Why Manufacturing Stays Strong in Yakima County

Manufacturers are by nature entrepreneurial. Think about Henry Ford or Bill Gates. At the time, they had a revolutionary idea that probably seemed far fetched and unattainable. The entrepreneurial spirit remains alive and present in our region; Yakima County is home to many creative and innovative companies and innovation is a big part of what keeps manufacturing strong here.

Companies in our county are making custom farm equipment, music stands, fishing lures, juice, neon signs, even the machinery that produces many of the items we use every day (Starbucks cups, McDonald’s to-go containers, plastic bread ties, etc.) and on and on.

Manufacturing in Yakima County has seen its share of ups and downs over the last couple of years, but the industry remains vital to our economy.  While overall, jobs have decreased in manufacturing and food processing, things are looking better for 2010 than in 2009. Some of our local manufacturers have had to lay off employees, but are cautiously optimistic and remain committed to keeping their business in Yakima County.

A few bright spots on the local front are:

• The expansion of Alexandria Moulding to add additional warehouse space in Moxee;
• Relocation of Stephens Metal to a newer facility in Yakima;
• Amtech Corp acquired a company and added forty more jobs to the local payroll;
• The recent opening of Liberty Bottleworks.  Liberty is producing the first American-made water bottle made out of recyclable aluminum; and
• Yakima Craft Brewing recently expanded to add a tap room to allow more production space.

Why is manufacturing so important to our region, and the United States? Manufacturers tend to pay higher wages and have better benefits than other industries.  The capital investment in plants and equipment helps support the tax base.  Manufacturing and innovation go hand in hand.

According to the American Manufacturing Association,

• The U.S is the world’s largest manufacturing economy;
• US produces 22 percent of world manufactured products; China is second at 13 percent; Japan is third at 11 percent;
• The economic impact for manufacturers is $1 = $1.40.  Meaning for every $1 in sales, it supports $1.40 in other sectors, conversely, retail is $1 = $0.58; and
• Almost 90% of all patents filed come from the manufacturing sector.

Manufacturing is vital to the Yakima County economy.  We have experienced some struggles but the innovative nature of our companies helps diversify and stabilize the employment base.  Some of our manufacturers are a well kept secret to the general public but products are known and supplied around the world.  We are confident that with our accessible northwest location, lower costs of doing business and the creative and entrepreneurial spirit we have, Yakima County will remain home to many inventive manufacturers.

Thinking about starting a business?

If you want to start your own business, you probably have some homework to do before you get started.  Find out what you need to do with a short workshop on Wednesday, February 16th from 11:30 to 1:00 p.m.  This class is perfect for you if you want to start a business, but are not sure where to start.  It includes the basic elements you need to know, what goes into a business plan, and also includes a brief self-assessment to evaluate your readiness for starting a business.

This is the first workshop in the Yakima Valley Entrepreneur Network’s ‘Working Lunch Series’, presented in partnership with SCORE.   Attend one or all of the sessions to learn what you need to get started.  Workshops are taught by professionals with real-world business experience.

• Thinking about starting a business?  Wednesday, February 16, 2011.  11:30 a.m. to 1:00 p.m.
• Business Plan Basics, Wednesday, February 23, 2011.  11:30 a.m. to 1:00 p.m.
• Financing your Business, Wednesday, March 16, 2011.  11:30 a.m. to 1:00 p.m.
• Marketing your Business, Wednesday, March 30, 2011.  11:30 a.m. to 1:00 p.m.

Held at the Central Washington Business Resource Center, 10 North 9th Street, Yakima 98901.  Classes are $10.00 each if you pre-register or $15.00 at the door and includes the price of lunch.

To register or for more information, call 509.575.1140 or email tammy@ycda.com.

Tone Up on New Tax Laws

This time of year is extremely popular for gym memberships, sales of exercise equipment and organizational supplies to appeal to those who make resolutions to exercise more, eat healthy and get organized once and for all.  It’s also a good time for small business owners to re-charge, re-prioritize and get updated on new IRS tax rules & regulations.

