll be coming to dealerships anymore.

Julian Greening, General Manager, Wilson Motors

After an education in homeland Great Britain, including a technical college a short hop from Stonehenge, Julian Greening came to the U.S. in 1991. He’s been in the business 22 years, a GM at Wilson Motors since 2003, and presently orchestrates daily operations of about 130 employees and 500 vehicles. “I’m now half-American, too” he said, beaming.

WHATCOMBUSINESSALLIANCE.COM | 45

Visions for the future

“Transaction costs…(of) $7 trades will be considered expensive….(and) the advent of purely on-line advisory firms.” What the Investment Services Industry will look like in 2020:

Jacob Deschenes, Independent Financial Advisor/Portfolio Manager

Old-style, traditional brokerage practices (transaction-based compensation) will not be acceptable to clients. They will demand that all advisors working in the investment space to work under a fiduciary standard (feebased). Transaction costs will continue to decrease, and $7 trades will be considered expensive. The advent of pure online advisory firms would mean that face-to-face client interaction happens less and less. The light touch vs. heavy touch client relationship will be in place. Technology will drive results and, in some degree, survival. I will be operating with the most advanced techniques and my own proprietary formulas. Business intelligence will rule. Those who have it and can understand data, data, data, will win. Mathematics and statistics will be the engine for the investment process. (Emotion, when investing, is not a good thing.) After working 5 years at a local firm, Jacob founded his own company during 2013, Era Capital Management. He has developed his own investment models based on fee-only management (no up-front or deferred commissions, zero trading costs, daily pricing, low account minimums) for individuals, businesses, trusts, and for other investment managers across the United States.

“A renewed emphasis on community development will invest in Downtown, Samish Way, and Old Town….”

Kelli Linville, Mayor, Bellingham

I am excited about our City's future. As mayor, I have made strategic investments in city facilities, community development, parks and recreation, and environmental protection so that Bellingham can continue to grow with our community values in mind. A renewed emphasis on community development will invest in Downtown, Samish Way, and Old Town, as well as ensure that city-wide growth occurs in line with community priorities. The City will continue partnering with social service agencies so that all of Bellingham's citizens have access to high-quality assistance and care. In 2020, Bellingham will still be a destination for residents and visitors to enjoy world-class parks and recreation opportunities, walkable and bikeable streets, and cultural amenities like the library, Mount Baker Theatre, and Whatcom Museum. My vision for the Bellingham of 2020 is to continue to be among the best places to live in America. Kelli Linville became the City’s first woman mayor in the 2011 election, and assumed office in January of 2012. She’s a fourth-generation resident, owner of several small businesses, a former speech pathologist in education, and she served District 42 for 17 years in the state legislature.

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“In the next five years changes will exceed the changes I’ve seen over the 50 years past.” I’ve been in business consistently since the 1950s, and continue to be in business to this day. I really believe that in the next five years the changes that you will see will exceed the changes I’ve seen over the 50 years past, for a number of reasons. So many things have changed in the last 50 years. As you know, now it’s a global business environment more than any time before. We know that there are problems with energy, and will continue to be problems with wars in different parts of the world that will affect us. Prices will increase dramatically. While gasoline has gone down in price, prices of other products keep increasing so rapidly we won’t believe those – much as we really don’t believe what the prices were in 1950 when I started. Change always will continue to be, but what prompted me to come as a young person in Holland to the United States will continue to be a reality. And that is, America will remain a land of unlimited opportunities. Since immigrating as a teenager after WWII, Sid, 84, has created, built, and managed numerous companies. Most recently he co-founded Exxel Pacific in 1986 with Kevin DeVries, now the CEO who sits on the Whatcom Business Alliance Board. Sid has owned a dairy farm, a TV and music store, a radio station, a travel agency, Exxel (general contracting, worldwide), real estate, and written 7 books.

Sid Baron, (Semi)Retired Entrepreneur and Business Builder

“It will be widely-known that cannabis is safer than alcohol, and you'll see all things cannabis….But, hemp will be the money-maker (and) will revolutionize manufacturing and farming….” The majority of the United States will have legalized cannabis (recreational, medical, and hemp). The Feds will have declassified it as a Schedule 1 narcotic, and there will be federal guidelines that all states must follow when legalizing cannabis. In Washington, consumers will be educated about cannabis and its effects: what they like, what they don't, how it's grown, why some cannabis is more expensive than others, etc. It will be widely-known that cannabis is safer than alcohol, and you'll see all things cannabis: cannabis bars at weddings next to alcohol bars, vape lounges, cannabis nights at local businesses as a marketing technique, and more. Medical cannabis will be regulated like any prescription drug. You'll get it at a pharmacy, and become educated about doses. But, hemp....hemp will be the money-maker. In 2020 it will just be an emerging industry, yet the big money will see the dollar signs and hemp will revolutionize the manufacturing and farming sectors of the United States. It's coming. Hold on!!

Danielle Rosellison, Recreational Marijuana Grower/Processor

Danielle joined her husband, Juddy Rosellison, and three other investors during 2014 in the startup Trailblazin’ located within the Irongate district of Bellingham, doubling as a grower and processor.

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Business PROFILE: Yeager’s Sporting Goods

How a Yeager’s Sporting Goods local beats the odds company survives Y 93 years in the heat of the retail industry By Pamela Bauthues

eager’s Sporting Goods in Bellingham has found success in the heart of Whatcom County for 93 years. Besides the fact that our region is a hot spot for outdoor activities, the retailer’s no-fuss, old-school charm reflects the same values it held with its one-man start in 1921.

Entering Yeager’s front door feels like discovering an outdoor Mecca— work wear and outdoorsy clothing to the right, fishing gear straight ahead (and seemingly everywhere), and firearms to the left—and that’s but a fraction of the store’s departments. The middle, on the way to clothing, contains a ton of camping-related merchandise. Knives, binoculars and dozens of other functional items sit in display cases under glass, hither and yon. Just inside the back door to the right you enter a fully-stocked, full-service ski and paddle sports shop. Downstairs – toys and kitchen wares, canning merchandise, and more.

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Outfitting for the great outdoors at Yeager’s has been just ducky the nearly a century. Fishing fills the largest footprint, with year-round seasons. (Photo by Pamela Bauthues)

What do you need? They probably have it. Along the lines of a cross between an old-fashioned hardware shop and dime store. (When they started 93 years ago dime stores still existed.) Employees circle the floor in woodsy-green shirts with smiles on their faces, working their posts at the ready to help each customer find what she or he is looking for.

Local legacy Yeager’s occupies 26,000 square feet of retail space splayed with outdoors merchandise in hunting, fishing, camping, work gear, seasonal clothing (winter’s heavy cover in stock now, head-to-toe), functional footwear (bedroom slippers to boots, running shoes to hikers, sox galore), children’s paradise, and housewares (from tiny tools to huge pots). They carry canoes, kayaks, and fishing boats, too. And, the store-customer exchange extends far beyond the checkout counter; the staff offers years of expertise and advice in the specialty areas of outdoors activity. The scope of their business wasn’t always expansive. Founder Ira Yeager, an avid outdoorsman, began by simply selling Evinrude outboard boat motors out of his garage in 1921. Later he moved to downtown Bellingham and added hunting and fishing inventory. Yeager’s business outgrew the building, so he built a new facility in 1958, and later doubled the store’s size. That’s where the business has functioned ever since on Northwest Avenue In 1980 Yeager’s son-in-law,

Frank Uhrig, bought the business. When Uhrig passed away in 2010, Yeager’s grandsons took ownership. The founder established person-to-person relationship building as the foundation of doing business at the outset. That mindset and practice continues. Yeager’s leads many parades in community bonding – a radio program, training law enforcement dogs, and hiring a steady stream of college students as they work their way through college.

