Banking Business Q1 2024

Banking news and stories to help you maximize the financial success of your business Q1 2024

Building on a scrappy foundation

UNITED METALS RECYCLING + HERITAGE BANK

IN THIS ISSUE Meet Our Boise Team Cash Flow Tips for Nonprofits Cybersecurity Checklist

a publication of

Shutterstock

2

Shutterstock

Shutterstock

United Metals Recycling

Contents

9

10

“I feel like there’s a way to make money and also do the right thing,”

- Brett Ekart, United Metals Recycling

Customer Profile: United Metals Recycling.................................... 2 Five Reasons to Accept Non-Cash Payments................................. 7 Industry Profile: Construction and Trades..................................... 12 Meet Our Boise Commercial Team................................................ 14 Retirement Questions That Have Nothing To Do With Money.....17 Understanding Cash Cycles............................................................ 18 New in Heritage Direct: Export Maps............................................ 23

IN EVERY ISSUE Heritage Helps.......................................................................................... 8 Our community involvement is part of our company’s DNA and something we’re very proud of. In this section, we highlight the good we're doing in our communities.

Nonprofit Corner...................................................................................... 9 Tips for improving your nonprofit’s cash flow.

Business Banking Mentor...................................................................... 10 Tips for assessing a new market for viability.

PNWonderland....................................................................................... 20 Explore the unique sights and experiences of our Pacific Northwest.

Cybersecurity.......................................................................................... 24 Use this checklist to help protect your business from cybersecurity threats.

Financial Dictionary................................................................................ 25 Empowering you to make smart business decisions by demystifying banking terminology.

Banking Business is a quarterly publication of Heritage Bank Director of Marketing Shaun Carson Editor-In-Chief Whitney Gibson

Creative Director Erica Bolvin

Managing Editor Stephanie Neurer Contributors Lauren Kramer Ann Fish Regina Micheline Gary Rushing John Stearns Margot Swanson

3615 Pacific Avenue Tacoma, WA 98418 800.455.6126 heritagebanknw.com © 2024 Heritage Bank, member FDIC, Equal Housing Lender.

The information in this magazine is general education or marketing in nature and is not intended to be accounting, legal, tax, investment or financial advice. Although Heritage Bank believes this information to be accurate as of the date published, it cannot ensure that it will remain accurate.

Statements of individuals are their own—and do not necessarily reflect the position or ideas of Heritage Bank. Contact us at 800.455.6126 or visit HeritageBankNW.com to make an appointment with one of our local experienced relationship managers to discuss your individual business banking needs.

Equal Housing Lender | Member FDIC

A MESSAGE FROM OUR CEO

T

he new year symbolizes a fresh start and new possibilities. We are excited about the opportunities that lie ahead and the chance to explore new horizons with you. Our team is energized and ready to take on a new year, working diligently to ensure that Heritage remains a trusted partner in your endeavors.

Heritage Bank

In the coming months, we look forward to bringing you even more innovative banking solutions and continuing to provide outstanding service. This includes offering the very best content and advice in each magazine issue—through thought leadership, expert interviews, customer testimonials and more—so you can make informed decisions about how to effectively run your business and maximize your financial success.

In this issue, we’re excited to highlight our first Idaho customer, United Metals Recycling, on page 2. More than a scrap-metal recycler, it’s part of an extended family of nine companies largely focused on directing materials away from landfills and back into productive uses. Owner Brett Ekart has been working with Mike Trueba, senior vice presidentcommercial banking team leader, for many years now. The relationship with Heritage started when we opened our Boise office in 2022, and United Metals Recycling contacted Mike to discuss its tire recycling plans and inquire about possible financing.

Get to know the rest of the Boise team on page 14. Learn about some of the other customers they work with and projects they’re involved in throughout Idaho.

B

ES

K

Finally, on page 23 we introduce a new business online banking feature that allows for less data manipulation and more customized reports— which means quicker imports and cash flow analysis.

T BAN

We also include additional tips and resources for businesses in the construction industry, what to look for when considering a new market, how to improve your nonprofit’s cash flow and more.

As always, thank you for reading Banking Business and for choosing us as your banking partner.

Sincerely,

Jeff Deuel President and CEO

Jeff Deuel is chief executive officer at Heritage Bank. He has more than 40 years of banking experience. Prior to joining Heritage, he worked at JPMorgan Chase, WaMu, Bank United, First Union, CoreStates and First Pennsylvania Bank. Jeff is a past chair of the Washington Bankers Association. He currently serves on the board of the Oregon Bankers Association and Pacific Coast Banking School. He is an avid cyclist and has climbed to the top of Mt. Rainier.

Equal Housing Lender | Member FDIC

heritagebanknw.com

1

UNITED METALS RECYCLING is more than a scrap-metal recycler; it’s part of an extended family of nine companies largely focused on directing materials away from landfills and back into productive uses.

Think scrap metal like steel that’s melted and converted into building material, such as construction rebar, salvaged copper wire melted for new copper products or old tires converted into rubber gym mats. Scrap metals like steel, copper and aluminum are commodities with value that can be sold as ingredients for new products; whereas tires are a waste material without value until they’re reprocessed into ingredients for new products.

United Metals Recycling (and its affiliated companies) work in the middle: salvaging the material, preparing it for its new life, then sending it to manufacturers to make the end product.

Other affiliates of United Metals Recycling work on recycling’s periphery, including a trucking company to haul material and a marketing company to help other recycling-related companies promote their businesses. Material salvage and reuse, though, is where United Metals Recycling cut its teeth.

It’s no surprise then, that it’s taking a much bigger bite of tire recycling by substantially increasing capacity at its affiliated business, Tire Reclaim.

That’s where Heritage Bank comes in: It financed the expansion.

“We should be able to consume most of the waste tires in the state,” said Brett Ekart, owner of Tire Reclaim and United Metals Recycling, who also owns or is a partner of the other affiliates.

Last fall, Tire Reclaim completed expansion of the tire-recycling plant and was beginning to boost production in November when this story was written. Tire Reclaim will have the capacity to shred, grind and recycle 4,000 to 5,000 tons of tires per month, Ekart said.

The plant, in Caldwell, just west of Boise, will separate metal belts from the rubber, send those to metals processors for new uses and transform the rubber into various sizes and grades with several applications. Those include athletic fields and tracks, mats for gym floors, molded products like parking stops or asphalt sealant that incorporates fine rubber particles.

Tire Reclaim was born out of a challenge, Ekart said.

“We were having a hard time finding places for tires that we were getting through the nature of our recycling process, trying to figure out a home for those tires, and we were like, ‘Why don’t we just try and solve this problem?’” Ekart said.

2

Issue 12 | 2024 Q1

Anna Gorin Photography

More than Idaho company goes big on metal tire recycling

BY JOHN STEARNS

Pictured: Brett Ekart with his team in the new Tire Reclaim facility financed by Heritage Bank.

Visit heritagebanknw.com to read more of our customer profiles, then make an appointment with a banker who knows your industry.

Equal Housing Lender | Member FDIC

heritagebanknw.com

3

For Ekart—the third-generation leader of United Metals Recycling, which his grandfather started in 1972 as United Metal & Scrap Co. Inc.—the work he and his team of roughly 200 people do is rewarding.

“When you’re putting in a capital-intense facility like we are, the size that we are, you have to be a good operator,” Ekart said.

“I feel like there’s a way to make money and also do the right thing,” Ekart said.

“It’s like a good marriage—each side needs certain things for it to really be successful,” he said.

He wants that to resonate with his team, too, whose members he credits for their work and positive impact on the planet.

The relationship with Heritage started with Mike Trueba, head of Heritage’s new Boise commercial banking office and native Idahoan. Trueba had a relationship with United Metals Recycling through his previous bank. When he moved to Heritage late last year to open its Boise office, United Metals Recycling contacted him to discuss its tire plans and inquire about possible financing. A deal emerged.

“If you can operate within an industry that’s doing something good at the same time, there’s like an added bonus,” he said. “We’re stewards of the environment. At the same time, we’re not subsidized by the government, we’re just people trying to do the right thing and build businesses out of doing the right thing.”

