November 2017

November 2017

Inside This Issue: Regional Economic Review Why I Never Moved to Portland Unemployment—Geography Matters

Honoring Veterans in Autumn Splendor Winston ,Oregon

Maybe we’re wrong.

The tedious task of reviewing job applications and resumes can be mind-numbing. Or exhilarating depending on the writing skills of the applicants. It probably won’t matter anyway since the person you will choose for the position is not the one best suited for it.

We’re likely biased in directions that cause our poor choices in the hiring game. All else being equal, the tall person will win out over the short one. The one with the degree in Basket Weaving will beat the person with no degree - only experience.

Motivational speakers tell us to take chances – we just don’t think that applies to hiring decisions. It does. You want a hard worker whose loyal beyond expectations?

Hire the one passed over by his last four prospective employers because … “well, we don’t know, we just went with another applicant.” You may be surprised at how the chance to prove himself is appreciated.

We’re caught in a time that tells us every decision must be a perfect one. On paper we even believe that is possible. In reality, how many times have you made a perfect decision in your life? Not many is my guess; but things have turned out just fine, regardless.

You and I spend most of our time taking corrective action. It starts early when we learn to walk, tip to the left lean to the right, tip to the right lean to the left, staggered steps of a drunk until we figure out the secret to balance. We’re in a constant state of fixing things to make them better, to keep from falling. Or, failing.

Give someone a chance. It may be the most perfect thing you’ve done in a long time.

Greg

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A JOURNAL FOR THE ECONOMICALLY CURIOUS, PROFESSIONALLY INSPIRED AND ACUTELY MOTIVATED

Table of Contents PUBLISHERS NOTE

OTHER BUSINESS

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24 Seven Entrepreneurial Companies

Maybe We’re Wrong

ECONOMICS 5 Oregon Economic Indicators 7

Klamath & Lake Counties

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Rogue Valley

11 Tall Trees & Timber

27 Being Socially Engaged 28 Hiring & Geography 32 Tax Credit Expiration

33 Oregon Economic Forum 35 Remembering Veterans 36 Resort at Eagle Point

COMMUNITY & BUSINESS 16 How has Your Town Changed 17 Why I Never Moved to Portland 20 Smart Exit 22 Partners for Student Success

Cover Photo Courtesy of : 703 Divot Loop Sutherlin, Oregon 97479 www.southernoregonbusiness.com 541-315-6127

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Autumn Color—Winston, Oregon

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South Douglas County: Tall Trees and Timber

by Annette Shelton-Tiderman

Tall trees, sheer canyon walls, and high mountain passes help define the remote area of South Douglas County. Small towns cluster along roadsides, especially Interstate 5–vibrant rural Oregon communities affording both residents and visitors alike a sample of local fare. Whether it is a summer festival with parades and antique car shows or local high school sports with rivalries going back generations, South Douglas County’s community life is a snapshot of tradition melding with new, innovative undertakings. Halfway between southern California’s manufacturing and agricultural centers and the distribution hubs of Portland and Seattle, South Douglas County businesses are well positioned to engage in and facilitate entry of goods and services into the stream of West Coast commerce.

The South Douglas County Area, defined as Douglas County Census Tracts 1600, 1800, 1900, 2000, and 2100, covers 1,582 square miles, 31 percent of Douglas County. Although the area is home to nearly 26,000 people, one out of four Douglas County residents, density varies between census tracts. The communities of Winston and Dillard (Census Tract 1600) hug the nearby urban center of Roseburg. This tract is home to 7,600 residents crowded into nearly 32 square miles (about 240 people/square mile). In contrast, southern-most Census Tract 2100 boasts 4,200 residents across 1,300 square miles (about three people/square mile).

Economically, South Douglas County continues its long tradition of reliance on natural resources.

In contrast to the county as a whole whose largest employing industry is trade, transportation, and utilities, South Douglas County’s economy focuses on manufacturing. Nearly one out of three jobs in the area is in manufacturing – 98 percent of

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which are wood product manufacturing. Truly, it is a unique part of Douglas County.

Area Demographics – Unexpected Diversity Between Census Tracts It is common in rugged, rural areas for people to cluster around a few incorporated communities.

Throughout Douglas County, 46 percent of residents live in incorporated towns, and similarly, so do nearly 50 percent of South Douglas County area residents. However, the largest population center is the joint, residential area of incorporated Myrtle Creek (population 3,490) and neighboring unincorporated Tri-City (population 3,645). This hub, adjacent to Interstate 5, is approximately halfway between the Oregon metropolitan cities of Eugene and Medford. An industrial park south of Tri-City, having easy access to the Interstate, is ready for future commercial growth.

It is often said that demographics are destiny.

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Between 1990 and 2016, Oregon’s population increased 43 percent. Rapid growth, in turn, generates increased demand for goods and services. In contrast, Douglas County’s population, although growing steadily, increased only 17 percent. South Douglas County’s communities experienced varied demographic shifts – Canyonville and Winston saw rapid growth (58% and 43%, respectively) compared with nearby Riddle, just off Interstate 5 (4% growth). Overall, population in county unincorporated areas grew 30 percent during this

10-year period.

Rural Oregon counties typically have older populations – the same is true across the nation.

Rural South Douglas County’s demographics reflect that of the overall county. Of the area’s 25,926 residents, 20 percent are under age 18, and school-related activities are paramount in importance. Working-age residents (ages 18-64) account for 58 percent of the population (15,066); employment, housing, and providing for families tend to dominate interests.

Retirement-age individuals account for almost one out of five area residents (5,688).

Statewide, the under-18 group accounts for 22 percent of the population; workingage, 63 percent; and retirement-age, 15 percent. These three broad age groupings provide a general overview of the population and help characterize basic categories of likely demand for goods and services. However, a more detailed examination of the population, especially between census tracts, offers a varied perspective, especially for youth when entry-level jobs and associated educational activities are the norm.

Surprisingly, there is noticeable variation between census tracts. The tracts with younger populations are those closest to Roseburg, the county’s largest city located immediately north of the area.