Core business How do they compete with the Big Box names in the dog-eat-dog world of retail? Membership in a large buying syndicate helps Yeager’s maintain competitive pricing. Value continually appears on price tags, and bargain hunters find a haven there when sales pop up. One customer drove from Des Moines, Wash., to a one-day blowout sale in December. Once a year in July, their biggest sale of the year, the staff erects an enormous tent in the parking lot out back and turns the scene into a fully-packed shopper’s paradise. Store manager John “Westy” Westerfield said that fishing, because it has so many seasons year-round, has the largest footprint in the store of any single department (footwear and clothing combined is larger). “We’ll have at least a quarter-million dollars in inventory for fishing at all times,” he said. The market involves a broad spectrum of activities—many of which overlap. For example,

“The first thing people say when I tell them what I do is, ‘I love that store.’ They’re the reason we exist.” –“Westy” Westerfield, store manager

WHATCOMBUSINESSALLIANCE.COM | 49

Business PROFILE: Yeager’s Sporting Goods

At left, clothing assistant Angelina Ramey restocks a rack of jackets, while footwear manager Steve Blair explains to customer Denise Burkholder of Bellingham the fitting of a pair of men’s rugged boots. (Photos by Mike McKenzie)

BUSINESS BOX SCORE Yeager’s Sporting Goods, founded 1929 Owner: Frank Uhrig Estate Top Executive: Store Manager John Westerfield Start-up funded w/ personal assets of founder, Ira Yeager Sales Revenue: Undisclosed Growth indicator: Expanding the depth and width of higher-ticket items and product lines Employees: 44, all in Whatcom County 50 | BUSINESSPULSE.COM

Yeager’s serves hundreds of fishers and hunters, as well as the working public, but many customers who purchase work wear also hunt and fish. That provides opportunities for repeat business across departments, serving the same customers with multiple needs – the concept of one-stop shopping under the heading of the great outdoors. Yeager’s works constantly to accommodate customer demands with the changing seasons. And, especially important: The store carries the recognizable name brands that customers look for, but often below MSRP (manufacturers’ suggested retail price). Yeager’s also caters to a wide range of ages. “We have all the big-boy and big-girl toys upstairs,” Westerfield said, “but we also have the popular, extensive department with kids’ toys downstairs.” The kids’ department carries toys for all age levels and interests, yet they all have one thing in common. “We don’t sell any electronic toys or gadgets,” Westerfield said, “Just toys where kids have to develop their own games and use their own imaginations.” The toy department is also a popular destination for kids’ gift shopping. As Westerfield puts it, “We’re the most popular grandma store in town.”

Thinking forward, upholding tradition Since an economic downturn in 2007, Yeager’s has worked steadily to recover, to grow, and to improve their business. Westerfield has led the way. He originally worked for Yeager’s

from 1973-’80, then embarked on a different career path for almost 30 years. He returned to manage the store a little over 5 years ago. He described some of the ways they have upgraded how they do business, like finding better ways to manage inventory while maintaining profit. They also added a point-of-sale system in order to better understand their business and to identify their strengths and weaknesses in merchandising. “It’s been an uphill battle,” he said, “but we’ve made uphill progress.” When discussing the business’s longevity, Westerfield continually pointed back to Yeager’s’ three main values: good products, good prices, and great service. He said that they keep those three points in mind whenever making decisions or defining their identity. “The first thing people say when I tell them what I do is, ‘I love that store.’” he said. “They’re the reason we exist.”

products have seen little change over the last several decades (and still remain popular). Westerfield noted that nowadays retail is more difficult. Customers have more knowledge and higher demands and expectations, and there’s more competition than ever in the marketplace. Doing business also has become more complicated. Yeager’s aims to avoid problems found in most retail stores, things such as customers not easily finding employees for assistance, or unable to find employees who know something about what they’re selling.

“I’m incredibly proud of the history, staff, and service.” –“Westy” Westerfield

Yeager’s has taken on a theme they coined as “retroforward,” which consists of going back to what they’re famous for: Selling the same things they’ve sold for decades with the same levels of service and quality, as well as offering new lines of products that people want. Yeager’s keeps products in stock that customers are used to seeing, and incorporates new products that are in demand, often sideby-side. Some new products include name brands and items with higher price points, while the classic WHATCOMBUSINESSALLIANCE.COM | 51

Business PROFILE: Yeager’s Sporting Goods

From Westy’s Window – customers roam through footwear and apparel in this view on a sale day from the second floor of the store manager’s office. “This is our second busiest day of the year,” Westerfield said, referring to an annual pre-holidays shopper special. “The summer tent sale is bigger.” (Photo by Mike McKenzie)

Local knowledge The Yeager’s staff, by careful design, consists of experts in what they sell. The sales employees participate in the activities they sell products for, and they’re well-educated in their specialties. They educate customers and provide expertise that keeps them coming back. Their employees know where to go locally for different activities, and are well-versed in the entire Pacific Northwest. They make specific, trustworthy information immediately available and usable, dispensing updates on their popular weekly outdoor report on radio, on their website, and hand-written on a whiteboard outside the store. The Yeager’s website boasts, “We hunt, we fish, we paddle, we camp, we ski, and we keep no secrets.” Not only does the 44-member Yeager’s staff have a wide range of outdoor interests, but also experience from 19-year-old students to 52 | BUSINESSPULSE.COM

70-year-old fishing veterans. Females hold half the management positions.

Flat staff management The Yeager’s chain of command is short, including just the family owners, store manager Westerfield, and assistant manager Jane Allen. With such a flat structure, there’s freedom to make changes, be creative, and do what’s best for the business in a short amount of time, Westerfield said. Open communication internally takes the form of weekly staff meetings for management, and quarterly meetings for all employees. The team also uses an in-store email system to keep everyone informed on what’s happening throughout the store day-to-day. The staff ’s diversity is reflected in the diversity of customers who loyally shop at Yeager’s. Westerfield said, “Our customers include people who have an appreciation for good service and

Business PROFILE: Yeager’s Sporting Goods local-owned businesses.” As a business that has always been locallyowned and -operated, Yeager’s is very community-oriented and multigenerational. Many customers mention memories of coming in with their parents or grandparents and reminisce of

“It’s been an uphill battle, but we’ve made uphill progress.” –“Westy” Westerfield

fun excursions with friends and family. To grow a new generation of customers, Yeager’s provides special offerings and activities for kids. One thing they do each year is provide free bait for kids and ask them to bring in photos of the fish they catch, and the staff posts the pictures on the store’s bulletin board, giving kids a sense of pride and accomplishment and Department manager Eli Michael, in action selecting rod options for a customer, oversees the largest single-theme floor space at encouraging them to get outside. Yeager’s. Only footwear-and-clothing combined tops it. The local police and sheriff departments (Photo by Mike McKenzie) have round-the-clock access and designated areas within the store where they can bring new dogs in the K-9 Corps for Experts in Injury Rehabilitation & Prevention training. “Something most people don’t know, too,” Westerfield said, “is that we’ve helped hundreds of young people through college by employing them part-time.” Yeager’s plans to continue to refine their purchasing, further control their inventory, and increase their turns, Westerfield indicated. But above all, they’re sticking with what they’ve always been known for and Specializing in: continue to be known for as • Hand & Upper Extremity Injuries they close in on 100 years • Lower Extremity Injuries in business: Great products. • Vesitbular Rehab Competitive prices. • Sports Injuries Great service. • Pool Therapy • Occupational Injuries • Neck & Back Injuries

For an appointment call... Bellingham • 752.1575 Lynden • 354.5245 805 Orchard Drive, Suite 2 1610 Grover, Suite B-2 54 | BUSINESSPULSE.COM

WHATCOMBUSINESSALLIANCE.COM | 55

special report: Wids

Photo by Andrew Phay, courtesy of Whatcom Conservation District

WIDs: A step toward solution? Water rights and needs loom as an existential threat to local $357 million farming industry By Sue Cole

griculture in Whatcom County: Bucolic. Idyllic. Iconic. Farming is romanticized here. Farm stands. Community supported agriculture boxes. U-pick berries. Heirloom vegetables. Artisan crops.

But agriculture also is big business and steadily growing, reaching nearly $357 million in market value last year. Although agriculture is thriving, significant challenges lie both above and below the ground. Specifically, water and its secured availability 56 | BUSINESSPULSE.COM

for agriculture no longer can be left to happenstance. This fall, north county farmers voted overwhelmingly to establish four Watershed Improvement Districts (WID): Drayton, Laurel, South Lynden, and Sumas. Joining two others already in existence (Bertrand and North Lynden), farmers have unleashed a powerful tool to not only organize for common interest and autonomy, but also to seek assistance for looming issues that ultimately could threaten their very existence. Several hundred farmers potentially speaking as one when it comes to water; agriculture now has a unified voice.