United Metals Recycling recycles more than 100 million pounds of material a year. That’s a lot of material steered away from landfills and redirected back into the manufacturing process. That number will increase by another 72 million pounds annually with the added tireprocessing capabilities.

Recycling and sustainability comprise a big part of where Ekart sees the industry going.

“There’s more focus on a company’s ability to define their waste stream, define their material that is recyclable and keeping it out of landfills,” he said. “I think that’s why we’ve moved down the tire-recycling line; there’s a niche there that fits with our capabilities, it matched up with our interests and it’s a viable business opportunity if operated correctly.”

Heritage proved to be a good fit

But the bank plays a vital role, too.

Telling it like it is

The plain-spoken Ekart is quick to credit his team for the various businesses’ good work, saying his one superpower is “finding good humans.”

Some are former high school or college classmates, others he’s met through several Idaho and Oregon connections, some he even met through LinkedIn. Ekart played football for Eastern Oregon University in La Grande where he got his bachelor’s degree in business administration and management. He later earned his MBA through the University of Phoenix.

His companies’ operations and people are spread among various cities in two states. United Metals Recycling has recycling facilities in Boise, Caldwell, Twin Falls, Heyburn and Payette in Idaho, plus Baker City and La Grande in Oregon.

Ekart shuns the spotlight, preferring the focus be on his team and the businesses they run. Those include:

Ekart liked what Heritage Bank brought to the table for the tire facility.

“My biggest thing is banking is relationship-driven,” he said, more than interest rates and money.

“Obviously, the finances have to make sense…but we’re in a position today with doing business with Heritage because there’s a relationship there,” he said. “They came out, they looked at our facility, they met our management team, and they must have felt that there was an opportunity that we would be a good fit for their bank and a good opportunity for them—and we felt the same. So far, so good.”

A lot of relationship building and trust goes into choosing a bank, he added.

4

Issue 12 | 2024 Q1

Above: Heritage commercial banker Mike Trueba (l.) with Brett Ekart

Banking Business a publication of Heritage Bank

Anna Gorin Photography

A bank’s willingness or ability to see a company’s vision and join the journey is important, according to Ekart.

Photos courtesy of United Metals Recycling

This page from top left: United Metals Recycling’s breast cancer awareness truck is loaded with bales of metal headed to the shredder for recycling. Aluminum window frames are dumped ahead of being processed and recycled for an aluminum furnace/smelter.

An aerial photo of United Metals Recycling in Caldwell, Idaho, in 1979, seven years after the company was started by Bert Ekart.

• United Metals Recycling, whose work involves collecting and processing recyclable metals, which it then sells as recycled materials to manufacturers.

• United Hauling, which has a fleet of 40-plus trucks, 100-plus trailers and more than 3,500 drop boxes, roll-offs and bins it brings to companies to fill with recyclable materials. Those materials are then hauled to mills in Oregon, Washington, Montana and Utah.

Trucks return to greater Boise with loads such as shingles, two-by-fours and rebar to help supply the regional construction industry.

• United Electronics Recycling, which offers electronic waste recycling and mobile onsite hard-drive shredding among its recycling services.

• Copper Reclaim, for copper collection and recycling.

• Converter Reclaim, for recycling minerals in catalytic converters while following strict national tracing, tracking and purchasing guidelines.

• Tire Reclaim, recycling tires for new uses.

• Recycled Media, a marketing company which helps other salvage and recycling companies market their services as well as produces podcasts for United Metals Recycling and its affiliated companies.

manufacturers then prepares it for delivery and sale to mills that will buy it and melt it to create new products, including rebar, copper wire, aluminum sheets and more.

United Metals Recycling also recycles old vehicles, either crushing them at its facilities or at salvage yards using mobile crushers. A salvage yard removes usable parts that it can sell, leaving the rest of the vehicle for United Metals Recycling, which gets vehicles “shredder ready,” as Ekart says. It then will haul those crushed vehicles to a secondary processer to shred the vehicles into fist-sized pieces and separate all the valuable commodities like steel, copper and aluminum. Items that aren’t recyclable, such as foam cushions or plastics, still go to landfills. Roughly twothirds of a vehicle is typically recycled, Ekart said.

• TV (Treasure Valley) Pipe Supply, a steel and HDPE culvert distributor with locations in Idaho Falls, Twin Falls and Caldwell.

With Tire Reclaim, it’s paid to collect old tires from tire shops, for example. Tire retailers typically charge a disposal fee for tires they replace on vehicles, comprising part of the fee paid Tire Reclaim, which will make money downstream as it sells its ground rubber.

• United Storage, a self-storage company.

Building on a scrappy foundation

The businesses make money in different ways.

United Metals Recycling buys recyclable metal from Equal Housing Lender | Member FDIC

Ekart’s grandfather, Bert Ekart, started United Metal & Scrap with locations in Caldwell and Nampa, Idaho, and heritagebanknw.com

5

later launched United Hauling to ship scrap to plants and haul building materials back to the growing Boise area.

His wife, Wilma, also worked in the business and the couple retired in 1997, selling it to their son and daughterin-law, Rod and Debby Ekart, Brett’s parents.

That same year, the company teamed with Schnitzer Steel Industries in Portland to form a joint venture, today’s United Metals Recycling.

Rod and Debby were instrumental in the growth of the business after the joint venture with Schnitzer Steel.

They grew the commercial business with drop boxes and bins, added a trucking brokerage and expanded the United Hauling fleet of trucks to service United Metals Recycling. They also added a facility in Mountain Home, Idaho, metal and auto recycling facilities throughout the state and a facility to process ferrous (those that contain iron) and nonferrous (no iron) metals.

Brett, after graduating college in 2004 and returning to the family business, began recruiting people his age to join the business. Teaming up with his parents, he was able to use this expanded capacity to add more recycling and TV Pipe facilities across Idaho and Oregon.

The company also went on to partner with B&K Auto Salvage, now B&K Auto Salvage & Recycling, in two auto salvage and recycling facilities in Baker City and La Grande. Additionally, it bought an auto salvage and recycler in Heyburn, Idaho.

Rod worked in operations and Debby was the chief financial officer until both retired in 2016. They sold the business to Brett. When his parents retired, United Metals Recycling bought out Schnitzer, returning the company to full family ownership, Ekart said.

The company has continued to expand and seek opportunities.

United Metals Recycling

One of Ekart’s latest ventures is partnering in Recycled Media, which produces several video podcasts about

the recycling industry, “Talkin’ Tires,” “A Scrap Life,” “Recycled Idaho,” and “Betts on the Future” (named after Jennifer Betts, Recycled Media CEO and founder of Magnar Metals in California). They feature Ekart and colleagues talking about issues of the day with clients and suppliers, and they’re posted to the company’s website.

The podcasts provide a way to discuss the industry, trends, what other companies are doing and keep United Metals Recycling and its affiliated businesses and brands in the public eye.

“You have to be your own kind of media company,” Ekart said. “If you’re trying to build something and trying to scale something, then the most important thing you can do is create awareness around your business, what you’re doing and the best way to do that is to tell your story.”

He started Recycled Media with Betts for the business opportunity to help other companies tell their story and brand themselves in addition to building awareness around his own brands and companies.

That awareness is brought home in the introduction to a “A Scrap Life.” Videos show Ekart’s companies in action, high-energy music in the background and words that embody their work: “Hustle. Sweat. Grit. No suits. No ties.

Recycling before it was cool. It’s a way of life.”

Giving back in other ways

Ekart and his team contribute to the community beyond recycling.

They’re particularly fond of Camp River Run in Boise, which provides four-day camping experiences in Hidden Paradise, Idaho, for youth with serious medical issues that otherwise would prevent them from the experience. The camp, with trained medical personnel nearby if necessary, allows kids to enjoy the benefits of camping and nature.

Ekart calls it one of the coolest causes he’s seen.

“It’s just stuff like that I get excited about,” he said.