Winston-Dillard (population 7,618) and Riddle-Canyonville (5,474) have the largest cohorts of children under the age of five (6.4% and 6.7%, respectively, compared with 5.1% for the county). This predominance also extends to middle school-aged residents. Tri-City and Days Creek-Glendale have the least representation for under age-15 residents. It is useful to note that 34 percent of WinstonDillard residents are under age 24; 29 percent of Riddle-Canyonville residents; 28 percent of Tri-City; 26 percent of Myrtle Creek; and nearly 17 percent of Days Creek-Glendale residents are under age 24. The retirement age cohort is most heavily represented in Days CreekGlendale.

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percent have completed no more than high school. One out of three has attended college, but less than 10 percent have an associate’s degree, and 16 percent have a minimum of a bachelor’s degree.

Educational Attainment and its Impacts on Financial Well-Being In addition to age-related differences in demands for goods and services, educational attainment also influences expectations and opportunities.

From a workforce perspective, 66 percent of Oregon’s projected job openings (2014-2024), will require no more than high school completion. To be competitive, 46 percent of jobs will require a minimum of high school completion. However, jobs that may once have relied on basic high school completion are changing as the global economy expands from more urban centers to smaller communities.

Educational attainment varies from one geography to another with notable differences between urban and rural areas. For Oregon’s population ages 25 and older, 10 percent have not completed high school; 24 percent have completed only high school – an achievement often considered a minimum requirement for competitiveness in the job market. Additionally, although 26 percent have attended college, only 8 percent of Oregonians have an associate’s degree. Roughly, one out of three has a bachelor’s degree or more.

Rural southwestern Oregon education completion rates are notably lower. In Douglas County, 11 percent of working age residents (ages 25 and older) have not completed high school, and 32

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In marked contrast, at the lower-end of educational attainment, nearly 14 percent of South Douglas County residents have not completed high school.

Thirty-seven percent of residents have completed only high school; 9 percent have an associate’s degree, and 9 percent have a bachelor’s or higher degree. Given that half the population has no more than high school completion, in today’s expanding and ever-changing economy, this level of education is likely to limit opportunities for individuals as well as business and economic development interests.

(Note: restricting the perspective to those aged 25 to 64, considered prime working age, shows comparable percentages.)

Over the years, there have been numerous studies and reports regarding the impact of education on financial well-being. U.S. Census Bureau’s summary statistics indicate a strong correlation between educational attainment and percent of people in poverty. As mentioned above, South Douglas County residents have a lower high school completion rate than overall county or statewide residents. This discrepancy is clear when comparing poverty rates across age groups and regions.

In 2014, the overall, national poverty rate for people aged 25 and older was 12 percent. Those without a high school diploma had a poverty rate of 29 percent; those with a bachelor’s degree or higher had a poverty rate of 5 percent. Oregon’s 2015 poverty rate was 16.5 percent; Douglas County’s poverty rate was 19.3 percent; and South Douglas County’s was 23.3 percent. For those with less than high school completion, the poverty rates were much higher: Oregon, 27 percent; Douglas County, 25 percent; and South Douglas County, 28 percent.

Douglas County typically ranks among Oregon’s top 10 counties for high poverty rates. The Oregon Department of Human Services, Office of

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Forecasting, Research, and Analysis has defined the Winston-Dillard Census Tract and the Myrtle Creek, Tri-City, and the Riddle-Canyonville Census Tracts “high priority hotspots.”

The South Douglas County Industry Mix and Wages Southwestern Oregon, long considered a natural resource-reliant region, has historically depended on timber, fishing, and tourism for its economic base. This focus influences wages. Overall, the South Douglas County average annual wage is $39,845; this is comparable to the county’s average ($37,954).

However, it is roughly four-fifths of the state’s average wage ($48,322). To put this into perspective, it is useful to compare the per capita personal incomes (PCPI) of these regions – the PCPI is a statistic often used to gauge an area’s economic well-being or standard of living. The combined per capita personal income of the five census tracts making up South Douglas County is $19,966.

Douglas County’s is $22,591; and Oregon’s is $27,684 (based on data from the American Community Survey 20112015). An effect of this difference is that South Douglas County has less economic capacity to invest in community development than Douglas County or the state.

An examination of both private and public sectors’ employment on an industry basis shows some differences when compared with Douglas County as well as with the state. Trade, transportation, and utilities is the largest employing sector in both Oregon and Douglas County (average wages $41,346 and

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$32,593, respectively). Retail trade accounts for 64 percent of Douglas County’s trade-related sector (average wage $25,337) and 58 percent of Oregon’s largest sector (average wage $29,095). South Douglas County’s largest employing sector is manufacturing (average wage $49,572), which accounts for 31 percent of the area’s employment. Nearly all manufacturing employees work in wood product manufacturing. Other industry sectors also reflect regional infrastructural differences, e.g., the health care and social assistance sector accounts for about 4 percent of South Douglas County’s employment; this sector offers employment to 16 percent of Douglas County workers and 14 percent of workers statewide.

Occupations and Opportunities There are wide varieties of occupations found both within and across industries. Some occupations are very specific to a particular industry (e.g., physical therapists find employment in the health care and social assistance arena), while some occupations find opportunities across a broad spectrum of businesses (e.g., accountants).

When looking at industry wages, it is important to take the range of occupations into account. An industry such

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as manufacturing tends to have a large number of skilled workers – more so than accommodation and food services. The professional and business services industry includes a wide range of employment opportunities that varies from urban to rural area. For example, in an urban community there are more accountants, engineers, attorneys, etc. than are employed in a smaller, more rural area.

Thus, the types of opportunities and wages for those working in this industry will depend on the size of the community, its commuting distance to more urban centers, and proximity to institutions of higher education – especially important for those in scientific occupations.