WIDs will help drainage improvements and better flood protection at spots like these: a ditch on Pangborn Road (left) and a lower levee in the Lynden area. (Photo courtesy of Whatcom Farm Friends)

Whose Water Rights Are Those, Anyway? Parceling out water rights in Whatcom County has been a long, meandering, and ultimately unresolved process. Like the Nooksack River, the problem has flowed along, predictably unpredictable. Some farmers secured water rights,

Local farmers have unleashed a powerful tool to not only organize for common interest, but also to seek assistance for looming issues that ultimately could threaten their very existence…. Several hundred farmers potentially speaking as one; agriculture now has a unified voice.

while others waited for permits yet to be approved. Still others use water without any formal claim. So who gets the water? And, who should? Determining who can use the water here, and how, is first and foremost an issue of senior water rights. Lummi Nation and the Nooksack tribe have asked the federal government to quantify their rights, which they argue are senior to all others. The issue driving the tribes’ request is salmon, a protected species that needs clean, clear water in the rivers, tributaries and small

ditches, habitats used for spawning. If and when a decision is rendered, one likely outcome will be to initiate a full determination of all other water rights. Some predict that farmers could be on the losing end of this process, and that agricultural land eventually might be sold to restore salmon habitats. The WIDs are acting to avoid that possibility. Bill Clarke, an Olympia attorney and water rights expert representing

the Whatcom Ag District Coalition that formed during 2014, helped form the Whatcom WIDs. He said, “Ag fully realizes there is a senior water rights system here. All the ag guys understand and respect that.” He added that individual farmers, acting alone, have a tough time coming up with water supply for current uses and future needs. Before the WIDs, there was no organizational structure to work together and share the costs of

Elected Boards of Whatcom County Watershed Irrigation Districts The WIDs formed from the November 2014 general election by votes in the four districts ranging from 84-98% among county landowners with 4.5 acres or more, or who have no open-space tax deduction. A two-thirds majority was required. The elected board of directors from each district received approval from the County Council on Nov. 12, 2014. The board members (alphabetically): Drayton Jeff Bedlington Greg Ebe Scott James Marty Maberry Rod Tjoelker

South Lynden Scott Bedlington Ed Blok Jeff DeJong Rolf Haugen Landon Van Dyk

Laurel Rich Appel Roger Blok Mike Boxx Jon Maberry Leroy Plagerman

Sumas Keith Boon Andy Enfield Terry Lenssen Brad Rader Rod Vande Hoef WHATCOMBUSINESSALLIANCE.COM | 57

special report: Wids expensive water issues. That made solutions difficult. “Whether it’s hydro-geologic (movement of groundwater in soil and earth) expertise and modeling, whether it’s a transfer of a right or a new one, leaders in ag realized they have to be in compliance with water law and share the costs together,” he said. Ed Blok of Blok’s Evergreen Dairy Inc. south of Lynden, who sits on both the board of the new South Lynden WID and on the county’s ag advisory committee, said, “In a sense, we’re sitting and waiting and seeing what happens after that (federal ruling). We as ag want to have a way to deal with that situation, whatever it is. We are interested in solutions that work for everyone.” Rod VandeHoef, a second generation dairy farmer on the Sumas WID board, concurred. “We (farmers and tribes) both want to live here. We’re both looking for the same thing, and how we get there is the difference. They need water for the fish; we need it for the cows and the land.” He believes both the tribes and the farmers can work together in a non-confrontational way to solve the problem. But the issue of water is much deeper than only who has the right to use it.

The Problem with Water Here WIDs have plenty of other problems to address. Regular flooding of grazing lands impacts livestock, as well as water quality in streams and tributaries. Drainage, fish habitat restoration, irrigation, deep

“I need water for our animals and irrigating our crops. That’s pretty important. Water quality issues are something I definitely want to focus attention on. If I don’t have water…and I can’t water my cows, I’m done.” — Ed Blok, Blok’s Evergreen Dairy in Lynden, South Lynden WID board of directors

aquifer exploration, stream flow regulation, water storage and outof-basin water transfers are some potential projects WIDs might explore. To fund these, each WID has proposed an assessment to its district members of $4 an acre for

“If I can’t water my cows,” Ed Blok said of his stock seen feeding here at Blok’s Evergreen Dairy south of Lynden, “I’m done.” (Photo by Mike McKenzie)

58 | BUSINESSPULSE.COM

2015, raising about $188,700 for all four groups. The six WIDs could choose to work together or separately, depending on their particular drainage basin. “Each area has its own challenges,” Blok said. “Some may be more concerned with water quality. Others may be more drainage-related. Each WID will be prioritizing what they want to focus on.” It seems counterintuitive to suggest there isn’t enough water to serve farmers, tribes, cities, industries, and agriculture in soggy Whatcom County. Everyone agrees there is enough water. The right question, according to Clarke, is the timing of the water. “At certain times, there is enough water, other times not enough,” he said. “The challenge is how to redistribute that supply of water, and manage it better when there’s enough or more than enough. An example might be storing ground water to use as mitigation for times when there isn’t enough.” Groundwater uses for wells might not impact the overall water availability, and perhaps ground water can be withdrawn without reducing the Nooksack’s volume, but both examples require further, and likely expensive study. VandeHoef irrigates part of his acreage, depending on the year. “If it rains during the summer, we don’t need as much. In the winter, we might have too much water, and if it stays on the land, it kills the grass.” Blok said, “I need water for our animals and irrigating our crops. That’s pretty important. I need that stock water. Water quality issues are something I definitely want to focus attention on. If I don’t have water, I’m in trouble, If I can’t water my cows, I’m done.” He said that water quality needs to be worked on, and farmers must “try to be better” at managing that issue.

AGRICULTURE BOX SCORE • Acres of Whatcom County land in farms: 115,831 • Agricultural production compared to other counties: 1 (out of 17) in Western Washington; 6 (out of 39) in the entire state; top 3% in the U.S. • Market value of dairy: more than $193 million • Percent of Washington red raspberries produced here: 85% • Percent of U.S. red raspberries produced in Whatcom County: 65% • Head of beef grazing on Whatcom County pastures: 6,000 • Ranking of beef production in the state: 4 (Information supplied by Whatcom Farm Friends)

WIDs Look Ahead The Ag District Coalition, organizers of the WIDs, has an ambitious vision – a Joint Board of Whatcom WIDs. “Say there is a big issue that concerns all of us. The joint board would be the body that deals with it. The voice for ag would be the Joint Board, made up of commissioners from the various WIDs. We hope that by next spring or summer

it would be up and functioning,” Blok said. The WIDs and Joint Board are quasi-government entities, elected representatives for farmers. Significantly, the WIDs would not supplant any of the more than 100 water associations already in place in Whatcom County, or any of the water planning processes currently underway. Many of these are single purpose organizations, while WIDs can

act on a variety of issues, including pursuing funding grants to solve slippery problems that aren’t going away. “We have a right and a duty to assert our water rights,” Henry Bierlink said. He is executive director of Farm Friends in the county. “We need to find ways to work together. I believe the tribes will welcome this. Our intent is not to be antagonistic and not to be negative in spirit. Farmers don’t always

WHATCOMBUSINESSALLIANCE.COM | 59

special report: Wids

Ed Blok in his office at Evergreen Dairy (Staff photo)

feel they’re treated fairly, and this is a response to that.” Joining together has been a longtime dream of the agriculture community, starting in the mid-1990s with a failed attempt at a countywide WID district.

