Business Pulse Magazine: Summer 2013 by Business Pulse magazine

Obamacare: $1.85t ‘Train Wreck Coming’

MAGAZINE

Bees to Bible Bob Pritchett

born into business

Summer 2013

The Job

Creators

Top 75 Whatcom County’s

Steve Swiackey CEO of No. 8 Samson Rope

Private Companies

Water rights issues loom Who gets first drink—fishers, farmers, residents?

Proof that over-regulation chokes small business

Guns & Ammunition

Econ 101: Supply & Demand

The Publication of The Whatcom Business Alliance

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TABLE OF CONTENTS

Everybody Needs a Drink

The Lummi and Nooksack tribes have asked for a federal ruling on water rights in Whatcom County to protect their salmon and other fisheries in the Nooksack River Basin. Farmland needs that water, too, to sustain crops. Their peak seasons coincide. Many viewpoints clash over one of the most difficult issues lying ahead for commerce.

Photo courtesy of Whatcom Farm Friends

Need a Lift?

With 32 vehicles, Bellair Charters and Airporter Shuttle have plenty of room for all of their passengers. And according to owner and president Richard Johnson, the ridership recently passed 3 million, so they need all the space they can get. For nearly three decades passengers have been transported on the roads to and from from SeaTac and Yakima, and even when a bridge collapsed in Skagit County, no one was late for a flight.

Spa for Dogs

K9 Lap of Luxury in Lynden welcomes all dog breeds. Whatcom County’s only warm water therapy pool for dogs has had 3,640 swims since it opened in 2009. With heated floors and circulation-stimulation massages, owner Carrie Lane helps furry friends heal and relax their muscles. Business on the Lane’s 14-acre property doesn’t stop with the spa. There are also boarding kennels, an auto repair shop and farmland for lease.

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All in the Kam Family

Kam Sihota founded KamWay Transportation at the age of 28. Within five years, the company had 35 employees and $34 million a year in sales. With six of its own trucks and 17 trailers, the business has now expanded wherever the North American Free-Trade Agreement (NAFTA) allows. From humble beginnings, Sihota’s business has grown at an average rate of 33 percent a year, and keeps on rolling.

Anderson doubles with added services

If you need a one stop shop for paper, boxes, wrapping, packages, supplies, and shipping, Anderson Paper & Packaging is the place. Started 21 years ago by CEO Rick Anderson, the company is quick and personal and also recently landed a $1 million contract in Seattle and established a presence in Renton. With more than 1,500 buyers, the company is now among the top 50 free-market businesses in Whatcom County, and that’s a wrap.

An Exact Science

Since its start in 2006, Exact Scientific Testing Laboratory in the Irongate district of Bellingham grosses more than $1 million a year. The lab, founded by Kent Oostra and Travis Walkup, offers microbiology and chemistry testing for leading food and natural food for environmental clients to comply with rising government regulations. Seven years after its start, you could say they’ve got steady growth down to an exact science.

Industry Report: Guns & Ammunition

Search high, search low, and probably wait in line. That’s the story line in the firearms marketplace as fervor rises over Constitutional rights, military hoarding, federal and state regulations, and personal protection. Several professionals share their thoughts about the paradox of the rise in gun permits and NRA, and the scarce supply.

WHATCOMBUSINESSALLIANCE.COM | 5

TABLE OF CONTENTS

Cover Story: Top 75 Private Companies

As CEO and former owner, Steve Swiackey (cover photo) had led Samson Rope in Ferndale to No. 8 on our annual list of the leading revenue and job creators in Whatcom County. Samson Rope typifies the success stories of these 75 private enterprises that provided more than $3.1 billion in gross sales and 13,000 jobs during 2012. Swiackey, an industrial engineer out of Northeastern University, started with Samson Rope on June 9, 1972 as assistant plant manager in Shirley, Mass. He accelerated to plant manager in 1972 and vice president of operations in 1974. Ten years later he bought the company. “It was doing $18 million,” he said. “Last year we did about $87 million, and this year we’re projecting around $93 million.” This year Samson Rope is completing construction on a large center for testing, research and development, unique to the industry. Swiackey said that the firm is operating on a five-year plan of energy initiatives —such as mining, off-shore oil and gas, a project in Australia. Working four months a year in Ferndale headquarters (the company moved there in 1988) and eight in California, he deals with strategies and new markets. His son, Mark, is vice president for operations.

Steve Swiackey, CEO, Samson Rope—No. 8 on Top 75 list. (Photo by Michelle Manson)

Guest Columnists

While Samson Rope stands among the stalwarts of our Top Private Companies list, along with several others such as Haggen, Alpha Technologies, Grizzly, and Exxel Pacific, our grouping this year expanded from 50 to 75. Enjoy perusing the list of companies that boost prosperity in Whatcom County. (Cover image by Mike McKenzie)

32-35 & 82...

Our guest columnists dial in on water rights (p. 32, 34), mid-year grade card on the economy (p. 56), and starting on p. 82—crisis management, Obamacare ‘train wreck’ fallout, over-regulation of small business, heretical Lean practices, light-bulb environmentalism, and 3D printing.

Managing Editor: Mike McKenzie Graphic Designer: Michelle Manson Subscriptions: Janel Ernster Administration: Danielle Larson Feature Writers: Steve Hortegas Sherri Huleatt Cheryl Stritzel McCarthy

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M A G A Z I N E The Publication of The Whatcom Business Alliance

Special Contributors: Big Fresh Media Gerald Baron Laura Bostrom Randall Benson Don Brunell Hart Hodges Tony Larson Lydia Love, WWW Intern Ken Mann Dennis Murphy Todd Myers Erin Shannon Cover Photo: Mike McKenzie

Photography: K9 Lap of Luxury Mike McKenzie Michelle Manson Samson Rope Whatcom Farm Friends Kam-Way Trasportation Bellewood Acres Ad Sales: Catherine Sheard Randall Sheriff

For editorial comments and suggestions, please write articles@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 © 2013 – Business Pulse Magazine. All rights reserved. POSTMASTER: Send address changes to Business Pulse Magazine, 2423 E Bakerview Rd., Bellingham, WA 98226.

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Dave Adams, President Emergency Reporting

Randi Axelsson, Sales Manager Silver Reef Hotel, Casino & Spa

Janelle Bruland, President / CEO Management Services NW

Kevin DeVries CEO Exxel Pacific, Inc.

Greg Ebe President / CEO Ebe Farms

Andy Enfield Vice President Enfield Farms

Brian Gentry, Manager Community & Business Services Puget Sound Energy

John Huntley President / CEO Mills Electric, Inc.

Sandy Keathley Previous Owner K & K Industries

Paul Kenner Executive VP SSK Insurance

Becky Raney Owner/COO Print & Copy Factory

Jon Sitkin Partner Chmelik Sitkin & Davis P.S.

Doug Thomas President / CEO Bellingham Cold Storage

Kathy Varner CEO VSH, Certified Public Accountants

Karen Winger Senior VP, Commercial Banking Wells Fargo Bank

Not Pictured: Guy Jansen, Director Lynden Transport, Inc.

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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.

Who are the job creators in Whatcom County…and why do they matter? A

couple weeks ago, the Whatcom Business Alliance (WBA) hosted one of its regular industry tours at Alcoa Intalco Works in Ferndale. These tours allow our members, elected officials, and other area leaders to experience for themselves the impact that the tour host organizations have on our community.

County residents, both directly and indirectly, catches the flu. However, a rising tide raises all boats. The WBA is interested in raising the tide by helping eliminate obstacles that might be stifling business success in our region. The WBA is focused on facilitating business success and community prosperity. I invite you to join us. Our members come from virtually every industry in Whatcom County. They include the largest local employers and the smallest. I encourage you The visitors see to visit our website first-hand some www.whatcombusiof the significant nessalliance.com and innovations in join our leadership Whatcom County network. If you do business that it now, you’ll be bring value to the invited to our lunmarketplace. cheon and industry The plant in tour on July 17. Ferndale employs We’ll be touring two about 640 while of the most sophisoperating at twoticated and innovathirds capacity. tive berry farms/ The average wage, Jair Furnas, director of human resources at Alcoa Intalco Works, guiding the tour. manufacturing faciliincluding benefits, (Staff Photo) ties in the country, is $105,000 a year. located in Lynden. Alcoa’s Intalco our local economy. When the You’ll leave with an amazing operation supports approximately business community gets a cold, understanding of the innovation, $118 million in local personal tens of thousands of Whatcom impacts, processes, opportunities, 10 | BUSINESSPULSE.COM

income, $5 million in local taxes, $240,000 in annual charitable giving, and they encourage and support their employees in providing thousands of hours as volunteers to local organizations each year. When Alcoa Intalco and other companies in Whatcom County are successful, the community prospers. When they struggle, so does

and challenges faced by this $400plus million local industry. Business Pulse Magazine is the official publication of the WBA. In this issue, we feature a list and profiles of many of the most successful local companies. We call them the Whatcom County Top 75. They are the top 75 privately-held companies with their corporate offices located in Whatcom County.

It’s vitally important that the local population and elected officials understand the value of facilitating the success of companies like our Private Top 75. There is no better solution for job creation and economic prosperity.

has grown from $17 million at a time when he owned the company. According to the latest U.S. census, 44 percent of net job growth comes from companies the size of our Top 75. It’s vitally important that the local population and elected officials understand the value of facilitating the success of companies like these. There is no better solution for job creation and economic prosperity. We also provide a 30,000-foot view of the water rights issue in Whatcom County. While this matter has been ignored largely, it is vital, particularly to the county ag industry. We plan to bring a lot more attention to this issue in the future. You’ll find guns and ammo to be an interesting read. In my college economics classes, guns and butter were used to explain the law of supply and demand. Today, a reallife example is guns and ammo. Popular handguns like the Glock 19 require a wait of a couple

months or more. Once you get the gun, the ammo is very scarce. Prices have risen and retailers are rationing. The up side: If you invested in ammo companies a year ago, your stock is up 400 percent, and it’s creating an economic opportunity for local gun retailers. You’ll also enjoy our Personally Speaking with Bob Pritchett. Bob is a member of the WBA board of directors and its executive committee. How he built a software powerhouse is interesting, but I think you’ll also enjoy his start as an entrepreneur—when he was 6 years old. For more photos and information about many of our featured subjects, visit www.BusinessPulse.com, and for WBA news, events, and updates visit www.WhatcomBusinessAlliance. com and register for our free newsletter. We also update on Facebook, Twitter, and Linked In.

Enjoy the reading!

Their sales range from $5 million up to over $600 million. They employ approximately 13,000 people locally and account for nearly $3.5 billion in direct sales, all of which multiplies through the economy each year. These mid-market companies add more jobs in the community than any other. Their success is essential to Whatcom County’s economic future. Samson Rope stands as a prime example. The company came here in 1988 from Massachusetts, but its roots reach back 135 years and it has the oldest, active registered trademark in the United States (1884). Samson Rope employs more than 200 locally (310 total) and they reported more than $87 million in revenues during 2012. Under CEO Steve Swiackey (on our cover)—who represents 41 years with the company as it symbolizes the Top 75 as leading job creators in Whatcom County—the business

WHATCOMBUSINESSALLIANCE.COM | 11

Personally Speaking ... TITLE

with

Bob Pritchett Bob Pritchett, CEO, Logos Bible Software

f an entrepreneur gene existed that foreshadows business acumen, Bob Pritchett, CEO Logos Bible Software, would carry it. Growing up in a New Jersey family of business creators, his first start-up came at age 6.

Interview and photos by Mike McKenzie 12 | BUSINESSPULSE.COM

Now he owns Logos Bible Software, 300-strong in Bellingham. This year the former software programmer earned our Whatcom Business Person of the Year Award. Recently, Pritchett sat in his office on the top floor point of the historic downtown Flatiron Building and, in an informal conversation with Business Pulse managing editor, Mike McKenzie, he ruminated about various phases of his life growing up in and into business.

On creativity

On running a business

I don’t fancy of myself as terribly creative. We employ some really creative people. I’m somebody who pushes to talk about what we should do, and make it happen. Like most business leaders I’m making the organization move ahead. Sometimes that is about equipping people. About removing obstacles. About encouraging or inspiring. Whatever it takes to make stuff happen, to move it forward

I expected to. The first thing I ever did was when I was six. Then I did stuff in fifth grade that was really more like a real business – spread sheets, tracking my cost of goods. I can’t really remember a time that I didn’t assume that when I got older that I’d be in business. [See sidebar on pg. 16]

On entrepreneurial leanings My business leaning was inspired by my parents. My dad is an entrepreneur, his dad was an entrepreneur, my mom was an entrepreneur. So I grew up in that mindset. When I talked about an idea, my parents would encourage me to do it instead of just talking about it.

Lineage My grandpa started a real estate business and eventually had five offices. My dad joined him in sales. Then he started a software company in the ‘70s that computerized real estate offices. Eventually, my grandfather joined my dad and they became computer distributors in the early ‘80s, back in the very beginning of the personal computer revolution, selling PC technologies and networking. I was 10, and I grew up in that office. Mom was helping with dad’s business as office manager. My dad’s always been a sales guy. She was the church librarian as a volunteer, and she started a software company, Librarian’s Helper, to print cards and spine labels for library books. (Editor’s Note: Pritchett’s business continues to revolve around family. His father Dale, his mother Jenni, and his younger brother Dan all work at Logos in key positions.)

I enjoy doing business as a concept. I like other people’s businesses. I like business itself. This is where people get employed, right? This is where people find purpose. Provide for their families. Learn new skills. And, accomplish things. Business philosophy I don’t know that I have one. Bill Gates (at Microsoft) said, “Business is easy, it’s just math.” In terms of business itself, that’s true, right? This isn’t unique. Thousands of businesses operate within 50 miles of us, and in some ways we’re all the same. Doing different things, delivering different products, but we provide a product or service for which people pay us more than it costs us to provide. I’m doing stuff that is interesting to me. I wanted to do something different than what we were doing at Microsoft. So there’s some distinction to working in this business rather than inside some other business. But I don’t think I have any startling new insights.

On mission I wanted to do a business, and I like the Bible software business.

I care about the product, I believe it delivers value to people I care about, and helps them in a mission I care about. But I don’t want to turn it into something about a spiritual mission. I’m running a business, I love running a business. There are lots of ways to develop a passion. I’m interested in getting people engaged with the Bible. You could do that by becoming a pastor. But I’m doing it through something else.

On the joys of business I enjoy doing business as a concept. I like other people’s businesses. I like business itself. This is where people get employed, right? This is where people find purpose. Provide for their families. Learn new skills. And, accomplish things.

On recognition as one of the fastest-growing companies Our growth isn’t about more money. It doesn’t take quite a bit of time to make money to eat. In America you can take care of your basic needs without having to do anything too amazing. But we want to keep growing because it’s interesting, and it creates good opportunities for people. Unless we keep growing there’s no room to promote someone. (Or) for someone to step into a leadership role. We couldn’t hold onto some of the awesome people we’ve recruited and get to work with. In a certain sense we’re willing to say, while some people are in business to make more money, we’re growing in a way for growth’s sake because of the things that only growth allows.

On what’s exciting about it It’s interesting and fun. I love the product, get excited about it. I love it when a department does something cool. We get email all the time from people who say, “I use your product every day.” That’s exciting, becoming a part of WHATCOMBUSINESSALLIANCE.COM | 13

a person’s life who used our tool to accomplish what they want to get done every day. And I get excited when I see people get promoted within the company….or, when somebody recruited an intern, and that intern is now leading a team, and they hire the next generation of interns. Several people here, joined us in high school. Now they’ve gotten out, got married, have kids, and they’re leading teams. That’s fun to watch. You created opportunities for them.

On the genesis of the Logos products My brother and I went to Christian schools. We learned early on about the Concordance. Our mother would say go look things up, even if she knew it, which she did. My dad brought home the first Bible software in the world, the Apple IIe, and you could search the text of the King James Bible with it. But it came with 30 diskettes.

d i a n e p a d y s p h o t o g r a p h y. c o m

14 | BUSINESSPULSE.COM

I was fascinated by this idea of searching the Bible on a computer, instead of using this huge Concordance. Later I found a software that worked on a PC, and became intrigued just by the technical part of that idea.

On the springboard to Logos Two people with an idea and who knew how to code put this together. I had found someone who had downloaded the entire King James Bible by text. It had a tiny little search program, super slow, but it fascinated me that all the data was there. It would have taken weeks to download it all, but I read an article about a better search algorithm. So I implemented that, wrote my own search program, and started distributing it. I sent that out to on-line bulletin boards around Christmas ’86, when I was 15. I started getting

cards and letters from people saying, “Put me on your mailing list.” At Microsoft a few years later, When I told someone at church I worked at Microsoft they introduced me to Kiemon, who worked there, too, and we started going to lunch together once in a while. At lunch one day, we talked about having a business, and wanted to keep our programming still sharp, and decided that would be a fun way. We knew where to get the source data to write a program for Windows, and I had a list of people interested in it.

On having a co-op college experience My last diploma was from junior high. I turned 17 the last day of my junior year, then after a summer off I entered college. At Drexel University you could get a four-year degree in five years on a quarter system. During the middle three years, you’d alternate six

[visual exposure] photography that captures a sense of place

months work, six months school. After 18 months of school and my first full work session at Microsoft, they offered me a job. That first year I wasn’t ready to quit school; I wanted to be editor of school paper. So, after six more months of school and six months at work, they offered me again and I took it.

On the business start-up It started in Kirkland, with an office in New Jersey. Then we moved it to Oak Harbor and spent nine years on Whidbey Island. We came here in June 2002. We’d started working on the business in March ’91, even some weekends, throughout the year. Dad joined us during summer and offered advice on sales and licensing. We first shipped in December ’91, which started conversations about going full-time after we shipped version one. My dad and grandfather knew how to set up a business, and we decided we would raise $120,000 to start. Six people gave us $20,000 each – about half family, half friends. We incorporated Jan. 15, 1992.

On the family affair My dad sold a partner his half of a business they were running and took over our sales. Almost immediately we brought on a sales guy, our first hire. My mother was shipping the product out of the basement, using the library software’s shrink-wrap machine. My brother Dan joined us while still in college, and started doing some bookkeeping.

On growth spurts and moving By the end of that first year we had 12 people in leased space in Kirkland. When we were up to 45 we bought a building on Commercial Street downtown here that we’d been leasing, and eventually most of the end of that block, our Buildings 1 and 2.

We bought the Flatiron about three years ago (April 1, 2010) and moved in during September. A coffee shop is the only other business in it. We have a gym and a bicycle shop for employees to use. We’re now remodeling the third floor. (Editor’s note: At seven stories, The Flatiron was Bellingham’s first skyscraper and tallest building for many decades.)