The IRS has an excellent summary of the new tax laws; you can also download the 2011 W-4 Forms and the Employer’s Tax Guide.  There are important changes regarding health care benefits and tax credits, general business taxes, depreciation levels and EFTPS (now mandatory).   According to the release, “During 2010, new laws, such as the Affordable Care Act and the Small Business Jobs Act of 2010, created or expanded deductions and credits that small businesses and self-employed individuals should consider when completing their tax returns and making business decisions in 2011.”  Most important reason to not procrastinate in reviewing these changes – some of these changes could retroactively affect your 2010 business taxes.

If you don’t feel like trying to decipher the IRS announcement, here’s another excellent article, Your Small Business Tax-Change Scorecard for ’11 (Carol Tice), from Entrepreneur.com, which includes a nice summary of the new changes.

Independent contractors are not exempt from tax changes, read more.  Many tax advisors will make sure to let their clients know about any changes that may impact them, but it doesn’t always happen.  It’s always a good idea to touch base with your tax advisor to make sure you are in compliance and avoid any big penalties or payouts later.

Two Business Trends for 2011

Now that the new year is upon us, there are a lot of articles and blogs on reviewing the past year, updating business goals, making resolutions and hot topics for the next year.  Two popular topics for entrepreneurs to watch in 2011 are 1) S.E.O., as in Social Media, E-Commerce and Online Services and 2) Creative bootstrap financing for start-up ventures.

The first trend is something we’ve heard a lot of over the past couple of years and all indications are that Social Media, E-Commerce and Online Services are continuing to grow exponentially and entrepreneurs and small business owners can really tap into new markets and grow sales.  One of our local companies is in a fairly specialized industry, electrical auto parts, and has recharged business in the slow economy by adding internet sales – and they have grown their customer base world wide and are doing very well in overseas markets.

There are many no-to low-cost alternatives to entering the Social Media and E-commerce arena.  Facebook and Twitter are free and can be an effective tool for reaching new customers.  Creative, artistic entrepreneurs can use Etsy and retail-driven businesses can utilize eBay to market their wares.  In addition, there are easy templates and programs to help even the most non-technical person create websites and e-newsletters.  WordPress and Constant Contact are two that we use and are extremely happy with.  There are also websites like Webstarts – ‘no programming experience needed’ to make a free website and it walks you through how to get a domain name and develop a basic website.  Not internet savvy?  There’s no time like the present to learn.  Take a class, visit the library or ask a mentor, friend, or your child to help you!

The second hot topic for 2011 is creative bootstrap financing.  Bootstrap financing is basically coming up with your own money (i.e., savings, borrowing from relatives) to fund or start your business venture.  Credit is tight, government-backed loan programs require a substantial down payment and many rural areas do not have access to angel financing or venture capital groups. Grants are few and far between.  Many entrepreneurs are looking for alternatives and there are a few interesting ideas out there.

For those entrepreneurs who only need a small amount, say $10,000, to get up and going, there are some interactive and public options out there.   Kickstarter.com has a very cool concept of allowing entrepreneurs to request funds for a specific project and people can donate and then watch the progress both of collecting funds for their venture and the project itself.  Say you’d like to donate to an artist, you can search for projects by region or type, pledge an amount, and then watch the project to fruition.    FriendFinder is entering the VC arena and investing in technology companies with FriendFinder Ventures.  Another novel tactic is to take a grassroots  approach with friends and family for the good of the cause and request they become ‘investors’ or make a donation, for example if you get 100 people to donate $100, that $10,000 could be the capital you need to get started.

Buyer beware though – research before diving into these and if something sounds too good to be true, it probably is.  Before you wire $1,000 to Jamaica so some stranger can collect on a winning lottery ticket, you may want to do your homework.

Above all, the new year holds a lot of promise for entrepreneurs, existing companies and small business in Yakima County.  Take advantage of the resources available to move your idea forward and grow your business – and be sure to contact us if we can offer more information or assistance.