Supporting breast cancer research is also important to the company, a passion fueled by Brett’s father, Rod, who continues his significant support.

Business managers, though, can contribute where they want, whether sponsoring a local rodeo, little league or golf tournament fundraiser.

“If there’s a cause that they feel is important to sponsor in their local community, we give them the bandwidth to do that,” he said.

Left: Copper Reclaim has mobile recycling trucks that visit customers’ sites and pick up their material for recycling.

Customers are paid for the material.

6

Issue 12 | 2024 Q1

Banking Business a publication of Heritage Bank

5 reasons to accept non-cash payments 5 reasons to accept non-cash payments

As a business owner, lowering costs and improving cash flow is essential to the success of your As abusiness. businessElavon owner,has lowering costsand andsimple improving flow ispayments essential to theyour success of your innovative wayscash to accept from customers. business.

Elavon has innovative and simple ways to accept payments from your customers.

With Elavon, we can help you: With Elavon, we can help you:

1.1.

Increase sales Increase sales Increase your sales by accepting all credit and debit cards in-store, and with wallet products, Increase your sales online by accepting allmobile credit and debit ® and Google Pay™. products, According to a cardsincluding in-store,Apple onlinePay and with mobile wallet DiaryApple of Consumer Payment 2022 survey, Google Choice Pay™. According to acredit including Pay® and and debit cards accounted for 60% of payments, Diary of Consumer Payment Choice 2022 survey, creditwhile 1 cash cards only accounted and debit accountedfor for18%.

60% of payments, while 1 cash only accounted for 18%.

2.2.

Improve cash flow and operations Improve cash flow operations Access funds fromand credit and debit card transactions fast,funds including hours.

Card payments are also Access from within credit and debit card transactions secure andhours. easierCard to track than cash fast, more including within payments are and alsochecks. more secure and easier to track than cash and checks.

Your business is unique. Your payment solution be is too.

LuckyYour for you, ours are.

No matter Yourshould business unique. payment solution what your industry is or how your customers should be too. Lucky for you, ours are. No matterprefer pay,industry we have forcustomers your needs. whatto your is aorsolution how your prefer to pay, we have a solution for your needs. ¹ The 2023 findings from Diary of Consumer Payment Choice 2 Consumer trends in digital payments (mckinsey.com) ¹ The 2023 findings from Diary of Consumer Payment Choice 2 Consumer trends in digital payments (mckinsey.com) © 2023 Elavon, Inc. All rights reserved.

Elavon is a trademark in the United States

3.3.

Enhance customer convenience Enhance customer Today’s consumersconvenience expect fast payment transactions andconsumers want to payexpect their preferred way. transactions In 2022, a Today’s fast payment McKinsey found thatway.

89%Inof2022, Americans used and want to payreport their preferred a 2 some report form offound digital payment McKinsey that 89% ofmethod.

Americans used some form of digital payment method.2

4.4.

Customize your payment acceptance solutions andpayment build your base Customize your acceptance solutions and build your base Customize your payment acceptance solutions so they work for you.

Whether in-store, online, withso mobile Customize your payment acceptance solutions they wallet a terminal, mobile device integrated workusing for you.

Whethertablet, in-store, online, with or mobile walletPOS usingsolution, a terminal, mobile device or integrated youtablet, have options to accept payments POS any way. solution, you have options to accept payments any way.

5.5.

Improve security while growing customer trust Improve security while growing customer trust Protect your data with our state-of-the-art card security

andyour PCI data DSS with solutions.

Technologies such as encryption Protect our state-of-the-art card security

and/or other countries. All rights reserved. All features and specifications are subject and DSS tokenization have made credit transactions more and PCI solutions.

Technologies such as encryption © 2023toElavon, All rights reserved.

Elavon is is a prepared trademarkby in Elavon the United changeInc. without notice.

This document as aStates service for its secure, making it harder to compromise payment and/or customers. other countries.

All rights reserved.

All features specifications have made credit transactions more card The information discussed is generaland in nature and mayare notsubject apply to your and tokenization to change without notice.Apple, This document prepared

by Elavon as a serviceof forApple its Inc., specific situation. the Appleislogo, and iPhone are trademarks data during the payment process. customers.

The information general in naturePay andismay not applyoftoGoogle your LLC. secure, making it harder to compromise payment card registered in the U.S.discussed and other is countries.

Google a trademark specific situation. Apple, the Apple logo, and iPhone are trademarks of Apple Inc., data during the payment process. registered in the U.S. and other countries. Google Pay is a trademark of Google LLC.

Equal Housing Lender | Member FDIC

heritagebanknw.com

7

ECOCHALLENGE RECAP

Collective Impact & Reflections The Heritage Bank Ecochallenge is a unique initiative designed to empower individuals and teams to take measurable actions that make a difference. It provides a platform for employees to come together and address critical environmental and social issues through small, achievable actions. Done through Ecochallenge.org, we’ve been hosting this event since 2020.

During the event, participants have the opportunity to choose from a variety of challenges, each focused on a specific aspect of sustainability. These include reducing waste, conserving energy, promoting biodiversity, supporting local communities and more. Participants can select the challenges that align with their interests and values, enabling them to make a meaningful contribution in areas that resonate with them.

Through the Heritage Bank Ecochallenge, employees are encouraged to incorporate the sustainable practices into their daily routines. They then track their progress and can see the cumulative impact of their actions.

“The challenge went by so fast, but I know we’ve added some new practices to our lives to help preserve the earth for future generations.” - Amy “This challenge has raised my awareness level. I will do my best to keep up my actions that help make a difference after the challenge is over.” - Jeannie

Last year was our biggest impact yet. In just one month, 210 participants on 28 teams completed 9,673 actions, resulting in: – 42,238 gallons of water saved – 15,374 minutes spent learning – 14,475 pounds of CO2 saved – 5,803 plastic items not sent to the landfill – 1,693 miles not traveled by car (bus, foot, bike) – 1,526 reflections shared

We believe that our collective efforts can create a ripple effect and inspire others to join us in building a sustainable future.

8

Issue 12 | 2024 Q1

Banking Business a publication of Heritage Bank

Shutterstock

NONPROFIT CORNER

Tips for Improving Your Nonprofit’s Cash Flow

N

Nonprofit organizations are created and operated

for a collective, public and/or social benefit and have typically been granted tax-exempt status by the IRS. They use their cash surpluses (anything that exceeds expenses) to fulfill their mission, in contrary to an entity that operates to generate a profit for its owners, employees, shareholders, etc.

Cash flow management is therefore vital to a nonprofit’s core function of being able to effectively deliver these social services to their communities. If they run out of cash—no matter how important or successful they are in helping their clients—they’ll cease to exist.

Here’s some information on why cash flow management is important, when and how to manage your cash flow and strategies to help you effectively track your nonprofit’s finances.

The nature of cash flow Managing cash flow is one of the most challenging aspects of running an organization, especially when funds can drastically fluctuate between cycles.

Cash flow is made more difficult by the uneven nature of a nonprofit’s finances. When money flows in, it’s tempting to run more programs, increase salaries or buy new equipment. But this could hurt your cash flow long-term when donations slow but bills still need to be paid.

It’s also important to note that when cash flow is properly managed, it can help improve your organization’s creditworthiness. This can be crucial if you’re seeking loans or looking to partner with other organizations.

Each step you take to manage your cash flow now will help your organization survive long term.

Equal Housing Lender | Member FDIC

Fulfilling your mission As a nonprofit, your goal is about more than making a profit; it’s about fulfilling a mission. Whether you’re providing services, supporting a cause, researching new initiatives or funding a project, you need a healthy cash flow to carry out your activities.

Cash flow management ensures financial stability and enables you to respond to unexpected expenses or emergencies without having to pull back in other areas.

Solid financial management can also attract donors, funders and other supporters. They want to know that their contributions are being used effectively and for purposes that support your mission.

When you’re developing or starting programs, or during changes to your funding structure, it’s vital to be aware of what money you have coming in and how it’s being used.