On Logos’ product content Most of the work is in Greek, Hebrew, Aramic, and English. Some Latin, and then miscellaneous little projects that happen in Syria, Ethiopia and elsewhere —basically North Africa and the Middle East. Third floor of historic Flatiron Building undergoing complete We sell electronic books, so each one is a renovation. product, about 30,000 a personal interest. There’s a good books. We started with percentage of seminary students one program, one SKU, with four and pastors, but they’re not a books in it. We have a SKU with majority any more. 300 books in it, but you can buy each book separately. Most of our On the niche and market revenue comes from collections, share but only about 1,000 books are That depends on how you in collections, with about 29,000 define the (market) space. Some standalone. About 40 percent of our may dominate in chairs, but if you revenue comes from about 20 SKUs. change the category to furniture Our best seller would be the they might not. We were one of Scholar’s Library, which we call the first out there with Windowsthe Bronze Collection, a little over based Bible software. Two more $600. It’s near 300 books. formed within a year, but were On the core customer/user DOS-based. It was just a tiny bit of Bible It used to be pastors, scholars, study at first, a little category. But and students mostly. Now it’s anycategories transitioned over from one who wants to study the Bible. paper tools to digital tools, and we Mostly lay people now, who go to were right in that transition, out church, who might teach Sunday front. We weren’t first, just early, School or Bible study, or have just WHATCOMBUSINESSALLIANCE.COM | 15

honey came out kind of dark. Getting stung by bees, and not producing the greatest honey….It was time to focus on my computer stuff.

8th-11th Grade

Pritchett as high school businessman (photo courtesy of Pritchett family).

BOB PRITCHETT DESCRIBES HIS BUSINESSES AS A KID Age 6 Badge a Minute…a little press that made little metal pin badges. My dad set me up with that. I sold badges to friends, and literally from a table on the street. This was what was great about my dad. You could buy all the designs from Badge-a-Minute and make the stock badges, and sell them for a buck, or whatever it was. But dad had a friend who had his own photo typesetting machine. So we’d go over to his house and make custom badges. It wasn’t much of a business, but my first time of getting out there. As kids, we also sold the excess vegetables from my mom’s vegetable garden. My younger brother Dan and I would take a push cart around the neighborhood.

Age 10 We got beehives and set them up in our suburban back yard. That started my little business, Bob’s Honey. A guy in our church was a beekeeper…and he told me how it works, how to get started, the way to work with bees, and he sold us the equipment. Then he said, “The bees have to establish their hives, so you can’t start selling honey in the first year. But I can sell you this 60-pound drum of honey from our hives that you can start selling until 16 | BUSINESSPULSE.COM

you can harvest yours.” So I bought this bucket of honey, and bought funky jars, and typed labels on a little typewriter, and bottled this honey, and sold it. To friends, people at church, or standing on our street, Pawtucket, selling to cars driving by. It was never a huge business, but I sold enough to learn how to build spreadsheets for business. I had sales records, knew which size of things sold better, how the market was – squeeze bottles vs. in jars. I would issue performance reports. I was kind of a geeky kid. The bees were when I first started to really think about business concepts. Worrying about margin, and profit. I learned a lot from that. I made, I’d say, over 500 bucks, which was significant money for a kid. This was 1981 and I was 10 years old in the fifth grade. Margins were good, about 100 percent. While I waited for my hive to be ready I bought wholesale local clover and wild honey from Maine. The imported honey was my runaway best-seller, and I charged a premium price for it. When I went back to resupply, the guy had too many problems with bears knocking over the hives, and he decided to cut back and not harvest. I shut down, because the clover wasn’t distinctive enough from what you could get at the store. His wild raspberry was what people liked. People would buy honey once from a 10-year-old, but wild raspberry is what people would come back for. Finally, by the way, we did harvest the hive, and the honey was terrible. We lived in a suburban area (Cherry Hills, N.J.) near woods, and there was a soybean field behind us. The

I had my own software company, New Dimension Software, in high school. I sold a set of software tools called “C Spot Run” to other programmers and software developers. It was software tools for people who programmed in the “C” language, and I posted them on computer bulletin boards as a newsletter for my product as a “C” add-on library. Actually I started working on it in eighth grade, and then sold it all through high school. I was only in high school three years, then I took it to college at Drexel. I didn’t do much work on it once I got to college.

and I like to think we did a better job than others and that’s why we’re successful. Dozens of electronic Bible studies exist; it’s kind of a passion project. A lot have been created by day programmers who worked on developing their own at night, like we did to start. A lot of them aren’t serious competitors, they haven’t quit their day job yet. Some are in it for passion, or for fun, or whatever. Others, like us, have offices and employees.

On having downtown locales Having people working downtown is good for downtown. I wish that more businesses chose to be downtown because I think there’s a network effect. It doesn’t just add those bodies, it adds their interactions with restaurants and shops. We certainly had the option to be in an office building on the outskirts, but we wanted to be where you can walk out the door and be part of a community. Some offices are outposts, self-contained with a lunch room or cafeteria, people drive to the building and

drive away from the building and that’s it. Definitely we intentionally wanted to be somewhere downtown. Oak Harbor was a tiny little downtown, where we could walk to lunch. We were downtown in Kirkland, too. We’re not an accidental tourist.

On others following suit Recently we’ve gotten bigger and we’re contributing a lot of people, and that’s good, but it’s not special that it’s us. There are thousands of people working downtown, some businesses with 200-some people, but many in, for instance, a law office with three people—all contributing. I want to shine the light on people who aren’t downtown and ask why aren’t you? Definitely I would be a fan of and encourage other businesses to look at downtown when they’re looking for space. Spreading out isn’t as productive as coming together.

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On the Whatcom Business Alliance What the WBA is bringing that’s useful is the attention it’s giving to the contribution that business makes to the community. Some places, everybody fully understands the reasons for business to be there. Some places only exist for commerce, some for geographic or other reason. Beauty, environment, life style— those are all great, but even those places need economies to employ us, to feed our children, to make sure there’s a great restaurant to go to in a beautiful place. In places where commerce isn’t the only reason to exist, you need to speak up for it and remind people it’s an important part (of community). We have a great place for beauty, a place to retire, or to live an outdoor life style, but economy must be sustainable, because very few places can survive otherwise.

WHATCOMBUSINESSALLIANCE.COM | 17

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Fostering Business Success and Community Prosperity

Clawson, Singh, Rader and Sitkin headliners Wells Fargo’s new member

health care. Authentic Leader of the Year Wells Fargo Bank appointed Bruce Award: Harprit “Preet” Singh, RN, Clawson senior vice president and MSN, received this honor from the commercial banking team leader for Northwest Organization of Nurse Wells Fargo banks in Whatcom, Executives (NWONE) that Skagit and Island counties. represents nurse leaders in Clawson is based in Washington and Oregon and Bellingham to assist clients in is connected with the parent the area and has 30 years of national organization. Singh banking experience. Clawson joined PeaceHealth in 2011 was senior vice president and became nurse manager for and division manager for the medical-surgical unit that Banner Bank in Northwest includes pediatrics. She has a Washington from 2002 until masters in nursing leadership 2012. He was president of and management from Walden The Bank of Washington in University (‘12) and 18 years’ Lynwood from 2011 until this experience. April. With more than 270,000 Safe Sponges: PeaceHealth team members, Wells Fargo Busload of WBA members observe at Alcoa. (Staff Photo) became the first health care now introduces a local banker system in the Northwest to use with a complete understanding of PeaceHealth St. Joseph – the “SurgiCount Safety-Sponge” in the business and financial needs in Merger, innovation, and an the operating and delivery rooms. the Whatcom County community. award Sponges used during surgeries and procedures are inadvertently PeaceHealth St. Joseph Medical Event at Silver Reef left inside 1-in-6,000 patients Center (PHSJMC) sprang into third Title sponsor Silver Reef Hotel in the United States, accordquarter riding high on big news, Casino Spa planned to write a ing to PeaceHealth sources. The including a long-awaited merger. check Saturday night, July 13, to SurgiCount bar-code technology United General alliance the Burned Children’s Recovery counters that problem. Dr. Steve approved: The Washington State Foundation and its Camp Phoenix Cabrales, chief medical officer, Department of Health approved for children burn victims at the said that before and after a surgiPeaceHealth’s Certificate of Need annual Ryan Stiles Celebrity Golf cal procedure the surgical team (CON) that allows an alliance long Classic and Comedy Night – one of will scan each of the SurgiCount in the making. PeaceHealth St. the largest fundraisers in the area. sponges to make sure each is Joseph entered into a long-term After this year’s support, according accounted for. lease with Hospital District 304, to event chairperson Randi Axelsson, A case of sponges costs about which owns the land and United sales manager of the Silver Reef and $10 and PeaceHealth pays about General facilities, and PeaceHealth member of the Whatcom Business 30 cents extra for each sponge. now manages health-care operaAlliance board of directors, the event Dr. Jeremy Blanchard, the vice tions with an aim to reduce cost will have raised more than $550,000 president of quality and medical while improving availability and in four years. affairs, said the sponges speak to quality of local and specialized The “Night of Comedy” with the group’s mission and safety 18 | BUSINESSPULSE.COM

Stiles & Friends takes place at the Mt. Baker Theatre. Then the golf tournament tees off the next morning, followed by the awards dinner and auction at the Silver Reef.

core values. “We must take advantage of opportunities to be our best,” Blanchard said. “SurgiCount provides such an opportunity. By bar-coding our sponges we can ensure we never leave one behind. Even if this only prevents one episode, it is worth it.”

Rader named Raspberry Council officer WBA board of directors executive committee member Brad Rader was elected secretarytreasurer of the newly-formed National Raspberry Council at the recent organizational meeting in Seattle. Rader is vice president of Rader Farms in Lynden. He joins other Whatcom County operators on the slate of officers, Chairman John Clark from Clark’s Berry Farm in Lynden, and Vice Chairman Rob Dhaliwal of Samson Farms and Winery in Lynden.

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Super Lawyers Jon Sitkin, a member of the WBA board of directors, has been named a Washington state Super Lawyer for the sixth consecutive year. He is a partner in Chmelik Sitkin & Davis P.S.in Bellingham, and he specializes in Land Use/Zoning (about 50 percent), Land Use/Zoning, Real Estate, and Government/Cities/ Municipalities law. Partner Frank Chmelik has been named every year since the start of the listing, which consists of about 5 percent of the state’s attorneys. For these stories and more, please see www.whatcombusinessalliance.com for additional business news.

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Profile: Bellair Charters & Airporter Shuttle

Busy-ness with buses Bellair Charters/Airporter Shuttle moving up to 150,000 passengers a year

Bellair Charters & Airporter senior staff members: (front left) Adrienne Booth, director of sales and marketing; (front right) Rob Takemura, operations manager; (back left) Richard Johnson, owner and president, and (back right) Jody Hernandez, maintenance manager.

Interview and photos by Mike McKenzie

irporter Shuttle bills itself on the Web as “the car-free, care-free ride to and from Sea-Tac Airport and downtown Seattle.” Even when a bridge on I-5 in the heart of Skagit County collapsed in May, putting a crimp in the “care-free” part of anyone traveling that route until it was fixed, Airporter Shuttle responded quickly and efficiently. The staff immediately went into crisis-management mode during its round-the-clock operations. The dispatchers stayed on top of monitoring traffic patterns and road conditions minute-by-minute, 20 | BUSINESSPULSE.COM

mapping out alternate routes, and posting updated information on the website hourly. This is typical of the customer service that has made Airporter Shuttle and Bellair Charters a reliable source for travelers to rely on for almost three decades. Its ridership, according to owner/president Richard Johnson, recently surpassed 3 million. And that’s just with the shuttles only, not counting the chartered trips. As the fleet has grown to 32 vehicles—20 motor coaches, 10 mini-buses, and two vans—and the work force to 78 (see Top Private Companies), the company delivers from the most remote spots in the county to a variety of destinations throughout the state.

“We’re carrying between 140,000-150,000 passengers a year now,” Johnson said. With that responsibility and load, he said, the highest priority is safety. On a tour of the facilities he proudly displayed the multi-layered safety checks that each vehicle undergoes in a fully-staffed, fullytooled garage after each run. Jody Hernandez heads up that operation. The business started under a father-son buy-out in 1985. E.M. Wickkiser, known as “Red,” and his son Larry alternately took the wheel of a 10-passenger van to drive travelers between Bellingham and Seattle-Tacoma (SeaTac) Airport twice a day. Today, the combined companies that officially appear on the logo

as Bellair Charters and Airporter will haul groups basically anywhere, near or far, to special events as well as airports. The SeaTac routes continue to run at the heart of the business—served 11 times daily, each way—though a Central Washington schedule services a Bellingham-Yakima route five times a day, each way. The company sets up Seattle Seahawks charters among its long list of special events, which also included the Winter Olympics in Vancouver, B.C., and Paralympics in Whistler, B.C., a few years back. The special-events business started with skiers during the early years of the company. Airporter Shuttle has remained innovative. They added an Alaska Ferry stop many years ago. They installed wi-fi, then removed it because they didn’t feel like it matched the quality they demand for their customers. “We’ll have it back soon,” Johnson said. “It wasn’t properly engineered and

simply wasn’t good enough. We need it to be very robust, and we’re working on some solutions.”

Airporter Shuttle buses have carried 3 million passengers during 28 years on the roads to and from SeaTac and Yakima. Johnson, after obtaining a master’s degree in business, became a financial officer and accountant by trade and was leaning toward real estate development when Larry Wickkiser decided to sell the company about seven years ago. “I’d always wanted to be a general manager of a company,” Johnson said, indicating he wanted to put his MBA degree to good use. “We had a wonderful partnership and got along well. I said I’d love to do it on my own, and when he fancied selling he said I

was the right guy to do it.” Last year Johnson introduced the first alternative-fuel vehicle to the fold, a van that runs on natural gas (and eventually will burn biofuel produced on a Whatcom County farm), and he also bought a southern-route portion of another charter, Hesselgrave, serving Seattle, Tacoma, and Olympia. Recently, Airporter Shuttle made a move from its pick-up location of the last 20 years in Bellingham for the SeaTac run, shifting from the GuestHouse Inn on Lakeway to the McDonald’s on Samish Way. Bellingham Airport is the other Bellingham loading spot, though Johnson pointed out that often the first pickup takes place with a “feeder” vehicle going to remote and distant areas of the county if reserved. Recently, Johnson showed a visitor around the grounds on the southern edge of Ferndale, just off Slater Road and the Interstate it traverses so frequently. In each

WHATCOMBUSINESSALLIANCE.COM | 21

with precautions to allow for an extra 15-30 minutes, just in case. When the bridge fell, the staff rallied and called every customer who had a reservation and worked with each to tailor adjustments to every travel arrival and departure need. Almost all of their frequent drives to SeaTac arrived on time, and nobody reported missing a flight because of delays. “Safety comes first,” Johnson said. “But comfort and reliability are of utmost importance, too.” And don’t be surprised if, in a crunch situation calling for backup, you find the owner/president himself in the driver’s seat. Yes, he’s known to sub, adding a little extra meaning to the term business wheel.

A bus on the desk keeps business constantly in Richard Johnson’s consciousness.

department—charter sales pursuing leads, admin, and phone-bank reservations/sales, plus the backroom of drivers and the maintenance crew in another attached building—bustle would be the

byword of choice. While a broken-down bridge certainly stepped up the pace for Airporter Shuttle staff, its website continued to report “On Time” to its airport-to-airport customers,

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Analysis: Water Rights

Who’ll stop the drain? Fishers, farmers, land developers, households....Many special-interest groups appear headed for a collision at intersection of “My Water” and “No Way” in the Nooksack River Basin.

By Cheryl Stritzel McCarthy

ithout water, land is useless. Without water, property rights become meaningless. Without water, economic vitality drains away. Whatcom County’s diverse water users agree that much. But go any further, and the trail of water rights becomes a knotted web of differing opinions. Controversy about water here runs as high as the Nooksack River in springtime. 24 | BUSINESSPULSE.COM

How is it that water in Whatcom County, with plenty of rain and a sizable river, becomes a problem? In 1998, the endangered species act decreed the implementation of recovery plans for Chinook and other fish throughout Puget Sound. That recovery requires all of us to leave enough water in the streams to protect fish. We also have to take enough out to provide for people. Plus, the tribes have treaty rights to harvest salmon and

shellfish, said Roger Brown, Water District Caucus representative, and manager of Birch Bay Water and Sewer District. Those treaty rights require leaving enough water in streams to sustain that harvest. “There was an attempt in 19992000 to reach answers through consensus,” Brown said. “That failed, so there’s an impasse, and the tribes are seeking to resolve this through litigation.” (Two years ago the Lummi and Nooksack tribes formally requested of the federal government a

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“delineation” of the quantity of water. A response is expected soon.) Contention exists not only over in-stream uses and out-ofstream uses. Problems arise with the process set up to address the issue. Watershed Planning Act of the Revised Code of Washington (RCW) 90.82 established a broadbased group to oversee planning of the use of water from the Nooksack River basin, including its several tributaries. Many stakeholders, including water districts and farmers, now

have been excluded from that process, Brown said. “Water is critical to the economy and to environmental quality. How it’s to be allocated is a very controversial process, wherever it occurs, not just here.” Take too much water out, and salmon and the environment suffer. Don’t take out enough, and agriculture in Whatcom County dwindles or, in some cases, goes away. Either way, fishers or farmers or industries get hit with severe consequences.

Of thousands of viewpoints and voices, we have extracted some highlights of differing viewpoints with Question-and-Answer interviews obtained by email to insure accuracy. We have edited answers for space considerations, yet maintained the integrity of the responders’ context.

HENRY BIERLINK

Executive Director, Whatcom Farm Friends

He stated that water rights are the critical factor affecting WHATCOMBUSINESSALLIANCE.COM | 25

the county’s overall growth and development.

Q. Can you quantify the economic impact of water rights? For agriculture, it’s a $326 million business at farm-gate level. With processing and support industries around it, it’s another roughly $1 billion. If this isn’t properly resolved, nearly all of this economic activity goes away, and the only option for future land use will be rural sprawl. For users like rural water associations and cities, there’s another large cost. Add in the need for water at industries served by the Public Utility District.

Q. How would you identify key players? Tribes, Whatcom Public Utility District, City of Bellingham, Whatcom County.

Q. Are the main adversaries

farmers and tribes? I don’t see it that way. Adversaries is not an accurate description of our mutual concerns. It tends to be an argument over the needs of out-of-stream users vs. those who want to maximize in-stream flows to support fish. That’s more complex than just tribes and farmers. There are multiple interests on both sides.

Q. What do you see as the solution? We should manage our water resources jointly and respectfully. We have the water here to meet most needs if we devise better public policies that help us manage it properly, rather than standing in the way of good management.

Q. It’s been asserted some farmers irrigate without specific legal rights. Agreed, though it’s not because

they desire to be unpermitted water users. For decades, the State of Washington did not actively regulate groundwater withdrawals. The State, in the 1985 In-Stream Flow rule on the Nooksack River, dismissed ag concerns over in-stream flow settings because they had adequate groundwater resources to draw from. That changed in the ‘90s, with emphasis on hydraulic continuity between ag wells and the flows in tributary streams. Farmers responded by flooding the State with water rights applications in an effort to square their usage with the new emphasis on groundwater. There are more than 400 applications on file from Whatcom farmers, waiting for legal approval for water that’s been used for decades.

The Lummi Water Team

[EDITOR’S NOTE: This group replied to our email query with responses as one consensus voice from the group of five, rather then individually.] The Lummi Water Team comprises Merle Jefferson, executive director; Leroy Deardorff, environmental programs; Jeremy Freimund, water resources manager; and Diana Bob and Harry Johnsen, attorneys.

