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So … you’re a business owner here in Whatcom County.
You’ve lived here your whole life.
You saw the demolition of Georgia Pacific’s pulp plant, chemical plant and tissue mill on the Bellingham Waterfront.
You’ve been to the Deming Logging Show, the Northwest Washington Fair, experienced the madness of a Bellingham Roller Betty bout and/or you’ve even let your inner Michael Jackson loose at the annual Thrillingham.
Or maybe you’re like me, and you’re new(ish) to the area.
You’re still acquainting yourself to the fastest way to get from where you are to where you want to be and getting to know our local landmarks as navigational beacons.
You’re getting lost in the canopies of evergreen, the snowcapped peaks of the North Cascades, or the raspberry covered acres of the North County.
Wherever you’re at, and however you got here, one thing remains true: Whatcom County is an extremely diverse and unique region of the world, and we are extremely lucky to live here.
Since I’ve lived in the region, [and since I’ve been a MBA student] I’ve wondered, what drives the economy of Whatcom County? Who are the consumers? What are their preferences? Their needs?
These are essential answers for a small business owner to understand their community and their customers.
The table below has some of the latest US Census facts and data for several of the larger cities in the county and Whatcom County as a whole.
Although these are just some basic data points, they can help give a business owner an idea of how their target customer fits into the available customer base.
For example, if you were a residential construction & remodeling company, it would be beneficial to know how many potential households there are within your region.
You could take this a step further and estimate your potential serviceable market [i.e., how many households could be seeking a remodel]. Knowing this may aid you in forecasting your future business opportunities, which has many benefits to an owner.
After analyzing the US Census data for Whatcom County, it got me thinking: What about our friendly neighbors to the North?
I’m sure many of you have also had the pleasure of trying to go to Costco on a weekend here in Bellingham. There is no doubt that it is a mad house and that many of the license plates in the parking lot hail from British Columbia.
The relationship of the US – Canadian Exchange Rate has been shown to have large effects on Canadian consumers’ demand for products here in Whatcom County.
The US – Canadian Exchange rate has shown a considerable amount of volatility over the past year, but the Canadian dollar has been appreciating overall. [Getting closer to a 1:1 exchange ratio]
In the past year, the Canadian dollar has appreciated by about 4.4%.
While the demographics of our Northern friends are more mysterious to us, past data suggests that an appreciating Canadian dollar could increase sales to Canadian consumers in Whatcom County, as more people cross the border each month for vacation or shopping.
Although these are just a couple of factors that could affect your small business, the goal is to get you thinking.
After all, the more you understand the dynamics influencing your local economy, the better equipped your business will be to respond to your customers’ needs.
“Get closer than ever to your customers. So close that you tell them what they need well before they realize it themselves.” –Steve Jobs
If you are like me and would like to delve deeper into any of the topics covered in this blog, here are some helpful links to get you started!
US & Washington State Demographics Data:
Data on Whatcom County & Canadian Relations
Authored by: Shane Reed
Engaging Employees through Bonuses
To paraphrase John Dunne, no business owner is an island.
If you own a successful business, some credit is likely due to a fantastic employee or, even better, a bevy of fantastic employees.
Let’s say one such amazing employee has hit the wage ceiling, but you still want to recognize her efforts. Or maybe you’re about to hire a new employee you just know will be amazing and you wish to leave room for flexibility in salary.
Cash profit sharing plans, in which companies distribute a predetermined amount of profits directly to one or more employees, can be a powerful incentive for fostering employee identification with the success of the company.
They are becoming an increasingly popular offering: as part of its National Compensation Survey, the U.S. Bureau of Labor Statistics (BLS) collects data on cash profit sharing bonus payments to employees; data for 2017 indicated that 6 percent of all private industry workers had access to such bonuses.
As opposed to retirement profit sharing plans, cash profit sharing plans are generally given to employees either in the form of a regular bonus check or as an addition to the employee’s base salary, similar to a sales commission. Unlike retirement profit sharing, cash profit sharing bonuses are counted towards the employee’s taxable income.
Cash profit sharing plans can boost employee motivation, provide an employee loyalty incentive, and encourage employees’ understanding of how their work affects company performance; further, they are distributed at the discretion of the owner.
Below is a step-by-step process for implementing a cash profit sharing plan:
Determine the objective. The chosen objective should reflect the behavior or activity desired from the employee; for instance, to increase profits or encourage employee retention.
Set bonus targets. This step should be a close collaboration between the company owner and the employee, who will work together to draft a plan that caters to both the company’s specific needs and the employee’s unique contribution to the business. The target bonus may be tied to either company financial results or individual goals. Examples of company financial results include specific revenue or profit goals, such as a 5% increase to net income, while examples of individual goals include years of service or customer satisfaction.
