NorthWest Business expo + conference, october 23
The Woods Coffee From HS project to a leading Whatcom brand
MAGAZINE Fall 2014
Ken Bell, CEO Best Recycling
Extraordinaire Building business by taking on projects that others canâ€™t (or wonâ€™t)
WBA creates unique alternative Marijuana gold mine A billion-dollar baby How to nip shoplifting: Cameras and teamwork The Publication of The Whatcom Business Alliance
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Table of Contents
$1K-A-DAY GOOD SHIP LOLLYGAG
Why is this ship worth $1,000 a day, paid to the Port of Bellingham by Horizon Lines of Charlotte, N.C., to sit constantly in what is called lay berth, i.e., not in use? Find out on p. 35. And, on p. 34 read what inspires a Whatcom County Planning Commissioner to effect change when he looks out of his office window across the Port’s backdrop that includes The Fairbanks, the old Georgia Pacific building on waterfront development property, and waterways that could spur commerce through shipping lanes.
Horizon Ship The Fairbanks (Photo by Mike McKenzie)
Environmentally-driven capitalism at work in faraway places THE DEAL’S ADDICTIVE at BEST
UNSOILING THE SOIL BY INFRARED BURN
A Bellingham firm seeks out the strangest places to recycle. Jobs that “nobody else wants,” the owner asserts. Yukon, anyone? South Pole? Sign up here. Divesting of other locations to corner this narrow niche market, Ken Bell pursues a clean Mother Earth and a bustling Port of Bellingham, along with passions for faith and family, collegial management, mentoring young men, and baseball.
Go to the coldest place on earth, the highest (in average elevation), the driest (it’s a desert, actually), and the windiest – a place substantially larger than the U.S., and a place where you’ll experience no sunlight seven months out of the year. Go, and clean it up. That’s what Best Recycling of Bellingham does every year in Antarctica, in cahoots with the National Science Foundation.
While the activity looks covert (hence the name Black Ops), the results seem overt from using unique infrared technology at oil-drilling (and other) sites. Best Recycling developed the patented methodologies and spun off another company that, among other things, could help fracking in the dig for energy atone for its perceived environmental sins.
WILD, WILD WEST, WHERE THE GRASS GROWS GREENER
The new kid on the retail block is not a tyke, but a toke – and it’s got the government gaga about millions puffed into the Whatcom and State economies, at a 25% tax rate. (The first known state tax check was $80k for just 16 business days of sales.) The whole legal marijuana thing is – sure, we’ll say it – euphoric.
THUMBS DOWN ON GOVERNOR’S 'CAP' POLICY, LICENSING
We never lack provocative thought from the wonks at Washington Policy Center: Check out why Todd Myers is hopping mad at Gov. Inslee’s counterproductive cap on climate change (p. 94). Also, our workforce stands center stage in guest columns: Why licensing
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idles Washington workers (p. 96)…Rising labor costs and diminishing labor pool stifle Whatcom economy (p. 104)… SEPA review process smothering jobs (p. 108)… And, how to grow loyalty by making things easy for customers (p. 100), how to refresh the workforce by refreshing yourself (p. 102), and what you can’t ask while hiring (p. 98).
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Table of Contents
INVENTING A WHEEL OF entrepreneurship
BCS SAVES MILLIONS IN HEALTHCARE
THE WBA ROLLS OUT ACA SOLUTIONS
With bold, innovative strokes eight years ago Bellingham Cold Storage created an unheard-of, selfinsured healthcare plan to address that extreme cost of doing business. Later, the company opened miCare clinic with its own doctor, nurse practitioner, and assistants. The results: $5 million in savings over traditional premiums, at a cost of less than $80 a month to 225 employees – and immediate, topquality medical attention.
The Whatcom Business Alliance surveyed its membership on issues of most concern to business and commerce. Clearly at the top of the list: financial impact of the new Affordable Care Act mandates. The WBA responded, and on Oct. 23 at its annual NW Business Expo & Conference the Alliance will roll out options that its insurance consultant deemed “unlike anything out there…a new child, ahead of the curve.”
A HOST WITH A ROAST
Unconventionally, unscientifically, but certainly not unintentionally. That, in a beanshell, sums up the growth pattern of one of the region’s fastest-developing companies, The Woods Coffee, with its roasterie, bakery, and bevy of baristas. Enjoy a conversation with the patriarch, Wes Herman. Managing Editor: Mike McKenzie Graphic Designer/Layout Adam Wilbert
For editorial comments and suggestions, please write firstname.lastname@example.org 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 © 2014 – Business Pulse Magazine. All rights reserved. POSTMASTER: Send address changes to Business Pulse Magazine, 2423 E Bakerview Rd., Bellingham, WA 98226. 6 | BUSINESSPULSE.COM
Feature Writers Pamela Bauthues Susan G. Cole Kimberly Harris Sherri Huleatt Cheryl Stritzel McCarthy Guest Column Contributors Randall Benson Janelle Bruland Keep Washington Competitive Kimberly Harris SBDC/Kevin Hoult John Huntley
Rebranded as Invent, an incubation lab for inventors and startup business aspirants (formerly called Big Idea Lab), offers expanded space and equipment in downtown Bellingham. One of Invent’s primary fertile grounds for entrepreneurial spirit is Pitch Fest, which produces the likes of a revolutionary, real-time monitor of mine drilling – Drillers Dashbord (P 57). Another coming up: Startup Challenge (P. 56)
Eyes in the sky catch shoplifters
Psst! Hey, shoplifter – smile. You’re on candid camera. Hardware Sales and other retailers battle organized retail crime (ORC) by sharing pictures and names of crafty, slippery thieves. “It’s shoplifter’s job…and they’re good at it,” says one guardian of the gates. CORRECTION of OMISSION Inadvertently, Business Pulse left out Chrysalis Inn & Spa/Keenan’s at the Pier from the 2014 Top 100 Private Companies of Whatcom County listing (Summer, July 2014). The Chrysalis confirmed their information, and should have been listed No. 83, reporting sales in the $5 million-to-$8 million range for 2013. A Bellingham company founded in 2001, it employs 125, all locally. The top executives are owner Mike Keenan, and general manager Amy Fletcher. We are sorry, and regret our oversight.
Tony Larson Todd Myers Brad Owens Erin Shannon Tech Help / Big Fresh SHRM/Rose Vogel Cover Photo: Mike McKenzie Photography: Travis Arket Sherri Huleatt Mike McKenzie Cheryl Stritzel McCarthy Jessica Stuart Courtesy Photos: AeroCapture Images / Lyle Jansma
Best Recycling Bellingham / Whatcom County Tourism Dawn Matthes Photography Peter James Studios Junior Achievement Invent Coworking Lab Port of Bellingham The Woods Coffee Ad Sales: Micaela Mae Subscriptions: Janel Ernster Administration: Danielle Larson
Your Resource to International Trade Finance
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Troy Muljat Owner, NVNTD Inc. Managing Broker Muljat Group
Jane Carten President / Director Saturna Capital Corp.
Board Chair Jeff Kochman President / CEO Barkley Company
Doug Thomas President / CEO Bellingham Cold Storage
Marv Tjoelker Partner / Chairman of the Board Larson Gross PLLC
Dave Adams, President Emergency Reporting
Randi Axelsson, Sales Manager Silver Reef Hotel Casino Spa
Pam Brady Director, NW Govt. & Public Affairs BP Cherry Point
Janelle Bruland President / CEO Management Services NW
Bruce Clawson Senior VP Commercial Banking Wells Fargo
Scott Corzine Major Accounts Executive Puget Sound Energy
Kevin DeVries CEO Exxel Pacific Inc.
Greg Ebe President / CEO Ebe Farms
Andy Enfield Vice President Enfield Farms
John Huntley President / CEO Mills Electric Inc.
Sandy Keathley Previous Owner K & K Industries
Paul Kenner Executive VP SSK Insurance
Bob Pritchett President & CEO Faithlife Not Pictured: Guy Jansen, Director Lynden Transport Inc. 8 | BUSINESSPULSE.COM
Brad Rader Vice President/General Manager Rader Farms
Becky Raney Owner/COO Print & Copy Factory
Jon Sitkin Partner Chmelik Sitkin & Davis P.S.
WBA, 2423 E. Bakerview Rd, Bellingham, WA 98226 â€˘ 360.671.3933
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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.
Where will you be Oct. 23? WBA launches unique Healthcare Insurance Solution, and more
hursday, Oct. 23 is a big day for the Whatcom County business community. You asked for help, and the WBA has responded….
At the NW Business Expo & Conference that day, the WBA will launch an innovative, proven, costsaving healthcare insurance product
that we’ve been working on for our members for the last 10 months. It comes as a result of feedback we received from membership at our past two Affordable Care Act Symposiums, where we were strongly urged to get involved with a solution. The problems are clear. In a WBA survey of 2,000 local employers last April, the rising costs of healthcare insurance and
WBA president Tony Larson facilitates a meeting with several local businesses and the Hecht Group, regarding the details of the NEW WBA healthcare insurance program for employers. (Staff Photo)
10 | BUSINESSPULSE.COM
Affordable Care Act requirements to employers stood out as the most pressing problem that businesses face. According to the survey, with significant premium increases and new mandates beginning in 2015, some employers are forced into a combination of strategies that include reducing coverage, increasing deductibles, cutting hours, and for some even hiring freezes. Companies commonly change insurance carriers every year or two to chase the best bargain, which requires wholesale changes in coverage and new medical cards for employees. The WBA board of directors took to heart this trend and the membership’s request for options. Working conjointly with 20 local employers of various sizes ranging from 25-300 or more employees and with consultants who crafted the health insurance plan that has saved Bellingham Cold Storage millions over the last 8 years (featured in this issue), the WBA created a one-of-a-kind solution for WBA members. During the first year, the plans will focus on companies with 50 or more employees who work a minimum of 17.5 hours a week and
a minimum of 35 insured. We expect eventually to include smaller employers. For larger employers, customized options exist, as well. The feedback has been extraordinary. By launch date on October 23, we will have trained a group of local certified insurance agencies to assist our members with the implementation of the program, which will become effective Jan. 1, 2015. If your company meets the criteria, I strongly urge you to attend our kickoff event at 2 p.m., on Thursday, Oct. 23. The CEO of Bellingham Cold Storage, Doug Thomas, along with the president of the group that created the plan and the third party administrators will take part in this landmark presentation. I am eager to see you there.
••• That’s not the only reason to come to the NW Business Expo. We’re presenting a very revealing stakeholders’ study, we have a dynamic and provocative speaker, plus many vendors, and you have an opportunity to mingle and enjoy good eats and drinks at the Presidents Club reception:
11:30 A.M. Hear results of the Economic Impact Study on Cherry Point that the WBA commissioned with the University of Washington and Western Washington University at this ticketed luncheon presentation in the Theater at Silver Reef.
2 p.m. Rollout presentation of the WBA healthcare insurance plan takes place with several certified agencies available to answer questions.
4 p.m. You’ll love the keynote address by WBA Board member Bob Pritchett, CEO of Faithlife Corp., formerly Logos Bible Software,
the fastest-growing company in Whatcom County. His topic covers a four-word employee guide among many unusual management methods: “No Rules: Life without a Detailed Employee Handbook,”
5 p.m. WBA Presidents Club hosts a reception, featuring several local breweries, wineries, great food, and lots of networking opportunities
with our board and other local business leaders. Enjoy this dynamic edition of the magazine, ranging from legal marijuana to innovative entrepreneurial spirit with Best Recycling, The Woods Coffee, Invent Coworking/ Pitch Fest, and more. And we look forward to seeing you on Oct. 23. Tony Larson
WHATCOMBUSINESSALLIANCE.COM | 11
buisness profile: bcs micare clinic
Bellingham Cold Storage CEO saves millions in rising healthcare insurance costs Innovative insurance plan and private
medical clinic serve 225 employees By Cheryl Stritzel McCarthy
12 | BUSINESSPULSE.COM
lash health care costs, while improving employee health care.
Sound good? Doug Thomas, president and CEO of Bellingham Cold Storage (BCS), thought so. The 68-year-old cold-storage company, which serves global food customers with its 1 million-plus square feet of warehousing on two local sites, switched from traditional health insurance to selfinsurance eight years ago. Then, in May 2012, BCS launched its own clinic, further improving health care for employees while continually lowering costs. BCS saved more than $5 million from 2006-2013, and hundreds of thousands more this year so far, according to both Tricia Hecht-Glad with the Hecht Group and Sheryl Hershey, who collaborated to design the plan when Hershey was director of human resources at BCS. She said that’s subtracting what BCS paid for self-insured employee health care from what it would have paid under a traditional employee health care model provided by the Teamsters union. Their clinic, called miCare, plays a pivotal role in that savings. “Employees love it. From managers and owners to front-line employees, we all use the clinic,” Thomas said. “It’s not uncommon for BCS to try something brand new. No one else in our industry has it.” MiCare, which offers family practice and general medicine, is free to employees and families. A miCare doctor’s office visit costs BCS an average of $130. An average of traditional doctor’s office visits costs an employer $360, Thomas said. In addition, before miCare, some employees wouldn’t bother to see a doctor for a minor matter until it ballooned into a problem that drove them to the emergency room at $1,000 a visit – inconvenient and painful for employee, and expensive for employer.
“Employees love it. From managers and owners to front-line employees, we all use the clinic.” – Doug Thomas, President and CEO, Bellingham Cold Storage Doug Thomas, President/CEO, Bellingham Cold Storage (Photo by Cheryl Strizel-McCarthy) WHATCOMBUSINESSALLIANCE.COM | 13
buisness profile: bcs micare clinic HOW IT WORKS Under traditional insurance, the employer pays a premium to the insurance company, which keeps the full amount whether employees use it or not. Under self-insurance, the company keeps whatever isn’t used. BCS handles self-insurance by setting aside enough premiums in an interest-bearing escrow account to cover three months’ worth of employee health care. BCS receives a cumulative bill from a third-party administrator in Billings, Mont., for the care, equipment, and consumables that BCS employees use. (BCS knows what it’s paying for, but which employee or family member used which products and services remains confidential between the patient and the third-party administrator.) BCS pays the claim, but money not used stays in the account, which builds up. As BCS builds more than three months’ reserve, they can reduce their own set-aside premiums. “We’re down to $1,000 a month per employee (going into the setaside account), and we have received exceptional care for the money,” Thomas said. “Our claims, or set-
aside, has reduced by $300 a month per employee over the last three or four years. Under the traditional plan, we were paying quite a bit more, and didn’t have the same standard of care.” To participate, BCS employees pay $71.50 a month to participate in the plan that covers their entire
BCS recouped initial costs in the first year, “…Just in savings we realized from our people using miCare rather than the ER or other clinics.” – Sheryl Hershey, BCS human resources
family. It’s optional, but Hershey pointed out that employees haven’t found anything close to their pay-in with comparable care. “There are a lot of self-insured companies, usually with stop-loss riders,” Hershey said. “You won’t find anything else like ours for family healthcare coverage.”
Sheryl Hershey (center), when she was full-time HR manager at BCS, facilitated the creation of the miCare Clinic with the Hecht Group, working with Tricia Hecht-Glad (left) and her father, founder Dan Hecht. (Staff Photo)
The Clinic MiCare is located less than a block from a BCS facility on West Orchard Drive, and 1.8 miles from BCS’s main Squalicum waterfront facility. A nurse practitioner, three medical assistants, and one doctor staff the clinic during specified, half-day hours three days a week, all part-time, all paid by the hour. The new store-front clinic comprises two exam rooms, a lab, an office for the doctor, a supply room, a reception area, and a pharmacy cabinet that supplies most common prescriptions (no narcotics). At miCare, the doctor can fill a prescription on-site, immediately, without sending the employee to a pharmacy. “We carry 100 prescriptions, all of them free to employees and families,” Hershey said. BCS purchases those prescriptions at the very lowest cost. “It’s all primary care. Physicals, family well-care, minor procedures like stitches, gynecological check-ups, sports physicals.” She said that the company’s primary-care physician sees employees for conditions such as high blood pressure, high cholesterol, or weight issues. “If your wrist is bothering you, or you have a growth on your back that needs removing – anything you’d go to a family doctor for – miCare provides,” Hershey said. “This is the family doctor for our employees and families. If more is needed, employees still have their full insurance, so they can go to specialists.”
THE CATALYST Before the miCare clinic came about, the diversity of BCS employees made it difficult for many among them to get a doctor when they needed it. “We have a large contingent of employees who speak Spanish as a first language,” Hershey explained. “It was hard to find a primary-care doctor who speaks Spanish. They’d wait until it became an emergency, then go to 14 | BUSINESSPULSE.COM
the emergency room.” As BCS’s insurance consultant, the Hecht Group, founded 46 years ago in Portland by Dan Hecht and his father, Ben, recommended miCare. The clinic enabled the company to hire medical providers who speak English, Spanish, Punjabi, and Mandarin Chinese. “We cover all the hard costs: lease, utilities, medicines, lab fees,” Hershey said. “We pay directly for equipment. There’s no mark-up on any procedures there. We get medical care for employees and families at wholesale rather than retail.” Dr. Frank James, a family physician and public-health doctor in Bellingham since 1989 and faculty member at the University of Washington School of Public Health, serves the miCare clinic. He also works in service projects in India, Nepal, Taiwan, and East Timor. Heather Whitaker, the nurse practitioner at miCare, and three medical assistants are local hires like Dr. James. Among them, they speak the four languages BCS employees needed. MiCare allows providers to bypass bureaucracy and spend more time with the patient, CEO Thomas said. The local staff is familiar with Whatcom County’s medical community, helpful when referrals are necessary. “A big reason for our success,” Thomas said, “is our outstanding doctor and medical team.”
THE EXPERIENCE Employees schedule appointments on line, and include comments. If the comment contains information such as the patient isn’t seeing well, the medical provider will phone the employee and immediately schedule a 60-minute appointment, as a vision problem could signal diabetes. The typical appointment runs 20 minutes. “When you show up at miCare, you get right in,” Thomas said. “You can get there in five
Long-time employee Gary White, who oversees the engineering department of BCS, gets a blood pressure reading during a routine exam by nurse practitioner Heather Whitaker. She contracts for three partial days a week of providing services at miCare. (Photo by Mike McKenzie)
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buisness profile: bcs micare clinic minutes and get taken care of right away.” He called it “inconceivable” that an employee can leave work, see the doctor for 20 minutes, and get back to work within half an hour of leaving. Hershey said, “Employees like the fact they get 20 minutes with the doctor here. The national average is six minutes. And that’s after waiting in the waiting room! At miCare, it’s one person at a time, with no waiting. Also, our providers know the employees and their families. The doctor wants to know how your kids are doing. Our doctor even calls them at home, to follow up.”
INCREASING LOYALTY For a common prescription, BCS is more likely to pay $10 rather than the marked-up $250 that the traditional system charges for the same prescription. That’s good, but not the main driver, Thomas said. “I know costs are under control, but our primary objective,” he said, “is the sticky factor with our employees, that they’re happy at work, that their family is healthy and happy, that they stay with the company.” Employees have stayed with BCS an average of 17.5 years, Thomas said, with many staying as long as 30 or 40 years. “We’ve always had an eye toward creating a culture
where employees feel appreciated, where there’s mutual loyalty. With customers and employees, I try to increase that sticky factor; we have an affinity for each other. “We try to make the employee successful. That translates into understanding it’s important for the company to be successful, as well.” When the miCare clinic opened, management found it important to assure employees that the clinic was
“Under the traditional plan, we were paying quite a bit more and didn’t have the same standard of care.” – Doug Thomas, president and CEO, Bellingham Cold Storage
a big benefit and that the company would have no knowledge or access to their personal medical information. “Employees were waiting to see how it would play out,” Thomas said. “A few employees went to the clinic, then came back and told others it was good, a nice facility. Word spread. The use factor went from modest to robust. Now we’re ramping up miCare office hours.” The miCare clinic is shared
BcS Employee attests to benefits Gary White, a 27-year employee of Bellingham Cold Storage, attested to the extraordinary benefits of the company’s healthcare insurance plan and miCare clinic. He was diagnosed this year with an ulcer condition. “I was out of work 2 ½ months,” he said. He described his treatments of a series of tests, a batch of prescriptions, and simplicity in using the system. “The doctor and nurse are very personable,” White said. “They’re down-to-earth and straightforward. They showed concern and would even find me at home if they needed to. You simply go on line for an appointment, and don’t have to wait a month like at a normal doctor’s office. And, all the prescriptions are right there (in stock). Their whole attitude makes it really easy. My wife absolutely loves it, too. “BCS and miCare were always there for us.” 16 | BUSINESSPULSE.COM
among the 180 full-time employees of BCS and about the same number at Trans-Ocean Products, a Bellingham company that is the country’s leading surimi seafood processor and also located on West Orchard Drive. “We selected them to partner with because they’re about the same size,” Thomas said. “They’re a customer, with similar core values. We’ve got a great relationship with them.” BCS and Trans-Ocean Products split the $65,000 set-up cost of the miCare clinic. That purchased capital improvements such as equipment, exam tables, computers, furniture, and exam-room cabinets and sinks. Hershey, who headed BCS human resources at the time, said BCS recouped initial costs in the first year. “(That was) just in savings we realized from our people using miCare rather than the ER or other clinics.” The BCS healthcare insurance program is the basis for a model the Whatcom Business Alliance (WBA) has developed and will launch for the benefit of its members at the Northwest Business Expo on Oct. 23. Doug Thomas sits on the executive committee of the WBA. The third-party administrator, located in Billings, Mont., is an important piece of the miCare clinic, Thomas said. “We (BCS) don’t know our employees’ issues or their family issues. All the company’s doing is paying the bill.” When miCare first opened, the providers immediately treated several previously undiagnosed issues among employees, such as borderline diabetes and heart diseases. “The patients felt so much better. If those issues had continued,” Thomas said, they would’ve become chronic….” – resulting in higher claims, plus lost work and family time. When the company first considered miCare, some on the BCS team pointed out this wasn’t a BCS core competency. “Sheryl Hershey said, ‘Let’s try it, I think
we can do it.’ It took heavy lifting, and she did most of that,” Thomas said. “She made believers out of us.”