If your nonprofit is member-based (meaning members pay fees to join), they want to see that they get a benefit for that membership. Better benefits typically mean you can attract more members, which further enhances your financial health and ability to run services.

Improving your cash flow Managing cash flow involves building projections, planning how your cash will be used and analyzing your results to see if you need to set aside cash in reserves for unexpected expenses and any upcoming financial needs.

Important considerations when forecasting: • When you set up your cash flow projection, be realistic on the timing of your income and expenses.

Nonprofit Corner, continued on page 11 heritagebanknw.com

9

Shutterstock

BUSINESS BANKING MENTOR

Assessing a New Market for Viability Many successful businesses look for ways to expand into a new market. But how do you know if the direction you are considering has the potential to be successful?

• Whether there’s a temporary, urgent demand now or whether the need for your product or service will exist in the future.

Determining viability

• If you’re occupying a specific niche and, if so, whether your niche can easily be adapted to market changes.

When assessing growth potential in new markets, make sure to review: • Market demands, such as the size and potential growth of the market; the target audience, their needs and purchasing power; and the overall industry landscape.

Consider whether there’s a demand for your product or service or if there’s a gap your business can fill.

• Financial feasibility, which will determine whether it’s worth it financially for you to enter the new market.

Explore the cost of market entry, any necessary investments in infrastructure and the costs of marketing and distribution. Compare that with your projected sales and profits to determine whether it’s financially reasonable to enter the market.

• Distribution channels to determine whether there are potential partnerships, suppliers or networks to support your business as it enters the market. Resources that already exist in the market can support your expansion and may save you money.

• Competitors and how they will affect your success. Be clear on your points of differentiation. Evaluate their strengths, weaknesses, pricing strategies, customer base and market share. Determine whether there’s room for your business to compete.

Once you’ve determined that there’s a demand and you can make a profit from the new market after any expenses are deducted, you can move ahead with the next steps.

Examining market potential

Consider what kind of potential the market has for continued growth. You could be entering a market on a short-term basis to take advantage of demand within a specific time frame, but it’s often better to seek longevity for sustainable business growth. Work to understand: 10

Issue 12 | 2024 Q1

• How quickly and efficiently you can bring your product or service to the market and earn a profit.

• Whether your good or service is one that customers will need to buy repeatedly or whether you will continuously need to generate new business.

If your business is responding to a temporary, urgent need, you’ll be more sustainable if you have the capacity to adapt your goods or services to changes in the market. You’ll also be more sustainable if you can generate repeat business.

Testing the market

Test your products or services in a new market before investing time and money committing to it. Do this by: • Exhibiting at relevant trade shows. You’ll not only get an idea of demand, but you can collect customer feedback and use that to amend your product or service for the new market.

• Visiting customers in the new market. Find out what prospective customers are looking for in your industry and how you can best help them.

• Conducting a trial or pilot by starting small. Limit your risk through short-term leases and small production runs, offering only a few products or services. Once demand is proven, you can scale up.

• Selling online first to test demand before opening locations in the new market.

Testing the market will tell you whether your hunches are correct and people are willing to pay you for your goods or services. Positive responses indicate your business can be successful and sustainable. Feedback will give you valuable information on how you can adjust to increase your chances of success.

Banking Business a publication of Heritage Bank

A new market could be a new customer type you’ve never targeted before in your current region or the same type of customer in a new region.

Nonprofit Corner, continued from page 9 • The projection should accurately match money coming in and out of your organization, rather than simply averaging income and expenses across 12 months.

• Don’t use a best-case scenario for anticipated grants. Be conservative in your estimates for how much money grantors will give. It’s much better to get more than you anticipated than less.

• If any money must be allocated for specific purposes within a set timeframe, make sure to account for this in your projections.

Planning for the future

Future consumer, economic and societal trends and situations can have significant impacts on businesses of every size, and change can happen quickly. Pay particular attention to any economic, social and industrial trends that could impact your business.

Before breaking into a new market, read local, national and international news and subscribe to news sources for your industry to get a sense of upcoming trends and historic shifts.

Follow thought leaders and experts to deepen your understanding of the business environment.

A great example of how things can change is how today’s greater “global awareness” has prompted a growing market of people and organizations that make buying decisions based on social, political or environmental factors. Concerns about climate change mean more consumers are looking for eco-friendly solutions. It’s important to know about these trends so you can determine whether they will limit or expand the growth potential of your business.

Next steps

Each industry and market has a lifecycle, so it pays to understand the state of your specific industry and market and the factors that can influence your business.

Determine the viability of your new market by getting to know the market and its needs well; examining the market potential; testing the market if possible; and understanding how economic, social and industrial trends affect your business.

Equal Housing Lender | Member FDIC

• Be sure to note any major upcoming expenses so you can prepare.

Remember that cash flow in a nonprofit is different than a business that’s for profit. You likely have restricted funds that are earmarked for certain purposes, which can complicate your financial situation. You’ll probably also have to track and report on your spending carefully, to ensure compliance with any funding covenants.

Once you’ve set up your cash flow projections, you can prioritize and plan your use of cash, anticipate issues and set aside reserves.

Other steps you can take to better manage cash flow include: • Ask suppliers to renegotiate deals, offer early payment discounts or review more favorable terms. If you haven’t queried costs for some time, it’s never too late to ask and can be especially relevant for technology-based services, such as internet hosting and telco services (where costs drop each year).

• Buy in bulk, which often comes with volume discount. Consider where you can streamline expenses through larger, but less frequent purchases.

• Investigate alternative solutions for any large costs you pay for internally, such as outsourcing or the use of contractors on an as-needed basis.

• Use any group discounts from chambers or industry groups.

• Increase your revenue by raising membership dues, expanding fundraising efforts or allow donors to automatically give monthly.

• Encourage people in your community to volunteer or contribute inkind to save paying salaries or expenses.

You may also find ways to cut back expenses related to programs or projects, provided these don’t significantly affect the quality of the program or your ability to deliver.

At Heritage, we have financing solutions tailored to help nonprofits meet their unique needs. These include tools to improve efficiency, such as online and mobile banking, merchant services, ACH and RDC services as well as lines of credit to help with cash flow gaps, program-specific loans, financing for grant cycles and flexible repayment terms.

Plus, we have a team dedicated to the nonprofit sector. They’ve spent years working with all different types of nonprofits—from schools to health care facilities to affordable housing developers—and regularly think outside the box when it comes to effectively and efficiently running your organization.

Visit heritagebanknw.com to connect with one of our experts and discuss your needs and questions. heritagebanknw.com

11

IND U ST RY P R O F I L E

Construction & Trades World events have impacted both industries by limiting access to the workforce, supply chain issues to get raw materials and delays due to increased health and safety requirements. This has resulted in much longer timeframes for jobs and projects to be completed (and the consequential cost increase).

Construction is a major contributor to the economy and demand supports a wide range of other economic activity.

Trade businesses compete with other tradespeople (or “tradies”) and the DIY industry. People love to tackle a good home project, with many homeowners attempting their own repair or renovation. As competition among tradies rises and new digital tools become available, the need to automate business administration, marketing and sales will increase.

Success Characteristics

Experts in construction and trades should ensure they are: – Soliciting referrals and repeat business – Developing partnerships and strategic alliances to collaborate when tendering – Establishing a great reputation for credibility, quality work and delivering on promises – Maintaining a strong health and safety track record

– Leveraging instant payments to avoid invoicing and bad debts – Investing in hiring and retaining quality employees – Managing the ability to quickly scale to meet demand, which could also assist in driving improved productivity – Assets are well-utilized and at maximum capacity or with room for growth

Challenges

As with all industries, construction and trades have their own dynamics to manage, such as: – The cyclical nature of contracting and the amount of time to win work – New insurance premiums and added conditions to weather a crisis – Changeable weather, which can restrict outside work – Inability to access skilled labor during times of high demand – Limited ability of smaller businesses to quickly scale to take advantage of demand – The cost of training and changes in practices – Management capability, particularly when the business grows from an owner-operator to requiring line management – Collecting payments and managing cash flow/bad debts – Complying with health and safety rules and regulations (especially for trades as business grows)

Shutterstock

T

he construction and trade industry (plumbers, electricians, builders) tends to rely on wider economic factors for success, such as the number of new housing applications, zoning laws, investment by the government in key projects and inner-city development and consumers wanting home improvements/repairs.

