Business Connection KELSO LONGVIEW
Vol. 4, No. 4 • April 2012
Kelso Longview Chamber of Commerce
Legislature’s budget impasse, regulations enliven table talk at breakfast briefing
he tabletop phone device was temperamental, but that didn’t explain the silence at the other end of the scheduled conference call at KLCC’s latest weekly legislative briefing. Apparently, legislators just didn’t have anything to report from Olympia. Still, Chamber members found plenty to talk about over breakfast. On March 12, seemingly-stymied and at odds with itself, the Washington Legislature opened a special session ordered by Governor Chris Gregoire. Meanwhile, she is “holding bills hostage,” pending settling of the budget impasse, said Lower Columbia College president Chris Bailey.
“We’re still not sure of (funding for) the LCC science building,” he said. Money was to come from an $8 million surplus fund (from building fees accumulated during historically-high community college enrollment), but recent pooling
of State funds has cast uncertainty on the allocation. Bailey said, however, that Sen. Brian Hatfield (D-Raymond) told him, “We’re working on it,” and a Zarelli (Senator, R-Ridgefield) staffer assured him, “It’s handled.” Cautious optimism prevails.
— to balance the budget, create jobs, and reform government.”
“We wouldn’t be in special session today,” said Doug Kalberg, owner of The Dog Zone in Longview, if priorities in Olympia were shifted. “From day one, they need to get the budget passed before any bills can be passed.”
“It would have to be (accomplished through) the initiative process,” said Jim Bobst, of Pacific Fibre Products, Longview. “The legislators would never cut their own throats that way.”
“If you put the rule in place, there’s (still) going to be plenty of debate (among proponents of education, labor, business, environmental issues), but nothing will be passed before the budget is passed.” Such a change, said Longview consultant Rick Winsman, “would truly conform to what the goal of the Legislature should be
In the Legislature’s five sessions during the past three years, noted Winsman, “They have yet to balance the budget. We want a system that functions on priorities.” But making a change would be no easy task.
“They will not prescribe that medicine for themselves,” agreed Frank McShane, chief operations manager at Cascade Networks, Longview. “Priorities are screwed up.” Chairman Dale Lemmons said the Chamber’s legislative committee will submit a specific suggestion to Gary Chandler (VP of Govt. Affairs, Assoc. of Washington Business), requesting him to facilitate its circulation through
MARK YOUR CALENDARS April 9 Member2Member Monthly Mailing Deadline April 11 Education Committee Meeting April10 Longview Downtowners General Meeting April 11 Lower Columbia Professionals Committee Meeting April 12 Ambassador Meeting April 17 Business After Hours • Key Bank
Government Affairs MONDAY MORNING BREAKFAST BRIEFINGS
Next meeting: April 2 7am Monticello Hotel LaRiviere Room
Centralia, WA 98531 Permit #26
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cont on page 7
Join us for
Kelso Longview Chamber Education Foundation’s 2012 Education & Business Awards
“An Evening with the Stars” Wednesday, May 2, 2012
Cowlitz Regional Conference Center
5:30 pm Social Hour 6:00 pm Dinner $35 per person / $280 table for 8 360-423-8044 ext. 16
1563 Olympia Way • Longview, WA 98632
TUNE IN every WEDNESDAY Your Chamber Connection KEDO AM1400 3– 4pm Contact the Chamber to schedule YOUR 10-minute business spotlight
IN THIS ISSUE Business Briefs . . . . . . . . . . . . . . . . . 2 Downtown Longview . . . . . . . . . . . 3 Downtown Kelso . . . . . . . . . . . . . . . 3 Business Toolbox . . . . . . . . . . . . . . . 2 President’s Message . . . . . . . . . . . . 5
• APRIL 2012
Do you know how much you need to sell to break-even? And ... Why would you only want to break-even? By Jerry D. Petrick
y guess is you have spent time talking about, calculating, and fine-tuning your ‘break-even’ point. What did this tell you? Were you surprised? What have you done differently in your business since you discovered your break-even point? What does break-even point mean? Here is a definition that may serve you: Breakeven is the level of dollars or units of sales needed (at a given cost structure) to meet the financial needs of the enterprise (and the owners) without additional investment. From an academic perspective it is usually referred to as the point where the return on an investment (sales) is exactly equal to the amount invested (expenses). I agree with this with a slight twist: Before you calculate your break-even costs add your target profit as part of the “fixed” costs. The reason to do this is to make sure you are achieving what you really want from your for profit enterprise; namely, a profit! Seeking just not to lose any money is not a winning strategy. I find that most business owners are very goal-oriented and competitive. I have also found that business owners tend to reach the targets
they hit and measure. So if they set their business plans to achieve a “break-even” level of sales without making sure there is a profit factored in, they will be frustrated and at risk of losing their business. However, if you treat your target profit as a fixed cost and drive your plans to “breakeven” at a level of sales that accomplishes the profit you seek, you will be a much happier business owner. So as a quick refresh, here is the calculation for break-even (this can be done in dollar or per unit basis): Step1: Classify Your Costs Using your most recent income statements, classify all costs as either FIXED or VARIABLE, then total each category. Actual Total Sales = $_______ Example: $150 Total Variable Costs = $_______Example: $ 38 Total Fixed Costs $22 + Target Profit $20 = $_______ Example: $ 42
Step 2: Calculate Variable Cost Percent (For every $1 of sales, what percent is spent on variable costs (those costs that change with sales volume)? Total Variable Costs (from step 1) divided by Actual Total Sales (from step 1) Total Variable Costs = $38 = 25% Actual Total Sales = $150
Step 3: Calculate Contribution Margin For every $1 of sales (after paying variable costs), what percent is left to cover fixed cost PLUS TARGETED PROFIT?