EXPANDING THE CONCEPT What would Thomas tell other business managers who are considering this? “First, educate yourself about self-insurance. You have to have it for this (clinic) to work. That’s an initiative in itself. It results in big savings, and you take away a whole bunch of headaches; you’re now in control of paying those claims. “Live with that for a year or two. Recognize the savings. Then it’s an easy transition to a miCare clinic. You’re subbing miCare for the ER and expensive office visits. Your employees realize it’s a great benefit. They transition from ‘not sure’ to ‘I’m proud of this.’” BCS is a union company, associated with the International Union of Operating Engineers and
One of the treatment rooms at the miCare Clinic illustrates its commitment to topquality equipment and environment to match the medical services from a doctor, nurse practitioner and three assistants. (Photo by Cheryl Stritzel-McCarthy)
Teamsters. Sheryl Hershey said BCS guaranteed that under the self-insured model, benefits would be as good or better than the unions provided before. Self-insurance is suitable for any company with at least 150 employees, Hershey said. “If a company
is large enough to self-insure, the medical clinic is a wonderful way to go. It’s a benefit that’s popular.” Cheryl Stritzel McCarthy is a Bellingham-based journalist who writes regularly for Business Pulse and the Chicago Tribune.
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HEALTH CARE: wba solutions
Tricia Hecht-Glad of the Hecht Group in Portland, creator of the Whatcom Business Alliance’s new healthcare insurance plan for members, presented details of the benefits with WBA sign-ups during a recent meeting to finalize the plan. (Photo by Mike McKenzie)
WBA uses the BCS model to offer creative health care solutions for members Cost-saving, fully-qualified, custom plans to meet ACA mandates By Cheryl Stritzel McCarthy
BA members spoke, and the WBA listened.
In response to Whatcom Business Alliance (WBA) members’ ongoing concern about the impacts of the Affordable Care Act (ACA) on their businesses, the WBA will launch a new, innovative health care insurance product for member companies at a Northwest Business Expo meeting on October 23, at the Event Center at Silver Reef. In year one of the plans, companies with 50 or more employees working more than 17 ½ hours per week, and 35 enrollees are eligible. The goal is to lower requirement limits significantly in year 2 and 3. 18 | BUSINESSPULSE.COM
A mid-2014 survey of WBA member businesses showed 63 percent either strongly or somewhat opposed the ACA. Nearly 76 percent expected the ACA to result in increased health care costs for their companies. (The WBA survey questioned 2,100 Whatcom County business owners, presidents, managers, CEOs, and CFOs.) “We got extraordinary feedback, with indepth responses,” Tony Larson said. He is president of the WBA. “The survey confirmed our belief that we need to be involved in a creative solution for our business members. “We heard from our members that the spiraling cost of health care insurance is their number one concern going forward.” In February this year, WBA sponsored its second health care symposium on the Affordable Care Act and its potential impact on Whatcom County businesses. That event, capped at 200 attendees, sold out. Members expressed appreciation
for the overview of the fast-changing ACA legislation, but wanted to know what specific options they had for solving what they characterized as a significant business concern. The WBA board tasked Larson with the mission of exploring how the WBA might play a role by identifying creative solutions as well as providing updated information. “Many of our board members themselves are facing the same problems, so we decided the WBA needs to be involved with a solution,” Larson said. Early on, Larson considered a health-insurance model that pools smaller businesses to give them increased buying power, but discovered the ACA is making those obsolete. He’d also heard from WBA board member and CEO of Bellingham Cold Storage, Doug Thomas, about a very innovative and successful plan they’ve had in place for eight years. Their health care costs stabilized, or decreased. Their plan, considered a Cadillac
by ACA definition, was good enough for unions and employees to endorse. Employees were happy, BCS was saving money; it was winwin. “After working directly with the consultants who developed the BCS plan, we decided to use their plan as a model for our design of several creative options for WBA member companies of different sizes in varying circumstances,” Larson said. Thomas said BCS is often leading-edge. “Initially, it was a leap of faith, but the numbers looked good, and it’s not uncommon for BCS to try something new.” The WBA health insurance products will be unveiled at the Northwest Business Expo on October 23. “We had already gathered lots of information from 20 different local companies ranging in size from 25 to over 300 employees who agreed to provide feedback. They all differed in so many ways in terms of their benefit needs, but we thought if we could satisfy their
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HEALTH CARE: wba solutions needs, it would be very representative of the varying needs of our other members,” Larson said. Their response has been very favorable. “It looks like we are going to be able to save them lots of money on their premiums, as well as give them ways to substantially slow down the rising costs of insurance,” Larson said.
Basic and more The WBA basic plan meets minimum requirements of the ACA. Its cost is consistent with the penalty the federal government will impose on employers if they don’t provide health care insurance coverage. So, the WBA basic bronze plan offers members this option: Instead of routing employees into state-sponsored exchanges, buy a WBA plan for the same cost. “For companies that want more coverage, the WBA offers buyup options,” Larson said. “That includes the possibility of setting up their own clinic or joining an exist-
ing one, modeled after the BCS clinic.” At the outset, the WBA clinic option is available only to companies with 100-plus employees, with plans to change as enrollment grows. Working with the same consultants who developed the BCS program, WBA offers plans that are a hybrid between self-funded and traditionally funded. “We write our own contract, which is supported by the largest underwriter in the country and includes the best networks available. They all meet ACA requirements, can save companies lots of costs and eliminate the annual health care insurance shuffle many businesses face when the new premiums come out,” Larson said.
Where the savings are Writing its own contracts allows employers to buy the same or better coverage for less money. For example, traditional insurance pays dialysis providers 300 to 500 percent more than Medicare pricing. WBA
contracts provide the same service at 150 percent of Medicare pricing. WBA plans remove traditional excess pricing on typical pharmacy contracts, which saves an average 20 percent on prescription drug premiums. The WBA hybrid removes several taxes imposed on traditional contracts, saving approximately 5 percent off the top on premiums. “The companies will always know what their maximum exposure is,” Larson said. “There’s an incentive to be healthy, and pay less if big claims are down, but they’ll always know what their max out of pocket is.” Twenty Whatcom County companies with employees ranging from 25 to more than 300, from varying industries and in different situations regarding health care insurance coverage, agreed to participate in developing the WBA plans. With their feedback, the plans were developed. “It appears we will be able to provide similar or better coverage at a lower cost to
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our members and substantially slow down the increasing cost of premiums,” Larson said. Under traditional plans, employers often had to change providers every year or couple years in order to slow down the increasing costs. That caused disruption since identification cards, provider directories, and more had to change, too. If premiums rise, the WBA can shop other underwriters and if the WBA chooses to move, there will be no disruption on the user end. Users will have the same plan with the same card and same doctor network. “Our members were tired of the traditional health care shuffle, where they moved from provider to provider due to cost increases. With the WBA plan, you will be able to keep your doctor,” Larson said. “Period.”
Who’s eligible In the first year of the WBA health care insurance plan, companies must have a minimum of 35 enrollees to be eligible. “Our goal is to offer this innovative plan much more broadly in the future, but in year one, we need to focus on companies of certain size in order for it to make financial sense to the underwriters,” Larson said. “The WBA expects these plans to meet the needs of companies of different sizes and circumstances, whether you want to offer a minimum essential plan or Cadillac plan. Whether you hire minimum wage or high wage workers, seasonal workers or full season, in state or out of state employees.” If you would like to learn more about the WBA Health Care Insurance Plans, register for the roll out event at the Northwest Business Expo on October 23, at the Event Center by going to www. WhatcomBusinessAlliance.com.
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Cover story: best recycling
Ken Bell, President/CEO of Best Recycling, displays replicas of the commemorative medals struck once a year and displayed at the South Pole. (Staff Photo)
Entrepreneur Extraordinaire Boldly going and doing what others can't Articles by Mike McKenzie, Managing Editor
en Bell needn’t look far for inspiration. He looks around him – family, church, friends, work. At work he looks around him and sees as far as the mind’s eye can take him to clean up Planet Earth.
24 | BUSINESSPULSE.COM
Antarctica, Aleutian Islands, Greenland, the Yukon….and if not your continent, your curbside. He presides over his company, Best Recycling, in its 20th anniversary year in Bellingham. The company handles waste management of every type imaginable in a niche marketplace of every type imaginable. Bell looks out from a second-floor, corner-office setting on a Bellingham waterfront across a plaza from Bellwether Hotel. A section of Bellingham Bay, lapping up against the future downtown waterfront redevelopment site, serves as inspiration on many fronts. Just its innate beauty, for one. One of the many magnets of this region to visitors and newcomers drawn
to it. But another, a separate story altogether – call it the bane of the Bay, in Bell’s view – lies in the junk beneath the water’s surface. After all, he’s a recycler, a composter, a decontaminator. He’s also a strong free-market capitalist, by self-description, and sees another way to clean the bay and clear the way for thriving commerce across from his panoramic window panes. (Read that separate story elsewhere in this edition.) “I just look out there, and see why we do what we do, and why we live where we live,” he said, seated at his desk as another of his strong passions, baseball, provides a silent, visual backdrop (this day, the Chicago Cubs’ telecast) on a widescreen TV. Wait. Free-market capitalism and environmental stewardship, in the same breath? With Bell and Best, count on it….
Best Recycling brings to mind the Captain’s Oath from the longago Star Trek TV series: “…to boldly go where no man has gone before.” At least not to carry out the trash. “We take on projects that nobody else wants,” Bell said. The remotest of remote, the bitterest of cold. Places defying conventional transportation, and sometimes even survival. Start with Antarctica. That’s how Best Recycling started. Bell painted a word picture of the origins. “Battling for composting jobs (for Recomp, a company in Denver)….bored to tears….playing solitaire at my desk. I don’t idle well. It dawned on me. ‘I gotta go.’” Bell, who set out in college to become a veterinarian, had worked a couple of years for the Environmental Protection Agency straight out of Colorado State University. And, later for companies operating hazardous waste material, analytical labs, and waste incinera-
tion. One aspect of every position excited him. “My confession,” he said, “Closing deals is my addiction.” Recomp in his home state had assigned him to travel to Whatcom County and service clients here. He acquired sites and permitting
The remotest of remote, the bitterest of cold. “We take on projects that nobody else wants.” –Ken Bell, CEO, Best Recycling
for Recomp, and then moved here to serve as liaison between the corporation and the City, County, and State governments regulating the industry. That was his life from 1988-’94. Late in ’93 he hit a tipping point. The tipping point was losing the composting operation to long haul landfilling.
“A bid for Antarctica recycling came across my desk. Only two companies were willing to even try for it. I bid it, got it, and then bought it from Recomp, and left.” Bell said that he had an “Oh, no!” moment. “I thought, ‘What did I just do?’ I really didn’t expect something that big. But it was unique enough, and seemed to match my skills.” Hence, Best Recycling was born under a different name, Bell Development. In a rapid-fire series of deals, within weeks, Bell had negotiated with Weyerhaeuser Corporation, and suddenly owned another plant in Idaho – Panhandle Recycling specializing in cardboard curbside recycling in Coeur d'Alene. (He sold it in 2002.) About a year later Weyerhaeuser wanted to divest of their debtridden Canadian operations, and Bell bought that, too – a multi-services, standard recycling facility in Westminster, outside of Vancouver, B.C. And not long after that, Bell
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Cover story: best recycling took another leap forward. Or was it backward? Suddenly, he found that he had spun out of control in what mattered most to him. “We had two young girls, and I was ruining my family,” he said. The company had acquired a fourth location in Charleston, W. Va. – one of the largest suppliers of recycled cardboard on the East Coast. “That addition in 1998 just about killed me,” Bell said. “I realized that a deal would come up, and I’d want to close it. It was like a drug. Traveling to Coeur d'Alene, to Canada, to West Virginia – it made me realize I’m addicted to deals, and I needed to step back.” He gave “all the credit” to his wife, DeeDee, for sweeping changes in both their business and family structures. “She got me to do something about it.” He sold Idaho, West Virginia, B.C. operations, and kept only Antarctica. Bell also sold a downtown Bellingham recycling plant he had acquired, and previously had sold off much of his original properties to other local recycling companies. “I had to refine my thinking about what I wanted to do when I grow up.” That’s when he narrowed the company’s scope. “I like the niche market,” Bell said. “Very few people want to go to very cold, dark, outof-the-way places. Middle of the Yukon, Antarctica. Or to send a crew there, because of too many logistics. They want Hawaii.” Nowadays, Best Recycling centers on its core business, the annual clean-up of Antarctica, and a select few other extraordinary decontamination projects as they present themselves. Plus, a brand-new venture that could well revolutionize the controversial field of fracking in the oil industry. A couple of oilfield clean-ups during the last 18 months has “….spawned the next growth of Best Recycling.,” Bell said. ” In fact, it spawned the start-up just two 26 | BUSINESSPULSE.COM
months ago of a new spin-off company with an ominous-sounding name, Black Ops Thermal. When Best Recycling scored a contract to deal with an oil contamination from a spill halfa-century ago in the Yukon, the company deployed newly-obtained, patented equipment and techniques. A precise, innovative operation utilizing helipads in the Yukon, and a projected oil exercise in North Dakota turned Black Ops Thermal into a reality, built on patented and continuously-developing infrared technologies that essentially and simply cook the soil to purify it, onsite. No hauling, no disposal, and a resulting recycled clean soil.
"I realized that a deal would come up, and I'd want to close it. It was like a drug." –Ken Bell
An expert in thermal engineering, Roger Richter – “the genius behind it all,” Bell said – came on board in January this year, and the pair have targeted oil companies and fracking sites to revolutionize their processes by eliminating the need to haul contaminated materials to a landfill. They are in negotiations with companies in North Dakota, Colorado, Wyoming, and Texas for contracting their technology. (Read the detailed story of this innovative company on page 32.)
This is far afield from taking care of pets. A biologist by degree, Bell involves himself in engineering by proxy – mostly by encouraging development and innovation, and by wheeling—and, oh, yes, for certain—dealing. He detailed how he “tried several things and
failed,” including running a waste treatment plant, and how he met DeeDee, who grew up in Boulder, in Denver where she owned a women’s clothing store. After traveling with Recomp, moving to Bellingham, and climbing out on the private business limb again, Bell appears to have limitless boundaries for inventive ventures and adventures. Boldly going where no deal has gone before…. Other satisfactions arise in his conversation about work and life events, as well. He seals the deal on family and faith, on management methods with co-workers, on mentoring teen-age boys into youngman status, on political issues facing business and environment, and even on managing allegiance to his adopted Seattle Mariners while his team of the past, the Colorado Rockies, falter. “Managing workers is addictive, too,” he said. “In our first operations in Coeur d'Alene, the biggest lesson I learned was to listen to the people who worked there. We set up a white board, and just listened, allowed them a voice, wrote up their ideas on the white board. We found out that way who to keep, and who would become a headache. “We came up with a plan that worked. They bought into the vision because they were part of the vision.” He bought the plant for about $250,000. “The relationships were good, and it was profitable. That cardboard plant turned out to be worth every penny,” he said. “The next one was a big risk.” He described the Canadian operation as a $600,000 enterprise mired in debt. “I fought tooth and nail to cut the size of the plant. Too many people, too much space. Two floors. It was a zoo.” It was losing an average of $78,000 a month when Best Recycling took it over, and after the first year it was profitable by more than $130,000 a month. That turnaround typifies Bell’s
approach to strategic growth. “First, one of my pet peeves is inefficiency. We streamline operations. And, I’ve never grown the company so big that I can’t beat the competition, because overhead is low and I know the exact margins.”
The conversation winds down. “Time to brag,” Bell said, pulling out a tablet. He dialed up a You Tube presentation, and a brilliant voice filled the office space. “My daughter, Sydney,” he said. She’s 19, attending Northwest University in Kirkland, and developing her considerable music talent. The Bells’ younger daughter, Lauren, is 16. As a father of two teenaged girls, Bell formed a personal mission around boys their age. “I believe in the philosophy of keeping your friends close,” he said, laughing, “and your enemies closer. No boys in our house!” The mentoring sessions that began with Squalicum High School students center around an occasional poker game. More addictive dealing. “It’s a huge part of my life. It’s a way for me to get to know them, and them me, between hands. Some are kids without dads, so I’ve gotten some fathers involved to help take these boys under their wing. They keep coming back. We had 32 at our most recent poker game.” He delighted at the mention of several long-time participants, long after schooldays have ended. “One, every time he makes a career or life decision he gives me a call. One is struggling with his girlfriend. One graduated three years ago, but called to meet me today before he goes back to college. This is a real ministry.” Good thing Bell has no inclinations toward sharing on the down low. “Between poker hands you can gather a tremendous amount of intelligence,” he said. “Who’s dating who, who’s breaking up with who….”
Recently, Bell started yet another facet of personal ministry. He and some partners have developed a tablet application, Ora.net, that provides a network of various ways to enter into intercessory prayer with users. He participates regularly with a Christian men’s group. He rose, and took note of this particular day, all sun and blue sky and sparkling bay waters. The view, and the ideas that flow from it, confluent in their driving of inspirations for Ken Bell, sprinkled
consistently throughout a two-hour visit: “I love the Port, because the Port is a business, and I love business…. I’m constantly thinking about what goes where in managing waste, and not just kicking it to the curb and thinking it’s gone. When everything goes away, everybody’s happy.” At Best Recycling and Black Ops Thermal, there is no curb.
WHATCOMBUSINESSALLIANCE.COM | 27
Cover sidebar: best recycling Recycling, composting, and repurposing of all materials in Antarctica takes place at the end of each year under a 13-year contract with Best Recycling of Bellingham. (Photo courtesy of Best Recycling)
Brrrr-bringing the waste out of Antarctica Best partners with Nat’l Science Foundation, Lockheed Martin to recycle at the South Pole Recycling in Antarctica. That’s a ‘Wait, what?’ concept. With an official population of zero, and daily temperatures far, far below that, Antarctica is the coldest, driest, windiest, highest, and fifth-largest but least-populated continent. So where do trash, recyclables, compostables, hazardous materials – the stuff of recycling – come from? Wherever and whatever the thousands of scientists from more than two dozen countries generate, or ship in. And, by international law, it must come out. The Antarctica Agreement of 1959, signed by 12 countries then and around 50 now, requires it. That’s where Best Recycling steps up, in partnership with Lockheed Martin and the U.S. National Science Foundation, recycling and repurposing about 60 percent of the South Pole’s waste and surplus equipment stream – an extraordinary amount of tonnage. Operating out of Bellingham, Best Recycling holds a 13-year contract 28 | BUSINESSPULSE.COM
that certifies Best as responsible for an annual purging of materials from the continent through at least 2025. Best also has worked in concert with managing organizations prior, Raytheon and the Antarctica Support Associates. The parent organizations are responsible for the totality of operations, year-round. Ken Bell, founder and president/CEO of Best, explained the scenario during a two-hour interview session recently. “By the standards of international law, anything that goes into the country must come out, 100 percent. And, we (waste stream managers) can leave no mark on Antarctica when it’s gone.” Bell earned the low bid for this annual task on behalf of his employer at the time, Denver-based Recomp, worked it a year while living here on assignment, and then bought the project from Recomp and started his own firm in 1994. The job had to be rebid every three years until last time around, and Best’s advanced technology plus fiscal efficiency earned a long-term agreement two years ago.