RESOURCES

United States Environmental Protection Agency – Green Building Standards epa.gov National institute of Standards and Technology – Understanding Building Codes nist.gov The National Association of Home Builders nahb.org Monthly new residential construction statistics census.gov 12

Issue 12 | 2024 Q1

Banking Business a publication of Heritage Bank

Construction & Trade Trends Customers are more informed

When hiring tradespeople for their home improvement or any other routine maintenance job, customers want instant access to view your licenses, receive accurate quotes and keep tabs on job progress. Customers are also more aware of prices by using quote services from online sites.

trained and skilled labor, and immigration often fills the gaps.

Skilled labor is lost during quiet times with many workers leaving to work overseas permanently. This volatility also acts as a disincentive for employers to invest in training and capital equipment, preventing the sector from building and maintaining capacity.

High percentage of small businesses

Customers can now access online portals to find a tradesperson and request quotes. These customer experience management sites will play an increasing role in connecting customers with community-trusted experts in their local area.

The residential building sector is mainly made up of selfemployed builders or small building firms that build two to three houses a year in addition to repair work. This characteristic of the sector makes it hard to invest in people and capital to boost productivity.

Additionally, construction management software has improved recently, with the ability to bundle apps for bidding and estimating, project management, change orders, scheduling, human resources, billing and accounting.

Costs of building materials continue to increase (the largest cost increases will be in iron, steel, manufactured steel products and softwood construction lumber).

The rise of online trade portals & better software

Growing material costs

The use of mobile payments

Augmented Reality (AR)

No more cash jobs

Drones are also being used to collect data, complete safety inspections and reduce the time required for progress reporting s well as to access remote locations, reducing safety risks to staff.

Contractors will typically ask for payment as soon as the job is completed, reducing invoicing needs and the rate of bad debts. Card devices for your mobile phone allow you to be paid on the spot.

The integration of cloud accounting software into job management apps, combined with inventory tracking systems and electronic tax invoice generation, helps tradespeople to cost and price but also reduces the cash component of the business.

Reducing mental and physical health issues

Those working in the industry face significant hazards at work, such as slips, trips and falls, especially when working from rooftops, poles and ladders. More will be forced to be address health and safety issues for themselves and staff as penalties increase for non-compliance.

Green construction

Green construction (to lower a building’s carbon footprint and to reduce the use of resources) is increasingly expected by homebuyers, renters and commercial tenants. Renewable energy will continue to grow as a percentage of overall consumption. It includes every aspect of construction from planning and design to demolition and cleanup.

Sustainability

Closely related to green construction, sustainability can be defined as preservation of the natural environment. For example, a sustainable construction project may feature designs aimed at bringing natural light into the center of a building, reducing electrical costs. Or a building can be designed to reuse drain water from sinks to flush toilets.

Highly cyclical

Construction experiences the highs and lows of the business cycle more acutely than the economy as a whole, with high volatility in employment and GDP compared to other sectors.

Periods of high demand create bottlenecks in the supply of Equal Housing Lender | Member FDIC

The industry continues to explore new ways to leverage AR such as by making pre-construction projects tangible for buyers and tenants. Being able to view partial or completed projects before they have started helps with decision making.

Variable labor force

Builders will find it necessary to invest in training to equip existing workers with the skills necessary, and they will need to invest in the tools and higher wages necessary to keep those workers satisfied and productive. Training and development will need to be an integral part of every construction company’s policy.

Seeing younger generations and more females

In the future, the average age of new trade business owners will lower as it becomes easier and easier to start a business.

Young apprentices are digital natives and will adopt trade technology faster than ever before, including using social media channels to gain new work. This includes more freelance tradies who will be comfortable with irregular income. There are large numbers of female tradies in the market as well, and this trend will continue to grow. Women worldwide are pushing towards gender equality in this traditionally male dominated industry.

CONTRIBUTOR: GARY RUSHING Gary joined Heritage in 2016. He has 46 years of experience in banking and has held positions as a loan collector, mortgage loan officer, branch manager, construction loan officer and regional manager. For the past 20 years he’s specialized in single family residence construction lending.

CONTRIBUTOR: REGINA MICHELINE Regina has been in construction lending for over 25 years. She is currently the team leader for Heritage’s construction department and focuses on single-family homes.

heritagebanknw.com

13

New Boise office brings deep Idaho ties to market

Anna Gorin Photography

BY JOHN STEARNS

14

Issue 12 | 2024 Q1

Banking Business a publication of Heritage Bank

“I

Heritage Bank might be new to Idaho, but its people are not.

BUSINESS IN THE BOISE METRO REGION

BY THE NUMBERS

think where we differentiate ourselves is we didn’t bring new employees to the market,” said Mike Trueba, a lifelong Idahoan who heads the Boise office that Heritage opened in January 2023. “We took employees from the market that have deep ties to this community… and our institution really does have a legacy connection to Idaho.”

Major industries: food processing and agri-business, manufacturing, professional services, technology

Notably, that includes Brian Vance, chairman of the bank’s parent company, Heritage Financial Corporation and former CEO of the bank. Before joining Olympia-based Heritage in 1996 as its executive vice president and chief credit officer, he worked 24 years with West One Bank, which had offices in Idaho, Utah, Oregon and Washington. Vance was born and raised in Idaho, went to high school in Homedale and had banking assignments in Idaho that included Parma, Idaho Falls and Nampa.

Over 414,000 jobs

Vance started his banking career with Idaho First National Bank, the predecessor bank to West One, and whose co-founders in 1867 included C.W. Moore, a well-known Boise figure. Ironically, Heritage Bank’s Boise office is located in the C.W. Moore building at 250 S. 5th St., Suite 660.

Trueba, senior vice president-commercial banking team leader, is among five commercial and relationship banking officers in the Boise branch, four of whom are Idaho natives, and all are deeply involved in their communities. Trueba was profiled in the second quarter 2023 edition of this magazine.

Idaho connections like Vance’s are fun to share with customers, Trueba said.

“It definitely doesn’t discount the hard work of (current CEO) Jeff Deuel and our entire executive team really getting to know the market, getting to know the customers and spending the time to truly understand what differentiates this market,” Trueba said. “I can’t say anything but positive remarks about the way that our executive team has really approached this expansion into the market.”

That includes very thoughtful interest in what makes the Boise market unique, he said.

“Our executive team has done a marvelous job, in my opinion, of really trying to learn and understand and provide value to this market with Heritage Bank—and having Brian’s connection is just a nice feather in our cap,” Trueba said.

For his part, Vance has seen his career come full circle with Heritage’s new Idaho presence. When he joined Heritage 27 years ago, the bank’s operations were limited to the Olympia region. Heritage now operates in Oregon, Washington and Idaho.

Major employers: St. Luke’s Health System, Micron, Saint Alphonsus Health System, Albertson’s, J.R. Simplot Company, HP Inc. 3rd largest metro area in the PNW In 2019, the Boise metro region grew nearly 250% faster than the national average Source: bvep.org/doing-business-here/

ABOUT OUR BOISE COMMERCIAL TEAM Combined banker experience: 96 years Volunteer hours served in 2023: 97 Charitable giving in 2023: $10,450 Top nonprofits: Junior League of Boise, Fundsy, Special Olympics Idaho, Boise Metro Chamber of Commerce

CONTACT OR VISIT 250 South 5th Street Suite 660 Boise, ID 83702 986.210.1560 Open by appointment only.

Call us to make an appointment or visit pages.services/heritagebanknw. com/boise-local to connect directly with a banker.

“When I first started with Heritage in ’96, it was beyond my wildest dreams did I ever expect that Heritage Bank would be in Idaho,” Vance said.

Now it has an office in Boise, where Vance has numerous family members.