Retaining and Attracting Residents, Some Considerations Regardless of whether an individual is just entering the workforce or is preparing to retire, availability of housing is always a concern. In keeping with the lower wages, the South Douglas County area’s cost of housing is notably less than other parts of the state. Forty-nine percent of the area’s owner-occupied housing units cost less than $150,000. In comparison, Douglas County’s lower-cost housing accounts for 40 percent of units; and Oregon, 22 percent. The age of housing inventory contributes to the cost differences. Twothirds of area housing predates 1980, as does 60 percent of Douglas County housing, and 55 percent of Oregon’s housing.

Aging inventory, location, and condition – especially in areas where winter weather presents additional maintenance concerns – all impose constraints for those wanting to live and work in the South Douglas County area.

Summary

South Douglas County’s rugged, timbered geography and community access to transportation networks affect not only the industry mix but also the occupations available for employment. Rural southwestern Oregon has fewer people employed in management, business, science, and artsrelated occupations than the state. However, Douglas County as well as the South Douglas County area offers more opportunities to work in natural resources, construction, and related jobs (often seasonal and part-time). Reflecting the area’s focus on manufacturing, opportunities to work in production, transportation, and material moving occupations outweigh those offered in the county or statewide.

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As was true in the 1800s when adventurous individuals traveled the West Coast’s north-south roads in search of gold and easily tillable land, the South Douglas County area continues to take advantage of its location. It provides the longstanding nexus that still efficiently connects California markets with those in Portland and Seattle. For communities close to Roseburg, just north of the Winston-Dillard census tract, additional employment and educational opportunities are within easy commuting distance. The southernmost census tracts have access to Grants Pass and more urban Medford to the south for expanded employment and educational possibilities.

The extensive tracts of forestlands influence the industry mix and occupational opportunities – not even the county as a whole has the manufacturing focus as this area. In addition, given recent developments of cross-laminated timber products – nationally led by D.R. Johnson Lumber Company in Riddle, South Douglas County continues to be well positioned to facilitate the expansion and distribution of goods and services into the

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mainstream of national commerce.

Supporting the capacity to economically transport bulky wood products and thus fully engage in the national economy are rail connections provided by the Union Pacific Railroad Company and Central Oregon and Pacific Railroad, a member of the vast Genesee and Wyoming Corporation’s family of shortline railroads.

In addition to the forest products-based industry focus, the area offers a variety of outdoor and tourist-related opportunities.

Hiking, camping, or panning for gold in the mountain streams attract visitors.

Additionally, the area boasts such nationally advertised attractions as Seven Feathers Casino Resort in Canyonville, one of Oregon’s tourist destinations; and Winston’s Wildlife Safari, an internationally recognized non-profit wildlife park dedicated to conservation, education and research of native and exotic wildlife.

Truly, South Douglas County is a diverse and unique part of southwestern Oregon.

How Has Your Town Changed?

By: Becky McCray and Deb Brown

http://saveyour.town/

Ways to save your small town

I spent the better part of an hour on the phone with a tourism colleague describing my town. I may have learned more than he did.

When we talked about the local tourism assets, I found myself starting with our old standbys: the natural resource assets from nearby areas, things like the state parks, sand dunes, caverns and lake. These are the things I remember visiting when I was growing up. It goes back further than that. When I was an antiques dealer, I came across some really old tourism brochures for our town. Guess what they talked about? That's right; these same things I just listed.

Then I realized our town has really changed in the past 10 years.

We have a thriving arts and culture scene, but I'm not sure we're doing much with that for tourism. We have impressive new sports fields and facilities that draw lots of families for tournaments, but I don't think we have any program to let them know what else there is to do in town. It's a very different tourism picture that that out-of-date version.

Then we talked about some more up-to-date ways to do regional cooperation, besides just listing off the neighboring towns' natural resources.

I really do think I learned more than him because it was such a good chance to think about how things have changed. I'm not a key player here, just a regular chamber member, so I don't spend a lot of time thinking about our tourism trends locally.

Autumn in Southern Oregon

That's your homework, too: spend some time explaining your town to someone. It can be a peer in your industry, someone new to town, or someone from across the world. Notice what comes up first and what you think of when you dig deep.

Keep shaping the future of your town, Becky

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Photo by Sarah Kobos

Why I Never Moved to Portland I was always going to move to Portland. For years, that was my escape plan.

by Sarah Kobos

Back in the mid-nineties, I moved home to Tulsa from Colorado because my folks were getting older and I wanted to be nearby. I also had two aunts who lived on a farm about an hour and half away, and it was a pleasure to spend weekends helping them with the cattle and the land—a nice respite from five days of computer screens and corporate life. Still, Oklahoma was the place where I grew up, not the place I felt most at home. My plan was to stick around as long as I had old folks to take care of, and then launch the escape pod for lovely, liberal Portland, OR. It didn’t work out that way. But I got something much better by hanging around.

Back in the nineties, Tulsa wasn’t exactly a showcase. A couple oil busts and a lot of corporate mergers had packed a wallop to the city’s Southern Oregon Business Journal

If this is what your downtown looks like at night, you've got problems.

(Photo by Sarah Kobos)

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self-esteem. The can-do spirit of the early oil pioneers had fizzled as we watched homegrown corporations, one after the other, get bought out and moved to Houston and other hub cities. People who stayed had their reasons, but “it’s a nice place to raise children” is not exactly a siren’s song when you’re 27, single, and gay.

In those days, Tulsa was a place where downtown workers would get in their cars and drive to lunch because there were so few options available in the city center. Ironically, lunch was the busy time. Most restaurants closed at 2pm. I can remember exactly three places you could go for a drink after work within walking distance of the tallest building in the state.

offer input on street design plans in Tulsa, OK. (Photo by Sarah Kobos) My advice for young adults everywhere is this: pick an issue you’re passionate about and volunteer. (Here's advice from Kea Wilson on how to do just that.) You’ll meet people who care about the same things, and more importantly, you’ll be DOING SOMETHING to make the world a better place.

I hadn’t found my place, I hadn’t found my people, and I wanted out.