Best grew this project into a reputation for out-of-the-ordinary niche work, and later managed the waste or surplus materials from remote sites. Like, the removal of a former Naval Air Station on Adak, an Aleutian Island with a rich WWII history. Or, waste assessment and other consulting work for North Pole research in Greenland. A Best Recycling crew of 22 goes down to the South Pole during August, packages for delivery through February when the ship leaves for a three-week sailing to California, takes a month to offload and clean up, and then travels the world until starting the cycle over again. The typical haul amounts to as much as 500-600 containers and bulk recyclable material. Each container weighs about five tons. That basic waste varies between 1.5-3 million pounds. Hazardous waste, 30 tons. Clean Wood is composted; food waste, incinerated. Recyclables include scrap metal, cardboard, and paper, and electronics mostly.
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The workers earn between $600$1,100 a week, depending on their expertise and length of service. “We’ve found that people go for an experience, and then decide it’s too cold, dusty, isolated, etc., and leave. So we offer a bonus of 25 percent of salary for lasting the entire season,” Bell said. Full-time staff can earn $65,000$90,000 a year. “We cut costs of the operation in half with our efficiency plan,” Bell said. “We cut staff in half. We reduced the number of trips needed and the number of containers handled. Inefficiency is one of my pet peeves.” Bell left for his annual trip to the “Big A” on Oct. 2, and he’ll stay there until early December, monitoring. His family, not allowed on the continent, will meet him in New Zealand for a one-week break. The experience, which he has chronicled in photos on the company website, exhilarates him. “I’ve loved it,” he said. “It’s become more complex with time, and every year there’s a different challenge. It might be weather, or logistics, but always something to overcome.” An example occurred last year when the ship leaving Port Hueneme in Oxnard, Calif., got slammed into the dock by a 100-milean-hour gale force wind. Everybody had to get off the boat, and it left just half full. The trickle-down effect of that was substantial upon arrival. A remarkable aside to the recycling of Antarctica is a yearly auction conducted by Best Recycling that sells off all surplus heavy equipment. It has raised from $200,000 to $500,000 over the years, with 95 percent of the proceeds returned to the Antarctica Support program. Once, the auction featured 19 F-100 aircraft filled with bulldozers, Sno-Cats, vehicles, and more. This year the auction will take place with new technology that allows bidding over the Internet. Because the equipment sits secured on a U.S. Navy base, enveloped by very stringent security, it has limited the number of buyers who can get into the auction site.
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Best built applications from scratch, utilizing Bellingham marketing group RedRokk. Buyers now can bid through a smart phone or tablet, live in real time, linked together. A bid will last every 30 seconds until bidding stops. The auction has a website (www.antarcticauction.com), and Best
Recycling displays a fire truck that has a hand-knitted penguin doll in the driver’s seat. “My wife DeeDee knitted it for me,” Bell said, “to take with me as a companion.” P.S.—Penguin not included in the sale of the fire truck.
The tundra at the south pole WHATCOMBUSINESSALLIANCE.COM | 31
Cover sidebar: black ops thermal
New horizons: Black Ops Thermal and the Pit Boss The genesis of a new, spin-off company, Black Ops Thermal, took root in Ken Bell’s love of “going places that others don’t want to go, and doing things nobody wants to do.”
Chevron, through their environmental contractor Park Valley, contracted Best Recycling to deal with a big contamination spill from 40–50 years ago. Best described the scene: “It involved a diesel that was removed long ago, on an iron ore site in middle of nowhere, with no roads in and out, and we could only enter by helicopter.” Chevron’s environmental contracts clearly stated that they are not renewable unless the contractor cleans up the site.
So, when the Yukon beckoned to his Bellingham-based company, Best Recycling, he was so there, bucking tremendous odds.
“We assembled the portable equipment (nicknamed the Pit Boss) on site from our helipad, cooked the soil with infrared heat, and cleaned up the mess within a three-month span of the summer of 2013, in-and-out, and left them with pure soil. Bell said that the conventional solution for oil companies in drilling, or in
32 | BUSINESSPULSE.COM
spills, is to take the spoiled soil and all the contaminants it contains to a landfill. “I hate that,” he said. “That’s just taking the problem somewhere else. This is the next evolution of our company. It will deal directly with the problems in oil drilling and be a huge political win for fracking.” The method and equipment proved itself successfully twice last year. After the Yukon project, Best Recycling began permitting for use of the Pit Boss in the area of a remote oil drilling site near Watford City, N.D. “The problem in drilling down and then horizontal,” Bell explained, “is the creation of accumulating contaminated fluids. Then the material goes to a landfill and takes the contaminated oil with it. “Our patented process is very efficient in burning up the oil, recapturing the water, the chemicals, and other condensed stuff in our sealed
Patented infrared technology, pictured at left, places Black Ops Thermal on a new frontier of recycling contaminated soil at oil drilling sites, and other applications. It’s an answer to the ills of fracking, for example. (Photo courtesy of Best Recycling)
container. Their operation is left with clean soil on site.” In addition, the process recycles. “Afterward, instead of dumping contaminated oil, they can sell the recycled decontaminated oil, reuse the water, and keep the chemicals out of landfills,” Bell said. Bell bought the basic technology from a company going out of business, and then brought in Roger Richter, who had obtained the original patents, to develop it further for other applications through his thermal technology specialization. The companies will refine the solutions to seek economic advantages because in most cases, Bell pointed out, it’s cheaper to haul to a landfill. The Pit Boss costs about $250,000 to manufacture. Bell gambled on it without any contracts, just patents on the equipment, and a “now, go prove it” mindset. Best Recycling tested the Pit Boss on actual spill material to prove that it worked by staging oil spills, train derailments, and readying crews for deployment. “We recovered all the test sites with no waste,” he said, “without leaving any footprint behind.” Richter built the technology to environmental compliance, using tubes drilled with holes, heating elements, vacuum sealing in drums, and what Bell described as, “Simplicity…no moving parts. He loves the thermal process – he’s the genius behind it all.” “I don’t carry the credentials of an engineer,” Richter said, “but I’m involved in the development of environmental technology. I’ve lent my expertise to obtaining a few patents.” He began gaining expertise from experiences with an uncle’s service stations a couple of decades ago, and Richter’s career path curved widely to the shores of Bellingham Bay. “The EPA (Environmental Protection Agency) told my uncle his service stations would have to be rebuilt according to new regulations,” Richter said. “I started a company with some partners, United Soil Recycling, and
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t wO h Otels things took off from there.” The Pit Boss got its name, naturally, from its commanding presence over the oil pits. Black Ops came about because on the Yukon job somebody observed that “it looked like one of those covert operations with helipads being constructed, helicopters flying troops in, and bodies running around,” Bell said. Bell’s obvious passion over developing Black Ops Thermal goes back to his confession about obsession with new deals. “I’m always driven by a love
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Over 900 hOt slOts! for innovation, new ideas, showing a better way than the old way,” he said. “And, by keeping stuff out of landfills.” The company has received feelers of interest from several sources in Colorado, Wyoming, the Dakotas, Texas, and Colombia, South America. “Basically anywhere there’s oil,” Bell said. “This is bigger than anything Best has ever taken on. It’s going to change the way things are done in many industries, especially oil.” WHATCOMBUSINESSALLIANCE.COM | 33
port of bellingham: an environmentalist's view
“We could clean it out (downtown Bellingham waterfront), and create shipping lanes with the ultimate goal of a working port. It would cost… probably $25 million – but what if? We’ll never know, because they’ve never been down that road, and won’t go down it.” – Ken Bell, planning commissioner and president/CEO of Best Recycling
No to legislating, regulating… but yes to a ‘working Port’ Planning commissioner / business owner Ken Bell speaks out “I have no desire to become a politician.”
That flat-out statement, coming from Ken Bell, suggests no wiggle room. But, where’s the but? He does, after all, serve on the Whatcom County Planning Commission (until his term expires in December 2014). And, his name does appear on the ballot in November as one of many who filed to serve on the County’s new slate for Charter Review that comes about every 10 years. Here’s the but, from Bell: “But I do desire to get in front of moving forward – to get some movement on the Port, and on important environmental issues.” He ran last year for a seat on the Port of Bellingham Commission, and didn’t win it. He still raises a strong voice for what he perceives as necessary changes in 34 | BUSINESSPULSE.COM
direction and execution of planning in its governance. “The Port drives me insane,” he said during a wideranging interview. “I’ve been here 10 years (in his office at Best Recycling on the Bellwether Way waterfront), and I look across and see that old GP (Georgia Pacific) building, and I just don’t get it.” He also doesn’t get the proposal that passed to cover over the mess of contamination beneath the water near the downtown waterfront redevelopment area, though acknowledging that the proposed capping will work. “Granted, it is safe containment,” Bell said, “but it has reduced the usability of the Port. Less expensive and safe, yet what’s the potential in the long term?” His solution, coming from more than 25 years of dealing first-hand with cleaning contamination, managing waste streams of huge magnitude, and growing businesses good for progress and clean environs:
Photo courtesy of the Port of Bellingham
Lay Berthing at the Bellingham Shipping Terminal The $1K-a-Day Ship The Horizon Lines vessel, Horizon Fairbanks, moored at the Bellingham Shipping Terminal is an overflow relief ship for transporting cargo that stays prepped and ready to get underway within 48 hours. Horizon Lines, headquartered in Charlotte, N.C., pays the Port of Bellingham about $1,000 a day to keep the ship moored in Bellingham Bay, a procedure known as lay berth-
ing. Caretakers check the ship every month for maintenance and repairs that keep the vessel in working condition. Built in 1973, the Horizon Fairbanks is one of the smaller ships in Horizon’s fleet that serves the U.S. out of Alaska, Hawaii, Puerto Rico, and several mainland ports including Tacoma. The ship measures 650 feet long and weighs over 20,000 tons.
“We could clean it out, and create shipping lanes with the ultimate goal of a working Port. It would cost much more—probably $25 million—but what if? We’ll never know, because they’ve never been down that road, and won’t go down it.” He offers a discourse on how strong, local business drives both commerce and environmental stewardship better than regulation, and again it reveals his political nature. “I lean right of center, a capitalist to my core, and I truly believe that most regulations are wellintended. However, the consequences are often more harmful than intended.” He sees political agendas standing in the way of progress, based on fear and emotions. “I watch issues, and people get heated over them to further their political agenda. It happens time and time and time again. Elections influenced by fear of the unknown. It’s easy
to regulate, and think it’s benign – and it’s not. Nothing changed with the people who got elected.” Bell will continue to seek avenues to influence the kinds of changes he believes would serve the best interests of the city, the county, and the region he has held dear to his heart since having moved here from his home state of Colorado more than 20 years ago. “I can just look out my window and see why I’m motivated to effect change,” he said. “It’s the reason I ran for Port, though I’m not a legislator. I love the Port because it’s a business. I love business.” His thoughts drift to the example of where he’s standing as he speaks. “The Port owns our building. They spent $4.5 million on it. Think about what $4.5 million could do over there (across the water). Create a hoppin’ place. That’s where they should spend time and money, and focus their energy.” – MM WHATCOMBUSINESSALLIANCE.COM | 35
special report: shoplifting
Loss Prevention: An important part of protecting the retail bottom line Local companies team up to fight theft Article and photos by Mike McKenzie
ne afternoon recently, several men and women sat at long tables arranged in a horseshoe filling a conference room at the Hardware Sales store in Bellingham. Bob Fisher, the host, projected images from his laptop computer onto a screen at the front of the room.
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Some participants had photo albums to pass around instead of a slide show. The objective of this regularly-scheduled meeting: identify thieves, put names to faces, and work collectively on their job, formerly known as retail loss prevention and now falling under the umbrella of Organized Retail Crime in protecting companies’ retail assets. “We’re private agents,” Fisher said, differentiating the group from law enforcement, although a Bellingham Police Department officer sat in attendance. “We’re hired by retail stores to keep a check on their assets.” The participants work for
numerous retail businesses known commonly as Big Box stores. Their company policies prevent them from identifying themselves publicly, but they’re all familiar, popular national or regional chain stores. The daily task for the people in the room that day is to catch shoplifters. In the case of almost all of the thieves on display in this showand-tell session, the term shoplifter is too soft. Many work in tandem, in pairs or threes, and often even larger theft rings, and they’ve most often committed felony crimes. “It’s their job,” Fisher said, “and they’re very good at it.” The hard-core among the thieves will outrageously, in defiance of
BUSINESS BOX SCORE: Facts reported on its website by the National Association for Prevention of Shoplifting: • More than $13 billion worth of goods are stolen from retailers each year…more than $35 million a day. • There are approximately 27 million shoplifters (or 1 in 11 people)…more than 10 million people have been caught shoplifting in the last five years. • Approximately 3 percent of shoplifters are professionals…solely for resale or profit as a business…drug addicts, hardened professionals who steal as a life-style, and international shoplifting gangs who steal for profit. • Professional shoplifters are responsible for 10 percent of the total dollar losses. Ty McClellan, co-proprietor within the family-owned Hardware Sales, has seen shoplifting diminish and fewer arrests because of the store’s investment in a vast surveillance system and vigilant prevention officer.
hidden cameras and the threat of prison sentences, steal high-priced goods that bring big bucks on the street (which really means, usually, on line). Some are petty thieves. They’ll shoplift items worth only few dollars, for personal use, thinking they have cleverly hidden their steal, not knowing that the store’s hidden cameras have placed them among the show stars at a county-wide, retail loss prevention meeting. Most of the images Fisher showed, and that others handed around the room, identify professional criminals who are crafty, well-organized, and wise to the boundaries of the law. Many have earned nicknames within the group. One band of thieves is known as “The Punisher Crew” because of their intimidating looks. (At a similar meeting in Skagit County, a Big Box participant said, “Oh, there’s Sweater Guy. He stole from us, and the next night he came up to me at a fast-food and asked for money….”) The retail store loss prevention agents know the thievery games well – one person distracting while another steals. The thieves use kids or pregnant women as diversions; change price tags on items; empty a large, one-item box and then fill it WHATCOMBUSINESSALLIANCE.COM | 37
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with many items; take a stolen item straight to the exchange desk to get a cash “refund” or gift card (in stores where no receipt is required for a return), or simply just bypass check-out and push a filled cart straight out an exit. And still they’re hard to put in jail. Even though they’re caught in the act, many times even detained and confronted, they brazenly steal and get away with it because of restrictions a store must operate under in making a stop. Also, laws vary by states, and by counties within a state. By various creative methods, the shoplifters contribute to a wave of crime estimated by law enforcement and business reports that amount to billions in losses. Those losses trickle back into the cost of doing business, which contributes to higher prices to cover losses, which hits the consumer right in the pocketbook. The cycle has led to stores hiring professional security experts onto full-time staff for loss prevention. Around the state, regular meetings bring these professionals together at a place of business or a police station, and they view the targets’ photos, swap notes among the marts and the grocers and the electronics stores, and team up against the perps.
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••• Hardware Sales, the only locallyowned store in the recent meeting of county loss prevention agents, retains Fisher to operate its intricate video system and, as he put it, manage assets. The process, though taking the form of identify-and-catch, is to raise awareness among shoppers that serves as a deterrent. “The positive results of my job,” Fisher said, “protects the company and customers against the cost of retail theft.” Ty McClellan, a co-owner from the family that has operated Hardware Sales for 52 years, said that the company doesn’t have
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special report: shoplifting
Hardware Sales monitors every aisle and every entry/exit of its Bellingham store with a complex video surveillance and recording/replay system. They and other retail mercantile stores share images of shoplifters on a regular basis to lock in on Organized Retail Crime (ORC).
a means to literally compute the savings from having Fisher on board. But he knows that thefts have declined significantly and he believes that the Hardware Sales reputation for catching and prosecuting shoplifters has paid off largely. “People know about us now,” McClellan said. “Arrests are way down.” Fisher has worked his position since 2011. His highly-refined system and eagle eye for the slightest detail is equal to the task, i.e., equal to the highly-organized, preciselyexecuted methods of the thieves he seeks to catch, report, and file charges against in hopes of prosecution to the fullest extent of the law. That means you’re busted, he said, whether the steal is one dollar, one hundred dollars, or one thousand dollars. No theft is too small. The law in Washington precisely states that no matter what the value of the stolen item, if a thief is caught a third time within a specified time period (180 days) in three separate and distinct mercantile establishments, it’s an automatic felony. 40 | BUSINESSPULSE.COM
“It’s amazing what people will steal, worth only a few bucks,” Fisher said. “We prosecuted a fellow once who stole a marker crayon that sells for a dollar-nineteen. But where do we draw the line? A theft is a theft.” Fisher’s normal daily routine is dedicated to gathering images that he will share with other stores, file with law enforcement, and place on the Hardware Sales “wall of shame” that is placed out of public view where employees can become familiar with the thieves, too. His cubbyhole filled with video equipment is upstairs, tucked around a corner from row-upon-row of jam-packed, tall racks holding thousands of products. He spends more than 10 hours a day engaged in his methods, five days a week. Most of the time he’s monitoring live video camera feeds. “This is my home away from home,” he said, “starting at 7:30 in the morning.” He has a set routine. “I start the day with the police blotter from the night before,” he said one afternoon while demonstrating the equipment that Hardware Sales has for theft
prevention. “I’ll see if I recognize a name, or if anything happened nearby. We’re a ward of the neighborhood.” He gave an example of how recognizing a name of a repeat offender at the store on the police blotter led to the restitution of $11,000 for past stolen goods. Whenever he sees a name he recognizes, Fisher looks it up on Facebook. “I get a visual there, almost always, and I load the picture and file it. Facebook works because it adds a face to a name. We often catch some this way. The funny thing is, one can lead to another, because they all have the same friends on Facebook.” Next, Fisher goes over the jail roster, again seeking names he recognizes. He told of a person known to the store who drew an overnight in jail for a driving offense, and next day he came to tell the Hardware Sales staff how he’d heard shoplifters in their cells warn others of their ilk to “stay away from Hardware Sales, they’ve got you covered….” After checking activity from the previous day and night, Fisher buckles in for the video ride. He watches some screens in real time – the main monitor has four feeds – while in playback mode on DVD he scours for hours in search for the source of the empty packages found on shelves. He works with six PC-based recorders, and some hard-wired, network-based cameras. When he finds an empty package, he can back up the recording slowly and pinpoint the exact moment of the theft. “We’ve often found the thief within 10 minutes of getting them caught on video,” he said. Other times, he said, he’s caught a repeat offender from 2–6 weeks later because of the video on file. Fisher, whenever he catches a thief, determines how to handle the situation based on such factors as first-time offense, repeat offender, value of the stolen goods. “Some large companies ‘burn’ them,” he
special report: shoplifting said. “I’m in loss prevention; I might say to them, ‘Did you find everything you need?’ I try to put them at ease by telling them that if they’re forthright and honest, I won’t have to call the police in certain circumstances. That works well on the petty thefts, in particular. They don’t want public embarrassment. They know they can’t come back.” McClellan said that people would be amazed at some of the photos in the store’s collection of past shoplifters. (“Now serving detainee No. 578,” Fisher said on the day of his demo.) McClellan said, “You might recognize someone you know in a profession that you’d think, ‘No way!’ You’d be shocked at who will steal the most trivial of things, sometimes, it seems, even just to see if they can get away with it.” Hardware Sales’ video system looks elaborate. “But you ought to see some of the newer systems,” Fisher said. “They make us look ancient.” One nearby retailer, spread through a vastly larger space, has about 10 times more cameras and monitoring equipment than Hardware Sales – all state of the art. Other Big Box representatives said their systems vary in numbers of cameras and means of viewing video, just as their in-house rules vary widely on how, when, and where they can make stops. “They
have to get out our door with the goods,” one said. Another said, “We’ll stop them on the spot. We’ll usually say something like, ‘I know what you did,’ and, ‘Would you like me to help you check that item out and pay for it?’” Fisher said, “We’re much like a casino in that we monitor every aisle, as well as the parking lots, and up and down the streets bordering our stores.” He demonstrated, slowly and stealthily, how he
“The positive results of my job protect the company and customers against the cost of retail theft.” – Bob Fisher, security officer at Hardware Sales
can trace backward from a discovered empty package to the moment of the shoplift, and then forward to get numerous views of the thief ’s face (plus any accomplices) and the license plate numbers on the thief ’s getaway vehicle. “We’ve caught and detained outside the exit doors, as much as two blocks away.” (One Skagit County big-box store reported that they tracked a thief who had pushed a full cartload of merchandise out the door, and apprehended them
still on foot, pushing the cart, two miles away.) What happens next? That depends on when and where a thief gets apprehended. The law for automatic prosecution varies countyto-county, state-to-state. Whatever the time frame, the professional thieves work the system. “Here (in Washington) once they’re arrested twice and at different establishments, they’ll wait and strike again on the 181st day after their first arrest,” Fisher said. And, in Whatcom County, Hardware Sales and some others can impose a lifetime ban on someone they catch stealing, filed with local law enforcement agencies; if a banned person returns, they face an automatic gross misdemeanor charge of trespassing. If a banned person returns and steals again, they incur an automatic felony charge of burglary. Some other businesses, however – especially if they operate regionally or nationally in a chain – have policies against bans. The ORC representative from one regionalchain grocery and general merchandise store commented, “We’re not allowed a lifetime ban. So ours is for 100 years.” Fisher, originally from Ohio, has worked in businesses around Whatcom County for 27 years, including grocery, furniture moving and storage, and an overhead door company. He has retail
Nicknames for the shoplifting scams: • • • • • • • • • •
Cart Push – Pushing a cart of merchandise out the front door without paying. Fire Door – Exiting out a fire exit without paying—turning a simple theft into a felony burglary. Run-Out or Walk-Out -- self-explanatory. The DSR (direct sales refund) – Walks into a store empty-handed, shoplifts an item, and takes it directly to the refund desk for cash or gift card. Receipt Pick – Searches for a receipt on the ground in the parking lot, or in trash, and does a DSR. Double-Pick – Person selects two of one item off the shelf, conceals one, and puts the other one back as though changing their mind about buying it. Tag Swap – Sticks a lower-valued price tag or UPC from one item onto a more expensive item. Box Stuff – Empties a box, and then conceals a more-expensive item in the lesser-valued item box. Return Fraud – Steals an item then turns around and brings it back in or gives to another person to bring in for refund The Talker – The thief picks an item, conceals it, then chats up a store clerk as though they’re a normal customer with a routine question to throw off suspicion.