He has Idaho property and visits the state often, “so Idaho is near and dear to me as my home state, but also where I spent half of my banking career.”

Equal Housing Lender | Member FDIC

heritagebanknw.com

15

The Boise office has spread its wings throughout the area, tapping its staff’s market and industry connections and expertise to secure loans for clients across the spectrum of Idaho industry.

Recent deals include ones in agribusiness/agriculture, manufacturing, construction, professional services and nonprofits. The office is industry agnostic but excels in those sectors and in working with businesses that might be more complex in terms of multiple layers, generations and entities, Trueba said, adding the office also has worked with companies on succession planning, business transitions and evaluating employee stock ownership plans.

Deals the bank has financed include a new tire-shredding and recycling plant in Caldwell, just west of Boise.

Another was an agribusiness client in the Magic Valley.

The credit relationship addresses everything from farm equipment, to crops, to lines of credit. The client is also doing R&D on proprietary pest control using bacteria rather than chemicals.

Aburusa, assistant vice president-senior credit analyst; Michael Bergey, vice president-senior finance officer; Dan Fisher, vice president-senior market analyst; Jason Hinde, senior vice president-senior credit officer; and Dani Neuman, loan production assistant.

Community involvement is important to the staff, too.

Jantz is on the Boise State Athletic Association board; Jones is president of the Idaho Community Reinvestment Corp. and a coach for his son’s soccer team; Thompson is a volunteer with the Eagle Rodeo and on the athletic board of directors for Rocky Mountain High School; Gamboa is involved in the local Basque community and with the Basque Center in Boise and has also coached baseball; and Trueba is treasurer for the Idaho Community Reinvestment Corp., on the board and loan committee for Region IV Development and a coach for his daughter’s YMCA team.

Trueba said it’s been a privilege working with and learning from what he considers the best commercial banking team in the Treasure and Magic valleys.

Another deal that was finalized in October includes funding for a transportation logistics company doing an acquisition that will essentially double the size of the buyer, which is a longtime family-owned and -operated company.

“The opportunity to work with such phenomenal professionals that truly have the interest of our clients and community in mind has been refreshing and pretty amazing,” he said.

Also in October, the office was working on finalizing an operating line of credit for a construction supply provider of specialty lumber.

“When you ask eight or nine people to jump off of the cliff with you and bring a new bank to market, it’s pretty humbling to have them go, especially the level and quality of the employees that we attracted,” Trueba said. “The fact that we were able to get the people we were is just very humbling for me as a leader, but then also I think speaks volumes to who Heritage Bank is and the leadership team that was able to help us make this all happen.”

Trueba said it’s fascinating getting to know clients and their businesses, some of whom the bankers have known for years through work or family.

The Boise office includes a cashless retail branch, headed by Shannon Cadwell, assistant relationship banking officer. The office also does mortgages, home equity lines of credit, consumer loans, personal checking accounts and other services.

“Our focus is definitely on the commercial end, but we can provide those services to our business owners and clients as needed,” Trueba said.

Others in the office include Kara 16

Issue 12 | 2024 Q1

Anna Gorin Photography

Trueba’s commercial team comprises four other people, all senior vice presidents: Heath Gamboa, relationship banking officer-deposits; Jeff Jones, commercial banking officer; Justin Jantz, commercial banking officer; and Noel Thompson, commercial banking officer.

Back row: Dan Fisher, Jeff Jones, Justin Jantz, Dani Neuman, Mike Trueba, Noel Thompson, Michael Bergey. Front row: Shannon Cadwell, Heath Gamboa, Kara Aburusa.

Banking Business a publication of Heritage Bank

W E A LT H S T R AT E G I E S

Retirement Questions That Have Nothing To Do With Money Shutterstock

Preparing for retirement is not entirely financial. Your degree of happiness in your “second act” may depend on some factors that don’t come with an obvious price tag.

Here are some non-monetary factors to consider as you prepare for your retirement.

What will you do with your time?

Too many people retire without any idea of what their retirement will look like. They leave work, and they can’t figure out what to do with themselves, so they grow restless. It’s important to identify what you want your retirement to look like and what you see yourself doing.

Maybe you love your career and can’t imagine not working during your retirement. There’s no hard and fast rule to your dream retirement, so it’s important to be honest with yourself. A recent Employee Benefit Research Institute Retirement Confidence Survey shows that 73% of workers expect to work for pay in retirement, whereas just 23% of retirees report that they’ve actually worked for pay.1 Having a clear vision for your retirement may help you align your financial goals. It’s important to remember that your vision for retirement may change—like deciding you don’t want to continue working after all.

Where will you live?

This is another factor in retirement happiness. If you can surround yourself with family members and friends whose company you enjoy, in a community where you can maintain old friendships and meet new people with similar interests or life experiences, that may be a plus.

If all this can occur in a walkable community with good mass transit and senior services, all the better.

How are you preparing to get around in your 80s and 90s?

The actuaries at Social Security project that the average

life expectancy for men turning 67 is 84.6 years old, and the life expectancy for women turning 67 is 87.1 years.

Some will live longer. Say you find yourself in that group.

What kind of car would you want to drive at 85 or 90? At what age would you stop driving? Lastly, if you do stop driving, who would you count on to help you go where you want to go and get out in the world?2 How will you keep up your home?

At 45, you can tackle that bathroom remodel or backyard upgrade yourself. At 75, you will probably outsource projects of that sort, whether or not you stay in your current home. You may want to move out of a single-family home and into a townhome or condo for retirement. Regardless of the size of your retirement residence, you should expect to fund minor or major repairs, and you may need to find reliable and affordable sources for gardening or landscaping.

These are the non-financial retirement questions that no pre-retiree should dismiss. Think about them as you prepare and invest for the future.

1

EBRI.org, 2023, 2 SSA.gov, 2023

The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. This material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG Suite is not affiliated with the named broker-dealer, state- or SEC-registered investment advisory firm. The opinions expressed and material provided are for general information and should not be considered a solicitation for the purchase or sale of any security.

heritagewealthstrategies.com

Heritage Wealth Strategies is a marketing name of Cetera Investment Services. Securities and insurance products are offered through Cetera Investment Services LLC (doing insurance business in CA as CFG STC Insurance Agency LLC), member FINRA/ SIPC. Advisory services are offered through Cetera Investment Advisers LLC. Neither firm is affiliated with the financial institution where investment services are offered. Investments are: *Not FDIC/NCUSIF insured *May lose value *Not financial institution guaranteed *Not a deposit *Not insured by any federal government agency. 1000 SW Broadway, Suite 2170, Portland, OR 97205, (888) 360-0052. heritagebanknw.com

17

UNDERSTANDING CASH CYCLES

Understand your cash cycle and its impact on your bottom line to maximize profit and maintain the cash health of your business. The longer your cash cycles, the longer your journey to getting paid.

What is a cash cycle?

PAYM E

OICE INV

Has to wait one month, on average, before being paid.

vs.

Same Day

JOB

Service provider

Small wheel = Fast to turn

Y M E NT PA

T

B JO

N

Large wheel = Slow to turn

A cash cycle is the time it takes you to receive payment for the product you make or the service you deliver.

Retail business

Takes payment over the counter.

Now ask yourself, do you want to ride a slow, ancient bike or a road racer?

The quicker you get cash back, the faster your business will go.

How can I shorten my cash cycles?

Switch to cash payments only or use shorter credit terms. If you invoice your customers, ask them for payment within a certain amount of days or immediately upon receipt.

T

J

B

PAYM E

O

N

Switch to

VOICE IN 18

Shorter credit terms

Cash payment

Issue 12 | 2024 Q1

or

A first step might be to measure your average cycle and set a goal for reducing it.

Banking Business a publication of Heritage Bank

Keep an eye on late payers and follow up consistently.

Be firm yet polite.

Pump more cash into your business by incentivizing early payments.

CASH Reduce the risk to your business by implementing measures to avoid credit card fraud.

Lost interest 10 days late

The effect on the bottom line A long and inefficient cash cycle doesn’t just delay payment; it hurts your overall net profit.