Q. How would you sum up water rights in Whatcom County?

LUMMI WATER TEAM (l. to r.) Merle Jefferson, executive director of the Lummi Natural Resources Department and member of the Lummi Indian Business Council (LIBC); Jeremy Freimund, water resources manager in the Lummi Natural Resources Dept.; Leroy Deardorff, environmental program director of Lummi Natural Resources Dept. and LIBC member, and Diana Bob, staff attorney in the Office of Reservation Attorney. Not pictured: Harry Johnsen, an attorney at Raas, Johnsen, & Stuen, P.S. (Photo courtesy of Lummi Water Team). 26 | BUSINESSPULSE.COM

Water allocation in Washington State is based on prior appropriation, commonly expressed “first in time is first in right.” Under state law, individuals and legal entities can acquire the right to use a specific quantity of water. The entity or person that used water first has the senior right and can fully meet their needs before the next entity or person, the junior water-right holder, can use any water. State law provides that instream uses of water for fisheries,

wildlife, and recreation are water rights if in-stream flows have been set by the Washington Department of Ecology. Ecology set in-stream flows for much of the Nooksack Basin in 1985. This state-managed allocation system does not currently function as it is supposed to. Ecology knows of illegal or unpermitted water use in the County, but has not taken enforcement action. As a result, property rights of public and senior water-right holders are taken by individuals and entities that use water without legal right, and apparently without regard to the impacts of their water use on others or the environment. Because existing laws are not enforced by Ecology, and have not been enforced for decades, this practice continues at the expense of others and the environment. The senior water-right holders in Whatcom County are the Lummi Nation and Nooksack Indian Tribe. Water rights of the two tribes are different from water rights issued by Ecology in that they are federal rights that have a priority date of at least 1855, when the Point Elliott Treaty was signed, before the state of Washington existed.

The message from the Lummi government is, we can find a way to all be successful together, but you do not have a right to be successful at our expense. LUMMI WATER TEAM

State water rights cannot preempt federal water rights. Because these senior rights have not been quantified, it has not been established how much water is left to be allocated by Ecology. Both tribes have worked with state

and local governments and other county residents for 15 years to quantify these senior water rights. Both tribes have requested the United States to quantify their water rights through federal court.

Q. Can you quantify the economic impact of water rights in Whatcom County? The economic value of the federally-reserved water rights of the two tribes cannot be quantified easily.

The tribes have treaty-protected rights to adequate quantity and quality of water to support reservation lands as economically-viable homelands, and to support a sustainable, harvestable surplus of salmon and shellfish. Studies in other watersheds (Upper Klamath in Oregon) have demonstrated a large positive economic impact to the community of having abundant, clean water in streams and rivers. If economies of Indian

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the seniority of their water rights and the winter rainy season. Banks can issue loans based on the existence of valid water rights. Cities can plan development based on secured quantities of required water. The economic impact of a functioning and fair water allocation system has not been quantified.

Q. How would you identify the different players?

Orchard farmland at Bellewood Acres.

Reservations thrive, so do the economies of surrounding areas that benefit from created jobs and provision of goods and services. Just as the Lummi need water to support their economy and way of life, so do others in the community. Certainty is provided where there is functioning and fair water allocation. People with water rights can go to the bank and get loans to plant, based on a valid and protected water right. Farmers can make decisions based on the likelihood they will have irrigation during a particular year, based on

Primary players are tribal, federal, and state governments. Since these players are all from representative government, each political subdivision of state government (e.g., Whatcom County, Public Utility District No. 1 of Whatcom County, cities) and each individual in the watershed are also players. Beyond this broad definition, there are entities and individuals with water rights, and entities and individuals without water rights. Some of the individuals or entities without water rights obtain water from an entity that has a water right—for example, a resident of Bellingham, or the industries along Cherry Point. Others take water without a legal right to do so.

Q. Are the two main adversaries at the moment farmers and tribes? No. Both the Lummi Nation and the Nooksack Tribe have publicly stated they support and prefer

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a viable agricultural economy. However, this cannot exist and thrive at the expense of the tribes’ treaty-protected rights. Lynden, Ferndale, Bellingham, Cherry Point industry, and the agricultural community have all used natural resources that tribes have relied on since time immemorial to thrive. Unfortunately, this use of the water supply by others has substantially impacted the ability and treaty rights of tribal people to harvest salmon and shellfish. The tribes have worked with these parties for 15 years to resolve conflict over water allocation and fish habitat. The message from the Lummi government is, we can find a way to all be successful together, but you do not have a right to be successful at our expense.

Q. What do you see as the problem? And, the solution? Tribal water rights are not quantified and protected. Numerous people use water without legal right, and there is not enforcement to protect property rights/water rights of senior water right holders, both Indian and non-Indian. The solution is to negotiate a settlement among affected parties within the framework of federal court. Once this is accomplished, water allocation can be managed locally. (Note: A court ruling is expected by the end of 2013.)

Q. A common description of the tribes’ position is that Whatcom County farmers can have the water they need but must pay the tribes for it. Is that how you see the tribes’ position? No. The Lummi Nation is seeking abundant, clean water throughout its usual and accustomed areas sufficient to support a harvestable surplus of salmon and shellfish.

Water is only one element of fish habitat. Fish need functioning riparian areas, and water quality standards for dissolved oxygen, temperature, pH, and pesticides. A viable enforcement system might include compensation to parties injured by those who use water in violation of the law. But Lummi is not interested in a system in which tribes would sell or trade water needed for in-stream uses such as support of fish runs.

Q. Anything else? Water is a limited resource required to support the tribal way of life, and the economies of the entire community. The current system for allocating water and protecting rights is broken, and needs to be fixed so the community can move forward on a firm foundation. Until this is established, there will be economic uncertainty for the entire community, and practices that negatively impact the environment we all rely on.

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SKIP RICHARDS

Owner, Catalyst Consulting

Skip Richards represents Water Resource Inventory Area No. 1, which the state created in 1998 to bring together citizens, local governments, tribes, and state and federal agencies to address water issues. Richards has dealt with water resource policy at state and local levels for 20 years, and is former chair of the Washington Water Supply Advisory Commmittee.

Q. How would you sum up water rights in Whatcom County? Issues have evolved to separate players into two camps: those who prefer to operate behind closed doors, and those who believe public transparency, accountability, and effectiveness matter. Since June 30, 2009, the former point of view has held sway. Since February 2013, the latter group has seen a resurgence of interest.

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A Farmer’s eye-view Dorie Belisle of Bellwood Acres, compiled by Cheryl Stritzer McCarthy Dorie Belisle and her husband John own and operate Bellewood Acres in Lynden. They farm 62 orchard acres for use in their fruit business and the Bellewood Distillery, and the Farm Market & Bistro they opened last year. Mrs. Belisle addressed the water rights impact on them: “The greatest threat to farmers is, we don’t have the security of irrigation. That’s scary. If we want

How that will sort out remains a question.

Q. Can you quantify the economic impact of water rights in Whatcom County? Without water, the economy would collapse. Many major water users may not have strict legal access to water, and some provide a substantial amount of farm-gate receipts and other major local revenue streams, as well as domestic potable water. The state legislature enabled local interests, government and non-government, to gather into a planning unit to address these issues collaboratively. After the initial plan was passed in 2005, certain governments and interests illegally suspended the planning unit and began a rogue attempt to re-write key provisions of the plan and conduct future planning behind closed doors.

Q. How would you identify the different players involved in this issue? State law RCW 90.82, the Watershed Planning Act, identifies both tribes (Lummi and Nooksack), the county, Bellingham and the other cities in Whatcom County, the Public Utility District, and private interests including 30 | BUSINESSPULSE.COM

our farm to succeed into the next generation, they need to know they’ll have the elements, including water, they’ll need. “If Whatcom County wants agriculture, we need enough water to farm. Yes, we need instream water for fish, but we also need out-of-stream water for farming, or the only thing we can grow is housing, and we’ll look just like Seattle. “We (Whatcom County) have great water resources. We just need to figure out how to share it.”

The tribes appear convinced they have senior water rights, and the main reason fish are endangered is insufficient flow in the river and tributaries. There are other factors impacting fish population, and it is complex and would best be solved if everybody could sit at the same table and work it out. I won’t promote specific solutions, as it is best if solutions are arrived at by process established in state law. The second problem is that some key players still believe back-room dealing is the best way to resolve the issue.

environmentalists, fishers, foresters, farmers, well owners, land developers, and non-government water systems.

Q. A common description of the tribes’ position is that Whatcom County farmers can have the water they need but must pay the tribes for it. Is that how you see it?

Q. Are the main adversaries farmers and tribes? No. In-stream advocates, including the state, tribes, fishers, and environmentalists, insist more water should be left in streams for fish. Out-of-stream users respond they have cut to the bone already with conservation, and they need the water they are using just to keep farms and families alive. There’s more, but that’s the gist of it. On the process level, the main adversaries are those who prefer to operate in the shadows, and those who believe an open public process is the best way to resolve issues.

Without water, the economy would collapse. Skip Richards

Q. What do you see as the problem? And, the solution? Two problems: First, over decades many water users have ignored provisions and requirements of state law, while those provisions and requirements have gotten more difficult to comply with.

No. I can’t speak for the tribes, but if tribes succeed in establishing a certain level of flow that must remain in streams for fish, that’s where it will have to remain. State law doesn’t support selling water from streams for other uses.

CONCLUSION Business in Whatcom County needs to understand the tribes are seeking adjudication of water issues in federal court, Roger Brown said. “The seniority and magnitude of their claims constitute a threat to agriculture.” The tribes seek not just an instream flow right, but a homeland right. “That’s a major new claim, that’s more extensive,” Brown said. “Tribes will have to be satisfied fully before any other rights can be used. It remains to be seen how much water that is.”

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TITLE Column: Water Rights Guest Hart Hodges | Waycross Investment Hart Hodges wears two hats as he traverses the area’s economic scene. He serves as Director of the Center for Economic and Business Research at Western Washington University. In private business he is co-partner at Waycross Investment Managing Company in downtown Bellingham.

Market trading important for economically sound use of water T

here are very large differences in how much water different groups use in the area and how much they value the water. I can’t help but wonder what would happen and whether we’d use water differently if we had a pricing structure for water that reflected its value and allowed for trading of water between different users. I try in my class to get the students to understand how water is priced the way it is and why. We have historically paid the average cost of treatment and delivery. We do not pay anything for the water itself, or for how our consumption decisions impact others. Further, we don’t pay anything related to environmental costs. There are different ways to define and measure the value of water use. We have to consider equity. We also have to consider the fact that different people use the same water, economies of scale, the importance of seasonality, the need for water treatment, etc. Suppose we were to move to a system where water was allocated on the basis of its value to users? The complexities make legislation and oversight necessary. Not total 32 | BUSINESSPULSE.COM

governmental control, as in here’s your water and here’s mine, but not unmanaged markets either. Controls would be needed to allow for trading within politically acceptable bounds. As is, the U.S. and the Lummi Nation have, for example, an agreement that suggests a certain amount of water to meet requirements for in-stream flows needs to be assured. On the other hand, Whatcom County farmers use large amounts of water for highly-

Historically, the price of water has been based on cost-recovery. Economics would suggest a different approach. And better pricing could help in many ways. productive agriculture purposes. I’m curious what would happen with more accurate pricing and trading for uses above and beyond those required to meet in-stream flow requirement if and/or when water is available to do so. We know the institutions and regulations will have to evolve as the supply and demand for water change. In looking ahead we need also to think about possibilities like using recycled wastewater (e.g., for municipal purposes) and

climate change as factors that may shape supply and demand in the future. My thought is that water trading may be able to help in the evolution of institutions and regulations regarding water use in the future. These thoughts lead to two threads of discussion:

1. Can we discuss the concept of water markets in the near term? Or do we need to wait for all the legal delineations and adjudications to be settled first, before we can discuss trading of water between users? Given how long the adjudication process can take (the process in the Yakima Basin started in 1977 and is just winding down), I would hope we can discuss markets without waiting. There may be things we can test while answering other questions. As for trading, farmers have already asked about trading development rights on their land for water rights. What would it take for this to become possible? Clearly we need institutions and laws to enable it. We also need to be able to establish values on these rights for far-ranging and equitable trading to be possible. How can this be done when we have no trading history? Experience suggests markets

could help the allocation of water to farmers, industry, municipalities, and others. Applying the tools of resource economics may enable us to move our thinking forward in dealing with the issues of water in Whatcom County.

2. How do we improve the underlying science? The state has determined that groundwater and surface water are linked through hydraulic continuity, which in practice means in-stream flow requirements limit what you can pump from a well. Some people believe, however, given the nature of groundwater recharge and our aquifers, groundwater could be used to enhance stream flows. Where and to what degree could this be appropriate to consider for mitigating friction regarding the use of available water and in-stream flow requirements? Besides quantity issues (i.e., in-stream flows) we have issues of water quality. Temperature and

other factors are also important for salmon. What are the tradeoffs between quality (such as habitat, water temperature, etc.) and quantity when it comes to salmon? Is shading streams a viable option, given expected temperature changes? How much shading might be needed to get a measurable reduction in temperature on particular streams? These are interesting threads for a very important topic. Perhaps we could do more to find answers.

History of Whatcom Farmers Involvement with Water Rights Issues 1855 Point Elliott Treaty 1974 Boldt Decision 1992 Tribes indicate desire to quantify Nooksack water rights 1993 Whatcom County Ag Preservation Committee formed 1993 Farmers file more than 350 water right applications.

1994 WCAPC sponsors to form county-wide irrigation district – 66% of landowners approve, but effort fails because 67% required. 1996-’97 WCAPC and Rep. Linville sponsor state legislative bills to recognize historic water uses in Whatcom County. Governor vetoes both bills. 1998 Water Rights Irrigation District #1 watershed planning project begins, with WCAPC representing farmers. 2003 Bertrand Watershed Improvement District formed as an irrigation district with 80% landowner approval. 2005 WRIA #1 Watershed Plan completed and approved. 2005 Pilot in-stream flow negotiations begin in the Bertrand and Middle Fork watersheds. 2007 North Lynden Watershed Improvement District formed as an irrigation district with 90% landowner approval.

con’t on p. 35

WHATCOMBUSINESSALLIANCE.COM | 33

Guest Column: Water Rights Ken Mann | Whatcom County Councilman Ken Mann is a member of the Whatcom County Council and serves as Chair of the Finance Committee. Ken has a background in finance and civil engineering. Ken and his wife, Amy, have a real estate development company that restores commercial and residential buildings.

Time for County leaders to step up and get their feet wet W

ater is life. Water is power. Water is money. Water is everywhere in Whatcom County, yet a battle for this precious resource is beginning to unfold. What is next? What should we do? If we are to act smart and responsibly about our future, we cannot avoid the topic of water usage rights in Whatcom County. For too long, we in leadership have averted our eyes and changed the subject. I can understand why – it is a treacherous and potentially litigious topic, fraught with peril for everyone. Most water users—farmers, industry, businesses, fishers, and consumers—rarely consider their source or supply of water. Even the challenges facing Lake Whatcom have low awareness among Bellingham residents who depend on it. The biggest risk to our community is if scientific studies discover that water supply fails to meet community needs. This might seem far-fetched when it rains for six straight months every year, and we have a gigantic glacier feeding our main river. But the fish and the farms and industry require so much water that seasonal shortages in the Nooksack River and its tributaries pose a very real risk. Conventional legal theory holds 34 | BUSINESSPULSE.COM

that the Lummi and Nooksack Tribes have the oldest and, therefore, most secure water rights to the Nooksack River and its tributaries. That water provides protection of minimum flows that support salmon at all stages of life. Some legal theories dispute the superiority, or even the existence, of tribal water rights. But an overwhelming majority of court rulings have failed to upend the status quo.

Whatcom County leaders have been weak negotiators….I say: No more appeasement, or capitulations to fear of the unknown. Just 20 months ago, the Tribes requested that the Department of Interior and Bureau of Indian Affairs perform an allocation/adjudication that would formally (and finally) quantify the in-stream flows required to support salmon. Those flows would thus establish the water quantities and rights allocated to the tribes. Depending on the outcome of that decision, many users could find their water supply in jeopardy. So, how does Whatcom County factor into this game? We on the County Council represent every

person living in the county, and we need to exert leadership. Fortunately, we do not own any significant water rights and we are not a purveyor of water. We have no direct stake and we are considered a reasonably impartial actor. Accordingly, County staff has worked diligently to assemble the major players to create a plan. It’s known as the Watershed Resource Inventory Area 1 Joint Board and Planning Unit). We have developed the Lower Nooksack Strategy. Unfortunately, negotiation and cooperation among user groups have stalled. The Tribes have gone to the Federal government. Various members of the Joint Board and Planning Unit feel shut out of the process and some have been vocal about rejecting the legitimacy of the Lower Nooksack Strategy. We are heading toward an extended litigation and significant expense and risk. The threat of adjudication has dangled over the County’s head for too long. Whether it has been Lummi Island Ferry negotiations or opposition to casinos in farm country wetlands, County government has been reluctant to upset the tribes. Likewise, water users. The Tribes have leveraged their status very skillfully and used it to their advantage. Whether in business or government, leadership has a fiduciary responsibility to its people, and

tribal leadership has been successful. I can respect that. In contrast, Whatcom County leaders have been weak negotiators. We must be careful to avoid reckless ideological pursuits or emotional outbursts, but, I say: No more appeasement, or capitulations to fear of the unknown. I am ready and willing to fight for what is right for all the people of Whatcom County. I believe the County ultimately will benefit from finality and certainty of water rights. Every developer, business owner, and lending institution knows that uncertainty is the enemy of investment. Economic health cannot exist without water, but modern economies do not exist without security or financing, either. Every property owner and every business, every farmer and homeowner, depends on these realities. As long as uncertainties exist about a water supply, the health of our economy and our community will suffer. A short-term confrontation or an extended legal battle will be expensive and we might not like the results. But we are resilient and creative and adaptable. We will go forward with a solid, secure, and sustainable foundation, and we will thrive.

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con’t from p. 33 2008 Bertrand negotiations reach impasse, negotiations shift to Three Forks. 2010 Pilot negotiations end. 2011 Lummi and Nooksack tribes file litigation request with the federal government. 2013 Awaiting ruling by federal government agencies.

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Profile: Kam-Way Transportation

REFLECTIONS ON TRUCKING: Kam Sihota reflects on his trucking brokerage and fleet that operates from Mexico to Canada, and that is growing like wildfire. (Photo by Steve Hortegas)

Roaring along in a fast lane Riches to rags and back again—a story of vision and overcoming business naivete to success with family, friends, and customers By Steve Hortegas

am Sihota took his first ride in a big-wheel truck a month after he was born in Fresno, Calif. Just 28 years later he founded Kam-Way Transportation, where he serves as CEO overseeing a fleet of trucks and trailers out of headquarters along Drayton Harbor in Blaine. Kam-Way operates as a freight brokerage. Within five years of start-up, Sihota had hired 35 employees and had grown his business to $34 million a year in sales by matching up shipping firms with bluechip companies providing produce, foods, and beverage. Kam-Way has carried 54,500 36 | BUSINESSPULSE.COM

loads, and developed a network of 4,500 different carriers, in addition to its own six trucks and 17 trailers. The business has expanded wherever the North American Free-Trade Agreement (NAFTA) applies—from the northern Rockies to Mexico—and opened regional offices in Sunnyside, Wash., and in two California locations, Fresno and San Diego. All the while, the company has grown at an average rate of 33 percent a year. Sihota is a man who went from riches to rags, and back again, according to the firm’s chief financial officer, Steve Pannu, the former director of finances for Mark Anthony

Group that owns Mike’s Hard Lemonade. Sihota’s dad, Charlie, and Uncle Paul Sihota had a 400truck transportation fleet in Fresno. By the age of eight, while other kids played baseball and hung out, Kam Sihota was hanging out in the family’s truck yard, revving up refrigeration units to see how cold they would get. By age 12, he was driving trucks around the yard, and at 19 his father called him home from college to work full-time. He gave his son the business the following year. “I knew how to sell and keep drivers going,” Kam Sihota said, “but I didn’t know about Business 101 issues.”