42 | BUSINESSPULSE.COM
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industry report: retail marijuana
magine starting a business where your product availability is unpredictable. Your cost of doing business includes a steep 25 percent tax on product, before you even figure in cost of goods, overheads, and your net income. Add what to do with your cash, because you can’t open a bank account. Then there are the customers, lining up to buy this elusive product.
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Welcome to the uncharted new world of retail marijuana sales in Washington. Hoped-for pots of gold have attracted entrepreneurs with the resources and the vision to see where this new retail category is headed, and the ambition to get there first. After Washington voters approved the sale of retail marijuana in 2012, the state’s Liquor Control Board (LCB) began the mammoth task of building the infrastructure to regulate not only retail sales, but also wholesale growers and processors. Colorado smoothly transitioned to retail sales last January, due in large part to its successful oversight of that state’s medical marijuana industry. Washington, by contrast, does not yet regulate medical marijuana dispensaries. Thus,
Articles by Susan G. Cole
everything from licensing to shop locations to standards for product quality assurance had to be developed, all before the first retail store opened July 8. The state might not have been ready, but ambitious retailers were.
EARLY DAYS: WHERE IS THE PRODUCT? Located on Hannegan Road in a small Bellingham shopping strip, Top Shelf Cannabis was first in Washington to sell retail marijuana. It has been a wild ride, according to major investor John Evich. “It was all new, a whole new industry, different from Colorado’s,” he said. “Our best plans changed by the minute. It was all speculation: we didn’t know the product cost, the availability, the expenses
Danielle and Juddy Rosellison joined three other investors to create Trailblazin’ as both a grower and processor of legal recreational-use marijuana in Bellingham’s Irongate District. In the dual role Trailblazin’ pays 25 percent total excise tax on wholesale sales/distribution, rather than 25 on each phase. (Staff Photo)
with running a store. But it was a great opportunity. You couldn’t plan much. It’s not that kind of world.” A former commercial fisherman who grew up in Bellingham among a long line of family fishers, Evich said, “I didn’t plan to be in this industry. But it’s like being a pioneer and making history. And I’ve never been one to do something halfway.” (He also owns a business that manufactures and distributes mechanical riding bulls nationwide, and other custom-made, bucking animals, such as a rooster and a science fiction creature.) Halfway doesn’t work in the retail marijuana business, judging by the heady early days. Customer traffic at the two Bellingham stores that opened first has remained steady. One store reported that more than two months in, it was averaging 100-150 customers a day. Three other stores started in Whatcom County by October. All benefit from extensive media coverage and old-fashioned word of mouth. But those customers standing patiently in line to make a now-legal purchase have discovered the main obstacle to retail that store operators have been grappling with: Marijuana has a specific timetable for growing and processing, and
that timetable can’t be accelerated. The LCB licenses growers and producers, and those businesses have dealt with a similar, lengthy amount of review before receiving a license to begin operations. Evich and owner Tom Beckley were ready for the limited supply, and they got busy May 2, soon after Top Shelf “won” a license in the LCB lottery. “I researched processors and developed relationships with them. One processor, Sea of Green Farms in Bremerton, called us first when their product was ready,” Evich said. “Securing the product is the #1 priority for this kind of business.” Aaron Nelson, the senior vice president for marketing and public relations at 2020 Solutions in Bellingham, which had a one-day delay in opening, echoed the same problems as other retailers. “Our biggest issue is product availability,” he said. “I have two people working full-time on securing it.”
With demand seemingly high and product limited, it’s a seller’s market these days. Nelson pointed to the paucity of producers – all indoor growers during the first months. He predicted that once outdoor growers received licenses and started operations, a bigger growing canopy will result in more product availability, and likely lower costs to customers. Trail Blazin’ Productions in Bellingham received its license to grow and process in August. Danielle Rosellison, one of five co-owners, explained, “We’re in a unique situation. Prices are fantastic for a wholesaler, but not a for a consumer. You grow as much as you can, as fast as you can.” She said that the state requires 15 days to bring in marijuana in its non-flowering state. It takes another 6-12 weeks to flower, then another week or two to cure and package. “No one can supply retail in less than three months,” she said. Along with at least another 11 growers in WHATCOMBUSINESSALLIANCE.COM | 45
industry report: retail marijuana Whatcom County, Trail Blazin’ was ready with a plan to move forward. “When we heard who won the licenses in the state lottery, we interviewed all the retail license holders and rated them one to five stars,” Rosellison said. “We had a vision to find the best retailers, people who knew what they were doing – not just the lucky ones who got the golden ticket. We wanted people who aligned with our business plan and morals.”
OLD SCHOOL BUSINESS PLANS FOR A NEW KIND OF BUSINESS
The marketing manager for 2020 Solutions, Aaron Nelson, displays a pipe created by a local glassblower Michael O'Conner (Staff Photo)
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Troy Lozano and his wife Aubree own 2020 Solutions. He said they focused on hiring and developing the best team in this sector, people professional and responsible while serving customers and maintaining the store’s clean and comfortable atmosphere. “To attract top team members,” Troy Lozano said, “we committed to paying them a good wage. We’ve also been developing relations with
a variety of state-licensed growers, including two in Tier III (largest allowed by the state) to ensure we can be a reliable source of products for consumers.” Nelson, a 14-year corporate manager for Fed Ex and a lifelong Whatcom County native, said that “while there are other companies that sell the same products, we do not have any competition. Our mission is to provide a clean, professional environment with a higher level of service.” He said 2020’s goal is for its customers to have a pleasant experience with cannabis, and the company’s “budtenders” at the counter educate customers on the differences between various strains, and their potential effects. Neither Top Shelf nor 2020 offered self-service; employees behind display cases work directly with each customer. Plans call for 2020 to have a second location in Bellingham, plus a third in the county. It ties in with the company’s
vision of becoming the premier provider of cannabis solutions in Washington. Over at Top Shelf, Evich drew on his experience growing a successful business from the ground up to guide these early days of retail marijuana. “Gates and Allen, they had a dream and they went with it,” he said. “I shared this dream with friends.” Evich relied on relationships with friends who shared his work ethic.Wishing out loud that he had 48 hours in the day, Evich said he doesn’t have time to work on a business plan or “waste time doing PowerPoint presentations, because in that time, someone else will beat you to it.” But he knows the kind of retailer he wants Top Shelf to become. His business plan? Adapt. Overcome. Succeed. “We don’t want people to think we’re getting rich,” he said. “It’s not get rich quick, it’s get rich on customers.” Pricing is one way he’ll keep customers coming back. “We can’t sell the product for less than what we paid for it, but we’re trying to keep the price low,” he said. Although he acknowledged that their typical price is double or more what street marijuana costs, “we matched the street price on the first day as a thank you to customers.” For Danielle and Juddy Rosellison and their three ownership partners, moving into the retail trade was an easy decision. “We had been involved with medical marijuana for several years, which is not regulated at all,” she said. “When I-502 passed, we were 200 percent in. “We are 100 percent pioneers. No risk, no rewards. I’m a money girl,” she said, laughing. “People are jumping in to make money, but it’s not going to last forever.” As a grower and processor combined, the Trail Blazin’ team plans to last. “We want one facility in Bellingham, one in Olympia, one in Seattle, and possibly one
Among the customer service reps handling the traffic of hundreds of customers a day at Top Shelf Cannabis: (left to right) Constantine Chou, Jeremy Hunter, and Don “Call Me Murph” Murphy. (Photo by Travis Arket)
in Vancouver (Wash.) for the best brand recognition,” Rosellison said. She is working with the state and a marijuana trade group to “legitimize” the infant industry. She’s also has become involved with a political action committee to find ways to streamline what has been a cumbersome and slow process of business approvals by the state.
THE CORE CUSTOMER “I’ve waited 42 years for this day!” said a bearded, older fellow as he approached the showcase at Top Shelf Cannabis on opening day. His driver’s license ID was no problem with the security handlers contracted to manage the crowd (allowing just a few customers in the door at a time, while a long line waited, having formed in 5 a.m. darkness). The exclamation defined him as legal marijuana’s typical customer.
RUNNING THE NUMBERS Among the related businesses springing up to assist marijuana entrepreneurs, BioTrackTHC was chosen by the state to maximize seed-to-sale revenue collection. BioTrack, with headquarters in Florida, was founded seven years ago rooted in the medicinal marijuana industry. BioTrack powers the state’s Marijuana Traceability System, which provides real-time monitoring of inventory and of taxable sales amounts. The company has a rep based in Seattle. Top Shelf Cannabis uses BioTrack’s point-of-sale system, while 2020 Solutions uses a California company, Greenbits, that connects with the state’s tracking system. Greenbits provides canna-businesses with software to grow sales while ensuring compliance with state regulations. Other specialized industries feeding off of the retail marijuana legalization include a wide range from security firms, to glassblowers creating pipes, to real-estate investors with buildings large enough for growers and producers, to publishers of books on how to use marijuana within parameters of state law, and to manufacturers of e-vapor methods of using cannabis. WHATCOMBUSINESSALLIANCE.COM | 47
Marijuanareport: retail marijuana industry
“Call me Murph” services customers in the background at Top Shelf Cannabis, the first retail marijuana store to open in Washington on July 8 under management of investor John Evich (c.) and sole proprietor Tom Beckley (r.). (Photo by Travis Arket)
The youngster on the bike just inside an alleyway making a buy is not who you’ll find inside these tidy, basically-outfitted Whatcom County retail stores. “We see way less of the younger generation,” Evich said. “We didn’t expect our customers to be like this, 40 to 70 years old.” Nelson at 2020 said its customers fit the same profile. “Our customers are baby boomers, people from 30 to 70 years old,” he said. “We see doctors, lawyers, business people. The boomers remember their experience when they were younger, and they might use the products to relive those memories.” He said
that legal retail stores create safe and comfortable environments. The 2020 store, a former dilapidated auto repair shop on Iron Street, has been transformed into a simple, yet visually-appealing, faux-brick storefront tucked among neat homes in the Sunnyland neighborhood. Quality of the heavily-regulated product makes it reliable, another factor attracting consumers. Nelson pointed out that stringent regulations for processed products make anything that’s purchased in a retail store unadulterated, unlike some street purchases that contain add-ins. Both of the first-to-open stores counted heavy volumes of
CRAZY CANNABIS So many strains, so little time. One store, 26 different strains from six different suppliers. Another store, 43 strains. Given the competition for the seemingly bottomless grambag, the branding genii behind legal retail marijuana try to out-clever one another. From JuJu Joints to Snoop’s Dream, a signboard at 2020 Solutions tugs at the imagination. So, apparently, will some of the offerings: “Jack Herer Sativa: very upbeat, euphoric, giddy high. Spicy, and pine-scented.” How about a gram of Grape Ape or Grape Skunk? Purple Urkle? Or kill two birds with one stoned – smoke Cheesecake or Cookies ‘n’ Cream. Go all Crazy Carnival, or lay back in Sea of Green. And what does OG stand for? “Original Gangsta,” a sales 48 | BUSINESSPULSE.COM
Canadians and customers from Seattle, where supply was even tighter. Within just three days, Evich’s security team had checked off customers from all 50 states. As a producer, Rosellison sees her brand targeting not only everyone who smokes, she said. “I’m a fan of women, 35 to 60, high-end, professional, with expendable dollars. We started with a recipe for a good medical marijuana product and refined it. We want to create a beautiful product for our customers.” One factor defining the market is the cost of retail marijuana. Prices fluctuate day to day. Strains ran between $25-$28 a gram after about two months, and retailers expected that to go down once the inventory expanded to include outdoor growers, who have lower overhead. Depending on the availability, the retail price frequently is double or more than that of the street price. Evich has seen younger customers come into the store, but leave, unable to afford the product.
PROFITS, MONEY, AND SECURITY In the first 16 days of business, Top Shelf sent the state “in excess of $80,000” in excise and sales taxes. Operators at 2020 declined to discuss tax payments or sales revenue, but Nelson noted, “We are pleased that strong customer response has shown our business
rep said, joking. One label reads, “A very powerful sedative.” And the buying options can make you dizzy. Loose or pre-rolled. Vapor. Edibles. Or how about the way to smoke, spawning a merchandise industry that’s become popularly known as cannabiz. Choose from water bongs, bubblers, and pipes that are disposable, hand-blown glass, hand-carved wooden, glass blunt, solar-powered, or chameleon (the smoke inside turns different colors). Then there’s the grinder, the cigar roll, joint rollers, roller papers (flavored or normal). Screens for pipes, nug jars, a lighter or a torch. You can smoke cannabis packed into a tiny pipe attached to a key chain. Try this on for size: One store will even offer its logo-andslogan printed T-shirt. But not until it’s approved by the State Liquor Control Board.
model is financially sound.” As a revenue stream, both stores placed ATMs in their showrooms. Top Shelf rented space to the owner of the ATM, and 2020 purchased and installed its own. According to the Liquor Control Board, retailers reported $3.8 million in sales the first month. Tax revenues ran about $1 million. These figures came from about three weeks of sales by fewer than 20 retail stores. Sales doubled to $7 million in August, and were on track for about the same in September. By September 25th, sales topped $16 million, and excise taxes exceeded $4 million. The state’s legislature forecasted tax revenues of about $122 million from legal marijuana for the next twoyear budget. Brian Henshaw, City of Bellingham’s finance director, said that the excise and local sales tax payments go to the LCB, with a two-month lag before dollars trickle back to the city. He said tracking the fledgling industry, where “a long learning curve” is taking place at the state, presents challenges. A prevailing question: How
can the medical marijuana and the retail marijuana industries coexist, one taxed and the other not? Confidentiality about taxes paid by individual businesses will limit the public’s knowledge of business profitability to self-reporting. As a starter, Evich called an impromptu media photo shoot when he mailed Top Shelf ’s first tax payment to the state, and,at the 25 percent excite rate plus sales tax, that indicated about $300,000 in retail sales – a projection of approximately $5-6 million annual rate. And that’s one shop out of five in operation at our deadline time. When product is illegal on a federal level, banking cash becomes tricky. Banks showed widespread reluctance to handle money from marijuana businesses, because it leaves them vulnerable to charges of money laundering. So what do these green gold mines do with their cash? Both 2020 and Top Shelf Cannabis accept only cash at the point of sale, aided by the ATMs. Top Shelf found a financial institution in Whatcom County that would work with the business as a
beta test, of sorts. Management at 2020 declined to discuss their cash management system. On the flip side of warehouses of cash, imagine delivering a truck full of expensive marijuana to a retail business. Most suppliers receive cash on delivery. Top Shelf Cannabis picked up its firstday product in Bremerton, using a specially-retrofitted vehicle, and a security team riding along. Concerned about the Coast Guard as a potential enforcer of federal drug laws, they took the long way around the Olympic Peninsula in the middle of the night.
Welcome to the Wild, Wild West The Top Shelf Store has a secured entryway so delivery trucks can pull inside. Doors shut, product is unloaded. Risk is reduced. But there’s still that last-minute scramble for cash to pay for the product. While the first two retailers were not eager to detail their security systems, each acknowledged that they exceeded state requirements for security systems and procedures. “Since it’s not legal to sell
A POT-LOAD OF STARTUPS By Sue Cole Edibles, concentrates in oils, vaporizer pens, glassware. You’d expect to find these in retail stores. Nimble entrepreneurs are servicing the retail sector with related start-up businesses. How about an odor-proof and child- resistant marijuana bag? Or a Potbot, a virtual budtender robot that sells marijuana? Herbalizer is developing a vaporizer with a heating system to release active compounds in marijuana without creating smoke. SpeedWeed is a delivery service in Los Angeles, while Biological Advantage plans several products to enhance a marijuana plant’s photosynthesis. And don’t forget Leafly. The Seattle start-up reviews and rates marijuana strains and stores, and says it has
about 80,000 consumer reviews in its system. Add in marijuana mobile apps, even law firms specializing in marijuana business issues. Stay informed with the Marijuana Business Daily. Locate a retail or medical marijuana store with Weedmaps. Seattle’s Cannabis Training Institute offers online training in several aspects of running a marijuana business, and touts itself as marijuana education for industry professionals. Venture capitalists, looking for the next big thing, are beginning to fund these early adapters. With a legal cannabis market in the U.S. estimated at $1.5 billion last year, small businesses are jumping into the void big businesses are reluctant to fill.
A Trekkie-look and garish colors of handblown glass highlight the many types of pipes at Top Shelf Cannabis for smoking marijuana. The multi-hued creation came from Bellingham artist Whitney Harmon. (Photo by Mike McKenzie) WHATCOMBUSINESSALLIANCE.COM | 51
industry report: retail marijuana marijuana on a federal level,” Evich says, “the entire industry is somewhat vulnerable.”
MAINSTREAMING INTO THE BUSINESS COMMUNITY Once the giggling and the munchies are over, it’s clear this is a real business with real opportunity. Predictions about the eventual size and impact of the retail marijuana business in Washington are only guesses at this time. But the stores, growers, and processors want to be part of the greater Whatcom business community. “There has been so much stigma around this,” Nelson said, “We want to demonstrate that we can be responsible in this industry. We’re a legitimate business, part of this community.” Employees at 2020 routinely pick up litter around the business and even mow neighbors’ lawns. Rosellison hopes the state rules loosen up to allow a more competi-
52 | BUSINESSPULSE.COM
tive market. “It’s like we’re selling plutonium, not a plant,” she said. “We’re working really hard to change the image, and we plan to be a multi-million dollar company. People who attend WWU want to stay in Bellingham, but can’t find good-paying jobs. We are creating living-wage jobs for locals. It’s a golden opportunity for Whatcom County.” Evich and Nelson both touted living-wage jobs. Evich is working hard at building a clientele. “With 14 stores (licensed) in Whatcom County, how do we become the store people love and come back to?” Referencing the British Columbia marijuana industry, he said, “We went above and beyond what B.C. has done. It’s a reversal of the old days; now they’re coming to buy ours. Local is important to me. People here grow good product. There are so many opportunities.” Troy Lozano said he has been overwhelmed with the support of
the community, friends, and family. “We are proud to have made this an example of how these recreational stores can be operated with a professional touch. It’s an amazing opportunity and a lot of fun,” he said. Evich referred to family, also. “I am so proud of my family heritage,” he said. “I look up to all those before me who went past the edge to making a living while going ‘beyond.’ I hope that I am adding to it for future generations, and time will tell, just as it did with Prohibition.” Time will tell, too, how long it will be before marijuana, like liquor, will be sold as another popular and price-sensitive commodity at Costco and Walmart. But for now, it’s a rollercoaster market perfect for small, nimble businesses hoping to capture some of that green gold.
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entrepreneurism: coworking & pitch fest The coworking space at Invent, providing an incubator for startups with open areas, offices, and photo/video facilities, has doubled with its expansion and rebranding of the former BIG Idea Lab. (Photos courtesy of Invent)
Former BIG Idea Lab rebrands as Invent Bellingham incubator offers doubled space, expanded programming for entrepreneurial adventure By Business Pulse Staff
hatcom County is blossoming as a strong startup community. At its nucleus, The BIG Idea Lab in Bellingham, a small co-working and startup incubator, has provided a catalyst for inventiveness.
The name has changed. The direction and potential influence hasn’t. The Lab, as it was known by its staff (or sometimes just “BIG”), has rebranded as Invent. And, the BIG has gotten even bigger – double the space, bigger events, bigger name speakers. Basically, Invent provides rented space and programming by which anyone with a great idea and an entrepreneurial spirit can amble 54 | BUSINESSPULSE.COM
through the complex process of starting a business. An event lying directly ahead, for example, is the annual Startup Challenge – a 54-hour, startup
“Pitch Fest forced me to think through the other areas of the business model that I did not have polished earlier, or even realized I needed to work through.” – Startup presenter Jason Lindquist, FasterBids
exercise among entrepreneurs in collaboration with Business Pulse and other sponsors, Nov. 21-23.