Lost interest 30 days late Net profit

Net profit

Net profit

Before offering credit, run credit checks with businesses your customers have received credit from in the past to ensure you don’t receive any cash punctures caused by bad debtors. Develop a standard credit reference form to give to customers in order to streamline the process.

Business is a journey Running a small business is as much about the journey as getting to the destination. Measuring your cash cycles will help you forecast your time to the destination so you reach your profit goals efficiently.

Equal Housing Lender | Member FDIC

heritagebanknw.com

19

Visit Bellingham

PNWONDERLAND

THE BEAUTY OF

V

Bellingham

BY LAUREN KRAMER

Visit Bellingham, and you can’t deny the

beauty of this city, with its winning combination of mountains, lakes, oceans and forests. Fairhaven is where the city began, a neighborhood with a rich history that’s easily experienced on a stroll through its streets and into the mom-and-pop retailers selling handmade jewelry, pottery, woodwork and art. Add the energy of a small college town replete with great bookshops, cozy cafes and restaurants and a full year-round roster of fun events on the calendar, and there’s never a bad time to visit. While the rain may drive you indoors in the winter, there’s still lots to do. Spend an afternoon browsing in the Spark Museum of Electrical Invention or attend a performance at the historic Mount Baker Theatre. And when the rain stops, there’s so much to do outside you’ll wish you had more time!

Play

Don’t let the cold weather keep you away from a brisk walk, hike or bike ride. If you’re biking, the Interurban

20

Issue 12 | 2024 Q1

Trail crisscrosses the city on a forested path that takes you on an historic bridge over the powerful, churning water of Whatcom Falls. Ready for a hike? Head to the Chanterelle Trail in Lake Whatcom Park. The five-mile round-trip hike winds 1,000 feet up the mountain and yields incredible vistas of the lake and mountains on a clear day.

There’s no better way to warm up than on the tasty creations of local craft brewers, spirit and cider makers.

The county is home to almost 20 craft breweries, most of them family-friendly establishments and many that offer a great food menu, too. If you’re in town in February, sign up for the Spirits and Cider Stroll, a downtown Bellingham festival where you can taste samples in pop-up tasting rooms while exploring the history of the downtown core.

For skiers, snowboarders and sledders, Mount Baker is just 90 minutes from the city, with long, rolling groomer trails, lots of freeride terrain and a top elevation of 5,000 feet.

If you’re a birdwatcher, bring your binoculars in March, Banking Business a publication of Heritage Bank

when migratory birds take to the Pacific Flyway and birdwatching opportunities are at their best. Head to Boulevard Park to spot herons, eagles, cormorants and harlequin ducks, or take a short drive north to the Semiahmoo Spit, close to the Canadian border. This shallow marine habitat is a great place to see loons, brant, grebes, dunlin, bufflehead and other migrating aquatic birds that flock here in high numbers.

And if you love flowers, don’t miss the Skagit Valley Tulip Festival in April. To get there, take Bellingham’s Chuckanut Drive Scenic Byway, a magnificent drive that hugs the shoreline and offers exhilarating views of the Salish Sea, Chuckanut Island and the surrounding forests. The route ends in Burlington, a quick 10-minute drive to the tulip fields, where the burst of vibrant color across acres of farmland is nothing short of inspiring.

Stay

Another great place to stay is the Leopold Hotel, a historic building in downtown Bellingham that was recently lovingly restored to its former glory. Rooms feature modern design and contemporary amenities, and the building is filled with fun communal spaces where you can grab a meal on the run, peruse books from the library or play a game of pool.

Dine

There’s nothing like a hearty soup on a cold day, and Fairhaven’s Colophon Café has been ladling locals’ favorite clam chowder, split pea soup and African peanut soup for decades.

If you’re in the mood for something meaty, choose Carnal in downtown Bellingham, where the roasted hanger steak, seared black cod and slow cooked short rib will leave your belly warm and grateful.

The Hotel Bellwether is a well-appointed boutique property located on the water. It’s just minutes from the manicured walking trails that wind past the harbor and through the waterfront, with great dining options on-site and close by. Its Lighthouse Bar and Grill often features live music and is a favorite summer hangout for locals.

And don’t forget to save space for something sweet at Pure Bliss Desserts, a delightful eatery where the cake and cupcake selection is off the charts. Whether it’s creamy coconut cake, cheesecake or a rich chocolate confection that catches your eye, this is a perfect venue for a slice of heaven paired with a glass of wine, cider or beer.

Equal Housing Lender | Member FDIC

Visit Bellingham

Need something lighter? Stop for lunch at Leaf & Ladle, a small, locally owned eatery specializing in salads, wraps and sandwiches with meat, meat-free and gluten free options. A local favorite? The vegan BLT wrap or salad which is served with an unforgettably delicious vegan tempeh coconut bacon!

Visit Bellingham

The Fairhaven Village Inn perfectly captures the Bellingham vibe. Nestled in the heart of historic Fairhaven, its 22 spacious rooms are comfortably outfitted with period furniture and is steps away from great restaurants, cafes, bookshops and independent retailers.

heritagebanknw.com

21

MY HERITAGE

DOGGED DETERMINATION

Meet a Banker, Wife, Mother and Former Musher MARGOT SWANSON

I WAS NEVER IDITAROD MATERIAL, but my youth did include mushing sled-dog teams in Alaska.

My parents got into recreational dog sledding in Alaska, where I was born and raised. They had about eight to 10 husky mixes that I helped care for as a kid, and when I was old enough, I raced a few two- and three-dog teams.

Since I was the youngest of three kids, I got the slowest dogs. I wasn’t winning any races, but I had fun.

I also enjoyed skijoring, where sled dogs attached to reins pull you on cross-country skis. Our family would take the dogs and snow machines (aka snowmobiles) on trips exploring the Alaska backcountry, often taking in a northern lights show while on our adventures.

My mom, an ICU nurse, and dad, who was in home construction, moved to Alaska from central California before I was born. My dad was a hunting and fishing enthusiast and, thinking a different occupation would afford him more time for those passions, followed my mom into nursing. Dad taught me to fish, and I love fishing in Prince William Sound, where my parents maintain a family cabin. My mom taught me the fine art of berry picking in the Alaska wilderness, particularly Alaskan blueberries, my favorite. These days, my parents split their time between Alaska and Portland, with occasional visits to a family cabin in central California.

My Alaska background is important to me. My husband, Dustin, and I are parents to one- and four-year-old kids, so we don’t get to Alaska as much as we’d like, but it’s a special trip when we do. And we always love it when mom and dad bring us fish from their Alaska catches.

I also played soccer and volleyball in high school, ran cross-country and skied cross-country (without dogs). I attended my freshman year of college at University of Alaska-Fairbanks before moving to Spokane, Washington, to attend Whitworth University, where I got a degree in business management. I then went to work for AmeriCorps for two years, first at Portland Community Reinvestment Initiatives Inc. then at Oregon Micro Enterprise Network, launching what amounted to about nine years in nonprofit fundraising.

I then became a development associate for what was then the Macdonald Center in Portland (now Maybelle Center for Community), which helps people through providing social connections, services and housing. Following that, I became the associate director of annual giving for Willamette University in Salem, Oregon, which is where I would go on to earn my MBA at night. I then spent three and a half years at the Oregon Health & Science University Foundation as the assistant director of development then associate director of development.

Photos courtesy of Margot Swanson.

From top: Margot and Dustin Swanson with their son, Harrison, 1, and daughter, Zada, 4, who’s pulling on a bull kelp stalk with Margot’s sister, out of picture. The photo is from an Oregon Coast camping trip in October. Ready to mush, Margot in 1995, at age 9, with her grandmother for a sled-dog race in Alaska.

22

Issue 12 | 2024 Q1

In mid-2017 and fresh off my MBA, I transitioned into banking, taking a role as relationship banking officer with another bank. I focused largely on banking for nonprofits and loved the work. I had my daughter, Zada, and then, when the pandemic hit and my husband and I were working from our Portland home (he’s a tax attorney) and juggling work and a toddler, I decided to take a career break to become a fulltime parent in 2021 and 2022. After our son, Harrison, was born, I stayed home for about five more months before realizing I missed the mental stimulation of work and Banking Business a publication of Heritage Bank

Shutterstock

the strong relationships I had built with my colleagues.