Why This Matters The enthusiastic response by farmers to the WIDs is mirrored by the economic punch that agriculture delivers to Whatcom County. Agriculture, one of the county’s Big Three legacy businesses, along with fishing and forestry, supports hundreds of families and pours money back into the community. “I think people need to realize how big an impact ag has on the local economy,” Blok explained. “A tremendous amount of money flows through farmers. We get our milk check, and most all of it goes back out to the community. The margin we work on is very small. But we bring a lot of cash into the county, and it really goes out and multiplies, and helps out other businesses directly related to ag, and others that are not.” Rod VandeHoef concurred. “More and more people are coming to this county to live. With the tribes, the cities, industry, ag – we all need water. It’s good that we can get together with WIDs and figure out what we can do and how to best 60 | BUSINESSPULSE.COM

do it. This is a nice place to live and a nice place for cows, too. We have to work together, so we can carry on for several generations.” That agriculture needs its own unified voice and its own seat at the decision table is essential. WID supporters all agreed on that front. “Sometimes farmers don’t get as many funds as other groups,

Farmers could be on the losing end of this process, and that agricultural land eventually might be sold to restore salmon habitats. The WIDs are acting to avoid that possibility. because houses are more important,” VandeHoef said. “Bridges and roads are more important. Ag gets pushed to the back sometimes, and we hope WIDs can help change that.” Ed Blok suggested that on several issues, the farmers’ interests would align with those of the tribes. “We would definitely be on the same page. I know there’s some

concern out there, but I don’t totally understand it. We’ve been very focused on solutions that everyone can sign off on. That’s the mindset this whole thing was born out of. We understand that we’re not going to just get our own way and no one else will get anything. That won’t work. “Farmers are problem-solvers; that’s what we do all day long. We have a problem here, and instead of trying to ignore it, we’re trying to be proactive and look for solutions.” Attorney Clark said people shouldn’t expect water solutions to be in place in a year or even two. “Keep in mind water rights are an interesting and complex topic to people in ag as well as the public. Farmers are interested in figuring out water banks, exchange of rights, mitigations, how to improve fish habitats, and potential linkages between supply, drainage and habitat, for example.” Water rights ultimately will define both economic and environmental realities. Dealing with the range of interests and constituencies will take time and money. “Water rights are largely about history,” Clarke added. “They take a long time to unravel. It’s complicated. People focus on water rights and the potential conflict between users. Our view is looking not only at the rights, but also water quality and improving habitat in the Nooksack and its tributaries.” The WIDs aim is to protect a future for agriculture here, and preserve that postcard-pretty vision of rural Whatcom County: the berry fields, grazing cows, red barns, and restful rural vistas. “People like the open spaces and agriculture. It would be nice to keep it here,” VandeHoef says. “That’s why we want to work with everyone so we can all stay here.” (At publication time, Lummi Nation and the Nooksack tribe had not returned calls requesting comment on the WIDs.)

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Personally Speaking

Personally Speakingâ&#x20AC;Ś

with

Jesse Cantu 62 | BUSINESSPULSE.COM

Successful restauranteur Jess Cantu talks the art of slicing prime aged beef with Chef Michael Leaver at the company’s newest addition, Luna’s Bistro in Barkley Village (at left), and stands outside the Jalapenos headquarters on Pacific Street with his son, Daniel, who Jesse is grooming to take over the business when he retires at age 70.

Photos and Interview by Managing Editor Mike McKenzie

he bright-red sports car parked in front of a small yellow-frame house that serves as office space on Pacific Street in Bellingham has a tell-tale license plate frame. It reads: “Taco Whisperer.”

The owner of the car, and the business that appears on the sign above a window – Jalapenos Restaurants – is Jesse Cantu. For the best summary description of Cantu, we defer to John Gibb, the person who lured him to the Northwest. “Jesse,” said Gibb, who is managing partner of The Willows Inn on Lummi Island, and CEO of NutraDried Creations in Blaine, “is the epitome of a great American success story.” Jalapenos has three locations— Downtown, Fairhaven, and Barkley Village—and now has ventured into Italian food in Barkley with Luna’s

Bistro. The group was borne out of nothing, essentially, other than grit and a vision from boyhood in Monterrey, Mexico. Cantu arrived in the U.S. as an all-night dishwasher in a family Mexican restaurant in Houston, a young college dropout who spoke no English. He began wending his way through the food and beverage industry, to Minnesota, Chicago, Nashville, and back until Gibb asked him to help save Semiahmoo’s property in Blaine. After learning English as he grew in the business, and becoming a U.S. citizen in 1987, and after serving Pres. George Bush and Bill Clinton (before he was in office), and moving to Bellingham, Cantu faced a choice – move again, or remain here. He chose here, and on a shoestring and family love and loans he built Jalapenos the same way he and his family have made Mexican food nearly every day of his life – from scratch. WHATCOMBUSINESSALLIANCE.COM | 63

Personally Speaking SEEDS PLANTED Going to school I used to walk through the streets of downtown Monterrey, and I would see all the sequence of restaurants. From that age of 10-to-15, I decided that when I grew up a little bit more, I was never going to be hungry or cold. And there would always be plenty of food that I like to eat. Then when I worked in that Mexican restaurant I watched a lot of food being prepared, that’s when I knew that one day I would have my own restaurant.

MOVING ABOUT, UNSETTLED

At Luna’s, named for his granddaughter, Cantu speaks of the fine French wines, exquisite liqueurs and tequilas, and the ambience of fine dining that led him to go upbeat Italian after three popular Mexican restaurants. Is a steakhouse next?

was born in Monterrey, Mexico, and grew up without a father after the age of 10 – only my mom, grandmom, and four of us children. I went to college to become a civil engineer, but that lasted only one year because my family didn’t have the funds for me to continue.

1ST U.S. JOB – DISHWASHING My sister Elvia married a man from Houston, Texas, and this person’s father had a Mexican restaurant. I was out of school, and I wasn’t working. It was hard to find a good job. So my sister called and asked me, “Do you want to come to Houston and work with us?” I came to the U.S. when I was 23 years old and spoke no English. I started as a dishwasher working on the graveyard shift from 10 p.m. to 8:30 a.m., six nights a week. I did that for three years. When I left I was in charge of the kitchen.

LOVE OF FOOD Growing up with my mom and grandmom, they cooked outside with wood and charcoal. And we made everything from scratch—the tortillas, the salsas, and we grilled a lot, anything we could get a hold of. 64 | BUSINESSPULSE.COM

After about a year back in Mexico, and after spending the money that I’d made, I went back to Houston. But the restaurant wasn’t doing that well and didn’t have a job for me. A friend, co-worker, told me there was a lot of work in Minnesota, so we went to work there for several months – picking tomatoes in St. Paul. I decided that wasn’t for me, so we moved to Chicago.

FOOD & BEVERAGE TRAIL BEGINS…. In Chicago we met up with a friend from Monterrey, and he helped us find work. And my first job there was as a busser – a busboy at a private club on the 50th floor of the Sears Tower. That’s when I started learning English, and learned to like the fancy service and the food and the decorations, and all the silver on the tables, and the gold and brass.

A LETTER PAID OFF I moved back to Texas. But before I left, the manager of the private club gave me a letter of recommendation because they had those clubs all over America. Back in Houston, I went to a private club in a Shell Oil building downtown. They read my letter and said, “When do you want to start?” I said, “Well, I could come back tomorrow.” And they said, “What about tonight? You’re a good man, and we want you now.” I said, “OK, I’ll come back tonight.”

LEARNING THE ROPES I worked there for 10 years. I worked all the stations. I was a busser, then a server, then a bartender, then I was a maître d’. I left there with good knowledge about a fine dining room.

PRESIDENT BUSH SERVICE Next, I went with the Houstonian, one of the best known resorts in Texas, for 10 years. I was hired in the fine dining room. At that time, the Houstonian was George Bush

senior’s favorite place to stay with all his entourage. The food manager offered me the job as banquet manager, making more money, so I took it and was selected to be the person to manage the meetings and breakfasts and receptions for President Bush.

WYNDHAM/GIBB CONNECTION Wyndham Hotels & Resorts recruited me. Because of my background I was selected to handle a Sheikh’s visit as banquet manager. We had the best facility at that time, so we were host to many celebrities. One was most memorable. When President Bill Clinton was running for president he stayed at the Wyndham. I was in charge of food and beverage for all of his breakfasts, lunches, dinners, meetings, and receptions in many different rooms. I think I set a hotel record when I worked 36 hours and 20 minutes without going home. Many times I went into the washroom and splashed my face with cold water. That was about four years at the Wyndham, and that’s where I met John Gibb when he was general manager.

WIFE’S COLLEGE My wife Alicia, she has a degree in biology, and she wanted to go to school at Texas A&M in Galveston and become a marine biologist. I took a job at St. Luis Hotel & Conference Center in Galveston, and we lived in an apartment.