Establish a baseline. To preserve owner’s equity, formulate a starting point based on the owner’s desired baseline take-home income and limit cash profit sharing to profits above that figure. If the company’s owner decides he wants to take a $100,000 baseline take-home income, for example, a percent of profits above that figure may be distributed to eligible employees.
Choose a cash profit sharing figure. The typical cash profit sharing range, whether tied to company financial performance or individual goals, is from 5 to 15 percent of pre-tax profits; as noted above in step 3, the owner’s desired baseline take-home income may be deducted from the total.
Decide whether to institute a vesting period. Vesting periods, which require employees to work a certain length of time to become fully eligible for a benefit, can encourage employee retention. If a vesting period makes sense for your business, clearly outline the length requirement at the start of employment.
Define the allocation date. Incentive plans may be allocated on an annual, quarterly, or monthly basis. Bonuses tied to company financial performance are typically paid annually, when the numbers are actually calculated; however, more frequent incentive calculations may produce greater short-term results. If an annual allocation makes the most sense for your business, the amount may still be distributed on a quarterly basis to serve as a more immediate reminder of the benefits of the program.
Institute a review date. Cash profit sharing plans need not—and should not—be set in stone. Establish a concrete date, typically once per year around the start of the fourth quarter, to review the plan and modify it as necessary to reflect any changes. If the plan is revised, make sure there is ample time to alert the employee to the changes before they take effect.
Develop a written plan. Ensure that the plan clearly outlines the basic terms, who is eligible, how the bonus is calculated, and length of employment requirements. It should also note the rules for unusual situations, such as the employee going on leave, becoming disabled, or leaving the company prior to the allocation date.
If a cash profit sharing plan is not the best-suited bonus structure for your company, numerous alternatives exist:
Gain sharing. Most suited to manufacturing industries, gain sharing is designed to award productivity and product quality; bonuses are granted for statistical improvements in those areas.
Spot bonus. As the name suggests, these informal awards are distributed on-the-spot for accomplishments that merit special recognition.
Non-cash bonus. Generally presented in the form of a framed certificate or trophy given at special ceremonies, execution of these awards is key: they should be appropriate to the occasion and, when executed well, will be coveted by employees.
Sign-on bonus. A one-time incentive for joining the company, sign-on bonuses typically serve to create goodwill and buy out any compensation left on the table from a former employer.
Milestone bonus. This bonus is earmarked for the achievement of a specific goal or completion of a certain project, and can be used to encourage employees to meet deadlines.
Referral bonus. Finding qualified employees can be a difficult task; referral bonuses enlist current workers in the search for talent, reducing or eliminating the need to hire recruiters.
Retention bonus. If a company is going through a merger or acquisition, or has a project that must be completed, retention bonuses may be offered under these unique circumstances to ensure continuity.
Holiday bonus. The most common of all of the bonuses outlined, a holiday bonus can be a small gift or more significant cash payout recognizing hard work throughout the year.
No matter what bonus plan is chosen, it pays to remember that engaged employees are productive employees!
Authored by: Janis Vander Ploeg-Wolfe
Sometimes marketing can be easy.
Here at the SBDC our staff has been enjoying going through Seth Godin's The Marketing Seminar (highly recommended BTW)
In one our our learning modules, Seth was explaining how sometimes marketing can be easy - like 'selling' dog food to a hungry dog.
Or how if you're gasping for breath and someone happens by at the opportune moment with a gas mask, you're not likely to ask 'how much' or 'is it made from all natural materials'.
Those are easy examples right - but how hard does marketing really have to be?
I would like to suggest not too hard.
What's that you say, you want another real world example?
Today while I was out visiting a client at their location our meeting was pleasantly interrupted by a Jimmy John's delivery guy. He was canvassing the businesses and dropping off free sample sandwiches! While they were not full size subs they were certainly enough to be considered a light lunch or decent snack (it was around 10:30 am)...perfect time to wet the appetites of potential lunch hour customers.
This is the third time I have had the good fortune to be on the receiving end of a Jimmy John's sampling effort. They stopped by our SBDC office during the holiday season. They stopped by Overflow Taps Barkley location during their grand opening when I just happened to be there. And now today's meeting crasher.
Maybe it's all that clean living catching up with me...or more than likely, an indication that Jimmy John's gets it when it comes to marketing and is willing to hustle for business by delighting people first before ever asking for an order.
Being the marketer that I am I had to ask, 'how does this sampling effort work out for you?' He responded that it works VERY well.
The lesson for today: Ask yourself, how might you be able to delight your potential customer before ever asking for an order?
Can you offer a free sample? Or at the very least a low-cost but high perceived value offering?
I'm sure you can, but if you'd like some help brainstorming ideas...give us a call here at the SBDC, maybe we'll get lucky and the Jimmy John's guys will stop by:-)
Authored by: Eric Grimstead