After feeling the pain of several bumps in the road, including selling the family business, Sihota said he began to see how a big part of life was overcoming adversities and learning from his mistakes. His uncle, Harvey Gill, taught him that the back end of business is just as important as the front end, and his father-in-law, a longshoreman, challenged him to build a business for himself. Sihota took the plunge. A major California grocery chain wanted Washington State apples, so Sihota moved his family to Washington in 2008 to be close to the apples. After looking first at Wenatchee, he settled his family— wife Harneet, and son Arjun—in Blaine. It provided two business advantages: a favorable exchange rate at the time, and increased demand for U.S. trucks to haul into Canada. “I was reluctant because of my prior bumps,” Sihota said. But when my father-in-law provided

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start-up funding, it was a big weight off of my head.” A customer suggested the name Kam-Way. The company started in a modest $300-a-month office at the Blaine truck crossing, and Sihota began to implement his vision with the help of his brother Herman.

“I knew how to sell and keep drivers going, but I didn’t know about Business 101 issues.” Kam Sihota

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The result is a freight brokerage company with multiple offices, in multiple states, surrounded by a group of loyal family members, friends, and employees to help the company reach its goals. “Any business can thrive on luck and timing,” Pannu said. “But Kam still had a network of contacts. He worked hard to sustain

growth, and as he grew, his customers saw more value and gave him more business. Plus, the timing was, in fact, right.” Sihota said he found his calling when he moved to Blaine. Part of that vision of service was purchasing the Dockside Place, a building along Drayton Harbor that needed a facelift. The goal is to allow expansion for his company, while providing space for other professionals who want to reach out to both Canadian and U.S. business clients. “In the end,” he said, “I want to be able to say I was a humbled man, who brought joy and happiness to my family, who touched people and my community around me, and who created value and opportunities for people that maybe they would not have had. “I am not there yet. But I am creating something that will be of value for generations to come.”

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Whatcom County’s

Top 75 Private Companies

Compiled by Business Pulse Magazine Staff

uccessful business breeds jobs, and more jobs breeds thriving communities and desirable life styles. Where does successful business manifest itself most? We came across a well-researched article recently that revealed interesting insights. Among them: • Small firms have high failure rates. Consequently, most small firms do not add many jobs long-term. 40 | BUSINESSPULSE.COM

• Though large firms may create jobs, the mega-businesses also cut jobs and frequently move them around internationally for cost-saving or other strategic reasons. • The one segment of any healthy economy that provides biggest source of net job creation is what’s called the ‘midmarket’— defined as companies with annual revenues of $10 million—$1 billion. The local companies on Business Pulse Magazine’s annual Top 75 Private Companies list mirror the midmarket segment with

sales last year ranging from $5 million to $600 million-plus. These companies employ approximately 13,000 workers and reported aggregate sales of more than $3.3 billion during 2012. These companies produce the most jobs, pay the most taxes, and typically give back to the community through philanthropy, volunteerism, and other means. In short, they form the backbone of economic prosperity and job creation in Whatcom County. According to the latest U.S. cen-

Photo courtesy of Samson Rope Technologies

sus, a significant 44 percent of net job growth comes from the midmarket. And these new jobs mostly are local where the workforce spends their wages in their communities. Since consumer spending accounts for 70 percent of the GDP, solving the jobs problem is imperative to having a robust economy. Obviously, what is good for these midmarket companies is good for our county, and our country. Within the list you’ll see some remarkable growth stories, many of them outside of the traditional

leaders of construction, technology, auto, and grocery. Prime examples come from within a health-related industry – the flaxseed, Omega-3, and related organic supplemental products business like Barlean’s and Flora. When we last received verified sales figures from award-winning Barlean’s Organic Oils, two years ago based on 2010 revenues, the Ferndale company ranked 54th among Whatcom County companies and No. 79 on the Top 100 in the four-county area. Just two

years later their revenues stood more than six times higher, placing them at No. 12, and they had about 90 more employees. Flora in Lynden, long known for its high-quality botanical supplements in 11 categories, joined our list for the first time and was the highest-producing newcomer, No. 25. Combined, Barlean’s and Flora reported nearly $100 million in sales and 236 employees. Alpha Technologies of Bellingham took over No. 2 behind perennial top-producer Haggen WHATCOMBUSINESSALLIANCE.COM | 41

Inc. Alpha’s international clientele and wide range of power supply services worldwide put it into nine figures, with more than 800 employees—and more than 400 of those jobs in the county. Although Comvest of Florida bought out Haggen Inc. in 2011, it remains privately-held and headquartered in Bellingham, hence meeting the two required criteria and once again attaining the No. 1 spot with more than $600 million in 2012 sales. Operating under a new three-person leadership team—John Turley, Clements Stevens and Ron Stevens—the company continues its re-branding this year of Haggen Fresh in markets south of Whatcom County, according to Helen Neville, vice president of marketing. The county’s two food giants, Haggen and The Markets, showed

more than $770 million and more than 3,400 employees, with about 1,400 of those local. Construction-related businesses, which generally have experienced some pain over the last few years, have rallied, such as Mills Electric and Dawson Construction in Bellingham, and Barron Heating and Air Conditioning in Ferndale. Mills scored some major contracts and jumped from the $11-15 million range into the $20-25 million range, partly on the strength of a BP Cherry Point clean diesel project that owner John Huntley said was “very successful for Mills.” The economy caused a dip in revenue for Dawson Construction in 2012, according to Peter Dawson, its president and CEO. The company did $80 million-plus at No. 9, but Dawson said this

Equipment on the production floor at Samson Rope, Ferndale. Photo by Michelle Manson

42 | BUSINESSPULSE.COM

year’s pre-construction contracts should restore the company to its previous more than $100 million category. Barron experienced growth in the area of HVAC services for existing home markets and commercial and residential projects, according to co-owner and controller Bill Pinkey, while seeing some fall-off in retail for fireplaces, stoves and spas. He contributed stabilization so far this year to increased focus on service and existing home add-ons and on replacement upgrades. Barron is wrapping up a large military family-housing project in Missouri. Logging and road construction companies, including A.L.R.T. Corp. in Everson, remained steady in revenue and employee numbers. The industry is trending upward with the improvement of the housing market, resulting in an increased demand for wood products, said Vice President Rod Lofdahl. He said that 2013 revenue is averaging about a 30 percent higher pace than last year’s $15-20 million that ranked in the top 50. In the agriculture arena, Farmers Equipment Co. and Scholten’s Equipment, both based in Lynden, reported increases in 2012. Another positive indicator from the ag industry was Whatcom Farmers Co-op opening new stores last summer in Blaine and Fairhaven. The Lynden-based organization experienced a revenue increase to nearly $70 million and added 35 employees. Bellingham’s Wilson Motors revenue increased nearly $8 million as the auto industry experienced some overall recovery during 2012. Already the topproducing dealership in Whatcom County, approaching $55 million at No. 15 overall, Wilson’s numbers will likely continue to rise since it bought nearby King Nissan (but not Volvo), which had a 2011 revenue range of $11-15 million. Dickerson Distributors became

a new listing in a large industry —beverages—to join old stalwarts Walton Beverage of Ferndale and Sound Beverage of Bellingham. Among them, they combine for more than $80 million in sales and more than 250 jobs. Walton expanded its vending/food division, but spokesperson Ford Carothers attributed strong sales gains ($35-40MM, No. 23) to a recovering market. Bellingham Cold Storage added 38 employees and topped both $20 million in sales and 200 workers. Superfeet Worldwide Inc. of Ferndale expanded into the United Kingdom market and reported an increase in sales of 8 percent. In addition to the companies in our rankings a number of businesses didn’t report, though we believe they qualify for our Top Private Company list. We included them at the end of the list without sales numbers. The list criteria requires that a company must have private ownership with its corporate office in Whatcom County, and $5 million or more in sales. Sales and employment figures for the top 70 come from confirmed reports for 2012, listed in categories. If you represent or know of a company that fits the criteria and did not get listed, please let us know so we can include them next year. The list expanded this year from 50 to 75, and next year our goal is to identify 100 companies producing $5 million or more. The purpose of publishing this list is to recognize and salute the job creators of our community and to identify trends that can be useful to other business owners. This is an important economic indicator of their impact on the local economy.

Please visit our websites, www. BusinessPulse.com and www. WhatcomBusinessAlliance.com, and our pages on Facebook.

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Private Top 75 Rank

Last Year

Company

Location

Employees: Total

Founded Region

Top Executive

More than $600 million 1.

1. Haggen Inc. Supermarkets and pharmacies

Bellingham

1933

1,000

2,600

John Turley, Clements Stevens, Ron Stevens

Bellingham

1976

400

800

Fred Kaiser and Grace Borsari

Bellingham

2008

393

811

Kevin Weatherill

Bellingham

1989

120

Kevin De Vries

More than $250 million 2.

15. Alpha Technologies/Alpha Group Power solutions for cable broadband; telecommunications, and renewable energy

More than $170 million 3.

2 The Markets LLC Supermarkets (The Markets, Cost Cutter, Food Pavilion)

7. Exxel Pacific Integrated design and construction general contractor

3. Grizzly Industrial Manufacture and sell woodworking and metalworking machinery

Bellingham

1983

300

Shiraz Balolia

6. LTI Transport of dry and liquid bulk commodities

Lynden

1947

110

570

Brad Williamson

Bellingham

1890

200

300

Fred Haskell

More than $125 million

More than $100 million

More than $90 million 7.

5. Haskell Corporation Large-scale construction

More than $85 million

Samson Rope Synthetic rope manufacturer Last year rank: 9 Location: Ferndale Founded: 1878

Employees Regional: 202 Total: 310 Top Executive: Steve Swiackey

Coming off of another exceptional sales year, Samson expansion continues on its building in Ferndale that will house a state-of-the-art research and development center and provide more room for testing. A highlight last year was the companyâ&#x20AC;&#x2122;s 12th patent in the last nine years, for a technology MLX that blends high modulus polypropylene HMPP) into fiber rope products for the first time in cordage history.

More than $80 million 9.

4. Dawson Construction Large-scale construction

Bellingham

1960

125

Peter Dawson

Bellingham

1978

220

Frank Imhof and Tyler Kimberley

Lynden

1941

160

Don Eucker

More than $75 million 10.

8. IMCO General Construction Heavy construction

More than $65 million 11.

10. Whatcom Farmers Co-Op Convenience stores, energy/propane, and agronomy sales

44 | BUSINESSPULSE.COM

Rank 12.

Last Year

Company

Location

*NL Barleanâ&#x20AC;&#x2122;s Organic Oils

Employees: Total

Founded Region

Top Executive

Ferndale

1989

150

Bruce Barlean and John Puckett

Creates/distributes flaxseed, Omega 3, and other supplements

More than $60 million 13.

13. Diamond B Constructors Commercial and industrial contractors

Bellingham

1909

180

Peter Chapman

14.

12. Anvil Corporation Engineering and procurement solutions

Bellingham

1971

300

400

John Macpherson & Jim Wakefield

$50-55 million 15.

17. Mt. Baker Products Manufacturers of plywood veneer, lumber and plywood

Bellingham

1993

120

Rob Remington

16.

11. Wilson Motors New and used car dealership

Bellingham

1960

Julian Greening & Rick Wilson

17.

20. Keith Oil Wholesale petrolium bulk station

Ferndale

1980

Sam Boulos

18.

14. Absorption Corp Pet litter, bedding & food; spill cleanup & industrial products

Bellingham

1985

118

Ted Mischaikov

Bellingham

1944

120

Thomas McLaughlin

$40-45 million 19.

18. Seafood Producer's Co-Op Fishery, processor and marketer of premium seafood

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Rank

Last Year

Company

Location

Employees: Total

Founded Region

Top Executive

20.

19. Saturna Capital Mutual funds manager and investor

Bellingham

1989

Jane Carten

21.

22. Logos Bible Software Computer software

Bellingham

1992

290

330

Bob Pritchett

22.

16. Smith Gardens Wholesale producer of garden plants, nursery, and garden center supplies

Bellingham

1901

200

600

Eric Smith

23.

21. Walton Beverage PepsiCo beverage distribution

Bellingham

1931

140

John Walton & Phil Isle

24.

23. Hardware Sales General hardware, cabinets, office furniture, and B-to-B industrial sales

Bellingham

1962

124

Jerry McClellan,

$35-40 million

Ty McClellan and LaDonna George

$30-35 million 25.

*NL Flora Inc. Manufacturer/Distributor of organic oils, teas, tonics, and supplements

Lynden

1988

Gerardo Quiroz

Kam-Way Transportation Full-service transportation brokerage Last year rank: Not on list Location: Blaine Founded: 2008

Employees Regional: 29 Total: 35 Top Executive: Kam Sihota

While owning and operating his own company fleet, Owner Kam Sihotaâ&#x20AC;&#x2122;s core business is brokerage of transportation needs within the NAFTA corridor from Mexico to Canada. He relocated in Blaine from California, but still maintains a satellite operation there. Read a profile of the business on page 36. 27.

26. Farmer's Equipment Berry harvesters, farm & construction equipment

Lynden

1935

Ken Stremler

28.

29. Superfeet Worldwide, Inc. Premium insole designer, manufacturer, and wholesaler

Ferndale

1977

120

Scott Dohner

$25-30 million 29.

24. Andgar Corp. Residential heating/AC; metal fabrication; architectural metal; biogas digester technology

Ferndale

1935

110

136

Todd Kunzman

30.

32. Sound Beverage Wholesale beer, wine, and distilled beverage

Bellingham

1950

Dean Shintaffer

31.

27. Tiger Construction Everson Excavating and commercial building contractor

1974

Ken Isenhart

32.

36. Specified Fittings HDPE & PVC pipe fitting manufacturer

Bellingham

1997

140

170

Kathleen Gundel

33.

*NL Family Care Network Bellingham Family practice, clinics, community connections

1999

302

Dr. Marcy Hipskind

1967

Dick Meyer

$20-25 million 34.

33. Dewey Griffin Motors New and used car dealership

46 | BUSINESSPULSE.COM

Bellingham

Frank J. Chmelik and Jonathan K. Sitkin have been selected to the 2013 Washington Super Lawyers list.

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WHATCOMBUSINESSALLIANCE.COM | 47

Rank 36.

Last Year

Company

Location

37. Cascade DAFO

Ferndale

Employees: Total

Founded Region 1982

255

Top Executive

255

Cheryl Persse

Designer, manufacturer of dynamic orthoses and pediatric bracing

Blue Sea Systems

Design and manufacture AC/DC electrical Employees Regional: 72 products for marine and specialized vehicles Total: 74 Last year rank: Not on list Top Executive: Scott Location: Bellingham Renne Founded: 1992 Owner Scott Renne was well on the way to having two companies listed, but he sold Terra Power Systems to a corporation in Illinois, Littelfuse, before year’s end. The story of Blue Sea Systems, which Renne conceived while on an around-the-world sailing trip, will appear in the October 2013 edition of Business Pulse. 37.

35. Bellingham Cold Storage Full-service public refrigerated warehousing

Bellingham

1946

162

200

Doug Thomas

38.

34. Scholten’s Equipment

Lynden

1982

Duane Scholten

Bellingham

1911

100

130

John Huntley

Ferndale

2001

Randy Hartnell

Agriculture and construction equipment sales 39.

47. Mills Electric Co.

40.

*NL Vital Choice Wild Seafood

Electrical contractor Web-based wild seafood and organic products

Congratulations to the Top 75!

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Oltman Insurance—Stability, Commitment and Personal Service. We are an independent agency serving customers in Whatcom county as well as throughout Washington State. As an independent agent we represent a number of different insurance companies allowing us to find the best products and prices for you, your family and your business.

Rank 41.

Last Year

Company

Location

25. Mt. Baker Imaging

Employees: Total

Founded Region

Top Executive

Bellingham

1965

100

Dr. Peter Buetow

Bellingham

1980

129

Bob Brim

Bellingham

1981

Mike Hoagland

Lynden

1992

140

Samuel Moncrieff

Ferndale

1990

125

Bill Van Zanten & Ryan Likkel

Radiology, image interpretation, and imaging during low-invasive surgery

$15-20 million 42.

38. DIS Corp Producer of business info systems for ag equipment, construction equipment, and lift truck dealerships

43.

30. Hoagland's Pharmacy Retail pharmacy, medical equipment, and special services

44.

*NL Moncrieff Construction Concrete Construction

46 45.

43 Western Refinery Services Industrial maintenance and construction

Anderson Paper &Packaging Paper and packaging solutions Last year rank: Not on list Location: Ferndale Founded: 1991

Employees Regional: 36 Total: 45 Top Executive: Rick Anderson

Owner Rick Anderson established a scholarship fund that will provide annual assistance to a graduating senior at Ferndale High School. Two niches, Earth Care (environmentally friendly janitorial materials) and NW Paper Recovery (retrieving and reusing products), grew rapidly. The business is featured on page 62. 47.

40. Diehl Ford

48.

*NL TD Curran

Jeff Shaw (l.) and Rick Anderson

Bellingham

1908

Bob Diehl & Mike Diehl

Bellingham

1992

Troy Curran

Everson

1990

William Westergreen

New and used car dealership Apple specialists 49.

41. A.L.R.T. Corporation Logging and road construction

$12-15 million T-50.

44. Birch Equipment Equipment and tool rental

Bellingham

1972

Sarah Rothenbuhler

T-50.

*NL Cowden Gravel & Ready Mix

Bellingham

1946

Steve Cowden and Brent Cowden

Bellingham

1979

Gary Honcoop

Bellingham

1990

121

Kurt Eickmeyer & Wade Bobb

Ferndale

2006

110

Cason VanDriel & Marty VanDriel

Provider of gravel, concrete, and insulated concrete forms (ICFâ&#x20AC;&#x2122;s) 52.

*NL Roosendaal-Honcoop Construction Full-service general contractor providing construction and pre-construction services

53.

39. Wood Stone Corp. Wood- and gas-fired pizza ovens and other restaurant-quality commerical and homecooking equipment

54.

46. TriVan Truck Body LLC Manufacturer of custom-designed, specialty commercial-use truck bodies

WHATCOMBUSINESSALLIANCE.COM | 49

Rank 55.

Last Year

Company

Location

*NL Dickerson Distributors

Employees: Total

Founded Region

Top Executive

Bellingham

1984

Kevin Dickerson and Kent Dickerson

Lynden

1951

Dennis Elenbaas

Bellingham

1981

Terry Dawn

Distributors of beer, wine, and spirits

$10-12 million 56.

*NL Elenbaas Company Fertilizer and horse feed supplier

57.

49. Western Forest Products Commercial distributor of lumber products

58.

45. Barron Heating and Air Conditioning Heating, air conditioning, and ventilation sales and service

Ferndale

1972

John Barron and Bill Pinkey

59.

50. Management Services Northwest Janitorial, Ferndale general building maintenance, landscaping, and groundskeeping

1995

273

Janelle Bruland

$8-10 million 60.