LURE OF THE NW One of my friends told me John Gibb was in Washington. When you work in this industry you keep contacts because everybody transfer so many times. He contacted me. He needed somebody with my skills to help with Semiahmoo. Wyndham had a five-year contract to manage that facility. (EDITOR’S NOTE: Semiahmoo Hotel & Resort was in receivership.) He made me an offer, and I took it. We

JESSE ENJOYS THESE.... YOU CAN, TOO The menu at Jalapenos lists an “Owner’s Favorite” consisting of carne asada (grilled steak) and bacon-wrapped shrimp, topped with melted cheese, sour cream, and guacamole. Jesse Cantu has other favorites, too: “The always-fresh salsa that’s different for everything – chicken, fish, pork, beef, some for vegetarians…hot, medium, and mild,” he said. “Where I come from in the north of Mexico, everything is grilled, so jalapenos and tomatoes go on the grill to make salsas. At the three Jalapenos we serve about 10 million pieces of chips a year, from about 2 ½ million torillas.” And at Luna’s Bistro? He grinned and said, “Chicken Marsala, my recipe….or the dry-aged steak.” WHATCOMBUSINESSALLIANCE.COM | 65

Personally Speaking didn’t have enough to pay for my wife’s tuition, and besides my wife always liked and wanted to come to the Northwest. At Semiahmoo I was in charge of the banquet department.

STAYING PUT After working there 3 ½ years, the contract with Wyndham was ending. They asked me if I wanted to move to another city. They said to look for a position with us and let us know which one you like. My wife didn’t want to go anywhere, and I didn’t either. I knew about a restaurant on Holly Street that was for sale. It was called the Blue Dolphin. It was a really good deal, so I scraped together the money and bought it, and that was my original Jalapenos.

FAMILY HELP FUNDING My wife had a job at the school district in Blaine. I needed $50,000, and I borrowed from some family members to get started. We never had a bank loan.

SWEAT EQUITY Also, I wanted to open a steak house or an Italian restaurant because that was really my background. But that was too expensive, instead I decided to open a small place where we could sell some tacos and salsas like we had when I was growing up. We did a lot of cleaning and painting. I did a lot of cooking. I worked the first six months without a day off, every day, open and close. Between 2-5 o’clock every day, if you came in, I would take your drink order, go make it and serve it, take your food order, and go cook it and serve it. And clean the tables and dishes in between. One-man operation, three hours a day.

for me. I didn’t want to tell my wife that I was failing and we were facing bankruptcy. We had a son who was 9. I used to go home, and go straight to the bathroom, and be really quiet, and would pray. And cry.

INSPIRED BY MOM My inspiration through that time was my mom, Maria. In Mexico she had four kids, and no husband, and she was cleaning three or four houses a day to support us. I told myself that if my mom could make it, I should be able to make it. She died last summer.

TURNING POINT? Business picked up by word of mouth. I was making sure the food was good and fresh, and was talking to people, making friends, and then people started coming back. That’s when you know in this business that you’re making it, when regular customers keep coming back.

LOCATION AND BELIEF One reason I like that location, I knew there was a plant for Georgia Pacific, and plans for a maritime park, and plans for improving the whole area around us. I knew there were other Mexican restaurants that were always packed. Somehow I knew that one day I would be just like them. I just had to keep going, keep going, keep going.

KEYS TO MAKING IT No. 1 in this business is you have to have passion. And you have to know about restaurants. You have to have the experience of dealing with employees, and customers, and how to deal with them. And, distributors. Everybody wants to sell you things.

IFFY, AT THE OUTSET

LEARNING THE BUSINESS

We didn’t have many customers at first. I didn’t think we were going to make it. It was really sad

All of the business operations side I learned from my background working in a lot of positions. I

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knew what it was like for the cooks on the line, and the servers, and the bartenders.

EXPANSION, SLOWLY We opened March 16, 1999. Fairhaven opened in December of 2008. Then, Barkley in April of 2010. One of the reasons for expanding was because of two of my best friends; we worked together in the banquet business in Nashville, at Opryland, and in Houston before that, and they were thinking about moving to Bellingham. I told them both, if you do I will open a restaurant for you to manage. One is still here. We call each other brothers.

GROWING STEADILY It’s not everything I expected, no, because I always like to make things better. Employees are happier when they have a challenge. Routine is what makes restaurants fall into bad times because they think they don’t have to do anything else. Lunch and dinner at the restaurants is our core business, but we’ll do catering when asked because I hate to say no. Some locations are seasonal. Downtown Holly is busiest in summer when people like to be by the water. Fairhaven depends on tourists. Barkley serves the neighborhood.

AND THE BOOKS? We have 81 employees (ending 2014). Over the years we’ve had about 2-3 percent (revenue) growth a year, minus or plus. The profit margin in restaurants is not very big. It pays the bills, and that’s basically all we want. There’s always enough. It’s more you do it for the passion.

LUNA’S, WHY ITALIAN? What happened is, I always have missed the wine list – fine wine and dining had always stuck in the back of my head. I was undecided between a steak house and

Personally Speaking an Italian bistro, and thought, well, maybe it’s better to find somebody who knows Italian food, how to make pastas and pizzas. Some people say to me, “Why do you want to change?” It’s time to do variety. You know, we have chains that have an Applebee’s, but can also have a Red Robin. It’s a corporation, all under the same umbrella, so we can diversify a little bit. We can show that our corporation is knowledgeable not only in Mexican food, which is our strong point, no doubt about it, but also to do other things.

AT FIRST… Luna’s is a process like every new restaurant. We had some problems the first month. People didn’t like the pizza, and a few other things. We immediately changed the taste. We’re pleased that people spoke up honestly to us about what they liked and didn’t like. We’re feeling really confident now to invite everybody

to try.

TAPPING THE INNER COOK When I was a fine food manager I used to cook tableside, everything – veal, pepper steak, flaming drinks, bananas foster, cherries jubilee, crepe suzette, chateaubriand sliced in front of the customer. Then serve cigars, expensive cognacs, a lot of Cristal and Dom Perignon, and French wines. That’s my background.

WHAT’S IN A NAME? I love jalapenos. Most of our salsas when I was growing up were made with jalapenos. The hotter the better. Luna is my granddaughter’s name.

AWAY FROM THE RESTAURANT I’m a family man. I don’t golf. I don’t fish. I just want to hang out with my family. A daughter Claudia and son Jose live in Houston. Our sons Daniel and Jorge live here.

Staff gathered at the Jalapenos home offices: from left, founder/owner and CEO Jesse Cantu, Mary Avelar, Daniel Cantu, chef Michael leaver, and Jorge Alvarez.

68 | BUSINESSPULSE.COM

My wife and I always do things together. We go places like the parks, go to a new restaurant, visit small towns and little stores, go hiking. Hobbies? Cigars, a good Scotch single malt or tequila. I love steaks.

WHAT’S NEXT? One more restaurant. We want five. It might be an aged-steak, or another Italian. I plan to work until I’m 70, if God allows me those years, and we’re grooming Daniel for taking over.

THE DRIVING PASSION I remember those restaurants when I was a boy, walking to school, and I’d stand in the window and look at the people enjoying it. I realized one of the best comforts in life was food and beverage. And that’s what I want to give to Bellingham – a little comfort with food and beverage.

Whatcom Business Alliance Fostering Business Success and Community Prosperity

BELLINGHAM BUSINESS ACADEMY The WBA has partnered with Faithlife Corp to announce the creation and launch on March 11 of this academy that will be a free value-added benefit to WBA members, who will attend along with employees of Faithlife. High-level national speakers will highlight four BBA sessions during 2015. Topics, sites, and times will be announced soon.

NW Health Care Linen EnviroStars, a state-operated and nationally-acclaimed program on environmental sustainability, awarded its highest level of certification to Northwest Health Care Linen. A specialty laundry in Bellingham, it is the only medically-exclusive linen facility among 850 businesses in the program.

VSH CPAs Krista Maas has been promoted to manager in the Barkley office in Bellingham. After earning an accounting degree Krista Maas at WWU, she VSH started at VHS in 2008 and obtained a CPA license in 2009. She resides in Lynden, where she and her husband run a berry farm.

Financial Plan Inc. This fee-only wealth management firm moved to Barkley recently after 17 years on Holly Street downtown. CEO James Twining said the company plans to add additional advisers and support staff this year. Nathan Twining stepped into 70 | BUSINESSPULSE.COM

Member News a full advisory role. Financial Plan also recently received recognition in Investment News for innovative use of technology.