100% minus Variable Cost Percentage (from Step 2) Example: 100% - 25% = 75%
Step 4: Calculate Break-Even Sales (including your targeted profit) Break-even Sales = Total Fixed Costs Contribution Margin % Example: Total Fixed Costs $22 + $20 Target Profit (incl profit) = $42 = $56 = $_____ Contribution Margin 75% .75 cont. page 4
KELSO LONGVIEW BUSINESS CONNECTION
Four year program under consideration at LCC
A delegation from Eastern Washington State University is coming to visit Lower Columbia College April 12 to explore creating a four-year degree program here. College president Chris Bailey said new degrees available at LCC might include business administration, social work, and accounting. A four-year nursing program could also materialize, incorporating Washington State University’s strong online component and coordinated at LCC by EWSU. “It’s a good fit,” Bailey said. “They’re serious about it. They’re bringing a big team.”
Liquor board updates status of private liquor sales
Related to the implementation of Initiative 1183, Washington State Liquor Control Board policy director Rick Garza recently reported the following: •Advertising restrictions currently in place will apply once private spirits sales begin as expected on June 1. •The definition of “trade area” mentioned in the initiative will not be determined until after June 1. •310 applications have been filed for an exemption to the 10,000 square foot or larger requirement in the initiative. •1,081 applications have been received for off-premises retail sales of spirits. Most are from stores that currently sell beer and wine. •343 applications for a wine re-seller endorsement have been received. This would allow a restaurant or bar to buy wine for resale in the establishment. cont page 5
Send info on promotions, expansions, significant happenings and personnel achievements to: ajohnson@ kelsolongviewchamber.org Submissions may be edited for length, style and consistency. New members: Call the Chamber office, 360-423-8400, to arrange to be interviewed for a “mini-feature” in an upcoming issue of the Kelso Longview Business Connection.
2012 Board of Directors OFFICERS
Frank McShane, Chairman Cascade Networks, Inc. Jerri Henry, Treasurer Futcher - Henry Group
Mike Claxton, Legal Counsel , Walstead Mertsching Bill Marcum, President Kekso Longview Chamber of Commerce President/CEO
David Campbell, City of Longview Sarah Cave, PeaceHealth
Diane Craft Koelsch Senior Communities Joel Hanson KLOG/KUKN/TheWAVE
Mike Julian, Kelso Theatre Pub Bianca Lemmons Cowlitz County Title
Julie Rinard Community Home Health & Hospice George Raiter Cowlitz County Commissioner Denny Richards, City of Kelso
Ted Sprague, Cowlitz Economic Dev’p Council Neil Zick Twin City Bank
Chet Makinster City of Longview
Chamber of Commerce Team Bill Marcum, President/CEO Amy Johnson, Program Director Debbie Brock, Bookkeeper
Kelso Longview Business Connection published monthly by Kelso-Longview Chamber of Commerce 1563 Olympia Way Longview, WA 98632 360-423-8400 To advertise, call 360-423-8400 E-mail: email@example.com Ad Deadline: 20th each month
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KELSO LONGVIEW BUSINESS CONNECTION
By Dennis Weber, Longview Mayor
Salmon, Sewers and Skyways The City of Longview is proactively working on several policy areas of importance to our business community, including: participation with the Lower Columbia Fish Recovery Board (LCFRB); moving forward on new commercial regulations regarding sewer hook-ups; and joining forces to redevelop our Southwest Washington Regional Airport in Kelso. We recently secured a $190,000 state grant to monitor municipal stormwater systems in our region on behalf of LCFRB. This is a Longview-based state agency charged with coordinating efforts to restore salmon habitat in local rivers and streams. I am happy to report some progress is being made in helping protect a number of endangered species. I have represented local mayors on this board for four years. A major maintenance headache for us is hardened grease clogging our sewer lines. Repairs are costly. In fact, damage to a main line in one commercial neighborhood will cost utility customers $500,000. To prevent this from happening again, new rules are being developed to require