Invent, nee The Lab/BIG, offers office space, high speed Internet, executive meeting rooms, introductions to angel investors and mentors, and bottomless cups of coffee, for a minimum $100 a month. The lab represents an environment where innovators can float ideas, fail, and receive encouragement to stand back up, dust themselves off and try, try again. Companies, entrepreneurs, and founders attempt to steadily build their businesses at Invent every day. Many have come and gone, some with results that have raised money, built creative teams, driven revenue and profits, and expanded into larger spaces of their own. The popular Bellingham Pitch Fest competition staged by Invent, for example, produced more than a dozen presenters this year, including:
The latest winner, Jordan and Griffin Gamble with Composites Recycling Services, and previous winners Chris McCoy with Kombucha Town (which opened in Bellingham this year); Mark Alway with Penumbra Tables (which has distribution in Las Vegas, its targeted market, and elsewhere), and David Jagoe with Drillers Dashboard (p. 57). Other entries (alphabetically): Josh Bennett, Nova Technologies; Adam and Raegan Brown, Oracle Extracts; Brad Church and Bowen Smith, TimeFly; Thomas Cote, SimplyRent; Noah Judson, CoinBeyond; Jason Lindquist with FasterBids; Collin McLoughlin, Uttana; Mark Minor, AppA; Richard Salvador, My Promotion Guys; Steve Stedman, Uzility, and Jim Stratman, Dwellory. FasterBids, for example, went from an idea in a Lean Entrepreneur class to a fullylaunched tablet-app software company. The CEO, Jason Lindquist,
found that running a business out of a basement bedroom wasn't conducive to… well, running a business. Faster Bids sells a mobile platform application for deal[left-to-right] Former employee Katie Berry, office/events ers and contractors coordinator Angela Cloud, and volunteer Lettie Walker manfor bidding on winage registration and operations on behalf of Invent at a dows and doors. Bellingham Pitch Fest. “Bellingham Pitch Fest forced me to Angela Cloud coordinates the think through the other areas of the office and events for Invent. “We business model that I did not have are home and resource to more polished earlier, or even realized I than 35 Whatcom County startups needed to work through,” Lindquist here,” she said. “It is so exciting to said. be part of a community of entrepreAlong with rebranding, Invent neurs, and to witness the evolution has expanded. Space doubled with of many thriving companies.” an additional 4,000 square feet conFor information about space or taining seven new offices that overparticipation at Invent, Pitch Fest, or look an extended view of downtown other activities, phone (360.312.7291) or Bellingham. The space also features visit www.inventcoworking.com. an equipped photography and videography studio, development servStaff at Invent contributed reporting to ers, three conference rooms, and this article. phone booths.
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entrepreneurism: inventing a business
Noah Judson and Skye Elijah, two of the co-founders of CoinBeyond that sprang from Startup Challenge last year, transferred Bitcoin for rent payment as their first official transaction here at Invent’s coworking lab.
Startup Challenge invites entrepreneurial-minded In 54 hours, participants build a business that turns profit By Business Pulse Staff
Capping off Global Entrepreneurship Week, a movement to inspire entrepreneurs around the world, Business Pulse joins Bellingham incubator Invent to host the annual Startup Challenge, Nov. 21-23. Participants will meet for the first time on a Friday, work with mentors, and finish on Sunday by pitching new businesses they created during the weekend. The public is invited to the final presentations Sunday, Nov. 23, in the Theater at Silver Reef in Ferndale, also featuring keynote speaker Zev Siegl, a co-founder of Starbucks and serial entrepreneur. The competitors in the Startup Challenge merge talents and forge teams, and then develop innovations in 54 hours. The teams must develop a business that generates revenue. Do you believe it could happen? 56 | BUSINESSPULSE.COM
It did last year, and some still continue to gain traction today, such as CoinBeyond in Bellingham. Skye Elijah, one of the three co-founders, had no more than an idea when she started. “I was given the opportunity to join a team, pitch an idea, and access the resources and network to build a successful startup,” she said. “When I signed up I didn't know exactly what idea to pursue, only that I wanted a Bitcoin startup.” CoinBeyond allows consumers to spend Bitcoin over the counter at the swipe of a debit card, and allows merchants to accept the transaction directly.. “Our team pivoted a few times during the (Challenge) weekend, while gaining insight from the event's incredible mentors,” Elijah said. “We
• • • •
came out with a vision of making Bitcoin easy to use for regular people, and a plan for how to do it. Less than a year after the Challenge, the company’s six-person team issued a private Beta release, and now, Elijah said, “…We’re making waves in the mobile payments industry.” The company’s first live transaction made payment on rent in Bitcoin for its office at Invent. “We owe a lot of thank-yous to last year's 54-hour Challenge and to Invent co-working for supporting the entrepreneurial community and helping us grow,” Elijah said. On Friday, Nov. 21, at 4 p.m. the entrepreneurs begin to work in the Invent lab downtown on idea creation, forming teams, and establishing a game plan. At 6:30 p.m. Sunday, Nov. 23, each team will pitch its business plan and weekend accomplishments to a panel of judges from around Whatcom County, each a seasoned entrepreneur. When the judges exit to debrief, Zev Siegl will speak to the audience about his experiences in entrepreneurialism. A former history teacher, he and two partners opened the first Starbucks store in Seattle in 1971, and he left as a vice president, six stores later, in 1980. Since then Siegl has founded Quatermaine Coffee Roasters in Washington, D.C., Peerless Pie in Seattle, and SocialBeesStrategy.com (originally BuckleUp). He has served as lead advisor for the Small Business Development Center (SBDC) of Southwest King County, working with more than 500 entrepreneurs and small business owners. He now works as an independent consultant with an emphasis on funding strategies. Registration for the Startup Challenge remains open until it starts at 4 p.m. Nov. 21. The cost is half-price for reregistration through Oct. 16. Event organizers also welcome business coaches to participate, and an audience for the final presentations. To register or volunteer, visit ww.inventcoworking.com.
Pricing for the Startup Challenge: $49 Early-Bird Participant through Oct. 16 $59 Student Participant $99 Participant from Oct. 17-Nov. 21 $20 on line/$25 at the door for Final Event/Zev Siegl, Nov. 23
entrepreneurism: the winning pitcher
One-of-a-kind product wins Pitch Fest Drillers Dashboard technology improves mining industry By Kimberly Harris
David Jagoe, a software technician, impressed a panel of judges with a $40,000 product and it might help his uncle’s company in Blaine with a market breakthrough for the mining industry. Drillers Dashboard, an instrument with a real-time data reporting software for a heart, won some funding for Jagoe Technologies Inc. at a recent Bellingham Pitch Fest competition staged by Invent, a co-working and startup incubator lab. Mike Jagoe started this business five years ago after many attempts to perfect his product, Drillers Dashboard V2.0. Jagoe came to the U.S. from South Africa more than 30 years ago, and he has over 40 years’ experience in global mining with two companies – starting as a contractor and working his way up to an executive position. His educational pedigree lies in a bachelor’s degree in mechanical engineering and a master’s degree in industrial engineering from the University of Witwatersrand
in Johannesburg. Now semi-retired, Mike Mike Jagoe, Inventor of the Jagoe works on Drillers Dashboard with his wife, Drillers Dashboard Susan, serving as bookkeeper, and his nephew, David, the Pitch Fest presenter, in charge of software development. The software provides real-time displays on a large screen, providing rapidfire information about the drilling as it takes place deep beneath the earth’s surface. Mike Jagoe likens the Drillers Dashboard to cruise control for cars. “When cruise control came out it gave people the option to get to a certain speed and maintain it,” Jagoe said. Similarly the Drillers Dashboard gives drillers and mineral miners up-to-the-minute, informed performance measuring. The product’s key features include:
WHATCOMBUSINESSALLIANCE.COM | 57
entrepreneurism: the winning pitcher
• • •
Graphical touch-screen that enables the user to read production performance data; Software-based database and reporting system that stores data in the Cloud; Zero-configuration global connectivity that sends and receives data with an iridium satellite network, and Daily drill reports that list shift start and end times, rechucking time, tube handling, and down time.
58 | BUSINESSPULSE.COM
This technology-driven information apprises miners of their work on the spot, takes the guesswork out of the equation, and increases productivity. “The communication tells how well the drill is digging,” Jagoe said, “and enables workers to compare data and replicate productive sessions with informed data.” This technology is in step with what Paul Moore of the online magazine International Mining referred to in a recent article: “Making the best use of available
data through better modeling and interpretation, combined with new technology to shed light on deeper ore bodies, are key factors in the current challenging mineral exploration market.” According to Mike Jagoe the Drillers Dashboard is the only instrument of its kind, and hence Jagoe Technologies Inc. has no competitors. Subcontractors build various component parts, and Mike and David Jagoe assemble the final product at the company’s facility. Mike Jagoe said that starting up a business is difficult, and that his “took many attempts” before giving the green light to the third major revision of Drillers Dashboard. The final product sells for $40,000. Jagoe Technologies markets through direct sales, and has sold 12 units since it began in 2009. As the company grows it will seek investors to increase its scale. “It’s a grind right now,” Jagoe said of the financial health of the business. “The mineral drilling industry, like all industries, has an ebb and flow, and right now the market is ebbing. Just one-third of drilling capacity is at work.” When an excess of minerals becomes available the drilling industry slows down. Mineral drilling bounced back from the GFC (great financial crash) in late 2009, early 2010. Since last year the industry has slowed to a standstill and has not picked back up. The August 2014 International Mining online newsletter reported on the SNL Metals and Mining Corporate Exploration Strategies study that stated, “….Global nonferrous exploration spending fell by 29 percent in 2013,” dropping to $15.2 billion from the $21.5 billion spent in 2012. Canada ranked as the top spender in exploration mining in that report – encouraging news for a company situated in Blaine, sitting on the border of British Columbia.
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Northwest Business Expo + Conference Special PROMO section
old onto your seat. Well, reserve one first, and then prepare for the most outstanding programming in the history at the annual Northwest Business Expo & Conference on Oct. 23 in the Event Center at Silver Reef.
The Whatcom Business Alliance plans to roll out at 2 p.m. its largest project so far in its 2 ½ years of providing a collaborative voice for
business success and community prosperity: A multi-option, original customized healthcare plan for businesses of 35-or-more employees, guaranteeing that premiums will be no more than notices generated under new Affordable Health Care guidelines – and in most cases, less. Sandwiched around that profound rollout, the WBA will unveil results of a commissioned impact study of the Cherry Point heavyindustrial area (11:30 a.m.), and build up to the Speakers Series (4 p.m.): Bob Pritchett, who was 2013 Business Person of the Year and
who sits on the WBA board of directors. He co-founded Logos Bible Software, which recently was renamed Faithlife Corp. His talk, “No Rules: Life without a Detailed Employee Handbook,” promises frank and non-traditional viewpoints about building and running a business and productive workforce. At Faithlife in downtown Bellingham, employee teams selfmanage their projects, deadlines, hours, personal time, and vacation. They make use of an in-house exercise facility, company kayaks and bicycles for lunch breaks, and operate under a four-word employee manual.
E-Cig Express’s CEO Timothy Furre and COO Ivan Furre set the bar high in the E-cigarette industry. Providing customers with above-excellent standards and consumer experience, the company has grown a massive e-commerce site and popular Bellingham storefront (plus Seattle and Lynnwood) in this booming industry. The Furre brothers believe that every consumer should experience freedom from harsh chemicals and offensive odor in cigarettes, as well as tar and ashes. With 1000s of flavors to choose from, their highlytrained staff and their extensive product knowledge, the products available at every price point, and a price-
match guarantee, E-Cig Express has the perfect solution to all of your E-Cigarette needs. An extensive expansion plan, set to take place in fall 2014, adds excitement to the Bellingham storefront. The addition of a new bar featuring multiple labels of local microbrews and fine bottled beer, tasty snacks, and a billiards table, will provide a perfect setting to enjoy your vapor flavors. Visit ecignorthwest.com for complete coverage of E-cigarette knowledge through articles, recipes, and a breakdown of the natural ingredients in vapors that come from the best suppliers all over the world.
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The Northwest Jobs Alliance (NWJA) promotes the growth of family wage jobs in the context of sound environmental practice. Composed of a crosssection of the community, the NWJA is a non-partisan organization that focuses on supporting economic vitality and growth associated with the Cherry Point industrial area.
The NWJA: • Encourages informed public dialogue. • Engages in constructive dialogue with interested groups, individuals and political and civic leaders. • Advocates for a strong industrial job base before appropriate governmental bodies and public forums. • Opposes those who seek to do away with Cherry Point industry.
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Philanthropy: junior achievement
Children of all ages learn through Junior Achievement mentoring. (Photos
courtesy of Junior Achievement)
Young minds, bright futures Junior Achievement equips students for financial literacy By Pam Bauthues
unior Achievement of Washington sustains donor funding to employ kids with relevant business skills for a global economy. Local businesses make it happen.
Remember the first time you learned to balance a checkbook? Weighed insurance options when you had your first car? Made a personal budget when you lived on your own the first time? How many times did you have to learn from your financial failures and missteps? Today, thanks to Junior Achievement (JA) many youngsters learn such skills, and more, before they graduate from high school. JA equips students in the classroom for financial success—before they’re forced to learn those lessons 76 | BUSINESSPULSE.COM
the hard way. This international nonprofit organization works to teach Kindergarten through 12thgrade students the basic principles of the American business and economics systems, and demonstrates how to apply them—both immediately, and in the future.
“When equipped with the tools showcased in our programs, youth will be more apt to make better money decisions.” —Julie Speck, regional director for Whatcom, Skagit, and Island Counties
According to JAWashington. org, Junior Achievement will reach more than 100,000 K-12 students
this year in the state. JA Worldwide (headquartered in Boston) and JA USA (Colorado Springs) provide support for statewide programs. In Whatcom County, all seven school districts participate. Of 54 Whatcom County schools, half have classrooms that host the JA programs, according to Julie Speck, the regional director covering Whatcom, Skagit, and Island Counties. “In the last two years we have served more than 5,000 Whatcom County students each year,” Speck said. “We have about a 3–4 percent increase each year.” This year, the program is on a pace to reach more than 5,500 students in Whatcom County, and nearly 10,000 in Speck’s region. Junior Achievement receives support from financial donations and volunteers. Funding comes through four main sources: private donations, corporate sponsorships and donations, local grants and foundations, and special events. Locally, a volunteer board of directors comprises representation from three business sectors: financial industries (Moss Adams, KeyBank, Peoples Bank, US Bank, Wealthmark Financial LLC, Whidbey Island Bank, Banner Bank, and Washington Federal), construction (Barkley Company), and private companies (TAG, PayneWest Insurance, ManPower, LTI Inc, and Whatcom Environmental Services). Speck said more than 40 additional businesses financially support local Junior Achievement efforts. Three major events raise funds locally each year. Twice a year a “Celebrate JA Breakfast” takes place—one in the fall in Skagit County, and one in February in Whatcom County. Invited guests hear local students share their JA stories, and then an inspirational speaker. “It is a good awareness piece and gets the community engaged with our programs,” Speck said. In mid-spring, the JA Bowling Classic engages companies in bowl-
ing for fund-raising by sponsoring lanes and donating valuable door prizes. Additionally, JA of Washington hosts a statewide auction each September in Seattle. Attendees and donated items from the area generate funds into Whatcom County’s operations budget. Junior Achievement also thrives off volunteer support; Speck is the only full-time employee in the region, and volunteers run the classroom sessions. Speck said, “JA volunteers create within the classrooms an environment that utilizes teamwork and collaboration.” More than 60 area businesses provide volunteers, and students volunteer from Whatcom Community College, Western Washington University, and Ferndale High School – all to teach in local classrooms. Among other lifelong skills, JA strives to teach financial literacy. “That’s the ability to make smart choices in economic situations,” Speck said. “[It] means knowing the difference between something as simple as a need vs. a want, or how and why to save your money in a bank, and how to avoid getting into ‘bad’ debt. When equipped with the tools showcased in our programs, youths will be more apt to make better money decisions.”
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Business box score: Top executive: David G. Moore, president, Junior Achievement of Washington Start-up date: Nationally, 1919. In Washington, 1953. Growth-rate: From 2008– 2012, 10% funding increase year-over-year. Programs increased by 3–4% a year.
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Philanthropy: junior achievement
The international organization starts with children like these at the elementary school level, and benefits students at every grade level through high school.
According to the website JA.org, six core values shape the organization’s actions: • Belief in the boundless potential of young people. • Commitment to the principles of market-based economics and entrepreneurship. • Passion for what we do and honesty, integrity, and excellence in how we do it. • Respect for the talents, cre-
ativity, perspectives, and backgrounds of all individuals; • Belief in the power of partnership and collaboration; • Conviction in the educational and motivational impact of relevant, hands-on learning. “The youth we reach will be served if they understand that this is a global economy,” Speck said, “and we show them how JA and
Elementary students relished their experience Some excerpts from a speech given by a Whatcom County 2nd grade student named Kaitlyn who participated in Junior Achievement: “One of the things I learned was how community workers help the community, like how firefighters fight fires and police officers keep us safe. I also learned that taxes are very important because taxes help open new buildings like schools. They are also important because some jobs get paid with taxes and other jobs get paid by their boss.” 78 | BUSINESSPULSE.COM
“The thing I like best about JA is how fun it is and how we get to be an active part of the learning. We only get JA once a year, and I wish it was more. All kids should have JA because it really helps you to understand all of the units we are studying in school, so thank you very much for giving kids like me JA.”
business relate to their studies in all their subjects. It will help make the students more informed consumers and better producers.” Since JA’s inception, all programs have focused on three pillars of success: entrepreneurism, workforce readiness, and personal financial literacy. Further, JA also teaches “soft skills” needed to enter the job market. Speck said, “Technology is causing students to miss out on the basics such as learning the importance of eye contact, a firm handshake, and simple communication skills.” In elementary school (K-6) students learn economic concepts and the relationship between school and future success. Middle grades (7-8) focus on staying in school, learning and applying economic concepts related to the work world, financial literacy, and entrepreneurship. Finally, the high-school programs help students become productive citizens and workers. “Middle-school and high-school programs are designed to be more real-world applicable,” Speck said. Fifth-graders learn about STEM skills through the JA “Our Nation” program in which students look at different types of careers and take self-knowledge assessments. Speck said, “A highlight from that program is that the jobs that those students may be working in the future aren’t even created yet.” Junior Achievement relies on community to gather support and awareness through word of mouth, public service announcements on local media, and social media rally participation. An Instagram campaign, Facebook and Twitter frequently acknowledge volunteers and donors. The board and volunteer networks and the local Chamber of Commerce create connections, as do presentations at local service clubs. To learn more or to participate, go to JAWashington.org, and help teach a youth how to balance a checkbook or write a personal budget.
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Personally Speakingâ€Ś with
Wes Herman Photos courtesy of The Woods Coffee by Jessica Stuart, and Lyle Jansma Design/AeroCapture Images
Wes Herman, co-founder and CEO of The Woods Coffee, tests a sampling of beans during a roasting. 80 | BUSINESSPULSE.COM
Having started as an in-home study project by four teenagers and their parents, The Woods Coffee spreads throughout Whatcom County as one of the most outstanding business growth stories around. When they moved to Lynden 21 years ago, Wes and Diane Herman “didn’t know a soul here.” They had traveled through whenever visiting his grandparents in British Columbia, and thought it would be a great place to raise a family, and for Wes to put his cabinet-making skills to work. From that unlikely backdrop, the Herman family methodically planned for scalable success. The Woods comprises 14 coffee locations, and its own bakery, roasterie, and distribution center. And, with Skagit County locations next, there’s no end in sight. In a conversation with managing editor Mike McKenzie while they nursed drinks from The Woods at Barkley Village, Wes spoke about how the company’s success has been no fluke surprise…on developing loyal employee retention…and of converting a condemned building – a site that others turned down and that experts called a certain failure – into one of the most storied coffee shops in America at Boulevard Park. The roots of it all began, ironically, in one of the world’s best producers of specialty coffee…. My parents were missionaries. I was born in Ontario, Canada, then lived in Colombia, South America, until age 7. Then we moved to Los Angeles.
EDUCATION I’m not formally educated past high school. One of my greatest days was graduating from high school in L.A. I like to call myself a “rogue scholar!”
A SCHOOL PROJECT We chose to home-school our four children (and) take them to an educational place beyond the three R’s. When they were all teenagers at the same time we created a project – to build a business on paper, and then go execute it. This is how The Woods Coffee was born. We developed a business, marketing, and branding plan and asked ourselves, “Could we execute something that would become stable and productive? Something that
could be passed from one generation to the next?” It was a high school project, essentially.