FAITHLIFE CORP Glassdoor.com, a California company with more than 6,000 company reviews in its database with a mission of identifying available work at outstanding places, named Bellingham’s Faithlife Corporation in its Top 10 Places to Work. Faithlife in downtown Bellingham, a Top 10 for the 2nd straight year, fits into the small business category (fewer than 1,000) with about 450 employees. Employee reviews determine the outcomes. Bob Pritchett, Faithlife president and CEO, said in a news release, “Twenty years ago, we were just a few developers in a basement — now, we have…some of the best software developers in the country. Our fun and creative corporate culture has allowed us to build a stellar team of tech innovators.” In the last four years, Faithlife’s employee count has doubled and its revenue has increased 83 percent. Faithlife is unconventional: Its president and CEO dropped out of high school; no human resources department; a one-page company manual, and employees get unlimited vacation, an outdoor center, free coffee and soda, and flexible schedules. During recent months, Faithlife launched Logos Bible Software 6, the world’s most advanced Bible study software, and Noet Scholarly Tools, the world’s smartest humanities software. Faithlife also acquired Beacon Ads — the first self-serve marketplace for placing ads on religious websites.

THE WOODS COFFEE Recent announcements included the opening of the 15th location, and 1st in Skagit County, in Mount Vernon…and a partnership with Whatcom County locations of Haggen Northwest to put The Woods house-roasted coffee beans on the shelves. The announcement came jointly from Wes Herman at The Woods and John Clougher, CEO at Haggen.

WWIB PROFESSIONAL WOMAN of the YEAR In our Fall Edition (Oct. 2014) we published the finalists for the Whatcom Women in Business’s Carolyn Saletto Professional Woman of the Gym Star Year Award. The Sports Center award went to: Carolyn Saletto, owner of Gym Star Sports Center and Shooting Stars Preschool in Ferndale, and the former GymBus mobile gymnastics instruction for daycares and elementary schools.

PUGET SOUND EMPLOYEE BENEFITS Janet Vinson has been named Employee Benefit Account Manager, announced by the Director of Strategic Services, Janet Vinson John Frankland. Puget Sound Vinson is assigned Employee Benefits employee benefit plans and packages for business owners. This is part of a network providing guidance and solutions for financial needs and

the nationwide network of HD Vest Investment ServicesSM with about 4,800 independent contractors, 1.8 million clients, and managing $28 billion in assets.

BUILDING INDUSTRY ASSN

Displaying their Image Award (l. to r.): Heather Boyd, Marketing Assistant; Janelle Bruland, CEO, and Terell Weg, Director of Sales & Marketing. (Photo courtesy of Management Services NW)

goals, offered exclusively through Northwestern Mutual. Vinson hails from Seattle and has 20 years’ experience in the insurance industry, the last eight as a broker dealing with employers and their employees.

PEACEHEALTH Several announcements: President/Chief Mission Officer Alan Yordy will retire, effective June 30, after 25 years with the company; Nancy Steiger assumed broader duties, adding senior level oversight for Washington locations in Longview and Vancouver, and St. Joseph Medical Center has been named by Becker’s Hospital Review as one of 100 hospitals nationwide with great neurosurgery and spine programs. During Yordy’s 10 years of leadership the group doubled in size, and expanded many times. Steiger’s new roles take her long title to PeaceHealth Senior Vice President and Chief Executive Officer (CEO)/Chief Mission Officer for Washington and Alaska Markets. St. Joseph was listed among Duke, Emory, Johns Hopkins, and Mayo Clinic.

MANAGEMENT SERVICES NW Todd Ramsay, former Bellingham chief of police for 20 years, has become Regional Operations Manager. His experience also includes roles as a community trainer and presenter for the U.S. Department of Treasury. Ramsay is a past president of the board at Boys and Girls Clubs of Whatcom County, and founding board member at Whatcom Homeless Services Center. The Ferndale company, a onecall source for complete facility management in Washington, Oregon, and Idaho, also earned the Building Services Contractors Association International (BSCAI) Image Award a second consecutive year on the merits of marketing pieces’ attractiveness, design, power of message, creativity, and professionalism.

A local businessman became state president and the Whatcom County chapter of the BIA closed the year with installment of its 2015 slate of officers and board of directors. Monty Smith, owner of M. C. Smith Construction in Ferndale, was elected 2015 President of the BIA of Washington. New BIAWC officers: President, Mark Schramer, owner of Schramer Construction; 1st VP, Audrey Borders, Borders & Son Quality Roofing; 2nd VP, Craig Parkinson, Cascade Engineering Group; Secretary, Maria Callen, Silver Creek Group; Treasurer, John McDonald, Moss Adams; Past President, Cleo Callen, De-Watering Services LLC, and At-Large, David Simpson. Board:Brent Cowden, Cowden Gravel & Ready Mix; Phil Dyer, Sterling Real Estate; Dave Edelstein, Greenbriar Construction/Whatcom House Movers; Darcy Jones, Jones Engineers; Christopher Knudsen, Viewpoint Group; Jeff Morrison, Bank of the Pacific; Garrett O’Brien, Volonta Corp; Jean Sexton, iHR; Rob Staveland, Aiki Homes; Dannon Traxler, Langabeer & Traxler;, and Doug Van Beek, Van Beek Drywall

GENE BELL & ASSOCIATES Jenelle Kinder passed the Financial Industry Regulatory Authority’s (FIRA) exam that designates her as a variable contracts and investment company rep, expanding the firm’s services to tax and accounting clients. Kinder and owner Gene Bell are affiliates of

Please socialize with us on Facebook at both the Business Pulse Magazine page and the Whatcom Business Alliance page.

Guest Column: FREE-MARKET ENVIRONMENTALISM Todd Myers | Environmental Director Washington Policy Center The Washington Policy Center is an independent, non-partisan think tank promoting sound public policy based on free-market solutions. Todd Myers is one of the nation’s leading experts on free-market environmental policy and is the author of the 2011 landmark book Eco-Fads: How the Rise of Trendy Environmentalism is Harming the Environment. His in-depth research on the failure of the state’s 2005 “green” building mandate receives national attention. He recently became a contributor to The Wall Street Journal.

A brighter idea for light bulbs Replacing ‘feel-good’ flourescents (and their feels-bad mercury)

[EDITOR’S NOTE: This column was inspired by a call to Business Pulse from co-owner Ty McClellan of Hardware Sales in Bellingham. He revealed contents of a mandate from the State of Washington to affix a tax of 25 cents to each compact fluorescent light bulb the store sells – which, of course, will be passed along to the customer – yet another example of overreach in government regulations.]

even years ago, thenMayor Greg Nickels told the children of Seattle that Santa’s life was in danger. Warning that polar ice was melting due to climate change, Mayor Nickels handed out stickers to kids reading, “Save Santa,” to promote the city’s climate policies. 72 | BUSINESSPULSE.COM

At the city’s annual Christmas tree lighting he also handed out compact fluorescent light bulbs (CFLs), those curly lights that for a short time were the symbol of environmental consciousness. The lights are more energy-efficient than traditional incandescent light bulbs, but they have some problems. Many people complain about the fact that the CFL lights don’t turn on immediately and they emit poor light. And they contain mercury. Indeed, the EPA even warns consumers about CFLs breaking, suggesting that “people and pets leave the room,” and that people should “air out the room for 5-10 minutes by opening a window or door to the outdoor environment” before cleaning up. The case of CFLs is emblematic of how the symbolism of environmentalism ends up doing more harm than good for the environment. First, according to the National

Snow and Ice Data Center, more arctic ice exists today than in 2007 – the year that Mayor Nickels told children that Santa’s reindeer would soon drown. The “Save Santa” campaign was part of the mayor’s effort to get Seattle to meet the goals of the Kyoto Protocol: reducing the city’s CO2 emissions to a level 8 percent below 1990 levels. He failed. When he left office Seattle was above the limits, and emissions were increasing. That, however, is what happens when public officials base a policy on cheap symbolism and phony science. Politicians often confuse theatrics with thoughtfulness, and the environment and taxpayers pay the price. Compact fluorescent light bulbs were an attractive symbol because they are so recognizable. Everyone

recognizes the curly bulbs and their intended meaning – “I care about the environment.” That is their power. That is what made them an attractive symbol for the former mayor and others. Even if we ignore the environmental risks associated with mercury contamination, CFLs are still more powerful just as a symbol than in actually helping the planet. Seattle City Light is very aggressive about touting its status as the “Nation’s Greenest Utility,” in part because Seattle’s electricity is carbon-free – thanks primarily to hydro energy and nuclear energy. Reducing energy use where electricity is already carbon-free is of marginal benefit at best. Ironically, CFLs weren’t the leading technology for very long. Light-emitting diode lights (LEDs) quickly surpassed them. Although LEDs cost more initially, they save more energy, last longer, and provide better light than CFLs. Many think LEDs perform superior even to incandescent lights. CFLs were environmentalists’ technology of choice for only a few years. Ironically, however, due to the mercury in the bulbs, the legacy of CFLs continues long after they have been surpassed technologically. Those who sell compact fluorescent light bulbs now face a requirement to collect a special fee from consumers strictly to fund efforts to properly dispose of the light bulbs. Many of the bulbs are already in

landfills and have been simply thrown away, which the EPA and other environmental agencies say poses a risk to the environment. The very CFLs handed out by the former mayor of Seattle to help the environment are now considered dangerous enough to require an additional fee to deal with potential environmental damage. Each one of us cares about the environment. We tolerate the rain and clouds to bask in the beauty of

the place in which we live. We are surrounded by a culture that extols the wonder of bald eagles, towering forests, and clean water. With so much invested in the natural world that surrounds us, we should be insulted and critical of people who succumb to cheap political theatrics that too often end up undermining the environmental values we cherish.