*NL Lister Chain & Forge Inc. Manufacturer of ships anchor chain, navigational buoy chain, anchors & fittings

Blaine

1911

Michael Stobbart

61.

50. Pro CNC Inc.

Bellingham

1997

Paul Van Metre

Bellingham

1987

Matt Mullett

Bellingham

1992

120

124

James Hall

Engineering services, contract assembly, vertically-integrated CNC machine shop 62.

*NL All American Marine Inc. Builder of high-speed, passenger, aluminum catamarans, survey craft, research vessels

64 63.

*NL Northwest Health Care Linen Health-care laundry management services

Bellair Charters & Airporter Shuttle

Bus transportation for airports, Employees Regional: 65 rentals, and special event charters Total: 78 Last year rank: Not on list Top Executive: Richard Johnson Location: Ferndale Founded: 1985 Two big news items last year for this company that has crossed a milestone of 3 million riders on its I-5 airport-to-airport runs: 1. Its first alternative-fuel vehicle went into every-day service, a 20-passenger minivan. 2. The purchase of the southern portion of Hesselgrave Charters, serving Seattle, Tacoma and Olympia. Read about the company on page 20. 65.

*NL Larson Gross PLLC

66.

*NL Barkley Company Developing and leasing commercial and residential properties

67. 68.

Jody Hernandez, who heads maintenance for the Airporter Shuttle and Bellair chartered buses, visits with his sister Dana in the dispatch center.

Bellingham

1949

Marv Tjoelker

Bellingham

TKTK

Jeff Kochman

50. Samuels Furniture Retail and interior design services

Ferndale

1991

Elie Samuel

*NL The Woods Coffee Coffee shops and own bakery

Lynden

2002

165

Wes Herman

Certified public accountants & consultants

More than $7 million

50 | BUSINESSPULSE.COM

Rank 69.

Last Year

Company

Location

*NL Brambleberry

Employees: Total

Founded Region

Top Executive

Bellingham

1998

Anne-Marie Faiola

Bellingham

1992

Jim Sutterfield

Soap-making supplies

More than $5 million 70.

*NL Signs Plus Inc Full-service electric & non-electric sign manufacturer, installation and maintenance company

At the time of publication our staff had not confirmed sales numbers or groupings for the privately-owned companies listed below. Through information from

Rank

Last Year

other sources, we believe they meet our criteria for the Top 75 Private Companies â&#x20AC;&#x201D;privately-owned and headquartered in Whatcom County. We list them alphabeti-

Company

Location

Employees: Total

Black Rock Cable (sold)

Bellingham

1980 in Nev.

72.

Bornstein Seafood

Bellingham

1934

Builders Alliance

Bellingham

74. 75.

50. Erin Bakerâ&#x20AC;&#x2122;s Wholesome Baked Goods Redden Marine

*Black Rock Cable sold to a company in Kirkland, Wash., last January; King Nissan sold to Wilson Motors in Bellingham in March this year, and Terra Power Systems

cally. If you are aware of any company not listed that you think meets our criteria, please email your tip to info@businesspulse.com.

Founded Region

71. 73.

* = Not Listed last year

Bellingham

1994

Bellingham

1959

sold late last year. Our information supports that their sales figures during 2012 while locally-based qualify for the Top 75. Scott Renne, who created Terra four years ago,

Top Executive

12 in 2012 Bob Warshawer Colin Bornstein 47 in 2011

Erin Baker Randy Chiabai

has two companies on the list: Blue Sea Systems appears at No. 35. Wilson Motors sits at No. 15 as the highest-producing automobile dealership.

WHATCOMBUSINESSALLIANCE.COM | 51

Profile: Exact Scientific

An exact science

l-r: Tanya Keith, Lani Gabriel, Tricia Abernathy, and James Allen. (Staff photo)

How lessons from the farm forged a world-class company in just seven years By Steve Hortegas

hile growing up, Kent Oostra worked side-by-side with his dad— in a milking parlor, putting up fences, and riding on a tractor. “Treat people well, and you’ll do fine,” he heard his dad always say. And fine the son did. Within seven years of its 2006 launch by co-founders Oostra and Travis Walkup, Exact Scientific Testing Laboratory in Bellingham’s Irongate district grosses more than $1 million a year. The company operates debt-free except for a new $30,000 piece of lab equipment. The lab provides independent, 52 | BUSINESSPULSE.COM

third-party, microbiology and chemistry testing for leading food, natural food, nutraceutical, agricultural, and environmental clients to comply with rising government regulations. Exact Scientific continues to weather economic storms with yearly profits and growth, as it attracts clients ranging from local to international. Recently, Exact Scientific became the testing partner for one of the world’s largest third-party accrediting bodies. It gets back to Oostra’s dad. “Hard work, treating people with respect, and putting your family first. That’s what I remember,” said Oostra, Exact Scientific’s CEO and laboratory director. Walkup likewise instilled fam-

ily values into the company. Prior to earning a chemistry degree, he worked in his family’s business, the Fountain Bakery, where they were passionate about hard work, good service, and high-quality food. On this blue-collar values foundation, the co-founders built a mission: “A higher standard of laboratory testing.” Example: A shipment of blueberries crossing the U.S.-Canadian border requires cost-effective certification to ensure that the batch meets international standards of safety. Tests are conducted at Exact Scientific’s state-of-the art laboratory for product shelf life, nutritional labeling accuracy, and other issues impacting food safety

and the bottom line. If the shipment passes, it receives the highest standard of certification recognized globally (ISO). After working for other labs throughout his career, Oostra took a leap of faith so he could influence how people are treated at work, and how work is done. He wanted to put his “fingerprint on a business.” Hence, as CEO he set the pace for what clients pay (a lot less than “back east” labs, he said), how clients and employees are treated (above and beyond), and how testing is conducted. That means, Oostra said, “no group testing of samples” like other labs conduct; at Exact Scientific, it’s the old-fashioned way, one sample at a time. Exact Scientific’s first client was one of the world’s leading dietary supplements manufacturers, Flora Health in Lynden. That relationship continues. Danni Rogers, the quality assurance and regulatory specialist at Flora Health, commented, “Exact is unique among its competitors. They take more time to give us extraordinary service, and don’t even charge for their suggestions.”

Labelle, Botanical Laboratories, Edaleen Dairy, Mt. Baker Vineyards, and Good4U Foods, to name just a few. Peter Klootwyk of Good4U Foods in Ferndale, a new carrot processor supplying schools in Washington, Oregon, and California, likes local resources. When he was looking for a lab partner, many nationwide companies never got back to him. “But with Exact, I get to talk with Kent

or anyone else,” Klootwyk said. “They come pick up my samples, and you can tell that his employees are happy there. They treat the little guy just like they do a big guy.” In one of the company’s testimonials, a representative at Barlean’s Organic Oils said, “When we work with Exact Scientific, they treat us as their most important client.” Why, with countless options, would worldwide companies join

Subcontractor of the Year 2012

Flora Inc. in Ferndale, one of the 2012 Top 75 privately-owned businesses (see p. 40), was Exact Scientific’s first client in testing its wide variety of food supplements and natural Omega-3 products. The Exact Scientific team, consisting of all scientists except in the front office, lists clients near and far: The Chia Company of Australia, and regional standouts such as Barlean’s Organic Oils, berry-farm giants Maberry, Enfield, and Sakuma Brothers,

CORPORATE OFFICE · 4430 PACIFIC HIGHWAY, BELLINGHAM, WA 98226 PHONE: 360.734.0730 · FAX: 360.734.0194 · WWW.MILLSELECTRIC.COM WHATCOMBUSINESSALLIANCE.COM | 53

Test tubes at Exact Scientific. (Staff photo)

local clients in using a scientific testing lab in tiny Whatcom County? The Chia Company of Australia explained it thus: “We are a global company and needed a lab partner with globally-recognized methodologies, and globally-recognized standardized accreditation.”

“They treat the little guy just like they do a big guy.” Peter Klootwyk, single proprietor of Good4U Foods producing school cafeteria carrots in Ferndale

A client that recently joined forces with Exact Scientific is NSF International in Ann Arbor, Mich. It was formed 66 years ago as the National Sanitation Foundation, a non-profit, third-party certification body, to standardize sanitation and food safety requirements around the world. NSF selected Exact Scientific to conduct its testing for its seafood division. Much of the company’s success comes from its strategy to become an ISO certifying source—one of a mere handful of ISO test labs in the state of Washington and beyond. 54 | BUSINESSPULSE.COM

The International Oostra’s staff of 17 enjoys Organization for serving as a bridge between a cliStandardization, which curient’s products and their success. ously inverts letters in its acroEntrepreneurial roots drive the nym, is the prestigious center team to deliver more than just test of ultimate certification, based results, with the knowledge that in Geneva, Switzerland. ISO business owners also need peace assures that testing quality is of mind and product profitability. consistent with all international “We want to be the right arm standards, e.g., the aforemenof a business,” co-founder Walkup tioned blueberry test results will said, “a part of what they do.” be the same here as in Kuwait. Oostra said that when he goes This gives peace of mind to home each night to his family on companies with international their small farm out in northern reach. Omar Soto, the qualWhatcom County, he reflects on ity assurance manager for Curt what made a good day at work. Maberry Farms in Lynden, said “It’s when I have helped our cliISO increases his comfort, trust, ents solve their problems, when and confidence. National food our employees find satisfaction in broker Kevin Barrett of Seattle their work, and when our compasaid he believes that the more ny earns slow but steady growth.” accreditation a lab has, the better. “Labs like Exact Scientific are my last line of defense,” he commented. Julia Jacobson is president and CEO of NEXT Medical Company, a women-owned, ultrasound gel manufacturing company in Bellingham. Citing Exact Scientific’s delivery of ISO standards, she said, “We felt we were dealing with a world-class laboratory from the first time we met. Now with ISO certification, it just confirms what we felt all along, that their people and services have Kent Oostra gets involved in all phases of the testing process. Here, world-class he examines some results with staff microbiologist Krista Elgin. standards.” (Staff photo)

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Guest Column: Economics Dennis R. Murphy | Western Washington University Dr. Murphy is Dean Emeritus of the College of Business & Economics at WWU. He continues to lecture in classrooms he has filled since 1983, including a course known as “Murphy 101” that commands a waiting list of some students from other fields of study. He holds a Ph.D. in economics (Indiana University), and has a vast background in finance (Cascade Financial, Saturna Capital advisory boards, and more). He serves on the Business Pulse editorial advisory board and contributes this column.

Mid-year assessment: ‘The Recovery Summer’ D

uring the summer of 2010 Vice President Joe Biden was the point person on the U.S. government’s “Recovery Summer” charm tour. Touting the stimulus bill’s imagined impact on unemployment, he and others promised that unemployment would stay under 8 percent—and that we were, in fact, on the cusp of recovery. We now have entered the third summer since that failed forecast—a good time to assess how we are doing. We came into 2013 with less enthusiasm than usual, beset with the daily drumbeat of bad news. Unemployment was high, economic growth was elusive, fixed income instruments were paying a pittance, Europe was in a crisis of low growth and defaults, and even the Chinese economy was slipping. Housing was struggling, buffeted by the foreclosure debacle, lack of demand, and falling prices. Debates about the deficit and debt ceiling spilled over from 2012 and raged on, and we had daily warnings that the sequester would lead to devastation. The White House was closed, and all talk of the “Recovery Summer” was but a distant bad memory. While no one is brash enough 56 | BUSINESSPULSE.COM

to talk of a summer of recovery, halfway through the year we’ve seen a glimmer of positive news. The negatives, particularly in the employment arena and bonds, remain very much still with us, but some positive signs appear. Dare I say green shoots!? Consumer confidence, by no means yet ebullient, has gradually increased—which is important because the formation of positive expectations leads to future action.

Consumer confidence, by no means yet ebullient, has gradually increased, which is important because the formation of positive expectations leads to future action. Housing represents a prime example. Home prices have recovered as sales have increased, fueled in part by consumers who have been waiting for prices to bottom out. Mortgage rates have moved off their historic lows. Continued improvements in housing markets ultimately would bode well for the overall economy. Right now; however, turning the corner toward 2014, we continue to bump along the bottom. The stock market indices also

have stayed well into bullish territory for quite a while. Indeed, the Dow Jones Industrial Average has remained bullish for nearly five years. The markets have tested previous highs many times recently and failed to find a top. While this might be a cause for pause— even mild anxiety—price-to-earnings (P/E) ratios look reasonable, and the wealth effects of the runup are salutary for the moment. An increase in equity prices in large part indicates a search for yield, given the lack of any return for risk in the bond markets. High bond prices sustain on the Fed’s monthly purchase of $85 billion in Treasury securities and CMOs (collateralized mortgage obligations). There remains no expectation that bond prices will fall either much or soon. If bond yields are the bottom jaw of a wide-open alligator’s mouth, and stock yields the top jaw, that alligator has been holding its mouth open for a long time. Sooner or later it will close. Who, I wonder, will be caught in those jaws? Economic growth during this year’s first quarter came in at just 2.4 percent, and that exacerbated the unemployment situation. The reported unemployment rate of 7.5 percent disguises the fact that if you include so-called discouraged workers who stopped seeking jobs, that rate rose to 8 percent. And U6—the broadest measure

of unemployment by the Bureau of Labor Statistics—remains very high at 13.9 percent. This, at a time of historically-low labor force participation rates, hovering around 63 percent. Fed economists have calculated that if the economy created 208,000 jobs a month with current participation rates, unemployment would still be 6.5 percent by 2014. If participation rates rose even slightly, by less than 1 percent, unemployment in 2014 would be 7.5 percent. That’s ambitious, because the average job creation for all of 2012 was well under the 208,000 jobs a month. Closer to home the Washington state revenue forecast, revised down slightly in March, basically follows the national data—bumping along with slow growth of both output and jobs. Europe seems to have decided to live with the problems of Club Med (the catchy monicker for Union of the Mediterranean), at

least until the German elections in September. How deep the German commitment goes toward paying for profligacy in other member states is still a matter of conjecture, but available evidence suggests it is quite deep. Growth is slow in all of Europe and shows little prospect for change. We are in a strange new world with the central bankers basically running all economic policy. Will this group or guardians prove more prescient than their predecessors? The jury is very much out, and the question of who will “guard the guardians” remains unanswered. All things considered, in my more optimistic moments, I think that this is far more likely to be a summer of slow—very slow—recovery, unlike that of 2010.

Dr. Murphy’s halftime score Last winter as a new year approached, Dennis Murphy moderated a panel at an annual economic forecast breakfast in Bellingham. In our January edition he offered his look at 2013. At halftime, how does his scorecard read to him? “Things are largely about what I expected earlier—very slow growth, extremely low interest rates, very high unemployment by historical standards. Overall I am ever so slightly more optimistic mid-year than I was at the onset.”

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TITLE K-9 Lap of Luxury Profile:

Catering to canines

Carrie Lane and two of her Bull Mastiffs, Maestro (left) and Venus, in the K9 hydrotherapy pool. (Photo courtesy of K9 Lap of Luxury)

Popular Lynden spa offers healing, relaxation in hydrotherapy By Sherri Huleatt

n unusual indoor spa in north Whatcom County has mastered the art of keeping its clients happy.

Each client is catered to every step of the way—warm up on heated floors, relax on comfy chairs, swim in a private, state-ofthe-art hydrotherapy pool that’s climate-controlled to a perfect 90 degrees, then unwind with a circulation-stimulation massage and custom-stretching session. This is not your average client. She’s an eight-month-old golden retriever named Lucy. K9 Lap of Luxury operates Whatcom County’s only warm water therapy pool for dogs. 58 | BUSINESSPULSE.COM

Located north of Lynden on 14 acres of farmland, K9 opened in 2009. Carrie Lane, the owner, works six to seven days a week, and now she places potential new clients on a waiting list for at least several weeks before they can get an appointment.

“…We view our work as something sacred.” Carrie Lane, owner of K9 Lap of Luxury dog spa

“Our facility is by far the nicest dog pool I’ve ever seen,” Lane said. “We didn’t spare any expense—we’ve done everything top shelf. Everything is designed

for dogs. It’s an amazing facility.” The expertise of both Lane and her one other employee, Karen Theusen, also keep the customers coming. They use K9 Lap of Luxury to keep their dogs fit, lose weight, stay active as they age, or—the No. 1 reason—to rehab from illness or injury. “Karen and I have done extensive training,” Lane said. “Other places aren’t as qualified as we are.” Lane has more than 20 years of experience in working with dogs, while Karen has 15. Much of Lane’s K9 background comes from raising and showing bull mastiffs (these days, she has five). Despite having to spend almost eight hours in the pool at least six days

a week, Lane has no immediate plan to hire additional employees. “We want to know everything about each dog,” Lane said, noting how a one-on-one relationship with each dog is difficult if more employees with less experience get involved. K9’s dedication to every dog sets them apart from similar operations. Lane and Theusen take extensive notes on each animal, tracking swim time, performance, and improvements, so that every swim is catered to help them grow progressively stronger and more confident in the water. “I just wish there were more hours in the day,” said Lane. Her business has been fully booked five days a week from day one, and now scheduling fills up six days, and she and Theusen work their own dogs on Sundays. While other dog therapy pools around the state are closing, Theusen and Lane do about 70 swims a week, or about 3,640 swims a year. Carrie estimates that she’s seen virtually every breed, and that more than 1,000 different dogs have swum there. They have ranged from a tiny Chihuahua (“he’s 18,” she said) to Bull Mastiffs like hers that push her scale in the outer office beyond 200 pounds. Much of the facility’s popularity has been from word-of-mouth marketing. “People always have wonderful things to say about us, and that means so much to us because we view our work as something sacred,” said Lane. It hasn’t all been smooth sailing for K9, though. During its beginning stages, the County struggled with permitting K9’s pool for commercial use, causing a significant delay in acquiring building permits. The entire facility had to be completely redesigned to meet different standards—adapting to classification as a residential pool in a commercial building to keep chlorine at a safe level—which delayed K9’s opening an entire year

Is this dog smiling? He should be. He’s deep into a K9 Lap of Luxury. (Photo courtesy of K9 Lap of Luxury)

WHATCOMBUSINESSALLIANCE.COM | 59

Defining Cottage Industry to the Max Entrepreneurship doesn’t end with Carrie Lane’s dream spa for dogs. On the sprawling 14-acre property they share with their Bull Mastiffs – Maestro, Serena, Venus, Splash, and Neptune – she and her husband John have three other cottage industries:

• J.C. Lane Auto Repair in a large building behind the K9 building. • And, they lease their farmland for growing corn, potatoes, and wheat. John even goes gold-mining seasonally in Idaho for yet another side venture, and Carrie intends to add dog therapy training to her schedule. The Lanes moved to Lynden from Isaquah “to slow our lives down,” Carrie said. “We definitely are not good at working for other people.”

• Boarding kennels for dogs, and retail food and dog gear in the spa. Karen Theusen at K9 Lap of Luxury and Hannah, a 13-year-old English setter. (Staff photo)

and doubled the construction cost. The facility will grow soon when she installs an underwater treadmill. That will allow working with different muscle groups in a non-weight-bearing workout

method. Lane also plans to hold dog training classes that teach basic massage and stretching. Lane has a Master’s degree in psychology from Seattle University and is a registered counselor in the

se. Get Hooked on nwtraver com

state of Washington. She worked 14 years as a mental health counselor. It was while learning to swim with her own dogs that she began to appreciate the many benefits of canine warm water therapy and

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decided to get formal training in hydrotherapy and a certificate in small animal massage. “The benefits of warm water therapy couldn’t be overstated,” Lane said. Hydrotherapy helps improve circulation and mobility, increases strength and endurance, helps build confidence and reduce anxiety in a safe environment, and helps to significantly heal dogs following a surgery. In fact, almost half of the dogs they swim with are recovering from some sort of surgery.