“People sometimes think you just open a business and – surprise! – it’s successful. It doesn’t just happen. From the very start we planned for success….We’re not scientific, and it’s not conventional wisdom.” THE FIRST ONE I was traveling through Algonquin, Illinois, and saw a Starbucks with an oval drivethrough sign, and an alley to the
drive-up. I had never seen that, even on the West Coast – a sitdown/drive-through in a strip mall. And, the only local example around here of a sit-down/drive-through was Starbucks at Sehome. In 2001 we had decided to start our coffee shops, but Whatcom County lacked retail space for what we wanted to do. One day at Bender Plaza, on the developing northeastern side of Lynden, I saw a location that was exactly the same configuration as what I’d seen in Illinois. The City of Lynden gave us the OK in 2001, and we opened in February of 2002.
AGAINST THE ODDS There’s no reason we should ever have survived. Highly-saturated market, new brand, an in-the-red start-up, opening two stores in the first six months with a wife and four teenagers. We also owned a quick-change oil service that helped keep us afloat. WHATCOMBUSINESSALLIANCE.COM | 81
The before-and-after of the City of Bellingham condemned building in Boulevard Park that The Woods Coffee converted, against all ‘expert’ advice, into a year-round hit that has become one of the most renowned sit-down coffee shops in America. (Photo courtesy of AeroCapture Images)
82 | BUSINESSPULSE.COM
SUCCESS NOT SURPRISING
People sometimes think you just open a business and – surprise! – it’s successful. It doesn’t just happen. From the very start we planned for success. Not for just one store. We asked questions along the way: How many is too many? Why there, in that location? We strategically planned how the stores would look, what sales would be, every detail.
We put up our own money to rehab the building. It took a year to get it open in 2007. I’d brought in coffee experts from all over to get their opinions. They unanimously predicted, “Total failure…. Doomed… Only good for three months of the year….It’ll never work.” Conventional thinking was that the park was seasonal, and we’d only have business in the summer.
WITHOUT FORMAL BACKGROUND We’re not scientific, and it’s not conventional wisdom.
EXAMPLES? Boulevard Park. Lakeway. Conventional wisdom said that Lakeway would never be successful. Restaurants had failed there repeatedly. Difficult access, too hard to get in and out. We thought it was perfect. Who wouldn’t come there? We serve a huge, busy, and high traffic area. As soon as it opened it performed well, and it will be one of our top stores this year.
BOULEVARD PARK – SYMBOL OF VISION We’re in a building that was condemned. It was a pottery studio and some junior college classes were held there. Then it was a workshop, and then it stood vacant for a few years. The City of Bellingham put out an RFP (Request For Proposal) on it, and approached six local businesses, and they all said no. It was only happenstance that I even knew about it. I bumped into somebody who said to me, “Hey, did you see the article in the paper about the city leasing that building on Boulevard Park?” We knew immediately we wanted to put a coffee shop there. We drew up plans, submitted a bid, and became a unanimous choice to lease it.
“I’d brought in coffee experts from all over to get their opinions. They unanimously predicted, “Total failure…. Doomed… Only good for three months of the year….It’ll never work.” When we leased it, the park averaged a few cars a day in the parking lot during winter. Now it’s full even in February.
WHY’D YOU BELIEVE IN IT? My California experience. I knew what food service businesses were like that sat on the Pacific Ocean. The Woods at Boulevard Park is iconic. It’s become one of the most talked-about coffee shops in the world, with our building and that view. It’s been written up in all kinds of magazines.
coffee business – are grateful to Starbucks. They brought this industry credibility, and made it possible for the rest of us. I don’t mean this as any sort of reflection on them or anyone else when I say what we’re about. It’s just how we work to differentiate ourselves. First of all, we don’t have customers, we have guests. With customers, you simply have an exchange of goods and services, and a finished transaction. We intentionally care about each one of the guests we serve. We build relationships. Guests have entered into our space, and we make them feel at home. We encourage them to stay as long as they like, and don’t care how long or where.
WE DRINK A LOT OF COFFEE I’ve seen research that shows that we’re in the top three counties in North America with the most coffee shops, per capita. We’re No. 4 in coffee consumption, per capita, behind only Alaska, Seattle, and San Francisco. Lancaster County, Pennsylvania, has two-and-a-half times the population of Whatcom County, and it has a handful of coffee shops. We have more than 60.
LEADING THE WAY The Woods has 13 full-service shops, and one in Haggen Sehome. Starbucks has seven full-service, and several in retail spaces. Cruisin’ Coffee drive-through has
YOUR TYPICAL VIEWPOINT We’re constantly looking for ways to say yes. Ways to make things happen.
GUESTS, NOT CUSTOMERS First of all, we – all of us in the specialty WHATCOMBUSINESSALLIANCE.COM | 83
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eight. These three dominate the market.
MARKET SHARE? We never look at, study, or count the competition’s business. We simply focus on what we do, and do it the best that we possibly can. We are intent on building a community identity.
COMMUNITY We created the $100 limited edition cup of coffee to help combat human trafficking, and we’re working on another initiative for that cause. Kidstown is a companywide effort where each store sponsors a child from a Romanian orphanage. It’s really nice to see each of our staff contribute. We’ve developed partnerships – Rebound, Young Life, the Boys & Girls Clubs. Our day-old bakery items go to schools for kids who need an afternoon snack before continuing the day in tutoring. Our Viking Blend coffee gives back a dollar a bag towards WWU scholarships. We’re also a Green Company of the Year (2008) and make strong commitments to community environment. We branded the Compost-a-Cup with a green band around the bottom as a reminder that our cups and paper products are compostable. Lynden Christian School benefits from recycling our cardboard. We use recycled and repurposed wood and materials when we build.
This year The Woods began roasting its own coffee for the first time. These roasters sandwiching owner Wes Herman operate out of the company headquarters in Lynden, along with the in-house bakery, and one of the 14 coffee service locations.
family-owned hamburger chain in the U.S. We focus on simplicity, and doing it extremely well to create a place everyone wants to go to. That’s how we set up our supply chain – our own distribution center, our in-house bakery, and now in-
“We’re constantly looking for ways to say yes. Ways to make things happen.” house roasting, barista training, and cupping lab.
LEAN OPERATIONS We constantly build efficiencies into our back-side operations to overcome the ever-increasing costs of doing business. We’re proud of that, and as a result we haven’t raised prices in four years.
We print a scripture verse subtly on the bottom of our cups, John 3:16. We got the idea from In-NOut Burger, a company I grew up enjoying in California. Forever 21 also uses the same scripture on their bags.
We’re up to 170, counting our bakery, roasting, and distribution center. We develop employees in a deliberate way: with a goal of retaining full-time. It’s not the Abercrombie & Fitch model of turning over loads of part-time workers. We offer comprehensive health care with an HSA (health savings account), along with a 401K starting in 2015. Pretty unusual for a coffee company.
BUSINESS MODEL We often banter about being the In-N-Out Burger of the coffee world, modeled after the largest
We develop a smaller, tighterknit group that builds relationships with our guests. And we build a team in our stores, and they rely on each other.
BARISTA IS KEY We learned quickly, and easily identified one of the main ways to get a guest to come back – develop great baristas.
PROPRIETARY TRAINING PROGRAM We have our own curriculum and training tools, and they’re unique. The program is first-rate, and mind-blowing! Our daughter Kelly oversees it. We developed and self-published a fascinating field guide, a step-by-step training booklet that is light years ahead of the curve.
PAST EXPERIENCE My background was woodwork. When I got out of high school I wrote down four goals I wanted to reach by age 21: One, be married. Two, own a house. Three, own a business. Four, own a Mercedes Benz. I made all of them. When I was 18 I learned the custom woodworking business, starting out on the glue-up bench in a cabinet shop. When I was 21, I bought that cabinet shop, where I did work for many Hollywood stars, WHATCOMBUSINESSALLIANCE.COM | 85
The Woods Coffee began as a family home-school project when the four Herman children all became teenagers: (left to right) daughters Natalie Noon and Kelly Spiker, Diane and Wes Herman, and sons Taylor and Connor Herman.
Proudly Serving The Community for 67 Years
Traditional T raditional Service Ser vice M tii M d N d Meeting Modern Needs.
Lynden â€˘ Ferndale 360-354-4471 86 | BUSINESSPULSE.COM
Proudly Serving Whatcom, Skagit, Island and Snohomish Counties
Mount Vernon 360-424-4471
At the downtown Flatiron Building location, Wes Herman talks business with the store manager/barista Sarah Garrison (center) and his daughter Kelly, who serves as the company’s chief operating officer.
and a lot of bigwigs.
CUSTOMER INSIGHTS We had no coffee business background. We were customers, and we knew what we saw, and we believed we could do it better. But we learned fast on the fly. Our first espresso machine arrived the day before we opened our first store. We were a family with passion. Kelly was 17 at the time.
FAMILY INVOLVEMENT Kelly is a wife, mom, and executive – our chief operating officer. Natalie, the oldest, runs special events. Our son Taylor builds out all of our stores and oversees all maintenance. Our other son, Connor, is in the insurance business. My wife Diane is a wrangler of six grandchildren these days, and once a week she delivers bagels.
LEARNING ABOUT COFFEE Growing up in Colombia gives me some street cred. But leaving there at age 7 doesn’t exactly make
me a coffee expert. It’s been an educational process for me over the last 13 years. Here’s what our business boils down to: We serve coffee and build relationships around it. Across so many cultural barriers, the coffee culture connects people and makes
“We’re not limiting how many stores we’ll have eventually, but I’d say this: If we had 50-to-100 of The Woods Coffee shops during the next X-number of years, it wouldn’t surprise me.” them feel really good, every single day. My favorite thing is when I walk into one of our stores and meet someone I’ve never met before. I love the business, more so than ever. We create a diverse, international experience, yet we’re local enough to actually see the effects of
PLANNING CONTINUES We had a meeting just today about what our future projections are, our goals over the next 10 years, and how to achieve them.
MAIN GOAL? Continue our expansion.
NEAR FUTURE? We plan on opening stores in Skagit County, possibly one this year. In terms of coffee shops, Skagit County, with its broadened demographics, is in a similar place as Whatcom County was 12 ½ years ago when we started.
BEYOND SKAGIT? We knew from the outset that we wanted to create a family legacy, and that we don’t want to franchise it. We’re not limiting how many stores we’ll have eventually, but I’d say this: If we had 50-to-100 of The Woods Coffee shops during the next X-number of years, it wouldn’t surprise me.
Whatcom Women in Business
Professional Woman of the Year Six finalists cite community-building, relationships, mentoring as key By Susan G. Cole
he six finalists for the 32nd annual Professional Woman of the Year personify the mission of Whatcom Women in Business (WWIB). They are expert networkers, combining leadership skills with a laser focus on their chosen professions.
This year’s WWIB awards banquet, which includes a silent auction, will be held Oct. 28 in the Event Center at Silver Reef. The pronouncement of the Professional Woman of the Year highlights the evening. Go to www.wwib.org for ticket information. The finalists (who, by rules to avoid possible conflict-ofinterest perceptions, do not belong to the WWIB): 88 | BUSINESSPULSE.COM
ensuring that customers (including employees) feel cared-for like family and have a memorable experience. She coordinates Lakeway Inn’s participation in the community, including fundraising galas, culinary showcases, and inspired events like the Seattle Seahawks Lombardi Trophy viewing party. Spare time includes serving on community boards and travel.
Cage diving with great white sharks. Marrying couples as an ordained minister. Locating lost or missing persons with Whatcom Search & Rescue. Christine Jenkins’ life outside her job as the director of sales and marketing for the Best Western Plus/Lakeway Inn & Conference Center has been packed full of adventure. She has been promoting Whatcom County tourism and hospitality for more than 15 years. Christine manages an all-women work team with singular focus in coordinating meetings, events, and lodgings for groups customers:
The owner of Gym Star Sports Center in Ferndale found her passion early: As a 5-year-old, her gymnastics classes sparked a lifelong love of that demanding sport.
Success followed, first as a top gymnast for Sehome High School, and then with an athletic scholarship to San Jose State University. The challenge of sport and competition turned into a career for Carolyn – coaching gymnastics clubs on the East Coast. After returning, she launched the GymBus that served Whatcom and Skagit Counties for 11 years, taking gymnastics instruction to day care centers and preschools. In 2005 she and her husband Joe opened Gym Star Sports, offering recreational gymnastics programs and competitive teams. A year later they expanded with Shooting Stars Preschool. Gym Star Sports grew into a custom-built space in Ferndale, staffed by 20 coaches and teachers. Carolyn will open a dance studio soon. Carolyn described herself as a “20-year overnight success.”
The law has been a constant in Paula’s life. She is a partner at Brett Murphy Knapp McCandlis & Brown. As a Gonzaga Law School graduate, she ran a successful firm for 16 years, specializing in family law. She moved into personal-injury and wrongful-death practice when she joined BMKM&B.
Along with work as a trial attorney, Paula handles company management for the firm with 19 employees and three offices. She serves as Whatcom County Bar Association President and as a commissioner pro tem for the Whatcom County Superior Court. Paula also is a board member of Law Advocates, a nonprofit providing free legal help for low-income individuals and families facing noncriminal legal problems. Another program she’s involved in, Street Law, offers legal support to low-income people on a walk-in basis. Paula has volunteered with the Bellingham Bay Marathon, Skito-Sea, Bellingham Fit, and Mock Court Judge.
(Continued on page 67)
WHATCOMBUSINESSALLIANCE.COM | 89
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about Mayor Linville: She knows all about mid-century furniture and art, such as she displays at a booth at the Penny Lane Antique Mall.
Mary Kay Robinson
Before entering politics and becoming Mayor of Bellingham Mayor after many years as a state legislator, Kelli spent 16 years as a speech pathologist in the Bellingham Public School District. A fourth-generation Whatcom Countian, she used her involvement in the Bellingham Education Association to launch a career in politics. Kelli served in the state House of Representatives for one term, then lost her bid for re-election. Undaunted, she ran again and won, ultimately serving Whatcom County for 17 years. Widely-recognized for her fair and independent voice, Kelli’s issues included economic development, job creation, government accountability, social justice, and funding for community projects. She won the mayoral election in 2012. She stated that she is proud of strong and effective working relationships she has built with other local governments, Whatcom County and the Port of Bellingham. Her community service throughout 20-plus years of public service spans the Washington Women for Commercial Fishing, the Rainbow Center Advisory Board, the Mt. Baker Theatre Board, and the Chuckanut Health Foundation board. One more little-known fact
A broker at Windermere Real Estate/Whatcom County, Mary Kay holds a music degree from the University of Wisconsin and started out in banking, where she said she learned the value of customer service, networking, and developing employees to achieve sales goals. Her emphasis on profitability and training eventually led back to her musical roots when she became executive director of the Whatcom Symphony Orchestra. Under Mary Kay’s leadership each concert was analyzed as a separate business, a new way for the orchestra to look at programs and overall finances. She partnered with Western Washington University to create a fairy-tale workbook, which enhanced the learning experience for children attending the Symphony’s Hansel and Gretel concert. Completing the first Bellingham Bay Marathon, Mary Kay raised funds for a youth music, convincing the Bellingham Herald to publish a weekly article about her training that raised awareness of the Symphony Orchestra and broke all fundraising records for the organization.
Marketing is Marissa’s forte. Owner of fifthonsixth inc, a Bellingham full-service marketing and media buying agency, she recently created The Crossing Guide magazine. This free travel and arts publication, available exclusively on the Web, promotes cross-border tourism and commerce between the lower British Columbia mainland and the area stretching from Blaine down to Snohomish County. Marissa developed her marketing chops early, rebuilding the Foothills Chamber of Commerce when she was just 21, then moving to director of marketing/events for Ski-to-Sea. Through her agency she has created branding, public relations, and advertising campaigns. She marries her appreciation for the arts with her support for downtown and the waterfront as a City of Bellingham Arts Commissioner. Her participation in Leadership Whatcom leverages personal and business relationships for the growth and improvement of her community. Marissa promotes creative ideas – such as an upcoming Northwest Senior Living Expo, and Handbags for Housing.
Photos courtesy of Dawn Matthes Photography, Peter James Studios WHATCOMBUSINESSALLIANCE.COM | 91
Whatcom Business Alliance Fostering Business Success and Community Prosperity
The LANGUAGE EXCHANGE Jay Stover, president of the Language Exchange, announced Clare Tatarsky as project manager in Clare Tatarsky the Translations The Language Exchange Group, moving over from Interpreting Scheduling Dept. Translations Group transfers written material from one language to another. Jaye Stover is president.
VSH CPAs The company announced two promotions: Kari Doss (WWU ’11)) and Shianne Mattox (Seattle Pacific ’11) to Tax Senior.
John Herford Peoples Bank
Matt Kok Peoples Bank
John Herford retired from the Investments LPL department and Matt Kok from Lynden joined that team, as announced by the LPL group’s manager and bank VP, Israel Thomas Jacob. Herford spent 20 years working with Peoples clients. Kok has lived in Whatcom County 16 years.
VSH AND PEOPLES Tristan Hurlbert from VSH CPAs and representatives of Peoples Bank will present “Is Your Business Fraud-Proof?” at a breakfast forum Oct. 16, 7 a.m., at Fox Hall in the Hampton Inn. Hurlbutt is a forensic accountant specializing in inter92 | BUSINESSPULSE.COM
Member News nal fraud detection and prevention. A business fraud victim and law enforcement officer will participate on a panel.
PEACEHEALTH ST. JOSEPH FOUNDATION Anne Rasmussen has been named executive director for the PHSJMC Foundation and the Whatcom Hospice Anne Rasmussen Foundation. She Peacehealth St. Joseph Foundation has served both foundations almost two years as director of development for major gifts, and will oversee day-to-day ops and development of relationships with board members and key donors.
RICE INSURANCE Keith Wallace, an agent and principal of 24-plus years, joined the advisory committee of the Washington Keith Wallace Health Benefits Rice Insurance Exchange, which is responsible for the creation of Washington Healthplanfinder.org, the online marketplace for individuals, families and small businesses to find, compare and enroll in qualified health insurance plans. Wallace also was installed as president of the Northwest Chapter of the NW Washington Association of Health Care Underwriters (NWAHU), a D.C.based organization that represents more than 200 Insurance professionals from South Seattle to the Canadian Border, and 1,000 nationwide.
WECU® Wayne Langei retired after 41 years as president/ CEO, and Jennifer Kutcher succeeded him. She has been with WECU® 16 Wayne Langei years, and moves WECU up from executive VP/Chief Lending Officer. Langei is staying on until January 2015 as a consultant to Kutcher. Under Langei, Jennifer Kutcher the institution WECU grew from three employees and $1 million in assets to 330 employees and over $1 billion in assets, serving more than 73,000 members Shonda Shipman and 11 branches. WECU Outside consultant Gene O’Rourke & Assoc. helped the WECU® board in the leadership selection and transition. Shonda Shipman, who recently moved from Public Works Financial Services manager in Whatcom County to the Whatcom Transit Authority, has joined the volunteer WECU® board’s Supervisory Committee.
PORT OF BELLINGHAM A worldwide industry-leading sail loft manufacturing company, UK Sailmakers, has relocated its independently-owned and -operated Northwest office to Bellingham Squalicum Harbor from Anacortes. It has a related location in Sidney, B.C, Canada. The two will produce 99 percent of the company’s lofts,
UK Sailmakers, one of the world’s largest sail loft manufacturers, has relocated at Squalicum Harbor. Owners Stuart Dahlgren (l.) and his wife, Joy, moved their independently-owned business from Anacortes, and hired former Bellingham sailmaker Dave O’Connor (c.) as manager. (Photo courtesy of the Port of Bellingham)
and provide servicing. Dave O’Connor, who started in sailmaking during the 1980s here with Staaf Sails, returns to manage the Bellingham location for owners Stuart and Joy Dahlgren. UK Sailmakers has more than 50 lofts internationally.
Financial Plan Inc. After 17 years in downtown Bellingham, CEO James Twining announced the company has moved into the Barkley Company complex. All contact information remains unchanged. Additionally, Nathan Twining stepped into an advisory role, and Twining said he plans to add additional advisers and support staff during the next year. Financial Plan, founded in 1984, is one of the top fee-only Registered Investment Advisors (RIA) in the state, earning national attention in Investment News for the ways the company utilizes technology.
NEIGHBORHOOD MORTGAGE Ken Seal has become the first mortgage professional in the state to achieve the status of Certified Reverse Mortgage Professional
(CRMP). He has 11 years in the specialty, and 25 years in financial services. The certification comes after a rigorous Ken Seal exam and backNeighborhood Mortgage ground check. Just 81 individuals hold the CRMP credential in the U.S. Reverse mortgages enable homeowners age 62 and older to access a portion of their available home equity.
WWU Craig Dunn was named to serve a two-year term as dean of the College of Business and Economics, as announced by Provost Brent Carbajal. Dunn has been interim dean the last year. The college will begin a national search during the 2015-2016 school year. Previously, Dunn was associate dean/director of graduate programs at the College of Business and Economics, starting at Western in 2005, and he also is an associate professor emeritus of San Diego State University.