But somewhere along the way, I got involved. The real beauty of mid-sized cities is that if you’re passionate and willing to work, you can jump in and have an impact. No one cares about your net worth; they care about your work ethic. You can serve on non-profit boards, volunteer your time, or simply become an advocate for change, working to solve problems that have a tangible impact on your community. And if you show up willing to work—if you’re sincere and rational and come prepared—it won’t be long before you’re on a first-name basis with the mayor and members of the city council.

For me, I can remember the night that changed my life. I attended a meeting of the Tulsa Sierra Club, at the time a somewhat demoralized assembly of aging hippies, concerned about the environment but outgunned by the powerful oil interests that run the state.

Cycling advocates perform site visits and

The speaker that night was a local developer who was the first person I ever heard talk about urban design and walkability. Having lived in historic neighborhoods in Lexington, KY and Colorado Springs, I knew exactly what he was talking about. He was describing the kinds of places I loved, but he wasn’t talking about the past. He was talking about creating new places that were great for people—how intelligent infill that respected traditional building patterns and walkable, human-scaled design could revitalize a destitute area near downtown.

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Members of Tulsa's Bicycle Pedestrian Advocacy Committee working with neighbors on a traffic calming exercise.

(Photo by Sarah Kobos)

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This one presentation by a single individual was the impetus that changed my life. It set me on a path of community advocacy focused on active transportation, downtown revitalization, historic preservation, and, eventually, Strong Towns.

Along the way, I found my purpose, my people and my reason for staying in Tulsa.

Now, when people ask me about Portland, I wonder: What would I do there? How would I spend my time?

I love Portland for the quality of life that’s built into the city’s bones. Portland oozes great urban design and neighborhood character. Small blocks, connected street grids, walkable neighborhood centers, terrific bike and transit infrastructure, appreciation for historic buildings and architecture…

And, while Portland's not without its problems, so many of the things I spend my time fighting for, they’ve already got. They don’t need me.

Here in Tulsa, we’re working on it. In the past few years we’ve updated our comprehensive plan and our zoning code, with an emphasis on adding walkable, mixed-use design back into the regulatory toolbox (traditional building forms were essentially illegal under the old zoning code).

We passed a voter initiative for dedicated transit funding along with Bus Rapid Transit in two critical corridors. Our Planning Commission unanimously approved the GoPlan, a bicycle/ pedestrian master plan for the entire region.

And downtown has seen close to a billion dollars in private investment over the past decade or so.

The energy is palpable as young people, for the first time in my life, are returning home to start businesses and invest their energies in their hometown. They’ve been to the big cities—the glamorous but unaffordable meccas—and they’ve realized the potential that exists right here at home.

They’ve discovered the perks of a low cost of living,

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and how it opens up a lot of room for creativity. They’re starting to see the impact you can have when you create something new from the ground up in a community that craves and respects your contributions.

As one of our city councilors likes to say “You can move to New York or San Francisco and work for someone else, or you can come to Tulsa and create something all your own.” I love that.

There’s so much potential here. We’ve made great strides but we still have a very long way to go. There are so many problems that need to be solved, so many battles still to be won.

So I guess I’m not going anywhere.

Everyone needs a hobby, right?

Sarah

Kobos

has been a regular contributor for Strong Towns since 2016. She is an urban design nerd and community activist from Tulsa, OK. Her superpower is the ability to transform almost any topic into a conversation about zoning. Whenever possible, she explores other cities and writes about urban design and land use issues at AccidentalUrbanist.com.

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Value Is a Function of Growing Assets With Manageable, Declining Risk By: John Anderson MS Management Smart Business Exit Series

Every day you go to work, your intent is to get more jobs in, finished and out the door. At least as often as once a month, business owners typically reconcile the books to the bank and review the profit and loss statement.

That’s good, but to prepare for your Smart Exit™, you need to do more … much more. On any particular day, you could post a “For Sale” sign and sell “as is.” Or, like selling a car, you could wash it, change the oil and give it a tune up, then advertise and sell it for more. You can do “For Sale By Owner” or get help from a real estate agent, business broker or consultant with specialized ownership transfer knowledge. In large organizations, this process is called mergers and acquisitions.

Here’s the 4-step method for successful small business transfer I’ve developed: 1. Deliver Customer Delight. Grow an efficient venture that delights your customers.

2. Teach Staff to Steer. Train and develop your staff to operate and steer the business, based upon written policies and procedures. Identify new leader prospects. Support leader candidates – who wants it most?

3. Implement Financial and Management Controls. Monitor company performance, keeping close reins as staff and the new leader(s) practice with less of your direct involvement.

4. Make Your Smart Exit™. Smoothly and gracefully,

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transfer responsibilities, leadership and ownership to make a Smart Exit™ and go on to your next opportunity, enterprise or retirement.

My list of the tools and machinery needed to achieve these steps includes: Reliable Accounting a) Daily update your sales and purchases in your business management and accounting software. If you have a bookkeeper, great, but you need to understand your accounting, and be able to operate it to hire, train, evaluate and know when to terminate bookkeepers. It’s your money and no one will manage it better than you. Get help with finances, but don’t abdicate your responsibility. b) Compare bank activity to your accounting and reconcile every few days. If you maintain a large cash balance, you can reconcile monthly. It’s a “red flag” if you’re using what the bank says your balance is to evaluate your cash position and make management decisions. c) Categorize transactions in your books with a carefully designed Chart of Accounts. Make major accounts in direct line with tax return categories and sub-accounts for management analysis.

Strategic Planning a) Set your target Smart Exit™ date and dollar. Then establish milestones from today towards those

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targets. Depending upon your business and personal life, consider defining three to 10 milestone achievements. b) Conduct scenario planning with probable, best and worst-case projections for the current and a few future years towards your first milestone. c) List ideas to improve and sustain your business this month, quarter and year. Use project management methods with these initiatives. Get input from staff, your spouse and possibly support from family or a close friend. Create a strategy for “how” you’ll achieve that first milestone with dates and actions using text and numbers. Have a “Plan A and B.” Test which works best, then take the next step and repeat with new Plan A’s and B’s. Dig into your business model description, clarifying the value proposition your business offers.