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“I have a front row seat to healing.” Carrie Lane

Brinkley, a four-year-old Wheaton Terrier, had two operations and was experiencing significant lower back pain. After going through regimented swims and custom massage sessions at K9, Brinkley’s bones healed “perfectly,” according to his veterinarian. He experienced no muscle loss and the pain went away with massage. “He was able to go back to being a regular dog again,” Lane said. Another favorite example of hers was an older Corgy namedWesley. “He was 14 ½ when he tore ligaments in both knees. He was too old for surgery, and the vet said he would never get around very well again, possibly even require a wheelchair.” You can guess the rest. She described twice-a-week rehab in which the warm water kept inflammation down in Wesley’s arthritis, and eventually he would swim 45 straight minutes, could walk unassisted, and took no pain medication. “Without a doubt our mission is to help as many dogs as possible to feel better and have the best lives possible,” Lane said. “I have a front row seat to healing. There’s always something that surprises me about the day.”

WHATCOMBUSINESSALLIANCE.COM | 61

Profile: Anderson Paper & Packaging

Anderson doubled in three years Expanded thinking in the box moves company forward rapidly to other niches and full-service supply chain Photos and Article by Mike McKenzie, Managing Editor

aper and packaging. Wrapping and boxes. Put stacks and stacks and stacks of that, and just that, under one roof in Ferndale, and you have the only independently-owned packaging and shipping operation in Whatcom County—Anderson Paper & Packaging. By itself, that’s huge—a rapidlygrowing, multi-million dollar operation, performing the 1-2-3s of basic wrapping, boxing up, and shipping for customers as far south as the Seattle suburbs up into British Columbia.

But the name and the core business don’t say enough about that process, and several other processes under various roofs. A name to cover its total business, however, wouldn’t fit well on a logo or sign or in answering a telephone call: Anderson Paper & Packaging & Janitorial Supplies & Paper Converting & Outlet Retail Store & Packaging Engineering & Kaizan Training & Packaging Optimization & Storage & Other What-Do-You-Need, We’ve-Got-It or We’ll-Get-It Services…. (Say that three times real fast.) Each of those components holds high value, and some are getting higher by the day. None of the descriptive labels, however, cap-

Clayton Hermanson (center) holds a tray of four Home Fire Prest Logs that was completely redesigned in the Packaging Optimization Program that customizes solutions throughout the entire supply chain.

tures the heart of what matters most in the business as the owner and CEO Rick Anderson envisioned it when he started 21 years ago—personal service tailored to every individual need. That vision of relationship marketing makes Anderson tick. That vision has led to a revamped transaction approach that centers on service, not product. Product will be there when it’s needed. (“J-I-T… just in time,” VP/Sales Manager Jeff Shaw said, referring to an MIT program that streamlines the order-supply process, in which Anderson stocks for customers who then order only when needs arise rather than buying truckloads and taking up space with inventory.)

Shaw arrived about three years ago and has more than doubled Anderson Paper & Packaging’s gross sales. In that span they’ve also nearly doubled staff, landed a $1 million contract in the Seattle area, and established a presence in Renton. “Four in sales, one in operations, and one driver,” Shaw said. “We’re in Big Dog country now.” In terms of having something wrapped, packed, and shipped, Anderson Paper & Packaging is a one-stop shop. Beyond that, the company is

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rebranding its interwoven parts as “Supply Chain Solutions.” Anybody who needs to move a product from Point A to Point B, or the rest of the alphabet, from single proprietor to seven-figure contract, Anderson wants to enable and supply each step. Not just with the products. Rather, also the methods. They might involve Kaizen Assembly’s training in Lean and green applications, or custom-design packaging. AP&P is engineering a supply chain. This isn’t simply over-thecounter (or Internet) transacting, though that’s available, too. They’ll first help you design a plan, often one that will save money. Then, they’ll supply the wrapping materials, the corrugated boxes, the pallet, the truck to send product on its way. Through affiliations and partnerships with the nation’s largest inventory providers, the company’s reach is far, wide, high, deep, fast, and price-competitive enough to be all things to all customers. Strong focus still centers on being all things to any one customer. Shaw offered a mantra the

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Owner Rick Anderson (left) and Jeff Shaw, VP/Manager of Sales, visit among the mountains of boxes in warehouse at Anderson Paper & Packaging.

company calls its slogan: “We’re big enough to compete, but small enough to care. We can go up against the big regional players,

yet remain nimble and make onthe-spot decisions.” He’s also fond of saying about their customer base exceeding 1,500 buyers,

“Large or small, we love ‘em all.” Shaw cited the company’s first million-dollar contract in Bellevue recently as a landmark for establishing a strong presence of competition in the region. Still, he also pointed out, their biggest contributions to bottom-line results come from “90 percent of our customers who do $10,000 a year or less.” “We’re little,” Shaw described the happening, “yet we have good pricing. We’re quick, and we’re personal. With more than 1,500 buyers, that’s how big we can go, and how small we can go.” A tour of the huge warehouse off an I-5 frontage road also reflects loyalty and longterm commitments both ways. It is stacked high with stock and customized boxes for many familiar brands in Whatcom County, the likes of Bowman Manufacturing, Brambleberry, Barlean’s, Flora, Kaizan, Nature’s Path, Vital Choice, and many more. Sales have soared toward the

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$18 million threshold, ranking the company among the top 50 freemarket businesses in Whatcom County. He hatched a precise plan for the owner, and the results are profound: From 2010 through 2012, sales doubled and Anderson created 22 new jobs, taking its work force to 45 this year. Their next goal in a five-year plan is to triple. Shaw described the company’s winning formula precisely and succinctly. “We invested in people, eliminated waste, increased productivity, and drove down costs,” he said. “I made promises (to owner Rick Anderson) and we made it happen.” Make no mistake, the staff knows who their dance partner is. Good old-fashioned corrugated boxes still remain 35 percent of the business, and two other provisions—wrapping and strapping of lumber, and traditional shipping supplies—make up another third of the revenue stream. The janitorial supplies—Earth Care—bring upward to 10 percent through the door, much of it at the outlet store across a driveway next door to the warehouse and offices. The recent surprise is the results of a commitment to recycling and reusing paper as its own separate business, Northwest Paper Converters. “In our first year that niche doubled,” Shaw said. “We see major growth potential in both the janitorial and converting, and in Canadian business. We send two trucks a day to B.C.” Another facet of Anderson Paper & Packaging of extreme importance to the company mission involves family and community service. Anderson is father of three college-age children, two daughters and a son who works at the company. Shaw has four children, two girls, two boys. The company sponsors Ferndale Boys & Girls Club events, gets involved with youth baseball, and other mainstream involvements. Particular pleasing, though, is the

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Clayton Hermanson, Co-owner, HFPL

Local fire log business soared after using Anderson POP About two years ago, Clayton Hermanson, co-owner with his parents of a Ferndale-based family business, approached Anderson Paper & Packaging for a makeover. Home Fire Prest Logs—HFPL as a brand—had a conundrum with its 30 pound package of six wax-free logs made from recycled compressed wood fiber. “The average woman, who’s the main buyer, was having to lift a 30-pound box of six logs,” Hermanson said during a visit at the Anderson Paper facility. “And they’d do that only once.”

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Anderson’s team placed HFPL into its Packaging Optimization Program. That involved a creative process of identifying new colors, revamped and more efficient packaging, reduction of materials, and other tweaks. In their first sitting with HFPL, Anderson looked at the box and asked, “Got a knife?” He espied how rounded corners on the box would form a tray for easier pick-up and carrying. “I noticed how we could round off the corners of the box and make it easier to get your thumbs under it to lift off the store shelf,” he said. Anderson’s VP for sales Jeff Shaw explained how they wanted to maximize how to store it, ship it, and retail it better. The end result was reducing the package in size slightly, packaging four logs instead of six to reduce weight and increase units on a pallet or shelf. Reduced to 4 logs, 20 pounds, reduced number of units on the pallet. HFPL’s business shot up when the product was introduced in an 18-pound, firmer-grip, tray-like, four-log box with a new look, feel, and heft. “Profits rose 55 percent, and retail doubled in a year,” Hermanson said. “Retailers could put more on the shelf—three boxes instead of two— and it was better eye candy. You couldn’t see the product before.” Rick Anderson and Shaw explained how they worked first on finding the right size to fit pallets perfectly, cutting just 10 percent but doubling space for storing more boxes. The project revolved around discussions other than floor space of flow efficiency, ease of movement, and the like. “Increasing efficiencies was the key, lean manufacturing,” Shaw said.

“We reduced the use of raw materials, and put the logs into fully automated shrink wrap. That really resonated with Clayton.” Further, Rick Anderson has training in CAD (computer-aided design) and, Shaw said, he thinks like an engineer while he works on packaging design. Clayton concluded, “Four years ago I would have thought a four-log box was the wrong idea, but they worked with us and it was fantastic. I was thinking, ‘Is it that easy? This is cool.’ Two years later they’re still trying to help us improve on things (with POP).” Shaw said this project stands as an example of Anderson Paper & Packaging delivering beyond the supplies—customizing options in the rebrand, solutions up and down the supply chain. “We’ll do whatever it takes,” Shaw said, “to streamline and compartmentalize.” — MM

annual scholarship that the company awards to a graduating senior from Ferndale High School for college. The recipient must have an interest in business and marketing. “We implemented a total culture change,” Shaw said. “We’ve brought internal communications to the process. We sell our expertise. It’s all about serving our customers….and serving our community.” Rick Anderson met Shaw when Shaw worked at a local manufacturer, MAXX. They hit it off immediately. “With Jeff, I was able to clone myself,” Anderson said. “We’re on the same wave length. We’re both innovative, and we have a great relationship. You’re only as great as the people you have. “It’s become an unbelievable story, where we started and where we are today. It’s fun.”

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Industry Report: Guns & Ammunition

The dearth of guns and ammo By Mike McKenzie, Managing Editor

ohn Westerfield, the store manager at Yeager’s in Bellingham, has worked in the gun and ammunition industry about 40 years. He’s worked in and with law enforcement. In and with the military. In wholesale, retail, and training. He’s worked for a number of firearms manufacturers – Colt, Mossberg, and sales rep and regional manager with Glock in the U.S., and vice president of a company in Canada for 10 years. 68 | BUSINESSPULSE.COM

John “Westy” Westerfield and Mike Sytsma demonstrate safe handling practices of a handgun at Yeager’s gun department that Sytsma managed in Bellingham. (Photo by Mike McKenzie)

Seated in an upstairs cubby-hole office at Yeager’s, where he started his career in 1973, stayed eight years, and returned 3 ½ years ago, he recently addressed an issue in the firearms business he said he’s never before encountered. Especially with ammunition. Retail stores now ration it, often limiting sales to a box at a time. “I’ve traveled all across the U.S. training police officers and selling firearms and other equipment to law enforcement officers, and to government agencies, all levels, Federal, and whatever,” Westerfield said. “I have seen shortages. I

have seen a number of things that might have been called crises. “But I’ve never seen a push for ammunition like this.” The firearms industry throughout Whatcom County mirrors the national paradox: Everybody’s getting a gun and ammo. Nobody can get a gun and ammo. Well, not nobody, of course; stores still have guns on their racks, and people still buy them. But, as Westerfield pointed out at Yeager’s, empty spots glaringly out-number the inventory. “The availability of firearms is not good at all, but it seems to be

getting a little bit better because certain legislation that was being considered did not pass,” he said. “However, the ammunition problem doesn’t seem to be getting any better. We are starved for ammo, and so are our customers.” The reasons? In surveying a number of local merchants that deal in firearms, Business Pulse heard several factors underlying the difficulty of finding, let alone purchasing a new gun— especially a handgun—and the ammo it fires. Most of the sources we spoke to tip-toed around the most obvious. Type “best gun salesman in America” into your search engine. The entire first page of results rings unanimously, from various sources, to the left and the right. USA Today led with this in one of the most recent articles and blogs: “The White House unintentionally is proving to be the best thing to happen to gun sales in decades.” A Business Week article and

a website called ammo.net pointed out extreme revenue spikes in guns and ammunition sales and related federal excise taxes since 2008. One firearms manufacturer, Ruger, outperformed gold on the market and leapt 98 percent in sales from 2008-‘12, according to those sources. Ruger is just one example, the popularity of Glock another, the dearth of America’s most basic ammo—.22 caliber, all spurred by: Proposed gun legislation, Constitutional rights debates. Arguments over background checks and gun-free

Dave VanderHoek at Dave’s Sports Shop in downtown Lynden demonstrates one of the handguns that buyers so desperately shop for and so rarely find these days of the public’s run on guns and ammo. (Photo by Steve Hortegas)

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zones. Rise in applications for concealed-weapon permits. Membership in the National Rifle Association soaring to the highest levels in its 142 years, and so it goes…. Another glaring cause for perceived crisis, if not panic buying: Fear. Each of the several sources we spoke to who are involved in the firearms industry mentioned the concept that American citizens are afraid. Afraid of losing their right to bear arms. Afraid of the incapability of protection. Afraid of running out of ammo. Afraid because of public tragedies like those at Sandy Hook Elementary School in Newtown, Conn., last December, and in an Aurora, Colo., theater a year ago, and at Virginia Tech five years earlier, and in Santa Monica, Calif., last month. “Millions of Americans are becoming first-time gun owners,” new NRA President James Porter told members attending the national convention in May. “The media calls it fear. That’s not it. It’s a sense of natural outrage that’s been building for quite some time.” (The NRA reported that it experienced about a 10 percent increase since November 2012.) Some interesting phenomena have surfaced in this surge of gun and ammo purchasing, or attempted purchasing. One, many sources support Porter’s statement that a large segment of first-time gun owners crowds the marketplace. Two, many sources – including one of ours, gun show promoter Victoria Gilbert in Mount Vernon – point out the huge numbers of women now carrying handguns. One of her Falcon Gun Shows set up 150 booths last month at the Silver Reef Hotel Casino Spa’s huge, new events center. A spokesperson for the facility said the first of two days, a Saturday, drew the largest floor business the Silver Reef has ever had—including its usual busi-

est two-day period, New Yearâ&#x20AC;&#x2122;s. Around 825 attended Saturday, and another 320 Sunday.

â&#x20AC;&#x153;Iâ&#x20AC;&#x2122;ve never seen a push for ammunition like thisâ&#x20AC;Ś.we are starved for ammo, and so are our customers.â&#x20AC;? John Westerfield, store manager, Yeagerâ&#x20AC;&#x2122;s in Bellingham

Each retailer we visited had placed restrictions on the amount of ammo each customer could buy at once, most of them allowing just one. On one visit to Walmart, a local gun owner said he could buy three boxes, but the next time he went a couple of weeks later he could only buy one. â&#x20AC;&#x153;It depends on the caliber and how much we have in,â&#x20AC;? Westerfield said of Yeagerâ&#x20AC;&#x2122;s policy. â&#x20AC;&#x153;On certain key calibers weâ&#x20AC;&#x2122;re allowing one box of ammo. Weâ&#x20AC;&#x2122;re also trying to make sure we keep at least one box for every gun that we sell.â&#x20AC;? The retailers all said that market demand is not the only thing making guns and ammunition scarce and more expensive. The cost of materials has risen considerably for manufacturers, such as steel for gun barrels and lead and copper for ammunition. Westerfield said that at Yeagerâ&#x20AC;&#x2122;s, â&#x20AC;&#x153;The hardest to get right now is the .223 rifle ammo, which is also 5.56mm in military designation,â&#x20AC;? followed by 9mm, and then .40 and .45. â&#x20AC;&#x153;But the big surprise to all of us is how difficult it is to get .22 caliber. The demand for rim fire has been enormous.â&#x20AC;? Gun dealers operate on tight margins, too, according to numerous retailers in the area, including big box, specialty and sporting goods stores, and authorized pawn shops. They have to factor in more than just the normal exchange of the merchandise. Yeagerâ&#x20AC;&#x2122;s cited the large cost on the sale of a gun

over and above the actual purchase pricing. â&#x20AC;&#x153;Considering the time involved,â&#x20AC;? Westerfield said, â&#x20AC;&#x153;just that process alone of sending a gun out the door, itâ&#x20AC;&#x2122;s about a $35 investmentâ&#x20AC;&#x201D; our most expensive saleâ&#x20AC;&#x201D;to say nothing of the cost of the firearm, the taxes, and the insurance thatâ&#x20AC;&#x2122;s involved. Firearms is the most expensive sale we make, the most expensive sale we stock other than boats, and thereâ&#x20AC;&#x2122;s a great deal more work involved in the receiving, storing, and selling of firearms than any other product that we have.â&#x20AC;? The business of firearms and ammunition continues its heading into an uncertain future. Nobody in our surveillance spoke pessimistically. Yet the looming possibility of legislation and heavy regulation and/or taxation at both the state and federal levels precludes any bubbly optimism, either.

On behalf of Business Pulse Magazine, Steve Hortegas interviewed three persons in the firearms industry. Here, in Q&A format, are some of their observations. For more, visit www.businesspulse.com Web Extras.

GARY RASMUSSEN, Range Master, Plantation Rifle Range The range, which operates under the Whatcom County Parks and Recreation Department, opened ni 1971. It features indoor and outdoor ranges for small-bore rifle and pistol, trap, and a classroom. It is one of the most active sites for law enforcement and general public shooting and training in Whatcom and Skagit Counties.

Business Pulse: What is your situation in terms of

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TITLE make it for the public.

Q: What’s the impact on your business?

Yeager’s has had to ration ammo to one box per customer, depending on the caliber and the inventory of the ammunition. (Photo by Mike McKenzie)

availability of hand guns and ammunition? Rasmussen: There is currently not much availability of guns in general. My impression is it has been this way since the November (national) election last year. Ammunition has been in short supply quite awhile. I’ve asked gun stores, and usually they have said the manufactures of ammunition are loading like crazy, but when it hits the shelves, people are buying it like crazy. A little ammunition is starting to filter into stores now, but it is still pretty hard to come by. A bit of the reason is that the (federal) government is buying ammunition as fast as it can, with wars in the Middle East… Apparently U.S. manufacturers do not have time or personnel to produce it (for consumers) since they are doing war contracts for 223 Remington, 9-millimeter, and the like. If manufacturers make ammunition for the U.S. government, they don’t have the time to 72 | BUSINESSPULSE.COM

A: We experienced a high level of usage of our facilities from the first part of January to the end of March and even a little into April. Why? At the time I felt it was a political sense about U.S. government impact on private ownership of firearms, so people were getting out to shoot and exercise their rights. If a ban was coming in the near future, they wanted to make sure they had purchased a firearm, especially if they never owned one in the past. In fact, many who never owned one are now purchasing them, and once they got one, they needed a place to shoot. So we had more customers. Right now (June), we are experiencing a drop off, but we usually do this time of the year. It’s a little more pronounced than previous years, and I attribute it to a lack of ammunition in retail stores. We have ammunition we sell at the range. But prices have increased the last few months, so it puts a little damper on people who want to come out and shoot. I would say new production ammunition like Federal, Winchester, CCI Speer (ammo companies) has increased a good one-third in price. The reloaded ammunition has only gone up about a tenth.