LOGOS/FAITHLIFE Faithlife Corp is the new official company and brand under which Logos Bible Software (the former company Bob Pritchettl name) will conFaithlife tinue its worldwide marketing of computer-based Bible study programs. Under the expanded reach of Faithlife, according to a blog by President/CEO Bob Pritchett, will offer “a broader line of products and services…apps, websites, digital content…with the same goal – more and better Bible study (as a) leading provider of digital content and tools for Christian churches.” Faithlife, No. 22 on the Whatcom Top 100 Private Companies list with more than $40 million in sales last year, has grown to nearly 450 employees, nearly all in downtown Bellingham.
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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 receives national attention. He recently became a contributor to The Wall Street Journal.
Trying to fight climate change while hopping on one foot
f someone asked you to perform a task while hopping on one foot, you might protest, especially if the hopping made the task more difficult. When it comes to climate change, however, Governor Jay Inslee is asking Washington residents to do exactly that.
Earlier this year, Gov. Inslee said, “The toll of carbon pollution continues to mount and with remarkable consequences.…It is imperative we act now to put policies in place that will halt the damage.” He repeatedly calls the effort to reduce carbon emissions a “moral” campaign. With so much at stake, we would expect the Governor’s policies to be as serious as his call to action. That simply isn’t the case. The policies that the governor wants have a long history of failure elsewhere. Worse, the governor 94 | BUSINESSPULSE.COM
proposes arbitrary limits on the most effective elements of his own proposals, which, like hopping on one foot, make it harder to reduce carbon emissions.
Gov. Jay Inslee advocates a policy called “cap-andtrade” to reduce carbon emissions, claiming it will guarantee we can meet the state’s carbon reduction targets. That, however, ignores virtually all experience with capand-trade and carbon reduction. He advocates a policy called “cap-and-trade” to reduce carbon emissions, claiming it will guarantee we can meet the state’s carbon reduction targets. That, however, ignores virtually all experience with
cap-and-trade and carbon reduction. Europe is the most prominent example of a cap-and-trade system designed to cut emissions. The effort failed to meet the promised targets. Indeed, the vast majority of reductions occurred before the year the system was adopted (1997). That failure continues today. The Secretary of State for Energy and Climate Change in the United Kingdom recently admitted that Europe’s cap-and-trade system doesn’t work, saying it needs “ambitious and urgent reform.” That’s because politicians handed out free carbon permits to special interests. Cap-and-trade has also failed in the United States. The carbon capand-trade system in the Northeast, known as RGGI (Regional Greenhouse Gas Initiative) has failed to cut emissions, according to recent analyses. The Northeast’s emissions trends matched the nation’s almost exactly. Despite these failures, Gov. Inslee says this is the system he wants – not because it is effective, but because it is consistent with an
ideological approach that puts politicians in charge. Ironically, the governor recently announced he would even seek to limit one of the few elements of cap-and-trade that does work. In every carbon cap-and-trade system, companies get credit for funding carbon-reducing projects, even if they are outside the company. The environment doesn’t care, for example, if a company reduces its own energy use, or funds a project to capture methane gas from landfills, that would otherwise go into the atmosphere, and generate energy. The Inslee Administration, however, proposes limiting that kind of investment to only 10 percent of emissions reductions. Why? They argue it can be difficult to verify the impact of these investments. They note investments must be “additional,” reducing emissions that would not have otherwise been reduced.
These, however, are reasons to make sure such carbon-reducing investments are effective, not to limit them. The state should allow – indeed encourage – every effective approach to carbon reduction.
The environment doesn't care if a company reduces its own energy use (or) captures methane gas from landfills… and generates energy.
Imposing arbitrary limits, based only on the number of fingers on our hand, shows a lack of seriousness about cutting carbon emissions.
The only reason to set such an arbitrary limit is that the Governor wants to address climate change in a way that is ideologically comfortable for him, even if that way has repeatedly failed. In this case, ideology trumps effectiveness. For more than a decade, Washington governors and legislators have talked about climate change, often in stark terms, and demanded immediate action. Each time, however, they have put ideology and special interests ahead of affordable and effective policy. Making those same, predictable mistakes this time is not bad only for the environment. Intentionally choosing bad policies makes it clear that when push comes to shove, some politicians care more about their own ideology than about protecting the environment.
2233 James St. Bellingham, WA 98225 1-800-244-1324
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Guest Column: occupational licensing Erin Shannon | Small Business Director Washington Policy Center Erin Shannon became director of the Washington Policy Center for Small Business in January 2012. She has an extensive background in small business issues and public affairs. The Center improves the state’s small business climate by working with owners and policymakers toward positives solutions.
Why does Washington State want to keep some workers from working?
n a time when “more jobs” and “income inequality” have become every policymaker’s favorite sound bites, ending needless restrictions on people who want to work should be easy. Scrapping occupational licensing rules that do nothing to protect public safety would boost job creation, especially for low-income and minority workers, and would spur our state’s economy.
An occupational license gives a worker permission from the government to work in a particular profession. To get the license, a worker must comply with a state’s arbitrary, specific combination of training, testing, and taxation. By denying a license, the government makes it illegal for a person to practice a trade. Recently the chair of the Small Business Committee in the U.S. House of Representatives sent a letter to the Small Business 96 | BUSINESSPULSE.COM
Administration asking the agency to study the “rise of occupational licensing across states, and the economic effects of licensing on entrepreneurs and would-be entrepreneurs.”
The state says that hair braiders must obtain a cosmetology license, which costs about $13,748 (not including books and supplies) and requires 1,600 hours of training—even though this might not include even one hour of hair braiding. Today one in three occupations are licensed at the state level. In 1950, fewer than one out of 20. One study found that licensing regulations cost between $35 billion-$42 billion a year. Other studies show that licensing restrictions reduce job growth.
Occupations free from licensing in some states – such as librarians, respiratory therapists, dieticians and nutritionists – enjoyed 20 percent higher job growth between 19902000 in unregulated states than in regulated states. Certainly, some professions need state oversight to protect the health and safety of the public. But many licenses do not promote public safety; they simply discourage entrepreneurs and job creators with pointless rules that are irrational and unreasonable. In fact, Federal Trade Commission (FTC) officials told the Small Business Committee this summer that licensing requirements often “discourage new entrants, deter potential competition from professionals in related occupations, and suppress innovative forms of service delivery that could challenge the status quo.” The FTC said the fees and training needed to obtain many licenses are used to protect people who already are working in the profession from competition. The higher the fees and more extensive the training, the harder it is for new people to break into those professions.
Those government barriers mean less competition and higher prices for consumers, and fewer opportunities for those who want to work. Workers with less education and of lesser means get hit particularly hard by these barriers. Small business owners around the nation share the FTC’s views that protectionist licensing requirements block business growth and job creation. In a recent “Small Business Friendliness” survey of 12,000 small business owners, licensing requirements surfaced as the most important factor in a state's overall small business climate. In that survey, Washington state’s small business owners gave the state a lackluster “C” grade for licensing friendliness, and a woeful D+ for business regulations in general. Not coincidentally, a 2012 study ranked Washington as the 19th most broadly and onerously licensed state. Washington earns the dismal ranking because of the number of low-income occupations licensed, combined with the fees and training requirements associated with those licenses. Washington licenses 54 of the 102 low- to moderate-income occupations – more than half! – studied in the report. Those cost an average of $152 in fees and 199 days in required training to obtain the licenses. The study notes that Washington irrationally “licenses some occupations more onerously than appears warranted by concern for public safety.” The study points to these facts: • Becoming an emergency medical technician in Washington requires just 26 days of training. • A massage therapist must undergo 117 days of training (more than four times more). • Manicurists and skin care specialists must complete 140 days of training (five times more).
Meanwhile, it takes 233 days of training to become a barber, and 373 days to become a cosmetologist. Despite Washington’s poor ranking, it does not appear the state will ease its regressive occupational licensing burden any time soon. In fact, the state is moving in the wrong direction. In 2005 the state Department of Licensing said natural hair braiders need no occupational license to practice their craft. The state has reversed course and now says that hair braiders must obtain a cosmetology license, which costs about $13,748 (not including books and supplies) and requires 1,600 hours of training—even though this might not include even one hour of hair braiding. The Institute for Justice, which has filed a lawsuit on behalf of hair braiders, notes the training is “more than 10 times the number of hours required to become an animal control officer, emergency medical
technician, and a security guard— combined.” Imagine how many current and would-be hair braiders cannot afford the training necessary to obtain a cosmetology license. Many are low-income or immigrant workers who want to work instead of relying on government welfare checks. Once public health is accounted for, shouldn’t customers, rather than state officials, decide whether these hair braiders are worth the fees they charge? Rules that serve only to make it harder for people to find work have no place in a free market economy that relies on entrepreneurs to build new businesses that create jobs. If policymakers in Washington want to do something that will create jobs immediately and make it easier for people who want to work, eliminate the state’s unnecessary and burdensome occupational licenses. That’s an easy first step.
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Guest Column: Human Resources Rose Vogel | HR Programs for SHRM Rose Vogel is a vice-president co-chair of the Programs Committee for the local Mt. Baker Chapter of the Society for Human Resources Management (SHRM). She serves as director of human resources for EcigExpress in Bellingham, a company with 34 employees. She is a graduate of WWU-Fairhaven and has a masters degree in Human Resources labor relations.
Don’t ask, and here’s why…
ou’re friendly, and you want to make a prospective employee feel comfortable and welcome in an interview, or, as a co-worker. So, you ask a question that seems simple and innocuous.
Next thing you know, pardon your blooper – you shouldn’t have asked. Why not, you wonder? It was too personal. (Maybe even tacky.) But mainly, it broke the law. This year marks the 50th anniversary of the Civil Act of 1964, known as Title VII, which prohibits: • Employment discrimination based on race, color, religion, sex, and national origin, and • The Age Discrimination in Employment Act (ADEA), which prohibits employment discrimination based on age against persons who are 40 years or older. Further, Title I of the American with Disabilities Act of 1990 (ADA) prohibits employment discrimination based on disability. The Equal Employment Opportunity Council (EEOC), which turns 50 next year, enforces these and other laws. As an exercise in HR, and in general workplace best practices, brush up on these questions you may not ask an appli98 | BUSINESSPULSE.COM
cant during an interview or otherwise, why not, and what you can ask:
1. How old are you? Big no. Age does not matter – job experience relevant to the job opening does. If you ask a candidate her/his age and she/he is over 40 and has more experience than a younger candidate, you open yourself up for an age discrimination complaint. Alternative question: How have you stayed current with related laws, policies, leadership and other job related skills to stay informed and fresh in your area of expertise?
While well-intentioned… inquiring about a person's nationality, or family's nationality, is off-limits by law. 2. Do you have a disability? Huh-uh. This sets you up to possibly hiring the candidate based on a disability alone. For example, if the prospect says yes and the disability is dyslexia, but the position is for a lifeguard, would the disability relate to the functions of the job? Law states that after a conditional
offer is made, an employer may ask disability-related questions and require medical examinations, as long as it makes the same requirements for all entering employees in the same job category. Alternative question: Are you able to perform the essential functions of the job for which you are applying, either with or without reasonable accommodation?
3. Do you have a car? Zap! Sorry, you can’t even ask what kind of car they drive. Seems innocent enough, right? What if the applicant is an avid bicyclist and prefers to riding to work, regardless of weather? Or, taking public transportation? Or walking? You cannot leave yourself vulnerable to a perceived bias in the job selection because of an applicant’s preferred method of transportation. How an employee gets to and from work simply is not your business. Alternative question: Our facility’s first shift starts promptly at 7 in the morning, and punctuality is a must. Are you punctual and able to arrive at work to start at 7 a.m.?
4. Is your last name German? Oh, my. First of all, why even ask the question? Maybe – just maybe – you can ask, “Do you speak German?” But only if the
position requires speaking German. Otherwise, then, no – do not ask. Keep your questions related to the job, and to the skill sets required for the position. Otherwise you are infringing on personal civil rights that are protected. Not to mention possibly leaving the perception of a personal bias. Alternative question: There really isn’t one. While well-intentioned, say, as an icebreaker and attempt at showing personal interest, inquiring about a person’s nationality, or family’s nationality, is off-limits by law. National origin is a protected category, so play it safe rather than sorry.
Summary: Always ask yourself, “Does my question relate to the job duties?” If it does not, then do not ask. Interviewing is not a date or even a friendly conversation. It’s an opportunity to evaluate job skills and qualifications. The EEOC takes the position that employers should never ask questions about matters that may exclude members of protected groups, unless the employer can prove that the inquiry was jobrelated and consistent with business best practices. Avoid costly investigations and involving the government in your business.
How to avoid those: The one surefire way to stay away from costly mistakes: Hire an HR professional who becomes your company compliance officer and, thereby, your risk manager. Another is to make sure that every employee knows and understands (a.) the EEOC laws, and especially (b.) the six protected groups – race, color, religion, sex, national origin, and disability. Finally, when you’re in icebreaking, friendly mode, stick with, “How’re you liking this weather?”
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Guest Column: LEAN PRACTICES Randall Benson | Lean Consultant Randall Benson is a management consultant, author, and Lean master working out of Whatcom County. You can visit his blog “The Lean Heretic” at www.leanheretic.com, and his website at www.bensonconsulting.com.
Eliminate effort for your customers Create a hassle-free experience and loyalty will follow suit
“First, cause no effort.”
This is the golden rule of customer experience. Break this rule and all other customer-experience embellishments will simply be a waste. Honor this rule and you will master the single greatest driver of customer loyalty. The management of a former client, which I’ll call Steadfast Life and Casualty, nearly destroyed their 80-year-old company before they mastered this rule. They bet their future growth on a new, longterm care insurance product. It was potentially highly profitable, but required more agent involvement. Unfortunately, their independent agents – their customer and the lifeblood of their company – seemed unwilling or unable to sell the new product. As a result, first-year sales were abysmal: just a small fraction of expectations. Unless the situation changed, Steadfast’s management would be putting the company at risk.
The problem When addressing the crisis, I 100 | BUSINESSPULSE.COM
recognized that the independent agent was a key customer. Through mapping of the agents’ experience with the product and the company I discovered myriad serious problems.
Lean methods, like "pull" and "Kanban," cut policy underwriting time from weeks to days. New agents experienced difficulty getting approved to sell Steadfast’s product. They had to fill out paper forms, send them to Steadfast, and then wait weeks for approval. By that time, the agents were already selling products from Steadfast’s competitors. Once finally approved, agents then in sales meetings with prospects, had trouble accessing information about Steadfast’s product, shuffling through page-after-page of disorganized printed materials. When persevering agents
sold policies, they had to rewrite paper applications and fax then to Steadfast. This was a hassle and waste of time. As a result, agents often tossed un-submitted applications into the back seat of their cars where they were neglected until the agent eventually returned to the office. Once submitted, Steadfast took weeks to underwrite new policies, calculate commissions, and snail-mail checks. It was clear that the problem was the agent experience, not the product itself. Virtually every step of the agent’s experience was fraught with hassles and roadblocks. Steadfast was burdening their customer to make up for wasteful processes. The agent experience was anything but effortless and, not surprisingly, loyalty was in the tank.
Background on Lean CX Research noted in the recent book, The Effortless Experience, clearly shows that the best customer experience, in terms of customer loyalty, is the effortless one. The authors discovered that just 4 percent of customers who suffered
high-effort experiences reported being loyal. Yet, 91 percent of customers with low-effort experiences reported being loyal. Wow! Low effort creates an 87 percent loyalty advantage. The best way to take effort out of the customer experience is to apply Lean Thinking. Lean is purposebuilt to eliminate the hassles and roadblocks (i.e. wastes) that translate into customer effort.
Fixing the problem In Steadfast’s case, a cross-functional team applied Lean Thinking to agent experience to turn around agent loyalty and financial performance. They drew on agent research to design streamlined processes and redesigned virtually every aspect of the agent experience. For example, they: • Created an easy online agent certification process, allowing an agent to receive approval to sell the new product the same day. • Put all agent support materials online so agents could easily access them during sales meetings. No more fumbling through printed materials. • Devised online policy submission, making it easy for agents to submit new policies at the end of a sales call. • Used Lean methods, like “pull” and “Kanban,” to cut the policy underwriting time from weeks to days. They stopped over-processing (a Lean waste) by using statistical methods to avoid reviewing all medical information for all applicants. • Designed new processes to calculate commissions immediately and direct-deposit agent commissions, slashing payment time from weeks to less than two days. In essence, Steadfast completely transformed the agent experience. Agents could now join a broker-
age firm on Monday and see their first commission payments in their checking accounts by Friday. That’s a far cry from the more than eight weeks, and countless frustrations, in the former experience.
Results After a year of very weak sales the product sales exploded and, after redesign became Steadfast’s top source of revenue. Agents loved selling the product and sales measured by independent agent skyrocketed. Within a year, agent sales far exceeded Steadfast’s most upbeat expectations. Steadfast hit an undreamed of milestone: sales were so high that Steadfast hit its capital reserve limit for the product category. It actually had to cap policy sales for several months. (Capital reserves are required by states to assure liquidity of insurance products.) By following the “No Extra Effort” golden rule, the same product that had nearly ruined Steadfast now drove record sales and sparked a financial turnaround. Using Lean Thinking to create an effortless agent experience changed the game for Steadfast. Virtually every organization can make their customer experience more effortless.
To create an effortless customer experience: 1. Deliver an effortless experience, and then emphasize delighting your customers (exceeding their expectations). 2. Serve your customers the way they want to be served (e.g. self-serve online vs. making a call) and in the way most convenient for them. 3. Measure customer effort (number of transfers, repeating information, switching channels, etc.) and work to continuously reduce it. 4. Ask how likely a customer is to recommend your product or service; don’t rely on customer satisfaction metrics as a surrogate for loyalty. 5. Measure the entire experience, not just the moments of truth. 6. Eliminate some interactions instead of improving the interaction. 7. Reduce channel switching (e.g. from website to phone) by improving self-service in the initial channel. 8. Make effort reduction a key part of your Lean initiative.
For more information about Lean Customer Experience, visit Randall’s website, LeanCX.com
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Guest Column: Executive Leadership Janelle Bruland | President / CEO Management Services Northwest As president and CEO of Management Services Northwest in Ferndale, Janelle Bruland chaired the 2014 annual conference of CEOs in the Building Services Contractors Association International (BSCAI). She gave a talk on leadership, and this column excerpts highlights of her presentation about leaders operating at optimum energy.
Rejuvenation: a leader's tool Refreshing yourself refreshes your workplace
ouldn’t we all use a little rejuvenation? Those in leadership positions are often confronted with high stress and pressure that can lead to exhaustion if not well managed. How wonderful it would be to rejuvenate – to feel young and healthy again; with a new strength and energy for our business and our families. In the book The Power of Full Engagement, authors Jim Loehr and Tony Schwartz state, “We live in a world that celebrates work and activity, ignores renewal and recovery, and fails to recognize that both are necessary for sustained high performance.” They suggest that when performing at our highest and best levels, we are drawing from four separate sources of energy including physical, emotional, mental and spiritual, and are disciplined in regular use and renewal of these energy sources. If we manage these resources effectively, we can build 102 | BUSINESSPULSE.COM
the capacity to live a productive, fully engaged life. In my own life, and in working with and observing other executives I find it imperative to take time for regular personal renewal before we can be effective in our business. Perhaps as a result of personal beliefs or societal dogma we think personal renewal is only for those who deserve it - an award for an achievement. The rest of us who are undeserving wear the hours worked per week like a badge of honor and are boast that we work 70 or 80 hours per week. What would it look like in your life if you turned this around? What if instead of looking at time for your own personal rejuvenation as a reward for certain work accomplished, you saw this as a key ingredient to effective leadership, and the path to achieve significant improvement and results in your business. Those in leadership positions face many forces that compete for our time and energy – creating a trap of overworking to the point of exhaustion, and rarely allowing time for our own renewal. As a busy executive, I have decisively and purposefully incorporated recovery time into my schedule.
Each calendar year I block out renewal time in my schedule. I may need to adjust dates, but when I take away a scheduled renewal time in my calendar I simply move it to another date rather than allowing myself to delete it. Another way I have found rejuvenation in my own life is through positive habits or rituals that provide a break from my work routine. My parents instilled many positive renewal rituals into my life that I practice with my own family today. Growing up we would have regularly scheduled meals together. My father, who was incredibly busy running his own dairy farm, would take a break each evening for the family meal. If there was more work to be done he would go back out to the farm after dinner, but would religiously take dinnertime with the family. Sunday was set aside as a day of rest and my parents had strict rules for the type of activities allowed. Though I sometimes fought those boundaries as a child, I now look back and recognize what a gift they were. We also took at least one week annually for a family vacation; and all family members participated. Taking the time for rejuvenation
is key to effective leadership. We set the example for those around us. Certainly we want to bring our best selves to work. When we are fresh and operating with peak energy we create a positive environment for our teams where they too can flourish. We approach work with renewed vigor and creativity. Others see a renewed passion – it is electric and contagious. Imagine the ripple effects we could have on our teams. Imagine what things could be accomplished if others followed our new example - improved results, increased morale, even fun at work! Commit to scheduling regular time for rejuvenation. By faithfully renewing our physical, emotional, mental and spiritual selves we will have increased energy for our work, for our teams, and for our families. The result is the capacity to live more highly engaged and satisfying lives.