Business Valuation a) Itemize your tangible and intangible assets, liabilities and obligations for an explicit understanding you can share with your spouse, key staff and new leader candidates about ongoing commitments which must be fulfilled to stay in business. These spreadsheets can assist you in estimating the value of your business. b) Ask your accountant or tax preparer what they know about business valuation and tell them the value you estimate. Search for businesses for sale or ones which have recently sold that are similar to yours. Develop trust relationships with experts to assist you. c) Each year, declare the value of the business and your evidence to support the claim. Every three to 10 years hire a certified valuation expert.

your promise to customers. Build trust and confidence in all your relationships.

Does this sound like a big project? It is, but you can do as much or as little as time and resources allow. How much are you depending upon the proceeds from selling your business to augment your savings and Social Security? What would you like in net sale proceeds after taxes? What is a wise level of risk for you during the next five to 20 years? Read the book Smart Exit™: Steer Your Business To Success. Complete the Smart Exit™ Companion Workbook exercises in the book or using the Smart Exit™ online app.

We’ll show you how you can learn, practice and perfect your methods, to improve your business value and transfer leadership for your Smart Exit.

If you make the sale of your business a one-person project, you’re missing the point!

I believe the best way most business owners can convert their many years of effort and tens of thousands of dollars invested is as a team project.

There will probably be only one or two new leaders who earn an ownership interest and replace you, but maybe there will be more. Regardless, it will take the whole team’s dedication to the new operation going forward.

I suggest you plan to gradually step away. Be ready to jump in when needed, to avert disasters. Watch and help when called upon as the new leader(s) and team learn to navigate in our rapidly evolving economic, cultural and technological environment. Remember, business value is influenced by both increasing profit (assets) and reducing risk (liabilities). Blueprint your operation for your Smart Exit™.

Communications a) In all that your firm says and does, communicate the vision, mission, purpose, your culture, your brand and the “why” of what you do. b) Engage and develop a team of supporters, stakeholders, customers and employees to build and document your fulfillment process. c) Develop win/win written agreements with vendors, employees and stockholders to fulfill

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John E. Anderson, CEO of Be Cause Business Resources and Author of Smart Exit™ Steer Your Business to Success and Companion Workbook. www.becausebusiness.com • www.smart-exit.com

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Sutherlin company hosts local students exploring job options Expanding Horizons camps organizers say they want to expose kids to potential career ideas – and, moreover, to jobs offered by local employers. It’s a “grow your own” workforce mentality that aims to boost the local economy.

That spirit was in evidence on the third day of the early August Discover the Engineer in You summer camp, when students got to tour Orenco Systems Inc. in Sutherlin.

Camp participants and their Oregon State University student instructors were welcomed

by Orenco Marketing & Training Manager Angela Bounds-Antonio. She explained that Orenco was launched in 1981 to address failures in area wastewater systems.

people like you, who are interested in science and technology. It gives you an opportunity to live here and pursue the things you like.”

“A lot of what we manufacture, what our engineers are working on, is about solving people’s problems,” she said. “And it started with doing research on sand filters and septic waste in Glide.”

Since then, the company has become an industry leader in designing and manufacturing affordable, “green” wastewater technologies for properties and communities that are not hooked up to city sewers or whose sewers are failing or at capacity.

Following Bounds-Antonio’s introduction, Orenco Vice President of Operations Jeff Ball escorted visitors through numerous work sites at the plant’s 26-acre facility. Ball prefaced the tour by telling students “we do a lot of cool stuff and we do it here because we love living in Douglas County.

“That’s why we try to make it appealing to

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For nearly 90 minutes, Ball led students in and out of plant buildings, describing what workers were producing. Some positions require no more education than a high school diploma, he said, and almost all the required training would be given on the job.

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Ball agreed that employer-student connections can be useful to the community at large.

“We’re hiring a half-dozen to a dozen people a week, and we are finding that people don’t have any idea what we do,” he said. “We’ve decided to make an effort to let the community, especially potential employees and their friends and relatives, to let them know that we have an awesome place to work.”

Ball said although the company is a for-profit venture, he believes it’s not just all about making money.

“We’re doing good things for the planet, also,” he said.

Lacey Ferguson, program coordinator for the Umpqua Valley STEAM Hub, which helps fund and organize the Expanding Horizons summer camps across Douglas County, said the Orenco field trip was a great way to open students’ eyes to the variety of career opportunities close to home.

He might have made some headway with 12-year-old student Anderson Harris of Roseburg. Anderson thanked Ball for the tour with the observation, “What I liked best were the metal shavings. And the cookies.”

Gwen Soderberg-Chase

DCPSS Executive Director Douglas County Partners for Student Success http://www.dcpss.org/contact/

“I believe that this experience is getting us one step closer to bridging local youth with local industry to promote career education in Douglas County,” Ferguson said.

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Business Oregon Supports Seven Entrepreneurial Companies at Venture Capital Events in Central Oregon Business Oregon is arranging financing for five entrepreneurial companies participating at the Bend Venture Conference this week and two companies at the Bend Outdoor Worx Venture Out Festival in Bend, Oregon.

In all, the loans will likely amount to $860,000 in capital for the firms to access.

The Bend Venture Conference takes place each year to celebrate entrepreneurship and allow promising business startups to conduct financing pitches and vie for angel funding in three categories. Venture Out is in its second year and the only funding event focused solely on the outdoor products industry.

“Small businesses and innovative entrepreneurs help drive Oregon’s thriving economy,” Governor Brown said. “It’s important that we encourage a spirit of entrepreneurism and invest in local businesses in all corners of the state, and I couldn’t be more thrilled to attend this year’s Bend Venture Conference.

Business Oregon is using two of its financing programs for these companies. First, a direct loan program targeted for entrepreneurs, the Entrepreneurial Development Loan fund. The other is the Small Business Expansion Program, a newer financing solution fit for situations in between "almost bankable" and angel or venture capital deals. This pilot program allows businesses to pay a periodic

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revenue payment as a percentage of net sales combined with scheduled monthly payments of principal and interest.