Q: Can you get all the ammo you need? A: We want to buy five or six

cases (1 case is 5000 rounds). I am told stores do not allow more than a carton of 500 rounds a day per person, or might even just sell a box (boxes have 50 to 100 rounds, depending on the manufacturer) per person.

Q: What guns or ammo are in demand right now? A: At gun stores, we can’t get

enough of ammunition like .22 rim fire. That is the staple ammunition. It is almost non-existent except for some European manufacturers. We have bought small amounts, like some German-made ammunition, from back east.

Q: Any unusual stories related to this shortage? A: There was a time about four

weeks ago where we did not have any .22 rim fire ammunition. Several came in expecting to buy it, and they had to turn around and leave. So there have been a few people disappointed. There also have been other people looking for .223 ammunition so they could shoot at the high-power range, and all of a sudden they could find it. I asked where they found it, and they said Cabela’s in Marysville, but it is sporadic.

Q: What do you see happening in the future? A: I would have to say there is

light at the end of the tunnel. We are seeing a little bit coming in, but I think the shortage will continue for several more months into the year. Once customers stop being in the mindset of buying two to three times what they need because they are afraid of running out, there will be ammunition on the shelf. Then they can just walk into the store and buy it, like we are used to seeing milk and bread on the shelf, and we do not have to hoard. Definitely by the end of this year, we should see a more normal situation.

DAVE VANDERHOEK, Owner Dave’s Sports Shop, Lynden VanderHoek’s parents, Jude and Gert, opened the store as Jude’s Sporting Goods & Housewares in downtown Lynden in 1957. About six years ago, the renamed store

WHATCOMBUSINESSALLIANCE.COM | 73

expanded to 6,300 square feet. Dave VanderHoek commented, “More than fifty-six years later, the VanderHoek family and our friendly and knowledgeable team are still serving Whatcom County with everything for the outdoors.”

Business Pulse: What is your situation in terms of availability of hand guns and ammo? VanderHoek: In 2008 and 2009 the same things happened to a smaller degree that is happening now—panic buying and selling by owners to avoid a shortage at a later date. There is a huge shortfall. I have not seen anything like this in 40 years. If I have 70 different calibers of ammo, 50 are hard or impossible to get. All calibers for handguns—9millimeter, 40-caliber, .38 special— and others are very hard to come

by. The most common ammo is .22 caliber, and nothing is available for that. We are six months to a yearand-a-half behind (on supplying orders). We need to limit sales to 2 boxes or 500 shells per person.

are much stricter than federal law. Another reason for the shortage is that the U.S. government has placed a larger than normal order —in the billions of rounds.

Q: What are the factors causing this?

Q: What’s the implication for dealers in Whatcom County?

A: It is definitely because gun

A: Sales are brisk, but supply

owners and shooters are buying extra to make sure they do not run out because of fear of rising restrictions and taxation. Last December, the AFT (Bureau of Alchohol, Tobacco, Firearms and Explosives) and FBI gun registration reports said on average there were about one million gun transactions each week for the month. That’s about triple the normal sales. A big concern right now is what the Washington (State) legislature will do. State laws, like in New York, Connecticut, and California,

is terrible. We can’t get what we want. Most dealers have not raised their prices, but we are not having any (reduced-price) sales. We try to be as fair as possible and distribute supplies fairly with our waiting list. Bigger stores like Walmart can’t. They have a frenzy of sales in the morning and then it is gone. As for Internet sales, prices were outrageous, but they are stabilizing now. We just keep on ordering guns and ammunition. Customers know

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that it is not shopping as normal. Some of our customers get through it by having their friends or relatives reload ammo for them.

Q: Any unusual stories related to this shortage? A: Every day is a story. People

come in and ask for certain guns or calibers, and half the time there is a supply, and half of the time there is not. We have a wait-list at the cash register with 30 pages of people waiting for just .22-caliber ammunition. Thatâ&#x20AC;&#x2122;s 500 names. We are three months behind on .22-caliber long rifle loads.

Q: What do you see happening in the future?

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A: If nothing major changes to

upset the apple cart in Olympia or Washington, D.C., the situation could equalize in 6-to-18 months. If there is an added tax or registration, panic could start over again and it could double that. It puts a nauseous feeling in my stomach. My job is to keep criminals from getting guns and ammo, not law abiding citizens. I can foresee erratic change.

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DON KESSELRING, Co-Owner Kesselringâ&#x20AC;&#x2122;s Gun Shop, Burlington Under third-generation family ownership, brothers Don and Keith, this is the largest gun shop in this region with 26 employees. Clarence Kesselring opened the store 66 years ago and it retails firearms, ammunition, optics, and reloading supplies for wholesale, retail, military, and law enforcement customers.

Business Pulse: What is your situation in terms of availability of hand guns and ammo? Kesselring: Both are in real

short supply. Some of the companies are now sold out for their

WHATCOMBUSINESSALLIANCE.COM | 75

whole production for the entire year. Manufacturers are working seven days a week, 24 hours a day. One manufacturer I heard of is making 8.5 million rounds a day, for 22 mm ammunition. And we are still short.

ber and 9-millimeter ammunition, and .40 and .45 caliber, too. The .223 and .308 rifle ammo is in short supply.… since there is not the manpower to make that type of ammunition (in the current push for the rest).

Q: What are the factors causing this?

Q: Any unusual stories related to this shortage?

A: Most of it is because of the uncertainty of what will happen with our government (state and federal) in terms of regulation. There are also rumors that the (federal) government is buying it all, but the general public is buying a lot too. The short supply started when the new administration got in (in 2008) and it has never really recovered from that.

A: People are coming in and can-

Q: What guns or ammo are in demand right now? A: The shortest supply is .22-cali-

A: The shortage could slow down if there is no more talk about gun control, no taxes on ammunition, and once we get through the next three years of the current administration. I do not see it letting up before then.

not understand why they can’t get what they have gotten all their life, and now it is not available. I hear a lot wondering why they can’t build new factories. It is not smart since it can go back the other way just as fast. I hear the public is hoarding. That is probably true in some senses, but there is not a lot to buy. You can’t hoard what you can’t buy.

Q: What do you see happening in the future?

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Philanthropy: Swil Kanim Foundation

Hannah Martine, the foundation’s marketing director, gets a hug from Swil Kanim at an event. He ends all his events with hugs all around the room. (Staff photo)

Making honor work through music Foundation seeks business bookings to bring sense of community to the workplace By Sherri Huleatt

wil Kanim has been honored with many titles, among them a virtuoso violinist, and a passionate storyteller. His performances have ranged from elementary school groups to events around the world. He’s had a role in a network TV show (“Northern Exposure”), starred in a movie (“The Business of Fancydancing”), played violin and spoken at the American Indian Film Awards in San Francisco, and performed by invitation 78 | BUSINESSPULSE.COM

for the Dali Lama. Without an artistic outlet to channel his emotions, he said he never would have been able to overcome the suffering of his early childhood and help others avoid or heal from similar circumstances. He has transformed his experiences into a non-profit foundation, HonorWorks, designed to “inspire self-expression for the honor of all.” HonorWorks relies solely on private donations, and recently undertook a path of booking appearances at corporate and other private-business sponsored gatherings. The foundation’s staff of five and board of directors is steeped in for-profit business experience—professionals, according to

HonorWorks.net, “…who believe that healthy intergenerational and intercultural societies are possible if people learn to express themselves honorably.” “The business community is vital to our well-being,” Swil Kanim said during a recent public appearance at the Beach Store Cafe on Lummi Island. “As a nonprofit, we need to be mindful of that, and grateful for the support.” His story-telling, interwoven through his violin music, draws from his at-risk childhood. As a foster child growing up in Bellingham during the ‘60s, his fourth grade teacher at Silver Beach Elementary School in Bellingham handed him a violin

and he learned to tap into his artistic gifts. “From the first moment I played the violin it was a big part of my identity,” he said. “I played with so much passion right from the get-go.” After several years as a street performer in Seattle, he began sharing his own compositions. “That’s when the honor of performing made sense to me,” he said. As a Lummi raised in a nonnative home, he found his identity through composing and playing his own music. “My music is the product of a well-supported public music system. Without this system I wouldn’t have been able to process the traumas of being a foster kid. Music was a bridge that brought me home.” Music also has been the bridge that’s taken Swil Kanim around the world – Japan, Korea, the Smithsonian Museum in Washington D.C., and almost every state in the U.S. In 2008, he was invited to perform for the Dalai Lama in Seattle in front of 16,000 people. He does several hundred performances every year. Swil Kanim hopes to inspire audiences through his foundation. He founded the Swil Kanim Foundation in 2009, then changed

What’s in a name…. Swil Kanim explains that though his native name has two words, it is one name – never using one word without the other. He is a member of the Lummi Nation, and the name translates to “works for the spirit of the people“ in Lummi. On Facebook, and to friends and acquaintances, he is Swil Kanim Richard Marshall, husband to Lori and father of two. He tells of a great-great-grand uncle giving him his non-native name after a military general. Swil Kanim served in the U.S. Army as a drill instructor and a chaplain’s assistant. Otherwise, his life has revolved around the arts.

its name to HonorWorks in 2011. “We changed the name to something more inclusive…,” said Hannah Martine, the non-profit’s director of marketing. “We wanted Honorworks to represent a larger vision and a larger mission.” As its president Swil Kanim still is the only spokesperson, but Martine said they’re hoping to broaden the number of performers soon. “Our mission is to change the world one person at a time,” Martine said.

“Music was a bridge that brought me home.” Swil Kanim “Honor is a greater, higher calling,” Swil Kanim said. “My ultimate objective as an entertainer is to honor my audience. Honor is a gateway value, an attitude to love, respect, dignity, and fulfillment. Through the gateway of honor we can experience the finest things in life.” In addition to performing at community festivals, school assemblies, mental health facilities, and detention centers, HonorWorks recently began taking a new direction—collaboration with local businesses to support performances at corporate events. “We want to inspire passion in the workplace and create a sense of community, all of which filters down to the youth,” Martine said of this marketing initiative. Swil Kanim has staged workshops for local companies, centering on team building and open communication amongst colleagues. His “Element of Honor” workshop helps create bonds between employees and encourages honor and respect in the workplace. Despite the group’s zeal and Swil Kanim’s full schedule (“I do my best not to say no”), fundraising has been a major issue for HonorWorks. Martine said,

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“Awareness that we are an organization that needs funding has been a challenge for us.”

“Our mission is to change the world one person at a time.” Hannah Martine, Marketing Director

Swil Kanim tunes his violin before a performance for children at the Beach Store Café on Lummi Island. (Staff photo)

The non-profit’s new marketing direction, Swil Kanim said, will emphasize that “we provide a family-friendly service free to the public, a community benefit such as the Whatcom Orchestra and concerts in the park that also deserve the support of businesses.” Swil Kanim and the foundation’s small board of directors meet once a month to map out upcoming performances selectively, ensuring that each performance isn’t just a man playing a violin— it’s an artistic and spiritual expression that inspires the audience. “We want to grow the number of our performers, travel everywhere, and expand outside the local community,” Martine said. Swil Kanim summed up the foundation’s vision: “We are constantly changing, constantly evaluating our effectiveness. We measure our success by the lives that are changed. We love what we do. We believe that people can change and we believe that given the opportunity, people will do their best to improve their own community.”

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We Join the WBA in their Salute to the Whatcom County Top 75 Private Companies Alcoa Intalco Works of Ferndale congratulates those listed on the Top 75 list for their business success. With business success comes community prosperity. We join all of you in our commitment to family wage jobs and community involvement. Along with 640 family wage jobs created at Alcoa Works Ferndale, the operation supports approximately $118 million in personal income in Whatcom County, $5 million in local taxes, $240,000 in annual charitable contributions and thousands of hours volunteered each year by Alcoa employees.

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Guest Column: Crisis Management Gerald Baron | Crisis Communication Consultant Gerald Baron has worked with Fortune 100 companies and government agencies at every level. He writes the blogs CrisisComm for Emergency Management and crisisblogger.com. He owned Baron & Company, a Bellingham marketing and PR agency, and founded PIER System, the world’s leading supplier of crisis communication technology.

Five simple steps to prepare your business for a crisis

early every day we see a new business crisis happening, yet most organizations have not prepared to deal with a major crisis. That’s especially true of on-line or social media crises, the fastest-growing types. A head-in-the-sand approach arises from the misconception that crisis preparation is difficult, expensive, or even impossible. Not so. A few basic actions establish preventive measures, and a plan to help deal with a crisis. Five tips:

1. Imagine your worst case scenarios. Begin with a thorough examination of events that can do you in if they hit the news. Perhaps data loss, maybe a natural disaster (major flood, earthquake), sudden 5 Fiascos Handled Brilliantly by Management 1. Cadbury’s worm-infested candy bars (2003) 2. JetBlue’s week-long operational breakdown (2007) 3. Toyota recall (2010) 4. Red Cross rogue Tweet (2011) 5. Taco Bell’s “seasoned beef” meat-filling lawsuit (2011) [Source article from Business Insider website, May 26, 2011]

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loss of senior leaders, a bad review that goes viral, a product recall, toxic release, or an illegal immigration situation. Prioritize them using a Risk Matrix, evaluating which are the most and least likely and highest and lowest impact. Never fail in imagination. We’ve seen extreme fallout from mega-disasters like the British Petroleum (BP) oil spill and the Fukushima tsunami in part because planners just didn’t think such worstcase events were possible.

Crisis communication extends far beyond dealing with the media. (They) are not nearly as important as your key stakeholders. 2. Take preventive measures. If you know that an ammonia release could be devastating, double-check your precautions and action plan. If you feel vulnerable about customer service, use actual scenarios to focus on significant improvements. The devastation of a product recall could be prevented by doubling down on quality control. And so on. About three-fourths of all business crises are smoldering—smoke appeared well before the fire. Your entire organization can prepare to smell the smoke and report it.

3. Character and actions

matter most. A study out of Oxford University in England clearly demonstrated that the impact on share price of a company during and after a crisis was related directly to the perception of the public about the character of the company’s leaders. Leaders must demonstrate that they care more about how the event is hurting others than how it is hurting them. That’s why Johnson and Johnson’s response to contaminated Tylenol used in an infamous murder case in Chicago during the 1980s gets cited as a gold standard of crisis response. The company responded as if it was their fault. They made a nationwide recall at their own expense, and repackaged the product with additional safety measures—spending millions even though they also were a victim of the crime. And, conversely, it’s why the comments by former CEO of BP, Tony Hayward, about “…wanting my life back….” received strong negative media and public reaction. Effective crisis communication deals mostly with managing the message about the caring actions of company leaders.

4. Know who you need to talk to and how you will reach them. Crisis communication extends far beyond dealing with the media.

The media are not nearly as important as your key stakeholders. Their opinion about you matters most for your future. Large customers, major donors, key employees, labor leaders, elected officials, regulators, community leaders—your future could lie in their hands. The media certainly can affect key stakeholder opinion about you. But, if you connect with those important people and tell them straight up, honestly, openly what is going on and what you are doing, you will earn their trust even if the media’s story comes out negatively. Media is business, centered on attracting wider audiences and readership. Do you really want to trust your future to a media agenda? More than knowing who you must communicate with, you must know how you will interact. Phone? Email? Website? Social media? Snail mail? Meetings? All these can be critically important. Whoever you’re trying to reach, seek and use their preference of communication channels, not yours. If you don’t know how they expect to hear from you in a major crisis, now is a good time to find that out.

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5. Prepare key messages in advance. The story of many crisis management failings is too-little, toolate. Often companies do the right thing, but not rapidly enough. In today’s instant news world, you have to engage and communicate immediately. The only way to do that is to prepare in advance. As you think through scenarios, brainstorm what questions you will face, and what key messages you want communicated. Involving key decision makers, such as legal advisers, in preparing advance messages will result in you moving much quicker, and with assurance and authority. If needed, engage professional assistance.

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Guest Column: Government Regulations Erin Shannon | Director, WPC for Small Business Erin Shannon became director of the Washington Policy Center for Small Business during 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.

Real-world connection between over-regulation and job creation I

n a public appearance this year Nobel Laureate economist Paul Krugman declared he sees “no correlation” between government regulations and job creation. He thinks adding more government rules does not discourage new jobs.

When pressed on the issue and encouraged to ask business owners how government regulations impact them, Krugman became dismissive, saying, “I have talked to them, and that’s not what they say.” Perhaps Krugman should talk to Fred DeLuca, founder and CEO of the Subway sandwich franchise that has created half a million jobs. In a recent interview DeLuca said, “If I started Subway today, Subway would not exist.” He said the environment for entrepreneurs in the U.S. has “continuously gotten worse because there are more and more regulations. It’s tough for people to get into business, especially a small business.” From Wall Street to Main Street, you can find many employers who say government regulations are a serious problem, an obstacle to their company’s growth and success. You also can find ample evidence to support their claims. Last year a report by the Kauffman Foundation, a national non-profit organization that pro84 | BUSINESSPULSE.COM

motes and studies entrepreneurship, revealed survey results of small business owners across the nation who were asked to rank their state’s friendliness to business. The responses of our state’s small business owners pegged Washington as having the 10th least-friendly business regulations nationwide.

“…Taxes and costs of complying with government regulations are factors that contribute to business failure.” Washington State Dept. of Revenue

Similarly, a survey last year by the Chief Executive Group, comprising 650 CEOs, cited Washington’s “regulatory snares” as a factor in our state’s ranking as the 13th-worst state for business. Even government officials acknowledge that today’s layers of complex and confusing regulations hurt businesses and stymie job creation. • A state Department of Revenue study on the business survival rate in Washington found that “…taxes and costs of complying with government regulations are factors that contribute to business failure.” • Former Gov. Christine Gregoire explained a moratorium she set on new agency regulations, saying, “The time and effort small

business owners would put into meeting new requirements would be better spent in improving their bottom line, and adding new employees....We want businesses to create jobs.” • Washington’s state auditor released a report last year on the state’s regulatory climate that repeatedly refers to the enormous impact state regulations have on businesses, especially small businesses. The report referred to government’s duty to ease the burden as much as possible for the benefit of employers, workers, the government, and the general economy. • Earlier this year the Washington Economic Development Commission (WEDC) issued a report declaring, “Regulatory processes impose costs of doing business, and significantly influence investment behavior, location decisions, startup activity, expansions and hiring.” That report concluded, “Washington’s overly burdensome regulatory system must be addressed as a top economic development priority.” Clearly, government regulations impose a significant handicap on employers, large and small. Krugman may have won a Nobel prize for his understanding of economic theories, but the business owners struggling to create jobs understand the real world consequences of government over-regulation.

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Guest Column: Obamacare Don C. Brunell | President, AWB Don Brunell is the president of the Association of Washington Business, the state’s oldest and largest business association with more than 7,800 members representing 700,000 employees as both the state’s chamber of commerce and the manufacturing and technology association. About 90 percent of members employ fewer than 100 people. More than half employ fewer than 10. For more about AWB, visit www.awb.org.

Fallout from the Obamacare train wreck E

ven some of its strongest supporters, such as Sen. Max Baucus in Montana, say that the federal Affordable Care Act, a.k.a., Obamacare, looks and feels onorous as it nears implementation.