grease separators to be either installed or properly maintained. The city will be contacting those customers most likely to be affected by these new rules. The need for a more modern airport has been recognized by both the federal and state governments who are making significant capital grants available for expansion of the Kelso facility. The City has joined with the Port of Longview, Cowlitz County, and the City of Kelso in creating a new operations board to implement a recently approved 20-year master plan. Its goals include new hangers, a longer runway, and new commercial development. Longview is where opportunity knocks. •••
Tuesday, April 10 • 5:30pm Olde Creekside 1323 Commerce For more info contact Doug Harvey 360-636-4477
• APRIL 2012
By David Futcher, Kelso Mayor
City Manager — the Search is on! Over the next couple of months, the Kelso City Council has a big job ahead of us, as we work to replace our outgoing city manager Dennis Richards. Denny is heading to a city administrator position in Gig Harbor, nearer to his main home and family. Denny has been a strong leader for Kelso in his time here. He accomplished the library relocation to the mall, and has worked with businesses to make sure that Kelso can be a partner in their achievement of success, and not a stumbling block. This hasn’t always meant taking the easy path, but Denny’s commitment to growth in Kelso has been easy to identify. The development of the Wye property has been on the front burner for Denny’s entire tenure with Kelso. Denny has been in frequent contact with the property owners, assuring them that if there is anything Kelso can do to help, we will do it. When he saw the inoperative sign at the Three Rivers Mall, seemingly indicating an inert spot to all of I-5, he worked with mall ownership to get the sign replaced.
In our type of city, the manager is akin to the CEO of a private corporation. He is responsible for all the day-today operations, staff supervision, and management obligations. As we on the council work to replace him, we’ll be hard pressed to find someone with the dedication to Kelso that Denny Richards has provided. •••
NEXT MEETING DOWNTOWN KELSO REVITALIZATION ASSOCIATION
Wednesday, April 18th Backstage Cafe • 6pm
For more information, contact Mike Julian, 360-431-0881 firstname.lastname@example.org
PLEASE JOIN THE CITY OF KELSO TO HONOR DENNIS RICHARDS on his retirement
March 28, 2012 • 2 – 4:30pm Council Chambers, City Hall 203 S. Pacific, Kelso For info call: Shelly Timm, 360-577-3301
Red carpet roll-out
Chamber Education Foundation to present awards An Evening with the Stars
Before rolling out the red carpet at the Chamber’s popular “Evening with the Stars,” the Education and Business Awards committee works hard behind the scenes. They put together the nomination forms, determine the recipients, and organize an evening as unique and special as the awards themselves. The awards honor recipients who demonstrate outstanding standards in each of the following categories:
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Crystal Apple Award: Given to employees of local schools and colleges. A maximum of three awards will be presented. Last year’s Crystal Apple recipients: Administrative: Lisa Mustion Teacher: Brenda Crawford Teacher: Brian Mitchell
Workforce Education Awards: Recipients with achievement in providing high quality workforce education and training in Cowlitz County. A maximum of two awards will be given. Last year’s Workforce Education recipients: Workforce Best Practice: Jacki Masters, City of Longview Public Utilities Workforce Individual: Brendan Glaser, Lower Columbia College Business Excellence Award: Recipients reflect examples of excellence in business service to their customers, the Chamber,
Wednesday, May 2, 2012 Cowlitz Regional Conference Center 5:30 pm Social Hour/ 6:00 pm Dinner $35 per person / $280 table of 8 Sponsorships available An evening of celebration to show appreciation to businesses and individuals going above and beyond with their commitment aand service to better our community. For reservations or more information, please contact the Chamber Team at 360-423-8400. and the community. Three awards will be given. Last year’s Business Excellence recipients: Large Business (50+ employees): PNE Construction Small Business (50 or fewer employees): Banda’s Bouquets Business Individual: Cal Dowd, Prographyx Rising Star Award: Highlander Cycling Imports Who will be walking down the red carpet at the 2012 Education and Business Award Celebration? We hope you will join us and help congratulate this year’s award recipients.