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Guest Column: small business Jennifer Shelton | Western Washington University Small Business Development Center Jennifer Shelton is a Certified Business Advisor and Certified Global Business Professional for the Washington Small Business Development Center (SBDC) at Western Washington University. She holds an MBA from WWU and a BA in communications from Seattle Pacific University. Jennifer brings 20 years of work experience in business development, and over 11 years with WSBDC. Her work involves empowering business owners to create and sustain successful business ventures.

Finding funding Big question in business growth: Who has the bucks?

[Editor’s Note: The examples in the column come from actual situations with SBDC customers. We have withheld their names by request to protect their privacy.]

ne of the top five issues we consistently hear from the businesses we consult with is, “I’m looking for money to start, grow, or sustain. Where do I find it?

Business commercial bank loans have become much more accessible during the last couple of years. Many other options exist that businesses might not be aware of.

Asset-Based Lending Accounts receivable, invoice, or purchase order financing can help fill the gap between cash outlay and receipts when filling customer orders. Some lenders also will lend on inventory assets. Example: XYZ Company has name-brand customers who 74 | BUSINESSPULSE.COM

place big orders. XYZ has a very large accounts receivable balance. They need financing fast to meet demand, but have no assets or long business history to borrow against. Accounts receivable financing provided short-term capital with which to perform their services until the customer paid them, usually within 60 days. Some of our local commercial banks stay active in this type of lending market, or can refer you to an asset-based lender.

Hard Money Hard money features available cash at high annual percentage rates, and payments withdrawn from your bank account – as frequently as daily. Borrowers with high gross profit margins, short pay cycles, and large cash flows make the best candidates.

Factoring Factoring lenders provide you upfront cash against customer receipts. With accurate pricing and careful

analysis of costs, factoring allows a manufacturer to offer generous payment terms to customers (net 60 or longer) while quickly collecting discounted cash. You won’t receive the payments from your customers, your lender will. Therefore, careful cash-flow planning is essential. Factoring lenders have a strong Web presence, so exercise due diligence with your favorite search engine.

Export Financing & Incentives The fastest-growing customer base lies outside the United States, and specialized export finance products can help you access the international marketplace. Example: ABC Manufacturing Company sells its product in eight countries abroad. ABC utilizes low-interest financing from Export Import Bank to insure overseas receivables, giving the manufacturer the opportunity to offer payment terms to good customers and thereby increase sales.

The U.S. Export Import Bank has a branch in Seattle. Contact John.Brislin@exim.gov, 206-7282264. or www.exim.gov. Another source is the Export Finance Assistance Center of Washington: www.efacw.org, or Doug.Kemper@efacw.org, 206-2566127.

Export Voucher The Washington State Department of Commerce offers travel grants for companies to participate in trade missions. Called a State Trade and Export Promotion (STEP) grant qualifying companies can obtain cash to pursue trade opportunities. Contact Julie. Monahan@commerce.wa.gov, 206256-6147.

Stepping up for Startups Commercial banks definitely have become more open to financing new businesses, yet it’s generally best to start closer to home. When friends and family invest in a startup venture, entrepreneurs can show some traction in their business. With some sales and cashflow history, it becomes easier to attract additional capital. For examples, watch Shark Tank on TV.

MicroLoan Programs Small-loan funds from alternative lenders support creative business financing, such as Mercy Corps or Community Capital Development. These are called microloans, and they range from $5,000-250,000. Example: Entrepreneur X worked as a hairstylist. She had a loyal following and decided to take the next step, and she opened her own salon. Having never owned or managed a business and having a small amount of collateral made it challenging to for her to get a traditional loan. Mercy Corps provided her with funds to secure a location, purchase equipment and inventory, and jump-start her business.

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Crowdfunding

Equity Financing

Crowdfunding underwrites a project or venture by raising contributions from a large number of people, typically through the Internet. Originally developed as a way to fund art projects, crowdfunding has gone mainstream for developing new products and business startups through rewardbased, equity-based, or credit-based financing. More than 1,000 crowdfunding sites operate, such as the popular Kickstarter. Example: A local, family-owned business developed a new product, but lacked the capital necessary to take it to market. They worked with us on a Kickstarter campaign and successfully raised $70,000, which not only achieved their marketing goal, but also brought them additional customers and fans.

Angel investors and venture capitalists abound, also. Angels invest with individuals and groups, generally in the $50,000 to $3 million range, and tend to maintain a very close relationship with a company as it enters the market. Venture capital usually starts at the $7 million level, based on business-model analysis and merger and acquisition opportunities.

SCOR A robust alternative to crowdfunding is the Small Company Offering Registration (SCOR) offered through The Washington State Department of Financial Intuitions (DFI, dfi.wa.gov). This registration allows an entrepreneur to solicit funds legally with fewer limitations than the new crowdfunding regulations. Even though SCOR has been available 15 years, it remains little-utilized though it is businessfriendly, and you receive great support from DFI staff.

Local options In Whatcom County, many sources will help you develop your investor pitch, such as Global Entrepreneurship Week Startup Weekend, Washington Technology Alliance First Look Forum, Bellingham Angels Group, or Invent Co-Working Pitch Fest. If you are a food-based or valueadded agriculture business, Slow Money organizes investors and donors who invest capital to smallfood enterprises, organic farms and local food systems. Take a look at the Whatcom County Investors Network for more information. No matter what stage of business you are in, or what your industry or capital needs, you can find many opportunities to obtain financing. For a list, check out the Guide to Loan Programs for Whatcom County Businesses available from the Small Business Development Center website. And call us any time for assistance. WHATCOMBUSINESSALLIANCE.COM | 75

Guest Column: Human Resources Rose Vogel | HR Programs for SHRM Rose Vogel is a vice-president co-chair of the Programs Committee for the local Mt. Baker Chapter of the Society for Human Resources Management (SHRM). She serves as director of human resources for EcigExpress in Bellingham, a company with 34 employees. She is a graduate of WWU-Fairhaven and has a masters degree in Human Resources labor relations.

$afety pay$ big dividend$

id you know: The state of Washington requires companies with more than 10 employees by law to form a safety committee, and to post monthly safety meeting minutes. Those minutes must be posted in a location visible to all employees, and must be kept accessible to everyone in the workplace and on file for one year. This is in any work environment, not just places containing potentially dangerous equipment, materials, or work duties. The most benign appearing space must follow state safety law. The structure is outlined clearly and specifically. Safety committees comprise both employee-elected and managementnominated members. There must be an equal or greater number of employee-chosen representatives than management representatives (who usually are appointed or they volunteer). The employer has the responsibility to ensure that employees understand their duty to watch out for each other’s safety and to participate in the company safety efforts.

The OSHA 300 log: What is it? When and where should it be posted? 76 | BUSINESSPULSE.COM

Occupational Safety Health Administration (OSHA) Form 301 Injury and Illness Incident Report is one of the first forms you must complete when a recordable workrelated accident or illness occurs. Employers must post the OSHA Form 300A February 1-April 30 of the year following the year covered by the form. The OSHA 300 Log must be posted visible to all employees, and if no accidents occur in a given year then a 300A summary takes its place. Employers are required by state law to keep OSHA forms for 5 years. State of Washington Department of Labor and Industries Experience Ratings is a system which factors what an employer will pay for lost time because of accidents. This is calculated on three factors: 1. The type of work performed; 2. The amount of recordable accidents, and 3. Number of hours worked.