According to the non-partisan Congressional Budget Office (CBO), cost estimates for Obamacare’s new entitlements—the Medicaid expansion and exchange subsidies—have doubled since it was signed into law three years ago. The CBO originally estimated the cost at $898 billion from 2010‘19, but included just six years of spending because most of the provisions didn’t take effect until 2014. In the CBO’s latest estimate —the first to encompass 10 full years of spending—the price tag soared to $1.85 trillion. The costs likely will run even higher. Some cost-cutting measures have little likelihood of implementation, such as a 25 percent reduction in reimbursements for physicians who treat Medicare patients. For each of the last 10 years Congress has declined to make those cuts for fear it will drive doctors out of the Medicare program. Similarly, when push comes to shove, Congress probably will approve more than $700 billion in Medicare cuts over the 10 86 | BUSINESSPULSE.COM

years called for in Obamacare. The CBO also has increased its estimate of the number of Americans who will lose their employer-sponsored health coverage, from 4 million a few months ago to 7 million. And employers, the CBO says, will pay $130 billion in penalties across 10 years.

“You need data. Do you have any data? You’ve never given me data. You only give me concepts, frankly.” Seen Max Baucus

As the 2014 deadline looms for implementing the majority of the health-care law, fears of chaos have set in. A recent Kaiser Family Foundation poll found that 42 percent of Americans aren’t even aware the law is still in place, and confusion spreads about its provisions. In that poll 40 percent opposed the law, while 35 percent support it. Enrollment in the health-care law’s 50 state insurance exchanges starts in October for coverage that begins January 1, 2014. But the federal government has yet to establish health exchanges in the states that declined to set up their own, and administration officials sound vague about how to proceed.

At a recent Congressional hearing, Baucus grilled Health and Human Services Secretary Kathleen Sebelius on how the administration is tracking awareness of the law. “You need data,” he said. “Do you have any data? You’ve never given me data. You only give me concepts, frankly.” Senate Majority Leader Harry Reid (D-Nev) agrees with Baucus if the act is not implemented properly. Sen. Reid’s answer is for Congress to appropriate more money so the administration can properly explain and implement Obamacare. But the law has been in place for three years; will more money at this point help, with implementation just a few months away? Perhaps the problem isn’t that the administration has done a bad job of explaining Obamacare. Perhaps it’s just a bad law. Our nation is drowning under almost $17 trillion in debt, a burden that increases daily at a rate of $3.82 billion. If the debt were called tomorrow, each of us would owe about $53,400. We cannot afford this massive new entitlement plagued by runaway costs, destructive disruptions, and widespread confusion. Obamacare is a train wreck about to happen. What can be done about it? Repeal it.

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Guest Column: Lean Practices Randall Benson | The Lean Heretic 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.

Avoiding backward Lean

mplement popular Lean practices now and get immediate results without major costs and fuss. In any non-manufacturing setting—services, high-tech, health care, government, or non-profit—you can go from zero to Lean in 30 days, easily.

Just start with flow. Before attacking waste. In traditional approaches to lean practices, that has a heretical ring to it. The flow-before-waste idea runs backwards from the norm. But most of us live in a world that is far different from the factory floor at Toyota in Japan where Lean began during the 1960s. Most of us have intangible work, virtual work processes, dispersed and time-shifted staff, personalized work areas, the Internet, and so on. We don’t need to move big machines, remove piles and piles of parts, or take down visual barriers so we can get to flow. Non-manufacturing folks have just 5 MISCONCEPTIONS ABOUT LEAN 1. Lean is defined as eliminating waste. 2. We must eliminate waste before we create Lean flow. 3. We must reorganize the workplace to create Lean flow. 4. We must co-locate in order to do Lean. 5. Only wall-to-wall Lean drives results to the bottom line. 88 | BUSINESSPULSE.COM

three things to do to get started: 1. Visually represent our work flow. 2. Set limits on the size of work-inprocess queues. 3. Manage the flow, on a daily basis, with a few simple Lean principles.

A case study of backward Lean: After a year, $1.5 million spent, 100 staff involved, and hundreds of implementations, nothing had become fully Lean. Most non-manufacturing organizations can meet these requirements in 30 days or less without breaking a sweat. We have new tools that didn’t exist when Lean was invented more than half a century ago. For example, you can visually represent your work flow on an electronic kanban board. It’s accessible from the Internet and lets an entire staff see and manage any kind of work. Getting to flow is fast and easy if you don’t let yourself get sidetracked with traditional activities like waste reduction, workplace reorganization, or staff co-location. Once flow is established, it’s much easier and quicker to attack waste. Unlike the old shotgun approaches, you simply ask what is obstructing or disrupting our flow? The answer will be an instance of waste. Once you have targeted the right wastes, it’s easy

to remove them, thereby streamlining your process flow. Flow is the best tool for targeting waste, so it just makes sense to start with flow. Consider the story of a fivehospital corporation I worked with: In its second year of Lean implementation they had spent more than $1.5 million on consultants, enlisted over 100 people internally, and overseen hundreds of implementation steps. Yet, they faced at least another year of implementation before declaring that even one department was fully operational with Lean principles. This is a quintessential example of working Lean backwards—starting first with elimination of waste. Contrast that with a government health department client that we started with flow to implement Lean management, with quantifiable, measured results: • Reduced through-put time by over 50 percent; • Doubled productivity; • Dramatically increased user satisfaction; • Nearly eliminated their manymonths’ backlog of unprocessed citizen requests. They did this all within a few short months using the flowbefore-waste approach. Today, they continue to tighten their flow by targeting additional waste. Lean is about creating a continuous, uninterrupted flow of value to the end user by involving everyone in the elimination of waste in every form.

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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 continues to receive national attention. Myers holds a Master’s degree from the University of Washington.

Three principles for an effective, new environmentalism

he simple story of environmental policy in Washington state is this: Politicians make loud promises, but individuals and businesses in the free market actually deliver.

In 2010, Bloomberg New Energy Finance released a report examining the best ways to reduce carbon emissions called “A fresh look at the costs of reducing US carbon emissions.” It noted that most of the reduction in carbon emissions “…is likely to happen anyway, without the need for additional policy intervention….” Although politicians like former Seattle Mayor Greg Nickels complained that the federal government wasn’t doing enough to reduce carbon emissions, the nation did better than Washington state since 2002. According to the Energy Information Administration, since 2002, Washington state’s per capita carbon emissions fell 6.1 percent, compared to the national average of 9.8 percent. This despite claims from politicians about the progress our state was making against carbon emissions. Those claims, however, came across as little more than political grandstanding. In 2005, Mayor Nickels launched the U.S. Conference of Mayors Climate Protection Agreement. Cities signing the agree90 | BUSINESSPULSE.COM

ment pledged to meet the Kyoto Protocol targets of reducing carbon emissions seven percent below 1990 levels within seven years. Washington boasted 33 cities

“Politicians love to portray green power as a great job-creation program, although even President Obama implicitly acknowledged (in a June speech) that the naturalgas boom has done far more for the U.S. economy—and greenhousegas emissions—than any renewable boondoggle ever has. But the truth is that if carbon-reduction programs paid for themselves, businesses would probably seek out the efficiencies anyway.” Wall Street Journal website, June 30, 2013

that signed the agreement. By the end of 2012, however, 22 of the 33 cities literally had done nothing beyond signing the paper. The purpose of the agreement was not to help the environment, but to look good.

While politicians made empty promises, individuals and companies found ways to cut their own emissions, without political guidance. In the private sector, using more energy makes a company less competitive. In the political sector, on the other hand, failure can be blamed on others, explained away, or ignored. I recently met with a company offering a new technology in personal lighting for construction workers at night. Using a rechargeable battery, the innovation offers more light than either the typical miner’s helmet or diesel-powered area lights. The product reduced carbon emissions dramatically. Providing 20 of the lights to workers emitted only 5 percent of the carbon emissions from just one diesel generator on a work site. The company, however, never conceived its product as environmentally friendly. The push to reduce use of resources—inherent in the free market—made it a tremendously eco-friendly alternative. Environmentalists have raised awareness of the value of good stewardship, but many of the solutions they offer have not progressed much since the 1970s. A new approach is needed, with three easy guiding values:

1. Small, personalized efforts are far more effective than the few, large projects politicians favor.

The best way to reduce carbon emissions is different for each of us, yet government projects see us as “one size fits all.” Politicians promote transit or give tax breaks for electric cars that only millionaires can afford. These are extremely expensive measures and, often, ineffective. The Cash for Clunkers program, for example, is now recognized to have increased carbon emissions because old cars were simply destroyed, rather than recycled, and fuel economy gains were small. Individuals, however, can choose what form of fuel efficiency suits them best. Some will drive less, others will buy a hybrid vehicle, while others will telecommute. Each of us knows what works for us and has the incentive to find it.

2. When government does spend on large projects, it must learn to prioritize based on environmental effectiveness.

Government rarely chooses environmental projects for their environmental benefit. Instead officials chose for trendiness. The most trendy ideas, however, are often the worst. Rooftop solar energy is perhaps the worst way to reduce carbon emissions, yet Washington spends millions promoting it because it feels good. A number of groups, from the Bloomberg New Energy Finance to McKinsey, have analyzed the approaches that yield the greatest carbon reductions per dollar. After years of failure, a new bipartisan bill supported by Gov. Jay Inslee and both Senators Ericksen and Ranker will do exactly that for Washington state.

3. Technology that allows us to do more with less is the backbone of environmental stewardship. The alternative—modifying people’s behavior against their will—has failed.

Many efforts have attempted to get us to change our lives in a way that politicians and activists would prefer. We, however, prefer to make our own choices. Conversely, technology has driven a massive improvement in the use of sustainable resources. People live richer lives, in larger houses, and drive more than they did 30 years ago. Despite that, air is cleaner, forest land is expanding, and we are more energy-efficient. As people exercised more freedom, negative environmental impact declined, thanks to technology. We need politicians and activists to stop nagging us to live according to their rules and focus on what works. The real path to environmental stewardship makes use of the free market, to provide personalized solutions, to prioritize what works best, and to develop the technology to do more with less.

SKI TO SEA 2013

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ASK THE EXPERTS: LIFE IN THE TECH LANE

3-D Printing: What is it? What’s its impact on the future of business? 3-D printing product sample. (istockphoto)

By the Tech Help staff at Big Fresh Media

-D printing has finally made the jump to the mainstream consumer market. The technical name for it is additive manufacturing technology. From clothing to prosthetic limbs, and the prospect of 3-D-printed homes, the possibilities of its use seem endless.

The printing happens in several stages with a 3-D printer. • The first stage lays out an idea with digital modeling. 92 | BUSINESSPULSE.COM

• The modeling then evolves in a computer-aided design (CAD) or animation-modeling software, where you’re enabled to create a model of the object you want to print. • The final stage, without getting over-technical, is when the printer molds that model (layerby-layer) into the object/shape that you see on your computer. In the simplest terms, if you can design a shape or model on your computer, you can print it with a 3-D printer. 3-D printing has the potential to change the fundamentals of product design and customer

feedback. For instance, you can print a dozen objects, see if there is a market for them, and if there is, print 50 more after modifying the design based on feedback from early users. This ability to adapt to customer and market demands predictably will provide a huge boon to investors and start-ups. Trying out new products and prototypes will become less of a risk and less expensive. Without a doubt 3-D printing has the potential to transform several industries dramatically. Just recently in the healthcare field,

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Tech Help Favorites: Apps techies use We asked the staff that brings you Life in the Tech Lane each issue to list the app they use the most on their smart phones. Here’s what we found: 1. Rob’s favorite app on his Samsung Focus (Windows Phone): MLB – Major League Baseball 2. Brooke’s favorite app on her Droid Razr Maxx (Android): Animal Free 3. Mark’s favorite app on his iPhone (iOS): Zite 4. Austin’s favorite app on his iPhone (iOS): Mailbox 5. Greg’s favorite app on his Samsung Galaxy S (Android): Flipboard 6. Josh’s favorite app on his iPhone (iOS): Pulse 7. Mike’s favorite app on his iPhone (iOS): Rise For more information about these apps, please visit their blog http://gotechhelp.com/blog

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medical professionals have used 3-D printing to create hearing aids, custom leg braces, and even a titanium jaw.

3-D printing has the potential to transform several industries dramatically…. Medical professionals have created hearing aids, custom leg braces, and even a titanium jaw. NASA plans to make pizza. In futuristic mode, the National Aeronautics and Space Agency (NASA) has tested 3-D printers that will let Mars-bound astronauts print various needs as they travel. A recent article in Computer World quoted NASA’s chief administrator Charles Bolden

on how vital this technology could become in printing survival components for space travel, like tools and food. A NASA blog post spoke of the agency developing a 3-D pizza printer. Could 3-D printing even make mass manufacturing obsolete? Certainly, this additive technology, more and more affordable, is changing our world. And, soon, other worlds, too? Made in Space, a company within NASA’s Ames Research Park (Moffett Federal Airfield) on southwestern shores of San Francisco Bay, blogged that its contract with NASA calls for having 3-D printing on the International Space Station next year to make parts for it. Experts at Tech Help in Bellingham, a division of Big Fresh in Bellingham, provide answers to the questions that are trending among clients. If you have a tech question for our experts, send an email to getanswers@gotechhelp.com

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Entrepreneurial Trail: Joel Townsan

Flipout Screwdrivers gains momentum Cool Idea! Award, USA Today, Kickstarter campaign spark interest

Staff photo

By Business Pulse Staff

ast year we introduced you to Joel Townsan, a young man in Bellingham who patented an original cordless, electronic screwdriver, The Flipout, with a rotating head that reaches into small, tight spaces. We continue to follow his entrepreneurial path. Recently we caught up with him and learned that many good things have happened this year.

Townsan and his company, Flipout Screwdrivers, won a national Cool Idea! Award from 96 | BUSINESSPULSE.COM

Minnesota-based Proto Labs. Proto Labs, a custom manufacturer of prototypes and low-volume parts, provides short-run production services to help new entrepreneurs bring their new product to the marketplace. Flipout Screwdrivers used the award to produce tooling and an initial product run of the injection-molded parts required for a Kickstarter funding campaign that Flipout launched at the start of summer. “Initial results were strong,” Townsan said, “but the USA Today buzz faded, and we need to do some more strong marketing.” Product awareness spiked for the company when USA Today included Flipout Screwdrivers in its

Father’s Day feature on the “10 hot tech gifts for every kind of dad.” Townsan also has made some personal demo appearances locally —the 2013 Ski to Sea, and the Tool Fair at Hardware Sales the day before Father’s Day. “It’s definitely our target audience, and we love Hardware Sales,” Townsan said. “I had my iPad set up so people could pre-order the product on the spot.” He said he sold some at each event. Full-scale production is his next goal when has funding. Meanwhile, he continues to support the business through his job as a server in a restaurant at Silver Reef Hotel Casino Spa in Ferndale.

SCENE ON THE STREET BERRY SCARY With berry seasons in full swing throughout Whatcom County, this seemingly cheery fella was seen in a field between two farms on Imhoff Road outside of Ferndale, just north of Slater Road. During 2012, the county’s raspberry crop topped $57.5 million and blueberries reaped more than $44 million, both farmgate evaluations (not counting processing, packing, shipping, and other enterprises tied to the berry industry.) Mr. S. Crow here soon will stand upright in a bright blanket of orange, as his home blooms into a pumpkin patch. In each issue we publish a Scene on the Street image that speaks to commerce in Whatcom County. If you have a suggestion or a photo for consideration, submit it with proposed content to articles@businesspulse.com. Staff Photo

ADVERTISER INDEX Alcoa Intalco . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81 Anderson Paper . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83 Archer Halliday . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65 Bank of the Pacific . . . . . . . . . . . . . . . . . . . . . . . . . . 59 Barkley Company . . . . . . . . . . . . . . . . . . . . . . . . . . 100 Bellingham Athletic Club . . . . . . . . . . . . . . . . . . . . 11 Bellingham Golf & Country Club . . . . . . . . . . . . . 77 Bellingham Traverse . . . . . . . . . . . . . . . . . . . . . . . . 60 Benchmark Document Solutions . . . . . . . . . . . . . 85 Best Western Lakeway Inn . . . . . . . . . . . . . . . . . . . 55 Big Fresh Media . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 Brooks Property & Storage . . . . . . . . . . . . . . . . . . 38 Cedarwind Management . . . . . . . . . . . . . . . . . . . . 38 Chmelik Sitkin & Davis . . . . . . . . . . . . . . . . . . 47, 94 Chocolate Necessities . . . . . . . . . . . . . . . . . . . . . . . 17 City of Sumas . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29 Cowden Gravel & Ready Mix . . . . . . . . . . . . . . . . . 69 Dari Tech . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27 Diane Padys Photography . . . . . . . . . . . . . . . . . . . 14 Exact Scientific . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70 Faber Construction . . . . . . . . . . . . . . . . . . . . . . . . . 87 First Federal Savings . . . . . . . . . . . . . . . . . . . . . . . . 67 Fitness Gear . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 95

Gateway Centre . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74 Great Floors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61 Hardware Sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35 Hilltop Restaurant . . . . . . . . . . . . . . . . . . . . . . . . . . 23 Hotel Bellwether . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 Industrial Credit Union . . . . . . . . . . . . . . . . . . . . . . 75 Innotech . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63 International AutoHaus . . . . . . . . . . . . . . . . . . . . . 51 Island Mariner Cruises . . . . . . . . . . . . . . . . . . . . . . 73 Kena Brashear Real Estate . . . . . . . . . . . . . . . . . . . 43 Larson Gross CPAs & Consultants . . . . . . . . . . . . 33 Laserpoint Awards . . . . . . . . . . . . . . . . . . . . . . . . . . 19 Management Service NW . . . . . . . . . . . . . . . . . . . . 76 Metcalf Hodges . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45 Mills Electric . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53 Montcrieff Construction . . . . . . . . . . . . . . . . . . . . . 93 North Bellingham Golf Course . . . . . . . . . . . . . . . 19 North Cascades Institute . . . . . . . . . . . . . . . . . . . . 28 Northwest Propane . . . . . . . . . . . . . . . . . . . . . . . . . 57 Oltman Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . 48 Peace Health St Joseph Medical Center . . . . . . . 21 Pott’s Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 Print & Copy Factory . . . . . . . . . . . . . . . . . . . . . . . . 22

Roger Jobs Motors . . . . . . . . . . . . . . . . . . . . . . . . . . 43 Saturna Capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 Scholten’s Equiment, Inc. . . . . . . . . . . . . . . . . . . . . 64 Scotty Brown’s . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37 Scrap It/Stow It . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71 Silver Reef Casino . . . . . . . . . . . . . . . . . . . . . . . . . . 98 Skagit State Bank . . . . . . . . . . . . . . . . . . . . . . . . . . . 99 Skagit Valley Casino Resort . . . . . . . . . . . . . . . . . . 39 St Francis Health Care . . . . . . . . . . . . . . . . . . . . . . 65 St Paul’s Academy . . . . . . . . . . . . . . . . . . . . . . . . . . 63 TAG . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70 TD Curran . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 Transgroup Worldwide . . . . . . . . . . . . . . . . . . . . . . 35 United Way . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79 US Bank . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 91 VSH Certified Public Accountants . . . . . . . . . . . . 37 WECU . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89 WWU . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75 Whidbey Island Bank . . . . . . . . . . . . . . . . . . . . . . . . . 3 Whirlwind Services . . . . . . . . . . . . . . . . . . . . . . . . . 29 The Willows Inn . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31

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