• APRIL 2012
KELSO LONGVIEW BUSINESS CONNECTION
Business Toolbox cont. from page 2 Step 5: Check Your Calculations Does the sales level you figured actually just break even or does it give you the profits you targeted? Break-Even Sales $_________ $56 (minus) Variable Costs (multiply break-even sales by variable cost % from step 2) – $_________ $56 x 25% = $14 (equals) Contribution Dollars = $_________ $42 (minus) Fixed Costs -– $_________ $42 (from step 1) (equals) Net Profit = $_________ $ 0* * if = $0 you met your profit target; if >$0 you exceeded your profit target if <$0 you didn’t make your profit target.
The value of revisiting the break-even calculations for your business is in knowing your cost structure and how sales, costs, and profits relate. Have you calculated your break-even recently? ••• Jerry D. Petrick is Business Advisor, WSU Small Business Development Center in Longview. Contact him at 360-442-2946 or email@example.com.
Monday, June 11, 2012 Longview Country Club 1:00 pm Shotgun Start Call today to sponsor or get your team on the list to play. 360-423-8400 x16.
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The City hired Matthew Farnell, of Farnell Web Design, who collaborated with the City’s webmaster, Lori Cash, City staff and council members to create an up-to-date design and site.
KELSO LONGVIEW BUSINESS CONNECTION
Reap benefits at upcoming events
he Kelso-Longview Chamber produces two major events during the course of a year. The first is the Cowlitz County Regional Business Expo set to take place May 17, 2012, at the Cowlitz County Conference Center from 11 am to 4 pm, with our monthly Business After Hours scheduled for 5 to 8 pm at the same location. We are on track to host more than 100 businesses. Booth and table space is still available but going fast; space is limited, so call us soon to reserve your spot.
ent responsibilities within your business. The workshop schedule will be available as we get closer to the event. Plan now to attend or have your employees attend.
The second major event is the Annual Chamber Golf Classic. This year the tournament is scheduled for Monday, June 11, Bill Marcum at the Longview Country Club with a 1 pm shotgun start. So all you floggers put this on your calendar and plan to have a great time. We have availability for 30 teams and your The event will also play entry into the tournament host to nine seminars will include a tee prize, throughout the day. These lunch, awards dinner, putwill be open to any busiting contest, KP and long ness and its employees. The drive competition, lots of topics are: Search Engine fun and fellowship. The Thursday, May 17th Optimization for Your tournament committee will Cowlitz Regional Conference Business; Small Business Center • 900 – 7th Ave, Longview be contacting area busiStart Up & Development; nesses to sponsor parts of Business Expo: 11am–4pm Afterhours Reception 5 –8pm Investing in Real Estate; the tournament. SponsorSmall Business Marketing ships include; Dinner Sponwith Social Media; Best sor, Lunch Sponsor, Award Hiring Practices; Employee Benefits Plans Sponsor, Tee Prize Sponsor and several for Small Businesses; Planning for Aging more. Parents; Make Your Money Work for You; If you are interested in booth space, sponand Small Business Exit Strategies. sorships, or you just want to make sure you Each seminar is one hour and the cost is have a team in the Chamber Golf Classic, $10 per seminar or an all-seminar pass for give me a call or email at 360-423-8400 or $20 each. The all-seminar pass will allow firstname.lastname@example.org. you to attend as many of the workshops as you can fit into your day. This is a great way to include several employees with differ-
cont from page 2 •6 spirit distillers have applied to sell directly to retailers. •There are no plans to perform density studies to determine the concentration of liquor stores. DUI data will not play a role in licensing. •The LCB does not expect to hire any new enforcement officers now. Currently, the board has 1 officer for every 300 licensees. Fines and suspensions are doubled under the initiative. •Hours for the sale of liquor will be the same as those for beer and wine in restaurants and bars, from 6am to 2 am.
Some anti-alcohol advocates may plan to petition to change the rules to be more restrictive and/or to limit where in a store spirits can be displayed and sold. They also may ask the board to institute mandatory clerk training. Board members said they do not have resources for a mandatory training program. Garza updated the group on two pending court challenges; the LCB is considering contingency plans if these prevail. For more info, visit www.liq.wa.gov. –By Mark Johnson, VP Government Affairs. Article courtesy of Washington Retail Association.