“Business Oregon supports entrepreneurs across the state, their ideas are an investment in Oregon’s future prosperity,” said Chris Harder, director of Business Oregon.

“These events are also a great way to connect innovative companies to the different financing tools we can offer that may be a better fit than equity financing.

Last year, more than 600 attendees, 50 prominent investors, and 89 companies participated at the Bend Venture Conference, the 2017 event took place this week.

The companies Business Oregon is pursuing financing with are:

Mountain Mels Produces a line of herbal first aid goods for active outdoor adventure seekers. They also have a line of medicinal herbal teas.

Rugged Thread Rugged Thread specializes in technical sewing, repair, alteration, and tailoring of outdoor adventure clothing and gear. They work on technical ski and snowboard clothing, motorcycle clothing, tents, backpacks, sleeping bags, camper zippers, soft-sided luggage, boat and RV canvas, sails, and more.

Voilà Coffee Voilà manufactures specialty instant coffee using coffee from top US specialty coffee roasters. Voilà operates primarily as a monthly subscription sold direct to consumers.

Customers order online and then choose how many cups per month they would like, customize their taste preferences, etc.

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InvestiPro InvestiPro is the first fully-automated SaaS platform for conducting effective and compliant internal workplace investigations. Not just forms and guidance, but a cloud-based platform that guides through the investigation start to finish that doesn't require HR or investigation experience.

Drone Compiler Drone Complier is SaaS software, providing regulatory and industry compliance management software and data management solutions, enabling enterprise companies to manage compliance, improve safety, and simplify the integration of unmanned systems.

LeadMethod, Inc. LeadMethod is a Channel Revenue Optimization software company, providing businesses that sell through a network of channel partners and distributors with the critical feedback and sales data they need to

understand their sales pipeline and increase revenue.

LEVRUM Levrum is entering the $1.5B municipal predictive analytics market.

Levrum's current product suite helps cities save lives, property, and money by efficiently deploying emergency resources. Levrum is capitalizing on the move from retrospective data analysis to predictive modeling and machine learning.

Business Oregon, the state's economic development agency, invests in Oregon businesses, communities, and people to promote a globally competitive, diverse, and inclusive economy. Our services span rural community development and infrastructure financing; business retention, expansion and recruitment; export promotion and international trade; investments in industry research and development and entrepreneurship; small business assistance; and support for arts and cultural organizations. Learn more at www.oregon4biz.com

The Bend Venture Conference, hosted by EDCO, is the largest Angel Conference in the Pacific Northwest.

Last year, over 600 attendees, 50 prominent investors, and 89 companies joined us for a celebration of entrepreneurship and innovation. Investments, awards, and prizes of nearly $4 million opened the opportunity for multiple winners at the 2016 conference!

The 2017 Bend Venture Conference will feature three competition categories: Early Stage,

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Growth Stage, and Social Impact with five finalists (companies) selected in each category.

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Growth Stage Competition – this category is open to companies that have a proven concept, have generated initial revenues and are prepared to scale quickly with investment. Companies can be located anywhere in the U.S.

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Early Stage Competition – this category is open to companies that have a great idea and are close to “proof of concept.” They are pre-revenue (or very early) and are in the process of testing their product in the market. Companies must be located in Central Oregon.

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Social Impact Competition – this category includes for-profit companies, whose business models are integrated with a mission to have a significant and measurable social or environmental impact. Companies should be aiming to generate long-term enterprise value and attractive returns on capital. Companies can be located anywhere in the U.S.

The Bend Venture Fund, LLC is a private investment vehicle established annually to help finance the most promising business startups emerging from the event each year.

Participation in the fund is by invitation only and limited to accredited investors. In 2016, the fund raised over $240K, allocating $140K to Hubb and $100K to RFPIO. In 2016, a second LLC, the BVC Social Impact LLC was established. In its first year the fund raised over $100K, allocating $50K to Hemex Health and $50K to OpConnect. (An additional $3.56 million in funds were committed to finalists from other institutional and private sources).

The iconic Tower Theatre sets the stage for the BVC

As the largest angel conference in the West, BVC takes place in beautiful downtown Bend at the historic Tower Theatre, creating a high level of entrepreneurial activity and energy. Throughout the day attendees hear company pitches, break away for lunch to continue high-level networking at nearby restaurants, and take an active role in voting to determine the Early Stage winner.

Having BVC in the heart of Bend is part of the tradition. The conference has been held at the Tower Theatre since its inception in 2004. After thirteen years, attendees and participants are still eager to see how the conference evolves – becoming bigger and better than previous years.

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DOWN TO BUSINESS A look at small business questions from the Southwestern Oregon Community College Small Business Development Center (SBDC).

I recently started a business. I miss the social interaction I used to have working in an office.

What can I do to feel more socially engaged?

Many small business owners find themselves feeling isolated when they leave the labor market to start a business, on their own, with no employees. Often they choose to work from home. Suddenly instead of having people around to talk with on breaks or in meetings they are alone. It’s natural for humans to want the company of others. Over the years, solo entrepreneurs have developed strategies to overcome the isolation.

The first strategy is to find a mentor to work with. This could be a colleague from the old job or an industry associate or an advisor from the local Small Business Development Center. Schedule a time to talk with your mentor about strategies they have used to overcome the same feelings you have now. Talking with a mentor will help relieve the loneliness and also provide answers to other business questions that come up.

Join a group of other entrepreneurs. This may be a civic organization or chamber of commerce or a coffee club formed to share business stories and get advice. This could even be a class at the local community college.

Entrepreneurs working together are often able to help clarify a problem and brainstorm solutions. This is a chance to build new relationships and may even help develop sales opportunities.

Get involved in the community. Volunteering some time is an opportunity to think about others and may provide a chance to open new doors. One caveat of volunteering is to balance it with other places time needs to be spent.

Operating a business has many priorities that must be addressed. If volunteering is taking too much time away from those priorities it’s not the right avenue to pursue. Volunteer time in those places that allow meeting prospective customers or suppliers for your business that way you are actually working while helping your community to improve.