I joined Heritage Bank’s Durham office in Tigard, Oregon, in the Portland suburbs in January 2023 and love it. While my office is in Durham, I serve clients all over the Portland metro area. Several of the bankers I work with previously worked with me at my prior bank. As a vice president-relationship banking officer, I focus on nonprofit and commercial clients, helping meet their deposit and treasury management needs.

I’m definitely a relationship-driven person and that is what I honestly love about this work: building relationships with my clients. I love balancing that professional side of my life with my family life.

Like any working parent, there never seems to be enough time for everything you want to do. But as the kids get older, I hope Dustin and I can include them in more sports and adventurous outdoor activities. We’re both big sports fans: Portland Timbers, Portland Trail Blazers and San Francisco Giants (the latter is my parents’ influence). We took our kids to a Timbers game this year and lasted 20 minutes, but it was a start.

I’ve also become a Nebraska Cornhuskers fan through marriage.

Dustin was raised in Montana, so we bonded through growing up in smaller towns and the love of the outdoors. His family has a cabin and cherry orchard on Flathead Lake in Montana that we enjoy visiting.

I also love cooking, reading, gardening, running and hiking…when there’s time.

Life is pretty much occupied wrangling two young children. That’s where some of my Alaskan mushing experience comes in handy.

EXPORT MAPS

A new Heritage Direct feature* Choose what information is exported from online banking and in what order. This means less data manipulation and more customized reports—so importing to your accounting software (or any other reporting/tracking system you may use) is quick and easy. Plus, you only have to create an Export Map once so you can access it again as needed.

Types of information you can export: • Transactions only • Balances only • Transactions & balances Ask us how to get started. *For Heritage Direct Corporate users only.

ABOUT MARGOT SWANSON Prior to entering the financial services industry, Margot spent nine years working in nonprofit fundraising. She appreciates that both her banking and nonprofit roles have allowed her to build strong relationships with businesses and organizations that are important to the health and vibrancy of the community. As a banker, she loves providing excellent service to her clients and creating solutions that make their banking lives easier and more efficient.

Equal Housing Lender | Member FDIC

Equal Housing Lender | Member FDIC

heritagebanknw.com

23

SMALL BUSINESS

Cybersecurity Checklist Cybersecurity is a constantly changing threat landscape that can leave your organization vulnerable. Use this checklist to assess and improve your current cybersecurity measures.

Password Integrity

these records can also improve deliverability.

Implement a password policy for accessing company systems. For example, require passwords that include letters, numbers, symbols, case sensitivity and length.

You can also include in your policy how often passwords must be changed. This can usually be enforced using software settings.

You can find these records in your domain settings. If you can’t do this yourself, consult an IT expert to check these for you.

Identify when passwords are required Write a password policy Configure applications and systems to enforce the policy

Multi-Factor Authentication (MFA) MFA requires users to provide additional credentials to gain access to an application, online account or network. It usually involves a special code being sent to the user either via text message or an application installed on their phone.

Record how you’ll use MFA in your business. Adding multi-factor authentication to your accounts helps protect against many of the biggest threats to your data, such as phishing attacks, brute-force attacks and password reuse.

Choose an MFA solution for the company Choose applications where MFA is required and enforce them Set up each employee with MFA access

Email Security Lock your email so only authenticated users can send emails from your domain. Email can be hacked to send spam that appears like emails sent from your company account. Using spam filters, quarantines and the correct SPF, DKIM and DMARK records in your domain setup can all help secure your email. If you use third-party services to send email, such as e-newsletters, adding 24

Issue 12 | 2024 Q1

Consider using an email monitoring service that can check if your emails are being delivered and whether anyone is trying to use your email address to send phishing emails.

Identify all email services that send email from your domain Review email security DNS settings to identify issues and update where necessary Set up email monitoring so you can be notified of any issues

Secure Wi-Fi Make sure your networks are secured with complex passwords to prevent access by someone from outside your business. If you offer Wi-Fi access for your customers, this should be on a separate network from your internal systems.

Check that Wi-Fi networks are secured Set up a separate Wi-Fi network for customers (if needed)

Systems Access Protecting your systems (computers and networks) is crucial to protecting your business, employees’ and customers’ information. Restrict who’s allowed access to your systems and, where possible, use privileged access settings on hardware and software (for example, administrator, operator, editor, etc.). Consider measures such as locking cabinets, password protecting your computers and installing security cameras. Anti-virus and firewall software should be installed to protect against cyber threats.

Banking Business a publication of Heritage Bank

Set up user access levels where appropriate

FINANCIAL DICTIONARY

Assign appropriate access levels to each user

Cash Burn Rate

Identify systems (hardware and software) that need to be protected

Provide locked cabinets for items that must be secured physically (e.g., backup drives, cash, etc.)

Install anti-virus software and firewalls on all systems Install security cameras to monitor who is accessing systems

Regular Backups Have a system for your backups and regularly test them. Decide if you’ll use cloud-based or on-premise backups and data storage. The frequency of backup you choose depends on your business. For example, if you do several transactions every hour, you may need to back up in real time, but if you only have a few changes each day, then a daily backup may be ok. Backup systems should be automated and well-protected with passwords and MFA. If you have physical backups, keep a copy offsite in case of a fire or natural disaster.

Set up cloud-based backups for critical data Set up physical backup hardware Decide who will store physical copies and where they will be stored

Security Policies Assign a person to manage your security policies. Document your requirements. Test and implement, retesting at regular intervals to spot necessary adjustments.

Assign a person to manage security policies Create a security policy document that all staff can access Test your security policy regularly

Employee Education and Accountability Cybersecurity breaches usually begin by errors made by the people within the business. Your employees should know your security policies and why they exist. Store policies in a central place that is accessible to all employees.

Add security training to employee onboarding Educate staff about what’s in the policy and where to find it

i

For more cybersecurity tips, visit heritagebanknw.com and click the Resource Center drop-down button in the top right.

Equal Housing Lender | Member FDIC

Your cash burn rate is a critical financial metric that shows the rate at which you use your cash reserves—or your cash balance—over a specific period of time. It’s usually quoted in terms of cash spent per month. For example, if a company is said to have a burn rate of $1 million, it would mean that the company is spending $1 million per month. This metric is especially important if you’re in the early phases of your business, fundraising or seeking investors, looking to expand or scale, in a period of economic uncertainty or operating at a loss. Knowing your cash burn rate enables you to make strategic financial decisions, determine how sustainable your business is, manage your costs and plan for growth. It also helps you manage cash in times of crisis. Remember that a high cash burn rate isn’t always a bad thing. If you have a strategic plan to grow or your business has ample reserves or money coming in, it might be fine.

Your job is to make sure your burn rate aligns with your operational goals and your business remains operationally sustainable. However, it’s a good idea to be aware of your cash burn rate on an ongoing basis so you have a solid understanding of the health of your business. This will allow you to act quickly and protect your business in times where your expenses are higher than your income.

CONTRIBUTOR: ANN FISH Ann originally started at Heritage Bank in 2003 and helped open and manage two branches in Sumner and Puyallup. After leaving briefly, she returned in 2018 as a relationship banking officer. She mainly focuses on building strong relationships with her customers and helping nonprofits and local businesses with their deposit needs.

heritagebanknw.com

25

Lower rates.

Faster process.

Getting what you need to move your business forward is faster and easier with a Heritage Business Express loan.

Upgrade your facilities or equipment, purchase inventory or improve cash flow with a Heritage Business Express loan.

Plus, lower the interest rate on your loan by 0.50% with automated payments from your Heritage Bank checking account!

Fast and convenient process Minimal paperwork Competitive rates with a variety of terms available

Scan the QR code to learn more or visit bankwithheritagebanknw.com/business-express.

Equal Housing Lender | Member FDIC