Black Bears add players
Cowlitz Black Bears have signed two impact players for the upcoming season: Brian McAfee (pitcher), a freshman from Cornell University, and Corey Oswalt (third baseman), who has committed to play at UC Santa Barbara. Cowlitz Black Bears 2012 season begins June 1, with the
• APRIL 2012
first home game at Story Field in Longview June 5. Ticket packages are available by calling 360-703-3195 or online at www. cowlitzblackbears.com The Black Bears are members of the professional style, wood bat West Coast League.
Longview Self Storage celebrates a win!
Facility managers Patty Sheridan and Christy Faul won the national contest “Loving Las Vegas!” for their innovative marketing ideas for the industry. Entries were judged on originality, creativity, clarity and economic practicality. The prize is a trip to Las Vegas to enjoy the Inside Self Storage World Expo. Longview Self Storage is located at 4420 Ocean Beach Highway.
Port of Longview posts another record year
Executive Director Ken O’Hollaren reported 2011 as the fourth consecutive record-setting year at the Port of Longview. Despite a lagging economy, operating revenue has steadily climbed since 2008. The Port is anticipating another strong year in 2012. The much-anticipated Export Grain Terminal at the Port’s berth 9 began operations in February 2012 and wind energy cargo is already scheduled for import later this year. “Our cargo diversification has kept us busy throughout the economic slowdown,” said O’Hollaren. “I couldn’t be more pleased with the Port’s performance in 2011.”
• APRIL 2012
KELSO LONGVIEW BUSINESS CONNECTION
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KELSO LONGVIEW BUSINESS CONNECTION
stuff like that.” Government regulations add to a business’ costs, too.
the coalition of statewide Chambers. Hopefully, said KLCC president Bill Marcum, momentum would grow to advance the Chambers’ position “up the ladder.”
The City of Longview recently learned it has been out of compliance with federal standards affecting sewer pre-treatment. Soon, restaurants will need to demonstrate working grease traps, Makinster said. There may be ways to alleviate the burden, and very small restaurants may be able to pass inspection with an under-sink unit or by obtaining a variance. But for many, he said, “the cost could be $10,000–30,000,” if they have room. This is going to be a huge issue in town,” already causing some to worry.
cont from page 1
“Debolt (Richard DeBolt, R-Chehalis, Representative Dist. 20) indicated it will go the full 30 days,” said Winsman, of the Legislature’s special session. “Murray won’t even sit in the same room with Zarelli,” he noted. (Ed Murray, D-Seattle, is a State Senator.) “You get people on both sides that are so strong (in their positions), they won’t listen, “ said Chet Makinster, owner of Longview Booming and a Longview city councilman. “At all levels,” said McShane, “people are hanging onto extremes instead of finding middle ground and moving on. People have backed themselves into corners.” “The passion is at the extremes, yet most of us are in the middle,” added Kalberg. “the silent majority. The term is out of favor but still the reality.”
New costs, “back-breaking” regulations and ecology
As the State cuts funding, citizens can look for financial pressure applied “downward” to the local level. Counties and cities must make up lost revenue, Makinster said, “through fees, license tab rates, taxes and
“It means the chains will be the only restaurants left,” warned Dale Lemmons, of Signature Transport, Kelso. Kalberg said his dog business faced a similar problem, related to asphalt rinse water. When the inspector described required changes costing upwards of $20,000, Kalberg told him, “I can’t afford to do this,” handing the keys to the official to make his point. Later, Kalberg found a more affordable — but cumbersome — way to comply, using a pool filter system. “I’m all for ecology,” he said. “I want clean water. I don’t want to put any more (impurities) into the system than I have to. But sometimes, the requirements are backbreaking.” And sometimes, they seem like overkill. “Do we need to abide by what Puget Sound needs?” Bobst asked. “I don’t want King County telling us what to do.” The State should set basic, minimal general
PAGE 7 requirements and let localities exceed them if they choose, he said. Regulators’ broad power is a sticking point with many business owners.
The next Legislative Breakfast meeting is set for 7am, April 2 in the Monticello Hotel’s LaRiviere Room.
“There are too many people up there with no experience in the area they’re writing regulations about,” said Winsman. “They’ve never stood across the counter from an irate applicant.” “We need to get rid of the 43 people at the Department of Ecology who write regulations,” said Lemmons. “It’s not a bad thing when fewer bills get passed,” added Kalberg, quoting an unnamed former legislator.
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• APRIL 2012
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• APRIL 2012
KELSO LONGVIEW BUSINESS CONNECTION