Spend time with family and friends to create a healthy work/life balance. Having a successful business cannot replace important personal relationships. Spending time with loved ones can be energizing for both you and your business.

Remember to balance personal and business time in a way that is healthy for you. The answer is setting priorities and following through on obligations without over committing.

No one answer is right for everyone. Just as with a job there are times for working independently and times for engaging in social activities. Finding the right solutions may take trial and error to find the right balance.

The SWOCC Small Business Development Center is part of the Oregon SBDC Network that provides practical information and services for business success. We provide specialty assistance to both rapid growth businesses and start-ups. Our goal is to Strengthen and Support an Entrepreneurial Culture.

Many tools and resources are available to assist your business including business planning software, market research, financial analysis and referrals.

By: Arlene M. Soto CMA, Southwestern SBDC Director

Southern Oregon Business Journal

We are here to help you make your business a success!

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Unemployment Is a Geography Lesson

By Patrick Watson

According

to the Bureau of Labor Statistics (BLS), the US economy is at full employment, or close to it.

Yet it doesn’t feel that way for many Americans.

Even if you have a secure job, you probably know people who don’t.

On the other hand, many small-business owners and HR people complain that they have trouble finding qualified workers—and that’s true for well -paid, low-skill jobs too.

What gives?

My theory: it’s all about geography.

Percentages Are People In September, the US unemployment rate dropped to 4.2%. That number got overshadowed by a more disturbing 33,000-person drop in total employment, due to Hurricanes Harvey and Irma.

But 4.2% unemployment is about as low as we’ve seen in recent history. Here’s a chart showing the monthly jobless rate since 1970.

Unemployment dropped almost to the current level in 2007 and went slightly below it in 2000. In both cases, a recession began soon afterward, as you see in the gray shaded areas.

Graphs and percentages are good for illustration, but there are people inside them, so let’s talk about the raw numbers for a minute.

In September—the same month we had 4.2% national unemployment—the US had 6.8

Southern Oregon Business Journal

million unemployed people. Of those, 1.7 million had been unemployed for 27 weeks or longer.

An additional 5.1 million Americans were working “part-time for economic reasons.” In other words, they couldn’t find the full-time 28

job they wanted, so they were forced to work part-time.

All this is happening at the same time the job market is booming.

Add to that the 1.6 million “marginally attached” workers who were available to work, but hadn’t actively looked for a job in the last four weeks.

How can that be?

That means 13.5 million Americans were in some kind of employment distress last month.

And that doesn’t even include the millions who have simply dropped out of the labor force—and millions more who are employed at far lower wages than before the recession.

The map shows the average unemployment rate for the past 12 months, which helps smooth out short-term factors like the hurricanes.

The gray and maroon areas have the highest unemployment rates—7% or more. You see the affected regions: parts of the Deep

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Geography Matters Part of the problem: our 4.2% national unemployment rate disguises a lot of regional variation.

Fortunately, the BLS collects data down to the county level, which gives us a more detailed picture

South, Appalachia, the upper Midwest, the desert Southwest, Alaska, and inland California, to name a few.

Conversely, the lowest unemployment is in the Great Plains, parts of New England, and the Washington DC area.

Now, here’s a different view from the BLS,

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using August data for the metropolitan areas, the most populated parts of the national map.

Unemployment in the yellow areas is lower than average. Red areas have above-average

Generally speaking, the yellow areas are where the labor demand is. The red areas are where the unemployed people are.

in the red places should just move to the yellow places. Problem solved.

Except, it’s not that simple.

So, the solution is clear. Unemployed people

Moving Is Hard Some jobs require proximity to a certain location, others don’t.

I sit in my home office and write about economics. I could do this from almost anywhere.

Not everyone has that advantage. Factory workers have to live near the factory. Nurses must be near the hospital, waiters near the restaurant.

“Knowledge” workers tend to have more geographic flexibility but often cluster

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together anyway. So, we end up with places like lower Manhattan and Silicon Valley, filled with high-paid workers who can afford the best of everything. This drives up housing and food prices, and the general cost of living.

Contrast them with older industrial areas whose economies haven’t kept up with recent changes: Chicago, Houston, New Orleans, Atlanta, Philadelphia. They all have above-average unemployment.

Those are just metro areas. We also have an urban/rural divide. Think of places like rural West Virginia and Ohio, which lost their 30

factory and mining jobs with nothing to replace them.

This shows up in the stats. Here’s a look at job growth since 2008 in metropolitan vs. rural areas.

A stark difference.

In terms of job growth, some (not all) metro areas recovered from the recession —rural areas often haven’t.

Meanwhile, all kinds of service and retail jobs go unfilled in the tech hubs because the people who would fill them can’t afford to live there.

Even if they could somehow afford it, moving isn’t easy.

If you own a home, can you sell it for enough to pay off the note?

Or maybe only one spouse is unemployed.

Should the employed one quit so they can move and potentially end up in a strange place with both partners out of work?

What if you’re the caregiver for older relatives? You can’t leave them behind, but bringing them with you might be expensive and risky to their health.

If you have children, what are schools like in the places where jobs are plentiful? Is affordable child care available?

“They should just move” is easy to say when

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you’re a well-off financial or technology worker. But it’s often not a feasible answer for those actually facing the situation.

So, those people stay where they are and make the best of it. Frequently, it’s still better than the alternatives.

This is the kind of thing traders and economists often miss. Human beings aren’t interchangeable parts you can just slide around a map.

So what’s the answer? I wish I had one. This is a thorny problem.

I’ve seen some reports that Millennials are moving from city centers out to suburbs as their children reach school age. That may help rebalance job demand and housing costs. But it will happen slowly, if at all.

Economic transitions are always painful and frustrating. We’re in a big one right now, and I think it’s only getting started.

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Update on expiration of Oregon Residential The Residential Energy Tax Credit (RETC) administered by the Oregon Department of Energy is set to expire at the end of this year as set in law. Oregonians can currently apply for a RETC to reduce costs for qualifying home efficiency and solar investments.