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Guest Column: employment analysis Kevin Hoult | Business Advisor, SBDC Businesses across Whatcom County have been coming to the Small Business Development Center at Western Washington University for over a decade. Certified business advisers like Kevin help entrepreneurs with financing, marketing, personnel, inventory, and purchasing or selling businesses.
A double pinch on the labor pool Quarter Four and beyond – what's in store for Whatcom small business?
killed labor shortages will continue to worsen while the cost of unskilled labor is expected to rise.
The incredible economic engine that is King County helped our fair state recover from the recession, but it’s been tough on Whatcom County businesses seeking to grow their teams. Global players like Boeing, Nordstrom and Amazon offer eyepopping compensation packages and unmatched upward mobility. Tech marvels like Microsoft, Adobe, Google, and Apple offer wages that make Seattle and Bellevue affordable, and that attract candidates with boutique workspaces. Start-ups are rising out of what some are calling Silicon Valley North, flush with equity opportunities and creative vigor. What’s a Whatcom business to do? As Sun Tzu wrote in The Art of War, “Be strong where your enemy is weak.” Whatcom County offers an unmatched combination of affordability, quality of life, and easy access to global destinations 104 | BUSINESSPULSE.COM
like Seattle and Vancouver, B.C. Focus recruiting efforts on the entire available labor pool, rather than just the elite prospects. For every software rock star who just landed a great gig at one of the software giants, there are hundreds of talented candidates aching to escape the traffic, cost of living, and social issues confronting the central Puget Sound region.
The future looks good but in a whole new way….The deals are there but the players have changed.
Focus on the family. Our sea-toski lifestyle and light traffic mean we can recruit the best. Our labor shortage means lots of open positions for spouses, too, which eliminates a barrier to recruiting talent here. Small business owners actively seek alternatives as the minimum
wage rises, while the Affordable Care Act implementation creates uncertainty about future labor costs. Small businesses are looking at self-service for customers, either in person or on line, using technology in place of human labor and investing in equipment instead of hiring workers to perform repetitive tasks.
Continued Balkanization in business borrowing. As business lending slowly thaws, smaller banks look for deals, old dogs learn new tricks, and crowdfunding is coming of age. The monolithic approach to business financing has given way to a portfolio strategy, with small businesses assembling the kinds of complex financing packages thought to be the province of mergers and acquisitions. Local banks, once known for avoiding risk, have new leadership, new approaches, and a new appetite for small business loans. State and federal regulators are finally getting their arms around crowdfunding, and this new resource is providing an important component of business financing. The future looks good but in a
whole new way. Instead of handing a business plan off to a commercial loan officer and waiting for the decision of the loan committee, small businesses are starting with friends and family, adding a crowdfunding effort, getting an equipment loan from a local bank, financing a vehicle at the dealership, and turning to vendors for inventory financing. The deals are there but the players have changed.
RELATIONSHIPS THAT LAST A LIFETIME
Your best customers might not live here The world’s consumers are becoming quality- and brand-conscious, and that spells opportunity for Whatcom County. Uniquely positioned to access the Pacific Rim and beyond, businesses can cash in on this global appetite for U.S. goods and services. Yes, services can export, too. Our engineering, software and aerospace talents command strong demand overseas with Pacific Rim nations engaged in building and improving airports, seaports, highways, and communication infrastructure. The West Coast has a new Seattle branch of the U.S. ExportImport bank (Ex-Im Bank). The Ex-Im Bank combined with the Export Finance Assistance Center of Washington, and the Small Business Administration Export Assistance Center offer a formidable array of resources to help small businesses access global markets. Using these partners, Whatcom small businesses can get help with export rules and regulations, financing for inventory and transportation related to exporting, and overseas receivables insurance to protect against default. When you’re ready to start, visit your Western Washington University Small Business Development Center. We can assist whether you’re recruiting team members, seeking financing, or interested in accessing Pacific Rim opportunities.
“I got my first car loan from Industrial Credit Union and now 30 years later they are helping me with my business needs.” - Ed, owner of Cruisin Coffee IndustrialCU.org
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Guest Column: Diversity in the workplace Kimberly Harris | Owner Distinctive Voice Consulting Kimberly Harris owns Distinctive Voice Consulting in Bellingham, offering diversity auditing and training for businesses, education, and other organizations.
Gain a competitive edge by creating a positive diversity climate
o cover all aspects of attracting customers, you typically cover such details as employee selection, customer service, logo, phone carrier, and even interior design to ensure sending the right message to your potential customers.
One area of a business often overlooked for attracting customers is a diversity climate. It is important to be aware of the image that you project to minorities. According to Pew Research’s U.S. Population Projections Study, the ethnic and racial demographics of the U.S. are changing dramatically. By 2050 the non-Hispanic white population of the U.S. will become a minority (47 percent), and people of color will outnumber white Americans. What does this mean to you as a business owner? You want to ensure that everyone who walks through the doors of your place of business feels welcome, included, and respected as an equal. What do your office environment, culture, and practices say to your customers 106 | BUSINESSPULSE.COM
with respect to diversity and inclusion? Some aspects of diversity and culture include race, creed, class, gender, sexual orientation, age, size, ability, disability, and religion, to name a few. • Do you cover these aspects in the presentation of your business? • Does your staff reflect the same percentage of people for the community of your business? • Do you have employees that speak a foreign language? • Do you have ramps for people in wheelchairs? • What types of pictures do you have on the walls? Do they reflect the diversity of our society including men and women, people of color, people of various ages and sizes? If you think that this is irrelevant to your business, let me tell you a story. My family attends a local place of worship. Though it is not a commercial business, it is a place where we give our time and money, and we expect to feel respected, welcomed, and included. Most aspects of culture at our
Whatcom County experienced a 43 percent increase in both its Hispanic and Asian populations between the 2000 and 2010 censuses, according to the U.S. Census Bureau. Because of the rapidly changing demographics in our community of people of color, your business would benefit from creating an environment of welcome and inclusion as a necessary best practice.
place of worship were great with one exception â€“ a picture that was very upsetting. My spouse and I are African-American, and our house of worship displayed a picture of a white American missionary woman bending over and shaking hands with an African man seated on a log in an African village. Though we both fully appreciate the work of missionaries, we took offense at the lack of dignity represented by the African man in the picture. We felt that he looked like a beggar instead of a dignified human being. This picture sent a message to us that people of color are needy and helpless. We want to worship at a place that represents people of color as respected, capable, and self-sufficient. Because I conduct diversity training I took this opportunity to approach the church and offer my services of sharing through another lens and perspective for the benefit of the people of color who attend the church. I learned that the African man in
the picture was a king in his village. To say that I was shocked would be an understatement. The church was surprised by our perspective, so a church leader conducted some field research on the picture. He asked other church attendees of color if anything in the church offended them (without making reference to the picture). To his surprise, seven of the eight persons he asked walked him over to the picture that my spouse and I found offensive. The church leader, after some negotiating with other staff members who did not understand why the picture was offensive, had the picture removed. Several months since then my spouse and I have noticed an increase in the number of families of color attending the church. Is this a coincidence, or has the church now improved its diversity climate? Does your business have customs, practices, and a presentation that might turn away potential customers? We all have different
perspectives, and sometimes we can only see things through our own lenses. What we think is innocent can be offensive to others. Whatcom County has experienced a 43 percent increase in both its Hispanic and Asian populations between the 2000 and 2010 censuses, according to the U.S. Census Bureau. Because of the rapidly changing demographics in our community of people of color, your business would benefit from creating an environment of welcome and inclusion as a necessary best practice. Making smart choices about welcome and inclusion for your customers today is smart business planning for tomorrow. For more on diversity issues: DistinctiveVoiceConsulting@ gmail.com, 360-920-8114, or visit DistinctiveVoiceConsulting.blogspot.com
WHATCOMBUSINESSALLIANCE.COM | 107
guest editorial: NW Jobs alliance Brad Owens | NW Washington Building and Construction Trades Council Brad Owens is past president of the NW Washington Building and Construction Trades Council, AFL-CIO, and serves as co-chair of Northwest Jobs Alliance (firstname.lastname@example.org).
John Huntley | President / CEO, Mills Electric John Huntley, president/CEO of Mills Electric, serves on the Whatcom Business Alliance Board and as co-chair of the NW Jobs Alliance.
SEPA expansion of review process causes concern for industry and agriculture
ig and small manufacturers as well as farmers across Washington State have growing concern over an obscure law known as SEPA – the State Environmental Policy Act. This increasingly uncertain and increasingly bureaucratic review process is imposed on Washington’s export facilities.
A great percentage of the exports coming out of Washington ports benefit businesses of all size. Trade policy heavily impacts agricultural commodities, our second-largest trade industry. SEPA looms over even our designated industrial zones, such as Cherry Point in Whatcom County, where big businesses operate and benefit local communities significantly through family wage jobs, with a local tax 108 | BUSINESSPULSE.COM
base that pays for schools, services, community investment, and by providing economic activity for small local business owners. In all, trade-related jobs account for a whopping 40 percent of Washington’s labor force. These
Setting unobtainable SEPA review standards sets the stage for huge economic disaster in Washington State. predominately consist of family wage jobs with health care and pensions. But the competitiveness of all those jobs sits in jeopardy from special-interest-driven opposition to a handful of export facilities. Washington’s Department of Ecology drastically changed SEPA
to accommodate vocal opposition to export terminals like the Gateway Pacific Terminal proposed for construction in the Cherry Point Industrial Zone. The protests aim at the shipping of products that some don’t like – such as coal and oil – along with many other popularly-accepted products such as timber, agricultural goods, and other Washingtonproduced commodities. But, as with the Cherry Point Industrial Zone, the unworkable new Global SEPA rule can’t be limited to just products we like or don’t like. The new policy the state has established sets a precedent that the state must quantify the global lifecycle impacts of goods and services shipped through our state. How can any state agency claim to draw an accurate picture of where, how, and when a U.S. commodity – let’s say a shipment of timber – will be used overseas? Or the impacts of Boeing planes globally, as air traffic grows? How do
we begin to address the economic impact of Washington’s GMO agricultural products (genetically modified organisms)? The simple answer: There is no way to know. Washington already has some of the most stringent and advanced environmental policies in the U.S. Our existing SEPA process has worked for decades, protecting communities, and enabling economic prosperity. Setting unobtainable SEPA review standards sets the stage for huge economic disaster in Washington State. Considering the state of our economy, we should be very worried at this prospect. The proposed Gateway Pacific Terminal has been under review for two years, with another 18 months’ or more ahead. That represents years of lost opportunity for business shipping out of that facility – and not just coal, but Washington farmers as well. There’s almost no way to measure what new opportunities we’ve lost, as businesses across the U.S. and other nations look elsewhere to avoid the fate of overreach in review policies. The emergence of Asian economies over the last few decades presents an incredible opportunity for our community and state. And, as Washington’s ports are the closest, we are the most attractive trade hub to those booming new markets in the Far East. That means new opportunities for Washington farmers and the high-quality products they produce. The Asian boom already brings benefits to Washington tech companies and manufacturers. And it could mean more opportunity for future generations to stay here in our community. We need to continue to be environmental leaders, champions of our environment, and thrive economically. We need policies that work. Global SEPA doesn’t.
Helping Our Clients Reach New Heights See why so many clients from the Northwest – from individuals and non-profits to small and large companies – trust the people of Archer Halliday.
• Estate Planning & Valuations
Providing solutions for your success
• Tax Returns & Tax Planning • Tax Strategies & Implementation • Growing Your Business • Small Business Consulting
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1621 Cornwall Avenue Bellingham, WA 98225
• Start Up Business Consulting
(360) 756-1010 www.archerhalliday.com
We invite you to join our Alliance
Fostering Business Success and Community Prosperity Call or go to our website: 360.671.3933 • www.WhatcomBusinessAlliance.com
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Technology: Travel Apps Tech Help Staff | Big Fresh Experts at Tech Help in Bellingham, a division of Big Fresh, provide answers to the questions that are trending among clients. If you have a tech question for our experts, send an email to email@example.com
Scammers and Scholars on the Web
Beware phony ‘Microsoft Tech Support’…
ybercriminals have changed the ways in which they try and gain access to your computers. Instead of just using online scams, they have now started calling people claiming to be from Microsoft Technical Support. Using publicly available phone directories, they might know your name and other information when they call you, but beware – they are not from Microsoft.
How the scam works: 1. Someone will call stating they are from Microsoft Technical Support and that they have received notification that you have a virus, malware, or a combination of the two and that they recommend doing a scan of your system immediately. 2. Once they’ve gained your trust, they might ask for your username and password or ask you to go to a legitimate website to install software that will let them access your computer to fix it. 3. Request credit card information so they can bill you for phony services.
4. Direct you to fraudulent websites and ask you to enter credit card and other personal or financial information there.
How to protect yourself from tech support scams: 1. Never give control of your computer to a third party unless you can confirm that it is a legitimate representative of a computer support team with whom you are already a customer. 2. Ask if there is a fee or subscription associated with the “service”. If there is, hang up. 3. Never provide your credit card or financial information to someone claiming to be from Microsoft tech support.
What to do if you have already provided your information to a tech support scammer 1. Change your computer’s password, change the password on your email accounts, and change the password for any financial accounts – especially your bank and credit card. 110 | BUSINESSPULSE.COM
2. Scan your computer with an anti-malware and antivirus scanner such as MalwareBytes or Spybot Search & Destroy to remove any malware and viruses that may have been installed. 3. Take your computer to a local support company and let them know what happened and they’ll be happy to help you.
Top 3 places to get free education
For most of America, the school year is upon us. We decided to use this time to provide readers with a list of the top websites where you can obtain a free education on a variety of topics. While most online resources won't grant you a college degree, there's a lot more to the internet than Wikipedia when it comes to learning. Here are some of the best places to get an education without ever leaving your computer.
Oeconsortium.org: The easiest way to find a course you're interested in is to search the OpenCourseWare Consortium site, which aggregates courses from more than 22 universities in the US alone, including MIT, Johns Hopkins, Tufts, and the University of Michigan. The site features courses on tons of different subjects, from business and economics to architecture and physics. Most universities have their specialties, of course (MIT, for example, has a bounty of resources in engineering), but between them all, you should be able to find pretty much anything you want.
Khanacademy.org: Khan Academy is a bit narrower
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customconcrete.biz | 360.676.1665 than the others, as it isn't an aggregator. Rather, it's mostly the work of one man, an electronic chalkboard, and YouTube. Khan Academy focuses mostly on math, from basic arithmetic to calculus, as well as a bit of science. It has a great reputation for teaching them in an understandable manner, though, so if you're in the market for those particular subjects, the Khan Academy is a great place to start (and, of course, it's open source too).
iTunes U (accessible through the iTunes Store) If you're an iPod, iPhone, or iPad user, iTunes U is fantastic because you can download these lectures right to your device and take them with you. A great feature of iTunes U is it allows for searching by specific topic or lecture, not just full courses. iTunes U also has a huge database, so if you're searching for something a bit more niche (like a
course on American Presidents or Dead Media,) you're likely to find it. The only problem is that it can get a bit overwhelming if you just want to browse courses. If you're looking for something more general, you're probably best off going through OpenCourseWare Consortium, finding the course you want, and then looking it up on iTunes to download to your mobile device. That said, if you're looking to broaden your knowledge beyond the more traditional college courses, spending some time browsing iTunes U might yield some very interesting results.
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Scene on the Street
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It's a Chicken across the road Velveeta J. greets Homeskillet diners Named for the local artist who created her, Velveeta Jones greets visitors to Homeskillet – a popular breakfast/lunch café in Bellingham’s Sunnyland neighborhood. Read old saws on Velveeta J., such as a Will Rogers quote. The owners, Tina and Kirby, met while cooking breakfasts for scientists at the South Pole. Read more about Antarctica on page 28. When asked the obvious age-old question, “Why…?” this chicken answered, “To get another side.” [Photo by Mike McKenzie]
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ADVERTISER INDEX Anderson Paper . . . . . . . . . . . . . . . . . . . . . . . . . . 27 Archer Halliday . . . . . . . . . . . . . . . . . . . . . . . . . . 109 Automated Mailing Services . . . . . . . . . . . . . . 67 Bank of the Pacific . . . . . . . . . . . . . . . . . . . . . . . . 37 Banner Bank . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 Barkley Company . . . . . . . . . . . . . . . . . . . . . . . . 116 Bell-Anderson Insurance . . . . . . . . . . . . . . . . . . 71 Bellingham Bells Baseball Club . . . . . . . . . . . . 31 Best Western Lakeway Inn . . . . . . . . . . . . . . . . 49 Big Fresh . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30 Blaine Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . 57 Cascade Radio Group . . . . . . . . . . . . . . . . . . . . . 64 Chmelik Sitkin & Davis . . . . . . . . . . . . . . . . . . . . 41 Chocolate Necessities . . . . . . . . . . . . . . . . . . . . . 39 Chrysalis Inn and Spa . . . . . . . . . . . . . . . . . . . . . 72 City of Blaine . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58 Comcast Business Class . . . . . . . . . . . . . . . . . . . 66 Custom Concrete by Dave Johnson . . . . . . 111 Data Link West . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59 Dewaard & Bode . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 Diane Padys Photography . . . . . . . . . . . . . . . 107 Doug Ericksen for Senate . . . . . . . . . . . . . . . . . 84 Ecigexpress.com . . . . . . . . . . . . . . . . . . . . . . . . . . 61
Employee Benefits Planning . . . . . . . . . . . . . . 65 Faber Construction . . . . . . . . . . . . . . . . . . . . . . . 52 First Federal Savings . . . . . . . . . . . . . . . . . . . . . . 51 Hardware Sales . . . . . . . . . . . . . . . . . . . . . . . . . . . 43 Heritage Bank . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 Hilltop Restaurant . . . . . . . . . . . . . . . . . . . . . . . . 50 Hotel Bellwether . . . . . . . . . . . . . . . . . . . . . . . . . . 11 Industrial Credit Union . . . . . . . . . . . . . . . . . . . 105 Innovations for Quality Living . . . . . . . . . . . . . 95 Invent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55 Island Mariner Cruises . . . . . . . . . . . . . . . . . . . . 22 Kulshan Brewing Company . . . . . . . . . . . . . . . 89 Larson Gross . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82 Laserpoint Awards . . . . . . . . . . . . . . . . . . . . . . . . 45 Mills Electric . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39 Mount Baker Vapor . . . . . . . . . . . . . . . . . . . . . . . 74 Northwest Jobs Alliance . . . . . . . . . . . . . . . . . . 69 Northwest Propane . . . . . . . . . . . . . . . . . . . . . . . 86 PeaceHealth St. Joseph Medical Center . . . . 43 Peoples Bank . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29 Print & Copy Factory . . . . . . . . . . . . . . . . . . . . . 103 Q Laundry . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77 ReBound Physical Therapy . . . . . . . . . . . . . . . . 23
RedRokk . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90 Rice Insurance . . . . . . . . . . . . . . . . . . . . . . . . . 19, 23 San Juan Airlines . . . . . . . . . . . . . . . . . . . . . . . . . 70 Saturna Capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 Scrap it / Stow it . . . . . . . . . . . . . . . . . . . . . . . . . . 68 Semiahmoo Resort Golf Spa . . . . . . . . . . . . . . 17 Shuksan Golf Club . . . . . . . . . . . . . . . . . . . . . . . . 25 Sig's Funeral and Cremation Services . . . . . 101 Silver Reef Casino . . . . . . . . . . . . . . . . . . . . . 73, 114 Skagit Bank . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 115 Skagit Valley Casino Resort . . . . . . . . . . . . . . . . 33 St. Pauls Academy . . . . . . . . . . . . . . . . . . . . . . . . 20 TD Curran . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 The Language Exchange . . . . . . . . . . . . . . . . . . 97 The Willows Inn . . . . . . . . . . . . . . . . . . . . . . . . . . . 53 Transgroup Worldwide . . . . . . . . . . . . . . . . . 75, 15 Umpqua Bank . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38 VSH . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77 WECU . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79 Western Construction Resources . . . . . . . . . . 99 Western Refinery Services . . . . . . . . . . . . . . . . . 46 Western Washington University . . . . . . . . . . 103 Whirlwind Services . . . . . . . . . . . . . . . . . . . . . . 105 WHATCOMBUSINESSALLIANCE.COM | 113
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