COMMON SITUATIONS for observing safety – eyes, and machinery. According to Prevent Blindness America, more than 2,000 people injure their eyes at work each year. About 1-in-10 injuries requires one or more missed work days to recover. At least 10-20% of these work-related injuries will result in temporary or permanent vision loss. Our company recently acquired a forklift. Reasons were twofold – saving time, but mostly saving

backs. We move hundreds of heavy boxes in and out and around, constantly. We don’t have a loading dock, so that requires a lot of heavy lifting because, in the case of shipments, the UPS, Fed Ex, or USPS workers aren’t allowed to lift heavy stuff up into their trucks. In operating forklifts, you should create an operating manual and learn all rules that apply to your workplace. Rules vary based on whether the forklift is electric, or runs on propane. Forklift manuals should include inspection, repair, maintenance, and servicing, according to WAC 296-863-300. You also should know all the little things, such as wearing a safety vest, a hardhat, a seat belt, and having a working, flashing warning light on the forklift. Also at our facility we have a science lab, and staff that works with a specific chemical, a corrosive. Therefore we have a Chemical Hygiene plan tailored specifically for our facility. A sample of our plan:

STANDARD OPERATING PROCEDURES (SOP) For laboratory work at ECig Express using hazardous chemicals, SOP includes various engineering control measures such as laboratory fume hood, maintenance procedures for these engineering controls including testing proper function of such equipment, the use of appropriate Personal Protective

CHECKPOINTS FOR SAFETY – Notice that warehouse forklift operator Jarett Pangelinan has his seatbelt buckled, his safety-striped vest on, and the warning light going on the back of the vehicle. (Photo courtesy of eCig Express)

Equipment (PPE) and maintenance of such equipment. Our specific procedures are outlined in Section E of Appendix A of 1910.1450, listing specific areas of awareness: Accidental spills; avoidance of routine exposure; choice of chemicals used; eating and drinking; smoking; caution in use of equipment and glassware; horseplay; housekeeping of personal belongings; wearing personal protection (aprons, gloves, safety glasses, even shoes possibly); unattended operations; use of a hood; waste disposal and storage; working alone (never allowed); and even exiting the room. Additionally the plan contains company rules for a medical program; for hazard identification; for emergency response, and for recordkeeping rules. The bottom line of having a safety committee and zeroing in on an injury-free workplace is personal well-being and cost savings. Safety pays.

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Guest Column: labor market Erin Shannon | Small Business Director Washington Policy Center Erin Shannon became director of the Washington Policy Center for Small Business in January 2012. She has an extensive background in small business issues and public affairs. The Center improves the state’s small business climate by working with owners and policymakers toward positives solutions.

Will a High Minimum Wage Create “Automation Nation”?

he term “flipping burgers” is often used to describe the entry-level jobs for workers with few other prospects. Fast food jobs, which currently employ nearly 4 million workers, are typically filled by young and low-skilled people who gain valuable on-the-job experience that leads them to higher wages. Thanks to the political push for a $15 minimum wage though, low skill workers may soon be denied opportunities to work.

When government mandates a high minimum wage, it creates the economic incentive for employers to replace people with machines. Take fast food icon, McDonalds, for example. After posting a grim third-quarter drop in earnings and facing mounting pressure to pay workers a $15 “living wage,” McDonald’s plans to move toward 78 | BUSINESSPULSE.COM

automation. It’s easy to understand why McDonalds would turn to automation. The Golden Arches has been targeted by the $15 minimum wage political movement. The company, which provides around 1.3 million entry-level jobs to low-skilled workers in the United States, has been boycotted, protested and generally vilified for not paying higher wages. Labor-backed groups have sought to pressure and embarrass McDonalds, painting the company as trapping workers in low-paying jobs (despite the fact that twothirds of all minimum wage earners receive a raise within one year). Supporters of a higher minimum wage argue employers like McDonalds should simply pay higher wages, covering from profits or higher prices on consumers. McDonalds faces a 30% decrease in profits on declining revenue, so it is impossible for it to absorb a dramatic increase in the cost of labor, be it 39% or 107% (from $7.25 to $10.10 or to $15, respectively). Increasing prices at a time when customers are spending less is not likely to pencil out either. In fact, McDonalds has already increased

prices by 3% in the past year in response to rising meat and cheese costs. The famous “Dollar Menu” has been renamed the “Dollar Menu and More,” because some of the menu items now cost more. Increasing prices at a restaurant built on selling low-cost meals to budget-conscious diners doesn’t work. When prices rise, cost-conscience customers simply eat elsewhere or stay at home. When the law raises costs, companies must seek a solution, like substituting machines and technology for people. McDonald’s says it will begin introducing automated ordering next year in many of its U.S. stores. This means fewer workers will be around to ask diners, “Want fries with that.” Customers will use a touch screen to order and pay for their food. The company has been using such technology in Europe for years. In 2011 the fast food chain installed 7,000 touch-screen kiosks that render human cashiers unnecessary in high-wage European countries. Every McDonalds in France has a self-order kiosk, which means the company has to employ

significantly fewer workers in a country where the minimum wage is $12.22 per hour. Along with its high minimum wage, France has a consistently high unemployment rate of over 10%, and chronic youth unemployment has led to unrest. University of Oxford researchers published a report last year predicting a 92% chance of both the fast food-preparation and fast food service becoming automated in coming decades. That future may arrive faster than predicted. Restaurants around the U.S. are exploring automation to cut costs and improve productivity; Applebee’s is using 100,000 tabletop tablets for ordering and payments, Chili’s has deployed 45,000 tablets on tables, and Panera Bread will replace its cashiers with kiosks by 2016. Domino’s, Pizza Hut and Chipotle are experimenting too. One company is promoting a machine that can freshly grind, shape and custom grill 360 gourmet burgers per hour, no human labor needed. Alpha, the burger-making robot, can even freshly slice and dice the pickles and tomatoes, put them on the burger, add condiments and wrap it up. "Customers could just punch in their order, pay, and wait at a dispensing window." The maker says the machine pays for itself in a year. Bragging that Alpha "does everything employees can do, except better," the company cofounder says Alpha "isn’t meant to make employees more efficient. It’s meant to completely obviate them." Advocates of “living wage” laws say they care about workers. But thanks to their political demands many entry-level jobs that give workers the experience they need to earn higher wages won’t exist in the near future. Instead of asking “do you want fries with that,” these unskilled workers will be asking “are you hiring?”

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Scene on the Street

Scene

on the

Street

Slim and his best gal “What’s their names?” “His name is Slim.” “And hers?” “You name her….” That was the conversation at Stewart’s Internet Consignment Shop, one door off a corner of Cornwall & E. Chestnut in downtown Bellingham. “They’re the face of our business,” Randy Stewart said of the life-sized characters who sit on the sidewalk at the storefront and cause heads to turn in double-takes. Stewart founded the shop about five years ago, specializing in resell on eBay. Chris Goodell, whose specialty was in sports collectibles, partnered with him three years ago. They list more than 3,000 items on their web store, most of which – collectibles, nostalgia pieces, plus about anything people want to sell. “If we can establish value, we’ll get it sold,” Stewart said. Selfies with Slim and His Gal are welcome. [Drive-by photo by Mike McKenzie]

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ADVERTISER INDEX Archer Halliday . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 Bank of the Pacific . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65 Banner Bank . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 Barkley Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84 Bellingham Bells Baseball Club . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51 Best Western Lakeway Inn . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82 Big Fresh . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67 Chmelik Sitkin & Davis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31 Dewaard & Bode . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 Faber Construction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59 Hardware Sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41 Heritage Bank . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 Hotel Bellwether . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 Industrial Credit Union . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 Invent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69 Kulshan Brewing Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 Larson Gross . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35 Laserpoint Awards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43

Northwest Propane . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29 PeaceHealth St. Joseph Medical Center . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34 Port of Bellingham Real Estate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35 Print and Copy Factory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29 Q Laundry . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79 ReBound Physical Therapy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54 Rice Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79 San Juan Airlines . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73 Saturna Capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 Sig's Funeral and Cremation Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75 Skagit Bank . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83 TD Curran . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 Umpqua Bank . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55 VSH . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77 WECU . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25 Western Construction Resources . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45 Whirlwind Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39 Windows on the Bay . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53

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