During the 2017 state legislative session, there were bills proposed to extend RETC past the current 2017 sunset. Those bills were not passed by the close of the legislative session on July 7 and the RETC program will sunset December 31, 2017.

Energy Trust of Oregon does not take positions on legislation or engage in political issues. We do monitor developments at the state legislature to understand potential impacts on programs and services available for utility customers, including the availability of energy-efficiency and solar tax credits, which often factor into customers’ decision-making.

While Energy Trust does not administer tax credits, the expiration of RETC may impact Energy Trust incentive availability and amounts for certain energy efficiency and solar measures. Specific measure and incentive amount changes are not certain at this time, but we do anticipate the following impacts: •

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Solar project volume will be higher than normal through the end of 2017, leading to more frequent incentive reductions in response to demand. The Solar program will determine 2018 incentive levels during the budget planning process this fall.

Certain energy-efficiency measures that rely on a combination of RETC and Energy Trust incentives may no longer meet cost-effectiveness requirements in 2018. Without RETC, their total costs may become greater than the value of energy savings, impacting Energy Trust’s ability to provide an incentive. View our cost-effectiveness fact sheet for more details about our required cost -effectiveness calculations.

We understand that the expiration of RETC may impact your business and lead to customer questions.

Please consider the following information as you

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respond to customer questions: •

The state Residential Energy Tax Credit (RETC) is scheduled to sunset on December 31, 2017.

Energy Efficiency Measures: •

To be eligible for a RETC, qualifying equipment or devices must be purchased by December 31, 2017, and operational by April 1, 2018. Applications must be received by the Oregon Department of Energy no later than June 1, 2018.

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Home energy-efficiency improvements that can qualify for a RETC until then are listed on the Oregon Department of Energy’s website oregon.gov/energy/At-Home/Pages/RETC.aspx.

Solar Photovoltaic Systems: •

To be eligible for a RETC, solar projects must be contracted with initial deposit paid by December 31, 2017; the application must be entered into the Oregon Department of Energy’s PowerClerk platform on or before December 31, 2017; the solar system must be installed no later than April 1, 2018; and the final signed application must be received by June 1, 2018.

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Find more information on the Oregon Department of Energy’s website oregon.gov/energy/AtHome/Pages/Residential-PV.aspx.

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Energy Trust of Oregon cash incentives remain available to customers of Portland General Electric, Pacific Power, NW Natural, Cascade Natural Gas and Avista. Incentive details are available on our website at energytrust.org.

We will know more about incentive and measure impacts as we develop our 2018 budget this fall and will communicate any changes to you as they are identified. We will also provide additional information as we learn more from the Oregon Department of Energy.

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OREGON ECONOMIC FORUM A PROJECT OF THE COLLEGE OF ARTS AND SCIENCES AND ITS DEPARTMENT OF ECONOMICS

Economists Josh Lehner and Ben Hansen talked

about Oregon’s growing “Sin Economy” by informing the audience it was not the economy Aristotle mentions in his quote about virtue and vice.

The Oregon “Vice Revenues” are only 3% of the Oregon economy but it’s a healthy number at $2 billion. This number is not complete because of the two markets: The Black Market and the Legal Josh Lehner and Ben Hansen

Market.

Once the federal approval of marijuana happens (which they feel is inevitable) the entire “Sin Economy” of the U.S. will be easier to calculate and certainly much larger.

Aristotle: Virtue and Vice

Oregon is in a position to lead the nation in growing, processing and marketing products from this industry.

Alcohol and tobacco are the other two legs of the

•

Happiness is the highest good

“Sin Economy” stool. Taxation differences from

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To achieve happiness, rational humans

state to state have considerable impacts on the

must act with virtue •

Rationality is distinctly human

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Virtue is excellence

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Moral virtue is behaving in the right

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revenue stream. Consumers of tobacco products are highly influenced by the amount of tax on the products they buy.

manner, a balance between extremes

States will be forced to consider the price,

of deficiency and excess

product and tax on these items if they are going

Appropriate attitude toward pain and

to include them in the revenue picture.

pleasure

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“We are in the sweet spot of our current economic cycle. The current expansion could be expected to last another 2-3 years and is headed toward a record expansion.” – Duy “Don’t lose focus during the good times. Keep in mind what bad times could look like and prepare for them.” – Duy “The U.S. Economic resiliency is much stronger than people realize. Our recessions are much shorter than our expansions.”

– Duy “Monetary Policy is a driving force in our economy. Who will be our next Federal Reserve Chairman?” - Duy Lawrence Mishel, President Economic Policy Institute Tim Duy, Professor of Practice Dept of Economics UofO “In ten years there has been no upsurge in robotic automation.” Mishel “Consumer Technology is not the same as Production Technology. There is a growing wage gap but it is not a result of robotics or automation but a vast increase in top level wages with a stagnation at the bottom of wage scales. A lack of education or experience in technology is an excuse for keeping the lower end of the wage spectrum low. The “Skills Deficit” explanation fails. Occupational polarization has not happened since 1999.” – Mishel “We have created an economy that suppresses wage growth.” – Mishel More than 200 people were in attendance to hear from leading economic experts on the condition and forecast of the local and national economy. The October 26, 2017 event at the Portland Marriott Downtown was the 14th Annual Oregon Economic Forum.

Dr. Michael Schill, President of the University of Oregon welcomed the audience, His mention of the groundbreaking ceremony in the coming days of the $1 Billion Knight Campus provided a positive mood for the entire forum.

Michelle Weisenbach, President of the Oregon and SW Washington Market of Key Bank mentioned that it has been fifty years since the first ATM was introduced. She also said that robotics is still trying to maximize human engagement.

The overall theme of the forum was upbeat and quite optimistic about our future. The strength of the American dollar, low interest rates and sound growth in our industries should keep the economy growing. A change in Federal Reserve leadership and the impact of the dollar’s strength on exchange rates will affect international choices on their relationship with import and export agreements with the U.S.

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